newly-appointed adrian frost to manage artemis income fund with a more flexible mandate
Adrian Frost is looking at using bonds and overseas equities within the Artemis Income Fund when he takes it over in January.
Frost joins Artemis this week, as highlighted in the last issue of Investment Week, as a partner and shareholder in the business.
He is taking over the fund from Derek Stuart and due to its relatively small size, at £43m, Frost intends to run it on a more flexible basis than was possible with the £810m Deutsche UK Equity Income unit trust he previously managed.
Frost said if he felt a corporate bond was mispriced against its equity he would consider investing in it, something he did not do at Deutsche.
In addition, he said he was looking forward to working with Philip Wolstencroft, Artemis' European fund manager and using his pan-European research.
Frost said this would give him the ability, should he decide he liked a sector such as oils but felt UK stocks were expensive on a global basis, to buy into a cheaper but similar quality European alternative. The Artemis Income Fund has around 50 stocks in its portfolio and Frost intends to retain this number of holdings. While at Deutsche, Frost ran the UK Equity Income fund with some 90 stocks but said this was a function of the size of the portfolio.
He believes the smaller Artemis fund will also allow him to invest further down the market cap scale than he was able to do at Deutsche.
Overall, he sees the Artemis investment style fits well with the way he ran money while at Deutsche.
Frost said: 'It is neither growth nor value and it focuses on stocks. If you are either growth or value then you have halved your chance of finding anything interesting.
'My previous responsibilities, by their nature, did not allow me to devote as much time to managing money as I would have wished.
'Artemis offers me an entrepreneurial environment where I can devote my energies to pursuing what I enjoy most, namely managing money.'
At a time when world markets are struggling, Frost predicts a growing popularity for income funds.
'They will continue to look very attractive if interest rates stay at, or close to, historically low levels,' he said. 'If you believe long term returns from equity markets will be lower than they have been historically, sub 10%, then you will want a fund with a bit more coupon.
'Getting a couple of extra percentage points in yield in a raging bull market is not seen as that exciting but when returns are a lot lower it has far greater significance.'
Stuart will now focus solely on the Artemis UK Special Situations fund. Frost has plans to further develop the Artemis income range and will be principal speaker at the Artemis Isa roadshows being held around the country from mid-January 2002.
Moves to overweight equities and fixed income
The Big Interview: Focus on ethical investment
View from the front row
'No control or oversight'
359 new customers in 2018