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In the first quarter of 2026, the Artisan Global Discovery Fund faced challenges, primarily due to adverse stock picking decisions. This resulted in an overall underperformance relative to its benchmarks. However, strong performance in the industrials sector and a deliberate underweighting of financial stocks partially mitigated these negative impacts. Several key holdings demonstrated robust results, with new strategic investments also being initiated during this period.

The global equity markets saw a downturn in the first quarter of 2026, retracting from their previous all-time highs. This market correction was influenced by a confluence of factors, including heightened geopolitical tensions, evolving expectations regarding monetary policy, and increased uncertainty in the broader macroeconomic landscape. Amidst these turbulent conditions, energy stocks emerged as a significant outlier, delivering returns exceeding 30% across major indices. This surge underscores a flight to commodities and a defensive posture adopted by investors in response to the volatile environment.

Artisan Global Discovery Fund's performance was notably affected by its stock selection within specific sectors. The negative contributions stemmed primarily from holdings in information technology, consumer discretionary, and real estate sectors. Software companies, in particular, were significant detractors. Conversely, the fund's strategic underweighting in the energy sector, while broadly beneficial to the market, did not fully offset the impact of the underperforming selections in other areas. This dynamic highlights the intricate balance required in portfolio management amidst shifting market tides.

Individual companies within the fund's portfolio showcased diverse performances. Modine Manufacturing, for example, revised its growth forecasts upwards, signaling strong operational momentum. Twist Bioscience reported results that surpassed market expectations, demonstrating both revenue growth and improved gross margins. Similarly, MongoDB delivered figures that were ahead of analyst predictions, indicating healthy demand for its database solutions. These strong individual performances were crucial in cushioning the fund's overall results against broader market headwinds and sector-specific underperformance.

During the quarter, the Artisan Global Discovery Fund undertook several strategic portfolio adjustments. New positions were established in promising companies such as ROBLOX, a leading online entertainment platform; H World Group, a prominent hospitality company; and ASM International, a key player in the semiconductor equipment industry. Concurrently, the fund divested from investments in JFrog, JBT Marel, and Sartorius, concluding their investment campaigns. These adjustments reflect a proactive approach to re-aligning the portfolio with evolving market opportunities and perceived growth drivers.

The first quarter of 2026 presented a complex investment environment, marked by global equity declines and significant sector-specific shifts. Despite these challenges, the Artisan Global Discovery Fund demonstrated resilience through strategic portfolio management and the strength of certain key holdings. The fund's ability to identify and invest in companies with robust growth prospects, even amidst a challenging macroeconomic backdrop, remains a core tenet of its strategy. The careful recalibration of its portfolio through new investments and divestitures positions the fund to navigate future market uncertainties and capitalize on emerging opportunities.