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Advisers and wealth managers

Artemis US Smaller Companies 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 principally in smaller companies listed, quoted and/or traded in the United States of America and in companies which are headquartered or have a significant part of their activities in the USA which are quoted on a regulated market outside the USA.

Current prices and yield
(class I)

As at noon, 22 March 2017
Mid price (GBP acc shares)173.11p
Historic yield (GBP acc shares)0.05%

Investment information
(class I)

Minimum lump sum investment£250,000
Ongoing charge (GBP acc shares)0.95%

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 manager’s update

The fund delivered strong positive returns in February and outperformed its benchmark. As investors gained confidence that Trump’s administration would increase spending on defence, holdings in that area did particularly well. Satellite image provider DigitalGlobe, defence supplier Mercury Systems and two suppliers of IT workers to the defence industry - Leidos Holdings and Booz Allen Hamilton - featured among the month’s top contributors. The largest contributor to performance, however, was alternative asset manager Fortress Investment, which was acquired by Japan’s Softbank. Battery producer Energizer surged on the back of strong results and was a strong contributor over the month. We believe the acquisition of its main competitor, Duracell, by Berkshire Hathaway will see the focus of the battery producers shifting away from growing sales and towards growing profits. Reducing promotional activities would have an immediate positive impact on margins.

As investors gained confidence that Trump’s administration would increase spending on defence, holdings in that area did particularly well.

Oil and gas holdings - RPC, QEP Resources, Rice Energy and Oasis Petroleum - were among detractors from returns as the sector suffered over the month. Trucking company Swift Transportation was the biggest negative. We believe that pricing and demand will improve and that it will be able to benefit from the upcoming regulation of the industry: its larger size will give it a competitive edge. We retain the holding.

24 November 2016

Encouraging outlook for US smaller companies …

Reduced taxes and increased spending should boost the US economy. A range of smaller companies will benefit, according to Cormac Weldon, manager of the Artemis US Smaller Companies Fund.

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

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

Data from 27 October 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.

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 I)

20162015201420132012
12 months to 31 December39.1%10.7%n/an/an/a
20172016201520142013
12 months to 28 February47.8%3.1%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 27 October 2014, complete five year performance data is not yet available.

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Encouraging outlook for US smaller companies …





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About the fund

  • Access to some of the world’s fastest-growing companies
  • Targets stocks under US$10 billion in size
  • Utilises Artemis’ proprietary research and expertise to analyse small-cap opportunities

America is home to a huge number of the world’s most innovative, entrepreneurial and fastest-growing small companies. Because smaller companies tend to be less well covered by analysts than their larger peers, experienced investors can use fundamental analysis to find the leaders of tomorrow before their potential receives wider recognition.

The Artemis US Smaller Companies Fund aims to give investors exposure to the best of these opportunities, investing in a focused ‘best ideas’ portfolio of 40 to 60 US companies whose market value is below US$10 billion.

A robust investment process begins with macro analysis by the seven-strong Artemis US equity team to identify areas of the market that are benefiting from thematic trends shaping the US economy – and areas where conditions may be less favourable. The research process also draws on third-party research, quantitative analysis and company meetings.

Once a stock has been identified as worthy of closer inspection, in-depth, bottom-up analysis and financial modelling are used to develop and test the investment case.

Reasons to invest

  • Access to some of the world’s fastest-growing companies: academic studies of the ‘smaller companies effect’ suggest that, over the long term, smaller companies tend to outperform their larger peers. America is also a particularly supportive environment for small companies.
  • Focused, yet diversified: the fund typically holds around 40 to 60 stocks, carefully selected from a universe of over 2,000. This ensures the fund is focused – but that it also holds enough stocks to ensure diversification, helping to mitigate the higher levels of volatility seen in smaller companies.
  • High conviction: to maximise long-term returns, manager Cormac Weldon is free to select stocks in whichever areas of the market he finds opportunity. As such, the fund will typically bear little relation to its benchmark index.
  • Strong performance record: Cormac has a proven record of investing in smaller companies. Over his tenure as lead manager of the Threadneedle American Smaller Companies Fund, he posted a top quartile return of 130.8%.

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 stock 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.
  • Robust investment process: the Artemis US equity team has a tried and tested investment process which has been proven through different market cycles, with research drawing on multiple information sources.
  • Judgement is key: Cormac Weldon has managed US equity portfolios in all manner of market conditions. His judgement underpins the fund, allowing it successfully to navigate changes in the economic and market environment.

Introducing the fund

Manager Cormac Weldon introduces the fund and explains his investment approach.

Fund information


Launch date

 

27 October 2014

Strategy

 

Equity long only

Benchmark

 

Russell 2000

IA sector

 

North American Smaller Companies

Geographical focus

 

North America

Structure

 

OEIC

Share class

 

Class I GBP accumulation

Management fee

 

0.75%

Ongoing charge

 

1.00%  (including additional expenses capped at 0.25%)

SRRI rating

 

6

Performance credentials

The following figures illustrate the performance of the Threadneedle American Smaller Companies Fund which Cormac Weldon managed from September 2005 to December 2013. The investment strategy and portfolio of the Artemis US Smaller Companies Fund is modelled on the Threadneedle American Smaller Companies Fund.

 

6 months

1 year

3 years

5 years

Tenure

Threadneedle American Smaller Companies

8.0%

37.1%

33.2%

148.6%

130.8%

Russell 2000

9.7%

36.2%

46.3%

116.7%

112.2%

IA North American Smaller Companies

9.5%

35.9%

39.1%

129.6%

116.1%

Quartile rank

3

2

2

1

1

Threadneedle American Smaller Companies Fund performance chart

Source: Lipper Limited, bid to bid, net of fees, retail GBP share class, net income reinvested from 31 August 2005 to 31 December 2013. Sector universe of funds is those reporting net of UK taxes. †The benchmark was Russell 2000 until 31 March 2010 and S&P MidCap 400 thereafter. We have used the Russell 2000 index for the duration, which we think is the more appropriate index. The performance shown is for illustrative purposes only.

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 Smaller Companies Fund overview

Artemis US Smaller Companies Fund brochure

Artemis US Smaller Companies Fund KIID

Artemis OEIC funds prospectus

Risk warnings

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

The fund may invest in the shares of small and medium sized companies.

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.[BR/][BR/]

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