Artemis Corporate Bond Fund
Q4 2025 update
Source for all information: Artemis as at 31 December 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.
Review
October and November saw a sharp rally in gilts (UK government bonds)1, particularly around the Budget period. Our small underweight (lower-than-average position compared with the benchmark) to duration (sensitivity to interest rates) was enough to make us underperform. The fund’s exposure to corporate bonds was more supportive.
Performance
The Artemis Corporate Bond Fund rose 2.6% over the quarter, compared with gains of 2.9% from its first benchmark, the iBoxx £ Collateralized & Corporate index2, and 2.5% from its second benchmark, the IA £ Corporate Bond sector average3.
For full five-year discrete performance, please see the table below. Please remember that past performance is not a guide to the future.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
| Artemis Corporate Bond Fund | 7.5% | 3.1% | 10.3% | -15.6% | -0.7% |
| iBoxx £ Collateralized & Corporate index | 7.2% | 1.7% | 9.9% | -19.4% | -3.0% |
| IA £ Corporate Bond NR | 7.0% | 2.7% | 9.3% | -16.4% | -1.9% |
Past performance is not a guide to the future.
Source: Lipper Limited, to 31 December 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
In October, the fund bought new bond issues in Commerzbank, Northern Powergrid, Desjardins, Northumbrian Water and Associated British Ports. Alongside this, we carried out a number of same-name relative value switches between two bonds of Barclays, HSBC, Heathrow, EDF and Associated British Ports.
With gilts rallying sharply, we reduced our duration underweight over the month. Bond yields have an inverse relationship with prices and 10-year yields fell from around 4.7% to 4.4%.4
We also added some longer-dated National Grid and GSK Holdings. To fund our purchases, we took profits from a number of strong performers including Realty Income, Great Portland Estates, Walmart and Abertis.
November reversed what had been a quiet year for supply. We bought new issues in NatWest, Gatwick Airport, Tritax Big Box REIT, National Air Traffic Services, Bupa, Platform Housing Group and Paradigm Housing, as well as Anglian Water and Osprey. These purchases were funded by sales of Santander, Caterpillar, Land Securities, Sovereign Network Group and selected Anglian Water bonds.
We also completed a final rotation out of Ørsted. We have never been enthusiastic about the renewable energy supplier’s business model5, but the bonds became cheap enough earlier in the year to justify investment. We took the decision to exit the holding at a modest profit.
December was a quieter month. Credit spreads (the difference in yields between corporate bonds and US government bonds of the same maturity) ground slightly tighter and gilt yields were largely unchanged6.
We participated in a new bond issue from ABN Amro. We carried out two relative value switches in the housing association sector, moving from Blend into Aster Housing and Paradigm into Platform Housing Group. We also carried out a relative value trade between Heathrow bonds and switched from Eastern Power Networks into London Power Networks (same parent, two regional electricity operating companies).
We entered 2026 marginally underweight duration compared with the iBoxx £ Collateralized & Corporate index benchmark.
Outlook
In 2025, 10-year gilt yields traded in a relatively narrow channel, finishing down from 4.57% to 4.48%7.
Perhaps the press was being a touch hysterical when it warned of a jump in borrowing costs8.
The fund does start 2026 short duration versus the benchmark as we believe a government that struggles to contain spending puts pressure on gilts. But the Bank of England is poised to cut interest rates in 20269, possibly by more than expected.
We don’t want to imply we are giving the gilt market a clean bill of health – we just want to put things into perspective.
Notes and references
1. https://www.ii.co.uk/analysis-commentary/relief-rally-bonds-trouble-could-be-brewing-ii537394
2. 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.
3. 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.
4. https://uk.finance.yahoo.com/news/cunning-plan-gamble-didnt-pay-175400465.html
5. https://orsted.com/en/about-us/strategy-and-business-model
6. Bloomberg
9. https://www.bankofengland.co.uk/explainers/current-interest-rate
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.
