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Advisers and wealth managers

Artemis European Opportunities Fund

All data as at 31 March 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, 21 April 2017
Bid price (acc units)93.16p
Bid price (dist units)89.49p
Offer price (acc units)98.29p
Offer price (dist units)94.42p
Historic yield (acc units)0.62%
Historic yield (dist units)0.60%

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 fund underperformed the index in March, mainly due to its underweight in the banking sector. European banking shares rose by double-digit percentages - more than twice the rate of the market - as investors positioned their funds for higher interest rates and increased lending in southern Europe.

We sold our position in Roche after it announced positive clinical results for one of its main treatments for cancer, sending its share price up 6.5% on the day.

We do not have a view on the direction of interest rates in the short term. But the high unemployment rate in southern Europe and the burden of government debt lead us to believe it unlikely that rates will increase dramatically in the near future. The ageing population (the number of Spaniards and Italians between 25 and 45 years of age is declining in absolute terms) makes a big expansion in the volume of loans to households difficult to imagine. With core inflation at 0.7% in the eurozone in February, 12-month Euribor negative (at -10 bps) and the market’s expectations of future inflation at 1.55%, we believe that the increase in banks’ valuations is not justified by their fundamentals.

The two banks we own (Fineco Bank in Italy and Nordea in Sweden) are conservatively financed and able to pay high dividend yields (4.5% for Fineco, 6% for Nordea) even with interest rates at current levels. Our underweight in banks is partly offset by our exposure to asset managers. Amundi, GAM and Azimut do not need a change in macro-economic conditions to be profitable but would benefit from higher inflation thanks to their exposure to equities. The risk/reward pay-off here is attractive.

The recent adjustments we have made to the portfolio have been for bottom-up reasons. We sold our position in the Swedish private equity company Ratos. We had bought into what we thought was a focused boutique investing in high-quality assets. After a disappointing call with the incoming chief executive it became clear to us that the company had become complacent, lacked focus and would not take the tough decisions needed to turn around some of its largest investments. Our second sale was Ingenico. After it published better-than-expected results, we used the strength in the share price to sell our position. Our investment case had become too dependent on the company’s ability to offset the slowdown in European and US payment terminals by capitalising on the demonetisation happening in India. Ingenico has been slow to adapt to online payments - where competition is fierce and barriers to entry are low - and looked unattractive at the higher share price.

We sold our position in Roche after it announced positive clinical results for one of its main treatments for cancer, sending its share price up 6.5% on the day. A large portion of Roche’s portfolio will face strong competition from biosimilars, tilting the risks to the downside.

In terms of new purchases, we used the weakness in the price of two high-quality companies to add them to our portfolio. Kone is the world’s fourth-largest manufacturer of elevatotrs and scalators and the market leader in China. The share price has been weak recently as investors have become overly concerned about the uncertainty in China. A third of Kone’s sales come from maintenance (where margins are high) while new equipment and modernisation are growing fast outside China. Earnings per share should continue to grow at a good pace going forward.

Ontex is the global leading supplier of disposable personal hygiene products. The company has made two acquisitions recently, one in Mexico and one in Brazil. Both are well timed and attractively priced. But the company had to issue shares to pay for these acquisitions and the resulting weakness in the share price gave us an opportunity to buy an attractive compounder of earnings cheaply.

Finally, we bought into Prosegur Cash, a spin-off from Prosegur, the Spanish specialist in security. Prosegur Cash is a leader in almost all the markets it operates, with good profitability and high barriers to entry. Looking ahead, elections in France, Germany and Italy make an increase in volatility likely in the next 12 months. The 49 stocks we have picked for the portfolio are resilient and should be able to thrive irrespective of the environment.

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 31 March 2017

Value of £1,000 invested at launch to 31 March 2017

Data from 28 October 2011. Source Lipper Limited, accumulation units, bid to bid in sterling to 31 March 2017. All figures show total returns with dividends reinvested.

Asset allocation

Asset allocation

Source: Artemis as at 31 March 2017. Please note figures may not add up to 100% due to rounding.

Percentage growth (class R)

20172016201520142013
12 months to 31 March21.7%0.9%7.2%17.4%20.1%
20172016201520142013
12 months to 31 March21.7%0.9%7.2%17.4%20.1%
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.

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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 105.1% since launch in October 2011, compared to a benchmark return of 82.9% and sector return of 85.2%*.

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 31 March. 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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