Investment Objectives
The Fund aims to maximise the total level of return through investment, in a diversified portfolio of Emerging Market Corporate and Government fixed income securities as well as up to 15% of the Net Assets of the Sub-Fund in EM equities. In pursuing this objective, the Investment Manager shall invest primarily in a diversified portfolio of Emerging Market bonds rated at the time of investment “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality. The Fund can also invest up to 10% of its assets in Non-Rated bond issues and up to 30% of its assets in Non-Emerging Market issuers.
The Fund is actively managed, not managed by reference to any index.
Investor Profile
A typical investor in the Emerging Market Bond Fund would be one who is seeking to gain exposure to the Emerging Bond Market via corporate and/or sovereign bonds 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 Emerging Market Bond Fund are those with a medium to high tolerance to risk and 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 as well as the investment cycle commensurate with an investment in Emerging Markets.
Fund Rules
The Investment Manager shall invest primarily but not solely in a diversified portfolio of Emerging Market Corporate fixed income securities and Emerging Market Government fixed income securities with maturities of 10 years or less, rated at the time of investment “Baa1” to “Caa1” by Moody’s or “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality by the Investment Manager. The Investment Manager may also invest up to 10% of the Net Assets of the Sub-Fund in unrated fixed income securities.
- Minimum Credit Rating CCC+ (or equivalent)
- Up to 10% in Non-Rated Bonds
- Average Credit Quality of B- (or equivalent)
- Emerging Market Issuers as per MSCI Emerging and Frontier
- Up to 15% in Emerging Market Equities
- Use of FDIs for hedging purposes only
- No limit on exposure to CIS
- Up to 30% in Non Emerging Market Issuers
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
5 year performance*
-15.23%
*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.91
Distribution: N/A
Total Net Assets: $8.6 mn
Month end NAV in EUR: 79.62
Number of Holdings: 49
Auditors: Grant Thornton
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
Performance To Date (EUR)
Top 10 Holdings
4.8%
4.6%
4.6%
3.2%
2.6%
2.4%
2.4%
2.4%
2.4%
2.3%
Major Sector Breakdown*
Government
24.2%
Communications
9.1%
Materials
7.4%
Materials
7.4%
Utilites
6.9%
Consumer Staples
6.9%
Maturity Buckets*
Credit Ratings
Risk & Reward Profile
Lower Risk
Potentialy Lower Reward
Higher Risk
Potentialy Higher Reward
Top Holdings by Country*
13.6%
13.0%
8.6%
7.0%
7.0%
6.8%
6.7%
5.7%
4.7%
4.6%
Asset Allocation
Performance History (EUR)*
1 Year
2.21%
3 Year
-4.49%
5 Year
-15.23%
Currency Allocation
Interested in this product?
-
Investment Objectives
The Fund aims to maximise the total level of return through investment, in a diversified portfolio of Emerging Market Corporate and Government fixed income securities as well as up to 15% of the Net Assets of the Sub-Fund in EM equities. In pursuing this objective, the Investment Manager shall invest primarily in a diversified portfolio of Emerging Market bonds rated at the time of investment “BBB+” to “CCC+” by S&P, or in bonds determined to be of comparable quality. The Fund can also invest up to 10% of its assets in Non-Rated bond issues and up to 30% of its assets in Non-Emerging Market issuers.
The Fund is actively managed, not managed by reference to any index.
-
Investor profile
A typical investor in the Emerging Market Bond Fund would be one who is seeking to gain exposure to the Emerging Bond Market via corporate and/or sovereign bonds 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 Emerging Market Bond Fund are those with a medium to high tolerance to risk and 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 as well as the investment cycle commensurate with an investment in Emerging Markets.
-
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
- Minimum Credit Rating CCC+ (or equivalent)
- Up to 10% in Non-Rated Bonds
- Average Credit Quality of B- (or equivalent)
- Emerging Market Issuers as per MSCI Emerging and Frontier
- Up to 15% in Emerging Market Equities
- Use of FDIs for hedging purposes only
- No limit on exposure to CIS
- Up to 30% in Non Emerging Market Issuers
-
Commentary
February 2025
Introduction
Emerging market (EM) credit exhibited robust performance in early 2025, recovering from the late 2024 sell-off. This prior downturn, which eroded prior gains, was largely attributed to heightened risk aversion preceding the US presidential election. Market participants priced in potential downside risks stemming from anticipated protectionist policies, notably trade tariffs.
Post-inauguration, tariff risk remained a significant overhang, with Mexico facing specific vulnerability due to its role in addressing US border security concerns. The threatened 25% tariffs on Mexican imports, a direct response to perceived policy shortcomings, were temporarily mitigated following diplomatic interventions and commitments to enhanced border enforcement. This episode underscores the sensitivity of EM credit to geopolitical risks and their potential for rapid repricing.
February saw a continuation of positive momentum.
Despite persistent inflationary risks, including the potential impact of tariffs and stronger-than-anticipated inflation data, global bond markets reacted positively to weakening US sentiment indicators and escalating growth concerns. This led to a 33bps decline in the US 10-year Treasury yield, closing at 4.21%, and a corresponding depreciation of the USD. This provided a significant tailwind for EM debt, as evidenced by a 1.34% return in EM corporate credit for the month.
Market environment and performance
Lack of clarity, arising from the dynamic and continuously evolving environment within the geopolitical sphere, are giving rise to uncertainty. The re-election of Donald Trump into office meant that the neighbouring countries will have to deal with the possibility of tariff imposition. Mexico and Canada, on the basis of the lack of controls surrounding imports of fentanyl and unfair trade practices, have certainly started to feel the below, with threats of tariffs being laid out. China too were subject to such trade tariffs, albeit to a lesser extent, with trump thus far taking a more cautious stance, imposing only a 10% tariff on Chinese imports. The PBoC – facing persistent headwinds to its economic recovery – has demonstrated restraint, favouring diplomatic engagement over aggressive retaliatory trade actions which may ultimately have adverse effects on domestic consumption.
In economic numbers, China’s General Composite PMI increased to 51.5 in February 2025 from 51.1 in the previous month, marking the highest reading since last November. Still, it was the 16th month of growth in private sector activity, with new orders solidifying, supported by modest growth in output across both sectors. Meanwhile, China’s annual inflation rate climbed to 0.5% in January from 0.1% in December, surpassing market expectations of 0.4%. This marked the highest level since August 2024, driven by seasonal effects from the Lunar New Year at the end of the month. This also reflected the impact of recent government stimulus measures and the central bank’s accommodative monetary policy to support the economy.
Latin America’s economic landscape presents a mixed picture. While earlier concerns regarding resurgent inflation were prevalent, recent data indicates a potential disinflationary trend, prompting a reassessment of future monetary policy adjustments. Notably, Brazil’s inflation rate moderated to 4.56% from 4.83%, aligning with market forecasts and reaching its lowest level since September, amidst signs of slowing economic growth. This development suggests a potential shift in the Brazilian monetary policy stance.
In Asia, monetary policy is also responding to evolving economic conditions. The Reserve Bank of India (RBI) implemented a 25bps repo rate cut to 6.25% in February, the first reduction in nearly five years. The RBI’s stated neutral stance aims to support economic growth. Conversely, Thailand and Indonesia experienced the most significant market declines in the region, reflecting investor concerns regarding weakening growth prospects.
Fund performance
The CC Emerging Market Bond Fund delivered a 1.35% return in February, mirroring the broader positive trend in credit markets.
In response to ongoing market volatility and expectations of a sustained period of elevated Federal Reserve policy rates, the portfolio manager continued to dynamically manage risk and yield. Following the previous month’s reduction in exposure to tariff-sensitive issuers, the focus shifted to enhancing income yield and mitigating interest rate duration
To achieve these objectives, the manager strategically reallocated capital. Proceeds from the sale of the iShares Emerging Markets Bond UCITS ETF were redeployed to increase direct corporate bond exposures, specifically adding positions in Standard Chartered, Vedanta Resources, and HSBC Holdings. To further optimize income yield, a duration-neutral swap was executed, replacing a Polish bond with a 4.88% coupon with a newer issue yielding 5.38%. This swap effectively maintained the portfolio’s duration profile while enhancing its income generation.
Market and investment outlook
Looking forward, Federal Reserve policy decisions and the broader global interest rate trajectory will remain pivotal factors. A shift towards a more dovish Fed stance could trigger further USD depreciation, a trend already observed in recent weeks. The USD’s recent weakening is attributable to concerning US private sector employment data, which raised concerns regarding labor market resilience, and escalating trade tensions. Retaliatory tariffs imposed by Canada, Mexico, and China in response to US actions have amplified global growth risks and exerted downward pressure on the USD.
For the CC Emerging Market Bond Fund, the portfolio manager will maintain a dynamic approach, actively assessing the evolving market landscape to capitalize on attractive credit opportunities. Consistent with recent strategies, portfolio adjustments will be made to align with prevailing yield conditions and optimize duration, as deemed prudent. Furthermore, the manager will vigilantly monitor the geopolitical landscape within emerging markets, particularly the potential for escalating tensions, which continue to present a source of market uncertainty.
-
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
5 year performance*
-15.23%
*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.91
Distribution: N/A
Total Net Assets: $8.6 mn
Month end NAV in EUR: 79.62
Number of Holdings: 49
Auditors: Grant Thornton
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
Performance To Date (EUR)
Risk & Reward Profile
1234567Lower Risk
Potentialy Lower Reward
Higher Risk
Potentialy Higher Reward
Top 10 Holdings
iShares JPM USD EM Bond4.8%
6.625% NBM US Holdings Inc 20294.6%
5.8% Oryx Funding Ltd 20314.6%
3.25% Export-Import BK India 20303.2%
7.25% Gusap III LP 20442.6%
6.625% Oztel Holdings Ltd 20282.4%
6.033% Banco Santander SA 20352.4%
5.25% KSA Sukuk Ltd 20342.4%
7.45% Turkcell 20302.4%
5% Takeda Pharmaceutical 20282.3%
Top Holdings by Country*
Brazil13.6%
Malta (Incl. cash)13.0%
Mexico8.6%
India7.0%
Oman7.0%
Turkey6.8%
Indonesia6.7%
United States5.7%
United Kingdom4.7%
Spain4.6%
*including exposures to CISMajor Sector Breakdown*
Government
24.2%
Communications
9.1%
Materials
7.4%
Materials
7.4%
Utilites
6.9%
Consumer Staples
6.9%
*excluding exposures to CISAsset Allocation
Cash 1.3%Bonds (incl. ETFs) 98.7%Maturity Buckets*
46.0%0-5 Years38.4%5-10 Years7.7%10 Years+*based on the Next Call DatePerformance History (EUR)*
1 Year
2.21%
3 Year
-4.49%
5 Year
-15.23%
* The EUR Accumulator Share Class (Class C) was launched on 03 November 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
USD 100.0%Euro 0.0% -
Downloads
Commentary
February 2025
Introduction
Emerging market (EM) credit exhibited robust performance in early 2025, recovering from the late 2024 sell-off. This prior downturn, which eroded prior gains, was largely attributed to heightened risk aversion preceding the US presidential election. Market participants priced in potential downside risks stemming from anticipated protectionist policies, notably trade tariffs.
Post-inauguration, tariff risk remained a significant overhang, with Mexico facing specific vulnerability due to its role in addressing US border security concerns. The threatened 25% tariffs on Mexican imports, a direct response to perceived policy shortcomings, were temporarily mitigated following diplomatic interventions and commitments to enhanced border enforcement. This episode underscores the sensitivity of EM credit to geopolitical risks and their potential for rapid repricing.
February saw a continuation of positive momentum.
Despite persistent inflationary risks, including the potential impact of tariffs and stronger-than-anticipated inflation data, global bond markets reacted positively to weakening US sentiment indicators and escalating growth concerns. This led to a 33bps decline in the US 10-year Treasury yield, closing at 4.21%, and a corresponding depreciation of the USD. This provided a significant tailwind for EM debt, as evidenced by a 1.34% return in EM corporate credit for the month.
Market environment and performance
Lack of clarity, arising from the dynamic and continuously evolving environment within the geopolitical sphere, are giving rise to uncertainty. The re-election of Donald Trump into office meant that the neighbouring countries will have to deal with the possibility of tariff imposition. Mexico and Canada, on the basis of the lack of controls surrounding imports of fentanyl and unfair trade practices, have certainly started to feel the below, with threats of tariffs being laid out. China too were subject to such trade tariffs, albeit to a lesser extent, with trump thus far taking a more cautious stance, imposing only a 10% tariff on Chinese imports. The PBoC – facing persistent headwinds to its economic recovery – has demonstrated restraint, favouring diplomatic engagement over aggressive retaliatory trade actions which may ultimately have adverse effects on domestic consumption.
In economic numbers, China’s General Composite PMI increased to 51.5 in February 2025 from 51.1 in the previous month, marking the highest reading since last November. Still, it was the 16th month of growth in private sector activity, with new orders solidifying, supported by modest growth in output across both sectors. Meanwhile, China’s annual inflation rate climbed to 0.5% in January from 0.1% in December, surpassing market expectations of 0.4%. This marked the highest level since August 2024, driven by seasonal effects from the Lunar New Year at the end of the month. This also reflected the impact of recent government stimulus measures and the central bank’s accommodative monetary policy to support the economy.
Latin America’s economic landscape presents a mixed picture. While earlier concerns regarding resurgent inflation were prevalent, recent data indicates a potential disinflationary trend, prompting a reassessment of future monetary policy adjustments. Notably, Brazil’s inflation rate moderated to 4.56% from 4.83%, aligning with market forecasts and reaching its lowest level since September, amidst signs of slowing economic growth. This development suggests a potential shift in the Brazilian monetary policy stance.
In Asia, monetary policy is also responding to evolving economic conditions. The Reserve Bank of India (RBI) implemented a 25bps repo rate cut to 6.25% in February, the first reduction in nearly five years. The RBI’s stated neutral stance aims to support economic growth. Conversely, Thailand and Indonesia experienced the most significant market declines in the region, reflecting investor concerns regarding weakening growth prospects.
Fund performance
The CC Emerging Market Bond Fund delivered a 1.35% return in February, mirroring the broader positive trend in credit markets.
In response to ongoing market volatility and expectations of a sustained period of elevated Federal Reserve policy rates, the portfolio manager continued to dynamically manage risk and yield. Following the previous month’s reduction in exposure to tariff-sensitive issuers, the focus shifted to enhancing income yield and mitigating interest rate duration
To achieve these objectives, the manager strategically reallocated capital. Proceeds from the sale of the iShares Emerging Markets Bond UCITS ETF were redeployed to increase direct corporate bond exposures, specifically adding positions in Standard Chartered, Vedanta Resources, and HSBC Holdings. To further optimize income yield, a duration-neutral swap was executed, replacing a Polish bond with a 4.88% coupon with a newer issue yielding 5.38%. This swap effectively maintained the portfolio’s duration profile while enhancing its income generation.
Market and investment outlook
Looking forward, Federal Reserve policy decisions and the broader global interest rate trajectory will remain pivotal factors. A shift towards a more dovish Fed stance could trigger further USD depreciation, a trend already observed in recent weeks. The USD’s recent weakening is attributable to concerning US private sector employment data, which raised concerns regarding labor market resilience, and escalating trade tensions. Retaliatory tariffs imposed by Canada, Mexico, and China in response to US actions have amplified global growth risks and exerted downward pressure on the USD.
For the CC Emerging Market Bond Fund, the portfolio manager will maintain a dynamic approach, actively assessing the evolving market landscape to capitalize on attractive credit opportunities. Consistent with recent strategies, portfolio adjustments will be made to align with prevailing yield conditions and optimize duration, as deemed prudent. Furthermore, the manager will vigilantly monitor the geopolitical landscape within emerging markets, particularly the potential for escalating tensions, which continue to present a source of market uncertainty.