MAPS Risk Targeted Balanced Portfolio
31 March 2024
Features
Information
Ratings & awards
A rating is only one factor to be taken into account when deciding whether to invest.
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Investment objective
To seek to maximise returns while managing portfolio volatility such that it does not exceed the Upper Risk Limit of 7% p.a. over rolling 3-year periods.
Investment strategy
Atrium's focus is on the level of risk within the portfolio. We seek to allocate to investments across a broad range of asset classes based on an assessment of their value and contribution to total risk and return.
Atrium can dynamically adjust the allocation to asset classes on an ongoing basis. By doing this, we seek to build a portfolio that can withstand changes in underlying market volatility.
The aim is to deliver a risk level in the Investment Portfolio that is consistent with the investment profile selected.
Building portfolios that smooth out volatility
Atrium’s Risk Targeted investment approach aims to offer investors a smoother investment journey. By challenging conventional thinking and allocating to a wide array of investments, we construct truly diversified portfolios that seek to maximise opportunity and manage risk.
During market downturns we focus on minimizing losses to help investors achieve consistent growth over the long-term with less volatility. This is important to us because we care about the entire investment journey, not just the destination.
Our disciplined process is underpinned by three core principles that have enabled us to effectively pursue our investment objectives over a long time horizon.
Focus on risk first
Seek consistency of returns
Seek to preserve capital
Source: Atrium, for illustrative purposes only. This graph is not a guarantee of future performance and undue reliance should not be placed upon it.
Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. Information contained in this document attributable to SQM Research must not be used to make an investment decision. The SQM Research rating is valid at the time the report was issued, however it may change at any time. While the information contained in the rating is believed to be reliable, its completeness and accuracy is not guaranteed. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme.
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Source: Atrium Investment Management, HUB24. Performance as at the date of this report. Inception date is 6 December 2018. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. Performance figures relate to the model portfolios managed by Atrium. Individual investor portfolio performance may be different from the results above and will differ among clients depending on the timing of their investment and the level of variation from the models. Performance is net of investment management fees, does not take into account platform administration fees that may apply and may not take into account some or all of the rebates you may receive.
Performance
| Since inception (% p.a.) | 10 Years (% p.a.) | 7 years (% p.a.) | 5 years (% p.a.) | 3 years (% p.a.) | 1 year | 6 months | 3 months | 1 month | |
|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 5.32% | 4.78% | 4.24% | 8.83% | 6.86% | 5.05% | 1.94% | ||
| Benchmark | 4.98% | 4.98% | 5.59% | 7.65% | 3.83% | 1.90% | 0.64% |
Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
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Understanding our Risk Targeted investing approach
Atrium is a multi-asset investor that challenges conventional thinking and practices with a proven Risk Targeted approach that preserves and grows wealth for clients. Risk Targeted investing is a dynamic approach to generating investment returns in a more consistent manner while controlling overall portfolio risk. We give our investors the confidence to stay invested through the ups and downs of financial markets, providing peace of mind on your wealth building journey.
Building portfolios that smooth out volatility
When constructing portfolios, our focus is on managing risk through our allocation to a wide array of investments. In this way, Atrium aims to build portfolios that are less susceptible to market volatility and therefore deliver more consistent return outcomes.
Illustrative Only
Case study: COVID-19
The first quarter of 2020 was a volatile period for markets as the COVID-19 pandemic started to spread around the globe. In line with our Risk Targeted investment philosophy, our portfolios focused on managing risk to limit drawdowns (i.e. the loss of investor capital), and on delivering more consistent returns for investors over the long-term. While returns were lower over the quarter as a result of the sharp market decline, the Atrium portfolios benefited from our genuine diversification, our dynamic asset allocation approach and a more defensive positioning entering this volatile period.
Portfolio performance (Feb 2020 - Apr 2020)
| Feb 2020 | -2.0% |
| Mar 2020 | -6.9% |
| Apr 2020 | 1.6% |
ASX performance (Feb 2020 - Apr 2020)
| Feb 2020 | -7.7% |
| Mar 2020 | -20.7% |
| Apr 2020 | 8.8% |
Volatility & Sharpe Ratio
| 10 Years | 7 Years | 5 Years | 3 Years | |
|---|---|---|---|---|
| Volatility (% p.a.) | - | - | 5.44 | 4.27 |
| Sharpe Ratio | - | - | 0.68 | 0.74 |
What is volatility?
Volatility measures the fluctuations, or changes, in the price of an asset or market index. Assets with higher volatility generally have greater price changes, both positive and negative, and so higher volatility is generally an indication of higher risk.
What is the Sharpe Ratio?
The Sharpe Ratio measures returns relative to the volatility, or risk, that was taken to achieve that return. The higher the ratio, the better the risk-adjusted performance has been - in other words, the investment risks taken have delivered better returns to the portfolio.
Maximum monthly drawdown since inception
What is maximum drawdown?
Maximum drawdown measures the largest fall in an asset's or market's price, from a peak to its subsequent lowest point. Maximum drawdown is an indicator of downside risk specifically - that is, it reflects the greatest loss of capital an investor may have experienced over the time period.
Performance in positive & negative markets since inception
Portfolio - Average monthly return
ASX200 - Average monthly return
What is up/down capture?
Up capture measures how an asset has performed in periods where the market return was positive, whereas down capture measures how the asset has performed in periods of negative market returns. Together, these measures provide an indication of how the asset has performed in both positive and negative market environments.
Source: Atrium Investment Management, HUB24. Performance as at the date of this report. Inception date is 6 December 2018. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. Performance figures relate to the model portfolios managed by Atrium. Individual investor portfolio performance may be different from the results above and will differ among clients depending on the timing of their investment and the level of variation from the models. Performance is net of investment management fees, does not take into account platform administration fees that may apply and may not take into account some or all of the rebates you may receive.
How we manage risk in portfolios
Sequencing risk
Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
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Asset allocation
| Rates & credit | 25.01% | |
| Cash | 5.05% | |
| Australian equities | 13.41% | |
| International equities | 23.12% | |
| Listed infrastructure | 4.76% | |
| Liquid alternatives | 28.65% |
Atrium aims to achieve its investment objectives by investing across a range of asset classes on a global basis that provide exposure to different risk factors.
Each asset is included in the Portfolio for its ability to contribute to returns on a stand alone basis.
The investment universe comprises of 3 broad categories - Preservers, Growth Drivers and Diversifiers.
 | PreserversAssets that protect the portfolio during periods of heightened equity market volatility and preserve capital, such as cash, government bonds and high quality investment grade bonds. |
 | Growth DriversAssets that are expected to deliver higher rates of return over time with higher levels of associated volatility (risk). This predominantly comprises equities but also includes other assets that are highly correlated to equities such as listed property and infrastructure. |
 | DiversifiersAssets that generate additional real returns, with performance that is typically uncorrelated to the growth drivers and preservers within the portfolio.Importantly, they are a source of portfolio diversification away from equity market and interest rate risks, such as liquid alternatives and private markets. |
Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
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Top holdings
| Holding | Weight | Asset Class |
|---|---|---|
| GLOBAL MACRO STRATEGIES FUND | 7.79% | Liquid alternatives |
| KAPSTREAM ABSOLUTE RETURN INCOME FUND CLASS I | 6.92% | Rates & credit |
| GLOBAL LONG SHORT STRATEGIES FUND | 6.41% | Liquid alternatives |
| GLOBAL RISK PREMIA STRATEGIES FUND | 5.88% | Liquid alternatives |
| CASH POSITION | 5.05% | Cash |
| GLOBAL LISTED INFRASTRUCTURE MANDATE NO. 1 (MANAGED BY MAGELLAN) | 4.76% | Equities |
| ANTIPODES GLOBAL FUND - LONG ONLY CLASS I | 4.41% | Equities |
| ARDEA REAL OUTCOME FUND CLASS A | 4.35% | Rates & credit |
| VANGUARD INTERNATIONAL SHARES ETF | 4.07% | Equities |
| DAINTREE CORE INCOME TRUST | 3.77% | Rates & credit |
Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
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Market update
The March quarter was a strong one for equity markets, as markets gained comfort that monetary policy tightening has run its course, to be followed at some point over 2024 by a pivot to lower rates. However, bond yields rose as markets assumed the Federal Reserve may be slower to cut rates than expected around the turn of the year.
The US equity market gained 10.6% for the quarter. The quarter saw a notable broadening out of the rally, however the following were key driving factors:
• Strong buying of technology-linked and new-economy stocks, notably Nvidia as it posted very strong revenue growth for the fourth quarter. However, Apple and Tesla were conspicuous in bucking this trend.
• Easing financial conditions as the cash rate seems to have peaked, although this optimism was partially unwound late in the quarter.
The Australian market generated a return of +5.3% impacted by:
• Mixed results in the earnings reporting period, including a disappointing nickel write-down for Australia’s largest company, BHP; and
• A notable outperformance of small capitalisation stocks over the broader market.
10-year bond yields rose over the quarter as the market pushed out cuts in interest rates, as inflation readings in the US remained slightly more elevated than expected. June is seen as the earliest meeting for a cut by the US Federal Reserve Bank. Yields are also under upward pressure due to deteriorating US fiscal dynamics. Australian 10-year bond yields rose to a lesser extent, as there is some evidence that the sharp policy tightening is negatively impacting consumers.
The Australian dollar fell over the quarter, as the US dollar rose. Key Australian export prices were lower over the quarter. The gold price rose sharply, unusual in a period of rising bond yields and a stronger US dollar. The Japanese Yen remains at multi-decade lows against the US dollar, despite moving to exit its negative policy rate policy during the quarter.
Performance
The Portfolio continued its strong start to the year, with all asset classes contributing positively to performance, with equities and liquid alternatives the standout contributors.
Within global equities, the Antipodes Global Fund – Long Only, was the standout and outperformed the index as it benefitted from a broadening of the US equity market rally into emerging markets and European stocks over the month. The only detractor was the Hyperion Global Growth Companies Fund, which gave back some of its very strong recent performance. Our direct Australian shares were also a solid contributor on the back of gold miner NST, and recent addition in the property sector, Goodman Group.
The resilience of liquid alternatives in both rising and falling equity markets has been pleasing as it delivered solid returns over the month with Global Macro Strategies Fund the standout with the underlying systematic macro managers benefiting from higher equity, gold, and cocoa prices.
Within our preserver allocations most managers delivered positive returns, as credit continues to perform well in an environment where the risks of a recession have narrowed.
Portfolio changes
This month saw several changes as we pivoted the Portfolio to be more neutral rather than underweight risk assets. Over the last few months we have reallocated capital from cash and fixed interest towards undervalued areas such as high yield credit, global small and mid-cap equities and emerging market equities which we believe were priced for slower growth and even recession. We have also added modestly to broader global equity exposure, funded by reducing Australian bonds and liquid alternatives.
The month also saw activity within our direct Australian shares, with the portfolio re-positioning for growth and allocating new capital to the Goodman Group, REA and GUD holdings, while removing Amcor and Woodside, and trimming exposure to CSL and Woolworths.
Outlook
The probability of a hard landing in both the US and Australia has reduced dramatically. We believe that global central banks will tolerate inflation outside of their target zones for longer, which reduces the risk of restrictive monetary policy coinciding with slower economic growth over 2024.
However, the “last mile” of getting inflation back to target remains the most challenging for central banks, with the risk of both higher inflation and an economic slowdown remaining. These risks are further compounded by exuberance in many segments of the global equity market (namely tech and AI), and overly optimistic expectations for significant cuts in interest rates - which could act as a handbrake to any further increases in equity exposure given our risk targeted approach to investing and focus on delivering investors a smoother return profile.
Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
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Important Information:
The information in this document (Information) has been prepared and issued by Atrium Investment Management Pty Ltd (ABN 17 137 088 745, AFSL 338 634) (Atrium). This Information is provided for the use of licensed and accredited financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products. The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. No liability is accepted for any loss or damage as a result of any reliance on the Information. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Integrated Managed Account Portfolio Service (ARSN 627 688 402) (MAPS). An investor can only invest in MAPS through HUB24 Invest, an investor directed portfolio service (IDPS) operated and administered by HUB24 Custodial Services Limited ABN 94 073 633 664, AFSL 239 122 (‘HUB24 Custodial Services’), or through HUB24 Super, a super investment service offered through the HUB24 Super Fund (ABN 60 910 190 523, RSE R1074659 USI 60 910 190 523 001) (‘Nominated Platform’ means either HUB24 Invest or HUB24 Super). HUB24 Custodial Services is the promoter of the HUB24 Super Fund and provides a range of services to the HUB24 Super Fund. Atrium is a portfolio manager for MAPS. Investors should consider the MAPS Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from the Nominated Platform’s website) before making any investment decision. Investors should refer to the disclosure documents for the Nominated Platform (available from their adviser or Nominated Platform) together with the PDS for important information concerning an investment in MAPS.
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