UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08932
Artisan Partners Funds, Inc.
(Exact name of registrant as specified in charter)
875 East Wisconsin Avenue, Suite 800
Milwaukee, WI 53202
(Address of principal executive offices) (Zip Code)
Sarah A. Johnson | Rajib Chanda | |
Artisan Partners Funds, Inc. | Ropes & Gray LLP | |
875 East Wisconsin Avenue, Suite 800 | One Metro Center | |
Milwaukee, Wisconsin 53202 | 700 12th Street, N.W., Suite 900 | |
Washington, D.C. 20005-3948 |
(Name and address of agents for service)
Registrant’s telephone number, including area code: (414) 390-6100
Date of fiscal year end: 9/30/12
Date of reporting period: 9/30/12
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Shareholders.
ANNUAL
REPORT
September 30, 2012
ARTISAN GLOBAL EQUITY FUND
ARTISAN GLOBAL OPPORTUNITIES FUND
(formerly known as
Artisan Growth Opportunities Fund)
ARTISAN GLOBAL VALUE FUND
ARTISAN INTERNATIONAL FUND
ARTISAN INTERNATIONAL SMALL CAP FUND
ARTISAN INTERNATIONAL VALUE FUND
ARTISAN MID CAP FUND
ARTISAN MID CAP VALUE FUND
ARTISAN SMALL CAP FUND
ARTISAN SMALL CAP VALUE FUND
ARTISAN VALUE FUND
ARTISAN FUNDS
INVESTOR SHARES
ARTISAN FUNDS
P.O. BOX 8412
BOSTON, MA 02266-8412
This report and the audited financial statements contained herein are provided for the general information of the shareholders of Artisan Funds. Before investing, investors should consider carefully each Fund’s investment objective, risks and charges and expenses. For a prospectus, which contains that information and more information about each Fund, please call 800.344.1770 or visit our website at www.artisanfunds.com. Read it carefully before you invest or send money.
Company discussions are for illustration only and are not intended as recommendations of individual stocks. The discussions present information about the companies believed to be accurate, and the views of the portfolio managers, as of September 30, 2012. That information and those views may change, and the Funds disclaim any obligation to advise shareholders of any such changes. Artisan Emerging Markets Fund, Artisan Global Opportunities Fund, Artisan Global Value Fund, Artisan International Fund, Artisan International Value Fund, Artisan Mid Cap Fund, Artisan Mid Cap Value Fund, Artisan Small Cap Fund, Artisan Small Cap Value Fund and Artisan Value Fund offer other classes of shares. Reports on each of the other classes are available under separate cover.
Artisan Funds offered through Artisan Partners Distributors LLC, member FINRA.
ARTISAN GLOBAL EQUITY FUND (ARTHX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan Global Equity Fund employs a fundamental stock selection process focused on identifying long-term growth opportunities to build a global (i.e., U.S. and non-U.S.) portfolio of companies of all market capitalizations. The investment team seeks to invest in high-quality, secular (as opposed to cyclical) growth companies with sustainable growth characteristics at attractive valuations that do not fully reflect their long-term potential.
Sustainable Growth. The team applies a fundamental approach to identifying the long-term, sustainable growth characteristics of potential investments. The team seeks high-quality companies that typically have a sustainable competitive advantage, a superior business model and a high-quality management team.
Valuation. The team uses multiple valuation metrics to establish a target price range. The team assesses the relationship between its estimate of a company’s sustainable growth prospects and its current valuation.
Themes. The team identifies long-term secular growth trends with the objective of investing in companies that have meaningful exposure to these trends. The team’s fundamental analysis focuses on those industry leaders with attractive growth and valuation characteristics that will be long-term beneficiaries of any structural change and/or trend.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (3/29/2010 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | Since Inception | ||||||
Artisan Global Equity Fund | 35.43 | % | 12.67 | % | ||||
MSCI ACWI IndexSM | 20.98 | 5.50 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. The Fund’s investments in initial public offerings (IPOs) made a material contribution to the Fund’s performance. IPO investments are not an integral component of the Fund’s investment process and may not be available in the future. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners Limited Partnership’s (the “Adviser” or “Artisan Partners”) contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 113 for a description of the index.
2
INVESTING ENVIRONMENT
Slow growth and high unemployment in the U.S. and eurozone prompted activist central bankers in each region to ease monetary conditions. However, neither region’s policymakers were able to agree upon long-term fiscally sustainable solutions over the period. The BRICs (Brazil, Russia, India and China) also showed signs of slowing growth, causing leaders in China and Brazil to attempt to generate economic growth through interest rate cuts or stimulus projects. Despite macroeconomic headwinds, the MSCI All Country World IndexSM advanced over the period. Regionally, the Americas were strongest. On a sector basis, strength came from the technology, health care and the consumer sectors. In addition, the popularly maligned financial sector showed growth over the period.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 16.9 | % | 13.1 | % | ||||
Consumer Staples | 21.8 | 25.8 | ||||||
Energy | 4.7 | 5.0 | ||||||
Financials | 14.5 | 11.9 | ||||||
Healthcare | 8.6 | 6.4 | ||||||
Industrials | 9.9 | 12.0 | ||||||
Information Technology | 12.7 | 15.1 | ||||||
Materials | 5.6 | 6.8 | ||||||
Telecommunication Services | 1.8 | 1.2 | ||||||
Other assets less liabilities | 3.5 | 2.7 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Global Equity Fund returned 35.43%, outperforming the MSCI All Country World IndexSM, which returned 20.98% over the same period.
Performance of the following stocks had a positive impact on the portfolio during the period: Movado Group, Inc., an accessories retailer; Sands China Ltd., a casino and resort operator; CALBEE, Inc., a Japanese snack food manufacturer; Google Inc., an internet search engine provider; and Linde AG, a gas and engineering company.
Notable detractors included: Abercrombie & Fitch Co., a specialty retailer; Diamond Foods, Inc., a branded food company; Anadarko Petroleum Corporation, an independent oil and gas exploration and production company; Nexon Co., Ltd., an online game developer; and Arcos Dorados Holdings, Inc., a fast-food restaurant.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 36.7 | % | 40.0 | % | ||||
Europe | 38.7 | 37.1 | ||||||
Pacific Basin | 11.7 | 13.9 | ||||||
Emerging Markets | 9.4 | 6.3 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including CALBEE, Inc., a Japanese snack food manufacturer; JAPAN TOBACCO INC., a tobacco product manufacturer; SABMiller plc, a beer company; SCHLUMBERGER N.V. (SCHLUMBERGER LIMITED), an oil services company; and Anadarko Petroleum Corporation, an independent oil and gas exploration and production company. We funded these purchases in part by selling our positions in DANONE S.A., Schneider Electric SA, The Proctor & Gamble Company, McDonald’s Corporation, and Vodafone Group PLC.
3
ARTISAN GLOBAL OPPORTUNITIES FUND (ARTRX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan Global Opportunities Fund employs a fundamental investment process to construct a diversified portfolio of growth companies across a broad capitalization range. The Fund’s investment process focuses on two distinct areas – security selection and capital allocation.
The Fund’s investment team attempts to identify companies that possess franchise characteristics that are selling at attractive valuations and benefiting from an accelerating profit cycle.
Franchise Characteristics. These are characteristics that the team believes help to protect a company’s stream of cash flow from the effects of competition. The team looks for companies with at least two of the following characteristics: low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name.
Attractive Valuations. Through its own fundamental research, the team estimates the amount a private market buyer would pay to buy the entire company (the company’s “intrinsic value” or “private market value”) and considers whether to purchase a stock if it sells at a discount to that estimate.
Accelerating Profit Cycle. The team tries to invest in companies that are well positioned for long-term growth, at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.
Based on the investment team’s fundamental analysis of a company’s profit cycle, portfolio holdings develop through three stages. GardenSM investments are small positions in the early part of their profit cycle that will warrant a more sizeable allocation once their profit cycle accelerates. CropSM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycle. HarvestSM investments are positions that are being reduced as they near the team’s estimate of full valuation or their profit cycle begins to decelerate.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (9/22/2008 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | Since Inception | |||||||||
Artisan Global Opportunities Fund | 32.37 | % | 16.81 | % | 9.81 | % | ||||||
MSCI ACWI IndexSM | 20.98 | 7.23 | 3.55 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners’ contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 113 for a description of the index.
4
INVESTING ENVIRONMENT
In the one-year period ended September 30, 2012, the global stock market, as represented by the MSCI All Country World IndexSM, posted a positive return. Healthy corporate profitability and continued, albeit slow, economic progress from the lows following the 2008 financial crisis were positive influences to market returns. Conversely, concerns related to high sovereign debt levels in developed regions, particularly in Europe, created market volatility and fueled uncertainty regarding the sustainability of the economic recovery. Signs of economic activity leveling out in several major emerging markets countries also added to concerns.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 13.2 | % | 9.5 | % | ||||
Consumer Staples | 2.9 | 2.0 | ||||||
Energy | 6.7 | 6.3 | ||||||
Financials | 5.4 | 8.6 | ||||||
Healthcare | 18.2 | 17.9 | ||||||
Industrials | 13.4 | 10.7 | ||||||
Information Technology | 28.1 | 33.6 | ||||||
Materials | 4.1 | 6.8 | ||||||
Other assets less liabilities | 8.0 | 4.6 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Global Opportunities Fund returned 32.37%, outperforming the MSCI All Country World IndexSM, which returned 20.98%.
Performance of the following stocks had a positive impact on the portfolio during the period: Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, Apple Inc., a manufacturer of computers and electronic media devices, Monsanto Company, a provider of agricultural products for farmers, Google Inc., an Internet search engine provider, and Discover Financial Services, a diversified financial services provider.
Notable detractors included: Nokia Corporation, a provider of wireless and wireline communication services and equipment; Facebook, Inc., a provider of an Internet social network website; SINA Corporation, an online media and mobile value-added services provider; Ctrip.com International, Ltd., an online/call-center travel agency provider; and Shandong Weigao Group Medical Polymer Company Limited, a developer of single-use medical devices.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 62.0 | % | 59.9 | % | ||||
Europe | 9.6 | 16.9 | ||||||
Emerging Markets | 17.2 | 14.4 | ||||||
Pacific Basin | 3.2 | 4.2 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Sanofi, a diversified health care company; SAP AG, a software solutions provider; Qualicorp SA, a health care benefits administrator; Amazon.com, Inc., a retail website operator; and Raia Drogasil SA, a retail drugstore chain in Brazil. We funded these purchases in part by selling our positions in Allergan, Inc., Broadcom Corporation, Coca-Cola Icecek AS, Baker Hughes Incorporated and Telefonaktiebolaget LM Ericsson.
5
ARTISAN GLOBAL VALUE FUND (ARTGX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan Global Value Fund employs a fundamental investment process to construct a diversified portfolio of securities of undervalued U.S. and non-U.S. companies. The Fund’s investment process focuses on identifying what the investment team considers to be high- quality, undervalued businesses that offer the potential for superior risk/reward outcomes. The team’s in-depth research process focuses on four key investment characteristics:
Undervaluation. Determining the intrinsic value of the business is the heart of the team’s research process. The team believes that intrinsic value represents the amount that a buyer would pay to own a company’s future cash flows. The team seeks to invest at a significant discount to the team’s estimate of the intrinsic value of a business.
Business Quality. The team seeks to invest in companies with histories of generating strong free cash flow, improving returns on capital and strong competitive positions in their industries.
Financial Strength. The team believes that investing in companies with strong balance sheets helps to reduce the potential for capital risk and provides company management the ability to build value when attractive opportunities are available.
Shareholder-Oriented Management. The team’s research process attempts to identify management teams with a history of building value for shareholders.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (12/10/2007 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | Since Inception | |||||||||
Artisan Global Value Fund | 26.90 | % | 12.01 | % | 4.28 | % | ||||||
MSCI ACWI IndexSM | 20.98 | 7.23 | -2.42 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners’ contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 113 for a description of the index.
6
INVESTING ENVIRONMENT
Global equity markets experienced more of the same volatility that they have been experiencing for the past few years. The euro crisis continued during the year ended September 30, 2012 and most economic data suggested a sluggish, slowing global economy. Despite all of the macro negativity, stocks moved ahead and posted a double-digit gain for the year ended September 30, 2012. Investor sentiment received a boost as central banks around the world continued to pour liquidity into global markets. Meanwhile, earnings reports showed that many companies were weathering the slow growth economic environment.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 17.3 | % | 12.1 | % | ||||
Consumer Staples | 13.2 | 11.6 | ||||||
Energy | 2.1 | 2.1 | ||||||
Financials | 26.8 | 23.2 | ||||||
Healthcare | 7.9 | 6.0 | ||||||
Industrials | 11.9 | 6.9 | ||||||
Information Technology | 13.7 | 15.0 | ||||||
Materials | 1.7 | 1.2 | ||||||
Other assets less liabilities | 5.4 | 21.9 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Global Value Fund returned 26.90%, outperforming the MSCI All Country World IndexSM, which returned 20.98% over the same period.
Performance of the following stocks had a positive impact on the portfolio during the period: MasterCard Incorporated, a payment solutions company; Compass Group PLC, a catering company; Signet Jewelers Ltd., a jewelry retailer; Google Inc., an Internet search company; and Diageo plc, a maker of alcoholic beverages.
Notable detractors included: SANKYO CO., LTD., a pachinko machine manufacturer; Daiwa Securities Group Inc., a financial services provider; Mitsubishi UFJ Financial Group, Inc., a financial and investment services provider; and The Progressive Corporation, an insurance holding company.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 54.2 | % | 47.6 | % | ||||
Europe | 32.6 | 27.1 | ||||||
Pacific Basin | 7.8 | 3.4 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including software supplier Oracle Corporation; insurance services holding company Aon PLC; food retailer Tesco plc; insurance holding company The Progressive Corporation; and toy manufacturer Hasbro, Inc. We funded these purchases in part by selling our positions in Lowe’s Companies, Inc., Lockheed Martin Corporation, Panalpina Welttransport Holding AG, Koninklijke Philips Electronics N.V. and Mitsubishi UFJ Financial Group, Inc.
7
ARTISAN INTERNATIONAL FUND (ARTIX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan International Fund employs a fundamental stock selection process focused on identifying long-term growth opportunities to build a portfolio of non-U.S. growth companies of all market capitalizations. The investment team seeks to invest in companies within its preferred themes with sustainable growth characteristics at attractive valuations that do not fully reflect their long-term potential.
Themes. The team identifies long-term secular (as opposed to cyclical) growth trends with the objective of investing in companies that have meaningful exposure to these trends. The team’s fundamental analysis focuses on those industry leaders with attractive growth and valuation characteristics that will be long-term beneficiaries any structural change and/or trend.
Sustainable Growth. The team applies a fundamental approach to identifying the long-term, sustainable growth characteristics of potential investments. The team seeks high-quality companies that typically have a sustainable competitive advantage, a superior business model and a high-quality management team.
Valuation. The team uses multiple valuation metrics to establish a target price range. The team assesses the relationship between its estimate of a company’s sustainable growth prospects and its current valuation.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (12/28/1995 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan International Fund | 30.05 | % | 6.54 | % | -2.33 | % | 9.14 | % | 9.63 | % | ||||||||||
MSCI EAFE® Growth Index | 14.81 | 4.32 | -4.23 | 7.82 | 2.83 | |||||||||||||||
MSCI EAFE® Index | 13.75 | 2.12 | -5.24 | 8.20 | 3.99 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. See page 113 for a description of each index.
8
INVESTING ENVIRONMENT
Over the past twelve-month period ended September 30, 2012, investors were presented with plenty of market-moving headlines. As the eurozone crisis continued, government actions took center stage. Policy promises and stimulus measures spurred pro-cyclical rallies while ongoing concerns about slow growth worked to pare back some of those gains. Despite the prevalent macroeconomic concerns, stocks moved ahead.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 19.0 | % | 12.4 | % | ||||
Consumer Staples | 28.6 | 28.5 | ||||||
Energy | 4.4 | 2.6 | ||||||
Financials | 14.8 | 18.4 | ||||||
Healthcare | 2.2 | 6.2 | ||||||
Industrials | 12.9 | 12.9 | ||||||
Information Technology | 4.4 | 5.5 | ||||||
Materials | 7.6 | 8.0 | ||||||
Telecommunication Services | 2.5 | 3.7 | ||||||
Other assets less liabilities | 3.6 | 1.8 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan International Fund returned 30.05%, outperforming the MSCI EAFE® and MSCI EAFE® Growth indices, which returned 13.75% and 14.81%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Macau casino operator Sands China Ltd.; Belgian brewer Anheuser-Busch InBev NV; Canadian freight and intermodal services provider Canadian Pacific Railway Limited; Japanese cigarette and tobacco products manufacturer JAPAN TOBACCO INC.; and German industrial gas company Linde AG.
Notable detractors included: French financial services company Societe Generale; Japanese manufacturer of electrical insulators NGK INSULATORS, LTD.; Argentina-based franchisee for an American fast-food restaurant Arcos Dorados Holdings, Inc.; Japanese trading company MITSUI & CO., LTD.; and Chinese financial services company China Construction Bank Corporation.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Europe | 52.2 | % | 53.4 | % | ||||
Pacific Basin | 31.2 | 24.8 | ||||||
Emerging Markets | 7.9 | 11.0 | ||||||
Americas | 5.1 | 9.0 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period including German financial services company Muenchener Rueckversicherungs-Gesellschaft AG, Ireland-based health care products company Covidien PLC, British financial services company HSBC Holdings plc, German chemical manufacturer Henkel AG & Co. KGaA and Chinese Internet services provider Tencent Holdings Limited. We funded these purchases in part by selling our positions in Siemens AG, Compagnie Financière Richemont SA, Adecco SA, Petróleo Brasileiro S.A. and VINCI SA.
9
ARTISAN INTERNATIONAL SMALL CAP FUND (ARTJX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan International Small Cap Fund employs a fundamental stock selection process focused on identifying long-term growth opportunities to build a portfolio of small non-U.S. growth companies. The investment team seeks to invest in companies within its preferred themes with sustainable growth characteristics at attractive valuations that do not fully reflect their long-term potential.
Themes. The team identifies long-term secular (as opposed to cyclical) growth trends with the objective of investing in companies that have meaningful exposure to these trends. The team’s fundamental analysis focuses on those industry leaders with attractive growth and valuation characteristics that will be long-term beneficiaries of any structural change and/or trend.
Sustainable Growth. The team applies a fundamental approach to identifying the long-term, sustainable growth characteristics of potential investments. The team seeks high-quality companies that typically have a sustainable competitive advantage, a superior business model and a high-quality management team.
Valuation. The team uses multiple valuation metrics to establish a target price range. The team assesses the relationship between its estimate of a company’s sustainable growth prospects and its current valuation.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (12/21/2001 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan International Small Cap Fund | 26.77 | % | 8.02 | % | -1.32 | % | 15.80 | % | 13.58 | % | ||||||||||
MSCI EAFE® Small Cap Index | 12.56 | 4.75 | -2.98 | 11.24 | 9.81 | |||||||||||||||
MSCI EAFE® Index | 13.75 | 2.12 | -5.24 | 8.20 | 5.49 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. See page 113 for a description of each index.
10
INVESTING ENVIRONMENT
Over the past twelve-month period ended September 30, 2012, investors were presented with plenty of market-moving headlines. As the eurozone crisis continued, government actions took center stage. Policy promises and stimulus measures spurred pro-cyclical rallies while ongoing concerns about slow growth worked to pare back some of those gains. Despite the prevalent macroeconomic concerns, stocks moved ahead.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 26.9 | % | 23.6 | % | ||||
Consumer Staples | 12.8 | 25.1 | ||||||
Energy | 0.0 | 0.7 | ||||||
Financials | 2.9 | 2.2 | ||||||
Healthcare | 5.0 | 6.2 | ||||||
Industrials | 26.2 | 20.1 | ||||||
Information Technology | 8.5 | 10.2 | ||||||
Materials | 4.1 | 3.0 | ||||||
Utilities | 5.2 | 6.9 | ||||||
Other assets less liabilities | 8.4 | 2.0 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan International Small Cap Fund returned 26.77%, outperforming the MSCI EAFE® Small Cap and MSCI EAFE® indices, which returned 12.56% and 13.75%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: German Internet payment services provider Wirecard AG; U.K.-based public sector support service company Babcock International Group plc; Philippines-based food, beverage and real estate company Alliance Global Group, Inc.; British media company Aegis Group plc; and Luxembourg-based laboratory analysis company Eurofins Scientific.
Notable detractors included: Chinese department store operator Parkson Retail Group Ltd.; U.K.-based power generation company APR Energy plc; Hong Kong-based industrial gas manufacturer Yingde Gases Group Company Limited; Hong Kong-based cigarette package manufacturer AMVIG Holdings Ltd; and Austrian airport operator Flughafen Wien AG.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Europe | 52.7 | % | 58.6 | % | ||||
Emerging Markets | 22.0 | 21.3 | ||||||
Pacific Basin | 16.9 | 16.9 | ||||||
Americas | 0.0 | 1.2 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period including Ireland-based nutritional products company Glanbia plc; U.K.-based soft drink supplier Britvic Plc; Luxembourg-based cosmetics and well-being products enterprise L’Occitane International SA; Japanese snack food company CALBEE, Inc; and Japanese drug store chain operator SUGI HOLDINGS CO., LTD. We funded these purchases in part by selling our positions in Royal Imtech N.V., Flughafen Wien AG, Globaltrans Investment PLC, Smurfit Kappa Group plc and Bank Sarasin & Co. Ltd.
11
ARTISAN INTERNATIONAL VALUE FUND (ARTKX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan International Value Fund employs a fundamental investment process to construct a diversified portfolio of stocks of undervalued non-U.S. companies of all sizes. The Fund’s investment process focuses on identifying what the investment team considers to be high-quality, undervalued businesses that offer the potential for superior risk/reward outcomes. The team’s in-depth research process focuses on four key investment characteristics:
Undervaluation. Determining the intrinsic value of the business is the heart of the team’s research process. The team believes that intrinsic value represents the amount that a buyer would pay to own a company’s future cash flows. The team seeks to invest at a significant discount to its estimate of the intrinsic value of a business.
Business Quality. The team seeks to invest in companies with histories of generating strong free cash flow, improving returns on capital and strong competitive positions in their industries.
Financial Strength. The team believes that investing in companies with strong balance sheets helps to reduce the potential for capital risk and provides company management the ability to build value when attractive opportunities are available.
Shareholder-Oriented Management. The team’s research process attempts to identify management teams with a history of building value for shareholders.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (9/23/2002 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan International Value Fund | 22.94 | % | 9.22 | % | 2.80 | % | 14.39 | % | 14.27 | % | ||||||||||
MSCI EAFE® Value Index | 12.59 | -0.11 | -6.33 | 8.49 | 8.44 | |||||||||||||||
MSCI EAFE® Index | 13.75 | 2.12 | -5.24 | 8.20 | 8.22 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. See page 113 for a description of each index.
12
INVESTING ENVIRONMENT
International equity markets experienced more of the same volatility that they have been experiencing for the past few years. The euro crisis continued during the year ended September 30, 2012 and most economic data suggested a sluggish, slowing global economy. Despite all of the macro negativity, stocks moved ahead and posted a double-digit gain for the year ended September 30, 2012. Investor sentiment received a boost as central banks around the world continued to pour liquidity into global markets. Meanwhile, earnings reports showed that many companies were weathering the slow growth economic environment.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 23.4 | % | 20.2 | % | ||||
Consumer Staples | 14.9 | 15.4 | ||||||
Energy | 2.6 | 2.5 | ||||||
Financials | 21.7 | 19.7 | ||||||
Healthcare | 7.9 | 8.3 | ||||||
Industrials | 15.6 | 14.5 | ||||||
Information Technology | 7.0 | 6.4 | ||||||
Materials | 2.5 | 2.2 | ||||||
Other assets less liabilities | 4.4 | 10.8 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan International Value Fund returned 22.94%, outperforming the MSCI EAFE® and MSCI EAFE® Value indices, which returned 13.75% and 12.59%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Compass Group PLC, a catering company; Qinetiq Group PLC, a defense technology company; Signet Jewelers Ltd., a jewelry retailer; Diageo plc, a maker of alcoholic beverages; HeidelbergCement AG, an aggregates and cement producer.
Notable detractors included: SANKYO CO., LTD., a pachinko machine manufacturer; Societe Television Francaise 1, a French television channel operator; Daiwa Securities Group Inc., a financial services provider; Mitsubishi UFJ Financial Group, Inc., a financial and investment services provider; and SEINO HOLDINGS CO., LTD., a provider of transportation and logistics solutions.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Europe | 61.9 | % | 59.4 | % | ||||
Americas | 17.0 | 18.7 | ||||||
Pacific Basin | 16.2 | 11.1 | ||||||
Emerging Markets | 0.5 | 0.0 |
FUND CHANGES
We identified some new investment opportunities for the portfolio during the period, including insurance services holding company Aon PLC; food retailer Tesco plc; branded consumer goods manufacturer Orkla ASA; banking machines and cash registers manufacturer Wincor Nixdorf AG; and coffee and tea company DE Master Blenders 1753 NV. We funded these purchases in part by selling our positions in Mitsubishi UFJ Financial Group, Inc., Nestle SA, Daiwa Securities Group Inc., Lancashire Holdings Ltd and BAE Systems plc.
13
INVESTMENT PROCESS HIGHLIGHTS
Artisan Mid Cap Fund employs a fundamental investment process to construct a diversified portfolio of U.S. mid-cap growth companies. The Fund’s investment process focuses on two distinct areas – security selection and capital allocation.
The Fund’s investment team attempts to identify companies that possess franchise characteristics that are selling at attractive valuations and benefiting from an accelerating profit cycle.
Franchise Characteristics. These are characteristics that the team believes help to protect a company’s stream of cash flow from the effects of competition. The team looks for companies with at least two of the following characteristics: low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name.
Attractive Valuations. Through its own fundamental research, the team estimates the amount a private market buyer would pay to buy the entire company (the company’s “intrinsic value” or “private market value”) and considers whether to purchase a stock if it sells at a discount to that estimate.
Accelerating Profit Cycle. The team tries to invest in companies that are well positioned for long-term growth, at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.
Based on the investment team’s fundamental analysis of a company’s profit cycle, portfolio holdings develop through three stages. GardenSM investments are small positions in the early part of their profit cycle that will warrant a more sizeable allocation once their profit cycle accelerates. CropSM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycle. HarvestSM investments are positions that are being reduced as they near the team’s estimate of full valuation or their profit cycle begins to decelerate.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (6/27/1997 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan Mid Cap Fund | 24.63 | % | 16.92 | % | 4.89 | % | 11.66 | % | 13.65 | % | ||||||||||
Russell Midcap® Growth Index | 26.69 | 14.73 | 2.54 | 11.11 | 6.61 | |||||||||||||||
Russell Midcap® Index | 28.03 | 14.26 | 2.24 | 11.18 | 8.35 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 113 for a description of each index.
14
INVESTING ENVIRONMENT
In the one-year period ended September 30, 2012, mid-cap stocks, as represented by the Russell Midcap® and Midcap® Growth indices, posted a positive return. Healthy corporate profitability and continued, albeit slow, economic progress from the lows following the 2008 financial crisis were positive influences on market returns. Conversely, concerns related to high sovereign debt levels in developed regions, particularly in Europe, created market volatility and fueled uncertainty regarding the sustainability of the economic recovery. Signs of economic activity leveling out in several major emerging markets countries also added to concerns.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 19.6 | % | 19.5 | % | ||||
Consumer Staples | 2.6 | 1.2 | ||||||
Energy | 7.3 | 7.7 | ||||||
Financials | 5.1 | 5.3 | ||||||
Healthcare | 22.5 | 23.7 | ||||||
Industrials | 12.6 | 13.0 | ||||||
Information Technology | 25.9 | 25.3 | ||||||
Other assets less liabilities | 4.4 | 4.3 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Mid Cap Fund returned 24.63%, underperforming the Russell Midcap® and Russell Midcap® Growth indices, which returned 28.03% and 26.69%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Regeneron Pharmaceuticals, Inc., a biopharmaceutical company; Discover Financial Services, a diversified financial services company; AMERIGROUP Corporation, a managed care company; athenahealth, Inc., an internet-based business services provider in the health care industry; and Cameron International Corporation, an equipment provider to the oil and gas industry.
Notable detractors included: Diamond Foods, Inc., a packaged food company; Ctrip.com International, Ltd., an online/call-center travel agency provider; Universal Display Corporation, a provider of display technologies; VeriFone Systems, Inc., an electronic payment services company; and Green Mountain Coffee Roasters, Inc., a company in the specialty coffee industry.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Cigna Corporation, a health services company; LinkedIn Corporation, a professional services networking website provider; Rockwell Automation, Inc., an industrial automation control company; ARIAD Pharmaceuticals, Inc., a developer of treatments for cancer; and DaVita Inc., a dialysis services provider. We funded these purchases in part by selling our positions in Broadcom Corporation, Gardner Denver, Inc., Cooper Industries plc, Juniper Networks, Inc. and Ctrip.com International, Ltd.
15
ARTISAN MID CAP VALUE FUND (ARTQX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan Mid Cap Value Fund employs a fundamental investment process to construct a diversified portfolio of stocks of medium-sized U.S. companies that the investment team believes are undervalued, in solid financial condition and have attractive business economics. The team believes companies with these characteristics are less likely to experience eroding values over the long term.
Attractive Valuation. The team values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that the team believes would be reasonable. The team generally will purchase a security if the stock price falls below or toward the lower end of that range.
Sound Financial Condition. The team favors companies with an acceptable level of debt and positive cash flow. At a minimum, the team tries to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interests of the companies’ shareholders.
Attractive Business Economics. The team favors cash-producing businesses that it believes are capable of earning acceptable returns on capital over the company’s business cycle.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (3/28/2001 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan Mid Cap Value Fund | 21.35 | % | 11.80 | % | 4.47 | % | 12.87 | % | 10.43 | % | ||||||||||
Russell Midcap® Value Index | 29.28 | 13.86 | 1.73 | 10.96 | 8.55 | |||||||||||||||
Russell Midcap® Index | 28.03 | 14.26 | 2.24 | 11.18 | 7.85 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 113 for a description of each index.
16
INVESTING ENVIRONMENT
After a tumultuous third quarter of 2011, when fiscal strains in the U.S. and Europe weighed on risk assets, stocks rebounded sharply to begin the one-year period ended September 30, 2012. Despite softening economic growth in Europe and Asia and a tepid economic recovery in the U.S., stocks continued to move higher during the period in response to corporate earnings growth and actions taken by central banks around the world to ease monetary conditions.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 7.3 | % | 7.9 | % | ||||
Consumer Staples | 5.5 | 3.4 | ||||||
Energy | 7.1 | 11.5 | ||||||
Financials | 21.8 | 20.1 | ||||||
Healthcare | 3.2 | 4.5 | ||||||
Industrials | 18.9 | 18.0 | ||||||
Information Technology | 25.0 | 25.7 | ||||||
Utilities | 7.9 | 1.9 | ||||||
Other assets less liabilities | 3.3 | 7.0 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Mid Cap Value Fund returned 21.35%, underperforming the Russell Midcap® and Russell Midcap® Value indices, which returned 28.03% and 29.28%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: The Allstate Corporation, a property and casualty insurer; Hubbell Inc., an electrical and electronic products manufacturer; Mohawk Industries, Inc., a flooring manufacturer; Flowserve Corporation, a manufacturer of industrial flow management products; and Equifax Inc., a credit information provider.
Notable detractors included: Lam Research Corporation, a semiconductor equipment company; FLIR Systems, Inc., a thermal imaging systems provider; Lexmark International, Inc., a printer vendor; Towers Watson & Co., a global consulting firm; and Patterson-UTI Energy, Inc., an onshore driller.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including previously mentioned Lam Research Corporation, in addition to McDermott International, Inc., a provider of services to the oil and gas industry; Hess Corporation, an integrated oil and gas company; Becton, Dickinson and Company, a medical devices company; and Autodesk, Inc., a design and engineering software provider. We funded these purchases in part by selling our positions in Total System Services, Inc., Equifax Inc., W.R. Berkley Corporation, Campbell Soup Company, and Xcel Energy Inc.
17
ARTISAN SMALL CAP FUND (ARTSX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan Small Cap Fund employs a fundamental investment process to construct a diversified portfolio of primarily U.S. small-cap growth companies. The Fund’s investment process focuses on two distinct areas – security selection and capital allocation.
The Fund’s investment team attempts to identify companies that possess franchise characteristics that are selling at attractive valuations and benefiting from an accelerating profit cycle.
Franchise Characteristics. These are characteristics that the team believes help to protect a company’s stream of cash flow from the effects of competition. The team looks for companies with at least two of the following characteristics: low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name.
Attractive Valuations. Through its own fundamental research, the team estimates the amount a private market buyer would pay to buy the entire company (the company’s “intrinsic value” or “private market value”) and considers whether to purchase a stock if it sells at a discount to that estimate.
Accelerating Profit Cycle. The team tries to invest in companies that are well positioned for long-term growth, at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.
Based on the investment team’s fundamental analysis of a company’s profit cycle, portfolio holdings develop through three stages. GardenSM investments are small positions in the early part of their profit cycle that will warrant a more sizeable allocation once their profit cycle accelerates. CropSM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycle. HarvestSM investments are positions that are being reduced as they near the team’s estimate of full valuation or their profit cycle begins to decelerate.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (3/28/1995 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan Small Cap Fund | 30.54 | % | 17.51 | % | 3.19 | % | 10.84 | % | 7.92 | % | ||||||||||
Russell 2000® Growth Index | 31.18 | 14.19 | 2.96 | 10.55 | 6.07 | |||||||||||||||
Russell 2000® Index | 31.91 | 12.99 | 2.21 | 10.17 | 8.34 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 113 for a description of each index.
18
INVESTING ENVIRONMENT
In the one-year period ended September 30, 2012, small-cap stocks, as represented by the Russell 2000® and Russell 2000® Growth indices, posted positive returns. Healthy corporate profitability and continued, albeit slow, economic progress from the lows following the 2008 financial crisis were positive influences on market returns. Conversely, concerns related to high sovereign debt levels in developed regions, particularly in Europe, created market volatility and fueled uncertainty regarding the sustainability of the economic recovery. Signs of economic activity leveling out in several major emerging markets countries also added to concerns.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 17.7 | % | 14.3 | % | ||||
Consumer Staples | 5.0 | 3.9 | ||||||
Energy | 4.0 | 4.9 | ||||||
Financials | 4.4 | 2.5 | ||||||
Healthcare | 23.5 | 19.5 | ||||||
Industrials | 18.9 | 19.3 | ||||||
Information Technology | 22.4 | 30.4 | ||||||
Utilities | 0.3 | 0.0 | ||||||
Other assets less liabilities | 3.8 | 5.2 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Small Cap Fund returned 30.54%, underperforming the Russell 2000® and Russell 2000® Growth indices, which returned 31.91% and 31.18%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Regeneron Pharmaceuticals, Inc., a biopharmaceutical company; AMERIGROUP Corporation, a managed care company; Acuity Brands, Inc., a manufacturer of lighting equipment; LKQ Corporation, an auto parts supplier; and Beacon Roofing Supply, Inc., a roofing materials distributor.
Notable detractors included: Accretive Health, Inc., a provider of health care revenue cycle management services; Diamond Foods, Inc., a packaged food company; Universal Display Corporation, a provider of display technologies; Vera Bradley, Inc., a fashion accessories designer; and RPX Corporation, a patent risk management services provider.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including The Advisory Board Company, a provider of best practice analysis tools and services for the health care and education industries; IPG Photonics Corporation, a manufacturer of fiber lasers; ARIAD Pharmaceuticals, Inc., a biopharmaceutical company that develops cancer treatments; Guidewire Software, Inc., a provider of software to the insurance industry; and Acadia HealthCare Company, Inc., a provider of behavioral health care services. We funded these purchases in part by selling our positions in Hexcel Corporation, Regeneron Pharmaceuticals, Inc., Masimo Corporation, Thomas & Betts Corporation and ANSYS, Inc.
19
ARTISAN SMALL CAP VALUE FUND (ARTVX)
INVESTMENT PROCESS HIGHLIGHTS
Artisan Small Cap Value Fund employs a fundamental investment process to construct a diversified portfolio of small-cap U.S. companies that the team believes are undervalued, in solid financial condition and have attractive business economics. The team believes companies with these characteristics are less likely to experience eroding values over the long term.
Attractive Valuation. The team values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that the team believes would be reasonable. The team generally will purchase a security if the stock price falls below or toward the lower end of that range.
Sound Financial Condition. The team favors companies with an acceptable level of debt and positive cash flow. At a minimum, the team tries to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interest of the companies’ shareholders.
Attractive Business Economics. The team favors cash-producing businesses that it believes are capable of earning acceptable returns on capital over the company’s business cycle.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (9/29/1997 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan Small Cap Value Fund | 16.54 | % | 7.19 | % | 3.12 | % | 10.97 | % | 9.54 | % | ||||||||||
Russell 2000® Value Index | 32.63 | 11.72 | 1.35 | 9.68 | 7.12 | |||||||||||||||
Russell 2000® Index | 31.91 | 12.99 | 2.21 | 10.17 | 5.56 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 113 for a description of each index.
20
INVESTING ENVIRONMENT
After a tumultuous third quarter of 2011, when fiscal strains in the U.S. and Europe weighed on risk assets, stocks rebounded sharply to begin the one-year period ended September 30, 2012. Despite softening economic growth in Europe and Asia and a tepid economic recovery in the U.S., stocks continued to move higher during the period in response to corporate earnings growth and actions taken by central banks around the world to ease monetary conditions.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 12.1 | % | 14.5 | % | ||||
Consumer Staples | 1.5 | 0.7 | ||||||
Energy | 10.4 | 13.8 | ||||||
Financials | 8.9 | 6.2 | ||||||
Healthcare | 2.4 | 2.7 | ||||||
Industrials | 27.6 | 26.2 | ||||||
Information Technology | 23.9 | 24.5 | ||||||
Materials | 5.9 | 5.9 | ||||||
Telecommunication Services | 1.5 | 1.6 | ||||||
Utilities | 4.3 | 0.0 | ||||||
Other assets less liabilities | 1.5 | 3.9 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Small Cap Value Fund returned 16.54%, underperforming the Russell 2000® and Russell 2000® Value indices, which returned 31.91% and 32.63%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: H.B. Fuller Company, a producer of adhesives and sealants; Ultratech, Inc., a semiconductor equipment manufacturer; EMCOR Group, Inc., a construction services firm; Rent-A-Center, Inc., a rent-to-own retailer; and Meredith Corporation, a media company.
Notable detractors included: ADTRAN, Inc., a networking and communications equipment provider; FTI Consulting, Inc., a provider of restructuring and bankruptcy services; Lone Pine Resources Inc., an oil and gas producer; Schnitzer Steel Industries, Inc., a scrap metal processor; and WMS Industries Inc., a gaming device maker.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including previously mentioned ADTRAN, Inc.; Unit Corporation, a contract land driller and oil and gas producer; previously mentioned WMS Industries Inc.; and energy services companies Newpark Resources, Inc. and Key Energy Services, Inc. We funded these purchases in part by selling our positions in Cleco Corporation, Portland General Electric Company, Manhattan Associates, Inc., Cal-Maine Foods, Inc., and ALLETE, Inc.
21
INVESTMENT PROCESS HIGHLIGHTS
Artisan Value Fund employs a fundamental investment process to construct a diversified portfolio of equity securities across a broad capitalization range that the team believes are undervalued, in solid financial condition and have attractive business economics. The team believes companies with these characteristics are less likely to experience eroding values over the long term.
Attractive Valuation. The team values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that the team believes would be reasonable. The team generally will purchase a security if the stock price falls below or toward the lower end of that range.
Sound Financial Condition. The team favors companies with an acceptable level of debt and positive cash flow. At a minimum, the team tries to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interest of the companies’ shareholders.
Attractive Business Economics. The team favors cash-producing businesses that it believes are capable of earning acceptable returns on capital over the company’s business cycle.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (3/27/2006 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | Since Inception | ||||||||||||
Artisan Value Fund | 25.42 | % | 12.53 | % | 1.05 | % | 4.13 | % | ||||||||
Russell 1000® Value Index | 30.92 | 11.84 | -0.90 | 2.33 | ||||||||||||
Russell 1000® Index | 30.06 | 13.27 | 1.22 | 3.86 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information, visit www.artisanfunds.com or call 800.344.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 113 for a description of each index.
22
INVESTING ENVIRONMENT
After a tumultuous third quarter of 2011, when fiscal strains in the U.S. and Europe weighed on risk assets, stocks rebounded sharply to begin the one-year period ended September 30, 2012. Despite softening economic growth in Europe and Asia and a tepid economic recovery in the U.S., stocks continued to move higher during the period in response to corporate earnings growth and actions taken by central banks around the world to ease monetary conditions.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 9.1 | % | 3.8 | % | ||||
Consumer Staples | 10.3 | 4.7 | ||||||
Energy | 10.8 | 14.3 | ||||||
Financials | 27.4 | 23.4 | ||||||
Healthcare | 2.9 | 6.4 | ||||||
Industrials | 2.6 | 2.6 | ||||||
Information Technology | 34.4 | 29.2 | ||||||
Materials | 0.0 | 3.9 | ||||||
Telecommunication Services | 0.0 | 3.1 | ||||||
Other assets less liabilities | 2.5 | 8.6 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Value Fund returned 25.42%, underperforming the Russell 1000® and Russell 1000® Value indices, which returned 30.06% and 30.92%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Apple Inc., a consumer electronics company; Microsoft Corporation, a software maker; Berkshire Hathaway Inc., a holding company; Cisco Systems, Inc., a provider of networking solutions; and The Allstate Corporation, a property and casualty insurer.
Notable detractors included: Chesapeake Energy Corporation, an oil and gas exploration and production company; Baker Hughes Incorporated, an oilfield services company; Tesco plc, a food retailer; WellPoint, Inc., a health benefits company; and Ingram Micro Inc., a distributor of information technology products.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 91.8 | % | 80.6 | % | ||||
Emerging Markets | — | 7.0 | ||||||
Europe | 5.7 | 3.8 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Samsung Electronics Co., Ltd., a diversified electronics manufacturer, previously mentioned Baker Hughes Incorporated; Vodafone Group Plc, a global wireless carrier; Oracle Corporation, an enterprise software company; and The Kroger Co., a food retailer. We funded these purchases in part by selling our positions in Wal-Mart Stores, Inc., Carnival Corporation, Total System Services, Inc., Aflac Incorporated, and Unilever PLC.
23
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 97.3% | ||||||||
BELGIUM - 1.7% | ||||||||
Anheuser-Busch InBev NV | 3,106 | $ | 264 | |||||
CANADA - 1.3% | ||||||||
Canadian Pacific Railway Limited | 2,481 | 206 | ||||||
CHINA - 1.0% | ||||||||
Sun Art Retail Group Ltd. | 128,500 | 160 | ||||||
DENMARK - 1.2% | ||||||||
Novo Nordisk A/S, Class B | 1,185 | 187 | ||||||
FRANCE - 5.6% | ||||||||
Christian Dior SA | 1,241 | 167 | ||||||
Eurofins Scientific | 1,705 | 242 | ||||||
Gemalto NV | 1,827 | 161 | ||||||
Pernod Ricard SA | 2,639 | 296 | ||||||
|
| |||||||
866 | ||||||||
GERMANY - 8.0% | ||||||||
Brenntag AG | 1,251 | 160 | ||||||
Henkel AG & Co. KGaA, Preferred(1) | 1,931 | 154 | ||||||
Linde AG | 3,938 | 678 | ||||||
Wirecard AG | 10,603 | 243 | ||||||
|
| |||||||
1,235 | ||||||||
HONG KONG - 4.4% | ||||||||
AIA Group Ltd. | 101,195 | 375 | ||||||
Samsonite International SA | 78,266 | 150 | ||||||
Sands China Ltd. | 43,600 | 163 | ||||||
|
| |||||||
688 | ||||||||
INDIA - 1.8% | ||||||||
Housing Development Finance Corporation Ltd. | 19,113 | 279 | ||||||
INDONESIA - 0.9% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 183,000 | 142 | ||||||
IRELAND - 1.6% | ||||||||
Glanbia plc | 27,846 | 247 | ||||||
JAPAN - 9.5% | ||||||||
CALBEE, Inc. | 5,200 | 456 | ||||||
JAPAN TOBACCO INC. | 15,000 | 450 | ||||||
Kao Corporation | 5,464 | 161 | ||||||
JAPAN (CONTINUED) | ||||||||
LAWSON, INC. | 2,900 | $ | 223 | |||||
SOFTBANK Corp | 4,600 | 186 | ||||||
|
| |||||||
1,476 | ||||||||
KOREA - 1.3% | ||||||||
Samsung Electronics Co., Ltd., Preferred(1) | 285 | 202 | ||||||
LUXEMBOURG - 1.0% | ||||||||
L’Occitane International SA | 57,750 | 153 | ||||||
NETHERLANDS - 3.0% | ||||||||
Akzo Nobel N.V. | 3,955 | 224 | ||||||
Unilever NV (DR) | 6,865 | 243 | ||||||
|
| |||||||
467 | ||||||||
PHILIPPINES - 1.3% | ||||||||
Alliance Global Group, Inc. | 579,330 | 204 | ||||||
SWITZERLAND - 5.7% | ||||||||
Nestle SA | 7,981 | 503 | ||||||
Sonova Holding AG | 2,110 | 213 | ||||||
Swatch Group AG - Bearer Shares | 414 | 165 | ||||||
|
| |||||||
881 | ||||||||
UNITED KINGDOM - 9.3% | ||||||||
Experian PLC | 11,519 | 191 | ||||||
HSBC Holdings plc | 27,264 | 252 | ||||||
Prudential plc | 17,532 | 227 | ||||||
Rotork plc | 4,207 | 154 | ||||||
SABMiller plc | 6,912 | 304 | ||||||
Standard Chartered plc | 7,184 | 162 | ||||||
WPP plc | 10,988 | 149 | ||||||
|
| |||||||
1,439 | ||||||||
UNITED STATES - 38.7% | ||||||||
3M Company | 1,749 | 162 | ||||||
Accenture plc, Class A | 2,479 | 174 | ||||||
Allergan, Inc. | 1,939 | 178 | ||||||
American Express Company | 4,234 | 241 | ||||||
Anadarko Petroleum Corporation | 3,874 | 271 | ||||||
Apple Inc. | 512 | 342 | ||||||
BE Aerospace, Inc.(2) | �� | 4,936 | 208 | |||||
CME Group Inc., Class A | 3,020 | 173 | ||||||
Coach, Inc. | 4,047 | 227 | ||||||
The Coca-Cola Company | 3,438 | 130 | ||||||
Colgate-Palmolive Company | 1,989 | 213 | ||||||
Comcast Corporation, Class A | 6,542 | 234 |
24
Shares Held | Value | |||||||
UNITED STATES (CONTINUED) | ||||||||
Danaher Corporation | 3,553 | $ | 196 | |||||
Dresser-Rand Group Inc.(2) | 4,105 | 226 | ||||||
eBay Inc.(2) | 3,409 | 165 | ||||||
EMC Corporation(2) | 8,666 | 236 | ||||||
Google Inc., Class A(2) | 630 | 475 | ||||||
Liberty Global, Inc., Series A(2) | 3,353 | 204 | ||||||
MasterCard Incorporated, Class A | 778 | 351 | ||||||
Mead Johnson Nutrition Company | 2,705 | 198 | ||||||
Monsanto Company | 1,670 | 152 | ||||||
Precision Castparts Corp. | 1,347 | 220 | ||||||
Schlumberger Limited | 3,793 | 274 | ||||||
Thermo Fisher Scientific Inc. | 3,028 | 178 | ||||||
United Technologies Corporation | 2,104 | 165 | ||||||
The Walt Disney Company | 3,746 | 196 | ||||||
YUM! Brands, Inc. | 3,426 | 227 | ||||||
|
| |||||||
6,016 | ||||||||
|
| |||||||
Total common and preferred stocks | 15,112 | |||||||
Par Amount | ||||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 2.1% | ||||||||
Repurchase agreement with Fixed Income | $ | 333 | $ | 333 | ||||
|
| |||||||
Total investments - 99.4% | 15,445 | |||||||
Other assets less liabilities - 0.6% | 93 | |||||||
|
| |||||||
Total net assets - 100.0%(4) | $ | 15,538 | ||||||
|
|
(1) | Non-voting shares. |
(2) | Non-income producing security. |
(3) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.000 | % | 3/31/2017 | $ | 344 |
(4) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 2,035 | 13.1 | % | ||||
Consumer Staples | 4,002 | 25.8 | ||||||
Energy | 771 | 5.0 | ||||||
Financials | 1,851 | 11.9 | ||||||
Healthcare | 998 | 6.4 | ||||||
Industrials | 1,866 | 12.0 | ||||||
Information Technology | 2,349 | 15.1 | ||||||
Materials | 1,054 | 6.8 | ||||||
Telecommunication Services | 186 | 1.2 | ||||||
|
|
|
| |||||
Total common and preferred stocks | 15,112 | 97.3 | ||||||
Short-term investments | 333 | 2.1 | ||||||
|
|
|
| |||||
Total investments | 15,445 | 99.4 | ||||||
Other assets less liabilities | 93 | 0.6 | ||||||
|
|
|
| |||||
Total net assets | $ | 15,538 | 100.0 | % | ||||
|
|
|
|
CURRENCY EXPOSURE - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
British pound | $ | 1,439 | 9.3 | % | ||||
Danish krone | 187 | 1.2 | ||||||
Euro | 3,079 | 19.9 | ||||||
Hong Kong dollar | 1,001 | 6.5 | ||||||
Indian rupee | 279 | 1.8 | ||||||
Indonesian rupiah | 142 | 0.9 | ||||||
Japanese yen | 1,476 | 9.6 | ||||||
Korean won | 202 | 1.3 | ||||||
Philippine peso | 204 | 1.3 | ||||||
Swiss franc | 881 | 5.7 | ||||||
U.S. dollar | 6,555 | 42.5 | ||||||
|
|
|
| |||||
Total investments | $ | 15,445 | 100.0 | % | ||||
|
|
|
|
25
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Linde AG | Germany | 4.4 | % | |||
Nestle SA | Switzerland | 3.2 | ||||
Google Inc. | United States | 3.1 | ||||
CALBEE, Inc. | Japan | 2.9 | ||||
JAPAN TOBACCO INC. | Japan | 2.9 | ||||
AIA Group Ltd. | Hong Kong | 2.4 | ||||
MasterCard Incorporated | United States | 2.3 | ||||
Apple Inc. | United States | 2.2 | ||||
SABMiller PLC | United Kingdom | 2.0 | ||||
Pernod Ricard SA | France | 1.9 | ||||
|
| |||||
Total | 27.3 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
26
ARTISAN GLOBAL OPPORTUNITIES FUND
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 95.4% | ||||||||
AUSTRALIA - 1.1% | ||||||||
James Hardie Industries SE | 390,676 | $ | 3,526 | |||||
BRAZIL - 9.1% | ||||||||
Anhanguera Educacional Participacoes SA | 451,496 | 7,505 | ||||||
BR Malls Participacoes | 212,600 | 2,952 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 183,117 | 2,647 | ||||||
OdontoPrev SA | 1,148,050 | 6,428 | ||||||
Qualicorp SA(1) | 514,031 | 5,020 | ||||||
Raia Drogasil S.A. | 336,800 | 3,869 | ||||||
|
| |||||||
28,421 | ||||||||
CANADA - 1.7% | ||||||||
Tourmaline Oil Corp.(1) | 173,028 | 5,401 | ||||||
CHINA - 2.5% | ||||||||
Baidu, Inc., Class A (DR)(1) | 29,740 | 3,474 | ||||||
Shandong Weigao Group Medical Polymer Company Limited, H Shares | 1,526,545 | 1,977 | ||||||
Tsingtao Brewery Company Limited, H Shares | 450,514 | 2,484 | ||||||
|
| |||||||
7,935 | ||||||||
FRANCE - 3.4% | ||||||||
Ingenico | 74,334 | 3,821 | ||||||
Sanofi | 79,580 | 6,785 | ||||||
|
| |||||||
10,606 | ||||||||
GERMANY - 2.3% | ||||||||
Linde AG | 9,200 | 1,584 | ||||||
SAP AG (DR) | 76,566 | 5,461 | ||||||
|
| |||||||
7,045 | ||||||||
HONG KONG - 0.8% | ||||||||
Hong Kong Exchanges & Clearing Limited | 174,882 | 2,641 | ||||||
INDIA - 2.1% | ||||||||
HDFC Bank Limited (DR) | 127,061 | 4,775 | ||||||
Jubilant Foodworks Limited(1) | 67,961 | 1,763 | ||||||
|
| |||||||
6,538 | ||||||||
INDONESIA - 0.7% | ||||||||
PT Bank Central Asia Tbk | 2,714,342 | 2,241 | ||||||
JAPAN - 2.3% | ||||||||
FANUC CORP. | 34,379 | 5,542 | ||||||
Rakuten, Inc. | 153,800 | 1,567 | ||||||
|
| |||||||
7,109 | ||||||||
SWEDEN - 4.0% | ||||||||
Hexagon AB, Class B | 578,482 | $ | 12,400 | |||||
SWITZERLAND - 1.1% | ||||||||
Compagnie Financiere Richemont SA - Bearer Shares | 55,028 | 3,300 | ||||||
UNITED KINGDOM - 6.1% | ||||||||
ARM Holdings PLC | 773,336 | 7,180 | ||||||
Intertek Group plc | 52,078 | 2,304 | ||||||
Rotork plc | 197,823 | 7,229 | ||||||
Standard Chartered plc | 99,731 | 2,255 | ||||||
|
| |||||||
18,968 | ||||||||
UNITED STATES - 58.2% | ||||||||
Agilent Technologies, Inc. | 159,139 | 6,119 | ||||||
Amazon.com, Inc.(1) | 18,700 | 4,756 | ||||||
Apple Inc. | 22,578 | 15,065 | ||||||
Biogen Idec Inc.(1) | 69,192 | 10,326 | ||||||
Cerner Corporation(1) | 71,977 | 5,572 | ||||||
Citrix Systems, Inc.(1) | 51,841 | 3,969 | ||||||
Discover Financial Services | 305,285 | 12,129 | ||||||
eBay Inc.(1) | 300,693 | 14,557 | ||||||
EMC Corporation(1) | 428,188 | 11,677 | ||||||
Facebook Inc., Class A(1) | 149,013 | 3,226 | ||||||
Google Inc., Class A(1) | 24,612 | 18,570 | ||||||
IHS Inc.(1) | 122,657 | 11,941 | ||||||
Monsanto Company | 177,566 | 16,162 | ||||||
National Oilwell Varco, Inc. | 98,386 | 7,882 | ||||||
Occidental Petroleum Corporation | 75,869 | 6,529 | ||||||
Polo Ralph Lauren Corporation, Class A | 38,934 | 5,888 | ||||||
Precision Castparts Corp. | 22,837 | 3,730 | ||||||
Regeneron Pharmaceuticals, Inc.(1) | 88,461 | 13,504 | ||||||
salesforce.com, inc.(1) | 35,957 | 5,490 | ||||||
Starbucks Corporation | 93,290 | 4,734 | ||||||
|
| |||||||
181,826 | ||||||||
|
| |||||||
Total common stocks | 297,957 |
27
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.9% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $15,330 (Cost $15,330)(2) | $ | 15,330 | $ | 15,330 | ||||
|
| |||||||
Total investments - 100.3% | 313,287 | |||||||
Other assets less liabilities - (0.3%) | (1,014 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(3) | $ | 312,273 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | $ | 15,640 |
(3) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company’s legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
FOREIGN CURRENCY FORWARD CONTRACTS - September 30, 2012 | ||||||||||||||||||||
Dollar values in thousands |
| |||||||||||||||||||
Description | Counterparty | Transaction | Settlement Date | Cost on Origination Date | Value | Unrealized Depreciation | ||||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 2,373 | $ | 2,394 | $ | (21 | ) | ||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 3 | $ | 3 | - | (1) | |||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 258 | $ | 260 | $ | (2 | ) | ||||||||||
|
| |||||||||||||||||||
$ | (23 | ) | ||||||||||||||||||
|
|
(1) | Amount rounds to less than $1. |
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands | ||||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 29,513 | 9.5 | % | ||||
Consumer Staples | 6,353 | 2.0 | ||||||
Energy | 19,812 | 6.3 | ||||||
Financials | 26,993 | 8.6 | ||||||
Healthcare | 55,731 | 17.9 | ||||||
Industrials | 33,393 | 10.7 | ||||||
Information Technology | 104,890 | 33.6 | ||||||
Materials | 21,272 | 6.8 | ||||||
|
|
|
| |||||
Total common stocks | 297,957 | 95.4 | ||||||
Short-term investments | 15,330 | 4.9 | ||||||
|
|
|
| |||||
Total investments | 313,287 | 100.3 | ||||||
Other assets less liabilities | (1,014 | ) | (0.3 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 312,273 | 100.0 | % | ||||
|
|
|
|
CURRENCY EXPOSURE (1) - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Australian dollar | $ | 3,526 | 1.1 | % | ||||
Brazilian real | 28,421 | 9.1 | ||||||
British pound | 18,968 | 6.0 | ||||||
Canadian dollar | 5,401 | 1.7 | ||||||
Euro | 12,190 | 3.9 | ||||||
Hong Kong dollar | 7,102 | 2.3 | ||||||
Indian rupee | 1,763 | 0.6 | ||||||
Indonesian rupiah | 2,241 | 0.7 | ||||||
Japanese yen | 7,109 | 2.3 | ||||||
Swedish krona | 12,400 | 4.0 | ||||||
Swiss franc | 3,300 | 1.0 | ||||||
U.S. dollar | 210,866 | 67.3 | ||||||
|
|
|
| |||||
Total investments | $ | 313,287 | 100.0 | % | ||||
|
|
|
|
(1) | Excludes currency exposure to foreign currency forward contracts. |
28
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Google Inc. | United States | 5.9 | % | |||
Monsanto Company | United States | 5.2 | ||||
Apple Inc. | United States | 4.8 | ||||
eBay Inc. | United States | 4.7 | ||||
Regeneron Pharmaceuticals, Inc. | United States | 4.3 | ||||
Hexagon AB | Sweden | 4.0 | ||||
Discover Financial Services | United States | 3.9 | ||||
IHS Inc. | United States | 3.8 | ||||
EMC Corporation | United States | 3.7 | ||||
Biogen Idec Inc. | United States | 3.3 | ||||
|
| |||||
Total | 43.6 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
29
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS AND EQUITY-LINKED SECURITIES - 78.1% | ||||||||
BELGIUM - 1.6% | ||||||||
Groupe Bruxelles Lambert S.A. | 56,374 | $ | 4,184 | |||||
FRANCE - 3.4% | ||||||||
Publicis Groupe | 65,654 | 3,674 | ||||||
Total SA | 109,829 | 5,448 | ||||||
|
| |||||||
9,122 | ||||||||
GERMANY - 1.2% | ||||||||
HeidelbergCement AG | 60,821 | 3,186 | ||||||
HONG KONG - 0.2% | ||||||||
Guoco Group Limited | 48,647 | 438 | ||||||
IRELAND - 0.7% | ||||||||
Ryanair Holdings PLC, Equity-Linked Security, 144A(1)(2)(3)(4)(5) | 350,396 | 1,990 | ||||||
JAPAN - 3.2% | ||||||||
Credit Saison Co., Ltd. | 92,800 | 2,244 | ||||||
Kao Corporation | 145,200 | 4,279 | ||||||
SANKYO CO., LTD. | 30,357 | 1,414 | ||||||
Stanley Electric Co., Ltd. | 41,700 | 618 | ||||||
|
| |||||||
8,555 | ||||||||
NETHERLANDS - 1.5% | ||||||||
DE Master Blenders 1753 NV(2) | 113,304 | 1,365 | ||||||
ING Groep N.V.(2) | 345,625 | 2,731 | ||||||
|
| |||||||
4,096 | ||||||||
NORWAY - 1.2% | ||||||||
Orkla ASA | 408,621 | 3,103 | ||||||
SWITZERLAND - 4.3% | ||||||||
Adecco SA | 87,969 | 4,187 | ||||||
Novartis AG | 105,959 | 6,484 | ||||||
Pargesa Holding SA - Bearer Shares | 10,203 | 676 | ||||||
|
| |||||||
11,347 | ||||||||
UNITED KINGDOM - 13.2% | ||||||||
Compass Group PLC | 926,191 | 10,222 | ||||||
Diageo plc | 250,024 | 7,023 | ||||||
Experian PLC | 133,913 | 2,225 | ||||||
Lloyds Banking Group plc(2) | 5,532,509 | 3,469 | ||||||
Tesco plc | 1,079,358 | 5,787 |
Shares Held | Value | |||||||
UNITED KINGDOM (CONTINUED) | ||||||||
Unilever PLC (DR) | 173,695 | $ | 6,343 | |||||
|
| |||||||
35,069 | ||||||||
UNITED STATES - 47.6% | ||||||||
3M Company | 74,140 | 6,852 | ||||||
Accenture plc, Class A | 35,884 | 2,513 | ||||||
American Express Company | 94,015 | 5,346 | ||||||
Aon Corporation | 152,598 | 7,979 | ||||||
Arch Capital Group Ltd.(2)(6) | 186,146 | 7,759 | ||||||
The Bank of New York Mellon Corporation | 329,660 | 7,457 | ||||||
Becton, Dickinson and Company | 32,456 | 2,550 | ||||||
The Chubb Corporation | 61,717 | 4,708 | ||||||
Cisco Systems, Inc. | 201,697 | 3,850 | ||||||
CVS Caremark Corporation | 26,740 | 1,295 | ||||||
Fidelity National Financial, Inc. | 178,821 | 3,825 | ||||||
Google Inc., Class A(2) | 13,094 | 9,879 | ||||||
Hasbro, Inc. | 88,670 | 3,385 | ||||||
Johnson & Johnson | 101,132 | 6,969 | ||||||
Marsh & McLennan Companies, Inc. | 198,654 | 6,740 | ||||||
MasterCard Incorporated, Class A | 16,263 | 7,342 | ||||||
Mohawk Industries, Inc.(2) | 18,937 | 1,515 | ||||||
Oracle Corporation | 260,269 | 8,196 | ||||||
The Progressive Corporation | 192,690 | 3,996 | ||||||
Signet Jewelers Ltd. | 103,467 | 5,045 | ||||||
Target Corporation | 100,481 | 6,378 | ||||||
TE Connectivity Ltd. | 239,074 | 8,131 | ||||||
Wal-Mart Stores, Inc. | 65,700 | 4,849 | ||||||
|
| |||||||
126,559 | ||||||||
|
| |||||||
Total common stocks and equity-linked securities | 207,649 |
30
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 8.1% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $21,478 (Cost $21,478)(7) | $ | 21,478 | $ | 21,478 | ||||
|
| |||||||
Total investments - 86.2% | 229,127 | |||||||
Other assets less liabilities - 13.8% | 36,779 | |||||||
|
| |||||||
Total net assets - 100.0%(8) | $ | 265,906 | ||||||
|
|
(1) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Partners Funds, Inc. (“Artisan Funds”). In total, securities valued at a fair value were $1,990 or 0.7% of total net assets. See notes 2(a) and 2(b) in Notes to Financial Statements for additional information. |
(2) | Non-income producing security. |
(3) | Non-voting shares. |
(4) | Security is an equity-linked participation certificate issued by HSBC Bank plc. As described in Note 2(h) in Notes to Financial Statements, equity-linked participation certificates are subject to counterparty risk with respect to the bank or broker-dealer that issues them. |
(5) | Security is restricted. Ryanair Holdings PLC was acquired in a transaction under Rule 144A of the Securities Act of 1933, as amended. The shares of Ryanair Holdings PLC may be resold in transactions exempt from registration to qualified institutional buyers. |
Security | Acquisition Dates | Cost | Value | Percentage of Total Net Assets | ||||||||||||
Ryanair Holdings PLC | | 8/26/09- 9/25/12 | | $ | 1,407 | $ | 1,990 | 0.7 | % |
(6) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(7) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | $ | 21,908 |
(8) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
FOREIGN CURRENCY FORWARD CONTRACTS - September 30, 2012 |
| |||||||||||||||||||
Dollar values in thousands |
| |||||||||||||||||||
Description | Counterparty | Trans- | Settlement Date | Cost on Origination Date | Value | Unrealized Depreciation | ||||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 6,609 | $ | 6,669 | $ | (60 | ) | ||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | 433 | 436 | (3 | ) | |||||||||||||
|
| |||||||||||||||||||
$ | (63 | ) | ||||||||||||||||||
|
|
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 32,251 | 12.1 | % | ||||
Consumer Staples | 30,941 | 11.6 | ||||||
Energy | 5,448 | 2.1 | ||||||
Financials | 61,552 | 23.2 | ||||||
Healthcare | 16,003 | 6.0 | ||||||
Industrials | 18,357 | 6.9 | ||||||
Information Technology | 39,911 | 15.0 | ||||||
Materials | 3,186 | 1.2 | ||||||
|
|
|
| |||||
Total common stocks | 207,649 | 78.1 | ||||||
Short-term investments | 21,478 | 8.1 | ||||||
|
|
|
| |||||
Total investments | 229,127 | 86.2 | ||||||
Other assets less liabilities | 36,779 | 13.8 | ||||||
|
|
|
| |||||
Total net assets | $ | 265,906 | 100.0 | % | ||||
|
|
|
|
CURRENCY EXPOSURE(1) - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
British pound | $ | 28,726 | 12.5 | % | ||||
Euro | 22,578 | 9.9 | ||||||
Hong Kong dollar | 438 | 0.2 | ||||||
Japanese yen | 8,555 | 3.7 | ||||||
Norwegian krone | 3,103 | 1.4 | ||||||
Swiss franc | 11,347 | 4.9 | ||||||
U.S. dollar | 154,380 | 67.4 | ||||||
|
|
|
| |||||
Total investments | $ | 229,127 | 100.0 | % | ||||
|
|
|
|
(1) | Excludes currency exposure to foreign currency forward contracts. |
31
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Compass Group PLC | United Kingdom | 3.8 | % | |||
Google Inc. | United States | 3.7 | ||||
Oracle Corporation | United States | 3.1 | ||||
TE Connectivity Ltd | United States | 3.1 | ||||
Aon Corporation | United States | 3.0 | ||||
Arch Capital Group Ltd. | United States | 2.9 | ||||
The Bank of New York Mellon Corporation | United States | 2.8 | ||||
MasterCard Incorporated | United States | 2.8 | ||||
Diageo plc | United Kingdom | 2.6 | ||||
Johnson & Johnson | United States | 2.6 | ||||
|
| |||||
Total | 30.4 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
32
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 98.2% | ||||||||
AUSTRALIA - 0.3% | ||||||||
Coca-Cola Amatil Limited | 1,634,754 | $ | 22,994 | |||||
Westfield Group | 887,177 | 9,350 | ||||||
|
| |||||||
32,344 | ||||||||
BELGIUM - 4.3% | ||||||||
Anheuser-Busch InBev NV | 4,067,342 | 345,853 | ||||||
Telenet Group Holding NV | 315,123 | 14,112 | ||||||
UCB SA | 994,298 | 54,674 | ||||||
|
| |||||||
414,639 | ||||||||
BRAZIL - 0.6% | ||||||||
Arcos Dorados Holdings, Inc., Class A | 3,726,141 | 57,494 | ||||||
CANADA - 3.8% | ||||||||
Canadian Pacific Railway Limited | 4,465,116 | 370,113 | ||||||
CHINA - 8.4% | ||||||||
Baidu, Inc., Class A (DR)(1) | 2,770,675 | 323,670 | ||||||
China Construction Bank Corporation, H Shares | 128,701,605 | 89,297 | ||||||
China Mobile Limited | 14,686,931 | 163,271 | ||||||
China Resources Land Limited | 47,216,759 | 104,005 | ||||||
Tencent Holdings Limited | 3,677,129 | 125,668 | ||||||
|
| |||||||
805,911 | ||||||||
FRANCE - 8.5% | ||||||||
Air Liquide SA | 549,420 | 68,097 | ||||||
DANONE S.A. | 410,753 | 25,289 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 380,447 | 57,201 | ||||||
Pernod Ricard SA | 1,810,178 | 203,098 | ||||||
Schneider Electric SA | 2,856,655 | 169,065 | ||||||
Technip SA | 256,930 | 28,563 | ||||||
Unibail-Rodamco | 910,135 | 181,400 | ||||||
Zodiac Aerospace | 848,134 | 82,810 | ||||||
|
| |||||||
815,523 | ||||||||
GERMANY - 15.1% | ||||||||
Bayer AG | 1,308,776 | 112,398 | ||||||
Beiersdorf AG | 2,147,306 | 157,561 | ||||||
Brenntag AG | 1,302,119 | 166,659 | ||||||
Daimler AG | 256,208 | 12,401 | ||||||
Deutsche Post AG | 5,666,036 | 110,673 | ||||||
Henkel AG & Co. KGaA, Preferred(2) | 2,001,140 | 159,154 | ||||||
Kabel Deutschland Holding AG(1) | 997,309 | 71,141 | ||||||
GERMANY (CONTINUED) | ||||||||
Linde AG | 2,497,155 | $ | 430,002 | |||||
Muenchener Rueckversicherungs-Gesellschaft AG | 1,534,571 | 239,598 | ||||||
|
| |||||||
1,459,587 | ||||||||
HONG KONG - 11.9% | ||||||||
AIA Group Ltd. | 80,257,961 | 297,576 | ||||||
BOC Hong Kong (Holdings) Limited | 21,263,441 | 67,596 | ||||||
Hang Seng Bank Limited | 8,035,637 | 123,218 | ||||||
Henderson Land Development Company Limited | 4,612,700 | 33,075 | ||||||
Hongkong Land Holdings Limited | 10,417,259 | 62,608 | ||||||
Sands China Ltd. | 44,799,593 | 166,972 | ||||||
Sino Land Company Limited | 48,443,112 | 90,588 | ||||||
Sun Hung Kai Properties Limited | 11,322,670 | 165,882 | ||||||
Wynn Macau Limited | 52,269,171 | 141,559 | ||||||
|
| |||||||
1,149,074 | ||||||||
INDIA - 0.4% | ||||||||
Coal India Limited | 5,872,718 | 39,983 | ||||||
INDONESIA - 0.1% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 9,831,500 | 7,654 | ||||||
IRELAND - 0.4% | ||||||||
CRH plc | 1,895,548 | 36,538 | ||||||
ITALY - 0.9% | ||||||||
Fiat Industrial SpA | 9,003,118 | 87,986 | ||||||
JAPAN - 11.9% | ||||||||
BRIDGESTONE CORPORATION | 2,995,009 | 69,464 | ||||||
HONDA MOTOR CO., LTD. | 7,837,483 | 240,728 | ||||||
JAPAN TOBACCO INC. | 14,619,863 | 438,746 | ||||||
Kao Corporation | 5,241,862 | 154,488 | ||||||
NGK INSULATORS, LTD.(3) | 10,518,793 | 119,725 | ||||||
Rakuten, Inc. | 2,992,400 | 30,484 | ||||||
SOFTBANK Corp | 2,319,600 | 93,925 | ||||||
|
| |||||||
1,147,560 | ||||||||
KOREA - 0.9% | ||||||||
Samsung Electronics Co., Ltd. | 69,683 | 84,390 | ||||||
MEXICO - 0.2% | ||||||||
America Movil SAB de C.V., Series L (DR) | 629,589 | 16,017 |
33
Shares Held | Value | |||||||
NETHERLANDS - 5.8% | ||||||||
Akzo Nobel N.V. | 1,739,190 | $ | 98,315 | |||||
Koninklijke Vopak NV | 1,292,617 | 90,761 | ||||||
Unilever NV (DR) | 9,497,484 | 335,996 | ||||||
Ziggo NV | 995,795 | 33,853 | ||||||
|
| |||||||
558,925 | ||||||||
NIGERIA - 0.4% | ||||||||
Nigerian Breweries Plc. | 38,762,232 | 33,781 | ||||||
SINGAPORE - 0.7% | ||||||||
City Developments Limited | 3,453,769 | 33,040 | ||||||
Genting Singapore PLC | 30,169,455 | 33,680 | ||||||
|
| |||||||
66,720 | ||||||||
SPAIN - 0.7% | ||||||||
Grifols S.A.(1) | 2,163,058 | 71,437 | ||||||
SWITZERLAND - 6.4% | ||||||||
Actelion Ltd. | 300,163 | 15,026 | ||||||
Givaudan SA | 67,373 | 63,935 | ||||||
Nestle SA | 5,395,560 | 340,199 | ||||||
Roche Holding AG - Genussscheine(2) | 568,368 | 106,180 | ||||||
Swatch Group AG - Bearer Shares | 223,287 | 89,077 | ||||||
|
| |||||||
614,417 | ||||||||
UNITED KINGDOM - 11.3% | ||||||||
Diageo plc | 1,850,276 | 51,973 | ||||||
HSBC Holdings plc | 21,819,010 | 201,993 | ||||||
Imperial Tobacco Group plc | 5,923,988 | 219,254 | ||||||
InterContinental Hotels Group PLC | 365,818 | 9,570 | ||||||
Johnson Matthey PLC | 1,822,539 | 71,015 | ||||||
Kingfisher plc | 3,786,003 | 16,152 | ||||||
Land Securities Group plc | 2,103,865 | 25,871 | ||||||
Meggitt plc | 7,842,527 | 50,011 | ||||||
Prudential plc | 3,256,719 | 42,150 | ||||||
Reckitt Benckiser Group PLC | 108,756 | 6,261 | ||||||
SABMiller plc | 4,913,012 | 215,792 | ||||||
Vodafone Group PLC | 11,870,605 | 33,689 | ||||||
William Morrison Supermarkets plc | 7,940,605 | 36,570 | ||||||
WPP plc | 8,375,327 | 113,808 | ||||||
|
| |||||||
1,094,109 | ||||||||
UNITED STATES - 5.2% | ||||||||
Covidien plc | 4,002,238 | 237,813 | ||||||
Liberty Global, Inc., Series A(1) | 982,774 | 59,704 | ||||||
Schlumberger Limited | 2,474,461 | 178,978 | ||||||
Virgin Media Inc. | 1,022,334 | 30,098 | ||||||
|
| |||||||
506,593 | ||||||||
|
| |||||||
Total common and preferred stocks | 9,470,795 |
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 1.1% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $108,556 (Cost $108,556)(4) | $ | 108,556 | $ | 108,556 | ||||
|
| |||||||
Total investments - 99.3% | 9,579,351 | |||||||
Other assets less liabilities - 0.7% | 70,939 | |||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 9,650,290 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Non-voting shares. |
(3) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $119,725 or 1.2% of total net assets. See notes 2(a) and 2(b) in Notes to Financial Statements for additional information. |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | 110,728 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 1,199,533 | 12.4 | % | ||||
Consumer Staples | 2,747,009 | 28.5 | ||||||
Energy | 247,524 | 2.6 | ||||||
Financials | 1,774,901 | 18.4 | ||||||
Healthcare | 597,528 | 6.2 | ||||||
Industrials | 1,247,803 | 12.9 | ||||||
Information Technology | 533,728 | 5.5 | ||||||
Materials | 767,902 | 8.0 | ||||||
Telecommunication Services | 354,867 | 3.7 | ||||||
|
|
|
| |||||
Total common and preferred stocks | 9,470,795 | 98.2 | ||||||
Short-term investments | 108,556 | 1.1 | ||||||
|
|
|
| |||||
Total investments | 9,579,351 | 99.3 | ||||||
Other assets less liabilities | 70,939 | 0.7 | ||||||
|
|
|
| |||||
Total net assets | $ | 9,650,290 | 100.0 | % | ||||
|
|
|
|
34
CURRENCY EXPOSURE - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Australian dollar | $ | 32,344 | 0.3 | % | ||||
British pound | 1,094,109 | 11.4 | ||||||
Euro | 3,444,635 | 36.0 | ||||||
Hong Kong dollar | 1,568,707 | 16.4 | ||||||
Indian rupee | 39,983 | 0.4 | ||||||
Indonesian rupiah | 7,654 | 0.1 | ||||||
Japanese yen | 1,147,560 | 12.0 | ||||||
Korean won | 84,390 | 0.9 | ||||||
Nigerian naira | 33,781 | 0.3 | ||||||
Singapore dollar | 66,720 | 0.7 | ||||||
Swiss franc | 614,417 | 6.4 | ||||||
U.S. dollar | 1,445,051 | 15.1 | ||||||
|
|
|
| |||||
Total investments | $ | 9,579,351 | 100.0 | % | ||||
|
|
|
|
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
JAPAN TOBACCO INC. | Japan | 4.5 | % | |||
Linde AG | Germany | 4.5 | ||||
Canadian Pacific Railway Limited | Canada | 3.8 | ||||
Anheuser-Busch InBev NV | Belgium | 3.6 | ||||
Nestle SA | Switzerland | 3.5 | ||||
Unilever NV | Netherlands | 3.5 | ||||
Baidu, Inc. | China | 3.4 | ||||
AIA Group Ltd. | Hong Kong | 3.1 | ||||
HONDA MOTOR CO., LTD. | Japan | 2.5 | ||||
Muenchener Rueckversicherungs-Gesellschaft AG | Germany | 2.5 | ||||
|
| |||||
Total | 34.9 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The Fund owns HSBC Holdings PLC (HSBC), which represents 2.1% of the Fund’s net assets, and Hang Seng Bank Ltd (Hang Seng), which represents 1.3% of the Fund’s net assets. HSBC is the parent company of Hang Seng. The aggregate value of HSBC and Hang Seng represents 3.4% of the Fund’s net assets and would represent one of the Fund’s top ten holdings.
The accompanying notes are an integral part of the financial statements.
35
ARTISAN INTERNATIONAL SMALL CAP FUND
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 98.0% | ||||||||
AUSTRALIA - 0.9% | ||||||||
Domino’s Pizza Enterprises Limited | 573,039 | $ | 6,194 | |||||
BRAZIL - 3.7% | ||||||||
M Dias Branco SA | 484,100 | 15,856 | ||||||
Raia Drogasil S.A. | 931,400 | 10,700 | ||||||
|
| |||||||
26,556 | ||||||||
CANADA - 1.2% | ||||||||
CAE, Inc. | 324,598 | 3,477 | ||||||
Poseidon Concepts Corp. | 328,861 | 4,887 | ||||||
|
| |||||||
8,364 | ||||||||
CHINA - 9.4% | ||||||||
AMVIG Holdings Ltd | 11,944,000 | 3,558 | ||||||
Beijing Enterprises Water Group Limited | 31,194,000 | 7,483 | ||||||
China Everbright International Limited | 6,181,700 | 3,269 | ||||||
Golden Eagle Retail Group Ltd. | 1,444,000 | 2,838 | ||||||
Intime Department Store Group Company Limited | 16,902,300 | 18,289 | ||||||
New World Department Store China | 7,951,000 | 4,420 | ||||||
Parkson Retail Group Ltd. | 11,445,500 | 9,594 | ||||||
Yingde Gases | 20,279,500 | 17,967 | ||||||
|
| |||||||
67,418 | ||||||||
DENMARK - 0.8% | ||||||||
Royal Unibrew A/S | 70,860 | 5,435 | ||||||
FRANCE - 11.9% | ||||||||
Eurofins Scientific | 187,850 | 26,650 | ||||||
Gemalto NV | 122,179 | 10,747 | ||||||
Ipsos | 602,215 | 19,262 | ||||||
Rubis | 485,738 | 28,529 | ||||||
|
| |||||||
85,188 | ||||||||
GERMANY - 17.7% | ||||||||
Deutz AG(1) | 384,806 | 1,730 | ||||||
Gerresheimer AG | 334,409 | 17,477 | ||||||
GfK SE | 576,166 | 25,962 | ||||||
Sixt AG | 389,573 | 7,539 | ||||||
Wacker Neuson SE | 1,030,405 | 14,552 | ||||||
Wirecard AG | 2,597,199 | 59,642 | ||||||
|
| |||||||
126,902 | ||||||||
HONG KONG - 2.7% | ||||||||
SJM Holdings Limited | 8,740,932 | 18,983 | ||||||
INDONESIA - 0.2% | ||||||||
Ace Hardware Indonesia | 2,143,000 | $ | 1,377 | |||||
IRELAND - 3.3% | ||||||||
Glanbia plc | 2,679,451 | 23,758 | ||||||
ITALY - 5.8% | ||||||||
Davide Campari - Milano S.p.A. | 3,776,604 | 29,701 | ||||||
Marr SpA | 1,207,387 | 11,613 | ||||||
|
| |||||||
41,314 | ||||||||
JAPAN - 7.2% | ||||||||
AUTOBACS SEVEN CO., LTD. | 448,600 | 20,320 | ||||||
Bit-isle Inc. | 234,300 | 2,438 | ||||||
CALBEE, Inc. | 171,000 | 14,988 | ||||||
SUGI HOLDINGS CO., LTD. | 403,400 | 14,169 | ||||||
|
| |||||||
51,915 | ||||||||
KENYA - 0.6% | ||||||||
East African Breweries Limited | 1,665,800 | 4,492 | ||||||
KOREA - 1.1% | ||||||||
GS Retail Company Ltd. | 147,550 | 4,009 | ||||||
S1 Corporation | 61,417 | 3,780 | ||||||
|
| |||||||
7,789 | ||||||||
LUXEMBOURG - 2.9% | ||||||||
L’Occitane International SA | 7,922,250 | 20,945 | ||||||
PERU - 1.1% | ||||||||
Ferreyros S.A. | 8,577,014 | 7,760 | ||||||
PHILIPPINES - 5.2% | ||||||||
Alliance Global Group, Inc. | 106,376,800 | 37,486 | ||||||
SINGAPORE - 6.1% | ||||||||
City Developments Limited | 666,972 | 6,381 | ||||||
Petra Foods Limited | 6,121,000 | 12,220 | ||||||
SIA Engineering Company | 4,077,700 | 13,823 | ||||||
Super Group Ltd. | 6,166,000 | 11,004 | ||||||
|
| |||||||
43,428 | ||||||||
SPAIN - 0.1% | ||||||||
Pescanova, S.A. | 43,670 | 724 | ||||||
SWITZERLAND - 1.9% | ||||||||
Schindler Holding AG, Participation Certificates(2) | 112,266 | 13,799 |
36
Shares Held | Value | |||||||
UNITED KINGDOM - 14.2% | ||||||||
Aegis Group plc | 3,643,324 | $ | 13,855 | |||||
APR Energy PLC | 991,453 | 13,376 | ||||||
Babcock International Group plc | 2,456,332 | 36,769 | ||||||
Big Yellow Group PLC | 1,587,420 | 8,049 | ||||||
Britvic Plc | 3,617,078 | 21,267 | ||||||
Catlin Group Limited | 230,336 | 1,769 | ||||||
Dignity PLC | 469,252 | 6,915 | ||||||
|
| |||||||
102,000 | ||||||||
|
| |||||||
Total common stocks | 701,827 | |||||||
Par Amount | ||||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 1.7% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $11,784 | $ | 11,784 | $ | 11,784 | ||||
|
| |||||||
Total investments - 99.7% | 713,611 | |||||||
Other assets less liabilities - 0.3% | 2,438 | |||||||
|
| |||||||
Total net assets - 100.0%(4) | $ | 716,049 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Non-voting shares. |
(3) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | $ | 12,021 |
(4) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 168,954 | 23.6 | % | ||||
Consumer Staples | 179,936 | 25.1 | ||||||
Energy | 4,887 | 0.7 | ||||||
Financials | 16,199 | 2.2 | ||||||
Healthcare | 44,127 | 6.2 | ||||||
Industrials | 143,984 | 20.1 | ||||||
Information Technology | 72,827 | 10.2 | ||||||
Materials | 21,525 | 3.0 | ||||||
Utilities | 49,388 | 6.9 | ||||||
|
|
|
| |||||
Total common stocks | 701,827 | 98.0 | ||||||
Short-term investments | 11,784 | 1.7 | ||||||
|
|
|
| |||||
Total investments | 713,611 | 99.7 | ||||||
Other assets less liabilities | 2,438 | 0.3 | ||||||
|
|
|
| |||||
Total net assets | $ | 716,049 | 100.0 | % | ||||
|
|
|
|
CURRENCY EXPOSURE - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Australian dollar | $ | 6,194 | 0.9 | % | ||||
Brazilian real | 26,556 | 3.7 | ||||||
British pound | 102,000 | 14.3 | ||||||
Canadian dollar | 8,364 | 1.2 | ||||||
Danish krone | 5,435 | 0.8 | ||||||
Euro | 277,886 | 38.9 | ||||||
Hong Kong dollar | 107,346 | 15.0 | ||||||
Indonesian rupiah | 1,377 | 0.2 | ||||||
Japanese yen | 51,915 | 7.3 | ||||||
Kenya shilling | 4,492 | 0.6 | ||||||
Korean won | 7,789 | 1.1 | ||||||
Peruvian nuevo sol | 7,760 | 1.1 | ||||||
Philippine peso | 37,486 | 5.3 | ||||||
Singapore dollar | 43,428 | 6.1 | ||||||
Swiss franc | 13,799 | 1.9 | ||||||
U.S. dollar | 11,784 | 1.6 | ||||||
|
|
|
| |||||
Total investments | $ | 713,611 | 100.0 | % | ||||
|
|
|
|
37
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Wirecard AG | Germany | 8.3 | % | |||
Alliance Global Group, Inc. | Philippines | 5.2 | ||||
Babcock International Group plc | United Kingdom | 5.1 | ||||
Davide Campari - Milano S.p.A. | Italy | 4.1 | ||||
Rubis | France | 4.0 | ||||
Eurofins Scientific | France | 3.7 | ||||
GfK SE | Germany | 3.6 | ||||
Glanbia plc | Ireland | 3.3 | ||||
Britvic Plc | United Kingdom | 3.0 | ||||
L’Occitane International SA | Luxembourg | 2.9 | ||||
|
| |||||
Total | 43.2 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
38
ARTISAN INTERNATIONAL VALUE FUND
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS AND EQUITY-LINKED SECURITIES - 89.2% | ||||||||
BELGIUM - 1.9% | ||||||||
Groupe Bruxelles Lambert S.A. | 1,733,021 | $ | 128,610 | |||||
DENMARK - 1.8% | ||||||||
Carlsberg A/S, Class B | 1,309,272 | 115,999 | ||||||
FRANCE - 7.0% | ||||||||
Publicis Groupe | 1,876,166 | 104,998 | ||||||
Societe Television Francaise 1 | 3,773,751 | 31,420 | ||||||
Sodexo | 925,245 | 69,663 | ||||||
Sodexo - Registered Shares(1) | 1,284,779 | 96,732 | ||||||
Total SA | 3,275,914 | 162,495 | ||||||
|
| |||||||
465,308 | ||||||||
GERMANY - 2.9% | ||||||||
HeidelbergCement AG | 2,715,857 | 142,288 | ||||||
Wincor Nixdorf AG | 1,339,464 | 52,378 | ||||||
|
| |||||||
194,666 | ||||||||
HONG KONG - 1.0% | ||||||||
Guoco Group Limited | 7,545,736 | 67,925 | ||||||
IRELAND - 3.5% | ||||||||
ICON PLC (DR)(3)(4) | 4,501,487 | 109,701 | ||||||
Ryanair Holdings PLC, Equity-Linked Security, 144A(2)(3)(5)(6)(7) | 21,926,013 | 124,510 | ||||||
|
| |||||||
234,211 | ||||||||
JAPAN - 10.1% | ||||||||
Aderans Co., Ltd.(3)(4) | 2,612,467 | 35,752 | ||||||
CALBEE, Inc. | 92,300 | 8,090 | ||||||
Credit Saison Co., Ltd. | 6,703,459 | 162,089 | ||||||
Kao Corporation | 7,492,400 | 220,816 | ||||||
NIFCO INC. | 1,434,400 | 33,140 | ||||||
SANKYO CO., LTD. | 1,717,792 | 80,012 | ||||||
SEINO HOLDINGS CO., LTD. | 1,247,240 | 7,911 | ||||||
Stanley Electric Co., Ltd. | 8,160,600 | 120,882 | ||||||
|
| |||||||
668,692 | ||||||||
NETHERLANDS - 6.7% | ||||||||
DE Master Blenders 1753 NV(3) | 2,136,281 | $ | 25,737 | |||||
ING Groep N.V.(3) | 21,485,062 | 169,770 | ||||||
Koninklijke Ahold NV | 8,761,696 | 109,744 | ||||||
Koninklijke Philips Electronics N.V. | 5,199,190 | 121,298 | ||||||
Reed Elsevier NV | 1,589,075 | 21,247 | ||||||
|
| |||||||
447,796 | ||||||||
NORWAY - 1.3% | ||||||||
Orkla ASA | 10,936,965 | 83,064 | ||||||
SWITZERLAND - 8.3% | ||||||||
Adecco SA | 2,158,802 | 102,741 | ||||||
Novartis AG | 3,532,867 | 216,179 | ||||||
Panalpina Welttransport Holding AG(4) | 1,471,407 | 140,570 | ||||||
Pargesa Holding SA - Bearer Shares | 1,344,272 | 89,046 | ||||||
|
| |||||||
548,536 | ||||||||
UNITED KINGDOM - 26.0% | ||||||||
Carpetright PLC(3) | 3,161,793 | 33,544 | ||||||
Compass Group PLC | 34,410,293 | 379,792 | ||||||
Diageo plc | 5,663,794 | 159,093 | ||||||
Experian PLC | 7,189,710 | 119,466 | ||||||
Lloyds Banking Group plc(3) | 198,579,204 | 124,514 | ||||||
Michael Page International plc | 13,071,936 | 75,104 | ||||||
Qinetiq Group PLC(4) | 61,299,386 | 187,579 | ||||||
Reed Elsevier PLC | 23,774,278 | 227,273 | ||||||
Savills Plc(4) | 10,727,785 | 69,068 | ||||||
Tesco plc | 27,720,631 | 148,614 | ||||||
Unilever PLC (DR) | 5,465,117 | 199,586 | ||||||
|
| |||||||
1,723,633 | ||||||||
UNITED STATES - 18.7% | ||||||||
Accenture plc, Class A | 1,463,744 | 102,506 | ||||||
Aon Corporation | 4,659,607 | 243,651 | ||||||
Arch Capital Group Ltd.(3)(4) | 6,040,912 | 251,785 | ||||||
Covidien plc | 3,804,192 | 226,045 | ||||||
Signet Jewelers Ltd. | 2,928,078 | 142,773 | ||||||
TE Connectivity Ltd. | 8,018,894 | 272,723 | ||||||
|
| |||||||
1,239,483 | ||||||||
|
| |||||||
Total common stocks and equity-linked securities | 5,917,923 |
39
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 11.4% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $758,286 | $ | 758,286 | $ | 758,286 | ||||
|
| |||||||
Total investments - 100.6% | 6,676,209 | |||||||
Other assets less liabilities - (0.6%) | (36,974 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(9) | $ | 6,639,235 | ||||||
|
|
(1) | Shares are registered with the issuing company and not tradable until converted back to bearer shares. |
(2) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $124,510 or 1.9% of total net assets. See notes 2(a) and 2(b) in Notes to Financial Statements for additional information. |
(3) | Non-income producing security. |
(4) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(5) | Non-voting shares. |
(6) | Security is an equity-linked participation certificate issued by HSBC Bank plc. As described in Note 2(h) in Notes to Financial Statements, equity-linked participation certificates are subject to counterparty risk with respect to the bank or broker-dealer that issues them. |
(7) | Security is restricted. Ryanair Holdings PLC was acquired in a transaction under Rule 144A of the Securities Act of 1933, as amended. The shares of Ryanair Holdings PLC may be resold in transactions exempt from registration to qualified institutional buyers. |
Security | Acquisition Dates | Cost | Value | Percentage of Total Net Assets | ||||||||||
Ryanair Holdings | 9/17/08- 9/27/12 | $ | 26,756 | $ | 124,510 | 1.9 | % |
(8) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 2.375 | % | 7/31/2017 | $ | 138,271 | |||||||
U.S. Treasury Note | 1.875 | % | 9/30/2017 | 149,800 | ||||||||
U.S. Treasury Note | 2.250 | % | 11/30/2017 | 81,671 | ||||||||
U.S. Treasury Note | 2.750 | % | 2/28/2018 | 120,015 | ||||||||
U.S. Treasury Note | 2.625 | % | 4/30/2018 | 84,687 | ||||||||
U.S. Treasury Note | 1.750 | % | 5/31/2016 | 199,011 | ||||||||
|
| |||||||||||
$ | 773,455 | |||||||||||
|
|
(9) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
FOREIGN CURRENCY FORWARD CONTRACTS - September 30, 2012 | ||||||||||||||||||||
Dollar values in thousands |
| |||||||||||||||||||
Description | Counterparty | Transaction | Settlement Date | Cost on Origination Date | Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 490,665 | $ | 495,110 | $ | (4,445 | ) | ||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | 22,182 | 22,558 | (376 | ) | |||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | 14,086 | 14,028 | 58 | ||||||||||||||
|
| |||||||||||||||||||
$ | (4,763 | ) | ||||||||||||||||||
|
|
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 1,341,476 | 20.2 | % | ||||
Consumer Staples | 1,023,431 | 15.4 | ||||||
Energy | 162,495 | 2.5 | ||||||
Financials | 1,306,458 | 19.7 | ||||||
Healthcare | 551,925 | 8.3 | ||||||
Industrials | 962,243 | 14.5 | ||||||
Information Technology | 427,607 | 6.4 | ||||||
Materials | 142,288 | 2.2 | ||||||
|
|
|
| |||||
Total common stocks | 5,917,923 | 89.2 | ||||||
Short-term investments | 758,286 | 11.4 | ||||||
|
|
|
| |||||
Total investments | 6,676,209 | 100.6 | ||||||
Other assets less liabilities | (36,974 | ) | (0.6 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 6,639,235 | 100.0 | % | ||||
|
|
|
|
40
CURRENCY EXPOSURE(1) - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
British pound | $ | 1,524,047 | 22.8 | % | ||||
Danish krone | 115,999 | 1.7 | ||||||
Euro | 1,360,890 | 20.4 | ||||||
Hong Kong dollar | 67,925 | 1.0 | ||||||
Japanese yen | 668,692 | 10.0 | ||||||
Norwegian krone | 83,064 | 1.3 | ||||||
Swiss franc | 548,536 | 8.2 | ||||||
U.S. dollar | 2,307,056 | 34.6 | ||||||
|
|
|
| |||||
Total investments | $ | 6,676,209 | 100.0 | % | ||||
|
|
|
|
(1) | Excludes currency exposure to foreign currency forward contracts. |
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Compass Group PLC | United Kingdom | 5.7 | % | |||
TE Connectivity Ltd | United States | 4.1 | ||||
Arch Capital Group Ltd. | United States | 3.8 | ||||
Aon Corporation | United States | 3.7 | ||||
Reed Elsevier PLC | United Kingdom | 3.4 | ||||
Covidien plc | United States | 3.4 | ||||
Kao Corporation | Japan | 3.3 | ||||
Novartis AG | Switzerland | 3.3 | ||||
Unilever PLC | United Kingdom | 3.0 | ||||
Qinetiq Group PLC | United Kingdom | 2.8 | ||||
|
| |||||
Total | 36.5 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The Fund owns Pargesa Holding SA (Pargesa), which represents 1.3% of the Fund’s net assets, and Groupe Bruxelles Lambert SA (GBL), which represents 1.9% of the Fund’s net assets. Pargesa is the parent company of GBL. The aggregate value of Pargesa and GBL represents 3.2% of the Fund’s net assets and would represent one of the Fund’s top ten holdings.
The accompanying notes are an integral part of the financial statements.
41
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 95.7% | ||||||||
CONSUMER DISCRETIONARY - 19.5% | ||||||||
Auto Components - 1.8% | ||||||||
BorgWarner Inc.(1) | 1,796,014 | $ | 124,122 | |||||
Automobiles - 0.7% | ||||||||
Tesla Motors, Inc.(1) | 1,684,085 | 49,310 | ||||||
Distributors - 1.9% | ||||||||
LKQ Corporation(1) | 6,817,740 | 126,128 | ||||||
Hotels, Restaurants & Leisure - 2.6% |
| |||||||
Chipotle Mexican Grill, Inc.(1) | 218,624 | 69,422 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 1,566,399 | 90,788 | ||||||
Wynn Resorts, Limited | 98,700 | 11,394 | ||||||
|
| |||||||
171,604 | ||||||||
Internet & Catalog Retail - 0.1% | ||||||||
Netflix, Inc.(1) | 178,667 | 9,727 | ||||||
Multiline Retail - 0.7% | ||||||||
Dollar General Corporation(1) | 976,000 | 50,303 | ||||||
Specialty Retail - 3.8% | ||||||||
Limited Brands, Inc. | 691,700 | 34,073 | ||||||
Tractor Supply Company | 1,067,800 | 105,595 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 1,000,800 | 96,382 | ||||||
Urban Outfitters, Inc.(1) | 443,000 | 16,639 | ||||||
|
| |||||||
252,689 | ||||||||
Textiles, Apparel & Luxury Goods - 7.9% | ||||||||
Coach, Inc. | 2,409,723 | 134,993 | ||||||
Fossil, Inc.(1) | 1,411,335 | 119,540 | ||||||
lululemon athletica inc.(1) | 1,133,616 | 83,820 | ||||||
Polo Ralph Lauren Corporation, Class A | 877,522 | 132,708 | ||||||
Under Armour, Inc., Class A(1) | 1,009,700 | 56,372 | ||||||
|
| |||||||
527,433 | ||||||||
CONSUMER STAPLES - 1.2% | ||||||||
Food Products - 1.2% | ||||||||
Mead Johnson Nutrition Company | 1,133,000 | 83,026 | ||||||
ENERGY - 7.7% | ||||||||
Energy Equipment & Services - 4.9% |
| |||||||
Cameron International Corporation(1) | 2,202,849 | $ | 123,514 | |||||
Core Laboratories N.V. | 285,910 | 34,732 | ||||||
Dresser-Rand Group Inc.(1) | 2,510,027 | 138,328 | ||||||
Oceaneering International, Inc. | 622,700 | 34,404 | ||||||
|
| |||||||
330,978 | ||||||||
Oil, Gas & Consumable Fuels - 2.8% |
| |||||||
Cabot Oil & Gas Corporation | 1,894,300 | 85,054 | ||||||
Noble Energy, Inc. | 1,139,300 | 105,624 | ||||||
|
| |||||||
190,678 | ||||||||
FINANCIALS - 5.3% | ||||||||
Capital Markets - 1.2% | ||||||||
Ares Capital Corporation | 4,700,109 | 80,560 | ||||||
Commercial Banks - 0.8% | ||||||||
HDFC Bank Limited (DR)(2) | 1,429,690 | 53,728 | ||||||
Consumer Finance - 3.3% | ||||||||
Discover Financial Services | 5,562,410 | 220,995 | ||||||
HEALTHCARE - 23.7% | ||||||||
Biotechnology - 9.4% | ||||||||
Alexion Pharmaceuticals, Inc.(1) | 819,400 | 93,739 | ||||||
ARIAD Pharmaceuticals, Inc.(1) | 3,282,400 | 79,516 | ||||||
Cepheid(1)(3) | 3,459,600 | 119,391 | ||||||
Incyte Corporation(1) | 2,091,682 | 37,755 | ||||||
Onyx Pharmaceuticals, Inc.(1) | 284,400 | 24,032 | ||||||
Regeneron Pharmaceuticals, Inc.(1) | 1,589,813 | 242,701 | ||||||
Vertex Pharmaceuticals Incorporated(1) | 576,300 | 32,244 | ||||||
|
| |||||||
629,378 | ||||||||
Health Care Equipment & Supplies - 1.4% | ||||||||
Edwards Lifesciences Corporation(1) | 362,581 | 38,930 | ||||||
Intuitive Surgical, Inc.(1) | 112,413 | 55,715 | ||||||
|
| |||||||
94,645 | ||||||||
Health Care Providers & Services - 3.0% | ||||||||
AMERIGROUP Corporation(1) | 336,500 | 30,766 | ||||||
Cigna Corporation | 2,064,600 | 97,387 | ||||||
DaVita, Inc.(1) | 693,500 | 71,854 | ||||||
|
| |||||||
200,007 |
42
Shares Held | Value | |||||||
HEALTHCARE (CONTINUED) | ||||||||
Health Care Technology - 5.1% | ||||||||
athenahealth, Inc.(1)(3) | 1,827,315 | $ | 167,693 | |||||
Cerner Corporation(1) | 2,248,524 | 174,058 | ||||||
|
| |||||||
341,751 | ||||||||
Life Sciences Tools & Services - 4.5% |
| |||||||
Agilent Technologies, Inc. | 3,716,915 | 142,915 | ||||||
Illumina, Inc.(1) | 739,400 | 35,639 | ||||||
Mettler-Toledo International Inc.(1) | 737,200 | 125,870 | ||||||
|
| |||||||
304,424 | ||||||||
Pharmaceuticals - 0.3% | ||||||||
Allergan, Inc. | 217,296 | 19,900 | ||||||
INDUSTRIALS - 13.0% | ||||||||
Aerospace & Defense - 1.3% | ||||||||
Precision Castparts Corp. | 527,196 | 86,112 | ||||||
Building Products - 1.0% | ||||||||
Owens Corning Inc.(1) | 1,941,600 | 64,966 | ||||||
Electrical Equipment - 2.4% | ||||||||
AMETEK, Inc. | 581,500 | 20,614 | ||||||
Rockwell Automation, Inc. | 1,264,400 | 87,939 | ||||||
Roper Industries, Inc. | 478,712 | 52,606 | ||||||
|
| |||||||
161,159 | ||||||||
Machinery - 2.8% | ||||||||
Chart Industries, Inc.(1) | 909,000 | 67,130 | ||||||
Pall Corporation | 1,058,900 | 67,230 | ||||||
Woodward, Inc. | 1,648,600 | 56,019 | ||||||
|
| |||||||
190,379 | ||||||||
Professional Services - 5.5% | ||||||||
IHS Inc.(1) | 2,352,017 | 228,969 | ||||||
Verisk Analytics, Inc., Class A(1) | 2,926,427 | 139,327 | ||||||
|
| |||||||
368,296 | ||||||||
INFORMATION TECHNOLOGY - 25.3% | ||||||||
Communications Equipment - 0.6% |
| |||||||
Aruba Networks, Inc.(1) | 1,147,000 | 25,790 | ||||||
Palo Alto Networks, Inc.(1) | 182,600 | 11,243 | ||||||
|
| |||||||
37,033 | ||||||||
Electronic Equipment & Instruments - 4.4% | ||||||||
FLIR Systems, Inc.(3) | 1,702,200 | 34,001 | ||||||
IPG Photonics Corporation(1) | 2,207,100 | 126,467 | ||||||
Trimble Navigation Limited(1) | 2,831,265 | 134,938 | ||||||
|
| |||||||
295,406 | ||||||||
Internet Software & Services - 2.3% |
| |||||||
LinkedIn Corporation, Class A(1) | 756,700 | 91,107 | ||||||
MercadoLibre, Inc. | 782,063 | 64,559 | ||||||
|
| |||||||
155,666 | ||||||||
INFORMATION TECHNOLOGY (CONTINUED) | ||||||||
IT Services - 2.7% | ||||||||
Teradata Corporation(1) | 1,764,804 | $ | 133,084 | |||||
VeriFone Systems, Inc.(1) | 1,755,800 | 48,899 | ||||||
|
| |||||||
181,983 | ||||||||
Semiconductors & Semiconductor Equipment - 4.2% | ||||||||
Altera Corporation | 2,616,900 | 88,935 | ||||||
Applied Materials, Inc. | 5,092,700 | 56,860 | ||||||
ARM Holdings PLC (DR)(2) | 4,822,325 | 134,929 | ||||||
|
| |||||||
280,724 | ||||||||
Software - 11.1% | ||||||||
ANSYS, Inc.(1) | 1,077,018 | 79,053 | ||||||
Citrix Systems, Inc.(1) | 1,192,118 | 91,280 | ||||||
Concur Technologies, Inc.(1) | 1,981,730 | 146,113 | ||||||
MICROS Systems, Inc.(1) | 1,036,200 | 50,898 | ||||||
Qlik Technologies Inc.(1) | 612,900 | 13,735 | ||||||
Red Hat, Inc.(1) | 1,708,141 | 97,262 | ||||||
salesforce.com, inc.(1) | 869,211 | 132,720 | ||||||
VMware, Inc., Class A(1) | 1,371,568 | 132,685 | ||||||
|
| |||||||
743,746 | ||||||||
|
| |||||||
Total common stocks (Cost $4,324,248) | 6,426,856 | |||||||
Par Amount | ||||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.6% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $309,376 (Cost $309,376)(4) | $ | 309,376 | $ | 309,376 | ||||
|
| |||||||
Total investments - 100.3% | 6,736,232 | |||||||
Other assets less liabilities - (0.3%) | (18,287 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 6,717,945 | ||||||
|
|
(1) | Non-income producing security. |
(2) | The Fund considers the company to be from outside of the United States. See the Fund’s Statement of Additional Information for information on how a particular country is assigned. |
Security | Country | Trading Currency | ||||
ARM Holdings PLC (DR) | United Kingdom | U.S. dollar | ||||
HDFC Bank Limited (DR) | India | U.S. dollar |
43
(3) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | $ | 21,351 | |||||||
U.S. Treasury Note | 2.750 | % | 2/15/2019 | 111,875 | ||||||||
U.S. Treasury Note | 1.500 | % | 3/31/2019 | 182,338 | ||||||||
|
| |||||||||||
$ | 315,564 | |||||||||||
|
|
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company’s legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Regeneron Pharmaceuticals, Inc. | United States | 3.6 | % | |||
IHS Inc. | United States | 3.4 | ||||
Discover Financial Services | United States | 3.3 | ||||
Cerner Corporation | United States | 2.6 | ||||
athenahealth, Inc. | United States | 2.5 | ||||
Concur Technologies, Inc. | United States | 2.2 | ||||
Agilent Technologies, Inc. | United States | 2.1 | ||||
Verisk Analytics, Inc., Class A | United States | 2.1 | ||||
Dresser-Rand Group Inc. | United States | 2.1 | ||||
Coach, Inc. | United States | 2.0 | ||||
|
| |||||
Total | 25.9 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
44
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 93.0% | ||||||||
CONSUMER DISCRETIONARY - 7.9% | ||||||||
Diversified Consumer Services - 2.1% |
| |||||||
H&R Block, Inc. | 9,540,861 | $ | 165,343 | |||||
Household Durables - 1.1% | ||||||||
Mohawk Industries, Inc.(1) | 1,076,537 | 86,145 | ||||||
Internet & Catalog Retail - 0.6% | ||||||||
Liberty Interactive Corporation, Series A(1) | 2,668,152 | 49,361 | ||||||
Leisure Equipment & Products - 2.2% |
| |||||||
Mattel, Inc. | 5,059,370 | 179,506 | ||||||
Media - 1.9% | ||||||||
Omnicom Group Inc. | 3,042,495 | 156,871 | ||||||
CONSUMER STAPLES - 3.4% | ||||||||
Food & Staples Retailing - 3.4% | ||||||||
The Kroger Co. | 8,156,628 | 192,007 | ||||||
Sysco Corporation | 2,504,653 | 78,321 | ||||||
|
| |||||||
270,328 | ||||||||
ENERGY - 11.5% | ||||||||
Energy Equipment & Services - 5.4% |
| |||||||
Ensco PLC | 3,166,040 | 172,739 | ||||||
McDermott International, Inc.(1) | 10,876,288 | 132,908 | ||||||
Patterson-UTI Energy, Inc.(2) | 7,961,374 | 126,108 | ||||||
|
| |||||||
431,755 | ||||||||
Oil, Gas & Consumable Fuels - 6.1% |
| |||||||
Cimarex Energy Co. | 3,197,395 | 187,208 | ||||||
Hess Corporation | 2,226,866 | 119,627 | ||||||
Southwestern Energy Company(1) | 5,239,168 | 182,218 | ||||||
|
| |||||||
489,053 | ||||||||
FINANCIALS - 20.1% | ||||||||
Capital Markets - 1.2% | ||||||||
Northern Trust Corporation | 2,001,438 | 92,897 | ||||||
Insurance - 16.8% | ||||||||
Alleghany Corporation(1) | 640,251 | 220,848 | ||||||
Allied World Assurance Company Holdings, Ltd | 1,235,843 | 95,469 | ||||||
The Allstate Corporation | 4,776,873 | 189,212 | ||||||
Aon Corporation | 3,175,728 | 166,059 | ||||||
Arch Capital Group Ltd.(1)(2) | 3,865,186 | 161,101 | ||||||
FINANCIALS (CONTINUED) | ||||||||
Insurance (Continued) | ||||||||
Fidelity National Financial, Inc. | 4,665,303 | $ | 99,791 | |||||
Loews Corporation | 3,569,761 | 147,288 | ||||||
The Progressive Corporation | 9,771,996 | 202,671 | ||||||
Torchmark Corporation | 1,374,082 | 70,559 | ||||||
|
| |||||||
1,352,998 | ||||||||
Real Estate Investment Trusts |
| |||||||
Annaly Capital Management, Inc. | 5,695,194 | 95,907 | ||||||
Hatteras Financial Corp. | 2,592,155 | 73,073 | ||||||
|
| |||||||
168,980 | ||||||||
HEALTHCARE - 4.5% | ||||||||
Health Care Equipment & |
| |||||||
Becton, Dickinson and Company | 1,387,708 | 109,018 | ||||||
Health Care Providers & |
| |||||||
Cigna Corporation | 3,876,599 | 182,859 | ||||||
Life Sciences Tools & |
| |||||||
Covance Inc.(1) | 1,395,945 | 65,177 | ||||||
INDUSTRIALS - 18.0% | ||||||||
Aerospace & Defense - 5.7% | ||||||||
L-3 Communications Holdings, Inc. | 1,964,653 | 140,885 | ||||||
Rockwell Collins, Inc. | 3,577,411 | 191,892 | ||||||
Spirit AeroSystems Holdings, Inc., Class A(1) | 5,765,572 | 128,053 | ||||||
|
| |||||||
460,830 | ||||||||
Commercial Services & Supplies - 0.8% |
| |||||||
Republic Services, Inc. | 2,274,441 | 62,570 | ||||||
Construction & Engineering - 2.2% |
| |||||||
Jacobs Engineering Group Inc.(1) | 4,428,096 | 179,028 | ||||||
Electrical Equipment - 1.9% | ||||||||
Hubbell Inc., Class B | 1,923,180 | 155,278 | ||||||
Machinery - 1.7% | ||||||||
Flowserve Corporation | 1,091,491 | 139,427 | ||||||
45
Shares Held | Value | |||||||
INDUSTRIALS (CONTINUED) | ||||||||
Professional Services - 4.9% | ||||||||
The Dun & Bradstreet Corporation | 2,028,921 | $ | 161,543 | |||||
ManpowerGroup | 2,645,273 | 97,346 | ||||||
Towers Watson & Co., Class A | 2,471,975 | 131,138 | ||||||
|
| |||||||
390,027 | ||||||||
Road & Rail - 0.8% | ||||||||
Ryder System, Inc.(2) | 1,720,723 | 67,211 | ||||||
INFORMATION TECHNOLOGY - 25.7% | ||||||||
Computers & Peripherals - 1.2% | ||||||||
Lexmark International, Inc.(2) | 4,391,595 | 97,713 | ||||||
Electronic Equipment & Instruments - 8.6% |
| |||||||
Arrow Electronics, Inc.(1)(2) | 5,329,061 | 179,643 | ||||||
Avnet, Inc.(1)(2) | 6,754,379 | 196,485 | ||||||
FLIR Systems, Inc.(2) | 7,992,622 | 159,653 | ||||||
Ingram Micro Inc.(1)(2) | 10,362,660 | 157,823 | ||||||
|
| |||||||
693,604 | ||||||||
Internet Software & Services - 1.4% |
| |||||||
Open Text Corporation(1)(3) | 2,093,098 | 115,413 | ||||||
IT Services - 5.9% | ||||||||
Broadridge Financial Solutions, Inc. | 5,380,360 | 125,524 | ||||||
SAIC, Inc. | 10,881,934 | 131,019 | ||||||
The Western Union Company | 12,083,350 | 220,159 | ||||||
|
| |||||||
476,702 | ||||||||
Semiconductors & Semiconductor |
| |||||||
Analog Devices, Inc. | 5,187,773 | 203,309 | ||||||
Applied Materials, Inc. | 13,316,127 | 148,675 | ||||||
Lam Research Corporation(1) | 5,045,232 | 160,363 | ||||||
|
| |||||||
512,347 | ||||||||
Software - 2.2% | ||||||||
Autodesk, Inc.(1) | 2,579,007 | 86,061 | ||||||
BMC Software, Inc.(1) | 67,952 | 2,819 | ||||||
SYNOPSYS, INC.(1) | 2,618,455 | 86,461 | ||||||
|
| |||||||
175,341 | ||||||||
UTILITIES - 1.9% | ||||||||
Electrical Utilities - 0.6% | ||||||||
OGE Energy Corp. | 835,870 | 46,357 | ||||||
Multi-Utilities - 0.4% | ||||||||
SCANA Corporation | 592,995 | 28,624 | ||||||
Water Utilities - 0.9% | ||||||||
American Water Works Company, Inc. | 1,913,264 | 70,906 | ||||||
|
| |||||||
Total common stocks | 7,471,669 | |||||||
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 6.9% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $551,252 (Cost $551,252)(4) | $ | 551,252 | $ | 551,252 | ||||
|
| |||||||
Total investments - 99.9% | 8,022,921 | |||||||
Other assets less liabilities - 0.1% | 6,620 | |||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 8,029,541 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(3) | The Fund considers the company to be from Canada. See the Fund’s Statement of Additional Information for information on how a particular country is assigned. The security trades in U.S. dollars. |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.750 | % | 5/31/2016 | $ | 562,282 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company’s legal name may be different.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Alleghany Corporation | United States | 2.8 | % | |||
The Western Union Company | United States | 2.7 | ||||
Analog Devices, Inc. | United States | 2.5 | ||||
The Progressive Corporation | United States | 2.5 | ||||
Avnet, Inc. | United States | 2.4 | ||||
The Kroger Co. | United States | 2.4 | ||||
Rockwell Collins, Inc. | United States | 2.4 | ||||
The Allstate Corporation | United States | 2.4 | ||||
Cimarex Energy Co. | United States | 2.3 | ||||
CIGNA Corporation | United States | 2.3 | ||||
|
| |||||
Total | 24.7 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
46
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 94.8% | ||||||||
CONSUMER DISCRETIONARY - 14.3% | ||||||||
Automobiles - 0.7% |
| |||||||
Tesla Motors, Inc.(1) | 176,900 | $ | 5,180 | |||||
Distributors - 3.1% |
| |||||||
LKQ Corporation(1) | 1,229,000 | 22,736 | ||||||
Diversified Consumer Services - 0.2% |
| |||||||
K12 Inc.(1) | 89,300 | 1,804 | ||||||
Hotels, Restaurants & Leisure - 1.6% |
| |||||||
Dunkin’ Brands Group, Inc. | 403,300 | 11,774 | ||||||
Internet & Catalog Retail - 1.0% |
| |||||||
HomeAway, Inc.(1) | 312,400 | 7,326 | ||||||
Media - 0.6% |
| |||||||
Pandora Media, Inc.(1) | 372,200 | 4,076 | ||||||
Specialty Retail - 5.6% |
| |||||||
Francesca’s Collections, Inc.(1) | 391,400 | 12,028 | ||||||
Hibbett Sports, Inc.(1) | 61,400 | 3,650 | ||||||
Monro Muffler Brake, Inc. | 211,600 | 7,446 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 179,300 | 17,267 | ||||||
|
| |||||||
40,391 | ||||||||
Textiles, Apparel & Luxury Goods - 1.5% |
| |||||||
Deckers Outdoor Corporation(1) | 22,700 | 832 | ||||||
The Warnaco Group, Inc.(1) | 197,700 | 10,261 | ||||||
|
| |||||||
11,093 | ||||||||
CONSUMER STAPLES - 3.9% | ||||||||
Food & Staples Retailing - 1.7% |
| |||||||
The Fresh Market, Inc.(1) | 203,200 | 12,188 | ||||||
Food Products - 2.2% |
| |||||||
Annie’s, Inc.(1) | 113,200 | 5,076 | ||||||
TreeHouse Foods, Inc.(1) | 212,775 | 11,171 | ||||||
|
| |||||||
16,247 | ||||||||
ENERGY - 4.9% | ||||||||
Energy Equipment & Services - 2.5% |
| |||||||
Dril-Quip, Inc.(1) | 251,100 | 18,049 | ||||||
ENERGY (CONTINUED) | ||||||||
Oil, Gas & Consumable Fuels - 2.4% |
| |||||||
Oasis Petroleum Inc.(1) | 259,000 | $ | 7,633 | |||||
Rosetta Resources Inc.(1) | 198,500 | 9,508 | ||||||
|
| |||||||
17,141 | ||||||||
FINANCIALS - 2.5% | ||||||||
Capital Markets - 2.5% |
| |||||||
Ares Capital Corporation | 1,068,583 | 18,315 | ||||||
HEALTHCARE - 19.5% | ||||||||
Biotechnology - 6.8% |
| |||||||
ARIAD Pharmaceuticals, Inc.(1) | 543,600 | 13,169 | ||||||
Cepheid(1)(2) | 647,200 | 22,335 | ||||||
Incyte Corporation(1) | 491,800 | 8,877 | ||||||
Isis Pharmaceuticals, Inc.(1) | 375,900 | 5,289 | ||||||
|
| |||||||
49,670 | ||||||||
Health Care Equipment & Supplies - 3.3% |
| |||||||
DexCom Inc.(1) | 684,700 | 10,291 | ||||||
GenMark Diagnostics, Inc.(1) | 201,800 | 1,859 | ||||||
HeartWare International, Inc.(1) | 102,825 | 9,716 | ||||||
NxStage Medical, Inc.(1) | 142,700 | 1,885 | ||||||
|
| |||||||
23,751 | ||||||||
Health Care Providers & Services - 4.5% |
| |||||||
Acadia Healthcare Company, Inc.(1) | 410,500 | 9,790 | ||||||
HMS Holdings Corp.(1) | 680,700 | 22,756 | ||||||
|
| |||||||
32,546 | ||||||||
Health Care Technology - 3.8% |
| |||||||
athenahealth, Inc.(1)(2) | 239,900 | 22,016 | ||||||
Vocera Communications, Inc.(1) | 180,900 | 5,592 | ||||||
|
| |||||||
27,608 | ||||||||
Life Sciences Tools & Services - 0.7% |
| |||||||
Bruker Corporation(1) | 411,300 | 5,384 | ||||||
Pharmaceuticals - 0.4% |
| |||||||
VIVUS, Inc.(1) | 171,400 | 3,054 | ||||||
INDUSTRIALS - 19.3% | ||||||||
Aerospace & Defense - 1.0% |
| |||||||
Teledyne Technologies Incorporated(1) | 111,500 | 7,068 | ||||||
Electrical Equipment - 3.9% |
| |||||||
Acuity Brands, Inc. | 320,400 | 20,278 | ||||||
Regal Beloit Corporation | 119,600 | 8,429 | ||||||
|
| |||||||
28,707 |
47
Shares Held | Value | |||||||
INDUSTRIALS (CONTINUED) | ||||||||
Machinery - 8.8% |
| |||||||
Chart Industries, Inc.(1) | 192,900 | $ | 14,246 | |||||
IDEX Corporation | 506,100 | 21,140 | ||||||
Proto Labs, Inc.(1) | 30,800 | 1,042 | ||||||
Robbins & Myers, Inc. | 154,800 | 9,226 | ||||||
Westport Innovations Inc.(1)(3) | 125,900 | 3,505 | ||||||
Woodward, Inc. | 426,400 | 14,489 | ||||||
|
| |||||||
63,648 | ||||||||
Professional Services - 2.2% |
| |||||||
The Advisory Board Company(1) | 328,400 | 15,707 | ||||||
Trading Companies & Distributors - 3.4% |
| |||||||
Beacon Roofing Supply, Inc.(1) | 869,600 | 24,784 | ||||||
INFORMATION TECHNOLOGY - 30.4% | ||||||||
Communications Equipment - 2.4% |
| |||||||
Acme Packet, Inc.(1) | 218,400 | 3,735 | ||||||
Aruba Networks, Inc.(1) | 313,200 | 7,042 | ||||||
Finisar Corporation(1) | 476,600 | 6,815 | ||||||
|
| |||||||
17,592 | ||||||||
Electronic Equipment & Instruments - 7.0% |
| |||||||
Cognex Corporation | 439,200 | 15,187 | ||||||
FARO Technologies, Inc.(1) | 63,000 | 2,603 | ||||||
FEI Company | 163,400 | 8,742 | ||||||
IPG Photonics Corporation(1) | 264,600 | 15,162 | ||||||
Maxwell Technologies, Inc.(1) | 215,900 | 1,753 | ||||||
Universal Display Corporation(1) | 207,200 | 7,123 | ||||||
|
| |||||||
50,570 | ||||||||
Internet Software & Services - 3.2% |
| |||||||
CoStar Group, Inc.(1) | 106,800 | 8,708 | ||||||
Liquidity Services, Inc.(1) | 145,100 | 7,285 | ||||||
MercadoLibre, Inc. | 86,100 | 7,108 | ||||||
|
| |||||||
23,101 | ||||||||
Semiconductors & Semiconductor Equipment - 1.2% | ||||||||
Cavium Networks, Inc.(1) | 259,800 | 8,659 | ||||||
Software - 16.6% |
| |||||||
CommVault Systems, Inc.(1) | 409,700 | 24,049 | ||||||
Concur Technologies, Inc.(1) | 287,700 | 21,212 | ||||||
Fortinet, Inc.(1) | 638,400 | 15,411 | ||||||
Guidewire Software, Inc.(1) | 387,400 | 12,029 | ||||||
Informatica Corporation(1) | 349,900 | 12,180 | ||||||
NetSuite Inc.(1) | 177,700 | 11,337 | ||||||
Qlik Technologies Inc.(1) | 262,200 | 5,876 | ||||||
RealPage, Inc.(1) | 616,100 | 13,924 | ||||||
Tyler Technologies, Inc.(1) | 111,600 | 4,913 | ||||||
|
| |||||||
120,931 | ||||||||
|
| |||||||
Total common stocks | 689,100 | |||||||
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.7% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $34,153 (Cost $34,153)(4) | $ | 34,153 | $ | 34,153 | ||||
|
| |||||||
Total investments - 99.5% | 723,253 | |||||||
Other assets less liabilities - 0.5% | 3,640 | |||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 726,893 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(3) | The Fund considers the company to be from Canada. See the Fund's Statement of Additional Information for information on how a particular country is assigned. The security trades in U.S. dollars. |
(4) Collateralized by:
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | $ | 34,837 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Beacon Roofing Supply, Inc. | United States | 3.4 | % | |||
CommVault Systems, Inc. | United States | 3.3 | ||||
HMS Holdings Corp. | United States | 3.1 | ||||
LKQ Corporation | United States | 3.1 | ||||
Cepheid | United States | 3.1 | ||||
athenahealth, Inc. | United States | 3.0 | ||||
Concur Technologies, Inc. | United States | 2.9 | ||||
IDEX Corporation | United States | 2.9 | ||||
Acuity Brands, Inc. | United States | 2.8 | ||||
Ares Capital Corporation | United States | 2.5 | ||||
|
| |||||
Total | 30.1 | % | ||||
|
|
For the purpose of determining the Fund's top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
48
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 96.1% | ||||||||
CONSUMER DISCRETIONARY - 14.5% | ||||||||
Diversified Consumer Services - 4.1% |
| |||||||
Coinstar, Inc.(1) | 809,700 | $ | 36,420 | |||||
Matthews International Corporation(2) | 1,419,500 | 42,329 | ||||||
Regis Corporation | 1,611,500 | 29,619 | ||||||
|
| |||||||
108,368 | ||||||||
Hotels, Restaurants & Leisure - 2.0% |
| |||||||
Jack in the Box Inc.(1) | 689,908 | 19,393 | ||||||
WMS Industries Inc.(1) | 2,025,000 | 33,169 | ||||||
|
| |||||||
52,562 | ||||||||
Household Durables - 0.5% |
| |||||||
Universal Electronics Inc.(1) | 718,000 | 12,622 | ||||||
Media - 2.9% |
| |||||||
Arbitron Inc. | 519,900 | 19,704 | ||||||
DreamWorks Animation SKG, Inc., Class A(1) | 2,236,500 | 43,008 | ||||||
Meredith Corporation | 396,155 | 13,865 | ||||||
|
| |||||||
76,577 | ||||||||
Specialty Retail - 2.2% |
| |||||||
Rent-A-Center, Inc. | 1,650,562 | 57,902 | ||||||
Textiles, Apparel & Luxury |
| |||||||
Skechers U.S.A., Inc., Class A(1) | 1,485,500 | 30,304 | ||||||
The Warnaco Group, Inc.(1) | 841,800 | 43,689 | ||||||
|
| |||||||
73,993 | ||||||||
CONSUMER STAPLES - 0.7% | ||||||||
Food Products - 0.7% | ||||||||
Darling International Inc.(1) | 1,031,600 | 18,868 | ||||||
ENERGY - 13.8% | ||||||||
Energy Equipment & Services - 7.0% |
| |||||||
GulfMark Offshore, Inc.(1) | 998,600 | 32,994 | ||||||
Key Energy Services, Inc.(1) | 1,815,600 | 12,709 | ||||||
Newpark Resources, Inc.(1) | 2,343,800 | 17,368 | ||||||
Parker Drilling Company(1) | 3,193,347 | 13,508 | ||||||
SEACOR Holdings Inc.(1) | 207,100 | 17,264 | ||||||
Superior Energy Services, Inc.(1) | 742,725 | 15,241 | ||||||
Tidewater Inc. | 800,500 | 38,848 | ||||||
Unit Corporation(1) | 932,600 | 38,703 | ||||||
|
| |||||||
186,635 | ||||||||
ENERGY (CONTINUED) | ||||||||
Oil, Gas & Consumable Fuels - 6.8% |
| |||||||
Cloud Peak Energy Inc.(1) | 3,004,100 | $ | 54,374 | |||||
Comstock Resources, Inc.(1) | 2,289,090 | 42,073 | ||||||
Forest Oil Corporation(1) | 3,390,890 | 28,653 | ||||||
Lone Pine Resources Inc.(1) | 2,035,111 | 3,175 | ||||||
World Fuel Services Corporation | 1,469,000 | 52,311 | ||||||
|
| |||||||
180,586 | ||||||||
FINANCIALS - 6.2% | ||||||||
Diversified Financial Services - 1.0% |
| |||||||
PICO Holdings, Inc.(1)(2) | 1,138,890 | 25,989 | ||||||
Insurance - 3.1% | ||||||||
Allied World Assurance Company | 247,555 | 19,124 | ||||||
Alterra Capital Holdings Limited | 470,375 | 11,261 | ||||||
Endurance Specialty Holdings Ltd. | 420,923 | 16,206 | ||||||
Platinum Underwriters Holdings, Ltd. | 874,800 | 35,753 | ||||||
|
| |||||||
82,344 | ||||||||
Real Estate Investment Trusts |
| |||||||
Anworth Mortgage Asset Corporation | 2,442,900 | 16,612 | ||||||
Hatteras Financial Corp. | 833,500 | 23,496 | ||||||
Potlatch Corporation | 429,101 | 16,036 | ||||||
|
| |||||||
56,144 | ||||||||
HEALTHCARE - 2.7% | ||||||||
Biotechnology - 0.4% | ||||||||
Enzon Pharmaceuticals, Inc.(1) | 1,353,500 | 9,420 | ||||||
Health Care Equipment & |
| |||||||
CONMED Corporation | 1,031,659 | 29,402 | ||||||
Life Sciences Tools & Services - 1.2% |
| |||||||
ICON PLC (DR)(1)(2)(3) | 1,343,941 | 32,752 | ||||||
INDUSTRIALS - 26.2% | ||||||||
Aerospace & Defense - 2.3% | ||||||||
Curtiss-Wright Corporation | 792,300 | 25,908 | ||||||
Spirit AeroSystems Holdings, Inc., Class A(1) | 1,617,579 | 35,926 | ||||||
|
| |||||||
61,834 | ||||||||
Air Freight & Logistics - 1.5% | ||||||||
Atlas Air Worldwide Holdings, Inc.(1) | 775,800 | 40,055 |
49
Shares Held | Value | |||||||
INDUSTRIALS (CONTINUED) | ||||||||
Airlines - 0.6% | ||||||||
Hawaiian Holdings, Inc.(1)(2) | 2,896,800 | $ | 16,193 | |||||
Commercial Services & Supplies - 3.2% |
| |||||||
Quad/Graphics, Inc., Class A | 792,300 | 13,437 | ||||||
Sykes Enterprises, Incorporated(1)(2) | 2,723,494 | 36,604 | ||||||
Tetra Tech, Inc.(1) | 1,361,700 | 35,758 | ||||||
|
| |||||||
85,799 | ||||||||
Construction & Engineering - 5.7% | ||||||||
Comfort Systems USA, Inc.(2) | 2,214,426 | 24,204 | ||||||
EMCOR Group, Inc. | 2,459,362 | 70,190 | ||||||
Granite Construction Incorporated | 1,254,462 | 36,028 | ||||||
ORION MARINE GROUP, INC.(1)(2) | 1,601,100 | 11,896 | ||||||
Tutor Perini Corporation(1) | 742,800 | 8,498 | ||||||
|
| |||||||
150,816 | ||||||||
Electrical Equipment - 0.6% | ||||||||
Encore Wire Corporation | 511,700 | 14,972 | ||||||
Machinery - 5.4% | ||||||||
Astec Industries, Inc.(1) | 734,481 | 23,217 | ||||||
CIRCOR International, Inc. | 288,900 | 10,906 | ||||||
Harsco Corporation | 965,600 | 19,824 | ||||||
Kaydon Corporation | 1,324,500 | 29,589 | ||||||
Mueller Industries, Inc. | 726,224 | 33,021 | ||||||
Woodward, Inc. | 808,833 | 27,484 | ||||||
|
| |||||||
144,041 | ||||||||
Professional Services - 4.5% | ||||||||
CRA International, Inc.(1)(2) | 709,779 | 12,265 | ||||||
FTI Consulting, Inc.(1) | 2,038,465 | 54,386 | ||||||
Kforce Inc.(1) | 668,500 | 7,882 | ||||||
Towers Watson & Co., Class A | 544,687 | 28,896 | ||||||
TrueBlue, Inc.(1) | 1,072,888 | 16,866 | ||||||
|
| |||||||
120,295 | ||||||||
Road & Rail - 2.4% | ||||||||
Ryder System, Inc.(2) | 1,601,064 | 62,538 | ||||||
INFORMATION TECHNOLOGY - 24.5% | ||||||||
Communications Equipment - 1.8% |
| |||||||
ADTRAN, Inc. | 2,786,200 | 48,146 | ||||||
Computers & Peripherals - 5.5% | ||||||||
Diebold, Incorporated | 1,856,866 | 62,595 | ||||||
Intermec, Inc.(1) | 1,477,219 | 9,174 | ||||||
Lexmark International, Inc.(2) | 1,295,687 | 28,829 | ||||||
Logitech International S.A.(3) | 932,600 | 8,533 | ||||||
QLogic Corporation(1) | 3,278,500 | 37,440 | ||||||
|
| |||||||
146,571 | ||||||||
INFORMATION TECHNOLOGY (CONTINUED) | ||||||||
Electronic Equipment & |
| |||||||
Arrow Electronics, Inc.(1)(2) | 1,130,647 | $ | 38,114 | |||||
Benchmark Electronics, Inc.(1) | 1,185,701 | 18,106 | ||||||
Power-One, Inc.(1) | 3,070,100 | 17,193 | ||||||
Tech Data Corporation(1) | 932,600 | 42,247 | ||||||
|
| |||||||
115,660 | ||||||||
Internet Software & Services - 1.3% |
| |||||||
EarthLink, Inc. | 5,009,540 | 35,668 | ||||||
IT Services - 2.0% | ||||||||
CACI International Inc(1) | 759,250 | 39,322 | ||||||
ManTech International Corporation, Class A | 585,968 | 14,063 | ||||||
|
| |||||||
53,385 | ||||||||
Semiconductors & Semiconductor |
| |||||||
Intersil Corporation | 4,530,800 | 39,644 | ||||||
Nanometrics Incorporated(1) | 722,900 | 9,983 | ||||||
Rudolph Technologies, Inc.(1) | 608,051 | 6,385 | ||||||
Ultratech, Inc.(1)(2) | 1,757,837 | 55,161 | ||||||
Volterra Semiconductor Corporation(1) | 572,000 | 12,510 | ||||||
|
| |||||||
123,683 | ||||||||
Software - 4.8% | ||||||||
MicroStrategy Incorporated, Class A(1) | 319,371 | 42,818 | ||||||
Progress Software Corporation(1) | 2,075,623 | 44,398 | ||||||
Rosetta Stone Inc.(1) | 736,000 | 9,384 | ||||||
Websense, Inc.(1)(2) | 1,914,637 | 29,964 | ||||||
|
| |||||||
126,564 | ||||||||
MATERIALS - 5.9% | ||||||||
Chemicals - 4.6% | ||||||||
H.B. Fuller Company | 2,144,333 | 65,788 | ||||||
Minerals Technologies Inc. | 437,500 | 31,032 | ||||||
Sensient Technologies Corporation | 709,715 | 26,089 | ||||||
|
| |||||||
122,909 | ||||||||
Metals & Mining - 1.3% | ||||||||
Schnitzer Steel Industries, Inc., Class A | 1,246,200 | 35,081 | ||||||
TELECOMMUNICATION SERVICES - 1.6% | ||||||||
Diversified Telecommunication |
| |||||||
Atlantic Tele-Network, Inc. | 585,914 | 25,183 | ||||||
Neutral Tandem, Inc.(1)(2) | 1,988,900 | 18,656 | ||||||
|
| |||||||
43,839 | ||||||||
|
| |||||||
Total common stocks | 2,552,213 |
50
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.2% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $109,801 (Cost $109,801)(4) | $ | 109,801 | $ | 109,801 | ||||
|
| |||||||
Total investments - 100.3% | 2,662,014 | |||||||
Other assets less liabilities - (0.3%) | (6,944 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 2,655,070 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(3) | The Fund considers the company to be from outside of the United States. See the Fund's Statement of Additional Information for information on how a particular country is assigned. |
Security | Country | Trading Currency | ||
ICON PLC (DR) | Ireland | U.S. dollar | ||
Logitech International S.A. | Switzerland | U.S. dollar |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 3/31/2019 | $ | 112,000 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
EMCOR Group, Inc. | United States | 2.6 | % | |||
H.B. Fuller Company | United States | 2.5 | ||||
Diebold, Incorporated | United States | 2.4 | ||||
Ryder System, Inc. | United States | 2.4 | ||||
Rent-A-Center, Inc. | United States | 2.2 | ||||
Ultratech, Inc. | United States | 2.1 | ||||
FTI Consulting, Inc. | United States | 2.0 | ||||
Cloud Peak Energy, Inc. | United States | 2.0 | ||||
World Fuel Services Corporation | United States | 2.0 | ||||
ADTRAN, Inc. | United States | 1.8 | ||||
|
| |||||
Total | 22.0 | % | ||||
|
|
For the purpose of determining the Fund's top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
51
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 91.4% | ||||||||
CONSUMER DISCRETIONARY - 3.8% | ||||||||
Diversified Consumer Services - 2.4% |
| |||||||
H&R Block, Inc. | 1,137,800 | $ | 19,718 | |||||
Multiline Retail - 1.4% | ||||||||
Target Corporation | 189,200 | 12,008 | ||||||
CONSUMER STAPLES - 4.7% | ||||||||
Food & Staples Retailing - 4.7% |
| |||||||
The Kroger Co. | 978,500 | 23,034 | ||||||
Tesco plc(1) | 2,964,049 | 15,891 | ||||||
|
| |||||||
38,925 | ||||||||
ENERGY-14.3% | ||||||||
Energy Equipment & Services - 5.5% |
| |||||||
Baker Hughes Incorporated | 598,200 | 27,057 | ||||||
Noble Corporation | 527,900 | 18,888 | ||||||
|
| |||||||
45,945 | ||||||||
Oil, Gas & Consumable Fuels - 8.8% |
| |||||||
Apache Corporation | 367,500 | 31,778 | ||||||
Cimarex Energy Co. | 355,800 | 20,832 | ||||||
Royal Dutch Shell PLC, Class A (DR)(1) | 302,200 | 20,976 | ||||||
|
| |||||||
73,586 | ||||||||
FINANCIALS - 23.4% | ||||||||
Capital Markets - 4.3% | ||||||||
The Bank of New York Mellon Corporation | 831,300 | 18,804 | ||||||
The Goldman Sachs Group, Inc. | 149,205 | 16,962 | ||||||
|
| |||||||
35,766 | ||||||||
Insurance - 17.5% | ||||||||
Alleghany Corporation(2) | 50,736 | 17,501 | ||||||
The Allstate Corporation | 448,250 | 17,755 | ||||||
Arch Capital Group Ltd.(2)(3) | 561,300 | 23,395 | ||||||
Berkshire Hathaway Inc., Class B(2) | 426,530 | 37,620 | ||||||
The Chubb Corporation | 314,700 | 24,005 | ||||||
The Progressive Corporation | 1,239,600 | 25,709 | ||||||
|
| |||||||
145,985 | ||||||||
Real Estate Investment Trusts (REITS) - 1.6% | ||||||||
Annaly Capital Management, Inc. | 786,300 | 13,241 | ||||||
HEALTHCARE - 6.4% | ||||||||
Health Care Equipment & Supplies - 1.9% | ||||||||
Becton, Dickinson and Company | 203,600 | $ | 15,995 | |||||
Health Care Providers & |
| |||||||
Cigna Corporation | 438,900 | 20,703 | ||||||
Wellpoint, Inc. | 286,900 | 16,643 | ||||||
|
| |||||||
37,346 | ||||||||
INDUSTRIALS - 2.6% | ||||||||
Construction & Engineering - 2.6% |
| |||||||
Jacobs Engineering Group Inc.(2) | 536,500 | 21,691 | ||||||
INFORMATION TECHNOLOGY - 29.2% | ||||||||
Communications Equipment - 3.0% |
| |||||||
Cisco Systems, Inc. | 1,297,100 | 24,762 | ||||||
Computers & Peripherals - 3.5% | ||||||||
Apple Inc. | 44,244 | 29,522 | ||||||
Electronic Equipment & Instruments - 4.7% | ||||||||
Avnet, Inc.(2)(3) | 709,300 | 20,634 | ||||||
Ingram Micro Inc.(2)(3) | 1,252,000 | 19,068 | ||||||
|
| |||||||
39,702 | ||||||||
Internet Software & Services - 2.7% |
| |||||||
Google Inc., Class A(2) | 30,500 | 23,012 | ||||||
IT Services - 3.3% | ||||||||
The Western Union Company | 1,504,900 | 27,419 | ||||||
Semiconductors & Semiconductor Equipment - 6.6% | ||||||||
Samsung Electronics Co., Ltd., Preferred(1)(4) | 44,967 | 31,922 | ||||||
Texas Instruments Incorporated | 857,300 | 23,619 | ||||||
|
| |||||||
55,541 | ||||||||
Software - 5.4% | ||||||||
Microsoft Corporation | 693,800 | 20,661 | ||||||
Oracle Corporation | 768,400 | 24,197 | ||||||
|
| |||||||
44,858 | ||||||||
MATERIALS - 3.9% | ||||||||
Chemicals - 1.6% | ||||||||
The Mosaic Company | 235,800 | 13,584 |
52
Shares Held | Value | |||||||
MATERIALS (CONTINUED) | ||||||||
Metals & Mining - 2.3% | ||||||||
Newmont Mining Corporation | 339,100 | $ | 18,993 | |||||
TELECOMMUNICATION SERVICES - 3.1% | ||||||||
Wireless Telecommunication Services - 3.1% | ||||||||
Vodafone Group Plc (DR)(1) | 906,700 | 25,836 | ||||||
|
| |||||||
Total common and preferred stocks | 763,435 | |||||||
Par Amount | ||||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 8.9% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $74,581 | $ | 74,581 | $ | 74,581 | ||||
|
| |||||||
Total investments - 100.3% | 838,016 | |||||||
Other assets less liabilities - (0.3%) | (2,536 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(6) | $ | 835,480 | ||||||
|
|
(1) | The Fund considers the company to be from outside of the United States. See the Fund's Statement of Additional Information for information on how a particular country is assigned. |
Security | Country | Trading Currency | ||
Royal Dutch Shell PLC, Class A (DR) | United Kingdom | U.S. dollar | ||
Samsung Electronics Co., Ltd., Preferred | Korea | Korean won | ||
Tesco plc | United Kingdom | British pound | ||
Vodafone Group Plc (DR) | United Kingdom | U.S. dollar |
(2) | Non-income producing security. |
(3) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(4) | Non-voting shares. |
(5) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 2.375 | % | 5/31/2018 | $ | 8,939 | |||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | 55,114 | ||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | 12,023 | ||||||||
|
| |||||||||||
$ | 76,076 | |||||||||||
|
|
(6) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Berkshire Hathaway Inc. | United States | 4.5 | % | |||
Samsung Electronics Co., Ltd. | Korea | 3.8 | ||||
Apache Corporation | United States | 3.8 | ||||
Apple Inc. | United States | 3.5 | ||||
The Western Union Company | United States | 3.3 | ||||
Baker Hughes Incorporated | United States | 3.2 | ||||
Vodafone Group Plc | United Kingdom | 3.1 | ||||
The Progressive Corporation | United States | 3.1 | ||||
Cisco Systems, Inc. | United States | 3.0 | ||||
Oracle Corporation | United States | 2.9 | ||||
|
| |||||
Total | 34.2 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
53
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012
Dollar values in thousands
GLOBAL EQUITY | GLOBAL OPPORTUNITIES | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 15,112 | $ | 297,957 | ||||
Short-term investments (repurchase agreements), at value | 333 | 15,330 | ||||||
|
|
|
| |||||
Total investments | 15,445 | 313,287 | ||||||
Cash | - | (1) | 1 | |||||
Foreign currency | 5 | 51 | ||||||
Unrealized gain on foreign currency forward and spot contracts | - | - | (1) | |||||
Receivable from investments sold | - | 2,268 | ||||||
Receivable from fund shares sold | 111 | 713 | ||||||
Dividends and interest receivable | 28 | 192 | ||||||
|
|
|
| |||||
Total assets | 15,589 | 316,512 | ||||||
LIABILITIES: | ||||||||
Unrealized loss on foreign currency forward and spot contracts | - | 31 | ||||||
Payable for investments purchased | - | 3,874 | ||||||
Payable for fund shares redeemed | 1 | 121 | ||||||
Payable for operating expenses | 46 | 171 | ||||||
Payable for foreign taxes(2) | 4 | 42 | ||||||
|
|
|
| |||||
Total liabilities | 51 | 4,239 | ||||||
|
|
|
| |||||
Total net assets | $ | 15,538 | $ | 312,273 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 12,387 | $ | 280,108 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 2,470 | 39,564 | ||||||
Accumulated undistributed net investment income (loss) | 47 | (531 | ) | |||||
Accumulated undistributed net realized gains (losses) on investments and foreign currency related transactions | 634 | (6,868 | ) | |||||
|
|
|
| |||||
$ | 15,538 | $ | 312,273 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 15,538 | $ | 228,090 | ||||
Institutional Shares | $ | 84,183 | ||||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | 1,190,830 | 15,988,438 | ||||||
Institutional Shares | 5,891,877 | |||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 13.05 | $ | 14.27 | ||||
Institutional Shares | $ | 14.29 | ||||||
Cost of securities of unaffiliated issuers held | $ | 12,972 | $ | 273,665 | ||||
Cost of foreign currency | $ | 5 | $ | 52 |
(1) | Amount rounds to less than $1. |
(2) | Including taxes on unrealized gains | |||||
Global Equity | $ - | |||||
Global Opportunities | 33 |
The accompanying notes are an integral part of the financial statements.
54
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
GLOBAL VALUE | INTERNATIONAL | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 199,890 | $ | 9,470,795 | ||||
Investments in securities, affiliated, at value | 7,759 | - | ||||||
Short-term investments (repurchase agreements), at value | 21,478 | 108,556 | ||||||
|
|
|
| |||||
Total investments | 229,127 | 9,579,351 | ||||||
Cash | 26 | 1 | ||||||
Foreign currency | 68 | 3,401 | ||||||
Unrealized gain on foreign currency forward and spot contracts | - | 242 | ||||||
Receivable from investments sold | 583 | 90,148 | ||||||
Receivable from fund shares sold | 36,175 | 25,899 | ||||||
Dividends and interest receivable | 284 | 25,220 | ||||||
|
|
|
| |||||
Total assets | 266,263 | 9,724,262 | ||||||
LIABILITIES: | ||||||||
Unrealized loss on foreign currency forward and spot contracts | 63 | 2 | ||||||
Payable for investments purchased | 85 | 47,899 | ||||||
Payable for fund shares redeemed | 25 | 21,501 | ||||||
Payable for operating expenses | 178 | 3,397 | ||||||
Payable for foreign taxes | 6 | 1,173 | ||||||
|
|
|
| |||||
Total liabilities | 357 | 73,972 | ||||||
|
|
|
| |||||
Total net assets | $ | 265,906 | $ | 9,650,290 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 237,371 | $ | 9,654,215 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 28,295 | 1,668,066 | ||||||
Accumulated undistributed net investment income | 321 | 118,396 | ||||||
Accumulated undistributed net realized losses on investments and foreign currency related transactions | (81 | ) | (1,790,387 | ) | ||||
|
|
|
| |||||
$ | 265,906 | $ | 9,650,290 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 217,057 | $ | 6,877,615 | ||||
Institutional Shares | $ | 48,849 | $ | 2,772,675 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 18,736,910 | 292,196,037 | ||||||
Institutional Shares | 4,218,155 | 117,008,860 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 11.58 | $ | 23.54 | ||||
Institutional Shares | $ | 11.58 | $ | 23.70 | ||||
Cost of securities of unaffiliated issuers held | $ | 194,740 | $ | 7,911,123 | ||||
Cost of securities of affiliated issuers held | $ | 6,029 | $ | - | ||||
Cost of foreign currency | $ | 68 | $ | 3,403 |
The accompanying notes are an integral part of the financial statements.
55
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
INTERNATIONAL SMALL CAP | INTERNATIONAL VALUE | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 701,827 | $ | 5,123,468 | ||||
Investments in securities, affiliated, at value | - | 794,455 | ||||||
Short-term investments (repurchase agreements), at value | 11,784 | 758,286 | ||||||
|
|
|
| |||||
Total investments | 713,611 | 6,676,209 | ||||||
Cash | - | (1) | 1 | |||||
Foreign currency | 1,626 | 2,008 | ||||||
Unrealized gain on foreign currency forward and spot contracts | 3 | 61 | ||||||
Receivable from investments sold | 552 | 573 | ||||||
Receivable from fund shares sold | 6,379 | 29,367 | ||||||
Dividends and interest receivable | 1,544 | 16,405 | ||||||
|
|
|
| |||||
Total assets | 723,715 | 6,724,624 | ||||||
LIABILITIES: | ||||||||
Unrealized loss on foreign currency forward and spot contracts | 18 | 5,081 | ||||||
Payable for investments purchased | 7,114 | 74,661 | ||||||
Payable for fund shares redeemed | 170 | 3,125 | ||||||
Payable for operating expenses | 305 | 2,073 | ||||||
Payable for foreign taxes | 59 | 449 | ||||||
|
|
|
| |||||
Total liabilities | 7,666 | 85,389 | ||||||
|
|
|
| |||||
Total net assets | $ | 716,049 | $ | 6,639,235 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 582,147 | $ | 5,654,212 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 157,914 | 955,507 | ||||||
Accumulated undistributed net investment income | 7,727 | 50,909 | ||||||
Accumulated undistributed net realized losses on investments and foreign currency related transactions | (31,739 | ) | (21,393 | ) | ||||
|
|
|
| |||||
$ | 716,049 | $ | 6,639,235 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 716,049 | $ | 5,081,735 | ||||
Institutional Shares | $ | 1,557,500 | ||||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 34,516,197 | 176,951,861 | ||||||
Institutional Shares | 54,087,709 | |||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 20.75 | $ | 28.72 | ||||
Institutional Shares | $ | 28.80 | ||||||
Cost of securities of unaffiliated issuers held | $ | 555,686 | $ | 5,148,464 | ||||
Cost of securities of affiliated issuers held | $ | - | $ | 567,174 | ||||
Cost of foreign currency | $ | 1,626 | $ | 2,011 |
(1) | Amount rounds to less than $1. |
The accompanying notes are an integral part of the financial statements.
56
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
MID CAP | MID CAP VALUE | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 6,105,771 | $ | 6,325,932 | ||||
Investments in securities, affiliated, at value | 321,085 | 1,145,737 | ||||||
Short-term investments (repurchase agreements), at value | 309,376 | 551,252 | ||||||
|
|
|
| |||||
Total investments | 6,736,232 | 8,022,921 | ||||||
Cash | 518 | - | (1) | |||||
Receivable from investments sold | 39,111 | 1,689 | ||||||
Receivable from fund shares sold | 16,707 | 14,290 | ||||||
Dividends and interest receivable | 2,181 | 13,901 | ||||||
|
|
|
| |||||
Total assets | 6,794,749 | 8,052,801 | ||||||
LIABILITIES: | ||||||||
Payable for investments purchased | 52,847 | 7,677 | ||||||
Payable for fund shares redeemed | 21,005 | 11,510 | ||||||
Payable for operating expenses | 2,952 | 4,073 | ||||||
|
|
|
| |||||
Total liabilities | 76,804 | 23,260 | ||||||
|
|
|
| |||||
Total net assets | $ | 6,717,945 | $ | 8,029,541 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 4,453,465 | $ | 6,832,155 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 2,102,607 | 837,964 | ||||||
Accumulated undistributed net investment income (loss) | (37,201 | ) | 28,090 | |||||
Accumulated undistributed net realized gains on investments and foreign currency related transactions | 199,074 | 331,332 | ||||||
|
|
|
| |||||
$ | 6,717,945 | $ | 8,029,541 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 5,115,836 | $ | 7,753,814 | ||||
Institutional Shares | $ | 1,602,109 | $ | 275,727 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 131,836,234 | 367,150,812 | ||||||
Institutional Shares | 39,788,644 | 13,036,006 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 38.80 | $ | 21.12 | ||||
Institutional Shares | $ | 40.27 | $ | 21.15 | ||||
Cost of securities of unaffiliated issuers held | $ | 4,401,399 | $ | 6,021,185 | ||||
Cost of securities of affiliated issuers held | $ | 232,225 | $ | 1,163,772 |
(1) | Amount rounds to less than $1. |
The accompanying notes are an integral part of the financial statements.
57
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
SMALL CAP | SMALL CAP VALUE | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 644,749 | $ | 2,116,719 | ||||
Investments in securities, affiliated, at value | 44,351 | 435,494 | ||||||
Short-term investments (repurchase agreements), at value | 34,153 | 109,801 | ||||||
|
|
|
| |||||
Total investments | 723,253 | 2,662,014 | ||||||
Cash | 48 | 1 | ||||||
Receivable from investments sold | - | 1,377 | ||||||
Receivable from fund shares sold | 12,200 | 14,195 | ||||||
Dividends and interest receivable | 32 | 1,834 | ||||||
|
|
|
| |||||
Total assets | 735,533 | 2,679,421 | ||||||
LIABILITIES: | ||||||||
Payable for investments purchased | 7,458 | 9,230 | ||||||
Payable for fund shares redeemed | 848 | 13,749 | ||||||
Payable for operating expenses | 334 | 1,372 | ||||||
|
|
|
| |||||
Total liabilities | 8,640 | 24,351 | ||||||
|
|
|
| |||||
Total net assets | $ | 726,893 | $ | 2,655,070 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 715,825 | $ | 2,501,727 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 142,953 | 110,341 | ||||||
Accumulated undistributed net investment income (loss) | (3,241 | ) | 7,607 | |||||
Accumulated undistributed net realized gains (losses) on investments and foreign currency related transactions | (128,644 | ) | 35,395 | |||||
|
|
|
| |||||
$ | 726,893 | $ | 2,655,070 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 676,139 | $ | 2,348,847 | ||||
Institutional Shares | $ | 50,754 | $ | 306,223 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 32,355,156 | 154,155,879 | ||||||
Institutional Shares | 2,429,113 | 20,070,127 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 20.90 | $ | 15.24 | ||||
Institutional Shares | $ | 20.89 | $ | 15.26 | ||||
Cost of securities of unaffiliated issuers held | $ | 554,539 | $ | 2,135,942 | ||||
Cost of securities of affiliated issuers held | $ | 25,761 | $ | 415,731 |
The accompanying notes are an integral part of the financial statements.
58
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
VALUE | ||||
ASSETS: | ||||
Investments in securities, unaffiliated, at value | $ | 700,338 | ||
Investments in securities, affiliated, at value | 63,097 | |||
Short-term investments (repurchase agreements), at value | 74,581 | |||
|
| |||
Total investments | 838,016 | |||
Cash | 1 | |||
Receivable from fund shares sold | 1,708 | |||
Dividends and interest receivable | 1,071 | |||
|
| |||
Total assets | 840,796 | |||
LIABILITIES: | ||||
Payable for investments purchased | 4,245 | |||
Payable for fund shares redeemed | 590 | |||
Payable for operating expenses | 481 | |||
|
| |||
Total liabilities | 5,316 | |||
|
| |||
Total net assets | $ | 835,480 | ||
|
| |||
NET ASSETS CONSIST OF: | ||||
Fund shares issued and outstanding | $ | 788,976 | ||
Net unrealized appreciation on investments and foreign currency related transactions | 84,652 | |||
Accumulated undistributed net investment income | 3,244 | |||
Accumulated undistributed net realized losses on investments and foreign currency related transactions | (41,392 | ) | ||
|
| |||
$ | 835,480 | |||
|
| |||
SUPPLEMENTARY INFORMATION: | ||||
Net assets | ||||
Investor Shares | $ | 677,753 | ||
Institutional Shares | $ | 157,727 | ||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||
Investor Shares | 59,846,553 | |||
Institutional Shares | 13,896,744 | |||
Net asset value, offering price and redemption price per share | ||||
Investor Shares | $ | 11.32 | ||
Institutional Shares | $ | 11.35 | ||
Cost of securities of unaffiliated issuers held | $ | 695,937 | ||
Cost of securities of affiliated issuers held | $ | 57,424 | ||
Cost of foreign currency | $ | - | (1) |
(1) | Amount rounds to less than $1. |
The accompanying notes are an integral part of the financial statements.
59
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012
Dollar values in thousands
GLOBAL EQUITY | GLOBAL OPPORTUNITIES | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 235 | $ | 2,174 | ||||
Interest | - | (2) | 2 | |||||
|
|
|
| |||||
Total investment income | 235 | 2,176 | ||||||
EXPENSES: | ||||||||
Advisory fees | 121 | 2,058 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 87 | 468 | ||||||
Institutional Shares | 15 | |||||||
Shareholder communications | ||||||||
Investor Shares | 8 | 28 | ||||||
Institutional Shares | 9 | |||||||
Custodian fees | 27 | 74 | ||||||
Accounting fees | 46 | 59 | ||||||
Professional fees | 43 | 94 | ||||||
Registration fees | ||||||||
Investor Shares | 32 | 43 | ||||||
Institutional Shares | 28 | |||||||
Directors’ fees | 5 | 7 | ||||||
Other operating expenses | 2 | 9 | ||||||
|
|
|
| |||||
Total operating expenses | 371 | 2,892 | ||||||
Less amounts waived or paid by the Adviser | (189 | ) | - | |||||
|
|
|
| |||||
Net expenses | 182 | 2,892 | ||||||
|
|
|
| |||||
Net investment income (loss) | 53 | (716 | ) | |||||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments(1) | 684 | 16,957 | ||||||
Foreign currency related transactions | (1 | ) | (88 | ) | ||||
|
|
|
| |||||
683 | 16,869 | |||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments(1) | 2,936 | 36,773 | ||||||
Foreign currency related transactions | (2 | ) | (32 | ) | ||||
|
|
|
| |||||
2,934 | 36,741 | |||||||
|
|
|
| |||||
Net gain on investments and foreign currency related transactions | 3,617 | 53,610 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 3,670 | $ | 52,894 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Net of foreign taxes on realized gains | Net of foreign taxes on unrealized gains | ||||||||||
Global Equity | $ | 16 | $ | - | $ | - | ||||||||
Global Opportunities | 116 | 37 | 16 |
(2) | Amount rounds to less than $1. |
The accompanying notes are an integral part of the financial statements.
60
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
GLOBAL VALUE | INTERNATIONAL | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 2,756 | $ | 222,546 | ||||
Interest | 1 | 37 | ||||||
|
|
|
| |||||
Total investment income | 2,757 | 222,583 | ||||||
EXPENSES: | ||||||||
Advisory fees | 1,383 | 82,585 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 401 | 13,495 | ||||||
Institutional Shares | 6 | 24 | ||||||
Shareholder communications | ||||||||
Investor Shares | 31 | 651 | ||||||
Institutional Shares | 1 | 37 | ||||||
Custodian fees | 63 | 2,972 | ||||||
Accounting fees | 56 | 69 | ||||||
Professional fees | 64 | 429 | ||||||
Registration fees | ||||||||
Investor Shares | 71 | 142 | ||||||
Institutional Shares | 15 | 57 | ||||||
Directors’ fees | 5 | 284 | ||||||
Other operating expenses | 3 | 199 | ||||||
|
|
|
| |||||
Total operating expenses | 2,099 | 100,944 | ||||||
Less amounts waived or paid by the Adviser | (25 | ) | - | |||||
|
|
|
| |||||
Net expenses | 2,074 | 100,944 | ||||||
|
|
|
| |||||
Net investment income | 683 | 121,639 | ||||||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments(1) | 488 | 179,992 | ||||||
Foreign currency related transactions | 5 | (3,404 | ) | |||||
|
|
|
| |||||
493 | 176,588 | |||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 26,767 | 1,971,511 | ||||||
Foreign currency related transactions | (77 | ) | 641 | |||||
|
|
|
| |||||
26,690 | 1,972,152 | |||||||
|
|
|
| |||||
Net gain on investments and foreign currency related transactions | 27,183 | 2,148,740 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 27,866 | $ | 2,270,379 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized loss on investments from affiliated issuers | |||||||
Global Value | $ | 92 | $ | (14 | ) | |||||
International | 18,582 | - |
The accompanying notes are an integral part of the financial statements.
61
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
INTERNATIONAL SMALL CAP | INTERNATIONAL VALUE | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 17,106 | $ | 108,257 | ||||
Dividends, from affiliated issuers(1) | - | 9,765 | ||||||
Interest | 3 | 43 | ||||||
|
|
|
| |||||
Total investment income | 17,109 | 118,065 | ||||||
EXPENSES: | ||||||||
Advisory fees | 7,705 | 48,879 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 953 | 7,103 | ||||||
Institutional Shares | 23 | |||||||
Shareholder communications | ||||||||
Investor Shares | 46 | 490 | ||||||
Institutional Shares | 23 | |||||||
Custodian fees | 299 | 1,209 | ||||||
Accounting fees | 50 | 69 | ||||||
Professional fees | 113 | 278 | ||||||
Registration fees | ||||||||
Investor Shares | 69 | 209 | ||||||
Institutional Shares | 73 | |||||||
Directors’ fees | 20 | 165 | ||||||
Other operating expenses | 18 | 115 | ||||||
|
|
|
| |||||
Total operating expenses | 9,273 | 58,636 | ||||||
|
|
|
| |||||
Net investment income | 7,836 | 59,429 | ||||||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments(1) | 14,946 | 21,963 | ||||||
Foreign currency related transactions | (122 | ) | 10,327 | |||||
|
|
|
| |||||
14,824 | 32,290 | |||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 121,874 | 990,554 | ||||||
Foreign currency related transactions | 14 | (7,179 | ) | |||||
|
|
|
| |||||
121,888 | 983,375 | |||||||
|
|
|
| |||||
Net gain on investments and foreign currency related transactions | 136,712 | 1,015,667 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 144,548 | $ | 1,075,094 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Net of foreign taxes withheld on dividends from affiliated issuers | Including net realized gain on investments from affiliated issuers | ||||||||||
International Small Cap | $ | 1,129 | $ | - | $ | - | ||||||||
International Value | 7,560 | 359 | 994 |
The accompanying notes are an integral part of the financial statements.
62
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
MID CAP | MID CAP VALUE | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 26,988 | $ | 122,291 | ||||
Dividends, from affiliated issuers(1) | 227 | 20,350 | ||||||
Interest | 31 | 39 | ||||||
|
|
|
| |||||
Total investment income | 27,246 | 142,680 | ||||||
EXPENSES: | ||||||||
Advisory fees | 57,114 | 70,994 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 13,134 | 17,515 | ||||||
Institutional Shares | 23 | 11 | ||||||
Shareholder communications | ||||||||
Investor Shares | 661 | 1,380 | ||||||
Institutional Shares | 26 | 9 | ||||||
Custodian fees | 200 | 147 | ||||||
Accounting fees | 63 | 51 | ||||||
Professional fees | 259 | 353 | ||||||
Registration fees | ||||||||
Investor Shares | 134 | 276 | ||||||
Institutional Shares | 167 | 33 | ||||||
Directors’ fees | 191 | 242 | ||||||
Other operating expenses | 143 | 173 | ||||||
|
|
|
| |||||
Total operating expenses | 72,115 | 91,184 | ||||||
|
|
|
| |||||
Net investment income (loss) | (44,869 | ) | 51,496 | |||||
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS: | ||||||||
Net realized gain on: | ||||||||
Investments(1) | 323,384 | 469,421 | ||||||
|
|
|
| |||||
323,384 | 469,421 | |||||||
Net increase in unrealized appreciation or depreciation on: | ||||||||
Investments | 963,741 | 808,666 | ||||||
|
|
|
| |||||
963,741 | 808,666 | |||||||
|
|
|
| |||||
Net gain on investments | 1,287,125 | 1,278,087 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 1,242,256 | $ | 1,329,583 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized gain on investments from affiliated issuers | |||||||
Mid Cap | $ | 78 | $ | 13,853 | ||||||
Mid Cap Value | - | 15,545 |
The accompanying notes are an integral part of the financial statements.
63
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
SMALL CAP | SMALL CAP VALUE | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 2,486 | $ | 32,516 | ||||
Dividends, from affiliated issuers(1) | - | 10,993 | ||||||
Interest | 3 | 10 | ||||||
|
|
|
| |||||
Total investment income | 2,489 | 43,519 | ||||||
EXPENSES: | ||||||||
Advisory fees | 4,865 | 26,841 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 973 | 6,340 | ||||||
Institutional Shares | 8 | 11 | ||||||
Shareholder communications | ||||||||
Investor Shares | 98 | 585 | ||||||
Institutional Shares | 1 | 7 | ||||||
Custodian fees | 48 | 73 | ||||||
Accounting fees | 51 | 52 | ||||||
Professional fees | 63 | 162 | ||||||
Registration fees | ||||||||
Investor Shares | 110 | 69 | ||||||
Institutional Shares | 21 | 18 | ||||||
Directors’ fees | 14 | 93 | ||||||
Other operating expenses | 11 | 73 | ||||||
|
|
|
| |||||
Total operating expenses | 6,263 | 34,324 | ||||||
|
|
|
| |||||
Net investment income (loss) | (3,774 | ) | 9,195 | |||||
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS: | ||||||||
Net realized gain on: | ||||||||
Investments(1) | 24,005 | 51,140 | ||||||
|
|
|
| |||||
24,005 | 51,140 | |||||||
Net increase in unrealized appreciation or depreciation on: | ||||||||
Investments | 95,540 | 358,959 | ||||||
|
|
|
| |||||
95,540 | 358,959 | |||||||
|
|
|
| |||||
Net gain on investments | 119,545 | 410,099 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 115,771 | $ | 419,294 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized gain (loss) on investments from affiliated issuers | |||||||
Small Cap | $ | 5 | $ | 1,624 | ||||||
Small Cap Value | - | (50,502 | ) |
The accompanying notes are an integral part of the financial statements.
64
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
VALUE | ||||
INVESTMENT INCOME: | ||||
Dividends, from unaffiliated issuers(1) | $ | 12,306 | ||
Interest | 12 | |||
|
| |||
Total investment income | 12,318 | |||
EXPENSES: | ||||
Advisory fees | 4,896 | |||
Transfer agent fees | ||||
Investor Shares | 1,636 | |||
Institutional Shares | 14 | |||
Shareholder communications | ||||
Investor Shares | 102 | |||
Institutional Shares | 9 | |||
Custodian fees | 38 | |||
Accounting fees | 58 | |||
Professional fees | 72 | |||
Registration fees | ||||
Investor Shares | 104 | |||
Institutional Shares | 20 | |||
Directors’ fees | 21 | |||
Other operating expenses | 15 | |||
|
| |||
Total operating expenses | 6,985 | |||
|
| |||
Net investment income | 5,333 | |||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gain (loss) on: | ||||
Investments(1) | 20,180 | |||
Foreign currency related transactions | (37 | ) | ||
|
| |||
20,143 | ||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||
Investments | 108,695 | |||
Foreign currency related transactions | (3 | ) | ||
|
| |||
108,692 | ||||
|
| |||
Net gain on investments and foreign currency related transactions | 128,835 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 134,168 | ||
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized loss on investments from affiliated issuers | |||||||
Value | $ | 70 | $ | (298 | ) |
The accompanying notes are an integral part of the financial statements.
65
ARTISAN FUNDS
Statements of Changes in Net Assets
Dollar values in thousands
GLOBAL EQUITY | GLOBAL OPPORTUNITIES | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | 53 | $ | 36 | $ | (716 | ) | $ | (999 | ) | ||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | 684 | 582 | 16,957 | 2,181 | ||||||||||||
Foreign currency related transactions | (1 | ) | (7 | ) | (88 | ) | (432 | ) | ||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 2,936 | (962 | ) | 36,773 | (14,114 | ) | ||||||||||
Foreign currency related transactions | (2 | ) | 6 | (32 | ) | (9 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 3,670 | (345 | ) | 52,894 | (13,373 | ) | ||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | (28 | ) | (70 | ) | - | - | ||||||||||
Institutional Shares | - | - | ||||||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (191 | ) | (88 | ) | (1,240 | ) | (1,034 | ) | ||||||||
Institutional Shares | (371 | ) | - | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (219 | ) | (158 | ) | (1,611 | ) | (1,034 | ) | ||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase in net assets resulting from fund share activities | 1,179 | 942 | 105,263 | 97,676 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 4,630 | 439 | 156,546 | 83,269 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 10,908 | 10,469 | 155,727 | 72,458 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 15,538 | $ | 10,908 | $ | 312,273 | $ | 155,727 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 47 | $ | 27 | $ | (531 | ) | $ | (412 | ) | ||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
66
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
GLOBAL VALUE | INTERNATIONAL | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 683 | $ | 304 | $ | 121,639 | $ | 121,485 | ||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | 488 | 1,882 | 179,992 | 994,852 | ||||||||||||
Foreign currency related transactions | 5 | (140 | ) | (3,404 | ) | (79 | ) | |||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 26,767 | (5,271 | ) | 1,971,511 | (1,875,691 | ) | ||||||||||
Foreign currency related transactions | (77 | ) | 6 | 641 | (1,399 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 27,866 | (3,219 | ) | 2,270,379 | (760,832 | ) | ||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | - | (313 | ) | (87,816 | ) | (61,274 | ) | |||||||||
Institutional Shares | - | - | (33,126 | ) | (26,489 | ) | ||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (1,393 | ) | - | - | - | |||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (1,393 | ) | (313 | ) | (120,942 | ) | (87,763 | ) | ||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 173,767 | 34,444 | (325,555 | ) | (973,666 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | 200,240 | 30,912 | 1,823,882 | (1,822,261 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 65,666 | 34,754 | 7,826,408 | 9,648,669 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 265,906 | $ | 65,666 | $ | 9,650,290 | $ | 7,826,408 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 321 | $ | (325 | ) | $ | 118,396 | $ | 121,055 | |||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
67
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
INTERNATIONAL SMALL CAP | INTERNATIONAL VALUE | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 7,836 | $ | 2,539 | $ | 59,429 | $ | 51,313 | ||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | 14,946 | 74,403 | 21,963 | 140,973 | ||||||||||||
Foreign currency related transactions | (122 | ) | (115 | ) | 10,327 | (18,918 | ) | |||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 121,874 | (138,137 | ) | 990,554 | (483,261 | ) | ||||||||||
Foreign currency related transactions | 14 | (65 | ) | (7,179 | ) | 1,338 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 144,548 | (61,375 | ) | 1,075,094 | (308,555 | ) | ||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | (2,354 | ) | (457 | ) | (1,955 | ) | (39,445 | ) | ||||||||
Institutional Shares | - | - | (1,195 | ) | (12,501 | ) | ||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | - | - | (9,181 | ) | - | |||||||||||
Institutional Shares | - | - | (3,059 | ) | - | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (2,354 | ) | (457 | ) | (15,390 | ) | (51,946 | ) | ||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 19,129 | (180,835 | ) | 1,304,049 | 1,298,269 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | 161,323 | (242,667 | ) | 2,363,753 | 937,768 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 554,726 | 797,393 | 4,275,482 | 3,337,714 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 716,049 | $ | 554,726 | $ | 6,639,235 | $ | 4,275,482 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 7,727 | $ | 2,367 | $ | 50,909 | $ | (12,850 | ) | |||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
68
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
MID CAP | MID CAP VALUE | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (44,869 | ) | $ | (40,985 | ) | $ | 51,496 | $ | 45,496 | ||||||
Net realized gain on investments | 323,384 | 665,237 | 469,421 | 585,460 | ||||||||||||
Net increase (decrease) in unrealized appreciation or depreciation | 963,741 | (348,059 | ) | 808,666 | (531,683 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 1,242,256 | 276,193 | 1,329,583 | 99,273 | ||||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | - | - | (43,082 | ) | (48,963 | ) | ||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | - | - | (499,737 | ) | (97,741 | ) | ||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | - | - | (542,819 | ) | (146,704 | ) | ||||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 464,933 | (143,118 | ) | 1,042,313 | 508,268 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 1,707,189 | 133,075 | 1,829,077 | 460,837 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 5,010,756 | 4,877,681 | 6,200,464 | 5,739,627 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 6,717,945 | $ | 5,010,756 | $ | 8,029,541 | $ | 6,200,464 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | (37,201 | ) | $ | - | $ | 28,090 | $ | 24,143 | |||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
69
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
SMALL CAP | SMALL CAP VALUE | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (3,774 | ) | $ | (2,411 | ) | $ | 9,195 | $ | 1,882 | ||||||
Net realized gain on investments | 24,005 | 81,909 | 51,140 | 317,544 | ||||||||||||
Net increase (decrease) in unrealized appreciation or depreciation | 95,540 | (48,672 | ) | 358,959 | (422,880 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 115,771 | 30,826 | 419,294 | (103,454 | ) | |||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | - | - | (1,078 | ) | (2,837 | ) | ||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | - | - | (238,253 | ) | - | |||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | - | - | (239,331 | ) | (2,837 | ) | ||||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 284,422 | (26,856 | ) | (132,156 | ) | 23,138 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | 400,193 | 3,970 | 47,807 | (83,153 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 326,700 | 322,730 | 2,607,263 | 2,690,416 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 726,893 | $ | 326,700 | $ | 2,655,070 | $ | 2,607,263 | ||||||||
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|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | (3,241 | ) | $ | - | $ | 7,607 | $ | 1,066 | |||||||
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|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
70
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
VALUE | ||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 5,333 | $ | 3,743 | ||||
Net realized gain (loss) on: | ||||||||
Investments | 20,180 | 32,265 | ||||||
Foreign currency related transactions | (37 | ) | (41 | ) | ||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 108,695 | (42,872 | ) | |||||
Foreign currency related transactions | (3 | ) | (1 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 134,168 | (6,906 | ) | |||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||
Net investment income: | ||||||||
Investor Shares | (3,915 | ) | (2,455 | ) | ||||
Institutional Shares | (682 | ) | - | |||||
|
|
|
| |||||
Total distributions paid to shareholders | (4,597 | ) | (2,455 | ) | ||||
FUND SHARE ACTIVITIES: | ||||||||
Net increase in net assets resulting from fund share activities | 243,747 | 205,150 | ||||||
|
|
|
| |||||
Total increase in net assets | 373,318 | 195,789 | ||||||
|
|
|
| |||||
Net assets, beginning of period | 462,162 | 266,373 | ||||||
|
|
|
| |||||
Net assets, end of period | $ | 835,480 | $ | 462,162 | ||||
|
|
|
| |||||
Accumulated undistributed net investment income | $ | 3,244 | $ | 2,606 | ||||
|
|
|
|
The accompanying notes are an integral part of the financial statements.
71
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period
The financial highlights tables are intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of a Fund’s operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions).
ARTISAN GLOBAL EQUITY FUND | ||||||||||||
Investor Shares | ||||||||||||
Year or Period Ended | ||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010(1) | ||||||||||
Net Asset Value Beginning of Period | $ | 9.83 | $ | 10.23 | $ | 10.00 | ||||||
Net Investment Income (Loss)(2) | 0.05 | (0.03 | ) | 0.03 | ||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 3.38 | (0.23 | ) | 0.20 | ||||||||
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| |||||||
Total Income (Loss) from Investment Operations | 3.43 | (0.26 | ) | 0.23 | ||||||||
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|
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| |||||||
Dividends from Net Investment Income | (0.03 | ) | (0.06 | ) | - | |||||||
Distributions from Net Realized Gains | (0.18 | ) | (0.08 | ) | - | |||||||
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|
|
| |||||||
Total Distributions | (0.21 | ) | (0.14 | ) | - | |||||||
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| |||||||
Net Asset Value End of Period | $ | 13.05 | $ | 9.83 | $ | 10.23 | ||||||
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|
|
|
|
| |||||||
Total Return(3) | 35.43 | % | (2.66 | )% | 2.30 | % | ||||||
Net Assets End of Period (millions) | $ | 15.5 | $ | 10.9 | $ | 10.5 | ||||||
Ratio of Expenses to Average Net Assets(4)(5) | 1.50 | % | 1.50 | % | 1.50 | % | ||||||
Ratio of Net Investment Income to Average Net Assets(4)(5) | 0.43 | % | 0.28 | % | 0.69 | % | ||||||
Portfolio Turnover Rate(3) | 98.03 | % | 150.01 | % | 60.81 | % |
(1) | For the period from commencement of operations March 29, 2010 through September 30, 2010. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
(5) | The ratios of expenses to average net assets and net investment income (loss) to average net assets exclude expenses waived or paid by Artisan Partners Limited Partnership (the “Adviser”). Absent expenses waived or paid by the Adviser, the ratios of expenses to average net assets and net investment income (loss) to average net assets would have been as follows: |
Year or Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Loss to Average Net Assets | ||||||
9/30/2012 | 3.05 | % | (1.12 | )% | ||||
9/30/2011 | 3.12 | % | (1.34 | )% | ||||
9/30/2010 | 3.66 | % | (1.47 | )% |
The accompanying notes are an integral part of the financial statements.
72
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN GLOBAL OPPORTUNITIES FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year or Period Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008(1) | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 10.90 | $ | 10.99 | $ | 9.14 | $ | 9.32 | $ | 10.00 | ||||||||||
Net Investment Income (Loss)(2) | (0.06 | ) | (0.09 | ) | (0.09 | ) | (0.05 | ) | -(3) | |||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 3.54 | 0.13 | 1.94 | (0.13 | ) | (0.68 | ) | |||||||||||||
|
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|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 3.48 | 0.04 | 1.85 | (0.18 | ) | (0.68 | ) | |||||||||||||
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| |||||||||||
Dividends from Net Investment Income | - | - | - | - | - | |||||||||||||||
Distributions from Net Realized Gains | (0.11 | ) | (0.13 | ) | - | - | - | |||||||||||||
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|
|
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|
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| |||||||||||
Total Distributions | (0.11 | ) | (0.13 | ) | - | - | - | |||||||||||||
|
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|
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|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 14.27 | $ | 10.90 | $ | 10.99 | $ | 9.14 | $ | 9.32 | ||||||||||
|
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|
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|
|
|
| |||||||||||
Total Return(4) | 32.37 | % | 0.14 | % | 20.24 | % | (1.93 | )% | (6.80 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 228.1 | $ | 142.8 | $ | 72.5 | $ | 45.6 | $ | 5.7 | ||||||||||
Ratio of Expenses to Average Net Assets(5)(6) | 1.34 | % | 1.40 | % | 1.50 | % | 1.47 | % | 1.50 | % | ||||||||||
Ratio of Net Investment Loss to Average Net Assets(5)(6) | (0.46 | )% | (0.73 | )% | (0.91 | )% | (0.59 | )% | (0.69 | )% | ||||||||||
Portfolio Turnover Rate(4) | 43.30 | % | 76.18 | % | 79.99 | % | 101.01 | % | 3.05 | % |
(1) | For the period from commencement of operations September 22, 2008 through September 30, 2008. |
(2) | Computed based on average shares outstanding. |
(3) | Amount is between $0.005 and $(0.005) per share. |
(4) | Periods less than twelve months (where applicable) are not annualized. |
(5) | Periods less than twelve months (where applicable) are annualized. |
(6) | The ratios of expenses to average net assets and net investment loss to average net assets exclude expenses waived or paid by the Adviser. Absent expenses waived or paid by the Adviser, the ratios of expenses to average net assets and net investment loss to average net assets would have been as follows: |
Year or Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | ||||||||||||
9/30/2010 | 1.54 | % | (0.95 | )% | ||||||||||
9/30/2009 | 2.24 | % | (1.36 | )% | ||||||||||
9/30/2008 | 48.41 | % | (47.60 | )% |
The accompanying notes are an integral part of the financial statements.
73
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN GLOBAL VALUE FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year or Period Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008(1) | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 9.28 | $ | 9.37 | $ | 8.64 | $ | 8.32 | $ | 10.00 | ||||||||||
Net Investment Income(2) | 0.05 | 0.06 | 0.06 | 0.08 | 0.10 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 2.42 | (0.07 | ) | 0.87 | 0.29 | (1.78 | ) | |||||||||||||
|
|
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|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 2.47 | (0.01 | ) | 0.93 | 0.37 | (1.68 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | - | (0.08 | ) | (0.20 | ) | (0.05 | ) | - | ||||||||||||
Distributions from Net Realized Gains | (0.17 | ) | - | - | - | - | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.17 | ) | (0.08 | ) | (0.20 | ) | (0.05 | ) | - | |||||||||||
|
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|
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|
|
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| |||||||||||
Net Asset Value End of Period | $ | 11.58 | $ | 9.28 | $ | 9.37 | $ | 8.64 | $ | 8.32 | ||||||||||
|
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| |||||||||||
Total Return(3) | 26.90 | % | (0.23 | )% | 10.98 | % | 4.65 | % | (16.80 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 217.1 | $ | 65.7 | $ | 34.8 | $ | 28.6 | $9.6 | |||||||||||
Ratio of Expenses to Average Net Assets(4)(5) | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.44 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets(4)(5) | 0.50 | % | 0.56 | % | 0.71 | % | 1.11 | % | 1.39 | % | ||||||||||
Portfolio Turnover Rate(3) | 22.34 | % | 32.32 | % | 34.52 | % | 56.57 | % | 42.27 | % |
(1) | For the period from commencement of operations December 10, 2007 through September 30, 2008. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
(5) | The ratios of expenses to average net assets and net investment income (loss) to average net assets exclude expenses waived or paid by the Adviser. Absent expenses waived or paid by the Adviser, the ratios of expenses to average net assets and net investment income (loss) to average net assets would have been as follows: |
Year or Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | ||||||||||
9/30/2012 | 1.51 | % | 0.49 | % | ||||||||
9/30/2011 | 1.72 | % | 0.34 | % | ||||||||
9/30/2010 | 1.96 | % | 0.26 | % | ||||||||
9/30/2009 | 2.16 | % | 0.45 | % | ||||||||
9/30/2008 | 3.53 | % | (0.70 | )% |
The accompanying notes are an integral part of the financial statements.
74
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN INTERNATIONAL FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 18.37 | $ | 20.57 | $ | 20.16 | $ | 20.34 | $ | 33.75 | ||||||||||
Net Investment Income(1) | 0.28 | 0.26 | 0.17 | 0.23 | 0.36 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 5.17 | (2.28 | ) | 0.49 | 0.48 | (9.10 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 5.45 | (2.02 | ) | 0.66 | 0.71 | (8.74 | ) | |||||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.28 | ) | (0.18 | ) | (0.25 | ) | (0.19 | ) | (0.20 | ) | ||||||||||
Distributions from Net Realized Gains | - | - | - | (0.70 | ) | (4.47 | ) | |||||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.28 | ) | (0.18 | ) | (0.25 | ) | (0.89 | ) | (4.67 | ) | ||||||||||
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| |||||||||||
Net Asset Value End of Period | $ | 23.54 | $ | 18.37 | $ | 20.57 | $ | 20.16 | $ | 20.34 | ||||||||||
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| |||||||||||
Total Return | 30.05 | % | (9.95 | )% | 3.27 | % | 5.00 | % | (29.99 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 6,877.6 | $ | 5,837.1 | $ | 7,294.7 | $ | 7,715.1 | $ | 8,760.0 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.19 | % | 1.22 | % | 1.23 | % | 1.22 | % | 1.22 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.32 | % | 1.18 | % | 0.86 | % | 1.47 | % | 1.28 | % | ||||||||||
Portfolio Turnover Rate | 55.39 | % | 70.36 | % | 70.51 | % | 82.38 | % | 54.42 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
75
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN INTERNATIONAL SMALL CAP FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 16.44 | $ | 18.63 | $ | 16.66 | $ | 14.28 | $ | 26.96 | ||||||||||
Net Investment Income(1) | 0.24 | 0.07 | 0.02 | 0.12 | 0.21 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 4.14 | (2.25 | ) | 2.07 | 2.62 | (9.26 | ) | |||||||||||||
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|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 4.38 | (2.18 | ) | 2.09 | 2.74 | (9.05 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.07 | ) | (0.01 | ) | (0.12 | ) | (0.16 | ) | (0.20 | ) | ||||||||||
Distributions from Net Realized Gains | - | - | - | (0.20 | ) | (3.43 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.07 | ) | (0.01 | ) | (0.12 | ) | (0.36 | ) | (3.63 | ) | ||||||||||
|
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|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 20.75 | $ | 16.44 | $ | 18.63 | $ | 16.66 | $ | 14.28 | ||||||||||
|
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|
|
|
|
|
|
| |||||||||||
Total Return | 26.77 | % | (11.70 | )% | 12.60 | % | 20.59 | % | (38.44 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 716.0 | $ | 554.7 | $ | 797.4 | $ | 695.8 | $ | 732.4 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.51 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.27 | % | 0.35 | % | 0.14 | % | 0.99 | % | 0.96 | % | ||||||||||
Portfolio Turnover Rate | 42.01 | % | 44.76 | % | 73.90 | % | 58.42 | % | 42.80 | % |
(1) | Computed based on average shares outstanding. |
��
The accompanying notes are an integral part of the financial statements.
76
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN INTERNATIONAL VALUE FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 23.44 | $ | 24.74 | $ | 22.83 | $ | 21.20 | $ | 28.49 | ||||||||||
Net Investment Income(1) | 0.29 | 0.30 | 0.31 | 0.17 | 0.45 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 5.07 | (1.25 | ) | 2.02 | 1.67 | (5.56 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 5.36 | (0.95 | ) | 2.33 | 1.84 | (5.11 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.01 | ) | (0.35 | ) | (0.42 | ) | (0.21 | ) | (0.51 | ) | ||||||||||
Distributions from Net Realized Gains | (0.07 | ) | - | - | - | (1.67 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.08 | ) | (0.35 | ) | (0.42 | ) | (0.21 | ) | (2.18 | ) | ||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 28.72 | $ | 23.44 | $ | 24.74 | $ | 22.83 | $ | 21.20 | ||||||||||
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|
|
| |||||||||||
Total Return | 22.94 | % | (4.01 | )% | 10.39 | % | 8.95 | % | (19.10 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 5,081.7 | $ | 3,232.6 | $ | 2,688.2 | $ | 1,739.5 | $ | 1,029.4 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.17 | % | 1.18 | % | 1.21 | % | 1.25 | % | 1.23 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.08 | % | 1.10 | % | 1.34 | % | 0.95 | % | 1.83 | % | ||||||||||
Portfolio Turnover Rate | 20.42 | % | 30.90 | % | 21.02 | % | 55.49 | % | 44.72 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
77
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN MID CAP FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 31.14 | $ | 29.55 | $ | 24.28 | $ | 24.08 | $ | 37.06 | ||||||||||
Net Investment Loss(1) | (0.28 | ) | (0.26 | ) | (0.20 | ) | (0.11 | ) | (0.22 | ) | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 7.94 | 1.85 | 5.47 | 0.59 | (6.86 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 7.66 | 1.59 | 5.27 | 0.48 | (7.08 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions from Net Realized Gains | - | - | - | (0.28 | ) | (5.90 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | - | - | - | (0.28 | ) | (5.90 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 38.80 | $ | 31.14 | $ | 29.55 | $ | 24.28 | $ | 24.08 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 24.63 | % | 5.38 | % | 21.71 | % | 2.47 | % | (22.47 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 5,115.8 | $ | 4,500.8 | $ | 4,375.2 | $ | 3,688.6 | $ | 3,732.3 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.22 | % | 1.24 | % | 1.23 | % | 1.23 | % | 1.24 | % | ||||||||||
Ratio of Net Investment Loss to Average Net Assets | (0.78 | )% | (0.75 | )% | (0.77 | )% | (0.57 | )% | (0.75 | )% | ||||||||||
Portfolio Turnover Rate | 46.21 | % | 62.87 | % | 63.46 | % | 68.39 | % | 79.76 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
78
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN MID CAP VALUE FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 18.88 | $ | 18.86 | $ | 16.85 | $ | 17.01 | $ | 21.70 | ||||||||||
Net Investment Income(1) | 0.14 | 0.14 | 0.11 | 0.08 | 0.03 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 3.72 | 0.36 | 1.97 | (0.10 | ) | (2.31 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 3.86 | 0.50 | 2.08 | (0.02 | ) | (2.28 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.13 | ) | (0.16 | ) | (0.07 | ) | (0.02 | ) | (0.08 | ) | ||||||||||
Distributions from Net Realized Gains | (1.49 | ) | (0.32 | ) | - | (0.12 | ) | (2.33 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (1.62 | ) | (0.48 | ) | (0.07 | ) | (0.14 | ) | (2.41 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 21.12 | $ | 18.88 | $ | 18.86 | $ | 16.85 | $ | 17.01 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 21.35 | % | 2.51 | % | 12.35 | % | 0.21 | % | (11.16 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 7,753.8 | $ | 6,200.5 | $ | 5,739.6 | $ | 4,628.0 | $ | 3,231.5 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.20 | % | 1.20 | % | 1.21 | % | 1.21 | % | 1.21 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.67 | % | 0.68 | % | 0.60 | % | 0.62 | % | 0.18 | % | ||||||||||
Portfolio Turnover Rate | 27.86 | % | 31.85 | % | 37.71 | % | 53.84 | % | 69.77 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
79
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN SMALL CAP FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 16.01 | $ | 14.40 | $ | 12.88 | $ | 13.13 | $ | 19.89 | ||||||||||
Net Investment Loss(1) | (0.15 | ) | (0.13 | ) | (0.09 | ) | (0.05 | ) | (0.09 | ) | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 5.04 | 1.74 | 1.61 | (0.18 | ) | (4.82 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 4.89 | 1.61 | 1.52 | (0.23 | ) | (4.91 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions from Net Realized Gains | - | - | - | - | (1.85 | ) | ||||||||||||||
Distributions from Tax Return of Capital | - | - | - | (0.02 | ) | - | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | - | - | - | (0.02 | ) | (1.85 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 20.90 | $ | 16.01 | $ | 14.40 | $ | 12.88 | $ | 13.13 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 30.54 | % | 11.18 | % | 11.80 | % | (1.73 | )% | (26.64 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 676.1 | $ | 326.7 | $ | 322.7 | $ | 437.0 | $ | 587.1 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.28 | % | 1.29 | % | 1.31 | % | 1.26 | % | 1.22 | % | ||||||||||
Ratio of Net Investment Loss to Average Net Assets | (0.77 | )% | (0.73 | )% | (0.67 | )% | (0.47 | )% | (0.58 | )% | ||||||||||
Portfolio Turnover Rate | 69.56 | % | 80.26 | % | 62.67 | % | 80.51 | % | 96.90 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
80
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN SMALL CAP VALUE FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 14.30 | $ | 14.85 | $ | 13.56 | $ | 13.93 | $ | 18.13 | ||||||||||
Net Investment Income (Loss)(1) | 0.05 | 0.01 | 0.02 | 0.02 | (0.02 | ) | ||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 2.25 | (0.54 | ) | 1.29 | (0.07 | ) | (1.09 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 2.30 | (0.53 | ) | 1.31 | (0.05 | ) | (1.11 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.01 | ) | (0.02 | ) | (0.02 | ) | - | - | ||||||||||||
Distributions from Net Realized Gains | (1.35 | ) | - | - | (0.32 | ) | (3.09 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (1.36 | ) | (0.02 | ) | (0.02 | ) | (0.32 | ) | (3.09 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 15.24 | $ | 14.30 | $ | 14.85 | $ | 13.56 | $ | 13.93 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 16.54 | % | (3.61 | )% | 9.64 | % | 0.46 | % | (5.77 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 2,348.8 | $ | 2,607.3 | $ | 2,690.4 | $ | 2,156.5 | $ | 1,902.1 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.22 | % | 1.20 | % | 1.22 | % | 1.22 | % | 1.20 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.31 | % | 0.06 | % | 0.11 | % | 0.20 | % | (0.16 | )% | ||||||||||
Portfolio Turnover Rate | 28.17 | % | 47.45 | % | 37.14 | % | 63.05 | % | 75.49 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
81
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN VALUE FUND | ||||||||||||||||||||
Investor Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 9.11 | $ | 8.91 | $ | 8.12 | $ | 8.58 | $ | 12.22 | ||||||||||
Net Investment Income(1) | 0.08 | 0.09 | 0.07 | 0.06 | 0.08 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 2.21 | 0.19 | 0.76 | (0.44 | ) | (2.70 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 2.29 | 0.28 | 0.83 | (0.38 | ) | (2.62 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.08 | ) | (0.08 | ) | (0.04 | ) | (0.08 | ) | (0.14 | ) | ||||||||||
Distributions from Net Realized Gains | - | - | - | - | (0.88 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.08 | ) | (0.08 | ) | (0.04 | ) | (0.08 | ) | (1.02 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 11.32 | $ | 9.11 | $ | 8.91 | $ | 8.12 | $ | 8.58 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 25.42 | % | 3.10 | % | 10.19 | % | (4.10 | )% | (22.88 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 677.8 | $ | 408.6 | $ | 266.4 | $ | 181.1 | $ | 230.3 | ||||||||||
Ratio of Expenses to Average Net Assets | 1.06 | % | 1.10 | % | 1.27 | % | 1.32 | % | 1.23 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.74 | % | 0.95 | % | 0.86 | % | 0.84 | % | 0.77 | % | ||||||||||
Portfolio Turnover Rate | 66.13 | % | 78.36 | % | 70.69 | % | 85.44 | % | 99.24 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
82
ARTISAN FUNDS
Notes to Financial Statements – September 30, 2012
(1) | Organization: |
Artisan Partners Funds, Inc. (“Artisan Funds”) was incorporated on January 5, 1995, as a Wisconsin corporation and is registered under the Investment Company Act of 1940, as amended. Artisan Funds is a series comprised of twelve open-end, diversified mutual funds. The following funds (each a “Fund” and collectively the “Funds”) are covered by this report:
Fund Name | Investor Share Inception Date | Institutional Share Inception Date | ||||||
Artisan Global Equity Fund (“Global Equity Fund” or “Global Equity”) | March 29, 2010 | N/A | ||||||
Artisan Global Opportunities Fund (“Global Opportunities Fund” or “Global Opportunities”) | September 22, 2008 | July 26, 2011 | ||||||
Artisan Global Value Fund (“Global Value Fund” or “Global Value”) | December 10, 2007 | July 17, 2012 | ||||||
Artisan International Fund (“International Fund” or “International”) | December 28, 1995 | July 1, 1997 | ||||||
Artisan International Small Cap Fund (“International Small Cap Fund” or “International Small Cap”) | December 21, 2001 | N/A | ||||||
Artisan International Value Fund (“International Value Fund” or “International Value”) | September 23, 2002 | October 1, 2006 | ||||||
Artisan Mid Cap Fund (“Mid Cap Fund” or “Mid Cap”) | June 27, 1997 | July 1, 2000 | ||||||
Artisan Mid Cap Value Fund (“Mid Cap Value Fund” or “Mid Cap Value”) | March 28, 2001 | February 1, 2012 | ||||||
Artisan Small Cap Fund (“Small Cap Fund” or “Small Cap”) | March 28, 1995 | May 7, 2012 | ||||||
Artisan Small Cap Value Fund (“Small Cap Value Fund” or “Small Cap Value”) | September 29, 1997 | February 1, 2012 | ||||||
Artisan Value Fund (“Value Fund” or “Value”) | March 27, 2006 | July 26, 2011 |
Each Fund’s investment objective is to seek long-term capital growth. Each Fund has offered shares of capital stock of the classes designated Investor Shares and Institutional Shares, as applicable, since the inception dates listed above. Institutional Shares are sold to institutional investors meeting certain minimum investment requirements and are presented in a separate report.
Each class of shares has equal rights with respect to portfolio assets and voting privileges. Each class has exclusive voting rights with respect to any matters involving only that class.
Income, expenses not specific to a particular class and realized and unrealized gains and losses were allocated daily to each class of shares based upon the relative net asset value of outstanding shares. Expenses attributable to a particular class of shares, such as transfer agency fees, shareholder communication expenses and registration fees, were allocated directly to that class.
Each Fund is managed by Artisan Partners Limited Partnership (the “Adviser” or “Artisan Partners”). The Adviser is wholly owned by Artisan Partners Holdings LP (“Artisan Holdings”). Artisan Global Equity Fund is subadvised by Artisan Partners UK LLP (“Artisan UK”). A wholly-owned subsidiary of Artisan Holdings is the founding member of Artisan UK.
Artisan Emerging Markets Fund, also a series of Artisan Funds, commenced operations on June 26, 2006 and has offered Institutional Shares since inception. It began offering Advisor shares on June 2, 2008. The financial statements of both classes of Artisan Emerging Markets Fund are presented in separate reports.
83
NOTES TO FINANCIAL STATEMENTS
Artisan Global Opportunities Fund changed its name from Artisan Growth Opportunities Fund effective July 9, 2012.
(2) | Summary of significant accounting policies: |
The following is a summary of significant accounting policies of Artisan Funds in effect during the period covered by the financial statements, which were in accordance with United States generally accepted accounting principles.
(a) | Security valuation – The net asset value (“NAV”) of the shares of each class of each Fund was determined as of the close of regular session trading on the New York Stock Exchange (“NYSE”) (usually 4:00 p.m., Eastern Time) each day the NYSE was open for regular session trading. The NAV of each class of shares was determined by dividing the value of each Fund’s securities and other assets attributed to that class, less its liabilities attributed to that class, by the number of outstanding shares of that class of that Fund. |
In determining NAV, each equity security traded on a securities exchange, including the Nasdaq Stock Market, and over-the-counter securities were valued at the closing price as of the time of valuation on the exchange or market designated by the Funds’ accounting agent or pricing vendor as the principal exchange (each, a “principal exchange”). The closing price provided by the pricing vendor for a principal exchange may differ from the price quoted elsewhere and may represent information such as last sale price, an official closing price, a closing auction price or other information, depending on exchange or market convention. Absent closing price information for a security from the principal exchange as of the time of valuation, the security was valued using (i) the closing price on another exchange on which the security traded (if such price was made available by a pricing vendor) or (ii) the most recent bid quotation on the principal exchange or, if such bid was not available, from a secondary exchange or in the over-the-counter market. Short-term investments, other than repurchase agreements, maturing within sixty days from the valuation date were valued at amortized cost, which approximates market value. |
Global Equity Fund, Global Opportunities Fund and Global Value Fund generally invested a significant portion of their total assets in securities principally traded in markets outside the U.S. International Fund, International Small Cap Fund and International Value Fund generally invested a significant portion, and perhaps as much as substantially all of their total assets, in securities principally traded in markets outside the U.S. Each of the other Funds had the ability to invest, and some did invest, in securities principally traded outside the U.S. The foreign markets in which the Funds invested were sometimes open on days when the NYSE was not open and the Funds did not calculate their NAVs, and sometimes were not open on days when the Funds did calculate their NAVs. Even on days on which both the foreign market and the NYSE were open, several hours may have passed between the time when trading in the foreign market closed and the time as of which the Funds calculated their NAVs. That was generally the case for markets in Europe, Asia, Australia and other Far Eastern markets. The regular closing time of foreign markets in North and South America was generally the same as the closing time of the NYSE and the time as of which the Funds calculated their NAVs. |
84
NOTES TO FINANCIAL STATEMENTS
Securities for which prices were not readily available were valued by Artisan Funds’ valuation committee (the “valuation committee”) at a fair value determined in good faith under procedures established by and under the general supervision of Artisan Funds’ board of directors (the “board of directors”). A price was considered to be not readily available, and a Fund may therefore have used fair value pricing, if, among other things, the valuation committee believed that the price determined did not reflect a fair value of the security or that the value of the security might have been materially affected by events occurring after the close of the market in which the security was principally traded but before the time for determination of NAV (a “subsequent event”). A subsequent event might include a company-specific development (for example, announcement of a merger that is made after the close of the foreign market), a development that might affect an entire market or region (for example, imposition of foreign exchange controls by a foreign government), a potentially global development (such as a terrorist attack that may be expected to have an impact on investor expectations worldwide) or a significant change in values of market indices, exchange traded funds or other financial instruments in the U.S. or other markets. Artisan Funds monitored for subsequent events using several tools, including the use of a third party research service to assist in determining estimates of fair values for foreign securities. That service utilized statistical data based on historical performance of securities, markets and other data in developing factors used to estimate a fair value. An indication by any of those tools of a potential material change in the value of securities resulted in either a meeting of the valuation committee, which considered whether a subsequent event had occurred and whether local market closing prices continued to represent fair values for potentially affected non-U.S. securities, and/or a valuation based on information provided by the third party research service. |
When fair value pricing is employed, the value of a portfolio security used by a Fund to calculate its NAV may differ from quoted or published prices for the same security. Estimates of fair values utilized by the Funds as described above may differ from the value realized on the sale of those securities and the differences may have been material to the NAV of the applicable Fund. |
Foreign stocks as an asset class may underperform U.S. stocks, and foreign stocks may be more volatile than U.S. stocks. Risks relating to investment in foreign securities (including, but not limited to, depositary receipts and participation certificates) include: currency exchange rate fluctuation; less available public information about the issuers of securities; less stringent regulatory standards; lack of uniform accounting, auditing and financial reporting standards; and country risks including less liquidity, high inflation rates, unfavorable economic practices, political instability and expropriation and nationalization risks. |
The risks of foreign investments typically are greater in emerging and less developed markets. For example, political and economic structures in these less developed countries may be new and changing rapidly, which may cause instability and greater risk of loss. These securities markets may be less developed, and securities in those markets are generally more volatile and less liquid than those in developed markets. Emerging market countries also are more likely to experience high levels of inflation, deflation or currency devaluations, which could hurt their economies and securities markets. Certain emerging markets also may face other significant internal or external risks, including a heightened risk of |
85
NOTES TO FINANCIAL STATEMENTS
war, and ethnic, religious and racial conflicts. In addition, governments in many emerging market countries participate to a significant degree in their economies and securities markets, which may impair investment and economic growth of companies in those markets. High levels of national debt tend to make these markets heavily reliant on foreign capital and, therefore, vulnerable to capital flight. |
(b) | Fair value measurements – Under United States generally accepted accounting principles for fair value measurement, accounting standards clarify the definition of fair value for financial reporting, establish a framework for measuring fair value and require additional disclosures about the use of fair value measurements. In accordance with this standard, fair value is defined as the price that each Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. The standard establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds’ investments. The three-tier hierarchy of inputs is summarized in three broad levels: |
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including but not limited to quoted prices for similar securities, interest rates, credit risks and securities trading primarily outside the U.S. whose value the Fund adjusted as a result of significant market movements following the close of local trading) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining a fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk or liquidity associated with investing in those securities. |
86
NOTES TO FINANCIAL STATEMENTS
The following table summarizes each Fund’s investments by major security type, based on the inputs used to determine their fair values as of September 30, 2012 (in thousands): |
Fund | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
Global Equity | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Americas | $ | 6,222 | $ | - | $ | - | $ | 6,222 | ||||||||
Emerging Markets | 987 | - | - | 987 | ||||||||||||
Europe | 5,739 | - | - | 5,739 | ||||||||||||
Pacific Basin | 2,164 | - | - | 2,164 | ||||||||||||
Repurchase Agreements | - | 333 | - | 333 | ||||||||||||
Total | $ | 15,112 | $ | 333 | $ | - | $ | 15,445 | ||||||||
Global Opportunities | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Americas | $ | 187,227 | $ | - | $ | - | $ | 187,227 | ||||||||
Emerging Markets | 45,135 | - | - | 45,135 | ||||||||||||
Europe | 52,319 | - | - | 52,319 | ||||||||||||
Pacific Basin | 13,276 | - | - | 13,276 | ||||||||||||
Repurchase Agreements | - | 15,330 | - | 15,330 | ||||||||||||
Total Investments in Securities | 297,957 | 15,330 | - | 313,287 | ||||||||||||
Derivatives | ||||||||||||||||
Foreign Currency Forward Contracts(2) | - | (23 | ) | - | (23 | ) | ||||||||||
Total | $ | 297,957 | $ | 15,307 | $ | - | $ | 313,264 | ||||||||
Global Value | ||||||||||||||||
Equity and Equity-Linked Securities(1) | ||||||||||||||||
Americas | $ | 126,559 | $ | - | $ | - | $ | 126,559 | ||||||||
Europe | 70,107 | 1,990 | - | 72,097 | ||||||||||||
Pacific Basin | 8,993 | - | - | 8,993 | ||||||||||||
Repurchase Agreements | - | 21,478 | - | 21,478 | ||||||||||||
Total Investments in Securities | 205,659 | 23,468 | - | 229,127 | ||||||||||||
Derivatives | ||||||||||||||||
Foreign Currency Forward Contracts(2) | - | (63 | ) | - | (63 | ) | ||||||||||
Total | $ | 205,659 | $ | 23,405 | $ | - | $ | 229,064 |
87
NOTES TO FINANCIAL STATEMENTS
Fund | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
International | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Americas | $ | 876,706 | $ | - | $ | - | $ | 876,706 | ||||||||
Emerging Markets | 1,045,230 | - | - | 1,045,230 | ||||||||||||
Europe | 5,153,161 | - | - | 5,153,161 | ||||||||||||
Pacific Basin | 2,275,973 | - | 119,725 | 2,395,698 | ||||||||||||
Repurchase Agreements | - | 108,556 | - | 108,556 | ||||||||||||
Total | $ | 9,351,070 | $ | 108,556 | $ | 119,725 | $ | 9,579,351 | ||||||||
International Small Cap | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Americas | $ | 8,364 | $ | - | $ | - | $ | 8,364 | ||||||||
Emerging Markets | 152,878 | - | - | 152,878 | ||||||||||||
Europe | 420,065 | - | - | 420,065 | ||||||||||||
Pacific Basin | 120,520 | - | - | 120,520 | ||||||||||||
Repurchase Agreements | - | 11,784 | - | 11,784 | ||||||||||||
Total | $ | 701,827 | $ | 11,784 | $ | - | $ | 713,611 | ||||||||
International Value | ||||||||||||||||
Equity and Equity-Linked Securities(1) | ||||||||||||||||
Americas | $ | 1,239,483 | $ | - | $ | - | $ | 1,239,483 | ||||||||
Emerging Markets | - | - | - | - | ||||||||||||
Europe | 3,817,313 | 124,510 | - | 3,941,823 | ||||||||||||
Pacific Basin | 736,617 | - | - | 736,617 | ||||||||||||
Repurchase Agreements | - | 758,286 | - | 758,286 | ||||||||||||
Total Investments in Securities | 5,793,413 | 882,796 | - | 6,676,209 | ||||||||||||
Derivatives | ||||||||||||||||
Foreign Currency Forward Contracts(2) | - | (4,763 | ) | - | (4,763 | ) | ||||||||||
Total | $ | 5,793,413 | $ | 878,033 | $ | - | $ | 6,671,446 | ||||||||
Mid Cap | ||||||||||||||||
Equity Securities(1) | $ | 6,426,856 | $ | - | $ | - | $ | 6,426,856 | ||||||||
Repurchase Agreements | - | 309,376 | - | 309,376 | ||||||||||||
Total | $ | 6,426,856 | $ | 309,376 | $ | - | $ | 6,736,232 | ||||||||
Mid Cap Value | ||||||||||||||||
Equity Securities(1) | $ | 7,471,669 | $ | - | $ | - | $ | 7,471,669 | ||||||||
Repurchase Agreements | - | 551,252 | - | 551,252 | ||||||||||||
Total | $ | 7,471,669 | $ | 551,252 | $ | - | $ | 8,022,921 | ||||||||
Small Cap | ||||||||||||||||
Equity Securities(1) | $ | 689,100 | $ | - | $ | - | $ | 689,100 | ||||||||
Repurchase Agreements | - | 34,153 | - | 34,153 | ||||||||||||
Total | $ | 689,100 | $ | 34,153 | $ | - | $ | 723,253 |
88
NOTES TO FINANCIAL STATEMENTS
Fund | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
Small Cap Value | ||||||||||||||||
Equity Securities(1) | $ | 2,552,213 | $ | - | $ | - | $ | 2,552,213 | ||||||||
Repurchase Agreements | - | 109,801 | - | 109,801 | ||||||||||||
Total | $ | 2,552,213 | $ | 109,801 | $ | - | $ | 2,662,014 | ||||||||
Value | ||||||||||||||||
Equity Securities(1) | $ | 763,435 | $ | - | $ | - | $ | 763,435 | ||||||||
Repurchase Agreements | - | 74,581 | - | 74,581 | ||||||||||||
Total | $ | 763,435 | $ | 74,581 | $ | - | $ | 838,016 | ||||||||
(1) See the Fund’s Schedule of Investments for sector or country classifications. |
| |||||||||||||||
(2) Derivative instruments are valued at unrealized appreciation. |
|
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Funds recognize transfers between the levels as of the end of the period. At September 30, 2011, the fair market values of certain securities were adjusted due to developments that occurred between the time of the close of the foreign markets on which those securities trade and the close of regular session trading on the NYSE which resulted in their Level 2 classification. The following table summarizes security transfers from Level 2 to Level 1 for each Fund as of September 30, 2012 (in thousands): |
Transfers from Level 2 to Level 1 | ||||
Global Equity | $ | 5,476 | ||
Global Opportunities | 41,875 | |||
Global Value | 62,502 | |||
International | 6,301,405 | |||
International Small Cap | 485,561 | |||
International Value | 3,897,602 | |||
Value Fund | 15,891 |
As of September 30, 2012, one equity security held in International Fund was classified as Level 3 due to a significant event that occurred after local market close. As a result, fair market value was determined in good faith by the valuation committee using the unobservable input of a 5% discount to the last reported trade at local market close. Increasing or decreasing the discount would decrease or increase the calculated fair market value of the security, respectively. As of September 30, 2012, the reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value, is as follows (in thousands): |
International Fund(1) | ||||
Balance as of September 30, 2011 | $ | - | ||
Transfers into Level 3 | 119,725 | |||
|
| |||
Balance as of September 30, 2012 | $ | 119,725 | ||
|
| |||
Net change in unrealized appreciation (depreciation) for investments held as of September 30, 2012 | $ | - | ||
(1) The Level 3 security in the International Fund was an equity security with a regional classification of Pacific Basin. |
|
89
NOTES TO FINANCIAL STATEMENTS
(c) | Taxes – No provision was made for federal income taxes or excise taxes since each Fund intends to (i) comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and (ii) distribute to its shareholders substantially all of its taxable income as well as net realized gains from the sale of investment securities. The Funds may utilize earnings and profits distributed to shareholders on redemptions of Fund shares as part of the dividends paid deduction. |
The Funds have analyzed the tax positions taken on federal income tax returns for all remaining open tax years (fiscal years 2008 through 2012) and have concluded that as of September 30, 2012, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and each state’s department of revenue. |
The Funds may be subject to taxes imposed on realized and unrealized gains on securities of certain foreign countries in which the Funds invest. The foreign tax expense, if any, was recorded on an accrual basis and is included in “Net realized gain (loss) on investments” and “Net increase (decrease) in unrealized appreciation or depreciation on investments” on the accompanying Statements of Operations. The amount of foreign tax owed, if any, is included in “Payable for foreign taxes” on the accompanying Statements of Assets and Liabilities. That amount is comprised of withholding taxes on foreign dividends and taxes on unrealized gains. |
As of and during the year ended September 30, 2012, the Funds did not have any liabilities for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year ended September 30, 2012, the Funds did not incur any interest or penalties. |
(d) | Portfolio transactions – In determining a Fund’s NAV, security transactions and shareholder transactions were accounted for no later than one business day after trade date, in accordance with applicable regulations. However, for financial reporting purposes, security transactions and shareholder transactions were recorded on trade date in accordance with United States generally accepted accounting principles. Net realized gains and losses on securities were computed on specific security lot identification. |
(e) | Foreign currency translation – Values of foreign investments, open foreign currency forward contracts, payables for capital gains taxes, payables and receivables for securities transactions, dividend and reclaim receivables, other receivables and payables, and cash denominated in a foreign currency were translated into U.S. dollars using a spot market rate of exchange as of the time of determination of each Fund’s NAV on the day of valuation. Purchases and sales of investments and dividend and interest income were translated into U.S. dollars using the current spot market rate of exchange on the date of such transactions. The portion of security gains or losses resulting from changes in foreign exchange rates was included with net realized and unrealized gain or loss from investments, as appropriate, for both financial reporting and tax purposes. |
The Funds may enter into (a) foreign currency spot contracts and (b) foreign currency forward contracts. Foreign currency spot contracts are used to facilitate the purchase |
90
NOTES TO FINANCIAL STATEMENTS
and sale of non-U.S. securities and generally settle within three business days. Foreign currency forward contracts are used to hedge against foreign currency exchange rate risks on non-U.S. dollar denominated investment securities. Open foreign currency spot contracts and foreign currency forward contracts, if any, were recorded at market value and recorded in the Statements of Assets and Liabilities. Realized and unrealized gains and losses were reported as foreign currency related transactions and are recorded in the Statements of Operations. For tax purposes, these foreign exchange gains and losses were treated as ordinary income or loss. |
As of September 30, 2012, Global Opportunities, Global Value and International Value had outstanding foreign currency forward contracts, as shown on the Schedules of Investments. Foreign currency spot contracts are not separately disclosed in the Schedules of Investments. |
The Funds could be exposed to loss if the counterparties fail to perform under these contracts. Other foreign currency related transaction gains and losses may result from currency gains and losses realized from the difference between the amounts of dividends and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. The net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions arose from changes in the values of assets and liabilities, other than investments in securities, resulting from changes in foreign exchange rates. |
(f) | Repurchase agreements – Each Fund may enter into repurchase agreements with institutions that the Adviser determined were creditworthy pursuant to criteria adopted by the board of directors. Repurchase agreements were recorded at cost plus accrued interest and were collateralized in an amount greater than or equal to the repurchase price plus accrued interest. Collateral (in the form of U.S. government securities) was held by the Funds’ custodian and in the event of default on the obligation of the counterparty to repurchase, the Funds had the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the proceeds from any sale of such collateral were less than the repurchase price, the Fund would have suffered a loss. |
(g) | Depositary receipts – Each of the Funds may invest in depositary receipts. Depositary receipts are typically issued by a financial institution (a “depositary”), evidencing ownership interests in a security issued by an issuer and deposited with the depositary. |
(h) | Equity-linked participation certificates – Global Equity Fund, Global Opportunities Fund, Global Value Fund, International Fund, International Small Cap Fund and International Value Fund may invest in equity-linked participation certificates. Equity-linked participation certificates are derivative securities which are designed to provide synthetic exposure to one or more underlying securities. An investment in an equity-linked participation certificate typically entitles the holder to a return equal to the market return of the underlying security or securities, subject to the credit risk of the issuing financial institution. There is no off-balance sheet risk associated with equity-linked participation certificates and the Funds’ potential loss is limited to the purchase price of the securities. The Funds are exposed to credit risk associated with the counterparty to the transaction, which is monitored by the Funds’ management on a periodic basis. |
91
NOTES TO FINANCIAL STATEMENTS
(i) | Transfer agent and authorized agent fees – Each Fund paid fees to, and reimbursed expenses of, the Funds’ transfer agent. In addition, the Funds have authorized certain financial services companies, broker-dealers, banks or other authorized agents, and in some cases, other organizations designated by an authorized agent (with their designees, collectively “authorized agents”) to accept purchase, exchange and redemption orders for Investor Shares on the Funds’ behalf. Many authorized agents charged a fee for accounting and shareholder services that the agent provided to Fund shareholders on the Fund’s behalf. Those services typically included recordkeeping, transaction processing for shareholders’ accounts and other services. The fee was either based on the number of accounts to which the intermediary provided such services, or was a percentage (as of September 30, 2012 up to 0.40% annually) of the average value of Fund shares held in such accounts. Each Fund paid a portion of such fees, which are intended to compensate the authorized agent for its provision of services of the type that would be provided by the Funds’ transfer agent or other service providers if the shares were registered on the books of the Funds’ transfer agent. The balance of the fees incurred was paid by the Adviser. The Funds’ expenses incurred for services provided by authorized agents were included in “Transfer agent fees” in the Statements of Operations. The table below shows the fees and expenses to the Funds’ transfer agent and the fees to authorized agents incurred by each class of each Fund during the year ended September 30, 2012 (in thousands): |
Year Ended 9/30/12 | ||||||||||||
Fund | Fees and Expenses to Transfer Agent | Fees to Authorized Agents | Total | |||||||||
Global Equity - Investor Shares | $ | 64 | $ | 23 | $ | 87 | ||||||
Global Opportunities - Investor Shares | 69 | 399 | 468 | |||||||||
Global Opportunities - Institutional Shares | 15 | - | 15 | |||||||||
Global Value - Investor Shares | 70 | 331 | 401 | |||||||||
Global Value - Institutional Shares(1) | 6 | - | 6 | |||||||||
International - Investor Shares | 722 | 12,773 | 13,495 | |||||||||
International - Institutional Shares | 24 | - | 24 | |||||||||
International Small Cap - Investor Shares | 79 | 874 | 953 | |||||||||
International Value - Investor Shares | 485 | 6,618 | 7,103 | |||||||||
International Value - Institutional Shares | 23 | - | 23 | |||||||||
Mid Cap - Investor Shares | 138 | 12,996 | 13,134 | |||||||||
Mid Cap - Institutional Shares | 23 | - | 23 | |||||||||
Mid Cap Value - Investor Shares | 606 | 16,909 | 17,515 | |||||||||
Mid Cap Value - Institutional Shares(2) | 11 | - | 11 | |||||||||
Small Cap - Investor Shares | 108 | 865 | 973 | |||||||||
Small Cap - Institutional Shares(3) | 8 | - | 8 | |||||||||
Small Cap Value - Investor Shares | 112 | 6,228 | 6,340 | |||||||||
Small Cap Value - Institutional Shares(2) | 11 | - | 11 |
92
NOTES TO FINANCIAL STATEMENTS
Year Ended 9/30/12 | ||||||||||||
Fund | Fees and Expenses to Transfer Agent | Fees to Authorized Agents | Total | |||||||||
Value - Investor Shares | 104 | 1,532 | 1,636 | |||||||||
Value - Institutional Shares | 14 | - | 14 | |||||||||
(1) For the period from commencement of operations July 17, 2012 through September 30, 2012. |
| |||||||||||
(2) For the period from commencement of operations February 1, 2012 through September 30, 2012. |
| |||||||||||
(3) For the period from commencement of operations May 7, 2012 through September 30, 2012. |
|
(k) | Commission recapture – Each of the Funds had the ability to direct portfolio trades to various brokers that have agreed to rebate a portion of the commissions generated. Such cash rebates were made directly to the applicable Fund and were included in net realized gain or loss on investments in the Statements of Operations for the year ended September 30, 2012 as follows (in thousands): |
Global Opportunities | $ | 14 | ||
Global Value | - | (1) | ||
International | 142 | |||
International Small Cap | 1 | |||
International Value | 61 | |||
Mid Cap | 132 | |||
Mid Cap Value | 183 | |||
Small Cap | 26 | |||
Small Cap Value | 165 | |||
Value | 40 | |||
(1) Amount rounds to less than $1. |
(l) | Use of estimates – The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. |
(m) | Indemnifications – In the normal course of business, the Funds have entered into contracts in which the Funds agree to indemnify the other party or parties against various potential costs or liabilities. The Funds’ maximum exposure under these arrangements is unknown. No claim has been made for indemnification pursuant to any such agreement of the Funds. |
(n) | Other – Dividend income less foreign taxes withheld, if any, was generally recorded on the ex-dividend date. In some cases, the information was not available to the Fund on the ex-dividend date. In such cases, which may have included private placements and foreign securities, dividends were recorded as soon after the ex-dividend date as reliable information became available to the Funds. Non-cash dividends included in dividend income, if any, were generally recorded at the fair market value of securities received. Interest income was reported on the accrual basis. Distributions to shareholders were recorded on the ex-dividend date. Expenses attributable to Artisan Funds were generally allocated to each Fund based on net assets. However, other |
93
NOTES TO FINANCIAL STATEMENTS
expense allocation methodologies were used, depending on the nature of the expense item. Expenses attributable to a particular Fund or class were allocated directly to that Fund or class. |
The character of income and net realized gains and losses may differ in some instances for financial statement and tax purposes and may result in reclassification of permanent differences among certain capital accounts to more appropriately conform financial accounting to tax characterizations of dividend and capital gain distributions. |
Global Equity Fund, Global Opportunities Fund, Global Value Fund, International Fund, International Small Cap Fund and International Value Fund generally imposed a 2% redemption fee on shares held 90 days or less. Those redemption fees were recorded as a reduction in the cost of shares redeemed and had the primary effect of increasing paid-in capital. Each Fund reserved the right to waive or reduce the 2% redemption fee on shares held 90 days or less at its discretion when the Fund believed such waiver was in the best interests of the Fund, including but not limited to when it determined that imposition of the redemption fee was not necessary to protect the Fund from the effects of short-term trading. The Funds waived the fee on redemption of shares held by certain authorized agents or other Fund intermediaries and otherwise in accordance with the Funds’ prospectus. |
(3) | Derivative Transactions: |
The fair value of derivative instruments as reported in the Statements of Assets and Liabilities as of September 30, 2012 was as follows (in thousands):
Fund | Risk Exposure Category | Statement of Assets and Liabilities location | Value | |||||
Global Opportunities | Foreign currency forward contracts | Unrealized loss on foreign currency forward and spot contracts | $ | (23 | ) | |||
Global Value | Foreign currency forward contracts | Unrealized loss on foreign currency forward and spot contracts | $ | (63 | ) | |||
International Value | Foreign currency forward contracts | Unrealized gain on foreign currency forward and spot contracts | $ | 58 | ||||
Foreign currency forward contracts | Unrealized loss on foreign currency forward and spot contracts | $ | (4,821 | ) |
94
NOTES TO FINANCIAL STATEMENTS
The effect of derivative instruments on the Statements of Operations for the year ended September 30, 2012 was as follows (in thousands):
Amount of Realized Gain (Loss) on Derivatives Recognized in Income
Fund | Risk Exposure Category | Statement of Operations location | Value | |||||
Global Equity | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | - | (1) | |||
Global Opportunities | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | 17 | ||||
Global Value | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | 26 | ||||
International Value | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | 11,152 |
(1) | Amount rounds to less than $1. |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Fund | Risk Exposure Category | Statement of Operations location | Value | |||||
Global Equity | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | $ | - | (1) | |||
Global Opportunities | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | (28 | ) | ||||
Global Value | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | (78 | ) | ||||
International Value | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | (6,668 | ) |
(1) | Amount rounds to less than $1. |
Volume of derivative activity
Fund | Contracts Closed(1) | Contracts Opened(1) | Contracts Open at September 30, 2012 | |||||||||
Global Equity | 2 | - | - | |||||||||
Global Opportunities | 1 | 3 | 3 | |||||||||
Global Value | 3 | 2 | 2 | |||||||||
International Value | 1 | 3 | 3 |
(1) | During the year ended September 30, 2012. |
95
NOTES TO FINANCIAL STATEMENTS
(4) | Transactions with affiliates: |
The Adviser, with which the officers and a director of Artisan Funds were affiliated, provided investment advisory and administrative services to the Funds. In exchange for those services, each Fund paid a monthly management fee to the Adviser as follows:
International Value Fund, Mid Cap Fund, Mid Cap Value Fund, Small Cap Fund, and Small Cap Value Fund
Average Daily Net Assets | Annual Rate | |||
Less than $500 million | 1.000 | % | ||
$500 million to $750 million | 0.975 | |||
$750 million to $1 billion | 0.950 | |||
Greater than $1 billion | 0.925 |
Global Equity Fund and Global Value Fund
Average Daily Net Assets | Annual Rate | |||
Less than $1 billion | 1.000 | % | ||
$1 billion to $4 billion | 0.975 | |||
$4 billion to $8 billion | 0.950 | |||
$8 billion to $12 billion | 0.925 | |||
Greater than $12 billion | 0.900 |
Global Opportunities Fund
Average Daily Net Assets | Annual Rate | |||
Less than $1 billion | 0.900 | % | ||
$1 billion to $4 billion | 0.875 | |||
$4 billion to $8 billion | 0.850 | |||
$8 billion to $12 billion | 0.825 | |||
Greater than $12 billion | 0.800 |
International Fund
Average Daily Net Assets | Annual Rate | |||
Less than $500 million | 1.000 | % | ||
$500 million to $750 million | 0.975 | |||
$750 million to $1 billion | 0.950 | |||
$1 billion to $12 billion | 0.925 | |||
Greater than $12 billion | 0.900 |
International Small Cap Fund
Average Daily Net Assets | Annual Rate | |||
All | 1.250 | % |
96
NOTES TO FINANCIAL STATEMENTS
Value Fund
Average Daily Net Assets | Annual Rate | |||
Less than $50 million | 0.800 | % | ||
$50 million to $100 million | 0.760 | |||
$100 million to $500 million | 0.720 | |||
$500 million to $7.5 billion | 0.680 | |||
Greater than $7.5 billion | 0.640 |
The Adviser has contractually agreed to waive its management fee, and to the extent that the fee waiver is insufficient, to reimburse Global Equity Fund, Global Opportunities Fund and Global Value Fund for any ordinary operating expenses in an amount sufficient to cause the Fund’s ordinary operating expenses, including the management fee, to be not more than 1.50% of average daily net assets, annually. This contract continues through February 1, 2014, at which time the Adviser will determine whether to renew, revise or discontinue it. For the year ended September 30, 2012, the Adviser waived management fees of $121,000 and $25,000 for Global Equity Fund and Global Value Fund, respectively. For the year ended September 30, 2012, Global Equity Fund incurred operating expenses of $68,000 that were reimbursed by the Adviser.
The officers and director of Artisan Funds who are affiliated with the Adviser receive no compensation from the Funds. Each director who was not an affiliated person of the Adviser received an annual retainer of $200,000, payable quarterly, as well as reimbursement of expenses related to his or her duties as a director of Artisan Funds. The amount of the annual retainer increases by $10,000 with each new series of Artisan Funds. In addition, the non-interested chair of the board of directors received an annual retainer of $60,000, payable quarterly, and each chair of a board committee who was a non-interested director received an annual retainer of $30,000, payable quarterly. These fees were generally allocated to each of the Artisan Funds based on net assets, subject to a minimum allocation of $1,500 to each Fund per quarter.
Artisan Funds has adopted a deferred compensation plan for directors who are not affiliated persons of the Adviser that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Funds. For purposes of determining the amount owed to the directors under the plan, deferred amounts would be invested in shares of Artisan Funds as selected by the individual directors. Each Fund would purchase shares of Artisan Funds selected for deferral by the director in amounts equal to his investment, resulting in a Fund asset equal to the deferred compensation liability. As of September 30, 2012, no directors have elected to participate in the deferred compensation plan.
Shares of Artisan Funds were offered for sale by Artisan Partners Distributors LLC (“Distributors”). Distributors is wholly owned by Artisan Holdings. All distribution expenses relating to the Funds were paid by the Adviser.
(5) | Line of credit arrangement: |
Artisan Funds is party to a line of credit agreement with State Street Bank and Trust Company (“SSB”), which expires in August 2013, under which each Fund may borrow up to $75 million, provided that such borrowing does not exceed the lesser of (a) 33 1/3% of its adjusted net assets, with adjusted net assets being total assets less total liabilities (excluding
97
NOTES TO FINANCIAL STATEMENTS
indebtedness for borrowed money) after giving effect to the borrowing, and (b) the maximum amount the Fund is permitted to borrow pursuant to applicable law, pursuant to the Fund’s prospectus limitations on indebtedness, pursuant to any vote of the shareholders of the Fund, or pursuant to any limitation on borrowings in any applicable agreement with any governmental authority or regulator or any other applicable agreement or document to which such Fund is a party; provided that the aggregate borrowings by all Artisan Funds may not exceed $100 million. Artisan Funds paid a commitment fee at the annual rate of 0.10% on the unused portion of the line of credit and interest was charged on any borrowings at the higher of the current Federal Funds or overnight LIBOR rates plus 1.25%. The commitment fee is allocated to each Fund based on net assets. The use of the line of credit was generally restricted to temporary borrowing for extraordinary or emergency purposes. During the year ended September 30, 2012, there were no borrowings under the line of credit for Global Opportunities Fund, Global Value Fund, International Fund, International Value Fund, Mid Cap Fund, Mid Cap Value Fund, Small Cap Value Fund and Value Fund. During the year ended September 30, 2012, Global Equity Fund, International Small Cap Fund and Small Cap Fund had maximum borrowings of $46,000, $617,000 and $7,888,000, respectively.
(6) | Investment transactions: |
The cost of securities purchased and the proceeds from the sale of securities (excluding short-term securities) for the year ended September 30, 2012 were as follows (in thousands):
Fund | Security Purchases | Security Sales | ||||||
Global Equity | $ | 12,687 | $ | 11,719 | ||||
Global Opportunities | 268,582 | 94,354 | ||||||
Global Value | 146,921 | 28,672 | ||||||
International | 4,773,519 | 5,001,386 | ||||||
International Small Cap | 305,613 | 248,712 | ||||||
International Value | 1,800,826 | 983,240 | ||||||
Mid Cap | 3,037,001 | 2,683,898 | ||||||
Mid Cap Value | 2,234,648 | 2,008,019 | ||||||
Small Cap | 561,228 | 323,622 | ||||||
Small Cap Value | 768,599 | 1,194,048 | ||||||
Value | 607,844 | 423,759 |
(7) | Transactions in securities of affiliates: |
The table below shows information about securities of the Funds’ “affiliates” (as defined below) that were held by the Funds, purchased or sold by the Funds, or from which dividends were received by the Funds during the year ended September 30, 2012 (dollar values in thousands). The Funds identify a company as an affiliate for the purpose of this report if one or more of the Funds owned, in the aggregate, voting securities that it believed
98
NOTES TO FINANCIAL STATEMENTS
represented 5% or more of that company’s outstanding voting securities (as defined by the Investment Company Act of 1940, as amended) during the year ended September 30, 2012.
As of 9/30/11 | Net Realized Gain (Loss) | As of 9/30/12 | ||||||||||||||||||||||||||||
Fund | Security | Share Balance | Purchase Cost | Sales Cost | Dividend Income(1) | Share Balance | Value | |||||||||||||||||||||||
Global Value | ||||||||||||||||||||||||||||||
Arch Capital Group Ltd.(2) | 78,490 | $ | 4,605 | $ | 502 | $ | (14 | ) | $ | - | 186,146 | $ | 7,759 | |||||||||||||||||
Total(3) | $ | 4,605 | $ | 502 | $ | (14 | ) | $ | - | $ | 7,759 | |||||||||||||||||||
International Value | ||||||||||||||||||||||||||||||
Aderans Co., Ltd.(2) | 2,420,067 | $ | 2,854 | $ | 485 | $ | (59 | ) | $ | - | 2,612,467 | $ | 35,752 | |||||||||||||||||
Arch Capital Group Ltd.(2) | 5,572,034 | 46,880 | 24,051 | 3,051 | - | 6,040,912 | 251,785 | |||||||||||||||||||||||
Carpetright PLC(2)(4)(5) | 2,956,377 | 4,476 | 3,345 | (856 | ) | - | 3,161,793 | 33,544 | ||||||||||||||||||||||
ICON PLC (DR)(2) | 2,871,675 | 32,316 | 6 | - | (6) | - | 4,501,487 | 109,701 | ||||||||||||||||||||||
Panalpina Welttransport Holding AG(5) | 1,093,317 | 44,276 | 10,454 | (1,996 | ) | 5,006 | 1,471,407 | 140,570 | ||||||||||||||||||||||
Qinetiq Group PLC | 62,402,252 | 23,846 | 23,808 | 1,431 | 2,684 | 61,299,386 | 187,579 | |||||||||||||||||||||||
Savills Plc | 9,951,406 | 8,662 | 4,893 | (577 | ) | 2,075 | 10,727,785 | 69,068 | ||||||||||||||||||||||
Total(3) | $ | 163,310 | $ | 67,042 | $ | 994 | $ | 9,765 | $ | 794,455 | ||||||||||||||||||||
Mid Cap | ||||||||||||||||||||||||||||||
athenahealth, Inc.(2) | 1,956,015 | $ | 22,292 | $ | 27,789 | $ | 13,759 | $ | - | 1,827,315 | $ | 167,693 | ||||||||||||||||||
Cepheid(2)(5) | 2,030,600 | 53,208 | 1,368 | 94 | - | 3,459,600 | 119,391 | |||||||||||||||||||||||
FLIR Systems, Inc.(5) | - | 42,778 | - | - | 227 | 1,702,200 | 34,001 | |||||||||||||||||||||||
Total(3) | $ | 118,278 | $ | 29,157 | $ | 13,853 | $ | 227 | $ | 321,085 | ||||||||||||||||||||
Mid Cap Value | ||||||||||||||||||||||||||||||
Alleghany Corporation(2)(4) | 599,507 | $ | 17,390 | $ | 2,553 | $ | 2,570 | $ | - | 640,251 | $ | 220,848 | ||||||||||||||||||
Arch Capital Group Ltd.(2) | 4,083,819 | 15,635 | 16,477 | 7,240 | - | 3,865,186 | 161,101 | |||||||||||||||||||||||
Arrow Electronics, Inc.(2) | 4,982,100 | 18,064 | 2,460 | 2,202 | - | 5,329,061 | 179,643 | |||||||||||||||||||||||
Avnet, Inc.(2)(5) | 6,353,610 | 18,904 | 2,713 | 2,465 | - | 6,754,379 | 196,485 | |||||||||||||||||||||||
FLIR Systems, Inc.(5) | 3,144,900 | 113,465 | 3,353 | 258 | 1,550 | 7,992,622 | 159,653 | |||||||||||||||||||||||
Hatteras Financial Corp.(4)(5) | 3,026,500 | 25,403 | 38,965 | 226 | 10,979 | 2,592,155 | 73,073 | |||||||||||||||||||||||
Ingram Micro Inc.(2) | 9,752,200 | 15,999 | 3,528 | 407 | - | 10,362,660 | 157,823 | |||||||||||||||||||||||
Lexmark International, Inc. | 4,113,200 | 12,726 | 3,031 | (555 | ) | 4,799 | 4,391,595 | 97,713 | ||||||||||||||||||||||
Patterson-UTI Energy, Inc.(5) | 604,400 | 128,149 | 2,423 | 92 | 1,110 | 7,961,374 | 126,108 | |||||||||||||||||||||||
Ryder System, Inc.(5) | 1,388,000 | 19,451 | 1,064 | 640 | 1,912 | 1,720,723 | 67,211 | |||||||||||||||||||||||
Total(3) | $ | 385,186 | $ | 76,567 | $ | 15,545 | $ | 20,350 | $ | 1,145,737 | ||||||||||||||||||||
Small Cap | ||||||||||||||||||||||||||||||
athenahealth, Inc.(2) | 204,500 | $ | 12,204 | $ | 8,519 | $ | 1,748 | $ | - | 239,900 | $ | 22,016 | ||||||||||||||||||
Cepheid(2)(5) | 387,400 | 13,693 | 4,024 | (124 | ) | - | 647,200 | 22,335 | ||||||||||||||||||||||
Total(3) | $ | 25,897 | $ | 12,543 | $ | 1,624 | $ | - | $ | 44,351 | ||||||||||||||||||||
Small Cap Value | ||||||||||||||||||||||||||||||
Arrow Electronics, Inc.(2) | 1,317,447 | $ | - | $ | 4,655 | $ | 1,499 | $ | - | 1,130,647 | $ | 38,114 | ||||||||||||||||||
Cloud Peak Energy Inc.(2)(4)(5) | 2,473,200 | 15,708 | 7,539 | (1,459 | ) | - | 3,004,100 | 54,374 |
See footnotes to the table on page 100.
99
NOTES TO FINANCIAL STATEMENTS
As of 9/30/11 | Net Realized Gain (Loss) | As of 9/30/12 | ||||||||||||||||||||||||||||
Fund | Security | Share Balance | Purchase Cost | Sales Cost | Dividend Income(1) | Share Balance | Value | |||||||||||||||||||||||
Comfort Systems USA, Inc. | 2,698,526 | $ | - | $ | 6,113 | $ | (1,098 | ) | $ | 499 | 2,214,426 | $ | 24,204 | |||||||||||||||||
Comstock Resources, Inc.(2)(4)(5) | 1,957,290 | 8,528 | 12,779 | (7,723 | ) | - | 2,289,090 | 42,073 | ||||||||||||||||||||||
CONMED Corporation(4) | 1,574,059 | - | 11,423 | 4,103 | 488 | 1,031,659 | 29,402 | |||||||||||||||||||||||
CRA International, Inc.(2) | 661,700 | 2,017 | 1,968 | (497 | ) | - | 709,779 | 12,265 | ||||||||||||||||||||||
H.B. Fuller Company(4) | 3,158,433 | - | 23,837 | 4,558 | 846 | 2,144,333 | 65,788 | |||||||||||||||||||||||
Hatteras Financial Corp.(4) | 1,812,500 | 2,671 | 32,394 | (1,799 | ) | 4,814 | 833,500 | 23,496 | ||||||||||||||||||||||
Hawaiian Holdings, Inc.(2) | 2,548,300 | 3,998 | 2,058 | (169 | ) | - | 2,896,800 | 16,193 | ||||||||||||||||||||||
ICON PLC (DR)(2) | 921,041 | 12,341 | 3,427 | (326 | ) | - | 1,343,941 | 32,752 | ||||||||||||||||||||||
Lexmark International, Inc. | 1,471,587 | 4,093 | 15,155 | (5,176 | ) | 1,543 | 1,295,687 | 28,829 | ||||||||||||||||||||||
Manhattan Associates, Inc.(2)(4) | 1,184,624 | - | 25,811 | 27,383 | - | - | - | |||||||||||||||||||||||
Matthews International Corporation(5) | 1,351,113 | 9,481 | 7,824 | (1,081 | ) | 520 | 1,419,500 | 42,329 | ||||||||||||||||||||||
Neutral Tandem, Inc.(2) | 1,850,400 | 4,188 | 3,846 | (1,361 | ) | - | 1,988,900 | 18,656 | ||||||||||||||||||||||
ORION MARINE GROUP, INC.(2) | 1,851,400 | - | 3,280 | (1,597 | ) | - | 1,601,100 | 11,896 | ||||||||||||||||||||||
Penn Virginia Corporation(4) | 2,298,900 | - | 34,834 | (24,021 | ) | 124 | - | - | ||||||||||||||||||||||
PICO Holdings, Inc.(2) | 1,323,090 | - | 5,915 | (2,025 | ) | - | 1,138,890 | 25,989 | ||||||||||||||||||||||
Quanex Building Products Corporation(4) | 1,909,726 | 247 | 29,138 | 4,739 | 217 | - | - | |||||||||||||||||||||||
Rosetta Stone Inc.(2)(4) | 1,179,600 | - | 6,163 | (665 | ) | - | 736,000 | 9,384 | ||||||||||||||||||||||
Ryder System, Inc.(5) | 981,864 | 30,255 | 7,770 | (970 | ) | 1,395 | 1,601,064 | 62,538 | ||||||||||||||||||||||
Schnitzer Steel Industries, Inc., Class A(4)(5) | 383,000 | 36,720 | 4,781 | (1,087 | ) | 467 | 1,246,200 | 35,081 | ||||||||||||||||||||||
School Specialty, Inc.(4) | 1,769,253 | - | 42,634 | (36,666 | ) | - | - | - | ||||||||||||||||||||||
Sykes Enterprises, Incorporated(2) | 3,130,694 | - | 9,628 | (3,616 | ) | - | 2,723,494 | 36,604 | ||||||||||||||||||||||
Ultratech, Inc.(2) | 1,948,353 | 1,282 | 6,406 | 580 | - | 1,757,837 | 55,161 | |||||||||||||||||||||||
Universal Electronics Inc.(2)(4)(5) | 723,400 | 1,026 | 2,112 | (987 | ) | - | 718,000 | 12,622 | ||||||||||||||||||||||
Websense, Inc.(2)(5) | 1,417,637 | 12,628 | 5,007 | (1,041 | ) | - | 1,914,637 | 29,964 | ||||||||||||||||||||||
Total(3) | $ | 145,183 | $ | 316,497 | $ | (50,502 | ) | $ | 10,913 | $ | 435,494 | |||||||||||||||||||
Value | ||||||||||||||||||||||||||||||
Alleghany Corporation(2)(4)(5) | - | $ | 16,242 | $ | 476 | $ | (5 | ) | $ | - | 50,736 | $ | 17,501 | |||||||||||||||||
Arch Capital Group Ltd.(2) | 439,300 | 7,385 | 2,681 | 81 | - | 561,300 | 23,395 | |||||||||||||||||||||||
Avnet, Inc.(2)(5) | 585,800 | 8,060 | 3,694 | (95 | ) | - | 709,300 | 20,634 | ||||||||||||||||||||||
Ingram Micro Inc.(2) | 1,000,700 | 7,796 | 3,506 | (279 | ) | - | 1,252,000 | 19,068 | ||||||||||||||||||||||
Total(3) | $ | 39,483 | $ | 10,357 | $ | (298 | ) | $ | - | $ | 63,097 |
(1) | Net of foreign taxes withheld, if any. |
(2) | Non-income producing security. |
(3) | Total value as of September 30, 2012 is presented for only those issuers that were affiliates as of September 30, 2012. |
(4) | Issuer was no longer an affiliate as of September 30, 2012. |
(5) | Issuer was not an affiliate as of September 30, 2011. |
(6) | Amount rounds to less than $1. |
100
NOTES TO FINANCIAL STATEMENTS
(8) | Information for Federal income tax purposes: |
For Federal income tax purposes, the cost of investments, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation on investments as of September 30, 2012 was as follows (in thousands):
Fund | Cost of Investments | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation on Investments | ||||||||||||
Global Equity | $ | 13,020 | $ | 2,539 | $ | (114 | ) | $ | 2,425 | |||||||
Global Opportunities | 275,413 | 42,149 | (4,275 | ) | 37,874 | |||||||||||
Global Value | 201,953 | 28,364 | (1,190 | ) | 27,174 | |||||||||||
International | 7,964,855 | 1,772,135 | (157,639 | ) | 1,614,496 | |||||||||||
International Small Cap | 560,516 | 178,699 | (25,604 | ) | 153,095 | |||||||||||
International Value | 5,780,732 | 1,048,774 | (153,297 | ) | 895,477 | |||||||||||
Mid Cap | 4,642,133 | 2,178,955 | (84,856 | ) | 2,094,099 | |||||||||||
Mid Cap Value | 7,217,274 | 1,063,810 | (258,163 | ) | 805,647 | |||||||||||
Small Cap | 592,334 | 143,246 | (12,327 | ) | 130,919 | |||||||||||
Small Cap Value | 2,574,954 | 351,325 | (264,265 | ) | 87,060 | |||||||||||
Value | 767,535 | 81,872 | (11,391 | ) | 70,481 |
The difference between cost of investments for financial reporting and cost of investments for Federal income tax purposes was due primarily to timing differences in recognizing certain gains and losses on security transactions (e.g., wash sale loss deferrals and passive foreign investment company transactions).
The tax characterization of ordinary income dividends and long-term capital gain distributions paid during the year ended September 30, 2012 and the year ended September 30, 2011 were as follows (in thousands):
Year Ended 9/30/12 | Year Ended 9/30/11 | |||||||||||||||
Fund | Ordinary Income Dividends | Long-Term Capital Gain Distributions | Ordinary Income Dividends | Long-Term Capital Gain Distributions | ||||||||||||
Global Equity | $ | 219 | $ | - | $ | 158 | $ | - | ||||||||
Global Opportunities | - | 1,611 | 224 | 810 | ||||||||||||
Global Value | - | 1,393 | 313 | - | ||||||||||||
International | 120,942 | - | 87,763 | - | ||||||||||||
International Small Cap | 2,354 | - | 457 | - | ||||||||||||
International Value | 3,150 | 12,240 | 51,946 | - | ||||||||||||
Mid Cap Value | 165,166 | 377,653 | 80,288 | 66,416 | ||||||||||||
Small Cap Value | 52,068 | 187,263 | 2,837 | |||||||||||||
Value | 4,597 | - | 2,455 | - |
101
NOTES TO FINANCIAL STATEMENTS
Ordinary income dividends and long-term capital gain distributions were determined in accordance with income tax regulations that impose treatment that is different from the treatment that would result from the application of United States generally accepted accounting principles for such items as net short-term gains, wash sale loss deferrals, passive foreign investment company transactions, foreign currency transactions, net investment losses and qualified late year ordinary losses. Gains on redemptions-in-kind for Global Opportunities Fund, International Fund and Mid Cap Value Fund of $22,886,000, $57,875,000 and $53,573,000, respectively, were included in net realized gain (loss) on investments in the Statements of Operations for the year ended September 30, 2012, and were not recognized for Federal income tax purposes. These net realized gains represent permanent book/tax differences and were reclassified to Fund Shares Issued and Outstanding.
In order to meet certain excise tax distribution requirements, the Funds are required to measure and distribute annually, net capital gains realized during a twelve-month period ending October 31 and net investment income earned during a twelve-month period ending December 31. In connection with these requirements, the Funds are permitted for tax purposes to defer into their next fiscal year qualified late year losses. Qualified late year capital losses are any net capital losses incurred between November 1 and the end of the Funds’ fiscal year, September 30, 2012. Qualified late year ordinary losses are specified losses generally incurred between January 1 and the end of the Funds’ fiscal year, September 30, 2012.
Additional tax information as of and for the year ended September 30, 2012 follows (in thousands):
Undistributed Ordinary Income | Undistributed Long-Term Gain | Qualified | Late Year Ordinary Losses | Other Deferred Gains (Losses)(1) | ||||||||||||||||
Global Equity | $ | 320 | $ | 410 | $ | - | $ | - | $ | (4 | ) | |||||||||
Global Opportunities | - | - | 5,073 | 562 | (74 | ) | ||||||||||||||
Global Value | 1,185 | 189 | - | - | (13 | ) | ||||||||||||||
International | 120,631 | - | 134,451 | - | (610 | ) | ||||||||||||||
International Small Cap | 7,728 | - | 10,371 | - | 6 | |||||||||||||||
International Value | 58,967 | 30,642 | - | - | (63 | ) | ||||||||||||||
Mid Cap | - | 207,582 | - | 37,201 | - | |||||||||||||||
Mid Cap Value | 77,258 | 314,481 | - | - | - | |||||||||||||||
Small Cap | - | - | - | 3,241 | (30 | ) | ||||||||||||||
Small Cap Value | 28,229 | 38,067 | - | - | (13 | ) | ||||||||||||||
Value | 3,244 | - | - | - | (3 | ) |
(1) | Other deferred gains and losses relate to (a) gains or losses on transactions that occurred subsequent to year end that affected the distributable earnings at September 30, 2012 such as wash sales, (b) unrealized gains and losses on open foreign currency contracts and (c) other items. |
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years
102
NOTES TO FINANCIAL STATEMENTS
beginning after the date of enactment. Under the Act, each Fund is permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years must be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term, as permitted under previous law. Thus, such losses must be used first to offset gains of the same character; for example, long-term carryforward losses will first offset long-term gains, before they can be used to offset short-term gains.
As of September 30, 2012, the Funds had capital loss carryovers as follows (in thousands):
Expiration Dates | ||||
2018 | ||||
International | $ | 1,603,991 | ||
International Small Cap | 16,556 | |||
Small Cap | 116,580 | |||
Value | 27,218 |
To the extent the Funds realize future net capital gains, those gains will be offset by any unused capital loss carryover.
103
NOTES TO FINANCIAL STATEMENTS
(8) | Fund share activities: |
Capital share transactions for the Funds were as follows (dollar values in thousands):
GLOBAL EQUITY | GLOBAL OPPORTUNITIES | GLOBAL VALUE | INTERNATIONAL | |||||||||||||||||||||||||
Year or period ended September 30, 2012 | Investor Shares | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares(1) | Investor Shares | Institutional Shares | |||||||||||||||||||||
Proceeds from shares issued | $ | 3,116 | $ | 90,608 | $ | 151,140 | $ | 160,470 | $ | 36,100 | $ | 1,536,392 | $ | 517,584 | ||||||||||||||
Net asset value of shares transferred | - | - | - | (12,120 | ) | 12,120 | (231,344 | ) | 231,344 | |||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 218 | 1,207 | 356 | 1,360 | - | 74,375 | 31,736 | |||||||||||||||||||||
Cost of shares redeemed(2) | (2,155 | ) | (48,137 | ) | (89,911 | ) | (24,163 | ) | - | (1,918,403 | ) | (567,239 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net increase (decrease) from fund share transactions | $ | 1,179 | $ | 43,678 | $ | 61,585 | $ | 125,547 | $ | 48,220 | $ | (538,980 | ) | $ | 213,425 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Shares sold | 257,601 | 6,799,049 | 11,563,211 | 14,877,779 | 3,123,045 | 70,913,145 | 24,010,141 | |||||||||||||||||||||
Shares transferred | - | - | - | (1,095,110 | ) | 1,095,110 | (10,618,754 | ) | 10,618,754 | |||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 21,609 | 110,071 | 32,475 | 138,584 | - | 3,910,352 | 1,660,721 | |||||||||||||||||||||
Shares redeemed | (198,039 | ) | (4,020,707 | ) | (6,895,398 | ) | (2,261,464 | ) | - | (89,799,988 | ) | (26,803,261 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net increase (decrease) in capital shares | 81,171 | 2,888,413 | 4,700,288 | 11,659,789 | 4,218,155 | (25,595,245 | ) | 9,486,355 | ||||||||||||||||||||
|
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|
| |||||||||||||||
GLOBAL EQUITY | GLOBAL OPPORTUNITIES | GLOBAL VALUE | INTERNATIONAL | |||||||||||||||||||||||||
Year or period ended September 30, 2011 | Investor Shares | Investor Shares | Institutional Shares(3) | Investor Shares | Investor Shares | Institutional Shares | ||||||||||||||||||||||
Proceeds from shares issued | $ | 3,476 | $ | 116,536 | $ | 1,599 | $ | 42,770 | $ | 1,303,630 | $ | 200,095 | ||||||||||||||||
Net asset value of shares transferred | - | (14,153 | ) | 14,153 | - | - | - | |||||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 157 | 1,027 | - | 308 | 54,788 | 25,401 | ||||||||||||||||||||||
Cost of shares redeemed(2) | (2,691 | ) | (21,486 | ) | - | (8,634 | ) | (2,190,720 | ) | (366,860 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net increase (decrease) from fund share transactions | $ | 942 | $ | 81,924 | $ | 15,752 | $ | 34,444 | $ | (832,302 | ) | $ | (141,364 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Shares sold | 305,877 | 9,228,735 | 133,801 | 4,188,478 | 60,685,817 | 9,123,456 | ||||||||||||||||||||||
Shares transferred | - | (1,057,788 | ) | 1,057,788 | - | - | - | |||||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 14,140 | 85,008 | - | 30,390 | 2,556,612 | 1,178,671 | ||||||||||||||||||||||
Shares redeemed | (233,297 | ) | (1,746,821 | ) | - | (851,645 | ) | (100,130,658 | ) | (16,394,727 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net increase (decrease) in capital shares | 86,720 | 6,509,134 | 1,191,589 | 3,367,223 | (36,888,229 | ) | (6,092,600 | ) | ||||||||||||||||||||
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|
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|
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|
|
(1) | For the period from commencement of operations July 17, 2012 through September 30, 2012. |
(2) | Net of redemption fees of: |
Fund | 9/30/2012 | 9/30/2011 | ||||||
Global Equity - Investor Shares | $ | 3 | $ | 1 | ||||
Global Opportunities - Investor Shares | 28 | 4 | ||||||
Global Opportunities - Institutional Shares | 10 | - | ||||||
Global Value - Investor Shares | 57 | 16 | ||||||
Global Value - Institutional Shares | - | (a) | - | |||||
International - Inventor Shares | 365 | 460 | ||||||
International - Institutional Shares | 133 | 157 | ||||||
(a) Amounts to less than $1. |
(3) | For the period from commencement of operations July 26, 2011 through September 30, 2011. |
104
NOTES TO FINANCIAL STATEMENTS
INTERNATIONAL SMALL CAP | INTERNATIONAL VALUE | MID CAP | MID CAP VALUE | |||||||||||||||||||||||||
Year or period ended | Investor Shares | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares(1) | |||||||||||||||||||||
Proceeds from shares issued | $ | 170,836 | $ | 1,825,446 | $ | 300,203 | $ | 1,134,545 | $ | 913,389 | $ | 2,256,209 | $ | 117,734 | ||||||||||||||
Net asset value of shares transferred | - | (46,004 | ) | 46,004 | (174,556 | ) | 174,556 | (176,084 | ) | 176,084 | ||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 2,186 | 8,766 | 4,096 | - | - | 510,446 | - | |||||||||||||||||||||
Cost of shares redeemed(2) | (153,893 | ) | (742,078 | ) | (92,384 | ) | (1,419,234 | ) | (163,767 | ) | (1,817,057 | ) | (25,019 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net increase (decrease) from fund share transactions | $ | 19,129 | $ | 1,046,130 | $ | 257,919 | $ | (459,245 | ) | $ | 924,178 | $ | 773,514 | $ | 268,799 | |||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Shares sold | 9,033,146 | 68,937,456 | 11,249,703 | 30,911,938 | 23,673,124 | 108,982,585 | 5,633,636 | |||||||||||||||||||||
Shares transferred | - | (1,713,146 | ) | 1,713,146 | (4,530,994 | ) | 4,530,994 | (8,625,472 | ) | 8,625,472 | ||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 133,547 | 361,475 | 168,689 | - | - | 26,809,143 | - | |||||||||||||||||||||
Shares redeemed | (8,401,505 | ) | (28,550,016 | ) | (3,476,236 | ) | (39,072,083 | ) | (4,238,239 | ) | (88,350,116 | ) | (1,223,102 | ) | ||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net increase (decrease) in capital shares | 765,188 | 39,035,769 | 9,655,302 | (12,691,139 | ) | 23,965,879 | 38,816,140 | 13,036,006 | ||||||||||||||||||||
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INTERNATIONAL SMALL CAP | INTERNATIONAL VALUE | MID CAP | MID CAP VALUE | |||||||||||||||||||||||||
Year ended September 30, 2011 | Investor Shares | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares | Investor Shares | ||||||||||||||||||||||
Proceeds from shares issued | $ | 134,384 | $ | 1,396,183 | $ | 547,792 | $ | 1,160,346 | $ | 66,013 | $ | 1,807,081 | ||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 416 | 32,185 | 11,352 | - | - | 137,560 | ||||||||||||||||||||||
Cost of shares redeemed(2) | (315,635 | ) | (617,777 | ) | (71,466 | ) | (1,278,871 | ) | (90,606 | ) | (1,436,373 | ) | ||||||||||||||||
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Net increase (decrease) from fund share transactions | $ | (180,835 | ) | $ | 810,591 | $ | 487,678 | $ | (118,525 | ) | $ | (24,593 | ) | $ | 508,268 | |||||||||||||
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Shares sold | 6,925,299 | 51,358,305 | 20,384,767 | 33,974,631 | 1,869,251 | 86,270,818 | ||||||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 21,365 | 1,197,336 | 422,463 | - | - | 6,905,600 | ||||||||||||||||||||||
Shares redeemed | (15,988,028 | ) | (23,292,083 | ) | (2,603,912 | ) | (37,508,365 | ) | (2,521,038 | ) | (69,234,568 | ) | ||||||||||||||||
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Net increase (decrease) in capital shares | (9,041,364 | ) | 29,263,558 | 18,203,318 | (3,533,734 | ) | (651,787 | ) | 23,941,850 | |||||||||||||||||||
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(1) | For the period from commencement of operations February 1, 2012 through September 30, 2012. |
(2) | Net of redemption fees of: |
Fund | 9/30/2012 | 9/30/2011 | ||||||
International Small Cap - Investor Shares | $ | 12 | $ | 10 | ||||
International Value - Investor Shares | 168 | 279 | ||||||
International Value - Institutional shares | 55 | 84 |
105
NOTES TO FINANCIAL STATEMENTS
SMALL CAP | SMALL CAP VALUE | VALUE | ||||||||||||||||||||||
Year or period ended September 30, 2012 | Investor Shares | Institutional Shares(1) | Investor Shares | Institutional Shares(1) | Investor Shares | Institutional Shares | ||||||||||||||||||
Proceeds from shares issued | $ | 518,831 | $ | 41,497 | $ | 477,485 | $ | 21,930 | $ | 381,736 | $ | 67,740 | ||||||||||||
Net asset value of shares transferred | (7,672 | ) | 7,672 | (316,629 | ) | 316,629 | (28,493 | ) | 28,493 | |||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | - | - | 232,282 | - | 3,598 | 682 | ||||||||||||||||||
Cost of shares redeemed | (275,282 | ) | (624 | ) | (839,074 | ) | (24,779 | ) | (198,942 | ) | (11,067 | ) | ||||||||||||
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Net increase (decrease) from fund share transactions | $ | 235,877 | $ | 48,545 | $ | (445,936 | ) | $ | 313,780 | $ | 157,899 | $ | 85,848 | |||||||||||
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Shares sold | 26,347,093 | 2,169,494 | 30,580,060 | 1,430,115 | 36,033,224 | 6,432,287 | ||||||||||||||||||
Shares transferred | (291,535 | ) | 291,535 | (20,221,662 | ) | 20,221,662 | (2,578,646 | ) | 2,578,646 | |||||||||||||||
Shares issued in reinvestment of dividends and distributions | - | - | 16,041,566 | - | 369,799 | 70,062 | ||||||||||||||||||
Shares redeemed | (14,104,749 | ) | (31,916 | ) | (54,620,123 | ) | (1,581,650 | ) | (18,831,659 | ) | (1,054,396 | ) | ||||||||||||
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Net increase (decrease) in capital shares | 11,950,809 | 2,429,113 | (28,220,159 | ) | 20,070,127 | 14,992,718 | 8,026,599 | |||||||||||||||||
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SMALL CAP | SMALL CAP VALUE | VALUE | ||||||||||||||||||||||
Year or period ended September 30, 2011 | Investor Shares | Investor Shares | Investor Shares | Institutional Shares(3) | ||||||||||||||||||||
Proceeds from shares issued | $ | 161,710 | $ | 661,190 | $ | 273,248 | $ | 36,577 | ||||||||||||||||
Net asset value of shares transferred | - | - | (21,242 | ) | 21,242 | |||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | - | 2,731 | 2,273 | - | ||||||||||||||||||||
Cost of shares redeemed | (188,566 | ) | (640,783 | ) | (106,948 | ) | - | |||||||||||||||||
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Net increase (decrease) from fund share transactions | $ | (26,856 | ) | $ | 23,138 | $ | 147,331 | $ | 57,819 | |||||||||||||||
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Shares sold | 9,258,288 | 39,082,613 | 27,593,098 | 3,866,137 | ||||||||||||||||||||
Shares transferred | - | - | (2,004,008 | ) | 2,004,008 | |||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | - | 162,466 | 241,039 | - | ||||||||||||||||||||
Shares redeemed | (11,269,301 | ) | (37,996,832 | ) | (10,864,145 | ) | - | |||||||||||||||||
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Net increase (decrease) in capital shares | (2,011,013 | ) | 1,248,247 | 14,965,984 | 5,870,145 | |||||||||||||||||||
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(1) | For the period from commencement of operations May 7, 2012 through September 30, 2012. |
(2) | For the period from commencement of operations February 1, 2012 through September 30, 2012. |
(3) | For the period from commencement of operations July 26, 2011 through September 30, 2011. |
(9) | Subsequent Events: |
The Funds have evaluated subsequent events through the date of issuance of the Funds’ financial statements and have determined there is no impact to the Funds’ financial statements.
106
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of Artisan Partners Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Artisan Global Equity Fund, Artisan Global Opportunities Fund (formerly Artisan Growth Opportunities Fund), Artisan Global Value Fund, Artisan International Fund, Artisan International Small Cap Fund, Artisan International Value Fund, Artisan Mid Cap Fund, Artisan Mid Cap Value Fund, Artisan Small Cap Fund, Artisan Small Cap Value Fund, and Artisan Value Fund (eleven of the twelve portfolios constituting Artisan Partners Funds, Inc.) (the “Funds”) as of September 30, 2012, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2012, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Artisan Global Equity Fund, Artisan Global Opportunities Fund, Artisan Global Value Fund, Artisan International Fund, Artisan International Small Cap Fund, Artisan International Value Fund, Artisan Mid Cap Fund, Artisan Mid Cap Value Fund, Artisan Small Cap Fund, Artisan Small Cap Value Fund, and Artisan Value Fund of Artisan Partners Funds, Inc. at September 30, 2012, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Chicago, Illinois
November 21, 2012
107
NOTES TO FINANCIAL STATEMENTS
Other Federal tax information (unaudited):
The Internal Revenue Code requires that shareholders be notified within 60 days of the Funds’ fiscal year-end of certain information regarding long-term capital gains, qualified dividend income and the dividends received deduction for corporate shareholders. This data is informational only. Every year in January, shareholders are sent a Form 1099-DIV which provides the federal tax status of dividends and distributions received during the calendar year. Shareholders are advised to consult their own tax advisor with respect to the specific tax consequences of investment in the Funds.
Each Fund hereby designates the following amounts as (i) long-term capital gain distributions for purposes of the dividends paid deduction (including earnings and profits distributed to shareholders on redemption of Fund shares, in thousands), (ii) the amount of ordinary dividends paid during the fiscal year ended September 30, 2012 that are considered qualified dividend income as defined in the Jobs and Growth Tax Relief Reconciliation Act of 2003, and (iii) the amount of ordinary dividends paid during the fiscal year ended September 30, 2012 that are eligible for the dividends received deduction available to certain corporate shareholders.
Fund | Long-Term Capital Gains | Qualified Dividend Income | Dividends Received Deduction | |||||||||
Global Equity | $ - | 67.28 | % | 12.62 | % | |||||||
Global Opportunities | 1,611 | - | - | |||||||||
Global Value | 1,435 | - | - | |||||||||
International | - | 100.00 | - | |||||||||
International Small Cap | - | 100.00 | - | |||||||||
International Value | 12,240 | 100.00 | - | |||||||||
Mid Cap | - | - | - | |||||||||
Mid Cap Value | 404,092 | 68.71 | 66.19 | |||||||||
Small Cap | - | - | - | |||||||||
Small Cap Value | 193,096 | 58.02 | 54.54 | |||||||||
Value | - | 100.00 | 100.00 |
108
SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED)
As a shareholder of Artisan Funds, you may incur transaction costs, including redemption fees, and you will incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2012 to September 30, 2012.
Actual Expenses
The first line under the name of each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the name of your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line under each Fund’s name in the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio for the six months ended September 30, 2012 and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 4/1/2012 | Ending Account Value | Expenses Paid During 4/1/2012-9/30/2012 | ||||||||||
Artisan Global Equity Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,089.30 | $ | 7.83 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.50 | $ | 7.57 | ||||||
Artisan Global Opportunities Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,040.10 | $ | 6.83 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.30 | $ | 6.76 | ||||||
Artisan Global Value Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,046.10 | $ | 7.67 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.50 | $ | 7.57 |
109
SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED)
Beginning Account Value 4/1/2012 | Ending Account Value | Expenses Paid During 4/1/2012-9/30/2012 | ||||||||||
Artisan International Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,027.90 | $ | 6.03 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.05 | $ | 6.01 | ||||||
Artisan International Small Cap Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,050.60 | $ | 7.69 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.50 | $ | 7.57 | ||||||
Artisan International Value Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,028.70 | $ | 5.93 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.15 | $ | 5.91 | ||||||
Artisan Mid Cap Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 975.40 | $ | 6.02 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.90 | $ | 6.16 | ||||||
Artisan Mid Cap Value Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 980.00 | $ | 5.94 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.00 | $ | 6.06 | ||||||
Artisan Small Cap Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,015.10 | $ | 6.45 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.60 | $ | 6.46 | ||||||
Artisan Small Cap Value Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 928.70 | $ | 5.88 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.90 | $ | 6.16 | ||||||
Artisan Value Fund - Investor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,016.10 | $ | 5.34 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.70 | $ | 5.35 |
Fund | Annualized Ratio of Expenses to Average Net Assets for the Six-Month Period Ended September 30, 2012 | |||
Artisan Global Equity Fund - Investor Shares(1) | 1.50 | % | ||
Artisan Global Opportunities Fund - Investor Shares | 1.34 | % | ||
Artisan Global Value Fund - Investor Shares(1) | 1.50 | % | ||
Artisan International Fund - Investor Shares | 1.19 | % | ||
Artisan International Small Cap Fund - Investor Shares | 1.52 | % | ||
Artisan International Value Fund - Investor Shares | 1.17 | % | ||
Artisan Mid Cap Fund - Investor Shares | 1.22 | % |
110
SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED)
Fund | Annualized Ratio of Expenses to Average Net Assets for the Six-Month Period Ended September 30, 2012 | |||
Artisan Mid Cap Value Fund - Investor Shares | 1.20 | % | ||
Artisan Small Cap Fund - Investor Shares | 1.28 | % | ||
Artisan Small Cap Value Fund - Investor Shares | 1.22 | % | ||
Artisan Value Fund - Investor Shares | 1.06 | % | ||
(1) The annualized ratio of expenses to average net assets excludes expenses waived or paid by the Adviser. |
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111
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
The discussions of each Fund included in this report include statistical information about the portfolios of each of the Funds. Except as otherwise noted, that information is as of September 30, 2012. That information will vary with changes in a Fund’s portfolio investments. The performance information for each Fund relative to its benchmark index discussed in this report was prepared by the Adviser using information reported by FactSet Research Systems, Inc. (“FactSet”). For the purposes of assigning portfolio securities to a particular country in this report, the Adviser considers an issuer to be from a particular country as designated by its securities information vendors. However, the Adviser in its own judgment may consider an issuer to be from a country other than the country designated by the securities information vendors. The Adviser currently uses MSCI Inc. as its primary source and FactSet as a secondary source for this information. The primary information vendor’s criteria include the identity of the jurisdiction of the issuer’s incorporation, the main equity trading market for the issuer’s securities, the geographical distribution of the issuer’s operations and the location of the issuer’s headquarters. The Adviser may also consider other criteria such as the source of a company’s revenues. Over time, country designations may change.
For the purposes of assigning portfolio securities to a particular sector and industry, the Adviser assigns securities in accordance with the sector and industry classifications of the Global Industry Classification Standard (GICS®) developed by MSCI Inc. and Standard & Poor’s (to the extent available) as a primary source and FactSet (to the extent available) as a secondary source for this information. In the event the Adviser’s securities information vendors do not classify a security to a particular sector or industry, or if the published classification appears to be erroneous, the Adviser classifies the security according to its own judgment, using other securities information vendors, the company description and other publicly available information about the company’s peer group. Sector and industry classifications may change over time.
The names of portfolio securities reflected in this report are as reported by the Funds’ data providers, may not represent the legal name of the entity and, in some cases, are translations of non-English names.
Definition of Portfolio Statistic
Market Capitalization is the aggregate value of all of a company’s outstanding equity securities.
Descriptions of Indices
Each Fund’s performance is compared in this report to changes in one or more indices, including in all cases a broad-based index of changes in prices of securities in the markets in which the Fund invests. All of the indices are unmanaged and their returns include reinvested dividends. Unlike the Funds’ returns, the returns of each index do not include the payment of sales commissions or other expenses that would be incurred in the purchase or sale of the securities included in that index. An investment cannot be made directly in an index. Fair value pricing is not employed by market indices.
112
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
The indices to which the Funds are compared are:
Artisan Global Equity, Artisan Global Opportunities and Artisan Global Value Funds – Morgan Stanley Capital International All Country World IndexSM (MSCI ACWISM) is a market-weighted index of global developed and emerging markets.
Artisan International, Artisan International Small Cap and Artisan International Value Funds – Morgan Stanley Capital International EAFE® Index (MSCI EAFE®) is a market-weighted index of companies in developed markets, excluding the U.S. and Canada. MSCI EAFE®’s average annual return since inception of the International Fund is based upon a starting date of December 31, 1995.
Artisan International Fund – Morgan Stanley Capital International EAFE® Growth Index (MSCI EAFE® Growth) is a market-weighted index of companies in developed markets, excluding the U.S. and Canada, that exhibits growth investment style characteristics according to MSCI’s methodology. MSCI EAFE® Growth’s average annual return since inception of the International Fund is based upon a starting date of December 31, 1995.
Artisan International Small Cap Fund – Morgan Stanley Capital International EAFE® Small Cap Index (MSCI EAFE® Small Cap) is a market-weighted index of small companies in developed markets, excluding the U.S. and Canada.
Artisan International Value Fund – Morgan Stanley Capital International EAFE® Value Index (MSCI EAFE® Value) is a market-weighted index of companies in developed markets, excluding the U.S. and Canada, that exhibits value investment style characteristics according to MSCI’s methodology.
Artisan Mid Cap and Artisan Mid Cap Value Funds – Russell Midcap® Index is a market-weighted index of about 800 medium-sized U.S. companies.
Artisan Mid Cap Fund – Russell Midcap® Growth Index is a market-weighted index of those medium-sized companies included in the Russell Midcap® Index with higher price-to-book and higher forecasted growth values.
Artisan Mid Cap Value Fund – Russell Midcap® Value Index is a market-weighted index of those medium-sized companies included in the Russell Midcap® Index with lower price-to-book ratios and lower forecasted growth values.
Artisan Small Cap and Artisan Small Cap Value Funds – Russell 2000® Index is a market-weighted index of about 2,000 small U.S. companies.
Artisan Small Cap Fund – Russell 2000® Growth Index is a market-weighted index of those small companies included in the Russell 2000® Index with higher price-to-book ratios and higher forecasted growth values.
Artisan Small Cap Value Fund – Russell 2000® Value Index is a market-weighted index of those small companies included in the Russell 2000® Index with lower price-to-book ratios and lower forecasted growth values.
Artisan Value Fund – Russell 1000® Index is a market-weighted index of about 1,000 large U.S. companies.
Artisan Value Fund – Russell 1000® Value Index is a market-weighted index of those large companies included in the Russell 1000® Index with lower price-to-book ratios and lower forecasted growth values.
113
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
Trademarks
Trademarks and copyrights relating to the indices and products of portfolio companies mentioned in this report, if any, are owned by their respective owners. Except as otherwise indicated, the trademarks, including names, logos, slogans and service marks appearing in this report are the property of the Adviser and may not be copied, reproduced, published or in any way used without written permission.
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by the Adviser. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
The MSCI information may only be used by the reader, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the reader of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall MSCI Parties have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.
Russell Investment Group is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a presentation of Artisan Funds. Russell Investment Group is not responsible for the formatting or configuration of this material or for any inaccuracy in Artisan Funds’ presentation thereof.
PROXY VOTING POLICIES AND PROCEDURES
You may obtain a description of Artisan Funds’ proxy voting policies and procedures, without charge, upon request by calling 800.344.1770. That information also is included in Artisan Funds’ statements of additional information, which are available without charge, on Artisan Funds’ website at www.artisanfunds.com and on the Securities and Exchange Commission’s website at www.sec.gov.
114
PROXY VOTING POLICIES AND PROCEDURES
Information relating to how each Artisan Fund voted proxies relating to portfolio securities held during the twelve-month period ended June 30 is available without charge, on Artisan Funds’ website at www.artisanfunds.com and on the Securities and Exchange Commission’s website at www.sec.gov.
INFORMATION ABOUT PORTFOLIO SECURITIES
Artisan Funds files a complete schedule of portfolio holdings with the Securities and Exchange Commission for the quarters ending December 31 and June 30 (the first and third quarters of the Funds’ fiscal year) on Form N-Q. The Funds’ Forms N-Q are available on the Securities and Exchange Commission’s website at www.sec.gov. You also may review and copy those documents by visiting the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 800.SEC.0330.
115
The board of directors has overall responsibility for the conduct of the affairs of Artisan Funds. Each director serves an indefinite term of unlimited duration until the next annual meeting of shareholders and until the election and qualification of his or her successor or until he or she retires, resigns or is removed from office. Artisan Funds’ bylaws further provide that each director must retire by the end of the calendar year in which he or she attains the age of 72. The board of directors may fill any vacancy on the board provided that after such appointment at least two-thirds of the directors have been elected by the shareholders. The shareholders may remove a director by a vote of a majority of the outstanding shares of the Funds at any meeting of shareholders called for the purpose of removing such director.
The board of directors elects the officers of Artisan Funds. Each officer serves until the election and qualification of his or her successor, or until he or she sooner dies, resigns, or is removed or disqualified. The board of directors may remove any officer with or without cause at any time.
The names and ages of the directors and officers as of November 16, 2012, the position each holds with the Funds, the date each was first elected to office, their principal business occupations and other directorships they have held during at least the last five years are shown below.1 Each director oversees all twelve series of Artisan Funds.
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Directors who are not “interested persons” of Artisan Funds: | ||||||||
David A. Erne – 69 | Director and Independent Chair of the Board of Directors | Director since 3/27/95; Independent Chair since 2/4/05 | Of counsel to the law firm Reinhart Boerner Van Deuren s.c., Milwaukee, WI. | Trustee, Northwestern Mutual Life Insurance Company (individual life insurance, disability insurance and annuity company). | ||||
Gail L. Hanson – 56 | Director | 1/1/12 | Chief Financial Officer, Aurora Health Care (not for profit health care provider); from September 2004 to February 2011, Deputy Executive Director, State of Wisconsin Investment Board. | Director, Northwestern Mutual Series Fund, Inc. (individual life insurance and investment company) (28 portfolios). | ||||
Thomas R. Hefty – 65 | Director | 3/27/95 | Retired; from January 2007 to February 2008, President, Kern Family Foundation (private, grant-making organization); until December 2006, of counsel to the law firm Reinhart Boerner Van Deuren s.c., Milwaukee, WI; until December 2006, Adjunct Professor, Department of Business and Economics, Ripon College; until December 2002, Chairman of the Board and Chief Executive Officer of Cobalt Corporation (provider of managed care and specialty business services). | None. |
116
DIRECTORS AND OFFICERS
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Patrick S. Pittard – 66 | Director | 8/9/01 | Chairman and Chief Executive Officer, ACT Bridge, Inc. (enterprise talent management firm); Distinguished Executive in Residence (teaching position), University of Georgia; until October 2001, Chairman of the Board, President and Chief Executive Officer of Heidrick & Struggles International, Inc. (executive search firm). | Director, Lincoln National Corporation (insurance and investment management company); former Director, Cbeyond, Inc. (telecommunications company, formerly Cbeyond Communications, Inc.). | ||||
R. Scott Trumbull – 63 | None | 11/13/12 | Chairman and Chief Executive Officer, Franklin Electric Co., Inc. (manufacturer of water and fuel pumping systems). | Director, Health Care REIT (investor in health care real estate). | ||||
Director who is an “interested person” of Artisan Funds: | ||||||||
Andrew A. Ziegler – 55* | Director | 1/5/95 | Managing Director of Artisan Partners; until February 2010, President and Chief Executive Officer of Artisan Funds. | None. | ||||
Officers: | ||||||||
Eric R. Colson – 42 | President and Chief Executive Officer | 2/9/10 | Managing Director and Chief Executive Officer of Artisan Partners since January 2010; prior thereto, Managing Director and Chief Operating Officer – Investment Operations of Artisan Partners. | None. | ||||
Brooke J. Billick – 58 | Chief Compliance Officer | 8/19/04 | Chief Compliance Officer – U.S. Mutual Funds and Associate Counsel of Artisan Partners; until January 2012, Chief Compliance Officer of Artisan Partners and Artisan Partners Distributors LLC. | None. | ||||
Gregory K. Ramirez – 42 | Chief Financial Officer and Treasurer | 2/8/11 | Managing Director and Chief Accounting Officer (since March 2010) of Artisan Partners; Vice President, Treasurer and Chief Financial Officer of Artisan Partners Distributors LLC; until July 2012, Assistant Treasurer of Artisan Partners Distributors LLC; until February 2011, Assistant Secretary and Assistant Treasurer of Artisan Funds. | None. |
117
DIRECTORS AND OFFICERS
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Sarah A. Johnson – 40 | General Counsel, Vice President and Secretary | 2/8/11 | Managing Director (since March 2010), Associate Counsel and Chief Compliance Officer (since January 2012) of Artisan Partners; Vice President and Secretary of Artisan Partners Distributors, LLC; until February 2011, Assistant Secretary of Artisan Funds. | None. | ||||
James S. Hamman, Jr. – 43 | Vice President and Assistant Secretary | 2/8/11 | Associate Counsel of Artisan Partners since March 2010; from January 2008 until February 2010, Principal of Elite Investment Partners, LLC; prior thereto, Executive Vice President, General Counsel and Secretary of Calamos Asset Management, Inc. | None. | ||||
Stephen W. Hlavach – 43 | Assistant Treasurer | 2/14/12 | Tax Director of Artisan Partners since January 2011; prior thereto, Tax Lead, Mergers & Acquisitions of The Boeing Company. | None. | ||||
Shannon K. Jagodinski – 35 | Assistant Treasurer | 2/14/12 | Senior Manager of Investment Accounting of Artisan Partners. | None. |
1 | Howard B. Witt retired as a director of Artisan Funds effective November 13, 2012. |
* | Mr. Ziegler is an “interested person” of Artisan Funds, as defined in the Investment Company Act of 1940, because he is a Managing Director of Artisan Partners and an officer of Artisan Investments GP LLC (the general partner of Artisan Partners). Mr. Ziegler and Carlene M. Ziegler (who are married to each other) control Artisan Partners. |
The business address of the officers and the director affiliated with Artisan Partners is 875 E. Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202. The address of the other directors is c/o Artisan Funds, 875 E. Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202.
Artisan Funds’ statement of additional information (SAI) contains further information about the directors. Please call 800.344.1770 or visit our website at www.artisanfunds.com for a free copy of the SAI.
118
ARTISAN FUNDS P.O. BOX 8412 BOSTON, MA 02266-8412
800.344.1770 WWW.ARTISANFUNDS.COM |
ANNUAL
REPORT
SEPTEMBER 30, 2012
ARTISAN EMERGING MARKETS FUND
ARTISAN GLOBAL OPPORTUNITIES FUND
(formerly known as
Artisan Growth Opportunities Fund)
ARTISAN GLOBAL VALUE FUND
ARTISAN INTERNATIONAL FUND
ARTISAN INTERNATIONAL VALUE FUND
ARTISAN MID CAP FUND
ARTISAN MID CAP VALUE FUND
ARTISAN SMALL CAP FUND
ARTISAN SMALL CAP VALUE FUND
ARTISAN VALUE FUND
ARTISAN FUNDS
INSTITUTIONAL SHARES
ARTISAN FUNDS
P.O. BOX 8412
BOSTON, MA 02266-8412
This report and the audited financial statements contained herein are provided for the general information of the shareholders of Artisan Funds. Before investing, investors should consider carefully each Fund’s investment objective, risks and charges and expenses. For a prospectus, which contains that information and more information about each Fund, please call 800.399.1770 for a free prospectus. Read it carefully before you invest or send money.
Company discussions are for illustration only and are not intended as recommendations of individual stocks. The discussions present information about the companies believed to be accurate, and the views of the portfolio managers, as of September 30, 2012. That information and those views may change, and the Funds disclaim any obligation to advise shareholders of any such changes. Each of the Funds offer other classes of shares. A report on each of the other classes is available under separate cover.
Artisan Funds offered through Artisan Partners Distributors LLC, member FINRA.
INSTITUTIONAL SHARES
Artisan Emerging Markets Fund employs a fundamental research process to construct a diversified portfolio of emerging market companies. The team’s investment process focuses on identifying companies that are priced at a discount relative to the team’s estimate of their sustainable earnings.
• | Sustainable Earnings. The team believes that over the long term a stock’s price is directly related to the company’s ability to deliver sustainable earnings. The team determines a company’s sustainable earnings based upon financial and strategic analyses. The financial analysis of a company’s balance sheet, income statement, and statement of cash flows focuses on identifying historical drivers of return on equity. The strategic analysis examines a company’s competitive advantages and financial strength to assess sustainability. |
• | Valuation. The team believes that investment opportunities develop when businesses with sustainable earnings are undervalued relative to peers and historical industry, country and regional valuations. The team values a business and develops a price target based on their assessment of the business’s sustainable earnings and cash flow expectations and the team’s risk analysis. |
• | Risk Analysis. The team believes that a disciplined risk framework allows greater focus on fundamental stock selection. The team incorporates its assessment of company-specific and macroeconomic risks into its valuation analysis to develop a risk-adjusted target price. The risk-rating assessment includes a review of the currency, interest rate, monetary and fiscal policy and political risks to which a company is exposed. |
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (6/26/2006 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | Since Inception | ||||||||||||
Artisan Emerging Markets Fund – Institutional Shares | 13.47 | % | 0.27 | % | -4.02 | % | 5.50 | % | ||||||||
MSCI Emerging Markets IndexSM | 16.93 | 5.63 | -1.28 | 8.44 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners Limited Partnership’s (the “Adviser” or “Artisan Partners”) contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 100 for a description of the index.
2
INVESTING ENVIRONMENT
Emerging markets, as measured by the MSCI Emerging Markets IndexSM, advanced over the period as Europe’s precarious financial situation and the overall progression of the global economy continued to dictate investor sentiment across developed and emerging markets. Central banks in the U.S. and the eurozone dominated the headlines with attempts to stimulate economic growth through a variety of easing monetary measures. Despite Spain and Italy joining Greece on the frontline of the sovereign debt crisis and slower growth from the BRIC (Brazil, Russia, India and China) economies, emerging markets posted gains in three of the four quarters for the year ended September 30, 2012.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 12.0 | % | 12.2 | % | ||||
Consumer Staples | 5.2 | 3.6 | ||||||
Energy | 10.3 | 11.8 | ||||||
Financials | 18.0 | 21.1 | ||||||
Healthcare | 3.4 | 2.2 | ||||||
Industrials | 7.8 | 9.0 | ||||||
Information Technology | 18.3 | 18.1 | ||||||
Materials | 13.4 | 11.0 | ||||||
Telecommunication Services | 7.7 | 6.7 | ||||||
Utilities | 2.0 | 2.6 | ||||||
Other assets less liabilities | 1.9 | 1.7 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Emerging Markets Fund returned 13.47%, underperforming the MSCI Emerging Markets IndexSM, which returned 16.93% over the same period.
Performance of the following stocks had a positive impact on the portfolio during the period: Samsung Electronics Co., Ltd., an electronic product manufacturer; Taiwan Semiconductor Manufacturing Company Ltd., an integrated circuit manufacturer; Hon Hai Precision Industry Co., Ltd., an electronic manufacturing service provider; Grupo Financiero Banorte S.A.B. de C.V., a financial institution; and Mr. Price Group Limited, a retail operator.
Notable detractors included: HTC Corporation, a smartphone designer and manufacturer; E Ink Holdings Inc., a thin film liquid crystal display manufacturer; GOME Electrical Appliances Holdings Limited, a household appliance and consumer electronics retailer; Ajisen (China) Holdings Limited, a chain restaurant operator; and Vale SA, a metals and mining company.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Emerging Asia | 48.1 | % | 51.3 | % | ||||
Latin America | 26.4 | 24.0 | ||||||
Europe, Middle East & Africa | 20.8 | 19.7 | ||||||
Developed Markets | 2.8 | 3.3 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Naspers Limited, an electronic and print media holding company; Hyundai Mobis, an automotive parts and equipment manufacturer; ICICI Bank Limited, a retail and commercial bank operator; China Unicom (Hong Kong) Limited, a telecommunications provider; and Sberbank of Russia, a bank specializing in commercial banking services. We funded these purchases in part by selling our positions in MTN Group Limited, Mr. Price Group Limited, Totvs SA, PT Telekomunikasi Indonesia Persero Tbk and Tim Participacoes S.A.
3
ARTISAN GLOBAL OPPORTUNITIES FUND
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Global Opportunities Fund employs a fundamental investment process to construct a diversified portfolio of growth companies across a broad capitalization range. The Fund’s investment process focuses on two distinct areas – security selection and capital allocation.
The Fund’s investment team attempts to identify companies that possess franchise characteristics that are selling at attractive valuations and benefiting from an accelerating profit cycle.
Franchise characteristics. These are characteristics that the team believes help to protect a company’s stream of cash flow from the effects of competition. The team looks for companies with at least two of the following characteristics: low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name.
Attractive valuations. Through its own fundamental research, the team estimates the amount a private market buyer would pay to buy the entire company (the company’s “intrinsic value” or “private market value”) and considers whether to purchase a stock if it sells at a discount to that estimate.
Accelerating profit cycle. The team tries to invest in companies that are well positioned for long-term growth, at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.
Based on the investment team’s fundamental analysis of a company’s profit cycle, portfolio holdings develop through three stages. GardenSM investments are small positions in the early part of their profit cycle that will warrant a more sizeable allocation once their profit cycle accelerates. CropSM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycle. HarvestSM investments are positions that are being reduced as they near the team’s estimate of full valuation or their profit cycle begins to decelerate.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (7/26/2011 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | Since Inception | ||||||
Artisan Global Opportunities Fund – Institutional Shares | 32.68 | % | 6.64 | % | ||||
MSCI ACWI IndexSM | 20.98 | -0.87 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. The Fund’s return may vary greatly over short periods, and current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners’ contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 100 for a description of each index.
4
INVESTING ENVIRONMENT
In the one-year period ended September 30, 2012, the global stock market, as represented by the MSCI All Country World IndexSM, posted a positive return. Healthy corporate profitability and continued, albeit slow, economic progress from the lows following the 2008 financial crisis were positive influences to market returns. Conversely, concerns related to high sovereign debt levels in developed regions, particularly in Europe, created market volatility and fueled uncertainty regarding the sustainability of the economic recovery. Signs of economic activity leveling out in several major emerging markets countries also added to concerns.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 13.2 | % | 9.5 | % | ||||
Consumer Staples | 2.9 | 2.0 | ||||||
Energy | 6.7 | 6.3 | ||||||
Financials | 5.4 | 8.6 | ||||||
Healthcare | 18.2 | 17.9 | ||||||
Industrials | 13.4 | 10.7 | ||||||
Information Technology | 28.1 | 33.6 | ||||||
Materials | 4.1 | 6.8 | ||||||
Other assets less liabilities | 8.0 | 4.6 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Global Opportunities Fund returned 32.68%, outperforming the MSCI All Country World IndexSM, which returned 20.98%.
Performance of the following stocks had a positive impact on the portfolio during the period: Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, Apple Inc., a manufacturer of computers and electronic media devices, Monsanto Company, a provider of agricultural products for farmers, Google Inc., an Internet search engine provider, and Discover Financial Services, a diversified financial services provider.
Notable detractors included: Nokia Corporation, a provider of wireless and wireline communication services and equipment; Facebook, Inc., a provider of an Internet social network website; SINA Corporation, an online media and mobile value-added services provider; Ctrip.com International, Ltd., an online/call-center travel agency provider; and Shandong Weigao Group Medical Polymer Company Limited, a developer of single-use medical devices.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 62.0 | % | 59.9 | % | ||||
Europe | 9.6 | 16.9 | ||||||
Emerging Markets | 17.2 | 14.4 | ||||||
Pacific Basin | 3.2 | 4.2 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Sanofi, a diversified health care company; SAP AG, a software solutions provider; Qualicorp SA, a health care benefits administrator; Amazon.com, Inc., a retail website operator; and Raia Drogasil SA, a retail drugstore chain in Brazil. We funded these purchases in part by selling our positions in Allergan, Inc., Broadcom Corporation, Coca-Cola Icecek AS, Baker Hughes Incorporated and Telefonaktiebolaget LM Ericsson.
5
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Global Value Fund employs a fundamental investment process to construct a diversified portfolio of securities of undervalued U.S. and non-U.S. companies. The Fund’s investment process focuses on identifying what the investment team considers to be high- quality, undervalued businesses that offer the potential for superior risk/reward outcomes. The team’s in-depth research process focuses on four key investment characteristics:
Undervaluation. Determining the intrinsic value of the business is the heart of the team’s research process. The team believes that intrinsic value represents the amount that a buyer would pay to own a company’s future cash flows. The team seeks to invest at a significant discount to the team’s estimate of the intrinsic value of a business.
Business quality. The team seeks to invest in companies with histories of generating strong free cash flow, improving returns on capital and strong competitive positions in their industries.
Financial strength. The team believes that investing in companies with strong balance sheets helps to reduce the potential for capital risk and provides company management the ability to build value when attractive opportunities are available.
Shareholder-oriented management. The team’s research process attempts to identify management teams with a history of building value for shareholders.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (7/17/2012 to 9/30/2012)
TOTAL RETURNS (as of 9/30/2012)
Fund / Index | Since Inception (1) | |||
Artisan Global Value Fund – Institutional Shares | 7.72 | % | ||
MSCI ACWI IndexSM | 7.32 |
(1) | For the period from commencement of operations (July 17, 2012) through September 30, 2012; not annualized. |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. The Fund’s return may vary greatly over short periods, and current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners’ contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 100 for a description of the index.
6
INVESTING ENVIRONMENT
Global equity markets advanced during the since-inception period ended September 30, 2012. While the euro crisis continued during the period, investor sentiment received a boost as central banks around the world continued to pour liquidity into global markets. Meanwhile, earnings reports showed that many companies were weathering the slow growth economic environment.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 17.3 | % | 12.1 | % | ||||
Consumer Staples | 13.2 | 11.6 | ||||||
Energy | 2.1 | 2.1 | ||||||
Financials | 26.8 | 23.2 | ||||||
Healthcare | 7.9 | 6.0 | ||||||
Industrials | 11.9 | 6.9 | ||||||
Information Technology | 13.7 | 15.0 | ||||||
Materials | 1.7 | 1.2 | ||||||
Other assets less liabilities | 5.4 | 21.9 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the since-inception period ended September 30, 2012, Artisan Global Value Fund returned 7.72%, outperforming the MSCI All Country World IndexSM, which returned 7.32% over the same period.
Performance of the following stocks had a positive impact on the portfolio during the period: Google Inc., an Internet search company; Lloyds Banking Group plc, a banking and financial services company; Signet Jewelers Ltd., a jewelry retailer; Aon PLC, an insurance services holding company; and Compass Group PLC, a catering company.
Notable detractors included: American Express Company, a global payment and travel company; and SANKYO CO., LTD., a pachinko machine manufacturer.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 54.2 | % | 47.6 | % | ||||
Europe | 32.6 | 27.1 | ||||||
Pacific Basin | 7.8 | 3.4 |
FUND CHANGES
We did not identify any new investment opportunities for the portfolio or exit any positions during the period.
7
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan International Fund employs a fundamental stock selection process focused on identifying long-term growth opportunities to build a portfolio of non-U.S. growth companies of all market capitalizations. The investment team seeks to invest in companies within its preferred themes with sustainable growth characteristics at attractive valuations that do not fully reflect their long-term potential.
Themes. The team identifies long-term secular (as opposed to cyclical) growth trends with the objective of investing in companies that have meaningful exposure to these trends. The team’s fundamental analysis focuses on those industry leaders with attractive growth and valuation characteristics that will be long-term beneficiaries any structural change and/or trend.
Sustainable Growth. The team applies a fundamental approach to identifying the long-term, sustainable growth characteristics of potential investments. The team seeks high-quality companies that typically have a sustainable competitive advantage, a superior business model and a high-quality management team.
Valuation. The team uses multiple valuation metrics to establish a target price range. The team assesses the relationship between its estimate of a company’s sustainable growth prospects and its current valuation.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (7/1/1997 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan International Fund – Institutional Shares | 30.37 | % | 6.80 | % | -2.09 | % | 9.39 | % | 8.15 | % | ||||||||||
MSCI EAFE® Growth Index | 14.81 | 4.32 | -4.23 | 7.82 | 2.20 | |||||||||||||||
MSCI EAFE® Index | 13.75 | 2.12 | -5.24 | 8.20 | 3.27 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. See page 101 for a description of each index.
8
INVESTING ENVIRONMENT
Over the past twelve-month period ended September 30, 2012, investors were presented with plenty of market-moving headlines. As the eurozone crisis continued, government actions took center stage. Policy promises and stimulus measures spurred pro-cyclical rallies while ongoing concerns about slow growth worked to pare back some of those gains. Despite the prevalent macroeconomic concerns, stocks moved ahead.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 19.0 | % | 12.4 | % | ||||
Consumer Staples | 28.6 | 28.5 | ||||||
Energy | 4.4 | 2.6 | ||||||
Financials | 14.8 | 18.4 | ||||||
Healthcare | 2.2 | 6.2 | ||||||
Industrials | 12.9 | 12.9 | ||||||
Information Technology | 4.4 | 5.5 | ||||||
Materials | 7.6 | 8.0 | ||||||
Telecommunication Services | 2.5 | 3.7 | ||||||
Other assets less liabilities | 3.6 | 1.8 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan International Fund returned 30.37%, outperforming the MSCI EAFE® and MSCI EAFE® Growth indices, which returned 13.75% and 14.81%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Macau casino operator Sands China Ltd.; Belgian brewer Anheuser-Busch InBev NV; Canadian freight and intermodal services provider Canadian Pacific Railway Limited; Japanese cigarette and tobacco products manufacturer JAPAN TOBACCO INC.; and German industrial gas company Linde AG.
Notable detractors included: French financial services company Societe Generale; Japanese manufacturer of electrical insulators NGK INSULATORS, LTD.; Argentina-based franchisee for an American fast-food restaurant Arcos Dorados Holdings, Inc.; Japanese trading company MITSUI & CO., LTD.; and Chinese financial services company China Construction Bank Corporation.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Europe | 52.2 | % | 53.4 | % | ||||
Pacific Basin | 31.2 | 24.8 | ||||||
Emerging Markets | 7.9 | 11.0 | ||||||
Americas | 5.1 | 9.0 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period including German financial services company Muenchener Rueckversicherungs-Gesellschaft AG, Ireland-based health care products company Covidien PLC, British financial services company HSBC Holdings plc, German chemical manufacturer Henkel AG & Co. KGaA and Chinese Internet services provider Tencent Holdings Limited. We funded these purchases in part by selling our positions in Siemens AG, Compagnie Financière Richemont SA, Adecco SA, Petróleo Brasileiro S.A. and VINCI SA.
9
ARTISAN INTERNATIONAL VALUE FUND
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan International Value Fund employs a fundamental investment process to construct a diversified portfolio of stocks of undervalued non-U.S. companies of all sizes. The Fund’s investment process focuses on identifying what the investment team considers to be high-quality, undervalued businesses that offer the potential for superior risk/reward outcomes. The team’s in-depth research process focuses on four key investment characteristics:
Undervaluation. Determining the intrinsic value of the business is the heart of the team’s research process. The team believes that intrinsic value represents the amount that a buyer would pay to own a company’s future cash flows. The team seeks to invest at a significant discount to its estimate of the intrinsic value of a business.
Business quality. The team seeks to invest in companies with histories of generating strong free cash flow, improving returns on capital and strong competitive positions in their industries.
Financial strength. The team believes that investing in companies with strong balance sheets helps to reduce the potential for capital risk and provides company management the ability to build value when attractive opportunities are available.
Shareholder-oriented management. The team’s research process attempts to identify management teams with a history of building value for shareholders.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (10/1/2006 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | Since Inception | ||||||||||||
Artisan International Value Fund – Institutional Shares | 23.19 | % | 9.44 | % | 3.01 | % | 4.69 | % | ||||||||
MSCI EAFE® Value Index | 12.59 | -0.11 | -6.33 | -2.12 | ||||||||||||
MSCI EAFE® Index | 13.75 | 2.12 | -5.24 | -0.78 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. See page 101 for a description of each index.
10
INVESTING ENVIRONMENT
International equity markets experienced more of the same volatility that they have been experiencing for the past few years. The euro crisis continued during the year ended September 30, 2012 and most economic data suggested a sluggish, slowing global economy. Despite all of the macro negativity, stocks moved ahead and posted a double-digit gain for the year ended September 30, 2012. Investor sentiment received a boost as central banks around the world continued to pour liquidity into global markets. Meanwhile, earnings reports showed that many companies were weathering the slow growth economic environment.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 23.4 | % | 20.2 | % | ||||
Consumer Staples | 14.9 | 15.4 | ||||||
Energy | 2.6 | 2.5 | ||||||
Financials | 21.7 | 19.7 | ||||||
Healthcare | 7.9 | 8.3 | ||||||
Industrials | 15.6 | 14.5 | ||||||
Information Technology | 7.0 | 6.4 | ||||||
Materials | 2.5 | 2.2 | ||||||
Other assets less liabilities | 4.4 | 10.8 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan International Value Fund returned 23.19%, outperforming the MSCI EAFE® and MSCI EAFE® Value indices, which returned 13.75% and 12.59%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Compass Group PLC, a catering company; Qinetiq Group PLC, a defense technology company; Signet Jewelers Ltd., a jewelry retailer; Diageo plc, a maker of alcoholic beverages; HeidelbergCement AG, an aggregates and cement producer.
Notable detractors included: SANKYO CO., LTD., a pachinko machine manufacturer; Societe Television Francaise 1, a French television channel operator; Daiwa Securities Group Inc., a financial services provider; Mitsubishi UFJ Financial Group, Inc., a financial and investment services provider; and SEINO HOLDINGS CO., LTD., a provider of transportation and logistics solutions.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Europe | 61.9 | % | 59.4 | % | ||||
Americas | 17.0 | 18.7 | ||||||
Pacific Basin | 16.2 | 11.1 | ||||||
Emerging Markets | 0.5 | 0.0 |
FUND CHANGES
We identified some new investment opportunities for the portfolio during the period, including insurance services holding company Aon PLC; food retailer Tesco plc; branded consumer goods manufacturer Orkla ASA; banking machines and cash registers manufacturer Wincor Nixdorf AG; and coffee and tea company DE Master Blenders 1753 NV. We funded these purchases in part by selling our positions in Mitsubishi UFJ Financial Group, Inc., Nestle SA, Daiwa Securities Group Inc., Lancashire Holdings Ltd and BAE Systems plc.
11
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Mid Cap Fund employs a fundamental investment process to construct a diversified portfolio of primarily U.S. mid-cap growth companies. The Fund’s investment process focuses on two distinct areas – security selection and capital allocation.
The Fund’s investment team attempts to identify companies that possess franchise characteristics that are selling at attractive valuations and benefiting from an accelerating profit cycle.
Franchise characteristics. These are characteristics that the team believes help to protect a company’s stream of cash flow from the effects of competition. The team looks for companies with at least two of the following characteristics: low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name.
Attractive valuations. Through its own fundamental research, the team estimates the amount a private market buyer would pay to buy the entire company (the company’s “intrinsic value” or “private market value”) and considers whether to purchase a stock if it sells at a discount to that estimate.
Accelerating profit cycle. The team tries to invest in companies that are well positioned for long-term growth, at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.
Based on the investment team’s fundamental analysis of a company’s profit cycle, portfolio holdings develop through three stages. GardenSM investments are small positions in the early part of their profit cycle that will warrant a more sizeable allocation once their profit cycle accelerates. CropSM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycle. HarvestSM investments are positions that are being reduced as they near the team’s estimate of full valuation or their profit cycle begins to decelerate.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (7/1/2000 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception | |||||||||||||||
Artisan Mid Cap Fund – Institutional Shares | 24.95 | % | 17.22 | % | 5.18 | % | 11.94 | % | 6.32 | % | ||||||||||
Russell Midcap® Growth Index | 26.69 | 14.73 | 2.54 | 11.11 | 1.48 | |||||||||||||||
Russell Midcap® Index | 28.03 | 14.26 | 2.24 | 11.18 | 6.56 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 101 for a description of each index.
12
INVESTING ENVIRONMENT
In the one-year period ended September 30, 2012, mid-cap stocks, as represented by the Russell Midcap® and Midcap® Growth indices, posted a positive return. Healthy corporate profitability and continued, albeit slow, economic progress from the lows following the 2008 financial crisis were positive influences on market returns. Conversely, concerns related to high sovereign debt levels in developed regions, particularly in Europe, created market volatility and fueled uncertainty regarding the sustainability of the economic recovery. Signs of economic activity leveling out in several major emerging markets countries also added to concerns.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 19.6 | % | 19.5 | % | ||||
Consumer Staples | 2.6 | 1.2 | ||||||
Energy | 7.3 | 7.7 | ||||||
Financials | 5.1 | 5.3 | ||||||
Healthcare | 22.5 | 23.7 | ||||||
Industrials | 12.6 | 13.0 | ||||||
Information Technology | 25.9 | 25.3 | ||||||
Other assets less liabilities | 4.4 | 4.3 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Mid Cap Fund returned 24.95%, underperforming the Russell Midcap® and Russell Midcap® Growth indices, which returned 28.03% and 26.69%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Regeneron Pharmaceuticals, Inc., a biopharmaceutical company; Discover Financial Services, a diversified financial services company; AMERIGROUP Corporation, a managed care company; athenahealth, Inc., an internet-based business services provider in the health care industry; and Cameron International Corporation, an equipment provider to the oil and gas industry.
Notable detractors included: Diamond Foods, Inc., a packaged food company; Ctrip.com International, Ltd., an online/call-center travel agency provider; Universal Display Corporation, a provider of display technologies; VeriFone Systems, Inc., an electronic payment services company; and Green Mountain Coffee Roasters, Inc., a company in the specialty coffee industry.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Cigna Corporation, a health services company; LinkedIn Corporation, a professional services networking website provider; Rockwell Automation, Inc., an industrial automation control company; ARIAD Pharmaceuticals, Inc., a developer of treatments for cancer; and DaVita Inc., a dialysis services provider. We funded these purchases in part by selling our positions in Broadcom Corporation, Gardner Denver, Inc., Cooper Industries plc, Juniper Networks, Inc. and Ctrip.com International, Ltd.
13
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Mid Cap Value Fund employs a fundamental investment process to construct a diversified portfolio of stocks of medium-sized U.S. companies that the investment team believes are undervalued, in solid financial condition and have attractive business economics. The team believes companies with these characteristics are less likely to experience eroding values over the long term.
Attractive valuation. The team values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that the team believes would be reasonable. The team generally will purchase a security if the stock price falls below or toward the lower end of that range.
Sound financial condition. The team favors companies with an acceptable level of debt and positive cash flow. At a minimum, the team tries to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interests of the companies’ shareholders.
Attractive business economics. The team favors cash-producing businesses that it believes are capable of earning acceptable returns on capital over the company’s business cycle.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (2/1/2012 to 9/30/2012)
TOTAL RETURNS (as of 9/30/2012)
Fund / Index | Since Inception(1) | |||
Artisan Mid Cap Value Fund – Institutional Shares | 1.05 | % | ||
Russell Midcap® Value Index | 7.20 | |||
Russell Midcap® Index | 6.01 |
(1) | For the period from commencement of operations (February 1, 2012) through September 30, 2012; not annualized. |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. The Fund’s return may vary greatly over short periods, and current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 101 for a description of each index.
14
INVESTING ENVIRONMENT
Despite softening economic growth in Europe and Asia and a tepid economic recovery in the U.S., stocks moved higher during the since-inception period ended September 30, 2012. Stocks were helped by corporate earnings growth and actions taken by central banks around the world to ease monetary conditions.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 7.3 | % | 7.9 | % | ||||
Consumer Staples | 5.5 | 3.4 | ||||||
Energy | 7.1 | 11.5 | ||||||
Financials | 21.8 | 20.1 | ||||||
Healthcare | 3.2 | 4.5 | ||||||
Industrials | 18.9 | 18.0 | ||||||
Information Technology | 25.0 | 25.7 | ||||||
Utilities | 7.9 | 1.9 | ||||||
Other assets less liabilities | 3.3 | 7.0 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the since-inception period ended September 30, 2012, Artisan Mid Cap Value Fund returned 1.05%, underperforming the Russell Midcap® and Russell Midcap® Value indices, which returned 6.01% and 7.20%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: The Allstate Corporation, a property and casualty insurer; Alleghany Corporation, a property and casualty insurer; Hess Corporation, an integrated oil and gas company; Mohawk Industries, Inc., a flooring manufacturer; and Mattel, Inc., a toy company.
Notable detractors included: Lexmark International, Inc., a printer vendor; Ingram Micro Inc., an information technology distributor; Arrow Electronics, Inc., a distributor of electronic components and computer products; Avnet, Inc., a distributor of electronic components and computer products; and Lam Research Corporation, a semiconductor equipment company.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including previously mentioned Lam Research Corporation and Hess Corporation; in addition to Becton, Dickinson and Company, a medical devices company; Autodesk, Inc., a design and engineering software provider; and Torchmark Corporation, an insurance holding company. We funded these purchases in part by selling our positions in Total System Services, Inc., Equifax Inc., Campbell Soup Company, Xcel Energy Inc., and Validus Holdings, Ltd.
15
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Small Cap Fund employs a fundamental investment process to construct a diversified portfolio of primarily U.S. small-cap growth companies. The Fund’s investment process focuses on two distinct areas – security selection and capital allocation.
The Fund’s investment team attempts to identify companies that possess franchise characteristics that are selling at attractive valuations and benefiting from an accelerating profit cycle.
Franchise characteristics. These are characteristics that the team believes help to protect a company’s stream of cash flow from the effects of competition. The team looks for companies with at least two of the following characteristics: low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name.
Attractive valuations. Through its own fundamental research, the team estimates the amount a private market buyer would pay to buy the entire company (the company’s “intrinsic value” or “private market value”) and considers whether to purchase a stock if it sells at a discount to that estimate.
Accelerating profit cycle. The team tries to invest in companies that are well positioned for long-term growth, at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.
Based on the investment team’s fundamental analysis of a company’s profit cycle, portfolio holdings develop through three stages. GardenSM investments are small positions in the early part of their profit cycle that will warrant a more sizeable allocation once their profit cycle accelerates. CropSM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycle. HarvestSM investments are positions that are being reduced as they near the team’s estimate of full valuation or their profit cycle begins to decelerate.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (5/7/2012 to 9/30/2012)
TOTAL RETURNS (as of 9/30/2012)
Fund / Index | Since Inception(1) | |||
Artisan Small Cap Fund – Institutional Shares | 6.47 | % | ||
Russell 2000® Growth Index | 5.45 | |||
Russell 2000® Index | 6.17 |
(1) | For the period from commencement of operations (May 7, 2012) through September 30, 2012; not annualized. |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. The Fund’s return may vary greatly over short periods, and current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 101 for a description of each index.
16
INVESTING ENVIRONMENT
In the period starting with the inception of the Fund on May 7, 2012 through September 30, 2012, small-cap stocks, as represented by the Russell 2000® and Russell 2000® Growth indices, posted positive returns. Continued, albeit slow, economic progress from the lows following the 2008 financial crisis, and proactive stimulus actions taken by policy makers, were positive influences on market returns. Conversely, concerns related to high sovereign debt levels in developed regions, particularly in Europe, created market volatility and fueled uncertainty regarding the sustainability of the economic recovery. Signs of economic activity leveling out in several major emerging markets countries also added to concerns.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 17.7 | % | 14.3 | % | ||||
Consumer Staples | 5.0 | 3.9 | ||||||
Energy | 4.0 | 4.9 | ||||||
Financials | 4.4 | 2.5 | ||||||
Healthcare | 23.5 | 19.5 | ||||||
Industrials | 18.9 | 19.3 | ||||||
Information Technology | 22.4 | 30.4 | ||||||
Utilities | 0.3 | 0.0 | ||||||
Other assets less liabilities | 3.8 | 5.2 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the since-inception period ended September 30, 2012, Artisan Small Cap Fund returned 6.47%, outperforming the Russell 2000® and Russell 2000® Growth indices, which returned 6.17% and 5.45%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: AMERIGROUP Corporation, a managed care company; HMS Holdings Corp., a provider of cost containment services to state Medicaid programs and other health care payors; athenahealth, Inc., an internet-based services provider to the health care industry; NetSuite Inc., a provider of Software-as-a-Service business applications for small and medium-sized businesses; and ARIAD Pharmaceuticals, Inc., a biopharmaceutical company that develops cancer treatments.
Notable detractors included: Incyte Corporation, developer of treatments in the areas of hematology, oncology and inflammation; Woodward, Inc., a provider of energy control and optimization solutions for original equipment manufacturers; Qlik Technologies Inc., a developer of software designed to help customers manage data; Cepheid, a molecular diagnostics company; and Informatica Corporation, a provider of enterprise data integration software and services.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Liquidity Services, Inc., a provider of online auction services for surplus and salvage assets; Teledyne Technologies Incorporated, a provider of electronic subsystems and instrumentation; Vocera Communications, Inc., a provider of mobile communications solutions; Bruker Corporation, a manufacturer of scientific instruments used in research and analysis; and Isis Pharmaceuticals, Inc., a developer of drugs based on antisense technology. We funded these purchases in part by selling our positions in AMERIGROUP Corporation, Hexcel Corporation, LogMeIn, Inc., Vera Bradley, Inc., and RPX Corporation.
17
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Small Cap Value Fund employs a fundamental investment process to construct a diversified portfolio of small-cap U.S. companies that the team believes are undervalued, in solid financial condition and have attractive business economics. The team believes companies with these characteristics are less likely to experience eroding values over the long term.
Attractive valuation. The team values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that the team believes would be reasonable. The team generally will purchase a security if the stock price falls below or toward the lower end of that range.
Sound financial condition. The team favors companies with an acceptable level of debt and positive cash flow. At a minimum, the team tries to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interest of the companies’ shareholders.
Attractive business economics. The team favors cash-producing businesses that it believes are capable of earning acceptable returns on capital over the company’s business cycle.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (2/1/2012 to 9/30/2012)
TOTAL RETURNS (as of 9/30/2012)
Fund / Index | Since Inception(1) | |||
Artisan Small Cap Value Fund – Institutional Shares | -5.57 | % | ||
Russell 2000® Value Index | 5.07 | |||
Russell 2000® Index | 4.47 |
(1) | For the period from commencement of operations (February 1, 2012) through September 30, 2012; not annualized. |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. The Fund’s return may vary greatly over short periods, and current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 101 for a description of each index.
18
INVESTING ENVIRONMENT
Despite softening economic growth in Europe and Asia and a tepid economic recovery in the U.S., stocks moved higher during the since-inception period ended September 30, 2012. Stocks were helped by corporate earnings growth and actions taken by central banks around the world to ease monetary conditions.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 12.1 | % | 14.5 | % | ||||
Consumer Staples | 1.5 | 0.7 | ||||||
Energy | 10.4 | 13.8 | ||||||
Financials | 8.9 | 6.2 | ||||||
Healthcare | 2.4 | 2.7 | ||||||
Industrials | 27.6 | 26.2 | ||||||
Information Technology | 23.9 | 24.5 | ||||||
Materials | 5.9 | 5.9 | ||||||
Telecommunication Services | 1.5 | 1.6 | ||||||
Utilities | 4.3 | 0.0 | ||||||
Other assets less liabilities | 1.5 | 3.9 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the since-inception period ended September 30, 2012, Artisan Small Cap Value Fund declined 5.57%, underperforming the Russell 2000® and Russell 2000® Value indices, which returned 4.47% and 5.07%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Skechers U.S.A., Inc., a footwear designer; Comstock Resources, Inc., an oil and gas producer; Jack in the Box Inc., a restaurant operator; CoreLogic, Inc., an analytics services company; and Platinum Underwriters Holdings, Ltd. a reinsurance provider.
Notable detractors included: FTI Consulting, Inc., a provider of restructuring and bankruptcy services; ADTRAN, Inc., a networking and communications equipment provider; Lone Pine Resources Inc., an oil and gas producer; Schnitzer Steel Industries, Inc., a scrap metal processor; and Lexmark International, Inc., a printer vendor.
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including previously mentioned ADTRAN, Inc.; Unit Corporation, a contract land driller and oil and gas producer; energy services companies Newpark Resources, Inc. and Key Energy Services, Inc.; and Volterra Semiconductor Corporation, a semiconductor manufacturer. We funded these purchases in part by selling our positions in Manhattan Associates, Inc., Quanex Building Products Corporation, Cal-Maine Foods, Inc., Cleco Corporation, and Portland General Electric Company.
19
INSTITUTIONAL SHARES
INVESTMENT PROCESS HIGHLIGHTS
Artisan Value Fund employs a fundamental investment process to construct a diversified portfolio of equity securities across a broad capitalization range that the team believes are undervalued, in solid financial condition and have attractive business economics. The team believes companies with these characteristics are less likely to experience eroding values over the long term.
Attractive valuation. The team values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that the team believes would be reasonable. The team generally will purchase a security if the stock price falls below or toward the lower end of that range.
Sound financial condition. The team favors companies with an acceptable level of debt and positive cash flow. At a minimum, the team tries to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interest of the companies’ shareholders.
Attractive business economics. The team favors cash-producing businesses that it believes are capable of earning acceptable returns on capital over the company’s business cycle.
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $1,000,000 INVESTMENT (7/26/2011 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | Since Inception | ||||||
Artisan Value Fund – Institutional Shares | 25.64 | % | 6.82 | % | ||||
Russell 1000® Value Index | 30.92 | 8.50 | ||||||
Russell 1000® Index | 30.06 | 8.41 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. The Fund’s return may vary greatly over short periods, and current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 800.399.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. See page 101 for a description of each index.
20
INVESTING ENVIRONMENT
After a tumultuous third quarter of 2011, when fiscal strains in the U.S. and Europe weighed on risk assets, stocks rebounded sharply to begin the one-year period ended September 30, 2012. Despite softening economic growth in Europe and Asia and a tepid economic recovery in the U.S., stocks continued to move higher during the period in response to corporate earnings growth and actions taken by central banks around the world to ease monetary conditions.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 9.1 | % | 3.8 | % | ||||
Consumer Staples | 10.3 | 4.7 | ||||||
Energy | 10.8 | 14.3 | ||||||
Financials | 27.4 | 23.4 | ||||||
Healthcare | 2.9 | 6.4 | ||||||
Industrials | 2.6 | 2.6 | ||||||
Information Technology | 34.4 | 29.2 | ||||||
Materials | 0.0 | 3.9 | ||||||
Telecommunication Services | 0.0 | 3.1 | ||||||
Other assets less liabilities | 2.5 | 8.6 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Value Fund returned 25.64%, underperforming the Russell 1000® and Russell 1000® Value indices, which returned 30.06% and 30.92%, respectively.
Performance of the following stocks had a positive impact on the portfolio during the period: Apple Inc., a consumer electronics company; Microsoft Corporation, a software maker; Berkshire Hathaway Inc., a holding company; Cisco Systems, Inc., a provider of networking solutions; and The Allstate Corporation, a property and casualty insurer.
Notable detractors included: Chesapeake Energy Corporation, an oil and gas exploration and production company; Baker Hughes Incorporated, an oilfield services company; Tesco plc, a food retailer; WellPoint, Inc., a health benefits company; and Ingram Micro Inc., a distributor of information technology products.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Americas | 91.8 | % | 80.6 | % | ||||
Emerging Markets | — | 7.0 | ||||||
Europe | 5.7 | 3.8 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Samsung Electronics Co., Ltd., a diversified electronics manufacturer, previously mentioned Baker Hughes Incorporated; Vodafone Group Plc, a global wireless carrier; Oracle Corporation, an enterprise software company; and The Kroger Co., a food retailer. We funded these purchases in part by selling our positions in Wal-Mart Stores, Inc., Carnival Corporation, Total System Services, Inc., Aflac Incorporated, and Unilever PLC.
21
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 98.3% | ||||||||
BRAZIL - 14.7% | ||||||||
Anhanguera Educacional Participacoes SA | 486,700 | $ | 8,091 | |||||
Banco do Brasil S.A.(1)(2) | 107,980 | 1,321 | ||||||
Banco do Brasil S.A. | 470,800 | 5,759 | ||||||
BM&F BOVESPA SA | 1,390,776 | 8,404 | ||||||
BR Properties SA | 426,320 | 5,562 | ||||||
Companhia Energetica de Minas Gerais-CEMIG, Preferred(3) | 632,738 | 7,672 | ||||||
Companhia Vale do Rio Doce | 947,013 | 17,046 | ||||||
Hypermarcas SA(4) | 1,791,538 | 13,159 | ||||||
Julio Simoes Logistica SA | 392,798 | 2,129 | ||||||
Magazine Luiza SA | 740,900 | 4,473 | ||||||
Magnesita Refratarios SA | 942,900 | 3,488 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 2,504,951 | 4,720 | ||||||
Petroleo Brasileiro S.A. | 2,274,489 | 26,142 | ||||||
Randon SA Implementos e Participacoes, Preferred(3) | 1,313,824 | 7,628 | ||||||
|
| |||||||
115,594 | ||||||||
CHILE - 1.3% | ||||||||
Empresa Nacional de Telecomunicaciones S.A. | 239,319 | 4,989 | ||||||
S.A.C.I. Falabella | 502,065 | 5,059 | ||||||
|
| |||||||
10,048 | ||||||||
CHINA - 11.7% | ||||||||
Ajisen (China) Holdings Limited | 6,764,913 | 4,476 | ||||||
Chaoda Modern Agriculture (Holdings) Limited(2)(4)(5) | 12,474,536 | 48 | ||||||
China High Precision Automation Group Ltd.(2)(5) | 9,066,000 | 725 | ||||||
China Life Insurance Co., Limited, H Shares | 2,340,800 | 6,747 | ||||||
China Shenhua Energy Company Limited | 1,240,500 | 4,799 | ||||||
China Unicom (Hong Kong) Limited | 5,127,500 | 8,411 | ||||||
CNOOC Limited | 6,879,000 | 14,088 | ||||||
Digital China Holdings Limited | 4,569,460 | 7,284 | ||||||
GOME Electrical Appliances Holdings Limited(4) | 35,408,881 | 3,745 | ||||||
Huabao International Holdings Limited | 13,530,322 | 7,678 | ||||||
Huaneng Power International, Inc., H Shares | 9,089,523 | 6,916 | ||||||
Mindray Medical International Limited, Class A (DR) | 176,317 | 5,926 | ||||||
Noah Holdings Ltd. (DR) | 435,033 | 1,879 | ||||||
Sinopharm Group Co, H Shares | 2,964,500 | 9,481 | ||||||
Springland International Holdings Ltd. | 6,193,590 | 3,059 | ||||||
CHINA (CONTINUED) | ||||||||
Zhuzhou CSR Times Electric Co., Ltd., | 2,694,515 | $ | 6,922 | |||||
|
| |||||||
92,184 | ||||||||
COLOMBIA - 1.0% | ||||||||
Grupo de Inversiones Suramericana | 349,828 | 5,917 | ||||||
Grupo de Inversiones Suramericana, Preferred(3) | 86,758 | 1,605 | ||||||
|
| |||||||
7,522 | ||||||||
EGYPT - 0.5% | ||||||||
Egyptian Financial Group-Hermes Holding(4)(5) | 1,805,980 | 3,567 | ||||||
HONG KONG - 1.0% | ||||||||
AIA Group Ltd. | 2,091,065 | 7,753 | ||||||
HUNGARY - 1.0% | ||||||||
MOL Hungarian Oil and Gas Nyrt., Class A | 95,748 | 7,927 | ||||||
INDIA - 7.2% | ||||||||
ICICI Bank Limited | 451,882 | 9,098 | ||||||
India Cements Limited | 3,509,809 | 6,298 | ||||||
Infosys Limited | 215,053 | 10,344 | ||||||
Mahindra & Mahindra Ltd. | 499,614 | 8,183 | ||||||
Petronet LNG Ltd. | 451,941 | 1,353 | ||||||
Power Finance Corporation | 2,158,195 | 7,733 | ||||||
Reliance Infrastructure Ltd. | 606,938 | 6,182 | ||||||
Tech Mahindra Ltd. | 244,896 | 4,519 | ||||||
Welspun Corporation Ltd. | 1,637,334 | 3,145 | ||||||
|
| |||||||
56,855 | ||||||||
INDONESIA - 4.2% | ||||||||
Indofood CBP Sukses Makmur TBK PT | 8,411,000 | 5,581 | ||||||
PT Astra International Tbk | 18,549,870 | 14,344 | ||||||
PT Bank Negara Indonesia Tbk | 24,013,018 | 9,849 | ||||||
PT Gudang Garam Tbk | 751,473 | 3,647 | ||||||
|
| |||||||
33,421 | ||||||||
ITALY - 0.8% | ||||||||
Tenaris S.A. (DR) | 162,820 | 6,638 | ||||||
KAZAKHSTAN - 1.0% | ||||||||
KazMunaiGas Exploration Production (DR) | 407,659 | 7,521 | ||||||
KOREA - 13.5% | ||||||||
Daewoo Shipbuilding & Marine Engineering Co., Ltd. | 318,214 | 7,430 | ||||||
E-Mart Co., Ltd. | 28,357 | 6,187 | ||||||
Hyundai Mobis | 33,150 | 9,261 |
22
Shares Held | Value | |||||||
KOREA (CONTINUED) | ||||||||
KB Financial Group, Inc. | 299,442 | $ | 10,696 | |||||
LOCK&LOCK CO., LTD. | 151,814 | 3,258 | ||||||
Samsung Electronics Co., Ltd. | 44,330 | 53,686 | ||||||
Shinhan Financial Group Co., Ltd. | 328,770 | 11,226 | ||||||
Shinsegae Co., Ltd. | 22,118 | 4,179 | ||||||
|
| |||||||
105,923 | ||||||||
MEXICO - 5.7% | ||||||||
America Movil SAB de C.V., Series L | 13,458,223 | 17,147 | ||||||
Grupo Financiero Banorte S.A. de C.V., O Shares | 1,148,844 | 6,493 | ||||||
Grupo Financiero Santander Mexico SAB de CV, Series B (DR)(4) | 358,037 | 4,905 | ||||||
Grupo Televisa S.A., Series CPO | 1,700,199 | 8,018 | ||||||
OHL Mexico SAB de CV(4) | 5,037,080 | 8,128 | ||||||
|
| |||||||
44,691 | ||||||||
PANAMA - 0.8% | ||||||||
Copa Holdings SA, Class A(3) | 74,186 | 6,029 | ||||||
PERU - 0.5% | ||||||||
Cementos Pacasmayo S.A.A. (DR)(4) | 359,298 | 4,089 | ||||||
PHILIPPINES - 0.9% | ||||||||
Philippine Long Distance Telephone Company | 110,000 | 7,341 | ||||||
RUSSIA - 7.4% | ||||||||
Globaltrans Investment PLC (DR) | 454,787 | 9,450 | ||||||
LSR Group O.J.S.C. (DR) | 1,771,168 | 8,236 | ||||||
LUKOIL (DR) | 289,575 | 17,838 | ||||||
Mobile TeleSystems (DR) | 468,213 | 8,203 | ||||||
Polymetal International PLC | 404,286 | 7,083 | ||||||
Sberbank of Russia | 2,596,586 | 7,595 | ||||||
|
| |||||||
58,405 | ||||||||
SOUTH AFRICA - 5.1% | ||||||||
African Bank Investments Limited | 1,793,730 | 7,123 | ||||||
Harmony Gold Mining Company Limited | 846,231 | 7,100 | ||||||
Impala Platinum Holdings Limited | 416,180 | 6,951 | ||||||
Imperial Holdings Limited | 202,232 | 4,556 | ||||||
Mondi Limited | 499,190 | 5,070 | ||||||
Naspers Limited, N Shares | 157,564 | 9,749 | ||||||
|
| |||||||
40,549 | ||||||||
SWEDEN - 0.5% | ||||||||
Alliance Oil Company Ltd. (DR)(4) | 492,362 | 3,890 | ||||||
TAIWAN - 11.1% | ||||||||
Chinatrust Financial Holding Company Ltd. | 12,897,879 | 7,788 | ||||||
E Ink Holdings Inc. | 5,910,000 | 6,452 | ||||||
Far Eastern Textile Ltd. | 5,772,339 | 6,518 | ||||||
Hon Hai Precision Industry Co., Ltd. | 5,965,213 | 18,722 | ||||||
HTC Corporation | 417,251 | 4,042 | ||||||
MediaTek Incorporation | 893,794 | 9,437 | ||||||
Taiwan Fertilizer Co., Ltd. | 2,651,000 | 7,190 | ||||||
TAIWAN (CONTINUED) | ||||||||
Taiwan Semiconductor Manufacturing Company Ltd. | 9,021,647 | $ | 27,637 | |||||
|
| |||||||
87,786 | ||||||||
THAILAND - 2.7% | ||||||||
Advanced Info Service Public Company Limited (DR) | 906,500 | 6,303 | ||||||
Bangkok Bank Public Company Limited (DR) | 1,576,400 | 9,936 | ||||||
Bumrungrad Hospital Public Company Limited (DR) | 707,516 | 1,885 | ||||||
PTT Exploration and Production Public Company Limited (DR) | 538,800 | 2,845 | ||||||
|
| |||||||
20,969 | ||||||||
TURKEY - 4.2% | ||||||||
Arcelik A.S. | 760,519 | 4,045 | ||||||
Emlak Konut Gayrimenkul Yatirim | 5,719,853 | 7,988 | ||||||
Tekfen Holding A.S. | 2,114,262 | 7,670 | ||||||
Turk Ekonomi Bankasi A.S.(4) | 1,752,063 | 1,687 | ||||||
Turk Hava Yollari Anonim Ortakligi (THY)(4) | 2,215,540 | 4,635 | ||||||
Turkiye Sinai Kalkinma Bankasi A.S. | 6,264,761 | 6,972 | ||||||
|
| |||||||
32,997 | ||||||||
UNITED ARAB EMIRATES - 0.5% | ||||||||
Air Arabia(5) | 22,225,071 | 3,951 | ||||||
UNITED KINGDOM - 1.0% | ||||||||
Antofagasta plc | 396,243 | 8,075 | ||||||
|
| |||||||
Total common and preferred stocks | 773,725 | |||||||
Par Amount | ||||||||
CONVERTIBLE DEBENTURES - 0.0% | ||||||||
BRAZIL - 0.0% | ||||||||
PDG Realty SA Empreendimentos e Participacoes - Debenture (0.0%, 9/16/16)(4)(5) | 3,720 | 128 | ||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 1.8% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $14,379 | 14,379 | $ | 14,379 | |||||
|
| |||||||
Total investments - 100.1% | 788,232 | |||||||
Other assets less liabilities - (0.1%) | (976 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(7) | $ | 787,256 | ||||||
|
|
23
(1) | The shares of Banco do Brasil S.A. were acquired in a private placement and are restricted. The shares of Banco do Brasil S.A. are freely tradeable outside the United States, where the Fund expects to trade them. |
Security | Acquisition Dates | Cost | Value | Percentage of Total Net Assets | ||||||||||||
Banco do Brasil S.A. | 7/1/2010 | $ | 1,477 | $ | 1,321 | 0.2 | % |
(2) | Security has been determined to be illiquid under procedures established by the board of directors of Artisan Partners Funds, Inc. (“Artisan Funds”). In total, the value of securities determined to be illiquid was $2,094, or 0.3% of total net assets. |
(3) | Non-voting shares. |
(4) | Non-income producing security. |
(5) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $8,419 or 1.1% of total net assets. |
(6) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 2.375 | % | 5/31/2018 | $ | 14,668 |
(7) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
PORTFOLIO DIVERSIFICATION - September 30, 2012 Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 95,958 | 12.2 | % | ||||
Consumer Staples | 28,622 | 3.6 | ||||||
Energy | 93,041 | 11.8 | ||||||
Financials | 165,839 | 21.1 | ||||||
Healthcare | 17,292 | 2.2 | ||||||
Industrials | 70,490 | 9.0 | ||||||
Information Technology | 142,848 | 18.1 | ||||||
Materials | 86,471 | 11.0 | ||||||
Telecommunication Services | 52,394 | 6.7 | ||||||
Utilities | 20,770 | 2.6 | ||||||
|
|
|
| |||||
Total common and preferred stocks | 773,725 | 98.3 | ||||||
Convertible debentures (1) | 128 | - | (2) | |||||
Short-term investments | 14,379 | 1.8 | ||||||
|
|
|
| |||||
Total investments | 788,232 | 100.1 | ||||||
Other assets less liabilities | (976 | ) | (0.1 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 787,256 | 100.0 | % | ||||
|
|
|
|
(1) | Sector classification of consumer discretionary. |
(2) | Amount rounds to less than 0.1%. |
CURRENCY EXPOSURE - September 30, 2012 Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Brazilian real | $ | 115,722 | 14.7 | % | ||||
British pound | 15,158 | 1.9 | ||||||
Chilean peso | 10,048 | 1.3 | ||||||
Colombian peso | 7,522 | 1.0 | ||||||
Egyptian pound | 3,567 | 0.5 | ||||||
Hong Kong dollar | 92,132 | 11.7 | ||||||
Hungarian forint | 7,927 | 1.0 | ||||||
Indian rupee | 56,855 | 7.2 | ||||||
Indonesian rupiah | 33,421 | 4.2 | ||||||
Korean won | 105,923 | 13.4 | ||||||
Mexican peso | 39,786 | 5.1 | ||||||
Philippine peso | 7,341 | 0.9 | ||||||
South African rand | 40,549 | 5.1 | ||||||
Swedish krona | 3,890 | 0.5 | ||||||
Taiwan dollar | 87,786 | 11.1 | ||||||
Thai baht | 20,969 | 2.7 | ||||||
Turkish lira | 32,997 | 4.2 | ||||||
U.S. dollar | 102,688 | 13.0 | ||||||
United Arab Emirates dirham | 3,951 | 0.5 | ||||||
|
|
|
| |||||
Total investments | $ | 788,232 | 100.0 | % | ||||
|
|
|
|
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Samsung Electronics Co., Ltd. | Korea | 6.8 | % | |||
Taiwan Semiconductor Manufacturing Company Ltd. | Taiwan | 3.5 | ||||
Petroleo Brasileiro S.A. | Brazil | 3.3 | ||||
Hon Hai Precision Industry Co., Ltd. | Taiwan | 2.4 | ||||
LUKOIL | Russia | 2.3 | ||||
America Movil SAB de C.V. | Mexico | 2.2 | ||||
Companhia Vale do Rio Doce | Brazil | 2.2 | ||||
PT Astra International Tbk | Indonesia | 1.8 | ||||
CNOOC Limited | China | 1.8 | ||||
Hypermarcas SA | Brazil | 1.7 | ||||
|
| |||||
Total | 28.0 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
24
ARTISAN GLOBAL OPPORTUNITIES FUND
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 95.4% | ||||||||
AUSTRALIA - 1.1% | ||||||||
James Hardie Industries SE | 390,676 | $ | 3,526 | |||||
BRAZIL - 9.1% | ||||||||
Anhanguera Educacional Participacoes SA | 451,496 | 7,505 | ||||||
BR Malls Participacoes | 212,600 | 2,952 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 183,117 | 2,647 | ||||||
OdontoPrev SA | 1,148,050 | 6,428 | ||||||
Qualicorp SA(1) | 514,031 | 5,020 | ||||||
Raia Drogasil S.A. | 336,800 | 3,869 | ||||||
|
| |||||||
28,421 | ||||||||
CANADA - 1.7% | ||||||||
Tourmaline Oil Corp.(1) | 173,028 | 5,401 | ||||||
CHINA - 2.5% | ||||||||
Baidu, Inc., Class A (DR)(1) | 29,740 | 3,474 | ||||||
Shandong Weigao Group Medical Polymer Company Limited, H Shares | 1,526,545 | 1,977 | ||||||
Tsingtao Brewery Company Limited, H Shares | 450,514 | 2,484 | ||||||
|
| |||||||
7,935 | ||||||||
FRANCE - 3.4% | ||||||||
Ingenico | 74,334 | 3,821 | ||||||
Sanofi | 79,580 | 6,785 | ||||||
|
| |||||||
10,606 | ||||||||
GERMANY - 2.3% | ||||||||
Linde AG | 9,200 | 1,584 | ||||||
SAP AG (DR) | 76,566 | 5,461 | ||||||
|
| |||||||
7,045 | ||||||||
HONG KONG - 0.8% | ||||||||
Hong Kong Exchanges & Clearing Limited | 174,882 | 2,641 | ||||||
INDIA - 2.1% | ||||||||
HDFC Bank Limited (DR) | 127,061 | 4,775 | ||||||
Jubilant Foodworks Limited(1) | 67,961 | 1,763 | ||||||
|
| |||||||
6,538 | ||||||||
INDONESIA - 0.7% | ||||||||
PT Bank Central Asia Tbk | 2,714,342 | 2,241 | ||||||
JAPAN - 2.3% | ||||||||
FANUC CORP. | 34,379 | 5,542 | ||||||
Rakuten, Inc. | 153,800 | 1,567 | ||||||
|
| |||||||
7,109 | ||||||||
SWEDEN - 4.0% | ||||||||
Hexagon AB, Class B | 578,482 | $ | 12,400 | |||||
SWITZERLAND - 1.1% | ||||||||
Compagnie Financiere Richemont SA - Bearer Shares | 55,028 | 3,300 | ||||||
UNITED KINGDOM - 6.1% | ||||||||
ARM Holdings PLC | 773,336 | 7,180 | ||||||
Intertek Group plc | 52,078 | 2,304 | ||||||
Rotork plc | 197,823 | 7,229 | ||||||
Standard Chartered plc | 99,731 | 2,255 | ||||||
|
| |||||||
18,968 | ||||||||
UNITED STATES - 58.2% | ||||||||
Agilent Technologies, Inc. | 159,139 | 6,119 | ||||||
Amazon.com, Inc.(1) | 18,700 | 4,756 | ||||||
Apple Inc. | 22,578 | 15,065 | ||||||
Biogen Idec Inc.(1) | 69,192 | 10,326 | ||||||
Cerner Corporation(1) | 71,977 | 5,572 | ||||||
Citrix Systems, Inc.(1) | 51,841 | 3,969 | ||||||
Discover Financial Services | 305,285 | 12,129 | ||||||
eBay Inc.(1) | 300,693 | 14,557 | ||||||
EMC Corporation(1) | 428,188 | 11,677 | ||||||
Facebook Inc., Class A(1) | 149,013 | 3,226 | ||||||
Google Inc., Class A(1) | 24,612 | 18,570 | ||||||
IHS Inc.(1) | 122,657 | 11,941 | ||||||
Monsanto Company | 177,566 | 16,162 | ||||||
National Oilwell Varco, Inc. | 98,386 | 7,882 | ||||||
Occidental Petroleum Corporation | 75,869 | 6,529 | ||||||
Polo Ralph Lauren Corporation, Class A | 38,934 | 5,888 | ||||||
Precision Castparts Corp. | 22,837 | 3,730 | ||||||
Regeneron Pharmaceuticals, Inc.(1) | 88,461 | 13,504 | ||||||
salesforce.com, inc.(1) | 35,957 | 5,490 | ||||||
Starbucks Corporation | 93,290 | 4,734 | ||||||
|
| |||||||
181,826 | ||||||||
|
| |||||||
Total common stocks | 297,957 |
25
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.9% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $15,330 (Cost $15,330)(2) | $ | 15,330 | $ | 15,330 | ||||
|
| |||||||
Total investments - 100.3% | 313,287 | |||||||
Other assets less liabilities - (0.3%) | (1,014 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(3) | $ | 312,273 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | $ | 15,640 |
(3) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company’s legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
FOREIGN CURRENCY FORWARD CONTRACTS - September 30, 2012 | ||||||||||||||||||||
Dollar values in thousands |
| |||||||||||||||||||
Description | Counterparty | Transaction | Settlement Date | Cost on Origination Date | Value | Unrealized Depreciation | ||||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 2,373 | $ | 2,394 | $ | (21 | ) | ||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 3 | $ | 3 | - | (1) | |||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 258 | $ | 260 | $ | (2 | ) | ||||||||||
|
| |||||||||||||||||||
$ | (23 | ) | ||||||||||||||||||
|
|
(1) | Amount rounds to less than $1. |
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands | ||||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 29,513 | 9.5 | % | ||||
Consumer Staples | 6,353 | 2.0 | ||||||
Energy | 19,812 | 6.3 | ||||||
Financials | 26,993 | 8.6 | ||||||
Healthcare | 55,731 | 17.9 | ||||||
Industrials | 33,393 | 10.7 | ||||||
Information Technology | 104,890 | 33.6 | ||||||
Materials | 21,272 | 6.8 | ||||||
|
|
|
| |||||
Total common stocks | 297,957 | 95.4 | ||||||
Short-term investments | 15,330 | 4.9 | ||||||
|
|
|
| |||||
Total investments | 313,287 | 100.3 | ||||||
Other assets less liabilities | (1,014 | ) | (0.3 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 312,273 | 100.0 | % | ||||
|
|
|
|
CURRENCY EXPOSURE (1) - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Australian dollar | $ | 3,526 | 1.1 | % | ||||
Brazilian real | 28,421 | 9.1 | ||||||
British pound | 18,968 | 6.0 | ||||||
Canadian dollar | 5,401 | 1.7 | ||||||
Euro | 12,190 | 3.9 | ||||||
Hong Kong dollar | 7,102 | 2.3 | ||||||
Indian rupee | 1,763 | 0.6 | ||||||
Indonesian rupiah | 2,241 | 0.7 | ||||||
Japanese yen | 7,109 | 2.3 | ||||||
Swedish krona | 12,400 | 4.0 | ||||||
Swiss franc | 3,300 | 1.0 | ||||||
U.S. dollar | 210,866 | 67.3 | ||||||
|
|
|
| |||||
Total investments | $ | 313,287 | 100.0 | % | ||||
|
|
|
|
(1) | Excludes currency exposure to foreign currency forward contracts. |
26
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Google Inc. | United States | 5.9 | % | |||
Monsanto Company | United States | 5.2 | ||||
Apple Inc. | United States | 4.8 | ||||
eBay Inc. | United States | 4.7 | ||||
Regeneron Pharmaceuticals, Inc. | United States | 4.3 | ||||
Hexagon AB | Sweden | 4.0 | ||||
Discover Financial Services | United States | 3.9 | ||||
IHS Inc. | United States | 3.8 | ||||
EMC Corporation | United States | 3.7 | ||||
Biogen Idec Inc. | United States | 3.3 | ||||
|
| |||||
Total | 43.6 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
27
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS AND EQUITY-LINKED SECURITIES - 78.1% | ||||||||
BELGIUM - 1.6% | ||||||||
Groupe Bruxelles Lambert S.A. | 56,374 | $ | 4,184 | |||||
FRANCE - 3.4% | ||||||||
Publicis Groupe | 65,654 | 3,674 | ||||||
Total SA | 109,829 | 5,448 | ||||||
|
| |||||||
9,122 | ||||||||
GERMANY - 1.2% | ||||||||
HeidelbergCement AG | 60,821 | 3,186 | ||||||
HONG KONG - 0.2% | ||||||||
Guoco Group Limited | 48,647 | 438 | ||||||
IRELAND - 0.7% | ||||||||
Ryanair Holdings PLC, Equity-Linked Security, 144A(1)(2)(3)(4)(5) | 350,396 | 1,990 | ||||||
JAPAN - 3.2% | ||||||||
Credit Saison Co., Ltd. | 92,800 | 2,244 | ||||||
Kao Corporation | 145,200 | 4,279 | ||||||
SANKYO CO., LTD. | 30,357 | 1,414 | ||||||
Stanley Electric Co., Ltd. | 41,700 | 618 | ||||||
|
| |||||||
8,555 | ||||||||
NETHERLANDS - 1.5% | ||||||||
DE Master Blenders 1753 NV(2) | 113,304 | 1,365 | ||||||
ING Groep N.V.(2) | 345,625 | 2,731 | ||||||
|
| |||||||
4,096 | ||||||||
NORWAY - 1.2% | ||||||||
Orkla ASA | 408,621 | 3,103 | ||||||
SWITZERLAND - 4.3% | ||||||||
Adecco SA | 87,969 | 4,187 | ||||||
Novartis AG | 105,959 | 6,484 | ||||||
Pargesa Holding SA - Bearer Shares | 10,203 | 676 | ||||||
|
| |||||||
11,347 | ||||||||
UNITED KINGDOM - 13.2% | ||||||||
Compass Group PLC | 926,191 | 10,222 | ||||||
Diageo plc | 250,024 | 7,023 | ||||||
Experian PLC | 133,913 | 2,225 | ||||||
Lloyds Banking Group plc(2) | 5,532,509 | 3,469 | ||||||
Tesco plc | 1,079,358 | 5,787 |
Shares Held | Value | |||||||
UNITED KINGDOM (CONTINUED) | ||||||||
Unilever PLC (DR) | 173,695 | $ | 6,343 | |||||
|
| |||||||
35,069 | ||||||||
UNITED STATES - 47.6% | ||||||||
3M Company | 74,140 | 6,852 | ||||||
Accenture plc, Class A | 35,884 | 2,513 | ||||||
American Express Company | 94,015 | 5,346 | ||||||
Aon Corporation | 152,598 | 7,979 | ||||||
Arch Capital Group Ltd.(2)(6) | 186,146 | 7,759 | ||||||
The Bank of New York Mellon Corporation | 329,660 | 7,457 | ||||||
Becton, Dickinson and Company | 32,456 | 2,550 | ||||||
The Chubb Corporation | 61,717 | 4,708 | ||||||
Cisco Systems, Inc. | 201,697 | 3,850 | ||||||
CVS Caremark Corporation | 26,740 | 1,295 | ||||||
Fidelity National Financial, Inc. | 178,821 | 3,825 | ||||||
Google Inc., Class A(2) | 13,094 | 9,879 | ||||||
Hasbro, Inc. | 88,670 | 3,385 | ||||||
Johnson & Johnson | 101,132 | 6,969 | ||||||
Marsh & McLennan Companies, Inc. | 198,654 | 6,740 | ||||||
MasterCard Incorporated, Class A | 16,263 | 7,342 | ||||||
Mohawk Industries, Inc.(2) | 18,937 | 1,515 | ||||||
Oracle Corporation | 260,269 | 8,196 | ||||||
The Progressive Corporation | 192,690 | 3,996 | ||||||
Signet Jewelers Ltd. | 103,467 | 5,045 | ||||||
Target Corporation | 100,481 | 6,378 | ||||||
TE Connectivity Ltd. | 239,074 | 8,131 | ||||||
Wal-Mart Stores, Inc. | 65,700 | 4,849 | ||||||
|
| |||||||
126,559 | ||||||||
|
| |||||||
Total common stocks and equity-linked securities | 207,649 |
28
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 8.1% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $21,478 (Cost $21,478)(7) | $ | 21,478 | $ | 21,478 | ||||
|
| |||||||
Total investments - 86.2% | 229,127 | |||||||
Other assets less liabilities - 13.8% | 36,779 | |||||||
|
| |||||||
Total net assets - 100.0%(8) | $ | 265,906 | ||||||
|
|
(1) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $1,990 or 0.7% of total net assets. See notes 2(a) and 2(b) in Notes to Financial Statements for additional information. |
(2) | Non-income producing security. |
(3) | Non-voting shares. |
(4) | Security is an equity-linked participation certificate issued by HSBC Bank plc. As described in Note 2(h) in Notes to Financial Statements, equity-linked participation certificates are subject to counterparty risk with respect to the bank or broker-dealer that issues them. |
(5) | Security is restricted. Ryanair Holdings PLC was acquired in a transaction under Rule 144A of the Securities Act of 1933, as amended. The shares of Ryanair Holdings PLC may be resold in transactions exempt from registration to qualified institutional buyers. |
Security | Acquisition Dates | Cost | Value | Percentage of Total Net Assets | ||||||||||||
Ryanair Holdings PLC | | 8/26/09- 9/25/12 | | $ | 1,407 | $ | 1,990 | 0.7 | % |
(6) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(7) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | $ | 21,908 |
(8) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
FOREIGN CURRENCY FORWARD CONTRACTS - September 30, 2012 | ||||||||||||||||||||
Dollar values in thousands |
| |||||||||||||||||||
Description | Counterparty | Trans- | Settlement Date | Cost on Origination Date | Value | Unrealized Depreciation | ||||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 6,609 | $ | 6,669 | $ | (60 | ) | ||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | 433 | 436 | (3 | ) | |||||||||||||
|
| |||||||||||||||||||
$ | (63 | ) | ||||||||||||||||||
|
|
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 32,251 | 12.1 | % | ||||
Consumer Staples | 30,941 | 11.6 | ||||||
Energy | 5,448 | 2.1 | ||||||
Financials | 61,552 | 23.2 | ||||||
Healthcare | 16,003 | 6.0 | ||||||
Industrials | 18,357 | 6.9 | ||||||
Information Technology | 39,911 | 15.0 | ||||||
Materials | 3,186 | 1.2 | ||||||
|
|
|
| |||||
Total common stocks | 207,649 | 78.1 | ||||||
Short-term investments | 21,478 | 8.1 | ||||||
|
|
|
| |||||
Total investments | 229,127 | 86.2 | ||||||
Other assets less liabilities | 36,779 | 13.8 | ||||||
|
|
|
| |||||
Total net assets | $ | 265,906 | 100.0 | % | ||||
|
|
|
|
CURRENCY EXPOSURE(1) - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
British pound | $ | 28,726 | 12.5 | % | ||||
Euro | 22,578 | 9.9 | ||||||
Hong Kong dollar | 438 | 0.2 | ||||||
Japanese yen | 8,555 | 3.7 | ||||||
Norwegian krone | 3,103 | 1.4 | ||||||
Swiss franc | 11,347 | 4.9 | ||||||
U.S. dollar | 154,380 | 67.4 | ||||||
|
|
|
| |||||
Total investments | $ | 229,127 | 100.0 | % | ||||
|
|
|
|
(1) | Excludes currency exposure to foreign currency forward contracts. |
29
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Compass Group PLC | United Kingdom | 3.8 | % | |||
Google Inc. | United States | 3.7 | ||||
Oracle Corporation | United States | 3.1 | ||||
TE Connectivity Ltd | United States | 3.1 | ||||
Aon Corporation | United States | 3.0 | ||||
Arch Capital Group Ltd. | United States | 2.9 | ||||
The Bank of New York Mellon Corporation | United States | 2.8 | ||||
MasterCard Incorporated | United States | 2.8 | ||||
Diageo plc | United Kingdom | 2.6 | ||||
Johnson & Johnson | United States | 2.6 | ||||
|
| |||||
Total | 30.4 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
30
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 98.2% | ||||||||
AUSTRALIA - 0.3% | ||||||||
Coca-Cola Amatil Limited | 1,634,754 | $ | 22,994 | |||||
Westfield Group | 887,177 | 9,350 | ||||||
|
| |||||||
32,344 | ||||||||
BELGIUM - 4.3% | ||||||||
Anheuser-Busch InBev NV | 4,067,342 | 345,853 | ||||||
Telenet Group Holding NV | 315,123 | 14,112 | ||||||
UCB SA | 994,298 | 54,674 | ||||||
|
| |||||||
414,639 | ||||||||
BRAZIL - 0.6% | ||||||||
Arcos Dorados Holdings, Inc., Class A | 3,726,141 | 57,494 | ||||||
CANADA - 3.8% | ||||||||
Canadian Pacific Railway Limited | 4,465,116 | 370,113 | ||||||
CHINA - 8.4% | ||||||||
Baidu, Inc., Class A (DR)(1) | 2,770,675 | 323,670 | ||||||
China Construction Bank Corporation, H Shares | 128,701,605 | 89,297 | ||||||
China Mobile Limited | 14,686,931 | 163,271 | ||||||
China Resources Land Limited | 47,216,759 | 104,005 | ||||||
Tencent Holdings Limited | 3,677,129 | 125,668 | ||||||
|
| |||||||
805,911 | ||||||||
FRANCE - 8.5% | ||||||||
Air Liquide SA | 549,420 | 68,097 | ||||||
DANONE S.A. | 410,753 | 25,289 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 380,447 | 57,201 | ||||||
Pernod Ricard SA | 1,810,178 | 203,098 | ||||||
Schneider Electric SA | 2,856,655 | 169,065 | ||||||
Technip SA | 256,930 | 28,563 | ||||||
Unibail-Rodamco | 910,135 | 181,400 | ||||||
Zodiac Aerospace | 848,134 | 82,810 | ||||||
|
| |||||||
815,523 | ||||||||
GERMANY - 15.1% | ||||||||
Bayer AG | 1,308,776 | 112,398 | ||||||
Beiersdorf AG | 2,147,306 | 157,561 | ||||||
Brenntag AG | 1,302,119 | 166,659 | ||||||
Daimler AG | 256,208 | 12,401 | ||||||
Deutsche Post AG | 5,666,036 | 110,673 | ||||||
Henkel AG & Co. KGaA, Preferred(2) | 2,001,140 | 159,154 | ||||||
Kabel Deutschland Holding AG(1) | 997,309 | 71,141 | ||||||
GERMANY (CONTINUED) | ||||||||
Linde AG | 2,497,155 | $ | 430,002 | |||||
Muenchener Rueckversicherungs-Gesellschaft AG | 1,534,571 | 239,598 | ||||||
|
| |||||||
1,459,587 | ||||||||
HONG KONG - 11.9% | ||||||||
AIA Group Ltd. | 80,257,961 | 297,576 | ||||||
BOC Hong Kong (Holdings) Limited | 21,263,441 | 67,596 | ||||||
Hang Seng Bank Limited | 8,035,637 | 123,218 | ||||||
Henderson Land Development Company Limited | 4,612,700 | 33,075 | ||||||
Hongkong Land Holdings Limited | 10,417,259 | 62,608 | ||||||
Sands China Ltd. | 44,799,593 | 166,972 | ||||||
Sino Land Company Limited | 48,443,112 | 90,588 | ||||||
Sun Hung Kai Properties Limited | 11,322,670 | 165,882 | ||||||
Wynn Macau Limited | 52,269,171 | 141,559 | ||||||
|
| |||||||
1,149,074 | ||||||||
INDIA - 0.4% | ||||||||
Coal India Limited | 5,872,718 | 39,983 | ||||||
INDONESIA - 0.1% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 9,831,500 | 7,654 | ||||||
IRELAND - 0.4% | ||||||||
CRH plc | 1,895,548 | 36,538 | ||||||
ITALY - 0.9% | ||||||||
Fiat Industrial SpA | 9,003,118 | 87,986 | ||||||
JAPAN - 11.9% | ||||||||
BRIDGESTONE CORPORATION | 2,995,009 | 69,464 | ||||||
HONDA MOTOR CO., LTD. | 7,837,483 | 240,728 | ||||||
JAPAN TOBACCO INC. | 14,619,863 | 438,746 | ||||||
Kao Corporation | 5,241,862 | 154,488 | ||||||
NGK INSULATORS, LTD.(3) | 10,518,793 | 119,725 | ||||||
Rakuten, Inc. | 2,992,400 | 30,484 | ||||||
SOFTBANK Corp | 2,319,600 | 93,925 | ||||||
|
| |||||||
1,147,560 | ||||||||
KOREA - 0.9% | ||||||||
Samsung Electronics Co., Ltd. | 69,683 | 84,390 | ||||||
MEXICO - 0.2% | ||||||||
America Movil SAB de C.V., Series L (DR) | 629,589 | 16,017 |
31
Shares Held | Value | |||||||
NETHERLANDS - 5.8% | ||||||||
Akzo Nobel N.V. | 1,739,190 | $ | 98,315 | |||||
Koninklijke Vopak NV | 1,292,617 | 90,761 | ||||||
Unilever NV (DR) | 9,497,484 | 335,996 | ||||||
Ziggo NV | 995,795 | 33,853 | ||||||
|
| |||||||
558,925 | ||||||||
NIGERIA - 0.4% | ||||||||
Nigerian Breweries Plc. | 38,762,232 | 33,781 | ||||||
SINGAPORE - 0.7% | ||||||||
City Developments Limited | 3,453,769 | 33,040 | ||||||
Genting Singapore PLC | 30,169,455 | 33,680 | ||||||
|
| |||||||
66,720 | ||||||||
SPAIN - 0.7% | ||||||||
Grifols S.A.(1) | 2,163,058 | 71,437 | ||||||
SWITZERLAND - 6.4% | ||||||||
Actelion Ltd. | 300,163 | 15,026 | ||||||
Givaudan SA | 67,373 | 63,935 | ||||||
Nestle SA | 5,395,560 | 340,199 | ||||||
Roche Holding AG - Genussscheine(2) | 568,368 | 106,180 | ||||||
Swatch Group AG - Bearer Shares | 223,287 | 89,077 | ||||||
|
| |||||||
614,417 | ||||||||
UNITED KINGDOM - 11.3% | ||||||||
Diageo plc | 1,850,276 | 51,973 | ||||||
HSBC Holdings plc | 21,819,010 | 201,993 | ||||||
Imperial Tobacco Group plc | 5,923,988 | 219,254 | ||||||
InterContinental Hotels Group PLC | 365,818 | 9,570 | ||||||
Johnson Matthey PLC | 1,822,539 | 71,015 | ||||||
Kingfisher plc | 3,786,003 | 16,152 | ||||||
Land Securities Group plc | 2,103,865 | 25,871 | ||||||
Meggitt plc | 7,842,527 | 50,011 | ||||||
Prudential plc | 3,256,719 | 42,150 | ||||||
Reckitt Benckiser Group PLC | 108,756 | 6,261 | ||||||
SABMiller plc | 4,913,012 | 215,792 | ||||||
Vodafone Group PLC | 11,870,605 | 33,689 | ||||||
William Morrison Supermarkets plc | 7,940,605 | 36,570 | ||||||
WPP plc | 8,375,327 | 113,808 | ||||||
|
| |||||||
1,094,109 | ||||||||
UNITED STATES - 5.2% | ||||||||
Covidien plc | 4,002,238 | 237,813 | ||||||
Liberty Global, Inc., Series A(1) | 982,774 | 59,704 | ||||||
Schlumberger Limited | 2,474,461 | 178,978 | ||||||
Virgin Media Inc. | 1,022,334 | 30,098 | ||||||
|
| |||||||
506,593 | ||||||||
|
| |||||||
Total common and preferred stocks | 9,470,795 |
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 1.1% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $108,556 (Cost $108,556)(4) | $ | 108,556 | $ | 108,556 | ||||
|
| |||||||
Total investments - 99.3% | 9,579,351 | |||||||
Other assets less liabilities - 0.7% | 70,939 | |||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 9,650,290 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Non-voting shares. |
(3) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $119,725 or 1.2% of total net assets. See notes 2(a) and 2(b) in Notes to Financial Statements for additional information. |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | 110,728 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 1,199,533 | 12.4 | % | ||||
Consumer Staples | 2,747,009 | 28.5 | ||||||
Energy | 247,524 | 2.6 | ||||||
Financials | 1,774,901 | 18.4 | ||||||
Healthcare | 597,528 | 6.2 | ||||||
Industrials | 1,247,803 | 12.9 | ||||||
Information Technology | 533,728 | 5.5 | ||||||
Materials | 767,902 | 8.0 | ||||||
Telecommunication Services | 354,867 | 3.7 | ||||||
|
|
|
| |||||
Total common and preferred stocks | 9,470,795 | 98.2 | ||||||
Short-term investments | 108,556 | 1.1 | ||||||
|
|
|
| |||||
Total investments | 9,579,351 | 99.3 | ||||||
Other assets less liabilities | 70,939 | 0.7 | ||||||
|
|
|
| |||||
Total net assets | $ | 9,650,290 | 100.0 | % | ||||
|
|
|
|
32
CURRENCY EXPOSURE - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Australian dollar | $ | 32,344 | 0.3 | % | ||||
British pound | 1,094,109 | 11.4 | ||||||
Euro | 3,444,635 | 36.0 | ||||||
Hong Kong dollar | 1,568,707 | 16.4 | ||||||
Indian rupee | 39,983 | 0.4 | ||||||
Indonesian rupiah | 7,654 | 0.1 | ||||||
Japanese yen | 1,147,560 | 12.0 | ||||||
Korean won | 84,390 | 0.9 | ||||||
Nigerian naira | 33,781 | 0.3 | ||||||
Singapore dollar | 66,720 | 0.7 | ||||||
Swiss franc | 614,417 | 6.4 | ||||||
U.S. dollar | 1,445,051 | 15.1 | ||||||
|
|
|
| |||||
Total investments | $ | 9,579,351 | 100.0 | % | ||||
|
|
|
|
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
JAPAN TOBACCO INC. | Japan | 4.5 | % | |||
Linde AG | Germany | 4.5 | ||||
Canadian Pacific Railway Limited | Canada | 3.8 | ||||
Anheuser-Busch InBev NV | Belgium | 3.6 | ||||
Nestle SA | Switzerland | 3.5 | ||||
Unilever NV | Netherlands | 3.5 | ||||
Baidu, Inc. | China | 3.4 | ||||
AIA Group Ltd. | Hong Kong | 3.1 | ||||
HONDA MOTOR CO., LTD. | Japan | 2.5 | ||||
Muenchener Rueckversicherungs-Gesellschaft AG | Germany | 2.5 | ||||
|
| |||||
Total | 34.9 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The Fund owns HSBC Holdings PLC (HSBC), which represents 2.1% of the Fund’s net assets, and Hang Seng Bank Ltd (Hang Seng), which represents 1.3% of the Fund’s net assets. HSBC is the parent company of Hang Seng. The aggregate value of HSBC and Hang Seng represents 3.4% of the Fund’s net assets and would represent one of the Fund’s top ten holdings.
The accompanying notes are an integral part of the financial statements.
33
ARTISAN INTERNATIONAL VALUE FUND
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS AND EQUITY-LINKED SECURITIES - 89.2% | ||||||||
BELGIUM - 1.9% | ||||||||
Groupe Bruxelles Lambert S.A. | 1,733,021 | $ | 128,610 | |||||
DENMARK - 1.8% | ||||||||
Carlsberg A/S, Class B | 1,309,272 | 115,999 | ||||||
FRANCE - 7.0% | ||||||||
Publicis Groupe | 1,876,166 | 104,998 | ||||||
Societe Television Francaise 1 | 3,773,751 | 31,420 | ||||||
Sodexo | 925,245 | 69,663 | ||||||
Sodexo - Registered Shares(1) | 1,284,779 | 96,732 | ||||||
Total SA | 3,275,914 | 162,495 | ||||||
|
| |||||||
465,308 | ||||||||
GERMANY - 2.9% | ||||||||
HeidelbergCement AG | 2,715,857 | 142,288 | ||||||
Wincor Nixdorf AG | 1,339,464 | 52,378 | ||||||
|
| |||||||
194,666 | ||||||||
HONG KONG - 1.0% | ||||||||
Guoco Group Limited | 7,545,736 | 67,925 | ||||||
IRELAND - 3.5% | ||||||||
ICON PLC (DR)(3)(4) | 4,501,487 | 109,701 | ||||||
Ryanair Holdings PLC, Equity-Linked Security, 144A(2)(3)(5)(6)(7) | 21,926,013 | 124,510 | ||||||
|
| |||||||
234,211 | ||||||||
JAPAN - 10.1% | ||||||||
Aderans Co., Ltd.(3)(4) | 2,612,467 | 35,752 | ||||||
CALBEE, Inc. | 92,300 | 8,090 | ||||||
Credit Saison Co., Ltd. | 6,703,459 | 162,089 | ||||||
Kao Corporation | 7,492,400 | 220,816 | ||||||
NIFCO INC. | 1,434,400 | 33,140 | ||||||
SANKYO CO., LTD. | 1,717,792 | 80,012 | ||||||
SEINO HOLDINGS CO., LTD. | 1,247,240 | 7,911 | ||||||
Stanley Electric Co., Ltd. | 8,160,600 | 120,882 | ||||||
|
| |||||||
668,692 | ||||||||
NETHERLANDS - 6.7% | ||||||||
DE Master Blenders 1753 NV(3) | 2,136,281 | $ | 25,737 | |||||
ING Groep N.V.(3) | 21,485,062 | 169,770 | ||||||
Koninklijke Ahold NV | 8,761,696 | 109,744 | ||||||
Koninklijke Philips Electronics N.V. | 5,199,190 | 121,298 | ||||||
Reed Elsevier NV | 1,589,075 | 21,247 | ||||||
|
| |||||||
447,796 | ||||||||
NORWAY - 1.3% | ||||||||
Orkla ASA | 10,936,965 | 83,064 | ||||||
SWITZERLAND - 8.3% | ||||||||
Adecco SA | 2,158,802 | 102,741 | ||||||
Novartis AG | 3,532,867 | 216,179 | ||||||
Panalpina Welttransport Holding AG(4) | 1,471,407 | 140,570 | ||||||
Pargesa Holding SA - Bearer Shares | 1,344,272 | 89,046 | ||||||
|
| |||||||
548,536 | ||||||||
UNITED KINGDOM - 26.0% | ||||||||
Carpetright PLC(3) | 3,161,793 | 33,544 | ||||||
Compass Group PLC | 34,410,293 | 379,792 | ||||||
Diageo plc | 5,663,794 | 159,093 | ||||||
Experian PLC | 7,189,710 | 119,466 | ||||||
Lloyds Banking Group plc(3) | 198,579,204 | 124,514 | ||||||
Michael Page International plc | 13,071,936 | 75,104 | ||||||
Qinetiq Group PLC(4) | 61,299,386 | 187,579 | ||||||
Reed Elsevier PLC | 23,774,278 | 227,273 | ||||||
Savills Plc(4) | 10,727,785 | 69,068 | ||||||
Tesco plc | 27,720,631 | 148,614 | ||||||
Unilever PLC (DR) | 5,465,117 | 199,586 | ||||||
|
| |||||||
1,723,633 | ||||||||
UNITED STATES - 18.7% | ||||||||
Accenture plc, Class A | 1,463,744 | 102,506 | ||||||
Aon Corporation | 4,659,607 | 243,651 | ||||||
Arch Capital Group Ltd.(3)(4) | 6,040,912 | 251,785 | ||||||
Covidien plc | 3,804,192 | 226,045 | ||||||
Signet Jewelers Ltd. | 2,928,078 | 142,773 | ||||||
TE Connectivity Ltd. | 8,018,894 | 272,723 | ||||||
|
| |||||||
1,239,483 | ||||||||
|
| |||||||
Total common stocks and equity-linked securities | 5,917,923 |
34
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 11.4% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $758,286 (Cost $758,286)(8) | $ | 758,286 | $ | 758,286 | ||||
|
| |||||||
Total investments - 100.6% | 6,676,209 | |||||||
Other assets less liabilities - (0.6%) | (36,974 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(9) | $ | 6,639,235 | ||||||
|
|
(1) | Shares are registered with the issuing company and not tradable until converted back to bearer shares. |
(2) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $124,510 or 1.9% of total net assets. See notes 2(a) and 2(b) in Notes to Financial Statements for additional information. |
(3) | Non-income producing security. |
(4) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(5) | Non-voting shares. |
(6) | Security is an equity-linked participation certificate issued by HSBC Bank plc. As described in Note 2(h) in Notes to Financial Statements, equity-linked participation certificates are subject to counterparty risk with respect to the bank or broker-dealer that issues them. |
(7) | Security is restricted. Ryanair Holdings PLC was acquired in a transaction under Rule 144A of the Securities Act of 1933, as amended. The shares of Ryanair Holdings PLC may be resold in transactions exempt from registration to qualified institutional buyers. |
Security | Acquisition Dates | Cost | Value | Percentage of Total Net Assets | ||||||||||
Ryanair Holdings | 9/17/08- 9/27/12 | $ | 26,756 | $ | 124,510 | 1.9 | % |
(8) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 2.375 | % | 7/31/2017 | $ | 138,271 | |||||||
U.S. Treasury Note | 1.875 | % | 9/30/2017 | 149,800 | ||||||||
U.S. Treasury Note | 2.250 | % | 11/30/2017 | 81,671 | ||||||||
U.S. Treasury Note | 2.750 | % | 2/28/2018 | 120,015 | ||||||||
U.S. Treasury Note | 2.625 | % | 4/30/2018 | 84,687 | ||||||||
U.S. Treasury Note | 1.750 | % | 5/31/2016 | 199,011 | ||||||||
|
| |||||||||||
$ | 773,455 | |||||||||||
|
|
(9) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
FOREIGN CURRENCY FORWARD CONTRACTS - September 30, 2012 | ||||||||||||||||||||
Dollar values in thousands |
| |||||||||||||||||||
Description | Counterparty | Transaction | Settlement Date | Cost on Origination Date | Value | Unrealized Appreciation (Depreciation) | ||||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | $ | 490,665 | $ | 495,110 | $ | (4,445 | ) | ||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | 22,182 | 22,558 | (376 | ) | |||||||||||||
Japanese Yen | State Street Bank and Trust Company | Sell | 2/15/2013 | 14,086 | 14,028 | 58 | ||||||||||||||
|
| |||||||||||||||||||
$ | (4,763 | ) | ||||||||||||||||||
|
|
PORTFOLIO DIVERSIFICATION - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 1,341,476 | 20.2 | % | ||||
Consumer Staples | 1,023,431 | 15.4 | ||||||
Energy | 162,495 | 2.5 | ||||||
Financials | 1,306,458 | 19.7 | ||||||
Healthcare | 551,925 | 8.3 | ||||||
Industrials | 962,243 | 14.5 | ||||||
Information Technology | 427,607 | 6.4 | ||||||
Materials | 142,288 | 2.2 | ||||||
|
|
|
| |||||
Total common stocks | 5,917,923 | 89.2 | ||||||
Short-term investments | 758,286 | 11.4 | ||||||
|
|
|
| |||||
Total investments | 6,676,209 | 100.6 | ||||||
Other assets less liabilities | (36,974 | ) | (0.6 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 6,639,235 | 100.0 | % | ||||
|
|
|
|
35
CURRENCY EXPOSURE(1) - September 30, 2012 | ||||||||
Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
British pound | $ | 1,524,047 | 22.8 | % | ||||
Danish krone | 115,999 | 1.7 | ||||||
Euro | 1,360,890 | 20.4 | ||||||
Hong Kong dollar | 67,925 | 1.0 | ||||||
Japanese yen | 668,692 | 10.0 | ||||||
Norwegian krone | 83,064 | 1.3 | ||||||
Swiss franc | 548,536 | 8.2 | ||||||
U.S. dollar | 2,307,056 | 34.6 | ||||||
|
|
|
| |||||
Total investments | $ | 6,676,209 | 100.0 | % | ||||
|
|
|
|
(1) | Excludes currency exposure to foreign currency forward contracts. |
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Compass Group PLC | United Kingdom | 5.7 | % | |||
TE Connectivity Ltd | United States | 4.1 | ||||
Arch Capital Group Ltd. | United States | 3.8 | ||||
Aon Corporation | United States | 3.7 | ||||
Reed Elsevier PLC | United Kingdom | 3.4 | ||||
Covidien plc | United States | 3.4 | ||||
Kao Corporation | Japan | 3.3 | ||||
Novartis AG | Switzerland | 3.3 | ||||
Unilever PLC | United Kingdom | 3.0 | ||||
Qinetiq Group PLC | United Kingdom | 2.8 | ||||
|
| |||||
Total | 36.5 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The Fund owns Pargesa Holding SA (Pargesa), which represents 1.3% of the Fund’s net assets, and Groupe Bruxelles Lambert SA (GBL), which represents 1.9% of the Fund’s net assets. Pargesa is the parent company of GBL. The aggregate value of Pargesa and GBL represents 3.2% of the Fund’s net assets and would represent one of the Fund’s top ten holdings.
The accompanying notes are an integral part of the financial statements.
36
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 95.7% | ||||||||
CONSUMER DISCRETIONARY - 19.5% | ||||||||
Auto Components - 1.8% | ||||||||
BorgWarner Inc.(1) | 1,796,014 | $ | 124,122 | |||||
Automobiles - 0.7% | ||||||||
Tesla Motors, Inc.(1) | 1,684,085 | 49,310 | ||||||
Distributors - 1.9% | ||||||||
LKQ Corporation(1) | 6,817,740 | 126,128 | ||||||
Hotels, Restaurants & Leisure - 2.6% |
| |||||||
Chipotle Mexican Grill, Inc.(1) | 218,624 | 69,422 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 1,566,399 | 90,788 | ||||||
Wynn Resorts, Limited | 98,700 | 11,394 | ||||||
|
| |||||||
171,604 | ||||||||
Internet & Catalog Retail - 0.1% | ||||||||
Netflix, Inc.(1) | 178,667 | 9,727 | ||||||
Multiline Retail - 0.7% | ||||||||
Dollar General Corporation(1) | 976,000 | 50,303 | ||||||
Specialty Retail - 3.8% | ||||||||
Limited Brands, Inc. | 691,700 | 34,073 | ||||||
Tractor Supply Company | 1,067,800 | 105,595 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 1,000,800 | 96,382 | ||||||
Urban Outfitters, Inc.(1) | 443,000 | 16,639 | ||||||
|
| |||||||
252,689 | ||||||||
Textiles, Apparel & Luxury Goods - 7.9% | ||||||||
Coach, Inc. | 2,409,723 | 134,993 | ||||||
Fossil, Inc.(1) | 1,411,335 | 119,540 | ||||||
lululemon athletica inc.(1) | 1,133,616 | 83,820 | ||||||
Polo Ralph Lauren Corporation, Class A | 877,522 | 132,708 | ||||||
Under Armour, Inc., Class A(1) | 1,009,700 | 56,372 | ||||||
|
| |||||||
527,433 | ||||||||
CONSUMER STAPLES - 1.2% | ||||||||
Food Products - 1.2% | ||||||||
Mead Johnson Nutrition Company | 1,133,000 | 83,026 | ||||||
ENERGY - 7.7% | ||||||||
Energy Equipment & Services - 4.9% |
| |||||||
Cameron International Corporation(1) | 2,202,849 | $ | 123,514 | |||||
Core Laboratories N.V. | 285,910 | 34,732 | ||||||
Dresser-Rand Group Inc.(1) | 2,510,027 | 138,328 | ||||||
Oceaneering International, Inc. | 622,700 | 34,404 | ||||||
|
| |||||||
330,978 | ||||||||
Oil, Gas & Consumable Fuels - 2.8% |
| |||||||
Cabot Oil & Gas Corporation | 1,894,300 | 85,054 | ||||||
Noble Energy, Inc. | 1,139,300 | 105,624 | ||||||
|
| |||||||
190,678 | ||||||||
FINANCIALS - 5.3% | ||||||||
Capital Markets - 1.2% | ||||||||
Ares Capital Corporation | 4,700,109 | 80,560 | ||||||
Commercial Banks - 0.8% | ||||||||
HDFC Bank Limited (DR)(2) | 1,429,690 | 53,728 | ||||||
Consumer Finance - 3.3% | ||||||||
Discover Financial Services | 5,562,410 | 220,995 | ||||||
HEALTHCARE - 23.7% | ||||||||
Biotechnology - 9.4% | ||||||||
Alexion Pharmaceuticals, Inc.(1) | 819,400 | 93,739 | ||||||
ARIAD Pharmaceuticals, Inc.(1) | 3,282,400 | 79,516 | ||||||
Cepheid(1)(3) | 3,459,600 | 119,391 | ||||||
Incyte Corporation(1) | 2,091,682 | 37,755 | ||||||
Onyx Pharmaceuticals, Inc.(1) | 284,400 | 24,032 | ||||||
Regeneron Pharmaceuticals, Inc.(1) | 1,589,813 | 242,701 | ||||||
Vertex Pharmaceuticals Incorporated(1) | 576,300 | 32,244 | ||||||
|
| |||||||
629,378 | ||||||||
Health Care Equipment & Supplies - 1.4% | ||||||||
Edwards Lifesciences Corporation(1) | 362,581 | 38,930 | ||||||
Intuitive Surgical, Inc.(1) | 112,413 | 55,715 | ||||||
|
| |||||||
94,645 | ||||||||
Health Care Providers & Services - 3.0% | ||||||||
AMERIGROUP Corporation(1) | 336,500 | 30,766 | ||||||
Cigna Corporation | 2,064,600 | 97,387 | ||||||
DaVita, Inc.(1) | 693,500 | 71,854 | ||||||
|
| |||||||
200,007 |
37
Shares Held | Value | |||||||
HEALTHCARE (CONTINUED) | ||||||||
Health Care Technology - 5.1% | ||||||||
athenahealth, Inc.(1)(3) | 1,827,315 | $ | 167,693 | |||||
Cerner Corporation(1) | 2,248,524 | 174,058 | ||||||
|
| |||||||
341,751 | ||||||||
Life Sciences Tools & Services - 4.5% |
| |||||||
Agilent Technologies, Inc. | 3,716,915 | 142,915 | ||||||
Illumina, Inc.(1) | 739,400 | 35,639 | ||||||
Mettler-Toledo International Inc.(1) | 737,200 | 125,870 | ||||||
|
| |||||||
304,424 | ||||||||
Pharmaceuticals - 0.3% | ||||||||
Allergan, Inc. | 217,296 | 19,900 | ||||||
INDUSTRIALS - 13.0% | ||||||||
Aerospace & Defense - 1.3% | ||||||||
Precision Castparts Corp. | 527,196 | 86,112 | ||||||
Building Products - 1.0% | ||||||||
Owens Corning Inc.(1) | 1,941,600 | 64,966 | ||||||
Electrical Equipment - 2.4% | ||||||||
AMETEK, Inc. | 581,500 | 20,614 | ||||||
Rockwell Automation, Inc. | 1,264,400 | 87,939 | ||||||
Roper Industries, Inc. | 478,712 | 52,606 | ||||||
|
| |||||||
161,159 | ||||||||
Machinery - 2.8% | ||||||||
Chart Industries, Inc.(1) | 909,000 | 67,130 | ||||||
Pall Corporation | 1,058,900 | 67,230 | ||||||
Woodward, Inc. | 1,648,600 | 56,019 | ||||||
|
| |||||||
190,379 | ||||||||
Professional Services - 5.5% | ||||||||
IHS Inc.(1) | 2,352,017 | 228,969 | ||||||
Verisk Analytics, Inc., Class A(1) | 2,926,427 | 139,327 | ||||||
|
| |||||||
368,296 | ||||||||
INFORMATION TECHNOLOGY - 25.3% | ||||||||
Communications Equipment - 0.6% |
| |||||||
Aruba Networks, Inc.(1) | 1,147,000 | 25,790 | ||||||
Palo Alto Networks, Inc.(1) | 182,600 | 11,243 | ||||||
|
| |||||||
37,033 | ||||||||
Electronic Equipment & Instruments - 4.4% | ||||||||
FLIR Systems, Inc.(3) | 1,702,200 | 34,001 | ||||||
IPG Photonics Corporation(1) | 2,207,100 | 126,467 | ||||||
Trimble Navigation Limited(1) | 2,831,265 | 134,938 | ||||||
|
| |||||||
295,406 | ||||||||
Internet Software & Services - 2.3% |
| |||||||
LinkedIn Corporation, Class A(1) | 756,700 | 91,107 | ||||||
MercadoLibre, Inc. | 782,063 | 64,559 | ||||||
|
| |||||||
155,666 | ||||||||
INFORMATION TECHNOLOGY (CONTINUED) | ||||||||
IT Services - 2.7% | ||||||||
Teradata Corporation(1) | 1,764,804 | $ | 133,084 | |||||
VeriFone Systems, Inc.(1) | 1,755,800 | 48,899 | ||||||
|
| |||||||
181,983 | ||||||||
Semiconductors & Semiconductor Equipment - 4.2% | ||||||||
Altera Corporation | 2,616,900 | 88,935 | ||||||
Applied Materials, Inc. | 5,092,700 | 56,860 | ||||||
ARM Holdings PLC (DR)(2) | 4,822,325 | 134,929 | ||||||
|
| |||||||
280,724 | ||||||||
Software - 11.1% | ||||||||
ANSYS, Inc.(1) | 1,077,018 | 79,053 | ||||||
Citrix Systems, Inc.(1) | 1,192,118 | 91,280 | ||||||
Concur Technologies, Inc.(1) | 1,981,730 | 146,113 | ||||||
MICROS Systems, Inc.(1) | 1,036,200 | 50,898 | ||||||
Qlik Technologies Inc.(1) | 612,900 | 13,735 | ||||||
Red Hat, Inc.(1) | 1,708,141 | 97,262 | ||||||
salesforce.com, inc.(1) | 869,211 | 132,720 | ||||||
VMware, Inc., Class A(1) | 1,371,568 | 132,685 | ||||||
|
| |||||||
743,746 | ||||||||
|
| |||||||
Total common stocks (Cost $4,324,248) | 6,426,856 | |||||||
Par Amount | ||||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.6% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $309,376 (Cost $309,376)(4) | $ | 309,376 | $ | 309,376 | ||||
|
| |||||||
Total investments - 100.3% | 6,736,232 | |||||||
Other assets less liabilities - (0.3%) | (18,287 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 6,717,945 | ||||||
|
|
(1) | Non-income producing security. |
(2) | The Fund considers the company to be from outside of the United States. See the Fund’s Statement of Additional Information for information on how a particular country is assigned. |
Security | Country | Trading Currency | ||||
ARM Holdings PLC (DR) | United Kingdom | U.S. dollar | ||||
HDFC Bank Limited (DR) | India | U.S. dollar |
38
(3) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | $ | 21,351 | |||||||
U.S. Treasury Note | 2.750 | % | 2/15/2019 | 111,875 | ||||||||
U.S. Treasury Note | 1.500 | % | 3/31/2019 | 182,338 | ||||||||
|
| |||||||||||
$ | 315,564 | |||||||||||
|
|
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company’s legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Regeneron Pharmaceuticals, Inc. | United States | 3.6 | % | |||
IHS Inc. | United States | 3.4 | ||||
Discover Financial Services | United States | 3.3 | ||||
Cerner Corporation | United States | 2.6 | ||||
athenahealth, Inc. | United States | 2.5 | ||||
Concur Technologies, Inc. | United States | 2.2 | ||||
Agilent Technologies, Inc. | United States | 2.1 | ||||
Verisk Analytics, Inc., Class A | United States | 2.1 | ||||
Dresser-Rand Group Inc. | United States | 2.1 | ||||
Coach, Inc. | United States | 2.0 | ||||
|
| |||||
Total | 25.9 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
39
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 93.0% | ||||||||
CONSUMER DISCRETIONARY - 7.9% | ||||||||
Diversified Consumer Services - 2.1% |
| |||||||
H&R Block, Inc. | 9,540,861 | $ | 165,343 | |||||
Household Durables - 1.1% | ||||||||
Mohawk Industries, Inc.(1) | 1,076,537 | 86,145 | ||||||
Internet & Catalog Retail - 0.6% | ||||||||
Liberty Interactive Corporation, Series A(1) | 2,668,152 | 49,361 | ||||||
Leisure Equipment & Products - 2.2% |
| |||||||
Mattel, Inc. | 5,059,370 | 179,506 | ||||||
Media - 1.9% | ||||||||
Omnicom Group Inc. | 3,042,495 | 156,871 | ||||||
CONSUMER STAPLES - 3.4% | ||||||||
Food & Staples Retailing - 3.4% | ||||||||
The Kroger Co. | 8,156,628 | 192,007 | ||||||
Sysco Corporation | 2,504,653 | 78,321 | ||||||
|
| |||||||
270,328 | ||||||||
ENERGY - 11.5% | ||||||||
Energy Equipment & Services - 5.4% |
| |||||||
Ensco PLC | 3,166,040 | 172,739 | ||||||
McDermott International, Inc.(1) | 10,876,288 | 132,908 | ||||||
Patterson-UTI Energy, Inc.(2) | 7,961,374 | 126,108 | ||||||
|
| |||||||
431,755 | ||||||||
Oil, Gas & Consumable Fuels - 6.1% |
| |||||||
Cimarex Energy Co. | 3,197,395 | 187,208 | ||||||
Hess Corporation | 2,226,866 | 119,627 | ||||||
Southwestern Energy Company(1) | 5,239,168 | 182,218 | ||||||
|
| |||||||
489,053 | ||||||||
FINANCIALS - 20.1% | ||||||||
Capital Markets - 1.2% | ||||||||
Northern Trust Corporation | 2,001,438 | 92,897 | ||||||
Insurance - 16.8% | ||||||||
Alleghany Corporation(1) | 640,251 | 220,848 | ||||||
Allied World Assurance Company Holdings, Ltd | 1,235,843 | 95,469 | ||||||
The Allstate Corporation | 4,776,873 | 189,212 | ||||||
Aon Corporation | 3,175,728 | 166,059 | ||||||
Arch Capital Group Ltd.(1)(2) | 3,865,186 | 161,101 | ||||||
FINANCIALS (CONTINUED) | ||||||||
Insurance (Continued) | ||||||||
Fidelity National Financial, Inc. | 4,665,303 | $ | 99,791 | |||||
Loews Corporation | 3,569,761 | 147,288 | ||||||
The Progressive Corporation | 9,771,996 | 202,671 | ||||||
Torchmark Corporation | 1,374,082 | 70,559 | ||||||
|
| |||||||
1,352,998 | ||||||||
Real Estate Investment Trusts |
| |||||||
Annaly Capital Management, Inc. | 5,695,194 | 95,907 | ||||||
Hatteras Financial Corp. | 2,592,155 | 73,073 | ||||||
|
| |||||||
168,980 | ||||||||
HEALTHCARE - 4.5% | ||||||||
Health Care Equipment & |
| |||||||
Becton, Dickinson and Company | 1,387,708 | 109,018 | ||||||
Health Care Providers & |
| |||||||
Cigna Corporation | 3,876,599 | 182,859 | ||||||
Life Sciences Tools & |
| |||||||
Covance Inc.(1) | 1,395,945 | 65,177 | ||||||
INDUSTRIALS - 18.0% | ||||||||
Aerospace & Defense - 5.7% | ||||||||
L-3 Communications Holdings, Inc. | 1,964,653 | 140,885 | ||||||
Rockwell Collins, Inc. | 3,577,411 | 191,892 | ||||||
Spirit AeroSystems Holdings, Inc., Class A(1) | 5,765,572 | 128,053 | ||||||
|
| |||||||
460,830 | ||||||||
Commercial Services & Supplies - 0.8% |
| |||||||
Republic Services, Inc. | 2,274,441 | 62,570 | ||||||
Construction & Engineering - 2.2% |
| |||||||
Jacobs Engineering Group Inc.(1) | 4,428,096 | 179,028 | ||||||
Electrical Equipment - 1.9% | ||||||||
Hubbell Inc., Class B | 1,923,180 | 155,278 | ||||||
Machinery - 1.7% | ||||||||
Flowserve Corporation | 1,091,491 | 139,427 | ||||||
40
Shares Held | Value | |||||||
INDUSTRIALS (CONTINUED) | ||||||||
Professional Services - 4.9% | ||||||||
The Dun & Bradstreet Corporation | 2,028,921 | $ | 161,543 | |||||
ManpowerGroup | 2,645,273 | 97,346 | ||||||
Towers Watson & Co., Class A | 2,471,975 | 131,138 | ||||||
|
| |||||||
390,027 | ||||||||
Road & Rail - 0.8% | ||||||||
Ryder System, Inc.(2) | 1,720,723 | 67,211 | ||||||
INFORMATION TECHNOLOGY - 25.7% | ||||||||
Computers & Peripherals - 1.2% | ||||||||
Lexmark International, Inc.(2) | 4,391,595 | 97,713 | ||||||
Electronic Equipment & Instruments - 8.6% |
| |||||||
Arrow Electronics, Inc.(1)(2) | 5,329,061 | 179,643 | ||||||
Avnet, Inc.(1)(2) | 6,754,379 | 196,485 | ||||||
FLIR Systems, Inc.(2) | 7,992,622 | 159,653 | ||||||
Ingram Micro Inc.(1)(2) | 10,362,660 | 157,823 | ||||||
|
| |||||||
693,604 | ||||||||
Internet Software & Services - 1.4% |
| |||||||
Open Text Corporation(1)(3) | 2,093,098 | 115,413 | ||||||
IT Services - 5.9% | ||||||||
Broadridge Financial Solutions, Inc. | 5,380,360 | 125,524 | ||||||
SAIC, Inc. | 10,881,934 | 131,019 | ||||||
The Western Union Company | 12,083,350 | 220,159 | ||||||
|
| |||||||
476,702 | ||||||||
Semiconductors & Semiconductor |
| |||||||
Analog Devices, Inc. | 5,187,773 | 203,309 | ||||||
Applied Materials, Inc. | 13,316,127 | 148,675 | ||||||
Lam Research Corporation(1) | 5,045,232 | 160,363 | ||||||
|
| |||||||
512,347 | ||||||||
Software - 2.2% | ||||||||
Autodesk, Inc.(1) | 2,579,007 | 86,061 | ||||||
BMC Software, Inc.(1) | 67,952 | 2,819 | ||||||
SYNOPSYS, INC.(1) | 2,618,455 | 86,461 | ||||||
|
| |||||||
175,341 | ||||||||
UTILITIES - 1.9% | ||||||||
Electrical Utilities - 0.6% | ||||||||
OGE Energy Corp. | 835,870 | 46,357 | ||||||
Multi-Utilities - 0.4% | ||||||||
SCANA Corporation | 592,995 | 28,624 | ||||||
Water Utilities - 0.9% | ||||||||
American Water Works Company, Inc. | 1,913,264 | 70,906 | ||||||
|
| |||||||
Total common stocks | 7,471,669 | |||||||
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 6.9% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $551,252 (Cost $551,252)(4) | $ | 551,252 | $ | 551,252 | ||||
|
| |||||||
Total investments - 99.9% | 8,022,921 | |||||||
Other assets less liabilities - 0.1% | 6,620 | |||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 8,029,541 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(3) | The Fund considers the company to be from Canada. See the Fund’s Statement of Additional Information for information on how a particular country is assigned. The security trades in U.S. dollars. |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.750 | % | 5/31/2016 | $ | 562,282 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company’s legal name may be different.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Alleghany Corporation | United States | 2.8 | % | |||
The Western Union Company | United States | 2.7 | ||||
Analog Devices, Inc. | United States | 2.5 | ||||
The Progressive Corporation | United States | 2.5 | ||||
Avnet, Inc. | United States | 2.4 | ||||
The Kroger Co. | United States | 2.4 | ||||
Rockwell Collins, Inc. | United States | 2.4 | ||||
The Allstate Corporation | United States | 2.4 | ||||
Cimarex Energy Co. | United States | 2.3 | ||||
CIGNA Corporation | United States | 2.3 | ||||
|
| |||||
Total | 24.7 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
41
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 94.8% | ||||||||
CONSUMER DISCRETIONARY - 14.3% | ||||||||
Automobiles - 0.7% |
| |||||||
Tesla Motors, Inc.(1) | 176,900 | $ | 5,180 | |||||
Distributors - 3.1% |
| |||||||
LKQ Corporation(1) | 1,229,000 | 22,736 | ||||||
Diversified Consumer Services - 0.2% |
| |||||||
K12 Inc.(1) | 89,300 | 1,804 | ||||||
Hotels, Restaurants & Leisure - 1.6% |
| |||||||
Dunkin’ Brands Group, Inc. | 403,300 | 11,774 | ||||||
Internet & Catalog Retail - 1.0% |
| |||||||
HomeAway, Inc.(1) | 312,400 | 7,326 | ||||||
Media - 0.6% |
| |||||||
Pandora Media, Inc.(1) | 372,200 | 4,076 | ||||||
Specialty Retail - 5.6% |
| |||||||
Francesca’s Collections, Inc.(1) | 391,400 | 12,028 | ||||||
Hibbett Sports, Inc.(1) | 61,400 | 3,650 | ||||||
Monro Muffler Brake, Inc. | 211,600 | 7,446 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 179,300 | 17,267 | ||||||
|
| |||||||
40,391 | ||||||||
Textiles, Apparel & Luxury Goods - 1.5% |
| |||||||
Deckers Outdoor Corporation(1) | 22,700 | 832 | ||||||
The Warnaco Group, Inc.(1) | 197,700 | 10,261 | ||||||
|
| |||||||
11,093 | ||||||||
CONSUMER STAPLES - 3.9% | ||||||||
Food & Staples Retailing - 1.7% |
| |||||||
The Fresh Market, Inc.(1) | 203,200 | 12,188 | ||||||
Food Products - 2.2% |
| |||||||
Annie’s, Inc.(1) | 113,200 | 5,076 | ||||||
TreeHouse Foods, Inc.(1) | 212,775 | 11,171 | ||||||
|
| |||||||
16,247 | ||||||||
ENERGY - 4.9% | ||||||||
Energy Equipment & Services - 2.5% |
| |||||||
Dril-Quip, Inc.(1) | 251,100 | 18,049 | ||||||
ENERGY (CONTINUED) | ||||||||
Oil, Gas & Consumable Fuels - 2.4% |
| |||||||
Oasis Petroleum Inc.(1) | 259,000 | $ | 7,633 | |||||
Rosetta Resources Inc.(1) | 198,500 | 9,508 | ||||||
|
| |||||||
17,141 | ||||||||
FINANCIALS - 2.5% | ||||||||
Capital Markets - 2.5% |
| |||||||
Ares Capital Corporation | 1,068,583 | 18,315 | ||||||
HEALTHCARE - 19.5% | ||||||||
Biotechnology - 6.8% |
| |||||||
ARIAD Pharmaceuticals, Inc.(1) | 543,600 | 13,169 | ||||||
Cepheid(1)(2) | 647,200 | 22,335 | ||||||
Incyte Corporation(1) | 491,800 | 8,877 | ||||||
Isis Pharmaceuticals, Inc.(1) | 375,900 | 5,289 | ||||||
|
| |||||||
49,670 | ||||||||
Health Care Equipment & Supplies - 3.3% |
| |||||||
DexCom Inc.(1) | 684,700 | 10,291 | ||||||
GenMark Diagnostics, Inc.(1) | 201,800 | 1,859 | ||||||
HeartWare International, Inc.(1) | 102,825 | 9,716 | ||||||
NxStage Medical, Inc.(1) | 142,700 | 1,885 | ||||||
|
| |||||||
23,751 | ||||||||
Health Care Providers & Services - 4.5% |
| |||||||
Acadia Healthcare Company, Inc.(1) | 410,500 | 9,790 | ||||||
HMS Holdings Corp.(1) | 680,700 | 22,756 | ||||||
|
| |||||||
32,546 | ||||||||
Health Care Technology - 3.8% |
| |||||||
athenahealth, Inc.(1)(2) | 239,900 | 22,016 | ||||||
Vocera Communications, Inc.(1) | 180,900 | 5,592 | ||||||
|
| |||||||
27,608 | ||||||||
Life Sciences Tools & Services - 0.7% |
| |||||||
Bruker Corporation(1) | 411,300 | 5,384 | ||||||
Pharmaceuticals - 0.4% |
| |||||||
VIVUS, Inc.(1) | 171,400 | 3,054 | ||||||
INDUSTRIALS - 19.3% | ||||||||
Aerospace & Defense - 1.0% |
| |||||||
Teledyne Technologies Incorporated(1) | 111,500 | 7,068 | ||||||
Electrical Equipment - 3.9% |
| |||||||
Acuity Brands, Inc. | 320,400 | 20,278 | ||||||
Regal Beloit Corporation | 119,600 | 8,429 | ||||||
|
| |||||||
28,707 |
42
Shares Held | Value | |||||||
INDUSTRIALS (CONTINUED) | ||||||||
Machinery - 8.8% |
| |||||||
Chart Industries, Inc.(1) | 192,900 | $ | 14,246 | |||||
IDEX Corporation | 506,100 | 21,140 | ||||||
Proto Labs, Inc.(1) | 30,800 | 1,042 | ||||||
Robbins & Myers, Inc. | 154,800 | 9,226 | ||||||
Westport Innovations Inc.(1)(3) | 125,900 | 3,505 | ||||||
Woodward, Inc. | 426,400 | 14,489 | ||||||
|
| |||||||
63,648 | ||||||||
Professional Services - 2.2% |
| |||||||
The Advisory Board Company(1) | 328,400 | 15,707 | ||||||
Trading Companies & Distributors - 3.4% |
| |||||||
Beacon Roofing Supply, Inc.(1) | 869,600 | 24,784 | ||||||
INFORMATION TECHNOLOGY - 30.4% | ||||||||
Communications Equipment - 2.4% |
| |||||||
Acme Packet, Inc.(1) | 218,400 | 3,735 | ||||||
Aruba Networks, Inc.(1) | 313,200 | 7,042 | ||||||
Finisar Corporation(1) | 476,600 | 6,815 | ||||||
|
| |||||||
17,592 | ||||||||
Electronic Equipment & Instruments - 7.0% |
| |||||||
Cognex Corporation | 439,200 | 15,187 | ||||||
FARO Technologies, Inc.(1) | 63,000 | 2,603 | ||||||
FEI Company | 163,400 | 8,742 | ||||||
IPG Photonics Corporation(1) | 264,600 | 15,162 | ||||||
Maxwell Technologies, Inc.(1) | 215,900 | 1,753 | ||||||
Universal Display Corporation(1) | 207,200 | 7,123 | ||||||
|
| |||||||
50,570 | ||||||||
Internet Software & Services - 3.2% |
| |||||||
CoStar Group, Inc.(1) | 106,800 | 8,708 | ||||||
Liquidity Services, Inc.(1) | 145,100 | 7,285 | ||||||
MercadoLibre, Inc. | 86,100 | 7,108 | ||||||
|
| |||||||
23,101 | ||||||||
Semiconductors & Semiconductor Equipment - 1.2% | ||||||||
Cavium Networks, Inc.(1) | 259,800 | 8,659 | ||||||
Software - 16.6% |
| |||||||
CommVault Systems, Inc.(1) | 409,700 | 24,049 | ||||||
Concur Technologies, Inc.(1) | 287,700 | 21,212 | ||||||
Fortinet, Inc.(1) | 638,400 | 15,411 | ||||||
Guidewire Software, Inc.(1) | 387,400 | 12,029 | ||||||
Informatica Corporation(1) | 349,900 | 12,180 | ||||||
NetSuite Inc.(1) | 177,700 | 11,337 | ||||||
Qlik Technologies Inc.(1) | 262,200 | 5,876 | ||||||
RealPage, Inc.(1) | 616,100 | 13,924 | ||||||
Tyler Technologies, Inc.(1) | 111,600 | 4,913 | ||||||
|
| |||||||
120,931 | ||||||||
|
| |||||||
Total common stocks | 689,100 | |||||||
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.7% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $34,153 (Cost $34,153)(4) | $ | 34,153 | $ | 34,153 | ||||
|
| |||||||
Total investments - 99.5% | 723,253 | |||||||
Other assets less liabilities - 0.5% | 3,640 | |||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 726,893 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(3) | The Fund considers the company to be from Canada. See the Fund's Statement of Additional Information for information on how a particular country is assigned. The security trades in U.S. dollars. |
(4) Collateralized by:
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | $ | 34,837 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Beacon Roofing Supply, Inc. | United States | 3.4 | % | |||
CommVault Systems, Inc. | United States | 3.3 | ||||
HMS Holdings Corp. | United States | 3.1 | ||||
LKQ Corporation | United States | 3.1 | ||||
Cepheid | United States | 3.1 | ||||
athenahealth, Inc. | United States | 3.0 | ||||
Concur Technologies, Inc. | United States | 2.9 | ||||
IDEX Corporation | United States | 2.9 | ||||
Acuity Brands, Inc. | United States | 2.8 | ||||
Ares Capital Corporation | United States | 2.5 | ||||
|
| |||||
Total | 30.1 | % | ||||
|
|
For the purpose of determining the Fund's top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
43
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON STOCKS - 96.1% | ||||||||
CONSUMER DISCRETIONARY - 14.5% | ||||||||
Diversified Consumer Services - 4.1% |
| |||||||
Coinstar, Inc.(1) | 809,700 | $ | 36,420 | |||||
Matthews International Corporation(2) | 1,419,500 | 42,329 | ||||||
Regis Corporation | 1,611,500 | 29,619 | ||||||
|
| |||||||
108,368 | ||||||||
Hotels, Restaurants & Leisure - 2.0% |
| |||||||
Jack in the Box Inc.(1) | 689,908 | 19,393 | ||||||
WMS Industries Inc.(1) | 2,025,000 | 33,169 | ||||||
|
| |||||||
52,562 | ||||||||
Household Durables - 0.5% |
| |||||||
Universal Electronics Inc.(1) | 718,000 | 12,622 | ||||||
Media - 2.9% |
| |||||||
Arbitron Inc. | 519,900 | 19,704 | ||||||
DreamWorks Animation SKG, Inc., Class A(1) | 2,236,500 | 43,008 | ||||||
Meredith Corporation | 396,155 | 13,865 | ||||||
|
| |||||||
76,577 | ||||||||
Specialty Retail - 2.2% |
| |||||||
Rent-A-Center, Inc. | 1,650,562 | 57,902 | ||||||
Textiles, Apparel & Luxury |
| |||||||
Skechers U.S.A., Inc., Class A(1) | 1,485,500 | 30,304 | ||||||
The Warnaco Group, Inc.(1) | 841,800 | 43,689 | ||||||
|
| |||||||
73,993 | ||||||||
CONSUMER STAPLES - 0.7% | ||||||||
Food Products - 0.7% | ||||||||
Darling International Inc.(1) | 1,031,600 | 18,868 | ||||||
ENERGY - 13.8% | ||||||||
Energy Equipment & Services - 7.0% |
| |||||||
GulfMark Offshore, Inc.(1) | 998,600 | 32,994 | ||||||
Key Energy Services, Inc.(1) | 1,815,600 | 12,709 | ||||||
Newpark Resources, Inc.(1) | 2,343,800 | 17,368 | ||||||
Parker Drilling Company(1) | 3,193,347 | 13,508 | ||||||
SEACOR Holdings Inc.(1) | 207,100 | 17,264 | ||||||
Superior Energy Services, Inc.(1) | 742,725 | 15,241 | ||||||
Tidewater Inc. | 800,500 | 38,848 | ||||||
Unit Corporation(1) | 932,600 | 38,703 | ||||||
|
| |||||||
186,635 | ||||||||
ENERGY (CONTINUED) | ||||||||
Oil, Gas & Consumable Fuels - 6.8% |
| |||||||
Cloud Peak Energy Inc.(1) | 3,004,100 | $ | 54,374 | |||||
Comstock Resources, Inc.(1) | 2,289,090 | 42,073 | ||||||
Forest Oil Corporation(1) | 3,390,890 | 28,653 | ||||||
Lone Pine Resources Inc.(1) | 2,035,111 | 3,175 | ||||||
World Fuel Services Corporation | 1,469,000 | 52,311 | ||||||
|
| |||||||
180,586 | ||||||||
FINANCIALS - 6.2% | ||||||||
Diversified Financial Services - 1.0% |
| |||||||
PICO Holdings, Inc.(1)(2) | 1,138,890 | 25,989 | ||||||
Insurance - 3.1% | ||||||||
Allied World Assurance Company | 247,555 | 19,124 | ||||||
Alterra Capital Holdings Limited | 470,375 | 11,261 | ||||||
Endurance Specialty Holdings Ltd. | 420,923 | 16,206 | ||||||
Platinum Underwriters Holdings, Ltd. | 874,800 | 35,753 | ||||||
|
| |||||||
82,344 | ||||||||
Real Estate Investment Trusts |
| |||||||
Anworth Mortgage Asset Corporation | 2,442,900 | 16,612 | ||||||
Hatteras Financial Corp. | 833,500 | 23,496 | ||||||
Potlatch Corporation | 429,101 | 16,036 | ||||||
|
| |||||||
56,144 | ||||||||
HEALTHCARE - 2.7% | ||||||||
Biotechnology - 0.4% | ||||||||
Enzon Pharmaceuticals, Inc.(1) | 1,353,500 | 9,420 | ||||||
Health Care Equipment & |
| |||||||
CONMED Corporation | 1,031,659 | 29,402 | ||||||
Life Sciences Tools & Services - 1.2% |
| |||||||
ICON PLC (DR)(1)(2)(3) | 1,343,941 | 32,752 | ||||||
INDUSTRIALS - 26.2% | ||||||||
Aerospace & Defense - 2.3% | ||||||||
Curtiss-Wright Corporation | 792,300 | 25,908 | ||||||
Spirit AeroSystems Holdings, Inc., Class A(1) | 1,617,579 | 35,926 | ||||||
|
| |||||||
61,834 | ||||||||
Air Freight & Logistics - 1.5% | ||||||||
Atlas Air Worldwide Holdings, Inc.(1) | 775,800 | 40,055 |
44
Shares Held | Value | |||||||
INDUSTRIALS (CONTINUED) | ||||||||
Airlines - 0.6% | ||||||||
Hawaiian Holdings, Inc.(1)(2) | 2,896,800 | $ | 16,193 | |||||
Commercial Services & Supplies - 3.2% |
| |||||||
Quad/Graphics, Inc., Class A | 792,300 | 13,437 | ||||||
Sykes Enterprises, Incorporated(1)(2) | 2,723,494 | 36,604 | ||||||
Tetra Tech, Inc.(1) | 1,361,700 | 35,758 | ||||||
|
| |||||||
85,799 | ||||||||
Construction & Engineering - 5.7% | ||||||||
Comfort Systems USA, Inc.(2) | 2,214,426 | 24,204 | ||||||
EMCOR Group, Inc. | 2,459,362 | 70,190 | ||||||
Granite Construction Incorporated | 1,254,462 | 36,028 | ||||||
ORION MARINE GROUP, INC.(1)(2) | 1,601,100 | 11,896 | ||||||
Tutor Perini Corporation(1) | 742,800 | 8,498 | ||||||
|
| |||||||
150,816 | ||||||||
Electrical Equipment - 0.6% | ||||||||
Encore Wire Corporation | 511,700 | 14,972 | ||||||
Machinery - 5.4% | ||||||||
Astec Industries, Inc.(1) | 734,481 | 23,217 | ||||||
CIRCOR International, Inc. | 288,900 | 10,906 | ||||||
Harsco Corporation | 965,600 | 19,824 | ||||||
Kaydon Corporation | 1,324,500 | 29,589 | ||||||
Mueller Industries, Inc. | 726,224 | 33,021 | ||||||
Woodward, Inc. | 808,833 | 27,484 | ||||||
|
| |||||||
144,041 | ||||||||
Professional Services - 4.5% | ||||||||
CRA International, Inc.(1)(2) | 709,779 | 12,265 | ||||||
FTI Consulting, Inc.(1) | 2,038,465 | 54,386 | ||||||
Kforce Inc.(1) | 668,500 | 7,882 | ||||||
Towers Watson & Co., Class A | 544,687 | 28,896 | ||||||
TrueBlue, Inc.(1) | 1,072,888 | 16,866 | ||||||
|
| |||||||
120,295 | ||||||||
Road & Rail - 2.4% | ||||||||
Ryder System, Inc.(2) | 1,601,064 | 62,538 | ||||||
INFORMATION TECHNOLOGY - 24.5% | ||||||||
Communications Equipment - 1.8% |
| |||||||
ADTRAN, Inc. | 2,786,200 | 48,146 | ||||||
Computers & Peripherals - 5.5% | ||||||||
Diebold, Incorporated | 1,856,866 | 62,595 | ||||||
Intermec, Inc.(1) | 1,477,219 | 9,174 | ||||||
Lexmark International, Inc.(2) | 1,295,687 | 28,829 | ||||||
Logitech International S.A.(3) | 932,600 | 8,533 | ||||||
QLogic Corporation(1) | 3,278,500 | 37,440 | ||||||
|
| |||||||
146,571 | ||||||||
INFORMATION TECHNOLOGY (CONTINUED) | ||||||||
Electronic Equipment & |
| |||||||
Arrow Electronics, Inc.(1)(2) | 1,130,647 | $ | 38,114 | |||||
Benchmark Electronics, Inc.(1) | 1,185,701 | 18,106 | ||||||
Power-One, Inc.(1) | 3,070,100 | 17,193 | ||||||
Tech Data Corporation(1) | 932,600 | 42,247 | ||||||
|
| |||||||
115,660 | ||||||||
Internet Software & Services - 1.3% |
| |||||||
EarthLink, Inc. | 5,009,540 | 35,668 | ||||||
IT Services - 2.0% | ||||||||
CACI International Inc(1) | 759,250 | 39,322 | ||||||
ManTech International Corporation, Class A | 585,968 | 14,063 | ||||||
|
| |||||||
53,385 | ||||||||
Semiconductors & Semiconductor |
| |||||||
Intersil Corporation | 4,530,800 | 39,644 | ||||||
Nanometrics Incorporated(1) | 722,900 | 9,983 | ||||||
Rudolph Technologies, Inc.(1) | 608,051 | 6,385 | ||||||
Ultratech, Inc.(1)(2) | 1,757,837 | 55,161 | ||||||
Volterra Semiconductor Corporation(1) | 572,000 | 12,510 | ||||||
|
| |||||||
123,683 | ||||||||
Software - 4.8% | ||||||||
MicroStrategy Incorporated, Class A(1) | 319,371 | 42,818 | ||||||
Progress Software Corporation(1) | 2,075,623 | 44,398 | ||||||
Rosetta Stone Inc.(1) | 736,000 | 9,384 | ||||||
Websense, Inc.(1)(2) | 1,914,637 | 29,964 | ||||||
|
| |||||||
126,564 | ||||||||
MATERIALS - 5.9% | ||||||||
Chemicals - 4.6% | ||||||||
H.B. Fuller Company | 2,144,333 | 65,788 | ||||||
Minerals Technologies Inc. | 437,500 | 31,032 | ||||||
Sensient Technologies Corporation | 709,715 | 26,089 | ||||||
|
| |||||||
122,909 | ||||||||
Metals & Mining - 1.3% | ||||||||
Schnitzer Steel Industries, Inc., Class A | 1,246,200 | 35,081 | ||||||
TELECOMMUNICATION SERVICES - 1.6% | ||||||||
Diversified Telecommunication |
| |||||||
Atlantic Tele-Network, Inc. | 585,914 | 25,183 | ||||||
Neutral Tandem, Inc.(1)(2) | 1,988,900 | 18,656 | ||||||
|
| |||||||
43,839 | ||||||||
|
| |||||||
Total common stocks | 2,552,213 |
45
Par Amount | Value | |||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 4.2% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $109,801 (Cost $109,801)(4) | $ | 109,801 | $ | 109,801 | ||||
|
| |||||||
Total investments - 100.3% | 2,662,014 | |||||||
Other assets less liabilities - (0.3%) | (6,944 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(5) | $ | 2,655,070 | ||||||
|
|
(1) | Non-income producing security. |
(2) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(3) | The Fund considers the company to be from outside of the United States. See the Fund's Statement of Additional Information for information on how a particular country is assigned. |
Security | Country | Trading Currency | ||
ICON PLC (DR) | Ireland | U.S. dollar | ||
Logitech International S.A. | Switzerland | U.S. dollar |
(4) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 1.500 | % | 3/31/2019 | $ | 112,000 |
(5) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
EMCOR Group, Inc. | United States | 2.6 | % | |||
H.B. Fuller Company | United States | 2.5 | ||||
Diebold, Incorporated | United States | 2.4 | ||||
Ryder System, Inc. | United States | 2.4 | ||||
Rent-A-Center, Inc. | United States | 2.2 | ||||
Ultratech, Inc. | United States | 2.1 | ||||
FTI Consulting, Inc. | United States | 2.0 | ||||
Cloud Peak Energy, Inc. | United States | 2.0 | ||||
World Fuel Services Corporation | United States | 2.0 | ||||
ADTRAN, Inc. | United States | 1.8 | ||||
|
| |||||
Total | 22.0 | % | ||||
|
|
For the purpose of determining the Fund's top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
46
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 91.4% | ||||||||
CONSUMER DISCRETIONARY - 3.8% | ||||||||
Diversified Consumer Services - 2.4% |
| |||||||
H&R Block, Inc. | 1,137,800 | $ | 19,718 | |||||
Multiline Retail - 1.4% | ||||||||
Target Corporation | 189,200 | 12,008 | ||||||
CONSUMER STAPLES - 4.7% | ||||||||
Food & Staples Retailing - 4.7% |
| |||||||
The Kroger Co. | 978,500 | 23,034 | ||||||
Tesco plc(1) | 2,964,049 | 15,891 | ||||||
|
| |||||||
38,925 | ||||||||
ENERGY-14.3% | ||||||||
Energy Equipment & Services - 5.5% |
| |||||||
Baker Hughes Incorporated | 598,200 | 27,057 | ||||||
Noble Corporation | 527,900 | 18,888 | ||||||
|
| |||||||
45,945 | ||||||||
Oil, Gas & Consumable Fuels - 8.8% |
| |||||||
Apache Corporation | 367,500 | 31,778 | ||||||
Cimarex Energy Co. | 355,800 | 20,832 | ||||||
Royal Dutch Shell PLC, Class A (DR)(1) | 302,200 | 20,976 | ||||||
|
| |||||||
73,586 | ||||||||
FINANCIALS - 23.4% | ||||||||
Capital Markets - 4.3% | ||||||||
The Bank of New York Mellon Corporation | 831,300 | 18,804 | ||||||
The Goldman Sachs Group, Inc. | 149,205 | 16,962 | ||||||
|
| |||||||
35,766 | ||||||||
Insurance - 17.5% | ||||||||
Alleghany Corporation(2) | 50,736 | 17,501 | ||||||
The Allstate Corporation | 448,250 | 17,755 | ||||||
Arch Capital Group Ltd.(2)(3) | 561,300 | 23,395 | ||||||
Berkshire Hathaway Inc., Class B(2) | 426,530 | 37,620 | ||||||
The Chubb Corporation | 314,700 | 24,005 | ||||||
The Progressive Corporation | 1,239,600 | 25,709 | ||||||
|
| |||||||
145,985 | ||||||||
Real Estate Investment Trusts (REITS) - 1.6% | ||||||||
Annaly Capital Management, Inc. | 786,300 | 13,241 | ||||||
HEALTHCARE - 6.4% | ||||||||
Health Care Equipment & Supplies - 1.9% | ||||||||
Becton, Dickinson and Company | 203,600 | $ | 15,995 | |||||
Health Care Providers & |
| |||||||
Cigna Corporation | 438,900 | 20,703 | ||||||
Wellpoint, Inc. | 286,900 | 16,643 | ||||||
|
| |||||||
37,346 | ||||||||
INDUSTRIALS - 2.6% | ||||||||
Construction & Engineering - 2.6% |
| |||||||
Jacobs Engineering Group Inc.(2) | 536,500 | 21,691 | ||||||
INFORMATION TECHNOLOGY - 29.2% | ||||||||
Communications Equipment - 3.0% |
| |||||||
Cisco Systems, Inc. | 1,297,100 | 24,762 | ||||||
Computers & Peripherals - 3.5% | ||||||||
Apple Inc. | 44,244 | 29,522 | ||||||
Electronic Equipment & Instruments - 4.7% | ||||||||
Avnet, Inc.(2)(3) | 709,300 | 20,634 | ||||||
Ingram Micro Inc.(2)(3) | 1,252,000 | 19,068 | ||||||
|
| |||||||
39,702 | ||||||||
Internet Software & Services - 2.7% |
| |||||||
Google Inc., Class A(2) | 30,500 | 23,012 | ||||||
IT Services - 3.3% | ||||||||
The Western Union Company | 1,504,900 | 27,419 | ||||||
Semiconductors & Semiconductor Equipment - 6.6% | ||||||||
Samsung Electronics Co., Ltd., Preferred(1)(4) | 44,967 | 31,922 | ||||||
Texas Instruments Incorporated | 857,300 | 23,619 | ||||||
|
| |||||||
55,541 | ||||||||
Software - 5.4% | ||||||||
Microsoft Corporation | 693,800 | 20,661 | ||||||
Oracle Corporation | 768,400 | 24,197 | ||||||
|
| |||||||
44,858 | ||||||||
MATERIALS - 3.9% | ||||||||
Chemicals - 1.6% | ||||||||
The Mosaic Company | 235,800 | 13,584 |
47
Shares Held | Value | |||||||
MATERIALS (CONTINUED) | ||||||||
Metals & Mining - 2.3% | ||||||||
Newmont Mining Corporation | 339,100 | $ | 18,993 | |||||
TELECOMMUNICATION SERVICES - 3.1% | ||||||||
Wireless Telecommunication Services - 3.1% | ||||||||
Vodafone Group Plc (DR)(1) | 906,700 | 25,836 | ||||||
|
| |||||||
Total common and preferred stocks | 763,435 | |||||||
Par Amount | ||||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 8.9% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $74,581 (Cost $74,581)(5) | $ | 74,581 | $ | 74,581 | ||||
|
| |||||||
Total investments - 100.3% | 838,016 | |||||||
Other assets less liabilities - (0.3%) | (2,536 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(6) | $ | 835,480 | ||||||
|
|
(1) | The Fund considers the company to be from outside of the United States. See the Fund's Statement of Additional Information for information on how a particular country is assigned. |
Security | Country | Trading Currency | ||
Royal Dutch Shell PLC, Class A (DR) | United Kingdom | U.S. dollar | ||
Samsung Electronics Co., Ltd., Preferred | Korea | Korean won | ||
Tesco plc | United Kingdom | British pound | ||
Vodafone Group Plc (DR) | United Kingdom | U.S. dollar |
(2) | Non-income producing security. |
(3) | Affiliated company as defined by the Investment Company Act of 1940, as amended. See Note (7) in Notes to Financial Statements. |
(4) | Non-voting shares. |
(5) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 2.375 | % | 5/31/2018 | $ | 8,939 | |||||||
U.S. Treasury Note | 1.500 | % | 8/31/2018 | 55,114 | ||||||||
U.S. Treasury Bond | 3.875 | % | 8/15/2040 | 12,023 | ||||||||
|
| |||||||||||
$ | 76,076 | |||||||||||
|
|
(6) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Berkshire Hathaway Inc. | United States | 4.5 | % | |||
Samsung Electronics Co., Ltd. | Korea | 3.8 | ||||
Apache Corporation | United States | 3.8 | ||||
Apple Inc. | United States | 3.5 | ||||
The Western Union Company | United States | 3.3 | ||||
Baker Hughes Incorporated | United States | 3.2 | ||||
Vodafone Group Plc | United Kingdom | 3.1 | ||||
The Progressive Corporation | United States | 3.1 | ||||
Cisco Systems, Inc. | United States | 3.0 | ||||
Oracle Corporation | United States | 2.9 | ||||
|
| |||||
Total | 34.2 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
48
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012
Dollar values in thousands
EMERGING MARKETS | GLOBAL OPPORTUNITIES | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 773,853 | $ | 297,957 | ||||
Short-term investments (repurchase agreements), at value | 14,379 | 15,330 | ||||||
|
|
|
| |||||
Total investments | 788,232 | 313,287 | ||||||
Cash | - | (1) | 1 | |||||
Foreign currency | 546 | 51 | ||||||
Unrealized gain on foreign currency forward and spot contracts | 12 | - | (1) | |||||
Receivable from investments sold | 5,007 | 2,268 | ||||||
Receivable from fund shares sold | 98 | 713 | ||||||
Dividends and interest receivable | 868 | 192 | ||||||
|
|
|
| |||||
Total assets | 794,763 | 316,512 | ||||||
LIABILITIES: | ||||||||
Unrealized loss on foreign currency forward and spot contracts | - | 31 | ||||||
Payable for investments purchased | 5,789 | 3,874 | ||||||
Payable for fund shares redeemed | 271 | 121 | ||||||
Payable for operating expenses | 349 | 171 | ||||||
Payable for foreign taxes(2) | 1,098 | 42 | ||||||
|
|
|
| |||||
Total liabilities | 7,507 | 4,239 | ||||||
|
|
|
| |||||
Total net assets | $ | 787,256 | $ | 312,273 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 899,737 | $ | 280,108 | ||||
Net unrealized appreciation (depreciation) on investments and foreign currency related transactions | (26,417 | ) | 39,564 | |||||
Accumulated undistributed net investment income (loss) | 6,546 | (531 | ) | |||||
Accumulated undistributed net realized losses on investments and foreign currency related transactions | (92,610 | ) | (6,868 | ) | ||||
|
|
|
| |||||
$ | 787,256 | $ | 312,273 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 228,090 | ||||||
Institutional Shares | $ | 494,836 | $ | 84,183 | ||||
Advisor Shares | $ | 292,420 | ||||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | 15,988,438 | |||||||
Institutional Shares | 38,795,770 | 5,891,877 | ||||||
Advisor Shares | 22,913,019 | |||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 14.27 | ||||||
Institutional Shares | $ | 12.75 | $ | 14.29 | ||||
Advisor Shares | $ | 12.76 | ||||||
Cost of securities of unaffiliated issuers held | $ | 813,585 | $ | 273,665 | ||||
Cost of foreign currency | $ | 545 | $ | 52 |
(1) | Amount rounds to less than $1. |
(2) | Including foreign taxes on unrealized gains | |||||
Emerging Markets | $ | 1,066 | ||||
Global Opportunities | 33 |
The accompanying notes are an integral part of the financial statements.
49
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
GLOBAL VALUE | INTERNATIONAL | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 199,890 | $ | 9,470,795 | ||||
Investments in securities, affiliated, at value | 7,759 | - | ||||||
Short-term investments (repurchase agreements), at value | 21,478 | 108,556 | ||||||
|
|
|
| |||||
Total investments | 229,127 | 9,579,351 | ||||||
Cash | 26 | 1 | ||||||
Foreign currency | 68 | 3,401 | ||||||
Unrealized gain on foreign currency forward and spot contracts | - | 242 | ||||||
Receivable from investments sold | 583 | 90,148 | ||||||
Receivable from fund shares sold | 36,175 | 25,899 | ||||||
Dividends and interest receivable | 284 | 25,220 | ||||||
|
|
|
| |||||
Total assets | 266,263 | 9,724,262 | ||||||
LIABILITIES: | ||||||||
Unrealized loss on foreign currency forward and spot contracts | 63 | 2 | ||||||
Payable for investments purchased | 85 | 47,899 | ||||||
Payable for fund shares redeemed | 25 | 21,501 | ||||||
Payable for operating expenses | 178 | 3,397 | ||||||
Payable for foreign taxes | 6 | 1,173 | ||||||
|
|
|
| |||||
Total liabilities | 357 | 73,972 | ||||||
|
|
|
| |||||
Total net assets | $ | 265,906 | $ | 9,650,290 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 237,371 | $ | 9,654,215 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 28,295 | 1,668,066 | ||||||
Accumulated undistributed net investment income | 321 | 118,396 | ||||||
Accumulated undistributed net realized losses on investments and foreign currency related transactions | (81 | ) | (1,790,387 | ) | ||||
|
|
|
| |||||
$ | 265,906 | $ | 9,650,290 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 217,057 | $ | 6,877,615 | ||||
Institutional Shares | $ | 48,849 | $ | 2,772,675 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 18,736,910 | 292,196,037 | ||||||
Institutional Shares | 4,218,155 | 117,008,860 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 11.58 | $ | 23.54 | ||||
Institutional Shares | $ | 11.58 | $ | 23.70 | ||||
Cost of securities of unaffiliated issuers held | $ | 194,740 | $ | 7,911,123 | ||||
Cost of securities of affiliated issuers held | $ | 6,029 | $ | - | ||||
Cost of foreign currency | $ | 68 | $ | 3,403 |
The accompanying notes are an integral part of the financial statements.
50
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
INTERNATIONAL VALUE | MID CAP | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 5,123,468 | $ | 6,105,771 | ||||
Investments in securities, affiliated, at value | 794,455 | 321,085 | ||||||
Short-term investments (repurchase agreements), at value | 758,286 | 309,376 | ||||||
|
|
|
| |||||
Total investments | 6,676,209 | 6,736,232 | ||||||
Cash | 1 | 518 | ||||||
Foreign currency | 2,008 | - | ||||||
Unrealized gain on foreign currency forward and spot contracts | 61 | - | ||||||
Receivable from investments sold | 573 | 39,111 | ||||||
Receivable from fund shares sold | 29,367 | 16,707 | ||||||
Dividends and interest receivable | 16,405 | 2,181 | ||||||
|
|
|
| |||||
Total assets | 6,724,624 | 6,794,749 | ||||||
LIABILITIES: | ||||||||
Unrealized loss on foreign currency forward and spot contracts | 5,081 | - | ||||||
Payable for investments purchased | 74,661 | 52,847 | ||||||
Payable for fund shares redeemed | 3,125 | 21,005 | ||||||
Payable for operating expenses | 2,073 | 2,952 | ||||||
Payable for foreign taxes | 449 | - | ||||||
|
|
|
| |||||
Total liabilities | 85,389 | 76,804 | ||||||
|
|
|
| |||||
Total net assets | $ | 6,639,235 | $ | 6,717,945 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 5,654,212 | $ | 4,453,465 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 955,507 | 2,102,607 | ||||||
Accumulated undistributed net investment income (loss) | 50,909 | (37,201 | ) | |||||
Accumulated undistributed net realized gains (losses) on investments and foreign currency related transactions | (21,393 | ) | 199,074 | |||||
|
|
|
| |||||
$ | 6,639,235 | $ | 6,717,945 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 5,081,735 | $ | 5,115,836 | ||||
Institutional Shares | $ | 1,557,500 | $ | 1,602,109 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 176,951,861 | 131,836,234 | ||||||
Institutional Shares | 54,087,709 | 39,788,644 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 28.72 | $ | 38.80 | ||||
Institutional Shares | $ | 28.80 | $ | 40.27 | ||||
Cost of securities of unaffiliated issuers held | $ | 5,148,464 | $ | 4,401,399 | ||||
Cost of securities of affiliated issuers held | $ | 567,174 | $ | 232,225 | ||||
Cost of foreign currency | $ | 2,011 |
(1) | Amount rounds to less than $1. |
The accompanying notes are an integral part of the financial statements.
51
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
MID CAP VALUE | SMALL CAP | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 6,325,932 | $ | 644,749 | ||||
Investments in securities, affiliated, at value | 1,145,737 | 44,351 | ||||||
Short-term investments (repurchase agreements), at value | 551,252 | 34,153 | ||||||
|
|
|
| |||||
Total investments | 8,022,921 | 723,253 | ||||||
Cash | - | (1) | 48 | |||||
Receivable from investments sold | 1,689 | - | ||||||
Receivable from fund shares sold | 14,290 | 12,200 | ||||||
Dividends and interest receivable | 13,901 | 32 | ||||||
|
|
|
| |||||
Total assets | 8,052,801 | 735,533 | ||||||
LIABILITIES: | ||||||||
Payable for investments purchased | 7,677 | 7,458 | ||||||
Payable for fund shares redeemed | 11,510 | 848 | ||||||
Payable for operating expenses | 4,073 | 334 | ||||||
|
|
|
| |||||
Total liabilities | 23,260 | 8,640 | ||||||
|
|
|
| |||||
Total net assets | $ | 8,029,541 | $ | 726,893 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 6,832,155 | $ | 715,825 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 837,964 | 142,953 | ||||||
Accumulated undistributed net investment income (loss) | 28,090 | (3,241 | ) | |||||
Accumulated undistributed net realized gains (losses) on investments and foreign currency related transactions | 331,332 | (128,644 | ) | |||||
|
|
|
| |||||
$ | 8,029,541 | $ | 726,893 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 7,753,814 | $ | 676,139 | ||||
Institutional Shares | $ | 275,727 | $ | 50,754 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 367,150,812 | 32,355,156 | ||||||
Institutional Shares | 13,036,006 | 2,429,113 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 21.12 | $ | 20.90 | ||||
Institutional Shares | $ | 21.15 | $ | 20.89 | ||||
Cost of securities of unaffiliated issuers held | $ | 6,021,185 | $ | 554,539 | ||||
Cost of securities of affiliated issuers held | $ | 1,163,772 | $ | 25,761 |
(1) | Amount rounds to less than $1. |
The accompanying notes are an integral part of the financial statements.
52
ARTISAN FUNDS
Statements of Assets and Liabilities – September 30, 2012 (Continued)
Dollar values in thousands
SMALL CAP VALUE | VALUE | |||||||
ASSETS: | ||||||||
Investments in securities, unaffiliated, at value | $ | 2,116,719 | $ | 700,338 | ||||
Investments in securities, affiliated, at value | 435,494 | 63,097 | ||||||
Short-term investments (repurchase agreements), at value | 109,801 | 74,581 | ||||||
|
|
|
| |||||
Total investments | 2,662,014 | 838,016 | ||||||
Cash | 1 | 1 | ||||||
Receivable from investments sold | 1,377 | - | ||||||
Receivable from fund shares sold | 14,195 | 1,708 | ||||||
Dividends and interest receivable | 1,834 | 1,071 | ||||||
|
|
|
| |||||
Total assets | 2,679,421 | 840,796 | ||||||
LIABILITIES: | ||||||||
Payable for investments purchased | 9,230 | 4,245 | ||||||
Payable for fund shares redeemed | 13,749 | 590 | ||||||
Payable for operating expenses | 1,372 | 481 | ||||||
|
|
|
| |||||
Total liabilities | 24,351 | 5,316 | ||||||
|
|
|
| |||||
Total net assets | $ | 2,655,070 | $ | 835,480 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Fund shares issued and outstanding | $ | 2,501,727 | $ | 788,976 | ||||
Net unrealized appreciation on investments and foreign currency related transactions | 110,341 | 84,652 | ||||||
Accumulated undistributed net investment income | 7,607 | 3,244 | ||||||
Accumulated undistributed net realized gains (losses) on investments and foreign currency related transactions | 35,395 | (41,392 | ) | |||||
|
|
|
| |||||
$ | 2,655,070 | $ | 835,480 | |||||
|
|
|
| |||||
SUPPLEMENTARY INFORMATION: | ||||||||
Net assets | ||||||||
Investor Shares | $ | 2,348,847 | $ | 677,753 | ||||
Institutional Shares | $ | 306,223 | $ | 157,727 | ||||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||||||
Investor Shares | 154,155,879 | 59,846,553 | ||||||
Institutional Shares | 20,070,127 | 13,896,744 | ||||||
Net asset value, offering price and redemption price per share | ||||||||
Investor Shares | $ | 15.24 | $ | 11.32 | ||||
Institutional Shares | $ | 15.26 | $ | 11.35 | ||||
Cost of securities of unaffiliated issuers held | $ | 2,135,942 | $ | 695,937 | ||||
Cost of securities of affiliated issuers held | $ | 415,731 | $ | 57,424 |
The accompanying notes are an integral part of the financial statements.
53
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012
Dollar values in thousands
EMERGING MARKETS | GLOBAL OPPORTUNITIES | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 18,971 | $ | 2,174 | ||||
Interest | 5 | 2 | ||||||
|
|
|
| |||||
Total investment income | 18,976 | 2,176 | ||||||
EXPENSES: | ||||||||
Advisory fees | 8,361 | 2,058 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 468 | |||||||
Institutional Shares | 21 | 15 | ||||||
Advisor Shares | 912 | |||||||
Shareholder communications | ||||||||
Investor Shares | 28 | |||||||
Institutional Shares | 15 | 9 | ||||||
Advisor Shares | 57 | |||||||
Custodian fees | 562 | 74 | ||||||
Accounting fees | 69 | 59 | ||||||
Professional fees | 102 | 94 | ||||||
Registration fees | ||||||||
Investor Shares | 43 | |||||||
Institutional Shares | 49 | 28 | ||||||
Advisor Shares | 31 | |||||||
Directors’ fees | 25 | 7 | ||||||
Other operating expenses | 26 | 9 | ||||||
|
|
|
| |||||
Total operating expenses | 10,230 | 2,892 | ||||||
|
|
|
| |||||
Net investment income (loss) | 8,746 | (716 | ) | |||||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments(1) | (80,098 | ) | 16,957 | |||||
Foreign currency related transactions | (735 | ) | (88 | ) | ||||
|
|
|
| |||||
(80,833 | ) | 16,869 | ||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments(1) | 163,379 | 36,773 | ||||||
Foreign currency related transactions | 77 | (32 | ) | |||||
|
|
|
| |||||
163,456 | 36,741 | |||||||
|
|
|
| |||||
Net gain on investments and foreign currency related transactions | 82,623 | 53,610 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 91,369 | $ | 52,894 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Net of foreign taxes on realized gains | Net of foreign taxes on unrealized gains | ||||||||||
Emerging Markets | $ | 2,070 | $ | 491 | $ | 913 | ||||||||
Global Opportunities | 116 | 37 | 16 |
The accompanying notes are an integral part of the financial statements.
54
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
GLOBAL VALUE | INTERNATIONAL | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 2,756 | $ | 222,546 | ||||
Interest | 1 | 37 | ||||||
|
|
|
| |||||
Total investment income | 2,757 | 222,583 | ||||||
EXPENSES: | ||||||||
Advisory fees | 1,383 | 82,585 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 401 | 13,495 | ||||||
Institutional Shares | 6 | 24 | ||||||
Shareholder communications | ||||||||
Investor Shares | 31 | 651 | ||||||
Institutional Shares | 1 | 37 | ||||||
Custodian fees | 63 | 2,972 | ||||||
Accounting fees | 56 | 69 | ||||||
Professional fees | 64 | 429 | ||||||
Registration fees | ||||||||
Investor Shares | 71 | 142 | ||||||
Institutional Shares | 15 | 57 | ||||||
Directors’ fees | 5 | 284 | ||||||
Other operating expenses | 3 | 199 | ||||||
|
|
|
| |||||
Total operating expenses | 2,099 | 100,944 | ||||||
Less amounts waived or paid by the Adviser | (25 | ) | - | |||||
|
|
|
| |||||
Net expenses | 2,074 | 100,944 | ||||||
|
|
|
| |||||
Net investment income | 683 | 121,639 | ||||||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments(1) | 488 | 179,992 | ||||||
Foreign currency related transactions | 5 | (3,404 | ) | |||||
|
|
|
| |||||
493 | 176,588 | |||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 26,767 | 1,971,511 | ||||||
Foreign currency related transactions | (77 | ) | 641 | |||||
|
|
|
| |||||
26,690 | 1,972,152 | |||||||
|
|
|
| |||||
Net gain on investments and foreign currency related transactions | 27,183 | 2,148,740 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 27,866 | $ | 2,270,379 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized loss on investments from affiliated issuers | |||||||
Global Value | $ | 92 | $ | (14 | ) | |||||
International | 18,582 | - |
The accompanying notes are an integral part of the financial statements.
55
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
INTERNATIONAL VALUE | MID CAP | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 108,257 | $ | 26,988 | ||||
Dividends, from affiliated issuers(1) | 9,765 | 227 | ||||||
Interest | 43 | 31 | ||||||
|
|
|
| |||||
Total investment income | 118,065 | 27,246 | ||||||
EXPENSES: | ||||||||
Advisory fees | 48,879 | 57,114 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 7,103 | 13,134 | ||||||
Institutional Shares | 23 | 23 | ||||||
Shareholder communications | ||||||||
Investor Shares | 490 | 661 | ||||||
Institutional Shares | 23 | 26 | ||||||
Custodian fees | 1,209 | 200 | ||||||
Accounting fees | 69 | 63 | ||||||
Professional fees | 278 | 259 | ||||||
Registration fees | ||||||||
Investor Shares | 209 | 134 | ||||||
Institutional Shares | 73 | 167 | ||||||
Directors’ fees | 165 | 191 | ||||||
Other operating expenses | 115 | 143 | ||||||
|
|
|
| |||||
Total operating expenses | 58,636 | 72,115 | ||||||
|
|
|
| |||||
Net investment income (loss) | 59,429 | (44,869 | ) | |||||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||||||
Net realized gain on: | ||||||||
Investments(1) | 21,963 | 323,384 | ||||||
Foreign currency related transactions | 10,327 | - | ||||||
|
|
|
| |||||
32,290 | 323,384 | |||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 990,554 | 963,741 | ||||||
Foreign currency related transactions | (7,179 | ) | - | |||||
|
|
|
| |||||
983,375 | 963,741 | |||||||
|
|
|
| |||||
Net gain on investments and foreign currency related transactions | 1,015,667 | 1,287,125 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 1,075,094 | $ | 1,242,256 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Net of foreign taxes withheld on dividends from affiliated issuers | Including net realized gain on investments from affiliated issuers | ||||||||||
International Value | $ | 7,560 | $ | 359 | $ | 994 | ||||||||
Mid Cap | 78 | - | 13,853 |
The accompanying notes are an integral part of the financial statements.
56
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
MID CAP VALUE | SMALL CAP | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 122,291 | $ | 2,486 | ||||
Dividends, from affiliated issuers(1) | 20,350 | - | ||||||
Interest | 39 | 3 | ||||||
|
|
|
| |||||
Total investment income | 142,680 | 2,489 | ||||||
EXPENSES: | ||||||||
Advisory fees | 70,994 | 4,865 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 17,515 | 973 | ||||||
Institutional Shares | 11 | 8 | ||||||
Shareholder communications | ||||||||
Investor Shares | 1,380 | 98 | ||||||
Institutional Shares | 9 | 1 | ||||||
Custodian fees | 147 | 48 | ||||||
Accounting fees | 51 | 51 | ||||||
Professional fees | 353 | 63 | ||||||
Registration fees | ||||||||
Investor Shares | 276 | 110 | ||||||
Institutional Shares | 33 | 21 | ||||||
Directors’ fees | 242 | 14 | ||||||
Other operating expenses | 173 | 11 | ||||||
|
|
|
| |||||
Total operating expenses | 91,184 | 6,263 | ||||||
|
|
|
| |||||
Net investment income (loss) | 51,496 | (3,774 | ) | |||||
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS: | ||||||||
Net realized gain on: | ||||||||
Investments(1) | 469,421 | 24,005 | ||||||
|
|
|
| |||||
469,421 | 24,005 | |||||||
Net increase in unrealized appreciation or depreciation on: | ||||||||
Investments | 808,666 | 95,540 | ||||||
|
|
|
| |||||
808,666 | 95,540 | |||||||
|
|
|
| |||||
Net gain on investments | 1,278,087 | 119,545 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 1,329,583 | $ | 115,771 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized gain on investments from affiliated issuers | |||||||
Mid Cap Value | $ | - | $ | 15,545 | ||||||
Small Cap | 5 | 1,624 |
The accompanying notes are an integral part of the financial statements.
57
ARTISAN FUNDS
Statements of Operations – For the Year Ended September 30, 2012 (Continued)
Dollar values in thousands
SMALL CAP VALUE | VALUE | |||||||
INVESTMENT INCOME: | ||||||||
Dividends, from unaffiliated issuers(1) | $ | 32,516 | $ | 12,306 | ||||
Dividends, from affiliated issuers(1) | 10,993 | - | ||||||
Interest | 10 | 12 | ||||||
|
|
|
| |||||
Total investment income | 43,519 | 12,318 | ||||||
EXPENSES: | ||||||||
Advisory fees | 26,841 | 4,896 | ||||||
Transfer agent fees | ||||||||
Investor Shares | 6,340 | 1,636 | ||||||
Institutional Shares | 11 | 14 | ||||||
Shareholder communications | ||||||||
Investor Shares | 585 | 102 | ||||||
Institutional Shares | 7 | 9 | ||||||
Custodian fees | 73 | 38 | ||||||
Accounting fees | 52 | 58 | ||||||
Professional fees | 162 | 72 | ||||||
Registration fees | ||||||||
Investor Shares | 69 | 104 | ||||||
Institutional Shares | 18 | 20 | ||||||
Directors’ fees | 93 | 21 | ||||||
Other operating expenses | 73 |
|
15 |
| ||||
|
|
|
| |||||
Total operating expenses | 34,324 | 6,985 | ||||||
|
|
|
| |||||
Net investment income | 9,195 | 5,333 | ||||||
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments(1) | 51,140 | 20,180 | ||||||
Foreign currency related transactions | - | (37 | ) | |||||
|
|
|
| |||||
51,140 | 20,143 | |||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 358,959 | 108,695 | ||||||
Foreign currency related transactions | - | (3 | ) | |||||
|
|
|
| |||||
358,959 | 108,692 | |||||||
|
|
|
| |||||
Net gain on investments | 410,099 | 128,835 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 419,294 | $ | 134,168 | ||||
|
|
|
|
(1) | Fund | Net of foreign taxes withheld on dividends, unaffiliated issuers | Including net realized loss on investments from affiliated issuers | |||||||
Small Cap Value | $ | - | $ | (50,502 | ) | |||||
Value | 70 | (298 | ) |
The accompanying notes are an integral part of the financial statements.
58
ARTISAN FUNDS
Statements of Changes in Net Assets
Dollar values in thousands
EMERGING MARKETS | GLOBAL OPPORTUNITIES | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | 8,746 | $ | 10,346 | $ | (716 | ) | $ | (999 | ) | ||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | (80,098 | ) | 9,473 | 16,957 | 2,181 | |||||||||||
Foreign currency related transactions | (735 | ) | (2,693 | ) | (88 | ) | (432 | ) | ||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 163,379 | (255,535 | ) | 36,773 | (14,114 | ) | ||||||||||
Foreign currency related transactions | 77 | 336 | (32 | ) | (9 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 91,369 | (238,073 | ) | 52,894 | (13,373 | ) | ||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | - | - | ||||||||||||||
Institutional Shares | (3,946 | ) | (3,345 | ) | - | - | ||||||||||
Advisor Shares | (1,843 | ) | (1,835 | ) | ||||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (1,240 | ) | (1,034 | ) | ||||||||||||
Institutional Shares | (1,096 | ) | - | (371 | ) | - | ||||||||||
Advisor Shares | (777 | ) | - | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (7,662 | ) | (5,180 | ) | (1,611 | ) | (1,034 | ) | ||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase in net assets resulting from fund share activities | 34,270 | 392,736 | 105,263 | 97,676 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 117,977 | 149,483 | 156,546 | 83,269 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 669,279 | 519,796 | 155,727 | 72,458 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 787,256 | $ | 669,279 | $ | 312,273 | $ | 155,727 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 6,546 | $ | 4,668 | $ | (531 | ) | $ | (412 | ) | ||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
59
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
GLOBAL VALUE | INTERNATIONAL | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 683 | $ | 304 | $ | 121,639 | $ | 121,485 | ||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | 488 | 1,882 | 179,992 | 994,852 | ||||||||||||
Foreign currency related transactions | 5 | (140 | ) | (3,404 | ) | (79 | ) | |||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 26,767 | (5,271 | ) | 1,971,511 | (1,875,691 | ) | ||||||||||
Foreign currency related transactions | (77 | ) | 6 | 641 | (1,399 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 27,866 | (3,219 | ) | 2,270,379 | (760,832 | ) | ||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | - | (313 | ) | (87,816 | ) | (61,274 | ) | |||||||||
Institutional Shares | - | - | (33,126 | ) | (26,489 | ) | ||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (1,393 | ) | - | - | - | |||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (1,393 | ) | (313 | ) | (120,942 | ) | (87,763 | ) | ||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 173,767 | 34,444 | (325,555 | ) | (973,666 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | 200,240 | 30,912 | 1,823,882 | (1,822,261 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 65,666 | 34,754 | 7,826,408 | 9,648,669 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 265,906 | $ | 65,666 | $ | 9,650,290 | $ | 7,826,408 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 321 | $ | (325 | ) | $ | 118,396 | $ | 121,055 | |||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
60
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
INTERNATIONAL VALUE | MID CAP | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | 59,429 | $ | 51,313 | $ | (44,869 | ) | $ | (40,985 | ) | ||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | 21,963 | 140,973 | 323,384 | 665,237 | ||||||||||||
Foreign currency related transactions | 10,327 | (18,918 | ) | |||||||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 990,554 | (483,261 | ) | 963,741 | (348,059 | ) | ||||||||||
Foreign currency related transactions | (7,179 | ) | 1,338 | - | - | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 1,075,094 | (308,555 | ) | 1,242,256 | 276,193 | |||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | (1,955 | ) | (39,445 | ) | - | - | ||||||||||
Institutional Shares | (1,195 | ) | (12,501 | ) | - | - | ||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (9,181 | ) | - | - | - | |||||||||||
Institutional Shares | (3,059 | ) | - | - | - | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (15,390 | ) | (51,946 | ) | - | - | ||||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 1,304,049 | 1,298,269 | 464,933 | (143,118 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 2,363,753 | 937,768 | 1,707,189 | 133,075 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 4,275,482 | 3,337,714 | 5,010,756 | 4,877,681 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 6,639,235 | $ | 4,275,482 | $ | 6,717,945 | $ | 5,010,756 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 50,909 | $ | (12,850 | ) | $ | (37,201 | ) | $ | - | ||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
61
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
MID CAP VALUE | SMALL CAP | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | 51,496 | $ | 45,496 | $ | (3,774 | ) | $ | (2,411 | ) | ||||||
Net realized gain on investments | 469,421 | 585,460 | 24,005 | 81,909 | ||||||||||||
Net increase (decrease) in unrealized appreciation or depreciation | 808,666 | (531,683 | ) | 95,540 | (48,672 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 1,329,583 | 99,273 | 115,771 | 30,826 | ||||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | (43,082 | ) | (48,963 | ) | - | - | ||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (499,737 | ) | (97,741 | ) | - | - | ||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (542,819 | ) | (146,704 | ) | - | - | �� | |||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | 1,042,313 | 508,268 | 284,422 | (26,856 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 1,829,077 | 460,837 | 400,193 | 3,970 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 6,200,464 | 5,739,627 | 326,700 | 322,730 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 8,029,541 | $ | 6,200,464 | $ | 726,893 | $ | 326,700 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income (loss) | $ | 28,090 | $ | 24,143 | $ | (3,241 | ) | $ | - | |||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
62
ARTISAN FUNDS
Statements of Changes in Net Assets (Continued)
Dollar values in thousands
SMALL CAP VALUE | VALUE | |||||||||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 9,195 | $ | 1,882 | $ | 5,333 | $ | 3,743 | ||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments | 51,140 | 317,544 | 20,180 | 32,265 | ||||||||||||
Foreign currency related transactions | - | - | (37 | ) | (41 | ) | ||||||||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||||||||||
Investments | 358,959 | (422,880 | ) | 108,695 | (42,872 | ) | ||||||||||
Foreign currency related transactions | - | - | (3 | ) | (1 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 419,294 | (103,454 | ) | 134,168 | (6,906 | ) | ||||||||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Investor Shares | (1,078 | ) | (2,837 | ) | (3,915 | ) | (2,455 | ) | ||||||||
Institutional Shares | - | - | (682 | ) | - | |||||||||||
Net realized gains on investment transactions: | ||||||||||||||||
Investor Shares | (238,253 | ) | - | - | - | |||||||||||
Institutional Shares | - | - | - | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions paid to shareholders | (239,331 | ) | (2,837 | ) | (4,597 | ) | (2,455 | ) | ||||||||
FUND SHARE ACTIVITIES: | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share activities | (132,156 | ) | 23,138 | 243,747 | 205,150 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | 47,807 | (83,153 | ) | 373,318 | 195,789 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, beginning of period | 2,607,263 | 2,690,416 | 462,162 | 266,373 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets, end of period | $ | 2,655,070 | $ | 2,607,263 | $ | 835,480 | $ | 462,162 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income | $ | 7,607 | $ | 1,066 | $ | 3,244 | $ | 2,606 | ||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
63
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period
The financial highlights tables are intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of a Fund’s operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions).
ARTISAN EMERGING MARKETS FUND | ||||||||||||||||||||
Institutional Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 11.37 | $ | 15.23 | $ | 13.02 | $ | 11.15 | $ | 16.71 | ||||||||||
Net Investment Income(1) | 0.15 | 0.21 | 0.17 | 0.09 | 0.18 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 1.36 | (3.93 | ) | 2.15 | 1.91 | (5.41 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 1.51 | (3.72 | ) | 2.32 | 2.00 | (5.23 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.10 | ) | (0.14 | ) | (0.11 | ) | (0.12 | ) | (0.01 | ) | ||||||||||
Distributions from Net Realized Gains | (0.03 | ) | - | - | (0.01 | ) | (0.32 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.13 | ) | (0.14 | ) | (0.11 | ) | (0.13 | ) | (0.33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 12.75 | $ | 11.37 | $ | 15.23 | $ | 13.02 | $ | 11.15 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 13.47 | % | (24.67 | )% | 17.94 | % | 18.66 | % | (31.91 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 494.8 | $ | 352.1 | $ | 284.2 | $ | 104.0 | $ | 69.8 | ||||||||||
Ratio of Expenses to Average Net Assets(2) | 1.16 | % | 1.19 | % | 1.31 | % | 1.50 | % | 1.50 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets(2) | 1.25 | % | 1.41 | % | 1.25 | % | 1.02 | % | 1.17 | % | ||||||||||
Portfolio Turnover Rate | 38.19 | % | 30.86 | % | 25.89 | % | 56.88 | % | 42.24 | % |
(1) | Computed based on average shares outstanding. |
(2) | The ratios of expenses to average net assets and net investment income (loss) to average net assets exclude expenses waived or paid by the Adviser or the board of directors. Absent expenses waived or paid by the Adviser or the board of directors, the ratios of expenses to average net assets and net investment income (loss) to average net assets would have been as follows: |
Year or Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | ||||||
9/30/2009 | 1.81 | % | 0.71 | % | ||||
9/30/2008 | 1.51 | % | 1.16 | % |
The accompanying notes are an integral part of the financial statements.
64
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN GLOBAL OPPORTUNITIES FUND | ||||||||
Institutional Shares | ||||||||
Year or Period Ended | ||||||||
9/30/2012 | 9/30/2011(1) | |||||||
Net Asset Value Beginning of Period | $ | 10.88 | 13.38 | |||||
Net Investment Income (Loss)(2) | 0.01 | (0.02 | ) | |||||
Net Realized and Unrealized Gain (Loss) on Investments | 3.51 | (2.48 | ) | |||||
|
|
|
| |||||
Total Income (Loss) from Investment Operations | 3.52 | (2.50 | ) | |||||
|
|
|
| |||||
Distributions from Net Realized Gains | (0.11 | ) | - | |||||
|
|
|
| |||||
Total Distributions | (0.11 | ) | - | |||||
|
|
|
| |||||
Net Asset Value End of Period | $ | 14.29 | $ | 10.88 | ||||
|
|
|
| |||||
Total Return(3) | 32.68 | % | (18.68 | )% | ||||
Net Assets End of Period (millions) | $ | 84.2 | $ | 13.0 | ||||
Ratio of Expenses to Average Net Assets(4)(5) | 1.08 | % | 1.50 | % | ||||
Ratio of Net Investment Income (Loss) to Average Net Assets(4)(5) | 0.07 | % | (1.42 | )% | ||||
Portfolio Turnover Rate(3) | 43.30 | % | 76.18 | % |
(1) | For the period from commencement of operations July 26, 2011 through September 30, 2011. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
(5) | The ratios of expenses to average net assets and net investment loss to average net assets exclude expenses waived or paid by the Adviser. Absent expenses waived or paid by the Adviser, the ratios of expenses to average net assets and net investment loss to average net assets would have been as follows: |
Year or Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Loss to Average Net Assets | ||||||||||||
9/30/2011 | 2.22 | % | (1.44 | )% |
The accompanying notes are an integral part of the financial statements.
65
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN GLOBAL VALUE FUND | ||||
Institutional Shares | ||||
Period Ended | ||||
9/30/2012(1) | ||||
Net Asset Value Beginning of Period | $ | 10.75 | ||
Net Investment Income(2) | 0.01 | |||
Net Realized and Unrealized Gain on Investments | 0.82 | |||
|
| |||
Total Income from Investment Operations | 0.83 | |||
|
| |||
Net Asset Value End of Period | $ | 11.58 | ||
|
| |||
Total Return(3) | 7.72 | % | ||
Net Assets End of Period (millions) | $ | 48.8 | ||
Ratio of Expenses to Average Net Assets(4)(5) | 1.50 | % | ||
Ratio of Net Investment Income to Average Net Assets(4)(5) | 0.32 | % | ||
Portfolio Turnover Rate(3) | 22.34 | % |
(1) | For the period from commencement of operations July 17, 2012 through September 30, 2012. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
(5) | The ratios of expenses to average net assets and net investment loss to average net assets exclude expenses waived or paid by the Adviser. Absent expenses waived or paid by the Adviser, the ratios of expenses to average net assets and net investment loss to average net assets would have been as follows: |
Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Loss to Average Net Assets | ||||||||||
9/30/2012 | 2.43 | % | (0.61 | )% |
The accompanying notes are an integral part of the financial statements.
66
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN INTERNATIONAL FUND | ||||||||||||||||||||
Institutional Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 18.50 | $ | 20.72 | $ | 20.29 | $ | 20.51 | $ | 33.99 | ||||||||||
Net Investment Income(1) | 0.33 | 0.32 | 0.22 | 0.28 | 0.42 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 5.21 | (2.31 | ) | 0.49 | 0.46 | (9.16 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 5.54 | (1.99 | ) | 0.71 | 0.74 | (8.74 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.34 | ) | (0.23 | ) | (0.28 | ) | (0.26 | ) | (0.27 | ) | ||||||||||
Distributions from Net Realized Gains | - | - | - | (0.70 | ) | (4.47 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.34 | ) | (0.23 | ) | (0.28 | ) | (0.96 | ) | (4.74 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 23.70 | $ | 18.50 | $ | 20.72 | $ | 20.29 | $ | 20.51 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 30.37 | % | (9.76 | )% | 3.54 | % | 5.25 | % | (29.83 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 2,772.7 | $ | 1,989.3 | $ | 2,353.9 | $ | 2,912.7 | $ | 3,043.8 | ||||||||||
Ratio of Expenses to Average Net Assets | 0.98 | % | 0.99 | % | 0.98 | % | 0.99 | % | 0.98 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.52 | % | 1.42 | % | 1.10 | % | 1.76 | % | 1.50 | % | ||||||||||
Portfolio Turnover Rate | 55.39 | % | 70.36 | % | 70.51 | % | 82.38 | % | 54.42 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
67
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN INTERNATIONAL VALUE FUND | ||||||||||||||||||||
Institutional Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 23.47 | $ | 24.76 | $ | 22.83 | $ | 21.22 | $ | 28.53 | ||||||||||
Net Investment Income(1) | 0.34 | 0.35 | 0.36 | 0.21 | 0.52 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 5.09 | (1.24 | ) | 2.02 | 1.66 | (5.58 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 5.43 | (0.89 | ) | 2.38 | 1.87 | (5.06 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.03 | ) | (0.40 | ) | (0.45 | ) | (0.26 | ) | (0.58 | ) | ||||||||||
Distributions from Net Realized Gains | (0.07 | ) | - | - | - | (1.67 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.10 | ) | (0.40 | ) | (0.45 | ) | (0.26 | ) | (2.25 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 28.80 | $ | 23.47 | $ | 24.76 | $ | 22.83 | $ | 21.22 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 23.19 | % | (3.84 | )% | 10.66 | % | 9.14 | % | (18.92 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 1,557.5 | $ | 1,042.8 | $ | 649.6 | $ | 280.2 | $ | 186.1 | ||||||||||
Ratio of Expenses to Average Net Assets | 0.98 | % | 0.99 | % | 1.01 | % | 1.04 | % | 1.03 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.29 | % | 1.30 | % | 1.57 | % | 1.17 | % | 2.10 | % | ||||||||||
Portfolio Turnover Rate | 20.42 | % | 30.90 | % | 21.02 | % | 55.49 | % | 44.72 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
68
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN MID CAP FUND | ||||||||||||||||||||
Institutional Shares | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 32.23 | $ | 30.50 | $ | 25.00 | $ | 24.71 | $ | 37.78 | ||||||||||
Net Investment Loss(1) | (0.20 | ) | (0.16 | ) | (0.14 | ) | (0.06 | ) | (0.14 | ) | ||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 8.24 | 1.89 | 5.64 | 0.63 | (7.03 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 8.04 | 1.73 | 5.50 | 0.57 | (7.17 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions from Net Realized Gains | - | - | - | (0.28 | ) | (5.90 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | - | - | - | (0.28 | ) | (5.90 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 40.27 | $ | 32.23 | $ | 30.50 | $ | 25.00 | $ | 24.71 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 24.95 | % | 5.67 | % | 22.00 | % | 2.77 | % | (22.23 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 1,602.1 | $ | 510.0 | $ | 502.4 | $ | 454.5 | $ | 537.2 | ||||||||||
Ratio of Expenses to Average Net Assets | 0.97 | % | 0.96 | % | 0.96 | % | 0.97 | % | 0.95 | % | ||||||||||
Ratio of Net Investment Loss to Average Net Assets | (0.51 | )% | (0.47 | )% | (0.51 | )% | (0.32 | )% | (0.46 | )% | ||||||||||
Portfolio Turnover Rate | 46.21 | % | 62.87 | % | 63.46 | % | 68.39 | % | 79.76 | % |
(1) | Computed based on average shares outstanding. |
The accompanying notes are an integral part of the financial statements.
69
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN MID CAP VALUE FUND | ||||
Institutional Shares Period Ended | ||||
9/30/2012(1) | ||||
Net Asset Value Beginning of Period | $ | 20.93 | ||
Net Investment Income(2) | 0.21 | |||
Net Realized and Unrealized Gain on Investments | 0.01 | |||
|
| |||
Total Income from Investment Operations | 0.22 | |||
|
| |||
Net Asset Value End of Period | $ | 21.15 | ||
|
| |||
Total Return(3) | 1.05 | % | ||
Net Assets End of Period (millions) | $ | 275.7 | ||
Ratio of Expenses to Average Net Assets(4) | 1.01 | % | ||
Ratio of Net Investment Income to Average Net Assets(4) | 1.04 | % | ||
Portfolio Turnover Rate(3) | 27.86 | % |
(1) | For the period from commencement of operations February 1, 2012 through September 30, 2012. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
The accompanying notes are an integral part of the financial statements.
70
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN SMALL CAP FUND | ||||
Institutional Shares | ||||
Period Ended | ||||
9/30/2012(1) | ||||
Net Asset Value Beginning of Period | $ | 19.62 | ||
Net Investment Loss(2) | (0.18 | ) | ||
Net Realized and Unrealized Gain on Investments | 1.45 | |||
|
| |||
Total Income from Investment Operations | 1.27 | |||
|
| |||
Net Asset Value End of Period | $ | 20.89 | ||
|
| |||
Total Return(3) | 6.47 | % | ||
Net Assets End of Period (millions) | $ | 50.8 | ||
Ratio of Expenses to Average Net Assets(4) | 1.42 | % | ||
Ratio of Net Investment Loss to Average Net Assets(4) | (0.93 | )% | ||
Portfolio Turnover Rate(3) | 69.56 | % |
(1) | For the period from commencement of operations May 7, 2012 through September 30, 2012. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
The accompanying notes are an integral part of the financial statements.
71
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN SMALL CAP VALUE FUND | ||||
Institutional Shares | ||||
Period Ended | ||||
9/30/2012(1) | ||||
Net Asset Value Beginning of Period | $ | 16.16 | ||
Net Investment Income(2) | 0.06 | |||
Net Realized and Unrealized Loss on Investments | (0.96 | ) | ||
|
| |||
Total Loss from Investment Operations | (0.90 | ) | ||
|
| |||
Net Asset Value End of Period | $ | 15.26 | ||
|
| |||
Total Return(3) | (5.57 | )% | ||
Net Assets End of Period (millions) | $306.2 | |||
Ratio of Expenses to Average Net Assets(4) | 1.00 | % | ||
Ratio of Net Investment Income to Average Net Assets(4) | 0.56 | % | ||
Portfolio Turnover Rate(3) | 28.17 | % |
(1) | For the period from commencement of operations February 1, 2012 through September 30, 2012. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
The accompanying notes are an integral part of the financial statements.
72
ARTISAN FUNDS
Financial Highlights – For a share outstanding throughout each period (Continued)
ARTISAN VALUE FUND | ||||||||
Institutional Shares | ||||||||
Year or Period Ended | ||||||||
9/30/2012 | 9/30/2011(1) | |||||||
Net Asset Value Beginning of Period | $ | 9.12 | $ | 10.60 | ||||
Net Investment Income(2) | 0.11 | 0.02 | ||||||
Net Realized and Unrealized Gain (Loss) on Investments | 2.21 | (1.50 | ) | |||||
|
|
|
| |||||
Total Income (Loss) from Investment Operations | 2.32 | (1.48 | ) | |||||
|
|
|
| |||||
Dividends from Net Investment Income | (0.09 | ) | - | |||||
|
|
|
| |||||
Total Distributions | (0.09 | ) | - | |||||
|
|
|
| |||||
Net Asset Value End of Period | $ | 11.35 | $ | 9.12 | ||||
|
|
|
| |||||
Total Return(3) | 25.64 | % | (13.96 | )% | ||||
Net Assets End of Period (millions) | $ | 157.7 | $ | 53.5 | ||||
Ratio of Expenses to Average Net Assets(4) | 0.79 | % | 1.09 | % | ||||
Ratio of Net Investment Income to Average Net Assets(4) | 1.02 | % | 1.02 | % | ||||
Portfolio Turnover Rate(3) | 66.13 | % | 78.36 | % |
(1) | For the period from commencement of operations July 26, 2011 through September 30, 2011. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
The accompanying notes are an integral part of the financial statements.
73
ARTISAN FUNDS
Notes to Financial Statements – September 30, 2012
(1) | Organization: |
Artisan Partners Funds, Inc. (“Artisan Funds”) was incorporated on January 5, 1995, as a Wisconsin corporation and is registered under the Investment Company Act of 1940, as amended. Artisan Funds is a series comprised of twelve open-end, diversified mutual funds. The following funds (each a “Fund” and collectively the “Funds”) are covered by this report:
Fund Name | Fund Inception Date | Institutional Share Inception Date | ||||||
Artisan Emerging Markets Fund (“Emerging Markets Fund” or “Emerging Markets”) | June 26, 2006 | June 26, 2006 | ||||||
Artisan Global Opportunities Fund (“Global Opportunities Fund” or “Global Opportunities”) | September 22, 2008 | July 26, 2011 | ||||||
Artisan Global Value Fund (“Global Value Fund” or “Global Value”) | December 10, 2007 | July 17, 2012 | ||||||
Artisan International Fund (“International Fund” or “International”) | December 28, 1995 | July 1, 1997 | ||||||
Artisan International Value Fund (“International Value Fund” or “International Value”) | September 23, 2002 | October 1, 2006 | ||||||
Artisan Mid Cap Fund (“Mid Cap Fund” or “Mid Cap”) | June 27, 1997 | July 1, 2000 | ||||||
Artisan Mid Cap Value Fund (“Mid Cap Value Fund” or “Mid Cap Value”) | March 28, 2001 | February 1, 2012 | ||||||
Artisan Small Cap Fund (“Small Cap Fund” or “Small Cap”) | March 28, 1995 | May 7, 2012 | ||||||
Artisan Small Cap Value Fund (“Small Cap Value Fund” or “Small Cap Value”) | September 29, 1997 | February 1, 2012 | ||||||
Artisan Value Fund (“Value Fund” or “Value”) | March 27, 2006 | July 26, 2011 |
Artisan Global Opportunities Fund changed its name from Artisan Growth Opportunities Fund effective July 9, 2012.
Each Fund’s investment objective is to seek long-term capital growth. Each Fund, with the exception of Emerging Markets Fund, offers shares of capital stock of two classes – Institutional Shares and Investor Shares – and has offered Investor Shares since the commencement of operations. Emerging Markets Fund offers shares of capital stock of two classes – Institutional and Advisor Shares – and has offered Institutional Shares since the Fund’s commencement of operations and began offering Advisor Shares on June 2, 2008. Advisor Shares are sold to employee benefit plans, clients of financial advisors, clients of sponsored programs and institutional or other investors. The financial statements of Investor Shares for all Funds except Emerging Markets and Advisor Shares for Emerging Markets are presented in separate reports. All investments and exchanges are subject to approval by the Funds.
Each class of shares has equal rights with respect to portfolio assets and voting privileges. Each class has exclusive voting rights with respect to any matters involving only that class.
Income, expenses not specific to a particular class and realized and unrealized gains and losses were allocated daily to each class of shares based upon the relative net asset value of outstanding shares. Expenses attributable to a particular class of shares, such as transfer agency fees, shareholder communication expenses and registration fees, were allocated directly to that class.
74
NOTES TO FINANCIAL STATEMENTS
Each Fund is managed by Artisan Partners Limited Partnership (the “Adviser” or “Artisan Partners”). The Adviser is wholly owned by Artisan Partners Holdings LP (“Artisan Holdings”).
(2) | Summary of significant accounting policies: |
The following is a summary of significant accounting policies of Artisan Funds in effect during the period covered by the financial statements, which were in accordance with United States generally accepted accounting principles.
(a) | Security valuation – The net asset value (“NAV”) of the shares of each class of each Fund was determined as of the close of regular session trading on the New York Stock Exchange (“NYSE”) (usually 4:00 p.m., Eastern Time) each day the NYSE was open for regular session trading. The NAV of each class of shares was determined by dividing the value of each Fund’s securities and other assets attributed to that class, less its liabilities attributed to that class, by the number of outstanding shares of that class of that Fund. |
In determining NAV, each equity security traded on a securities exchange, including the Nasdaq Stock Market, and over-the-counter securities were valued at the closing price as of the time of valuation on the exchange or market designated by the Funds’ accounting agent or pricing vendor as the principal exchange (each, a “principal exchange”). The closing price provided by the pricing vendor for a principal exchange may differ from the price quoted elsewhere and may represent information such as last sale price, an official closing price, a closing auction price or other information, depending on exchange or market convention. Absent closing price information for a security from the principal exchange as of the time of valuation, the security was valued using (i) the closing price on another exchange on which the security traded (if such price was made available by a pricing vendor) or (ii) the most recent bid quotation on the principal exchange or, if such bid was not available, from a secondary exchange or in the over-the-counter market. Short-term investments, other than repurchase agreements, maturing within sixty days from the valuation date were valued at amortized cost, which approximates market value. |
Global Opportunities Fund and Global Value Fund generally invested a significant portion of their total assets in securities principally traded in markets outside the U.S. Emerging Markets Fund, International Fund and International Value Fund generally invested a significant portion, and perhaps as much as substantially all of their total assets, in securities principally traded in markets outside the U.S. Each of the other Funds had the ability to invest, and some did invest, in securities principally traded outside the U.S. The foreign markets in which the Funds invested were sometimes open on days when the NYSE was not open and the Funds did not calculate their NAVs, and sometimes were not open on days when the Funds did calculate their NAVs. Even on days on which both the foreign market and the NYSE were open, several hours may have passed between the time when trading in the foreign market closed and the time as of which the Funds calculated their NAVs. That was generally the case for markets in Europe, Asia, Australia and other Far Eastern markets. The regular closing time of foreign markets in North and South America was generally the same as the closing time of the NYSE and the time as of which the Funds calculated their NAVs. |
75
NOTES TO FINANCIAL STATEMENTS
Securities for which prices were not readily available were valued by Artisan Funds’ valuation committee (the “valuation committee”) at a fair value determined in good faith under procedures established by and under the general supervision of Artisan Funds’ board of directors (the “board of directors”). A price was considered to be not readily available, and a Fund may therefore have used fair value pricing, if, among other things, the valuation committee believed that the price determined did not reflect a fair value of the security or that the value of the security might have been materially affected by events occurring after the close of the market in which the security was principally traded but before the time for determination of NAV (a “subsequent event”). A subsequent event might include a company-specific development (for example, announcement of a merger that is made after the close of the foreign market), a development that might affect an entire market or region (for example, imposition of foreign exchange controls by a foreign government), a potentially global development (such as a terrorist attack that may be expected to have an impact on investor expectations worldwide) or a significant change in values of market indices, exchange traded funds or other financial instruments in the U.S. or other markets. Artisan Funds monitored for subsequent events using several tools, including the use of a third party research service to assist in determining estimates of fair values for foreign securities. That service utilized statistical data based on historical performance of securities, markets and other data in developing factors used to estimate a fair value. An indication by any of those tools of a potential material change in the value of securities resulted in either a meeting of the valuation committee, which considered whether a subsequent event had occurred and whether local market closing prices continued to represent fair values for potentially affected non-U.S. securities, and/or a valuation based on information provided by the third party research service. |
When fair value pricing is employed, the value of a portfolio security used by a Fund to calculate its NAV may differ from quoted or published prices for the same security. Estimates of fair values utilized by the Funds as described above may differ from the value realized on the sale of those securities and the differences may have been material to the NAV of the applicable Fund. |
Foreign stocks as an asset class may underperform U.S. stocks, and foreign stocks may be more volatile than U.S. stocks. Risks relating to investment in foreign securities (including, but not limited to, depositary receipts and participation certificates) include: currency exchange rate fluctuation; less available public information about the issuers of securities; less stringent regulatory standards; lack of uniform accounting, auditing and financial reporting standards; and country risks including less liquidity, high inflation rates, unfavorable economic practices, political instability and expropriation and nationalization risks. |
The risks of foreign investments typically are greater in emerging and less developed markets. For example, political and economic structures in these less developed countries may be new and changing rapidly, which may cause instability and greater risk of loss. These securities markets may be less developed, and securities in those markets are generally more volatile and less liquid than those in developed markets. Emerging market countries also are more likely to experience high levels of inflation, deflation or currency devaluations, which could hurt their economies and securities markets. Certain emerging markets also may face other significant internal or external |
76
NOTES TO FINANCIAL STATEMENTS
risks, including a heightened risk of war, and ethnic, religious and racial conflicts. In addition, governments in many emerging market countries participate to a significant degree in their economies and securities markets, which may impair investment and economic growth of companies in those markets. High levels of national debt tend to make these markets heavily reliant on foreign capital and, therefore, vulnerable to capital flight. |
(b) | Fair value measurements – Under United States generally accepted accounting principles for fair value measurement, accounting standards clarify the definition of fair value for financial reporting, establish a framework for measuring fair value and require additional disclosures about the use of fair value measurements. In accordance with this standard, fair value is defined as the price that each Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. The standard establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds’ investments. The three-tier hierarchy of inputs is summarized in three broad levels: |
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including but not limited to quoted prices for similar securities, interest rates, credit risks and securities trading primarily outside the U.S. whose value the Fund adjusted as a result of significant market movements following the close of local trading) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining a fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk or liquidity associated with investing in those securities. |
77
NOTES TO FINANCIAL STATEMENTS
The following table summarizes each Fund’s investments by major security type, based on the inputs used to determine their fair values as of September 30, 2012 (in thousands): |
Fund | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
Emerging Markets | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Developed Markets | $ | 26,356 | $ | - | $ | - | $ | 26,356 | ||||||||
Emerging Asia | 403,706 | - | 773 | 404,479 | ||||||||||||
Europe, Middle East & Africa | 147,399 | 7,518 | - | 154,917 | ||||||||||||
Latin America | 187,973 | - | - | 187,973 | ||||||||||||
Convertible Debentures | - | 128 | - | 128 | ||||||||||||
Repurchase Agreements | - | 14,379 | - | 14,379 | ||||||||||||
Total | $ | 765,434 | $ | 22,025 | $ | 773 | $ | 788,232 | ||||||||
Global Opportunities | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Americas | $ | 187,227 | $ | - | $ | - | $ | 187,227 | ||||||||
Emerging Markets | 45,135 | - | - | 45,135 | ||||||||||||
Europe | 52,319 | - | - | 52,319 | ||||||||||||
Pacific Basin | 13,276 | - | - | 13,276 | ||||||||||||
Repurchase Agreements | - | 15,330 | - | 15,330 | ||||||||||||
Total Investments in Securities | 297,957 | 15,330 | - | 313,287 | ||||||||||||
Derivatives | ||||||||||||||||
Foreign Currency Forward Contracts(2) | - | (23 | ) | - | (23 | ) | ||||||||||
Total | $ | 297,957 | $ | 15,307 | $ | - | $ | 313,264 | ||||||||
Global Value | ||||||||||||||||
Equity and Equity-Linked Securities(1) | ||||||||||||||||
Americas | $ | 126,559 | $ | - | $ | - | $ | 126,559 | ||||||||
Europe | 70,107 | 1,990 | - | 72,097 | ||||||||||||
Pacific Basin | 8,993 | - | - | 8,993 | ||||||||||||
Repurchase Agreements | - | 21,478 | - | 21,478 | ||||||||||||
Total Investments in Securities | 205,659 | 23,468 | - | 229,127 | ||||||||||||
Derivatives | ||||||||||||||||
Foreign Currency Forward Contracts(2) | - | (63 | ) | - | (63 | ) | ||||||||||
Total | $ | 205,659 | $ | 23,405 | $ | - | $ | 229,064 |
78
NOTES TO FINANCIAL STATEMENTS
Fund | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
International | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Americas | $ | 876,706 | $ | - | $ | - | $ | 876,706 | ||||||||
Emerging Markets | 1,045,230 | - | - | 1,045,230 | ||||||||||||
Europe | 5,153,161 | - | - | 5,153,161 | ||||||||||||
Pacific Basin | 2,275,973 | - | 119,725 | 2,395,698 | ||||||||||||
Repurchase Agreements | - | 108,556 | - | 108,556 | ||||||||||||
Total | $ | 9,351,070 | $ | 108,556 | $ | 119,725 | $ | 9,579,351 | ||||||||
International Value | ||||||||||||||||
Equity and Equity-Linked Securities(1) | ||||||||||||||||
Americas | $ | 1,239,483 | $ | - | $ | - | $ | 1,239,483 | ||||||||
Emerging Markets | - | - | - | - | ||||||||||||
Europe | 3,817,313 | 124,510 | - | 3,941,823 | ||||||||||||
Pacific Basin | 736,617 | - | - | 736,617 | ||||||||||||
Repurchase Agreements | - | 758,286 | - | 758,286 | ||||||||||||
Total Investments in Securities | 5,793,413 | 882,796 | - | 6,676,209 | ||||||||||||
Derivatives | ||||||||||||||||
Foreign Currency Forward Contracts(2) | - | (4,763 | ) | - | (4,763 | ) | ||||||||||
Total | $ | 5,793,413 | $ | 878,033 | $ | - | $ | 6,671,446 | ||||||||
Mid Cap | ||||||||||||||||
Equity Securities(1) | $ | 6,426,856 | $ | - | $ | - | $ | 6,426,856 | ||||||||
Repurchase Agreements | - | 309,376 | - | 309,376 | ||||||||||||
Total | $ | 6,426,856 | $ | 309,376 | $ | - | $ | 6,736,232 | ||||||||
Mid Cap Value | ||||||||||||||||
Equity Securities(1) | $ | 7,471,669 | $ | - | $ | - | $ | 7,471,669 | ||||||||
Repurchase Agreements | - | 551,252 | - | 551,252 | ||||||||||||
Total | $ | 7,471,669 | $ | 551,252 | $ | - | $ | 8,022,921 | ||||||||
Small Cap | ||||||||||||||||
Equity Securities(1) | $ | 689,100 | $ | - | $ | - | $ | 689,100 | ||||||||
Repurchase Agreements | - | 34,153 | - | 34,153 | ||||||||||||
Total | $ | 689,100 | $ | 34,153 | $ | - | $ | 723,253 | ||||||||
Small Cap Value | ||||||||||||||||
Equity Securities(1) | $ | 2,552,213 | $ | - | $ | - | $ | 2,552,213 | ||||||||
Repurchase Agreements | - | 109,801 | - | 109,801 | ||||||||||||
Total | $ | 2,552,213 | $ | 109,801 | $ | - | $ | 2,662,014 | ||||||||
Value | ||||||||||||||||
Equity Securities(1) | $ | 763,435 | $ | - | $ | - | $ | 763,435 | ||||||||
Repurchase Agreements | - | 74,581 | - | 74,581 | ||||||||||||
Total | $ | 763,435 | $ | 74,581 | $ | - | $ | 838,016 | ||||||||
(1) See the Fund’s Schedule of Investments for sector or country classifications. |
| |||||||||||||||
(2) Derivative instruments are valued at unrealized appreciation (depreciation). |
|
79
NOTES TO FINANCIAL STATEMENTS
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Funds recognize transfers between the levels as of the end of the period. At September 30, 2011, the fair market values of certain securities were adjusted due to developments that occurred between the time of the close of the foreign markets on which those securities trade and the close of regular session trading on the NYSE which resulted in their Level 2 classification. The following table summarizes security transfers from Level 2 to Level 1 for each Fund as of September 30, 2012 (in thousands): |
Transfers from Level 2 to Level 1 | ||||
Emerging Markets | $ | 459,182 | ||
Global Opportunities | 41,875 | |||
Global Value | 62,502 | |||
International | 6,301,405 | |||
International Value | 3,897,602 | |||
Value Fund | 15,891 |
As of September 30, 2012, two equity securities held in Emerging Markets Fund were classified as Level 3 due to a halt in trading. Due to the lack of observable market data for these securities, fair market values were determined in good faith by the valuation committee using various inputs, including unobservable inputs of discounts for illiquidity ranging from 50% to 90%. Increasing or decreasing the discounts for illiquidity would decrease or increase the calculated fair market value of the securities, respectively. As of September 30, 2012, one equity security held in International Fund was classified as Level 3 due to a significant event that occurred after local market close. As a result, fair market value was determined in good faith by the valuation committee using the unobservable input of a 5% discount to the last reported trade at local market close. Increasing or decreasing the discount would decrease or increase the calculated fair market value of the security, respectively. As of September 30, 2012, the reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value, is as follows (in thousands): |
Emerging Markets(1) | International Fund(2) | |||||||
Balance as of September 30, 2011 | $ | - | $ | - | ||||
Transfers into Level 3 | 773 | 119,725 | ||||||
|
|
|
| |||||
Balance as of September 30, 2012 | $ | 773 | $ | 119,725 | ||||
|
|
|
| |||||
Net change in unrealized appreciation (depreciation) for investments held as of September 30, 2012 | $ | - | $ | - | ||||
(1) All Level 3 securities in the Emerging Markets Fund were equity securities with a regional classification of Emerging Asia. |
| |||||||
(2) The Level 3 security in the International Fund was an equity security with a regional classification of Pacific Basin. |
|
(c) | Taxes – No provision was made for federal income taxes or excise taxes since each Fund intends to (i) comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and (ii) distribute to its shareholders substantially all of its taxable income as well as net realized gains from the sale of investment securities. The Funds may utilize earnings and profits distributed to shareholders on redemptions of Fund shares as part of the dividends paid deduction. |
80
NOTES TO FINANCIAL STATEMENTS
The Funds have analyzed the tax positions taken on federal income tax returns for all remaining open tax years (fiscal years 2008 through 2012) and have concluded that as of September 30, 2012, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and each state’s department of revenue. |
The Funds may be subject to taxes imposed on realized and unrealized gains on securities of certain foreign countries in which the Funds invest. The foreign tax expense, if any, was recorded on an accrual basis and is included in “Net realized gain (loss) on investments” and “Net increase (decrease) in unrealized appreciation or depreciation on investments” on the accompanying Statements of Operations. The amount of foreign tax owed, if any, is included in “Payable for foreign taxes” on the accompanying Statements of Assets and Liabilities. That amount is comprised of withholding taxes on foreign dividends and taxes on unrealized gains. |
As of and during the year ended September 30, 2012, the Funds did not have any liabilities for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year ended September 30, 2012, the Funds did not incur any interest or penalties. |
(d) | Portfolio transactions – In determining a Fund’s NAV, security transactions and shareholder transactions were accounted for no later than one business day after trade date, in accordance with applicable regulations. However, for financial reporting purposes, security transactions and shareholder transactions were recorded on trade date in accordance with United States generally accepted accounting principles. Net realized gains and losses on securities were computed on specific security lot identification. |
(e) | Foreign currency translation – Values of foreign investments, open foreign currency forward contracts, payables for capital gains taxes, payables and receivables for securities transactions, dividend and reclaim receivables, other receivables and payables, and cash denominated in a foreign currency were translated into U.S. dollars using a spot market rate of exchange as of the time of determination of each Fund’s NAV on the day of valuation. Purchases and sales of investments and dividend and interest income were translated into U.S. dollars using the current spot market rate of exchange on the date of such transactions. The portion of security gains or losses resulting from changes in foreign exchange rates was included with net realized and unrealized gain or loss from investments, as appropriate, for both financial reporting and tax purposes. |
The Funds may enter into (a) foreign currency spot contracts and (b) foreign currency forward contracts. Foreign currency spot contracts are used to facilitate the purchase and sale of non-U.S. securities and generally settle within three business days. Foreign currency forward contracts are used to hedge against foreign currency exchange rate risks on non-U.S. dollar denominated investment securities. Open foreign currency spot contracts and foreign currency forward contracts, if any, were recorded at market |
81
NOTES TO FINANCIAL STATEMENTS
value and recorded in the Statements of Assets and Liabilities. Realized and unrealized gains and losses were reported as foreign currency related transactions and are recorded in the Statements of Operations. For tax purposes, these foreign exchange gains and losses were treated as ordinary income or loss. |
As of September 30, 2012, Global Opportunities, Global Value and International Value had outstanding foreign currency forward contracts, as shown on the Schedules of Investments. Foreign currency spot contracts are not separately disclosed in the Schedules of Investments. |
The Funds could be exposed to loss if the counterparties fail to perform under these contracts. Other foreign currency related transaction gains and losses may result from currency gains and losses realized from the difference between the amounts of dividends and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. The net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions arose from changes in the values of assets and liabilities, other than investments in securities, resulting from changes in foreign exchange rates. |
(f) | Repurchase agreements – Each Fund may enter into repurchase agreements with institutions that the Adviser determined were creditworthy pursuant to criteria adopted by the board of directors. Repurchase agreements were recorded at cost plus accrued interest and were collateralized in an amount greater than or equal to the repurchase price plus accrued interest. Collateral (in the form of U.S. government securities) was held by the Funds’ custodian and in the event of default on the obligation of the counterparty to repurchase, the Funds had the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the proceeds from any sale of such collateral were less than the repurchase price, the Fund would have suffered a loss. |
(g) | Depositary receipts – Each of the Funds may invest in depositary receipts. Depositary receipts are typically issued by a financial institution (a “depositary”), evidencing ownership interests in a security issued by an issuer and deposited with the depositary. |
(h) | Equity-linked participation certificates – Emerging Markets Fund, Global Opportunities Fund, Global Value Fund, International Fund and International Value Fund may invest in equity-linked participation certificates. Equity-linked participation certificates are derivative securities which are designed to provide synthetic exposure to one or more underlying securities. An investment in an equity-linked participation certificate typically entitles the holder to a return equal to the market return of the underlying security or securities, subject to the credit risk of the issuing financial institution. There is no off-balance sheet risk associated with equity-linked participation certificates and the Funds’ potential loss is limited to the purchase price of the securities. The Funds are exposed to credit risk associated with the counterparty to the transaction, which is monitored by the Funds’ management on a periodic basis. |
(i) | Commission recapture – Each of the Funds had the ability to direct portfolio trades to various brokers that have agreed to rebate a portion of the commissions generated. |
82
NOTES TO FINANCIAL STATEMENTS
Such cash rebates were made directly to the applicable Fund and were included in net realized gain or loss on investments in the Statements of Operations for the year ended September 30, 2012 as follows (in thousands): |
Global Opportunities | $ | 14 | ||
Global Value | - | (1) | ||
International | 142 | |||
International Value | 61 | |||
Mid Cap | 132 | |||
Mid Cap Value | 183 | |||
Small Cap | 26 | |||
Small Cap Value | 165 | |||
Value | 40 | |||
(1) Amount rounds to less than $1. |
(j) | Use of estimates – The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. |
(k) | Indemnifications – In the normal course of business, the Funds have entered into contracts in which the Funds agree to indemnify the other party or parties against various potential costs or liabilities. The Funds’ maximum exposure under these arrangements is unknown. No claim has been made for indemnification pursuant to any such agreement of the Funds. |
(l) | Other – Dividend income less foreign taxes withheld, if any, was generally recorded on the ex-dividend date. In some cases, the information was not available to the Fund on the ex-dividend date. In such cases, which may have included private placements and foreign securities, dividends were recorded as soon after the ex-dividend date as reliable information became available to the Funds. Non-cash dividends included in dividend income, if any, were generally recorded at the fair market value of securities received. Interest income was reported on the accrual basis. Distributions to shareholders were recorded on the ex-dividend date. Expenses attributable to Artisan Funds were generally allocated to each Fund based on net assets. However, other expense allocation methodologies were used, depending on the nature of the expense item. Expenses attributable to a particular Fund or class were allocated directly to that Fund or class. |
The character of income and net realized gains and losses may differ in some instances for financial statement and tax purposes and may result in reclassification of permanent differences among certain capital accounts to more appropriately conform financial accounting to tax characterizations of dividend and capital gain distributions. |
Emerging Markets Fund, Global Opportunities Fund, Global Value Fund, International Fund and International Value Fund generally imposed a 2% redemption fee on shares held 90 days or less. Those redemption fees were recorded as a reduction in the cost of shares redeemed and had the primary effect of increasing paid-in capital. Each Fund reserved the right to waive or reduce the 2% redemption fee on shares held 90 days or |
83
NOTES TO FINANCIAL STATEMENTS
less at its discretion when the Fund believed such waiver was in the best interests of the Fund, including but not limited to when it determined that imposition of the redemption fee was not necessary to protect the Fund from the effects of short-term trading. The Funds waived the fee on redemption of shares held by certain authorized agents or other Fund intermediaries and otherwise in accordance with the Funds’ prospectus. |
(3) | Derivative Transactions: |
The fair value of derivative instruments as reported in the Statements of Assets and Liabilities as of September 30, 2012 was as follows (in thousands):
Fund | Risk Exposure Category | Statement of Assets and Liabilities location | Value | |||||
Global Opportunities | Foreign currency forward contracts | Unrealized loss on foreign currency forward and spot contracts | $ | (23 | ) | |||
Global Value | Foreign currency forward contracts | Unrealized loss on foreign currency forward and spot contracts | $ | (63 | ) | |||
International Value | Foreign currency forward contracts | Unrealized gain on foreign currency forward and spot contracts | $ | 58 | ||||
Foreign currency forward contracts | Unrealized loss on foreign currency forward and spot contracts | $ | (4,821 | ) |
The effect of derivative instruments on the Statements of Operations for the year ended September 30, 2012 was as follows (in thousands):
Amount of Realized Gain (Loss) on Derivatives Recognized in Income
Fund | Risk Exposure Category | Statement of Operations location | Value | |||||
Global Opportunities | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | 17 | ||||
Global Value | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | 26 | ||||
International Value | Foreign currency forward contracts | Net realized gain (loss) on foreign currency related transactions | $ | 11,152 |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Fund | Risk Exposure Category | Statement of Operations location | Value | |||||
Global Opportunities | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | $ | (28 | ) | |||
Global Value | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | $ | (78 | ) | |||
International Value | Foreign currency forward contracts | Net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions | $ | (6,668 | ) |
84
NOTES TO FINANCIAL STATEMENTS
Volume of derivative activity
Fund | Contracts Closed(1) | Contracts Opened(1) | Contracts Open at September 30, 2012 | |||||||||
Global Opportunities | 1 | 3 | 3 | |||||||||
Global Value | 3 | 2 | 2 | |||||||||
International Value | 1 | 3 | 3 |
(1) | During the year ended September 30, 2012. |
(4) | Transactions with affiliates: |
The Adviser, with which the officers and a director of Artisan Funds were affiliated, provided investment advisory and administrative services to the Funds. In exchange for those services each Fund paid a monthly management fee to the Adviser as follows:
Emerging Markets Fund
Average Daily Net Assets | Annual Rate | |||
All | 1.05 | % |
Global Opportunities Fund
Average Daily Net Assets | Annual Rate | |||
Less than $1 billion | 0.900 | % | ||
$1 billion to $4 billion | 0.875 | |||
$4 billion to $8 billion | 0.850 | |||
$8 billion to $12 billion | 0.825 | |||
Greater than $12 billion | 0.800 |
Global Value Fund
Average Daily Net Assets | Annual Rate | |||
Less than $1 billion | 1.000 | % | ||
$1 billion to $4 billion | 0.975 | |||
$4 billion to $8 billion | 0.950 | |||
$8 billion to $12 billion | 0.925 | |||
Greater than $12 billion | 0.900 |
International Value Fund, Mid Cap Fund, Mid Cap Value Fund, Small Cap Fund and Small Cap Value Fund
Average Daily Net Assets | Annual Rate | |||
Less than $500 million | 1.000 | % | ||
$500 million to $750 million | 0.975 | |||
$750 million to $1 billion | 0.950 | |||
Greater than $1 billion | 0.925 |
85
NOTES TO FINANCIAL STATEMENTS
International Fund
Average Daily Net Assets | Annual Rate | |||
Less than $500 million | 1.000 | % | ||
$500 million to $750 million | 0.975 | |||
$750 million to $1 billion | 0.950 | |||
$1 billion to $12 billion | 0.925 | |||
Greater than $12 billion | 0.900 |
Value Fund
Average Daily Net Assets | Annual Rate | |||
Less than $50 million | 0.800 | % | ||
$50 million to $100 million | 0.760 | |||
$100 million to $500 million | 0.720 | |||
$500 million to $7.5 billion | 0.680 | |||
Greater than $7.5 billion | 0.640 |
The Adviser has contractually agreed to waive its management fee, and to the extent that the fee waiver is insufficient, to reimburse Emerging Markets Fund, Global Opportunities Fund and Global Value Fund for any ordinary operating expenses in an amount sufficient to cause the Fund’s ordinary operating expenses, including the management fee, to be not more than 1.50% of average daily net assets, annually. This contract continues through February 1, 2014, at which time the Adviser will determine whether to renew, revise or discontinue it. For the year ended September 30, 2012, the Adviser waived management fees of approximately $25,000 for Global Value Fund.
The officers and director of Artisan Funds who are affiliated with the Adviser receive no compensation from the Funds. Each director who was not an affiliated person of the Adviser received an annual retainer of $200,000, payable quarterly, as well as reimbursement of expenses related to his or her duties as a director of Artisan Funds. The amount of the annual retainer increases by $10,000 with each new series of Artisan Funds. In addition, the non-interested chair of the board of directors received an annual retainer of $60,000, payable quarterly, and each chair of a board committee who was a non-interested director received an annual retainer of $30,000, payable quarterly. These fees were generally allocated to each of the Artisan Funds based on net assets, subject to a minimum allocation of $1,500 to each Fund per quarter.
Artisan Funds has adopted a deferred compensation plan for directors who are not affiliated persons of the Adviser that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Funds. For purposes of determining the amount owed to the directors under the plan, deferred amounts would be invested in shares of Artisan Funds as selected by the individual directors. Each Fund would purchase shares of Artisan Funds selected for deferral by the director in amounts equal to his investment, resulting in a Fund asset equal to the deferred compensation liability. As of September 30, 2012, no directors have elected to participate in the deferred compensation plan.
Shares of Artisan Funds were offered for sale by Artisan Partners Distributors LLC (“Distributors”). Distributors is wholly owned by Artisan Holdings. All distribution expenses relating to the Funds were paid by the Adviser.
86
NOTES TO FINANCIAL STATEMENTS
(5) | Line of credit arrangement: |
Artisan Funds is party to a line of credit agreement with State Street Bank and Trust Company (“SSB”), which expires in August 2013, under which each Fund may borrow up $75 million, provided that such borrowing does not exceed the lesser of (a) 33 1/3% of its adjusted net assets, with adjusted net assets being total assets less total liabilities (excluding indebtedness for borrowed money) after giving effect to the borrowing, and (b) the maximum amount the Fund is permitted to borrow pursuant to applicable law, pursuant to the Fund’s prospectus limitations on indebtedness, pursuant to any vote of the shareholders of the Fund, or pursuant to any limitation on borrowings in any applicable agreement with any governmental authority or regulator or any other applicable agreement or document to which such Fund is a party; provided that the aggregate borrowings by all Artisan Funds may not exceed $100 million. Artisan Funds paid a commitment fee at the annual rate of 0.10% on the unused portion of the line of credit and interest was charged on any borrowings at the higher of the current Federal Funds or overnight LIBOR rates plus 1.25%. The commitment fee is allocated to each Fund based on net assets. The use of the line of credit was generally restricted to temporary borrowing for extraordinary or emergency purposes. During the year ended September 30, 2012, there were no borrowings under the line of credit for Global Opportunities Fund, Global Value Fund, International Fund, International Value Fund, Mid Cap Fund, Mid Cap Value Fund, Small Cap Value Fund and Value Fund. During the year ended September 30, 2012, Emerging Markets Fund and Small Cap Fund had maximum borrowings of $13,951,000 and $7,888,000, respectively.
(6) | Investment transactions: |
The cost of securities purchased and the proceeds from the sale of securities (excluding short-term securities) for the year ended September 30, 2012 were as follows (dollar values in thousands):
Fund | Security Purchases | Security Sales | ||||||
Emerging Markets | $ | 324,723 | $ | 292,130 | ||||
Global Opportunities | 268,582 | 94,354 | ||||||
Global Value | 146,921 | 28,672 | ||||||
International | 4,773,519 | 5,001,386 | ||||||
International Value | 1,800,826 | 983,240 | ||||||
Mid Cap | 3,037,001 | 2,683,898 | ||||||
Mid Cap Value | 2,234,648 | 2,008,019 | ||||||
Small Cap | 561,228 | 323,622 | ||||||
Small Cap Value | 768,599 | 1,194,048 | ||||||
Value | 607,844 | 423,759 |
(7) | Transactions in securities of affiliates: |
The table below shows information about securities of the Funds’ “affiliates” (as defined below) that were held by the Funds, purchased or sold by the Funds, or from which dividends were received by the Funds during the year ended September 30, 2012 (dollar values in thousands). The Funds identify a company as an affiliate for the purpose of this
87
NOTES TO FINANCIAL STATEMENTS
report if one or more of the Funds owned, in the aggregate, voting securities that it believed represented 5% or more of that company’s outstanding voting securities (as defined by the Investment Company Act of 1940, as amended) during the year ended September 30, 2012.
As of 9/30/11 | Net Realized Gain (Loss) | As of 9/30/12 | ||||||||||||||||||||||||||||
Fund | Security | Share Balance | Purchase Cost | Sales Cost | Dividend Income(1) | Share Balance | Value | |||||||||||||||||||||||
Global Value | ||||||||||||||||||||||||||||||
Arch Capital Group Ltd.(2) | 78,490 | $ | 4,605 | $ | 502 | $ | (14 | ) | $ | - | 186,146 | $ | 7,759 | |||||||||||||||||
Total(3) | $ | 4,605 | $ | 502 | $ | (14 | ) | $ | - | $ | 7,759 | |||||||||||||||||||
International Value | ||||||||||||||||||||||||||||||
Aderans Co., Ltd.(2) | 2,420,067 | $ | 2,854 | $ | 485 | $ | (59 | ) | $ | - | 2,612,467 | $ | 35,752 | |||||||||||||||||
Arch Capital Group Ltd.(2) | 5,572,034 | 46,880 | 24,051 | 3,051 | - | 6,040,912 | 251,785 | |||||||||||||||||||||||
Carpetright PLC(2)(4)(5) | 2,956,377 | 4,476 | 3,345 | (856 | ) | - | 3,161,793 | 33,544 | ||||||||||||||||||||||
ICON PLC (DR)(2) | 2,871,675 | 32,316 | 6 | - | (6) | - | 4,501,487 | 109,701 | ||||||||||||||||||||||
Panalpina Welttransport Holding AG(5) | 1,093,317 | 44,276 | 10,454 | (1,996 | ) | 5,006 | 1,471,407 | 140,570 | ||||||||||||||||||||||
Qinetiq Group PLC | 62,402,252 | 23,846 | 23,808 | 1,431 | 2,684 | 61,299,386 | 187,579 | |||||||||||||||||||||||
Savills Plc | 9,951,406 | 8,662 | 4,893 | (577 | ) | 2,075 | 10,727,785 | 69,068 | ||||||||||||||||||||||
Total(3) | $ | 163,310 | $ | 67,042 | $ | 994 | $ | 9,765 | $ | 794,455 | ||||||||||||||||||||
Mid Cap | ||||||||||||||||||||||||||||||
athenahealth, Inc.(2) | 1,956,015 | $ | 22,292 | $ | 27,789 | $ | 13,759 | $ | - | 1,827,315 | $ | 167,693 | ||||||||||||||||||
Cepheid(2)(5) | 2,030,600 | 53,208 | 1,368 | 94 | - | 3,459,600 | 119,391 | |||||||||||||||||||||||
FLIR Systems, Inc.(5) | - | 42,778 | - | - | 227 | 1,702,200 | 34,001 | |||||||||||||||||||||||
Total(3) | $ | 118,278 | $ | 29,157 | $ | 13,853 | $ | 227 | $ | 321,085 | ||||||||||||||||||||
Mid Cap Value | ||||||||||||||||||||||||||||||
Alleghany Corporation(2)(4) | 599,507 | $ | 17,390 | $ | 2,553 | $ | 2,570 | $ | - | 640,251 | $ | 220,848 | ||||||||||||||||||
Arch Capital Group Ltd.(2) | 4,083,819 | 15,635 | 16,477 | 7,240 | - | 3,865,186 | 161,101 | |||||||||||||||||||||||
Arrow Electronics, Inc.(2) | 4,982,100 | 18,064 | 2,460 | 2,202 | - | 5,329,061 | 179,643 | |||||||||||||||||||||||
Avnet, Inc.(2)(5) | 6,353,610 | 18,904 | 2,713 | 2,465 | - | 6,754,379 | 196,485 | |||||||||||||||||||||||
FLIR Systems, Inc.(5) | 3,144,900 | 113,465 | 3,353 | 258 | 1,550 | 7,992,622 | 159,653 | |||||||||||||||||||||||
Hatteras Financial Corp.(4)(5) | 3,026,500 | 25,403 | 38,965 | 226 | 10,979 | 2,592,155 | 73,073 | |||||||||||||||||||||||
Ingram Micro Inc.(2) | 9,752,200 | 15,999 | 3,528 | 407 | - | 10,362,660 | 157,823 | |||||||||||||||||||||||
Lexmark International, Inc. | 4,113,200 | 12,726 | 3,031 | (555 | ) | 4,799 | 4,391,595 | 97,713 | ||||||||||||||||||||||
Patterson-UTI Energy, Inc.(5) | 604,400 | 128,149 | 2,423 | 92 | 1,110 | 7,961,374 | 126,108 | |||||||||||||||||||||||
Ryder System, Inc.(5) | 1,388,000 | 19,451 | 1,064 | 640 | 1,912 | 1,720,723 | 67,211 | |||||||||||||||||||||||
Total(3) | $ | 385,186 | $ | 76,567 | $ | 15,545 | $ | 20,350 | $ | 1,145,737 | ||||||||||||||||||||
Small Cap | ||||||||||||||||||||||||||||||
athenahealth, Inc.(2) | 204,500 | $ | 12,204 | $ | 8,519 | $ | 1,748 | $ | - | 239,900 | $ | 22,016 | ||||||||||||||||||
Cepheid(2)(5) | 387,400 | 13,693 | 4,024 | (124 | ) | - | 647,200 | 22,335 | ||||||||||||||||||||||
Total(3) | $ | 25,897 | $ | 12,543 | $ | 1,624 | $ | - | $ | 44,351 |
See footnotes | to the table on page 89. |
88
NOTES TO FINANCIAL STATEMENTS
As of 9/30/11 | Net Realized Gain (Loss) | As of 9/30/12 | ||||||||||||||||||||||||||||
Fund | Security | Share Balance | Purchase Cost | Sales Cost | Dividend Income(1) | Share Balance | Value | |||||||||||||||||||||||
Small Cap Value | ||||||||||||||||||||||||||||||
Arrow Electronics, Inc.(2) | 1,317,447 | $ | - | $ | 4,655 | $ | 1,499 | $ | - | 1,130,647 | $ | 38,114 | ||||||||||||||||||
Cloud Peak Energy Inc.(2)(4)(5) | 2,473,200 | 15,708 | 7,539 | (1,459 | ) | - | 3,004,100 | 54,374 | ||||||||||||||||||||||
Comfort Systems USA, Inc. | 2,698,526 | - | 6,113 | (1,098 | ) | 499 | 2,214,426 | 24,204 | ||||||||||||||||||||||
Comstock Resources, Inc.(2)(4)(5) | 1,957,290 | 8,528 | 12,779 | (7,723 | ) | - | 2,289,090 | 42,073 | ||||||||||||||||||||||
CONMED Corporation(4) | 1,574,059 | - | 11,423 | 4,103 | 488 | 1,031,659 | 29,402 | |||||||||||||||||||||||
CRA International, Inc.(2) | 661,700 | 2,017 | 1,968 | (497 | ) | - | 709,779 | 12,265 | ||||||||||||||||||||||
H.B. Fuller Company(4) | 3,158,433 | - | 23,837 | 4,558 | 846 | 2,144,333 | 65,788 | |||||||||||||||||||||||
Hatteras Financial Corp.(4) | 1,812,500 | 2,671 | 32,394 | (1,799 | ) | 4,814 | 833,500 | 23,496 | ||||||||||||||||||||||
Hawaiian Holdings, Inc.(2) | 2,548,300 | 3,998 | 2,058 | (169 | ) | - | 2,896,800 | 16,193 | ||||||||||||||||||||||
ICON PLC (DR)(2) | 921,041 | 12,341 | 3,427 | (326 | ) | - | 1,343,941 | 32,752 | ||||||||||||||||||||||
Lexmark International, Inc. | 1,471,587 | 4,093 | 15,155 | (5,176 | ) | 1,543 | 1,295,687 | 28,829 | ||||||||||||||||||||||
Manhattan Associates, Inc.(2)(4) | 1,184,624 | - | 25,811 | 27,383 | - | - | - | |||||||||||||||||||||||
Matthews International Corporation(5) | 1,351,113 | 9,481 | 7,824 | (1,081 | ) | 520 | 1,419,500 | 42,329 | ||||||||||||||||||||||
Neutral Tandem, Inc.(2) | 1,850,400 | 4,188 | 3,846 | (1,361 | ) | - | 1,988,900 | 18,656 | ||||||||||||||||||||||
ORION MARINE GROUP, INC.(2) | 1,851,400 | - | 3,280 | (1,597 | ) | - | 1,601,100 | 11,896 | ||||||||||||||||||||||
Penn Virginia Corporation(4) | 2,298,900 | - | 34,834 | (24,021 | ) | 124 | - | - | ||||||||||||||||||||||
PICO Holdings, Inc.(2) | 1,323,090 | - | 5,915 | (2,025 | ) | - | 1,138,890 | 25,989 | ||||||||||||||||||||||
Quanex Building Products Corporation(4) | 1,909,726 | 247 | 29,138 | 4,739 | 217 | - | - | |||||||||||||||||||||||
Rosetta Stone Inc.(2)(4) | 1,179,600 | - | 6,163 | (665 | ) | - | 736,000 | 9,384 | ||||||||||||||||||||||
Ryder System, Inc.(5) | 981,864 | 30,255 | 7,770 | (970 | ) | 1,395 | 1,601,064 | 62,538 | ||||||||||||||||||||||
Schnitzer Steel Industries, Inc., Class A(4)(5) | 383,000 | 36,720 | 4,781 | (1,087 | ) | 467 | 1,246,200 | 35,081 | ||||||||||||||||||||||
School Specialty, Inc.(4) | 1,769,253 | - | 42,634 | (36,666 | ) | - | - | - | ||||||||||||||||||||||
Sykes Enterprises, Incorporated(2) | 3,130,694 | - | 9,628 | (3,616 | ) | - | 2,723,494 | 36,604 | ||||||||||||||||||||||
Ultratech, Inc.(2) | 1,948,353 | 1,282 | 6,406 | 580 | - | 1,757,837 | 55,161 | |||||||||||||||||||||||
Universal Electronics Inc.(2)(4)(5) | 723,400 | 1,026 | 2,112 | (987 | ) | - | 718,000 | 12,622 | ||||||||||||||||||||||
Websense, Inc.(2)(5) | 1,417,637 | 12,628 | 5,007 | (1,041 | ) | - | 1,914,637 | 29,964 | ||||||||||||||||||||||
Total(3) | $ | 145,183 | $ | 316,497 | $ | (50,502 | ) | $ | 10,913 | $ | 435,494 | |||||||||||||||||||
Value | ||||||||||||||||||||||||||||||
Alleghany Corporation(2)(4)(5) | - | $ | 16,242 | $ | 476 | $ | (5 | ) | $ | - | 50,736 | $ | 17,501 | |||||||||||||||||
Arch Capital Group Ltd.(2) | 439,300 | 7,385 | 2,681 | 81 | - | 561,300 | 23,395 | |||||||||||||||||||||||
Avnet, Inc.(2)(5) | 585,800 | 8,060 | 3,694 | (95 | ) | - | 709,300 | 20,634 | ||||||||||||||||||||||
Ingram Micro Inc.(2) | 1,000,700 | 7,796 | 3,506 | (279 | ) | - | 1,252,000 | 19,068 | ||||||||||||||||||||||
Total(3) | $ | 39,483 | $ | 10,357 | $ | (298 | ) | $ | - | $ | 63,097 |
(1) | Net of foreign taxes withheld, if any. |
(2) | Non-income producing security. |
(3) | Total value as of September 30, 2012 is presented for only those issuers that were affiliates as of September 30, 2012. |
(4) | Issuer was no longer an affiliate as of September 30, 2012. |
(5) | Issuer was not an affiliate as of September 30, 2011. |
(6) | Amount rounds to less than $1. |
89
NOTES TO FINANCIAL STATEMENTS
(8) | Information for Federal income tax purposes: |
For Federal income tax purposes, the cost of investments, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) on investments as of September 30, 2012 was as follows (in thousands):
Fund | Cost of Investments | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) on Investments | ||||||||||||
Emerging Markets | $ | 854,184 | $ | 75,815 | $ | (141,767 | ) | $ | (65,952 | ) | ||||||
Global Opportunities | 275,413 | 42,149 | (4,275 | ) | 37,874 | |||||||||||
Global Value | 201,953 | 28,364 | (1,190 | ) | 27,174 | |||||||||||
International | 7,964,855 | 1,772,135 | (157,639 | ) | 1,614,496 | |||||||||||
International Value | 5,780,732 | 1,048,774 | (153,297 | ) | 895,477 | |||||||||||
Mid Cap | 4,642,133 | 2,178,955 | (84,856 | ) | 2,094,099 | |||||||||||
Mid Cap Value | 7,217,274 | 1,063,810 | (258,163 | ) | 805,647 | |||||||||||
Small Cap | 592,334 | 143,246 | (12,327 | ) | 130,919 | |||||||||||
Small Cap Value | 2,574,954 | 351,325 | (264,265 | ) | 87,060 | |||||||||||
Value | 767,535 | 81,872 | (11,391 | ) | 70,481 |
The difference between cost of investments for financial reporting and cost of investments for Federal income tax purposes was due primarily to timing differences in recognizing certain gains and losses on security transactions (e.g., wash sale loss deferrals and passive foreign investment company transactions).
The tax characterization of ordinary income dividends and long-term capital gain distributions paid during the year ended September 30, 2012 and the year ended September 30, 2011 were as follows (in thousands):
Year Ended 9/30/12 | Year Ended 9/30/11 | |||||||||||||||
Fund | Ordinary Income Dividends | Long-Term Capital Gain Distributions | Ordinary Income Dividends | Long-Term Capital Gain Distributions | ||||||||||||
Emerging Markets | $ | 5,791 | $ | 1,871 | $ | 5,180 | $ | - | ||||||||
Global Opportunities | - | 1,611 | 224 | 810 | ||||||||||||
Global Value | - | 1,393 | 313 | - | ||||||||||||
International | 120,942 | - | 87,763 | - | ||||||||||||
International Value | 3,150 | 12,240 | 51,946 | - | ||||||||||||
Mid Cap Value | 165,166 | 377,653 | 80,288 | 66,416 | ||||||||||||
Small Cap Value | 52,068 | 187,263 | 2,837 | - | ||||||||||||
Value | 4,597 | - | 2,455 | - |
Ordinary income dividends and long-term capital gain distributions were determined in accordance with income tax regulations that impose treatment that is different from the
90
NOTES TO FINANCIAL STATEMENTS
treatment that would result from the application of United States generally accepted accounting principles for such items as net short-term gains, wash sale loss deferrals, passive foreign investment company transactions, foreign currency transactions, net investment losses and qualified late year ordinary losses. Gains on redemptions-in-kind for Global Opportunities Fund, International Fund and Mid Cap Value Fund of $22,886,000, $57,875,000 and $53,573,000, respectively, were included in net realized gain (loss) on investments in the Statements of Operations for the year ended September 30, 2012, and were not recognized for Federal income tax purposes. These net realized gains represent permanent book/tax differences and were reclassified to Fund Shares Issued and Outstanding.
In order to meet certain excise tax distribution requirements, the Funds are required to measure and distribute annually, net capital gains realized during a twelve-month period ending October 31 and net investment income earned during a twelve-month period ending December 31. In connection with these requirements, the Funds are permitted for tax purposes to defer into their next fiscal year qualified late year losses. Qualified late year capital losses are any net capital losses incurred between November 1 and the end of the Funds’ fiscal year, September 30, 2012. Qualified late year ordinary losses are specified losses generally incurred between January 1 and the end of the Funds’ fiscal year, September 30, 2012.
Additional tax information as of and for the year ended September 30, 2012 follows (in thousands):
Undistributed Ordinary Income | Undistributed Long-Term Gain | Qualified Late | Late Year Ordinary Losses | Other Deferred Gains (Losses)(1) | ||||||||||||||||
Emerging Markets | 10,966 | - | 55,920 | - | (1,078 | ) | ||||||||||||||
Global Opportunities | - | - | 5,073 | 562 | (74 | ) | ||||||||||||||
Global Value | 1,185 | 189 | - | - | (13 | ) | ||||||||||||||
International | 120,631 | - | 134,451 | - | (610 | ) | ||||||||||||||
International Value | 58,967 | 30,642 | - | - | (63 | ) | ||||||||||||||
Mid Cap | - | 207,582 | - | 37,201 | - | |||||||||||||||
Mid Cap Value | 77,258 | 314,481 | - | - | - | |||||||||||||||
Small Cap | - | - | - | 3,241 | (30 | ) | ||||||||||||||
Small Cap Value | 28,229 | 38,067 | - | - | (13 | ) | ||||||||||||||
Value | 3,244 | - | - | - | (3 | ) |
(1) | Other deferred gains and losses relate to (a) gains or losses on transactions that occurred subsequent to year end that affected the distributable earnings at September 30, 2012 such as wash sales, (b) unrealized gains and losses on open foreign currency contracts and (c) other items. |
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, each Fund is permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years must be
91
NOTES TO FINANCIAL STATEMENTS
utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term, as permitted under previous law. Thus, such losses must be used first to offset gains of the same character; for example, long-term carryforward losses will first offset long-term gains, before they can be used to offset short-term gains.
As of September 30, 2012, the Funds had capital loss carryovers as follows (in thousands):
Expiration Dates | ||||||||
2018 | Unlimited - ST | |||||||
Emerging Markets | $ | - | $ | 497 | ||||
International | 1,603,991 | - | ||||||
Small Cap | 116,580 | - | ||||||
Value | 27,218 | - |
To the extent the Funds realize future net capital gains, those gains will be offset by any unused capital loss carryover.
92
NOTES TO FINANCIAL STATEMENTS
(8) | Fund share activities: |
Capital share transactions for the Funds were as follows (dollar values in thousands):
EMERGING MARKETS | GLOBAL OPPORTUNITIES | GLOBAL VALUE | INTERNATIONAL | |||||||||||||||||||||||||||||
Year or period | Institutional Shares | Advisor Shares | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares(1) | Investor Shares | Institutional Shares | ||||||||||||||||||||||||
Proceeds from shares issued | $ | 204,774 | $ | 99,599 | $ | 90,608 | $ | 151,140 | $ | 160,470 | $ | 36,100 | $ | 1,536,392 | $ | 517,584 | ||||||||||||||||
Net asset value of shares transferred | - | - | - | - | (12,120 | ) | 12,120 | (231,344 | ) | 231,344 | ||||||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 4,973 | 2,064 | 1,207 | 356 | 1,360 | - | 74,375 | 31,736 | ||||||||||||||||||||||||
Cost of shares redeemed(2) | (115,493 | ) | (161,647 | ) | (48,137 | ) | (89,911 | ) | (24,163 | ) | - | (1,918,403 | ) | (567,239 | ) | |||||||||||||||||
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| |||||||||||||||||
Net increase (decrease) from fund share transactions | $ | 94,254 | $ | (59,984 | ) | $ | 43,678 | $ | 61,585 | $ | 125,547 | $ | 48,220 | $ | (538,980 | ) | $ | 213,425 | ||||||||||||||
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|
| |||||||||||||||||
Shares sold | 16,979,081 | 8,026,342 | 6,799,049 | 11,563,211 | 14,877,779 | 3,123,045 | 70,913,145 | 24,010,141 | ||||||||||||||||||||||||
Shares transferred | - | - | - | - | (1,095,110 | ) | 1,095,110 | (10,618,754 | ) | 10,618,754 | ||||||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 440,061 | 182,171 | 110,071 | 32,475 | 138,584 | - | 3,910,352 | 1,660,721 | ||||||||||||||||||||||||
Shares redeemed | (9,579,084 | ) | (13,166,849 | ) | (4,020,707 | ) | (6,895,398 | ) | (2,261,464 | ) | - | (89,799,988 | ) | (26,803,261 | ) | |||||||||||||||||
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| |||||||||||||||||
Net increase (decrease) in capital shares | 7,840,058 | (4,958,336 | ) | 2,888,413 | 4,700,288 | 11,659,789 | 4,218,155 | (25,595,245 | ) | 9,486,355 | ||||||||||||||||||||||
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| |||||||||||||||||
EMERGING MARKETS | GLOBAL OPPORTUNITIES | GLOBAL VALUE | INTERNATIONAL | |||||||||||||||||||||||||||||
Year or period | Institutional Shares | Advisor Shares | Investor Shares | Institutional Shares(3) | Investor Shares | Investor Shares | Institutional Shares | |||||||||||||||||||||||||
Proceeds from shares issued | $ | 208,436 | $ | 302,182 | $ | 116,536 | $ | 1,599 | $ | 42,770 | $ | 1,303,630 | $ | 200,095 | ||||||||||||||||||
Net asset value of shares transferred | - | - | (14,153 | ) | 14,153 | - | - | - | ||||||||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 3,270 | 1,764 | 1,027 | - | 308 | 54,788 | 25,401 | |||||||||||||||||||||||||
Cost of shares redeemed(2) | (18,510 | ) | (104,406 | ) | (21,486 | ) | - | (8,634 | ) | (2,190,720 | ) | (366,860 | ) | |||||||||||||||||||
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| |||||||||||||||||||
Net increase (decrease) from fund share transactions | $ | 193,196 | $ | 199,540 | $ | 81,924 | $ | 15,752 | $ | 34,444 | $ | (832,302 | ) | $ | (141,364 | ) | ||||||||||||||||
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| |||||||||||||||||||
Shares sold | 13,451,736 | 19,672,672 | 9,228,735 | 133,801 | 4,188,478 | 60,685,817 | 9,123,456 | |||||||||||||||||||||||||
Shares transferred | - | - | (1,057,788 | ) | 1,057,788 | - | - | - | ||||||||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 208,694 | 112,253 | 85,008 | - | 30,390 | 2,556,612 | 1,178,671 | |||||||||||||||||||||||||
Shares redeemed | (1,368,082 | ) | (7,374,302 | ) | (1,746,821 | ) | - | (851,645 | ) | (100,130,658 | ) | (16,394,727 | ) | |||||||||||||||||||
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| |||||||||||||||||||
Net increase (decrease) in capital shares | 12,292,348 | 12,410,623 | 6,509,134 | 1,191,589 | 3,367,223 | (36,888,229 | ) | (6,092,600 | ) | |||||||||||||||||||||||
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|
(1) | For the period from commencement of operations July 17, 2012 through September 30, 2012. |
(2) | Net of redemption fees of: |
Fund | 9/30/2012 | 9/30/2011 | ||||||
Emerging Markets - Institutional Shares | $ | 25 | $ | 29 | ||||
Emerging Markets - Advisor Shares | 17 | 26 | ||||||
Global Opportunities - Investor Shares | 28 | 4 | ||||||
Global Opportunities - Institutional Shares | 10 | - | ||||||
Global Value - Investor Shares | 57 | 16 | ||||||
Global Value - Institutional Shares | - | (a) | - | |||||
International - Inventor Shares | 365 | 460 | ||||||
International - Institutional Shares | 133 | 157 | ||||||
(a) Amount rounds less than $1. |
(3) | For the period from commencement of operations July 26, 2011 through September 30, 2011. |
93
NOTES TO FINANCIAL STATEMENTS
INTERNATIONAL VALUE | MID CAP | MID CAP VALUE | ||||||||||||||||||||||
Year or period ended September 30, 2012 | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares(1) | ||||||||||||||||||
Proceeds from shares issued | $ | 1,825,446 | $ | 300,203 | $ | 1,134,545 | $ | 913,389 | $ | 2,256,209 | $ | 117,734 | ||||||||||||
Net asset value of shares transferred | (46,004 | ) | 46,004 | (174,556 | ) | 174,556 | (176,084 | ) | 176,084 | |||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 8,766 | 4,096 | - | - | 510,446 | - | ||||||||||||||||||
Cost of shares redeemed(2) | (742,078 | ) | (92,384 | ) | (1,419,234 | ) | (163,767 | ) | (1,817,057 | ) | (25,019 | ) | ||||||||||||
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| |||||||||||||
Net increase (decrease) from fund share transactions | $ | 1,046,130 | $ | 257,919 | $ | (459,245 | ) | $ | 924,178 | $ | 773,514 | $ | 268,799 | |||||||||||
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| |||||||||||||
Shares sold | 68,937,456 | 11,249,703 | 30,911,938 | 23,673,124 | 108,982,585 | 5,633,636 | ||||||||||||||||||
Shares transferred | (1,713,146 | ) | 1,713,146 | (4,530,994 | ) | 4,530,994 | (8,625,472 | ) | 8,625,472 | |||||||||||||||
Shares issued in reinvestment of dividends and distributions | 361,475 | 168,689 | - | - | 26,809,143 | - | ||||||||||||||||||
Shares redeemed | (28,550,016 | ) | (3,476,236 | ) | (39,072,083 | ) | (4,238,239 | ) | (88,350,116 | ) | (1,223,102 | ) | ||||||||||||
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| |||||||||||||
Net increase (decrease) in capital shares | 39,035,769 | 9,655,302 | (12,691,139 | ) | 23,965,879 | 38,816,140 | 13,036,006 | |||||||||||||||||
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INTERNATIONAL VALUE | MID CAP | MID CAP VALUE | ||||||||||||||||||||||
Year ended September 30, 2011 | Investor Shares | Institutional Shares | Investor Shares | Institutional Shares | Investor Shares | |||||||||||||||||||
Proceeds from shares issued | $ | 1,396,183 | $ | 547,792 | $ | 1,160,346 | $ | 66,013 | $ | 1,807,081 | ||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 32,185 | 11,352 | - | - | 137,560 | |||||||||||||||||||
Cost of shares redeemed(2) | (617,777 | ) | (71,466 | ) | (1,278,871 | ) | (90,606 | ) | (1,436,373 | ) | ||||||||||||||
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Net increase (decrease) from fund share transactions | $ | 810,591 | $ | 487,678 | $ | (118,525 | ) | $ | (24,593 | ) | $ | 508,268 | ||||||||||||
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Shares sold | 51,358,305 | 20,384,767 | 33,974,631 | 1,869,251 | 86,270,818 | |||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 1,197,336 | 422,463 | - | - | 6,905,600 | |||||||||||||||||||
Shares redeemed | (23,292,083 | ) | (2,603,912 | ) | (37,508,365 | ) | (2,521,038 | ) | (69,234,568 | ) | ||||||||||||||
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Net increase (decrease) in capital shares | 29,263,558 | 18,203,318 | (3,533,734 | ) | (651,787 | ) | 23,941,850 | |||||||||||||||||
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(1) | For the period from commencement of operations February 1, 2012 through September 30, 2012. |
(2) | Net of redemption fees of: |
Fund | 9/30/2012 | 9/30/2011 | ||||||
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International Value - Investor Shares | $ | 168 | $ | 279 | ||||
International Value - Institutional shares | 55 | 84 |
94
NOTES TO FINANCIAL STATEMENTS
SMALL CAP | SMALL CAP VALUE | VALUE | ||||||||||||||||||||||
Year or period ended September 30, 2012 | Investor Shares | Institutional Shares(1) | Investor Shares | Institutional Shares(2) | Investor Shares | Institutional Shares | ||||||||||||||||||
Proceeds from shares issued | $ | 518,831 | $ | 41,497 | $ | 477,485 | $ | 21,930 | $ | 381,736 | $ | 67,740 | ||||||||||||
Net asset value of shares transferred | (7,672 | ) | 7,672 | (316,629 | ) | 316,629 | (28,493 | ) | 28,493 | |||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | - | - | 232,282 | - | 3,598 | 682 | ||||||||||||||||||
Cost of shares redeemed | (275,282 | ) | (624 | ) | (839,074 | ) | (24,779 | ) | (198,942 | ) | (11,067 | ) | ||||||||||||
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Net increase (decrease) from fund share transactions | $ | 235,877 | $ | 48,545 | $ | (445,936 | ) | $ | 313,780 | $ | 157,899 | $ | 85,848 | |||||||||||
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Shares sold | 26,347,093 | 2,461,029 | 30,580,060 | 1,430,115 | 36,033,224 | 6,432,287 | ||||||||||||||||||
Shares transferred | (20,221,662 | ) | 20,221,662 | (2,578,646 | ) | 2,578,646 | ||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | - | - | 16,041,566 | - | 369,799 | 70,062 | ||||||||||||||||||
Shares redeemed | (14,396,283 | ) | (31,916 | ) | (54,620,123 | ) | (1,581,650 | ) | (18,831,659 | ) | (1,054,396 | ) | ||||||||||||
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Net increase (decrease) in capital shares | 11,950,810 | 2,429,113 | (28,220,159 | ) | 20,070,127 | 14,992,718 | 8,026,599 | |||||||||||||||||
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SMALL CAP | SMALL CAP VALUE | VALUE | ||||||||||||||||||||||
Year or period ended September 30, 2011 | Investor Shares | Investor Shares | Investor Shares | Institutional Shares(3) | ||||||||||||||||||||
Proceeds from shares issued | $ | 161,710 | $ | 661,190 | $ | 273,248 | $ | 36,577 | ||||||||||||||||
Net asset value of shares transferred | - | - | (21,242 | ) | 21,242 | |||||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | - | 2,731 | 2,273 | - | ||||||||||||||||||||
Cost of shares redeemed | (188,566 | ) | (640,783 | ) | (106,948 | ) | - | |||||||||||||||||
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Net increase (decrease) from fund share transactions | $ | (26,856 | ) | $ | 23,138 | $ | 147,331 | $ | 57,819 | |||||||||||||||
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Shares sold | 9,258,288 | 39,082,613 | 27,593,098 | 3,866,137 | ||||||||||||||||||||
Shares transferred | - | - | (2,004,008 | ) | 2,004,008 | |||||||||||||||||||
Shares issued in reinvestment of dividends and distributions | - | 162,466 | 241,039 | - | ||||||||||||||||||||
Shares redeemed | (11,269,301 | ) | (37,996,832 | ) | (10,864,145 | ) | - | |||||||||||||||||
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Net increase (decrease) in capital shares | (2,011,013 | ) | 1,248,247 | 14,965,984 | 5,870,145 | |||||||||||||||||||
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(1) | For the period from commencement of operations May 7, 2012 through September 30, 2012. |
(2) | For the period from commencement of operations February 1, 2012 through September 30, 2012. |
(3) | For the period from commencement of operations July 26, 2011 through September 30, 2011. |
(9) | Subsequent Events: |
The Funds have evaluated subsequent events through the date of issuance of the Funds’ financial statements and have determined there is no impact to the Funds’ financial statements.
95
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of Artisan Partners Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Artisan Emerging Markets Fund, Artisan Global Opportunities Fund (formerly Artisan Growth Opportunities Fund), Artisan Global Value Fund, Artisan International Fund, Artisan International Value Fund, Artisan Mid Cap Fund, Artisan Mid Cap Value Fund, Artisan Small Cap Fund, Artisan Small Cap Value Fund, and Artisan Value Fund (ten of the twelve portfolios constituting Artisan Partners Funds, Inc.) (the “Funds”) as of September 30, 2012, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2012, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Artisan Emerging Markets Fund, Artisan Global Opportunities Fund, Artisan Global Value Fund, Artisan International Fund, Artisan International Value Fund, Artisan Mid Cap Fund, Artisan Mid Cap Value Fund, Artisan Small Cap Fund, Artisan Small Cap Value Fund, and Artisan Value Fund of Artisan Partners Funds, Inc. at September 30, 2012, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles
Chicago, Illinois
November 21, 2012
96
NOTES TO FINANCIAL STATEMENTS
Other Federal tax information (unaudited):
The Internal Revenue Code requires that shareholders be notified within 60 days of the Funds’ fiscal year-end of certain information regarding long-term capital gains, qualified dividend income and the dividends received deduction for corporate shareholders. This data is informational only. Every year in January, shareholders are sent a Form 1099-DIV which provides the federal tax status of dividends and distributions received during the calendar year. Shareholders are advised to consult their own tax advisor with respect to the specific tax consequences of investment in the Funds.
Each Fund hereby designates the following amounts as (i) long-term capital gain distributions for purposes of the dividends paid deduction (including earnings and profits distributed to shareholders on redemption of Fund shares, in thousands), (ii) the amount of ordinary dividends paid during the fiscal year ended September 30, 2012 that are considered qualified dividend income as defined in the Jobs and Growth Tax Relief Reconciliation Act of 2003, and (iii) the amount of ordinary dividends paid during the fiscal year ended September 30, 2012 that are eligible for the dividends received deduction available to certain corporate shareholders.
Fund | Long-Term Capital Gains | Qualified Dividend Income | Dividends Received Deduction | |||||||||
Emerging Markets | $ | 1,871 | 99.53 | % | - | % | ||||||
Global Opportunities | 1,611 | - | - | |||||||||
Global Value | 1,453 | - | - | |||||||||
International | - | 100.00 | - | |||||||||
International Value | 12,240 | 100.00 | - | |||||||||
Mid Cap | - | - | - | |||||||||
Mid Cap Value | 404,092 | 68.71 | 66.19 | |||||||||
Small Cap | - | - | - | |||||||||
Small Cap Value | 193,096 | 58.02 | 54.54 | |||||||||
Value | - | 100.00 | 100.00 |
97
SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED)
As a shareholder of Artisan Funds, you may incur transaction costs, including redemption fees, and you will incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2012 to September 30, 2012.
Actual Expenses
The first line under the name of each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the name of your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line under each Fund’s name in the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio for the six months ended September 30, 2012 and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 4/1/2012 | Ending Account Value | Expenses Paid During 4/1/2012-9/30/2012 | ||||||||||
Artisan Emerging Markets - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 960.80 | $ | 5.69 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.20 | $ | 5.86 | ||||||
Artisan Global Opportunities Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,041.50 | $ | 5.51 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.60 | $ | 5.45 | ||||||
Artisan Global Value Fund - Institutional Shares(1) | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,077.20 | $ | 3.23 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,007.27 | $ | 3.13 |
98
SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED)
Beginning Account Value 4/1/2012 | Ending Account Value | Expenses Paid During 4/1/2012-9/30/2012 | ||||||||||
Artisan International Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,029.10 | $ | 4.97 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.10 | $ | 4.95 | ||||||
Artisan International Value Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,029.70 | $ | 4.97 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.10 | $ | 4.95 | ||||||
Artisan Mid Cap Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 976.50 | $ | 4.79 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.15 | $ | 4.90 | ||||||
Artisan Mid Cap Value Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 981.00 | $ | 5.00 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.95 | $ | 5.10 | ||||||
Artisan Small Cap Fund - Institutional Shares(2) | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,064.70 | $ | 5.89 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,014.38 | $ | 5.74 | ||||||
Artisan Small Cap Value Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 929.90 | $ | 4.82 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.00 | $ | 5.05 | ||||||
Artisan Value Fund - Institutional Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,017.00 | $ | 3.98 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.05 | $ | 3.99 |
(1) | For the period from commencement of operations July 17, 2012 through September 30, 2012. |
(2) | For the period from commencement of operations May 7, 2012 through September 30, 2012. |
Fund | Annualized Ratio of Expenses to Average Net Assets for the Six-Month Period Ended September 30, 2012 | |||
Emerging Markets - Institutional Shares | 1.16 | % | ||
Artisan Global Opportunities Fund - Institutional Shares | 1.08 | % | ||
Artisan Global Value Fund - Institutional Shares(1)(2) | 1.50 | % | ||
Artisan International Fund - Institutional Shares | 0.98 | % | ||
Artisan International Value Fund - Institutional Shares | 0.98 | % | ||
Artisan Mid Cap Fund - Institutional Shares | 0.97 | % | ||
Artisan Mid Cap Value Fund - Institutional Shares | 1.01 | % | ||
Artisan Small Cap Fund - Institutional Shares(3) | 1.42 | % | ||
Artisan Small Cap Value Fund - Institutional Shares | 1.00 | % | ||
Artisan Value Fund - Institutional Shares | 0.79 | % | ||
(1) The annualized ratio of expenses to average net assets excludes expenses waived or paid by the Adviser. |
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(2) For the period from commencement of operations July 17, 2012 through September 30, 2012. |
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(3) For the period from commencement of operations May 7, 2012 through September 30, 2012. |
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99
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
The discussions of each Fund included in this report include statistical information about the portfolios of each of the Funds. Except as otherwise noted, that information is as of September 30, 2012. That information will vary with changes in a Fund’s portfolio investments. The performance information for each Fund relative to its benchmark index discussed in this report was prepared by the Adviser using information reported by FactSet Research Systems, Inc. (“FactSet”). For the purposes of assigning portfolio securities to a particular country in this report, the Adviser considers an issuer to be from a particular country as designated by its securities information vendors. However, the Adviser in its own judgment may consider an issuer to be from a country other than the country designated by the securities information vendors. The Adviser currently uses MSCI Inc. as its primary source and FactSet as a secondary source for this information. The primary information vendor’s criteria include the identity of the jurisdiction of the issuer’s incorporation, the main equity trading market for the issuer’s securities, the geographical distribution of the issuer’s operations and the location of the issuer’s headquarters. The Adviser may also consider other criteria such as the source of a company’s revenues. Over time, country designations may change.
For the purposes of assigning portfolio securities to a particular sector and industry, the Adviser assigns securities in accordance with the sector and industry classifications of the Global Industry Classification Standard (GICS®) developed by MSCI Inc. and Standard & Poor’s (to the extent available) as a primary source and FactSet (to the extent available) as a secondary source for this information. In the event the Adviser’s securities information vendors do not classify a security to a particular sector or industry, or if the published classification appears to be erroneous, the Adviser classifies the security according to its own judgment, using other securities information vendors, the company description and other publicly available information about the company’s peer group. Sector and industry classifications may change over time.
The names of portfolio securities reflected in this report are as reported by the Funds’ data providers, may not represent the legal name of the entity and, in some cases, are translations of non-English names.
Descriptions of Indices
Each Fund’s performance is compared in this report to changes in one or more indices, including in all cases a broad-based index of changes in prices of securities in the markets in which the Fund invests. All of the indices are unmanaged and their returns include reinvested dividends. Unlike the Funds’ returns, the returns of each index do not include the payment of sales commissions or other expenses that would be incurred in the purchase or sale of the securities included in that index. An investment cannot be made directly in an index. Fair value pricing is not employed by market indices.
The indices to which the Funds are compared are:
Artisan Emerging Markets Fund – Morgan Stanley Capital International Emerging Markets IndexSM is a market-weighted index of companies in emerging markets.
Artisan Global Opportunities and Artisan Global Value Funds – Morgan Stanley Capital International All Country World IndexSM (MSCI ACWISM) is a market-weighted index of global developed and emerging markets.
100
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
Artisan International and Artisan International Value Funds – Morgan Stanley Capital International EAFE® Index (MSCI EAFE®) is a market-weighted index of companies in developed markets, excluding the U.S. and Canada. MSCI EAFE®’s average annual return since inception of the International Fund is based upon a starting date of December 31, 1995.
Artisan International Fund – Morgan Stanley Capital International EAFE® Growth Index (MSCI EAFE® Growth) is a market-weighted index of companies in developed markets, excluding the U.S. and Canada, that exhibits growth investment style characteristics according to MSCI’s methodology. MSCI EAFE® Growth’s average annual return since inception of the International Fund is based upon a starting date of December 31, 1995.
Artisan International Value Fund – Morgan Stanley Capital International EAFE® Value Index (MSCI EAFE® Value) is a market-weighted index of companies in developed markets, excluding the U.S. and Canada, that exhibits value investment style characteristics according to MSCI’s methodology.
Artisan Mid Cap and Artisan Mid Cap Value Funds – Russell Midcap® Index is a market-weighted index of about 800 medium-sized U.S. companies.
Artisan Mid Cap Fund – Russell Midcap® Growth Index is a market-weighted index of those medium-sized companies included in the Russell Midcap® Index with higher price-to-book and higher forecasted growth values.
Artisan Mid Cap Value Fund – Russell Midcap® Value Index is a market-weighted index of those medium-sized companies included in the Russell Midcap® Index with lower price-to-book ratios and lower forecasted growth values.
Artisan Small Cap and Artisan Small Cap Value Funds – Russell 2000® Index is a market-weighted index of about 2,000 small U.S. companies.
Artisan Small Cap Fund – Russell 2000® Growth Index is a market-weighted index of those small companies included in the Russell 2000® Index with higher price-to-book ratios and higher forecasted growth values.
Artisan Small Cap Value Fund – Russell 2000® Value Index is a market-weighted index of those small companies included in the Russell 2000® Index with lower price-to-book ratios and lower forecasted growth values.
Artisan Value Fund – Russell 1000® Index is a market-weighted index of about 1,000 large U.S. companies.
Artisan Value Fund – Russell 1000® Value Index is a market-weighted index of those large companies included in the Russell 1000® Index with lower price-to-book ratios and lower forecasted growth values.
Trademarks
Trademarks and copyrights relating to the indices and products of portfolio companies mentioned in this report, if any, are owned by their respective owners. Except as otherwise indicated, the trademarks, including names, logos, slogans and service marks appearing in this report are the property of the Adviser and may not be copied, reproduced, published or in any way used without written permission.
101
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by the Adviser. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
The MSCI information may only be used by the reader, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. None of the MSCI information is intended to constitute investment advice of a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the reader of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall MSCI Parties have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.
Russell Investment Group is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a presentation of Artisan Funds. Russell Investment Group is not responsible for the formatting or configuration of this material or for any inaccuracy in Artisan Funds’ presentation thereof.
PROXY VOTING POLICIES AND PROCEDURES
You may obtain a description of Artisan Funds’ proxy voting policies and procedures, without charge, upon request by calling 800.399.1770. That information also is included in Artisan Funds’ statement of additional information, which is available without charge, upon request, by calling 800.399.1770 and on the Securities and Exchange Commission’s website at www.sec.gov.
Information relating to how each Artisan Fund voted proxies relating to portfolio securities held during the twelve-month period ended June 30 is available without charge, on Artisan Funds’ website at www.artisanfunds.com and on the Securities and Exchange Commission’s website at www.sec.gov.
102
INFORMATION ABOUT PORTFOLIO SECURITIES
Artisan Funds files a complete schedule of portfolio holdings with the Securities and Exchange Commission for the quarters ending December 31 and June 30 (the first and third quarters of the Funds’ fiscal year) on Form N-Q. The Funds’ Forms N-Q are available on the Securities and Exchange Commission’s website at www.sec.gov. You also may review and copy those documents by visiting the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 800.SEC.0330.
103
The board of directors has overall responsibility for the conduct of the affairs of Artisan Funds. Each director serves an indefinite term of unlimited duration until the next annual meeting of shareholders and until the election and qualification of his or her successor or until he or she retires, resigns or is removed from office. Artisan Funds’ bylaws further provide that each director must retire by the end of the calendar year in which he or she attains the age of 72. The board of directors may fill any vacancy on the board provided that after such appointment at least two-thirds of the directors have been elected by the shareholders. The shareholders may remove a director by a vote of a majority of the outstanding shares of the Funds at any meeting of shareholders called for the purpose of removing such director.
The board of directors elects the officers of Artisan Funds. Each officer serves until the election and qualification of his or her successor, or until he or she sooner dies, resigns, or is removed or disqualified. The board of directors may remove any officer with or without cause at any time.
The names and ages of the directors and officers as of November 16, 2012, the position each holds with the Funds, the date each was first elected to office, their principal business occupations and other directorships they have held during at least the last five years are shown below.1 Each director oversees all twelve series of Artisan Funds.
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Directors who are not “interested persons” of Artisan Funds: | ||||||||
David A. Erne – 69 | Director and Independent Chair of the Board of Directors | Director since 3/27/95; Independent Chair since 2/4/05 | Of counsel to the law firm Reinhart Boerner Van Deuren s.c., Milwaukee, WI. | Trustee, Northwestern Mutual Life Insurance Company (individual life insurance, disability insurance and annuity company). | ||||
Gail L. Hanson – 56 | Director | 1/1/12 | Chief Financial Officer, Aurora Health Care (not for profit health care provider); from September 2004 to February 2011, Deputy Executive Director, State of Wisconsin Investment Board. | Director, Northwestern Mutual Series Fund, Inc. (individual life insurance and investment company) (28 portfolios). | ||||
Thomas R. Hefty – 65 | Director | 3/27/95 | Retired; from January 2007 to February 2008, President, Kern Family Foundation (private, grant-making organization); until December 2006, of counsel to the law firm Reinhart Boerner Van Deuren s.c., Milwaukee, WI; until December 2006, Adjunct Professor, Department of Business and Economics, Ripon College; until December 2002, Chairman of the Board and Chief Executive Officer of Cobalt Corporation (provider of managed care and specialty business services). | None. |
104
DIRECTORS AND OFFICERS
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Patrick S. Pittard – 66 | Director | 8/9/01 | Chairman and Chief Executive Officer, ACT Bridge, Inc. (enterprise talent management firm); Distinguished Executive in Residence (teaching position), University of Georgia; until October 2001, Chairman of the Board, President and Chief Executive Officer of Heidrick & Struggles International, Inc. (executive search firm). | Director, Lincoln National Corporation (insurance and investment management company); former Director, Cbeyond, Inc. (telecommunications company, formerly Cbeyond Communications, Inc.). | ||||
R. Scott Trumbull – 63 | None | 11/13/12 | Chairman and Chief Executive Officer, Franklin Electric Co., Inc. (manufacturer of water and fuel pumping systems). | Director, Health Care REIT (investor in health care real estate). | ||||
Director who is an “interested person” of Artisan Funds: | ||||||||
Andrew A. Ziegler – 55* | Director | 1/5/95 | Managing Director of Artisan Partners; until February 2010, President and Chief Executive Officer of Artisan Funds. | None. | ||||
Officers: | ||||||||
Eric R. Colson – 42 | President and Chief Executive Officer | 2/9/10 | Managing Director and Chief Executive Officer of Artisan Partners since January 2010; prior thereto, Managing Director and Chief Operating Officer – Investment Operations of Artisan Partners. | None. | ||||
Brooke J. Billick – 58 | Chief Compliance Officer | 8/19/04 | Chief Compliance Officer – U.S. Mutual Funds and Associate Counsel of Artisan Partners; until January 2012, Chief Compliance Officer of Artisan Partners and Artisan Partners Distributors LLC. | None. | ||||
Gregory K. Ramirez – 42 | Chief Financial Officer and Treasurer | 2/8/11 | Managing Director and Chief Accounting Officer (since March 2010) of Artisan Partners; Vice President, Treasurer and Chief Financial Officer of Artisan Partners Distributors LLC; until July 2012, Assistant Treasurer of Artisan Partners Distributors LLC; until February 2011, Assistant Secretary and Assistant Treasurer of Artisan Funds. | None. |
105
DIRECTORS AND OFFICERS
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Sarah A. Johnson – 40 | General Counsel, Vice President and Secretary | 2/8/11 | Managing Director (since March 2010), Associate Counsel and Chief Compliance Officer (since January 2012) of Artisan Partners; Vice President and Secretary of Artisan Partners Distributors, LLC; until February 2011, Assistant Secretary of Artisan Funds. | None. | ||||
James S. Hamman, Jr. – 43 | Vice President and Assistant Secretary | 2/8/11 | Associate Counsel of Artisan Partners since March 2010; from January 2008 until February 2010, Principal of Elite Investment Partners, LLC; prior thereto, Executive Vice President, General Counsel and Secretary of Calamos Asset Management, Inc. | None. | ||||
Stephen W. Hlavach – 43 | Assistant Treasurer | 2/14/12 | Tax Director of Artisan Partners since January 2011; prior thereto, Tax Lead, Mergers & Acquisitions of The Boeing Company. | None. | ||||
Shannon K. Jagodinski – 35 | Assistant Treasurer | 2/14/12 | Senior Manager of Investment Accounting of Artisan Partners. | None. |
1 | Howard B. Witt retired as a director of Artisan Funds effective November 13, 2012. |
* | Mr. Ziegler is an “interested person” of Artisan Funds, as defined in the Investment Company Act of 1940, because he is a Managing Director of Artisan Partners and an officer of Artisan Investments GP LLC (the general partner of Artisan Partners). Mr. Ziegler and Carlene M. Ziegler (who are married to each other) control Artisan Partners. |
The business address of the officers and the director affiliated with Artisan Partners is 875 E. Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202. The address of the other directors is c/o Artisan Funds, 875 E. Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202.
Artisan Funds’ statement of additional information (SAI) contains further information about the directors. Please call 800.399.1770 for a free copy of the SAI.
106
ARTISAN FUNDS P.O. BOX 8412 BOSTON, MA 02266-8412
800.399.1770 |
ANNUAL
REPORT
SEPTEMBER 30, 2012
ARTISAN EMERGING MARKETS FUND
ARTISAN FUNDS
ADVISOR SHARES
ARTISAN FUNDS
P.O. BOX 8412
BOSTON, MA 02266-8412
This report and the audited financial statements contained herein are provided for the general information of the shareholders of Artisan Emerging Markets Fund. Before investing, investors should consider carefully the Fund’s investment objective, risks and charges and expenses. For a prospectus, which contains that information and more information about the Fund, please call 866.574.1770 or visit our website at www.artisanfunds.com. Read it carefully before you invest or send money.
Company discussions are for illustration only and are not intended as recommendations of individual stocks. The discussion presents information about the companies believed to be accurate, and the views of the portfolio manager, as of September 30, 2012. That information and those views may change, and the Fund disclaims any obligation to advise shareholders of any such changes. Artisan Emerging Markets Fund also offers an institutional class of shares for institutional investors meeting certain minimum investment requirements. A report on the institutional class is available under separate cover.
Artisan Funds offered through Artisan Partners Distributors LLC, member FINRA.
ARTISAN EMERGING MARKETS FUND (ARTZX)
Artisan Emerging Markets Fund employs a fundamental research process to construct a diversified portfolio of emerging market companies. The team’s investment process focuses on identifying companies that are priced at a discount relative to the team’s estimate of their sustainable earnings.
• | Sustainable Earnings. The team believes that over the long term a stock’s price is directly related to the company’s ability to deliver sustainable earnings. The team determines a company’s sustainable earnings based upon financial and strategic analyses. The financial analysis of a company’s balance sheet, income statement, and statement of cash flows focuses on identifying historical drivers of return on equity. The strategic analysis examines a company’s competitive advantages and financial strength to assess sustainability. |
• | Valuation. The team believes that investment opportunities develop when businesses with sustainable earnings are undervalued relative to peers and historical industry, country and regional valuations. The team values a business and develops a price target based on their assessment of the business’s sustainable earnings and cash flow expectations and the team’s risk analysis. |
• | Risk Analysis. The team believes that a disciplined risk framework allows greater focus on fundamental stock selection. The team incorporates its assessment of company-specific and macroeconomic risks into its valuation analysis to develop a risk-adjusted target price. The risk-rating assessment includes a review of the currency, interest rate, monetary and fiscal policy and political risks to which a company is exposed. |
PERFORMANCE HISTORY
GROWTH OF AN ASSUMED $10,000 INVESTMENT (6/2/2008 to 9/30/2012)
AVERAGE ANNUAL TOTAL RETURNS (as of 9/30/2012)
Fund / Index | 1-Year | 3-Year | Since Inception | |||||||||
Artisan Emerging Markets Fund - Advisor Shares | 13.10 | % | 0.02 | % | -6.14 | % | ||||||
MSCI Emerging Markets IndexSM | 16.93 | 5.63 | -1.80 |
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor’s shares in the Fund, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For current to most recent month-end performance information call 866.574.1770. The graph and table above do not reflect the deduction of taxes that a shareholder would pay on distributions or sale of Fund shares. The performance 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. The Fund’s performance information reflects Artisan Partners Limited Partnership’s (the “Adviser” or “Artisan Partners”) contractual agreement to limit the Fund’s expenses to no more than 1.50%, which has been in effect since the Fund’s inception and has had a material impact on the Fund’s performance, which would have been lower in its absence. See page 26 for a description of the index.
2
INVESTING ENVIRONMENT
Emerging markets, as measured by the MSCI Emerging Markets IndexSM, advanced over the period as Europe’s precarious financial situation and the overall progression of the global economy continued to dictate investor sentiment across developed and emerging markets. Central banks in the U.S. and the eurozone dominated the headlines with attempts to stimulate economic growth through a variety of easing monetary measures. Despite Spain and Italy joining Greece on the frontline of the sovereign debt crisis and slower growth from the BRIC (Brazil, Russia, India and China) economies, emerging markets posted gains in three of the four quarters for the year ended September 30, 2012.
SECTOR DIVERSIFICATION
Sector | 9/30/2011 | 9/30/2012 | ||||||
Consumer Discretionary | 12.0 | % | 12.2 | % | ||||
Consumer Staples | 5.2 | 3.6 | ||||||
Energy | 10.3 | 11.8 | ||||||
Financials | 18.0 | 21.1 | ||||||
Healthcare | 3.4 | 2.2 | ||||||
Industrials | 7.8 | 9.0 | ||||||
Information Technology | 18.3 | 18.1 | ||||||
Materials | 13.4 | 11.0 | ||||||
Telecommunication Services | 7.7 | 6.7 | ||||||
Utilities | 2.0 | 2.6 | ||||||
Other assets less liabilities | 1.9 | 1.7 | ||||||
100.0 | % | 100.0 | % |
PERFORMANCE DISCUSSION
During the twelve-month period ended September 30, 2012, Artisan Emerging Markets Fund returned 13.10%, underperforming the MSCI Emerging Markets IndexSM, which returned 16.93% over the same period.
Performance of the following stocks had a positive impact on the portfolio during the period: Samsung Electronics Co., Ltd., an electronic product manufacturer; Taiwan Semiconductor Manufacturing Company Ltd., an integrated circuit manufacturer; Hon Hai Precision Industry Co., Ltd., an electronic manufacturing service provider; Grupo Financiero Banorte S.A.B. de C.V., a financial institution; and Mr. Price Group Limited, a retail operator.
Notable detractors included: HTC Corporation, a smartphone designer and manufacturer; E Ink Holdings Inc., a thin film liquid crystal display manufacturer; GOME Electrical Appliances Holdings Limited, a household appliance and consumer electronics retailer; Ajisen (China) Holdings Limited, a chain restaurant operator; and Vale SA, a metals and mining company.
REGION ALLOCATION
Region | 9/30/2011 | 9/30/2012 | ||||||
Emerging Asia | 48.1 | % | 51.3 | % | ||||
Latin America | 26.4 | 24.0 | ||||||
Europe, Middle East & Africa | 20.8 | 19.7 | ||||||
Developed Markets | 2.8 | 3.3 |
FUND CHANGES
We identified several new investment opportunities for the portfolio during the period, including Naspers Limited, an electronic and print media holding company; Hyundai Mobis, an automotive parts and equipment manufacturer; ICICI Bank Limited, a retail and commercial bank operator; China Unicom (Hong Kong) Limited, a telecommunications provider; and Sberbank of Russia, a bank specializing in commercial banking services. We funded these purchases in part by selling our positions in MTN Group Limited, Mr. Price Group Limited, Totvs SA, PT Telekomunikasi Indonesia Persero Tbk and Tim Participacoes S.A.
3
Schedule of Investments – September 30, 2012
Dollar values in thousands
Shares Held | Value | |||||||
COMMON AND PREFERRED STOCKS - 98.3% | ||||||||
BRAZIL - 14.7% | ||||||||
Anhanguera Educacional Participacoes SA | 486,700 | $ | 8,091 | |||||
Banco do Brasil S.A.(1)(2) | 107,980 | 1,321 | ||||||
Banco do Brasil S.A. | 470,800 | 5,759 | ||||||
BM&F BOVESPA SA | 1,390,776 | 8,404 | ||||||
BR Properties SA | 426,320 | 5,562 | ||||||
Companhia Energetica de Minas Gerais-CEMIG, Preferred(3) | 632,738 | 7,672 | ||||||
Companhia Vale do Rio Doce | 947,013 | 17,046 | ||||||
Hypermarcas SA(4) | 1,791,538 | 13,159 | ||||||
Julio Simoes Logistica SA | 392,798 | 2,129 | ||||||
Magazine Luiza SA | 740,900 | 4,473 | ||||||
Magnesita Refratarios SA | 942,900 | 3,488 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 2,504,951 | 4,720 | ||||||
Petroleo Brasileiro S.A. | 2,274,489 | 26,142 | ||||||
Randon SA Implementos e Participacoes, Preferred(3) | 1,313,824 | 7,628 | ||||||
|
| |||||||
115,594 | ||||||||
CHILE - 1.3% | ||||||||
Empresa Nacional de Telecomunicaciones S.A. | 239,319 | 4,989 | ||||||
S.A.C.I. Falabella | 502,065 | 5,059 | ||||||
|
| |||||||
10,048 | ||||||||
CHINA - 11.7% | ||||||||
Ajisen (China) Holdings Limited | 6,764,913 | 4,476 | ||||||
Chaoda Modern Agriculture (Holdings) Limited(2)(4)(5) | 12,474,536 | 48 | ||||||
China High Precision Automation Group Ltd.(2)(5) | 9,066,000 | 725 | ||||||
China Life Insurance Co., Limited, H Shares | 2,340,800 | 6,747 | ||||||
China Shenhua Energy Company Limited | 1,240,500 | 4,799 | ||||||
China Unicom (Hong Kong) Limited | 5,127,500 | 8,411 | ||||||
CNOOC Limited | 6,879,000 | 14,088 | ||||||
Digital China Holdings Limited | 4,569,460 | 7,284 | ||||||
GOME Electrical Appliances Holdings Limited(4) | 35,408,881 | 3,745 | ||||||
Huabao International Holdings Limited | 13,530,322 | 7,678 | ||||||
Huaneng Power International, Inc., H Shares | 9,089,523 | 6,916 | ||||||
Mindray Medical International Limited, Class A (DR) | 176,317 | 5,926 | ||||||
Noah Holdings Ltd. (DR) | 435,033 | 1,879 | ||||||
Sinopharm Group Co, H Shares | 2,964,500 | 9,481 | ||||||
Springland International Holdings Ltd. | 6,193,590 | 3,059 | ||||||
CHINA (CONTINUED) | ||||||||
Zhuzhou CSR Times Electric Co., Ltd., | 2,694,515 | $ | 6,922 | |||||
|
| |||||||
92,184 | ||||||||
COLOMBIA - 1.0% | ||||||||
Grupo de Inversiones Suramericana | 349,828 | 5,917 | ||||||
Grupo de Inversiones Suramericana, Preferred(3) | 86,758 | 1,605 | ||||||
|
| |||||||
7,522 | ||||||||
EGYPT - 0.5% | ||||||||
Egyptian Financial Group-Hermes Holding(4)(5) | 1,805,980 | 3,567 | ||||||
HONG KONG - 1.0% | ||||||||
AIA Group Ltd. | 2,091,065 | 7,753 | ||||||
HUNGARY - 1.0% | ||||||||
MOL Hungarian Oil and Gas Nyrt., Class A | 95,748 | 7,927 | ||||||
INDIA - 7.2% | ||||||||
ICICI Bank Limited | 451,882 | 9,098 | ||||||
India Cements Limited | 3,509,809 | 6,298 | ||||||
Infosys Limited | 215,053 | 10,344 | ||||||
Mahindra & Mahindra Ltd. | 499,614 | 8,183 | ||||||
Petronet LNG Ltd. | 451,941 | 1,353 | ||||||
Power Finance Corporation | 2,158,195 | 7,733 | ||||||
Reliance Infrastructure Ltd. | 606,938 | 6,182 | ||||||
Tech Mahindra Ltd. | 244,896 | 4,519 | ||||||
Welspun Corporation Ltd. | 1,637,334 | 3,145 | ||||||
|
| |||||||
56,855 | ||||||||
INDONESIA - 4.2% | ||||||||
Indofood CBP Sukses Makmur TBK PT | 8,411,000 | 5,581 | ||||||
PT Astra International Tbk | 18,549,870 | 14,344 | ||||||
PT Bank Negara Indonesia Tbk | 24,013,018 | 9,849 | ||||||
PT Gudang Garam Tbk | 751,473 | 3,647 | ||||||
|
| |||||||
33,421 | ||||||||
ITALY - 0.8% | ||||||||
Tenaris S.A. (DR) | 162,820 | 6,638 | ||||||
KAZAKHSTAN - 1.0% | ||||||||
KazMunaiGas Exploration Production (DR) | 407,659 | 7,521 | ||||||
KOREA - 13.5% | ||||||||
Daewoo Shipbuilding & Marine Engineering Co., Ltd. | 318,214 | 7,430 | ||||||
E-Mart Co., Ltd. | 28,357 | 6,187 | ||||||
Hyundai Mobis | 33,150 | 9,261 |
4
Shares Held | Value | |||||||
KOREA (CONTINUED) | ||||||||
KB Financial Group, Inc. | 299,442 | $ | 10,696 | |||||
LOCK&LOCK CO., LTD. | 151,814 | 3,258 | ||||||
Samsung Electronics Co., Ltd. | 44,330 | 53,686 | ||||||
Shinhan Financial Group Co., Ltd. | 328,770 | 11,226 | ||||||
Shinsegae Co., Ltd. | 22,118 | 4,179 | ||||||
|
| |||||||
105,923 | ||||||||
MEXICO - 5.7% | ||||||||
America Movil SAB de C.V., Series L | 13,458,223 | 17,147 | ||||||
Grupo Financiero Banorte S.A. de C.V., O Shares | 1,148,844 | 6,493 | ||||||
Grupo Financiero Santander Mexico SAB de CV, Series B (DR)(4) | 358,037 | 4,905 | ||||||
Grupo Televisa S.A., Series CPO | 1,700,199 | 8,018 | ||||||
OHL Mexico SAB de CV(4) | 5,037,080 | 8,128 | ||||||
|
| |||||||
44,691 | ||||||||
PANAMA - 0.8% | ||||||||
Copa Holdings SA, Class A(3) | 74,186 | 6,029 | ||||||
PERU - 0.5% | ||||||||
Cementos Pacasmayo S.A.A. (DR)(4) | 359,298 | 4,089 | ||||||
PHILIPPINES - 0.9% | ||||||||
Philippine Long Distance Telephone Company | 110,000 | 7,341 | ||||||
RUSSIA - 7.4% | ||||||||
Globaltrans Investment PLC (DR) | 454,787 | 9,450 | ||||||
LSR Group O.J.S.C. (DR) | 1,771,168 | 8,236 | ||||||
LUKOIL (DR) | 289,575 | 17,838 | ||||||
Mobile TeleSystems (DR) | 468,213 | 8,203 | ||||||
Polymetal International PLC | 404,286 | 7,083 | ||||||
Sberbank of Russia | 2,596,586 | 7,595 | ||||||
|
| |||||||
58,405 | ||||||||
SOUTH AFRICA - 5.1% | ||||||||
African Bank Investments Limited | 1,793,730 | 7,123 | ||||||
Harmony Gold Mining Company Limited | 846,231 | 7,100 | ||||||
Impala Platinum Holdings Limited | 416,180 | 6,951 | ||||||
Imperial Holdings Limited | 202,232 | 4,556 | ||||||
Mondi Limited | 499,190 | 5,070 | ||||||
Naspers Limited, N Shares | 157,564 | 9,749 | ||||||
|
| |||||||
40,549 | ||||||||
SWEDEN - 0.5% | ||||||||
Alliance Oil Company Ltd. (DR)(4) | 492,362 | 3,890 | ||||||
TAIWAN - 11.1% | ||||||||
Chinatrust Financial Holding Company Ltd. | 12,897,879 | 7,788 | ||||||
E Ink Holdings Inc. | 5,910,000 | 6,452 | ||||||
Far Eastern Textile Ltd. | 5,772,339 | 6,518 | ||||||
Hon Hai Precision Industry Co., Ltd. | 5,965,213 | 18,722 | ||||||
HTC Corporation | 417,251 | 4,042 | ||||||
MediaTek Incorporation | 893,794 | 9,437 | ||||||
Taiwan Fertilizer Co., Ltd. | 2,651,000 | 7,190 | ||||||
TAIWAN (CONTINUED) | ||||||||
Taiwan Semiconductor Manufacturing Company Ltd. | 9,021,647 | $ | 27,637 | |||||
|
| |||||||
87,786 | ||||||||
THAILAND - 2.7% | ||||||||
Advanced Info Service Public Company Limited (DR) | 906,500 | 6,303 | ||||||
Bangkok Bank Public Company Limited (DR) | 1,576,400 | 9,936 | ||||||
Bumrungrad Hospital Public Company Limited (DR) | 707,516 | 1,885 | ||||||
PTT Exploration and Production Public Company Limited (DR) | 538,800 | 2,845 | ||||||
|
| |||||||
20,969 | ||||||||
TURKEY - 4.2% | ||||||||
Arcelik A.S. | 760,519 | 4,045 | ||||||
Emlak Konut Gayrimenkul Yatirim | 5,719,853 | 7,988 | ||||||
Tekfen Holding A.S. | 2,114,262 | 7,670 | ||||||
Turk Ekonomi Bankasi A.S.(4) | 1,752,063 | 1,687 | ||||||
Turk Hava Yollari Anonim Ortakligi (THY)(4) | 2,215,540 | 4,635 | ||||||
Turkiye Sinai Kalkinma Bankasi A.S. | 6,264,761 | 6,972 | ||||||
|
| |||||||
32,997 | ||||||||
UNITED ARAB EMIRATES - 0.5% | ||||||||
Air Arabia(5) | 22,225,071 | 3,951 | ||||||
UNITED KINGDOM - 1.0% | ||||||||
Antofagasta plc | 396,243 | 8,075 | ||||||
|
| |||||||
Total common and preferred stocks | 773,725 | |||||||
Par Amount | ||||||||
CONVERTIBLE DEBENTURES - 0.0% | ||||||||
BRAZIL - 0.0% | ||||||||
PDG Realty SA Empreendimentos e Participacoes - Debenture (0.0%, 9/16/16)(4)(5) | 3,720 | 128 | ||||||
SHORT-TERM INVESTMENTS (CASH EQUIVALENTS) - 1.8% | ||||||||
Repurchase agreement with Fixed Income Clearing Corporation, 0.01%, dated 9/28/12, due 10/1/12, maturity value $14,379 | 14,379 | $ | 14,379 | |||||
|
| |||||||
Total investments - 100.1% | 788,232 | |||||||
Other assets less liabilities - (0.1%) | (976 | ) | ||||||
|
| |||||||
Total net assets - 100.0%(7) | $ | 787,256 | ||||||
|
|
5
(1) | The shares of Banco do Brasil S.A. were acquired in a private placement and are restricted. The shares of Banco do Brasil S.A. are freely tradeable outside the United States, where the Fund expects to trade them. |
Security | Acquisition Dates | Cost | Value | Percentage of Total Net Assets | ||||||||||||
Banco do Brasil S.A. | 7/1/2010 | $ | 1,477 | $ | 1,321 | 0.2 | % |
(2) | Security has been determined to be illiquid under procedures established by the board of directors of Artisan Partners Funds, Inc. (“Artisan Funds”). In total, the value of securities determined to be illiquid was $2,094, or 0.3% of total net assets. |
(3) | Non-voting shares. |
(4) | Non-income producing security. |
(5) | Valued at a fair value in accordance with procedures established by the board of directors of Artisan Funds. In total, securities valued at a fair value were $8,419 or 1.1% of total net assets. |
(6) | Collateralized by: |
Issuer | Rate | Maturity | Value | |||||||||
U.S. Treasury Note | 2.375 | % | 5/31/2018 | $ | 14,668 |
(7) | Percentages for the various classifications relate to total net assets. |
Company names are as reported by a data service provider and in some cases are translations; a company's legal name may be different.
(DR) Depositary Receipt, voting rights may vary.
PORTFOLIO DIVERSIFICATION - September 30, 2012 Dollar values in thousands |
| |||||||
Value | Percentage of Total Net Assets | |||||||
Consumer Discretionary | $ | 95,958 | 12.2 | % | ||||
Consumer Staples | 28,622 | 3.6 | ||||||
Energy | 93,041 | 11.8 | ||||||
Financials | 165,839 | 21.1 | ||||||
Healthcare | 17,292 | 2.2 | ||||||
Industrials | 70,490 | 9.0 | ||||||
Information Technology | 142,848 | 18.1 | ||||||
Materials | 86,471 | 11.0 | ||||||
Telecommunication Services | 52,394 | 6.7 | ||||||
Utilities | 20,770 | 2.6 | ||||||
|
|
|
| |||||
Total common and preferred stocks | 773,725 | 98.3 | ||||||
Convertible debentures (1) | 128 | - | (2) | |||||
Short-term investments | 14,379 | 1.8 | ||||||
|
|
|
| |||||
Total investments | 788,232 | 100.1 | ||||||
Other assets less liabilities | (976 | ) | (0.1 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 787,256 | 100.0 | % | ||||
|
|
|
|
(1) | Sector classification of consumer discretionary. |
(2) | Amount rounds to less than 0.1%. |
CURRENCY EXPOSURE - September 30, 2012 Dollar values in thousands |
| |||||||
Value | Percentage of Total Investments | |||||||
Brazilian real | $ | 115,722 | 14.7 | % | ||||
British pound | 15,158 | 1.9 | ||||||
Chilean peso | 10,048 | 1.3 | ||||||
Colombian peso | 7,522 | 1.0 | ||||||
Egyptian pound | 3,567 | 0.5 | ||||||
Hong Kong dollar | 92,132 | 11.7 | ||||||
Hungarian forint | 7,927 | 1.0 | ||||||
Indian rupee | 56,855 | 7.2 | ||||||
Indonesian rupiah | 33,421 | 4.2 | ||||||
Korean won | 105,923 | 13.4 | ||||||
Mexican peso | 39,786 | 5.1 | ||||||
Philippine peso | 7,341 | 0.9 | ||||||
South African rand | 40,549 | 5.1 | ||||||
Swedish krona | 3,890 | 0.5 | ||||||
Taiwan dollar | 87,786 | 11.1 | ||||||
Thai baht | 20,969 | 2.7 | ||||||
Turkish lira | 32,997 | 4.2 | ||||||
U.S. dollar | 102,688 | 13.0 | ||||||
United Arab Emirates dirham | 3,951 | 0.5 | ||||||
|
|
|
| |||||
Total investments | $ | 788,232 | 100.0 | % | ||||
|
|
|
|
TOP TEN HOLDINGS - September 30, 2012 | ||||||
Company Name | Country | Percentage of Total Net Assets | ||||
Samsung Electronics Co., Ltd. | Korea | 6.8 | % | |||
Taiwan Semiconductor Manufacturing Company Ltd. | Taiwan | 3.5 | ||||
Petroleo Brasileiro S.A. | Brazil | 3.3 | ||||
Hon Hai Precision Industry Co., Ltd. | Taiwan | 2.4 | ||||
LUKOIL | Russia | 2.3 | ||||
America Movil SAB de C.V. | Mexico | 2.2 | ||||
Companhia Vale do Rio Doce | Brazil | 2.2 | ||||
PT Astra International Tbk | Indonesia | 1.8 | ||||
CNOOC Limited | China | 1.8 | ||||
Hypermarcas SA | Brazil | 1.7 | ||||
|
| |||||
Total | 28.0 | % | ||||
|
|
For the purpose of determining the Fund’s top ten holdings, securities of the same issuer are aggregated to determine the weight in the Fund.
The accompanying notes are an integral part of the financial statements.
6
Statement of Assets and Liabilities – September 30, 2012
Dollar values in thousands
EMERGING MARKETS | ||||
ASSETS: | ||||
Investments in securities, unaffiliated, at value | $ | 773,853 | ||
Short-term investments (repurchase agreements), at value | 14,379 | |||
|
| |||
Total investments | 788,232 | |||
Cash | - ( | 1) | ||
Foreign currency | 546 | |||
Net unrealized gain on foreign currency spot contracts | 12 | |||
Receivable from investments sold | 5,007 | |||
Receivable from fund shares sold | 98 | |||
Dividends and interest receivable | 868 | |||
|
| |||
Total assets | 794,763 | |||
LIABILITIES: | ||||
Payable for investments purchased | 5,789 | |||
Payable for fund shares redeemed | 271 | |||
Payable for operating expenses | 349 | |||
Payable for foreign taxes(2) | 1,098 | |||
|
| |||
Total liabilities | 7,507 | |||
|
| |||
Total net assets | $ | 787,256 | ||
|
| |||
NET ASSETS CONSIST OF: | ||||
Fund shares issued and outstanding | $ | 899,737 | ||
Net unrealized depreciation on investments and foreign currency related transactions | (26,417 | ) | ||
Accumulated undistributed net investment income | 6,546 | |||
Accumulated undistributed net realized losses on investments and foreign currency related transactions | (92,610 | ) | ||
|
| |||
$ | 787,256 | |||
|
| |||
SUPPLEMENTARY INFORMATION: | ||||
Net assets | ||||
Institutional Shares | $ | 494,836 | ||
Advisor Shares | $ | 292,420 | ||
Shares outstanding (Indefinite number of shares authorized, $0.01 par value) | ||||
Institutional Shares | 38,795,770 | |||
Advisor Shares | 22,913,019 | |||
Net asset value, offering price and redemption price per share | ||||
Institutional Shares | $ | 12.75 | ||
Advisor Shares | $ | 12.76 | ||
Cost of securities of unaffiliated issuers held | $ | 813,585 | ||
Cost of foreign currency | $ | 545 |
(1) | Amount rounds to less than $1. |
(2) | Including foreign taxes on unrealized gains of $1,066. |
The accompanying notes are an integral part of the financial statements.
7
Statement of Operations – For the Year Ended September 30, 2012
Dollar values in thousands
EMERGING MARKETS | ||||
INVESTMENT INCOME: | ||||
Dividends, from unaffiliated issuers(1) | $ | 18,971 | ||
Interest | 5 | |||
|
| |||
Total investment income | 18,976 | |||
EXPENSES: | ||||
Advisory fees | 8,361 | |||
Transfer agent fees | ||||
Institutional Shares | 21 | |||
Advisor Shares | 912 | |||
Shareholder communications | ||||
Institutional Shares | 15 | |||
Advisor Shares | 57 | |||
Custodian fees | 562 | |||
Accounting fees | 69 | |||
Professional fees | 102 | |||
Registration fees | ||||
Institutional Shares | 49 | |||
Advisor Shares | 31 | |||
Directors’ fees | 25 | |||
Other operating expenses | 26 | |||
|
| |||
Total operating expenses | 10,230 | |||
|
| |||
Net investment income | 8,746 | |||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized loss on: | ||||
Investments(1) | (80,098 | ) | ||
Foreign currency related transactions | (735 | ) | ||
|
| |||
(80,833 | ) | |||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||
Investments(1) | 163,379 | |||
Foreign currency related transactions | 77 | |||
|
| |||
163,456 | ||||
|
| |||
Net gain on investments and foreign currency related transactions | 82,623 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 91,369 | ||
|
|
(1) | Net of foreign taxes | Net of foreign taxes on realized gains | Net of foreign taxes on unrealized gains | |||
$2,070 | $491 | $913 |
The accompanying notes are an integral part of the financial statements.
8
Statement of Changes in Net Assets
Dollar values in thousands
EMERGING MARKETS | ||||||||
Year Ended 9/30/2012 | Year Ended 9/30/2011 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 8,746 | $ | 10,346 | ||||
Net realized gain (loss) on: | ||||||||
Investments | (80,098 | ) | 9,473 | |||||
Foreign currency related transactions | (735 | ) | (2,693 | ) | ||||
Net increase (decrease) in unrealized appreciation or depreciation on: | ||||||||
Investments | 163,379 | (255,535 | ) | |||||
Foreign currency related transactions | 77 | 336 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 91,369 | (238,073 | ) | |||||
DISTRIBUTIONS PAID TO SHAREHOLDERS: | ||||||||
Net investment income: | ||||||||
Institutional Shares | (3,946 | ) | (3,345 | ) | ||||
Advisor Shares | (1,843 | ) | (1,835 | ) | ||||
Net realized gains on investment transactions: | ||||||||
Institutional Shares | (1,096 | ) | - | |||||
Advisor Shares | (777 | ) | - | |||||
|
|
|
| |||||
Total distributions paid to shareholders | (7,662 | ) | (5,180 | ) | ||||
FUND SHARE ACTIVITIES: | ||||||||
Net increase in net assets resulting from fund share activities | 34,270 | 392,736 | ||||||
|
|
|
| |||||
Total increase in net assets | 117,977 | 149,483 | ||||||
|
|
|
| |||||
Net assets, beginning of period | 669,279 | 519,796 | ||||||
|
|
|
| |||||
Net assets, end of period | $ | 787,256 | $ | 669,279 | ||||
|
|
|
| |||||
Accumulated undistributed net investment income | $ | 6,546 | $ | 4,668 | ||||
|
|
|
|
The accompanying notes are an integral part of the financial statements.
9
Financial Highlights – For a share outstanding throughout each period
The financial highlights table is intended to help you understand the Fund’s financial performance for the past 5 years or, if shorter, the period of the Fund’s operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions).
ARTISAN EMERGING MARKETS FUND | ||||||||||||||||||||
Advisor Shares | ||||||||||||||||||||
Year or Period Ended | ||||||||||||||||||||
9/30/2012 | 9/30/2011 | 9/30/2010 | 9/30/2009 | 9/30/2008(1) | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 11.38 | $ | 15.24 | $ | 13.03 | $ | 11.16 | $ | 17.43 | ||||||||||
Net Investment Income(2) | 0.10 | 0.18 | 0.18 | 0.07 | 0.04 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | 1.38 | (3.94 | ) | 2.12 | 1.93 | (6.31 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Income (Loss) from Investment Operations | 1.48 | (3.76 | ) | 2.30 | 2.00 | (6.27 | ) | |||||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||
Dividends from Net Investment Income | (0.07 | ) | (0.10 | ) | (0.09 | ) | (0.12 | ) | - | |||||||||||
Distributions from Net Realized Gains | (0.03 | ) | - | - | (0.01 | ) | - | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributions | (0.10 | ) | (0.10 | ) | (0.09 | ) | (0.13 | ) | - | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value End of Period | $ | 12.76 | $ | 11.38 | $ | 15.24 | $ | 13.03 | $ | 11.16 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return(3) | 13.10 | % | (24.86 | )% | 17.75 | % | 18.64 | % | (35.97 | )% | ||||||||||
Net Assets End of Period (millions) | $ | 292.4 | $ | 317.2 | $ | 235.6 | $ | 50.4 | $ | 3.2 | ||||||||||
Ratio of Expenses to Average Net Assets(4)(5) | 1.48 | % | 1.47 | % | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets(4)(5) | 0.85 | % | 1.19 | % | 1.28 | % | 0.70 | % | 0.93 | % | ||||||||||
Portfolio Turnover Rate(3) | 38.19 | % | 30.86 | % | 25.89 | % | 56.88 | % | 42.24 | % |
(1) | For the period from commencement of operations June 2, 2008 through September 30, 2008. |
(2) | Computed based on average shares outstanding. |
(3) | Periods less than twelve months (where applicable) are not annualized. |
(4) | Periods less than twelve months (where applicable) are annualized. |
(5) | The ratios of expenses to average net assets and net investment income (loss) to average net assets exclude expenses waived or paid by the Adviser or the board of directors. Absent expenses waived or paid by the Adviser or the board of directors, the ratios of expenses to average net assets and net investment income (loss) to average net assets would have been as follows: |
Year or Period Ended | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | ||||||
9/30/2010 | 1.73 | % | 1.04 | % | ||||
9/30/2009 | 3.00 | % | (0.80 | )% | ||||
9/30/2008 | 9.73 | % | (7.30 | )% |
The accompanying notes are an integral part of the financial statements.
10
ARTISAN FUNDS
Notes to Financial Statements – September 30, 2012
(1) | Organization: |
Artisan Partners Funds, Inc. (“Artisan Funds”) was incorporated on January 5, 1995, as a Wisconsin corporation and is registered under the Investment Company Act of 1940, as amended. Artisan Funds is a series comprised of twelve open-end, diversified mutual funds. Artisan Emerging Markets Fund (the “Fund”) commenced operations on June 26, 2006. The Fund’s investment objective is to seek long-term capital growth.
Emerging Markets Fund offers shares of capital stock of two classes – Institutional Shares and Advisor Shares – and began offering Advisor Shares on June 2, 2008. Advisor Shares are sold to employee benefit plans, clients of financial advisors, clients of sponsored programs and institutional or other investors. All investments and exchanges are subject to approval by the Fund. The financial statements of Institutional Shares are presented in a separate report.
Each class of shares has equal rights with respect to portfolio assets and voting privileges. Each class has exclusive voting rights with respect to any matters involving only that class.
Income, expenses not specific to a particular class and realized and unrealized gains and losses were allocated daily to each class of shares based upon the relative net asset value of outstanding shares. Expenses attributable to a particular class of shares, such as transfer agency fees, shareholder communication expenses and registration fees, were allocated directly to that class.
The Fund is managed by Artisan Partners Limited Partnership (the “Adviser” or “Artisan Partners”). The Adviser is wholly owned by Artisan Partners Holdings LP (“Artisan Holdings”).
(2) | Summary of significant accounting policies: |
The following is a summary of significant accounting policies of Artisan Funds in effect during the period covered by the financial statements, which were in accordance with United States generally accepted accounting principles.
(a) | Security valuation – The net asset value (“NAV”) of the shares of each class of the Fund was determined as of the close of regular session trading on the New York Stock Exchange (“NYSE”) (usually 4:00 p.m., Eastern Time) each day the NYSE was open for regular session trading. The NAV of each class of shares was determined by dividing the value of the Fund’s securities and other assets attributed to that class, less its liabilities attributed to that class, by the number of outstanding shares of that class of the Fund. |
In determining NAV, each equity security traded on a securities exchange, including the Nasdaq Stock Market, and over-the-counter securities, were valued at the closing price as of the time of valuation on the exchange or market designated by the Fund’s accounting agent or pricing vendor as the principal exchange (each, a “principal exchange”). The closing price provided by the pricing vendor for a principal exchange may differ from the price quoted elsewhere and may represent information such as last sales price, an official closing price, a closing auction price or other information,
11
NOTES TO FINANCIAL STATEMENTS
depending on exchange or market convention. Absent closing price information for a security from the principal exchange as of the time of valuation, the security was valued using (i) the closing price on another exchange on which the security traded (if such price was made available by a pricing vendor) or (ii) the most recent bid quotation on the principal exchange or, if such bid was not available, from a secondary exchange or in the over-the-counter market. Short-term investments, other than repurchase agreements, maturing within sixty days from the valuation date were valued at amortized cost, which approximates market value.
Emerging Markets Fund generally invested a significant portion, and perhaps as much as substantially all, of its total assets in securities principally traded in markets outside the U.S. The foreign markets in which the Fund invested were sometimes open on days when the NYSE was not open and the Fund did not calculate its NAV, and sometimes were not open on days when the Fund did calculate its NAV. Even on days on which both the foreign market and the NYSE were open, several hours may have passed between the time when trading in the foreign market closed and the time as of which the Fund calculated its NAV. That was generally the case for markets in Europe, Asia, Australia and other Far Eastern markets. The regular closing time of foreign markets in North and South America was generally the same as the closing time of the NYSE and the time as of which the Fund calculated its NAV.
Securities for which prices were not readily available were valued by Artisan Funds’ valuation committee (the “valuation committee”) at a fair value determined in good faith under procedures established by and under the general supervision of Artisan Funds’ board of directors (the “board of directors”). A price was considered to be not readily available, and the Fund may therefore have used fair value pricing, if, among other things, the valuation committee believed that the price determined did not reflect a fair value of the security or that the value of the security might have been materially affected by events occurring after the close of the market in which the security was principally traded but before the time for determination of NAV (a “subsequent event”). A subsequent event might include a company-specific development (for example, announcement of a merger that is made after the close of the foreign market), a development that might affect an entire market or region (for example, imposition of foreign exchange controls by a foreign government), a potentially global development (such as a terrorist attack that may be expected to have an impact on investor expectations worldwide) or a significant change in values of market indices, exchange traded funds or other financial instruments in the U.S. or other markets. Artisan Funds monitored for subsequent events using several tools, including the use of a third party research service to assist in determining estimates of fair values for foreign securities. That service utilized statistical data based on historical performance of securities, markets and other data in developing factors used to estimate a fair value. An indication by any of those tools of a potential material change in the value of securities resulted in either a meeting of the valuation committee, which considered whether a subsequent event had occurred and whether local market closing prices continued to represent fair values for potentially affected non-U.S. securities, and/or a valuation based on information provided by the third party research service.
When fair value pricing is employed, the value of a portfolio security used by the Fund to calculate its NAV may differ from quoted or published prices for the same security.
12
NOTES TO FINANCIAL STATEMENTS
Estimates of fair values utilized by the Fund as described above may differ from the value realized on the sale of those securities and the differences may have been material to the NAV of the Fund.
Foreign stocks as an asset class may underperform U.S. stocks, and foreign stocks may be more volatile than U.S. stocks. Risks relating to investment in foreign securities (including, but not limited to, depositary receipts and participation certificates) include: currency exchange rate fluctuation; less available public information about the issuers of securities; less stringent regulatory standards; lack of uniform accounting, auditing and financial reporting standards; and country risks including less liquidity, high inflation rates, unfavorable economic practices, political instability and expropriation and nationalization risks.
The risks of foreign investments typically are greater in emerging and less developed markets. For example, political and economic structures in these less developed countries may be new and changing rapidly, which may cause instability and greater risk of loss. These securities markets may be less developed, and securities in those markets are generally more volatile and less liquid than those in developed markets. Emerging market countries also are more likely to experience high levels of inflation, deflation or currency devaluations, which could hurt their economies and securities markets. Certain emerging markets also may face other significant internal or external risks, including a heightened risk of war, and ethnic, religious and racial conflicts. In addition, governments in many emerging market countries participate to a significant degree in their economies and securities markets, which may impair investment and economic growth of companies in those markets. High levels of national debt tend to make these markets heavily reliant on foreign capital and, therefore, vulnerable to capital flight.
(b) | Fair value measurements – Under United States generally accepted accounting principles for fair value measurement, accounting standards clarify the definition of fair value for financial reporting, establish a framework for measuring fair value and require additional disclosures about the use of fair value measurements. In accordance with this standard, fair value is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. The standard establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The three-tier hierarchy of inputs is summarized in three broad levels: |
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including but not limited to quoted prices for similar securities, interest rates, credit risks and securities trading primarily outside the U.S. whose value the Fund adjusted as a result of significant market movements following the close of local trading) |
13
NOTES TO FINANCIAL STATEMENTS
• | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining a fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk or liquidity associated with investing in those securities.
The following table summarizes the Fund’s investments, by major security type, based on the inputs used to determine their fair values as of September 30, 2012 (in thousands):
Fund | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
Emerging Markets | ||||||||||||||||
Equity Securities(1) | ||||||||||||||||
Developed Markets | $ | 26,356 | $ | - | $ | - | $ | 26,356 | ||||||||
Emerging Asia | 403,706 | - | 773 | 404,479 | ||||||||||||
Europe, Middle East & Africa | 147,399 | 7,518 | - | 154,917 | ||||||||||||
Latin America | 187,973 | - | - | 187,973 | ||||||||||||
Convertible Debentures | - | 128 | - | 128 | ||||||||||||
Repurchase Agreements | - | 14,379 | - | 14,379 | ||||||||||||
Total | $ | 765,434 | $ | 22,025 | $ | 773 | $ | 788,232 |
(1) | See the Fund’s Schedule of Investments for sector or country classifications. |
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Fund recognizes transfers between the levels as of the end of the period. At September 30, 2011, the fair market values of certain securities were adjusted, resulting in their Level 2 classification, due to developments that occurred between the time of the close of the foreign markets on which those securities trade and the close of regular session trading on the NYSE. Transfers from Level 2 to Level 1 for the Fund as of September 30, 2012 were approximately $459,182,000.
14
NOTES TO FINANCIAL STATEMENTS
As of September 30, 2012, two equity securities held in Emerging Markets Fund were classified as Level 3 due to a halt in trading. Due to the lack of observable market data for these securities, fair market values were determined in good faith by the valuation committee using various inputs, including unobservable inputs of discounts for illiquidity ranging from 50% to 90%. Increasing or decreasing the discounts for illiquidity would decrease or increase the calculated fair market value of the securities, respectively. As of September 30, 2012, the reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value, is as follows (in thousands):
Emerging Markets(1) | ||||
Balance as of September 30, 2011 | $ | - | ||
Transfers into Level 3 | 773 | |||
|
| |||
Balance as of September 30, 2012 | $ | 773 | ||
|
| |||
Net change in unrealized appreciation (depreciation) for investments held as of September 30, 2012 | $ | - | ||
|
| |||
(1) All Level 3 securities were equity securities with a regional classification of Emerging Asia. |
|
(c) | Taxes – No provision was made for federal income taxes or excise taxes since the Fund intends to (i) comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and (ii) distribute to its shareholders substantially all of its taxable income as well as net realized gains from the sale of investment securities. The Fund may utilize earnings and profits distributed to shareholders on redemptions of Fund shares as part of the dividends paid deduction. |
The Fund has analyzed the tax positions taken on federal income tax returns for all remaining open tax years (fiscal years 2008 through 2012) and has concluded that as of September 30, 2012, no provision for income tax would be required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and each state’s department of revenue.
The Fund may be subject to taxes imposed on realized and unrealized gains on securities of certain foreign countries in which the Fund invests. The foreign tax expense, if any, was recorded on an accrual basis and is included in “Net realized gain (loss) on investments” and “Net increase (decrease) in unrealized appreciation or depreciation on investments” on the accompanying Statement of Operations. The amount of foreign tax owed is included in “Payable for foreign taxes” on the accompanying Statement of Assets and Liabilities, and is comprised of withholding taxes on foreign dividends and taxes on unrealized gains.
As of and during the year ended September 30, 2012, the Fund did not have any liabilities for any unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year ended September 30, 2012, the Fund did not incur any interest or penalties.
15
NOTES TO FINANCIAL STATEMENTS
(d) | Portfolio transactions – In determining the Fund’s NAV, security transactions and shareholder transactions were accounted for no later than one business day after trade date, in accordance with applicable regulations. However, for financial reporting purposes, security transactions and shareholder transactions were recorded on trade date in accordance with United States generally accepted accounting principles. Net realized gains and losses on securities were computed on specific security lot identification. |
(e) | Foreign currency translation – Values of foreign investments, open foreign currency forward contracts, payables for capital gains taxes, payables and receivables for securities transactions, dividend and reclaim receivables, other receivables and payables, and cash denominated in a foreign currency were translated into U.S. dollars using a spot market rate of exchange as of the time of determination of the Fund’s NAV on the day of valuation. Purchases and sales of investments and dividend and interest income were translated into U.S. dollars using a current spot market rate of exchange on the date of such transactions. The portion of security gains or losses resulting from changes in foreign exchange rates was included with net realized and unrealized gain or loss from investments, as appropriate, for both financial reporting and tax purposes. For tax purposes, these foreign exchange gains and losses were treated as ordinary income or loss. |
The Fund may enter into (a) foreign currency spot contracts and (b) foreign currency forward contracts. Foreign currency spot contracts are used to facilitate the purchase and sale of non-U.S. securities and generally settle within three business days. Foreign currency forward contracts are used to hedge against foreign currency exchange rate risks on non-U.S. dollar denominated investment securities. Open foreign currency spot contracts and foreign currency forward contracts, if any, were recorded at market value and recorded in the Statement of Assets and Liabilities. Realized and unrealized gains and losses were reported as foreign currency related transactions and are recorded in the Statement of Operations.
The Fund could be exposed to loss if the counterparties fail to perform under these contracts. For the year ended September 30, 2012, the Fund entered only into forward currency spot contracts. Other foreign currency related transaction gains and losses may result from currency gains and losses realized from the difference between the amounts of dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. The net increase (decrease) in unrealized appreciation or depreciation on foreign currency related transactions arose from changes in the values of assets and liabilities, other than investments in securities, resulting from changes in foreign exchange rates.
(f) | Repurchase agreements – The Fund may enter into repurchase agreements with institutions that the Adviser determined were creditworthy pursuant to criteria adopted by the board of directors. Repurchase agreements were recorded at cost plus accrued interest and were collateralized in an amount greater than or equal to the repurchase price plus accrued interest. Collateral (in the form of U.S. government securities) was held by the Fund’s custodian and in the event of default on the obligation of the counterparty to repurchase, the Fund had the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the proceeds from any sale of such collateral were less than the repurchase price, the Fund would have suffered a loss. |
16
NOTES TO FINANCIAL STATEMENTS
(g) | Depositary receipts – The Fund may invest in depositary receipts. Depositary receipts are typically issued by a financial institution (a “depositary”), evidencing ownership interests in a security issued by an issuer and deposited with the depositary. |
(h) | Equity-linked participation certificates – The Fund may invest in equity-linked participation certificates. Equity-linked participation certificates are derivative securities which are designed to provide synthetic exposure to one or more underlying securities. An investment in an equity-linked participation certificate typically entitles the holder to a return equal to the market return of the underlying security or securities, subject to the credit risk of the issuing financial institution. There is no off-balance sheet risk associated with equity-linked participation certificates and the Fund’s potential loss is limited to the purchase price of the securities. The Fund is exposed to credit risk associated with the counterparty to the transaction, which is monitored by Fund management on a periodic basis. |
(i) | Transfer agent and authorized agent fees – The Fund paid fees to, and reimbursed expenses of, the Fund’s transfer agent. In addition, the Fund has authorized certain financial services companies, broker-dealers, banks or other authorized agents, and in some cases, other organizations designated by an authorized agent (with their designees, collectively “authorized agents”) to accept purchase, exchange and redemption orders for Advisor Shares on the Fund’s behalf. Many authorized agents charged a fee for accounting and shareholder services that the agent provided to Fund shareholders on the Fund’s behalf. Those services typically included recordkeeping, transaction processing for shareholders’ accounts and other services. The fee was either based on the number of accounts to which the authorized agent provided such services, or was a percentage (as of September 30, 2012 up to 0.40% annually) of the average value of Fund shares held in such accounts. The Fund paid a portion of such fees, which are intended to compensate the authorized agent for its provision of services of the type that would be provided by the Fund’s transfer agent or other service providers if the shares were registered on the books of the Fund’s transfer agent. The balance of the fees incurred was paid by the Adviser. The Fund’s expenses incurred for services provided by authorized agents were included in “Transfer agent fees” in the Statement of Operations. The table below shows the fees and expenses to the Fund’s transfer agent and the fees to authorized agents incurred by each class of the Fund during the year ended September 30, 2012 (in thousands). |
Year Ended 9/30/12 | ||||||||||||
Fees and Expenses to Transfer Agent | Fees to Authorized Agents | Total | ||||||||||
Advisor Shares | $ | 67 | $ | 845 | $ | 912 | ||||||
Institutional Shares | 21 | - | 21 |
(j) | Commission recapture – The Fund had the ability to direct portfolio trades to various brokers that have agreed to rebate a portion of the commissions generated. The Fund received no such cash rebates during the year ended September 30, 2012. |
(k) | Use of estimates – The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make |
17
NOTES TO FINANCIAL STATEMENTS
estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. |
(l) | Indemnifications – In the normal course of business, the Fund has entered into contracts in which the Fund agrees to indemnify the other party or parties against various potential costs or liabilities. The Fund’s maximum exposure under these arrangements is unknown. No claim was made for indemnification pursuant to any such agreement of the Fund. |
(m) | Other – Dividend income less foreign taxes withheld, if any, was generally recorded on the ex-dividend date. In some cases, the information was not available to the Fund on the ex-dividend date. In such cases, which may have included private placements and foreign securities, dividends were recorded as soon after the ex-dividend date as reliable information became available to the Fund. Non-cash dividends included in dividend income, if any, were generally recorded at the fair market value of securities received. Interest income was reported on the accrual basis. Distributions to shareholders were recorded on the ex-dividend date. Expenses attributable to Artisan Funds were generally allocated to each Fund based on net assets. However, other expense allocation methodologies were used, depending on the nature of the expense item. Expenses attributable to a particular Fund or class were allocated directly to that Fund or class. |
The character of income and net realized gains and losses may differ in some instances for financial statement and tax purposes and may result in reclassification of permanent differences among certain capital accounts to more appropriately conform financial accounting to tax characterizations of dividend and capital gain distributions.
Emerging Markets Fund generally imposed a 2% redemption fee on shares held 90 days or less. Those redemption fees were recorded as a reduction in the cost of shares redeemed and had the primary effect of increasing paid-in capital. The Fund reserved the right to waive or reduce the 2% redemption fee on shares held 90 days or less at its discretion when the Fund believed such waiver was in the best interests of the Fund, including but not limited to, when it determined that imposition of the redemption fee was not necessary to protect the Fund from the effects of short-term trading. The Fund waived the fee on redemption of shares held by certain authorized agents or other Fund intermediaries and otherwise in accordance with the Fund’s prospectus.
(3) | Transactions with affiliates: |
The Adviser, with which the officers and a director of Artisan Funds were affiliated, provided investment advisory and administrative services to the Fund. In exchange for those services, Emerging Markets Fund paid a monthly management fee to the Adviser at the annual rate of 1.05% of the Fund’s average daily net assets.
The officers and director of Artisan Funds who are affiliated with the Adviser receive no compensation from the Fund. Each director who was not an affiliated person of the Adviser received an annual retainer of $200,000, payable quarterly, as well as reimbursement of expenses related to his or her duties as a director of Artisan Funds. The amount of the annual retainer increases by $10,000 with each new series of Artisan Funds. In addition, the non-interested chair of the board of directors received an annual retainer of $60,000, payable quarterly, and each chair of a board committee who was a non-interested director
18
NOTES TO FINANCIAL STATEMENTS
received an annual retainer of $30,000, payable quarterly. These fees were generally allocated to each of the Artisan Funds based on net assets, subject to a minimum allocation of $1,500 to each Fund per quarter.
Artisan Funds has adopted a deferred compensation plan for directors who are not affiliated persons of the Adviser that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the directors under the plan, deferred amounts would be invested in shares of Artisan Funds as selected by the individual directors. The Fund would purchase shares of Artisan Funds selected for deferral by the director in amounts equal to his investment, resulting in a Fund asset equal to the deferred compensation liability. As of September 30, 2012, no directors have elected to participate in the deferred compensation plan.
Shares of Artisan Funds were offered for sale by Artisan Partners Distributors LLC (“Distributors”). Distributors is wholly owned by Artisan Holdings. All distribution expenses relating to the Fund were paid by the Adviser.
(4) | Line of credit arrangement: |
Artisan Funds is party to a line of credit agreement with State Street Bank and Trust Company (“SSB”), which expires in August 2013, under which each Fund may borrow up to $75 million, provided that such borrowing does not exceed the lesser of (a) 33 1/3% of its adjusted net assets, with adjusted net assets being total assets less total liabilities (excluding indebtedness for borrowed money) after giving effect to the borrowing, and (b) the maximum amount the Fund is permitted to borrow pursuant to applicable law, pursuant to the Fund’s prospectus limitations on indebtedness, pursuant to any vote of the shareholders of the Fund, or pursuant to any limitation on borrowings in any applicable agreement with any governmental authority or regulator or any other applicable agreement or document to which such Fund is a party; provided that the aggregate borrowings by all Artisan Funds may not exceed $100 million. Artisan Funds paid a commitment fee at the annual rate of 0.10% on the unused portion of the line of credit and interest was charged on any borrowings at the higher of the current Federal Funds or overnight LIBOR rates plus 1.25%. The commitment fee is allocated to each Fund based on net assets. The use of the line of credit was generally restricted to temporary borrowing for extraordinary or emergency purposes. During the year ended September 30, 2012, the Fund had maximum borrowings of $13,951,000.
(5) | Investment transactions: |
The cost of securities purchased and the proceeds from the sale of securities (excluding short-term securities) for the year ended September 30, 2012 were $324,723,000 and $292,130,000, respectively.
19
NOTES TO FINANCIAL STATEMENTS
(6) | Information for Federal income tax purposes: |
For Federal income tax purposes, the cost of investments, gross unrealized appreciation, gross unrealized depreciation and net unrealized depreciation on investments as of September 30, 2012 was as follows (in thousands):
Cost of Investments | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Depreciation on Investments | |||||||||
$854,184 | $ | 75,815 | $ | (141,767 | ) | $ | (65,952 | ) |
The difference between cost of investments for financial reporting and cost of investments for Federal income tax purposes was due primarily to timing differences in recognizing certain gains and losses on security transactions (e.g., wash sale loss deferrals and passive foreign investment company transactions).
The tax characterization of ordinary income dividends and long-term capital gain distributions paid during the years ended September 30, 2012 and September 30, 2011 were as follows (in thousands):
Year Ended 9/30/12 | Year Ended 9/30/11 | |||||
Ordinary Income Dividends | Long-Term Capital Gain Distributions | Ordinary Income Dividends | Long-Term Capital Gain Distributions | |||
$5,791 | $1,871 | $5,180 | $ - | |||
|
|
Ordinary income dividends and long-term capital gain distributions were determined in accordance with income tax regulations that impose treatment that is different from the treatment that would result from the application of United States generally accepted accounting principles. These differences were due to differing treatments for such items as net short-term gains, wash sale loss deferrals, passive foreign investment company transactions, foreign currency transactions, net investment losses and qualified late year ordinary losses.
In order to meet certain excise tax distribution requirements, the Fund is required to measure and distribute annually, net capital gains realized during a twelve-month period ending October 31 and net investment income earned during a twelve-month period ending December 31. In connection with these requirements, the Fund is permitted for tax purposes to defer into its next fiscal year qualified late year losses. Qualified late year capital losses are any net capital losses incurred between November 1 and the end of the Funds’ fiscal year, September 30, 2012. Qualified late year ordinary losses are specified losses generally incurred between January 1 and the end of the Fund’s fiscal year, September 30, 2012.
20
NOTES TO FINANCIAL STATEMENTS
Additional tax information as of and for the year ended September 30, 2012 follows (in thousands):
Undistributed Ordinary Income | Undistributed Long-Term Gain | Qualified Late Year | Late Year Ordinary Losses | Other Deferred Gains (Losses)(1) | ||||
10,966 | - | 55,920 | - | (1,078) |
(1) | Other deferred gains and losses relate to (a) gains or losses on transactions that occurred subsequent to year end that affected the distributable earnings at September 30, 2012 such as wash sales, (b) unrealized gains and losses on open foreign currency contracts and (c) other items. |
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years must be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term, as permitted under previous law. Thus, such losses must be used first to offset gains of the same character; for example, long-term carryforward losses will first offset long-term gains, before they can be used to offset short-term gains.
For the year ended September 30, 2012, the Fund had short-term capital loss carryovers of $497,000, which may be carried forward for an unlimited period. To the extent the Fund realizes future net capital gains, those gains will be offset by any unused capital loss carryover.
21
NOTES TO FINANCIAL STATEMENTS
(7) | Fund share activities: |
Capital share transactions for the Fund were as follows (dollar values in thousands):
EMERGING MARKETS | ||||||||
Year ended September 30, 2012 | Institutional Shares | Advisor Shares | ||||||
Proceeds from shares issued | $ | 204,774 | $ | 99,599 | ||||
Net asset value of shares issued in reinvestment of dividends and distributions | 4,973 | 2,064 | ||||||
Cost of shares redeemed(1) | (115,493 | ) | (161,647 | ) | ||||
|
|
|
| |||||
Net increase (decrease) from fund share transactions | $ | 94,254 | $ | (59,984 | ) | |||
|
|
|
| |||||
Shares sold | 16,979,081 | 8,026,342 | ||||||
Shares issued in reinvestment of dividends and distributions | 440,061 | 182,171 | ||||||
Shares redeemed | (9,579,084 | ) | (13,166,849 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in capital shares | 7,840,058 | (4,958,336 | ) | |||||
|
|
|
| |||||
EMERGING MARKETS | ||||||||
Year ended September 30, 2011 | Institutional Shares | Advisor Shares | ||||||
Proceeds from shares issued | $ | 208,436 | $ | 302,182 | ||||
Net asset value of shares issued in reinvestment of dividends and distributions | 3,270 | 1,764 | ||||||
Cost of shares redeemed(1) | (18,510 | ) | (104,406 | ) | ||||
|
|
|
| |||||
Net increase from fund share transactions | $ | 193,196 | $ | 199,540 | ||||
|
|
|
| |||||
Shares sold | 13,451,736 | 19,672,672 | ||||||
Shares issued in reinvestment of dividends and distributions | 208,694 | 112,253 | ||||||
Shares redeemed | (1,368,082 | ) | (7,374,302 | ) | ||||
|
|
|
| |||||
Net increase in capital shares | 12,292,348 | 12,410,623 | ||||||
|
|
|
|
(1) | Net of redemption fees of: |
9/30/2012 | 9/30/2011 | |||||||
Emerging Markets - Institutional Shares | $ | 25 | $ | 29 | ||||
Emerging Markets - Advisor Shares | $ | 17 | $ | 26 |
(8) | Subsequent Events |
The Fund evaluated subsequent events through the date of issuance of the Fund’s financial statements and has determined there is no impact to the Fund’s financial statements.
22
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of Artisan Partners Funds, Inc.
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Artisan Emerging Markets Fund (one of the twelve portfolios constituting Artisan Partners Funds, Inc.) (the “Fund”) as of September 30, 2012, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2012, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Artisan Emerging Markets Fund of Artisan Partners Funds, Inc. at September 30, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Chicago, Illinois
November 21, 2012
23
NOTES TO FINANCIAL STATEMENTS
Other Federal tax information (unaudited):
The Internal Revenue Code requires that shareholders be notified within 60 days of the Fund’s fiscal year-end of certain information regarding long-term capital gains, qualified dividend income and the dividends received deduction for corporate shareholders. This data is informational only. Every year in January, shareholders are sent a Form 1099-DIV which provides the federal tax status of dividends and distributions received during the calendar year. Shareholders are advised to consult their own tax advisor with respect to the specific tax consequences of investment in the Fund.
The Fund hereby designates the following amounts as (i) long-term capital gain distributions for purposes of the dividends paid deduction (including earnings and profits distributed to shareholders on redemption of Fund shares, in thousands), (ii) the amount of ordinary dividends paid during the fiscal year ended September 30, 2012 that are considered qualified dividend income as defined in the Jobs and Growth Tax Relief Reconciliation Act of 2003, and (iii) the amount of ordinary dividends paid during the fiscal year ended September 30, 2012 that are eligible for the dividends received deduction available to certain corporate shareholders.
Long-Term Capital Gains | Qualified Dividend Income | Dividends Receivable Deduction | ||||||
1,871 | 99.53 | % | - | % |
24
SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED)
As a shareholder of Artisan Funds, you may incur transaction costs, including redemption fees, and you will incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2012 to September 30, 2012.
Actual Expenses
The first line under the Fund’s name in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the name of the Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line under the Fund’s name in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for the six months ended September 30, 2012 and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 4/1/2012 | Ending Account Value 9/30/2012 | Expenses Paid During Period 4/1/2012 - 9/30/2012 | ||||||||||
Artisan Emerging Markets Fund - Advisor Shares | ||||||||||||
Actual | $ | 1,000.00 | $ | 959.40 | $ | 7.25 | ||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.60 | $ | 7.47 |
(1) | Expenses are equal to the Fund’s ratio of expenses to average net assets for the six month period ended September 30, 2012 (shown below), multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
Fund | Annualized Ratio of Expenses to Average Net Assets for the Six Month Period Ended September 30, 2012 | |||
Artisan Emerging Markets Fund - Advisor Shares | 1.48 | % |
25
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
The discussion of the Fund included in this report includes statistical information about the portfolio of the Fund. Except as otherwise noted, that information is as of September 30, 2012. That information will vary with changes in the Fund’s portfolio investments. The performance information for the Fund relative to its benchmark index discussed in this report was prepared by the Adviser using information reported by FactSet Research Systems, Inc. (“FactSet”). For the purposes of assigning portfolio securities to a particular country in this report, the Adviser considers an issuer to be from a particular country as designated by its securities information vendors. However, the Adviser in its own judgment may consider an issuer to be from a country other than the country designated by the securities information vendors. The Adviser currently uses MSCI Inc. as its primary source and FactSet as a secondary source for this information. The primary information vendor’s criteria include the identity of the jurisdiction of the issuer’s incorporation, the main equity trading market for the issuer’s securities, the geographical distribution of the issuer’s operations and the location of the issuer’s headquarters. The Adviser may also consider other criteria such as the source of a company’s revenues. Over time, country designations may change.
For the purposes of assigning portfolio securities to a particular sector and industry, the Adviser assigns securities in accordance with the sector and industry classifications of the Global Industry Classification Standard (GICS®) developed by MSCI Inc. and Standard & Poor’s (to the extent available) as a primary source and FactSet (to the extent available) as a secondary source for this information. In the event the Adviser’s securities information vendors do not classify a security to a particular sector or industry, or if the published classification appears to be erroneous, the Adviser classifies the security according to its own judgment, using other securities information vendors, the company description and other publicly available information about the company’s peer group. Sector and industry classifications may change over time.
The names of portfolio securities reflected in this report are as reported by the Fund’s data providers, may not represent the legal name of the entity and, in some cases, are translations of non-English names.
Description of Index
The Fund’s performance is compared in this report to changes in a broad-based index of changes in prices of securities in the market in which the Fund invests. This index is unmanaged and its returns include reinvested dividends. Unlike the Fund’s returns, the returns of the index do not include the payment of sales commissions or other expenses that would be incurred in the purchase or sale of the securities included in the index. An investment cannot be made directly in an index. Fair value pricing is not employed by market indices.
The index to which the Fund is compared is the Morgan Stanley Capital International Emerging Markets IndexSM, a market-weighted index of companies in emerging markets.
Trademarks
Trademarks and copyrights relating to the indices and products of portfolio companies mentioned in this report, if any, are owned by their respective owners. Except as otherwise indicated, the trademarks, including names, logos, slogans and service marks appearing in this report are the property of the Adviser and may not be copied, reproduced, published or in any way used without written permission.
26
NOTES ON MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE AND PORTFOLIO HOLDINGS’ CLASSIFICATION
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by the Adviser. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
The MSCI information may only be used by the reader, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the reader of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall MSCI Parties have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.
PROXY VOTING POLICIES AND PROCEDURES
You may obtain a description of Artisan Funds’ proxy voting policies and procedures, without charge, upon request by calling 866.574.1770. That information also is included in Artisan Funds’ statement of additional information, which is available without charge, on Artisan Funds’ website at www.artisanfunds.com and on the Securities and Exchange Commission’s website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the twelve-month period ended June 30 is available without charge, on Artisan Funds’ website at www.artisanfunds.com and on the Securities and Exchange Commission’s website at www.sec.gov.
INFORMATION ABOUT PORTFOLIO SECURITIES
Artisan Funds files a complete schedule of portfolio holdings with the Securities and Exchange Commission for the quarters ending December 31 and June 30 (the first and third quarters of the Funds’ fiscal year) on Form N-Q. The Fund’s Forms N-Q are
27
INFORMATION ABOUT PORTFOLIO SECURITIES
available on the Securities and Exchange Commission’s website at www.sec.gov. You also may review and copy those documents by visiting the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 800.SEC.0330.
28
The board of directors has overall responsibility for the conduct of the affairs of Artisan Funds. Each director serves an indefinite term of unlimited duration until the next annual meeting of shareholders and until the election and qualification of his or her successor or until he or she retires, resigns or is removed from office. Artisan Funds’ bylaws further provide that each director must retire by the end of the calendar year in which he or she attains the age of 72. The board of directors may fill any vacancy on the board provided that after such appointment at least two-thirds of the directors have been elected by the shareholders. The shareholders may remove a director by a vote of a majority of the outstanding shares of the Funds at any meeting of shareholders called for the purpose of removing such director.
The board of directors elects the officers of Artisan Funds. Each officer serves until the election and qualification of his or her successor, or until he or she sooner dies, resigns, or is removed or disqualified. The board of directors may remove any officer with or without cause at any time.
The names and ages of the directors and officers as of November 16, 2012, the position each holds with the Funds, the date each was first elected to office, their principal business occupations and other directorships they have held during at least the last five years are shown below.1 Each director oversees all twelve series of Artisan Funds.
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Directors who are not “interested persons” of Artisan Funds: | ||||||||
David A. Erne – 69 | Director and Independent Chair of the Board of Directors | Director since 3/27/95; Independent Chair since 2/4/05 | Of counsel to the law firm Reinhart Boerner Van Deuren s.c., Milwaukee, WI. | Trustee, Northwestern Mutual Life Insurance Company (individual life insurance, disability insurance and annuity company). | ||||
Gail L. Hanson – 56 | Director | 1/1/12 | Chief Financial Officer, Aurora Health Care (not for profit health care provider); from September 2004 to February 2011, Deputy Executive Director, State of Wisconsin Investment Board. | Director, Northwestern Mutual Series Fund, Inc. (individual life insurance and investment company) (28 portfolios). | ||||
Thomas R. Hefty – 65 | Director | 3/27/95 | Retired; from January 2007 to February 2008, President, Kern Family Foundation (private, grant-making organization); until December 2006, of counsel to the law firm Reinhart Boerner Van Deuren s.c., Milwaukee, WI; until December 2006, Adjunct Professor, Department of Business and Economics, Ripon College; until December 2002, Chairman of the Board and Chief Executive Officer of Cobalt Corporation (provider of managed care and specialty business services). | None. |
29
DIRECTORS AND OFFICERS
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Patrick S. Pittard – 66 | Director | 8/9/01 | Chairman and Chief Executive Officer, ACT Bridge, Inc. (enterprise talent management firm); Distinguished Executive in Residence (teaching position), University of Georgia; until October 2001, Chairman of the Board, President and Chief Executive Officer of Heidrick & Struggles International, Inc. (executive search firm). | Director, Lincoln National Corporation (insurance and investment management company); former Director, Cbeyond, Inc. (telecommunications company, formerly Cbeyond Communications, Inc.). | ||||
R. Scott Trumbull – 63 | None | 11/13/12 | Chairman and Chief Executive Officer, Franklin Electric Co., Inc. (manufacturer of water and fuel pumping systems). | Director, Health Care REIT (investor in health care real estate). | ||||
Director who is an “interested person” of Artisan Funds: | ||||||||
Andrew A. Ziegler – 55* | Director | 1/5/95 | Managing Director of Artisan Partners; until February 2010, President and Chief Executive Officer of Artisan Funds. | None. | ||||
Officers: | ||||||||
Eric R. Colson – 42 | President and Chief Executive Officer | 2/9/10 | Managing Director and Chief Executive Officer of Artisan Partners since January 2010; prior thereto, Managing Director and Chief Operating Officer – Investment Operations of Artisan Partners. | None. | ||||
Brooke J. Billick – 58 | Chief Compliance Officer | 8/19/04 | Chief Compliance Officer – U.S. Mutual Funds and Associate Counsel of Artisan Partners; until January 2012, Chief Compliance Officer of Artisan Partners and Artisan Partners Distributors LLC. | None. | ||||
Gregory K. Ramirez – 42 | Chief Financial Officer and Treasurer | 2/8/11 | Managing Director and Chief Accounting Officer (since March 2010) of Artisan Partners; Vice President, Treasurer and Chief Financial Officer of Artisan Partners Distributors LLC; until July 2012, Assistant Treasurer of Artisan Partners Distributors LLC; until February 2011, Assistant Secretary and Assistant Treasurer of Artisan Funds. | None. |
30
DIRECTORS AND OFFICERS
Name and Age at 11/16/12 | Position(s) Held with Artisan Funds | Date First Elected to Office | Principal Occupation(s) during at least the | Other Public Company or Registered Investment Company Directorships Held | ||||
Sarah A. Johnson – 40 | General Counsel, Vice President and Secretary | 2/8/11 | Managing Director (since March 2010), Associate Counsel and Chief Compliance Officer (since January 2012) of Artisan Partners; Vice President and Secretary of Artisan Partners Distributors, LLC; until February 2011, Assistant Secretary of Artisan Funds. | None. | ||||
James S. Hamman, Jr. – 43 | Vice President and Assistant Secretary | 2/8/11 | Associate Counsel of Artisan Partners since March 2010; from January 2008 until February 2010, Principal of Elite Investment Partners, LLC; prior thereto, Executive Vice President, General Counsel and Secretary of Calamos Asset Management, Inc. | None. | ||||
Stephen W. Hlavach – 43 | Assistant Treasurer | 2/14/12 | Tax Director of Artisan Partners since January 2011; prior thereto, Tax Lead, Mergers & Acquisitions of The Boeing Company. | None. | ||||
Shannon K. Jagodinski – 35 | Assistant Treasurer | 2/14/12 | Senior Manager of Investment Accounting of Artisan Partners. | None. |
1 | Howard B. Witt retired as a director of Artisan Funds effective November 13, 2012. |
* | Mr. Ziegler is an “interested person” of Artisan Funds, as defined in the Investment Company Act of 1940, because he is a Managing Director of Artisan Partners and an officer of Artisan Investments GP LLC (the general partner of Artisan Partners). Mr. Ziegler and Carlene M. Ziegler (who are married to each other) control Artisan Partners. |
The business address of the officers and the director affiliated with Artisan Partners is 875 E. Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202. The address of the other directors is c/o Artisan Funds, 875 E. Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202.
Artisan Funds’ statement of additional information (SAI) contains further information about the directors. Please call 866.574.1770 or visit our website at www.artisanfunds.com for a free copy of the SAI.
31
ARTISAN FUNDS P.O. BOX 8412 BOSTON, MA 02266-8412
866.574.1770 |
Item 2. Code of Ethics.
(a) Registrant has adopted a code of ethics (the “Code”) that applies to its principal executive officer, principal financial officer and principal accounting officer (the “Covered Officers”).
(b) No disclosures are required pursuant to this Item 2(b).
(c) During the period covered by the report, registrant did not make any substantive amendments to the Code.
(d) During the period covered by the report, registrant did not grant any waivers, including implicit waivers, from the provisions of the Code.
(e) Not applicable.
(f) A copy of the Code is filed as Exhibit (a)(1) to this Form N-CSR.
Item 3. Audit Committee Financial Expert.
Registrant’s board of directors has determined that Thomas R. Hefty, member and chairman of the registrant’s audit committee and Gail L. Hanson, member of the registrant’s audit committee, each qualify as an audit committee financial expert, as such term is defined in Instruction 2(b) to Item 3 of Form N-CSR. Mr. Hefty and Ms. Hanson are “independent” as such term is defined in paragraph (a)(2) of Item 3 of Form N-CSR.
Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including, without limitation, for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
Aggregate fees billed to the registrant for professional services rendered by the registrant’s principal accountant, Ernst & Young LLP, are summarized in the tables below. The tables summarize fees billed (or to be billed) by the registrant’s principal accountant for work performed relating to each applicable period identified below.
Fees:
Fiscal Year Ended September 30, 2012 | Fiscal Year Ended September 30, 2011 | |||||||
Audit Fees (a) | $ | 265,500 | $ | 257,900 | ||||
Audit-Related Fees (b) | $ | 50,200 | $ | 48,800 | ||||
Tax Fees (c) | $ | 293,650 | $ | 212,450 | ||||
All Other Fees (d) | $ | — | — |
(a) “Audit Fees” include amounts for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, including for 2012, portions of which have not been billed at the time of this filing and fees billed for consents issued in conjunction with the registrant’s post-
effective amendments to the Funds’ registration statements filed for each of the last two fiscal years. The fees billed during the fiscal year ended September 30, 2012 also include consents issued in conjunction with the registrant’s post-effective amendments to the Funds’ registration statements filed in connection with the name change of Artisan Global Opportunities Fund (formerly Artisan Growth Opportunities Fund) and the initial offering of institutional shares of Artisan Global Value Fund, Artisan Mid Cap Value Fund, Artisan Small Cap Fund and Artisan Small Cap Value Fund. The fees billed during the fiscal year ended September 30, 2011 also include consents issued in conjunction with the registrant’s post-effective amendments to the Funds’ registration statements filed in connection with the initial offering of institutional shares of Artisan Global Opportunities Fund and Artisan Value Fund.
(b) “Audit-Related Fees” include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements. Audit-related fees have not been reported under the item “audit fees” in the chart above.
The fees billed by Ernst & Young LLP during the fiscal years ended September 30, 2012 and September 30, 2011 include fees incurred for services for review procedures performed in conjunction with the semiannual reports to shareholders as of March 31, 2012 and March 31, 2011.
(c) “Tax Fees” include amounts for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning.
The fees shown in the table above for the fiscal year ended September 30, 2012 include fees for (1) the review and preparation of the Funds’ income tax returns for the fiscal year ended September 30, 2012, which have not been billed as of the time of this filing; (2) the review of excise tax calculations and preparation of excise tax returns for the calendar year ended December 31, 2012, which also have not yet been billed as of the time of this filing; (3) the use of a PFIC database supplied by Ernst & Young LLP for the fiscal year ended September 30, 2011 and the excise year ended December 31, 2011, and the semiannual period ended March 31, 2012; (4) the use of a Qualified Foreign Corporation (QFC) Database supplied by Ernst & Young LLP for the calendar year ended December 31, 2011; and (5) the filing of reclaims of tax amounts withheld by European Union member countries.
The fees shown in the table above for the fiscal year ended September 30, 2011 include fees for (1) the review and preparation of the Funds’ income tax returns for the fiscal year ended September 30, 2011; (2) the review of excise tax calculations and preparation of excise tax returns for the calendar year ended December 31, 2011; (3) the use of a PFIC database supplied by Ernst & Young LLP for the fiscal year ended September 30, 2010 and the excise year ended December 31, 2010, and the semiannual period ended March 31, 2011; and (4) the use of a Qualified Foreign Corporation (QFC) Database supplied by Ernst & Young LLP for the calendar year ended December 31, 2010.
(d) None.
(e)(1) During its regularly scheduled periodic meetings, the registrant’s audit committee considers any requests to pre-approve any audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has authorized its chairman to exercise that authority in the intervals between meetings; and the chairman presents any such pre-approvals to the audit committee at its next regularly scheduled meeting. Under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, pre-approval of non-audit services may be waived provided that: 1) the aggregate fees for all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to its principal accountant during the fiscal year in which services are provided, 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit.
(e)(2) No services included in Items 4(b) – (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees for the fiscal years ended September 30, 2012 and September 30, 2011 by the registrant’s principal accountant for non-audit services rendered to the registrant are shown in the tables above and described under Items 4(b) – (d) above. For the registrant’s fiscal years ended September 30, 2012 and September 30, 2011, Ernst & Young LLP served as the registrant’s principal accountant and provided no services and billed no fees for non-audit services rendered to the registrant’s adviser or entities controlling, controlled by or under common control with the adviser.
(h) The audit committee of the registrant’s board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser, and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. The provisions of Rule 2-01(c)(7) were effective on May 6, 2003. No such services were rendered on or after May 6, 2003.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
The Schedules of Investments in securities of unaffiliated issuers as of September 30, 2012 are included as part of the annual reports to shareholders filed under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
No material changes to report.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive and principal financial officers have concluded, based on an evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, the “Disclosure Controls”) as of a date within 90 days prior to the filing date (the “Filing Date”) of this Form N-CSR (the “Report”), that the Disclosure Controls are effectively designed to provide reasonable assurance that the information required to be disclosed by the registrant in the Report is recorded, processed, summarized and reported by the Filing Date, including ensuring that information required to be disclosed in the Report is accumulated and communicated to the registrant’s management, including the registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a) | (1) | Code of Ethics for Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer (as referenced in Item 2 above), attached hereto as Exhibit (a)(1) | ||
(2) | Certifications of Eric R. Colson, Principal Executive Officer and Gregory K. Ramirez, Principal Financial Officer pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)), attached hereto as Exhibits (a)(2)(i) and (a)(2)(ii) | |||
(b) | Certification of Eric R. Colson, Principal Executive Officer and Gregory K. Ramirez, Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, attached hereto as Exhibit (b) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Artisan Partners Funds, Inc. | ||
By: | /s/ Eric R. Colson | |
Eric R. Colson | ||
Principal Executive Officer | ||
Date: | December 4, 2012 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Eric R. Colson | |
Eric R. Colson | ||
Principal Executive Officer | ||
Date: | December 4, 2012 | |
By: | /s/ Gregory K. Ramirez | |
Gregory K. Ramirez | ||
Principal Financial Officer | ||
Date: | December 4, 2012 |