Artemis SmartGARP Global Smaller Companies Fund
Q4 2025 update
Source for all information: Artemis as at 31 December 2025, unless otherwise stated.
Summary
- The Artemis SmartGARP Global Smaller Companies strategy has outperformed since inception, returning 5.2% between 10 October and 31 December 2025, compared with 3.1% for the MSCI AC World Small Cap index NR GBP.
- The fund changed its name to Artemis SmartGARP Global Smaller Companies from Artemis Global Select and adopted its new benchmark on 6 October 2025. Performance figures are shown from 10 October 2025 because that is when the fund fully transitioned to a portfolio of smaller companies.
- The fund benefited from an accommodative economic environment during the fourth quarter, which was supportive to stock markets.
Performance
The strategy remains in its early stages, but we are encouraged to have finished the year ahead of the index. In terms of what drove performance, our largest contributor came from our materials exposure, followed by consumer discretionary. On the detracting side, energy was a headwind as was our healthcare exposure.
At a country level, asset allocation detracted, particularly in China. This was offset by strong stock selection, leaving the total contribution from our China exposure close to 1 percentage point on a relative basis. Stock selection in Canada and Japan was also additive. Our US exposure lagged the benchmark.
| Since launch | One month | |
| Artemis SmartGARP Global Smaller Companies I Acc GBP | 5.2% | 1.2% |
| MSCI AC World Small Cap NR GBP | 3.1% | -0.6% |
Past performance is not a guide to the future. Source: Lipper Limited/Artemis, 10 October 2025 to 31 December 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.
Portfolio characteristics
| Price-to-earnings ratio | Dividend yield | Return on equity | |
| Artemis SmartGARP Global Smaller Companies I Acc GBP | 9.9x | 4.0% | 12.0% |
| MSCI AC World Small Cap NR GBP | 15.9x | 1.8% | 9.3% |
| Relative | -38% | +2.2 percentage points | +2.8 percentage points |
Source: Artemis as at 31 December 2025
Contributors
The following stocks made the strongest contribution to performance:
- Macy’s: The US department store operator produced a stronger quarter than expected, leading to upgrades. It bucked tariff headwinds by upgrading its stores.
- Ero Copper: The copper and gold miner is trading at an attractive valuation given its recent growth profile and structural tailwinds to demand.
- Boliden: Analysts aggressively raised their forecasts for the Swedish zinc and copper miner during Q4.
- Tianshan Aluminium: The Chinese aluminium producer recently committed to a payout ratio of more than 50%, reflecting the proportion of earnings distributed to shareholders. This is a theme we are seeing more broadly within emerging markets as the asset class matures and becomes more shareholder friendly.
- NGK Industries: The Japanese maker of diesel particulate filters for cars and insulators beat estimates in its most recent set of quarterly results.
Detractors
CF Industries and HF Sinclair detracted from returns. CF Industries is the largest producer of ammonia globally, which beyond being used in fertilisers, is being seen as a source for clean energy given its hydrogen content. It produced a mixed set of results for Q3, which weighed on the share price.
US refiner HF Sinclair was pulled down by lower gasoline prices, but management is confident that demand will offset this weakness. HF Sinclair remains attractively valued, in our view, and has made a commitment to distribute capital to shareholders through buybacks and dividends.
The remaining top detractors (ANI Pharma, Gigabyte and Galp Energia) didn’t hinder performance by a notable amount. We did however dispose of Gigabyte as downgrades came through.
Transactions and positioning
We disposed of names where SmartGARP, our proprietary stock-screening tool, was cooling and recycled capital into better scoring names. We initiated a position in Amneal Pharmaceuticals, a US specialist in products for central nervous system disorders.
We sold out of the following names during Q4:
- Mosaic: US fertilisers
- Bank OZK: A US regional bank
- Oshkosh: Trucks
- HanesBrands: A US clothing retailer
In terms of sector positioning, we have a preference for basic resources, oil & gas and insurance, and underweights in technology, healthcare and industrial goods. At a regional level, we are at our typical underweight limit to North America and overweight to emerging markets (in particular China and Brazil), Europe and Japan.
Our preference for value-orientated areas of the global small-cap universe leads us to look quite different (as is to be expected from a SmartGARP fund) to the peer group we follow, especially the larger funds.
Themes to watch in 2026:
Whilst we are not sat idly waiting for tailwinds to emerge, there are a few areas that might be of interest for investors who are looking at smaller companies:
- Accommodative monetary and fiscal environment: Declining rates, inflation that looks to be under control and stimulative government policies are supportive to smaller companies.
- Positioning: The asset class is severely underrepresented in asset managers' portfolios, a feature that SmartGARP favours.
- Valuations: Small caps have moved from trading at a premium to a sizeable discount.
Valuations at lows relative to history
Global smaller companies' valuation premium/discount versus global large caps (forward P/E)
Source: Bloomberg as at 31 July 2025
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 Smaller Companies 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.
- Smaller companies risk Investing in small companies can involve more risk than investing in larger, more established companies. Shares in smaller companies may not be as easy to sell, which can cause difficulty in valuing those shares.
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.
