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Invesco or Artemis: Which global income fund should you choose?

10 March 2015

In the next article of the series, FE Trustnet looks at two global equity income managers betting big on Europe and seeing the benefit.

By Daniel Lanyon,

Reporter, FE Trustnet

Going global for income has been something of a discussion point of late among investors. Putting cash into funds that have a mandate to invest in a broad universe of equities has a strong appeal as the search for yield becomes more competitive. As a result the IA Global Equity Income sector has seen rapid inflows in its three year lifespan.

However, the apparent truth of actively-managed global funds is that few have demonstrated an ability to beat the index over the longer term.

Just 15 per cent of funds across the IA Global and IA Global Equity Income sectors have beaten the MSCI All Countries index over 10 years, with similarly lacklustre numbers over shorter periods.

It is easy to see why, as when a manager does show some consistent outperformance they start to attract a lot of attention and, of course, cash. This in turn can eventually make it more difficult to access some parts of the market that drove performance.

The £1.8bn Artemis Global Income fund has become a darling of the IA Global Equity Income sector thanks to its manager Jacob de Tusch-Lec’s strong performance and decent yield since he launched the fund in 2010.

Another member of the sector, the £800m Invesco Perpetual Global Equity Income fund, has seen a similarly strong performance since its manager Nick Mustoe took up the reins at the end of 2012 and both funds have had a sector and index-beating start to 2015 thanks to their enthusiasm for European stocks.

However, should income investors buy both of these two funds, pick one manager or avoid them entirely? Both funds have attracted consistent inflows in recent years but Artemis Global Income has been the clear winner.

According to FE Analytics, since 2010 de Tusch-Lec has returned 105.14 per cent compared to a gain in the MSCI All Countries index of 68.99 per cent and IA Global Equity Income sector average of 65.22 per cent, giving the manager the best returns of his peer group.

Since Mustoe took over Invesco Perpetual Global Equity Income in December 2012, de Tusch-Lec has also been the best performer but Mustoe has been close behind in the league tables although almost 18 percentage points behind in terms of total return.

Performance of fund, sector and index since 19 December 2012

Source: FE Analytics 

Both managers are bullish on Europe’s beleaguered stocks as well as having overweights to financials.


Artemis Global Income has around 35 per cent in Europe while Invesco Perpetual Global Equity Income is 36.7 per cent exposed. This overweight has helped both funds outperform in 2015 as Europe has been one of the best equity markets over this period.

Performance of funds, indices and sector in 2015

Source: FE Analytics

Artemis Global Income has an unconstrained approach with de Tusch-Lec looking for both income and growth prospects from around the world, according to Meera Hearnden, senior investment manager at Parmenion, who says that Invesco Perpetual Global Equity Income garners ideas in a more untested manner.

However she says in terms of the types of companies they look for, both funds are similar as they do not focus on the highest yielding stocks in the market.

She says instead they opt for the quality of the income generated by companies and the prospects for delivering consistent dividend growth.

“The end result is similar to a certain degree, but how they arrive at their stock decisions is different. Invesco Perpetual Global Equity Income fund draws on the resources of Invesco Perpetual’s other regional teams. It then populates the fund with the best ideas from these teams. This process has been in place since the start of 2012 and is therefore too early to tell if it will prove successful longer term.”

The fund is also more concentrated with around 50 stocks compared to the Artemis Global Income fund’s 80 or so stocks, Hearnden says.

“The Artemis Global Income fund is more focused on the individual manager picking his best ideas from a variety of sources. It is a small team and very much focused on the stock picking skills of the lead manager,” she added.

“Cash flows are Artemis Global Income’s primary focus and this is important for an income fund as dividends are paid out of cash, not earnings. That said, the fund is managed with a total return mind-set and volatility may at times be higher than its peers, but those investors that can take a longer time horizon would see that this volatility has been amply rewarded by exceptional performance.”


Hawksmoor’s Richard Scott has owned both funds in the PFS Hawksmoor Distribution and Vanbrugh funds but has sold out of both, in the belief that they are too volatile. He says while they will behave similarly investors should be cognisant of one key difference.

“To my mind there is a big difference between the two funds because the Invesco Perpetual fund is less controlled by one investment manager than the Artemis fund where you are very much buying Jacob [de Tusch-Lec],” he said.

“[De Tusch-Lec] has input from other members of the team but Nick Mustoe effectively subcontracts parts of his portfolio when he has identified the particular geographic, and to less extent, sectors that he wants exposure to.”

He adds that both funds have performed well but one cannot easily replace the other.

Scott rates the Invesco Perpetual fund and Mustoe highly but says having invested in the fund at launch in 2010 – before Mustoe took over – he has found other opportunities in more newly launched global funds such as Guinness Global Equity Income.

“The types of risk profile you are getting by buying the Invesco Perpetual fund is very similar to what you would be getting from Artemis Global Income but with a different management style,” he noted.

In terms of income earned, over the comparable period, de Tusch-Lec has returned more cash to investors in the form of income. On a £10,000 initial investment in both funds from the beginning of Mustoe’s tenure, the Artemis fund returned £1,047 and Mustoe’s £706.68.

Income earned since 19 December 2012

Source: FE Analytics

Artemis Global Income is cheaper with a clean ongoing charges figure of 0.84 per cent compared to Invesco Perpetual Global Equity Income’s 0.92 per cent.

The previous article in this series looked at the case for holding two FE Alpha Managers renowned for their long-term stock picking – Terry Smith and Nick Train.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.