Foster takes on Artemis bond fund

As the fund will be registered under new Ucits III regulations, it has the extra flexibility of being able to invest in futures, options and cash when the manager deems appropriate. However, it is not anticipated these added powers will be employed at launch.

The fund, which will be placed into the Investment Management Association’s UK Other Bond sector, will carry an initial charge of 5.25% and an annual management fee of 1%. All of the charges will come out of the income generated by the fund rather than the capital.

Foster (pictured), who joined from Isis Asset Management (now F&C Asset Management) last month, will be assisted by Alex Ralph, his former colleague at the group. The two worked together on what are now called the F&C Strategic Bond fund and the F&C Extra Income fund. Ralph became deputy manager of the Strategic Bond fund and Extra Income Bond funds when Foster failed to return from a 10-week sabbatical last October.

Ralph left F&C at the end of January this year. While Foster will be the senior manager at Artemis, it is reported that the two will take joint decisions on which bonds go into the portfolio.

It is expected that at launch on June 1, 30% of the portfolio’s assets will be invested in government bonds, 30% will be held in investment-grade and about 20-30% will go into high-yield. However, this is not fixed and could change at any time before launch.

Indeed, while the fund has an initial target yield of between 5% and 5.5%, its aim will not be to maximise its yield at all costs.

l Fund manager’s diary, page 30