Source - PRN

UKML RNS: Commentary accompanying July NAV (22.09.16)

In order to provide UKML investors with timely, detailed fund information and market commentary, as well as the NAV, we will separate the publication of the Fund Factsheet and the NAV.

 The Fund Factsheet will be prepared after month end and the NAV will be published at a later date, once the NAV calculations have been completed, and will include a summary from the managers covering the NAV performance.

 This will take effect immediately. The comment for the July NAV, released last week, is below and a separate RNS will be issued with the Fund Factsheet for August.

 We hope that these measures combined will result in more timely and detailed information for investors.


UKML NAV per share was calculated for July month end at 93.34 pence per share.

The reduction of 1.61% from the June NAV was primarily due to the dividend payment of 1.5%; the NAV per share including all dividends is 96.34 pence per share. The other main driver of the NAV since the Fund’s inception has been the mark-to-market of fair value calculation of the interest rate swap within the Malt Hill No.1 transaction. The interest payments of the fixed rate mortgages within the Malt Hill portfolio have been swapped to floating rate and this swap is currently subject to being marked-to-market. Given the reduction in overall interest rates the movement in mark-to-market has been negative for the swap, which is reflected in the NAV.

To date, the total mark-to-market of the swap has had an impact of 1.86% on the NAV since inception. Under current accounting policy, the fixed rate mortgages in the portfolio that are being hedged by the swap are being valued by amortised cost methodology, rather than fair value pricing (i.e. mark-to-market), so no offsetting gain has been reflected in the valuation of the mortgages.