The beauty of defined return investing
Tom May, CIO at Atlantic House, gives the lowdown on defined return investing in general and the Atlantic House Defined Returns fund in particular.
Atlantic House CIO Tom May isn’t one to blow his own trumpet. When asked what’s so special about the Atlantic House Defined Returns fund, his answer is refreshingly modest: ‘It’s not for me to opine on how we differentiate ourselves from others. That can be for the audience to judge.’
The team, he says, is just obsessed with education and predictability.
‘The nature of our investment approach allows us to be very transparent, to the extent that each month we publish the fund’s likely returns over time and in different market conditions. The clarity we provide around our approach and the investment journey is something that our investors value highly’.
For May, defined return investing is about using liquid derivatives to compress returns of an underlying asset class into a narrower set of possible outcomes. ‘If, on average, markets do 7% per annum 15% of the time, we aim to make that 7% happen 35% of the time. We want to squeeze the probability of going outside of that range as much as we can.’
At the end of the day, defined return investing also aims to give investors peace of mind. Or as May put it: ‘If you can make investors’ asset pots deliver more predictable returns, it’s just going to make people more comfortable with what they’ve got.’
This article can be read here: Citywire