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Wasatch International Small Cap Growth Strategy

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Wasatch International Small Cap Growth Strategy
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Strategy Overview

Highlights
  • Seeks the highest-quality small-cap growth companies outside the U.S.
  • Truly active, collaborative, bottom-up, fundamental process
  • Systematic coverage of the developed and 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 outside the U.S. with market caps of less than $5 billion at the time of purchase

Approximately 60-90 positions

Portfolio Managers
Ken Applegate Ken Applegate Lead Portfolio Manager
8 years on strategy
10 years at wasatch
Linda Lasater Linda Lasater Portfolio Manager
10 years on strategy
17 years at wasatch
Derrick Tzau Derrick Tzau Associate Portfolio Manager
4 years on strategy
6 years at wasatch
22 Cumulative PM years on strategy

The high-quality companies we favor generally have strong balance sheets and cash flows, giving them the ability to weather unexpected events and still invest in their businesses.”

—Ken Applegate, Lead Portfolio Manager

Performance

Total Returns AS OF 03/31/24 AS OF 04/30/24
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
International Small Cap Growth Composite (Gross)
-3.85%
-2.98%
-7.16%
0.36%
-9.25%
1.16%
4.32%
9.65%
International Small Cap Growth Composite (Net)
-3.97%
-3.19%
-7.46%
-0.56%
-10.07%
0.22%
3.30%
8.37%
MSCI AC World Ex-U.S.A. Small Cap Index
-1.46%
2.38%
0.62%
9.54%
-1.60%
5.47%
4.61%
8.27%
MSCI World Ex-U.S.A. Small Cap Index
-2.89%
1.35%
-0.38%
5.01%
-3.21%
4.21%
4.26%
7.75%

Returns for periods greater than one year are annualized. Since inception performance is calculated from 04/30/2002.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/23)
International Small Cap Growth Composite
MSCI AC World Ex-U.S.A. Small Cap Index
MSCI 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®). 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 and description of composites and pooled funds and/or a GIPS Composite Report, e-mail inforequest@wasatchglobal.com. The U.S. Dollar is the currency used to express performance.

The International Small Cap Growth Composite contains fully discretionary equity accounts following the International Small Cap Growth style.  The composite primarily invests in foreign small cap growth 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 Net TR and MSCI World Ex-U.S.A. Small Cap Net TR indices.

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

The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties or originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www. msci.com). Indexes are unmanaged, and investors cannot invest directly in an index.

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Portfolio

Characteristics AS OF 03/31/24
Portfolio
Index
Number of Holdings
63
4424
Average Market Cap
($ Weighted)
$4.55B
$2.70B
Median Market Cap
$3.69B
$1.12B
EPS Growth (%, est. 5 yr)
18
15
P/E (Forward)
23
13
Portfolio Turnover (%)
40.21
N/A
Active Share (%)
97
N/A
Performance Statistics AS OF 03/31/24
5 yr
Alpha
-2.55
Beta
0.97
R-Squared
0.79
Standard Deviation
21.58
Upside Capture
90.01
Downside Capture
103.13
Top 10 Holdings AS OF 03/31/24
Company
% of Net Assets
Diploma PLC (United Kingdom)
3.8%
Descartes Systems Group Inc/The (Canada)
3.8%
Qualitas Controladora SAB de CV (Mexico)
3.3%
Voltronic Power Technology Corp. (Taiwan)
3.1%
Japan Elevator Service Holdings Co Ltd. (Japan)
3.1%
SMS Co Ltd. (Japan)
2.9%
Sugi Holdings Co Ltd. (Japan)
2.8%
GMO Payment Gateway Inc. (Japan)
2.7%
Scout24 SE (Germany)
2.7%
LEENO Industrial Inc. (South Korea)
2.5%
63 Number of holdings
97% Active share
Sector Allocation AS OF 03/31/24
Sector
Portfolio
Index
Industrials
29.1 %
21.1 %
Information Technology
28.4 %
11.9 %
Financials
18.0 %
11.4 %
Health Care
7.4 %
6.6 %
Communication Services
5.9 %
3.7 %
Consumer Staples
5.5 %
6.2 %
Consumer Discretionary
2.0 %
11.9 %
Materials
1.8 %
11.3 %
Real Estate
1.5 %
8.8 %
Cash & Cash Equivalents*
0.4 %
N/A
Energy
0.0 %
4.1 %
Utilities
0.0 %
2.9 %
Country Allocation AS OF 03/31/24
Portfolio (%)
Developed
78.4%
Japan
23.2%
United Kingdom
15.9%
Germany
9.6%
Canada
9.5%
Australia
6.8%
Sweden
3.7%
Italy
2.8%
Other
6.9%
Emerging & Frontier
21.2%
India
7.1%
Taiwan
6.6%
Mexico
3.3%
South Korea
2.9%
Brazil
1.2%
78.4% Developed
21.2% Em and Frontier

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

Commentary & Literature

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 LP, 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 Global Investors is exempt from the requirement to hold an Australian financial services licence in accordance with class order 03/1100 in respect of the provision of financial services to wholesale clients in Australia.

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