Artemis Global Select Fund update

Source for all information: Artemis as at 30 June 2025, unless otherwise stated.

Fund objective

The fund’s objective is to grow capital over a five-year period.

Performance

The US led global stockmarkets lower at the start of the quarter, due to fears about the impact of the tariffs (a tax on imports) announced by Donald Trump on 'Liberation Day'. The subsequent postponement and reduction in these tariffs meant the fall quickly turned into a recovery and it was the dollar rather than the S&P 500 that was the real victim of all the uncertainty: while the index returned to its starting level for 2025 in local currency terms, the dollar had its worst first half of the year in more than five decades¹. For once, investors were better served by allocating their money to other regions².  

We believe the main message for investors to take away from the quarter is that the market has firmly entered a period in which economic concerns are driving asset prices. Worries over the future direction of the US, epitomised by the moves on tariffs and the passing of the One Big Beautiful Bill Act have, in our view, resulted in asset allocators being forced to question their exposure to the world's largest economy. 

The Artemis Global Select Fund made 4.2% in the quarter, compared with 5.0% from its first benchmark, the MSCI All Country World Index³, and 5.3% from its second benchmark, the Investment Association Global sector⁴ average.     

For full five-year discrete performance, please see the table below. Please remember that past performance is not a guide to the future. 

Negatives  

The two biggest detractors during the period were fintech Fiserv and healthcare provider and insurer UnitedHealth.  

Shares in Fiserv fell after its Clover business, which provides hardware and software payment solutions to small and medium-sized businesses, experienced a slowdown in sales growth⁵. Having previously taken some profits in the company, we added to our position on the weakness: we believe the slowdown to be temporary and other investors to have overreacted. 

In its Q1 results, UnitedHealth announced another unexpected knock to profits from higher usage of its healthcare services⁶, which caused us to re-evaluate the longer-term investment case. Later in the quarter, its shares sold off further when chief executive Andrew Witty unexpectedly stepped down and guidance for 2025 was suspended⁷. We exited our position given all the uncertainty. 

Positives 

Semiconductor shares rebounded strongly during the quarter, with SK Hynix, TSMC, Nvidia and Texas Instruments among our top 10 contributors. We only bought into the latter stock in April – see the 'Activity' section below for more details.  

Ryanair delivered strong quarterly results which reiterated positive trends for 2025 in both ticket pricing and demand. The company was also added to the MSCI World Index at the end of May, which should help boost ownership among investors. 

Digital bank Nu Holdings benefited from a rebound in Latin American markets as fears over tariff threats rescinded, most notably in Mexico where Trump did not dismantle the United States-Mexico-Canada Agreement (USMCA). We believe this decision implied a pragmatic angle in the US president's ideology where he refrained from targeting its biggest trading partners. In addition, Nu is ramping up its fintech banking model in Mexico⁸, which is potentially its biggest market.  

Activity 

We initiated two major positions in the quarter – Texas Instruments and Sandoz. 

Texas Instruments designs and manufactures analogue chips and semiconductors that are based on older technologies but are ubiquitous in everyday electronic devices. 

Our investment case centres on two aspects:  

1. We believe we are at the trough of the industrial cycle, while inventory levels have been run down⁹. 
2. Texas Instruments is coming to the end of a heavy investment cycle in which it has spent significant amounts of money building factories in the US¹⁰. As production ramps up, better utilisation should feed through to higher margins and returns.  

Pharmaceutical company Sandoz was spun out of Novartis in 2023¹¹. It manufactures and distributes generic and biosimilar medicine (a biological drug that is similar to medicine that has already been approved) for the treatment of diseases such as cancer, diabetes and arthritis.  

Key to the investment case of Sandoz is the projected growth in biosimilars over the next few years, with many biological medicines coming off patent¹². Yet we believe none of this is reflected in the share price. As the business model shifts towards this faster-growing side of the business, we think profits should grow more quickly and the share price should rise.   

We also continued to build our holding in Tetra Tech, which provides management consulting and engineering services for industrials. 

Outlook 

Our message at the beginning of this year was that corporate profits looked healthy but the economic and political environment would be the main driver of asset prices. We are now halfway through the year and we think we were right.  

Looking at corporate profits, consensus estimates are for 10% EPS (earnings per share) growth over the course of the year¹³. 

Nevertheless, share prices continue to be volatile, with the following factors playing a part: 

• Tariffs – the market still does not know the end point for every nation, due to endless rounds of negotiations with the US. We think an effective rate of 10% to 20% on US imports seems to be priced in.  
• Government bond yields – stockmarkets remain calm despite the potential for bond yields (borrowing costs) to rise given the step-up in unfunded government spending. Bond yields have an inverse relationship with prices.  
• Growth – the path of global growth remains unclear. A recession is still a risk but we believe growth may surprise to the upside if fiscal stimulus (government spending) is well received.  

Where we have seen more weakness in fundamentals is in Europe. Consensus EPS growth for 2025 has been revised down to 1% due to euro strength and lower earnings momentum in industrials and financials¹⁴. However, after many years of lost growth following the Global Financial Crisis, we believe the European story is better balanced. We are starting to find more interesting ideas in the stockmarket as we incorporate the potential for better profit growth into 2026 and beyond.