End of year review 2025
Balanced Return Fund
This is a marketing communication for professional investors only. Capital at risk.
Past performance does not predict future returns.
Global equities delivered strong returns in 2025, albeit with several sharp volatility episodes, most notably the Liberation Day tariff-driven sell-off in April. The Balanced Return Fund delivered a resilient profile throughout these conditions. Defined return investments provided stable participation in rising markets and materially shallower downside during stress, while fixed income contributed positively across the year. The alternatives allocation showed a mixed pattern: tail-risk strategies responded strongly during the April sell-off, while trend-following lagged, reflecting the abrupt nature of both the sell-off and subsequent recovery. As the fund transitions in 2026, it will move toward a full defined-return allocation supported by a dedicated downside-protection overlay.
Overview of the year
2025 delivered strong global equity returns with a few sharp volatility episodes. Equities advanced, supported by resilient earnings. Bond returns were more mixed, shaped by shifts in central-bank expectations and repeated inflation surprises linked to tariff announcements.
For the Balanced Return Fund, this backdrop highlighted the strength of its defined return allocation and the importance of a diversified and risk-managed defensive allocation. The year began steadily, with the fund participating in early equity gains while maintaining a low-volatility profile.
The defining event came in early April, when Liberation Day, the announcement of sweeping new US tariffs, triggered a sudden global sell-off. Volatility rose sharply, with the VIX experiencing its steepest spike of the year, and global equities saw their deepest drawdown of 2025.
The fund’s defined return investments provided clear resilience during this episode, delivering materially shallower downside than global equities. The alternatives allocation showed a more varied pattern, reflecting the nature and speed of the sell-off.
-
Tail-risk strategies responded strongly, behaving as designed in the sharp market decline.
-
Trend-following struggled, which is typical in abrupt market reversals where price action shifts too quickly for exposures to adjust.
This divergence underscores the importance of understanding how defensive assets are positioned and the environments in which each is likely to perform. Importantly, a diversified mix of alternative strategies helps ensure the fund is protection-ready for a variety of market stress events.
During the Liberation Day sell-off, bond yields initially fell as investors sought safety, before reversing sharply as tariff-related inflation fears pushed expectations for central-bank easing further out. Across the year, the fund’s fixed income allocation contributed positively, with its modest duration exposure providing a steady and helpful buffer through shifting rate expectations.
Through late April and May, markets rebounded steadily, and the fund recovered alongside the broader move higher. The summer provided a supportive backdrop, with strong accrual from the fund’s laddered defined return positions and its index-based credit exposures as volatility remained contained. Alternatives were a small drag overall, as tail-risk strategies gave back some gains when volatility and markets normalised.
The final quarter brought a smaller rise in volatility and a pause in equity momentum, but the fund remained stable. It ended the year with a positive return, significantly lower volatility than equities, and controlled drawdowns during stress periods. The experience of 2025 reinforced both the resilience of the fund’s defined return investments and the value of a diversified and risk-managed defensive allocation.
2026 outlook
In 2026, the fund will transition to a full allocation to defined return investments, with expected performance from the allocation similar to that of the Defined Returns Fund. To reduce equity sensitivity during periods of stress, the strategy will be supported by a dedicated downside-protection overlay designed specifically to safeguard the autocall portfolio. The defined return allocation is expected to deliver 7–8% annualised (net) over the medium-term, while the downside protection overlay is expected to cost around 2% per annum, giving a base-case outcome of approximately 6% net. The overlay serves a dual purpose: protecting in stress events and enhancing recovery performance through rebalancing.
Key themes for 2026
Full defined-return allocation: laddered autocalls remain the primary engine of stable, equity-linked returns
Dedicated equity-focused protection: a systematic overlay designed solely to safeguard the autocall portfolio during equity stress
Risk characteristics: reduced equity beta, smoother drawdowns, and lower sensitivity to short-term market shocks
Return framework: ~6% net, with further possible upside from rebalancing into discounted or potentially higher-coupon autocalls during periods of heightened volatility
2023 Fund Reviews
This is a marketing communication. The fund is aimed at advised & discretionary market investors over the long term who have the capacity to tolerate a loss of the entire capital invested or the initial amount.
A final investment decision should not be contemplated until the risks are fully considered. A comprehensive list of risk factors is detailed in the Risk Factors Section of the Prospectus and the Supplement of the fund and in the relevant key investor information document (KIID). A copy of the English version of the Supplement, the Prospectus, and any other offering document and the KIID can be viewed at www.atlantichousegroup.com and www.geminicapital.ie. A summary of investor rights associated with an investment in the fund is available in English at www.gemincapital.ie.
Please be aware that past performance is not indicative of future performance. The value of investments and income from them can go down as well as up, and you may get back less than originally invested.
Equity Risk: The fund has exposure to equity markets. The value of equities can rise and fall. Counterparty Risk: The risk that a counterparty will not fulfil its payment obligation for a trade, contract or other transaction, on the due date.
Currency Risk: The fund holds assets denominated in other currencies, the value of which may rise and fall due to movements in exchange rates.
Interest Rate Risk: The fund’s investments are sensitive to changes in interest rates.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events. Credit Risk: The risk the issuer of the bond fails to make interest or capital payments.
Liquidity Risk: The risk that the fund may be unable to sell an investment readily at its fair market value. In extreme market conditions this can affect the fund’s ability to meet redemption requests upon demand.
Derivatives Risk: The fund is permitted to use certain types of financial derivatives to achieve its objective. The value of these investments can rise and fall depending on the value of the underlying instrument. There is also a risk that the counterparty to these derivatives fails to meet its obligations. For full information on these and other risks, please refer to the fund prospectus and offering documents, including the KID or KIID, as applicable
This is a marketing communication issued by Atlantic House Investments Limited and does not constitute or form part of any offer or invitation to buy or sell shares. It should be read in conjunction with the Fund’s Prospectus, key investor information document (“KIID”) or offering memorandum. Atlantic House Investments Limited is authorised and regulated by the Financial Conduct Authority FRN 931264. Atlantic House Investments Limited is a Private Limited Company registered in England and Wales, registered number 11962808. Registered Office: One Eleven Edmund Street, Birmingham. B3 2HJ.
The contents of this article are based upon sources of information believed to be reliable. Atlantic House Investments Limited has taken reasonable care to ensure the information stated is accurate. However, Atlantic House Investments Limited make no representation, guarantee or warranty that it is wholly accurate and complete.
This material may not be disclosed or referred to any third party or distributed, reproduced or used for any other purposes without the prior written consent of Atlantic House, any data provider and any other third party whose data is included herein and must be returned on request to Atlantic House and any copies thereof in whatever form destroyed.
A decision may be taken at any time to terminate the arrangements for the marketing of the Fund in any jurisdiction in which it is currently being marketed. Shareholders in affected EEA Member State will be notified of any decision to terminate marketing arrangements in advance and will be provided the opportunity to redeem their shareholding in the Company free of any charges or deductions for at least 30 working days from the date of such notification.
GemCap Investment Funds (Ireland) plc is authorised in Ireland by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011) (the “UCITS Regulations”), as amended.
Gemini Capital Management (Ireland) Limited, trading as GemCap, is a limited liability company registered under the registered number 579677 under Irish law pursuant to the Companies Act 2014 which is regulated by the Central Bank of Ireland. Its principal office is at Suites 22-26 Morrison Chambers, 32 Nassau Street, Dublin 2, D02 X598 and its registered office is at 7th Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, D02E762. GemCap acts as both management company and global distributor to GemCap Investment Funds (Ireland) plc.
Capital is at risk. Past performance does not predict future returns.