Earlier this week Edouard Carmignac, who runs Europe’s largest fund – the EUR24 billion Carmignac Patrimoine – along with colleag
Earlier this week Edouard Carmignac, who runs Europe’s largest fund – the EUR24 billion Carmignac Patrimoine – along with colleagues Rose Ouahba and Frédéric Leroux, addressed key members of the European Parliament to raise awareness of the damage that MiFID II proposals to change distribution rules for some Ucits considered as complex could have on capital protection strategies. The proposals in question aim to amend the definition of Ucits funds, classifying some Ucits as complex and therefore non-liable to execution-only service, so as to limit the use of hedging instruments. It is something that Carmignac Gestion believes would be very damaging for investors in the long run. Citywire Global quoted Mr Carmignac as saying: “Right now the responsibility we have as asset managers is not only to provide performance but also to provide the lowest volatility possible. When we see the market movements of the last few months it is very difficult to maintain the serenity of our clients when they just want to put their money into cash.”
He added that using very simple hedging instruments as protection measures the firm had answered clients concerns. The fear surrounding further discussion of MiFID II’s proposals is that it could end up redefining what instruments are allowed in non-complex Ucits versus complex Ucits, something that could lead to a fragmentation of the brand and cause unnecessary confusion amongst retail investors. “We have achieved protection by simple means. Absolutely no leverage but using simple instruments when we felt we did not have a clear view of the markets,” added Carmignac.
