fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

Artemis UK Select I

UK equity fund focusing on growth stocks the manager believes to be undervalued.

  • 685.51p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 813.47p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.84%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 1.40%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 20 January 2022, fund commentary last updated 28 September 2021

The fund targets capital growth from investment in UK equities and to outperform the FTSE All-Share Index. Lead manager Ed Legget buys companies he believes will grow cash flow and earnings over time but are currently undervalued by the market. This includes technology firm Oxford Instruments, which is starting to commercialise its intellectual property in areas such as electric vehicle charging. Legget and his co-manager Ambrose Faulks have met numerous management teams up and down the country, building up extensive knowledge of UK businesses and industry sectors. They combine this first-hand information with top-down analysis of economic indicators to build their portfolio. Once acquired, the average holding time is between 2 to 3 years.

Fund summary

Sector UK All Companies
Structure UNIT TRUST
Launched September, 2010
Size £1,347m
Yield 1.40%
Charging basis Income
Dividends paid 28 Feb

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.84%

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Investment process

The team has two main pillars in its investment process. They carry out fundamental analysis of the companies and sectors they invest in alongside a top-down view on the short- and medium-term market direction. In addition, they use their own judgement in terms of what factors are already priced into a stock and carefully monitor market reaction to a company’s news flow. The managers only invest in companies where they truly understand the business model, and which have management teams with good track records. They see a strong link between successful management teams and business performance. They also seek recommendations from third party and sell-side analysts and the broader team at Artemis and can take a more active approach reacting to events such as the pandemic. The fund typically has 40 to 50 long positions and 3 to 10 short positions. It has a maximum size of 5% for long holdings and 2.5% for shorts. The managers invest a minimum of 85% in companies that are part of the FTSE 350 index and up to 15% in small cap, AIM listed or other UK quoted securities. They do not buy companies in overseas stock markets. Exposure to a single sector is capped at 30%.

This is a suitable option for investors seeking large/mid cap UK equity exposure. The managers have excellent track records, a wealth of expertise investing in the UK market and benefit from a strong support team at Artemis. The fund has consistently performed well over their tenure, though returns can be volatile. Although it is often thought of as being a ‘value’ fund, most holdings have strong growth potential. The managers take a very straightforward approach seeking stocks they believe will grow earnings and subsequently valuation. Getting out and about to see the management teams of many of these businesses is an advantage. It gives Legget, who has full decision-making responsibility, and Ambrose a competitive advantage over peers focusing on a smaller part of the market or relying on third party research.

Manager research

Average monthly relative returns

  • 17/18 1.02%
  • 18/19 -0.60%
  • 19/20 0.22%
  • 20/21 0.82%
  • 21/22 1.30%

Bestinvest MRI

  • 3 years 0.78%
  • 5 years 0.55%
  • Career 0.51%
  • 3 years 93.60%
  • 5 years 95.10%
  • Career 98.40%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Edward Legget

Ed Legget joined Artemis in December 2015 to manage the Artemis UK Select Fund. He graduated in manufacturing engineering from Cambridge in 2002 and obtained the CFA charter in 2005. He began his career in asset management at Standard Life Investments in 2002. There he managed several UK equity funds, including the SLI UK Equity Unconstrained Fund. Ambrose Faulks graduated from Oxford in 2005 and began his career in the research department at Odey Asset Management. He moved to Artemis in 2013.

Track record

Edward Legget has 14.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.51%. During the worst period of relative performance (from May 2007 - October 2008) there was a decline of 28% relative to the index. The worst absolute loss has been 53%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 98%.

Periods of worst performance

Absolute -53.00% (May 2007 - February 2009)
Relative -28.00% (May 2007 - October 2008)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 29 October 2021

5.1784%3 i Group Plc Ord
4.8048% Barclays
3.791% Oxford Instruments
3.6889% British American Tobacco
3.2553% Tesco
3.0484% Royal Dutch Shell Plc
2.9496% Prudential Plc
2.9054% Bp
2.8828% Intermediate Capital Group
2.8443% Entain Plc
Source: Trustnet

Sector breakdown

Financial Services 19.00%
Travel 14.00%
Banks 8.00%
Retailers - General 7.00%
Oil & Gas 6.00%
Household Goods 6.00%
Life Insurance 5.00%
General Industrials 5.00%
Mineral Extraction 4.00%
Building & Construction 4.00%

Portfolio

40-50 long positions, 3-10 short positions.

Constraints

Max 10% of portfolio in short positions.

Key Investor Information - Income

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Key Investor Information - Accumulation

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