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Wasatch Small Cap Growth Strategy

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Wasatch Small Cap Growth Strategy
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Strategy Overview

Highlights
  • Blend of core-growth and high-growth holdings provides balance and upside potential
  • Core Growth: highest-quality, stable growing companies
  • High Growth: companies with minimum annual earnings growth of 25%
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 in good and bad economic environments

Primarily invests in U.S. companies with market caps of less than $5 billion at the time of purchase

Approximately 50-75 positions

Portfolio Managers
JB Taylor JB Taylor Lead Portfolio Manager
8 years on strategy
25 years at wasatch
Ken Korngiebel Ken Korngiebel Portfolio Manager
3 years on strategy
5 years at wasatch
Ryan Snow Ryan Snow Portfolio Manager
3 years on strategy
21 years at wasatch
Quick Look
As of 03/31/21
Total Assets*
$5,506M
Mutual Fund
$3,390M
Separate Accounts
$2,116M
Inception Date
09/08/75
Account Minimum
$1m
Primary Benchmark
Russell 2000® Growth Index

*Total strategy assets across all vehicles and composites

Documents
Fact Sheet
Commentary
14 Cumulative PM years on strategy

We focus on high-quality companies that we believe will take market share and grow sales and earnings for long periods of time.”

—JB Taylor, Lead Portfolio Manager

Performance

Average Annual Total Returns AS OF 03/31/21 AS OF 05/31/21
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Small Cap Growth Composite (Gross)
-3.40%
-1.22%
6.55%
62.15%
30.41%
26.78%
17.65%
Small Cap Growth Composite (Net)
-3.57%
-1.43%
6.15%
60.90%
29.33%
25.69%
16.58%
Russell 2000® Growth Index
-2.86%
-3.86%
4.10%
50.14%
14.48%
17.57%
12.76%
Russell 2000® Index
0.21%
3.34%
15.30%
64.56%
13.06%
16.01%
11.86%

Returns for periods less than one year are not annualized.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/20)
Small Cap Growth Composite
Russell 2000® Growth 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 Small Cap Growth Composite contains fully discretionary equity accounts following the Small Cap Growth style.  The composite primarily invests in small growth companies with the goal of long-term growth of capital.  Income is a secondary objective, but only when consistent with long-term growth of capital.  For comparison purposes the composite is measured against the Russell 2000 Growth TR and Russell 2000 TR indices.

The Russell 2000 Growth TR Index measures the performance of Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values.

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 03/31/21
Portfolio
Index
Number of Holdings
63
1147
Average Market Cap
($ Weighted)
$5.54B
$4.15B
Median Market Cap
$3.56B
$1.28B
EPS Growth (%, est. 5 yr)
25
21
P/E (Forward)
45
26
Portfolio Turnover (%)
32.91
N/A
Active Share (%)
93
N/A
Performance Statistics AS OF 03/31/21
5 yr
Alpha
7.51
Beta
0.97
R-Squared
0.9
Standard Deviation
20.99
Upside Capture
116
Downside Capture
84
Top 10 Holdings AS OF 03/31/21
Company
% of Net Assets
Kornit Digital Ltd. (Israel)
3.9%
Ensign Group Inc/The
3.5%
Medpace Holdings Inc.
3.5%
Freshpet Inc.
3.3%
LGI Homes Inc.
3.1%
Five9 Inc.
3.1%
Pinnacle Financial Partners Inc.
2.9%
Monolithic Power Systems Inc.
2.8%
Floor & Decor Holdings Inc.
2.7%
Cyber-Ark Software Ltd/Israel (Israel)
2.5%
63 Number of holdings
93% Active share
Sector Allocation AS OF 03/31/21
Sector
Portfolio
Index
Health Care
26.7
33.3
Information Technology
24.3
20.1
Consumer Discretionary
20.1
14.9
Industrials
12.9
14.8
Financials
9.8
3.9
Consumer Staples
3.3
3.1
Cash & Cash Equivalents*
1.9
0.0
Energy
1.0
0.2
Real Estate
0.0
3.5
Materials
0.0
2.6
Communication Services
0.0
2.2
Utilities
0.0
1.5
Country Allocation AS OF 03/31/21
Portfolio (%)
Developed
95.9
United States
87.4
Israel
6.4
Ireland
2.1
Emerging & Frontier
2.2
Argentina
2.2
87.4% United States

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

Commentary & Literature

Commentary
Fact Sheet
News & Updates

Wasatch Core Growth and Small Cap Growth Funds to Close to New Investors

June 29, 2020

Salt Lake City, Utah, June 29, 2020—Wasatch Global Investors announced today that…

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Biotech: Lively Growth Prospect Or Financial Health Hazard?

September 24, 2019

Decidedly few corners of the investing world are capable of engaging the…

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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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