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Wasatch Emerging Markets Small Cap Strategy

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Wasatch Emerging Markets Small Cap Strategy
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Strategy Overview

Highlights
  • Seeks the highest-quality small-cap growth companies in emerging markets
  • Truly active, collaborative, bottom-up, fundamental process
  • Systematic coverage of the emerging markets small-cap universe
  • Broad sector and country 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

Primarily invests in companies located in emerging markets with market caps of less than $5 billion at the time of purchase

Approximately 50-80 positions

Portfolio Managers
Ajay Krishnan Ajay Krishnan Lead Portfolio Manager
1 year on strategy
26 years at wasatch
Dan Chace Dan Chace Portfolio Manager
1 year on strategy
18 years at wasatch
Scott Thomas Scott Thomas Associate Portfolio Manager
5 years on strategy
8 years at wasatch
Kevin Unger Kevin Unger Associate Portfolio Manager
2 years on strategy
5 years at wasatch
Quick Look
As of 06/30/20
Total Assets*
$1,348M
Mutual Fund
$348.6M
Separate Accounts
$1,000M
Inception Date
10/01/07
Account Minimum
$10m
Primary Benchmark
MSCI Emerging Markets Small Cap Index

*Total strategy assets across all vehicles and composites

Documents
Fact Sheet
Commentary
9 Cumulative PM years on strategy

Budding consumer economies present attractive opportunities for companies with scalable business models to target the large and growing populations of the less-developed world.”

—Ajay Krishnan, Lead Portfolio Manager

Performance

Average Annual Total Returns AS OF 06/30/20 AS OF 07/31/20
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
Emerging Markets Small Cap Composite (Gross)
7.48%
27.36%
11.00%
26.15%
9.64%
8.80%
8.23%
7.26%
Emerging Markets Small Cap Composite (Net)
7.44%
27.07%
9.95%
24.40%
8.28%
7.48%
6.80%
5.83%
MSCI Emerging Markets Small Cap Index
9.24%
21.89%
-4.68%
1.11%
-1.22%
2.02%
1.97%
0.91%
MSCI Emerging Markets Index
8.94%
17.84%
-1.72%
6.55%
2.84%
6.15%
3.33%
1.55%

Returns for periods less than one year are not annualized. Since inception performance is calculated from 09/30/2007.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/19)
Emerging Markets Small Cap Composite
MSCI Emerging Markets Small Cap 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 Small Cap Composite contains fully discretionary equity accounts following the Emerging Markets Small Cap style.  The composite primarily invests in companies tied economically to emerging market countries with the goal of long-term growth of capital.  For comparison purposes the composite is measured against the MSCI Emerging Markets Small Cap and MSCI Emerging Markets indices.

The MSCI Emerging Markets and Emerging Markets Small Cap Indices are free float-adjusted market capitalization indices that are 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 06/30/20
Portfolio
Index
Number of Holdings
55
1559
Average Market Cap
($ Weighted)
$5.11B
$1.18B
Median Market Cap
$2.76B
$701M
EPS Growth (%, est. 5 yr)
22
16
P/E (Forward)
29
12
Portfolio Turnover (%)
28.8
n/a
Active Share (%)
97
n/a
Performance Statistics AS OF 06/30/20
5 yr
Alpha
7.54
Beta
0.89
R-Squared
0.83
Standard Deviation
18.6
Upside Capture
124
Downside Capture
89
Top 10 Holdings AS OF 06/30/20
Company
% of Net Assets
Silergy Corp. (Taiwan)
7%
Globant SA (Argentina)
4.7%
Voltronic Power Technology Corp. (Taiwan)
4.4%
Magazine Luiza SA (Brazil)
4.1%
Raia Drogasil SA (Brazil)
3.5%
Microport Scientific Corp. (Hong Kong)
2.9%
Tqm Corporation PCL (Thailand)
2.8%
ASPEED Technology Inc. (Taiwan)
2.8%
LEENO Industrial Inc. (South Korea)
2.6%
Vitasoy International Holdings Ltd. (Hong Kong)
2.5%
55 Number of holdings
97% Active share
Sector Allocation AS OF 06/30/20
Sector
Portfolio
Index
Information Technology
29.5
18.7
Financials
19.7
9.8
Consumer Staples
13.6
5.5
Industrials
11.1
12.9
Health Care
11.1
10.9
Consumer Discretionary
9.3
13.2
Materials
3.0
11.1
Communication Services
2.2
4.2
Cash & Cash Equivalents*
0.4
0.0
Real Estate
0.0
7.6
Utilities
0.0
4.4
Energy
0.0
1.8
Country Allocation AS OF 06/30/20
Portfolio (%)
Developed
6.3
Hong Kong
5.4
United Kingdom
0.9
Emerging & Frontier
93.3
Taiwan
23.2
India
21.4
Brazil
9.2
China
8.5
South Korea
6.7
Mexico
4.8
Argentina
4.7
Other
14.8
6.3% Developed
93.3% Em and Frontier

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

Commentary & Literature

Commentary
Fact Sheet
News & Updates

Opportunities Outside the U.S.

June 22, 2020

Quick Takeaways: High–quality companies outside the U.S. look especially attractive to us. Moreover,…

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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…

Read More >

Market Scout – Don’t Stop Believin’

January 9, 2020

For most of the past decade, emerging–market stocks have generally underperformed U.S. names and other developed–market equities….

Read More >

India’s Virtuous Circle of Amazing Progress

September 24, 2019

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

Read More >

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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