Artisan High Income Fund. 8 Feb 2017 Artisan Partners Growth Team

Transcription

1 Artisan High Income Fund 8 Feb 2017 Artisan Partners Growth Team This is an offering of shares of an Artisan Fund and does not create a relationship between the investor and Artisan Partners. The Notes and Disclosures section of this presentation contains important information. Readers are encouraged to review it carefully.

2 Investment Results 2016 Average Annual Total Returns Calendar Year Total Returns (%) Expense Ratios (%) ARTMX Annual Report 30 Sep Prospectus 30 Sep Past performance does not guarantee and is not a reliable indicator of future results. Investment returns and principal values will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown. Call for current to most recent month-end performance. Source: Russell. Returns less than one year are not annualized. Fund inception: 27 Jun See prospectus for more information. 1

3 Investment Results % 15% 10% 5% 0% Average Annual Total Returns -5% (%) as of 31 Dec 2015 QTD 1 Yr 3 Yr 5 Yr 7 Yr 10 Yr Inception Investor Class: ARTMX Russell Midcap Index Russell Midcap Growth Index Calendar Year Total Returns (%) Past performance does not guarantee and is not a reliable indicator of future results. Investment returns and principal values will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown. Call for current to most recent month-end performance. Source: Russell. Returns less than one year are not annualized. Fund inception: 27 Jun

4 Growth vs. Value Total Return Annualized Periods 1 Year 3 Years 5 Years 10 Years Russell Midcap Growth Index 7.3% 6.2% 13.5% 7.8% Russell Midcap Value Index 20.0% 9.4% 15.7% 7.6% Source: Russell Investment Group; as of 31 Dec Past performance is not a reliable indicator of future results. 3

5 Attribution 2016 Economic Sector Portfolio Russell Midcap Growth Attribution Analysis % Average Weight % Return % Average Weight % Return Allocation Effect Selection Effect Total Effect Consumer Staples Energy Real Estate Financials Utilities Telecommunication Services Materials Consumer Discretionary Industrials Information Technology Health Care Cash Total Source: FactSet/GICS/Russell. As of 31 Dec Past performance does not guarantee and is not a reliable indicator of future results. Percent returns represent portfolio securities valuations and are not representative of a fund s total return. Attribution figures do not incorporate fund fees and expenses and will vary from a fund s NAV. Refer to Notes and Disclosures for attribution information. 4

6 Attribution Q4 Economic Sector Portfolio Russell Midcap Growth Attribution Analysis % Average Weight % Return % Average Weight % Return Allocation Effect Selection Effect Total Effect Telecommunication Services Real Estate Utilities Consumer Staples Energy Materials Financials Health Care Industrials Consumer Discretionary Information Technology Cash Total Source: FactSet/GICS/Russell. As of 31 Dec Past performance does not guarantee and is not a reliable indicator of future results. Percent returns represent portfolio securities valuations and are not representative of a fund s total return. Attribution figures do not incorporate fund fees and expenses and will vary from a fund s NAV. Refer to Notes and Disclosures for attribution information. 5

7 Contribution to Return Q and 1 Yr Q Yr Top Top Information Technology NVIDIA Gartner Financials SVB Financial Waste Connections Industrials HD Supply Consumer Discretionary CBS Tractor Supply Co Information Technology NVIDIA Consumer Staples WhiteWave Foods Health Care Boston Scientific Financials SVB Financial S&P Global Consumer Discretionary Ulta Salon Industrials HD Supply Bottom Bottom Health Care DexCom Boston Scientific Consumer Discretionary LKQ Information Technology Workday Global Payments Financials S&P Global Industrials IHS Markit Health Care Regeneron Pharmaceuticals Alkermes (sold) athenahealth DexCom Information Technology LinkedIn (sold) ServiceNow (sold) Consumer Discretionary Signet Jewelers (sold) Source: Artisan Partners/FactSet/GICS. As of 31 Dec Past performance does not guarantee and is not a reliable indicator of future results. These securities made the greatest contribution to, or detracted most from, performance during the period. This is not a complete listing of portfolio activity. Upon request, Artisan will provide: (i) the calculation methodology and/or (ii) a list showing the contribution of each holding to overall performance during the measurement period. Securities of the same issuer are aggregated to determine the weight in the portfolio. See the Portfolio Holdings pages for holdings weights. 6

8 Investment Results Average Annual Total Returns 25% 20% 15% 10% 5% 0% (%) as of 31 Jan 2017 YTD 1 Yr 3 Yr 5 Yr 7 Yr 10 Yr Inception Investor Class: ARTMX Russell Midcap Growth Index Russell Midcap Index Past performance does not guarantee and is not a reliable indicator of future results. Investment returns and principal values will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown. Call for current to most recent month-end performance. Source: Russell. Returns less than one year are not annualized. Fund inception: 27 Jun

9 Attribution January Economic Sector Portfolio Russell Midcap Growth Attribution Analysis % Average Weight % Return % Average Weight % Return Allocation Effect Selection Effect Total Effect Health Care Information Technology Consumer Discretionary Industrials Financials Energy Consumer Staples Real Estate Telecommunication Services Materials Cash Total Source: FactSet/GICS/Russell. As of 31 Jan Past performance does not guarantee and is not a reliable indicator of future results. Percent returns represent portfolio securities valuations and are not representative of a fund s total return. Attribution figures do not incorporate fund fees and expenses and will vary from a fund s NAV. Refer to Notes and Disclosures for attribution information. 8

10 Artisan Partners Growth Team Investment Philosophy Overview We seek to compound assets through a disciplined, repeatable process that exposes portfolios to growth while avoiding permanent capital impairment Broad Knowledge Find growth wherever growth occurs across the global economy We believe stocks follow profits, and following profit cycles can lead to significant asset growth Security Selection Be right more often than we re wrong Capital Allocation Be right in a bigger way than when we re wrong

11 Where We Are Finding Growth Health Care Innovation New drugs, devices, diagnostics and delivery models that make health care more effective and efficient DexCom Regeneron Seattle Genetics Next-Gen Data Analytics Proliferating sensors and mobile connectivity is boosting the profit potential of data analytics IHS Markit NVIDIA Verisk Industrial Process Innovation Precision technologies and systems that increase quality, synchronize information streams and speed throughput to lower production costs Acuity Brands Middleby Delphi Automotive Emerging Markets Consumer A rising middle class is driving demand for products, experiences and services Internal Change New management teams, new products, strategic acquisitions and other changes that can unlock growth and margin opportunities Financials Are Investible Again The combination of less onerous regulation, continued operational restructurings and recapitalized balance sheets leads to profits with an added boost from widening spreads Ctrip.com AO Smith Becton Dickinson Electronic Arts Boston Scientific Newell Brands Aramark Northern Trust TD Ameritrade SVB Financial Shale Revolution Low-cost, high-quality producers are poised to expand production, even at lower oil prices Concho Resources Cimarex Source: Artisan Partners. As of 31 Dec Portfolio holdings are subject to change without notice. The themes and stock examples listed are for illustrative purposes only and are not representative of the entire portfolios. See the Portfolio Holdings pages for holdings weights. 10

12 Sector Weights Consumer Discretionary Sold: The Michaels Cos Inc, lululemon athletica inc Purchased: Expedia Inc, Panera Bread Co Consumer Staples Purchased: Blue Buffalo Pet Products Inc Financials Purchased: Northern Trust Corp, TD Ameritrade Holding Corp Health Care Sold: Cerner Corp, Intuitive Surgical Inc Industrials Sold: Hubbell Inc Information Technology Sold: Palo Alto Networks Inc, NXP Semiconductors NV, Trimble Inc Telecommunications Sold: Level 3 Communications Inc Source: FactSet/GICS/Russell. Cash represented 4.5% of the total portfolio at 31 Dec 2015, 4.8% at 30 Sep 2016 and 5.0% at 31 Dec Refer to Portfolio Holdings for security weights. This presentation is not a complete listing of portfolio activity. 11

13 Portfolio Statistics Source: FactSet/Russell. As of 31 Dec 2016 and includes all share classes unless otherwise indicated. 1 Harmonic; excluding negative earners. 12

14 Top 10 Holdings Company Initial Purchase % of total portfolio IHS Markit Ltd (Industrials) A global provider of financial information, processing and technology services with deep expertise in bank loans, fixed income and derivatives, and the energy and automotive sectors. 18 Sep LKQ Corp (Consumer Discretionary) Boston Scientific Corp (Health Care) Global Payments Inc (Information Technology) A value-added distributor of vehicle parts and accessories. 19 Sep Worldwide developer, manufacturer and marketer of minimally invasive medical devices. 24 Jun A fast-growing provider of payments technology solutions for merchants. 30 Mar S&P Global Inc (Financials) Regeneron Pharmaceuticals Inc (Health Care) A financial information and analytics company with strong franchises in bond ratings, equity indices and energy price data. A biopharmaceutical company with a leading vision loss treatment (Eylea ) and a strong antibody discovery platform. 14 Jul Nov Waste Connections Inc (Industrials) Fortune Brands Home & Security Inc (Industrials) Cigna Corp (Health Care) Concho Resources Inc (Energy) A leading US waste-services provider. 9 Apr A leading provider of home and security products. 15 Apr One of the largest health service companies in the US. 13 Jan An acquirer, developer and explorer of oil and natural gas properties. 26 Jan Total 33.5% Source: Artisan Partners/FactSet/GICS. As of 31 Dec Securities of the same issuer are aggregated to determine the weight in the portfolio. 13

15 Portfolio Holdings (% of total portfolio) Source: FactSet/GICS. As of 31 Dec Cash represented 5.0% of the total portfolio at 31 Dec Securities of the same issuer are aggregated to determine the weight in the portfolio. Securities mentioned in this commentary but not listed here were not held as of 31 Dec

16 Relative Valuations Growth vs. Value Valuation premium (based on P/E) to own growth: Average = 6.9 Average excluding Jun 1999 to May 2002 = Dec 2016 premium = 3.8 Valuation Premium Growth Minus Value Average Average excluding bubble Source: Russell Investment Group, as of 31 Dec 2016; Russell 3000 Growth and Russell 3000 Value Index P/Es (excluding negative earners) from 31 Dec 1979 to 31 Dec

17 Q&A 16

18 Notes and Disclosures This section of this presentation contains information important to a complete understanding of the material presented. Please review it carefully. Carefully consider the Fund s investment objective, risks and charges and expenses. This and other important information is contained in the Fund's prospectus and summary prospectus, which can be obtained by visiting Read carefully before investing. These materials are presented in connection with an offer of the shares of a Fund in the series of Artisan Partners Funds, Inc. These materials are not an offer for any other mutual fund mentioned. A purchase of shares of an Artisan Partners Fund does not create an investment advisory relationship between the investor and Artisan Partners Limited Partnership, the investment adviser to the Fund. In addition to acting as investment adviser to the Fund, Artisan Partners provides institutional investment management services. International investments involve special risks, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid and may have underperformed securities of large companies during some periods. Growth securities may underperform other asset typesduring a given period. Russell Midcap Index measures the performance of roughly 800 US mid-cap companies. The Russell Midcap Growth Index measures the performance of mid-cap companies with higher price-to-book ratios and higher forecasted growth values. Russell Midcap Value Index measures the performance of US mid-cap companies with lower price/book ratios and forecasted growth values. Russell 3000 Growth Index measures the performance of the largest 3,000 US companies with higher price-to-book ratios and higher forecasted growth values. Russell 3000 Value Index measures the performance of the largest 3,000 US companies with lower price-to-book ratios and lower forecasted growth values. The benchmark index(es) presented are unmanaged, market-weighted indices whose returns include net reinvested dividends, but, unlike the portfolio's returns, do not reflect the payment of sales commissions or other expenses incurred in the purchase or sale of the securities included in the indices. An investment cannot be made directly into an index. Attribution: Performance attribution is used to evaluate the quality of the separate decisions that go into the management of an investment portfolio compared to a benchmark index. Performance attribution analysis attempts to isolate the effect and measure the return contribution of market allocation (Allocation Effect), which analyzes the positive/negative impact of a portfolio s allocation to groupings such as geographic regions or market sectors, and stock selection (Selection Effect), which analyzes the positive/negative impact of a manager s security ownership and weighting decisions within a broader grouping. For international portfolios those effects are calculated in local currency terms and a separate calculation (Currency Effect) is done to analyze the positive/negative impact of a portfolio s exposure to foreign currency movements. Attribution is not exact, but should be considered an approximation of the relative contribution of each of the factors considered. For more information about the specific calculation methodology, please call Contribution to return is calculated by multiplying a security s weight in the portfolio by its in portfolio return for the period referenced and does not take into account expenses of the portfolio. Contribution to return is not exact, but should be considered an approximation of the relative contribution of the portfolio s securities. Totals may not sum due to rounding. Portfolio Holdings: For the purpose of determining the portfolio's holdings, securities of the same issuer are aggregated to determine the weight in the portfolio. Holdings information is not intended to represent or predict portfolio investment performance or as a recommendation of any individual security. A complete list of the securities held by portfolio, other than cash and cash equivalents unless otherwise noted, as of the date indicated is included. Securities named in this material, but not listed within the portfolio holdings page were not held as of the date reported. This listing is for informational purposes only and may not be identical to the official books and records of the Funds. Security names may not represent the official legal corporate name. Please refer to the Fund's most recent Annual Report for an audited portfolio holdings list. Sector exposure percentages reflect sector designations as currently classified bygics. TheGlobalIndustryClassification Standard (GICS ) is the exclusive intellectual property of MSCI Inc. (MSCI) and Standard & Poor s Financial Services, LLC (S&P). Neither MSCI, S&P, their affiliates, nor any of their third party providers ( GICS Parties ) makes any representations or warranties, express or implied, with respect to GICS or the results to be obtained by the use thereof, and expressly disclaim all warranties, including warranties of accuracy, completeness, merchantability and fitness for a particular purpose. The GICS Parties shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of such damages. 17

19 Notes and Disclosures Frank Russell Company ( Russell ) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell s express written consent. Russell does not promote, sponsor or endorse the content of this communication. Price-to-Earnings (P/E) is a valuation ratio of a company's current share price compared to its per-share earnings. Artisan Partners Funds offered through Artisan Partners Distributors LLC (APDLLC), member FINRA. APDLLC is a wholly owned broker/dealer subsidiary of Artisan Partners Holdings LP. Artisan Partners Limited Partnership, an investment advisory firm and advisor to Artisan Partners Funds, is wholly owned by Artisan Partners Funds 2017 Artisan Partners. All rights reserved. 18