Atrium Evolution Series – Diversified Fund AEF 7
As at 30 September 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 are not guaranteed. 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 05/2024 Atrium Evolution Series – Diversified Fund AEF 5, 05/2024 Atrium Evolution Series – Diversified Fund AEF 7, 05/2024 Atrium Evolution Series – Diversified Fund AEF 7 P Units, 05/2024 Atrium Evolution Series – Diversified Fund AEF 9, 05/2024 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. © 2024 Lonsec. All rights reserved.
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Source: Atrium Investment Management, Bloomberg. 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. Return objectives are internal return objectives which are measures that Atrium considers internally when managing the portfolio. Internal return objectives are not performance benchmarks and are not features set out in the PDS. Note that the internal return objectives for AEF 7P Units and AEF 9P Units align to the performance return hurdles for these Units (as set out in the PDS for these performance-based fee products). Please refer to the Fund’s Product Disclosure Statement (PDS) for more information on returns.
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 | 6.32% | 5.46% | 5.14% | 4.16% | 2.66% | 10.22% | 2.06% | 2.89% | 1.18% |
| Objective | 5.62% | 5.24% | 5.19% | 5.29% | 6.30% | 7.84% | 3.86% | 1.92% | 0.62% |
Objective refers to the Return objective as stated in the Key Facts table.
Distributions
| 30/06/2024 | 31/12/2023 | 30/06/2023 | 31/12/2022 | 30/06/2022 | |
|---|---|---|---|---|---|
| Cents per unit | 1.80 | 1.15 | 0.32 | 1.10 | 3.57 |
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 are not guaranteed. 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 | 11.18% | |
| Cash | 17.06% | |
| Australian equities | 14.15% | |
| International equities | 26.46% | |
| Listed infrastructure | 4.23% | |
| Liquid alternatives | 18.09% | |
| 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 are not guaranteed. 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 |
|---|---|---|
| CASH POSITION | 9.57% | Cash |
| ANTIPODES GLOBAL FUND LONG UCITS CLASS S | 7.80% | Equities |
| SMARTER MONEY FUND - ASSISTED INVESTOR | 7.48% | Cash |
| FAIRLIGHT GLOBAL SMALL AND MID CAP (SMID) FUND - FOUNDATION CLASS | 5.47% | Equities |
| CROWN ATRIUM SEGREGATED PORTFOLIO SERIES 1 USD | 4.58% | Liquid alternatives |
| GLOBAL LISTED INFRASTRUCTURE MANDATE NO. 1 (MANAGED BY MAGELLAN) | 4.23% | Equities |
| HYPERION GLOBAL GROWTH COMPANIES FUND CLASS C | 4.03% | Equities |
| SGH ICE PROFESSIONAL INVESTOR FUND | 3.73% | Equities |
| NORTHCAPE CAPITAL GLOBAL EQUITIES FUND | 3.36% | Equities |
| MAN ALTERNATIVE RISK PREMIA - CLASS A SHARES (AUD) | 2.99% | Liquid alternatives |
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 are not guaranteed. 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
Equities rose in the September quarter, the fourth consecutive quarterly gain, re-accelerating relative to the June quarter. Despite the gains, there was considerable volatility in early August, with concerns around the sustainability of Nvidia’s incredible run, actions at the Bank of Japan, and weaker economic data. Government bond yields generally fell in major markets over the quarter. The Australian dollar rose, as did the gold price which continues to make record highs.
US equities gained 5.9% in the quarter with significant contributions from the following:
• Gold stocks were strong, reflecting the rise in the gold price, while Consumer Discretionary and Utility stocks were the standout.
• Office (and a range of other) REITs rose sharply, reflecting lower bond yields and a perception that the valuations in the sector had become attractive.
• The Semiconductor sector took a break from its meteoric rise, and was one source of considerable overall market volatility in early August.
The Australian market outperformed the US market:
• Information Technology rose sharply, led by strong gains in Wisetech Global.
• Real Estate linked exposures were strong, gaining from the view that the global (and Australian) interest rate tightening cycle had peaked.
• The Energy sector was weak, along with Utilities.
• Small capitalisation stocks continued to recover during the quarter.
US 10-year bond yields fell sharply, as the Federal Reserve initially gave signs that an easing was approaching, then actually cut rates by 50 basis points in September, leaving further cuts on the table. Australian bond yields fell, but by less than in the US, as markets believe that the Reserve Bank of Australia may need to hold rates higher than elsewhere, due to persistent services price pressures.
The firming in the Australian dollar was consistent with the relative moves in bond yields, reflecting the likelihood that Australian policy rates may need to be held higher relative to the US in particular.
Performance
The Fund generated a further positive return in September, buoyed by yet another gain in key equity markets. Key positive contributors to performance included the equity and rates and credit exposure.
Our rates and credit exposure remained a solid contributor in September. Attractive performance was generated by our higher yield credits (through KKR and CQS), which has added positive excess returns for each of the last three months. However, high yield credit is a small allocation to the overall portfolio, more important has been the strong contribution from our investment grade (higher credit quality) managers.
The global equity managers performed well over the month, led by Antipodes Global Fund, returning significantly better than the index due to a strong recovery in China. The Hyperion Global Growth Companies Fund benefitted from a further rise in Tesla, it’s largest holding. Our Global Listed Infrastructure Mandate closed out a strong quarter, albeit slightly behind benchmark, as infrastructure again outperformed broader equity markets as falling interest rates provide a tailwind and relative valuations remain attractive.
The Atrium Equity Opportunities Fund outperformed the index over the month, driven in part by strong performances from Lovisa, BHP and Goodman Group. Lovisa was a strong performer as investors focused on the bigger picture of a company continuing to deliver mid teen sales growth.
Our liquid alternatives managers experienced mixed fortunes for the month of September. Positive contributions came from our equity market neutral strategies that were able to capture strong returns in commodity stocks in Europe. Our systematic commodity manager also generated strong returns from commodity markets. Our systematic currency manager provided a negative contribution for the month which was driven by weakness in the US Dollar. In aggregate the liquid alternatives sleeve provided a small positive contribution to the portfolio.
Portfolio changes
Within the global equity sleeve, we have made changes which in aggregate terms tilt the fund more towards the smaller end of the equity market which has been left behind in the recent rally and has very favourable forward-looking characteristics at this point in the cycle, this has included the addition of the S&P 500 equal weight ETF (QUS).
In the rates and credit portfolio, we reduced our exposure to the Ardea Real Outcomes Fund. The strategy has struggled somewhat in a period of low inflation and volatile inflation expectations. We replaced the exposure with additions to the Kapstream Absolute Return Income Fund and Smarter Money Higher Income Fund, both of which are diversified portfolios with a structural exposure to credit markets of a highly rated nature.
Outlook
Markets are pricing a Goldilocks scenario in the US, with falling inflation expected to allow the US Federal reserve to further reduce interest rates in order to support economic growth. Risks remain that a resurgent spike in inflation could force a change in course, and this could cause significant disturbance to markets. However, the current economic evidence leans towards the Fed orchestrating a soft landing, cutting because they are able to ease, rather than because they are obliged to, so this should stimulate the economy and support risk markets. Accordingly, we have switched the fund positioning to be better suited to a modestly higher growth outcome.
While markets are pricing a soft landing, our view is that the range of possible outcomes remains broad and that investors need to be risk aware and prepared for a number of possible adverse scenarios, including around the upcoming US election, and any further turmoil in the Middle East.
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 are not guaranteed. 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 are not guaranteed. 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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