31 July 2022
The Fund rose by 3.22% during July, ahead of its performance comparator of cash (as measured by the Bank of England’s Sterling Overnight Index Average (“SONIA”)) + 5% which rose by 0.48%.
Strong expectations of central banks raising interest rates further to quell inflation helped calm equity markets in July. In the US the Fed met those expectations, raising rates by 0.75% at its meeting, with the comments accompanying the rate decision also helping to give markets confidence that they may be more accommodating in the future. In the UK, the second half of the month saw a strong performance from the oil companies on the back of recent oil and gas price rises which also helped lift the FTSE 100 index, where they form a major proportion of the constituent companies. The index rose 3.55% over the month on a capital basis, only just ahead of the Fund.
(Source of all figures: FE Analytics)
Three strategies had observation points in July. The first required the FTSE 100 index to be at or above its starting level on the observation date to mature. The index was down 4.17% at that point, so the strategy moves on to its next anniversary, the first of a further five opportunities to mature in the future with the total potential gain rising by 8.31% each year.
It was a similar story for the second strategy, with the FTSE 100 index being below the original strike level so the strategy moves on to next year. In this case, however, after next year the reference level required drops each year with the strategy only needing the index to be more than 80% of its initial level to mature in the final year with a gain.
The third was a structured note taken out last year. Linked to the FTSE CSDI index, with Goldman Sachs as the counterparty, it matured on its first anniversary, returning a gain of 9.05%.
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.