Artemis manager Simon backs the elephants that CAN dance
THE EU referendum result has had little effect on the portfolio of investment trust Mid Wynd International. The £110million fund, run by asset manager Artemis, is invested worldwide and has little exposure to the UK stock market.
‘It has very much been business as usual,’ says Simon Edelsten, one of three managers that has overseen the trust since Artemis, based in St James’s, Central London, snatched the right to manage it from Edinburgh-based Baillie Gifford in early 2014.
‘We only have two holdings in the UK – National Grid and Prudential – and they are companies that derive revenues from around the globe. National Grid has big business interests in the US, while Prudential is generating a third of its income from Asia.
‘Brexit isn’t a big issue for us and the way we approach managing the trust’s portfolio. At the edges, a little fine tuning here and there – a slight reduction in our European holdings, a corresponding increase in Asia – but that’s about it.’
Mid Wynd is conservatively managed by Edelsten, Alex Illingworth and Rosanna Burcheri. Though the trust’s aim is to generate both income and capital growth, capital preservation is never far from the managers’ minds. ‘We don’t want our investors to panic,’ says Edelsten. ‘We try to keep up with markets when they are doing well, while protecting investors as much as possible on the downside.’
They do this by searching out quality companies wherever they can find them. No more than 60 are held at any time and the maximum individual holding is usually limited to about 2.5 per cent of the fund, to make sure the trust does not become unbalanced.
Nearly 60 per cent of the trust is invested in the US, but Edelsten says this is not because they like America in particular. He says it results from the fact that it is home to some of the world’s best growth firms. Among its top holdings are a host of familiar names, for example Google owner Alphabet, Time Warner, MasterCard and Walt Disney.
Though Alphabet is a mature business, Edelsten says it’s hugely profitable, increasing revenues annually by between 15 and 20 per cent. ‘They say elephants can’t dance,’ he adds, ‘but this one does.’
Since taking over at the helm of the trust in May 2014, the trio have earned their stripes. They have delivered total returns of 46 per cent, while the average global investment trust has returned 22 per cent and the FTSE All-Share and World indices have made 8 and 35 per cent respectively.
They have modelled their approach to Mid Wynd on Artemis Global Select, a fund they have run since its launch in June 2011. Having just celebrated its fifth anniversary, Global Select has rewarded investors who were in at the launch with returns of 86 per cent. Edelsten says: ‘International investing makes sense in this kind of environment, where investors are sceptical about the outlook for growth on the Continent and in the UK.’
Though six hands on the tiller may seem like four too many, Edelsten begs to differ. ‘It’s worked for Artemis Global Select and it’s working at Mid Wynd. It’s a flat management approach we adopt, which means we are all searching for the world’s best growth companies. Of course we argue, but we won’t invest in a new company unless we all agree it’s a good idea.’