‘The Brazilian government screwed our investment’

Many income investors depend heavily on the fortunes of big British dividend payers such as BP, Imperial Brands and Vodafone. Exposure to global income stocks is one way to diversify and to help avoid your entire portfolio coming under threat at once. Artemis Global Income is one of the most popular options, at £4.3bn in assets. On a £10,000 investment it has delivered income of £4,527 since its launch in 2010, in addition to capital growth of 116pc. It currently yields 3.5pc.

The manager, Jacob de TuschLec, tells Telegraph Money why he dislikes “obvious stories” and how the Brazilian government ruined one of his investments.

Our stocks have to pay a dividend, have a commitment to returning cash to investors and have a clear ability to generate cash.

We take a top-down view of the economy and have a bias towards “value” investing. We look for companies that appear cheap on the basis of, in particular, free cash flow yield [how much free cash a business generates relative to its market value].

We don’t like companies that micromanage their dividend to make it look smooth. Our preference is for pragmatic companies that are willing to invest when they have to and pay out when it makes sense.

Historically the fund is two thirds larger firms and one third mid-sized stocks. We don’t go for many big traditional income names, as it’s a lot harder to add value in shares covered by 50 analysts. When the pain hits, you don’t want to own what everyone else owns. We also avoid leveraged companies – an awful lot of debt has built up in the past 10 years.

We generally have very little invested in the UK, to give investors access to non-sterling income. In local currency the fund’s dividend grows at around 5pc annually.

Jacob de Tusch-Lec, a global income investor at Artemis, tells James Connington about his hardest lesson

CV: Jacob de Tusch-Lec

Jacob de TuschLec joined Artemis in 2005, having begun his career at BankInvest, a Scandinavian fund management firm, in 1998. He is the lead manager on two other Artemis funds, in addition to Global Income, which he has run since launch. In spring 2016, when American 10-year government bond yields fell to 1.3pc, we decided that there was still decent growth in the Western world. Our view was that it was more likely for that yield to hit 3pc than 1pc.

We sold defensive “bond proxy” stocks such as utilities, telecoms and pharmaceuticals and bought stocks more sensitive to the economic cycle, such as American banks.

That was a play on middle America and the fact that after a number of years when only the rich got richer, reduced unemployment had led to wage growth in other parts of society.

In Europe, where rates are going nowhere, we were less worried about being in bond proxy stocks.

Now the 10-year yield has hit 3pc and the story has played out to an extent. So we are now going back into more defensive stocks in America. We don’t like stories that are too obvious – we prefer hairy stories that take a bit of time to explain. I’ve spent time looking at Moneta, the Czech bank. The Czech economy is strong and the bank is a wonderful dividend play with an 8pc yield.

Israel is the most overlooked market. It falls between the cracks and we have found good investments there. It’s not crowded, so when the global market has bad days, it does better.