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 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, or by receiving periodical distributions which the Malta High Income Fund benefits from time to time via the Distribution Share Class.

Fund Rules

The Investment Manager aims to invest at least 85% of the Net Assets in a portfolio of income bearing securities issued or guaranteed by the Government of Malta, as well as equities and corporate bonds issued and listed on the Malta Stock Exchange.

Such exposure may also be obtained by investing in eligible collective investment schemes whose investment objective and policies are consistent with those of the Malta High Income Fund.

If the 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.

  • The Investment Manager will, at all times, maintain a direct exposure to local debt securities (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 Fund.
  • The Investment Manager may invest up to 10% of the net assets of the Fund in un-listed Maltese and/or Non-Maltese Assets rated B- or higher or in bonds determined to be of comparable quality by the Investment Manager
  • The Fund may also invest in term deposits held with Banks regulated in Malta and other EU, EEA and OECD Member States
  • This Fund shall not invest, in the aggregate, more than 10% of the Net Assets of the Fund in units or shares of other UCITS or other CISs

Commentary

February 2025

Introduction

In 2024, Malta’s economy sustained its growth trajectory, driven by strong domestic demand and solid export performance. Tourism arrivals to Malta remained on the rise, while employment stayed robust, with unemployment falling to 3.1%.

Malta’s economy grew by 2.8% (annualized) in the fourth quarter of 2024, slowing from a 4.9% gain in the previous three-month period. This marked the weakest expansion since Q1 of 2021, influenced by a slowdown in household consumption. At the same time, government spending (2.2% vs 1.4%) increased at a faster pace. On net external demand, exports remained unchanged while imports ticked lower.

Inflation pressures on consumers also eased, with the annual inflation holding steady at 1.8% in January from 2.1% in the previous month. This was the lowest inflation rate in over three years, as prices for food & non-alcoholic beverages, housing & utilities, and recreation all moderated.

Market environment and performance

In Europe, the economic picture is brightening after stagnation in Q4 2024. February’s PMI reading remaining steady at 50.2, unchanged from the previous month, and indicating a marginal economic growth in the bloc. Spain led the expansion with a strong and accelerating rise in business activity, while Ireland also saw faster growth, and Italy returned to expansion for the first time in four months. In contrast, Germany experienced only modest growth, and France’s activity continued to decline.

On the price front, Inflation eased to 2.4%, down from a six-month high of 2.5% but slightly above market expectations of 2.3%, as price growth slowed for services and energy. Core inflation which excludes volatile energy, food, alcohol & tobacco prices, fell to 2.6% in February, the lowest since January 2022.

The labour market, remained healthy, with the unemployment rate revolving at notable lows (6.2% in January), and significantly below the 20-year average.

Fund performance

In February, the Malta High Income Fund registered a gain of 0.65% for the month, underperforming its internally compared benchmark which saw a gain of 1.49%. This underperformance was primarily due to the equity market’s strong 4.18% return.

Market and investment outlook

The credit market narrative at the start of the year remained largely unchanged, with investor attention focused on the dynamic political landscape, central bank policies, and economic data. Economic indicators, both leading and lagging, continue to emphasize a regional divergence. The US, despite the Federal Reserve’s “higher for longer” stance, continues to demonstrate resilient broad-based strength, underpinned by a robust labour market that has thus far supported consumer spending. Meanwhile, Europe has shown tentative signs of growth acceleration following a Q4 2024 stagnation, with private sector activity in expansionary territory for the second consecutive month.

Locally, we expect Malta’s economy to continue performing well. The sustained decline in inflation, coupled with recent tax cuts, shall bolster domestic consumer spending. Additionally, the strong influx of tourists in 2024 is a positive sign. Optimism within the tourism sector is expected to grow, benefiting the economy further if this upward trend continues.

In line with recent portfolio adjustments, we will continue to modify the portfolio’s duration as deemed necessary and appropriate. Additionally, we aim to maintain the fund’s exposure to other European sovereigns, utilizing the permitted 15% maximum allocation.

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*

-3.68%

*View Performance History below
Inception Date: 10 Apr 2018
ISIN: MT7000022281
Bloomberg Ticker: CCMIFAB MV
Distribution Yield (%): 4.25
Underlying Yield (%): 3.16
Distribution: 30/04 & 31/10
Total Net Assets: €16.96
Month end NAV in EUR: 83.02
Number of Holdings: 73
Auditors: Grant Thornton
Legal Advisor: Ganado Advocates
Custodian: Sparkasse Bank Malta p.l.c.

Performance To Date (EUR)

Top 10 Holdings

4% Central Business Centres 2033
4.0%
3.9% Browns Pharma 2031
3.5%
4.65% Smartcare Finance plc 2031
3.3%
4.35% SD Finance plc 2027
3.2%
3.5% GO plc 2031
3.2%
4.5% Endo Finance plc 2029
3.0%
3.75% Tum Finance plc 2029
3.0%
5.9% Together Gaming Solution 2026
2.7%
GO plc
2.7%
Harvest Technology plc
2.6%

Major Sector Breakdown*

Financials
55.2%
Consumer Staples
9.6%
Consumer Discretionary
9.4%
Asset 7
Communications
8.2%
Industrials
7.0%
Information Technology
4.7%
*including exposures to CIS

Maturity Buckets*

40.6%
0-5 Years
36.2%
5-10 Years
0.6%
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
94.5%
Other
5.5%
*including exposures to CIS and Cash

Asset Allocation*

Cash 0.0%
Bonds 80.4%
Equities 19.5%
* including exposures to CIS

Performance History (EUR)*

1 Year

0.43%

3 Year

-1.78%

5 Year

-3.68%

*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 100%
Data for risk statistics is not available for this fund.

Interested in this product?

  • 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 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, or by receiving periodical distributions which the Malta High Income Fund benefits from time to time via the Distribution Share Class.

    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 will, at all times, maintain a direct exposure to local debt securities (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 Fund.
    • The Investment Manager may invest up to 10% of the net assets of the Fund in un-listed Maltese and/or Non-Maltese Assets rated B- or higher or in bonds determined to be of comparable quality by the Investment Manager
    • The Fund may also invest in term deposits held with Banks regulated in Malta and other EU, EEA and OECD Member States
    • This Fund shall not invest, in the aggregate, more than 10% of the Net Assets of the Fund in units or shares of other UCITS or other CISs
  • Commentary

    February 2025

    Introduction

    In 2024, Malta’s economy sustained its growth trajectory, driven by strong domestic demand and solid export performance. Tourism arrivals to Malta remained on the rise, while employment stayed robust, with unemployment falling to 3.1%.

    Malta’s economy grew by 2.8% (annualized) in the fourth quarter of 2024, slowing from a 4.9% gain in the previous three-month period. This marked the weakest expansion since Q1 of 2021, influenced by a slowdown in household consumption. At the same time, government spending (2.2% vs 1.4%) increased at a faster pace. On net external demand, exports remained unchanged while imports ticked lower.

    Inflation pressures on consumers also eased, with the annual inflation holding steady at 1.8% in January from 2.1% in the previous month. This was the lowest inflation rate in over three years, as prices for food & non-alcoholic beverages, housing & utilities, and recreation all moderated.

    Market environment and performance

    In Europe, the economic picture is brightening after stagnation in Q4 2024. February’s PMI reading remaining steady at 50.2, unchanged from the previous month, and indicating a marginal economic growth in the bloc. Spain led the expansion with a strong and accelerating rise in business activity, while Ireland also saw faster growth, and Italy returned to expansion for the first time in four months. In contrast, Germany experienced only modest growth, and France’s activity continued to decline.

    On the price front, Inflation eased to 2.4%, down from a six-month high of 2.5% but slightly above market expectations of 2.3%, as price growth slowed for services and energy. Core inflation which excludes volatile energy, food, alcohol & tobacco prices, fell to 2.6% in February, the lowest since January 2022.

    The labour market, remained healthy, with the unemployment rate revolving at notable lows (6.2% in January), and significantly below the 20-year average.

    Fund performance

    In February, the Malta High Income Fund registered a gain of 0.65% for the month, underperforming its internally compared benchmark which saw a gain of 1.49%. This underperformance was primarily due to the equity market’s strong 4.18% return.

    Market and investment outlook

    The credit market narrative at the start of the year remained largely unchanged, with investor attention focused on the dynamic political landscape, central bank policies, and economic data. Economic indicators, both leading and lagging, continue to emphasize a regional divergence. The US, despite the Federal Reserve’s “higher for longer” stance, continues to demonstrate resilient broad-based strength, underpinned by a robust labour market that has thus far supported consumer spending. Meanwhile, Europe has shown tentative signs of growth acceleration following a Q4 2024 stagnation, with private sector activity in expansionary territory for the second consecutive month.

    Locally, we expect Malta’s economy to continue performing well. The sustained decline in inflation, coupled with recent tax cuts, shall bolster domestic consumer spending. Additionally, the strong influx of tourists in 2024 is a positive sign. Optimism within the tourism sector is expected to grow, benefiting the economy further if this upward trend continues.

    In line with recent portfolio adjustments, we will continue to modify the portfolio’s duration as deemed necessary and appropriate. Additionally, we aim to maintain the fund’s exposure to other European sovereigns, utilizing the permitted 15% maximum allocation.

  • 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*

    -3.68%

    *View Performance History below
    Inception Date: 10 Apr 2018
    ISIN: MT7000022281
    Bloomberg Ticker: CCMIFAB MV
    Distribution Yield (%): 4.25
    Underlying Yield (%): 3.16
    Distribution: 30/04 & 31/10
    Total Net Assets: €16.96
    Month end NAV in EUR: 83.02
    Number of Holdings: 73
    Auditors: Grant Thornton
    Legal Advisor: Ganado Advocates
    Custodian: Sparkasse Bank Malta p.l.c.

    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

    4% Central Business Centres 2033
    4.0%
    3.9% Browns Pharma 2031
    3.5%
    4.65% Smartcare Finance plc 2031
    3.3%
    4.35% SD Finance plc 2027
    3.2%
    3.5% GO plc 2031
    3.2%
    4.5% Endo Finance plc 2029
    3.0%
    3.75% Tum Finance plc 2029
    3.0%
    5.9% Together Gaming Solution 2026
    2.7%
    GO plc
    2.7%
    Harvest Technology plc
    2.6%

    Top Holdings by Country*

    Malta
    94.5%
    Other
    5.5%
    *including exposures to CIS and Cash

    Major Sector Breakdown*

    Financials
    55.2%
    Consumer Staples
    9.6%
    Consumer Discretionary
    9.4%
    Asset 7
    Communications
    8.2%
    Industrials
    7.0%
    Information Technology
    4.7%
    *including exposures to CIS

    Asset Allocation*

    Cash 0.0%
    Bonds 80.4%
    Equities 19.5%
    * including exposures to CIS

    Maturity Buckets*

    40.6%
    0-5 Years
    36.2%
    5-10 Years
    0.6%
    10 Years+
    *based on the Next Call Date

    Performance History (EUR)*

    1 Year

    0.43%

    3 Year

    -1.78%

    5 Year

    -3.68%

    *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 100%
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