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Each shareholder of an Artisan Fund is entitled to his or her share of the Fund's net income and any gains realized on the Fund's investments. Each Fund intends to distribute substantially all of its net income and net realized capital gains to investors at least annually.
As you should with any investment, consider how the return on your investment in a Fund will be taxed. If your investment is a tax-deferred account like an IRA, for example, the following tax discussion does not apply.
When you sign your account application, you must certify that your Social Security or taxpayer identification number is correct, that you are a U.S. person and that you are not subject to backup withholding for failing to report income to the IRS. If you fail to comply with this procedure, the IRS can require the Fund to withhold a percentage of your taxable distributions and redemptions.
Taxes on Transactions. When you redeem shares, you will experience a capital gain or loss if there is a difference between the basis of your shares (generally, their cost) and the price you receive when you sell them. You may be subject to tax.
Whenever you redeem shares of a Fund, you will receive a confirmation statement showing how many shares you sold and at what price. Shareholders of taxable accounts also may receive a year-end statement every January that reports, among other things, the average cost basis of the shares sold, if that information is available to the Funds. This will allow you or your tax preparer to determine the tax consequences of each redemption. However, be sure to keep your regular account statements and tax forms; that information will be essential in verifying the amount of your capital gains or losses.
Taxes on Distributions. Distributions are subject to federal income tax, and may be subject to state or local taxes. If you are a U.S. citizen residing outside the United States, your distributions also may be taxed by the country in which you reside.
Your distributions are taxable in the year they are paid, whether you take them in cash or reinvest them in additional shares. However, distributions declared in October, November or December and paid in January of the following year are taxable as if you received them on December 31 of the year declared.
For federal tax purposes, the Fund's income and short-term capital gain distributions are taxed as ordinary income dividends, except as described below with respect to "qualified dividend income." Long-term capital gain distributions are taxed as long-term capital gains. The character of a capital gain depends on the length of time that the Fund held the asset it sold.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "Act") reduced the maximum tax rate on long-term capital gains of noncorporate investors from 20% to 15%. The Act also reduced to 15% the maximum tax rate on "qualified dividend income" received by noncorporate shareholders who satisfy certain holding period requirements. In the case of a Fund that qualifies as a regulated investment company for tax purposes (which each Fund expects to do), the amount of dividends that may be eligible for the reduced rate may not exceed the amount of aggregate qualifying dividends received by that Fund. To the extent a Fund distributes amounts of dividends, including capital gain dividends, that the Fund determines are eligible for the reduced rates, it will identify the relevant amounts in its annual tax information reports to its shareholders. Without further legislative change, the rate reductions enacted by the Act will lapse, and the previous rates will be reinstated, for taxable years beginning on or after January 1, 2011.
Every January, each of your Funds will send you and the IRS a Form 1099 showing the amount of taxable distributions you received (including those reinvested in additional shares) in the previous calendar year.
A Fund's dividends and distributions are distributed to (and are taxable to) those persons who are shareholders of the Fund at the record date set by the board of directors. As a result, although a Fund's total net income and net realized gain are the results of its operations, the per share amount distributed to shareholders is affected by the number of Fund shares outstanding at the record date.
The Funds generally publish estimates of their dividends and distributions in advance of the planned record and payment dates. There is no assurance that the Funds will publish such estimates in the future. Those estimates, if published, are for planning purposes and are subject to change. Artisan Funds attempts to identify investors who redeem shares prior to the record date in order to avoid receiving distributions. If Artisan Funds believes an investor or a third party who has authority to act on behalf of an investor has engaged in such trading activity, Artisan Funds may reject future purchases of Fund shares in that investor's account or accounts associated with the third party, with or without prior notice, or refuse to open a new account for that investor or third party. If the trading activity is identified in an omnibus account registered in the name of a financial intermediary, Artisan Funds may request that the intermediary take action to prevent the particular investor or investors from engaging in that trading. In some cases, it may not be possible to block future transactions through an omnibus account for a particular investor. In such instances, Artisan Funds may reject future purchases on behalf of all clients of a financial advisor or broker-dealer through which the identified trading was conducted. The Fund's ability to impose restrictions on trading activity with respect to accounts traded through an intermediary may vary depending on the system capabilities, applicable contractual and legal restrictions and cooperation of that intermediary. The identification of such trading activity involves judgments that are inherently subjective and the above actions, alone or taken together with the other means by which Artisan Funds seeks to discourage certain types of trading activity, cannot eliminate the possibility that the trading activity will occur. Trading activity, appropriate or inappropriate, may affect each Fund and its other shareholders. See "Principal Risks You Should Consider," in the current prospectus.
Non-U.S. Investors. The Funds generally do not sell shares to investors residing outside the U.S. and certain of the Funds' investment strategies and policies may cause adverse tax consequences for shareholders residing outside the U.S. Shareholders residing outside the U.S. should consult their tax advisors as to the tax consequences of owning Fund shares.
As you should with any investment, consider how the return on your investment in a Fund will be taxed. If your investment is a tax-deferred account like an IRA, for example, the following tax discussion does not apply.
When you sign your account application, you must certify that your Social Security or taxpayer identification number is correct, that you are a U.S. person and that you are not subject to backup withholding for failing to report income to the IRS. If you fail to comply with this procedure, the IRS can require the Fund to withhold a percentage of your taxable distributions and redemptions.
Taxes on Transactions. When you redeem shares, you will experience a capital gain or loss if there is a difference between the basis of your shares (generally, their cost) and the price you receive when you sell them. You may be subject to tax.
Whenever you redeem shares of a Fund, you will receive a confirmation statement showing how many shares you sold and at what price. Shareholders of taxable accounts also may receive a year-end statement every January that reports, among other things, the average cost basis of the shares sold, if that information is available to the Funds. This will allow you or your tax preparer to determine the tax consequences of each redemption. However, be sure to keep your regular account statements and tax forms; that information will be essential in verifying the amount of your capital gains or losses.
Taxes on Distributions. Distributions are subject to federal income tax, and may be subject to state or local taxes. If you are a U.S. citizen residing outside the United States, your distributions also may be taxed by the country in which you reside.
Your distributions are taxable in the year they are paid, whether you take them in cash or reinvest them in additional shares. However, distributions declared in October, November or December and paid in January of the following year are taxable as if you received them on December 31 of the year declared.
For federal tax purposes, the Fund's income and short-term capital gain distributions are taxed as ordinary income dividends, except as described below with respect to "qualified dividend income." Long-term capital gain distributions are taxed as long-term capital gains. The character of a capital gain depends on the length of time that the Fund held the asset it sold.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "Act") reduced the maximum tax rate on long-term capital gains of noncorporate investors from 20% to 15%. The Act also reduced to 15% the maximum tax rate on "qualified dividend income" received by noncorporate shareholders who satisfy certain holding period requirements. In the case of a Fund that qualifies as a regulated investment company for tax purposes (which each Fund expects to do), the amount of dividends that may be eligible for the reduced rate may not exceed the amount of aggregate qualifying dividends received by that Fund. To the extent a Fund distributes amounts of dividends, including capital gain dividends, that the Fund determines are eligible for the reduced rates, it will identify the relevant amounts in its annual tax information reports to its shareholders. Without further legislative change, the rate reductions enacted by the Act will lapse, and the previous rates will be reinstated, for taxable years beginning on or after January 1, 2011.
Every January, each of your Funds will send you and the IRS a Form 1099 showing the amount of taxable distributions you received (including those reinvested in additional shares) in the previous calendar year.
A Fund's dividends and distributions are distributed to (and are taxable to) those persons who are shareholders of the Fund at the record date set by the board of directors. As a result, although a Fund's total net income and net realized gain are the results of its operations, the per share amount distributed to shareholders is affected by the number of Fund shares outstanding at the record date.
The Funds generally publish estimates of their dividends and distributions in advance of the planned record and payment dates. There is no assurance that the Funds will publish such estimates in the future. Those estimates, if published, are for planning purposes and are subject to change. Artisan Funds attempts to identify investors who redeem shares prior to the record date in order to avoid receiving distributions. If Artisan Funds believes an investor or a third party who has authority to act on behalf of an investor has engaged in such trading activity, Artisan Funds may reject future purchases of Fund shares in that investor's account or accounts associated with the third party, with or without prior notice, or refuse to open a new account for that investor or third party. If the trading activity is identified in an omnibus account registered in the name of a financial intermediary, Artisan Funds may request that the intermediary take action to prevent the particular investor or investors from engaging in that trading. In some cases, it may not be possible to block future transactions through an omnibus account for a particular investor. In such instances, Artisan Funds may reject future purchases on behalf of all clients of a financial advisor or broker-dealer through which the identified trading was conducted. The Fund's ability to impose restrictions on trading activity with respect to accounts traded through an intermediary may vary depending on the system capabilities, applicable contractual and legal restrictions and cooperation of that intermediary. The identification of such trading activity involves judgments that are inherently subjective and the above actions, alone or taken together with the other means by which Artisan Funds seeks to discourage certain types of trading activity, cannot eliminate the possibility that the trading activity will occur. Trading activity, appropriate or inappropriate, may affect each Fund and its other shareholders. See "Principal Risks You Should Consider," in the current prospectus.
Non-U.S. Investors. The Funds generally do not sell shares to investors residing outside the U.S. and certain of the Funds' investment strategies and policies may cause adverse tax consequences for shareholders residing outside the U.S. Shareholders residing outside the U.S. should consult their tax advisors as to the tax consequences of owning Fund shares.
© 1999-2008 Artisan Distributors LLC, Member FINRA. All rights reserved. 2/27/07
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