Artemis US Smaller Companies Class I - Accumulation (GBP)

Since joining Artemis to launch the fund in October 2014, Weldon has delivered attractive returns for investors. Our analysis suggests Weldon's stock picking has added value for the fund, particularly in the consumer discretionary sector. Please remember past performance isn't a guide to the future.

Cormac Weldon believes stock market prices don't always reflect the true worth of companies, especially smaller ones. That gives him the opportunity to find businesses that've been underestimated or overlooked by other investors but he thinks have great potential. Smaller businesses are often among the most innovative and offer lots of growth potential, but they're higher risk than their larger counterparts.

Weldon looks to invest in companies that he thinks have a 2:1 ratio of upside potential versus downside risk from the current market price. He does this by identifying what really drives the company. His team then spend time modelling what could happen to their profitability and growth over time, as they are likely to have the greatest impact on its valuation in the future. He then builds the portfolio with these ratios in mind, with the companies where upside potential significantly outweighs the downside risk likely to justify larger position sizes in the fund.

Regularly meeting company management is important to Weldon and his team. They think this is one of the best ways to deepen their understanding of the business model and assess the quality of the management team.

Weldon also considers how the US economy is performing to identify sectors that are benefiting from trends, as well as the areas that are finding things tough. This can help him decide how much to invest in a sector, although he won't invest beyond 10% more or 10% less than its weight in the Russell 2000 index. Single investments are also limited so their weight in the portfolio doesn't differ too much from their weight in the benchmark. In practice though the fund and the benchmark will look different as the fund only invests in 40-60 companies out of the thousands that make up the index. Weldon believes the sector and stock level limits provide him ample freedom to reflect his convictions whilst also ensuring a good balance of investments. Holding a smaller number of investments can increase risk, as each has a larger impact on performance.