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

December 2022

Introduction

For months, sovereign yields amid the continued hawkishness and thus monetary tightening observed by leading central banks, headed higher. A pause was however witnessed in November. This, as market expectations, revolving around a possible easing in tightening policy measures, was witnessed. In December, a continuation of such previous stance was observed with Government bond yields, once more, heading notably higher and credit spreads widening across global markets.

In the month, Germany’s 10-year yield ended the month, 64bps higher than the previous month closing, at 2.57%. A similar trajectory was largely observed across other European sovereigns which closed the month notably higher compared to previous the month end. Such upward shift proved relatively more upbeat on both Italian and Spanish debt, tightening by 83 and 71bps respectively.

Market environment and performance

Forward looking indicators, namely PMIs continued to paint a somewhat gloomy landscape, noting a deterioration – albeit at a softer pace in both manufacturing and service segments – in the rate of growth. Manufacturing (reading 47.8 v a previous month reading of 47.1) remained in contractionary territory despite inflationary pressures easing and supply chains showing signs of stabilizing. Output fell the least since June while the decline in factory sales was the softest in four months. Services (reading 49.8 v a preliminary estimate of 49.1 and previous month reading of 48.5) showed signs of improvement, albeit pointing to a fifth successive drop.

In December, inflationary pressures continued to show signs of easing, with major economies in the euro Area witnessing a decline in pricing pressures, preliminary estimates showed. Notably, Germany saw headline inflation falling to 8.6 from 9.1%. France too saw inflationary pressures easing, falling to 5.9 from 6.4%, as cost declined for energy and services. Largely, inflation in the Euro area, dropped to 9.2 from 10.1%. Core inflation, which excludes transitory or temporary price volatility, edged higher to 5.2%. Supporting such trajectory was the decline in Producer Prices (PPI) – a forward looking indicator measuring the average change in the price of goods and services sold by manufacturers and producers in the wholesale market – down to 27.1 from 30.5%.

Fund performance

In the month of December, the CC Malta Government Bond Fund registered a loss of 1.50%, in line with the widening observed among sovereign bond yields, underperforming the MSE Malta Government Stocks Total Return Index seeing a loss of 1.03% over the month. For the full year 2022, the fund is down 14.04%, strongly outperforming its benchmark and its peers.

Market and investment outlook

The Manager’s forward-looking view is to continue to play the duration play depending on market conditions.

Indeed, adjusting the portfolio’s duration in line with adjustments in inflationary expectations shall continue to prove crucial 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)*

-8.19%

*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 (%): 2.46
Distribution: N/A
Total Net Assets: €33.34 mn
Month end NAV in EUR: 91.81
Number of Holdings: 37
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 47.8

Performance To Date (EUR)

Top 10 Holdings

1% MGS 2031
9.3%
4.5% MGS 2028
8.2%
5.25% MGS 2030
7.1%
4.45% MGS 2032
5.1%
5.2% MGS 2031
3.4%
5.1% MGS 2029
3.3%
4.3% MGS 2033
3.1%
4.1% MGS 2034
2.9%
2.3% MGS 2029
2.9%
4.65% MGS 2032
2.6%
Data for major sector breakdown is not available for this fund.

Maturity Buckets*

10.8%
0-5 Years
49.9%
5-10 Years
13.6%
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
62.5%
France
3.5%
Portugal
2.3%
Italy
1.4%
Spain
1.1%
Hungary
0.9%
Poland
0.9%
Netherlands
0.8%
Slovenia
0.8%
Belgium
0.7%
*including exposures to CIS

Asset Allocation

Cash 23.1%
Bonds 74.3%
CIS/ETFs 2.6%

Performance History (EUR)*

YTD

-14.04%

2021

-3.04%

2020

1.31%

2019

8.98%

2018

-0.68%

Annualised Since Inception***

-1.49%

* 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%
USD 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

    December 2022

    Introduction

    For months, sovereign yields amid the continued hawkishness and thus monetary tightening observed by leading central banks, headed higher. A pause was however witnessed in November. This, as market expectations, revolving around a possible easing in tightening policy measures, was witnessed. In December, a continuation of such previous stance was observed with Government bond yields, once more, heading notably higher and credit spreads widening across global markets.

    In the month, Germany’s 10-year yield ended the month, 64bps higher than the previous month closing, at 2.57%. A similar trajectory was largely observed across other European sovereigns which closed the month notably higher compared to previous the month end. Such upward shift proved relatively more upbeat on both Italian and Spanish debt, tightening by 83 and 71bps respectively.

    Market environment and performance

    Forward looking indicators, namely PMIs continued to paint a somewhat gloomy landscape, noting a deterioration – albeit at a softer pace in both manufacturing and service segments – in the rate of growth. Manufacturing (reading 47.8 v a previous month reading of 47.1) remained in contractionary territory despite inflationary pressures easing and supply chains showing signs of stabilizing. Output fell the least since June while the decline in factory sales was the softest in four months. Services (reading 49.8 v a preliminary estimate of 49.1 and previous month reading of 48.5) showed signs of improvement, albeit pointing to a fifth successive drop.

    In December, inflationary pressures continued to show signs of easing, with major economies in the euro Area witnessing a decline in pricing pressures, preliminary estimates showed. Notably, Germany saw headline inflation falling to 8.6 from 9.1%. France too saw inflationary pressures easing, falling to 5.9 from 6.4%, as cost declined for energy and services. Largely, inflation in the Euro area, dropped to 9.2 from 10.1%. Core inflation, which excludes transitory or temporary price volatility, edged higher to 5.2%. Supporting such trajectory was the decline in Producer Prices (PPI) – a forward looking indicator measuring the average change in the price of goods and services sold by manufacturers and producers in the wholesale market – down to 27.1 from 30.5%.

    Fund performance

    In the month of December, the CC Malta Government Bond Fund registered a loss of 1.50%, in line with the widening observed among sovereign bond yields, underperforming the MSE Malta Government Stocks Total Return Index seeing a loss of 1.03% over the month. For the full year 2022, the fund is down 14.04%, strongly outperforming its benchmark and its peers.

    Market and investment outlook

    The Manager’s forward-looking view is to continue to play the duration play depending on market conditions.

    Indeed, adjusting the portfolio’s duration in line with adjustments in inflationary expectations shall continue to prove crucial 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)*

    -8.19%

    *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 (%): 2.46
    Distribution: N/A
    Total Net Assets: €33.34 mn
    Month end NAV in EUR: 91.81
    Number of Holdings: 37
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 47.8

    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
    9.3%
    4.5% MGS 2028
    8.2%
    5.25% MGS 2030
    7.1%
    4.45% MGS 2032
    5.1%
    5.2% MGS 2031
    3.4%
    5.1% MGS 2029
    3.3%
    4.3% MGS 2033
    3.1%
    4.1% MGS 2034
    2.9%
    2.3% MGS 2029
    2.9%
    4.65% MGS 2032
    2.6%

    Top Holdings by Country*

    Malta
    62.5%
    France
    3.5%
    Portugal
    2.3%
    Italy
    1.4%
    Spain
    1.1%
    Hungary
    0.9%
    Poland
    0.9%
    Netherlands
    0.8%
    Slovenia
    0.8%
    Belgium
    0.7%
    *including exposures to CIS

    Asset Allocation

    Cash 23.1%
    Bonds 74.3%
    CIS/ETFs 2.6%

    Maturity Buckets*

    10.8%
    0-5 Years
    49.9%
    5-10 Years
    13.6%
    10 Years+
    *based on the Next Call Date (also includes cash)

    Performance History (EUR)*

    YTD

    -14.04%

    2021

    -3.04%

    2020

    1.31%

    2019

    8.98%

    2018

    -0.68%

    Annualised Since Inception***

    -1.49%

    * 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%
    USD 0.9%
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