Dynamic Duration Fund
The Atlantic House Dynamic Duration Fund aims to deliver capital growth over the medium to long term through a systematic and signal-based investment strategy, that is designed to outperform in a wider range of inflation environments than a conventional bond fund.
Meet the fund managers behind the fund's creation and learn more about Dynamic Duration:
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Why consider this fund?
The Fund seeks to provide:
A transparent, signal-driven investment process
That seeks to outperform conventional bond funds by moving between exposure to bonds and inflation based on clear systematic signals
Dynamic Duration Fund
Designed for an ever-changing
The duration of a portfolio of bonds can create substantial risks for investors when the interest rate environment changes; it is notoriously difficult for fund managers to identify these shifting currents.
The systematic approach adopted by this fund offers the potential for performance in both an inflationary and deflationary environment. This offers the opportunity to increase the reliability of a portfolio’s bond exposure as a diversifier to equities. It gives the fund the flexibility to act to protect the portfolio against large bond drawdowns during inflationary environments.
During periods where the fund’s key signals suggest rising inflation is expected the portfolio will tilt towards assets positioned to benefit from this, whilst during deflationary periods it tilts towards conventional fixed income exposure.
Dedicated to managing your investment
What does the Fund invest in?
The fund utilises just three instruments: government bonds, interest rate swaps and inflation swaps. These liquid instruments are equally applied between two markets: the UK and US.
Atlantic House launches new Dynamic Duration strategy designed for an ever-changing inflationary environment
Fund offers capacity to profit from rising inflation in falling bond markets
Atlantic House Investments, the specialist asset manager focused on helping multi-asset investors build more predictable portfolios, has launched a new strategy, to be known as the Atlantic House Dynamic Duration Fund (“the Fund”).
The strategy is designed to perform in both inflationary and deflationary environments by systematically pivoting between exposure to conventional fixed income and target exposure to inflation itself.
Lead managed by deputy CIO Mark Greenwood, the strategy utilises three liquid instruments – government bonds, interest rate swaps and inflation swaps – equally applied between the UK and US markets. It tilts its exposure to fixed income and inflation-linked assets based on three clear systematic signals: inflation trends (Inflation Trend), real yields (Market Inflation Credibility) and current levels of core inflation relative to central bank policy targets (Central Bank Credibility).
These three signals provide an estimation of the likelihood of a future increase or decrease in UK and US interest rates and inflation which in turn systematically determines the Fund’s positioning across fixed income and/or inflation, as follows:
• Inflation Trend – Downward trending inflation may lead central banks to cut interest rates, increasing the value of fixed income assets while, conversely, inflation trending up may favour investments in inflation swaps.
• Market Inflation Credibility – A higher real yield on inflation-linked bonds indicates a market expectation of lower inflation increasing the appeal of fixed income. A negative real yield, meanwhile, implies higher inflation which favours inflation swaps.
• Central Bank Credibility – If core inflation is below target, central banks are less likely to increase interest rates making fixed income attractive. However, if it is above target, investors may benefit from investment in inflation swaps.
Tom May, chief executive officer, Atlantic House Investments commented: "Choosing how much duration to own in a multi-asset portfolio is both highly-challenging and highly-important. This new strategy introduces a systematic approach to this. We believe that multi-asset investors can use it alongside more traditional fixed income exposures to better diversify portfolios and enhance returns during periods when the inflationary environment is changing rapidly."
Mark Greenwood, deputy CIO, Atlantic House Investments added: “The Atlantic House Dynamic Duration fund is a strategy designed for investors seeking the diversification from equities that they might have looked to conventional bond funds to provide. The duration exposure of such funds can create substantial risks in an environment of changing interest rates as it is notoriously difficult for fund managers to navigate these shifting currents. However, the systematic approach applied by this new strategy offers the potential for performance in both inflationary and deflationary environments by tilting dynamically to fixed income or inflation assets.
“The strategy draws on the deep derivatives expertise at Atlantic House Investments, whilst its systematic approach can complement multi-asset investors’ exposure to active strategies by eliminating individual behavioural biases.”
NOTES TO EDITORS: Atlantic House Dynamic Duration Fund
Share classes: Sterling accumulation and income, US Dollar hedged accumulation and income
Base Currency: Sterling
Type: Global Government Bond
Atlantic House Group (AHG) Atlantic House Group is London’s leading derivatives-based investment manager. The team is dedicated to working with multi-asset investors across the world to build more predictable, more resilient, and ultimately more effective portfolios. Atlantic House has a range of market-leading funds, including the £1.7 billion Atlantic House Defined Returns fund and the innovative Atlantic House Uncorrelated Strategies Fund. Alongside these, Atlantic House Solutions collaborates with leading multi-asset investors to build bespoke solutions to meet their own specific needs and reach the goals they have set for their clients.
The price of shares and income from them can go down as well as up and past performance is not a guide to future performance. Investors may not get back the full amount originally invested. The level and basis of tax is subject to change and will depend on individual circumstances. There is no guarantee that the Fund will achieve its objective.
This is a marketing communication. 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. 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 being marketed. Shareholders in affected EEA Member State will be notified of any decision 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.
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This is a marketing communication.
A copy of the English version of the Supplement, the Prospectus, and any other offering document and the KIID can also be viewed at www.geminicapital.ie. A summary of investor rights associated with an investment in the Fund is available in English at www.geminicapital.ie.
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 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.
The Fund is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trademark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the Fund. Neither publication of the Index by Solactive AG nor the licensing of the Index trademark for the purpose of use in connection within the Fund constitutes a recommendation by Solactive AG to invest capital in said Fund nor does it in any way represent an assurance or opinion of Solactive AG about any investment in this Fund.