Lowes Magazine Issue 121

INVESTMENT SPECIAL

Three-year anniversary of the Lowes UK Defined Strategy Fund (the “UKDSF”)

is currently capped at a maximum of 1% per annum (full details of all fees and expenses associated with the Fund can be found in the Fund documentation available at UKDSF.com). Performance As a Fund which offers daily dealing, it is subject to market forces just like any other and, as with other UK equity funds, it suffered in the run up to the first lockdown, especially against its stated aim to exceed cash (as measured by the Bank of England’s Sterling Overnight Interest Rate, (“SONIA”)) plus 5% over the medium to long term (net of fees). The Fund is actively managed with reference to this Target Benchmark. Of course, since the bottom of the correction in March 2020 the Fund has performed better. In fact, an investment made on any day since the end of February 2020 up until the end December 2021 would have exceeded the Fund’s Target Benchmark to date. With the current trajectory we hope that all investors will see their holding grow in excess of the Target Benchmark this year, which is pleasing given what happened in 2020. This has also been achieved with around three quarters of the volatility of the FTSE 100 index over the last year (8.85% compared to 11.68%). Given that the strategies utilised within the Fund all have defined outcomes in defined market circumstances, it is possible to project how the Fund, as its stands at any point, will perform in differing market conditions over the coming years. Of course any such projection relies upon a set of assumptions and as such can not be relied upon as an indicator of what the Fund will actually return but as can be seen from the table below, the portfolio as at the end of December 2021 was very well positioned to meet the Fund’s objective of providing capital growth in rising, directionless or moderately falling UK equity markets. Lowes UK Defined Strategy Fund is a sub fund of Skyline Umbrella Fund ICAV which is authorised and regulated by the Central Bank of Ireland. Full details of the Fund and relevant Documentation can be found at – www.UKDSF.com – or talk to your Lowes Adviser. Please note that a future performance indicator is not a reliable indicator of future results. We still very much believe in using individual structured products, but we think the UKDSF offers clients and investors another interesting and useful option to tap into our expertise in this investment field. 4.31% 9.39% 13.12% 15.85% 17.52% An estimate of the performance over specific time periods for given market movements. For example, if the FTSE 100 index is 5% up in 3 years, we expect the value of the Fund to rise by 15.85%. Please note that a future performance indicator is not a reliable indicator of future results. FTSE 100 movement -10% -5% 0% 5% 10% 1 year 3 years -1.02% 2.67% 5.42% 7.45% 8.69%

LOWES HAS A WELL-EARNED REPUTATION FOR ITS expertise in structured products. We have been using them with clients for almost thirty years and every year we publish our analysis of every new product brought to the retail investor market. In our analysis we have identified those which were worthy of consideration for client portfolios whilst calling out those that we felt were poor value or too risky. By publicly identifying our ‘Preferred’ plans in our industry facing comparison service, used by thousands of advisers, we believe we have helped shape the sector to be more competitive and offer better investor outcomes. Nowadays we are often able to achieve better terms than the general market has to offer, exclusively for Lowes clients. The success rate of our ‘Preferred Plans’ speaks to our capabilities and knowledge in finding the right products for our clients. Structured product fund With this level of expertise, in 2018 we decided to launch our own fund of structured products – Lowes UK Defined Strategy Fund (the “Fund”) – which has just reached its three-year anniversary and passed £20 million in assets under management. The Fund is designed to give Lowes’ clients and other investors a diversified portfolio of structured products, many of which are not otherwise available to retail investors. The Fund offers a diverse portfolio with a broad spread of structures with a range of observation dates and reduced counterparty bank risk, which for most of the portfolio is mitigated altogether as explained shortly. As a daily dealing UCITS Fund it is priced daily and may be bought and sold just like any other collective investment fund. Currently, there are 21 structured investment strategies in the fund, all of which are based on UK indices, with one strategy potentially maturing nearly every month. With most of the strategies in the fund we have been able to take away the counterparty bank risk because instead of using a bank bond within the structure we effectively replace such with short- dated government bonds (gilts). This has led to most of the Fund being protected from any bank failing. So, the Fund provides both greater diversification of structures and a reduction in counterparty risk. When financial planning, the Fund offers another advantage over individual structured products in that Capital Gains Tax (“CGT”) is applied only when the units in the Fund are sold by the investor, rather than when a structure within the fund matures and pays out. This means investors can withdraw or redeem from the Fund at their discretion, to make best use of their CGT exemption – currently £12,300 per tax year. There are no entry, exit, or performance fees applied to investment into the Fund, and the Ongoing Charge Figure (“OCF”) for the Fund

Lowes UK Defined Strategy Fund C GBP in GB 15 10

5 0 -5

-10 -15 -20 -25 Percentage Growth 31/12/2018

Source: FE Analytics. Bid-Bid. Total return.

30/06/2019

31/12/2019

30/06/2020

31/12/2020

30/06/2021

31/12/2021

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