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Fund Manager Q&A

Now Available: Above-Average Companies at Below-Average Prices

Investors seem to want the safest of bonds or the riskiest of equities, which has generally led to outflows, and opportunities, in high-quality large caps, says Artisan's George Sertl.

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George O. Sertl Jr. is a managing director at Artisan Partners and co-manager of  Artisan Small Cap Value  (ARTVX),  Artisan Mid Cap Value (ARTQX),  Artisan Opportunistic Value (ARTLX), and the firm's U.S. value separate account portfolios.

Specifically focusing on Artisan Opportunistic Value, Sertl recently answered our questions on the macroeconomic issues facing investors today, enthusiasm for high-quality large caps, and financials. He also commented on the valuation of the  Hewlett-Packard's (HPQ) recent acquisition of 3Par.

1. As an equity investor, what's your reaction to the current gloom and doom scenarios that many prominent bond managers are advocating (and, that many investors are agreeing with, at least based on fund flows)?
For awhile now I think it's been pretty obvious that macro issues have been a dominating factor for a lot of investors. And that's understandable; there are a lot of big issues floating around that are legitimate sources of uncertainty. So what a lot of investors seem to have done is run from that fear and uncertainty and rush into the perceived safety of bonds. As value investors, we're doing the opposite. Our job is to invest in companies that are trading at a distinct discount to their underlying worth. In all our years of investing, we've learned that this really only happens when there's fear and uncertainty out there. So we're not running from it, we're going toward it to find the opportunities, to find the stocks that we think have been hit harder than deserved.

Liana Madura does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.