The performance of the Fund was positive in August, rising 0.75%. 
(Source of all figures: FE Analytics)

At the beginning of August we saw volatility return to equity markets at a level which had not been seen for some time. Indeed, in the first week we saw major indices fall anywhere between 4% and 20%.

One of the key catalysts for this appears to be the divergence in monetary policy direction between the Bank of Japan and other major central banks. Whilst the Bank of England and European Central Bank have already cut interest rates, with the US Federal Reserve expected to do so imminently, the Bank of Japan caught the market somewhat off guard with a rate rise.

Two strategies had observation dates during August, both of which triggered a successful maturity. The first, strategy 45, was a step-down structured note with Credit Agricole as the counterparty, which matured on its second anniversary, returning 18.16%. Over the same period the FTSE 100 price return index, to which this strategy was linked, returned 11.70%.

The second, strategy 62, was a gilt backed over the counter contract, linked to both the FTSE CSDI and Euro Stoxx 50 indices. This one matured on its first anniversary, returning 10%, compared to the price return of the two indices of 7.76% and 8.29% respectively.

Four strategies were also added to the Fund during the month, strategies 79 to 82.

The first was an eight-year structured note with Natixis as the counterparty, which required the FTSE CSDI index to be no more than 5% down on its second anniversary, or every three months after that, to mature with a gain of 2.1% for each quarter it is in force.

Next was another eight-year structured note but with UBS as the counterparty this time. It required the FTSE 100 index to be at or above its starting level on any monthly observation after 30 months to mature with a gain of 0.7042% for each month it is in force.

Strategy 81 was an eight-year, gilt backed, over the counter strategy linked to both the FTSE CSDI and Euro Stoxx 50 indices. This was a step down shape with an annual coupon of 8.74%, and was a straight replacement for the matured Strategy 62.

Finally, strategy 82 was another structured note, this time with a maximum seven-year term and Citigroup as the counterparty. As with strategy 79, it required the FTSE CSDI index to be no more than 5% down on any observation point, but this time from the first anniversary and then every year after that. The annual coupon this time was 8.5%.

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.