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Artemis US Absolute Return 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 a positive return over the longer term, notwithstanding changing market conditions, investing principally in the shares of companies listed, quoted or traded in the United States of America.

Current prices and yield
(class I)

As at noon, 24 February 2017
Mid price (GBP hedged acc shares)108.81p
Historic yield (GBP hedged acc shares)0.00%

Investment information
(class I)

Minimum lump sum investment£250,000
Ongoing charge (GBP acc hedged shares)0.90%

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). A performance fee is charged as 20% of any outperformance of the share class against the greater of the LIBOR 3 month index (in the relevant currency) or zero. A full explanation of the fund's charges can be found in the KIID.

Fund manager’s update

The anticipation of better economic activity together with the prospect of lower taxes and increased spending on infrastructure boosted confidence in January and indicators for both consumer and corporate confidence reached new highs. US equities, meanwhile, rose over the month and the fund produced a positive return.

In terms of activity, we increased exposure to consumer lenders in the expectation of deregulation and lower taxes.

Having underperformed since the election, technology stocks fared better in January. The fund benefited through holding stocks such as Lam Research and KLA Tencor (semi-conductor equipment) as well as Take-Two Interactive (video games). Our negative stance on telecoms stocks made a positive contribution. Following weak results from three leading telecom companies, the sector reversed gains made the previous month. Fundamentals for the industry are continuing to deteriorate. Our positive stance towards cable companies worked well over the month as rumours of potential consolidation (something we consider to be likely) boosted the sector.

On the negative side, our holding in Spirit Airlines suffered after it announced uninspiring results and guidance on profits. There were also concerns about restrictions on air traffic following President Trump’s ban on travel from certain countries.

In terms of activity, we increased exposure to consumer lenders in the expectation of deregulation and lower taxes. We are aware, however, that risks continue to build for the sector because of stresses building up in the global financial system. Having performed very strongly since the election, we expect more volatility in the market as we get closer to the implementation of legislation. The build-up in inflationary pressures globally presents additional risks.

24 November 2016

Update on the Artemis US Absolute Return Fund

 

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

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

Data from 27 October 2014. Source: Lipper Limited, class I GBP hedged accumulation shares, mid to mid in sterling to 31 January 2017. All figures show total returns with net dividends reinvested.

Net sector exposure

Percentage growth (class I)

20162015201420132012
12 months to 31 December-0.9%7.7%n/an/an/a
20172016201520142013
12 months to 31 January0.4%6.3%n/an/an/a
Please remember that past performance is not a guide to the future. Source: Lipper Limited, class I GBP hedged accumulation shares, mid to mid in sterling. All figures show total returns with dividends reinvested. As the fund was launched on 27 October 2014, complete five year performance data is not yet available.

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Update on the Artemis US Absolute Return Fund





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About the fund

  • Aims to generate positive returns in all market conditions
  • High conviction, equity long/short portfolio
  • The purest expression of Artemis’ US stock-picking expertise

The Artemis US Absolute Return Fund is an equity long/short fund. It aims to deliver a positive return over a rolling three-year period, irrespective of changing market conditions.

To achieve this, it combines a traditional long portfolio of US stocks with short positions, allowing manager Stephen Moore to use his stock-picking skills to profit from falling, as well as rising, share prices. Short positions are attained using CFDs (contracts for difference) and are used both to hedge market risk and to generate alpha.

Artemis’ seven-strong US equity team use company meetings, quantitative analysis and third-party research to generate investment ideas. Once a potential idea has been identified, detailed fundamental bottom-up analysis is used to test the investment thesis. A key part of their approach is to focus on what they call the ‘up/down’ for stocks. The team model the potential ‘up’ and the potential ‘down’ for each stock, resulting in an up/down ratio. This drives a lot of the manager’s decision making: when to buy (or short), when to hold and when to sell.

The fund typically holds between 40 – 70 long and 50 – 95 short positions. And while these positions are the result of the team’s collaborative approach, portfolio construction rests in the hands of the fund’s experienced manager, Stephen Moore.

Reasons to invest

  • Strong performance record: over Stephen Moore's tenure, the Threadneedle American Absolute Alpha Fund, on which this fund is based, outperformed its cash benchmark by 13.4%.
  • A larger opportunity set: long-only funds can only profit from shares that are likely to rise. But this fund's structure can profit from falling, as well as rising, share prices.
  • Proven investment process: the seven-strong Artemis US equity team has an investment process that has been proven through different market cycles, with research drawing on multiple information sources.
  • Pragmatic approach: manager Stephen Moore takes a flexible, pragmatic approach to stock-picking, adapting the fund's investment style with the goal of outperforming the index across the economic and market cycle.

Investment approach

  • Macro aware: rigorous analysis of long-term trends shaping the US economy, identifying areas of the market benefiting from thematic trends – and stocks for whom conditions may not be quite so favourable.
  • Risk-conscious approach: for every position held, the team set a concrete measure of the balance between risk and opportunity. By forecasting how far each company’s shares might rise (or fall) on a one-year view, they ensure the fund offers an attractive risk profile in a range of scenarios.
  • Judgement is key: while the fund’s positions are the result of the team’s collaborative approach, portfolio construction rests in the hands of experienced
    manager, Stephen Moore.

Fund manager

 Stephen Moore

 

Stephen has managed Artemis’ US Absolute Return Fund since launch. He holds a BComm and BA from the University of Queensland and is an associate of the Securities Institute of Australia. Stephen began his career at First State in 1997 and moved to Threadneedle’s US team in 2002. He launched the Threadneedle American Extended Alpha Fund in 2007, became lead manager on the US hedge fund in 2008 and launched the Threadneedle American Absolute Alpha Fund in 2010. Stephen joined Artemis in 2014.

The latest filmclub

Stephanie Sutton gives an update on the Artemis US Absolute Return Fund, talking about recent developments and how the fund is positioned.

Fund information


Launch date

 

27 October 2014

Strategy

 

Long/short equity

Benchmark

 

LIBOR 3 months (in currency of applicable share class)

IA sector

 

Targeted Absolute Return

Geographical focus

 

North America

Structure

 

OEIC

Share classes (class I, accumulation)

 

GBP (hedged)
EUR (hedged)
USD

Management fee

 

0.75%

Ongoing charge

 

0.90%  (including additional expenses capped at 0.15%)

Performance fee

 

20%, high-water mark applied

SRRI rating

 

3

Fund performance

Performance to 31 January 2017 (%)

 

Since launch*

1 year

6 months

3 months

Artemis US Absolute Return Fund

8.5

0.4

0.7

-0.3

Sector average

5.8

2.3

1.4

0.4

Position in sector

20/50

42/62

43/62

46/62

Quartile

2

3

3

3

* Data from 27 October 2014. Source: Lipper Limited, class I GBP hedged accumulation shares, mid to mid in sterling to 31 January 2017. All figures show total returns with dividends reinvested. Sector is IA Targeted Absolute Return NR, universe of funds is those reporting net of UK taxes. As fund was launched on 27 October 2014, complete five years performance data is not yet available.

 

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

Value of £1,000 invested at launch

* Data from 27 October 2014. Source: Lipper Limited, class I GBP hedged accumulation shares, mid to mid in sterling to 31 January 2017. All figures show total returns with dividends reinvested. Sector is IA Targeted Absolute Return NR, universe of funds is those reporting net of UK taxes.

Further information

To speak to Artemis about the fund, contact our sales team, call 0800 092 2090 or email us. The following documents are available in PDF format:

Artemis US fund range brochure

Artemis US equities range brochure

Artemis US Absolute Return Fund overview

Artemis US Absolute Return Fund brochure

Artemis US Absolute Return Fund KIID

Artemis OEIC funds prospectus

Risk warnings

THIS INFORMATION IS FOR PROFESSIONAL ADVISERS ONLY and should not be relied upon by retail investors.

There is no guarantee that the fund will achieve a positive return over the longer term or any other time period and investors' capital is at risk.

The fund will 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 hold large cash deposits.

The costs and benefits of currency hedging transactions will apply to hedged shares.

Artemis Fund Managers Limited is entitled to a performance fee per share.

The additional expenses of the fund are currently capped at 0.15%. This has the effect of capping the ongoing charge for the class I shares issued by the fund at 0.90% and for the class R shares at 1.65%. 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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