Investment Objectives

The CC Euro High Income Bond Fund Accumulator aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. To achieve this objective, the Investment Manager invests primarily in a diversified portfolio of over 65 intermediate term, corporate & government bonds with maturities of 10 years and less.

Investor Profile

A typical investor in the CC Euro High Income Bond Fund Accumulator is:

  • Seeking to accumulate wealth and save over time in a product that re-invests gross dividends automatically.
  • Planning to hold their investment for the medium-to-long term so as to benefit from the compound interest effect.

Fund Rules

The Investment Manager of the CC Euro High Income Bond Fund Accumulator – 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 of the fund. Some of the restrictions include:

  • The fund may not invest more than 10% of its assets in the same company
  • The fund may not keep more than 10% of its assets on deposit with any one credit institution. This limit may be increased to 30% in respect of deposits with an Approved Institution
  • The fund may not invest more than 20% of its assets in any other other fund
  • The fund may not carry out uncovered sales (naked short-selling) of securities or other financial instruments

Commentary

December 2019

As anticipated, tensions between the U.S. and China eased toward the end of the year, following a phase-one deal agreement between the two most powerful economies in the world, which in turn diminished trade war escalations. This boosted confidence and lessened uncertainty across markets, which closed-off the year with remarkable gains, particularly within the equity space. The news came after 20 months of on-and-off negotiations and tariff escalations that unsettled markets and damped global economic growth.

Although a phase-one deal proved important to avoid a direct impact on the consumer at large, some of the biggest sources of strain in the bilateral relationship, such as China’s use of industrial subsidies and state-owned enterprises were left at bay, leaving these thorny issues to a later stage.

In Europe, markets eagerly awaited economic data points, in order to shed further light on the direction of the economy. The region’s composite PMI remained unchanged at 50.6 in December, slightly below market expectations of 50.7. Meanwhile, Eurozone’s inflation rate rose to 1.3 percent year-on-year in December 2019, from 1 percent in the previous month. It is worth noting that the latter rate is the highest since June, and was mainly boosted by a rebound in energy prices and a faster increase in unprocessed food costs.

Furthermore, on the political front, Boris Johnson as predicted won big at the UK general election, paving way for Brexit to take place. The expectation of, along with the emphatic victory itself, resulted in the sterling registering one of its biggest ever one-day gains. Similarly, upon the news, which have somewhat diminished uncertainties, the UK 10 year yield increased to 0.82%, the highest since August.

Looking at the fixed income asset class per se, government bond yields continued to trade within a range, as investors continued to be conditioned by the better than expected economic data. Indeed, the mostly sought benchmark, the German Bund closed the month at -0.19 percent, up from -0.28 percent at the beginning of the same month. The risk-off mode in the last days of the year was also reflected in risky bonds with European HY registering a monthly gain of 0.97 percent.

The CC Euro High Income fund closed the month on a strong tone by locking in a 1.6 percent gain, thus outperforming its internal comparable benchmark by circa 0.63 percent, while the fund posted a 7.5 percent performance net of fees for 2019. The main outperformance was brought about by Aldesa, the Spanish construction company, which saw its’ price surging following the announcement that China Railways will be acquiring 75 percent of the company. Furthermore, the higher beta names, such as CMA CGM, the French container and shipping company, continued to perform well on easier trade tensions, in addition to the announcement by the company of asset disposals.

Moving into 2020, the Manager believes that returns within the fixed income space will be primarily generated through the carry trade. Central Banks will continue to be accommodative, a positive for credit markets, however one should also consider the current tight spreads at which risky assets are trading. In this regard, the Manager will continue to adopt its bottom-up approach in order to identify value

A quick introduction to our Euro High Income 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 (EUR)

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

16.05%

*View Performance History below
Inception Date: 30 May 2013
ISIN: MT7000007761
Bloomberg Ticker: CALCHAR MV
Entry Charge: None
Total Expense Ratio: 1.48%
Exit Charge: None
Distribution Yield (%): N/A
Underlying Yield (%): 4.48
Distribution: N/A
Total Net Assets: €44.0 m
Month end NAV in EUR: 126.52
Number of Holdings: 95
Auditors: Deloitte Malta
Legal Advisor: Ganado & Associates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 20.2

Performance To Date (EUR)

Top 10 Holdings

5.00% Nidda Bondco 2025
2.4%
4.125% HP Pelzer 2024
2.3%
6.00% Loxam 2025
2.1%
5.00% Tendam Brands 2024
2.1%
4.00% Chemours 2026
2.1%
2.25% Portugal Treasury 2034
2.1%
5.875% Selecta 2024
1.9%
7.50% Garfunkelux 2022
1.8%
7.00% Marb Bondco 2024
1.7%
6.50% CMA CGM 2022
1.7%

Major Sector Breakdown*

Financials
259%
Consumer Discretionary
16.1%
Consumer Staples
10.8%
Industrials
8.5%
Asset 7
Communications
7.5%
Materials
7.0%
*excluding exposures to CIS

Maturity Buckets*

50.1%
0-5 Years
18.6%
5-10 Years
0.3%
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
13.0%
France
12.8%
Germany
11.0%
Spain
8.1%
Brazil
7.7%
Switzerland
5.7%
USA
5.4%
Russia
3.4%
Ireland
2.9%
UK
2.8%
*including exposures to CIS

Asset Allocation

Cash 5.5%
Bonds 88.9%
CIS/ETFs 5.5%

Performance History (EUR)*

YTD

7.48%

2018

-6.45%

2017

5.32%

2016

4.96%

2015

-0.89%

Inception*

16.05%

*The Accumulator Share Class (Class A) was launched on 29 May 2013

Currency Allocation

Euro 84.1%
USD 15.9%
Other 0.00%

Risk Statistics

Sharpe Ratio
0.92 (3Y)
0.75 (5Y)
Std. Deviation
2.70 (3Y)
3.36 (5Y)

Interested in this product?

  • Investment Objectives

    The CC Euro High Income Bond Fund Accumulator aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. To achieve this objective, the Investment Manager invests primarily in a diversified portfolio of over 65 intermediate term, corporate & government bonds with maturities of 10 years and less.

  • Investor profile

    A typical investor in the CC Euro High Income Bond Fund Accumulator is:

    • Seeking to accumulate wealth and save over time in a product that re-invests gross dividends automatically.
    • Planning to hold their investment for the medium-to-long term so as to benefit from the compound interest effect.
    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

    • The fund may not invest more than 10% of its assets in the same company
    • The fund may not keep more than 10% of its assets on deposit with any one credit institution. This limit may be increased to 30% in respect of deposits with an Approved Institution
    • The fund may not invest more than 20% of its assets in any other other fund
    • The fund may not carry out uncovered sales (naked short-selling) of securities or other financial instruments
  • Commentary

    December 2019

    As anticipated, tensions between the U.S. and China eased toward the end of the year, following a phase-one deal agreement between the two most powerful economies in the world, which in turn diminished trade war escalations. This boosted confidence and lessened uncertainty across markets, which closed-off the year with remarkable gains, particularly within the equity space. The news came after 20 months of on-and-off negotiations and tariff escalations that unsettled markets and damped global economic growth.

    Although a phase-one deal proved important to avoid a direct impact on the consumer at large, some of the biggest sources of strain in the bilateral relationship, such as China’s use of industrial subsidies and state-owned enterprises were left at bay, leaving these thorny issues to a later stage.

    In Europe, markets eagerly awaited economic data points, in order to shed further light on the direction of the economy. The region’s composite PMI remained unchanged at 50.6 in December, slightly below market expectations of 50.7. Meanwhile, Eurozone’s inflation rate rose to 1.3 percent year-on-year in December 2019, from 1 percent in the previous month. It is worth noting that the latter rate is the highest since June, and was mainly boosted by a rebound in energy prices and a faster increase in unprocessed food costs.

    Furthermore, on the political front, Boris Johnson as predicted won big at the UK general election, paving way for Brexit to take place. The expectation of, along with the emphatic victory itself, resulted in the sterling registering one of its biggest ever one-day gains. Similarly, upon the news, which have somewhat diminished uncertainties, the UK 10 year yield increased to 0.82%, the highest since August.

    Looking at the fixed income asset class per se, government bond yields continued to trade within a range, as investors continued to be conditioned by the better than expected economic data. Indeed, the mostly sought benchmark, the German Bund closed the month at -0.19 percent, up from -0.28 percent at the beginning of the same month. The risk-off mode in the last days of the year was also reflected in risky bonds with European HY registering a monthly gain of 0.97 percent.

    The CC Euro High Income fund closed the month on a strong tone by locking in a 1.6 percent gain, thus outperforming its internal comparable benchmark by circa 0.63 percent, while the fund posted a 7.5 percent performance net of fees for 2019. The main outperformance was brought about by Aldesa, the Spanish construction company, which saw its’ price surging following the announcement that China Railways will be acquiring 75 percent of the company. Furthermore, the higher beta names, such as CMA CGM, the French container and shipping company, continued to perform well on easier trade tensions, in addition to the announcement by the company of asset disposals.

    Moving into 2020, the Manager believes that returns within the fixed income space will be primarily generated through the carry trade. Central Banks will continue to be accommodative, a positive for credit markets, however one should also consider the current tight spreads at which risky assets are trading. In this regard, the Manager will continue to adopt its bottom-up approach in order to identify value

  • 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)*

    16.05%

    *View Performance History below
    Inception Date: 30 May 2013
    ISIN: MT7000007761
    Bloomberg Ticker: CALCHAR MV
    Entry Charge: None
    Total Expense Ratio: 1.48%
    Exit Charge: None
    Distribution Yield (%): N/A
    Underlying Yield (%): 4.48
    Distribution: N/A
    Total Net Assets: €44.0 m
    Month end NAV in EUR: 126.52
    Number of Holdings: 95
    Auditors: Deloitte Malta
    Legal Advisor: Ganado & Associates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 20.2

    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

    5.00% Nidda Bondco 2025
    2.4%
    4.125% HP Pelzer 2024
    2.3%
    6.00% Loxam 2025
    2.1%
    5.00% Tendam Brands 2024
    2.1%
    4.00% Chemours 2026
    2.1%
    2.25% Portugal Treasury 2034
    2.1%
    5.875% Selecta 2024
    1.9%
    7.50% Garfunkelux 2022
    1.8%
    7.00% Marb Bondco 2024
    1.7%
    6.50% CMA CGM 2022
    1.7%

    Top Holdings by Country*

    Malta
    13.0%
    France
    12.8%
    Germany
    11.0%
    Spain
    8.1%
    Brazil
    7.7%
    Switzerland
    5.7%
    USA
    5.4%
    Russia
    3.4%
    Ireland
    2.9%
    UK
    2.8%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    259%
    Consumer Discretionary
    16.1%
    Consumer Staples
    10.8%
    Industrials
    8.5%
    Asset 7
    Communications
    7.5%
    Materials
    7.0%
    *excluding exposures to CIS

    Asset Allocation

    Cash 5.5%
    Bonds 88.9%
    CIS/ETFs 5.5%

    Maturity Buckets*

    50.1%
    0-5 Years
    18.6%
    5-10 Years
    0.3%
    10 Years+
    based on the Next Call Date

    Performance History (EUR)*

    YTD

    7.48%

    2018

    -6.45%

    2017

    5.32%

    2016

    4.96%

    2015

    -0.89%

    Inception*

    16.05%

    *The Accumulator Share Class (Class A) was launched on 29 May 2013

    Credit Ratings*

    Average Credit Rating: BB-
    *excluding exposures to CIS

    Currency Allocation

    Euro 84.1%
    USD 15.9%
    Other 0.00%

    Risk Statistics

    Sharpe Ratio
    0.92 (3Y)
    0.75 (5Y)
    Std. Deviation
    2.70 (3Y)
    3.36 (5Y)
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