Artemis confirms the change of name of its Artemis Target Return Bond Fund to Artemis Short-Duration Strategic Bond Fund
Our press enquiries team
Artemis has confirmed that its proposal to change the investment objective and name of its actively managed Artemis Target Return Bond Fund has been unanimously supported by investors.
The decision was ratified at an EGM of the fund’s investors yesterday (5th March). The fund will officially change its name, investment objective and benchmark from 18th March 2024. Of the investors who voted 100% supported the proposed changes.
The fund’s objective will be changed to “to generate a return that exceeds the Markit iBoxx 1-5 year £ Collateralised & Corporates Index, after fees, over rolling three-year periods, through a combination of income and capital growth, by investing in a portfolio of global debt and debt-related securities whilst maintaining an aggregate portfolio duration of below 4 years (duration is a measure of the sensitivity of the prices of bonds to changes in interest rates).”
The Fund’s original investment objective was: “To achieve a positive return of at least 2.5% above the Bank of England (BOE) base rate, after fees, on an annualised basis over rolling three-year periods.”
Stephen Snowden, Artemis’s Head of Fixed Income said: “With base rates where they are now to achieve a positive return of at least 2.5% above the Bank of England base rate as portfolio managers we would have needed to take a much higher level of risk, which would not be appropriate given why clients chose to invest in the fund. The fund was originally designed to be a low-risk strategy, with limited duration (i.e 4 years and under) which is the reason investors went into it in the first place.
“There is still strong demand for lower beta fixed income funds, and we believe that clients are now looking for more flexible short-duration exposure looking for opportunities across a range of fixed income assets.”
The target benchmark will change from the Bank of England base rate to ‘Markit iBoxx 1-5 year £ Collateralised & Corporates Index.’
The fund will also apply to enter the Investment Association £ Strategic Bond sector.
Greg Jones, head of distribution at Artemis, said: “We are very pleased that investors voted overwhelmingly in favour of the proposed changes which, we believe, more clearly represent the Fund’s investment strategy of allocating across fixed income sectors to deliver attractive risk adjusted returns for our clients.”
The fund was launched on 3rd December 2019, and is jointly managed by Stephen Snowden, Liam O’Donnell, and Jack Holmes.
Risks specific to Artemis Short-Duration Strategic Bond Fund
- Market volatility risk The value of the fund and any income from it can fall or rise because of movements in stockmarkets, currencies and interest rates, each of which can move irrationally and be affected unpredictably by diverse factors, including political and economic events.
- Currency risk The fund’s assets may be priced in currencies other than the fund base currency. Changes in currency exchange rates can therefore affect the fund's value.
- Bond liquidity risk The fund holds bonds which could prove difficult to sell. As a result, the fund may have to lower the selling price, sell other investments or forego more appealing investment opportunities.
- Higher-yielding bonds risk The fund may invest in higher-yielding bonds, which may increase the risk to capital. Investing in these types of assets (which are also known as sub-investment grade bonds) can produce a higher yield but also brings an increased risk of default, which would affect the capital value of the fund.
- Credit risk Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
- Leverage risk The fund may operate with a significant amount of leverage. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested. A leveraged portfolio may result in large fluctuations in its value and therefore entails a high degree of risk including the risk that losses may be substantial.
- Charges from capital risk Where charges are taken wholly or partly out of a fund's capital, distributable income may be increased at the expense of capital, which may constrain or erode capital growth.
- Emerging markets risk Compared to more established economies, investments in emerging markets may be subject to greater volatility due to differences in generally accepted accounting principles, less governed standards or from economic or political instability. Under certain market conditions assets may be difficult to sell.
- Income risk The payment of income and its level is not guaranteed.
- Counterparty risk Investments such as derivatives are made using financial contracts with third parties. Those third parties may fail to meet their obligations to the fund due to events beyond the fund's control. The fund's value could fall because of loss of monies owed by the counterparty and/or the cost of replacement financial contracts.
- Mortgage- or asset-backed securities risk Mortgage- or asset-backed securities may not receive in full the amounts owed to them by underlying borrowers.
