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Wasatch Small Cap Ultra Growth Strategy

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Wasatch Small Cap Ultra Growth Strategy
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Strategy Overview

Highlights
  • Most growth-oriented Wasatch fund
  • Blend of franchise, disruptive growth, and ballast growth holdings
  • Awareness of secular trends in economy and industry
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:

  • Franchise: significant headroom and enduring business model
  • Disruptive Growth: significant headroom with a shorter horizon
  • Ballast Growth: stable, consistent growth companies that moderate portfolio risk

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

Approximately 70-90 positions

Portfolio Managers
John Malooly John Malooly Lead Portfolio Manager
8 years on strategy
22 years at wasatch
Quick Look
As of 06/30/20
Total Assets*
$1,557M
Mutual Fund
$1,552M
Separate Accounts
$4.7M
Inception Date
08/16/92
Account Minimum
$1m
Primary Benchmark
Russell 2000® Growth Index

*Total strategy assets across all vehicles and composites

Documents
Fact Sheet
Commentary
8 Cumulative PM years on strategy

Our focus is on companies with high-quality management teams and business models. We’re looking for companies that are disrupting—and are not being disrupted.”

—John Malooly, Lead Portfolio Manager

Performance

Average Annual Total Returns AS OF 06/30/20 AS OF 06/30/20
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
Small Cap Ultra Growth Composite (Gross)
7.87%
53.63%
25.75%
38.82%
30.96%
21.87%
20.77%
13.95%
Small Cap Ultra Growth Composite (Net)
7.87%
53.39%
25.26%
37.58%
29.72%
20.70%
19.58%
12.65%
Russell 2000® Growth Index
3.84%
30.58%
-3.06%
3.48%
7.86%
6.86%
12.92%
8.26%
Russell 2000® Index
3.53%
25.42%
-12.98%
-6.63%
2.01%
4.29%
10.50%
9.06%

Returns for periods less than one year are not annualized. Since inception performance is calculated from 08/31/1992.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/19)
Small Cap Ultra 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®). 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 Small Cap Ultra Growth Composite contains fully discretionary equity accounts following the Small Cap Ultra Growth style.  The composite primarily invests in smaller high 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 and Russell 2000 indices.

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

The Russell 2000 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 03/31/20
Portfolio
Index
Number of Holdings
72
1167
Average Market Cap
($ Weighted)
$4.12B
$2.38B
Median Market Cap
$1.45B
$605M
EPS Growth (%, est. 5 yr)
25
16
P/E (Forward)
28
15
Portfolio Turnover (%)
50.21
n/a
Active Share (%)
95
n/a
Performance Statistics AS OF 06/30/20
5 yr
Alpha
13.23
Beta
1.09
R-Squared
0.89
Standard Deviation
23.49
Upside Capture
146
Downside Capture
90
Top 10 Holdings AS OF 03/31/20
Company
% of Net Assets
Freshpet Inc.
2.9%
Five9 Inc.
2.6%
Ollie's Bargain Outlet Holdings Inc.
2.5%
Trex Company Inc.
2.4%
Paylocity Holding Corp.
2.4%
Tandem Diabetes Care Inc.
2.3%
Proofpoint Inc.
2.3%
Monolithic Power Systems Inc.
2.3%
HubSpot Inc.
2.3%
DocuSign Inc.
2.2%
72 Number of holdings
95% Active share
Sector Allocation AS OF 06/30/20
Sector
Portfolio
Index
Health Care
36.4
34.4
Information Technology
24.8
21.2
Consumer Discretionary
14.0
12.7
Industrials
9.5
13.0
Consumer Staples
5.1
3.2
Financials
4.3
4.3
Communication Services
1.9
2.6
Cash & Cash Equivalents*
1.4
0.0
Real Estate
1.1
3.8
Materials
0.9
2.7
Energy
0.5
0.2
Utilities
0.0
1.9
Country Allocation AS OF 06/30/20
Portfolio (%)
Developed
97.3
United States
90.3
Israel
4.1
Ireland
1.5
United Kingdom
1.4
Emerging & Frontier
1.4
Argentina
1.4
90.3% United States

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

Commentary & Literature

Commentary
Fact Sheet
News & Updates

Barron’s – How a Market-Beating Small-Cap Fund Finds Killer Companies

September 27, 2019

Metrics matter to John Malooly, manager of the small-cap-focused Wasatch Ultra Growth…

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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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Investor’s Business Daily – Wasatch Gets Results by Focusing on High-Quality Management Teams

April 8, 2019

Click Here to read the full story from IBD.

Read More >

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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