M A N A G E M E N T R E P O R T

Transcription

1 MANAGEMENT REPORT THIRD QUARTER 2017

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3 THE LETTER Paris, 12 October 2017 Dear Investor, The slow but steady climb in stock prices has continued to confound even the direst doomsday prophecies. Whether prompted by Donald Trump s unseemly outbursts early in the year, by the perils of resurgent European populism this past spring or by the prospect that global liquidity would dry up during the summer, somehow, none of the underlying fears have been strong enough to stem the market rally. Does that leave equity markets in a more vulnerable state today? A first point worth noting is that, translated into euros, the MSCI World Index has gained only 4.6% so far this year. Nothing to write home about. In addition, if you look at global stock prices in relation to corporate earnings over the period which are up 3.1% in euros it turns out that they show almost no change since the start of the year. Meanwhile, global economic growth forecasts for the coming twelve months have been revised upwards from 3.7% in January to 4%. The main drivers are improved sentiment in and towards Europe and easier financial conditions that have been a boon to emerging markets. So the question is whether upcoming action by the Fed and, to a lesser extent, the ECB will shrink global liquidity to the point of spoiling the party in equity markets. We doubt it will. Though the risk of monetary policy misfires can t be ruled entirely, there are such powerful deflationary forces at work on both sides of the Atlantic that both central banks inflation targets have become unattainable. And that makes the prospects of substantial hikes in their key rates seem highly unlikely. Needless to say, we would be worried about the US economy overheating in response to large-scale fiscal stimulus if we actually believed the Trump administration stood a decent chance of carrying out its tax reform plan. This all points to a rather reassuring outlook. Yours truly, Edouard Carmignac

4 OVERVIEW 5 Carmignac news EQUITY MANAGEMENT DIVERSIFIED MANAGEMENT PROFILED MANAGEMENT FIXED INCOME MANAGEMENT 6 Carmignac 10 Carmignac range of funds 12 Macroeconomic analysis and investment strategy 16 Carmignac Investissement 19 Carmignac Portfolio Grande Europe 22 Carmignac Euro-Entrepreneurs 25 Carmignac Emergents 28 Carmignac Portfolio Emerging Discovery 35 Carmignac Patrimoine 43 Carmignac Portfolio Emerging Patrimoine 47 Carmignac Euro-Patrimoine 51 Carmignac Investissement Latitude 53 Carmignac Profil Réactif 100 Carmignac Profil Réactif 75 Carmignac Profil Réactif Carmignac Portfolio Unconstrained Global Bond 59 Carmignac Sécurité 68 Carmignac Portfolio Capital Plus 73 Carmignac Court Terme 31 Carmignac Portfolio Commodities CARMIGNAC GESTION Portfolio management company AMF agreement n GP of 13/03/1997 CHAIRMAN AND CHIEF EXECUTIVE OFFICER: Edouard Carmignac DEPUTY CHIEF EXECUTIVE OFFICER: Eric Helderlé COMPLIANCE : CARMIGNAC GESTION: Ernst & Young and Cabinet Vizzavona FRENCH-DOMICILED FUNDS: KPMG and Cabinet Vizzavona CARMIGNAC GESTION LUXEMBOURG UCITS management company Subsidiary of Carmignac Gestion CSSF agreement of 10/06/2013 COMPLIANCE : CARMIGNAC GESTION LUXEMBOURG: Ernst & Young Luxembourg LUXEMBOURG-DOMICILED FUNDS: PricewaterhouseCoopers

5 CARMIGNAC NEWS Fund awards received: uro Fund Award Germany February 2017 Carmignac Patrimoine Best Global Fund 20 years Carmignac Investissement Best Euro-Denominated Equities Fund 20 years Carmignac Sécurité Best Euro-Denominated Short-Term Bond Fund 10 years, 20 years L Agefi France June 2017 Carmignac Sécurité Actifs d Or de la Distribution 2017 Read about all of our awards (1) on Citywire Switzerland March 2017 Charles Zerah Best Global Bond Manager TFF-Bloomberg Best Fund Awards 2017 Taiwan March 2017 Carmignac Portfolio Patrimoine Best Global Asset Allocation Fund Lizzie Sadin wins the 8th annual Carmignac Photojournalism Award Carmignac has announced the winner of the 8th annual Carmignac Photojournalism Award: the Frenchwoman Lizzie Sadin for her story on trafficking in women in Nepal. Following a call for applications in July 2016, the selection panel chaired by Monique Villa selected Sadin s work as a means to give Nepalese women a voice. The photojournalist came back from three months in the field, from February to May 2017, with a deeply moving testimony on gender-based human trafficking. Her photos will be showcased in an exhibition at the Hôtel de l Industrie in Paris from October 20, The exhibition will be coupled with the publication of a monograph. In 2009, Fondation Carmignac established the Carmignac Photojournalism Award with the aim of funding and promoting an investigative photo report on human rights violations each year. Carmignac s long-term SRI commitment Carmignac is no newcomer to socially responsible investment (SRI). Mindful of our corporate duty to our investors and our stewardship as a leader in the European fund management industry and empowered through our independent spirit and attachment to transparency we have been investing responsibly ever since our firm was founded in Carmignac is a signatory of the United Nations Principles of Responsible Investment (UNPRI) and, as a French investment firm, is required to comply with the criteria set forth in French legislation (Article L of the French Monetary and Financial Code). In addition to our strong convictions on ESG issues, most of our Funds follow a socially responsible approach targeted to their specific investment universe and the outlook of their managers. A good example can be found in the practices of Carmignac Emergents. The Fund s focus on investing in underpenetrated sectors heightened by its managers personal commitment to ESG issues ensures that it invests in sustainable growth themes. Publication of the net asset values on the Internet (daily from 3pm CET) The company s financial intermediary selection policy, conflicts of interest management policy, voting policy, and disclosure of intermediary fees and commissions are available on its website: SPOTLIGHT ON Carmignac Euro-Entrepreneurs Carmignac Euro-Entrepreneurs is a small- and mid-cap equity UCITS fund. Through a disciplined, bottom-up investment process, we aim to seize the best investment opportunities within this broad and under-researched universe. Stock-picking focuses on names with the best asymmetric risk/return profiles. The Fund has been given a four-star overal lrating by Morningstar (1), reflecting its track record of delivering above-average risk-adjusted returns for its category. (2) Moreover, it ranks in the top quartile for its one-year performance and performance since the start of the year. The Funds present a risk of loss of capital. Past performance is not necessarily a guide to future performance. The prospectus, KIID (Key Investor Information Document), rules/articles of association, annual and half-yearly reports for the funds are available on our website (1) Reference to a ranking or award does not constitute a guarantee as to future rankings or awards for these funds or the asset management company. (2) Morningstar category: Europe Mid-Cap Equity. Share class: A EUR acc. Source: Carmignac, Morningstar, 30/9/2017. Morningstar Rating : 2017 Morningstar, Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. CARMIGNAC THIRD QUARTER 2017 / 5

6 CARMIGNAC Over 25 years of independence and conviction Founded in January 1989 by Edouard Carmignac, Carmignac is now one of Europe s leading asset managers. Its capital is held entirely by its managers and staff. In this way, the company s long-term viability is ensured through a stable shareholding structure, reflecting its spirit of independence. This fundamental value ensures the freedom required for successful and renowned portfolio management. Carmignac offers a limited range of global, specialised and diversified funds, trying to meet its investors needs in the best way possible. As part of our international expansion, we are currently present in Luxembourg, Frankfurt, Milan, Zurich, Miami, Madrid and London. Our Funds are actively marketed in 14 countries: France, Luxembourg, Belgium, Netherlands, Spain, Italy, Switzerland, Germany, Austria, United Kingdom, Ireland, Sweden, Taiwan and Singapore, for professional clients only. Risk Managers The ability to manage risks has always been part of Carmignac s management style. In constantly changing market conditions, and to meet our clients needs in the best possible way, we are continually improving our risk analysis, monitoring and management processes. This allows each member of the management team and each Carmignac employee to use the most effective resources every day. This risk management culture is inherent to our approach and is therefore applied to all of our funds, while respecting the specific risk profiles of each one. EUR 60 billion of assets under management EUR 2.2 billion of equity capital 284 employees Source: Carmignac, 30/09/ / Management report CARMIGNAC THIRD QUARTER 2017

7 CONVICTION-BASED MANAGEMENT An international development strategy Strategic Development Committee Eric Helderlé Managing Director France Chairman Luxembourg Christophe Peronin Chief Operating Officer Deputy Managing Director France Davide Fregonese Global Head of Sales Managing Director Luxembourg Yon Elosegui Head of Strategic Marketing Managing Director Luxembourg Maxime Carmignac Managing Director London Pascale Guillier General Secretary Didier Saint-Georges Managing Director Member of the Investment Committee Frédéric Leroux Global Manager Head of Cross Asset Team Rose Ouahba Head of Fixed Income Team Sophie Derobert Head of Human Resources Ivan Monème Head of Communication Cyril de Girardier Chief Financial Officer Controlled expertise Active management seeking to anticipate rather than experience market trends. Careful risk management, reflected in a diversification of assets and fine-tuning of exposures. An opportunistic management strategy, reflecting our managers convictions rather than market indices. In-depth local knowledge, which lies at the heart of our strategy. It is based on extensive knowledge of local conditions and steady relations with the directors of the companies in which we invest. A completely international approach, mirroring our fund management team of international experts, so that investment opportunities can be seized on marketplaces all over the world. Transparency at a management and portfolio level. This ensures that our investment strategies are completely clear, gaining our customers trust. International development Ariane Tardieu Head of Country, France Marco Fiorini Head of Country, Switzerland Mischa Cornet Head of Country, Netherlands and Luxembourg Frank Ruettenauer Head of Retail Business Development Germany and Austria Giorgio Ventura Head of Country, Italy Ignacio Lana Head of Country, Spain Herwig Bogaerts Head of Country, Belgium Mikael Fellbom Head of Country, Nordic Countries David Tavares Head of US Offshore & LATAM Nikolay Troptchev Director, Business Development Asia CARMIGNAC THIRD QUARTER 2017 / 7

8 A TEAM OF EXPERTS Discussion, sharing and teamwork are essential pillars of quality fund management focused on generating performance. Carmignac has created an international management team uniting more than 10 different nationalities. Each member brings considerable experience acquired all over the world. Mutual development stems from the daily sharing of knowledge and skills. The level of experience and synergies within the team are strengths that allow us to successfully handle any market conditions. Conviction as a performance driver 8 / Management report CARMIGNAC THIRD QUARTER 2017

9 INTERNATIONAL FUND MANAGEMENT Expertise in all asset classes EDOUARD CARMIGNAC, CIO EQUITIES FIXED INCOME CROSS ASSET INVESTMENT SOLUTIONS PORTFOLIO ADVISORS David Older, Team Leader, 19 years experience Technology, Media & Telecommunications Huseyin Yasar, Fund Manager, 9 years experience Henrik Fridlund, Analyst, 5 years experience Pau Guzman Alcon, Analyst, 3 years experience European Equities Mark Denham, Team Leader, 23 years experience Malte Heininger, Fund Manager, 11 years experience Vincent Steenman, Fund Manager, 13 years experience Emerging Equities Xavier Hovasse, Team Leader, 18 years experience David Young Park, Fund Manager, 13 years experience Haiyan Li-Labbé, Analyst, 16 years experience Michel Wiskirski, Analyst, 9 years experience Commodities Michael Hulme, Team Leader, 20 years experience Simon Lovat, Analyst, 17 years experience Sector Analysts Antoine Colonna, Global Consumer, 25 years experience Nan Ou, Global Consumer, 4 years experience Matthew Williams, Finance, 23 years experience Vincent Steenman, Industry, 13 years experience Rose Ouahba, Team Leader, 22 years experience Charles Zerah, Fund Manager, 22 years experience Carlos Galvis, Fund Manager, 19 years experience Keith Ney, Fund Manager, 18 years experience Julien Chéron, Fund Manager, 17 years experience Joseph Mouawad, Emerging Markets Analyst, 12 years experience Mattia Parolari, Quantitative Analyst, 11 years experience James Blanning, Quantitative Analyst, 4 years experience Nader Awada, Multi-Strategy Analyst, 11 years experience Pierre Verlé, Head of Credit, 13 years experience Alexandre Deneuville, Credit Analyst, 10 years experience Florian Viros, Credit Analyst, 10 years experience Frédéric Leroux, Team Leader, 28 years experience Laurent Chebanier, Country Risk Analyst, 19 years experience Obe Ejikeme, Quantitative Equity Analyst, 14 years experience Ozgur Kalenci, Junior Portfolio Manager, 9 years experience Benoît Nansot, Team Leader, 17 years experience Pierre-Edouard Bonenfant, Fund Manager, 6 years experience Yassine Basraoui, Fund Manager, 10 years experience Mathieu Decrop, Fund Manager, 7 years experience Nicolas Pierre, Quantitative Analyst, 5 years experience François Escoffier, Fund Manager, 20 years experience Cyrille Corso, Fund Manager, 17 years experience François Poydenot de Pontonx, Investment Solutions Manager, 17 years experience Didier Saint-Georges, Team Leader, 30 years experience Sandra Crowl, 26 years experience Jean Médecin, 23 years experience Gergely Majoros, 15 years experience CARMIGNAC THIRD QUARTER 2017 / 9

10 CARMIGNAC RANGE OF FUNDS EQUITY MANAGEMENT Our equity fund management is based on a long-term investment approach. Macroeconomic analysis identifies current and future global economic growth drivers to help us decide on investment themes. The constant search for the best investment opportunities involves a selection of securities with strong growth potential. Net Assets as of 30/09/2017 Fund manager(s) Risk scale (1) Recommended minimum investment horizon Legal structure Investment universe Reference indicator (2) Carmignac Investissement Edouard Carmignac 5 5 Years French Mutual Fund International equities MSCI AC World NR (Eur) Carmignac Portfolio Grande Europe Mark Denham and Vincent Steenman 5 5 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV EU members/candidates equities and additionally, Russian and Turkish equities Stoxx 600 NR (Eur) Carmignac Euro-Entrepreneurs Mark Denham and Malte Heininger 5 5 Years French Mutual Fund EU small and mid-cap equities Stoxx 200 Small NR (Eur) Carmignac Emergents Xavier Hovasse and David Young Park 5 5 Years French Mutual Fund Emerging markets equities MSCI Emerging Markets NR (Eur) Carmignac Portfolio Emerging Discovery Xavier Hovasse and David Young Park 5 5 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV Emerging markets small and mid capitalisations 50% MSCI EM SmallCap NR (Eur) + 50% MSCI EM MidCap NR (Eur) (3) Carmignac Portfolio Commodities Michael Hulme 6 5 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV International equities Commodities Carmignac Portfolio Commodities Index (3)(4) PROFILED MANAGEMENT Invested primarily in Carmignac funds, profiled funds benefit from the entire team s international expertise. A major advantage of this approach is that thanks to our in-depth understanding of each underlying fund, the level of equity risk exposure can be tactically adjusted in accordance with the fund manager s outlook and short-term market movements. Net Assets as of 30/09/2017 Fund manager(s) Risk scale (1) Recommended minimum investment horizon Legal structure Investment universe Reference indicator (2) Carmignac Profil Réactif Frédéric Leroux and Pierre-Edouard Bonenfant 5 5 Years French Fund of Funds International equities and bonds (between 0% and 100% of assets exposed in equity UCI) MSCI AC World NR (Eur) Carmignac Profil Réactif Frédéric Leroux and Pierre-Edouard Bonenfant 4 5 Years French Fund of Funds International equities and bonds (between 0% and 75% of assets exposed in equity UCI) 75% MSCI ACW NR (Eur) + 25% Citigroup WGBI (Eur) (3) Carmignac Profil Réactif Frédéric Leroux and Pierre-Edouard Bonenfant 4 3 Years French Fund of Funds International equities and bonds (between 0% and 50% of assets exposed in equity UCI) 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI (Eur) (3) 10 / Management report CARMIGNAC THIRD QUARTER 2017

11 DIVERSIFIED MANAGEMENT The management of our diversified funds combines our international equity and bond expertise. A perfect illustration of how effective flexible management can be, the three Patrimoine funds integrate long-term themes with the search for limited volatility. Net Assets as of 30/09/2017 Fund manager(s) Risk scale (1) Recommended minimum investment horizon Legal structure Investment universe Reference indicator (2) Carmignac Patrimoine Edouard Carmignac and Rose Ouahba 4 3 Years French Mutual Fund International equities and bonds 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI (Eur) (3) Carmignac Portfolio Emerging Patrimoine Xavier Hovasse and Charles Zerah 5 5 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV Emerging bonds and equities 50% MSCI EM NR (Eur) + 50% JP Morgan GBI EM (Eur) (3) Carmignac Euro-Patrimoine Malte Heininger 4 3 Years French Mutual Fund EU equities 50% Euro Stoxx 50 NR (Eur) + 50% Eonia compounded (3) Carmignac Investissement Latitude Frédéric Leroux 5 5 Years French Mutual Fund (5) Carmignac Investissement feeder Fund International equities with the option to participate in the futures markets to hedge up to 100% of the equity risk exposure of the master Fund MSCI AC World NR (Eur) FIXED INCOME MANAGEMENT Over the years, Carmignac has been able to hone its own style of bond expertise, which fits in perfectly with its investment philosophy. Conviction-based management supported by investment decisions made independently of reference indicators. Net Assets as of 30/09/2017 Fund manager(s) Risk scale (1) Carmignac Portfolio Unconstrained Global Bond Charles Zerah 4 2 Years Recommended minimum investment horizon Legal structure Investment universe Reference indicator (2) Sub-fund of Carmignac Portfolio, a Luxembourg SICAV International bonds JP Morgan GBI Global (EUR) (Accrued interest) Carmignac Sécurité Keith Ney 2 2 Years French Mutual Fund Bonds denominated in Euro Euro MTS 1-3 Y (Accrued interest) Carmignac Portfolio Capital Plus Carlos Galvis and Julien Chéron 2 2 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV Multi-strategy and multi-asset portfolio Eonia compounded Carmignac Court Terme Rose Ouahba 1 1 Day French Mutual Fund Short-term money-market investments denominated in Euro Eonia compounded (1) Risk scale from 1 (lowest risk) to 7 (highest risk), category 1 does not mean the investment is risk free. The risk category of this fund is not guaranteed and may change over time. (2) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. (3) Rebalanced quarterly. (4) Index calculated and composed of 45% MSCI ACWF Oil and Gas NR (Eur), 5% MSCI ACWF Energy Equipment NR (Eur), 40% MSCI ACWF Metal and Mining NR (Eur), 5% MSCI ACWF Paper and Forest NR (Eur) and 5% MSCI ACWI Chemicals NR (Eur) as from 01/07/2013. (5) Alternative investment fund. CARMIGNAC THIRD QUARTER 2017 / 11

12 MACROECONOMIC ANALYSIS AND INVESTMENT STRATEGY Global economic growth has continued to gain traction, with Europe and the emerging world powering the process. Despite persistently weak inflation, central banks in the United States and Europe will soon initiate monetary policy normalisation, enabling them to manage down the amount of cash in the system. We are unquestionably in the midst of a global economic upswing, one bolstered not only by market expectations of monetary policy normalisation, but also by the fact that political uncertainty hasn t even mildly dented market performance or the resilience of the US economy. Economic analysis Elaborating on our analysis of the first quarter, we wrote three months ago: Virtually coordinated announcements of policy normalisation by central banks, combined with strong recent US leading indicators and a global economy growing moderately but in relative sync, tend to validate our non-consensus expectation for a return to cyclical trends, including an expansionary phase that will be vigorous enough to force central banks to step in and apply the brakes. We also identified the flagging business cycle in the United States as the best bulwark against a sharp contraction in global liquidity while adding that the days when the Fed deliberately pursued policies that lagged behind the cycle out of fear of deflation and of stifling the recovery are over and done with. In our view, that perception of the economic environment still holds true on all essential counts. Global economic growth has continued to gain traction, with Europe and the emerging world powering the process. Despite persistently weak inflation, central banks in the United States and Europe will soon initiate monetary policy normalisation, enabling them to manage down the amount of cash in the system. We feel that the Fed s growing perplexity over the absence of inflation bears out that view, but we are still keeping a watchful eye out for any pick-up in prices that the current business cycle might generate. We are unquestionably in the midst of a global economic upswing, one bolstered not only by market expectations of monetary policy normalisation, but also by the fact that political uncertainty hasn t even mildly dented market performance or the resilience of the US economy. Soaking up liquidity (normalising) is putting it mildly Year-on-year change in the main central banks balance sheets ($bn) Projections 06/08 06/09 06/10 06/11 06/12 06/13 06/14 06/15 06/16 06/17 06/18 06/19 Fed ECB BoJ BPoC Total G4 total Source: Carmignac, 30/6/ Trillions of dollars 12 / Management report MACROECONOMIC ANALYSIS AND INVESTMENT STRATEGY

13 Sovereign bond yields show little change, while stock markets have been buoyed, as expected, by continuing signs of GDP growth and ongoing monetary policy easing. In the third quarter, our cyclical stocks (e.g., in the energy sector) partially made up for their weak performance early in the year and our stocks with good earnings visibility sustained their momentum, particularly those with continuing growth prospects like our tech stocks. Strengthened by a steadily improving global economic outlook, the euro tested a $1.21 exchange rate that is, 17% above the low it hit in January before retreating slightly. The next few weeks will be decisive for the global economy and markets. The Fed will start scaling back the reinvestment of coupons and maturing securities on its balance sheet, while the ECB will specify the pace at which it plans to trim its asset purchases. Over a 30-month period, the combined effect of those two shifts towards monetary policy normalisation could cut annual cash injections into the world economy from $2.5 trillion to zero. Over the past decade, the unorthodox policies implemented by central banks seemingly ploughed unlimited amounts of liquidity into the system, creating a serious and widespread cash addiction at a time when the ongoing deleveraging of the global economy has continued to hold down long-term economic growth and inflation. We are therefore inclined to doubt that the central banks will move as fast as they have promised. But even a partial return to normal monetary policies will affect the economy. The main arguments advanced for such a return are the threat of inflation in the United States which could be sparked by wage increases, given that the unemployment rate is barely over 4% and the sense that the world s regions are growing largely in sync, as evidenced by the vast majority of leading economic indicators. But does that apparent synchronisation, combined with a lull in the European crisis, really offer central banks the opportunity they ve been awaiting for so long? Or does the announced shift in monetary policy stem rather from a misperception, with the Fed overestimating the strength of GDP growth in the United States? Even though the Trump administration has yet to implement a single measure to boost growth, the US economy has continued to power ahead at an annual rate of roughly 2.5%. Consumer spending has been boosted by a declining savings rate, which currently stands at 3.6% of disposable income, by further growth in consumer credit, which has climbed to a record 27% of disposable income, and by the lagged effect of the disinflation seen since March. Capital investment too has increased by 3.6% yearon-year, but growth in new orders for durable goods a harbinger of capital spending weakened from an annualised rate of 10% to 5% over a six-month period. US export growth followed a similar course over the same time-span, falling to zero. In fact, that situation is shared today by a good many export economies around the world. However, there is substantial divergence on leading indicators for manufacturing activity, making it hard to analyse trends with any degree of certainty. The ISM Manufacturing Index recently hit a 20-year high of 60.8 in September, for example, whereas the US Markit Manufacturing PMI was flirting with its lows of recent years. Be that as it may, our take on the US economy is that consumer spending as a growth driver is largely spent and capital investment is gradually running out of steam. The only thing likely to keep GDP growth up in the 2.0% to 2.5% range (its average for the past decade) is the prospect of tax reform. The withdrawal of liquidity orchestrated by the Fed at a monthly clip of $10 billion initially and then $20 billion from next January onwards is bound to have a negative impact on growth. The resulting slowdown may be offset for a while by further expansion in Europe and the emerging world, but this is still no time for complacency. Global economic growth is increasingly dependent on how adroitly the Fed manages the shift. Europe today has the benefit of extremely clear economic skies ahead. The continent enjoys high and rising consumer and business confidence. The German locomotive continues to produce robust manufacturing data. And the election of a resolutely pro-business president has given the French economy new wings. According to the IMF s latest forecasts, Europe should grow by 2.1% this year and by 1.9% next year. France, Italy and Spain are the leading contributors to what is a broad-based upgrade. United States: consumer spending is partially spent, but disinflation will still help 26% 24% 22% 20% 18% 16% 14% 5% 4% 3% 2% 1% -1% Consumer credit as a % of disposable income 01/59 01/69 01/79 01/89 01/11 01/99 07/11 01/09 01/12 07/12 01/13 07/13 01/14 07/14 01/15 07/15 01/16 07/16 7% 6% 5% 4% 3% Real consumer spending vs inflation, y.o.y. change Savings as a % of disposable income 07/13 03/14 11/14 07/15 03/16 11/16 07/17 01/17 07/17 Real consumer spending Inflation Source: Carmignac, CEIC, 31/8/2017 CARMIGNAC THIRD QUARTER 2017 / 13

14 Eurozone: the world economy s strong link 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Eurozone: GDP and business sentiment, y.o.y. change Real GDP (right-hand scale) Business sentiment With industrial production advancing at a 5.7% annual rate in August, Italy has corroborated even the most upbeat predictions. This expansionary phase in Europe s cycle could well hold up and even gain momentum if the Fed administers the right dose of monetary policy normalisation. The region s vibrant economy lends even more weight to expectations that the ECB will soon trim its asset purchase programme to 30 billion a month. When that happens, yields below 0.5% on German 10-year paper will be decried as an anomaly and rising bond yields across the currency bloc will become a tangible component of a normalisation process that might put a strain on GDP growth. Source: Carmignac, CEIC, 29/9/2017 the upswing in Europe, the ongoing strength of the US expansion and so far a policy mix in China that works to the advantage of emerging markets as a whole. In broader 5% terms, those markets are benefiting from 4% the inertia that characterises the current 3% growth cycle. This is strikingly true of 2% Brazil, the quintessential link at the far 1% end of the production chain. GDP shrank 0% by 3.6% in 2016 and is forecast to grow -1% 2% in In our previous report, we -2% voiced the expectation that the Chinese -3% Communist Party Congress in October -4% would ensure economic stability, and -5% it did. But the mild monetary tightening -6% engineered by the People s Bank of China to cut excess capacity has also hurt retail sales and industrial output in the country. In addition, as we mentioned above, world trade has lost a fair amount of momentum in recent months. Like the US, China (as well as Japan and Germany) has seen annualised growth in its exports revert to zero in the past six months, after rising substantially in the preceding quarters. If that trend were to become firmly entrenched, it would be very bad news for global growth, which is underpinned to a large extent by world trade. The outlook for global trade is therefore a key focus for us. The recent, impressive 35% rebound in South Korea s highly volatile export figures, a result well in advance of the current global cycle, is in that regard a heartening sign. But in any event, the ongoing improvement in emerging-world current account balances and a return in many cases to greater monetary The eurozone, then, is the engine driving the current expansionary phase. The same can hardly be said of the United Kingdom. The 17% slide in the pound against the euro since the Brexit vote, together with inflation that reached 2.9% in August, may be the start of a vicious circle. Such a circle would be intensified by a worsening capital account deficit that could lead to a currency crisis of the kind that emerging economies are all too familiar with. The ultimate specifics of Brexit will have a crucial impact on the British economy, so much so that the risk of a bleak political and economic climate can t be ruled out at this point. What can be, however, is the idea of serious economic spillover to the euro area. The emerging world continues to be buoyed by a weaker US dollar, low interest rates, Cyclical slowdown propagated by world trade 40% 0% -40% -80% 20% -20% -60% Japan: export growth, 6 months annualised United States: export growth, 6 months annualised 50% 10% -30% -70% 20% 07/05 07/07 07/09 07/11 07/13 01/05 07/15 01/07 07/17 01/09 01/11 07/05 01/13 01/15 01/17 07/05-30% -80% South Korea: export growth, 6 months annualised 07/07 07/09 07/11 07/13 07/15 07/17 Germany: export growth, 6 months annualised 07/07 07/09 07/11 07/13 07/15 07/17 Source: Carmignac, CEIC, 29/9/ / Management report MACROECONOMIC ANALYSIS AND INVESTMENT STRATEGY

15 policy freedom strongly increase the likelihood that, after six disappointing years, equities in those countries will go on outperforming as they have in Investment strategy Niko - Fotolia.com The question at this stage is whether upcoming action by the Fed and, to a lesser extent, the ECB will shrink global liquidity to the point of spoiling the party in equity markets. We doubt it will. Though the risk of monetary policy misfires can t be ruled out entirely, there are such powerful deflationary forces at work on both sides of the Atlantic that both central banks inflation targets have become unattainable. And that makes the prospects of substantial hikes in their key rates seem highly unlikely. Needless to say, we would be worried about the US economy overheating in response to large-scale fiscal stimulus if we actually believed the Trump administration stood a decent chance of carrying out its tax reform plan. We have therefore maintained high exposure to equities, striking a balance between stocks and sectors with good earnings visibility, which are less dependent on the business cycle (e.g., tech stocks), and more cyclical holdings like energy stocks, which also serve as an effective hedge against geopolitical risk in the Middle East and the risk of resurgent inflation. As regards the bonds in our portfolios, the start of monetary policy normalisation at a time of synchronised global growth, as we have described, can be expected to push up yields on benchmark sovereign bonds a good reason to keep our modified duration low. Only local-currency emerging market debt and bank shares still offer enough value in our view to warrant sizable positions or renewed exposure in our portfolios. In the forex market, the steady propagation of growth across the globe will continue to give non-us currencies an advantage over the dollar and to justify maintaining our extremely low exposure to the greenback. Source of data: Carmignac, CEIC, 30/9/2017 CARMIGNAC THIRD QUARTER 2017 / 15

16 Edouard Carmignac International equity fund which benefits from our macro-economic expertise, active management and unconstrained asset allocation in terms of sectors, geographical areas and market capitalisations. The Fund aims to outperform its reference indicator over 5 years minimum. At least 60% of net assets are permanently exposed to equity markets. The Fund s main performance drivers are therefore equities but also currencies and occasionally fixed income products. Carmignac Investissement gained +0.78% in the third quarter, while its reference indicator gained +1.48%, bringing the Fund s performance since the beginning of the year to +5.38%, compared with +4.61% for its reference indicator. Over the quarter, the underlying equity portfolio slightly underperformed its benchmark, due to relative weakness in its Energy and Healthcare positions. This weakness was partially offset by strength in our Information Technology (IT) and Consumer names. Geographically, Emerging Markets and the US saw strong gains, while Europe and Japan detracted. Overall performance was enhanced by currency positions that favoured Euro exposure versus the US Dollar and UK Sterling. We capitalised on this positioning over the first two months of the third quarter. However, September saw increased optimism on President Trump s tax reform policy proposals around tax reform, which, given our US Cyclicals underweight, led to relative performance headwinds. Nonetheless, we believe this optimism will likely fade as more is learned about the final US tax policy proposals and their path to Congressional approval. Our scarce growth theme remains US weighted and increased to 51% of assets, centred on the IT and Consumer sectors. Our cyclical reflation theme is weighted to European Financials and global Energy, and was reduced to 25% of assets. While the Fund experienced Energy losses in the third quarter, we continue to believe favourable demand and supply trends will lead to higher oil prices towards the end of We maintained our exposure to US shale oil producers, despite a disappointing rate of actual production growth over the second quarter, as we believe they can take market share within the current supplier backdrop. Moreover, we exited our cyclical positions in US Airlines and Japanese Banks. Performance of the fund since its launch % % /89 12/92 12/96 12/00 12/04 12/08 12/12 12/16 09/17 Carmignac Investissement A EUR acc MSCI AC World NR (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). As we mentioned in our first quarter letter, we anticipated a rotation away from US equities towards Europe and Emerging Markets due to superior growth prospects in those regions, and we have retained this view in subsequent quarters. In the third quarter, this was reflected in our geographic weightings as we were 5% underweight the US versus our benchmark, 3% overweight Europe, and 6% overweight Emerging Markets. We also maintained our reduced exposure to the US Dollar versus the Euro. Our US exposure remains weighted towards disruptive companies in the IT sector and shale oil producers. In Europe, we continued to see improving macroeconomic and microeconomic data, although the benefits of French labour reform were somewhat offset by negative political developments in Germany and ongoing confusion about the shape of Brexit negotiations. We have retained our overweight exposure to the European Banking sector, which has high domestic exposure, and retain a higher than historical weighting to the European Consumer Discretionary sector. In the UK, we are only exposed to exporting companies, as we have a negative outlook on both the UK economy and currency. In Emerging Markets, we retain the view that firmer growth and normalising inflation combined with reduced Chinese risk over the medium term should bolster profit recoveries. We retain our constructive views on the Indian Banking sector, and continued to add Argentine Banking exposure. Both countries benefit from underpenetrated loan markets with strong secular growth, and have business-friendly governments. While monetary policies are still historically accommodative, recent central bank commentary has indicated a willingness to tighten monetary policy, even in the face of tepid economic data in the US. Given this uncertain backdrop, we believe that a balanced portfolio positions us best to try and benefit from both the cyclical recovery and our long term convictions. Our gold exposure, the use of options and the active management of equity and currency exposures should also continue to help us manage these risks. Therefore, on the currency front, the resilience of US economic activity could lead us to tactically reduce our significant underweight on the greenback (6.7% dollar and assimilated currencies). Our asset allocation at 30 September 2017 was as follows: The reflation theme was reduced from 42% to 25% of the Fund s assets. We maintain our constructive view on European Banks, US shale oil producers in the Permian Basin, US oil services businesses and global cement manufacturers. Our US Banks exposure is centred on Bank of America. Our thesis lays more on the anticipation of an improving regulatory environment and ramping capital returns than on a steeper yield curve or greater loan demand. We exited our US Airlines positions as we * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. 16 / Management report EQUITY MANAGEMENT

17 viewed increased supply growth and a more generous stance towards labour demands as negative developments. We also exited our Japanese Bank positions as prospects of rising rates have faded in the region. Our Emerging Market exposure was stable at 16% of the Fund. Core positions remain HDFC Bank and IndusInd Bank in India, Banco Macro and Banco de Galicia in Argentina, Latam e-commerce and payments powerhouse, MercadoLibre, and Chinese communications, gaming and payments platform Tencent. We added positions in Chinese online employment and listing platform 58.com, and video surveillance and robotics player Hikvision. We remain overweight Information Technology, with core positions including Facebook, ASML, ServiceNow, and Activision Blizzard. We took some profits in graphics processor play Nvdia and Samsung, and added a position in big data software analytics firm Splunk. Within US Healthcare, we exited Intercept Pharmaceuticals on a negative toxicity development for its key liver disease treatment, and added positions in Stryker and Intuitive Surgical, advanced technology companies in medical equipment. Among this quarter s sources of satisfaction, we note: Stocks Performance Banco Macro, banking, Argentina +33% ASML, semiconductor equipment, Netherlands +26% GrubHub, restaurant delivery, United States +21% Tencent, internet software and services, China +20% Potash Corp, producer of fertilizer, Canada +18% Source : Bloomberg EQUITY MANAGEMENT Geographic breakdown (derivatives excluded) (%) Sector breakdown (derivatives excluded) (%) North America Europe Asia Latin America Cash, cash equivalents and derivatives operations Information Technology Financials Materials Energy Consumer Discretionary Consumer Staples 5.7 Healthcare 5.5 Telecommunication Services 2.5 Net currency exposure of Euro share classes (%) Industrials Cash, cash equivalents and derivatives operations USD 5.0 EUR GBP , Statistics (%) 1 year 3 years CHF 2.5 Fund volatility AUD and CAD Latin America Emerging Asia Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Investissement A EUR acc MSCI AC World NR (Eur) Category average* Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * Global Large-Cap Growth Equity. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. CARMIGNAC THIRD QUARTER 2017 / 17

18 EQUITY MANAGEMENT HOLDINGS CARMIGNAC INVESTISSEMENT AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) SPAIN 13/10/2017 Treasury bill in Euro Equities Developed countries North America ACTIVISION BLIZZARD (USA) Information Technology AMAZON.COM INC (USA) Consumer Discretionary ANADARKO PETROLEUM (USA) Energy BANK OF AMERICA (USA) Financials CELGENE CORP (USA) Healthcare CONCHO RESOURCES (USA) Energy EOG RESOURCES (USA) Energy FACEBOOK INC (USA) Information Technology FRANCO-NEVADA CORP (Canada) Materials GOLDCORP INC (Canada) Materials GRUBHUB INC (USA) Information Technology INTERCEPT PHARMACEUTICALS INC (USA) Healthcare INTERCONTINENTAL EXCHANGE (USA) Financials MASTERCARD INC (USA) Information Technology NEWMONT MINING (USA) Materials NOBLE ENERGY INC (USA) Energy NVIDIA CORP (USA) Information Technology PIONEER NAT. RESOURCES (USA) Energy POTASH CORP (Canada) Materials SERVICENOW (USA) Information Technology SPLUNK INC (USA) Information Technology T-MOBILE US INC (USA) Telecommunication Services TRANSCANADA CORP (Canada) Energy TRIPADVISOR INC (USA) Consumer Discretionary VISA INC (USA) Information Technology WHEATON PRECIOUS METALS CORP (Canada) Materials ZAYO GROUP HOLDINGS INC (USA) Telecommunication Services Europe ALTICE SA (Netherlands) Consumer Discretionary ASML HOLDINGS (Netherlands) Information Technology ASOS PLC (United Kingdom) Consumer Discretionary CRITEO SA-SPON ADR (France) Information Technology DASSAULT AVIATION SA (France) Industrials HERMES INTERNATIONAL (France) Consumer Discretionary HSBC HOLDINGS (United Kingdom) Financials INDITEX (Spain) Consumer Discretionary LAFARGEHOLCIM LTD (Switzerland) Materials LONDON STOCK EXCHANGE (United Kingdom) Financials ORYX PETROLEUM (Netherlands) Energy RECKITT BENCKISER (United Kingdom) Consumer Staples RENAULT SA (France) Consumer Discretionary TALEND SA (France) Information Technology VIFOR PHARMA AG (Switzerland) Healthcare Equities Emerging markets Latin America BANCO MACRO (Argentina) Financials CEMEX (Mexico) Materials GRUPO FINANCIERO GALICIA (Argentina) Financials GRUPO PAO DE ACUCAR (Brazil) Consumer Staples MERCADOLIBRE INC (Argentina) Information Technology Asia COM (China) Information Technology AIA GROUP LTD (Hong Kong) Financials BITAUTO HOLDINGS LTD-ADR (China) Information Technology HANGZHOU HIKVISION DIGITAL-A (China) Information Technology HDFC BANK (India) Financials INDUSIND BANK (India) Financials SAMSUNG ELECTRONICS (South Korea) Information Technology TENCENT HOLDINGS (China) Information Technology UNITED SPIRITS LTD (India) Consumer Staples Portfolio value Net assets / Management report CARMIGNAC THIRD QUARTER 2017

19 Mark Denham Vincent Steenman Equity fund focused on stock-picking across European markets. The investment process is based on fundamental bottom-up analysis. Stock selection focuses on identifying and valuing the stocks of the companies with the best long-term growth prospects, as demonstrated by their high, sustainable profitability, ideally combined with internal or external reinvestment. Investments are then made in the names with the best asymmetric risk/return profiles. The fund aims to outperform its reference indicator over 5 years and to generate capital growth. During the third quarter of 2017, Carmignac Portfolio Grande Europe increased by +1.69%, providing a lower return than the reference indicator, which was up +2.71%. Since the beginning of the year, the Fund is up %, versus +9.95% for its indicator. After a strong first half, European markets paused to catch their breath over the summer drifting down during July and August before rebounding in September. European second-quarter corporate earnings reports were generally good, with many companies in our portfolio, for instance construction company Vinci and laundry outsourcing business Elis, commenting that they expect second-half earnings to improve further on the back of economic recovery in France and elsewhere. Nevertheless, the relative strength of the euro against the US dollar put downward pressure on the profit forecasts of market participants, as it reduces the euro value of profits earned outside the eurozone. This, combined with North Korea s aggressive rhetoric and missiles launches, resulted in an initial downtrend and added a bit of volatility to the markets. However, consistently strong macroeconomic indicators helped the market close the quarter higher. On the political front, incumbent chancellor Merkel has won the German elections but will probably struggle to form a coherent coalition, while the Brexit negotiations show no real progress and the range of outcomes is still quite wide. Performance disparities between various sectors were quite substantial. More cyclical sectors rebounded, but because our stock selection happens to have given us relatively low exposure to them, this rotation created a modest headwind for our Fund. Our sources of satisfaction included Delivery Hero, which surged by more than 30% since we first bought it. We started building our position since the IPO in late June, because we recognised the potential of the takeaway delivery market. Delivery Hero has a leading position in 36 of the 42 countries in which it operates, many of which are fast-growing emerging market economies where such services represent an underpenetrated sector. As a result, we expect them to post double-digit sales growth in the near future as the penetration rate for online takeaway increases. Earnings growth should be even higher as the company leverages its infrastructure. ASML posted a very strong 26% return in the quarter as customer interest and sales of their latest generation of lithography machines for the semiconductor industry, known as EUV (Extreme Ultraviolet), became more tangible. The technological advantage offered by their products is translating into significant cost savings for their semiconductor manufacturing clients. This, combined with ASML s significant market share in this segment, puts the company in a very strong position. We expect ASML to see an increase in orders from semiconductor manufacturers for factory equipment, driven by growth in demand related to accelerating trends and end markets such as electric and autonomous vehicles, Big Data, the Internet of Things and Artificial Intelligence. Most of our consumer goods stocks drifted downwards over the summer, reversing the positive returns of the previous quarter. For example, Reckitt Benckiser is still experiencing subdued growth in its end markets and was adversely affected by a cyber-attack that disrupted its supply chain and distribution to clients. We see this as a temporary setback and- as we have discussed before, we remain optimistic on their opportunity to improve performance thanks to the recently acquired baby milk company Mead Johnson. Ontex, which is a manufacturer of diapers, has enjoyed strong customer demand, especially in Latin America, where it has recently made two large acquisitions. However, profitability is being hindered by rising raw material costs, along with the need to rearrange manufacturing capacity to meet vigorous demand. In the healthcare sector, we saw particularly poor performance from UK pharmaceutical name Shire. This was due to the market discounting extremely adverse scenarios for the company s haemophilia franchise because of the entry of a competitive product from Roche, which showed very strong clinical trial data in one Performance of the fund since its launch % % /99 12/00 12/02 12/04 12/06 12/08 12/10 12/12 12/14 12/16 09/17 Carmignac Portfolio Grande Europe A EUR acc Stoxx 600 NR (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report EQUITY MANAGEMENT / 19

20 EQUITY MANAGEMENT part of the patient population. Given that haemophilia represents more than 20% of group sales at Shire, the threat is material. Nevertheless, we feel that investors currently overestimate the future loss of sales for Shire in this area and the stock now trades significantly below our assessment of the group s prospects. The portfolio s structure from a top-down point of view is broadly unchanged, reflecting our bottom-up stock-picking process focused on profitable companies with high returns on capital. We nonetheless carefully monitor our sector and macro risks. The portfolio is still currently overweight technology and has no direct oil exposure. We also decreased our exposure to financials during the quarter after the sector rallied strongly on the basis of rate-hike expectations. Lastly, our exposure to the UK domestic economy remains very limited. Some of the other strong performers in the quarter included: Stocks Performance Temenos, software, Switzerland +15% Sopra Steria, IT services, France +14% Teleperformance, business services, France +14% Elis, business services, France +13% Ferratum, financial services, Finland +13% Source : Bloomberg Geographical Exposure (%) Sector Exposure (%) France 22.9 Consumer Goods 20.9 United Kingdom 18.0 Technology 17.3 Germany 14.2 Industrials 16.4 Switzerland 8.4 Healthcare 13.8 Ireland 7.9 Financials 12.7 Spain 5.9 Consumer Services 6.4 Netherlands 4.9 Basic Materials 2.9 Belgium 4.0 Telecommunication 1.1 Italy 2.5 Cash, cash equivalents and derivatives operations 0,0 8.7 Finland 1.3 Denmark 1.2 Cash, cash equivalents and derivatives operations 8.7 Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Net currency exposure of Euro share classes (%) Statistics (%) 1 year 3 years Fund volatility USD -0.4 Benchmark volatility EUR 78.0 Sharpe ratio GBP 11.1 Beta CHF 9.0 Alpha Other 2.3 Calculation period: weekly (1 year) and monthly (3 years). Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio Grande Europe A EUR acc Stoxx 600 NR (Eur) Category average* Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * Europe Large-Cap Blend Equity. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. 20 / Management report CARMIGNAC THIRD QUARTER 2017

21 HOLDINGS CARMIGNAC PORTFOLIO GRANDE EUROPE AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities European Union Germany BAYER AG Basic Materials BEIERSDORF Consumer Goods DELIVERY HERO AG Consumer Services FRESENIUS MEDICAL CARE Healthcare MORPHOSYS Healthcare SAP AG Technology Belgium GALAPAGOS GENOMICS Healthcare ONTEX GROUP NV Consumer Goods Denmark PANDORA A/S Consumer Goods Spain APPLUS SERVICES SA Industrials BANKINTER Financials Finland FERRATUM OYJ Financials France COFACE SA Financials CRITEO SA-SPON ADR Technology ELIS SA Industrials ILIAD Technology MAISONS DU MONDE SA Consumer Goods S.O.I.T.E.C. Technology SOPRA STERIA GROUP Technology SPIE SA Industrials TELEPERFORMANCE Industrials VINCI SA Industrials Ireland ALLIED IRISH BANKS PLC Financials KERRY GROUP PLC Consumer Goods RYANAIR HOLDINGS PLC Consumer Services Italy PIRELLI & C SPA Consumer Goods Netherlands ALTICE SA Telecommunication ASML HOLDINGS Technology United Kingdom CONVATEC GROUP PLC Healthcare IBSTOCK PLC Industrials INFORMA PLC Consumer Services PRUDENTIAL PLC Financials RECKITT BENCKISER Consumer Goods SHIRE PLC Healthcare UNILEVER Consumer Goods Equities ex European Union Switzerland NESTLE SA Consumer Goods TEMENOS GROUP AG Technology VIFOR PHARMA AG Healthcare Portfolio value Net assets EQUITY MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 21

22 Mark Denham Malte Heininger European small and mid-cap equity fund focused on stock-picking across European markets. Through applying a disciplined, bottom-up investment process, we aim to seize the best investment opportunities within this broad and under-researched universe. Stock selection focuses on the names with the best asymmetric risk/ return profiles. The fund aims to outperform its reference indicator over 5 years and to generate capital growth. During the third quarter of 2017, Carmignac Euro-Entrepreneurs increased by +4.83%, providing a higher return than the reference indicator s +4.46%. Since the beginning of the year, the Fund is up %, versus % for its indicator. The positive momentum in European small caps continued into the third quarter of the year, despite a stronger euro resulting in downgrades to international earnings and some volatility around geopolitical events like the North Korean missile tests. Those factors temporarily restrained share prices, but September saw a vigorous rally. The continued strong market performance of small caps makes sense to us, and we see it as a long-term trend. Not only are many smaller companies in Europe well-positioned to benefit directly from the ongoing economic improvement on the continent; there are also several favourable secular trends, such as a steady increase in the breadth and diversity of the market, including the presence of more successful and innovative companies in the internet, technology and biotech sectors. The quarter saw strong performance from many of our holdings. Hapag Lloyd, a new name we added in the second quarter, gained more than 40% and was therefore a very large contributor to our results. The company is a beneficiary of both the improved supply and demand balance in container shipping and consolidation in the industry. During the quarter, the implications for Hapag s profitability of its acquisition of shipping company UASC became apparent to the market, as analysts incorporated the deal into their forecasts. Furthermore, the deal itself was very well-timed, as shipping rates have been rising on Middle Eastern and Far Eastern routes Performance of the fund since conversion** % % /02 12/04 12/06 12/08 12/10 12/12 12/14 12/16 09/17 Carmignac Euro-Entrepreneurs A EUR acc Stoxx 200 Small NR (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. P ast performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). **The Fund was transformed on 01/01/2003: new reference indicator and new investment strategy. where UASC has a major presence. Ferratum and Fagron, in which we have large, long-standing positions, were also strong performers. Ferratum gained 13%, continuing on the trajectory of previous quarters after secondquarter results confirmed the ability of the company s disruptive financial service business model to deliver medium-term sales and profit growth of above 30%. Fagron shares were up 14% in the quarter after solid results demonstrated strong uptake at their new sterile compounding facility in Wichita, United States. While the overall picture was positive for the Fund, there were some detractors. Do & Co, the airline catering company, was the most significant example, with its stock falling 32%. During the quarterly results call, management suggested that the long-term catering contract with Turkish Airlines might not be renewed. This possibility had not previously been considered and, as the contract accounts for over 30% of the company s sales and substantially more of its profits, the market promptly priced in that risk which subsequently crystallised when an alternative supplier won the contract. Despite this significant setback, we expect Do & Co s highly respected management team to win contracts outside Turkey and continue to seek growth opportunities elsewhere. For the time being, however, none of that is reflected in the company s stock price. We exited our position in the trust and corporate services provider Intertrust after very disappointing Q2 results. Organic growth was well below our expectations due to a number of problems, including very high staff turnover and weaker underlying demand in the Netherlands, their largest jurisdiction. Furthermore, the company has spoken of unquantified IT cost increases in future quarters. Despite a substantial 23% fall in the stock price, we sold our holding because we had no visibility as to the future trajectory of sales or profits. We also pulled out of Parques Reunidos, the Spanish amusement park operator, as we became increasingly concerned over the company s dependence on weather conditions to maintain sales and profits. That proved timely and felicitous, given that the company issued a weather-related profit warning shortly after our withdrawal. Other changes to the Fund included an addition to our holdings in the biotech sector through Galapagos, a Belgian company with a proven development platform that has resulted in several promising products in the clinical pipeline. The lead compound filgotinib is a treatment in the huge field of rheumatoid arthritis that is partially validated by a partnership with US giant Gilead. The company has four other projects in development for a range of diseases including cystic fibrosis and osteoarthritis. There will be plenty of news flow on all projects over the coming months and years, providing ample opportunity for revising the company s prospects upwards. * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. 22 / Management report EQUITY MANAGEMENT

23 Some of the other best performances in the quarter came from: Stocks Performance Delivery Hero, restaurant delivery, Germany +31% RIB Software, software, Germany +22% ASR Nederland, insurance, Netherlands +15% Tessenderlo, chemicals, Belgium +9% Alfa Financial, software, United Kingdom +9% Source : Bloomberg Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) EQUITY MANAGEMENT Geographical Exposure (%) Sector Exposure (%) Germany 18.9 Financials 19.0 Belgium 14.5 Technology 16.5 Netherlands 12.0 Industrials 14.3 United Kingdom 11.8 Consumer Services 13.2 France 9.3 Healthcare 12.7 Switzerland 6.4 Basic Materials 10.2 Finland 6.0 Consumer Goods 4.4 Ireland 4.3 Telecommunication 0.8 Spain 3.7 Cash, cash equivalents and derivatives operations 0,0 8.8 Austria 2.8 USA 1.5 Cash, cash equivalents and derivatives operations 8.8 Net currency exposure of Euro share classes (%) Statistics (%) 1 year 3 years Fund volatility USD -0.3 Benchmark volatility EUR 82.4 Sharpe ratio GBP CHF Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since conversion on 01/01/2003** Carmignac Euro-Entrepreneurs A EUR acc Stoxx 200 Small NR (Eur) Category average* Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * Europe Mid-Cap Equity. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). **The Fund was transformed on 01/01/2003: new reference indicator and new investment strategy. Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. CARMIGNAC THIRD QUARTER 2017 / 23

24 EQUITY MANAGEMENT HOLDINGS CARMIGNAC EURO-ENTREPRENEURS AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Carmignac Court Terme Mutual Fund - Money Market Equities European Union Germany AUMANN AG Industrials BILFINGER BERGER AG Industrials COMPUGROUP MEDICAL Technology DELIVERY HERO AG Consumer Services DEUTSCHE KONSUM REIT AG Financials HAPAG-LLOYD AG Industrials LANXESS AG Basic Materials MORPHOSYS Healthcare PANTAFLIX AG Consumer Services PUMA Consumer Goods RIB SOFTWARE SE Technology TOM TAILOR HOLDING SE Consumer Services Austria DO & CO AG Consumer Services Belgium ABLYNX SA Healthcare FAGRON NV Healthcare GALAPAGOS GENOMICS Healthcare ONTEX GROUP NV Consumer Goods TESSENDERLO CHEMIE Basic Materials Spain APPLUS SERVICES SA Industrials NEINOR HOMES SA Financials TALGO SA Industrials Finland FERRATUM OYJ Financials France ALTRAN TECHNOLOGIES SA Technology SOPRA STERIA GROUP Technology SPIE SA Industrials TELEPERFORMANCE Industrials Ireland ALLIED IRISH BANKS PLC Financials SMURFIT KAPPA GROUP PLC Industrials Netherlands ALTICE SA Telecommunication ASR NEDERLAND Financials IMCD GROUP NV Basic Materials KONINKLIJKE VOLKERWESSELS Industrials VAN LANSCHOT KEMPEN NV Financials United Kingdom ALFA FINANCIAL SOFTWARE HOLD Technology CONVATEC GROUP PLC Healthcare INFORMA PLC Consumer Services JRP GROUP PLC Financials MICRO FOCUS INTER. Technology NON-STANDARD FINANCE PLC Financials Equities ex European Union USA GRUBHUB INC Consumer Services Switzerland GALENICA AG Consumer Services MEYER BURGER TECHNOLOGY Industrials PANALPINA WELTTRANSPORT Industrials TEMENOS GROUP AG Technology VIFOR PHARMA AG Healthcare Portfolio value Net assets / Management report CARMIGNAC THIRD QUARTER 2017

25 Xavier Hovasse David Young Park Emerging market equity fund combining a fundamental top-down approach with a disciplined bottom-up analysis in order to identify the best opportunities within its investment universe by seeking companies offering longterm growth potential and attractive cash generation, in underpenetrated sectors and in countries with healthy fundamentals. The Fund aims to outperform its reference indicator over 5 years with lower volatility. Carmignac Emergents was up 4.26% in the third quarter of 2016, compared with a 4.09% increase in its reference indicator. That takes its performance since the start of the year to 15.24%, versus a 14.01% gain in its reference indicator. Emerging-market equities continued on a roll in an exceptionally favourable environment, with economic indicators equalling or even surpassing their Q2 levels in the third quarter. The two drivers of growth in those economies foreign demand and domestic demand show no sign of letting up. Manufacturing indicators, as evidenced by both tangible factors like industrial output and less tangible ones like purchasing managers indices, climbed further to reach record levels. Last month, for example, the EM manufacturing PMI recorded its highest reading since This indisputable industrial upswing is both a reflection of and a contributor to the export boom under way. Both in volume and in value, emerging-world exports have powered ahead at an exceptional pace, resulting in increasingly healthy current account balances from one quarter to the next. Furthermore, there is no lack of domestic momentum in developing economies, either. Retail and motor-car sales, two key gauges of consumer demand, have been trending upwards as well. Yet even under such upbeat conditions, emerging-market inflation has remained weak, as has developed-country inflation. Moreover, with disinflation still the dominant overall trend, a number of EM central banks have the leeway to continue with monetary policy easing while maintaining a substantial safety cushion as demonstrated by the 2.3% average in real emerging-world interest rates. At the same time, we are seeing the first signs of a recovery in private-sector lending after several sluggish years. Two high-rev engines of growth are thus powering the emerging market space today. China, a major allocation with 19% of the Fund s assets, boasts unquestionably robust business cycle indicators. Just a few days ahead of the much-awaited Chinese Communist Party Congress (an event held once every five years), the latest macroeconomic data were like a dream come true for President Xi Jinping. Last month s PMI surveys in the country surged to an average of 52.4, a height seldom reached before. And as the regime s paramount leader further consolidated his power in the run-up to the Congress, there is no reason to expect any major changes to current policy. In addition, a weak US dollar has obviously been a boon to emergingmarket assets as a whole, but perhaps nowhere more so than in China, giving much-needed relief to the central bank and the government with regard to exchange rates and capital flight. Capital outflows have been staunched for the time being and forex reserves have begun heading back upwards (adding $52 billion in the third quarter). And with inflation still negligible in September the CPI inched up by just 1.6% on an annualised basis monetary policy has remained loose. In response, we have stepped up our presence in China with a new investment in Bitauto, a leading web portal serving the automotive industry and an online financial services platform for car-buyers. The first component of its business model generates revenues from advertising and flat-rate intermediation fees. And as it requires little in the way of capex, it fits admirably with our investment philosophy at Carmignac Emergents. In India, the banknote shortage inflicted by Narendra Modi s administration towards the end of last year is just a distant memory at this point. Like the other major emerging economies, India is blessed with moderate inflation, showing a 3.2% annualised increase in the CPI. The lack of upward pressure on consumer prices was apparently enough to convince the country s otherwise fervently orthodox central bank to ease monetary policy mildly, lowering its key interest rate by 25 basis points to roughly 5.75%. Both exports and manufacturing indices likewise bear witness to a fairly sound economy. This led us to buy a stake in Ambuja Cement, one of India s leading cement companies. With a 10% market share, Ambuja has the enviable status of an up-and-coming competitor in what is clearly an underpenetrated market with excellent growth prospects. Demand is still inordinately low in India, with annual per capita cement consumption of just 190 kg, whereas other emerging economies show much greater appetite, e.g., 1,690 kg in China and 620 kg in Malaysia (source: CLSA). Ambuja should be among the prime beneficiaries of the infrastructure and above all the social housing programmes the government has singled out for priority treatment. We also boosted our exposure to Asia with a new investment in South Korea s Hyundai Motor Company, a firm with a sterling reputation in the emerging world most notably in China and India, where Hyundai is poised to reap the benefits of steadily rising car ownership rates. Furthermore, the carmaker has recently carried out a strategic overhaul of its corporate governance that should lead swiftly to higher shareholder returns. In Latin America, we substantially stepped up our exposure to Argentina to reflect our enthusiasm about the country. Argentina s current trajectory is one of the most promising in the emerging world for the coming decade. A resolutely reform-minded administration has been moving in tandem with a hawkish central bank in the right Performance of the fund since its launch % /97 01/00 01/03 01/06 01/09 01/12 01/15 09/17 Carmignac Emergents A EUR acc MSCI Emerging Markets NR (Eur) 504% From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report EQUITY MANAGEMENT / 25

26 EQUITY MANAGEMENT direction, and the payoff is already tangible. The country s economic indicators of the past few months attest to the momentum under way. Inflation, while high, should gradually slow further, thanks among other things to adequate control over growth in the money supply. And though Argentina s balance of payments is still weighed down by a current account deficit, direct foreign investment and substantial portfolio flows have put it on extremely sound foundations. The government is now taking a close look at the external and internal imbalances inherited from the past, and can therefore be expected to manage them down. To take advantage of the impressive economic revival under way, we raised our exposure to the country s banking sector by acquiring a stake in Grupo Supervielle. Argentina s unusually low banking penetration rate unarguably opens up real opportunities. Argentine households and businesses still avoid borrowing money when they can, with the result that private-sector bank lending is equal to only around 15% of GDP. The outstanding performance posted once again by emerging-market equities this past quarter should come as no surprise. To be sure, a weaker US dollar is part of the explanation, but the inherent strengths of emerging economies should not be overlooked. The healthier balance sheets and balances of payments in that part of the world have once again paid off for emerging-market assets. As long as no clearcut headwinds rise, that asset class can look forward to further gains. Source of data: Carmignac, CEIC, JP Morgan Research, Barclays, Credit Suisse, Company data, 29/09/2017. Here are some of our best-performing stocks in the third quarter: Stocks Performance 58.com, internet software and services, China +43% Baidu, internet software and services, China +38% Banco Macro, diversified banking, Argentina +27% Dali Foods, processed foods, China +25% Samsung SDI, electronic components, South Korea +16% Source : Bloomberg Geographic breakdown (derivatives excluded) (%) Sector breakdown (derivatives excluded) (%) Asia Latin America Middle East Africa Europe Asia-Pacific North America Eastern Europe Cash, cash equivalents and derivatives operations Information Technology Financials Consumer Discretionary Materials Consumer Staples Industrials Utilities Real Estate Telecommunication Services Healthcare Cash, cash equivalents and derivatives operations Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Net currency exposure of Euro share classes (%) USD 38.5 Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Currency Derivatives Total EUR Latin America Emerging Asia Eastern Europe, Middle East and Africa 2, Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Emergents A EUR acc MSCI Emerging Markets NR (Eur) Category average* Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * Global Emerging Markets Equity. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. 26 / Management report CARMIGNAC THIRD QUARTER 2017

27 HOLDINGS CARMIGNAC EMERGENTS AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities North America LAS VEGAS SANDS (USA) Consumer Discretionary Asia-Pacific LINE CORP (Japan) Information Technology Europe JERONIMO MARTINS (Portugal) Consumer Staples LILAC GROUP (United Kingdom) Consumer Discretionary Latin America BANCO MACRO (Argentina) Financials BANCO SANTANDER MEXICO (Mexico) Financials BB SEGURIDADE PARTICIPACOES (Brazil) Financials CEMEX (Mexico) Materials CIA DE ENER. ELEC. PAULISTA (Brazil) Utilities GRUPO BANORTE (Mexico) Financials GRUPO MEXICO SA DE CV (Mexico) Materials GRUPO SUPERVIELLE SA CL-B (Argentina) Financials MERCADOLIBRE INC (Argentina) Information Technology MEXICO REAL ESTATE MGMT (Mexico) Real Estate TRANSMISSORA ALIANCA (Brazil) Utilities Asia COM (China) Information Technology AIA GROUP LTD (Hong Kong) Financials AMBUJA CEMENTS (India) Materials ASTRA INTERNATIONAL (Indonesia) Consumer Discretionary BAIDU INC (China) Information Technology BHARTI INFRATEL LTD (India) Telecommunication Services BITAUTO HOLDINGS LTD-ADR (China) Information Technology DALI FOODS GROUP CO LTD (China) Consumer Staples FUYAO GROUP GLASS INDUSTRY-A (China) Consumer Discretionary HDFC BANK (India) Financials HERO MOTOCORP LTD (India) Consumer Discretionary HOUSING DEVELOPMENT FINANCE (India) Financials HYUNDAI MOTOR (South Korea) Consumer Discretionary KANGWON LAND (South Korea) Consumer Discretionary SAMSUNG BIOLOGICS CO LTD (South Korea) Healthcare SAMSUNG ELECTRONICS (South Korea) Information Technology SAMSUNG SDI CO (South Korea) Information Technology TAIWAN SEMICONDUCTOR (Taiwan) Information Technology TATA MOTORS LTD (India) Consumer Discretionary UNITED SPIRITS LTD (India) Consumer Staples ZHENGZHOU YUTONG BUS CO-A (China) Industrials ZTO EXPRESS CAYMAN INC (China) Industrials Africa NASPERS LTD (South Africa) Consumer Discretionary Eastern Europe MOSCOW EXCHANGE (Russia) Financials Middle East CHECK POINT SOFTWARE (Israel) Information Technology EMAAR PROPERTIES PJSC (United Arab Emirates) Real Estate ENKA INSAAT VE SANAYI (Turkey) Industrials Portfolio value Net assets EQUITY MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 27

28 Xavier Hovasse David Young Park Equity fund invested in small and mid-capitalisations of emerging countries, as well as less covered frontier markets. The investment process combines a fundamental top-down approach with a disciplined bottomup analysis in order to identify the best investment opportunities by seeking companies offering long-term growth potential and attractive cash generation, in underpenetrated sectors and in countries with healthy fundamentals. The Fund aims to outperform its reference indicator over 5 years. Carmignac Portfolio Emerging Discovery was up 1.51% in the third quarter of 2017, compared with a 2.24% increase in its reference indicator. That takes its performance since the start of the year to 12.95%, versus a 10.72% gain in its reference indicator. The emerging economies continued to enjoy a favourable environment overall. While a weaker US dollar certainly contributed in no small measure to the vigorous performance of emerging-market assets, several other, more intrinsic factors were also at work. To begin with, EM current account balances improved further as exports shot up. In addition, those countries continued to score well on the inflation test, thanks in particular to food-price disinflation. And lastly, there was strong domestic momentum, as evidenced by fairly robust, ongoing retail and motor-car sales (see our macroeconomic analysis for Carmignac Emergents). Our Asian stocks with 58% of total assets a major component of the Fund s portfolio turned in mixed results in the third quarter. We were slightly disappointed with the names we own in the region s frontier markets, particularly in the Philippines. In contrast, our South Korean holdings had a downright stellar quarter, due in large part to our investment in Kakao Corp, South Korea s answer to WhatsApp and the unchallenged leader in its market. Kakao Corp stepped up its game this past summer by adding online banking to its offering. With 45 million users, the company has continued to enhance and shrewdly monetise its ecosystem. While our Indian portfolio seemed to have fallen into a holding pattern this past quarter, we have lost none of our excitement about the cyclical recovery we anticipate in the country. The Performance of the fund since its launch % /07 12/08 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 09/17 Carmignac Portfolio Emerging Discovery A EUR acc 50% MSCI EM MidCap NR (Eur) + 50% MSCI EM SmallCap NR (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 25% government s shock withdrawal of larger banknotes just a few months back unquestionably slowed down the economy, creating a lacklustre interlude that now appears to be over. Similarly, the initially unsettling effect of the new Goods and Services Tax should likewise die down over time. Once those two sources of disturbance are over, India s economy can be expected to bounce back with additional support coming from the government s large-scale infrastructure programmes, particularly in the field of housing. Our Chinese portfolio did not exactly make sparks fly, but did not let us down, either. Fears about the country s balance of payments have subsided and key economic indicators, both tangible and intangible, all point in an encouraging direction. In addition, China s persistently low inflation particularly for food prices strongly suggests that growing real disposable incomes will keep consumer spending humming. That outlook led us to boost the Fund s exposure to consumer industries with a new investment in Vipshop Holdings, a leading online retailer of brand-name products through discounted flash sales. The company s 28 million active users ensure its dominance of that segment in China. Because it carries almost no inventory, Vipshop can generate considerable free cash flow currently equal to 8% of its market capitalisation (source: Carmignac). In Latin America, we moved to increase our exposure to online travel agencies by participating in the IPO of Despegar.com. Boasting a 20% market share, the company is the region s unrivalled leader in online travel reservations. It derives roughly half of its revenues from airline ticket sales and the other half from hotel bookings. With barely 30% of all travel reservations made online, Latin America lags far behind Europe, Asia and the United States, where the figure well exceeds the 50% mark. Despegar.com is in a good position to benefit long-term from both rising leisure travel spending and the growing tendency of tourists to book online instead of going through brick-and-mortar travel agencies and other conventional channels. Moreover, given Latin America s low market concentration with the ten biggest hotel chains raking in just 15% of total revenues, versus 52% in the United States the firm s strategy of aggregating a wide variety of plane tickets and hotel offers is entirely compelling. Despegar s straight intermediation-based business model can generate a great deal of cash while requiring next to no capital expenditure. Marketing, the sole hefty expense item, is absolutely crucial for continuously expanding the company s reach and customer base (currently 4 million regular users) and for building as much customer loyalty as possible. Turning now to the Europe, Middle East and Africa region, the Fund made a significant new investment in Delivery Hero broadly speaking, the foodservice equivalent of Despegar. Its online platform aggregates a wide range of home catering services in as many as forty countries, and with market * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. 28 / Management report EQUITY MANAGEMENT

29 leadership in over thirty of them, the company ranks among the world s top meals-on-wheels providers. Using a simple phone app, Delivery Hero connects an extremely large roster of partner restaurants with a population increasingly hooked on home food delivery. We see two major growth drivers for the company. First, Delivery Hero has continued to expand its geographic coverage; and second, the company is riding the crest of the growing homecatering craze. Moving beyond its presence in continental Europe, Delivery Hero has emerged as the unchallenged market leader in the Middle East via its Talabat.com website. Customers who have downloaded the app show a remarkable degree of loyalty, with close to 80% of all initial users faithfully coming back for more. In a digital space joined by loads of new apps every day, an 80% retention rate can be regarded as a powerful success factor. Source of data: Carmignac, CEIC, JP Morgan Research, Barclays, Credit Suisse, Company data, 29/09/2017. Here are some of our best-performing stocks in the third quarter: Stocks Performance YY Inc, internet software and services, China +50% Kakao Corp, internet software and services, South Korea +42% Yihai International, financial institutions, China +27% Silicon Works, semiconductors, South Korea +26% Globaltrans, rail freight transportation, Russia +23% Source : Bloomberg EQUITY MANAGEMENT Geographic breakdown (derivatives excluded) (%) Sector breakdown (derivatives excluded) (%) Asia Latin America Middle East Europe Information Technology Financials Consumer Discretionary Industrials Africa 2.8 Materials 9.8 Cash, cash equivalents and derivatives operations 2.4 Consumer Staples 8.1 Real Estate 7.4 Utilities 7.1 Telecommunication Services 5.8 Healthcare 3.7 Cash, cash equivalents and derivatives operations 2.4 Statistics (%) 1 year 3 years Net currency exposure of Euro share classes (%) Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). USD EUR GBP Latin America Emerging Asia Eastern Europe, Middle East and Africa 1, , Quarterly gross performance contribution (%) Equity Portfolio Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Porfolio Emerging Discovery A EUR acc Reference indicator* Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * 50% MSCI EM SmallCap NR (Eur) + 50% MSCI EM MidCap NR (Eur). ** Global Emerging Markets Equity. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. CARMIGNAC THIRD QUARTER 2017 / 29

30 EQUITY MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO EMERGING DISCOVERY AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities Europe DELIVERY HERO AG (Germany) Consumer Discretionary GLOBAL PORTS INV (Russia) Industrials GLOBALTRA-SPONS (Russia) Industrials Latin America ALUPAR INVESTIMENTO SA-UNIT (Brazil) Utilities ARCOS DORADOS HOLDINGS INC A (Argentina) Consumer Discretionary BANCO DAVIVIENDA (Colombia) Financials CEMEX LATAM HOLDINGS (Colombia) Materials CENTRO DE IMAGEM DIAGNOSTICO (Brazil) Healthcare CRESUD S.A.C.I.F.Y A. (Argentina) Real Estate DESPEGAR.COM CORP (Argentina) Consumer Discretionary INTERCORP FINANCIAL SERVICES (Peru) Financials ORGANIZACION TER CB (Colombia) Consumer Discretionary SUL AMERICA UNITS (Brazil) Financials TF ADMINISTRADOR 3 MM (Mexico) Real Estate UNIFIN FINANCIERA (Mexico) Financials WIZ SOLUCOES E CORRETAGEM DE (Brazil) Financials Asia CEMEX HOLDINGS PHILIPPINES I (Philippines) Materials CHICONY ELECTRONICS CO (Taiwan) Information Technology CHINA COMMU. SERVICES-H (China) Telecommunication Services DR LAL PATHLABS LTD (India) Healthcare ENN ENERGY HOLDINGS (China) Utilities GIANT MANUFACTURING CO (Taiwan) Consumer Discretionary HAVELLS INDIA LTD (India) Consumer Discretionary HOLCIM PHILIPPINES (Philippines) Materials ICTSI INT'L CONTAINER (Philippines) Industrials INDOCEMENT TUNGGAL PRAKARSA (Indonesia) Materials INNOCEAN WORLDWIDE INC (South Korea) Consumer Discretionary JOHN KEELLS HOLDINGS PLC (Sri Lanka) Industrials KAKAO CORP (South Korea) Information Technology LIC HOUSING FINANCE LTD (India) Financials LT GROUP INC (Philippines) Consumer Staples NIYOGIN FINTECH LTD (India) Financials PHILIPPINE NATIONAL BANK (Philippines) Financials PRESIDENT CHAIN STORE (Taiwan) Consumer Staples PRIMAX ELECTRONICS (Taiwan) Information Technology PRISM CEMENT LTD (India) Materials PRODIA WIDYAHUSADA TBK PT (Indonesia) Healthcare SHREE CEMENT LTD (India) Materials SILICON WORKS (South Korea) Information Technology TRIPOD TECHNOLOGY CORP (Taiwan) Information Technology VARUN BEVERAGES LTD (India) Consumer Staples VIETNAM DAIRY PRODUCTS JSC (Vietnam) Consumer Staples VIPSHOP HOLDINGS LTD - ADR (China) Consumer Discretionary YIHAI INTERNATIONAL HOLDING (China) Consumer Staples YY INC (China) Information Technology Africa EAST AFRICAN BREWERIES (Kenya) Consumer Staples GUINNESS NIGERIA PLC-RTS (Nigeria) Consumer Staples SAFARICOM (Kenya) Telecommunication Services Middle East ARAMEX PJSC (United Arab Emirates) Industrials AVIVASA EMEKLILIK VE HAYAT A (Turkey) Financials EMAAR MALLS GROUP (United Arab Emirates) Real Estate Portfolio value Net assets / Management report CARMIGNAC THIRD QUARTER 2017

31 Michael Hulme Global equity fund invested in energy, natural resources, and related industrial companies. By combining a fundamental top-down approach and a disciplined bottom-up analysis, the Fund manager aims to select quality companies with attractive long-term growth prospects and sustainable cash flow generation, across the entire commodity value chain. The Fund aims to outperform its reference indicator over 5 years. Carmignac Portfolio Commodities delivered a return of 7.21% in Q3 2017, compared with a 6.88% increase in its reference indicator. That takes its performance since the start of the year to -1.08%, versus -1.99% for its index. Oil prices surged, with WTI up by 12% and Brent by 20%. Copper also performed strongly, rising 10% to reach $3 per pound, while iron ore retreated by 5%. As a result, the Fund reversed its previous negative performance in relation to its reference indicator against a background of global markets (the MSCI AC World EUR net return) gaining 1.5% and the euro strengthening by 3% against the dollar. Our performance in the quarter benefitted from our exposure to select oil explorers and producers as oil prices bounced back. Our oil sands holdings Suncor and Canadian Natural climbed 20% and 16% respectively, while oil-leveraged methanol producer Methanex gained 14%. In oil services, fracking company RPC was ahead 23% and pump manufacturer Gardner Denver 27%. On the negative side, our oil holding Pioneer Resources shed 7% following disappointing second-quarter earnings. The standout performer in our portfolio was Siltronic (up 42%), a polysilicon wafer manufacturer, a position we have held since its spin-off from Wacker Chemie. Its low valuation and its exposure to the exponential growth trend in chip density in automobiles (EV vehicles and autonomous vehicles) and the Internet of things are ongoing sources of appeal to us. On the industrial metals side, most of the miners enjoyed a strong quarter, as China PMIs edged up further, highlighting continuing strong growth there. Our zinc producer holding Boliden fared well, but far and away our best performer for the quarter was Alcoa, which jumped 42% on the back of new supply-side controls in China. We are somewhat cautious overall on industrial metals, given the uncertainty over future policy announcements in China, which will be shaped by the Communist Party Congress in October and possible further environmental restrictions and capacity cutbacks, particularly downstream of iron ore (e.g., steel production). Turning finally to precious metals, gold had a subdued but positive quarter, adding 3% in dollar terms. We benefitted from outstanding performance by Royal Gold (our royalty company investment), which was up 10%, and Newmont Mining, up 16%. In contrast, Wheaton Precious Metals, our silver royalty investment, underperformed, sliding 4% in the quarter. Themes and outlook Oil remains our most favoured commodity, with increasing Brent backwardation highlighting the increasingly tight supply-demand balance as seaborne storage comes down. We see US supply surprising on the downside as shale takes longer to ramp up, while world demand remains robust in the current phase of synchronised global growth. Moreover, OPEC discipline remains strong, and the execution of other non-us oil projects has been disappointing. In relation to gold, we hold to the view that the opportunity cost of owning it is still low, and given a significant probability that central banks the world over will find it hard to unwind quantitative easing policies, we feel that gold will remain an attractive hedge against systemic risk and inflationary pressure, as well as a good wealth protection strategy for investors facing increasingly populist governments that may well pursue irrational economic policies. On that basis, we continue to favour those miners and royalty companies that uphold higher standards of capital discipline. Finally, we remain on the lookout for investments in related industries or materials manufacturers that stand to benefit from trends towards smarter or more efficient energy use whether through electric vehicles, the Internet of Things, on-grid or off-grid management systems and certain renewable energy technologies. That was our motivation for buying Siltronic and Global Wafers, and we continue to hunt for similar investments. Source of data: Carmignac, CEIC, JP Morgan Research, Barclays, Credit Suisse, Company data, 29/09/2017. Performance of the fund since its launch % /03 12/03 12/05 12/07 12/09 12/11 12/13 12/15 09/17 Carmignac Portfolio Commodities A EUR acc Reference indicator (1) 189% From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. (1) Index composed of 45% MSCI ACWI Oil and Gas NR (Eur), 5% MSCI ACWI Energy Equipment NR (Eur), 40% MSCI ACWI Metal and Mining NR (Eur), 5% MSCI ACWI Paper and Forest NR (Eur) et 5% MSCI ACWI Chemicals NR (Eur). Quarterly rebalanced. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report EQUITY MANAGEMENT / 31

32 EQUITY MANAGEMENT Some of our best-performing stocks in the quarter: Stocks Performance Alcoa, aluminium, USA +43% Siltronic, semi-conductors, Germany +42% Allegheny Technologies, steel, USA +41% Globalwafers, semi-conductors, Taiwan +39% Gardner Denver Holdings, oil & gas equipment & services, USA +27% Source : Bloomberg Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Geographical Exposure (%) Positions Long Short Net North America Europe Asia-Pacific Latin America Asia Middle East Eastern Europe Africa Total Sector Exposure (%) Positions Long Short Net Energy Industrial Materials Precious Metals Other Commodities Related Chemicals Agricultural resources Regional Indexes Total Net currency exposure of Euro share classes (%) Statistics (%) 1 year 3 years USD EUR GBP CHF AUD and CAD Latin America 1, Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Emerging Asia 2.0 Eastern Europe, Middle East and Africa -5.4 Other 2.7 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio Commodities A EUR acc Reference indicator* Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * Index composed of 45% MSCI ACWI Oil and Gas NR (Eur). 5% MSCI ACWI Energy Equipment NR (Eur). 40% MSCI ACWI Metal and Mining NR (Eur). 5% MSCI ACWI Paper and Forest NR (Eur) et 5% MSCI ACWI Chemicals NR (Eur). Quarterly rebalanced. ** Sector Equity Natural Resources. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Past performance is not a reliable indicator of future performance. Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. 32 / Management report CARMIGNAC THIRD QUARTER 2017

33 HOLDINGS CARMIGNAC PORTFOLIO COMMODITIES AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities Energy AFRICA OIL CORP (Canada) North America ANADARKO PETROLEUM (USA) North America EQUITY MANAGEMENT CANADIAN NATURAL RESOURCES LTD (Canada) North America CIMAREX ENERGY (USA) North America CONSOL ENERGY INC (USA) North America ENBRIDGE (Canada) North America EOG RESOURCES (USA) North America HALLIBURTON (USA) North America NOBLE ENERGY INC (USA) North America OASIS PETROLEUM INC (USA) North America PARSLEY ENERGY INC-CLASS A (USA) North America PDC ENERGY INC (USA) North America PETROFAC LTD (United Kingdom) Europe PIONEER NAT. RESOURCES (USA) North America ROYAL DUTCH SHELL PLC (Netherlands) Europe RPC (USA) North America SM ENERGY CO (USA) North America SUNCOR ENERGY (Canada) North America TRANSCANADA CORP (Canada) North America Industrial Materials ALCOA CORP (USA) North America ALLEGHENY TECHNOLOGIES (USA) North America ARCELORMITTAL (Luxembourg) Europe ARIZONA MINING INC (Canada) North America BHP BILLITON PLC (Australia) Asia-Pacific BOLIDEN (Sweden) Europe CEMEX HOLDINGS PHILIPPINES I (Philippines) Asia GARDNER DENVER HOLDINGS INC (USA) North America GLENCORE XSTRATA PLC (United Kingdom) Europe GRUPO MEXICO SA DE CV (Mexico) Latin America MUELLER INDUSTRIES INC (USA) North America NUCOR CORP (USA) North America RIO TINTO PLC (United Kingdom) Europe ROTORK PLC (United Kingdom) Europe TECK RESOURCES LTD (Canada) North America THYSSENKRUPP AG (Germany) Europe WEIR GROUP PLC (United Kingdom) Europe Precious Metals GOLDCORP INC (Canada) North America HOCHSCHILD MINING PLC (Peru) Latin America KANSAI MINING CORP (USA) North America LUNDIN MINING CORP (Canada) North America NEWMONT MINING (USA) North America ROYAL GOLD INC (USA) North America WHEATON PRECIOUS METALS CORP (Canada) North America CARMIGNAC THIRD QUARTER 2017 / 33

34 EQUITY MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO COMMODITIES AT 30/09/2017 Price in currencies Total value ( ) % of net assets Agricultural resources DARLING INGREDIENTS (USA) North America INTERFOR CORP (Canada) North America Chemicals METHANEX CORP (Canada) North America TESSENDERLO CHEMIE (Belgium) Europe Other Commodities Related GLOBALWAFERS (Taiwan) Asia MASTEC INC (USA) North America SILTRONIC AG (Germany) Europe Portfolio value Net assets NET EQUITY EXPOSURE CARMIGNAC PORTFOLIO COMMODITIES AT 30/09/2017 Exposure ( ) % Exposure Long derivative positions Regional Indexes (2 Positions) Europe Energy (6 Positions) North America Short derivative positions Energy (9 Positions) Europe Industrial Materials (8 Positions) Europe Other Commodities Related (1 Position) Europe Regional Indexes (4 Positions) Europe Energy (10 Positions) North America Energy (1 Position) Latin America Energy (2 Positions) Europe Energy (1 Position) Eastern Europe Industrial Materials (1 Position) Africa Industrial Materials (1 Position) North America Industrial Materials (1 Position) Latin America Industrial Materials (1 Position) Asia Other Commodities Related (1 Position) North America Regional Indexes (1 Position) Asia Regional Indexes (1 Position) North America Equity Investment Net equity exposure / Management report CARMIGNAC THIRD QUARTER 2017

35 Edouard Carmignac Rose Ouahba Diversified fund combining three performance drivers: international bonds, equities and currencies. At least 50% of the assets are permanently invested in fixed income and money market instruments. Its flexible allocation aims to mitigate capital fluctuation while seeking the best sources of return. The Fund aims to outperform its reference indicator over 3 years. Carmignac Patrimoine was down by a slight -0.28% in the third quarter, versus -0.15% for its reference indicator. This takes the Fund s year-to-date performance to +0.76%, surpassing the -0.31% recorded by its benchmark. For a more extensive discussion of our approach to equity investment, see the Carmignac Investissement report. We have entered the new quarter with a high equity exposure of 44%, based on our conviction that stock market trends still fail to reflect the magnitude of growth in a global economy awash with cash. Our fixed income portfolio in fact made a mildly negative -0.20% contribution to performance (compared with -0.89% for the reference indicator) that was primarily attributable to inadequate protection against the slide in the US dollar vis-à-vis the euro and to our defensive bias on interest rate hedges. During the third quarter, the US Federal Reserve announced a landmark decision to trim its balance sheet, with the European Central Bank soon to follow suit on 26 October. Contrary to our expectations, this major step towards monetary policy normalisation hasn t triggered a correction in bond markets, reflecting such countervailing tendencies as geopolitical tension, low inflation and, lastly, a stronger euro. But with the noteworthy exception of the stronger euro, those tendencies will be short-lived. We will therefore be sticking to our overweight stance on emerging-market debt, government paper from Italy, Greece and other EU-periphery countries and specific segments of the credit market. As part of our risk management policy, we are maintaining our bullish expectations with regard to both German bond yields which are still highly disconnected from the eurozone s economic fundamentals and the EU s common currency. Investment strategy Currencies and cash The euro gained 3.4% against the dollar and 3.5% against the yen during the quarter. At its meeting on 26 October, the ECB Governing Council will specify the pace and duration of its asset purchase programme (APP) for The markets have already priced in monthly purchases of 30 billion for nine months and a first rate hike during Q Judging that the euro s rise is being underpinned by robust economic growth, the central bank has done nothing to stem it. That policy has convinced us to maintain our foreign exchange hedges on our assets denominated in other currencies. Though the British pound steadied to a fair extent during the quarter, the Brexit negotiations have reached a deadlock due to the many hurdles yet to be cleared particularly regarding the ultimate price-tag for leaving and to the tumultuous political climate created by a lack of consensus in the UK government. We have accordingly continued to short sterling. Government bonds account for 27% of the Fund s assets, with 7% allocated to those in emerging markets. Our total modified duration at the end of the quarter was 0.3. Despite decent US GDP growth in the third quarter, a combination of geopolitical tension with North Korea and low inflation readings nudged US Treasury yields down by 0.05%. The outlook for tax cuts has improved of late, but Congress will need to limit those cuts to $1.5 trillion for budget neutrality to be maintained over the next ten years. Moreover, this bonanza for wealthy individuals and companies won t be fully reinjected into the economy. We estimate that the proposed tax reform will add between 0.1% and 0.3% to GDP at most. Against that backdrop, the Federal Reserve has started shrinking a balance sheet inflated with a record $4.5 trillion in assets (Treasuries and mortgage-backed debt) by ceasing to reinvest the principal on maturing securities. But the shrinkage will be extremely gradual, amounting to no more than 600 billion on a full-year basis, and US yields are likely to hover between 2.3% and 2.6% as the yield curve flattens further. Turning now to Europe, German yields ended the quarter relatively unchanged, with 10-year paper at 0.46%. The Italian, Greek and Portuguese government bonds in our portfolio boosted the Fund s results, whereas our short positions on German long-term yields detracted slightly from performance. Even so, we will be maintaining our cautious approach to those assets. Furthermore, the net supply of European sovereign bonds will be negative 260 billion in 2017, but in 2018 it will be positve 80 billion marking a 340 billion increase year-on-year. We have stepped up our holdings in Greece, convinced that the government s progress on structural reforms should soon pave the way to a debt relief agreement. And as Greek bonds were not included in the ECB s asset purchase programme, they won t be affected by a reduction in its size. Lastly, emerging-market government bonds account for 7% of the Fund s assets. EM debt securities have continued to reap the benefits of a favourable international environment marked by relatively stable US yields Performance of the fund since its launch % /89 12/92 12/95 12/98 12/01 12/04 12/07 12/10 12/13 12/16 09/17 Carmignac Patrimoine A EUR acc 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI all maturities (Eur) 755% From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report DIVERSIFIED MANAGEMENT / 35

36 DIVERSIFIED MANAGEMENT and a weaker dollar. However, they are unlikely to get much more support from rising commodity prices, a trend now drawing to a close. Emerging markets have no doubt seen substantial capital inflows over the past twelve months, but we still don t feel that investors are going overboard. As a result of Brazil s political crisis, the commodity price shock and tougher financial conditions in the United States, a lag in capital inflows built up between 2013 and 2016 that has yet to be fully reversed. We have kept our highly constructive outlook on Brazil and Mexico, but remain more cautious about Eastern Europe, where there is less opportunity. While EM bond valuations have lost some of their lustre, they have room for further appreciation real interest rates in the emerging world are still 2 percentage points ahead of those in the developed world. At the same time, the impact of political factors shouldn t be overlooked. For example, the victory of Cambiemos in Argentina s legislative elections represents a vote for economic reform and growth, given that the coalition aims to pare back the primary fiscal deficit from 4.2% of GDP in 2017 to 3.2% in We have reduced our allocation to corporate bonds from 21% to 20%. Resurgent risk appetite and the prospect of further ECB bond-buying have continued to drive risk premia relentlessly downwards, with the combination of vigorous economic growth and low inflation promising further gains for risk assets, particularly corporate credit. Today s low volatility is counterbalancing the extremely modest level of carry trades. Subordinated bonds issued by banks have continued to outperform their rivals in other sectors, thanks to attractive risk premia and improved fundamentals. As an alternative to conventional highly-rated credit, we favour collateralised debt obligations backed by pools of corporate bonds. They are still 100 basis points ahead of equivalently-rated straight corporate issues. Net currency exposure of Euro share classes (%) Sector breakdown (derivatives excluded) (%) USD EUR JPY GBP CHF , Information Technology Financials Materials Consumer Discretionary Energy AUD and CAD -8.9 Consumer Staples 6.5 Latin America 3.2 Healthcare 6.3 Emerging Asia Eastern Europe, Middle East and Africa Telecommunication Services Industrials Other 4.0 Bond portfolio (derivatives excluded) Rating breakdown (%) Bond portfolio (derivatives excluded) Maturity breakdown (%) AAA 22.2 < 1 year 18,120.5 AA years 15.6 A years 9.7 BBB 1,0 11, years 8.7 BB 2, years 0, B 10.4 > 10 years 11.3 CCC 0.3 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Patrimoine A EUR acc Reference indicator* Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI (Eur) (accrued interest). ** EUR Moderate Allocation - Global. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 36 / Management report CARMIGNAC THIRD QUARTER 2017

37 Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Modified duration of the bond portfolio (derivatives included) Euro United States 0.32 Other 0.32 DIVERSIFIED MANAGEMENT Quarterly gross performance contribution (%) Equity Portfolio Bond Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) HOLDINGS CARMIGNAC PATRIMOINE AT 30/09/2017 Price in currencies total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) ITALY 12/01/2018 Treasury bill in Euro ITALY 14/11/2017 Treasury bill in Euro SPAIN 13/10/2017 Treasury bill in Euro SPAIN 16/02/2018 Treasury bill in Euro SPAIN 17/11/2017 Treasury bill in Euro Developed countries fixed rate Government bonds GREECE 3.00% 24/02/2023 (Greece) Euro GREECE 3.00% 24/02/2024 (Greece) Euro GREECE 3.00% 24/02/2025 (Greece) Euro GREECE 3.00% 24/02/2026 (Greece) Euro GREECE 3.00% 24/02/2027 (Greece) Euro GREECE 3.00% 24/02/2028 (Greece) Euro GREECE 3.00% 24/02/2029 (Greece) Euro GREECE 3.00% 24/02/2030 (Greece) Euro GREECE 3.00% 24/02/2031 (Greece) Euro GREECE 3.00% 24/02/2032 (Greece) Euro GREECE 3.00% 24/02/2033 (Greece) Euro GREECE 3.00% 24/02/2034 (Greece) Euro GREECE 3.00% 24/02/2035 (Greece) Euro GREECE 3.00% 24/02/2036 (Greece) Euro GREECE 3.00% 24/02/2037 (Greece) Euro GREECE 3.00% 24/02/2038 (Greece) Euro GREECE 3.00% 24/02/2039 (Greece) Euro GREECE 3.00% 24/02/2040 (Greece) Euro GREECE 3.00% 24/02/2041 (Greece) Euro GREECE 3.00% 24/02/2042 (Greece) Euro GREECE 4.38% 01/08/2022 (Greece) Euro GREECE 4.75% 17/04/2019 (Greece) Euro IRELAND 3.90% 20/03/2023 (Ireland) Euro ITALY 0.45% 01/06/2021 (Italy) Euro ITALY 1.25% 01/12/2026 (Italy) Euro ITALY 1.85% 15/05/2024 (Italy) Euro ITALY 2.05% 01/08/2027 (Italy) Euro ITALY 2.20% 01/06/2027 (Italy) Euro ITALY 3.75% 01/05/2021 (Italy) Euro PORTUGAL 3.88% 15/02/2030 (Portugal) Euro PORTUGAL 4.35% 16/10/2017 (Portugal) Euro CARMIGNAC THIRD QUARTER 2017 / 37

38 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PATRIMOINE AT 30/09/2017 Price in currencies total value ( ) % of net assets PORTUGAL 4.45% 15/06/2018 (Portugal) Euro PORTUGAL 4.80% 15/06/2020 (Portugal) Euro PORTUGAL 4.95% 25/10/2023 (Portugal) Euro PORTUGAL 5.65% 15/02/2024 (Portugal) Euro SPAIN 1.40% 31/01/2020 (Spain) Euro SPAIN 5.50% 30/04/2021 (Spain) Euro UNITED STATES 2.12% 15/05/2025 (USA) Dollar UNITED STATES 2.25% 15/11/2024 (USA) Dollar Developed countries inflation-linked Government bonds USA I/L 0.38% 15/01/2027 (USA) Dollar USA I/L 0.62% 15/01/2026 (USA) Dollar Emerging markets fixed rate Government bonds ARGENTINA 2.26% 31/12/2038 (Argentina) Euro ARGENTINA 2.50% 31/12/2038 (Argentina) Dollar ARGENTINA 7.82% 31/12/2033 (Argentina) Euro BAHRAIN 6.75% 20/09/2029 (Bahrain) Dollar BAHRAIN 7.00% 12/10/2028 (Bahrain) Dollar BRAZIL 10.00% 01/01/2025 (Brazil) Real Brazil BRAZIL 5.62% 21/02/2047 (Brazil) Dollar CZECH REPUBLIC 0.00% 10/02/2020 (Czech Republic) Czech Crown CZECH REPUBLIC 0.00% 17/07/2019 (Czech Republic) Czech Crown EGYPT 6.12% 31/01/2022 (Egypt) Dollar MEXICO 8.00% 07/11/2047 (Mexico) Mexican peso RUSSIA 5.25% 23/06/2047 (Russia) Dollar RUSSIA 7.75% 16/09/2026 (Russia) Russian Ruble TURKEY 3.25% 14/06/2025 (Turkey) Euro TURKEY 5.75% 11/05/2047 (Turkey) Dollar Emerging countries inflation-linked Government bonds BRAZIL I/L 6.00% 15/08/2050 (Brazil) Real Brazil MEXICO I/L 4.50% 04/12/2025 (Mexiko) Mexican peso Developed countries fixed rate corporate bonds ABN AMRO BANK 2.88% C 30/06/2020 (Netherlands) Financials (subordinated debt) ALLERGAN FUND 0.50% C 01/05/2021 (Ireland) Healthcare ALLIED IRISH 2.75% 16/04/2019 (Ireland) Financials (senior debt) ALLIED IRISH 4.12% C 26/11/2020 (Ireland) Financials (subordinated debt) ALTICE SA 6.50% C 27/10/2017 (Netherlands) Consumer Discretionary ALTICE SA 6.50% C 30/10/2017 (Netherlands) Consumer Discretionary ALTICE SA 6.62% C 15/02/2018 (Netherlands) Consumer Discretionary ALTICE SA 7.25% C 27/10/2017 (Netherlands) Consumer Discretionary ALTICE SA 7.62% C 15/02/2020 (Netherlands) Consumer Discretionary ATENTO LUXCO 1 SA 6.12% C 10/08/2019 (USA) Industrials BANCO BPM SPA 2.75% 27/07/2020 (Italy) Financials (senior debt) BANK OF IRELAND 7.38% C 18/06/2020 (Ireland) Financials (subordinated debt) BANKIA 3.50% 17/01/2019 (Spain) Financials (senior debt) BANKIA 4.00% C 22/05/2019 (Spain) Financials (subordinated debt) BARCLAYS 2.62% C 11/11/2020 (United Kingdom) Financials (subordinated debt) BBVA 3.50% 10/02/2027 (Spain) Financials (subordinated debt) BBVA 3.50% C 11/04/2019 (Spain) Financials (subordinated debt) BBVA 8.88% C 14/04/2021 (Spain) Financials (subordinated debt) BBVA 9.00% C 09/05/2018 (Spain) Financials (subordinated debt) BELFIUS BANK SA 3.12% 11/05/2026 (Belgium) Financials (subordinated debt) BERKSHIRE HATHAWAY 0.50% C 13/02/2020 (USA) Financials (senior debt) CAIXABANK 6.75% C 13/06/2024 (Spain) Financials (subordinated debt) CHANNEL LINK 1.76% C 30/06/2022 (United Kingdom) Information Technology CHANNEL LINK 2.71% C 30/06/2027 (United Kingdom) Information Technology CITIGROUP INC 4.30% 20/11/2026 (USA) Financials (subordinated debt) CITIGROUP INC 4.40% 10/06/2025 (USA) Financials (subordinated debt) / Management report CARMIGNAC THIRD QUARTER 2017

39 HOLDINGS CARMIGNAC PATRIMOINE AT 30/09/2017 Price in currencies total value ( ) % of net assets CPI PROPERTY 2.13% C 04/10/2024 (Germany) Real Estate CREDIT AGRICOLE 4.38% 17/03/2025 (France) Financials (subordinated debt) CREDIT MUTUEL ARKEA 3.50% 09/02/2029 (France) Financials (subordinated debt) CREDIT SUISSE 5.75% C 18/09/2020 (Switzerland) Financials (subordinated debt) CREDIT SUISSE 6.50% 08/08/2023 (Switzerland) Financials (subordinated debt) DANSKE BANK A/S 5.88% C 06/04/2022 (Denmark) Financials (subordinated debt) EBAY INC 2.15% 05/06/2020 (USA) Information Technology EUROFINS SCIENTIFIC SE 2.12% C 25/04/2024 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 2.25% 27/01/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 3.38% C 30/10/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 4.88% C 29/04/2023 (Luxembourg) Healthcare (subordinated debt) FCA BANK SPA IRELAND 1.25% 21/01/2021 (Italy) Financials (senior debt) FCA BANK SPA IRELAND 1.38% 17/04/2020 (Italy) Financials (senior debt) FCA BANK SPA IRELAND 2.00% 23/10/2019 (Italy) Financials (senior debt) FCA BANK SPA IRELAND 2.62% 17/04/2019 (Italy) Financials (senior debt) FCA BANK SPA IRELAND 4.00% 17/10/2018 (Italy) Financials (senior debt) FIRST QUANTUM MINERALS LTD 7.25% C 30/10/2017 (Canada) Materials FONCIERE LYONNAISE 3.50% 28/11/2017 (France) Real Estate GLOBALWORTH REAL ESTATE 2.88% 20/06/2022 (Romania) Real Estate IBERDROLA 5.00% 11/09/2019 (Spain) Utilities INTESA SAN PAOLO 3.00% 28/01/2019 (Italy) Financials (senior debt) INTESA SAN PAOLO 3.88% 16/01/2018 (Italy) Financials (senior debt) INTESA SAN PAOLO 5.25% 12/01/2024 (Italy) Financials (senior debt) INTESA SAN PAOLO 5.71% 15/01/2026 (Italy) Financials (subordinated debt) INTRUM JUSTIT 2.62% C 15/06/2018 (Sweden) Industrials INTRUM JUSTIT 2.75% C 15/07/2019 (Sweden) Industrials INTRUM JUSTIT 3.12% C 15/07/2020 (Sweden) Industrials JP MORGAN 1.65% C 23/08/2019 (USA) Financials (senior debt) LEUCADIA 5.50% C 18/01/2023 (USA) Financials (senior debt) LLOYDS 4.58% 10/12/2025 (United Kingdom) Financials (subordinated debt) MERCURY BONDCO PLC 7.12% C 30/11/2017 (Italy) Information Technology MERCURY BONDCO PLC 8.25% C 30/11/2017 (Italy) Information Technology MURPHY OIL CORP 5.75% C 15/08/2020 (USA) Energy NASSA TOPCO AS 2.88% C 06/01/2024 (Denmark) Financials (senior debt) NETFLIX INC 3.62% 15/05/2027 (USA) Consumer Discretionary NORTH ATLANTIC DRILLING 6.25% 01/02/2019 (United Kingdom) Energy NUMERICABLE 6.00% C 27/10/2017 (France) Consumer Discretionary NUMERICABLE 6.25% C 15/05/2019 (France) Consumer Discretionary PERSHING SQUARE HOLDINGS LTD 5.50% C 15/06/2022 (Netherlands) Financials (senior debt) ROYAL BANK OF SCOTLAND 3.62% C 25/03/2019 (United Kingdom) Financials (subordinated debt) ROYAL BANK OF SCOTLAND 6.93% 09/04/2018 (United Kingdom) Financials (subordinated debt) ROYAL BANK OF SCOTLAND 8.62% C 15/08/2021 (United Kingdom) Financials (subordinated debt) TEVA PHARMACEUTICAL 1.12% 15/10/2024 (Israel) Healthcare TEVA PHARMACEUTICAL 1.25% C 31/12/2022 (Israel) Healthcare TEVA PHARMACEUTICAL 1.88% C 31/12/2026 (Israel) Healthcare TULLOW OIL 6.00% C 09/10/2017 (United Kingdom) Energy TULLOW OIL 6.25% C 27/10/2017 (United Kingdom) Energy UBS AG 4.75% C 12/02/2021 (Switzerland) Financials (subordinated debt) UBS AG 4.75% C 22/05/2018 (Switzerland) Financials (subordinated debt) UBS AG 5.12% 15/05/2024 (Switzerland) Financials (subordinated debt) UBS AG 7.62% 17/08/2022 (Switzerland) Financials (subordinated debt) UBS GROUP 3.00% 15/04/2021 (Switzerland) Financials (senior debt) UBS GROUP 4.12% 15/04/2026 (Switzerland) Financials (senior debt) UNICREDIT 5.86% C 19/06/2027 (Italy) Financials (subordinated debt) UNICREDIT 6.38% C 02/05/2018 (Italy) Financials (subordinated debt) UNICREDIT 6.95% 31/10/2022 (Italy) Financials (subordinated debt) UNICREDIT 9.25% C 03/06/2022 (Italy) Financials (subordinated debt) DIVERSIFIED MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 39

40 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PATRIMOINE AT 30/09/2017 Price in currencies total value ( ) % of net assets Developed countries floating rate corporate bonds ALLERGAN FUND TV 01/06/2019 (Ireland) Healthcare AP MOELLER-MAERSK A/S TV 18/03/2019 (Denmark) Industrials Emerging markets fixed rate corporate bonds BANITSMO SA 3.65% 19/09/2022 (Colombia) Financials (senior debt) BRF SA 2.75% 03/06/2022 (Brazil) Consumer Staples CBQ FINANCE 7.50% 18/11/2019 (Qatar) Financials (subordinated debt) CEDC FINANCE 10.00% C 10/10/2017 (Poland) Consumer Discretionary CESKE DRAHY 1.88% 25/05/2023 (Czech Republic) Industrials ICICI BANK 4.70% 21/02/2018 (India) Financials (senior debt) MOL HUNGARIAN OIL AND GAS 2.62% 28/04/2023 (Hungary) Energy MYRIAD INTERNATIONAL HOLDINGS BV 6.00% 18/07/2020 (South Africa) Consumer Discretionary NTPC LTD 2.75% 01/02/2027 (India) Utilities PETROBRAS 7.38% C 21/07/2020 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 6.12% 17/01/2022 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 6.62% 16/01/2034 (Brazil) Energy PETROLEOS MEXICANOS 4.25% 15/01/2025 (Mexico) Energy PETROLEOS MEXICANOS 4.88% 21/02/2028 (Mexico) Energy PETROLEOS MEXICANOS 5.50% 27/06/2044 (Mexico) Energy PETROLEOS MEXICANOS 6.75% 21/09/2047 (Mexico) Energy PHOSAGRO 4.20% 13/02/2018 (Russia) Materials SANTANDER 4.12% 09/11/2022 (Spain) Financials (senior debt) SIGMA ALIMENTOS SA 2.62% 07/02/2024 (Mexico) Consumer Staples TEVA PHARMACEUTICAL 0.38% 25/07/2020 (Israel) Healthcare TEVA PHARMACEUTICAL 2.88% 15/04/2019 (Israel) Healthcare YPF SA 8.50% 28/07/2025 (Argentina) Energy Developed countries convertible corporate bonds MITSUBISHI UF 4.17% 15/12/2050 (Japan) Financials (subordinated debt) Asset Backed Securities SPIRE PARTNERS, AURIUM CLO I (Europe) CLO (AAA tranche) SPIRE PARTNERS, AURIUM CLO II (Europe) CLO (AAA tranche) SPIRE PARTNERS, AURIUM CLO II (Europe) CLO (AA tranche) SPIRE PARTNERS, AURIUM CLO II (Europe) CLO (A tranche) AXA IM, ADAGIO V CLO (Europe) CLO (AAA tranche) AXA IM, ADAGIO V CLO (Europe) CLO (AA tranche) AXA IM, ALLEGRO CLO III (USA) CLO (AAA tranche) APOLLO MANAGEMENT, ALME LOAN FUNDING IV (Europe) CLO (AAA tranche) APOLLO MANAGEMENT, ALME LOAN FUNDING V (Europe) CLO (AAA tranche) APOLLO MANAGEMENT, ALME LOAN FUNDING V (Europe) CLO (A tranche) APEX CREDIT, APEXC CLO (USA) CLO (AAA tranche) APEX CREDIT, APEXC CLO (USA) CLO (AAA tranche) APEX CREDIT, APEXC CLO (USA) CLO (AAA tranche) OAKTREE CAPITAL, ARBOUR CLO III (Europe) CLO (AAA tranche) OAKTREE CAPITAL, ARBOUR CLO IV (Europe) CLO (AAA tranche) NEWSTAR CAPITAL, ARCH STREET CLO (USA) CLO (AAA tranche) BARINGS, BABSON EURO CLO (Europe) CLO (AAA tranche) BARINGS, BABSON EURO CLO (Europe) CLO (AA tranche) BARINGS, BABSON EURO CLO (Europe) CLO (A tranche) BLACK DIAMOND, BLACK DIAMOND CLO (USA) CLO (AAA tranche) COMMERZBANK, BOSPHORUS CLO III (Europe) CLO (AAA tranche) CSAM, CADOGAN SQUARE CLO VII (Europe) CLO (AA tranche) CSAM, CADOGAN SQUARE CLO VII (Europe) CLO (A tranche) CSAM, CADOGAN SQUARE CLO VII (Europe) CLO (BBB tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (AAA tranche) CVC CREDIT PARTNERS, CVC CORDATUS VI (Europe) CLO (AA tranche) CVC CREDIT PARTNERS, CVC CORDATUS VI (Europe) CLO (A tranche) CVC CREDIT PARTNERS, CVC CORDATUS VI (Europe) CLO (BBB tranche) / Management report CARMIGNAC THIRD QUARTER 2017

41 HOLDINGS CARMIGNAC PATRIMOINE AT 30/09/2017 Price in currencies total value ( ) % of net assets GUGGENHEIM, CORK STREET CLO (Europe) CLO (AAA tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (AA tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (A tranche) PRAMERICA, DRYDEN 39 EURO CLO (Europe) CLO (BBB tranche) PRAMERICA, DRYDEN 27 EURO CLO (Europe) CLO (AAA tranche) PRAMERICA, DRYDEN 27 EURO CLO (Europe) CLO (AA tranche) BARINGS, DUCHESS VI CLO (Europe) CLO (AAA tranche) BLACKSTONE/GSO, ELM PARK (Europe) CLO (AAA tranche) BLACKSTONE/GSO, ELM PARK (Europe) CLO (AA tranche) BLACKSTONE/GSO, ELM PARK (Europe) CLO (A tranche) BLACKSTONE/GSO, ELM PARK (Europe) CLO (BBB tranche) GLG PARTNERS, GLG EURO CLO I (Europe) CLO (AAA tranche) GOLUB CAPITAL, GOLUB CAPITAL CLO 35 (USA) CLO (AAA tranche) INVESTCORP, HARVEST CLO XIV (Europe) CLO (AAA tranche) INVESTCORP, HARVEST CLO IV (Europe) CLO (AA tranche) HALCYON, HALCYON HLA (USA) CLO (AAA tranche) ICG, ICG US CLO (USA) CLO (AAA tranche) ALCENTRA, JUBILEE CLO 2015-XVI (Europe) CLO (AAA tranche) ALCENTRA, JUBILEE CLO 2016-XVII (Europe) CLO (AAA tranche) ALCENTRA, JUBILEE CLO 2016-XVII (Europe) CLO (AA tranche) ALCENTRA, JUBILEE CLO 2016-XVII (Europe) CLO (A tranche) MARBLE POINT, MP CLO VII (USA) CLO (AAA tranche) INVESTCORP, MSIM CONISTON (Europe) CLO (AAA tranche) SEIX, MOUNTAIN VIEW CLO (USA) CLO (AAA tranche) SEIX, MOUNTAIN VIEW CLO X (USA) CLO (AAA tranche) NASSAU CREDIT, NASSAU (USA) CLO (BB tranche) BAIN CREDIT, NEWHAVEN II CLO (Europe) CLO (AAA tranche) ONEX CREDIT, OCP CLO (USA) CLO (AAA tranche) ONEX CREDIT, OCP CLO (USA) CLO (AAA tranche) OFS CLO MANAGEMENT, OFSI VIII (USA) CLO (AAA tranche) OAK HILL ADVISORS, OAK HILL ECP IV (Europe) CLO (AAA tranche) BLACKSTONE/GSO, ORWELL PARK PARK (Europe) CLO (AAA tranche) ROCKFORD TOWER CAPITAL, ROCKFORD TOWER (USA) CLO (AAA tranche) INVESCO, RISERVA CLO (USA) CLO (AAA tranche) SOFI, SOFI CONSUMER LOAN PROGRAM (USA) CLO (A tranche) ALCENTRA, SHACKLETON 2016-IX (USA) CLO (AAA tranche) SARANAC CLO MANAGEMENT, SARANAC CLO V (USA) CLO (A tranche) TRINITAS CAPITAL MANAGEMENT, TRINITAS CLO V (USA) CLO (AAA tranche) TRINITAS CAPITAL MANAGEMENT, TRINITAS CLO VI (USA) CLO (AAA tranche) TRINITAS CAPITAL MANAGEMENT, TRINITAS CLO VI (USA) CLO (A tranche) MJX MANAGEMENT, VENTURE XXVI CLO (USA) CLO (AAA tranche) Equities Developed countries North America ACTIVISION BLIZZARD (USA) Information Technology AMAZON.COM INC (USA) Consumer Discretionary ANADARKO PETROLEUM (USA) Energy BANK OF AMERICA (USA) Financials CELGENE CORP (USA) Healthcare CONCHO RESOURCES (USA) Energy EOG RESOURCES (USA) Energy FACEBOOK INC (USA) Information Technology FRANCO-NEVADA CORP (Canada) Materials GOLDCORP INC (Canada) Materials GRUBHUB INC (USA) Information Technology INTERCONTINENTAL EXCHANGE (USA) Financials MASTERCARD INC (USA) Information Technology NEWMONT MINING (USA) Materials DIVERSIFIED MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 41

42 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PATRIMOINE AT 30/09/2017 Price in currencies total value ( ) % of net assets NOBLE ENERGY INC (USA) Energy NVIDIA CORP (USA) Information Technology PIONEER NAT. RESOURCES (USA) Energy POTASH CORP (Canada) Materials SERVICENOW (USA) Information Technology SPLUNK INC (USA) Information Technology T-MOBILE US INC (USA) Telecommunication Services TRANSCANADA CORP (Canada) Energy TRIPADVISOR INC (USA) Consumer Discretionary VISA INC (USA) Information Technology WHEATON PRECIOUS METALS CORP (Canada) Materials ZAYO GROUP HOLDINGS INC (USA) Telecommunication Services Europe ALTICE SA (Netherlands) Consumer Discretionary ASML HOLDINGS (Netherlands) Information Technology ASOS PLC (United Kingdom) Consumer Discretionary DASSAULT AVIATION SA (France) Industrials HERMES INTERNATIONAL (France) Consumer Discretionary HSBC HOLDINGS (United Kingdom) Financials INDITEX (Spain) Consumer Discretionary LAFARGEHOLCIM LTD (Switzerland) Materials LONDON STOCK EXCHANGE (United Kingdom) Financials RECKITT BENCKISER (United Kingdom) Consumer Staples RENAULT SA (France) Consumer Discretionary VIFOR PHARMA AG (Switzerland) Healthcare Equities Emerging markets Latin America BANCO MACRO (Argentina) Financials CEMEX (Mexico) Materials GRUPO FINANCIERO GALICIA (Argentina) Financials GRUPO PAO DE ACUCAR (Brazil) Consumer Staples MERCADOLIBRE INC (Argentina) Information Technology Asia COM (China) Information Technology AIA GROUP LTD (Hong Kong) Financials HANGZHOU HIKVISION DIGITAL-A (China) Information Technology HDFC BANK (India) Financials INDUSIND BANK (India) Financials SAMSUNG ELECTRONICS (South Korea) Information Technology TENCENT HOLDINGS (China) Information Technology UNITED SPIRITS LTD (India) Consumer Staples Portfolio value Net assets / Management report CARMIGNAC THIRD QUARTER 2017

43 Xavier Hovasse Charles Zerah Diversified emerging markets fund combining three performance drivers: emerging market equities, bonds, and currencies. By actively managing the equity exposure between 0% and 50%, the Fund manager seeks to benefit from market upturns while limiting drawdowns. The Fund aims to outperform its reference indicator over 5 years. In the third quarter of 2017, Carmignac Portfolio Emerging Patrimoine returned +2.64%, compared with a +2.00% increase in its reference indicator. This takes its gain since the start of the year to +6.66%, versus +7.87% for its indicator. The Fund benefited handsomely from rising share prices in emerging markets and from declining yields on both local-currency and foreign-currency bonds in those countries. Fixed income component As in the previous quarter, the key emerging markets saw an acceleration in GDP growth driven by a rebound in commodity prices, a booming Chinese economy and vigorous international trade. Yields on local-currency emerging market debt (as measured by the JP Morgan GBI-EM Diversified Index) fell 16 basis points during the third quarter to 5.99%. In our bond portfolio, we have retained our preference for local debt over sovereign debt denominated in strong currencies, due to a combination of accommodative monetary policies and falling inflation in most emerging economies. The primary focus of our local-currency debt strategy is Latin America, where we have invested in inflation-linked Brazilian bonds (which still offer an attractive 30-year yield of 5.1%), Mexico s 30-year paper and Chilean issues. In contrast, we are less sanguine about Central and Eastern Europe. The European Central Bank should soon begin downsizing its bond-buying programme, which is likely to push European bond yields up. That explains our cautious overall stance on Hungarian and Polish fixed-income assets. Moreover, we believe upward pressure on wages could fuel inflation in both countries. Russia, however, remains an important investment destination for us. We initiated a position in Indian debt during the second quarter, while in the third we raised our exposure to Asia by buying localcurrency Indonesian debt. Indonesia offers an impressive 6% yield on 10-year paper, whereas inflation remains moderate. Since our purchases, the central bank has shaved 50 basis points off its benchmark rate. There has been very little change in our exposure to foreign-currency debt. We bought into the new dollar-denominated sovereign bond issued by Ukraine, a country that now enjoys financial support from the International Monetary Fund. We maintain our constructive outlook on bonds from emerging markets, which are buoyed by sound economic fundamentals and ample flows of capital from abroad. We plan to keep our exposure to local-currency emerging market debt high, while taking a much more selective approach to dollar- and euro-denominated sovereign debt now that monetary policy tightening is on the cards. Currency component The euro s appreciation against the greenback during the quarter proved detrimental to the Fund s performance, given our currency allocation. On the brighter side, our exposure to Europe s single currency shielded us considerably from forex market volatility. Despite upbeat economic data in emerging markets, their currencies failed by and large to gain ground against the euro as the cyclical upswing in Europe prompted international investors to shift large amounts of capital there. We have kept our currency allocation skewed to Latin America, even beefing up our Argentine peso holdings. At the same time, we have increased our exposure to Asian currencies, particularly to the Indonesian rupiah and the Indian rupee, to reap the benefits of strong GDP growth in those two economies. Equity component With the current environment working unambiguously to the advantage of emerging-world stocks, the equity component of our Fund continued to boost performance. China, a major allocation with 6.1% of the Fund s assets, posted sound economic indicators once again. The country s PMIs scaled highs seldom reached before as capital outflows were staunched for the time being and forex reserves began heading back upwards (adding $52 billion in the third quarter). And with inflation still negligible in September the CPI inched up by just 1.6% on an annualised basis monetary policy has remained loose. In the third Performance of the fund since its launch % /11 06/11 06/12 06/13 06/14 06/15 06/16 06/17 09/17 Carmignac Portfolio Emerging Patrimoine A EUR acc 50% MSCI EM NR (Eur) + 50% JP Morgan GBI EM (Eur) 20% From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report DIVERSIFIED MANAGEMENT / 43

44 DIVERSIFIAED MANAGEMENT quarter we acquired a new holding in Bitauto, a leading web portal serving the automotive industry and an online financial services platform for car-buyers. India, with 5.3% of the Fund s assets the second largest allocation in our equity portfolio, was similarly blessed with moderate inflation, showing a 3.2% annualised increase in the CPI. The lack of upward pressure on consumer prices was apparently enough to convince the country s otherwise fervently orthodox central bank to ease monetary policy mildly, lowering its key interest rate by 25 basis points. In addition, both exports and manufacturing indices bear witness to a fairly sound economy. We entered India s cement industry by buying a stake in Ambuja Cement. With a 10% market share, Ambuja should be among the prime beneficiaries of the infrastructure and social housing programmes the government has singled out for priority treatment. In Latin America, we continue to favour Argentina, one of the more promising emerging economies in our view. A reform-minded administration has been working in tandem with a hawkish central bank, and the payoff is already tangible. Inflation, while high, should slow further. And though Argentina s balance of payments is still weighed down by a current account deficit, direct foreign investment and substantial portfolio flows have put it on sounder foundations. To take advantage of the economic recovery under way, we raised our exposure to the country by acquiring a stake in the Grupo Supervielle bank. Argentine households and businesses have borrowed few money in the past, leaving the country with an unusually low banking penetration rate that opens up a major opportunity for Supervielle. Source of data: Carmignac, CEIC, JP Morgan Research, Barclays, Credit Suisse, Company data, 29/09/2017. Sector breakdown (derivatives excluded) (%) Bond portfolio (derivatives excluded) - Rating breakdown (%) Information Technology 31.5 AAA 6.2 Financials 21.0 AA 5.0 Consumer Discretionary 20.3 A 11, Materials 6.8 BBB 30.1 Consumer Staples 5.6 BB 27.8 Industrials 4.7 B 3, Real Estate 3.3 CCC 1.7 Utilities 3.1 Telecommunication Services 3.1 Healthcare 0.6 Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Bond portfolio (derivatives excluded) - Maturity breakdown (%) Net currency exposure of Euro share classes (%) < 1 year 6.9 EUR 13, years 3.6 JPY years 12.2 Latin America years 11.1 Emerging Asia 0, years 20, Eastern Europe, Middle East and Africa 11.8 > 10 years 32.0 Other -0.2 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio Emerging Patrimoine A EUR acc 6,66 2,64-0,21 5,09 13,61 9,09-19,68 Reference indicator* 7,87 2,00 0,38 9,04 15,59 17,52-24,69 Category average** 4,96 1,33-1,21 6,83 12,81 16,7-17,25 Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * 50% MSCI EM NR (Eur) + 50% JP Morgan GBI EM (Eur) (Accrued interest). ** Global Emerging Markets Equity. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 44 / Management report CARMIGNAC THIRD QUARTER 2017

45 Quarterly gross performance contribution (%) Equity Portfolio Bond Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total Modified duration of the bond portfolio (derivatives included) Euro 0.92 United States Other 2.55 Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO EMERGING PATRIMOINE AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Developed countries fixed rate Government bonds GREECE 3.00% 24/02/2038 (Greece) Euro GREECE 3.00% 24/02/2039 (Greece) Euro UNITED STATES 0.75% 31/10/2017 (USA) Dollar Emerging markets fixed rate Government bonds ARGENTINA 7.82% 31/12/2033 (Argentina) Euro BAHRAIN 7.00% 12/10/2028 (Bahrain) Dollar BRAZIL 5.62% 21/02/2047 (Brazil) Dollar EGYPT 5.75% 29/04/2020 (Egypt) Dollar EGYPT 6.12% 31/01/2022 (Egypt) Dollar INDONESIA 7.00% 15/05/2022 (Indonesia) IDR INDONESIA 7.00% 15/05/2027 (Indonesia) IDR INDONESIA 8.38% 15/09/2026 (Indonesia) IDR MALAYSIA 3.90% 16/11/2027 (Malaysia) MYR MEXICO 7.50% 03/06/2027 (Mexico) Mexican peso REPUBLIC OF ECUADOR 10.50% 24/03/2020 (Ecuador) Dollar RUSSIA 4.75% 27/05/2026 (Russia) Dollar SOUTH AFRICA 3.75% 24/07/2026 (South Africa) Euro THAILAND 4.88% 22/06/2029 (Thailand) Thai baht TURKEY 11.00% 02/03/2022 (Turkey) TRY TURKEY 3.25% 14/06/2025 (Turkey) Euro UKRAINE 7.38% 25/09/2032 (Ukraine) Dollar Emerging countries inflation-linked Government bonds BRAZIL I/L 6.00% 15/08/2050 (Brazil) Real Brazil CHILE I/L 1.50% 01/03/2021 (Chile) Chilean peso MEXICO I/L 4.50% 04/12/2025 (Mexico) Mexican peso RUSSIA I/L 2.50% 16/08/2023 (Russia) Russian Ruble Developed countries fixed rate corporate bonds AFREN 10.25% C 27/10/2017 (United Kingdom) Energy AFREN 6.62% C 09/12/2017 (United Kingdom) Energy JP MORGAN 0.00% 03/01/2030 (USA) Financials JP MORGAN 0.00% C 22/02/2032 (USA) Financials JP MORGAN 0.00% C 29/06/2022 (USA) Financials TIZIR LTD 9.50% C 19/07/2020 (United Kingdom) Materials TULLOW OIL 6.00% C 09/10/2017 (United Kingdom) Energy Emerging markets fixed rate corporate bonds BANCO MERCANTIL DEL NORTE SA/GRAND CAYMAN 6.88% C 06/07/2022 (Mexico) Financials (subordinated debt) BANCO MERCANTIL DEL NORTE SA/GRAND CAYMAN 7.62% C 06/01/2028 (Mexico) Financials (subordinated debt) GTLK EUROPE 5.12% 31/05/2024 (Russia) Financials RUSSIAN RAILWAYS VIA RZD CAPITAL PLC 2.10% 02/10/2023 (Russia) Industrials CEDC FINANCE 10.00% C 31/12/2022 (Poland) Consumer Discretionary INTERNATIONAL FINANCE CORP 6.30% 25/11/2024 (India) Financials PETROBRAS GLOBAL FINANCE BV 6.12% 17/01/2022 (Brazil) Energy CARMIGNAC THIRD QUARTER 2017 / 45

46 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO EMERGING PATRIMOINE AT 30/09/2017 Price in currencies Total value ( ) % of net assets PETROLEOS MEXICANOS 4.25% 15/01/2025 (Mexico) Energy PETROLEOS MEXICANOS 6.50% 13/03/2027 (Mexico) Energy Equities North America LAS VEGAS SANDS (USA) Consumer Discretionary Asia-Pacific LINE CORP (Japan) Information Technology Europe JERONIMO MARTINS (Portugal) Consumer Staples LILAC GROUP (United Kingdom) Consumer Discretionary Latin America BANCO MACRO (Argentina) Financials BANCO SANTANDER MEXICO (Mexico) Financials BB SEGURIDADE PARTICIPACOES (Brazil) Financials CEMEX (Mexico) Materials CIA DE ENER. ELEC. PAULISTA (Brazil) Utilities GRUPO BANORTE (Mexico) Financials GRUPO MEXICO SA DE CV (Mexico) Materials GRUPO SUPERVIELLE SA CL-B (Argentina) Financials MERCADOLIBRE INC (Argentina) Information Technology MEXICO REAL ESTATE MGMT (Mexico) Real Estate TRANSMISSORA ALIANCA (Brazil) Utilities Asia COM (China) Information Technology AIA GROUP LTD (Hong Kong) Financials AMBUJA CEMENTS (India) Materials ASTRA INTERNATIONAL (Indonesia) Consumer Discretionary BAIDU INC (China) Information Technology BHARTI INFRATEL LTD (India) Telecommunication Services BITAUTO HOLDINGS LTD-ADR (China) Information Technology DALI FOODS GROUP CO LTD (China) Consumer Staples FUYAO GROUP GLASS INDUSTRY-A (China) Consumer Discretionary HDFC BANK (India) Financials HERO MOTOCORP LTD (India) Consumer Discretionary HOUSING DEVELOPMENT FINANCE (India) Financials HYUNDAI MOTOR (South Korea) Consumer Discretionary KANGWON LAND (South Korea) Consumer Discretionary SAMSUNG BIOLOGICS CO LTD (South Korea) Healthcare SAMSUNG ELECTRONICS (South Korea) Information Technology SAMSUNG SDI CO (South Korea) Information Technology TAIWAN SEMICONDUCTOR (Taiwan) Information Technology TATA MOTORS LTD (India) Consumer Discretionary UNITED SPIRITS LTD (India) Consumer Staples ZHENGZHOU YUTONG BUS CO-A (China) Industrials ZTO EXPRESS CAYMAN INC (China) Industrials Africa NASPERS LTD (South Africa) Consumer Discretionary Eastern Europe MOSCOW EXCHANGE (Russia) Financials Middle East CHECK POINT SOFTWARE (Israel) Information Technology EMAAR PROPERTIES PJSC (United Arab Emirates) Real Estate ENKA INSAAT VE SANAYI (Turkey) Industrials Portfolio value Net assets / Management report CARMIGNAC THIRD QUARTER 2017

47 Malte Heininger European equity fund with an actively managed net equity exposure ranging between 0% and 50%. The Fund aims to generate alpha through the combination of long and short positions, while following a flexible and active management with an emphasis on limiting downside risk. The Fund aims to outperform its reference indicator over 3 years. Q3 was a good quarter for Carmignac Euro-Patrimoine. While the reference indicator was up +2.30%, the Fund gained +5.20% although maintaining a prudent beta adjusted net exposure. The year-to-date performance of the Fund is +8.60%, versus +5.65% for the indicator. Our constructive view on Europe was confirmed during the quarter, with an overall strong earnings season, relatively dovish ECB meetings and the German IFO Business Climate Index hitting an all-time high. The German election proved to be a non-event, with Merkel comfortably winning a 4th term as expected. However, the major parties worst post-war performance and the rise of the right-wing protest party AFD are indicative of a trend similar to what we have seen in France and the US, namely a widening and lasting gap between the winners and losers of the new digital world order. While equity indices are at or close to all-time highs and unemployment close to post-war lows in countries like Germany and the US, a significant portion of the population still feels left behind and wants change. Notwithstanding all the enthusiasm about technological progress and digitisation, the acceleration that we re currently experiencing and will witness in the near future could lead to serious structural problems and social unrest of the kind that could undermine the current peaceful environment. In such fields as autonomous driving, electronic vehicles, renewable energies, 3D printing, virtual reality and Artificial Intelligence, we are fast approaching an inflection point that will affect the way we live and work to an extent that we can barely even imagine today. The ensuing changes will create long-term winners and losers and, given the technological J-curve effect, it will take less time than in the past for the effects to become apparent. As investors, we try to position ourselves accordingly on the long and the short side. With that in mind, we have built a significant position in RIB Software. RIB is a market leader in 5D Building Information Modelling Software. While the construction market is huge, with about $9 trillion in annual volumes, the industry still operates in a relatively outmoded fashion and has not really changed much in the last 200 years. Companies like RIB help construction companies transition into the digital age by providing software solutions that merge the 3D construction process with the relevant timing and cost considerations and working to optimise the whole supply chain. To optimise procurement, they have partnered with Flex, a leader in contract manufacturing and supply chain management, to promote a global sourcing platform for the construction industry. While the market opportunity has been obvious for some time, we think that digitisation of the industry is moving close to an inflection point, partly facilitated by the innovative platform solution that RIB is offering together with Flex. When the market you serve weighs $9 trillion, you hardly need to make particularly bold assumptions to project a significant total addressable market. Another beneficiary of digitisation that we bought earlier this year is Vivendi. While their music business had been a clear loser in the shift from physical devices to digital, the mix shift has changed in their favour and their music business is accelerating again. As the largest music entertainment company in the world, Vivendi benefits from the rise in paid streaming services provided by Spotify, Apple, Amazon and Google. Due to their unique content and the shift of the industry from piracy downloads to paid streaming, the monetisation opportunity for Vivendi is huge. Lastly, a new hire on our team should be mentioned. Juhana Kaikkonen joined us in October from Silverlake, a tech-focused private equity firm, and will work very closely with the Fund manager on the investment side. Performance of the fund since conversion** % 80 12/02 12/04 12/06 12/08 12/10 12/12 12/14 12/16 09/17 Carmignac Euro-Patrimoine A EUR acc 50% Euro Stoxx 50 NR (Eur) + 50% Eonia compounded. From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). **The Fund was transformed on 01/01/2003: new reference indicator and new investment strategy. 53% * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report DIVERSIFIED MANAGEMENT / 47

48 DIVERSIFIED MANAGEMENT Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Exposure by asset class (%) Sector Exposure (%) Positions Long Short Net Cons. Goods Regional Indexes Industrials Basic Materials Oil & Gas Healthcare Cons. Services Financials Technology Telecommunication Total Long positions Net equity exposure Cash (including collateral cash from derivative positions) 6, Short positions Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since conversion on 01/01/2003*** Carmignac Euro-Patrimoine A EUR acc Reference indicator* Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * 50% Euro Stoxx 50 NR (Eur) + 50% Eonia compounded. ** EUR Moderate Allocation. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). ***The Fund was transformed on 01/01/2003: new reference indicator and new investment strategy. 48 / Management report CARMIGNAC THIRD QUARTER 2017

49 HOLDINGS CARMIGNAC EURO-PATRIMOINE AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Carmignac Court Terme Mutual Fund - Money Market Equities European Union Germany BASF SE Basic Materials BAYER AG Basic Materials BILFINGER BERGER AG Industrials BMW Consumer Goods CANCOM SE Technology COMMERZBANK AG Financials DELIVERY HERO AG Consumer Services DEUTSCHE BANK AG Financials DEUTSCHE BOERSE AG Financials FRESENIUS MEDICAL CARE Healthcare HAPAG-LLOYD AG Industrials MORPHOSYS Healthcare RIB SOFTWARE SE Technology SAP AG Technology SIEMENS AG Industrials SOFTWARE Technology TAG IMMOBILIEN AG Financials Belgium FAGRON NV Healthcare TESSENDERLO CHEMIE Basic Materials Spain NEINOR HOMES SA Financials TALGO SA Industrials Finland FERRATUM OYJ Financials France ALTRAN TECHNOLOGIES SA Technology CRITEO SA-SPON ADR Technology MAISONS DU MONDE SA Consumer Goods SOPRA STERIA GROUP Technology TELEPERFORMANCE Industrials VIVENDI Consumer Services Ireland ALLIED IRISH BANKS PLC Financials SMURFIT KAPPA GROUP PLC Industrials Netherlands ABN AMRO GROUP NV-CVA Financials ALTICE SA Telecommunication ASR NEDERLAND Financials KONINKLIJKE VOLKERWESSELS Industrials United Kingdom ALFA FINANCIAL SOFTWARE HOLD Technology GOCOMPARE.COM GROUP PLC Consumer Services INFORMA PLC Consumer Services MICRO FOCUS INTER. Technology RECKITT BENCKISER Consumer Goods SHIRE PLC Healthcare Equities ex European Union USA GRUBHUB INC Consumer Services TRIPADVISOR INC Consumer Services Switzerland NESTLE SA Consumer Goods PANALPINA WELTTRANSPORT Industrials TEMENOS GROUP AG Technology VIFOR PHARMA AG Healthcare Portfolio value Net assets DIVERSIFIED MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 49

50 DIVERSIFIED MANAGEMENT NET EQUITY EXPOSURE CARMIGNAC EURO-PATRIMOINE AT 30/09/2017 Exposure ( ) % Exposure Long derivative positions European Union Consumer Services (1 Position) United Kingdom Healthcare (1 Position) Ireland Regional Indexes (1 Position) Europe ex European Union Consumer Goods (1 Position) Switzerland Consumer Services (1 Position) USA Consumer Services (2 Positions) Switzerland Industrials (2 Positions) Switzerland Technology (1 Position) Switzerland Short derivative positions European Union Basic Materials (1 Position) Germany Consumer Goods (2 Positions) Germany Consumer Goods (1 Position) Spain Consumer Goods (1 Position) Finland Consumer Goods (1 Position) Ireland Consumer Services (1 Position) France Consumer Services (1 Position) Netherlands Consumer Services (3 Positions) United Kingdom Financials (3 Positions) Germany Financials (2 Positions) Netherlands Financials (1 Position) United Kingdom Healthcare (2 Positions) Germany Industrials (3 Positions) Germany Industrials (1 Position) Belgium Industrials (1 Position) Spain Industrials (1 Position) France Industrials (1 Position) Sweden Oil & Gas (1 Position) Germany Technology (1 Position) Germany Technology (1 Position) Belgium Regional Indexes (7 Positions) Europe Regional Indexes (1 Position) Sweden ex European Union Consumer Services (1 Position) USA Financials (1 Position) USA Healthcare (1 Position) Switzerland Industrials (1 Position) Switzerland Oil & Gas (1 Position) China Technology (1 Position) USA Telecommunication (1 Position) Switzerland Regional Indexes (1 Position) USA Regional Indexes (1 Position) Switzerland Equity Investment Net equity exposure / Management report CARMIGNAC THIRD QUARTER 2017

51 Frédéric Leroux Diversified fund, feeder of the Carmignac Investissement international equity fund. Through the use of derivatives, the Fund Manager is free to adjust the fund s exposure to Carmignac Investissement s equity risk from anywhere between 0% and 100%. The Fund combines strong convictions on global equities and expertise in managing market risk exposure. The Fund aims to outperform its reference indicator over 5 years. Carmignac Investissement Latitude gained +0.40% in the third quarter, against a +1.48% rise in its reference indicator and a +0.78% increase in its master fund, Carmignac Investissement. This takes the Fund s performance since the start of the year to +3.04%, versus +4.61% for its reference indicator. Derivatives transactions made a marginal contribution to performance in the quarter, while our equity-market trades put in a slightly positive showing thanks largely to our positions on the Euro Stoxx 50 and DAX 30, and despite losses on our hedge on the emerging-market index. Our short positions on Bunds, which we initiated out of a belief that eurozone bond yields would start edging upwards, detracted from performance, as did our sterling hedge, which turned out to be premature. The Fund went into the third quarter with an equity market exposure equal to that of its master fund, which is the maximum allowed for the Fund.** In addition to its investment in its master fund, Carmignac Investissement Latitude has long positions on futures and options contracts on the regional and sector-specific indices that are more sensitive to the business cycle than broader indices. At the same time, the Fund has shorted less-cyclical indices, thus preventing its exposure from exceeding that of its master fund. The Fund s long positions mainly concern the DAX 30, the European banking index, and the Nikkei 225, while its short positions are on the S&P 500 European staple and utility indices. These positions reflect our expectation of above-potential GDP growth in Europe, which would be a boon for cyclical stocks. In the forex market, we are keeping our US dollar exposure the same as that of the reference indicator, or 53%, consistent with our outlook three months ago that the bulk of the dollar s appreciation against the euro has already happened. The Fund has short positions on the yen and pound sterling as we expect those currencies to continue losing ground to the greenback. These exchange-rate and equity derivatives in the Fund s portfolio are the primary factors differentiating it from its master fund. We feel that our macroeconomic outlook from this past July is still relevant. Output has continued to expand in both Europe and the emerging world, while the United States has managed to sustain a growth rate of between 2.0% and 2.5% and Japan has kept its head above water. In view of that moderate yet synchronised growth, the Fed and the ECB can now progress calmly towards monetary policy normalisation, although such a shift would no doubt seem more legitimate if inflation were higher. Then again, low inflation opens the door to a return to normal monetary policies that will be gradual enough not to undermine the global economic expansion. At the same time, the fact that the United States has yet to introduce stimulus measures makes it easier for the US economy to keep humming without much danger of overheating and without being an excessive contributor to global growth. Investors risk appetite has been stimulated by the prospects of major tax reform and large-scale infrastructure spending in the US two scenarios that may or may not get off the ground. But if they do, the resulting GDP growth rate could prove too high to allow central banks to continue to play it safe, in which case the monetary policy normalisation process is likely to pick up speed. The other danger facing the market for risk assets would be a dramatic economic slump emanating from the United States. That makes it imperative to keep a close watch on where world trade is heading. For the past six months, export growth in the leading trading nations has been close to zero, after a trade boom that did a great deal to disseminate economic growth across the globe and boost corporate earnings. A telling sign of how solid the expansionary phase in the business cycle is today is that wave after wave of political uncertainty and even upset has barely caused a ripple. Leaving aside the two risks mentioned above and as long as the stock market rally doesn t spin out of control recent trends can be expected to continue. We have retained our unabashedly bullish investment strategy, which we intend to implement in our four key asset classes in the following way: We will maintain maximum exposure to equities meaning the same exposure as for Carmignac Investissement while adding a cyclical bias through derivatives positions on the countries and sectors most highly correlated with economic activity. To avoid exceeding the master fund s equity exposure, we will use derivatives to short defensive sectors and markets. Performance of the fund since its launch % 117% 50 01/05 01/07 01/09 01/11 01/13 01/15 01/17 09/17 Carmignac Investissement Latitude A EUR acc MSCI AC World NR (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. **The Fund s equity exposure can range from 0% to 100% of its master fund s equity exposure. Management report DIVERSIFIED MANAGEMENT / 51

52 DIVERSIFIED MANAGEMENT On the interest-rate front, we plan to keep our exposure to duration low or even negative in the event that German and US bond yields sag further. In the forex market, we will maintain negative exposure to the yen and to sterling, and we will de-index our holdings from fluctuations in the US dollar as soon as the greenback has adequately corrected its fall against the euro. Net currency exposure of the fund (%) USD EUR JPY GBP CHF AUD and CAD Latin America Emerging Asia , ,1 40, In more general terms, we will be closely tracking macroeconomic shifts and political developments in the United States so that we can tackle the two risks discussed above as effectively as possible. Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Quarterly gross performance contribution (%) Equity Derivatives Bond Derivatives Currency Derivatives Mutual Fund Total Exposure rate (%): Exposure rate of the master fund (%): Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Investissement Latitude A EUR acc MSCI AC World NR (Eur) Category average* Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * EUR Flexible Allocation - Global. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 52 / Management report CARMIGNAC THIRD QUARTER 2017

53 Carmignac Profil Réactif 100 A EUR acc Carmignac Profil Réactif 75 A EUR acc Carmignac Profil Réactif 50 A EUR acc Frédéric Leroux Pierre-Edouard Bonenfant The Profils Réactifs funds are managed on a discretionary basis by the portfolio manager, who pursues an active asset allocation policy, mainly involving funds invested in international equities and bonds. They aim to generate a positive annual return while keeping annual volatility below that of their reference indicator. Two of our three Profil Réactif funds outperformed their reference indicators in the third quarter. Carmignac Profil Réactif 75 was up +1.11% (versus +0.66% for its reference indicator) and Carmignac Profil Réactif 50 returned +0.93% (versus -0.15%). Our third fund, Carmignac Profil Réactif 100, increased +1.38%, compared with +1.48% for its reference indicator. This takes their gains since the start of the year to +6.11% for Carmignac Profil Réactif 100, to +4.74% for Carmignac Profil Réactif 75 and to +2.06% for Carmignac Profil Réactif 50, versus +4.61%, +2.14% and -0.31% for their respective benchmarks. In our preceding report, we stressed our highly constructive macroeconomic outlook, reflecting our conviction that the acceleration of growth in Europe and Japan was being counterbalanced by a US economy apparently approaching the end of its expansionary cycle. The current cocktail of real, but moderate growth mixed with relatively lax monetary policy should allow risk assets to make further gains despite the current tendency towards higher interest rates, we argued. Our three Profil Réactif funds thus maintained fairly high average equity exposures in July and August: 77% in the case of Carmignac Profil Réactif 100, 54% in the case of Carmignac Profil Réactif 75 and 32% in the case of Carmignac Profil Réactif 50. At the beginning of the quarter, we added a position in Carmignac Investissement to our portfolios in order to round out our equity allocation, which until then had been predominantly focused on Europe (via Carmignac Euro-Patrimoine, Carmignac Portfolio Grande Europe and Carmignac Euro-Entrepreneurs) and the emerging markets. The end of the summer saw market stress as geopolitical tension around North Korea mounted. That led us to pare back our exposure to highbeta stocks (European and global equities) and move into bond funds via Carmignac Sécurité or Carmignac Portfolio Capital Plus, depending on the Profil Réactif fund. At the same time, we initiated a position in our diversified fund Carmignac Portfolio Emerging Patrimoine to take advantage of the spreads on emerging-market bonds. In September, our three Profil Réactif funds had average equity market exposures of 45%, 36% and 24%, respectively. All three of them benefited during the quarter from the positive contribution to performance delivered by Carmignac Euro-Patrimoine and Carmignac Euro-Entrepreneurs. The Carmignac Profil Réactif 100 and 75 funds also booked gains on their exposure to emerging-market equities through Carmignac Emergents. In contrast, those two funds positions in Carmignac Portfolio Grande Europe detracted from performance. Carmignac Profil Réactif 50 was likewise hurt by its fixed-income investments. Our derivatives strategies based on buying country and regional indices (Japan and Europe) and sector indices (European banks) contributed positively to the quarterly performance of all three Profil Réactif funds. Our Profil Réactif funds are entering the fourth quarter of 2017 with moderate equity market exposure and low exposure to the US dollar. In the United States, the prospect of tax reform, however remote, has created expectations that are buoying business sentiment for the time being. Although the expansionary phase in the US already shows signs of fatigue, its economy is still growing at a decent pace, and in sync with the rest of the world. We see no reason in the current environment to fear either overheating which would drive central bankers to step up the pace of monetary policy normalisation or an abrupt trend reversal. The global economy is growing robustly enough to be able to handle the first stages of the unfolding contraction in monetary stimulus, which will reduce monthly cash injections into the system from $200 billion to $150 billion as of next January. Moreover, with unconditional monetary support from central banks drawing to a close, we should see a return to more symmetric business cycles. Interpreting them should be easier and so should taking the right portfolio management decisions. * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report PROFILED MANAGEMENT / 53

54 PROFILED MANAGEMENT Asset allocation (%) Title CPR 100 A EUR acc CPR 75 A EUR acc CPR 50 A EUR acc Carmignac Euro-Entrepreneurs A EUR acc Carmignac Emergents A EUR acc Carmignac Portfolio Emerging Discovery A EUR acc Carmignac Euro-Patrimoine A EUR acc Carmignac Portfolio Emerging Patrimoine A EUR acc Carmignac Portfolio Global Bond A EUR acc Carmignac Securité A EUR acc Carmignac Portfolio Capital Plus A EUR acc Carmignac Court Terme A EUR acc Cash (including collateral cash from derivative positions) Total Exposure by asset class (%) CPR 100 A EUR acc CPR 75 A EUR acc CPR 50 A EUR acc Equities Bonds Cash (including collateral cash from derivative positions) Net currency exposure of Euro share classes (%) Carmignac Profil Réactif 100 Net currency exposure of Euro share classes (%) Carmignac Profil Réactif 75 Net currency exposure of Euro share classes (%) Carmignac Profil Réactif 50 USD 8.9 USD 8.0 USD 1.8 EUR JPY , EUR GBP , EUR JPY GBP 1.4 CHF 0.5 GBP 1.3 CHF 0.5 AUD and CAD -0.2 CHF 0.5 AUD and CAD -0.2 Latin America 2.9 AUD and CAD -0.2 Latin America Emerging Asia Eastern Europe, Middle East and Africa Emerging Asia Eastern Europe, Middle East and Africa Latin America Emerging Asia Eastern Europe, Middle East and Africa CARMIGNAC PROFIL RÉACTIF 100 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Profil Réactif 100 A EUR acc MSCI AC World NR (Eur) Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * EUR Moderate Allocation. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Statistics (%) 1 year 3 years Performance of the fund since its launch Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Quarterly gross performance contribution (%) Equity Derivatives Mutual Fund Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) / Management report % % /02 01/04 01/06 01/08 01/10 01/12 01/14 01/16 09/17 Carmignac Profil Réactif 100 A EUR acc MSCI AC World NR (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). CARMIGNAC THIRD QUARTER 2017

55 CARMIGNAC PROFIL RÉACTIF 75 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Profil Réactif 75 A EUR acc Reference indicator* Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * 75% MSCI ACW NR (Eur) + 25% Citigroup WGBI (Eur) (Accrued interest). ** EUR Aggressive Allocation - Global. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). PROFILED MANAGEMENT Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Quarterly gross performance contribution (%) Equity Derivatives Mutual Fund Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Performance of the fund since its launch % % /99 06/02 06/05 06/08 06/11 06/14 06/17 09/17 Carmignac Profil Réactif 75 A EUR acc 75% MSCI ACW NR (Eur) + 25% Citigroup WGBI all maturities (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). CARMIGNAC PROFIL RÉACTIF 50 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Profil Réactif 50 A EUR acc Reference indicator* Category average** Ranking (quartile) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. * 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI (Eur) (Accrued interest). ** EUR Flexible Allocation - Global. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Quarterly gross performance contribution (%) Equity Derivatives Mutual Fund Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Performance of the fund since its launch % 84% 75 01/02 01/04 01/06 01/08 01/10 01/12 01/14 01/16 09/17 Carmignac Profil Réactif 50 A EUR acc 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI all maturities (Eur) From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). CARMIGNAC THIRD QUARTER 2017 / 55

56 Charles Zerah International fixed income fund that implements interest rate, credit and currency strategies across the globe. Its flexible and opportunistic style enables the Fund to implement a largely unconstrained, conviction-driven allocation and swiftly adapt, when necessary, to fully exploit opportunities in all market conditions. The Fund aims to outperform its reference indicator over 2 years. In the third quarter of 2017, Carmignac Portfolio Unconstrained Global Bond was down -0.59% ; that was less marked, however, than the -1.93% fall in its reference indicator. The Fund was hurt by the euro s sharp appreciation against the other main international currencies, but we did make gains on the appreciation in value of corporate bonds, emerging-market debt and government paper from the EU periphery in our portfolio. Although the Fund has recorded a performance of -0.37% since the beginning of the year, its benchmark has done substantially worse, shedding -5.62%. Government Bond component In our previous report, we stated that we were maintaining our cautious stance on developed-country government bonds after the governors of the leading central banks shifted their rhetoric to set the stage for monetary policy normalisation. But despite the Federal Reserve s firm intention to shrink its balance sheet from October onwards, US Treasury yields traded in a range of roughly 40 basis points this past quarter. The lack of any serious inflationary pressure at this stage of the business cycle has apparently kept yields in the US struggling for direction. However, the renewed focus on the tax cuts promised by President Trump for before the end of 2017 has left fixed-income investors jittery. If Congress actually passes the proposed tax bill by year-end though we doubt it will we will be in for a sharp rise in inflation expectations that will drive bond yields up. We have therefore stuck to our cautious approach to the US bond market after the corrections we saw in September, and we have scaled back our positions on the US yield curve. Performance of the fund since its launch % % % % /07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16 03/17 09/17 Carmignac Portfolio Unconstrained Global Bond A EUR acc JP Morgan GBI Global (EUR) (accrued interest) ---- Carmignac Portfolio Unconstrained Global Bond A EUR acc rebased at 01/03/2010, date of the beginning of fund management by C. Zerah ---- JP Morgan GBI Global (EUR) (accrued interest) rebased at 01/03/2010, date of the beginning of fund management by C. Zerah Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). We have taken the opposite tack in Europe, however, either maintaining or stepping up our positions on the German, French and Swiss yield curves. The European Central Bank can be expected to announce a plan during the fourth quarter to downsize its quantitative easing programme, based on the vigorous economic upswing in the eurozone and a number of upbeat leading indicators. While inflation is still low, we are beginning to see encouraging signs of a pick-up fuelled by the vibrant economy. This leads us to believe that a strategy of shorting various segments of the German yield curve (5, 10 and 30 years) offers our Fund an attractive risk reward. At the same time, we have kept our Italian and Spanish government paper and increased our Greek debt holdings, both to benefit from the recovery in those economies and to offset the high cost of our short positions on Germany and France. The Fund benefitted from the good performance of its emerging market bonds, though they contributed less in Q3 than in the previous quarter. To adjust our allocation, we scaled back our exposure to foreign-currency debt and bought more local-currency debt. More specifically, after taking profits on commodityrelated sovereigns from Russia and South Africa, we initiated positions in Indonesian and Indian local-currency debt. We have maintained our allocation to this asset class as a whole because we feel it still offers attractive spreads between local-currency bonds and foreign debt. Lastly, we will be continuing with our cautious approach to developedcountry government bonds and actively managing the Fund s overall modified duration. Corporate Bond component For several quarters now, our corporate credit investments have had three clear-cut focus areas: subordinated bank bonds from Europe, structured credit and energy sector bonds issued mainly in emerging markets. We continued to take profits on financial-sector paper in the third quarter, given that yields on a large number of subordinated bonds issued by European banks slid by over 100 basis points since the start of the year. In the process, we offloaded such names as Caixa Bank, Danske Bank, Unicredit and Banco Sabadell. As in the preceding quarters, corporate credit was a significant driver of the Fund s performance this time around, contributing nearly 64 basis points. Our global macroeconomic outlook prompts us to stick to those three investment themes, all of which should benefit from a growing world economy. Paper issued by banks and oil companies, together with European CLOs, accounts for roughly 15% of the Fund s assets. Currency component At the beginning of the third quarter, the bulk of our currency exposure was to the euro, but we had also maintained some exposure to the US dollar. As it turns out, our dollar exposure detracted from performance. The continuing appreciation of the euro against all other currencies cost the Fund 134 basis * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. 56 / Management report FIXED INCOME MANAGEMENT

57 points during the period. That appreciation reflected a major reversal among institutional investors worldwide, as they had been pulling out of the eurozone and its currency since the sovereign debt crisis hit the continent. The sharp rebound in economic activity, combined with the beginning of monetary policy normalisation by the ECB, should provide further support to the region s common currency. The Fund therefore remains highly exposed to the euro. We have also maintained our diversified allocation to emergingmarket currencies, which account for more than 12% of the Fund s assets (see Bond portfolio (derivatives excluded) - Rating breakdown (%) Carmignac Portfolio Emerging Patrimoine report). Our 9% exposure to the yen stems from a portfolio construction strategy geared to limiting volatility in the Fund in the event of an exogenous shock. To conclude, we are maintaining our cautious stance on developed-country government bonds, as well as our diversified allocation to emerging-market sovereigns and to corporate bonds. We will also continue with our prudent approach to currency allocation, with the euro as our primary exposure. Net currency exposure of Euro share classes (%) FIXED INCOME MANAGEMENT AAA 5.8 USD 6.3 AA 12.3 EUR 24, A 20.7 JPY 8.5 BBB 17, GBP -2.0 BB 19.1 CHF 0.2 B 16.3 AUD and CAD 0.3 Latin America 5.5 Emerging Asia 7.2 Eastern Europe, Middle East and Africa -0.8 Sector breakdown (derivatives excluded) (%) Bond portfolio (derivatives excluded) - Maturity breakdown (%) Financials Energy Industrials < 1 year 1-3 years 3-5 years years years 1, > 10 years 29.5 Modified duration of the bond portfolio (derivatives included) Euro United States 0.24 Other 0.58 Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Quarterly gross performance contribution (%) Bond Portfolio Bond Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio Unconstrained Global Bond A EUR acc JP Morgan GBI (Eur) (Accrued interest) Category average* Ranking (quartile) * Global Bond. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). CARMIGNAC THIRD QUARTER 2017 / 57

58 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO UNCONSTRAINED GLOBAL BOND AT 30/09/2017 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) GREECE 05/01/2018 Treasury bill in Euro ITALY 12/01/2018 Treasury bill in Euro ITALY 14/02/2018 Treasury bill in Euro SPAIN 13/10/2017 Treasury bill in Euro SPAIN 17/11/2017 Treasury bill in Euro Fixed income investments Developed countries fixed rate Government bonds AUSTRIA 1.50% 02/11/2086 (Austria) Euro AUSTRIA 2.10% 20/09/2117 (Austria) Euro GREECE 3.00% 24/02/2027 (Greece) Euro GREECE 3.00% 24/02/2028 (Greece) Euro GREECE 3.00% 24/02/2031 (Greece) Euro GREECE 3.00% 24/02/2032 (Greece) Euro GREECE 3.00% 24/02/2036 (Greece) Euro GREECE 3.00% 24/02/2039 (Greece) Euro GREECE 3.00% 24/02/2040 (Greece) Euro GREECE 3.00% 24/02/2041 (Greece) Euro GREECE 4.38% 01/08/2022 (Greece) Euro ITALY 2.20% 01/06/2027 (Italy) Euro ITALY 2.70% 01/03/2047 (Italy) Euro PORTUGAL 4.45% 15/06/2018 (Portugal) Euro PORTUGAL 4.75% 14/06/2019 (Portugal) Euro SPAIN 0.40% 30/04/2022 (Spain) Euro SPAIN 1.50% 30/04/2027 (Spain) Euro SPAIN 2.90% 31/10/2046 (Spain) Euro Emerging markets fixed rate Government bonds ARGENTINA 7.82% 31/12/2033 (Argentina) Euro BAHRAIN 7.00% 12/10/2028 (Bahrain) Dollar BRAZIL 5.62% 21/02/2047 (Brazil) Dollar CZECH REPUBLIC 0.00% 10/02/2020 (Czech Republic) Czech Crown CZECH REPUBLIC 0.00% 17/07/2019 (Czech Republic) Czech Crown INDONESIA 7.00% 15/05/2022 (Indonesia) IDR INDONESIA 7.00% 15/05/2027 (Indonesia) IDR MEXICO 7.50% 03/06/2027 (Mexico) Mexican peso MEXICO 8.00% 07/11/2047 (Mexico) Mexican peso TURKEY 3.25% 14/06/2025 (Turkey) Euro UKRAINE 7.38% 25/09/2032 Dollar Emerging countries inflation-linked Government bonds BRAZIL I/L 6.00% 15/08/2050 (Brazil) Real Brazil Developed countries fixed rate corporate bonds BANK OF IRELAND 4.12% C 19/09/2022 (Ireland) Financials (subordinated debt) INTERNATIONAL FINANCE CORP 6.30% 25/11/2024 (USA) Financials JP MORGAN 0.00% C 22/02/2032 (USA) Financials JP MORGAN 0.00% C 29/06/2022 (USA) Financials MURPHY OIL CORP 5.75% C 15/08/2020 (USA) Energy RUSSIAN RAILWAYS VIA RZD CAPITAL PLC 2.10% 02/10/2023 (Russia) Industrials SOCIETE GENERALE 7.88% C 18/12/2023 (France) Financials (subordinated debt) TULLOW OIL 6.00% C 09/10/2017 (United Kingdom) Energy Emerging markets fixed rate corporate bonds BANCO MERCANTIL DEL NORTE SA/GRAND CAYMAN 6.88% C 06/07/2022 (Mexico) Financials (subordinated debt) BANCO MERCANTIL DEL NORTE SA/GRAND CAYMAN 7.62% C 06/01/2028 (Mexico) Financials (subordinated debt) PETROBRAS GLOBAL FINANCE BV 5.62% 20/05/2043 (Brazil) Energy PETROLEOS MEXICANOS 4.25% 15/01/2025 (Mexico) Energy PETROLEOS MEXICANOS 6.75% 21/09/2047 (Mexico) Energy Developed countries convertible corporate bonds MITSUBISHI UF 4.17% 15/12/2050 (Japan) Financials (subordinated debt) Asset Backed Securities APOLLO MANAGEMENT, ALME LOAN FUNDING V (Europe) CLO (BB tranche) ARES MANAGEMENT, ARES EUROPEAN CLO VIII (Europe) CLO (BB tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO X (Europe) CLO (B tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XIV (Europe) CLO (BB tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (B tranche) CVC CREDIT PARTNERS, CVC CORDATUS VIII (Europe) CLO (B tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (B tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (B tranche) PRAMERICA, DRYDEN 46 EURO CLO (Europe) CLO (BB tranche) BAIN CREDIT, NEWHAVEN CLO (Europe) CLO (B tranche) BAIN CREDIT, NEWHAVEN II CLO (Europe) CLO (B tranche) ONEX CREDIT, OCP EURO CLO (Europe) CLO (B tranche) BLACKSTONE/GSO, ORWELL PARK (Europe) CLO (BB tranche) PARTNERS GROUP, PENTA CLO 2 (Europe) CLO (BB tranche) PARTNERS GROUP, PENTA CLO 3 (Europe) CLO (BB tranche) CHENAVARI, TORO EUROPEAN CLO 1 (Europe) CLO (BB tranche) CHENAVARI, TORO EUROPEAN CLO 2 (Europe) CLO (BB tranche) CHENAVARI, TORO EUROPEAN CLO 2 (Europe) CLO (B tranche) TIKEHAU CAPITAL, TIKEHAU CLO (Europe) CLO (BB tranche) TIKEHAU CAPITAL, TIKEHAU CLO II (Europe) CLO (BB tranche) Portfolio value Net assets / Management report CARMIGNAC THIRD QUARTER 2017

59 Keith Ney Fund invested in bonds and other debt securities denominated in Euro. It seeks to outperform its reference indicator, the Euro MTS 1-3 years, over a 2-year investment horizon with lower volatility. In the third quarter of 2017, Carmignac Sécurité decreased by -0.24%, while its benchmark increased by +0.08%, bringing the year-to-date performance for the Fund to +0.16%, versus the benchmark -0.26%. Quarterly Performance Review Our disappointing third quarter performance was driven by the reversal of gains in our interest rate hedges from earlier in the year. These losses more than offset gains in our Italian and Spanish sovereign and investment grade credit investments. After closing the second quarter near the highs of the year, German interest rates declined materially during the quarter, hurting our short positions. The trading range of 2017 for the 10 year German government bond of 0.1% to 0.5% yield to maturity was temporarily broken to the high end during July, but couldn t hold. The ECB s governing council members made a fierce effort to control the Sintra speech sell-off, hammering home their motto persistence, patient and prudent regarding the pace of policy normalization. Our bearish portfolio construction, which worked well preserving capital during the twelve month period of rising rates since they bottomed in July 2016 until July 2017, was clearly too conservative for this short period. Over the medium-term, our view remains that this positioning is appropriate to manage the alignment of economic, political, and liquidity cycles that all call for higher rates. We remain skeptical that the portfolio rebalance channel won t eventually work in reverse, and that as monetary policy makers confidence in normalizing policy increases, risky assets will eventually need to reflect a less accommodating liquidity environment. The current unique market regime combining risk premia suppression by central banks, deteriorating secondary market liquidity, and inflows into non-fundamentally driven index funds and volatility sensitive investment strategies, will eventually break, producing opportunities for the discerning long-term value investor. Investment Strategy With Carmignac Sécurité s benchmark offering a negative average yield to maturity of -0.46%, short-maturity Eurozone fixed income is severely challenged. Although subject to an attendant higher level of volatility, we are convinced that a flexible and opportunistic strategy with disciplined risk management is essential to outperform during this era of financial repression and its heightened political, macro, and market-driven uncertainty. Carmignac Sécurité will continue to focus on the following core strategies: Firstly, non-core European government bond spreads are likely to tighten over the medium-term. We have re-established exposure in both Italy and Spain. In particular in Italy, spreads to Germany have materially lagged the risk premia compression seen across other European asset classes, even Italian equities and subordinated bank credit. In our view, the widening in the 10 year BTP/Bund spread from its cycle trough in March 2015 near 90bp to 165bp at quarter-end is excessive. Sparked by political concerns that we feel will pass, this spread cushion will serve to absorb the risk premia shift to a post-qe era that few other asset classes have yet to reflect. Italy will benefit from the Eurozone s broadening cyclical recovery and increasing political momentum for further, faster integration. Secondly, bank credit across the capital structure should outperform, as the multi-year trend of de-risking, de-leveraging, and re-regulating banks works to decrease the excessive systemic discount still in bank credit spreads. In particular, the banking policy shift from taxpayer funded bail-outs to unsecured creditor funded restructuring and resolution should drive increased bank risk differentiation and flight to quality within the periphery. Financials remain our largest credit exposure at 21% of the fund, with the underlying risk today mostly focused on senior unsecured and very short-maturity securities. Thirdly, tight European non-financial credit spreads have kept us focused on the fringes of the market. Our exposure to European Collaterised Loan Obligations is around 5%, mostly in AAA Performance of the fund since its launch % % /89 01/93 01/97 01/99 (1) 01/01 01/05 01/09 01/13 01/17 09/17 Carmignac Sécurité A EUR acc Euro MTS 1-3 years Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). (1) Date of creation of the Euro and the Euro MTS 1-3 years index. * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. Management report FIXED INCOME MANAGEMENT / 59

60 FIXED INCOME MANAGEMENT tranches. This remains a broken asset class, where regulatory constraints and crisis scars allow us to benefit from very attractive spread levels considering the low rate of historical defaults. At 36% of the fund, the non-financial corporate credit portfolio is highly rated and short-maturity, designed to take minimal risk. Within this allocation, non-european corporate credit geographic risk is 16% and non-euro denominated corporate credit risk is about 1%, but the underlying currency risk remains fully hedged. Lastly, the overall duration will be managed tactically, with an opportunistic approach to curve positioning beyond our benchmark s 1-3 year maturity focus, but always within our -3 to +4 portfolio duration risk limitation. This flexible low duration strategy, instead of short-maturity, will help to support directional, carry, and roll-down driven performance in this difficult negative front-end yield environment. The degree of monetary policy normalization priced into the markets, both in terms of balance sheet growth and the timing and pace of rate hikes, appears too dovish. With a durable and broadbased growth cycle, medium-term inflation expectations rising modestly, and political momentum pointing to greater, not less, Eurozone integration, we have maintained our core European duration shorts. We ended the quarter with a modified duration at -63bp and cash and equivalents around 9%. Sector breakdown (derivatives excluded) (%) Bond portfolio (derivatives excluded) - Rating breakdown (%) Financials 35.8 AAA 6.9 Consumer Discretionary 20.1 AA 10.3 Industrials 11.7 A 38.4 Healthcare 7.9 BBB 8, Consumer Staples 7.9 BB 2.3 Telecommunication Services 5.4 B 2.6 Materials 3,.7 Energy 3.5 Real Estate 2.4 Information Technology 1.1 Utilities 0.6 Statistics (%) 1 year 3 years Bond portfolio (derivatives excluded) - Maturity breakdown (%) Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). < 1 year 1-3 years 3-5 years 5-7 years 7-10 years 11, > 10 years 3.6 Cumulative performance (%) Since 30/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Securité A EUR acc Euro MTS 1-3 Y (Accrued interest) Category average* Ranking (quartile) * EUR Diversified Bond - Short Term. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 60 / Management report CARMIGNAC THIRD QUARTER 2017

61 Quarterly gross performance contribution (%) Bond Portfolio Bond Derivatives Currency Derivatives Total HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Modified duration of the bond portfolio (derivatives included) Euro United-States 0.24 Other 0.08 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) GREECE 02/02/2018 Treasury bill in Euro GREECE 05/01/2018 Treasury bill in Euro GREECE 08/12/2017 Treasury bill in Euro GREECE 15/12/2017 Treasury bill in Euro PORTUGAL 16/03/2018 Treasury bill in Euro PORTUGAL 17/11/2017 Treasury bill in Euro PORTUGAL 19/01/2018 Treasury bill in Euro PORTUGAL 20/07/2018 Treasury bill in Euro VOLKSWAGEN 03/11/2017 Commercial paper in Euro METRO AG 19/12/2017 Commercial paper in Euro Fixed income investments Developed countries fixed rate Government bonds GREECE 4.38% 01/08/2022 (Greece) Euro GREECE 4.75% 17/04/2019 (Greece) Euro IRELAND 0.80% 15/03/2022 (Ireland) Euro ITALY 0.65% 15/10/2023 (Italy) Euro ITALY 1.20% 01/04/2022 (Italy) Euro ITALY 1.25% 01/12/2026 (Italy) Euro ITALY 1.50% 01/06/2025 (Italy) Euro ITALY 1.60% 01/06/2026 (Italy) Euro ITALY 1.85% 15/05/2024 (Italy) Euro ITALY 2.00% 01/12/2025 (Italy) Euro ITALY 2.20% 01/06/2027 (Italy) Euro ITALY 2.70% 01/03/2047 (Italy) Euro ITALY 3.75% 01/03/2021 (Italy) Euro ITALY 3.75% 01/09/2024 (Italy) Euro SPAIN 0.25% 31/01/2019 (Spain) Euro SPAIN 0.40% 30/04/2022 (Spain) Euro SPAIN 0.75% 30/07/2021 (Spain) Euro SPAIN 1.15% 30/07/2020 (Spain) Euro SPAIN 1.30% 31/10/2026 (Spain) Euro SPAIN 2.90% 31/10/2046 (Spain) Euro SPAIN 4.50% 31/01/2018 (Spain) Euro SPAIN 5.90% 30/07/2026 (Spain) Euro UNITED STATES 2.25% 15/02/2027 (USA) Dollar Developed countries inflation-linked Government bonds ITALY I/L 0.45% 22/05/2023 (Italy) Euro Emerging markets fixed rate Government bonds ARGENTINA 2.26% 31/12/2038 (Argentina) Euro BAHRAIN 5.88% 26/01/2021 (Bahrain) Dollar BAHRAIN 6.75% 20/09/2029 (Bahrain) Dollar CZECH REPUBLIC 0.00% 17/07/2019 (Czech Republic) Czech Crown EGYPT 6.12% 31/01/2022 (Egypt) Dollar KUWAIT 2.75% 20/03/2022 (Kuwait) Dollar MEXICO 7.75% 13/11/2042 (Mexico) Mexican peso SOUTH KOREA 0.50% 30/05/2022 (South Korea) Euro SOUTH KOREA 2.00% 30/04/2020 (South Korea) Euro TURKEY 3.25% 14/06/2025 (Turkey) Euro TURKEY 4.35% 12/11/2021 (Turkey) Euro TURKEY 5.12% 18/05/2020 (Turkey) Euro Developed countries fixed rate corporate bonds EUROPEAN FINANCIAL STABILITY FUND 0.50% 20/01/2023 (Luxembourg) Financials M CO 1.88% 15/11/2021 (USA) Industrials FIXED INCOME MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 61

62 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Price in currencies Total value ( ) % of net assets AIR LIQUIDE 0.12% C 13/05/2020 (France) Materials AIR LIQUIDE SA 2.91% 12/10/2018 (France) Materials AIRBUS GROUP 5.50% 25/09/2018 (France) Industrials AKELIUS RESIDENTIAL PROPERTY 1.50% 23/01/2022 Real Estate AKZO NOBEL NV 4.00% 17/12/2018 (Netherlands) Materials ALLERGAN FUND 0.50% C 01/05/2021 (Ireland) Healthcare ALLIED IRISH 2.75% 16/04/2019 (Ireland) Financials ALTICE SA 6.62% C 15/02/2018 (Netherlands) Consumer Discretionary (Dollar) ALTICE SA 7.25% C 27/10/2017 (Netherlands) Consumer Discretionary AMERICAN HONDA FINANCE 1.88% 04/09/2019 (Japan) Consumer Discretionary AMGEN INC 2.12% 13/09/2019 (USA) Healthcare AMGEN INC 4.38% 05/12/2018 (USA) Healthcare ANADARKO PETROLEUM 8.70% 15/03/2019 (USA) Energy (Dollar) ANHEUSER-BUSCH INBEV 0.62% 17/03/2020 (Belgium) Consumer Staples ANHEUSER-BUSCH INBEV 1.88% 20/01/2020 (Belgium) Consumer Staples ANHEUSER-BUSCH INBEV 2.00% 16/12/2019 (Belgium) Consumer Staples ANHEUSER-BUSCH INBEV 4.00% 26/04/2018 (Belgium) Consumer Staples AP MOELLER-MAERSK A/S 4.38% 24/11/2017 (Denmark) Industrials ATENTO LUXCO 1 SA 6.12% C 10/08/2019 (USA) Industrials (Dollar) ATLANTIA SPA 3.62% 30/11/2018 (Italy) Industrials ATOS 2.38% C 02/04/2020 (France) Information Technology AUCHAN SA 2.88% 15/11/2017 (France) Consumer Staples AUCHAN SA 3.62% 19/10/2018 (France) Consumer Staples AUCHAN SA 6.00% 15/04/2019 (France) Consumer Staples AUTOROUTES DU SUD 4.00% 24/09/2018 (France) Industrials AUTOROUTES DU SUD 7.38% 20/03/2019 (France) Industrials AVIVA PLC 0.10% 13/12/2018 (United Kingdom) Financials BANK OF AMERICA 1.88% 10/01/2019 (USA) Financials BANK OF AMERICA 2.50% 27/07/2020 (USA) Financials BANK OF AMERICA 4.62% 14/09/2018 (USA) Financials (subordinated debt) BANKIA 3.50% 17/01/2019 (Spain) Financials BANQUE FED CRED MUTUEL 0.25% 14/06/2019 (France) Financials BANQUE FED CRED MUTUEL 0.38% 13/01/2022 (France) Financials BASF SE 1.38% C 22/10/2018 (Germany) Materials BASF SE 1.50% 01/10/2018 (Germany) Materials BAYER AG 1.12% C 24/10/2017 (Germany) Healthcare BBVA 2.38% 22/01/2019 (Spain) Financials BERKSHIRE HATHAWAY 0.25% C 17/12/2020 (USA) Financials BERKSHIRE HATHAWAY 0.50% C 13/02/2020 (USA) Financials BERKSHIRE HATHAWAY 0.62% C 17/11/2022 (USA) Financials BERTELSMANN SE & CO 0.25% C 26/04/2021 (Germany) Consumer Discretionary BG ENERGY CAPITAL 3.00% 16/11/2018 (Netherlands) Energy BG ENERGY CAPITAL 6.5% C 30/11/2017 (Netherlands) Energy (subordinated debt) BHP BILLITON FINANCE LTD 2.12% 29/11/2018 (Australia) Materials BMW 0.12% 12/01/2021 (Germany) Consumer Discretionary BMW 0.12% 15/04/2020 (Germany) Consumer Discretionary BMW 0.50% 05/09/2018 (Germany) Consumer Discretionary BMW 0.50% 21/01/2020 (Germany) Consumer Discretionary BMW 1.50% 05/06/2018 (Germany) Consumer Discretionary BMW 1.62% 17/07/2019 (Germany) Consumer Discretionary BMW 3.25% 14/01/2019 (Germany) Consumer Discretionary BOUYGUES 3.64% 29/10/2019 (France) Industrials BOUYGUES 4.00% 12/02/2018 (France) Industrials BP CAPITAL MARKETS PLC 2.99% 18/02/2019 (United Kingdom) Energy BRITISH TELECOMMUNICATIONS 1.12% 10/06/2019 (United Kingdom) Telecommunication Services BUREAU VERITAS 3.12% C 21/10/2020 (France) Industrials CAIXABANK 6.75% C 13/06/2024 (Spain) Financials (subordinated debt) CARLSBERG BREWERIES 2.62% 03/07/2019 (Denmark) Consumer Staples CARLSBERG BREWERIES 3.38% 13/10/2017 (Denmark) Consumer Staples CHANNEL LINK 1.76% C 30/06/2022 (United Kingdom) Information Technology CHANNEL LINK 2.71% C 30/06/2027 (United Kingdom) Information Technology CHRISTIAN DIOR 0.75% C 24/03/2021 (France) Consumer Discretionary CHRISTIAN DIOR 1.38% C 19/03/2019 (France) Consumer Discretionary / Management report CARMIGNAC THIRD QUARTER 2017

63 HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Price in currencies Total value ( ) % of net assets CIBA SPECIAL CHEMICALS 4.88% 20/06/2018 (Germany) Materials CITIGROUP INC 5.00% 02/08/2019 (USA) Financials CITIGROUP INC 7.38% 04/09/2019 (USA) Financials COCA-COLA 0.00% 09/03/2021 (USA) Consumer Staples COCA-COLA 2.00% C 05/09/2019 (USA) Consumer Staples COFIROUTE 5.25% 30/04/2018 (France) Industrials COMPAGNIE DE ST GOBAIN 0.00% 27/03/2020 (France) Industrials COMPAGNIE DE ST GOBAIN 4.00% 08/10/2018 (France) Industrials COMPAGNIE DE ST GOBAIN 4.50% 30/09/2019 (France) Industrials COMPASS GROUP 3.12% 13/02/2019 (United Kingdom) Consumer Discretionary CON'L RUBBER CRP AMERICA 0.50% 19/02/2019 (Germany) Consumer Discretionary CONTINENTAL AG 0.00% C 05/01/2020 (Germany) Consumer Discretionary CONTINENTAL AG 3.00% 16/07/2018 (Germany) Consumer Discretionary CPI PROPERTY 2.13% C 04/10/2024 (Germany) Real Estate CREDIT SUISSE 1.38% 29/11/2019 (Switzerland) Financials CRH FINANCE 5.00% 25/01/2019 (Ireland) Materials DAIMLER AG 0.25% 11/05/2020 (Germany) Consumer Discretionary DAIMLER AG 0.50% 09/09/2019 (Germany) Consumer Discretionary DAIMLER AG 0.62% 05/03/2020 (Germany) Consumer Discretionary DAIMLER AG 1.50% 19/11/2018 (Germany) Consumer Discretionary DAIMLER AG 2.12% 27/06/2018 (Germany) Consumer Discretionary DAIMLER AG 2.62% 02/04/2019 (Germany) Consumer Discretionary DAIMLER INTERNATIONAL 0.00% 15/03/2019 (Germany) Consumer Discretionary DANONE SA 0.17% C 03/10/2020 (France) Consumer Staples DANONE SA 1.25% 06/06/2018 (France) Consumer Staples DELHAIZE LION/DE LEEUW 4.25% 19/10/2018 (Netherlands) Consumer Staples DEUTSCHE POST AG 0.38% C 01/01/2021 (Germany) Industrials DEXIA CREDIT 0.04% 11/12/2019 (Belgium) Financials DH EUROPE FINANCE SA 1.00% C 08/04/2019 (USA) Healthcare DIAGEO FINANCE PLC 1.12% C 20/04/2019 (United Kingdom) Consumer Staples DOVER CORP. 2.12% 01/12/2020 (USA) Industrials EE FINANCE 3.25% 03/08/2018 (United Kingdom) Telecommunication Services ENGIE SA 6.88% 24/01/2019 (France) Utilities ENI SPA 4.75% 14/11/2017 (Italy) Energy EUROFINS SCIENTIFIC SE 2.12% C 25/04/2024 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 2.25% 27/01/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 3.12% 26/11/2018 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 3.38% C 30/10/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC SE 4.88% C 29/04/2023 (Luxembourg) Healthcare (subordinated debt) EUROFINS SCIENTIFIC SE 7.00% C 31/01/2020 (Luxembourg) Healthcare (subordinated debt) FCA BANK SPA IRELAND 1.25% 13/06/2018 (Italy) Financials FCA BANK SPA IRELAND 1.25% 21/01/2021 (Italy) Financials FCA BANK SPA IRELAND 1.25% 23/09/2020 (Italy) Financials FCA BANK SPA IRELAND 2.00% 23/10/2019 (Italy) Financials FCA BANK SPA IRELAND 2.62% 17/04/2019 (Italy) Financials FCA BANK SPA IRELAND 2.88% 26/01/2018 (Italy) Financials FCA BANK SPA IRELAND 4.00% 17/10/2018 (Italy) Financials FCE BANK PLC 0.87% 13/09/2021 (USA) Consumer Discretionary FCE BANK PLC 1.75% 21/05/2018 (USA) Consumer Discretionary FCE BANK PLC 1.88% 18/04/2019 (USA) Consumer Discretionary FCE BANK PLC 2.88% 03/10/2017 (USA) Consumer Discretionary FEDEX CORP 0.50% C 09/03/2020 (USA) Industrials FERROVIAL 3.38% 30/01/2018 (Spain) Industrials FIAT INDUSTRIAL 6.25% 09/03/2018 (United Kingdom) Industrials FONCIERE DES REGIONS 3.88% 16/01/2018 (France) Real Estate FONCIERE LYONNAISE 1.88% C 26/08/2021 (France) Real Estate FONCIERE LYONNAISE 2.25% C 16/08/2022 (France) Real Estate FONCIERE LYONNAISE 3.50% 28/11/2017 (France) Real Estate FORD MOTOR CREDIT 1.90% 12/08/2019 (USA) Consumer Discretionary (Dollar) GALERIES LAFAYETTE 4.75% 26/04/2019 (France) Consumer Discretionary GENERAL ELECTRIC CAPITAL 1.62% 15/03/2018 (USA) Industrials GENERAL ELECTRIC CAPITAL 2.25% 20/07/2020 (USA) Industrials GENERAL ELECTRIC CAPITAL 2.88% 18/06/2019 (USA) Industrials FIXED INCOME MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 63

64 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Price in currencies Total value ( ) % of net assets GENERAL ELECTRIC CAPITAL 5.38% 23/01/2020 (USA) Industrials GENERAL ELECTRIC CAPITAL 6.00% 15/01/2019 (USA) Industrials GENERAL MOTORS FINANCIAL 1.88% 15/10/2019 (USA) Consumer Discretionary GLAXOSMITHKLINE CAPITAL PLC 0.00% C 12/08/2020 (United Kingdom) Healthcare GLAXOSMITHKLINE CAPITAL PLC 0.62% 02/12/2019 (United Kingdom) Healthcare GLOBALWORTH REAL ESTATE 2.88% 20/06/2022 (Romania) Real Estate GOLDMAN SACHS GROUP INC 0.75% 10/05/2019 (USA) Financials GOLDMAN SACHS GROUP INC 2.62% 19/08/2020 (USA) Financials GOLDMAN SACHS GROUP INC 6.38% 02/05/2018 (USA) Financials HEIDELBERGCEMENT 5.62% 04/01/2018 (Germany) Materials HEIDELBERGCEMENT 8.50% 31/10/2019 (Germany) Materials HEIDELBERGCEMENT 9.50% 15/12/2018 (Germany) Materials HEINEKEN NV 2.50% 19/03/2019 (Netherlands) Consumer Staples HEMSO FASTIGHETS 1.00% C 09/06/2026 (Sweden) Real Estate HONEYWELL INTERNATIONAL INC 0.65% 21/02/2020 (USA) Industrials HSBC 1.88% 16/01/2020 (United Kingdom) Financials IBM CORP 1.38% 19/11/2019 (USA) Financials IBM CORP 1.88% 06/11/2020 (USA) Financials ING BANK NV 0.70% 16/04/2020 (Netherlands) Financials ING BANK NV 1.25% 13/12/2019 (Netherlands) Financials ING BANK NV 3.25% 03/04/2019 (Netherlands) Financials INTERXION 6.00% C 10/10/2017 (Netherlands) Information Technology INTESA SAN PAOLO 1.12% 14/01/2020 (Italy) Financials INTESA SAN PAOLO 3.00% 28/01/2019 (Italy) Financials INTESA SAN PAOLO 4.00% 09/11/2017 (Italy) Financials INTESA SAN PAOLO 4.38% 15/10/2019 (Italy) Financials INTESA SAN PAOLO 4.80% 05/10/2017 (Italy) Financials INTRUM JUSTIT 2.62% C 15/06/2018 (Sweden) Industrials INTRUM JUSTIT 2.75% C 15/07/2019 (Sweden) Industrials INTRUM JUSTIT 3.12% C 15/07/2020 (Sweden) Industrials IPSEN SA 1.88% C 16/03/2023 (Luxembourg) Healthcare JOHNSON & JOHNSON 0.25% C 20/12/2021 (USA) Healthcare JP MORGAN 1.88% 21/11/2019 (USA) Financials KBC BANK 8.00% C 25/01/2018 (Belgium) Financials (subordinated debt) LAFARGE SA 5.50% 16/12/2019 (Switzerland) Materials LINDE AG 1.75% 17/09/2020 (Germany) Materials LUXOTTICA GROUP 3.62% 19/03/2019 (Luxembourg) Consumer Discretionary LVMH 1.25% 04/11/2019 (France) Consumer Discretionary LVMH 1.75% 13/11/2020 (France) Consumer Discretionary LVMH 4.00% 06/04/2018 (France) Consumer Discretionary MEDIOBANCA SPA 0.75% 17/02/2020 (Italy) Financials MEDIOBANCA SPA 0.88% 14/11/2017 (Italy) Financials MEDIOBANCA SPA 4.00% 30/09/2018 (Italy) Financials MERCK FINANCIAL SERVICES 0.75% C 02/06/2019 (Germany) Healthcare MERCK FINANCIAL SERVICES 4.50% 24/03/2020 (Germany) Healthcare MORGAN STANLEY 2.25% 12/03/2018 (USA) Financials MORGAN STANLEY 5.00% 02/05/2019 (USA) Financials NATIONWIDE BUILDING SOCIETY 0.50% 29/10/2019 (United Kingdom) Financials NESTE OYJ 2.12% C 17/12/2021 (Finland) Energy NESTE OYJ 4.00% 18/09/2019 (Finland) Energy NETFLIX INC 3.62% 15/05/2027 (USA) Consumer Discretionary NN GROUP NV 0.25% C 01/03/2020 (Netherlands) Financials NOMURA EUROPE 1.88% 29/05/2018 (Japan) Financials NUMERICABLE 5.38% C 27/10/2017 (France) Consumer Discretionary NUMERICABLE 5.62% C 15/05/2019 (France) Consumer Discretionary NYKRE 0.38% 16/06/2020 (Denmark) Financials NYKRE 0.75% 14/07/2021 (Denmark) Financials NYKRE 0.88% 13/06/2019 (Denmark) Financials ORANGE 1.88% 02/10/2019 (France) Telecommunication Services ORANGE 1.88% 03/09/2018 (France) Telecommunication Services ORANGE 4.12% 23/01/2019 (France) Telecommunication Services ORANGE 5.62% 22/05/2018 (France) Telecommunication Services PACCAR FINANCIAL EUROPE 0.12% 19/05/2020 (USA) Industrials / Management report CARMIGNAC THIRD QUARTER 2017

65 HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Price in currencies Total value ( ) % of net assets PACCAR FINANCIAL EUROPE 0.12% 24/05/2019 (USA) Industrials PFIZER INC 0.00% C 06/02/2020 (USA) Healthcare PPG INDUSTRIES INC 0.00% C 03/10/2019 (USA) Materials PPR 1.88% 08/10/2018 (France) Consumer Discretionary PPR 2.50% 15/07/2020 (France) Consumer Discretionary PPR 3.12% 23/04/2019 (France) Consumer Discretionary RENAULT 0.38% 10/07/2019 (France) Consumer Discretionary RENAULT 0.75% C 12/10/2021 (France) Consumer Discretionary RENAULT 2.88% 22/01/2018 (France) Consumer Discretionary ROYAL BANK OF SCOTLAND 5.38% 30/09/2019 (United Kingdom) Financials ROYAL BANK OF SCOTLAND 6.93% 09/04/2018 (United Kingdom) Financials (subordinated debt) SAMPO OYJ 1.12% 24/05/2019 (Finland) Financials SANOFI 0.00% 05/04/2019 (France) Healthcare SANOFI 4.12% 11/10/2019 (France) Healthcare SANTANDER 4.12% 04/10/2017 (Spain) Financials SANTANDER CONSUMER 0.38% 17/02/2020 (Spain) Financials SANTANDER CONSUMER 0.62% 20/04/2018 (Spain) Financials SANTANDER CONSUMER 0.90% 18/02/2020 (Spain) Financials SANTANDER CONSUMER 1.10% 30/07/2018 (Spain) Financials SATO OYJ 2.38% C 24/12/2020 (Sweden) Real Estate SCHNEIDER ELECTRIC SE 3.50% 22/01/2019 (France) Industrials SCHNEIDER ELECTRIC SE 3.62% 20/07/2020 (France) Industrials SCHNEIDER ELECTRIC SE 3.75% 12/07/2018 (France) Industrials SECURITAS AB 2.25% 14/03/2018 (Sweden) Industrials SKANDINAVISKA 1.88% 14/11/2019 (Sweden) Financials SKANDINAVISKA 2.00% 18/03/2019 (Sweden) Financials SOCIETE DES AUTOROUTES 2.25% 16/01/2020 (France) Industrials SOCIETE DES AUTOROUTES 4.88% 21/01/2019 (France) Industrials SOCIETE DES AUTOROUTES 5.12% 18/01/2018 (France) Industrials SOCIETE GENERALE 5.85% 26/03/2018 (France) Financials (subordinated debt) SPAREBANK 1 SR BANK 2.00% 14/05/2018 (Norway) Financials STATOIL ASA 2.00% 10/09/2020 (Norway) Energy SWISSCOM AG 2.00% 30/09/2020 (Switzerland) Telecommunication Services SYMRISE AG 1.75% 10/07/2019 (Germany) Materials TELEFONICA EMISIONES 2.74% 29/05/2019 (Spain) Telecommunication Services TELEFONICA EMISIONES 4.80% 21/02/2018 (Spain) Telecommunication Services TELENOR ASA 4.12% 26/03/2020 (Norway) Telecommunication Services TELSTRA CORP LTD 4.25% 23/03/2020 (Australia) Telecommunication Services TEVA PHARMACEUTICAL 1.25% C 31/12/2022 (Israel) Healthcare TOYOTA MOTOR 1.80% 23/07/2020 (Japan) Consumer Discretionary TRIONISTA 6.88% C 18/10/2017 (Luxembourg) Industrials UBS AG LONDON 0.50% 15/05/2018 (Switzerland) Financials UNICREDIT 2.42% C 03/05/2020 (Italy) Financials (subordinated debt) UNICREDIT 2.60% 28/12/2017 (Italy) Financials UNICREDIT 2.62% 30/01/2018 (Italy) Financials UNICREDIT 3.38% 11/01/2018 (Italy) Financials UNICREDIT 5.00% 21/05/2018 (Italy) Financials UNICREDIT 5.65% 24/07/2018 (Italy) Financials UNIPER SE 0.12% 08/12/2018 (Germany) Utilities VINCI SA 3.38% 30/03/2020 (France) Industrials VIVENDI 4.88% 02/12/2019 (France) Consumer Discretionary VODAFONE GROUP PLC 0.38% 22/11/2021 (United Kingdom) Telecommunication Services VODAFONE GROUP PLC 5.00% 04/06/2018 (United Kingdom) Telecommunication Services VOLKSWAGEN 0.75% 11/08/2020 (Germany) Consumer Discretionary VOLKSWAGEN 1.00% 04/10/2017 (Germany) Consumer Discretionary VOLKSWAGEN 1.50% 13/02/2019 (Germany) Consumer Discretionary VOLKSWAGEN 2.00% 14/01/2020 (Germany) Consumer Discretionary VOLKSWAGEN 3.25% 10/05/2018 (Germany) Consumer Discretionary VOLKSWAGEN 3.25% 21/01/2019 (Germany) Consumer Discretionary VOLKSWAGEN 5.38% 22/05/2018 (Germany) Consumer Discretionary WACHOVIA CORP 4.38% 27/11/2018 (USA) Financials (subordinated debt) WELLS FARGO & COMPANY 2.25% 03/09/2020 (USA) Financials WPP FINANCE 0.75% 18/11/2019 (United Kingdom) Consumer Discretionary FIXED INCOME MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 65

66 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Price in currencies Total value ( ) % of net assets Developed countries floating rate corporate bonds ALLERGAN FUND TV 01/06/2019 (Ireland) Healthcare AT&T INC TV 04/06/2019 (USA) Telecommunication Services BANK OF AMERICA TV 26/07/2019 (USA) Financials BARCLAYS BANK PLC TV 11/09/2019 (United Kingdom) Financials BARCLAYS BANK PLC TV 13/03/2019 (United Kingdom) Financials BMW TV 17/05/2019 (Germany) Consumer Discretionary BMW TV 22/11/2019 (Germany) Consumer Discretionary COCA-COLA TV 08/03/2019 (USA) Consumer Staples COCA-COLA TV 26/11/2017 (USA) Consumer Staples DANONE SA TV 03/11/2018 (France) Consumer Staples DANSKE BANK A/S TV 19/11/2018 (Denmark) Financials DEUTSCHE TELEKOM INTERNATIONAL TV 03/04/2020 (Germany) Telecommunication Services FCA BANK SPA IRELAND TV 17/10/2017 (Italy) Financials GOLDMAN SACHS GROUP INC TV 29/04/2019 (USA) Financials GOLDMAN SACHS GROUP INC TV 31/12/2018 (USA) Financials JOHN DEERE CASH MANAGEMENT SA TV 15/09/2020 (USA) Industrials MCDONALD'S CO TV 05/04/2019 (USA) Consumer Discretionary MERCEDES-BENZ TV 22/06/2020 (Germany) Consumer Discretionary MOLSON COORS BREWING TV 15/03/2019 (USA) Consumer Staples PFIZER INC TV 06/03/2019 (USA) Healthcare RENAULT TV 27/11/2017 (France) Consumer Discretionary SAFRAN SA TV 28/06/2019 (France) Industrials SAFRAN SA TV 28/06/2021 (France) Industrials SANTANDER CONSUMER TV 11/01/2019 (Spain) Financials SCANIA CV AB TV 20/04/2020 (Germany) Consumer Discretionary SCANIA CV AB TV 24/10/2018 (Germany) Consumer Discretionary THERMO FISHER SCIENTIFIC INC TV 24/07/2019 (USA) Healthcare TOTAL CAPITAL TV 19/03/2020 (France) Energy TOYOTA MOTOR TV 20/07/2018 (Japan) Consumer Discretionary UNICREDIT TV 19/12/2017 (Italy) Financials UNICREDIT TV 30/09/2017 (Italy) Financials UNICREDIT TV 31/10/2017 (Italy) Financials VOLKSWAGEN TV 16/07/2018 (Germany) Consumer Discretionary VOLKSWAGEN TV 30/03/2019 (Germany) Consumer Discretionary VOLVO TV 03/04/2019 (Sweden) Industrials VOLVO TV 06/09/2019 (Sweden) Industrials VOLVO TV 13/02/2019 (Sweden) Industrials WELLS FARGO & COMPANY TV 02/06/2020 (USA) Financials Emerging markets fixed rate corporate bonds BHARTI AIRTEL INTERNATIONAL 4.00% 10/12/2018 (India) Telecommunication Services MOL HUNGARIAN OIL AND GAS 2.62% 28/04/2023 (Hungary) Energy SIGMA ALIMENTOS SA 2.62% 07/02/2024 (Mexico) Consumer Staples SINOPEC GRP 0.50% 27/04/2018 (China) Energy TEVA PHARMACEUTICAL 0.38% 25/07/2020 (Israel) Healthcare TEVA PHARMACEUTICALS 1.70% 19/07/2019 (Israel) Healthcare (Dollar) YPF SA 3.75% 30/09/2019 (Argentina) Energy (Dollar) YPF SA 8.50% 23/03/2021 (Argentina) Energy (Dollar) Asset Backed Securities APOLLO MANAGEMENT, ALME LOAN FUNDING V (Europe) CLO (AAA tranche) OAKTREE CAPITAL, ARBOUR CLO III (Europe) CLO (A tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XIV (Europe) CLO (AAA tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XV (Europe) CLO (A tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XVI (Europe) CLO (AAA tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XVI (Europe) CLO (AA tranche) KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XVI (Europe) CLO (A tranche) BARINGS, BABSON EURO CLO (Europe) CLO (A tranche) BLACKROCK, BLACKROCK EUROPEAN CLO II (Europe) CLO (AA tranche) COMMERZBANK, BOSPHORUS CLO III (Europe) CLO (AAA tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (AAA tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (AAA tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (BB tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (AAA tranche) / Management report CARMIGNAC THIRD QUARTER 2017

67 HOLDINGS CARMIGNAC SÉCURITÉ AT 30/09/2017 Price in currencies Total value ( ) % of net assets CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (BBB tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (AA tranche) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (BB tranche) CVC CREDIT PARTNERS, CVC CORDATUS VII (Europe) CLO (AAA tranche) CVC CREDIT PARTNERS, CVC CORDATUS VII (Europe) CLO (AA tranche) CVC CREDIT PARTNERS, CVC CORDATUS VII (Europe) CLO (A tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (AAA tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (AA tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (A tranche) PRAMERICA, DRYDEN 39 EURO CLO (Europe) CLO (AAA tranche) PRAMERICA, DRYDEN 39 EURO CLO (Europe) CLO (AA tranche) PRAMERICA, DRYDEN 39 EURO CLO (Europe) CLO (AA tranche) PRAMERICA, DRYDEN 39 EURO CLO (Europe) CLO (A tranche) PRAMERICA, DRYDEN 44 EURO CLO (Europe) CLO (AAA tranche) PRAMERICA, DRYDEN 44 EURO CLO (Europe) CLO (AA tranche) PRAMERICA, DRYDEN 44 EURO CLO (Europe) CLO (A tranche) PRAMERICA, DRYDEN 46 EURO CLO (Europe) CLO (AA tranche) BARINGS, DUCHESS VI CLO (Europe) CLO (AAA tranche) PINEBRIDGE INVESTMENTS, EURO GALAXY V (Europe) CLO (AAA tranche) GLG PARTNERS, GLG EURO CLO I (Europe) CLO (AAA tranche) GLG PARTNERS, GLG EURO CLO II (Europe) CLO (AA tranche) BLACKSTONE/GSO, GRIFFITH PARK (Europe) CLO (AA tranche) BLACKSTONE/GSO, GRIFFITH PARK (Europe) CLO (A tranche) BLACKSTONE/GSO, GRIFFITH PARK (Europe) CLO (BBB tranche) INVESTCORP, HARVEST CLO XV (Europe) CLO (AA tranche) INVESTCORP, HARVEST CLO XV (Europe) CLO (A tranche) INVESTCORP, HARVEST CLO XV (Europe) CLO (BBB tranche) INVESTCORP, HARVEST CLO XVI (Europe) CLO (AA tranche) INVESTCORP, HARVEST CLO XVI (Europe) CLO (A tranche) INVESTCORP, HARVEST CLO XVI (Europe) CLO (BBB tranche) INVESTCORP, HARVEST CLO XVI (Europe) CLO (BB tranche) ALCENTRA, JUBILEE CLO 2015-XV (Europe) CLO (AAA tranche) ALCENTRA, JUBILEE CLO 2015-XV (Europe) CLO (AAA tranche) ALCENTRA, JUBILEE CLO 2015-XV (Europe) CLO (AA tranche) ALCENTRA, JUBILEE CLO 2015-XVI (Europe) CLO (AAA tranche) BARINGS, MALIN CLO (Europe) CLO (AAA tranche) BARINGS, MALIN CLO (Europe) CLO (AAA tranche) INVESTCORP, MSIM CONISTON (Europe) CLO (AAA tranche) OAK HILL ADVISORS, OAK HILL ECP IV (Europe) CLO (A tranche) BLACKSTONE/GSO, ORWELL PARK PARK (Europe) CLO (AAA tranche) BLACKSTONE/GSO, ORWELL PARK PARK (Europe) CLO (AA tranche) PARTNERS GROUP, PENTA CLO 2 (Europe) CLO (AAA tranche) PARTNERS GROUP, PENTA CLO 3 (Europe) CLO (AAA tranche) PARTNERS GROUP, PENTA CLO 3 (Europe) CLO (AA tranche) PARTNERS GROUP, PENTA CLO 3 (Europe) CLO (A tranche) ICG, ST PAUL'S VI (Europe) CLO (AAA tranche) ICG, ST PAUL'S VI (Europe) CLO (A tranche) CHENAVARI, TORO EUROPEAN CLO 2 (Europe) CLO (AAA tranche) CHENAVARI, TORO EUROPEAN CLO 2 (Europe) CLO (BBB tranche) TIKEHAU CAPITAL, TIKEHAU CLO (Europe) CLO (AAA tranche) TIKEHAU CAPITAL, TIKEHAU CLO II (Europe) CLO (AAA tranche) TIKEHAU CAPITAL, TIKEHAU CLO II (Europe) CLO (BB tranche) TIKEHAU CAPITAL, TIKEHAU CLO (Europe) CLO (AAA tranche) TIKEHAU CAPITAL, TIKEHAU CLO (Europe) CLO (AA tranche) TIKEHAU CAPITAL, TIKEHAU CLO (Europe) CLO (A tranche) BLACKSTONE/GSO, TYMON PARK (Europe) CLO (AAA tranche) Portfolio value Net assets FIXED INCOME MANAGEMENT CARMIGNAC THIRD QUARTER 2017 / 67

68 Carlos Galvis Julien Chéron Multi-asset and multi-strategy fund. Its investment philosophy focuses on optimizing performance while maintaining ex-ante volatility below 2.5% on an annual basis, in all market conditions. In the third quarter, Carmignac Portfolio Capital Plus increased by +0.08%, while its benchmark was down -0.09%, bringing the Fund s performance since the start of the year to +1.35%, while the EONIA (compounded) decreased by -0.27%. Our strategy was characterized over the period by our long positions in the euro and on European equity, our diversified credit book especially with strong convictions on subordinated financial debt and CLOs and a neutral duration exposure. Our strategy during the quarter rested on three pillars. First, a strongly expanding global economy combined with low inflation. Secondly, still accommodative monetary policies which have supported risk assets. Third, positive correlation between bonds and equities, combined with low systematic risk. With this background, the portfolio benefited from directional strategies, while relative value strategies made a negative contribution to performance. Directional strategy Based on our constructive scenario for the global economy, we focused the portfolio construction on long exposure to global equity and credit markets and a tactical stance on duration and currency risk. In the face of abundant liquidity in financial markets, our credit book continued to do well, with all themes subordinated bank debt, CLO tranches and specific opportunities raising performance. In a low rate, low-inflation environment, the opportunistic search for carry should be at the core of our strategy. The contribution of the credit strategy was +0.30%. Furthermore, the directional risk in our equity strategy made a +0.13% to the performance. Our strong conviction on global equities favouring Europe on the basis of high liquidity and strong economic data played well over the quarter. Our strategy going forward will be to remain long equities and to focus on Europe and Japan to take advantage of the most cyclically sensitive regions for global equities. We expect stocks in those two markets to outperform emerging Performance of the fund since its launch % /07 12/08 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 09/17 Carmignac Portfolio Capital Plus A EUR acc Eonia compounded 17% Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). markets and the US, given that both are still substantially under invested despite significant improvement in valuations and economic fundamentals. The ample liquidity in financial markets, together with limited realised inflation but strong growth, called for maintaining a neutral with tactical short duration bias in our fixed income portfolio. Over the quarter, volatility in bond markets increased as both economic and geopolitical factors worked against global fixed income portfolios. As a result, our strategy of going long the US 30-year bond and taking a short duration position in German Bund proved detrimental to the Fund s performance. The contribution of our duration strategy made a negative -0.09% contribution over the quarter. Going into year end, we expect the Federal Reserve to hike rates in December, while the ECB should stick to a cautious, but might signal moderate tapering starting in We are therefore maintaining our neutral duration exposure but keeping a short bias through German Bund in the portfolio. Our currency strategy made a negative contribution of -0.07% over the third quarter, with a weak dollar running counter to our positioning as expectations for rate hikes in the United States were ratcheted down. At a same time, better sentiment towards Europe, supported by vigorous economic momentum, helped keep the euro strong against most currencies. Going forward, the direction of the US dollar will depend on both further consolidation of the Fed s raising strategy and the outlook for US tax reform. On the other hand, confirmation of further momentum in the euro area economy with some asset purchase program tapering by the ECB, could keep the euro at current levels. We therefore expect the euro to remain trendless up to the end of the year. Relative value strategy To balance directional risk, we added relative value trades to the portfolio to diversify away from our central scenario of high growth with low inflation. The focus of this type of strategy is to benefit from market noise and spikes in volatility, with positioning and technicals in the different markets taken into account. However, our relative value strategies caused a -0.19% loss to the Fund s performance during the period. Our equity relative value strategy focused on leveraging the recovery momentum in Europe by going long a basket of cyclical stocks and short a basket of defensive sectors in Europe. On the other hand, to diversify away from our short duration bias, we initiated a long position on US technology stocks (highly correlated with bond markets) against the S&P 500. The overall contribution of that approach was +0.18%. Our currency relative value strategy diminished performance by -0.18%. With the market shorting the dollar and pricing the Federal Reserve well below the dots path, we wanted to play contrarian on the basis of technical and market expectations. However, as inflation readings continued to run well below target, expectations for a cautious Fed remained over most of the quarter and kept the dollar low. * Risk scale from 1 (lowest risk) to 7 (highest risk); risk 1 doesn t mean an investment without risk. The risk category associated with this fund is not guaranteed and may change with time. 68 / Management report FIXED INCOME MANAGEMENT