Artisan Global Equity Fund (ARTHX) – December 2012

By David Snowball

Objective and Strategy

The fund seeks to maximize long-term capital growth.  They invest in a global, all-cap equity portfolio which may include common and preferred stocks, convertible securities and, to a limited extent, derivatives.  They’re looking for high-quality growth companies with sustainable growth characteristics.  Their preference is to invest in firms that benefit from long-term growth trends and in stocks which are selling at a reasonable price.  Typically they hold 60-100 stocks. No more than 30% of the portfolio may be invested in emerging markets.  In general they do not hedge their currency exposure but could choose to do so if they owned a security denominated in an overvalued currency.


Artisan Partners of Milwaukee, Wisconsin with Artisan Partners UK LLP as a subadvisor.   Artisan has five autonomous investment teams that oversee twelve distinct U.S., non-U.S. and global investment strategies. Artisan has been around since 1994.  As of 9/30/2012, Artisan Partners had approximately $70 billion in assets under management.  That’s up from $10 billion in 2000. They advise the 12 Artisan funds, but only 5% of their assets come from retail investors.


Barry P. Dargan is lead portfolio manager and Mark L. Yockey is portfolio manager.  Dargan and Yockey are jointly responsible for management of the fund, they work together to develop investment strategies but Mr. Dargan generally exercises final decision-making authority.  Previously, Mr. Dargan worked for MFS, as an investment analyst from 1996 to 2001 and as a manager of MFS International Growth (MGRAX) from 2001 to 2010.  Mr. Yockey joined Artisan in 1995 and is the lead manager for Artisan International (ARTIX) and Artisan International Small Cap (ARTJX).  The fact that Mr. Dargan’s main charge handily outperformed ARTIX over nearly a decade might have helped convince Artisan to bring him on-board.

Management’s Stake in the Fund

Mr. Dargan has over $1 million invested with the fund, and Mr. Yockey has between $500,000 and $1 million invested.  As of December 31, 2011, the officers and directors of Artisan Funds owned 16.94% of Artisan Global Equity Fund.

Opening date

March 29, 2010

Minimum investment

$1,000, which Artisan will waive if you establish an account with an automatic investment plan.

Expense ratio

1.50%, after waivers, on assets of $16.7 million. There is a 2% redemption fee for shares held less than 90 days.


Q:   What do you get when you combine the talents of two supremely successful international stock managers, a healthy corporate culture and a small, flexible fund?

A:   Artisan Global Equity.

The argument for considering ARTHX is really straightforward.  First, both managers have records that are both sustained and excellent.  Mr. Dargan managed, or co-managed, six funds, including two global funds, while at MFS.  Those included funds targeting both U.S. and non-U.S. investors.  While I don’t have a precise calculation, it’s clear he was managing more than $3 billion.  Mr. Yockey has famously managed two Artisan international funds since their inception, was once recognized as Morningstar’s International Fund Manager of the Year (1998).  For most trailing time periods, his funds have top 10% returns.  International Small Cap received Morningstar’s highest accolade when it was designated as the only “Gold” fund in its peer group while International was recognized as a “Silver” fund.  Based on head-to-head comparisons from 2001-2010, Mr. Yockey is really first rate and Mr. Dargan might be better.  (Being British, it’s almost certain that he has a cooler accent.)

Second, Artisan is a good steward.  The firm’s managers are divided into five teams, each with a distinctive philosophy and portfolio strategy.  The Global Equity team has four members (including Associate Portfolio Managers Charles Hamker and Andrew Euretig who also co-manage International Small Cap) and their discipline grows from the strategies first employed in ARTIX then extended to ARTJX.  Artisan has a very good record for lowering expenses, being risk conscious, opening funds only when they believe they have the capacity to be category-leaders (and almost all are) and closing funds before they’re bloated.

Third, ARTHX is nimble.  Its mandate is flexible: all sizes, all countries, any industry.  The fund’s direct investment in emerging markets is limited to 30% of the portfolio, but their pursuit of the world’s best companies leads them to firms whose income streams are more diverse than would be suggested by the names of the countries where they’re headquartered.  The managers note:

Though we have outsized exposure to Europe and undersized exposure to the U.S., we believe our relative country weights are of less significance since the companies we own in these developed economies continually expand their revenue bases across the globe.

Our portfolio remains centered around global industry leading companies with attractive valuations. This has led to a significant overweight position in the consumer sectors where many of our holdings benefit from significant exposure to the faster growth in emerging economies.

Since much of the world’s secular (enduring, long-term) growth is in the emerging markets, the portfolio is positioned to give them substantial exposure to it through their Europe and US-domiciled firms.  While the managers are experienced in handling billions, here they’re dealing with only $17 million.

The results are not surprising.  Morningstar believes that their analysts can identify those funds likely to serve their shareholders best; they do this by looking at a series of qualitative factors on top of pure performance.  When they find a fund that they believe has the potential to be consistently strong in the future, they can name it as a “Gold” fund.   Here are ARTHX’s returns since inception (the blue line) against all of Morningstar’s global Gold funds:

Artisan Global Equity versus gold funds

Not to say that the gap between Artisan and the other top funds is large and growing, but it is.

Bottom Line

Artisan Global Equity is an outstanding small fund for investors looking for exposure to many of the best firms from around the global.  The expenses are reasonable, the investment minimum is low and the manager is first-rate.  Which should be no surprise since two of the few funds keeping pace with Artisan Global Equity have names beginning with the same two words: Artisan Global Opportunities (ARTRX) and Artisan Global Value (ARTGX).

Fund website

Artisan Global Equity

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About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles. David lives in Davenport, Iowa, and spends an amazing amount of time ferrying his son, Will, to baseball tryouts, baseball lessons, baseball practices, baseball games … and social gatherings with young ladies who seem unnervingly interested in him.