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Euro High Income Bond Fund

  • 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
→ Currencies Available
→ 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 2019 Commentary

June was an eventful month for markets and the performance was a breath of fresh air after May’s sell-off and the associate spike in volatility. The month closed with the G-20 meeting that resulted in a restart in trade consultations between the U.S and China as well as an agreement of not imposing new tariffs. In addition to, the Fed’s released minutes during the month increased the odds of a rate cut by the end of July i.e. adding further monetary stimulus in an attempt to delay a potential recession.

Brexit remains a major problem for Europe given that the sentiment of the successive Prime Minister candidates under consideration, are in favour of a no-deal Brexit. Moreover, the Italian economy continues to lag in comparison to its European peers based on a conflict with the European Commission in regards to the budget celling. Such conflict could potentially cause the European Commission to take measures against Italy.

On a more general note, inflation in the Eurozone has not been in line with ECB expectations as core and headline inflation were lower. Due to this, ECB President Draghi indicated that additional monetary stimulus was on the horizon, which caused an upbeat in European stock markets and European bond yields to tumble driving prices higher. Indeed, we have continued to see the 10-year Bund turning to negative levels of circa 0.332 percent this month from the positive 0.2 percent levels in January.

In addition, Eurozone’s manufacturing PMI showed slight weakness leading to the fifth straight month of contraction in factory activity amid ongoing global trade tensions and political uncertainty. Despite this, European High Yield gained 2.39 percent, the highest level on a year to date basis, with tighter spreads than the U.S from 432bps, in the previous month, to 371bps.

In the month of June, the Manager opted in de-risking the portfolio due to specific risks – a move to protect the year-to-date performance. In addition, the Manager opted to take a tactical allocation by opening a position in U.S Treasuries based on a more accommodative Federal Reserve. A trade that proved to be in line with the Manager’s expectations. Going forward, the Manager believes that the maintained accommodative stance by leading central banks will sustain credit markets.

Factsheet

  • NAV/Price: Latest Price available here

    Sub-Fund Name Euro High Income Bond Fund (Distributor)
    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 1st September 2011
    Domicile Malta
    Currency Euro (€)
    Dealing Frequency Weekly
    Fund Size €45.3 mn
    Number of Holdings 94
    Initial Charge up to 2.5%
    Management Fee 1%
    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 2013 2012 2011*** Since Inception***
    Share Class D – Total Return 6.43  17.07  -0.75  35.49
    Calendar Year Performance YTD 2018 2017 2016
    Share Class D- Total Return 4.87 -6.44 5.31 4.97
    Rolling 12 month performance to last month end 30/06/18

    26/06/19

    30/06/17

    30/06/18

    30/06/16

    30/06/17

    30/06/15

    30/06/16

    Share Class D- Total Return 1.38 -1.28  6.82  0.66

    *Data in the chart does not include any dividends distributed since the Fund was launched on 1st September 2011.

    **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 Distributor Share Class (Class D) was launched on 01 September 2011.

    Top 10 By Country*

    Country %
    France 11.4
    Germany 10.2
    Malta 9.5
    Spain 8.6
    Brazil 6.5
    USA 5.4
    Switzerland 4.7
    Russia 3.2
    UK 3.1
    Ireland 2.8

    *including exposures to CIS

  • Maturity Buckets*

    Age %
    0 – 5 years 51.3
    5 – 10 years 16.0
    10 years+ 0.3

    *based on the Next Call Date

    Top 10 Exposures %

    Exposure %
    4.125% HP Pelzer 2024 2.3
    4.00% Chemours 202 2.2
    5.00% Nidda Bondco 2025 2.2
    6.00% Loxam 2025 2.1
    5.00% Tendam 2024 2.0
    5.875% Selecta 2024 1.9
    6.25% Synlab 2022 1.8
    6.75% Promontoria 2023 1.7
    7.50% Garfunkelux 2022 1.6
    7.00% Marb Bondco 2024 1.6

    By Credit Rating*

    Credit Rating %
    BBB 16.0
    BB 25.1
    B 32.8
    CCC+ 1.7
    Less than CCC+ 0.7
    Not Rated 9.0
    Average Credit Rating BB-

    *excluding exposures to CIS

    Currency Allocation

    Currency %
    EUR 85.1
    USD 14.9
    Others 0.0

    Asset Allocation

    Currency %
    Cash 10.9
    Bonds 85.4
    CIS/ETFs 3.7

    Sector Breakdown*

    Sector %
    Financial 24.9
    Consumer, Cyclical 14.3
    Consumer, Non-Cyclical 11.5
    Industrial 9.5
    Basic Materials 8.8
    Communications 6.3
    Energy 5.0
    Government 2.4
    Utilities 1.7

    *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 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.

CALAMATTA CUSCHIERI INVESTMENT SERVICES LTD. (CCIS) IS LICENSED BY THE MFSA. THE CC 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.