CELH - Artisan Global Discovery Fund Q1 2024 Commentary

2024-04-24 08:50:00 ET

Summary

• Artisan Partners is an independent investment management firm focused on providing high value-added, active investment strategies to sophisticated clients globally.
• Our portfolio outperformed the MSCI AC World Index in Q1 due to broad-based security selection contributions across health care, consumer staples, industrials and consumer discretionary.
• We think prudence is justified from here, as valuations have expanded, and robust US economic activity makes the pace and magnitude of near-term rate cuts somewhat suspect.
• We do think AI is, as a technology trend, deserving of this attention.

Investing Environment

As we entered 2024, equity markets moved higher in anticipation of the US economy experiencing a Goldilocks scenario-soft landing combined with falling inflation-that would lead the Fed to cut interest rates. Overall, the US economy continues to show remarkable resilience in the face of elevated interest rates, with solid consumer spending and low unemployment. However, we note that evidence of cracks in the economy are emerging, such as rising credit card debt and auto loan delinquencies. Given this economic strength, it was not entirely surprising that multiple inflation readings in the quarter surprised to the upside.

As a result, expectations for Fed rate cuts as of the end of March have been pared back to just three, totaling 75bps, this year. US 10-year Treasury ( US10Y ) yields rose to 4.20% from 3.88% to start the year, while two-year ( US2Y ) yields rose to 4.62% from 4.25% to start the year....

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