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

June 2021

The phrase “a lot may happen in a year” seems fitting for both financial markets and economic data. Financial markets, then recovering from significant declines, have improved. Equity markets headed to all-time highs while credit markets, previously witnessing credit spreads reaching significant highs of over 1000bps, recouped. Economic data, dampened as coronavirus-inflicted restrictions weighed, improved.

In June, economic data, in line with expectations maintained its recent pace, proving strong. The vaccination rollout in many developed countries, being well underway, allowing for the unlocking of economies and a gradual return to normality, combined with sizeable fiscal support is facilitating a big bounce in economic activity. A scenario everyone has longed for. The pick-up in economic activity has however, been partly overshadowed by a sharp pickup in inflation and a rising concern that this could lead to central banks withdrawing some of their stimulatory policies. A move which investors’ believe will effect equity valuations as discount rates increase.

Commodities continued to show persistent strength across the asset class, with natural gas and molybdenum being among the top-performing assets.  Crude oil, conditioned by the OPEC+ decisions in regards to the level of output, also witnessed notable gains for the month.

Real world data on vaccine efficacy continues to be largely positive, with hospitalisations remaining largely low in those countries where the vaccine rollout has progressed far enough to protect the most vulnerable age groups. The large divide between developed and emerging economies is now evermore apparent, as many European countries plan their summer re-opening, while the tragic health crisis in India continues, and underlining the need for a rapid rollout of vaccines on a global scale.

From the data front, the Euro area economic activity showed signs of a recovery. The long awaited pick-up in services across Europe continued to transpire, while factory activity maintained its upward trajectory.

In June, the Eurozone Manufacturing PMI was revised higher to a new record high of 63.4, from a preliminary estimate of 63.1. The rise marked the twelfth successive month of expansion within the manufacturing sector. Meanwhile, services – previously posing a drag on the Euro area’s economic recovery, rose to 58.3, from a preliminary estimate of 58.0, signalling the steepest pace of expansion in the services sector since July 2007. This, largely due to the easing of coronavirus-induced measures in many member states. Business confidence on the Euro area’s future direction was the best since August 2000.

Europe’s largest economy, Germany reported strong PMI data for manufacturing at 65.1, upwardly revised from a preliminary 64.9. Albeit revised lower from preliminary estimates, services maintained its recent pace of growth at 57.5, amid the further easing of virus containment measures. The stage is set for continued robust growth in both factory activity and services, amid the acceleration of new order growth and supply shortages remaining a prominent feature, contributing to a further build-up of backlogs of work, and further easing of coronavirus-inflicted restrictions. 

We continue to believe that the pace of economic recovery in Europe will be different to that in the US, therefore we will continue to tactfully time the exiting from European sovereigns with caution, given the impact of inflation fears on yield curves. Nonetheless, a rise in cases triggered by the delta variant might push investors in once again finding comfort in sovereign bonds

Yields on Europe’s most sought after benchmark; the 10-year German Bund, closed lower than the previous month at -0.209% compared to -0.188% the previous month. Similarly, Italy’s 10-year sovereign yield closed the month lower at 0.818% compared to 0.908% in May. The Spanish 10-year closed marginally wider at 0.411%.

Albeit underperforming US corporate credit, European credit generated positive returns in June. For the month, European Investment grade (the highest quality bonds as determined by a credit rating agency), aided by falling yields, generated positive returns, while high yield corporate credit (more speculative bonds as determined by a credit rating agency) continued to benefit from the economic recovery and improving credit fundamentals.

The CC Euro High Income Bond Fund increased by 0.67 per cent throughout the month. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the automotive, property, and transportation sectors. The Manager increased its exposure in Grupo Antolin, the Spanish manufacturer of car interiors and headliners, and CPI Property, the Czech real estate company following the attractiveness in credit and the resilient economy following the pandemic punch.   

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

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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)*

15.53%

*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 (%): 4.41
Distribution:
Total Net Assets: € 42.71 mn
Month end NAV in EUR: 129.12
Number of Holdings: 77
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 25.0

Performance To Date (EUR)

Top 10 Holdings

iShares Euro HY Corp
4.0%
iShares Falling Angels HY Corp
3.6%
4% Chemours Co. 2026
2.4%
5% Nidda Bondco GMBH 2025
2.4%
5.25% HSBC Holdings plc perp
2.2%
6% Loxam SAS 2025
2.2%
4.625% Volkswagen perp
2.2%
4.875% CPI Property Group perp
2.1%
4.375% Cheplapharm 2028
2.0%
3.5% Eircom Finance 2026
1.9%

Major Sector Breakdown*

Financials
13.5%
Asset 7
Communications
11.3%
Funds
9.7%
Industrials
7.2%
Consumer Discretionary
6.0%
Consumer Discretionary
6.0%
*excluding exposures to CIS

Maturity Buckets*

38.3%
0-5 Years
21.6%
5-10 Years
24.1%
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
11.3%
France
9.0%
Spain
6.5%
Italy
4.9%
Netherlands
4.1%
Malta
3.8%
Turkey
3.4%
Ireland
3.3%
Brazil
3.3%
India
1.7%
*including exposures to CIS

Asset Allocation

Cash 6.3%
Bonds 84.1%
CIS/ETFs 9.7%

Performance History (EUR)*

YTD

1.91%

2020*

13.37%

2019

-%

2018

-%

2017

-%

Annualised SinceInception*

12.97%

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

Currency Allocation

Euro 83.6%
USD 16.4%
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

    June 2021

    The phrase “a lot may happen in a year” seems fitting for both financial markets and economic data. Financial markets, then recovering from significant declines, have improved. Equity markets headed to all-time highs while credit markets, previously witnessing credit spreads reaching significant highs of over 1000bps, recouped. Economic data, dampened as coronavirus-inflicted restrictions weighed, improved.

    In June, economic data, in line with expectations maintained its recent pace, proving strong. The vaccination rollout in many developed countries, being well underway, allowing for the unlocking of economies and a gradual return to normality, combined with sizeable fiscal support is facilitating a big bounce in economic activity. A scenario everyone has longed for. The pick-up in economic activity has however, been partly overshadowed by a sharp pickup in inflation and a rising concern that this could lead to central banks withdrawing some of their stimulatory policies. A move which investors’ believe will effect equity valuations as discount rates increase.

    Commodities continued to show persistent strength across the asset class, with natural gas and molybdenum being among the top-performing assets.  Crude oil, conditioned by the OPEC+ decisions in regards to the level of output, also witnessed notable gains for the month.

    Real world data on vaccine efficacy continues to be largely positive, with hospitalisations remaining largely low in those countries where the vaccine rollout has progressed far enough to protect the most vulnerable age groups. The large divide between developed and emerging economies is now evermore apparent, as many European countries plan their summer re-opening, while the tragic health crisis in India continues, and underlining the need for a rapid rollout of vaccines on a global scale.

    From the data front, the Euro area economic activity showed signs of a recovery. The long awaited pick-up in services across Europe continued to transpire, while factory activity maintained its upward trajectory.

    In June, the Eurozone Manufacturing PMI was revised higher to a new record high of 63.4, from a preliminary estimate of 63.1. The rise marked the twelfth successive month of expansion within the manufacturing sector. Meanwhile, services – previously posing a drag on the Euro area’s economic recovery, rose to 58.3, from a preliminary estimate of 58.0, signalling the steepest pace of expansion in the services sector since July 2007. This, largely due to the easing of coronavirus-induced measures in many member states. Business confidence on the Euro area’s future direction was the best since August 2000.

    Europe’s largest economy, Germany reported strong PMI data for manufacturing at 65.1, upwardly revised from a preliminary 64.9. Albeit revised lower from preliminary estimates, services maintained its recent pace of growth at 57.5, amid the further easing of virus containment measures. The stage is set for continued robust growth in both factory activity and services, amid the acceleration of new order growth and supply shortages remaining a prominent feature, contributing to a further build-up of backlogs of work, and further easing of coronavirus-inflicted restrictions. 

    We continue to believe that the pace of economic recovery in Europe will be different to that in the US, therefore we will continue to tactfully time the exiting from European sovereigns with caution, given the impact of inflation fears on yield curves. Nonetheless, a rise in cases triggered by the delta variant might push investors in once again finding comfort in sovereign bonds

    Yields on Europe’s most sought after benchmark; the 10-year German Bund, closed lower than the previous month at -0.209% compared to -0.188% the previous month. Similarly, Italy’s 10-year sovereign yield closed the month lower at 0.818% compared to 0.908% in May. The Spanish 10-year closed marginally wider at 0.411%.

    Albeit underperforming US corporate credit, European credit generated positive returns in June. For the month, European Investment grade (the highest quality bonds as determined by a credit rating agency), aided by falling yields, generated positive returns, while high yield corporate credit (more speculative bonds as determined by a credit rating agency) continued to benefit from the economic recovery and improving credit fundamentals.

    The CC Euro High Income Bond Fund increased by 0.67 per cent throughout the month. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the automotive, property, and transportation sectors. The Manager increased its exposure in Grupo Antolin, the Spanish manufacturer of car interiors and headliners, and CPI Property, the Czech real estate company following the attractiveness in credit and the resilient economy following the pandemic punch.   

    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)*

    15.53%

    *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 (%): 4.41
    Distribution:
    Total Net Assets: € 42.71 mn
    Month end NAV in EUR: 129.12
    Number of Holdings: 77
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 25.0

    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
    4.0%
    iShares Falling Angels HY Corp
    3.6%
    4% Chemours Co. 2026
    2.4%
    5% Nidda Bondco GMBH 2025
    2.4%
    5.25% HSBC Holdings plc perp
    2.2%
    6% Loxam SAS 2025
    2.2%
    4.625% Volkswagen perp
    2.2%
    4.875% CPI Property Group perp
    2.1%
    4.375% Cheplapharm 2028
    2.0%
    3.5% Eircom Finance 2026
    1.9%

    Top Holdings by Country*

    Germany
    11.3%
    France
    9.0%
    Spain
    6.5%
    Italy
    4.9%
    Netherlands
    4.1%
    Malta
    3.8%
    Turkey
    3.4%
    Ireland
    3.3%
    Brazil
    3.3%
    India
    1.7%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    13.5%
    Asset 7
    Communications
    11.3%
    Funds
    9.7%
    Industrials
    7.2%
    Consumer Discretionary
    6.0%
    Consumer Discretionary
    6.0%
    *excluding exposures to CIS

    Asset Allocation

    Cash 6.3%
    Bonds 84.1%
    CIS/ETFs 9.7%

    Maturity Buckets*

    38.3%
    0-5 Years
    21.6%
    5-10 Years
    24.1%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    1.91%

    2020*

    13.37%

    2019

    -%

    2018

    -%

    2017

    -%

    Annualised SinceInception*

    12.97%

    * 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 83.6%
    USD 16.4%
    Other 0.0%

    Risk Statistics

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