Artisan Partners | The Investor's Field Guide—Bryan Krug-An Update on Corporate Credit

Past performance does not guarantee and is not a reliable indicator of future results.

Clarifications:

(1) The highest price of energy exploration and production constituents in the ICE BofAML US High Yield Index is $89 as of 13 March 2020.

(2) Over the past 30 years, the ICE BofAML US High Yield Index has had seven years with negative total returns.

Bryan Krug is the lead portfolio manager for Artisan High Income Fund. This podcast represents the views of the author Patrick O’Shaughnessy and Bryan Krug as of 13 March 2020 and the views and opinions presented are their own. Artisan Partners is not responsible for and cannot guarantee the accuracy or completeness of any statement in the discussion. This material does not constitute investment advice or a solicitation or endorsement of any specific product or service. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. Prospective investors should consult their financial and tax adviser before making investments in order to determine whether an investment will be suitable for them.

Fixed income securities carry interest rate risk and credit risk for both the issuer and counterparty and investors may lose principal value. In general, when interest rates rise, fixed income values fall. High income securities (junk bonds) are speculative, experience greater price volatility and have a higher degree of credit and liquidity risk than bonds with a higher credit rating. The portfolio typically invests a significant portion of its assets in lower-rated high income securities (e.g., CCC). Loans carry risks including insolvency of the borrower, lending bank or other intermediary. Loans may be secured, unsecured, or not fully collateralized, trade infrequently, experience delayed settlement, and be subject to resale restrictions. Private placement and restricted securities may not be easily sold due to resale restrictions and are more difficult to value. The portfolio’s use of derivative instruments may create additional leverage and involve risks different from, or greater than, the risks associated with investing in more traditional investments. 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.

For the purpose of determining the Fund’s holdings, securities of the same issuer are aggregated to determine the weight in the Fund. The holdings mentioned above comprised the following percentages of the Fund's total net assets as of 31 Dec 2019: General Electric 6.8%. Securities named, but not listed here are not held in the Fund as of the date of this report. Portfolio holdings are subject to change without notice and are not intended as recommendations of individual securities.

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.

Yield Spread is the difference between yields on differing debt instruments of varying maturities, credit ratings and risk, calculated by deducting the yield of one instrument from another. Internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. Par represents the level a security trades at when its yield equals its coupon. Credit Quality Ratings are from S&P and/or Moody's. Ratings typically range from AAA (highest) to D (lowest) and are subject to change. The ratings apply to underlying holdings of the Portfolio and not the Portfolio itself. If securities are rated by both agencies, the higher rating was used. Securities not rated by S&P or Moody's are categorized as Unrated/Not Rated. Investment Grade indicates above-average credit quality and lower default risk and is defined as a rating of BBB or higher by Standard and Poor’s and Fitch rating services and Baa or higher by Moody’s ratings service. Master Limited Partnership (MLP) is a type of business venture that exists in the form of a publicly traded limited partnership. Exploration and Production (E&P) is a company is a in a specific sector within the oil and gas industry. Leveraged Buyout (LOB) is the purchase of a controlling share in a company by its management using outside capital. CBOE Volatility Index (VIX) is a popular measure of the stock market’s expectation of volatility based on S&P 500 index options. London Inter-bank Offered Rated (LIBOR) is the average interbank interest rate at which a selection of banks on the London money market are prepared to lend to one another. Coupon is the annual interest payment that the bondholder receives from the bond’s issue date until maturity.

ICE BofAML U.S. High Yield Index tracks the performance of below investment grade, but not in default, US dollar denominated corporate bonds publicly issued in the US domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody’s and S&P. S&P 500® Index measures the performance of 500 US companies focused on the large-cap sector of the market. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment.

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.

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