Artisan International Fund to close; Global Value Fund to reopen to new investors

TheShadow

http://www.sec.gov/Archives/edgar/data/935015/000119312515323911/d21853d497.htm

497 1 d21853d497.htm ARTISAN PARTNERS FUNDS, INC.

...ARTISAN PARTNERS FUNDS, INC.

SUPPLEMENT DATED SEPTEMBER 21, 2015

TO THE PROSPECTUS OF ARTISAN PARTNERS FUNDS, INC. (Investor and Institutional Shares)

DATED FEBRUARY 1, 2015

ARTISAN GLOBAL VALUE FUND

Artisan Global Value Fund will open to new investors on October 1, 2015. All references to the closure of Artisan Global Value Fund in Artisan Partners Funds’ prospectus are removed effective October 1, 2015.


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ARTISAN INTERNATIONAL FUND

Artisan International Fund (the “Fund”) will close to most new investors at the close of business on January 29, 2016. The Fund is expected to remain open to new employee benefit plans through September 30, 2016 and to other investors who meet Artisan Partners Funds’ eligibility criteria for investing in a closed Fund.

Effective February 1, 2016, the following paragraph is added under the heading “Purchase and Sale of Fund Shares” on page 25 of Artisan Partners Funds’ prospectus:

Artisan International Fund is closed to most new investors. See “Investing with Artisan Partners Funds – Who is Eligible to Invest in a Closed Fund?” in the Fund’s statutory prospectus for new account eligibility criteria.

Effective February 1, 2016, the following will replace the text under the heading “Who Is Eligible to Invest in a Closed Fund?” on pages 71 and 72 in Artisan Partners Funds’ prospectus in its entirety.

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 and Artisan Small Cap Value Fund are closed to most new investors. The Funds do not permit investors to pool their investments in order to meet the eligibility requirements, except as otherwise noted below.

If you have been a shareholder in a Fund continuously since it closed, you may make additional investments in that Fund and reinvest your dividends and capital gain distributions in that Fund, even though the Fund has closed, unless Artisan Partners considers such additional purchases to be not in the best interests of the Fund and its other shareholders. An employee benefit plan that is a Fund shareholder may continue to buy shares in the ordinary course of the plan’s operations, even for new plan participants.

You may open a new account in a closed Fund only if that account meets the Fund’s other criteria (for example, minimum initial investment) and:

•you beneficially own shares of the closed Fund at the time of your application;

• you beneficially own shares in any of the Funds with combined balances of $250,000;

•you receive shares of the closed Fund as a gift from an existing shareholder of the Fund (additional investments generally are not permitted unless you are otherwise eligible to open an account under one of the other criteria listed);

•you are transferring or “rolling over” into a Fund IRA account from an employee benefit plan through which you held shares of the Fund (if your plan doesn’t qualify for rollovers you may still open a new account with all or part of the proceeds of a distribution from the plan);

•you are purchasing Fund shares through a sponsored fee-based program and shares of the Fund are made available to that program pursuant to an agreement with the Funds or Artisan Partners Distributors LLC and the Funds or Artisan Partners Distributors LLC has notified the sponsor of that program in writing that shares may be offered through such program and has not withdrawn that notification;

• you are an employee benefit plan (only available for investments in Artisan International Fund through September 30, 2016);

•you are an employee benefit plan and the Funds or Artisan Partners Distributors LLC has notified the plan in writing that the plan may invest in the Fund and has not withdrawn that notification;

• you are an employee benefit plan or other type of corporate, charitable or governmental account sponsored by or affiliated with an organization that also sponsors or is affiliated with (or is related to an organization that sponsors or is affiliated with) another employee benefit plan or corporate, charitable or governmental account that is a shareholder of the Fund at the time of application;

• you are a client of an institutional consultant or financial intermediary and the Funds or Artisan Partners Distributors LLC has notified that consultant or financial intermediary in writing that you may invest in the Fund and has not withdrawn that notification;

• you are a client of a financial advisor or a financial planner, or an affiliate of a financial advisor or financial planner, who has at least $2,500,000 of client assets invested with the Fund or at least $5,000,000 of client assets invested with the Funds or under Artisan Partners’ management at the time of your application;

• you are a client of Artisan Partners or are an investor in a product managed by Artisan Partners, or you have an existing business relationship with Artisan Partners, and in the judgment of Artisan Partners, your investment in a closed Fund would not adversely affect Artisan Partners’ ability to manage the Fund effectively; or

• you are a director or officer of the Funds, or a partner or employee of Artisan Partners or its affiliates, or a member of the immediate family of any of those persons.

A Fund may ask you to verify that you meet one of the guidelines above prior to permitting you to open a new account in a closed Fund. A Fund may permit you to open a new account if the Fund reasonably believes that you are eligible. A Fund also may decline to permit you to open a new account if the Fund believes that doing so would be in the best interests of the Fund and its shareholders, even if you would be eligible to open a new account under these guidelines.

The Funds’ ability to impose the guidelines above with respect to accounts held by financial intermediaries may vary depending on the systems capabilities of those intermediaries, applicable contractual and legal restrictions and cooperation of those intermediaries.

Call us at 800.344.1770 if you have questions about your ability to invest in a closed Fund.

Please Retain This Supplement for Future Reference

msf

I notice that the min balance at Artisan for getting into closed funds is being increased from $100K to $250K. The current prospectus reads:

• you are a shareholder with combined balances of $100,000 in any of the Funds (in your own name or as beneficial owner of shares held in someone else’s name) (available for investments in each closed Fund except Artisan Global Value Fund);

Ted

@MFO Members: Announcement from Artisan.
Regards,
Ted
Artisan Website:
https://www.artisanpartners.com/content/dam/shared/documents/press-releases/mf/International-Closing-Global-Value-Reopening-21-Sep-2015-vR.pdf

Crash

Ted, the link brings one to a Sprott fund.

Ted

@Crash: Link is to Artisan Partners on my computer !
Regards,
Ted

Crash

http://www.morningstar.com/cefs/XNAS/FUND/quote.html
FUND is a ticker. The computer doesn't know the difference.

Crash

....And, wow. Is that Sprott fund worth investing in???
http://www.morningstar.com/cefs/XNAS/FUND/quote.html

Ted

@Crash: This is the link I post above !
Regards,
Ted

https://www.artisanpartners.com/content/dam/shared/documents/press-releases/mf/International-Closing-Global-Value-Reopening-21-Sep-2015-vR.pdf

Crash

I saw that one, too. So, the other was coincidental and unintended. No harm done.

LLJB

Is there any particular reason to choose ARTGX over something like OAKWX? I have a high regard for Artisan just like I do for Oakmark, but the performance of the two funds is very similar. It seems like Artisan suffers a bit less on the downside but doesn't gain as much on the upside. Any other reasons anyone might prefer one over the other?

Thanks!

Sven

Neither one. I moved away from both Artisan and Oakmark global funds when Vanguard Global Min Volatility became available. Lower expense ratio (0.30 vs 1.2 and 1.4% of Oakmark and Artisan, respectively), currency hedging, and better performance.

msf

Because of the currency hedging, that may be an apples and oranges comparison. The dollar has been growing stronger over the past few years, so a hedged fund is likely to have done better than unhedged funds. That doesn't mean the fund will do better in the long run, as the dollar fluctuates in strength. Unless one believes that the dollar will not come down.

See my comment in another thread, which cites a Vanguard paper explaining the differences in performance between hedged and unhedged funds.

Quoting from another section of the Vanguard paper:

Over the long term, for a currency management program to produce added return in strategic asset allocations, one must believe not only in a persistent return (positive or negative) from foreign currency, but also that this return will differ substantially from the return realized by hedging.

Sven

@msf, points well taken. I understanding currency hedging has its cost and thus produces a drag on total return. I don't think anyone know the direction of USD versus the rest the world currencies. Personally I am using both strategies plus indexing as well.

STB65

Agree with Sven. 0.3 ER trumps almost any succession planning in a fund costing 2 - 4 x more.
All my future deposits for children and grandchildren go to VMVFX unless something glaringly better comes along (and it will most likely be from Vanguard). I don't know if hedging matters over 30 - 70 yrs, and I view SS as a bond component, so my descendents just need to vote for those trying to keep SS solvent.

Sven

@STB65, vmvfx is available in the Admiral share with ER 0.20% and $50K minimum. That is a considerable saving in the long term. Question is does Vanguard charges the hedging at cost or close to it? Other funds such as Tweedy Browne Global Value has a considerably higher ER, 1.3%.

msf

"Succession planning" sounds like you might consider active management a risk because sooner or later the manager(s) must be succeeded by other managers. Vanguard states that VMFVX is actively manged, selecting approximately 200 stocks from out of the roughly 7200 in the FTSE Global All Cap Index (hedged).
(Vanguard PR on VMFVX)

Hedging is a hidden expense that may be increasing the total costs incurred by VMVFX by 50% or more: "the direct transaction costs of currency hedging have generally been low to moderate, historically in the range of 1 to 18 basis points annually for developed-market currencies. ... Unlike most major developed-market currencies, emerging-market currencies tend to have lower trading volumes and may be more difficult and costly to hedge." (Vanguard paper on hedging)

This fund "seeks lower risk, not outperformance". (First Vanguard link, above). IMHO, risk (volatility) reduction is an objective that makes this fund worth considering for many. Though you justifiably questioned its value for an investment intend to last 30+ years. Volatility of performance over that long a period of time would likely average out.

Vanguard does offer an unhedged fund (lower transaction costs but higher risk/volatility), passively managed (no succession planning) with stocks culled from the same FTSE Global All Cap Index (except it's the unhedged version of the index). VTWSX/VT (ER of 0.27%/0.17%).

I'm not advocating one fund over the other in general; just looking at how well these two funds fishing in the same pool align with some factors mentioned.