In the final quarter of 2025, the Artisan International Fund's portfolio demonstrated weaker performance compared to both the MSCI EAFE and MSCI All Country World ex USA Indices. Although stock selections within the industrial sector were the primary contributors to this relative underperformance, effective stock picking in the utilities and information technology sectors provided a necessary counterbalance, improving the portfolio's overall standing against both benchmark indices. The year proved beneficial due to strategic investments aligned with three key macroeconomic trends: financial markets, the global push towards electrification, and the robust aerospace and defense industries, collectively termed as 'Fed'-related themes.
Our investment philosophy is centered on identifying businesses within our preferred themes that exhibit sustainable growth characteristics. We particularly focus on those with attractive valuations that, in our view, do not yet fully reflect their long-term potential. This approach involves a thorough process of identifying long-term secular growth trends, which forms the bedrock of our investment decisions and guides our selection of companies poised for significant future expansion.
By consistently applying this diligent investment process, we aim to uncover opportunities that align with powerful, enduring themes. This method allows us to build a portfolio capable of navigating market fluctuations while capturing the benefits of long-term structural shifts. Our commitment to identifying undervalued assets within strong growth trajectories is fundamental to our strategy, ensuring that we are positioned for sustained success.