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Wasatch Emerging India Strategy

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Wasatch Emerging India Strategy
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Strategy Overview

Highlights
  • Seeks the highest-quality growth companies in India
  • Truly active, collaborative, bottom-up, fundamental process
  • Systematic coverage of Indian universe and broad sector approach
Investment Approach

We use a bottom-up approach that seeks to identify companies with outstanding long-term growth potential. We look for companies with:

  • Strong financials
  • A sustainable competitive advantage
  • Industry-best management teams
  • Earnings growth greater than the relevant sector or industry

All cap flexibility with a focus on small- and mid-cap companies

Approximately 20-60 positions

Portfolio Managers
Ajay Krishnan Ajay Krishnan Lead Portfolio Manager
11 years on strategy
28 years at wasatch
Matthew Dreith Matthew Dreith Portfolio Manager
6 years on strategy
11 years at wasatch
17 Cumulative PM years on strategy

India is an excellent source of high-quality companies underpinned by digitalization, financialization, and formalization of the economy.”

—Ajay Krishnan, Lead Portfolio Manager

Performance

Average Annual Total Returns AS OF 12/31/22 AS OF 12/31/22
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
Emerging India Composite (Gross)
-6.02%
-3.87%
-20.83%
-20.83%
10.91%
8.86%
14.40%
12.90%
Emerging India Composite (Net)
-6.07%
-4.07%
-21.49%
-21.49%
9.84%
7.78%
13.06%
11.54%
MSCI India IMI Index
-5.21%
1.20%
-9.07%
-9.07%
11.25%
5.19%
7.75%
4.93%

Returns for periods less than one year are not annualized. Since inception performance is calculated from 04/30/2011.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/22)
Emerging India Composite
MSCI India IMI Index

Performance is preliminary and subject to change. Past performance is not indicative of future results. Wasatch Global Investors is an independent registered investment advisor. Registration does not imply a certain level of skill or training. Wasatch claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of content contained herein. To receive a complete list of composite descriptions of Wasatch composites and/or a GIPS Composite Report, e-mail inforequest@wasatchglobal.com. The U.S. Dollar is the currency used to express performance.

The Emerging India Composite contains fully discretionary equity accounts following the Emerging India style.  The composite primarily invests in companies tied economically to India with the goal of long-term appreciation of capital.  For comparison purposes the composite is measured against the MSCI India Investable Market Net TR Index.

The MSCI India Investable Market Net TR Index (IMI) covers all investable large-, mid- and small-cap securities across India, targeting approximately 99% of the Indian market’s free-float adjusted market capitalization.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products.

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Portfolio

Characteristics AS OF 12/31/22
Portfolio
Index
Number of Holdings
24
501
Average Market Cap
($ Weighted)
$23.54B
$47.16B
Median Market Cap
$5.79B
$1.49B
EPS Growth (%, est. 5 yr)
24
19
P/E (Forward)
34
21
Portfolio Turnover (%)
26.97
N/A
Active Share (%)
92
N/A
Performance Statistics AS OF 12/31/22
5 yr
Alpha
3.88
Beta
0.96
R-Squared
0.88
Standard Deviation
22.81
Upside Capture
108.82
Downside Capture
95.81
Top 10 Holdings AS OF 09/30/22
Company
% of Net Assets
Bajaj Finance Ltd. (India)
9.6%
Elgi Equipments Ltd. (India)
7.5%
AU Small Finance Bank Ltd. (India)
6.4%
Trent Ltd. (India)
6.2%
HDFC Bank Ltd. (India)
5.8%
MindTree Ltd. (India)
5.7%
Larsen & Toubro Infotech Ltd. (India)
5.4%
Avenue Supermarts Ltd. (ASL) (India)
5.4%
Dr Lal PathLabs Ltd. (India)
5.1%
L&T Technology Services Ltd. (India)
4.7%
24 Number of holdings
92% Active share
Sector Allocation AS OF 12/31/22
Sector
Portfolio
Index
Financials
34.1 %
23.2 %
Industrials
13.2 %
8.6 %
Health Care
12.4 %
5.6 %
Information Technology
10.3 %
13.2 %
Cash & Cash Equivalents*
9.1 %
N/A
Consumer Discretionary
7.4 %
10.1 %
Materials
6.1 %
11.4 %
Consumer Staples
5.4 %
8.1 %
Communication Services
2.1 %
3.3 %
Energy
0.0 %
10.1 %
Utilities
0.0 %
5.3 %
Real Estate
0.0 %
1.2 %

Commentary & Literature

News & Updates

India and Greater China

December 5, 2022

In emerging markets, we’re finding companies with particularly attractive valuations and enormous…

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Barron’s – Wasatch Featured in India Roundtable Exploring the Nation’s Promising Evolution

November 18, 2022

Barron’s first India roundtable, featuring Wasatch Portfolio Manager, Ajay Krishnan, delves into…

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India’s Virtuous Circle of Amazing Progress

May 26, 2022

THE “OLD INDIA” MEETS THE “NEW INDIA” In India, the Hindi term…

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Important Disclosures

Past performance does not guarantee future results. Performance results are net of transaction costs and reflect the reinvestment of dividend and other earnings. Net performance data was calculated using actual management fees. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. See Wasatch Global Investors Form ADV Part 2A for more information on fee schedules. Some portfolio net-of fees returns may be net of performance-based fees. Current performance may be lower or higher than the performance data quoted.

Portfolio holdings are subject to change. References to individual companies should not be construed as recommendations to buy or sell shares in those companies. Wasatch analysts closely monitor the companies held in the portfolio. If a company’s underlying fundamentals or valuation measures change, Wasatch will reevaluate its position and my sell part or all of its holdings.

Portfolio Characteristics, Allocations and Top Ten Holdings are derived from a representative account. A representative account is selected based on accounts with substantially similar investment policies, objectives, and strategies that closely resemble, or are most representative of, the strategy it represents.

Est. 5-year EPS Growth %: Estimated percentage increase in earnings per share (EPS) per year of the fund's holdings over the next 5 years. Returns are not guaranteed and may be higher or lower. Source: Wasatch and FactSet. P/E Ratio (forward and trailing): Sum of stock prices of the fund's holdings divided by the aggregate earnings per share of those holdings for the next 12 months (forward), or past 12 months (trailing), calculated as a weighted harmonic average. P/E to Growth Rate: Forward 12-month P/E ratio divided by the estimated 5-year EPS growth rate. Portfolios with a number less than 1.0 would be considered undervalued, around 1.0 would be considered fair valued and significantly greater than 1.0 would be considered overvalued. Weighted Average Market Cap: Average market capitalization of companies held by the fund, weighted by their percentage of fund net assets. Portfolio Turnover: A measure of trading activity in a fund's portfolio over the past 12 months expressed as a percentage of the fund's average total assets. Alpha measures a fund's risk/reward potential. A positive alpha means the fund outperformed the index. A negative alpha means the fund underperformed the index. Beta measures a fund's risk in relation to the market. A beta of 0.8 means the fund's total return is likely to move up or down 80% of the market change; 1.25 means total return is likely to move up or down 25% more than the market. R-Squared measures (from 0 to 1.0) how closely a fund's movements are correlated with movements of its benchmark. An R-squared of 1.0 would mean that the fund's movements are completely correlated with the movements of its benchmark. Active Share measures the difference between portfolio holdings and the benchmark. It is the sum of the absolute values of the different weightings of each holding in the fund versus each holding in the benchmark, divided by 2. Standard Deviation measures the degree to which a fund's performance has varied from its average performance over a particular time period. The greater the standard deviation, the greater a fund's volatility (risk). Upside Capture explains how well a fund performs in time periods where the benchmark's returns are greater than zero. Downside Capture explains how well a fund performs in time periods where the benchmark's returns are less than zero.

Wasatch Advisors, Inc., trading as Wasatch Global Investors, ARBN 605 031 909 is regulated by the U.S. Securities and Exchange Commission under U.S. laws which differ from Australian laws. Wasatch Advisors, Inc. is exempt from the requirement to hold an Australian financial services license in accordance with class order 03/1100 in respect of the provision of financial services to wholesale clients in Australia.

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