Fund Focus: have value funds become momentum plays?

Artemis Global Income I Acc is ticking plenty of important boxes for investors. There’s the huge 12-month return (up 46% versus 1% for the global equity income sector), the fact it invests beyond the US as some investors seek to pivot past that market, a good track record over many years and the resurgence of its value investment style.

With the fund still doing well so far in 2026, there are enough ways to explain why it has become something of a favourite among ii customers. But the “value” status the fund carries, along with that of some rivals, has started to look somewhat stretched.

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Running the winners

The first table shows the fund’s top 10 holdings from the end of January and the list gives a good illustration of how the fund stands out from a global tracker.

There’s South Korea’s biggest stock Samsung Electronics Co Ltd DR (LSE:SMSN), defence spending beneficiary Hanwha Aerospace, financials such as Standard Chartered (LSE:STAN) and Deutsche Bank AG (XETRA:DBK) and names less known to UK investors, like the conglomerate Grupo Mexico.

It’s an eclectic and seemingly diverse mix. But I should draw your eye to the right-hand column, which notes the share price movement for each over a 12-month period to 13 March.

Markets outside the US have enjoyed phenomenal gains in the last year and the fund’s top 10 certainly reflect that, with the weakest performer here still up by a fifth. Samsung Electronics shares have gained more than 200%, with Kinross Gold Corp (NYSE:KGC) and Siemens Energy AG Ordinary Shares (XETRA:ENR) also notching up massive wins.

Artemis Global Income’s top holdings by recent performance

Source: Google Finance, 13 March 2026. Past performance is not a guide to future performance.

Such strong performance makes me a little nervous - even if it’s not to say that such stocks will suddenly collapse.

Financials could well continue their hot streak, as could gold miners and the defence sector.

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But the fund’s top companies are sitting on a lot of momentum, and investors are partly betting on this continuing. It’s therefore a good job that such positions are not too large, with top name Samsung Electronics making up a moderate 5% of assets.

The roles have reversed

This doesn’t mean that investors should bail out of this fund, or from other value portfolios with strong recent performance. But investors might apply a little scrutiny to how their cash is put to work.

We might first ask: is a fund running its winners, or picking up new, unloved names? Ranmore Global Equity Institutional GBP, another popular value play that prides itself on a high level of turnover, certainly has a few beaten-up names in its top 10, from Diageo (LSE:DGE) to easyJet (LSE:EZJ) and Greggs (LSE:GRG), although it also has a few winners there. Its focus on turnover might keep it from holding anything too highly valued for too long, even if it can limit its gains from individual positions.

More generally we should accept that the roles are reversed between many value funds and their growth or quality-oriented rivals.

Classic value stocks such as financials have made big returns while many “quality’ businesses have suffered, with share tumbling from high starting points.

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There are names like Novo Nordisk AS ADR (NYSE:NVO), and more recently the victims of the software sell-off. As such quality and growth funds have in some cases become a potential target for bargain hunters, while value funds can feel more like a momentum play if they run winners.

A striking example of this from the quality camp is, of course, Finsbury Growth & Income Ord (LSE:FGT). We have noted before that manager Nick Train has loaded up on some of the stocks that struggled most last year, even before the software sell-off made things worse.

Finsbury Growth & Income’s top holdings by recent performance

Past performance is not a guide to future performance.

As our second table shows, most of his top holdings are deep underwater over a 12-month stretch, with the one big exception being takeover target Schroders (LSE:SDR).

Train’s portfolios are unusual in just how exposed they are to the victims of the software sell-off, and I shall leave the debate about the outlook for such companies to those with more knowledge on that subject.

But these figures do illustrate the fact that quality and growth funds have almost become “value” portfolios by accident, while classic value funds are sitting on a lot of momentum.

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We should expect further muddying of the water here, as funds with a value remit start to put more money into growth and quality stocks that have fallen out of bed (as with Ranmore and Diageo).

But that means two things for investors. Diversify, as ever, across the styles. And do check which stocks are cropping up in your value fund of choice.