Investment Objectives

The CC Euro High Income Bond Fund Distributor 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 Distributor 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 2021

The coronavirus pandemic have, since first detected in the Capital of Hubei Province – Wuhan, dominated news headlines. It caught the world by surprise, altering life patterns and dictating economies path forward. Financial markets inevitably felt the pinch.

Efforts by central banks in the form of stimulus support, and governments, through mitigation measures to reduce the spread, vaccine coverage, and fiscal support, improved the scenario both from a health and economic perspective. However, in recent weeks a surge in coronavirus cases, possibly due to a seasonal effect which may probably contribute to a bigger outbreak, was witnessed. In fact, Europe is experiencing a surge in coronavirus infections, to levels not seen in months.

A new mutation: the Omicron variant, emerging from southern Africa, augmented fears that countries, owing to the variants’ unprecedented set of genetic mutations may once more be engulfed with infections. Conclusive findings on such emerging mutation, due to its relatively recent discovery, is thus far unavailable. That said, the repercussions, both from a health and economic viewpoint, the latter dependant on the ensuing course of action by governments to mitigate the spread and to ultimately avoid overwhelming hospitals, remain unclear. Vaccination programmes and distribution of boosters – a third dose which shall further increase immunisation against the virus, shall undoubtedly aid to mitigate the impact.

As concerns over the possible negative effect the Omicron variant may have on global economy rose, yields of European sovereigns, previously portraying an improved and thus more stable economic scenario, reversed.

While a downturn in economic data, consequent to measures imposed is plausible, the extent is at this stage unknown. Recent economic data has thus far been benevolent.

Business activity in the Euro economic area, previously appearing to have just past the peak rate of growth, headed higher in November amid an increased demand for services, which masked the second-softest increase in manufacturing production since the recovery began in July 2020. In November, Eurozone Composite Purchasing Managers Index (PMI) was revised slightly lower to 55.4 from a preliminary estimate of 55.8 and higher than the previous month’s reading of 54.2.

A pick-up in economic activity, owing to a sharper upturn in services, was evident in Europe’s largest economy, Germany. Albeit revised lower, November’s services PMI reading of 52.7 proved higher than that of the previous month. Output continued to be supported by backlogs of work. The rate of job creation remained strong, while inflows of new business marginally decreased due to the uncertainty surrounding the pandemic. Meanwhile, manufacturing PMI was revised slightly lower to 57.4 in November, from 57.8 in October as supply chain issues and resultant input shortages held back growth. November’s manufacturing PMI figure pointed to the slowest growth in factory activity in 10 months.

Eurozone inflation was estimated at 4.9 per cent in November 2021, higher than October’s actual 4.1 per cent and above economist expectations of 4.5 per cent. November’s flash reading is the highest since July 1991, further raising concerns about the ECB’s narrative that recent price spikes are seen as temporary and that the economy requires low borrowing costs. The rate of inflation sits well above the European Central Bank (ECB) target of 2.0 per cent. Month-on-month, inflation increased by 0.5 per cent, preliminary estimates showed.

European sovereign yields, previously supported by an improvement in economic activity and as the ECB President Christine Lagarde failed to push back against hawkish market bets, reversed in November. A risk-off mode due to; increased uncertainty stemming from a resurgence in coronavirus infections and eventual re-imposition of mitigation measures, and expectations that the ECB will take longer than most central banks to normalize monetary policy, drove yields of European sovereigns, lower, halting the uptick. Yield of the 10-year German Bund, closed the month 24bps lower at -0.35 per cent from -0.11 per cent at the end of October. Bond yields of sovereigns within the bloc’s periphery – those which offer a premium over Germany’s negative yielding debt, dropped at somewhat similar, yet lower pace.

Earlier in the month, ECB policymakers acknowledged that a decline in inflation, hovering close to, but below, 5 per cent may be slower than earlier anticipated, adding that the central bank must not overreact by removing stimulus too quickly.

The largest drop in sovereign yields since early March came towards the end of the month as investors sought safety after a newly-identified coronavirus variant, emerging from southern Africa and possibly resistant  to currently available vaccinations, was spreading. To mitigate the spread, several European countries announced a temporary ban on flights from South Africa and neighbouring countries. Resultant to rising concerns surrounding the possible economic impact, money market participants no longer expect an increase in the ECB deposit rate in 2022, even though the Eurozone’s inflation rate has risen to a record high in November.

The CC Euro High Income Bond Fund dropped by 0.57 per cent in November, in line with the widening in spreads within European high yield corporate credit. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories.

Albeit possibly witnessing some volatility, consequent to uncertainty surrounding the coronavirus pandemic, particularly due to the newly discovered Omicron variant, 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)*

14.48%

*View Performance History below
Inception Date: 24 Apr 2020
ISIN: MT7000026472
Bloomberg Ticker: CCHIBFE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.12%
Exit Charge: None
Distribution Yield (%): 3.00
Underlying Yield (%): 4.24
Distribution: 31/03 and 30/09
Total Net Assets: €45.61 mn
Month end NAV in EUR: 88.34
Number of Holdings: 77
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 26.1

Performance To Date (EUR)

Top 10 Holdings

iShares Euro HY Corp
5.8%
iShares Fallen Angels HY Corp
3.4%
4.875% CPI Property Group perp
2.5%
4% Chemours Co 2026
2.2%
5% Nidda Bondco GMBH 2025
2.2%
2.5% Hapag Lloyd AG 2028
2.0%
5.25% HSBC Holdings plc perp
2.0%
4.625% Volkswagen perp
2.0%
4.25% Encore Capital Group 2028
2.0%
5% Tendam Brands SAU 2024
2.0%

Major Sector Breakdown*

Financials
13.6%
Asset 7
Communications
10.7%
Funds
10.0%
Industrials
8.2%
Consumer Discretionary
6.0%
Consumer Discretionary
5.7%
*excluding exposures to CIS

Maturity Buckets*

67.0%
0-5 Years
11.3%
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*

United States
13.0%
Germany
11.3%
France
7.2%
Spain
6.8%
Czech Republic
4.5%
Italy
4.0%
United Kingdom
4.0%
Netherlands
3.8%
Malta
3.6%
Brazil
3.1%
*including exposures to CIS

Asset Allocation

Cash 9.2%
Bonds 80.8%
CIS/ETFs 10.0%

Performance History (EUR)*

YTD

0.98%

2020*

13.36%

2019

-%

2018

-%

2017

-%

Annualised Since Inception*

8.80%

* The Distributor Share Class (Class F) was launched on the 24th April 2020.

Currency Allocation

Euro 84.3%
USD 15.7%
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 Distributor 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 Distributor 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 2021

    The coronavirus pandemic have, since first detected in the Capital of Hubei Province – Wuhan, dominated news headlines. It caught the world by surprise, altering life patterns and dictating economies path forward. Financial markets inevitably felt the pinch.

    Efforts by central banks in the form of stimulus support, and governments, through mitigation measures to reduce the spread, vaccine coverage, and fiscal support, improved the scenario both from a health and economic perspective. However, in recent weeks a surge in coronavirus cases, possibly due to a seasonal effect which may probably contribute to a bigger outbreak, was witnessed. In fact, Europe is experiencing a surge in coronavirus infections, to levels not seen in months.

    A new mutation: the Omicron variant, emerging from southern Africa, augmented fears that countries, owing to the variants’ unprecedented set of genetic mutations may once more be engulfed with infections. Conclusive findings on such emerging mutation, due to its relatively recent discovery, is thus far unavailable. That said, the repercussions, both from a health and economic viewpoint, the latter dependant on the ensuing course of action by governments to mitigate the spread and to ultimately avoid overwhelming hospitals, remain unclear. Vaccination programmes and distribution of boosters – a third dose which shall further increase immunisation against the virus, shall undoubtedly aid to mitigate the impact.

    As concerns over the possible negative effect the Omicron variant may have on global economy rose, yields of European sovereigns, previously portraying an improved and thus more stable economic scenario, reversed.

    While a downturn in economic data, consequent to measures imposed is plausible, the extent is at this stage unknown. Recent economic data has thus far been benevolent.

    Business activity in the Euro economic area, previously appearing to have just past the peak rate of growth, headed higher in November amid an increased demand for services, which masked the second-softest increase in manufacturing production since the recovery began in July 2020. In November, Eurozone Composite Purchasing Managers Index (PMI) was revised slightly lower to 55.4 from a preliminary estimate of 55.8 and higher than the previous month’s reading of 54.2.

    A pick-up in economic activity, owing to a sharper upturn in services, was evident in Europe’s largest economy, Germany. Albeit revised lower, November’s services PMI reading of 52.7 proved higher than that of the previous month. Output continued to be supported by backlogs of work. The rate of job creation remained strong, while inflows of new business marginally decreased due to the uncertainty surrounding the pandemic. Meanwhile, manufacturing PMI was revised slightly lower to 57.4 in November, from 57.8 in October as supply chain issues and resultant input shortages held back growth. November’s manufacturing PMI figure pointed to the slowest growth in factory activity in 10 months.

    Eurozone inflation was estimated at 4.9 per cent in November 2021, higher than October’s actual 4.1 per cent and above economist expectations of 4.5 per cent. November’s flash reading is the highest since July 1991, further raising concerns about the ECB’s narrative that recent price spikes are seen as temporary and that the economy requires low borrowing costs. The rate of inflation sits well above the European Central Bank (ECB) target of 2.0 per cent. Month-on-month, inflation increased by 0.5 per cent, preliminary estimates showed.

    European sovereign yields, previously supported by an improvement in economic activity and as the ECB President Christine Lagarde failed to push back against hawkish market bets, reversed in November. A risk-off mode due to; increased uncertainty stemming from a resurgence in coronavirus infections and eventual re-imposition of mitigation measures, and expectations that the ECB will take longer than most central banks to normalize monetary policy, drove yields of European sovereigns, lower, halting the uptick. Yield of the 10-year German Bund, closed the month 24bps lower at -0.35 per cent from -0.11 per cent at the end of October. Bond yields of sovereigns within the bloc’s periphery – those which offer a premium over Germany’s negative yielding debt, dropped at somewhat similar, yet lower pace.

    Earlier in the month, ECB policymakers acknowledged that a decline in inflation, hovering close to, but below, 5 per cent may be slower than earlier anticipated, adding that the central bank must not overreact by removing stimulus too quickly.

    The largest drop in sovereign yields since early March came towards the end of the month as investors sought safety after a newly-identified coronavirus variant, emerging from southern Africa and possibly resistant  to currently available vaccinations, was spreading. To mitigate the spread, several European countries announced a temporary ban on flights from South Africa and neighbouring countries. Resultant to rising concerns surrounding the possible economic impact, money market participants no longer expect an increase in the ECB deposit rate in 2022, even though the Eurozone’s inflation rate has risen to a record high in November.

    The CC Euro High Income Bond Fund dropped by 0.57 per cent in November, in line with the widening in spreads within European high yield corporate credit. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories.

    Albeit possibly witnessing some volatility, consequent to uncertainty surrounding the coronavirus pandemic, particularly due to the newly discovered Omicron variant, 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)*

    14.48%

    *View Performance History below
    Inception Date: 24 Apr 2020
    ISIN: MT7000026472
    Bloomberg Ticker: CCHIBFE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.12%
    Exit Charge: None
    Distribution Yield (%): 3.00
    Underlying Yield (%): 4.24
    Distribution: 31/03 and 30/09
    Total Net Assets: €45.61 mn
    Month end NAV in EUR: 88.34
    Number of Holdings: 77
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 26.1

    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
    5.8%
    iShares Fallen Angels HY Corp
    3.4%
    4.875% CPI Property Group perp
    2.5%
    4% Chemours Co 2026
    2.2%
    5% Nidda Bondco GMBH 2025
    2.2%
    2.5% Hapag Lloyd AG 2028
    2.0%
    5.25% HSBC Holdings plc perp
    2.0%
    4.625% Volkswagen perp
    2.0%
    4.25% Encore Capital Group 2028
    2.0%
    5% Tendam Brands SAU 2024
    2.0%

    Top Holdings by Country*

    United States
    13.0%
    Germany
    11.3%
    France
    7.2%
    Spain
    6.8%
    Czech Republic
    4.5%
    Italy
    4.0%
    United Kingdom
    4.0%
    Netherlands
    3.8%
    Malta
    3.6%
    Brazil
    3.1%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    13.6%
    Asset 7
    Communications
    10.7%
    Funds
    10.0%
    Industrials
    8.2%
    Consumer Discretionary
    6.0%
    Consumer Discretionary
    5.7%
    *excluding exposures to CIS

    Asset Allocation

    Cash 9.2%
    Bonds 80.8%
    CIS/ETFs 10.0%

    Maturity Buckets*

    67.0%
    0-5 Years
    11.3%
    5-10 Years
    2.5%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    0.98%

    2020*

    13.36%

    2019

    -%

    2018

    -%

    2017

    -%

    Annualised Since Inception*

    8.80%

    * The Distributor Share Class (Class F) was launched on the 24th April 2020.

    Credit Ratings*

    Average Credit Rating: BB-
    *excluding exposures to CIS

    Currency Allocation

    Euro 84.3%
    USD 15.7%
    Other 0.0%

    Risk Statistics

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