Artemis SmartGARP European Equity Fund
Q2 2025 update
Source for all information: Artemis as at 29 June 2025, unless otherwise stated.
This is a marketing communication. Before making any final investment decisions, and to understand the investment risks involved, refer to the fund prospectus (or in the case of investment trusts, Investor Disclosure Document and Articles of Association), available in English, and KIID/KID, available in English and in your local language depending on local country registration, available in the literature library.
The fund’s objective is to grow capital over a five-year period.
Performance
The Artemis SmartGARP European Equity Fund had a strong second quarter, rising 13.8% in the three months to 30 June 2025, while its FTSE World Europe ex UK benchmark1 climbed 6.1%2. Over one, three and five years to 30 June 2025, the fund is the best performer3 in the IA Europe Excluding UK sector4.
Our SmartGARP software tool uses financial data to find companies that are cheaper than the broader market, but also growing faster than the market. As a result, the companies within our fund should be trading on lower valuations than the broad universe of European shares and indeed, that is the case.
Yet our portfolio is not just cheap; we also believe our companies are more profitable than the broader market, carry less debt5 and have the potential to grow faster than their competitors.
Discrete calendar-year performance (%)
| 2024 | 2023 | 2022 | 2021 | 2020 | |
|---|---|---|---|---|---|
| Fund | 16.4 | 15.1 | 2.0 | 19.5 | -5.6 |
| FTSE World Europe ex UK TR GBP | 3.0 | 15.7 | -7.0 | 17.4 | 8.6 |
| IA Europe Excluding UK average | 1.5 | 13.5 | -9.2 | 15.7 | 10.7 |
Past performance is not a guide to the future. Source: Lipper Limited/Artemis as at 30 June 2025 for class I accumulation GBP. All figures show total returns with dividends and/or income reinvested, net of all charges. Performance does not take account of any costs incurred when investors buy or sell the fund. Returns may vary as a result of currency fluctuations if the investor's currency is different to that of the class. Classes may have charges or a hedging approach different from those in the IA sector benchmark.
Contributors / detractors
Société Générale (a French bank), Lottomatica (an Italian lottery provider) and Italgas (an Italian gas network) all performed strongly during the quarter. These companies are a diverse bunch by sector and country but they are all benefiting from upgrades to analysts’ profit forecasts6 and we perceive their share prices to be cheap.
We began investing in Société Générale in mid-February and it is now our largest position7. It has been one of the biggest contributors to performance year-to-date. When the data changes, we change our portfolios and we are not afraid to do so dramatically.
On the other side of the ledger, our worst performer over the past three months was energy company Equinor, which suffered due to oil prices being weak8.
Activity
In addition to Société Générale, other large purchases in the past few months included travel agent TUI, energy company Engie, gas distributor Italgas and Fresenius Medical Care, which provides products and services for people with chronic kidney failure. We deemed all of their share prices to be attractive and these companies are also benefiting from analysts upgrading their profit forecasts9.
Inevitably we make mistakes in our purchases from time to time but we endeavour to cut our losses sooner rather than later. In the past few months we sold out of food retail group Ahold Delhaize (due to price wars among supermarkets10), energy company Equinor (on weaker oil prices) and Evonik Industries, a German specialty chemicals company (in reaction to analysts downgrading their profit forecasts11).
Outlook
We believe the gap between Europe’s cheapest and most expensive shares is wide and has got further to narrow, especially as some lower-priced shares are delivering positive surprises. As such, our focus on investing in cheaper shares should continue to give us a tailwind, as should our natural tendency to have a high exposure to companies announcing profit growth and positive surprises.
Notes and references
Benchmarks: FTSE World Europe ex UK TR; A widely-used indicator of the performance of European stock markets, in which the fund invests. IA Europe Excluding UK NR; A group of other asset managers’ funds that invest in similar asset types as this fund, collated by the Investment Association. These act as ‘comparator benchmarks’ against which the fund’s performance can be compared. Management of the fund is not restricted by these benchmarks.
Risks specific to Artemis SmartGARP European Equity Fund
- Market volatility risk The value of the fund and any income from it can fall or rise because of movements in stockmarkets, currencies and interest rates, each of which can move irrationally and be affected unpredictably by diverse factors, including political and economic events.
- Currency risk The fund’s assets may be priced in currencies other than the fund base currency. Changes in currency exchange rates can therefore affect the fund's value.
- Charges from capital risk Where charges are taken wholly or partly out of a fund's capital, distributable income may be increased at the expense of capital, which may constrain or erode capital growth.
The intention of Artemis’ ‘investment insights’ articles is to present objective news, information, data and guidance on finance topics drawn from a diverse collection of sources. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by Artemis or any third-party. Potential investors should consider the need for independent financial advice. Any research or analysis has been procured by Artemis for its own use and may be acted on in that connection. The contents of articles are based on sources of information believed to be reliable; however, save to the extent required by applicable law or regulations, no guarantee, warranty or representation is given as to its accuracy or completeness. Any forward-looking statements are based on Artemis’ current opinions, expectations and projections. Articles are provided to you only incidentally, and any opinions expressed are subject to change without notice. The source for all data is Artemis, unless stated otherwise. The value of an investment, and any income from it, can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested.
