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

August 2022

Introduction
Economic data prints have in August continued to illustrate somewhat of a mixed landscape as the labour market remained strong amid worsening macro conditions. Forward looking indicators, namely Purchasing Manager Index (PMI) readings showed activity losing momentum as demand waned while inflation remained at notable highs.

The recently witnessed upward momentum across financial markets, floundered. Central Banks’ commitment to bring inflation under control despite such inherent risks to the growth outlook, observed in Jerome Powell’s speech at the annual Jackson Hole Economic Symposium, drove markets lower rattling bond markets. Consequent to mounting fears of a worsening growth outlook and such shift in rhetoric, a shift across the US treasury yield curve was noted. Germany’s – Europe’s benchmark yield – followed suit.

Germany’s 10-year yield ended the month at 1.54%, 72bps higher than the previous month-end close. Bond yields of sovereigns within the bloc’s periphery, those which offer a premium over Germany’s debt, moved in tandem, albeit rising at somewhat faster pace.

Market environment and performance
Forward looking indicators, namely PMIs have continued to paint a somewhat gloomy picture as manufacturing and services, noted a sharp deterioration in the rate of growth, pointing to a second successive contraction in activity. In August, manufacturing (reading 49.6) shrank fell at a similar pace to that seen in July, which was the strongest since May 2020. Output fell at a similar pace to that seen in July, which was the strongest since May 2020, while new orders declined sharply once again. Weak demand conditions were a major drag on goods producers in August, reflecting deteriorating purchasing power across Europe amid high inflation. Services, for the first time this year revolved in contractionary territory, as August’s reading came in at 49.8, lower than a preliminary of 50.2. New orders fell the most since February 2021 due to demand weakening and growth in employment waning.

Pressured by elevated energy costs and the continued acceleration in food prices and services, inflationary pressures persisted. In August, annual inflation rate increased to a new record high of 9.1%. On a monthly-on-month basis, the Consumer Price Index (CPI) in the Euro Area increased 0.50% over the previous month, preliminary estimates showed.  Core inflation, which excludes transitory or temporary price volatility, increased to a record high of 4.3% from 4% in the previous month.

Fears of worsening economic conditions in Europe facing notably high inflation and an energy crisis looming, reflected on currency markets, pushing the Euro to slip below parity against the US dollar.

Fund performance
In the month of August, the CC Malta Government Bond Fund registered a loss of 0.99%, outperforming the MSE Malta Government Stocks Total Return Index which fell 1.43% 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 CIO at CC Finance Group. He has extensive experience in research and portfolio management with various institutions. Today he is responsible of the group’s investment strategy and manages credit and multi-asset strategies.

PRICE (EUR)

ASSET CLASS

Bonds

MIN. INITIAL INVESTMENT

€2500

FUND TYPE

UCITS

BASE CURRENCY

EUR

RETURN (SINCE INCEPTION)*

-5.34%

*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 (%): 2.33
Distribution: N/A
Total Net Assets: €34.70 mn
Month end NAV in EUR: 95.66
Number of Holdings: 37
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 49.1

Performance To Date (EUR)

Top 10 Holdings

1% MGS 2031
8.9%
4.5% MGS 2028
8.7%
5.25% MGS 2030
7.2%
4.45% MGS 2032
5.3%
5.2% MGS 2031
3.6%
5.1% MGS 2029
3.4%
4.3% MGS 2033
3.3%
4.1% MGS 2034
3.0%
2.3% MGS 2029
2.9%
4.65% MGS 2032
2.7%
Data for major sector breakdown is not available for this fund.

Maturity Buckets*

10.6%
0-5 Years
49.9%
5-10 Years
14.2%
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
62.8%
France
3.5%
Portugal
2.4%
Italy
1.5%
Spain
1.1%
Poland
0.9%
Hungary
0.9%
Netherlands
0.8%
Slovenia
0.8%
Belgium
0.7%
*including exposures to CIS

Asset Allocation

Cash 22.6%
Bonds 74.7%
CIS/ETFs 2.7%

Performance History (EUR)*

YTD

-10.43%

2021

-3.04%

2020

1.31%

2019

8.98%

2018

-0.68%

Annualised Since Inception***

-0.82%

* 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 99.0%
Other 1.0%
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

    August 2022

    Introduction
    Economic data prints have in August continued to illustrate somewhat of a mixed landscape as the labour market remained strong amid worsening macro conditions. Forward looking indicators, namely Purchasing Manager Index (PMI) readings showed activity losing momentum as demand waned while inflation remained at notable highs.

    The recently witnessed upward momentum across financial markets, floundered. Central Banks’ commitment to bring inflation under control despite such inherent risks to the growth outlook, observed in Jerome Powell’s speech at the annual Jackson Hole Economic Symposium, drove markets lower rattling bond markets. Consequent to mounting fears of a worsening growth outlook and such shift in rhetoric, a shift across the US treasury yield curve was noted. Germany’s – Europe’s benchmark yield – followed suit.

    Germany’s 10-year yield ended the month at 1.54%, 72bps higher than the previous month-end close. Bond yields of sovereigns within the bloc’s periphery, those which offer a premium over Germany’s debt, moved in tandem, albeit rising at somewhat faster pace.

    Market environment and performance
    Forward looking indicators, namely PMIs have continued to paint a somewhat gloomy picture as manufacturing and services, noted a sharp deterioration in the rate of growth, pointing to a second successive contraction in activity. In August, manufacturing (reading 49.6) shrank fell at a similar pace to that seen in July, which was the strongest since May 2020. Output fell at a similar pace to that seen in July, which was the strongest since May 2020, while new orders declined sharply once again. Weak demand conditions were a major drag on goods producers in August, reflecting deteriorating purchasing power across Europe amid high inflation. Services, for the first time this year revolved in contractionary territory, as August’s reading came in at 49.8, lower than a preliminary of 50.2. New orders fell the most since February 2021 due to demand weakening and growth in employment waning.

    Pressured by elevated energy costs and the continued acceleration in food prices and services, inflationary pressures persisted. In August, annual inflation rate increased to a new record high of 9.1%. On a monthly-on-month basis, the Consumer Price Index (CPI) in the Euro Area increased 0.50% over the previous month, preliminary estimates showed.  Core inflation, which excludes transitory or temporary price volatility, increased to a record high of 4.3% from 4% in the previous month.

    Fears of worsening economic conditions in Europe facing notably high inflation and an energy crisis looming, reflected on currency markets, pushing the Euro to slip below parity against the US dollar.

    Fund performance
    In the month of August, the CC Malta Government Bond Fund registered a loss of 0.99%, outperforming the MSE Malta Government Stocks Total Return Index which fell 1.43% 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 CIO at CC Finance Group. He has extensive experience in research and portfolio management with various institutions. Today he is responsible of the group’s investment strategy and manages credit and multi-asset strategies.

    PRICE (EUR)

    ASSET CLASS

    Bonds

    MIN. INITIAL INVESTMENT

    €2500

    FUND TYPE

    UCITS

    BASE CURRENCY

    EUR

    RETURN (SINCE INCEPTION)*

    -5.34%

    *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 (%): 2.33
    Distribution: N/A
    Total Net Assets: €34.70 mn
    Month end NAV in EUR: 95.66
    Number of Holdings: 37
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 49.1

    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
    8.9%
    4.5% MGS 2028
    8.7%
    5.25% MGS 2030
    7.2%
    4.45% MGS 2032
    5.3%
    5.2% MGS 2031
    3.6%
    5.1% MGS 2029
    3.4%
    4.3% MGS 2033
    3.3%
    4.1% MGS 2034
    3.0%
    2.3% MGS 2029
    2.9%
    4.65% MGS 2032
    2.7%

    Top Holdings by Country*

    Malta
    62.8%
    France
    3.5%
    Portugal
    2.4%
    Italy
    1.5%
    Spain
    1.1%
    Poland
    0.9%
    Hungary
    0.9%
    Netherlands
    0.8%
    Slovenia
    0.8%
    Belgium
    0.7%
    *including exposures to CIS

    Asset Allocation

    Cash 22.6%
    Bonds 74.7%
    CIS/ETFs 2.7%

    Maturity Buckets*

    10.6%
    0-5 Years
    49.9%
    5-10 Years
    14.2%
    10 Years+
    *based on the Next Call Date (also includes cash)

    Performance History (EUR)*

    YTD

    -10.43%

    2021

    -3.04%

    2020

    1.31%

    2019

    8.98%

    2018

    -0.68%

    Annualised Since Inception***

    -0.82%

    * 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 99.0%
    Other 1.0%
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