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Global equity outperformer reveals two worst bets

Global equity outperformer reveals two worst bets

Despite powering into the top 100 global equity funds over the past three years, it has not all been plain sailing for Artisan Partners’ Jason White who was hit with two stock struggles this year.

Despite having returned 43.34% in US dollar terms over a three year period for the Artisan Partners Global Opportunities fund, White highlighted two stocks which caused performance to suffer.

Speaking to Citywire Selector, White, who runs the fund, alongside Craigh Cepukenas, James Hamel and Matthew Kamm, highlighted the two stocks which have been bad for the $874 million fund.

‘Fortunately, over the last year, our mistakes have been fairly confined. One example would be Themsa, which is a Mexican and Latin American small box retailer which run convenience stores.

‘They have also branched off into other small box retailing such as drug stores – the problem was that it took too long to become profitable and it suffered as a result.’

Within the fund’s weighty healthcare allocation, which accounts for 14.4% of the fund, White said glucose monitoring production company Dexcom, was also something that the team underestimated.

‘The company makes monitoring devices for diabetics, which is a big growing population. But we underestimated the competitive intensity over the last year and as a result that stock didn’t work either. We sold out of it and we are in the process of selling out of Themsa.’

Outperformance

White said one of the most gratifying things about the performance of the fund, is that is has been so broad-based.

‘We are always looking for new ideas, one new health care idea we have is Lanza. What’s happening in the biological drug development industry is still relatively early, if you are looking at how the drugs are produced then Lanza is really an outsourced way of providing the manufacturing for that industry.

‘We would estimate that the industry is currently 30/40% penetrated going into 70/80% penetrated and Lanza is well positioned to take advantage of that penetration increase.’

Over the three years to the end of November 2017, the Artisan Global Opportunities fund returned 43.34% in US dollar terms. This compares with a 28.10% rise by its Citywire-assigned benchmark, the MSCI AC World TR USD, over the same time period.

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