Artemis UK Special Situations Fund
Fund Manager's Comment
Data as at 30 June 2010
A busy and volatile June. Firstly BP. We commented last month that we had bought shares – somewhat prematurely – as the price fell after the oil spill. We have added to the holding in June and our weighting now stands at 3% of the fund. We fully recognise the disaster that has taken place and the costs that will be incurred to resolve it. We also recognise these costs will be significant. However, the costs will be paid out over a number of years and we believe that the company’s cashflow will be sufficient to meet these costs. So at the current valuation, the liability is more than discounted. Bu the shares will remain extremely volatile.
We benefitted over the month from the competitive auction for Chloride. As I write this, Emerson now look to be the victors at a price of 375p/share. On the last day of the month we also benefitted from the positive ruling on the Crestor case for AstraZeneca. Even after the bounce, we feel that the shares still offer value on a price to earnings of 7.5 x and a dividend yield greater than 5%. We have used recent market weakness to add to holdings including Reed and Tate & Lyle, both under new management, and Hunting, where the shares have fallen due to the drilling moratorium in the Gulf of Mexico. Hunting has £310m of cash on its balance sheet which is more than 50% of its current market capitalisation. The balance of the businesses therefore remain lowly valued. We financed these purchases by further sales in Ashtead, which has performed strongly.
Fund Manager
Derek Stuart
Manager of the Artemis UK Special Situations Fund Fund since launch
Co-Fund Manager
Ruth Keattch
Co-Manager of the Artemis UK Special Situations Fund Fund since 1 December 2008
Awards
UK Special Situations PDFKey Facts
| IMA Sector | UK All Companies |
|---|---|
| Sedol Number | 0219226 |
| Fund Size (offer basis) | £998.3m |
| Historic yield | 1.90% |
| Unit offer price | 314.68p |
| Unit bid price | 294.43p |
| Valuation (UK business days) | 12:00 |
| Minimum lump sum investment | £1,000 |
|---|---|
| Minimum monthly investment | £50 |
| Launch | 9 March 2000 |
| Launch price | 100p |
| Preliminary charge | 5.25% |
| Annual Management Fee | 1.50% |
| Unit type | Accumulation |
| Accumulation date | 28 February |
| Total Expense Ratio | 1.57% |
Data as at 30 June 2010.
Performance
| Since Launch* | 5 Years | 3 Years | 1 Year | 6 Months | |
|---|---|---|---|---|---|
| UK Special Situations Fund (TR)† | 209.9 | 23.7 | -16.3 | 11.9 | -2.8 |
| FTSE All-Share (TR)† | 13.7 | 18.7 | -16.2 | 21.1 | -6.2 |
| FTSE 100 (TR)† | 6.6 | 15.8 | -16.2 | 19.8 | -7.4 |
| Sector Average | 7.3 | 13.6 | -18.8 | 19.7 | -4.3 |
| Position in Sector | 1 | 64 | 116 | 288 | 81 |
| Funds in Sector | 152 | 235 | 278 | 301 | 305 |
| Quartile | 1 | 2 | 2 | 4 | 2 |
Please remember that past performance is not a guide to the future.
* Data from 9 March 2000. Source: Lipper Limited, bid to bid in sterling with net income reinvested to 30 June 2010. All figures show total returns. †Percentage Growth. Sector is IMA UK All Companies.
Percentage Growth
Artemis UK Special Situations Fund Fund 12 Months to 31 December 2009
| 2010 | 2009 | 2008 | 2007 | 2006 |
|---|---|---|---|---|
| 11.9 | -9.7 | -17.1 | 23.2 | 19.9 |
Source: Lipper Limited, bid to bid in sterling with net income reinvested. All figures show total returns.
Value of £1,000 invested at Launch to 30 June 2010.
Data from 9 March 2000. Source Lipper Limited, bid to bid in sterling with net income reinvested to 30 June 2010.
Asset Allocation*
*Without cash. Source: Internal
Top Ten Holdings*
| GlaxoSmithKline | 4.1% |
|---|---|
| AstraZeneca | 3.7% |
| Centrica | 3.4% |
| BP | 3.2% |
| Smiths Group | 2.6% |
| London Stock Exchange | 2.3% |
| Reed Elsevier | 2.2% |
| Domino Printing Sciences | 2.1% |
| Lloyds Banking Group | 2.0% |
| Close Brothers | 2.0% |
* Without cash.
Source: Internal.
Market Sector Split*
| Industrial Goods & Services | 23.1% |
|---|---|
| Oil & Gas | 16.1% |
| Healthcare | 10.5% |
| Financial Services | 7.1% |
| Utilities | 6.9% |
| Technology | 6.5% |
| Food & Beverage | 5.3% |
| Retail | 5.2% |
| Media | 4.5% |
| Other | 14.8% |
* Without cash.
Source: Internal.
% Variance†*
| Centrica | 2.4% |
|---|---|
| Smiths Group | 2.3% |
| London Stock Exchange | 2.3% |
| Domino Printing Sciences | 2.0% |
| Close Brothers | 2.0% |
| Salamander Energy | 1.9% |
| Booker Group | 1.9% |
| Babcock International | 1.8% |
| Reed Elsevier | 1.8% |
| Devro International | 1.7% |
† Positive variance between stock % held in the Fund versus FTSE All-Share.
Risk Warning
Issued by Artemis Fund Managers Ltd which is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk), 25 The North Colonnade, Canary Wharf, London E14 5HS and is a member of the IMA. Artemis Fund Managers Ltd is a member of the Artemis Marketing Group. We only market our own unit trusts. The value of an investment, and any income from it, can fall as well as rise as result of market and currency fluctuations and you may not get back the amount originally invested. Investment in the securities of smaller and/or medium sized companies can involve greater risk than is customarily associated with investment in larger, more established companies. The market for securities in smaller companies is often less liquid than that for securities in larger companies, meaning above average price movements both positive and negative can be expected.
All data is sourced internally unless otherwise stated.
The historic yield reflects distributions declared over the past twelve months as a percentage of the mid-market unit price, as at the date shown. It does not include any preliminary charge and investors may be subject to tax on their distributions.
