Artemis US Select Fund
Q3 2025 update
Source for all information: Artemis as at 30 September 2025, unless otherwise stated.
Review of the quarter to 30 September 2025
The third quarter of 2025 was another one of contrasts. Global markets advanced despite an unhelpful policy backdrop, with investors choosing to focus on moderating inflation and resilient growth. Meanwhile, the Federal Reserve cut interest rates to 4.00-4.25% after a run of weaker employment data. This shift provided a tailwind for equities, helping the large-cap S&P 500 index and the small-cap Russell 2000.
Long-end Treasury yields were broadly stable, while gold rallied 17% to a new record on safe-haven demand. The dollar stabilised after a torrid first half of the year.
The US administration extended and expanded tariffs, though new trade deals with the EU and Japan tempered fears of a wider escalation. Despite these crosscurrents, market tone remained constructive, supported by easing policy and better visibility on growth.
While risks persist, most notably around fiscal sustainability and the inflationary impact of tariffs, the broader picture remains one of resilience, with the US continuing to demonstrate relative economic strength.
The Russell 2000 index had a strong quarter, making 14.3% compared with 10.0% from the S&P 500. Cyclical sectors such as basic materials, energy and industrials drove returns, while consumer staples and financials lagged behind.
Artemis US Select made 9.6% over the three-month period, marginally behind its S&P 500 benchmark but ahead of the 8.3% made by its IA North America sector average.
| Three months | Six months | One year | Three years | Five years | |
| Artemis US Select Fund | 9.6% | 20.6% | 13.9% | 55.0% | 76.6% |
| S&P 500 NR (net of 15% withholding tax) | 10.0% | 14.9% | 17.0% | 61.4% | 105.4% |
| IA North America average | 8.3% | 13.7% | 14.4% | 48.2% | 83.8% |
Past performance is not a guide to the future. Source: Lipper Limited/Artemis as at 30 September 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.
Positives
Bloom Energy, the fuel-to-electricity converter, delivered another record quarter with 20% revenue growth and margin expansion to 26.7%. Meanwhile, management unveiled plans to double manufacturing capacity to 2GW by the end of 2026. Towards the end of July, it was announced Bloom is to provide power to Oracle Cloud Infrastructure data centres in the US.
Memory chip business Western Digital benefited from the data-storage cycle turning decisively upwards. Revenue of $2.6bn was up 30% year-over-year and gross margins expanded to 41%, buoyed by strong demand from AI-servers. The sustained pick-up in orders allowed the company to increase prices on all of its hard disk drives.
Comfort Systems, which supplies high-skilled labour for building systems, delivered another record quarter, with revenue up 20% and earnings per share (EPS) surging 75%. The acquisition of Right Way Plumbing and double-digit service growth supported diversification.
Seagate, a competitor to Western Digital, delivered fantastic revenue growth over the quarter, reflecting strong leverage from AI-driven data centre demand. Management cited capacity being “largely spoken for” through to mid-2026, signalling tight supply and pricing power.
Pharmaceutical AbbVie delivered another strong quarter, extending its remarkable recovery post-Humira patent expiry. Q2 results exceeded expectations with $15.4 billion in revenue driven by exceptional growth from arthritis drugs Skyrizi and Rinvoq which are now set to exceed $25 billion in combined 2025 sales.
Negatives
Analogue chip producer Texas Instruments detracted from performance as semiconductor demand continued to normalise. Automotive volumes, historically a key profit engine, remained below trend. Although management noted incremental recovery signs, the broader analogue-semiconductor cycle remains weak. We reduced our holding until we see more evidence of a recovery.
Corteva Agriscience declined on falling sentiment and an uneven regional outlook. Management signalled that 2025 would mark a transition year, with growth moderating after a strong first half. The company guided to slower second-half momentum despite expectations for full-year improvement compared with 2024.
From a relative point of view, our underweight in Apple counted against us following better-than-expected uptake of the iPhone 17. We increased our position.
Another underweight position that counted against us was in Tesla. While the auto business is struggling, the end of electric vehicle tax credits pulled forward orders to Q3. We expect them to drop in Q4. Admittedly there are longer-term initiatives such as robotaxis and the Optimus robot (to help humans) that warrant having a small position.
Activity
We took profits in a range of names relating to AI, such as Bloom Energy and Nvidia. We redeployed capital into higher-quality names such as home care provider Cardinal Healthcare and bank JP Morgan.
Sector wise we are most overweight capital goods, semiconductors and financial services, with underweights in tech hardware (mainly Apple) and software, which we see as structurally challenged in the world of AI.
Outlook
As we enter the last quarter, there are tailwinds to US equities that lead us to be constructive on the outlook. The consumer remains healthy, Donald Trump’s One Big Beautiful Bill Act should begin to have an impact and a more supportive monetary environment should help sectors that have struggled under higher rates (such as mid and small caps). There is also continued momentum in spending around AI with very little sign of let-up. We remain vigilant against overexuberance in the market and are moving capital towards those areas where we see the most attractive risk/reward trade-off. This discipline should stand us in good stead as we close out the year.
Notes and references
Benchmarks: S&P 500 NR (net of 15% withholding tax). A widely used indicator of the performance of 500 large publicly traded US companies, some of which the fund invests in. 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. IA North America 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.
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 US Select 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.
Important information
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