Frédéric Leroux, head of the Cross-Asset team, and Rose Ouahba, head of the Rates team at Carmignac. (© DR)
The managers of the management company have taken on risk since mid-October, anticipating a rise in equities and an easing on the interest rate front.
Carmignac’s management team believes the time has come to increase the weightings in equities and corporate bonds.
Frédéric Leroux, head of the Cross-Asset team, notes extreme pessimism and a fall in valuation multiples which favors a return to equities.
The stock markets have indeed suffered from the rise in prices and interest rates. But the peak of inflation seems close in the short term, which should favor growth stocks that have been very much under attack in recent months.
A short-term spike in inflation
In the coming months, the risk of recession will dampen investors’ appetite for more cyclical companies, whose profits are expected to decline in 2023.
Looking further ahead, the manager believes the market is underestimating the sustainability of inflationary pressures.
The rise in prices should be fueled in the years to come by more demand and less supply, a fall in the number of savers linked to the aging of the population, a decline in world trade and productivity, a lesser effect of the online trading on falling prices, etc.
Taking advantage of the low point reached in mid-October on the markets, equity exposure rose in a few days from 3% to 36% of the allocation of the Carmignac Patrimoine fund (with a maximum of 50%
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