Artemis SmartGARP® European Equity Fund update

Source for all information: Artemis as at 30 June 2025, unless otherwise stated.

Objective 

The fund’s objective is to grow capital over a five-year period.

Performance

The Artemis SmartGARP European Equity Fund had a strong second quarter, rising 13.8% in the three months to 30 June 2025, while its FTSE World Europe ex UK benchmark¹ climbed 6.1%². Over one, three and five years to 30 June 2025, the fund is the best performer³ in the IA Europe Excluding UK sector⁴.

Our SmartGARP software tool uses financial data to find companies that are cheaper than the broader market, but also growing faster than the market. As a result, the companies within our fund should be trading on lower valuations than the broad universe of European shares and indeed, that is the case. 

Yet our portfolio is not just cheap; we also believe our companies are more profitable than the broader market, carry less debt⁵ and have the potential to grow faster than their competitors.

Discrete calendar-year performance 

Contributors / detractors

Société Générale (a French bank), Lottomatica (an Italian lottery provider) and Italgas (an Italian gas network) all performed strongly during the quarter. These companies are a diverse bunch by sector and country but they are all benefiting from upgrades to analysts’ profit forecasts⁶ and we perceive their share prices to be cheap.

We began investing in Société Générale in mid-February and it is now our largest position⁷. It has been one of the biggest contributors to performance year-to-date. When the data changes, we change our portfolios and we are not afraid to do so dramatically.  

On the other side of the ledger, our worst performer over the past three months was energy company Equinor, which suffered due to oil prices being weak⁸.

Activity 

In addition to Société Générale, other large purchases in the past few months included travel agent TUI, energy company Engie, gas distributor Italgas and Fresenius Medical Care, which provides products and services for people with chronic kidney failure. We deemed all of their share prices to be attractive and these companies are also benefiting from analysts upgrading their profit forecasts⁹. 

Inevitably we make mistakes in our purchases from time to time but we endeavour to cut our losses sooner rather than later. In the past few months we sold out of food retail group Ahold Delhaize (due to price wars among supermarkets¹⁰), energy company Equinor (on weaker oil prices) and Evonik Industries, a German specialty chemicals company (in reaction to analysts downgrading their profit forecasts¹¹).

Outlook

We believe the gap between Europe’s cheapest and most expensive shares is wide and has got further to narrow, especially as some lower-priced shares are delivering positive surprises. As such, our focus on investing in cheaper shares should continue to give us a tailwind, as should our natural tendency to have a high exposure to companies announcing profit growth and positive surprises.