Investment Objectives

The Fund aims to achieve long-term capital growth by investing in a diversified portfolio of collective investment schemes.

The Investment Manager (“We”) invest in collective investment schemes (“CIS”) (including UCITS, exchange-traded funds and other collective investment undertakings) that invest in a broad range of assets, including debt and equity securities. In instances, this may involve investing in CISs that are managed by the Investment Manager.

The Investment Manager (“We”) aims to build a diversified portfolio spread across several industries and sectors.

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

Investor Profile

A typical investor in the CC Balanced Strategy Fund is:

  • Seeking to achieve stable, long-term capital appreciation
  • Seeking an actively managed & diversified investment in equity funds and bond funds
  • Planning to hold their investment for at least 3-5 years 

Fund Rules

  1. The fund may invest up to 40% of its assets in CISs that are permitted to invest 65% or more of their assets in money market instruments.
  2. The fund may invest up to 40% of its assets in CISs that are permitted to invest 65% or more of their assets in investment-grade bonds.
  3. The fund may invest up to 60% of its assets in CISs that are permitted to invest 65% or more of their assets in high yield bonds.
  4. The fund may invest up to 60% of its assets in CISs that are permitted to invest 65% or more of their assets in equity securities.

Commentary

December 2022

Introduction

2022, a year – possibly like no other in recent market history – was characterised by economic uncertainty and significant market volatility.

Geopolitical tensions in eastern Europe and central banks’ battle against inflationary pressures, took centre stage, proving to be the main sources of market struggles. Indeed, equity and credit markets felt the pinch, ending the year substantially negative, notwithstanding some relief witnessed in the final quarter of the year as market participants clinched to the idea that inflation may have possibly peaked, paving the way for the pace of interest rate rises to slow. Also, in China strict coronavirus restrictions – a major dampener on domestic demand – were in the final quarter eased, re-igniting hopes that the country is incrementally heading towards the end of its zero-Covid policy. Such news was positively digested, alleviating overall market sentiment.

Market Environment and Performance

Forward looking indicators, namely PMIs continued to paint a somewhat gloomy landscape, noting a deterioration – albeit at a softer pace in both manufacturing and service segments – in the rate of growth. Manufacturing (reading 47.8 v a previous month reading of 47.1) remained in contractionary territory despite inflationary pressures easing and supply chains showing signs of stabilizing. Services (reading 49.8 v a preliminary estimate of 49.1 and previous month reading of 48.5) showed signs of improvement, albeit pointing to a fifth successive drop. In December, inflationary pressures continued to show signs of easing, with major economies in the euro Area witnessing a decline in pricing pressures, preliminary estimates showed. Notably, Germany saw headline inflation falling to 8.6 from 9.1%. Largely, inflation in the Euro area, dropped to 9.2 from 10.1%. Core inflation edged higher to 5.2%.

Aggregate business activity in the US pointed to a continued solid contraction across the private sector. Notably, composite PMI reading in December fell to 44.6 from November’s 46.4, driven by worsening conditions in both manufacturing and service sectors. Manufacturing PMI (reading 46.2) pointed to the biggest contraction in factory activity since May 2020. Output fell at a solid pace while new orders fell at one of the fastest rates ever as companies noted weaker client demand, stemming from economic uncertainty and inflationary pressures leading to lower purchasing power among customers. Meanwhile, services slumped to 44.4 in December from 46.2 in the previous month.

Annual inflation rate in the US, for a sixth successive month, slowed to 6.5% – in line with market forecasts of 6.6%. Month-on-month, consumer prices were down 0.1%. From the employment front, data continued to somewhat point to a tight labour market, with incoming data proving largely mixed. Non-farm payrolls print showed that 223k jobs were created in December compared to market expectations of 200k, wage growth came in below expectations while unemployment rate fell to 3.5 from 3.7%. Meanwhile, the labour force participation rate edged higher to 62.3 from 62.2% in the previous month.

Looking at December’s equity moves, for the second time this year investors’ elusive hope for a more accommodative monetary policy on the back of economic softness, has been dismissed by the FED focus on the long-term inflationary pressures. Surprisingly

US equities have again strongly underperformed European markets as the US dollar depreciation continued. European markets had a floor on their negative performance as investors hoped that diminishing gas prices caused by the warm weather will help the region avoiding a hard recession in 2023. Emerging markets also outperformed US as the opening up of the Chinese economy following the zero covid policy termination has given a new life line to the local stock market. The S&P 500 index fall by 9.38% as all sectors finished the month in negative territory led by technology and consumer discretionary. In Europe, the EuroStoxx50 and the DAX lost 4.32% and 3.29% respectively, with the financial sector being again the main performer following expectations of ECB rising rates further.

From a fixed-income point of view, December saw the upward trend partially paused, as the pace witnessed during the final quarter of 2022, slowed. Indeed, global high yield indices edged marginally lower, a loss of c. 0.10%. For the full year, global high yield credit saw losses amounting to 11.84%. Government and Investment Grade bonds were also the prime losers for 2022 on the back on remarkable upward shifts in benchmark yields.

Fund performance

Performance for the month of December proved negative, noting a 1.84% decline for the CC Balanced Portfolio Fund – in line with the moves witnessed across both equity and credit markets at large. Given the cautious, yet active approach employed by the manager, the funds’ relative outperformance to its peers, has on a year-to-date basis been maintained. 

For the full year 2022, the fund saw a total negative return of 13.13%.

Market and Investment Outlook

Going forward, the Manager is of the believe that persistent high interest rates coupled with inflation stickiness will further deteriorate the economic landscape going forward, potentially pushing the global economy on the brink of recession. From a credit point the Manger believe that rates are at or approaching peaks and in this regard, expectations are now more downward trending. Thus, possible tweaks in terms of duration are plausible.

Looking at equities, return expectations remain depressed, however a continuing of the current US dollar depreciation trend might start differentiating expectations between various geographies. In conclusion, the Manager remains faithful to its cautious approach, favouring defensive sectors and elevated cash levels. However, the Manager is weighing the change in market dynamics following the China re-opening which is surely a positive for the global economy. Thus, expectations of sectorial re-positioning in the coming days is highly probable.

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Key Facts & Performance

Fund Manager

Jordan Portelli

Jordan is CIO at CC Finance Group. He has extensive experience in research and portfolio management with various institutions. Today he is responsible of the group’s investment strategy and manages credit and multi-asset strategies.

PRICE (EUR)

ASSET CLASS

Mixed

MIN. INITIAL INVESTMENT

€5000

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

-13.71%

*View Performance History below
Inception Date: 03 Nov 2021
ISIN: MT7000030664
Bloomberg Ticker: CCPBSCA MV
Entry Charge: Up to 2.50%
Total Expense Ratio: 2.27%
Exit Charge: None
Distribution Yield (%): -
Underlying Yield (%): -
Distribution: Nil
Total Net Assets: €4.55 mn
Month end NAV in EUR: 86.29
Number of Holdings: 23
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 63.6

Performance To Date (EUR)

Top 10 Holdings

UBS (Lux) Bond Fund - Euro High Yield
11.2%
CC Funds SICAV plc - High Income Bond Fund
10.2%
Fundsmith SICAV - Equity Fund
7.4%
Nordea 1 - European High Yield Bond Fund
6.6%
Invesco Pan European Equity Fund
6.3%
Legg Mason Global Funds plc
6.2%
Robeco BP US Large Cap Equities
5.0%
Comgest Growth plc - Europe Opportunities
3.9%
BlackRock Global High Yield Bond Fund
3.5%
UBS Lux Equity Fund - European Shares
3.3%
Data for major sector breakdown is not available for this fund.
Data for maturity buckets is not available for this fund.
Data for credit ratings is not available for this fund.

Risk & Reward Profile

1
2
3
4
5
6
7
Lower Risk

Potentialy Lower Reward

Higher Risk

Potentialy Higher Reward

Top Holdings by Country

European Region
38.10%
Global
22.20%
International
14.90%
U.S.
12.40%
China
1.50%

Asset Allocation

Fund 85.70%
Cash 11.00%
ETF 3.30%

Performance History (EUR)*

YTD

-13.13%

2021

-0.67%

1-month

-1.84%

3-month

2.89%

6-month

1.10%

12-month

-13.13%

* The Accumulator Share Class (Class A) was launched on 3 November 2021
** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

Currency Allocation

Euro 95.00%
USD 5.00%
GBP 0.0%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The Fund aims to achieve long-term capital growth by investing in a diversified portfolio of collective investment schemes.

    The Investment Manager (“We”) invest in collective investment schemes (“CIS”) (including UCITS, exchange-traded funds and other collective investment undertakings) that invest in a broad range of assets, including debt and equity securities. In instances, this may involve investing in CISs that are managed by the Investment Manager.

    The Investment Manager (“We”) aims to build a diversified portfolio spread across several industries and sectors.

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

  • Investor profile

    A typical investor in the CC Balanced Strategy Fund is:

    • Seeking to achieve stable, long-term capital appreciation
    • Seeking an actively managed & diversified investment in equity funds and bond funds
    • Planning to hold their investment for at least 3-5 years 
    Investor Profile Icon
  • Fund Rules

    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

  • Commentary

    December 2022

    Introduction

    2022, a year – possibly like no other in recent market history – was characterised by economic uncertainty and significant market volatility.

    Geopolitical tensions in eastern Europe and central banks’ battle against inflationary pressures, took centre stage, proving to be the main sources of market struggles. Indeed, equity and credit markets felt the pinch, ending the year substantially negative, notwithstanding some relief witnessed in the final quarter of the year as market participants clinched to the idea that inflation may have possibly peaked, paving the way for the pace of interest rate rises to slow. Also, in China strict coronavirus restrictions – a major dampener on domestic demand – were in the final quarter eased, re-igniting hopes that the country is incrementally heading towards the end of its zero-Covid policy. Such news was positively digested, alleviating overall market sentiment.

    Market Environment and Performance

    Forward looking indicators, namely PMIs continued to paint a somewhat gloomy landscape, noting a deterioration – albeit at a softer pace in both manufacturing and service segments – in the rate of growth. Manufacturing (reading 47.8 v a previous month reading of 47.1) remained in contractionary territory despite inflationary pressures easing and supply chains showing signs of stabilizing. Services (reading 49.8 v a preliminary estimate of 49.1 and previous month reading of 48.5) showed signs of improvement, albeit pointing to a fifth successive drop. In December, inflationary pressures continued to show signs of easing, with major economies in the euro Area witnessing a decline in pricing pressures, preliminary estimates showed. Notably, Germany saw headline inflation falling to 8.6 from 9.1%. Largely, inflation in the Euro area, dropped to 9.2 from 10.1%. Core inflation edged higher to 5.2%.

    Aggregate business activity in the US pointed to a continued solid contraction across the private sector. Notably, composite PMI reading in December fell to 44.6 from November’s 46.4, driven by worsening conditions in both manufacturing and service sectors. Manufacturing PMI (reading 46.2) pointed to the biggest contraction in factory activity since May 2020. Output fell at a solid pace while new orders fell at one of the fastest rates ever as companies noted weaker client demand, stemming from economic uncertainty and inflationary pressures leading to lower purchasing power among customers. Meanwhile, services slumped to 44.4 in December from 46.2 in the previous month.

    Annual inflation rate in the US, for a sixth successive month, slowed to 6.5% – in line with market forecasts of 6.6%. Month-on-month, consumer prices were down 0.1%. From the employment front, data continued to somewhat point to a tight labour market, with incoming data proving largely mixed. Non-farm payrolls print showed that 223k jobs were created in December compared to market expectations of 200k, wage growth came in below expectations while unemployment rate fell to 3.5 from 3.7%. Meanwhile, the labour force participation rate edged higher to 62.3 from 62.2% in the previous month.

    Looking at December’s equity moves, for the second time this year investors’ elusive hope for a more accommodative monetary policy on the back of economic softness, has been dismissed by the FED focus on the long-term inflationary pressures. Surprisingly

    US equities have again strongly underperformed European markets as the US dollar depreciation continued. European markets had a floor on their negative performance as investors hoped that diminishing gas prices caused by the warm weather will help the region avoiding a hard recession in 2023. Emerging markets also outperformed US as the opening up of the Chinese economy following the zero covid policy termination has given a new life line to the local stock market. The S&P 500 index fall by 9.38% as all sectors finished the month in negative territory led by technology and consumer discretionary. In Europe, the EuroStoxx50 and the DAX lost 4.32% and 3.29% respectively, with the financial sector being again the main performer following expectations of ECB rising rates further.

    From a fixed-income point of view, December saw the upward trend partially paused, as the pace witnessed during the final quarter of 2022, slowed. Indeed, global high yield indices edged marginally lower, a loss of c. 0.10%. For the full year, global high yield credit saw losses amounting to 11.84%. Government and Investment Grade bonds were also the prime losers for 2022 on the back on remarkable upward shifts in benchmark yields.

    Fund performance

    Performance for the month of December proved negative, noting a 1.84% decline for the CC Balanced Portfolio Fund – in line with the moves witnessed across both equity and credit markets at large. Given the cautious, yet active approach employed by the manager, the funds’ relative outperformance to its peers, has on a year-to-date basis been maintained. 

    For the full year 2022, the fund saw a total negative return of 13.13%.

    Market and Investment Outlook

    Going forward, the Manager is of the believe that persistent high interest rates coupled with inflation stickiness will further deteriorate the economic landscape going forward, potentially pushing the global economy on the brink of recession. From a credit point the Manger believe that rates are at or approaching peaks and in this regard, expectations are now more downward trending. Thus, possible tweaks in terms of duration are plausible.

    Looking at equities, return expectations remain depressed, however a continuing of the current US dollar depreciation trend might start differentiating expectations between various geographies. In conclusion, the Manager remains faithful to its cautious approach, favouring defensive sectors and elevated cash levels. However, the Manager is weighing the change in market dynamics following the China re-opening which is surely a positive for the global economy. Thus, expectations of sectorial re-positioning in the coming days is highly probable.

  • Key facts & performance

    Fund Manager

    Jordan Portelli

    Jordan is CIO at CC Finance Group. He has extensive experience in research and portfolio management with various institutions. Today he is responsible of the group’s investment strategy and manages credit and multi-asset strategies.

    PRICE (EUR)

    ASSET CLASS

    Mixed

    MIN. INITIAL INVESTMENT

    €5000

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    RETURN (SINCE INCEPTION)*

    -13.71%

    *View Performance History below
    Inception Date: 03 Nov 2021
    ISIN: MT7000030664
    Bloomberg Ticker: CCPBSCA MV
    Entry Charge: Up to 2.50%
    Total Expense Ratio: 2.27%
    Exit Charge: None
    Distribution Yield (%): -
    Underlying Yield (%): -
    Distribution: Nil
    Total Net Assets: €4.55 mn
    Month end NAV in EUR: 86.29
    Number of Holdings: 23
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 63.6

    Performance To Date (EUR)

    Risk & Reward Profile

    1
    2
    3
    4
    5
    6
    7
    Lower Risk

    Potentialy Lower Reward

    Higher Risk

    Potentialy Higher Reward

    Top 10 Holdings

    UBS (Lux) Bond Fund - Euro High Yield
    11.2%
    CC Funds SICAV plc - High Income Bond Fund
    10.2%
    Fundsmith SICAV - Equity Fund
    7.4%
    Nordea 1 - European High Yield Bond Fund
    6.6%
    Invesco Pan European Equity Fund
    6.3%
    Legg Mason Global Funds plc
    6.2%
    Robeco BP US Large Cap Equities
    5.0%
    Comgest Growth plc - Europe Opportunities
    3.9%
    BlackRock Global High Yield Bond Fund
    3.5%
    UBS Lux Equity Fund - European Shares
    3.3%

    Top Holdings by Country

    European Region
    38.10%
    Global
    22.20%
    International
    14.90%
    U.S.
    12.40%
    China
    1.50%

    Asset Allocation

    Fund 85.70%
    Cash 11.00%
    ETF 3.30%

    Performance History (EUR)*

    YTD

    -13.13%

    2021

    -0.67%

    1-month

    -1.84%

    3-month

    2.89%

    6-month

    1.10%

    12-month

    -13.13%

    * The Accumulator Share Class (Class A) was launched on 3 November 2021
    ** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

    Currency Allocation

    Euro 95.00%
    USD 5.00%
    GBP 0.0%
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