Artemis SmartGARP Global Equity Fund
Q2 2025 update
Source for all information: Artemis as at 29 June 2025, unless otherwise stated.
- The fund outperformed, returning 8.8% compared with 5.0% from its MSCI AC World index benchmark
- Major contributors: Apple (not held), Babcock, Asia Vital and Lundin Gold
- Major detractors: Microsoft (underweight), Halozyme, JD.com and Petrobras
- The policy path in the US caused intense market volatility
| P/E | ROE (%) | Analyst revisions (%) | Dividend yield (%) | |
|---|---|---|---|---|
| Fund | 11.2 | 16.1 | 1.5 | 3.1 |
| Benchmark | 18.8 | 15.1 | -0.4 | 1.9 |
| Relative | -41% | +1.0 | +1.9 | +1.2 |
Source: Artemis, Bloomberg, MSCI as at 10 July 2025. Return on equity (ROE) is a blend of three-year trailing and two-year forward figures.
Review of the quarter to 30 June 2025
The quarter was one of the most volatile on record, commencing with ‘Liberation Day’, which caused a rapid reappraisal of asset prices around the globe. This was followed by a series of concessions by US President Donald Trump, which led to the coining of the phrase 'TACO' (Trump always chickens out). He paused reciprocal tariffs; dramatically increased tariffs on China, before pausing these as well; then warned he would remove Chair of the Federal Reserve Jerome Powell, before confirming he had no plans to follow through with this threat.
Markets understandably had a difficult time processing the rapid adjustments, experiencing a sharp sell-off during April, with the MSCI AC World index dropping 10%, then staging a rally to leave second-quarter performance up 5% in sterling terms. Despite the recovery, there are issues that remain concerning, particularly around the trajectory of US debt, with Trump’s One Big Beautiful Bill Act projected to add about $5trn to the deficit. That being said, hard economic data remained robust, pointing towards the resilience of the US economy.
Outside of the US, there are some encouraging signs in Europe and emerging markets. For Europe, economic tailwinds go beyond the stimulus package announced by Germany. Public sector lending looks to be picking up after a period of deleveraging and there is a noticeable change in tone from the European Central Bank, moving from a focus on controlling costs to increasing competitiveness.
For emerging markets, there are interesting developments in Korea, as its new president seeks to push forward with shareholder reforms and stimulate the economy with looser fiscal rules.
| Performance (%) | 3 m | 6 m | 1 yr | 3 yrs | 5 yrs |
|---|---|---|---|---|---|
| Fund | 8.8 | 7.3 | 11.0 | 40.7 | 80.4 |
| MSCI World NR / MSCI AC World NR GBP* | 5.0 | 0.6 | 7.2 | 43.2 | 71.0 |
| IA Global Average | 5.3 | 0.5 | 4.2 | 32.7 | 52.8 |
Past performance is not a guide to the future. Source: Lipper Limited/Artemis 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. *As of 2011 the benchmark changed to MSCI AC World NR GBP. Returns up to 2011 reflect those of MSCI World.
Contributors/detractors
It was encouraging to see the fund post another solid quarter. As usual, stock selection drove returns, with regional asset allocation detracting. Sectors of note included tech – where despite being underweight a strong industry, we were able to outperform through stock selection – and materials. Consumer names across both staples and discretionary detracted, albeit marginally.
At a stock level, our top contributor was our underweight to Apple, followed by exposure to Babcock, Asia Vital, Lundin Gold and Indra Sistemas. Our biggest detractors included our underweight position in Microsoft, which rose strongly, as well as holdings in Halozyme, JD.com and Petrobras.
Activity
Over the quarter we made a number of transactions, including those of note below:
Buys:
Elite Material – Taiwan tech
Expand Energy – Natural gas exploration
Philip Morris – Tobacco
Sells:
Petrobras – On oil weakness
General Motors and Asahi Kasei – Both received downgrades
Positioning remains largely unchanged: we are near our maximum underweight to the US (47.1% for the fund compared with 67.2% for our benchmark), with overweights in emerging markets and Europe. At a sector level, we are most overweight banks and basic resources and most underweight technology and financial services.
We continue to be exposed to businesses on reasonable valuations with above-market growth that are experiencing upgrades to profit forecasts and delivering a healthy income through dividends and buybacks. While this is an attractive set of characteristics, when you look at our global equity peers' holdings, they seem all too rare.
Outlook
Looking at the past five years, the fund has displayed relatively low correlation to US equities and in particular to growth stocks. In a world where the opportunity in diversifying your portfolio is pronounced, we think a fund with low correlation to the extremes in global equities may be additive.
Correlation Matrix
Source: Morningstar, 30 June 2025, Five-year correlation, weekly returns, calculated in GBP.
Notes and references
Past performance is not a guide to the future. Source: Lipper Limited 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. This class may have charges or a hedging approach different from those in the IA sector benchmark. Benchmarks: MSCI AC World NR; A widely-used indicator of the performance of global stockmarkets, in which the fund invests. IA Global NR; A group of other asset managers’ funds that invest in similar asset types as this fund, collated by the Investment Association. These benchmarks act as ‘comparator benchmarks’ against which the fund’s performance can be compared. Management of the fund is not restricted by these benchmarks.
FOR PROFESSIONAL INVESTORS AND/OR QUALIFIED INVESTORS AND/OR FINANCIAL INTERMEDIARIES ONLY. NOT FOR USE WITH OR BY PRIVATE INVESTORS.
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.
Risks specific to Artemis SmartGARP Global 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.
- Emerging markets risk Compared to more established economies, investments in emerging markets may be subject to greater volatility due to differences in generally accepted accounting principles, less governed standards or from economic or political instability. Under certain market conditions assets may be difficult to sell.
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.
