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

January 2021

Consequent to the unprecedented coronavirus pandemic which infected over a 100 million people and led to 2.2 million deaths worldwide, 2020 was a year of extraordinary challenges. Despite the efforts made by governments and central banks to mitigate the impact on the economy, through substantial monetary and fiscal stimulus packages, the global economy (as estimated by the International Monetary Fund) contracted by 3.5 per cent.

Corporate credit, hindered at the peak of the pandemic following growing concerns about their ability to service debt, recovered. Credit spreads previously witnessing substantial widening (reaching significant highs of over 1000bps), tightened, with both investment grade and high yield issuers delivering strong positive total returns. U.S. investment grade and EM high yield outperformed its European counterparts.

2021 started on a somewhat positive note as the vaccine rollout was initiated, a catalyst towards normalisation. Nevertheless, investors were concerned as the number of reported coronavirus cases continued to rise, following both the festive period and due to more contagious strains. Consequent to the said increase in coronavirus infections, governments extended and/or intensified measures to mitigate the spread.

In January, manufacturing continued to show resilience, outperforming the service sector – a theme which we’ve been witnessing since the commencement of the pandemic inflicted restrictions. The positive data has been a cornerstone for confidence in the markets. Despite a higher than average savings rate, the trend is now significantly downwards, as businesses and consumers have now better visibility over a return to normality, particularly with a vaccine roll-out underway.

Data has largely reflected the mood within markets and unfolded as expected. In January, Europe’s largest economy; Germany reported better than expected PMI data for both manufacturing – the driver behind a two-sped recovery and services. Germany’s manufacturing PMI was revised slightly higher to 57.1 from a preliminary of 57 but below 58.3 reported in December. The reading pointed to robust growth in factory activity, amid further gains in output and new orders. Albeit revolving within a contractionary territory, services PMI, was revised higher to 46.8 from market estimates of 45.3.

Eurozone’s manufacturing PMI was revised slightly higher to 54.8 in January of 2021 from a preliminary of 54.7 but below 55.2 noted in December. Meanwhile, services PMI of the single currency bloc fell to 45 in January from 46.4 in the previous month, above expectations of 44.5. Business confidence – a metric that evaluates development conditions of the manufacturing sector in the euro area, increased to -0.27 points in January from -0.41 points in December of 2020. Meanwhile, consumer confidence – measuring the level of optimism that consumers have about the economy, was confirmed at -15.5, a 1.7 point decrease from December’s 13.8.

The indicator continued to score well below its long-term average of -11.0.

As the ECB maintained is accommodative stance at the end of 2020, bond yields, particularly of sovereigns within the bloc’s ‘periphery’ – those which offer a premium over Germany’s deeply negative-yielding debt, saw significant declines. The low yielding environment, at levels below the zero per cent mark, was however ‘short-lived’, as coronavirus restrictions continued to weigh on the economic outlook and political turmoil intensified in Italy.

Europe’s mostly sought benchmark; the 10-year German Bund, closed higher than the previous month at -0.52 per cent. Similarly, Italy’s 10-year sovereign yield closed the month 10bps higher at 0.64 per cent.

The CC Euro High Income Bond Fund declined by -0.31 per cent throughout the month, underperforming the broader market, which increased 0.35 per cent throughout the month of January. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the financial, automotive, and healthcare industry.

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)*

13.21%

*View Performance History below
Inception Date: 24 Apr 2020
ISIN: MT7000026472
Bloomberg Ticker: CCHIBFE MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.18%
Exit Charge: None
Distribution Yield (%): 2.00
Underlying Yield (%): 4.41
Distribution: 31/03 and 30/09
Total Net Assets: € 42.03 mn
Month end NAV in EUR: 90.18
Number of Holdings: 83
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 25.4

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
2.6%
5% Nidda BondCo 2025
2.4%
6.5% CMA CGM SA 2022
2.4%
4% Chemours Co. 2026
2.4%
5.25% HSBC Holdings plc 2169
2.3%
6% Loxam SAS 2025
2.2%
4.625% Volkswagen 2169
2.2%
3.5% Eircom Finance 2026
2.0%

Major Sector Breakdown*

Financials
12.3%
Asset 7
Communications
10.9%
Government
6.2%
Consumer Discretionary
5.8%
Industrials
5.1%
Materials
4.9%
*excluding exposures to CIS

Maturity Buckets*

60.4%
0-5 Years
20.3%
5-10 Years
3.2%
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
9.6%
Malta
7.4%
Brazil
5.6%
Spain
4.5%
Italy
4.1%
Turkey
3.5%
Ireland
3.4%
Netherlands
3.2%
Switzerland
1.8%
*including exposures to CIS

Asset Allocation

Cash 7.4%
Bonds 83.8%
CIS/ETFs 8.8%

Performance History (EUR)*

YTD

-0.13%

2020*

13.36%

2019

-%

2018

-%

2017

-%

Annualised Since Inception*

17.56%

* 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

    January 2021

    Consequent to the unprecedented coronavirus pandemic which infected over a 100 million people and led to 2.2 million deaths worldwide, 2020 was a year of extraordinary challenges. Despite the efforts made by governments and central banks to mitigate the impact on the economy, through substantial monetary and fiscal stimulus packages, the global economy (as estimated by the International Monetary Fund) contracted by 3.5 per cent.

    Corporate credit, hindered at the peak of the pandemic following growing concerns about their ability to service debt, recovered. Credit spreads previously witnessing substantial widening (reaching significant highs of over 1000bps), tightened, with both investment grade and high yield issuers delivering strong positive total returns. U.S. investment grade and EM high yield outperformed its European counterparts.

    2021 started on a somewhat positive note as the vaccine rollout was initiated, a catalyst towards normalisation. Nevertheless, investors were concerned as the number of reported coronavirus cases continued to rise, following both the festive period and due to more contagious strains. Consequent to the said increase in coronavirus infections, governments extended and/or intensified measures to mitigate the spread.

    In January, manufacturing continued to show resilience, outperforming the service sector – a theme which we’ve been witnessing since the commencement of the pandemic inflicted restrictions. The positive data has been a cornerstone for confidence in the markets. Despite a higher than average savings rate, the trend is now significantly downwards, as businesses and consumers have now better visibility over a return to normality, particularly with a vaccine roll-out underway.

    Data has largely reflected the mood within markets and unfolded as expected. In January, Europe’s largest economy; Germany reported better than expected PMI data for both manufacturing – the driver behind a two-sped recovery and services. Germany’s manufacturing PMI was revised slightly higher to 57.1 from a preliminary of 57 but below 58.3 reported in December. The reading pointed to robust growth in factory activity, amid further gains in output and new orders. Albeit revolving within a contractionary territory, services PMI, was revised higher to 46.8 from market estimates of 45.3.

    Eurozone’s manufacturing PMI was revised slightly higher to 54.8 in January of 2021 from a preliminary of 54.7 but below 55.2 noted in December. Meanwhile, services PMI of the single currency bloc fell to 45 in January from 46.4 in the previous month, above expectations of 44.5. Business confidence – a metric that evaluates development conditions of the manufacturing sector in the euro area, increased to -0.27 points in January from -0.41 points in December of 2020. Meanwhile, consumer confidence – measuring the level of optimism that consumers have about the economy, was confirmed at -15.5, a 1.7 point decrease from December’s 13.8.

    The indicator continued to score well below its long-term average of -11.0.

    As the ECB maintained is accommodative stance at the end of 2020, bond yields, particularly of sovereigns within the bloc’s ‘periphery’ – those which offer a premium over Germany’s deeply negative-yielding debt, saw significant declines. The low yielding environment, at levels below the zero per cent mark, was however ‘short-lived’, as coronavirus restrictions continued to weigh on the economic outlook and political turmoil intensified in Italy.

    Europe’s mostly sought benchmark; the 10-year German Bund, closed higher than the previous month at -0.52 per cent. Similarly, Italy’s 10-year sovereign yield closed the month 10bps higher at 0.64 per cent.

    The CC Euro High Income Bond Fund declined by -0.31 per cent throughout the month, underperforming the broader market, which increased 0.35 per cent throughout the month of January. Throughout the month the Manager continued to seek pockets of value by looking into attractive credit stories, primarily within the financial, automotive, and healthcare industry.

    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)*

    13.21%

    *View Performance History below
    Inception Date: 24 Apr 2020
    ISIN: MT7000026472
    Bloomberg Ticker: CCHIBFE MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.18%
    Exit Charge: None
    Distribution Yield (%): 2.00
    Underlying Yield (%): 4.41
    Distribution: 31/03 and 30/09
    Total Net Assets: € 42.03 mn
    Month end NAV in EUR: 90.18
    Number of Holdings: 83
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 25.4

    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
    2.6%
    5% Nidda BondCo 2025
    2.4%
    6.5% CMA CGM SA 2022
    2.4%
    4% Chemours Co. 2026
    2.4%
    5.25% HSBC Holdings plc 2169
    2.3%
    6% Loxam SAS 2025
    2.2%
    4.625% Volkswagen 2169
    2.2%
    3.5% Eircom Finance 2026
    2.0%

    Top Holdings by Country*

    Germany
    11.4%
    France
    9.6%
    Malta
    7.4%
    Brazil
    5.6%
    Spain
    4.5%
    Italy
    4.1%
    Turkey
    3.5%
    Ireland
    3.4%
    Netherlands
    3.2%
    Switzerland
    1.8%
    *including exposures to CIS

    Major Sector Breakdown*

    Financials
    12.3%
    Asset 7
    Communications
    10.9%
    Government
    6.2%
    Consumer Discretionary
    5.8%
    Industrials
    5.1%
    Materials
    4.9%
    *excluding exposures to CIS

    Asset Allocation

    Cash 7.4%
    Bonds 83.8%
    CIS/ETFs 8.8%

    Maturity Buckets*

    60.4%
    0-5 Years
    20.3%
    5-10 Years
    3.2%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -0.13%

    2020*

    13.36%

    2019

    -%

    2018

    -%

    2017

    -%

    Annualised Since Inception*

    17.56%

    * 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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