Fund commentary

Market Review
Government bonds followed a now-familiar pattern, lower yields and higher prices in the core nations of the US and Germany, but the opposite for peripheral Europe. US jobs figures were weaker than expected, prompting a flight to safety, and a disappointing Spanish debt auction rattled peripheral European markets.

Fund Performance
Underperformance was due to the underweight duration position we held at the 5 and 10 year US dollar key rates where yields were down over the month. Some of this was offset by the Fund’s euro positions with French and Spanish positions contributing most of the outperformance in the sector.

Fund Positioning
We were positioned with a short duration in the US and Japan throughout April. We moved from short to long duration in Germany during the month. In terms of currencies, we were overweight the Swedish krona and (briefly) the Australian dollar. We were underweight the euro and the Japanese yen.