Investment Objectives

The Fund aims to maximise the total level of return through investment, in a diversified portfolio of Emerging Market Corporate and Government fixed income securities as well as up to 15% of the Net Assets of the Sub-Fund in EM equities. In pursuing this objective, the Investment Manager shall invest primarily in a diversified portfolio of Emerging Market bonds rated at the time of investment “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality. The Fund can also invest up to 10% of its assets in Non-Rated bond issues and up to 30% of its assets in Non-Emerging Market issuers.

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

Investor Profile

A typical investor in the Emerging Market Bond Fund would be one who is seeking to gain exposure to the Emerging Bond Market via corporate and/or sovereign bonds whilst seeking to accumulate wealth and save over time in a product that re-invests coupons received on a gross basis. Furthermore, investors in the Emerging Market Bond Fund are those with a medium to high tolerance to risk and who are planning to hold on to their investment for the medium-to-long term so as to benefit from the compound interest effect whilst also participating in the interest rate cycle as well as the investment cycle commensurate with an investment in Emerging Markets.

Fund Rules

The Investment Manager shall invest primarily but not solely in a diversified portfolio of Emerging Market Corporate fixed income securities and Emerging Market Government fixed income securities with maturities of 10 years or less, rated at the time of investment “Baa1” to “Caa1” by Moody’s or “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality by the Investment Manager. The Investment Manager may also invest up to 10% of the Net Assets of the Sub-Fund in unrated fixed income securities.

  • Minimum Credit Rating CCC+ (or equivalent)
  • Up to 10% in Non-Rated Bonds
  • Average Credit Quality of B- (or equivalent)
  • Emerging Market Issuers as per MSCI Emerging and Frontier
  • Up to 15% in Emerging Market Equities
  • Use of FDIs for hedging purposes only
  • No limit on exposure to CIS
  • Up to 30% in Non Emerging Market Issuers

Commentary

June 2025

Introduction

June 2025, consistent with preceding months, was marked by elevated uncertainty, driven largely by political developments and ongoing geopolitical tensions. While renewed U.S. tariffs remained a source of concern, the Israel-Iran conflict dominated headlines, driving oil prices nearly 10% higher at mid-month before retreating. The announcement and subsequent implementation of a ceasefire helped stabilize energy markets.

Global trade tensions are rising ahead of the July 9 expiration of the U.S. tariff moratorium. The U.S. is pursuing targeted, sector-specific trade agreements with key partners including India, China, and the EU to avoid broad-based tariffs of up to 50%. Progress has been made: India is close to an interim deal, Canada has withdrawn its proposed digital services tax, and a new US-China agreement has been finalized, covering reciprocal tariff reductions and critical resource flows. President Trump has confirmed that the tariff pause will not be extended, adding urgency to negotiations.

In the Middle East, geopolitical risk remains elevated following a sharp escalation between Israel and Iran.  This included direct missile exchanges and Iranian strikes on U.S. assets in Qatar, which came in response to U.S. airstrikes on Iranian nuclear facilities, despite President Trump having publicly stated just two days earlier that he would take 15 days to decide whether to initiate military action. Although a US brokered ceasefire is currently holding, Iran’s ongoing threat to close the Strait of Hormuz continues to pose a significant risk to global energy markets.

The benchmark U.S. 10-year Treasury yield, which briefly rose above 4.50% early in the month, ultimately eased and closed at 4.23%, driven by a flight to safety amid rising demand for haven assets. This environment supported credit markets broadly, with both investment-grade and high-yield segments benefiting. Emerging market (EM) credit also performed strongly, with notable gains across both corporate and sovereign bonds—the latter outperforming, reflecting their higher sensitivity to U.S. yield movements. EM corporate bonds returned 2.04%, while EM sovereigns delivered returns exceeding 2.7%.

Market environment and performance

Recent developments in US-China trade relations point to a tentative de-escalation, underscored by a temporary tariff truce and a framework agreement intended to stabilize economic ties. In mid-June, President Donald Trump expressed satisfaction with a new trade deal that revived a fragile ceasefire in the ongoing trade conflict, following negotiations that produced a framework outlining tariff adjustments. The provisional agreement, initially reached in May, included reciprocal tariff reductions: US tariffs on Chinese goods were lowered from 145% to 30%, while Chinese tariffs on U.S. goods dropped from 125% to 10%.

As part of the agreement, the U.S. relaxed export restrictions on select high-tech products, including chip-design software. In response, China began reassessing its export licensing regime, particularly for rare earth elements and other critical minerals, indicating a willingness to make reciprocal concessions. However, fundamental issues such as structural trade imbalances, non-market practices, and intellectual property protections remain unresolved. While the deal reflects a cooperative tone, it is narrow in scope and leaves several significant tariffs in place.

Although this more conciliatory posture between Washington and Beijing has helped improve investor sentiment toward China, domestic economic conditions remain soft, continuing to weigh on the broader outlook for the world’s second-largest economy.

In economic numbers, China’s General Composite PMI rose to 51.3 in June 2025 from 49.6 in the previous month, marking the highest reading since March. Underlying data revealed that a renewed increase in manufacturing production had offset a softening of services activity growth. New business returned to growth despite continued weakness in exports. Meanwhile, China’s consumer prices dropped by 0.1% YoY in May 2025, matching the declines seen in the previous two months and slightly outperforming expectations of a 0.2% decrease. This marked the fourth consecutive month of consumer deflation, underscoring ongoing challenges from trade tensions with the US, sluggish domestic demand, and concerns over job stability.

In Latin America, the economic landscape is experiencing a period of modest economic growth, with regional disparities influenced by domestic policies, external trade dynamics, and structural challenges. In numbers, Brazil’s economy expanded by 1.4% from the previous quarter of 2025, the most in three quarters, and in line with market expectations. The sharp growth magnitude was carried by an expansion in gross fixed capital formation, despite the restrictive interest rates set by the Central Bank of Brazil as they attempt to tackle above-target inflation and expansionary fiscal policy. Meanwhile, Mexico expanded by 0.2% from the previous quarter aligning with a preliminary estimate. On an inflation front, price pressures, albeit remaining were mixed with Mexico observing a notable rise. Headline inflation rose to 4.42% in Mexico, from a previous month 3.93%. In both Brazil and Chile, inflation eased to 5.32% and 4.40%, respectively. 

In Asia, India – on the contrary – saw its seventh consecutive slowdown, reaching the lowest inflation rate since February 2019 and bringing inflation close to the Reserve Bank of India’s lower tolerance threshold of 2% under its inflation-targeting framework.

Fund performance

The CC Emerging Market Bond Fund recorded a return of 1.55% in June.

In response to ongoing market volatility and expectations of a prolonged period of elevated Federal Reserve policy rates, the portfolio manager continued to actively manage risk and yield. Having previously reduced exposure to tariff-sensitive issuers, increased allocations to income-generating assets, and curtailed interest rate duration, the manager made minimal changes during the period, apart from a slight increase in cash holdings to meet outstanding redemptions.

Market and investment outlook

Looking ahead, fixed income markets are likely to remain highly sensitive to developments related to trade tariffs and ensuing economic implications. The Q1 U.S. GDP contraction, largely attributed to a front-loading of imports ahead of anticipated price hikes, appears to reflect short-term distortions rather than a deeper economic downturn. However, the medium-term inflationary impact – driven by rising input costs and potential supply chain disruptions – could complicate the Federal Reserve’s policy path. This is especially relevant given the still-resilient labour market, which, despite emerging signs of cooling, continues to show underlying strength. On the inflation front, if price pressures persist, the Federal Reserve may be forced to delay rate cuts further, maintaining a more restrictive policy stance. Conversely, if economic data points to a sharper slowdown, a more dovish Fed approach may be justified. Such a shift could reinforce a US dollar depreciation – a trend that has persisted in recent weeks – which could offer relief to emerging market economies by easing external debt burdens and improving capital flows.

For the CC Emerging Market Bond Fund, the portfolio manager will maintain a dynamic approach, actively assessing the evolving market landscape to capitalize on attractive credit opportunities. Consistent with recent strategies, portfolio adjustments will be made to align with prevailing yield conditions and optimize duration, as deemed prudent. Furthermore, the manager will vigilantly monitor the constantly evolving geopolitical tensions, particularly the potential for escalating tensions, which continue to present a source of market uncertainty.

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

Bonds

MIN. INITIAL INVESTMENT

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

5 year performance*

-7.00%

*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.98
Distribution: N/A
Total Net Assets: $8.1 mn
Month end NAV in EUR: 80.67
Number of Holdings: 42
Auditors: Grant Thornton
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.

Performance To Date (EUR)

Top 10 Holdings

5.8% Oryx Funding Ltd 2031
5.3%
6.625% NBM US Holdings Inc 2029
5.2%
3.25% Export-Import BK India 2030
3.6%
iShares JPM USD EM Bond
3.4%
7.25% Gusap III LP 2044
2.8%
6.033% Banco Santander SA 2035
2.7%
6.5% Petrobras Global Finance 2033
2.7%
7.45% Turkcell 2030
2.7%
6.625% Oztel Holdings SPC Ltd 2028
2.7%
6.15% Teva Pharm Fin Co LLC 2036
2.7%

Major Sector Breakdown*

Government
26.8%
Financials
10.5%
Materials
8.3%
Materials
5.8%
Utilites
5.3%
Consumer Staples
5.2%
*excluding exposures to CIS

Maturity Buckets*

38.6%
0-5 Years
42.3%
5-10 Years
9.1%
10 Years+
*based on the Next Call Date

Credit Ratings

Average Credit Rating: BBB-

Risk & Reward Profile

1
2
3
4
5
6
7
Lower Risk

Potentialy Lower Reward

Higher Risk

Potentialy Higher Reward

Top Holdings by Country*

Brazil
15.4%
Oman
7.9%
Turkey
7.7%
Mexico
7.1%
Indonesia
6.8%
India
5.6%
United Kingdom
5.3%
Saudi Arabia
5.2%
Spain
5.2%
Malta (incl. cash)
4.6%
*including exposures to CIS

Asset Allocation

Cash 4.6%
Bonds (incl. ETFs) 95.4%

Performance History (EUR)*

1 Year

3.16%

3 Year

10.10%

5 Year

-7.00%

* The EUR Accumulator Share Class (Class C) was launched on 03 November 2017.
** 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. Hence returns may not be achieved and you may lose all or part of your investment in the Fund. Currency fluctuations may affect the value of investments and any derived income.

Currency Allocation

USD 99.1%
Euro 0.9%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The Fund aims to maximise the total level of return through investment, in a diversified portfolio of Emerging Market Corporate and Government fixed income securities as well as up to 15% of the Net Assets of the Sub-Fund in EM equities. In pursuing this objective, the Investment Manager shall invest primarily in a diversified portfolio of Emerging Market bonds rated at the time of investment “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality. The Fund can also invest up to 10% of its assets in Non-Rated bond issues and up to 30% of its assets in Non-Emerging Market issuers.

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

  • Investor profile

    A typical investor in the Emerging Market Bond Fund would be one who is seeking to gain exposure to the Emerging Bond Market via corporate and/or sovereign bonds whilst seeking to accumulate wealth and save over time in a product that re-invests coupons received on a gross basis. Furthermore, investors in the Emerging Market Bond Fund are those with a medium to high tolerance to risk and who are planning to hold on to their investment for the medium-to-long term so as to benefit from the compound interest effect whilst also participating in the interest rate cycle as well as the investment cycle commensurate with an investment in Emerging Markets.

    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

    • Minimum Credit Rating CCC+ (or equivalent)
    • Up to 10% in Non-Rated Bonds
    • Average Credit Quality of B- (or equivalent)
    • Emerging Market Issuers as per MSCI Emerging and Frontier
    • Up to 15% in Emerging Market Equities
    • Use of FDIs for hedging purposes only
    • No limit on exposure to CIS
    • Up to 30% in Non Emerging Market Issuers
  • Commentary

    June 2025

    Introduction

    June 2025, consistent with preceding months, was marked by elevated uncertainty, driven largely by political developments and ongoing geopolitical tensions. While renewed U.S. tariffs remained a source of concern, the Israel-Iran conflict dominated headlines, driving oil prices nearly 10% higher at mid-month before retreating. The announcement and subsequent implementation of a ceasefire helped stabilize energy markets.

    Global trade tensions are rising ahead of the July 9 expiration of the U.S. tariff moratorium. The U.S. is pursuing targeted, sector-specific trade agreements with key partners including India, China, and the EU to avoid broad-based tariffs of up to 50%. Progress has been made: India is close to an interim deal, Canada has withdrawn its proposed digital services tax, and a new US-China agreement has been finalized, covering reciprocal tariff reductions and critical resource flows. President Trump has confirmed that the tariff pause will not be extended, adding urgency to negotiations.

    In the Middle East, geopolitical risk remains elevated following a sharp escalation between Israel and Iran.  This included direct missile exchanges and Iranian strikes on U.S. assets in Qatar, which came in response to U.S. airstrikes on Iranian nuclear facilities, despite President Trump having publicly stated just two days earlier that he would take 15 days to decide whether to initiate military action. Although a US brokered ceasefire is currently holding, Iran’s ongoing threat to close the Strait of Hormuz continues to pose a significant risk to global energy markets.

    The benchmark U.S. 10-year Treasury yield, which briefly rose above 4.50% early in the month, ultimately eased and closed at 4.23%, driven by a flight to safety amid rising demand for haven assets. This environment supported credit markets broadly, with both investment-grade and high-yield segments benefiting. Emerging market (EM) credit also performed strongly, with notable gains across both corporate and sovereign bonds—the latter outperforming, reflecting their higher sensitivity to U.S. yield movements. EM corporate bonds returned 2.04%, while EM sovereigns delivered returns exceeding 2.7%.

    Market environment and performance

    Recent developments in US-China trade relations point to a tentative de-escalation, underscored by a temporary tariff truce and a framework agreement intended to stabilize economic ties. In mid-June, President Donald Trump expressed satisfaction with a new trade deal that revived a fragile ceasefire in the ongoing trade conflict, following negotiations that produced a framework outlining tariff adjustments. The provisional agreement, initially reached in May, included reciprocal tariff reductions: US tariffs on Chinese goods were lowered from 145% to 30%, while Chinese tariffs on U.S. goods dropped from 125% to 10%.

    As part of the agreement, the U.S. relaxed export restrictions on select high-tech products, including chip-design software. In response, China began reassessing its export licensing regime, particularly for rare earth elements and other critical minerals, indicating a willingness to make reciprocal concessions. However, fundamental issues such as structural trade imbalances, non-market practices, and intellectual property protections remain unresolved. While the deal reflects a cooperative tone, it is narrow in scope and leaves several significant tariffs in place.

    Although this more conciliatory posture between Washington and Beijing has helped improve investor sentiment toward China, domestic economic conditions remain soft, continuing to weigh on the broader outlook for the world’s second-largest economy.

    In economic numbers, China’s General Composite PMI rose to 51.3 in June 2025 from 49.6 in the previous month, marking the highest reading since March. Underlying data revealed that a renewed increase in manufacturing production had offset a softening of services activity growth. New business returned to growth despite continued weakness in exports. Meanwhile, China’s consumer prices dropped by 0.1% YoY in May 2025, matching the declines seen in the previous two months and slightly outperforming expectations of a 0.2% decrease. This marked the fourth consecutive month of consumer deflation, underscoring ongoing challenges from trade tensions with the US, sluggish domestic demand, and concerns over job stability.

    In Latin America, the economic landscape is experiencing a period of modest economic growth, with regional disparities influenced by domestic policies, external trade dynamics, and structural challenges. In numbers, Brazil’s economy expanded by 1.4% from the previous quarter of 2025, the most in three quarters, and in line with market expectations. The sharp growth magnitude was carried by an expansion in gross fixed capital formation, despite the restrictive interest rates set by the Central Bank of Brazil as they attempt to tackle above-target inflation and expansionary fiscal policy. Meanwhile, Mexico expanded by 0.2% from the previous quarter aligning with a preliminary estimate. On an inflation front, price pressures, albeit remaining were mixed with Mexico observing a notable rise. Headline inflation rose to 4.42% in Mexico, from a previous month 3.93%. In both Brazil and Chile, inflation eased to 5.32% and 4.40%, respectively. 

    In Asia, India – on the contrary – saw its seventh consecutive slowdown, reaching the lowest inflation rate since February 2019 and bringing inflation close to the Reserve Bank of India’s lower tolerance threshold of 2% under its inflation-targeting framework.

    Fund performance

    The CC Emerging Market Bond Fund recorded a return of 1.55% in June.

    In response to ongoing market volatility and expectations of a prolonged period of elevated Federal Reserve policy rates, the portfolio manager continued to actively manage risk and yield. Having previously reduced exposure to tariff-sensitive issuers, increased allocations to income-generating assets, and curtailed interest rate duration, the manager made minimal changes during the period, apart from a slight increase in cash holdings to meet outstanding redemptions.

    Market and investment outlook

    Looking ahead, fixed income markets are likely to remain highly sensitive to developments related to trade tariffs and ensuing economic implications. The Q1 U.S. GDP contraction, largely attributed to a front-loading of imports ahead of anticipated price hikes, appears to reflect short-term distortions rather than a deeper economic downturn. However, the medium-term inflationary impact – driven by rising input costs and potential supply chain disruptions – could complicate the Federal Reserve’s policy path. This is especially relevant given the still-resilient labour market, which, despite emerging signs of cooling, continues to show underlying strength. On the inflation front, if price pressures persist, the Federal Reserve may be forced to delay rate cuts further, maintaining a more restrictive policy stance. Conversely, if economic data points to a sharper slowdown, a more dovish Fed approach may be justified. Such a shift could reinforce a US dollar depreciation – a trend that has persisted in recent weeks – which could offer relief to emerging market economies by easing external debt burdens and improving capital flows.

    For the CC Emerging Market Bond Fund, the portfolio manager will maintain a dynamic approach, actively assessing the evolving market landscape to capitalize on attractive credit opportunities. Consistent with recent strategies, portfolio adjustments will be made to align with prevailing yield conditions and optimize duration, as deemed prudent. Furthermore, the manager will vigilantly monitor the constantly evolving geopolitical tensions, particularly the potential for escalating tensions, which continue to present a source of market uncertainty.

  • 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

    Bonds

    MIN. INITIAL INVESTMENT

    €2500

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    5 year performance*

    -7.00%

    *View Performance History below
    Inception Date: 03 Nov 2017
    ISIN: MT7000021242
    Bloomberg Ticker: CCEMBFC MV
    Distribution Yield (%): N/A
    Underlying Yield (%): 5.98
    Distribution: N/A
    Total Net Assets: $8.1 mn
    Month end NAV in EUR: 80.67
    Number of Holdings: 42
    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

    5.8% Oryx Funding Ltd 2031
    5.3%
    6.625% NBM US Holdings Inc 2029
    5.2%
    3.25% Export-Import BK India 2030
    3.6%
    iShares JPM USD EM Bond
    3.4%
    7.25% Gusap III LP 2044
    2.8%
    6.033% Banco Santander SA 2035
    2.7%
    6.5% Petrobras Global Finance 2033
    2.7%
    7.45% Turkcell 2030
    2.7%
    6.625% Oztel Holdings SPC Ltd 2028
    2.7%
    6.15% Teva Pharm Fin Co LLC 2036
    2.7%

    Top Holdings by Country*

    Brazil
    15.4%
    Oman
    7.9%
    Turkey
    7.7%
    Mexico
    7.1%
    Indonesia
    6.8%
    India
    5.6%
    United Kingdom
    5.3%
    Saudi Arabia
    5.2%
    Spain
    5.2%
    Malta (incl. cash)
    4.6%
    *including exposures to CIS

    Major Sector Breakdown*

    Government
    26.8%
    Financials
    10.5%
    Materials
    8.3%
    Materials
    5.8%
    Utilites
    5.3%
    Consumer Staples
    5.2%
    *excluding exposures to CIS

    Asset Allocation

    Cash 4.6%
    Bonds (incl. ETFs) 95.4%

    Maturity Buckets*

    38.6%
    0-5 Years
    42.3%
    5-10 Years
    9.1%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    1 Year

    3.16%

    3 Year

    10.10%

    5 Year

    -7.00%

    * The EUR Accumulator Share Class (Class C) was launched on 03 November 2017.
    ** 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. Hence returns may not be achieved and you may lose all or part of your investment in the Fund. Currency fluctuations may affect the value of investments and any derived income.

    Credit Ratings

    Average Credit Rating: BBB-

    Currency Allocation

    USD 99.1%
    Euro 0.9%
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