Artemis UK Special Situations R

Multi-cap UK equity fund with a focus on turnaround situations.

  • 601.72p
    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?

  • 5.25% 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).

  • 1.56%
    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.

  • 1.60%
    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 27 November 2020, fund data last updated 30 March 2016

The fund targets long-term capital growth by exploiting special situations among sustainable businesses. Manager Derek Stuart is a bottom-up stock picker and invests in UK equities from across the market cap and sector spectrum, but typically has a higher weight to small and medium sized companies than the FTSE All-Share benchmark. He has a contrarian approach, favouring companies undergoing management change, restructuring or rationalisation, or that have fallen out of favour with the market, thus presenting attractive valuation opportunities provided their underpinnings remain sound.

Fund summary

Sector UK All Companies
Structure UNIT TRUST
Launched March, 2000
Size £452m
Yield 1.60%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 5.25%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.56%

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Investment process

Stuart finds stock ideas from a variety of sources including Artemis colleagues, his own thematic economic analysis and a network of brokers and consultants he has built over his career. His philosophy embraces the cyclical nature of markets and company performance and therefore focuses on companies experiencing share price weakness but where the long term business case remains intact. Companies can demonstrate “self-help” through cost-cutting, financial restructuring or new management. The fund also invests in businesses that have simply fallen out of favour with the market and have attractive valuations. The manager focuses on identifying the catalysts that will bring about a recovery in earnings in addition to re-rating. All investments will have strong franchises and quality management – company meetings are an important part of the process. Other areas for analysis include directors' dealings and details of cross shareholdings – the manager looks for alignment of interest between management and shareholders. The fund has a sell discipline which includes price targets for every stock. The portfolio is constructed in a way that assigns higher weightings to stocks with greater upside potential.

Stuart is a founding partner of Artemis and has managed this fund since inception. His long-term track record is strong, but the financial crisis and subsequent monetary easing has provided a headwind to the value approach and returns have moderated. Consequently we have assigned a one star (switch) rating to the fund.

Manager research

Average monthly relative returns

  • 15/16 -0.22%
  • 16/17 -0.34%
  • 17/18 -0.48%
  • 18/19 0.16%
  • 19/20 0.34%

Bestinvest MRI

  • 3 years 0.01%
  • 5 years -0.11%
  • Career 0.39%
  • 3 years 59.50%
  • 5 years 43.60%
  • Career 99.20%

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

Derek Stuart

After graduating from Heriot-Watt University in 1990, Stuart trained as a fund manager at Ivory & Sime. In 1992 he began managing UK equity income portfolios in a team that was responsible for over £1bn in assets. After a period of investing in mainly blue chip stocks for these income portfolios, he moved on to small and mid cap portfolios before leaving in March 1997. He is a co-founder of Artemis.

Track record

Derek Stuart has 20.6 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.39%. During the worst period of relative performance (from January 2014 - July 2019) there was a decline of 19% relative to the index. The worst absolute loss has been 38%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance

Absolute -38.00% (May 2007 - February 2009)
Relative -19.00% (January 2014 - July 2019)

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

4.9388% Astrazeneca Plc
4.6589% Prudential Plc
4.265%3 i Group Plc Ord
4.2591% Tesco
3.9036% Persimmon
3.852% British American Tobacco
3.8297% Computacenter
3.7922% Barclays
3.6437% Oxford Instruments
3.4775% Qinetiq Group
Source: Trustnet

Sector breakdown

Financials 13.00%
Support Services 13.00%
Travel 7.00%
Tobacco 6.00%
Food & Drug Retailers 6.00%
Pharmaceuticals 6.00%
Life Insurance 5.00%
Electronic & Electrical Equipment 5.00%
Software 4.00%
Household Goods 4.00%

Portfolio

Typically 60-80 stocks.

Constraints

Max 5% in any one stock (typically less than 3.5%). There are no other formal restrictions placed upon the fund.

Key Investor Information

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