• Emerging Market Bond Fund Nov 2019_WEB BANNER EURO

EM Bond Fund EUR Distributor

  • Investment Objectives

    The Fund aims to maximise the total level of return for investors through investment primarily, in a well-diversified portfolio of fixed-income investments.

    Key Features of the Fund

    The Fund aims to maximise the total level of return for investors through investment, 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. The Investment Manager is expected to focus on Emerging Market fixed income securities, corporate and/or government, and seek to maintain an average credit quality of “B3” by Moody’s or “B-” by S&P, although issues may be rated lower or higher. The Investment Manager may also invest up to 15% of the Net Assets of the Sub-Fund in Emerging Market equities. The Investment Manager will not be targeting equities of a particular market capitalisation.

    Structure

    The Sub-Fund forms part of the CCFunds™ Sicav plc and operates under the UCITS structure which has become the gold standard for EU investment funds for retail investors. UCITS funds are ideal for retail investors as they have been specifically designed to ensure diversification and liquidity through distinct parameters, permitted asset classes and investment restrictions as set out in EU law.

    Management

    The CC Emerging Market Bond Fund is managed by a group of investment professionals at Calamatta Cuschieri Investment Management Limited who monitor market developments on a daily basis.

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Overview

→ Investor Profile
→ Currencies Available
→ Dividend Payment
→ Monitoring and Pricing
→ Entry and Exit Fee
→ Minimum Investment
→ Fund Rules at a Glance
→ Other Information

Commentary

February 2020 Commentary

With growth settling back to the roughly 2% pace prevailed during the decade-old economic expansion, fears of a global recession lessening, and the manufacturing cycle seemingly heading for a turnaround following a ‘phase one’ agreement between US and China, outlook for 2020 vis-à-vis economic growth seemed positive. Economic data had started to improve whilst yields started to portray the possibility of a broad economic recovery.

Albeit the initial uptick in January, treasury yields traded downwards, as investors; worried about the potential impact on global economic growth and corporate earnings, as a protectionist measure against economic downturn, shunned global equities, wiping out months of gains, and sought the relative safety of sovereigns. Subsequent to the increased demand for safer assets, and reflecting expectations of a possible rate cut, the U.S. 10-year Treasury Yield tumbled by 37.8 basis points, for the month of February and closed the month at 1.126 per cent.

Notably, due to the latter shift towards less risky assets, High Yield bond spreads over treasuries significantly widened, closing-off the month on a much weaker note.

From the data front in the emerging market world, China reported significant drops in its leading indicators, specifically in the Manufacturing and Services PMIs. China’s Manufacturing PMI plunged to 40.3 in February, the lowest level since the survey began in April 2004, and well below preliminary estimates of 45.7. With Chinese authorities imposing restrictions on movement and businesses extending Lunar New Year shutdowns, China’s output supply chain came to a standstill. New orders and employment fell at the steepest rates on record. Exports shrank sharply on the back of shipping restrictions and order cancellations.

Similarly, Services PMI plunged to a record low of 26.5 from 51.8 in the previous month, amid company closures and travel restrictions.

In an attempt to lower financing costs for companies and inject more liquidity into the financial markets, the People’s Bank of China lowered its benchmark 1-year Loan Prime Rate by 10 basis points to 4.05 per cent, and 10 basis points higher than market estimates.

From Latin America, published economic data further affirmed Brazil’s positive run. Notably, albeit slightly lower, business confidence in Brazil remained on a high at 64.80. Among sectors, business confidence weakened in manufacturing and construction, while strengthening in mining.

Meanwhile, Brazil reported a higher Manufacturing PMI for the month, at 52.3 when compared to that of January, standing at 51. The latter reading pointed towards sharpest expansion in factory activity in three months, as output rose amid strong demand, improved economic conditions and stock building initiatives.

In the month of February, the CC EMBF was down just below 2 percent following the remarkable movements seen due to the Covid-19 outbreak. In the month, the Manager continued to raise cash levels based on possibly further widening. The more resilient names were Turkcell, the Turkish telecommunications company, which maintained relatively stable levels on the back of positive operational numbers.

Factsheet

  • NAV/Price: Latest Price available here

    Sub-Fund Name Emerging Market Bond Fund – Class D (Distributor) – EUR
    Investment Manager Calamatta Cuschieri Investment Management Ltd
    Fund Advisor N/A
    Custodian Sparkasse Bank Malta p.l.c.
    Fund Administrator CC Fund Services (Malta) Limited.
    Auditors Deloitte Malta
    Legal Advisors Ganado Advocates
    Launch Date 02 November 2017
    Domicile Malta
    Currency Euro (€)
    Dealing Frequency Daily
    Fund Size $12.0 m
    Number of Holdings 40
    Initial Charge up to 2.50%
    Management Fee 1.10%
    Dividend Payment Dates 31 March – 30 September
    ISIN number MT7000021259
    Minimum Initial Investment €2,500
    Minimum Additional Investment €500

    Top 10 By Country*

    Country %
    Brazil 19.1
    Malta (incl. cash) 16.1
    China 12.2
    Russia 10.6
    Turkey 9.9
    Mexico 9.1
    Indonesia 4.9
    Netherlands 3.5
    Germany 2.7
    Argentina 2.7

    *including exposures to CIS, using look-through.

    Maturity Buckets*

    Age %
    0 – 5 years 63.8
    5 – 10 years 15.5
    10 years+ 7.4

    * based on the Next Call Date

    Performance History **

    Calendar Year Performance  YTD 2019 2018 2017*** Since
    Inception ***
    Share Class D – Total Return -2.26 6.55 -9.25 -1.34 -6.76
    Total Return 1-month 3-month 6-month 9-month 12-month
    Share Class D – Total Return -2.45 -1.01 -0.58 0.13 0.64

    * Data in the chart does not include any dividends distributed since the Fund was launched on 03 November 2017.
    ** 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 EUR Distributor Share Class (Class D) was launched on 03 November 2017.

  • Historical Performance to Date *

    Top 10 Exposures %

    Exposure %
    iShares JPM EM Bond Fund 5.4
    6.50% Global Ports 2023 3.7
    4.95% Veon Holdings 2024 3.5
    4.95% Gazprom Capital 2022 3.5
    6.625% Tupy Overseas 2024 3.4
    5.45% Cemex 2029 3.3
    5.80% Turkcell 2028 3.3
    8.125% Global Liman 2021 3.2
    6.95% Moderland 2024 3.2
    6.90% Yestar Healthcare 2021 3.0

    By Credit Rating *

    Credit Rating %
    Investment Grade 18.6
    BB 45.0
    B 23.1
    CCC+ 0.0
    Less than CCC+ 0.0
    Not Rated 0.0
    Average Credit Rating BB

    * excluding exposures to CIS

    Currency Allocation

    Currency %
    USD 92.0
    EUR  8.0
    TRY 0.0

    Asset Allocation

    Asset %
    Cash 9.3
    Bonds (incl. ETFs) 90.7
    Equities (incl. ETFs) 0.0

    Sector Breakdown*

    Sector %
    Consumer, Non-Cyclical 20.8
    Communication 12.2
    Financial 10.9
    Government 9.7
    Consumer, Cyclical 9.2
    Energy 8.7
    Basic Materials 8.4
    Industrial 5.4

    *excluding exposures to CIS

Legal Information

CALAMATTA CUSCHIERI INVESTMENT SERVICES (CCIS) IS A FOUNDING MEMBER OF THE MALTA STOCK EXCHANGE AND IS LICENSED TO CONDUCT INVESTMENT SERVICES IN MALTA BY THE MALTA FINANCIAL SERVICES AUTHORITY. THE CC EMERGING MARKET BOND FUND IS A SUB FUND OF CCFUNDS™ SICAV PLC AND IS AUTHORISED BY THE MFSA. PERFORMANCE FIGURES QUOTED REFER TO THE PAST AND ARE NOT A GUARANTEE FOR FUTURE PERFORMANCE. THE VALUE OF THE INVESTMENT MAY RISE AS WELL AS FALL. INVESTORS MAY INCUR A SUBSCRIPTION CHARGE AND MAY BE SUBJECT TO TAX ON DISTRIBUTIONS. INVESTMENT SHOULD BE BASED ON THE CCFUNDS™ SICAV PLC PROSPECTUS AND KIID DOCUMENT, WHICH MAY BE OBTAINED FROM CCIS OFFICES. ISSUED BY CCIS.

*LAST 12 MONTHS DISTRIBUTION YIELD (01/04/2018 - 31/03/2019) SOURCE: CALAMATTA CUSCHIERI INVESTMENT MANAGEMENT. PERFORMANCE FIGURES QUOTED REFER TO THE PAST AND ARE NOT A GUARANTEE FOR FUTURE PERFORMANCE. THE VALUE OF THE INVESTMENTS INCLUDING CURRENCY FLUCTUATIONS, AND INCOME FROM THEM CAN GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED.

THIS DOCUMENT IS PREPARED FOR INFORMATION PURPOSES ONLY AND SHOULD NOT BE INTERPRETED AS INVESTMENT ADVICE. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION BY CCIS TO ANY PERSON TO BUY OR SELL ANY INVESTMENT. CCIS HAS BASED THIS DOCUMENT ON INFORMATION OBTAINED FROM SOURCES IT BELIEVES TO BE RELIABLE BUT WHICH HAVE NOT BEEN INDEPENDENTLY VERIFIED. THIS DOCUMENT MAY NOT BE REPRODUCED EITHER IN WHOLE, OR IN PART, WITHOUT THE WRITTEN PERMISSION OF CCIS.

THIS IS NOT A CAPITAL GUARANTEED PRODUCT ACCORDINGLY THE VALUE OF YOUR INVESTMENT CAN GO DOWN AS WELL AS UP. INVESTORS SHOULD NOTE THAT THE PAYMENT OF DIVIDENDS HAS THE EFFECT OF REDUCING THE NAV PER SHARE.