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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Artisan Mid Cap Fund 2023 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Artisan Mid Cap Fund)

Primary Source Intelligence • Q3 2023 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

QTD-2.95%

YTD+13.9%

Annualized+12.32%

Positioning StanceConstructive

Market CapMid Cap

GeographyUS

Digest Analysis

Quick Take

"Mid cap growth fund outperformed despite Q3 decline through strong healthcare security selection, particularly biotech pipeline developments. Manager bullish on GLP-1 therapies, AI integration in enterprise software, and energy transition infrastructure."

Executive Summary

Artisan Mid Cap Fund declined 2.95% in Q3 2023 but outperformed the Russell Midcap Growth Index's 5.22% decline through strong security selection. The portfolio was hurt by lack of energy exposure and healthcare overweight, but healthcare was actually the biggest positive contributor through encouraging biotech pipeline news, particularly from Argenx. The manager remains bullish on GLP-1 obesity therapies and is taking advantage of attractive valuations in adversely impacted medical device holdings. Key themes include enterprise software companies integrating generative AI capabilities, energy transition infrastructure investments supported by federal incentives, and biotechnology pipeline developments. New positions were initiated in Wingstop, Quanta Services, and Jabil, while positions in Agilent, Teledyne, and Envista were exited. Despite higher interest rates, the manager believes the portfolio's discount to private market value remains reasonable and continues focusing on high-quality franchises with positive profit cycle outlooks that should deliver attractive returns for long-term investors.

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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%)

High conviction evidenced by concentrated portfolio with named, sized positions across multiple themes. Manager provides specific thesis summaries for individual holdings, discusses position sizing decisions (Garden, Crop, Harvest framework), and demonstrates willingness to add to positions during volatility. Clear conviction in biotech pipeline developments, AI integration opportunities, and energy transition themes.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Manager acknowledges higher interest rates and macro uncertainty but maintains constructive view that rates at current levels are historically normal (4.8% matches 1997-2007 average). Believes growth equity valuations remain reasonable and sees attractive opportunities for long-term investors across most scenarios.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

Portfolio maintains selective risk-taking approach with new Garden positions initiated and adds to adversely impacted holdings like DexCom. However, also harvesting mature positions and trimming outperformers like Zscaler based on valuation considerations, indicating measured risk appetite.

Capital Deployment

25%

De-riskingDeploying

De-risking (25%)

Moderate deployment activity with new Garden positions initiated in three companies (Wingstop, Quanta, Jabil) and notable adds to existing positions (DexCom, Saia, Shockwave). However, this was balanced by harvesting three positions and trimming outperformers, indicating selective rather than aggressive deployment.

Forward Guidance

35%

CautiousExpansionary

Cautious (35%)

Manager expects to continue following bottom-up process focusing on high-quality franchises with positive profit cycle outlooks. Selectively adding to attractive valuations while being patient for opportunities. Guidance is constructive but measured given macro uncertainty.

Language Signal

45%

BearishBullish

Balanced (45%)

Language contains more opportunity-focused terms (attractive valuations, compelling opportunities, positive profit cycles, franchise characteristics) than risk terms, but maintains balanced tone acknowledging uncertainties and need for selectivity.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Manager acknowledges specific risks including higher interest rates impacting growth valuations, refinancing pressures, macro weakness affecting semiconductors, and GLP-1 impact on medical devices. However, risks are discussed in measured context with mitigation strategies rather than as systemic threats.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager sees selective opportunities across multiple areas including early stage opportunities in consumer and Internet sectors, attractive valuations in GLP-1 impacted medical devices, and energy transition infrastructure. Describes finding unique franchises positioned for profit growth emergence, indicating good opportunity identification.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Manager emphasizes long-term focus with multi-year profit cycle framework and willingness to be patient for thesis realization. Discusses companies positioned for growth acceleration in short to medium term and expects attractive returns for longer term investors, indicating 2-5 year investment horizon.