Artemis SmartGARP European Equity Fund
Q2 2026 update
Source for all information: Artemis as at 29 June 2026, 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.
Review of the quarter
Following a protracted period of underperformance, the value style of investing (buying shares that look cheap compared with the stockmarket average) in Europe is now in its fifth year of recovery1. While value has done well over the past 120 years, most of our peers still struggle with the concept of owning cheap shares2.
We track which shares active funds (those that aim to beat the benchmark) own and thus can see their SmartGARP (Smart Growth At a Reasonable Price) characteristics compared with passive ones (those that aim to track the benchmark).
Europe has been viewed for some time as the home of the quality investor: a market of stable businesses with competitive moats3 and good management teams, resulting in higher profitability. In our view, the issue with many 'quality' funds is they find themselves in heavily owned shares that in many cases are experiencing downgrades to profit forecasts. The result can be painful when the world doesn’t turn out the way you expect, with LVMH, Novo Nordisk and Wolters Kluwer examples of this heady mix.
Looking forward, it is not a stretch to suggest that investors may recognise the need for balance in their exposure to European companies.
Performance
The fund underperformed over the quarter, returning 11.6% compared with 12.5% from its first benchmark, the FTSE World Europe ex UK index4, and 12.5% from its second benchmark, the IA Europe excluding UK sector5.
Discrete calendar-year performance
| 2025 | 2024 | 2023 | 2022 | 2021 | |
| Artemis SmartGARP European Equity I Acc GBP | 55.9% | 16.4% | 15.1% | 2.0% | 19.5% |
| FTSE World Europe ex UK TR GBP | 27.9% | 3.0% | 15.7% | -7.0% | 17.4% |
| IA Europe Excluding UK average | 22.2% | 1.5% | 13.5% | -9.2% | 15.7% |
Past performance is not a guide to the future.
Source: Lipper Limited/Artemis to 31 December 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.
Contributors/detractors
Even though Europe has relatively low exposure to the AI theme, technology was the standout sector. Our underweight (lower-than-average position compared with the benchmark) to this part of the market was our main detractor on a relative basis. Contributions came from our financials exposure, in particular banks, which continue to be one of the most consistent sources of upgrades to profit forecasts of any sector, yet still look inexpensive, in our view.
At an individual company level, our main detractor was ASML as its shares rose by a large amount but we don't own it. Holdings in Repsol and Eni (both oil & gas) and Yara (fertilisers) worked against us as the market looked past the conflict in the Middle East and towards a return to normal in the Strait of Hormuz. As we stand today, the conflict looks far from being resolved.
On the positive side, our top contributor was AT&S, which makes printed circuit boards, as well as IC (integrated circuit) substrates that connect these to chips. Within financials, OTP Bank, UNIPOL (insurance) and Societe Generale (bank) also performed well for us.
Activity
We continued to steer capital towards areas where news flow was positive.
In terms of individual purchases, we added ASM International, an equipment producer that sits within the AI supply chain. We also bought Asmodee (board games) and Zabka (household goods) and topped up positions in Banco Santander and Indra Sistemas. To fund these purchases, we sold LM Ericsson, TUI, Air France-KLM and Novartis.
Outlook
Our fund is deliberately focused on themes we think deliver long-term outperformance (meaning periods of more than five years) rather than short-term dopamine hits. As such it is quite different from your typical European fund.
While we think the opportunity in value remains pronounced, we do not focus on this factor alone. We recognise that styles can go in and out of favour and therefore look to incorporate other components to create an all-weather process. This allows us to keep our head above water when value is out of favour but also supplement returns when it comes back in.
Notes and references
2. Source: Morningstar. 09.07.2026
3. Competitive advantages that are difficult to replicate, allowing companies to maintain high profit margins.
4. The FTSE World Europe ex UK index is a widely-used indicator of the performance of European stockmarkets, 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.
5. The IA Europe Excluding UK sector is 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.
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.
