Bestinvest says
This fund is essentially a bet on manager William Littlewood's macroeconomic judgement and stock selection skills – if successful, it should enable investors to participate in rising markets whilst offering a degree of capital protection in falling markets, an attractive combination. Littlewood ran one of the most successful UK equity income funds ever whilst at Jupiter in the 1990s, and has considerable motivation to succeed on this new fund due to a substantial personal investment. However, his experience in running a portfolio with such wide remit is limited to a private hedge fund, and this is reflected in the lower conviction rating (3*) that we have awarded. The fund has an extremely flexible mandate, including the ability to go short. However, this is not an absolute return fund and volatility is likely to be higher than for such funds.
The portfolio is primarily driven by asset allocation, which is dependent on the macroeconomic views of the fund manager and implied valuations for different asset classes.
The bulk of the fund (50-100%) will be in equities, corporate and government bonds, and commodities (via ETFs). The fund can also invest in cash (up to 50%), increasing the weighting when market conditions are less favourable. The manager can short equities and commodities, though the fund will never be net short of equities. He can be up to 100% short government bonds, using index futures and interest rate swaps.
Within the equity portion of the fund, the manager aims to add value through stock selection, principally carrying out his own research but also leveraging off Artemis colleagues. He focuses on market leaders, favouring companies with barriers to entry, sustainable franchises and pricing power. Where he has high conviction that a share will fall in value he will take a short position.
The fund can also take both long and short positions in currencies via forward foreign exchange contracts.