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Fund commentary

Market Review
High yielding assets delivered a positive return overall. European high yield was strongly ahead, while US high yield was slightly down. A successful conclusion to the Greek debt swap was positive, but investors became more risk-averse as anxieties resurfaced over Spanish sovereign debt, and the rally slowed towards month end.

Fund Performance
Underperformance from our European holding in Viridian Group cost the Fund as did underweight positions in OTE plc and Banco Comercial Portugues which performed strongly. In our US portfolio underperformance from names such as Arch Coal Inc and RRI Energy Inc had a negative impact on performance. Our overweight in European high yield did however benefit the Fund.

Fund Positioning
We continued to take profits on European high yield during March, switching the proceeds into US high yield. We participated in a number of new issues, these included Veridian, the Irish electricity generator and distributor.


Kevin Mathews & Steven Logan
31 March 2012
Funds in focus


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Scottish Widows Investment Partnership Limited (SWIP) is registered in England and Wales, Company No. 794936. Registered Office is at 33 Old Broad Street, London EC2N 1HZ. Tel: 0131 655 8500. SWIP is authorised and regulated by the Financial Services Authority and is entered on their register under number 193707 (www.fsa.gov.uk).