HEAD-TO-HEAD: Artemis versus Seneca

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Investment process

Both the Artemis and Seneca products are global mixed-asset products, with a bias toward developed markets, according to McDermott.

There are other similarities between the two funds. For example, he said that both provide investors with monthly income, adding that the yield of the Seneca fund yield is 4.9% and 4.14% for the Artemis%.

The products also have a value-focused style, McDermott added.

Despite the similarities, there are still huge differences between the two products, particularly in their asset allocation.

While the Artemis fund is a vanilla mixed-asset fund that only invests in equities and fixed income, the Seneca fund also includes alternative assets in its portfolio, such as infrastructure.

Broad asset allocation

Source: Morningstar Direct

“The Artemis fund has a natural split of 60% in fixed income and 40% equities. If the managers feel that macro risks are high, they will allocate more towards fixed income and less to equities, and vice-versa if they are confident about market conditions,” McDermott said.

Turning to the Seneca fund, although it invests in alternatives, McDermott noted that the product prefers simple alternative investments.

“To be clear, the Seneca managers believe in keeping it simple. They do not invest in opaque financial products such as hedge funds, structured products or derivatives.

“It may even be easier to classify the asset class as ‘specialist’ rather than ‘alternatives’,” he added.

Another key difference between the two funds is how the products are constructed.

“The big thing to note is that while the Artemis fund invests directly in equities and fixed income, the Seneca product is a multi-asset fund-of-funds, although it does have some direct investments,” McDermott said.

Artemis portfolio: top five holdings (by asset class, %)

Source: Fund factsheets

Seneca portfolio: top five holdings (by asset class, %) 

Source: Fund factsheet

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