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Private investors

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
  • How to invest

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, 30 March 2017
Mid price (GBP acc shares)175.12p
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)

12 months to 31 December39.1%10.7%n/an/an/a
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

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 financial analysts than their larger peers, experienced investment managers can use detailed research 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 analysis of economic factors by the seven-strong Artemis US equity team to identify areas of the market that are benefiting from long-term trends shaping the US economy – and areas where conditions may be less favourable. The research process also draws on third-party research, detailed accounting analysis and company meetings.

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

  • 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 ‘ups and downs’ 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 peers.
  • Experienced team: collectively, Artemis’ US equity team has 56 years’ experience. Lead manager Cormac Weldon has over 20 years’ experience.

Reasons to consider

The fund may be suitable for investors looking for:

  • the potential for capital growth
  • exposure to the growth potential of smaller companies in the USA
  • an experienced fund manager with a good performance record

Introducing the fund

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

Risk considerations

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

  • This fund invests mostly in smaller (those under US$10 billion in size) and more recently established companies in the US that the manager believes have strong growth potential.
  • These types of businesses can be more vulnerable to financial or operational failure. As a result, you should consider this a riskier investment than, for example, investing in long-established or larger companies.
  • Investors should also 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 6, 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 may invest in the shares of small and medium-sized companies. Shares in smaller companies carry more risk than larger, more established companies because they are often more volatile and, under some circumstances, harder to sell. In addition, information for reliably determining the value of smaller companies – and the risks that owning them entails – can be harder to come by.

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.

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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