FP Carmignac Global Equity Compounders: Harnessing the power of time
FP Carmignac Global Equity Compounders, our sustainable investment fund focused on high-quality companies, turned 4 this year – an occasion to take a look back at its performance so far.
Sources: Carmignac, Morningstar; data for the A GBP Acc share class at 31/05/2024.
1Reference indicator: MSCI World (USD) (net dividends reinvested).
2Morningstar category: Global Large-Cap Growth Equity.
Time is an ally for…
INVESTORS
Anyone who invests in equities needs to have a long-term view. Data show that investors who keep their holdings for long periods are less likely to experience losses, thanks largely to the effect of compounding. The concept of compounding – generally thought of in terms of interest – is simple: when you place your money in an interest-bearing account, you earn interest not only on your initial investment, but also on the interest you accumulate along the way. Or in other words, the more time that passes, the more interest you’ll earn on your interest.
BUSINESSES
We target only high-quality companies with a track record of stable, high profit margins and that reinvest their earnings in future growth. Time works to the benefit of these companies, as it lets them reap the rewards of their capital investments and anchor their dominant position through innovation and R&D. Over time, their capital investments have an effect similar to that of compounded interest.
Taking Microsoft as an example, the company introduced its Azure cloud computing service in October 2008 – right in the middle of the subprime crisis. Yet five years later, Azure generated $1 billion in revenue for Microsoft and it’s now the firm’s largest revenue stream, bringing in $70 billion in 2023. With Azure, Microsoft was able to diversify its business model and create additional growth drivers by reinvesting wisely.
Source: Bloomberg, May 2024.
OUR FP CARMIGNAC GLOBAL EQUITY COMPOUNDERS FUND
As a quality-focused investor, we must be able to identify promising businesses and then be patient as they grow and develop. To that end, we use a proprietary investment process developed by Mark Denham over 20 years ago. The process acts like a compass, guiding us so that we can ensure the companies we select consistently meet our criteria.
Despite the many challenges encountered over the past five years – including the biggest sector rotation in equity markets in a decade – time has worked in our Fund’s favour. Not only have we outperformed global equities, but we’ve also made up for the decline in 2022. Our success can be attributed primarily to our patience and disciplined approach, which is reflected in the positions we’ve taken in our main long-term convictions. These companies have been in our portfolio for an average of over four years, illustrating how strongly we believe in their potential.
50% of the investments in our portfolio have been there since the Fund was launched in 2020
Examples of portfolio convictions held since 2020
Nvidia
This US-based company, initially known for its high-end graphics cards, has become a leading developer of artificial intelligence solutions.
Nvidia has gained 1,139% since it’s been in our portfolio.
Novo Nordisk
This Danish pharmaceutical company is a pioneer in its field and the world’s leading developer of diabetes treatments. We were impressed by the firm’s innovative approach to R&D, as very few companies have the explicit goal of curing the very disease that supplies most of their revenue. Yet that’s exactly what Novo Nordisk has set out to do with its Wegovy weight-loss drug.
Novo Nordisk has gained 352% since it’s been in our portfolio.
We aim to select companies that are capable of responding to tomorrow’s challenges. That’s why we not only apply financial criteria, but also make sure our investments are aligned with the United Nations Sustainable Development Goals.
![[Management Team] [Author] Denham Mark](https://carmignac.imgix.net/uploads/NextImage/0001/18/%5BManagement-Team%5D-Denham-Mark.png?auto=format%2Ccompress&fit=fill&w=3840)
Mark Denham
FP Carmignac Global Equity Compounders in a nutshell
Discover the Fund’s main features and benefits through the words of the Fund ManagersWatch the videoFP Carmignac Global Equity Compounders A GBP ACC
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 6/7
- SFDR - Fund Classification
- Article -
*Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time.
Main risks of the fund
Fees
- Maximum subscription fees paid to distributors
- 0,00%
- Redemption Fees
- 0,00%
- Conversion Fee
-
- Ongoing Charges
- 0.90%
- Management Fees
- 0,82% EXT
- Performance Fees
-
Footnote
Performance
| FP Carmignac Global Equity Compounders | 23.1 | 22.6 | -19.0 | 21.0 |
| Reference Indicator | 19.8 | 22.9 | -7.8 | 16.8 |
| FP Carmignac Global Equity Compounders | + 22.6 % | + 5.9 % | + 13.3 % |
| Reference Indicator | + 27.3 % | + 10.2 % | + 15.7 % |
Source: Carmignac at 29 Nov 2024.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).
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