The Fund was flat in December, ending down slightly at -0.26%.
(Source of all figures: FE Analytics)

It was another mixed month for the world’s equity markets, with the trends from the previous month reversing once again. The UK and US, as measured by the FTSE 100 and S&P 500 indices respectively, both fell in December. The US fell 2.50% in local currency terms, as fears over the inflationary effects of Donald Trump’s proposed tariffs reduced the likelihood of interest rate cuts. Japan meanwhile, as measured by the Nikkei 225 index, was the best performer of the main regions, rising 4.41%, ahead of China at 3.28%. Europe was also positive, up 1.91%.

These returns from China and the US were further enhanced for UK investors, as sterling weakened, driven by worries over the government’s ability to deliver economic growth with rising borrowing costs.

Two strategies had observation dates during December, both leading to successful maturities.

Strategy 67, a structured note with Credit Agricole as the counterparty, needed the FTSE 100 index to be up on its first anniversary to mature. It was, so it matured with a gain of 9.60%, from a rise of 6.12% in the index.

The second, strategy 68, was a gilt collateralised, over the counter (OTC) trade, linked to both the FTSE CSDI and EStoxx 50 indices. Given it was linked to two indices, it was a more defensive contract, with the required levels for maturity falling over time. As it turned out, this defensive nature was not needed, with this contract also maturing on its first anniversary, giving a return of 8.15%.

Both strategies were replaced like-for-like, with coupons of 9.53% and 9.66% respectively. The counterparty on the new structured note has changed to Citigroup, however, due to more competitive pricing.

Summary
Despite the slight drop over the month, the Fund was positive over the year. Spread over twenty-four different strategies, it remains well diversified in terms of observations dates, observation levels and counterparty exposure. Gilt-backed strategies remain 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 www.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.