Investment Objectives

The CC Euro High Income Bond Fund Distributor aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. 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 Distributor is:

  • Seeking to earn a high level of regular income
  • Seeking an actively managed & diversified investment in high income bonds.

Fund Rules

The Investment Manager of the CC Euro High Income Bond Funds – EUR and USD has the duty to ensure that the underlying holdings 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 funds. Some of the restrictions include:

  • The fund may not invest more than 10% of its assets in securities listed by the same body
  • 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 fund
  • The fund may not carry out uncovered sales (naked short-selling) of securities or other financial instruments

Commentary

January 2020

As political turbulence lessened, fears of a global recession dissipated, and the manufacturing cycle seemed to be heading for a turnaround following a ‘phase one’ agreement between US and China, the outlook for 2020 vis-à-vis economic growth, although limited, seemed positive. 

Economic data improved whilst yields, portraying the possibility of a broad economic recovery, advanced. Albeit the recent uptick, yields have once again dropped following the coronavirus outbreak in Wuhan, China. 

Fearing the economic damage from the fast-spreading pneumonia-like virus, investors shunned global equities and sought the relative safety of sovereigns, widely considered as the safer asset, sending yields, to the panicky lows reached a few months ago.  

Ensuing to the latter shift, and subsequent increased demand for safe assets, the benchmark 10-year German Bund tumbled by 27.5 basis points, to -0.434 percent, for the first time since October; a period characterised with weak economic data, and a prolonged US-China trade war, which at that point in time, showed no signs of abating.

In order to shed further light on the direction of the European economy and its recovery, markets eagerly awaited economic data points. The region’s Manufacturing PMI was revised higher to 47.9 in January 2020, above December’s 46.3, whilst the Services PMI edged lower to 52.2 and below market estimates of 52.8. Meanwhile, Eurozone’s inflation rate rose to 1.4 percent year-on-year in January 2020, in-line with market expectations, and up from 1.3 percent in the previous month. It is worth noting that the latter rate is the highest since June, and was mainly boosted by an increase at a faster pace for food, alcohol, and tobacco. 

Notably, during their January meeting, the governing council of the European Central Bank (ECB) left the key interest rate on the main refinancing operations steady at 0%. 

Furthermore, on the political front, Boris Johnson led Britain towards an exit out of the EU, after a 47-year membership. Upon the news, which have somewhat diminished uncertainties, the UK 10-year yield edged higher to 0.53%.  

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)*

39.57%

*View Performance History below
Inception Date: 01 Sep 2011
ISIN: MT7000003059
Bloomberg Ticker: CALCHIE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.48%
Exit Charge: None
Distribution Yield (%): 3.80
Underlying Yield (%): 4.34
Distribution: 31/03 and 30/09
Total Net Assets: € 44.2 m
Month end NAV in EUR: 93.07
Number of Holdings: 95
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 20.0

Performance To Date (EUR)

Top 10 Holdings

4.125% HP Pelzer 2024
2.4%
5.00% Nidda Bondco 2025
2.3%
6.00% Loxam 2025
2.1%
2.25% Portugal Treasury 2034
2.1%
5.00% Tendam Brands 2024
2.1%
4.00% Chemours 2026
2.1%
5.875% Selecta 2024
1.8%
7.50% Garfunkelux 2022
1.8%
7.00% Marb Bondco 2024
1.7%
6.75% Promontoria 2023
1.7%

Major Sector Breakdown*

Financials
24.9%
Consumer Discretionary
15.9%
Consumer Staples
10.7%
Industrials
8.3%
Asset 7
Communications
7.4%
Materials
6.9%
*excluding exposures to CIS

Maturity Buckets*

63.2%
0-5 Years
20.6%
5-10 Years
3.6%
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
12.6%
Germany
10.9%
Spain
8.1%
Brazil
7.8%
Switzerland
5.6%
USA
5.3%
Russia
3.4%
Ireland
2.9%
UK
2.7%
*including exposures to CIS

Asset Allocation

Cash 7.1%
Bonds 87.4%
CIS/ETFs 5.5%

Performance History (EUR)*

YTD

0.52%

2019

7.47%

2018

-6.44%

2017

5.31%

2016

4.97%

Inception***

39.57%

*Data in the chart does not include any dividends distributed since the Fund was launched on 1st September 2011.
**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 Distributor Share Class (Class D) was launched on 01 September 2011.

Currency Allocation

Euro 84.9%
USD 15.1%
Other 0.0%

Risk Statistics

Sharpe Ratio
0.94 (3Y)
0.74 (5Y)
Std. Deviation
2.69 (3Y)
3.37 (5Y)

Interested in this product?

  • Investment Objectives

    The CC Euro High Income Bond Fund Distributor aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. 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 Distributor is:

    • Seeking to earn a high level of regular income
    • Seeking an actively managed & diversified investment in high income bonds.
    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 securities listed by the same body
    • 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 fund
    • The fund may not carry out uncovered sales (naked short-selling) of securities or other financial instruments
  • Commentary

    January 2020

    As political turbulence lessened, fears of a global recession dissipated, and the manufacturing cycle seemed to be heading for a turnaround following a ‘phase one’ agreement between US and China, the outlook for 2020 vis-à-vis economic growth, although limited, seemed positive. 

    Economic data improved whilst yields, portraying the possibility of a broad economic recovery, advanced. Albeit the recent uptick, yields have once again dropped following the coronavirus outbreak in Wuhan, China. 

    Fearing the economic damage from the fast-spreading pneumonia-like virus, investors shunned global equities and sought the relative safety of sovereigns, widely considered as the safer asset, sending yields, to the panicky lows reached a few months ago.  

    Ensuing to the latter shift, and subsequent increased demand for safe assets, the benchmark 10-year German Bund tumbled by 27.5 basis points, to -0.434 percent, for the first time since October; a period characterised with weak economic data, and a prolonged US-China trade war, which at that point in time, showed no signs of abating.

    In order to shed further light on the direction of the European economy and its recovery, markets eagerly awaited economic data points. The region’s Manufacturing PMI was revised higher to 47.9 in January 2020, above December’s 46.3, whilst the Services PMI edged lower to 52.2 and below market estimates of 52.8. Meanwhile, Eurozone’s inflation rate rose to 1.4 percent year-on-year in January 2020, in-line with market expectations, and up from 1.3 percent in the previous month. It is worth noting that the latter rate is the highest since June, and was mainly boosted by an increase at a faster pace for food, alcohol, and tobacco. 

    Notably, during their January meeting, the governing council of the European Central Bank (ECB) left the key interest rate on the main refinancing operations steady at 0%. 

    Furthermore, on the political front, Boris Johnson led Britain towards an exit out of the EU, after a 47-year membership. Upon the news, which have somewhat diminished uncertainties, the UK 10-year yield edged higher to 0.53%.  

    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)*

    39.57%

    *View Performance History below
    Inception Date: 01 Sep 2011
    ISIN: MT7000003059
    Bloomberg Ticker: CALCHIE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.48%
    Exit Charge: None
    Distribution Yield (%): 3.80
    Underlying Yield (%): 4.34
    Distribution: 31/03 and 30/09
    Total Net Assets: € 44.2 m
    Month end NAV in EUR: 93.07
    Number of Holdings: 95
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 20.0

    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

    4.125% HP Pelzer 2024
    2.4%
    5.00% Nidda Bondco 2025
    2.3%
    6.00% Loxam 2025
    2.1%
    2.25% Portugal Treasury 2034
    2.1%
    5.00% Tendam Brands 2024
    2.1%
    4.00% Chemours 2026
    2.1%
    5.875% Selecta 2024
    1.8%
    7.50% Garfunkelux 2022
    1.8%
    7.00% Marb Bondco 2024
    1.7%
    6.75% Promontoria 2023
    1.7%

    Top Holdings by Country*

    Malta
    13.0%
    France
    12.6%
    Germany
    10.9%
    Spain
    8.1%
    Brazil
    7.8%
    Switzerland
    5.6%
    USA
    5.3%
    Russia
    3.4%
    Ireland
    2.9%
    UK
    2.7%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    24.9%
    Consumer Discretionary
    15.9%
    Consumer Staples
    10.7%
    Industrials
    8.3%
    Asset 7
    Communications
    7.4%
    Materials
    6.9%
    *excluding exposures to CIS

    Asset Allocation

    Cash 7.1%
    Bonds 87.4%
    CIS/ETFs 5.5%

    Maturity Buckets*

    63.2%
    0-5 Years
    20.6%
    5-10 Years
    3.6%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    0.52%

    2019

    7.47%

    2018

    -6.44%

    2017

    5.31%

    2016

    4.97%

    Inception***

    39.57%

    *Data in the chart does not include any dividends distributed since the Fund was launched on 1st September 2011.
    **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 Distributor Share Class (Class D) was launched on 01 September 2011.

    Credit Ratings*

    Average Credit Rating: BB-
    *excluding exposures to CIS

    Currency Allocation

    Euro 84.9%
    USD 15.1%
    Other 0.0%

    Risk Statistics

    Sharpe Ratio
    0.94 (3Y)
    0.74 (5Y)
    Std. Deviation
    2.69 (3Y)
    3.37 (5Y)
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