28 February 2022
The Fund fell by 0.19% in February, whilst its performance comparator of cash (as measured by the Bank of England’s Sterling Overnight Index Average (“SONIA”)) + 5%, rose by 0.41%.
The UK stock market started February positively, but this quickly fell away as the sad events in Ukraine developed. The uncertainty of the situation, the extent of future sanctions to be imposed by western nations on Russia, and the effects all this will have on company earnings, inflation and economic growth left investors nervous. After being up by 2.79% on the 10th, the FTSE 100 Index fell 6% over the next fortnight to be 3.44% down by the 24th, before recovering to end the month down 0.08%.
One strategy had an observation point in February – a gilt-backed over the counter contract taken out in February 2021. This strategy needed the FTSE CSDI Index to be at or above its starting level of 149.97 on the observation date to mature with a gain. The Index was comfortably above this level triggering the maturity of the strategy after just one year with a gain of 7.87%.
The strategy was replaced with a new one later in the month, taking advantage of the sudden falls in the market described above. Based on the FTSE CSDI index again, this is a maximum eight-year gilt-backed over the counter strategy, where the index must be above a falling reference level on any anniversary to mature with a gain, paying 8.53% simple for each year it is in force. In the first two years the reference level is 100% of the level at its start, years three to six see the level drop to 95% of the starting level, with the final two years only needing the index to be above 90% of its initial value.
Further details of all the strategies within the fund can be found on the Fund’s website: www.UKDSF.com.
The Lowes UK Defined Strategy Fund is a sub-fund of the Skyline Umbrella Fund (ICAV) and is regulated by the Central Bank of Ireland. The KIID, Prospectus, and Supplement can be accessed by visiting UKDSF.com/literature and are only available in English.
Lowes Investment Management Ltd, Fernwood House, Clayton Road, Newcastle upon Tyne, NE2 1TL. Authorised and regulated by the Financial Conduct Authority.