This is according to Tim Steer, who, along with Stephen Yiu, has managed Artemis UK Growth since July 2009, when the fund's performance took a nose-dive. The pair totally liquidated and repositioned its holdings to focus on UK-listed companies with an international exposure.
"Companies which had large chunks of their growth coming in from overseas were trading at around a 19 or 20 per cent premium to their domestic-focused counterparts, but were offering around 4.5 times the growth," he explained.
"Now they are trading at around a 35 per cent premium and only showing two times the amount of growth. This indicates it is time to think about cutting our overseas exposure."
Steer is looking to mid caps for UK growth and names Majestic Wine, Sport Direct and Balfour Beatty as potential candidates.
Financial Express data shows Artemis UK Growth losing 24 per cent in the three years to July 2009, compared with losses of 19.4 per cent from the IMA UK All Companies sector.
In the two years since Steer took over the fund, it has returned 53 per cent, compared with 51 per cent from the sector average. They also have similar levels of volatility.
Performance of fund vs sector since Jul-09
Source: Financial Express Analytics
As of the end of March 2011, the £367.5m fund had 31 per cent of its portfolio in industrials and 18 per cent in the oil and gas sector, according to Financial Express. The average fund in the IMA UK All Companies sector holds 12 per cent in industrials and 12 per cent in oil and gas.
Steer also has an unusually low weighting to financials: 6 per cent compared with 30 per cent.
Fundswire data shows the fund is now ranked 77 out of 311 funds, putting it in the top-quartile for its sector.