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 Fund in Emerging Market 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 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.

  • Emerging Market Issuers as per MSCI Emerging and Frontier
  • Average Credit Quality of B- (or equivalent)
  • Minimum Credit Rating CCC+ (or equivalent)
  • Up to 30% in Non Emerging Market Issuers
  • Up to 15% in Emerging Market Equities
  • Up to 10% in Non-Rated Bonds

Commentary

May 2025

Introduction

Emerging market (EM) credit posted a strong recovery in May 2025, navigating a challenging backdrop of global rate volatility, shifting US fiscal dynamics, and persistent geopolitical risks. Risk appetite improved amid relief from easing US-China trade tensions, which helped ease fears of a US recession. This supported flows into EM assets, though momentum was partially hampered by concerns over US fiscal sustainability. The resulting rise in US Treasury yields (particularly at the long end of the curve) reintroduced pressure on hard currency sovereign debt, which had only briefly benefited from the earlier improvement in risk sentiment.

Despite these crosscurrents, EM credit rebounded from April’s losses. EM corporate bonds led the recovery, returning 1.39% for the month, while EM sovereign bonds posted more modest – but still positive – gains, constrained by their sensitivity to movements in US benchmark yields.

Market environment and performance

In May 2025, the US and China reached a temporary truce in their ongoing trade war, agreeing to a 90-day de-escalation period following high-level talks in Geneva. During this pause, the US significantly reduced its tariffs on Chinese goods, from a peak of 145% down to 30%, while China rolled back its retaliatory tariffs from 125% to 10%. The agreement also included easing export controls, particularly related to rare earth minerals, which are critical for various industries. However, despite these advancements, the truce was largely seen as a short-term arrangement rather than a definitive solution. Significant structural challenges remained unaddressed, including ongoing US technology export restrictions and visa limitations affecting Chinese students in sensitive sectors.

From a policy perspective, the People’s Bank of China (PBoC) cut key lending rates to record lows at the May fixing, in line with market expectations and marking the first reduction since October. The move follows Beijing’s sweeping monetary easing measures announced earlier this month to bolster a sluggish economy and cushion potential fallout from the ongoing trade tensions with the U.S. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was lowered by 10bps to 3.0%, while the five-year LPR, which guides mortgage rates, was cut by the same margin to 3.5%.

In economic numbers, China’s General Composite PMI to 49.6 in May 2025 from 51.1 in the previous month, marking the first contraction in private sector activity since December 2022. While the services sector experienced a modest improvement, a sharper decline in manufacturing pulled the overall index down. New orders continued to contract, with foreign demand remaining weak across both sectors.  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 sixth consecutive slowdown, reaching the lowest inflation rate since July 2019, strengthening the case for additional rate cuts by the central bank. In response, the Reserve Bank of India (RBI lowered its key repo rate by 50bps to 5.50% at its May meeting (larger than market expectations of a 25bps reduction) while shifting its policy stance from accommodative to neutral.

Fund performance

The CC Emerging Market Bond Fund recorded a return of 0.75% in May, outperforming its internally compared benchmark.

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. After reducing exposure to tariff-sensitive issuers, increasing allocations to income-generating securities, and mitigating interest rate duration in the previous months, the manager rotated holdings within the same issuers, executing both investments and divestitures in names such as HSBC and Republic of Turkiye. Additionally, the fund opened an exposure to the sovereign owned Abu Dhabi Development HO.

Market and investment outlook

Looking ahead, fixed income markets are likely to remain sensitive to the ongoing impact of tariff developments. The contraction in U.S. Q1 GDP, driven largely by a pre-emptive surge in imports ahead of anticipated price hikes, appears to reflect temporary distortions rather than a broader economic slowdown. However, the longer-term inflationary effects of elevated input costs and potential supply chain disruptions could complicate the Federal Reserve’s policy outlook. If inflation remains sticky, the Fed may be compelled to delay or scale back the pace of rate cuts currently priced in by markets. Conversely, signs of weakening demand and slowing growth could strengthen the case for eventual policy easing. A dovish Fed stance would likely reinforce recent U.S. 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*

-6.32%

*View Performance History below
Inception Date: 02 Nov 2017
ISIN: MT7000021259
Bloomberg Ticker: CCEMBFD MV
Distribution Yield (%): 4.60
Underlying Yield (%): 9.51
Distribution: 31/03 and 30/09
Total Net Assets: $8.7 mn
Month end NAV in EUR: 57.70
Number of Holdings: 46
Auditors: Grant Thornton
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.

Performance To Date (EUR)

Top 10 Holdings

6.625% NBM US Holdings Inc 2029
4.7%
5.8% Oryx Funding Ltd 2031
4.7%
3.25% Export-Import BK India 2030
3.2%
iShares JPM USD EM Bond
3.0%
7.25% Gusap III LP 2044
2.5%
6.033% Banco Santander SA 2035
2.4%
7.45% Turkcell 2030
2.4%
6.5% Petrobras Global Finance 2033
2.4%
6.625% Oztel Holdings SPC Ltd 2028
2.4%
5.545% Standard Chartered plc 2029
2.4%

Major Sector Breakdown*

Government
23.7%
Financials
9.3%
Materials
7.4%
Materials
7.3%
Consumer Staples
4.7%
Utilites
4.7%
*excluding exposures to CIS

Maturity Buckets*

40.8%
0-5 Years
37.8%
5-10 Years
9.9%
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
13.6%
India
7.1%
Oman
7.0%
Turkey
6.9%
Malta (incl. cash)
6.7%
Mexico
6.3%
Indonesia
6.0%
United States
5.2%
Saudi Arabia
4.7%
United Kingdom
4.7%
*including exposures to CIS

Asset Allocation

Cash 6.7%
Bonds (incl. ETFs) 93.3%

Performance History (EUR)*

1 Year

2.45%

3 Year

3.60%

5 Year

-6.32%

* The EUR Distributor Share Class (Class D) was launched on 03 November 2017.
** Performance figures are calculated using the Value Added Monthly Index "VAMI" principle. The VAMI calculates the total return gained by an investor from reinvestmentof any dividends and additional interest gained through compounding.
*** 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 100.0%
Euro 0.0%
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 Fund in Emerging Market 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

    • Emerging Market Issuers as per MSCI Emerging and Frontier
    • Average Credit Quality of B- (or equivalent)
    • Minimum Credit Rating CCC+ (or equivalent)
    • Up to 30% in Non Emerging Market Issuers
    • Up to 15% in Emerging Market Equities
    • Up to 10% in Non-Rated Bonds
  • Commentary

    May 2025

    Introduction

    Emerging market (EM) credit posted a strong recovery in May 2025, navigating a challenging backdrop of global rate volatility, shifting US fiscal dynamics, and persistent geopolitical risks. Risk appetite improved amid relief from easing US-China trade tensions, which helped ease fears of a US recession. This supported flows into EM assets, though momentum was partially hampered by concerns over US fiscal sustainability. The resulting rise in US Treasury yields (particularly at the long end of the curve) reintroduced pressure on hard currency sovereign debt, which had only briefly benefited from the earlier improvement in risk sentiment.

    Despite these crosscurrents, EM credit rebounded from April’s losses. EM corporate bonds led the recovery, returning 1.39% for the month, while EM sovereign bonds posted more modest – but still positive – gains, constrained by their sensitivity to movements in US benchmark yields.

    Market environment and performance

    In May 2025, the US and China reached a temporary truce in their ongoing trade war, agreeing to a 90-day de-escalation period following high-level talks in Geneva. During this pause, the US significantly reduced its tariffs on Chinese goods, from a peak of 145% down to 30%, while China rolled back its retaliatory tariffs from 125% to 10%. The agreement also included easing export controls, particularly related to rare earth minerals, which are critical for various industries. However, despite these advancements, the truce was largely seen as a short-term arrangement rather than a definitive solution. Significant structural challenges remained unaddressed, including ongoing US technology export restrictions and visa limitations affecting Chinese students in sensitive sectors.

    From a policy perspective, the People’s Bank of China (PBoC) cut key lending rates to record lows at the May fixing, in line with market expectations and marking the first reduction since October. The move follows Beijing’s sweeping monetary easing measures announced earlier this month to bolster a sluggish economy and cushion potential fallout from the ongoing trade tensions with the U.S. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was lowered by 10bps to 3.0%, while the five-year LPR, which guides mortgage rates, was cut by the same margin to 3.5%.

    In economic numbers, China’s General Composite PMI to 49.6 in May 2025 from 51.1 in the previous month, marking the first contraction in private sector activity since December 2022. While the services sector experienced a modest improvement, a sharper decline in manufacturing pulled the overall index down. New orders continued to contract, with foreign demand remaining weak across both sectors.  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 sixth consecutive slowdown, reaching the lowest inflation rate since July 2019, strengthening the case for additional rate cuts by the central bank. In response, the Reserve Bank of India (RBI lowered its key repo rate by 50bps to 5.50% at its May meeting (larger than market expectations of a 25bps reduction) while shifting its policy stance from accommodative to neutral.

    Fund performance

    The CC Emerging Market Bond Fund recorded a return of 0.75% in May, outperforming its internally compared benchmark.

    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. After reducing exposure to tariff-sensitive issuers, increasing allocations to income-generating securities, and mitigating interest rate duration in the previous months, the manager rotated holdings within the same issuers, executing both investments and divestitures in names such as HSBC and Republic of Turkiye. Additionally, the fund opened an exposure to the sovereign owned Abu Dhabi Development HO.

    Market and investment outlook

    Looking ahead, fixed income markets are likely to remain sensitive to the ongoing impact of tariff developments. The contraction in U.S. Q1 GDP, driven largely by a pre-emptive surge in imports ahead of anticipated price hikes, appears to reflect temporary distortions rather than a broader economic slowdown. However, the longer-term inflationary effects of elevated input costs and potential supply chain disruptions could complicate the Federal Reserve’s policy outlook. If inflation remains sticky, the Fed may be compelled to delay or scale back the pace of rate cuts currently priced in by markets. Conversely, signs of weakening demand and slowing growth could strengthen the case for eventual policy easing. A dovish Fed stance would likely reinforce recent U.S. 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*

    -6.32%

    *View Performance History below
    Inception Date: 02 Nov 2017
    ISIN: MT7000021259
    Bloomberg Ticker: CCEMBFD MV
    Distribution Yield (%): 4.60
    Underlying Yield (%): 9.51
    Distribution: 31/03 and 30/09
    Total Net Assets: $8.7 mn
    Month end NAV in EUR: 57.70
    Number of Holdings: 46
    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

    6.625% NBM US Holdings Inc 2029
    4.7%
    5.8% Oryx Funding Ltd 2031
    4.7%
    3.25% Export-Import BK India 2030
    3.2%
    iShares JPM USD EM Bond
    3.0%
    7.25% Gusap III LP 2044
    2.5%
    6.033% Banco Santander SA 2035
    2.4%
    7.45% Turkcell 2030
    2.4%
    6.5% Petrobras Global Finance 2033
    2.4%
    6.625% Oztel Holdings SPC Ltd 2028
    2.4%
    5.545% Standard Chartered plc 2029
    2.4%

    Top Holdings by Country*

    Brazil
    13.6%
    India
    7.1%
    Oman
    7.0%
    Turkey
    6.9%
    Malta (incl. cash)
    6.7%
    Mexico
    6.3%
    Indonesia
    6.0%
    United States
    5.2%
    Saudi Arabia
    4.7%
    United Kingdom
    4.7%
    *including exposures to CIS

    Major Sector Breakdown*

    Government
    23.7%
    Financials
    9.3%
    Materials
    7.4%
    Materials
    7.3%
    Consumer Staples
    4.7%
    Utilites
    4.7%
    *excluding exposures to CIS

    Asset Allocation

    Cash 6.7%
    Bonds (incl. ETFs) 93.3%

    Maturity Buckets*

    40.8%
    0-5 Years
    37.8%
    5-10 Years
    9.9%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    1 Year

    2.45%

    3 Year

    3.60%

    5 Year

    -6.32%

    * The EUR Distributor Share Class (Class D) was launched on 03 November 2017.
    ** Performance figures are calculated using the Value Added Monthly Index "VAMI" principle. The VAMI calculates the total return gained by an investor from reinvestmentof any dividends and additional interest gained through compounding.
    *** 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 100.0%
    Euro 0.0%
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