Investment Objectives

The CC Malta Government Bond Fund aims to maximise the total level of return for investors through investment, primarily, in debt securities and money market instruments issued or guaranteed by the Government of Malta.

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

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.

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.

In the month of November, the CC Malta Government Bond Fund registered a gain of 0.23 per cent, marginally underperforming the MSE Malta Government Stocks Total Return Index which rose by 0.29 per cent.

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)*

6.58%

*View Performance History below
Inception Date: 21 Apr 2017
ISIN: MT7000017992
Bloomberg Ticker: CCMGBFA MV
Entry Charge: Up to 2.5%
Total Expense Ratio: 1.00%
Exit Charge: None
Distribution Yield (%): N/A
Underlying Yield (%): 2.06
Distribution: N/A
Total Net Assets: €37.34 mn
Month end NAV in EUR: 106.58
Number of Holdings: 36
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 50.8

Performance To Date (EUR)

Top 10 Holdings

1% MGS 2031
9.8%
4.5% MGS 2028
9.0%
5.25% MGS 2030
6.7%
4.45% MGS 2032
6.0%
5.2% MGS 2031
3.8%
5.1% MGS 2029
3.4%
4.1% MGS 2034
3.3%
2.3% MGS 2029
3.1%
4.3% MGS 2033
3.0%
2.5% MGS 2036
2.8%
Data for major sector breakdown is not available for this fund.

Maturity Buckets*

6.5%
0-5 Years
42.4%
5-10 Years
26.1%
10 Years+
*based on the Next Call Date
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
66.2%
France
2.7%
Portugal
2.7%
Italy
1.7%
Spain
1.3%
Hungary
0.9%
Slovenia
0.8%
Poland
0.8%
Finland
0.4%
Belgium
0.1%
*including exposures to CIS and Cash

Asset Allocation

Cash 22.3%
Bonds 75.0%
CIS/ETFs 2.7%

Performance History (EUR)*

YTD

-3.24%

2020

1.31%

2019

8.98%

1-month

0.23%

3-month

-0.70%

Annualised Since Inception*

1.39%

*The Accumulator Share Class (Class A) was launched on 21 April 2017

Currency Allocation

Euro 99.2%
Other 0.8%
Data for risk statistics is not available for this fund.

Interested in this product?

  • Investment Objectives

    The CC Malta Government Bond Fund aims to maximise the total level of return for investors through investment, primarily, in debt securities and money market instruments issued or guaranteed by the Government of Malta.

  • 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

    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.

    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.

    In the month of November, the CC Malta Government Bond Fund registered a gain of 0.23 per cent, marginally underperforming the MSE Malta Government Stocks Total Return Index which rose by 0.29 per cent.

    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)*

    6.58%

    *View Performance History below
    Inception Date: 21 Apr 2017
    ISIN: MT7000017992
    Bloomberg Ticker: CCMGBFA MV
    Entry Charge: Up to 2.5%
    Total Expense Ratio: 1.00%
    Exit Charge: None
    Distribution Yield (%): N/A
    Underlying Yield (%): 2.06
    Distribution: N/A
    Total Net Assets: €37.34 mn
    Month end NAV in EUR: 106.58
    Number of Holdings: 36
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 50.8

    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
    9.8%
    4.5% MGS 2028
    9.0%
    5.25% MGS 2030
    6.7%
    4.45% MGS 2032
    6.0%
    5.2% MGS 2031
    3.8%
    5.1% MGS 2029
    3.4%
    4.1% MGS 2034
    3.3%
    2.3% MGS 2029
    3.1%
    4.3% MGS 2033
    3.0%
    2.5% MGS 2036
    2.8%

    Top Holdings by Country*

    Malta
    66.2%
    France
    2.7%
    Portugal
    2.7%
    Italy
    1.7%
    Spain
    1.3%
    Hungary
    0.9%
    Slovenia
    0.8%
    Poland
    0.8%
    Finland
    0.4%
    Belgium
    0.1%
    *including exposures to CIS and Cash

    Asset Allocation

    Cash 22.3%
    Bonds 75.0%
    CIS/ETFs 2.7%

    Maturity Buckets*

    6.5%
    0-5 Years
    42.4%
    5-10 Years
    26.1%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -3.24%

    2020

    1.31%

    2019

    8.98%

    1-month

    0.23%

    3-month

    -0.70%

    Annualised Since Inception*

    1.39%

    *The Accumulator Share Class (Class A) was launched on 21 April 2017

    Currency Allocation

    Euro 99.2%
    Other 0.8%
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