PORTFOLIO SPOTLIGHT
“ We like to invest in companies that can grow in different business scenarios.”
Michael McKinnon
like Universal more pricing power.
“ They’ ve started to increase their pricing,” McKinnon says.“ Given their importance, we think they’ ll be successful at this. They have a number of different pricing initiatives that should improve their monetization.”
Regional Allocation
( As a % of portfolio)
Americas 47.5 % Europe 46.9 % Emerging Markets 5.5 %
As of 3 / 31 / 25. Performance figures are for the investor class shares. Sources: Artisan Partners and Morningstar.
Portfolio Statistics
Number Of Positions 36 Wgt Avg Mkt Cap
$ 281.9 billion Wgt Harmonic Avg P / E Ratio 15.2x Std Dev Fund / Category 16.19 / 15.95 Turnover Ratio 16 % Net Expense Ratio 1.26 %
Portfolio stats as of 3 / 31 / 25. Standard deviation( three-year period) versus Morningstar’ s global large-cap stock value category. Expense ratio figures are for the investor class shares. Sources: Artisan Partners and Morningstar.
If successful, he adds, this will produce substantial margin improvements. Universal, he says,“ doesn’ t appear cheap. We paid about 20 times earnings for the business. But if the margins develop the way we think they will, we think the profits and earnings will grow and the multiple will look a lot cheaper.”
Borders Don’ t Matter
McKinnon says the demarcations between U. S. and non-U. S. investing are outdated.“ In the past, it might have made sense to split the world into U. S. and non-U. S. buckets. But companies, supply chains and markets are global. Companies compete in a global market, so countries of domicile are often a meaningless distinction.”
Artisan’ s global value strategy holds $ 30 billion in assets, owned mostly by institutional clients in separately managed accounts, since, according to McKinnon, institutional investors are more focused on seamless global allocations, while traditional portfolio allocations among many American retail investors continue to separate U. S. versus non-U. S. securities.“ I think a more sensible portfolio allocation is active versus passive, and maybe equities versus bonds,” he posits.“ Within the active equity piece, I think it makes sense to simplify and just own a global fund if it’ s managed by an investment team you think has a sensible strategy and can outperform the markets over time.”
Final Word On Value
McKinnon says focusing on mispriced stocks alone gives you only one source of return, which is the multiple re-rating. And that, he adds, often leads to lowquality businesses that might actually be shrinking.
“ But if you combine that with a growing business, you can generate a much larger and durable return” he says.“ You always want to pay a discount, but when we look back and disaggregate the sources of return historically, that compounding effect from the growth and business value per share of our investments is actually the much bigger driver than the multiple re-rating.”
44 | FINANCIAL ADVISOR MAGAZINE | MAY 2025 WWW. FA-MAG. COM