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Private investors

Artemis Global Income Fund

All data as at 28 February 2017 except where specified
  • Summary
  • About the fund
  • Performance (class R)
  • Performance (class I)
  • Composition
  • Key facts
  • Investment insights
  • Literature
  • How to invest


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 R)

As at noon, 30 March 2017
Bid price (acc units)124.46p
Bid price (dist units)95.88p
Offer price (acc units)131.40p
Offer price (dist units)101.22p
Historic yield (acc units)2.85%
Historic yield (dist units)2.92%

Investment information
(class R)

Minimum lump sum investment£1,000
Ongoing charge (acc units)1.56%
Ongoing charge (dist units)1.56%

The initial charge is currently waived. The ongoing charge includes the annual management charge of 1.5% 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 powerful rally in cyclical ‘value’ stocks and financials seen in the second half of last year - and which carried over into January - paused for breath in February. Although global equity indices crept higher, the gains tended to be led by more defensive areas. In this, the equity market seemed to be following the more cautious mood evident in the bond market. Having risen sharply since the summer, yields on safe-haven government bonds, including 10-year US Treasuries, fell slightly on the month. Yields on two-year German government bunds, meanwhile, hit new lows. On first view, that seems counter-intuitive: economic data from around the world remains strong and there are signs of inflation after a decade’s absence. In Europe, for instance, the composite PMI hit its highest level since 2011 and inflation in Germany picked up. Yet despite this, bond investors aren’t fully buying into the vision of a world of stronger, more consistent economic growth and higher inflation.

The unpredictability of President Trump’s administration caused political risk premia to increase.

How to account for this fall in yields? More importantly, should equity investors worry? All the structural factors that support bond prices, such as the regulations enacted in the wake of the financial crisis obliging financial institutions to buy them - and the fear of investing in volatile assets - remain. At the same time, there is a sense that the balance of political risks has changed. The unpredictability of President Trump’s administration caused political risk premia to increase. A similar dynamic was also at work in Europe. Although the prospect of Marine Le Pen becoming the next president of France (and endangering the future of the eurozone) remains somewhat remote, the struggles of her opponents have added to that risk, even if only at the margin. So we don’t necessarily interpret lower bond yields as a sign of a slowdown in the economy. Instead we see them as a function of a shortage of ‘safe’ assets. German government bunds, for instance, are not traded on valuation but being held as insurance against negative ‘tail risk’ outcomes in Europe.

Paradoxically, it could also be the case that strong data on the US economy is contributing to fears of a slowdown. Might the US economy be in danger of overheating when (or if) Trump’s fiscal stimulus is applied? Strong data releases on the US economy - the number of Americans applying for first-time unemployment benefits recently touched a 44-year low - meant the market has increasingly come to accept not only that the Federal Reserve (Fed) would likely increase base rates in March but that another two increases are possible this year. Has the risk of the Fed making a policy mistake - encouraging it to act too aggressively to pre-empt inflation - increased? While a 50 basis point increase still seems rather unlikely, it is no longer beyond the realms of possibility. The mood has changed.

From the fund’s perspective, that economically sensitive ‘value’ stocks fell slightly out favour meant that it lagged the market’s rise in February, snapping a strong run of outperformance reaching back to last summer. On a stock level, however, news from many of our holdings was excellent. For example, mining companies tended to report sharp increases in earnings. BHP Billiton, one of our top-10 holdings, reported a 65% increase in underlying earnings and, signalling management’s confidence, increased its dividend. Yet the market greeted this news - and news like it - with little more than a shrug. In part, this may be a case of reality belatedly catching up with the transformation in expectations that took place in the second half of last year. At the same time, there does seem to be a feeling in some quarters that this might be ‘as good as it gets’ for the global economy. Lower bond yields are helping to reinforce that notion and making some investors pause before committing more capital to more cyclical areas.

Our response has been measured. We acknowledge that the synchronised expansion across all regions of the global economy won’t last forever. We also see a risk the Fed moves too fast on rates - and we admit we have no idea what President Trump might do next. A technical term for being afraid of politicians’ actions is ‘policy risk’. We now have monetary policy risk (that the Fed tightens too much or too quickly), fiscal policy risk (that Trump’s fiscal irresponsibility leads to higher bond yields) and geopolitical risks (as Trump changes US military imperatives, dangerous situations are emerging in Asia and in the Middle East). At the same time, data shows strong growth continuing while news from our (still somewhat cheap) cyclical stocks remains extremely positive. So we are seeking to manage the balance of risks in the portfolio. It seems wise not to be positioned too narrowly for any one particular outcome. At the time of writing, some of the fund’s largest holdings are stocks geared into stronger global growth such as General Motors, Western Digital and BHP Billiton. Offsetting that, however, we do own a number of less economically sensitive European infrastructure assets such as Euskaltel, INWIT, Rai Way and EI Towers. Meanwhile, after a strong run higher in late 2016 we have lowered the fund’s exposure to financials a little. So while we acknowledge that political and economic conditions remain uncertain, we think the fund - with its below-market p/e and above-average dividend yield - is still well-placed to prosper.

24 March 2017

Global equities: Will the run go on?

The global economy continues to strengthen, and with it corporate profits. However, politics and monetary policy are potential risks. Jacob de Tusch-Lec talks about how he is positioning the Artemis Global Income Fund in this environment.

Value of £1,000 invested at launch to 28 February 2017

Value of £1,000 invested at launch to 28 February 2017

Data from 19 July 2010. Source Lipper Limited,distribution units, bid to bid in sterling to 28 February 2017. All figures show total returns with dividends reinvested.

Asset allocation

Asset allocation

Source: Artemis as at 28 February 2017. Please note figures may not add up to 100% due to rounding.

Percentage growth (class R)

20162015201420132012
12 months to 31 December21.6%5.7%12.1%32.7%14.7%
20172016201520142013
12 months to 28 February29.9%-3.1%18.2%14.8%25.2%
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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Global equities: Will the run go on?





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About the fund

The Artemis Global Income Fund aims to offer investors a good, steady and rising income, as well as prospects for capital gain, by investing in dividend-paying companies worldwide.

  • Invests in unrecognised opportunities: thorough company research results in a portfolio that favours large rather than extra-large companies, giving it greater potential for yield and capital growth.
  • Focused approach: the portfolio of around 90 stocks worldwide offers a focused approach – given the investment universe of 5,000 stocks. Importantly, the manager looks for companies that can keep growing their dividends over time.
  • Flexibility: the manager adapts to changing economic conditions by shifting investments between high-yielding quality, cyclical and value stocks.
  • Complements UK equity-income holdings – the fund is designed to complement rather than replicate investors’ existing UK equity-income holdings
  • An extension of Artemis’ successful equity-income process: the fund focuses on companies generating positive cashflows, an approach employed to great success in the Artemis Income Fund.

Reasons to consider

The fund may be suitable for investors looking for:

  • steady income along with the potential for capital growth
  • exposure to the growth potential of companies from around the world
  • the same tried and tested approach to investing for income used in the Artemis Income Fund
  • a fund that complements, rather than replicates, existing holdings in a UK equity income fund

Introducing the fund

Jacob de Tusch-Lec introduces the Artemis Global Income Fund and outlines how he makes investment decisions.

Risk considerations

Before making an investment, investors should consider the level of risk they’re comfortable taking with their money.

  • This fund invests primarily in large, stable companies. The manager carefully scrutinises companies before investing, looking for those cashflows to support dividend payments and the ability to generate good capital returns over the longer term.
  • The fund also has the flexibility to invest in smaller and more recently established companies that the manager believes have strong growth potential. These types of businesses can be more vulnerable to financial or operational failure.
  • Investors should be aware that the usual risks of investing in stocks and shares apply – companies and stockmarkets can go through periods of turbulence and the value of your investment can go up and down.
  • In addition, a proportion of the fund’s investments may be in emerging markets, which can be more volatile than mature markets.
  • This fund’s ‘SRRI’ risk rating, a measure of how volatile the fund’s performance has been over time, is currently 5, in a range of 1 (lower risk) to 7 (higher risk).

More detailed information on fund risks is included in the ‘risk warnings’ section below.

Risk warnings

To ensure you understand whether this fund is suitable for you, please read the Key Investor Information Document, which is available, along with the fund’s Prospectus, from artemis.co.uk.

The value of any investment, and any income from it, can rise and fall with movements in stockmarkets, currencies and interest rates. These can move irrationally and can be affected unpredictably by diverse factors, including political and economic events. This could mean that you won’t get back the amount you originally invested.

The fund’s past performance should not be considered a guide to future returns.

Because one of the key objectives of the fund is to provide income, the annual management charge is taken from capital rather than income. This can reduce the potential for capital growth.

The fund may invest in emerging markets, which can involve greater risk than investing in developed markets. In particular, more volatility (sharper rises and falls in unit prices) can be expected.

The fund may invest in the shares of small and medium-sized companies. Shares in smaller companies carry more risk than larger, more established companies because they are often more volatile and, under some circumstances, harder to sell. In addition, information for reliably determining the value of smaller companies – and the risks that owning them entails – can be harder to come by.

The historic yield reflects distribution payments declared by the fund over the previous year as a percentage of its mid-market unit price. It does not include any preliminary charge. Investors may be subject to tax on the distribution payments that they receive.

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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