Investment Objectives

The Fund aims to deliver a return over and above that of the MSCI All Country World Index in Euro. To achieve the fund’s investment objective, the Investment Manager shall invest in a flexibly managed and diversified portfolio of equities and ETFs, across a wide spectrum of industries and sectors.

The Fund is actively managed and does not seek to replicate the MSCI All Country World Index, therefore the Fund is not managed by reference to any benchmark index.

 

Investor Profile

The Investment Manager will invest in a flexibly managed portfolio of equities invested around the world, with the aim of delivering a return superior to that of the MSCI All Country World Index in Euro. The investment approach combines in-depth research to determine the value of assets over the medium to long term to identify investment opportunities.

Fund Rules

The Investment Manager shall invest primarily in a diversified portfolio across a wide spectrum of industries and sectors primarily via equities and eligible ETFs. The Investment Manager may invest in these asset classes either directly or indirectly through UCITS Funds and/ or eligible non UCITS Funds which will have the same investment objective/policy as that of the sub fund. The sub-Fund will not invest in funds managed by the Investment Manager.

The Investment Manager, on behalf of the Sub-Fund, intends to diversify the assets of the Sub-Fund broadly among countries, industries and sectors, but reserves the right to invest a substantial portion of the Sub-Fund’s assets in one or more countries (or regions) if economic and business conditions warrant such investments.

Below are some rules at a glance, please refer to the offering supplement for full details.

  • The Investment Manager will not invest in funds which have a management fee of over 3%
  • The fund will not invest in funds managed by the Investment Manager themself
  • The Fund may invest in Real Estate Investment Trusts “REITs” via UCITS-eligible ETFs and/or Collective Investment Schemes and securities related to real estate assets
  • Investments in equity securities may include, but are not limited to, dividend-paying securities, equities, exchange traded funds and preferred shares of global issuers

Commentary

March 2024

Introduction

As March draw to a close there is a clear feeling that market participants have moved on from what was considered so far to be the main game-changer in town, namely central banks, and focus more on other factors that move markets, namely corporate earnings and GDP growth. This achieved the feat of pushing markets higher in spite of decreasing odds of monetary easing in the immediate to medium term. With every month of leading macroeconomic indicators showing no negative impact in the real economy from high interest rates the discussion slowly moves to what part of the economic cycle are we currently experiencing. Beyond the ad nauseam AI talks in the main media, it is quite extraordinary how the global economy managed to weather not only a higher cost of capital, but also the impact of tariffs levied in recent years by de-globalization trends or supply chain bottlenecks caused by geopolitical conflicts. One can ask himself whether we have already achieved a new normal economic state where higher cost of capital warrant less economic mobility, therefore what markets are left with are only global economic corporate behemoths with competitive position delivering earnings generating powers that guarantee increasing stock prices in perpetuity. But financial markets history and the economic cycle theory do make a case for a return to normality sooner or later. This will translate at some point into economic recession, corporate defaults and declining stock markets. When this will happen is anyone’s guess, but one basic error is relying on economists and analysts’ opinion on when such events will occur. Let us not forget that 2023 was supposed to have been the most anticipated economic recession in history, which eventually did not materialise.   

From the monetary front, the FED has opted to maintain its federal funds interest rate unchanged as widely predicted by market participants. Along with the decision, FED officials pencilled in three quarter-percentage point cuts by the end of the year, while the updated “dot plot” also indicates three cuts next year, one fewer than last December. Additionally, revised forecasts for 2024 GDP growth were adjusted upwards, suggesting resilience in the face of tighter monetary policy. In Europe, the ECB also opted to hold its key interest unchanged, while latest comments from its main representatives do paint a pre-committal for a June rate cut. While there is a high bar for this not to be delivered, there is a wide range of possible outcomes in subsequent months, depending on further progress with disinflation.

Equity markets seem to having reached a levitating state as they posted the strongest rally in the last 5 years while reaching all-time highs in all major geographies – US, Europe and Japan. As this happened on a backdrop of ever diminishing number of FED interest rate cuts expected this year, even the most positive forecasts regarding global economic growth could not shadow the stretched valuation picture painted currently in the market. Some things that have to happen in order to prop up current market levels include a significant increase in market breath (i.e. strong performance in names other than recent performers) and a least a temporary range trading (i.e. under par market performance for a while). While the first has already become apparent in the last month, it is the second factor that worries most market participants, particularly in a very attractive yield offered by bond markets. With all most compelling investment-themes in the last 18 months having already performed for their faithful, it looks like the next couple of quarters will be more difficult to navigate than the usual, as there is no clear growth driver markets could rely on.

Market Environment and Performance

March Purchasing Managers’ Index (PMI) indicators showed that the Euro area economy moved closer to stabilization, amid a modest recovery in services (reading of 51.1 versus the previous month reading of 50.2) largely offsetting the weakening manufacturing segment (reading of 45.7 versus a previous month reading of 46.5). New orders declined at the slowest rate in ten months, and backlogs of work were depleted at the weakest rate in nine months, while employment saw modest growth. Headline inflation declined to 2.4%, marginally down from February’s 2.6%. The core rate excluding volatile food and energy prices also cooled to 2.9%.

The US economy continued to defy some earlier sings of slowdown displaying signs of continued strength. Consumer spending, business activity and employment all indicated a healthy expansion to start the year, advancing on an upwardly revised 3.4% QoQ growth in Q4 2023. The labour market remained particularly robust, with the March jobs report showing a significant increase in nonfarm payroll jobs and sustained low unemployment rate. Annual inflation rate in the US accelerated for a second consecutive month to 3.5%, the highest level since September 2023, compared to February’s 3.2%. Core consumer prices eased to a near three-year low of 3.8%.

Somewhat surprisingly, March continued the rally in equity markets, probably on a momentum factor from the positive fourth quarter earnings season. However, there was a change in market leadership, as technology underperformed, while unusual leaders like energy, materials and utilities rebounded nicely. Other unexpected trends for the month include the continuation of Europe outperforming US and the Magnificent 7 slowly losing steam compared to the rest of the market. The S&P 500 index gained 3.14% supported by benevolent numbers continuing to pour in from the real economy. European markets also reached all time high levels as the EuroStoxx50 and the DAX gained 4.22% and 4.61% respectively, with real estate, materials and energy names leading the way.

Fund Performance

In the month of March , the Solid Future Dynamic Fund registered a 3.02 per cent gain. The Fund’s allocation has been adjusted, as the Manager repositioned it to better respond to the recent market developments. New conviction names Adobe Systems, KLA Corp, Booking Holdings and GSK PLC were added based on compelling in-house valuation models’ fair values and a very interesting risk-adjusted entry levels. As well, holdings in Palo Alto Networks and the Xtrackers MSCI Japan UCITS ETF have been slightly increased as they reflect some of the Manager’s most compelling investment themes currently. Holdings in ConocoPhillips, HSBC Holdings and Cisco Systems have been liquidated as recent earnings reports and market trends showed limited upside potential in our view. As well, positions in Lowe’s Corp, Apple and Amundi MSCI Emerging Markets ex China ETF have been downsized with a view to cashing in some of the sizeable profits already achieved. Cash levels have been slightly increased.

Market and Investment Outlook

Going forward, the Manager believes the global economic landscape remains complex, as inflationary pressures seem to have stopped their receding trend particularly on the back of services, driving further central bankers’ hesitations on decisively cutting interest rates. Geopolitical tensions have also recently upended global energy prices adding further uncertainty as regards future developments in the macroeconomic landscape. While the skies of the US economy are still clear of any material cloud and the Chinese economy has recently posted encouraging signs as regards a potential improvement in economic growth, there might be some other potential tensions building up beneath the apparently positive picture. On such backdrop, the Manager continues having a conservative view on equity markets over the coming quarters, as the very strong market rally recorded in the last months, raises the odds for a retracement. The Fund will continue its diversified allocation with a focus on quality companies. Specific allocation to companies benefitting from secular growth trends irrespective of the next move in interest rates should be expected going forward as tactical plays. Cash levels will be used as a tool for proactive action in case of markets deterioration.

A quick introduction to our Solid Future Dynamic 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

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

5 year performance*

37.77%

*View Performance History below
Inception Date: 25 Oct 2011
ISIN: MT7000003679
Bloomberg Ticker: SFUDYNA MV
Distribution Yield (%): N/A
Underlying Yield (%): N/A
Distribution: N/A
Total Net Assets: 40.6 mn
Month end NAV in EUR: 243.98
Number of Holdings:
Auditors: PriceWaterhouse Coopers
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.

Performance To Date (EUR)

Top 10 Holdings

Walt Disney Co/The
5.9%
Bank of America Corp
5.0%
Alphabet Inc
4.9%
Amazon Inc
4.8%
Samsung Electronics Co Ltd
4.8%
Pfizer Inc
4.4%
BSF - European Opp
4.3%
Taiwan Semiconductor
4.1%
Microsoft Corp
3.7%
Xtrackers MSCI Japan
3.1%

Major Sector Breakdown*

Information Technology
27.6%
Financials
16.5%
Consumer Discretionary
14.7%
Asset 7
Communications
12.4%
Health Care
10.2%
Industrials
5.1%
** Including exposure to CIS, adopting a look-through approach. 'Benchmark Deviation' refers to overweight/underweight exposure vs Benchmark
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*

North America
69.1%
Europe ex UK
12.9%
Emerging/Frontier Markets ex China
10.3%
Japan
4.0%
Asia Pacific ex Japan
2.8%
UK
0.9%
** Including exposure to CIS, adopting a look-through approach. 'Benchmark Deviation' refers to overweight/underweight exposure vs Benchmark

Asset Allocation*

Equities 84.4%
ETF 8.8%
Fund 4.3%
Cash 2.5%
* Without adopting a look-through approach

Performance History (EUR)*

1 Year

18.13%

3 Year

16.14%

5 Year

37.77%

Returns quoted net of TER. Entry and exit charges may reduce returns for investors.
The Annualised rate is an indication of the average growth of the Fund over one year. The value of the investment and the income yield derived from the investment, if any, may go down as well as up and past performance is not necessarily indicative of future performance, nor a reliable guide to future performance. Currency fluctuations may affect the value of investments and any derived income.

Currency Allocation

Euro 23.3%
USD 74.2%
GBP 2.4%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The Fund aims to deliver a return over and above that of the MSCI All Country World Index in Euro. To achieve the fund’s investment objective, the Investment Manager shall invest in a flexibly managed and diversified portfolio of equities and ETFs, across a wide spectrum of industries and sectors.

    The Fund is actively managed and does not seek to replicate the MSCI All Country World Index, therefore the Fund is not managed by reference to any benchmark index.

     

  • Investor profile

    The Investment Manager will invest in a flexibly managed portfolio of equities invested around the world, with the aim of delivering a return superior to that of the MSCI All Country World Index in Euro. The investment approach combines in-depth research to determine the value of assets over the medium to long term to identify investment opportunities.

    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

    • The Investment Manager will not invest in funds which have a management fee of over 3%
    • The fund will not invest in funds managed by the Investment Manager themself
    • The Fund may invest in Real Estate Investment Trusts “REITs” via UCITS-eligible ETFs and/or Collective Investment Schemes and securities related to real estate assets
    • Investments in equity securities may include, but are not limited to, dividend-paying securities, equities, exchange traded funds and preferred shares of global issuers
  • Commentary

    March 2024

    Introduction

    As March draw to a close there is a clear feeling that market participants have moved on from what was considered so far to be the main game-changer in town, namely central banks, and focus more on other factors that move markets, namely corporate earnings and GDP growth. This achieved the feat of pushing markets higher in spite of decreasing odds of monetary easing in the immediate to medium term. With every month of leading macroeconomic indicators showing no negative impact in the real economy from high interest rates the discussion slowly moves to what part of the economic cycle are we currently experiencing. Beyond the ad nauseam AI talks in the main media, it is quite extraordinary how the global economy managed to weather not only a higher cost of capital, but also the impact of tariffs levied in recent years by de-globalization trends or supply chain bottlenecks caused by geopolitical conflicts. One can ask himself whether we have already achieved a new normal economic state where higher cost of capital warrant less economic mobility, therefore what markets are left with are only global economic corporate behemoths with competitive position delivering earnings generating powers that guarantee increasing stock prices in perpetuity. But financial markets history and the economic cycle theory do make a case for a return to normality sooner or later. This will translate at some point into economic recession, corporate defaults and declining stock markets. When this will happen is anyone’s guess, but one basic error is relying on economists and analysts’ opinion on when such events will occur. Let us not forget that 2023 was supposed to have been the most anticipated economic recession in history, which eventually did not materialise.   

    From the monetary front, the FED has opted to maintain its federal funds interest rate unchanged as widely predicted by market participants. Along with the decision, FED officials pencilled in three quarter-percentage point cuts by the end of the year, while the updated “dot plot” also indicates three cuts next year, one fewer than last December. Additionally, revised forecasts for 2024 GDP growth were adjusted upwards, suggesting resilience in the face of tighter monetary policy. In Europe, the ECB also opted to hold its key interest unchanged, while latest comments from its main representatives do paint a pre-committal for a June rate cut. While there is a high bar for this not to be delivered, there is a wide range of possible outcomes in subsequent months, depending on further progress with disinflation.

    Equity markets seem to having reached a levitating state as they posted the strongest rally in the last 5 years while reaching all-time highs in all major geographies – US, Europe and Japan. As this happened on a backdrop of ever diminishing number of FED interest rate cuts expected this year, even the most positive forecasts regarding global economic growth could not shadow the stretched valuation picture painted currently in the market. Some things that have to happen in order to prop up current market levels include a significant increase in market breath (i.e. strong performance in names other than recent performers) and a least a temporary range trading (i.e. under par market performance for a while). While the first has already become apparent in the last month, it is the second factor that worries most market participants, particularly in a very attractive yield offered by bond markets. With all most compelling investment-themes in the last 18 months having already performed for their faithful, it looks like the next couple of quarters will be more difficult to navigate than the usual, as there is no clear growth driver markets could rely on.

    Market Environment and Performance

    March Purchasing Managers’ Index (PMI) indicators showed that the Euro area economy moved closer to stabilization, amid a modest recovery in services (reading of 51.1 versus the previous month reading of 50.2) largely offsetting the weakening manufacturing segment (reading of 45.7 versus a previous month reading of 46.5). New orders declined at the slowest rate in ten months, and backlogs of work were depleted at the weakest rate in nine months, while employment saw modest growth. Headline inflation declined to 2.4%, marginally down from February’s 2.6%. The core rate excluding volatile food and energy prices also cooled to 2.9%.

    The US economy continued to defy some earlier sings of slowdown displaying signs of continued strength. Consumer spending, business activity and employment all indicated a healthy expansion to start the year, advancing on an upwardly revised 3.4% QoQ growth in Q4 2023. The labour market remained particularly robust, with the March jobs report showing a significant increase in nonfarm payroll jobs and sustained low unemployment rate. Annual inflation rate in the US accelerated for a second consecutive month to 3.5%, the highest level since September 2023, compared to February’s 3.2%. Core consumer prices eased to a near three-year low of 3.8%.

    Somewhat surprisingly, March continued the rally in equity markets, probably on a momentum factor from the positive fourth quarter earnings season. However, there was a change in market leadership, as technology underperformed, while unusual leaders like energy, materials and utilities rebounded nicely. Other unexpected trends for the month include the continuation of Europe outperforming US and the Magnificent 7 slowly losing steam compared to the rest of the market. The S&P 500 index gained 3.14% supported by benevolent numbers continuing to pour in from the real economy. European markets also reached all time high levels as the EuroStoxx50 and the DAX gained 4.22% and 4.61% respectively, with real estate, materials and energy names leading the way.

    Fund Performance

    In the month of March , the Solid Future Dynamic Fund registered a 3.02 per cent gain. The Fund’s allocation has been adjusted, as the Manager repositioned it to better respond to the recent market developments. New conviction names Adobe Systems, KLA Corp, Booking Holdings and GSK PLC were added based on compelling in-house valuation models’ fair values and a very interesting risk-adjusted entry levels. As well, holdings in Palo Alto Networks and the Xtrackers MSCI Japan UCITS ETF have been slightly increased as they reflect some of the Manager’s most compelling investment themes currently. Holdings in ConocoPhillips, HSBC Holdings and Cisco Systems have been liquidated as recent earnings reports and market trends showed limited upside potential in our view. As well, positions in Lowe’s Corp, Apple and Amundi MSCI Emerging Markets ex China ETF have been downsized with a view to cashing in some of the sizeable profits already achieved. Cash levels have been slightly increased.

    Market and Investment Outlook

    Going forward, the Manager believes the global economic landscape remains complex, as inflationary pressures seem to have stopped their receding trend particularly on the back of services, driving further central bankers’ hesitations on decisively cutting interest rates. Geopolitical tensions have also recently upended global energy prices adding further uncertainty as regards future developments in the macroeconomic landscape. While the skies of the US economy are still clear of any material cloud and the Chinese economy has recently posted encouraging signs as regards a potential improvement in economic growth, there might be some other potential tensions building up beneath the apparently positive picture. On such backdrop, the Manager continues having a conservative view on equity markets over the coming quarters, as the very strong market rally recorded in the last months, raises the odds for a retracement. The Fund will continue its diversified allocation with a focus on quality companies. Specific allocation to companies benefitting from secular growth trends irrespective of the next move in interest rates should be expected going forward as tactical plays. 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

    €2500

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    5 year performance*

    37.77%

    *View Performance History below
    Inception Date: 25 Oct 2011
    ISIN: MT7000003679
    Bloomberg Ticker: SFUDYNA MV
    Distribution Yield (%): N/A
    Underlying Yield (%): N/A
    Distribution: N/A
    Total Net Assets: 40.6 mn
    Month end NAV in EUR: 243.98
    Number of Holdings:
    Auditors: PriceWaterhouse Coopers
    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

    Walt Disney Co/The
    5.9%
    Bank of America Corp
    5.0%
    Alphabet Inc
    4.9%
    Amazon Inc
    4.8%
    Samsung Electronics Co Ltd
    4.8%
    Pfizer Inc
    4.4%
    BSF - European Opp
    4.3%
    Taiwan Semiconductor
    4.1%
    Microsoft Corp
    3.7%
    Xtrackers MSCI Japan
    3.1%

    Top Holdings by Country*

    North America
    69.1%
    Europe ex UK
    12.9%
    Emerging/Frontier Markets ex China
    10.3%
    Japan
    4.0%
    Asia Pacific ex Japan
    2.8%
    UK
    0.9%
    ** Including exposure to CIS, adopting a look-through approach. 'Benchmark Deviation' refers to overweight/underweight exposure vs Benchmark

    Major Sector Breakdown*

    Information Technology
    27.6%
    Financials
    16.5%
    Consumer Discretionary
    14.7%
    Asset 7
    Communications
    12.4%
    Health Care
    10.2%
    Industrials
    5.1%
    ** Including exposure to CIS, adopting a look-through approach. 'Benchmark Deviation' refers to overweight/underweight exposure vs Benchmark

    Asset Allocation*

    Equities 84.4%
    ETF 8.8%
    Fund 4.3%
    Cash 2.5%
    * Without adopting a look-through approach

    Performance History (EUR)*

    1 Year

    18.13%

    3 Year

    16.14%

    5 Year

    37.77%

    Returns quoted net of TER. Entry and exit charges may reduce returns for investors.
    The Annualised rate is an indication of the average growth of the Fund over one year. The value of the investment and the income yield derived from the investment, if any, may go down as well as up and past performance is not necessarily indicative of future performance, nor a reliable guide to future performance. Currency fluctuations may affect the value of investments and any derived income.

    Currency Allocation

    Euro 23.3%
    USD 74.2%
    GBP 2.4%
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