Fixed Income  

Artemis raises £82m for Snowden's bond fund

Artemis raises £82m for Snowden's bond fund

Wealth managers and advisers committed almost £82m of assets to Stephen Snowden’s first bond fund at Artemis before its launch.

The new Artemis Corporate Bond fund is the second fixed income fund managed by the company’s recent recruits from rival Kames Capital.

It launched as a UK Oeic and Ucits vehicle, is available as a quarterly income or accumulation shares option with on-going charges of 0.40 per cent, and is the first fund managed by Mr Snowden, the boss of the fixed income team, since his move.

Artemis said a range of wealth managers and intermediaries had committed £81.6m to the fund when it launched earlier this week (October 30). 

According to Artemis at least 80 per cent of the fund will be invested in investment-grade corporate bonds — at least BBB+ rated — while the further 20 per cent can invest in the broader fixed income market.

Earlier this year the fund house launched the Artemis Global High Yield Bond fund (which has a credit rating of below BBB+ so offers higher returns), managed by David Ennett and Stephen Baines and supported by Mr Snowden (pictured) and Juan Valenzuela — all ex-Kames employees who moved to Artemis in December 2018.

Artemis’ head of distribution, Jasper Berens, said: “This new fund enhances further our capability in fixed income. 

“Stephen Snowden is an experienced and respected manager with a great team behind him. By broadening what we offer, we are confident that this new fund will help us continue to meet investors’ needs.”

Fixed income — and corporate bonds especially — have been in favour recently as uncertain markets continue to entice investors to assets perceived to be safer.

Morningstar data showed fixed income had the largest net inflows of all fund categories in August, a trend which the analyst firm said had been developing over the first six months of the year.

In September investors piled more than £400m into corporate bonds.

In general it is normal in uncertain markets for investors to turn to bonds, particularly as inflation expectations have been lower since the start of the year.

Bonds are helped by low inflation as the value of the fixed income from a bond is worth more if inflation is low.

Patrick Connolly, chartered financial planner at Chase de Vere, said he had invested with Mr Snowden in the past, describing him as a “good quality fixed interest manager” who had a “positive reputation” in the industry.

But he added: “The environment at Artemis is likely to be different to what he has experienced previously, so we will watch carefully to see how he settles in and how he performs before we consider investing.

“There are likely to be challenging times ahead for fixed interest managers generally, although this should give Snowden, and other managers, the opportunity to stand out from the crowd.”

Interest rates are expected to remain low or potentially see a cut in the near future which is typically bad news for fixed income funds.