Fund commentary

Aviva Investors Sterling Government Liquidity Fund

Month in review for April 2023

Richard Hallett

Fund Manager


Month in review

In the sterling money market, yields continued to rise in line with market expectations for further interest rate hikes. In the fund, we increased the allocation to Treasury-Bills as they began to show much better value versus repo.

Looking ahead

We believe the market may be overly optimistic in expecting an early peak in UK interest rates given the prospect of inflation falling less quickly than hoped.

Key facts

Fund managers
Richard Hallett since 07/2018,
Josh Bramwell since 12/2021
Share class inception date
Fund size (as at 31/05/2023)
GBP 3544.1m

Fund overview

Objective: The investment objective of the Fund is to offer returns in line with money market rates and to preserve the value of the investment. The performance of the Sub-fund is measured against the Sterling Overnight Index Average (SONIA) Rate (the benchmark). The Aviva Investors Sterling Government Liquidity Fund is a Short-Term Low-Volatility Net Asset Value (LVNAV) Money Market Fund.

Month in review

The UK economy continued to labour, with the closely monitored manufacturing PMI activity index for April signalling a pick-up in the rate of contraction. However, it was not all gloom as manufacturers were more optimistic overall amid a slowdown in the rise of input costs thanks to the ongoing freeing-up of global supply chains. Indeed, expectations began to increase that the UK would avoid recession in 2023. There were also some signs that the property market may be stabilising, with house prices showing their first increase in seven months.

While there was no meeting of the Bank of England in April, less encouraging news on inflation appeared to cement the prospect of the base rate being raised once again in May. The consumer prices index fell to 10.1% in March against market expectations of 9.8%.

In the money market, the focus on inflation concerns has seen sterling yields continued to rise, with issues maturing around the year-end beginning to offer over 5%.

In the fund, we increased the allocation to Treasury-Bills as they began to show much better value versus repo.  The increase in the size of the auctions and a perceivable fall in demand for the product have driven some much higher yields. In the case of six-month maturities we have seen yields above SONIA mid levels.







For the latest Monthly, Cumulative, and Annualised Fund performance data please refer to the PDF factsheet below.


Looking ahead Last updated 30 April 2023


The prospects for the UK economy are clouded further by the need to manage elevated financial sector risks in the wake of the US bank collapses and the contagion that has seeped through to Europe. The development of a crisis will undoubtedly have deep implications for both growth and interest rate policy. For the moment, however, we are optimistic that conditions will remain relatively stable, with governments having made the needed commitments to ensuring sufficient liquidity is maintained.

The inflation picture is also unclear. The hoped-for rapid fall in prices is not materialising according to initial data this year, which will put increased pressure on consumers and companies, particularly as the UK tax burden is about to increase significantly. The encouraging signs of positive growth momentum seen in activity survey data may therefore not persist for long.




























Full information on risks applicable to the Fund are in the Prospectus and the Key Investor Information Document (KIID).

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Important information


The source for all performance, portfolio and fund breakdown data is Morningstar unless indicated otherwise. For share classes that have not yet completed 5 years, the cumulative performance chart will start from the first full month. All data is as at the date of the Factsheet, unless indicated otherwise.

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