Artemis Income Fund
Fund Manager's Comment
Data as at 29 May 2009
The rally continued through May in much the same vein: that is, cyclical and re-financing companies led the way and the more defensive, often higher yielding stocks were left in the doldrums. Each day the reprieved and rejuvenated broking community is full of the joys of green shoots and recovery - which in truth involves buying companies that have pulled back from the abyss and/or have the possibility of a strong recovery in profits at some stage. More often than not, as a result of massively dilutive equity issues, these profits and dividends (assuming there are any) will be shared among many more shareholders than was previously anticipated. Our country, its companies and consumers have as much debt today as we did 18 months ago. So if you believe that the de-leveraging needs to happen, it remains work in progress.
Our stance has been to use this period of marked underperformance in what we consider quality stocks to add to our positions from cash. We took some profits in some of our more recovery-orientated shares and re-invested the proceeds plus cash into names such as Compass Group, Diageo, Imperial Tobacco (a re-purchase) and Vodafone. On the sale side, we disposed of our holding in Bunzl. We understand the enthusiasm for recovery and think that this could continue. But the market is a carnivore and requires regular portions of raw meat. Ultimately today’s improving trend is tomorrow’s tough comparator.
Awards
Income PDFKey Facts
| IMA Sector | UK Equity Income |
|---|---|
| Sedol Number | 0657246 |
| Fund Size (offer basis) | £2413.6m |
| Historic yield | 5.4% |
| Unit offer price (distribution units) | 140.23p |
| Unit bid price (distribution units) | 131.60p |
| Unit offer price (accumulation units) | 181.91p |
| Unit bid price (accumulation units) | 170.72p |
| Valuation (UK business days) | 12:00 |
| Minimum lump sum investment | £1,000 |
|---|---|
| Minimum monthly investment | £50 |
| Launch | 6 June 2000 |
| Launch price | 100p |
| Preliminary charge | 5.25% |
| Annual Management Fee | 1.5% |
| Unit type | Distribution & Accumulation |
| Dividend pay dates | 31 December, 30 June |
| Total Expense Ratio | 1.54% |
Data as at 29 May 2009.
Performance
| Since Launch* | 5 Years | 3 Years | 1 Year | 6 Months | |
|---|---|---|---|---|---|
| Income Fund (TR)† | 93.2 | 33.4 | -7.9 | -16.5 | 4.4 |
| FTSE All-Share (TR)† | -2.9 | 21.9 | -13.7 | -23.7 | 8.0 |
| FTSE 100 (TR)† | -8.7 | 19.8 | -13.4 | -23.7 | 5.5 |
| Sector Average | 9.2 | 13.3 | -19.3 | -23.0 | 6.8 |
| Position in Sector | 1 | 2 | 9 | 7 | 56 |
| Funds in Sector | 48 | 60 | 73 | 78 | 78 |
| Quartile | 1 | 1 | 1 | 1 | 3 |
Please remember that past performance is not a guide to the future.
* Data from 6 June 2000. Source: Lipper Limited, bid to bid in sterling with net income reinvested to 29 May 2009. All figures show total returns. †Percentage Growth. Sector is IMA UK Equity Income.
Percentage Growth
Artemis Income Fund Fund 12 Months to 31 March 2009
| 2009 | 2008 | 2007 | 2006 | 2005 |
|---|---|---|---|---|
| -22.2 | -12.6 | 13.6 | 26.9 | 19.7 |
Further Discrete Performance periods.
Source: Lipper Limited, bid to bid in sterling with net income reinvested. All figures show total returns.
Value of £1,000 invested at Launch to 29 May 2009.
Data from 6 June 2000. Source Lipper Limited, bid to bid in sterling with net income reinvested to 29 May 2009.
Asset Allocation*
*Without cash. Source: Internal
Top Ten Holdings*
| Royal Dutch Shell 'B' | 6.0% |
|---|---|
| BP | 5.3% |
| GlaxoSmithKline | 5.1% |
| Vodafone | 4.7% |
| AstraZeneca | 4.5% |
| HSBC | 4.2% |
| Centrica | 4.0% |
| Unilever | 3.5% |
| Scottish & Southern Energy | 3.2% |
| RSA Insurance | 3.0% |
* Without cash.
Source: Internal.
Market Sector Split*
| Oil & Gas | 17.0% |
|---|---|
| Utilities | 14.7% |
| Healthcare | 10.0% |
| Telecommunications | 9.2% |
| Industrial Goods & Services | 8.1% |
| Travel & Leisure | 6.3% |
| Banks | 5.6% |
| Media | 5.3% |
| Food & Beverage | 4.8% |
| Other | 19.0% |
* Without cash.
Source: Internal.
% Variance†*
| Centrica | 3.1% |
|---|---|
| RSA Insurance | 2.7% |
| Koninklijke KPN | 2.5% |
| Royal Dutch Shell 'B' | 2.4% |
| Scottish & Southern Energy | 2.3% |
| Total | 2.0% |
| Unilever | 2.0% |
| RWE | 1.7% |
| Vivendi | 1.7% |
| Cobham | 1.6% |
† Positive variance between stock % held in the Fund versus FTSE All-Share.
Risk Warning
Issued by Artemis Fund Managers Ltd which is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk), 25 The North Colonnade, Canary Wharf, London E14 5HS and is a member of the IMA. Artemis Fund Managers Ltd is a member of the Artemis Marketing Group. We only market our own unit trusts. The value of an investment, and any income from it, can fall as well as rise as result of market and currency fluctuations and you may not get back the amount originally invested.
In the interest of providing a level of income consistent with the aims of the Artemis Income Fund the periodic management charges are taken from capital. The effect of this will be to constrain ultimate capital growth over time and may lead to capital erosion.
All data is sourced internally unless otherwise stated.
The historic yield reflects distributions declared over the past twelve months as a percentage of the mid-market unit price, as at the date shown. It does not include any preliminary charge and investors may be subject to tax on their distributions. The Fund’s annual Management Charge is charged to capital. This has the effect of increasing the distribution(s) for the year by 1.5% and constraining the fund’s capital performance to an equivalent extent.
