Investment Process

The team’s investment approach is based on thematic idea generation, a systematic framework for analyzing companies and proactive risk management. Utilizing this approach, the team seeks to construct a focused portfolio designed to maximize alpha while limiting downside risk over the long term.

Thematic Idea Generation

  • Identify inflections in multi-year trends caused by changes in supply/demand dynamics, societal behavior, market conditions, technology, laws/regulations and business models, among other variables—these can lead to powerful re-ratings of industries and companies
  • Find areas where the team’s views on industry fundamentals differ from consensus estimates—a key element in alpha generation

Systematic Analytical Framework

  • Apply a systematic framework for analyzing companies across sectors and themes, creating a repeatable and methodical decision-making process
  • Focus on multi-year earnings power differentiation, expected outcome scenario analysis, return on invested capital and discounted cash flow valuations using the team’s proprietary company models
  • Utilize internally developed visual outputs to consistently evaluate positions across the portfolio

Proactive Risk Management

  • Incorporate risk management into all stages of the investment process
  • Evaluate metrics including crowding, correlation, volatility, stress tests, liquidity, factor analysis and macro drivers, in order to inform portfolio construction and position sizing
  • Where appropriate, use various instruments, such as options, in an effort to magnify alpha and minimize downside

Investment Results (%)

As of 31 October 2017 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Investor Class: ARTTX 4.58 23.40
S&P 500® Index 2.33 9.58
As of 30 September 2017 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Investor Class: ARTTX 12.17 18.00
S&P 500® Index 4.48 7.08
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. Performance may reflect agreements to limit a Fund’s expenses, which would reduce performance if not in effect. The fund’s investments in initial public offerings (IPOs) made a material contribution to performance. IPO investments may contribute significantly to a small portfolio’s return, an effect that will generally decrease as assets grow. IPO investments may be unavailable in the future. The Fund's returns may vary greatly over shorter periods due to the limited operating period since inception. 

Expense Ratio

  Gross Net
Semi-Annual Report 31 March 2017
Prospectus 5 March 2017 1.56% 1.50%

Expense Ratio Disclosure

Net expenses reflect a contractual Fund expense reimbursement agreement in effect through 30 Jun 2018. Includes estimated expenses for the current fiscal year. See prospectus for more information. 

Top 5 Issuers
(% of net assets as of 31 October 2017)
Northrop Grumman Corp (Defense) 8.0
Salesforce.com Inc (Software) 5.3
Nintendo Co Ltd (Video Games) 5.1
Comcast Corp (Broadband) 5.1
Lamb Weston Holdings Inc (Turnaround) 5.0
Total 28.6%
Portfolio Statistics
(as of 31 October 2017)
Top 5 Issuers (% of net assets) 28.6%
Weighted Avg. Market Cap (Billions) $120.2
Weighted Avg. ROE 18.5%
Weighted Avg. LT EPS Growth Rate (3-5 Yr) 18.9%
Weighted Avg. P/E (FY2) 23.8X
Active Share 88.6%
Cash (% of total portfolio) 0.7%
Market Cap Distribution
(% of net assets as of 31 October 2017)

$ in billions
100.0+ 25.6
50.0-100.0 19.3
10.0-50.0 34.8
0.0-10.0 20.3
TOTAL 100.1%
Portfolio Exposure by Theme
(% of net assets as of 31 October 2017)
Software 18.4
Turnaround 16.0
Defense 14.6
Data Monetization 13.7
Video Games 11.5
Broadband 11.2
Balance Sheet Financials 6.8
Other 3.2
Secular Growth 2.4
Infrastructure 1.5
Media 0.7
Total 100.1%
Sector Diversification
(% of net assets as of 31 October 2017)
Communications 11.9
Consumer Discretionary 13.0
Consumer Staples 5.0
Energy
Financials 15.0
Health Care
Industrials 17.8
Materials 4.6
Technology 32.9
Utilities
Total 100.1%
% of net assets represents the portfolio’s exposures based on the economic value of investments and options are delta-adjusted. Cash and cash equivalents represented 0.7% of net assets. Statistics shown exclude ETFs and ETF options, which represented 0% and -3.15% of net assets, respectively. 
The investment team leverages high degrees of experience and knowledge within a disciplined investment process. Learn more about the Team.
  • Christopher Smith
  • Portfolio Manager
  • 14Years Investment
    Experience
A non-diversified portfolio may invest a larger portion of assets in securities of a smaller number of issuers and performance of a single issuer may affect overall portfolio performance greater than in a diversified portfolio. 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.  The use of derivatives in a portfolio may create investment leverage and increase the likelihood of volatility and risk of loss in excess of the amount invested.  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 types during a given period.  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.  These risks are discussed in the prospectus. Please read it carefully before you invest or send money. 

Performance Source: Artisan Partners/S&P®. 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. For the purpose of determining the Fund's holdings, securities of the same issuer are aggregated to determine the weight in the Fund. Cash weighting includes cash and cash equivalents. 

Theme classifications determined by investment team. Portfolio sector classifications are defined by the investment team and may differ substantially from the Bloomberg Industry Classification System (BICS) classifications. For the portfolio’s sector breakdown according to BICS methodology, refer to the Fund’s most recent portfolio holdings filed at www.sec.gov. 

All information in this report includes all classes of shares, except performance and expense ratio information and as otherwise indicated. 

S&P 500® Index measures the performance of 500 US companies focused on the large-cap sector of the market. The index is unmanaged; includes net reinvested dividends; does not reflect fees or expenses; and is not available for direct investment. 

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“S&P DJI”) and/or its affiliates and has been licensed for use.  Copyright © 2017 S&P Dow Jones Indices LLC, a division of S&P Global, Inc. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). None of S&P DJI, Dow Jones, their affiliates or third party licensors makes any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

All options positions are displayed on a delta-adjusted notional value basis. Delta adjustment is necessary to properly account for the sensitivity of options to changes in price of the underlying security as well as for making exposure comparisons to the underlying security (measuring options exposure as premium will understate the economic exposure and risk, while measuring exposure as notional value will overstate the economic exposure). Delta-adjusted exposure is a measure for the exposure on the equity market created by the options. This estimation of the equity exposure of a portfolio is only approximate. The delta-adjusted exposure changes over time and is a function of the size and the precise composition of the options portfolio. 

Market Cap  is the aggregate value of all of a company's outstanding equity securities. Return on Equity (ROE) is a profitability ratio that measures the amount of net income returned as a percentage of shareholders equity. Weighted Average  is the average of values weighted to the data set's composition. The Thematic porfolio Weighted Avg. P/E is a Weighted Harmonic Average. Weighted Harmonic Average is a calculation of weighted average commonly used for rates or ratios. LT EPS Growth Rate is the average of the 3-5 year forecasted EPS growth rate of a company. Price-to-Earnings Ratio (P/E Ratio) measures how expensive a stock is. Earnings figures used for FY1 and FY2 are estimates for the current and next unreported fiscal years. Active Share is defined as the percentage of a portfolio that differs from its benchmark index. Active Share can range from 0% for an index fund that perfectly mirrors its benchmark to 100% for a portfolio with no overlap with an index. Active Share is not delta-adjusted and includes cash, cash equivalents, ETFs and ETF options.