ARTISAN PARTNERS FUNDS, INC. - RightProspectus

100 Pages·2016·0.57 MB·English

STATEMENT OF 2022
ADDITIONAL INFORMATION
1February2022,
asrevised
7November2022
Artisan Partners Funds
ShareClass
Investor Advisor Institutional
ArtisanDevelopingWorldFund ARTYX APDYX APHYX
ArtisanFloatingRateFund ARTUX APDUX APHUX
ArtisanFocusFund ARTTX APDTX APHTX
ArtisanGlobalDiscoveryFund APFDX APDDX APHDX
ArtisanGlobalEquityFund ARTHX APDHX APHHX
ArtisanGlobalOpportunitiesFund ARTRX APDRX APHRX
ArtisanGlobalValueFund ARTGX APDGX APHGX
ArtisanHighIncomeFund ARTFX APDFX APHFX
ArtisanInternationalFund ARTIX APDIX APHIX
ArtisanInternationalSmall-MidFund ARTJX APDJX APHJX
ArtisanInternationalValueFund ARTKX APDKX APHKX
ArtisanMidCapFund ARTMX APDMX APHMX
ArtisanMidCapValueFund ARTQX APDQX APHQX
ArtisanSelectEquityFund ARTNX APDNX APHNX
ArtisanSmallCapFund ARTSX APDSX APHSX
ArtisanSustainableEmergingMarketsFund ARTZX — APHEX
ArtisanValueFund ARTLX APDLX APHLX
StatementofAdditionalInformation
1February2022,asrevised7November2022
Artisan Developing World Fund, Artisan Floating Rate Fund, Artisan Focus Fund, Artisan Global
DiscoveryFund,ArtisanGlobalEquityFund,ArtisanGlobalOpportunitiesFund,ArtisanGlobalValue
Fund,ArtisanHighIncomeFund,ArtisanInternationalFund,ArtisanInternationalSmall-MidFund,
ArtisanInternationalValueFund,ArtisanMidCapFund,ArtisanMidCapValueFund,ArtisanSelect
EquityFund,ArtisanSmallCapFund,ArtisanSustainableEmergingMarketsFundandArtisanValue
Fund (each, a “Fund” and, together, the “Funds”) are series of Artisan Partners Funds, Inc.
(“Artisan Partners Funds”). This Statement of Additional Information (“SAI”) is not a prospectus. It
shouldbereadinconjunctionwiththeprospectusoftheFundsdated1February2022,asrevised7
November 2022 and any supplement or amendment to the prospectus. The Funds’ financial
statementsforthefiscalyearended30September2021,includingthenotestheretoandthereport
ofErnst&YoungLLPthereon,areincorporatedhereinbyreferencefromtheFunds’annualreportsto
shareholders.Acopyoftheprospectusandtheannualandsemiannualreportstoshareholderscan
be obtained without charge by calling 800.344.1770, by writing to Artisan Partners Funds,
P.O. Box 219322, Kansas City, MO 64121-9322, or by accessing Artisan Partners Funds’website at
www.artisanpartners.com.
TableofContents
InformationabouttheFundsandArtisanPartners ............................................... 2
InvestmentObjectivesandPolicies.............................................................. 2
InvestmentTechniquesandRisks................................................................ 2
InvestmentRestrictions .........................................................................27
Organization....................................................................................29
DirectorsandOfficers...........................................................................29
PortfolioManagers..............................................................................37
PotentialConflictsofInterest....................................................................40
ControlPersonsandPrincipalShareholders......................................................44
InvestmentAdvisoryServices....................................................................49
CodeofEthics ..................................................................................52
Distributor......................................................................................52
PortfolioTransactions ...........................................................................53
ProxyVoting....................................................................................56
DisclosureofPortfolioHoldings .................................................................58
Purchasing,ExchangingandRedeemingShares .................................................59
AdditionalFederalIncomeTaxInformation ......................................................61
Custodians......................................................................................67
TransferAgent..................................................................................68
LegalCounsel...................................................................................68
IndependentRegisteredPublicAccountingFirm.................................................68
FinancialStatements............................................................................68
StatementofAdditionalInformation—ArtisanPartnersFunds
InformationabouttheFundsandArtisanPartners
EachFundisaseriesofArtisanPartnersFunds.ArtisanPartnersLimitedPartnership(“ArtisanPartners”)providesinvestmentadvisoryservices
totheFunds.
ThediscussionbelowsupplementsthedescriptionintheprospectusofeachFund’sinvestmentobjectives,policiesandrestrictions.
InvestmentObjectivesandPolicies
TheinvestmentobjectiveofeachFundmaybechangedbytheboardofdirectorswithouttheapprovalofshareholders.However,investors
inaFundwillreceiveatleast30days’priorwrittennoticeofimplementationofanychangeinaFund’sinvestmentobjective.
InvestmentTechniquesandRisks
ForeignSecurities
EachFundcaninvestinsecuritiesofnon-UScompanies.ArtisanMidCapValueFundandArtisanSmallCapFundcanonlyinvestinsecurities
of non-US companies that trade in the US. For the purposes of testing compliance with each Fund’s investment restrictions related to
investing in non-US companies, Artisan Partners generally considers an issuer to be from a particular country as designated by
ArtisanPartners’securitiesinformationvendors,whichmaychangefromtimetotime.However,eachinvestmentteam,initsownjudgment,
mayconsideranissuertobefromacountryotherthanthecountrydesignatedbythesecuritiesinformationvendors.Therefore,classifications
maydifferbyFundandinvestmentteam.Indeterminingthecountrydesignationsofissuers,eachinvestmentteamand/orArtisanPartners’
vendorsmayusearangeofcriteria,includingtheidentityofthejurisdictionoftheissuer’sincorporation,themainequitytradingmarketfor
theissuer’ssecurities,thegeographicaldistributionoftheissuer’soperations,thelocationoftheissuer’sheadquartersorothercriteria,such
as the source of a company’s revenues. Over time, country designations may change. As a result of this classification, a Fund may hold
securitiesofissuersclassifiedasUS,butwhichareorganizedoutsidetheUSor,viceversa,aFundmayholdsecuritiesofissuersclassifiedas
non-US,butwhichareorganizedintheUSand/ortradeintheUS.Inaddition,thecountryandregionalclassificationsshownintheFunds’
shareholderreports,financialstatementsandotherreportsmaydifferfromtheclassificationsusedforpurposesoftestingcompliancewitha
Fund’sinvestmentrestrictions.
Securities of non-US companies include American Depositary Receipts (“ADRs”), NewYork Shares, European Depositary Receipts (“EDRs”),
ContinentalDepositaryReceipts(“CDRs”),GlobalDepositaryReceipts(“GDRs”),orothersecuritiesrepresentingunderlyingsharesofforeign
issuers. ADRs, New York Shares, EDRs, CDRs and GDRs are receipts, typically issued by a financial institution (a“depositary”), evidencing
ownershipinterestsinasecurityorpoolofsecuritiesissuedbyanissueranddepositedwiththedepositary.ADRs,EDRs,CDRsandGDRsmay
be available for investment through“sponsored”or“unsponsored”facilities. A sponsored facility is established jointly by the issuer of the
securityunderlyingthereceiptandadepositary,whereasanunsponsoredfacilitymaybeestablishedbyadepositarywithoutparticipationby
theissuerofthereceipt’sunderlyingsecurity.TheFundsmayinvestinsponsoredorunsponsoredADRs,EDRs,CDRs,GDRsorotherformsof
depositaryreceipts,certainofwhichmayincludevotingrightswithrespecttotheunderlyingforeignshares,andcertainofwhichmaynot.
With respect to portfolio securities that are issued by foreign issuers or denominated in foreign currencies (including, among others,
participationcertificatesanddepositaryreceipts),aFund’sinvestmentperformanceisaffectedbythestrengthorweaknessoftheUSdollar
againstthesecurrencies.Forexample,ifthedollarfallsinvaluerelativetotheJapaneseyen,thedollarvalueofayen-denominatedstockheld
intheportfoliowillriseeventhoughthepriceofthestockremainsunchanged.Conversely,ifthedollarrisesinvaluerelativetotheyen,the
dollarvalueoftheyen-denominatedstockwillfall.(Seediscussionoftransactionhedgingandportfoliohedgingunder“ManagingInvestment
Exposure.”)
Investors should understand and consider carefully the risks involved in foreign investing, including the risks of transacting on foreign
exchangesorwithforeignclearinghouses.Investinginforeignsecurities(includingthroughpositionsdenominatedinforeigncurrenciesor
dollar-denominatedsecuritiesorotherinstrumentsthatexposetheFundtoforeignsecuritiesorcurrencies)andutilizationofforwardforeign
currencyexchangecontractsinvolvecertainconsiderationscomprisingbothrisksandopportunitiesnottypicallyassociatedwithinvestingin
US securities.These considerations include fluctuations in exchange rates of foreign currencies; possible imposition of exchange control
regulationorcurrencyrestrictionsthatwouldpreventcashfrombeingbroughtbacktotheUS;lesspublicinformationwithrespecttoissuers
of securities; less governmental supervision of stock exchanges, securities brokers and issuers of securities; lack of uniform accounting,
auditing,financialreportinganddisclosurestandards;lackofuniformsettlementperiodsandtradingpractices;lessliquidityandfrequently
greaterpricevolatilityinforeignmarketsthanintheUS;possibleimpositionofforeigntaxes;andsometimeslessadvantageousoruncertain
legal,operationalandfinancialprotectionsapplicabletoforeignsub-custodialarrangementsandinvestmentsthroughcomplexstructures
thatmaylacktransparency.
There is the possibility of expropriation or confiscatory taxation, seizure or nationalization of foreign bank deposits or other assets,
establishment of exchange controls, the adoption of foreign government restrictions, or other adverse political, social or diplomatic
developmentsthatcouldaffectinternationalinvestments.Forexample,continuinguncertaintyastothestatusoftheEuroandtheEuropean
MonetaryUnion(“EMU”)andthepotentialforcertaincountriestowithdrawfromtheinstitutionhascreatedvolatilityincurrencyandfinancial
markets.TheUnitedKingdomapprovedareferendumtowithdrawfromtheEU(commonlyreferredtoas“Brexit”)inJune2016.InMarch2017,
theBritishgovernmentformallynotifiedtheEUofthecountry’sintentiontowithdrawfromtheEU.Thewithdrawalagreementbetweenthe
StatementofAdditionalInformation—ArtisanPartnersFunds 2
UnitedKingdomandtheEUtookeffecton31January2020,atwhichtimetheUnitedKingdomceasedtobeamemberoftheEU.On1
January2021,theEU-UKTradeandCooperationAgreement,abilateraltradeandcooperationdealgoverningthefuturerelationshipbetween
theUnitedKingdomandtheEU,provisionallywentintoeffect.TheUnitedKingdom'sParliamenthasalreadyratifiedtheagreement,butthe
agreementwillcontinuetobeappliedprovisionallyuntilitisformallyratifiedbytheEUParliament.TheUnitedKingdom’sdeparturefromthe
EUmayresultinasustainedperiodofmarketuncertainty,asnewtradeandotheragreementsbetweentheUnitedKingdomandtheEUtake
effect.TheUnitedKingdom’sdeparturefromtheEUmayalsodestabilizesomeoralloftheotherEUmembercountriesand/ortheEurozone.
ThesedevelopmentscouldresultinlossestoaFund,astheremaybenegativeeffectsonthevalueoftheFund’sinvestmentsand/oronthe
Fund’sabilitytoenterintocertaintransactionsorvaluecertaininvestments,andthesedevelopmentsmaymakeitmoredifficultforaFundto
exit certain investments at an advantageous time or price. As a further example, certain investments by a Fund that involve a business
connectedwithorrelatedtonationalsecurity(including,withoutlimitation,criticaltechnology,criticalinfrastructure,orsensitivedata)may
besubjecttoreviewandapprovalbytheCommitteeonForeignInvestmentintheUnitedStates(“CFIUS”)and/ornon-USnationalsecurity/
investment clearance regulators. In the event that CFIUS or another regulator reviews one or more of a Fund's proposed or existing
investments,itispossiblethatCFIUSoranotherregulatorwillseektodirectlyorindirectlyimposelimitationsonorprohibitoneormoreofthe
Fund'sinvestmentsorunwindatransaction.SuchlimitationsorrestrictionsmaypreventaFundfrompursuingcertaininvestments,cause
delays with respect to consummating such investments, or require the Fund to consummate an investment on terms that are less
advantageousthanwouldbethecaseabsentsuchrestrictions.WhereaFundisrequiredtounwindatransaction,inadditiontoincurring
additionallegal,administrative,andothercosts,theFundmayhavetodisposeoftheinvestmentatapricethatislessthanitwouldhave
received had the Fund exited at a different time or under different circumstances. Any of these outcomes could adversely affect a Fund's
performance.
Income, gains and proceeds from non-US securities held by a Fund could be reduced by taxes withheld from that income, gains and
proceeds,orothertaxesthatmaybeimposedbythecountriesinwhichtheFundinvests.Thenetassetvalue(“NAV”)ofaFundalsomaybe
affectedbychangesintheratesormethodsoftaxationapplicabletotheFundortoentitiesinwhichtheFundhasinvested.
Emerging, Less Developed and Developing Markets. Each Fund may invest in securities of companies in emerging, less developed and
developing markets, including companies domiciled in frontier markets. Artisan Partners considers emerging and less developed markets
(“emergingmarkets”)tobethosemarketsinanycountryotherthanCanada,Luxembourg,theUSandthecountriescomprisingtheMSCIEAFE
Index(currently,Australia,Austria,Belgium,Denmark,Finland,France,Germany,HongKong,Ireland,Israel,Italy,Japan,theNetherlands,New
Zealand,Norway,Portugal,Singapore,Spain,Sweden,SwitzerlandandtheUnitedKingdom).“Frontiermarkets”areasubsetofemergingand
lessdevelopedmarketsthat,generally,havesmallereconomiesandlessmaturecapitalmarkets.ArtisanDevelopingWorldFund’sinvestment
teamgenerallyconsidersdevelopingworldtoincludecountriesthatareincludedinanyoneoftheMSCIemergingorfrontiermarketsindices,
or that are classified under a similar corresponding classification, by organizations such as the World Bank, United Nations, International
Finance Corporation or the International Monetary Fund. For purposes of the Fund’s investments, a determination that an issuer is
economicallytiedtooneormoremarketsinthedevelopingworldisbasedonfactorsincluding,butnotlimitedto,geographiclocationofits
primary trading markets, location of its assets, its domicile or its principal offices, the source of its revenues and/or whether the issuer is
indirectlyexposedtotherisksoreconomicfortunesofadevelopingmarket.
Investments in emerging and developing markets’securities involve special risks in addition to those generally associated with foreign
investing.Manyinvestmentsinemerginganddevelopingmarketscanbeconsideredspeculative,andthevalueofthoseinvestmentscanbe
more volatile than investments in more developed foreign markets. This difference reflects the greater uncertainties of investing in less
establishedmarketsandeconomies.Costsassociatedwithtransactionsinemerginganddevelopingmarkets’securitiestypicallyarehigher
thancostsassociatedwithtransactionsinUSsecurities.Suchtransactionsalsomayinvolveadditionalcostsforthepurchaseorsaleofforeign
currency.
Investinginemerginganddevelopingmarketcountriesinvolvessubstantialriskdueto,amongotherreasons,limitedinformation;higher
brokeragecosts;differentaccounting,auditingandfinancialreportingstandards;lessdevelopedlegalsystemsandthinnertradingmarketsas
comparedtothoseindevelopedcountries;andcurrencyblockagesortransferrestrictions.Incertainfrontierandemergingmarkets,fraud
and corruption may be more prevalent than in developed market countries. In addition, securities markets of emerging and developing
marketcountriesmaybesubstantiallysmaller,lessdeveloped,lessliquidandmorevolatilethanthemajorsecuritiesmarketsintheUSand
other developed nations. The limited size of many securities markets in emerging and developing market countries and limited trading
volumeinissuerscomparedtothevolumeinUSsecuritiesorsecuritiesofissuersinotherdevelopedcountriescouldcausepricestobeerratic
forreasonsotherthanfactorsthataffectthequalityofthesecurities.Inaddition,emerginganddevelopingmarketcountries’exchangesand
broker-dealersmaygenerallybesubjecttolessregulationthantheircounterpartsindevelopedcountries.Suchrisksmaybegreaterinfrontier
markets.Brokeragecommissionsanddealermark-ups,custodialexpensesandothertransactioncostsaregenerallyhigherinemergingand
developingmarketcountriesthanindevelopedcountries,allofwhichcanincreasefundoperatingexpensesand/orcreateadragonfund
performance.
EmerginganddevelopingmarketcountriesmayhavedifferentclearanceandsettlementproceduresthanintheUS,andincertainmarkets
there may be times when settlements fail to keep pace with the volume of securities transactions, making it difficult to conduct such
transactions.Further,satisfactorycustodialservicesforinvestmentsecuritiesmaynotbeavailableinsomeemerginganddevelopingmarket
countries, which may result in additional costs and delays in trading and settlement. The inability of a Fund to make intended security
StatementofAdditionalInformation—ArtisanPartnersFunds 3
purchasesduetosettlementproblemsortheriskofintermediaryorcounterpartyfailurescouldcauseaFundtomissattractiveinvestment
opportunities. The inability to dispose of a portfolio security due to settlement problems could result either in losses to a Fund due to
subsequentdeclinesinthevalueofsuchportfoliosecurityor,iftheFundhasenteredintoacontracttosellthesecurity,inpossibleliabilityto
thepurchaser.
The Funds may invest in some emerging and developing markets through trading structures or protocols that subject them to the risks
describedabove(suchasrisksassociatedwithilliquidity,custodyingassets,differentsettlementandclearanceprocedures,assertinglegaltitle
underadevelopinglegalandregulatoryregimeandotherrisks)toagreaterdegreethanindevelopedmarketsoreveninotheremergingand
developing markets. For example, some of the markets in which a Fund may invest do not provide for settlement on a delivery versus
paymentbasisandtheriskinrelationtosuchsettlementsarebornebytheFund.
Certain foreign markets (including certain emerging and developing markets) may require governmental approval for the repatriation of
investmentincome,capitalortheproceedsofsalesofsecuritiesbyforeigninvestors.AFundcouldbeadverselyaffectedbydelaysin,ora
refusaltogrant,requiredgovernmentalapprovalforrepatriationofcapital,aswellasbytheapplicationtotheFundofanyrestrictionson
investments.
Manyemerginganddevelopingmarketshaveexperiencedsubstantialratesofinflationforextendedperiods.Inflationandrapidfluctuations
in inflation rates have had and may continue to have adverse effects on the economies and securities markets of certain emerging and
developingmarketcountries.Inanattempttocontrolinflation,certainemerginganddevelopingmarketcountrieshaveimposedwageand
pricecontrols.Someofthosecountries,inrecentyears,havebeguntocontrolinflationthrougheconomicpolicies.
Governmentsofmanyemerginganddevelopingmarketcountrieshaveexercisedandcontinuetoexercisesubstantialinfluenceovermany
aspects of the private sector through ownership or control of many companies. The future actions of those governments could have a
significanteffectoneconomicconditionsinemerginganddevelopingmarkets,whichinturn,mayadverselyaffectcompaniesintheprivate
sector,generalmarketconditionsandpricesandyieldsofcertainofthesecuritiesinaFund’sportfolio.Expropriation,confiscatorytaxation,
nationalization and political, economic and social instability have occurred throughout the history of certain emerging and developing
marketcountriesandcouldadverselyaffectFundassetsshouldanyofthoseconditionsrecur.Inaddition,highlevelsofnationaldebttendto
makeemerginganddevelopingmarketsheavilyreliantonforeigncapitaland,therefore,vulnerabletocapitalflight.
China-RelatedInvestments.TheFundsmayinvestincertaineligibleChinesesecurities(“ChinaAShares”)listedandtradedontheShanghai
StockExchange(“SSE”)andShenzhenStockExchangethroughstockconnectprograms(each,a“StockConnect”).TheStockConnectsare
securitiestradingandclearingprogramsfortheestablishmentofmutualmarketaccessbetweenmarkets.TheStockConnectsaresubjectto
regulationspromulgatedbyregulatoryauthoritiesforeachmarketandfurtherregulationsorrestrictions,suchastradingsuspensions,may
adverselyaffecttheStockConnectsandthevalueoftheChinaASharesheldbytheFunds.Thereisnoguaranteethatthesystemsrequiredto
operate a Stock Connect will function properly or that exchanges will continue to support Stock Connects in the future.While the Stock
Connects may not currently be subject to individual investment quotas, daily and aggregate investment quotas generally apply to all
participantsonStockConnectsona“netbuy”basis,whichmayrestrictorprecludeaFund’sabilitytoinvestinsecuritiestradedthroughthe
StockConnectsonatimelybasisoratallonanygivenday.Inaddition,suchsecuritiesgenerallymaynotbesold,purchasedorotherwise
transferredotherthanthroughtheapplicableStockConnectinaccordancewiththeprogram’srules,whichmayfurthersubjecttheFundsto
liquidityriskwithrespecttoChinaAShares.AFundmayberestrictedinitsabilitytodisposeofitsChinaASharespurchasedthroughStock
Connectinatimelymanner.Asanexample,theStockConnectsaregenerallyavailableonlyonbusinessdayswhenbothmarketsareopen.
Wheneithermarketisclosed,aFundwillnotbeabletotradesecuritiesonthatStockConnectatatimethatmayotherwisebebeneficialto
trade.BecauseofthewayinwhichChinaASharesareheldinaStockConnect,aFundmaynotbeabletoexercisetherightsofashareholder
andmaybelimitedinitsabilitytopursueclaimsagainsttheissuerofasecurity,andmaysufferlossesintheeventthedepositoryoftheStock
Connectbecomesinsolvent.ThelimitationsandrisksdescribedabovewithrespecttotheStockConnectsarespecifictothoseprograms;
however, these and other risks may exist to varying degrees in connection with the Funds’investments through other trading structures,
protocolsandplatformsinotheremerginganddevelopingmarkets.
InadditiontoinvestingthroughaStockConnect,theFundsmayalsoinvestinChinaASharesthroughaQualifiedForeignInvestor(“QFI”)
arrangement.ArtisanPartnershasappliedforandreceivedaQFIlicensefromtheChinaSecuritiesRegulatoryCommission.ArtisanPartnersis
permittedtoinvestdirectlyinChinaASharesdenominatedinChineserenminbiorothercurrencies,onbehalfofclientswhoseportfolios
Artisan Partners manages, including the Funds. Under Chinese law, Artisan Partners, as holder of the QFI license, is required to maintain
custodyofChinaAShareassetsheldaspartoftheQFIlicensewithalocalcustodianinArtisanPartners’nameforthebenefitoftheapplicable
Fund,andtheFundbearsthecostsofmaintainingitssub-accountonthebooksandrecordsoftheChinesecustodian.ArtisanPartners'ability
toinvestinChinaASharesthroughaQFIarrangementonbehalfoftheFundsissubjecttotheapplicableChineselaws,rulesandregulations,
includingrelatingto,withoutlimitation,restrictionsoninvestmentandrepatriationofprincipalandprofits.Theinvestmentregulationsunder
which the Funds would invest in the China A Shares market are relatively new. In addition, the application and interpretation of these
regulationsisoftenunclearandthereisnocertaintyastohowtheywillbeapplied.
CertainoftheFundsmayinvestinonshoreChinabondsthroughaChinaInterbankBondMarket("CIBM")registration.CIBMisanover-the-
counter market outside the two main stock exchanges in China through which institutional investors (including domestic institutional
investorsbutalsoQFIs,aswellasotheroffshoreinstitutionalinvestors,subjecttoauthorization)tradecertaindebtinstrumentsonaone-to-
StatementofAdditionalInformation—ArtisanPartnersFunds 4
onequote-drivenbasis.MarketvolatilityandpotentiallackofliquidityduetolowtradingvolumeofcertaindebtsecuritiesinCIBMmayresult
inpricesofcertaindebtsecuritiestradedonsuchmarketfluctuatingsignificantly.Thebidandofferspreadsofthepricesofsuchsecurities
may be large, and the fund may therefore incur significant trading, settlement and realization costs and may face counterparty default,
liquidity,andvolatilityrisks,resultinginsignificantlossesforthefundsandtheirinvestors.
TotheextentaFundinvestsinsecuritiesofChineseissuers,itmayalsobesubjecttocertainrisksandconsiderationsnottypicallyassociated
withinvestinginsecuritiesofUSissuersandpotentiallytoagreaterextentthaninvestmentsincertainothernon-USissuers,including,among
others,morefrequenttradingsuspensions,limitsontheuseofbrokersandonforeignownership,variableinterestentities(“VIEs”)risks(see
below),higherdependenceonexportsandinternationaltradeandpotentialforincreasedtradetariffs,embargoesandothertradelimitations.
USorforeigngovernmentsanctionsorothergovernmentsinterventionscouldprecludeaFundfrommakingcertaininvestmentsinChinaor
resultinaFundsellinginvestmentsinChinaatdisadvantageoustimesorprices.SignificantportionsoftheChinesesecuritiesmarketsmay
becomerapidlyilliquid,asChineseissuershavetheabilitytosuspendthetradingoftheirequitysecurities,andhaveshownawillingnessto
exercisethatoptioninresponsetomarketvolatilityandotherevents.
InChina,foreignownershipofChinesecompaniesincertainsectors(includingbyUSpersonsandentities,inclusiveofUSmutualfunds)is
prohibited.Inordertofacilitateforeigninvestment,manyChinesecompanieshaveestablishedshellcompaniesthatenterintocontractual
arrangementswithChineseVIEsthatallowforeigninvestors,suchascertainoftheFunds,throughtheuseofcontractualarrangements,to
both exert a degree of influence and to obtain substantially all of the economic benefits arising from a company without formal legal
ownership. Although VIEs are a longstanding industry practice and well known to Chinese officials and regulators, they are not formally
recognizedunderChineselaw.IftheChinesecompanies(ortheirofficers,directors,orChineseequityholders)breachedtheircontractsorif
Chineseofficialsand/orregulatorswithdrawtheirimplicitacceptanceoftheVIEstructureorifnewlaws,rulesorregulationsrelatingtoVIE
structuresareadopted,USinvestors,includingFundsthatinvestdirectlyorindirectlyinVIEs,couldsuffersubstantial,detrimental,andpossibly
permanentlosseswithlittleornorecourseavailable.Insuchcases,aFund’snetassetvalueand/orreturnsmaybenegativelyaffected.In
addition,totheextentthataFundinvestsdirectlyorindirectlyinVIEs,itonlyhasspecificrightsprovidedforintheagreementscreatingthe
VIEstructure,theabilitytoinfluencetheactivitiesoftheChinesecompanyarelimitedandtheChinesecompanymayengageinactivitiesthat
negatively impact investment value.VIE structures do not offer the same level of investor protections as direct ownership. Investors may
experiencelossesifVIEstructuresarealteredordisputesemergeovercontroloftheVIE.
Privatizations.Somegovernmentshavebeenengagedinprogramsofsellingpartoralloftheirinterestsingovernmentownedorcontrolled
enterprises(“Privatizations”).EachFundthatmayinvestinfixedincomesecuritiesmayinvestinPrivatizations.Incertaincountries,theability
ofaUSentitysuchasaFundtoparticipateinPrivatizationsmaybelimitedbylocallaw,and/orthetermsonwhichaFundmaybepermitted
toparticipatemaybelessadvantageousthanthoseaffordedlocalinvestors.Therecanbenoassurancethatgovernmentswillcontinuetosell
theirinterestsincompaniescurrentlyownedorcontrolledbythemorthatPrivatizationprogramswillbesuccessful.
RussianConflictRisk.Russia’smilitaryinvasionofUkraineinFebruary2022,theresultingresponsesbytheUSandothercountries,andthe
potential for wider conflict could increase volatility and uncertainty in global financial markets and adversely affect regional and global
economies.The US and other countries have imposed broad-ranging economic sanctions on Russia, certain Russian individuals, banking
entitiesandcorporations,andBelarusasaresponsetoRussia’sinvasionofUkraine,andmayimposesanctionsonothercountriesthatprovide
militaryoreconomicsupporttoRussia.Thesesanctionsmaycause,amongotherthings,thecontinueddevaluationoftheruble,adowngrade
inthecountry'screditrating,and/oradeclineinthevalueandliquidityofRussiansecurities,propertyorinterests.Thesesanctionscouldalso
resultintheimmediatefreezeofRussiansecuritiesand/orfundsinvestedinprohibitedassets,andmayimpairtheabilityofaFundtobuy,sell,
receiveordeliverthosesecuritiesand/orassets.
The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or
countermeasures that may be taken by those subject to sanctions, including cyber attacks) are impossible to predict, but could result in
significantmarketdisruptions,includingincertainindustriesorsectors,suchastheoilandnaturalgasmarkets,andmaynegativelyaffect
globalsupplychains,inflationandglobalgrowth.InadditionthepriceandliquidityoffuturesinwhichaFundinvestsmayfluctuatewidelyas
aresultoftheconflictandrelatedevents.Theseandanyrelatedeventscouldadverselyaffectglobalfinancialandenergymarketsandthereby
negativelyaffectthevalueofaFund'sinvestmentsbeyondanydirectexposuretoRussianissuersorissuersinothercountriesdirectlyaffected
bytheinvasion.
ForeignSovereignDebt.EachFundthatmayinvestinfixedincomesecuritiesmayinvestinsovereigndebtsecurities,whichareissuedor
guaranteedbyforeigngovernmentalentities.Investmentinsovereigndebtcaninvolveahighdegreeofrisk.Thegovernmentalentitythat
controlstherepaymentofsovereigndebtmaynotbeableorwillingtorepaytheprincipaland/orinterestwhendueinaccordancewiththe
termsofsuchdebt.Agovernmentalentity’swillingnessorabilitytorepayprincipalandinterestdueinatimelymannermaybeaffectedby,
among other factors, its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a
payment is due, the relative size of the debt service burden to the economy as a whole, the governmental entity’s policy towards the
InternationalMonetaryFund,andthepoliticalconstraintstowhichagovernmentalentitymaybesubject.Governmentalentitiesmayalsobe
dependentonexpecteddisbursementsfromforeigngovernments,multilateralagenciesandothersabroadtoreduceprincipalandinterest
arrearages on their debt.The commitment on the part of these governments, agencies and others to make such disbursements may be
conditionedonagovernmentalentity’simplementationofeconomicreformsand/oreconomicperformanceandthetimelyserviceofsuch
debtor’sobligations.Failuretoimplementsuchreforms,achievesuchlevelsofeconomicperformanceorrepayprincipalorinterestwhendue
StatementofAdditionalInformation—ArtisanPartnersFunds 5
mayresultinthecancellationofsuchthirdparties’commitmentstolendfundstothegovernmentalentity,whichmayfurtherimpairsuch
debtor’sabilityorwillingnesstoserviceitsdebtsinatimelymanner.Consequently,governmentalentitiesmaydefaultontheirsovereigndebt.
Holdersofsovereigndebtmayberequestedtoparticipateinthereschedulingofsuchdebtandtoextendfurtherloanstogovernmental
entities.Thereisnobankruptcyproceedingbywhichsovereigndebtonwhichgovernmentalentitieshavedefaultedmaybecollectedin
wholeorinpart.
ParticipationCertificates
Each Fund, except Artisan Mid Cap Value Fund and Artisan Small Cap Fund, may invest in equity-linked securities (called“participation
certificates”inthisSAIbutmaybecalleddifferentnamesbyissuers).Inatypicaltransaction,aFundwouldbuyaparticipationcertificatefrom
abankorbroker-dealer(“counterparty”)thatwouldentitlethatFundtoareturnmeasuredbythechangeinvalueofanidentifiedunderlying
security.1Thepurchasepriceoftheparticipationcertificateisbasedonthemarketpriceoftheunderlyingsecurityatthetimeofpurchase
convertedintoUSdollars,plustransactioncosts.Thecounterpartymay,butisnotrequiredto,purchasethesharesoftheunderlyingsecurity
tohedgeitsobligation.WhentheparticipationcertificateexpiresoraFundexercisestheparticipationcertificateandclosesitsposition,that
Fund receives a payment that is based upon the then-current value of the underlying security converted into US dollars (less transaction
costs).
Theprice,performanceandliquidityoftheparticipationcertificatearealllinkeddirectlytotheunderlyingsecurity.AFund’sabilitytoredeem
or exercise a participation certificate generally is dependent on the liquidity in the local trading market for the security underlying the
participation certificate. Participation certificates are typically privately placed securities that have not been registered for sale under the
Securities Act of 1933, as amended (the“1933 Act”). Pursuant to Rule 144A under the 1933 Act, participation certificates are eligible for
purchaseorsaletocertainqualifiedinstitutionalbuyersbutarenottypicallytraded.
There are additional risks associated with participation certificates. If a Fund invests in a participation certificate, it will bear the full
counterpartyriskwithrespecttotheissuingcounterparty.Counterpartyriskinthiscontextistheriskthattheissuingcounterpartywillnot
fulfillitscontractualobligationtotimelypayaFundtheamountowedundertheparticipationcertificate.AFundattemptstomitigatethatrisk
bypurchasingonlyfromissuerswithinvestmentgradecreditratings.Aparticipationcertificateisageneralunsecuredcontractualobligation
oftheissuingcounterparty.AFundtypicallyhasnorightsunderaparticipationcertificateagainsttheissuerofthesecuritiesunderlyingthe
participationcertificateandisthereforetypicallyunabletoexerciseanyrightswithrespecttotheissuer(including,withoutlimitation,voting
rightsandfraudorbankruptcyclaims).Thereisalsonoassurancethattherewillbeasecondarytradingmarketforaparticipationcertificate
orthatthetradingpriceofaparticipationcertificatewillequalthevalueoftheunderlyingsecurity.Participationcertificatesalsomayhavea
longersettlementperiodthantheunderlyingsharesandduringthattimeaFund’sassetscouldnotbedeployedelsewhere.Theissuersof
participation certificates may be deemed to be broker-dealers or engaged in the business of underwriting as defined in the Investment
Company Act of 1940, as amended (the“1940 Act”). As a result, a Fund’s investment in participation certificates issued by a particular
institutionmaybelimitedbycertaininvestmentrestrictionscontainedinthe1940Act.Forthepurposesofdeterminingcompliancewitha
Fund’slimitationsoninvestingincertainmarkets,regions,securitiesorindustries,eachFundlooksthroughtheparticipationcertificatetothe
issueroftheunderlyingsecurity.
FixedIncomeSecurities
Artisan DevelopingWorld Fund, Artisan Focus Fund, Artisan GlobalValue Fund, Artisan International Small-Mid Fund, Artisan International
Value Fund, Artisan Select Equity Fund and Artisan Value Fund may invest in corporate bonds, notes and debentures of long and short
maturitiesandofvariouscreditqualities,includingunratedsecurities.ArtisanFloatingRateFundandArtisanHighIncomeFundmayinvestin
abroadrangeoffixedincomesecurities,includinghighyieldcorporatebonds,loansandothercorporatefixedincomeinstrumentsofvarying
maturities, including fixed-, variable- and floating-rate bonds, debentures, notes, commercial paper and other types of corporate debt
instrumentsacrossthecreditqualityspectrum,suchasconvertibledebtsecuritiesandstressedanddistresseddebtsecurities,aswellascredit
defaultswapsandotherderivativesrelatedto,referencingorwithsimilareconomiccharacteristicstocorporatefixedincomesecurities.The
Fundsnotedabovemayinvestinfixedincomesecuritiesacrossthecreditqualityspectrum,includinghighyieldfixedincomesecurities(i.e.,
“junk”bonds)(see“JunkBondSecurities”below).Fixedincomesecuritiesincludeabroadarrayofshort-,medium-,andlong-termobligations
issuedbytheUSorforeigngovernments,governmentorinternationalagenciesandinstrumentalities,andcorporateandprivateissuersof
varioustypes.Thematuritydateisthedateonwhichafixedincomesecuritymatures.Thisisthedateonwhichtheborrowermustpayback
theborrowedamount,whichisknownastheprincipal.Somefixedincomesecuritiesrepresentuncollateralizedobligationsoftheirissuers;in
othercases,thesecuritiesmaybebackedbyspecificassets(suchasmortgagesorotherreceivables)thathavebeensetasideascollateralfor
theissuer’sobligation.Fixedincomesecuritiesgenerallyinvolveanobligationoftheissuertopayinterestordividendsoneitheracurrent
basisoratthematurityofthesecurity,aswellastheobligationtorepaytheprincipalamountofthesecurityatmaturity.Therateofinterest
onfixedincomesecuritiesmaybefixed,floatingorvariable.Somesecuritiespayahigherinterestratethanthecurrentmarketrate.Aninvestor
mayhavetopaymorethanthesecurity’sprincipaltocompensatethesellerforthevalueofthehigherinterestrate.Thisadditionalpayment
isapremium.
Fixedincomesecuritiesaresubjecttocreditrisk,marketriskandinterestraterisk.Excepttotheextentvaluesareaffectedbyotherfactors,
suchasdevelopmentsrelatingtoaspecificissuer,industry,sectororregion,generallythevalueofafixedincomesecuritycanbeexpectedto
1 AFundmayalsoinvestinaparticipationcertificateinwhichabasketofequitysecuritiesservesastheunderlyingreferencesecurityfordeterminingthevalueoftheparticipationcertificate.
StatementofAdditionalInformation—ArtisanPartnersFunds 6
risewheninterestratesdeclineand,conversely,fallwheninterestratesrise.Somefixedincomesecuritiesalsoinvolveprepaymentorcallrisk.
ThisistheriskthattheissuerwillrepayaFundtheprincipalonthesecuritybeforeitisdue,thusdeprivingtheFundofafavorablestreamof
futureinterestordividendpayments.AFundcouldbuyanothersecurity,butthatothersecuritymightpayalowerinterestrate.Inaddition,
manyfixedincomesecuritiescontaincallorbuy-backfeaturesthatpermittheirissuerstocallorrepurchasethesecuritiesfromtheirholders.
Suchsecuritiesmaypresentrisksbasedonpaymentexpectations.AlthoughaFundwouldtypicallyreceiveapremiumifanissuerwereto
redeemasecurity,ifanissuerweretoexerciseacalloptionandredeemthesecurityduringtimesofdeclininginterestrates,theFundmay
realizeacapitallossonitsinvestmentifthesecuritywaspurchasedatapremiumandtheFundmaybeforcedtoreplacethecalledsecurity
withaloweryieldingsecurity.
Changesbynationallyrecognizedsecuritiesratingorganizations(“NRSROs”)intheirratingsofanyfixedincomesecurityortheissuerofafixed
incomesecurityandchangesintheactualorperceivedabilityofanissuertomakepaymentsofinterestandprincipalmayalsoaffectthe
valueoftheseinvestments.Changesinthevalueofportfoliosecuritiesgenerallywillnotaffectincomederivedfromthesesecurities,butwill
affectaFund’sNAV.
Because interest rates vary, it is impossible to predict the income, if any, for any particular period for a Fund that invests in fixed income
securities.FluctuationsinthevalueofaFund’sinvestmentsinfixedincomesecuritieswillcausetheNAVofeachshareclassoftheFundto
fluctuatealso.
Durationisanestimateofhowmuchabondfund’ssharepricewillfluctuateinresponsetoachangeininterestrates.Forexample,ifinterest
ratesrisebyonepercentagepoint,thesharepriceofaportfolioofdebtsecuritieswithanaveragedurationoffiveyearswouldbeexpected
todeclinebyabout5%.Ifratesdecreasebyapercentagepoint,thesharepriceofaportfolioofdebtsecuritieswithanaveragedurationoffive
years would be expected to rise by about 5%.The greater the duration of a bond, the greater its percentage price volatility. Only a pure
discountbond–thatis,onewithnocouponorsinking-fundpayments–hasadurationequaltotheremainingmaturityofthebond,because
onlyinthiscasedoesthepresentvalueofthefinalredemptionpaymentrepresenttheentiretyofthepresentvalueofthebond.Forallother
bonds,durationislessthanmaturity.
AFundmayinvestinvariable-orfloating-ratesecurities,whichbearinterestatratessubjecttoperiodicadjustmentorprovideforperiodic
recoveryofprincipalondemand.ThevalueofaFund’sinvestmentincertainofthesesecuritiesmaydependontheFund’srighttodemand
thataspecifiedbank,broker-dealer,orotherfinancialinstitutioneitherpurchasesuchsecuritiesfromtheFundatparormakepaymenton
shortnoticetotheFundofunpaidprincipaland/orinterestonthesecurities.Thesesecuritiesaresubjectto,amongothers,interestraterisk
andcreditrisk.
AFundmayinvestinfixedincomesecuritiesthatareissuedbyspecialpurposeentitiesandthatdirectlyorindirectlyrepresentaninterestin,
oraresecuredbyandarepayablefrom,astreamofpaymentsgeneratedfromparticularassets,suchasoperatingcontractsand/orintellectual
property.Suchsecuritiesaresubjecttotherisksassociatedwithfixedincomesecuritiesgenerally,andmaybesubjecttoadditionalrisks.The
additionalrisksmayinclude,amongothers,risksassociatedwithserviceprovidersmanagingthecollateralheldbythespecialpurposeentity
and/oradministeringthesecurity,theextentandnatureofanyinternalorexternalcreditsupport,andsubordinationtoothersecuritiesissued
bythespecialpurposeentity.
Generally, the Funds use the terms debt security, debt obligation, bond, loan, fixed income security and fixed income instrument
interchangeably, and regard them to mean a security or instrument having one or more of the following characteristics: a fixed income
security,asecurityorinstrumentissuedatadiscounttoitsfacevalue,asecurityorinstrumentthatpaysinterestatafixed,floatingorvariable
rateorasecurityorinstrumentwithastatedprincipalamountthatrequiresrepaymentofsomeorallofthatprincipalamounttotheholder
ofthesecurity.Thetermsdebtsecurity,debtobligation,bond,fixedincomesecurityandfixedincomeinstrumentareinterpretedbroadlyby
Artisan Partners as an instrument or security evidencing what is commonly referred to as an IOU rather than evidencing the corporate
ownershipofequityunlessthatequityrepresentsanindirectorderivativeinterestinoneormoredebtsecurities.Forthispurpose,theterms
alsoincludeinstrumentsthatareintendedtoprovideoneormoreofthecharacteristicsofadirectinvestmentinoneormoredebtsecurities.
Asnewfixedincomeinstrumentsaredeveloped,aFundmayinvestinthoseopportunitiesaswell.
JunkBondSecurities.EachFundthatmayinvestinfixedincomesecuritiesmayinvestinsecuritiesthatarerated,atthetimeofpurchase,
belowinvestmentgrade(belowBBB-byStandard&Poor’sFinancialServicesLLC,adivisionofMcGraw-HillFinancial,Inc.,orFitchRatingsInc.
orbelowBaa3byMoody’sInvestorsService,Inc.orcomparablyratedbyanotherNRSROorunratedbutaredeterminedbyArtisanPartnersto
beofcomparablequality,whichareoftenreferredtoas“junkbonds”).Whileofferingagreaterpotentialopportunityforcapitalappreciation
andhigheryieldscomparedtohigher-ratedfixedincomesecurities,junkbondstypicallyentailgreaterpotentialpricevolatilityandmaybe
less liquid than higher-rated securities. Junk bonds may be regarded as predominately speculative with respect to the issuer’s continuing
abilitytomeetprincipalandinterestpayments.Theymayalsobemoresusceptibletorealorperceivedadverseeconomicandcompetitive
industryconditionsthanhigher-ratedsecurities.Issuersofsecuritiesindefaultmayfailtoresumeprincipalorinterestpayments,inwhichcase
aFundmayloseitsentireinvestment.
ThelowerratingsofcertainsecuritiesheldbyaFundreflectagreaterpossibilitythatadversechangesinthefinancialconditionoftheissuer,
oringeneraleconomicconditions,orboth,oranunanticipatedriseininterestrates,mayimpairtheabilityoftheissuertomakepaymentsof
interestandprincipal.Theinability(orperceivedinability)ofissuerstomaketimelypaymentofinterestandprincipalwouldlikelymakethe
valuesofsecuritiesheldbyaFundmorevolatileandcouldlimitaFund’sabilitytosellitssecuritiesatpricesapproximatingthevaluestheFund
StatementofAdditionalInformation—ArtisanPartnersFunds 7
hadplacedonsuchsecurities.Intheabsenceofaliquidtradingmarketforsecuritiesheldbyit,theFundmaybeunableattimestoestablish
thefairmarketvalueofsuchsecurities.Theratingassignedtoasecuritydoesnotreflectanassessmentofthevolatilityofthesecurity’smarket
valueoroftheliquidityofaninvestmentinthesecurity.
Like those of other fixed income securities, the values of lower-rated securities fluctuate in response to changes in interest rates.Thus, a
decreaseininterestratesgenerallywillresultinanincreaseinthevalueofaFund’sfixedincomesecurities.Conversely,duringperiodsofrising
interestrates,thevalueofaFund’sfixedincomesecuritiesgenerallywilldecline.Inaddition,thevaluesofsuchsecuritiesarealsoaffectedby
changes in general economic conditions and business conditions affecting the specific industries of their issuers. Changes by recognized
ratingservicesintheirratingsofanyfixedincomesecurityandintheabilityofanissuertomakepaymentsofinterestandprincipalmayalso
affectthevalueoftheseinvestments.Changesinthevaluesofportfoliosecuritiesgenerallywillnotaffectcashincomederivedfromsuch
securities,butwillaffectaFund’sNAV.
Issuersoflower-ratedsecuritiesareoftenhighlyleveraged,sothattheirabilitytoservicetheirdebtobligationsduringaneconomicdownturn
or during sustained periods of rising interest rates may be impaired. In addition, such issuers may not have more traditional methods of
financingavailabletothemandmaybeunabletorepaydebtatmaturitybyrefinancing.Theriskoflossduetodefaultinpaymentofinterest
orprincipalbysuchissuersissignificantlygreaterbecausesuchsecuritiesfrequentlyareunsecuredandsubordinatedtothepriorpaymentof
senior indebtedness. Certain of the lower-rated securities in which a Fund may invest are issued to raise funds in connection with the
acquisitionofacompany,inso-calledleveragedbuy-outtransactions.Thehighlyleveragedcapitalstructureofsuchissuersmaymakethem
especiallyvulnerabletoadversechangesineconomicconditions.
Underadversemarketoreconomicconditionsorintheeventofadversechangesinthefinancialconditionoftheissuer,aFundcouldfindit
moredifficulttoselllower-ratedsecuritieswhenArtisanPartnersbelievesitadvisabletodosoormaybeabletosellsuchsecuritiesonlyat
prices lower than might otherwise be available. In many cases, lower-rated securities may be purchased in private placements and,
accordingly,willbesubjecttorestrictionsonresaleasamatterofcontractorundersecuritieslaws.Undersuchcircumstances,itmayalsobe
moredifficulttodeterminethefairvalueofsuchsecuritiesforpurposesofcomputingaFund’sNAV.Inordertoenforceitsrightsintheevent
ofadefaultunderlower-ratedsecurities,aFundmayberequiredtotakepossessionofandmanageassetssecuringtheissuer’sobligationson
suchsecurities,whichmayincreasetheFund’soperatingexpensesandadverselyaffecttheFund’sNAV.AFundmayalsobelimitedinitsability
toenforceitsrightsandmayincurgreatercostsinenforcingitsrightsintheeventanissuerbecomesthesubjectofbankruptcyproceedings.
In addition, a Fund’s intention to qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the
“Code”)maylimittheextenttowhichtheFundmayexerciseitsrightsbytakingpossessionofsuchassets.
CertainsecuritiesheldbyaFundmaypermittheissueratitsoptiontocall,orredeem,itssecurities.Ifanissuerweretoredeemsecuritiesheld
bytheFundduringatimeofdeclininginterestrates,theFundmaynotbeabletoreinvesttheproceedsinsecuritiesprovidingthesame
investmentreturnasthesecuritiesredeemed.
Lower-rated securities may be subject to certain risks not typically associated with investment grade securities, such as the following:
(1) reliable and objective information about the value of lower rated obligations may be difficult to obtain because the market for such
securitiesmaybethinnerandlessactivethanthatforinvestmentgradeobligations;(2)adversepublicityandinvestorperceptions,whether
or not based on fundamental analysis, may decrease the values and liquidity of lower than investment grade obligations, and, in turn,
adverselyaffecttheirmarket;(3)companiesthatissuelowerratedobligationsmaybeinthegrowthstageoftheirdevelopment,ormaybe
financially troubled or highly leveraged, so they may not have more traditional methods of financing available to them; (4) when other
institutionalinvestorsdisposeoftheirholdingsoflowerrateddebtsecurities,thegeneralmarketandthepricesforsuchsecuritiescouldbe
adverselyaffected;and(5)themarketforlowerratedsecuritiescouldbeimpairediflegislativeproposalstolimittheiruseinconnectionwith
corporatereorganizationsortolimittheirtaxandotheradvantagesareenacted.
UnratedSecurities.AFundmaypurchaseunratedsecurities(whicharenotratedbyaratingagency)ifArtisanPartnersdeterminesthatthe
securitiesareofcomparablequalitytoratedsecuritiesthattheFundmaypurchase.Unratedsecuritiesmaybelessliquidthancomparable
ratedsecuritiesandinvolvetheriskthatArtisanPartnersmaynotaccuratelyevaluatethesecurity’scomparativecreditworthiness.Analysisof
creditworthinessofissuersofhighyieldsecuritiesmaybemorecomplexthanforissuersofhigher-qualityfixedincomesecurities.
FloatingandVariableRateInvestments.ThecouponsonvariableandfloatingrateinvestmentsinwhichaFundmayinvestarenotfixedand
mayfluctuatebaseduponchangesinmarketrates.Thecoupononafloatingrateinvestmentisgenerallybasedonaninterestratesuchasa
money-marketindex,SecuredOvernightFundingRate(“SOFR”),LondonInterbankOfferedRate(“LIBOR”)oraTreasurybillrate.Variableand
floatingrateinvestmentsaresubjecttointerestrateriskandmayfluctuateinvalueinresponsetointerestratechangesifthereisadelay
between changes in market interest rates and the interest reset date for the obligation, or for other reasons. US Government and related
obligations and other types of debt instruments may be structured as floating- and variable-rate obligations. As short-term interest rates
decline,thecouponsonvariableandfloatingrateinvestmentstypicallyshoulddecrease.Alternatively,duringperiodsofrisinginterestrates,
changesinthecouponsofvariableandfloatingrateinvestmentsmaylagbehindchangesinmarketratesormayhavelimitsonthemaximum
increasesinthecouponrates.Thevalueofvariableandfloatingrateinvestmentsmaydeclineiftheircouponsdonotriseasmuch,oras
quickly, as interest rates in general. Conversely, variable and floating rate investments will not generally increase in value if interest rates
decline.Variableandfloatingrateinvestmentsarelesseffectivethanfixedrateinvestmentsatlookinginaparticularyieldandmaybesubject
tocreditrisk.Certaintypesoffloatingrateinstrumentsmayalsobesubjecttogreaterliquidityriskthanotherdebtinvestments.
StatementofAdditionalInformation—ArtisanPartnersFunds 8
Certainfloatingandvariablerateobligationshaveaninterestratefloorfeature,whichpreventstheinterestratepayablebythesecurityfrom
droppingbelowaspecifiedlevelascomparedtoareferenceinterestrate(the“referencerate”),suchasLIBOR.SuchafloorprotectstheFund
fromlossesresultingfromadecreaseinthereferenceratebelowthespecifiedlevel.However,ifthereferencerateisbelowthefloor,therewill
bealagbetweenariseinthereferencerateandariseintheinterestratepayablebytheobligation,andtheFundmaynotbenefitfrom
increasinginterestratesforasignificantamountoftime.
In 2017, the United Kingdom’s Financial Conduct Authority warned that LIBOR may cease to be available, or appropriate for use, by 2021.
However,onNovember30,2020,LIBOR’sadministrator,theICEBenchmarkAdministration,signaledthatLIBORmaycontinuetobepublished
andavailableforuseuntilJune30,2023.TheunavailabilityorreplacementofLIBORmayaffectthevalue,liquidityorreturnoncertainFund
investmentsandmayresultincostsincurredinconnectionwithclosingoutpositionsandenteringintonewtrades.Regulatorsandmarket
participants are working together to identify or develop a replacement rate. For instance, the US Federal Reserve, based on the
recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative market
participantsandtheirregulators),hasbegunpublishingSOFRthatisintendedtoreplaceUSdollarLIBOR.Anypricingadjustmentstothe
Fund’s investments resulting from a substitute reference rate including but not limited to SOFR, may also adversely affect the Fund’s
performanceand/orNAV.ThereremainsuncertaintyregardingthefutureutilizationofLIBORandthenatureofanyreplacementrate.Assuch,
thepotentialeffectofatransitionawayfromLIBORonaFundorthefinancialinstrumentsinwhichaFundinvestscannotyetbedetermined
andmayvarydependingonfactorsthatinclude,butarenotlimitedto,existingfallbackorterminationprovisionsinindividualcontracts.
Loans,AssignmentsandParticipations.ArtisanFloatingRateFundandArtisanHighIncomeFundmayinvestdirectlyinsecuredorunsecured
loansorinvestinloanassignmentsorparticipationswithrespecttoborrowersoperatinginanyindustryand/orgeographicalregion.The
Funds may acquire some or all of the interest of a bank or other lending institution in a loan to a particular borrower, by means of an
assignmentoraparticipation.Inanassignment,theFundsassumesalloftherightsofalendinginstitutioninaloan,includingtherightto
receivepaymentsofprincipalandinterestandotheramountsdirectlyfromtheborrowerandtoenforceitsrightsasalenderdirectlyagainst
theborrower.TheFundsassumesthepositionofaco-lenderwithothersyndicatemembers.Asanalternative,theFundsmaypurchasea
participatinginterestinaportionoftherightsofalendinginstitutioninaloan.Insuchcase,theFundswillgenerallybeentitledtoreceive
fromthelendinginstitutionamountsequaltothepaymentsofprincipal,interestandpremium,ifany,ontheloanreceivedbytheinstitution,
butwillnotgenerallybeentitledtoenforceitsrightsdirectlyagainsttheagentbankortheborrower,andmustrelyforthatpurposeonthe
lendinginstitution.Inthecaseofaparticipation,thevalueoftheFund’sloaninvestmentwilldependatleastinpartonthecreditstandingof
theparticipatinginstitution.
TheloansinwhichtheFundsmayinvestincludethosethatpayfixedratesofinterestandthosethatpayfloatingrates–i.e.,ratesthatadjust
periodicallybasedonaknownlendingrate,suchasabank’sprimerate.Investmentsinloansmaybeofanyquality,including“distressed”
loans.The Funds also may gain exposure to loans and related investments through the use of total return swaps and/or other derivative
instruments and through private funds and other pooled investment vehicles, including some which may be sponsored or advised by
ArtisanPartners.
Manyloansaremadebyasyndicateofbanks,representedbyanagentbank(the“Agent”)whichhasnegotiatedandstructuredtheloanand
whichisresponsiblegenerallyforcollectinginterest,principalandotheramountsfromtheborroweronitsownbehalfandonbehalfofthe
otherlendinginstitutionsinthesyndicate(the“Lenders”),andforenforcingitsandtheirotherrightsagainsttheborrower.Eachofthelending
institutions,whichmayincludetheAgent,lendstotheborroweraportionofthetotalamountoftheloan,andretainsthecorresponding
interestintheloan.Unless,underthetermsoftheloanorotherindebtedness,eachFundhasdirectrecourseagainsttheborrower,theFund
mayhavetorelyontheAgentorotherfinancialintermediarytoapplyappropriatecreditremediesagainstaborrower.
The Fund’s ability to receive payments of principal and interest and other amounts in connection with loan participations held by it will
dependprimarilyonthefinancialconditionoftheborrower(and,insomecases,thelendinginstitutionfromwhichitpurchasestheloan).The
valueofcollateral,ifany,securingaloancandecline,ormaybeinsufficienttomeettheborrower’sobligationsormaybedifficulttoliquidate.
In addition, each Fund’s access to collateral may be limited by bankruptcy or other insolvency laws. The failure by the Funds to receive
scheduledinterestorprincipalpaymentsonaloanwouldadverselyaffecttheincome,gainsandproceedsoftheFundsandwouldlikely
reducethevalueofitsassets,whichwouldbereflectedinareductionineachFund’sNAV.LoansthatarefullysecuredoffertheFundsmore
protectionthananunsecuredloanintheeventofnon-paymentofscheduledinterestorprincipal.However,thereisnoassurancethatthe
liquidation of collateral from a secured loan would satisfy the corporate borrower’s obligation, or that the collateral can be liquidated.
Indebtedness of companies whose creditworthiness is poor involves substantially greater risks and may be highly speculative. Some
companiesmayneverpayofftheirindebtedness,ormaypayonlyasmallfractionoftheamountowed.Consequently,wheninvestingin
indebtednessofcompanieswithpoorcredit,eachFundbearsasubstantialriskoflosingtheentireamountinvested.
Unsecuredloansareloansthatarenotcollateralized.Theclaimsofholdersofunsecuredloansmaybesubordinated,andthuslowerinpriority,
toclaimsofcreditorsholdingsecuredindebtednessandpossiblyotherclassesofcreditorsholdingunsecureddebt.Sincetheywillnotafford
theFundsrecoursetocollateral,unsecuredloansaresubjecttogreaterriskofnonpaymentintheeventofdefaultthansecuredloans.
Banksandotherlendinginstitutionsgenerallyperformacreditanalysisoftheborrowerbeforeoriginatingaloanorparticipatinginalending
syndicate.InselectingtheloansinwhichtheFundswillinvest,however,ArtisanPartnerswillnotrelysolelyonthatcreditanalysis,butwill
performitsowninvestmentanalysisoftheborrowers.ArtisanPartners’analysismayincludeconsiderationoftheborrower’sfinancialstrength
StatementofAdditionalInformation—ArtisanPartnersFunds 9