Global, Income and Caution: three top themes this ISA season
It’s the new tax year. Not quite as exciting as a new calendar year, but a good time a make...
Artemis Monthly Distribution
Artemis Monthly Distribution invests in both bonds and equities from around the world in pursuit of an attractive monthly income, as well as capital growth. The ratio between bonds and equities will be varied to suit market conditions. Strong stock picking skills have enabled the managers to create a portfolio of reliable and diversified income sources.
Our opinion
While many multi-asset funds combine bonds and equities, we particularly like James and Jacob’s highly active approach to managing allocation, which means the fund can respond effectively to changing market environments. With two of our favourite stock pickers in charge, the Artemis Monthly Distribution fund’s diverse portfolio and monthly payment mandate may make it an excellent ‘all weather’ option for income-focused investors
Company description
UK-based Artemis was founded in 1997. 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 and 2018, Artemis has retained its manager-centric, innovative and supportive culture, which has helped it to attract and retain talented investors.
Fund manager
Jacob de Tusch-Lec manages the equities portion of the Artemis Monthly Distribution fund and James Foster the fixed income. Jacob has been in the industry since 1998 and has been a fund manager since 2005. He is also manager of the Elite Rated Artemis Global Income fund. James has more than 20 years’ experience in fixed income and joined Artemis in 2005 from F&C Asset Management, where he was head of credit. They have run the Artemis Monthly Distribution fund together since its launch in 2012.
In managing the fund, we tread a tightrope, moving forward by seeking the right balance between risk and reward.
James FosterFund manager
Investment process
Picking the right stocks and holding the right proportions of each asset class are key. The fund’s natural split is 60% bonds and 40% equity, although it can shift quite significantly, depending on how the managers feel about global economies, stock markets and companies. When choosing investments, James and Jacob focus on fundamental analysis of company accounts and how effectively a business uses its cash. Within the bond portion of the portfolio, James may vary his weighting between government, investment grade and high yield bonds, as factors such as interest rates and inflation alter the outlook. The fund typically has around 150 to 200 holdings.
Risk
Artemis Monthly Distribution is designed to have lower volatility than equities, but higher returns than bonds. The two asset classes help to naturally diversify the fund’s income stream, with bonds offering some capital protection from equity market falls – although this can drag on performance when stock markets rise. Limits as to how much can be invested in a single stock, sector or country reduce the risk of one area’s underperformance impacting the entire portfolio.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.