Investment Process

The investment team seeks to invest in cash-producing businesses in strong financial condition that are selling at undemanding valuations.

Attractive Valuation

  • Distinct discount to intrinsic value
  • Low expectations
  • Favorable risk/reward

Sound Financial Condition

  • Focus on financial flexibility and liquidity
  • Evaluate on- and off-balance sheet liabilities
  • Allows management to pursue value-enhancing initiatives

Attractive Business Economics

  • Focus on free cash flow and return on capital capabilities
  • Ability to grow underlying business value
  • Avoid “value traps”

In-depth Investment Process

 

    Other Funds Managed

    Investment
    Results (%)

    As of 31 August 2017 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
    Investor Class: ARTLX 0.96 6.06 14.51 5.32 10.87 5.86 6.89
    Russell 1000® Value Index 0.15 4.81 11.58 6.74 13.25 5.96 6.70
    Russell 1000® Index 2.30 11.79 16.16 9.21 14.37 7.73 8.12
    As of 30 June 2017 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
    Investor Class: ARTLX 1.32 5.05 18.37 5.67 11.63 5.33 6.91
    Russell 1000® Value Index 1.34 4.66 15.53 7.36 13.94 5.57 6.79
    Russell 1000® Index 3.06 9.27 18.03 9.26 14.67 7.29 8.03

    Calendar Year Returns (%)

    2012 2013 2014 2015 2016
    Investor Class: ARTLX 13.65 25.75 4.96 -9.10 29.04
    Russell 1000® Value Index 17.51 32.53 13.45 -3.83 17.34
    Russell 1000® Index 16.42 33.11 13.24 0.92 12.05

    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. 

    Ratings

    Morningstar Overall RatingTM
    As of 31 August 2017
       
    Morningstar Analyst RatingTM
    As of 31 August 2017
    Bronze

    Morningstar Rating and Analyst Rating Disclosure

    Expense Ratio

    Semi-Annual Report 31 March 2017 0.97%
    Prospectus 30 September 2016 0.97%

    Expense Ratio Disclosure

    See prospectus for more information. Semi-Annual Report Figures: Unaudited, annualized for the six month period. 

    Top 10 Holdings
    (% of total portfolio as of 31 August 2017)
    Air Lease Corp (Industrials) 4.5
    LyondellBasell Industries NV (Materials) 4.3
    Citigroup Inc (Financials) 4.3
    Berkshire Hathaway Inc (Financials) 4.1
    Apple Inc (Information Technology) 3.9
    Alphabet Inc (Information Technology) 3.8
    Devon Energy Corp (Energy) 3.4
    Cie Generale des Etablissements Michelin (Consumer Discretionary) 3.4
    Goldcorp Inc (Materials) 3.4
    Agrium Inc (Materials) 3.3
    Total 38.2%
    View Full Holdings Historical Holdings
    Portfolio Statistics
    (as of 31 August 2017)
    Median Market Cap (Billions) $25.2
    Weighted Avg. Market Cap (Billions) $129.2
    Weighted Harmonic Avg. P/E (FY1) 15.7X
    Weighted Harmonic Avg. P/E (FY2) 14.1X
    Median Price/Book Value 2.0X
    Median ROE 11.0%
    Median Fixed Charge Coverage Ratio 7.4X
    Active Share 86.2%
    Portfolio Turnover Rate 52.1%
    Number of Securities 38
    Cash (% of total portfolio) 5.2%
    Non U.S. Equities (% of total portfolio) 15.7%
    Market Cap Distribution
    (% of total portfolio equities as of 31 August 2017)

    $ in billions
    225.0+ 17.5
    100.0–225.0 11.0
    40.0–100.0 16.6
    15.0–40.0 18.0
    0.0–15.0 36.9
    TOTAL 100.0%
    Sector Diversification
    (% of total portfolio equities as of 31 August 2017)
    Consumer Discretionary 15.3
    Consumer Staples
    Energy 13.7
    Financials 20.0
    Health Care 7.8
    Industrials 6.0
    Information Technology 19.0
    Materials 16.1
    Real Estate 2.1
    Telecommunication Services
    Utilities
    Total 100.0%
    The investment team leverages high degrees of experience and knowledge within a disciplined investment process. Learn more about the Team.
    • George O. Sertl, CFA
    • Portfolio Manager
    • 25Years Investment
      Experience
    • James C. Kieffer, CFA
    • Portfolio Manager
    • 28Years Investment
      Experience
    • Daniel L. Kane, CFA
    • Portfolio Manager
    • 19Years Investment
      Experience

    Portfolio Manager Viewpoints

    • Video Update—Jim Kieffer, U.S. Value Team
    • Watch Now
    • Video Update—George Sertl, U.S. Value Team
    • Watch Now

    Artisan Partners Insights

    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.  Value securities may underperform other asset types during a given period.  These risks are discussed in the prospectus. Please read it carefully before you invest or send money. 

    Performance Source: Artisan Partners/Russell. Data & Statistics Sources: Artisan Partners/FactSet/Russell/GICS. Sector exposure percentages reflect sector designations as currently classified by GICS. Portfolio turnover is reported as of the Fund’s fiscal year end. 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. 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. Weighted Harmonic Average is a calculation of weighted average commonly used for rates or ratios. 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. Price-to-Book Ratio (P/B Ratio) is a valuation measure used to compare a stock's market value to its book value. Return on Equity (ROE) is a profitability ratio that measures the amount of net income returned as a percentage of shareholders equity. Fixed Charge Coverage Ratio indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. 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. Portfolio Turnover  is a measure of the trading activity in an investment portfolio—how often securities are bought and sold by a portfolio. Free Cash Flow is a measure of financial performance calculated as operating cash flow minus capital expenditures. Return on Capital (ROC) is a measure of how effectively a company uses the money (borrowed or owned) invested in its operations. 

    Russell 1000® Index measures the performance of roughly 1,000 US large-cap companies. Russell 1000® Value Index measures the performance of US large-cap companies with lower price/book ratios and forecasted growth values. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment. 

    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. 

    The Global Industry Classification 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.

    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. 

    The Morningstar Analyst Rating is not a credit or risk rating. It is a subjective evaluation performed by the mutual fund analysts of Morningstar, Inc. Morningstar evaluates funds based on five key pillars, which are process, performance, people, parent, and price. Morningstar's analysts use this five pillar evaluation to identify funds they believe are more likely to outperform over the long term on a risk-adjusted basis. Analysts consider quantitative and qualitative factors in their research, and the weighting of each pillar may vary. The Analyst Rating ultimately reflects the analyst's overall assessment and is overseen by Morningstar's Analyst Rating Committee. The approach serves not as a formula but as a framework to ensure consistency across Morningstar's global coverage universe.

    The Analyst Rating scale ranges from Gold to Negative, with Gold being the highest rating and Negative being the lowest rating. A fund with a "Gold" rating distinguishes itself across the five pillars and has garnered the analysts' highest level of conviction. A fund with a 'Silver' rating has notable advantages across several, but perhaps not all, of the five pillars-strengths that give the analysts a high level of conviction. A "Bronze"-rated fund has advantages that outweigh the disadvantages across the five pillars, with sufficient level of analyst conviction to warrant a positive rating. A fund with a 'Neutral' rating isn't seriously flawed across the five pillars, nor does it distinguish itself very positively. A "Negative" rated fund is flawed in at least one if not more pillars and is considered an inferior offering to its peers. Analyst Ratings are reevaluated at least every 14 months. View detailed information about Morningstar’s Analyst Rating, including its methodology .