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

February 2020

With growth settling back to the roughly 2% pace prevailed during the decade-old economic expansion, fears of a global recession lessening, and the manufacturing cycle seemingly heading for a turnaround following a ‘phase one’ agreement between US and China, outlook for 2020 vis-à-vis economic growth seemed positive. Economic data had started to improve whilst yields started to portray the possibility of a broad economic recovery.

Albeit the initial uptick in January, treasury yields traded downwards, as investors; worried about the potential impact on global economic growth and corporate earnings, as a protectionist measure against economic downturn, shunned global equities, wiping out months of gains, and sought the relative safety of sovereigns. Subsequent to the increased demand for safer assets, and reflecting expectations of a possible rate cut, the U.S. 10-year Treasury Yield tumbled by 37.8 basis points, for the month of February and closed the month at 1.126 per cent.

Notably, due to the latter shift towards less risky assets, High Yield bond spreads over treasuries significantly widened, closing-off the month on a much weaker note.

From the data front in the emerging market world, China reported significant drops in its leading indicators, specifically in the Manufacturing and Services PMIs. China’s Manufacturing PMI plunged to 40.3 in February, the lowest level since the survey began in April 2004, and well below preliminary estimates of 45.7. With Chinese authorities imposing restrictions on movement and businesses extending Lunar New Year shutdowns, China’s output supply chain came to a standstill. New orders and employment fell at the steepest rates on record. Exports shrank sharply on the back of shipping restrictions and order cancellations.

Similarly, Services PMI plunged to a record low of 26.5 from 51.8 in the previous month, amid company closures and travel restrictions.

In an attempt to lower financing costs for companies and inject more liquidity into the financial markets, the People’s Bank of China lowered its benchmark 1-year Loan Prime Rate by 10 basis points to 4.05 per cent, and 10 basis points higher than market estimates.

From Latin America, published economic data further affirmed Brazil’s positive run. Notably, albeit slightly lower, business confidence in Brazil remained on a high at 64.80. Among sectors, business confidence weakened in manufacturing and construction, while strengthening in mining.
Meanwhile, Brazil reported a higher Manufacturing PMI for the month, at 52.3 when compared to that of January, standing at 51. The latter reading pointed towards sharpest expansion in factory activity in three months, as output rose amid strong demand, improved economic conditions and stock building initiatives.

In the month of February, the CC EMBF was down just below 2 percent following the remarkable movements seen due to the Covid-19 outbreak. In the month, the Manager continued to raise cash levels based on possibly further widening. The more resilient names were Turkcell, the Turkish telecommunications company, which maintained relatively stable levels on the back of positive operational numbers.

 

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)*

-1.76%

*View Performance History below
Inception Date: 01 Feb 2020
ISIN: MT7000026456
Bloomberg Ticker: CCEMBFF MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.71%
Exit Charge: Up to 2.5%
Distribution Yield (%): 5.0
Underlying Yield (%): 4.98
Distribution: 31/03 and 30/09
Total Net Assets: $12.0 m
Month end NAV in EUR: 101.84
Number of Holdings: 40
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 35.6

Performance To Date (EUR)

Top 10 Holdings

iShares JPM EM Bond Fund
5.4%
6.50% Global Ports 2023
3.7%
4.95% Veon Holdings 2024
3.5%
4.95% Gazprom Capital 2022
3.5%
6.625% Tupy Overseas 2024
3.4%
5.45% Cemex 2029
3.3%
5.80% Turkcell 2028
3.3%
8.125% Global Liman 2021
3.2%
6.95% Moderland 2024
3.2%
6.90% Yestar Healthcare 2021
3.0%

Major Sector Breakdown*

Consumer Staples
20.8%
Asset 7
Communications
12.2%
Financials
10.9%
Government
9.7%
Consumer Discretionary
9.2%
Energy
8.7%
*excluding exposures to CIS

Maturity Buckets*

62.1%
0-5 Years
15.5%
5-10 Years
7.4%
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*

Brazil
19.1%
Malta (incl. cash)
16.1%
China
12.2%
Russia
10.6%
Turkey
9.9%
Mexico
9.1%
Indonesia
4.9%
Netherlands
3.5%
Germany
2.7%
Argentina
2.7%
*including exposures to CIS, using look-through

Asset Allocation

Cash 9.3%
Bonds (incl. ETFs) 90.7%
Equities (incl. ETFs) 0.0%

Performance History (EUR)*

YTD

-1.76%

2019

-%

2018

-%

1-month

-%

3-month

-%

Inception

-1.76%

* Data in the chart does not include any dividends distributed since the Fund was launched on 03 November 2017.
** 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 EUR Distributor Share Class (Class F) was launched on 06 February 2020.

Currency Allocation

USD 92.0%
Euro 8.0%
TRY 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

    February 2020

    With growth settling back to the roughly 2% pace prevailed during the decade-old economic expansion, fears of a global recession lessening, and the manufacturing cycle seemingly heading for a turnaround following a ‘phase one’ agreement between US and China, outlook for 2020 vis-à-vis economic growth seemed positive. Economic data had started to improve whilst yields started to portray the possibility of a broad economic recovery.

    Albeit the initial uptick in January, treasury yields traded downwards, as investors; worried about the potential impact on global economic growth and corporate earnings, as a protectionist measure against economic downturn, shunned global equities, wiping out months of gains, and sought the relative safety of sovereigns. Subsequent to the increased demand for safer assets, and reflecting expectations of a possible rate cut, the U.S. 10-year Treasury Yield tumbled by 37.8 basis points, for the month of February and closed the month at 1.126 per cent.

    Notably, due to the latter shift towards less risky assets, High Yield bond spreads over treasuries significantly widened, closing-off the month on a much weaker note.

    From the data front in the emerging market world, China reported significant drops in its leading indicators, specifically in the Manufacturing and Services PMIs. China’s Manufacturing PMI plunged to 40.3 in February, the lowest level since the survey began in April 2004, and well below preliminary estimates of 45.7. With Chinese authorities imposing restrictions on movement and businesses extending Lunar New Year shutdowns, China’s output supply chain came to a standstill. New orders and employment fell at the steepest rates on record. Exports shrank sharply on the back of shipping restrictions and order cancellations.

    Similarly, Services PMI plunged to a record low of 26.5 from 51.8 in the previous month, amid company closures and travel restrictions.

    In an attempt to lower financing costs for companies and inject more liquidity into the financial markets, the People’s Bank of China lowered its benchmark 1-year Loan Prime Rate by 10 basis points to 4.05 per cent, and 10 basis points higher than market estimates.

    From Latin America, published economic data further affirmed Brazil’s positive run. Notably, albeit slightly lower, business confidence in Brazil remained on a high at 64.80. Among sectors, business confidence weakened in manufacturing and construction, while strengthening in mining.
    Meanwhile, Brazil reported a higher Manufacturing PMI for the month, at 52.3 when compared to that of January, standing at 51. The latter reading pointed towards sharpest expansion in factory activity in three months, as output rose amid strong demand, improved economic conditions and stock building initiatives.

    In the month of February, the CC EMBF was down just below 2 percent following the remarkable movements seen due to the Covid-19 outbreak. In the month, the Manager continued to raise cash levels based on possibly further widening. The more resilient names were Turkcell, the Turkish telecommunications company, which maintained relatively stable levels on the back of positive operational numbers.

     

  • 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)*

    -1.76%

    *View Performance History below
    Inception Date: 01 Feb 2020
    ISIN: MT7000026456
    Bloomberg Ticker: CCEMBFF MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.71%
    Exit Charge: Up to 2.5%
    Distribution Yield (%): 5.0
    Underlying Yield (%): 4.98
    Distribution: 31/03 and 30/09
    Total Net Assets: $12.0 m
    Month end NAV in EUR: 101.84
    Number of Holdings: 40
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 35.6

    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
    5.4%
    6.50% Global Ports 2023
    3.7%
    4.95% Veon Holdings 2024
    3.5%
    4.95% Gazprom Capital 2022
    3.5%
    6.625% Tupy Overseas 2024
    3.4%
    5.45% Cemex 2029
    3.3%
    5.80% Turkcell 2028
    3.3%
    8.125% Global Liman 2021
    3.2%
    6.95% Moderland 2024
    3.2%
    6.90% Yestar Healthcare 2021
    3.0%

    Top Holdings by Country*

    Brazil
    19.1%
    Malta (incl. cash)
    16.1%
    China
    12.2%
    Russia
    10.6%
    Turkey
    9.9%
    Mexico
    9.1%
    Indonesia
    4.9%
    Netherlands
    3.5%
    Germany
    2.7%
    Argentina
    2.7%
    *including exposures to CIS, using look-through

    Major Sector Breakdown*

    Consumer Staples
    20.8%
    Asset 7
    Communications
    12.2%
    Financials
    10.9%
    Government
    9.7%
    Consumer Discretionary
    9.2%
    Energy
    8.7%
    *excluding exposures to CIS

    Asset Allocation

    Cash 9.3%
    Bonds (incl. ETFs) 90.7%
    Equities (incl. ETFs) 0.0%

    Maturity Buckets*

    62.1%
    0-5 Years
    15.5%
    5-10 Years
    7.4%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -1.76%

    2019

    -%

    2018

    -%

    1-month

    -%

    3-month

    -%

    Inception

    -1.76%

    * Data in the chart does not include any dividends distributed since the Fund was launched on 03 November 2017.
    ** 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 EUR Distributor Share Class (Class F) was launched on 06 February 2020.

    Credit Ratings*

    Average Credit Rating: BB
    *excluding exposures to CIS

    Currency Allocation

    USD 92.0%
    Euro 8.0%
    TRY 0.0%
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