The Artisan International Explorer Fund experienced a challenging third quarter in 2025, with its portfolio yielding a return of -0.14%. This figure notably lagged behind the benchmark's robust 6.68% return, underscoring a period of underperformance relative to broader market movements. Simultaneously, the investment landscape has been increasingly shaped by the transformative power of artificial intelligence, a trend that gained significant momentum with the introduction of ChatGPT in late 2022. This technological advancement continues to capture substantial attention, influencing market dynamics and corporate strategies across various sectors, as evidenced by frequent multibillion-dollar AI-related transactions involving major corporations.
Despite the prevailing market excitement surrounding AI and other emerging technologies, the fund maintained a disciplined and cautious approach to its investment strategy. During the quarter, no new holdings were added to the portfolio, reflecting a commitment to stringent valuation criteria. The fund's managers continue to meticulously update their watchlist, ready to act only when target companies' share prices dip below their established buy thresholds. This methodical strategy ensures that investments are made based on fundamental value rather than speculative fervor, prioritizing long-term growth and capital preservation.
This quarter's events illustrate the ongoing tension between rapid technological innovation and fundamental investment principles. While AI presents compelling opportunities, the Artisan International Explorer Fund's consistent adherence to its investment philosophy, characterized by patience and strict valuation, positions it to navigate market volatility. By focusing on intrinsic value and maintaining a readiness to capitalize on opportune moments, the fund aims to deliver sustainable returns for its investors, even as the global economic and technological landscape evolves at an accelerated pace.
