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 at a Glance

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

November 2021

The coronavirus pandemic have, since first detected in the Capital of Hubei Province – Wuhan, dominated news headlines. It caught the world by surprise, altering life patterns and dictating economies path forward. Financial markets inevitably felt the pinch.

Efforts by central banks in the form of stimulus support, and governments, through mitigation measures to reduce the spread, vaccine coverage, and fiscal support, improved the scenario both from a health and economic perspective. However, in recent weeks a surge in coronavirus cases, possibly due to a seasonal effect which may probably contribute to a bigger outbreak, was witnessed. In fact, Europe is experiencing a surge in coronavirus infections, to levels not seen in months.

A new mutation: the Omicron variant, emerging from southern Africa, augmented fears that countries, owing to the variants’ unprecedented set of genetic mutations may once more be engulfed with infections. Conclusive findings on such emerging mutation, due to its relatively recent discovery, is thus far unavailable. That said, the repercussions, both from a health and economic viewpoint, the latter dependant on the ensuing course of action by governments to mitigate the spread and to ultimately avoid overwhelming hospitals, remain unclear. Vaccination programmes and distribution of boosters – a third dose which shall further increase immunisation against the virus, shall undoubtedly aid to mitigate the impact.

As concerns over the possible negative effect the Omicron variant may have on global economy rose, yields of U.S. Treasuries, previously portraying an improved and thus more stable economic scenario, and possible stimulus tapering, reversed. Economic data, previously portraying signs of a recovery, may once again falter, should the need for restrictions arise. Albeit somewhat expected, the extent is at this stage unknown.

From the data front in the emerging market world, China, following a pick-up in the previous month, saw a marginal contraction in the manufacturing sector. Manufacturing, amid frequent coronavirus outbreaks and weak demand, fell to 49.9 in November from 50.6 in the previous month. November’s reading was the second one revolving in contractionary territory since April 2020. Despite a rise in infections, services in China remained in expansionary territory. In November, services PMI declined to 52.1 from 53.8 in October, pointing to the weakest growth in three months. Business activity and new orders expanded at the slowest pace in three successive months. Exports remained subdued while employment rose for the third straight month and at the fastest pace since May 2021. Inflationary pressures persisted. Notably, input costs accelerated to a six-month high on higher labour, raw material, and energy costs.

Over to Brazil, business activity in Latin America’s largest economy dropped to 52 in November from 53.4 in the previous month. Albeit the slowest, the figure pointed to a sixth straight month of expansion in the country’s private sector. Growth was mainly supported by the services sector, as manufacturing contracted. Sales growth quickened in Brazil’s private sector, as the increase in the services more than offset the sales contraction in manufacturing. Employment however increased in both the manufacturing and services sector. On the pricing front, both input costs and output charges increased at unprecedented rates. Input costs rose at the sharpest pace on record, resulting in near record high prices.

In November EM high yield corporate credit continued on its downward trajectory, as the negative sentiment surrounding China, a key EM, remained. Spreads of high yield emerging market credit, amongst others also conditioned, by the possible systemic financial system risks stemming from the potential collapse of selected real estate developers, widened. Notably, the effective yield of emerging market high yield corporate credit, which takes into account the power of compounding on investment returns, rose to 8.17 per cent. Emerging Market high yield, the worst performer for the month, lost 1.84 per cent. 

In the month of November, the CC Emerging Market Bond Fund declined by 1.55 per cent.

Throughout the month the Manager continued to take an active approach, also seeking pockets of value by looking into attractive credit stories. Namely the manager reduced the fund’s exposure to China real estate segment. Going forward, the Manager will continue to assess the emerging market space scenario even on the basis of further monetary policy actions taken by Central Banks, which seem to follow the Fed’s accommodative stance.

A quick introduction to our Malta Government Bond Fund.

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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 (USD)

$

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

$3000

FUND TYPE

UCITS

BASE CURRENCY

USD

RETURN (SINCE INCEPTION)*

1.82%

*View Performance History below
Inception Date: 02 Nov 2017
ISIN: MT7000021234
Bloomberg Ticker: CCEMBFB MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.97%
Exit Charge: None
Distribution Yield (%): 4.125
Underlying Yield (%): 4.35
Distribution: 31/03 and 30/09
Total Net Assets: $13.8 mn
Month end NAV in USD: 86.83
Number of Holdings: 47
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 34.9

Performance To Date (USD)

Top 10 Holdings

iShares JPM USD EM Bond Fund
5.4%
iShares China Bond USD
4.1%
6.625% NBM US Holdings Inc 2029
4.0%
6.5% Global Ports Finance 2023
3.2%
4.95% Veon Holdings 2024
3.1%
5.8% Oryx Funding ltd 2031
3.1%
5.45% Cemex SAB DE CV 2029
3.1%
4.375% Freeport-McMoran Inc 2028
3.0%
5.8% Turkcell 2028
2.9%
4.75% Banco Santander SA perp
2.9%

Major Sector Breakdown*

Asset 7
Communications
10.4%
Industrials
8.0%
Materials
8.0%
Real Estate
7.2%
Funds
6.6%
Materials
5.0%
*excluding exposures to CIS

Maturity Buckets*

41.8%
0-5 Years
28.4%
5-10 Years
9.5%
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)
20.3%
Brazil
11.0%
Mexico
9.3%
China
8.8%
Russia
7.6%
India
7.4%
United States
6.1%
Oman
4.7%
Turkey
4.4%
Netherlands
3.1%
*including exposures to CIS, using look-through

Asset Allocation

Cash 8.2%
Bonds (incl. ETFs) 91.8%

Performance History (EUR)*

YTD

-0.80%

2020

-0.70%

2019

10.40%

2018

-6.16%

2017***

-0.22%

Annualised Since Inception

0.44%

*Data in the chart does not include any dividends distributed since the Fund 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 reinvestment of any dividends and additional interest gained through compounding.
***The USD Distributor Share Class (Class B) was launched on 03 November 2017.

Currency Allocation

USD 94.9%
Euro 5.1%
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

    November 2021

    The coronavirus pandemic have, since first detected in the Capital of Hubei Province – Wuhan, dominated news headlines. It caught the world by surprise, altering life patterns and dictating economies path forward. Financial markets inevitably felt the pinch.

    Efforts by central banks in the form of stimulus support, and governments, through mitigation measures to reduce the spread, vaccine coverage, and fiscal support, improved the scenario both from a health and economic perspective. However, in recent weeks a surge in coronavirus cases, possibly due to a seasonal effect which may probably contribute to a bigger outbreak, was witnessed. In fact, Europe is experiencing a surge in coronavirus infections, to levels not seen in months.

    A new mutation: the Omicron variant, emerging from southern Africa, augmented fears that countries, owing to the variants’ unprecedented set of genetic mutations may once more be engulfed with infections. Conclusive findings on such emerging mutation, due to its relatively recent discovery, is thus far unavailable. That said, the repercussions, both from a health and economic viewpoint, the latter dependant on the ensuing course of action by governments to mitigate the spread and to ultimately avoid overwhelming hospitals, remain unclear. Vaccination programmes and distribution of boosters – a third dose which shall further increase immunisation against the virus, shall undoubtedly aid to mitigate the impact.

    As concerns over the possible negative effect the Omicron variant may have on global economy rose, yields of U.S. Treasuries, previously portraying an improved and thus more stable economic scenario, and possible stimulus tapering, reversed. Economic data, previously portraying signs of a recovery, may once again falter, should the need for restrictions arise. Albeit somewhat expected, the extent is at this stage unknown.

    From the data front in the emerging market world, China, following a pick-up in the previous month, saw a marginal contraction in the manufacturing sector. Manufacturing, amid frequent coronavirus outbreaks and weak demand, fell to 49.9 in November from 50.6 in the previous month. November’s reading was the second one revolving in contractionary territory since April 2020. Despite a rise in infections, services in China remained in expansionary territory. In November, services PMI declined to 52.1 from 53.8 in October, pointing to the weakest growth in three months. Business activity and new orders expanded at the slowest pace in three successive months. Exports remained subdued while employment rose for the third straight month and at the fastest pace since May 2021. Inflationary pressures persisted. Notably, input costs accelerated to a six-month high on higher labour, raw material, and energy costs.

    Over to Brazil, business activity in Latin America’s largest economy dropped to 52 in November from 53.4 in the previous month. Albeit the slowest, the figure pointed to a sixth straight month of expansion in the country’s private sector. Growth was mainly supported by the services sector, as manufacturing contracted. Sales growth quickened in Brazil’s private sector, as the increase in the services more than offset the sales contraction in manufacturing. Employment however increased in both the manufacturing and services sector. On the pricing front, both input costs and output charges increased at unprecedented rates. Input costs rose at the sharpest pace on record, resulting in near record high prices.

    In November EM high yield corporate credit continued on its downward trajectory, as the negative sentiment surrounding China, a key EM, remained. Spreads of high yield emerging market credit, amongst others also conditioned, by the possible systemic financial system risks stemming from the potential collapse of selected real estate developers, widened. Notably, the effective yield of emerging market high yield corporate credit, which takes into account the power of compounding on investment returns, rose to 8.17 per cent. Emerging Market high yield, the worst performer for the month, lost 1.84 per cent. 

    In the month of November, the CC Emerging Market Bond Fund declined by 1.55 per cent.

    Throughout the month the Manager continued to take an active approach, also seeking pockets of value by looking into attractive credit stories. Namely the manager reduced the fund’s exposure to China real estate segment. Going forward, the Manager will continue to assess the emerging market 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 (USD)

    $

    ASSET CLASS

    Bonds

    MIN. INITIAL INVESTMENT

    $3000

    FUND TYPE

    UCITS

    BASE CURRENCY

    USD

    RETURN (SINCE INCEPTION)*

    1.82%

    *View Performance History below
    Inception Date: 02 Nov 2017
    ISIN: MT7000021234
    Bloomberg Ticker: CCEMBFB MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.97%
    Exit Charge: None
    Distribution Yield (%): 4.125
    Underlying Yield (%): 4.35
    Distribution: 31/03 and 30/09
    Total Net Assets: $13.8 mn
    Month end NAV in USD: 86.83
    Number of Holdings: 47
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 34.9

    Performance To Date (USD)

    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 USD EM Bond Fund
    5.4%
    iShares China Bond USD
    4.1%
    6.625% NBM US Holdings Inc 2029
    4.0%
    6.5% Global Ports Finance 2023
    3.2%
    4.95% Veon Holdings 2024
    3.1%
    5.8% Oryx Funding ltd 2031
    3.1%
    5.45% Cemex SAB DE CV 2029
    3.1%
    4.375% Freeport-McMoran Inc 2028
    3.0%
    5.8% Turkcell 2028
    2.9%
    4.75% Banco Santander SA perp
    2.9%

    Top Holdings by Country*

    Malta (incl. Cash)
    20.3%
    Brazil
    11.0%
    Mexico
    9.3%
    China
    8.8%
    Russia
    7.6%
    India
    7.4%
    United States
    6.1%
    Oman
    4.7%
    Turkey
    4.4%
    Netherlands
    3.1%
    *including exposures to CIS, using look-through

    Major Sector Breakdown*

    Asset 7
    Communications
    10.4%
    Industrials
    8.0%
    Materials
    8.0%
    Real Estate
    7.2%
    Funds
    6.6%
    Materials
    5.0%
    *excluding exposures to CIS

    Asset Allocation

    Cash 8.2%
    Bonds (incl. ETFs) 91.8%

    Maturity Buckets*

    41.8%
    0-5 Years
    28.4%
    5-10 Years
    9.5%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -0.80%

    2020

    -0.70%

    2019

    10.40%

    2018

    -6.16%

    2017***

    -0.22%

    Annualised Since Inception

    0.44%

    *Data in the chart does not include any dividends distributed since the Fund 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 reinvestment of any dividends and additional interest gained through compounding.
    ***The USD Distributor Share Class (Class B) was launched on 03 November 2017.

    Credit Ratings*

    Average Credit Rating: BB
    *excluding exposures to CIS

    Currency Allocation

    USD 94.9%
    Euro 5.1%
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