Investment Objective

The Fund aims to maximise the total level of return through investment, primarily in debt securities and money market instruments issued by the Government of Malta, and equities and corporate bonds issued and listed on the MSE.

The Investment Manager may also invest directly or indirectly up to 15% of its assets in “Non- Maltese Assets”. The Investment Manager will maintain an exposure to local debt securities of at least 55% of the value of the Net Assets of the Fund.

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

Investor Profile

A typical investor in the CC Malta High Income Fund would be to one who is seeking to gain exposure to the local Government Bond Market and the local corporate bond and local equity markets, either by achieving capital growth and accumulation of wealth via the Accumulation Share Class A, or by receiving periodical distributions which the CC Malta High Income Fund would have benefited from time to time via the Distribution Share Class B.

Fund Rules

In seeking to achieve the Sub-Fund’s investment objective, the Investment Manager shall aim to invest at least 85% of the Net Assets of the Sub-Fund in a portfolio of debt securities and money market instruments issued or guaranteed by the Government of Malta, as well as equities and corporate bonds issued and listed on the Malta Stock Exchange (collectively, “Maltese Assets”) with no particular focus on any industry. Such exposure may also be obtained by investing in eligible collective investment schemes whose investment objective and policies are consistent with those of the Sub-Fund. Where the Sub-Fund invests in eligible collective investment schemes managed by the Investment Manager, the Investment Manager shall reimburse the Sub-Fund any investment management and/or performance fees, as well as any applicable subscription/redemption charges, received in connection with the Sub-Fund’s investment in the eligible collective investment scheme.

In seeking to achieve its objective, the Sub-Fund may also invest directly (or indirectly via eligible exchange traded funds and/or eligible collective investment schemes) up to 15% of the Net Assets of the Sub-Fund in:

(i) Eligible 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

(ii) Eligible 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,

(iii) Eligible international equity securities, with no particular bias to the market capitalisation and geographical location of these securities; and

(iv) Eligible international debt securities.

  • The Investment Manager may invest up to 10% of the net assets of the Sub-Fund in un-listed Maltese and/or Non-Maltese Assets. As far as the “Non-Maltese Assets” segment of the Sub-Fund is concerned, the Investment Manager will not be targeting any international debt securities of any particular duration or coupon. However, the Sub-Fund is generally not expected to hold investments that, at the time of investment, are rated below “B3” by Moody’s or below “B-“ by S&P or in bonds determined to be of comparable quality by the Investment Manager
  • The Investment Manager will not be targeting any local debt securities (debt securities and money market instruments issued or guaranteed by the Government of Malta and/or local corporate bonds issued and listed on the Malta Stock Exchange) of any particular duration or coupon
  • The Investment Manager will, at all times, maintain a direct exposure to local debt securities (debt securities and money market instruments issued or guaranteed by the Government of Malta and/or issued and listed on the Malta Stock Exchange) of at least 55% of the value of the Net Assets of the Sub-Fund.
  • The Sub-Fund may also invest in term deposits held with credit institutions regulated in Malta and other EU, EEA and OECD Member States
  • This Sub-Fund shall not invest, in the aggregate, more than 10% of the Net Assets of the Sub-Fund in units or shares of other UCITS or other CISs

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 May, the Malta High Income Fund registered a marginal loss of 0.03 percent for the month, outperforming its internally compared benchmark which saw a loss of 012 per cent for the month, as credit names outperformed equities.

Throughout the month the Manager continued to take an active approach, also seeking pockets of value by looking into attractive credit and equity stories. The fund’s objective, to continue tweaking the fund’s allocation towards the bond market – in line with the newly adopted strategy of a stable level of income and capital preservation – remains unchanged.

Market and investment outlook
Moving forward, the Managers believe in adopting a more defensive stance given the current economic climate. Price pressures may well leave a negative impact on the Maltese economy, possibly hindering the forecasted pace of recovery. Such pace remains highly dependent on inbounds of tourism, now seemingly more optimistic following an increase in appetite for travel.

A quick introduction to our Malta Balanced Income 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)*

0.57%

*View Performance History below
Inception Date: 10 Apr 2018
ISIN: MT7000022281
Bloomberg Ticker: CCMIFAB MV
Entry Charge: up to 2.50%
Total Expense Ratio: 1.25%
Exit Charge: None
Distribution Yield (%): 3.00
Underlying Yield (%): 2.39
Distribution: N/A
Total Net Assets: €22.34
Month end NAV in EUR: 92.69
Number of Holdings: 74
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
% of Top 10 Holdings: 39.4

Performance To Date (EUR)

Top 10 Holdings

PG plc
3.9%
Harvest Technology plc
3.4%
4% Central Business Centres 2033
3.2%
RS2 Software plc
2.9%
3.5% GO plc 2031
2.8%
3.9% Brown's Pharma 2031
2.7%
4.35% SD Finance plc 2027
2.6%
4.65% Smartcare Finance plc 2031
2.5%
GO plc
2.4%
3.75% Tum Finance plc 2029
2.4%

Major Sector Breakdown*

Consumer Discretionary
47.5%
Real Estate
13.1%
Asset 7
Communications
10.1%
Industrials
6.6%
Financials
3.8%
Energy
2.2%
*including exposures to CIS

Maturity Buckets*

17.0%
0-5 Years
38.3%
5-10 Years
6.3%
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
95.5%
Other
4.5%
*including exposures to CIS and Cash

Asset Allocation*

Cash 8.4%
Bonds 63.8%
Equities 26.2%
* including exposures to CIS

Performance History (EUR)*

YTD

-3.02%

2021

1.07%

2020

-1.05%

2019

3.37%

2018*

0.32%

Annualised Since Inception**

0.14%

*The Distributor Share Class (Class B) was launched on 10 April 2018
** Performance figures are calculated using the Value Added Monthly Index "VAMI" principle. The VAMI calculates the total return gained by an investor from reinvestment of any dividends and additional interest gained through compounding. 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.
*** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

Currency Allocation

Euro 98.4%
Other 1.6%
Data for risk statistics is not available for this fund.

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  • Investment Objective

    The Fund aims to maximise the total level of return through investment, primarily in debt securities and money market instruments issued by the Government of Malta, and equities and corporate bonds issued and listed on the MSE.

    The Investment Manager may also invest directly or indirectly up to 15% of its assets in “Non- Maltese Assets”. The Investment Manager will maintain an exposure to local debt securities of at least 55% of the value of the Net Assets of the Fund.

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

  • Investor profile

    A typical investor in the CC Malta High Income Fund would be to one who is seeking to gain exposure to the local Government Bond Market and the local corporate bond and local equity markets, either by achieving capital growth and accumulation of wealth via the Accumulation Share Class A, or by receiving periodical distributions which the CC Malta High Income Fund would have benefited from time to time via the Distribution Share Class B.

    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

    • The Investment Manager may invest up to 10% of the net assets of the Sub-Fund in un-listed Maltese and/or Non-Maltese Assets. As far as the “Non-Maltese Assets” segment of the Sub-Fund is concerned, the Investment Manager will not be targeting any international debt securities of any particular duration or coupon. However, the Sub-Fund is generally not expected to hold investments that, at the time of investment, are rated below “B3” by Moody’s or below “B-“ by S&P or in bonds determined to be of comparable quality by the Investment Manager
    • The Investment Manager will not be targeting any local debt securities (debt securities and money market instruments issued or guaranteed by the Government of Malta and/or local corporate bonds issued and listed on the Malta Stock Exchange) of any particular duration or coupon
    • The Investment Manager will, at all times, maintain a direct exposure to local debt securities (debt securities and money market instruments issued or guaranteed by the Government of Malta and/or issued and listed on the Malta Stock Exchange) of at least 55% of the value of the Net Assets of the Sub-Fund.
    • The Sub-Fund may also invest in term deposits held with credit institutions regulated in Malta and other EU, EEA and OECD Member States
    • This Sub-Fund shall not invest, in the aggregate, more than 10% of the Net Assets of the Sub-Fund in units or shares of other UCITS or other CISs
  • 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 May, the Malta High Income Fund registered a marginal loss of 0.03 percent for the month, outperforming its internally compared benchmark which saw a loss of 012 per cent for the month, as credit names outperformed equities.

    Throughout the month the Manager continued to take an active approach, also seeking pockets of value by looking into attractive credit and equity stories. The fund’s objective, to continue tweaking the fund’s allocation towards the bond market – in line with the newly adopted strategy of a stable level of income and capital preservation – remains unchanged.

    Market and investment outlook
    Moving forward, the Managers believe in adopting a more defensive stance given the current economic climate. Price pressures may well leave a negative impact on the Maltese economy, possibly hindering the forecasted pace of recovery. Such pace remains highly dependent on inbounds of tourism, now seemingly more optimistic following an increase in appetite for travel.

  • 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)*

    0.57%

    *View Performance History below
    Inception Date: 10 Apr 2018
    ISIN: MT7000022281
    Bloomberg Ticker: CCMIFAB MV
    Entry Charge: up to 2.50%
    Total Expense Ratio: 1.25%
    Exit Charge: None
    Distribution Yield (%): 3.00
    Underlying Yield (%): 2.39
    Distribution: N/A
    Total Net Assets: €22.34
    Month end NAV in EUR: 92.69
    Number of Holdings: 74
    Auditors: Deloitte Malta
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.
    % of Top 10 Holdings: 39.4

    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

    PG plc
    3.9%
    Harvest Technology plc
    3.4%
    4% Central Business Centres 2033
    3.2%
    RS2 Software plc
    2.9%
    3.5% GO plc 2031
    2.8%
    3.9% Brown's Pharma 2031
    2.7%
    4.35% SD Finance plc 2027
    2.6%
    4.65% Smartcare Finance plc 2031
    2.5%
    GO plc
    2.4%
    3.75% Tum Finance plc 2029
    2.4%

    Top Holdings by Country*

    Malta
    95.5%
    Other
    4.5%
    *including exposures to CIS and Cash

    Major Sector Breakdown*

    Consumer Discretionary
    47.5%
    Real Estate
    13.1%
    Asset 7
    Communications
    10.1%
    Industrials
    6.6%
    Financials
    3.8%
    Energy
    2.2%
    *including exposures to CIS

    Asset Allocation*

    Cash 8.4%
    Bonds 63.8%
    Equities 26.2%
    * including exposures to CIS

    Maturity Buckets*

    17.0%
    0-5 Years
    38.3%
    5-10 Years
    6.3%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    YTD

    -3.02%

    2021

    1.07%

    2020

    -1.05%

    2019

    3.37%

    2018*

    0.32%

    Annualised Since Inception**

    0.14%

    *The Distributor Share Class (Class B) was launched on 10 April 2018
    ** Performance figures are calculated using the Value Added Monthly Index "VAMI" principle. The VAMI calculates the total return gained by an investor from reinvestment of any dividends and additional interest gained through compounding. 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.
    *** Returns quoted net of TER. Entry and exit charges may reduce returns for investors.

    Currency Allocation

    Euro 98.4%
    Other 1.6%
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