Solid Future Defensive Fund

The Fund aims to deliver a positive total return in any three year period from a flexibly managed portfolio of global assets whilst maintaining a monthly VaR with a 99% confidence interval at or below 5% at all times. The Investment Manager shall invest primarily in a diversified portfolio across a wide spectrum of industries and sectors primarily via bonds, equities and eligible ETFs. Investment in these asset classes either directly or indirectly through UCITS Funds and/ or eligible non UCITS Funds.

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

The Fund is classified under Article 6 of the SFDR meaning that the investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

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

September 2026

Introduction
In September, financial markets navigated an increasingly challenging macroeconomic environment, characterised by persistent inflationary pressures, rising sovereign bond yields and mounting disruptions to global trade. The U.S. economy remained relatively resilient, although employment growth showed signs of moderation, while elevated energy costs continued to complicate the inflation outlook. In Europe, economic activity proved more resilient than anticipated, but persistent energy-related price pressures reinforced expectations of restrictive monetary policy. The most significant development was the sharp increase in developed-market sovereign yields, reflecting a combination of persistent inflation concerns, substantial government borrowing requirements and expectations of higher interest rates for longer. Meanwhile, geopolitical tensions intensified around the Strait of Hormuz and Bab el-Mandeb, two critical arteries of international commerce. Disruptions to energy shipments and maritime trade routes increased transportation and insurance costs, exacerbating supply-chain pressures and raising the prospect of renewed trade frictions and imported inflation. These developments further complicated the outlook for global growth and monetary policy. Despite these headwinds, equity markets demonstrated selective resilience, however, the growing divergence between equity market optimism and increasingly restrictive bond-market conditions highlighted an important vulnerability. The approaching U.S. midterm elections and the upcoming earning season are the main factors influencing the market participants’ approach to markets. While market sentiment still tilts toward optimism, the lack of significant volatility in recent months should keep investors focused going forward.

On the monetary policy front, the Federal Reserve delivered a widely anticipated 25-basis-point rate increase, acknowledging that inflation remains elevated. Updated Federal Open Market Committee (FOMC) projections indicated that a majority of policymakers envisage the possibility of further tightening before year-end. Persistent energy price pressures remain a key concern, particularly given the risk of higher inflation expectations and broader second-round effects. Meanwhile, substantial investment in artificial intelligence infrastructure could add to inflationary pressures through increased demand for energy, equipment and capital. In Europe, the ECB also raised its deposit rate by 25 basis points, while maintaining a cautious outlook amid continued geopolitical uncertainty. President Lagarde highlighted the Eurozone economy’s greater-than-expected resilience but warned that elevated energy costs and persistent global trade tensions continue to pose risks to growth and price stability. Overall, the monetary policy outlook remains challenging, with prolonged geopolitical tensions and elevated energy prices delaying inflation’s return to the 2% target, reinforcing expectations that interest rates may remain higher for longer.

September marked another positive month for global equities, with technology continuing to lead market performance. However, the sharp increase in developed-market sovereign bond yields emerged as a significant concern, highlighting a growing divergence between equity market optimism and fixed-income expectations. While equities remained supported by resilient earnings prospects and confidence that the Federal Reserve would avoid a prolonged tightening cycle, rising bond yields reflected persistent inflation concerns and expectations of structurally higher interest rates. This divergence is particularly relevant given the substantial financing requirements of the artificial intelligence infrastructure investment cycle, which are adding to global capital demand alongside elevated fiscal deficits and record sovereign debt levels. The resulting competition for capital could increasingly challenge equity valuations, particularly across technology companies where elevated multiples depend on sustained earnings growth and relatively stable discount rates. A prolonged increase in government bond yields could therefore undermine market confidence even in the absence of a deterioration in corporate fundamentals. Whether bond markets ultimately trigger a broader equity market reassessment remains uncertain. Nevertheless, rising sovereign yields represent an increasingly important risk to the sustainability of the current rally, reinforcing the importance of valuation discipline, diversification and prudent portfolio positioning.

Meanwhile, credit markets posted negative returns amid persistent inflation, resilient economic activity and a reassessment of rate expectations. Elevated energy prices and 25bps rate hikes by both the Fed and ECB reinforced expectations of further tightening.

Government bond yields rose sharply, with the US 10-year Treasury yield increasing 76bps over Q3 to 5.22%. The German 10-year Bund yield reached 3.64%, while the France-Germany spread widened to nearly 130bps amid fiscal concerns. Corporate credit also declined, driven by rising government bond yields. Investment-grade credit underperformed due to its longer duration, while high-yield proved more resilient, supported by higher carry and shorter duration.

Market Environment and Performance
In the Euro area, business surveys reinforced the improving outlook, with the S&P Eurozone Composite Purchasing Managers’ Index (PMI) rising to 53.1 in September from 52.0 in August, reaching its highest level in nearly three and half years. The latest reading pointed to a solid acceleration in private-sector activity, with both manufacturing and services recording stronger growth as the third quarter ended. Consumer price inflation edged higher to 3.8% in September from 3.2% in the previous month, exceeding market expectations. The rate reached its highest level since September 2023, driven largely by a surge in energy prices amid continued hostilities in the Middle East.

In the U.S., forward-looking indicators remained encouraging. The S&P Global U.S. Composite Purchasing Managers’ Index (PMI) rose to 58.4 in September from 56 in the previous month, matching the strongest expansion in private sector business activity in more than five years. Growth accelerated across both manufacturing and services, pointing to broad-based strength in the U.S. economy.

Fund Performance
In the month of September, the Solid Future Defensive Fund registered a 0.83 per cent loss. On the equity allocation, the Fund’s allocation has been reviewed and rebalanced, as the Manager responded to the overriding market volatility. The Prosus NV and Boston Scientific exposures have been liquidated and the Snowflake, AMD and Crowdstrike Holdings positions trimmed in order to take off the table some of the profits accrued and decrease exposure to market segments not favoured by the current market momentum. From the fixed income front, the manager continued to selectively add to existing positions and rotate into issuers offering attractive relative value, while maintaining a disciplined focus on credit quality. During the month, the fund initiated positions in Boels, Teva Pharmaceutical and RCI Banque, while rotating into new issues from existing issuers as they came to market at higher yields amid prevailing market conditions. These included Brightstar Lottery, Dufry, ZF Europe and Grünenthal.

Market and Investment Outlook
Looking ahead, the Manager expects global economic growth to remain moderate, supported by the relative resilience of the U.S. economy, although persistently elevated energy prices and increasingly restrictive financial conditions continue to weigh on the outlook. Europe remains more vulnerable to these pressures, reflecting its greater sensitivity to energy costs and weaker underlying growth dynamics. Monetary policy has become increasingly hawkish on both sides of the Atlantic, while the sharp rise in sovereign bond yields has potentially created headwinds for economic activity and equity valuations. Political uncertainty surrounding the upcoming U.S. midterm elections represents a further source of potential volatility, particularly given the implications of a possible Democratic sweep for fiscal and regulatory policy. Meanwhile, the approaching corporate earnings season will provide an important test of whether earnings momentum can continue to justify elevated market valuations.

From the equity front, the Manager maintains a cautiously constructive outlook for equities, supported by resilient corporate fundamentals but tempered by rising macroeconomic and political risks. Portfolio positioning remains selective and valuation-disciplined, favouring high-quality, cash-generative businesses with sustainable growth prospects, while retaining flexibility to capitalise on market dislocations offering attractive long-term risk-adjusted returns. In fixed income, we maintain our preference for high-yield credit, which continues to outperform investment-grade bonds amid rising yields. We expect carry to remain the primary driver of total returns, rather than capital appreciation.