30 November 2021
The Fund fell by 1.53% in November, whilst its performance comparator of cash (as measured by the Bank of England’s Sterling Overnight Index Average (“SONIA”)) + 5%, rose by 0.43%.
November had been a positive month initially, with the fund being up 1.02% on the 25th. The discovery of a new variant of Covid-19 in Southern Africa, however, sent shockwaves through stock markets around the world, with the UK stock market, as measured by the FTSE 100 index falling 3.64% in a single day. The Fund did provide some protection but still fell 2.78% on the day, taking it into negative territory for the first time in the month.
Two strategies had an observation point in November. The first, a structured note with Santander as the counterparty, matured returning a gain of 16% after two years. For the second however, a gilt backed OTC contract, the underlying index was just below the required level, so this strategy moves on to its next observation point in a year’s time. This strategy still has a further six observation points, however, so has plenty of opportunities to mature.
One new strategy was added during the month, based on the FTSE CSDI index. An eight-year strategy, the index must be the same or higher than its starting level on any anniversary to mature with a gain, paying 8.48% simple for each year it is in force. We also took advantage of the sudden fall in markets at the end of the month to increase the size of an existing over-the-counter strategy. Only taken out in September of this year, the fall had taken the daily price for this particular strategy to below par, despite the underlying index only falling back to the same level as it was when first taken out. This gave the opportunity to capture a higher coupon on this strategy than originally quoted for roughly the same terms.
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.