Artemis Corporate Bond
This fund invests in investment grade corporate bonds, with some ability to allocate across the wider fixed income market. Stephen takes a long-term strategic and thematic view, but will also take advantage of short-term opportunities when they present themselves. Stephen and the team combine strong analysis of both the wider macroeconomic picture, and close examination of the fundamentals of corporate bonds, to produce a portfolio designed to weather any economic climate.
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Stephen began his career at Aegon Asset Management (now Kames Capital) in 1994, after earning a BSc and MSc in Finance from Queen’s University Belfast. By 2000, he was managing Kames’ Sterling Corporate Bond Fund. In 2004, he moved to Old Mutual Asset Managers to run their corporate bond fund, before returning to Kames in 2011 as co-head of fixed income, co-managing several funds including the Investment Grade Bond and Absolute Return Bond funds. In 2019, Stephen joined Artemis from Kames Capital, bringing four other fixed interest team members with him.
Grace is a fund manager with the Artemis fixed income team, having joined in December 2019 from Aegon Asset Management. At Aegon, she co-managed several investment grade bond funds, including the Aegon Investment Grade Bond Fund and the Aegon Investment Grade Global Bond Fund, and was involved in credit selection for multi-asset funds such as the Aegon Diversified Monthly Income Fund. Grace began her career at PwC in 2012, where she qualified as a chartered accountant. She holds a degree in Mathematics from Imperial College London and is both an ACA and CFA charterholder.
Stephen began his career at Aegon Asset Management (now Kames Capital) in 1994, after earning a BSc and MSc in Finance from Queen’s University Belfast. By 2000, he was managing Kames’ Sterling Corporate Bond Fund. In 2004, he moved to Old Mutual Asset Managers to run their corporate bond fund, before returning to Kames in 2011 as co-head of fixed income, co-managing several funds including the Investment Grade Bond and Absolute Return Bond funds. In 2019, Stephen joined Artemis from Kames Capital, bringing four other fixed interest team members with him.
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Grace is a fund manager with the Artemis fixed income team, having joined in December 2019 from Aegon Asset Management. At Aegon, she co-managed several investment grade bond funds, including the Aegon Investment Grade Bond Fund and the Aegon Investment Grade Global Bond Fund, and was involved in credit selection for multi-asset funds such as the Aegon Diversified Monthly Income Fund. Grace began her career at PwC in 2012, where she qualified as a chartered accountant. She holds a degree in Mathematics from Imperial College London and is both an ACA and CFA charterholder.
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Company Description
UK-based Artemis was founded in 1997 as a limited liability partnership. Affiliated Managers Group (AMG) and the management team at Artemis own 100% of the equity of the business. This is a financial partnership; AMG takes a share of the revenues produced by Artemis but does not get involved in the day-to-day running of the business. A recipient of the Elite Provider for Equities rating in 2015, 2016, 2017, 2018 and 2020, Artemis has retained its manager-centric, innovative and supportive culture, which has helped it to attract and retain talented investors.
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Talking Factsheet
Quote from the Fund Manager
We believe that corporate bond markets are inefficient and can be beaten. Inefficient markets create opportunities for active managers like my team to exploit.
Stephen Snowden
Lead Manager
Investment process
Stephen looks at the fundamentals of a company, taking into account where we are in the economic cycle, as well as the outlook for inflation and monetary and fiscal policies. He then analyses corporate profitability and management strategy, assessing whether it’s beneficial for bondholders. He looks at whether there are any factors hindering or improving the company’s competitive positioning and identifies any risks. Valuation then comes into play. How does the bond’s yield compare with others issued by the same company or those issued by its competitors?
Technical factors are then examined. For example, has a company previously over-borrowed, which has driven yields higher, and it’s now trying to repair its balance sheet? This should cause the bonds to recover as debt is reduced. Conversely, a company might be in strong financial shape but undertaking an ambitious merger and acquisition programme, which would increase its debt substantially.
Stephen also analyses whether a company or a sector is suffering from negative sentiment, which has suppressed prices further than the situation warrants, and assesses any structural changes that may materially impact certain sectors. He aims for diversification to avoid any unintended industry or name concentration.
Stephen and the team focus on UK, US and European issues, with at least 80% of their assets in sterling or hedged back to sterling.
Risk
Artemis Corporate Bond fund is a reasonably diversified portfolio of 75-150 holdings. It will be invested largely across investment grade corporate bonds (80%), although Stephen can also invest in high yield, hard currency emerging market debt, government bonds and non-rated credit, depending on his view of the economic environment.
Stephen and his team undertake a stringent credit assessment of each company. They canvas a wide range of opinions and information sources to test their assumptions. Stephen is always mindful that growing shareholder value can come at the expense of bondholders, so the motives of the management team are carefully scrutinised.
ESG
ESG - Integrated
Stephen acknowledges that ESG factors can be a material driver of company fundamentals and, as such, incorporates analysis of these factors into the process. This work is conducted by Artemis, rather than bought in from a third party, and used in conjunction with the fundamental, technical and economic analysis already performed on a stock. Stephen believes this work is based around qualitative factors rather than providing a score, so he needs to integrate them within the stock analysis to ensure they are best captured in the overall analysis of a security. ESG factors are considered at both an individual stock and a portfolio-wide level to ensure no unintended risks are systematically taken.
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