fund

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Artemis Corporate Bond I GBP

Sterling bond fund with an active approach and an experienced manager.

  • 106.93p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 112.69p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.25%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.39%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 2.70%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 20 January 2022, fund commentary last updated 28 September 2021

The objective of the fund is to generate a return greater than the iBoxx £ Collateralized & Corporates Index, after fees, over rolling three-year periods through a combination of income and capital growth. The fund is exposed to mainly UK investment-grade corporate bonds including those issued by household names such as Toby Carvery owner Mitchells & Butlers. It also holds Government bonds, high-yield bonds, non-rated bonds and cash. Managers Stephen Snowden and Grace Le take both an active, top down approach – looking at factors such as the economic cycle, and inflation – as well as a bottom-up approach.

Fund summary

Sector £ Corporate Bond
Structure OEIC
Launched October, 2019
Size £781m
Yield 2.70%
Charging basis Capital
Dividends paid 31 Jan 30 Apr, 31 Jul, 31 Oct

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.25%
Ongoing charges figure 0.39%

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Investment process

The management team believes the corporate bond market is inefficient and through its active approach is there to be beaten. The team has three key strands to its investment process. They consider the fundamentals such as the economic cycle and inflation/interest rates outlook, the valuations determining whether the fundamentals are accurately priced, and the technical including how the fund can take advantage of liquidity opportunities. Much of this discussion takes place at a weekly meeting with a strategy meeting held once every month where the portfolio is reviewed. The fund has an 80% minimum exposure to investment grade corporate bonds, with the remaining 20% being allocated to Government bonds, high yield bonds, hard currency emerging markets and non-rated. It has a concentrated portfolio of 108 holdings at present and takes a long-term strategic thematic approach with banks, including HSBC, utilities, insurance and consumer services having the top weightings. Although predominantly exposed to UK corporates it can buy overseas bonds and hedge the currency risk back. The fund’s duration is 7 years but it also seeks out short-term tactical opportunities such as adding to UK banks around the 2019 UK General Election as spreads in that sector widened. The managers are also prepared to shun entire sectors such as tobacco where they have concerns over business risks.

The fund benefits from having a very straightforward approach and a clear objective. It is nimble and active, allowing it to beat peers by moving positioning during volatile periods. This includes adding to cyclical Covid-related sectors such as pubs and airports in summer 2020. Manager Stephen Snowden’s approach has been helped by refusing to assume a return to a ‘normal’ interest rate environment since the Global Financial Crisis. This has led to him holding longer-term positions than his peers and benefitting from growth in their capital value. Since its launch in Q4 2019 the fund has generated some of the best returns in its sector. Snowden has been one of the most successful managers in this sector since he moved to fixed income research in 1998. He shares decision making responsibilities with colleague of five years Grace Le. This fund offers access to a high quality management team at an attractive cost.

Manager research

Average monthly relative returns

  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.00%
  • 20/21 0.40%
  • 21/22 0.23%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career -0.02%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 75.80%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Stephen Snowden

Snowden leads Artemis’s Edinburgh-based fixed income team. He started working in the industry in 1994 in equity research at Aegon before moving to fixed Income research in 1998. He started managing the Aegon Sterling Corporate Bond Fund in 2000 then moved to Old Mutual, where he managed their Corporate Bond Fund from 2004-2011 before returning to Aegon. He left in November 2018 to join Artemis. Snowden holds a first class masters degree in Finance from Queens University, Belfast. Grace Le has worked with Snowden since 2015. Before joining Kames, she worked at PwC from 2012 where she became a Chartered Accountant.

Track record

Stephen Snowden has 12.7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.02%. During the worst period of relative performance (from May 2000 - January 2009) there was a decline of 30% relative to the index. The worst absolute loss has been 40%.

Periods of worst performance

Absolute -40.00% (February 2007 - March 2009)
Relative -30.00% (May 2000 - January 2009)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 29 October 2021

1.6182% Freshwater Finance Cls`A`Gtd Ast Bkd Fxd Nts 20/04/35 Gbp
1.611% Cooperatieve Rabobank Ua 6.567% Subord Nts Perp Gbp50000
1.5343% Dignity Finance 4.6956% Nts 31/12/49 Gbp1000 B
1.4373% Hsbc Hldgs 6% Subord Nts 29/03/40 Gbp50000
1.3822% Citigroup Inc 4.5% Bds 3/03/31 Gbp1000
1.3357%3 i Group Plc 3.75% Nts 05/06/40 Gbp100000
1.3228% Logicor 2019 1 Uk 1.875% Bds 17/11/26 Gbp100000
1.3199% Mitchells & Butlers Plc 5.574% Bds 15/12/28 Gbp1000`A2`
1.3055% Lloyds Banking Group Plc 2.707% Dtd Sub Rst Nt 03/12/35 Gbp100000
1.285% Rac Bond Co 4.87% Bds 06/05/46 Gbp100000
Source: Trustnet

Sector breakdown

Financials 46.00%
Others 34.00%
Mortgage & Secured Bonds 20.00%

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Key Investor Information - Accumulation

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