2026 Mid-year fund review: Defensive Defined Returns

The first half of 2026 was characterised by heightened macroeconomic and geopolitical uncertainty. The outbreak of the US-Iran war resulted in sharp swings in oil prices and inflation expectations, while stronger-than-expected US labour market data and the appointment of a new Federal Reserve Chair caused markets to reassess the expected path of interest rates. Against this backdrop, enthusiasm surrounding artificial intelligence and its potential to drive long-term productivity growth continued to support equity markets despite increasing questions around valuation. 

The fund has performed as intended since being repurposed in December 2025, delivering returns towards the upper end of its 5–7% annualised target return over the medium to long term. It has achieved this through combining Defined Return Investments with a Protection Overlay comprised of systematic defensive strategies designed to mitigate drawdowns during periods of market stress. 

Historical performance is not an indication of future performance, and any investments may go down in value. Returns are net of charges. Source: Atlantic House 30 June 2026.

Performance summary

• The fund returned 7.00% annualised year-to-date and 7.51% annualised since being repurposed on 18 December 2025, placing performance towards the upper end of its 5–7% annualised target return.  

• The Defined Return Investments and Protection Overlay exhibited a daily correlation of approximately -0.6 year-to-date, demonstrating the effectiveness of the Protection Overlay in helping to protect the Defined Return Investments during the periods of market uncertainty experienced in the first half of 2026. 

• Since being repurposed, the fund has exhibited a beta of approximately 0.3 to global equities, providing significantly lower equity market sensitivity than traditional equity investments. 

Overview of the year so far

Since being repurposed in December 2025, the fund has delivered returns towards the upper end of its 5–7% annualised target range. The fund has achieved this through a full allocation to a diversified portfolio of Defined Return Investments linked to global equity indices, designed to deliver annualised returns of approximately 7–8% in all but the most adverse equity market environments. Alongside this, the fund employs a Protection Overlay comprising systematic defensive strategies, designed to generate positive returns during periods of significant market stress and mitigate drawdowns from the Defined Return Investments. When significant market stress is absent, the expected long-term cost of the Protection Overlay is approximately 2% per annum. 

The Defined Return Investments performed as anticipated during the first half of 2026, continuing to deliver attractive returns despite periods of heightened market uncertainty. The Protection Overlay also behaved as intended, helping to protect the Defined Return Investments as markets came under pressure. This is reflected in the daily correlation of around -0.6 between the two allocations over the period, with the diversification between them contributing to the fund's beta of approximately 0.3 to global equities and supporting its role as an alternative allocation within investor portfolios. 

The benefits of the Protection Overlay were particularly evident on 5 June, when US equity markets fell by 2.6% and the Defined Return Investments also declined. The Protection Overlay contributed approximately 0.42% to fund performance, more than offsetting these losses and resulting in a positive day for the fund while many traditional diversifiers, including government bonds, also declined. 

Elevated market volatility during the first half of the year improved pricing across newly issued Defined Return Investments, increasing the expected returns available from autocalls. The investment team continued to add new positions throughout the period, maintaining a diversified ladder of maturities and taking advantage of these attractive investment opportunities. The fund's three most recent Defined Return investments were entered alongside the flagship Atlantic House Defined Returns Fund, with coupons of 9.25%, 11.65% and 9.52%. 

The cost of the Protection Overlay was modestly higher than the fund's long-term expectation during the first half of the year, with the cost of protection realising at approximately 1.5% for H1 2026, compared with the fund's long-term expectation of approximately 2% per annum. This was a natural consequence of heightened market uncertainty, as elevated volatility increased the cost of downside protection. However, the same market conditions also created a more attractive pricing environment for Defined Return Investments. This meaningful improvement in the investment opportunity set more than offset the higher cost of protection, leaving the fund well positioned to continue delivering returns towards the upper end of its target range while maintaining a Protection Overlay designed to mitigate significant market drawdowns. 

Outlook for the Remainder of 2026

The attractive pricing environment for Defined Return Investments experienced during the first half of the year has strengthened the portfolio's expected return profile. Current scenario analysis indicates that, assuming broadly flat equity markets, the Defined Return Investments are expected to generate approximately 8.7% over the next twelve months, placing the fund in a strong position to continue delivering returns within its 5–7% annualised target range after allowing for the expected cost of the Protection Overlay in the absence of significant market stress. The portfolio is well positioned to continue delivering attractive returns across a broad range of market environments while mitigating the impact of significant market drawdowns. 

We remain focused on:

• Delivering 5–7% annualised returns over the medium to long term. 

• Maintaining a diversified portfolio of Defined Return Investments designed to deliver attractive returns across a broad range of equity market environments. 

• Protecting the Defined Return Investments through a Protection Overlay comprising systematic defensive strategies designed to mitigate drawdowns during significant market stress 

• Providing investors with a more predictable alternative allocation, seeking to deliver attractive returns with significantly lower sensitivity to global equity markets than traditional equity investments. 

Jack Roberts, Fund Manager

Key risks

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.ascenderfundpartners.com. A summary of investor rights associated with an investment in the Fund is available in English at www.ascenderfundpartners.com.

Historical performance is not an indication of future performance, and any investments may go down in value.

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 o

Important information

This article is 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 document 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. The information provided in this material is confidential and only for use by its recipient. 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.

The Atlantic House Defined Returns Fund is a sub-fund of Atlantic House UCITS ICAV, an umbrella-type open-ended Irish Collective Asset-management Vehicle (“ICAV”) with segregated liability between sub-funds. Atlantic House UCITS ICAV is authorised by the Central Bank of Ireland pursuant to the European Communities Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the “UCITS Regulations”) as amended, from time to time. Ascender Fund Partners (Ireland) Limited, trading as Ascender Fund Partners, 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. Ascender Fund Partners acts as management company to Atlantic House UCITS ICAV.