Strategy. Artisan Partners Limited Partnership (Artisan Partners or Subadviser), subadviser to the Portfolio, invests at least 80% of the Portfolios net assets in the common stocks of medium-sized companies. Artisan Partners defines a medium-sized company as one with a market capitalization greater than the market capitalization of the smallest company in the Russell Midcap Index and less than three times the weighted average market capitalization of companies in that Index. Over time, the capitalizations of the companies in the Index will change. As they do, the size of the companies in which the Portfolio invests may change. As long as an investment continues to meet the Portfolios other investment criteria, Artisan Partners may choose to hold a stock even if the … Show more… Artisan Partners Limited Partnership (Artisan Partners or Subadviser), subadviser to the Portfolio, invests at least 80% of the Portfolios net assets in the common stocks of medium-sized companies. Artisan Partners defines a medium-sized company as one with a market capitalization greater than the market capitalization of the smallest company in the Russell Midcap Index and less than three times the weighted average market capitalization of companies in that Index. Over time, the capitalizations of the companies in the Index will change. As they do, the size of the companies in which the Portfolio invests may change. As long as an investment continues to meet the Portfolios other investment criteria, Artisan Partners may choose to hold a stock even if the companys market capitalization grows or falls outside these parameters. Artisan Partners will generally not initiate a position in a company unless it has a market capitalization that is within the range of the market capitalization of companies in the Russell Midcap Index as of the most recent calendar year end. As of December 31, 2024, the range of the market capitalization of companies in the Russell Midcap Index was between $205.2 million and $151.9 billion and the weighted average market capitalization of companies in that Index was approximately $28.2 billion. The Portfolio invests primarily in U.S. companies. Stock Selection Artisan Partners employs a fundamental investment process to construct a diversified portfolio of medium-sized U.S. companies. Artisan Partners seeks to invest in companies that are undervalued, in solid financial condition and have attractive business economics. Artisan Partners believes that companies with the following characteristics are less likely to experience eroding values over the long term: Attractive valuation . Artisan Partners values a business using what it believes are reasonable expectations for the long-term earnings power and capitalization rates of that business. This results in a range of values for the company that Artisan Partners believes would be reasonable. Artisan Partners generally will purchase a security if the stock price falls below or toward the lower end of that range. Sound financial condition . Artisan Partners prefers companies with a level of debt Artisan Partners deems appropriate and that have a positive cash flow. At a minimum, Artisan Partners seeks to avoid companies that have so much debt that management may be unable to make decisions that would be in the best interest of the companies shareholders. Attractive business economics . Artisan Partners favors cash-producing businesses capable of earning returns on capital Artisan Partners finds acceptable over the companys business cycle. The Portfolios cash position is affected by cash flows, including from shareholder investments and redemptions and purchases and sales of portfolio securities. Investment of available cash may be slowed during periods when stock prices are moving broadly upwards because higher prevailing valuations cause fewer securities to meet the Portfolios investment criteria. As a result of this emphasis on valuation, the Portfolio may at times hold more than 5%, but generally not more than 10%, of its total assets in cash. The Portfolio may sell a security when Artisan Partners thinks the security is too expensive compared to Artisan Partners estimate of the companys intrinsic value, when changing circumstances affect the original reasons for Artisan Partners purchase of the security, when the companys fundamentals have deteriorated, or when more attractive alternatives are identified. Show less