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Advisers and wealth managers

Artemis European Opportunities Fund

All data as at 28 February 2017 except where specified
  • Summary
  • About the fund
  • Performance (class R)
  • Performance (class I)
  • Composition
  • Key facts
  • Investment insights
  • Literature
  • Contact us


The fund’s aims

The aim of the fund is to achieve long term growth from investments principally in European equities, excluding the UK.

Current prices and yield
(class R)

As at noon, 22 March 2017
Bid price (acc units)92.39p
Bid price (dist units)88.75p
Offer price (acc units)97.47p
Offer price (dist units)93.64p
Historic yield (acc units)0.62%
Historic yield (dist units)0.61%

Investment information
(class R)

Minimum lump sum investment£1,000
Ongoing charge (acc units)1.60%
Ongoing charge (dist units)1.60%

The initial charge is currently waived. The ongoing charge includes the annual management charge of 1.5% and is shown as at the date of the Key Investor Information Document (KIID), where a full explanation of the fund's charges can be found.

Fund managers’ update

The European equity market traded higher in February. Yields on both German and US government bonds backed away from their recent highs. However, concerns that the prospect of Marine Le Pen winning the French election had become slightly less remote, helped to push yields on French bonds higher.

However, concerns that the prospect of Marine Le Pen winning the French election had become slightly less remote, helped to push yields on French bonds higher.

The fund, meanwhile, had its fair share of good results. These included CTS Eventim (Europe’s biggest online ticket seller), DKSH (which helps other companies to grow their business in Asia), SES (satellites), Amundi (Europe’s biggest asset manager), Intrum Justitia (debt collection/purchase) and Grand Vision (the optical retailer). We even had a takeover approach (albeit short-lived) for Unilever and an activist shareholder asking for three seats on the board of GAM (despite having a stake of just 2.1%).

It wasn’t all good news, however. Metro, whose two businesses - cash & carry and electronics retailing - will soon become two separate quoted entities, produced disappointing numbers. So did Orkla, the Nordic food manufacturer whose offering includes toothpaste tubes of fish roe.

As is often the case, we weren’t overly active in February. We took the opportunity to reduce our holding in Unilever on the day that Kraft Heinz made its approach. We are still overweight - but less so than we were. Kraft’s approach may yet galvanise Unilever’s management into bringing its costs more into line with those of Kraft’s streamlined business (a shining example). We shall see. As we awaited the outcome of Roche’s trial on the use of Perjeta in combination with Herceptin we trimmed our holding in the Swiss healthcare stock to neutral (it is highly unusual for us to have an equal weight). In the event, the news was good.

We added two new stocks to the fund over the month. Ireland’s Kerry Group makes ‘taste solutions’ (flavours) and food products. In a world where the biggest food producers are being pressured by smaller and more nimble competitors, we prefer to be invested in a company that sells products to both. We also bought Vopak, which provides storage for bulk liquids such as oils and chemicals. Investors were disappointed by its guidance on profits for 2017 as well as by its payout ratio, sending the stock 7% lower. Over the course of its 400-year history, the company has shown a unique expertise in adapting its terminal network to constantly changing flows in commodities. It has been very successful in developing terminals in new markets and, as a result, its cashflows have grown by 10% per annum in the last decade. At the current price, the shares trade on a multiple of less than 15x earnings and yield roughly 3%. This it too cheap to ignore and we will show some patience.

Looking ahead, the prospect of elections in the Netherlands and France is keeping a lid on Europe’s relative performance. Will investors be looking back in two months’ time and thinking that this was a buying opportunity? We think so. Our fund trades on roughly a 10% premium to the market’s historic price-to-earnings ratio (we use historic earnings so as not to have to rely on leaps of faith). For that (small) premium we think investors get healthier growth in earnings over the longer term than that offered by the market and a trailing yield that is only 0.4% lower.

21 December 2016

Buying the dips …

Many investors are getting carried away with the idea of reflation and this is creating distortions in the market. A rich environment for stockpickers, say Mark Page and Laurent Millet.

Value of £1,000 invested at launch to 28 February 2017

Value of £1,000 invested at launch to 28 February 2017

Data from 28 October 2011. Source Lipper Limited, accumulation units, bid to bid in sterling to 28 February 2017. All figures show total returns with dividends reinvested.

Asset allocation

Asset allocation

Source: Artemis as at 28 February 2017. Please note figures may not add up to 100% due to rounding.

Percentage growth (class R)

20162015201420132012
12 months to 31 December13.4%10.8%-0.1%26.0%23.3%
20172016201520142013
12 months to 28 February20.5%1.6%4.6%15.2%21.2%
Please remember that past performance is not a guide to the future. Source: Lipper Limited, accumulation units, bid to bid in sterling. All figures show total returns with dividends reinvested. All figures show total returns. As the fund was launched on 28 October 2011, complete five year performance data is not yet available.

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Buying the dips …





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Others can get distracted by the big picture. Our European Opportunities hunters concentrate solely on the Profit.

About the fund

The Artemis European Opportunities Fund invests in a focused portfolio of high-quality European stocks. The fund’s managers, Mark Page and Laurent Millet, take a longer-term view of a company’s potential returns than most investors. Together, Mark and Laurent have built an enviable record of outperforming in both up and down markets.  

  • A focus on excellence:  Europe is replete with world-class companies. The managers believe that investing in European companies with sustainable competitive advantages will deliver superior returns over the long term – provided their shares are bought for the right price.
  • Experienced team:  the Artemis European Opportunities team is experienced and stable. Mark Page has over 20 years’ investment experience and has worked with Laurent Millet since 2007. Together, Mark and Laurent have delivered a consistent level of performance over a sustained period
  • A flexible approach: while the team focus on investing in Europe’s highest-quality companies at a fair price, their approach is pragmatic. If prime companies are over-priced, they will invest opportunistically in stocks that are too cheap to ignore.
  • Disciplined process: a disciplined approach to stock selection and portfolio construction means that the fund holds no more than 60 stocks at any one time. This limit ensures every holding works hard to earn and retain its place.
  • First quartile since launch: the fund has returned 97.3% since launch in October 2011, compared to a benchmark return of 74.9% and sector return of 78.1*.

What makes this fund different?

  • Rigorous fundamental research: to make it into the fund, a stock needs to have the potential to generate a decent five-year compound return through a combination of earnings growth and dividend yield. Valuation plays an important part in this assessment process – the managers will only invest in a stock when it can be bought for the right price relative to its long-term (which is to say 10-year) history. This discipline means the managers invest for the long-term, looking beyond short-term volatility.
  • High quality stocks: the managers look to invest in outstanding companies with a limited amount of debt, high returns on invested capital and great growth prospects. They avoid making speculative investments in mediocre businesses with uncertain futures. Mark and Laurent then assess these potential holdings for the quality of their balance sheet. Their aim is to buy companies with the highest combination of both quality and five-year compound return potential.
  • Reduced volatility: the managers have considerable experience in using derivatives to reduce the volatility of returns. They also use the fund’s derivatives overlay to mitigate risk and generate income.
  • Sterling-hedged share class: for sterling investors worried about exposing themselves to currency risk – but who still want access to Europe’s best long-term growth opportunities – we offer a sterling-hedged share class.

 

* Data from 28 October 2011. Source: Lipper Limited, class I accumulation units, bid to bid in sterling to 28 February 2017. All figures show total returns with dividends reinvested. Sector is IA Europe (ex UK) NR, universe of funds is those reporting net of UK taxes. As the fund was launched on 28 October 2011, complete five year performance data is not yet available.

“Buying the dips ...”

Many investors are getting carried away with the idea of reflation and this is creating distortions in the market. A rich environment for stockpickers, say Mark Page and Laurent Millet.

The managers

Mark Page

 

Mark Page

Mark joined Artemis in 2011 to launch and manage the Artemis European Opportunities Fund. He came from LV= Asset Management where he was head of European equities from 2001. That followed a career at Schroders which Mark joined in 1990 as a fund manager. By the time he left Schroders in 2001, Mark had become a director of Schroders Investment Management International and deputy head of one of its global equity teams.

 

Laurent Millet

 

Laurent Millet

Laurent joined Artemis in 2011 to manage the Artemis European Opportunities Fund alongside Mark Page. A French national, Laurent is a CFA charterholder. He came to Artemis from LV= Asset Management where he was a European fund manager from 2007, working in Mark Page’s team. Before that Laurent worked as an equity analyst and strategist for a number of leading institutions in Europe.

Key facts

Launch date

28 October 2011

IA sector

Europe (ex UK)

Benchmark

FTSE World Europe ex UK TR

Share classes and SEDOLs

R accumulation: B6WFCP3
R distribution: B6WFCQ4
I accumulation: B6WFCR5
I distribution: B6WFCT7
I accumulation hedged: B6WFCS6
I distribution hedged: B6WFCV9

Ongoing charge

0.85% (class I); 1.60% (class R) (including the annual management charge of 0.75%/1.50%)

SRRI rating

5

Further information

Find out about the fund's current positioning, performance and composition:

Or contact the Artemis Sales Support team on:

Risk warnings

THIS INFORMATION IS FOR PROFESSIONAL ADVISERS ONLY and should not be relied upon by retail investors.
The fund may have a concentrated portfolio of investments.
The fund may use derivatives to meet its investment objective, to protect the value of the fund, to reduce costs and with the aim of profiting from falling prices. The fund may invest in the shares of small and medium sized companies.
FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trademark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE data is permitted without FTSE’s express written consent.
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.

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