The return to grace of an essential asset class »fibee

In this detailed analysis. Moreover, Carmignac highlights the renewed assets of the company credit in a context of still high rate and persistent volatility. Meanwhile, Carried by historically attractive yields – up to 6.2 % for its Carmignac Portfolio Credit fund – this asset class again seduces investors in search of performance and stability. Meanwhile, Thanks to active management taking advantage of the ineffective bond market. In addition, particularly in the banking sector, Carmignac highlights credit resilience to recent macroeconomic tremors. Nevertheless, A convincing advocacy to reposition credit as a strategic pillar in diversified allowances.

High yields despite the tightening of credit margins – Return grace essential asset class

• Business bonds have experienced a substantial assessment. However, of their performance since the inflationary shock of 2022thus making it possible to revitalize the asset class whose portage was shortlisted during the previous decade.
• If the yields return grace essential asset class have experienced some normalization in the last twenty-four months thanks to the tightening of credit margins. However, Current market conditions argue for a certain stabilization on these historically high levels.
• Indeed. Consequently, Market valuations incorporate rate drop anticipations that seem generous for the coming monthswhile credit margins are evolving at levels that no longer justify additional tightening.
• We thus believe that this asset class therefore offers an unprecedented opportunity for investors to build yield pockets greater than 3 % on the spectrum Investment Grade. Furthermore, 5 % on high -efficiency credit, and even more for funds actively managed like Carmignac Portfolio Credit (see Chart 1), whose annual return since its launch in 2017 is similar to the average performance of European actions over the past 20 years.

Graphic 1: clues yields Investment Grade And high yield revrete above their historical averages as well as that. Consequently, of our Carmignac return grace essential asset class Portfolio Credit Fund

Source: Carmignac, Ice Bank of America, Bloomberg, 30/06/2025. Therefore, YTW: Yield-to-Worst, yield at worst. For example, This is the lowest actuarial return rate calculated on all the reimbursement hypotheses for bonds constituting the portfolio. Moreover, Credit Investment Grade: Ice Bofaml Euro Corporate; High return credit: Ice Bofaml Euro High Yield. Nevertheless, Past performance does not prejudge future performance. They are clear of costs (excluding any entry fees applied by the distributor).

A resilience proven during the last market events – Return grace essential asset class

• The credit has won a place of choice within the investor allowance thanks to the increase in on -board returns. Replacing other classes of active active ingredients such as real estate or deposit accounts.
• This new essential brick status within an allowance has strengthened the asset class on its technical aspect. the abundance of incoming flows return grace essential asset class to better absorb market eventswhether of a microeconomic (lack of a transmitter) or macroeconomic (war, political event).
• If we have to expect a rise in defect rates. We believe that the market is now able to absorb this type of event without contagion effectlike the recent major defects in recent months (Altice, Atos, Ardagh, Intrum, etc.) which have not had any repercussions on the other components of the indices.
• Since the start of the year. Credit assets have thus displayed a very limited loss unlike other assets during the various market events that have followed one another (See Chart 2), a trend which, in our view, should continue with regard to the robustness of the technical factors.
• Finally. if historically the periods of recession are synonymous with credit underperformance, we believe that this risk is currently low regarding current policies of budget reminders on both sides of the Atlanticbut also return grace essential asset class on the room for maneuver available to central bankers To support the economy in the event of degradation of the economic situation.

Graphic 2: Elasticity at the risk of the credit asset class has improved considerably thanks to better oriented technical factors

Source: Carmignac, Bloomberg, MSCI, 30/06/2025. Credit Investment Grade: Ice Bofaml Euro Corporate. High return credit: Ice Bofaml Euro High Yield; Sovereign obligations: Bloomberg Global Aggregate Treasuries Total Return Index Hedged EUR ; Actions Monde : MSCI World Net Total Return EUR Index.

The dispersion remains high within the asset class

• The deposit of obligations is substantially wider than that of actions. As an illustration, in the United States, there are more than 500,000 obligations for only 8,000 stocks in circulation all indices combined¹.
• This abundance of offer generates market ineffective people which offer relevant opportunities to bond active management return grace essential asset class which can capture. complexity bonuses linked to the specificities of certain companies.
• Indeed. multiple transmitters wishing to raise capital on the bond market are forced to offer excess yield in order to compensate for poor market coverage Carried out by brokers, analysts and investors.
• This phenomenon is particularly marked for companies which emit only one strain on the bond marketand which are therefore mostly ignored by investors. often absent from the clues.
• These ineffectives thus make it possible to build Bond strategies offering high remuneration without degrading the risk.

Graph 3: Evolution of yield at maturity of three obligations – Compression of the complexity premium of transmitters

Source: Carmignac, Bloomberg, 30/06/2025. Past performance is not necessarily indicative of future performance.
The portfolio can be changed without notice. The reference to certain values. financial instruments is given as an illustration to highlight certain return grace essential asset class values present or which have been present in the portfolios of the Carmignac range. It is not intended to promote live investment in these instruments, and does not constitute investment advice. The management company is not subject to the prohibition to carry out transactions on these instruments before the dissemination. of communication. The portfolios of the Carmignac funds are subject to change at any time.

Financial obligations at the heart of our strategy

• Among the various cohorts of values available to investors in business bonds. The finance sector presents, in our view, of the notable characteristics to capture an attractive return.
• Indeed. this sector, which remains stigmatized since the major financial crisis, Offers an interesting retired risk premium and a high deposit depth.
• European banks have indeed carried out risk reduction work while strengthening their assessment in order to meet regulatory requirements. this who has led return grace essential asset class them to almost triple their equity ratio since 2008while benefiting from a more virtuous environment that has enabled them to improve their profitability (Chart 4).
• The dynamics are moreover favorable with a consolidation of the coming industry consecutively to the waves of announcements relating. to domestic but also cross -border merger operations.
• All of these arguments thus argues to explore the entirety of the capital structure of European banks. notably through subordinate titles which offer high yield yields for a generally issuing rating Investment Grade.

Chart 4: European banks have improved their financial solidity and profitability over the last decade

Source: European Central Bank, 06/30/2025.

An intact performance potential

• Business bond funds are alternatives more than ever for the construction. of a diversified allowance in our opinion.
• In addition to offering a proven resilience to the different return grace essential asset class episodes of stress. These assets provide a much higher return to other defensive investment solutions (Structured products, Euros funds, term accounts, real estate media).
• Beyond the profit offered by this high recurring yield. The abundance of primary market emissions should continue to offer us a generation of alpha consequent through the capture of complexity premiums.
• With these observations. it therefore seems obvious to us to consider credit within an allowance as it seems to be The only asset class combining increased visibility in an uncertain environment and a positive real return.
• This is all the more valid through active management such as Carmignac Portfolio Credit. which is capable of benefiting from the ineffectives specific to this asset class, displaying a yield at maturity at the end of June 6.2% for an average bbb- And a net exposure to high -performance credit cash for less than a quarter of. net assets.

return grace essential asset class

Chart 5: Evolution of the yield and performance of Carmignac Portfolio Credit A EUR ACC since the launch of the fund (07/31/2017)

Source: Carmignac, 30/06/2025. Reference indicator: 75% of the ICE Bofaml Euro Corporate (ER00). 25% of the Ice Bofaml Euro High Yield index calculated with reinvested and rebalanced coupons quarterly.
A EUR ACC ISIN: Lu1623762843. The performance is clear of costs (excluding any entry fees taken by the distributor). Past performance is not necessarily indicative of future performance.

¹Source : Bloomberg, ICE Bank of America, World federation of exchanges, SIFMA au 30/06/2025.