Change to investment objective and benchmark of Artemis US Absolute Return Fund

The investment objective and benchmark of the Artemis US Absolute Return Fund changed from LIBOR to SONIA on 1 January 2022.

Last updated 4 January 2022

The production of the London Interbank Offered Rates (LIBOR) ceased at the end of 2021. As a result, the investment objective and benchmark of the Artemis US Absolute Return Fund has changed from LIBOR to SONIA.

Effective from 1 January 2022, the fund’s target return changed from “in excess of 3 Month LIBOR, in calculating the performance fee payable to the manager” to “in excess of SONIA* + 0.1%, in calculating the performance fee payable to the manager”.

Previously, LIBOR was the ‘target benchmark’ that the fund aimed to outperform. Artemis is paid a performance fee if the fund’s performance exceeds the benchmark. In changing the fund’s target return, from 1 January 2022, Artemis will be paid a performance fee if the fund’s performance exceeds SONIA[1] + 0.1%.

*Sterling Overnight Index Average

Why has Artemis made these changes?

The production of LIBOR, along with that of similar Interbank Offered Rates (IBORs) used in other markets, ceased at the end of 2021.

In the UK, for the sterling market, SONIA has been widely identified as an appropriate replacement for LIBOR, and it will therefore form the basis of the fund’s new target benchmark.

SONIA is the risk-free rate for sterling markets, administered by the Bank of England. It is an index which is based on actual transactions and reflects the average of the interest rates that banks pay to borrow sterling overnight from other financial institutions and other institutional investors. It is already in widespread use in many areas of the financial markets.

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