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Artemis Pan-European Absolute Return Fund

All data as at 28 February 2017 except where specified
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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 Europe, including the UK.

Current prices and yield
(class I)

As at noon, 22 March 2017
Mid price (GBP hedged acc shares)120.09p
Historic yield (GBP hedged acc shares)0.00%

Investment information
(class I)

Minimum lump sum investment£250,000
Ongoing charge (GBP acc hedged 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). 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

February was an interesting month for European equities. For the first time since last summer ‘bond proxies’ (stocks whose predictable dividends make them a good substitute for bonds) and expensive stocks whose earnings grow slowly but predictably performed well. This, unsurprisingly, came alongside a rapid fall in German bund yields. What made these moves so unusual was the fact that economic data continued to improve.

The oil services sector is an area of particular interest for us. Although expectations are very depressed, more and more signs of a pick-up in demand across the sector are emerging.

We are yet to see a convincing explanation of the sudden downwards move in bund yields. It cannot just be fear of the French election, which investors have known about for some time. More likely it is an unwelcome consequence of the ECB’s purchases of bonds which is making bunds scarce. To us, this signals that the end of quantitative easing in Europe is getting closer. Perpetually low interest rates were never the intention and with inflation picking up they are deeply undesirable.

This shift back towards defensive areas of the market meant the fund gave back some of the strong gains it made during the previous seven months. Volatility like this is always present during a change of leadership in the market. Although we never like losing money, we have made sure we have plenty of buying power in the fund to take advantage of temporary sell-offs. This is exactly what we did during the month, adding to a wide range of existing positions. These were mainly banks, energy and construction companies, many of which have reported strong results. The oil services sector is an area of particular interest for us. Although expectations are very depressed, more and more signs of a pick-up in demand across the sector are emerging. In the short book, we are happy with our current exposures so activity here was more muted. On balance, our short book will remain smaller than our long book. This is reflective of where we are currently finding our best ideas.

14 September 2016

Paul Casson: Opportunities abound …

Central banks continue to dominate markets. Underneath that, though, there is considerable rotation between sectors in Europe, says Paul Casson.

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

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

Data from 14 July 2014. Source Lipper Limited, class I GBP hedged 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)

12 months to 31 December5.1%14.0%n/an/an/a
12 months to 28 February7.2%9.4%n/an/an/a
Please remember that past performance is not a guide to the future. Source: Lipper Limited, accumulation units, bid to bid in sterling. All figures show total returns with dividends reinvested. As the fund was launched on 14 July 2014, complete five year performance data is not yet available.

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Paul Casson: Opportunities abound …

Security Code

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 0.25%. 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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