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Artemis Global Income Fund research update

Heather Ferguson | Wed 24 February 2016

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

Ordinarily, investors might refer back to history for guidance on what might happen today. Yet, we are in uncharted waters and history offers no useful parallels. Interest rates have never been this low, debt has never been this high, and governments have printed an unprecedented amount of money.

In light of this, Jacob de Tusch-Lec, manager of the Artemis Global Income Fund, has decided to ensure the portfolio is well balanced, with few sector or regional biases, and concentrated on companies whose success is independent from the health of the global economy.

This includes DFDS Shipping and Ports, which proved resilient and cash generative during the financial crisis. A number of their competitors were less hardy and went bust, which left DFDS in a stronger position. Most of its routes come out of the UK where demand is strong and more recently it has benefitted from a lower oil price. Elsewhere, Bezeq, the Israeli telecoms company, is also largely unaffected by wider economic issues and should benefit from consolidation within the sector.

Income

Interest rates are at record lows and in this environment investors have chased equities which offer an attractive, sustainable income. Traditionally, oil and commodity companies have paid attractive dividends but it is likely dividends in these sectors will be cut over coming months. There is therefore a shrinking pool of companies available to income hunters and demand is high, which has pushed prices ever higher.

In this environment, the manager has focused on companies he feels have the potential to progressively increase cash returns to their shareholders over time. In some cases this has meant sacrificing a higher yield today in exchange for the prospect of a higher income in the future. Examples include Roche, GE and Apple which all have relatively high dividend growth rates but yield less than the portfolio overall.

Jacob de Tusch-Lec has grown the income paid in four of the five calendar years since the fund's launch. The fund currently yields 3.66% (variable and not guaranteed).

Annual income on a £10,000 investment

Artemis Global Income Fund Bar chart

Source: Hargreaves Lansdown and Lipper IM

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Our view on this fund

We are increasingly impressed with Jacob de Tusch-Lec's strong performance and he is beginning to build a long term track record having managed the fund for over five years. Since launch, the fund has risen 94.4% compared with 64.1% for the FTSE All World Index and 58.2%* for the average fund in the sector, although past performance is not a guide to future returns.

While this performance is encouraging, we would like to monitor the fund over a longer period before considering it for inclusion on the Wealth 150 list of our favourite funds across the major sectors.

Performance of the Artemis Global Income Fund since launch

Artemis Global Income chart

Source: Lipper IM* to 01/02/2016.

Annual percentage growth
Feb 11 -
Feb 12
Feb 12 -
Feb 13
Feb 13 -
Feb 14
Feb 14 -
Feb 15
Feb 15 -
Feb 16
Artemis Global Income 0.22% 23.05% 16.85% 19.5% -2.97%
FTSE World -1.54% 15.94% 7.8% 19.5% -1.9%
IA Global Equity Income 1.23% 15.53% 7.71% 12.47% -2.15%

Past performance is not a guide to future returns. Source: Lipper IM to 01/02/2016.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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