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
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*
-17.80%
*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.88
Distribution: N/A
Total Net Assets: $9.4 mn
Month end NAV in EUR: 78.20
Number of Holdings: 50
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
Performance To Date (EUR)
Top 10 Holdings
6.2%
4.3%
4.2%
4.1%
4.0%
3.8%
3.1%
3.0%
2.9%
2.5%
Major Sector Breakdown*
Government
19.8%
Materials
8.4%
Financials
7.8%
Consumer Staples
6.3%
![](/wp-content/themes/bp-ccfunds/images/funds-icon.png)
Funds
6.2%
Consumer Discretionary
4.4%
Maturity Buckets*
Credit Ratings
Risk & Reward Profile
Lower Risk
Potentialy Lower Reward
Higher Risk
Potentialy Higher Reward
Top Holdings by Country*
14.6%
11.7%
11.0%
10.3%
6.8%
6.4%
6.0%
6.0%
4.0%
3.8%
Asset Allocation
Performance History (EUR)*
1 Year
3.45%
3 Year
-16.57%
5 Year
-17.80%
Currency Allocation
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.
-
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 2024
Introduction
Emerging market (EM) credit continued its notable run in Q2, extending the gains observed since the start of the year. The asset class delivered positive returns across the board, although sovereigns lagged corporate debt. This quarter’s performance was primarily driven by carry, with the elevated coupon income in hard currency issues playing a key role, providing valuable protection against rising US treasury yields. This reliable income stream offered a buffer for investors, making EM debt an attractive proposition.
Year-to-date, EM corporate credit has delivered a strong 6.09% return, with approximately 3.5% of that figure attributable to income return.
Positive economic updates further supported EM debt performance. China’s government measures to support the struggling housing sector boosted confidence, with private sector activity too remaining positive. Inflation, previously negative, have for four successive months proved positive, signalling a continued recovery in domestic demand. In India, optimism rose due to the expected re-election of Prime Minister Modi, although the possibility of a coalition government added some uncertainty. In Latin America, private sector activity remained robust, whilst inflation, albeit marginally increasing (recent figures showed) allowed central banks to maintain a more accommodative monetary policy stance.
Market environment and performance
China’s macroeconomy continued to exhibit signs of a recovery in June, with private sector activity still revolving in expansionary territory, despite China’s General Composite PMI slipping (52.8 v a previous month reading of 54.1). Still, June’s reading marked the eighth consecutive month of growth, as manufacturing output growth accelerated, while services saw a slowdown. New orders expanded at the softest pace in four months while employment shrank across manufacturing and service sectors. On the price front, consumer prices held steady at 0.3% in May for the second straight month while falling short of market forecasts of 0.4%. Despite nascent signs of improvement, structural challenges continue to persist. Recent government interventions, particularly in the property sector, offer hope, but their long-term effectiveness remains to be seen. Still, sustained stability in property prices is indeed anticipated. This is viewed as a crucial precursor to a turnaround in the sector. Stabilized home prices shall indeed have positive ripple effects, potentially improving consumer sentiment and ultimately enhancing China’s growth outlook.
In India, sustained economic strength and recent political developments have continued to fuel positive investor sentiment. The country has in recent months continued to boast healthy activity, with the private sector maintaining a sustained expansion amid robust output from the manufacturing and service sectors. Meanwhile, Prime Minister Modi’s Bharatiya Janata Party (BJP)-led National Democratic Alliance retained its parliamentary majority although the BJP lost its single party majority. On the policy front, the Reserve Bank of India kept its benchmark policy repo steady as price pressures prove persistent while the economy remained resilient.
Latin America presented a nuanced economic picture in Q2, with a broader slowdown emerging compared to the earlier part of Q1. Brazil, the region’s powerhouse, exhibited continued resilience, with activity – aided by the services segment – revolving in expansionary territory. Meanwhile, inflation picked up from the 3.69% jump in April to mark the first acceleration in Brazilian consumer prices since September of 2023. Mexico, still in expansion, saw a marginal 0.1 pt dip in manufacturing (51.1 v a previous month reading of 51.2) as new orders continued to rise. From a policy perspective, Chile – among the first to ease policy – carried out a 25bps cut, which brings them to 5.75%. Brazil and Mexico, previously embarking on an easing cycle, kept rates steady, in line with expectations.
Fund performance
In June, the CC Emerging Market Bond Fund realized a gain of 0.79%. Throughout the month, the Manager continued to take advantage of selective opportunities, primarily by participating in initial offerings. Indeed, the month saw a number of market participants coming to market, with liquidity and appetite increasing. Credit issuers which the CC Emerging Market Bond Fund increased its exposure to include; Teva Pharmaceuticals, Freeport Indonesia PT, and Arcelormittal SA.
Market and investment outlook
Looking ahead, the evolving global interest rate environment, particularly decisions by the Fed, will be crucial to monitor. A hawkish Fed stance may lead to a sustained period of higher rates globally, potentially translating into a stronger US dollar. A “higher-for-longer” dollar scenario indeed presents a challenge for EM economies, notably; reduced fund flows from foreign investors seeking higher returns elsewhere, and increased refinancing costs for companies with large foreign currency debt burdens.
With respect to the Emerging Market Bond Fund, the manager will continue to assess the market landscape and capitalize on appealing credit opportunities. Consistent with recent actions, the manager will continue to tailor the portfolio to match prevailing yield conditions while increasing the portfolio’s overall duration. This whilst keeping a close eye on the political landscape within Emerging Markets and possible escalation of geopolitical tensions, which to-date have alas endured. Despite rate cut expectations falling over the year, optimism remains.
-
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*
-17.80%
*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.88
Distribution: N/A
Total Net Assets: $9.4 mn
Month end NAV in EUR: 78.20
Number of Holdings: 50
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
Performance To Date (EUR)
Risk & Reward Profile
1234567Lower Risk
Potentialy Lower Reward
Higher Risk
Potentialy Higher Reward
Top 10 Holdings
iShares JPM USD EM Bond6.2%
6.625% NBM US Holdings Inc 20294.3%
5.8% Oryx Funding Ltd 20314.2%
5.8% Turkcell 20284.1%
4% HSBC Holdings plc perp4.0%
4.75% Banco Santander SA perp3.8%
5.60% Petrobras Global Fin 20313.1%
iShares JPM USD EM Corp Bond3.0%
3.25% Export-Import BK India 20302.9%
3.625% Nemak SAB DE CV 20312.5%
Top Holdings by Country*
Brazil14.6%
Malta (incl. cash)11.7%
Mexico11.0%
United States10.3%
India6.8%
Oman6.4%
Turkey6.0%
Indonesia6.0%
United Kingdom4.0%
Spain3.8%
*including exposures to CISMajor Sector Breakdown*
Government
19.8%
Materials
8.4%
Financials
7.8%
Consumer Staples
6.3%
Funds
6.2%
Consumer Discretionary
4.4%
*excluding exposures to CISAsset Allocation
Cash 1.7%Bonds (incl. ETFs) 98.3%Maturity Buckets*
42.6%0-5 Years36.1%5-10 Years10.4%10 Years+*based on the Next Call DatePerformance History (EUR)*
1 Year
3.45%
3 Year
-16.57%
5 Year
-17.80%
* 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 98.8%Euro 1.2% -
Downloads
Commentary
June 2024
Introduction
Emerging market (EM) credit continued its notable run in Q2, extending the gains observed since the start of the year. The asset class delivered positive returns across the board, although sovereigns lagged corporate debt. This quarter’s performance was primarily driven by carry, with the elevated coupon income in hard currency issues playing a key role, providing valuable protection against rising US treasury yields. This reliable income stream offered a buffer for investors, making EM debt an attractive proposition.
Year-to-date, EM corporate credit has delivered a strong 6.09% return, with approximately 3.5% of that figure attributable to income return.
Positive economic updates further supported EM debt performance. China’s government measures to support the struggling housing sector boosted confidence, with private sector activity too remaining positive. Inflation, previously negative, have for four successive months proved positive, signalling a continued recovery in domestic demand. In India, optimism rose due to the expected re-election of Prime Minister Modi, although the possibility of a coalition government added some uncertainty. In Latin America, private sector activity remained robust, whilst inflation, albeit marginally increasing (recent figures showed) allowed central banks to maintain a more accommodative monetary policy stance.
Market environment and performance
China’s macroeconomy continued to exhibit signs of a recovery in June, with private sector activity still revolving in expansionary territory, despite China’s General Composite PMI slipping (52.8 v a previous month reading of 54.1). Still, June’s reading marked the eighth consecutive month of growth, as manufacturing output growth accelerated, while services saw a slowdown. New orders expanded at the softest pace in four months while employment shrank across manufacturing and service sectors. On the price front, consumer prices held steady at 0.3% in May for the second straight month while falling short of market forecasts of 0.4%. Despite nascent signs of improvement, structural challenges continue to persist. Recent government interventions, particularly in the property sector, offer hope, but their long-term effectiveness remains to be seen. Still, sustained stability in property prices is indeed anticipated. This is viewed as a crucial precursor to a turnaround in the sector. Stabilized home prices shall indeed have positive ripple effects, potentially improving consumer sentiment and ultimately enhancing China’s growth outlook.
In India, sustained economic strength and recent political developments have continued to fuel positive investor sentiment. The country has in recent months continued to boast healthy activity, with the private sector maintaining a sustained expansion amid robust output from the manufacturing and service sectors. Meanwhile, Prime Minister Modi’s Bharatiya Janata Party (BJP)-led National Democratic Alliance retained its parliamentary majority although the BJP lost its single party majority. On the policy front, the Reserve Bank of India kept its benchmark policy repo steady as price pressures prove persistent while the economy remained resilient.
Latin America presented a nuanced economic picture in Q2, with a broader slowdown emerging compared to the earlier part of Q1. Brazil, the region’s powerhouse, exhibited continued resilience, with activity – aided by the services segment – revolving in expansionary territory. Meanwhile, inflation picked up from the 3.69% jump in April to mark the first acceleration in Brazilian consumer prices since September of 2023. Mexico, still in expansion, saw a marginal 0.1 pt dip in manufacturing (51.1 v a previous month reading of 51.2) as new orders continued to rise. From a policy perspective, Chile – among the first to ease policy – carried out a 25bps cut, which brings them to 5.75%. Brazil and Mexico, previously embarking on an easing cycle, kept rates steady, in line with expectations.
Fund performance
In June, the CC Emerging Market Bond Fund realized a gain of 0.79%. Throughout the month, the Manager continued to take advantage of selective opportunities, primarily by participating in initial offerings. Indeed, the month saw a number of market participants coming to market, with liquidity and appetite increasing. Credit issuers which the CC Emerging Market Bond Fund increased its exposure to include; Teva Pharmaceuticals, Freeport Indonesia PT, and Arcelormittal SA.
Market and investment outlook
Looking ahead, the evolving global interest rate environment, particularly decisions by the Fed, will be crucial to monitor. A hawkish Fed stance may lead to a sustained period of higher rates globally, potentially translating into a stronger US dollar. A “higher-for-longer” dollar scenario indeed presents a challenge for EM economies, notably; reduced fund flows from foreign investors seeking higher returns elsewhere, and increased refinancing costs for companies with large foreign currency debt burdens.
With respect to the Emerging Market Bond Fund, the manager will continue to assess the market landscape and capitalize on appealing credit opportunities. Consistent with recent actions, the manager will continue to tailor the portfolio to match prevailing yield conditions while increasing the portfolio’s overall duration. This whilst keeping a close eye on the political landscape within Emerging Markets and possible escalation of geopolitical tensions, which to-date have alas endured. Despite rate cut expectations falling over the year, optimism remains.