How do we identify stocks and sectors?

The fund managers at Artemis work closely together, drawing on each other's talents and knowledge. Each brings a different mindset to the forum but basically there are two routes taken when searching for opportunities that offer potential re-rating and momentum.

Sentiment, Momentum, Revisions, Top Down & Growth at a Reasonable Price.

The most pragmatic or unemotional element of the team process is the SmartGARP system introduced by Philip Wolstencroft who runs the Artemis European Growth Fund.

Simply put, SmartGARP provides quantitative analysis of what's going on in the markets. Philip believes that the individual parts within the process, such as the more publicised process known simply as GARP, tend to provide information in a volatile or lumpy fashion. However, data run through the more rigorous process of SmartGARP provides us with a steadier and more profound insight into which sectors and companies are likely to go up or down. Fundamentally, data is analysed in a systematic and wholly objective fashion and provides logical and three-dimensional results.

Searching for bonuses and value

All of the fund managers use the SmartGARP system, although some more than others depending on the fund's mandate. Philip, the originator of the system, having identified a stock, may verify his findings by speaking to analysts and other members of the team, but unlike his colleagues and the majority of the fund management fraternity, will not visit the management of a company. His skills, he says, do not lie therein whereas John Dodd, manager of Artemis UK Smaller Companies Fund and Derek Stuart, manager of the Artemis UK Special Situations Fund, for instance, glean a great deal from such visits.

The team work under the same assumptions and share the same information. They work together, yet are prepared to carry the responsibility for their own decisions whether they are made based on information gleaned from a company visit, industry and market wide information, individual analysis, SmartGARP indicators or a combination of all or some of these elements. Ultimately, the key to the Artemis process is independent decision making.

For more detailed and lengthy information about Artemis, please read one of our brochures.