Volatility: Look at it another way
Atlantic House Total Return Fund
History tells us that the current decade could be set to become the most volatile in a generation. So how can investors prepare their portfolios for the more frequent and significant moves that characterise markets today?
Our approach on the Total Return Fund is to embrace volatility itself.
Used extensively in derivative pricing, ‘implied’ volatility – a measure of the expected FUTURE volatility of a variable – involves drawing on volatility’s consistent and historically low correlation to traditional asset classes. Additionally, market predictions of volatility tend to be overstated, delivering opportunity.
We embrace volatility in the Atlantic House Total Return Fund using an innovative, proprietary volatility overlay that seeks to protect the equity exposure in the portfolio at times when markets exhibit the most stress, but without unduly sacrificing performance when volatility is low.
The overlay strategy has two main components:
Systematic: Providing a constant level of cost-efficient exposure to implied volatility
Signals-based: Triggered when short-term indicators suggest volatility is likely to increase. It aims to provide a layer of protection as a significant event arises.
By combining these 2 different volatility strategies as part of the overlay, it is possible to manage the trade-off between safeguarding the portfolio in times of market stress and minimising the cost of that protection in low volatility markets.
During a recent webinar, Fund Manager Tom Boyle explains how he embraces volatility in the Atlantic House Total Return Fund, which, when harnessed effectively, can be a powerful diversifier.
Go back to Total Return Fund: In Focus
This is a marketing communication. A final investment decision should not be contemplated until the risks, which can be found in the Supplement, Prospectus and KIID are fully considered.
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 in the literature page or at www.geminicapital.ie.
A summary of investor rights associated with an investment in the Fund is available in English at www.gemincapital.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 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 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 can invest 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.
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.
Source for all data is Atlantic House Investments as of 30 November, unless stated otherwise.
This document 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 Atlantic House Total Return 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 Ground Floor, 118 Rock Road, Booterstown, A94 V0Y, Co. Dublin and its registered office is at 1 WML, Windmill Lane, Dublin 2, D02 F206. GemCap acts as both management company and global distributor to GemCap Investment Funds (Ireland) plc.
GemCap UK Limited (FRN 924419) is an appointed representative of Connexion Capital LLP (FRN 480006), which is authorised and regulated by the Financial Conduct Authority and provides distribution oversight services to GemCap acting as global distributor and is responsible for the oversight of all distribution arrangements for the sub-fund.