Fortem Capital Progressive Growth Fund

UK & EU – For professional and institutional investors only
Switzerland – this is an advertising document for professional and institutional clients as defined by the Swiss Financial Services Act only

Monthly Commentary – 31st March 2022

March was a fairly extraordinary month. The world’s attention was understandably focussed on the unfolding invasion of Ukraine, which initially weighed heavily on equities and caused unprecedented moves in commodities. The added possible inflationary consequences of the war weighed further on bond markets, which have suffered their worst quarter in 40 years; once more investors are being warned that bonds are unlikely to serve as a diversifier to equity in an environment in which central banks are reversing course on the incredible support both asset classes have been afforded since the Global Financial Crisis.

The Fund returned -1.0% over the month.

The Fund’s equally weighted indices underperformed their market cap weighted counterparts significantly in March. The FTSE 100 EW was down 3.3% against the market cap version’s gain of 1.4% gain, whilst the EuroStoxx 50 EW was down 2.2% against the market cap’s 0.5% retreat. In the FTSE’s case, the underperformance has been stark YTD at -7.6% vs 2.9%, which has had a fairly significant mark-to-market impact on Fund performance. The Fund’s diversification across geographies has also meant that it has picked up more of the downdraft in international equities thus far in 2022, particularly in Europe, as can be seen on the table on the right hand side.

However, when a Fund’s return is predicated on its underlying indices meeting performance criteria at maturity, even if that criteria is ‘not having fallen by more than x%’, having diversification across underlyings is sensible, in the same way it is for any asset class.

One buys defined return funds for their ability to produce positive returns in multiple environments, and therefore the key questions investors should ask themselves are:

  • How much protection is there until they don’t produce positive returns or lose capital?
  • How much time is there until those protection levels are observed?
  • How much is one being paid to take that risk?

The Fund’s current average protection levels sit at 35.5% before any capital loss and 32.3% before investments don’t return their full pre-defined capital growth, even post the drawdowns seen so far this year. What’s more, the average time to maturity of the investments is 5 years, leaving plenty of time for recovery if markets were to experience significant falls of more than 30% in the near term. It is worth remembering that they would only need to recover to the extent that the indices were above those conservative final barriers, they would not need to recover anything like fully.

With regards to the returns on offer, they are significant. This intuitively makes sense as market moves this year mean that a ‘catch-up’ is required for the investments to achieve those pre-defined and contractually agreed returns in order for the Fund to annualise at its 6-7% target return.

Total Return 2022 Mar
UK 100 2.9% 1.4%
US 500 -4.7% -3.7%
Europe 50 -9.0% -0.5%
Japan 225 -2.7% 5.6%
Hong Kong 50 -5.7% -2.8%
US 2000 -7.5% 1.2%
Swiss 30 -4.3% 2.8%
BCOM 25.5% 8.6%
US Treasury -5.9% -2.8%
Euro Property -5.9% -2.8%
PGF -4.0% -1.0%
AGF 0.6% 0.7%
Real Estate -3.9% 4.7%
US Equity Income -5.9% 3.7%

At the risk of sounding like a stuck record, there have been few times when this type of investment has made more sense for multi-asset investors.


– This document has been issued and approved as a financial promotion by Fortem Capital Limited for the purpose of section 21 of the Financial Services and Markets Acts 2000. Fortem Capital Limited registration number 10042702 is authorised and regulated by the Financial Conduct Authority under firm reference number 755370.
– This document is intended for Professional Investors, Institutional Clients and Advisors and should not be communicated to any other person.
– The information has been prepared solely for information purposes only and is not an offer or solicitation of an offer to buy or sell the product.
– Data is sourced from Fortem Capital Limited and external sources. The data is as at the date of this document and has been reviewed by Fortem Capital Limited.
– Information, including prices, analytical data and opinions contained within this document are believed to be correct, accurate and derived from reliable sources as at the date of the document. However, no representation or warranty, expressed or implied is made as to the correctness, accuracy or validity of such information.
– Fortem Capital Limited assumes

no responsibility or
liability for any errors, omissions or inaccuracy with respect to the information contained within this document.
– All price and analytical data included in this document is
intended for indicative purposes only and is as at the date
of the document.
– The information within this document does not take into account the specific investment objective or financial situation of any person. Investors should refer to the final documentation and any prospectus to ascertain all of the risks and terms associated with these securities and seek independent advice, where necessary, before making any decision to buy or sell.
– The product may not be offered, sold, transferred or delivered directly or indirectly in the United States to, or for the account or benefit of, any U.S. Person.
– The Fortem Capital Alternative Growth Fund is a Sub-Fund of Skyline, an open-ended investment company with variable capital incorporated on 1 June 2010 with limited liability under the laws of Ireland with segregated liability between Funds. The Company is authorised in Ireland by the Central Bank of Ireland pursuant to the UCITS Regulations.

“NOTICE TO INVESTORS DOMICILED OR RESIDENT IN SWITZERLAND – The interests in the UCITS Fund and any related services, information and opinions described or referenced in this document are not, and may not be, offered or marketed to or directed at persons in Switzerland (a) that do not meet the definition of “qualified investor" pursuant to the Swiss Federal Act on Collective Investment Schemes of 23 June 2006 (“CISA") (“Non-Qualified Investors"), or (b) that are high net worth individuals (including private investment structures established for such high-net worth individuals if they do not have professional treasury operations) that have opted out of customer protection under the Swiss Federal Financial Services Act of 15 June 2018 (“FinSA") and that have elected to be treated as “professional clients" and “qualified investors" under the FinSA and the CISA, respectively (“Elective Qualified Investors").
In particular, none of the information provided in this document should be construed as an offer in Switzerland

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