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Artemis Global Income Fund

All data as at 31 January 2017 except where specified
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The fund’s aims

The fund aims to achieve a rising income combined with capital growth from a wide range of investments. The fund will mainly invest in global equities but may have exposures to fixed interest securities. We will not be restricted in our choice of investments, regardless of size of the company, the industry it trades in or the geographical split of the portfolio.

Current prices and yield
(class I)

As at noon, 24 February 2017
Bid price (acc units)127.20p
Bid price (dist units)98.05p
Offer price (acc units)128.83p
Offer price (dist units)99.31p
Historic yield (acc units)2.90%
Historic yield (dist units)2.98%

Investment information
(class I)

Minimum lump sum investment£250,000
Ongoing charge (acc units)0.81%
Ongoing charge (dist units)0.81%

The initial charge is currently waived. The ongoing charge includes the annual management charge of 0.75% and is shown as at the date of the Key Investor Information Document (KIID), where a full explanation of the fund's charges can be found.

Fund managers’ update

The global economy remains in a sweet spot for equities. Growth is robust, interest rates are still at (or near) record lows and we are about to get a bout of fiscal stimulus in the US (and perhaps even in Europe). Purchasing managers’ indices are above 50 (signalling expansion) in the three major regions of the global economy, unemployment is falling and commodity prices are picking up. Ordinarily, our satisfaction with all this would be tempered by looking ahead to what might happen in 12 months’ time. Markets are priced with reference to expectations for the future and although the current strength of the global economy is unmistakable, the inevitable question is when the next recession will hit. We believe the probability of a recession this year is diminishing (the caveat being political risks) yet there is a huge amount of scepticism towards the trends unfolding in equity markets.

Although we are not complacent, and acknowledge that the global economy will slow at some point, we believe the rehabilitation of cyclical areas of the market still has further to go.

A year ago, it was not uncommon to find investors who believed China was on the brink of collapse and that a period of recession and deflation in the global economy beckoned. By last July, things had improved dramatically and bond yields had bottomed out. Yet the earlier scepticism lingered. Today, the argument of pessimists has moved on: they now insist that this is ‘as good as it gets’. Clearly, there will be a slowdown at some point, but there is great reluctance in some quarters to acknowledge the health of the global economy. With economic data all pointing in a positive direction, large areas of the stockmarket are becoming ‘investible’ once again: buying financials, mining companies or even banks is no longer unthinkable. The magnitude of the gains in these areas is not just a consequence of their earnings recovery (although that has helped) - it also reflects their rediscovered investibility. After a long period of neglect, these areas are attracting capital. That creates positive share-price momentum, enhancing their credentials and so creating a self-reinforcing trend. And as these cheap areas are rehabilitated, they are draining capital away from areas - safe havens and bond proxies - where valuations had risen to stratospheric levels in response to unsustainably low yields on government bonds.

Our fund is benefiting from that process. Not only does it have less exposure to the expensive, safe-haven areas of the market from which capital is ebbing away, it also has more exposure to ‘value’. Furthermore, our value stocks tend not to be the most distressed stocks that led the early stages of last year’s recovery, such as, for instance, Brazilian mining companies. Such investments tend not to be suitable investments for an income fund like ours, with our focus on sustainable cashflows. Instead, we often find value in less obvious places. These include mid caps, stocks that are cheap due to political uncertainty (the fund is overweight in Europe) along with idiosyncratic turnaround or recovery situations. As the rally in ‘value’ broadens out, these second-order beneficiaries are attracting capital.

So that the fund outperformed in January was not only due to its overweight position in basic material stocks (although our exposure there helped). It was also because holdings that were overlooked last year for not belonging to either of the extremes that led the market at different times (expensive, high-quality defensives in the first part of the year; cheap-but-troubled recovery stocks in the summer) began to receive more attention. Although we are not complacent, and acknowledge that the global economy will slow at some point, we believe the rehabilitation of cyclical areas of the market still has further to go. Moreover, we believe that our fund is well placed to perform as the rally in value continues to broaden.

04 November 2016

Jacob de Tusch-Lec: Macro matters …

As politics and central bankers’ actions continue to drive global markets, Jacob de Tusch-Lec, manager of the Artemis Global Income Fund, discusses some of the risks and opportunities.

Value of £1,000 invested at launch to 31 January 2017

Value of £1,000 invested at launch to 31 January 2017

Data from 19 July 2010. Source Lipper Limited,distribution units, bid to bid in sterling to 31 January 2017. All figures show total returns with dividends reinvested.

Asset allocation

Asset allocation

Source: Artemis as at 31 January 2017. Please note figures may not add up to 100% due to rounding.

Percentage growth (class I)

12 months to 31 December22.5%6.5%12.9%33.7%15.6%
12 months to 31 January32.9%-4.1%22.0%17.3%24.1%
Please remember that past performance is not a guide to the future. Source: Lipper Limited, distribution units, bid to bid in sterling. All figures show total returns with dividends reinvested.

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Jacob de Tusch-Lec: Macro matters …

Security Code

Risk warnings

THIS INFORMATION IS FOR PROFESSIONAL ADVISERS ONLY and should not be relied upon by retail investors.
The fund's annual management charge is taken from capital. The fund may invest in emerging markets. The fund may invest in the shares of small and medium sized companies.
Any research and analysis in this communication has been obtained by Artemis for its own use. Although this communication is based on sources of information that Artemis believes to be reliable, no guarantee is given as to its accuracy or completeness.
Any forward-looking statements are based on Artemis’ current expectations and projections and are subject to change without notice.
Issued by Artemis Fund Managers Ltd which is authorised and regulated by the Financial Conduct Authority.

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