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 will invest in collective investment schemes including UCITS, ETFs that invest in a broad range of assets, including debt and equity securities.

We aim 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 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

February 2025

Introduction

Following a turbulent start to the year, where resurgent US Treasury yields, driven by anticipated fiscal expansion and inflation concerns stemming from a change in administration, created significant market volatility, credit markets demonstrated a strong rebound. This positive trend continued into February.

Despite persistent inflationary risks, including the potential impact of tariffs and stronger-than-anticipated inflation data, global bond markets reacted positively to weakening US sentiment indicators and escalating growth concerns. Consequently, the US 10-year Treasury yield experienced a 33bps decline, concluding the month at 4.21%.

In Europe, improved growth prospects, fuelled by increasing optimism regarding a resolution to the Russia-Ukraine conflict, were counterbalanced by concerns over increased government borrowing for defence initiatives. This resulted in a more modest reduction in European sovereign yields compared to the US. Specifically, the yield on the benchmark 10-year German Bund declined by 5bps to 2.41%.

Central bank policy action remained pivotal. The Federal Reserve, after holding interest rates steady in January, indicated they see no immediate need for further adjustments, citing a strong economy and a less restrictive policy stance. They emphasized the need to balance inflation control with economic growth. In contrast, the European Central Bank (ECB), despite encouraging inflation trends and an additional 25bps cut in January, signalled it’s too early to discuss further reductions, prioritizing continued inflation convergence.

February witnessed continued positive performance across corporate bond markets, albeit with varying regional dynamics. European high yield bonds exhibited a 1.04% gain, surpassing investment grade performance. In the US, a combination of slight spread widening and shorter duration resulted in US high yield underperforming, posting returns of 0.65%. The weakening US dollar provided tailwinds for emerging market debt, which recorded a 1.34% return.

Market environment and performance

The US economy exhibited signs of emerging growth concerns, driven by potential tariff impacts and persistent inflationary pressures. Leading indicators, specifically the February composite PMI, sharply declined to 50.4 from 52.7, signaling near-stagnation in private sector activity. This marked the slowest expansion since September 2023, with a renewed contraction in services output. Business optimism for the coming year reached its lowest point since December 2022 (excluding September), reflecting anxieties over federal spending cuts, tariffs, heightened price pressures, and geopolitical uncertainties.

Inflationary pressures intensified, with headline inflation rising to 3.0% in January, exceeding forecasts and the previous month’s 2.9%, indicating stalled progress. Core inflation climbed to 3.3% from 3.2%, surpassing market expectations. The labour market presented a mixed picture: job growth fell below expectations, while the unemployment rate dipped to 4.0%. Critically, average hourly earnings rose by 4.1%, matching the revised prior month and exceeding forecasts, signaling potential for continued wage-driven inflation.

In Europe, the economic picture is brightening after stagnation in Q4 2024. February’s PMI reading remaining steady at 50.2, unchanged from the previous month, and indicating a marginal economic growth in the bloc. Spain led the expansion with a strong and accelerating rise in business activity, while Ireland also saw faster growth, and Italy returned to expansion for the first time in four months. In contrast, Germany experienced only modest growth, and France’s activity continued to decline.

On the price front, Inflation eased to 2.4%, down from a six-month high of 2.5% but slightly above market expectations of 2.3%, as price growth slowed for services and energy. Core inflation which excludes volatile energy, food, alcohol & tobacco prices, fell to 2.6% in February, the lowest since January 2022. The labour market, remained healthy, with the unemployment rate revolving at notable lows (6.2% in January), and significantly below the 20-year average.

Fund performance

Performance for the month of February proved positive, noting a 0.87% gain for the CC Income Strategy Fund – in line with the moves witnessed across high-yield credit markets during such period.

Market and investment outlook

The credit market narrative at the start of the year remained largely unchanged, with investor attention focused on the dynamic political landscape, central bank policies, and economic data.

Economic indicators, both leading and lagging, continue to emphasize a regional divergence. The US, despite the Federal Reserve’s “higher for longer” stance, continues to demonstrate resilient broad-based strength, underpinned by a robust labour market that has thus far supported consumer spending. Meanwhile, Europe has shown tentative signs of growth acceleration following a Q4 2024 stagnation, with private sector activity in expansionary territory for the second consecutive month.

In credit markets, the combination of a resilient labour market in the US and persistent inflationary pressures dictates a prudent, neutral duration strategy, especially as the yield curve’s trajectory remains highly uncertain.

Our current preference leans towards European credit, underpinned by the prospects of continued monetary easing by the ECB. Nevertheless, the dynamic nature of the current environment, particularly the constantly evolving geopolitical tensions, require a highly proactive and adaptive management style to navigate potential risks and capitalize on emerging opportunities.

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

5 year performance*

0%

*View Performance History below
Inception Date: 15 Sep 2021
ISIN: MT7000030680
Bloomberg Ticker: CCPISAE MV
Distribution Yield (%): 3.47
Underlying Yield (%): -
Distribution: 31/05 and 30/11
Total Net Assets: 6.00 mn
Month end NAV in EUR: 93.03
Number of Holdings: 13
Auditors: Grant Thornton
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
19.6%
Nordea 1 - European High Yield Bond Fund
10.0%
CC Funds SICAV plc - High Income Bond Fund
9.9%
Robeco Capital Growth Funds - High Yield Bonds
9.6%
BlackRock Global High Yield Bond Fund
8.1%
DWS Invest Euro High Yield Corp
8.0%
Janus Henderson Horizon Global High Yield Bond Fund
7.8%
Fidelity Funds - European High Yield Bond Fund
7.8%
Schroder International Selection Fund Global High Yield
7.7%
AXA World Funds - Global High Yield Bonds
7.7%
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
37.8%
Global
36.1%
International
24.9%

Asset Allocation

Fund 97.5%
ETF 1.4%
Cash 1.2%

Performance History (EUR)*

1 year

6.35%

3 year

7.05%

* 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 will invest in collective investment schemes including UCITS, ETFs that invest in a broad range of assets, including debt and equity securities.

    We aim 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 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

    February 2025

    Introduction

    Following a turbulent start to the year, where resurgent US Treasury yields, driven by anticipated fiscal expansion and inflation concerns stemming from a change in administration, created significant market volatility, credit markets demonstrated a strong rebound. This positive trend continued into February.

    Despite persistent inflationary risks, including the potential impact of tariffs and stronger-than-anticipated inflation data, global bond markets reacted positively to weakening US sentiment indicators and escalating growth concerns. Consequently, the US 10-year Treasury yield experienced a 33bps decline, concluding the month at 4.21%.

    In Europe, improved growth prospects, fuelled by increasing optimism regarding a resolution to the Russia-Ukraine conflict, were counterbalanced by concerns over increased government borrowing for defence initiatives. This resulted in a more modest reduction in European sovereign yields compared to the US. Specifically, the yield on the benchmark 10-year German Bund declined by 5bps to 2.41%.

    Central bank policy action remained pivotal. The Federal Reserve, after holding interest rates steady in January, indicated they see no immediate need for further adjustments, citing a strong economy and a less restrictive policy stance. They emphasized the need to balance inflation control with economic growth. In contrast, the European Central Bank (ECB), despite encouraging inflation trends and an additional 25bps cut in January, signalled it’s too early to discuss further reductions, prioritizing continued inflation convergence.

    February witnessed continued positive performance across corporate bond markets, albeit with varying regional dynamics. European high yield bonds exhibited a 1.04% gain, surpassing investment grade performance. In the US, a combination of slight spread widening and shorter duration resulted in US high yield underperforming, posting returns of 0.65%. The weakening US dollar provided tailwinds for emerging market debt, which recorded a 1.34% return.

    Market environment and performance

    The US economy exhibited signs of emerging growth concerns, driven by potential tariff impacts and persistent inflationary pressures. Leading indicators, specifically the February composite PMI, sharply declined to 50.4 from 52.7, signaling near-stagnation in private sector activity. This marked the slowest expansion since September 2023, with a renewed contraction in services output. Business optimism for the coming year reached its lowest point since December 2022 (excluding September), reflecting anxieties over federal spending cuts, tariffs, heightened price pressures, and geopolitical uncertainties.

    Inflationary pressures intensified, with headline inflation rising to 3.0% in January, exceeding forecasts and the previous month’s 2.9%, indicating stalled progress. Core inflation climbed to 3.3% from 3.2%, surpassing market expectations. The labour market presented a mixed picture: job growth fell below expectations, while the unemployment rate dipped to 4.0%. Critically, average hourly earnings rose by 4.1%, matching the revised prior month and exceeding forecasts, signaling potential for continued wage-driven inflation.

    In Europe, the economic picture is brightening after stagnation in Q4 2024. February’s PMI reading remaining steady at 50.2, unchanged from the previous month, and indicating a marginal economic growth in the bloc. Spain led the expansion with a strong and accelerating rise in business activity, while Ireland also saw faster growth, and Italy returned to expansion for the first time in four months. In contrast, Germany experienced only modest growth, and France’s activity continued to decline.

    On the price front, Inflation eased to 2.4%, down from a six-month high of 2.5% but slightly above market expectations of 2.3%, as price growth slowed for services and energy. Core inflation which excludes volatile energy, food, alcohol & tobacco prices, fell to 2.6% in February, the lowest since January 2022. The labour market, remained healthy, with the unemployment rate revolving at notable lows (6.2% in January), and significantly below the 20-year average.

    Fund performance

    Performance for the month of February proved positive, noting a 0.87% gain for the CC Income Strategy Fund – in line with the moves witnessed across high-yield credit markets during such period.

    Market and investment outlook

    The credit market narrative at the start of the year remained largely unchanged, with investor attention focused on the dynamic political landscape, central bank policies, and economic data.

    Economic indicators, both leading and lagging, continue to emphasize a regional divergence. The US, despite the Federal Reserve’s “higher for longer” stance, continues to demonstrate resilient broad-based strength, underpinned by a robust labour market that has thus far supported consumer spending. Meanwhile, Europe has shown tentative signs of growth acceleration following a Q4 2024 stagnation, with private sector activity in expansionary territory for the second consecutive month.

    In credit markets, the combination of a resilient labour market in the US and persistent inflationary pressures dictates a prudent, neutral duration strategy, especially as the yield curve’s trajectory remains highly uncertain.

    Our current preference leans towards European credit, underpinned by the prospects of continued monetary easing by the ECB. Nevertheless, the dynamic nature of the current environment, particularly the constantly evolving geopolitical tensions, require a highly proactive and adaptive management style to navigate potential risks and capitalize on emerging opportunities.

  • 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: 15 Sep 2021
    ISIN: MT7000030680
    Bloomberg Ticker: CCPISAE MV
    Distribution Yield (%): 3.47
    Underlying Yield (%): -
    Distribution: 31/05 and 30/11
    Total Net Assets: 6.00 mn
    Month end NAV in EUR: 93.03
    Number of Holdings: 13
    Auditors: Grant Thornton
    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
    19.6%
    Nordea 1 - European High Yield Bond Fund
    10.0%
    CC Funds SICAV plc - High Income Bond Fund
    9.9%
    Robeco Capital Growth Funds - High Yield Bonds
    9.6%
    BlackRock Global High Yield Bond Fund
    8.1%
    DWS Invest Euro High Yield Corp
    8.0%
    Janus Henderson Horizon Global High Yield Bond Fund
    7.8%
    Fidelity Funds - European High Yield Bond Fund
    7.8%
    Schroder International Selection Fund Global High Yield
    7.7%
    AXA World Funds - Global High Yield Bonds
    7.7%

    Top Holdings by Country

    Europe
    37.8%
    Global
    36.1%
    International
    24.9%

    Asset Allocation

    Fund 97.5%
    ETF 1.4%
    Cash 1.2%

    Performance History (EUR)*

    1 year

    6.35%

    3 year

    7.05%

    * 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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