BrilliantWithMoney

This is a second in a series of ‘focus on’ articles, each looking at a specific investment fund within our top sixty. We take an in-depth look at each fund to give you an insight into what it takes to make the grade.

Each ‘focus on’ examines the objective of the fund, an analysis of recent performance, the manager, charges and other factors.

Within this ‘focus on’ we take a closer look at the Artemis Income fund. This fund sits within the UK Equities asset class.

Fund objective

This fund aims to achieve a rising income combined with capital growth by investing in equities, mainly in the United Kingdom. The portfolio of investments is actively managed and includes exposure to ordinary company shares, preference shares, convertibles and fixed interest securities.

The fund managers are not restricted in respect of choice of investments either by company size or industry, or in terms of the geographical split of the portfolio.

Track record

This is a second quartile fund over one year and a first quartile fund over three and five years. For the year to date it has returned -4.19% compared to a sector average return of -6.01%. This places it 52nd out of 144 funds in the sector.

This fund has a strong and consistent long-term performance record, with above average performance in every discrete annual period since 2004, with the exception of 05/06 when it delivered third quartile returns.

The managers

This fund is managed by ‘Adrian & Adrian’ – Adrian Gosden and Adrian Frost.

Gosden has managed the fund for nearly six years after joining the Artemis equity team in 2003. He graduated with a first from Oxford before working with Andersen Consulting as a strategic consultant specialising in the telecoms sector. In addition to this fund, he also helps Adrian Frost run the High Income Fund.

Adrian Frost has been running the fund for over seven years. He is a Cambridge graduate (the week after the boat race must be interesting in that office!) and was previously Head of UK Equities at Deutsche Asset Management.

Style

This is a fund where the managers focus more on the individual companies and less on the themes that are driving the market. The managers look for companies with a strong cash flow and solid balance sheets.

As an Artemis fund, it follows the Artemis investment philosophy of ‘growth at a reasonable price’, looking for stocks that are cheap compared to their growth rate. Yield is a key factor in the selection of stocks as well as considering how sustainable that yield might be.

Charges

The fund has a 5.25% initial charge and a 1.5% annual management charge, with a total expense ratio (TER) of 1.54%.

Conclusion

This is a strong fund within the UK equities asset class and particularly suited to investors looking for an alternative to the big Invesco Perpetual Income and High Income funds.

It offers consistent performance, active management and a distinct investment style from two solid fund managers.

Martin Bamford is site editor of BrilliantWithMoney and a Chartered Financial Planner at Informed Choice.

The small but important print: This article was produced for information only and should not be considered a recommendation to buy, sell or hold a particular investment fund. Seek advice from a professional independent financial adviser before making a decision. The performance data in this article was provided by Financial Express and was correct as at 30th August 2009.