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 2021

After the turbulence at the end of February, equities enjoyed a very strong March as hopes grew over vaccine distributions, re-openings, and global economic growth in general, with many forecasting a robust recovery into H2.

However, it was again bond markets that bore the brunt of the prospect of more robust growth bringing an end finally to the goldilocks environment of low inflation, unending stimulus and ZIRP. The Fund increased by 3.7% over the month.

Within the Core Portfolio, the fall in volatility over the month was the biggest contributor, adding 1.7%, while the rise in the underlying equity indices to which the Fund is exposed added a further 1.3%. The other significant contributor was theta (the passage of time).

The Diversifier Portfolio was flat for the month. The Fund’s most defensive position, which is effectively long credit spreads, suffered as would be expected while the Core Portfolio performs particularly well. Elsewhere, US equity quality was a detractor, while European equity quality performed well. Rates curve and rates volatility strategies continued to perform well as they have thus far this year.

Compared to February, it would seem that investors are happy to take on equity risk in light of more positive data, but have become increasingly wary of longer dated bonds. The Fund’s average distance to barriers continue to increase as the underlying equity indices do, leaving a high level of protection at these levels, and attractive expected returns, even if markets were to be rangebound from here, as shown on the mark-to-market grid overleaf.

Total Return 2021 Mar
UK 100 5.0% 4.2%
US 500 6.1% 4.3%
Europe 50 10.7% 7.9%
Japan 225 6.9% 1.2%
Hong Kong 50 4.6% -1.8%
US 2000 12.7% 1.0%
PGF 3.3% 3.7%

– 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.
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intended for indicative purposes only and is as at the date
of the document.
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– The Fortem Capital Progressive 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.

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