Market Review
Ten-year Gilt yields fell during April. Poor gross domestic product figures, which showed that the UK economy had fallen into a "double dip" recession, contributed to a flight to quality. So did political uncertainties surrounding the eurozone.
Fund Performance
The Fund was ahead of benchmark, with our short duration position driving outperformance, as yields were up in April. Our off benchmark positions in inflation linked Gilts and securitised bonds also contributed to outperformance, while our allocation to credit detracted.
Fund Positioning
The Fund moved from a short to a neutral duration position in April. We reduced the overweight positions in index-linked Gilts and index-linked corporate bonds, and maintained the position in index-linked Japanese government bonds.
Graeme Caughey
30 April 2012