Finding 9% Yields in a Beaten-Down Asset Manager

Sven

Like other active portfolio managers, Artisan Partners Asset Management has suffered: Money has flowed out of its funds, earnings have declined, and its stock has fallen 26% this year, to a recent $26, sharply below its 2014 high of $70. That has given Artisan shares a fat yield of 9% but has also raised questions about whether it can sustain its dividend.

Founded in 1995, Artisan (ticker: APAM) went public in 2013. Today, it has 14 mutual funds investing in U.S. and foreign stocks and bonds. Ten funds have a coveted...

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VintageFreak

Hmm... Bad performance begins soon after it goes public. Have weseen that story before?

No secret I own many of their funds. One I regretted not being able to own closed. Their latest fund I was vocal about not buying. Have given them a free pass, am I slipping and fallen in love?

Not investing dividends and buying opportunistically has kept me in the game with artisan. I am going to watch closely. If mangers start leaving whatever the reason, that would be a red flag (especially if we fund out they sold their stock options at highs)

Sven

Artisan's management fee has consistently above average among actively managed funds. Many did mind as long as their performance is good. Some of their strategies over the last several years have been lagging badly. For example, Artisan Sm Cap Value has been liquidated and folded into Mid Cap Value. Artisan International, one of the oldest fund, has been lagging badly relative to Vanguard Total International Index fund.

Yes, they close their funds to protect the existing investors. At the same time they launch many new funds. Hate to see a good shop goes down the road that Janus did. Like you said, going public is a bad idea.

claimui

I am still holding Artisan International Value ARTKX. It had some lagging periods over the past year, but has since rebounded well. Artisan Global Value ARTGX is managed by the same team, with similar results.

Artisan International ARTIX, on the other hand, has a different team that also manages Artisan International Small Cap ARTJX and Artisan Global Small Cap ARTWX. All are doing badly lately. ARTJX has been a star but sometimes inconsistent performer in the past, so it might just be waiting its turn. Or not.

I do agree their fees are on the high side, especially given the size of their more successful funds. Maybe they think clients should buy their stock to get some of those fees back?

Mona

I am still holding ARTMX in a taxable account and it too has not performed well in the past 3-5 years. To add insult to injury, from 2013 to 2015 it has distributed LTCG's of 8% to 16% of NAV and with an ER of 1.19%.

I will cut the cord this year before its November distribution and put the proceeds in VIMAX and call it a day. I never had any business of tilting to Mid-Cap Growth in the first place.

Mona

Sven

In our taxable accounts, we only invested in index funds and EFFs. Several times we were surprised by the large year end distribution and paying sizable tax.

Moving to VIMAX would be very tax efficient while the ER is at 0.08%!