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*
-16.74%
*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.57
Distribution: N/A
Total Net Assets: $9.6 mn
Month end NAV in EUR: 77.75
Number of Holdings: 47
Auditors: Deloitte Malta
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.
Performance To Date (EUR)
Top 10 Holdings
7.1%
4.1%
4.1%
4.0%
4.0%
3.9%
3.7%
3.0%
2.9%
2.8%
Major Sector Breakdown*
Government
17.2%
Materials
8.3%
Financials
7.6%
![](/wp-content/themes/bp-ccfunds/images/funds-icon.png)
Funds
7.1%
Consumer Staples
6.2%
Consumer Discretionary
4.4%
Maturity Buckets*
Credit Ratings
Risk & Reward Profile
Lower Risk
Potentialy Lower Reward
Higher Risk
Potentialy Higher Reward
Top Holdings by Country*
14.2%
13.4%
10.9%
6.5%
6.2%
5.9%
5.6%
3.9%
3.7%
3.5%
Asset Allocation
Performance History (EUR)*
1 Year
3.14%
3 Year
-17.00%
5 Year
-16.74%
Currency Allocation
Interested in this product?
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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.
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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
May 2024
Introduction
Emerging market (EM) credit defied the global credit market slump in April, continuing its upward trajectory from Q1 2024.
The turnaround, following an April sell-off mirroring global credit markets, stemmed from a dovish shift in sentiment as the inflationary environment in the United States saw a turning point, with April’s consumer price index increasing less than expected and positive updates from emerging economies. China’s government announced measures to support its struggling housing sector, which boosted confidence. In India, optimism rose due to the expected re-election of Prime Minister Modi, although the possibility of a coalition government added some uncertainty.
From a performance standpoint, EM corporate credit delivered a 1.98% return, outperforming the 1.57% return seen in developed markets.
Market environment and performance
China’s macroeconomy continued to exhibit signs of a recovery in May. Leading indicators, notably the General Composite PMI (54.1 v a previous month reading of 52.8) pointed to the highest reading since May 2023, a seventh straight month of growth in private sector activity as output growth accelerated in both manufacturing and service sectors. On the back of such upbeat figures, inflation figures, albeit marginally below estimates, proved upbeat. In May, consumer prices edged up 0.3% YoY in May 2024, unchanged from April’s reading, amid an ongoing recovery in domestic demand.
Despite nascent signs of improvement, structural challenges continue to persist. Recent government interventions, particularly in the property sector, offer hope, but their long-term effectiveness remains to be seen. Still, sustained stability in property prices is indeed anticipated. This is viewed as a crucial precursor to a turnaround in the sector. Stabilized home prices shall indeed have positive ripple effects, potentially improving consumer sentiment and ultimately enhancing China’s growth outlook.
India’s economic performance exhibited continued expansion, most recent figures showed. The services sector, a crucial engine of the economy, remained robust, although growth slowed slightly compared to April. Meanwhile, manufacturing signalled a slower but still substantial improvement in the country’s manufacturing sector, amid a softer rise in new orders and output. Looking ahead, manufacturers expressed the highest level of positive sentiment towards growth prospects in nearly nine-and-a-half years, buoyed by advertising and innovation, alongside expectations that economic and demand conditions will remain favourable.
Latin America presented a nuanced economic picture in May, with a broader slowdown emerging compared to the earlier part of Q1. Brazil, the region’s powerhouse, exhibited continued resilience, with activity – aided by the services segment – revolving in expansionary territory. Inflation, meanwhile, picked up from the 3.69% jump in the prior month, and above market expectations of 3.89% to mark the first acceleration in Brazilian consumer prices since September of 2023. Mexico, still in expansion, saw a marginal growth in manufacturing as new orders continued to rise. From a policy perspective, Chile – among the first to ease policy – carried out a 50bps cut, which brings them to 6.0%. Brazil too lowered its key Selic rate by 25bps to 10.5%, in line with expectations.
Fund performance
In May, the CC Emerging Market Bond Fund realized a gain of 1.58%. Throughout the month, the Manager largely maintained its portfolio allocation, only adding the sovereign of Saudi Arabia to the fund’s sovereign exposure. Indeed, the decisions previously taken to increase the fund’s exposure to sovereigns and quasi-sovereigns, notably to Brazil and Mexico amongst other, remain valid and shall going forward pay dividends, particularly as the respective central bankers continue to gradually ease its yet restrictive macroeconomic policy.
Market and investment outlook
Looking ahead, the evolving global interest rate environment, particularly decisions by the Fed, will be crucial to monitor. A hawkish Fed stance may lead to a sustained period of higher rates globally, potentially translating into a stronger US dollar. A “higher-for-longer” dollar scenario indeed presents a challenge for EM economies, notably; reduced fund flows from foreign investors seeking higher returns elsewhere, and increased refinancing costs for companies with large foreign currency debt burdens.
With respect to the Emerging Market Bond Fund, the manager will continue to assess the market landscape and capitalize on appealing credit opportunities. Consistent with recent actions, the manager will continue to tailor the portfolio to match prevailing yield conditions while increasing the portfolio’s overall duration. This whilst keeping a close eye on the political landscape within Emerging Markets and possible escalation of geopolitical tensions, which to-date have alas endured. Despite rate cut expectations falling over the year, optimism remains.
-
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*
-16.74%
*View Performance History below
Inception Date: 03 Nov 2017
ISIN: MT7000021242
Bloomberg Ticker: CCEMBFC MV
Distribution Yield (%): N/A
Underlying Yield (%): 5.57
Distribution: N/A
Total Net Assets: $9.6 mn
Month end NAV in EUR: 77.75
Number of Holdings: 47
Auditors: Deloitte Malta
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 Bond7.1%
6.625% NBM US Holdings Inc 20294.1%
5.8% Oryx Funding Ltd 20314.1%
4.375% Freeport McMoran 20284.0%
5.8% Turkcell 20284.0%
4% HSBC Holdings plc perp3.9%
4.75% Banco Santander SA perp3.7%
5.60% Petrobras Global Fin 20313.0%
iShares JPM USD EM Corp Bond2.9%
3.25% Export-Import BK India 20302.8%
Top Holdings by Country*
Brazil14.2%
United States13.4%
Mexico10.9%
India6.5%
Oman6.2%
Turkey5.9%
Malta (incl. cash)5.6%
United Kingdom3.9%
Spain3.7%
Indonesia3.5%
*including exposures to CISMajor Sector Breakdown*
Government
17.2%
Materials
8.3%
Financials
7.6%
Funds
7.1%
Consumer Staples
6.2%
Consumer Discretionary
4.4%
*excluding exposures to CISAsset Allocation
Cash 5.6%Bonds (incl. ETFs) 94.4%Maturity Buckets*
41.4%0-5 Years34.8%5-10 Years8.5%10 Years+*based on the Next Call DatePerformance History (EUR)*
1 Year
3.14%
3 Year
-17.00%
5 Year
-16.74%
* 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 97.4%Euro 2.6% -
Downloads
Commentary
May 2024
Introduction
Emerging market (EM) credit defied the global credit market slump in April, continuing its upward trajectory from Q1 2024.
The turnaround, following an April sell-off mirroring global credit markets, stemmed from a dovish shift in sentiment as the inflationary environment in the United States saw a turning point, with April’s consumer price index increasing less than expected and positive updates from emerging economies. China’s government announced measures to support its struggling housing sector, which boosted confidence. In India, optimism rose due to the expected re-election of Prime Minister Modi, although the possibility of a coalition government added some uncertainty.
From a performance standpoint, EM corporate credit delivered a 1.98% return, outperforming the 1.57% return seen in developed markets.
Market environment and performance
China’s macroeconomy continued to exhibit signs of a recovery in May. Leading indicators, notably the General Composite PMI (54.1 v a previous month reading of 52.8) pointed to the highest reading since May 2023, a seventh straight month of growth in private sector activity as output growth accelerated in both manufacturing and service sectors. On the back of such upbeat figures, inflation figures, albeit marginally below estimates, proved upbeat. In May, consumer prices edged up 0.3% YoY in May 2024, unchanged from April’s reading, amid an ongoing recovery in domestic demand.
Despite nascent signs of improvement, structural challenges continue to persist. Recent government interventions, particularly in the property sector, offer hope, but their long-term effectiveness remains to be seen. Still, sustained stability in property prices is indeed anticipated. This is viewed as a crucial precursor to a turnaround in the sector. Stabilized home prices shall indeed have positive ripple effects, potentially improving consumer sentiment and ultimately enhancing China’s growth outlook.
India’s economic performance exhibited continued expansion, most recent figures showed. The services sector, a crucial engine of the economy, remained robust, although growth slowed slightly compared to April. Meanwhile, manufacturing signalled a slower but still substantial improvement in the country’s manufacturing sector, amid a softer rise in new orders and output. Looking ahead, manufacturers expressed the highest level of positive sentiment towards growth prospects in nearly nine-and-a-half years, buoyed by advertising and innovation, alongside expectations that economic and demand conditions will remain favourable.
Latin America presented a nuanced economic picture in May, with a broader slowdown emerging compared to the earlier part of Q1. Brazil, the region’s powerhouse, exhibited continued resilience, with activity – aided by the services segment – revolving in expansionary territory. Inflation, meanwhile, picked up from the 3.69% jump in the prior month, and above market expectations of 3.89% to mark the first acceleration in Brazilian consumer prices since September of 2023. Mexico, still in expansion, saw a marginal growth in manufacturing as new orders continued to rise. From a policy perspective, Chile – among the first to ease policy – carried out a 50bps cut, which brings them to 6.0%. Brazil too lowered its key Selic rate by 25bps to 10.5%, in line with expectations.
Fund performance
In May, the CC Emerging Market Bond Fund realized a gain of 1.58%. Throughout the month, the Manager largely maintained its portfolio allocation, only adding the sovereign of Saudi Arabia to the fund’s sovereign exposure. Indeed, the decisions previously taken to increase the fund’s exposure to sovereigns and quasi-sovereigns, notably to Brazil and Mexico amongst other, remain valid and shall going forward pay dividends, particularly as the respective central bankers continue to gradually ease its yet restrictive macroeconomic policy.
Market and investment outlook
Looking ahead, the evolving global interest rate environment, particularly decisions by the Fed, will be crucial to monitor. A hawkish Fed stance may lead to a sustained period of higher rates globally, potentially translating into a stronger US dollar. A “higher-for-longer” dollar scenario indeed presents a challenge for EM economies, notably; reduced fund flows from foreign investors seeking higher returns elsewhere, and increased refinancing costs for companies with large foreign currency debt burdens.
With respect to the Emerging Market Bond Fund, the manager will continue to assess the market landscape and capitalize on appealing credit opportunities. Consistent with recent actions, the manager will continue to tailor the portfolio to match prevailing yield conditions while increasing the portfolio’s overall duration. This whilst keeping a close eye on the political landscape within Emerging Markets and possible escalation of geopolitical tensions, which to-date have alas endured. Despite rate cut expectations falling over the year, optimism remains.