Update to the investment policy and name of Artemis Institutional Equity Income Fund

We updated the investment policy and strategy statement and name of Artemis Institutional Equity Income Fund (the “Fund”) on 8 March 2022 to include details of negative screening (exclusions) that will determine certain investments that cannot be included in the Fund. The Fund’s name also changed to ‘Artemis Income (Exclusions) Fund’.

Last updated 8 March 2022

We have updated the investment policy and strategy statement and name of Artemis Institutional Equity Income Fund (the “Fund”) to include details of negative screening (exclusions) that will determine certain investments that cannot be included in the Fund. The Fund’s name also changed, as detailed below.

  • Previous name: Artemis Institutional Equity Income Fund
  • New name: Artemis Income (Exclusions) Fund

The Fund’s investment policy statement was updated to reference negative screening, excluding companies determined by the manager to be significantly involved in certain business activities (tobacco, gambling, defence or fossil fuels). As a result of the exclusions, we anticipate that certain investments would have to be removed from the portfolio. We will use the proceeds from selling these investments to buy more of the Fund’s other investments (in the same proportions that it currently holds them).

We currently expect that applying the exclusions will cause a slight reduction of 20bps (0.2%) in the Fund’s estimated yield. This represents a yield on a 12-month prospective view of approximately 3.3% versus a current yield of 3.5%*. However, investors should note that estimates may change and are not guaranteed.

*Source Artemis as at 30 November 2021

The layout of the investment objective and policy of the Fund has changed and we have also made it clear over which time period the Fund aims to meet its objective. While there have been some changes to wording as a result, there has not been any change in the Fund’s investment process and the operation and/or manner in which the Fund is being managed following these changes, other than the introduction of the exclusions.

The unitholder notice available below shows the updated investment policy statement and has further details about the changes.

Why has Artemis made these changes?

There has been an increasing focus on ESG issues from investors over recent years and Artemis has received growing indications of investor demand for an exclusions approach in the Fund. As a result, the changes to the Fund reflect these preferences whilst retaining the same investment objective and an anticipated yield which is only slightly lower than it is currently. Investors will have certainty over which business activities are excluded and not considered for investment, whilst having the assurance that, other than the exclusions, there has been no change to the Fund’s investment process that has been in place since its launch in March 2005.

The new name of the Fund, Artemis Income (Exclusions) Fund, represents that the Fund will exclude certain sectors from its investable universe. The name change is also intended to make clear to investors that the Fund’s portfolio is different to that of the Artemis Income Fund, which is managed by the same investment team to the same investment strategy, but which has no such exclusions. The term “Institutional” has been removed from the name of the Fund to reflect that the typical investor profile will be amended to state that the Fund will also be marketable to certain distributors, intermediaries and/or other professional investors approved by the Manager and who have a prior written agreement with the Manager, alongside institutional investors.

How are investors impacted by this change?

As explained above, there will be no change to the way in which the Fund is managed, other than the introduction of exclusions as part of the investment process.

Artemis Investment Management LLP, the Fund’s Investment Advisor, will bear the cost of the expenses incurred in making these updates, with the exception of any trading-related transaction costs associated with the disposal and purchase of the Fund’s investments which will be borne by the Fund itself. It is expected that three investments will be sold, representing 7.3% of the Fund’s portfolio (as of 16 December 2021). The cash proceeds from the sale of these investments will be used to purchase additional holdings of the Fund’s remaining investments (in the same proportions that it currently holds them). The estimated one-off trading costs of this activity, including trading commission, taxes and market impact, will be approximately 0.054%, based on the total Fund assets. Investors should note that estimates may change and are not guaranteed.

Further information

For further information, please contact our Client Services team:

  • 0800 092 2051 (outside the UK +44 1268 445 401) between 8am and 6pm (Monday to Friday)
  • [email protected]

Related documents

List of affected unit classes

  • Class I accumulation GBP GB00B06J1S53
  • Class I distribution GBP GB00B06T3N48