SEMI-ANNUAL
REPORT
Small Cap Fund Mid Cap Fund
(LOGO)
International Fund Small Cap Value Fund
ARTISAN FUNDS
DECEMBER 31, 1999
www.artisanfunds.com
<PAGE>
- --------------------------------------------------------------------------------
Dear Fellow Shareholders,
We are pleased to present to you this Semi-Annual Report that reviews the
activities of each Artisan Fund from July 1, 1999 through December 31, 1999. The
period was an exciting time, marked with several achievements and the completion
of a meaningful customer service initiative.
For Mark Yockey and his International Fund team, the fourth quarter of 1999 was
the Fund's best since the Fund's inception. The Mid Cap Fund, led by Andy
Stephens, continued to outperform its benchmark and has done so in every quarter
since the Fund's June 27, 1997 inception. Our two small-cap funds also enjoyed
success. Both the Small Cap Fund and the Small Cap Value Fund outperformed their
respective benchmarks in both the third and fourth quarters.
Our website WWW.ARTISANFUNDS.COM launched on October 21, 1999. Your response has
been exceptional. Please visit the website and let us know what you think. More
importantly, based on your feedback, you can look for upgrades and site
expansion in the future.
During the fourth quarter, Lipper Inc. reclassified the Mid Cap Fund, Small Cap
Fund and Small Cap Value Fund into its new Mid-Cap Core Fund, Small-Cap Core
Fund and Small-Cap Value Fund categories, respectively. According to Lipper, the
new classifications will enhance fund evaluations by comparing a fund's
performance to more precisely defined peers and the changes will also allow
investors to more clearly identify which funds best suit their investment needs
and risk tolerances.
As we have discussed in previous communications, the Small Cap Value Fund
intends to close to new investors when it reaches about $250 million in total
assets. This is a change from the intended closing level of $400 million
originally announced. For more information, please refer to the Artisan Funds
prospectus dated October 29, 1999.
Thank you for investing with Artisan Funds. Rest assured, we'll work hard to
continue to earn your confidence.
Sincerely,
/s/ Michael C. Roos
Michael C. Roos
President
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION IS HISTORICAL AND DOES NOT GUARANTEE FUTURE RESULTS.
INTERNATIONAL, SMALL-CAP AND MID-CAP INVESTMENTS INVOLVE SPECIAL RISKS, WHICH
ARE DISCUSSED IN THE PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU
INVEST OR SEND MONEY. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUNDS WILL FLUCTUATE AND ON REDEMPTION MAY BE WORTH MORE OR LESS THAN AN
INVESTOR'S COST. The average annual total returns of the Funds for 1999 and from
inception through 12/31/99 were: International (International Shares): 81.29%
(1-year), 34.96% (from 12/28/95); Mid Cap: 57.89% (1-year), 48.39% (from
6/27/97); Small Cap: 19.18% (1-year), 14.15% (from 3/28/95); Small Cap Value:
15.43% (1-year), 5.21% (from 9/29/97). Artisan Distributors LLC, 1000 North
Water Street, Milwaukee, WI 53202, member NASD.
<PAGE>
ARTISAN
FUNDS
Table of Contents
LETTERS TO SHAREHOLDERS
Small Cap Fund......................2
International Fund..................8
Mid Cap Fund.......................14
Small Cap Value Fund...............20
SCHEDULES OF INVESTMENTS
Small Cap Fund.....................26
International Fund.................30
Mid Cap Fund.......................35
Small Cap Value Fund...............39
STATEMENTS OF
ASSETS AND LIABILITIES................44
STATEMENTS OF OPERATIONS..............45
STATEMENTS OF
CHANGES IN NET ASSETS.................46
FINANCIAL HIGHLIGHTS..................48
NOTES TO
FINANCIAL STATEMENTS..................50
ARTISAN FUNDS
P.O. BOX 8412
BOSTON, MA 02266-8412
- ----------------------------------------
WWW.ARTISANFUNDS.COM
- ----------------------------------------
800.344.1770
- ----------------------------------------
This report and the financial statements contained herein are provided for the
general information of the shareholders of Artisan Funds. This report is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. For more information on any Fund,
including fees and expenses, please call 800.344.1770 or visit our website at
WWW.ARTISANFUNDS.COM for a free prospectus. Read it carefully before you invest
or send money.
Company discussions are for illustration only and are not intended as
recommendations of individual stocks. The discussions present information about
the companies believed to be accurate, and the views of each respective
portfolio manager(s), as of January 1, 2000. That information and those views
may change and the Fund disclaims any obligation to advise shareholders of any
such changes.
Artisan Funds offered through Artisan Distributors LLC, 1000 North Water Street,
Milwaukee, WI 53202, member NASD.
<PAGE>
ARTISAN
SMALL CAP FUND
Letter to Shareholders - December 31, 1999
THE FUND'S PERFORMANCE
Artisan Small Cap Fund's year ended on a high note. The Fund gained 19.93% for
the six months ended December 31, 1999, outperforming both its benchmark and
peer group. For the period, the Fund's performance benchmark, the Russell 2000
Index, rose 10.96%, and its peer group, the Lipper Small-Cap Core Fund Index,
advanced 13.88%.
COMPARATIVE PERFORMANCE
Artisan Russell Lipper
Small Cap 2000 Small-Cap
Fund Index Core Fund Index
- --------------------------------------------------------------------------------
3/28/95 $10,000 $10,000 $10,000
6/30/95 11,520 10,962 10,706
9/30/95 12,650 12,044 11,874
12/31/95 13,283 12,305 12,193
3/31/96 14,059 12,933 13,036
6/30/96 14,785 13,580 13,903
9/30/96 14,160 13,626 13,989
12/31/96 14,858 14,335 14,474
3/31/97 14,150 13,594 13,683
6/30/97 16,459 15,797 16,003
9/30/97 18,627 18,149 18,685
12/31/97 18,226 17,541 17,692
3/31/98 19,566 19,305 19,618
6/30/98 18,883 18,405 18,711
9/30/98 13,976 14,697 14,595
12/31/98 15,771 17,094 17,049
3/31/99 13,891 16,167 15,609
6/30/99 15,672 18,681 17,991
9/30/99 15,531 17,500 17,223
12/31/99 18,795 20,728 20,488
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
FUND / INDEX 1-YEAR 3-YEAR INCEPTION
- --------------------------------------------------------------------------------
Artisan Small Cap Fund 19.18% 8.14% 14.15%
- --------------------------------------------------------------------------------
Russell 2000 Index 21.26% 13.07% 16.52%
- --------------------------------------------------------------------------------
Lipper Small-Cap Core Fund Index 20.17% 12.27% 16.24%
- --------------------------------------------------------------------------------
PERFORMANCE IS HISTORICAL AND DOES NOT GUARANTEE FUTURE RESULTS. AN INVESTMENT
IN A MUTUAL FUND THAT CONCENTRATES ITS PORTFOLIO IN THE STOCKS OF SMALLER
COMPANIES MAY PRESENT ADDITIONAL RISKS INCLUDING A SHORTER HISTORY OF OPERATION,
HIGHER VOLATILITY AND LESS LIQUIDITY, ALL OF WHICH ARE DISCUSSED IN THE
PROSPECTUS. PLEASE READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. Investment
return and principal value will fluctuate so that an investor's shares in the
Fund, when redeemed, may be worth more or less than their original cost. The
graph compares the results of $10,000 invested in Artisan Small Cap Fund on
March 28, 1995 (the date the Fund began operations) with the Russell 2000 Index
and the Lipper Small-Cap Core Fund Index. The Russell 2000 Index is an
unmanaged, market-weighted index of 2,000 small companies. The Lipper Small-Cap
Core Fund Index reflects the net asset weighted return of the 30 largest small-
cap core funds. All index returns include reinvested dividends but do not
include the payment of sales commissions or other expenses incurred in the
purchase of the securities included in the index.
<PAGE>
Shareholders should note that during the fourth quarter, Lipper Inc.
reclassified the Fund to its new Lipper Small-Cap Core Fund category from the
broader Small Cap Fund category. Index performance comparisons reflect this
change. According to Lipper, the new classification will enhance fund
evaluations by comparing a fund's performance to more precisely defined peers
and the change will also allow investors to more clearly identify which funds
best suit their investment needs and risk tolerances.
Artisan Funds paid its distributions on November 11, 1999, to shareholders of
record on November 10, 1999. However, Artisan Small Cap Fund did not pay a
distribution in 1999.
OUR INVESTMENT APPROACH
Several characteristics that are often present in smaller companies - including
limited corporate bureaucracy, lessened government regulation and greater
business impact from new products - can enable these organizations to achieve
higher levels of inherent growth.
The Fund strives to identify those companies between $100 million and $1.5
billion in market capitalization with the greatest prospects for growth. In
searching for these investment opportunities, the Fund looks for the following
criteria.
- Above average earnings growth - greater than 15% per year
- Unrecognized valuation - which may occur due to the complexity of its
business or lack of attention from industry analysts
- High quality management - an experienced management team with the vision,
drive and ability to lead their firms to higher levels of success
- Solid and improving fundamentals - providing a competitive position in its
industry
Through this intensive research process, the Fund determines a company's
"intrinsic value" - that is, the price a strategic buyer would pay to own the
entire company. The Fund generally purchases stocks that are currently at a
substantial discount to this intrinsic value. Due to the Fund's attention to
stock valuations, the strategy is often characterized as "growth-at-a-
reasonable-price."
SIX MONTH REVIEW
For Artisan Small Cap Fund, 1999 was a year with two distinct performance
stories. The Fund's outperformance relative to its benchmark in the last half of
the year contrasted sharply to the Fund's underperformance relative to the
benchmark in early 1999.
The Fund started the year slowly because the portfolio was not well positioned
to participate when the market rallied as the year began. The rally, as we
talked about in our quarterly reports, focused on technology stocks, and our
broad sector diversification limited our gains as we entered the second quarter
of 1999. By mid-April the Fund trailed the Russell 2000 Index in year-to-date
performance.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP FUND
<PAGE>
However, the Fund began to rally toward the end of the second quarter and
finished the year strongly. We view April 13, 1999, as an important date. We
believe it marked a peak for Internet stocks in 1999 and was the beginning of
the market rotating into a broader group of securities, particularly those that
could benefit from a stronger than expected economy.
No doubt the broadening of the market during the second half of the year
assisted in the Fund's turnaround, as did takeover activity. However, we believe
the Fund benefited significantly from our portfolio restructuring activity and
the influence of Marina Carlson, who joined the management team in March. For
her part, Marina brought a focus on sustainable growth and return on invested
capital, in addition to a strong valuation discipline that proved invaluable, we
believe, in elevating the quality of the Fund's portfolio.
PORTFOLIO ACTIVITIES THAT WE BELIEVE BENEFITED THE FUND INCLUDED:
- Selling the Fund's smallest capitalization stocks that remain out of favor
- Improving the Fund's liquidity by increasing the median market cap to about
$700 million
- Adhering to a stricter sell discipline on stocks that underperform the
market
- And, increasing the Fund's exposure to more "direct" technology plays
It is important to note that we have not changed our investment philosophy and
process. We simply refined it in ways that we believe allow us to take advantage
of our stock selection skills. We believe the Fund's performance during the
second half of the year was aided by the value of this approach.
Technology stocks led a surge in small-cap securities during the fourth quarter,
and a number of positions in the Fund's portfolio benefited from the rally.
Also, our healthcare stocks enjoyed a solid quarter, while our capital goods and
consumer services stocks were generally disappointing as the year ended.
- --------------------------------------------------------------------------------
TOP 5 GAINERS<F1> TOP 5 LOSERS<F1>
- --------------------------------------------------------------------------------
SECURITY % SECURITY %
- --------------------------------------------------------------------------------
Technology Solutions Co. 114.3 Service Experts, Inc. -52.9
Clearnet Communications, Inc. 104.5 Wesco International, Inc. -48.1
Smart Modular Technologies, Inc. 75.3 Wet Seal, Inc. -46.6
Apex, Inc. 66.8 Motivepower Industries, Inc. -43.2
Tekelec 59.8 ShopKo Stores, Inc. -27.1
- --------------------------------------------------------------------------------
<F1> For the six months ended December 31, 1999, these are the holdings that
made the largest dollar difference in the portfolio. While some minor
holdings experienced greater percentage changes in price, the change in
their dollar value, did not, on an individual basis, have as meaningful an
effect on the Fund's net assets.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP FUND
<PAGE>
PORTFOLIO CHANGES
We did a fair amount of trading during the period, for several reasons. As is
typical in a market rally, a number of stocks hit our price targets and were
sold. Examples include Applied Power, Burr Brown, Diamond Technology Partners,
Emmis Communications, King Pharmaceuticals, U.S. Freightways and Wild Oats
Markets. Also, we sold selected positions because we believed they were
experiencing deteriorating business trends, we came to regard them as too small
or they were involved in takeover situations.
While seeking new positions for the portfolio, our research efforts focused
primarily on four sectors. For example, in Technology and Telecommunications we
added firms such as Alaska Communications, Digital Microwave, Modis Professional
Services, Paradyne Networks and Pinnacle Systems. Some of the positions we added
in Healthcare included Caremark Rx, Eclypsis, InfoCure and Renal Care Group.
Additions to the portfolio in Services included Claire's Stores, InterTAN and
Martha Stewart Living Omnimedia.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS<F2>
- --------------------------------------------------------------------------------
Company Name % Company Name %
- --------------------------------------------------------------------------------
HealthCare Financial
Partners REIT, 144A 2.2 Medicis Pharmaceutical Corp. 1.7
- --------------------------------------------------------------------------------
Penton Media, Inc. 1.9 Clearnet Communications, Inc. 1.7
- --------------------------------------------------------------------------------
Apex, Inc. 1.9 Daisytek International Corp. 1.6
- --------------------------------------------------------------------------------
NCO Group, Inc. 1.8 Galileo Technology Ltd. 1.6
- --------------------------------------------------------------------------------
Newfield Exploration Company 1.7 Tekelec 1.6
- --------------------------------------------------------------------------------
TOTAL 17.7%
- --------------------------------------------------------------------------------
<F2> As a percentage of total net assets as of December 31, 1999.
On December 31, 1999, the Fund held 82 positions and our Top Ten Holdings
represented 17.7% of net assets. Our median market capitalization was $764
million and our median growth rate was 24%. Our stocks were selling at 16x
estimated 2000 earnings. In other words, we owned these stocks at what we
consider a significant discount to the growth rate of their underlying
companies. And, the median price of our stocks was 65% of our estimate of their
2000 intrinsic value which, to us, showed that we were not abandoning our
valuation discipline.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP FUND
<PAGE>
<TABLE>
<CAPTION>
SECTOR DIVERSIFICATION (%)<F3>
- ---------------------------------------------------------------------------------------------------------------
WEIGHTING WEIGHTING
- ---------------------------------------------------------------------------------------------------------------
SECTOR 6/30/99 12/31/99 SECTOR 6/30/99 12/31/99
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Basic Materials 7.4 4.9 Real Estate Investment Trusts 3.4 3.2
- ---------------------------------------------------------------------------------------------------------------
Capital Goods 3.2 2.8 Services
- --------------------------------------------------- Business Services 10.2 10.9
Conglomerates 0.0 0.0 Consumer Services 24.2 15.2
- ---------------------------------------------------------------------------------------------------------------
Consumer Cyclical 0.0 0.0 Technology 20.9 21.6
- ---------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclical 3.9 5.5 Telecommunications 0.0 9.6
- ---------------------------------------------------------------------------------------------------------------
Energy 6.4 7.4 Transportation 3.8 1.4
- ---------------------------------------------------------------------------------------------------------------
Financial 6.3 6.5 Utilities 1.2 1.4
- ---------------------------------------------------------------------------------------------------------------
Healthcare 7.8 8.5 Other assets less liabilities 1.3 1.1
- ---------------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<F3> As a percentage of total net assets as of June 30, 1999, and December 31,
1999, respectively.
The Sector Diversification table shows that the Fund's holdings remained broadly
diversified by economic sector. While our largest commitments were in Services
and Technology, we attempted to have exposure in generally most market segments.
Note that our Top Ten Holdings, as shown on page 5, represent a relatively small
proportion of assets and only one of these companies represents more than 2% of
assets. We believe this approach helps to reduce Fund volatility, yet places
emphasis on picking stocks, which is where we seek to add the most value.
OUTLOOK AND STRATEGY
These days, small-cap investing seems to be focused narrowly on Internet
capabilities. The market has seemingly divided companies into two camps, the
"new economy" Internet-enabled group and the less favored "old economy" firms,
typically labeled "bricks and mortar" firms.
As we begin 2000, we're evaluating the impact of the Internet on our universe of
companies on several levels. One obvious approach is to look for companies
fitting our investment criteria that are currently involved in Internet
activities. This tends to be a fairly limited universe because, as we have
discussed before, our valuation discipline generally prevents us from owning the
so called "pure play" Internet companies. Yet, we believe we can find ways to
share in the Internet's growth.
For us, there are ways to find Internet investment opportunities that are more
fitting to our investment style. We believe that some of the best Internet
investment opportunities will take the form of "old economy" companies
successfully embracing change and the transitioning to a "new economy" business
model.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP FUND
<PAGE>
In 1999, we successfully employed this approach to benefit from the Internet
rally. For example, the Fund featured firms that supply equipment to the
Internet's infrastructure such as Com21, Galileo Technology and Tekelec.
Internet software or service firms that assist companies in becoming e-enabled
such as Aspect Communications, Mastech and Modis Professional Services were in
the Fund's portfolio. And, a group of other firms - Bell & Howell, Daisytek,
Harbinger, InfoCure and Penton Media - have remade their core competencies to
participate in the Internet. We believe we can position the Fund for significant
opportunities if we find established "bricks and mortar" companies before the
market perceives they have shifted focus toward e-strategies.
Although we are confident on the long-term potential of the Fund's portfolio, we
remain cautious in the near-term. Looking further out, we're quite sanguine. We
believe that the economy will experience another year of strong earnings in
2000, assuming that inflation and interest rates remain tolerable. If so, we
wouldn't be surprised to see a cyclical rally, due in part to what we consider a
huge gap between the highly valued growth stocks and their lower priced cyclical
brethren. Also, we believe the relative under-valuation of small-caps compared
to large-caps continues to make small-caps very attractive, which may yield
small-cap outperformance in 2000.
As always, our focus will be to look for above-average growth potential at what
we regard as a reasonable price. We will search for companies that can
potentially sustain this growth in a predictable fashion, and we expect these
companies to be led by management teams committed to enhancing shareholder
value. In looking for these opportunities, we will continue to favor
underfollowed companies and to conduct our search through numerous sectors of
the economy.
Thank you for your continued confidence.
Sincerely,
/s/ Carlene M. Ziegler /s/ Marina T. Carlson
Carlene M. Ziegler Marina T. Carlson
Portfolio Co-Manager Portfolio Co-Manager
P.S. For daily share prices, year-to-date returns and fund statistics, be sure
to visit our website at WWW.ARTISANFUNDS.COM.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP FUND
<PAGE>
ARTISAN
INTERNATIONAL FUND
(International Shares)
Letter to Shareholders - December 31, 1999
THE FUND'S PERFORMANCE
Artisan International Fund gained 56.53%, during the six months ended December
31, 1999. The Fund significantly outperformed its benchmark, the Morgan Stanley
EAFE Index, which rose 22.12%. Also, the Fund posted results for the six-month
period that were greater than its peer group, the Lipper International Fund
Index, which returned 28.93%.
For the periods ended December 31, 1999, the Fund ranked #6 since inception
(December 28, 1995) and #39 for one year, based on total return, out of 307 and
618 international funds, respectively, as tracked by Lipper Inc.
COMPARATIVE PERFORMANCE
Artisan Lipper
International EAFE International
Fund Index Fund Index
- --------------------------------------------------------------------------------
12/28/95 $10,000 $10,000 $10,000
3/31/96 10,910 10,289 10,467
6/30/96 12,080 10,452 10,895
9/30/96 12,220 10,439 10,903
12/31/96 13,437 10,605 11,472
3/31/97 14,153 10,439 11,756
6/30/97 14,607 11,793 13,072
9/30/97 14,839 11,710 13,322
12/31/97 13,902 10,793 12,303
3/31/98 16,714 12,381 14,129
6/30/98 18,131 12,512 14,249
9/30/98 14,717 10,734 12,000
12/31/98 18,376 12,952 13,861
3/31/99 20,439 13,132 14,039
6/30/99 21,283 13,465 14,818
9/30/99 22,343 14,056 15,317
12/31/99 33,314 16,444 19,105
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
FUND / INDEX 1-YEAR 3-YEAR INCEPTION
- --------------------------------------------------------------------------------
Artisan International Fund 81.29% 35.31% 34.96%
- --------------------------------------------------------------------------------
EAFE Index 26.96% 15.73% 13.19%
- --------------------------------------------------------------------------------
Lipper International Fund Index 37.83% 18.51% 17.50%
- --------------------------------------------------------------------------------
PERFORMANCE IS HISTORICAL AND DOES NOT GUARANTEE FUTURE RESULTS. INTERNATIONAL
INVESTMENTS INVOLVE SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATION,
SOMETIMES LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENT
ACCOUNTING METHODS, WHICH ARE DISCUSSED IN THE PROSPECTUS. PLEASE READ IT
CAREFULLY BEFORE YOU INVEST OR SEND MONEY. Investment return and principal value
will fluctuate so that an investor's shares in the Fund, when redeemed, may be
worth more or less than their original cost. The graph compares the results of
$10,000 invested in Artisan International Fund on December 28, 1995 (the date
the Fund began operations) with the Morgan Stanley Capital International Europe,
Australasia and Far East (EAFE) Index and the Lipper International Fund Index.
EAFE performance, when used in comparison to the Fund's inception date, is
calculated starting 12/31/95. The EAFE Index is an unmanaged index of companies
throughout the world in proportion to world stock market capitalization,
excluding the U.S. and Canada. The Lipper International Fund Index reflects the
net asset weighted return of the 30 largest international funds. All index
returns include reinvested dividends but do not include the payment of sales
commissions or other expenses incurred in the purchase of the securities
included in the index. All information on performance of Artisan International
Fund included in this report is for its International (retail) shares.
<PAGE>
The Fund paid a total distribution of $0.5629 per share on November 11, 1999, to
shareholders of record on November 10, 1999. The distribution included $0.2751
of short-term capital gains, $0.2643 of long-term capital gains and $0.0235 of
ordinary income. The reinvestment NAV was $22.16. No other distributions were
paid in 1999.
OUR INVESTMENT APPROACH
The complexity of international investing lends itself to many investment
approaches. As we initiate our review of the Fund for the past six months, we
believe it's appropriate to survey how we select securities for the Fund's
portfolio.
We maintain that international markets may provide investors with growth
opportunities that are discrete from those obtainable in the U.S. The Fund seeks
to identify companies that we believe are well positioned to capitalize on these
opportunities.
In the global market, a number of factors may influence this process. Attractive
companies may emerge in countries experiencing political or economic change.
Others invite attention due to business trends including deregulation and
privatization, corporate restructuring and consolidation or technological
expansion. These were themes with which we experienced success during 1999.
We are fundamentally stock pickers, attempting to assemble a broadly diversified
portfolio of stocks that are not allocated according to set percentages with
regard to regions or countries. For example, we will not maintain a specific
position in Japan simply because it represents a specific portion of the EAFE
Index. So, our regional and country weightings are a residual of our stock
selections.
Intensive research and analysis are primary elements in our process, with our
portfolio management team traveling widely to meet with company management, its
customers, suppliers and bankers. We are looking for companies that exhibit
specific, essential characteristics. We look for companies with effective
management displaying a focus on shareholder value, a dominant or accelerating
position in their industry and the ability to provide significant and
sustainable growth. Also, we pursue firms trading at what we consider a
reasonable valuation.
SIX MONTH REVIEW
Artisan International Fund ended the year with its best quarter ever, up 49.10%.
And, December marked its best month since inception as the Fund gained 21.54%.
For the month, nearly half of the portfolio holdings gained 20% or more as the
rally in international markets that began in early 1999 accelerated during the
second half of the year. In our opinion, what was especially significant as the
year ended was the buying surge in telecommunications and technology shares.
We contend that the performance of international markets throughout the year
reflected the substantially improved condition of these markets from a year ago
and, in part, from the failure of frequently predicted adverse events to emerge.
For example, emerging markets rebounded strongly as the year began and
maintained their rally through the second half of the year, avoiding the year-
end sell off that was predicted because of Y2K concerns.
LETTER TO SHAREHOLDERS
ARTISAN INTERNATIONAL FUND
<PAGE>
Developed markets also participated in the international comeback, with some,
such as the United Kingdom and Germany, staging late year rallies. France also
displayed a strong economy and participated in the year's closing rally in
technology and telecommunications.
This worldwide surge in technology and telecommunications shares in the fourth
quarter provided the Fund with significant gains. Also, during the period our
holdings in financial services and global media had a positive impact on the
Fund's portfolio.
A notable story for the Fund during the second half of the year was the
increased exposure to Japan. In August, we nearly doubled our Japan weighting as
our research uncovered several attractive opportunities. Some were in industries
where secular growth was strong and others resided in areas where restructuring
offered increased earnings potential.
We made these investments, despite our concerns with Japan's continuing
macroeconomic problems, because, in our view, Japanese companies were starting
to display increased shareholder friendliness, innovation and restructuring.
PORTFOLIO CHARACTERISTICS
On December 31, 1999, total net assets in the Fund were $3.1 billion, of which
$2.3 billion were in the International share class. As of June 30, Fund total
net assets stood at $1.1 billion. Reflecting, in part, strong performance
throughout the portfolio and a shift in portfolio makeup, the median market cap
of our holdings rose to $4.6 billion from $3.7 billion, and the weighted average
market cap rose to $40.4 billion from $17.6 billion.
- -----------------------------------
REGION/COUNTRY ALLOCATION (%)<F1>
- -----------------------------------
EUROPE 51.7%
- -----------------------------------
UNITED KINGDOM 10.6
- -----------------------------------
ITALY 10.0
- -----------------------------------
NETHERLANDS 7.8
- -----------------------------------
FRANCE 5.6
- -----------------------------------
GERMANY 5.6
- -----------------------------------
FINLAND 4.3
- -----------------------------------
SWEDEN 3.3
- -----------------------------------
SWITZERLAND 2.6
- -----------------------------------
SPAIN 1.1
- -----------------------------------
IRELAND 0.3
- -----------------------------------
NORWAY 0.2
- -----------------------------------
AUSTRIA 0.2
- -----------------------------------
PORTUGAL 0.1
- -----------------------------------
DENMARK 0.0<F2>
- -----------------------------------
- -----------------------------------
ASIA/PACIFIC 22.7%
- -----------------------------------
JAPAN 15.4
- -----------------------------------
AUSTRALIA 2.4
- -----------------------------------
HONG KONG 2.3
- -----------------------------------
SINGAPORE 2.0
- -----------------------------------
KOREA 0.3
- -----------------------------------
NEW ZEALAND 0.3
- -----------------------------------
- -----------------------------------
LATIN AMERICA 4.8%
- -----------------------------------
BRAZIL 3.6
- -----------------------------------
MEXICO 1.2
- -----------------------------------
NORTH AMERICA 16.0%
- -----------------------------------
CANADA 13.7
- -----------------------------------
BERMUDA 2.3
- -----------------------------------
OTHER ASSETS LESS LIABILITIES 4.8%
- -----------------------------------
TOTAL 100.0%
- -----------------------------------
<F1> As a percentage of total net assets as of December 31, 1999.
<F2> Less than 0.1%.
LETTER TO SHAREHOLDERS
ARTISAN INTERNATIONAL FUND
<PAGE>
Based on 2000 estimates, our weighted average growth rate of 23.9% fell below
our weighted average P/E of 32x, as the upward movement of many of our holdings
lifted P/E ratios. On December 31, we were 95.2% invested in equities, which we
consider fully invested.
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION (%)<F3>
- --------------------------------------------------------------------------------
SECTOR 6/30/99 12/31/99
- --------------------------------------------------------------------------------
Consumer Cyclical 17.9 18.5
- --------------------------------------------------------------------------------
Consumer Non-Cyclical 11.5 2.7
- --------------------------------------------------------------------------------
Diversified 0.0 0.3
- --------------------------------------------------------------------------------
Financial 21.8 12.7
- --------------------------------------------------------------------------------
Industrial 5.9 9.1
- --------------------------------------------------------------------------------
Technology 6.2 12.6
- --------------------------------------------------------------------------------
Telecommunications (Equipment and Services) 25.1 27.5
- --------------------------------------------------------------------------------
Utilities 8.5 11.8
- --------------------------------------------------------------------------------
Other assets less liabilities 3.1 4.8
- --------------------------------------------------------------------------------
TOTAL 100.0% 100.0%
- --------------------------------------------------------------------------------
<F3> As a percentage of total net assets as of June 30, 1999, and December 31,
1999, respectively.
Concerning sector diversification, there were some notable changes in emphasis
from June 30. A move into media companies boosted Consumer Cyclicals, while
profit taking in food and pharmaceuticals lowered our exposure to Consumer Non-
Cyclicals. The Financial sector de-emphasis reflected the sale of a number of
bank holdings. Our commitment to software companies, in large part, accounted
for the increase in the Technology sector. And increased positions in telephone
utilities accounted for the jump in the Utilities sector. The Telecommunications
sector - equipment and services - also rose. Deregulation, privatization,
technological advances and the growing acceptance of the Internet continued to
create exceptional opportunities in this sector.
Media companies performed quite well for the Fund during this period. Tokyo
Broadcasting System (TBS)<F1> reflects our growing exposure to the media
industry and our renewed interest in Japan. TBS is a leading nationwide
broadcaster in Japan and, in our opinion, appears well positioned to benefit
from both an increase in spending by advertisers and technological change.
We anticipate a recovery in ad spending within Japan. Recent deregulation may
also create increased advertising spending by international companies. With the
launch of a broadcast satellite later this year, TBS may become a multi-channel
broadcaster. Thus, in both content and distribution platforms, the company could
generate growth by exploiting new media opportunities.
<F1> The discussion of Tokyo Broadcasting System (TBS) is for illustration only
and is not intended as a recommendation.
LETTER TO SHAREHOLDERS
ARTISAN INTERNATIONAL FUND
<PAGE>
OUTLOOK AND STRATEGY
We are very optimistic about the potential for long-term capital growth in
markets abroad, believing the investment themes we pursued for most of 1999,
such as restructuring, privatization, deregulation, communications and
information technology, will continue to lead us to investment opportunities.
Restructuring in Europe is having a positive impact in several areas. It's a
subject we discussed in the Fund's most recent Quarterly Update. As we
mentioned, our projection for increased European merger and acquisition (M&A)
activity in 1999 was validated with examples such as the pending hostile
takeover of Mannesman AG, a German telecommunications service provider and one
of the Fund's top holdings, by Vodafone AirTouch, a British mobile
telecommunications firm. Although hostile takeover actions are common in the
U.S., they are only beginning to emerge in Europe. In October, the Financial
Times reported that the third quarter was the first time in seven years that
Europe had more M&A activity than the U.S. From our perspective, increased M&A
activity should promote beneficial changes that may promote Europe's growth and
global competitiveness.
- --------------------------------------------------------------------
TOP TEN HOLDINGS (%)<F4>
- --------------------------------------------------------------------
COMPANY NAME COUNTRY %
- --------------------------------------------------------------------
AT&T Canada, Inc. Canada 3.1
- --------------------------------------------------------------------
Trans Cosmos, Inc. Japan 2.9
- --------------------------------------------------------------------
Mannesmann AG Germany 2.8
- --------------------------------------------------------------------
BCE, Inc. Canada 2.7
- --------------------------------------------------------------------
Nortel Networks Corp. Canada 2.4
- --------------------------------------------------------------------
Global Telesystems Group, Inc. Bermuda 2.3
- --------------------------------------------------------------------
Colt Telecom Group PLC United Kingdom 2.3
- --------------------------------------------------------------------
UnitedGlobalCom, Inc. Netherlands 2.2
- --------------------------------------------------------------------
Telecom Italia Mobile SPA Italy 2.1
- --------------------------------------------------------------------
BIPOP Carire SPA Italy 2.0
- --------------------------------------------------------------------
TOTAL 24.8%
- --------------------------------------------------------------------
<F4> As a percentage of total net assets as of December 31, 1999.
We believe increased M&A activity may also stimulate the equity culture that is
appearing in Europe. In our opinion, the privatization and deregulation
activities in Europe have broadened the attractiveness of investing to European
residents. We believe it's a very healthy change, and one we believe may also be
occurring in Japan.
Other actions may spur development of the European equity culture. Consider a
recent proposal in Germany to eliminate the capital gains tax on equity sales by
corporations. We believe that if this proposal should become law - and we
believe there's great support for it - untold tens of billions of dollars could
be released from Germany's banks, stimulating growth in what is generally
considered Europe's largest economy.
LETTER TO SHAREHOLDERS
ARTISAN INTERNATIONAL FUND
<PAGE>
- --------------------------------------------------------------------------------
TOP 5 GAINERS<F5> TOP 5 LOSERS<F5>
- --------------------------------------------------------------------------------
SECURITY % SECURITY %
- --------------------------------------------------------------------------------
Trans Cosmos, Inc. 316.6 Nichiei Co., Ltd. -74.1
NTT Mobile Communications Network 218.7 Call-Net Enterprises, Inc. -43.7
Colt Telecom Group PLC 119.1 Promise Co. Ltd. -20.0
Nortel Networks Corp. 114.1 Pharmacia & Upjohn, Inc. -19.7
BCE, Inc. 75.9 UBS AG -10.5
- --------------------------------------------------------------------------------
<F5> For the six months ended December 31, 1999, these are the holdings that
made the largest dollar difference in the portfolio. While some smaller
holdings experienced greater percentage changes in price, the change in
their dollar value, did not, on an individual basis, have as meaningful an
effect on the Fund's net assets.
As we discussed earlier, we are beginning to see changes we like in Japan.
Additionally, the Japanese economy may be experiencing a changing of the guard,
as industries like steel and autos - traditional engines of the country's growth
- - are giving ground to technology, telecommunications and Internet firms. The
recent shift in focus in Japan has attracted new foreign investment.
Nonetheless, we've been highly selective in our investments there because its
equity market has been much like our own recently, with its strength narrowly
defined.
The fourth quarter of 1999 was noteworthy for two reasons for Artisan
International Fund. The Fund posted its best quarter of performance since
inception, and during the quarter we were managing the largest amount of assets
we've ever had in the Fund. We are aware of the cautious discussion about fund
size and performance. We firmly believe, however, that international markets
provide us with opportunities that may not be available to other investment
strategies. And, we consider the quality of the stocks in a portfolio far more
important to fund performance than the size of the assets under management.
Although we are unable to predict future performance for the Fund, we believe
the themes we discussed earlier - restructuring, privatization, deregulation,
communications and information technology - should continue to provide us with
investment opportunities that will assist us as we seek to achieve our long-term
investment goals. We look to the future with enthusiasm.
Thank you for your confidence in Artisan International Fund. We will continue
doing our very best to justify your investment.
Sincerely,
/s/ Mark L. Yockey
Mark L. Yockey
Portfolio Manager
P.S. We invite you to visit our website at WWW.ARTISANFUNDS.COM. The site
provides daily share prices, performance information, updated fund
statistics and more.
Effective July 1, 1997, the Fund began offering an institutional class of shares
for institutional investors meeting certain minimum investment requirements. A
report on the institutional class is available under separate cover.
LETTER TO SHAREHOLDERS
ARTISAN INTERNATIONAL FUND
<PAGE>
ARTISAN
MID CAP FUND
Letter to Shareholders - December 31, 1999
THE FUND'S PERFORMANCE
Artisan Mid Cap Fund gained 36.01% for the six months ended December 31, 1999,
solidly outperforming both its benchmark and peer group during the period. For
the period, the Fund's performance benchmark, the S&P 400 Mid Cap Index, rose
7.34%, and its peer group, the Lipper Mid-Cap Core Fund Index, advanced 19.34%.
The Fund has outperformed its benchmark in every quarter since its inception on
June 27, 1997.
Shareholders should note that during the fourth quarter, Lipper Inc.
reclassified the Fund to its new Lipper Mid-Cap Core Fund category. Index
performance comparisons reflect this change.
COMPARATIVE PERFORMANCE
Artisan S&P Lipper
Mid Cap 400 MidCap Mid-Cap Core
Fund Index Fund Index
- --------------------------------------------------------------------------------
6/27/97 $10,000 $10,000 $10,000
9/30/97 12,550 11,573 11,540
12/31/97 12,814 11,669 11,193
3/31/98 14,714 12,954 12,514
6/30/98 14,607 12,677 12,144
9/30/98 13,068 10,843 9,914
12/31/98 17,090 13,899 12,063
3/31/99 17,162 13,013 11,485
6/30/99 19,839 14,855 12,958
9/30/99 19,601 13,607 12,123
12/31/99 26,984 15,945 15,464
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
FUND / INDEX 1-YEAR INCEPTION
- --------------------------------------------------------------------------------
Artisan Mid Cap Fund 57.89% 48.39%
- --------------------------------------------------------------------------------
S&P 400 MidCap Index 14.72% 20.38%
- --------------------------------------------------------------------------------
Lipper Mid-Cap Core Fund Index 28.19% 18.93%
- --------------------------------------------------------------------------------
PERFORMANCE IS HISTORICAL AND DOES NOT GUARANTEE FUTURE RESULTS. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. Investment return and
principal value will fluctuate so that an investor's shares in the Fund, when
redeemed, may be worth more or less than their original cost. The graph compares
the results of $10,000 invested in Artisan Mid Cap Fund on June 27, 1997 (the
date the Fund began operations) with the S&P 400 MidCap Index and the Lipper
Mid-Cap Core Fund Index. The S&P 400 MidCap Index is an unmanaged, market-
weighted index of 400 mid-cap companies. The Lipper Mid-Cap Core Fund Index
reflects the net asset weighted return of the 30 largest mid-cap funds. All
index returns include reinvested dividends but do not include the payment of
sales commissions or other expenses incurred in the purchase of the securities
included in the index.
<PAGE>
According to Lipper, the new classification will enhance fund evaluations by
comparing a fund's performance to more precisely defined peers and that the
change will also allow investors to more clearly identify which funds best suit
their investment needs and risk tolerances.
For the periods ended December 31, 1999, the Fund ranked #5 since inception
(June 27, 1997) and #20 for one year, based on total return, out of 101 and 142
mid-cap core funds, respectively, as tracked by Lipper Inc.
The Fund paid a total distribution of $0.8256 per share on November 11, 1999, to
shareholders of record on November 10, 1999. The distribution included $0.7991
of short-term capital gains and $0.0265 of long-term capital gains. The
reinvestment NAV was $18.22. No other distributions were paid in 1999.
OUR INVESTMENT APPROACH
We believe the mid-cap universe - which we define as stocks with market caps of
generally $600 million to $6 billion - provides compelling investment
opportunities. That's because to us, the mid-cap universe - less efficient than
the large-cap and more mature than the small-cap - has many established
companies that feature emerging franchise characteristics or are poised to
create powerful competitive advantages.
Because we consider ourselves stock pickers and not momentum players, we assess
values of individual companies. We do not seek to predict the direction of the
market as a major element of our process. As we begin our evaluation process we
are looking for the attributes below.
- We concentrate on COMPANIES WITH FRANCHISE CHARACTERISTICS. An established
franchise can bring a company a major competitive advantage and protect it
from some of the effects of competition. Over time, we believe this feature
can lead to more stable cash flow and, ultimately, to higher valuations.
Examples of franchise characteristics are proprietary technology, a leading
brand, dominant market share or the position of low-cost producer.
- We believe a franchise company SELLING AT A MEANINGFUL DISCOUNT TO ITS
INTRINSIC VALUE offers superior long-term investment potential. We define
"intrinsic value" as the price, in our analysis, a knowledgeable or
strategic buyer would pay to own a company's cash flows at some point in
the future. Our estimate of this price guides our buying and selling
decisions, and may help to lower overall portfolio risk. We seek to buy at
an attractive discount and sell when the stock approaches intrinsic value.
- A company with franchise characteristics and an attractive valuation may
also be EXPERIENCING ACCELERATION IN ITS PROFIT CYCLE. This trend may be
driven by an internal catalyst such as a restructuring or a new product
launch, or external factors such as technical innovation or economic
change. We try to spot this trend early to achieve better perspective and
anticipate consensus opinion, thus investing with greater conviction.
LETTER TO SHAREHOLDERS
ARTISAN MID CAP FUND
<PAGE>
Implicit in our process is the insistence on what we consider quality
management, defined as seasoned leaders with the focus and skills to achieve
their distinctive vision. It is a process that often leads us to companies with
compelling long-term business potential that may be temporarily out of favor or
misunderstood by the market.
SIX MONTH REVIEW
The final six months of 1999 covered a remarkable period of growth for the
market. The U.S. economy continued to confound many experts with strong growth
and low inflation. The market responded by embracing technology, represented by
Internet and telecommunications securities.
However, all wasn't smooth sailing during the period for the market. Most stocks
suffered through volatility as the Federal Reserve followed the July interest
rate increase with another in November. The fourth quarter, while volatile, was
far more rewarding, especially for the technology group. Consisting chiefly of
Internet and telecommunications firms, this group surged as the market continued
to favor technology.
Our efforts to find appropriate technology firms for the Fund, which we have
discussed frequently, paid off. An example was our biggest gainer, Omnipoint
Corporation, a digital PCS provider serving nearly 380,000 U.S. customers,
primarily in the Northeast. Another was Exodus Communications, a leader in the
market that hosts websites for large e-commerce companies. Both eBay and
Amazon.com, for instance, use Exodus to host their sites.
- -------------------------------------------------------------------------------
TOP 5 GAINERS<F1> TOP 5 LOSERS<F1>
- -------------------------------------------------------------------------------
SECURITY % SECURITY %
- -------------------------------------------------------------------------------
Omnipoint Corporation 152.1 Federal-Mogul Corp. -44.5
Exodus Communications, Inc. 93.3 GST Telecommunications, Inc. -33.7
Symantec Corporation 57.6 SFX Entertainment, Inc. -20.8
Symbol Technologies, Inc. 47.5 Shared Medical Systems Corp. -16.3
National Semiconductor Corp. 34.2 SunGard Data Systems, Inc. -16.2
- -------------------------------------------------------------------------------
<F1> For the six months ended December 31, 1999, these are the holdings that
made the largest dollar difference in the portfolio. While some minor
holdings experienced greater percentage changes in price, the change in
their dollar value, did not, on an individual basis, have as meaningful an
effect on the Fund's net assets.
We also own Network Solutions, which we believe is a near-monopoly provider of
services for establishing web addresses. It benefited from a recent government
ruling allowing it to maintain its franchise. Another position, National
Semiconductor, benefited from the demand for analog semiconductors, while
restructuring its internal operations to improve its competitiveness and
profitability.
Among our disappointments were firms that we believe are having only temporary
uncertainties. One was UCAR International, a leading maker of carbide graphite
electrodes for the steel industry. New management began an aggressive inventory
reduction program that may be
LETTER TO SHAREHOLDERS
ARTISAN MID CAP FUND
<PAGE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS (%)<F2>
- --------------------------------------------------------------------------------
COMPANY NAME % COMPANY NAME %
- --------------------------------------------------------------------------------
Dynegy, Inc. 3.5 Kinder Morgan, Inc. 2.6
- --------------------------------------------------------------------------------
Polycom, Inc. 3.1 Electronics For Imaging, Inc. 2.6
- --------------------------------------------------------------------------------
Omnipoint Corporation 2.8 Covad Communications Group, Inc. 2.6
- --------------------------------------------------------------------------------
PowerWave Technologies, Inc. 2.7 Millipore Corporation 2.2
- --------------------------------------------------------------------------------
Mettler-Toledo International, Inc. 2.7 Adelphia Communications Corporation 2.0
- --------------------------------------------------------------------------------
TOTAL 26.8%
- --------------------------------------------------------------------------------
<F2> As a percentage of total net assets as of December 31, 1999.
disruptive to earnings in the short-term, yet may ultimately prove beneficial.
Another, SunGard Data Systems, suffered from what we believe to be investor
misperception of post-Y2K spending slowdown by its customers.
An interesting addition to the Fund is United Stationers, a stock discovered by
our senior analyst, Jim Hamel. The company is an example of how we find firms
that provide the Fund access to the growth in the Internet without abandoning
our investment philosophy.<F1>
Ironically, many consider United Stationers to be an old-line distributor of
office products. But to us, it's not the products being distributed, but the
distribution process expertise that is making United Stationers valuable. Taking
advantage of the trend to outsource tasks and the explosive growth of e-
commerce, it services companies with successful websites but inadequate
fulfillment capabilities. United Stationers provides an outsourced turnkey
fulfillment service to e-commerce companies. They'll warehouse materials, manage
inventory, pack, label and ship.
Jim also recommended Zebra Technologies, a thermal bar code printer
manufacturer, which, like United Stationers, was a successful holding for us
during the period.
PORTFOLIO CHANGES
The most notable change in our holdings was the growth in our technology
weighting. We ended the period with 30.9% of assets in Technology - up from
17.5% on June 30 - even after aggressively trimming some holdings in December.
Our technology purchases included:
- ENTRUST TECHNOLOGIES INC., which develops security software to ensure the
privacy of electronic communications and transactions across corporate
intranets and the Internet. Its tools automate the management of digital
certificates and monitor applications such as remote access and e-mail.
Customers include J.P. Morgan, Schlumberger and the U.S. Postal
Service.<F1>
- POWERWAVE TECHNOLOGIES, INC., which builds radio-frequency power amplifiers
to boost signal strength and reduce transmission interference in the base
stations of cellular and personal communications service networks. Some of
the company's larger customers are BellSouth, LG Information &
Communications, Nortel Networks and Samsung.<F1>
<F1> The discussions of United Stationers, Entrust Technologies Inc. and
PowerWave Technologies, Inc. are for illustration only and are not intended
as recommendations.
LETTER TO SHAREHOLDERS
ARTISAN MID CAP FUND
<PAGE>
- VISUAL NETWORKS, INC., which makes management software designed to boost
the reliability and efficiency of large, geographically dispersed computer
networks. The company's software monitors network traffic and performance,
locates bottlenecks and other network problems, warns technicians and
tracks response times. The company's customers include Cargill, Delta Air
Lines and FedEx.<F1>
PORTFOLIO CHARACTERISTICS
On December 31, 1999, the portfolio held 67 stocks and our Top Ten Holdings
represented 26.8% of assets. Our median market cap was $2.7 billion. Based on
our 2000 estimates, these stocks were selling at 17.4x weighted average earnings
- - below their weighted average earnings growth rate of 20.3%. These statistics
compared favorably to our benchmark index and displayed a higher growth rate
than our portfolios in the recent past.
On December 31, 1999, the Fund remained broadly diversified by economic sector.
We believe that participating in many sectors may help to create opportunity,
reduce investment risk and emphasize the area where we add the most value...
picking stocks.
As we've often stressed, attention to valuation is fundamental to our strategy.
Because the market's passion for large-caps drove up their valuations, we were
able to find more compelling values in the smaller end of our market cap range.
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION (%)<F3>
- --------------------------------------------------------------------------------
WEIGHTING WEIGHTING
- --------------------------------------------------------------------------------
INDUSTRY 6/30/99 12/31/99
- --------------------------------------------------------------------------------
Basic Materials 6.5 7.4
- --------------------------------------------------------------------------------
Capital Goods 8.9 11.6
- --------------------------------------------------------------------------------
Conglomerates 1.3 0.0
- --------------------------------------------------------------------------------
Consumer Cyclical 5.1 2.6
- --------------------------------------------------------------------------------
Consumer Non-Cyclical 4.6 1.0
- --------------------------------------------------------------------------------
Energy 5.3 7.5
- --------------------------------------------------------------------------------
Financial 10.0 4.0
- --------------------------------------------------------------------------------
Healthcare 5.4 1.7
- --------------------------------------------------------------------------------
Real Estate Investment Trusts 2.2 0.2
- --------------------------------------------------------------------------------
Services 17.7 13.2
- --------------------------------------------------------------------------------
Technology 17.5 30.9
- --------------------------------------------------------------------------------
Telecommunications 11.6 11.1
- --------------------------------------------------------------------------------
Transportation 1.2 0.0
- --------------------------------------------------------------------------------
Utilities 0.0 4.0
- --------------------------------------------------------------------------------
Other assets less liabilities 2.7 4.8
- --------------------------------------------------------------------------------
TOTAL 100.0% 100.0%
- --------------------------------------------------------------------------------
<F3> As a percentage of total net assets as of June 30, 1999, and December 31,
1999, respectively.
- -----------------------------------------------------------
MARKET CAP DISTRIBUTION<F4>
- -----------------------------------------------------------
MARKET ARTISAN S&P 400
CAP MID CAP FUND MIDCAP INDEX
(in $ billions) (%) (%)
- -----------------------------------------------------------
$0.0 to 0.5 0.2 1.0
- -----------------------------------------------------------
0.5 to 1.0 12.4 7.2
- -----------------------------------------------------------
1.0 to 2.0 26.3 19.3
- -----------------------------------------------------------
2.0 to 3.0 13.7 22.2
- -----------------------------------------------------------
3.0 to 4.0 17.2 11.6
- -----------------------------------------------------------
4.0 to 5.0 10.6 7.5
- -----------------------------------------------------------
5.0 to 6.0 5.6 10.0
- -----------------------------------------------------------
6.0 to 7.0 5.2 3.5
- -----------------------------------------------------------
7.0 to 8.0 4.4 1.7
- -----------------------------------------------------------
8.0+ 4.4 16.0
- -----------------------------------------------------------
TOTAL 100.0% 100.0%
- -----------------------------------------------------------
<F4> As a percentage of portfolio equities as of December 31, 1999.
<F1> The discussion of Visual Networks, Inc. is for illustration only and is not
intended as a recommendation.
LETTER TO SHAREHOLDERS
ARTISAN MID CAP FUND
<PAGE>
OUTLOOK AND STRATEGY
Looking ahead, we believe that potential cash inflows and possible interest rate
increases may cause near-term volatility in the market. We believe some
investors kept cash out of the market because of Y2K concerns. Others, who
watched more aggressive funds post stunning performance numbers, may move their
investments. And, potential positive earnings reports may encourage investors to
move money from the sidelines into equities.
Additionally, we believe the Federal Reserve may feel compelled to raise
interest rates. We believe that in 1999 the Fed allowed the money supply to
expand, perhaps more than they considered appropriate, as a defensive move to
Y2K. If the Fed is uncomfortable with the economy's growth, it may consider a
rate increase to attempt to slow the economy and check inflation. While we can't
predict how these forces will play out, we will attempt to manage accordingly.
We believe our theme of energy convergence has the potential to shine in 2000.
We've been working hard to understand the ongoing deregulation and consolidation
of the nation's energy industries. This convergence into vertically integrated
producers and marketers holds the promise of lower energy costs for consumers
and businesses nationwide. Also, we are seeking companies that can benefit from
the vast, and in our view positive, changes occurring in Europe and the economic
recovery we believe is proceeding in Asia. Holdings such as Manpower, Inc., one
of the world's largest temporary employment companies, and Mettler-Toledo, a
leader in the precision weighing instruments industry, are good examples.
We'll continue our search for opportunities in the Technology sector. However,
we have no intention of losing our perspective or allowing ourselves to be
caught up in the frenzy surrounding this sector. Given technology's explosive
growth and increasing importance to the overall economy, the group's potential
cannot be ignored. Yet, we believe we are being careful in what we buy and how
much we own.
On a personal note, I'd like to take this opportunity to welcome Tom Wooden to
our team as an analyst. In just a few short months, he has proven himself
invaluable in helping us understand and assess some of the trends and issues in
technology. Tom is a former fighter pilot in the U.S. Air Force. We're pleased
he's flying with us now.
From all of us on the team, thank you for your confidence in Artisan Mid Cap
Fund.
Sincerely,
/s/ Andrew C. Stephens
Andrew C. Stephens
Portfolio Manager
P.S. Visit our website at WWW.ARTISANFUNDS.COM for daily share prices,
performance information and fund statistics.
LETTER TO SHAREHOLDERS
ARTISAN MID CAP FUND
<PAGE>
ARTISAN
SMALL CAP VALUE FUND
Letter to Shareholders - December 31, 1999
THE FUND'S PERFORMANCE
Artisan Small Cap Value Fund declined 0.39% for the six months ended December
31, 1999. We saw small-cap value securities continue to struggle for investor
attention. However, on a relative basis, the Fund's performance may be viewed
more favorably considering that for the period, its benchmark, the Russell 2000
Value Index, declined 6.41%, and its peer group, the Lipper Small-Cap Value Fund
Index, declined 4.26%.
COMPARATIVE PERFORMANCE
Artisan Russell Lipper Russell
Small Cap 2000 Small-Cap Value 2000
Value Fund Index Fund Index Value Index
- --------------------------------------------------------------------------------
9/29/97 $10,000 $10,000 $10,000 $10,000
12/31/97 10,310 9,722 9,841 10,220
3/31/98 11,220 10,700 10,725 11,073
6/30/98 11,370 10,201 10,253 10,673
9/30/98 9,079 8,146 8,243 8,765
12/31/98 9,717 9,474 9,180 9,560
3/31/99 9,270 8,960 8,213 8,634
6/30/99 11,258 10,354 9,715 10,063
9/30/99 10,790 9,699 8,978 9,276
12/31/99 11,215 11,488 9,301 9,418
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
FUND / INDEX 1-YEAR INCEPTION
- --------------------------------------------------------------------------------
Artisan Small Cap Value Fund 15.42% 5.21%
- --------------------------------------------------------------------------------
Russell 2000 Index 21.26% 6.34%
- --------------------------------------------------------------------------------
Lipper Small-Cap Value Fund Index 1.32% -3.16%
- --------------------------------------------------------------------------------
Russell 2000 Value Index -1.49% -2.62%
- --------------------------------------------------------------------------------
PERFORMANCE IS HISTORICAL AND DOES NOT GUARANTEE FUTURE RESULTS. AN INVESTMENT
IN A MUTUAL FUND THAT CONCENTRATES ITS PORTFOLIO IN THE STOCKS OF SMALLER
COMPANIES MAY PRESENT ADDITIONAL RISKS INCLUDING A SHORTER HISTORY OF
OPERATIONS, HIGHER VOLATILITY AND LESS LIQUIDITY, ALL OF WHICH ARE DISCUSSED IN
THE PROSPECTUS. PLEASE READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
Investment return and principal value will fluctuate so that an investor's
shares in the Fund, when redeemed, may be worth more or less than their original
cost. The graph compares the results of $10,000 invested in Artisan Small Cap
Value Fund on September 29, 1997 (the date the Fund began operations) with the
Russell 2000 Index, the Russell 2000 Value Index and the Lipper Small-Cap Value
Fund Index. The Russell 2000 Index is an unmanaged, market-weighted index of
2,000 small companies. The Russell 2000 Value Index measures the performance of
those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values. The Lipper Small-Cap Value Fund Index reflects the net
asset weighted return of the 30 largest small-cap value funds. All index returns
include reinvested dividends but do not include the payment of sales commissions
or other expenses incurred in the purchase of the securities included in the
index.
<PAGE>
Shareholders should note that during the fourth quarter, Lipper Inc.
reclassified the Fund to its new Lipper Small-Cap Value Fund category. Index
performance comparisons reflect this change. According to Lipper, the new
classification will enhance fund evaluations by comparing a fund's performance
to more precisely defined peers and that the change will also allow investors to
more clearly identify which funds best suit their investment needs and risk
tolerances.
The Fund paid a total distribution of $0.3757 per share on November 11, 1999, to
shareholders of record on November 10, 1999. The distribution included $0.3439
of short-term capital gains, $0.0047 of long-term capital gains and $0.0271 of
ordinary income. The reinvestment NAV was $9.81. No other distributions were
paid in 1999.
OUR INVESTMENT APPROACH
The Fund invests chiefly in companies with a market capitalization of less than
$1.5 billion. From among them, the management team looks for stocks that are
significantly underpriced in the marketplace. The Fund generally finds such
opportunities in:
- Turnarounds - companies that appear capable of substantially improving
earnings
- Undiscovered or unsponsored stocks - companies that are not widely followed
by analysts
- Companies with hidden assets - undervalued real estate, for example, or
unrecognized business lines
- Companies in the process of change - examples may include new management,
new product lines or a cyclical uptrend in its industry
From among these undervalued companies, the Fund looks for those firms that
provide an additional margin of safety. It does so through in-depth financial
analysis, looking for two major attributes:
- Financial strength - little debt and positive cash flow
- Favorable economics - good returns on capital and free cash flow
SIX MONTH REVIEW
For Artisan Small Cap Value Fund, the second half of 1999 ended better than it
began. The Fund closed the year with positive gains in November and December of
1.44% and 3.99%, respectively, after registering declines in each of the prior
four months.
The market volatility from June through October continued a trend where growth
was favored over value. Technology, with the Internet in particular, seemed to
be preferred to almost all other sectors. Though not weighted significantly in
the favored technology issues, the Fund did benefit a bit from technology during
the year-end rally.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
We've made the point in our Quarterly Updates that technology securities are
generally not candidates for our value style. Yet, we managed to find
opportunities among Information Technology (IT) services companies. The IT
industry revenues slowed dramatically as Y2K preparedness expenditures tailed
off and other IT projects were put on hold until the Y2K hurdle was cleared. As
a result, many IT stock prices plunged. However, our research suggested the
industry would resume its growth in 2000, so we added companies such as Metamor
Worldwide, Complete Business Solutions, Mastech Corporation and Technology
Solutions Company to the portfolio.
When we bought these stocks, we anticipated they could be in the portfolio for
12 to 18 months. But as Y2K concerns evaporated in the fourth quarter, the
market quickly and strongly turned to holdings such as these. If our price
objective was reached, the position was usually sold. Additionally, two
semiconductor equipment holdings, Silicon Valley Group and FSI International,
helped the Fund as the period ended.
The Fund benefited from merger and acquisition activity during the six-month
period. Lone Star Industries, Tristar Aerospace, Ascent Entertainment Group,
Jostens, Giant Cement and Gleason were involved in takeover activity. In
addition, Barnett Inc. and Moore Products both engaged outside advisors to help
them "consider strategic options."
- -------------------------------------------------------------------------------
TOP 5 GAINERS<F1> TOP 5 LOSERS<F1>
- -------------------------------------------------------------------------------
SECURITY % SECURITY %
- -------------------------------------------------------------------------------
Host Marriott Services 91.2 Superior National Insurance Group -68.2
Gleason Corporation 37.2 Acceptance Insurance Companies, Inc. -61.3
Lone Star Industries 36.7 R.G. Barry Corporation -49.3
Giant Cement Holding 36.7 Aviall, Inc. -34.5
Forest Oil Corporation 32.5 Stewart Information Services Corp. -22.1
- -------------------------------------------------------------------------------
<F1> For the six months ended December 31, 1999, these are the holdings that
made the largest dollar difference in the portfolio. While some minor
holdings experienced greater percentage changes in price, the change in
their dollar value, did not, on an individual basis, have as meaningful an
effect on the Fund's net assets.
Among our disappointments were a couple of insurance companies: Acceptance
Insurance and Stewart Information Services.<F1> Acceptance surprised its
investors with a huge reserve increase relating to certain lines of business
written in past years, resulting in a ratings downgrade of the specialty lines
division. Although the company's crop division continues to look viable and
attractive to us, we continue to evaluate the company and its new management
team.
<F1> The profiles of Acceptance Insurance and Stewart Information Services are
for illustration only and are not intended as recommendations.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
Stewart is a title insurer and, as we expected when we made the investment,
rising mortgage rates reduced the segment of its business tied to refinancing.
We continue to view our initial purchase as attractive and have added to the
position. We believe Stewart is profitable, financially sound and
technologically a leader in its industry. Although the industry is cyclical, we
consider it attractive over the long-term.
PORTFOLIO CHANGES
Our sales during the period were primarily holdings that either reached our
price objectives or were subject to merger or acquisition activity. We
concentrated our buying among what we consider better quality businesses that
had come down in price because of the investing environment.
Generally speaking, rising interest rates are currently working against
companies in sectors sensitive to interest rate movement. These companies are
generally favored when rates are falling, and typically fall out of favor when
rates move up. We are now finding what we consider excellent values in interest-
sensitive segments such as financials, title insurers, auto parts suppliers and
engineering and construction firms.
For example, we added John Nuveen, Kaydon Corporation, AK Steel, Carlisle
Companies, First American Financial, Borg-Warner Automotive and Jacobs
Engineering to the portfolio. We consider each of these companies a leader in
its industry, with a strong financial position and above-average profitability,
capable of producing long-term capital growth. Each was available at what we
consider an attractive price. In fact, we're quite excited because we're seeing
additional attractive opportunities like the companies above.
We'd like to highlight Jacobs Engineering. It's a good example of the quality
holdings we have added to the Fund recently. Jacobs provides construction,
engineering and maintenance services to companies in a broad range of
industries. It seeks consistent growth in both revenue and earnings by building
its global presence, making strategic acquisitions and strengthening its client
relationships. We consider this last quality to be a distinguishing
characteristic. In our view, it could enable Jacobs to earn profits we consider
above its industry's average. Also, to us, the company is distinct in its
industry because of its free cash flow generation. Despite what we view as
outstanding attributes, when investors feared that rising interest rates would
slow plant construction, Jacobs' shares were beaten down.<F1>
<F1> The profile of Jacobs Engineering is for illustration only and is not
intended as a recommendation.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
PORTFOLIO CHARACTERISTICS
On December 31, 1999, the Fund held 92 stocks diversified across most major
sectors of the economy, with a median market capitalization of $317 million. By
comparison, we held 79 stocks on June 30, with a median market capitalization of
$242 million. Our Top Ten Holdings represented 22.5% of net assets, our median
P/E was 10.3x our 2000 estimates and our median price/book value was 1.3x. We
believe this profile represents excellent investment value.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS (%)<F2>
- --------------------------------------------------------------------------------
COMPANY NAME % COMPANY NAME %
- --------------------------------------------------------------------------------
Gleason Corporation 2.9 Hilb, Rogal & Hamilton 2.1
- --------------------------------------------------------------------------------
Genlyte Group Inc. 2.7 ADVO, Inc. 2.0
- --------------------------------------------------------------------------------
Jostens, Inc. 2.5 Cleveland Cliffs, Inc. 1.9
- --------------------------------------------------------------------------------
Mueller Industries, Inc. 2.4 EMCOR Group, Inc. 1.9
- --------------------------------------------------------------------------------
Grey Advertising, Inc. 2.2 Annuity and Life RE (Holdings) Ltd. 1.9
- --------------------------------------------------------------------------------
TOTAL 22.5%
- --------------------------------------------------------------------------------
<F2> As a percentage of total net assets as of December 31, 1999.
As you can see in the accompanying table, the Fund's holdings reflect what we
consider a broad diversification by economic sector. While our largest
commitments were in Financials and Basic Materials, we generally attempt to have
exposure to most market segments. We believe this approach helps to enhance
opportunity, reduce volatility and place emphasis on picking stocks, which is
where we seek to add the most value. You will note alterations to our sector
weightings from June 30, 1999. Most notably, we increased our weightings in
Basic Materials and Consumer Cyclicals while decreasing our exposure to
Financials and Services. We believe these changes strengthened the portfolio and
better position it for the realities of today's market.
<TABLE>
<CAPTION>
SECTOR DIVERSIFICATION (%)<F3>
- ---------------------------------------------------------------------------------------------------------------
WEIGHTING WEIGHTING
- ---------------------------------------------------------------------------------------------------------------
INDUSTRY 6/30/99 12/31/99 INDUSTRY 6/30/99 12/31/99
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Basic Materials 15.0 16.8 Real Estate Investment Trusts 2.3 1.3
- ---------------------------------------------------------------------------------------------------------------
Capital Goods 14.6 14.2 Services
- ----------------------------------------------------
Conglomerates 0.0 0.0 Business Services 5.5 4.0
- ----------------------------------------------------
Consumer Cyclical 10.4 13.7 Consumer Services 8.1 4.7
- ---------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclical 1.5 1.5 Technology 7.8 8.7
- ---------------------------------------------------------------------------------------------------------------
Energy 5.5 5.2 Transportation 2.1 1.0
- ---------------------------------------------------------------------------------------------------------------
Financial 22.2 17.2 Utilities 1.7 1.1
- ---------------------------------------------------------------------------------------------------------------
Healthcare 1.0 0.3 Other assets less liabilities 2.3 10.3
- ---------------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<F3> As a percentage of total net assets as of June 30, 1999, and December 31,
1999, respectively.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
OUTLOOK AND STRATEGY
We enter the New Year with optimism. While some are concerned with possible
increases in interest rates, we envision opportunities in interest-sensitive
sectors. As we discussed earlier in the Portfolio Changes section, rising
interest rates may depress the price of cyclical segments such as financials,
auto parts suppliers and construction firms and create what we consider buying
opportunities.
If the Energy sector remains depressed, we may continue to build our positions
in companies such as Santa Fe Snyder, Cabot Oil & Gas and Forest Oil. Holdings
such as these, with strong exposure to natural gas, represent a sector where we
see excellent long-term potential. Other areas we're looking at very selectively
are beaten-down restaurant and retail securities.
However, the strategy of buying attractively priced cyclicals is not without
risk. It's a long-term strategy that may present short-term performance
challenges. Shareholders should be aware that the share price of cyclicals may
continue to be volatile until investor interest in them returns.
We believe, unequivocally, that there's simply no substitute for investment
fundamentals. To us, superior long-term investment returns come from consistent
attention to such factors as valuation, business economics and financial
position. We recognize that investment concepts, like tastes in fashion, music
or food, come and go. However, we believe that investment fundamentals endure
and reward long-term investors.
As we discussed in our review of the fourth quarter, the positive earnings
environment we believe existed at the end of 1999 is continuing. Despite rising
long-term rates and the prospect of rate hikes by the Fed, basic economic trends
continue to be positive for stocks. Our optimism will remain if inflation
remains low, productivity continues to rise, consumers continue to spend and
Americans keep investing.
As we have experienced recently, a relatively few stocks may continue to
dominate the market. If that's the case, strategic or financial buyers may
continue to lead activity in the small-cap value universe. We commented in an
earlier report how we believed that low prices among quality companies would
heighten takeover activity. We experienced such activity in the Fund's portfolio
throughout 1999. In 2000, we expect it may continue if our style remains out of
favor.
Thank you for your confidence.
/s/ Scott C. Satterwhite
Scott C. Satterwhite
Portfolio Manager
P.S. Our newly launched website, WWW.ARTISANFUNDS.COM, incorporates daily share
prices, performance information and fund statistics, along with other
information.
LETTER TO SHAREHOLDERS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
ARTISAN
SMALL CAP FUND
Schedule of Investments - December 31, 1999 (Unaudited)
SHARES MARKET
HELD VALUE
------- -------
COMMON STOCKS - 98.9%
BASIC MATERIALS - 4.9%
CHEMICAL MANUFACTURING - 1.5%
MacDermid, Inc. - specialty chemical manufacturer 43,800 $1,798,538
OM Group, Inc. - specialty chemical manufacturer 22,500 774,844
------------
2,573,382
CONTAINERS & PACKAGING - 2.1%
AptarGroup, Inc. - pumps, valves and closures
for consumer packaging 98,600 2,477,325
<F1>Gaylord Container Corporation - container
board manufacturer 187,200 1,275,300
------------
3,752,625
IRON & STEEL - 1.3%
<F1>Steel Dynamics, Inc. - steel producer 138,500 2,207,344
CAPITAL GOODS - 2.8%
AEROSPACE & DEFENSE - 1.4%
<F1>Alliant Techsystems, Inc. - defense
electronics systems 39,000 2,430,187
MISCELLANEOUS CAPITAL GOODS - 1.4%
Hussmann International, Inc. - commercial
food service equipment 42,800 644,675
<F1>Ritchie Bros. Auctioneers, Inc. - used
industrial equipment auctions 64,900 1,800,975
------------
2,445,650
CONSUMER NON-CYCLICAL - 5.5%
BEVERAGES (ALCOHOLIC) - 1.3%
<F1>Beringer Wine Estates Holdings, Inc. -
wine producer 56,300 2,244,963
FOOD PROCESSING - 1.1%
<F1>Celestial Seasonings, Inc. - specialty teas
and herbal supplements 99,300 1,847,911
OFFICE SUPPLIES - 1.6%
<F1>Daisytek International Corporation -
office automation supplies distributor 123,900 2,888,419
PERSONAL & HOUSEHOLD PRODUCTS - 1.5%
<F1>Playtex Products, Inc. - personal
care products 175,400 2,696,775
ENERGY - 7.4%
OIL & GAS OPERATIONS - 3.4%
<F1>Chieftain International, Inc. - oil and
gas exploration 123,700 2,133,825
<F1>Houston Exploration Company - oil and
gas exploration 39,400 780,613
<F1>Newfield Exploration Company - oil and
gas exploration 114,000 3,049,500
------------
5,963,938
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
ENERGY (CONTINUED)
OIL WELL SERVICES & EQUIPMENT - 4.0%
<F1>Newpark Resources, Inc. - oil and gas
environmental services 390,100 $2,389,363
<F1>Pride International, Inc. - oil and gas
contract drilling services 171,500 2,508,187
<F1>Unit Corporation - oil and gas contract
drilling services 289,000 2,221,687
------------
7,119,237
FINANCIAL - 6.5%
INSURANCE (LIFE) - 2.5%
Reinsurance Group of America, Inc. - life
reinsurance writer 82,300 2,283,825
StanCorp Financial Group, Inc. - group
disability and life insurance 86,000 2,166,125
------------
4,449,950
REGIONAL BANKS - 2.9%
Community First Bankshares, Inc. - North
Dakota-based bank holding company 161,700 2,546,775
<F1>Silicon Valley Bancshares - California-based
bank holding company 23,600 1,168,200
Sterling Bancshares, Inc. - Houston-based bank
holding company 120,700 1,350,331
------------
5,065,306
S&LS/SAVINGS BANKS - 1.1%
MAF Bancorp, Inc. - Chicago savings and
loan association 90,400 1,892,750
HEALTHCARE - 8.5%
BIOTECHNOLOGY & DRUGS - 4.7%
<F1>Caremark Rx, Inc. - pharmacy benefit services 309,400 1,566,337
Dexter Corporation - specialty chemicals
and biochemicals 45,820 1,821,345
<F1>Medicis Pharmaceutical Corporation -
dermatology drugs 71,500 3,043,219
<F1>Techne Corporation - specialty manufacturer
of biological products 32,200 1,773,012
------------
8,203,913
HEALTHCARE FACILITIES - 2.6%
<F1>Renal Care Group, Inc. - nephrology
services provider 112,650 2,633,194
<F1>Res-Care, Inc. - facilities for mentally
retarded and disabled persons 156,100 1,990,275
------------
4,623,469
MEDICAL EQUIPMENT & SUPPLIES - 1.2%
<F1>Laser Vision Centers, Inc. - eye surgery
lasers and services 191,900 2,026,944
REAL ESTATE INVESTMENT TRUSTS - 3.2%
Fortress Investment Corporation, 144A -
specialty real estate investments 107,625 1,816,172
HealthCare Financial Partners REIT, Inc., 144A -
healthcare-related
real estate investments 228,500 3,770,250
------------
5,586,422
SERVICES - 26.1%
BROADCASTING & CABLE TV - 0.7%
<F1>Classic Communications, Inc. - rural market
cable operator 34,100 1,246,781
BUSINESS SERVICES - 9.3%
<F1>Bell & Howell Company - imaging and
information services and systems 79,300 2,522,731
<F1>ChoicePoint, Inc. - risk management services
to the insurance industry 56,200 2,325,275
<F1>F.Y.I. Inc. - document management services 77,500 2,635,000
<F1>Modis Professional Services, Inc. -
information technology services 167,040 2,380,320
<F1>NCO Group, Inc. - accounts
receivable management 102,100 3,075,762
Penton Media, Inc. - trade publications
and trade shows 140,500 3,372,000
------------
16,311,088
PERSONAL SERVICES - 1.2%
Regis Corporation - hair salon operator 106,250 2,005,469
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
SERVICES (CONTINUED)
PRINTING & PUBLISHING - 0.8%
<F1>Martha Stewart Living Omnimedia, Inc. -
lifestyle publishing and merchandising 60,200 $1,444,800
RECREATIONAL ACTIVITIES - 1.3%
<F1>Steiner Leisure Limited - spa
service provider 137,159 2,288,841
RESTAURANTS - 2.7%
<F1>CEC Entertainment, Inc. - Chuck E. Cheese
restaurants 85,500 2,426,062
Morrison Management Specialists, Inc. -
food service to healthcare institutions 108,500 2,339,531
------------
4,765,593
RETAIL (APPAREL) - 2.5%
<F1>The Dress Barn, Inc. - women's
clothing retailer 116,600 1,938,475
<F1>Men's Wearhouse, Inc. - men's
fashion retailer 84,600 2,485,125
------------
4,423,600
RETAIL (SPECIALTY) - 4.1%
Claire's Stores, Inc. - fashion
accessories retailer 99,570 2,227,879
Haverty Furniture Companies, Inc. -
home furnishings retailer 160,200 2,022,525
<F1>ShopKo Stores, Inc. - discount
department stores 122,630 2,820,490
------------
7,070,894
RETAIL (TECHNOLOGY) - 0.9%
<F1>InterTAN, Inc. - electronics products
and services retailer 62,400 1,630,200
SCHOOLS - 1.0%
<F1>ITT Educational Services, Inc. -
technical colleges 112,000 1,729,000
SECURITY SYSTEMS & SERVICES - 1.6%
<F1>ITI Technologies, Inc. - wireless home
security systems 94,700 2,841,000
TECHNOLOGY - 21.6%
COMPUTER PERIPHERALS - 2.8%
<F1>Apex, Inc. - switching systems for
client/server computing 100,700 3,247,575
<F1>Pinnacle Systems, Inc. - video
post-production tools 40,300 1,639,706
------------
4,887,281
COMPUTER SERVICES - 2.4%
<F1>Mastech Corporation - information technology
services 108,000 2,673,000
<F1>Technology Solutions Company - information
technology services 47,844 1,566,891
------------
4,239,891
ELECTRONIC INSTRUMENTS & CONTROLS - 2.5%
<F1>Littelfuse, Inc. - circuit protection devices 92,100 2,234,864
<F1>Plexus Corporation - contract manufacturer 47,200 2,076,800
------------
4,311,664
SCIENTIFIC & TECHNICAL INSTRUMENTS - 2.8%
<F1>Photronics, Inc. - photomasks for
semiconductor manufacturing 93,400 2,673,575
<F1>Veeco Instruments, Inc. - process equipment
for semiconductor and data storage manufacturing 48,200 2,256,363
4,929,938
SEMICONDUCTORS - 4.3%
<F1>Actel Corporation - programmable logic
devices for semiconductor manufacturing 101,900 2,445,600
<F1>Galileo Technology Limited - digital
semiconductor devices 118,485 2,858,451
<F1>International Rectifier Corporation -
power semiconductor manufacturer 83,670 2,175,420
------------
7,479,471
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
TECHNOLOGY (CONTINUED)
SOFTWARE & PROGRAMMING - 6.8%
<F1>Aspect Communications Corporation -
software-based customer interaction software 37,667 $1,473,721
<F1>AVT Corporation - software-based
computer-telephony solutions 54,000 2,538,000
<F1>Eclipsys Corporation - software-based
decision support systems to hospitals 33,600 861,000
<F1>Harbinger Corporation - software-based
electronic commerce enabler 76,500 2,433,656
<F1>InfoCure Corporation - software-based
physician practice management systems 85,300 2,660,294
<F1>Systems & Computer Technology Corporation -
enterprise software services 100,800 1,638,000
<F1>Verity, Inc. - software-based search and
knowledge retrieval solutions 8,100 344,756
------------
11,949,427
TELECOMMUNICATIONS - 9.6%
COMMUNICATIONS EQUIPMENT - 4.7%
<F1>Com21, Inc. - cable broadband access products 75,900 1,703,006
<F1>Digital Microwave Corporation -
wireless broadband access products 85,024 1,992,750
<F1>Paradyne Networks, Inc. - broadband network
access products 61,200 1,667,700
<F1>Tekelec - data network switching and
diagnostic systems 126,630 2,849,175
------------
8,212,631
COMMUNICATIONS SERVICES - 4.9%
<F1>Alaska Communications Systems Group, Inc. -
Alaska-based telecommunication service provider 200,100 2,476,238
<F1>American Mobile Satellite Corporation -
nationwide wireless data network 109,600 2,308,450
<F1>Clearnet Communications, Inc. - wireless
telecommunications services 85,740 2,947,313
<F1>Commonwealth Telephone Enterprises, Inc. -
Pennsylvania-based telecommunications
service provider 15,600 824,850
------------
8,556,851
TRANSPORTATION - 1.4%
AIRLINE - 1.4%
SkyWest, Inc. - West Coast regional airline 86,600 2,424,800
UTILITIES - 1.4%
NATURAL GAS UTILITIES - 1.4%
Energen Corporation - Alabama-based natural
gas utility and oil & gas exploration 133,600 2,413,150
TOTAL COMMON STOCKS (Cost $148,050,130) 173,181,555
WARRANTS - 0.0%
HealthCare Financial Partners REIT,
expires 4/28/01 (Cost $0) 91,400 -
SHORT TERM INVESTMENTS - 1.5%
Repurchase agreement with State Street Bank
and Trust Company, 2.5%, dated 12/31/99,
due 1/3/2000, maturity value $2,688,560, Par
collateralized by $2,745,225 market value Amount
U.S. Treasury Bond, 8.75%, due 8/15/20 ---------
(Cost $2,688,000) $2,688,000 2,688,000
------------
TOTAL INVESTMENTS - 100.4% (Cost $150,738,130) 175,869,555
OTHER ASSETS LESS LIABILITIES - (0.4)% (792,046)
------------
TOTAL NET ASSETS - 100.0%<F2> $175,077,509
============
<F1> Non-income producing securities.
<F2> Percentages for the various classifications relate to total net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP FUND
<PAGE>
ARTISAN
INTERNATIONAL FUND
Schedule of Investments - December 31, 1999 (Unaudited)
SHARES MARKET
HELD VALUE
------- -------
COMMON AND PREFERRED STOCKS - 95.2%
AUSTRALIA - 2.4%
<F1>Cable & Wireless Optus Limited -
telecommunication services 8,274,600 $27,650,284
Colonial Limited - diversified
financial services 6,432,382 28,757,672
<F1>LibertyOne Limited - internet
content provider 15,300,000 16,874,679
------------
73,282,635
AUSTRIA - 0.2%
Bank Austria AG - diversified financial services 80,000 4,512,926
BERMUDA - 2.3%
<F1>Global Telesystems Group, Inc.<F2> -
telecommunication services 2,040,160 70,640,540
BRAZIL - 3.6%
<F1>Celular CRT Participacoes S.A. -
telecommunication services 89,859,900 15,668,900
Cia de Saneamento Basico de Estado de Sao Paulo -
water and sewage utility 53,890,000 6,327,190
Cia Riograndense Telecomunicacoes - Preferred -
telecommunication services 63,204,900 19,592,994
Empresa Brasileira Aeronautica S.A. -
aircraft manufacturer 1,941,000 8,756,795
Telecomunicacoes Brasileiras S.A. (ADR) -
telecommunication services 267,500 34,373,750
Telecomunicacoes de Sao Paulo S.A. (ADR) -
telecommunication services 474,000 11,583,375
Telesp Celular Participacoes S.A. (ADR) -
cellular telecommunication services 346,500 14,682,938
------------
110,985,942
CANADA - 13.7%
<F1>AT&T Canada, Inc.<F2> -
telecommunication services 2,376,400 95,650,100
<F1>BCE Emergis, Inc. - information
technology services 77,500 4,160,894
BCE, Inc. - telecommunication services 912,000 82,860,270
<F1>Certicom Corporation - computer software 160,700 9,574,091
<F1>Clearnet Communications, Inc. - Class A<F2> -
cellular telecommunication services 1,540,500 52,954,688
<F1>Cognos, Inc.<F2> - computer software 286,700 13,224,038
<F1>Corus Entertainment, Inc. -
Class B - multimedia 939,850 19,207,187
Nortel Networks Corporation<F2> -
telecommunications equipment 727,000 73,427,000
Shaw Communications Inc. - Class B -
cable television 774,500 25,566,280
<F1>Telesystem International Wireless, Inc. -
cellular telecommunication services 1,199,050 44,107,761
------------
420,732,309
DENMARK - 0.0%<F3>
NESA A/S - electric utility 8,438 687,474
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
FINLAND - 4.3%
<F1> Comptel Oyj - communications software 24,200 $1,702,550
Helsingin Puhelin Oyj - telecommunication services 239,200 19,927,229
Nokia Corporation (ADR) -
telecommunication equipment 200,800 38,152,000
PMJ Automec Oyj - electronic components 118,850 1,397,173
Sonera Group Oyj - telecommunication services 634,200 43,474,501
Tietoenator Oyj - information technology services 438,900 27,411,796
------------
132,065,249
FRANCE - 5.6%
Axa - multi-line insurance 80,000 11,153,375
Bouygues SA - building and construction 68,500 43,541,177
Groupe Danone - food and beverage producer 77,200 18,197,569
Hachette Filipacchi Medias - publishing
and periodicals 195,319 12,395,535
Havas Advertising S.A. - advertising 99,094 42,224,834
Suez-Lyonnaise des Eaux S.A. - building
and construction 79,500 12,741,411
Unilog SA - information technology services 283,800 30,961,435
------------
171,215,336
GERMANY - 5.6%
<F1> 1&1 Aktiengesellschaft & Co. -
advertising services 114,691 17,099,022
Deutsche Bank AG - money center bank 209,000 17,653,450
<F1> LHS Group, Inc.<F2> - communications software 103,500 2,542,219
Mannesmann AG - machinery/general industry 361,200 87,143,197
Marseille-Kliniken AG - healthcare services 144,457 1,586,154
<F1> PrimaCom AG - cable television 150,500 9,126,688
ProSieben Media AG - television content 136,700 7,945,561
SAP AG-Vorzug - enterprise software & services 12,000 7,228,741
<F1> Software AG - enterprise software & services 346,407 21,111,654
------------
171,436,686
HONG KONG - 2.3%
<F1>China Telecom (Hong Kong) Limited - cellular
telecommunication services 9,417,100 58,754,661
<F1>Founder Hong Kong Limited - computer-
integrated systems and software applications 10,162,900 12,420,087
------------
71,174,748
IRELAND - 0.3%
Bank of Ireland - commercial bank 976,600 7,771,843
ITALY - 10.0%
Autogrill SPA - restaurants 1,923,000 24,214,167
Autostrade Concessioni e Construzioni Autostrade
SPA, Roma - transportation services 2,226,700 15,163,122
BIPOP Carire SPA - financial services 680,800 60,247,848
Class Editori SPA - publishing 851,900 14,846,188
<F1>Finmatica SPA - enterprise software/services 1,082,100 34,336,670
Gucci Group NV<F2> - apparel manufacturer 333,200 38,151,400
<F1>Olivetti SPA - telecommunication services 8,707,500 25,218,053
Telecom Italia Mobile SPA - cellular
telecommunication services 5,674,000 63,387,133
Unicredito Italiano SPA - commercial bank 6,000,000 29,495,197
------------
305,059,778
SCHEDULE OF INVESTMENTS
ARTISAN INTERNATIONAL FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
JAPAN - 15.4%
Asatsu-DK Inc. - advertising agencies 354,500 $23,940,981
Banyu Pharmaceutical Co., Ltd. - pharmaceuticals 770,300 11,949,942
Daiwa Securities Group, Inc. -
brokerage/investment banking 672,800 10,529,580
Fujitsu Limited - computer manufacturer/information
technology services 852,500 38,882,745
ISB Corporation - software 1,000 33,278
KDD Corporation - telecommunication services 213,250 29,554,860
NEC Corporation - electronic
manufacturer/information technology services 1,071,100 25,527,342
Nihon Unisys, Ltd. - computer integrated
services/information technology services 330,600 11,389,958
Nippon Telegraph & Telephone Corporation -
integrated telephone services 3,398 58,202,018
Nippon Television Network Corporation -
television broadcasting 9,160 10,758,540
NTT Mobile Communications Network, Inc. -
cellular telecommunication services 1,479 56,890,184
Promise Co. Ltd. - consumer finance 498,700 25,381,619
Takefuji Corporation - consumer finance 232,200 29,067,613
Tokyo Broadcasting System, Inc. -
television broadcasting 910,000 30,817,266
Toyo Information Systems Co., Ltd. - information
technology services 284,000 20,013,703
Trans Cosmos, Inc. - outsourcing/information
technology services 209,300 89,316,632
------------
472,256,261
KOREA - 0.3%
SK Telecom Co. Ltd. (ADR) - cellular
telecommunication services 265,328 10,181,962
MEXICO - 1.2%
<F1>Cifra S.A. de C.V. Series V -
department stores 11,055,000 22,168,338
<F1>Grupo Financiero Inbursa S.A. de C.V. -
Class O - brokerage, insurance and
financial services 1,826,489 7,479,448
<F1>Seguros Comercial America - Class B -
multi-line insurance 927,500 3,475,066
Sigma Alimentos S.A. - Class B - food producer 1,270,077 2,680,901
------------
35,803,753
NETHERLANDS - 7.8%
ASR Verzekeringsgroep N.V. - multi-line
insurance company 140,000 8,913,029
Athlon Groep NV - automobile leasing 325,025 7,055,768
Koninklijke KPN NV - telecommunications services 613,807 59,915,038
<F1>MIH Ltd.<F2> - cable & satellite television 589,800 34,798,200
<F1>UnitedGlobalCom, Inc.<F2> - cable television 943,000 66,599,375
<F1>Versatel Telecom International NV -
telecommunication services 937,300 33,046,608
VNU NV - publishing-newspapers 563,100 29,598,509
------------
239,926,527
NEW ZEALAND - 0.3%
Contact Energy Limited - electric utility 4,231,500 7,406,710
NORWAY - 0.2%
P4 Radio Hele Norge ASA - radio stations 1,139,600 5,834,980
PORTUGAL - 0.1%
<F1>PT Multimedia - Servicos de Telecomunicacoes e
Multimedia, S.A. - internet service provider 60,200 3,424,479
SINGAPORE - 2.0%
DBS Group Holdings Limited - money center banks 2,402,807 39,385,548
Oversea Chinese Banking Corporation Ltd. -
money center banks 2,525,750 23,202,627
------------
62,588,175
SCHEDULE OF INVESTMENTS
ARTISAN INTERNATIONAL FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
SPAIN - 1.1%
Argentaria, Caja Postal y Banco Hipotecario de
Espana S.A. - commercial bank 592,000 $13,912,868
Banco Santander Central Hispano, S.A. -
money center bank 1,669,000 18,897,436
------------
32,810,304
SWEDEN - 3.3%
Alfaskop AB - information technology services 187,900 2,550,529
<F1>Connecta AB - information technology services 156,000 5,316,723
<F1>Information Highway AB - information
technology services 189,050 31,326,889
Pharmacia & Upjohn, Inc.<F2> - pharmaceuticals 295,000 13,275,000
Telefonaktiebolaget LM Ericsson - Class B (ADR)-
telecommunications equipment 758,650 49,833,822
------------
102,302,963
SWITZERLAND - 2.6%
ABB Limited - engineering services 311,354 38,080,884
<F1>Geberit International AG - building and
construction products 41,959 14,361,399
Julius Baer Holding AG - Class B - commercial bank 9,314 28,135,615
------------
80,577,898
UNITED KINGDOM - 10.6%
Carlton Communications PLC - television content 2,750,400 26,789,610
<F1>Colt Telecom Group PLC -
telecommunication services 1,341,800 69,270,416
<F1>Easynet Group PLC - internet service provider 593,400 16,534,454
<F1>Energis PLC - telecommunication services 355,959 17,105,673
Granada Group PLC - television content 890,000 8,985,107
Pearson PLC - publisher 675,000 21,970,101
Railtrack Group PLC - rail transportation 964,000 16,194,353
Reckitt & Colman PLC - household products 1,679,000 15,892,841
Saatchi & Saatchi PLC -
advertising/media services 4,485,100 26,878,143
Schroders PLC - international merchant
banking group 938,000 18,878,788
Stagecoach Holdings PLC - transportation services 9,751,000 25,043,758
<F1>Telewest Communications PLC -
cable television 5,171,304 27,440,288
<F1>Thus PLC - telecommunication services 1,718,000 10,850,585
WPP Group PLC - advertising agency 1,465,000 22,954,222
------------
324,788,339
TOTAL COMMON AND PREFERRED STOCKS (Cost $1,858,866,262) 2,917,467,817
SHORT TERM INVESTMENTS - 4.2%
Repurchase agreement with State Street Bank
and Trust Company, 2.5%, dated 12/31/99,
due 1/3/2000, maturity value $129,660,007, Par
collateralized by $132,231,450 market value Amount
U.S. Treasury Bond, 8.750%, due 8/15/2020 --------
(Cost $129,633,000) $129,633,000 129,633,000
------------
TOTAL INVESTMENTS - 99.4% (Cost $1,988,499,262) 3,047,100,817
OTHER ASSETS LESS LIABILITIES - 0.6% 19,671,291
------------
TOTAL NET ASSETS - 100.0%<F4> $3,066,772,108
==============
<F1> Non-income producing security.
<F2> Principally traded in the United States.
<F3> Represents less than 0.1% of net assets.
<F4> Percentages for the various classifications relate to total net assets.
(ADR) American Depository Receipt.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SCHEDULE OF INVESTMENTS
ARTISAN INTERNATIONAL FUND
<PAGE>
ARTISAN
INTERNATIONAL FUND
Portfolio Diversification - December 31, 1999 (Unaudited)
MARKET VALUE PERCENTAGE
------------ ----------
Consumer Cyclical $568,381,185 18.5%
Consumer Non-Cyclical 83,596,110 2.7%
Diversified 8,985,106 0.3%
Financial 386,851,551 12.7%
Industrial 279,193,816 9.1%
Technology 385,656,856 12.6%
Telecommunications
(Equipment and Services) 842,213,313 27.5%
Utilities 362,589,880 11.8%
-------------- -------
TOTAL COMMON AND PREFERRED STOCKS 2,917,467,817 95.2%
Total short-term investments 129,633,000 4.2%
-------------- -------
TOTAL INVESTMENTS 3,047,100,817 99.4%
OTHER ASSETS LESS LIABILITIES 19,671,291 0.6%
-------------- -------
TOTAL NET ASSETS $3,066,772,108 100.0%
============== =======
SCHEDULE OF INVESTMENTS
ARTISAN INTERNATIONAL FUND
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
<PAGE>
ARTISAN
MID CAP FUND
Schedule of Investments - December 31, 1999 (Unaudited)
SHARES MARKET
HELD VALUE
------- -------
COMMON STOCKS - 95.2%
BASIC MATERIALS - 7.4%
CHEMICAL MANUFACTURING - 2.4%
Minerals Technologies, Inc. - specialty
chemicals for paper industry 32,000 $ 1,282,000
<F1> Symyx Technologies, Inc. -
chemical development 37,000 1,110,000
------------
2,392,000
CHEMICALS - PLASTICS & RUBBER - 1.6%
Rohm & Haas Company - specialty chemicals 37,500 1,525,781
CONTAINERS & PACKAGING - 1.3%
Sealed-Air Corporation - specialty packaging 24,000 1,243,500
MISCELLANEOUS FABRICATED PRODUCTS - 2.1%
<F1>UCAR International Inc. - carbon graphite
manufacturer for steel industry 63,500 1,131,094
W.W. Grainger, Inc. - distributor of
industrial supplies 19,200 918,000
------------
2,049,094
CAPITAL GOODS - 11.6%
CONSTRUCTION SERVICES - 1.0%
<F1>Quanta Services, Inc. - installation and
repair of telecommunication and utility lines 35,000 988,750
MISCELLANEOUS CAPITAL GOODS - 9.4%
<F1>American Power Conversion Corporation -
uninterruptible power supplies 61,500 1,622,063
<F1>Mettler-Toledo International, Inc. -
precision weighing instruments 70,000 2,673,125
Millipore Corporation - commercial
filtration equipment 55,500 2,143,687
Symbol Technologies, Inc. - manufacturer and
marketer of scanning products 15,500 985,219
<F1>Zebra Technologies Corporation - thermal
bar code printer manufacturer 31,000 1,813,500
------------
9,237,594
SCIENTIFIC & TECHNICAL INSTRUMENTS - 1.2%
<F1>Varian, Inc. - scientific instruments
and equipment 52,500 1,181,250
CONSUMER CYCLICAL - 2.6%
APPLIANCE & TOOL - 1.0%
Danaher Corporation - industrial tools and
process/environmental controls 20,300 979,475
AUTO & TRUCK PARTS - 1.6%
SPX Corporation - diversified industrial and
electrical products and services 18,800 1,519,275
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
CONSUMER NON-CYCLICAL - 1.0%
OFFICE SUPPLIES - 1.0%
<F1>United Stationers, Inc. - business
products wholesaler 36,000 $1,028,250
ENERGY - 7.5%
OIL & GAS OPERATIONS - 4.9%
<F1>Devon Energy Corporation - natural gas
and exploration company 43,000 1,413,625
<F1>Dynegy, Inc. - independent power producer
and energy marketer 140,000 3,403,750
------------
4,817,375
OIL WELL SERVICES & EQUIPMENT - 2.6%
<F1>Nabors Industries, Inc. - contract land
drilling services 40,500 1,252,969
<F1>Weatherford International, Inc.- diversified
energy services 31,500 1,258,031
------------
2,511,000
FINANCIAL - 4.0%
INSURANCE (LIFE) - 1.0%
<F1>ReliaStar Financial Corporation - insurance
and annuity provider 24,000 940,500
INVESTMENT SERVICES - 0.9%
Neuberger Berman, Inc. - investment management 37,000 920,375
REGIONAL BANKS - 0.9%
Zion Bancorporation - Western United States
regional bank 15,500 917,406
S&LS/SAVINGS BANKS - 1.2%
Charter One Financial, Inc. - savings and loan 59,545 1,138,798
HEALTHCARE - 1.7%
MEDICAL EQUIPMENT & SUPPLIES - 1.7%
<F1>Sybron International Corporation - dental
supplies manufacturer 66,000 1,629,375
REAL ESTATE INVESTMENT TRUSTS - 0.2%
HealthCare Financial Partners REIT, Inc., 144A -
healthcare-related real estate investments 10,500 173,250
SERVICES (BUSINESS SERVICES) - 4.0%
BUSINESS SERVICES - 2.5%
<F1>Internet.com Corporation - content portal
focused on IT professionals 16,000 836,000
Manpower, Inc. - U.S. and European temporary
staffing firm 43,000 1,617,875
------------
2,453,875
COMPUTER SERVICES - 0.9%
Shared Medical Systems Corporation - computer
services for the healthcare industry 18,000 916,875
COMMUNICATION SERVICES - 0.6%
<F1>IXnet, Inc. - communication systems for the
financial industry 19,500 587,438
SCHEDULE OF INVESTMENTS
ARTISAN MID CAP FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
SERVICES (CONSUMER SERVICES) - 9.2%
BROADCASTING & CABLE TV - 5.1%
<F1>Adelphia Communications Corporation - cable
television operator 30,522 $2,003,006
<F1>Liberty Media, Class A - cable
television programming 33,000 1,872,750
<F1>Radio One, Inc. - urban music programming 11,900 1,094,800
------------
4,970,556
MOTION PICTURES - 1.2%
<F1>IMAX Corporation - developer of specialty
movies and theaters 43,000 1,177,125
PRINTING & PUBLISHING - 0.8%
<F1>Primedia, Inc. - niche magazines and
trade journals 49,000 808,500
RETAIL (DEPARTMENT & DISCOUNT) - 1.1%
<F1>Tuesday Morning Corporation -
specialty retailer 59,500 1,097,031
RETAIL (TECHNOLOGY) - 1.0%
<F1>InterTAN, Inc. - electronics retailer 35,900 937,888
TECHNOLOGY - 30.9%
COMMUNICATIONS EQUIPMENT - 5.8%
<F1>Polycom, Inc. - teleconferencing products 47,900 3,050,631
<F1>PowerWave Technologies, Inc. - power
amplifiers for wireless communications 46,000 2,685,250
------------
5,735,881
COMPUTER NETWORKS - 0.7%
<F1>Netscout Systems, Inc. - telecommunication
network monitoring software 22,400 694,400
COMPUTER PERIPHERALS - 1.0%
<F1>National Instruments Corporation - software
for industrial automation 24,500 937,125
COMPUTER SERVICES - 3.5%
<F1>Exodus Communications, Inc. - web
hosting services 8,400 746,025
<F1>Fiserv, Inc. - administrative processing
for financial institutions 26,000 996,125
<F1>Network Solutions, Inc. - domain registrar
for internet sites 4,600 1,000,788
<F1>SunGard Data Systems, Inc. - recordkeeping
software and systems for investment management 29,000 688,750
------------
3,431,688
COMPUTER STORAGE DEVICES - 1.0%
<F1>SanDisk Corporation - flash memory data
storage manufacturer 10,500 1,010,625
SCIENTIFIC & TECHNICAL INSTRUMENTS - 1.9%
<F1>Cognex Corporation - supplier of machine
vision equipment 4,700 1,833,000
SEMICONDUCTORS - 3.2%
<F1>National Semiconductor Corporation -
semiconductor designer and manufacturer 45,900 1,965,094
<F1>SDL, Inc. - manufacturer of semiconductor
lasers, fiber optic related products and
optoelectric systems 5,200 1,133,600
------------
3,098,694
SCHEDULE OF INVESTMENTS
ARTISAN MID CAP FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
TECHNOLOGY (CONTINUED)
SOFTWARE & PROGRAMMING - 13.8%
<F1>Amdocs Ltd. - billing systems for wireless
and wireline operators 33,500 $ 1,155,750
<F1>Cadence Design Systems, Inc. - electronic
design automation provider 50,500 1,212,000
<F1>Electronics for Imaging, Inc. - products
for digital color printing 43,500 2,528,436
<F1>Entrust Technologies, Inc. - electronic
security products and services 28,500 1,708,219
<F1>InterVu, Inc. - network for streaming
audio/video delivery 19,000 1,995,000
<F1>J.D. Edwards & Company - enterprise resource
planning (ERP) software solutions 53,000 1,583,375
<F1>Symantec Corporation - utility software for
businesses and PCs 21,000 1,231,125
<F1>Transaction Systems Architects, Inc. -
develops, markets, installs and supports
software for e-commerce 35,000 980,000
<F1>Visual Networks, Inc. - wide area network
(WAN) management systems 14,500 1,149,125
------------
13,543,030
TELECOMMUNICATIONS - 11.1%
COMMUNICATIONS SERVICES - 11.1%
<F1>Citizens Utilities Company - local wireline
telephone operator 136,000 1,929,500
<F1>Clearnet Communications, Inc. -
telecommunication services 31,000 1,065,625
<F1>Covad Communications Group, Inc. -
telecommunication services 45,000 2,517,188
<F1>Microcell Telecommunications, Inc. - Canadian
personal communications services 38,000 1,249,250
<F1>Omnipoint Corporation -
telecommunication services 22,500 2,714,063
<F1>Western Wireless Corporation -
telecommunication services 21,000 1,401,750
------------
10,877,376
UTILITIES - 4.0%
ELECTRIC UTILITIES - 1.3%
<F1>Calpine Corporation - power
generation facilities 20,500 1,312,000
NATURAL GAS UTILITIES - 2.7%
Kinder Morgan, Inc. - integrated energy
services provider 128,000 2,584,000
TOTAL COMMON STOCKS (COST $73,067,403) 93,200,155
WARRANTS - 0.0%
HealthCare Financial Partners REIT,
expires 4/28/01 - (Cost $0) 4,200 -
SHORT TERM INVESTMENTS - 4.1%
Repurchase agreement with State Street Bank and
Trust Company, 2.5%, dated 12/31/99,
due 01/03/2000, maturity value $4,061,846, Par
collateralized by $4,146,250 market value Amount
U.S. Treasury Bond 7.125%, due 12/15/2023, -------
(Cost $4,061,000) $4,061,000 4,061,000
------------
TOTAL INVESTMENTS - 99.3% (Cost $77,128,403) 97,261,155
OTHER ASSETS LESS LIABILITIES - 0.7% 716,599
------------
TOTAL NET ASSETS - 100.0%<F2> $97,977,754
============
<F1> Non-income producing securities.
<F2> Percentages for the various classifications relate to total net assets.
SCHEDULE OF INVESTMENTS
ARTISAN MID CAP FUND
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
ARTISAN
SMALL CAP VALUE FUND
Schedule of Investments - December 31, 1999 (Unaudited)
SHARES MARKET
HELD VALUE
------- -------
COMMON STOCKS - 89.7%
BASIC MATERIALS - 16.8%
CHEMICAL MANUFACTURING - 1.2%
<F1>American Pacific Corporation - specialty
chemicals for aerospace and defense 124,100 $1,054,850
<F1>CFC International, Inc. - specialty
chemical coatings 100,100 613,113
Terra Industries, Inc. - agricultural chemicals 53,000 86,125
------------
1,754,088
CONTAINERS & PACKAGING - 1.5%
Greif Brothers Corporation, Class A - shipping
containers and packaging manufacturer 71,700 2,133,075
FABRICATED PLASTIC & RUBBER - 2.0%
Carlisle Companies, Inc. - diversified
manufacturer of durable products 65,300 2,350,800
<F1>Gundle SLT/Environmental, Inc. - landfill
lining systems 137,900 482,650
------------
2,833,450
IRON & STEEL - 4.8%
AK Steel Holding Corporation - flat rolled
carbon steel manufacturer 80,400 1,517,550
Intermet Corporation - iron and aluminum 199,200 2,315,700
LTV Corporation - integrated steel manufacturer 195,100 804,787
Roanoke Electric Steel Corporation -
fabricated steel products 60,700 986,375
Schnitzer Steel Industries, Inc., Class A -
steel scrap processor and minimill operation 63,000 1,197,000
------------
6,821,412
METAL MINING - 1.9%
Cleveland Cliffs, Inc. - iron ore supplier 87,200 2,714,100
MISCELLANEOUS FABRICATED PRODUCTS - 5.4%
<F1>Barnett, Inc. - distributor of plumbing,
electrical and hardware products 153,300 1,590,488
Kaydon Corp. - custom-engineered
industrial products 66,000 1,769,625
<F1>L.B. Foster Company, Class A - rail and
construction supplies manufacturer 189,700 924,787
<F1>Mueller Industries, Inc. - plumbing
products manufacturer 94,800 3,436,500
------------
7,721,400
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
CAPITAL GOODS - 14.2%
CONSTRUCTION - SUPPLIES & FIXTURES - 1.0%
Insteel Industries, Inc. - steel wire
products manufacturer 159,800 $1,448,188
CONSTRUCTION - RAW MATERIALS - 1.0%
Centex Construction Products, Inc. - cement and
gypsum wallboard manufacturer 36,300 1,415,700
CONSTRUCTION SERVICES - 3.4%
Chicago Bridge And Iron Company - engineering
and construction 1,400 19,250
<F1>EMCOR Group, Inc. - mechanical and
electrical contractor 147,600 2,693,700
<F1>Jacobs Engineering Group, Inc. - engineering
and construction 65,500 2,128,750
------------
4,841,700
MISCELLANEOUS CAPITAL GOODS - 7.6%
Gleason Corporation - gear manufacturing
equipment producer 178,700 4,154,775
Lincoln Electric Holdings, Inc. -
welding products 121,000 2,495,625
Regal Beloit Corporation - electrical
equipment manufacturer 126,100 2,600,812
Smith Investment Company - multi-industry
holding company 15,600 733,200
Thomas Industries, Inc. - compressor and vacuum
pump manufacturer 30,400 621,300
Twin Disc, Inc. - heavy-duty power transmission
equipment manufacturer 25,500 302,813
------------
10,908,525
MOBILE HOMES & RV'S - 1.2%
<F1>Champion Enterprises, Inc. -
manufactured housing 117,700 1,007,806
Fleetwood Enterprises, Inc. - manufactured
housing and recreational vehicle manufacturer 34,200 705,375
------------
1,713,181
CONSUMER CYCLICAL - 13.7%
APPAREL/ACCESSORIES - 1.5%
<F1>Delta Woodside Industries, Inc. - apparel
and textiles manufacturer 59,600 111,750
Guilford Mills, Inc. - knit textile
fabrics producer 177,200 1,284,700
Velcro Industries N.V. - manufacturer of Velcro
brand fasteners 65,100 785,269
------------
2,181,719
AUTO & TRUCK PARTS - 4.7%
Borg-Warner Automotive, Inc. - automotive power
train systems and components 51,000 2,065,500
CLARCOR, Inc. - filtration products 114,300 2,057,400
Modine Manufacturing Company - heat
exchanger systems 105,100 2,627,500
------------
6,750,400
FOOTWEAR - 2.0%
Justin Industries, Inc. - western wear and
building products 141,000 2,097,375
<F1>R.G. Barry Corporation - specialized comfort
footwear manufacturer 198,500 781,594
------------
2,878,969
FURNITURE & FIXTURES - 1.6%
<F1>Chromcraft Revington, Inc. - manufacturer of
residential and commerical furniture 39,000 409,500
Kimball International, Inc. - diversified
furniture manufacturer 113,600 1,874,400
------------
2,283,900
JEWELRY & SILVERWARE - 2.5%
Jostens, Inc. - manufacturer of
recognition products 144,400 3,510,725
RECREATIONAL PRODUCTS - 1.4%
Arctic Cat, Inc. - snowmobile and all-terrain
vehicle manufacturer 203,100 2,031,000
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
CONSUMER NON-CYCLICAL - 1.5%
FOOD PROCESSING - 1.0%
<F1>Ralcorp Holdings, Inc. - manufacturer of
private label food products 70,800 $1,411,575
TOBACCO - 0.5%
<F1>M&F Worldwide Corporation -
flavorings producer 146,700 742,669
ENERGY - 5.2%
OIL & GAS OPERATIONS - 5.2%
Cabot Oil & Gas Corporation, Class A - natural
gas exploration/production 120,400 1,933,925
<F1>Forest Oil Corporation - oil and natural
gas exploration/production 141,317 1,863,618
<F1>Prima Energy Corporation - oil and natural
gas exploration/production 5,700 137,156
<F1>Santa Fe Snyder - oil and natural gas
exploration/production 279,700 2,237,600
<F1>Tom Brown, Inc. - oil and natural
gas exploration 99,700 1,333,487
------------
7,505,786
FINANCIAL - 17.2%
CONSUMER FINANCIAL SERVICES - 1.8%
White Mountains Insurance Group, Inc. - insurance
and mortgage banking 21,700 2,614,850
INSURANCE (LIFE) - 2.8%
Annuity and Life Re (Holdings) - life and
annuity reinsurance 102,100 2,667,362
Scottish Annuity & Life Holdings - life and
annuity reinsurance 162,300 1,328,831
------------
3,996,193
INSURANCE (MISCELLANEOUS) - 2.1%
Hilb, Rogal & Hamilton Company -
insurance broker 107,100 3,025,575
INSURANCE (PROPERTY & CASUALTY) - 6.0%
<F1>Acceptance Insurance Companies -
crop insurance 124,200 721,912
Chicago Title Corporation - property
title insurer 10,800 499,500
First American Financial Corporation - property
title insurer 54,300 675,356
IPC Holdings, Ltd. - catastrophe reinsurer 64,100 953,488
Merchants Group, Inc. - property and
casualty insurance 23,800 464,100
<F1>PICO Holdings, Inc. - property and
casualty insurance 92,500 1,138,906
<F1>Risk Capital Holdings, Inc. - reinsurance
products and services 114,900 1,450,612
Stewart Information Services Corporation -
property title insurer 199,400 2,654,513
------------
8,558,387
INVESTMENT SERVICES - 1.2%
John Nuveen Company - investment
management services 46,600 1,680,513
MISCELLANEOUS FINANCIAL SERVICES - 1.5%
Capital Southwest Corporation - closed-end
venture capital investment company 26,500 1,586,688
<F1>Enstar Group, Inc. - financial services
holding company 40,500 531,562
------------
2,118,250
S&LS/SAVINGS BANKS - 1.8%
John Hancock Bank & Thrift Opportunity -
closed-end investment company 265,900 2,243,531
The Somerset Group, Inc. - investment services 20,900 397,100
------------
2,640,631
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
HEALTHCARE - 0.3%
HEALTHCARE FACILITIES - 0.3%
<F1>National Dentex Corp. - dental
laboratory operator 28,000 $469,000
REAL ESTATE INVESTMENT TRUSTS - 1.3%
Asset Investors Corporation - manufactured
housing communities 86,800 965,650
Fortress Investment Corporation, 144A -
specialty real estate investments 17,300 291,938
HealthCare Financial Partners REIT, 144A -
healthcare related real estate investments 36,000 594,000
------------
1,851,588
SERVICES (BUSINESS SERVICES) - 4.0%
BUSINESS SERVICES - 2.9%
<F1>Craig Corporation, Class A Preference - movie
theatre owner/operator 81,200 507,500
Duff & Phelps Credit Rating Company - credit
rating agency 13,800 1,227,337
Midas, Inc. - automotive repair services 111,000 2,428,125
------------
4,162,962
WASTE MANAGEMENT SERVICES - 1.1%
<F1>Harding Lawson Associates Group -
environmental and engineering consultants 102,300 792,825
Sevenson Environmental Services, Inc. -
hazardous waste remediation 76,000 722,000
------------
1,514,825
SERVICES (CONSUMER SERVICES) - 4.7%
ADVERTISING - 4.2%
<F1>ADVO, Inc. - direct mail marketing services 117,700 2,795,375
Grey Advertising, Inc. - advertising agency 8,021 3,208,400
------------
6,003,775
BROADCASTING & CABLE TV - 0.1%
<F1>Ascent Entertainment Group, Inc. -
pay-per-view entertainment services 8,900 112,919
PRINTING & PUBLISHING - 0.3%
Courier Corporation - book manufacturer 19,100 453,625
RETAIL (APPAREL) - 0.1%
<F1>Footstar, Inc. - athletic and casual
footwear retailer 5,900 179,950
TECHNOLOGY - 8.7%
COMPUTER PERIPHERALS - 0.4%
Astro-Med Inc. - medical instrumentation/
specialty printers 96,800 592,900
COMPUTER SERVICES - 0.9%
<F1>Mastech Corp. - information
technology services 49,000 1,212,750
ELECTRONIC INSTRUMENTS & CONTROLS - 3.4%
<F1>Genlyte Group, Inc. - commercial,
industrial and residential lighting 181,200 3,873,150
<F1>Powell Industries, Inc. - electrical
equipment manufacturer 144,800 995,500
------------
4,868,650
SCIENTIFIC & TECHNICAL INSTRUMENTS - 0.6%
<F1>Moore Products Company - measurement and
control instruments 20,100 801,488
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
SHARES MARKET
HELD VALUE
------- -------
TECHNOLOGY (CONTINUED)
SEMICONDUCTORS - 2.1%
<F1>FSI International, Inc. - semiconductor
equipment manufacturer 131,800 $1,515,700
<F1>Silicon Valley Group, Inc. - semiconductor
equipment manufacturer 84,900 1,506,975
3,022,675
SOFTWARE & PROGRAMMING - 1.3%
<F1>Complete Business Solutions, Inc. -
information technology services 60,400 1,517,550
<F1>Intelligent Systems Corporation - software
and healthcare services 95,300 381,200
------------
1,898,750
TRANSPORTATION - 1.0%
MISCELLANEOUS TRANSPORTATION - 0.9%
<F1>Aviall, Inc. - aviation parts distributor 153,530 1,257,027
TRUCKING - 0.1%
Arnold Industries, Inc. - trucking services 14,100 198,281
UTILITIES - 1.1%
NATURAL GAS UTILITIES - 1.1%
UGI Corp. - distributor of natural gas,
electricity and propane 73,900 1,510,331
TOTAL COMMON STOCKS (Cost $129,325,609) 128,347,457
WARRANTS - 0.0%
HealthCare Financial Partners REIT, expires 4/28/01
(Cost $0) 14,400 -
SHORT TERM INVESTMENTS - 10.2%
Repurchase agreement with State Street Bank and
Trust Company, 2.5%, dated 12/31/1999,
due 1/3/2000, maturity value $14,662,054, Par
collateralized by $14,958,338 market value Amount
U.S. Treasury Bond, 12% due 08/15/2013 -------
(Cost $14,659,000) $14,659,000 14,659,000
------------
TOTAL INVESTMENTS - 99.9% (Cost $143,984,609) 143,006,457
OTHER ASSETS LESS LIABILITIES - 0.1% 112,349
------------
TOTAL NET ASSETS - 100.0%<F2> $143,118,806
============
<F1> Non-income producing securities.
<F2> Percentages for the various classifications relate to total net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SCHEDULE OF INVESTMENTS
ARTISAN SMALL CAP VALUE FUND
<PAGE>
ARTISAN FUNDS, INC.
Statements of Assets and Liabilities - December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL MID CAP SMALL CAP
FUND FUND FUND VALUE FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value $175,869,555 $3,047,100,817 $97,261,155 $143,006,457
Cash 251 186 742 820
Receivable from investments sold - 17,282,394 549,564 -
Receivable from forward currency contracts - 29,167,930 - -
Receivable from fund shares sold 112,255 20,917,726 286,678 467,321
Interest receivable 187 9,002 282 1,018
Dividends receivable 31,323 2,141,165 9,750 117,474
Organizational costs 3,363 7,320 14,181 19,454
Other assets - 2,005 - 1,870
------------ ------------ ------------ ------------
TOTAL ASSETS 176,016,934 3,116,628,545 98,122,352 143,614,414
LIABILITIES:
Payable for investments purchased 676,701 18,784,977 50,400 -
Payable for forward currency contracts - 29,150,385 - -
Payable for fund shares redeemed 100,277 473,790 1,111 362,793
Payable for organizational costs 3,363 7,320 14,181 19,454
Payable for operating expenses 159,084 1,287,970 78,906 113,361
Other liabilities - 151,995 - -
------------ ------------ ------------ ------------
TOTAL LIABILITIES 939,425 49,856,437 144,598 495,608
------------ ------------ ------------ ------------
TOTAL NET ASSETS $175,077,509 $3,066,772,108 $97,977,754 $143,118,806
============ ============== ============ ============
NET ASSETS CONSIST OF:
Fund shares issued and outstanding $165,591,190 $1,967,844,344 $70,054,731 $141,987,339
Net unrealized appreciation (depreciation)
on investments and foreign currency
related transactions 25,131,425 1,058,490,803 20,132,752 (978,152)
Accumulated undistributed net
investment income (loss) (617,065) (5,697,533) (239,987) 26,032
Accumulated undistributed net realized
gains (losses) on investments and foreign
currency related transactions (15,028,041) 46,134,494 8,030,258 2,083,587
------------ ------------ ------------ ------------
$175,077,509 $3,066,772,108 $97,977,754 $143,118,806
============ ============== ============ ============
SUPPLEMENTARY
INFORMATION:
Net assets $175,077,509 $97,977,754 $143,118,806
International Shares $ 2,290,574,818
Institutional Shares $776,197,290
Number of shares outstanding 13,162,120 4,518,145 14,080,677
International Shares 80,381,784
Institutional Shares 27,204,710
Net asset value, offering price
and redemption price per share $13.30 $21.69 $10.16
International Shares $28.50
Institutional Shares $28.53
Cost of securities held $150,738,130 $1,988,499,262 $77,128,403 $143,984,609
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
ARTISAN FUNDS, INC.
Statements of Operations - For the Six Months Ended December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL MID CAP SMALL CAP
FUND FUND FUND VALUE FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $118,162 $1,062,679 $108,990 $193,262
Dividends 399,933 4,527,713<F1> 109,187 842,415
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME 518,095 5,590,392 218,177 1,035,677
EXPENSES:
Advisory fees 834,737 8,155,058 286,059 504,020
Transfer agent fees 130,386 71,108 92,771
International Shares 1,095,742
Institutional Shares 10,021
Shareholder communications 37,760 17,178 24,150
International Shares 145,316
Institutional Shares 4,957
Custodian fees 42,346 563,469 19,711 21,583
Accounting fees 24,461 37,363 23,916 23,617
Professional fees 12,431 68,017 9,123 10,025
Registration fees 19,721 227,682 16,652 27,422
Directors' fees 7,500 7,500 7,500 7,500
Organizational costs 7,034 3,660 2,837 3,536
Other operating expenses 18,784 98,056 4,079 10,239
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 1,135,160 10,416,841 458,163 724,863
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) (617,065) (4,826,449) (239,986) 310,814
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gain (loss) on:
Investments 25,258,424 60,250,914 9,420,293 4,578,750
Foreign currency related transactions - (952,889) - -
------------ ------------ ------------ ------------
25,258,424 59,298,025 9,420,293 4,578,750
Net increase (decrease) in unrealized
appreciation/depreciation on:
Investments 5,424,681 897,397,920 11,882,001 (3,306,109)
Foreign currency related transactions - 64,671 - -
------------ ------------ ------------ ------------
5,424,681 897,462,591 11,882,001 (3,306,109)
------------ ------------ ------------ ------------
NET GAIN (LOSS) ON INVESTMENTS 30,683,105 956,760,616 21,302,294 1,272,641
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $30,066,040 $951,934,167 $21,062,308 $ 1,583,455
============ =========== ============ ============
</TABLE>
<F1> Net of foreign taxes withheld of $601,842.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
ARTISAN FUNDS, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SMALL CAP FUND INTERNATIONAL FUND
------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
12/31/99<F1> 6/30/99 12/31/99<F1> 6/30/99
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $(617,065) $(1,330,119) $(4,826,449) $4,109,783
Net realized gain (loss) on:
Investments 25,258,424 (40,422,189) 60,250,914 38,449,100
Foreign currency related transactions - - (952,889) (677,233)
Futures contracts - 645,230 - -
Net increase (decrease) in unrealized
appreciation on:
Investments 5,424,681 (15,181,024) 897,397,920 79,783,283
Foreign currency related transactions - - 64,671 (137,818)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 30,066,040 (56,288,102) 951,934,167 121,527,115
DISTRIBUTIONS PAID
TO SHAREHOLDERS:
Net investment income: - -
International Shares (1,581,063) (944,186)
Institutional Shares (1,166,198) (257,100)
Net realized gains on investment transactions: - (17,843,098)
International Shares (36,202,670) (6,509,837)
Institutional Shares (10,501,625) (1,271,446)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS PAID TO SHAREHOLDERS - (17,843,098) (49,451,556) (8,982,569)
FUND SHARE ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM FUND SHARE ACTIVITIES (29,544,406) (55,455,086) 1,040,784,898 513,780,438
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 521,634 (129,586,286) 1,943,267,509 626,324,984
Net assets, beginning of period 174,555,875 304,142,161 1,123,504,599 497,179,615
------------ ------------ ------------ ------------
NET ASSETS, END OF PERIOD $175,077,509 $174,555,875 $3,066,772,108 $1,123,504,599
============ ============ ============ ============
</TABLE>
<F1> Unaudited.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
ARTISAN FUNDS, INC.
Statements of Changes in Net Assets - Continued
<TABLE>
<CAPTION>
MID CAP FUND SMALL CAP VALUE FUND
------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
12/31/99<F1> 6/30/99 12/31/99<F1> 6/30/99
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $(239,986) $(258,932) $310,814 $(233,182)
Net realized gain (loss) on investments 9,420,293 1,711,886 4,578,750 1,468,035
Net increase (decrease) in unrealized
appreciation on investments 11,882,001 7,469,075 (3,306,109) 651,867
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 21,062,308 8,922,029 1,583,455 1,886,720
DISTRIBUTIONS PAID
TO SHAREHOLDERS:
Net investment income: - - (284,782) -
Net realized gains on investment transactions: (2,624,807) (1,185,407) (3,661,649) (2,325,801)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS PAID TO SHAREHOLDERS (2,624,807) (1,185,407) (3,946,431) (2,325,801)
FUND SHARE ACTIVITIES:
NET INCREASE IN NET ASSETS
RESULTING FROM FUND SHARE ACTIVITIES 36,220,635 22,802,060 67,681,760 31,009,275
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS 54,658,136 30,538,682 65,318,784 30,570,194
Net assets, beginning of period 43,319,618 12,780,936 77,800,022 47,229,828
------------ ------------ ------------ ------------
NET ASSETS, END OF PERIOD $ 97,977,754 $ 43,319,618 $143,118,806 $ 77,800,022
============ ============ ============ ============
</TABLE>
<F1> Unaudited.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
ARTISAN FUNDS, INC.
Financial Highlights - For a share outstanding throughout each period
<TABLE>
<CAPTION>
NET REALIZED TOTAL
NET ASSET NET AND UNREALIZED INCOME DIVIDENDS
YEAR OR VALUE INVESTMENT GAIN (LOSS) (LOSS) FROM FROM NET
PERIOD BEGINNING INCOME ON INVESTMENT INVESTMENT
ENDED OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ARTISAN SMALL CAP FUND
-------------------------------------------------------------------------------------------------------
12/31/99<F1> $ 11.09 $ (0.05) $ 2.26 $ 2.21 $ -
-------------------------------------------------------------------------------------------------------
6/30/99 14.66 (0.08) (2.53) (2.61) -
-------------------------------------------------------------------------------------------------------
6/30/98 15.11 (0.10) 2.23 2.13 -
-------------------------------------------------------------------------------------------------------
6/30/97 14.67 (0.04) 1.55 1.51 -
-------------------------------------------------------------------------------------------------------
6/30/96 11.52 (0.07) 3.32 3.25 -
-------------------------------------------------------------------------------------------------------
6/30/95<F4> 10.00 (0.01) 1.53 1.52 -
-------------------------------------------------------------------------------------------------------
ARTISAN INTERNATIONAL FUND
-------------------------------------------------------------------------------------------------------
INTERNATIONAL 12/31/99<F1> $ 18.67 $ (0.06) $ 10.45 $ 10.39 $ (0.02)
SHARES -------------------------------------------------------------------------------------------------------
6/30/99 16.25 0.08<F5> 2.62 2.70 (0.04)
-------------------------------------------------------------------------------------------------------
6/30/98 14.48 0.06<F5> 3.04 3.10 (0.20)
-------------------------------------------------------------------------------------------------------
6/30/97 12.08 0.07 2.44 2.51 (0.02)
-------------------------------------------------------------------------------------------------------
6/30/96<F6> 10.00 0.04 2.04 2.08 -
-------------------------------------------------------------------------------------------------------
INSTITUTIONAL 12/31/99<F1> $ 18.70 $ (0.05) $ 10.48 $ 10.43 $ (0.06)
SHARES -------------------------------------------------------------------------------------------------------
6/30/99 16.26 0.11<F5> 2.62 2.73 (0.05)
-------------------------------------------------------------------------------------------------------
6/30/98 14.48 0.09<F5> 3.04 3.13 (0.22)
-------------------------------------------------------------------------------------------------------
ARTISAN MID CAP FUND
-------------------------------------------------------------------------------------------------------
12/31/99<F1> $ 16.67 (0.05) $ 5.90 $ 5.85 -
-------------------------------------------------------------------------------------------------------
6/30/99 13.69 (0.16)<F5> 4.41 4.25 -
-------------------------------------------------------------------------------------------------------
6/30/98 10.00 (0.08) 4.56 4.48 -
-------------------------------------------------------------------------------------------------------
6/30/97<F8> 10.00 - - - -
-------------------------------------------------------------------------------------------------------
ARTISAN SMALL CAP VALUE FUND
-------------------------------------------------------------------------------------------------------
12/31/99<F1> $ 10.59 $0.03 $(0.08)<F9> $(0.05) $(0.03)
-------------------------------------------------------------------------------------------------------
6/30/99 11.37 (0.03) (0.21)<F9> (0.24) -
-------------------------------------------------------------------------------------------------------
6/30/98<F10> 10.00 (0.03) 1.40 1.37 -
-------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
DISTRIBUTIONS NET ASSET NET ASSETS RATIO OF INVESTMENT
FROM NET VALUE END OF EXPENSES INCOME (LOSS) PORTFOLIO
REALIZED TOTAL END TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
GAINS DISTRIBUTIONS OF PERIOD RETURN (MILLIONS) NET ASSETS NET ASSETS RATE
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARTISAN SMALL CAP FUND
-------------------------------------------------------------------------------------------------------
$ - $ - $13.30 $19.9%<F2> $175.1 1.36%<F3> (0.74%)<F3> 99.81%<F2>
-------------------------------------------------------------------------------------------------------
(0.96) (0.96) 11.09 (17.0) 174.6 1.37 (0.67) 155.38
-------------------------------------------------------------------------------------------------------
(2.58) (2.58) 14.66 14.7 304.1 1.33 (0.74) 134.67
-------------------------------------------------------------------------------------------------------
(1.07) (1.07) 15.11 11.3 267.8 1.41 (0.73) 87.18
-------------------------------------------------------------------------------------------------------
(0.10) (0.10) 14.67 28.3 400.0 1.52 (0.75) 105.19
-------------------------------------------------------------------------------------------------------
- - 11.52 15.2<F2> 99.3 2.00<F3> (0.59)<F3> 9.28<F2>
-------------------------------------------------------------------------------------------------------
ARTISAN INTERNATIONAL FUND
-------------------------------------------------------------------------------------------------------
INTERNATIONAL $ (0.54) $ (0.56) $ 28.50 56.5%<F2> $2,290.6 1.27%<F3> (0.61%)<F3> 40.88%<F2>
SHARES -------------------------------------------------------------------------------------------------------
(0.24) (0.28) 18.67 17.4 943.9 1.38 0.59 79.41
-------------------------------------------------------------------------------------------------------
(1.13) (1.33) 16.25 24.1 414.5 1.45 0.37 109.42
-------------------------------------------------------------------------------------------------------
(0.09) (0.11) 14.48 20.9 449.2 1.61 1.07 103.66
-------------------------------------------------------------------------------------------------------
- - 12.08 20.8<F2> 71.5 2.50<F3> 1.60<F3> 57.00<F2>
-------------------------------------------------------------------------------------------------------
INSTITUTIONAL $ (0.54) $ (0.60) $ 28.53 56.7%<F2> $ 776.2 1.07%<F3> (0.42%)<F3> 40.88%<F2>
SHARES -------------------------------------------------------------------------------------------------------
(0.24) (0.29) 18.70 17.6 179.6 1.17 0.68 79.41
-------------------------------------------------------------------------------------------------------
(1.13) (1.35) 16.26 24.4 82.6 1.25 0.68 109.42
-------------------------------------------------------------------------------------------------------
ARTISAN MID CAP FUND
-------------------------------------------------------------------------------------------------------
$ (0.83) $ (0.83) $ 21.69 36.0%<F2> $ 98.0 1.60%<F3> (0.84%)<F3> 133.29%<F2>
-------------------------------------------------------------------------------------------------------
(1.27) (1.27) 16.67 35.8 43.3 2.00<F7> (1.13)<F7> 202.84
-------------------------------------------------------------------------------------------------------
(0.79) (0.79) 13.69 46.1 12.8 2.00<F7> (0.77)<F7> 235.65
-------------------------------------------------------------------------------------------------------
- - 10.00 0.0<F2> 1.8 0.00<F3> 0.00<F3> 0.00<F2>
-------------------------------------------------------------------------------------------------------
ARTISAN SMALL CAP VALUE FUND
-------------------------------------------------------------------------------------------------------
$ (0.35) $ (0.38) $ 10.16 (0.4%)<F2> $143.1 1.44%<F3> 0.62%<F3> 25.48%<F2>
-------------------------------------------------------------------------------------------------------
(0.54) (0.54) 10.59 (1.0) 77.8 1.66 (0.45) 49.29
-------------------------------------------------------------------------------------------------------
- - 11.37 13.7<F2> 47.2 1.93<F3> (0.50)<F3> 52.58<F2>
-------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Unaudited.
<F2> Not annualized.
<F3> Annualized.
<F4> For the period from commencement of operations (March 28, 1995) through
June 30, 1995.
<F5> Computed based on average shares outstanding.
<F6> For the period from commencement of operations (December 28, 1995)
through June 30, 1996.
<F7> The ratios of expenses to average net assets and net investment loss to
average net assets exclude fees paid by the Adviser. Absent fees paid by
the Adviser, the ratios of expenses to average net assets and net
investment loss to average net assets would have been 2.12% and (1.25%)
for the year ended June 30,1999 and 3.64% and (2.41%) for the year ended
June 30, 1998, respectively.
<F8> For the period from commencement of operations (June 27, 1997) through
June 30, 1997.
<F9> The amount shown may not correlate with the aggregate gains and losses of
portfolio securities due to the timing of subscriptions and redemptions
of fund shares.
<F10> For the period from commencement of operations (September 29, 1997)
through June 30, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - December 31, 1999 (Unaudited)
(1) ORGANIZATION:
Artisan Funds, Inc. ("Artisan Funds" ) was incorporated on January 5, 1995,
as a Wisconsin corporation and is registered under the Investment Company
Act of 1940, as amended. Artisan Funds is a series company comprised of
four open-end, diversified mutual funds (each a "Fund" and collectively the
"Funds"): Artisan Small Cap Fund ("Small Cap Fund"), Artisan International
Fund ("International Fund"), Artisan Mid Cap Fund ("Mid Cap Fund"), and
Artisan Small Cap Value Fund ("Small Cap Value Fund"). Small Cap Fund,
International Fund, Mid Cap Fund and Small Cap Value Fund commenced
operations on March 28, 1995, December 28, 1995, June 27, 1997 and
September 29, 1997, respectively.
Effective July 1, 1997, the International Fund began offering two classes
of capital shares, International Shares and International Institutional
Shares (Institutional Shares). Institutional Shares are sold to
institutional investors meeting certain minimum investment requirements.
Each class of shares has equal rights with respect to portfolio assets and
voting privileges. Each class has exclusive voting rights with respect to
any matters involving only that class. Income, non-class specific expenses,
realized and unrealized gains and losses are allocated daily to each class
of shares based upon the relative net asset value of outstanding shares.
Expenses attributable to a particular class of shares, such as transfer
agency fees and shareholder communication expenses, are allocated directly
to that class.
The Small Cap Fund, International Fund International Shares, International
Fund Institutional Shares, Mid Cap Fund and Small Cap Value Fund each have
5,000,000,000 shares authorized with a $0.01 par value.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Funds.
(a) Security valuation - Each security is valued at the last sales price
reported by the principal securities exchange on which the issue is
traded, or if no sale is reported on the principal exchange, the last
sale on a secondary exchange. The last bid price reported is utilized
if no sales have taken place. Securities for which prices are not
readily available, or for which management believes that the latest
sales or bid price is not reflective of a fair value of the security,
are valued 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
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
amortized cost which approximates market. The Small Cap Fund, Mid Cap
Fund and Small Cap Value Fund each own certain securities which are
valued at fair values as determined using procedures established by
the Funds' Board of Directors, aggregating $5,586,422, $173,250 and
$885,938, respectively, representing 3.2%, 0.2% and 0.6%,
respectively, of the net assets of each of the Funds.
(b) Income taxes - No provision has been made for federal income taxes
since each Fund intends to 1) distribute to its shareholders
substantially all of its taxable income as well as realized gains from
the sale of investment securities 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 on trade date. Net realized gains and losses on securities
are computed on specific security lot identification.
(d) Foreign currency translation - Values of investments denominated in
foreign currencies are converted into U.S. dollars using the spot
market rate of exchange at the time of valuation. Purchases and sales
of investments and dividend and interest income are translated to U.S.
dollars using the spot market rate of exchange prevailing on the
respective dates of such transactions. The portion of security gains
or losses resulting from changes in foreign exchange rates is included
with net realized and unrealized gain or loss from investments, as
appropriate, for both financial reporting and tax purposes.
The International Fund enters into forward currency contracts to hedge
the foreign currency exposure on open payables and receivables. The
forward currency contracts are recorded at market value and any
related realized and unrealized gains and losses are reported as
foreign currency related transactions for financial reporting
purposes. For tax purposes, these foreign exchange gains and losses
are treated as ordinary income. The International Fund could be
exposed to loss if the counterparties fail to perform under these
contracts.
(e) Futures Contracts - Each Fund is authorized to enter into futures
contracts. A purchase or sale of a futures contract may result in
losses in excess of the amount invested and there can be no guarantee
that there will be a correlation between price movements in the
futures contract and in the portfolio exposure sought. In addition,
there can be no assurance that a liquid market will exist at a time
when the Fund seeks to close out a futures position and there is a
risk that the counterparty to the futures contract will not be able to
meet the terms of the contract. Futures contracts are valued based
upon their quoted daily settlement prices. Fluctuations in the value
of these contracts are recorded as unrealized appreciation
(depreciation) until terminated, at which time realized gains and
losses are recognized.
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
(f) Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results
could differ from those estimates.
(g) Other - Dividend income is recorded on the ex-dividend date, except
that certain dividends from private placements and foreign securities
are recorded as soon as the information becomes available to the
Funds. Interest income is reported on the accrual basis. Distributions
to shareholders are recorded on the ex-dividend date. Generally
accepted accounting principles require that permanent financial
reporting and tax differences be reclassified in the capital accounts.
(3) TRANSACTIONS WITH AFFILIATES:
Artisan Partners Limited Partnership (the "Adviser"), with which certain
officers and directors of the Funds are affiliated, provides investment
advisory and administrative services to the Funds. In exchange for these
services, each Fund pays a monthly management fee to the Adviser as
follows:
Average Daily Net Assets 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%
Each 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 Small Cap Fund, Mid Cap Fund and
Small Cap Value Fund for any ordinary operating expenses in excess of 2.00%
of average net assets annually, and the International Fund for ordinary
operating expenses in excess of 2.50% of average net assets annually.
Each director who is not an interested person of Artisan Funds, Inc. or
Artisan Partners Limited Partnership receives an annual retainer fee of
$5,000 per Fund, plus reimbursement of expenses related to their duties as
a director of Artisan Funds, Inc.
(4) ORGANIZATIONAL COSTS AND PREPAID REGISTRATION EXPENSES:
Organizational costs are amortized over sixty months. These expenses were
paid by the Adviser and will be reimbursed by the Fund over the same time
period. Prepaid registration expenses are amortized over twelve months.
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - Continued
(5) LINE OF CREDIT ARRANGEMENTS:
Artisan Funds, Inc. is party to a line of credit agreement with State
Street Bank and Trust Company, under which each Fund may borrow up to the
lesser of 10% of its net assets or $50 million. Artisan Funds, Inc. pays a
commitment fee of 0.10% on the unused portion of the line of credit. This
fee is allocated to each Fund based on relative net assets. Interest is
charged on any borrowings at the current Federal funds rate plus 0.75%. The
use of the line of credit is generally restricted to temporary borrowing
for extraordinary or emergency purposes. Maximum borrowings under the line
of credit for the six months ended December 31, 1999 were as follows:
Fund Maximum Borrowings
---- ------------------
Small Cap Fund $1,633,367
International Fund -
Mid Cap Fund -
Small Cap Value Fund -
(6) INVESTMENT TRANSACTIONS:
The cost of securities purchased and the proceeds from the sale of
securities (excluding short-term securities) for the six months ended
December 31, 1999 were as follows:
Fund Security Purchases Security Sales
---- ------------------ --------------
Small Cap $ 163,139,572 $192,881,002
International 1,570,007,220 698,265,059
Mid Cap 104,793,765 75,036,711
Small Cap Value 75,444,521 24,279,607
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - Continued
(7) FUND SHARE ACTIVITIES:
Capital share transactions for the Funds were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL FUND
------------------------------------
INTERNATIONAL INSTITUTIONAL
SIX MONTHS ENDED DECEMBER 31, 1999 SMALL CAP FUND SHARES SHARES
- -------------------------------------------------- --------------- --------------- ---------------
<S> <C> <C> <C>
Proceeds from shares issued $10,206,840 $925,298,946 $390,654,273
Net asset value of shares issued in
reinvestment of distributions - 35,747,848 11,635,093
Cost of shares redeemed (39,751,246) (309,135,191) (13,416,071)
--------------- --------------- ---------------
NET INCREASE (DECREASE) FROM FUND SHARE ACTIVITIES $ (29,544,406) $ 651,911,603 $ 388,873,295
=============== =============== ===============
SMALL CAP
SIX MONTHS ENDED DECEMBER 31, 1999 MID CAP FUND VALUE FUND
- -------------------------------------------------- --------------- ---------------
Proceeds from shares issued $ 36,970,435 $ 83,445,281
Net asset value of shares issued in
reinvestment of distributions 2,578,104 3,681,438
Cost of shares redeemed (3,327,904) (19,444,959)
--------------- ---------------
Net increase from fund share activities $ 36,220,635 $ 67,681,760
=============== ===============
INTERNATIONAL FUND
-----------------------------------
INTERNATIONAL INSTITUTIONAL
SIX MONTHS ENDED DECEMBER 31, 1999 SMALL CAP FUND SHARES SHARES
- -------------------------------------------------- --------------- --------------- ---------------
Shares sold 901,517 42,832,548 17,657,599
Shares issued from reinvestment of distributions - 1,613,170 524,576
Shares redeemed (3,479,472) (14,625,809) (580,239)
--------------- --------------- ---------------
Net increase (decrease) in capital shares (2,577,955) 29,819,909 17,601,936
=============== =============== ===============
SMALL CAP
SIX MONTHS ENDED DECEMBER 31, 1999 MID CAP FUND VALUE FUND
- -------------------------------------------------- --------------- ---------------
Shares sold 1,965,439 8,305,244
Shares issued from reinvestment of distributions 141,498 375,263
Shares redeemed (186,907) (1,944,869)
--------------- ---------------
Net increase from fund share activities 1,920,030 6,735,638
=============== ===============
</TABLE>
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - Continued
(7) FUND SHARE ACTIVITIES (continued):
<TABLE>
<CAPTION>
INTERNATIONAL FUND
-----------------------------------
INTERNATIONAL INSTITUTIONAL
FISCAL YEAR ENDED JUNE 30, 1999 SMALL CAP FUND SHARES SHARES
- -------------------------------------------------- --------------- --------------- ---------------
<S> <C> <C> <C>
Proceeds from shares issued $ 41,079,632 $ 808,115,881 $ 108,430,376
Net asset value of shares issued in
reinvestment of distributions 17,337,992 7,211,053 1,448,132
Cost of shares redeemed (113,872,710) (376,463,582) (34,961,422)
NET INCREASE (DECREASE) FROM FUND SHARE ACTIVITIES $(55,455,086) $ 438,863,352 $ 74,917,086
SMALL CAP
FISCAL YEAR ENDED JUNE 30, 1999 MID CAP FUND VALUE FUND
- -------------------------------------------------- --------------- ---------------
Proceeds from shares issued $ 31,529,435 $ 57,373,478
Net asset value of shares issued in
reinvestment of distributions 1,156,779 2,161,775
Cost of shares redeemed (9,884,154) (28,525,978)
Net increase from fund share activities $ 22,802,060 $ 31,009,275
INTERNATIONAL FUND
------------------------------------
INTERNATIONAL INSTITUTIONAL
FISCAL YEAR ENDED JUNE 30, 1999 SMALL CAP FUND SHARES SHARES
- -------------------------------------------------- --------------- --------------- ---------------
Shares sold 3,778,821 47,804,591 6,392,854
Shares issued from reinvestment of distributions 1,753,078 558,569 112,258
Shares redeemed (10,534,310) (23,304,036) (1,985,942)
Net increase (decrease) in capital shares (5,002,411) 25,059,124 4,519,170
SMALL CAP
FISCAL YEAR ENDED JUNE 30, 1999 MID CAP FUND VALUE FUND
- -------------------------------------------------- --------------- ---------------
Shares sold 2,275,136 6,026,910
Shares issued from reinvestment of distributions 105,353 253,135
Shares redeemed (715,659) (3,088,372)
Net increase from fund share activities 1,664,830 3,191,673
</TABLE>
<PAGE>
ARTISAN FUNDS, INC.
Notes to Financial Statements - Continued
(8) INFORMATION FOR FEDERAL INCOME TAX PURPOSES:
Aggregate Aggregate Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation/
Cost of Appreciation Depreciation (Depreciation)
Fund Securities on Investments on Investments on Investments
- --------------- --------------- --------------- --------------- ---------------
Small Cap $150,738,130 $33,656,105 $(8,524,680) $25,131,425)
International 1,989,707,953 1,082,412,413 (25,019,549) 1,057,392,864)
Mid Cap 77,213,658 20,956,874 (909,377) 20,047,497)
Small Cap Value 144,001,915 11,140.801 (12,136,259) (995,458)
The difference between cost amounts for financial reporting and tax purposes is
due primarily to timing differences in recognizing certain gains and losses on
security transactions and for the International Fund, passive foreign investment
company (PFIC) value adjustments. Losses from foreign currency related
transactions for the International Fund of $487,619 and security transactions
for the Small Cap Fund and Small Cap Value Fund of $9,559,925 and $84,661,
respectively, from November 1, 1998 to June 30, 1999 are recognized for federal
income tax purposes in fiscal 2000.
The Small Cap Fund generated $29,613,980 in capital loss carryforwards during
the fiscal year ended June 30, 1999. These capital loss carryforwards are
available to offset future realized capital gains through June 30, 2007. Small
Cap Fund will resume capital gains distributions in the future to the extent
gains are realized in excess of the available carryforwards.
- --------------------------------------------------------------------------------
NOTES ON PORTFOLIO STATISTICS
The letters to shareholders included in this annual report include statistical
information about the portfolios of each of the Artisan Funds. That information
is as of December 31, 1999; it varies with changes in a Fund's portfolio
investments.
- --------------------------------------------------------------------------------
<PAGE>
(LOGO)
ARTISAN FUNDS
P.O. BOX 8412
BOSTON, MA 02266-8412
(800) 344-1770
---------------
PRSRT STD
U.S. POSTAGE
PAID
MILWAUKEE, WI
PERMIT NO. 2855
---------------
2/17/00 - A9054
