As with our flagship Defined Returns Fund, we produce a monthly scenario analysis of the fund over the following 3 years given certain equity market moves. For a 10% up move in equity markets over the next 12 months, we expected the fund to deliver around 9.87%.
Average cover before capital loss
36.5%
Average cover to achieve a positive return
32.3%
The fund’s actual returns may differ from the estimates shown above and are subject to daily price movement. Future performance may also be subject to taxation, that could change in the future. The value of investments can go down as well as up and you may not get back the full amount invested.
Source: Atlantic House as at 31/12/23.
How did the fund perform?
It has been another strong year for global equity markets, with US equities leading the way. As at 9 December 2024, the fund is up 8% year to date, with three weeks remaining until year-end. Annualising this performance through to the end of the year results in an estimated total return of 8.5% net of fees, placing it comfortably within the fund’s 8-9% target range. This outcome aligns with the estimated NAV movement, considering European and UK equities fell slightly short of a 10% return this year. From November 2023 to November 2024, the fund delivered an impressive 9.5%.
Past performance does not predict future returns.
Source: Morningstar 31/12/24 to 9/12/24
Past performance does not predict future returns.
Source: Morningstar 01/01/24 to 9/12/24
Did it offer downside protection?
Hitting our target return is, of course, important, but it’s just as critical to look at how the fund performed during periods of equity market drawdowns. The fund’s much lower drawdowns, reduced volatility, and low equity beta show just how effective the defensive barriers in defined return investments can be. The performance chart really brings this to life, showing the relatively smooth and steady journey the fund has provided for investors this year.
Performance of Fund and major equity indices
Past performance does not predict future returns.
Source: Morningstar 01/01/24 to 9/12/24
2024 August Wobble:
The equity market sell-off in August once again showcased the fund's defensive qualities. Hawkish actions by the Bank of Japan, along with weaker economic data from the US, triggered a 6.4% drop in global developed market equities. In comparison, the fund saw a much smaller decline of just 2.85%. Even with Japanese equities dropping as much as 20% at one stage, the Japanese exposure only reduced the fund’s overall performance by about 60 basis points. This result highlights the effectiveness of the fund’s protective barriers and the value of maintaining a well-diversified regional exposure.
Performance in the first 2 weeks of August 2024
Past performance does not predict future returns.
Source: Morningstar 31/07/24 to 14/08/24
What activity happened in the portfolio?
The fund was launched in 2023 in a highly favourable pricing environment for defined return investments. At the time of launch, GBP interest rates were around 5%, enabling the fund to invest in structures with barriers as low as 70%, and in some cases, with single index structures offering coupons exceeding 9%. Even though interest rates have declined over the past year, we have continued to secure similarly attractive coupons, with most well above our 8-9% return target. To maintain these attractive returns, we have slightly adjusted the final year positive return and capital protection barriers, setting them marginally higher than a year ago.
Redemptions since inception:
Source: Atlantic House as at 09/12/24
New Investments in the fund:
Source: Atlantic House as at 09/12/24
What can investors expect from the year ahead?
As it stands, we believe the fund presents an excellent risk-reward profile for investors. The positive return and capital loss barriers, set at 29.12% and 34.37% respectively, provide a substantial level of downside protection. On the upside, the fund has the potential to deliver an 8% return in flat equity markets and 10.4% if equity markets rise by 10% over the next 12 months. Remarkably, even if equity markets decline by 10% over the next year, we project the fund to still deliver a positive return of 2.66%. The fund's delta is currently at 31.5%, with underlying regional allocations closely mirroring those of a global equity index.
The fund’s actual returns may differ from the estimates shown above and are subject to daily price movement. Future performance may also be subject to taxation, that could change in the future. The value of investments can go down as well as up and you may not get back the full amount invested. Source: Atlantic House as at 31/12/24.
In conclusion, in its first year the Global Defined Returns Fund delivered on its stated targeted return of 8-9% while maintaining the ability to offer significantly lower drawdowns and volatility compared to equity markets. As we look ahead, we remain confident in the fund's ability to continue providing investors with a stable and predictable investment experience, making it a valuable addition to any diversified portfolio.
Average cover before capital loss
34.37%
Average cover to achieve a positive return
29.12%
This is a marketing communication. A comprehensive list of risk factors is detailed in the Risk Warnings Section of the Prospectus and the Supplement of the fund and in the relevant key investor information document (KIID) final investment decision should not be contemplated until the risks are fully considered. 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.geminicapital.ie.
Calculations do not consider credit spread movements of the issuers of the securities. The Mark to Market of the securities and therefore the NAV of the fund will decrease as credit spreads widen and vice versa if spreads narrow.
The value of investments and income from them can go down and you may get back less than originally invested. There is no guarantee that the Fund will achieve its objective. Past performance does not predict future returns. The level and basis of tax is subject to change and will depend on individual circumstances.
The fund invests in derivatives for investment purposes, for efficient portfolio management and/or to protect against exchange risks. Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of a derivative investment to fluctuate and the fund could lose more than the amount invested.
The fund invests in high quality government and corporate bonds. All bonds will be rated at least A- by Standard and Poors at outset. If any of the bonds the fund owns suffer credit events the performance of the fund could be adversely affected.
Other risks the fund is exposed to include but are not limited to, credit and counterparty risk, possible changes in exchange rates, interest rates and inflation, changing expectations of future market volatility, changing expectations of equity market correlation and changing dividend expectations.
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.
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 video 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.
The Atlantic House Uncorrelated Strategies Fund is a sub-fund of GemCap Investment Funds (Ireland) plc, an umbrella type open-ended investment company with variable capital, incorporated on 1 June 2010 with limited liability under the laws of Ireland with segregated liability between sub-funds.
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
2023 Fund Reviews
End of year review 2024
Global Defined Returns Fund
This is a marketing communication for professional investors only. Capital at risk.
Past performance does not predict future returns.
The fund has now been running for 18 months and although we determine success over a longer time horizon, we are pleased to report that the fund has delivered 8.55% annualised since launch. This is right in the middle of the fund’s 8-9% target return range. The fund performed exactly as expected given the market environment this year whilst offering investors significantly lower volatility and drawdowns to that of equities.
How did the year start?
The fund began the year in a relatively defensive position, with an equity delta of 33.2% and covers to capital loss and positive return comfortably above the minimum requirements for the fund.
Past performance does not predict future returns.
Source: Atlantic House as at 09/12/24