Artemis Income Fund
Q3 2025 update
Source for all information: Artemis as at 29 September 2025, unless otherwise stated.
CAPITAL AT RISK. All financial investments involve taking risk and the value of your investment may go down as well as up. This means your investment is not guaranteed and you may not get back as much as you put in. Any income from the investment is also likely to vary and cannot be guaranteed.
This is a marketing communication. Before making any final investment decisions, and to understand the investment risks involved, refer to the fund prospectus (or in the case of investment trusts, Investor Disclosure Document and Articles of Association), available in English, and KIID/KID, available in English and in your local language depending on local country registration, available in the literature library.
Fund objective
The fund’s objective is to grow both income and capital over a five-year period.
Performance
The fund rose by 2.5% during the quarter, compared with 6.9% from its first benchmark, the FTSE All-Share index1, and 2.8% from its second benchmark, the Investment Association UK Equity Income2 sector average.
It was a challenging quarter for the portfolio, in which our performance was not dissimilar from its income sector but lagged well behind the UK stockmarket. We would attribute our recent underperformance to two broad themes: a sell-off in some data and analytics companies that investors are concerned could be disrupted by artificial intelligence (AI); and strong performance from large positions in the index that we do not own.
| 2024 | 2023 | 2022 | 2021 | 2020 | |
| Artemis Income I Dist GBP | 15.1% | 9.8% | 0.4% | 16.2% | -6.7% |
| FTSE All-Share TR | 9.5% | 7.9% | 0.3% | 18.3% | -9.8% |
| IA UK Equity Income average | 8.7% | 7.0% | -2.0% | 18.4% | -10.8% |
Past performance is not a guide to the future.
Source: Lipper Limited/Artemis to 30 September 2025 for class I distribution units, GBP. All figures show total returns with dividends and/or income reinvested, net of all charges. Performance does not take account of any costs incurred when investors buy or sell the fund. Returns may vary as a result of currency fluctuations if the investor's currency is different to that of the class. This class may have charges or a hedging approach different from those in the IA sector benchmark.
Positives
Informa, which operates face-to-face events, saw its shares hit a new all-time high in early October3. We believe the core business is well insulated from the risk of AI disruption and this technology could even enhance the data created by Informa’s events. In addition, the global events industry looks set to grow, in our view.
Dr. Martens’ new management team’s efforts to turn the business around helped drive the footwear manufacturer’s strong performance in the quarter4. We believe its focus on cost control should support profit margins in the future.
Aviva’s shares have continued to grow higher5 which we believe is down to the multi-year simplification of its portfolio and a significant investment into technology.
Negatives
Shares in London Stock Exchange Group (LSEG) and professional services software providers Wolters Kluwer and Sage all fell in the third quarter. In our view, this is because investors have become concerned about competition from AI. However, we believe our holdings will not only survive these challenges but will likely benefit. We acknowledge that this cannot be taken for granted, though, and we are conducting in-depth analysis to ascertain how AI is affecting these companies’ market share.
Another reason for the portfolio’s underperformance against the benchmark is that Rolls-Royce and HSBC, which we don’t own, delivered strong returns.
Activity
We took some profits in RELX and 3i Group following strong performance.
We added to BP, real estate investment trust SEGRO, Dr. Martens and property developer Berkeley Group.
Outlook
We will continue to assess the extent to which AI presents a threat or an opportunity to our holdings; this is not confined to the obvious (data providers, for example) and it may affect companies where investors least expect it.
Although we are disappointed by the fund’s short-term performance, we understand the reasons behind it. In our view, it does not necessitate any change in our investment approach. We are testing and re-testing investment theses and attempting to assess where we could be wrong, while making sure the portfolio contains a diversified collection of companies generating strong cashflows (the money left over after all liabilities have been paid).
We believe the income paid out by the fund will continue to build up steadily over the longer term.
Notes and references
1. FTSE All-Share Index TR: A widely-used indicator of the performance of the UK stockmarket, in which the fund invests. It acts as a ‘comparator benchmark’ against which the fund’s performance can be compared. Management of the fund is not restricted by this benchmark.
2. This is the second of two comparator benchmarks against which the fund’s performance can be compared. It is a group of other asset managers’ funds that invest in shares of UK companies. Management of the fund is not restricted by this benchmark.
3. Lipper Limited as at 30 September 2025
4. Bloomberg to 30 September 2025
5. Bloomberg to 30 September 2025
Risks specific to Artemis Income 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.
- 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.
- Income risk The payment of income and its level is not guaranteed.
Important information
The intention of Artemis’ ‘investment insights’ articles is to present objective news, information, data and guidance on finance topics drawn from a diverse collection of sources. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by Artemis or any third-party. Potential investors should consider the need for independent financial advice. Any research or analysis has been procured by Artemis for its own use and may be acted on in that connection. The contents of articles are based on sources of information believed to be reliable; however, save to the extent required by applicable law or regulations, no guarantee, warranty or representation is given as to its accuracy or completeness. Any forward-looking statements are based on Artemis’ current opinions, expectations and projections. Articles are provided to you only incidentally, and any opinions expressed are subject to change without notice. The source for all data is Artemis, unless stated otherwise. The value of an investment, and any income from it, can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested.
