Investment Objectives

The CC Global High Income Bond Fund Distributor 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 Global High Income Bond Fund Distributor is:

  • Seeking to earn a high level of regular Income
  • Seeking an actively managed & diversified investment in high-yield bonds

Fund Rules

The Investment Manager of the CC Global High Income Bond Funds USD and EUR 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

October 2021

Consequent to an increased level of money supply through unprecedented monetary stimulus, an uptick in inflation was theoretically warranted. Thus far, current inflation levels proved to be supply rather than consumer driven, and to this extent this tends to trigger more uncertainty on the next moves monetary politicians should take. Whether such price increases are transitory or else persistent, however, is yet an outcome ought to be determined.

The sustainability of inflationary pressures has in October continued to be quite a debate. Largely, investors are of the view that temporary price pressures could well be embedded in more long-term expectations and last even as the growth from reopening fades away. A surge in energy prices, due to an increase in both demand and limited capacity, have made matters worse, amplifying fears around longer-lasting inflationary pressures.

Theoretically, sustainability in price increases is maintained through a continuous rise in demand, and not through overall price rises resultant to a higher cost of production. Supply bottlenecks – in our view the key source to inflationary pressures, is a phenomenon we’ve been witnessing in 2021. Disruptions worsened by a second coronavirus wave, a blockage in the Suez Canal earlier in March, port closures in China, and capacity limitations, are seemingly persisting. Supply issues along with increased demand for goods, led to higher input costs, which were ultimately translated onto customers.

In the month, inflationary pressures have led markets to price in a faster pace of policy tightening from central banks across the world. Notably, the U.S. 10-year benchmark Treasury yield hit a high of 1.7 per cent over the month of October. Larger increases in shorter-dated yields caused interest rate curves to flatten.

From an economic viewpoint, the path towards a full recovery has all-in-all 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, giving rise to doubts about the sustainability of economic growth. Economic data is now showing stronger signs. Albeit earlier witnessing a slight deceleration in the pace of expansion, data points are seemingly maintaining the recent pace. Leading economic indicators continue to revolve in expansionary territory while inflation data remains on an upward trajectory.

U.S. manufacturing PMI stood at 58.4, downwardly revised from a preliminary estimate of 59.2, and down from 60.7 in September. Although the pace of expansion slowed to the weakest for ten months due to smallest increase in production levels since July 2020 amid capacity constraints including material shortages, October’s reading pointed to a sharp improvement in the health of the US manufacturing sector. Notably, backlogs of new work and employment increased at solid rates. On the price front, input cost inflation remained among the highest on record, with firms continuing to partially pass on the increased costs onto their consumers.

Services PMI, previously showing signs of weakening, was in October revised higher to 58.7, from a preliminary estimate of 58.2, and 54.90 in the previous month. The expansion proved to be the sharpest and quickest since July 2021. Also, the upturn was faster than the series average, with firms linking the increase to rising client demand and rise in new business.

Annual inflation rate in the U.S. surged to 6.2 per cent in October, above forecasts of 5.8 per cent, and higher from 5.4 per cent in the previous month. Upward pressure was broad-based, with energy costs recording the biggest gain. In 2021, inflation has largely been on the rise amid low base effects from an unprecedented 2020 and as the economic recovery picks up, restrictions ease, and demand surges.

In regards to the labour market, the US economy added 531,000 jobs in October of 2021, the highest in 3 months and above market expectations of 450,000. Job gains occurred in leisure and hospitality, professional and business services, manufacturing, and transportation and warehousing. Meanwhile, employment continued to decline in public education.

U.S. Treasury yields have over the month of October continued to retrace some of the significant downward moves witnessed in recent months, then influenced by investors beginning to doubt whether economic data, notably the upticks in inflationary figures would continue to advance or else prove transitory. As the market’s focus turned to rising inflation and the prospect of the withdrawal of monetary policy support, yields rose back to similar levels seen at the first half of the year. In October, investors awaited the Federal Reserve (Fed) November meeting and its policy direction going forward. Investors expected Fed Chair Jay Powell to announce a reduction in bond purchases. Earlier, the Fed suggested that stimulus, notably asset purchases could start being reduced as early as November and possibly be wound up by mid-2022, earlier than initially anticipated.

The benchmark U.S. 10-year Treasury yield, closed the month 6bps higher at 1.55 per cent. The figure remains below high’s witnessed earlier this year, revolving above the 1.70 per cent levels.

Throughout the month of September, the CC Global High Income Bond Fund dropped by 0.29 per cent, with a year to date outperformance over the internal comparable benchmark.

Albeit downside risks, specifically related to the health crisis remain as coronavirus cases prop-up, the manager remains constructive within the high yield space. Going forward, the manager believes that credit markets will continue to be supported by the actions taken by the Federal Reserve – seemingly willing to gradually unwind its stimulus programme.

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)*

47.11%

*View Performance History below
Inception Date: 01 Sep 2011
ISIN: MT7000003067
Bloomberg Ticker: CALCHIU MV
Entry Charge: None
Total Expense Ratio: 1.63%
Exit Charge: None
Distribution Yield (%): 3.9
Underlying Yield (%): 4.73
Distribution: 31/03 and 30/09
Total Net Assets: $18.62 mn
Month end NAV in USD: 89.51
Number of Holdings: 50
Auditors: Deloitte Malta
Legal Advisor: Ganado & Associates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 33.50

Performance To Date (USD)

Top 10 Holdings

iShares USD HY Corp Dist
7.5%
8% Unicredit Spa perp
3.6%
6.75% Societe General perp
3.6%
6.25% HSBC Holdings plc perp
3.4%
4% JP Morgan Chase & Co perp
3.2%
5.625% Ineos Group Holdings 2024
2.7%
4.5% Logan Group Co Ltd 2028
2.4%
5.299% Petrobras Global Finance 2025
2.4%
5.375% Chemours Co 2027
2.3%
5.25% Sberbank 2023
2.3%

Major Sector Breakdown*

Financials
20.8%
Funds
8.7%
Asset 7
Communications
8.5%
Materials
7.8%
Materials
7.3%
Materials
7.3%
*excluding exposures to CIS

Maturity Buckets*

53.8%
0-5 Years
21.8%
5-10 Years
8.4%
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
33.5%
Russian Federation
9.7%
Brazil
9.5%
France
4.7%
United Kingdom
4.6%
Turkey
4.5%
Germany
3.9%
Italy
3.6%
China
3.1%
Switzerland
3.0%
*including exposures to CIS

Asset Allocation

Cash 7.4%
Bonds 83.9%
CIS/ETFs 8.7%

Performance History (EUR)*

YTD

2.19%

2020

3.08%

2019

10.22%

2018

-3.22%

2017

5.70%

Annualised Since Inception***

3.87%

*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

USD 100.0%
Other 0.0%

Risk Statistics

Sharpe Ratio
0.58 (3Y)
0.55 (5Y)
Std. Deviation
8.13% (3Y)
6.47% (5Y)

Interested in this product?

  • Investment Objectives

    The CC Global High Income Bond Fund Distributor 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 Global High Income Bond Fund Distributor is:

    • Seeking to earn a high level of regular Income
    • Seeking an actively managed & diversified investment in high-yield 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 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

    October 2021

    Consequent to an increased level of money supply through unprecedented monetary stimulus, an uptick in inflation was theoretically warranted. Thus far, current inflation levels proved to be supply rather than consumer driven, and to this extent this tends to trigger more uncertainty on the next moves monetary politicians should take. Whether such price increases are transitory or else persistent, however, is yet an outcome ought to be determined.

    The sustainability of inflationary pressures has in October continued to be quite a debate. Largely, investors are of the view that temporary price pressures could well be embedded in more long-term expectations and last even as the growth from reopening fades away. A surge in energy prices, due to an increase in both demand and limited capacity, have made matters worse, amplifying fears around longer-lasting inflationary pressures.

    Theoretically, sustainability in price increases is maintained through a continuous rise in demand, and not through overall price rises resultant to a higher cost of production. Supply bottlenecks – in our view the key source to inflationary pressures, is a phenomenon we’ve been witnessing in 2021. Disruptions worsened by a second coronavirus wave, a blockage in the Suez Canal earlier in March, port closures in China, and capacity limitations, are seemingly persisting. Supply issues along with increased demand for goods, led to higher input costs, which were ultimately translated onto customers.

    In the month, inflationary pressures have led markets to price in a faster pace of policy tightening from central banks across the world. Notably, the U.S. 10-year benchmark Treasury yield hit a high of 1.7 per cent over the month of October. Larger increases in shorter-dated yields caused interest rate curves to flatten.

    From an economic viewpoint, the path towards a full recovery has all-in-all 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, giving rise to doubts about the sustainability of economic growth. Economic data is now showing stronger signs. Albeit earlier witnessing a slight deceleration in the pace of expansion, data points are seemingly maintaining the recent pace. Leading economic indicators continue to revolve in expansionary territory while inflation data remains on an upward trajectory.

    U.S. manufacturing PMI stood at 58.4, downwardly revised from a preliminary estimate of 59.2, and down from 60.7 in September. Although the pace of expansion slowed to the weakest for ten months due to smallest increase in production levels since July 2020 amid capacity constraints including material shortages, October’s reading pointed to a sharp improvement in the health of the US manufacturing sector. Notably, backlogs of new work and employment increased at solid rates. On the price front, input cost inflation remained among the highest on record, with firms continuing to partially pass on the increased costs onto their consumers.

    Services PMI, previously showing signs of weakening, was in October revised higher to 58.7, from a preliminary estimate of 58.2, and 54.90 in the previous month. The expansion proved to be the sharpest and quickest since July 2021. Also, the upturn was faster than the series average, with firms linking the increase to rising client demand and rise in new business.

    Annual inflation rate in the U.S. surged to 6.2 per cent in October, above forecasts of 5.8 per cent, and higher from 5.4 per cent in the previous month. Upward pressure was broad-based, with energy costs recording the biggest gain. In 2021, inflation has largely been on the rise amid low base effects from an unprecedented 2020 and as the economic recovery picks up, restrictions ease, and demand surges.

    In regards to the labour market, the US economy added 531,000 jobs in October of 2021, the highest in 3 months and above market expectations of 450,000. Job gains occurred in leisure and hospitality, professional and business services, manufacturing, and transportation and warehousing. Meanwhile, employment continued to decline in public education.

    U.S. Treasury yields have over the month of October continued to retrace some of the significant downward moves witnessed in recent months, then influenced by investors beginning to doubt whether economic data, notably the upticks in inflationary figures would continue to advance or else prove transitory. As the market’s focus turned to rising inflation and the prospect of the withdrawal of monetary policy support, yields rose back to similar levels seen at the first half of the year. In October, investors awaited the Federal Reserve (Fed) November meeting and its policy direction going forward. Investors expected Fed Chair Jay Powell to announce a reduction in bond purchases. Earlier, the Fed suggested that stimulus, notably asset purchases could start being reduced as early as November and possibly be wound up by mid-2022, earlier than initially anticipated.

    The benchmark U.S. 10-year Treasury yield, closed the month 6bps higher at 1.55 per cent. The figure remains below high’s witnessed earlier this year, revolving above the 1.70 per cent levels.

    Throughout the month of September, the CC Global High Income Bond Fund dropped by 0.29 per cent, with a year to date outperformance over the internal comparable benchmark.

    Albeit downside risks, specifically related to the health crisis remain as coronavirus cases prop-up, the manager remains constructive within the high yield space. Going forward, the manager believes that credit markets will continue to be supported by the actions taken by the Federal Reserve – seemingly willing to gradually unwind its stimulus programme.

  • 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)*

    47.11%

    *View Performance History below
    Inception Date: 01 Sep 2011
    ISIN: MT7000003067
    Bloomberg Ticker: CALCHIU MV
    Entry Charge: None
    Total Expense Ratio: 1.63%
    Exit Charge: None
    Distribution Yield (%): 3.9
    Underlying Yield (%): 4.73
    Distribution: 31/03 and 30/09
    Total Net Assets: $18.62 mn
    Month end NAV in USD: 89.51
    Number of Holdings: 50
    Auditors: Deloitte Malta
    Legal Advisor: Ganado & Associates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 33.50

    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
    7.5%
    8% Unicredit Spa perp
    3.6%
    6.75% Societe General perp
    3.6%
    6.25% HSBC Holdings plc perp
    3.4%
    4% JP Morgan Chase & Co perp
    3.2%
    5.625% Ineos Group Holdings 2024
    2.7%
    4.5% Logan Group Co Ltd 2028
    2.4%
    5.299% Petrobras Global Finance 2025
    2.4%
    5.375% Chemours Co 2027
    2.3%
    5.25% Sberbank 2023
    2.3%

    Top Holdings by Country*

    United States
    33.5%
    Russian Federation
    9.7%
    Brazil
    9.5%
    France
    4.7%
    United Kingdom
    4.6%
    Turkey
    4.5%
    Germany
    3.9%
    Italy
    3.6%
    China
    3.1%
    Switzerland
    3.0%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    20.8%
    Funds
    8.7%
    Asset 7
    Communications
    8.5%
    Materials
    7.8%
    Materials
    7.3%
    Materials
    7.3%
    *excluding exposures to CIS

    Asset Allocation

    Cash 7.4%
    Bonds 83.9%
    CIS/ETFs 8.7%

    Maturity Buckets*

    53.8%
    0-5 Years
    21.8%
    5-10 Years
    8.4%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    2.19%

    2020

    3.08%

    2019

    10.22%

    2018

    -3.22%

    2017

    5.70%

    Annualised Since Inception***

    3.87%

    *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

    USD 100.0%
    Other 0.0%

    Risk Statistics

    Sharpe Ratio
    0.58 (3Y)
    0.55 (5Y)
    Std. Deviation
    8.13% (3Y)
    6.47% (5Y)
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