On the 7th March the Artemis European Growth Fund will celebrate its third birthday. As at the end of January the fund is second in its sector having returned 21.4% against the FTSE Europe (ex UK) return of -20.7%.*
With so much scepticism surrounding Europe, investors will want to put moneyinto funds that beat the market and not merely keep pace with it. Investing successfullythroughout Europe requires in-depth knowledge of the region, as well as accessto top quality research and support. This is where Artemis can help.
SmartGARP
Instead of following the crowd and investing in Europe purely for the purpose of diversification. Philip Wolstencroft and Peter Saacke, the managers of the Artemis European Growth Fund, use a unique system to help spot the real potential that exists.
SmartGARP, as it is known, was developed by Philip over a decade ago and has proved its worth in both bear and bull markets alike. It roughly stands for Sentiment, Momentum, Revisions, Top Down and Growth at a Reasonable Price. It assesses around 2000 stocks from across Europe and the UK and narrows them down to a list of about 50. Each European stock is scored taking into account some 109 bits of data. Those that score highly are considered for inclusion and similarly those that score badly are also examined closely with a viewto selling them if they are held within the portfolio.
As a result of this systematic process there is no emotional attachment to a particular share, no investment style restraints and no bias towards any particular type or size of company. Another major benefit to the managers from using SmartGARP is the fact that it removes the need to visit companies personally and frees up their time to actively manage the Fund – something they do best.
What is the Fund’s current focus?
At present the Fund holds about 54 stocks. The managers look at Europe on a sector basis as countries tend to drop out. The Fund is currently very underweight Switzerland and overweight Belgium. As far as market cap is concerned, last year there was a bias towards mid caps but this has been reduced recently, with the large cap exposure rising to around 55%, as it is no longer so easy to find desirable companies in the mid cap arena
Outlook for the Fund
At Artemis we do not try and call how markets will perform over the next 12 months and it is always better to be invested for the long-term. However, we are forecasting average returns not fantastic growth. As such, performance of the fund will not be reliant on economic recovery but be based on pickingindividual stocks using SmartGarp.
Something else worth remembering when considering the Artemis European Growth Fund is that all our fund managers invest in their own funds which means theyhave great belief in what they are trying to achieve.
click here for more details*source Lipper, bid to bid, with net income reinvested, 7/3/01 to 30/1/04
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