Artisan Developing World Fund Q1 2025 Commentary

2025-04-10 06:20:00 ET

Summary

• Artisan Developing World Fund returned 1.98% for Q1 2025, underperforming the MSCI Emerging Markets Index's 2.93% return, but has outperformed significantly since June 2015.
• Top contributors included Sea, MercadoLibre, Kanzhun, Tencent, and Visa, driven by growth in e-commerce, fintech, AI, and cross-border transactions.
• Bottom contributors were Zomato, WiseTech Global, Nvidia, MakeMyTrip, and Cadence, affected by weaker consumer sentiment, governance issues, and geopolitical constraints.
• Emphasis on EM assets with large population clusters and access to credit, focusing on consumption growth over production-driven constraints for disproportionate equity outcomes.

Dear Fellow Shareholder:

Market Backdrop

The Artisan Developing World Fund ( ARTYX , Investor Class) returned 1.98% for the quarter ended March 31, 2025, versus 2.93% for the MSCI Emerging Markets Index (all returns in USD unless stated otherwise). Since June 30, 2015, the Artisan Developing World Fund has returned 155.27% cumulatively, versus 42.90% for the MSCI Emerging Markets Index. The quarter began with perceived US economic momentum and notions of US exceptionalism. Markets were then uprooted by China’s artificial intelligence achievements, global tariff uncertainty, and an end to the so-called German debt brake. Chinese markets were standout performers (MSCI China Index +15.02%) against a backdrop of tariffs and geopolitical tensions, as a Chinese hedge fund released an efficient AI reasoning model ( DEEPSEEK ) that underscored the appeal of China’s technology capabilities. This model achievement also led investors to question the prodigious sums being spent on AI capital formation in the US. As a result, the S&P 500® Index ( SP500 , SPX ) declined 4.27% during the quarter, while the tech-heavy Taiwanese market declined 12.63% (MSCI Taiwan Index). Exacerbating this dynamic, Germany responded to uncertainty over the US commitment to Ukraine by releasing the debt brake to invest in both military capabilities and depleted domestic infrastructure. The MSCI ACWI ex USA Index rose 5.23% as investors flocked to European banks and other perceived beneficiaries of European fiscal largesse....

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