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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Artemis US Select outperformed in Q4 with 10.8% returns, driven by strategic Magnificent 7 positioning and diverse stock selection including independent power producers and Goldman Sachs. Managers reduced Apple exposure on China risks while adding cyclical names."
The Artemis US Select Fund delivered strong performance in Q4 2024, returning 10.8% versus 9.6% for the S&P 500, bringing full-year returns to 29.5% versus 27.2% for the index. The fund benefited from strategic positioning in the Magnificent 7, with Nvidia as the top contributor, while also generating returns from a diverse mix including independent power producers Vistra and Constellation Energy, Goldman Sachs, and Fiserv. The managers increased their Goldman Sachs position ahead of the election, anticipating benefits from improved M&A activity under Trump administration policies. Key portfolio changes included significantly reducing Apple exposure due to China supply chain risks and tariff concerns, while adding International Paper and topping up SAIA and KKR positions. Despite acknowledging risks from renewed inflation and Trump policy volatility, the managers remain optimistic for 2025, citing good US economic health, declining rates, and estimated 10% earnings growth. Their focus continues on stock selection to identify businesses that will exceed earnings estimates.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The managers demonstrate high conviction through concentrated positioning with Goldman Sachs as their 'largest active bet' and specific position sizing decisions like reducing Apple to 'maximum underweight.' They name specific holdings, explain thesis rationale, and make decisive portfolio changes. The letter discusses 15+ named positions with clear investment reasoning for each.
Growth Outlook
The managers acknowledge good US economic health and expect 10% earnings growth, but temper optimism with explicit risks around inflation and Trump policy volatility. The tone is constructive but cautious, noting back-to-back 20% years and analyst expectations of 12% returns in 2025.
Risk Appetite
Portfolio positioning shows selective risk-taking with increased Goldman Sachs exposure but significant Apple reduction to maximum underweight. The managers are making tactical adjustments rather than broad risk-on positioning, indicating measured rather than aggressive risk appetite.
Capital Deployment
The fund shows moderate deployment activity with new purchases in International Paper and topping up positions in SAIA and KKR, funded by reductions in Apple and complete sales of Linde and Elevance. This represents capital rotation and selective deployment rather than aggressive cash deployment or significant de-risking.
Forward Guidance
The managers express optimism about fund prospects through 2025 and are actively deploying capital in selective names like International Paper while topping up existing positions. However, they acknowledge important risks that could impact performance, showing selective rather than aggressive deployment bias.
Language Signal
Language is balanced with positive terms like 'optimistic about prospects' and 'good economic health' offset by risk language including 'volatile behaviour,' 'renewed inflation,' and 'challenging set-up.' The net balance slightly favors constructive language but remains measured.
Perceived Risk
The managers explicitly identify multiple meaningful risks including renewed inflation impact on bond markets, Trump policy volatility requiring constant monitoring, and structural challenges from market concentration. These are named, specific concerns with detailed discussion rather than brief mentions.
Opportunity Density
The managers see selective opportunities across diverse sectors from technology to independent power producers, making new investments and tactical adjustments. However, they acknowledge the challenging environment for active managers due to market concentration, suggesting a moderately selective opportunity set.
Time Horizon
The fund demonstrates a multi-year investment approach with holdings like independent power producers positioned for future data center deals and Formula One benefiting from long-term US engagement trends. While they monitor quarterly results and make tactical adjustments, the underlying investment theses appear to be 2-3 year in nature.
