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Wasatch International Micro Cap Strategy

Wasatch International Micro Cap Growth Strategy
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Strategy Overview

Objective

Long-Term growth of capital

Highlights
  • Seeks undiscovered micro-cap growth companies at attractive valuations
  • Truly active, collaborative, bottom-up, fundamental process
  • Systematic coverage of the developed and emerging markets micro-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
  • Price-to-earnings ratios around our expected 5-year earnings growth rate

Primarily invests in companies outside the U.S. with market caps of less than $1.5 billion at the time of purchase

Approximately 80-120 positions

Portfolio Managers
Linda Lasater Linda Lasater Lead Portfolio Manager
3 years on strategy
13 years at wasatch
Jared Whatcott Jared Whatcott Portfolio Manager
5 years on strategy
14 years at wasatch
Allison He Allison He Associate Portfolio Manager
1 year on strategy
6 years at wasatch
Quick Look
As of 12/31/19
Total Assets*
$963.1m
Mutual Fund
$538.6m
Separate Accounts
$424.5m
Inception Date
01/27/05
Account Minimum
$10m
Primary Benchmark
MSCI AC World Ex-U.S.A. Small Cap Index

*Total strategy assets across all vehicles and composites

Documents
Fact Sheet
Commentary
9 Cumulative PM years on strategy

We rely on our investment process and bottom-up company research to find the best opportunities in a big and diverse universe of micro-cap companies.”

—Linda Lasater, Lead Portfolio Manager

Performance

Average Annual Total Returns AS OF 12/31/19 AS OF 12/31/19
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
International Micro Cap Composite (Gross)
2.21%
8.43%
34.79%
34.79%
15.13%
12.76%
13.36%
12.30%
International Micro Cap Composite (Net)
2.13%
8.11%
33.02%
33.02%
13.46%
10.95%
11.36%
10.18%
MSCI AC World Ex-U.S.A. Small Cap Index
4.93%
11.01%
22.42%
22.42%
9.65%
7.04%
6.92%
6.87%
MSCI World Ex-U.S.A. Small Cap Index
4.63%
11.40%
25.41%
25.41%
10.42%
8.17%
8.04%
6.57%

Returns for periods less than one year are not annualized. Since inception performance is calculated from 01/31/2005.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/19)
International Micro Cap Composite
MSCI AC World Ex-U.S.A. 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 International Micro Cap Composite contains fully discretionary equity accounts following the International Micro Cap style.  The composite primarily invests in foreign micro cap companies with the goal of long-term growth of capital.   For comparison purposes the composite is measured against the MSCI AC World Ex-U.S.A. Small Cap and MSCI World Ex-U.S.A. Small Cap indices.

The MSCI AC World Ex-U.S.A. Small Cap Index is an unmanaged index representing developed and emerging markets, excluding securities of U.S. issuers.

The MSCI World Ex-U.S.A. Small Cap Index is an unmanaged index representing 22 developed markets, excluding the United States.

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
93
4210
Average Market Cap
($ Weighted)
$1.32b
$2.45b
Median Market Cap
$945m
$898m
EPS Growth (%, est. 5 yr)
20
12
P/E (Forward)
27
15
Portfolio Turnover (%)
39.58
n/a
Active Share (%)
99
n/a
Performance Statistics AS OF 12/31/19
5 yr
Alpha
6.7
Beta
0.78
R-Squared
0.63
Standard Deviation
12.13
Upside Capture
77
Downside Capture
47
Top 10 Holdings AS OF 09/30/19
Company
% of Net Assets
Fortnox AB (Sweden)
2.5%
Hypoport AG (Germany)
2.3%
Prestige International Inc. (Japan)
2.1%
Philippine Seven Corp. (Philippines)
2%
AK Medical Holdings Ltd. (China)
1.9%
Rakus Co Ltd. (Japan)
1.9%
Esker SA (France)
1.8%
Qualitas Controladora SAB de CV (Mexico)
1.8%
Pro Medicus Ltd. (Australia)
1.8%
Systena Corp. (Japan)
1.8%
93 Number of holdings
99% Active share
Sector Allocation AS OF 12/31/19
Sector
Portfolio
Index
Information Technology
25.1
11.1
Health Care
16.6
7.3
Industrials
15.3
19.7
Financials
12.5
10.4
Consumer Staples
9.8
5.9
Consumer Discretionary
7.8
12.5
Communication Services
5.7
4.3
Materials
3.3
9.9
Cash & Cash Equivalents*
3.2
0.0
Energy
0.7
3.3
Real Estate
0.0
12.3
Utilities
0.0
3.2
Country Allocation AS OF 12/31/19
Portfolio (%)
Developed
64.3
Japan
23.7
United Kingdom
10.7
Germany
7.8
Sweden
5.9
Australia
5.4
France
3.7
Canada
1.9
Other
5.2
Emerging & Frontier
32.6
India
10.5
Taiwan
4.6
South Korea
3.2
China
3.1
Mexico
2.7
Thailand
2.0
Philippines
2.0
Other
4.5
64.3% Developed
32.5% Em and Frontier

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

Commentary & Literature

Commentary
Fact Sheet
News & Updates

Wasatch Advisors Rebrands as Wasatch Global Investors

September 24, 2019

Salt Lake City, Utah, September 24, 2019—Independent investment manager Wasatch Advisors has…

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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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