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Artemis US Extended Alpha Fund

All data as at 28 February 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 capital growth by investing in the shares of companies listed, quoted or traded in the United States of America.

Current prices and yield
(class I)

As at noon, 30 March 2017
Mid price (GBP acc shares)174.78p
Historic yield (GBP acc shares)0.00%

Investment information
(class I)

Minimum lump sum investment£250,000
Ongoing charge (GBP acc shares)0.86%

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 only when the share price outperforms the fund's benchmark index by a minimum percentage. A full explanation of the fund's charges can be found in the KIID.

Fund manager’s update

Fuelled by large flows into equity and bond ETFs, the US market extended its gains in February. Expectations that the new administration will cut taxes and red tape continued to propel indicators of business and consumer confidence to very high levels. But because growth in real wages (which is to say after inflation) is actually negative, this increased confidence among consumers hasn’t translated into higher spending. Furthermore, despite improved data readings over the last six months, there are signs that the US economy may be slowing.

The market’s gains in February were led by healthcare stocks …

The market’s gains in February were led by healthcare stocks, which reversed their previous poor performance as greater clarity emerged on reforms to the sector. Financial stocks also did well as talks of de-regulation and the easing of the strict control measures imposed after the financial crisis led the sector higher. The fund’s relative lack of exposure to both sectors hurt its performance: although it produced a positive return, it failed to keep up with the strong return from the S&P 500 index.

On a stock level, negatives included our holding in animal health company Zoetis, whose quarterly report failed to convince. Our holdings in the transportation sector also detracted, with low-cost airline Spirit Airlines and trucking company Swift Transportation both lagging. We believe that both companies still have huge potential. There is further scope for Spirit to use its advantages on cost to win market share while Swift will benefit from improved pricing and demand. Furthermore, its size should help it to withstand upcoming regulatory changes rather better than some of its smaller competitors.

On the positive side, holdings in financial data provider MSCI and holding group Leucadia both contributed. Meanwhile, selected short positions in telecom and retail contributed positively to performance. Liquidity is likely to contract as we see tightening from central banks over the balance of the year.

21 December 2016

Artemis US Extended Alpha Fund: Ready for higher interest rates …

Stephanie Sutton, investment director for Artemis’ US funds, discusses higher interest rates, the oil price and Trumponomics. All are providing opportunity for the Artemis US Extended Alpha Fund on both the long and the short side.

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

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

Data from 19 September 2014. Source: Lipper Limited, class I GBP accumulation shares, mid to mid in sterling to 28 February 2017. All figures show total returns with dividends reinvested.

Net sector exposure

Percentage growth (class I)

20162015201420132012
12 months to 31 December31.8%15.2%n/an/an/a
20172016201520142013
12 months to 28 February37.1%12.0%n/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 19 September 2014, complete five year performance data is not yet available.

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Artemis US Extended Alpha Fund: Ready for higher interest rates …





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About the fund

  • Long/short 150/50 US equity fund
  • Typical net exposure of 100%
  • Experienced long/short management team

The Artemis US Extended Alpha Fund is a UCITS ‘130/30’ fund. Designed to outperform the S&P 500 index, it combines a traditional long portfolio of US stocks with a portfolio of short positions.

This long/short structure allows manager Stephen Moore to use his stock-picking skills to profit from falling, as well as rising, share prices. It will typically maintain a positive net market exposure of 100% and, in practice, can take up to 150% long exposure versus 50% short exposure. The fund holds around 150 individual stock positions across its long and short portfolios.

Reasons to invest

  • Strong performance record: over a six-year period, the Threadneedle American Extended Alpha Fund, on which this fund is based, outperformed the S&P 500 index by 27.8%, delivering outperformance across a range of market conditions.
  • 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.
  • Robust 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

  • 150/50 approach: The fund’s structure draws on the full range of the Artemis US equity team’s stock selection capabilities. It will typically hold around 150 individual stock positions across its long and short portfolios and maintain a net equity exposure of around 100%.
  • Macro aware: rigorous macro analysis looks to understand the cyclical and secular (i.e. long-term) trends that are shaping the US economy, identifying areas benefiting from supportive thematic trends as well as those for whom conditions are less favourable..
  • Strong risk awareness: the investment process seeks to identify companies that offer an attractive risk profile across a range of scenarios. Each one of the fund’s positions displays an asymmetric risk profile, its upside potential significantly outweighing its downside risks.
  • An experienced team: manager Stephen Moore draws on the seven-strong US equity team’s 56 years of collective experience and their specialist sector knowledge.

Fund manager

 Stephen Moore

 

Stephen has managed Artemis’ US Extended Alpha 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 Extended Alpha Fund, describing where the most interesting opportunities lie.

Fund information


Launch date

 

19 September 2014

Strategy

 

Long/short equity

Benchmark

 

S&P 500

IA sector

 

North America

Geographical focus

 

North America

Structure

 

OEIC

Share class

 

Class I GBP accumulation

Management fee

 

0.75%

Ongoing charge

 

0.93%

Performance fee

 

20%, S&P 500 hurdle

SRRI rating

 

5

Fund performance

Performance to 28 February 2017 (%)

 

Since launch*

1 year

6 months

3 months

Artemis US Extended Alpha Fund

74.9

37.4

17.5

7.1

Sector average

55.3

37.9

15.9

7.8

Position in sector

2/78

45/83

20/88

65/89

Quartile

1

3

1

3

* Data from 19 September 2014. Source: Lipper Limited, class I GBP accumulation shares, mid to mid in sterling to 28 February 2017. All figures show total returns with dividends reinvested. Sector is IA North America NR, universe of funds is those reporting net of UK taxes. As fund was launched on 19 September 2014, complete five years performance data is not yet available.

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

Value of £1,000 invested at launch

* Data from 19 September 2014. Source: Lipper Limited, class I GBP accumulation shares, mid to mid in sterling to 28 February 2017. All figures show total returns with dividends reinvested.

 

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 Extended Alpha - 130/30 explained

Artemis US fund range brochure


Artemis US Extended Alpha fund overview

 

 USEA 130 explained  US Fund range brochure  US Extended Alpha fund overview

Risk warnings

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

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

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

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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