Artemis Corporate Bond 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
To generate a return that exceeds the iBoxx £ Collateralized & Corporates index, after fees, over rolling three-year periods, through a combination of income and capital growth.
Performance
Credit spreads (the difference in yield between corporate bonds and government bonds of the same maturity) tightened towards record levels through July and August before briefly slipping wider again1.
UK government bonds (gilts) have continued to underperform international peers, with uncertainty over government spending leading to higher borrowing costs2.
Central bank policy added to volatility. Although the Bank of England and the Federal Reserve cut interest rates, their policy paths are expected to diverge next year3.
The Artemis Corporate Bond Fund rose 1.0% over the quarter, compared with gains of 0.6% from its first benchmark, the iBoxx £ Collateralized & Corporate index4, and 0.8% from its second benchmark, the IA £ Corporate Bond sector average5.
| 2024 | 2023 | 2022 | 2021 | 2020 | |
| Artemis Corporate Bond Fund | 3.1% | 10.3% | -15.6% | -0.7% | 14.5% |
| iBoxx £ Collateralized & Corporate index | 1.7% | 9.9% | -19.4% | -3.0% | 8.8% |
| IA £ Corporate Bond NR | 2.7% | 9.3% | -16.4% | -1.9% | 7.8% |
Past performance is not a guide to the future.
Source: Lipper Limited, to 30 September 2025, class I accumulation units in GBP. All figures show total returns with 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.
Activity
Activity was steady across the quarter, as we purchased a mixture of new issue (primary) and existing (secondary) bonds.
In July, we added new issues from Next and Supermarket Income REIT (Real Estate Investment Trust), funded by sales of vehicle provider Motability and international distribution and sourcing company Bunzl.
We also re-entered Anchor Hanover, a housing association we had sold two years ago.
August was busier, as we bought new issues from Bank of Montreal, East Japan Railway, annuity and retirement services provider Athene, UBS and Anglian Water. These were largely paid for by sales of McDonald’s, luxury fashion group Kering, housing association Bromford and Next.
September saw further primary opportunities. We bought issues from London Stock Exchange, Transport for London, Athene and consumer goods company Reckitt Benckiser and insurers MassMutual and GA Global Funding, the latter of which we sold soon after for a profit.
To fund these, we took profits in asset manager M&G and environmental services provider PICORP after strong performance.
The fund maintained its short duration (lower sensitivity to interest rates).
Outlook
September was a settled month. Thirty-year gilt yields peaked at 5.7% (bond yields have an inverse relationship with prices) at the beginning of September, but ended the month at 5.5%6.
The chancellor’s speech at the Labour Party conference didn’t panic the markets, as she made the point there is nothing progressive about racking up more debt7.
We believe we have a fair chance of a more stable environment in the run-up to the Budget on 26 November.
Notes and references
1. Bloomberg to 30 September 2025
2. https://www.ft.com/content/f02cd127-be4a-4de3-a5ad-eb8c01dc7e71
3. https://www.ft.com/content/088d3368-bb8b-4ff3-9df7-a7680d4d81b2
4. A widely used indicator of the performance of sterling-denominated corporate investment grade bonds, in which the fund invests. It acts as a ‘target benchmark’ that the fund aims to outperform. Management of the fund is not restricted by this benchmark.
5. A group of asset managers’ funds that invest in similar asset types to the fund, collated by the Investment Association. 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.
6. https://ifs.org.uk/publications/budget-and-bond-markets-when-youre-hole-stop-digging
Risks specific to Artemis Corporate 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.
- 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.
- Derivatives risk The fund may invest in derivatives with the aim of profiting from falling (‘shorting’) as well as rising prices. Should the asset’s value vary in an unexpected way, the fund value could reduce.
- 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.
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.
