Fund commentary

Market Review
Strong Purchasing Managers Index data encouraged a sell-off in Gilts, but they rebounded sharply after minutes revealed that some Monetary Policy Committee members had argued for more quantitative easing at the start of February. Corporate bonds continue to benefit from European Central Bank's lending to liquidity-strapped banks. Financial securities performed particularly strongly.

Fund Performance
Our allocation out of gilts into credit benefitted the Fund during March. Security selection within our credit portfolio was positive with strong performance from our positions in Barclays and AIG. Our position in SLM Student Loans cost the Fund as did our exposure to the SWIP currency alpha fund.

Fund Positioning
Our overweight positions in corporate bonds and UK inflation-linked Gilts were maintained. We are still of the view that UK Gilts are expensive and are underweight the asset class. We added to our overweight position in global government bonds.