Our fund managers share their views on the markets and Artemis' funds.
22 Mar 2017
A word from Artemis
A historical question: has it been a better idea to buy markets when they are cheap relative to their own history – rather than expensive? A practical question: is this the beginning of a sustained rally?
Simon Edelsten, manager of the Artemis Global Select Fund discusses the risks involved in equity investing for the big investment house and the individual investors. He also explains how current market conditions are having an effect.
Artemis UK Select Fund review, year to 31 December 2016
The triggering of Article 50 and the start of the negotiations ahead of the UK’s departure from the EU will provoke many headlines in the year ahead. But the outlines of the divorce agreement, if one can be reached, are unlikely to be known until the end of the negotiating period in 2019.
Institutional UK Special Situations Fund review, year to 31 December 2016
We do not underestimate the task ahead. Markets are at multi-year highs, and the macroeconomic and political environments are changing rapidly. We believe there is little upside in the market in general (unsurprising given our comments last year) but feel value remains on a selective basis.
Institutional Global Capital Fund review, year to 31 December 2016
Rather than making sweeping statements about where the world is heading we prefer to focus on picking stocks whose specific characteristics make them attractive. This has served us well as managers of the fund over the last 11 years and we hope it will continue to do so for many years to come.
Institutional Equity Income Fund review, year to 31 December 2016
With wage inflation in the US already picking up, this was more than enough to rattle bond markets and prompt a rise in yields. That was echoed in the UK, where the weakness of sterling and the strong economy kindled fears about inflation and so undermined demand for government bonds.
Mid Wynd International Investment Trust review, six months to 31 December 2016
The Company performed well despite the unexpected political developments but lagged the index following its strong run higher after Mr Trump’s victory. Our holdings in Asia have been particularly subdued in the last couple of months, but we believe they offer very good value for 2017.
Artemis UK Smaller Companies Fund review, year to 31 December 2016
Hargreaves Services reported that its profits and cashflows would both be ahead of expectations. It is in the midst of transforming itself from its legacy business as a coal miner into an industrial services and property company. We feel this transformation has yet to be fully appreciated by the market.
2016 proved to be a year where those willing to take risk and go against the trend have been rewarded handsomely. Commodity and oil prices first stabilised and then rebounded, prompting a sharp reversal in performance for the energy and resources sectors
2016 was certainly a year to remember. Seismic political and economic ructions made markets difficult to navigate. With inflationary pressures building, Trump taking the presidential oath and negotiations on Brexit, the year ahead promises much uncertainty.
Artemis Global Select Fund review, six months to 31 October 2016
After a long wait, it seems that interest rates in the US are about to rise again and there are even prospects for a modest rise in inflation (with the potential to rise more sharply in the UK than elsewhere).
Artemis Capital Fund review, six months to 7 October 2016
Since the Brexit vote at the end of June, sterling has fallen by about 13% against a wide basket of currencies. With a good proportion of the UK stock market’s profits being earned overseas, this has boosted profits ...
Artemis European Growth Fund review, six months to 30 September 2016
There is no rule to say that stock markets must follow corporate profits up and down. But there is a tendency for subsequent returns to be above average when markets are cheap relative to underlying earnings ...
We are, as you know, stock-pickers – or even profit-hunters. Over the longer-term, we believe passionately that this approach will, as it has in the past, deliver the returns that you, our investors, expect – though past performance is no guide to the future.
Five years ago, amid political and macroeconomic uncertainty in Europe, we launched the Artemis European Opportunities Fund. Today, Mark Page and Laurent Millet discuss the fund’s five-year record. Also, what they look for in potential investments and which stocks they are favouring now.
Some investors back ‘value’ strategies, while others prefer ‘growth’. Simon Edelsten, manager of the Artemis Global Select Fund, takes both styles into consideration when he is picking stocks. He analyses which is offering the best opportunities at this stage of the cycle.
Artemis Global Equity Income Fund review, six months to 31 August 2016
The last six months brought an intensification of many of the trends that have dominated markets since the financial crisis. Monetary policy became even looser and QE in Japan, Europe and the UK expanded.
Artemis Global Emerging Markets Fund review, six months to 31 August 2016
Our research has shown that ‘value’ investing (investing in stocks that trade on a lower multiple than the market average) tends to work best when there is a wide dispersion of valuations in the market and value stocks have started to outperform.
Artemis Pan-European Absolute Return Fund review, six months to 31 August 2016
The market is still dominated by the actions of central banks. Despite beginning the period at very low levels, government bond yields generally fell still further. In Germany, investors must now pay the government for the privilege of holding their bonds.
Artemis US Absolute Return Fund review, six months to 31 August 2016
Bonds and bond proxies (equities whose dividends make them a substitute for bonds) performed well even as more economically sensitive sectors of the equity market outperformed. That unusual combination was described by some traders as an ‘everything rally’.
Artemis US Extended Alpha Fund review, six months to 31 August 2016
We remain positive on the fundamentals for videogame producers, whose growth is likely to far outstrip the rest of the media industry. They also benefit from margin improvement due to the move to digital distribution and the ability to increase revenue through online sales.
Artemis US Equity Fund review, six months to 31 August 2016
The portfolio has a bias towards stable companies with some combination of the following attractive financial characteristics: low levels of debt, high margins, some earnings growth and dividend yield.
Artemis US Smaller Companies Fund review, six months to 31 August 2016
At the moment, the US economy is growing, employment is increasing and wages are rising. While that is all positive news, the next six months will bring the US election, whose outcome remains highly uncertain.
Artemis US Select Fund review, six months to 31 August 2016
Having had no exposure to Apple, at the end of last calendar year we bought a position in anticipation of strong sales of the iPhone 7. Part of our optimism about the new phone was based on the fact that sales of the iPhone 6S had been particularly disappointing.
Strategic Assets Fund review, year to 31 August 2016
Economies are cyclical. This means there will inevitably be another recession in the developed world. How will the authorities respond? Traditionally they would have cut interest rates, but rates are already at or close to zero.
Artemis High Income Fund review, year to 7 August 2016
With valuations beginning to look stretched, we are cautious. Government bonds have rallied substantially over the last year. And with the global economy continuing to grow, we believe this rally could go into reverse.
Artemis Global Income Fund review, year to 31 July 2016
Our bias to value stocks is nothing new. As income managers looking for yield, we are always likely to have higher exposure to value (which tends to offer a higher yield but lower growth) than the wider market.
Artemis Global Energy Fund review, year to 31 July 2016
A football pundit would describe this year as a ‘game of two halves’. Through late 2015 and early 2016, OPEC’s inaction dragged down the price of oil and the energy sector. But oil companies responded by cutting costs and rethinking how they work.
As one asset manager in the US recently put it: “Investors are buying bonds for capital appreciation and stocks for income. The world has turned upside down.” These topsy-turvy market conditions have worried us for some time. As last week’s sharp rise in bond yields – and the equity market’s reaction – showed, stocks are not bonds and they shouldn’t be expected to behave as if they were.
Mid Wynd International Investment Trust review, year to 30 June 2016
Once we have identified an investment opportunity, we will only commit capital to it when its share price offers the chance to invest at a reasonable valuation. This valuation discipline is at the heart of all of our investment decisions.
Artemis Monthly Distribution Fund review, six months to 30 June 2016
Despite the persistent weakness in the equities of European banks, our cocos duly recovered over the coming months, benefiting the fund’s performance. We then reduced our position, locking in healthy profits.
Artemis UK Select Fund review, six months to 30 June 2016
We started the year with a cautious outlook, reflecting our concerns over slowing growth in emerging markets and in the expectation that the US Federal Reserve (‘Fed’) would move forward in raising interest rates.
Institutional UK Special Situations Fund review, six months to 30 June 2016
Even before the referendum, we were cautious on the outlook for corporate earnings. By creating uncertainty the leave vote increases the risk of a slowdown in the economy, giving managements an excuse to hold back from investing.
Institutional Equity Income Fund review, six months to 30 June 2016
Given that the outcome of Brexit was always uncertain, we had not positioned the portfolio for a particular outcome, aside from retaining 7% cash. That, though, said more about a global economy low on growth than it did about Brexit.
Cormac Weldon on corporate earnings: Mind the GAAP
The latest reporting season has sparked concerns on the ‘increasingly misleading’ measures of corporate earnings. Should investors be worried? Fund manager Cormac Weldon gives his view and sets out the implications for US equities.
US healthcare: how increased efficiency means opportunity for investors…
It is one of the (very) few things Donald Trump and Hillary Clinton agree on: the cost of healthcare in the US must be brought under control. Simon Edelsten, manager of the Artemis Global Select Fund, explains what this means for investors.
The UK’s domestic companies have been marked down (too?) hard, William Tamworth tells Artemis’ Ross Leckie. The Artemis UK Smaller Companies Fund continues to concentrate on companies which can produce a growing stream of recurring cashflows with high returns on capital.
Artemis European Opportunities Fund review, year to 30 April 2016
Several macroeconomic concerns weighed on sentiment at different stages during the year under review: a potential ‘hard landing’ in the Chinese economy; uncertainty about the impact of higher interest rates in the US; and political shocks from countries including Greece and Brazil.
How should investors view last Thursday’s vote? Clearly, the world is not about to end. Business continues. But it has changed things – particularly for Europe, for whom the consequences of a Brexit would be profound. That, in turn, has implications for the fund.
Simon Edelsten, manager of the Artemis Global Select Fund, examines the long-term trends that they have exploited since the fund’s launch five years ago. Looking ahead, he explains the stock-specific opportunities the team are finding.
Artemis European Growth Fund review, year to 31 March 2016
We identify the financial characteristics which have been good predictors of subsequent returns, then look for and buy the stocks that possess them. The outcome has not been too shabby – an outperformance versus the index of almost 2% per annum.
Part of the QE programme provided very cheap financing for banks. The fear was that negative interest rates in Europe would be disastrous for banks: they cannot charge investors for depositing funds, and yet if they deposit the funds with the ECB they will be charged money.
Through this period of uncertainty, the fund outperformed, returning 6.3% in sterling terms versus a 4.0% gain in its benchmark. As ever, we generated these returns through a mixture of good stock selection and sector allocation. It was particularly encouraging that our stock selection across a wide range of sectors was positive.
Strategic Assets Fund review, six months to 29 February 2015
Continually falling yields have resulted in stellar returns from bonds that are far in excess of their yields. For example, over the six-month reporting period the yield on 30-year Japanese government bonds (JGBs) fell by 54 basis points to 0.86%, resulting in a ‘return’ of about 14% to their holders.
US Extended Alpha Fund review, year to 29 February 2016
Defence stocks were among the strongest performers in the industrials sector. Over the course of last year, it became apparent the US Department of Defense was to increase spending in 2016 for the first time since 2010. Companies also returned more capital to shareholders.
US Absolute Return Fund review, year to 29 February 2016
As worries about deflation took hold, stability of earnings became particularly important. Telecoms, staples and utilities were thus the best-performing sectors of the market. We remained wary: investors have bid share prices up to high relative valuations and we found more attractive earnings streams elsewhere.
US Smaller Companies Fund review, year to 29 February 2016
In the fund, we took a view that it would be appropriate to have a bias towards companies able to grow their earnings autonomously (or at least keep them stable) rather than those dependent on the wider economy.
Through this period of uncertainty, the fund outperformed, returning 5.4% in sterling terms versus a 4.0% gain in the benchmark. As ever, we generated these returns through a mixture of good stock selection and sector allocation.
Pan-European Absolute Return Fund review, year to 29 February 2016
The fund has performed well over the last 12 months, returning 9.6% – significantly ahead of the 0.5% gain in its cash benchmark. It is some measure of how challenging the environment has been that the MSCI Europe Index fell by 6.5% in sterling terms – and by 12.9% in local currency terms .
Global Equity Income Fund review, year to 29 February 2016
As growth and inflation expectations continued to fall, our holdings in ‘bond proxies’ (stocks on whose dividends we can depend) increased. The carry trade (borrowing cheap money to buy higher yielding assets) is alive and well.
Global Emerging Markets Fund review, year to 29 February 2016
The volatility in emerging market equities does not worry us unduly. As investors who focus on the facts (as in the financial characteristics of companies), we rather think that higher volatility increases the potential to add value by being more rigorous and less emotional.
Artemis Global Energy Fund review, six months to 31 January 2016
In general, share prices across the oil sector tracked the price of crude throughout the period. They rose briefly in response to positive comments from OPEC and the Energy Information Agency (‘EIA’) but generally fell through to the end of January.
What has delayed the recovery in the price of crude? Has it bottomed at last? And when will it be ‘safe’ for investors to go back into oil & gas? The manager of the Artemis Global Energy Fund gives his views.
Institutional UK Special Situations Fund review, year to 31 December 2015
Indeed, this year’s selection of stumbling blocks – Greece, the UK general election, China, a collapse in commodity prices, terrorism and central bankers – make the prospect of a Tough Mudder seem appealing.
Institutional Global Capital Fund review, year to 31 December 2015
The fund enjoyed a good year. Its net asset value rose by 8.8%, compared with a 3.3% rise in the MSCI All Country World Index. Over five years, the fund has returned 82.4% versus a 42.7% gain for the benchmark.
The final stages of a sell-off can be the most interesting, says Simon Edelsten, manager of the Global Select Fund. It is not a matter of calling the ‘bottom’. Instead, investors should focus on selected stocks’ prospects over the longer term.
Jacob de Tusch-Lec, manager of the Global Income Fund, analyses a sell-off so “vicious” that the ‘hot’ stocks are underperforming emerging markets. What does it mean for the portfolio – now and in the months to come?
Artemis Global Select Fund review, six months to 31 October 2015
Over the last six months the MSCI AC World Index declined by 5.2% in sterling terms, while the fund fell by 0.4%. We have always positioned the portfolio with a view to protecting capital in difficult conditions.
European Opportunities Fund review, six months to 31 October 2015
Over the six months under review, the fund fell by 2.6% versus a decline of 5.7% in the benchmark. The challenge for stock pickers like us was to navigate through the volatility caused largely by macro events. In June, the focus was on Greece.
A US revolution: Investing in creative destruction
The theme of ‘creative destruction’, or the impact of new technology, gathered pace in 2015. But which companies make an attractive investment? Stephen Moore, manager of the Artemis US Extended Alpha Fund, reviews.
Political change and the ‘normalisation’ of interest rates mean 2016 is likely to be another interesting year. But what will it bring for equities – and bonds? Here, a number of Artemis' managers share their views.
Optimism is as American as baseball and apple pie. And since the financial crisis, being optimistic about US equities has paid off: they have outperformed every other major developed market by a comfortable margin.
US Select Fund review, six months to 31 August 2015
The fund fell over the six-month review period although the performance relative to its benchmark was strong. Driven almost exclusively by stock-picking, the fund outperformed the S&P 500 Index by a significant margin.
US Equity Fund review, six months to 31 August 2015
The fund produced a negative return over the period but held up better than the S&P 500 Index. This outperformance was due principally to strong stock selection, offset slightly by less successful industry allocation.
US Extended Alpha Fund review, six months to 31 August 2015
Over the past six months, the fund has generated alpha (an excess return relative to its benchmark) in both rising and falling markets. This was achieved through careful management of risk – the excess returns were significantly greater than its tracking error.
US Absolute Return Fund review, six months to 31 August 2015
Over the past six months, the fund has generated alpha (an excess return relative to its benchmark) in both rising and falling markets. This was achieved in parallel with careful management of risk – the excess returns were greater than its tracking error.
Pan-European Absolute Return Fund review, six months to 31 August 2015
Your fund performed well over the period. The net asset value rose by 9.0% in a weak market assailed by macro and political concerns. Over the same period, our peers in the IA Targeted Absolute Return Sector achieved an average of 0.9%, while the MSCI Europe Index (GBP) fell by 5.1%.
Cormac Weldon: a focus on growth, quality and sustainability in the US
Reacting to the Fed’s decision to hold interest rates, Cormac Weldon, Artemis’ head of US equities, talks to Portfolio Adviser about why he believes any short-term concern over the Fed’s decision should not be overdone.
It has been, to put it mildly, a frustrating six months for investors. As the graph below shows, equity markets fell over the period. In the six months to the end of September 2015, on a total return basis and in sterling, the FTSE 100 was down by
8.7%, the S&P 500 by 8.1% and the MSCI AC World by 10.9%.
Over the period, the fund produced a return broadly in line with the rise in the global market. At the same time, however, it significantly outperformed the majority of its peer group, where the average return was just 6.6%.
Institutional Global Capital Fund review, six months to 30 June 2015
The fund has had a very good start to the year, rising by 9.1% compared to a 1.8% increase in its benchmark, the MSCI All Country World Index. The longer term track record is just as strong: over the last five years the fund is up 18.3% per annum compared to a 10.7% benchmark return.
Institutional Equity Income Fund review, six months to 30 June 2015
Despite the significant differences in composition between the fund and the benchmark, they performed in a broadly similar fashion over the reporting period. The FTSE All-Share Index returned 3.0% while the fund returned 3.4%.
As investors takes fright at events in China, Simon Edelsten, manager of the Artemis Global Select Fund, recommends an opportunity for attractive growth in the developed world that does not depend on emerging markets.
Cormac Weldon: what do the latest US company results mean for investors?
This quarter’s results season in the US has been even more closely observed than usual. It could be the last before a rise in interest rates. Cormac Weldon, head of Artemis’ US equity team, talks through the latest figures, how his investment approach has benefited, and where he is finding opportunities.
Edelsten: restructuring Mid Wynd around long-term growth themes
A year after Artemis took over management of Mid Wynd International Investment Trust, Simon Edelsten tells Citywire Wealth Manager why he has increased the portfolio’s allocation to healthcare and the US.
After joining Artemis last year, Cormac Weldon launched the Artemis US Equity, US Select and US Smaller Companies Funds. A lot has happened in the US economy since – including a period of unexpectedly weak growth in the first quarter of this year. US stocks, however, have produced positive returns and all three funds are comfortably ahead of their benchmarks. Cormac looks back on the changes and explains why the funds are changing too.
In the five years since we launched the Artemis Global Income Fund, its manager Jacob de Tusch-Lec has built a distinctive portfolio that is first among its peers*. Here he explains why his “quality, cyclical and value yield” stocks, and flexible approach, leave the fund better placed to benefit from uncertainty than funds that depend on the classic income payers.
European Opportunities Fund review, year to 30 April 2015
The fund performed well over the year, returning 9.8% versus 7.0% from the FTSE World Europe (ex-UK) Index and a 6.6% average by its peers. Since launch in October 2011, it has returned 62.3%* versus the 49.2% produced by the benchmark.
European equities and QE: the trillion-euro question
In this ‘Hunters’ Talk’, Mark Page, manager of the Artemis European Opportunities Fund, considers the valuations of European equities, asks what effect quantitative easing (QE) is really having and explains how – and where – he is investing.
The fund enjoyed a good year, returning 28.3% and outperforming the MSCI AC World Index by almost 8%. Annualised returns since the end of 2003, when we began managing this fund using SmartGARP, Artemis’ proprietary stock screening tool, stand at 11.2% (after fees).
The fund returned 4.8% for the year. Our peer group averaged 6.6% and the Markit iBoxx Sterling non-gilts Index returned 13.1%. Long bonds did well in the year under review. Our more cautious strategy of avoiding this area did not pay off this year - though it did last year.
European Growth Fund review, year to 31 March 2015
We launched this fund 14 years ago. Over that period the people and processes involved in managing the fund are largely unchanged. Since inception the fund has returned 171.9% whilst the market has returned 108.9%.
In the wake of US Federal Reserve chief Janet Yellen saying that US equities look fully valued, Artemis US equity manager Cormac speaks to Morningstar’s Emma Wall about whether it’s time to sell US equities.
Something is happening in global markets. Fashionable sectors have fallen out of favour. Cheap and unloved stocks are suddenly attractive. German bund yields have jumped higher. European equities have sold off. Trend-following strategies have struggled. All this suggests instability. Artemis Global Income manager Jacob de Tusch-Lec discusses what is causing it and how investors should respond.
Artemis Global Income: favouring Europe over the US
With a 10% return* from his Global Income Fund in the first three months of 2015, Jacob de Tusch-Lec talks to journalist Alexis Xydias about the drivers and why he favours Europe and Asia over the USA.
US Smaller Companies Fund review, launch to 28 February 2015
Given the predominant influence on the US stockmarket of accommodative monetary policy and other macro-economic factors, the period has not been a naturally fertile one for active stock-pickers such as we are.
We regard the fund’s return over the period as satisfactory. Given the predominant influence on the US stockmarket of accommodative monetary policy and other macroeconomic factors, the period has not been a naturally fertile one for active stock-pickers such as we are. As we explain in the outlook section below, we expect this situation to change through 2015 and beyond.
Pan-European Absolute Return Fund review, launch to 28 February 2015
The fund’s net asset value rose by 1.0% from its launch on 14 July 2014 to the end of February 2015. While this was a fairly pedestrian outcome against the peer group, the headline figure masks two quite different periods of performance.
US Extended Alpha Fund review, launch to 28 February 2015
The fund performed in line with our expectations, outperforming the index. As economic growth around the world slowed, fundamentals in energy and energy-related stocks deteriorated. The fund beneftted from that deterioration. At the same time, however, pricing concerns hurt some of our pharmaceutical stocks
We regard the fund’s return over the period as satisfactory. Given the predominant influence on the US stockmarket of accommodative monetary policy and other macroeconomic factors, the period has not been a naturally fertile one for active stock-pickers such as we are. We expect this situation to change through 2015 and beyond.
US Absolute Return Fund review, launch to 28 February 2015
The fund generated a positive absolute return over the period, outperforming its LIBOR 3 month benchmark. As economic growth around the world slowed, fundamentals in energy and capital goods stocks deteriorated. The fund benefited from that deterioration
The Owl of Minerva – Monetary policy and the unknown unknowns
Higher US rates will result in trickier market conditions, says fund manager Simon Edelsten of Artemis Global Select. But there are ways to protect capital and still make worthwhile investments. Simon calls it the Donald Rumsfeld defence.
Global Income Fund review, six months to 31 January 2015
The fund returned 10.4% versus 9.9% for the benchmark and 7.0% for the sector average. The negatives were more than offset by a number of good decisions. We sold our oil holdings at the right time and hedged the fund’s currency exposure.
Global Energy Fund review, six months to 31 January 2015
In general, the news from the fund’s holdings was good: there were no shocks, and reserves have increased. But the fund’s performance over the period was correlated closely with the unexpected and savage fall in the price of oil.
Institutional UK Special Situations Fund review, 12 months to 31 December 2014
We recognised that 2014 would be a tough year, with higher valuations, earnings downgrades and the spectre of rising interest rates. In that context, the fund’s return is a good result and continues its record of outperformance.
Institutional Global Capital Fund review, 12 months to 31 December 2014
Our fund enjoyed a good year in 2014. Its net asset value rose by 18.7%, compared with a 10.6% rise in the MSCI World All Country index. Over the last five years, the fund has returned 105.6% versus 59.3% from the benchmark.
Institutional Equity Income Fund review, 12 months to 31 December 2014
The fund returned 5.1%, which compares favourably to the 1.2% return produced by the FTSE All-Share Index. This outperformance reflected strong returns from a number of holdings, with three of the largest contributions coming from Novartis, Imperial Tobacco and 3i.
Philip Wolstencroft, Artemis Capital Fund manager, comments on the UK stocks and sectors the SmartGARP system is highlighting at present. He also comments on the attractiveness of oil stocks in the UK.
Monthly Distribution Fund review, year to 31 December 2014
The fund outperformed the sector, returning 8.3% compared to a sector average of 4.3%. Over the 12 months under review, we believe we have succeeded in our task, generating an attractive monthly yield while also delivering capital growth.
UK Special Situations Fund review, year to 31 December 2014
We always recognised that 2014 would be a tough year, with higher valuations, earnings downgrades and the spectre of rising interest rates. We had hoped, however, to have produced a better relative result. That said, over the past three years the fund has produced a return of 50.9% against 37.3% from our benchmark.
In his latest Hunters’ Talk, Jacob de Tusch-Lec explains why he believes European stocks may be at an inflection point and describes how – and why – he has positioned the Artemis Global Income Fund to benefit from €1 trillion of asset purchases by the ECB.
The fund rose by 1.4% over the six months. Given that there was plenty for markets to worry about, and that any pockets of cheer were isolated, this resilience was welcome. The FTSE All-Share Index fell by 1.6% over the same period.
Global Select Fund review, six months to 31 October 2014
Although equity markets became unsettled over the six months in question, global stocks have continued to deliver attractive returns. The MSCI All Country World Index returned 8.0% in sterling terms. Despite our continued conservatism, the fund’s unit price rose by 6.8%, and placed us in the second quartile of our peers.
European Opportunities Fund review, six months to 31 October 2014
Over the six months, the fund fell by 4.1%. That was in line with the benchmark, yet better than the sector average. Three years on from its launch, your fund is ahead of European indices and has performed significantly better than the average fund.
Despite a patchy recovery across Europe, Paul Casson, manager of the Artemis Pan-European Absolute Return Fund, says it is difficult to be bearish with a weaker currency, supportive central bank and low interest rates.
Adrian Frost: “brighter spots” for consumers in 2015
With consumers under continuous pressure for the past six years, Adrian Frost, manager of the Artemis Income Fund, thinks that falling oil and commodity prices should offer some brighter spots in the year ahead.
European Growth Fund review, six months to 30 September 2014
Over the six months under review, European markets fell by 2.3%. The fund, meanwhile, fell by just over 4.0%, gross return. Since we launched it in 2001, the benchmark has risen by up 90.0% while your fund has returned 147.6%.
As we see the interim and annual reports for their funds come through, a number of Artemis’ managers are feeling positive: not perhaps on markets as a whole, but on the opportunities for stock-pickers in markets such as these. Here, four of our managers give their views on the current state of the markets.
James Foster: attractive fixed income opportunities still to be found
With economic forecasts turning out off-target, Artemis Strategic Bond Fund manager James Foster discusses the impact on his fund’s portfolio and where he’s looking in the bond markets for attractive opportunities.
The fund recently celebrated its fourth anniversary. We would like to thank unitholders for entrusting us with their money over the last four years. Since its launch in July 2010, the fund has rewarded that trust with a total return of 82.8%. That compares with a return of 51.8% from the sector and 48.6% from the benchmark, the MSCI All Country World NR Index.
The fund returned 0.1% over the year. That compares with 3.2% from the specialist sector average and 5.5% from the benchmark, the MSCI ACWI Energy (GBP) Index. That said, many of the constituents of the benchmark are large, integrated majors which we didn’t and don’t own.
There have been 44 bull markets since 1928. Up to the end of August, the present bull market was the fifth-longest since that year when the volcanic island of Anak Krakatau first appeared - and Leon Trotsky found himself banished to Alma-Ata.
Institutional Equity Income Fund review, six months to 30 June 2014
Returns in the first half of 2014 were modest, with the FTSE All-Share Index returning 1.6%. Given the market’s strong performance over the last couple of years, it was little surprise that returns were somewhat muted: share prices have risen faster than company earnings and the market no longer looks undervalued. Over the same period, your fund returned 2.4%.
Institutional Global Capital Fund review, six months to 30 June 2014
The fund enjoyed a good start to the year, rising by 5.8% compared to a 2.9% increase in its benchmark, the MSCI All Country World Index. Its record over the longer term is also strong: over the last three years, the fund is up 12.3% per annum compared to an 8.0% return from the benchmark.
Secure in the boons of central bankers, markets have entered the summer in a state of almost Zen-like calm. The S&P 500 is now up 191% since the beginning of the bull market on 9 March 2009. That exceeds by 26% the same index’s previous record high on 7 October 2007.
Alpha Trust reports 13.3% net asset value increase in its latest annual report
Over the year to 30 April 2014, the Company’s net asset value rose by 13.3% compared to a 10.5% increase in the FTSE All-Share Index. This was a significant improvement on the previous year, when the value ascribed to a number of the Company’s unquoted holdings was written down, weighing on the Company’s relative returns.
Derek Stuart on valuations, earnings, M&A and small-caps
Artemis UK Special Situations Fund manager Derek Stuart considers the state of the UK market, the attractiveness of UK equities, the volume of mergers-and-acquisitions activity and the prospects for smaller companies.
Positive returns and outlook for global growth stocks
With expected market events not happening, Peter Saacke reports that for the average global investor, there have been “plenty of opportunities to lose money” over the last six months. He’s happy to report that his Global Growth Fund has bettered its peers and its benchmark.
European Opportunities Fund review, year to 30 April 2014
The fund lagged slightly behind this year, returning 13.6%, versus 14.8% for benchmark. However, it is still outperforming since launch. Fund managers Mark Page and Laurent Millet believe their use of derivatives detracted from performance, but remain optimistic.
The fund managers’ cautious approach to long-term investment was not rewarded, and the fund returned -0.2% versus 5.4% from its benchmark. The fund has still outperformed the sector since inception, returning 26.1% compared to a sector average return of 24.0%.
Artemis Global Income: a half-time report – stock selection trumps ‘pain trades’
So far this year, the Artemis Global Income Fund has outperformed both its benchmark and its peers rather handsomely. Interestingly, however, it has outperformed despite macro factors not playing out as many investors had expected...
Global Energy Fund review, six months to 31 January 2014
In their six-monthly review, the managers report that the fund fell by 11.2%. They attribute this to the adverse sentiment in the energy sector, and remain committed to carefully chosen exploration and production stocks.
Separating the wheat from the chaff in global investing
The start of 2014 has been marked by near-constant change on a corporate, macro and geopolitical level. This daily barrage of news can seem vitally important at the time. But its impact on long-term investment returns is often limited.
So how do long-term investors, like Simon Edelsten, manager of the Artemis Global Select Fund, filter the short-term noise for important new information?
Institutional UK Special Situations Fund review, 12 months to 31 December 2013
Over the year, the fund returned 32.6% compared to a 20.8% increase in the FTSE All-Share Index. On the face of it, this was a fair result. The outperformance of smaller stocks relative to FTSE 100 companies was significant.
Institutional Equity Income Fund review, 12 months to 31 December 2013
The return from your fund in 2013 was 26.9% compared to a return of 20.8% from the FTSE All- Share Index. This return is especially pleasing given the fact that it follows the double-digit return produced 2012 – and that 2013 was widely supposed to be a ‘difficult’ year.
UK Smaller Companies Fund review, year to 31 December 2013
Investors in UK smaller companies enjoyed excellent returns in 2013, with the second half of the year even better than the first. Despite the very healthy 30.2% return on the fund, we were disappointed not to have made headway against the benchmark.
Monthly Distribution Fund review, year to 31 December 2013
We are very pleased with the return that the fund produced over the year. The average return from the funds in our peer group was 8.8%. The Fund, however, generated a return of 17.1% – a significant degree of outperformance.
As the year progressed, multiples expanded ahead of the earnings recovery. This is standard procedure for this stage in the stockmarket cycle. More importantly, it gave us a healthy backdrop against which to invest. For the fund, the result was a very pleasing 36.4% return.
Are the bears back? January, certainly, was a sobering month for investors worldwide. No-one likes to see £1.5 trillion taken off the value of the world’s equities, as happened last miserable month. But those of us who were around in 1997, when the Thai baht went into batter and contagion spread, think that the sell-off was more panic than prudence.
The three ‘p’s of fund management, (in)famously, are ‘performance, performance and performance’. It is gratifying to be able to review a further period in which some 70% of our funds have outperformed both the market and their peers.
‘Artemis Accounts’, our six-monthly update for investors, examines what has been happening in the markets, and why; and looks to what we think the future holds.
Five years ago this month, the cabal controlling Lehman Brothers capitulated – and the rest, as they say, is history. What policy-makers and markets have achieved since then is astonishing. They have recovered from the biggest financial collapse since the Great Depression. Among other things they have overcome crisis in the eurozone, the US ‘fiscal cliff’ and tension in the Middle East.
Institutional Global Capital Fund review, six months to 30 June 2013
The fund had a good start to the year, rising by 16.5% compared to a 13.7% increase in its benchmark, the MSCI All Countries World index. Its long-term track record remains strong, too: over the last three years the fund is up 18.3% per annum compared to a return of 11.7% from the benchmark.
To the end of April, the UK market has gone up for 11 consecutive months. This has never happened before since the FTSE’s birth in 1962. In this month’s ‘Market Matters’, we consider such predictive powers as history affords ...
Confounding the sceptics and underwritten by central banks, stockmarkets around the world have gone up in the past six months. ‘Artemis Accounts’, our twice-yearly review for investors, reviews what has been happening, and why, over the last six months; and looks to what we think the future holds.
Institutional Equity Income Fund review, December 2012
The continued economic difficulties in Europe and the threat of a ‘fiscal cliff’ in the US do not sound like ingredients for a double-digit return from the FTSE All-Share Index. Yet that is exactly what transpired in 2012, with the market returning 12.3%. Your fund returned 15.1% before fees.
Institutional Global Capital Fund review, December 2012
The fund has enjoyed an excellent year. Its net asset value rose by 18.5%, compared with an 11.0% rise in the MSCI All Countries World Index. Over three years, the fund is up 38.0% versus a 19.5%* gain for the benchmark.
Issued by Artemis Fund Managers Limited which is authorised and regulated by the Financial Conduct Authority.
The intention of Artemis' 'investment insights' articles is to present users with objective news, information, data and guidance on finance topics drawn from a diverse collection of sources. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by Artemis or any third-party. Potential investors should consider the need for independent financial advice. Any research or analysis contained in this document has been procured by Artemis for its own use and may be acted on in that connection. The contents of the document are based on sources of information believed to be reliable; however, save to the extent required by applicable law or regulations, no guarantee, warranty or representation is given as to its accuracy or completeness. The document may include forward-looking statements which are based on Artemis' current opinions, expectations and projections. It is provided to you only incidentally, and any opinions expressed are subject to change without notice. The source for all data is Artemis, unless stated otherwise.
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