Investment Objectives

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

The Investment Manager invests in collective investment schemes 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.

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 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

February 2024

Introduction

February presented a picture of rather exacerbated optimism in global financial markets when compared to the fragile interplay between the global economic growth, the tightening financial conditions and the simmering political tensions. As the early signs of a possible acceleration in global output were marked by leading economic indicators, the performers continued being the US, Japan, and the emerging markets, particularly India and Brazil. Additionally, China’s continued economic expansion, although not above expectations, offered some stability to the overall landscape. However, the outlook remains somewhat subdued given the projected slowdown for global output growth in 2024 compared to last year. It could be argued that the “soft landing” scenario has already become the base scenario with risks regarding the economic growth coming only from the upside. As inflationary pressures have continued their downward path across regions, it is rather the geopolitical tensions which might currently cast a long shadow over the macroeconomic environment. Beyond immediate conflicts such as Ukraine and Gaza, such uncertainties also stem from rising tensions between the US and its allies on one hand and China on the other, as trade disputes and commercial disagreements continue raising concerns about potential disruptions to global supply chains and de-globalisation. In addition, the rebalancing of power on the geopolitical stage as some emerging markets push for a recognition of their newly-discovered economic prowess into political might constitute an additional layer of uncertainty to the current situation. The coming quarters alongside the outcome of the US elections will be crucial in determining the trajectory of global financial markets. Beyond the apparent positive market momentum, navigating through these challenges going forward will not be easy.

From the monetary front, the FED minutes from its January policy meeting revealed its worries about the possibility of inflation remaining stubbornly high which could keep interest rated at a 23-year high longer than markets previously expected. While an interest rate cut in the March meeting is now out of discussion, market participants now view the second half of the year as bringing several rate cuts, in line with the FED’s expectations at the beginning of the year. In Europe, the ECB does look more positive on the perspectives of reigning in price rises, as it is likely to cut its own inflation projections during the March meeting, particularly due to lower energy prices. But this alone will not be sufficient to reverse the historic policy tightening process, especially since wage growth remained strong and the unit labour cost was sharply higher due in part to a slump in productivity.

Despite an expected breather after a three-month rally, equity markets posted another stellar performance in February pushed particularly in the last week by another Nvidia excellent earnings report. There were two clear trends emerging in the markets – on one hand, the AI hype pushing forward and leading to some valuation metrics which are clearly out of bounds compared to historical averages, on the other the beginning of a disconnect within the famed Magnificent 7. While Nvidia, Meta and Amazon continued outperforming the market, Tesla and more recently Apple and Alphabet are beginning to show signs of weakness for various reasons, be it that the EVs market does not shine anymore as per market participants previous opinion, or that the latter companies are not on top of the surging AI game. This only initiates providing some potential answers to investors which at some point became oblivious to the mortality or the maturity cycle of any business. It also dissipates a bit the pressure which was levied on the active managers last year when they had an almost impossible task as both market concentration and outperformance was coming from a few names.  Considering the various complications markets are due to sidestep in the near future, there seems to be some hope left for active portfolio management after all.

Market Environment and Performance

February’s Purchasing Managers’ Index (PMI) indicators showed that the Euro area economy moved closer to stabilization, amid an expansion in services (reading of 50.2 versus the previous month reading of 48.4) which largely offset the weakening in the manufacturing segment (reading of 46.5 versus a previous month reading of 46.6). Inflows of new orders fell the least since June 2023, while the rate of employment growth was at a seven-month high. Meanwhile price pressures showed signs of peaking with inflation easing to 2.6% from 2.8% in January, but remained slightly above preliminary estimates pushing back expectations of interest rate cuts by the ECB.

The US economy continued to defy some earlier slowdown displaying signs of continued strength. Consumer spending, business activity and employment all indicated a healthy expansion to start the year. The labour market remained particularly robust as the latest jobs reports showed a significant increase nonfarm payroll and a near half-century low employment rate. Annual inflation rate in the US increased to 3.2% in February from a five-month low of 3.1% recorded the previous month, as energy prices cooled at a slower pace. Core consumer prices eased to a two-and-a-half-year low of 3.8%.

February witnessed a continuation of the positive trend that began in late 2023, as global equity markets surged with major benchmarks reaching new highs. This upswing was driven by a resilient US economy which instilled investor confidence, compounded by a continuation of the ongoing excitement surrounding advancements in AI which fuelled interest in technology-related stocks. As well, after a sluggish January, emerging markets, particularly China experienced significant gains, bolstered by positive expectations regarding authorities’ actions to prop up the local stock market. The S&P 500 index gained 5.66% supported by the industrials, consumer discretionary and materials sectors. European markets also reached all time high levels as the EuroStoxx50 and the DAX gained 4.58% and 4.58% respectively, with consumer discretionary, financial and industrial names leading the way.

Looking at the bond market, Government bond yields rose, as the market continued to anticipate a benevolent interest rate trajectory. Investment grade ended the month lower, with European IG outperforming its US counterpart. High yield (+0.35%) – aided by the lower duration.

Fund performance

Performance for the month of February proved positive, noting a 1.77% gain for the CC Balanced Strategy Fund – in line with the moves witnessed across both equity and high-yield credit markets at large during such period.

Market and Investment Outlook

Going forward, the Manager believes the global economic landscape remains complex, as inflationary pressures might persist while central bankers remain hesitant on a decisive action regarding interest rates due to economic growth concerns. Geopolitical tensions and supply chain disruptions add further complexity to the macroeconomic landscape. The overall picture remains broadly positive as the US economy clearly outperforms other developed markets and the Chinese economy is hopeful about a much necessary boost provided by public subsidies programs. On such a backdrop, the Manager has tempered expectations about equity markets returns in the coming quarters, compounded by the impressive market rally recorded in the last three months, anticipating heightened volatility along the way. The Fund will continue its diversified allocation with focus on quality companies, particularly those which have seen recent underperformance. Nevertheless, specific allocations to growth companies should be expected going forward through tactical plays in market pockets experiencing corrections. Corporate actions, geopolitics and technical indicators will continue being considered for particular allocations, while cash levels will be used as a tool for proactive action in case of markets deterioration.

A Quick Introduction to Our Euro Equity Fund.

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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

5 year performance*

0%

*View Performance History below
Inception Date: 03 Nov 2021
ISIN: MT7000030664
Bloomberg Ticker: CCPBSCA MV
Distribution Yield (%): -
Underlying Yield (%): -
Distribution: Nil
Total Net Assets: €4.95 mn
Month end NAV in EUR: 98.11
Number of Holdings: 22
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.

Performance To Date (EUR)

Top 10 Holdings

UBS (Lux) Bond Fund - Euro High Yield
13.7%
CC Funds SICAV plc - High Income Bond Fund
9.6%
Fundsmith SICAV - Equity Fund
8.5%
FTGF ClearBridge US Large Cap Growth Fund
6.8%
Invesco Pan European Equity Fund
6.7%
Nordea 1 - European High Yield Bond Fund
6.6%
Robeco BP US Large Cap Equities
5.3%
Comgest Growth plc - Europe Opportunities
4.9%
Morgan Stanley Investment Fund
4.1%
BlackRock Global Funds - Global High Yield Bond Fund
3.6%
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
40.20%
Global
25.60%
International
18.10%
U.S.
15.60%

Asset Allocation

Fund 94.30%
ETF 5.10%
Cash 0.50%

Performance History (EUR)*

1 Year

9.84%

3 Year

-%

5 Year

-%

* 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 94.70%
USD 5.30%
GBP 0.00%
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 invests in collective investment schemes 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.

    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 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

    February 2024

    Introduction

    February presented a picture of rather exacerbated optimism in global financial markets when compared to the fragile interplay between the global economic growth, the tightening financial conditions and the simmering political tensions. As the early signs of a possible acceleration in global output were marked by leading economic indicators, the performers continued being the US, Japan, and the emerging markets, particularly India and Brazil. Additionally, China’s continued economic expansion, although not above expectations, offered some stability to the overall landscape. However, the outlook remains somewhat subdued given the projected slowdown for global output growth in 2024 compared to last year. It could be argued that the “soft landing” scenario has already become the base scenario with risks regarding the economic growth coming only from the upside. As inflationary pressures have continued their downward path across regions, it is rather the geopolitical tensions which might currently cast a long shadow over the macroeconomic environment. Beyond immediate conflicts such as Ukraine and Gaza, such uncertainties also stem from rising tensions between the US and its allies on one hand and China on the other, as trade disputes and commercial disagreements continue raising concerns about potential disruptions to global supply chains and de-globalisation. In addition, the rebalancing of power on the geopolitical stage as some emerging markets push for a recognition of their newly-discovered economic prowess into political might constitute an additional layer of uncertainty to the current situation. The coming quarters alongside the outcome of the US elections will be crucial in determining the trajectory of global financial markets. Beyond the apparent positive market momentum, navigating through these challenges going forward will not be easy.

    From the monetary front, the FED minutes from its January policy meeting revealed its worries about the possibility of inflation remaining stubbornly high which could keep interest rated at a 23-year high longer than markets previously expected. While an interest rate cut in the March meeting is now out of discussion, market participants now view the second half of the year as bringing several rate cuts, in line with the FED’s expectations at the beginning of the year. In Europe, the ECB does look more positive on the perspectives of reigning in price rises, as it is likely to cut its own inflation projections during the March meeting, particularly due to lower energy prices. But this alone will not be sufficient to reverse the historic policy tightening process, especially since wage growth remained strong and the unit labour cost was sharply higher due in part to a slump in productivity.

    Despite an expected breather after a three-month rally, equity markets posted another stellar performance in February pushed particularly in the last week by another Nvidia excellent earnings report. There were two clear trends emerging in the markets – on one hand, the AI hype pushing forward and leading to some valuation metrics which are clearly out of bounds compared to historical averages, on the other the beginning of a disconnect within the famed Magnificent 7. While Nvidia, Meta and Amazon continued outperforming the market, Tesla and more recently Apple and Alphabet are beginning to show signs of weakness for various reasons, be it that the EVs market does not shine anymore as per market participants previous opinion, or that the latter companies are not on top of the surging AI game. This only initiates providing some potential answers to investors which at some point became oblivious to the mortality or the maturity cycle of any business. It also dissipates a bit the pressure which was levied on the active managers last year when they had an almost impossible task as both market concentration and outperformance was coming from a few names.  Considering the various complications markets are due to sidestep in the near future, there seems to be some hope left for active portfolio management after all.

    Market Environment and Performance

    February’s Purchasing Managers’ Index (PMI) indicators showed that the Euro area economy moved closer to stabilization, amid an expansion in services (reading of 50.2 versus the previous month reading of 48.4) which largely offset the weakening in the manufacturing segment (reading of 46.5 versus a previous month reading of 46.6). Inflows of new orders fell the least since June 2023, while the rate of employment growth was at a seven-month high. Meanwhile price pressures showed signs of peaking with inflation easing to 2.6% from 2.8% in January, but remained slightly above preliminary estimates pushing back expectations of interest rate cuts by the ECB.

    The US economy continued to defy some earlier slowdown displaying signs of continued strength. Consumer spending, business activity and employment all indicated a healthy expansion to start the year. The labour market remained particularly robust as the latest jobs reports showed a significant increase nonfarm payroll and a near half-century low employment rate. Annual inflation rate in the US increased to 3.2% in February from a five-month low of 3.1% recorded the previous month, as energy prices cooled at a slower pace. Core consumer prices eased to a two-and-a-half-year low of 3.8%.

    February witnessed a continuation of the positive trend that began in late 2023, as global equity markets surged with major benchmarks reaching new highs. This upswing was driven by a resilient US economy which instilled investor confidence, compounded by a continuation of the ongoing excitement surrounding advancements in AI which fuelled interest in technology-related stocks. As well, after a sluggish January, emerging markets, particularly China experienced significant gains, bolstered by positive expectations regarding authorities’ actions to prop up the local stock market. The S&P 500 index gained 5.66% supported by the industrials, consumer discretionary and materials sectors. European markets also reached all time high levels as the EuroStoxx50 and the DAX gained 4.58% and 4.58% respectively, with consumer discretionary, financial and industrial names leading the way.

    Looking at the bond market, Government bond yields rose, as the market continued to anticipate a benevolent interest rate trajectory. Investment grade ended the month lower, with European IG outperforming its US counterpart. High yield (+0.35%) – aided by the lower duration.

    Fund performance

    Performance for the month of February proved positive, noting a 1.77% gain for the CC Balanced Strategy Fund – in line with the moves witnessed across both equity and high-yield credit markets at large during such period.

    Market and Investment Outlook

    Going forward, the Manager believes the global economic landscape remains complex, as inflationary pressures might persist while central bankers remain hesitant on a decisive action regarding interest rates due to economic growth concerns. Geopolitical tensions and supply chain disruptions add further complexity to the macroeconomic landscape. The overall picture remains broadly positive as the US economy clearly outperforms other developed markets and the Chinese economy is hopeful about a much necessary boost provided by public subsidies programs. On such a backdrop, the Manager has tempered expectations about equity markets returns in the coming quarters, compounded by the impressive market rally recorded in the last three months, anticipating heightened volatility along the way. The Fund will continue its diversified allocation with focus on quality companies, particularly those which have seen recent underperformance. Nevertheless, specific allocations to growth companies should be expected going forward through tactical plays in market pockets experiencing corrections. Corporate actions, geopolitics and technical indicators will continue being considered for particular allocations, while cash levels will be used as a tool for proactive action in case of markets deterioration.

  • 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

    5 year performance*

    0%

    *View Performance History below
    Inception Date: 03 Nov 2021
    ISIN: MT7000030664
    Bloomberg Ticker: CCPBSCA MV
    Distribution Yield (%): -
    Underlying Yield (%): -
    Distribution: Nil
    Total Net Assets: €4.95 mn
    Month end NAV in EUR: 98.11
    Number of Holdings: 22
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.

    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
    13.7%
    CC Funds SICAV plc - High Income Bond Fund
    9.6%
    Fundsmith SICAV - Equity Fund
    8.5%
    FTGF ClearBridge US Large Cap Growth Fund
    6.8%
    Invesco Pan European Equity Fund
    6.7%
    Nordea 1 - European High Yield Bond Fund
    6.6%
    Robeco BP US Large Cap Equities
    5.3%
    Comgest Growth plc - Europe Opportunities
    4.9%
    Morgan Stanley Investment Fund
    4.1%
    BlackRock Global Funds - Global High Yield Bond Fund
    3.6%

    Top Holdings by Country

    European Region
    40.20%
    Global
    25.60%
    International
    18.10%
    U.S.
    15.60%

    Asset Allocation

    Fund 94.30%
    ETF 5.10%
    Cash 0.50%

    Performance History (EUR)*

    1 Year

    9.84%

    3 Year

    -%

    5 Year

    -%

    * 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 94.70%
    USD 5.30%
    GBP 0.00%
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