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Private investors

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
  • How to invest

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, 22 March 2017
Mid price (GBP acc shares)173.70p
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)

12 months to 31 December31.8%15.2%n/an/an/a
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

The Artemis US Extended Alpha Fund is a ‘long/short’ fund. Designed to outperform the American S&P 500 stockmarket index, it combines a traditional portfolio of ‘long’ US stocks (where the manager expects a company’s share prices to rise) with a portfolio of ‘short’ positions (where he aims to make money from an anticipated fall in a share’s price).

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 invest in around 150 individual carefully researched ‘best ideas’ companies across its long and short portfolios.

The result is a more complex fund than those that buy shares solely with a view to them growing in value over time. With complexity comes increased investment risk.

  • A larger opportunity set: traditional long-only funds can seek to profit only from shares that are likely to rise. But this fund's structure looks to profit from falling, as well as rising, share prices.
  • Robust investment process: the seven-strong Artemis US equity team has a tested investment process, with research drawing on multiple information sources.
  • Flexible approach: manager Stephen Moore takes a flexible, practical approach to stock-picking, adapting the fund's investment style with the goal of beating the S&P 500 index across ups and downs in the economy and stockmarket.

Reasons to consider

The fund may be suitable for investors looking for:

  • exposure to the growth potential of US equities
  • capital growth over the long-term
  • a fund which uses complex and technical investment instruments to achieve its objectives

Fund manager

 Stephen Moore


Stephen holds a BComm and a BA from the University of Queensland and is an associate of the Securities Institute of Australia.  He began his career at First State in 1997, where he worked on the North American team, progressing to portfolio manager in 2001. In 2002 he joined Threadneedle to manage a number of the company’s segregated US portfolios. In 2004, he became deputy manager of Threadneedle’s US hedge fund. Stephen launched the Threadneedle American Extended Alpha Fund in 2007 and launched the Threadneedle American Absolute Alpha Fund, a UCITS long/short fund, in 2010. Stephen joined Artemis in 2014 and has managed the Artemis US Extended Alpha Fund since launch in September 2014.

Risk considerations

Before making an investment, investors should consider the level of risk they’re comfortable taking with their money.

  • This fund tries to identify shares that will fall in value. To do this, the manager will use derivatives (financial instruments whose value is linked to the expected price movements of an underlying asset). Investing in derivatives carries risks; in the case of a ‘short’ position, for example, if the price of the underlying asset doesn't fall in value as the manager expected, but instead rises, the fund will lose money.
  • The manager may also use borrowing from time to time to increase the amount of money he can use to invest in both shares and derivatives, which can further increase the level of risk.
  • As well as these specific risks, investors should be aware that the usual risks of investing in shares apply. Companies and stockmarkets can go through periods of turbulence and the value of your investment can fall.
  • This fund’s ‘SRRI’ risk rating, a measure of how volatile the fund’s performance has been over time, is currently 5, in a range of 1 (lower risk) to 7 (higher risk).

More detailed information on fund risks is included in the ‘risk warnings’ section below.

Risk warnings

To ensure you understand whether this fund is suitable for you, please read the Key Investor Information Document, which is available, along with the fund’s Prospectus, from

The value of any investment, and any income from it, can rise and fall with movements in stockmarkets, currencies and interest rates. These can move irrationally and can be affected unpredictably by diverse factors, including political and economic events. This could mean that you won’t get back the amount you originally invested.

The fund’s past performance should not be considered a guide to future returns.

The fund will use derivatives (financial instruments whose value is linked to the expected price movements of an underlying asset) for investment purposes, including taking long and short positions, and may use borrowing from time to time. It may also invest in derivatives to protect the value of the fund, reduce costs and/or generate additional income. Investing in derivatives also carries risks, however. In the case of a ‘short’ position, for example, where the fund aims to profit from falling prices, if the price of the underlying asset rises in value, the fund will lose money.

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

Artemis Fund Managers Limited is entitled to a performance fee calculated as 20% of any outperformance of the share class against the S&P500 index. The performance fee is accrued daily but only charged at the end of the fund’s financial year if conditions are met. Any underperformance will be carried forward into the next financial year and must be recovered before any performance fee can be paid.

The historic yield reflects distribution payments declared by the fund over the previous year as a percentage of its mid-market unit/share price. It does not include any preliminary charge. Investors may be subject to tax on the distribution payments that they receive.

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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