Liquidity is the term used to describe how quickly the underlying Fund assets may be bought or sold (converted to cash) without having an impact on the value of said asset. The Lowes UK Defined Strategy fund (“the Fund”) provides investors with daily liquidity, allowing investors to subscribe and/or redeem on a daily basis (subject to the terms disclosed in the Fund Supplement).
Individual structured products held outside of a Fund are often perceived as illiquid investments, as they are designed to be held until the end of a specified investment term, or until an early maturity is triggered. However, many products now incorporate autocall ‘kick-out’ features, giving investors the opportunity (under pre-defined circumstances) to receive their capital plus a return proportionate to the time the structured product was held, and the level of risk taken by the investor. It is possible to surrender individual structured products that are held outside of a Fund. Although, the return varies depending on the structured products value which is quoted on the secondary market by the issuing counterparty, in addition to any early surrender fees which may be levied by the structured product provider. An investor should note that early surrender may result in a loss to investors’ original capital, while holding the structured product to maturity may have resulted in a different outcome to that of a loss. By packaging individual structured notes into a Fund, this issue is potentially removed as we will endeavor to explain below.
The Fund provides liquidity by holding a cash reserve, alongside other highly liquid assets such as short-dated Gilts. As a result, these assets offer high liquidity with a very low level of risk so the underlying auto-callable notes which generate the Fund’s returns may not need to be unwound in the event of an investors’ withdrawal. However, there is an anti-dilution levy applicable to withdrawals equal to or greater than 5% of the net asset value of the Fund, which aims to protect investors in the Fund from investors who seek to withdraw a large holding of the Fund at once.
The Lowes UK Defined Strategy Fund offers daily pricing. Every Irish business day the underlying assets of the Fund are valued using close of business prices on the relevant dealing day, providing investors with an up-to-date valuation of their holdings as of the end of the previous business day. Investors can find the most recent valuation for the Fund through their relative platform used to hold the Fund, or alternatively on our websites at UKDSF.com or Lowes.co.uk/fund-prices. Should investors choose to make a withdrawal from the Fund, they should receive their withdrawn capital within four business days of requesting withdrawal, so long as the withdrawal request complies with the requirements stipulated in the Fund Prospectus/Supplement, access information is located at the end of this article.
If you would like to know more about the Lowes UK Defined Strategy Fund, please visit the Fund website UKDSF.com for the Key Investor Information Document (“KIID”), Prospectus, and Supplement or call Lowes Investment Management on 0191 281 88 11.
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 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.