• Euro-High-Income-Distributor-Institutional-

Euro High Income Distributor Institutional

  • INVESTMENT OBJECTIVES

    The CC Euro High Income Bond Fund Distributor aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. The Investment Manager invests primarily in a diversified portfolio of over 65 intermediate term, corporate & government bonds with maturities of 10 years and less.

    STRUCTURE

    The Fund operates under the UCTIS 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 Funds are managed by a group of investment professionals at Calamatta Cuschieri Investment Management Limited who monitor developments on a daily basis.

Overview

→ Investor Profile
→ Dividend Payment
→ Dividend Re-Payment
→ Monitoring and Pricing
→ Entry and Exit Fees
→ Minimum Investment
→ Fund Rules at a glance
→ Target dividend
→ Other Information

Commentary

June 2020 Commentary

June saw another strong performance for risk assets, capping off an astonishing quarter that has seen all non-currency assets with a positive return over the last three months. Obviously that comes on the back of an appalling Q1 when financial markets reacted to the coronavirus pandemic, but the gains from Q2 now means that generally speaking asset classes have recovered most of the year-to-date losses, and some even posting positive returns. Much of these gains have come about thanks to slowing rates of case growth and moves to reopen major economies, as well as remarkable levels of stimulus from governments and central banks across the world. However, in the last couple of weeks there’ve been signs once again of an acceleration in case growth in some countries, including the United States, raising fears for where things might be heading in the second half.

Credit markets bounced with healthy levels of liquidity in secondary markets, as continued central bank support measures played their part coupled with stronger participation from market participants. The primary market continued its show of strength during the month of June, as corporates took advantage of the supportive environment to sure up funding for the foreseeable future. Indeed, primary issuance is expected to taper towards the end of H2 on a comparative basis, as most the corporate funding needs would have been met.

In Europe, the activity by the ECB remained supportive for credit markets, helping to push spreads tighter. In the real economy, a V-shaped scenario is looking less likely, as companies continue to struggle with the latent pick-up in activity. Many headline-grabbing names have announced major cuts to their workforce or outright defaulted.

From the data front, European data was mixed as the economic impact as a result of covid-19 remains significant with economic numbers showing depressed activity levels. Looking at Europe’s largest economy, Germany, PMIs improved but remained below the expansionary level. For the month of May Manufacturing PMI, increased to 45.2, compared to a consensus estimate of 44.6, and a previous reading of 36.6. Meanwhile, unemployment ticked higher to 6.4% compared to 6.3% in May, while leading indicators such as the Eurozone Consumer Confidence, remained weak coming in at -14.7, in line with expectations, compared to a previous reading of -18.8.

Meanwhile, the Euro Area’s Manufacturing PMI, pointed to a continued contraction in factory activity, albeit showing signs of recovery, with a reading of 47.4 compared to 39.4 in the previous month, above expectations of 46.9, edging towards expansionary territory. Similarly, Euro Area’s services PMI was 48.3 in its latest reading, significantly higher than the 30.5 recorded in the previous month, and above consensus. Unemployment continued its upward trajectory to 7.4% from 7.3%, below economists’ expectations of 7.7%.

Looking at sovereign yields on the 10-year German Bund, Europe’s mostly sought benchmark closed marginally tighter than the previous month at -0.453 compared to -0.448 at the end of last month after some widening in the first week in June. Yields across all of the curve tightened, with a larger movement in the longer end of the curve largely attributed to an increase in expectations for when activity levels will return to pre-Covid levels. Bund performance remains in positive territory (+2.3%) since the start of the year. Within the HY asset space, yields in June generally tightened, following the risk on approach by the markets that is interpreting a much more swift economic recovery, following the re-opening of a number of economic sectors, in addition to continued fiscal and monetary support measures. A stronger recovery was witnessed in European High Yield compared to the US, however this was largely attributed to the lagging performance of European debt over the past two months.

The CC Euro High Income fund, bounced higher by 2.1 percent, in line with the upward market moves. On a year-to-date basis, the fund is slightly underperforming on a net basis due to the lower beta of the portfolio, albeit the volatility of the fund has been markedly lower than average.Throughout the month, the manager continued to reduce exposure to bonds listed on the Malta Stock Exchange with the scope of re-allocating to selective higher beta names, including the financial sector, which offered significant opportunities.Moving forward the Managers believe that credit markets will continue to be aided by the support of primarily monetary politicians, creating a positive technical environment. In terms of bond picking, the Managers will continue to monitor the current environment and take opportunities in attractive credit stories.

Factsheet

  • NAV/Price: Latest Price available here

    Sub-Fund Name Euro High Income Bond Fund (Distributor) Institutional
    Investment Manager Calamatta Cuschieri Investment Management Ltd
    Fund Advisor DF – Asset Allocation (Lugano, Switzerland)
    Custodian Sparkasse Bank Malta p.l.c.
    Fund Administrator CC Fund Services (Malta) Limited
    Auditors Deloitte Malta
    Legal Advisors Ganado Advocates
    Launch Date 24th April 2020
    Domicile Malta
    Currency Euro (€)
    Dealing Frequency Weekly
    Fund Size €40.35 mn
    Number of Holdings 96
    Initial Charge up to 2.5%
    Management Fee 0.95%
    Dividend Payment Dates 31 March – 30 September
    ISIN numbers EUR – MT7000003059
    Minimum Initial Investment € 2,500
    Minimum Additional Investment € 500

    Historical Performance to Date (Euro)

    Performance History **

    Calendar Year Performance 2016 2015 2014 Since Inception*
    Share Class D – Total Return 6.17 -  - 6.17
    Calendar Year Performance YTD 2019 2018 2017
    Share Class D- Total Return 3.72 - - -
    Rolling 12 month performance to last month end 26/06/1930/06/20 30/06/1826/06/19 30/06/1730/06/18 30/06/1630/06/17
    Share Class E- Total Return - - - -

    * The Distributor Share Class (Class F) was launched on the 24th April 2020.

    Top 10 By Country*

    Country %
    France 12.5
    Malta 11.7
    Germany 9.8
    Brazil 7.3
    USA 5.5
    UK 4.9
    Switzerland 4.6
    Spain 3.9
    Mexico 3.3
    Ireland 3.0

    *including exposures to CIS

  • Maturity Buckets*

    Age %
    0 – 5 years 59.0
    5 – 10 years 20.1
    10 years+ 3.2

    *based on the Next Call Date

    Top 10 Exposures %

    Exposure %
    iShares Euro Corp Large Cap 3.9
    iShares Euro HY Corp 3.0
    2.25% Portugal Treasury 2034 2.5
    5% Nidda BondCo 2025 2.5
    6.5% CMA CGM 2022 2.4
    4% Chemours Co. 2026 2.3
    4.625% Cemex Finance 2024 2.0
    6% Loxam SAS 2025 1.9
    7.5% Garfunkelux 2022 1.9
    7% Marb BondCo 2024 1.8

    By Credit Rating*

    Credit Rating %
    AAA to AA- 3.9
    BBB+ to BBB- 14.6
    BB+ to BB- 26.2
    B+ to B- 21.3
    CCC+ 6.8
    Less than CCC+ 1.3
    Not Rated 8.2
    Average Credit Rating BB-

    *excluding exposures to CIS

    Currency Allocation

    Currency %
    EUR 84.3
    USD 15.7
    Others 0.0

    Asset Allocation

    Currency %
    Cash 8.7
    Bonds 82.3
    CIS/ETFs 9.1

    Sector Breakdown*

    Sector %
    Financial 0.7
    Consumer, Cyclical 12.2
    Consumer, Non-Cyclical 11.2
    Communications 8.7
    Basic Materials 8.2
    Industrial 7.6
    Government 7.0
    Energy 3.8
    Utilities 1.9

    *excluding exposures to CIS

Legal Information

THIS DOCUMENT HAS BEEN ISSUED BY CALAMATTA CUSCHIERI INVESTMENT SERVICES LTD (“CCIS”). 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. 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. 

*LAST 6 MONTHS DISTRIBUTION YIELD (ANNUALISED) (1/10/2019 – 31/03/2020) 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.

CALAMATTA CUSCHIERI INVESTMENT SERVICES LTD. (CCIS) IS LICENSED BY THE MFSA. THE CC EURO HIGH INCOME BOND FUND IS A SUB FUND OF CCFUNDS SICAV PLC AND IS AUTHORISED BY THE MFSA. INVESTORS MAY INCUR A SUBSCRIPTION CHARGE AND MAY BE SUBJECT TO TAX ON DISTRIBUTIONS. INVESTMENT SHOULD BE BASED ON THE PROSPECTUS AND KIID DOCUMENT, WHICH MAY BE OBTAINED FROM CCIS OFFICES.

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.