Investment Process

The investment team seeks to generate appealing risk-adjusted returns, investing along the corporate capital structure in bonds, loans and other securities of leveraged corporate issuers. The team’s aim is to take advantage of the illiquidity premium and the asymmetric risk profile in credit investments.

Business Quality

  • Qualitative industry analysis
  • Examine management decision-making history
  • Consider ESG-related risk factors

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

 

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Other Funds Managed

Investment
Results (%)

As of 28 February 2023 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Investor Class: ARTFX 3.94 3.94 -4.93 3.21 4.10 5.20
ICE BofA US High Yield Master II Index 2.57 2.57 -5.52 1.14 2.70 3.57
As of 31 December 2022 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Investor Class: ARTFX 1.82 -9.82 -9.82 1.71 3.35 4.83
ICE BofA US High Yield Master II Index 3.98 -11.22 -11.22 -0.23 2.12 3.34

Calendar Year Returns (%)

2018 2019 2020 2021 2022
Investor Class: ARTFX -1.70 14.00 9.97 6.10 -9.82
ICE BofA US High Yield Master II Index -2.26 14.41 6.17 5.36 -11.22
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. Unlike the Index, Artisan High Income Fund may hold loans and other security types. At times, this causes material differences in relative performance. 

Ratings

Morningstar Overall RatingTM
As of 28 February 2023
     
Morningstar Analyst RatingTM
As of 28 February 2023
Silver

Morningstar Rating Disclosure

Star ratings are based on risk-adjusted returns. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-year, 5-year, and 10-year Morningstar Ratings metrics. 623 funds in the overall High Yield Bond category.  View full Fund ratings.

The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five-pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research.  View Important Disclosures below for further details. 

Expense Ratio

Annual Report 30 September 2022 0.94%
Prospectus 30 September 2022 0.95%

Expense Ratio Disclosure

See prospectus for further details. 

Top 10 Holdings
(% of total portfolio as of 28 February 2023)
Charter Communications Inc 4.0
Acrisure LLC 3.9
NFP Corp 3.4
Carnival Corp 3.4
Altice France 3.1
NCL Corp Ltd 2.9
Medline Industries Inc 2.8
Virgin Media Secured Finance PLC 2.8
VistaJet Ltd 2.2
Altice USA Inc 2.2
Total 30.7%
View Full Holdings Historical Holdings
Portfolio Statistics
(as of 28 February 2023)
Number of Holdings 201
Number of Issuers 119
30-Day SEC Subsidized Yield (ARTFX) 8.84%
30-Day SEC Unsubsidized Yield (ARTFX) 8.84%
View Supplemental Statistics
Portfolio Composition
(% of total portfolio as of 28 February 2023)
Portfolio Composition chart
Corporate Bonds 77.7
Bank Loans 15.3
Equities 0.3
Cash and Cash Equivalents 6.7
Total 100.0%
Ratings Distribution
(% as of 28 February 2023)
BBB 4.8
BB 17.2
B 50.6
CCC 25.0
Unrated 2.4
Total 100.0%
Maturity Distribution
(% of fixed income securities as of 28 February 2023)
< 1 year
1 - <3 years 6.7
3 - <5 years 26.7
5 - <7 years 49.4
7 - <10 years 14.4
10+ years 2.8
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
  • 22Years Investment
    Experience
Current and future portfolio holdings are subject to risk. The value of portfolio securities selected by the investment team may rise or fall in response to company, market, economic, political, regulatory or other news, at times greater than the market or benchmark index. A portfolio’s environmental, social and governance (“ESG”) considerations may limit the investment opportunities available and, as a result, the portfolio may forgo certain investment opportunities and underperform portfolios that do not consider ESG factors. Fixed income securities carry interest rate risk and credit risk for both the issuer and counterparty and investors may lose principal value. In general, when interest rates rise, fixed income values fall. High income securities (junk bonds) are speculative, experience greater price volatility and have a higher degree of credit and liquidity risk than bonds with a higher credit rating. The portfolio typically invests a significant portion of its assets in lower-rated high income securities (e.g., CCC). Loans carry risks including insolvency of the borrower, lending bank or other intermediary. Loans may be secured, unsecured, or not fully collateralized, trade infrequently, experience delayed settlement, and be subject to resale restrictions. Private placement and restricted securities may not be easily sold due to resale restrictions and are more difficult to value. Use of derivatives may create investment leverage and increase the likelihood of volatility and risk of loss in excess of the amount invested. 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 and less developed markets, including frontier markets. These risks are discussed in the prospectus. Please read it carefully before you invest or send money. 

Closed to most new investors. For eligibility requirements see statutory prospectus.

Performance Source: Artisan Partners/ICE BofA. Data & Statistics Sources: Artisan Partners/S&P/Moody’s/Bloomberg. Unless otherwise indicated, percentages shown are of total fixed income securities in the portfolio. Annual 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 outlier data and certain securities which lack applicable attributes, such as private securities 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. Treasury futures represented net notional exposure of -0.00% of net assets. 

ICE BofA 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 ICE Data Indices, LLC is used with permission. ICE® is a registered trademark of ICE Data Indices, LLC or its affiliates and BofA® is a registered trademark of Bank of America Corporation licensed by Bank of America Corporation and its affiliates ("BofA"), and may not be used without BofA's prior written approval. The index data referenced herein is the property of ICE Data Indices, LLC, its affiliates (“ICE Data”) and/or its third party suppliers and, along with the ICE BofA trademarks, has been licensed for use by Artisan Partners Limited Partnership. ICE Data and its Third Party Suppliers accept no liability in connection with the use of such index data or marks. See www.artisanpartners.com/ice-data.html for a full copy of the Disclaimer. 

The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2023 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. 

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund. For actively managed strategies, people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. Performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further modified by a measure of the dispersion of historical alphas among relevant peers. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net alpha relative to Morningstar category peers. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months. Click here for more detailed information about Morningstar’s Analyst Rating, including its methodology.