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Wasatch U.S. Select Strategy

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Wasatch U.S. Select Strategy
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Strategy Overview

Objective

Long-term growth of capital

Highlights
  • A concentrated, yet diversified high-conviction portfolio of 20-40 stocks
  • Seeks the highest-quality growth companies in the U.S.
  • Truly active, collaborative, bottom-up, fundamental process
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

All cap flexibility with a focus on mid-cap companies

Approximately 20-40 positions

Portfolio Managers
Mike Valentine Mike Valentine Portfolio Manager
< 1 year on strategy
6 years at wasatch
Paul Lambert Paul Lambert Portfolio Manager
< 1 year on strategy
22 years at wasatch
Austin Bone Austin Bone Portfolio Manager
< 1 year on strategy
6 years at wasatch
Mick Rasmussen Mick Rasmussen Portfolio Manager
< 1 year on strategy
8 years at wasatch

We believe our fundamental, bottom-up research process lends itself to finding companies in which there’s still tremendous headroom for growth as their stocks move beyond small market capitalization limits.”

—Mike Valentine, Portfolio Manager

Performance

Average Annual Total Returns AS OF 12/31/22 AS OF 12/31/22
Quarter-End Month-end
1 Month
3 Month
ytd
1 yr
3 yr
5 yr
10 yr
Since
Inception
U.S. Select Composite (Gross)
-5.57%
8.61%
-30.15%
-30.15%
N/A
N/A
N/A
-16.23%
U.S. Select Composite (Net)
-5.63%
8.42%
-30.70%
-30.70%
N/A
N/A
N/A
-16.80%
Russell 3000® Growth Index
-7.58%
2.31%
-28.97%
-28.97%
N/A
N/A
N/A
-10.58%
Russell Midcap® Growth Index
-6.00%
6.90%
-26.72%
-26.72%
N/A
N/A
N/A
-13.39%

Returns for periods less than one year are not annualized. Since inception performance is calculated from 04/30/2021.

Calendar Year Returns (%) NET OF FEES (AS OF 12/31/22)
U.S. Select Composite
Russell 3000® 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.

Net performance was calculated using actual management fees for fee-paying accounts and a model fee for non-fee paying accounts. From April 30, 2021, to June 30, 2022, performance for the U.S. Select Composite contained only non-fee paying proprietary assets. A model fee of 0.75% was applied to the non-fee paying assets during the period to show the effect of how an advisory fee, compounded over a period of years, would have on returns. Actual fees will 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.

The Wasatch U.S. Select Composite contains fully discretionary accounts following the Wasatch U.S. Select style. The composite primarily invests in equity securities of all market capitalizations that are tied economically to the United States with the goal of long-term appreciation of capital. For comparison purposes the composite is measured against the Russell 3000® Growth and Russell Midcap® Growth indices.

The Russell 3000 Growth TR Index measures the performance of Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Growth Index is constructed to provide a barometer of the broad growth market.

The Russell Midcap Growth TR Index measures the performance of the mid-cap growth segment of the U.S. equity universe. It includes those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values.

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Portfolio

Characteristics AS OF 12/31/22
Portfolio
Index
Number of Holdings
35
1621
Average Market Cap
($ Weighted)
$16.12B
$587.80B
Median Market Cap
$9.19B
$2.18B
EPS Growth (%, est. 5 yr)
15
15
P/E (Forward)
27
20
Portfolio Turnover (%)
N/A
N/A
Active Share (%)
98
N/A
Performance Statistics AS OF 12/31/22
Since Inception
Alpha
-6.56
Beta
0.97
R-Squared
0.88
Standard Deviation
23.30
Upside Capture
74.26
Downside Capture
100.59
Top 10 Holdings AS OF 09/30/22
Company
% of Net Assets
Ametek Inc
4.2%
Balchem Corp.
4.1%
Heico Corp. - Cl A
3.9%
Ensign Group Inc/The
3.9%
Amphenol Corp.- Cl A
3.9%
Roper Technologies Inc.
3.7%
Bank OZK
3.7%
Copart Inc.
3.6%
Old Dominion Freight Line Inc.
3.5%
HealthEquity Inc.
3.4%
35 Number of holdings
98% Active share
Sector Allocation AS OF 12/31/22
Sector
Portfolio
Index
Information Technology
33.3 %
41.8 %
Industrials
17.9 %
8.7 %
Health Care
17.6 %
14.1 %
Financials
12.4 %
3.4 %
Consumer Discretionary
9.3 %
14.0 %
Materials
6.7 %
1.6 %
Cash & Cash Equivalents*
2.7 %
N/A
Communication Services
0.0 %
6.5 %
Consumer Staples
0.0 %
6.0 %
Energy
0.0 %
2.1 %
Real Estate
0.0 %
1.7 %
Utilities
0.0 %
0.2 %
Country Allocation AS OF 12/31/22
Portfolio (%)
Developed
97.3%
United States
93.9%
Ireland
3.4%
93.9% United States

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, Inc., 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 Advisors, Inc. is exempt from the requirement to hold an Australian financial services license in accordance with class order 03/1100 in respect of the provision of financial services to wholesale clients in Australia.

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