Artemis Strategic Assets Fund

Half-Yearly Report (unaudited) for the six months ended 28 February 2021 Keep up to date ...

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Company profile Objective To grow the value of your investment by greater than 3% above the Consumer Price Index (CPI) per annum after Artemis is a leading UK-based fund manager, offering a range fees over a minimum five year period. of funds which invest in the UK, Europe, the US and around Investment What the fund • Company shares the world. policy invests in • Bonds • Property and commodities, indirectly by As a dedicated, active investment house, we specialise in investing through exchange-traded notes and collective investment schemes investment management for both and institutional • Other investment funds investors across Europe. • Money market instruments, cash and near cash Independent and owner-managed, Artemis opened Use of The fund may use derivatives to: derivatives • achieve the fund objective, including taking for business in 1997. Its aim was, and still is, exemplary long and short positions investment performance and client service. All Artemis’ • produce additional income or growth • reduce risk staff share these two precepts – and the same flair and • manage the fund efficiently enthusiasm for fund management. • create leverage Where the • Globally The firm now manages some £26.3 billion* across a range fund invests of funds, two investment trusts and both pooled and Industries the • Any segregated institutional portfolios. fund invests in Our managers invest in their own and their colleagues’ funds. Other • 50% to 100% in any combination of limitations company shares, bonds, and indirect This has been a basic tenet of the Artemis approach since specific to property/commodities the firm started. It means that interests of our fund managers this fund • Up to 50% in money market instruments, cash and near cash. are directly aligned with those of our investors. • Up to 30% in short exposures to company shares, but never net short . * Source: Artemis as at 31 March 2021. • Up to 100% in short exposures to bonds, and up to 100% net short to bonds. • 0%-200% gross exposure (long plus short) Fund status in currencies other than Investment • The fund is actively managed. Artemis Strategic Assets Fund was constituted by a Trust strategy • The manager uses discretion to manage the proportion of Deed dated 7 April 2009 and is an authorised unit trust the fund’s assets which are invested in each asset class in response to the manager’s view of market conditions and scheme under the and Markets Act 2000. analysis of wider economic factors. The fund belongs to the category of UCITS schemes as • The manager allocates to, and selects investments in, different asset classes, geographies, industries defined in the Collective Investment Schemes Sourcebook and individual companies and issuers with the aim (‘COLL’) of the Financial Conduct Authority (‘FCA’). of performing well when markets are favourable and preserving capital when markets are poor. • For example, if the manager believes that bond market Buying and selling conditions are less favourable then the fund’s net bond exposure can be reduced by short-selling bonds or by investing a higher proportion in other asset classes. Units may be bought and sold by contacting the manager • The fund can hold large cash deposits by telephone, at the address on page 5 or via the website Benchmarks • UK Consumer Price Index + 3% artemisfunds.com. Valuation of the fund takes place each A widely-used indicator of UK inflation. It acts as a ‘target business day at 12 noon on a forward pricing basis. Investors benchmark’ that the fund aims to outperform by at least 3% per annum over at least five years. are reminded that past performance is not a guarantee of • IA Flexible Investment NR performance in the future and that the price of units and the A group of other asset managers’ funds that invest in similar asset types as this fund, collated by the Investment revenue from them can fall as well as rise. Association. It acts as a ‘comparator benchmark’ against which the fund’s performance can be compared. Management of the fund is not restricted by this benchmark.

3 Risk and reward profile Other information Prospectus Potentially lower rewards Potentially higher rewards Lower risk Higher risk Copies of the most recent Prospectus are available free of charge from the manager at the address on page 5.

Tax information reporting ̥ The fund is in the category shown due to historic volatility (how much and how quickly the value of shares UK tax legislation requires fund managers to provide in the fund may have risen and fallen in the past due to information to HM Revenue & Customs (‘HMRC’) on certain movements in markets, currencies and interest rates). It investors who purchase units in unit trusts. Accordingly, the may not be a reliable indication of the future risk profile fund may have to provide information annually to HMRC on of the fund. the tax residencies of those unitholders that are tax resident ̥ The risk category has been calculated using historic data outwith the UK, in those countries that have signed up to and may not be a reliable indicator of the fund’s future the OECD’s (‘Organisation for Economic Co-operation and risk profile. Development’) Common Reporting Standard for Automatic ̥ A risk indicator of “1” does not mean that the investment Exchange of Financial Account Information (the ‘Common is “risk free”. Reporting Standard’), or the United States (under the Foreign Account Tax Compliance Act, ‘FATCA’). The risk indicator may not fully take into account the following risks and the following may affect fund All new unitholders that invest in the fund must complete performance: a certification form as part of the application form. Existing unitholders may also be contacted by the Registrar should any ̥ Market volatility risk: The value of the fund and any income from it can fall or rise because of movements extra information be needed to correctly determine their tax in stockmarkets, currencies and interest rates, residence. Failure to provide this information may result in the each of which can move irrationally and be affected account being reported to HMRC. unpredictably by diverse factors, including political and For further information, please see HMRC’s Quick Guide: economic events. Automatic Exchange of Information – information for account ̥ Currency risk: The fund’s assets may be priced in holders: gov.uk/government/publications/exchange-of currencies other than the fund base currency. Changes information- account-holders. in currency exchange rates can therefore affect the fund’s value. Value assessment ̥ Special situations risk: The fund invests in companies Artemis Fund Managers Limited (AFML) has conducted a that are in recovery, need re-financing or are suffering detailed assessment on whether its funds are providing value to from lack of market attention (special situations). These unitholders in response to newly introduced regulations. AFML companies are subject to higher-than-average risk of must publish publicly on an annual basis, a statement setting capital loss. out a summary of the outcome of the process and whether or ̥ Derivatives risk: The fund may invest in derivatives not AFML believes the payments out of the scheme property with the aim of profiting from falling (‘shorting’) as well are justified in the context of the overall value delivered to as rising prices. Should the asset’s value vary in an unitholders. Composite reports on Assessment of Value have unexpected way, the fund value will reduce. been published via the website artemisfunds.com. There was no change to the risk indicator in the 6 months to 28 February 2021.

Please refer to the fund’s prospectus for full details of these and other risks which are applicable to this fund.

4 Manager Report of the manager Artemis Fund Managers Limited * We hereby approve the Half-Yearly Report of the Artemis Cassini House Strategic Assets Fund for the six months ended 28 February 57 St James’s Street 2021 on behalf of Artemis Fund Managers Limited in SW1A 1LD accordance with the requirements of COLL as issued and amended by the FCA. Dealing information: Artemis Fund Managers Limited PO Box 9688 Chelmsford CM99 2AE M J Murray L E Cairney Telephone: 0800 092 2051 Director Director Website: artemisfunds.com Artemis Fund Managers Limited London Investment adviser 27 April 2021 Artemis Investment Management LLP * Cassini House 57 St James’s Street London SW1A 1LD

Trustee and Depositary J.P. Morgan Europe Limited † 25 Bank Street Canary Wharf London E14 5JP

Registrar SS&C Financial Services International Limited * SS&C House St Nicholas Lane Basildon Essex SS15 5FS

Auditor Ernst & Young LLP Atria One 144 Morrison Street Edinburgh EH3 8EX

* Authorised and regulated by the FCA, 12 Endeavour Square, London E20 1JN. † Authorised by the Prudential Regulation Authority (‘PRA’), 20 Moorgate, London EC2R 6DA and regulated by the PRA and the FCA.

5 Investment review

̥ The fund rises 9.8%. The determination of governments to protect consumer ̥ Positive news on Covid-19 vaccine lifts markets. finances at the expense of their own, as well as the restrictions in the leisure and travel sectors, has created ̥ Ample opportunities in equities. excess savings. To the surprise of most observers, house Performance – Boosted by strong showing from prices have risen over the last year. For banks, impairments on equities… loans have been significantly lower than expected.

The fund had a decent six months, with its net asset value These factors suggest that there is pent-up demand and (NAV) rising by 9.8%* compared to our reference benchmark’s economies are likely set for a period of strong growth. This (CPI+3%) 1.6%* rise. has prompted a change in expectations for inflation and interest rates. Although inflation remains modest against any By way of reminder, this fund can take traditional ‘long’ historic precedent, this shift has felt more profound given positions in shares and bonds as well as short positions. how anchored the market’s views have been to disinflation Taking a ‘long position’ is the familiar act of buying a share over the last decade. or bond in the belief that its price will rise, with the aim of making a gain from the increase. We are concerned that governments are spending money with seemingly almost no regard for the consequences, In taking a ‘short’ position, we are expressing a belief that and − unlike in 2008/9 − the banking sector is in a position to the price of a bond or share will fall. We do this by borrowing increase the supply of credit. This has the potential to create a share or other financial instrument (for a fee) – and then a very different economic response to what we saw in 2008/9, selling it. We do this in the expectation that its price will when dramatic fiscal and monetary stimulus occurred when fall and the share or position can be bought back at a lower the banking system underwent a painful re-capitalisation and price later, thus making a profit. We then return the borrowed asset prices weakened. financial instrument. In the context of a very strong near-term fundamental Our equity positions made a 9.2% contribution, broadly in outlook for economies, and clear ongoing commitment for line with developed market equity indices. This was pleasing government policy to remain accommodative, we find it as it was achieved with net exposure1 to equity markets of surprising that bond yields have not risen further. In fact, approximately 60%, thanks to our long positions outperforming. there remains over $12.7tn in bonds with a negative yield, Our short government bond positions benefited from rising suggesting the market may be placing a too high weighting on yields2 and made a positive return of 0.6%. recent history and not the future.

Review – Central banks’ actions and news on vaccines Extremely loose monetary conditions mean that money is support markets… close to free and almost any asset can be justified as cheap. Despite the pandemic proving to be more virulent and prolonged This has created a boom in certain segments of the market 3 than most expected, recent macroeconomic developments have such as SPACs (special purpose acquisition companies ) 4 proven very positive for equities, including: and IPOs (initial public offerings ), with abnormally high participation from retail investors. Such an environment has ̥ Central banks’ ongoing commitment to low interest rates proved difficult for shorting equities and the fund’s short and providing liquidity positions detracted from performance due to some of these ̥ November’s positive vaccine results and recent evidence factors. However, our conviction that speculative behaviour of rapid roll-out of vaccinations is distorting valuation in segments of the market has only ̥ The US Presidential election result and Democrats risen. We are willing to tolerate some losses for the protection winning control of the Senate this provides to our long exposures in sectors that may see ̥ Continued fiscal stimulus in the form of income support, collateral damage if this were to fade, as history shows that loans and grants in affected economies market exuberance rarely deflates gently. ̥ Resilient performance from economies facing social The fund’s long equities produced some very positive returns, restrictions and even more so in those where conditions in particular following a sharp rerating in more economically are normalising (Asia/China) sensitive sectors following November’s announcement of ̥ Accelerated changes in policy to drive a shift to low- successful vaccine results. We do not think this optimism is carbon economies

Past performance is not a guide to the future. * Source: Artemis/Lipper Limited, class I accumulation units, in sterling with dividends and/or income reinvested to 28 February 2021, net of all charges. Performance does not take account of any costs incurred when investors buy or sell the fund. Returns may vary as a result of currency fluctuations if the investor’s currency is different to that of the class. This class may have charges or a hedging approach different from those in the sector benchmark. Sector is IA Flexible Investment. 1 Net exposure is the difference between the fund’s long positions and its short positions. Expressed as a percentage this number is a measure of the extent to which the fund is exposed to market fluctuations. 2 The rate of return on a bond: a function of the bond’s price and the interest it pays. Yields move inversely to prices. 3 A company with no commercial operations that is formed strictly to raise capital through an (IPO) for the purpose of acquiring an existing company. 4 When a company first issues shares on the stock market 6 misplaced, as our investments are focused in areas where permanently larger following the pandemic, with predictable the pandemic will lead to consolidation of market share and and ‘sticky’ consumer cohorts, which will drive revenue for rationalisation of industrial capacity, which should support years to come, even though some temporary benefits will earnings growth in coming years. abate. Nintendo, as another example, has seen an increase in penetration of direct to consumer digital software as more Equities customers have opted to download games rather than buy in-store. This results in higher revenues (as retailers are cut The key development in the period for equities in our portfolio out) and margins (as digital has close to zero marginal costs) and the market was the successful approval of several highly for Nintendo. In our view, the permanent and very positive effective vaccines for Covid-19. This prompted a strong impact of these trends is not fully discounted in share prices. positive reaction from our investments in sectors such as European airlines, UK housebuilding, retail and banking. As a result, we think the commentary around rotation in the market and the distinction drawn between ‘growth’ and There is a question as to whether the reaction is justified by ‘value’ stocks has created ‘noise’ and technically driven sell- fundamentals, given the valuations of some companies hurt by offs. We used the recent moves in the market to deepen and the pandemic are already higher than ever before. In the fund broaden the portfolio’s exposure to growth stocks by starting we have deliberately concentrated our investments in sectors new positions in Alibaba, Alphabet, Sage and , while where we believe a dynamic supply response is observable, adding to Facebook and EssilorLuxottica. such as airlines and retail. We have avoided those that are more rigid or slow to react such as commercial property and These changes have reduced the fund’s exposure to value hotels. For many of our investments, we can see that while stocks, which tend to be positively correlated with interest economies will re-open, many of their competitors will not. rate expectations, the most obvious example being banks. Given the portfolio’s short positions in bonds are negatively Our investments in the airline sector are in easyJet and correlated with interest rates, by adding to growth stocks the Ryanair, where there is minimal exposure to business travel. portfolio is more balanced. Our confidence in earning returns The International Air Transport Association estimates that the from a wider range of sources is also expressed through a global airlines industry will have burnt over $200bn in 2020/21. higher net equity exposure. Estimates suggest that European short-haul capacity has contracted by 15-20%, prompting Ryanair’s chief executive to The fund’s gross equity short weighting was broadly say, “I have never in my 30 years in the industry seen such a unchanged. But this headline figure masks some significant clean-out”. changes we have made to re-focus on generating a long- short spread and shelter against volatility. We have increased In UK housebuilding, completions of new homes fell by the diversification of our short exposure. The number of 17% in 2020 because of the cessation of activity during the shorts has increased from 33 to 54 and the average weighting first lockdown. In retail, has seen a range of has decreased from 0.9% to 0.5%. We have reduced any competitors such as Arcadia, , Peacock’s, and outsized weightings to any market or sector, to ensure DW Sports shut their stores permanently, with others such as that short positions are only in place to protect against John Lewis forced to downsize. In serviced offices, many of factors that may impact our long positions. At present, IWG’s smaller competitors have gone out of business and its this is expressed with positions to benefit from: a relative largest, WeWork, has been crippled by losses. underperformance of technology stocks; a delay in re- Across these sectors, survivors are likely to re-open to a opening of economies; and a broad decline in asset prices. demand that has been minimally impaired, and − in many cases − temporarily or permanently higher than before. The Bonds scope for consolidation of both market share and industrial The fund has short positions in government bonds whereby capacity should enable pricing power and lead to earnings the net asset value would benefit from a fall in the value of being stronger than expected. In this context, we judge bonds or a rise in their yields. The objective of this position the reactions in share prices to be justifiable and remain is to protect against an unexpected rise in yields, which optimistic about prospective returns. would likely have a negative impact on the value of our equity The fund’s positions in quality/growth stocks5 and digital portfolio. winners detracted from performance over recent months Our last annual report discussed in detail how we believed as there was a rotation in the market away from last year’s that the pandemic had accelerated a shift towards loose leaders. We had trimmed our positions as share prices rose. fiscal policy, as low or negative borrowing costs had given But we felt reluctant to reduce them too much as we could politicians a false sense of security in limited conditions. The see how profoundly positive the impact of the crisis was on outlook for long-dated government bonds seemed negative certain businesses through accelerating a shift to the new as the creditworthiness of lenders had deteriorated while the digital economy. risk of higher inflation impacting real returns had risen. For example, in online , the lockdown has Recent developments have increased our conviction encouraged users to adopt the service sooner than in this view. For example, the election of Joe Biden as anticipated. Both and will be

5 Companies deemed to be high-quality and growing more quickly than the market’s average.

7 US president was followed by the approval of a $1.9tn that have driven a reduction in economic growth rates in stimulus plan through which $1,400 will be handed out to recent years have not changed. all American adults. The Economist estimates that across Second, evidence of speculative behaviour in equity markets developed economies, excess savings of over $3tn have and widespread feeling amongst investors that ‘there is been accumulated, accounting for as much as 10% in some no alternative’ makes us feel uneasy. On a relative basis, countries. When economies are free of restrictions, the compared to cash or bonds, equities are clearly cheap. Unlike weight of money to be released in spending is likely to be bond coupons, corporate earnings and dividends can grow. inflationary. Forward-looking indicators such as asset prices At current levels, both cash and bonds offer scarce nominal and commodities already indicate this. yields, let alone one that can grow. But we are very wary of However, it should be made clear that the fund is not holding the potential illusion that equities may seem cheap only short positions in government bonds because it is predicting because bonds are expensive. inflation. Our fundamental view is that in most scenarios, and Looking ahead, we think the current environment may be particularly one where inflation were to rise, zero or negative well suited for the fund’s unique flexibility to exploit. We have yielding bonds are likely to be a very poor investment. found compelling opportunities in equity sectors that are To illustrate why we believe that negative rates are irrational, benefiting from trends such as industry consolidation and consider the implications of instances where mortgage rates the shift to the new digital economy. We are able to express have turned modestly negative, such as in Portugal. In this this positive view while maintaining a considerable degree of case, the consumer has taken out a loan to buy a house, protection against certain factor risks through our bond and but the bank is paying for it. It is hard to conceive of how to equity short positions. default (you are being paid to borrow). And, as the consumer Kartik Kumar would earn more for borrowing more, theoretically any house Fund manager price would be affordable.

This example should illustrate why the concept is illogical and if present would have scope to create huge distortions as incentive systems break down. But for some reason, when mortgages are substituted with government bonds, investors have been numb to the absurdity.

For these reasons, we have retained the fund’s short exposure in bonds at close to its 100% limit. The average weighted yield of our position is 0.4% and duration 10.5. Approximately 40% of our position is in France and Germany where yields up to 10 years remain negative. 25% of our position is in Spain and Italy where yields are higher but would be at risk if events destabilised the Eurozone.

The short position in Japanese bonds was cut to zero with exposure switched to increasing UK bond positions to over 33%. The rationale for this is similar to adjustments made to our equity shorts. The fund holds minimal long equity exposure to Japan but has a considerable overweight to UK equities. If UK bond yields were to rise, this would likely impact our long positions in sectors such as housebuilders and so our short government bond positions would help mitigate this risk.

Outlook – Compelling opportunities in equities … The near term fundamental outlook for economies appears very strong as we reach the end phase of the pandemic and consumers start to spend their excess savings. This has the potential to lead to a strong rebound in corporate profitability. Combining this backdrop with the bottom- up changes we can see in some industries makes us feel distinctly optimistic about prospective returns for equities.

Our enthusiasm is tempered by two factors. First, it remains to be seen whether, in the long term, the likely release of pent-up demand does more than produce a temporary period of above-trend economic growth. The demographic factors

8 Investment information Ten largest purchases and sales for the six months ended 28 February 2021

Cost Proceeds Purchases £’000 Sales £’000 Alibaba Group Holding, ADR 13,734 Rocket Internet 15,300 EssilorLuxottica 5,346 11,188 Facebook A shares 5,062 Capital & Counties Properties, REIT 9,354 Redrow 4,843 9,204 Gold Bullion Securities 4,300 Just Group 8,786 Alphabet C shares 4,108 Delivery Hero 7,782 easyJet 2,400 7,524 .com 2,393 5,573 Prosus 2,327 WisdomTree Physical Platinum 5,416 J D Wetherspoon 1,937 Frasers Group 4,906

Portfolio statement as at 28 February 2021 Valuation % of net Investment Holding £’000 assets Collective investment schemes 2.26% (4.28%) Artemis Target Return Bond Fund I Distribution GBP† 2,000,000 2,093 0.80 Gold Bullion Securities 32,500 3,831 1.46 Collective investment schemes total 5,924 2.26 Equities 82.59% (83.54%) Australia 0.04% (0.00%) Plenti Group 182,730 106 0.04 106 0.04 Canada 0.20% (0.00%) Canadian Pacific Railway 2,000 521 0.20 521 0.20 China 8.14% (2.86%) Alibaba Group Holding, ADR 60,000 10,345 3.95 Prosus 130,000 10,983 4.19 21,328 8.14 Denmark 0.00% (0.08%) France 4.01% (1.62%) EssilorLuxottica 90,000 10,504 4.01 10,504 4.01 Germany 9.18% (11.29%) Delivery Hero 128,714 11,883 4.54 Just Eat Takeaway.com 175,000 12,163 4.64 24,046 9.18 Ireland 3.55% (3.04%) Ryanair Holdings 650,000 9,301 3.55 9,301 3.55 Israel 5.05% (7.47%) Plus500 970,000 13,211 5.05 13,211 5.05 Japan 5.01% (4.76%) Nintendo 30,000 13,118 5.01 13,118 5.01 Netherlands 0.00% (4.91%)

9 Global exposure* Valuation % of net Investment Holding £’000 £’000 assets Switzerland 4.91% (4.20%) IWG 3,525,000 12,845 4.91 12,845 4.91 36.41% (41.68%) 2,500,000 4,017 1.54 Dignity 2,671,050 13,729 5.24 4,350,000 5,377 2.05 easyJet 1,600,000 15,914 6.08 Fevertree Drinks # 255,000 5,885 2.25 Frasers Group 2,891,282 13,398 5.12 GlaxoSmithKline 900,000 10,906 4.17 Hornby # 11,107,575 5,221 1.99 Lloyds Banking Group 25,000,000 9,672 3.69 Redrow 1,750,000 9,503 3.63 300,000 1,705 0.65 95,327 36.41 United States of America 6.09% (1.63%) Alphabet C shares 3,250 4,738 1.81 Berkshire Hathaway B shares 5,000 875 0.34 Charter Communications A shares 4,000 1,728 0.66 Facebook A shares 47,000 8,594 3.28 15,935 6.09 Equities total 216,242 82.59 Contracts for difference 0.44% ((3.61)%) Belgium 0.03% ((0.04)%) Anheuser-Busch InBev (20,000) (851) 82 0.03 (851) 82 0.03 Canada (0.03)% ((0.02)%) Brookfield Asset Management A shares (65,000) (1,941) (86) (0.03) (1,941) (86) (0.03) China 0.00% ((0.02)%) Denmark 0.04% (0.40%) Ambu B shares (35,000) (1,173) 106 0.04 (1,173) 106 0.04 France (0.02)% (0.00%) Klepierre, REIT (25,000) (418) 32 0.01 LVMH Moet Hennessy Louis Vuitton (1,000) (457) (7) 0.00 Sodexo (17,500) (1,217) (87) (0.03) (2,092) (62) (0.02) Germany 0.00% ((0.12)%) Deutsche Lufthansa (125,000) (1,330) (145) (0.06) HelloFresh (25,000) (1,400) 124 0.05 Stroeer (23,000) (1,457) 22 0.01 TeamViewer (17,500) (677) 0 0.00 (4,864) 1 0.00 Ireland 0.00% (0.07%) Italy (0.07)% ((0.03)%) Leonardo (225,000) (1,294) (178) (0.07) (1,294) (178) (0.07) Japan 0.02% (0.00%) Shiseido (32,500) (1,736) 54 0.02 (1,736) 54 0.02

10 Global exposure* Valuation % of net Investment Holding £’000 £’000 assets Luxembourg 0.08% ((0.32)%) Eurofins Scientific (27,500) (1,770) 202 0.08 (1,770) 202 0.08 Norway 0.01% (0.00%) Tomra Systems (20,000) (623) 38 0.01 (623) 38 0.01 Spain (0.04)% (0.00%) Acciona (17,500) (2,034) (110) (0.04) (2,034) (110) (0.04) Sweden 0.01% (0.00%) EQT (30,000) (608) 40 0.01 (608) 40 0.01 Switzerland (0.35)% ((0.23)%) LafargeHolcim (20,000) (797) (27) (0.01) Partners Group Holding (2,250) (1,952) (41) (0.01) Holdings (95,448) (5,073) (857) (0.33) (7,822) (925) (0.35) United Kingdom (0.22)% ((1.04)%) AO World (550,000) (1,543) 184 0.07 (125,000) (441) (19) (0.01) ASOS # (30,000) (1,676) (225) (0.09) 975,000 6,551 76 0.03 350,000 9,919 228 0.09 CMC Markets (400,000) (1,625) (22) (0.01) Domino's Pizza Group (275,000) (859) 54 0.02 DS Smith (275,000) (1,091) (81) (0.03) Future (90,000) (1,742) (158) (0.06) (45,000) (474) 6 0.00 Howden Joinery Group (150,000) (1,070) (58) (0.02) J Sainsbury (725,000) (1,666) 153 0.06 JD Sports Fashion (210,000) (1,747) (112) (0.04) (350,000) (1,048) (49) (0.02) Kingfisher (300,000) (795) 54 0.02 (100,000) (429) (24) (0.01) Group (100,000) (398) 15 0.01 Benckiser Group 70,000 4,242 (165) (0.06) Scottish Mortgage Investment Trust (100,000) (1,123) 137 0.05 (250,000) (783) 29 0.01 (475,000) (2,461) (399) (0.15) Unilever 100,000 3,810 (206) (0.08) 3,551 (582) (0.22) United States of America 0.98% ((2.26)%) Airbnb A shares (14,250) (1,859) 98 0.04 Apple (32,000) (2,780) 365 0.14 AT&T (35,000) (720) 4 0.00 Blackstone Group A shares (47,500) (2,333) (47) (0.02) Chewy A shares (17,500) (1,277) 24 0.01 Chipotle Mexican Grill (600) (609) 29 0.01 DoorDash A shares (18,000) (2,150) 279 0.11 DraftKings A shares (15,000) (623) (18) (0.01) Etsy (5,000) (709) 23 0.01

11 Global exposure* Valuation % of net Investment Holding £’000 £’000 assets Middleby (8,500) (884) (39) (0.02) Plug Power (20,000) (622) 280 0.11 Roper Technologies (2,500) (680) 79 0.03 Snap A shares (30,000) (1,362) (223) (0.09) Tesla (15,750) (7,717) 1,599 0.61 Uber Technologies (20,000) (739) 70 0.03 Wendy's (20,000) (288) 8 0.00 Zoom Video Communications A shares (5,000) (1,310) 48 0.02 (26,662) 2,579 0.98 Contracts for difference total (49,919) 1,159 0.44 Forward currency contracts 0.03% ((0.45)%) Buy Sterling 28,132,256 sell Euro 32,000,000 dated 17/05/2021 276 0.11 Buy US Dollars 36,000,000 sell Sterling 26,040,499 dated 17/05/2021 (200) (0.08) Forward currency contracts total 76 0.03 Futures 2.29% ((0.77)%) Euro-Bono 08/03/2021 (288) (39,994) 872 0.33 Euro-BTP 08/03/2021 (189) (24,552) 216 0.08 Euro-Buxl 30 Year Bond 08/03/2021 (238) (43,262) 2,649 1.01 Euro-OAT 08/03/2021 (464) (65,801) 1,554 0.60 Long Gilt 28/06/2021 (674) (86,053) 713 0.27 Futures total (259,662) 6,004 2.29 Investment assets (including investment liabilities) 229,405 87.61 Net other assets 32,443 12.39 Net assets attributable to unitholders 261,848 100.00 The comparative percentage figures in brackets are as at 31 August 2020. † A related party to the Fund. # Security traded on the Alternative Investment Market (AIM). * Global exposure has been calculated in line with the guidelines issued by the European Securities and Markets Authority (‘ESMA’) and represents the market value of an equivalent position in the underlying investment of each derivative contract. For all other asset types the percentage of net assets has been calculated based on the valuation of each holding.

12 Financial statements

Statement of total return for the six months ended 28 February 2021

28 February 2021 28 February 2020 £’000 £’000 £’000 £’000 Income Net capital gains 27,312 9,808 Revenue 1,776 4,930 Expenses (1,642) (2,637) Interest payable and similar charges (1,536) (1,495) Net (expense)/revenue before taxation (1,402) 798 Taxation (98) (167) Net (expense)/revenue after taxation (1,500) 631 Total return before distributions 25,812 10,439 Distributions 1 (48) Change in net assets attributable to unitholders from investment activities 25,813 10,391

Statement of change in net assets attributable to unitholders for the six months ended 28 February 2021

28 February 2021 28 February 2020 £’000 £’000 £’000 £’000 Opening net assets attributable to unitholders 304,068 480,480 Amounts receivable on issue of units 31 225 Amounts payable on cancellation of units (68,136) (81,260) (68,105) (81,035) Dilution adjustment 72 9 Change in net assets attributable to unitholders from investment activities 25,813 10,391 Closing net assets attributable to unitholders 261,848 409,845

Balance sheet as at 28 February 2021

28 February 2021 31 August 2020 £’000 £’000 Assets Fixed assets Investments 232,988 270,578 Current assets Debtors 1,946 3,859 Cash and cash equivalents 33,581 50,638 Total current assets 35,527 54,497 Total assets 268,515 325,075 Liabilities Investment liabilities 3,583 18,219 Creditors Bank overdraft 1,041 9 Other creditors 2,043 2,779 Total creditors 3,084 2,788 Total liabilities 6,667 21,007 Net assets attributable to unitholders 261,848 304,068

13 1. Basis of preparation The interim financial statements have been prepared in accordance with the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association in May 2014.

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 August 2020 as set out therein.

2. Post balance sheet events There were no significant post balance sheet events subsequent to the period end.

14 Fund sizes & net asset values Class I accumulation performance

Net asset Net asset Since 5 3 1 6 Date value of value per Units Performance launch * years years year months fund (£) unit (p) in issue Artemis Strategic 31 August 2018 715,257,064 Assets Fund 76.7 11.4 (5.1) 6.1 9.8

I accumulation 91.29 542,370,240 UK Consumer Price Index R accumulation 85.12 258,570,434 +300bps 78.2 26.0 13.2 3.1 1.6

31 August 2019 480,479,745 Flexible Investment Average 153.4 52.6 17.4 13.9 9.6 I accumulation 78.22 433,079,770 Position in sector 58/62 98/100 119/119 108/131 61/135 R accumulation 72.38 195,820,776 Quartile 4 4 4 2 4 31 August 2020 304,068,479 Past performance is not a guide to the future. C accumulation* 70.23 2,811,116 * Data from 26 May 2009. Source: Lipper Limited, class I accumulation units, in sterling to 28 February 2021. All performance I accumulation 76.34 250,597,735 figures show total returns with dividends and/or income reinvested, net of all charges. Sector is IA Flexible Investment. This class may R accumulation 70.12 157,994,712 have charges or a hedging approach different from those in the IA sector benchmark. 28 February 2021 261,848,169

C accumulation 76.95 2,987,777 Class I accumulation is disclosed as it is the primary unit class.

I accumulation 83.83 180,495,788

R accumulation 76.72 141,082,801

* Launched 13 March 2020.

Ongoing charges

Class 28 February 2021

C accumulation* 1.31%

I accumulation 0.86%

R accumulation 1.61%

Ongoing charges shows the annual operating expenses of each unit class as a percentage of the average net assets of that class for the preceding 12 months. *Ongoing charges shows the estimated annual operating expenses as a percentage of the average net assets of that class since launch.

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