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Laurie Penny on rising tuition fees: A breathtaking attack on social mobility

Lifting the cap on tuition fees isn't just an attack on young people -- it's much, much worse than that.

It's worse than we feared. The Browne report, released today, advises the government that the best way to fund a "competitive" higher education system and provide businesses with the goods, services and skills that they require is to replace state funding of higher education with a punitive fees system which is set to triple and or even quadruple the amount that British students have to pay to attend university. This provides the coalition with all the excuse it needed to turn our universities into cowed commercial spaces, crammed with young people so terrified of their mounting debts that they will fashion themselves into obedient corporate drones with less of the soul-searching that goes on in today's academy.

Once they have graduated, rather than having their loan charges frozen as is currently the case, students will be obliged to pay interest at market rates, meaning that the poorest students will potentially be paying thousands of pounds' worth of extra interest over 30 years. Meanwhile, the very wealthy, who do not need loans, and the middle-aged and elderly, who enjoyed free higher education paid for through progressive taxation, will see their odds of remaining "competitive" in the meat market of modern moneymaking vastly improved.

This is a breathtaking attack on social mobility. The report, which is likely to be directly incorporated into policy, is a statement in bald black and white that neoliberal political doctrine will now be more mercilessly pursued than it ever was under New Labour. At root, the Browne report is not about what students and graduates are willing or able to pay, but about what the government is unwilling to pay to fund a higher education system that, with its fusty emphasis on learning and personal development, has always contradicted to some extent the interests of profit.

The question isn't where the money to run our universities will come from -- the question is where it won't come from. If the Tories push ahead with their plans to raise tuition fees, then it won't come from taxpayers; not anymore.

Let's remind ourselves of the levels of stomach-churning hypocrisy at play here. The politicians currently wrangling over how many tens of thousands of pounds students from poor families should be obliged to pay, and when, for degrees which are now all but essential to any hope of decent employment in a beleaguered job market, all attended university for free. Not only that: Cameron, Clegg and Osborne, despite having families wealthy enough to educate them at top private schools, were all offered generous maintenance grants to support them through their prestigious free courses, payable by edict of the Education Act 1962.

Like many universal benefits, the student grant was long ago tossed into the dogpit of corporate cannibalism, with young people and their families now forced to make up the shortfall of what was once ours on principle. The student grant and free tuition used to be financed perfectly adequately through the tax system -- a system that saw top-rate taxpayers paying 83 per cent on their earnings in the 1970s and 60 per cent even during the grimily golden years of Thatcherite neoliberalism.

This isn't just a tax on the young. It's far, far worse than that. Today, the new, caring Conservative party plans to effectively abolish higher education that is free at the point of delivery, and instead deliver the functions of the welfare state to the market in their entirety.

The attack on university funding is part of a fiscally sadistic cuts agenda that seeks to roll back the state in order to turn universities, hospitals and even jobcentres into little more than third-sector service providers jostling for the business of the desperate consumers who we used to think of as "citizens". This kamikaze capitalism has now cynically incorporated the language of "fairness". The coalition mouths platitudes to "fairness" precisely because fairness before the market is the one thing that savage neoliberalism can promise without blinking. This is about more than fairness, however. This is about justice.

The people of this country now face a choice -- between cringing complicity with a compromised and misleading notion of 'fairness' and the challenge of fighting for justice, genuine social justice, which is more than equality, more than fairness, and certainly more than the market can deliver.

This is a choice that faces all of us, including those who are unlucky enough to have endorsed, voted or chosen to work for the quisling Liberal Democrats. Will we remain complicit as our welfare state is destroyed and our young people's futures are aggressively pimped out to an uncaring private sector? Or will we turn around and say, while we still have the strength: enough?

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

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Artemis Monthly Distribution Fund: opportunities in volatile markets...

The Artemis Monthly Distribution Fund is a straightforward portfolio that combines bonds and global equities with the aim to deliver a regular income. It is run by James Foster and Jacob de Tusch-Lec. James also manages the Artemis Strategic Bond Fund whilst Jacob also manages the Artemis Global Income Fund. Whilst past performance is not a guide to the future, the Monthly Distribution Fund has returned 76.7%* since launch in 2012. Its current yield is 3.9%. It is also the top performing fund in its sector.*

Political uncertainty and the actions of central banks continue to create market volatility. In this article, James Foster talks about the opportunities this has provided and which areas of the market he considers most attractive.


The approach of the European Central Bank (ECB) has been both broad and radical. The increase to its quantitative easing (QE) programme has helped to push the yields on an even wider range of government bonds into negative territory. The cheap financing it offered to banks was less expected. To date, however, it has done little to ease fears that European banks are in trouble. The performance of bank shares across Europe (including the UK) has been abominable. Returns from their bonds, however, have been more mixed.

Bonds issued by banks and insurers are an important part of the portfolio. We increased our positions here in February but reduced them subsequently, particularly after the UK’s referendum on the EU in June. Our insurance positions have increased in importance. New Europe-wide solvency rules were introduced at the beginning of the year. They make comparisons easier and give us more comfort about the creditworthiness of these companies.

As part of its QE programme, the ECB announced that it would start buying corporate bonds with the aim of reducing borrowing costs for investment-grade companies. After months of preparation, the purchases began in June. The mere prospect of the ECB buying corporate bonds proved as significant as the reality. The implications, however, could be even more profound than they initially appear. Bonds of any investment-grade issuer with a European subsidiary are eligible.

Moreover, the ECB has changed the entire investment background for bonds. Companies are more likely to do their utmost to retain their investment-grade ratings. The financial benefits are so great that they will cut their dividends, issue equity and sell assets to reduce their borrowings. We have already seen RWE in Germany and Centrica in the UK undertaking precisely these policies.

High-yield companies, meanwhile, will do their utmost to obtain investment-grade ratings and could also lower their dividends or raise equity to do so. This creates a very supportive backdrop to the fund’s bonds in the BBB to BB range, which comprise around 28% of the portfolio.

The backdrop for higher-yielding bonds – those with a credit rating of BB and below – has also been volatile. Sentiment in the first quarter of 2016 was weak and deteriorated as the risk of recession in Europe increased. These types of bonds react very poorly to any threat of rising default rates. With sentiment weak in February and March, they struggled. However, the generosity of the ECB and stronger economic growth readings helped to improve sentiment. Default rates are higher than they were, but only in the energy sector and areas related to it.

We felt the doom was overdone and used the opportunity to increase our energy related bonds. Admittedly, our focus was on better quality companies such as Total, the French oil company. But we also increased positions in electricity producers such as EDF, RWE and Centrica. In a related move, we further increased the fund’s exposure to commodity companies. All of these moves proved beneficial.

One important area for the fund is the hybrid market. These bonds are perpetual but come with call options, dates at which the issuer has the option to repay at par. They have technical quirks so they do not become a default instrument. In other words, if they don’t pay a coupon it rolls over to the following year without triggering a default. In practice, if the situation is that dire, we have made a serious mistake in buying them. These hybrids have been good investments for us. Their technical idiosyncrasies mean some investors remain wary of these bonds. We believe this concern is misplaced. For as long as the underlying company is generating solid cashflows then its bonds will perform and, most importantly, provide a healthy income, which is our priority.


In equities, our response to the volatility – and to the political and economic uncertainties facing the markets– has been measured. We have been appraising our holdings and the wider market as rationally as possible. And in some cases, the sell off prompted by the Brexit vote appeared to be more about sentiment than fundamentals. We will not run away from assets that are too cheap and whose prospects remain good. We retain, for example, our Italian TV and telecoms ‘tower’ companies – EI Towers and Rai Way. Their revenues are predictable and their dividends attractive. And we have been adding to some of our European holdings, albeit selectively. We have, for example, been adding to infrastructure group Ferrovial. Its shares have been treated harshly; investors seem to be ignoring the significant proportion of its revenues derived from toll roads in Canada. It also owns a stake in Heathrow Airport, which will remain a premium asset whose revenues will be derived from fees set by the regulator whether the UK is part of the EU or not.

In equities, some European financials may now be almost un-investable and we have lowered our risk profile in this area. Yet there are a handful of exceptions. Moneta Money Bank, for example, which we bought at the initial public offering (IPO). This used to be GE’s Czech consumer lending business. The Czech Republic is a beneficiary of the ongoing economic success of Germany, its neighbour, and unemployment is low. The yield is likely to be around 8%. And beyond financials, prospects for many other European stocks look fine. Interest rates that are ‘lower for longer’ should be seen as an opportunity for many of our holdings – notably real estate companies such as TLG Immobilien  and infrastructure stocks such as Ferrovial – rather than a threat.


For high-yield bonds the outlook is positive. For as long as the ECB continues to print money under the guise of QE it will compel investors to buy high-yield bonds in search for income. The US economy is also performing reasonably well, keeping defaults low. Despite the uncertainty created by Brexit, that oil prices have risen means we can expect default rates to fall.

At the same time, there are a number of legitimate concerns. The greatest, perhaps, is in the Italian banking system. A solution to the problem of non-performing loans needs to be found without wiping out the savings of Italian households (many of whom are direct holders of Italian bank bonds). Finding a solution to this problem that is acceptable both to the EU and to Italian voters will be hard. Other risks are familiar: levels of debt across Europe are too high and growth is still too slow.

* Data from 21 May 2012. Source: Lipper Limited, class I distribution units, bid to bid in sterling to 30 September 2016. All figures show total returns with dividends reinvested. Sector is IA Mixed Investment 20-60% Shares NR, universe of funds is those reporting net of UK taxes.

† Source: Artemis. Yield quoted is the historic class I distribution yield as at 30 September 2016.



Source: Lipper Limited, class I distribution units, bid to bid in sterling. All figures show total returns with net interest reinvested. As the fund was launched on 21 May 2012, complete five year performance data is not yet available.


To ensure you understand whether this fund is suitable for you, please read the Key Investor Information Document, which is available, along with the fund’s Prospectus, from

The value of any investment, and any income from it, can rise and fall with movements in stockmarkets, currencies and interest rates. These can move irrationally and can be affected unpredictably by diverse factors, including political and economic events. This could mean that you won’t get back the amount you originally invested.

The fund’s past performance should not be considered a guide to future returns.

The payment of income is not guaranteed.

Because one of the key objectives of the fund is to provide income, the annual management charge is taken from capital rather than income. This can reduce the potential for capital growth.

The fund may use derivatives (financial instruments whose value is linked to the expected price movements of an underlying asset) for investment purposes, including taking long and short positions, and may use borrowing from time to time. It may also invest in derivatives to protect the value of the fund, reduce costs and/or generate additional income. Investing in derivatives also carries risks, however. In the case of a ‘short’ position, for example, if the price of the underlying asset rises in value, the fund will lose money.

The fund may invest in emerging markets, which can involve greater risk than investing in developed markets. In particular, more volatility (sharper rises and falls in unit prices) can be expected.

The fund may invest in fixed-interest securities. These are issued by governments, companies and other entities and pay a fixed level of income or interest. These payments (including repayment of capital) are subject to credit risks. Meanwhile, the market value of these assets will be particularly influenced by movements in interest rates and by changes in interest-rate expectations.

The fund may invest in higher yielding bonds, which may increase the risk to your capital. Investing in these types of assets (which are also known as sub-investment grade bonds) can produce a higher yield but also brings an increased risk of default, which would affect the capital value of your investment.

The fund holds bonds which could prove difficult to sell. As a result, the fund may have to lower the selling price, sell other investments or forego more appealing investment opportunities.

The historic yield reflects distribution payments declared by the fund over the previous year as a percentage of its mid-market unit price. It does not include any preliminary charge. Investors may be subject to tax on the distribution payments that they receive.

The additional expenses of the fund are currently capped at 0.14%. This has the effect of capping the ongoing charge for the class I units issued by the fund at 0.89% and for class R units at 1.64%. Artemis reserves the right to remove the cap without notice.

Any research and analysis in this communication has been obtained by Artemis for its own use. Although this communication is based on sources of information that Artemis believes to be reliable, no guarantee is given as to its accuracy or completeness.

Any forward-looking statements are based on Artemis’ current expectations and projections and are subject to change without notice.

Issued by Artemis Fund Managers Ltd which is authorised and regulated by the Financial Conduct Authority.