1. Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?
The Uncorrelated Strategies Fund is designed to introduce additional diversification into multi-asset portfolios, including at those times when traditional asset classes become more closely correlated. Since its launch in May 2022, the fund has grown to £136m.
Our investment process is evidence based and the result of years of research and development into creating a fund that can both protect investors in the event of downturns, whilst also providing positive returns over the long term.
The Uncorrelated Strategies Fund systematically invests in volatility and consists of two broad themes; Long Volatility and Diversifiers. These are populated with five sleeves, which in turn invest in a selection of multi-asset derivative strategies that are underpinned by different tailwinds in various markets. The sleeves elegantly deliver returns at different times and, as per design, can offset one another.
The fund delivers diverse and highly differentiated sources of return and, as a result, has low correlations to traditional and non-traditional assets.
Our investment team is headed up by Tom May, Chief Executive & Investment Officer, who co-founded Atlantic House in 2008 and continues to manage multiple Atlantic House funds including our flagship Defined Returns Fund and the innovative Uncorrelated Strategies Fund.
Alongside Tom, sits Deputy Chief Investment Officer, Mark Greenwood, whose expertise lies in inflation and running systematic derivatives investment funds.
The fund is co-managed by Tom Boyle who, in addition to his portfolio management responsibilities, leads our product development with asset managers and institutions, building bespoke derivative-based solutions for investors.
2. How are you currently positioning your portfolio?
The Uncorrelated Strategies Fund is a systematically implemented, rules-based strategy that invests in 2 broad themes. Long volatility strategies (tail seeking) and diversifying strategies. The fund is defensive and therefore risk weighted in favour of the tail seeking strategies to offer investors more effective diversification in a market sell off. Thanks to its rules-based nature, the fund avoids market timing and positioning pressures.
Across the two themes sit five clearly defined, uncorrelated sleeves, that access long standing dislocations in derivatives markets, four of which have well observed structural tailwinds that should go up in value over time and one is an insurance product that naturally comes with a cost (headwind). The diversifiers act as the alpha seeking strategies which should pay for owning the long volatility sleeves
3. Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio? This could be at a stock, sector or thematic level.
The two sleeves that have driven performance this year have both come from the diversifiers pillar, as you might expect, with volatility falling and global equites recovering much of the losses from last year.
Volatility Carry is one of the sleeves within the Diversifiers pillar that systematically sells market protection across both equites and credit markets. The anticipation of a recession has led investors to overpay for protection against significant falls and this strategy is able to monetise this mispricing. It's a long-standing concept that generally investors will overpay for insurance. If this continues as it has since the beginning of the year, we would expect there to be a consistent tail wind to this sleeve.
Dispersion is the second diversifier sleeve that has performed particularly well of late. It benefits from the volatility of stocks versus their respective indices. The last few months have seen some significant moves in several large stocks but the indices they are part of haven't moved a great deal on a relative basis. Take Nvidia which is up >150% versus the S&P which is up just over 15%. This ‘dispersion' has been another tailwind for the fund.
Additional info:
For more information about the Atlantic House Uncorrelated Strategies Fund or the Atlantic House offering, email us at [email protected].
KEY RISK
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.
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.
The Fund is entitled to use derivative instruments for investment purposes and for efficient portfolio management and/ or to protect against exchange risks. Derivatives may not achieve their intended purpose. Their prices may move up or down significantly over relatively short periods of time which may result in losses greater than the amount paid. This could adversely impact the value of the Fund. The Fund may enter into various financial contracts (derivatives) with another party. Where the Fund uses futures or forward foreign currency contracts (derivatives), it may become exposed to certain investment risks including leverage, market, mismatching of exposure and/or counterparty risk, liquidity, interest rate, credit and management risks and the risk of improper valuation. Any movement in the price of these investments can have a significant impact on the value of the Fund and the Fund could lose more than the amount invested.
The Fund invests in government and corporate bonds. All bonds will be investment grade (i.e. at or above S&P rating BBB- or deemed equivalent). If any of the bonds the Fund owns suffer credit events the performance of the Fund could be adversely affected. In certain market conditions some assets in the Fund may become less liquid than at other times so selling at their true value and in a timely manner could become more difficult.
Other risks the Fund is exposed to include but are not limited to are possible changes in interest rates, changing expectations of future market volatility, changing expectations of equity market correlation and changing dividend expectations. Future legal or regulatory change could have a significant effect on the Fund.
IMPORTANT INFORMATION
Source for all data is Atlantic House Investments as of 30/06/2023 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.
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 Ground Floor, 118 Rock Road, Booterstown, A94 V0Y, Co. Dublin and its registered office is at 7th Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, D02 E762. . 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
