Artemis unveils global income fund

Artemis has brought its Global Income  fund to market, with Jacob de Tusch-Lec as lead manager.

The fund was soft-launched six weeks ago with £15 million of investors’ money and will target an initial yield of just over 4%. De Tusch-Lec will be assisted by Artemis Income stalwart Adrian Frost,  who currently has some 15% of his £3 billion fund in overseas stocks.

Diversified portfolio

The fledgling portfolio includes a diversified blend of stocks, with core positions in an Israeli telecoms firm, Singapore Airlines, two of Brazil's largest utility firms and the UK's National Grid.

The biggest sector bets are to telecoms, healthcare and utilities firms, which de Tusch-Lec says have lagged their rival sectors in share price performance over the last two years despite remaining comparatively higher yielding.

The fund screens 5,000 global income stocks for a final 550, stocks which have more than a 3% yield and are growing their dividends  by at least 5% over the next 12 months.

De Tusch-Lec and Frost filter these down to a 60 to 70 stock portfolio, using the firm's cashflow screening system. 

‘Our biggest challenge is to find a diversified mix of high yielding companies that are not value traps and that can genuinely continue to grow their dividends, with strong free cash flow,' he said.

With UK dividends contributing just 10% of global income streams, de Tusch-Lec has just four domestic stocks in his 66-stock portfolio to prevent too much overlap with Adrian Frost and Adrian Gosden's Income fund.

Telecoms biggest bet

Currently telecoms provide more than 20% of the fund’s dividend yield, but de Tush-Lec says this will come down, while utilities and banks make up 13.6% and 10% respectively.

While the fund has stocks trading in 18 different currencies across 20 countries, there will be no hedging and Artemis will hold and pay the dividend payments in sterling.