SKANDIA GLOBAL FUNDS PLC - Fidelity Investments

Skandia Global Funds plc
Interim Report and Unaudited Financial Statements for the period ended 30 June 2012
SKANDIA MANAGED FUTURES FUND
INVESTMENT ADVISER’S REPORT FOR THE PERIOD ENDED 30 June 2012
Skandia Managed Futures Fund - Aspect Capital Limited
Below is a report from the Investment Adviser of the Skandia Managed Futures Fund for the first six months of 2012.
The Skandia Managed Futures Fund was launched on 1 November 2011 with a starting net asset value per share of USD 10.00.
Investment Adviser’s Commentary
The Fund achieved a marginally positive return in the first quarter. The energy sector was the best performer as the Fund’s short
position in natural gas gained when prices continued to fall, while increased global demand for oil, together with Iran-associated
supply stresses, pushed oil prices higher to the benefit of the Fund’s long positions. The improving economic outlook resulted in
the fund gaining from its long positions in stock indices, but it suffered losses from its net long exposure to the bonds sector. The
interest-rate sector benefited returns, as Euribor futures rose in January amid the prospect of further liquidity from the European
Central Bank. Short exposure to Australian 90 day bank bills also contributed to returns following February’s surprise decision
by the Reserve Bank of Australia to keep interest rates on hold. Losses resulted from short positions in some industrial metals, in
particular zinc and aluminium, as prices rose at the start of the year. The currencies sector suffered a small loss over the quarter,
with gains from long positions incommodity currencies outweighed by losses from positions in the Yen and the Euro.
The US Dollar share class of the Fund performed well in the second quarter, though the net real return was marginally negative.
Gains from the fixed income, metals and agriculture sectors were reduced by losses in stock indices, energies and currencies.
The Fund began the second quarter with long positions in fixed income, stock indices and energies and a net short exposure to
the US Dollar. As equity and commodity markets sold off and the US Dollar strengthened, the Fund responded by switching to a
more risk adverse stance during May, with net short positions in stock indices and energies and a net long exposure to the US
Dollar. Safe haven appeal pushed fixed income futures higher, to the benefit of the Fund, while gains also came from short
positions in industrial and precious metals. Trend capture in stock indices was more difficult. The Fund's initially long positions
in oil markets produced losses as prices fell following news of a potential increase in supply from Saudi Arabia and increasing
inventories. The Fund's short position in natural gas also incurred losses as prices rallied following reports of smaller-thanexpected
inventories and above average temperatures in the US. In currencies, losses came from the Fund's initially net short US
Dollar exposure, though this was partly offset by the Fund's short positioning in the Euro.
Source: Aspect Capital Limited as at 29th June 2012.
* Performance figures refer to Class A shares and are sourced from Morningstar. Calculation basis: NAV basis, net of fees.
References to benchmarks are for illustrative purposes only and are not intended to imply a performance objective.
There is no guarantee that the Skandia Managed Futures Fund will outperform this benchmark.
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