Artemis Capital ups British large-cap weighting

The Artemis Capital fund has increased its weighting towards British larger companies to 79%.

Jacob de Tusch-Lec, co-manager of the 777.8m fund with Mark Tyndall, says this represents a large shift from a year ago, and it has accelerated over the past six months.

“If it is not an all-time high for this fund, it is very close to one,” he says. “Mid-caps have outperformed large caps for seven years running, so they have become increasingly expensive and large-caps relatively cheap.”

De Tusch-Lec says that banks are another theme the fund has picked up on recently, largely through its Smart Garp research model.

“Last year, or even six months ago, there were fears about the UK housing market, a longer-term US yield curve and global liquidity contracting. This bad news has been reflected in the price, but now they are doing well,” he says.

Another theme for the Artemis Capital fund is the increase in corporate spending. De Tusch-Lec says he is interested in companies affected by this increase – for example, airlines and recruitment.

“Companies have increasingly started to reinvest, whether it be in machinery, people or running their business,” he says. “This has been happening over the past year or so and has accelerated over the past six months.”

De Tusch-Lec, who joined Artemis in November 2005, says there is a contrarian element to the fund. “We have contrarian positions in banks and mining, for example, but it is all about good value in a sector,” he says. “It is also about whether the stocks come out with the right growth and value mix, positive earnings revisions and momentum.”