Investors have approved Artemis’s decision to rename the £238m Artemis Target Return Bond fund to the Artemis Short-Duration Strategic Bond fund.
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.”
