Investment Objectives

The objective of the Sub-Fund is to endeavour to maximise the total level of return for investors through investment primarily, in a well-diversified portfolio of debt securities and other fixed-income or interest bearing securities.

Investor Profile

A typical investor in the CC Emerging Market Bond Fund would be one who is seeking to gain exposure to the Emerging Bond Market via corporate and/or sovereign bonds whilst seeking to accumulate wealth and save over time in a product that re-invests coupons received on a gross basis. Furthermore, investors in the CC Emerging Market Bond Fund are those with a medium to high tolerance to risk and who are planning to hold on to their investment for the medium-to-long term so as to benefit from the compound interest effect whilst also participating in the interest rate cycle as well as the investment cycle commensurate with an investment in Emerging Markets.

Fund Rules at a Glance

The Investment Manager shall invest primarily but not solely in a diversified portfolio of Emerging Market Corporate fixed income securities and Emerging Market Government fixed income securities with maturities of 10 years or less, rated at the time of investment “Baa1” to “Caa1” by Moody’s or “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality by the Investment Manager. The Investment Manager may also invest up to 10% of the Net Assets of the Sub-Fund in unrated fixed income securities.

  • Minimum Credit Rating CCC+ (or equivalent)
  • Up to 10% in Non-Rated Bonds
  • Average Credit Quality of B- (or equivalent)
  • Emerging Market Issuers as per MSCI Emerging and Frontier
  • Up to 15% in Emerging Market Equities
  • Use of FDIs for hedging purposes only
  • No limit on exposure to CIS
  • Up to 30% in Non Emerging Market Issuers

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. Consequent to the said rise in inflationary figures, particularly profound in Emerging countries, the respective central banks are swiftly reacting. In response to rising inflation, in October the Central Bank of Russia continued with its policy tightening programme, raising its benchmark rate by 75 bps to 7.5 per cent. The Central Bank Brazil, took on a similar path, unanimously deciding to raise the Selic Rate by a further 150bps in its last meeting. Brazil’s rate hike was the sixth interest rate hike in 2021.

From the data front in the emerging market world, China continued to witness a rise in the manufacturing sector, following August’s drop – the result of containment measures to curb rising cases of the Delta strain, supply bottlenecks, and high raw materials. China’s Manufacturing PMI rose to a four-month high of 50.6 in October, from 50 in the previous month. New orders rose to the highest level since June 2021. However, power shortages and rising costs weighed on output, while both export sales and employment fell for the third successive month. On the price front, inflationary pressures intensified, with average input prices rising at the sharpest rate in almost 5 years. Also, the pace of output charge inflation notably accelerated.  China Services PMI rose to 53.8 in October 2021 from 53.4 in the prior month, pointing to the second straight month of expansion in the service sector and the steepest pace since July as coronavirus outbreaks eased.

Over to Brazil, business activity in Latin America’s largest economy dropped to 53.4 in October from 54.7 in the previous month, pointing to a fifth straight month of expansion in the country’s private sector. Growth was mainly supported by the services sector, as manufacturing grew, yet at a lesser extent. Both new orders and employment continued to increase for the services sector, while manufacturing saw declines in orders. On the pricing front, both input costs and output charges increased at unprecedented rates, lifting output charges to a series peak. Overall sentiment proved lowest in the last three months, with declines for both manufacturers and service providers.

In October, EM high yield corporate credit continued on its downward trajectory, as the negative sentiment surrounding China, a key EM, remained. Regulatory actions in China were the initial trigger for market weakness in September. Market jitters were then amplified by the re-imposition of some coronavirus-inflicted restrictions leading to global supply chain disruptions. Moreover, worries about possible systemic financial system risks stemming from the potential collapse of Evergrande – the country’s second-largest real estate developer by sales, and an intense energy shortage in the country, also weighed on investors sentiment. Emerging Market high yield, the worst performer for the month, lost 2.27 per cent. 

In the month of October, the CC Emerging Market Bond Fund declined by 0.79 per cent.

Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, particularly in the metals and mining and sovereigns. Namely the manager increased the sub-fund’s exposure to Norilsk Nickel – the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper.

Going forward, the Manager will continue to assess the emerging market space scenario even on the basis of further monetary policy actions taken by Central Banks, which seem to follow the Fed’s accommodative stance.

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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

€100000

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

-3.21%

*View Performance History below
Inception Date: 01 Feb 2020
ISIN: MT7000026449
Bloomberg Ticker: CCEMBFE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.62%
Exit Charge: Up to 2.5%
Distribution Yield (%): N/A
Underlying Yield (%): 4.28
Distribution: N/A
Total Net Assets: $14.2 mn
Month end NAV in EUR: 93.05
Number of Holdings: 47
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 34.4

Performance To Date (EUR)

Top 10 Holdings

iShares JPM EM Bond Fund
5.6%
iShares China Bond
3.9%
6.625% NBM Holdings 2029
3.9%
5.45% Cemex 2029
3.1%
6.5% Global Ports Finance 2023
3.1%
4.95% Veon Holdings 2024
3.0%
5.8% Oryx Funding ltd 2031
3.0%
4.375% Freeport McMoran 2028
3.0%
5.8% Turkcell 2028
2.9%
4.75% Banco Santander SA perp
2.9%

Major Sector Breakdown*

Asset 7
Communications
10.3%
Government
9.5%
Real Estate
8.4%
Materials
7.8%
Industrials
7.8%
Materials
5.0%
*excluding exposures to CIS

Maturity Buckets*

42.3%
0-5 Years
27.9%
5-10 Years
9.4%
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*

Malta (incl. Cash)
22.2%
Brazil
10.8%
China
10.0%
Mexico
9.2%
Russia
7.4%
India
7.2%
United States
5.9%
Oman
4.6%
Turkey
4.4%
Netherlands
3.0%
*including exposures to CIS, using look-through

Asset Allocation

Cash 5.6%
Bonds (incl. ETFs) 94.4%

Performance History (EUR)*

YTD

0.28%

2020***

-3.48%

2019

-%

1-month

-0.93%

3-month

-1.64%

Annualised Since Inception*

-1.87%

*The EUR Accumulator Share Class (Class E) was launched on 06 February 2020.

Currency Allocation

USD 94.6%
Euro 5.4%
Other 0.0%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The objective of the Sub-Fund is to endeavour to maximise the total level of return for investors through investment primarily, in a well-diversified portfolio of debt securities and other fixed-income or interest bearing securities.

  • Investor profile

    A typical investor in the CC Emerging Market Bond Fund would be one who is seeking to gain exposure to the Emerging Bond Market via corporate and/or sovereign bonds whilst seeking to accumulate wealth and save over time in a product that re-invests coupons received on a gross basis. Furthermore, investors in the CC Emerging Market Bond Fund are those with a medium to high tolerance to risk and who are planning to hold on to their investment for the medium-to-long term so as to benefit from the compound interest effect whilst also participating in the interest rate cycle as well as the investment cycle commensurate with an investment in Emerging Markets.

    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

    • Minimum Credit Rating CCC+ (or equivalent)
    • Up to 10% in Non-Rated Bonds
    • Average Credit Quality of B- (or equivalent)
    • Emerging Market Issuers as per MSCI Emerging and Frontier
    • Up to 15% in Emerging Market Equities
    • Use of FDIs for hedging purposes only
    • No limit on exposure to CIS
    • Up to 30% in Non Emerging Market Issuers
  • 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. Consequent to the said rise in inflationary figures, particularly profound in Emerging countries, the respective central banks are swiftly reacting. In response to rising inflation, in October the Central Bank of Russia continued with its policy tightening programme, raising its benchmark rate by 75 bps to 7.5 per cent. The Central Bank Brazil, took on a similar path, unanimously deciding to raise the Selic Rate by a further 150bps in its last meeting. Brazil’s rate hike was the sixth interest rate hike in 2021.

    From the data front in the emerging market world, China continued to witness a rise in the manufacturing sector, following August’s drop – the result of containment measures to curb rising cases of the Delta strain, supply bottlenecks, and high raw materials. China’s Manufacturing PMI rose to a four-month high of 50.6 in October, from 50 in the previous month. New orders rose to the highest level since June 2021. However, power shortages and rising costs weighed on output, while both export sales and employment fell for the third successive month. On the price front, inflationary pressures intensified, with average input prices rising at the sharpest rate in almost 5 years. Also, the pace of output charge inflation notably accelerated.  China Services PMI rose to 53.8 in October 2021 from 53.4 in the prior month, pointing to the second straight month of expansion in the service sector and the steepest pace since July as coronavirus outbreaks eased.

    Over to Brazil, business activity in Latin America’s largest economy dropped to 53.4 in October from 54.7 in the previous month, pointing to a fifth straight month of expansion in the country’s private sector. Growth was mainly supported by the services sector, as manufacturing grew, yet at a lesser extent. Both new orders and employment continued to increase for the services sector, while manufacturing saw declines in orders. On the pricing front, both input costs and output charges increased at unprecedented rates, lifting output charges to a series peak. Overall sentiment proved lowest in the last three months, with declines for both manufacturers and service providers.

    In October, EM high yield corporate credit continued on its downward trajectory, as the negative sentiment surrounding China, a key EM, remained. Regulatory actions in China were the initial trigger for market weakness in September. Market jitters were then amplified by the re-imposition of some coronavirus-inflicted restrictions leading to global supply chain disruptions. Moreover, worries about possible systemic financial system risks stemming from the potential collapse of Evergrande – the country’s second-largest real estate developer by sales, and an intense energy shortage in the country, also weighed on investors sentiment. Emerging Market high yield, the worst performer for the month, lost 2.27 per cent. 

    In the month of October, the CC Emerging Market Bond Fund declined by 0.79 per cent.

    Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, particularly in the metals and mining and sovereigns. Namely the manager increased the sub-fund’s exposure to Norilsk Nickel – the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper.

    Going forward, the Manager will continue to assess the emerging market space scenario even on the basis of further monetary policy actions taken by Central Banks, which seem to follow the Fed’s accommodative stance.

  • 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

    €100000

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    RETURN (SINCE INCEPTION)*

    -3.21%

    *View Performance History below
    Inception Date: 01 Feb 2020
    ISIN: MT7000026449
    Bloomberg Ticker: CCEMBFE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.62%
    Exit Charge: Up to 2.5%
    Distribution Yield (%): N/A
    Underlying Yield (%): 4.28
    Distribution: N/A
    Total Net Assets: $14.2 mn
    Month end NAV in EUR: 93.05
    Number of Holdings: 47
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 34.4

    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 JPM EM Bond Fund
    5.6%
    iShares China Bond
    3.9%
    6.625% NBM Holdings 2029
    3.9%
    5.45% Cemex 2029
    3.1%
    6.5% Global Ports Finance 2023
    3.1%
    4.95% Veon Holdings 2024
    3.0%
    5.8% Oryx Funding ltd 2031
    3.0%
    4.375% Freeport McMoran 2028
    3.0%
    5.8% Turkcell 2028
    2.9%
    4.75% Banco Santander SA perp
    2.9%

    Top Holdings by Country*

    Malta (incl. Cash)
    22.2%
    Brazil
    10.8%
    China
    10.0%
    Mexico
    9.2%
    Russia
    7.4%
    India
    7.2%
    United States
    5.9%
    Oman
    4.6%
    Turkey
    4.4%
    Netherlands
    3.0%
    *including exposures to CIS, using look-through

    Major Sector Breakdown*

    Asset 7
    Communications
    10.3%
    Government
    9.5%
    Real Estate
    8.4%
    Materials
    7.8%
    Industrials
    7.8%
    Materials
    5.0%
    *excluding exposures to CIS

    Asset Allocation

    Cash 5.6%
    Bonds (incl. ETFs) 94.4%

    Maturity Buckets*

    42.3%
    0-5 Years
    27.9%
    5-10 Years
    9.4%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    0.28%

    2020***

    -3.48%

    2019

    -%

    1-month

    -0.93%

    3-month

    -1.64%

    Annualised Since Inception*

    -1.87%

    *The EUR Accumulator Share Class (Class E) was launched on 06 February 2020.

    Credit Ratings*

    Average Credit Rating: BB
    *excluding exposures to CIS

    Currency Allocation

    USD 94.6%
    Euro 5.4%
    Other 0.0%
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