The performance of the Fund was down in October, falling -0.63%.
(Source of all figures: FE Analytics)

October proved a difficult month for equity markets in general. There was weakness across European and UK equity indices, with the EuroStoxx 50 Index down -3.46% in local currency terms, and the FTSE 100 Index down -1.54%. In the US, the S&P 500 Index also ended in negative territory following weakness in tech stocks at the end of the month, whilst in China the fall was caused by investors taking profits following the surge in prices at the end of September. The Japanese market was one which did manage to post a gain, as the Nikkei 225 Index ended up 3.06%, again in local currency terms, supported by the Bank of Japan keeping interest rates on hold.

No strategies had an observation date during October, however two new strategies were added during the month.

The first, Strategy 84, is an eight-year over the counter trade which is collateralised with short-dated gilts. It requires the FTSE CSDI index to be at least 5% up on the first anniversary to mature with a gain of 8.89%. If not, then it carries on to the next anniversary, and potentially a further six anniversaries after that, with the FTSE CSDI index needing to be at or above its initial level to trigger a maturity, adding a further 8.89% for each year it is in force.

The second, Strategy 85, is an eight-year strategic note with Natixis as the counterparty. Again linked to the FTSE CSDI Index, the terms are similar to Strategy 84, with the index needing to be at least 5% up on the first anniversary to mature with a gain, and if not, then it carries on to the next anniversary, with the FTSE CSDI index needing to be at or above its initial level to trigger a maturity. For accepting the counterparty risk of Natixis, however, this strategy provides a higher coupon of 10.05% for each year it is in force.

Summary
The Fund continues to remain positive year to date. Spread over twenty-five different strategies, it remains well diversified in terms of observations dates, observation levels and counterparty exposure. Gilt-backed strategies remain the largest allocation, while the strategies in note form are diversified across ten counterparty banks. Details of the current strategies and the investment banks used, along with further information on the fund, can be found at UKDSF.com.

We hope this update provides you with a flavour of how the Fund is currently positioned.

Further details of this and all the other strategies within the Fund can be found on the Fund’s website: www.UKDSF.com.

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 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.