Forensic accounting meets bottom-up stock-picking October 2014 Artemis UK Growth Fund Tim Steer, fund manager,Paul Casson, assistant fund manager Fund overview The Artemis UK Growth Fund is actively managed to produce long term growth. Its distinctive investment process combines quantitative screens with rigorous fundamental analysis. The result is a focused portfolio of UK equities that has little in common with market benchmarks. Reasons to invest A distinctive process The managers’ proven investment process combines quantitative analysis of investment opportunities across the UK market with detailed fundamental research at a company level. ‘Multi-cap’ strategy A flexible, multi-cap investment strategy only holds those stocks whose value the managers believe will rise significantly over the long term. It will never hold a stock simply because it represents a significant proportion of the index. Flexibility to ‘go short’ To enhance returns, the managers have the flexibility to hold short positions in selected companies. This allows them to profit from falling – as well as rising – share prices. Independent validation The fund is rated ‘Silver’ by Morningstar OBSR. Manager Tim Steer is A-rated by Citywire. Fund performance (%) Since launch* Tim’s tenure† 3 years 1 year Artemis UK Growth 329.7 96.4 63.3 7.4 FTSE All-Share TR 111.9 66.7 47.9 6.1 FTSE 100 TR 88.2 61.5 44.2 6.1 Sector average 115.1 69.7 52.2 5.8 Position in sector 7/97 29/236 59/252 78/262 Quartile 1 1 12 Value of £1,000 invested at launch to 30 September 2014 £5,000 £4,500 £4,000 Artemis UK Growth (Class R, acc units) £3,500 £3,000 £2,500 £2,000 £1,500 £1,000 £500 FTSE All-Share TR £0 Apr-98 Apr-02 Apr-06 Apr-10 Apr-14 *Fund launch date 3 April 1998. †Performance over Tim’s tenure has been taken from 31 August 2009, the point at which the fund reflected Tim’s stock selection. Source: Lipper Limited, class R accumulation units, bid to bid in sterling with net income reinvested to 30 September 2014. Sector is IMA UK All Companies. Benchmark is FTSE All-Share TR. Proven performer Since Tim Steer took over the Artemis UK Growth Fund it has delivered top quartile performance, outperforming the benchmark by 29.7% and the sector average by 26.7%.† “Artemis UK Growth is a compelling offering for investors seeking exposure to UK equities.” Source: Morningstar OBSR report, October 2014. Tim Steer What makes this fund different? Quantitative rigour A proprietary quantitative stock screen, MARKET, ranks every stock in the FTSE All-Share index against a series of metrics including measures of: valuation (such as p/e multiples, dividend yield and price-to-cashflow); financial strength (cashflow, interest cover, gearing); revisions in consensus forecasts (which are double weighted); earnings growth and market-timing indicators. Cross-checked ideas MARKET also provides a useful tool for cross-checking investment ideas derived from other sources, such as company meetings, third-party analysts or from top-down themes. Focus on fundamentals Prior to investment, Tim Steer and assistant fund manager Paul Casson subject every potential holding to intense fundamental analysis, focusing on cashflow analysis and subjecting business models to financial stress tests. Tim is a qualified accountant. His forensic scrutiny of company accounts also generates ideas for potential ‘short’ positions. Genuinely active A flexible approach to portfolio construction means that the fund’s largest holdings are those in which the managers have the highest degrees of conviction – not necessarily those with the largest market caps. This is reflected in its high ‘active share’*. *Source: Artemis. Active share is defined as the fraction of a fund that is invested differently than its benchmark. Active share will range between zero (the portfolio is identical to the benchmark) and 100% (the portfolio is entirely different from the benchmark). The active share of the Artemis UK Growth Fund as at 30 September 2014 was 71.15%. Key facts Launch date 3 April 1998 IMA sector IMA UK All Companies Benchmark FTSE All-Share TR Fund size (mid-price basis) “Steer brings a wealth of experience and has successfully navigated this fund through many different market conditions.” Source: Morningstar OBSR report, October 2014 £714.0m Class R units Class I units Annual management charge (AMC) 1.50% 0.75% Ongoing charge (which includes AMC) 1.57% 0.82% Source: Artemis as at 30 September 2014. For further information, visit us at artemis.co.uk, email [email protected], or call 0800 092 2090 THIS INFORMATION IS FOR PROFESSIONAL ADVISERS ONLY and should not be relied upon by retail investors. The fund may use derivatives to protect the value of the fund, to reduce costs and with the aim of profiting from falling prices. The fund may invest in the shares of small and medium sized companies. Citywire rating: Source & Copyright: CITYWIRE. Tim Steer is A rated by Citywire for his 3 year risk adjusted performance for the period 31/08/2011 – 31/08/2014. Issued by Artemis Fund Managers Limited which is authorised and regulated by the Financial Conduct Authority (www.fca.org.uk), 25 The North Colonnade, Canary Wharf, London, E14 5HS. Morningstar rating as at 30 September 2014. 14-0455/10/14/JL