Investment Objectives

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.

Investor Profile

A typical investor in the CC Malta Government Bond Fund would be one who is seeking to gain exposure to the local Government Bond Market whilst seeking to accumulate wealth and save over time in a product that re-invests coupons received on a gross basis. Furthermore, investors in the Malta Government Bond Fund are those who are planning to hold on to their investment for the medium-to-long term so as to benefit from the compound interest effect whilst also participating in the interest rate cycle.

Fund Rules

The Investment Manager will invest primarily in a portfolio of debt securities and money market instruments issued or guaranteed by the Government of Malta. The Investment Manager may invest directly in eligible collective investment schemes whose investment objective and policies are consistent with those of the Sub-Fund. The Investment Manager may also invest directly (or indirectly via eligible exchange traded funds and/or eligible collective investment schemes) up to 15% of its assets in “Non-Maltese Assets” as per below:

  • Debt securities and/or money market instruments issued or guaranteed by Governments of EU, EEA and OECD Member States other than Malta, their constituent states or their local authorities; and/or
  • Debt securities and/or money market instruments issued or guaranteed by supranational bodies of EU, EEA and OECD Member States other than Malta, their agencies, associated financial institutions or other associated bodies.
    The Investment Manager will not be targeting debt securities (including, money market instruments, bonds, notes and other debt securities) of any particular duration, coupon or credit rating. The Sub-Fund may also invest in term deposits held with credit institutions regulated in Malta and other EU, EEA and OECD Member States.

For temporary and/or defensive purposes, the Sub-Fund may invest in other short-term debt securities or fixed income instruments, money market funds, cash and cash equivalents. The Sub-Fund may also at any time hold such securities for cash management purposes, pending investment in accordance with its Investment Policy and to meet operating expenses and redemption requests.

In pursuing its Investment Objective and Investment Policy, the Sub-Fund will be subject to the Investment, Borrowing and Leverage Restrictions set out in the Prospectus and the Offering Supplement. Furthermore, this Sub-Fund shall not invest, in the aggregate, more than 10% of its assets in units or shares of other UCITS or other CISs. The Investment Manager may make use of listed and OTC FDIs (including, but not limited to, futures, forwards, options and swaps) linked to bonds, interest rates and currencies for efficient portfolio management,  hedging purposes and the reduction of risk only. The Sub-Fund will not make use of FDIs for investment purposes. The Sub-Fund is not expected to employ any leverage or gearing. Investors may redeem units of UCITS on demand on every Business Day on any day that is not a Saturday or Sunday and not a public or national holiday in Malta. The Sub-Fund may hold cash and cash equivalents on an ancillary basis.

Management Discretion: The Investment Manager has the discretion to buy and sell investments on behalf of the Sub-Fund within the limits of the Objective and Investment Policy.

Commentary

May 2022

Introduction
Market concerns, notably; lingering key macro-economic risks stemming from the war in Ukraine, monetary policy tightening as central banks continue to grapple with inflation, and a zero-tolerance coronavirus policy leading to stringent restrictions in China – threatening demand and sustaining supply-chain related disruptions, have in May continued to pose as a block to a shift in sentiment. A risk-off mode somewhat persisted, with credit market performance proving somewhat mixed.

Market environment and performance
Forward looking indicators, notably PMI data painted a somewhat mixed picture as manufacturing, albeit revised higher from initial estimate of 54.4 to 54.6, maintained its downward trend as new orders fell for the first time since June 2020 while output growth remained sluggish. Services, albeit pointing to the second-fastest expansion since September, edged lower as new business intakes, supported by a renewed increase in new orders from overseas customers, continued to rise.  Owing to a softer service sector expansion amid signs that the post lockdown rebound was losing some strength, the Eurozone Composite PMI fell to a 4-month low of 54.8.

In May, energy and food prices continued to contribute to a rise in annual inflation; a fresh record high at 8.1 per cent, in-line with expectations and marginally higher than the previous month reading of 7.4 per cent. Core inflation, which excludes transitory or temporary price volatility, rose to 3.8 per cent. Month-on-month, inflation increased by 0.8 per cent.

European sovereign yields furthered on the strong upward trajectory witnessed in previous months, heading to the highest in years on expectations of a more aggressive tightening stance by the ECB, aiming to support the currency and taming inflation, in spite of concerns surrounding the Euro area growth outlook, cut to 2.7 per cent this year from the 4.0 per cent predicted earlier in February. Minutes from April’s ECB meeting revealed ECB policymakers’ worries over high inflation and agreement towards a gradual normalisation of monetary policy.

The yield on the 10-year German Bund, closed the month at 1.05 per cent, 12bps higher than the previous month end.  Bond yields of sovereigns within the bloc’s periphery, those which offer a premium over Germany’s negative yielding debt, moved in tandem, albeit some rising at somewhat faster pace. The yield on the benchmark 10-year Treasury closed the month 20bps lower than the previous month end, at 2.74 per cent.

Fund performance
In the month of May, the CC Malta Government Bond Fund registered a loss of 1.14 per cent, outperforming the MSE Malta Government Stocks Total Return Index which dropped 2.08 per cent over the same period.

Market and investment outlook
The Manager’s forward-looking view is to continue to play the duration play depending on market conditions. Should inflationary expectations increase, a lower duration will prove determinant for relative outperformance, as witnessed in the fund’s performance on a year-to-date basis.

A quick introduction to our Malta Government 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

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

-0.29%

*View Performance History below
Inception Date: 21 Apr 2017
ISIN: MT7000017992
Bloomberg Ticker: CCMGBFA MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.02%
Exit Charge: None
Distribution Yield (%): N/A
Underlying Yield (%): 2.27
Distribution: N/A
Total Net Assets: €35.79 mn
Month end NAV in EUR: 99.71
Number of Holdings: 38
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 50.4

Performance To Date (EUR)

Top 10 Holdings

1% MGS 2031
10.2%
4.5% MGS 2028
8.5%
5.25% MGS 2030
7.3%
4.45% MGS 2032
5.5%
5.2% MGS 2031
3.8%
5.1% MGS 2029
3.4%
4.1% MGS 2034
3.0%
2.3% MGS 2029
3.0%
4.65% MGS 2032
2.9%
4.3% MGS 2033
2.7%
Data for major sector breakdown is not available for this fund.

Maturity Buckets*

10.9%
0-5 Years
42.4%
5-10 Years
23.0%
10 Years+
*based on the Next Call Date (also includes cash)
Data for credit ratings is not available for this fund.

Risk & Reward Profile

1
2
3
4
5
6
7
Lower Risk

Potentialy Lower Reward

Higher Risk

Potentialy Higher Reward

Top Holdings by Country*

Malta
65.0%
France
3.2%
Portugal
2.4%
Italy
1.5%
Spain
1.2%
Hungary
0.9%
Poland
0.8%
Slovenia
0.8%
Belgium
0.7%
Ireland
0.7%
*including exposures to CIS

Asset Allocation

Cash 21.1%
Bonds 76.2%
CIS/ETFs 2.6%

Performance History (EUR)*

YTD

-6.64%

2021

-3.04%

2020

1.31%

2019

8.98%

2018

-0.68%

Annualised Since Inception***

-0.06%

* The Accumulator Share Class (Class A) was launched on 21 April 2017.
** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.
*** The Annualised rate is an indication of the average growth of the Fund over one year. The value of the investment and the income yield derived from the investment, if any, may go down as well as up and past performance is not necessarily indicative of future performance, nor a reliable guide to future performance. Hence returns may not be achieved and you may lose all or part of your investment in the Fund. Currency fluctuations may affect the value of investments and any derived income.

Currency Allocation

Euro 99.1%
Other 0.9%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    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.

  • Investor profile

    A typical investor in the CC Malta Government Bond Fund would be one who is seeking to gain exposure to the local Government Bond Market whilst seeking to accumulate wealth and save over time in a product that re-invests coupons received on a gross basis. Furthermore, investors in the Malta Government Bond Fund are those who are planning to hold on to their investment for the medium-to-long term so as to benefit from the compound interest effect whilst also participating in the interest rate cycle.

    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

  • Commentary

    May 2022

    Introduction
    Market concerns, notably; lingering key macro-economic risks stemming from the war in Ukraine, monetary policy tightening as central banks continue to grapple with inflation, and a zero-tolerance coronavirus policy leading to stringent restrictions in China – threatening demand and sustaining supply-chain related disruptions, have in May continued to pose as a block to a shift in sentiment. A risk-off mode somewhat persisted, with credit market performance proving somewhat mixed.

    Market environment and performance
    Forward looking indicators, notably PMI data painted a somewhat mixed picture as manufacturing, albeit revised higher from initial estimate of 54.4 to 54.6, maintained its downward trend as new orders fell for the first time since June 2020 while output growth remained sluggish. Services, albeit pointing to the second-fastest expansion since September, edged lower as new business intakes, supported by a renewed increase in new orders from overseas customers, continued to rise.  Owing to a softer service sector expansion amid signs that the post lockdown rebound was losing some strength, the Eurozone Composite PMI fell to a 4-month low of 54.8.

    In May, energy and food prices continued to contribute to a rise in annual inflation; a fresh record high at 8.1 per cent, in-line with expectations and marginally higher than the previous month reading of 7.4 per cent. Core inflation, which excludes transitory or temporary price volatility, rose to 3.8 per cent. Month-on-month, inflation increased by 0.8 per cent.

    European sovereign yields furthered on the strong upward trajectory witnessed in previous months, heading to the highest in years on expectations of a more aggressive tightening stance by the ECB, aiming to support the currency and taming inflation, in spite of concerns surrounding the Euro area growth outlook, cut to 2.7 per cent this year from the 4.0 per cent predicted earlier in February. Minutes from April’s ECB meeting revealed ECB policymakers’ worries over high inflation and agreement towards a gradual normalisation of monetary policy.

    The yield on the 10-year German Bund, closed the month at 1.05 per cent, 12bps higher than the previous month end.  Bond yields of sovereigns within the bloc’s periphery, those which offer a premium over Germany’s negative yielding debt, moved in tandem, albeit some rising at somewhat faster pace. The yield on the benchmark 10-year Treasury closed the month 20bps lower than the previous month end, at 2.74 per cent.

    Fund performance
    In the month of May, the CC Malta Government Bond Fund registered a loss of 1.14 per cent, outperforming the MSE Malta Government Stocks Total Return Index which dropped 2.08 per cent over the same period.

    Market and investment outlook
    The Manager’s forward-looking view is to continue to play the duration play depending on market conditions. Should inflationary expectations increase, a lower duration will prove determinant for relative outperformance, as witnessed in the fund’s performance on a year-to-date basis.

  • 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)*

    -0.29%

    *View Performance History below
    Inception Date: 21 Apr 2017
    ISIN: MT7000017992
    Bloomberg Ticker: CCMGBFA MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.02%
    Exit Charge: None
    Distribution Yield (%): N/A
    Underlying Yield (%): 2.27
    Distribution: N/A
    Total Net Assets: €35.79 mn
    Month end NAV in EUR: 99.71
    Number of Holdings: 38
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 50.4

    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

    1% MGS 2031
    10.2%
    4.5% MGS 2028
    8.5%
    5.25% MGS 2030
    7.3%
    4.45% MGS 2032
    5.5%
    5.2% MGS 2031
    3.8%
    5.1% MGS 2029
    3.4%
    4.1% MGS 2034
    3.0%
    2.3% MGS 2029
    3.0%
    4.65% MGS 2032
    2.9%
    4.3% MGS 2033
    2.7%

    Top Holdings by Country*

    Malta
    65.0%
    France
    3.2%
    Portugal
    2.4%
    Italy
    1.5%
    Spain
    1.2%
    Hungary
    0.9%
    Poland
    0.8%
    Slovenia
    0.8%
    Belgium
    0.7%
    Ireland
    0.7%
    *including exposures to CIS

    Asset Allocation

    Cash 21.1%
    Bonds 76.2%
    CIS/ETFs 2.6%

    Maturity Buckets*

    10.9%
    0-5 Years
    42.4%
    5-10 Years
    23.0%
    10 Years+
    *based on the Next Call Date (also includes cash)

    Performance History (EUR)*

    YTD

    -6.64%

    2021

    -3.04%

    2020

    1.31%

    2019

    8.98%

    2018

    -0.68%

    Annualised Since Inception***

    -0.06%

    * The Accumulator Share Class (Class A) was launched on 21 April 2017.
    ** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.
    *** The Annualised rate is an indication of the average growth of the Fund over one year. The value of the investment and the income yield derived from the investment, if any, may go down as well as up and past performance is not necessarily indicative of future performance, nor a reliable guide to future performance. Hence returns may not be achieved and you may lose all or part of your investment in the Fund. Currency fluctuations may affect the value of investments and any derived income.

    Currency Allocation

    Euro 99.1%
    Other 0.9%
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