Artemis SmartGARP UK Equity Fund
Q2 2025 update
Source for all information: Artemis as at 29 June 2025, unless otherwise stated.
CAPITAL AT RISK. All financial investments involve taking risk and the value of your investment may go down as well as up. This means your investment is not guaranteed and you may not get back as much as you put in. Any income from the investment is also likely to vary and cannot be guaranteed.
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.
Fund objective
The fund’s objective is to grow capital over a five-year period.
Performance
The Artemis SmartGARP UK Equity Fund had a good quarter – up 12.5% in the three months to 30 June 2025 compared with 4.4% from its first benchmark, the FTSE All-Share1, index, and 7.5% from its second benchmark, the IA UK All Companies sector average2.
This represents a continuation of a long-term trend of outperformance. In the past decade, the fund has returned 10.4% per annum after fees – some way ahead of the 6.8% figure from the FTSE All-Share.
This outperformance contrasts with most UK unit trusts, which have lagged the market: the IA UK All Companies sector’s average return is 5.4% per annum for the past 10 years3.
The SmartGARP software and investment process is designed to find shares that are cheaper than the broader stock market but that are delivering faster profit growth. We believe our performance over the years reflects this.
For the past five calendar years of performance, please see the table below. Please remember that past performance is not a guide to the future.
Calendar year performance (%)
| 2024 | 2023 | 2022 | 2021 | 2020 | |
|---|---|---|---|---|---|
| Artemis SmartGARP UK Equity Fund | 24.5 | 3.6 | 6.3 | 30.8 | -7.2 |
| FTSE All-Share TR | 9.5 | 7.9 | 0.3 | 18.3 | -9.8 |
| UK All Companies Sector Average | 7.9 | 7.2 | -9.3 | 17.1 | -6.3 |
Past performance is not a guide to the future. Source: Lipper Limited, class I accumulation units, to 30 June 2025. 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.
Contributors/detractors
The fund’s biggest sector tilt is to banks at 23.3%, compared with only 13.5% from the FTSE All-Share4. Indeed, banks have been among the biggest contributors to performance in the past few months, although this has primarily been due to us owning Lion Finance and Barclays rather than the sector in general. This is typical of our fund; the bulk of our outperformance usually tends to come from stock picking rather than sector allocation.
As an illustration, HSBC and Barclays are the two largest companies in the UK banking sector. Over the past decade we have tended to own either one or the other, but rarely both at the same time. For example, we had nothing in Barclays from July 2022 to February 2024 and an average of 7.5% of the fund in HSBC. Since then, we have averaged 6.8% in Barclays and 0.8% in HSBC.
We switched the positions around because our SmartGARP software tool changed its relative preference. The trigger came on the back of company results5 and subsequent revisions to profit forecasts6.
There were few major detractors during the period. Our holdings in oil & gas companies Equinor and TGS worked against us as energy prices fell.
Activity
As ever, we adjust the constituents of the fund as new information becomes available. In the past few months, we have sold our holdings in Tesco and J Sainsbury because price competition7 led to downgrades8. We also reduced our exposure to Marks & Spencer9 and Shell – again, following downgrades10.
We made purchases in water provider United Utilities, online trading specialist IG Group, savings and investment firm M&G and the banks NatWest and Lloyds. This kept our exposure to undervalued shares more or less unchanged, but ensured we remained focused on companies experiencing earnings upgrades. In doing this, we aim to increase the probability that our companies’ profits continue to outpace those of the broader stock market.
Outlook
Despite our emphasis on owning companies that are growing faster than the market, we have also ended up with the cheapest portfolio of any fund in the IA UK All Companies sector, according to Morningstar’s data as at 30 April 2025. Our exposure to value shares – those that are cheaper than the market – is higher than other funds in our peer group and it is also high compared with our own historical levels. These shares currently look extremely cheap in our view so it is perfectly rational to skew our portfolio towards them.
Notes and references
- The FTSE All-Share index is a widely-used indicator of the performance of the UK stock market, in which the fund invests. It acts as a ‘comparator benchmark’ against which the fund’s performance can
be compared. Management of the fund is not restricted by this benchmark. - The IA UK All Companies sector shows the average return from a group of other asset managers’ funds that invest in similar asset types as this fund, collated by the Investment Association. It acts as a ’comparator benchmark’ against which the fund’s performance can be compared. Management of the fund is not restricted by this benchmark.
- Lipper Limited to 30 June 2025
- Source: Artemis/Factset as at 30 June 2025
- https://www.hsbc.com/investors/results-and-announcements
- https://home.barclays/investor-relations/reports-and-events/financial-results/
- https://www.sharesmagazine.co.uk/news/shares/tesco-shares-slide-despite-profit-beating-forecasts
- https://www.theguardian.com/business/2025/apr/17/sainsburys-joins-uk-retailers-1bn-profits-club-but-warns-of-flat-year-ahead
- https://www.proactiveinvestors.co.uk/companies/news/1065731/m-s-downgraded-due-to-risks-from-muted-uk-jobs-market-tesco-and-sainsbury-preferred-1065731.html
- https://uk.investing.com/news/analyst-ratings/bernstein-downgrades-shell-stock-rating-on-limited-upside-potential-93CH-4135389
Risks specific to Artemis SmartGARP UK 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.
Important information
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.
