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

August 2020

Policymakers hoped that the Covid-19 pandemic would recede during the hotter summer months, instigating policymakers to gradually lift restrictions at the start of summer season in the northern hemisphere. However, even though record temperatures were registered in August, the virus has unfortunately continued to spread. There have now been over 25 million cases globally, up from 10 million at the start of July.

Even though the number of new daily cases in the US has started to decline, some regions, including Europe, are now facing a second wave where the daily increase in cases is back close to the levels seen at the height of the crisis in March and April. So far, better testing and tracing capacity has allowed European policymakers to treat this second wave with targeted measures, including travel restrictions or the requirement to wear a face mask in public, instead of national lockdowns. This was done in an effort to better balance public health policies with economic policies.

Looking at economic data points, Europe continued to show signs of recovery despite a second wave, as economic activity continued to build on July’s initial expansion. Looking at Europe’s largest economy, Germany, PMIs indicated an expansion during the month of August, with Manufacturing PMI, increasing to 52.2, compared to a consensus estimate of 53.0, and a previous reading of 51.0. Services PMI also registered a solid 52.5 compared to expectations of 50.8, however lower than July’s reading of 55.6. Unemployment remained steady at 6.4%.

Moreover, consumer confidence remained weak, with leading indicators such as the Eurozone Consumer Confidence improving marginally to -14.7 from -15.0 in the previous month. Meanwhile, the Euro Area’s Manufacturing PMI indicated an expansion to 51.7 compared to 51.8 in the previous month. Euro Area’s services PMI remained in expansionary territory, albeit at a slower pace, at 50.5 in its latest reading, while unemployment edged upwards to 7.9% from 7.7%. Collectively, despite some positive signs, indicators are suggesting that we are still at the very beginning of a fragile economic recovery.

Looking at sovereign yields on the 10-year German Bund, Europe’s mostly sought benchmark closed wider than the previous month at -0.398 compared to -0.531 at the end of last month, with most of the tightening occurring during the last week of August. The yield curve steepened, with a larger movement in the longer end of the curve largely attributed to more confidence about the speed of economic recovery. These moves were also experienced in European peripheral sovereigns.

Within the HY asset space, spreads in August generally tightened, following the risk on approach by the markets which have interpreted a much more swift economic recovery. That said, markets continued to hang-on to the supportive fiscal and monetary support measures in place, and possibly more easing, predominately in Europe given its fragility.

The CC Euro High Income fund, bounced higher by 1.6 percent, in line with the upward market moves. On a year-to-date basis, the fund is slightly underperforming on a net basis due to the lower beta of the portfolio; albeit the volatility of the fund has been markedly lower than average. Throughout the month, the Manager continued adjust the portfolio into attractive undervalued credit stories, primary within the AT1 space. Moving 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)

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

8.90%

*View Performance History below
Inception Date: 24 Apr 2020
ISIN: MT7000026472
Bloomberg Ticker: CCHIBFE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.40%
Exit Charge: None
Distribution Yield (%): 3.50
Underlying Yield (%): 4.51
Distribution: 31/03 and 30/09
Total Net Assets: € 41.13 m
Month end NAV in EUR: 87.63
Number of Holdings: 96
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 24.4

Performance To Date (EUR)

Top 10 Holdings

iShares Euro Corp Large Cap
3.9%
iShares Euro HY Corp
3.0%
2.25% Portugal Treasury 2034
2.5%
5% Nidda BondCo 2025
2.5%
6.5% CMA CGM 2022
2.4%
4% Chemours Co. 2026
2.4%
6% Loxam SAS 2025
2.1%
4.625% Cemex 2024
2.0%
7.5% Garfunkelux 2022
1.9%
5.25% HSBC 2169
1.8%

Major Sector Breakdown*

Financials
21.1%
Consumer Discretionary
13.1%
Consumer Staples
11.5%
Asset 7
Communications
10.5%
Materials
8.3%
Industrials
7.1%
*excluding exposures to CIS

Maturity Buckets*

59.1%
0-5 Years
21.8%
5-10 Years
3.9%
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
14.1%
Malta
12.3%
Germany
11.0%
Brazil
7.0%
USA
5.7%
UK
4.8%
Switzerland
4.0%
Spain
3.8%
Mexico
3.2%
Ireland
3.0%
*including exposures to CIS

Asset Allocation

Cash 6.2%
Bonds 84.8%
CIS/ETFs 9.0%

Performance History (EUR)*

YTD

8.90%

2019

-%

2018

-%

2017

-%

2016

-%

Inception*

8.90%

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

Currency Allocation

Euro 84.9%
USD 15.1%
Other 0.0%

Risk Statistics

Sharpe Ratio
-0.01 (3Y)
0.24 (5Y)
Std. Deviation
8.86% (3Y)
7.26% (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

    August 2020

    Policymakers hoped that the Covid-19 pandemic would recede during the hotter summer months, instigating policymakers to gradually lift restrictions at the start of summer season in the northern hemisphere. However, even though record temperatures were registered in August, the virus has unfortunately continued to spread. There have now been over 25 million cases globally, up from 10 million at the start of July.

    Even though the number of new daily cases in the US has started to decline, some regions, including Europe, are now facing a second wave where the daily increase in cases is back close to the levels seen at the height of the crisis in March and April. So far, better testing and tracing capacity has allowed European policymakers to treat this second wave with targeted measures, including travel restrictions or the requirement to wear a face mask in public, instead of national lockdowns. This was done in an effort to better balance public health policies with economic policies.

    Looking at economic data points, Europe continued to show signs of recovery despite a second wave, as economic activity continued to build on July’s initial expansion. Looking at Europe’s largest economy, Germany, PMIs indicated an expansion during the month of August, with Manufacturing PMI, increasing to 52.2, compared to a consensus estimate of 53.0, and a previous reading of 51.0. Services PMI also registered a solid 52.5 compared to expectations of 50.8, however lower than July’s reading of 55.6. Unemployment remained steady at 6.4%.

    Moreover, consumer confidence remained weak, with leading indicators such as the Eurozone Consumer Confidence improving marginally to -14.7 from -15.0 in the previous month. Meanwhile, the Euro Area’s Manufacturing PMI indicated an expansion to 51.7 compared to 51.8 in the previous month. Euro Area’s services PMI remained in expansionary territory, albeit at a slower pace, at 50.5 in its latest reading, while unemployment edged upwards to 7.9% from 7.7%. Collectively, despite some positive signs, indicators are suggesting that we are still at the very beginning of a fragile economic recovery.

    Looking at sovereign yields on the 10-year German Bund, Europe’s mostly sought benchmark closed wider than the previous month at -0.398 compared to -0.531 at the end of last month, with most of the tightening occurring during the last week of August. The yield curve steepened, with a larger movement in the longer end of the curve largely attributed to more confidence about the speed of economic recovery. These moves were also experienced in European peripheral sovereigns.

    Within the HY asset space, spreads in August generally tightened, following the risk on approach by the markets which have interpreted a much more swift economic recovery. That said, markets continued to hang-on to the supportive fiscal and monetary support measures in place, and possibly more easing, predominately in Europe given its fragility.

    The CC Euro High Income fund, bounced higher by 1.6 percent, in line with the upward market moves. On a year-to-date basis, the fund is slightly underperforming on a net basis due to the lower beta of the portfolio; albeit the volatility of the fund has been markedly lower than average. Throughout the month, the Manager continued adjust the portfolio into attractive undervalued credit stories, primary within the AT1 space. Moving 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)

    ASSET CLASS

    Bonds

    MIN. INITIAL INVESTMENT

    €2500

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    RETURN (SINCE INCEPTION)*

    8.90%

    *View Performance History below
    Inception Date: 24 Apr 2020
    ISIN: MT7000026472
    Bloomberg Ticker: CCHIBFE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.40%
    Exit Charge: None
    Distribution Yield (%): 3.50
    Underlying Yield (%): 4.51
    Distribution: 31/03 and 30/09
    Total Net Assets: € 41.13 m
    Month end NAV in EUR: 87.63
    Number of Holdings: 96
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 24.4

    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
    3.9%
    iShares Euro HY Corp
    3.0%
    2.25% Portugal Treasury 2034
    2.5%
    5% Nidda BondCo 2025
    2.5%
    6.5% CMA CGM 2022
    2.4%
    4% Chemours Co. 2026
    2.4%
    6% Loxam SAS 2025
    2.1%
    4.625% Cemex 2024
    2.0%
    7.5% Garfunkelux 2022
    1.9%
    5.25% HSBC 2169
    1.8%

    Top Holdings by Country*

    France
    14.1%
    Malta
    12.3%
    Germany
    11.0%
    Brazil
    7.0%
    USA
    5.7%
    UK
    4.8%
    Switzerland
    4.0%
    Spain
    3.8%
    Mexico
    3.2%
    Ireland
    3.0%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    21.1%
    Consumer Discretionary
    13.1%
    Consumer Staples
    11.5%
    Asset 7
    Communications
    10.5%
    Materials
    8.3%
    Industrials
    7.1%
    *excluding exposures to CIS

    Asset Allocation

    Cash 6.2%
    Bonds 84.8%
    CIS/ETFs 9.0%

    Maturity Buckets*

    59.1%
    0-5 Years
    21.8%
    5-10 Years
    3.9%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    8.90%

    2019

    -%

    2018

    -%

    2017

    -%

    2016

    -%

    Inception*

    8.90%

    * 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 84.9%
    USD 15.1%
    Other 0.0%

    Risk Statistics

    Sharpe Ratio
    -0.01 (3Y)
    0.24 (5Y)
    Std. Deviation
    8.86% (3Y)
    7.26% (5Y)
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