Investment Objectives

The objective of the Sub-Fund is to endeavour to maximise the total level of return for investors through investment primarily, in a well-diversified portfolio of debt securities and other fixed-income or interest bearing securities.

Investor Profile

A typical investor in the CC 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 CC 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

March 2021

Emerging markets (EM) have had a difficult few weeks, after a strong start to the year, over concerns regarding policy tightening. While central banks in developed markets are pledging to keep rates low for a long time, some EM central banks are already hiking. These hikes are being driven by food prices, efforts to anchor inflation expectations and different policy reaction functions.

Local conditions vary across EM including inflation pressures, real interest rate levels and fiscal policy, not to mention external accounts and associated FX moves. Case in point is Turkey, whose currency plunged after President Erdogan removed the chair of the Central Bank following an announcement of an interest rate hike. Increasing levels of inflation were reported in Brazil and Russia.

There has been some volatility in the Chinese property high yield sector, underperforming so far this year due to a repricing of tail risk. The resources driven emerging markets were aided by higher commodity prices which have also contributed to higher inflation expectations. Activity levels in Asia remain elevated, insofar as chip shortages were cited amongst several industries, leading to production issues.

From the data front in the emerging market world, China – the world’s second largest economy reported an increase in both the manufacturing and services sector. China’s March manufacturing PMI increased to 51.9 from 50.6 in February, beating market expectations of 51.0. This was aided by a sharp increase in industrial production of 35.1%. Services PMI increased to 54.3 from 51.5 in February.

From the Latin American region, the Brazilian president Bolsonaro remains under immense pressure due to the critical pandemic situation in the country. The country is reporting several thousand cases of fatalities every day, yet the President insists on a business as usual approach to the situation, drawing criticism from several stakeholders. 

Brazilian PMI data for March deteriorated, falling to 52.8 from a 58.4 level reported in February.  Momentum in retail sales continued to slow, increasing by 1.2% compared to a strong forecast of 6.0%, as consumer confidence was shaken by Covid induced restrictions.

From a technical perspective, emerging market debt is expected to keep pace with high yield credit in developed markets, as higher yielding debt remains an attractive avenue for those investors in search of a higher yield. The extremely accommodative liquidity situation is helping to maintain stability, despite the deep wounds inflicted on already fragile economies. This highlights the importance of the managers’ strategy of being selective.

In the month of March, the CC Emerging Market Bond Fund increased by 1.2 per cent. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the base metals, transportation and real estate sectors.

Going forward, the Manager will continue to assess the EM space scenario even on the basis of further monetary policy actions taken by Central Banks, which seem to follow the Fed’s accommodative stance.

Key Facts & Performance

Fund Manager

Jordan Portelli

Jordan is an Investment Manager at Calamatta Cuschieri and is the Head of the Fixed Income desk. Jordan has over 10 years’ experience in High Yield debt. He is a member on a number of Investment Committees and is also a member on the House View Committee of Calamatta Cuschieri. He obtained a Diploma in Business and Management from Cambridge College in the U.K. He also obtained his BSc (Hons) in Economics from the London School of Economics.

PRICE (EUR)

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

-9.57%

*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000002124
Bloomberg Ticker: CCEMBFC MV
Entry Charge: up to 2.50%
Total Expense Ratio: 2.07%
Exit Charge: None
Distribution Yield (%): N/A
Underlying Yield (%): 4.59
Distribution: N/A
Total Net Assets: $13.4 mn
Month end NAV in EUR: 90.43
Number of Holdings: 46
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 38.5

Performance To Date (EUR)

Top 10 Holdings

iShares JPM EM Bond Fund
5.9%
iShares JPM USD EM Corp Bond
5.7%
6.625% NBM Holdings 2029
4.2%
Shares China Bond
4.0%
5.45% Cemex 2029
3.3%
6.5% Global Ports Finance 2023
3.3%
4.95% Veon Holdings 2024
3.2%
4.375% Freeport McMoran 2028
3.2%
5.8% Turkcell 2028
3.1%
8.125% Global Liman 2021
2.7%

Major Sector Breakdown*

Government
11.6%
Asset 7
Communications
11.0%
Industrials
6.6%
Materials
6.0%
Consumer Staples
5.7%
Materials
4.3%
*excluding exposures to CIS

Maturity Buckets*

44.1%
0-5 Years
28.4%
5-10 Years
7.5%
10 Years+
*based on the Next Call Date

Credit Ratings*

Average Credit Rating: BB
*excluding exposures to CIS

Risk & Reward Profile

1
2
3
4
5
6
7
Lower Risk

Potentialy Lower Reward

Higher Risk

Potentialy Higher Reward

Top Holdings by Country*

Malta (incl. cash)
20.0%
Brazil
16.9%
China
9.5%
Mexico
7.6%
Turkey
7.3%
Russia
6.4%
India
5.1%
United States
4.7%
Oman
4.0%
Germany
3.6%
*including exposures to CIS, using look-through

Asset Allocation

Cash 4.5%
Bonds (incl. ETFs) 95.5%
Equities (incl. ETFs) 0.0%

Performance History (EUR)*

YTD

-2.38%

2020

-3.19%

2019

6.57%

1-month

-1.59%

3-month

-2.38%

Annualised since Inception*

-2.91%

*The EUR Accumulator Share Class (Class C) was launched on 03 November 2017

Currency Allocation

USD 89.7%
Euro 10.3%
Other 0.0%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The objective of the Sub-Fund is to endeavour to maximise the total level of return for investors through investment primarily, in a well-diversified portfolio of debt securities and other fixed-income or interest bearing securities.

  • Investor profile

    A typical investor in the CC 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 CC 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

    March 2021

    Emerging markets (EM) have had a difficult few weeks, after a strong start to the year, over concerns regarding policy tightening. While central banks in developed markets are pledging to keep rates low for a long time, some EM central banks are already hiking. These hikes are being driven by food prices, efforts to anchor inflation expectations and different policy reaction functions.

    Local conditions vary across EM including inflation pressures, real interest rate levels and fiscal policy, not to mention external accounts and associated FX moves. Case in point is Turkey, whose currency plunged after President Erdogan removed the chair of the Central Bank following an announcement of an interest rate hike. Increasing levels of inflation were reported in Brazil and Russia.

    There has been some volatility in the Chinese property high yield sector, underperforming so far this year due to a repricing of tail risk. The resources driven emerging markets were aided by higher commodity prices which have also contributed to higher inflation expectations. Activity levels in Asia remain elevated, insofar as chip shortages were cited amongst several industries, leading to production issues.

    From the data front in the emerging market world, China – the world’s second largest economy reported an increase in both the manufacturing and services sector. China’s March manufacturing PMI increased to 51.9 from 50.6 in February, beating market expectations of 51.0. This was aided by a sharp increase in industrial production of 35.1%. Services PMI increased to 54.3 from 51.5 in February.

    From the Latin American region, the Brazilian president Bolsonaro remains under immense pressure due to the critical pandemic situation in the country. The country is reporting several thousand cases of fatalities every day, yet the President insists on a business as usual approach to the situation, drawing criticism from several stakeholders. 

    Brazilian PMI data for March deteriorated, falling to 52.8 from a 58.4 level reported in February.  Momentum in retail sales continued to slow, increasing by 1.2% compared to a strong forecast of 6.0%, as consumer confidence was shaken by Covid induced restrictions.

    From a technical perspective, emerging market debt is expected to keep pace with high yield credit in developed markets, as higher yielding debt remains an attractive avenue for those investors in search of a higher yield. The extremely accommodative liquidity situation is helping to maintain stability, despite the deep wounds inflicted on already fragile economies. This highlights the importance of the managers’ strategy of being selective.

    In the month of March, the CC Emerging Market Bond Fund increased by 1.2 per cent. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the base metals, transportation and real estate sectors.

    Going forward, the Manager will continue to assess the EM space scenario even on the basis of further monetary policy actions taken by Central Banks, which seem to follow the Fed’s accommodative stance.

  • Key facts & performance

    Fund Manager

    Jordan Portelli

    Jordan is an Investment Manager at Calamatta Cuschieri and is the Head of the Fixed Income desk. Jordan has over 10 years’ experience in High Yield debt. He is a member on a number of Investment Committees and is also a member on the House View Committee of Calamatta Cuschieri. He obtained a Diploma in Business and Management from Cambridge College in the U.K. He also obtained his BSc (Hons) in Economics from the London School of Economics.

    PRICE (EUR)

    ASSET CLASS

    Bonds

    MIN. INITIAL INVESTMENT

    €2500

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    RETURN (SINCE INCEPTION)*

    -9.57%

    *View Performance History below
    Inception Date: 03 Nov 2017
    ISIN: MT7000002124
    Bloomberg Ticker: CCEMBFC MV
    Entry Charge: up to 2.50%
    Total Expense Ratio: 2.07%
    Exit Charge: None
    Distribution Yield (%): N/A
    Underlying Yield (%): 4.59
    Distribution: N/A
    Total Net Assets: $13.4 mn
    Month end NAV in EUR: 90.43
    Number of Holdings: 46
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 38.5

    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

    iShares JPM EM Bond Fund
    5.9%
    iShares JPM USD EM Corp Bond
    5.7%
    6.625% NBM Holdings 2029
    4.2%
    Shares China Bond
    4.0%
    5.45% Cemex 2029
    3.3%
    6.5% Global Ports Finance 2023
    3.3%
    4.95% Veon Holdings 2024
    3.2%
    4.375% Freeport McMoran 2028
    3.2%
    5.8% Turkcell 2028
    3.1%
    8.125% Global Liman 2021
    2.7%

    Top Holdings by Country*

    Malta (incl. cash)
    20.0%
    Brazil
    16.9%
    China
    9.5%
    Mexico
    7.6%
    Turkey
    7.3%
    Russia
    6.4%
    India
    5.1%
    United States
    4.7%
    Oman
    4.0%
    Germany
    3.6%
    *including exposures to CIS, using look-through

    Major Sector Breakdown*

    Government
    11.6%
    Asset 7
    Communications
    11.0%
    Industrials
    6.6%
    Materials
    6.0%
    Consumer Staples
    5.7%
    Materials
    4.3%
    *excluding exposures to CIS

    Asset Allocation

    Cash 4.5%
    Bonds (incl. ETFs) 95.5%
    Equities (incl. ETFs) 0.0%

    Maturity Buckets*

    44.1%
    0-5 Years
    28.4%
    5-10 Years
    7.5%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -2.38%

    2020

    -3.19%

    2019

    6.57%

    1-month

    -1.59%

    3-month

    -2.38%

    Annualised since Inception*

    -2.91%

    *The EUR Accumulator Share Class (Class C) was launched on 03 November 2017

    Credit Ratings*

    Average Credit Rating: BB
    *excluding exposures to CIS

    Currency Allocation

    USD 89.7%
    Euro 10.3%
    Other 0.0%
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