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Wasatch Emerging Markets Select Strategy

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Wasatch Emerging Markets Select Strategy
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Strategy Overview

Highlights
  • A concentrated, yet diversified high-conviction portfolio of 30-40 stocks
  • Seeks the highest-quality growth companies in emerging markets
  • Truly active, collaborative, bottom-up, fundamental process
  • Systematic coverage of the emerging markets universe
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 mid-cap companies

Approximately 30-40 positions

Portfolio Managers
Ajay Krishnan Ajay Krishnan Lead Portfolio Manager
6 years on strategy
25 years at wasatch
Roger Edgley Roger Edgley Portfolio Manager
6 years on strategy
17 years at wasatch
Scott Thomas Scott Thomas Associate Portfolio Manager
3 years on strategy
7 years at wasatch
Matthew Dreith Matthew Dreith Associate Portfolio Manager
1 year on strategy
8 years at wasatch
16 Cumulative PM years on strategy

We look for opportunities arising from the explosion of consumer demand in emerging markets. These opportunities include investments across the market-cap spectrum.”

—Ajay Krishnan, Lead Portfolio Manager

Performance

Average Annual Total Returns AS OF 09/30/19 AS OF 11/30/19
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
Emerging Markets Select Composite (Gross)
0.54%
8.24%
21.69%
20.17%
13.71%
3.13%
N/A
3.62%
Emerging Markets Select Composite (Net)
0.50%
8.11%
21.10%
19.54%
13.07%
2.49%
N/A
2.90%
MSCI Emerging Markets Index
-0.14%
6.06%
10.20%
7.28%
9.01%
3.12%
N/A
2.23%

Returns for periods less than one year are not annualized. Since inception performance is calculated from 12/31/2012.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/18)
Emerging Markets Select Composite
MSCI Emerging Markets 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 Markets Select Composite contains fully discretionary equity accounts following the Emerging Markets Select style.  The composite primarily invests in equity securities of all market capitalizations that are tied economically to emerging market countries with the goal of long-term appreciation of capital.  For comparison purposes the composite is measured against the MSCI Emerging Markets index.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index designed to measure the equity market performance of emerging markets.

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 09/30/19
Portfolio
Index
Number of Holdings
39
1202
Average Market Cap
($ Weighted)
$36.27 b
$88.11 b
Median Market Cap
$6.55 b
$6.07 b
EPS Growth (%, est. 5 yr)
20%
12%
P/E (Forward)
27
12
Portfolio Turnover (%)
14.15
n/a
Active Share (%)
93
n/a
Performance Statistics AS OF 09/30/19
5 yr
Alpha
0.92
Beta
0.77
R-Squared
0.68
Standard Deviation
14.4
Upside Capture
78
Downside Capture
88
Top 10 Holdings AS OF 09/30/19
Company
% of Net Assets
Bajaj Finance Ltd. (India)
9.2%
Silergy Corp. (Taiwan)
5.2%
MercadoLibre Inc.
5%
Raia Drogasil SA (Brazil)
4.5%
HDFC Bank Ltd. (India)
4.2%
ICICI Lombard General Insurance Co Ltd. (India)
3.7%
Bank Central Asia Tbk PT (Indonesia)
3.4%
BGF retail Co Ltd/New (South Korea)
3.4%
Asian Paints Ltd. (India)
3.2%
Vitasoy International Holdings Ltd. (Hong Kong)
3.2%
39 Number of holdings
93% Active share
Sector Allocation AS OF 09/30/19
Sector
Portfolio
Index
Financials
29.3
24.7
Consumer Staples
16.9
6.9
Industrials
15.1
5.4
Consumer Discretionary
14.3
13.1
Information Technology
11.5
15.1
Materials
5.1
7.3
Health Care
4.9
2.6
Communication Services
2.5
11.6
Cash & Cash Equivalents*
0.4
0.0
Energy
0.0
7.7
Real Estate
0.0
2.9
Utilities
0.0
2.8
Country Allocation AS OF 09/30/19
Portfolio (%)
Developed
12.2
Hong Kong
7.2
United States
5.0
Emerging & Frontier
87.8
India
35.4
China
11.1
Taiwan
10.2
South Korea
8.0
Brazil
6.7
Mexico
3.9
Indonesia
3.4
Other
9.1
12.2% Developed
87.8% Em and Frontier

Commentary & Literature

News & Updates

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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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