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Twelfth fund from Artemis

Artemis Investment Management has introduced a global energy fund, its 12th unit trust in 14 years.

The company is known for launching funds on a selective basis and has brought this fund to market because it believes the demand for energy is part a long-term trend rather than cyclical. The company also points out that demand is becoming less sensitive to the underlying energy prices.

The fund will invest for growth in a concentrated portfolio of around 30 of fund manager John Dodd’s bets stock ideas.

Dodd is a partner in and co-founder of Artemis, with previous experience at several firms including Gartmore and Ivory & Sime. At Artemis,  he managed the Artemis UK Smaller Companies Fund from launch in April 1998 until December 2010 and currently co-manages the Artemis Alpha Trust.

In the new fund, Dodd will invest mainly in listed companies in the oil & gas sector, energy transmission, generation and renewable energy sources. The fund will also invest in private companies with clear flotation plans and Dodd stresses that it is an energy fund, not a broader natural resources fund.

Geographic and sector exposure will be driven by stock selection. Artemis sees this as a distinguishing feature of its fund, as it believes many competitor funds follow their benchmark indices more closely.

IFA firm Hargreaves Lansdown sees merit in investing in the global energy sector as demand from both developed and developing economies is coupled with constrained supply, with pressure building on finite resources such as oil, gas and coal. It also points out that rising oil prices has made it economically viable to use oil reserves that were previously considered too expensive and difficult to extract, which provides opportunities for the companies that own the resources in the ground. The IFA firm also says there are good investment opportunities in renewable energy sources.

However, the fund can be volatile and could face competition from Martin Currie, Investec and the Dublin-based Guiness Atkinson global energy fund.

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