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Artemis Global Emerging Markets Fund

All data as at 31 January 2017 except where specified
  • Summary
  • About the fund
  • Performance
  • Composition
  • Key facts
  • Investment insights
  • Literature
  • Contact us


The fund’s aims

The fund aims to achieve long-term returns through a combination of capital growth and income principally from companies listed, quoted and/or traded in emerging markets or which are headquartered or have a significant part of their activities in emerging markets.

Current prices and yield
(class I)

As at noon, 24 February 2017
Mid price (GBP dist shares)116.16p
Mid price (GBP acc shares)119.33p
Historic yield (GBP acc shares)1.34%
Historic yield (GBP dist shares)1.81%

Investment information
(class I)

Minimum lump sum investment£250,000
Ongoing charge (GBP acc shares)1.00%
Ongoing charge (GBP dist shares)1.00%

The initial charge is currently waived. The ongoing charge includes the annual management charge of 0.75% 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

Emerging market stocks surged in January, bouncing back after the surprise outcome of the US presidential election hurt sentiment in late 2016. In US dollar terms, they enjoyed their best month since last March. The fund, meanwhile, rose by more than the market.

At the country level, Brazilian stocks rose sharply following the central bank’s decision to cut interest rates.

With metal prices - aluminium, iron ore and copper - showing particular strength, materials stocks led the market higher. The trend for defensive sectors to underperform continued, and staples and healthcare were the laggards once again. At the country level, Brazilian stocks rose sharply following the central bank’s decision to cut interest rates. Chinese and Korean stocks also outperformed, but Russian stocks lost some momentum following their strong performance in previous months.

During the month, supportive newsflow and encouraging economic data from China prompted us to increase our exposure there. Among others, we added Wanhua Chemical, China Agri-Industries, YY Inc and Alibaba. We funded this by selling Grasim Industries, China Life Insurance and Transmissor Energia, where corporate newsflow was deteriorating.

After these changes, the fund continues to offer highly attractive financial characteristics. It trades on a price-to-earnings ratio of 9.2x compared with 12.2x for the market. It also offers a dividend yield some 25% higher than its benchmark. The fund’s principal exposures are overweight positions in Russia and Thailand and underweights in India and Malaysia. At the sector level, we continue to have a tilt towards more cyclical areas of the market, with overweights to basic resources, industrials and construction and have less exposure in technology.

21 December 2016

Emerging market equities: Sentiment has turned …

Peter Saacke and Raheel Altaf, managers of the Artemis Global Emerging Markets Fund, discuss recent developments in emerging markets and how the fund is positioned.

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

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

Data from 8 April 2015. Source: Lipper Limited, class I GBP accumulation shares, mid to mid in sterling to 31 January 2017. All figures show total returns with dividends reinvested.

Asset allocation

Asset allocation

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

Percentage growth (class I)

20162015201420132012
12 months to 31 December37.7%n/an/an/an/a
20172016201520142013
12 months to 31 January49.3%n/an/an/an/a
Please remember that past performance is not a guide to the future. Source: Lipper Limited, class I GBP accumulation shares, mid to mid in sterling. All figures show total returns with dividends reinvested. As the fund was launched on 8 April 2015, complete five year performance data is not yet available.

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Emerging market equities: Sentiment has turned …





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About the fund

Launched on 8 April 2015, the Artemis Global Emerging Markets Fund aims to achieve long-term returns through a combination of capital growth and income.

It draws on SmartGARP®, Artemis’ stock-screening system, which managers Peter Saacke and Raheel Altaf use to analyse a universe of some 2,000 emerging market stocks. What they are looking for is stocks whose prospects for growth are undervalued.

Investment strategy

SmartGARP screens for companies growing faster than the market, while trading on valuations lower than the market. They should be enjoying strong and consistent upgrades to their forecast profits – and yet be unpopular. At the same time, they should be benefiting from macroeconomic trends.

To stocks which have satisfied the SmartGARP screen, Peter and Raheel then apply due diligence. Their objective is to establish whether there is substance behind the seemingly attractive characteristics SmartGARP has identified. For example, acquisitions, disposals or accounting changes might have distorted a company’s financial characteristics.

An even smaller subset of companies pass this second step, and from these Peter and Raheel construct a portfolio diversified by sectors, countries and investment styles. The result is a portfolio of 80-120 stocks.

Model portfolio positioning

Sector

Artemis Global Growth fund model portfolio positioning - sector - chart

Country

Artemis Global Growth fund model portfolio positioning - country - chart

Introducing the fund

Peter Saacke introduces the Artemis Global Emerging Markets Fund and outlines how he and fellow manager Raheel Altaf make investment decisions.

Fund positioning

Peter Saacke discusses current themes and positioning for his new fund.

SmartGARP's credentials in emerging markets

While this is Artemis’ first dedicated emerging markets fund, the Artemis Global Growth Fund, also managed by Peter using SmartGARP, has held a significant allocation to emerging markets.

This has typically ranged from 15-30% over Peter’s 11 year tenure. The fund has achieved a top quartile return over three, five years and since launch*. Emerging markets have, on a relative basis, provided the highest contribution to the outperformance of the Artemis Global Growth Fund.

Artemis Global Growth Fund – performance
attribution analysis (annualised)

Artemis Global Growth Fund – performance attribution analysis (annualised)


Chart shows performance of regional carve-outs relative to MSCI regional indices. Source: Artemis as at December 2014.

* Source: Lipper Limited, class I GBP accumulation shares, mid to mid in sterling to 30 December 2016. All figures show total returns with dividends reinvested. Sector is IA Global NR, universe of funds is those reporting net of UK taxes.

The managers


Peter Saacke

 

Peter Saacke

Peter joined Artemis in December 2002 from Merrill Lynch, where he worked as pan-European equity strategist and quantitative economist from 1999. Peter holds a BA in mathematics and philosophy from the University of Oxford, an MA in economics from Freiburg University and a PhD in economics from Hamburg University. In 1998 he was a visiting researcher at the European University Institute in Florence. Peter is a CFA charterholder. He has managed the Artemis European Growth Fund with Philip Wolstencroft since December 2002 and took over the management of the Artemis Global Growth Fund in January 2004.

 

Raheel Altaf

 

Raheel Altaf

A Cambridge graduate in electrical engineering, Raheel Altaf joined Fidelity International as a quantitative analyst in 2002. In 2007 he was promoted to portfolio manager for a range of active and passive systematic equity funds which grew to $2.5 billion. In 2011, Raheel moved to Fulcrum Asset Management. He joined Artemis in June 2014 to help Philip Wolstencroft and Peter Saacke manage Artemis’ SmartGARP retail funds and institutional mandates.

Key facts


Launch date

8 April 2015

IA sector

IA Global Emerging Markets

Benchmark

MSCI Emerging Markets

Share classes

Accumulation: SEDOL BW9HL13

Distribution: SEDOL BW9HL24

Sector guidelines

+/- 10%

Country guidelines

+/- 6%

Expected active share

75-80%

Ongoing charge

1.00% (including the annual management charge of 0.75%)

SRRI rating

6

Citywire A - Peter Saacke
Peter Saacke

Citywire rating: source and copyright Citywire. Peter Saacke is rated by Citywire for his risk-adjusted performance for the three years to 30 December 2016. Third party endorsements are not a recommendation to buy.

Further information

For further information, view:

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 will invest in emerging markets.

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.

For distribution shares, the fund's annual management charge is taken from capital.

The additional expenses of the fund are currently capped at 0.25%. This has the effect of capping the ongoing charge for the class I shares issued by the fund at 1%. 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.

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