The Capacity to Endure A R T I S A N P A R T N E R S The Evolution of Investing Artisan Partners Sustainable Emerging Markets Team LEADERSHIP | DIVERSITY | PASSION Gurpreet Pal Analyst Chen Gu, CFA Analyst Meagan Nace, CFA Analyst Maria Negrete-Gruson, CFA Portfolio Manager Jessica Lin, CFA Analyst Nicolas Rodriguez-Brizuela Analyst Artisan Partners Sustainable Emerging Markets Team Investment Results Average Annual Total Returns (% USD) as of 30 September 2021 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception Composite — Gross -9.08 -1.24 21.32 11.73 11.68 7.80 6.82 Composite — Net -9.32 -1.98 20.13 10.63 10.57 6.71 5.73 MSCI Emerging Markets Index -8.09 -1.25 18.20 8.58 9.23 6.08 5.91 Annual Returns (% USD) 12 months ended September 2017 2018 2019 2020 2021 Composite — Gross 26.19 -1.29 3.33 11.30 21.32 Source: Artisan Partners/MSCI. Returns for periods less than one year are not annualized. Composite inception: 1 July 2006. Past performance does not guarantee and is not a reliable indicator of future results. Current performance may be lower or higher than the performance shown. Composite performance has been presented in both gross and net of investment management fees. Investment Risk: Investments will rise and fall with market fluctuations and investor capital is at risk. Investors investing in investment vehicles denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. These risks, among others, are further described in the Important Disclosures section which should be read in conjunction with this material. Each member of the Artisan Partners Sustainable Emerging Markets Team is intimately familiar with emerging markets (EM) countries—growing up, studying, working or spending a significant of time in them. Witnessing EM’s evolution first-hand has fueled the team’s passion for seeking EM companies focused on enhancing long-term shareholder value while acting responsibly toward shareholders, employees and the local communities they serve. The team’s passion has translated into strategy success by investing in companies capable of growing through inevitable EM volatility with business models committed to profits and progress. The outcome: the Artisan Sustainable Emerging Markets Strategy’s 15-year anniversary and proof that sustainability is the capacity to endure. An Exceptional Combination of Experience, Continuity and Diversity
Transcript
The Capacity to Endure
A R T I S A N P A R T N E R S
The Evolution of Investing Artisan Partners Sustainable Emerging Markets Team
LEADERSHIP | DIVERSIT Y | PASSION
Gurpreet Pal Analyst
Chen Gu, CFA Analyst
Meagan Nace, CFA Analyst
Maria Negrete-Gruson, CFA Portfolio Manager
Jessica Lin, CFA Analyst
Nicolas Rodriguez-Brizuela Analyst
Artisan Partners Sustainable Emerging Markets Team
Investment Results Average Annual Total Returns
(% USD) as of 30 September 2021 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Source: Artisan Partners/MSCI. Returns for periods less than one year are not annualized. Composite inception: 1 July 2006.
Past performance does not guarantee and is not a reliable indicator of future results. Current performance may be lower or higher than the performance shown. Composite performance has been presented in both gross and net of investment management fees. Investment Risk: Investments will rise and fall with market fluctuations and investor capital is at risk. Investors investing in investment vehicles denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. These risks, among others, are further described in the Important Disclosures section which should be read in conjunction with this material.
Each member of the Artisan Partners Sustainable Emerging Markets Team is intimately familiar with emerging
markets (EM) countries—growing up, studying, working or spending a significant of time in them. Witnessing
EM’s evolution first-hand has fueled the team’s passion for seeking EM companies focused on enhancing
long-term shareholder value while acting responsibly toward shareholders, employees and the local
communities they serve. The team’s passion has translated into strategy success by investing in companies
capable of growing through inevitable EM volatility with business models committed to profits and progress.
The outcome: the Artisan Sustainable Emerging Markets Strategy’s 15-year anniversary and proof that
sustainability is the capacity to endure.
An Exceptional Combination of Experience, Continuity and Diversity
Tenured Management TeamThe natural boom and bust nature of the EM asset class makes the Sustainable Emerging Markets strategy’s
15-year anniversary a meaningful milestone. The strategy’s endurance and success is due in large part to a
couple of factors:
n The Artisan Partners Sustainable Emerging Markets Team’s long-term stability.
n Maria Negrete-Gruson has managed the strategy since inception; among similar strategies within
eVestment’s® Global Emerging Markets Equity category, only 15 portfolio managers have a longer
tenure managing a strategy since inception.1
n The Sustainable Emerging Markets team’s core members have been investing together in emerging
markets for more than 20 years.
n The team’s sole focus is on the Sustainable Emerging Markets strategy.
Maria and analysts Meagan Nace and Chen Gu formed an investment team in the aftermath of the
late-1990s Asian financial crisis. The decisions that caused the crisis and the subsequent financial market and
government responses shaped the team’s philosophy and process.
Since then the team has grown—adding cultural and cognitive diversity. Analysts Gurpreet Pal joined Artisan
Partners in 2011 and Nicolas Rodriguez-Brizuela and Jessica Lin started with the firm in 2014; Gurpreet Pal
and Nicolas Rodriguez-Brizuela also interned with the team. This history and experience have led to a high
degree of familiarity and comfort with the expertise and skill of its members.
DuPont Capital Artisan Partners Denotes Internship
1Source: Artisan Partners/eVestment, as of 30 Jun 2021. Excludes passive, index, regional, small-cap and quantitative strategies within eVestment’s® Global Emerging Markets Equity category. 2Gurpreet was an intern on the Artisan Sustainable Emerging Markets Team from June 2010 through August 2010.
T H E E VO LU T I O N O F I N V E S T I N G
A Consistent and Differentiated ApproachThe team navigates EM volatility by employing a consistent investment philosophy: identify companies with
sustainable competitive advantages and unique access to growth.
The strategy’s investment process incorporates extensive financial and strategic analysis, on-the-ground
management research, environmental, social and governance (ESG) considerations, and country risk analysis—all
combined with our team’s first-hand experience in emerging markets.
The team also holds a differentiated approach to sustainability:
n Seek companies with business models committed to profits and progress that can generate
sustainable earnings.
n Acknowledge the realities of EM and evaluate companies individually—with a focus on the long-term direction
and degree of change.
n Go deeper into ESG by assessing a company’s ability and commitment to bring continuity to shareholders,
employees, customers and communities.
n Reject negative screens and exclusion lists, which overlook positive change and forward-looking management.
Weighing Risk and OpportunitiesStarting with the Asian financial crisis and reinforced by years of EM investing experience, the strategy has been
managed with two core beliefs in mind:
n Emerging markets will provide growth in excess of developed markets over the long term.
n Boom-bust cycles are an inherent aspect of emerging markets investing.
During the past 15 years, the strategy has navigated a series of EM and global crises.
Exhibit 2: Navigating Emerging Market Crises
Dec
200
6
Jun
2007
Jun
2006
Dec
200
7
Jun
2008
Dec
200
8
Jun
2009
Dec
200
9
Jun
2010
Dec
201
0
Jun
2011
Dec
201
1
Jun
2012
Dec
201
2
Jun
2013
Dec
201
3
Jun
2014
Dec
201
4
Jun
2015
Dec
201
5
Jun
2016
Dec
201
6
Jun
2017
Dec
201
7
Jun
2018
Dec
201
8
Jun
2019
Dec
201
9
Jun
2020
Dec
202
0
Jun
2021
1,600
1,400
1,200
1,000
800
600
400
200
0
Global Financial Crisis Brazilian Economic Crisis
Turkish Currency &Debt Crisis
COVID-19 Pandemic
Chinese Market Turbulance
ArgentineMonetary Crisis
Arab Spring/Egyptian Revolution
Russian Financial Crisis
Russian Financial CrisisGreek Debt Crisis
MSC
I Em
ergi
ng M
arke
t Ind
ex
Source: Artisan Partners/MSCI. As of 30 Jun 2021. Past performance is not a reliable indicator of future results.
T H E E VO LU T I O N O F I N V E S T I N G
A Sustainable Strategy Across Market Environments The team believes its steps to evolve the investment process have
helped the strategy’s ability to fare favorably in various market
environments. Since 2014, the strategy has produced positive excess
returns each calendar year; only 15 of 572 strategies in the eVestment®
Global Emerging Markets Equity category duplicated that performance
against the MSCI Emerging Markets Index.2 The time period included
multiple shifts in EM equities—up and down performance, as well as
growth, value, quality and momentum driven markets.
The team relies on evolution and improvement, enhanced by its
experience, continuity and diversity, to be successful active managers.
And while the team’s investment philosophy has not changed, the
quantity and quality of information has enabled it to constantly evolve its
sustainability and country risk analysis. The strategy’s 15-year track record
is compelling evidence that balancing discipline and adaptability is an
effective way to compound assets in EM over the long term.
Success Requires Evolution and ImprovementWhile the team has maintained its core beliefs, philosophy and process, it also understands success over time requires
evolution and improvement.
The sustainability assessment was part of the investment process at inception but it has undergone meaningful
changes over the past 15 years. As the quantity and quality of ESG information has improved, so has the team’s ability
to assess information and use it to make target price adjustments.
More recent sustainability assessment changes include:
n In 2014, the team formalized a sustainability scoring process, comprising qualitative and quantitative components.
The qualitative component included eight governance items scored by analysts. The quantitative component used
monthly ESG reports and scores from a third-party provider.
n In 2018, the team transitioned from third-party ESG reports and scores to trend analysis based on RepRisk’s
incident-based data—frequency and severity of ESG transgressions based on the United Nation’s 17 Sustainable
Development Goals.
n In 2020, the team made its empirical component more comprehensive and uniform. The forward-looking empirical
component relies on analyst interviews and site visits, company filings and other independent ESG sources.
n In 2020, the team adopted the Sustainable Industry Classification System (SICS®) of sectors and industries. Company
classifications based on sustainability-related risks and opportunities are more relevant to the team’s view of the
investment universe and company analysis.
Updates have also been made to the team’s country risk analysis. EM countries are in different stages of economic,
social and political development, which have important implications for each company’s fundamentals. Since 2014,
the team has expanded the range of possible macroeconomic factors, enhanced the process to determine each
country’s most significant factors, implemented monthly updates and increased the maximum number of factors per
country. As a result, the team’s country risk model is more dynamic.
2Source: Artisan Partners/eVestment. As of 31 Mar 2021. Benchmark MSCI Emerging Market Index. Statistics based on Composite returns, gross of fees. Strategy percentile rank within the eVestment® Global Emerging Markets Equity category: 1-year (37%) out of (544) strategies; 5-year (24%) out of (446) strategies; 10-yr (58%) out of (252) strategies. Rankings based on gross of fees total return. Percentile ranking is based on a scale of one through one hundred with one being the highest ranking. Past performance is not a reliable indicator of future results.
Source: Artisan Partners/MSCI. As of 31 Dec 2020. Based on gross of fees returns for the Strategy Composite. Past performance is not a reliable indicator of future results.
Exhibit 3: Faring Well Across Different Market Environments
Sustainable Emerging Markets MSCI EM Growth MSCI EM Value
2015 2016 2017 2018 2019 2020
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
Calendar Year Excess Returns vs. MSCI EM Index
T H E E VO LU T I O N O F I N V E S T I N G
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Current and future portfolio holdings are subject to risk. A non-diversified portfolio may invest a larger portion of assets in securities of a smaller number of issuers and performance of a single issuer may affect overall portfolio performance greater than in a diversified portfolio. International investments involve special risks, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Such risks include new and rapidly changing political and economic structures, which may cause instability; underdeveloped securities markets; and higher likelihood of high levels of inflation, deflation or currency devaluations. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid and may have underperformed securities of large companies during some periods. Investments will rise and fall with market fluctuations and investor capital is at risk. Investors investing in strategies denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. These risks, among others, are further described in Artisan Partners’ Form ADV, which is available upon request.
This summary represents the views of the portfolio manager as of 30 Jun 2021. Those views and portfolio holdings are subject to change and Artisan Partners disclaims any obligation to advise investors of such changes. The discussion of portfolio holdings does not constitute a recommendation of any individual security.
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