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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Artisan Mid Cap Fund 2024 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Artisan Mid Cap Fund)

Primary Source Intelligence • Q3 2024 Letter Analysis

Artisan Mid Cap Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Artisan Mid Cap Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+12.51%

Digest Analysis

Quick Take

"Artisan Mid Cap underperformed in Q3 due to healthcare execution issues and cloud software weakness amid enterprise AI spending shifts."

Executive Summary

Artisan Mid Cap Fund underperformed the Russell Midcap Growth Index in Q3 2024, returning 2.40% versus the benchmark's 6.54%. Underperformance was driven by negative security selection in healthcare, information technology, and industrials. Healthcare challenges included execution issues at DexCom and regulatory problems at iRhythm, though biotech holdings Argenx and Exact Sciences performed well. Technology weakness centered on cloud software companies facing softer SMB spending and enterprise IT budget shifts toward AI projects. The portfolio's underweight to utilities and overweight to technology and healthcare detracted from relative performance. The manager initiated new positions in CBRE Group, Tetra Tech, and Coherent while exiting Edwards Lifesciences, Jabil, and Trex. Looking forward, the team is focused on AI enablers with superior technologies and believes recent Fed rate cuts will benefit construction and real estate exposed holdings. The manager remains disciplined on valuations while optimistic about long-term opportunities in their concentrated, conviction-driven approach.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

72%

CautiousHigh

High Conviction (72%)

The fund demonstrates high conviction through its concentrated approach with named, sized positions and clear thesis explanations for each holding. The three-stage Garden/Crop/Harvest process shows disciplined position sizing, and the manager provides specific rationales for adds, trims, and exits.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about rate cuts benefiting certain sectors and sees opportunities in AI and real estate, but acknowledges significant uncertainty around the election, AI spending sustainability, and macro pressures on cloud software spending.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

The portfolio maintains selective positioning with new Garden positions initiated but also significant trims and exits. The manager is being disciplined on valuations and acknowledges near-term uncertainty in several holdings.

Capital Deployment

43%

De-riskingDeploying

Net Neutral (43%)

The quarter showed mixed deployment activity with new Garden positions initiated in CBRE, Tetra Tech, and Coherent, but significant trims in DexCom, Celsius, and HubSpot, plus complete exits from Edwards Lifesciences, Jabil, and Trex. Net activity appears slightly defensive.

Forward Guidance

10%

CautiousExpansionary

Cautious (10%)

The manager explicitly states they are not making predictions about rate cuts and will monitor trends closely. They expect volatility in AI stocks and are being disciplined on valuations, suggesting a cautious deployment approach.

Language Signal

20%

BearishBullish

Bearish (20%)

Language includes positive terms like opportunities, attractive, and optimistic, but is balanced with risk language around execution issues, regulatory problems, and uncertainty. The tone is measured rather than bullish.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

The manager identifies several meaningful risks including AI spending sustainability, election impacts on markets, and macro pressures on cloud software. Execution issues at multiple holdings and regulatory challenges are discussed in detail.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The manager sees selective opportunities in AI enablers, water infrastructure, and commercial real estate recovery, but emphasizes being disciplined on valuations and acknowledges challenging environments in cloud software and some healthcare areas.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The fund demonstrates a multi-year investment horizon with patience shown in Garden positions like iRhythm despite near-term challenges. The three-stage process implies longer-term thesis development, and the manager discusses secular trends and long-term growth opportunities.