Fund Watch


Artisan Global Value Banks on the Financial Sector

Anjelica Tan

This fund is a top performer among global funds.



Financial firms around the world have come a long way since the 2008 crisis. That has been a blessing for Artisan Global Value (symbol ARTGX, which has a 28% stake in the sector. Over the past three years, Global Value has beaten 97% of its peers (funds that invest in U.S. and foreign stocks). It also topped the MSCI All Country World index by an average of six percentage points per year.

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The fund holds 45 stocks. MasterCard (MA), its best performer, has nearly quadrupled over the past three years and recently announced a ten-for-one stock split. More recently, London-based Lloyds Banking Group (LYG) has been a big contributor, climbing more than 60% over the past 12 months.

Co-managers Dan O’Keefe and David Samra look for high-quality, under­valued, midsize-to-large com­panies with solid balance sheets. Strong executives are also important, says O’Keefe, who travels about 100,000 miles a year to meet with company officials. Once the managers have whittled down the list of acceptable names, they invest in those with the healthiest free cash flow (cash that’s left over after the capital expenditures needed to maintain the business) and the strongest competitive positions in their industries.

Global Value currently has half of its $1.4 billion in assets in domestic stocks. About 20% of assets are in the United Kingdom, and the rest are spread among developed countries in Europe and Asia. At last word, the fund’s top holdings were Oracle (ORCL), the Bank of New York Mellon (BK) and Microsoft (MSFT).



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