Wasatch Funds

Approximate Date of Proposed Public Offering: As soon as practicable following effectiveness.

This prospectus contains important information about the no-load mutual funds offered by Wasatch Funds. Before you invest, please read the prospectus carefully, paying particular attention to the risks involved. Keep the prospectus for future reference.

As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any statement to the contrary is a criminal offense.

The information on the following pages summarizes the investment objectives, principal strategies and principal risks of investing in the Funds as well as each Fund’s historical performance and expenses.

Management fees and net expenses for the International Opportunities, Micro Cap and Micro Cap Value Funds are higher than those paid by most mutual funds. The management fees and net expenses for certain other Wasatch Funds are higher than those paid by many mutual funds. Please see “Fees and Expenses” on page 28 for more information.

A Fund’s principal investment strategies are those we believe are most likely to be important in trying to achieve the Fund’s primary investment objective.

Each Fund may also employ strategies and invest in securities that are not described under principal strategies. Please see “Other Investment Strategies and Their Risks” on page 45 and the Statement of Additional Information (SAI) for a discussion of these strategies, securities and their risks.

We have provided a glossary of terms used in the prospec- tus that can be found on page 72. Words that are italicized within the text of the prospectus are defined in the glossary.

An investment in any of the Funds is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

As with all mutual funds or investments, it is possible to lose money by investing in the Funds.

WHY WASATCH CLOSES OR RE-OPENS FUNDS

Wasatch Advisors, investment advisor to Wasatch Funds, periodically closes certain Wasatch Equity Funds to control asset levels. The Wasatch Equity Funds are the Core Growth, Global Science & Technology, Heritage Growth, International Growth, International Opportunities, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value, Strategic Income and Ultra Growth Funds (the “Equity Funds”).

We believe that when we close the Equity Funds we are acting in the best interests of our shareholders by preserving the integrity of the Fund’s investment strategies. Closing Funds can be an important component of portfolio management, particularly for Funds that primarily invest in smaller companies.

Wasatch has two levels of closed Funds, sometimes referred to as “soft closed” and “hard closed.” A “soft closed” fund permits existing shareholders of that Fund to make additional investments in that Fund but is closed to new investors, while a “hard closed” fund is closed to all investors subject to certain exceptions.

When the assets of a closed Fund are at a level such that we believe additional assets could be invested without impairing the Fund, Wasatch may re-open the Fund.

Wasatch Advisors also manages separate account portfolios that are similar in composition to some of the Wasatch Funds and carefully considers many business factors including aggregate assets in Funds and separate accounts when deciding to close or open Funds.

As described in more detail in the SAI, Wasatch Advisors retains the right to make investor exceptions to closed Funds.

HOW WASATCH CLOSES OR REOPENS FUNDS

Fund closings or reopenings will be posted on Wasatch Funds’ web site at www.wasatchfunds.com. The Advisor will make every effort to post information related to fund closings at least two weeks prior to the effective date of the closing. You can also request information about a Fund’s open or closed status from a shareholder services representative by calling our toll-free number at 800.551.1700.

Each change in a Fund’s status also will be filed electronically with the SEC. Please see page 75 for more information about how to view or obtain copies of documents filed with the SEC.

INVESTMENT OBJECTIVE

Long-term growth of capital. Income is a secondary objective, but only when consistent with long-term growth of capital. Currently, we do not expect the Fund’s investments to generate substantial income. The Fund’s investment objectives cannot be changed without shareholder approval.

PRINCIPAL STRATEGIES

Invest in growing companies at reasonable prices.

Under normal market conditions, we will invest the Fund’s assets primarily in the equity securities of growing companies. These companies are usually small to mid-size with market capitalizations of less than $5 billion at the time of purchase.

We use a process of “bottom-up” fundamental analysis to look for individual companies that we believe are stable and have the potential to grow steadily for long periods of time.

Desirable attributes for companies in which the Fund invests include experienced top management, a sustainable competitive advantage, stable demand for products and services and the ability to capitalize on favorable long-term trends.

The Fund seeks to purchase stocks at prices we believe are reasonable relative to our projection of a company’s five year earnings growth rate.

The Fund may also invest in securities issued by foreign companies.

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

Foreign Securities may be less liquid and their prices may be more volatile than domestic securities. There may be less government supervision and regulation of foreign stock exchanges, brokers, custodians and listed companies than in the U.S.

Currency Risk. The U.S. dollar value of the Fund’s assets will be affected by foreign currency exchange rates and may be affected by exchange control regulations. While the Fund has the ability to hedge against fluctuations in foreign currency exchange rates, it has no present intention to do so. A risk of not hedging currencies is that if the U.S. dollar strengthens, returns from foreign markets will be less when converted into U.S. dollars.

Political and Economic Risk. Foreign investments may be subject to heightened political and economic risks, particu- larly in countries with emerging economies and securities markets.

Regulatory Risk. Foreign companies not publicly traded in the U.S. are not subject to accounting and financial reporting standards and requirements comparable to those U.S. companies must meet.

Foreign Tax Risk. The Fund’s income from foreign issuers may be subject to non-U.S. withholding taxes. The Fund may also be subject to taxes on trading profits or on transfers of securities in some countries.

Transaction Costs. The costs of buying and selling foreign securities including brokerage, tax and custody costs are generally higher than those for domestic transactions.

Emerging Markets. Securities in emerging markets are particularly subject to the risks described above for foreign securities.

Small Companies may lack the financial resources, product diversification and competitive strengths of larger companies. The stocks of small and mid-size companies may not trade as readily as the stocks of large companies and their share prices may fluctuate more widely.

Growth Stocks typically trade at higher price-to-earnings ratios (P/Es) than other stocks. Their stock prices are more volatile because they tend to be more sensitive to changes in a company’s current or expected earnings growth.

Non-Diversification. 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.

WHO SHOULD INVEST

We seek to limit volatility by investing in companies that we believe are stable and have the potential for consistent long-term growth. Nevertheless, the Fund will experience volatility and is best suited for long-term investors. It is not appropriate for short-term investors or those trying to time the market.

HISTORICAL PERFORMANCE

The following tables provide information on how the Fund has performed over time. The Fund’s past performance before and after taxes is not necessarily an indication of how the Fund will perform in the future.

The chart above is intended to provide you with an indication of the risks of investing in the Core Growth Fund by showing changes in the Fund’s performance from year to year.

The table above is designed to help you evaluate your risk tolerance by showing the Fund’s best and worst quarterly performance for the years shown in the bar chart above.

The table above allows you to compare the Fund’s performance to that of a market index.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

The Fund’s returns after taxes on distributions and sale of Fund shares may be higher than returns before taxes and after taxes on distributions because they include the effect of a tax benefit an investor may receive from the capital losses that would have been incurred.

The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 Index is widely regarded in the industry as accurately capturing the universe of small company stocks.

You cannot invest directly in the Index. The Index’s returns reflect no deductions for fees, expenses or taxes.

INVESTMENT OBJECTIVE

Long-term growth of capital. The Fund’s investment objective can be changed without shareholder approval.

PRINCIPAL STRATEGIES

Invest in domestic and foreign science and technology companies.

Under normal market conditions, we will invest at least 80% of the Fund’s net assets in the equity securities of science and technology companies. Shareholders will be notified prior to any change in this policy.

We define science and technology companies as those whose primary source of revenue is related to science or technology such as companies that develop, produce or distribute products or services in the computer software, computer systems and components, semiconductor, electronics, communications and chemical industries as well as medical technology companies in the biotechnology, pharmaceutical and medical products industries.

We will use a process of “bottom-up” fundamental analysis to invest in companies of any size. However, because science and technology are rapidly evolving, we expect to invest a significant portion of the Fund’s assets in early stage companies and small to mid-size companies with market capitalizations of less than $5 billion at the time of purchase.

A significant portion of the Fund’s assets typically will be invested in U.S. companies and in at least two other countries. Globally, the Fund may invest in companies in countries with established or emerging securities markets. While the risks of investing are greater in countries with emerging markets, this usually will not deter us if our research indicates a company has outstanding investment potential.

The Fund may participate in initial public offerings (IPOs).

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

risk of not hedging currencies is that if the U.S. dollar strengthens, returns from foreign markets will be less when converted into U.S. dollars.

Political and Economic Risk. Foreign investments may be subject to heightened political and economic risks, particularly in countries with emerging economies and securities markets.

Regulatory Risk. Foreign companies not publicly traded in the U.S. are not subject to accounting and financial reporting standards and requirements comparable to those U.S. companies must meet.

Transaction Costs. The costs of buying and selling foreign securities including brokerage, tax and custody costs are generally higher than those for domestic transactions.

Emerging Markets. Securities in emerging markets are particularly subject to the risks described above for foreign securities.

Small Companies may lack the financial resources, product diversification and competitive strengths of larger companies. The stocks of small companies may not trade as readily as the stocks of large companies and their share prices may fluctuate more widely.

Early Stage Companies may not be currently profitable. There is no guarantee they will become profitable or will be able to obtain necessary financing.

Technology Companies tend to be extremely competitive and rapid new developments could dramatically impact a company’s earnings growth potential. In addition, many of these companies are sensitive to global and domestic economic conditions and, for some companies, earnings growth may be tied to product cycles within their specific industries. If technology continues to advance at an accelerated rate and the number of companies and product offerings continues to expand, these companies could become increasingly sensitive to short product cycles and aggressive pricing.

Health Care Companies may be subject to government regulations. They may rely on government agencies for approval of products or services or on government programs for reimbursement. The rise of managed care has put pricing pressure on health care providers.

Science Companies may be affected by the same risks mentioned above for technology and health care companies.

Sector Weightings. Funds that invest a large percentage of assets in a few sectors are more vulnerable than funds that diversify among a broad range of sectors.

Initial Public Offerings involve risks not normally associated with offerings of more seasoned companies. Shares purchased in initial public offerings may involve higher transaction costs and may be difficult to sell at a time or price that is desirable.

Non-Diversification. 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.

The chart above is intended to provide you with an indication of the risks of investing in the Global Science & Technology Fund by showing changes in the Fund’s performance from year to year.

The table above is designed to help you evaluate your risk tolerance by showing the Fund’s best and worst quarterly performance for the years shown in the bar chart above.

The table above allows you to compare the Fund’s past performance to that of market indexes.

The Russell 2000 Technology Index is a capitalization-weighted index of companies in the Russell 2000 Index that serve the electronics and computer industries or that manufacture products based on the latest applied science.

The Nasdaq Composite Index is unmanaged and measures all Nasdaq domestic and non-U.S. based common stocks listed on The Nasdaq Stock Market. The Index is market-value weighted. This means each company’s security affects the Index in proportion to its market value. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Due to their number and size, technology stocks tend to dominate the direction of the Index.

The Lipper Science & Technology Index is a composite of mutual funds that invest in science and technology companies and have investment objectives similar to those of the Fund.

You cannot invest directly in these Indexes. The Indexes’ returns reflect no deductions for fees, expenses or taxes.

INVESTMENT OBJECTIVE

PRINCIPAL STRATEGIES

Invest in growing companies at reasonable prices.

Under normal market conditions, we will invest the Fund’s assets primarily in the equity securities of growing companies with market capitalizations between $3 billion and $20 billion at the time of purchase. These companies typically will be larger than the companies in which most of the other Equity Funds invest.

We use “bottom-up” fundamental analysis to identify individual companies that we believe have prospects for growth and/or dividend payment. We seek to purchase the stocks of these companies at reasonable prices.

We look for companies that have an experienced management team with a substantial stake in the company’s future.

The Fund may invest in technology and health care companies and may invest a large percentage of its assets in a few sectors.

The Fund may invest in high growth companies. We define high growth companies as those that are increasing earnings at a rate that is significantly faster than the average company.

Our analysis includes studying a company’s financial statements, making onsite visits and meeting with top management to evaluate such factors as potential for: increasing earnings steadily at a faster rate than that of an average large company, a sustainable competitive advantage, market leadership, high return on capital, and capitalizing on favorable long-term trends.

The Fund may also invest in securities issued by foreign companies.

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

Foreign Securities may be less liquid and their prices may be more volatile than domestic securities. There may be less government supervision and regulation of foreign stock

exchanges, brokers, custodians and listed companies than in the U.S.

Political and Economic Risk. Foreign investments may be subject to heightened political and economic risks, particu- larly in countries with emerging economies and securities markets.

Regulatory Risk. Foreign companies not publicly traded in the U.S. are not subject to accounting and financial reporting standards and requirements comparable to those U.S. companies must meet.

Transaction Costs. The costs of buying and selling foreign securities including brokerage, tax and custody costs are generally higher than those for domestic transactions.

Emerging Markets. Securities in emerging markets are particularly subject to the risks described above for foreign securities.

High Growth Companies and Growth Stocks typically trade at higher price-to-earnings ratios (P/Es) than other stocks. Their stock prices are more volatile because they tend to be more sensitive to changes in a company’s current or expected earnings growth.

Technology Companies tend to be extremely competitive and rapid new developments could dramatically impact a company’s earnings growth potential. In addition, many of these companies are sensitive to global and domestic economic conditions and, for some companies, earnings growth may be tied to product cycles within their specific industries. If technology continues to advance at an accelerated rate and the number of companies and product offerings continues to expand, these companies could become increasingly sensitive to short product cycles and aggressive pricing.

Sector Weightings. Funds that invest a large percentage of assets in a few sectors are more vulnerable than funds that diversify among a broad range of sectors.

Non-Diversification. 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.

The chart above is intended to provide you with an indication of the risks of investing in the Heritage Growth Fund by showing changes in the Fund’s performance from year to year.

The table above is designed to help you evaluate your risk tolerance by showing the Fund’s best and worst quarterly performance for the years shown in the bar chart above.

The table above allows you to compare the Fund’s performance to that of market indexes.

The Russell Midcap Growth Index measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in the Russell Midcap Growth Index are also members of the Russell 1000 Growth Index.

The Russell 1000 Growth Index measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.

You cannot invest directly in these Indexes. The Indexes’ returns reflect no deductions for fees, expenses or taxes.

INVESTMENT OBJECTIVE

Long-term growth of capital. The Fund’s investment objective can be changed without shareholder approval.

PRINCIPAL STRATEGIES

Invest in foreign growth companies.

Under normal market conditions, we will invest the Fund’s assets in securities issued by foreign companies in at least three different developed countries. Investments typically will be in companies with market capitalizations of less than $5 billion at the time of purchase.

We use a process of “bottom-up” fundamental analysis to identify individual companies that we believe have above average revenue and earnings growth potential. We may invest in early stage companies if we believe they have outstanding long-term growth potential.

Analysis includes studying a company’s financial statements and evaluating such factors as potential for: increasing earnings per share, gaining market share, expanding operating margins, a sustainable competitive advantage, and capitalizing on favorable long-term trends. We travel extensively outside of the U.S. to visit companies and expect to meet with their top management.

Although we expect to invest primarily in developed countries, the Fund may invest in emerging market countries.

We do not use allocation models to restrict the Fund’s investments to certain regions, countries or industries.

The Fund does not limit its investments to specific sectors although we typically find the growth we seek in companies in what we believe are the fastest growing sectors.

The Fund may invest in technology and health care companies.

The Fund may participate in initial public offerings (IPOs).

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

High Growth Companies and Growth Stocks typically trade at higher price-to-earnings ratios (P/Es). Their stock prices are more volatile because they tend to be more sensitive to changes in a company’s current or expected earnings growth.

Currency Risk. The U.S. dollar value of the Fund’s assets will be affected by foreign currency exchange rates and may be affected by exchange control regulations. While the Fund

has the ability to hedge against fluctuations in foreign currency exchange rates, it has no present intention to do so. A risk of not hedging currencies is that if the U.S. dollar strengthens, returns from foreign markets will be less when converted into U.S. dollars.

Political and Economic Risk. Foreign investments may be subject to heightened political and economic risks, particu- larly in countries with emerging economies and securities markets.

Regulatory Risk. Foreign companies not publicly traded in the U.S. are not subject to accounting and financial reporting standards and requirements comparable to those U.S. companies must meet.

Transaction Costs. The costs of buying and selling foreign securities including brokerage, tax and custody costs are generally higher than those for domestic transactions.

Emerging Markets. Securities in emerging markets are particularly subject to the risks described above for foreign securities.

Early Stage Companies may not be currently profitable. There is no guarantee they will become profitable or will be able to obtain necessary financing.

Sector Weightings. Funds that invest a large percentage of assets in a few sectors are more vulnerable than funds that diversify their investments among a broad range of sectors.

Initial Public Offerings (IPOs) involve risks not normally associated with the offerings of more seasoned companies. Shares purchased in initial public offerings may involve higher transaction costs and may be difficult to sell at a time or price that is desirable.

Non-Diversification. 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.

The chart above is intended to provide you with an indication of the risks of investing in the International Growth Fund by showing changes in the Fund’s performance from year to year.

The table above is designed to help you evaluate your risk tolerance by showing the Fund’s best and worst quarterly performance for the years shown in the bar chart above.

The table above allows you to compare the Fund’s past performance to that of a market index.

The MSCI World Ex-U.S.A. Small Cap Index is an unmanaged index that measures the performance of stocks with market capitalizations between U.S. $200 million and $1.5 billion across 22 developed markets, excluding the United States.

You cannot invest directly in the Index. The Index’s returns reflect no deductions for fees, expenses or taxes.

INVESTMENT OBJECTIVE

Long-term growth of capital. The Fund’s investment objective can be changed without shareholder approval.

PRINCIPAL STRATEGIES

Invest in foreign micro cap companies.

We use a process of “bottom-up” fundamental analysis to identify individual companies that we believe have above average revenue and earnings growth potential. In some cases, we may invest in early stage companies if we believe they have outstanding long-term growth potential.

Analysis includes studying a company’s financial statements and evaluating the company’s potential to: increase earnings per share, gain market share, expand operating margins, and sustain its competitive advantage.

Attributes we look for in foreign micro cap companies may include: track record of growth or growth potential driven by new services, products, technologies and brands; strong balance sheets; low levels of debt; ability to self-finance growth; experienced management teams with outstanding expertise in their industry or technology; high levels of management/founder ownership; high returns on capital; and growth characteristics underpinned by long term social, economic and technology trends.

We expect to travel extensively outside of the U.S. to visit companies and meet with their top management.

Although we expect to invest primarily in developed countries, the Fund may invest in emerging market countries.

We do not use allocation models to restrict the Fund’s investments to certain regions, countries or industries.

The Fund does not limit its investments to specific sectors although we typically expect to find the growth we seek in companies in what we believe are the fastest growing sectors.

The Fund may invest in technology and health care companies.

The Fund may also participate in initial public offerings (IPOs).

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

High Growth Companies and Growth Stocks typically trade at higher price-to-earnings ratios (P/Es). Their stock prices are more volatile because they tend to be more sensitive to changes in a company’s current or expected earnings growth.

Political and Economic Risk. Foreign investments may be subject to heightened political and economic risks, particu- larly in countries with emerging economies and securities markets.

Regulatory Risk. Foreign companies not publicly traded in the U.S. are not subject to accounting and financial reporting standards and requirements comparable to those U.S. companies must meet.

Transaction Costs. The costs of buying and selling foreign securities including brokerage, tax and custody costs are generally higher than those for domestic transactions.

Emerging Markets. Securities in emerging markets are particularly subject to the risks described above for foreign securities.

Micro Cap Companies may lack the financial resources, product diversification and competitive strengths of larger companies. The stocks of micro cap companies may not trade as readily as the stocks of larger companies and their share prices may fluctuate more widely.

Early Stage Companies may not be currently profitable. There is no guarantee they will become profitable or will be able to obtain necessary financing.

Sector Weightings. Funds that invest a large percentage of assets in a few sectors are more vulnerable than funds that diversify their investments among a broad range of sectors.

Health Care Companies may be subject to government regulations. They may rely on government agencies for approval of products or services or on government programs

for reimbursement. The rise of managed care has put pricing pressure on health care providers.

In addition, IPOs may have significant impact on the Fund’s total returns when its asset base is small.

Non-Diversification. 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.

The chart above is intended to provide you with an indication of the risks of investing in the International Opportunities Fund.

The table above is designed to help you evaluate your risk tolerance by showing the Fund’s best and worst quarterly performance for the year shown in the bar chart above.

The table above allows you to compare the Fund’s past performance to that of a market index.

After tax-returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

The MSCI World Ex-U.S.A. Small Cap Index is an unmanaged index that measures the performance of stocks with market capitalization between U.S. $200 million and $1.5 billion across 22 developed markets, excluding the United States.

You cannot invest directly in the Index. The Index’s returns reflect no deductions for fees, expenses or taxes.

INVESTMENT OBJECTIVE

PRINCIPAL STRATEGIES

Growth investing in very small companies.

Under normal market conditions, we will invest at least 80% of the Fund’s net assets in the equity securities of micro cap companies with market capitalizations of less than $1 billion at the time of purchase. Shareholders will be notified prior to any change in this policy.

We use “bottom-up” fundamental analysis to identify individual companies that we believe have superior growth prospects. Analysis includes studying a company’s financial statements, making onsite visits and meeting with top management to evaluate such factors as potential for: increasing earnings per share, gaining market share, expanding operating margins, a sustainable competitive advantage, and capitalizing on favorable long-term trends.

Within the Fund’s portfolio we seek to create a blend of “core” companies that we believe have the potential to grow steadily over long periods of time at faster rates than average large companies, and “high growth” companies that we believe have the potential to grow faster and more aggressively than core companies. To a lesser extent, the Fund may invest in early stage companies.

The Fund may invest in securities issued by foreign companies in developed countries. To a lesser extent, the Fund may invest in emerging market countries.

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

High Growth Companies and Growth Stocks typically trade at higher price-to-earnings ratios (P/Es). Their stock prices are more volatile because they tend to be more sensitive to changes in a company’s current or expected earnings growth.

Early Stage Companies may not be currently profitable. There is no guarantee they will become profitable or will be able to obtain necessary financing.

Political and Economic Risk. Foreign investments may be subject to heightened political and economic risks, particu- larly in countries with emerging economies and securities markets.

Regulatory Risk. Foreign companies not publicly traded in the U.S. are not subject to accounting and financial reporting standards and requirements comparable to those U.S. companies must meet.

Transaction Costs. The costs of buying and selling foreign securities including brokerage, tax and custody costs are generally higher than those for domestic transactions.

Emerging Markets. Securities in emerging markets are particularly subject to the risks described above for foreign securities.

Non-Diversification. 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.

WHO SHOULD INVEST

The Fund is best suited for long-term investors who can tolerate the greater risks and volatility that are inherent with investments in micro cap stocks. It is not appropriate for short-term investors or those trying to time the market.

HISTORICAL PERFORMANCE

The chart above is intended to provide you with an indication of the risks of investing in the Micro Cap Fund by showing changes in the Fund’s performance from year to year.

The table above is designed to help you evaluate your risk tolerance by showing the Fund’s best and worst quarterly performance for the years shown in the bar chart above.

The table above allows you to compare the Fund’s performance to that of a market index.

The Russell Microcap^™ Index is an unmanaged total index of the smallest 1,000 securities in the small-cap Russell 2000 Index plus the next 1,000 securities.

You cannot invest directly in these Indexes. The Indexes’ returns reflect no deductions for fees, expenses or taxes.

INVESTMENT OBJECTIVE

Long-term growth of capital. The Fund’s investment objective can be changed without shareholder approval.

PRINCIPAL STRATEGIES

Value investing in micro cap companies.

We use a “bottom-up” process of fundamental analysis to look for individual companies that we believe are temporarily undervalued but have significant potential for stock price appreciation.

Attributes we look for in micro cap value companies include competent top management with a substantial stake in the future of the company, the potential to improve earnings growth and new products or services that may increase revenue growth and market share.

The Fund may invest in technology and health care companies and may invest a large percentage of its assets in a few sectors. To a lesser extent, the Fund may invest in early stage companies.

The Fund may invest in securities issued by foreign companies in developed countries. To a lesser extent, the Fund may invest in emerging market countries.

To a lesser extent, the Fund may also invest in growth companies if the current valuation is at a sufficient discount to the projected five year earnings growth rate.

The Fund may participate in initial public offerings (IPOs).

PRINCIPAL RISKS

For more information, please see “Wasatch Equity Funds — Principal Risks” on page 41.

As with all mutual funds or investments, it is possible to lose money by investing in the Fund.

Management Risk is that the types of securities held by the Fund may underperform other types of securities and may not produce the intended result.

Market Risk means the prices of securities may decline significantly over short or extended periods of time.

Company Risk is that the prices of individual securities may decline due to company specific factors such as changes in profitability or investor perceptions.

Value Stocks can remain undervalued for years and may never reach what the Advisor believes is their full value, or they may even decline in value.

Technology Companies tend to be extremely competitive and rapid new developments could dramatically impact a

company’s earnings growth potential. In addition, many of these companies are sensitive to global and domestic economic conditions and, for some companies, earnings growth may be tied to product cycles within their specific industries. If technology continues to advance at an accelerated rate and the number of companies and product offerings continues to expand, these companies could become increasingly sensitive to short product cycles and aggressive pricing.