Annual Report Artio Global Funds

Annual Report Artio Global Funds Artio Select Opportunities Fund Inc. Artio International Equity Fund Artio International Equity Fund II Artio Total Return Bond Fund Artio Global High Income Fund Artio Emerging Markets Local Currency Debt Fund October 31, 2012 TABLE OF CONTENTS Shareholders Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Management’s Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Shareholder Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Fund Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Portfolio of Investments: Artio Select Opportunities Fund Inc. . . . . . . . . . . . . . . . . . . . . . . . . 74 Artio International Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Artio International Equity Fund II . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Artio Total Return Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Artio Global High Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . .123 Artio Emerging Markets Local Currency Debt Fund . . . . . . . . . . . . .142 Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149 Statement of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157 Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175 Report of Independent Registered Public Accounting Firm . . . . . . . . . . . .228 Additional Information Page. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .229 Artio Global Funds: Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . .230 Supplemental Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .234 SHAREHOLDERS LETTER Dear Shareholder: am pleased to present the Annual Report for the Artio Global Funds (the “Funds”)for thefiscalyearendingOctober31,2012(the“ReportingPeriod”). While both equity and fixed income markets posted gains for the entire Reporting Period, the timeframe was characterized by shifting sentiment. This was evidenced in the near equal number of up vs. down monthly returns (7 vs. 5) posted by the broad MSCI All Country World Index (ACWI), a measurement of both developed and emerging equity markets. During the fiscal year, the debt situation in Europe showed little sign of improving. Governments made several attempts to strengthen the Continent’s finances but it was not until September, when the European Central Bank (ECB) stepped in with thepledgetomakeunlimitedpurchases ofgovernmentdebtintheopenmarketthat investors were left with the impression that concrete action was being taken to truly get credit flowing. This move effectively made the central bank the lender of last resort to nations as well as banks. However, by the end of the fiscal year, no government had formallyasked the ECB to begin buying their bonds, leaving some to question whether the attempt would effect any change. US investors were largely absorbed by two events—the outcome of the presidential election and a possible fall off the ‘fiscal cliff’. Many wondered what would be done to avert the economic ramifications should a new budget deal not come to fruition and mandatory budget cuts and tax increases get enacted. Despite these concerns, the US market posted some of the developed world’s best returns over the Reporting Period. After a relatively strong winter, the Federal Reserve Bank (the “Fed”) extended its existing “Operation Twist” asset-purchase program through the end of 2012 to help reduce borrowing costs for businesses and consumers and prevent the economy from stumbling in its nascent recovery. Taking things a step further, in September the Fed announced a third round of quantitative easing.In thiscase,rather thanprovidingafixedendpoint,thecentralbanksaidthey would purchase mortgage-backed securities until unemployment drops sufficiently or inflation rises too fast. As sentiment continued to shift from periods of “risk on” to “risk off” and back again, this fiscal year proved to be a difficult environment for investors such as us. Our approach across our suite of mutual funds is based on a long-term view. Too often during the Reporting Period, investor appetite and markets moved on near-term headlines. As you will read in the commentaries which follow, it becomes difficult for active-managers like us to best position portfolios based on short-term Artio Global Funds C 2012 Annual Report 1 ... - tailieumienphi.vn