Fund Manager's Comment
Data as at 31 October 2008
We used the market’s weakness to add to some of our favourite holdings during the month. Among them was Smiths Group, the diversified industrial company. It produces medical and detection equipment and has specialist engineering and electronics businesses. Phillip Bowman joined recently as Chief Executive and has set about improving the returns at the various subsidiaries. He has laid out a series of medium term margin and revenue targets, and is aligning his management team’s remuneration with the achievement of these targets. As with many of our investments, there is a high degree of ‘self-help’ at Smiths. This should produce results — even in a period of slowing economic growth.
We also added to Close Brothers, a well-financed bank, where the share price has suffered along with the rest of the Financial sector. Unlike the rest of the banking sector, Close remains well capitalised and so is well positioned to pick up profitable business as others withdraw capital. We did unfortunately suffer a profits warning from Prosperity Minerals, the Chinese cement producer, as slowing growth in China has reduced demand for their products. The worsening global economy will impact on the trading of a number on companies and the coming weeks will see a number of negative trading statements. But we intend to exploit some of the opportunities that arise from these statements.
Visit the Artemis Film Club to listen to Derek Stuart talking about the UK Special Situations Fund.
UK Special Situations PDFKey Facts
| IMA Sector | UK All Companies |
|---|---|
| Sedol Number | 0219226 |
| Fund Size (Offer basis) | £677.8m |
| Historic Yield | 2.0% |
| Unit Offer Price | 246.48p |
| Unit Bid Price | 230.07p |
| Valuation | 12 noon daily (UK business days) |
| Min. lump sum investment | £1,000 |
|---|---|
| Min. monthly investment | £50 |
| Launch | 9 March 2000 |
| Launch price | 100p |
| Initial charge | 5.25% |
| Annual Management Charge | 1.5% |
| Unit type | Accumulation |
| Accumulation date | 28 February |
Data as at 31 October 2008.
Performance
| Since Launch* | 5 years | 3 years | 1 year | 6 months | |
|---|---|---|---|---|---|
| UK Special Situations Fund (TR) † | 142.2 | 26.1 | -8.3 | -35.3 | -25.3 |
| FTSE 100 (TR) † | -11.5 | 21.5 | -8.4 | -32.3 | -26.7 |
| FTSE All Share (TR) † | -8.7 | 21.3 | -9.3 | -34.4 | -28.2 |
| Sector Average † | -17.8 | 8.8 | -16.2 | -38.5 | -31.7 |
| Position in Sector | 1 | 33 | 52 | 103 | 28 |
| Funds in Sector | 179 | 252 | 281 | 326 | 331 |
| Quartile | 1 | 1 | 1 | 2 | 1 |
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 31 October 2008. All figures show
total returns. †Percentage Growth. Sector is IMA UK All Companies.
Percentage Growth
Artemis UK Special Situations Fund 12 Months to 30 September
| 2008 | 2007 | 2006 | 2005 | 2004 |
|---|---|---|---|---|
| -23.2 | 15.2 | 12.1 | 27.5 | 17.0 |
Further Discrete Performance periods.
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 31 October 2008
Data from 9 March 2000. Source Lipper Limited, bid to bid in sterling with net income reinvested to 31 October 2008.
Asset Allocation*
*Without cash. Source: Internal
Top Ten Holdings*
| Royal Dutch Shell 'B' | 6.2% |
|---|---|
| BP | 5.9% |
| GlaxoSmithKline | 5.7% |
| AstraZeneca | 4.8% |
| National Grid | 4.4% |
| Vodafone | 4.2% |
| HSBC | 3.7% |
| FirstGroup | 3.6% |
| BAE Systems | 3.3% |
| BG Group | 2.6% |
* Without cash.
Source: Internal.
Market Sector Split*
|
|---|
* Without cash.
Source: Internal.
% Variance†*
| FirstGroup | 3.4% |
|---|---|
| National Grid | 3.0% |
| Royal Dutch Shell 'B' | 2.5% |
| Invensys | 2.3% |
| Smiths Group | 2.3% |
| BAE Systems | 2.3% |
| Salamander Energy | 2.0% |
| Blueheath | 1.9% |
| Trading Emissions | 1.8% |
| Pearson | 1.7% |
* Without cash.
† Positive variance between stock % held in the fund versus FTSE All-Share.
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.
