Strategic Gilt Fund
The Fund aims to offer a superior risk-adjusted return over that of passively
holding a conventional gilt portfolio with similar risk characteristics.
- Download a printable version of this monthly factsheet
- Read about this Fund in The Financial Times
as at 31 October 2008
Key points
- The Fund invests only in UK gilts. There is no corporate exposure of any kind.
- The Fund was launched on 8 December 2006 and is managed by Ian Williams of Charteris Treasury Portfolio Managers.
- The Fund utilises the Charteris process of writing options on the underlying portfolio, with the aim of enhancing the total risk-adjusted return of the portfolio and reducing volatility.
- Sector: IMA UK Gilts
Current views
Following today’s dramatic rate cut by the Bank of England, UK base rates are now down to 3%. This means that for the average saver with a traditional bank or building society deposit account returns will likely fall significantly below the level of base rates once LIBOR markets return to normalcy – as is gradually now occurring. The Fund will position itself to take maximum advantage of the changes likely to occur in the gilt market as investors realise returns on cash have become negligible and gilts offer the liquidity and security they seek.
During the month of October the gilt market, as measured by the FT Government Securities Index, finished the month approximately where it began. The Fund displayed similar characteristics. Moreover, there were some discernible movements in the shape of the yield curve. Yields on three to four-year Gilts fell from ~4% to ~3% whilst yields on gilts with maturities of between 10 and 25-years rose by approximately 20 basis points. Yields on ultra long 50-year Gilts were largely unchanged.
This yield increase in the ‘hump’ of the curve was not beneficial to the Fund as this is where the bulk of the Fund is allocated. Despite this fact the NAV of the Fund did perform in line with the Index for the month of October when the movements in the curve should have led to the Fund underperforming the Index.
Looking ahead we continue to expect cuts in interest rates on top of the 150 basis points announced today and therefore continue to believe that the 10 to 20-year area is the most attractive part of the gilt market. At present the yield in this market segment is just under 5% whereas ultra short and ultra long yields are down to just above 4%.
November 6th, 2008
Holdings
| •UKT 5.00% 2018 |
| •UKT 4.50% 2019 |
| •UKT 4.75% 2020 |
| •UKT 2.50% 2024 |
| •UKT 5.00% 2025 |
| •UKT 4.25% 2027 |
Financial Information
| •Nav Class A Acc | 125.21p |
| •Nav Class A Inc | 119.35p |
| •Nav Class B Acc | 126.46p |
| •Nav Class B Inc | 119.42p |
| •Total Net Assets | £28.8m |
| •Modified Duration of the Fund | 10.02 |
Performance vs IMA UK Gilts Sector

Five-Year Performance
| Year- | Calendar year | |||||
| to-date | 2007 | 2006 | 2005 | 2004 | 2003 | |
| •Class A | 1.43% | 6.47% | n/a | n/a | n/a | n/a |
| •Class B | 2.29% | 6.63% | n/a | n/a | n/a | n/a |
| •IMA UK Gilts sector | 1.44% | 2.85% | n/a | n/a | n/a | n/a |
| •IMA UK Gilts sector ranking | 14/27 | 1/27 | n/a | n/a | n/a | n/a |
| •Quartile | 2 | 1 | n/a | n/a | n/a | n/a |
Fund Facts
| •ISIN Class A Acc | GB00B1GVSD23 |
| ISIN Class A Inc | GB00B1GVQ612 |
| ISIN Class B Acc | GB00B1GVZG47 |
| ISIN Class B Inc | GB00B1GVWL84 |
| •Bloomberg Tickers | |
| Class A Acc | CFILQAA LN |
| Class A Inc | CFILQAI LN |
| Class B Acc | CFILQBA LN |
| Class B Inc | CFILQBI LN |
| •Distribution | Semi Annual |
| –31 May & 30 November | |
| •Dealing/Valuation Frequency | Daily |
| •Accounting Year-End | 30 September |
| •Settlement | T+4 |
| •EU Savings Directive | In scope |
| •Currency | GBP |
| •Annual Charge Class A | 1.25% |
| Minimum Initial Class A | £1,000 |
| •Annual Charge Class B | 0.75% |
| Minimum Initial Class B | £7.5M |
| •Initial Charge | 5.00% |
| •ISA Wrapper | Yes |
| •ISA Transfer | Yes |
| •Savings Plan | Yes |
| •Sector | IMA UK Gilts |
| •Depositary | |
| –Bank of New York Trust and Depositary | |
| •Registrar | |
| –Capita Financial Administrators | |
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