Investment Objectives

The Fund aims to achieve a combination of income, with the possibility of 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 Income Strategy Fund is:

  • Seeking to earn a high level of regular Income
  • Seeking an actively managed & diversified investment primarily in income-yielding funds 

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 100% 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 20% 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, bond 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. Output fell the least since June while the decline in factory sales was the softest in four months. 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%. France too saw inflationary pressures easing, falling to 5.9 from 6.4%, as cosst declined for energy and services. Largely, inflation in the Euro area, dropped to 9.2 from 10.1%. Core inflation, which excludes transitory or temporary price volatility, edged higher to 5.2%. Supporting such trajectory was the decline in Producer Prices (PPI) – a forward looking indicator measuring the average change in the price of goods and services sold by manufacturers and producers in the wholesale market – down to 27.1 from 30.5%.

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 – the fastest pace of contraction in the service sector for four months and the quickest since 2009.

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 0.1% increase in November and below expectations of a flat reading. Data, from the employment front, 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.

Throughout the month of December, market participants continued to monitor economic data and interpret how such figures will ultimately dictate policy action going forward. Notably, whether monetary politicians will maintain their aggressive hawkish stance or whether there is a scope for slowing the pace. Recent market trends taught us that positive numbers tend to be a drag on markets and serve as an additional dose of monetary tightening. From a performance 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%.

Fund performance

Performance for the month of December proved negative, noting a 0.83% decline for the CC Income Portfolio Fund – in line with the moves witnessed across 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 11.59%.

Market and investment outlook

In 2023, the Manager expects credit markets to largely remain conditioned by monetary decisions taken, continuing to substantially alter benchmark yields. A longer hiking cycle and a higher terminal rate is now anticipated in the US. The quantum of each hike, however may possibly be lower than we have over recent months envisaged. This, remaining data dependent on mainly inflation and tightness within the labour market. In Europe the economic situation starkly varies. In terms of monetary policy employed, the ECB – acting with a lag and at a somewhat slower pace when compared to the Fed – is expected to maintain its recent pace. Consumer sentiment however remains at notable lows and the energy crisis, at present allayed by warmer weather, still looms. Colder weather and/or adverse decisions by OPEC+/Russia may indeed threaten energy supplies and thus higher energy prices, in recent weeks proving benevolent to home owners and businesses.

A quick introduction to our Global High Income Bond 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

RETURN (SINCE INCEPTION)*

-12.70%

*View Performance History below
Inception Date: 15 Sep 2021
ISIN: MT7000030680
Bloomberg Ticker: CCPISAE MV
Entry Charge: up to 2.50%
Total Expense Ratio: 1.94%
Exit Charge: None
Distribution Yield (%): -
Underlying Yield (%): -
Distribution: 31/05 and 30/11
Total Net Assets: 6.67 mn
Month end NAV in EUR: 85.27
Number of Holdings: 13
Auditors: Deloitte Malta
Legal Advisor: GANADO Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 88.2

Performance To Date (EUR)

Top 10 Holdings

UBS (Lux) Bond Fund - Euro High Yield
20.7%
CC Funds SICAV plc - High Income Bond Fund
10.6%
Robeco Capital Growth Funds - High Yield Bonds
8.2%
Nordea 1 - European High Yield Bond Fund
8.1%
DWS Invest Euro High Yield Corp
7.1%
BlackRock Global High Yield Bond Fund
6.9%
AXA World Funds - Global High Yield Bonds
6.9%
Janus Henderson Horizon Global High Yield Bond Fund
6.8%
Schroder International Selection Fund Global High Yield
6.6%
Fidelity Funds - European High Yield Bond Fund
6.3%
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

Europe
37.70%
Global
37.30%
International
20.6%

Asset Allocation

Fund 89.40%
ETF 7.20%
Cash 3.40%

Performance History (EUR)*

YTD***

-11.59%

2021

-1.26%

1-month

-0.83%

3-month

2.99%

6-month

2.06%

12-month

-11.59%

* The Distributor Share Class (Class A) was launched on 15 September 2021.
** Performance figures are calculated using the Value Added Monthly Index "VAMI" principle. The VAMI calculates the total return gained by aninvestor from reinvestment of any dividends and additional interest gained through compounding.
*** The Distributor Share Class (Class A) was launched on 15 September 2021.
**** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

Currency Allocation

Euro 100.0%
USD 0.0%
GBP 0.0%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The Fund aims to achieve a combination of income, with the possibility of 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 Income Strategy Fund is:

    • Seeking to earn a high level of regular Income
    • Seeking an actively managed & diversified investment primarily in income-yielding funds 
    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, bond 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. Output fell the least since June while the decline in factory sales was the softest in four months. 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%. France too saw inflationary pressures easing, falling to 5.9 from 6.4%, as cosst declined for energy and services. Largely, inflation in the Euro area, dropped to 9.2 from 10.1%. Core inflation, which excludes transitory or temporary price volatility, edged higher to 5.2%. Supporting such trajectory was the decline in Producer Prices (PPI) – a forward looking indicator measuring the average change in the price of goods and services sold by manufacturers and producers in the wholesale market – down to 27.1 from 30.5%.

    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 – the fastest pace of contraction in the service sector for four months and the quickest since 2009.

    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 0.1% increase in November and below expectations of a flat reading. Data, from the employment front, 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.

    Throughout the month of December, market participants continued to monitor economic data and interpret how such figures will ultimately dictate policy action going forward. Notably, whether monetary politicians will maintain their aggressive hawkish stance or whether there is a scope for slowing the pace. Recent market trends taught us that positive numbers tend to be a drag on markets and serve as an additional dose of monetary tightening. From a performance 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%.

    Fund performance

    Performance for the month of December proved negative, noting a 0.83% decline for the CC Income Portfolio Fund – in line with the moves witnessed across 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 11.59%.

    Market and investment outlook

    In 2023, the Manager expects credit markets to largely remain conditioned by monetary decisions taken, continuing to substantially alter benchmark yields. A longer hiking cycle and a higher terminal rate is now anticipated in the US. The quantum of each hike, however may possibly be lower than we have over recent months envisaged. This, remaining data dependent on mainly inflation and tightness within the labour market. In Europe the economic situation starkly varies. In terms of monetary policy employed, the ECB – acting with a lag and at a somewhat slower pace when compared to the Fed – is expected to maintain its recent pace. Consumer sentiment however remains at notable lows and the energy crisis, at present allayed by warmer weather, still looms. Colder weather and/or adverse decisions by OPEC+/Russia may indeed threaten energy supplies and thus higher energy prices, in recent weeks proving benevolent to home owners and businesses.

  • 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)*

    -12.70%

    *View Performance History below
    Inception Date: 15 Sep 2021
    ISIN: MT7000030680
    Bloomberg Ticker: CCPISAE MV
    Entry Charge: up to 2.50%
    Total Expense Ratio: 1.94%
    Exit Charge: None
    Distribution Yield (%): -
    Underlying Yield (%): -
    Distribution: 31/05 and 30/11
    Total Net Assets: 6.67 mn
    Month end NAV in EUR: 85.27
    Number of Holdings: 13
    Auditors: Deloitte Malta
    Legal Advisor: GANADO Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 88.2

    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

    UBS (Lux) Bond Fund - Euro High Yield
    20.7%
    CC Funds SICAV plc - High Income Bond Fund
    10.6%
    Robeco Capital Growth Funds - High Yield Bonds
    8.2%
    Nordea 1 - European High Yield Bond Fund
    8.1%
    DWS Invest Euro High Yield Corp
    7.1%
    BlackRock Global High Yield Bond Fund
    6.9%
    AXA World Funds - Global High Yield Bonds
    6.9%
    Janus Henderson Horizon Global High Yield Bond Fund
    6.8%
    Schroder International Selection Fund Global High Yield
    6.6%
    Fidelity Funds - European High Yield Bond Fund
    6.3%

    Top Holdings by Country

    Europe
    37.70%
    Global
    37.30%
    International
    20.6%

    Asset Allocation

    Fund 89.40%
    ETF 7.20%
    Cash 3.40%

    Performance History (EUR)*

    YTD***

    -11.59%

    2021

    -1.26%

    1-month

    -0.83%

    3-month

    2.99%

    6-month

    2.06%

    12-month

    -11.59%

    * The Distributor Share Class (Class A) was launched on 15 September 2021.
    ** Performance figures are calculated using the Value Added Monthly Index "VAMI" principle. The VAMI calculates the total return gained by aninvestor from reinvestment of any dividends and additional interest gained through compounding.
    *** The Distributor Share Class (Class A) was launched on 15 September 2021.
    **** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

    Currency Allocation

    Euro 100.0%
    USD 0.0%
    GBP 0.0%
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