Fund Commentary

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 its peer group average for the month. The Fund gained due to curve positioning as our short duration positions at 2-year and 5-year key rates contributed to performance as yields rose during the month. The Fund lost most of these gains due to our allocation to corporate bonds.

Fund Positioning
The Fund was positioned with a slightly short duration. The position in index-linked Japanese government bonds was reduced. The Fund was overweight US Treasuries and underweight in UK Gilts. In terms of yield curve positioning, we moved overweight in 30-year Gilts at the expense of 20-year Gilts.