In this new edition of Fund in Five, we talk to Stephen Snowden, head of fixed income at Artemis, and co-fund manager of the Artemis Corporate Bond Fund, to look at the portfolio from five angles and understand why this is a good time to invest in the asset class.

Papadopoulos gained seven years of experience at Bank of America, where he became the high yield analyst vice president after beginning as a global research summer analyst in 2017.

Holmes said: “We were very pleased to attract someone of Haris’ quality to work alongside us. We believe the high yield market continues to offer investors very attractive opportunities from a bottom-up, credit-by-credit perspective.”

See also: Artemis bolsters global income team with analyst hire

Artemis now operates as a fixed income team of eight, led by Stephen Snowden. The group has two high yield strategies which began in 2019, including the Artemis Funds (Lux) Global High Yield fund and Artemis Funds (Lux) Short-Dated Global High Yield Bond fund.

The short-dated bond fund has returned 17.8% in the past three years, relative to a sector average 8.9%.

“Jack and I have long believed the best approach in the high yield markets comes from strong credit analysis away from the bigger issues that make up the largest proportion of indices and benchmark-focused funds,” Ennett said.

“High yield continues to offer real diversification and alpha generation opportunities in a period when we are seeing many Western central banks cutting rates.”

In this Fund in Five, Stephen Snowden, fund manager and head of fixed income, discusses the rationale for the name change and looks at the portfolio from five angles to explain its role as low-beta cash alternative.

At an extraordinary general meeting yesterday (5 March), it was decided the fund would also change its investment objective and benchmark, with investors voting 100% in favour of the alterations.

The decision was made as the fund has been unable to achieve its current stated targets, given higher interest rates, without exposing investors to more risk than they had originally signed up for.

Therefore, from 18 March, the fund’s investment objective will no longer be to achieve “a positive return of at least 2.5% above the Bank of England (BOE) base rate, after fees, on an annualised basis over rolling three-year periods”.

Instead, it will be: “To generate a return that exceeds the Markit iBoxx 1-5 year £ Collateralised & Corporates index, after fees, over rolling three-year periods, through a combination of income and capital growth, by investing in a portfolio of global debt and debt-related securities while maintaining an aggregate portfolio duration of below four years.”

As such, it will apply to enter the IA Sterling Strategic Bond sector, moving from the IA Targeted Absolute Return sector.

Co-manager Stephen Snowden (pictured), who has been at the fund’s helm since its launch at the end of 2019, said: “The fund was originally designed to be a low-risk strategy, with limited duration of four years and under. With base rates where they are now, to achieve a positive return of at least 2.5% above the Bank of England base rate we would need to take a much higher level of risk, which is not appropriate given why clients chose to invest in the fund. 

“We believe that clients are now looking for more flexible short-duration exposure and opportunities across a range of fixed income assets.”

Greg Jones, head of distribution at Artemis, said: “We are very pleased that investors voted overwhelmingly in favour of the proposed changes which, we believe, more clearly represent the fund’s investment strategy of allocating across fixed income sectors to deliver attractive risk adjusted returns for our clients.”

Abrdn’s Liam O’Donnell (pictured) has joined the Artemis fixed income team, with responsibility for rates and macro.

He will take over management of the Strategic Bond fund, being appointed alongside investment managers Grace Le and David Ennett.

Meanwhile, O’Donnell has also been named co-manager of the Artemis Target Return Bond fund, which Valenzuela co-managed with Stephen Snowden. Jack Holmes has also been named as a new manager on the strategy.

Artemis said it has also made two analyst hires over the summer and is actively recruiting for a senior high-yield analyst to bolster the team. 

Valenzuela joined Artemis in February 2019, before being appointed manager of the strategy in November 2021 alongside Young. Artemis said he leaves to join a hedge fund in the new year.

Young joined Artemis in 2021 from Janus Henderson, where she held positions as co-manager of the Janus Henderson Horizon Strategic Bond and Preference & Bond funds. 

Paras Anand, Artemis’ CIO, said: “We believe Liam O’Donnell’s appointment, along with the extra analyst hires, helps broaden and deepen the investment expertise we can deploy to manage fixed income assets.

“Many of our clients share Artemis’ long-term commitment to fixed income as a core, long-term element in portfolios. Liam’s appointment further strengthens our capabilities and over time will help enable us to enhance our offering in this space.’

Stephen Snowden added: ’We’d like to thank Juan and Rebecca for all the contributions they have made over their tenure to the firm and our clients. We wish them both well for the future.’

The Artemis Strategic Bond fund has returned 24.9% over the last decade, ahead of the IA Sterling Strategic Bond sector average of 22.1%, according to data from FE Fundinfo.