Atrium Evolution Series – Diversified Fund AEF 7
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 maximise returns while ensuring portfolio risk, or volatility, does not exceed 7% over a rolling three (3) year time period.
Investment strategy
The Fund has a Risk Targeted, multi asset investment strategy.
Atrium uses a dynamic, unconstrained approach to asset allocation providing flexibility to take full advantage of opportunities in the market and to mitigate downside risk.
The Fund may be invested in a broad universe of assets across multiple asset classes.
Atrium may also use derivatives to gain exposure to assets or asset classes more efficiently, for currency management, and to mitigate downside risk.
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). The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Atrium Evolution Series – Diversified Fund (ARSN 151 191 776) (Fund). The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. Before acting on the Information, investors should consider its appropriateness having regard to their own objectives, financial situation and needs and obtain professional advice. No liability is accepted for any loss or damage as a result of any reliance on the Information. Investors should consider the Fund’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from www.atriuminvest.com.au) before making any investment decision. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. The Atrium Global Equities Mandate No. 1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Global Fund. The Global Listed Infrastructure Mandate No.1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Infrastructure Fund.
The rating issued 04/2023 Atrium Evolution Series – Diversified Fund AEF 5, 04/2023 Atrium Evolution Series – Diversified Fund AEF 7, 04/2023 Atrium Evolution Series – Diversified Fund AEF 7 P Units, 04/2023 Atrium Evolution Series – Diversified Fund AEF 9, 04/2023 Atrium Evolution Series – Diversified Fund AEF 9 P Units are published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit www.lonsec.com.au for ratings information and to access the full report. © 2023 Lonsec. All rights reserved.
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Source: Atrium Investment Management. Performance shown as at the date of this report. Inception date is 24/06/2011. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. Performance is after fees and costs and assumes re-investment of all distributions.
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 | 6.41% | 5.53% | 5.12% | 5.08% | 4.12% | 8.06% | 8.00% | 4.67% | 1.89% |
| Objective | 5.53% | 5.15% | 4.99% | 4.98% | 5.59% | 7.65% | 3.83% | 1.90% | 0.64% |
Objective refers to the Return objective as stated in the Key Facts table.
Distributions
| 31/12/2023 | 30/06/2023 | 31/12/2022 | 30/06/2022 | 31/12/2021 | |
|---|---|---|---|---|---|
| Cents per unit | 1.15 | 0.32 | 1.10 | 3.57 | 1.22 |
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). The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Atrium Evolution Series – Diversified Fund (ARSN 151 191 776) (Fund). The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. Before acting on the Information, investors should consider its appropriateness having regard to their own objectives, financial situation and needs and obtain professional advice. No liability is accepted for any loss or damage as a result of any reliance on the Information. Investors should consider the Fund’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from www.atriuminvest.com.au) before making any investment decision. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. The Atrium Global Equities Mandate No. 1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Global Fund. The Global Listed Infrastructure Mandate No.1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Infrastructure Fund.
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Asset allocation
| Rates & credit | 11.26% | |
| Cash | 12.93% | |
| Australian equities | 14.13% | |
| International equities | 28.95% | |
| Listed infrastructure | 4.04% | |
| Liquid alternatives | 19.85% | |
| Private markets | 8.83% |
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). The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Atrium Evolution Series – Diversified Fund (ARSN 151 191 776) (Fund). The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. Before acting on the Information, investors should consider its appropriateness having regard to their own objectives, financial situation and needs and obtain professional advice. No liability is accepted for any loss or damage as a result of any reliance on the Information. Investors should consider the Fund’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from www.atriuminvest.com.au) before making any investment decision. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. The Atrium Global Equities Mandate No. 1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Global Fund. The Global Listed Infrastructure Mandate No.1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Infrastructure Fund.
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Top holdings
| Holding | Weight | Asset Class |
|---|---|---|
| ANTIPODES GLOBAL FUND LONG UCITS CLASS S | 7.58% | Equities |
| SMARTER MONEY FUND - ASSISTED INVESTOR | 6.71% | Cash |
| CASH POSITION | 6.23% | Cash |
| ATRIUM GLOBAL EQUITIES MANDATE NO.1 (MANAGED BY MAGELLAN) | 5.60% | Equities |
| FAIRLIGHT GLOBAL SMALL AND MID CAP (SMID) FUND - FOUNDATION CLASS | 4.51% | Equities |
| NORTHCAPE CAPITAL GLOBAL EQUITIES FUND | 4.23% | Equities |
| GLOBAL LISTED INFRASTRUCTURE MANDATE NO. 1 (MANAGED BY MAGELLAN) | 4.04% | Equities |
| CROWN DIVERSIFIED MACRO SEGREGATED PORTFOLIO SERIES | 3.99% | Liquid alternatives |
| HYPERION GLOBAL GROWTH COMPANIES FUND CLASS C | 3.87% | Equities |
| SGH ICE PROFESSIONAL INVESTOR FUND | 3.73% | Equities |
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). The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Atrium Evolution Series – Diversified Fund (ARSN 151 191 776) (Fund). The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. Before acting on the Information, investors should consider its appropriateness having regard to their own objectives, financial situation and needs and obtain professional advice. No liability is accepted for any loss or damage as a result of any reliance on the Information. Investors should consider the Fund’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from www.atriuminvest.com.au) before making any investment decision. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. The Atrium Global Equities Mandate No. 1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Global Fund. The Global Listed Infrastructure Mandate No.1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Infrastructure Fund.
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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 Fund 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. Within Australian equities, the Atrium Equity Opportunities Fund was 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 Crown Diversified Macro Segregated Portfolio 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 Fund 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. Within private markets we have been tilting the portfolio towards credit to take advantage of higher base rates and attractive spreads.
The month also saw activity within the Atrium Equity Opportunities Fund, 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). The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Atrium Evolution Series – Diversified Fund (ARSN 151 191 776) (Fund). The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. Before acting on the Information, investors should consider its appropriateness having regard to their own objectives, financial situation and needs and obtain professional advice. No liability is accepted for any loss or damage as a result of any reliance on the Information. Investors should consider the Fund’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from www.atriuminvest.com.au) before making any investment decision. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. The Atrium Global Equities Mandate No. 1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Global Fund. The Global Listed Infrastructure Mandate No.1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Infrastructure Fund.
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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). The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235 150) is the Responsible Entity of the Atrium Evolution Series – Diversified Fund (ARSN 151 191 776) (Fund). The Information is of a general nature only and does not take into account the objectives, financial situation or needs of any person. Before acting on the Information, investors should consider its appropriateness having regard to their own objectives, financial situation and needs and obtain professional advice. No liability is accepted for any loss or damage as a result of any reliance on the Information. Investors should consider the Fund’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) (available from www.atriuminvest.com.au) before making any investment decision. Past performance is not a reliable indicator of future performance. Future performance and return of capital is not guaranteed. The Atrium Global Equities Mandate No. 1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Global Fund. The Global Listed Infrastructure Mandate No.1 is a separately managed portfolio managed by Magellan Asset Management Limited in a manner consistent with the Magellan Infrastructure Fund.
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