This month’s fund in focus is the Artemis Short Dated High Yield Bond Fund. This fund invests in high-yield bonds that are close to maturity. The fund aims to beat its benchmark, the Secured Overnight Financing Rate, after costs and charges, over rolling three-year periods, through income and capital growth. The funds target duration is 0-2 years. The distribution yield on this fund is currently a little over 5%, with the fund paying out quarterly distributions.
Points to Note:
- A majority of the larger companies on the portfolio are BB rated. These are companies that typically have plenty of resources on hand to repay maturities with cash and a low likelihood of them going bust, resulting in lower volatility.
- The fund actively incorporates ESG to identify opportunities and threats which other similar funds may miss and as a result this fund is classified as an Article 8 Fund.
- We believe it is quite an attractive time to invest in bonds as at the minute they are trading at 80% par, with some bond funds trading at even less.
- December capped off a year in which valuations dramatically reset within the global high yield market, creating potentially the most appealing environment for investment in the high yield market over the last decade.
Artemis Short Dated High Yield Bond Fund – 6 month Performance vs. Bloomberg Global Treasury Hedge
*Source Financial Express, www.artemisfunds.com, Financial Times
As always, you should only consider the investment views contained in this Market Insights update in the context of your own attitude to risk and how such choices might impact your Asset Allocation model. Should you wish to discuss your investment portfolio, please contact Harvest Financial Services on 01 2375500 or email justask@harvestfinancial.ie.