Artemis UK Smaller Companies R

A pragmatic approach to small cap investing.

  • 1255.11p
    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.

  • -
    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?

  • 5.00% 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!

  • 1.50%
    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).

  • 1.59%
    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.

  • 2.20%
    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 22 September 2020, fund data last updated 13 May 2014

The Fund aims for long-term capital growth. The Fund manager, Mark Niznik, has an emphasis on smaller companies listed, quoted and/or traded in the UK and in smaller companies which have a significant part of their activities in the UK which are quoted on a regulated market outside the UK. The fund focuses on companies with a sustainable business franchise trading at an attractive valuation point in their business cycle. The Fund will invest in all company types and industry sectors, having no biases or exclusions. The manager is benchmark agnostic and the performance can, therefore, deviate quite substantially.

Fund summary

Sector UK Smaller Companies
Structure UNIT TRUST
Launched April, 1998
Size £340m
Yield 2.20%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.59%

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Investment process

Investment ideas come from a network of brokers and consultants as well as extensive company meetings in the industry and the other managers at Artemis. The fund manager, Mark Niznik, will not be restricted to a house style or process at Artemis. His focus is on companies’ competitive advantage, visibility of earnings, growth in market share, cash dynamics of the business, diversity of customers and suppliers and critically the quality and depth of management. The manager aims to identify companies where there is a catalyst for share price appreciation, such as a favourable supply/demand balance, new technology breakthroughs or innovation. A company’s valuation is the last factor to be considered and is critical to the decision-making process. The fund manager’s valuation metrics include the P/E ratio, yield, free cash flow and asset backing (physical or intellectual property). The Fund’s capital is allocated on the basis of perceived share price upside and conviction and is not a function of their weighting in the index. Niznik’s buy/sell discipline reflects the share price potential of new investments compared with existing holdings. He is able to leverage off eight other UK equity specialists, many of whom have a bias towards small / mid cap companies.

Mark Niznik took full responsibility of the fund in 2011, following a four year tenure as a co-manager along John Dodd. Formerly this fund had a large proportion of its assets in natural resources stocks, particularly oil companies, which has been reduced under the new manager resulting in a more balanced fund. A large proportion of the fund is invested in industrials, media and technology and has a strong growth style bias. The Fund tends to outperform during downmarkets and performance has recently been steadier given the cyclical market rally.

Manager research

Average monthly relative returns

  • 15/16 0.63%
  • 16/17 0.69%
  • 17/18 0.71%
  • 18/19 0.03%
  • 19/20 -0.75%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.26%
  • Career 0.14%
  • 3 years 57.10%
  • 5 years 91.30%
  • Career 89.30%

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

Mark Niznik

Born in 1967, Niznik is an associate member of the Institute of Investment Management and Research and the Securities Institute and a Portfolio Manager & Sector Analyst for UK Smaller Companies. He began his investment career with Legal & General in 1985, before joining Greig Middleton & Co Limited where he was a private client fund manager. In 1992 he moved to Perpetual where he was a member of the UK Smaller Companies team and became a lead fund manager in 2001. In 2002 he joined Standard Life Investments as a small/mid cap fund manager, running their UK Opportunity Fund from its launch in November 2002; and in-house small cap pension funds. Niznik joined Artemis in October 2007 and is part of the small cap team.

Track record

Mark Niznik has 10.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.14%. During the worst period of relative performance (from September 2011 - February 2015) there was a decline of 17% relative to the index. The worst absolute loss has been 37%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 89%.

Periods of worst performance

Absolute -37.00% (December 2019 - March 2020)
Relative -17.00% (September 2011 - February 2015)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

3.2629% Brooks Macdonald Group
3.1659% H & T Group
2.8101% Ncc Group
2.5975% Rm Plc
2.593% Vectura Group
2.5359% Mears Group
2.3539% Volution Group Plc
2.2121% Sdl
2.2074% Computacenter
2.1357% Moneysupermarket.com Group Plc
Source: Trustnet

Sector breakdown

Financials 14.00%
Media 10.00%
Software 10.00%
Support Services 10.00%
Building & Construction 8.00%
Travel 6.00%
Pharmaceuticals 5.00%
Aerospace & Defence 5.00%
Industrials 4.00%
Household Goods 4.00%

Portfolio

60 – 80 holdings. Minimum holdings are 0.5% with no stock representing more than 5% of the fund. Top 10 usually 20 – 30%.

Constraints

There are no formal sector or stock limits.

Key Investor Information

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