Artemis UK Smaller Companies: November 2025 fund update

We have a positive view of managers Mark Niznik and Will Tamworth who are both highly capable and experienced in UK Smaller Companies

The fund’s higher quality approach and focus on valuation means that we expect it not to fall as much as some other funds during down markets.

The managers work as part of a broader UK equities team at Artemis that we rate highly

The fund features on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Artemis UK Smaller Companies fund aims to grow an investment over the long term by investing in the smaller parts of the UK stock market. The valuation focused approach means the fund invests differently to many of its peers in the IA UK Smaller Companies sector.

Smaller companies typically have more growth potential than larger ones, though they can be more volatile and higher risk. Companies of this size are often overlooked by analysts, meaning there are plenty of opportunities for investors prepared to scratch below the surface.

The fund could add diversification to the UK portion of an adventurous global portfolio or could complement a UK portfolio that is focused on larger, more established businesses.

Manager

The fund’s co-managed by Mark Niznik and Will Tamworth.

Niznik began his career at Legal & General in 1985, followed by a stint as a private client fund manager at Greig Middleton & Co. In 1992, he joined Perpetual, working on a range of UK smaller companies products. He then moved to Standard Life Investments in 2002 to work as a small and mid-cap fund manager, running a UK Opportunities strategy from its launch. In 2007, he joined Artemis and became co-manager of the UK Smaller Companies fund alongside seasoned investor and Artemis co-founder John Dodd. In January 2011, Dodd stepped back and Niznik became sole manager of the UK Smaller Companies fund.

Tamworth began his career at Citigroup as an equity research analyst in the UK small and mid-cap team. He moved to Liberum in 2009, where he continued to work in small- and mid-cap equity research, specialising in support services. He then joined Artemis in 2015 and in March 2016 became co-manager of the UK Smaller Companies fund.

We have a positive view of both managers. They are both highly capable and experienced in investing in this part of the market, and we believe their workload in managing this fund and an investment trust is manageable.

Meet the manager: Will Tamworth

Process

The managers believe smaller companies possess lots of growth potential. They aim to use their experience to uncover hidden gems and then benefit from investing in them as they grow in this under researched part of the market.

Niznik and Tamworth look for businesses that are leaders in their markets and have a good degree of visibility of their future earnings. These businesses should have strong balance sheets to support their growth and be driven by capable and experienced management teams. They should also be cash generative, and trade at attractive valuations, offering investors the prospect of good returns in the future. Not every stock will fulfil each of these criteria, so the managers are pragmatic in forming an overall view on how well a company fits the bill.

The managers won’t invest in companies that are pre-revenue because of their focus on cash generation. They are also sceptical about the prospect of investing in small businesses with very ambitious growth projections attached to their future performance expectations. The outcome of this process is a value style bias.

This process leads them to a portfolio of 60-90 stocks, with individual company position sizes generally not exceeding 3% of the fund. In terms of sector allocations, consumer discretionary and industrials are currently the largest exposures, representing 31.3% and 27.2% of the fund respectively. Public services contractor Serco Group and price comparison business Moneysupermarket.com are among the fund’s largest individual positions.

The managers have made some changes to the fund in recent months, including initiating a new investments in Greggs. They feel that Greggs’ balance sheet strength gives them scope to continue rolling out new stores at a time when some shorter term headwinds have overly affected the share price. The fund’s positions in other consumer facing businesses like Dunelm, Wickes and JD Wetherspoon were trimmed in order to fund the Greggs position.

Culture

Artemis provides an attractive environment for fund managers, allowing them the freedom to run money how they see fit without imposing a house view on them. It’s also a collegiate atmosphere, with managers supporting and challenging each other. The managers of the fund are partners in the business. We think this structure is a good thing for investors, as the managers and the firm are focused on the long term and can run funds without distractions from short-term shareholder demands. They are rewarded from the profits of the business, based on their long-term fund performance and payment of the profit share can be deferred over several years.

ESG Integration

Investment teams across Artemis are encouraged to think for themselves and invest according to their own style, so approaches to ESG integration across the firm vary. Recent meetings with the Artemis teams we back on the Wealth Shortlist suggest ESG is an important factor. However, this fund isn’t managed to a responsible mandate.

Artemis has a firm-wide policy to support the aims of international conventions on cluster munitions and antipersonnel mines and therefore the firm will not knowingly invest in companies which produce these weapons.

Artemis votes on all their holdings, unless restricted from doing so, and fund managers engage with firms to develop their understanding, raise issues with management and monitor subsequent developments. The firm provides engagement case studies, and other information about its engagement and voting efforts, in an annual Stewardship report. Artemis also provides a monthly voting summary which includes rationales for votes against management and abstentions. Stewardship activity is carried out in line with the firm’s comprehensive voting and engagement policies.

Cost

The fund has an annual ongoing fund charge of 0.86% but through HL, clients can secure an ongoing saving of 0.09%, reducing the net ongoing charge to 0.77%. This reduction is paid as a loyalty bonus, which could be taxable if held outside of an ISA or SIPP wrapper. The HL platform fee of up to 0.45% a year also applies, except in the HL Junior ISA, where no account charge applies.

Performance

Since Niznik became lead manager of the fund in January 2011, the fund has delivered returns of 274.09%* compared with 195.08% for the IA UK Smaller Companies peer group average. Past performance isn't a guide to the future.

The fund has a value focused investment strategy. Its higher quality approach and focus on valuation means that we expect it not to fall as much as some other funds during down markets, providing some shelter from the worst of market falls. However, this does mean we think the fund could lag its growth focused UK smaller companies peer group in a strongly rising market.

Over the last 12 months, the fund has delivered returns of 3.64%, compared with a return of -3.03% for the UK Smaller Companies sector average.

Our analysis suggests that the fund’s investments in consumer staples and utility businesses have been among the better performing areas of the portfolio. Additionally, having less invested in the materials and real estate sectors has aided relative performance. On the other hand, its investments in technology and communication companies has been one of the key detractors from performance.

As of the end of September, the fund yields 1.82%. Income isn’t guaranteed, and yields aren’t a reliable indicator of future income.

Overall, we think the managers have the experience, skill and support to deliver good long-term returns to patient investors, although there are no guarantees.

Investments fall as well as rise in value, so investors could get back less than they invest. Investing in smaller companies is higher risk and investors should invest for the long term and be prepared for volatility along the way.