Market Review
The Fund’s exposure to equity markets averaged 26%, with regional biases remaining unchanged. Net bond investment averaged 0% and featured long exposures in 2 and 10-year German bunds and a yield curve flattening strategy in the UK Gilt market, through a long position in a 2055 maturity Gilt, offset by a short long Gilt future. Australian 3 and 10-year government bond futures were sold during the month. The portfolio’s small short Swiss franc position against sterling was also closed.
Fund Performance
The Fund produced a -1.6% gross return during April compared to a target return of 0.3%. The FTSE Allshare, FTSE World ex UK and FTA UK Government All Stocks total returns for the same period were -0.3%, -3.0% (-1.5% in local currency terms) and 0.4% respectively.
Fund Positioning
The Fund used up about 32% of its permitted risk budget during the month, significantly down from March’s 49%, primarily reflecting a lower equity market exposure.