Investment Objectives

The Fund aims to maximise the total level of return for investors through investment, primarily, in a diversified portfolio of debt securities and other fixed income or interest bearing securities. In pursuing this objective, the Investment Manager shall invest primarily in a diversified portfolio of intermediate term, corporate & government bonds with maturities of 10 years and less, 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.

The Fund is actively managed, not managed by reference to any index.

Investor Profile

A typical investor in the CC Global 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 Global 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 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

April 2022

Introduction        
April, along the same route of the preceding three months and first quarter of the year proved negative for financial markets. Russia’s invasion in Ukraine, stringent Covid-19 policies in China once more prompting demand concerns and supply-chain disruptions, and expectations of a swift tightening in US monetary policy all weighed on sentiment. Credit markets came under pressure with investment grade and high-yield corporate credit delivering negative returns as treasury yields – pricing in the Fed’s hawkish stance – maintained the upward trajectory. Also, the positive correlation to US paper led European sovereign yields higher.

Market environment and performance
The US economy unexpectedly contracted by an annualized 1.4 per cent on quarter in the first three months of 2022 against expectations of a 1.1 per cent expansion, and following a 6.9 per cent growth in Q4 2021. A record trade deficit and a decline in inventory investment have seemingly weighed on.

In April, aggregate business activity in the US continued to signal an expansion across the private sector. Such expansion, reading at 56, however proved slightly slower than the upturn at the end of Q1, as softer data in the service sector offset the faster expansion in manufacturing.  US services PMI, albeit revised higher from a preliminary of 54.7 to 55.6, came in lower than the previous months reading of 58. Meanwhile, manufacturing PMI headed higher to 59.2 from 58.8 in March, pointing to the strongest growth in factory activity in seven months.

Annual inflation rate in the US slowed to 8.3 per cent in April, from 8.5 per cent in the previous month, yet exceeding market expectations of 8.1 per cent. The reading marked the 14th consecutive month that inflation is above the Fed’s 2 per cent target as energy costs and food prices weigh. Similarly, core inflation, which excludes transitory or temporary price volatility, slowed to 6.2 per cent from 6.5 per cent a month earlier.

In regards to the labour market, the US economy added 428,000 jobs in April 2022, above market estimates of 391,000 yet lower than February’s notable 714,000 gain, amid an increasingly tight labour market. Job gains were widespread, with the highest noted in the leisure and hospitality, and manufacturing.                                         

US Treasury yields furthered on the strong upward trajectory witnessed in March, heading to highest in years on expectations of a more aggressive interest rate increase and in spite of worsening sentiment due to China’s stringent coronavirus curbs. Notably, Chair of the Fed Jerome Powell signalled that a 50-basis point hike would take place in May to step-up the Fed’s efforts against inflationary pressures.  Overall, the yield on the benchmark 10-year Treasury closed the month 60bps higher than the previous month end, at 2.93 per cent.

Global high yield corporate credit, for a fourth-month running saw total negative returns of 3.24 per cent.

Fund performance
In the month of April, the Global High-Income Bond Fund registered a loss of 2.42 per cent, in line with the spread widening across high yield corporate credit. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories while maintaining adequate cash levels as yields continued to widen and keeping a low portfolio duration, this to reduce the funds sensitivity to changes in interest rates. In the month, as IG bonds had a rough ride, the Manager increased its exposure to higher credit quality issuers, namely; Kraft Heinz and American multinational oil and gas corporation Exxon Mobil on attractive entry levels.

Market and investment outlook
Going forward the Manager believes that credit markets will largely remain conditioned by monetary decisions taken, thus far proving more hawkish than the economic outlook possibly warrants, altering benchmark yields, now revolving at notable highs. Such upward shift in yields, particularly at the longer-end of the yield curve – influenced by market participants – weighed on the performance of credit markets which on a year-to-date basis stand substantially negative. A prudent approach to tackling price pressures is more-than-ever imperative not to hinder growth, and thus worsen the economic situation.

Albeit economic data showed signs of weakening, inflationary pressures continued to prompt the Fed into a more aggressive path of interest rate hikes. That being said, the Fed will remain mindful that inflation may in Q3 ease should supply disruptions, a prime source of inflation, largely abate.

In terms of bond picking, the Manager will continue to monitor the current unprecedented environment and take opportunities in attractive credit stories which should continue to add value to the portfolio. The recent widening in corporate credit spreads may indeed pose an opportunity, presenting attractive entry points.

A quick introduction to our Global 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 (USD)

$

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

$3000

FUND TYPE

UCITS

BASE CURRENCY

USD

RETURN (SINCE INCEPTION)*

14.14%

*View Performance History below
Inception Date: 29 May 2013
ISIN: MT7000007753
Bloomberg Ticker: CALCHIA MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.55%
Exit Charge: None
Distribution Yield (%): N/A
Underlying Yield (%): 5.21
Distribution: N/A
Total Net Assets: $16.05 mn
Month end NAV in USD: 119.60
Number of Holdings: 51
Auditors: Deloitte Malta
Legal Advisor: Ganado & Associates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 35.4

Performance To Date (USD)

Top 10 Holdings

iShares USD HY Corp Dist
8.1%
8% Unicredit Spa perp
3.9%
6.25% HSBC Holdings plc perp
3.8%
6.75% Societe General perp
3.6%
4% JP Morgan Chase & Co perp
3.5%
5.299% Petrobras Global Fin 2025
2.6%
.375% Chemours Co 2027
2.5%
6.35% Republic of Turkey 2024
2.5%
4.375% Freeport McMoran Inc 2028
2.5%
5.5% Cheplapharm 2028
2.4%

Major Sector Breakdown*

Financials
20.2%
Materials
9.0%
Funds
8.1%
Materials
7.3%
Materials
6.0%
Asset 7
Communications
5.6%
*excluding exposures to CIS

Maturity Buckets*

51.7%
0-5 Years
21.4%
5-10 Years
9.2%
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*

United States
39.2%
Brazil
9.9%
United Kingdom
5.1%
Turkey
4.9%
France
4.9%
Russian Federation
4.6%
Germany
4.3%
Italy
3.9%
Switzerland
3.3%
India
2.9%
*including exposures to CIS

Asset Allocation

Cash 9.6%
Bonds 82.3%
CIS/ETFs 3.3%

Performance History (EUR)*

YTD

-11.87%

2021

2.38%

2020

3.07%

2019

10.23%

2018

-3.22%

Annualised Since Inception*

1.49%

* The Accumulator Share Class (Class A) was launched on 29th May 2013. 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.
** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

Currency Allocation

USD 100.0%
Other 0.0%

Risk Statistics

Sharpe Ratio
-0.35 (3Y)
-0.24 (5Y)
Std. Deviation
8.82% (3Y)
7.01% (5Y)

Interested in this product?

  • Investment Objectives

    The Fund aims to maximise the total level of return for investors through investment, primarily, in a diversified portfolio of debt securities and other fixed income or interest bearing securities. In pursuing this objective, the Investment Manager shall invest primarily in a diversified portfolio of intermediate term, corporate & government bonds with maturities of 10 years and less, 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.

    The Fund is actively managed, not managed by reference to any index.

  • Investor profile

    A typical investor in the CC Global 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

    April 2022

    Introduction        
    April, along the same route of the preceding three months and first quarter of the year proved negative for financial markets. Russia’s invasion in Ukraine, stringent Covid-19 policies in China once more prompting demand concerns and supply-chain disruptions, and expectations of a swift tightening in US monetary policy all weighed on sentiment. Credit markets came under pressure with investment grade and high-yield corporate credit delivering negative returns as treasury yields – pricing in the Fed’s hawkish stance – maintained the upward trajectory. Also, the positive correlation to US paper led European sovereign yields higher.

    Market environment and performance
    The US economy unexpectedly contracted by an annualized 1.4 per cent on quarter in the first three months of 2022 against expectations of a 1.1 per cent expansion, and following a 6.9 per cent growth in Q4 2021. A record trade deficit and a decline in inventory investment have seemingly weighed on.

    In April, aggregate business activity in the US continued to signal an expansion across the private sector. Such expansion, reading at 56, however proved slightly slower than the upturn at the end of Q1, as softer data in the service sector offset the faster expansion in manufacturing.  US services PMI, albeit revised higher from a preliminary of 54.7 to 55.6, came in lower than the previous months reading of 58. Meanwhile, manufacturing PMI headed higher to 59.2 from 58.8 in March, pointing to the strongest growth in factory activity in seven months.

    Annual inflation rate in the US slowed to 8.3 per cent in April, from 8.5 per cent in the previous month, yet exceeding market expectations of 8.1 per cent. The reading marked the 14th consecutive month that inflation is above the Fed’s 2 per cent target as energy costs and food prices weigh. Similarly, core inflation, which excludes transitory or temporary price volatility, slowed to 6.2 per cent from 6.5 per cent a month earlier.

    In regards to the labour market, the US economy added 428,000 jobs in April 2022, above market estimates of 391,000 yet lower than February’s notable 714,000 gain, amid an increasingly tight labour market. Job gains were widespread, with the highest noted in the leisure and hospitality, and manufacturing.                                         

    US Treasury yields furthered on the strong upward trajectory witnessed in March, heading to highest in years on expectations of a more aggressive interest rate increase and in spite of worsening sentiment due to China’s stringent coronavirus curbs. Notably, Chair of the Fed Jerome Powell signalled that a 50-basis point hike would take place in May to step-up the Fed’s efforts against inflationary pressures.  Overall, the yield on the benchmark 10-year Treasury closed the month 60bps higher than the previous month end, at 2.93 per cent.

    Global high yield corporate credit, for a fourth-month running saw total negative returns of 3.24 per cent.

    Fund performance
    In the month of April, the Global High-Income Bond Fund registered a loss of 2.42 per cent, in line with the spread widening across high yield corporate credit. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories while maintaining adequate cash levels as yields continued to widen and keeping a low portfolio duration, this to reduce the funds sensitivity to changes in interest rates. In the month, as IG bonds had a rough ride, the Manager increased its exposure to higher credit quality issuers, namely; Kraft Heinz and American multinational oil and gas corporation Exxon Mobil on attractive entry levels.

    Market and investment outlook
    Going forward the Manager believes that credit markets will largely remain conditioned by monetary decisions taken, thus far proving more hawkish than the economic outlook possibly warrants, altering benchmark yields, now revolving at notable highs. Such upward shift in yields, particularly at the longer-end of the yield curve – influenced by market participants – weighed on the performance of credit markets which on a year-to-date basis stand substantially negative. A prudent approach to tackling price pressures is more-than-ever imperative not to hinder growth, and thus worsen the economic situation.

    Albeit economic data showed signs of weakening, inflationary pressures continued to prompt the Fed into a more aggressive path of interest rate hikes. That being said, the Fed will remain mindful that inflation may in Q3 ease should supply disruptions, a prime source of inflation, largely abate.

    In terms of bond picking, the Manager will continue to monitor the current unprecedented environment and take opportunities in attractive credit stories which should continue to add value to the portfolio. The recent widening in corporate credit spreads may indeed pose an opportunity, presenting attractive entry points.

  • 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)*

    14.14%

    *View Performance History below
    Inception Date: 29 May 2013
    ISIN: MT7000007753
    Bloomberg Ticker: CALCHIA MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.55%
    Exit Charge: None
    Distribution Yield (%): N/A
    Underlying Yield (%): 5.21
    Distribution: N/A
    Total Net Assets: $16.05 mn
    Month end NAV in USD: 119.60
    Number of Holdings: 51
    Auditors: Deloitte Malta
    Legal Advisor: Ganado & Associates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 35.4

    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 USD HY Corp Dist
    8.1%
    8% Unicredit Spa perp
    3.9%
    6.25% HSBC Holdings plc perp
    3.8%
    6.75% Societe General perp
    3.6%
    4% JP Morgan Chase & Co perp
    3.5%
    5.299% Petrobras Global Fin 2025
    2.6%
    .375% Chemours Co 2027
    2.5%
    6.35% Republic of Turkey 2024
    2.5%
    4.375% Freeport McMoran Inc 2028
    2.5%
    5.5% Cheplapharm 2028
    2.4%

    Top Holdings by Country*

    United States
    39.2%
    Brazil
    9.9%
    United Kingdom
    5.1%
    Turkey
    4.9%
    France
    4.9%
    Russian Federation
    4.6%
    Germany
    4.3%
    Italy
    3.9%
    Switzerland
    3.3%
    India
    2.9%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    20.2%
    Materials
    9.0%
    Funds
    8.1%
    Materials
    7.3%
    Materials
    6.0%
    Asset 7
    Communications
    5.6%
    *excluding exposures to CIS

    Asset Allocation

    Cash 9.6%
    Bonds 82.3%
    CIS/ETFs 3.3%

    Maturity Buckets*

    51.7%
    0-5 Years
    21.4%
    5-10 Years
    9.2%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -11.87%

    2021

    2.38%

    2020

    3.07%

    2019

    10.23%

    2018

    -3.22%

    Annualised Since Inception*

    1.49%

    * The Accumulator Share Class (Class A) was launched on 29th May 2013. 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.
    ** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

    Credit Ratings*

    Average Credit Rating: BB-
    *excluding exposures to CIS

    Currency Allocation

    USD 100.0%
    Other 0.0%

    Risk Statistics

    Sharpe Ratio
    -0.35 (3Y)
    -0.24 (5Y)
    Std. Deviation
    8.82% (3Y)
    7.01% (5Y)
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