Wasatch Long/Short Alpha Fund Institutional (WGLSX)

Fund Overview

Objective

Long-term growth of capital

Highlights

The Fund will typically purchase U.S. common stocks (“long” equity positions) in what Wasatch believes are promising companies and sell short those stocks (“short” equity positions) in companies it expects to underperform.
Under normal conditions, the Fund intends to maintain a net long exposure to the market (measured as the market value of the long positions minus the short positions).
The goal is to allow the Fund to benefit from a rising market while still affording some protection from a falling market.

Investment Approach

We use Wasatch’s classic fundamental, bottom-up investment analysis with increased support from our internally developed quantitative signals and tools. On the long side, 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 orientation but bias towards small and mid-cap companies

Approximately 30-60 “long” and 0-60 “short” equity positions

Fund Managers

Mick Rasmussen Lead Portfolio Manager

2 years on fund

9 years at wasatch

Performance

Total Returns AS OF 09/30/23 AS OF 11/30/23

Quarter-End Month-end

1 Month

3 Month

ytd

1 yr

3 yr

5 yr

10 yr

Since
Inception

Long/Short Alpha Fund

8.74%

0.51%

15.92%

12.85%

N/A

8.57%

Russell 2500™ Index

9.00%

-3.34%

6.06%

-0.25%

N/A

-4.80%

FTSE U.S. 3-Month Treasury Bill Index

0.46%

1.39%

4.77%

5.12%

N/A

2.88%

Returns for periods greater than one year are annualized. The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be lower or higher than the data quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Advisor may absorb certain expenses, leading to higher total shareholder returns. Wasatch Funds will deduct a 2% redemption fee on Fund shares held 60 days or less. Performance data does not reflect this redemption fee or taxes. Total Expense Ratio: Institutional Class 3.10%. The Advisor has contractually agreed to limit certain expenses to 1.50% through at least 1/31/2024.

Growth of Hypothetical Investment 10/01/21 to 09/30/23

Long/Short Alpha Fund

Russell 2500™ Index

The hypothetical chart does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares.

Calendar Year Returns (%) As of 12/31/22

Long/Short Alpha Fund

Russell 2500™ Index

Portfolio

Characteristics AS OF 09/30/23

Long

Short

Index

Number of Holdings

58

56

2485

Average Market Cap
($ Weighted)

$8.14B

$6.52B

$6.21B

Median Market Cap

$4.22B

$2.66B

$1.26B

EPS Growth (%, est. 5 yr)

18

*

12

P/E (Forward)

19

*

13

% of Net Assets

112

33

*

Performance Statistics AS OF 09/30/23

Since Inception

Alpha

10.39

Beta

0.65

R-Squared

0.72

Standard Deviation

16.28

Upside Capture

70.03

Downside Capture

49.14

Sharpe Ratio

0.30

Top 10 Long Holdings AS OF 09/30/23

Company

% of Net Assets

HealthEquity, Inc.

4.1%

RBC Bearings, Inc.

3.7%

Kadant, Inc.

3.5%

Pool Corp.

3.3%

Paylocity Holding Corp.

3.2%

Ensign Group, Inc.

3.1%

Innospec, Inc.

2.9%

Intra-Cellular Therapies, Inc.

2.9%

Globant SA

2.9%

ICF International, Inc.

2.8%

Top 10 Short Holdings AS OF 09/30/23

Company

% of Net Assets

Alteryx, Inc. Class A

-1.2%

Ceridian HCM Holding, Inc.

-1.0%

Nevro Corp.

-0.9%

Sweetgreen, Inc. Class A

-0.9%

Revvity, Inc.

-0.9%

ROBLOX Corp. Class A

-0.8%

Pulmonx Corp.

-0.8%

SBA Communications Corp.

-0.8%

Dun & Bradstreet Holdings, Inc.

-0.8%

Endeavor Group Holdings, Inc. Class A

-0.8%

Sector Allocation AS OF 09/30/23

Sector

Long

Short

Index

Health Care

24.9 %

-5.7 %

12.0 %

Information Technology

22.6 %

-4.2 %

12.8 %

Industrials

19.3 %

-6.9 %

19.7 %

Consumer Discretionary

17.7 %

-2.4 %

12.5 %

Financials

17.0 %

-3.7 %

16.0 %

Energy

4.2 %

-0.3 %

5.9 %

Materials

2.9 %

-0.9 %

5.5 %

Communication Services

1.8 %

-3.4 %

2.6 %

Consumer Staples

1.4 %

-0.9 %

3.4 %

Real Estate

0.0 %

-3.2 %

7.0 %

Utilities

0.0 %

-0.8 %

2.7 %

Weights are calculated as a percentage of net assets including cash & cash equivalents

Commentary & Literature

News & Updates

Recession, Soft Landing or Persistent Inflation?

November 17, 2023

In the years following the Covid-19 pandemic, the macroeconomic events shaping markets…

White Paper: Wasatch Long/Short Alpha Fund

March 20, 2023

On October 1, 2021, we launched the Wasatch Long/Short Alpha Fund—which is…

Wasatch Launches Long/Short Alpha Fund

October 1, 2021

Wasatch Global Investors announced today the launch of the Wasatch Long/Short Alpha…

Distributions

Record Date

Payable Date

Income

Short-Term Gain

Long-Term Gain

Total Per Share

Reinvest Price

12/14/22

12/15/22

--

$ 0.009652

--

$ 0.009652

$ 10.310000

Historical Distributions and NAVs Select start and end dates

Important Disclosures

Equity investing involves risks, including potential loss of the principal amount invested. Short selling incurs significant unique risks, including potentially unlimited downside risk, high short-sale related expenses, and unavailability of securities to sell short, among others, all of which could negatively impact the performance of the Fund. Additionally, the Fund may not be able to borrow the securities it intends to sell short. Being non-diversified, the Fund can invest a larger portion of its assets in the stocks of a limited number of companies than a diversified fund. Non-diversification increases the risk of loss to the Fund if the values of these securities decline. Because the Fund invests in both long and short equity positions, the Fund has overall exposure to changes in the value of securities, which far exceeds the value of the Fund’s assets. This may magnify gains and losses and increase the volatility of the Fund’s returns. Investment in the Fund will involve market risks associated with different types of investment decisions than those made for a typical “long only” fund. There is no guarantee that the use of long and short positions will succeed in limiting the Fund’s exposure to market movements, sector-swings or other risk factors. Securities in the Fund are generally added to the portfolio as long or short positions based upon security rankings provided by multi-factor quantitative models and on fundamental analysis of securities. The reliance on quantitative models entails unique risks, including the risk that a model may be limited or incorrect, that the data on which a model relies may be incorrect or incomplete and the risk that the Advisor may not be successful in selecting companies for investment or determining the weighting of particular stocks in the Fund’s portfolio. The Advisor will generally sell a security if, among other things, the rankings provided by the quantitative models decline and/or research analysis reveals a deterioration of the company fundamentals.

The Russell 2500 TR Index is a market-cap weighted index that includes the smallest 2,500 small- and mid-cap stocks covered in the broad-based Russell 3000 of U.S.-based listed equities.

The FTSE 3-Month U.S. Treasury Bill Index measures monthly return equivalents of yield averages that are not marked to market. The Three-Month Treasury Bill Indexes consist of the last three three-month Treasury bill issues.

The Fund has been developed solely by Wasatch Global Investors. The Fund is not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Russell Indices vest in the relevant LSE Group company which owns the Index. Russell ® is a trademark of the relevant LSE Group company and used by any other LSE Group company under license. TMX® is a trademark of TSX, Inc. and used by the LSE Group under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Wasatch Core Growth Fund or the suitability of the Index for the purpose to which it is being put by Wasatch Global Investors. Indexes are unmanaged, and investors cannot invest directly in an index.

You cannot invest directly in any index.

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.

The Sharpe Ratio is calculated using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the fund’s risk-adjusted performance.

Fund holdings are subject to risks and may change at any time. References to specific securities should not be construed as recommendations by the Fund or its Advisor.

Wasatch Funds are distributed by ALPS Distributors, Inc.

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