Last updated 30 April 2020
As part of its market study into the asset management industry, the Financial Conduct Authority (FCA) found that the investment objectives and policies of investment funds could be difficult for investors to understand. The FCA suggested they could be made clearer, for example by improving their layout, removing any jargon and clarifying important points.
So we have therefore updated the investment objectives and policies of: (i) the Artemis retail unit trusts; and (ii) the sub-funds of Artemis Investment Funds ICVC (together the “Funds”), with the exception of the Artemis US Absolute Return Fund; please see the relevant section about this fund below. The full list of funds in question is set below:
- Artemis Capital Fund*
- Artemis European Growth Fund
- Artemis European Opportunities Fund
- Artemis Global Growth Fund
- Artemis Global Income Fund
- Artemis High Income Fund*
- Artemis Income Fund
- Artemis Monthly Distribution Fund
- Artemis Strategic Bond Fund
- Artemis UK Select Fund
- Artemis UK Smaller Companies Fund
- Artemis UK Special Situations Fund
- Artemis Global Emerging Markets Fund*
- Artemis Global Equity Income Fund
- Artemis Pan-European Absolute Return Fund
- Artemis US Absolute Return Fund**
- Artemis US Extended Alpha Fund
- Artemis US Select Fund
- Artemis US Smaller Companies Fund
*Significant changes explained below
**Artemis US Absolute Return Fund's investment objective and policy are not changing; see below
What has changed?
The layout of the investment objectives and policies of the funds has changed. While there have been some changes to wording as a result, we have not made any changes to the way in which any of the funds are managed. You can see the new format for all investment objectives and policies in the prospectuses in the links below.
For all of the funds, we have made it clear over which time period the fund aims to meet its objective; providing additional information about the fund manager’s strategy; and detailing the percentage of a fund’s assets which can be held in different asset types or geographic regions.
We have made more significant changes to the way in which we describe the investment objectives and policies of the following three funds:
Artemis High Income Fund
The previous objective referred to “obtaining a higher than average initial yield”. This is open to different interpretation and is difficult to measure. The newly worded objective is “to provide a combination of a high level of income and capital growth, before fees, over a rolling five-year period.” The manager defines a high level of income as equal to, or in excess of, the average yield of those funds making up the Investment Association Strategic Bond sector, in which the Fund sits.
Artemis Global Emerging Markets Fund
The previous objective referred to the fund seeking a combination of income and capital growth. Although this fund does generate some income, we believe that it is more appropriate to emphasise the potential for capital growth. The newly-worded objective is “to grow capital over a five-year period.”
Artemis Capital Fund
The previous investment policy referred specifically to the fund having an emphasis on investing in companies which are listed in the FTSE 100. While the fund has historically held a substantial portion of its assets in the shares of companies which are listed in the FTSE 100, the fund manager believes that the relative importance of this has declined over time. As a result, although the fund will still maintain an emphasis on investing in the United Kingdom, the investment policy wording has been changed so that there is no specific proportion of the fund’s assets which has to be invested in companies which are listed in the FTSE 100. The fund’s new policy will be to invest at least 80% of its assets in the United Kingdom.
Why is Artemis making these changes?
We always aim to communicate clearly with you. An important part of that is describing how we manage your investment in the funds as transparently as we can. The changes are intended to help you understand more easily how each of the funds is managed.
When will the changes take place?
The changes came into effect on 30 April 2020.
How will you be impacted by these changes?
As explained above, there should be no impact on you as a result of these changes. However, if you are not happy with the changes you can redeem your investment in the funds.
For further information, please contact our Client Services team on +44 1268 445 401 between 8am and 6pm (Monday to Friday) or by e-mail at [email protected].
- Letter to shareholders
- Prospectus detailing the new objectives and policy wording for the ICVCs
- Prospectus detailing the new objectives and policy wording for the Unit Trusts
- Further information on changes to the ICVC prospectus
Important notice for investors in the Artemis US Absolute Return Fund (the “Fund”)
We wrote to you on 17 February 2020 to let you know that the investment objective and policy of the Fund would be updated with effect from 30 April 2020. The update was intended to provide further clarity on the Fund’s objective and policy, so that you could understand more easily how the Fund is managed. This included improving the layout of the material which illustrates the Fund’s positioning and giving more precise details on the percentage of the Fund’s assets which can be held in different types of asset or geographic regions. We did not intend any resulting change to the way in which the Fund is managed.
Since we wrote to you, we have reviewed the way in which we proposed to clarify the Fund’s objective. We have concluded that the revised version might not make it entirely clear how the Fund can achieve its objective in different market conditions. This has become more apparent because of the volatile market conditions so far in 2020. So we have decided not to implement the proposed update at this time. We will contact you again once we have decided how the objective and policy should be updated; and once we have completed with the Financial Conduct Authority (FCA) the process for making any amendments.
There will be no change to the way in which the Fund is managed in the meantime, and you do not need to take any action as a result of our decision to delay and review further the update to this Fund.