Global Balanced Income Fund Distributor

The Fund seeks to provide stable, long-term capital appreciation by investing in a diversified portfolio of local and international bonds, equities and other income-generating assets.

The manager may invest in both Investment Grade and High Yield bonds rated at the time of investment at least “B-” by S&P, or in bonds determined to be of comparable quality.

The Fund is actively managed, not managed by reference to any index.

The Investment Manager of the CC High Income Bond Funds – EUR and USD has the duty to ensure that the underlying investments of the funds are well diversified. According to the prospectus, the investment manager has to abide by a number of investment restrictions to safeguard the value of the assets

• The fund aims to diversify its assets broadly among countries, industries and sectors, but can invest a substantial portion in one or more countries (or regions) if economic and business conditions warrant such investments
• The Fund may invest up 10% in non-rated bonds, whilst maintain an exposure to direct rated bonds of at least 25% of the value of the Fund. 
• Investments in equity securities may include, but are not limited to, dividend-paying securities, equities, ETFs and preferred shares of global issuers.
• The Fund will generally, but not exclusively, invest in blue chip issuers listed on Regulated Markets, including equities listed on the Malta Stock Exchange, where applicable
• We shall manage the credit risk and aim to manage interest rate risk through credit analysis and credit diversity. We may invest in both investment grade (corporate and sovereign) and high yield bonds that have a credit rating of at least “B-” by S&P (or rating equivalent issued by other reputable rating agencies) at the time of investment,
• The Sub-Fund may invest a maximum of 10% of its assets in non-rated debt securities, including those listed on the Malta Stock Exchange.
• At all times, the fund will maintain an exposure to direct rated bonds, of at least 25% of the value of the Fund

February 2026

Introduction
In February, financial markets continued to face a challenging environment as geopolitical developments and shifting market narratives contributed to elevated volatility. Investor sentiment was primarily driven by ongoing sector rotations within U.S. equities. These moves were amplified by growing concerns that the rapid advancement of artificial intelligence could ultimately disrupt a number of incumbent technology business models. Although this remains largely a forward-looking narrative yet to be validated by evidence, it has nevertheless prompted significant repositioning across segments perceived to be exposed to such disruption, including areas such as private credit that have meaningful indirect exposure to technology-sector business models. The U.S. Supreme Court ruling against tariffs introduced by the administration last year created additional ambiguity regarding the future implementation of trade measures. This raises questions about how such tariffs may be applied going forward and their potential implications for the U.S. consumer in terms of timing and duration. As the earnings season progressed, corporate profitability generally remained resilient. However, a broad moderation in forward guidance across multiple sectors suggests that companies are approaching the coming year with increasing caution. Toward the end of the month, the escalation of the conflict involving Iran redirected market attention back to geopolitical risk. It is notable that despite the eventful start to the year and the accumulation of multiple shocks, global equity markets have so far managed to remain broadly flat year-to-date. Nevertheless, the question remains as to how many such shocks markets can absorb before sentiment and valuations begin to adjust more meaningfully.

On the monetary-policy front, the publication of the minutes from the Fed January meeting highlighted a cautious and measured policy stance. It appears to be adopting a wait-and-see approach as it seeks to engineer a soft landing from the current elevated interest-rate environment, particularly against the backdrop of deglobalization and evolving global trade dynamics. The emphasis placed on the potential effects of tariffs suggests that policymakers are increasingly looking beyond conventional inflation indicators, in order to better assess the structural changes shaping the U.S. economy. In Europe, the European Central Bank kept policy rates unchanged at its first meeting of 2026. Post-meeting commentary indicated that both the inflation trajectory and the broader macroeconomic environment did not yet justify a policy adjustment, while acknowledging that the outlook remains highly uncertain. The recent appreciation of the euro against the U.S. dollar has emerged as a point of concern. However, it remains unclear whether the stronger currency will exert sufficient disinflationary pressure to create room for potential monetary easing in the period ahead.

In February, global equity markets exhibited heightened volatility, continuing the erratic behaviour observed in recent months. Investors rapidly reduced exposure to business models perceived as vulnerable to disruption from the accelerating adoption of artificial intelligence—particularly within segments of the software industry. Meanwhile capital rotated aggressively into perceived defensive sectors such as consumer staples, in some cases pushing valuations toward levels more commonly associated with high-growth technology companies. The result has been an unsettled market environment that presents a range of unexpected risks for portfolio managers. While episodes of market anxiety are not unusual, their intensity and speed appear amplified by the growing influence of algorithmic trading and retail-driven sentiment. A notable illustration occurred following the publication of the widely circulated “Citrini” Substack memo—an openly speculative piece that nonetheless triggered a sharp market reaction at the start of the following trading week. Although financial markets naturally attempt to anticipate future structural developments, at times narratives outweigh rigorous analysis. For long-term, fundamentally oriented investors, such episodes may ultimately present attractive entry opportunities. At the same time, the rapid evolution of artificial intelligence technologies continues to raise legitimate questions about the durability of certain business models. Regardless of which interpretation proves correct, the current environment underscores the difficulty of maintaining discipline and staying committed to long-term investment strategies amid elevated uncertainty and heightened market volatility.

Market Environment and Performance
In the Euro area, economic momentum remained resilient through the first two months of 2026, extending the expansion seen in the second half of 2025. The flash Eurozone Composite PMI rose to 51.9 in February, marking the strongest pace of private sector expansion in three months and signalling firmer growth across the single currency area. The improvement was supported by stronger manufacturing and services activity, with Germany leading the recovery. Consumer price inflation rose to 1.9% in February, up from January’s 16-month low of 1.7% according to a preliminary estimate. The reading, though comparably higher, remained below the ECB’s 2.0% target.

In the U.S., forward-looking indicators eased from recent highs, though remaining consistent with expansion. The Composite PMI edged lower to 52.3 in February from the 53.0 in January, signalling the slowest pace of private-sector expansion since April 2025. Growth moderated across both sectors, with manufacturing and services activity easing to seven- and ten- month low, respectively. New orders also softened, while export demand declined.

Corporate credit markets posted positive returns overall. European investment-grade credit underperformed its U.S. counterpart, while the opposite was observed in the high-yield segment, where European high yield returned 0.32% compared with 0.16% for U.S. corporates. Despite outperforming European credit, U.S. investment-grade bonds generally lagged sovereign bonds over the period.

Fund performance
In the month of February, the Global Balanced Income Fund registered a loss of 1.18%. Within the fixed income allocation, the portfolio manager maintained an active approach, steadily enhancing the fund’s income profile by selectively capturing opportunities, particularly in the primary and IPO markets. During the month, a new position in Allwyn, Tenet Healthcare, and Enel were initiated, while an internal rotation within ZF Finance extended the maturity profile and increased the coupon from 4.75% to 5.5%, thereby enhancing portfolio income. On the equity allocation, The Fund’s allocation has been reviewed and rebalanced, as the Manager responded to the overriding market volatility. New positions in the defence space (General Dynamics), healthcare (Boston Scientific Corp) and engineering (General Electric, GE Vernova, Eaton Corp, Siemens Energy) have been initiated and the Procter & Gamble position increased with a view to tilting the portfolio allocation towards more value-type of exposure. We also diversified the non-U.S. exposure by initiating a position in the Amundi MSCI Emerging Markets ex China ETF. Consequently, the Robinhood Markets, Mastercard, Rio Tinto, Tencent Holdings, Bistol-Myers Squibb and VanEck Semiconductor UCITS ETF holdings have been liquidated, in order to either take profits or to discharge technically-compromised positions. We also further trimmed exposures to Booking Holdings and MercadoLibre for risk management purposes.

Market and investment outlook
Looking ahead, the Manager notes that recent market-leading indicators point to a deterioration in the U.S. macroeconomic backdrop, with growth momentum moderating, labour market data softening, and inflationary dynamics showing renewed volatility. The recent escalation of geopolitical tensions and the associated disruption to energy markets introduce a meaningful downside risk to the global economic outlook. The effective closure of the Strait of Hormuz has the potential to trigger a broader economic shock, with the magnitude of such an event closely tied to the duration of the current disruption. Although authorities in developed markets are currently deploying measures to stabilize global energy markets, the risk of a global economic slowdown would be difficult to avoid in the absence of a timely resolution to the situation. As geopolitics kicked-in inflation expectations have increased. However, from a fixed income point of view the fund is very well positioned given its high exposure to the high yield market which historically acted as a cushion in an inflationary environment.

From the equity front, the Manager maintains a cautious stance on equity market return expectations for the year ahead. The ongoing sector rotation is at this point compounded by heightened uncertainty surrounding the sustainability of corporate margins. Consistent with our investment philosophy, we continue to prioritize high-quality business models, while applying increased scrutiny to potential disruption risks associated with rapid advances in artificial intelligence. Preserving flexibility within the strategic asset allocation framework remains essential, while selective tactical adjustments may be implemented to navigate the heightened market volatility.