FP Carmignac European Leaders returns since inception vs peer group and comparator benchmark
Since the launch of the Carmignac European Leaders fund in May 2019, the portfolio nearly doubled the returns of the benchmark and the average manager in the peer group. The portfolio's process of investing in a core set of high-quality growth names – which have demonstrated an ability to maintain profitability through business cycles, supplemented by a sprinkling of highly innovative firms and a strict ESG framework – has yielded strong results. While the fund is only three years old, manager Mark Denham has an extensive track record of outperformance in European equities at both Carmignac (as manager of the highly successful Grande Europe fund since 2016) and at Aviva from 2012 onwards.
Risk metrics since inception
While the fund has a higher standard deviation than the peer group and index since launch, this is largely to be expected given the scale of outperformance and the portfolio's avoidance of parts of the market that don't conform to its ESG standards. Crucially, the portfolio has managed to limit losses to less than both peer group and index, with the maximum drawdown of 28% since launch in the top quartile.
Total return rankings
The fund enjoyed a phenomenal start, generating the highest returns in the peer group from its launch in May 2019 to year's end, then backed that up with top decile returns in 2020 with its blend of high-quality, ESG-conscious stocks, thriving in the early days of the pandemic. However, the going has been harder since, with the fund struggling as a result of high-quality growth stocks being shunned in favour of their value counterparts from the middle of 2021. Denham doesn't hide from this fact; the portfolio doesn't invest in cyclical areas like banks, energy and materials because they fall short of the fund's threshold of high and consistent profitability in addition to ESG-related concerns. However, he points to his long track record of managing European equities in this way and the opportunities this has presented in initiating positions in companies that were previously too expensive. These include leading dental implant manufacturer Straumann and, in the innovation space, there is Genmab – a company specialising in blood cancer drugs.
Discrete calendar year returns
Mark Denham and Europe Excluding UK: Long-term track record
Since Mark Denham first started managing money in the Europe Excluding UK peer group, he has significantly outperformed the index and the average manager. While taking a three-year break from managing retail money in the sector, he continued his impressive form from Aviva. And his track record in the pan-European equity sector has a much smaller gap of four months. He also demonstrated his ability to add value consistently above the European equities index over the long term.
Risk-return profile since inception: Maximum drawdown vs total returns
Europe Excluding UK
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When we compare the fund's total returns and maximum drawdown to its peers since launch, we can see that it has delivered a higher risk-reward than the 10 largest funds in the sector, beating out competition from BlackRock, Janus Henderson, Fidelity and Jupiter.
Source: Morningstar, as at 15.05.2022. Risk-adjusted percentiles are calculated in GBP gross of tax, bid to bid, ignoring the effect of initial charges and with income reinvested at the ex-dividend date. Peer group rankings are based upon Morningstar's global EAA Europe ex-UK Equity category of Open Ended Funds and ETFs, with the oldest shareclass selected, and the A GBP acc share class of the FP Carmignac European Leaders in place of the default B GBP Acc shareclass. The bubble size represents relative market share, based on total assets under management in Morningstar's peer group.
Source: Morningstar, as at 15.05.2022. Risk-adjusted percentiles are calculated in GBP gross of tax, bid to bid, ignoring the effect of initial charges and with income reinvested at the ex-dividend date. Peer group rankings are based upon Morningstar's global EAA Europe ex-UK Equity category of Open Ended Funds and ETFs, with the oldest shareclass selected, and the A GBP acc share class of the FP Carmignac European Leaders in place of the default B GBP Acc shareclass. The bubble size represents relative market share, based on total assets under management in Morningstar's peer group.
FP Carmignac European Leaders: Top 10 holdings