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

November 2020

The US election saga and positive vaccine news-flow were the main drivers of the markets during the month of November. Joe Biden has been elected as the new US president and cabinet appointments, with Ms Yellen back on the fore front, seems to promise a return to policy-making normality, with closer coordination between fiscal and monetary policy. The first coronavirus vaccines are on track for international deployment within weeks on both sides of the Atlantic. This improves the prospects for a recovery in the global economy, and this has subsequently been reflected in asset prices worldwide.

An agreement between the UK and the European Union over a trade deal following the UK’s exit at the turn of the New Year remains elusive. Both sides remain pushing a hard bargain, but are steadfast in keeping the communication channels open in order to arrive to a solution sooner rather than later.

Despite the positive undertones for 2021, the immediate picture remains strained, with record virus cases in the United States, and selectively in Europe. The resultant lockdowns and social distancing measures have upended the momentum in risk assets following the announcement of the multiple vaccines and rollout plans thereof. Additionally, President Donald Trump has refused to throw in the title and is making avail of all of his legal avenues to claw onto the presidency. Despite this, the market at large expects a smooth transition come January.

Data has become a very sensitive element for market participants as it depicts the strength of the recovery, particularly in light of the current restrictions in place in the West. Despite economic data confirming that the pace of recovery stalled over the summer, we are nowhere near the levels experienced during the first lockdown.

Indeed recent data reveals that mobility in Europe has held up rather well during the second round “lighter” version of lockdown restrictions. The use of cars has been hit much less than in March/April. In addition, trucking activity in Europe seems unaffected by the re-imposed lockdowns, in contrast to what happened earlier in the year.

Data has largely reflected the mood in the marketplace and unfolded as expected. Looking at Europe’s largest economy, Germany, PMIs indicated a consistent expansion during the month of November, with Manufacturing PMI at 57.8, compared to a consensus estimate of 57.9, and a previous reading of 57.9. Services PMI were less impressive, coming in at 46, signalling a renewed contraction, compared to 49.5 in the previous month.
Meanwhile, the Euro Area’s Manufacturing PMI indicated an expansion to 53.8, slightly above expectations of 53.6, while services PMI deteriorated further to 41.7 from a previous reading of 46.9. Services are expected to remain depressed until economies open up at full capacity again.
On the unemployment front, within the Eurozone area it inched downwards to 8.4% from a revised estimate of 8.5%. Moreover, consumer confidence remained stagnant, with readings coming in at -17.6. Collectively, despite some positive signs, indicators are suggesting that we are still at the very beginning of a fragile economic recovery.

Sovereign yields were conditioned by the risk-on mode with the German sovereign 10-year yield trading wider than the previous month at -0.571 compared to -0.625 at the end of last month. General sovereign rates were rangy and spread compression continued with credit tighter on both rating spectrums. These moves were more visible in peripheral sovereign debt on the prospect of further asset purchases by the European Central Bank. Portugal’s 10-year bond yield dropped below zero, temporarily joining the negative yield club.

Hybrids, both financials and non-financials, enjoyed decent total return. Primary markets were active with a flurry of new issues flooding the markets. There is still a lot of cash in the market to be invested, which should act as a strong bid for credit as an asset class.

The CC Euro High Income fund increased by 3.36 percent, underperforming the broader market, which increased 4.31 percent throughout the month of November. On a year-to-date basis, the fund is underperforming on a net basis due to the lower beta of the portfolio and the subsequent strong market recovery; albeit the volatility of the fund has been markedly lower than average resulting in a favourable Sharpe ratio. Throughout the month, the Manager continued to adjust the portfolio into attractive undervalued credit stories, primary within the AT1 space.

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.

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)

N/A

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

€100000

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

N/A

Inception Date: 24 Apr 2020
ISIN: MT7000026464
Bloomberg Ticker: CCHIBEE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.40%
Exit Charge: None
Distribution Yield (%):
Underlying Yield (%): 4.54
Distribution:
Total Net Assets: € 41.46 mn
Month end NAV in EUR: 125.67
Number of Holdings: 90
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 25.3

Performance To Date (EUR)

Top 10 Holdings

iShares Euro Corp Large Cap
4.0%
iShares Euro HY Corp
3.1%
2.25% Portugal Treasury 2034
2.6%
6.5% CMA CGM 2022
2.5%
5% Nidda Bond Co. 2025
2.5%
4% Chemours Co. 2026
2.4%
5.25% HSBC perp.
2.3%
6% Loxam SAS 2025
2.2%
3.5% Eircom 2026
2.0%
5.25% Turkey 2030
1.8%

Major Sector Breakdown*

Financials
12.1%
Asset 7
Communications
11.1%
Consumer Discretionary
10.8%
Government
6.3%
Industrials
5.2%
Materials
5.0%
*excluding exposures to CIS

Maturity Buckets*

60.7%
0-5 Years
21.7%
5-10 Years
3.8%
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*

France
17.1%
Germany
13.0%
Malta
10.0%
Brazil
9.0%
USA
5.9%
UK
5.4%
Spain
4.5%
Ireland
3.5%
Turkey
3.5%
Switzerland
2.8%
*including exposures to CIS

Asset Allocation

Cash 4.8%
Bonds 86.2%
CIS/ETFs 9.0%

Performance History (EUR)*

YTD

12.45%

2019

-%

2018

-%

2017

-%

2016

-%

Annualised SinceInception*

21.49%

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

Currency Allocation

Euro 84.1%
USD 15.9%
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

    November 2020

    The US election saga and positive vaccine news-flow were the main drivers of the markets during the month of November. Joe Biden has been elected as the new US president and cabinet appointments, with Ms Yellen back on the fore front, seems to promise a return to policy-making normality, with closer coordination between fiscal and monetary policy. The first coronavirus vaccines are on track for international deployment within weeks on both sides of the Atlantic. This improves the prospects for a recovery in the global economy, and this has subsequently been reflected in asset prices worldwide.

    An agreement between the UK and the European Union over a trade deal following the UK’s exit at the turn of the New Year remains elusive. Both sides remain pushing a hard bargain, but are steadfast in keeping the communication channels open in order to arrive to a solution sooner rather than later.

    Despite the positive undertones for 2021, the immediate picture remains strained, with record virus cases in the United States, and selectively in Europe. The resultant lockdowns and social distancing measures have upended the momentum in risk assets following the announcement of the multiple vaccines and rollout plans thereof. Additionally, President Donald Trump has refused to throw in the title and is making avail of all of his legal avenues to claw onto the presidency. Despite this, the market at large expects a smooth transition come January.

    Data has become a very sensitive element for market participants as it depicts the strength of the recovery, particularly in light of the current restrictions in place in the West. Despite economic data confirming that the pace of recovery stalled over the summer, we are nowhere near the levels experienced during the first lockdown.

    Indeed recent data reveals that mobility in Europe has held up rather well during the second round “lighter” version of lockdown restrictions. The use of cars has been hit much less than in March/April. In addition, trucking activity in Europe seems unaffected by the re-imposed lockdowns, in contrast to what happened earlier in the year.

    Data has largely reflected the mood in the marketplace and unfolded as expected. Looking at Europe’s largest economy, Germany, PMIs indicated a consistent expansion during the month of November, with Manufacturing PMI at 57.8, compared to a consensus estimate of 57.9, and a previous reading of 57.9. Services PMI were less impressive, coming in at 46, signalling a renewed contraction, compared to 49.5 in the previous month.
    Meanwhile, the Euro Area’s Manufacturing PMI indicated an expansion to 53.8, slightly above expectations of 53.6, while services PMI deteriorated further to 41.7 from a previous reading of 46.9. Services are expected to remain depressed until economies open up at full capacity again.
    On the unemployment front, within the Eurozone area it inched downwards to 8.4% from a revised estimate of 8.5%. Moreover, consumer confidence remained stagnant, with readings coming in at -17.6. Collectively, despite some positive signs, indicators are suggesting that we are still at the very beginning of a fragile economic recovery.

    Sovereign yields were conditioned by the risk-on mode with the German sovereign 10-year yield trading wider than the previous month at -0.571 compared to -0.625 at the end of last month. General sovereign rates were rangy and spread compression continued with credit tighter on both rating spectrums. These moves were more visible in peripheral sovereign debt on the prospect of further asset purchases by the European Central Bank. Portugal’s 10-year bond yield dropped below zero, temporarily joining the negative yield club.

    Hybrids, both financials and non-financials, enjoyed decent total return. Primary markets were active with a flurry of new issues flooding the markets. There is still a lot of cash in the market to be invested, which should act as a strong bid for credit as an asset class.

    The CC Euro High Income fund increased by 3.36 percent, underperforming the broader market, which increased 4.31 percent throughout the month of November. On a year-to-date basis, the fund is underperforming on a net basis due to the lower beta of the portfolio and the subsequent strong market recovery; albeit the volatility of the fund has been markedly lower than average resulting in a favourable Sharpe ratio. Throughout the month, the Manager continued to adjust the portfolio into attractive undervalued credit stories, primary within the AT1 space.

    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.

  • 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)

    N/A

    ASSET CLASS

    Bonds

    MIN. INITIAL INVESTMENT

    €100000

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    RETURN (SINCE INCEPTION)*

    N/A

    Inception Date: 24 Apr 2020
    ISIN: MT7000026464
    Bloomberg Ticker: CCHIBEE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.40%
    Exit Charge: None
    Distribution Yield (%):
    Underlying Yield (%): 4.54
    Distribution:
    Total Net Assets: € 41.46 mn
    Month end NAV in EUR: 125.67
    Number of Holdings: 90
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 25.3

    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 Corp Large Cap
    4.0%
    iShares Euro HY Corp
    3.1%
    2.25% Portugal Treasury 2034
    2.6%
    6.5% CMA CGM 2022
    2.5%
    5% Nidda Bond Co. 2025
    2.5%
    4% Chemours Co. 2026
    2.4%
    5.25% HSBC perp.
    2.3%
    6% Loxam SAS 2025
    2.2%
    3.5% Eircom 2026
    2.0%
    5.25% Turkey 2030
    1.8%

    Top Holdings by Country*

    France
    17.1%
    Germany
    13.0%
    Malta
    10.0%
    Brazil
    9.0%
    USA
    5.9%
    UK
    5.4%
    Spain
    4.5%
    Ireland
    3.5%
    Turkey
    3.5%
    Switzerland
    2.8%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    12.1%
    Asset 7
    Communications
    11.1%
    Consumer Discretionary
    10.8%
    Government
    6.3%
    Industrials
    5.2%
    Materials
    5.0%
    *excluding exposures to CIS

    Asset Allocation

    Cash 4.8%
    Bonds 86.2%
    CIS/ETFs 9.0%

    Maturity Buckets*

    60.7%
    0-5 Years
    21.7%
    5-10 Years
    3.8%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    12.45%

    2019

    -%

    2018

    -%

    2017

    -%

    2016

    -%

    Annualised SinceInception*

    21.49%

    * 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 84.1%
    USD 15.9%
    Other 0.0%

    Risk Statistics

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