The Search for Sustainable Growth Artisan Partners Global Equity Team

ARTISAN PARTNERS

Insights

The Search for Sustainable Growth

After a slowdown in 2015 and 2016, global growth gained momentum

in 2017 as growth broadened to more cyclical parts of the economy,

such as manufacturing, as well as across geographies outside of the US.

Improved economic growth coincided with the synchronized upswing in

global corporate profits that powered equity markets higher. Broadening

economic growth across geographies and faster inflation also pushed up

bond yields and positioned central banks to normalize monetary policy

after nearly a decade of extraordinary accommodation following the

financial crisis.

Although the general economic backdrop continues to remain

supportive of equities, we’re realistic about the potential for downside

risk, especially at this later stage of the bull market. The geopolitical

backdrop—including the UK’s path to Brexit and President Trump’s

agenda—is ever-evolving and especially difficult to handicap. Markets,

no doubt, will keep a close eye on worldwide central bank actions. How

smoothly markets digest these policy transitions will likely be a focus of

investors over the next year.

Throughout our more than 20-year history at Artisan Partners, our team

has navigated multiple cycles and a number of market shocks—the

Asian financial crisis of the late 1990s, the 2000 tech bubble bursting,

the 2008 global recession and the ongoing European debt crisis—but

our philosophy and process has remained consistent. We seek to invest

in companies demonstrating attributes that we believe will lead to

sustainable growth and that are further advantageously exposed to

global secular trends or themes. At the core, we are stock pickers. We

believe that investing in high-quality companies with sustainable growth

characteristics selling at attractive valuations not fully reflective of their

long-term potential will lead to outperformance over a full market cycle.

As part of our search for sustainable growth, we pursue companies

possessing particular attributes, including industry leadership, offering

of an essential product or service, provision of a differentiated solution

or ownership of unique assets. We believe high-quality companies with

one or more of these attributes enjoy sustainable competitive advan-

tages, positioning them well to generate long-term earnings growth.

What We Seek in a Potential Investment: Attributes that Lead to Sustainable Growth

Industry Leaders

EssentialProducts

or Services

Differentiated Solution Providers

Unique Assets

Leaders Within Consolidated Industries

Industry leaders can be defined in several ways. For example, a company

can be recognized as an industry leader because it is considered the most

effective in its industry, has the highest market share, sells more products,

makes more profit or has a better-known brand than its competitors.

A high-quality company possessing one or several of these traits can

enjoy benefits including pricing power, economies of scale, distribution

leverage and/or customer recognition. In our view, being a leader within

a consolidated industry is considerably preferable, as the leadership

advantages can be diluted in a fragmented industry.

For example, bolstered by its early 2015 merger with Covidien, Medtronic

has become a dominant global force in the medical devices industry. The

company markets a diversified product portfolio including pacemakers,

defibrillators, insulin pumps and surgical tools. Across a number of its

product lines, Medtronic holds market-leading positions, and often

competes in oligopolies—supporting advantageous pricing power.

Further, its size has afforded Medtronic significant economies of scale,

allowing it to reinvest proceeds in accretive acquisitions and cutting-edge

innovation in areas such as surgical robotics. As a result, Medtronic has

successfully maintained its industry dominance and is often rewarded

with a first-mover advantage, a particular leg up as it expands into

high-growth emerging markets.

Another leader, Nestle, is the world’s largest food company with a

portfolio of 34 billionaire brands across dairy, coffee, baby foods, cereals,

chocolate and other categories. Strong brands, such as those Nestle

owns, can often solidify a company’s market dominance by attracting

new customers, sustaining pricing premiums over competitors, creating

barriers to entry for new competitors and generating customer loyalty

capable of withstanding soft economic environments. As investors in the

company for more than 15 years, we’ve found that Nestle’s continued

brand leadership is partly attributed to its recognition of changing

consumer preferences, for example, emphasizing health and nutritional

considerations before competitors caught on to this trend.

Exhibit 1: Examples of Leaders Within Consolidated Industries

MedtronicOne of the world’s largest medical technology companies

ARTIX

Nestle The world’s leading food company ARTHXARTIX

LindeA leading global player in the industrial gases market

ARTHX ARTIX

AlphabetOwner of Google, the world’s largest Internet company and the global leader in search advertising

ARTHX

AIA GroupA leading insurance provider in the Asia-pacific region

ARTHXARTIX

The Search for Sustainable Growth

The Search for Sustainable Growth

Essential Products or Services

In our view, essential products or services are ones that consumers deem

“must haves” regardless of the macro environment. Often, companies

offering essential products or services are afforded stable and growing

end-user demand and advantageous pricing power, allowing them to

raise customer prices without a meaningful impact on demand.

For example, we’ve identified companies offering high-speed internet

and wireless services, including Deutsche Telekom and Liberty Global.

We’ve found that consumers have a seemingly insatiable appetite for

faster Internet speeds. From consumption of video to social media and

e-commerce, broadband is an essential service for quality of life. Even

when times are tough, consumers are not likely to give up Internet

access. Case in point: Global consumer spending on broadband Internet

grew at a 14.2% CAGR from 2008 to 2013, despite a global recession

during that period.

Another example, Linde, is one of the world’s largest industrial gas

providers, operating in an oligopoly of just four companies with about

80% market share. The company has strong bargaining power given that

it provides an essential product for the operation of its end users—so

essential that its major customers, ranging from steel makers to hospitals,

require the company to build and operate large-scale gas units either

adjacent to their facilities or directly connected via pipeline. In exchange,

customers enter into long-term (e.g.,15- to 20-year) take-or-pay contracts.

As a result, Linde enjoys the benefits of high switching costs for its major

customers, as well as predictability of cash flow.

Exhibit 2: Examples of Companies That Offer Essential Products or Services

Deutsche Telekom

A leading integrated telecom operator with a presence in more than 50 countries

ARTIX

Liberty Global

The largest cable company in Europe (operating in 12 countries)

ARTIX

LindeSupplies industrial gases to customers from hospitals to steel makers across more than 100 countries

ARTHX ARTIX

MedtronicDevelops, manufactures and distributes a diverse range of medical devices and supplies, diagnostic agents and other health care products

ARTIX

Differentiated Solution Providers

Providers of differentiated solutions are particularly well situated to

deliver sustainable growth, in our view, as they offer something that

other competitors do not. As such, they can exploit high barriers to entry,

as new entrants would need to devote considerable time and capital to

building a comparable solution. In addition, these providers can enjoy

advantageous purchasing power.

For example in exhibit 3, Amazon.com is often credited with leading

a structural shift from brick-and-mortar retail to e-commerce—a

differentiated solution that has reordered consumption patterns globally.

Amazon’s massive scale and lack of physical store overhead costs allow

it to competitively price its products versus traditional retailers, while

also providing larger selection and the convenience of fast shipping

times—all effective drivers of customer traffic. In the retail space, Amazon

has implemented a highly successful customer loyalty program in its

Prime membership—Prime customers typically spend 7.5 times more

than non-Prime customers. Customer loyalty not only increases purchase

frequency, but also encourages cross-category shopping, affording

Amazon a captive customer base for new product launches.

Exhibit 3: Amazon Retail Business

55 64

105

164200

304

0

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mill

ions

Active Retail Customers

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Units Ordered Per Customer

10 10 11

16

0

5

10

15

20

25

30

12

22 23

27

14

19

24

76 88

130

237270

Source: Amazon.com/Artisan Partners estimates, as of March 2016.

Outside of retail, Amazon is also a leader in the enterprise cloud

business—a rapidly growing, high-margin segment. Much like its

disruptive transformation of the retail sector, Amazon is leading a

widespread migration of company data storage to the cloud, already

amassing more than 1 million customers. For the customer, cloud-based

data storage solutions offer significant cost savings and efficiency gains.

At the same time, customer switching costs are high, favoring first movers

such as Amazon.

Another holding, Wirecard, is a global payment processing company

operating a technology-agnostic platform enabling merchants to accept

and process debit and credit transactions on multiple formats—online

The Search for Sustainable Growth

and on mobile and in store. One of the company’s main advantages is its

unique vertical integration as a credit account issuer with a bank license as

well as a technology company. Wirecard provides payment processing as

well as numerous merchant support services, including fraud prevention

and assistance in cross-border transactions. Its full-service platform offers

convenience to its business customers while allowing the company to

participate in the revenue opportunity across the financial supply chain.

Exhibit 4: Examples of Differentiated Solution Providers

Amazon.comOne of the world’s largest online retailers and a leading provider of enterprise cloud services

ARTIX ARTHX

Wirecard A leading global payment processing companyARTIXARTHXARTJX

Unique Assets

We also seek out companies possessing unique or hard-to-duplicate

assets. We believe these companies are often able to leverage a dominant

market position, high barriers to entry and pricing power, all of which lay a

solid foundation for sustainable growth.

As such, we believe companies owning infrastructure (the pipes, networks

and towers) carrying Internet traffic are strongly positioned for long-term

growth. Companies in this category often benefit from high barriers to

entry, as the capital requirements to build new infrastructure can deter

new entrants. In many cases these companies operate in oligopolies—or

outright monopolies—enabling them to increase prices without a

meaningful impact on demand. Further, with their networks already

built out, companies such as Deutsche Telekom and Liberty Global

enjoy relatively minimal capex vis-à-vis competitors, allowing them to

compete on pricing and supporting higher profit margins and stable

cash flow growth. With data pointing to accelerating consumer demand

for high-speed Internet and mobile data, we believe these companies will

continue to benefit from their unique network advantages.

Exhibit 5: Examples of Companies with Unique Assets

Deutsche Telekom

A leading integrated telecom operator with a presence in more than 50 countries

ARTIX

Liberty GlobalThe largest cable company in Europe (operating in 12 countries)

ARTIX

About Artisan Partners Global Equity Team

Seasoned Leadership, Dedicated Research, Global Perspectives

Artisan Partners Global Equity Team has been investing in international

markets at Artisan Partners for the past two decades. Across its three

investment strategies, the team applies the same investment philosophy

and process first established by team founder Mark Yockey in 1995. The

team seeks industry-leading companies trading at sensible valuations

with the competitive advantages necessary to sustain earnings growth

over the long term.

The team’s portfolios leverage a deep and highly experienced team of

research analysts led by three seasoned portfolio managers. All team

members have significant experience within their sectors or regions of

expertise, and travel frequently to research investment opportunities.

Company visits are a key component of the team’s process, providing an

opportunity to develop an understanding of a company, its management

and its current and future strategic plans.

Investment Results (%) Average Annual Total Returns

As of 31 March 2018 QTD 1Yr 3Yr 5Yr 10Yr Inception1 Expense Ratio 2

Artisan Global Equity Fund (ARTHX) 3.60 27.11 8.69 10.33 — 12.39 1.40

MSCI ACWI Index -0.96 14.85 8.12 9.20 — 8.67 –

Artisan International Fund (ARTIX) 3 0.30 20.58 3.07 5.94 3.84 9.12 1.18

MSCI EAFE Index -1.53 14.80 5.55 6.50 2.74 4.99 –

Artisan International Small Cap Fund (ARTJX)3 1.69 28.04 7.78 6.99 5.35 12.09 1.57

MSCI EAFE Small Cap Index 0.24 23.49 12.25 11.10 6.48 10.84 –

Source: Artisan Partners/MSCI. Returns for periods less than one year are not annualized. 1Fund inception dates: Artisan Global Equity Fund - 3/29/10, Artisan International Fund - 12/28/95 and Artisan International Small Cap Fund - 12/21/01. MSCI EAFE Index starts 31 Dec 1995. 2For the fiscal year ended 30 Sep 2017. 3Closed to most new investors.

Past performance does not guarantee and is not a reliable indicator of future results. Investment returns and principal values will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown. Call 800.344.1770 for current to most recent month-end performance. Performance may reflect agreements to limit a Fund’s expenses, which would reduce performance if not in effect. Artisan Global Equity Fund’s investments in initial public offerings (IPOs) made a material contribution to the Fund’s performance. IPO investments are not an integral component of the Fund’s investment process and may not be available in the future.

Artisan Partners Global Equity Team Management

Andrew J. EuretigPortfolio Manager14 years of investment experience

Charles-Henri HamkerPortfolio Manager28 years of investment experience

Mark L. Yockey, CFAPortfolio Manager37 years of investment experience

Portfolio Managers average 26 years of investment experience

For more information: Visit www.artisanpartners.com | Call 800.344.1770

Carefully consider the Fund’s investment objective, risks and charges and expenses. This and other important information is contained in the Fund’s prospectus and summary prospectus, which can be obtained by calling 800.344.1770. Read carefully before investing.

International investments involve special risks, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid and may have underperformed securities of large companies during some periods. Growth securities may underperform other asset types during a given period.

Portfolio Managers: Artisan International Fund—Mark L. Yockey, Charles-Henri Hamker, Andrew J. Euretig; Artisan International Small Cap Fund—Mark L. Yockey, Charles-Henri Hamker; Artisan Global Equity Fund—Mark L. Yockey, Charles-Henri Hamker, Andrew J. Euretig.

The views and opinions expressed are based on current market conditions as of 31 Dec 2017, which will fluctuate and those views are subject to change without notice. While the information contained herein is believed to be reliable, there is no guarantee to the accuracy or completeness of any statement in the discussion. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

This material is provided for informational purposes without regard to your particular investment needs. This material shall not be construed as investment or tax advice on which you may rely for your investment decisions. Investors should consult their financial and tax adviser before making investments in order to determine the appropriateness of any investment product discussed herein. We expressly confirm that neither Artisan Partners nor its affiliates have made or are making an investment recommendation, or have provided or are providing investment advice of any kind whatsoever (whether impartial or otherwise), in connection with any decision to hire Artisan Partners as an investment adviser, invest in or remain invested in any funds to which we serve as investment adviser or otherwise engage with Artisan Partners in a business relationship.

For the purpose of determining the Funds’ holdings, securities of the same issuer are aggregated to determine the weight in the Funds. The discussion of portfolio holdings does not constitute a recommendation of any individual security. The holdings mentioned above comprised the following percentages of the Funds’ total net assets (including all share classes) as of 31 Mar 2018: Artisan Global Equity Fund—AIA Group Ltd 0.8%; Alphabet Inc 2.3%; Amazon.com Inc 1.3%; Linde AG 3.2%; Nestle SA 1.1%; Wirecard AG 4.0%. Artisan International Fund—AIA Group Ltd 2.7%; Amazon.com Inc 1.2%; Deutsche Telekom 1.2%; Liberty Global PLC 1.8%; Linde AG 4.6%; Medtronic PLC 2.5%; Nestle SA 3.0%; Wirecard AG 3.8%. Artisan International Small Cap Fund—Wirecard AG 4.6%.

MSCI All Country World Index measures the performance of developed and emerging markets. MSCI EAFE Index measures the performance of developed markets, excluding the US and Canada. MSCI All Country World Small Cap Index measures the performance of small-cap companies in developed and emerging markets. MSCI EAFE Small Cap Index measures the performance of small-cap companies in developed markets, excluding the US and Canada. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment.

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.

Compound Annual Growth Rate (CAGR) is the year-over-year average growth rate of an investment over a period of time. It is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered.

Artisan Partners Funds offered through Artisan Partners Distributors LLC (APDLLC), member FINRA. APDLLC is a wholly owned broker/dealer subsidiary of Artisan Partners Holdings LP. Artisan Partners Limited Partnership, an investment advisory firm and adviser to Artisan Partners Funds, is wholly owned by Artisan Partners Holdings LP.

© 2018 Artisan Partners. All rights reserved.

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