• Emerging Market Bond Fund_EMBF_April 2019-02

EM Bond Fund USD Accumulator

  • Investment Objectives

    The objective of the Sub-Fund is to endeavour to maximise the total level of return for investors through investment primarily, in a well-diversified portfolio of debt securities and other fixed-income or interest bearing securities.

    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.

Overview

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

Commentary

July 2019 Commentary

Markets saw a mixed sentiment throughout the whole of July; uncertainties revolving around the Fed’s decision to a cut rates along with ECB’s Mario Draghi hinting at easing were the stars of the month. Needless to say, investors were seen to take a cautious approach during the month after the rally seen in the month of June. By the end of July, the Fed cut rates by 25bps, a move which was not digested positively by markets that expected a more aggressive stance. On the other hand, Mario Draghi left rates unchanged, however indicated that the downward trend in data will be monitored and easing actions will be taken if deemed necessary.

In the Emerging Market world, Turkey’s consumer inflation slowed to its lowest level in June due to a high base effect from the prior year and a drop in food prices. This potentially led Turkey’s central bank to sharply cut its key interest rates by a more than expected, 425bps after the central bank governor was fired.

We also saw China’s factory activity shrink for the third month in a row in July and Q2 GDP was the weakest data seen in 27 years, underlining the growing strains placed on the world’s second largest economy. In addition, China‘s June surplus widened to USD 50.98 billion from USD 40.91 billion as exports fell by 1.3 percent, while imports decreased at a faster pace of 7.3 percent. In the month of July, tables turned as the U.S economy improved and the Chinese economy deteriorated. That being said, the People’s Bank of China (PBOC) has finally started to ease monetary policy conditions for consumers and businesses. In order to maintain growth following the U.S tariffs, the PBOC produced a coordinated response in the form of liquidity stimulus and fiscal measures. To underline its easing bias, the PBOC provided another 100bps cut to its reserve requirement ratio, injecting further liquidity.

The emerging market that outshined during the month of July was Brazil especially due to the news that the government plans to go ahead with the pension reform that could result savings amounting to USD 900 billion. Trump has also offered Brazil the chance to negotiate a free trade deal that the country was keen on accepting. In addition to, Brazil’s poultry exports increased by 64 percent in June and hence, revenue increased by 76.6 percent year-on-year. This resulted in a positive for the Brazilian names our fund holds.

Furthermore, in anticipation of the Fed’s rate cut, emerging market countries followed the steps of the Fed and cut rates. The Central Bank of Russia, South Korea’s central bank and the Bank of Indonesia all cut their rates by 25bps and hinted that more cuts were likely this year. The Reserve Bank of India also hinted that markets should see a series of rate cuts equivalent to 100bps depending on the economic data produced.

In the month, Emerging markets saw a 1 percent gain in the month of July, once again beating European High Yield and U.S High Yield. Emerging markets have shown more resilience to the ongoing trade war uncertainties due to reporting overall positive economic data from various EMs, in addition to a relatively stable dollar currency.

The Manager believes that emerging market valuations possibly still offer value. However, the Manager in the month opted in de-risking the portfolio from specifics, while it opted to seek value in other geographical regions in which the Manager believed there is value, with the likes of CSN that benefitted from iron ore prices.

Factsheet

  • NAV/Price: Latest Price available here

    Sub-Fund Name Emerging Market Bond Fund – Class A (Accumulator) – USD
    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 USD ($)
    Dealing Frequency Daily
    Fund Size $11.1 M
    Number of Holdings 40
    Initial Charge up to 2.50%
    Management Fee 0.011%
    Dividend Payment Dates N/A
    ISIN number MT7000021226
    Minimum Initial Investment $3,000
    Minimum Additional Investment $500

    Top 10 By Country*

    Country %
    Brazil 15.7
    Malta (incl. cash) 11.8
    China 11.6
    Russia 11.4
    Turkey 8.9
    Indonesia 8.8
    Netherlands 3.8
    United States 3.8
    Mexico 3.7
    Argentina 3.5

    *including exposures to CIS, using look-through.

    Maturity Buckets*

    Age %
    0 – 5 years 68.6
    5 – 10 years 10.6
    10 years+ 7.5

    * based on the Next Call Date

    Performance History

    Calendar Year Performance  YTD 2018 2017*** 2016 Since
    Inception*
    Share Class A – Total Return 7.91 -6.17 -0.21 - 1.04
    Total Return 1-month 3-month 6-month 9-month 12-month
    Share Class A – Total Return -0.05 1.92  4.70 8.24 5.68

    * The USD Accumulator Share Class (Class A) was launched on 03 November 2017.

  • Performance History

    Top 10 Exposures %

    Exposure %
    5.299% Petrobras 2025 4.4
    6.50% Global Ports 2023 3.9
    4.95% Veon Holdings 2024 3.8
    4.95% Gazprom Capital 2022 3.8
    7.25% JBS 2024 3.7
    6.625% Tupy Overseas 2024 3.7
    8.125% Global Liman 2021 3.6
    6.95% Moderland 2024 3.5
    6.90% Yestar Healthcare 2021 3.1
    5.00% Nidda 2025 3.0

    By Credit Rating *

    Credit Rating %
    Investment Grade 18.9
    BB 40.7
    B 26.6
    CCC+ 1.8
    Less than CCC+ 0.0
    Not Rated 0.0
    Average Credit Rating BB

    * excluding exposures to CIS

    Currency Allocation

    Currency %
    USD 93.6
    EUR 6.4
    TRY 0.0

    Asset Allocation

    Currency %
    Cash 11.1
    Bonds (incl. ETFs) 86.7
    Equities (incl. ETFs) 2.2

    Sector Breakdown*

    Sector %
    Consumer, Non-Cyclical 19.6
    Communications 13.1
    Government 13.0
    Financial 11.6
    Energy 10.9
    Consumer, Cyclical 9.1
    Basic Materials 7.5
    Industrial 3.1

    *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.

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.