The material contained on Artisan Canvas represents the views and opinions of the authors. Material written by any particular individual may or may not reflect the views and opinions of Artisan Partners or its associates. The material contained on this site may contain forward-looking statements regarding future events and future performance, as well as management’s current expectations, beliefs, plans, estimates, or projections. Forward-looking statements regarding Artisan Partners Asset Management Inc. and its subsidiaries are subject to a number of risks and uncertainties, including those factors described within “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 18, 2020, as such factors may be updated from time to time. The views and opinions expressed in this material are based on market conditions as of the date indicated and are subject to change without notice. While this information is believed to be reliable, there is no guarantee to the accuracy or completeness of any statement in the discussion.
This website does not constitute an offer or recommendation by Artisan Partners of securities or services to, or a solicitation by Artisan Partners of an offer of services or to buy, sell or hold securities. Artisan Partners and the authors noted herein may have financial interests, through investment vehicles or personal investments, in any themes, trends, companies or securities discussed. Materials on this website are informational only and should not be taken as investment recommendation or advice of any kind whatsoever (whether impartial or otherwise). Investing is subject to risks, which include the potential for fluctuations in investment value and loss of principal. Past performance is not indicative of future results.
MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI. Frank Russell Company ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor or endorse the content of this communication. The herein referenced S&P index(es) ("Index") is a product of S&P Dow Jones Indices LLC ("S&P DJI") and/or its affiliates and has been licensed for use. Copyright © 2023 S&P Dow Jones Indices LLC, a division of S&P Global, Inc. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). None of S&P DJI, Dow Jones, their affiliates or third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. Source ICE Data Indices, LLC, used with permission. ICE Data Indices, LLC permits use of the ICE BofAML indices and related data on an "as is" basis, makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness and/or completeness of the ICE BofAML indices or any data included in, related to, or derived therefrom, assumes no liability in connection with the use of the foregoing, and does not sponsor, endorse, or recommend Artisan Partners or any of its products or services.
© 2023 Artisan Partners. All rights reserved.
Finding Opportunities Amid Policy-Driven Volatility
There’s been no shortage of volatility so far this year as building inflationary pressures and increasingly tighter monetary conditions have led to spikes in volatility across interest rates and risk assets. Across credit markets, de-risking has become more common as investors price in their expectations for higher policy rates and the potential impact on global growth. Uncertainty continues to drive price action in the near term, but through the noise, growing pockets of value are emerging across the high yield landscape.
Three Trends to Watch in the Evolving Software Enterprise Landscape
The software industry is witnessing monumental shifts that evolve its economics. Like all industry transitions, this change will create both winners and losers. As forces that will reshape the future of business, we are interested in the opportunities made possible by (1) the ubiquity of digitalization, (2) the increased transition to the cloud and (3) the proliferation of artificial intelligence (AI).
Three Reasons to Consider an Allocation to Leveraged Loans
In looking at the year ahead, we expect an environment that inches ever closer to normal across all facets of the economy. For fixed income investors, normal means the end of accommodative monetary policy and the beginning of a tightening cycle that is likely to challenge returns in 2022. To offset some of these headwinds, we think allocating to leveraged loans is a compelling strategy for fixed income investors. Here are three reasons why leveraged loans have the potential to perform well in the year ahead.
Where We Are Finding Growth: Renewable Energy Economy
The team believes the world is in the early stages of a meaningful mix shift from hydrocarbon-based energy to renewables-powered energy enabled by improving economics, social awareness and increasing regulatory pressures. These dynamics have enabled the team to uncover several profit cycle opportunities globally.
Where We Are Finding Growth: Industrial Process Innovation
A relatively slower capital expenditure cycle is often cited as one factor behind the past decade’s tepid expansion in many developed markets. However, we believe this top-down point of view obscures a healthy, albeit different, sort of capex cycle—one that is more technology-driven and focused on efficiency and margin improvements.
Where We Are Finding Growth: Health Care Innovation
In the six-plus decades since Francis Crick and James Watson published their short but revelatory article about DNA’s double-helix structure, ongoing research has accelerated understanding of human genetics.
Smarter Buildings—An Unsung Hero in the Climate Fight
The increasing evidence that greenhouse gases created by human activity is driving climate change—including higher temperatures, more droughts, extreme weather and melting glaciers—has created a call to action for public and private-market solutions to slow these trends.
Evergrande: Maybe Not a Lehman Moment but Risks Are Real
As one of China’s largest property developers, Evergrande’s size and precarious financial position pose real risks for China’s authorities, economy and financial markets.
Are You Getting the Right Non-US Exposure?
Tepid economic growth in the post financial crisis decade left investors searching for companies that could stand out from the market by disproportionately growing their profits. The technology-centric US economy became the preferred destination for capital, with profit growth far exceeding its non-US peers (Exhibit 1). This rise in profits combined with more multiple expansion drove US equities to deliver over 600bps of higher annual returns and higher returns on equity (Exhibit 1). That said, it might be appropriate for investors to sharpen their pencils and give their non-US equity exposure a closer look given the price being paid for US profit growth appears a bit stretched today, and past performance is not indicative of future results (Exhibit 2).
Revisiting Bond vs Loan Relative Value
Opportunities to capture additional yield by moving up in quality are uncommon for fixed income investors, but that’s the dynamic at play today in leveraged credit.