Aberdeen Life UK Long Dated Sterling Bond Fund
Formerly Aberdeen Life UK Long Dated Bond Fund
Objective
To provide exposure to an actively managed portfolio, the majority of which is invested in Long Dated Sterling denominated Investment Grade Debt and Debt Related Securities.
Manager's Quarterly Report
July 2010
Market Review
- News flow in the UK was dominated by the General Election and ongoing concerns about Euro
area debt problems.
The Bank of England left the base rate unchanged at 0.5% during the quarter and maintained
the asset purchase target at £200bn. However, the minutes from the meeting in June
highlighted the first split in voting since February 2009, with Andrew Sentance dissenting in
favour of a 0.25% increase, based on a combination of inflation resilience in the UK and signs
of global recovery.
UK gilts benefited from “safe haven status” due to the general weakness and volatility in
peripheral Eurozone sovereign bond markets. As a result, five and ten year maturities fell by
0.65% and 0.58% respectively, while thirty year maturities fell by 0.36%.
Fund Review
- The fund underperformed over the quarter. Within interest rates, a short duration position
and a yield curve flattening position both detracted value. A small allocation to credit also
detracted from performance over the period.