Malta Government Bond Fund

The Fund aims to maximise the total level of return for investors through investment, primarily, in debt securities and money market instruments issued by the Government of Malta. The Investment Manager may also invest directly or indirectly via eligible ETFs and/or eligible CISs) up to 15% of its assets in “Non-Maltese Assets” in debt securities and/or money market instruments issued or guaranteed by Governments of EU, EEA and OECD Member States other than Malta. The Investment Manager will not be targeting debt securities of any particular duration, coupon or credit rating.

The Fund is actively managed, not managed by reference to any index.

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

November 2025

Introduction

Malta’s economy expanded 3.0% year-over-year in the third quarter of 2025, following 2.8% growth in Q2 and remaining near its slowest pace in over two years. Household consumption rose 3.2% (from 3.1% in Q2), supported by increased spending on restaurants and accommodation, transport services, and information and communication activities. Net trade added 1.5% to GDP, with exports rising 3.9% while imports grew at a slower 3.1%.

Malta’s annual inflation rate edged up to 2.5% in October 2025, following a six-month low of 2.4% in the previous month. Prices increased at a faster pace for housing and utilities, transport, recreation and culture, restaurants and hotels, and miscellaneous goods and services.

Market environment and performance

In the euro area, Business activity continued to strengthen through the year, with leading composite PMI indicators pointing to solid expansion across Q3 and into Q4. The HCOB Eurozone Composite PMI came in at 52.4 in November 2025, just below October’s 52.5 and broadly in line with market expectations. The reading indicates another solid monthly increase in business activity, marking one of the strongest expansions in the past two and a half years. Growth continued to be driven by the services sector, which posted its fastest rise in output in 18 months, while manufacturing activity expanded only marginally.

Consumer price inflation held at 2.1% in October 2025, down slightly from 2.2% in September, staying close to the European Central Bank’s 2% target.

Fund performance

The CC Malta Government Bond Fund saw a 0.18% loss in the month of November.

Market and investment outlook

In November, European sovereign bonds, France being the exception, saw a brief widening as investors awaited clearer guidance from the ECB, with markets still expecting interest rates to remain unchanged through 2026. Looking ahead, the trajectory of European yields will be shaped primarily by economic developments and policy decisions, particularly from the Federal Reserve, whose anticipated rate cuts may influence European sovereign markets given their close correlation.

From a macro perspective, Malta’s economy is expected to remain resilient through 2025, supported by low inflation, recently introduced tax cuts, and rising tourist arrivals – factors that should continue to bolster domestic demand and overall growth.

At the fund level, we will continue to adjust duration as conditions evolve and maintain exposure to European sovereigns, utilizing the permitted 15% allocation.