Monthly Update
30 April 2023
The Fund rose by 1.04% in April, ahead of its performance comparator of cash (as measured by the Bank of England’s Sterling Overnight Index Average (“SONIA”)) + 5% which rose 0.69%. It is also positive for the year to date at 3.08%, compared to 2.86% for the comparator.
(Source of all figures: FE Analytics)
April was a good month for UK equities; by the end of April the UK equity market, as measured by the FTSE 100 Index, was back to where it had been at the beginning of March.
With the losses hastened in part by the collapse of Silicon Valley Bank and Credit Suisse in March being quickly reversed. The lack of any sign of contagion effect across the banking sector as a whole meant investor confidence continued to return over the month. This was also helped by the inflation figures issued in April being slightly lower than the previous month. Although higher than predicted, it was hoped that inflation had now peaked, reducing the pressure on the Bank of England to raise the base rate much further.
Three strategies matured within the Fund during April. All three were gilt-collateralised contracts, with the FTSE CSDI as the underlying index in each case. Although two were step down strategies, where the required index level drops over time, as this was the first observation point for them all, they all required the index to be at or above its starting level to mature with a gain. The index was indeed higher in each case triggering the strategies to mature with gains of 8.38% and 9.04% for the two step down contracts, and 10.50% for the at the money contract.
The proceeds from the first maturity, plus some additional capital, were rolled straight into Strategy 55, another gilt-collateralised contract. A step-down shape linked to the FTSE CSDI index, it offers a potential coupon of 8.31% each year, with the level required for the strategy to mature dropping from its initial level after the second anniversary.
The two other maturities happened too late in the month to be reinvested in April, but the proceeds of these will be invested in May.
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.
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