Artemis Income fund is a flexible, high-conviction portfolio of UK stocks, targeting a rising income and capital gain. It's run by an experienced and stable management team, who can, and do, invest up to 20% of the fund in overseas stocks.
Our opinion
This fund has been a stalwart of the UK equity income sector for two decades and has an excellent team, a strong process and a long-term track record. The Artemis Income fund is designed to offer a diversified, eclectic mix of cashflows from different companies to ensure a sustainable and durable income. The overseas exposure has provided extra opportunities for additional returns.
Company description
UK-based Artemis was founded in 1997 as a limited liability partnership. Affiliated Managers Group (AMG) and the management team at Artemis own 100% of the equity of the business. This is a financial partnership; AMG takes a share of the revenues produced by Artemis but does not get involved in the day-to-day running of the business. A recipient of the Elite Provider for Equities rating in 2015, 2016, 2017, 2018 and 2020, Artemis has retained its manager-centric, innovative and supportive culture, which has helped it to attract and retain talented investors.
Fund manager
Artemis Income fund is managed by Adrian Frost, Nick Shenton and Andy Marsh. Adrian, a veteran who established a great track record before joining Artemis in 2002, has won a host of awards, reflecting his strong following among professional investors. Nick Shenton has co-managed this fund since July 2014, having joined the company's UK income team in the summer of 2012. He previously worked in fund management at F&C Asset Management and Polar Capital. Andy Marsh joined the team and became a co-manager in 2018 having also managed money at Polar Capital.
For most companies, cashflow is reflected in dividend policy. So we invest in companies where dividend and dividend progression are important drivers of valuation.
Adrian FrostFund manager
Investment process
The fund typically holds between 50-70 stocks and has a bias towards large-cap equities. The managers look for stocks deemed to be 'special situations'. These tend to appear in many different sectors, but are driven by similar catalysts: management change, recovery and industry restructuring. However, all the investments in Artemis Income fund have further similarities: they all have a strong franchise and often a unique product; they all have a quality management team whom the managers have met on several occasions; and most of them have been market darlings in the past but have since been discarded.
ESG
ESG - Integrated
Adrian and the team integrate ESG analysis into the process based on the belief that good or improving ethical and social practices can be beneficial to a business. This could be through an improvement in the sustainability of operations and cash flow, a lower cost of capital (as the company stays investable to a wider pool of investors), and therefore better financial outcomes. This in turn will lead to better long-term share price performance. There are also the wider social benefits too.
The team are active managers, meaning they will discuss their thoughts and analysis with their companies, though this does not mean they will take an activist stance and force change. They are long-term investors and believe their above average holding periods enable them to constructively improve firms through management engagement.
Risk
This is designed to be an all-weather fund that won't ever shoot the lights out but shouldn't greatly disappoint either. Over the long term, it has been slightly less volatile than its sector peers.
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