Signet Capital Management Limited

FFF TOTAL RETURN Compartment - UPDATE 03/2021

The FFF Total Return Fund gained 0.52% for the month of March 2021.
Market Review:
Inflation expectations continued to rise in March, which combined with the unchanged Fed rhetoric drove Treasury yields up. The yields on 10-year treasuries increased by 34bps, while the 30-year yield increased by 26bps. Expectations of the $2.25 trillion U.S. infrastructure plan also contributed to the yield increasing. As expected, the Fed kept the policy rate static, monetary policy will remain accommodative even in the case of rising inflation, which is viewed by the committee members as a transitory factor. QE will continue at least at the current levels. Most bond indices declined: LQD: -1.5%, EMB: -0.7%, VCIT: -1.5%, but the corporate hybrids and perpetual bond segments showed notable gains.
Fund Performance:
By the end of March FFF Total Return had generated 0.52%. The main drivers of the fund's results were interest and currency hedges, as well as instruments with a floating interest rate, which in current conditions were in high demand. At the end of the month the manager continues to hold short positions in treasuries and bunds formed using liquid futures, and remains with a low allocation to risky assets, which allows us to maintain flexibility in case of rapid changes in the market situation.
FACTSHEET FFF Total Return Fund