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
  • 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 31 August 2020 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
    Investor Class: ARTFX 5.69 2.18 6.13 5.31 6.96 6.16
    ICE BofA US High Yield Master II Index 5.81 0.75 3.71 4.51 6.28 4.80
    As of 30 June 2020 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
    Investor Class: ARTFX 12.13 -3.33 1.25 3.79 5.56 5.40
    ICE BofA US High Yield Master II Index 9.61 -4.78 -1.10 2.94 4.58 4.00

    Calendar Year Returns (%)

    2015 2016 2017 2018 2019
    Investor Class: ARTFX 0.99 14.52 8.89 -1.70 14.00
    ICE BofA US High Yield Master II Index -4.64 17.49 7.48 -2.26 14.41
    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 31 August 2020
         

    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. 

    Expense Ratio

    Semi-Annual Report 31 March 2020 0.99%
    Prospectus 30 September 2019 0.99%

    Expense Ratio Disclosure

    Semi-Annual Report Figure(s): Unaudited, annualized for the six month period. Excludes Acquired Fund Fees & Expenses as described in the prospectus. See prospectus for further details. 

    Top 10 Holdings
    (% of total portfolio as of 31 August 2020)
    General Electric Co 5.4
    Carnival Corp 3.4
    NFP Corp 3.3
    Vertafore Inc 3.1
    Surgery Center Holdings Inc 2.9
    Acrisure LLC 2.8
    TKC Holdings Inc 2.8
    Comstock Resources Inc 2.7
    VistaJet Ltd 2.6
    Realogy Group LLC 2.4
    Total 31.4%
    View Full Holdings Historical Holdings
    Portfolio Statistics
    (as of 31 August 2020)
    Number of Securities 173
    Number of Issuers 104
    30-Day SEC Yield (ARTFX) 5.71%
    View Supplemental Statistics
    Portfolio Composition
    (% of total portfolio as of 31 August 2020)
    Corporate Bonds 72.8
    Bank Loans 25.6
    Equities 0.0
    Cash and Cash Equivalents 1.6
    Total 100.0%
    Ratings Distribution
    (% as of 31 August 2020)
    BBB 15.0
    BB 14.4
    B 40.8
    CCC 25.5
    CC 1.9
    Unrated 2.4
    Total 100.0%
    Maturity Distribution
    (% of total portfolio as of 31 August 2020)
    < 1 year 1.8
    1 - <3 years 11.8
    3 - <5 years 29.8
    5 - <7 years 32.9
    7 - <10 years 15.0
    10+ years 8.7
    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
    • 20Years Investment
      Experience
    • Volatility Creates High Yield Opportunity
    • View PDF
    • Actionable Insights From Alternative Data
    • View PDF
    Current and future portfolio holdings are subject to risk.  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.  The portfolio’s use of derivative instruments may create additional leverage and involve risks different from, or greater than, the risks associated with investing in more traditional investments.  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/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. 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. Treasury futures represented net notional exposure of -6.26% 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, used with permission. ICE Data Indices, LLC permits use of the ICE BofA 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 ICE BofA 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. 

    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.

    © 2020 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.