Artemis High Income Fund I Inc

Mixed Asset 41-60% Equity

Rated Fund 2016-19. Assesses a company’s bonds and shares

Artemis High Income was highly commended in the Larger Sterling Bond Fund category of Money Observer’s 2015 awards. It yields 5.6% and offers the choice of a quarterly or monthly income.

Although it invests primarily in bonds, which must make up at least 80% of the portfolio to qualify for inclusion in a bond sector, it also invests in shares to give it greater growth potential. Alex Ralph, a bond specialist, has been lead manager since 2015. On the equity allocation, she is supported by the Artemis income team.

The team carry out their own research, analysing companies from both an equity and a bond perspective. Rather than relying on credit rating agencies, they make their own assessments of each bond, focusing on the issuing company’s free cashflow and its ability to service its debt and refinance itself. For equities, they analyse how companies are investing for the future, paying particular attention to the outlook for dividends.

This dual perspective gives the team a more complete understanding of a company’s capital structure than is available to a bond or equity specialist alone. It allows them to assess whether a company’s shares represent a more attractive claim on its future cashflows than its bonds, or vice versa.

One of Ralph’s aims is to find bonds that have been mispriced due to a lack of broker coverage or thin trading.

Although the team is small compared to some peers, the combination of experienced managers, an approach that is apt for the fund’s income objective and below-average fees of 0.69% drive Morningstar’s faith – and ours – in the fund’s long-term outperformance potential.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Artemis High Income Fund I Inc
Manager
Artemis Fund Managers Limited
Type
Unit Trust
ISIN
GB00B2PLJN71
Sector
£ Strategic Bond
Launched
07/03/2008
OCF
0.72 %
Risk Rating
3
3 Year Sharpe
1.10
3 Year Alpha
3.18
Yield
5.5 %
Benchmark
IA £ Strategic Bond
The objective of the Fund is to achieve a higher than average initial yield, combined with the prospect of rising income and some capital growth over the long-term.
Holding %
United States Treasury Notes 3.12% 5.43 %
United States Treasury Notes 2.62% 4.20 %
Phoenix Group Holdings 6.62% 1.49 %
Electricite de France SA 6% 1.32 %
Argentum Netherlands B.V. 5.75% 1.27 %
Burford Capital Finance LLC 6.12% 1.22 %
RBS Capital Trust II 6.42% 1.20 %
Credit Suisse Group AG 6.25% 1.17 %
America Movil S.A.B. de C.V. 6.38% 1.15 %
Orange S.A. 5.88% 1.12 %
Region %
United Kingdom 51.34 %
Eurozone 36.43 %
Europe - ex Euro 9.30 %
Sector %
Consumer Defensive 22.58 %
Consumer Cyclical 18.81 %
Industrials 15.28 %
Energy 13.50 %
Financial Services 9.49 %
Communication Services 7.97 %
Healthcare 6.58 %
Name
Artemis Fund Managers Limited
Address
SW1A 1LD, London, United Kingdom
UCITS
Yes
Legal Structure
Unit Trust

Managers

Chris Ellis
Joined 03/31/2014
Alex Ralph
Joined 02/01/2014

Alex runs the Artemis Strategic Bond Fund alongside James Foster and is the manager of the Artemis High Income Fund. She graduated in 2000 from the London School of Economics and joined Royal Sun Alliance, as a credit analyst. In 2002, Alex moved into managing retail bond funds with ISIS, initially specialising in the high-yield market but later adding duration and investment-grade positioning. Alex joined Artemis in April 2005 and is a CFA charterholder.

Data provided by Morningstar.

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