Wasatch Micro Cap Growth – U.S. Strategy

Strategy Overview

Highlights

Capitalize on an inefficient, alpha-rich segment of the market
Truly active, fundamental, bottom-up investment approach
Blend of high growth, core growth, and fallen angel micro-cap stocks

Investment Approach

We use a bottom-up approach that seeks to identify companies with outstanding long-term growth potential. We look for the following types of companies:

High growth: companies with minimum annual earnings growth of 20%
Core growth: high-quality, stable growing companies
Fallen angels: growth companies that have suffered a temporary setback

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

Approximately 50-80 positions

Portfolio Managers

Ken Korngiebel Lead Portfolio Manager

5 years on strategy

7 years at wasatch

Natalie Pesqué Associate Portfolio Manager

< 1 year on strategy

7 years at wasatch

Performance

Average Annual Total Returns AS OF 09/30/22 AS OF 09/30/22

Quarter-End Month-end

1 Month

3 Month

ytd

1 yr

3 yr

5 yr

10 yr

Micro Cap Growth - U.S. Composite (Gross)

-11.81%

-3.46%

-36.52%

-36.13%

8.05%

12.18%

13.52%

Micro Cap Growth - U.S. Composite (Net)

-11.81%

-3.65%

-37.00%

-36.74%

6.96%

10.88%

12.07%

Russell Microcap® Index

-9.64%

-0.48%

-25.48%

-27.46%

6.86%

3.11%

8.37%

Russell 2000® Index

-9.58%

-2.19%

-25.10%

-23.50%

4.29%

3.55%

8.55%

Returns for periods less than one year are not annualized.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/21)

Micro Cap Growth-U.S. Composite

Russell Microcap® 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 of composite descriptions of Wasatch composites and/or a GIPS Composite Report, e-mail inforequest@wasatchglobal.com. The U.S. Dollar is the currency used to express performance.

The Micro Cap Growth-U.S. Composite contains fully discretionary equity accounts following the Micro Cap Growth–U.S. style. The composite primarily invests in growing micro cap companies with the goal of long-term growth of capital. Income is an objective only when consistent with long-term growth of capital. The strategy prohibits investments in securities that trade on foreign exchanges. For comparison purposes the composite is measured against the Russell Microcap TR and Russell 2000 TR indices.

The Russell Microcap TR Index is an unmanaged total return index of the smallest 1,000 securities in the small cap Russell 2000 Index and the next smallest 1,000 companies based on a ranking of U.S. equities by market capitalization.

The Russell 2000 TR Index represents the smallest 2,000 companies in the Russell 3000 Index, ranked by total market capitalization.

All rights in the Russell Indexes vest in the relevant London Stock Exchange Group plc (collectively, the “LSE Group”), which owns these indexes. Russell® is a trademark(s) of the relevant LSE Group company and is used by any other LSE Group company under license. These indexes are 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 Fund or Separate Account. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or Separate Account or the suitability of these indexes for the purpose to which they are being put by Wasatch Global Investors.

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Portfolio

Characteristics AS OF 06/30/22

Portfolio

Index

Number of Holdings

64

1798

Average Market Cap
($ Weighted)

$1.32B

$561M

Median Market Cap

$995M

$215M

EPS Growth (%, est. 5 yr)

24

17

P/E (Forward)

18

9

Portfolio Turnover (%)

62.03

N/A

Active Share (%)

96

N/A

Performance Statistics AS OF 09/30/22

5 yr

Alpha

9.03

Beta

0.95

R-Squared

0.81

Standard Deviation

25.66

Upside Capture

121.37

Downside Capture

91.05

Top 10 Holdings AS OF 06/30/22

Company

% of Net Assets

Holley Inc.

4.1%

Vintage Wine Estates, Inc.

3.8%

Agilysys Inc.

2.8%

Grid Dynamics Holdings Inc.

2.7%

UFP Technologies Inc.

2.5%

Addus HomeCare Corp.

2.5%

Castle Biosciences Inc.

2.5%

Napco Security Technologies Inc.

2.5%

Construction Partners Inc.

2.4%

Cyber-Ark Software Ltd/Israel (Israel)

2.3%

64 Number of holdings

96% Active share

Sector Allocation AS OF 06/30/22

Sector

Portfolio

Index

Health Care

25.8 %

26.8 %

Information Technology

24.6 %

11.7 %

Industrials

18.5 %

10.9 %

Consumer Discretionary

13.9 %

10.1 %

Consumer Staples

6.5 %

2.7 %

Financials

5.8 %

21.6 %

Communication Services

2.0 %

2.8 %

Cash & Cash Equivalents*

1.6 %

N/A

Energy

1.3 %

4.8 %

Real Estate

0.0 %

4.2 %

Materials

0.0 %

3.5 %

Utilities

0.0 %

0.8 %

Country Allocation AS OF 09/30/22

Portfolio (%)

Developed

98.7%

United States

91.0%

Israel

7.5%

Canada

0.3%

91.0% United States

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

Commentary & Literature

Commentary

Fact Sheet

News & Updates

The State of Small-Cap Growth Stocks In the U.S.

August 11, 2022

U.S. small-cap growth stocks endured a sharp correction in 2022, but also…

Wasatch Wins Four 2022 Lipper Fund Awards

March 10, 2022

Wasatch Global Investors announced today that it has received four 2022 Refinitiv…

Wasatch Micro Cap Fund to Close to New Investors

January 15, 2021

Wasatch Global Investors announced today that effective at 4:00 p.m. ET on…

Barron’s – Finding Quality in Tiny Stocks

December 2, 2020

The past 10 years in equity markets have been the story of…

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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