End of year review 2025
Defined Returns Fund
This is a marketing communication for professional investors only. Capital at risk.
Past performance does not predict future returns.
2025 has been characterised by rising equity markets and a relatively smooth performance for the fund of 7.86% year-to-date (31-Oct-25). November 2025 marked the fund’s 12th anniversary, delivering an annualised return of 7% since 2013, providing investors with predictable returns, lower volatility, and smaller drawdowns compared to equities. This review highlights key performance drivers, portfolio activity, and the outlook for 2026. The Defined Returns Fund continues to deliver on its stated targeted return of 7-8% while maintaining the ability to offer significantly lower drawdowns and volatility compared to equity markets.
Performance summary
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7.86% year-to-date (31-Oct-25)
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7.00% annualised since launch
Performance of Fund and major equity indices
Past performance does not predict future returns.
Source: Atlantic House as at 31/10/2025
Overview of the year
The equity indices that the fund is most exposed to (UK, US and EU) have returned 19% year-to-date (to 31-Oct-25), a remarkable run that has been consistent apart from a short and sharp fall in March / April. The fund is up 7.86% year-to-date but with a smoother path compared to equities. This can been seen in the 2025 performance chart above where the fund fell around 7% in March while equities fell 15-20%. This makes sense because the sensitivity of the fund to equity market moves has been 30-35% most of this year. Historically this is at the lower end of the typical range over the 12 years of the Fund, 30-60%.
Over the last few years interest rates have been higher than they were for the first 8 or 9 years of the fund’s life. Pricing for new autocall investments improves as interest rates increase, all else being equal. This means three possible characteristics when buying new autocalls in the fund: 1) higher annual coupons, 2) more defensive autocall barriers and capital protection barriers, 3) a larger proportion of dual-index autocalls than triple-index.
The managers have focused primarily on 2 and 3 here to ensure the fund is as defensive as possible while obtaining high enough coupons to meet the fund return objective of 7-8% annualised. The fund’s 51 autocalls are therefore almost entirely dual-index with dropping annual autocall barriers and a 69% year 6 autocall barrier. The average annual coupon of the existing autocalls is 8.8%.
2026 outlook
Average cover before capital loss
41.04%
Average cover to achieve a positive return
36.59%
Past performance does not predict future returns.
Source: Atlantic House as at 31/10/25
Combined with the strong markets this year the defensive shape of the autocalls in the fund have meant that the cover before capital loss and cover to achieve a positive return are now as high as they ever have been. The fund is therefore in a strong position if equity markets fall and, with the vast majority of the autocalls in the fund having been struck within the last year, markets would need to fall over 36.5% and not recover at all over the next 5 years or so for the average autocall in the fund to not pay out its annual coupons.
Past performance does not predict future returns.
Source: Atlantic House as at 31/10/25.
On the upside, the fund has the potential to deliver 7.77% return in flat equity markets and 9.31% if equity markets rise by 10% over the next 12 months. If equity markets fall by 10% over the next year, we project the fund to still deliver a positive return of 2.99%. Even if markets fall 20% and stay down, the fund is expected to deliver 1.29% over 2 years.
We remain focused on:
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Returning 7-8% annualised in anything but the bleakest of equity markets
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Providing as much downside protection as possible
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Ability to offer lower drawdowns and volatility compared to equity markets
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Provide a valuable addition to any diversified portfolio
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.geminicapital.ie. A summary of investor rights associated with an investment in the fund is available in English at ww.gemincapital.ie.
Please be aware that past performance is not indicative of future performance. The value of investments and income from them can go down as well as up, and you may get back less than originally invested.
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.
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 on these and other risks, please refer to the fund prospectus and offering documents, including the KID or KIID, as applicable.
The information contained in this communication is general information only and has been prepared by Atlantic House Investments Limited (“Atlantic House”), a Corporate Authorised Representative of Mantis Funds Services Pty Ltd (ABN 97 649 083 689; AFSL 531027) and is provided only for the information of Australian sophisticated investors who qualify as "wholesale clients" under section 761G of the Corporations Act.
Equity Trustees Limited (‘EQT’) (ABN 46 004 031 298; AFSL 240975) is the Responsible Entity for the AHI Defined Returns Fund (the Fund), which is an unregistered managed investment scheme managed by Atlantic House and Mantis Funds Pty Ltd (ABN 77 640 207 021) (Authorised Representative No. 001281645) ("Mantis"). Mantis is a corporate authorised representative of Mantis Financial Group Pty Ltd (ABN 94 614 846 963) (AFSL 492452)
The information in this communication is not financial advice and is not to be used as a basis for making any investment decision. It is not intended to take the place of professional advice and does not take into account your investment objectives, financial situation and particular needs. You should not act on this information or any other information provided to you in relation to the Fund without first consulting your investment. taxation and other relevant advisors and reading the relevant product disclosure statement or other offer documents. Nothing in this communication shall be construed as a solicitation to buy or sell a security or to engage in or refrain from engaging in any transaction.
Whilst Atlantic House believes that the information contained herein is correct at the time of compilation, none of Atlantic House, Mantis, Mantis Funds Services Pty Ltd, Mantis Financial Group Pty Ltd or EQT provide any representation or warranty that it is accurate, complete, reliable or up to date. Nor do any of Atlantic House, Mantis, Mantis Funds Pty Ltd, Mantis Financial Group Pty Ltd or EQT accept any obligation to correct or update the information in this communication. The information in this communication is subject to change without notice. Atlantic House, Mantis, Mantis Funds Pty Ltd, Mantis Financial Group Pty Ltd and EQT do not accept any liability whatsoever for any direct. indirect, consequential or other loss arising from any use of the material contained in this communication. Information in this communication may refer to the past performance of a person. entity or financial product. Past performance is not a reliable indicator of future performance.