Artemis UK Smaller Companies Fund
Fund Manager's Comment
Data as at 30 December 2011
Small caps ended the year with a rather poor performance in December, as with the year as a whole. However, our fund fell less than its benchmark in December and managed a small rise for the year. The main detractor from performance in the month was from our unquoted Russian gas producer, Vostok Energy, whose IPO plans were delayed due to the current poor stockmarket conditions; and they completed a small fund raising at a discounted price. Our valuation policy required us to revalue our holding to this level. We still hope the company can IPO this year so that we can realise the value of its gas reserves.
Offsetting this, the best performers in the month were REA (Indonesian palm oil producer), Brooks Macdonald (private client pensions manager) and Kenmare Resources (Mozambique ilmenite miner). All three shares had been weak the previous month and so were just rebounding from this without any major new news. While we can't add much value to the debate about the chances of a secondary banking crisis in Europe, the valuation of our holdings looks ever more attractive as evidenced by the recent pick-up in takeover activity. We feel the 8.5% free cash-flow yield and 28% return on capital which on average our companies are generating should hold us in good stead in these testing economic times.
Co-Fund Manager
Mark Niznik
Co-Manager of the Artemis UK Smaller Companies Fund Fund since 22 October 2007
Awards
UK Smaller Companies PDFKey Facts
| IMA Sector | UK Smaller Companies |
|---|---|
| Sedol Number | 0258359 |
| Fund Size (offer basis) | £289.8m |
| Historic yield | 0.70% |
| Unit offer price | 712.96p |
| Unit bid price | 660.69p |
| Valuation (UK business days) | 12:00 |
| Minimum lump sum investment | £1,000 |
|---|---|
| Minimum monthly investment | £50 |
| Launch | 3 April 1998 |
| Launch price | 100p |
| Preliminary charge | 5.00% |
| Annual Management Fee | 1.50% |
| Unit type | Accumulation |
| Accumulation date | 28 February |
| Total Expense Ratio | 1.59% |
Data as at 30 December 2011.
Performance
| Since Launch* | 5 Years | 3 Years | 1 Year | 6 Months | |
|---|---|---|---|---|---|
| UK Smaller Companies Fund (TR)† | 593.7 | -9.4 | 78.9 | 0.9 | -8.6 |
| Hoare Govett ex IT (TR)† | 149.4 | 1.8 | 87.7 | -9.1 | -14.0 |
| Sector Average | 120.1 | -1.2 | 78.4 | -9.1 | -13.4 |
| Position in Sector | 2 | 36 | 22 | 5 | 5 |
| Funds in Sector | 31 | 50 | 57 | 58 | 59 |
| Quartile | 1 | 3 | 2 | 1 | 1 |
Please remember that past performance is not a guide to the future.
* Data from 3 April 1998. Source: Lipper Limited, bid to bid in sterling with net income reinvested to 30 December 2011. All figures show total returns. †Percentage Growth. Sector is IMA UK Smaller Companies.
Percentage Growth
Artemis UK Smaller Companies Fund Fund 12 Months to 31 December 2009
| 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|
| 0.9 | 24.3 | 42.7 | -50.5 | 2.4 |
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 December 2011.
Data from 3 April 1998. Source Lipper Limited, bid to bid in sterling with net income reinvested to 30 December 2011.
Asset Allocation*
*Without cash. Source: Internal
Top Ten Holdings*
| Hurricane Exploration plc | 4.1% |
|---|---|
| Vostok Energy | 3.3% |
| H&T Group | 3.1% |
| Brooks Macdonald Group plc | 2.9% |
| Hamworthy | 2.9% |
| Cranswick | 2.8% |
| REA Holdings | 2.8% |
| Mears Group | 2.8% |
| Domino Printing Sciences | 2.6% |
| Globeop Financial Services | 2.5% |
* Without cash.
Source: Internal.
Market Sector Split*
| Industrial Goods & Services | 25.7% |
|---|---|
| Financial Services | 10.8% |
| Oil & Gas | 10.3% |
| Technology | 10.1% |
| Media | 9.4% |
| Food & Beverage | 9.3% |
| Real Estate | 5.1% |
| Healthcare | 5.0% |
| Retail | 4.7% |
| Other | 9.6% |
* Without cash.
Source: Internal.
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.
