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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Artemis SmartGARP Global Smaller Companies Fund 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Artemis SmartGARP Global Smaller Companies Fund)

Primary Source Intelligence • Q3 2026 Letter Analysis

Artemis SmartGARP Global Smaller Companies Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Artemis SmartGARP Global Smaller Companies Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+8.8%

YTD+22.9%

Annualized+18.9%

Positioning StanceBULLISH

Market CapSmallCap

GeographyGlobal, Emerging markets, US

Digest Analysis

Quick Take

"Global small-cap equities present widespread valuation mispricings where earnings growth matches large-cap peers despite persistent multiple compression and structural analyst under-coverage."

Executive Summary

The Artemis SmartGARP Global Smaller Companies Fund generated a net return of 8.8% in the third quarter of 2026, significantly outperforming the MSCI AC World Small Cap index, which declined 3.3%. Year-to-date, the strategy has delivered a net return of 22.9% against a 13.8% gain for the benchmark. Fund positioning reflects an active overweight stance in oil and gas and mining companies, alongside an underweight allocation to healthcare and technology. Geographically, the portfolio is oriented towards China, Taiwan, the United Kingdom, South Korea, and Brazil, while holding a substantial underweight position in the United States. The investment team emphasizes that global small caps provide compelling opportunities in profitable, cash-generative businesses that have been neglected by broad market participants. While small-cap earnings have expanded at rates comparable to large-cap peers in recent years, their equity valuations remain deeply discounted. Through its SmartGARP process, the strategy systematically screens for companies exhibiting improving financial metrics, upward analyst revisions, and reasonable profit multiples that remain overlooked by mainstream Wall Street research coverage. During the quarter, portfolio turnover was driven by bottom-up profit momentum shifts. The managers initiated new holdings in LG Innotek, Playtech, INDUS Holding, Newborn Town, and POSCO International, where earnings projections strengthened while valuations remained attractive. These buys were funded by fully divesting positions in Celanese, Lear, WH Group, Huayu Automotive, and Daifuku due to softening growth expectations or superior capital deployment alternatives elsewhere. Performance leaders included HF Sinclair, Par Pacific, and Kolmar Korea, while PROG Holdings and Collegium Pharmaceutical served as the primary performance detractors.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

45%

CautiousHigh

Moderate (45%)

Portfolio construction relies on a systematic, diversified quantitative SmartGARP screening process across global small-cap equities rather than high single-stock concentration. Holdings are initiated and exited based on incremental profit revisions, and individual positions are not given sized weights in the commentary.

Growth Outlook

70%

BearishBullish

Bullish (70%)

Management expresses decisive optimism regarding global smaller companies, pointing out that share prices are low relative to underlying profits compared to large caps. They see high opportunity in profitable businesses overlooked by traditional Wall Street analysts.

Risk Appetite

70%

DefensiveAggressive

Balanced (70%)

The portfolio maintains high equity exposure with pronounced tilts into cyclical sectors like energy, mining, and emerging markets including China, South Korea, and Brazil. The managers actively added technology holdings over the quarter as new bottom-up opportunities emerged.

Capital Deployment

50%

De-riskingDeploying

Net Neutral (50%)

Capital deployment is net neutral, as new entries in LG Innotek, Playtech, INDUS, Newborn Town, and POSCO were directly funded by selling existing holdings like Celanese, Lear, and Daifuku. Cash levels were maintained in equilibrium without drastic expansion or contraction.

Forward Guidance

65%

CautiousExpansionary

Expansionary (65%)

Management shows an active bias toward recycling capital from mature or slowing businesses into companies with rising profit estimates and attractive multiples. New purchases across multiple countries indicate ongoing willingness to selectively deploy capital.

Language Signal

68%

BearishBullish

Bullish (68%)

Language leans constructive, highlighting terms such as profitable, cash-generative, reasonable multiples, opportunities, and improving prospects. Downside language is confined primarily to routine regulatory risk warnings and slowing growth in divested positions.

Perceived Risk

35%

Low RiskElevated

Moderate Risk (35%)

The managers view broader economic fears around small-cap risk as overstated, emphasizing that the asset class contains established, self-funding businesses. Macro risk commentary is largely limited to standard disclosures on currency, market volatility, and emerging market governance.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

The team highlights broad opportunity sets created by earnings results and shifting profit expectations across numerous countries and industries. Under-researched small caps provide a steady flow of candidates for the SmartGARP model.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The fund explicit states an objective to grow capital over a five-year horizon. Investment rationale focuses on long-term cash generation and structural multiple normalization rather than short-term trading catalysts.