The Artemis Global Select team has overhauled the fund’s eight long-term investment themes, in its first review since former manager Simon Edelsten retired last year.
The £268m fund is now co-managed by Alex Stanić (pictured), Swetha Ramachandran and Natasha Ebtehadj.
New themes in the portfolio are now: ‘financial inclusion & digital finance’, which comprises 16.7% of the portfolio; ‘leading consumer brands’ at 15.2%; ‘scale matters’ at 14.4%; and ‘semiconductor ubiquity’ with a 13.6% weighting. The team has also added smaller allocations to three other new themes: ‘special situations’ at 9.5%, a ‘more efficient world’ at 9.2% and ‘software ubiquity’ at 8% of the portfolio.
Elsewhere, the theme of healthcare costs – which comprises 12.3% of the fund – has been amended to ‘healthcare costs and innovation’.
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Alex Stanić, head of global equities at Artemis and the fund’s lead manager, said: “The themes have evolved but they are still diversified and each benefits from a long-term tailwind that should endure regardless of the economic cycle. Within these themes we pick undervalued, quality companies capable of exploiting those tailwinds and delivering strong growth.
“Many people recognise the benefit of thematic investing, but the problem is that the weather changes. This is why single-theme funds top the tables one year and then often dive a couple of years later.”
New themes
‘Financial inclusion’ and ‘digital finance’ were paired together because the team believes they are inter-related, as digital banking becomes synonymous with increasing the number of bank accounts across developing economies, for example.
The ‘leading consumer brands’ theme is a subset of the Artemis Consumer Brands fund, which was launched for Swetha Ramachandran last year, after she moved from to Artemis from GAM where she managed the firm’s Luxury Brands fund.
‘Scale matters’ encompasses companies which have a “massive network effect advantage”, according to Stanić, such as portfolio holding Amazon, while ‘semiconductor ubiquity’ in a play on the world’s need for ever-more complex chips. Here, the team holds Taiwan Semiconductor Manufacturing Company (TSMC).
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‘Healthcare costs and innovation’ taps into the ageing population alongside long-term technological advancements, with weight loss drug manufacturer Novo Nordisk fitting into this category, while ‘a more efficient world’ encompasses companies involved with automation, and which can reduce energy costs and environmental impacts. A holding within this theme is Keyence, which manufactures sensors and measuring equipment.
‘Software ubiquity’ seeks to take advantage of the rising percentage of company budgets being spent on software – with Microsoft an example holding in this space – while ‘special situations’ allows for “idiosyncratic opportunities” which don’t fit into the other core themes. This includes portfolio holding AENA, which owns European airports and is set to benefit from long-term travel growth, according to the Global Select team.
Stanić added: “The beauty of a model like ours is that we can build a global portfolio around a diverse range of themes and change or modify them nimbly as circumstances change. This combination of diversity and flexibility builds resilience and can help us to deliver more consistent performance.”
