Investment Process

The investment team seeks to invest in issuers with high-quality business models that have compelling risk-adjusted return characteristics. The team will invest primarily in non-investment grade corporate bonds and secured and unsecured loans of US and non-US issuers.

Business Quality

  • Qualitative industry analysis
  • Evaluate business model resiliency using Porter’s 5 Forces
  • Examine management decision-making history

Financial Strength & Flexibility

  • Free cash flow analysis
  • Corporate structure review
  • Capital structure review

Downside Analysis

  • Conservative financial projections
  • Competitive dynamics
  • Capital structure position
  • Enterprise value support

Value Identification

  • Credit improvement opportunities
  • Relative value within the capital structure
  • Credit cycle awareness
  • Catalysts with optionality
  • Dislocation exploitation

In-depth Investment Process

Investment
Results (%)

As of 28 February 2017 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Investor Class: ARTFX 2.91 2.91 20.66 6.79
BofA Merrill Lynch US High Yield Master II Index 2.92 2.92 22.30 4.87
As of 31 December 2016 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Investor Class: ARTFX 1.95 14.52 14.52 6.10
BofA Merrill Lynch US High Yield Master II Index 1.88 17.49 17.49 4.08

Calendar Year Returns (%)

2015 2016
Investor Class: ARTFX 0.99 14.52
BofA Merrill Lynch US High Yield Master II Index -4.64 17.49

Returns for periods less than one year are not annualized. 

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. The performance information shown does not reflect the deduction of a 2% redemption fee on shares held by an investor for 90 days or less and, if reflected, the fee would reduce the performance quoted. Performance may reflect agreements to limit a Fund’s expenses, which would reduce performance if not in effect. Unlike the Index, Artisan High Income Fund may hold loans and other security types. At times, this causes material differences in relative performance. 

Expense Ratio

Annual Report 30 September 2016 1.03%
Prospectus 30 September 2016 1.03%

Expense Ratio Disclosure

See prospectus for more information. 

Top 10 Holdings
(% of total portfolio as of 28 February 2017)
VEREIT Inc 6.0
USI Inc 5.0
Endeavor Energy Resources LP 4.1
Williams Cos Inc 3.7
Charter Communications Inc 3.7
HUB Holdings LLC 3.2
York Risk Services Holding Corp 3.2
Kronos Inc 2.8
First Data Corp 2.8
Altice SA 2.8
Total 37.3%
View Full Holdings Historical Holdings
Portfolio Statistics
(as of 28 February 2017)
Number of Securities 123
Number of Issuers 82
30-Day SEC Yield (ARTFX) 4.97%
View Supplemental Statistics
Portfolio Composition
(% of total portfolio as of 28 February 2017)
Corporate Bonds 76.0
Bank Loans 20.6
Equities 0.5
Cash and Equivalents 2.9
Total 100.0%
Credit Quality
(% as of 28 February 2017)
BBB 12.8
BB 22.0
B 34.3
CCC 28.4
CC 0.8
Unrated 1.7
Total 100.0%
Maturity Distribution
(% of total portfolio as of 28 February 2017)
< 1 year
1 - <3 years 4.5
3 - <5 years 24.9
5 - <7 years 34.9
7 - <10 years 34.1
10+ years 1.6
TOTAL 100.0%
The investment team leverages high degrees of experience and knowledge within a disciplined investment process. Learn more about the Team.
  • Bryan C. Krug, CFA
  • Portfolio Manager
  • 16Years Investment
    Experience

Artisan Partners Insights

Fixed income investments entail credit and interest rate risk. In general, when interest rates rise, fixed income fund values fall and investors may lose principal value. High income securities (junk bonds) are fixed income instruments rated below investment grade. High income securities are speculative, have a higher degree of default risk than higher-rated bonds and may increase the portfolio’s volatility. The portfolio typically invests a significant portion of its assets in lower-rated high income securities (e.g., CCC). Loans carry risks including the insolvency of the borrower, lending bank or other intermediary. Loans may be secured, unsecured, or not fully collateralized, and may infrequently trade, experience delayed settlement, and be subject to restrictions on resale. Private placement and restricted securities are subject to strict restrictions on resale and may not be able to be easily sold and are more difficult to value.  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.  The use of derivatives may create investment leverage and increase the likelihood of volatility and risk of loss in excess of the amount invested.  These risks are discussed in the prospectus. Please read it carefully before you invest or send money. 

Performance Source: Artisan Partners/BofA Merrill Lynch. Data & Statistics Sources: Artisan Partners/S&P/Moody’s/Bloomberg. Unless otherwise indicated, percentages shown are of total fixed income securities in the portfolio. Portfolio turnover is reported as of the Fund’s fiscal year end. Portfolio statistics are intended to provide a general view of the entire portfolio, or Index, at a certain point in time and are calculated using information obtained from various data sources. Portfolio statistics include accrued interest unless otherwise stated and may vary from the official books and records of the Fund. 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. Unless otherwise noted, portfolio statistics represent the weighted average of the portfolio’s fixed-income securities and exclude cash and cash equivalents. For the purpose of determining the Fund's holdings, securities of the same issuer are aggregated to determine the weight in the Fund. Totals may not sum due to rounding. 

30-Day SEC Yield is based on a formula specified by the SEC that calculates a fund's hypothetical annualized income, as a percentage of its assets. This hypothetical yield will differ from the fund's actual experience and as a result, income distributions from the fund may be higher or lower. Credit Quality ratings are from S&P and/or Moody's. Ratings typically range from AAA (highest) to D (lowest) and are subject to change. The ratings apply to underlying holdings of the Portfolio and not the Portfolio itself. If securities are rated by both agencies, the higher rating was used. Securities not rated by S&P or Moody's are categorized as Unrated/Not Rated. Maturity Distribution represents the weighted average of the maturity dates of the securities held in the Portfolio. Free Cash Flow is a measure of financial performance calculated as operating cash flow minus capital expenditures. Porter’s 5 Forces: Adapted with the permission of The Free Press, a Division of Simon & Schuster Adult Publishing Group, from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. ©1985,1998 by Michael E. Porter. All rights reserved. 

BofA Merrill Lynch US High Yield Master II Index measures the performance of below investment grade $US-denominated corporate bonds publicly issued in the US market. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment. 

Source Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofAML”), used with permission. BofAML permits use of the BofAML indices and related data on an "as is" basis, makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the BofAML indices or any data included in, related to, or derived therefrom, assumes no liability in connection with the use of the foregoing, and does not sponsor, endorse, or recommend Artisan Partners or any of its products or services.