- Ed Legget joined Artemis in 2015, taking over the UK Select Fund from Tim Steer
- He seeks undervalued companies, whose future prospects are often underrated by other investors
- The manager is gradually putting his own stamp on the portfolio
Our view on this fund
Ed Legget took over management of the Artemis UK Select Fund (previously Artemis UK Growth) at the end of 2015. He was previously a member of the UK Equity Team at Standard Life where he managed the UK Equity Unconstrained Fund from April 2008 to June 2015.
The Standard Life fund featured on the Wealth 150 list of our favourite funds across the major sectors throughout Ed Legget's tenure. Over this time the fund delivered a strong return of 205.4%* compared with 55.7% for the FTSE All Share Index, although please remember past performance is not a guide to future returns.
|Annual percentage growth|
| April 11 -
| April 12 -
| April 13 -
| April 14 -
| April 15 -
|Standard Life UK Equity Unconstrained||-2.5%||33.5%||26.6%||5.0%||-5.1%|
Source: Lipper IM to *01/04/2016. Past performance is not a guide to future returns.
Ed Legget previously had the support of Standard Life's well-resourced and highly-experienced UK team, with ideas for the fund produced by all team members. He will now work with the broader team of UK equity managers at Artemis. However, we feel Artemis' funds are more reliant on the talents of individual managers rather than the team-based approach used at Standard Life.
We believe Ed Legget has the capabilities to deliver good long-term returns for investors. That said, we would prefer to see how the manager settles in a new working environment and team before considering the fund for inclusion on the Wealth 150. We will continue to monitor the fund and inform investors if our views change.
Ed Legget has so far made few changes to the Artemis UK Select Fund, which he felt was in good shape upon taking over the portfolio. Indeed, around a quarter of the portfolio overlapped with the fund he previously managed at Standard Life.
That said, his predecessor, Tim Steer, was a growth investor, focusing on companies with good earnings growth momentum. Ed Legget, however, places greater focus on valuation. His investment style is contrarian in nature, meaning he tends to focus on undervalued and out-of-favour companies, but where he sees the potential for positive change on the horizon. Given the differences in the managers' investment styles, we would expect to see further portfolio changes, although these are likely to be gradual.
A focus on value means Ed Legget has recently taken a closer look at the oil & gas sector, which has been through a torrid time in recent years. He recently purchased Tullow Oil and topped up the fund’s existing holding in BP, one of the fund's largest holdings.
Elsewhere, exposure to the financials sector has increased and is currently the fund's largest sector weighting at almost 28%. Ed Legget is positive in his outlook for a number of insurers, such as Aviva, which are paying attractive yields, as well as banks, including Lloyds, which he feels is in a good position to pay dividends.
On the other hand, he has sold a few holdings no longer as attractively-valued following a strong period of performance. This includes AstraZeneca and GlaxoSmithKline.
The fund has also maintained its ability to 'short', which offers the manager the opportunity to profit from falling share prices, although if the manager makes the wrong calls the fund will fall in value. The portfolio is currently 6.7% short, although the permitted maximum is 10% of the fund's net asset value. Ed Legget does not, however, have any track record in using shorting so we will be monitoring this portion of the portfolio closely.
The fund is a concentrated portfolio, which means each holding can make a significant impact on returns however this is a higher-risk approach.