Bestinvest has dropped its ratings on two Artemis funds, citing problems with the firm’s investment process SmartGarp.
Global growth and European growth have struggled in the past three years and are fourth quartile in their IMA sectors.
SmartGarp was designed by European growth fund manager Philip Wolstencroft and operates on the capital, European growth and global growth funds. The quant-driven process looks at 2,000 analysts globally on a daily basis. Each stock is scored and ranked to give a snapshot of a firm’s financial outlook.
The global growth fund, managed by Peter Saacke, has fallen by 12.3 per cent in the past three years in the IMA global growth sector, compared with an average rise of 5.6 per cent. European growth has fallen by 26.5 per cent against the IMA Europe ex UK sector average fall of 2.1 per cent.
Bestinvest analyst Tom White says: “A move into defensive stocks at the end of 2008 was particularly harmful as it meant the funds failed to participate fully in the market recovery.”
An Artemis spokesman says the company acknowledges the underperformance but is confident it is starting to turn it round.