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Euro High Income Accumulator

  • INVESTMENT OBJECTIVES

    The CC Euro High Income Bond Fund Accumulator aims to maximise the total level of return for investors through investment in a diversified portfolio of Bonds. To achieve this objective, 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
→ Currencies Available
→ Dividend Payment
→ Monitoring and Pricing
→ Entry and Exit Fees
→ Minimum Investment
→ Fund Rules at a glance
→ Target dividend
→ Other Information

Commentary

May 2020 Commentary

Risky assets have continued to rally throughout the month of May as the gradual re-opening of economies increased optimism for a V-shaped economic recovery from the virus induced turmoil. The strength of the asset price recovery continues to be buoyed by ongoing strong government policy and central bank interventions. That said, in our view, the propagation of the shock to financial markets due to the virus outbreak remains directly linked to the evolution of the virus and the dynamics of the containment measures.

Credit markets have seen healthier liquidity in secondary markets, as continued central bank support measures played their part coupled with stronger participation from market participants. The primary market increased pace throughout the month of May following a standstill month in March, as many corporates were comforted by central banks intervention which kept volatility low, while appetite in the primary re-emerged.

In Europe, the Franco-German recovery deal made the headlines following months of a standstill position. The proposed package of 500 billion euros by Europe’s largest economies was well accepted as market participants were buoyed following the news despite the so-called frugal four members, Austria, Demark, Netherlands and Sweden showing resistance. In addition, another positive soundwave was the unveiled recovery plan of 750 billion euros by the European Commission to help the EU recover from covid-19. The latter will aid also states with the primarily focus on the harsher hit such as Italy and Spain.

From the data front, Europe commenced feeling the pinch of covid-19 with economic numbers showing depressed activity levels. Looking at Europe’s largest economy, Germany, PMIs remain subdued reflecting the weak economic conditions brought about by covid-19. For the month of May Manufacturing PMI, increased slightly to 36.6, compared to a consensus estimate of 36.8, and a previous reading of 34.5, thus still way below the 50 expansionary level. Meanwhile, unemployment ticked higher to 6.3% compared to 5.8% in April, while leading indicators such as the German business expectations surprised to the upside, coming in at 80.1 compared to a forecast of 75.0 and a previous reading of 69.4.

Meanwhile, the Euro Area’s Manufacturing PMI, pointing to a continued contraction in factory activity, albeit showing signs of recovery, with a reading of 39.4 compared to 33.4 in the previous month, however still far below February’s one year high of 49.2. Similarly, Euro Area’s services PMI was 30.5 in its latest reading, significantly higher than the 12.0 recorded in the previous month, however well below February’s 52.6. Moreover, consumer confidence within the Euro area remained weak at -18.8 from -22.0 in the previous month. The slight improvement is attributed to gradual easing of social restrictions, however remains tentative at best. Unemployment continued its upward trajectory to 7.3% from a revised estimate of 7.1%, significantly below economists’ expectations of 8.2%.

Looking at sovereign yields on Europe’s mostly sought benchmark, the 10-year German Bund, closed wider than the previous month at -0.448 compared to -0.589 at the end of last month. Yields across all of the curve widened, with a slightly wider movement in the longer end of the curve largely attributed to a risk-on approach, in addition to possibly initial signs of inflationary market expectations following the announced fiscal measures. Within the HY asset space, yields in May generally tightened, following the risk on approach by the markets that is interpreting a much more swift economic recovery, in addition to support measures taken by both fiscal and monetary politicians to ease the current liquidity fears.

The CC Euro High Income fund, bounced higher by 3.1 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 reduced exposure to bonds listed on the Malta Stock Exchange with the scope of re-allocating to selective higher beta names, which offered significant opportunities. Furthermore, following the remarkable widening within the European IG space, the Manager opted in opening an exposure given the relatively attractive entry levels. Moving forward the Managers believe that credit markets will be aided by the support of primarily monetary politicians, In terms of bond picking the Manager will continue to monitor the current environment and take opportunities in attractive credit stories.

Factsheet

  • NAV/Price: Click here for latest Price

    Sub-Fund Name Euro High Income Bond Fund (Accumulator)
    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 & Associates
    Launch Date 30th May 2013
    Domicile Malta
    Currency Euro (€)
    Dealing Frequency Weekly
    Fund Size €39.42 mn
    Number of Holdings 98
    Initial Charge up to 2.5%
    Management Fee 1%
    Dividend Payment Dates 31 March 30 September
    ISIN numbers EUR – MT7000007761
    Minimum Initial Investment € 2,500
    Minimum Additional Investment € 500

    Historical Performance to Date (Euro)

    Performance History **

    Calendar Year Performance  YTD 2019 2018 Since Inception*
    Share Class A – Total Return -8.38 7.48 -6.45 6.33
    Rolling 12 month performance to last month end 29/05/19  29/05/20 30/05/18 29/05/19 31/05/17  30/05/18 25/05/16  31/05/17
    Share Class A – Total Return -5.14 -0.59 -0.32 6.48

    * The Accumulator Share Class (Class A) was launched on 29 May 2013.

    Top 10 By Country*

    Country %
    Malta 13.9
    France 11.8
    Germany 9.0
    Brazil 7.4
    USA 5.4
    UK 5.0
    Switzerland 4.6
    Russia 3.6
    Spain 3.5
    Mexico 3.3

    *including exposures to CIS

  • Maturity Buckets*

    Age %
    0 – 5 years 59.1
    5 – 10 years 22.1
    10 years+ 4.4

    *based on the Next Call Date

    Top 10 Exposures %

    Exposure %
    Ishares Euro HY Corp 3.0
    Ishares Euro Large Capital 2.9
    2.25% Portugal Treasury 2034 2.6
    5% Nidda BondCo 2025 2.5
    4% Chemours Co 2026 2.2
    4.625% Cemex Finance 2024 2.0
    6% Loxam SAS 2025 1.9
    7.5% Garfunkelux 2022 1.9
    7% Marb BondCo 2024 1.9
    5.375% Ineos Group 2024 1.8

    By Credit Rating*

    Credit Rating %
    BBB 21.9
    BB 25.7
    B 21.1
    CCC+ 6.5
    Less than CCC+ 0.2
    Not Rated 10.2
    Average Credit Rating BB-

    *excluding exposures to CIS

    Currency Allocation

    Currency %
    EUR 84.2
    USD 15.8
    Others 0.0

    Asset Allocation

    Asset %
    Cash 6.2
    Bonds 85.8
    CIS/ETFs 8.0

    Sector Breakdown*

    Sector %
    Financial 24.1
    Consumer, Non-Cyclical 11.4
    Consumer, Cyclical 11.2
    Communications 8.8
    Basic Materials 7.8
    Government 7.1
    Industrial 6.3
    Energy 5.4
    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. 

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.