Changes to investment policy, strategy and benchmark of Artemis Positive Future Fund

We are making changes to the investment policy, strategy and benchmark of Artemis Positive Future Fund (the “Fund”).

Updated 22 November 2024

We are making changes to the investment policy, strategy and benchmark of Artemis Positive Future Fund (the “Fund”).

What is changing?

Amendments to the Fund’s investment strategy

The Fund’s current investment strategy focusses on the positive impact delivered by a company’s products and/or services. We believe that it would be beneficial to make a wider-ranging assessment of a company’s positive impact by also considering a company’s broader conduct and operations, in addition to the impact of the products and services which it provides.

The Fund’s investment strategy currently focuses on identifying “disruptive” companies. This has had the effect of reducing the number of companies in which the Fund Manager can invest, to a subset of mostly smaller companies which are at much earlier stages of growth. These companies’ share prices tend to rise and fall more quickly than more established companies, which means that the Fund has been exposed to a higher risk of sudden fluctuations in the value of its portfolio. We will therefore be removing references to “disruptive” companies. Over time we expect that the companies which the Fund invests in will become, on average, larger and more established, whilst still being at a size where they can respond positively to shareholder engagement.

Amendments to the Fund’s exclusions

We are making changes to the Fund’s exclusions to reflect the Fund Manager’s approach to prioritising engagement over exclusion. This reflects the Fund Manager’s belief that impact in listed equities can be delivered through constructive dialogue and productive engagement that can precipitate and accelerate real-world outcomes.

The Fund’s tobacco exclusion will be clarified to prevent investment in tobacco producers only, not any tobacco-related business activities.
The Fund’s animal testing, genetic modification, biodiversity and nuclear-power screens will be removed.

Change of comparator benchmark

The Fund’s comparator benchmark will change from MSCI ACWI Index to MSCI ACWI Mid Cap Index.

The current benchmark, MSCI ACWI Index, is a widely used indicator of the performance of global stock markets, without any bias to the market capitalisation of companies. The Fund will focus on mid cap companies, those having a market capitalisation ranging from £1bn to £100bn at time of purchase. The Fund Manager is of the view that companies of this size tend to be material enough to drive positive outcomes, whilst still being small enough to respond positively to shareholder engagement.

Why is Artemis making these changes?

We believe that the changes are in the best interests of investors.

By updating the Fund’s investment strategy so that we can assess positive impact at the conduct level, in addition to the product and services level which we already consider, and reducing our emphasis on disruptive companies at an earlier stage of their development, we expect that we will be better placed to meet the Fund’s objective of growing capital over a five-year period. The reasons for this are two-fold:

we are able to build a less volatile and more balanced portfolio that should be able to deliver attractive returns through market cycles;
we are able to deliver more meaningful impact by influencing companies through engagement to improve their environmental and social impact on the world, regardless of whether it stems from their products, services, conduct or footprint.

Sacha El Khoury, who joined Artemis in March 2023 as Head of Impact Equities, took over the lead management of the Fund in March 2024. She is supported by May Laghzaoui and Lorraine Hau. Following a recent review of the Fund’s investment policy and strategy, it was felt appropriate to update the language to reflect:

the holistic assessment of positive impact
the removal of emphasis on identifying companies disrupting established industry incumbents through innovation
a broader emphasis on Artemis’s investor impact, i.e. value that can be derived from active, constructive engagement with companies.

The changes to the Fund’s benchmark are being made as the Fund Manager believes the MSCI AC World Mid Cap Index to be a more appropriate benchmark for performance comparison purposes than the MSCI AC World Index, given the typical market capitalisation of the companies held by the Fund. The Fund will focus on mid cap companies, those having a market capitalisation ranging from £1bn to £100bn at time of purchase. The Fund Manager is of the view that companies of this size tend to be material enough to drive positive outcomes, whilst still being small enough to respond positively to shareholder engagement.

When will the changes take place?

The changes will come into effect on 1 February 2025. Investors do not have to take any action as a result.

How will investors be affected by this notice?

There should be no impact on you as a result of these changes. There may be some trades as a result of the amendments on Day 1, but the full set of changes will take place in the following weeks after the effective date to reflect the updated Investment Objective & Policy. Artemis will bear the costs of the Day 1 realignment costs which have been estimated at £4,500. In relation to the trading costs in the weeks following the effective date, these will be borne by the Fund as part of the normal portfolio turnover.

Further information

If you are uncertain about the details of this change, we recommend that you consult a professional adviser.

If you have any questions about the information, please contact our Fund Service Centre on 0800 092 2051 (outside the UK +44 1133 604500) between 8:00am and 6:00pm (Monday to Friday) or by email at [email protected].

List of affected share classes

Class F Accumulation GBP (ISIN: GB00BMVH5755)
Class F Income GBP (ISIN: GB00BMVH5862)
Class I Accumulation GBP (ISIN: GB00BMVH5979)
Class I Income GBP (ISIN: GB00BMVH5B96)