Investment Objectives

The CC Euro High Income Bond Fund Accumulator Institutional aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. 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 Euro High Income Bond Fund Accumulator is:

  • Seeking to earn a high level of regular income
  • Seeking an actively managed & diversified investment in high income bonds.

Fund Rules

The Investment Manager of the CC Euro High Income Bond Fund has the duty to ensure that the underlying holdings 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 funds. Some of the restrictions include:

  • The fund may not invest more than 10% of its assets in securities listed by the same body
  • 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 fund
  • The fund may not carry out uncovered sales (naked short-selling) of securities or other financial instruments

Commentary

September 2021

Policy action by the respective central bankers, sustainability in economic momentum, and inflation proposition – stemming from a reopening of economies, supply chain disruptions, and a commodity super-cycle, were undoubtedly the key themes in Q3 2021.

The role of central bankers and governments, have since the coronavirus pandemic broke, been crucial. In response to the ensuing economic disruptions, policy makers intervened, introducing from a monetary policy perspective; interest rate cuts and bond purchasing programmes. Governments, albeit generally constrained in terms of fiscal space, swiftly reacted, introducing fiscal stimulus. Monetary intervention allowed corporates to tap the primary market at low favourable rates while fiscal intervention allowed corporates to maintain their cash buffers and ultimately survive. The latter at the expense of increased debt levels, and thus rise in the ‘Debt-to-GDP’ metric. Central bankers were also clear on allowing the economy to turn hot, allowing inflation to temporarily persist.

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, giving rise to doubts about the sustainability of economic growth. While a slight deceleration in the pace of expansion is to be expected as economies normalise after the pandemic, the extent of such normalisation and sustainability in economic momentum remains in question.

In September, Eurozone Manufacturing PMI stood at 58.6, largely unchanged from a preliminary estimate of 58.7 yet notably lower from the previous month’s reading of 61.4, as rates of expansion in output, new orders, and employment, cooled. Albeit being the lowest since February 2021, September’s reading pointed to another month of strong improvement in operating conditions. Meanwhile, Eurozone Services PMI stood at 56.4 in September 2021, slightly higher when compared to preliminary expectations of 56.3 and lower than the previous month’s reading of 59.8. During the said survey period, new business from overseas grew only marginally following relatively strong increases in the previous three months. From the employment front, job creation continued at a strong pace, although the rate of employment growth slowed to a four-month low. Shortages of inputs is said to have impeded both manufacturing and service sector output.

The slowdown in economic activity was particularly pronounced in Europe’s largest economy, Germany. Albeit still reporting strong PMI data, revolving in expansionary territory, activity in both manufacturing and services saw declines. In September, manufacturing PMI was revised slightly lower to 58.4 from a preliminary estimate of 58.5, and significantly lower from August’s 62.6. September’s reading pointed to the slowest growth in factory activity since February 2021 amid supply bottlenecks. Services, in recent months benefitting from the easing of restrictive measures, also showed signs of weakening. Germany’s services PMI stood at 56.2 in September, down from 60.8 in August.

Eurozone inflation was estimated at 3.4 per cent in September 2021, higher than August’s actual 3.0 per cent and above economist expectations of 3.3 per cent. September’s flash reading is the highest since November 2011. The rate of expansion would match the highest rate of inflation since before the global financial crisis in September 2008, raising concerns about the ECB’s narrative that recent price spikes are seen as temporary and that the economy requires low borrowing costs. Month-on-month, inflation increased by 0.50 per cent.

On the back of increased uncertainty surrounding the pandemic as we approach the colder days and signs of global growth momentum possibly easing, European corporate credit headed lower in September. European high yield outperformed its higher-rated counterparts, generating a marginal negative total return of 0.08 per cent. European investment grade extended the losses incurred in August, by a further 0.68 per cent as European Sovereign yields continued to reverse the downward moves witnessed towards the end of Q2 and beginning of Q3, 2021. Germany’s 10-year benchmark yield closed the month 19bps higher, at 0.20 per cent. Bond yields of sovereigns within the bloc’s periphery – those which offer a premium over Germany’s negative yielding debt, also rose, at somewhat slower pace. In September, Italy’s and Spain’s 10-year sovereign yields rose 15bps and 12bps, respectively.

The CC Euro High Income Bond Fund dropped by 0.36 per cent in September. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within banking industry. Exposure to the banking industry, now comprising of 13.70 per cent of the portfolio, was increased through Standard Chartered – a British multinational banking and financial services company. 

Going forward the Managers believe that credit markets will continue to be aided by the support of primarily monetary politicians, creating a positive technical environment. In terms of bond picking, the Managers will continue to monitor the current environment and take opportunities in attractive credit stories which should continue to add value to the portfolio.

A quick introduction to our Euro High Income Bond Fund

Watch Video

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)*

15.97%

*View Performance History below
Inception Date: 24 Apr 2020
ISIN: MT7000026464
Bloomberg Ticker: CCHIBEE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.18%
Exit Charge: None
Distribution Yield (%): N/A
Underlying Yield (%): 4.35
Distribution:
Total Net Assets: € 45.32 mn
Month end NAV in EUR: 129.61
Number of Holdings: 78
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 24.80

Performance To Date (EUR)

Top 10 Holdings

iShares Euro HY Corp
4.2%
iShares Fallen Angels HY Corp
3.4%
4.875% CPI Property Group perp
2.6%
4% Chemours Co 2026
2.3%
5% Nidda Bondco GMBH 2025
2.2%
2.5% Hapag Lloyd AG 2028
2.1%
6% Loxam SAS 2025
2.1%
5.25% HSBC Holdings plc perp
2.0%
4.25% Encore Capital Group 2028
2.0%
4.625% Volkswagen perp
2.0%

Major Sector Breakdown*

Financials
13.7%
Asset 7
Communications
10.9%
Funds
9.4%
Industrials
8.2%
Consumer Discretionary
5.8%
Consumer Discretionary
5.6%
*excluding exposures to CIS

Maturity Buckets*

70.5%
0-5 Years
11.9%
5-10 Years
2.5%
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*

Germany
11.4%
France
8.8%
Spain
6.9%
Italy
4.1%
Netherlands
3.8%
Malta
3.5%
Turkey
3.2%
Brazil
3.1%
Ireland
3.1%
India
1.6%
*including exposures to CIS

Asset Allocation

Cash 5.7%
Bonds 84.9%
CIS/ETFs 9.4%

Performance History (EUR)*

YTD

2.30%

2020*

13.37%

2019

-%

2018

-%

2017

-%

Annualised SinceInception*

10.87%

* The Accumulator Share Class (Class E) was launched on the 24th April 2020.

Currency Allocation

Euro 84.4%
USD 15.6%
Other 0.0%

Risk Statistics

Sharpe Ratio
(3Y)
(5Y)
Std. Deviation
(3Y)
(5Y)

Interested in this product?

  • Investment Objectives

    The CC Euro High Income Bond Fund Accumulator Institutional aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. 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 Euro High Income Bond Fund Accumulator is:

    • Seeking to earn a high level of regular income
    • Seeking an actively managed & diversified investment in high income 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 securities listed by the same body
    • 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 fund
    • The fund may not carry out uncovered sales (naked short-selling) of securities or other financial instruments
  • Commentary

    September 2021

    Policy action by the respective central bankers, sustainability in economic momentum, and inflation proposition – stemming from a reopening of economies, supply chain disruptions, and a commodity super-cycle, were undoubtedly the key themes in Q3 2021.

    The role of central bankers and governments, have since the coronavirus pandemic broke, been crucial. In response to the ensuing economic disruptions, policy makers intervened, introducing from a monetary policy perspective; interest rate cuts and bond purchasing programmes. Governments, albeit generally constrained in terms of fiscal space, swiftly reacted, introducing fiscal stimulus. Monetary intervention allowed corporates to tap the primary market at low favourable rates while fiscal intervention allowed corporates to maintain their cash buffers and ultimately survive. The latter at the expense of increased debt levels, and thus rise in the ‘Debt-to-GDP’ metric. Central bankers were also clear on allowing the economy to turn hot, allowing inflation to temporarily persist.

    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, giving rise to doubts about the sustainability of economic growth. While a slight deceleration in the pace of expansion is to be expected as economies normalise after the pandemic, the extent of such normalisation and sustainability in economic momentum remains in question.

    In September, Eurozone Manufacturing PMI stood at 58.6, largely unchanged from a preliminary estimate of 58.7 yet notably lower from the previous month’s reading of 61.4, as rates of expansion in output, new orders, and employment, cooled. Albeit being the lowest since February 2021, September’s reading pointed to another month of strong improvement in operating conditions. Meanwhile, Eurozone Services PMI stood at 56.4 in September 2021, slightly higher when compared to preliminary expectations of 56.3 and lower than the previous month’s reading of 59.8. During the said survey period, new business from overseas grew only marginally following relatively strong increases in the previous three months. From the employment front, job creation continued at a strong pace, although the rate of employment growth slowed to a four-month low. Shortages of inputs is said to have impeded both manufacturing and service sector output.

    The slowdown in economic activity was particularly pronounced in Europe’s largest economy, Germany. Albeit still reporting strong PMI data, revolving in expansionary territory, activity in both manufacturing and services saw declines. In September, manufacturing PMI was revised slightly lower to 58.4 from a preliminary estimate of 58.5, and significantly lower from August’s 62.6. September’s reading pointed to the slowest growth in factory activity since February 2021 amid supply bottlenecks. Services, in recent months benefitting from the easing of restrictive measures, also showed signs of weakening. Germany’s services PMI stood at 56.2 in September, down from 60.8 in August.

    Eurozone inflation was estimated at 3.4 per cent in September 2021, higher than August’s actual 3.0 per cent and above economist expectations of 3.3 per cent. September’s flash reading is the highest since November 2011. The rate of expansion would match the highest rate of inflation since before the global financial crisis in September 2008, raising concerns about the ECB’s narrative that recent price spikes are seen as temporary and that the economy requires low borrowing costs. Month-on-month, inflation increased by 0.50 per cent.

    On the back of increased uncertainty surrounding the pandemic as we approach the colder days and signs of global growth momentum possibly easing, European corporate credit headed lower in September. European high yield outperformed its higher-rated counterparts, generating a marginal negative total return of 0.08 per cent. European investment grade extended the losses incurred in August, by a further 0.68 per cent as European Sovereign yields continued to reverse the downward moves witnessed towards the end of Q2 and beginning of Q3, 2021. Germany’s 10-year benchmark yield closed the month 19bps higher, at 0.20 per cent. Bond yields of sovereigns within the bloc’s periphery – those which offer a premium over Germany’s negative yielding debt, also rose, at somewhat slower pace. In September, Italy’s and Spain’s 10-year sovereign yields rose 15bps and 12bps, respectively.

    The CC Euro High Income Bond Fund dropped by 0.36 per cent in September. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within banking industry. Exposure to the banking industry, now comprising of 13.70 per cent of the portfolio, was increased through Standard Chartered – a British multinational banking and financial services company. 

    Going forward the Managers believe that credit markets will continue to be aided by the support of primarily monetary politicians, creating a positive technical environment. In terms of bond picking, the Managers will continue to monitor the current environment and take opportunities in attractive credit stories which should continue to add value to the portfolio.

  • 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)*

    15.97%

    *View Performance History below
    Inception Date: 24 Apr 2020
    ISIN: MT7000026464
    Bloomberg Ticker: CCHIBEE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.18%
    Exit Charge: None
    Distribution Yield (%): N/A
    Underlying Yield (%): 4.35
    Distribution:
    Total Net Assets: € 45.32 mn
    Month end NAV in EUR: 129.61
    Number of Holdings: 78
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 24.80

    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 Euro HY Corp
    4.2%
    iShares Fallen Angels HY Corp
    3.4%
    4.875% CPI Property Group perp
    2.6%
    4% Chemours Co 2026
    2.3%
    5% Nidda Bondco GMBH 2025
    2.2%
    2.5% Hapag Lloyd AG 2028
    2.1%
    6% Loxam SAS 2025
    2.1%
    5.25% HSBC Holdings plc perp
    2.0%
    4.25% Encore Capital Group 2028
    2.0%
    4.625% Volkswagen perp
    2.0%

    Top Holdings by Country*

    Germany
    11.4%
    France
    8.8%
    Spain
    6.9%
    Italy
    4.1%
    Netherlands
    3.8%
    Malta
    3.5%
    Turkey
    3.2%
    Brazil
    3.1%
    Ireland
    3.1%
    India
    1.6%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    13.7%
    Asset 7
    Communications
    10.9%
    Funds
    9.4%
    Industrials
    8.2%
    Consumer Discretionary
    5.8%
    Consumer Discretionary
    5.6%
    *excluding exposures to CIS

    Asset Allocation

    Cash 5.7%
    Bonds 84.9%
    CIS/ETFs 9.4%

    Maturity Buckets*

    70.5%
    0-5 Years
    11.9%
    5-10 Years
    2.5%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    2.30%

    2020*

    13.37%

    2019

    -%

    2018

    -%

    2017

    -%

    Annualised SinceInception*

    10.87%

    * The Accumulator Share Class (Class E) was launched on the 24th April 2020.

    Credit Ratings*

    Average Credit Rating: BB-
    *excluding exposures to CIS

    Currency Allocation

    Euro 84.4%
    USD 15.6%
    Other 0.0%

    Risk Statistics

    Sharpe Ratio
    (3Y)
    (5Y)
    Std. Deviation
    (3Y)
    (5Y)
  • Downloads

Designed and Developed by