Stacy H. Winick
Direct Dial: 312 807-4218
January 23, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
ARTISAN FUNDS, INC.
1995 ANNUAL REPORT TO SHAREHOLDERS
Ladies and Gentlemen:
On behalf of Artisan Funds, Inc. we are enclosing for electronic filing, in
accordance with Rule 30b-2-1 under the Investment Company Act of 1940, the
1995 semi-annual report to shareholders for Artisan Small Cap Fund.
Very truly yours,
/s/Stacy H. Winick
Stacy H. Winick
Enclosures
Copies to Mr. John M. Blaser
Mr. John S. Scheid
ARTISAN FUNDS
ARTISAN SMALL CAP FUND
SEMIANNUAL REPORT
DECEMBER 31, 1995
INVESTMENT MANAGEMENT PRACTICED WITH
INTELLIGENCE AND DISCIPLINE IS AN ART.
ARTISAN SMALL CAP FUND
(A SERIES OF ARTISAN FUNDS, INC.)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
UNAUDITED
Shares Quoted
Held Market Value
---- ------------
COMMON STOCKS - 94.3%
BANKS/SAVINGS AND LOANS - 2.2%
247,900 <F1>Silicon Valley Bancshares - Bank holding company
serving the high technology industry $ 5,949,600
BASIC INDUSTRY - 1.8%
271,400 NN Ball & Roller, Inc. -
Precision steel balls and rollers 4,749,500
BIOTECHNOLOGY/PHARMACEUTICALS - 1.4%
303,900 <F1>Aethena Neurosciences, Inc. -
Pharmaceutical products for
neurological diseases 3,722,775
BUSINESS SERVICES - 4.8%
205,300 <F1>Bell & Howell Holdings Company - Systems and
services for information access and
dissemination 5,748,400
213,400 <F1>CommNet Cellular Inc. -
Rural cellular phone systems in the Rockies 6,161,925
57,000 <F1>Intercel, Inc. - Rural cellular telephone
and PCS systems 969,000
----------
12,879,325
CAPITAL SPENDING - 7.4%
183,850 Belden Inc. - Wire and cable products for
electrical and electronics markets 4,734,138
201,400 Hardinge Inc. - Machine tool manufacturer 5,236,400
271,350 <F1>Holophane Corporation -
Highly engineered lighting fixtures 5,901,863
128,000 <F1>Insilco Corporation - Multi-industry: office
products, electronics and auto parts 4,080,000
----------
19,952,401
COMPUTER RELATED - 5.0%
119,000 <F1>Creative Computers, Inc. - Direct marketer of
PC hardware, software and peripherals 2,171,750
229,900 <F1>DH Technology Incorporated - Specialty printers 5,632,550
118,100 <F1>Micros Systems, Inc. - Point-of-sale and property/
management systems for the hospitality industry 5,816,425
----------
13,620,725
CONSUMER CYCLICALS - 1.2%
184,550 <F1>Strattec Security Corporation -
Automotive locks and keys $ 3,275,762
CONSUMER SERVICES - 10.5%
224,600 <F1>Ambassador International, Inc. -
Educational travel programs 2,189,850
222,900 <F1>Argyle Television, Inc. -
TV stations 3,900,750
75,300 <F1>Catlina Marketing -
Electronic grocery point-of-sale coupons 4,725,075
338,900 <F1>International Family Entertainment, Inc. -
Family oriented entertainment programming 5,549,488
183,400 <F1>ITI Technologies, Inc. -
Wireless home security systems 5,456,150
138,100 <F1>Jones Intercable, Inc. - Cable TV
system operator 1,726,250
45,600 <F1>Jones Intercable, Inc. Class A - Cable TV
system operator 564,300
64,000 Pittway Corporation - Security equipment and
trade publications 4,336,000
----------
28,447,863
CONSUMER STAPLES - 11.6%
188,100 Anthony Industries, Inc. - Recreational
and industrial products 4,326,300
148,500 AptarGroup, Inc. - Pumps, valves and closures
for consumer packaging 5,550,187
576,200 <F1>Benson Eyecare Corporation - Manufacturer
of optical lenses, sun glasses and
reading glasses 5,185,800
167,500 <F1>Day Runner, Inc.-
Manufacturer of personal organizers and
planners 5,778,750
221,700 Libbey Inc. - Consumer and commercial glassware 4,988,250
273,800 <F1>Syratech Corporation - Silver flatware
and giftware 5,510,225
----------
31,339,512
ELECTRONICS - 14.2%
219,670 <F1>CP Clare Corporation - Electronic relay switches
for telecomm/datacomm markets 4,503,235
199,800 Dallas Semiconductor Corporation -
Electronic components and subsystems 4,145,850
137,400 <F1>Itron, Inc. -
Automated meter reading equipment 4,637,250
73,650 <F1>Kent Electronics Corporation -
Electronic component distributor 4,299,319
104,900 <F1>Littelfuse, Inc. - Circuit protection devices 3,855,075
149,500 <F1>Marshall Industries - Electronic component
distributor 4,802,688
357,650 Methode Electronics, Inc. -
Electronic interconnect devices 5,096,512
173,400 <F1>Smartflex Systems, Inc. - Flexible interconnect
assemblies 3,077,850
111,200 <F1>Uniphase Corporation - Laser equipment
for electronic and industrial applications 3,975,400
----------
38,393,179
ENERGY SERVICES - 2.0%
174,100 <F1>Tech-Sym Corporation - Electronic systems for
seismic exploration and communications $ 5,505,913
EXPLORATION/PRODUCTION - 4.1%
212,500 <F1>Cairn Energy USA, Inc. - Oil and
gas exploration 2,975,000
435,600 Lomak Petroleum, Inc. - Oil and
gas exploration 4,247,100
175,050 <F1>Nuevo Energy Company - Oil and gas exploration 3,916,744
----------
11,138,844
HEALTHCARE SERVICES - 3.8%
248,300 <F1>MECON - Management systems
and consulting for the hospital industry 3,941,762
194,900 <F1>Sierra Health Services, Inc. -
Managed care provider in Nevada 6,188,075
----------
10,129,837
INSURANCE - 3.1%
158,600 <F1>Amerin Corporation - Private mortgage
insurance 4,242,550
203,800 John Alden Financial Corporation -
Group life and health insurance for
small companies 4,254,325
----------
8,496,875
MEDICAL DEVICES/SUPPLIES - 1.6%
164,200 Vital Signs, Inc. -
Anesthesia and respiratory medical products 4,330,775
REAL ESTATE INVESTMENT TRUSTS - 1.6%
154,300 Felcor Suite Hotels, Inc. -
Hotel real estate investment trust 4,281,825
RESTAURANTS - 4.0%
210,150 <F1>Daka International, Inc. - Fuddruckers restaurants
and food service management 5,779,125
202,300 <F1>Quality Dining, Inc. - Franchisee of Burger King's,
Chili's and Bruegger's Bagels 4,905,775
----------
10,684,900
RETAILING - 4.7%
533,100 <F1>Bernard Chaus, Inc. -
Women's apparel manufacturer 1,932,487
220,800 <F1>Proffitt's, Inc. - Regional department stores
in the southeast 5,796,000
308,700 <F1>Zale Corporation - Fine jewelry retailer 4,977,787
----------
12,706,274
SOFTWARE/TELECOMMUNICATIONS - 4.1%
330,400 <F1>Data Broadcasting Corporation - Wireless
distributor of financial and
business inforamtion $ 4,088,700
120,900 <F1>Plantronics, Inc. - Telephone headsets 4,367,513
196,000 <F1>7th Level, Inc -
Educational/entertainment interactive software 2,744,000
----------
11,200,213
TRANSPORTATION RELATED - 2.1%
199,600 <F1>Midwest Express Holdings, Inc. -
Regional airline based in Milwaukee, WI 5,538,900
FOREIGN SECURITIES - 3.1%
BERMUDA - 1.7%
INSURANCE
153,200 RenaissanceRe Holdings Ltd. (USD/NASDAQ) -
Property catastrophe reinsurance 4,653,450
THE NETHERLANDS - 1.4%
CAPITAL SPENDING
136,200 <F1>Elsag Bailey Process Automation N.V. (USD/NYSE) -
Process control systems 3,660,375
-----------
TOTAL FOREIGN SECURITIES 8,313,825
-----------
TOTAL COMMON STOCKS
(Cost $228,149,995) $254,658,823
PREFERRED STOCKS - 1.6%
CONSUMER CYCLICALS
138,300 Beazer Homes USA, Inc. -
Single family home builder $ 4,287,300
------------
TOTAL PREFERRED STOCK
(Cost $3,501,698) $ 4,287,300
Par
Amount Market Value
- ------ ------------
SHORT TERM INVESTMENTS - 6.3%
$17,026,000 Investment in repurchase agreement from State Street
Bank and Trust Company (U.S. Treasury obligations)
at 5.10% dated 12/29/95 due 1/2/96 $ 17,026,000
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $17,026,000) 17,026,000
TOTAL INVESTMENTS - 102.2%
(Cost $248,677,693) 275,972,123
Other assets less liabilities - (2.2)% (6,028,665)
------------
TOTAL NET ASSETS<F2> $269,943,458
============
<F1>Non-income producing securities
<F2>Percentages for the various classifications relate to total net assets
The accompanying notes to financial statements are
an integral part of this schedule.
ARTISAN SMALL CAP FUND
(A SERIES OF ARTISAN FUNDS, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
UNAUDITED
ASSETS:
Investments in securities, at value (cost $248,677,693) $275,972,123
Cash 243
Receivable from investments sold 1,575,210
Receivable from fund shares sold 363,006
Accrued interest 7,094
Accrued dividends 149,121
Organizational costs 59,205
Prepaid registration expenses 37,383
-----------
Total assets 278,163,385
LIABILITIES:
Payable for investments purchased 5,888,819
Payable for organizational costs 59,205
Payable for registration expenses 37,383
Payable for operating expenses 124,256
Payable for capital gains distribution 2,110,264
-----------
Total liabilities 8,219,927
-----------
Total net assets $269,943,458
============
NET ASSETS CONSIST OF THE FOLLOWING:
Fund shares issued and outstanding $240,448,619
Net unrealized appreciation on investments 27,294,430
Accumulated undistributed net realized gains
on investments 2,200,409
------------
$269,943,458
============
NET ASSET VALUE PER SHARE
Net asset value, offering price and redemption price per share
($.01 par value, 5,000,000,000 shares authorized,
[$ 269,943,458/ 20,487,995 shares outstanding]) $13.18
======
The accompanying notes to financial statements are
an integral part of this schedule.
ARTISAN SMALL CAP FUND
(A SERIES OF ARTISAN FUNDS, INC.)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
UNAUDITED
INVESTMENT INCOME:
Interest $ 366,398
Dividends 594,210
----------
Total investment income 960,608
EXPENSES:
Advisory fees 1,052,993
Transfer agent fees 358,944
Registration fees 102,623
Shareholder communications 49,226
Custodian fees 34,126
Accounting fees 21,985
Professional fees 20,489
Directors' fees 7,644
Organizational costs 7,505
Other operating expenses 4,898
-----------
Total expenses 1,660,433
-----------
Net investment loss (699,825)
-----------
REALIZED AND UNREALIZED GAINS
ON INVESTMENTS - NET:
Net realized gain on investments 5,492,729
Net increase in unrealized appreciation on investments 20,926,487
-----------
Net gain on investments 26,419,216
-----------
Net increase in net assets resulting from operations $25,719,391
===========
The accompanying notes to financial statements are
an integral part of this schedule.
ARTISAN SMALL CAP FUND
(A SERIES OF ARTISAN FUNDS, INC.)
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
UNAUDITED
OPERATIONS:
Net investment loss $ (699,825)
Net realized gain on investments 5,492,729
Net increase in unrealized appreciation on investments 20,926,487
-----------
Net increase in net assets resulting from operations 25,719,391
-----------
DISTRIBUTION PAYABLE TO SHAREHOLDERS:
Distributions from net realized gains
on investment transactions ($0.103 per share) 2,110,264
-----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (15,107,352 shares) 187,393,007
Cost of shares redeemed (3,234,101 shares) (40,327,527)
------------
Net increase in net assets resulting from Fund
share activities 147,065,480
Total increase 170,674,607
Net assets at the beginning of the period 99,268,851
------------
Net assets at the end of the period $269,943,458
============
The accompanying notes to financial statements are
an integral part of these statements.
ARTISAN SMALL CAP FUND
(A SERIES NF ARTISAN FUNDS, INC.)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
UNAUDITED
For the six For the
months ended period ended
December 31,1995 June 30, 1995<F5>
---------------- -----------------
Net asset value, beginning of period $ 11.52 $ 10.00
Income from investment operations:
Net investment loss (0.03) (0.01)
Net realized and unrealized gains
(losses) on securities 1.79 1.53
------- -------
Total from investment operations 1.76 1.52
------- -------
Distribution from net realized gains (0.10)
-------
Net asset value, end of period $ 13.18 $ 11.52
======= =======
Total Return 15.3%<F4> 15.2%<F4>
Ratios/supplemental data:
Net assets, end of period (millions) $269.9 $99.3
Ratio of expenses to average net assets 1.63%<F3> 2.00%<F3>
Ratio of net investment income to
average net assets (0.69)%<F3> (0.59)%<F3>
Portfolio turnover rate 71.52% 9.28%
<F3>Annualized
<F4>Not annualized
<F5>For the period from commencement of operations (March 28, 1995) through
June 30, 1995
The accompanying notes to financial statements are
an integral part of these statements.
ARTISAN SMALL CAP FUND
(A SERIES OF ARTISAN FUNDS, INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
UNAUDITED
(1) Summary of significant accounting policies:
The Artisan Small Cap Fund (the "Fund") is a series of Artisan Funds, Inc.
which was incorporated on January 5, 1995 as a Wisconsin corporation and is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The following is a summary
of significant accounting policies of the Fund:
(a) Security valuation - Each security is valued at the latest sales price
reported by the principal security exchange on which the issue is traded, or if
no sale is reported, the latest sales price reported from previous days trading
activities. Securities for which prices are not readily available or which
management believes that the last sales price is not reflective of the fair
value of the security are valued at fair value as determined in good faith under
consistently applied procedures established by and under the general supervision
of the Board of Directors. Short-term investments maturing within sixty days of
their purchase date are valued at amortized cost which approximates market.
(b) Income taxes - No provision has been made for federal income taxes since
the Fund intends to 1) distribute substantially all of its taxable income as
well as realized gains from the sale of investment securities to its
shareholders and 2) comply with all provisions of the Internal Revenue Code
applicable to regulated investment companies.
(c) Portfolio transactions - Security and shareholder transactions are
recorded no later than the first business day after the trade date. Net realized
gains and losses on common stocks are computed on the specific identification
basis.
(d) Other - Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is reported on the accrual basis.
(2) Transactions with affiliates:
Artisan Partners Limited Partnership (the "Adviser"), with which certain
officers and directors of the Fund are affiliated, provides investment advisory
and administrative services to the Fund. In exchange for these services, the
Fund pays a monthly management fee to the Adviser as follows:
Average Daily Net Asset Value Annual Rate
----------------------------- -----------
Less than $500 million 1.000%
$500 million to $750 million 0.975%
$750 million to $1 billion 0.950%
Greater than $1 billion 0.925%
ARTISAN SMALL CAP FUND
(A SERIES OF ARTISAN FUNDS, INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
The Fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and reports. The
Adviser has undertaken to reimburse the Fund for any ordinary operating expenses
in excess of 2.00% of average daily net assets annually.
(3) Organization costs and prepaid registration expenses:
Organization costs are amortized over sixty months. These expenses were paid
by the Adviser which will be reimbursed by the Fund over the same time period.
The proceeds of any redemption of the initial shares by the original
shareholders will be reduced by a pro-rata portion of any unamortized expenses
at the time of redemption. Registration expenses of the Fund are amortized over
twelve months.
(4) Investment transactions:
For the six months ended December 31, 1995, the cost of purchases and the
proceeds from the sales of investment securities (excluding short-term
securities) were $269,118,322 and $127,216,768, respectively.
(5) Income tax information:
Aggregate gross unrealized appreciation (depreciation) on investments as of
December 31, 1995, based on investment cost of $248,743,615 for federal tax
purposes, is as follows:
Aggregate gross unrealized appreciation on investments $32,654,346
Aggregate gross unrealized depreciation on investments (5,425,838)
-----------
Net unrealized appreciation $27,228,508
===========
This report is submitted for the information of shareholders of the Fund. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
