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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 30-70 positions

Portfolio Managers
Ajay Krishnan Ajay Krishnan Lead Portfolio Manager
8 years on strategy
25 years at wasatch
Matthew Dreith Matthew Dreith Portfolio Manager
4 years on strategy
8 years at wasatch
12 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 03/31/20 AS OF 03/31/20
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
Emerging India Composite (Gross)
-28.64%
-27.81%
-27.81%
-20.64%
0.81%
5.14%
N/A
9.14%
Emerging India Composite (Net)
-28.70%
-27.98%
-27.98%
-21.34%
-0.27%
3.90%
N/A
7.73%
MSCI India IMI Index
-26.65%
-31.79%
-31.79%
-32.64%
-8.28%
-3.91%
N/A
-1.56%

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 12/31/19)
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®). To receive a complete list of composite descriptions of Wasatch composites and/or a GIPS-compliant presentation, 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 index.

The MSCI India Investable Market 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 12/31/19
Portfolio
Index
Number of Holdings
34
333
Average Market Cap
($ Weighted)
$14.66b
$37.52b
Median Market Cap
$3.34b
$1.36b
EPS Growth (%, est. 5 yr)
23
22
P/E (Forward)
33
18
Portfolio Turnover (%)
23.18
n/a
Active Share (%)
91
n/a
Performance Statistics AS OF 03/31/20
5 yr
Alpha
8.98
Beta
0.95
R-Squared
0.86
Standard Deviation
21.24
Upside Capture
114
Downside Capture
80
Top 10 Holdings AS OF 12/31/19
Company
% of Net Assets
Bajaj Finance Ltd. (India)
7.9%
ICICI Lombard General Insurance Co Ltd. (India)
6.3%
AU Small Finance Bank Ltd. (India)
5.1%
Aavas Financiers Ltd. (India)
5.1%
HDFC Bank Ltd. (India)
5%
Dr Lal PathLabs Ltd. (India)
5%
Divi's Laboratories Ltd. (India)
4.1%
Berger Paints India Ltd. (India)
4.1%
Pidilite Industries Ltd. (India)
4.1%
Britannia Industries Ltd (India)
3.9%
34 Number of holdings
91% Active share
Sector Allocation AS OF 12/31/19
Sector
Portfolio
Index
Financials
42.1
29.3
Materials
11.4
8.5
Health Care
9.7
4.8
Consumer Discretionary
9.2
9.3
Industrials
9.2
5.4
Consumer Staples
7.5
9.0
Information Technology
5.9
13.4
Communication Services
3.6
3.5
Cash & Cash Equivalents*
1.6
0.0
Energy
0.0
13.0
Utilities
0.0
3.0
Real Estate
0.0
0.8
Country Allocation AS OF 03/31/20
Portfolio (%)
Emerging & Frontier
102.6
India
102.6
102.6% Em and Frontier

Country weights are calculated as a percentage of total portfolio including cash & cash equivalents.

Commentary & Literature

News & Updates

India Versus China

February 25, 2020

While diversification is one of the most-basic principles of investing, we believe…

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India’s Similarities With The U.S.

February 25, 2020

At Wasatch Global Investors, we’ve been researching companies in India for more…

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Morningstar – A Perfect Fit: Ajay Krishnan Applies the Wasatch Strategy in India

September 24, 2019

Morningstar recently featured Ajay Krishnan and Wasatch Emerging India Fund in an…

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India’s Virtuous Circle of Amazing Progress

September 24, 2019

In India, the Hindi term “jugaad” is used to describe an improvised…

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Important Disclosures

Portfolio Characteristics, Allocations and Top Ten Holdings are derived from a representative account.

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.

Portfolio holdings are subject to risks and may change at any time.

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