Monthly Update
31 March 2023


The Fund was flat in March, down 0.01% over the month, whilst its performance comparator of cash (as measured by the Bank of England’s Sterling Overnight Index Average (“SONIA”)) + 5% rose 0.75%. It remained positive for the year to date at 2.02%, compared to 2.16% for the comparator.

(Source of all figures: FE Analytics)

As with most regions, UK equities struggled during March. Despite starting positively, within a week sentiment had turned as problems appeared in the banking sector, led by the collapse of Silicon Valley Bank in the United States, and followed by Credit Suisse in Europe. Thankfully it quickly became clear these were individual cases and not a systemic issue as witnessed in 2008-09, and markets began to recover again towards the end of the period. The UK market, as measured by the FTSE 100 index, still finished the month down 3.1% on a capital only basis, again highlighting the protection the Fund can provide in a falling market.

One strategy matured within the Fund during March. A contract collateralised with short-dated gilts, it required its underlying index, the FTSE CSDI, to be at or above its starting level to mature with a gain on its first anniversary. The index was indeed up on the observation date triggering the strategy to mature with a gain of 11.8%.

The proceeds, plus some additional capital, were rolled straight into Strategy 53, this time in the form of a structured note with Morgan Stanley as the counterparty. A step-down shape linked to the FTSE CSDI index, it offered a coupon of 9.37% each year, with the level required for the strategy to mature dropping from its initial level after the second anniversary.

Some of the inflows into the Fund were also used to increase the size of Strategy 43. Despite pricing above par, with just three months to go until its first observation point this strategy offered an enhanced annualised return if it were to mature then, with the underlying index being able to fall 4.88% from its level at that time whilst still giving rise to an early maturity.

Further details of all the strategies within the fund can be found on the Fund’s website:

The value of this investment can fall as well as rise and investors may get back less than they originally invested.
The Fund is suitable for investors who are seeking capital growth over a medium to long term horizon but who are willing to tolerate medium to high risks due to the potentially volatile nature of the investments.
This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.

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 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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