The Fund was up 0.67% in February.
(Source of all figures: FE Analytics)

Equity market performance was mixed during February. Chinese indices were strong performers, thanks in particular to a strong performance from technology stocks, which helped to lift emerging market equities in general. European stocks also remained in favour as they continued their year to date rebound from low valuations relative to other markets. At the other end of the spectrum, Japanese stocks were weaker. Inflation there remains at a level which may justify another interest rate rise, possibly leading to a stronger yen, which is historically seen as a negative for the equity market.

In the UK there was weakness in small and mid-cap stocks on the back of concern over economic growth. Larger cap companies, which tend to have a more global focus, were positive, however.

One strategy had an observation date in February, which lead to another successful maturity.

Strategy 52, an over the counter strategy collateralised with short dated gilts, needed the FTSE CSDI index to be at or above its starting level to mature on what was the strategy’s second anniversary. It was higher, so the strategy matured with a gain of 16.56%, 8.28% for each year, from a rise of 8.23% in the index.

A new strategy was also added to the Fund. Strategy 89 is an eight-year, structured note with Bank of America Merrill Lynch as the counterparty. It can mature on any anniversary, provided that the FTSE CSDI index is at or above a reducing reference level. The reference level is 105% of the strike level in year one, 100% in years two and three, 95% in years four to six, and finally 90% of the strike level in years seven and eight. This strategy will give a simple return of 8.75% for each year it is in force.

Summary
The Fund continued its positive start to the year this month. Spread over twenty-four different strategies, it continues to be well diversified in terms of observations dates, observation levels and counterparty exposure. Gilt-backed strategies continue to be the largest allocation, while the strategies in note form are diversified across nine 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 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.