For over a decade a number of Artemis funds have based their investment process on an in-house quantitative system called Smart-GARP. The system aims to identify companies trading on below-average valuations which are experiencing upgrades to profit forecasts. The Artemis Capital Fund is one portfolio that uses the stock-screening tool and this has been to the benefit of recent performance.
- Exposure to medium-sized companies, which have held up well relative to their larger counterparts this year, has boosted returns. The manager has recently been reinvesting any profits from medium-sized holdings into FTSE 100 stocks. As such, exposure to larger companies has increased in recent months.
- In an environment of falling commodity prices, avoiding resources-related businesses has also helped recent performance. The fund currently has lower exposure to the basic materials and oil & gas sectors than the wider market.
- The manager is currently positive in his outlook for a number of non-bank financials companies. While banks have come under increasing regulatory pressure, other areas of the financials industry are playing catch up and growing faster than the rest of the market. Almost 30% of the fund is invested in the sector, with current holdings including Close Brothers and Paragon .
Our view on this fund
Although Philip Wolstencroft officially assumed control of this fund in July 2010, it has been managed according to the Smart-GARP model since September 2002. Since then it has delivered growth of 168%, compared with 159.7%* for the FTSE All Share index. That said, performance has been volatile, and past performance is not a guide to future returns.
|Annual percentage growth|
| Oct 10 -
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Past performance is not a guide to future returns. Source: Lipper IM * to 01/10/2015
While the fund's performance over the past few years has been encouraging, we believe funds that rely heavily on quantitative models often struggle in risk-off environments, or market turning points, as we have seen in the past. For this reason we are not currently considering the fund for inclusion on the Wealth 150 list of our favourite funds across the major sectors.