31 October 2023
The Fund fell by 1.14% in October, taking the year-to-date return to 3.28%.
October was a poor month not only for UK equities, but for the main indices around the globe. Despite the Bank of England deciding not to raise interest rates further in the month, labour markets continued to be tight, which raised the likelihood that rates would remain higher for longer. The fear is that a sustained period of high rates will reduce economic activity, and consequently corporate earnings will fall down the line. The UK equity market, as measured by the FTSE 100 index, fell by 3.76% over the month, so it was pleasing to see that despite the Fund also falling, it did provide some protection.
(Source of all figures: FE Analytics)
One strategy had an observation point in the month, namely Strategy 32, a gilt backed contract linked to the FTSE CSDI. This Strategy needed the index to be at or above its starting level on any anniversary to mature with a gain of 8.08% for each year it was in force. As it turned out, on its second anniversary the index was up 2.50% and as such the strategy matured with a gain of 16.16%.
One new strategy was also added in October. Strategy 65 is a structured note linked to the FTSE CSDI, with Goldman Sachs as the counterparty. A maximum eight-year contract, it needs the index to be at or above its starting level on any anniversary to mature with a positive return, accumulating a 10.3% coupon for each year it is in force.
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.