In the initial quarter of 2026, the Artisan International Explorer Fund demonstrated a nuanced performance, contrasting sharply with broader market movements. While the S&P 500 Index remained largely unchanged, the MSCI ACWI ex US Small Cap Index experienced a robust 11% increase. This report offers a detailed examination of the fund's top-performing and underperforming assets, alongside strategic adjustments to its portfolio, including new acquisitions and disposals, providing a comprehensive overview of its market engagement and tactical shifts during this period.

During the first quarter, the Artisan International Explorer Fund identified IQE, Impro, and Vitzrocell as its leading contributors to performance, showcasing strategic investments that yielded positive returns. Conversely, Alten, Signify, and Elementis were noted as the primary detractors, indicating areas that faced challenges within the portfolio. The fund also made deliberate adjustments, introducing two new positions to its holdings, although these are currently undisclosed as the accumulation phase is ongoing. Concurrently, the fund divested from Spir, a Norway-based company, signaling a recalibration of its investment focus.

IQE's resurgence can be attributed to enhanced liquidity, driven by proactive customer pre-funding of orders, positioning the company at the nexus of artificial intelligence and defense sector demands. This strategic alignment is anticipated to bolster profitability and achieve double-digit margins, with its stock still presenting an attractive valuation. Impro is poised for substantial growth, projecting a mid-double-digit top-line expansion by 2026. This forecast is underpinned by increasing demand across the AI, medical, and aerospace industries, maintaining an appealing mid-teens price-to-earnings ratio. For Signify and Elementis, the outlook points to potential turnarounds. Signify, under new leadership, is expected to streamline its portfolio through strategic transactions. Meanwhile, Elementis anticipates enhanced shareholder value with the recent addition of Mike Humphrey to its board, suggesting forthcoming initiatives to boost returns.

The first quarter of 2026 underscored the Artisan International Explorer Fund's proactive management in navigating a dynamic market landscape. By pinpointing significant growth drivers and addressing underperforming assets through strategic reallocations, the fund has set a clear trajectory. The ongoing integration of new, yet-to-be-disclosed positions and the decisive exit from others reflect a focused effort to optimize the portfolio for future gains, aligning with evolving market conditions and investment opportunities.