INVESTMENTS & PENSIONS
IRON ORE
Demand for iron ore and steel comes largely ( 60 %) from Chinese demand and within China real estate and construction accounting for 50 % of such demand - this being largely consistent in the rest of the world as well . And a real interest rate at 150 basis points across most of the world has unnerved real estate markets which are not expected to resurrect any time soon . As such we are negative on the commodity .
COPPER
China accounts for 60 % of copper demand yet only 25 % comes from construction , the rest ( 40 % or so ) coming from networks and infrastructure . As such we are much more constructive on copper . Even more so as demand in the rest of the world is strong . India and Asia are booming with strong growth rates and huge infrastructure related investments and hence local demand is growing at double digits . The red metal is known for being a key commodity for the green transition , but in fact it is also seeing surging demand from military and armament which accounts for less than 5 % of global demand today but is also growing fast . Such a favourable backdrop coupled with constraints on supply are leading copper prices to holding better than most other industrial metals , we see an upward looking trajectory going forward .
GOLD
Gold is trading at all-time highs having broken the 2100 USD an ounce ceiling recently . We see a combination of cyclical and structural factors in favour of gold . Prospects of Central Banks lowering policy rates is expected to be favourable as it lowers the opportunity cost of holding yielding assets . Gold is supported by the emergence of a multipolar world and the increasing central banks activity in growing their gold reserves - by more than 1,037 tons last year ! The People ’ s Bank of China has added gold to its reserves for a 16th consecutive month which now accounts for 4 % of its reserves , compared to 60 % for Italy or France .
Source : Carmignac , Bloomberg as of March 2024
HOW DOES IT AFFECT OUR INVESTMENTS ?
In our equity funds , such views are mainly reflected in Carmignac Portfolio Climate Transition ( with 10 % exposure to transitioners ) and in FP Carmignac Emerging Markets ( indirect exposure via Brazil , Chile and Mexico for 25 %).
In our fixed income funds , such views are reflected via our credit investments ( where the energy sector accounts for ~ 20 % of our credit investments ), our allocation to countries which have a significant portion of their activity linked to commodities ( Mexico , Chile , Brazil notably ) accounts for 10 % to 15 % of the total modified duration .
Regarding FX exposure for those funds which can make active use of currencies accounts for ~ 15 %.
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* Source : Carmignac , 11 / 03 / 2024 . MARKETING COMMUNICATION . Please refer to the KIID / prospectus of the fund before making any final investment decisions .
This material was prepared by Carmignac Gestion , Carmignac Gestion Luxembourg or Carmignac UK Ltd and is being distributed by Carmignac Gestion Luxembourg in the UK . This material may not be reproduced , in whole or in part , without prior authorisation from the Management Company . This material does not constitute a subscription offer , nor does it constitute investment advice . The information contained in this material may be partial information and may be modified without prior notice . Access to the Funds may be subject to restrictions regarding certain persons or countries . The Fund is not registered for retail distribution in Asia , in Japan , in North America , nor is it registered in South America . Carmignac Funds are registered in Singapore as restricted foreign scheme ( for professional clients only ). The Fund has not been registered under the US Securities Act of 1933 . The Fund may not be offered or sold , directly or indirectly , for the benefit or on behalf of a « U . S . person », according to the definition of the US Regulation S and FATCA . Company . Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV , an investment company under Luxembourg law , conforming to the UCITS Directive . FP CARMIGNAC ICVC ( the “ Company ”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the FCA with effect from 04 / 04 / 2019 and launched on 15 May 2019 . The risks , fees and ongoing charges are described in the KIID ( Key Investor Information Material ). The KIID must be made available to the subscriber prior to subscription . The subscriber must read the KIID . Investors may lose some or all their capital , as the capital in the funds are not guaranteed . The Funds present a risk of loss of capital . The Management Company can cease promotion in your country anytime . Investors have access to a summary of their rights in English at the following link .
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