Management & Investment Process

  • Lewis S. Kaufman, CFA
  • Portfolio Manager
  • 19Years Investment
    Experience

Investment Process

The investment team seeks to capitalize on low-penetration opportunities by investing in companies that compound business value over a market cycle, while implementing a forward-looking construct for managing risk.

Business Value Compounding
The team seeks to invest in companies with the capital structures and business models to realize their domestic demand potential.

Foundational Risk Management
The team implements a forward-looking construct for managing risk by emphasizing differentiated correlation and currency profiles.

Investment Results (%)

As of 30 November 2018 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Composite — Gross -0.61 -12.04 -9.38 10.20 5.51
Composite — Net -0.78 -12.89 -10.34 9.05 4.41
MSCI Emerging Markets Index -4.95 -12.24 -9.09 9.40 3.02
As of 30 September 2018 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Composite — Gross -5.49 -11.50 -8.73 13.08 6.00
Composite — Net -5.74 -12.21 -9.69 11.91 4.90
MSCI Emerging Markets Index -1.09 -7.68 -0.81 12.35 4.79

Annual Returns (%)

12 Months Ended 30 September 2014 2015 2016 2017 2018
Composite — Gross 27.38 24.41 -8.73

Calendar Year Returns (%)

2016 2017
Composite — Gross 13.08 36.87
Composite — Net 11.91 35.48
MSCI Emerging Markets Index 11.19 37.28
Returns for periods less than one year are not annualized. 

Past performance does not guarantee and is not a reliable indicator of future results. Current performance may be lower or higher than the performance shown. Composite performance has been presented in both gross and net of investment management fees. 

Investment Risk: Investments will rise and fall with market fluctuations and investor capital is at risk. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. These risks, among others, are further described in the Important Disclosures section which should be read in conjunction with this material. 

Risk Management— Upside/Downside Capture

As of 30 September 2018 Average Up Month Average Down Month
Composite — Net 312bps -301bps
MSCI Emerging Markets Index 347bps -346bps
Difference -36bps +45bps

Based on monthly net-of-fees composite returns beginning July 1, 2015. Net-of-fees composite returns were calculated using the highest model investment advisory fees applicable to portfolios within the composite. Upside/Downside Capture represents average monthly returns during months when the index was positive and negative, respectively.

Top 10 Holdings
(% of total portfolio as of 30 November 2018)
Kweichow Moutai Co Ltd (China) 4.9
Alibaba Group Holding Ltd (China) 4.8
HDFC Bank Ltd (India) 4.6
Tencent Holdings Ltd (China) 4.6
MercadoLibre Inc (Argentina) 4.5
AIA Group Ltd (Hong Kong) 4.4
Baidu Inc (China) 3.5
TAL Education Group (China) 3.5
Visa Inc (United States) 3.4
Hangzhou Hikvision Digital Technology Co Ltd (China) 3.3
Total 41.5%
Portfolio Statistics
(as of 30 November 2018)
Median Market Cap (Billions) $16.7
Weighted Avg. Market Cap (Billions) $91.3
Number of Securities 42
Number of Countries 16
Cash (% of total portfolio) 6.7%
Region Allocation
(% of total portfolio equities as of 30 November 2018)
Emerging Asia 55.0
Developed Markets 21.4
Latin America 17.2
Europe, Middle East and Africa 6.4
Total 100.0%
Top 10 Countries
(% of total portfolio equities as of 30 November 2018)
China 37.0
India 14.2
Brazil 8.2
Netherlands 6.4
Russia 4.9
Argentina 4.8
Hong Kong 4.7
United States 4.6
France 3.3
Thailand 2.7
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.  Such risks include new and rapidly changing political and economic structures, which may cause instability; underdeveloped securities markets; and higher likelihood of high levels of inflation, deflation or currency devaluations.  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.  These risks, among others, are further described in Artisan Partners Form ADV, which is available upon request. 

Unless otherwise indicated, strategy characteristics relate to that of a representative account managed within the investment composite. It is intended to provide a general illustration of the investment strategy and considerations used by Artisan Partners in managing that strategy. Individual accounts managed to the strategy may differ, at times significantly, from the reference data shown due to varying account restrictions, fees and expenses, and longevity periods, among others. Where applicable, this information is supplemental to, and not to be construed with, a current or prospective client's investment account information.

Performance Source: Artisan Partners/MSCI. Net-of-fees composite returns were calculated using the highest model investment advisory fees applicable to portfolios within the composite. Fees may be higher for certain pooled vehicles and the composite may include accounts with performance-based fees. All performance results are net of commissions and transaction costs, and have been presented gross and net of investment advisory fees. Dividend income is recorded net of foreign withholding taxes on ex-dividend date or as soon after the ex-dividend date as the information becomes available to Artisan Partners. Interest income is recorded on the accrual basis. Performance results for the Index include reinvested dividends and are presented net of foreign withholding taxes 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. 

Data & Statistics Sources: Artisan Partners/FactSet/MSCI. Country Classification Source: Artisan Partners. Portfolio country classifications are defined by the investment team and may differ substantially from MSCI classifications. Upon request, Artisan Partners will provide the portfolio’s country breakdown according to MSCI methodology.  Artisan Partners may exclude outliers when calculating portfolio statistics. If information is unavailable for a particular security Artisan may use data from a related security to calculate portfolio statistics. Securities of the same issuer are aggregated to determine a holding’s weight in the portfolio. Cash weighting includes cash and cash equivalents. Totals may not sum due to rounding. 

Median is the data's midpoint value. Market Cap is the aggregate value of all of a company's outstanding equity securities. Weighted Average is the average of values weighted to the data set's composition. 

MSCI Emerging Markets Index measures the performance of emerging markets. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment. 

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.