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.
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
Source: Hargreaves Lansdown and Lipper IM
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
Source: Lipper IM* to 01/02/2016.
|Annual percentage growth|
| Feb 11 -
| Feb 12 -
| Feb 13 -
| Feb 14 -
| Feb 15 -
|Artemis Global Income||0.22%||23.05%||16.85%||19.5%||-2.97%|
|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.
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