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Artemis rejects sector switch for Frost and Gosden’s star fund

Artemis rejects sector switch for Frost and Gosden’s star fund

The £798 million Artemis High Income fund, managed by the Citywire A-rated pair of Adrian Frost and Adrian Gosden, will not be switching its IMA category despite changes to the sector’s rules.

A recent overhaul of the IMA’s fixed income classifications will potentially put High Income in breach of its Sterling Strategic Bond sector’s requirements. Its constituents will no longer be able to treat hybrid assets – such as convertibles, preference shares and permanent interest bearing shares – as part of their minimum allocation of 80% to fixed interest securities. Funds have until 31 March to comply with the new regulations.

As at 31 December High Income held 16.5% of its assets in equities and 6.2% in convertibles and preference shares, pushing it below the 80% threshold.

Artemis confirmed for Wealth Manager that it had consequently considered moving High Income into a different sector.

A spokesperson said: ‘Artemis recognises the importance of the IMA sector classifications from both an adviser’s and consumer’s perspective. We recently concluded a review of the sector positioning of the Artemis High Income fund. This included, quite rightly, consultation with a number of unit-holders and advisers that had recommended the fund to their clients. In light of our findings there will be no change.’

Frost (pictured) and Gosden’s willingness to go beyond traditional bonds has propelled their fund to the top of the sector. Over the past three years, it is the absolute best in the 54-strong category with a return of 35.6% compared with a peer-group average 18.1%.

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Adrian Gosden
Adrian Gosden
1/54 in Bonds - Sterling Strategic Bond (Performance over 3 years) Average Total Return: 24.62%
Adrian Frost
Adrian Frost
49/83 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 36.61%
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