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 Fund 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

August 2021

Since first detected in January 2020, the coronavirus pandemic and ensuing global response have dictated economic activity and markets way forward. Markets initially headed significantly lower as the economic landscape, following the imposition of movement restrictions, deteriorated. However, a concerted effort by both Central banks and governments led to what we are witnessing today – a robust economic recovery and upward trajectory in financial markets. 

From an economic viewpoint, the path towards a full recovery, proved bumpier than previously anticipated. A vaccination drive taking long to pick-up speed along with a more severe wave of infections, lessened the pace of the recovery. The outlook, albeit currently faced with a slowdown in growth and a rapid increase in infections, seems benevolent.

The Delta variant, first originated in India and considered to be significantly more transmissible than previous strains, is said to be behind the recent rapid rise in infections. Countries witnessing a rise in infection rate, led their authorities to re-think their way forward, with some resorting to a re-introduction of restrictive measures. Some, also announced booster programmes to deliver third doses to their population.

Although the developed market world appears to be at or just past the peak rate of growth, economic data has largely remained positive.

In August, the Eurozone manufacturing PMI stood at 61.4, little-changed from a preliminary estimate of 61.5, but down from 62.8 in July. The reading marked the second successive month in which growth has slowed in the manufacturing segment, since June’s survey’s record expansion, amid signs of strong capacity constraints. Despite edging lower from the previous month’s 15-year high, services – previously posing a drag on the Euro area’s economic recovery, also remained in expansionary territory. Eurozone Services PMI dropped to 59.0, from July’s 59.8.

The slowdown in economic activity was particularly pronounced in Europe’s largest economy, Germany. Albeit still reporting strong PMI data, revolving in expansionary territory, activity in both manufacturing and services saw declines. In August, manufacturing PMI was revised slightly lower to 62.6 from a preliminary estimate of 62.7, and significantly lower from July’s 65.9. August’s reading pointed to the slowest growth in factory activity since February 2021 as German manufacturers struggled to keep pace with demand due to constraints posed by supply shortages. Output growth also fell behind that of new orders to the greatest extent in the survey’s history. Services, in recent months benefitting from the easing of restrictive measures, also showed signs of weakening. Germany’s services PMI was revised lower to 60.8 from market estimates of 61.5, and down from 61.8 in July.

Eurozone inflation was estimated at 3 per cent in August of 2021, higher than July’s actual 2.2 per cent and above economist expectations of 2.7 per cent. July’s flash reading is the highest since November 2011. Month-on-month, inflation increased by 0.40 per cent, preliminary estimates showed.

Albeit concerns over the Delta variant and signs of global growth momentum possibly easing in developed world, corporate credit largely performed well in August. European high yield outperformed its higher-rated counterparts, generating total positive returns as sovereign yields reversed some of the recent downward moves. Indeed, the 10-year German Bund, closed the month higher at -0.39 per cent compared to -0.46 per cent at the end of July. Earlier in the month, the yield on Europe’s most sought-after benchmark had touched six-month lows of -0.52 per cent amid concerns over a weaker global economic outlook due to coronavirus outbreaks and prospects of early tapering by the U.S. Federal Reserve. Bond yields of sovereigns within the bloc’s periphery – those which offer a premium over Germany’s negative yielding debt, also rose, at somewhat similar pace. In August, Italy’s and Spain’s 10-year sovereign yields rose 9bps and 7bps, respectively.

The CC Euro High Income Bond Fund increased by 0.36 per cent in August. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the industrial, automotive, and property sectors. Among other names, the Manager increased its exposure in Mexican global automotive parts manufacturing company Nemak and CPI Property Group – a real estate company having income-generating commercial properties focused on the Czech Republic, Berlin, Warsaw and the Central & Eastern European region. Moreover, the Manager opened a position in Energizer, the battery producer given its free cash flow model and premium over other European denominated HY debt.

Going forward the Managers believe that credit markets will continue to be aided by the support of primarily monetary politicians, creating a positive technical environment. In terms of bond picking, the Managers will continue to monitor the current environment and take opportunities in attractive credit stories which should continue to add value to the portfolio.

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)*

41.89%

*View Performance History below
Inception Date: 01 Sep 2011
ISIN: MT7000003059
Bloomberg Ticker: CALCHIE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.63%
Exit Charge: None
Distribution Yield (%): 3.30
Underlying Yield (%): 4.34
Distribution: 31/03 and 30/09
Total Net Assets: € 45.95 mn
Month end NAV in EUR: 89.88
Number of Holdings: 78
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 25

Performance To Date (EUR)

Top 10 Holdings

iShares Euro HY Corp
4.2%
iShares Fallen Angels HY Corp
3.4%
4.875% CPI Property Group perp
2.7%
4% Chemours Co. 2026
2.3%
5% Nidda Bondco GMBH 2025
2.2%
5.25% HSBC Holdings plc perp
2.1%
2.5% Hapag Lloyd AG 2028
2.1%
6% Loxam SAS 2025
2.0%
4.25% Encore Capital Group 2028
2.0%
4.625% Volkswagen perp
2.0%

Major Sector Breakdown*

Financials
13.6%
Asset 7
Communications
10.9%
Funds
9.5%
Industrials
8.2%
Consumer Discretionary
5.9%
Consumer Discretionary
5.5%
*excluding exposures to CIS

Maturity Buckets*

70.2%
0-5 Years
12.9%
5-10 Years
1.9%
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*

Germany
11.5%
France
8.8%
Spain
6.9%
Italy
4.6%
Netherlands
3.8%
Malta
3.5%
Turkey
3.3%
Ireland
3.1%
Brazil
3.1%
India
1.6%
*including exposures to CIS

Asset Allocation

Cash 5.5%
Bonds 85.0%
CIS/ETFs 9.5%

Performance History (EUR)*

YTD

2.34%

2020

-0.15%

2019

7.47%

2018

-6.44%

2017

5.31%

Annualised Since Inception***

3.56%

*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 84.5%
USD 15.5%
Other 0.0%

Risk Statistics

Sharpe Ratio
0.27 (3Y)
0.36 (5Y)
Std. Deviation
8.67% (3Y)
6.90% (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

    August 2021

    Since first detected in January 2020, the coronavirus pandemic and ensuing global response have dictated economic activity and markets way forward. Markets initially headed significantly lower as the economic landscape, following the imposition of movement restrictions, deteriorated. However, a concerted effort by both Central banks and governments led to what we are witnessing today – a robust economic recovery and upward trajectory in financial markets. 

    From an economic viewpoint, the path towards a full recovery, proved bumpier than previously anticipated. A vaccination drive taking long to pick-up speed along with a more severe wave of infections, lessened the pace of the recovery. The outlook, albeit currently faced with a slowdown in growth and a rapid increase in infections, seems benevolent.

    The Delta variant, first originated in India and considered to be significantly more transmissible than previous strains, is said to be behind the recent rapid rise in infections. Countries witnessing a rise in infection rate, led their authorities to re-think their way forward, with some resorting to a re-introduction of restrictive measures. Some, also announced booster programmes to deliver third doses to their population.

    Although the developed market world appears to be at or just past the peak rate of growth, economic data has largely remained positive.

    In August, the Eurozone manufacturing PMI stood at 61.4, little-changed from a preliminary estimate of 61.5, but down from 62.8 in July. The reading marked the second successive month in which growth has slowed in the manufacturing segment, since June’s survey’s record expansion, amid signs of strong capacity constraints. Despite edging lower from the previous month’s 15-year high, services – previously posing a drag on the Euro area’s economic recovery, also remained in expansionary territory. Eurozone Services PMI dropped to 59.0, from July’s 59.8.

    The slowdown in economic activity was particularly pronounced in Europe’s largest economy, Germany. Albeit still reporting strong PMI data, revolving in expansionary territory, activity in both manufacturing and services saw declines. In August, manufacturing PMI was revised slightly lower to 62.6 from a preliminary estimate of 62.7, and significantly lower from July’s 65.9. August’s reading pointed to the slowest growth in factory activity since February 2021 as German manufacturers struggled to keep pace with demand due to constraints posed by supply shortages. Output growth also fell behind that of new orders to the greatest extent in the survey’s history. Services, in recent months benefitting from the easing of restrictive measures, also showed signs of weakening. Germany’s services PMI was revised lower to 60.8 from market estimates of 61.5, and down from 61.8 in July.

    Eurozone inflation was estimated at 3 per cent in August of 2021, higher than July’s actual 2.2 per cent and above economist expectations of 2.7 per cent. July’s flash reading is the highest since November 2011. Month-on-month, inflation increased by 0.40 per cent, preliminary estimates showed.

    Albeit concerns over the Delta variant and signs of global growth momentum possibly easing in developed world, corporate credit largely performed well in August. European high yield outperformed its higher-rated counterparts, generating total positive returns as sovereign yields reversed some of the recent downward moves. Indeed, the 10-year German Bund, closed the month higher at -0.39 per cent compared to -0.46 per cent at the end of July. Earlier in the month, the yield on Europe’s most sought-after benchmark had touched six-month lows of -0.52 per cent amid concerns over a weaker global economic outlook due to coronavirus outbreaks and prospects of early tapering by the U.S. Federal Reserve. Bond yields of sovereigns within the bloc’s periphery – those which offer a premium over Germany’s negative yielding debt, also rose, at somewhat similar pace. In August, Italy’s and Spain’s 10-year sovereign yields rose 9bps and 7bps, respectively.

    The CC Euro High Income Bond Fund increased by 0.36 per cent in August. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the industrial, automotive, and property sectors. Among other names, the Manager increased its exposure in Mexican global automotive parts manufacturing company Nemak and CPI Property Group – a real estate company having income-generating commercial properties focused on the Czech Republic, Berlin, Warsaw and the Central & Eastern European region. Moreover, the Manager opened a position in Energizer, the battery producer given its free cash flow model and premium over other European denominated HY debt.

    Going forward the Managers believe that credit markets will continue to be aided by the support of primarily monetary politicians, creating a positive technical environment. In terms of bond picking, the Managers will continue to monitor the current environment and take opportunities in attractive credit stories which should continue to add value to the portfolio.

  • 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)*

    41.89%

    *View Performance History below
    Inception Date: 01 Sep 2011
    ISIN: MT7000003059
    Bloomberg Ticker: CALCHIE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.63%
    Exit Charge: None
    Distribution Yield (%): 3.30
    Underlying Yield (%): 4.34
    Distribution: 31/03 and 30/09
    Total Net Assets: € 45.95 mn
    Month end NAV in EUR: 89.88
    Number of Holdings: 78
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 25

    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 Euro HY Corp
    4.2%
    iShares Fallen Angels HY Corp
    3.4%
    4.875% CPI Property Group perp
    2.7%
    4% Chemours Co. 2026
    2.3%
    5% Nidda Bondco GMBH 2025
    2.2%
    5.25% HSBC Holdings plc perp
    2.1%
    2.5% Hapag Lloyd AG 2028
    2.1%
    6% Loxam SAS 2025
    2.0%
    4.25% Encore Capital Group 2028
    2.0%
    4.625% Volkswagen perp
    2.0%

    Top Holdings by Country*

    Germany
    11.5%
    France
    8.8%
    Spain
    6.9%
    Italy
    4.6%
    Netherlands
    3.8%
    Malta
    3.5%
    Turkey
    3.3%
    Ireland
    3.1%
    Brazil
    3.1%
    India
    1.6%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    13.6%
    Asset 7
    Communications
    10.9%
    Funds
    9.5%
    Industrials
    8.2%
    Consumer Discretionary
    5.9%
    Consumer Discretionary
    5.5%
    *excluding exposures to CIS

    Asset Allocation

    Cash 5.5%
    Bonds 85.0%
    CIS/ETFs 9.5%

    Maturity Buckets*

    70.2%
    0-5 Years
    12.9%
    5-10 Years
    1.9%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    2.34%

    2020

    -0.15%

    2019

    7.47%

    2018

    -6.44%

    2017

    5.31%

    Annualised Since Inception***

    3.56%

    *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 84.5%
    USD 15.5%
    Other 0.0%

    Risk Statistics

    Sharpe Ratio
    0.27 (3Y)
    0.36 (5Y)
    Std. Deviation
    8.67% (3Y)
    6.90% (5Y)
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