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

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1 MANAGEMENT REPORT FOURTH QUARTER 2016

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3 THE LETTER Paris, 12 January 2017 Dear Investor, Donald Trump will be sworn in as US President right about when the Chinese New Year begins a disturbing coincidence when you consider that this will be the Year of the Rooster. Most investors are already concerned that with his inappropriate outbursts, the aggressively cocky, richly-feathered blond bird soon to strut into the Oval Office will trigger a surge in market volatility. But who can be sure that he will? The fact is that Trump has confounded expectations once again, putting together a Cabinet made up primarily of able, no-nonsense business people with proven track records. Will he listen to them, and will they succeed in convincing him to tone down the more disruptive points of his electoral platform above all his call for starkly protectionist policies? That seems likely to us. Punitive US tariffs would truly be bad news for both GDP growth and inflation. In contrast, Trump s commitment to large-scale fiscal stimulus should increase investor confidence in the resilience of the global economic recovery under way. Granted, both stocks and bonds already trade at rather lofty valuations. But with strong global economic growth coming on top of continued monetary policy accommodation in Europe and Japan, equity markets look set to scale new heights. So given all that, what s our strategy? As I wrote in my previous Letter, the unfolding scenario of less erratic growth, coupled with a moderate pick-up in inflation, is likely to put commodities first and foremost oil, particularly since the recent agreement among OPEC members at an advantage over stocks with good visibility. Chief among the latter are the stocks of drug companies, which will remain a favourite target for populist governments. Our portfolios also include substantial holdings of Japanese financial stocks. They have shed a great deal of their market value even as their issuers are getting a boost from the global upswing and a weaker yen. At the same time, the political and global economic shifts we discussed above haven t caused us to lose faith in our tech names, whose bright prospects become brighter every day. Our firm had to contend with a long string of surprises in 2016 that were virtually impossible to anticipate and tough to manage but as you know, managing the risks that come with our convictions is what we are all about. In the Year of the Rooster, a more predictable environment should make the job easier for us. In the hope that it will, I wish you a happy and peaceful new year. 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 23 Carmignac Euro-Entrepreneurs 37 Carmignac Patrimoine 45 Carmignac Portfolio Emerging Patrimoine 49 Carmignac Euro-Patrimoine 55 Carmignac Profil Réactif 100 Carmignac Profil Réactif 75 Carmignac Profil Réactif Carmignac Portfolio Global Bond 61 Carmignac Portfolio Capital Cube 64 Carmignac Sécurité 27 Carmignac Emergents 53 Carmignac Investissement Latitude 70 Carmignac Portfolio Capital Plus 30 Carmignac Portfolio Emerging Discovery 75 Carmignac Court Terme 33 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 in 2016: uro Fund Award Allemagne February 2016 Carmignac Patrimoine Best Balanced Fund - 20 years Carmignac Investissement Best Balanced Fund - 20 years Carmignac Sécurité Best Euro denominated short-term bonds Fund - 10 years Carmignac Emergents 2 nd Emerging Market Equity Fund - 1 year Fund Buyer Focus Europe March 2016 France s favourite asset manager L Agefi France June 2016 Carmignac Sécurité Actif d Or de la Distribution Bonds Specialists Appointments and new hires during the quarter Christophe Peronin was appointed Deputy Managing Director to assist Eric Helderé, the Managing Director. He will continue being responsible, for heading up operations and overseeing risk management, a department that reports directly to him. Christophe s new role also includes helping Eric run the Strategic Development Committee and implement its policies. With Christophe s new appointment, we will now be better able to capitalise on his extensive asset management experience and strengthen our business processes and strategic orientation as a risk manager. David Older has been named Head of Equity. A senior equity manager at Carmignac since 2015, David is in charge of evaluating and optimising portfolio performance, with a focus on alpha generation. He will be extending his range of expertise to cover the entire non-commodity US equity portfolio. David s thorough knowledge of US tech, media and telecom stocks and his vast experience with alpha generation and long/short (2) investing have already enriched Carmignac s asset management work. Our Equity team has also stepped up its capabilities with the addition of two new sector analysts: Nan Ou in Global Consumer, and Pau Guzman in Tech, Media and Telecoms. Nan has worked as an analyst at Goldman Sachs & Co. He holds a degree from Georgetown University. Pau, a graduate of ESADE Business School in Barcelona, was formerly an Investment Banking Analyst at Morgan Stanley. Read about all of our awards (1) on Gergely Majoros, a CFA, has joined the Portfolio Advisors team. He will report to Didier Saint-Georges as a member of the Investment Committee. After graduating from the University of Frankfurt, he worked in Germany, most notably as a sellside European equity analyst at ING, and subsequently as an emerging-markets equity fund manager for Deka Investments and Cominvest. 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: (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) Long/short investing involves buying stocks expected to increase in value and short-selling stocks expected to decrease in value. CARMIGNAC QUATRIÈME TRIMESTRE 2016 / 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 56 billion of assets under management EUR 2 billion of equity capital 280 employees Source: Carmignac, 30/12/ / Management report CARMIGNAC FOURTH QUARTER 2016

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, 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 FOURTH QUARTER 2016 / 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 FOURTH QUARTER 2016

9 INTERNATIONAL FUND MANAGEMENT Expertise in all asset classes EDOUARD CARMIGNAC, CIO EQUITIES FIXED INCOME CROSS ASSET/MULTI-STRATEGY PORTFOLIO ADVISORS David Older, Team Leader, 18 years experience Technology, Media & Telecommunications Huseyin Yasar, Fund Manager, 8 years experience Henrik Fridlund, Analyst, 4 years experience Pau Guzman Alcon, Analyst, 2 years experience European Equities Mark Denham, Team Leader, 22 years experience Malte Heininger, Fund Manager, 10 years experience Vincent Steenman, Fund Manager, 12 years experience Emerging Equities Xavier Hovasse, Team Leader, 17 years experience David Young Park, Fund Manager, 12 years experience Haiyan Li-Labbé, Fund Manager, 15 years experience Michel Wiskirski, Analyst, 8 years experience Commodities Michael Hulme, Team Leader, 19 years experience Simon Lovat, Analyst, 16 years experience Sector Analysts Antoine Colonna, Global Consumer, 24 years experience Nan Ou, Global Consumer, 3 years experience Matthew Williams, Finance, 22 years experience Tim Jaksland, Innovation, 25 years experience Vincent Steenman, Industry, 12 years experience Rose Ouahba, Team Leader, 21 years experience Charles Zerah, Fund Manager, 21 years experience Carlos Galvis, Fund Manager, 18 years experience Keith Ney, Fund Manager, 17 years experience Joseph Mouawad, Emerging Markets Analyst, 11 years experience Mattia Parolari, Quantitative Analyst, 10 years experience Nader Awada, Multi-Strategy Analyst, 10 years experience Pierre Verlé, Head of Credit, 12 years experience Alexandre Deneuville, Credit Analyst, 9 years experience Florian Viros, Credit Analyst, 9 years experience Frédéric Leroux, Team Leader, 27 years experience Julien Chéron, Fund Manager, Quantitative Analyst, 16 years experience Laurent Chebanier, Country Risk Analyst, 18 years experience Obe Ejikeme, Quantitative Equity Analyst, 13 years experience Yassine Basraoui, Fund Manager, 9 years experience Pierre-Edouard Bonenfant, Fund Manager, 5 years experience Mathieu Decrop, Fund Manager, 6 years experience François Escoffier, Fund Manager, 19 years experience Cyrille Corso, Fund Manager, 16 years experience François Poydenot de Pontonx, Investment Solutions Manager, 16 years experience Didier Saint-Georges, Team Leader, 29 years experience Sandra Crowl, 25 years experience Jean Médecin, 22 years experience Gergerly Majoros, 14 years experience CARMIGNAC FOURTH QUARTER 2016 / 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 30/12/2016 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 6 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 30/12/2016 Fund manager(s) Risk scale (1) Recommended minimum investment horizon Legal structure Investment universe Reference indicator (2) Carmignac Profil Réactif Frédéric Leroux 5 5 Years French Fund of Funds Carmignac Profil Réactif Frédéric Leroux 4 5 Years French Fund of Funds Carmignac Profil Réactif Frédéric Leroux 4 3 Years French Fund of Funds International equities and bonds (between 0% and 100% of assets exposed in equity UCI) International equities and bonds (between 0% and 75% of assets exposed in equity UCI) International equities and bonds (between 0% and 50% of assets exposed in equity UCI) MSCI AC World NR (Eur) 75% MSCI ACW NR (Eur) + 25% Citigroup WGBI (Eur) (3) 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI (Eur) (3) 10 / Management report CARMIGNAC FOURTH QUARTER 2016

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 30/12/2016 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 and Julien Chéron 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 30/12/2016 Fund manager(s) Risk scale (1) Recommended minimum investment horizon Legal structure Investment universe Reference indicator (2) Carmignac Portfolio Global Bond Charles Zerah 4 2 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV International bonds JP Morgan GBI Global (EUR) (Accrued interest) Carmignac Portfolio Capital Cube Carlos Galvis 3 3 Years Sub-fund of Carmignac Portfolio, a Luxembourg SICAV Multi-strategy and multi-asset portfolio Eonia compounded 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 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 FOURTH QUARTER 2016 / 11

12 Alexandr Mitiuc - Fotolia.com MACROECONOMIC ANALYSIS AND INVESTMENT STRATEGY A crucial development from the standpoint of our investment strategy is that fiscal policies are becoming more expansive at the same time that inflation is staging a moderate comeback. This cyclical shift marks the end of a lengthy period during which central banks had the ability to turn any macroeconomic bad news into good news for financial markets. Economic analysis In our two preceding reports, we predicted a regime change in terms of economic and financial policy with greater emphasis on fiscal stimulus, after a decade of unprecedented central-bank interventionism. We anticipated such a shift for political rather than economic reasons, given that popular pressure in favour of a new policy approach was palpable, and still is. In light of Brexit, support for Donald Trump, no campaigners lead in opinion polls for Italy s constitutional referendum, and the increasing popularity of extremist votes in Europe, a return of these expansionist fiscal policies seems likely, we wrote. In the intervening time, Donald Trump has ridden to power on a platform and political narrative calling for higher fiscal spending to boost domestic growth. The Italians, meanwhile, have voted down a proposal to modernise their political institutions that might have helped the country s economy operate more efficiently, but through the kind of belt-tightening likely to depress the business cycle. Election after election reveals mounting dissatisfaction with an economic and political system that has left the middle class increasingly vulnerable, just when inflation is picking up in the United States (+2.1%) and even in Germany (+1.6%). The stage is therefore set for a cyclical upturn. Moreover, in this expansionary phase, growth will be less hampered by a massive global debt overhang and, as deflationary pressures subside, central banks will feel less compelled to take action at the slightest sign of a faltering economy. This cyclical shift marks the end of a lengthy period during which central banks had the ability to turn any macroeconomic bad news into good news for financial markets. A crucial development from the standpoint of our investment strategy is that fiscal policies are becoming more expansive at the same time that inflation is staging a moderate comeback. Rising bond yields something we correctly predicted coupled with a sector rotation into cyclical industries and markets a trend we should have done more to leverage in our equity portfolios and a stronger US dollar which we failed in part to cash in on just after the November elections all bear witness to the sea change taking place. The question at this stage is what investment opportunities and what financial-market risks that sea change will generate. United States Today as much as ever, the United States is the epicentre of the cyclical upswing. How should we interpret Trump s promises which may or may not be kept to use fiscal policy to spur economic growth at a time when a return of inflation looks probable? Infinitely more important than his pledge to spend heavily on infrastructure is his proposal to cut the corporate tax rate, possibly from 35% to 20%. Such a policy could lead to a cyclical turnaround 12 / Management report MACROECONOMIC ANALYSIS AND INVESTMENT STRATEGY

13 in profit margins, which have historically been a key determinant of the business cycle. Since the Lehman Brothers meltdown, corporate revenues have fallen faster than costs, with the result that profit margins have tended to shrink. That decline has been a major obstacle to capital expenditure in recent years even with rock-bottom lending rates. Companies with heftier margins will be more inclined to invest, and thus better able to respond to the uptick in consumer demand that Trump s victory at the polls has served to strengthen. The year-on-year growth rate in durable goods orders climbed from 0% to 1.8% in November, while the Consumer Expectations Index has hit a thirteen-year high. This renewed consumer confidence should be strong enough to offset slower growth in real disposable income, which at +2.3% year-on-year represents a thirty-three month low. But what these figures show above all is how high hopes in the US currently are. High hopes, however, have a way of being disappointed. If the new US President s economic programme fails to go through, or goes through too slowly, a rebound in capital expenditure will become a more iffy bet. And that would also be true if companies chose to use the prospective tax cuts to engage in financial engineering. But these possible let-downs are not our baseline scenario. We anticipate more vigorous growth accompanied by mounting inflationary pressure. Several points lead us to believe that inflation will rise faster than the consensus currently assumes. To start with, manufacturers of non-discretionary goods have got into the habit of raising their selling prices in order to offset the downward pressure on profit margins. The same goes for the owners of buy-to-let properties. To United States: the corporate tax cut promised by Trump could give an additional boost to an economy already on the mend 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% 03/07 03/08 03/09 03/10 After-tax profits, annual change 03/11 03/12 03/ Projection incorporating a tax-rate reduction from 35% to 20% 03/14 United States: rising consumer spending in the wake of Trump s victory could offset declining household income 03/ Consumer sentiment indices (University of Michigan)) Source : Carmignac, CEIC, 30/12/ /16 03/17 01/05 01/07 01/09 01/11 01/13 01/15 make up for low returns on their financial assets, they have hiked rents for the part of the population that can t afford home ownership. In addition, a steady appreciation in energy prices can soon be expected to lift overall inflation. Finally, after eight years of unprecedented wage moderation, an upward drift is now observable (particularly for managers), with hourly compensation increasing 2.9% over the past year. This shows that US inflation is by no means a temporary phenomenon caused by rising energy prices, but reflects prices across the underlying economy. And upward wage pressure is starting to feed into it. Even if the expected pick-up in economic growth doesn t materialise, we believe the inflationary momentum will be strong enough to deter the Federal 03/18 Current Economic Conditions Index Index of Consumer Sentiment Index of Consumer Expectations 8% 6% 4% 2% 0% -2% -4% -6% Real disposable income, annual change 01/11 01/12 01/13 01/14 01/15 01/16 Reserve from transitioning to a more accommodating monetary policy stance. What we are describing here is merely the standard workings of the business cycle, whose key drivers have clearly swung into action in the United States. Their upside potential is visible today, as is the basis for a subsequent trend reversal. Given the debt overhang left by a string of crises in preceding years, the Fed is initially likely to take a hands-off approach to inflation in order to facilitate deleveraging. This policy should result in real interest rates staying as low as possible and a steepening yield curve as the economy starts humming in earnest. Further on, after inflation picks up steam due to a lack of intervention during the expansionary phase, it will lead to higher longterm yields and cyclical contraction. In other words, the good old economy is back in town. Source : Carmignac, CEIC, 30/12/2016 CARMIGNAC FOURTH QUARTER 2016 / 13

14 Upturn in Europe as well 30% 20% 10% 0% -10% -20% -30% -40% 01/06 Germany: factory orders, annual change 01/08 01/10 01/12 Source : Carmignac, CEIC, 30/12/ /14 01/16 2,5% 1,0% -0,5% Europe Although the upturn in Europe is nowhere near as strong as in the United States, two recent developments suggest that GDP growth on the other side of the pond is still having a knock-on effect here. First, German factory orders have reached a thirty-month high, and they are being driven by exports. This means that growth abroad will spread to Europe via Germany. Second, the latest German inflation readings point to an unusually sharp rebound, with food, energy and rent prices as the biggest contributors. While prices in the rest of the eurozone have yet to pick up to the same extent, the experience of previous cycles leads us to view widespread spillover from Germany as a very likely scenario. As in the United States, a good many political platforms in Europe call for greater public spending. That has long been true in France, but the 01/08 same may now be said of Italy and Spain as well. This suggests that we may be seeing business cycle synchronisation between the US and Europe, with the usual delay. At a time of resurgent inflation, the ECB will be unable to go on expanding its balance sheet indefinitely through massive bond purchases. Emerging markets Though the emerging world seems to be sharply divided into commodity-exporting countries and the others, Donald Trump s victory at the polls and his protectionist agenda area causing fear in both groups. Mexico is a case in point: the peso has lost 18% of its value since the US elections in November. In contrast, Brazil, a country grappling with a highly unsettled domestic environment, has seen its currency bounce back to its pre-election level. The Germany: inflation (CPI), annual change 01/10 01/12 01/14 Russian rouble has likewise gained 6%. The equity markets in both countries have held up rather well, buoyed by stronger GDP growth. Brazil, for example, has gone from a 6% contraction in output to nearly flat growth in the space of a year. China is still the country with the greatest potential to derail the entire emerging world. Its huge stock of corporate debt has resulted in a systemically fragile economy that is nothing less than a time bomb. Just how worrying that bomb is can be gauged from the capital flight it triggers at increasingly regular intervals. Even so, the economy is recovering and the latest statistics, such as electric power production, are reassuring enough to keep China s systemic risk from materialising in the near term. Meanwhile, the newly-developed countries seem fairly well-equipped to deal with further dollar appreciation and rising US bond yields, thanks to a secular improvement in economic fundamentals first and foremost their declining dependence on foreign capital. 01/16 Source : Carmignac, CEIC, 30/12/2016 Japan Japan is sticking doggedly to its policy of keeping nominal ten-year government bond yields close to zero. The result has been to drive the yen way down (by -16% against the dollar) by encouraging Japanese savers to invest abroad. At the same time, economic activity has continued to recover. Manufacturing output growth surged from 0.2% to 2.9% in November, with all industries contributing to the increase. Japanese policy offers a welcome counterweight to monetary tightening in the US in that it helps reduce global upward pressure on bond yields. Japan: an economy buoyed by yen depreciation that aims to rekindle inflation 30% 20% 10% 0% -10% -20% -30% -40% 2002 Japan: industrial production, annual change Japanese currency 04/11 04/12 04/13 04/14 04/15 04/16 Yen depreciation 14 / Management report MACROECONOMIC ANALYSIS AND INVESTMENT STRATEGY

15 Niko - Fotolia.com portfolios also include substantial holdings of Japanese financial stocks. They have shed a great deal of their market value even as their issuers are getting a boost from the global upswing and a weaker yen. At the same time, the political and global economic shifts we discussed above haven t caused us to lose faith in our tech names, whose bright prospects become brighter every day. Investment strategy The general view among pundits is that the election of Donald Trump has created substantial economic and geopolitical uncertainty. Yet financial markets seem to disagree, judging from their highly positive reaction to the event. Developed-country equity markets are ahead by 8% on average, while ten-year sovereign bond yields have gained 65 basis points in the United States and 23 in Germany. The greenback has appreciated against all other currencies including by 11% against the yen and 6% against the euro. Visibly wagering that the policy mix shaping up in Washington will boost output at a time of renewed inflation, investors have accelerated the sector rotation into the sectors with the greatest sensitivity to changes in GDP growth and the least vulnerability to inflation. It s hard to say right now whether the new US President will end up dashing the market s high hopes, or whether his protectionist policies will turn out to be as drastic as critics fear. Granted, both stocks and bonds already trade at rather lofty valuations. But with strong global economic growth coming on top of continued monetary policy accommodation in Europe and Japan, equity markets look set to scale new heights. We have accordingly increased our exposure to equity markets to near-maximum level. Our basic strategy is as follows: The unfolding scenario of less erratic growth, coupled with a moderate pick-up in inflation, is likely to put commodities first and foremost oil, particularly since the recent agreement among OPEC members at an advantage over stocks with good visibility. Chief among the latter are the stocks of drug companies, which will remain a favourite target for populist governments. Our Fixed income markets show as much contrast as ever. A number of emerging-market local currency bonds offer extremely high yields exceeding 11% in the case of Brazil. Moreover, the hunt for yield can make this an attractive asset class, although careful risk analysis is imperative. As credit spreads narrow, corporate issues may well be buoyed by positive global growth forecasts, but in light of their broadly high valuations and discontinuous liquidity, we don t see a great deal of investment opportunity here at this stage. It should also be mentioned that the outlook for safe-haven government bond yields has yet to improve. While it s too soon to proclaim that the long-term slide in sovereign yields is over and done with, we do believe that they still have room to rise further in the near term. We d like to see ten-year government paper trade at 3% in the United States and 1% in Germany before we move away from our current negative modified duration. Although the Fed has been slow to normalise monetary policy, the change under way may prove to be surprisingly bold if our analysis of US inflation is correct. At the same time, the uptick in German inflation (currently +1.6%) can be viewed as a harbinger of things to come across Europe. In the foreign exchange market, the growth and inflation differentials between the United States and Europe, and the resulting monetary policy mismatch, have understandably created a broad consensus that the dollar will continue to strengthen. We are wary of this near-unanimous forecast, particularly because it has led many investors to take massive long positions in the US currency. We will therefore be keeping our exposure roughly in line with performance indices. As we argued in our previous report, the outlook for the yen is clearer, given the Bank of Japan s policy of deliberately forcing the Japanese currency down. We will seek to leverage any pronounced reversal of the weakening trend observed in the past few months by initiating a short position that is positively correlated with risk assets. The currencies of emerging-market commodity exporters will likely remain a major allocation in our portfolios, whereas we hold a large short position in the yuan versus the dollar. We consider this an effective way of hedging all our assets against the risk that the Chinese time bomb will go off. Source of data: Carmignac, CEIC, 30/12/2016 CARMIGNAC FOURTH QUARTER 2016 / 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 +1.64% in the fourth quarter, while its reference indicator was up +7.81%. This brings 2016 performance to +2.13%, lagging well behind its reference indicator+11.09%. As in the previous quarter, the portfolio s performance was penalised by our exposure to the healthcare and gold-mining sectors, whose losses cancelled out to a large extent the positive returns from our energy and tech stocks. We also deemed it prudent to reduce our exposure to the US dollar, as the consensus bet on a widening interest rate differential between the United States and other developed economies seems questionable to us. The main event marking the quarter was the surprise election of Mr. Trump as President of the United States. The prospect of a more business-friendly administration pushed the US equity market to an all-time high, and led to both substantial appreciation of the greenback and a swift, large-scale sector rotation as portfolios were repositioned. Setting aside worries about the potential harm that Trump s protectionist stance may do to global trade, investors have welcomed promises of corporate tax reform, a less stringent regulatory regime and fiscal stimulus through infrastructure spending in the US. We also believe that regardless of whoever ultimately wins the upcoming French and German elections, Europe is increasingly likely to embark on a path of fiscal expansionism as well. In combination with the mild cyclical global recovery further buoyed by an uptick in oil prices these developments are changing the dynamics of portfolio construction. We have accordingly stepped up our efforts to rebalance our portfolio towards more cyclical stocks, which should benefit from higher growth and inflation. We raised our exposure to commodities, industrials and financials to 44% of our equity exposure, with energy and materials making up almost 27% of the portfolio at year-end, up from their very low level at the start of We also continued to reduce our healthcare exposure due to concerns that Performance of the fund since its launch % /89 12/92 12/96 12/00 12/04 12/08 12/12 12/16 Carmignac Investissement A EUR acc MSCI AC World NR (Eur) 1 411% 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). drug companies will remain a favourite target for populist governments, and scaled back our allocation to specific Internet names, which in recent years were among the leading beneficiaries of a scarce global growth environment. In 2017, we expect a return to a more normalized economic cycle in which stock selection will be the primary driver of performance. This is in stark contrast to the situation of the past several years, when heavy central-bank intervention caused liquidity expectations to change constantly, making investment in index funds the key determinant of equity market trends. Our asset allocation at 31 December 2016 was as follows: Our allocation to the reflation theme rose from 25% to 44% of the Fund s assets. We initiated four positions in US airlines as they should benefit from the probable pick-up in the domestic economy, with load factors at historically high levels and good cost visibility. Financials rose to 10% of the portfolio, mainly via new positions in Japanese banks (Mitsubuishi UFJ, Sumitomo Mitsui Financial, Mizuho Financial Group and Nomura Holdings). Operating in the world s lowest interest rate environment, those banks are set to reap the benefits of the incipient global rise in interest rates, while the Yen s persistent weakness enhances their international activity. Yet it is worth noting that their shares trade on average at a 40% discount to their net assets. As one of the banks best-equipped to capitalise on higher inflation and interest rates in the United States, Bank of America deserved to be included in the portfolio. Alternatively, we added to our natural resources holdings (now 20% of the portfolio), sensing that it was the right time in the cycle to invest in oil services businesses Halliburton and Schlumberger as drilling gets under way again in the Permian. We also upped our exposure to businesses operating in this high-potential basin by boosting our allocation to Pioneer Natural Resources, Concho Resources and by adding EOG Resources to the portfolio. As we believe that Trump s election heralds a new era of energy infrastructure build-out in the US and Canada, we initiated a position in TransCanada Corp, which will benefit if the Keystone Pipeline restarts. However, we sold our holding in Occidental Petroleum because we found the company s strategic shift towards acquisitions unconvincing. We reduced our emerging market growth theme (from 17% to 14% of the portfolio) as we see potential headwinds from rising interest rates and a stronger US dollar. During the quarter we sold our positions in Mediatek and Unilever, due to their disappointing outlooks, and took profits on AIA Group due to the current uncertainty around the regulation of Chinese capital outflows. * 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 We more than halved our exposure to our longevity theme, exiting names like Novartis and ThermoFisher Scientific. Our position in Novo Nordisk saw significant weakness in 2016 and has been reduced to 1%. Though this has been a money-making name for the Fund over the years, we think that the short-term uncertainty surrounding its pricing ability outweighs its leadership in the promising diabetes care market. Within Technology and Communications, we took significant profits on Amazon, sold our position in Alphabet and exited Level 3 following its recent acquisition by CTL. These funds were reallocated in part to start a position in Samsung Electronics, the technology component and handset leader that could benefit from an ownership restructuring. Lastly, we invested in TripAdvisor, the travel review website that we feel is poised for a turnaround. Among this quarter s all-too-rare sources of satisfaction, we note: Stocks Performance Pão de Açúcar, retail, Brazil +64% LinkedIn*, internet, United States +63% Anadarko, oil, United States +48% Altice, telecommunications, France +42% *Holding fully liquidated at 31 December. EQUITY MANAGEMENT Geographic breakdown (derivatives excluded) (%) Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio North America Europe 8.0 Beta Alpha Asia 8.0 Calculation period: weekly (1 year) and monthly (3 years). 6.0 Asia-Pacific Latin America Quarterly gross performance contribution (%) 2.4 Cash, cash equivalents and derivatives operations Equity Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Net currency exposure of Euro share classes (%) Sector breakdown (derivatives excluded) (%) USD 1, Financials 19.3 EUR 28.1 Information Technology 17.5 GBP 0.2 Consumer Discretionary 17.0 CHF 1.7 Energy 14.8 AUD and CAD 2.8 Materials 11.9 Latin America 0.4 Healthcare 7.9 Emerging Asia Industrials 4.1 Other 1.0 Consumer Staples 3.4 Telecommunication Services 1.7 Cash, cash equivalents and derivatives operations 2.4 Cumulative performance (%) Since 31/12/ 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). CARMIGNAC FOURTH QUARTER 2016 / 17

18 EQUITY MANAGEMENT HOLDINGS CARMIGNAC INVESTISSEMENT AT 30/12/2016 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities Developed countries North America AMAZON.COM INC (USA) Consumer Discretionary AMERICAN AIRLINES GROUP (USA) Industrials ANADARKO PETROLEUM (USA) Energy BANK OF AMERICA (USA) Financials CELGENE CORP (USA) Healthcare CF INDUSTRIES HOLDINGS (USA) Materials CHARTER COMMUNICATIONS INC-A (USA) Consumer Discretionary CONCHO RESOURCES (USA) Energy DELTA AIR LINES (USA) Industrials EOG RESOURCES (USA) Energy FACEBOOK INC (USA) Information Technology FRANCO-NEVADA CORP (Canada) Materials GOLDCORP INC (Canada) Materials HALLIBURTON (USA) Energy HESS CORP (USA) Energy HUDBAY MINERALS INC (Canada) Materials INTERCEPT PHARMACEUTICALS INC (USA) Healthcare INTERCONTINENTAL EXCHANGE (USA) Financials MASTERCARD INC (USA) Information Technology MICROSOFT CORP (USA) Information Technology NEWMONT MINING (USA) Materials NIKE INC (USA) Consumer Discretionary NOBLE ENERGY INC (USA) Energy ORYX PETROLEUM (Canada) Energy PIONEER NAT. RESOURCES (USA) Energy POTASH CORP (Canada) Materials SCHLUMBERGER (USA) Energy SERVICENOW (USA) Information Technology SILVER WHEATON CORP (Canada) Materials SOUTHWEST AIRLINES CO (USA) Industrials T-MOBILE US INC (USA) Telecommunication Services TRANSCANADA CORP (Canada) Energy TRIPADVISOR INC (USA) Consumer Discretionary UNITED CONTINENTAL HLD (USA) Industrials VISA INC (USA) Information Technology Asia-Pacific DAI-ICHI LIFE INSURANCE (Japan) Financials MITSUBISHI UFJ FINANCIAL GROUP (Japan) Financials MIZUHO FINANCIAL GROUP INC (Japan) Financials NOMURA HOLDINGS (Japan) Financials SUMITOMO MITSUI FINANCIAL (Japan) Financials Europe ALTICE SA (Netherlands) Consumer Discretionary CRITEO (France) Information Technology DASSAULT AVIATION SA (France) Industrials HERMES INTERNATIONAL (France) Consumer Discretionary INDITEX (Spain) Consumer Discretionary LAFARGEHOLCIM LTD (Switzerland) Materials LONDON STOCK EXCHANGE (United Kingdom) Financials NOVO NORDISK AS (Denmark) Healthcare RECKITT BENCKISER (United Kingdom) Consumer Staples SFR GROUP SA (France) Consumer Discretionary SHIRE PLC (United Kingdom) Healthcare TALEND SA (France) Information Technology Equities Emerging markets Latin America BANCO SANTANDER MEXICO (Mexico) Financials CEMEX (Mexico) Materials GRUPO PAO DE ACUCAR (Brazil) Consumer Staples MERCADOLIBRE INC (Argentina) Information Technology Asia AIA GROUP LTD (Hong Kong) Financials GMR INFRASTRUCTURE LTD (India) Industrials HDFC 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 FOURTH QUARTER 2016

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 asymmetric risk/return profiles with a clear catalyst for entry and exit. The Fund aims to outperform its reference indicator over 5 years and to generate long-term capital growth. During the fourth quarter of 2016, Carmignac Portfolio Grande Europe increased by +3.90%, providing a lower return than the reference indicator which was up +5.76%. The full-year 2016 performance of the Fund was +5.11%, versus +1.73% for the indicator. Markets rose during the fourth quarter, reflecting positive investor sentiment towards the economy and corporate earnings. Economic data in Europe strengthened during the period with high and rising leading indicators of economic activity across the region. Germany s IFO survey and various Purchasing Managers Indices all registered expansionary readings, even in previously lagging economies such as France and Italy. Furthermore, financial markets had no trouble weathering potentially difficult events, including the unexpected election of Donald Trump as US president in November and a No vote in the Italian referendum on constitutional reform in December. It was almost as if, after successfully contending with the Brexit vote in the UK over the summer, investors felt they could take other events in their stride. Mr Trump s agenda in particular his call for more protectionism and fiscal stimulus at home led to higher growth and inflation expectations worldwide, rising bond yields and a stronger dollar relative to the euro. The stock market consequently enjoyed a decent rally in the quarter driven by cyclical sectors that stand to gain from those themes. Financials banks and insurance companies led the way because they are seen as beneficiaries of rising bond yields, followed by Oil & Gas, Automotive and Metals & Mining names. Given that stocks in these sectors do not generally exhibit the characteristics we look for when investing for the longer term, we have low exposure to them. That was the dominant reason why the fund lagged its reference indicator in the quarter. In addition, the growth names we own showed relative weakness. They were hurt by rising economic growth expectations because the market is now less willing to pay a premium for the secular delivery of growth by the likes of internet names Rightmove or Auto Trader; or for the stable growth of legal publisher Wolters Kluwer. Lastly, we were hurt by the final profit warning by drug company Novo Nordisk, operating in a sector where increased competition has reduced growth forecasts. It was not all bad news, however. Telecoms company Altice, in which we have a long-standing position, gained considerable ground on upgraded market forecasts for its US cable operations, as well as expected gradual improvements at its French operator SFR, an outcome fully in line with our thesis there. Even so, we will stick to our current investment approach, as described above, which we expect will deliver superior returns over the longer term. In fact, we have strengthened our positions with that conviction in mind. During the quarter, we made several changes to the Fund. We have been looking for names that meet our specific criteria mentioned above, but that also show a certain degree of sensitivity to an improving economic environment. Names added include WPP, the media advertising agency, which should generate double-digit profit growth from economic growth, higher margins achieved through cost control and digitisation, bolt-on acquisitions and share buybacks; and SPIE, a French technical services company with strong cash generation that can reinvest its cash in accretive acquisitions like the recent SAG deal in Germany and is well-positioned to cash in on France s improving economic outlook. Testing company Applus+ is another new name with a similar profile. 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 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 We have also used some of the weakness in stable growth sectors to increase existing holdings. We have added to Shire and Novo Nordisk in the Healthcare sector, where we feel valuations are too low in light of the quality of future growth. At the same time, we have bought new positions in Fresenius and Galenica, which offer significant upside. Source of data: Bloomberg, 30/12/2016 Some of the best performances in the year came from: Stocks Performance Smiths Group, industrial conglomerate, United Kingdom +51% Altice, telecommunications, Netherlands +42% Aena, airports management, Spain +23% Sunrise Communications, telecommunications, Switzerland +13% Criteo, digital advertising, France +4% Geographical Exposure (%) Positions Long Short Net United Kingdom Netherlands Germany France Switzerland Spain Ireland Denmark Belgium USA Finland Sweden Other countries Total Sector Exposure (%) Positions Long Short Net Cons. Services Financials Healthcare Cons. Goods Industrials Technology Oil & Gas Telecommunication Basic Materials Total 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 -0.2 Benchmark volatility EUR 58.2 Sharpe ratio GBP CHF Other 2.6 7, Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Cumulative performance (%) Since 31/12/ 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). 20 / Management report CARMIGNAC FOURTH QUARTER 2016

21 HOLDINGS CARMIGNAC PORTFOLIO GRANDE EUROPE AT 30/12/2016 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 BAYER AG Basic Materials DEUTSCHE POST Industrials FRESENIUS Healthcare HUGO BOSS AG Consumer Goods SAP AG Technology ZALANDO SE Consumer Services Belgium ONTEX GROUP NV Consumer Goods Denmark NOVO NORDISK AS Healthcare Spain AENA SA Industrials APPLUS SERVICES SA Industrials CELLNEX TELECOM SAU Technology TALGO SA Industrials Finland FERRATUM OYJ Financials France CRITEO Technology DASSAULT AVIATION SA Industrials SFR GROUP SA Consumer Services SPIE SA Industrials TELEPERFORMANCE Consumer Services VINCI SA Industrials VIVENDI Consumer Services Ireland RYANAIR HOLDINGS PLC Consumer Services SMURFIT KAPPA GROUP PLC Industrials Netherlands ALTICE SA Telecommunication ASR NEDERLAND Financials PHILIPS LIGHTING NV Industrials ROYAL DUTCH SHELL PLC Oil & Gas WOLTERS KLUWER Consumer Services United Kingdom AA PLC Consumer Services AUTO TRADER GROUP PLC Consumer Services CONVATEC GROUP PLC Healthcare INFORMA PLC Consumer Services JRP GROUP PLC Financials LONDON STOCK EXCHANGE Financials METRO BANK PLC Financials MICRO FOCUS INTER. Technology PRUDENTIAL PLC Financials RIGHTMOVE PLC Consumer Services SHIRE PLC Healthcare SMITHS GROUP PLC Industrials UNILEVER Consumer Goods WPP Consumer Services Equities ex European Union USA GRUBHUB INC Consumer Services Switzerland GALENICA AG Consumer Services NESTLE SA Consumer Goods SUNRISE COMMUNICATIONS Telecommunication Portfolio value Net assets EQUITY MANAGEMENT CARMIGNAC FOURTH QUARTER 2016 / 21

22 EQUITY MANAGEMENT NET EQUITY EXPOSURE CARMIGNAC PORTFOLIO GRANDE EUROPE AT 30/12/2016 Exposure ( ) % Exposure Long derivative positions European Union Financials (1 Position) Europe Short derivative positions European Union Consumer Services (1 Position) United Kingdom Industrials (1 Position) Sweden Equity Investment Net equity exposure / Management report CARMIGNAC FOURTH QUARTER 2016

23 Mark Denham Malte Heininger European small and mid-cap equity fund. Through a disciplined bottom-up analysis, the Fund manager aims to seize the best opportunities within this broad and under-researched universe. For this purpose, stock selection focuses on asymmetric risk/return profiles with a clear catalyst for entry and exit. The Fund aims to outperform its reference indicator over 5 years. During the fourth quarter of 2016, Carmignac Euro-Entrepreneurs increased by +2.73%, delivering a lower return than the reference indicator, which was +4.36%. The Fund s full-year 2016 performance is +2.36%, versus +0.52% for the indicator. The market rally that started in Q3 continued into the fourth quarter, as stocks reacted well to improving economic leading indicators worldwide. The market also had to contend with one-off events which could have been adverse for sentiment, such as the unexpected election of Donald Trump as US president in November and a No vote in Italy s constitutional reform referendum in December. As it turns out, these did not slow the momentum and Mr Trump s apparent agenda protectionism combined with fiscal stimulus at home sparked rising growth and inflation expectations, rising bond yields and a stronger dollar relative to the euro. Consequently, the quarter saw a wider market rally led by oil and gas names, along with a broad range of cyclical stocks including those in the hitherto poorly performing bank and insurance sectors, where we have low exposure. Although we made very few changes to the portfolio over the quarter, our holdings were affected by a large number of noteworthy events and consequently turned in a mixed performance. ASR Nederland reported its maiden set of quarterly results since listing in June, which were encouraging. The company s performance underlined the key attributes of our investment case, with a Solvency 2 ratio of 188%, versus a target of 160%, and a 94% combined ratio of non-life insurance claims and costs to premiums, which is below that of most European insurers. Moreover, with a 5.5% dividend yield, the stock trades at an unwarranted discount to the sector given its quality. We therefore expect this to be corrected through strong performance in the coming quarters. Parques Reunidos experienced a strong recovery towards the end of the quarter. In October, the company had released a disappointing trading statement that showed declining sales at its US theme parks attributable to rainy weather in the Northeast of the country, which accounts for 60% of US profits, as well as a sharper-than-anticipated falloff in sales at Marineland near Nice following the terrorist attack in the city. Going forward, assuming such events do not recur, we should see higher profits in both geographies, as well as an uplift to earnings as a result of recently signed management contracts in Dubai and Vietnam and the growing contribution from their Mall Entertainment Concepts. Even though the stock rebounded from around 12 to 15 per share in December, it still only trades at 15 times 2017 earnings, which looks like good value as we expect profits to grow 30% over the next two years. Note that Merlin Entertainments PLC, the nearest comparable, trades at 21 times earnings. The largest negative contributor was Intertrust, the Trust and Corporate Services leader, which fell sharply post disappointing Q3 results. This reflected worse-than-expected competitive pressure in one of its key jurisdictions, the Cayman Islands, where a competitor has re-entered the market and taken away business. One of the investment attractions of this industry is high revenue visibility, as clients continually require support and administrative services to optimise international operations spanning different legal and tax geographies. So while recent results have been disappointing and the decline in Cayman Islands business will likely impact 2016 full-year results and performance at the start of 2017 (although to a lesser degree), we expect favourable industry fundamentals to reassert themselves. Intertrust s share price fell by an excessive 15% in November but has since recouped more than half of that loss. And given that this high-margin business now trades at a significant discount to the market, we anticipate further recovery promises to be a year with many talking points carrying over from 2016, such as the French presidential elections, the UK government triggering negotiations to exit the EU and hopefully growing evidence of economic improvement in Europe. Nonetheless, due to our bottom-up approach, we continue to focus our stockselection efforts on companies with strong individual business models and asymmetric risk/reward profiles. Source of data: Carmignac, Bloomberg, Company data, 30/12/2016 Performance of the fund since conversion % /02 12/04 12/06 12/08 12/10 12/12 12/14 12/16 Carmignac Euro-Entrepreneurs A EUR acc Stoxx 200 Small NR (Eur) 302% 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). * 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 / 23

24 EQUITY MANAGEMENT Some of the best performances in the year came from: Stocks Performance Fagron, healthcare, Belgium +48% Altice, telecommunications, Netherlands +42% Micro Focus International, software, United Kingdom +37% Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Currency Derivatives Mutual Fund Total Tessenderlo Chemie, chemicals, Belgium +27% Puma, footwear, Germany +26% Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Geographical Exposure (%) Positions Long Short Net Netherlands Belgium United Kingdom France Switzerland Spain Germany Finland Austria Ireland USA Total Sector Exposure (%) Positions Long Short Net Cons. Services Financials Technology Industrials Basic Materials Healthcare Telecommunication Cons. Goods Total Net currency exposure of Euro share classes (%) Statistics (%) 1 year 3 years Fund volatility USD EUR GBP CHF Other Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Cumulative performance (%) Since 31/12/ 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. 24 / Management report CARMIGNAC FOURTH QUARTER 2016

25 HOLDINGS CARMIGNAC EURO-ENTREPRENEURS AT 30/12/2016 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 BILFINGER BERGER AG Industrials COMPUGROUP MEDICAL Technology LANXESS AG Basic Materials LEIFHEIT AG Consumer Goods MORPHOSYS Healthcare PUMA Consumer Goods TELE COLUMBUS AG Consumer Services Austria DO & CO AG Consumer Services Belgium ABLYNX SA Healthcare FAGRON NV Healthcare TESSENDERLO CHEMIE Basic Materials Spain APPLUS SERVICES SA Industrials PARQUES REUNIDOS SERVICIOS C Consumer Services TALGO SA Industrials Finland FERRATUM OYJ Financials France ALTRAN TECHNOLOGIES SA Technology SFR GROUP SA Consumer Services SOPRA STERIA GROUP Technology TARKETT Industrials TELEPERFORMANCE Consumer Services Ireland SMURFIT KAPPA GROUP PLC Industrials Netherlands ALTICE SA Telecommunication ASR NEDERLAND Financials IMCD GROUP NV Basic Materials INTERTRUST NV Financials INTERXION Technology PHILIPS LIGHTING NV Industrials VAN LANSCHOT NV-CVA Financials United Kingdom 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 SUNRISE COMMUNICATIONS Telecommunication TEMENOS GROUP AG Technology EQUITY MANAGEMENT Portfolio value Net assets CARMIGNAC FOURTH QUARTER 2016 / 25

26 EQUITY MANAGEMENT NET EQUITY EXPOSURE CARMIGNAC EURO-ENTREPRENEUR AT 30/12/2016 Exposure ( ) % Exposure Long derivative positions European Union Consumer Services (1 Position) France Telecommunication (2 Positions) Netherlands ex European Union Consumer Services (1 Position) Switzerland Industrials (1 Position) Switzerland Telecommunication (1 Position) Switzerland Short derivative positions European Union Basic Materials (1 Position) Germany Consumer Services (1 Position) Germany Consumer Services (1 Position) United Kingdom Healthcare (1 Position) United Kingdom Technology (1 Position) Germany ex European Union Financials (1 Position) USA Healthcare (1 Position) Switzerland Equity Investment Net equity exposure / Management report CARMIGNAC FOURTH QUARTER 2016

27 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 down -3.58% in the fourth quarter of 2016, compared with a +2.11% increase in its reference indicator. That takes its performance since the start of the year to +1.39%, versus a % gain in its reference indicator. Emerging markets continued on the whole to reap the benefits of improving macroeconomic indicators in both the developed and the developing worlds. The fourth quarter also saw two game-changing events. On the geopolitical front, Donald Trump was elected the 45th President of the United States. On the energy front, the Organization of the Petroleum Exporting Companies (OPEC) reached a landmark deal with non-member oil producers to cut output by 1.2 million barrels a day. The economic fundamentals of emerging countries showed further gradual improvement, with most of them running a current-account surplus for the period. And though it may seem counter-intuitive, their healthier balance of payments was accompanied by a more generous risk premium at the close of the quarter, the nominal interest rate differential stood at 6%. At the same time, a good many indicators, both tangible ones like manufacturing indicators and sentiment-related ones like PMI surveys, strongly suggest that the business cycle has entered the recovery stage. The better readings from emerging markets both shape and reflect trends in developed economies, corroborating our hypothesis that a worldwide cyclical recovery is taking hold. That said, this recent, rather moderate upturn is highly vulnerable to large exogenous shocks, and just such a shock could happen sooner rather than later if the US federal tax reform proposal widely discussed and increasingly advocated by the incoming US administration to create a new destination-based cash-flow tax goes through. China, which with 17% of the Fund s assets is our primary geographic allocation, also posted improving economic indicators. Inordinate expansion of the country s money supply (averaging 15% over the fourth quarter) has certainly kept the Chinese economy humming, but it has also stoked inflation: the Producer Price Index (PPI) recorded a 5.5% year-on-year increase in December And though overheating in the property market an unmistakable trend in the third quarter seems to have subsided in response to recent government policy moves, China s balance of payments is still under considerable pressure. Finally, even with greater efforts by Beijing to make the country s borders less porous, capital outflows have persisted, with no sign of letting up. During the fourth quarter, we acquired a stake in 58.com (Wuba), China s top classified ads website. 58.com, the Chinese answer to Craigslist and Leboncoin.fr in France, spans a variety of content categories that include housing, jobs and used car sales. Although still in its swaddling clothes in China, this kind of business model holds major potential, given the scope of its addressable markets. Better still, this is a capital-light business with capital spending equal to a mere 3% of sales. India, where nearly 15% of the Fund s assets are invested, experienced an economic earthquake in the fourth quarter one with a monetary epicentre. In November, Narendra Modi s administration caught virtually everyone off guard when it announced the immediate withdrawal of close to 85% of all banknotes in circulation in the country. Such a bold move was bound to send major ripples across an economy in which fiat money is used for 98% of all daily transactions. The aim was to curb India s parallel economy accounting for an estimated 26% of GDP and strengthen the hand of the tax authorities. Although this massive banknote withdrawal amounts to amputation from a short-term economic standpoint, it should pave the way for a cyclical rebound once the economy has kicked the cash habit, which it most likely will in the next few months. The shock wave triggered by the surprise outcome of the US elections was felt the hardest in Mexico. Donald Trump produced a steady stream of inflammatory rhetoric on the neighbouring country during his campaign. By scapegoating Mexico and its people, he created a kind of Trojan horse for winning over US voters. And win them over he did. Almost immediately afterwards, the Mexican peso plummeted to a record low of 20.7 against the dollar. Today, with the President Elect just entering the Oval Office, uncertainty continues to reign supreme. While Mexican manufacturers are holding their breath, storm clouds appear to be gathering over their production lines. We accordingly scaled back our exposure to domestic consumer-goods stocks, reducing our holdings in Walmex and Fomento Económico. At the same time, we initiated a new position in Grupo México, a major copper producer. The company s strong balance sheet evidenced by ample net cash and substantial ability to generate free cash flow are fully in line with our investment philosophy. In Brazil, where economic renewal and tax reform are progressing (however slowly), we increased our holdings by acquiring a stake in Taesa, a leading power transmission company in the country. Though this is a capital-hungry business, investment plans aren t approved unless the real internal rate of return negotiated prior to the project is above a certain threshold. Furthermore, the Performance of the fund since its launch % % 0 02/97 01/00 01/03 01/06 01/09 01/12 01/15 12/16 Carmignac Emergents A EUR acc MSCI Emerging Markets 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 / 27

28 EQUITY MANAGEMENT company s revenue stream has a number of attractive features, as it is inflationadjusted and guaranteed, independently of the power volume transported. Among the countries of Europe, the Middle East and Africa (EMEA), Russia stands out as the star pupil. Orthodox fiscal and monetary policies, gradual economic recovery and a historic agreement with OPEC are all working in Moscow s favour. The increasingly encouraging economic climate created by those factors led us to raise our exposure to Russia by taking a stake in Moscow Exchange, the national securities exchange group. Not only does Moscow Exchange enjoy monopoly status; it also has a broad range of revenue sources that are both cyclical and countercyclical. And as it combines a capital-light business model, a handsome 7.7% free cash flow yield and an attractive valuation with a 6.2% dividend yield we view this investment as a very good buy. As this new year gets under way, the emerging-market asset class appears to be basking in sunny weather. Almost by definition, it stands to benefit from a revival in developed-world manufacturing, rising commodity prices and improved domestic economic indicators. But Donald Trump s entry into the White House, along with his statements on international trade and basing taxation on where goods are produced, casts something of a shadow over what would otherwise qualify as a promising or even exciting outlook for emerging markets. Here are some of our best-performing stocks in 2016: Stocks Performance Samsung Electronics, electronics and appliances, South Korea +43% Astra International, automotive, Indonesia +38% MercadoLibre, software and internet, China +37% Taiwan Semiconductor, semi-conductors, Taiwan +26% Emaar Properties, real estate, United Arab Emirates +25% Geographic breakdown (derivatives excluded) (%) Sector breakdown (derivatives excluded) (%) 0.9 North America 22.0 Latin America 2.4 Europe Middle East 2.4 Africa Eastern Europe 51.1 Asia 1.8 Asia-Pacific Information Technology Consumer Discretionary Financials Consumer Staples Real Estate Telecommunication Services Industrials Materials Healthcare Cash, cash equivalents and derivatives operations Utilities Cash, cash equivalents and derivatives operations Statistics (%) 1 year 3 years Fund volatility Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Net currency exposure of Euro share classes (%) USD 33.4 Quarterly gross performance contribution (%) Equity Portfolio Equity Derivatives Currency Derivatives Total EUR JPY Latin America , Emerging Asia 2, Eastern Europe, Middle East and Africa 10.1 Cumulative performance (%) Since 31/12/ 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). 28 / Management report CARMIGNAC FOURTH QUARTER 2016

29 HOLDINGS CARMIGNAC EMERGENTS AT 30/12/2016 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 SANTANDER MEXICO (Mexico) Financials BB SEGURIDADE PARTICIPACOES (Brazil) Financials CCR (Brazil) Industrials CEMEX (Mexico) Materials FEMSA UNITS ADR (Mexico) Consumer Staples GRUPO BANORTE (Mexico) Financials GRUPO MEXICO SA DE CV (Mexico) Materials MERCADOLIBRE INC (Argentina) Information Technology MEXICO REAL ESTATE MGMT (Mexico) Real Estate TRANSMISSORA ALIANCA (Brazil) Utilities WAL-MART DE MEXICO (Mexico) Consumer Staples Asia COM (China) Information Technology AIA GROUP LTD (Hong Kong) Financials ASTRA INTERNATIONAL (Indonesia) Consumer Discretionary BAIDU INC (China) Information Technology BHARTI AIRTEL LTD (India) Telecommunication Services BHARTI INFRATEL LTD (India) Telecommunication Services DALI FOODS GROUP CO LTD (China) Consumer Staples HERO MOTOCORP LTD (India) Consumer Discretionary ICICI BANK (India) Financials INFOSYS TECHNOLOGIES (India) Information Technology KANGWON LAND (South Korea) Consumer Discretionary MEDIATEK (Taiwan) Information Technology NETEASE (China) Information Technology PLDT (Philippines) Telecommunication Services SAMSUNG BIOLOGICS CO LTD (South Korea) Healthcare SAMSUNG ELECTRONICS (South Korea) Information Technology SHANGHAI INTERNATIONAL AIR-A (China) Industrials TAIWAN SEMICONDUCTOR (Taiwan) Information Technology TATA MOTORS LTD (India) Consumer Discretionary UNITED SPIRITS LTD (India) Consumer Staples ZHENGZHOU YUTONG BUS CO-A (China) Industrials Africa MTN GROUP LTD (South Africa) Telecommunication Services 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 EMLAK KONUT GAYRIMENKUL (Turkey) Real Estate ENKA INSAAT VE SANAYI (Turkey) Industrials TARO PHARMACEUTICAL INDUSTRIES (Israel) Healthcare Portfolio value Net assets EQUITY MANAGEMENT CARMIGNAC FOURTH QUARTER 2016 / 29

30 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 down -6.08% in the fourth quarter of 2016, compared with a -0.52% decrease in its reference indicator. That takes its full-year gain to +3.76%, versus a +6.67% rise in its reference indicator. The last quarter of 2016 saw a spate of historic events, some political, as with the unexpected outcome of the US presidential election, others geopolitical or energy-related, a prime example being the landmark agreement among oil-producing countries (for more details, see our macroeconomic analysis for Carmignac Emergents). Although our performance is usually driven by our Asian stocks with 64% of total assets the largest component of the Fund s portfolio this time around they delivered disappointing returns. The main sources of disappointment were from China and India (the region s two economic heavyweights), but for diametrically opposed reasons. Our portfolio of Chinese stocks suffered primarily from the transfer of YY from Carmignac Emergents to Carmignac Portfolio Emerging Discovery. This social network website holds a clearly dominant 47% share of the virtual karaoke market, but its stock price took a beating in the fourth quarter as investors feared it could lose ground to new market entrants. While those fears did a fair amount of harm, we remain confident in a company that combines a leadership position in a fast-growing market, a capital-light business model and an anticipated 12% free cash flow yield in 2017 (source: Deutsche Bank). 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 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). 13% The underperformance of our Indian stocks during the quarter was due partially or even entirely to a one-off exogenous shock which, though not unprecedented in the country, still took the population by surprise. Overnight, the government withdrew close to 85% of all banknotes in circulation, acting no doubt with the laudable intention of curbing India s sizable parallel economy. The initial impact, however, has been to create instability and throttle economic activity, given that fiat money is used for 98% of all daily transactions in the country. The good news is that such a shock is by definition a short-lived phenomenon the immediate and noteworthy economic slowdown that resulted should almost automatically give way to an equally sudden upswing in the coming months. In fact, we opted for greater exposure to India by acquiring a stake in Varun Beverages, one of the world s largest franchisees for soft drinks sold under PepsiCo trademarks. Carbonated soft drinks are most definitely an under-penetrated market segment in India. At 9.4 litres, the country s annual per capita consumption of those beverages lags miles behind the global average, which is roughly 91.9 litres per capita, and can therefore be expected to gradually align with international trends. Varun Beverages has close to a 21% share of the market for PepsiCo brands and controls nearly 45% of all Pepsi bottling in India. With a 7% free cash flow yield, the company fits our investment philosophy to a T. Our holdings in Sri Lanka and other frontier Asian countries i.e., whose markets are still in their infancy showed greater resilience and therefore made a positive contribution to the Fund s fourth-quarter performance. Our Latin American portfolio also turned in mixed results during the quarter. Unsurprisingly, the repeated unfriendly remarks by the White House s new tenant gave our Mexican stocks a tough time. Meanwhile, we moved to enlarge our footprint in Brazil, investing in Alliar Médicos à Frente during its recent IPO. A network of facilities for diagnostic imaging and clinical analysis, Alliar can look forward to strong, sustainable growth, given the low penetration rate of this kind of medical analysis in the country. Moreover, it operates in what is still a highly fragmented market that will likely undergo consolidation over the next few years. Last but not least, its virtually cycle-agnostic business model offers an attractive combination of gradual value accretion and low capital expenditure (just 7% of sales according to Bloomberg). * 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. 30 / Management report EQUITY MANAGEMENT

31 In the Europe, Middle East and Africa (EMEA) region, we bolstered our presence in the United Arab Emirates by upping our stake in Emaar Malls, a Dubai-based real estate development company that owns the renowned Dubai Mall, which drew over 80 million visitors in The gradual rise in oil prices on the back of the epoch-making agreement between OPEC and non- OPEC producers should boost incomes in oil-producing countries the main source of tourists in Dubai and thus generate more business for Emaar. Here are some of our best-performing stocks in 2016: Stocks Performance Intercorp Financial Services, financial services, Peru +41% Globaltra-Spons, rail freight transportation, Russia +39% Banco Davivienda, retail, Colombia +38% Organización TER CB, retail, Colombia +34% Dr Lal PathLabs, healthcare, India +33% EQUITY MANAGEMENT Geographic breakdown (derivatives excluded) (%) Sector breakdown (derivatives excluded) (%) Europe 2.2 Middle East 3.2 Eastern Europe Asia Financials Information Technology Consumer Staples Industrials Materials Consumer Discretionary Healthcare Latin America Africa Utilities Real Estate Cash, cash equivalents and derivatives operations Telecommunication Services Cash, cash equivalents and derivatives operations 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 31/12/ 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). CARMIGNAC FOURTH QUARTER 2016 / 31

32 EQUITY MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO EMERGING DISCOVERY AT 30/12/2016 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities Europe GLOBAL PORTS INV (Cyprus) Industrials Latin America ALLIAR MEDICOS A FRENTE SA (Brazil) Healthcare BANCO DAVIVIENDA (Colombia) Financials CEMEX LATAM HOLDINGS (Colombia) Materials CERVECERIA CCU (Chile) Consumer Staples CRESUD S.A.C.I.F.Y A. (Argentina) Real Estate EMBOTELLADORA ANDINA (Chile) Consumer Staples ENERGISA SA (Brazil) Utilities FPC PAR CORRETORA SEGURO (Brazil) Financials GRUPO LALA SAB DE CV (Mexico) Consumer Staples GRUPO SUPERVIELLE SA CL-B (Argentina) Financials INTERCORP FINANCIAL SERVICES (Peru) Financials ORGANIZACION TER CB (Colombia) Consumer Discretionary SUL AMERICA UNITS (Brazil) Financials TF ADMINISTRADOR 3 MM (Mexico) Financials UNIFIN FINANCIERA (Mexico) Financials Asia CEMEX HLDGS PHILIPPINES (Philippines) Materials CHICONY ELECTRONICS CO (Taiwan) Information Technology DR LAL PATHLABS LTD (India) Healthcare ENN ENERGY HOLDINGS (China) Utilities GIANT MANUFACTURING CO (Taiwan) Consumer Discretionary HAVELLS INDIA LTD (India) Industrials HOLCIM PHILIPPINES (Philippines) Materials HYUNDAI INDUSTRIAL CO LTD (South Korea) Consumer Discretionary ICTSI INT'L CONTAINER (Philippines) Industrials INDOCEMENT TUNGGAL PRAKARSA (Indonesia) Materials INNOCEAN WORLDWIDE (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 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 SA SA INTL HOLDINGS (Hong Kong) Consumer Discretionary SHREE CEMENT LTD (India) Materials SILICON WORKS (South Korea) Information Technology SINA CORP (China) Information Technology TRIPOD TECHNOLOGY CORP (Taiwan) Information Technology VARUN BEVERAGES LTD (India) Consumer Staples VIETNAM DAIRY PRODUCTS JSC (Vietnam) Consumer Staples YIHAI INTL HLDG (China) Consumer Staples YY INC (China) Information Technology Africa EAST AFRICAN BREWERIES (Kenya) Consumer Staples GUINNESS NIGERIA PLC (Nigeria) Consumer Staples SAFARICOM (Kenya) Telecommunication Services Eastern Europe GLOBALTRA-SPONS (Russia) Industrials Middle East ARAMEX PJSC (United Arab Emirates) Industrials AVIVASA EMEKLILIK VE (Turkey) Financials EMAAR MALLS GROUP (United Arab Emirates) Financials Portfolio value Net assets / Management report CARMIGNAC FOURTH QUARTER 2016

33 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 was up +9.86% in the fourth quarter of 2016, compared with % for its reference indicator. The fund continued to be positioned conservatively in mining and materials, as our concerns over China s medium-term economic health outweighed positive price momentum from bulk metals. The major event in the quarter was of course the election of Donald Trump. The result has spurred anticipation of a reflationary trend in markets, with US 10-year yields spiking and infrastructure spending themes gaining prominence. The OPEC agreement provided an additional tailwind for energyrelated investments in the US. For the full year, the Fund gained %, versus % for its reference indicator has been a year of violent rotation, with mining stocks crushed early in the first quarter, only to stage a spectacular rally throughout the rest of the year as China primed the pump. In energy, we also saw a recovery in oil prices from their spring lows, pushing up to the high $60s by year-end. Falling non-opec supply, coupled with a reassertion of OPEC discipline in the fourth quarter, improved sentiment, and indeed we have started to see a recovery in rig count, as well as production growth in the largest of the shale basins, the Permian. Latterly even gas prices staged a rally as the winter months closed in and signs of improved global gas demand became apparent. The fourth quarter saw a sell-off in gold prices, and consequently our gold-miner holdings showed considerable weakness, with Goldcorp down 12% and Newmont down 8%, while silver royalty company Silver Wheaton fell 24%. On the positive side, our shale oil holdings did well, with Oasis Petroleum rising 40% over the quarter. We remain positive on oil-price developments going into the new year, as we see continued proof of OPEC discipline, healthy global demand trends (+1.3% year-on-year) and stagnant non-opec supply potentially leading us into a supply shortfall next summer that should drag inventories into line by the autumn. Accordingly, we have added to our oil service exposure, particularly to beneficiaries of onshore US fracking activity, which is clearly picking up as oil prices recover. New additions to the fund included RPC and Halliburton. We also started a position in MasTec, a pipeline builder in the US. We boosted our position in Methanex, which benefits from higher oil prices as well as lower US feedstock costs. We also added selectively to our favoured sub-sectors in metals, with positions in Boliden (zinc), First Quantum (copper) and Grupo Mexico (copper). At the same time, we exited coallevered names South 32 and Shenhua Coal. Noting the sell-off in coal prices at the beginning of 2017, we may seek to rebuild positions on extended weakness. On the mining side, we are torn between attractive valuations on spot commodity prices and longer-term negative fundamentals (a consequence of overcapacity in China and excess supply additions still being rolled out). We favour companies that could benefit from rising protectionism such as steel names ArcelorMittal and Nucor, as well as Tenaris, given its oil leverage. Our attention has also been drawn to less obvious commodity themes over the past few months. We are particularly interested in the upstream end of the semiconductor sector (i.e. semiconductor equipment manufacturers), for example. We wagered that the silicon wafer manufacturers would be heading for pricing power and consolidation, and the latter development finally appears to be happening, with pricing coming back as demand recovers and new sources of demand open up for wafers, such as electric vehicles and solar energy. Performance of the fund since its launch % /03 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 Carmignac Portfolio Commodities A EUR acc Reference indicator (1) 193% 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 / 33

34 EQUITY MANAGEMENT This thesis supported our investment in Siltronic, a spin-out of Wacker Chemie, which performed creditably last year and which we still feel is undervalued, given its free cash-flow generation potential. The stock rose 86% in the fourth quarter of 2016, making it the best performer in our portfolio. The main drag on our performance in 2016 was our underweight positioning in the bulk mining business. In 2017, we see the fundamentals in this sub-sector becoming more challenged as the China stimulus effect fades. In contrast, we remain more constructive on base metals such as copper and zinc, and on oil prices. So that is where the majority of our assets remain focused as 2017 gets under way. Some of our best-performing stocks in the quarter: Stocks Performance Oasis Petroleum, Shale oil and gas, USA +105% Siltronic, commodity related industries, Germany +95% BHP Billiton, diversified metals and mining, United Kingdom +72% Lundin Mining, diversified metals and mining, Canada +68% Rio Tinto, diversified metals and mining, United Kingdom +60% Geographical Exposure (%) Positions Long Short Net North America Europe Latin America Asia Asia-Pacific Eastern Europe Total Sector Exposure (%) Positions Long Short Net Energy Industrial Materials Precious Metals Chemicals Agricultural resources Other Commodities Related Regional Indexes Total Net currency exposure of Euro share classes (%) Statistics (%) 1 year 3 years USD EUR JPY GBP AUD and CAD Latin America 1,1 11, , Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Emerging Asia 0.5 Eastern Europe, Middle East and Africa Other 3.5 Quarterly gross performance contribution (%) Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Equity Portfolio Bond Portfolio Equity Derivatives Currency Derivatives Total Cumulative performance (%) Since 31/12/ 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. 34 / Management report CARMIGNAC FOURTH QUARTER 2016

35 HOLDINGS CARMIGNAC PORTFOLIO COMMODITIES AT 30/12/2016 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Equities Energy ANADARKO PETROLEUM (USA) North America EQUITY MANAGEMENT CAIRN ENERGY (United Kingdom) Europe CANADIAN NATURAL RESOURCES LTD (Canada) North America CARRIZO OIL & GAS (USA) North America ENBRIDGE (Canada) North America ENI SPA (Italy) Europe EOG RESOURCES (USA) North America FAR LTD (Australia) Asia-Pacific GLOBALWAFERS (Taiwan) Asia HALLIBURTON (USA) North America NOBLE ENERGY INC (USA) North America OASIS PETROLEUM INC (USA) North America PDC ENERGY INC (USA) North America PIONEER NAT. RESOURCES (USA) North America ROYAL DUTCH SHELL PLC (Netherlands) Europe RPC (USA) North America SCHLUMBERGER (USA) North America SILTRONIC AG (Germany) Europe SUNCOR ENERGY (Canada) North America TENARIS SA (Italy) Europe TRANSCANADA CORP (Canada) North America WOOD GROUP (United Kingdom) Europe Industrial Materials ALCOA CORP (USA) North America ARCELORMITTAL (Luxembourg) Europe ARIZONA MINING INC (Canada) North America BHP BILLITON PLC (United Kingdom) Europe BOLIDEN (Sweden) Europe CEMEX HLDGS PHILIPPINES (Philippines) Asia FIRST QUANTUM MINERALS LTD (Canada) North America GRUPO MEXICO SA DE CV (Mexico) Latin America LUNDIN MINING CORP (Canada) North America MUELLER INDUSTRIES INC (USA) North America NUCOR CORP (USA) North America RIO TINTO PLC (United Kingdom) Europe ROTORK PLC (United Kingdom) Europe WEIR GROUP PLC (United Kingdom) Europe Precious Metals ELDORADO GOLD CORP (Canada) North America GOLDCORP INC (Canada) North America CARMIGNAC FOURTH QUARTER 2016 / 35

36 EQUITY MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO COMMODITIES AT 30/12/2016 Price in currencies Total value ( ) % of net assets HOCHSCHILD MINING PLC (Peru) Latin America KANSAI MINING CORP (USA) North America NEWMONT MINING (USA) North America ROYAL GOLD INC (USA) North America SILVER WHEATON CORP (Canada) North America Agricultural resources DARLING INGREDIENTS (USA) North America INTERFOR CORP (Canada) North America Chemicals CF INDUSTRIES HOLDINGS (USA) North America METHANEX CORP (Canada) North America POTASH CORP (Canada) North America PRAXAIR INC (USA) North America TESSENDERLO CHEMIE (Belgium) Europe Other Commodities Related MASTEC INC (USA) North America Portfolio value Net assets NET EQUITY EXPOSURE CARMIGNAC PORTFOLIO COMMODITIES AT 30/12/2016 Exposure ( ) % Exposure Long derivative positions Industrial Materials (1 Position) Europe Regional Indexes (3 Positions) Europe Energy (5 Positions) North America Industrial Materials (2 Positions) Europe Short derivative positions Energy (9 Positions) Europe Industrial Materials (3 Positions) Europe Regional Indexes (4 Positions) Europe Energy (1 Position) Europe Energy (1 Position) Eastern Europe Energy (8 Positions) North America Energy (3 Positions) Latin America Industrial Materials (1 Position) Asia Precious Metals (3 Positions) North America Equity Investment Net equity exposure / Management report CARMIGNAC FOURTH QUARTER 2016

37 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 gained +1.92% in the fourth quarter, compared with a +2.64% increase in its reference indicator. That brings its year-to-date performance to +3.88%, against +8.05% for its reference indicator. The Fund s equity portfolio contributed +0.43% to gross performance for the quarter, while its reference indicator was up +3.94% (see the Carmignac Investissement report). The equity portfolio was weighed down by our holdings in the pharmaceutical and gold-mining industries, whose losses, to a large extent, cancelled out the positive returns from our energy and tech stocks. Our equity exposure is high in this start of year, at 49%. It reflects our belief that equity investors are still underestimating the magnitude of the global recovery under way. Our bond portfolio also contributed to the Fund s gains for the quarter, adding +1.89%, in contrast with a -1.30% decline in its reference indicator. This portfolio was boosted by effective risk management in response to a particularly busy political calendar and a rerating of the inflation premium, as discussed in our previous quarterly report. Our prudent approach led us to reduce the portfolio s modified duration and increase our dollar exposure two strategies which have paid off. As we mention in the macroeconomic section of this report, we still see a paradigm shift ahead as investor decisions become driven less by monetary policies and more by the business cycle. The recovery should be supported by looser fiscal policies or even audacious measures in the US if President Trump follows through on his election platform. The following themes will underpin our investment strategy in 2017: rerating of the inflation premium: that translates into a considerably lower, and even negative, modified duration, which will shelter us against rising interest rates possibly even let us gain from them. We are also keeping inflation-linked securities in our portfolio. What has changed is that we are now also applying this strategy to our holdings in Europe, as we expect interest rates there to increase; outperformance of emerging market debt: this asset class will continue to be supported by more flexible monetary policies and higher commodities prices; rerating of the political risk premium: the European Union remains fragmented and the political risk is palpable; the dollar is now favoured over the euro. However, aversion to this risk just well may have reached unsustainable levels that could be challenged by the outcome of the upcoming elections. The main risk on the agenda as we head into 2017 is a shift in expectations about the ECB s monetary policy. Anticipations of asset purchase tapering could intensify, leading to a sovereign debt crisis and a sharp appreciation of the euro. We therefore plan to continue scaling back our exposure to peripheral sovereign debt and gradually strengthen our hedges against higher German and French yields. We are keeping our dollar exposure, but have reduced it significantly. Investment strategy Currencies and cash: we are maintaining our exposure to the US dollar, although our euro exposure is already on its way to gaining the upper hand. The euro lost 6.4% against the dollar in the fourth quarter, but gained 7.9% against the yen (source: Bloomberg). The Federal Reserve raised its benchmark interest rate by 25 basis points, bringing the spread against the eurozone shortterm rate to around 100 basis points. Donald Trump s election victory boosted consumer and business confidence indices and pushed the dollar up to the point where it is now overvalued. The EUR/USD exchange rate currently shows a 16% differential from the purchasing-power-parity exchange rate, whereas previous dollar rallies ended with the greenback overvalued by 30% on average. We therefore believe the dollar has limited upside potential, and any further gains would depend on how closely Trump sticks to his campaign platform. Meanwhile, the euro could bounce higher on the back of better GDP growth and inflation figures, which investors would probably take as heralding the end of the ECB s ultra-loose monetary policy. Those factors prompted us to shrink our dollar weighting from 70% to 45% and increase our euro weighting to 53%. We remain cautious on the yen and are keeping our short position. Government bonds: our government bond allocation stands at 23%, with 7% allocated to emerging market government bonds. The total modified duration at the end of the quarter was US interest rates have been climbing since Trump s victory, substantiating the risk management decisions we made earlier. The ten-year Treasury yield is up by some 90 basis points, while inflation expectations, measured by the differential between nominal and real interest rates, have risen by 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 Carmignac Patrimoine A EUR acc 50% MSCI ACW NR (Eur) + 50% Citigroup WGBI all maturities (Eur) 748% 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 / 37

38 DIVERSIFIED MANAGEMENT 40 basis points. Thanks to our hedges, the modified duration of our portfolio is now in negative territory meaning the sharp rise in interest rates has been beneficial for our Fund. We will continue with this prudent strategy into the next quarter. The cyclical recovery is still largely being driven by the commodities sector and could accelerate, as discussed in the macroeconomic section of this report. Most notably, wages in the US have recently started trending upwards, which could lend further support to a pick-up in inflation. We are therefore keeping our short positions on US long-term interest rates as well as our allocation to inflation-linked bonds. Inflation is also starting to reappear in Europe, although that primarily reflects a favourable comparison basis. Interest rates in the region are returning to normal after being stuck at rock-bottom levels. That said, the ECB s monetary policy should give us a breathing space, as there is still considerable bond scarcity relative to the current pace of its asset purchases. We are maintaining our allocation to Italian bonds (ten-year yield of around 1.9%) and Portuguese bonds (ten-year yield of around 3.8%). These positions are partially hedged by a strategy designed to take advantage of a rise in German yields. Our allocation to emerging market government bonds contributed +1% to the Fund s performance for the year, mostly thanks to gains in our Brazilian holdings. We remain optimistic about this asset class, since it should be supported by buoyant commodity prices and a return to accommodative monetary policies in certain countries. At the end of the year, we added Russian government bonds denominated In USD to our portfolio, bringing our total allocation to emerging market government bonds to approximately 7%. Our allocation to corporate bonds stands at 25%. The core themes in this portfolio contributed +2.4% to the Fund s full-year performance. The portfolio benefited from a rally in subordinated bonds issued by top-tier European banks, driven by a rebound in Italian banks. Banking sector bonds as a whole got a boost from the higher interest rates and steeper rate curve. In addition, the sector s outperformance was fuelled by the prospect that the regulations that have largely handcuffed the industry and crimped its earnings outlook will be eased. The remainder of our corporate bond holdings consists of commodity-sector bonds and AAA-rated structured credit. Net currency exposure of Euro share classes (%) Sector breakdown (derivatives excluded) (%) USD EUR GBP 6, Financials Consumer Discretionary Information Technology CHF 0.9 Energy 15.4 AUD and CAD 1.4 Materials 12.5 Latin America 4.7 Healthcare 8.2 Emerging Asia Industrials 4.1 Eastern Europe, Middle East and Africa 0.7 Consumer Staples 3.4 Other 0.6 Telecommunication Services 1.7 Bond portfolio (derivatives excluded) Rating breakdown (%) Bond portfolio (derivatives excluded) Maturity breakdown (%) AAA 17, < 1 year 18.1 AA years 12.9 A years 12.3 BBB 1,0 11, years 10.1 BB 2, years 0, B 8.1 > 10 years 9.0 CCC 0.6 CC 0.1 Cumulative performance (%) Since 31/12/ 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). 38 / Management report CARMIGNAC FOURTH QUARTER 2016

39 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 Other 0.76 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 30/12/2016 Price in currencies total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) ITALY 14/08/2017 Treasury bill in Euro ITALY 14/09/2017 Treasury bill in Euro SPAIN 15/09/2017 Treasury bill in Euro SPAIN 18/08/2017 Treasury bill in Euro Developed countries fixed rate Government bonds GREECE 3.38% 17/07/2017 (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 3.75% 01/05/2021 (Italy) Euro PORTUGAL 2.88% 15/10/2025 (Portugal) Euro PORTUGAL 3.88% 15/02/2030 (Portugal) Euro PORTUGAL 4.10% 15/02/2045 (Portugal) Euro PORTUGAL 4.10% 15/04/2037 (Portugal) Euro PORTUGAL 4.35% 16/10/2017 (Portugal) Euro PORTUGAL 4.45% 15/06/2018 (Portugal) Euro PORTUGAL 4.95% 25/10/2023 (Portugal) Euro PORTUGAL 5.65% 15/02/2024 (Portugal) Euro SLOVENIA 5.85% 10/05/2023 (Slovenia) Dollar SPAIN 1.40% 31/01/2020 (Spain) Euro SPAIN 5.50% 30/04/2021 (Spain) Euro UNITED STATES 0.50% 28/02/2017 (USA) Dollar UNITED STATES 0.50% 31/03/2017 (USA) Dollar UNITED STATES 2.12% 15/05/2025 (USA) Dollar UNITED STATES 2.25% 15/11/2024 (USA) Dollar Developed countries inflation-linked Government bonds ITALY I/L 2.35% 15/09/2024 (Italy) Euro ITALY I/L 3.10% 15/09/2026 (Italy) Euro USA I/L 0.62% 15/01/2026 (USA) 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 (Mexico) Mexican peso Emerging markets fixed rate Government bonds ARGENTINA 7.00% 17/04/2017 (Argentina) Dollar CARMIGNAC FOURTH QUARTER 2016 / 39

40 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PATRIMOINE AT 30/12/2016 Price in currencies total value ( ) % of net assets BAHRAIN 7.00% 12/10/2028 (Bahrain) Dollar BRAZIL 10.00% 01/01/2025 (Brazil) Real Brazil BRAZIL 2.88% 01/04/2021 (Brazil) Euro BRAZIL 5.62% 21/02/2047 (Brazil) Dollar INDONESIA 2.62% 14/06/2023 (Indonesia) Euro INDONESIA 3.38% 30/07/2025 (Indonesia) Euro POLAND 2.50% 25/07/2026 (Poland) Zloty RUSSIA 4.75% 27/05/2026 (Russia) Dollar SAUDI ARABIA 2.38% 26/10/2021 (Saudi Arabia) Dollar Developed countries fixed rate corporate bonds ABN AMRO BANK 2.88% 30/06/2020 (Netherlands) Financials (subordinated debt) AIR LEASE 5.62% 01/04/2017 (USA) Industrials ALLIED IRISH 2.75% 16/04/2019 (Ireland) Financials (senior debt) ALLIED IRISH 4.12% 26/11/2020 (Ireland) Financials (subordinated debt) ALTICE SA 6.25% 15/02/2020 (Netherlands) Consumer Discretionary ALTICE SA 6.50% 26/01/2017 (Netherlands) Consumer Discretionary ALTICE SA 6.50% 27/01/2017 (Netherlands) Consumer Discretionary ALTICE SA 6.62% 15/02/2018 (Netherlands) Consumer Discretionary ALTICE SA 7.25% 15/05/2017 (Netherlands) Consumer Discretionary ALTICE SA 7.62% 15/02/2020 (Netherlands) Consumer Discretionary AXA 3.38% 06/07/2027 (France) Financials (subordinated debt) AXA 5.12% 04/07/2023 (France) Financials (subordinated debt) BANCO POPOLARE SC 2.75% 27/07/2020 (Italy) Financials (senior debt) BANK OF AMERICA 3.88% 22/03/2017 (USA) Financials (senior debt) BANK OF IRELAND 7.38% 18/06/2020 (Ireland) Financials (subordinated debt) BANKIA 3.50% 17/01/2019 (Spain) Financials (senior debt) BANKIA 4.00% 22/05/2019 (Spain) Financials (subordinated debt) BARCLAYS 2.62% 11/11/2020 (United Kingdom) Financials (subordinated debt) BARCLAYS 7.75% 10/04/2018 (United Kingdom) Financials (subordinated debt) BBVA 3.50% 11/04/2019 (Spain) Financials (subordinated debt) BBVA 7.00% 19/02/2019 (Spain) Financials (subordinated debt) BBVA 8.88% 14/04/2021 (Spain) Financials (subordinated debt) BBVA 9.00% 09/05/2018 (Spain) Financials (subordinated debt) BELFIUS BANK SA 3.12% 11/05/2026 (Belgium) Financials (subordinated debt) BERKSHIRE HATHAWAY 0.50% 13/02/2020 (USA) Financials (senior debt) BHP BILLITON 5.625% 22/10/2024 (Australia) Materials (subordinated debt) BNP PARIBAS 2.38% 14/09/2017 (France) Financials (senior debt) BNP PARIBAS 6.12% 17/06/2022 (France) Financials (subordinated debt) CITIGROUP INC 4.30% 20/11/2026 (USA) Financials (subordinated debt) CITIGROUP INC 4.40% 10/06/2025 (USA) Financials (subordinated debt) CREDIT AGRICOLE 4.38% 17/03/2025 (France) Financials (subordinated debt) CREDIT AGRICOLE 4.50% 14/10/2025 (France) Financials (subordinated debt) CREDIT AGRICOLE 4.75% 27/09/2028 (France) Financials (subordinated debt) CREDIT AGRICOLE 7.88% 23/01/2024 (France) Financials (subordinated debt) CREDIT LOGEMENT SA 0.83% 16/03/2017 (France) Real Estate (subordinated debt) CREDIT SUISSE 5.75% 18/09/2020 (Switzerland) Financials (subordinated debt) CREDIT SUISSE 6.50% 08/08/2023 (Switzerland) Financials (subordinated debt) DANICA PENSION 4.38% 29/09/2025 (Denmark) Financials (subordinated debt) DANSKE BANK 5.88% 06/04/2022 (Denmark) Financials (subordinated debt) DNO ASA 8.75% 18/06/2017 (Norway) Energy EBAY INC 2.88% 01/06/2021 (USA) Information Technology EBAY INC 3.80% 09/02/2022 (USA) Information Technology EUROFINS SCIENTIFIC 2.25% 27/01/2022 (Luxembourg) Healthcare / Management report CARMIGNAC FOURTH QUARTER 2016

41 HOLDINGS CARMIGNAC PATRIMOINE AT 30/12/2016 Price in currencies total value ( ) % of net assets EUROFINS SCIENTIFIC 3.38% 30/10/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC 4.88% 29/04/2023 (Luxembourg) Healthcare (subordinated debt) FCA CAPITAL IRELAND PLC 1.25% 21/01/2021 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 1.38% 17/04/2020 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 2.00% 23/10/2019 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 2.62% 17/04/2019 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 4.00% 17/10/2018 (Ireland) Consumer Discretionary FIRST QUANTUM MINERALS LTD 7.25% 15/05/2017 (Canada) Materials FONCIERE LYONNAISE 3.50% 28/11/2017 (France) Real Estate GENEL ENERGY 7.50% 27/01/2017 (United Kingdom) Energy IBERDROLA 5.00% 11/09/2019 (Spain) Utilities IMS HEALTH INC 3.50% 15/10/2019 (USA) Healthcare ING GROEP NV 6.00% 16/04/2020 (Netherlands) Financials (subordinated debt) INTESA SAN PAOLO 2.38% 13/01/2017 (Italy) Financials (senior debt) 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) INTESA SAN PAOLO 7.70% 17/09/2025 (Italy) Financials (subordinated debt) ISLANDSBANKI 1.75% 07/09/2020 (Iceland) Financials (senior debt) JP MORGAN 1.65% 23/09/2019 (USA) Financials (senior debt) LANDSBANKINN 1.62% 15/03/2021 (Iceland) Financials (senior debt) LEUCADIA 5.50% 18/01/2023 (USA) Financials (senior debt) LLOYDS 4.58% 10/12/2025 (United Kingdom) Financials (subordinated debt) MERCURY BONDCO PLC 8.25% 30/11/2017 (Italy) Information Technology MMC NORILSK NICKEL OJSC 6.62% 14/10/2022 (Russia) Materials MYLAN 2.25% 22/09/2024 (Netherlands) Healthcare MYRIAD INTERNATIONAL HOLDINGS BV 6.00% 18/07/2020 (Netherlands) Consumer Discretionary NORTH ATLANTIC DRILLING 6.25% 01/02/2019 (Norway) Energy NUMERICABLE 6.00% 15/05/2017 (France) Consumer Discretionary NUMERICABLE 6.25% 15/05/2019 (France) Consumer Discretionary PERSHING SQUARE 5.50% 15/06/2022 (Netherlands) Financials (senior debt) RABOBANK 6.50% 29/12/2049 (Netherlands) Financials (subordinated debt) ROYAL BANK OF SCOTLAND 3.62% 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% 15/08/2021 (United Kingdom) Financials (subordinated debt) SANTANDER 6.25% 12/03/2019 (Spain) Financials (subordinated debt) SOCIETE GENERALE 6.75% 07/04/2021 (France) Financials (subordinated debt) SOCIETE GENERALE 7.88% 18/12/2023 (France) Financials (subordinated debt) SOCIETE GENERALE 8.00% 29/09/2025 (France) Financials (subordinated debt) TOTAL SA 2.71% 05/05/2023 (France) Energy (subordinated debt) TOTAL SA 3.37% 06/10/2026 (France) Energy (subordinated debt) TOTAL SA 3.88% 18/05/2022 (France) Energy (subordinated debt) TULLOW OIL 6.00% 06/01/2017 (United Kingdom) Energy TULLOW OIL 6.25% 15/04/2017 (United Kingdom) Energy UBS AG 3.00% 15/04/2021 (Switzerland) Financials (senior debt) UBS AG 4.12% 15/04/2026 (Switzerland) Financials (senior debt) UBS AG 4.75% 12/02/2021 (Switzerland) Financials (subordinated debt) UBS AG 4.75% 22/05/2018 (Switzerland) Financials (subordinated debt) UBS AG 5.12% 15/05/2024 (Switzerland) Financials (subordinated debt) UBS AG 5.75% 19/02/2022 (Switzerland) Financials (subordinated debt) UBS AG 7.62% 17/08/2022 (Switzerland) Financials (subordinated debt) UNICREDIT 6.38% 02/05/2018 (Italy) Financials (subordinated debt) DIVERSIFIED MANAGEMENT CARMIGNAC FOURTH QUARTER 2016 / 41

42 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PATRIMOINE AT 30/12/2016 Price in currencies total value ( ) % of net assets UNICREDIT 6.75% 10/09/2021 (Italy) Financials (subordinated debt) UNICREDIT 6.95% 31/10/2022 (Italy) Financials (subordinated debt) UNICREDIT 9.25% 03/06/2022 (Italy) Financials (subordinated debt) UNIPOLSAI SPA 5.75% 18/06/2024 (Italy) Financials (subordinated debt) VIENNA INSURANCE 5.50% 09/10/2023 (Austria) Financials (subordinated debt) XYLEM INC 2.25% 11/12/2022 (USA) Industrials Developed countries floating rate corporate bonds AP MOELLER-MAERSK A/S TV 18/03/2019 (Denmark) Industrials LOCK AS TV 09/01/2017 (Norway) Financials (senior debt) Emerging markets fixed rate corporate bonds AXIS BANK 5.12% 05/09/2017 (United Arab Emirates) Financials (senior debt) BRF SA 2.75% 03/06/2022 (Brazil) Consumer Staples CBQ FINANCE 7.50% 18/11/2019 (Qatar) Financials (subordinated debt) CESKE DRAHY 1.88% 25/05/2023 Industrials FIDEICOM 5.25% 30/10/2025 (Mexico) Real Estate ICICI BANK 4.70% 21/02/2018 (India) Financials (senior debt) MOL HUNGARIAN OIL AND GAS 2.62% 28/04/2023 (Hungary) Energy PETROBRAS ARGENTINA SA 7.38% 21/07/2020 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 3.25% 01/04/2019 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 6.62% 16/01/2034 (Brazil) Energy PHOSAGRO 4.20% 13/02/2018 (Russia) Materials SANTANDER 4.12% 09/11/2022 (Mexico) Financials (senior debt) YPF SA 8.50% 23/03/2021 (Argentina) Energy YPF SA 8.50% 28/07/2025 (Argentina) Energy Developed countries convertible corporate bonds BANK OF NEW YORK MELLON 4.19% 15/12/2050 (Luxembourg) Financials (subordinated debt) Asset Backed Securities AMERICAN CAPITAL, ACAS CLO (USA) CLO (AAA tranche) AMERICAN CAPITAL, ACAS CLO (USA) 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) 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) SPIRE PARTNERS, AURIUM CLO I (Europe) 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) 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) CARLYLE, CARLYLE GMS EURO CLO (Europe) CLO (BBB tranche) CVC CREDIT PARTNERS, CVC CORDATUS V (Europe) CLO (AAA tranche) CVC CREDIT PARTNERS, CVC CORDATUS V (Europe) CLO (A tranche) / Management report CARMIGNAC FOURTH QUARTER 2016

43 HOLDINGS CARMIGNAC PATRIMOINE AT 30/12/2016 Price in currencies total value ( ) % of net assets 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) 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) 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) INVESTCORP, HARVEST CLO XIV (Europe) CLO (AAA tranche) INVESTCORP, HARVEST CLO IV (Europe) CLO (AA tranche) ICG, ICG US CLO (USA) CLO (AAA tranche) APEX CREDIT, JFIN CLO (USA) CLO (AAA tranche) ALCENTRA, JUBILEE CLO 2013-X (Europe) CLO (A tranche) ALCENTRA, JUBILEE CLO 2013-X (Europe) CLO (BBB 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) KKR CREDIT ADVISORS, KKR CLO 12 (USA) CLO (AAA tranche) SEIX, MOUNTAIN VIEW CLO X (USA) CLO (AAA 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) OAK HILL ADVISORS, OAK HILL ECP IV (Europe) 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) TRINITAS CAPITAL MANAGEMENT, TRINITAS CLO V (USA) CLO (AAA tranche) DIVERSIFIED MANAGEMENT Equities Developed countries North America AMAZON.COM INC (USA) Consumer Discretionary AMERICAN AIRLINES GROUP (USA) Industrials ANADARKO PETROLEUM (USA) Energy BANK OF AMERICA (USA) Financials CELGENE CORP (USA) Healthcare CF INDUSTRIES HOLDINGS (USA) Materials CHARTER COMMUNICATIONS INC-A (USA) Consumer Discretionary CONCHO RESOURCES (USA) Energy DELTA AIR LINES (USA) Industrials EOG RESOURCES (USA) Energy FACEBOOK INC (USA) Information Technology FRANCO-NEVADA CORP (Canada) Materials GOLDCORP INC (Canada) Materials HALLIBURTON (USA) Energy HESS CORP (USA) Energy HUDBAY MINERALS INC (Canada) Materials INTERCEPT PHARMACEUTICALS INC (USA) Healthcare INTERCONTINENTAL EXCHANGE (USA) Financials MASTERCARD INC (USA) Information Technology MICROSOFT CORP (USA) Information Technology CARMIGNAC FOURTH QUARTER 2016 / 43

44 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PATRIMOINE AT 30/12/2016 Price in currencies total value ( ) % of net assets NEWMONT MINING (USA) Materials NIKE INC (USA) Consumer Discretionary NOBLE ENERGY INC (USA) Energy PIONEER NAT. RESOURCES (USA) Energy POTASH CORP (Canada) Materials SCHLUMBERGER (USA) Energy SERVICENOW (USA) Information Technology SILVER WHEATON CORP (Canada) Materials SOUTHWEST AIRLINES CO (USA) Industrials T-MOBILE US INC (USA) Telecommunication Services TRANSCANADA CORP (Canada) Energy TRIPADVISOR INC (USA) Consumer Discretionary UNITED CONTINENTAL HLD (USA) Industrials VISA INC (USA) Information Technology Asia-Pacific DAI-ICHI LIFE INSURANCE (Japan) Financials MITSUBISHI UFJ FINANCIAL GROUP (Japan) Financials MIZUHO FINANCIAL GROUP INC (Japan) Financials NOMURA HOLDINGS (Japan) Financials SUMITOMO MITSUI FINANCIAL (Japan) Financials Europe ALTICE SA (Netherlands) Consumer Discretionary DASSAULT AVIATION SA (France) Industrials HERMES INTERNATIONAL (France) Consumer Discretionary INDITEX (Spain) Consumer Discretionary LAFARGEHOLCIM LTD (Switzerland) Materials LONDON STOCK EXCHANGE (United Kingdom) Financials NOVO NORDISK AS (Denmark) Healthcare RECKITT BENCKISER (United Kingdom) Consumer Staples SFR GROUP SA (France) Consumer Discretionary SHIRE PLC (United Kingdom) Healthcare Equities Emerging markets Latin America BANCO SANTANDER MEXICO (Mexico) Financials CEMEX (Mexico) Materials GRUPO PAO DE ACUCAR (Brazil) Consumer Staples MERCADOLIBRE INC (Argentina) Information Technology Asia AIA GROUP LTD (Hong Kong) Financials GMR INFRASTRUCTURE LTD (India) Industrials HDFC 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 FOURTH QUARTER 2016

45 Xavier Hovasse Charles Zerah Diversified emerging markets fund combining three performance drivers: emerging market equities, bonds, and currencies. By actively managing the equity exposure, 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 fourth quarter of 2016, Carmignac Portfolio Emerging Patrimoine was down -1.47%, compared with a +1.08% increase in its reference indicator. This takes its gain for the full year to +9.76%, versus % for its indicator. The Fund benefited from appreciation in the bond market, but was hurt by its sector allocation on the equity part (see Carmignac Emergents report) and a number of its currency hedges. While we have maintained substantial exposure to equities, we reduced our sensitivity to bond yields during the quarter, based on our expectations for US Treasury yields. Fixed income component In our previous report, we stated our confidence in emerging market bonds. Yields had eased since the start of 2016 due to improved economic fundamentals in the leading emerging markets. Donald Trump s electoral victory and several of his campaign promises admittedly look like bad news for the developing world, particularly for countries that export manufactured goods and services. On the other hand, the global cyclical upswing we have seen since the first quarter of 2016, along with rising commodity prices and therefore inflation, should drive up the value of fixed income assets in commodity producing and exporting countries that produce and export raw materials (see Macroeconomic analysis). These conflicting factors have led us to maintain a highly selective approach, with a balanced allocation between external and local sovereign debt in our fixed income portfolio. Emerging market bond yields climbed 61 basis points to 6.79% (as measured by the JP Morgan GBI-EM Diversified Index) during the fourth quarter. But even with emerging market bond prices heading downward, our portfolio performed well, due to our hedges on US Treasury yields and our exposure to both sovereign and corporate bonds of commodity-producing countries. The leading contributors to our fourth-quarter and full-year performance were in fact Russian, Brazilian and Chilean local bonds. Energy-sector corporate bonds also accounted for a sizable share of the Fund s gains, despite the fact that our average allocation to them during the year was in the neighbourhood of just 8%. Based on our global macroeconomic outlook, we favour bonds issued by commodity producers, along with inflation-linked bonds to hedge against the pickup in inflation that we expect to occur in the next few months. The Fund s modified duration should remain low in the first quarter of 2017, reflecting our concern over a potential increase in developed-country bond yields. Currency component In our previous quarterly report, we stressed our cautious stance on emerging market currencies in light of their recent rally on the back of rising commodity prices and economic stabilisation in China. However, Donald Trump s win at the polls was particularly detrimental to emerging market currencies in the fourth quarter. Our currency hedges prevented us from taking full advantage of a cheaper euro during the period, given that a number of the emerging market currencies that lost ground to the dollar appreciated against the EU s common currency. We took profits on the Japanese yen and the Brazilian real during the quarter, which we ended with significant exposure to the euro and the dollar to shield us against a possible surge in volatility caused by a shift to protectionism in the United States. Equity component In the last quarter of 2016, emerging market equities continued on the whole to reap the benefits of improving macroeconomic indicators in both the developed and the developing worlds. The underperformance of our equity portfolio in that environment is attributable to a wide range of factors that worked against our allocation choices in terms of both geography and individual stocks. China, a major allocation with 5.5% of the Fund s assets, posted an improvement in economic indicators, driven in part by inordinate expansion of the money supply (averaging 15% over the fourth quarter). But the country s balance of payments is still under considerable pressure. During the fourth quarter, we acquired a stake in 58.com (Wuba), China s top classified ads website. 58.com, the Chinese answer to Craigslist and Leboncoin.fr in France, spans a variety of content categories that include housing, jobs and used car sales. Although still in its swaddling clothes in China, this kind of business model holds major potential, given the scope of its addressable markets. Performance of the fund since its launch % /11 06/11 12/11 06/12 12/12 06/13 12/13 06/14 12/14 06/15 12/15 06/16 12/16 Carmignac Portfolio Emerging Patrimoine A EUR acc 50% MSCI EM NR (Eur) + 50% JP Morgan GBI EM (Eur) 12% 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 / 45

46 DIVERSIFIAED MANAGEMENT Our Indian stocks, which with 6.3% of the Fund s assets represent our primary allocation, had something of a bumpy ride when Narendra Modi s administration unexpectedly announced the immediate withdrawal of close to 85% of all banknotes in circulation in the country. Although this move amounts to amputation from a short-term economic standpoint, it should pave the way for a cyclical rebound once India s economy has kicked the cash habit, which it most likely will in the next few months. Our Mexican equity portfolio, accounting for 4.3% of the Fund s assets, detracted from performance as a result of the shock wave triggered by the surprise outcome of the US elections. During his campaign, Donald Trump produced a steady stream of inflammatory rhetoric on the neighbouring country that sent the Mexican peso plummeting to a record low of 20.7 against the dollar. We accordingly restructured our Mexican portfolio. We scaled back our exposure to domestic consumer-goods stocks, reducing our holdings in Walmex and Fomento Económico, while at the same time initiating a new position in Grupo México, a major copper producer. The company s strong balance sheet and substantial ability to generate free cash flow are fully in line with our investment philosophy. After pursuing a cautious approach to Europe, the Middle East and Africa (EMEA) for several months, we raised our exposure to Russia by taking a stake in Moscow Exchange, the national securities exchange group. Not only does Moscow Exchange enjoy monopoly status; it also has a broad range of revenue sources that are both cyclical and countercyclical. As this new year gets under way, the emerging market asset class appears to be basking in sunny weather. Almost by definition, it stands to benefit from a revival in developed-world manufacturing, rising commodity prices and improved domestic economic indicators. But President Trump s statements on international trade cast something of a shadow over what would otherwise qualify as a promising or even exciting outlook for emerging markets. Sector breakdown (derivatives excluded) (%) Bond portfolio (derivatives excluded) - Rating breakdown (%) Information Technology 35.2 AAA 5.7 Consumer Discretionary 14.8 AA 1,2 5.8 Financials 14.3 A 17.9 Consumer Staples 9.4 BBB 19, Real Estate 7.3 BB 21, Telecommunication Services 6.9 B 3, Industrials 5.1 CCC 2.0 Materials 3.4 Healthcare 2.2 Utilities 1.4 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 1-3 years 3-5 years 5-7 years 7-10 years > 10 years , USD EUR GBP Latin America Emerging Asia Eastern Europe, Middle East and Africa ,4 2, , Cumulative performance (%) Since 31/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio Emerging 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 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). 46 / Management report CARMIGNAC FOURTH QUARTER 2016

47 Quarterly gross performance contribution (%) Equity Portfolio Bond Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total Modified duration of the bond portfolio (derivatives included) Euro United States Other 3.49 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 30/12/2016 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 UNITED STATES 0.50% 31/01/2017 (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 GHANA 9.25% 15/09/2022 Dollar INDONESIA 3.38% 30/07/2025 (Indonesia) Euro POLAND 2.50% 25/07/2026 (Poland) Zloty POLAND 3.25% 25/07/2025 (Poland) Zloty RUSSIA 4.75% 27/05/2026 (Russia) Dollar THAILAND 4.88% 22/06/2029 (Thailand) Thai baht TURKEY 6.62% 17/02/2045 (Turkey) Dollar Emerging countries inflation-linked Government bonds BRAZIL I/L 6.00% 15/05/2023 (Brazil) Real Brazil 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 4.00% 08/11/2046 (Mexico) Mexican 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% 26/01/2017 (United Kingdom) Energy AFREN 6.62% 09/12/2017 (United Kingdom) Energy DNO ASA 8.75% 18/06/2017 (Norway) Energy GENEL ENERGY 7.50% 27/01/2017 (United Kingdom) Energy JP MORGAN 0.00% 03/01/2030 (Netherlands) Financials TULLOW OIL 6.00% 06/01/2017 (United Kingdom) Energy Emerging markets fixed rate corporate bonds CABLEVISION 6.50% 15/06/2019 (Argentina) Consumer Discretionary PETROBRAS GLOBAL FINANCE BV 5.38% 01/10/2029 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 5.62% 20/05/2043 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 6.62% 16/01/2034 (Brazil) Energy PETROLEOS MEXICANOS 6.50% 13/03/2027 (Mexico) Energy YPF SA 8.50% 23/03/2021 (Argentina) Energy YPF SA 8.50% 28/07/2025 (Argentina) Energy Equities North America LAS VEGAS SANDS (USA) Consumer Discretionary Asia-Pacific LINE CORP (Japan) Information Technology CARMIGNAC FOURTH QUARTER 2016 / 47

48 DIVERSIFIED MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO EMERGING PATRIMOINE AT 30/12/2016 Price in currencies Total value ( ) % of net assets Europe JERONIMO MARTINS (Portugal) Consumer Staples LILAC GROUP (United Kingdom) Consumer Discretionary Latin America BANCO SANTANDER MEXICO (Mexico) Financials BB SEGURIDADE PARTICIPACOES (Brazil) Financials CCR (Brazil) Industrials CEMEX (Mexico) Materials FEMSA UNITS ADR (Mexico) Consumer Staples GRUPO BANORTE (Mexico) Financials GRUPO MEXICO SA DE CV (Mexico) Materials MERCADOLIBRE INC (Argentina) Information Technology MEXICO REAL ESTATE MGMT (Mexico) Real Estate TRANSMISSORA ALIANCA (Brazil) Utilities WAL-MART DE MEXICO (Mexico) Consumer Staples Asia COM (China) Information Technology AIA GROUP LTD (Hong Kong) Financials ASTRA INTERNATIONAL (Indonesia) Consumer Discretionary BAIDU INC (China) Information Technology BHARTI AIRTEL LTD (India) Telecommunication Services BHARTI INFRATEL LTD (India) Telecommunication Services DALI FOODS GROUP CO LTD (China) Consumer Staples HERO MOTOCORP LTD (India) Consumer Discretionary ICICI BANK (India) Financials INFOSYS TECHNOLOGIES (India) Information Technology KANGWON LAND (South Korea) Consumer Discretionary MEDIATEK (Taiwan) Information Technology NETEASE (China) Information Technology PLDT (Philippines) Telecommunication Services SAMSUNG BIOLOGICS CO LTD (South Korea) Healthcare SAMSUNG ELECTRONICS (South Korea) Information Technology SHANGHAI INTERNATIONAL AIR-A (China) Industrials TAIWAN SEMICONDUCTOR (Taiwan) Information Technology TATA MOTORS LTD (India) Consumer Discretionary UNITED SPIRITS LTD (India) Consumer Staples ZHENGZHOU YUTONG BUS CO-A (China) Industrials Africa MTN GROUP LTD (South Africa) Telecommunication Services 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 EMLAK KONUT GAYRIMENKUL (Turkey) Real Estate ENKA INSAAT VE SANAYI (Turkey) Industrials TARO PHARMACEUTICAL INDUSTRIES (Israel) Healthcare Portfolio value Net assets / Management report CARMIGNAC FOURTH QUARTER 2016

49 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. During the fourth quarter of 2016, Carmignac Euro-Patrimoine increased by +2.39%, delivering a lower return than the reference indicator, which was up +4.92%. The Fund s full-year 2016 performance is +8.85%, versus +1.92% for the indicator was a year clearly divided into two halves. The first half was similar to the preceding years in that it was characterised by sluggish growth, with worries about the health of the economy being addressed by aggressive central bank policies. Bonds and bond proxies peaked during those first six months, whereas commodities and bank stocks troughed after years of massive underperformance, setting the stage for a second half dominated by the theme of reflation and economic recovery hopes that got amplified by Trump s electoral victory. While the Euro Stoxx 50 ended the year relatively flat, the moves underneath the surface were massive. Banks lost almost 40% at one point, only to regain 50% by year-end; commodities recorded a surge of over 100% from their January low; telcos shed over 20% from their peak. We navigated those choppy waters relatively well, with the Fund outperforming, while keeping volatility throughout the year at 6.0, versus 11.5 for the indicator. During the fourth quarter, the US elections and the Italian referendum removed the last two hurdles for the market to fully embrace the reflation trade and start the year-end rally. To accommodate the sector rotation under way, we tactically adjusted our exposure through long hedges on bank stocks and the Italian market index without making major changes to our core positions. We acknowledge the emergence of green shoots brought about by a mixture of reflation, hope for fiscal stimulus and low base effects and though we don t intend to fight the trend, we seriously question whether this is the beginning of a sustainable economic recovery. Once the initial shock and excitement about Brexit and Trump settles, it will be hard to see how a surge in populism and protectionism can lead to greater global economic growth and welfare. As always, we will stay focused on bottom-up investment cases supported by factors that do not depend on our broader world outlook. We initiated a position in Hapag Lloyd, the German container shipping line, during the fourth quarter. Since its IPO in November 2015, freight rates had been falling steadily as the industry struggled with overcapacity in a lowgrowth environment. We are now entering a phase in which a combination of reduced vessel deliveries, mounting idle capacity and rising average vessel speeds leads in effect to zero supply growth. But while the industry remains fragmented, the consolidation that we have seen in the recent past has left the top four players with a market share in excess of 45%. Moreover, Hapag is poised to benefit from the closing of the UASC merger, which is expected to create synergies of $400 million. Given Hapag-Lloyd s high financial leverage, the potential for higher freight rates is significant and we see the company in a sweet spot for We bought into the rights issue of MeyerBurger, the leading Swiss solar equipment manufacturer, at a very attractive valuation. While there is still overcapacity in the sector and the demand outlook for investments in innovative solar cell technologies such as PERC and HJT remains uncertain, the combination of a fixed balance sheet, a strong new management team and technological leadership in a market set for secular growth is compelling. We continue to see significant value in ASR, the Dutch insurer that IPOed in June of last year. It is a well-run company with a strong regulatory capital base, high free cash flows and defensive accounting that should create opportunities for future cash returns to shareholders. We consider it attractive from both an absolute and a relative value standpoint, although we would not expect its current undervaluation to fully disappear until the Dutch government has disposed of its entire 51% stake. Finally, since we wrote about Galenica in our last report, some of the catalysts we were hoping for swung into motion, prompting us to increase our position. The FDA has removed the black-box label on Veltassa, the core product of Relypsa, which Galenica bought last summer. The overhang from the stake held by KKR and Pessina through Sprint has been cleared and the shares have been placed with long-term-oriented shareholders like us. The next catalysts will be the IPO of the Galenica Santé business in spring and the continued positive news flow on their drug roll-outs and future cooperation deals. We are very excited about the company s long-term prospects. Source of data: Bloomberg, Euro Stoxx Banks, 31/12/2016 Performance of the fund since conversion /02 12/04 12/06 12/08 12/10 12/12 12/14 12/16 Carmignac Euro-Patrimoine A EUR acc 50% Euro Stoxx 50 NR (Eur) + 50% Eonia compounded. 73% 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). 45% * 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 / 49

50 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. Services Financials Technology Telecommunication Basic Materials Oil & Gas Industrials Healthcare Utilities Cons. Goods Regional Indexes Total Long positions Net equity exposure Cash (including collateral cash from derivative positions) 6,8 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 31/12/ 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). 50 / Management report CARMIGNAC FOURTH QUARTER 2016

51 HOLDINGS CARMIGNAC EURO-PATRIMOINE AT 30/12/2016 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 DAIMLER AG Consumer Goods DEUTSCHE BOERSE AG Financials FRESENIUS Healthcare HAPAG-LLOYD AG Industrials LANXESS AG Basic Materials LINDE AG Basic Materials SCHAEFFLER AG Consumer Goods SIEMENS AG Industrials ZALANDO SE Consumer Services Belgium AB INBEV SA Consumer Goods AGEAS Financials Denmark NOVO NORDISK AS Healthcare Spain PARQUES REUNIDOS SERVICIOS C Consumer Services TALGO SA Industrials Finland NOKIA OYJ Technology France CRITEO Technology DASSAULT AVIATION SA Industrials PEUGEOT Consumer Goods SFR GROUP SA Consumer Services SOPRA STERIA GROUP Technology TELEPERFORMANCE Consumer Services VIVENDI Consumer Services Ireland SMURFIT KAPPA GROUP PLC Industrials Italy ENI SPA Oil & Gas TELECOM ITALIA SPA Telecommunication Netherlands ALTICE SA Telecommunication ASR NEDERLAND Financials HEINEKEN HLDG NV Consumer Goods IMCD GROUP NV Basic Materials INTERTRUST NV Financials INTERXION Technology MYLAN INC Healthcare PHILIPS LIGHTING NV Industrials ROYAL DUTCH SHELL PLC Oil & Gas United Kingdom INFORMA PLC Consumer Services JRP GROUP PLC Financials LONDON STOCK EXCHANGE Financials MICRO FOCUS INTER. Technology SHIRE PLC Healthcare SMITHS GROUP PLC Industrials UNILEVER Consumer Goods Sweden NORDNET AB-B Financials Equities ex European Union USA CF INDUSTRIES HOLDINGS Basic Materials GRUBHUB INC Consumer Services MONSANTO CO Consumer Goods TRIPADVISOR INC Consumer Services Switzerland GALENICA AG Consumer Services MEYER BURGER TECHNOLOGY Industrials NESTLE SA Consumer Goods TEMENOS GROUP AG Technology Portfolio value Net assets DIVERSIFIED MANAGEMENT CARMIGNAC FOURTH QUARTER 2016 / 51

52 DIVERSIFIED MANAGEMENT NET EQUITY EXPOSURE CARMIGNAC EURO-PATRIMOINE AT 30/12/2016 Exposure ( ) % Exposure Long derivative positions European Union Financials (1 Position) Europe Industrials (1 Position) United Kingdom Regional Indexes (2 Positions) Europe Regional Indexes (1 Position) Italy ex European Union Consumer Services (1 Position) Switzerland Industrials (1 Position) Switzerland Telecommunication (1 Position) Switzerland Short derivative positions European Union Consumer Goods (2 Positions) Germany Consumer Goods (2 Positions) Netherlands Consumer Goods (1 Position) United Kingdom Consumer Services (2 Positions) Germany Consumer Services (1 Position) France Consumer Services (3 Positions) United Kingdom Financials (1 Position) Germany Financials (1 Position) United Kingdom Healthcare (1 Position) France Healthcare (1 Position) United Kingdom Healthcare (1 Position) Sweden Industrials (1 Position) Germany Industrials (1 Position) Spain Industrials (1 Position) Ireland Industrials (2 Positions) Sweden Oil & Gas (1 Position) Denmark Oil & Gas (1 Position) Italy Oil & Gas (2 Positions) Netherlands Oil & Gas (1 Position) United Kingdom Telecommunication (1 Position) Italy Regional Indexes (4 Positions) Europe ex European Union Healthcare (1 Position) Switzerland Industrials (2 Positions) Switzerland Regional Indexes (1 Position) USA Equity Investment Net equity exposure / Management report CARMIGNAC FOURTH QUARTER 2016

53 Frédéric Leroux Julien Chéron 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 returned +3.48% in the fourth quarter of 2016, compared with +7.81% for its reference indicator. This took performance for the full year to +1.34% for the Fund and % for the reference indicator. During the quarter, we maintained only moderate equity exposure ahead of the US elections (c. 75% on average), due to the uncertainty surrounding the outcome. But once Donald Trump won on 8th November, we raised the Fund s exposure to its maximum level a move in line with both our positive macroeconomic outlook (see Macroeconomic Analysis) and the upbeat market sentiment, as the victor s commitment to a stimulus programme created a surge of investor confidence. Our additional derivatives positions contributed significantly to performance, accounting for 60% of the Fund s gains over the quarter. In the climate of uncertainty leading up to the US elections, we initiated short positions on Brazilian and UK equity indices to benefit from the greater vulnerability of our emerging market and commodity themes. Later in the fourth quarter, after Italy s constitutional referendum, our strategies favouring recovery in the banking sector and a rebound in its equity markets also paid off. And at year-end, our portfolio got a boost from our strategy designed to take advantage of lower volatility. Volatility was in fact subdued during the transition phase between Obama s and Trump s terms of office, which produced very little in the way of new developments for the market. We also succeeded in keeping volatility lower than the market index. The Fund s twelve-month volatility was 9.91%, versus 15.90% for the reference indicator and 11.95% for Carmignac Investissement, the master fund. As this new year gets under way, our outlook remains centred on the continuation of global growth strong enough to sustain equity markets. After hitting a low last October, US consumer confidence shot up in response to the election of a presidential candidate promising fiscal stimulus and tax cuts. The Federal Reserve will most likely hold fire for now. On the one hand, rising inflation will strengthen the case for a less dovish monetary policy. On the other hand, the persistently high level of national debt will prevent the Fed from normalising its policy too aggressively. This leads us to believe that the business cycle has moved back to centre stage, after playing a minor role in this recent period dominated by monetary policy. Equity investors are hoping, of course, that higher prices won t drive interest rates up excessively. But that risk is tempered by the Fed s current stance which is particularly hesitant given that no one knows just now how the Trump administration s stimulus programme will play out. In Europe, lowered risk of a rise in bond yields, coupled with direct support from the European Central Bank, has buoyed sentiment. Moreover, industrial production and orders for durable goods in Germany show the kind of upward momentum that may well clear the ground for welcome surprises. The emerging market space is still exposed to the risk of capital flight from China, but the cyclical upswing under way should work in the near term to their advantage. More broadly speaking, while political risk remains an issue, it will likely take a back seat to the economic upturn. In an international environment marked by a widespread shift to growth-oriented fiscal policies and a revival of inflation two crucially important developments for our investment decisions we believe that the business cycle will be the key variable to watch in the coming quarters. Performance of the fund since its launch % 107% 50 01/05 01/06 01/07 01/08 01/09 01/10 01/11 01/12 01/13 01/14 01/15 01/16 12/16 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. Management report DIVERSIFIED MANAGEMENT / 53

54 DIVERSIFIED MANAGEMENT Net currency exposure of the fund (%) USD 6,8 EUR 27.1 JPY -0.1 GBP 0.2 CHF 1.6 AUD and CAD 2.6 Latin America , Statistics (%) 1 year 3 years Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Emerging Asia Other 1.0 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 31/12/ 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). 54 / Management report CARMIGNAC FOURTH QUARTER 2016

55 Carmignac Profil Réactif 100 A EUR acc Carmignac Profil Réactif 75 A EUR acc Carmignac Profil Réactif 50 A EUR acc Frédéric Leroux 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. In the fourth quarter of 2016, Carmignac Profil Réactif 100 gained % (versus +7.81% for its reference indicator); Carmignac Profil Réactif 75 was up +9.24% (versus +5.22%); and Carmignac Profil Réactif 50 returned +7.66% (versus +2.64%). Ranked from the most to the least aggressive funds in the range, our three Profil Réactif funds posted full-year increases of respectively %, +8.65% and +7.80%, compared with %, +9.62% and +8.05% for their reference indices. All three were rated in the top decile of their Morningstar categories. In our previous quarterly report, we indicated our expectation of a stronger global economy, while stressing that a combination of considerable imbalances and lacklustre growth frustrate[d] public opinion and fuel[led] criticism of the elite and the establishment, potentially recreating the political conditions for a return of stimulus plans in developed countries. That forecast materialised and strikingly so with the election of Donald Trump, whose pledge to boost government spending immediately lifted stock markets. As far back as September, we began raising the equity exposures of our three Profil Réactif funds in light of the improved economic outlook, and we rapidly increased these exposures to their maximum levels following the US elections. Their average market exposures in the fourth quarter were 94% for Carmignac Profil Réactif 100, 70% for Carmignac Profil Réactif 75 and 46% for Carmignac Profil Réactif 50. These funds of funds also managed to achieve lower volatility than the market. Twelve-month volatility stood at 10.81% for Carmignac Profil Réactif 100 (versus 15.90% for its reference indicator), 8.42% for Carmignac Profil Réactif 75 (versus 12.07%) and 6.57% for Carmignac Profil Réactif 50 (versus 8.67%). Additional derivatives contributed quite significantly to our quarterly performance, accounting for more than 85% of the gains recorded by all three funds. Further support came from our positions in cyclical sectors, for example positions that would link our funds returns to an appreciation in the dollar and a depreciation in the yen, to a rise in ten-year bond yields and to a drop in equity index volatility. At the same time, we benefited from our investments in the Carmignac fixed income funds, whose low or negative modified durations enabled them to outperform their benchmarks. The entire underlying range of equity and diversified funds also made a positive contribution to the Profil Réactif funds gains in the period. The only noteworthy exceptions were our three emerging market funds (Carmignac Emergents, Carmignac Portfolio Emerging Discovery, Carmignac Portfolio Emerging Patrimoine), which lost ground in the fourth quarter. However, our equity funds disappointingly underperformed their benchmarks due to overly conservative positioning at the start of the quarter. Our funds of funds are entering this first quarter of 2017 with lowered risk and minimal exposure to the US dollar. After the strong stock market surge of the past few months, a technical correction looks likely to us, and therefore warrants taking profits in the short term. Going forward, we believe that equities will benefit from the cyclical turnaround currently supported by renewed inflation. Global economic growth is on track to pick up steam, as we argue in our Macroeconomic Analysis. Sectors and economies that are sensitive to the business cycle should continue to outperform less sensitive sectors provided that interest rates don t rise to the point of jeopardising the cyclical upswing we expect to encompass more regions in the months to come. Our holdings should therefore do well in this first part of Early this year, we introduced quantitative allocation methods into the investment process for our Profil Réactif funds. We view this as a good way to optimise the risk-return trade-off for the underlying portfolio. At the same time, we set tight risk limits for our derivatives strategies. * 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 / 55

56 PROFILED MANAGEMENT Asset allocation (%) CPR 100 A EUR acc CPR 75 A EUR acc CPR 50 A EUR acc Carmignac Investissement A EUR acc Carmignac Euro-Entrepreneurs A EUR acc Carmignac Portfolio Grande Europe A EUR acc Carmignac Emergents A EUR acc Carmignac Portfolio China A EUR acc Carmignac Portfolio Commodities A EUR acc Carmignac Portfolio Emerging Discovery A EUR acc Carmignac Euro-Patrimoine A EUR acc Carmignac Patrimoine A EUR acc Carmignac Portfolio Emerging Patrimoine A EUR acc Carmignac Portfolio Investissement Latitude A EUR acc Carmignac Portfolio Capital Plus A EUR acc Carmignac Portfolio Global Bond A EUR acc Carmignac Securité 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 61.1 USD 67.9 USD 34.0 EUR 26.0 EUR 25.1 EUR 61.0 JPY -3.9 JPY -3.9 JPY -2.9 GBP 0.6 GBP 0.1 GBP -0.2 CHF 2.6 CHF 2.0 CHF 1.5 AUD and CAD 2.8 AUD and CAD 2.1 AUD and CAD 1.3 Latin America 7.1 Latin America 6.1 Latin America 5.2 Emerging Asia Eastern Europe, Middle East and Africa Other Emerging Asia Eastern Europe, Middle East and Africa Other Emerging Asia Eastern Europe, Middle East and Africa Other CARMIGNAC PROFIL RÉACTIF 100 Cumulative performance (%) Since 31/12/ 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 Fund volatility Benchmark volatility Sharpe ratio Beta Alpha Calculation period: weekly (1 year) and monthly (3 years). Quarterly gross performance contribution (%) Equity Derivatives Bond Derivatives Currency Derivatives Mutual Fund Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Total Performance of the fund since its launch % % /02 01/04 01/06 01/08 01/10 01/12 01/14 01/16 12/16 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). 56 / Management report CARMIGNAC FOURTH QUARTER 2016

57 CARMIGNAC PROFIL RÉACTIF 75 Cumulative performance (%) Since 31/12/ 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 Bond Derivatives Currency Derivatives Mutual Fund Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Total Performance of the fund since its launch % /99 06/01 06/03 06/05 06/07 06/09 06/11 06/13 06/1512/16 119% 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 31/12/ 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 Bond Derivatives Currency Derivatives Mutual Fund Value at Risk (%) Fund Reference indicator 99% - 20 days (2 years) Total Performance of the fund since its launch % 80% 75 01/02 01/04 01/06 01/08 01/10 01/12 01/14 01/16 12/16 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 FOURTH QUARTER 2016 / 57

58 Charles Zerah International fixed income fund that implements interest rate, credit and currency strategies across the globe with a total return approach. 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. In the fourth quarter of 2016, Carmignac Portfolio Global Bond posted gains of +1.73%, while its reference indicator decreased by 2.30%. This performance takes the full-year Fund s gain to +9.46%, whereas its reference indicator was up by only +4.60%. Higher prices for the corporate bonds in our portfolio enhanced by the appreciation of the US dollar against the euro worked to the Fund s advantage. At the same time, our cautious approach over the past quarter to the Fund s modified duration and currency allocation helped us generate the substantial outperformance we recorded and protect the Fund s performance through hedges against rising US long-term interest rates. Fixed income component In our previous report, we shared our concerns about weak bond yields and our uncertainty about how the elections in the US and Europe would play out. Those concerns led us to keep the Fund s modified duration mainly to between 0 and 2 during the period. Carmignac Portfolio Global Bond has held up quite well amid the major upward pressure on developed country sovereign bond yields, despite Donald Trump s victory (which took us by surprise). For several months, we had felt that due to a combination of historically low absolute yields, a likely pick-up in inflation (admittedly from an extremely low level) and political risks in the US and Europe, the bond markets in those geographies had little to offer us. As a result, the Fund s modified duration was less than 1 just prior to the US elections. That made it easier for us to weather turbulences. We intend to maintain our cautious approach to bond markets, particularly since Mr Trump s victory has vindicated our macroeconomic outlook (see our Macroeconomic Analysis). The cyclical upturn in both the US and China since the second quarter of 2016 has seriously rattled fixed 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 12/16 Carmignac Portfolio Global Bond A EUR acc JP Morgan GBI Global (EUR) (accrued interest) ---- Carmignac Portfolio 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 50% 40% Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). income markets. In the fourth quarter alone, yields on 10-year US Treasuries rose from 1.59% to 2.44%. In continental Europe as well, a return to growth is becoming increasingly discernible, resulting in a growing inflation, driven in part by higher commodity prices, a lower unemployment and an improving business confidence. In response to those encouraging signs, the European Central Bank announced it would be scaling back its sovereign bond purchases as of the second quarter of 2017 (from 80 to 60 billion per month). Yet for now the ECB has extended its programme until the end of the year, judging that the many elections scheduled to take place this year could well undermine the economic recovery under way. We will therefore be maintaining the low-duration strategy we deployed in the fourth quarter, while holding enough cash to be able to seize any attractive buy opportunities that come along. At the end of the fourth quarter, we shifted some cash into Italian and Polish government bonds, which had been battered by recent trends with spreads widening to 70 basis points. We should also continue to short futures contracts on US and German long-term government bonds in order to hedge against a faster-than-anticipated increase in inflation expectations. But even as we are limiting our holdings of developed country government paper, we are maintaining our exposure to emerging market sovereign debt, an asset class that has been buoyed by improved economic fundamentals (see Carmignac Portfolio Emerging Patrimoine report). In summary, we remain cautious on developed country government bonds. Not only are yields at low levels, the threatening upcoming elections in Europe entail non-negligible political risks and inflation is on the way back up. Credit component As previously, our holdings in this asset class in the fourth quarter consisted of energy sector bonds, bank bonds and structured credit products. All three contributed to the Fund s positive performance during the period despite rising sovereign debt yields. The subordinated bank bonds in the portfolio notched up further gains due to steeper European sovereign bond yield curves, which should help lift the issuing banks profit margins. Moreover, the new strategic plan presented by UniCredit, the Italian bank, supports our belief that the long-term trend at leading European banks will be to deleverage and increase their CET1 ratios. At the same time, the relative strength of oil prices has pushed up the value of our energy sector bonds. Our global macroeconomic outlook points to maintaining our exposure to these two market segments, both of which stand to benefit from greater inflation and probable upward pressure on yields. Paper issued by banks and oil companies and European CLOs remain the primary investment themes in our credit portfolio, accounting for roughly 20% of the Fund s assets. Currency component At the beginning of the fourth quarter, our currency risk related mainly to our euro exposure, and only moderately to our dollar and yen exposure. However, the Fund * 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. 58 / Management report FIXED INCOME MANAGEMENT

59 took advantage of the rise of the dollar against the euro. After the Federal Reserve hiked its benchmark interest rate by 25 basis points on 14 December, we decided at year-end to keep our exposure to the dollar in the vicinity of 30%. We believe that the risk of inflation and faster economic growth in the event that Donald Trump actually delivers on his campaign promises could lead to more aggressive monetary tightening in the United States. Moreover, spreads between short- and medium-term German and US government bonds (2 and 10-year issues) reached new highs at the end of the quarter (c. 195 and 224 basis points, respectively), further fuelling the appreciation of the greenback. Finally, given the Bank of Japan s QE policy that should remain in place, we intend to avoid the Japanese currency. Bond portfolio (derivatives excluded) - Rating breakdown (%) To conclude, Carmignac Portfolio Global Bond is maintaining a cautious approach to developed country government bonds, as well as a diversified allocation to emerging market sovereigns and to corporate bonds. With inflation now gaining traction in the US and Europe and political risk on the rise in continental Europe, the Fund s modified duration is bound to remain low. We will also continue with our prudent approach to currency allocation. Source of data: Bloomberg, 30/12/2016 Net currency exposure of Euro share classes (%) FIXED INCOME MANAGEMENT AAA 46.6 USD 27.1 AA 2.0 EUR 24, A 9.0 GBP 0.3 BBB 11.8 CHF 5.0 BB 19.9 Latin America 5.1 B 9.0 Eastern Europe, Middle East and Africa 5.0 CCC 1.8 Sector breakdown (derivatives excluded) (%) Bond portfolio (derivatives excluded) - Maturity breakdown (%) Financials 64.3 < 1 year 47,1 Energy 19, years 5,3 3-5 years 3,3 5-7 years 4, years 1,6 21,5 > 10 years 18,1 Modified duration of the bond portfolio (derivatives included) Euro 0.37 United States 0.17 Other 1.14 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 31/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio 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 FOURTH QUARTER 2016 / 59

60 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO GLOBAL BOND AT 30/12/2016 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) Fixed income investments Developed countries fixed rate Government bonds GREECE 4.75% 17/04/2019 (Greece) Euro UNITED STATES 0.50% 28/02/2017 (USA) Dollar UNITED STATES 0.50% 31/01/2017 (USA) Dollar UNITED STATES 0.50% 31/03/2017 (USA) Dollar UNITED STATES 0.75% 15/01/2017 (USA) Dollar UNITED STATES 1.00% 31/03/2017 (USA) Dollar Developed countries inflation-linked Government bonds ITALY I/L 2.35% 15/09/2024 (Italy) Euro ITALY I/L 3.10% 15/09/2026 (Italy) Euro USA I/L 0.62% 15/01/2026 (USA) Dollar Emerging countries inflation-linked Government bonds BRAZIL I/L 6.00% 15/08/2050 (Brazil) Real Brazil MEXICO I/L 4.00% 08/11/2046 (Mexico) Mexican peso MEXICO I/L 4.50% 04/12/2025 (Mexico) Mexican peso 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 INDONESIA 2.62% 14/06/2023 (Indonesia) Euro POLAND 2.50% 25/07/2026 (Poland) Zloty QATAR 4.62% 02/06/2046 (Qatar) Dollar RUSSIA 4.75% 27/05/2026 (Russia) Dollar SAUDI ARABIA 2.38% 26/10/2021 (Saudi Arabia) Dollar Developed countries fixed rate corporate bonds BBVA 7.00% 19/02/2019 (Spain) Financials (subordinated debt) COMMONWEALTH BANK 2.00% 22/04/2022 (Australia) Financials (subordinated debt) CREDIT SUISSE 6.25% 18/12/2024 (Switzerland) Financials (subordinated debt) CYBG PLC 8.00% 08/12/2022 (United Kingdom) Financials (subordinated debt) DNO ASA 8.75% 18/06/2017 (Norway) Energy GENEL ENERGY 7.50% 27/01/2017 (United Kingdom) Energy ING GROEP NV 6.50% 16/04/2025 (Netherlands) Financials (subordinated debt) LOCK AS 7.00% 15/08/2017 (Norway) Financials ROYAL BANK OF SCOTLAND 10.50% 16/03/2017 (United Kingdom) Financials (subordinated debt) SANTANDER 6.25% 12/03/2019 (Spain) Financials (subordinated debt) SANTANDER 6.38% 19/05/2019 (Spain) Financials (subordinated debt) SOCIETE GENERALE 7.88% 18/12/2023 (France) Financials (subordinated debt) UNICREDIT 8.00% 03/06/2024 (Italy) Financials (subordinated debt) UNICREDIT 9.25% 03/06/2022 (Italy) Financials (subordinated debt) UNIPOLSAI SPA 5.75% 18/06/2024 (Italy) Financials (subordinated debt) Emerging markets fixed rate corporate bonds PETROBRAS ARGENTINA SA 7.38% 21/07/2020 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 5.62% 20/05/2043 (Brazil) Energy PETROBRAS GLOBAL FINANCE BV 6.62% 16/01/2034 (Brazil) Energy PETROLEOS MEXICANOS 6.50% 13/03/2027 (Mexico) Energy YPF SA 8.50% 23/03/2021 (Argentina) Energy Developed countries convertible corporate bonds BANK OF NEW YORK MELLON 4.19% 15/12/2050 (Luxembourg) 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) CSAM, CADOGAN SQUARE CLO VI (Europe) CLO (BB tranche) CVC CREDIT PARTNERS, CVC CORDATUS VI (Europe) CLO (BB tranche) PRAMERICA, DRYDEN 46 EURO CLO (Europe) CLO (BB tranche) ALCENTRA, JUBILEE CLO 2015-XV (Europe) CLO (BB tranche) BAIN CREDIT, NEWHAVEN II CLO (Europe) CLO (B tranche) OAK HILL ADVISORS, OAK HILL ECP III (Europe) CLO (BB tranche) BLACKSTONE/GSO, ORWELL PARK (Europe) CLO (BB tranche) PARTNERS GROUP, PENTA CLO 2 (Europe) CLO (BB tranche) BAIN CREDIT, RYE HARBOUR CLO (Europe) CLO (BB tranche) CHENAVARI, TORO EUROPEAN CLO 1 (Europe) CLO (BB tranche) TIKEHAU CAPITAL, TIKEHAU CLO II (Europe) CLO (BB tranche) Portfolio value Net assets / Management report CARMIGNAC FOURTH QUARTER 2016

61 Carlos Galvis Multi-asset and multi-strategy fund. Its investment philosophy focuses on generating performance while aiming to maintain ex-ante volatility below 6% on an annual basis, in all market conditions. In the fourth quarter, Carmignac Portfolio Capital Cube increased by +1.04%, while its benchmark was down -0.09%, bringing the 2016 performance to +2.09% for the Fund, while the EONIA (compounded) decreased by -0.32%. Over Q4, financial markets were dominated by the US election results. After an unexpected Donald Trump victory, equities rallied, bonds sold off and the dollar strengthened. The FOMC increased rates at its December meeting, but surprised the markets with upward revision on the path of interest rates for the next two years. As a result, the dollar continued to rise, while the front-end of the US curve fully repriced the new Fed dots projections and caused the yield curve to flatten considerably. In Japan, the BoJ kept policy unchanged, while economic data continued to improve steadily. In Europe, the ECB kept the deposit facility rate at -0.40% but extended the APP until December 2017 with a lower monthly pace of 60 billion per month. With this background, EM assets underperformed as a stronger dollar and higher rates weighed on EM equities and currencies performance (source : ECB, 08/12/2016). Going into 2017, the global economy should be supported by monetary policy accommodation in Europe and Japan, while fiscal expansion in the US is expected to boost nominal economic growth over the next few years. In this context, acceleration in economic activity is likely to be more global in this new year as well, as higher inflation prints will likely confirm a genuine cyclical economic recovery. As a result, the equity sector rotation seen over the second half of 2016, with strong outperformance by high cyclical sectors relative to more defensive sectors, should continue. Additionally, the persistent sell-off in bond markets and well-supported equity markets seen over Q4 should stabilise in the first part of the year, while the next leg for higher rates and higher equity valuations should be a function of fiscal spending implementation and higher nominal GDP growth. However, the risks are on the downside, as political risks in Europe persist and policy uncertainty on the new US President may strongly jitter markets. With this background, the portfolio should continue to favour equity markets over bond markets and to remain long US dollar, particularly against Asian currencies. Our rate strategy made a negative contribution of -0.08% over the quarter. Fixed income markets saw greater volatility as the US 10 year yield increased by roughly 1%, marking one of the worst quarters for US Treasuries in the last twenty years. Inflation expectations shot up as higher oil prices and improved growth expectations weighed significantly on long duration positions in global bond portfolios. Treasuries underperformed Bunds as policy divergence between the ECB and the Fed became more pronounced. Furthermore, the yield curve steepened first and then flattened as the front-end quickly priced in a more aggressive Fed after the December meeting. In this context, the Fund suffered from its long exposure to US Treasuries, but benefited from its short modified duration to German yields. Going forward, markets are likely to become less dependent on Central banks but highly sensitive to the economic cycle. Given our central scenario of continuing strong US growth, we will be favouring a short bias strategy, but likely to express more via European sovereign bonds relative to US Treasuries. Our FX strategy contributed positively with +0.37% of performance. As rates in the US spiked relative to those in Japan and Europe, the dollar index strongly outperformed mainly against those two other major currencies. At the same time, the steady CNH devaluation weighed also on the poor performance of Asian currencies particularly the KRW. The Fund benefited from its long dollar positions against a basket of Asian currencies including the CNH and the KRW. The relative value strategy long CAD vs PLN supported the Fund s performance. Going forward, the dollar s upward trend should continue, particularly against Asian currencies. At the same time, the higher premiums on LATAM FX like MXN and BRL should come down as rates stabilise in the US. The portfolio will remain long USD against Asian currencies while favouring LATAM currencies within the EM space. Performance of the fund since its launch /15 12/15 02/16 04/16 06/16 08/16 10/16 12/16 Carmignac Portfolio Capital Cube A EUR acc Eonia compounded Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 2% 0% * 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 / 61

62 FIXED INCOME MANAGEMENT Our equity strategy made a positive contribution of +0.74% to performance. Global equities continued to perform well as the global recovery showed further, clear signs of picking up. Outperformance by high beta sectors pushed indices to new highs despite higher rising yields. And though we are still far from reaching the threshold for the level of real interest rates to start hurting equity valuations, the next leg up on equity markets should reflect higher nominal GDP and fiscal stimulus, which is likely to be delivered as expected. The risks around this scenario are on the downside, given that there may well be grounds for disappointment at the fiscal policy implementation stage. However, the portfolio should continue to favour equities over bonds. Our credit strategy had a flat contribution to performance (+0.01%). Credit continued to do very well, driven by the general risk-on environment. Rising rates in the US did not generate any panic-selling amongst credit investors, and relatively weak fundamentals are trumped by positive technical factors. Most of European credit will continue to be distorted by Central banks in the short-term and offers little value apart from a few instruments not eligible for the ECB purchase program, such as CLOs, subordinated bank credit and idiosyncratic opportunities in the high-yield space. Our credit risk is very limited to be able in order to be in a better position to seize opportunities in the next wave of volatility. Bond portfolio (derivatives excluded) - Rating breakdown (%) Net currency exposure of Euro share classes (%) AAA 41.0 USD 0.4 A 1, EUR 91.9 BBB 8, JPY -1.4 BB 3,1 7.3 GBP 1.6 B 4.4 CHF 3.2 Eastern Europe, Middle East and Africa -0.1 Other 4.4 Bond portfolio (derivatives excluded) - Maturity breakdown (%) Sector breakdown (derivatives excluded) (%) < 1 year 1-3 years 7-10 years , Financials Energy Consumer Discretionary > 10 years 3.7 Quarterly gross performance contribution (%) Value at Risk (%) Fund Bond Portfolio Equity Derivatives Bond Derivatives Currency Derivatives Total % - 20 days (2 years) 0.51 Cumulative performance (%) Since 31/12/ months 6 months 1 year 3 years 5 years 10 years Since the first NAV Carmignac Portfolio Capital Cube A EUR acc Eonia compounded Category average* Ranking (quartile) * Alt - Multistrategy. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). 62 / Management report CARMIGNAC FOURTH QUARTER 2016

63 Statistics (%) 1 year 3 years Fund volatility 2.94 Benchmark volatility 0.01 Sharpe ratio 1.06 Beta NS Alpha NS Calculation period: weekly (1 year) and monthly (3 years). Modified duration of the bond portfolio (derivatives included) Euro 0.24 United-States Other 0.26 Equity exposure rate (%) : 3.96 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC PORTFOLIO CAPITAL CUBE AT 30/12/2016 Interest Rates Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) GREECE 13/01/2017 Treasury bill in Euro ITALY 12/05/2017 Treasury bill in Euro ITALY 14/06/2017 Treasury bill in Euro ITALY 31/03/2017 Treasury bill in Euro ITALY 31/05/2017 Treasury bill in Euro PORTUGAL 17/03/2017 Treasury bill in Euro PORTUGAL 19/05/2017 Treasury bill in Euro PORTUGAL 20/01/2017 Treasury bill in Euro SPAIN 12/05/2017 Treasury bill in Euro SPAIN 16/06/2017 Treasury bill in Euro Fixed income investments Emerging markets fixed rate Government bonds POLAND 3.25% 25/07/2025 (Poland) Zloty MEXICO 4.50% 04/12/2025 (Mexico) Mexican peso Developed countries fixed rate corporate bonds CABLE COMMUNICATIONS SYSTEMS 5.00% 15/10/2019 (Netherlands) Consumer Discretionary ENI SPA 4.88% 11/10/2017 (Italy) Energy INTESA SAN PAOLO 4.75% 15/06/2017 (Italy) Financials Asset Backed Securities BAIN CREDIT, NEWHAVEN II CLO (Europe) CLO (AAA tranche) BAIN CREDIT, NEWHAVEN II CLO (Europe) CLO (B tranche) OAK HILL ADVISORS, OAK HILL ECP IV (Europe) CLO (AAA tranche) INVESCO, RISERVA CLO (USA) CLO (AAA tranche) TIKEHAU CAPITAL, TIKEHAU CLO (Europe) CLO (BB tranche) BLACKSTONE/GSO, TYMON PARK (Europe) CLO (AAA tranche) Portfolio value Net assets CARMIGNAC FOURTH QUARTER 2016 / 63

64 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 fourth quarter of 2016, Carmignac Sécurité increased by +0.19%, while its benchmark declined by -0.03%, bringing the full year performance for the Fund to +2.07% versus the benchmark s +0.30%. Quarterly and Annual Performance Review Our fourth-quarter performance was driven by our hedges against rising interest rates, as well as gains in our consumer discretionary and financial high-yield credit. The steady move higher in global PMIs and market-priced inflation expectations pushed nominal yields up in Europe and the US. This cyclically driven re-pricing was accelerated by the surprise Republican sweep in the November US elections, with high hopes of a business-friendly policy shift across fiscal, regulatory and trade matters. Our portfolio construction was ideal for the recent quarter when the German yield curve steepened by +40bps between the 10-year and 2-year maturities, combining an overall duration exposure that is net negative with a bias for a bear steepening of curves. Bond picking also supported our performance, with our subordinated bank exposure returning +3.4% during the quarter, while the high yield index average return was +1.8% (Source: Bloomberg, Merrill Lynch 31/12/2016). Our annual performance was driven by flexibly navigating 2016 s dramatic twists and turns in both the corporate credit and government bond markets. On the credit side, tactical hedges protected the portfolio from the Chinese outflow-driven and the Brexit-driven high-yield market panics when spreads rose by +180bp and +140bp, respectively (Source: Bloomberg, 31/12/2016). We opportunistically added fallen-angel commodity credit during the first quarter s overly-discounted Performance of the fund since its launch % % /89 01/91 01/93 01/95 01/97 01/99 (1) 01/01 01/03 01/05 01/07 01/09 01/11 01/13 01/15 12/16 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 material and energy default cycle. On the rate side, we timely pivoted from overweight long-maturity government bonds benefiting from the strong first-half rally to being net short long-maturity government bonds during the summer benefiting from the strong second half sell-off. Although impossible to foresee the timing, we are confident that the unique combination of risk premia suppression by central banks, deteriorating liquidity and inflows into non-fundamentally driven index funds and volatility-sensitive investment strategies will continue to produce opportunities for the discerning longterm value investor as political shocks, inflation surprises and default cycles inevitably disrupt comatose markets. Investment Strategy With risk-free bond yields negative out to eight years, short maturity Eurozone fixed income is severely challenged. Nowhere is this upside-down world of return free risk more extreme than in Germany, where a shocking 66% of the sovereign bond market trades with a negative yield. Although subject to an attendant higher level of volatility, we are convinced that a flexible and opportunistic-based strategy with an active risk management is essential to outperform and protect the purchasing power of our clients assets 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, 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. Total financial credit is around 22% of the fund, including 0.8% in Additional Tier 1 securities of low risk retail focused banks that we feel the market continues to undervalue. The ECB s suppression of risk premia across Eurozone non-bank investment grade credit market ought to force investor rebalancing into our favourite bank themes. Secondly, the alignment of the economic and political cycles justifies limited exposure to spread product, that is, a cyclical upturn in inflation could hurt rates, while an adverse outcome to any of the upcoming European elections could hurt spreads. Our exposure to European Collateralised Loan Obligations is around 7%, mostly in AAA tranches. This remains a broken asset class, where regulatory constraints and crisis scars allow us to benefit from very attractive spread levels considering * 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. 64 / Management report FIXED INCOME MANAGEMENT

65 the near complete absence of historical defaults. Our total allocation to non-european corporate credit geographic risk is 11%. Our allocation to non-euro denominated corporate credit risk is around 3.5%, but 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 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. Despite a partial retracement of the first half s bond rally, we continue to reduce our overall duration risk. US and EU inflation is likely to rise faster than consensus expectations, possibly accelerated by protectionist and fiscally loose policy. We ended the quarter with a modified duration close to -0.3 and a cash balance of around 31%. The average yield on the portfolio is +0.22% with an average maturity of 1.7 years. By way of comparison, our reference indicator has a negative average yield of -0.45%. FIXED INCOME MANAGEMENT Sector breakdown (derivatives excluded) (%) Bond portfolio (derivatives excluded) - Rating breakdown (%) Financials 46.4 AAA 7.7 Consumer Discretionary 16.2 AA 5.7 Healthcare 6.7 A 30.7 Industrials 6.5 BBB 8, Consumer Staples 5.9 BB 4.9 Energy 5.1 B 3.7 Telecommunication Services 3.3 CC 0.0 Materials 3.2 Real Estate 3.0 Utilities 1.9 Information Technology 1.7 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 > 10 years , Cumulative performance (%) Since 31/12/ 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). CARMIGNAC FOURTH QUARTER 2016 / 65

66 FIXED INCOME MANAGEMENT Quarterly gross performance contribution (%) Bond Portfolio Bond Derivatives Currency Derivatives Total HOLDINGS CARMIGNAC SÉCURITÉ AT 30/12/2016 Modified duration of the bond portfolio (derivatives included) Euro -0,45 United-States 0,02 Other 0,01 Price in currencies Total value ( ) % of net assets Cash, cash equivalents and derivatives operations Cash (including collateral cash from derivative positions) ITALY 12/05/2017 Treasury bill in Euro ITALY 13/01/2017 Treasury bill in Euro ITALY 13/04/2017 Treasury bill in Euro ITALY 14/02/2017 Treasury bill in Euro ITALY 14/03/2017 Treasury bill in Euro ITALY 14/07/2017 Treasury bill in Euro ITALY 14/09/2017 Treasury bill in Euro ITALY 31/05/2017 Treasury bill in Euro PORTUGAL 17/03/2017 Treasury bill in Euro PORTUGAL 19/05/2017 Treasury bill in Euro PORTUGAL 20/01/2017 Treasury bill in Euro SPAIN 12/05/2017 Treasury bill in Euro SPAIN 15/09/2017 Treasury bill in Euro SPAIN 16/06/2017 Treasury bill in Euro SPAIN 20/01/2017 Treasury bill in Euro ELECTRICITE DE FRANCE 05/05/2017 Commercial paper in Euro VOLKSWAGEN 03/11/2017 Commercial paper in Euro Fixed income investments Developed countries fixed rate Government bonds GREECE 3.38% 17/07/2017 (Greece) Euro GREECE 4.75% 17/04/2019 (Greece) Euro ITALY 1.15% 15/05/2017 (Italy) Euro ITALY 3.50% 01/12/2018 (Italy) Euro ITALY 4.00% 01/02/2017 (Italy) Euro ITALY 4.25% 01/02/2019 (Italy) Euro ITALY 4.25% 01/09/2019 (Italy) Euro SPAIN 0.25% 30/04/2018 (Spain) Euro SPAIN 2.75% 30/04/2019 (Spain) Euro SPAIN 3.80% 31/01/2017 (Spain) Euro SPAIN 4.12% 17/03/2017 (Spain) Euro SPAIN 4.50% 31/01/2018 (Spain) Euro Emerging markets fixed rate Government bonds ARGENTINA 7.00% 17/04/2017 (Argentina) Dollar BRAZIL 4.12% 15/09/2017 (Brazil) Euro Developed countries fixed rate corporate bonds AIB MORTGAGE BANK 4.88% 29/06/2017 (Ireland) Financials 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 (Sweden) Real Estate ALLIED IRISH 2.75% 16/04/2019 (Ireland) Financials ALSTRIA OFFICE REIT-AG 2.12% 12/01/2023 (Germany) Real Estate ALTICE SA 6.25% 15/02/2020 (Netherlands) Consumer Discretionary ALTICE SA 6.62% 15/02/2018 (Netherlands) Consumer Discretionary (Dollar) ALTICE SA 7.25% 15/05/2017 (Netherlands) 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 2.00% 16/12/2019 (Belgium) Consumer Staples AP MOELLER-MAERSK A/S 4.38% 24/11/2017 (Denmark) Industrials ARGENTA SPAARBANK 3.88% 24/05/2021 (Belgium) Financials (subordinated debt) ATOS 2.38% 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 AUTOSTRADE PER L'ITALIA 3.62% 30/11/2018 (Italy) Industrials AVIVA PLC 0.10% 13/12/2018 (United Kingdom) Financials BANK OF AMERICA 1.88% 10/01/2019 (USA) Financials BANK OF AMERICA 4.62% 07/02/2017 (USA) Financials (subordinated debt) BANK OF AMERICA 4.62% 07/08/2017 (USA) Financials BANK OF AMERICA 4.62% 14/09/2018 (USA) Financials (subordinated debt) BANK OF AMERICA 4.75% 03/04/2017 (USA) Financials BANK OF IRELAND 2.00% 08/05/2017 (Ireland) Financials BANKIA 3.50% 17/01/2019 (Spain) Financials BANKIA 4.00% 22/05/2019 (Spain) Financials (subordinated debt) BASF SE 1.50% 01/10/2018 (Germany) Materials BAYER AG 1.12% 24/10/2017 (Germany) Healthcare BBVA 2.38% 22/01/2019 (Spain) Financials BBVA 7.00% 19/02/2019 (Spain) Financials (subordinated debt) BBVA 8.88% 14/04/2021 (Spain) Financials (subordinated debt) BG ENERGY CAPITAL 3.00% 16/11/2018 (United Kingdom) Energy / Management report CARMIGNAC FOURTH QUARTER 2016

67 HOLDINGS CARMIGNAC SÉCURITÉ AT 30/12/2016 Price in currencies Total value ( ) % of net assets BG ENERGY CAPITAL 6.50% 30/11/2017 (United Kingdom) Energy (subordinated debt) BHP BILLITON 2.12% 29/11/2018 (Australia) Materials BHP BILLITON 5,624% 22/10/2024 (Australia) Materials (subordinated debt) BMW FINANCE NV 0.12% 15/04/2020 (Netherlands) Consumer Discretionary BMW FINANCE NV 3.25% 14/01/2019 (Netherlands) Consumer Discretionary BNP PARIBAS 5.43% 07/09/2017 (France) Financials (subordinated debt) BOUYGUES 3.64% 29/10/2019 (France) Industrials BOUYGUES 4.00% 12/02/2018 (France) Industrials BRITISH TELECOMMUNICATIONS 1.12% 10/06/2019 (United Kingdom) Telecommunication Services BUREAU VERITAS 3.12% 21/10/2020 (France) Industrials BUREAU VERITAS 3.75% 24/05/2017 (France) Industrials CARLSBERG BREWERIES 2.62% 03/07/2019 (Denmark) Consumer Staples CARLSBERG BREWERIES 3.38% 13/10/2017 (Denmark) Consumer Staples CHRISTIAN DIOR 0.75% 24/03/2021 (France) Consumer Discretionary CHRISTIAN DIOR 1.38% 19/03/2019 (France) Consumer Discretionary CIBA SPECIAL CHEMICALS 4.88% 20/06/2018 (Luxembourg) Materials CITIGROUP INC 5.00% 02/08/2019 (USA) Financials CITIGROUP INC 7.38% 04/09/2019 (USA) Financials COCA-COLA 2.00% 05/09/2019 (USA) Consumer Staples COFIROUTE 5.25% 30/04/2018 (France) Industrials COMMERZBANK AG 3.62% 10/07/2017 (Germany) Financials COMPAGNIE DE ST GOBAIN 4.50% 30/09/2019 (France) Industrials COMPAGNIE DE ST GOBAIN 4.75% 11/04/2017 (France) Industrials COMPASS GROUP 3.12% 13/02/2019 (United Kingdom) Consumer Discretionary CREDIT SUISSE 1.25% 14/04/2022 (Switzerland) Financials CREDIT SUISSE 5.75% 18/09/2020 (Switzerland) Financials (subordinated debt) CRH FINANCE 5.00% 25/01/2019 (Ireland) Materials DAIMLER AG 0.50% 09/09/2019 (Germany) Consumer Discretionary DANONE SA 1.25% 06/06/2018 (France) Consumer Staples DEUTSCH POST 1.88% 27/06/2017 (Netherlands) Industrials DEUTSCHE POST AG 0.38% 01/01/2021 (Germany) Industrials DEXIA CREDIT 0.04% 11/12/2019 (France) Financials EBAY INC 2.50% 09/03/2018 (USA) Information Technology (Dollar) EE FINANCE 3.25% 03/08/2018 (United Kingdom) Telecommunication Services ENGIE SA 0.00% 13/02/2017 (France) Utilities ENGIE SA 1.50% 20/07/2017 (France) Utilities ENI SPA 4.75% 14/11/2017 (Italy) Energy ERICSSON LM 5.38% 27/06/2017 (Sweden) Information Technology EUROFINS SCIENTIFIC 2.25% 27/01/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC 3.12% 26/11/2018 (Luxembourg) Healthcare EUROFINS SCIENTIFIC 3.38% 30/10/2022 (Luxembourg) Healthcare EUROFINS SCIENTIFIC 4.88% 29/04/2023 (Luxembourg) Healthcare (subordinated debt) EUROFINS SCIENTIFIC 7.00% 31/01/2020 (Luxembourg) Healthcare (subordinated debt) EXOR NV 5.38% 12/06/2017 (Italy) Financials FCA CAPITAL IRELAND PLC 1.25% 13/06/2018 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 1.25% 21/01/2021 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 1.25% 23/09/2020 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 2.00% 23/10/2019 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 2.62% 17/04/2019 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 2.88% 26/01/2018 (Ireland) Consumer Discretionary FCA CAPITAL IRELAND PLC 4.00% 17/10/2018 (Ireland) Consumer Discretionary FCE BANK PLC 1.75% 21/05/2018 (United Kingdom) Consumer Discretionary FCE BANK PLC 1.88% 18/04/2019 (United Kingdom) Consumer Discretionary FCE BANK PLC 2.88% 03/10/2017 (United Kingdom) Consumer Discretionary FEDEX CORP 0.50% 09/03/2020 (USA) Industrials FIAT INDUSTRIAL 6.25% 09/03/2018 (Luxembourg) Consumer Discretionary FONCIERE DES REGIONS 3.88% 16/01/2018 (France) Real Estate FONCIERE LYONNAISE 1.88% 26/08/2021 (France) Real Estate FONCIERE LYONNAISE 2.25% 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 GAS NATURAL CAPITAL 4.12% 24/04/2017 (Spain) Utilities GENERAL ELECTRIC CAPITAL 2.88% 18/06/2019 (USA) Industrials GENERAL ELECTRIC CAPITAL 6.00% 15/01/2019 (USA) Industrials GOLDMAN SACHS GROUP INC 0.75% 10/05/2019 (USA) Financials GOLDMAN SACHS GROUP INC 4.50% 30/01/2017 (USA) Financials HEIDELBERGCEMENT 5.62% 04/01/2018 (Germany) Materials HEIDELBERGCEMENT 8.00% 31/01/2017 (Germany) Materials HEIDELBERGCEMENT 9.50% 15/12/2018 (Germany) Materials HEINEKEN NV 2.50% 19/03/2019 (Netherlands) Consumer Staples HEMSO FASTIGHETS 1.00% 09/06/2026 (Sweden) Real Estate HENKEL AG & CO 1.50% 13/06/2019 (Germany) Consumer Staples (Dollar) HSBC FINANCE 4.88% 30/05/2017 (USA) Financials IBERDROLA FINANZAS 4.62% 07/04/2017 (Spain) Utilities ING GROEP NV 4.75% 31/05/2017 (Netherlands) Financials INTERXION 6.00% 09/01/2017 (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 4.75% 15/06/2017 (Italy) Financials INTESA SAN PAOLO 4.80% 05/10/2017 (Italy) Financials INTESA SAN PAOLO 5.00% 28/02/2017 (Italy) Financials INTESA SAN PAOLO 7.00% 19/01/2021 (Italy) Financials (subordinated debt) IPSEN SA 1.88% 16/03/2023 (France) Healthcare ISLANDSBANKI 1.75% 07/09/2020 (Iceland) Financials JOHNSON & JOHNSON 0.25% 20/12/2021 (USA) Healthcare FIXED INCOME MANAGEMENT CARMIGNAC FOURTH QUARTER 2016 / 67

68 FIXED INCOME MANAGEMENT HOLDINGS CARMIGNAC SÉCURITÉ AT 30/12/2016 Price in currencies Total value ( ) % of net assets JP MORGAN 1.45% 21/08/2018 (USA) Financials (Dollar) JP MORGAN 1.65% 23/09/2019 (USA) Financials (Dollar) JP MORGAN 1.88% 21/11/2019 (USA) Financials KBC BANK 8.00% 25/01/2018 (Belgium) Financials (subordinated debt) KBC GROEP NV 2.38% 25/11/2019 (Belgium) Financials (subordinated debt) LANDSBANKINN 1.62% 15/03/2021 (Iceland) Financials LOCK AS 7.00% 15/08/2017 (Norway) Financials LUXOTTICA GROUP 3.62% 19/03/2019 (Italy) Consumer Discretionary LVMH 1.25% 04/11/2019 (France) Consumer Discretionary MEDIOBANCA SPA 0.88% 14/11/2017 (Italy) Financials MEDIOBANCA SPA 2.50% 30/09/2018 (Italy) Financials MERCK FINANCIAL SERVICES 0.75% 02/06/2019 (Germany) Healthcare MONDELEZ INTERNATIONAL 1.12% 26/01/2017 (USA) Consumer Staples MONDI FINANCE 5.75% 03/04/2017 (United Kingdom) Materials MORGAN STANLEY 2.25% 12/03/2018 (USA) Financials NESTE OIL OYJ 2.12% 17/12/2021 (Finland) Energy NOMURA EUROPE 1.88% 29/05/2018 (Netherlands) Financials NUMERICABLE 5.38% 15/05/2017 (France) Consumer Discretionary NUMERICABLE 5.62% 15/05/2019 (France) Consumer Discretionary NYKRE 0.75% 14/07/2021 (Denmark) Financials NYKRE 0.88% 13/06/2019 (Denmark) Financials NYKRE 4.00% 03/06/2021 (Denmark) Financials (subordinated debt) ORANGE 1.88% 02/10/2019 (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% 24/05/2019 (Netherlands) Industrials PPG INDUSTRIES INC 0.00% 03/10/2019 (USA) Materials PPR 1.88% 08/10/2018 (France) Consumer Discretionary PPR 3.12% 23/04/2019 (France) Consumer Discretionary PRICELINE.COM INC 2.15% 25/08/2022 (USA) Consumer Discretionary RENAULT 0.38% 10/07/2019 (France) Consumer Discretionary RENAULT 2.88% 22/01/2018 (France) Consumer Discretionary RENAULT 4.62% 18/09/2017 (France) Consumer Discretionary REPSOL INTERNATIONAL FINANCE 4.75% 16/02/2017 (Netherlands) Energy ROYAL BANK OF SCOTLAND 10.50% 16/03/2017 (United Kingdom) Financials (subordinated debt) ROYAL BANK OF SCOTLAND 3.62% 25/03/2019 (United Kingdom) Financials (subordinated debt) ROYAL BANK OF SCOTLAND 5.25% 30/03/2017 (United Kingdom) Financials (subordinated debt) 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) ROYAL BANK OF SCOTLAND 9.50% 16/03/2017 (United Kingdom) Financials (subordinated debt) SANOFI 0.00% 05/04/2019 (France) Healthcare SANTANDER 1.38% 25/03/2017 (Spain) Financials SANTANDER 4.00% 27/03/2017 (Spain) Financials SANTANDER 4.12% 04/10/2017 (Spain) Financials SANTANDER 6.25% 12/03/2019 (Spain) Financials (subordinated debt) SANTANDER CONSUMER 0.62% 20/04/2018 (Norway) Financials SANTANDER CONSUMER 0.90% 18/02/2020 (Spain) Financials SANTANDER CONSUMER 1.10% 30/07/2018 (Spain) Financials SATO OYJ 2.38% 24/12/2020 (Finland) Real Estate SCHNEIDER ELECTRIC SE 3.75% 12/07/2018 (France) Industrials SCHNEIDER ELECTRIC SE 4.00% 11/08/2017 (France) Industrials SECURITAS AB 2.25% 14/03/2018 (Sweden) Industrials SIEMENS 1.05% 16/08/2017 (Netherlands) Industrials (Dollar) SKANDINAVISKA 2.00% 18/03/2019 (Sweden) Financials SNAM SPA 2.38% 30/06/2017 (Italy) Utilities SOCIETE DES AUTOROUTES 4.88% 21/01/2019 (France) Industrials SOCIETE DES AUTOROUTES 5.12% 18/01/2018 (France) Industrials SOCIETE GENERALE 0.75% 25/11/2020 (France) Financials SOCIETE GENERALE 5.85% 26/03/2018 (France) Financials (subordinated debt) TELEFONICA EMISIONES 2.74% 29/05/2019 (Spain) Telecommunication Services TELEFONICA EMISIONES 3.66% 18/09/2017 (Spain) Telecommunication Services TELEFONICA EMISIONES 4.80% 21/02/2018 (Spain) Telecommunication Services TEVA PHARMACEUTICAL 0.38% 25/07/2020 (Netherlands) Healthcare TEVA PHARMACEUTICALS 1.40% 20/07/2018 (Netherlands) Healthcare (Dollar) TEVA PHARMACEUTICALS 1.70% 19/07/2019 (Netherlands) Healthcare (Dollar) TOTAL SA 2.71% 05/05/2023 (France) Energy (subordinated debt) TOTAL SA 3.88% 18/05/2022 (France) Energy (subordinated debt) TRINITY ACQUISITION 2.12% 26/02/2022 (United Kingdom) Financials TRIONISTA 6.88% 27/01/2017 (Germany) Industrials UBS AG 4.75% 12/02/2021 (Switzerland) Financials (subordinated debt) UNICREDIT 2.00% 31/07/2017 (Italy) Financials UNICREDIT 2.10% 28/12/2017 (Italy) Financials UNICREDIT 2.62% 30/01/2018 (Italy) Financials UNICREDIT 3.38% 11/01/2018 (Italy) Financials UNICREDIT 4.88% 07/03/2017 (Italy) Financials UNICREDIT 9.25% 03/06/2022 (Italy) Financials (subordinated debt) UNIPER SE 0.12% 08/12/2018 (Germany) Utilities VOLKSWAGEN 1.88% 15/05/2017 (Netherlands) Consumer Discretionary VOLKSWAGEN 3.25% 21/01/2019 (Netherlands) Consumer Discretionary VOLVO 5.00% 31/05/2017 (Sweden) Consumer Discretionary WACHOVIA CORP 4.38% 27/11/2018 (USA) Financials (subordinated debt) WPP FINANCE 0.75% 18/11/2019 (United Kingdom) Industrials XYLEM INC 2.25% 11/12/2022 (USA) Industrials Developed countries floating rate corporate bonds AT&T INC TV 04/06/2019 (USA) Telecommunication Services BANK OF AMERICA TV 26/07/2019 (USA) Financials / Management report CARMIGNAC FOURTH QUARTER 2016

69 HOLDINGS CARMIGNAC SÉCURITÉ AT 30/12/2016 Price in currencies Total value ( ) % of net assets COCA-COLA TV 26/11/2017 (United Kingdom) Consumer Staples CREDIT SUISSE TV 10/11/2017 (United Kingdom) Financials CREDIT SUISSE TV 19/02/2018 (United Kingdom) Financials DANONE SA TV 03/11/2018 (France) Consumer Staples DANSKE BANK TV 19/11/2018 (Denmark) Financials DEUTSCHE TELEKOM INTERNATIONAL TV 03/04/2020 (Netherlands) Telecommunication Services FCA CAPITAL IRELAND PLC TV 17/10/2017 (Ireland) Consumer Discretionary GOLDMAN SACHS GROUP INC TV 30/01/2017 (USA) Financials HBOS PLC TV 21/12/2016 (United Kingdom) Financials (subordinated debt) RENAULT TV 27/11/2017 (France) Consumer Discretionary TOTAL CAPITAL TV 19/03/2020 (France) Energy TOYOTA MOTOR TV 20/07/2018 (USA) Consumer Discretionary UNICREDIT TV 13/09/2017 (Italy) Financials UNICREDIT TV 19/12/2017 (Italy) Financials UNICREDIT TV 30/09/2017 (Italy) Financials UNICREDIT TV 31/10/2017 (Italy) Financials Emerging markets fixed rate corporate bonds AMERICA MOVIL SAB 3.75% 28/06/2017 (Mexico) Telecommunication Services MOL HUNGARIAN OIL AND GAS 2.62% 28/04/2023 (Hungary) Energy MOL HUNGARIAN OIL AND GAS 5.88% 20/04/2017 (Hungary) Energy SINOPEC GRP 0.50% 27/04/2018 (China) Energy YPF SA 3.75% 30/09/2019 (Argentina) Energy YPF SA 8.50% 23/03/2021 (Argentina) Energy (Dollar) Asset Backed Securities ,53 6, KKR CREDIT ADVISORS, AVOCA CAPITAL CLO XIV (Europe) CLO (AAA 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) BLACKROCK, BLACKROCK EUROPEAN CLO II (Europe) CLO (AA tranche) CSAM, CADOGAN SQUARE CLO VI (Europe) CLO (AAA tranche) CARLYLE, CELF LOAN PARTNERS IV (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) 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 V (Europe) CLO (AAA 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) CVC CREDIT PARTNERS, CVC CORDATUS VII (Europe) CLO (BB tranche) CAIRN CAPITAL, CAIRN CLO (Europe) CLO (AAA 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) BLACKSTONE/GSO, DARTRY PARK (Europe) CLO (AAA 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) 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) CQS, GROSVENOR PLACE CLO (Europe) CLO (AAA 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 XV (Europe) CLO (BB 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) INVESTCORP, HARVEST CLO VIII (Europe) CLO (AAA tranche) HALCYON, HALCYON EUROPEAN FUNDING (Europe) CLO (AA tranche) ALCENTRA, JUBILEE CLO 2015-XV (Europe) CLO (AAA tranche) OAK HILL ADVISORS, OAK HILL ECP III (Europe) CLO (AAA tranche) OAK HILL ADVISORS, OAK HILL ECP III (Europe) CLO (A+ tranche) BLACKSTONE/GSO, ORWELL PARK (Europe) CLO (AAA tranche) BLACKSTONE/GSO, ORWELL PARK (Europe) CLO (AA+ tranche) PARTNERS GROUP, PENTA CLO 2 (Europe) CLO (AAA tranche) PARTNERS GROUP, PENTA CLO 2 (Europe) CLO (AA tranche) ICG, ST PAUL'S VI (Europe) CLO (AAA tranche) CHENAVARI, TORO EUROPEAN CLO 1 (Europe) CLO (AAA 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) BLACKSTONE/GSO, TYMON PARK (Europe) CLO (AAA tranche) Portfolio value Net assets FIXED INCOME MANAGEMENT CARMIGNAC FOURTH QUARTER 2016 / 69

70 Carlos Galvis 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 fourth quarter, Carmignac Portfolio Capital Plus increased by +0.64%, while its benchmark was down -0.09%, bringing the 2016 performance to +0.07% for the Fund, while the EONIA (compounded) decreased by -0.32%. Over Q4, financial markets were dominated by the US election results. After an unexpected Donald Trump victory, equities rallied, bonds sold off and the dollar strengthened. The FOMC increased rates at its December meeting, but surprised the markets with upward revision on the path of interest rates for the next two years. As a result, the dollar continued to rise, while the front-end of the US curve fully repriced the new Fed dots projections and caused the yield curve to flatten considerably. In Japan, the BoJ kept policy unchanged, while economic data continued to improve steadily. In Europe, the ECB kept the deposit facility rate at -0.40% but extended the APP until December 2017 with a lower monthly pace of 60 billion per month (source : ECB, 08/12/2016). With this background, EM assets underperformed as a stronger dollar and higher rates weighed on EM equities and currencies performance. Going into 2017, the global economy should be supported by monetary policy accommodation in Europe and Japan, while fiscal expansion in the US is expected to boost nominal economic growth over the next few years. In this context, acceleration in economic activity is likely to be more global in this new year as well, as higher inflation prints will likely confirm a genuine cyclical economic recovery. As a result, the equity sector rotation seen over the second half of 2016, with strong outperformance 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 Carmignac Portfolio Capital Plus A EUR acc Eonia compounded 16% Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding applicable entrance fee due to the distributor). by high cyclical sectors relative to more defensive sectors, should continue. Additionally, the persistent sell-off in bond markets and well-supported equity markets seen over Q4 should stabilise in the first part of the year, while the next leg for higher rates and higher equity valuations should be a function of fiscal spending implementation and higher nominal GDP growth. However, the risks are on the downside, as political risks in Europe persist and policy uncertainty on the new US President may strongly jitter markets. With this background, the portfolio should continue to favour equity markets over bond markets and to remain long US dollar, particularly against Asian currencies. Our rate strategy made a positive contribution of +0.23% over the quarter. Fixed income markets saw greater volatility as the US 10 year yield increased by roughly 1%, marking one of the worst quarters for US Treasuries in the last twenty years. Inflation expectations shot up as higher oil prices and improved growth expectations weighed significantly on long duration positions in global bond portfolios. Treasuries underperformed Bunds as policy divergence between the ECB and the Fed became more pronounced. Furthermore, the yield curve steepened first and then flattened as the front-end quickly priced in a more aggressive Fed after the December meeting. Against this background, the Fund benefited from our short US Treasuries position. Going forward, markets are likely to become less dependent on Central banks but highly sensitive to the economic cycle. Given our central scenario of continuing strong US growth, we will be favouring a short bias strategy, but likely to express more via European sovereign bonds relative to US Treasuries. Our FX strategy contributed negatively with -0.13% of performance. As rates in the US spiked relative to those in Japan and Europe, the dollar index strongly outperformed mainly against those two other major currencies. At the same time, the steady CNH devaluation weighed also on the poor performance of Asian currencies particularly the KRW. The Fund benefited from its long dollar positions against the yen and a basket of Asian currencies including the KRW, SGD and TWD. However, the relative value strategies EM currency penalized the Fund and offset the positive contribution from the long dollar call. Going forward, the dollar s upward trend should continue, particularly against Asian currencies. At the same time, the higher premiums on LATAM FX like MXN and BRL should come down as rates stabilise in the US. The portfolio will remain long USD against Asian currencies while favouring LATAM currencies within the emerging market space. * 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. 70 / Management report FIXED INCOME MANAGEMENT

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