Artemis fund ratings reinstated after Gosden exit

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Square Mile has reinstated its ratings on the Artemis Income and High Income funds following the high profile departure of Adrian Gosden in June.

The funds now carry the AA and A ratings that they held respectively before Gosden’s departure.

However, both funds have suffered outflows since the fund manager exit, with the Artemis Income fund losing £369.1m in the month Gosden left, according to Morningstar data. It suffered outflows of £133.9m in July, but saw inflows in August, albeit only £5.9m.

The Jupiter Merlin Income fund sold its entire £238m holding in the fund the month Gosden left.

The Artemis High Income fund lost £4.5m in June and £7.1m in July, but in August suffered £32.1m of outflows.

Square Mile senior investment research analyst John Monaghan says he had been reassured by a meeting with the remaining managers, Adrian Frost and Nick Shenton, that the funds had not been adversely impacted.

“Both managers are fully committed to the ongoing success of the Income franchise at Artemis, in particular Mr Frost who has committed to at least another three years as head of the team.

“The team will be strengthened over time but the managers are taking careful steps to ensure the most appropriate candidate is selected.”

Square Mile has also reinstated its rating for the Kames High Yield Bond fund, which had a suspension on its AA rating following the departure of Claire McGuckin.

There were also concerns that co-manager Phil Milburn, who was on a period of leave due to illness, would not return to the fund. However, he returned in August.

“We are fully satisfied that he is in good health and well able to manage this fund, although he is currently in a period of phased return,” head of research Victoria Hasler says.

The fund also suffered outflows in June, the month McGuckin’s departure was announced, suffering £207.1m of outflows. This moderated to £5m of outflows in July and £11m in August.

Morningstar has dropped its ratings on both funds following the fund manager departures, with the Kames fund reducing from a silver rating to neutral, while the Artemis fund has moved from gold to bronze.

Morningstar was not willing to comment on when it would next assess each fund’s rating.