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

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. Generally, a geographical diversification, with regards to inoculations, remains. Albeit the scenario is seemingly improving following a concerted effort by the developed market world to provide vaccine shots, some countries within the emerging market space, are to-date, still struggling with their distribution. Notwithstanding lingering doubts, the outlook is seemingly 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. Countries within the developed market world have also announced booster programmes to deliver third doses to their population. In China, Covid-19 booster shots shall follow as the country inoculates more citizens.

From the data front in the emerging market world, China – the world’s second largest economy, witnessed a decline in the manufacturing sector amid containment measures to curb rising cases of the Delta strain, supply bottlenecks, and high raw materials. China’s Manufacturing PMI fell to 49.2 in August 2021 from 50.3 in the previous month, and below market estimates of 50.2. Output shrank for the first time in 17 months while new orders dropped for the second successive month. Export sales contracted for the first time since February. Services, following a strong pick-up in July, dropped to 46.7. August’s reading was the first contraction in services activity since April 2020. New orders shrank for the first time in 16 months, while employment fell for the second time in three months on the back of rising outstanding business. Meanwhile, new export business remained broadly in-line for the second month running. Input prices rose modestly due to higher staffing costs and increased transportation fees, while output prices fell following a solid increase in July.

Over to Brazil, factory activity in Latin America’s largest economy dropped to 53.6 in August 2021 from a five-month high of 56.7 in the previous month. The reading reflected a significant moderation in the rate of expansion in the goods producing sector. Output growth proved the slowest since May amid raw material shortages and faltering business growth as export orders declined for the first time in seven months. Overall sentiment remained positive. Meanwhile, services PMI jumped to 55.1 from 54.4 in the previous month. The reading which pointed to a third consecutive expansion in the services sector and to the strongest level of expansion since the beginning of 2013 came in amid robust inflows of new work, helped by improved demand conditions.

Annual inflation rate in Brazil increased to 9.68 per cent in August from 8.99 per cent in July of 2021. The reading proved the highest since February 2016 as the reopening of the economy, global supply issues, effects of a weaker currency, and a severe drought continued to weigh on prices. Month-on-month, consumer prices increased by 0.87 per cent, above market expectations pf 0.71 per cent.

In August, Emerging Market high yield witnessed a gain of 1.37 per cent, outperforming both the European and US counterparts. From a technical perspective, emerging market debt is expected to keep pace with high yield credit in developed markets, as higher yielding debt remains an attractive avenue for those investors in search of a higher yield. The extremely accommodative liquidity situation is helping to maintain stability, despite the deep wounds inflicted on already fragile economies. This highlights the importance of the managers’ strategy of being selective.

In the month of August, the CC Emerging Market Bond Fund increased by 0.98 per cent. The fund continues to outperform strongly its internal comparable benchmark on the back of an underweight position in sovereign names and a strong recovery in names which were directly hit by the pandemic and hindered the performance in 2020. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, particularly in the transportation and financials segments. Namely it increased its position in Adani Ports given the strong volumes within the region, while a position was opened in Banco Santander due to the attractive latam exposure within the bank’s operations. 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)*

-0.63%

*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 (%): 4.07
Distribution: N/A
Total Net Assets: $15.3 mn
Month end NAV in EUR: 95.53
Number of Holdings: 47
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 32.4

Performance To Date (EUR)

Top 10 Holdings

iShares JPM EM Bond Fund
5.3%
6.625% NBM Holdings 2029
3.7%
iShares China Bond
3.6%
6.5% Global Ports Finance 2023
2.9%
5.45% Cemex 2029
2.9%
5.8% Turkcell 2028
2.9%
4.95% Veon Holdings 2024
2.8%
4.375% Freeport McMoran 2028
2.8%
5.8% Oryx Funding ltd 2031
2.8%
4.75% Banco Santander SA perp
2.7%

Major Sector Breakdown*

Asset 7
Communications
9.8%
Government
8.9%
Industrials
7.3%
Real Estate
7.3%
Materials
6.0%
Materials
4.0%
*excluding exposures to CIS

Maturity Buckets*

35.6%
0-5 Years
30.4%
5-10 Years
9.7%
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)
25.8%
Brazil
13.7%
Mexico
9.1%
China
8.8%
India
6.7%
Russia
5.7%
United States
5.6%
Turkey
4.3%
Oman
4.2%
Netherlands
2.8%
*including exposures to CIS, using look-through

Asset Allocation

Cash 10.3%
Bonds (incl. ETFs) 89.7%

Performance History (EUR)*

YTD

2.95%

2020***

-3.48%

2019

-%

1-month

0.98%

3-month

1.40%

Annualised Since Inception*

-0.41%

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

Currency Allocation

USD 90.2%
Euro 9.8%
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

    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. Generally, a geographical diversification, with regards to inoculations, remains. Albeit the scenario is seemingly improving following a concerted effort by the developed market world to provide vaccine shots, some countries within the emerging market space, are to-date, still struggling with their distribution. Notwithstanding lingering doubts, the outlook is seemingly 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. Countries within the developed market world have also announced booster programmes to deliver third doses to their population. In China, Covid-19 booster shots shall follow as the country inoculates more citizens.

    From the data front in the emerging market world, China – the world’s second largest economy, witnessed a decline in the manufacturing sector amid containment measures to curb rising cases of the Delta strain, supply bottlenecks, and high raw materials. China’s Manufacturing PMI fell to 49.2 in August 2021 from 50.3 in the previous month, and below market estimates of 50.2. Output shrank for the first time in 17 months while new orders dropped for the second successive month. Export sales contracted for the first time since February. Services, following a strong pick-up in July, dropped to 46.7. August’s reading was the first contraction in services activity since April 2020. New orders shrank for the first time in 16 months, while employment fell for the second time in three months on the back of rising outstanding business. Meanwhile, new export business remained broadly in-line for the second month running. Input prices rose modestly due to higher staffing costs and increased transportation fees, while output prices fell following a solid increase in July.

    Over to Brazil, factory activity in Latin America’s largest economy dropped to 53.6 in August 2021 from a five-month high of 56.7 in the previous month. The reading reflected a significant moderation in the rate of expansion in the goods producing sector. Output growth proved the slowest since May amid raw material shortages and faltering business growth as export orders declined for the first time in seven months. Overall sentiment remained positive. Meanwhile, services PMI jumped to 55.1 from 54.4 in the previous month. The reading which pointed to a third consecutive expansion in the services sector and to the strongest level of expansion since the beginning of 2013 came in amid robust inflows of new work, helped by improved demand conditions.

    Annual inflation rate in Brazil increased to 9.68 per cent in August from 8.99 per cent in July of 2021. The reading proved the highest since February 2016 as the reopening of the economy, global supply issues, effects of a weaker currency, and a severe drought continued to weigh on prices. Month-on-month, consumer prices increased by 0.87 per cent, above market expectations pf 0.71 per cent.

    In August, Emerging Market high yield witnessed a gain of 1.37 per cent, outperforming both the European and US counterparts. From a technical perspective, emerging market debt is expected to keep pace with high yield credit in developed markets, as higher yielding debt remains an attractive avenue for those investors in search of a higher yield. The extremely accommodative liquidity situation is helping to maintain stability, despite the deep wounds inflicted on already fragile economies. This highlights the importance of the managers’ strategy of being selective.

    In the month of August, the CC Emerging Market Bond Fund increased by 0.98 per cent. The fund continues to outperform strongly its internal comparable benchmark on the back of an underweight position in sovereign names and a strong recovery in names which were directly hit by the pandemic and hindered the performance in 2020. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, particularly in the transportation and financials segments. Namely it increased its position in Adani Ports given the strong volumes within the region, while a position was opened in Banco Santander due to the attractive latam exposure within the bank’s operations. 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)*

    -0.63%

    *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 (%): 4.07
    Distribution: N/A
    Total Net Assets: $15.3 mn
    Month end NAV in EUR: 95.53
    Number of Holdings: 47
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 32.4

    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
    5.3%
    6.625% NBM Holdings 2029
    3.7%
    iShares China Bond
    3.6%
    6.5% Global Ports Finance 2023
    2.9%
    5.45% Cemex 2029
    2.9%
    5.8% Turkcell 2028
    2.9%
    4.95% Veon Holdings 2024
    2.8%
    4.375% Freeport McMoran 2028
    2.8%
    5.8% Oryx Funding ltd 2031
    2.8%
    4.75% Banco Santander SA perp
    2.7%

    Top Holdings by Country*

    Malta (incl. Cash)
    25.8%
    Brazil
    13.7%
    Mexico
    9.1%
    China
    8.8%
    India
    6.7%
    Russia
    5.7%
    United States
    5.6%
    Turkey
    4.3%
    Oman
    4.2%
    Netherlands
    2.8%
    *including exposures to CIS, using look-through

    Major Sector Breakdown*

    Asset 7
    Communications
    9.8%
    Government
    8.9%
    Industrials
    7.3%
    Real Estate
    7.3%
    Materials
    6.0%
    Materials
    4.0%
    *excluding exposures to CIS

    Asset Allocation

    Cash 10.3%
    Bonds (incl. ETFs) 89.7%

    Maturity Buckets*

    35.6%
    0-5 Years
    30.4%
    5-10 Years
    9.7%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    2.95%

    2020***

    -3.48%

    2019

    -%

    1-month

    0.98%

    3-month

    1.40%

    Annualised Since Inception*

    -0.41%

    *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 90.2%
    Euro 9.8%
    Other 0.0%
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