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”) will 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 Growth Strategy Fund is:

  • Seeking to achieve long-term capital appreciation
  • Seeking an actively managed & diversified investment in equity funds and bond funds
  • Planning to hold their investment for at least 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 30% 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 50% 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 100% of its assets in CISs that are permitted to invest 65% or more of their assets in equity securities.

Commentary

December 2022

Introduction

This year’s December failed to fulfil market expectations for a Santa rally, marking the end of the most difficult year in decades for markets. Market participants were caught again on the wrong foot by a hawkish FED, whose expectations regarding where interest rates will be as at the end of 2023 remained elevated compared to market consensus. Despite bond markets showed no sign of stress, with yields significantly lower compared to where they were six months ago, the prospects of real economic and corporate earnings recessions have clearly influenced market sentiment. While the expected economic recession in 2023 has become a virtual certainty for analysts and researchers, the unexpected shift in economic policy in China has the potential of changing the financial markets focus going forward. Indeed, after the lifting of zero-covid policy measures which were in force since 2020, new public policies have been announced to prop up the flagging property sector, effectively reversing the “three red lines” policy unveiled two years ago. Notwithstanding the unpredictable humanitarian impact of a spike in covid cases in the near future, the efforts to return the Chinese economy on consistent growth path could change completely portfolio allocation playbooks devised so far for the coming year. Meanwhile, in Europe the warmest winter in the last decade capped to the downside energy consumption and prices, providing an unexpected positive tone to local markets, including diminishing “fragmentation” risks in fixed income markets. The US economy continues to prove more resilience than expected in a higher interest rates environment, focusing the public debate more on core inflation stickiness than on the odds of a hard landing.  The only economic certainty regarding 2023 to date is the uncertainty whether a recession will that of a soft or a hard landing.

From the monetary front, the FED raised its benchmark interest rate with another 50bps, to a 4.25%-4.5% targeted range, the highest level in the last 15 years. In addition, FOMC members expect keeping rates higher through next year, with the expected terminal rate being around 5.1%. Meanwhile the ECB pushed its key rate from 1.5% to 2% and confirmed it would need to raise rates further to reign inflation. It also indicated that from March 2023 it will begin reducing its balance sheet, however underlining that it sees a potential recession in the region as being relatively short-lived. Finally, the Bank of Japan, the last major central bank keeping a relatively easing monetary policy, shocked markets when it decided easing its bond yield control allowing long-term interest rates to raise more, thus easing the costs of its ongoing monetary stimulus.

December was the last ache of the most painful year in equity markets since the Great Financial Crisis. Even if bond yields could have provided a floor on a fundamental level by at least not challenging valuation levels further, this was not enough to alleviate growing concerns regarding corporate earnings expectations. In an environment comprising attractive opportunities in the fixed income space, equity markets valuations are based on highly optimistic assumptions on how companies will weather macroeconomic headwinds without eroding operational margins. As well, as inflation expectations will linger into the next year, it would be also highly optimistic to assume that companies will continue fully passing on to the end consumer increases in their cost base. In reality, gloomy expectations loomed also before the most recent earnings seasons, in time to be denied by resilient corporate reports. Ultimately the as yet elevated inflation levels, are aligned to the expectations for an economic reason to prevail.

Market Environment and Performance

Forward looking indicators continued depicting a somewhat gloomy landscape in Europe, noting a deterioration in the rate of growth. Euro-area manufacturing PMI remained in contractionary territory at a 47.8 reading, despite inflation easing and supply chains stabilizing. Services PMI improved somewhat at 49.8 from a reading of 48.5 in the previous month, posting a fifth consecutive monthly contraction reading. In December the annual inflation rate eased to 9.2% from 10.1% in the previous month, however core inflation which excludes transitory or temporary price volatility edged higher to a 5.2% level.

In the U.S. aggregate business activity pointed to a solid contraction across the private sector. Notably, the December composite PMI reading fell to 44.6 from last month level of 46.4. Manufacturing PMI depicted the biggest contraction in factory activity since May 2020. Meanwhile the service sector posted the fastest pace of contraction for the last four months. Annual inflation rate in the US slowed further to 6.5%, in line with the expectations. Month-on-month, consumer prices were at -0.1%, below expectations of a 0.1% rise, namely reflecting lower energy prices.

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.

Fund Performance

Performance for the month of December proved negative, noting a 2.55% decline for the CC Growth Portfolio Fund – in line with the moves witnessed across both equity markets and high credit corporate credit. 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 16.64%.

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. Recent earnings forecasts downgrades are expected to be followed by a challenging fourth quarter corporate earnings season which will again ask questions about current market valuations. Overall 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)*

-16.98%

*View Performance History below
Inception Date: 03 Nov 2021
ISIN: MT7000030672
Bloomberg Ticker: CCPGSCA MV
Entry Charge: up to 2.50%
Total Expense Ratio: 2.44%
Exit Charge: None
Distribution Yield (%): -
Underlying Yield (%): -
Distribution: Nil
Total Net Assets: €3.98 mn
Month end NAV in EUR: 83.02
Number of Holdings: 18
Auditors: Deloitte Malta
Legal Advisor: GANADO Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 71.2

Performance To Date (EUR)

Top 10 Holdings

CC Funds SICAV plc - High Income Bond Fund
9.8%
UBS Lux Bond Fund - Euro High Yield Shares
9.6%
Fundsmith SICAV - Equity Fund
9.3%
Invesco Pan European Equity Fund
9.2%
Comgest Growth plc - Europe Opportunities
6.2%
Legg Mason Global Funds plc
5.9%
UBS Lux Equity Fund - European Shares
5.8%
Robeco BP US Large Cap Equities
5.6%
Vontobel Fund - US Equity Shares
4.9%
Morgan Stanley Investment Fund
4.9%
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
30.80%
U.S.
20.20%
International
19.80%
Global
14.50%
China
4.40%

Asset Allocation

Fund 88.80%
Cash 10.20%
ETF 1.00%

Performance History (EUR)*

YTD

-16.64%

2021

-0.41%

1-month

-2.55%

3-month

2.30%

6-month

0.73%

12-month

-16.64%

* 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 94.40%
USD 4.6%
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”) will 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 Growth Strategy Fund is:

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

    This year’s December failed to fulfil market expectations for a Santa rally, marking the end of the most difficult year in decades for markets. Market participants were caught again on the wrong foot by a hawkish FED, whose expectations regarding where interest rates will be as at the end of 2023 remained elevated compared to market consensus. Despite bond markets showed no sign of stress, with yields significantly lower compared to where they were six months ago, the prospects of real economic and corporate earnings recessions have clearly influenced market sentiment. While the expected economic recession in 2023 has become a virtual certainty for analysts and researchers, the unexpected shift in economic policy in China has the potential of changing the financial markets focus going forward. Indeed, after the lifting of zero-covid policy measures which were in force since 2020, new public policies have been announced to prop up the flagging property sector, effectively reversing the “three red lines” policy unveiled two years ago. Notwithstanding the unpredictable humanitarian impact of a spike in covid cases in the near future, the efforts to return the Chinese economy on consistent growth path could change completely portfolio allocation playbooks devised so far for the coming year. Meanwhile, in Europe the warmest winter in the last decade capped to the downside energy consumption and prices, providing an unexpected positive tone to local markets, including diminishing “fragmentation” risks in fixed income markets. The US economy continues to prove more resilience than expected in a higher interest rates environment, focusing the public debate more on core inflation stickiness than on the odds of a hard landing.  The only economic certainty regarding 2023 to date is the uncertainty whether a recession will that of a soft or a hard landing.

    From the monetary front, the FED raised its benchmark interest rate with another 50bps, to a 4.25%-4.5% targeted range, the highest level in the last 15 years. In addition, FOMC members expect keeping rates higher through next year, with the expected terminal rate being around 5.1%. Meanwhile the ECB pushed its key rate from 1.5% to 2% and confirmed it would need to raise rates further to reign inflation. It also indicated that from March 2023 it will begin reducing its balance sheet, however underlining that it sees a potential recession in the region as being relatively short-lived. Finally, the Bank of Japan, the last major central bank keeping a relatively easing monetary policy, shocked markets when it decided easing its bond yield control allowing long-term interest rates to raise more, thus easing the costs of its ongoing monetary stimulus.

    December was the last ache of the most painful year in equity markets since the Great Financial Crisis. Even if bond yields could have provided a floor on a fundamental level by at least not challenging valuation levels further, this was not enough to alleviate growing concerns regarding corporate earnings expectations. In an environment comprising attractive opportunities in the fixed income space, equity markets valuations are based on highly optimistic assumptions on how companies will weather macroeconomic headwinds without eroding operational margins. As well, as inflation expectations will linger into the next year, it would be also highly optimistic to assume that companies will continue fully passing on to the end consumer increases in their cost base. In reality, gloomy expectations loomed also before the most recent earnings seasons, in time to be denied by resilient corporate reports. Ultimately the as yet elevated inflation levels, are aligned to the expectations for an economic reason to prevail.

    Market Environment and Performance

    Forward looking indicators continued depicting a somewhat gloomy landscape in Europe, noting a deterioration in the rate of growth. Euro-area manufacturing PMI remained in contractionary territory at a 47.8 reading, despite inflation easing and supply chains stabilizing. Services PMI improved somewhat at 49.8 from a reading of 48.5 in the previous month, posting a fifth consecutive monthly contraction reading. In December the annual inflation rate eased to 9.2% from 10.1% in the previous month, however core inflation which excludes transitory or temporary price volatility edged higher to a 5.2% level.

    In the U.S. aggregate business activity pointed to a solid contraction across the private sector. Notably, the December composite PMI reading fell to 44.6 from last month level of 46.4. Manufacturing PMI depicted the biggest contraction in factory activity since May 2020. Meanwhile the service sector posted the fastest pace of contraction for the last four months. Annual inflation rate in the US slowed further to 6.5%, in line with the expectations. Month-on-month, consumer prices were at -0.1%, below expectations of a 0.1% rise, namely reflecting lower energy prices.

    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.

    Fund Performance

    Performance for the month of December proved negative, noting a 2.55% decline for the CC Growth Portfolio Fund – in line with the moves witnessed across both equity markets and high credit corporate credit. 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 16.64%.

    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. Recent earnings forecasts downgrades are expected to be followed by a challenging fourth quarter corporate earnings season which will again ask questions about current market valuations. Overall 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)*

    -16.98%

    *View Performance History below
    Inception Date: 03 Nov 2021
    ISIN: MT7000030672
    Bloomberg Ticker: CCPGSCA MV
    Entry Charge: up to 2.50%
    Total Expense Ratio: 2.44%
    Exit Charge: None
    Distribution Yield (%): -
    Underlying Yield (%): -
    Distribution: Nil
    Total Net Assets: €3.98 mn
    Month end NAV in EUR: 83.02
    Number of Holdings: 18
    Auditors: Deloitte Malta
    Legal Advisor: GANADO Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 71.2

    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

    CC Funds SICAV plc - High Income Bond Fund
    9.8%
    UBS Lux Bond Fund - Euro High Yield Shares
    9.6%
    Fundsmith SICAV - Equity Fund
    9.3%
    Invesco Pan European Equity Fund
    9.2%
    Comgest Growth plc - Europe Opportunities
    6.2%
    Legg Mason Global Funds plc
    5.9%
    UBS Lux Equity Fund - European Shares
    5.8%
    Robeco BP US Large Cap Equities
    5.6%
    Vontobel Fund - US Equity Shares
    4.9%
    Morgan Stanley Investment Fund
    4.9%

    Top Holdings by Country

    European Region
    30.80%
    U.S.
    20.20%
    International
    19.80%
    Global
    14.50%
    China
    4.40%

    Asset Allocation

    Fund 88.80%
    Cash 10.20%
    ETF 1.00%

    Performance History (EUR)*

    YTD

    -16.64%

    2021

    -0.41%

    1-month

    -2.55%

    3-month

    2.30%

    6-month

    0.73%

    12-month

    -16.64%

    * 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 94.40%
    USD 4.6%
    GBP 0.0%
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