The Fund fell 0.06% in April, whilst its performance comparator of cash (as measured by the Bank of England’s Sterling Overnight Index Average (“SONIA”)) + 5%, rose by 0.44%. Year to date the Fund is on a par with its performance comparator with rises of 1.72% and 1.76% respectively.

The Fund was ahead of its comparator up to the 21st of the month, when it was up 0.64%. Once again, however, Covid fears led to markets falling as outbreaks in China caused the authorities to impose strict, citywide lockdowns. Investors worried that the lockdowns in both Beijing and Shanghai would have long term implications for global supply chains. Coming on the back of persistently high inflation and the ongoing war in Ukraine, markets reacted badly initially, with the UK equity market, as measured by the FTSE 100 Index, falling 3.24% over two days before recovering slightly in the final week.

Two strategies had observation points in April. The first, a maximum eight-year, gilt backed contract was taken out in April 2021. This strategy needed the FTSE CSDI Index to be at or above its starting level on the observation date. The Index was comfortably above this level triggering the maturity of the strategy after just one year with a gain of 8.41%. This strategy was replaced with a new gilt-backed strategy based again on the FTSE CSDI Index. Due to the current uncertainty in the markets, however, we opted to use a step down strategy on this occasion, allowing for the Index to be down 10% in the final year, with the strategy still maturing with a gain. We were pleased to be able to get a coupon of 8.38%, close to the contract being replaced but with a defensive shape built in.

The second strategy to reach an observation point was a Note with Barclays as the counterparty. As this was its third anniversary the reference level for this strategy dropped to 95% of the underlying index’s starting level. The underlying index was above this level so the strategy matured, giving a gain of 24%. We took advantage of the short-term volatility at the end of the month to roll the proceeds over into two new gilt-backed contracts with maximum terms of 8 years, both with a higher coupon than the Note being replaced. The first is an at the money strategy paying 10.5% simple each year. The second has a step-down feature, allowing the underlying index to fall by 10% in the final year whilst still producing a positive gain of 9.04% 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 De¬fined 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.