Implementation of firmwide exclusions on weapons

Artemis applies a weapons exclusion (screening) policy, paying regard to various international conventions, such as the international convention on cluster munitions and anti-personnel mines. This policy applies to all the investment decisions made by Artemis.

Artemis applies a firmwide weapons exclusion (screening) policy, paying regard to various international conventions, such as the international convention on cluster munitions and anti-personnel mines. This policy applies to all the investment decisions made by Artemis.

As mentioned in our latest Stewardship Report, we reviewed our policy on firmwide weapon exclusions and agreed extensions to its scope, which are being implemented in 2024.

The new policy is that investment is not permitted in entities which we assess as being involved in the current manufacture of controversial weapons, including:

  • Cluster munitions;
  • Anti-personnel mines;
  • Chemical weapons;
  • Biological weapons;
  • Depleted uranium weapons;
  • Incendiary weapons using white phosphorus;
  • Weapons that use non-detectable fragments; or
  • Blinding laser weapons.

Also, investment is not permitted in entities which we assess as currently having any industry connection to nuclear weapons, if that entity is incorporated, domiciled, listed, quoted or traded in a country which is not a signatory of the Treaty on the Non-Proliferation of Nuclear Weapons.

Our firmwide exclusion policy may be updated from time to time, particularly as developments are made to international conventions. Further information about Artemis’ approach to Stewardship and ESG can be found at: www.artemisfunds.com/stewardship-and-esg.

What is the scope of the exclusions policy on weapons?

The weapons exclusions described above will apply to:

  • direct investment in a company; and
  • investments in a company which are made indirectly via derivative instruments whose performance is linked to that company only.

The exclusions will not apply in the case of indirect investment, for example where a fund invests in a fund managed by a third party, or where an investment is made in broad-based derivatives (which might, for example, be linked to the performance of markets, indices or sectors rather than an individual company). In those cases, it is possible that a fund might indirectly obtain exposure to companies which would otherwise be excluded.

What data is used to assess the business activities of companies, and what are the limitations?

Classification of issuers of securities is primarily based on business activity identification fields supplied by third-party ESG data providers. This classification is subject to an investment research override in cases where sufficient evidence exists that the third-party field is not accurate or appropriate.

What happens if a company is assessed as failing the screening criteria?

In any scenario where a portfolio position is identified as not meeting this exclusion criteria for any reason, divestment will usually be required as soon as reasonably practicable, taking into account market conditions and the best interests of investors.

When will the changes take place?

We are implementing the new policy by updating fund prospectuses to include details on the firmwide weapons exclusions, in a phased approach. The weapons exclusions are being added to the following prospectuses:

Artemis Retail Funds, covering:

  • Artemis Global Income Fund
  • Artemis Global Select Fund
  • Artemis High Income Fund
  • Artemis Income Fund
  • Artemis Monthly Distribution Fund
  • Artemis SmartGARP European Equity Fund
  • Artemis SmartGARP Global Equity Fund
  • Artemis SmartGARP UK Equity Fund
  • Artemis Strategic Assets Fund
  • Artemis Strategic Bond Fund
  • Artemis UK Select Fund
  • Artemis UK Smaller Companies Fund
  • Artemis UK Special Situations Fund

Artemis Investment Funds ICVC, covering:

  • Artemis SmartGARP Global Emerging Markets Equity Fund
  • Artemis US Select Fund
  • Artemis US Smaller Companies Fund
  • Artemis US Extended Alpha Fund
  • Artemis Corporate Bond Fund
  • Artemis Short-Duration Strategic Bond Fund
  • Artemis Positive Future Fund

Artemis Funds (Lux), covering:

  • Artemis Funds (Lux) - SmartGARP Global Emerging Markets Equity
  • Artemis Funds (Lux) - Global Select
  • Artemis Funds (Lux) - US Select
  • Artemis Funds (Lux) - US Smaller Companies
  • Artemis Funds (Lux) - US Extended Alpha
  • Artemis Funds (Lux) - Short-Dated Global High Yield Bond
  • Artemis Funds (Lux) - Global High Yield Bond
  • Artemis Funds (Lux) - Leading Consumer Brands
  • Artemis Funds (Lux) - UK Select

Artemis Strategic Assets Fund

Artemis Institutional Funds, covering:

  • Artemis Income (Exclusions) Fund
  • Artemis SmartGARP Paris-Aligned Global Equity Fund

How will investors be impacted by this change?

Investors do not need to take any action. No portfolio holdings would need to be sold as a result of the introduction of the weapons exclusions.

Further information

If you are uncertain about the details of this change, we recommend that you consult a professional adviser. For further 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 e-mail at [email protected].

Please see our glossary of terms, to explain any investment terminology that you may be unfamiliar with.