Artemis UK Special Situations Fund
Q3 2025 update
Source for all information: Artemis as at 29 September 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 fund continued to make progress in the third quarter of 2025, returning 2.4%. From a relative point of view, however, it underperformed its FTSE All-Share1 benchmark, which made 6.9%, and its IA UK All Companies sector average2, which made 3.0%. It is well ahead of both measures over five years.
| 2024 | 2023 | 2022 | 2021 | 2020 | |
|---|---|---|---|---|---|
| Artemis UK Special Situations | 13.0% | 13.6% | -9.3% | 14.1% | 0.0% |
| FTSE All-Share TR | 9.5% | 7.9% | 0.3% | 18.3% | -9.8% |
| IA 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/Artemis to 30 September 2025 for class I distribution units, 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. This class may have charges or a hedging approach different from those in the IA sector benchmark.
Detractors
Retailer WH Smith surprised us by announcing it had overstated supplier income (payments from suppliers for in-store promotions) in its North American division by £30m3. We don’t think this invalidates the US growth strategy, but we think it will take time for credibility to be rebuilt.
Airline and package holiday operator Jet2 and travel website company On The Beach both cited later booking patterns from consumers4. Jet2 has trimmed capacity in response5, but as an online travel agent, On The Beach has no inventory. Both companies remain confident in their long-term growth plans.
Restaurant and pub group Mitchells & Butlers reported continued outperformance versus the wider pub sector6. While flagging continued cost pressures, management remains confident of meeting profit expectations7.
Contributors
Our two largest bank holdings, Barclays and Standard Chartered, both reported good first-half results. Barclays saw good growth in its investment banking division8 while Standard Chartered beat expectations, with its wealth business growing by 20%9.
Aerospace and defence engineering services company Babcock continued to perform well with defence names benefiting from increased spending commitments from EU countries10.
Anglo American agreed a merger of equals with Canadian mining company Teck Resources to form Anglo Teck11. The combined group will have six world-class copper mines representing more than 70% of group production12. Two of those assets, Collahuasi (Anglo American) and Quebrada Blanca (Teck), are in close geographic proximity, allowing infrastructure to be shared13.
Activity
We added two new holdings in the quarter, Coats and 4imprint.
Coats makes industrial threads and structural components for the apparel and footwear industries. The company has just announced the acquisition of insole technology provider Ortholite for $770m14. We believe the acquisition will help its footwear division benefit from economies of scale and will boost growth and profit margins.
4imprint is the largest distributor of custom-printed promotional merchandise in North America15. Because many of the items distributed by 4imprint are manufactured in Asia, the share price was harmed by Donald Trump's new tariff regime16. Recent share price weakness, in our view, reflects the short-term issues but ignores the long-term market growth and 4imprint's ability to take increased share.
Outlook
The UK is suffering uncertainty ahead of the forthcoming Budget and the prospect of further tax rises17. These worries have weighed on UK shares which now sit at a large discount to international peers18.
However, we believe UK consumers are in a strong financial position as people continue to save and household balance sheets are strong19. This in our view represents pent-up demand as and when confidence improves.
So, the market has performed strongly but there remains plenty of value in the UK and even more in the fund20. This, coupled with the mood of prevailing pessimism, makes us optimistic about the potential for further good returns.
Notes and references
1FTSE All-Share Index TR: A widely-used indicator of the performance of the UK stockmarket, 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.
2A UK All Companies NR: A group of other asset managers’ funds that invest in similar asset types as this fund, collated by the Investment Association. Management of the fund is not restricted by this benchmark.
3https://www.bbc.co.uk/news/articles/c3v363zr6kdo
6https://www.mbplc.com/static/4332a6e8b78ab23f1d94740d632a3c52/half_yr25_results.pdf
7https://www.mbplc.com/static/4332a6e8b78ab23f1d94740d632a3c52/half_yr25_results.pdf
9https://www.sc.com/en/uploads/sites/66/content/docs/standard-chartered-plc-hy-2025-report.pdf
11https://www.angloamerican.com/media/press-releases/2025/09-09-2025
12https://www.angloamerican.com/media/press-releases/2025/09-09-2025
13https://www.angloamerican.com/media/press-releases/2025/09-09-2025
16https://www.ii.co.uk/analysis-commentary/share-sleuth-two-shares-suffering-trumps-tariffs-ii535213
17https://www.bloomberg.com/news/newsletters/2025-09-24/uk-stocks-offer-value-despite-looming-budget
18Source: Goldman Sachs as at 27 September 2025
19https://www.ft.com/content/37af2ffd-0a82-4150-b89c-3d5390ea9062
20Source: Artemis/Bloomberg as at 30 September 2025
Risks specific to Artemis UK Special Situations 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.
- Special situations risk The fund invests in companies that are in recovery, need re-financing or are suffering from lack of market attention (special situations). These companies are subject to higher-than-average risk of capital loss.
- Specialist investment objective risk The fund will only invest in companies which have a positive environmental and/or social impact. It is also prevented from investing in companies which conduct certain types of activities. The universe of potential investments available to the fund will therefore be smaller than if no such restrictions were applied. If a company in which the fund invests no longer meets the criteria for investment and/or is not making sufficient progress on improving its operational performance, the manager will seek to sell the investment. The price which may be obtained for selling an investment in these circumstances might be lower than that which could have been obtained had the sale not been required.
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.
