N-CSRS 1 d868272dncsrs.htm WASATCH FUNDS TRUST Wasatch Funds Trust
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-04920

 

 

WASATCH FUNDS TRUST

 

 

(Exact name of registrant as specified in charter)

505 Wakara Way, 3rd Floor

Salt Lake City, UT 84108

 

 

(Address of principal executive offices)(Zip code)

 

(Name and Address of Agent for Service)   Copy to:

Eric S. Bergeson

Wasatch Advisors, Inc.

505 Wakara Way, 3rd Floor

Salt Lake City, UT 84108

 

Eric F. Fess, Esq.

Chapman & Cutler LLP

111 West Monroe Street

Chicago, IL 60603

Registrant’s telephone number, including area code: (801) 533-0777

Date of fiscal year end: September 30

Date of reporting period: March 31, 2020


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Item 1.

Report to Shareholders.


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LOGO

WASATCHGLOBAL . COM MARCH 31, 2020 2020 Semi-Annual Report Fund Investor Institutional Name Class Class Wasatch Core Growth Fund WGROX WIGRX Wasatch Emerging India Fund WAINX WIINX Wasatch Emerging Markets Select Fund WAESX WIESX Wasatch Emerging Markets Small Cap Fund WAEMX WIEMX Wasatch Frontier Emerging Small Countries Fund WAFMX WIFMX Wasatch Global Opportunities Fund WAGOX WIGOX Wasatch Global Select Fund WAGSX WGGSX Wasatch Global Value Fund FMIEX WILCX Wasatch International Growth Fund WAIGX WIIGX Fund Investor Institutional Name Class Class Wasatch International Opportunities Fund WAIOX WIIOX Wasatch International Select Fund WAISX WGISX Wasatch Micro Cap Fund WMICX WGICX Wasatch Micro Cap Value Fund WAMVX WGMVX Wasatch Small Cap Growth Fund WAAEX WIAEX Wasatch Small Cap Value Fund WMCVX WICVX Wasatch Ultra Growth Fund WAMCX WGMCX Wasatch-Hoisington U.S. Treasury Fund WHOSX Beginning January 31, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of Wasatch Funds shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from Wasatch Funds or from your financial intermediary, (such as a broker-dealer or bank). Instead, reports will be made available on Wasatch Funds’ website wasatchglobal.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from Wasatch Funds electronically by contacting your financial intermediary (such as a broker-dealer or bank) or, for Fund shares held directly with Wasatch Funds, by calling 800.551.1700 or by enrolling in “eDelivery” by logging into your account at https://wasatchfunds.olaccess.com. You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue receiving paper copies of your shareholder reports. If you invest directly with Wasatch Funds, you can call 800.551.1700 to let the Funds know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Wasatch Funds held in your account if you invest through a financial intermediary or all Wasatch Funds held with the fund complex if you invest directly with Wasatch Funds.


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WASATCH FUNDS

Salt Lake City, Utah

wasatchglobal.com

800.551.1700

 

 

 


Table of Contents

 

TABLE OF CONTENTS  

 

 

 

Letter to Shareholders

     2  

Wasatch Core Growth Fund® Management Discussion

     4  

Portfolio Summary

     5  

Wasatch Emerging India Fund® Management Discussion

     6  

Portfolio Summary

     7  

Wasatch Emerging Markets Select Fund® Management Discussion

     8  

Portfolio Summary

     9  

Wasatch Emerging Markets Small Cap Fund® Management Discussion

     10  

Portfolio Summary

     11  

Wasatch Frontier Emerging Small Countries Fund® Management Discussion

     12  

Portfolio Summary

     13  

Wasatch Global Opportunities Fund® Management Discussion

     14  

Portfolio Summary

     15  

Wasatch Global Select Fund® Management Discussion

     16  

Portfolio Summary .

     17  

Wasatch Global Value Fund®  Management Discussion

     18  

Portfolio Summary

     19  

Wasatch International Growth Fund® Management Discussion

     20  

Portfolio Summary

     21  

Wasatch International Opportunities Fund® Management Discussion

     22  

Portfolio Summary

     23  

Wasatch International Select Fund® Management Discussion

     24  

Portfolio Summary

     25  

Wasatch Micro Cap Fund® Management Discussion

     26  

Portfolio Summary

     27  

Wasatch Micro Cap Value Fund® Management Discussion

     28  

Portfolio Summary

     29  

Wasatch Small Cap Growth Fund® Management Discussion

     30  

Portfolio Summary

     31  

Wasatch Small Cap Value Fund® Management Discussion

     32  

Portfolio Summary

     33  

Wasatch Ultra Growth Fund® Management Discussion

     34  

Portfolio Summary

     35  

Wasatch-Hoisington U.S. Treasury Fund® Management Discussion

     36  

Portfolio Summary

     37  

Management Discussions —  Definitions of Financial Terms and Index Descriptions and Disclosures

     38  

Operating Expenses

     40  

Schedule of Investments

     43  

Statements of Assets and Liabilities

     76  

Statements of Operations

     80  

Statements of Changes in Net Assets

     84  

Financial Highlights

     92  

Notes to Financial Highlights

     100  

Notes to Financial Statements

     102  

Supplemental Information

     123  

Management of the Trust

     123  

Additional Tax Information

     125  

Proxy Voting Policies, Procedures and Record

     125  

Quarterly Portfolio Holdings Disclosure on Form N-PORT

     125  

Board Considerations for Advisory and Sub-Advisory Agreements of the Wasatch Funds

     126  

Service Providers

     138  

Contact Wasatch

     138  

This material must be accompanied or preceded by a prospectus.

Please read the prospectus carefully before you invest.

Wasatch Funds are distributed by ALPS Distributors, Inc.

 

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LETTER TO SHAREHOLDERS — TRUSTING OUR INSTRUMENTS  

 

 

 

LOGO

 

JB Taylor CEO,

Portfolio Manager and Head of U.S. Small Cap Investing

 

LOGO

 

Ajay Krishnan, CFA

Portfolio Manager and Head of Emerging Markets Investing

  

DEAR FELLOW SHAREHOLDERS:

 

If you Google “trust your…,” some of the most-frequent entries you will see are “trust your gut,” “trust your instincts” and “trust your intuition.” While these are important considerations during the current health and economic crisis, we think they must be balanced with the equally important “trust your instruments” — a fundamental principle in the field of aviation.

A pilot initially learns to navigate using visual reference points on the ground. But at higher altitude, especially under stormy conditions, reference points outside the cockpit mostly disappear. For these circumstances, a pilot is taught to override the body’s physical senses — and instead pay close attention to the instrument display panel. In fact, a pilot flying when visibility is poor must rely almost exclusively on the display indicators.

In our investment process, we benefit from both subjective analysis and our version of “trusting our instruments.” As we steer through the current environment characterized by extreme stock-market volatility and a particularly uncertain future, the objectivity of our instruments has become increasingly valuable. Indeed, our instruments indicate that our funds are on course —  invested in what we believe are strong companies at appropriate position sizes.

A BATTLE OF EXPONENTIAL FORCES

For stocks, the quarter ended March 31, 2020 included one of the worst periods on record. Stocks of companies — large and small, around the world and across all sectors — fell in a synchronous fashion. What was staggering, beyond the magnitude of the declines, was the speed at which stocks fell. Nearly all equity indexes declined between -30% and -40% over the four-week period between February 20 and March 20.

For a pilot, this would be the equivalent of flying through sunny, cloudless skies in one moment and through a Category 5 hurricane in the next. With unthinkable speed, we dove from record employment numbers in the U.S. to a probable global recession. The sad reality of the attempt to limit the spread of the novel coronavirus is a massive coordinated global slowdown in human interaction and commerce, with most businesses in every sector taking punishment in the storm.

The unprecedented uncertainty is due to the coronavirus’s exponential infection rate among the world’s population. However, we remain hopeful based on global responses. Medical responses include the fast-track development of potential vaccines and antiviral drugs. Economic responses consist of unprecedented monetary and fiscal measures. To paraphrase New York Times columnist Thomas Friedman, we are in a battle of exponential forces. Globally, citizens are working to counter Covid-19’s negative exponential force with an overwhelmingly positive exponential force.

The current crisis is the equivalent of a massive slowdown in the global “income statement,” figuratively speaking, compared to the 2008-09 global financial crisis, which saw a sudden evaporation of the global “balance sheet” due to enormous levels of bad credit. A struggling income statement can recover, provided the balance sheet is strong. It’s encouraging that the monetary and fiscal measures enacted — cash payments for workers, accessible low-interest loans for small businesses and massive influxes of banking liquidity — seem properly focused on preventing the current “income statement” problem from becoming a larger “balance sheet” issue.

Once the crisis has abated, we expect that our funds will be well-positioned with investments in companies benefiting from the renewed economic upturn — and not only in the U.S. Other countries have been just as diligent, or even more so, with their own medical and economic responses to the virus. And because world-wide economies had been relatively strong before the outbreak, we believe our companies will pick up not too far from where they had left off — even if there are hiccups along the way.

THE WASATCH RESPONSE

Our response during a typical market correction is generally to hold steady. After all, if we liked our companies going into the selloff, we should still like them afterwards — especially at the resulting less-expensive prices.

Therefore, even though this has not been a typical market correction, we are making very few changes to our growth-oriented funds. We generally invest in companies that we consider high quality. We have found that during market downturns, investors tend to prefer high-quality names — even those considered somewhat expensive.

Many of Wasatch’s long-term, alpha-producing track records have been generated by outperforming in down markets, and true to form, our funds have generally outperformed in the current downturn. During the past few years, it has been especially gratifying to see our growth-oriented funds generate benchmark-beating returns on both the downside and the upside.

Looking forward, it’s impossible to predict short-term performance, especially under the current “anything-but-normal” conditions. But we think our funds are well-situated compared to their benchmarks. Generally speaking, our companies have long records of stronger sales and earnings growth, higher returns on capital, better cash flows and, importantly, much healthier balance sheets.

Sometimes the hardest thing to do in investing is to not do anything. Because we have navigated severe market volatility many times before, we know what tends to work and we understand the value of keeping our emotions in check. These experiences, in turn, have given us the courage to trust the research we have already done. The overwhelming majority of our investments are in companies that we believe are built to withstand harsh economic shocks.

 

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  MARCH 31, 2020 (UNAUDITED)

 

 

 

To be prepared for scenarios in which the current crisis becomes longer and deeper than we expect, the Wasatch research team has re-analyzed and stress-tested every company we own for balance-sheet strength and the ability to endure relatively long-term hits to sales and earnings. We have adjusted weightings in companies for which we see increased or decreased potential, and we have sold a few names where our outlook for their long-term growth prospects has changed (which may not necessarily be due to recent events). As always, we continue to assess new opportunities — especially since many companies on our wish lists have fallen to once-in-a-decade valuations.

It’s important to emphasize that market cycles consist of two phases. One phase is the downturn, during which Wasatch has performed admirably in the current cycle. The other is the ensuing recovery, the start of which can only be determined in hindsight.

Because the stocks that hold up better during a significant downturn are sometimes the same ones that performed relatively well before the downturn, portfolio adjustments may not be necessary. But a recovery rally off the market bottom can be trickier to navigate. That’s not to say a static portfolio will necessarily perform poorly during a recovery rally. It’s just that moderate alterations to the portfolio can often improve performance.

For example, our historical research and firsthand insights — which are our versions of “flight-control instruments” — indicate that some of our biggest decliners during the downturn may also be some of our largest winners during the recovery. So, rather than selling these positions based on what might look like deteriorating fundamentals, we may prudently add to current weights at lower prices.

The idea is that, unlike run-of-the-mill market corrections, crisis-induced precipitous declines often warrant increasing weights in what seem like “higher-risk” holdings. To be prepared, we have re-analyzed all our fund holdings and watch-list names. This continues to give us the conviction to increase position sizes and make incremental investments in companies whose stocks get punished particularly unfairly in our view.

MAINTAINING OUR LONG-TERM PERSPECTIVE

We think patience is our most-important asset. We remain steadfast in our bottom-up research process. Above all, we are long-term investors focused on paying reasonable prices for high-quality companies. We think quality is especially important during a crisis because exceptional companies often increase their competitive advantages in times of stress, even when short-term sales and earnings decline on an absolute basis. After the crisis, these companies are particularly well-positioned to grow and take even more market share over the long term.

In closing, we would like to note that we as a firm believe it’s important to support public-health officials in containing Covid-19. As such, Wasatch has temporarily halted business travel. And members of our team have redoubled their efforts to minimize the impact on our operations.

For example, many of our scheduled in-person research meetings have been converted into technology-enabled “virtual visits.” Moreover, we have been impressed that the companies we own and those that we are considering for investment have been universally accommodative, so we have been able to get the information we need to do our jobs with remarkably few impediments.

Finally, out of an abundance of caution for the safety of our staff and the broader community, most of our employees are working from home. Please note that all business functions are fully operational and all lines of communication with Wasatch remain open.

With sincere thanks for your continuing investment and for your trust,

 

LOGO

 

 

LOGO

JB Taylor

 

Ajay Krishnan

Information in this report regarding market or economic trends, or the factors influencing historical or future performance, reflects the opinions of management as of the date of this report. These statements should not be relied upon for any other purpose. Past performance is no guarantee of future results, and there is no guarantee that the market forecasts discussed will be realized.

CFA® is a trademark owned by the CFA Institute.

Wasatch Global Investors is the investment advisor to Wasatch Funds.

Wasatch Funds are distributed by ALPS Distributors, Inc. (ADI). ADI is not affiliated with Wasatch Global Investors.

Definitions of financial terms and index descriptions and disclosures begin on page 38.

 

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WASATCH CORE GROWTH FUND (WGROX / WIGRX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Core Growth Fund is managed by a team of Wasatch portfolio managers led by JB Taylor, Paul Lambert and Mike Valentine.

 

LOGO

 

JB Taylor

Lead Portfolio Manager

 

LOGO

 

Paul Lambert Portfolio Manager

 

LOGO

 

Mike Valentine

Portfolio Manager

OVERVIEW

Equity prices of small growth companies see-sawed from gains to coronavirus-induced losses before partially rebounding near the end of the quarter ended March 31, 2020. Small-company stocks generally declined more than large-company names, and the benchmark Russell 2000 Index dropped -30.61% for the quarter. Meanwhile, the Russell 2000 Growth Index lost -25.76%. Declining less than these indexes, the Wasatch Core Growth Fund — Investor Class fell -23.93%.

Given the magnitude of Covid-19 repercussions, pundits have drawn comparisons to the 2008-09 global financial crisis (GFC). For our part, we see a distinction in that the current crisis is the equivalent of a massive slowdown in the global “income statement,” whereas the GFC entailed a sudden evaporation of the global “balance sheet” due to enormous levels of bad credit. A struggling income statement can recover, provided the balance sheet is strong. It’s encouraging that the monetary and fiscal measures enacted seem properly focused on preventing the current “income statement” problem from becoming a larger “balance sheet” issue.

DETAILS OF THE QUARTER

By sector, stock picking in consumer discretionary, information technology and real estate aided the Fund’s performance relative to its Russell 2000 benchmark. We also benefited from not having exposure to energy, by far the weakest area of the market. The industrials sector subtracted the most from the Fund’s return. Our industrial companies held up better than their Index peers, but our overweight position detracted from performance relative to the benchmark.

The top contributor to Fund performance was Five9, Inc., a provider of contact-center software that’s managed and hosted from the cloud. The company offers real-time and historical reporting, quality monitoring, and workforce and customer-relationship-management integrations. The superiority of cloud-based software has become especially evident during the pandemic. On a longer-term basis, Five9 has competitive advantages that make it the dominant growth company in its industry.

Another contributor was DocuSign, Inc. The company’s e-signature software enables businesses to digitally prepare and execute agreements. DocuSign has been experiencing rapid sales gains and improved growth prospects. With the pandemic scattering corporate operations to home offices

and curtailing travel, DocuSign is positioned to benefit as more companies sign contracts over the internet.

The largest detractor from performance was Euronet Worldwide, Inc., a provider of electronic solutions for financial transactions in the U.S., Europe and Asia. Euronet’s offerings include financial-payment middleware, financial-network gateways, outsourcing and consulting. The stock fell due to the anticipated drop-off in financial transactions amid a global economic slowdown. Over the long term, we think Euronet is well-positioned for double-digit annual sales growth and meaningfully improved earnings.

An additional detractor was Monro, Inc., which operates a chain of shops for automotive repairs and tires. These shops provide a broad range of services and parts related to brakes, mufflers, exhaust systems, steering mechanisms, drive trains, suspensions, wheel alignments and routine maintenance. At the current stock price, we like Monro based on our expectations that the company will increase revenues, margins and free cash flows.

OUTLOOK

Wasatch’s core expertise is the fundamental analysis of individual companies. In this regard, we liked our portfolio companies going into the selloff and we still like them now.

Compared to the benchmark, our companies generally have long records of stronger sales and earnings growth, higher returns on capital, better cash flows and, importantly, much healthier balance sheets. The Wasatch research team spent several weeks re-analyzing every company we own and scanning for new opportunities. We’ve adjusted company weightings where we see increased potential or weakness, and we’ve sold a handful of names for which we viewed upside potential as inadequate.

Having outpaced our benchmark during the initial phases of the Covid-19 turmoil, we’re acutely aware that the race is never over. In market panics, extreme risk aversion can cause investors to unfairly punish the stocks of companies whose long-term businesses remain strong — but whose near-term prospects are much less certain, or perhaps even quite poor. Such panics sometimes do not burn themselves out until high-quality stocks with some perceived risk are beaten down to the point that they may actually be the least-risky names. To the extent that we believe risk has become mispriced, we’ll continue to seek opportunities to selectively take it on.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

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WASATCH CORE GROWTH FUND (WGROX / WIGRX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

      SIX MONTHS*      1 YEAR      5 YEARS      10 YEARS

Core Growth (WGROX) — Investor

       -17.26%          -12.13%          5.40%          11.12%

Core Growth (WIGRX) — Institutional

       -17.22%          -12.02%          5.53%          11.22%

Russell 2000® Index

       -23.72%          -23.99%          -0.25%          6.90%

Russell 2000® Growth Index

       -17.31%          -18.58%          1.70%          8.89%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Core Growth Fund are Investor Class: 1.19% / Institutional Class — Gross: 1.09%, Net: 1.05%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 1/31/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

 

*Not

annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

Trex Co., Inc.

    3.5%  

Tyler Technologies, Inc.

    3.4%  

ICON plc (Ireland)

    3.4%  

Pool Corp.

    3.3%  

Proofpoint, Inc.

    2.9%  
Company   % of Net
Assets
 

Five9, Inc.

    2.8%  

Balchem Corp.

    2.8%  

Monolithic Power Systems, Inc.

    2.7%  

RBC Bearings, Inc.

    2.7%  

Euronet Worldwide, Inc.

    2.6%  
 

 

**

As of March 31, 2020, there were 53 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

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WASATCH EMERGING INDIA FUND (WAINX / WIINX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Emerging India Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan and Matthew Dreith.

 

LOGO

 

Ajay Krishnan, CFA

Lead Portfolio Manager

  

LOGO

 

Matthew Dreith, CFA

Portfolio Manager

 

OVERVIEW

 

Stocks in India posted steep losses during the quarter ended March 31, 2020 as the nation went into a lockdown to halt the spread of Covid-19.

The Wasatch Emerging India Fund — Investor Class slipped -28.12% for the quarter. The Fund declined less than its benchmark, the MSCI India Investable Market Index (IMI), which fell -31.79%.

Although the spread of Covid-19 in India appeared to be slow, Prime Minister Narendra Modi announced a three-week lockdown designed to replicate China’s success in containing the outbreak. To cushion the impact on the nation and the economy, the national government announced $22.6 billion in spending aimed primarily at the poor. In addition, state governments implemented relief programs of their own. India’s central bank slashed interest rates and pledged to inject up to $50 billion of cash into the country’s financial system.

DETAILS OF THE QUARTER

The coronavirus lockdown is likely to hinder the ability of households and businesses to repay debt, which added to the woes of Indian financial stocks during the quarter. Our financials declined less than the financials in the Index, providing a source of strength for the Fund relative to its benchmark. The Fund’s largest sources of outperformance were materials and health care, respectively. In these sectors as well, the Fund’s holdings held up substantially better than the corresponding positions in the benchmark.

During a quarter in which defensive investments tended to perform better, our underweight position in consumer staples was a headwind for the Fund. The consumer-staples sector was the best-performing sector of the Index and one of the few areas in which the Fund’s holdings posted steeper declines than the benchmark’s positions.

The Fund’s position in Divi’s Laboratories Ltd. held up well during the quarter. The company produces active pharmaceutical ingredients and intermediates. Divi’s has benefited as international manufacturers of pharmaceuticals shift supply chains out of China or seek secondary sources of supply.

Trent Ltd. is a relatively new position in the Fund. The company operates a chain of retail stores that sell fashion apparel, cosmetics, perfumes and toiletries. We think Trent has the potential to become the “Zara of India.” (Zara, based in Spain, is an apparel retailer that specializes in fast fashion and is one of the largest international retail companies.) We expect Trent to be a strong beneficiary of the formalization of India’s retail landscape, where close to 90% of the industry is dominated by small informal retailers.

Financial companies accounted for many of the Fund’s greatest detractors for the quarter. Among these were Bajaj Finance Ltd., AU Small Finance Bank Ltd. and Aavas Financiers Ltd. Bajaj is a non-bank financial company (NBFC) offering a broad spectrum of lending services. AU is a small finance bank that primarily targets unbanked and underbanked low- and middle-income individuals and small businesses. Aavas is an NBFC specializing in housing loans to low- and middle-income customers in semi-urban and rural areas of India.

After having spoken with the management teams of all three of these companies and making our own analyses based on potential worst-case outcomes, we believe they have ample capital buffers and we expect them to emerge from the Covid-19 crisis even stronger. We have used the sharp declines in their share prices to add selectively to our positions.

OUTLOOK

When the pandemic subsides, India will set about resuming the political and economic progress that has brought steady improvement to the lives of its people since long before the arrival of the coronavirus. Our optimism is based in part on a confluence of factors that have been driving a virtuous circle of progress.

The first such factor is the market-friendly reforms that have been enacted in India. Although the current government tends to receive most of the credit for these reforms, some were in the works before the Modi coalition came into power. Second is India’s young and growing population. Because India is home to one of the youngest populations in the world, a large cohort of Indians will be reaching their peak-productivity, peak-consumption years at roughly the same time. The third key factor is having the world’s lowest prices for mobile-telecommunications data, which have enabled the large-scale digitalization of banking and commerce in India.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

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WASATCH EMERGING INDIA FUND (WAINX / WIINX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

      SIX MONTHS*    1 YEAR    5 YEARS   

SINCE INCEPTION

4/26/11

Emerging India (WAINX) — Investor

       -23.99%        -22.35%        3.16%        7.07%

Emerging India (WIINX) — Institutional

       -23.82%        -22.19%        3.34%        7.17%

MSCI India IMI

       -28.20%        -32.64%        -3.91%        -1.72%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging India Fund are Investor Class: 1.68% / Institutional Class: 1.49%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as unstable currencies, highly volatile securities markets and political and social instability, which are described in more detail in the prospectus.

 

*Not

annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Divi’s Laboratories Ltd. (India)     6.5%  
Dr. Lal PathLabs Ltd. (India)     6.1%  
Bajaj Finance Ltd. (India)     6.1%  
Pidilite Industries Ltd. (India)     5.9%  
ICICI Lombard General Insurance Co. Ltd. (India)     5.9%  
Company   % of Net
Assets
 
Berger Paints India Ltd. (India)     5.0%  
Britannia Industries Ltd. (India)     5.0%  
HDFC Bank Ltd. (India)     4.9%  
AU Small Finance Bank Ltd. (India)     4.8%  
Mindtree Ltd. (India)     4.7%  
 

 

**

As of March 31, 2020, there were 32 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

††Inception: April 26, 2011. Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

7


Table of Contents

 

WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Emerging Markets Select Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan, Scott Thomas and Matthew Dreith.

 

LOGO

 

Ajay Krishnan, CFA

Lead Portfolio Manager

 

LOGO

 

Scott Thomas, CFA Associate Portfolio
Manager

 

LOGO

 

Matthew Dreith, CFA

Associate Portfolio
Manager

OVERVIEW

Worries tied to the coronavirus pandemic sent stock prices in emerging markets sharply lower during the quarter ended March 31, 2020. The Wasatch Emerging Markets Select Fund — Investor Class lost -23.42% compared to a decline of -23.60% for its benchmark, the MSCI Emerging Markets Index. Growing fears about the impact of Covid-19 on global demand, supply chains, corporate profits and economic growth jolted financial markets around the world.

In the wake of this crisis, the Wasatch international team spent several weeks re-analyzing every company we own and scanning our investment universe for new opportunities. As expected, our analysis showed that the Fund’s companies have stronger earnings growth, higher returns on equity and returns on assets, and less debt than the average company in the benchmark. We adjusted company weightings where we saw an improvement in the risk/reward potential and sold a few holdings for which we viewed upside potential as inadequate.

DETAILS OF THE QUARTER

Taiwan and Brazil were the Fund’s largest sources of outperformance relative to the benchmark. Taiwan was one of the top-performing emerging markets during the quarter. Its early response and effective containment measures have resulted in fewer cases of Covid-19 compared to most neighboring countries. Brazil was the worst performer in the Index amid mounting concerns about the government’s handling of the crisis and growing tensions between the president and the Congress.

India was the greatest source of weakness against the benchmark. Although the Indian stocks in the Fund fared only slightly worse than those in the benchmark, our overweight position in India was a headwind to performance.

The strongest contributor to Fund performance was Microport Scientific Corp. Based in Shanghai, China, the company manufactures interventional and minimally invasive devices for keyhole surgery. Reports that a well-respected, Asia-focused private-equity firm had acquired an ownership stake sent Microport’s stock price soaring in late February.

Taiwanese holdings Silergy Corp. and ASPEED Technology, Inc. were the second- and third-largest contributors, respectively. Silergy manufactures high-performance mixed-signal and analog integrated circuits used in a wide array of

electronic devices. The company reported strong revenues, which helped alleviate concerns that weak demand from China might lead to a protracted slowdown in Silergy’s growth. ASPEED is a fabless designer of integrated circuits specializing in areas that include server management and audio-visual extensions. The company has been benefiting as firms globally add capacity to their data centers to accommodate citizens waiting out the coronavirus under home confinement.

Two Indian financial companies — Bajaj Finance Ltd. and HDFC Bank Ltd. — were the largest and second-largest detractors, respectively. Bajaj is a non-bank financial company offering lending services that include vehicle loans, mortgage loans, consumer loans and commercial loans. HDFC is one of India’s leading private-sector banks. The share prices of both companies tumbled on fears that India’s three-week coronavirus lockdown may trigger a wave of loan defaults. While these concerns appear justified, we believe the stocks of Bajaj and HDFC have been unfairly punished, and we don’t think the long-term franchise of either company has been impaired.

Grupo Aeroportuario del Pacifico S.A.B. de C.V. was also a significant detractor. The company operates international airports in Mexico under contracts with the government. The stock fell sharply on concerns that coronavirus-related declines in airport traffic would significantly reduce the amount of tariff revenue the company collects.

OUTLOOK

While the new coronavirus will likely have broad, short- to medium-term earnings impacts on many businesses — particularly those connected to global supply chains — we don’t currently expect major impairments to the long-term competitive positions of the companies we own. We continue to assess the ability of our companies to weather a severe, prolonged downturn. Because our investment approach already emphasizes high-quality companies with little or no debt and strong cash flows, the results thus far have been favorable.

Moreover, our outreach to company management teams has indicated few changes to their secular outlooks for operations and capital investments. Although we have been forced to temporarily suspend international travel, the Wasatch team maintains an extensive network of contacts throughout the world. We feel confident that disruptions stemming from the pandemic won’t fundamentally threaten the long-term revenue and earnings power of companies owned in the Fund.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

8


Table of Contents

 

WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*    1 YEAR    5 YEARS   

SINCE INCEPTION

12/13/12

Emerging Markets Select (WAESX) — Investor

      -15.37%        -13.38%        -1.13%        -0.53%

Emerging Markets Select (WIESX) — Institutional

      -15.26%        -13.16%        -0.88%        -0.22%

MSCI Emerging Markets Index

      -14.55%        -17.69%        -0.37%        -0.42%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Select Fund are Investor Class — Gross: 1.97%, Net: 1.51% / Institutional Class — Gross: 1.43%, Net: 1.21%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

Silergy Corp. (Taiwan)

    6.9%  

MercadoLibre, Inc.

    5.6%  

Bajaj Finance Ltd. (India)

    4.5%  

Raia Drogasil S.A. (Brazil)

    4.2%  

Globant S.A. (Argentina)

    3.9%  

HDFC Bank Ltd. (India)

    3.7%  
Company   % of Net
Assets
 

ICICI Lombard General Insurance Co. Ltd. (India)

    3.6%  

Vitasoy International Holdings Ltd. (Hong Kong)

    3.6%  

Voltronic Power Technology Corp. (Taiwan)

    3.4%  

Tencent Holdings Ltd. (China)

    3.3%  
 

 

**

As of March 31, 2020, there were 39 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Inception: December 13, 2012. Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

9


Table of Contents

 

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Emerging Markets Small Cap Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan, Dan Chace, Scott Thomas and Kevin Unger.

 

LOGO

 

Ajay Krishnan, CFA

Lead Portfolio Manager

 

LOGO

 

Scott Thomas, CFA

Associate Portfolio Manager

  

LOGO

 

Dan Chace, CFA

Portfolio Manager

 

LOGO

 

Kevin Unger, CFA

Associate Portfolio Manager

  

OVERVIEW

 

Growing fears about the impact of the coronavirus pandemic on global demand, supply chains, corporate profits and economic growth jolted financial markets and sent emerging-market stock prices plunging during the quarter ended March 31, 2020. The Wasatch Emerging Markets Small Cap Fund  — Investor Class

fell -23.74%, while the benchmark MSCI Emerging Markets Small Cap Index lost -31.37%.

In most countries, our stocks held up better than those in the Index. On average, our companies have stronger earnings growth, higher returns on equity and returns on assets, and less debt than the average benchmark company. The Wasatch international team spent several weeks re-analyzing every company we own and scanning for new opportunities. We adjusted company weightings where we saw an improvement in the risk/reward potential and sold a few holdings for which we viewed upside potential as inadequate.

DETAILS OF THE QUARTER

Brazil and Taiwan were the Fund’s largest sources of outperformance relative to the benchmark. Taiwan was a top-performing emerging market during the quarter. Its early response and effective containment measures have resulted in fewer cases of Covid-19 compared to most neighboring countries. Brazil was one of the Index’s worst performers amid concerns about the government’s handling of the crisis and tensions between the president and the Congress.

Falling oil prices and coronavirus worries weighed on Mexican equities during the quarter. The Fund’s Mexican stocks declined more than their Index counterparts, and our overweight position in Mexico was a headwind to performance.

The strongest contributor to Fund performance for the quarter was Microport Scientific Corp. Based in Shanghai, China, the company manufactures interventional and minimally invasive devices for keyhole surgery. Reports that a well-respected, Asia-focused private-equity firm had acquired an ownership stake sent Microport’s stock price soaring in late February. We trimmed the Fund’s position to maintain its desired weight.

Taiwanese holdings Silergy Corp. and ASPEED Technology, Inc. were the second- and third-largest contributors, respectively.

Silergy manufactures high-performance mixed-signal and analog integrated circuits used in electronic devices. The company reported strong revenues, which helped alleviate concerns that weak demand from China might lead to a protracted slowdown in Silergy’s growth. ASPEED is a fabless designer of integrated circuits specializing in areas that include server management and audio-visual extensions. The company has been benefiting as firms globally add capacity to their data centers to accommodate citizens waiting out the coronavirus under home confinement.

Two Indian financial companies — Bajaj Finance Ltd. and AU Small Finance Bank Ltd. — were the Fund’s largest and second-largest detractors, respectively. Bajaj, a non-bank financial company, offers lending services that include vehicle loans, mortgage loans, consumer loans and commercial loans. AU primarily targets unbanked and underbanked low- and middle-income individuals and small businesses. Both companies’ share prices tumbled on fears that India’s three-week coronavirus lockdown may trigger a wave of loan defaults. While these concerns appear justified, we believe the stocks of Bajaj and AU have been unfairly punished. In our analysis, both lenders are well-capitalized, and their long-term franchises are not impaired.

Grupo Aeroportuario del Centro Norte S.A.B. de C.V. was the third-largest detractor. The company operates international airports in the northern and central regions of Mexico. Its stock price fell sharply on concerns that coronavirus-related declines in airport traffic would significantly reduce tariff revenue.

OUTLOOK

While Covid-19 will likely have broad, short- to medium-term earnings impacts on many businesses — particularly those connected to global supply chains — we don’t currently expect major impairments to the long-term competitive positions of the Fund’s companies. The Wasatch international team continues to stress-test our companies to assess their ability to weather a severe, prolonged downturn. Because we already emphasize high-quality companies with little or no debt and strong cash flows, the results thus far have been favorable.

Moreover, our outreach to company management teams has indicated few changes to their secular outlooks for operations and capital investments. Although we have been forced to temporarily suspend international travel, the Wasatch team maintains an extensive network of contacts throughout the world. We feel confident that disruptions stemming from the pandemic won’t fundamentally threaten the long-term revenue and earnings power of companies owned in the Fund.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

10


Table of Contents

 

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX)    MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*    1 YEAR    5 YEARS    10 YEARS

Emerging Markets Small Cap (WAEMX) — Investor

      -14.97%        -11.97%        -1.10%        2.90%

Emerging Markets Small Cap (WIEMX) — Institutional

      -14.53%        -11.87%        -0.93%        2.99%

MSCI Emerging Markets Small Cap Index

      -24.83%        -28.98%        -5.17%        -1.34%

MSCI Emerging Markets Index

      -14.55%        -17.69%        -0.37%        0.68%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Small Cap Fund are Investor Class — Gross: 1.99%, Net: 1.97% / Institutional Class —  Gross: 1.85%, Net: 1.82%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

Silergy Corp. (Taiwan)

    5.6%  

Voltronic Power Technology Corp. (Taiwan)

    4.8%  

Raia Drogasil S.A. (Brazil)

    3.9%  

Berger Paints India Ltd. (India)

    3.5%  

Magazine Luiza S.A. (Brazil)

    3.4%  

Globant S.A. (Argentina)

    3.3%  
Company   % of Net
Assets
 

Dr. Lal PathLabs Ltd. (India)

    3.3%  

ICICI Lombard General Insurance Co. Ltd. (India)

    3.3%  

ASPEED Technology, Inc. (Taiwan)

    3.1%  

Vitasoy International Holdings Ltd. (Hong Kong)

    2.9%  
 

 

**

As of March 31, 2020, there were 51 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

11


Table of Contents

 

WASATCH FRONTIER EMERGING SMALL COUNTRIES  FUND (WAFMX / WIFMX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Frontier Emerging Small Countries Fund is managed by a team of Wasatch portfolio managers led by Scott Thomas.

 

LOGO

 

Scott Thomas, CFA

Lead Portfolio Manager

  

OVERVIEW

 

The Wasatch Frontier Emerging Small Countries Fund — Investor Class finished the quarter ended March 31, 2020 down -31.23%, slightly outperforming its primary benchmark, the MSCI Frontier Emerging Markets Index, which finished the period down -31.56%.

During the quarter, market panic sur-

rounding the Covid-19 pandemic took a dramatic toll on global equity markets. Global governments and central banks have taken swift and unprecedented action. Broadly speaking, the overarching theme has been one of unpredictability as the rapid pace of breaking developments has led to historic market volatility, with drawdowns one day followed by historic rallies the next.

DETAILS OF THE QUARTER

Although currency effects were significant headwinds during the quarter, beneficial stock selection in a number of countries, including Colombia, Peru, Egypt, the Philippines and Argentina, was enough to drive the Fund’s outperformance of its benchmark.

The impact of the coronavirus was broad and spared few markets or companies. Still, some companies weathered the storm relatively well. Among them were Fund holdings TQM Corp. and Delta Brac Housing Finance Corp. We think both companies have bright futures.

TQM is the leading insurance broker in Thailand. We believe the pandemic will have limited impact on TQM’s business. Our research has shown that the company has a pristine balance sheet with ample cash and no debt. We expect TQM to be able to continue gaining market share. Management just set an ambitious insurance-premium target of 50 billion Thai baht by 2026. That’s a compound annual growth rate of more than 21% from 2019.

Our sole holding at the moment in Bangladesh is Delta Brac Housing Finance. We see the company as having a major growth runway, as the penetration of mortgages in Bangladesh is among the lowest in the world. With strong backing from key institutional shareholders, Delta has consistently produced returns on equity of more than 20%. We expect the company to continue to compound earnings as demand for housing remains a long-term constant.

On a country basis, Mexico was the largest detractor from Fund performance versus the Index. Mexico is likely to face numerous challenges stemming from the pandemic. Some estimates project that the Mexican economy could contract by as much as 8%, at least in part due to the impact on the country’s tourism industry and decreased demand for Mexican exports. However, we believe Mexico may also benefit over the longer term, insofar as the crisis motivates organizations to look beyond China as a sole-source manufacturing provider.

The Fund’s largest detractor for the quarter was Qualitas Controladoras S.A.B. de C.V., a Mexican insurance company specializing in automotive insurance and related financial products. In our view, the decline in the company’s share price over the past three months provides a good example of the indiscriminate selling that has been commonplace during this market crisis. Judging from our analysis, Qualitas looks to be capable of weathering the current storm.

Colombia also suffered disproportionally and was one of the worst-performing frontier markets for the three-month period. This was driven in part by the steep decline in oil prices given the importance of oil to the Colombian government’s budget and the economy. Banco Davivienda S.A. detracted from Fund performance for the quarter. The bank, domiciled in Colombia, provides banking services to individuals, families, small and medium-size enterprises and builders. Banco Davivienda is one of the largest lenders in Colombia. We think recent stock-price weakness presents an interesting buying opportunity, as the bank boasts a strong balance sheet and has little direct exposure to oil.

OUTLOOK

Without mincing words: we believe Wasatch is in good shape, as a firm. And we believe the Frontier Emerging Small Countries Fund is similarly well-positioned. As we assess frontier markets and emerging small countries, one thing is clear: We liked our companies going into the selloff, and we still like them now — especially at the current, less-expensive prices. We have conducted in-depth analyses of how our investments are positioned and feel confident that the majority of the Fund’s portfolio companies have much stronger balance sheets, generate stronger earnings growth and have higher returns on equity than the companies represented in the benchmark.

In many of our recent calls, our companies’ management teams have generally been optimistic, seeing the prospect for growth on the other side of the crisis. We believe these companies are well-run and better poised to weather this environment than lower-quality competitors, who are less likely to have the organizational means to maintain operations and serve customers in this challenging time.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

12


Table of Contents

 

WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND (WAFMX / WIFMX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*   1 YEAR   5 YEARS  

SINCE INCEPTION

1/31/12

Frontier Emerging Small Countries (WAFMX) — Investor

      -24.45%       -20.69%       -6.87%       0.73%

Frontier Emerging Small Countries (WIFMX) — Institutional

      -24.28%       -20.53%       -6.69%       0.84%

MSCI Frontier Emerging Markets Index

      -26.95%       -28.65%       -5.76%       -0.81%

MSCI Frontier Markets Index

      -21.73%       -18.96%       -2.85%       2.52%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Frontier Emerging Small Countries Fund are Investor Class — Gross: 2.30%, Net: 2.20% / Institutional Class —  Gross: 2.15%, Net: 2.00%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

MercadoLibre, Inc.

    6.6%  

Cleopatra Hospital (Egypt)

    5.8%  

Raia Drogasil S.A. (Brazil)

    5.6%  

Philippine Seven Corp. (Philippines)

    5.5%  

Safaricom plc (Kenya)

    4.9%  
Company   % of Net
Assets
 

Qualitas Controladora S.A.B. de C.V. (Mexico)

    4.5%  

Globant S.A. (Argentina)

    4.3%  

Naspers Ltd., Class N (South Africa)

    3.9%  

Commercial International Bank S.A.E. (Egypt)

    3.9%  

FPT Corp. (Vietnam)

    3.7%  
 

 

**

As of March 31, 2020, there were 38 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

‡Inception: January 31, 2012. Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

13


Table of Contents

 

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Global Opportunities Fund is managed by a team of Wasatch portfolio managers led by JB Taylor, Ajay Krishnan, Ken Applegate and Paul Lambert.

 

LOGO

 

JB Taylor

Lead Portfolio Manager

 

LOGO

 

Ken Applegate, CFA

Portfolio Manager

  

LOGO

 

Ajay Krishnan, CFA

Lead Portfolio Manager

 

LOGO

 

Paul Lambert

Portfolio Manager

  

OVERVIEW

 

The Wasatch Global Opportunities Fund — 
Investor Class finished the quarter ended March 31, 2020 down -25.43% and outperformed the benchmark MSCI AC (All Country) World Small Cap Index, which finished the period down -30.19%.

The quarter began on a positive note amid

optimism that the trade conflict between the U.S. and China was finally nearing an end. News of a phase-one agreement, signed on January 15, raised hopes for a period of improving relations between the world’s two largest economies. By mid-February, large-cap U.S. stock indexes had pushed to all-time highs, with small caps not far behind. The joy was short-lived, however, as the outbreak of the novel-coronavirus disease in China began spreading to other countries.

Investor concerns about the potential impact of Covid-19 on economic growth and corporate earnings led to a precipitous drop in global markets. Financial markets rallied near the end of the quarter after the Federal Reserve embarked on an open-ended program of quantitative easing and the U.S. government enacted relief legislation of unprecedented scale.

DETAILS OF THE QUARTER

Stock selection, particularly in the U.S., Japan, Australia and Taiwan, drove the Fund’s outperformance of the benchmark.

One of the areas that we think might bounce back quickly and for which we see a favorable tailwind is the information-technology (IT) sector, which was already overweight, comprising over 30% of the Fund versus less than 14% for the benchmark.

In keeping with our long-held optimism for the IT space, Five9, Inc. was the largest individual contributor to Fund performance during the quarter. The company is a cloud software provider for contact centers around the world. Five9’s products include a virtual contact center that acts as a hub for engagement between clients and customers. As industries have necessarily shifted toward remote-work arrangements, call centers, many of which run on Five9’s software, have become even more integral to the operations of many organizations. We believe the company’s long-term growth prospects remain strong.

ASPEED Technology, Inc. and Silergy Corp. were two other IT companies that contributed to the Fund’s return during

the quarter. ASPEED produces processors intended for server-management applications. Silergy manufactures integrated circuits for power management. Both companies are based in Taiwan. As the pandemic highlights the business risks inherent in sourcing supply from a single country, an increase in manufacturers seeking to diversify operations away from China may benefit countries like Taiwan and India.

In India, sharp selloffs hit the financials sector. AU Small Finance Bank Ltd. and Bajaj Finance Ltd., the Fund’s two most-significant individual detractors during the quarter, were among those impacted. As its name suggests, AU Small Finance Bank offers banking products focused on low- and middle-income individuals and small businesses, while Bajaj Finance specializes in wealth management, investments, and related financial services and products.

Generally, we continue to like the prospects of the Fund’s Indian holdings and we are overweight versus the benchmark in India. One development that could be favorable for India is diminished global demand for oil, which has led to lower oil prices. Because India imports approximately 80% of the petroleum it uses, cheaper oil typically improves the nation’s current-account balance, supports its currency and helps keep inflation in check. Investors hope this will give India’s central bank additional scope to pursue interest-rate cuts aimed at stimulating the country’s slowing economy.

OUTLOOK

We understand it is an alarming and uncertain time for investors. What we’ve found in times of uncertainty like we’re currently experiencing is that quality companies adapt. For precisely this reason, our commitment to a “bottom-up” approach focused on strong company fundamentals isn’t merely a flowery talking point. Rather, we feel firm conviction that the best places to be invested during difficult periods are in excellent companies whose capable management teams have positioned the businesses to grow for years. Such positioning includes reasonable preparation to weather unpredictable events in the interim between the present and our long-term investment horizon.

We believe the Fund’s demonstrated resilience through the first months of the coronavirus is evidentiary of the effectiveness of our long-term perspective.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

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WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*    1 YEAR    5 YEARS    10 YEARS

Global Opportunities (WAGOX) — Investor

      -17.97%        -15.03%        3.79%        7.82%

Global Opportunities (WIGOX) — Institutional

      -18.15%        -14.97%        3.90%        7.88%

MSCI AC World Small Cap Index

      -23.39%        -23.06%        -0.49%        5.10%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Opportunities Fund are Investor Class: 1.56% / Institutional Class — Gross: 1.57%, Net: 1.36%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small and micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

Trex Co., Inc.

    3.1%  

AU Small Finance Bank Ltd. (India)

    2.7%  

Monolithic Power Systems, Inc.

    2.6%  

Vitasoy International Holdings Ltd. (Hong Kong)

    2.6%  

Globant S.A. (Argentina)

    2.6%  
Company   % of Net
Assets
 

Silergy Corp. (Taiwan)

    2.5%  

Tyler Technologies, Inc.

    2.4%  

Five9, Inc.

    2.4%  

MercadoLibre, Inc.

    2.2%  

Ensign Group, Inc. (The)

    2.1%  
 

 

**

As of March 31, 2020, there were 78 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

15


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WASATCH GLOBAL SELECT FUND (WAGSX / WGGSX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Global Select Fund is managed by a team of Wasatch portfolio managers led by Ken Applegate, Ken Korngiebel, Paul Lambert, Linda Lasater and Mike Valentine.

 

LOGO

 

Ken Applegate, CFA

Portfolio Manager

 

LOGO

 

Ken Korngiebel, CFA

Portfolio Manager

 

LOGO

 

Paul Lambert

Portfolio Manager

 

 

LOGO

 

Linda Lasater, CFA

Portfolio Manager

 

 

LOGO

 

Mike Valentine

Portfolio Manager

OVERVIEW

The Wasatch Global Select Fund — Investor Class declined -17.82% for the quarter ended March 31, 2020. The Fund outperformed the benchmark MSCI AC (All Country) World Index, which finished the period down -21.37%.

The quarter began on a positive note amid optimism that the trade conflict between the U.S. and China was finally nearing an end. News of a phase-one agreement, signed on January 15, raised hopes for a period of improving relations between the world’s two largest economies. By mid-February, large-cap U.S. stock indexes had pushed to all-time highs, with small caps not far behind. The joy was short-lived, however, as the outbreak of the novel-coronavirus disease in China began spreading to other countries.

DETAILS OF THE QUARTER

Not all companies have been negatively impacted by this crisis. One of the areas that we think might bounce back quickly and for which we see a favorable tailwind is the information-technology (IT) sector, in which the Fund was already overweight, comprising over 31% of the portfolio versus approximately 18% for the benchmark.

In keeping with our long-held optimism for the IT space, DocuSign, Inc. was the top contributor to Fund performance for the quarter. The company offers e-signature software that enables businesses to digitally prepare and execute agreements. The company has been experiencing rapid sales gains and improved prospects for growth. With the pandemic scattering corporate operations to home offices and curtailing business travel, we think DocuSign is positioned to benefit as more companies sign contracts electronically over the internet.

Like IT, we have also been able to find companies with attractive quality and growth characteristics in the health-care space. The Fund is overweight in health care at about 22% of its portfolio compared to approximately 12% for the

benchmark. Veeva Systems, Inc. was a top health-care contributor. The company possesses many of the same attributes we see in our IT holdings. Veeva offers cloud solutions, including data and software solutions, targeted at streamlining operations for customers in the life sciences and biotechnology industries.

Tsuruha Holdings, Inc. from the consumer-staples sector also contributed. This Japan-based drugstore chain has continued to generate strong sales by supplying local citizens with daily necessities and pharmaceuticals.

The Fund’s largest individual detractor for the quarter was Bajaj Finance Ltd., a non-bank financial company offering a broad spectrum of lending services that includes vehicle loans, mortgage loans, consumer loans and commercial loans. Shares of Bajaj tumbled on fears that India’s three-week coronavirus lockdown may trigger a wave of loan defaults. While these concerns appear justified in our view, we believe the company’s stock has been unfairly punished. Bajaj focuses on India’s salaried class, whose loan payments are often made through automatic transfers from their bank accounts. We believe the company is well-capitalized and do not foresee impairment to its long-term business prospects from coronavirus effects.

Euronet Worldwide, Inc., a U.S.-based financial transaction processing services provider, was another detractor. The company has faced near-term pressure in its money-transfer business, in addition to market concerns surrounding the coronavirus. However, we continue to like Euronet and believe the company has strong growth potential in all three business segments — electronic funds transfer (EFT) processing, epay and money transfer.

OUTLOOK

While the pandemic will likely have broad, short- to medium-term earnings impacts on many companies, we don’t currently expect major impairments to the long-term competitive positions of the companies we own.

On average, our companies have stronger earnings growth, higher returns on equity and returns on assets, and less debt than the average company in the benchmark. The Wasatch research team spent several weeks re-analyzing every company we own and scanning for new opportunities. We’ve adjusted company weightings where we see increased potential or weakness, and we’ve sold a handful of names for which we viewed upside potential as inadequate. However, we currently do not see many new names that get us more excited than the ones we already own.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

16


Table of Contents

 

WASATCH GLOBAL SELECT FUND (WAGSX / WGGSX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

        SIX MONTHS*     

SINCE INCEPTION

Global Select (WAGSX) — Investor

         -10.10%          -10.10%

Global Select (WGGSX) — Institutional

         -9.90%          -9.90%

MSCI AC World Index

         -14.33%          -14.33%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Select Fund are Investor Class — Gross: 1.86%, Net: 1.35% / Institutional Class — Gross: 1.55%, Net: 0.95%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in foreign securities, especially in emerging and frontier markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. 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.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

Coloplast A/S, Class B (Denmark)

    4.9%  

Old Dominion Freight Line, Inc.

    4.7%  

Pool Corp.

    4.6%  

Tsuruha Holdings, Inc. (Japan)

    4.5%  

Tyler Technologies, Inc.

    4.5%  
Company   % of Net
Assets
 

Copart, Inc.

    4.4%  

Assa Abloy AB, Class B (Sweden)

    4.3%  

ICON plc (Ireland)

    4.0%  

Roper Technologies, Inc.

    3.7%  

Cochlear Ltd. (Australia)

    3.6%  
 

 

**

As of March 31, 2020, there were 30 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Inception: October 1, 2019. Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

17


Table of Contents

 

WASATCH GLOBAL VALUE FUND (FMIEX / WILCX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Global Value Fund is managed by a team of Wasatch portfolio managers led by David Powers.

 

LOGO

 

David Powers, CFA

Lead Portfolio Manager

  

OVERVIEW

 

Global equities finished the quarter ended March 31, 2020 sharply lower as the spread of Covid-19 led to containment efforts that all but brought the global economy to a standstill. The selloff began in mid-February and continued through much of March as investors fled stocks in an attempt to

reduce risk. Equities recovered some of the lost ground late in the quarter as governments around the world launched extraordinary fiscal and monetary stimulus efforts.

The Wasatch Global Value Fund — Investor Class dropped -27.86% for the quarter, trailing the benchmark MSCI AC (All Country) World Index, which fell -21.37%. Energy stocks posted the largest declines, followed by financials. Meanwhile, health-care, information-technology and consumer-staples stocks held up relatively well.

DETAILS OF THE QUARTER

The Fund’s performance was constrained by overweight positions and stock selection within financials, real estate and energy. The Fund’s holdings in utilities, consumer staples and health care were down less than their benchmark counterparts.

In geographic terms, there was no place to hide from the pandemic. Stocks in most European countries and Australia were down more than the Index’s overall return, while stocks in China, Hong Kong and Japan were down less. Our companies within the United States and Canada accounted for the bulk of the Fund’s underperformance relative to the benchmark.

The Fund’s defensive consumer-staples positions held up better than their benchmark peers during the quarter. These included low-cost retailer Walmart, Inc. and global grocer Koninklijke Ahold Delhaize N.V. In a similar vein, our stocks within health care also held up relatively well, including managed-care company Centene Corp. and pharmaceutical company Novartis AG. Within communication services, an overweight position in China Mobile Ltd. helped cushion performance relative to the benchmark.

Major detractors for the quarter included Suncor Energy, Inc., BP plc and Schlumberger Ltd., all of which suffered along with the rest of the energy complex as the pandemic suppressed demand while Russia and Saudi Arabia compounded matters by launching an oil price war. We reduced our energy exposure during the quarter to rotate into what we consider more-attractive areas, which are discussed below.

Real estate investment trusts focused on entertainment and leisure activities — EPR Properties and VICI Properties, Inc. — also weighed on performance given the dimmed outlook for casinos, hotels, amusement parks, theaters and the like under near-lockdown conditions. We moved on from VICI but still hold EPR at a smaller weight.

OUTLOOK

There’s no doubt the Covid-19 crisis will have a severe impact on the global economy. This will be reflected in a precipitous decline in aggregate earnings and substantial dividend cuts from companies across a range of sectors. We believe some of this was already reflected in stock price levels as the quarter ended, especially in certain areas. In a hurry to de-risk, investors were quick to sell smaller-capitalization stocks and more-cyclical, deep-value holdings.

How does investor sentiment recover? The first requirement is an easing of the pandemic, of which we’ve begun to see some initial signs. As government stimulus efforts take hold, we should see improvement in the global economy. Once investors get a sense of where corporate earnings may bottom out, they can begin to look forward. All of this will take place against the backdrop of central banks’ unprecedented support of risk-asset valuations through quantitative easing. There will clearly be significant challenges along the way. But looking out a few quarters, there’s the potential for stocks to rebound — perhaps sharply.

In positioning the Fund, we’ve continued to employ a consistent process, adjusting holdings to capitalize on the most-attractive areas within the value universe. Entering 2020, we had already begun to add cyclical exposure as the valuation spread between growth and value stocks had reached historical extremes. This valuation spread was only intensified by the market downturn, during which energy, financials, industrials and materials stocks took the hardest hits. We’ve been looking to take advantage of this weakness to further increase the Fund’s cyclical exposure, focusing on stocks that were crushed in the wake of the pandemic. We also see a range of opportunities in smaller-cap stocks as we seek to tie the Fund to an ultimate recovery in economic conditions and companies’ earnings growth.

It’s worth noting that value stocks have historically led performance in the early stages of an economic recovery, and that the current period of growth outperforming value is the longest in decades.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

18


Table of Contents

 

WASATCH GLOBAL VALUE FUND (FMIEX / WILCX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*      1 YEAR      5 YEARS      10 YEARS

Global Value (FMIEX) — Investor

      -23.93%          -22.85%          0.15%          4.22%

Global Value (WILCX) — Institutional

      -23.91%          -22.76%          0.27%          4.33%

MSCI AC World Index

      -14.33%          -11.26%          2.85%          5.88%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Value Fund are Investor Class — Gross: 1.19%, Net: 1.10% / Institutional Class — Gross: 1.23%, Net: 0.97%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 1/31/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investments in value stocks can perform differently from the market as a whole and from other types of stocks and can continue to be undervalued by the market for long periods of time. Investing in foreign securities entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Loss of principal is a risk of investing.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

China Mobile Ltd. (China)

    6.0%  

Johnson & Johnson

    5.0%  

Exelon Corp.

    4.5%  

Duke Energy Corp.

    4.1%  

Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Germany)

    4.1%  
Company   % of Net
Assets
 

Samsung Electronics Co. Ltd. (South Korea)

    4.1%  

Pfizer, Inc.

    3.7%  

BP plc (United Kingdom)

    3.7%  

Eaton Corp. plc

    3.5%  

Suncor Energy, Inc. (Canada)

    3.3%  
 

 

**As

of March 31, 2020, there were 36 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

19


Table of Contents

 

WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch International Growth Fund is managed by a team of Wasatch portfolio managers led by Ken Applegate, Linda Lasater and Derrick Tzau.

 

LOGO

 

Ken Applegate, CFA

Lead Portfolio Manager

 

LOGO

 

Linda Lasater, CFA

Portfolio Manager

 

LOGO

 

Derrick Tzau, CFA

Associate Portfolio Manager

OVERVIEW

The Wasatch International Growth Fund — Investor Class finished the quarter ended March 31, 2020 down -22.18%, outperforming its benchmark, the MSCI AC (All Country) World ex USA Small Cap Index, which finished the quarter down -29.01%.

During the quarter, market panic surrounding the Covid-19 pandemic took a dramatic toll on international equity markets. Around the world, governments and central banks have taken swift and unprecedented action. Broadly speaking, the overarching theme has been one of unpredictability as the rapid pace of breaking developments led to historic market volatility over the three-month period, with drawdowns one day followed by historic rallies the next.

We reopened the Fund to new investors during the quarter. Consistent with Wasatch’s longstanding commitment to shareholders, the Fund previously had been closed to new investors to ensure its disciplined and focused investment approach. The Fund’s reopening reflects Wasatch’s view that current market volatility and dislocations present attractive opportunities for long-term investors, including tremendous opportunities to invest in quality companies at what we consider rarely seen discounts. Wasatch remains committed to thoughtfully managing capacity and will close the Fund, if necessary, when we believe it is in the best interest of existing shareholders.

DETAILS OF THE QUARTER

Stock selection, particularly in Japan, was the primary driver of the Fund’s outperformance of its benchmark during the quarter. The Fund also benefited from stock selection in the United Kingdom, Australia, Taiwan and Canada.

Not all companies have been negatively impacted by the coronavirus crisis. For example, Kusuri no Aoki Holdings Co. Ltd., Tsuruha Holdings, Inc., Sugi Holdings Co. Ltd. and Ain Holdings, Inc. are drugstore chains based in Japan. These four companies continue to generate strong sales by supplying local citizens with daily necessities and pharmaceuticals. While they have been benefiting during these challenging times, our investment thesis and excitement is based on their ability to capitalize on consolidation within the large and fragmented Japanese drugstore industry. We also received good news on March 20 from DiaSorin S.p.A., a diagnostics company based in Italy. The company received Emergency Use Authorization from the U.S. Food and Drug

Administration for a test that detects the virus that causes Covid-19.

One of the largest individual detractors from Fund performance during the quarter was Trainline plc, the leading online-booking platform for train tickets in the U.K. With most people staying at home, travel in the U.K. has decreased significantly and this will have a material impact on Trainline’s earnings. However, we believe domestic travel will bounce back quickly and our analysis has shown that Trainline has ample cash on its balance sheet and access to capital through a revolving credit facility in the event that the downturn is longer or deeper than expected. We have been taking advantage of significant stock-price weakness and adding to our position in Trainline.

In India, sharp selloffs hit the financials sector. AU Small Finance Bank Ltd. was the largest detractor from Fund performance for the quarter. As its name suggests, AU Small Finance Bank offers banking products focused on low- and middle-income individuals and small businesses. All in all, we continue to like the prospects of the Fund’s Indian holdings. India is the Fund’s most heavily weighted emerging market, and we are overweight versus the benchmark.

OUTLOOK

Without mincing words: we believe Wasatch is in good shape, as a firm. And we believe the International Growth Fund is similarly well-positioned. As we assess international markets, one thing is clear: We liked our companies going into the selloff, and we still like them now — especially at the current less-expensive prices. We have conducted in-depth analyses of how our investments are positioned and feel confident that the majority of the Fund’s portfolio companies have much stronger balance sheets, generate stronger earnings growth and have higher returns on equity than those in the benchmark.

In many of our recent calls, our companies’ management teams have generally been optimistic, seeing the prospect for growth on the other side of the crisis. We believe these companies are well-run and better poised to weather this environment than lower-quality competitors, who are less likely to have the organizational means to maintain operations and serve customers in this challenging time.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

20


Table of Contents

 

WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*      1 YEAR      5 YEARS      10 YEARS

International Growth (WAIGX) — Investor

      -12.33%          -11.42%          2.31%          7.51%

International Growth (WIIGX) — Institutional

      -12.29%          -11.35%          2.41%          7.56%

MSCI AC World ex USA Small Cap Index

      -21.19%          -21.18%          -0.81%          2.79%

MSCI World ex USA Small Cap Index

      -20.23%          -19.04%          0.39%          3.95%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Growth Fund are Investor Class: 1.46% / Institutional Class: 1.35%. The expense ratio shown elsewhere in this report may be different. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

 

*Not

annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 

Cochlear Ltd. (Australia)

    2.7%  

DiaSorin S.p.A. (Italy)

    2.4%  

Halma plc (United Kingdom)

    2.2%  

Trainline plc (United Kingdom)

    2.1%  

Patrizia AG (Germany)

    2.1%  
Company   % of Net
Assets
 

Vitasoy International Holdings Ltd. (Hong Kong)

    1.9%  

Sugi Holdings Co. Ltd. (Japan)

    1.7%  

Silergy Corp. (Taiwan)

    1.7%  

Asahi Intecc Co. Ltd. (Japan)

    1.7%  

Diploma plc (United Kingdom)

    1.6%  
 

 

**As

of March 31, 2020, there were 86 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

21


Table of Contents

 

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch International Opportunities Fund is managed by a team of Wasatch portfolio managers led by Linda Lasater, Dan Chace and Allison He.

 

LOGO

 

Linda Lasater, CFA

Lead Portfolio Manager

 

LOGO

 

Dan Chace, CFA

Portfolio Manager

 

LOGO

 

Allison He, CFA

Associate Portfolio Manager

OVERVIEW

The Wasatch International Opportunities Fund — Investor Class declined -18.77% for the quarter ended March 31, 2020. The Fund outperformed its benchmark, the MSCI AC (All Country) World ex USA Small Cap Index, which finished the same period down -29.01%.

During the quarter, market panic surrounding the Covid-19 pandemic took a dramatic toll on international equity markets. Around the world, governments and central banks have taken swift and unprecedented action. Broadly speaking, the overarching theme has been one of unpredictability as the rapid pace of breaking developments has led to historic market volatility.

We believe the Fund is well-positioned to withstand the coronavirus crisis given our in-depth analyses of our investments. Our broad assessment is that the Fund holds companies with strong balance sheets that appear capable of surviving the pandemic’s effects and thriving thereafter.

DETAILS OF THE QUARTER

One area that we think might see favorable tailwinds during the pandemic and beyond is the information-technology (IT) sector. The Fund already had an overweight position in IT at about 28% of the portfolio compared to approximately 11% for its benchmark.

Stock selection, particularly in Japan, was the primary driver of the Fund’s outperformance of its benchmark during the quarter. The Fund also benefited from stock selection in China, Korea, Taiwan, the United Kingdom and France.

Not all companies have been negatively impacted by the coronavirus crisis. For example, Kusuri no Aoki Holdings Co. Ltd., which was among the top individual contributors to Fund performance for the quarter, is a drugstore and pharmacy chain based in Japan. The company continues to generate strong sales by supplying local citizens with daily necessities and pharmaceuticals.

The Fund’s largest individual contributor was AK Medical Holdings Ltd., a Chinese medical-device manufacturer that produces orthopedic implants, spinal interbody cages and artificial vertebral bodies, among other products.

While Kusuri and AK Medical have been benefiting during these challenging times, our investment thesis is based on their ability to grow over the long term. Indeed, the health-care sector, where the Fund is overweight at about 18% of the portfolio versus less than 8% for the benchmark,

remains an area we like and where we often discover companies with the quality characteristics and growth potential we find attractive. The Fund’s health-care investments have not only been a source of alpha during this uncertain period, but we believe they have the potential to benefit from future tailwinds.

One of the largest individual detractors from Fund performance during the quarter was Clipper Logistics plc. The company offers logistics services, including warehousing, garment handling, e-fulfillment and transport services, and specializes in serving the high-end retail segment. Our long-term conviction in Clipper was weak relative to our excitement for other opportunities, and we fully exited the position subsequent to quarter-end.

The Fund did not hold significant positions in the heavily affected tourism and travel industries — and we adjusted positions where necessary in the few potentially exposed companies we did own. One example is Webjet Ltd., the largest online travel agency in Australia and New Zealand, which was the most-significant detractor from Fund performance for the quarter. The company recently raised capital to shore up its position. We believe Webjet has the potential to take significant market share when the travel industry normalizes.

OUTLOOK

While the coronavirus outbreak will likely have broad, short- to medium-term earnings impacts on many companies, we don’t currently expect major impairments to the long-term competitive positions of the companies we own. Moreover, our outreach to company management teams has helped assure us that they expect few changes to their secular outlooks for operations and capital investments.

Without mincing words: we believe Wasatch is in good shape, as a firm. And we believe the International Opportunities Fund is similarly well-positioned. As we assess international markets, one thing is clear: We liked our companies going into the selloff, and we still like them now —  especially at the current, less-expensive prices. We have conducted in-depth analyses of how our investments are positioned and feel confident that the majority of the Fund’s portfolio companies have much stronger balance sheets, generate stronger earnings growth and have higher returns on equity than those in the benchmark.

Thank you for the opportunity to manage your assets.

 

  Current

and future holdings are subject to risk.

 

 

22


Table of Contents

 

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*    1 YEAR    5 YEARS    10 YEARS

International Opportunities (WAIOX) — Investor

      -12.34%        -5.39%        4.87%        8.01%

International Opportunities (WIIOX) — Institutional

      -12.20%        -5.32%        5.12%        8.13%

MSCI AC World ex USA Small Cap Index

      -21.19%        -21.18%        -0.81%        2.79%

MSCI World ex USA Small Cap Index

      -20.23%        -19.04%        0.39%        3.95%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Opportunities Fund are Investor Class: 2.09% / Institutional Class: 1.96%. The expense ratio shown elsewhere in this report may be different. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
AK Medical Holdings Ltd. (China)     3.9%  
Fortnox AB (Sweden)     2.5%  
Prestige International, Inc. (Japan)     2.3%  
Esker S.A. (France)     2.3%  
Philippine Seven Corp. (Philippines)     2.2%  
Company   % of Net
Assets
 
Avon Rubber plc (United Kingdom)     2.1%  
LEENO Industrial, Inc. (South Korea)     2.1%  
Rakus Co. Ltd. (Japan)     2.0%  
IR Japan Holdings Ltd. (Japan)     2.0%  
Systena Corp. (Japan)     2.0%  
 

 

**As

of March 31, 2020, there were 94 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

LOGO

 

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

23


Table of Contents

 

WASATCH INTERNATIONAL SELECT  FUND (WAISX / WGISX)

  MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch International Select Fund is managed by a team of Wasatch portfolio managers led by Ken Applegate, Linda Lasater and Derrick Tzau.

 

LOGO

 

Ken Applegate, CFA Lead Portfolio Manager

 

LOGO

 

Linda Lasater, CFA

Lead Portfolio Manager

 

LOGO

 

Derrick Tzau, CFA Associate Portfolio Manager

OVERVIEW

The Wasatch International Select Fund — Investor Class declined -15.45% for the quarter ended March 31, 2020. The Fund outperformed its benchmark, the MSCI EAFE Index, which finished the same period down -22.83%.

During the quarter, market panic surrounding the Covid-19 pandemic took a dramatic toll on international equity markets. Around the world, governments and central banks have taken swift and unprecedented action. Broadly speaking, the overarching theme has been one of unpredictability as the rapid pace of breaking developments has led to historic market volatility, with drawdowns one day followed by historic rallies the next.

DETAILS OF THE QUARTER

Not all companies have been negatively affected by this crisis. For example, three health-care companies — Fisher & Paykel Healthcare Corp. Ltd., Coloplast A/S and Sartorius Stedim Biotech S.A. — were the strongest contributors to Fund performance for the quarter.

Health care is the Fund’s most-overweight sector because we have been able to find a multitude of companies with quality and growth characteristics that meet our strict standards. Generally speaking, health-care stocks tend to behave in an idiosyncratic and defensive fashion. The Fund’s health-care investments have not only been a source of alpha during this uncertain period, but we believe they have the potential to benefit from future tailwinds.

Fisher & Paykel (F&P) was the top contributor. The company produces and markets ventilation and oxygen therapy products. As you might imagine, the company’s products have been in high demand during the Covid-19 health crisis and its employees have been working overtime to supply as many products as possible to assist doctors in treating their patients. Looking beyond the pandemic, we believe F&P has significant headroom for growth. We have high confidence that management can capitalize on the company’s opportunities.

Coloplast, headquartered in Denmark, develops and manufactures health-care products for ostomy, incontinence, mastectomy, wound healing and skin care. Customers include health-care professionals, dealers and product users. Coloplast is the market leader in Europe, and the company has been gaining market share in the U.S. in recent years.

Sartorius Stedim is a French manufacturer of products used in biopharmaceutical manufacturing and for life-sciences research.

One of the largest detractors from Fund performance during the quarter was Trainline plc, the leading online-booking platform for train tickets in the U.K. Decreased travel will have a material impact on Trainline’s earnings, but we believe domestic travel in the U.K. will bounce back quickly. Trainline has ample cash on its balance sheet and access to capital through a revolving credit facility in the event that the downturn is longer or deeper than expected. We have been taking advantage of significant stock-price weakness and adding to our position in Trainline.

CAE, Inc. was the largest individual detractor. The company designs, manufactures and sells flight-simulation systems to customers in both the civil and defense markets. CAE also provides aviation training services. This is a newer position in the Fund and, despite the short-term challenges posed by decreased travel, we believe the company has promising long-term growth prospects. CAE is already a global leader in the space and appears poised to continue that growth over the coming years.

OUTLOOK

Without mincing words: we believe Wasatch is in good shape, as a firm. And we believe the International Select Fund is similarly well-positioned. As we assess international markets, one thing is clear: We liked our companies going into the selloff, and we still like them now — especially at the current, less-expensive prices. We have conducted in-depth analyses of how our investments are positioned and feel confident that the majority of the Fund’s portfolio companies have much stronger balance sheets, generate stronger earnings growth and have higher returns on equity than those in the benchmark.

In many of our recent calls, our companies’ management teams have generally been optimistic, seeing the prospect for growth on the other side of the crisis. We believe these companies are well-run and better poised to weather this environment than lower-quality competitors, who are less likely to have the organizational means to maintain operations and serve customers in this challenging time.

Thank you for the opportunity to manage your assets.

 

  Current

and future holdings are subject to risk.

 

 

24


Table of Contents

 

WASATCH INTERNATIONAL SELECT FUND (WAISX / WGISX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*  

SINCE INCEPTION

International Select (WAISX) — Investor

      -5.30%       -5.30%

International Select (WGISX) — Institutional

      -4.80%       -4.80%

MSCI EAFE Index

      -16.52%       -16.52%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Select Fund are Investor Class — Gross: 2.03%, Net: 1.30% / Institutional Class — Gross: 1.79%, Net: 0.90%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. 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.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Coloplast A/S, Class B (Denmark)     6.3%  
Fisher & Paykel Healthcare Corp. Ltd. (New Zealand)     6.2%  
Tsuruha Holdings, Inc. (Japan)     5.7%  
Assa Abloy AB, Class B (Sweden)     4.8%  
Dassault Systemes S.A. (France)     4.5%  
Company   % of Net
Assets
 
Sartorius Stedim Biotech (France)     4.5%  
Halma plc (United Kingdom)     4.4%  
Cochlear Ltd. (Australia)     4.0%  
Chr. Hansen Holding A/S (Denmark)     4.0%  
Sonova Holding AG (Switzerland)     3.8%  
 

 

**As

of March 31, 2020, there were 29 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

††Inception: October 1, 2019. Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

25


Table of Contents

 

WASATCH MICRO CAP FUND (WMICX / WGICX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Micro Cap Fund is managed by a team of Wasatch portfolio managers led by Ken Korngiebel and Dan Chace.

 

LOGO

 

Ken Korngiebel, CFA

Lead Portfolio Manager

  

LOGO

 

Dan Chace, CFA

Portfolio Manager

  

OVERVIEW

 

During the Covid-19 turmoil that occurred in the three months ended March 31, 2020, equity prices experienced extreme losses

before partially rebounding near the end of the quarter on optimism that massive monetary and fiscal stimulus would limit economic fallout. Small-company stocks were generally down more than large-company names, and the benchmark Russell Microcap Index dropped -31.99% for the quarter. Declining less than its benchmark, the Wasatch Micro Cap Fund — Investor Class dropped -24.80%.

The quarter began on a positive note amid optimism that the trade conflict between the U.S. and China was finally nearing an end. News of a phase-one agreement, signed on January 15, raised hopes for a period of improving relations between the world’s two largest economies. By mid-February, large-cap U.S. stock indexes had pushed to all-time highs, with small caps not far behind. The joy was short-lived, however, as the outbreak of Covid-19 in China began spreading to other countries.

DETAILS OF THE QUARTER

Stock selection in the financials sector contributed the most to the Fund’s outperformance of the Index. Similarly, our industrials held up much better than their benchmark counterparts. Not surprisingly, consumer discretionary was one of the weakest-performing sectors — and our companies were down slightly more than those in the Index. Information technology and health care are the Fund’s most-heavily weighted sectors and, in both, our companies were down less than their Index peers.

The strongest contributor to Fund performance was Inovio Pharmaceuticals, Inc. A biotechnology company, Inovio recently completed preclinical testing for its DNA-based potential coronavirus vaccine, INO-4800. The company plans to launch clinical trials in the U.S., China and Korea, with initial results expected sometime in the fall of 2020. Inovio anticipates having one million doses of the potential vaccine ready for additional clinical trials or emergency use by the end of the calendar year.

Limelight Networks, Inc. was another contributor. The company’s content-delivery network enables businesses to deliver digital content across internet, mobile and social channels. The recent launch of several new over-the-top services — which distribute streaming media as a standalone product directly to consumers — has boosted demand for Limelight’s capabilities. Demand also has surged as billions of people around the globe shelter in place to slow the spread of Covid-19. We think the quality of Limelight’s

technology will enhance the company’s ability to gain market share, particularly in the video space.

Stocks tied to the retail and restaurant industries were among the quarter’s biggest decliners as customers stayed home and public-health concerns disrupted operations. Detractors from Fund performance included Boot Barn Holdings, Inc., Chefs’ Warehouse, Inc. and Chuy’s Holdings, Inc. We added to all three positions to take advantage of their lower market valuations.

Boot Barn is a multi-channel specialty retailer offering western and work-related apparel, footwear and accessories. In addition to general concerns about retailers, exposure to oil-producing regions of Texas appeared to weigh on the company’s stock price during the quarter as oil prices plummeted to multi-year lows. Chefs’ Warehouse distributes specialty-food products primarily to chefs who own or operate restaurants, catering services and fine-dining establishments. Chuy’s operates more than 90 Tex-Mex restaurants across 19 states.

OUTLOOK

Having outpaced our benchmark during the initial phases of the Covid-19 turmoil, we’re acutely aware that the race is never over. In market panics, extreme risk aversion can cause investors to unfairly punish the stocks of companies whose long-term businesses remain strong — but whose near-term prospects are much less certain, or perhaps even quite poor. Such panics sometimes don’t burn themselves out until high-quality stocks with some perceived risk are beaten down to the point that they may actually be the least-risky names. To the extent that we believe risk has become mispriced, we’ll continue to seek opportunities to selectively take it on — in anticipation of a time when market prices better reflect company fundamentals.

In the meantime, patience can be an investor’s most-important asset. Because we generally aren’t concerned about the impact of short-term events on the long-run earnings potential of the businesses we own, we believe our investment approach is well-suited to navigating turbulent markets. Regardless of what the future holds, we’ll continue our process of re-examining the thesis of every holding and scanning our investment universe for opportunities to improve the Fund’s portfolio.

Thank you for the opportunity to manage your assets.

 

  Current

and future holdings are subject to risk.

 

 

26


Table of Contents

 

WASATCH MICRO CAP FUND (WMICX / WGICX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

        SIX MONTHS*      1 YEAR      5 YEARS      10 YEARS

Micro Cap (WMICX) — Investor

         -14.01%          -10.02%          8.28%          11.31%

Micro Cap (WGICX) — Institutional

         -14.01%          -10.02%          8.28%          11.31%

Russell Microcap® Index

         -22.84%          -26.38%          -1.94%          6.05%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Fund are Investor Class: 1.66% / Institutional Class: 1.59%. The expense ratio shown elsewhere in this report may be different. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 1/31/2020 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2020 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

 

*

Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Limelight Networks, Inc.     3.0%  
Kadant, Inc.     3.0%  
Freshpet, Inc.     2.8%  
Construction Partners, Inc., Class A     2.7%  
Transcat, Inc.     2.7%  
Company   % of Net
Assets
 
Upland Software, Inc.     2.6%  
Kornit Digital Ltd. (Israel)     2.5%  
Medallia, Inc.     2.5%  
Simulations Plus, Inc.     2.5%  
ICF International, Inc.     2.5%  
 

 

**

As of March 31, 2020, there were 73 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

27


Table of Contents

 

WASATCH MICRO CAP VALUE FUND (WAMVX / WGMVX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Micro Cap Value Fund is managed by a team of Wasatch portfolio managers led by Brian Bythrow.

 

LOGO

 

Brian Bythrow, CFA

Lead Portfolio Manager

  

OVERVIEW

 

During the quarter ended March 31, 2020, the broad equity market selloff resulted in the Wasatch Micro Cap Value Fund — Investor Class slipping -28.44%. The Fund outperformed the benchmark Russell Microcap Index, which fell -31.99%.

Interestingly, unlike during many

historical market downturns, value stocks didn’t hold up better than average during the quarter’s rout. We think the reason was that many value companies have asset-heavy operations and/or high debt levels.

Given the Fund’s focus on the “growthier” end of the value spectrum, we’re not surprised that it outperformed its benchmark during the quarter’s downturn. Our companies generally have much less debt than those in the Index, and we think our low-debt criterion is also appropriate going forward. In addition, the characteristics we look for include a winning business model, proven management, a track record of increasing market share and an ability to grow at double-digit rates for the next several years. We think companies with these characteristics — bought at stock prices much lower than the prices offered several months ago — are likely to be long-term holdings.

DETAILS OF THE QUARTER

Concerns about the impact of Covid-19 overshadowed most other factors driving stock prices during the quarter. Still, we did see some winners.

Inovio Pharmaceuticals, Inc. was the top contributor to Fund performance for the quarter. A biotechnology company, Inovio recently completed preclinical testing for its DNA-based potential coronavirus vaccine. The company plans to launch clinical trials in the U.S., China and Korea, with initial results expected sometime in the fall of 2020.

Another stock that held up well was SiTime Corp. The company manufactures oscillators, clock generators and embedded resonators used for ethernet switches, computing devices, graphics cards, disk drives, mobile phones and subscriber-identity cards. Apparently, the electronic devices that need SiTime’s components are still considered high-priority purchases. The company ranks exceedingly well in our assessment of its balance sheet, business model, management, market share and growth potential.

Bandwidth, Inc. was also a solid contributor. The company operates a cloud-based software platform that enables enterprises to create, scale and operate voice or text communications. Use of Bandwidth’s platform skyrocketed during the quarter as the coronavirus pandemic scattered corporate operations to home offices.

Stocks tied real estate were among the quarter’s biggest losers, as investors fretted over declining property-related transactions and hardships in paying rents and mortgages. Detractors from Fund performance included Skyline Champion Corp. and Arbor Realty Trust, Inc.

Skyline Champion produces manufactured homes, modular homes and modular buildings. The company focuses on the multi-family, hospitality, senior and workforce-housing segments in the United States and Canada. Because housing is considered “essential” during the pandemic, Skyline’s operations are partially open. We’re optimistic regarding the stock because the company has a healthy balance sheet and provides much-needed affordable housing.

Arbor Realty invests primarily in real estate related bridge and mezzanine loans and preferred equity. While we acknowledge that Arbor has some debt on its balance sheet, we think the company is well-positioned for the long term. In our estimation, Arbor has an excellent management team. And the company is focused on multi-family housing, a necessity in all economic environments.

Another significant detractor was National CineMedia, Inc., which operates the largest cinema-advertising network in the United States. Relative to companies that provide “essential” services, we’re less optimistic about National CineMedia because we think sizable public gatherings for entertainment may be on hold for an extended period.

OUTLOOK

Although we can’t predict when the coronavirus pandemic will subside, we’d note that every major crisis during our careers has produced once-in-a-decade buying opportunities. And we believe the current crisis will be no different. We’ve already described the characteristics we look for in companies.

Now more than ever, we want to invest in great businesses that we can hold for years on end. We’re looking to concentrate on our most-favored names and reduce the number of stocks we own. We’re also finding more interesting investment opportunities because companies that had previously been out of our market-cap range have fallen into the micro-cap space.

A final point is that stocks are likely to move in fits and starts. We have little doubt that we’ll continue to face days of extreme pessimism and days of unbridled optimism. For our part, we don’t think it’s possible to “time” the day-to-day moves in the markets. Instead, we’re attempting to position the Fund for the next several years. And we’re keeping our emotions in check by focusing on the long-term fundamentals of the companies we hold and those we want to own.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

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WASATCH MICRO CAP VALUE FUND (WAMVX / WGMVX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

      SIX MONTHS*    1 YEAR    5 YEARS    10 YEARS

Micro Cap Value (WAMVX) — Investor

       -20.40%        -18.36%        4.10%        8.65%

Micro Cap Value (WGMVX) — Institutional

       -20.40%        -18.36%        4.10%        8.65%

Russell Microcap® Index

       -22.84%        -26.38%        -1.94%        6.05%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Value Fund are Investor Class: 1.74% / Institutional Class: 1.59%. The expense ratio shown elsewhere in this report may be different. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 1/31/2020 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2020 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investments in value stocks can perform differently from the market as a whole and from other types of stocks and can continue to be undervalued by the market for long periods of time. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

 

*Not

annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Freshpet, Inc.     2.6%  
Bandwidth, Inc., Class A     2.4%  
Fabrinet     2.3%  
Skyline Champion Corp.     2.0%  
OptimizeRx Corp.     1.8%  
Company   % of Net
Assets
 
Esker S.A. (France)     1.8%  
PetIQ, Inc.     1.7%  
IR Japan Holdings Ltd. (Japan)     1.7%  
Nova Measuring Instruments Ltd. (Israel)     1.6%  
QAD, Inc., Class A     1.6%  
 

 

**

As of March 31, 2020, there were 93 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

29


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WASATCH SMALL CAP GROWTH FUND (WAAEX / WIAEX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Small Cap Growth Fund is managed by a team of Wasatch portfolio managers led by JB Taylor, Ken Korngiebel and Ryan Snow.

 

LOGO

 

JB Taylor

Lead Portfolio Manager

 

LOGO

 

Ken Korngiebel, CFA

Portfolio Manager

 

LOGO

 

Ryan Snow

Portfolio Manager

OVERVIEW

During the Covid-19 turmoil of the quarter ended March 31, 2020, equity prices experienced extreme losses before partially rebounding near the end of the quarter on optimism that massive monetary and fiscal stimulus would limit economic fallout. Small-company stocks were generally down more than large-company names, and the benchmark Russell 2000 Growth Index lost -25.76%. Meanwhile, the Russell 2000 Index dropped -30.61%. The Wasatch Small Cap Growth Fund — Investor Class fell -23.55%.

Wasatch portfolios historically have held up better in down markets because we strive to invest in companies with better quality metrics than the average company in their benchmark indexes. This tendency held true during the quarter, with the Fund down less than its benchmark. We didn’t have significant holdings in the heavily affected tourism and travel industries — and we adjusted positions, where necessary, in the few potentially exposed companies we did own.

DETAILS OF THE QUARTER

By sector, our stock picking in information technology and industrials accounted for most of the Fund’s outperformance relative to the benchmark. We also benefited from not having exposure to some of the worst areas of the market like energy and materials. The Fund’s overweight position in consumer discretionary and weakness in our health care stocks detracted from relative performance.

The top contributor to Fund performance was Five9, Inc., a provider of contact-center software that’s managed and hosted from the cloud. The company offers real-time and historical reporting, quality monitoring, and workforce and customer-relationship-management integrations. The superiority of cloud-based software has become especially evident during the pandemic. On a longer-term basis, Five9 has competitive advantages that make it the dominant growth company in its industry.

Biotechnology firm Inovio Pharmaceuticals, Inc. was also a contributor. Inovio recently completed preclinical testing for its DNA-based potential coronavirus vaccine. The company plans to launch clinical trials in the U.S., China and Korea. Inovio anticipates having one million doses of the potential vaccine ready for additional clinical trials or emergency use by the end of 2020.

The largest detractor from performance was National Vision Holdings, Inc., a provider of eye exams, eyeglasses

and contact lenses at “value-oriented” prices. Most vision appointments have been postponed during the pandemic and this has impacted National Vision’s sales and earnings. Although the stock has declined substantially, we think the company’s balance sheet is healthy enough to weather a slowdown. When conditions normalize, we expect to see same-store sales accelerate — especially since consumers still hurting from a recession typically gravitate to value-oriented brands.

Another detractor was Monro, Inc., which operates a chain of shops for automotive repairs and tires. These shops provide services and parts related to brakes, mufflers, exhaust systems, steering mechanisms, drive trains, suspensions, wheel alignments and routine maintenance. At the current stock price, we like Monro based on our expectations that the company will increase revenues, margins and free cash flows.

OUTLOOK

The Covid-19 crisis is likely to result in broad changes to society. Existing trends toward telemedicine, video conferencing and online education, for example, are likely to accelerate as technological solutions become accepted as viable replacements for human-to-human contact in a wider range of applications. A long-running investment theme in the Fund has been to seek innovative companies using new technologies to do things better, faster and cheaper. As American life is transformed in the wake of the virus, we think the types of innovative, disruptive companies we look for are likely to lead the way.

Beyond keeping up with new innovations, we think an enduring principle is that quality is especially important during a crisis because exceptional companies often increase their competitive advantages in times of stress, even when short-term sales and earnings decline on an absolute basis. After the crisis, these companies are particularly well-positioned to grow and take even more market share over the long term.

Because we generally aren’t concerned about the impact of short-term events on the long-run earnings potential of the businesses we own, we believe our investment approach is well-suited to navigating turbulent markets. Regardless of what the future holds, we’ll continue our process of re-examining the thesis of every holding and scanning our investment universe for opportunities to improve the Fund’s portfolio.

Thank you for the opportunity to manage your assets.

 

 

Current and future holdings are subject to risk.

 

 

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WASATCH SMALL CAP GROWTH FUND (WAAEX / WIAEX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

      SIX MONTHS*    1 YEAR    5 YEARS    10 YEARS

Small Cap Growth (WAAEX) — Investor

       -14.48%        -11.08%        5.52%        10.49%

Small Cap Growth (WIAEX) — Institutional

       -14.42%        -10.98%        5.66%        10.56%

Russell 2000® Growth Index

       -17.31%        -18.58%        1.70%        8.89%

Russell 2000® Index

       -23.72%        -23.99%        -0.25%        6.90%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Growth Fund are Investor Class: 1.17% / Institutional Class — Gross: 1.09%, Net: 1.06%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

* Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Five9, Inc.     3.7%  
Medpace Holdings, Inc.     3.3%  
RBC Bearings, Inc.     3.3%  
Paylocity Holding Corp.     3.2%  
Monolithic Power Systems, Inc.     3.0%  
Company   % of Net
Assets
 
ICON plc (Ireland)     3.0%  
DocuSign, Inc.     2.9%  
Barnes Group, Inc.     2.9%  
Ollie’s Bargain Outlet Holdings, Inc.     2.7%  
Euronet Worldwide, Inc.     2.7%  
 

 

**As

of March 31, 2020, there were 61 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

31


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WASATCH SMALL CAP VALUE FUND (WMCVX / WICVX)    MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Small Cap Value Fund is managed by a team of Wasatch portfolio managers led by Jim Larkins and Austin Bone.

 

LOGO

 

Jim Larkins

Lead Portfolio Manager

 

  

 

LOGO

 

Austin Bone

Associate Portfolio Manager

  

OVERVIEW

 

U.S. equities experienced a severe downturn in the quarter ended March 31, 2020, as the spread of Covid-19 led to uncertainty about the outlook for

economic growth and corporate earnings. Small-cap stocks lagged large caps by a considerable margin, and value stocks significantly underperformed growth. The Wasatch Small Cap Value Fund — Investor Class declined -36.93% and lagged the benchmark Russell 2000 Value Index, which dropped -35.66%. By comparison, the Russell 2000 Growth Index fell -25.76%.

Amid the chaos in the financial markets, we relied on our processes, bottom-up analysis and the input from our experienced team of analysts to adjust the Fund on the margin rather than make large-scale changes. Our 20-plus years of experience in managing the Fund has taught us that excessive portfolio activity in response to short-term market movements can have a destructive effect on longer-term returns, so we sought to base our decisions on individual company fundamentals and not on the daily price action of their stocks.

On this front, we continue to have a high degree of confidence in the businesses and management teams in which we have invested your capital. While we were disappointed in the market performance of some of our investments, we believe the underlying businesses have robust outlooks for future returns. We held countless discussions with the management teams of our portfolio companies in recent weeks. We were impressed by their preparation, their relationships with their banks and their plans for the future. We therefore believe that the Fund, despite its recent weakness, remains well-constructed and positioned to capitalize on opportunities among both new and existing investments. It’s important to keep in mind that we’re constantly monitoring the fundamentals of our portfolio companies, and we will not hesitate to make adjustments if facts change.

DETAILS OF THE QUARTER

The Fund’s performance relative to the Russell 2000 Value Index was hurt by two key factors. First, the Fund’s holdings in the travel and leisure space faced a direct, negative impact from restrictions associated with the coronavirus pandemic. Copa Holdings S.A., an airline that operates mainly in Central and South America, and Allegiant Travel Co., a low-cost U.S. air carrier, were both hit hard. We view Copa as a well-run operator with a strong geographic position and a multi-year growth story. It has a cash balance of nearly $1 billion, and we believe it is well-positioned to weather the stoppage in air travel. Allegiant, for its part, has a history of adapting quickly to reduced schedules. In addition, we think the company stands to benefit from sharply lower fuel costs.

The Fund’s underperformance in financials also weighed on its quarterly return. Across the entire market, stocks of companies that hold either loans or securities derived from loans came under pressure due to increased concerns about liquidity conditions and potential credit losses. Commercial lenders Arbor Realty Trust, Inc. and Ladder Capital Corp. both fell sharply as a result. In addition, our positions in banking stocks were hurt by the compression in net interest margins (i.e., the difference between the rates at which banks borrow and lend). While we sold three holdings in financials due to their above-average leverage, we retained the majority of our investments and are closely evaluating all of them to determine which ones could emerge from the crisis with the best market positions.

OUTLOOK

During times of investor panic and forced selling, stock prices may not necessarily correspond with companies’ profit outlook for the next three to five years. Our goal is to take advantage of these dislocations, instead of jeopardizing longer-term performance by overreacting to erratic market movements. Accordingly, we spent several weeks re-analyzing every company we own and scanning for new opportunities. We adjusted company weightings where we saw increased likelihood of weakness, we sold a handful of stocks where we saw less upside potential, and we took care not to sell stocks that we believe offer the most compelling upside opportunities, even if they were also among the quarter’s largest laggards.

We aren’t attempting to anticipate — or react to — day-to-day headlines. Instead, we are continuing to utilize our disciplined, bottom-up investment process to find high-quality, well-managed companies that our research indicates are well-positioned to withstand the downturn and prosper in an eventual recovery. We have been managing the Fund with an eye toward this outcome, and we believe the benefit will be evident in the Fund’s long-term results.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

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Table of Contents

 

WASATCH SMALL CAP VALUE FUND (WMCVX / WICVX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

      SIX MONTHS*    1 YEAR    5 YEARS    10 YEARS

Small Cap Value (WMCVX) — Investor

       -32.38%        -30.17%        -1.34%        6.96%

Small Cap Value (WICVX) — Institutional

       -32.28%        -30.00%        -1.19%        7.10%

Russell 2000® Value Index

       -30.20%        -29.64%        -2.42%        4.79%

Russell 2000® Index

       -23.72%        -23.99%        -0.25%        6.90%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Value Fund are Investor Class: 1.20% / Institutional Class — Gross: 1.09%, Net: 1.05%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 1/31/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investments in value stocks can perform differently from the market as a whole and from other types of stocks and can continue to be undervalued by the market for long periods of time. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

* Not annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Kadant, Inc.     4.5%  
Fabrinet     4.4%  
Hamilton Lane, Inc., Class A     3.2%  
Ensign Group, Inc. (The)     3.1%  
Euronet Worldwide, Inc.     3.1%  
Company   % of Net
Assets
 
National Storage Affiliates Trust     3.0%  
Valvoline, Inc.     2.9%  
Monro, Inc.     2.9%  
ICON plc (Ireland)     2.6%  
Innospec, Inc.     2.5%  
 

 

**As

of March 31, 2020, there were 60 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

  †Excludes

securities sold short and options written, if any.

 

††

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

33


Table of Contents

 

WASATCH ULTRA GROWTH FUND (WAMCX / WGMCX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch Ultra Growth Fund is managed by a team of Wasatch portfolio managers led by John Malooly.

 

LOGO

 

John Malooly, CFA

Lead Portfolio Manager

  

OVERVIEW

 

Equity prices experienced significant losses amid the Covid-19 crisis during the quarter ended March 31, 2020. Small companies were down more than large companies, and the benchmark Russell 2000 Growth Index declined -25.76%. The Wasatch Ultra Growth Fund — Investor Class held up much

better than the benchmark but still posted a drop of -17.24%.

Aside from the devastating human toll, Covid-19 poses a range of business and economic threats. With little in the way of recent precedent to guide them, investors began selling risk-oriented assets. As the pandemic largely moved to the U.S. and Europe during March, the selloff evolved into a full-blown panic. Financial markets rallied near the end of the quarter after the Federal Reserve embarked on an open-ended program of quantitative easing and the U.S. government enacted relief legislation of unprecedented scale.

DETAILS OF THE QUARTER

At the sector level, beneficial stock picking in industrials contributed to the Fund’s outperformance relative to its benchmark. The Fund’s most-heavily weighted sectors are health care and information technology. In both sectors, our stocks outperformed their benchmark counterparts. Stock picking in materials, consumer staples and consumer discretionary also helped relative results. Our underperformance in financials was a headwind.

The strongest contributor to Fund performance was Inovio Pharmaceuticals, Inc. A biotechnology company, Inovio recently completed preclinical testing for its DNA-based potential coronavirus vaccine, INO-4800. The company plans to launch clinical trials in the U.S., China and Korea, with initial results expected sometime in the fall of 2020. Inovio anticipates having one million doses of the potential vaccine ready for additional clinical trials or emergency use by the end of the calendar year.

Other contributors included DocuSign, Inc. and Habit Restaurants, Inc. DocuSign offers e-signature software that enables businesses to digitally prepare and execute agreements. The company has been experiencing rapid sales gains and improved prospects for future growth. With the coronavirus pandemic scattering corporate operations to home offices and curtailing business travel, DocuSign is positioned to benefit as more companies sign contracts electronically over the internet.

Habit operates and franchises fast-casual restaurants specializing in fresh, made-to-order burgers and sandwiches cooked over an open flame. The company’s stock price jumped in early January after Habit agreed to be acquired by a larger competitor. The all-cash deal, which allowed Habit’s shareholders to sidestep the impact of the coronavirus, closed as expected in March.

Retail stocks were among the quarter’s biggest decliners as shoppers stayed home and public-health concerns disrupted

operations. Detractors from Fund performance included Five Below, Inc. and Floor & Decor Holdings, Inc. We added to both positions to take advantage of their lower valuations.

Five Below is a specialty value retailer offering a variety of low-priced merchandise. Although the company made the decision to temporarily close its stores, we think it’s likely to survive. Moreover, Five Below’s debt-free balance sheet, significant free cash flow and attractive long-term prospects continue to make its stock a worthwhile Fund holding in our view.

Floor & Decor is a multi-channel specialty retailer of hard-surface flooring and related accessories. A category-killer within wood and stone floorings, the company is positioned to benefit from housing’s potential to remain a strong contributor to the U.S. economy.

OUTLOOK

The Covid-19 crisis is likely to result in broad changes to society. Existing trends toward telemedicine and online education, for example, are likely to accelerate as technological solutions become accepted as viable replacements for human-to-human contact in a wider range of applications. A long-running investment theme in the Fund has been to seek innovative companies using new technologies to do things better, faster and cheaper. As American life is transformed in the wake of the coronavirus, we think the types of innovative, disruptive companies we look for are likely to lead the way.

Having outpaced our benchmark during the initial phases of the Covid-19 turmoil, we’re acutely aware that the race is never over. In market panics, extreme risk aversion can cause investors to unfairly punish the stocks of companies whose long-term businesses remain strong — but whose near-term prospects are much less certain, or perhaps even quite poor. Such panics sometimes don’t burn themselves out until stocks with some perceived risk are beaten down to the point that they may actually be the least-risky names. To the extent that we believe risk has become mispriced, we’ll continue to seek opportunities to selectively take it on.

Thank you for the opportunity to manage your assets.

 

  

Current and future holdings are subject to risk.

 

 

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WASATCH ULTRA GROWTH FUND (WAMCX / WGMCX) )   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

      SIX MONTHS*      1 YEAR      5 YEARS      10 YEARS

Ultra Growth (WAMCX) — Investor

       -5.11%          -3.89%          11.49%          13.32%

Ultra Growth (WGMCX) — Institutional

       -5.11%          -3.89%          11.49%          13.32%

Russell 2000® Growth Index

       -17.31%          -18.58%          1.70%          8.89%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Ultra Growth Fund are Investor Class: 1.25% / Institutional Class — Gross: 1.10%, Net: 1.06%. The expense ratio shown elsewhere in this report may be different. Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Performance for the Institutional Class prior to 1/31/2020 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2020 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

 

*Not

annualized.

TOP 10 EQUITY HOLDINGS**

 

Company   % of Net
Assets
 
Freshpet, Inc.     3.3%  
Five9, Inc.     2.6%  
Paylocity Holding Corp.     2.4%  
Tandem Diabetes Care, Inc.     2.4%  
Ollie’s Bargain Outlet Holdings, Inc.     2.3%  
Company   % of Net
Assets
 
Monolithic Power Systems, Inc.     2.3%  
HubSpot, Inc.     2.2%  
Proofpoint, Inc.     2.2%  
Exact Sciences Corp.     2.2%  
Grocery Outlet Holding Corp.     2.1%  
 

 

**

As of March 31, 2020, there were 79 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

 

LOGO

 

Excludes securities sold short and options written, if any.

 

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

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WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX)   MARCH 31, 2020 (UNAUDITED)

 

 

Management Discussion

 

The Wasatch-Hoisington U.S. Treasury Fund is sub-advised by Hoisington Investment Management Company.

 

LOGO

 

Van Hoisington

Lead Portfolio Manager

 

LOGO

 

Van R. Hoisington, Jr.

Portfolio Manager

 

LOGO

 

David Hoisington

Portfolio Manager

OVERVIEW

U.S. Treasury bond yields fell sharply during the quarter ended March 31, 2020 after dropping significantly in 2019. The 30-year Treasury bond yield declined to 1.31%, down from 2.388% at the end of 2019. A supply and demand side shock caused by the coronavirus pandemic hit a global economy that had slowed sharply in 2019. An indication of the fragile conditions, world trade volume declined in 2019, only the third annual decrease since 1980. The earlier times were in the recessions of 1982 and 2009. In the midst of widespread declines in economic activity, inflation fell sharply. The poorer growth, falling inflation and uncertain conditions all contributed to the strong rally in the Treasury bond market.

DETAILS OF THE QUARTER

For the three months ended March 31, 2020, the Wasatch-Hoisington U.S. Treasury Fund rose 26.16%. The benchmark Bloomberg Barclays US Aggregate Bond Index posted a far more modest gain of 3.15% over the same period.

OUTLOOK

Major secular forces restraining growth over the past two decades are likely to worsen. The debt overhang will become far greater in the U.S. and for foreign economic powers. Demographic trends, already deteriorating in all these areas, will worsen even further. Based on the pattern during the Spanish flu pandemic of 1918 to 1920, population growth rates are likely to decline in all of these economies, as the coronavirus has engulfed each one. The monetary base is being expanded more sharply than during the U.S. Federal Reserve’s quantitative easing after the global financial crisis of 2008-09. But monetary policy is unlikely to be any more effective.

In view of initial conditions when the virus hit and considering the poorer secular factors, the U.S. economy is facing a deflationary recession. Based on the trends at hand, we expect this downturn will be more severe than the three previous worst post-war recessions of 1973-75, 1981-82 and 2008-09.

This may have a noticeable impact on inflation. Measured from the peak before or during the recession until the cyclical trough, the average decline in the core personal consumption expenditures (PCE) deflator, the Fed’s preferred inflation gauge, was 4.32 percentage points, with a range of minus -1.65 percentage points for the 2008-09 recession to minus -6.96 percentage points for the 1981-82 recession.

One reason for the variability in this range is that highly volatile oil prices rose in two of the recessions and, although energy prices are not measured directly in the core PCE deflator, they have a strong indirect influence. From peak to trough, oil prices declined 49.2% for the 1981-82 recession, but in all three recessions the average price was virtually unchanged. From the cyclical peak to the current level, the decline in oil prices is nearly 72%, unprecedented for a major recession. Extrapolating these trends from previous recessions, the core PCE measure could deflate two to three percentage points and possibly more while the broader PCE measure could contract four percentage points. This means that core PCE could recede to a 1% rate of deflation, with the overall PCE measure deflating at 4% or more.

Once the virus is contained, the output gap, a measure of real gross domestic product (GDP) relative to its potential will be massive both domestically and globally. A recovery in business activity will occur and may appear to be V shaped but will be at a much lower GDP level than the 2019 measure of activity. In other words, the economy will stagger, not march, forward. Five to seven years will likely elapse before the output gap returns to the late 2019 level. This suggests that once the cyclical decline in inflation has occurred, the economy will be mired in a protracted period of mild deflation and that firms with the weakest pricing power will need to try to lower nominal wages, something for which modern business managers have no experience.

Thus, the Treasury yield curve will be anchored close to the zero bound for a very lengthy period. Without the legal and structural impediments to crossing the zero bound, both variables in the Fisher equation (the real rate and inflationary expectations) will tend to push yields toward negative territory.

Thank you for the opportunity to manage your assets.

 

 

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WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX)   MARCH 31, 2020 (UNAUDITED)

 

 

Portfolio Summary

 

AVERAGE ANNUAL TOTAL RETURNS

 

     SIX MONTHS*      1 YEAR      5 YEARS      10 YEARS

U.S. Treasury

      19.58%          40.27%          7.82%          10.45%

Bloomberg Barclays US Aggregate Bond Index

      3.33%          8.93%          3.36%          3.88%

Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit wasatchglobal.com. The Advisor may absorb certain Fund expenses, without which total returns would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2020 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-Hoisington U.S. Treasury Fund are 0.69%. The expense ratio shown elsewhere in this report may be different. See the prospectus for additional information regarding Fund expenses.

Wasatch will deduct a 2.00% redemption fee on Fund shares held 60 days or less. Performance data do not reflect the deduction of fees, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investments in fixed income funds are subject to the same interest rate, inflation, credit and other risks associated with the underlying bonds. Return of principal is not guaranteed.

 

*

Not annualized.

TOP U.S. TREASURY HOLDINGS**

 

Holding   Maturity
Date
    % of Net
Assets
 
U.S. Treasury Bond, 2.250%     8/15/46       25.5%  
U.S. Treasury Strip, principal only     8/15/45       23.2%  
U.S. Treasury Strip, principal only     5/15/44       16.5%  
U.S. Treasury Bond, 3.000%     8/15/48       15.2%  
Holding   Maturity
Date
    % of Net
Assets
 
U.S. Treasury Bond, 2.500%     2/15/45       7.6%  
U.S. Treasury Strip, principal only     8/15/40       6.2%  
U.S. Treasury Bond, 2.250%     8/15/49       2.8%  
U.S. Treasury Bond, 2.875%     5/15/49       1.2%  
 

 

**

As of March 31, 2020, there were 8 holdings in the Fund. Repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

INVESTMENTS & CASH

 

LOGO

 

Also includes Other Assets & Liabilities.

 

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

 

LOGO

Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees.

 

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WASATCH FUNDS MANAGEMENT DISCUSSIONS   MARCH 31, 2020 (UNAUDITED)

 

 

Definitions of Financial Terms

 

Alpha is a risk-adjusted measure of the so-called “excess return” on an investment. It is a common measure of assessing an active manager’s performance as it is the return in excess of a benchmark index or “risk-free” investment. The difference between the fair and actually expected rates of return on a stock is called the stock’s alpha.

CFA® stands for Chartered Financial Analyst and is a trademark owned by the CFA Institute.

The “cloud” is the internet. Cloud-computing is a model for delivering information-technology services in which resources are retrieved from the internet through web-based tools and applications, rather than from a direct connection to a server.

Earnings growth is a measure of growth in a company’s net income over a specific period, often one year.

The Fisher equation in economics estimates the relationship between nominal and real interest rates under inflation. It is named after Irving Fisher, who was renowned for his work on the theory of interest. In economics, this equation is used to predict nominal and real interest rate behavior.

The global financial crisis, also known as the financial crisis of 2008-09 and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.

Gross domestic product (GDP) is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a country in a year.

The monetary base is the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held in the central bank’s reserves. This measure of the money supply typically only includes the most liquid currencies.

The Personal Consumption Expenditures (PCE) Deflator is part of the National Income and Products Accounts developed by the Bureau of Economic Analysis of the U.S. Commerce Department. The PCE Deflator is a variable weighted index and is widely considered to be the most reliable of all the price indexes.

Quantitative easing is a government monetary policy used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Real gross domestic product (GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output.

Return on assets (ROA) measures a company’s profitability by showing how many dollars of earnings a company derives from each dollar of assets it controls.

Return on capital is a measure of how effectively a company uses the money, owned or borrowed, that has been invested in its operations.

Return on equity (ROE) measures a company’s efficiency at generating profits from shareholders’ equity.

Sales growth is the increase in sales over a specified period of time, not necessarily one year.

Valuation is the process of determining the current worth of an asset or company.

The yield curve is a line on a graph that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares three-month, two-year, five-year and 30-year U.S. Treasury securities. This yield curve is used as a benchmark for other interest rates, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth.

INDEX DESCRIPTIONS AND DISCLOSURES

The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, mortgage-backed securities (MBS) (agency fixed-rate and hybrid adjustable-rate mortgage [ARM] pass-throughs), asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) (agency and non-agency).

The MSCI AC (All Country) World Index captures large- and mid-cap representation across 23 developed-market and 26 emerging-market countries.

The MSCI AC (All Country) World ex USA Small Cap Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets, excluding securities of U.S. issuers. This index is a free float-adjusted market capitalization index designed to measure the performance of small-capitalization securities.

The MSCI AC (All Country) World Small Cap Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets. This index is a free float-adjusted market capitalization index designed to measure the performance of small-capitalization securities.

The MSCI EAFE Index is an unmanaged index and includes reinvestment of all dividends of issuers located in 21 developed-market countries, excluding the U.S. and Canada. This index is a free float-adjusted market capitalization index designed to measure the performance of mid-cap and large-cap securities.

The MSCI Emerging Markets Index captures large- and mid-cap representation across 26 emerging-market countries.

The MSCI Emerging Markets Small Cap Index captures small-cap representation across 26 emerging-market countries.

The MSCI Frontier Emerging Markets and MSCI Frontier Markets indexes are free float-adjusted market capitalization indexes designed to measure equity market performance in the global frontier and emerging markets.

The MSCI India Investable Market Index (IMI) covers all investable large-, mid- and small-cap securities across India, targeting approximately 99% of the Indian market’s free-float adjusted market capitalization.

The MSCI World ex USA Index captures large- and mid-cap representation across 22 of 23 developed market countries, excluding the United States.

 

 

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Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

The MSCI World ex USA Small Cap Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed markets, excluding the United States.

Pertaining to the use of MSCI information. Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties or originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com)

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 is widely used in the industry to measure the performance of small-company stocks.

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 Value Index measures the performance of Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values.

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

Pertaining to the use of Russell information. All rights in the Russell 2000, Russell 2000 Growth, Russell 2000 Value and Russell Microcap vest in the relevant London Stock Exchange Group plc (collectively, the “LSE Group”), which owns these indexes. Russell® is a trademark 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 any Wasatch portfolio. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from any Wasatch portfolio or the suitability of these indexes for the purpose to which they are being put by Wasatch Global Investors.

You cannot invest directly in these or any indexes.

 

 

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WASATCH FUNDS  

 

 

Operating Expenses (UNAUDITED)

 

EXPENSE EXAMPLE

As a shareholder of Wasatch Funds, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Wasatch Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000.00 invested at the beginning of the period and held for the entire six-month period ended March 31, 2020.

ACTUAL EXPENSES

The first line of the table on the next page provides information about actual account values and actual expenses, based upon the actual total return of the fund during the most recent six-month period ended March 31, 2020. You may use the information in this line, together with the amount you invested, to estimate the expenses you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

In addition, the Funds charge a $12.50 IRA annual maintenance fee and a $15.00 fee for redemptions paid by wire. To the extent these fees apply to your account, your expenses paid during the period would be higher and your ending account value would be lower than the amounts shown in the table on the next page.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line of the table on the next page provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and

an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Wasatch Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

In addition, the Funds charge a $12.50 IRA annual maintenance fee and a $15.00 fee for redemptions paid by wire. To the extent these fees apply to your account, your expenses paid during the period would be higher and your ending account value would be lower than the amounts shown in the table on the next page. If another fund’s fees differ from those listed above, your expenses paid and your ending account value could be higher or lower than those of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

A Fund’s annualized expense ratio may vary as a result of various factors including expenses that are not reimbursable under the contractual agreement between the Fund and the Advisor such as interest, taxes, brokerage commissions, other investment related costs, dividend expense on short sales, and extraordinary expenses.

 

 

40


Table of Contents

 

  MARCH 31, 2020 (UNAUDITED)

 

 

 

    Account Value   

Expenses

Paid
During Period*

  

Annualized

Expense
Ratio*

Fund/Class and Return   Beginning of Period
October 1, 2019
   End of Period
March 31, 2020

Core Growth Fund — Investor Class

                  

Actual

      $1,000.00        $827.40        $5.39        1.18%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.10        $5.96        1.18%

Core Growth Fund — Institutional Class

                  

Actual

      $1,000.00        $827.80        $4.80        1.05%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.75        $5.30        1.05%

Emerging India Fund — Investor Class

                  

Actual

      $1,000.00        $760.10        $7.08        1.61%

Hypothetical (5% before expenses)

      $1,000.00        $1,016.95        $8.12        1.61%

Emerging India Fund — Institutional Class

                  

Actual

      $1,000.00        $761.80        $6.34        1.44%

Hypothetical (5% before expenses)

      $1,000.00        $1,017.80        $7.26        1.44%

Emerging Markets Select Fund — Investor Class

                  

Actual

      $1,000.00        $846.30        $6.97        1.51%

Hypothetical (5% before expenses)

      $1,000.00        $1,017.45        $7.62        1.51%

Emerging Markets Select Fund — Institutional Class

                  

Actual

      $1,000.00        $847.40        $5.59        1.21%

Hypothetical (5% before expenses)

      $1,000.00        $1,018.95        $6.11        1.21%

Emerging Markets Small Cap Fund — Investor Class

                  

Actual

      $1,000.00        $850.30        $9.07        1.96%

Hypothetical (5% before expenses)

      $1,000.00        $1,015.20        $9.87        1.96%

Emerging Markets Small Cap Fund — Institutional Class

                  

Actual

      $1,000.00        $854.70        $8.39        1.81%

Hypothetical (5% before expenses)

      $1,000.00        $1,015.95        $9.12        1.81%

Frontier Emerging Small Countries Fund — Investor Class

                  

Actual

      $1,000.00        $755.50        $9.44        2.15%

Hypothetical (5% before expenses)

      $1,000.00        $1,014.25        $10.83        2.15%

Frontier Emerging Small Countries Fund —Institutional Class

                  

Actual

      $1,000.00        $757.20        $8.57        1.95%

Hypothetical (5% before expenses)

      $1,000.00        $1,015.25        $9.82        1.95%

Global Opportunities Fund — Investor Class

                  

Actual

      $1,000.00        $820.30        $6.96        1.53%

Hypothetical (5% before expenses)

      $1,000.00        $1,017.35        $7.72        1.53%

Global Opportunities Fund — Institutional Class

                  

Actual

      $1,000.00        $818.50        $6.18        1.36%

Hypothetical (5% before expenses)

      $1,000.00        $1,018.20        $6.86        1.36%

Global Select Fund — Investor Class

                  

Actual

      $1,000.00        $899.00        $6.41        1.35%

Hypothetical (5% before expenses)

      $1,000.00        $1,018.25        $6.81        1.35%

Global Select Fund — Institutional Class

                  

Actual

      $1,000.00        $901.00        $4.51        0.95%

Hypothetical (5% before expenses)

      $1,000.00        $1,020.25        $4.80        0.95%

Global Value Fund — Investor Class

                  

Actual

      $1,000.00        $760.70        $4.84        1.10%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.50        $5.55        1.10%

Global Value Fund — Institutional Class

                  

Actual

      $1,000.00        $760.90        $4.18        0.95%

Hypothetical (5% before expenses)

      $1,000.00        $1,020.25        $4.80        0.95%

International Growth Fund — Investor Class

                  

Actual

      $1,000.00        $876.70        $6.85        1.46%

Hypothetical (5% before expenses)

      $1,000.00        $1,017.70        $7.36        1.46%

International Growth Fund — Institutional Class

                  

Actual

      $1,000.00        $877.10        $6.34        1.35%

Hypothetical (5% before expenses)

      $1,000.00        $1,018.25        $6.81        1.35%

 

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WASATCH FUNDS   MARCH 31, 2020 (UNAUDITED)

 

 

Operating Expenses (continued)

 

    Account Value   

Expenses

Paid
During Period*

  

Annualized

Expense
Ratio*

Fund/Class and Return   Beginning of Period
October 1, 2019
   End of Period
March 31, 2020

International Opportunities Fund — Investor Class

                  

Actual

      $1,000.00        $876.60        $9.52        2.03%

Hypothetical (5% before expenses)

      $1,000.00        $1,014.85        $10.23        2.03%

International Opportunities Fund — Institutional Class

                  

Actual

      $1,000.00        $878.00        $9.06        1.93%

Hypothetical (5% before expenses)

      $1,000.00        $1,015.35        $9.72        1.93%

International Select Fund — Investor Class

                  

Actual

      $1,000.00        $947.00        $6.38        1.31%

Hypothetical (5% before expenses)

      $1,000.00        $1,018.45        $6.61        1.31%

International Select Fund — Institutional Class

                  

Actual

      $1,000.00        $952.00        $4.49        0.92%

Hypothetical (5% before expenses)

      $1,000.00        $1,020.40        $4.65        0.92%

Micro Cap Fund — Investor Class

                  

Actual

      $1,000.00        $859.90        $7.63        1.64%

Hypothetical (5% before expenses)

      $1,000.00        $1,016.80        $8.27        1.64%

Micro Cap Fund — Institutional Class

                  

Actual

      $1,000.00        $740.30        $2.25        1.58%

Hypothetical (5% before expenses)

      $1,000.00        $1,005.61        $2.60        1.58%

Micro Cap Value Fund — Investor Class

                  

Actual

      $1,000.00        $796.00        $7.77        1.73%

Hypothetical (5% before expenses)

      $1,000.00        $1,016.35        $8.72        1.73%

Micro Cap Value Fund — Institutional Class

                  

Actual

      $1,000.00        $717.80        $2.25        1.60%

Hypothetical (5% before expenses)

      $1,000.00        $1,005.57        $2.63        1.60%

Small Cap Growth Fund — Investor Class

                  

Actual

      $1,000.00        $855.20        $5.43        1.17%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.15        $5.91        1.17%

Small Cap Growth Fund — Institutional Class

                  

Actual

      $1,000.00        $855.80        $4.87        1.05%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.75        $5.30        1.05%

Small Cap Value Fund — Investor Class

                  

Actual

      $1,000.00        $676.20        $4.99        1.19%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.05        $6.01        1.19%

Small Cap Value Fund — Institutional Class

                  

Actual

      $1,000.00        $677.20        $4.40        1.05%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.75        $5.30        1.05%

Ultra Growth Fund — Investor Class

                  

Actual

      $1,000.00        $948.90        $5.85        1.20%

Hypothetical (5% before expenses)

      $1,000.00        $1,019.00        $6.06        1.20%

Ultra Growth Fund — Institutional Class

                  

Actual

      $1,000.00        $800.60        $1.55        1.05%

Hypothetical (5% before expenses)

      $1,000.00        $1,006.48        $1.73        1.05%

U.S. Treasury Fund

                  

Actual

      $1,000.00        $1,195.80        $3.62        0.66%

Hypothetical (5% before expenses)

      $1,000.00        $1,025.00        $3.34        0.66%

*Expenses are equal to a fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the full fiscal year (183/366), except for the Institutional Class of the Micro Cap Fund, Micro Cap Value Fund and Ultra Growth Fund, which have 60 days in the most recent fiscal period due to their inception date of January 31, 2020.

 

42


Table of Contents

 

WASATCH CORE GROWTH FUND (WGROX / WIGRX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 99.1%  
  Airlines 1.3%  
  290,891     Allegiant Travel Co.   $ 23,794,884  
   

 

 

 
  Application Software 16.4%  
  309,573     Avalara, Inc.*     23,094,146  
  361,383     DocuSign, Inc.*     33,391,789  
  681,391     Five9, Inc.*     52,099,156  
  414,871     Guidewire Software, Inc.*     32,903,419  
  1,401,108     Medallia, Inc.*     28,078,204  
  526,548     Paylocity Holding Corp.*     46,504,719  
  466,850     Q2 Holdings, Inc.*     27,572,161  
  219,030     Tyler Technologies, Inc.*     64,955,537  
   

 

 

 
    308,599,131  
   

 

 

 
  Asset Management & Custody Banks 4.7%  
  896,041     Cohen & Steers, Inc.     40,725,063  
  852,335     Hamilton Lane, Inc., Class A     47,142,649  
   

 

 

 
    87,867,712  
   

 

 

 
  Automotive Retail 2.6%  
  1,375,149     Camping World Holdings, Inc., Class A     7,824,598  
  944,095     Monro, Inc.     41,360,802  
   

 

 

 
    49,185,400  
   

 

 

 
  Biotechnology 0.9%  
  245,875     Ligand Pharmaceuticals, Inc.*     17,880,030  
   

 

 

 
  Building Products 3.5%  
  833,330     Trex Co., Inc.*     66,783,066  
   

 

 

 
  Commercial Printing 1.2%  
  416,264     Cimpress plc*     22,145,245  
   

 

 

 
  Commodity Chemicals 1.6%  
  2,332,692     Valvoline, Inc.     30,534,938  
   

 

 

 
  Data Processing & Outsourced Services 2.6%  
  571,161     Euronet Worldwide, Inc.*     48,959,921  
   

 

 

 
  Distributors 3.3%  
  313,505     Pool Corp.     61,688,379  
   

 

 

 
  Diversified Banks 0.8%  
  9,399,239     City Union Bank Ltd. (India)     16,017,559  
   

 

 

 
  Electronic Equipment & Instruments 2.0%  
  464,503     Novanta, Inc.*     37,104,500  
   

 

 

 
  Electronic Manufacturing Services 2.6%  
  890,409     Fabrinet*     48,580,715  
   

 

 

 
  General Merchandise Stores 2.1%  
  836,832     Ollie’s Bargain Outlet Holdings, Inc.*     38,778,795  
   

 

 

 
  Health Care Equipment 0.6%  
  337,951     Cantel Medical Corp.     12,132,441  
   

 

 

 
  Health Care Facilities 3.3%  
  1,150,917     Ensign Group, Inc. (The)     43,285,988  
  646,000     Pennant Group, Inc. (The)*     9,147,360  
  136,110     U.S. Physical Therapy, Inc.     9,391,590  
   

 

 

 
    61,824,938  
   

 

 

 
  Health Care Supplies 2.2%  
  619,118     Neogen Corp.*     41,474,715  
   

 

 

 
  Home Improvement Retail 1.1%  
  624,656     Floor & Decor Holdings, Inc., Class A*     20,045,211  
   

 

 

 
Shares          Value  
             
  Industrial Machinery 9.7%  
  1,339,637     Altra Industrial Motion Corp.   $ 23,430,251  
  1,151,994     Barnes Group, Inc.     48,187,909  
  764,751     Helios Technologies, Inc.     28,999,358  
  433,822     Kadant, Inc.     32,384,812  
  443,809     RBC Bearings, Inc.*     50,057,217  
   

 

 

 
    183,059,547  
   

 

 

 
  Industrial REITs 2.2%  
  3,524,702     Monmouth Real Estate Investment Corp.     42,472,659  
   

 

 

 
  IT Consulting & Other Services 2.0%  
  201,365     EPAM Systems, Inc.*     37,385,426  
   

 

 

 
  Leisure Facilities 2.0%  
  793,645     Planet Fitness, Inc., Class A*     38,650,512  
   

 

 

 
  Life Sciences Tools & Services 5.6%  
  476,331     ICON plc* (Ireland)     64,781,016  
  554,938     Medpace Holdings, Inc.*     40,721,350  
   

 

 

 
    105,502,366  
   

 

 

 
  Managed Health Care 1.6%  
  612,041     HealthEquity, Inc.*     30,963,154  
   

 

 

 
  Regional Banks 3.0%  
  568,515     Bank OZK     9,494,201  
  888,762     Eagle Bancorp, Inc.     26,849,500  
  855,539     Webster Financial Corp.     19,591,843  
   

 

 

 
    55,935,544  
   

 

 

 
  Research & Consulting Services 1.7%  
  1,567,060     Clarivate Analytics plc*     32,516,495  
   

 

 

 
  Semiconductors 2.7%  
  304,138     Monolithic Power Systems, Inc.     50,930,949  
   

 

 

 
  Specialized REITs 2.4%  
  1,518,644     National Storage Affiliates Trust     44,951,862  
   

 

 

 
  Specialty Chemicals 2.8%  
  526,660     Balchem Corp.     51,991,875  
   

 

 

 
  Specialty Stores 3.0%  
  495,790     Five Below, Inc.*     34,893,700  
  1,113,483     National Vision Holdings, Inc.*     21,623,840  
   

 

 

 
    56,517,540  
   

 

 

 
  Systems Software 4.8%  
  438,772     CyberArk Software Ltd.* (Israel)     37,541,332  
  523,240     Proofpoint, Inc.*     53,679,192  
   

 

 

 
    91,220,524  
   

 

 

 
  Trading Companies & Distributors 1.3%  
  328,403     SiteOne Landscape Supply, Inc.*     24,177,029  
   

 

 

 
  Trucking 1.5%  
  222,714     Old Dominion Freight Line, Inc.     29,233,440  
   

 

 

 
  Total Common Stocks
(cost $1,714,731,544)
  $  1,868,906,502  
   

 

 

 
 

 

43


Table of Contents
WASATCH CORE GROWTH FUND (WGROX / WIGRX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments (continued)

 

Principal

Amount

         Value  
             
  SHORT-TERM INVESTMENTS 0.9%  
  Repurchase Agreement 0.9%  
  $16,332,508     Repurchase Agreement dated 3/31/20,
0.00% due 4/1/20 with Fixed Income
Clearing Corp. collateralized by $16,050,000 of United States Treasury Notes 1.750% due 7/15/22; value: $16,663,608; repurchase proceeds: $16,332,508 (cost $16,332,508)
  $ 16,332,508  
   

 

 

 
  Total Short-Term Investments
(cost $16,332,508)
    16,332,508  
   

 

 

 
  Total Investments
(cost $1,731,064,052) 100.0%§
    1,885,239,010  
  Other Assets less Liabilities <0.1%     426,456  
   

 

 

 
  NET ASSETS 100.0%   $ 1,885,665,466  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 0.85%.

 

REIT Real Estate Investment Trust.

 

See Notes to Financial Statements.

 

 

 

 

 

At March 31, 2020, Wasatch Core Growth Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

India

      0.8

Ireland

      3.5

Israel

      2.0

United States

      93.7
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

44


Table of Contents

 

WASATCH EMERGING INDIA FUND (WAINX / WIINX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 103.2%  
  Apparel, Accessories & Luxury Goods 3.2%  
  29,042     Page Industries Ltd. (India)   $ 6,425,733  
   

 

 

 
  Auto Parts & Equipment 1.3%  
  300,000     Endurance Technologies Ltd. (India)     2,391,341  
  409,520     Minda Corp. Ltd. (India)     312,162  
   

 

 

 
    2,703,503  
   

 

 

 
  Brewers 2.7%  
  450,196     United Breweries Ltd. (India)     5,447,869  
   

 

 

 
  Commodity Chemicals 6.2%  
  1,537,566     Berger Paints India Ltd. (India)     10,045,472  
  365,334     Gulf Oil Lubricants India Ltd. (India)     2,525,664  
   

 

 

 
    12,571,136  
   

 

 

 
  Consumer Finance 7.7%  
  418,574     Bajaj Finance Ltd. (India)     12,225,400  
  394,808     SBI Cards & Payment Services Ltd.* *** † §§ (India)     3,227,300  
   

 

 

 
    15,452,700  
   

 

 

 
  Department Stores 2.6%  
  807,809     Trent Ltd. (India)     5,157,155  
   

 

 

 
  Diversified Banks 10.3%  
  1,518,459     City Union Bank Ltd. (India)     2,587,657  
  860,384     HDFC Bank Ltd. (India)     9,760,117  
  493,997     Kotak Mahindra Bank Ltd. (India)     8,372,736  
   

 

 

 
    20,720,510  
   

 

 

 
  Diversified Chemicals 5.9%  
  659,676     Pidilite Industries Ltd. (India)     11,811,636  
   

 

 

 
  Financial Exchanges & Data 2.7%  
  326,231     CRISIL Ltd. (India)     5,404,432  
   

 

 

 
  Health Care Services 6.1%  
  669,512     Dr. Lal PathLabs Ltd. (India)     12,325,421  
   

 

 

 
  Hotels, Resorts & Cruise Lines 0.4%  
  2,606,139     Lemon Tree Hotels Ltd.* (India)     766,499  
   

 

 

 
  Industrial Conglomerates 3.0%  
  23,780     3M India Ltd.* (India)     5,953,973  
   

 

 

 
  Industrial Machinery 2.1%  
  2,843,085     Elgi Equipments Ltd. (India)     4,206,075  
   

 

 

 
  Interactive Media & Services 4.2%  
  313,069     Info Edge India Ltd. (India)     8,529,606  
   

 

 

 
  Internet & Direct Marketing
Retail 1.8%
 
  311,126     MakeMyTrip Ltd.* (India)     3,719,511  
   

 

 

 
  IT Consulting & Other Services 8.1%  
  356,238     Larsen & Toubro Infotech Ltd. (India)     6,743,214  
  885,338     Mindtree Ltd. (India)     9,537,853  
   

 

 

 
    16,281,067  
   

 

 

 
  Life & Health Insurance 2.4%  
  1,031,715     ICICI Prudential Life Insurance Co. Ltd. (India)     4,812,687  
   

 

 

 
Shares          Value  
             
  Life Sciences Tools & Services 6.5%  
  501,652     Divi’s Laboratories Ltd. (India)   $ 13,016,084  
   

 

 

 
  Packaged Foods & Meats 5.0%  
  284,101     Britannia Industries Ltd. (India)     10,041,346  
   

 

 

 
  Personal Products 1.5%  
  21,811     Procter & Gamble Hygiene & Health Care Ltd. (India)     2,959,115  
   

 

 

 
  Pharmaceuticals 0.7%  
  311,451     Amrutanjan Health Care Ltd. (India)     1,358,229  
   

 

 

 
  Property & Casualty Insurance 5.9%  
  812,230     ICICI Lombard General Insurance Co. Ltd. (India)     11,800,329  
   

 

 

 
  Regional Banks 4.8%  
  1,425,060     AU Small Finance Bank Ltd. (India)     9,739,514  
   

 

 

 
  Specialty Chemicals 2.5%  
  234,115     Asian Paints Ltd. (India)     5,124,508  
   

 

 

 
  Thrifts & Mortgage Finance 5.6%  
  416,799     Aavas Financiers Ltd.* (India)     6,736,551  
  210,471     Housing Development Finance Corp. Ltd. (India)     4,520,347  
   

 

 

 
    11,256,898  
  Total Common Stocks
(cost $208,838,307)
    207,585,536  
   

 

 

 
  Total Investments
(cost $208,838,307) 103.2%§
    207,585,536  
  Liabilities less Other Assets (3.2%)     (6,436,412
   

 

 

 
  NET ASSETS 100.0%   $ 201,149,124  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). The aggregate value of securities purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 at March 31, 2020, amounted to approximately $3,227,300, and represented 1.60% of net assets.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 93.37%.

 

§§The aggregate value of illiquid holdings at March 31, 2020, amounted to approximately $3,227,300 and represented 1.60% of net assets.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

At March 31, 2020, Wasatch Emerging India Fund’s investments, were in the following countries:

 

Country   %

India

      100.0
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

45


Table of Contents

 

WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 95.5%  
  Airport Services 1.3%  
  85,926     Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B (Mexico)   $ 464,574  
   

 

 

 
  Apparel, Accessories & Luxury Goods 1.7%  
  2,871     Page Industries Ltd. (India)     635,228  
   

 

 

 
  Application Software 3.9%  
  16,240     Globant S.A.* (Argentina)     1,427,171  
   

 

 

 
  Biotechnology 1.7%  
  3,965     Medytox, Inc. (South Korea)     630,788  
   

 

 

 
  Consumer Finance 4.4%  
  55,987     Bajaj Finance Ltd. (India)     1,635,227  
   

 

 

 
  Diversified Banks 8.0%  
  120,868     HDFC Bank Ltd. (India)     1,371,115  
  567,364     PT Bank Central Asia Tbk (Indonesia)     955,962  
  51,382     TCS Group Holding plc GDR (Russia)     593,976  
   

 

 

 
    2,921,053  
   

 

 

 
  Diversified Chemicals 1.8%  
  37,930     Pidilite Industries Ltd. (India)     679,144  
   

 

 

 
  Drug Retail 4.2%  
  78,766     Raia Drogasil S.A. (Brazil)     1,543,911  
   

 

 

 
  Electrical Components & Equipment 6.7%  
  48,056     Amara Raja Batteries Ltd. (India)     301,852  
  59,661     Voltronic Power Technology Corp. (Taiwan)     1,239,864  
  139,701     WEG S.A. (Brazil)     902,554  
   

 

 

 
    2,444,270  
   

 

 

 
  Health Care Equipment 3.2%  
  518,339     Microport Scientific Corp. (Hong Kong)     1,159,472  
   

 

 

 
  Human Resource & Employment Services 2.6%  
  15,427     51job, Inc. ADR* (China)     947,063  
   

 

 

 
  Industrial Machinery 2.4%  
  139,000     Techtronic Industries Co. Ltd. (Hong Kong)     882,637  
   

 

 

 
  Interactive Media & Services 3.3%  
  24,425     Tencent Holdings Ltd. (China)     1,207,269  
   

 

 

 
  Internet & Direct Marketing Retail 12.1%  
  5,304     Alibaba Group Holding Ltd. ADR* (China)     1,031,522  
  31,797     MakeMyTrip Ltd.* (India)     380,133  
  4,234     MercadoLibre, Inc.*     2,068,648  
  40,408     Trip.com Group Ltd. ADR* (China)     947,567  
   

 

 

 
    4,427,870  
   

 

 

 
  IT Consulting & Other Services 2.8%  
  53,591     Larsen & Toubro Infotech Ltd. (India)     1,014,422  
   

 

 

 
  Life & Health Insurance 2.4%  
  110,272     Discovery Ltd. (South Africa)     480,831  
  85,892     ICICI Prudential Life Insurance Co. Ltd. (India)     400,664  
   

 

 

 
    881,495  
   

 

 

 
  Life Sciences Tools & Services 2.4%  
  69,500     Wuxi Biologics Cayman, Inc.* (China)     887,295  
   

 

 

 
  Managed Health Care 0.8%  
  38,000     Hapvida Participacoes e Investimentos S.A. (Brazil)     310,079  
   

 

 

 
Shares          Value  
             
  Packaged Foods & Meats 5.9%  
  23,851     Britannia Industries Ltd. (India)   $ 842,997  
  435,393     Vitasoy International Holdings Ltd. (Hong Kong)     1,310,265  
   

 

 

 
    2,153,262  
   

 

 

 
  Personal Products 2.0%  
  798     LG Household & Health Care Ltd. (South Korea)     730,958  
   

 

 

 
  Pharmaceuticals 2.1%  
  59,700     Jiangsu Hengrui Medicine Co. Ltd., Class A* (China)     766,329  
   

 

 

 
  Property & Casualty Insurance 3.7%  
  90,201     ICICI Lombard General Insurance Co. Ltd. (India)     1,310,468  
  21,618     Qualitas Controladora S.A.B. de C.V. (Mexico)     55,260  
   

 

 

 
    1,365,728  
   

 

 

 
  Regional Banks 0.9%  
  49,022     AU Small Finance Bank Ltd. (India)     335,039  
   

 

 

 
  Semiconductors 10.1%  
  34,297     ASPEED Technology, Inc. (Taiwan)     1,168,317  
  77,959     Silergy Corp. (Taiwan)     2,528,654  
   

 

 

 
    3,696,971  
   

 

 

 
  Specialized Finance 1.0%  
  117,000     Chailease Holding Co. Ltd. (Taiwan)     352,396  
   

 

 

 
  Specialty Chemicals 3.2%  
  53,760     Asian Paints Ltd. (India)     1,176,745  
   

 

 

 
  Thrifts & Mortgage Finance 0.9%  
  20,124     Aavas Financiers Ltd.* (India)     325,256  
   

 

 

 
  Total Common Stocks
(cost $32,165,015)
    35,001,652  
   

 

 

 
  PREFERRED STOCKS 1.9%  
  Diversified Banks 1.9%  
  94,031     Banco Davivienda S.A., 2.90% (Colombia)     706,043  
   

 

 

 
  Total Preferred Stocks
(cost $886,979)
    706,043  
   

 

 

 
  Total Investments
(cost $33,051,994) 97.4%§
    35,707,695  
  Other Assets less Liabilities 2.6%     965,031  
   

 

 

 
  NET ASSETS 100.0%   $ 36,672,726  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 66.34%.

 

ADR American Depositary Receipt.

 

GDR Global Depositary Receipt.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

46


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  MARCH 31, 2020 (UNAUDITED)

 

 

 

At March 31, 2020, Wasatch Emerging Markets Select Fund’s investments, were in the following countries:

 

Country   % of Net
Assets

Argentina

      4.0

Brazil

      7.7

China

      16.2

Colombia

      2.0

Hong Kong

      9.4

India

      29.1

Indonesia

      2.7

Mexico

      1.5

Russia

      1.7

South Africa

      1.3

South Korea

      3.8

Taiwan

      14.8

United States

      5.8
   

 

 

 

TOTAL

      100.0 %
   

 

 

 

 

47


Table of Contents

 

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 97.2%  
  Airport Services 1.6%  
  1,374,525     Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Mexico)   $ 4,651,570  
   

 

 

 
  Application Software 3.3%  
  106,207     Globant S.A.* (Argentina)     9,333,471  
   

 

 

 
  Biotechnology 1.6%  
  27,826     Medytox, Inc. (South Korea)     4,426,809  
   

 

 

 
  Commodity Chemicals 4.3%  
  1,497,470     Berger Paints India Ltd. (India)     9,783,510  
  2,339,813     TOA Paint Thailand Public Co. Ltd. (Thailand)     2,245,878  
   

 

 

 
    12,029,388  
   

 

 

 
  Consumer Finance 6.0%  
  265,148     Bajaj Finance Ltd. (India)     7,744,247  
  2,110,475     Muangthai Capital Public Co. Ltd. (Thailand)     2,250,830  
  2,414,829     Srisawad Corp. Public Co. Ltd., Class A (Thailand)     3,127,302  
  4,601,345     Unifin Financiera S.A.B de C.V. (Mexico)     3,658,188  
   

 

 

 
    16,780,567  
   

 

 

 
  Department Stores 1.2%  
  233,946     Poya International Co. Ltd. (Taiwan)     3,312,728  
   

 

 

 
  Distillers & Vintners 1.3%  
  608,057     Sichuan Swellfun Co. Ltd., Class A (China)     3,664,302  
   

 

 

 
  Diversified Banks 2.7%  
  1,704,936     City Union Bank Ltd. (India)     2,905,439  
  408,104     TCS Group Holding plc GDR (Russia)     4,717,682  
   

 

 

 
    7,623,121  
   

 

 

 
  Diversified Chemicals 2.1%  
  322,860     Pidilite Industries Ltd. (India)     5,780,875  
   

 

 

 
  Drug Retail 6.4%  
  481,648     Clicks Group Ltd. (South Africa)     6,942,230  
  559,110     Raia Drogasil S.A. (Brazil)     10,959,249  
   

 

 

 
    17,901,479  
   

 

 

 
  Electrical Components &
Equipment 5.6%
 
  395,965     Amara Raja Batteries Ltd. (India)     2,487,155  
  642,694     Voltronic Power Technology Corp. (Taiwan)     13,356,351  
   

 

 

 
    15,843,506  
   

 

 

 
  Electronic Equipment &
Instruments 1.6%
 
  1,096,616     Chroma ATE, Inc. (Taiwan)     4,470,222  
   

 

 

 
  General Merchandise Stores 3.4%  
  1,288,666     Magazine Luiza S.A. (Brazil)     9,669,769  
   

 

 

 
  Health Care Equipment 2.6%  
  3,233,076     Microport Scientific Corp. (Hong Kong)     7,232,062  
   

 

 

 
  Health Care Facilities 1.7%  
  16,606,200     Cleopatra Hospital* (Egypt)     4,853,146  
   

 

 

 
  Health Care Services 3.3%  
  500,992     Dr. Lal PathLabs Ltd. (India)     9,223,042  
   

 

 

 
  Highways & Railtracks 1.0%  
  4,537,437     Yuexiu Transport Infrastructure Ltd. (China)     2,746,002  
   

 

 

 
  Home Improvement Retail 1.2%  
  41,666,224     PT Ace Hardware Indonesia Tbk (Indonesia)     3,314,948  
   

 

 

 
Shares          Value  
             
  Hotels, Resorts & Cruise Lines 1.5%  
  148,730     Huazhu Group Ltd. ADR (China)   $ 4,273,013  
   

 

 

 
  Human Resource & Employment
Services 2.6%
 
  120,668     51job, Inc. ADR* (China)     7,407,808  
   

 

 

 
  Industrial Conglomerates 2.0%  
  22,180     3M India Ltd.* (India)     5,553,369  
   

 

 

 
  Industrial Machinery 1.4%  
  265,583     Airtac International Group (Taiwan)     3,916,097  
   

 

 

 
  Insurance Brokers 1.3%  
  1,773,285     TQM Corp. Public Co. Ltd. (Thailand)     3,633,836  
   

 

 

 
  Interactive Media & Services 2.4%  
  250,874     Info Edge India Ltd. (India)     6,835,095  
   

 

 

 
  Internet & Direct Marketing
Retail 0.8%
 
  183,648     MakeMyTrip Ltd.* (India)     2,195,512  
   

 

 

 
  IT Consulting & Other Services 3.8%  
  305,856     Larsen & Toubro Infotech Ltd. (India)     5,789,535  
  445,179     Mindtree Ltd. (India)     4,795,967  
   

 

 

 
    10,585,502  
   

 

 

 
  Life & Health Insurance 0.3%  
  191,272     Discovery Ltd. (South Africa)     834,023  
   

 

 

 
  Packaged Foods & Meats 4.6%  
  135,161     Britannia Industries Ltd. (India)     4,777,169  
  2,687,755     Vitasoy International Holdings Ltd. (Hong Kong)     8,088,490  
   

 

 

 
    12,865,659  
   

 

 

 
  Pharmaceuticals 0.0%  
  13,017,213     China Animal Healthcare Ltd.* *** §§ (China)     16,790  
   

 

 

 
  Property & Casualty Insurance 4.8%  
  631,929     ICICI Lombard General Insurance Co. Ltd. (India)     9,180,861  
  1,645,684     Qualitas Controladora S.A.B. de C.V. (Mexico)     4,206,735  
   

 

 

 
    13,387,596  
   

 

 

 
  Regional Banks 4.2%  
  1,122,259     AU Small Finance Bank Ltd. (India)     7,670,033  
  15,551,200     PT Bank Tabungan Pensiunan Nasional Syariah Tbk* (Indonesia)     2,024,552  
  782,362     Regional S.A.B. de C.V. (Mexico)     2,057,936  
   

 

 

 
    11,752,521  
   

 

 

 
  Semiconductors 13.4%  
  253,374     ASPEED Technology, Inc. (Taiwan)     8,631,111  
  98,262     LEENO Industrial, Inc. (South Korea)     5,994,845  
  174,735     Parade Technologies Ltd. (Taiwan)     3,693,149  
  487,126     Silergy Corp. (Taiwan)     15,800,267  
  408,000     Win Semiconductors Corp. (Taiwan)     3,501,555  
   

 

 

 
    37,620,927  
   

 

 

 
  Systems Software 2.1%  
  88,249     Douzone Bizon Co. Ltd. (South Korea)     5,823,707  
   

 

 

 
  Thrifts & Mortgage Finance 1.1%  
  195,327     Aavas Financiers Ltd.* (India)     3,156,990  
   

 

 

 
  Total Common Stocks
(cost $220,560,491)
    272,715,452  
   

 

 

 
 

 

48


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

Shares          Value  
             
  PREFERRED STOCKS 2.0%  
  Personal Products 2.0%  
  10,702     LG Household & Health Care Ltd., 1.74% (South Korea)   $ 5,579,388  
   

 

 

 
  Total Preferred Stocks
(cost $5,002,852)
    5,579,388  
   

 

 

 

Principal

Amount

         Value  
             
  SHORT-TERM INVESTMENTS 0.5%  
  Repurchase Agreement 0.5%  
  $1,507,568     Repurchase Agreement dated 3/31/20,
0.00% due 4/1/20 with Fixed Income
Clearing Corp. collateralized by $1,485,000
of United States Treasury Notes 1.750%
due 7/15/22; value: $1,541,773; repurchase
proceeds: $1,507,568 (cost $1,507,568)
  $ 1,507,568  
   

 

 

 
  Total Short-Term Investments
(cost $1,507,568)
    1,507,568  
   

 

 

 
  Total Investments
(cost $227,070,911) 99.7%§
    279,802,408  
  Other Assets less Liabilities 0.3%     946,651  
   

 

 

 
  NET ASSETS 100.0%   $ 280,749,059  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 69.19%.

 

§§The aggregate value of illiquid holdings at March 31, 2020, amounted to approximately $16,790, and represented 0.01% of net assets.

 

ADR American Depositary Receipt.

 

GDR Global Depositary Receipt.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

At March 31, 2020, Wasatch Emerging Markets Small Cap Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      3.4

Brazil

      7.4

China

      6.5

Egypt

      1.7

Hong Kong

      5.5

India

      31.6

Indonesia

      1.9

Mexico

      5.2

Russia

      1.7

South Africa

      2.8

South Korea

      7.8

Taiwan

      20.4

Thailand

      4.1
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

49


Table of Contents

 

WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND (WAFMX / WIFMX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 95.4%  
  Airport Services 1.7%  
  197,400     Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Mexico)   $ 668,027  
   

 

 

 
  Application Software 4.3%  
  19,712     Globant S.A.* (Argentina)     1,732,291  
   

 

 

 
  Asset Management & Custody Banks 2.2%  
  4,471,368     Vostok Emerging Finance Ltd.* (Sweden)     888,559  
   

 

 

 
  Brewers 1.0%  
  79,780     Saigon Beer Alcohol Beverage Corp. (Vietnam)     413,628  
   

 

 

 
  Consumer Finance 6.9%  
  289,466     ASA International Group plc (United Kingdom)     341,569  
  483,039     Delta Brac Housing Finance Corp. Ltd. (Bangladesh)     515,636  
  240,400     Muangthai Capital Public Company Ltd. (Thailand)     256,388  
  39,681     Spandana Sphoorty Financial Ltd.* (India)     316,235  
  460,100     Srisawad Corp. Public Company Ltd. Class A (Thailand)     595,848  
  894,920     Unifin Financiera S.A.B de C.V. (Mexico)     711,485  
   

 

 

 
    2,737,161  
   

 

 

 
  Data Processing & Outsourced Services 1.6%  
  132,674     Network International Holdings plc* (United Kingdom)     645,116  
   

 

 

 
  Diversified Banks 14.2%  
  356,510     Bank for Foreign Trade of Vietnam JSC (Vietnam)     924,099  
  422,538     Commercial International Bank S.A.E* (Egypt)     1,559,825  
  1,583     Credicorp Ltd. (Peru)     226,480  
  1,643,000     Equity Group Holdings plc (Kenya)     530,984  
  825,600     PT Bank Central Asia Tbk (Indonesia)     1,391,068  
  91,448     TCS Group Holding plc GDR (Russia)     1,057,139  
   

 

 

 
    5,689,595  
   

 

 

 
  Drug Retail 8.4%  
  77,213     Clicks Group Ltd. (South Africa)     1,112,909  
  114,300     Raia Drogasil S.A. (Brazil)     2,240,422  
   

 

 

 
    3,353,331  
   

 

 

 
  Electrical Components & Equipment 1.3%  
  80,400     Weg S.A. (Brazil)     519,433  
   

 

 

 
  Food Retail 7.5%  
  432,200     CP ALL Public Company Ltd. (Thailand)     803,358  
  856,764     Philippine Seven Corp. (Philippines)     2,186,722  
   

 

 

 
    2,990,080  
   

 

 

 
  General Merchandise Stores 1.4%  
  75,100     Magazine Luiza S.A. (Brazil)     563,528  
   

 

 

 
  Health Care Distributors 1.7%  
  1,368,438     Ibnsina Pharma S.A.E. (Egypt)     691,659  
   

 

 

 
  Health Care Facilities 5.9%  
  7,983,144     Cleopatra Hospital* (Egypt)     2,333,066  
   

 

 

 
  Human Resource & Employment Services 1.4%  
  34,083     HeadHunter Group plc. ADR (Russia)     544,306  
   

 

 

 
  Hypermarkets & Super Centers 2.0%  
  25,878     InRetail Peru Corp. (Peru)     807,394  
   

 

 

 
Shares          Value  
             
  Insurance Brokers 3.0%  
  579,715     TQM Corp. Public Company Ltd. (Thailand)   $ 1,187,959  
   

 

 

 
  Internet & Direct Marketing Retail 12.4%  
  5,360     MercadoLibre, Inc.*     2,618,789  
  11,040     Naspers Ltd., Class N (South Africa)     1,568,943  
  11,040     Prosus N.V.* (Netherlands)     773,029  
   

 

 

 
    4,960,761  
   

 

 

 
  Life & Health Insurance 1.3%  
  118,609     Discovery Ltd. (South Africa)     517,183  
   

 

 

 
  Property & Casualty Insurance 4.5%  
  703,900     Qualitas Controladora S.A.B. de C.V. (Mexico)     1,799,325  
   

 

 

 
  Regional Banks 4.1%  
  164,784     AU Small Finance Bank Ltd. (India)     1,126,209  
  3,906,400     PT Bank Tabungan Pensiunan Nasional Syariah Tbk* (Indonesia)     508,560  
   

 

 

 
    1,634,769  
   

 

 

 
  Technology Distributors 3.7%  
  865,070     FPT Corp. (Vietnam)     1,488,412  
   

 

 

 
  Wireless Telecommunication Services 4.9%  
  7,748,738     Safaricom plc (Kenya)     1,962,610  
   

 

 

 
  Total Common Stocks
(cost $45,555,293)
    38,128,193  
   

 

 

 
  PREFERRED STOCKS 3.4%  
  Diversified Banks 3.4%  
  183,559     Banco Davivienda S.A., 2.90% (Colombia)     1,378,274  
   

 

 

 
  Total Preferred Stocks
(cost $2,032,420)
    1,378,274  
   

 

 

 

Principal

Amount

         Value  
             
  SHORT-TERM INVESTMENTS 1.6%  
  Repurchase Agreement 1.6%  
  $621,965     Repurchase Agreement dated 3/31/20,
0.00% due 4/1/20 with Fixed Income
Clearing Corp. collateralized by $615,000
of United States Treasury Notes 1.750%
due 7/15/22; value: $638,512; repurchase
proceeds: $621,965 (cost $621,965)
  $ 621,965  
   

 

 

 
  Total Short-Term Investments
(cost $621,965)
    621,965  
   

 

 

 
  Total Investments
(cost $48,209,678) 100.4%§
    40,128,432  
  Liabilities less Other Assets (0.4%)     (167,057
   

 

 

 
  NET ASSETS 100.0%   $ 39,961,375  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 46.52%.

 

ADR American Depositary Receipt.

 

GDR Global Depositary Receipt.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

50


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

At March 31, 2020, Wasatch Frontier Emerging Small Countries Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      4.4

Bangladesh

      1.3

Brazil

      8.4

Colombia

      3.5

Egypt

      11.6

India

      3.7

Indonesia

      4.8

Kenya

      6.3

Mexico

      8.0

Netherlands

      2.0

Peru

      2.6

Philippines

      5.5

Russia

      4.1

South Africa

      8.1

Sweden

      2.2

Thailand

      7.2

United Kingdom

      2.5

United States

      6.6

Vietnam

      7.2
   

 

 

 

TOTAL

      100.0 %
   

 

 

 

    

 

 

51


Table of Contents

 

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 98.9%  
  Airlines 0.9%  
  10,687     Allegiant Travel Co.   $ 874,197  
   

 

 

 
  Application Software 17.7%  
  30,444     Five9, Inc.*     2,327,748  
  28,136     Globant S.A.* (Argentina)     2,472,592  
  12,718     HubSpot, Inc.*     1,693,910  
  113,430     Infomart Corp. (Japan)     746,446  
  67,661     Medallia, Inc.*     1,355,926  
  18,045     Paylocity Holding Corp.*     1,593,734  
  16,499     Q2 Holdings, Inc.*     974,431  
  93,318     Systena Corp. (Japan)     1,261,072  
  102,857     Technology One Ltd. (Australia)     496,835  
  7,858     Tyler Technologies, Inc.*     2,330,369  
  29,884     Zendesk, Inc.*     1,912,875  
   

 

 

 
    17,165,938  
   

 

 

 
  Automotive Retail 1.0%  
  22,815     Monro, Inc.     999,525  
   

 

 

 
  Biotechnology 2.6%  
  101,538     Abcam plc (United Kingdom)     1,432,308  
  16,859     Esperion Therapeutics, Inc.*     531,564  
  170     Medytox, Inc. (South Korea)     27,045  
  86,299     Sangamo Therapeutics, Inc.*     549,725  
   

 

 

 
    2,540,642  
   

 

 

 
  Building Products 3.1%  
  37,382     Trex Co., Inc.*     2,995,793  
   

 

 

 
  Commercial Printing 0.6%  
  11,429     Cimpress plc*     608,023  
   

 

 

 
  Consumer Finance 2.6%  
  33,630     Bajaj Finance Ltd. (India)     982,240  
  784,708     Srisawad Corp. Public Co. Ltd., Class A (Thailand)     1,016,229  
  644,500     Unifin Financiera S.A.B de C.V. (Mexico)     512,394  
   

 

 

 
    2,510,863  
   

 

 

 
  Data Processing & Outsourced Services 2.9%  
  23,458     Euronet Worldwide, Inc.*     2,010,820  
  11,400     GMO Payment Gateway, Inc. (Japan)     798,973  
   

 

 

 
    2,809,793  
   

 

 

 
  Diversified Chemicals 1.4%  
  73,457     Pidilite Industries Ltd. (India)     1,315,263  
   

 

 

 
  Diversified Real Estate Activities 1.0%  
  42,728     Patrizia AG (Germany)     977,619  
   

 

 

 
  Diversified Support Services 1.9%  
  26,107     Copart, Inc.*     1,788,852  
   

 

 

 
  Drug Retail 1.5%  
  10,690     Ain Holdings, Inc. (Japan)     628,359  
  15,500     Sugi Holdings Co. Ltd. (Japan)     830,016  
   

 

 

 
    1,458,375  
   

 

 

 
  Electrical Components & Equipment 2.0%  
  95,281     Voltronic Power Technology Corp. (Taiwan)     1,980,113  
   

 

 

 
  General Merchandise Stores 1.4%  
  29,255     Ollie’s Bargain Outlet Holdings, Inc.*     1,355,677  
   

 

 

 
  Health Care Equipment 2.8%  
  21,469     Cantel Medical Corp.     770,737  
  17,042     Cochlear Ltd. (Australia)     1,942,299  
   

 

 

 
    2,713,036  
   

 

 

 
Shares          Value  
             
  Health Care Facilities 2.5%  
  53,944     Ensign Group, Inc. (The)   $ 2,028,834  
  30,936     Pennant Group, Inc. (The)*     438,054  
   

 

 

 
    2,466,888  
   

 

 

 
  Health Care Services 1.1%  
  59,361     Dr. Lal PathLabs Ltd. (India)     1,092,810  
   

 

 

 
  Health Care Supplies 1.2%  
  45,700     Asahi Intecc Co. Ltd. (Japan)     1,130,254  
   

 

 

 
  Homebuilding 1.2%  
  25,624     LGI Homes, Inc.*     1,156,924  
   

 

 

 
  Human Resource & Employment Services 1.4%  
  22,500     en-japan, Inc. (Japan)     418,029  
  50,730     SMS Co. Ltd. (Japan)     978,367  
   

 

 

 
    1,396,396  
   

 

 

 
  Industrial Conglomerates 1.1%  
  4,226     3M India Ltd.* (India)     1,058,095  
   

 

 

 
  Industrial Machinery 7.3%  
  35,669     Altra Industrial Motion Corp.     623,851  
  23,238     Barnes Group, Inc.     972,046  
  30,575     Helios Technologies, Inc.     1,159,404  
  44,032     Kornit Digital Ltd.* (Israel)     1,095,956  
  62,300     MISUMI Group, Inc. (Japan)     1,347,607  
  16,345     RBC Bearings, Inc.*     1,843,553  
   

 

 

 
    7,042,417  
   

 

 

 
  Interactive Media & Services 0.6%  
  2,738     New Work SE (Germany)     576,172  
   

 

 

 
  Internet & Direct Marketing Retail 3.9%  
  62,227     MakeMyTrip Ltd.* (India)     743,924  
  4,274     MercadoLibre, Inc.*     2,088,191  
  224,623     Trainline plc* (United Kingdom)     932,575  
   

 

 

 
    3,764,690  
   

 

 

 
  Leisure Facilities 0.7%  
  13,305     Planet Fitness, Inc., Class A*     647,953  
   

 

 

 
  Life & Health Insurance 0.7%  
  138,449     ICICI Prudential Life Insurance Co. Ltd. (India)     645,829  
   

 

 

 
  Managed Health Care 1.2%  
  23,517     HealthEquity, Inc.*     1,189,725  
   

 

 

 
  Other Diversified Financial Services 0.6%  
  2,066     Hypoport AG* (Germany)     591,601  
   

 

 

 
  Packaged Foods & Meats 4.3%  
  26,800     Freshpet, Inc.*     1,711,716  
  822,000     Vitasoy International Holdings Ltd. (Hong Kong)     2,473,715  
   

 

 

 
    4,185,431  
   

 

 

 
  Pharmaceuticals 1.0%  
  63,591     Intra-Cellular Therapies, Inc.*     977,394  
   

 

 

 
  Property & Casualty Insurance 1.6%  
  108,691     ICICI Lombard General Insurance Co. Ltd. (India)     1,579,096  
   

 

 

 
  Regional Banks 4.4%  
  382,677     AU Small Finance Bank Ltd. (India)     2,615,390  
  41,416     Canadian Western Bank (Canada)     570,047  
  35,208     Eagle Bancorp, Inc.     1,063,634  
   

 

 

 
    4,249,071  
   

 

 

 
 

 

52


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  MARCH 31, 2020 (UNAUDITED)

 

 

 

Shares          Value  
             
  Research & Consulting Services 1.7%  
  33,093     Funai Soken Holdings, Inc. (Japan)   $ 653,935  
  36,700     Nihon M&A Center, Inc. (Japan)     999,556  
   

 

 

 
    1,653,491  
   

 

 

 
  Restaurants 1.2%  
  36,174     Domino’s Pizza Enterprises Ltd. (Australia)     1,119,959  
   

 

 

 
  Semiconductor Equipment 1.2%  
  35,247     Nova Measuring Instruments Ltd.* (Israel)     1,150,814  
   

 

 

 
  Semiconductors 8.1%  
  48,000     ASPEED Technology, Inc. (Taiwan)     1,635,106  
  22,607     Melexis N.V. (Belgium)     1,179,048  
  15,304     Monolithic Power Systems, Inc.     2,562,808  
  75,000     Silergy Corp. (Taiwan)     2,432,677  
   

 

 

 
    7,809,639  
   

 

 

 
  Soft Drinks 1.0%  
  66,600     Fevertree Drinks plc (United Kingdom)     993,211  
   

 

 

 
  Specialty Stores 1.1%  
  15,662     Five Below, Inc.*     1,102,292  
   

 

 

 
  Systems Software 1.9%  
  10,054     CyberArk Software Ltd.* (Israel)     860,220  
  22,017     Rapid7, Inc.*     953,997  
   

 

 

 
    1,814,217  
   

 

 

 
  Technology Distributors 0.7%  
  111,272     Electrocomponents plc (United Kingdom)     708,432  
   

 

 

 
  Thrifts & Mortgage Finance 1.0%  
  59,570     Aavas Financiers Ltd.* (India)     962,805  
   

 

 

 
  Trading Companies & Distributors 2.8%  
  83,720     Diploma plc (United Kingdom)     1,676,250  
  39,500     MonotaRO Co. Ltd. (Japan)     1,043,646  
   

 

 

 
    2,719,896  
   

 

 

 
  Total Common Stocks
(cost $85,175,665)
    95,879,211  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 1.2%

 

  Repurchase Agreement 1.2%  
  $1,146,292     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $1,130,000 of United States Treasury Notes 1.750% due 7/15/22; value: $1,173,201; repurchase proceeds: $1,146,292 (cost $1,146,292)   $ 1,146,292  
   

 

 

 
  Total Short-Term Investments
(cost $1,146,292)
    1,146,292  
   

 

 

 
  Total Investments
(cost $86,321,957) 100.1%§
    97,025,503  
  Liabilities less Other Assets (0.1%)     (90,591
   

 

 

 
  NET ASSETS 100.0%   $ 96,934,912  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 43.60%.

 

See Notes to Financial Statements.

 

 

 

 

At March 31, 2020, Wasatch Global Opportunities Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      2.6

Australia

      3.7

Belgium

      1.2

Canada

      0.6

Germany

      2.2

Hong Kong

      2.6

India

      11.5

Israel

      3.3

Japan

      11.3

Mexico

      0.5

South Korea

      0.0

Taiwan

      6.3

Thailand

      1.1

United Kingdom

      6.0

United States

      47.1
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

53


Table of Contents

 

WASATCH GLOBAL SELECT FUND (WAGSX / WGGSX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 98.7%  
  Aerospace & Defense 2.5%  
  3,746     HEICO Corp., Class A   $ 239,369  
   

 

 

 
  Application Software 13.4%  
  1,579     Dassault Systemes SE (France)     230,520  
  3,261     DocuSign, Inc.*     301,316  
  1,676     Guidewire Software, Inc.*     132,924  
  1,452     Tyler Technologies, Inc.*     430,605  
  4,650     Xero Ltd.* (New Zealand)     193,395  
   

 

 

 
    1,288,760  
   

 

 

 
  Building Products 4.3%  
  22,048     Assa Abloy AB, Class B (Sweden)     411,607  
   

 

 

 
  Consumer Finance 3.2%  
  10,413     Bajaj Finance Ltd. (India)     304,135  
   

 

 

 
  Data Processing & Outsourced Services 11.8%  
  6,525     Amadeus IT Group S.A. (Spain)     307,124  
  3,606     Euronet Worldwide, Inc.*     309,106  
  2,109     Jack Henry & Associates, Inc.     327,401  
  1,857     WEX, Inc.*     194,150  
   

 

 

 
    1,137,781  
   

 

 

 
  Distributors 4.6%  
  2,263     Pool Corp.     445,291  
   

 

 

 
  Diversified Support Services 4.4%  
  6,186     Copart, Inc.*     423,865  
   

 

 

 
  Drug Retail 4.5%  
  3,300     Tsuruha Holdings, Inc. (Japan)     435,097  
   

 

 

 
  Electrical Components & Equipment 2.9%  
  3,855     AMETEK, Inc.     277,637  
   

 

 

 
  Electronic Components 3.5%  
  4,554     Amphenol Corp., Class A     331,896  
   

 

 

 
  Electronic Equipment & Instruments 2.4%  
  5,458     Cognex Corp.     230,437  
   

 

 

 
  Financial Exchanges & Data 3.3%  
  954     MarketAxess Holdings, Inc.     317,272  
   

 

 

 
  Health Care Equipment 6.9%  
  3,049     Cochlear Ltd. (Australia)     347,498  
  1,790     Sonova Holding AG (Switzerland)     319,183  
   

 

 

 
    666,681  
   

 

 

 
  Health Care Supplies 7.8%  
  11,600     Asahi Intecc Co. Ltd. (Japan)     286,892  
  3,224     Coloplast A/S, Class B (Denmark)     467,565  
   

 

 

 
    754,457  
   

 

 

 
  Health Care Technology 3.1%  
  1,919     Veeva Systems, Inc., Class A*     300,074  
   

 

 

 
  Industrial Conglomerates 3.7%  
  1,147     Roper Technologies, Inc.     357,646  
   

 

 

 
  Industrial Machinery 2.1%  
  9,400     MISUMI Group, Inc. (Japan)     203,331  
   

 

 

 
  Life Sciences Tools & Services 4.0%  
  2,849     ICON plc* (Ireland)     387,464  
   

 

 

 
  Packaged Foods & Meats 3.0%  
  8,290     Britannia Industries Ltd. (India)     293,004  
   

 

 

 
Shares          Value  
             
  Specialty Chemicals 2.6%  
  3,396     Chr. Hansen Holding A/S (Denmark)   $ 250,600  
   

 

 

 
  Trucking 4.7%  
  3,423     Old Dominion Freight Line, Inc.     449,303  
   

 

 

 
  Total Common Stocks
(cost $10,877,746)
    9,505,707  
   

 

 

 
  Total Investments
(cost $10,877,746) 98.7%§
    9,505,707  
  Other Assets less Liabilities 1.3%     124,488  
   

 

 

 
  NET ASSETS 100.0%   $ 9,630,195  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 42.05%.

 

See Notes to Financial Statements.

 

 

 

At March 31, 2020, Wasatch Global Select Fund’s investments, were in the following countries:

 

Country   %

Australia

      3.7

Denmark

      7.6

France

      2.4

India

      6.3

Ireland

      4.1

Japan

      9.7

New Zealand

      2.0

Spain

      3.2

Sweden

      4.3

Switzerland

      3.4

United States

      53.3
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

54


Table of Contents
WASATCH GLOBAL VALUE FUND (FMIEX / WILCX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 98.0%  
  Airlines 0.9%  
  50,000     Japan Airlines Co. Ltd. (Japan)   $ 918,872  
   

 

 

 
  Automobile Manufacturers 1.9%  
  91,000     General Motors Co.     1,890,980  
   

 

 

 
  Construction & Engineering 0.6%  
  1,400,000     Sinopec Engineering Group Co. Ltd., Class H (China)     582,741  
   

 

 

 
  Diversified Banks 8.6%  
  68,957     Citigroup, Inc.     2,904,469  
  335,000     ING Groep N.V. ADR (Netherlands)     1,725,250  
  18,500     JPMorgan Chase & Co.     1,665,555  
  173,000     United Overseas Bank Ltd. (Singapore)     2,373,567  
   

 

 

 
    8,668,841  
   

 

 

 
  Diversified Metals & Mining 1.8%  
  98,000     BHP Group Ltd. (Australia)     1,777,848  
   

 

 

 
  Electric Utilities 8.6%  
  51,500     Duke Energy Corp.     4,165,320  
  123,500     Exelon Corp.     4,546,035  
   

 

 

 
    8,711,355  
   

 

 

 
  Electrical Components & Equipment 3.5%  
  45,000     Eaton Corp. plc     3,496,050  
   

 

 

 
  Electronic Manufacturing Services 1.6%  
  700,000     Hon Hai Precision Industry Co. Ltd. (Taiwan)     1,611,586  
   

 

 

 
  Food Retail 6.1%  
  120,000     Koninklijke Ahold Delhaize N.V. (Netherlands)     2,795,585  
  100,000     Seven & i Holdings Co. Ltd. (Japan)     3,302,488  
   

 

 

 
    6,098,073  
   

 

 

 
  Hypermarkets & Super Centers 2.6%  
  23,000     Walmart, Inc.     2,613,260  
   

 

 

 
  Industrial Conglomerates 1.7%  
  1,700,000     NWS Holdings Ltd. (Hong Kong)     1,732,447  
   

 

 

 
  Integrated Oil & Gas 7.0%  
  900,000     BP plc (United Kingdom)     3,690,850  
  210,000     Suncor Energy, Inc. (Canada)     3,351,524  
   

 

 

 
    7,042,374  
   

 

 

 
  Integrated Telecommunication Services 2.9%  
  100,000     AT&T, Inc.     2,915,000  
   

 

 

 
  IT Consulting & Other Services 5.3%  
  19,000     International Business Machines Corp.     2,107,670  
  43,000     Science Applications International Corp.     3,209,090  
   

 

 

 
    5,316,760  
   

 

 

 
  Managed Health Care 3.1%  
  52,000     Centene Corp.*     3,089,320  
   

 

 

 
  Multi-Line Insurance 2.7%  
  160,000     AXA S.A. (France)     2,709,110  
   

 

 

 
  Pharmaceuticals 11.6%  
  38,000     Johnson & Johnson     4,982,940  
  36,000     Novartis AG (Switzerland)     2,969,956  
  115,000     Pfizer, Inc.     3,753,600  
   

 

 

 
      11,706,496  
   

 

 

 
Shares          Value  
             
  Property & Casualty Insurance 3.1%  
  82,000     Axis Capital Holdings Ltd.   $ 3,169,300  
   

 

 

 
  Railroads 1.0%  
  7,500     Union Pacific Corp.     1,057,800  
   

 

 

 
  Regional Banks 2.0%  
  122,000     Bank OZK     2,037,400  
   

 

 

 
  Reinsurance 4.1%  
  20,500     Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Germany)     4,121,939  
   

 

 

 
  Semiconductors 0.9%  
  9,500     Texas Instruments, Inc.     949,335  
   

 

 

 
  Specialized REITs 1.1%  
  47,000     EPR Properties     1,138,340  
   

 

 

 
  Steel 2.2%  
  61,000     Nucor Corp.     2,197,220  
   

 

 

 
  Technology Hardware, Storage & Peripherals 4.1%  
  105,000     Samsung Electronics Co. Ltd. (South Korea)     4,082,556  
   

 

 

 
  Tobacco 3.0%  
  50,000     KT&G Corp. (South Korea)     3,061,362  
   

 

 

 
  Wireless Telecommunication Services 6.0%  
  800,000     China Mobile Ltd. (China)     5,995,424  
   

 

 

 
  Total Common Stocks
(cost $115,034,953)
    98,691,789  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 1.7%  
  Repurchase Agreement 1.7%  
  $1,719,483     Repurchase Agreement dated 3/31/20,
0.00% due 4/1/20 with Fixed Income
Clearing Corp. collateralized by $1,690,000
of United States Treasury Notes 1.750%
due 7/15/22; value: $1,754,610; repurchase
proceeds: $1,719,483 (cost $1,719,483)
  $ 1,719,483  
   

 

 

 
  Total Short-Term Investments
(cost $1,719,483)
    1,719,483  
   

 

 

 
  Total Investments
(cost $116,754,436) 99.7%§
    100,411,272  
  Other Assets less Liabilities 0.3%     342,125  
   

 

 

 
  NET ASSETS 100.0%   $ 100,753,397  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 41.41%.

 

ADR American Depositary Receipt.

 

REIT Real Estate Investment Trust.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

55


Table of Contents
WASATCH GLOBAL VALUE FUND (FMIEX / WILCX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments (continued)

 

At March 31, 2020, Wasatch Global Value Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Australia

      1.8

Canada

      3.4

China

      6.7

France

      2.7

Germany

      4.2

Hong Kong

      1.8

Japan

      4.3

Netherlands

      4.6

Singapore

      2.4

South Korea

      7.2

Switzerland

      3.0

Taiwan

      1.6

United Kingdom

      3.7

United States

      52.6
   

 

 

 

TOTAL

      100.0 %
   

 

 

 

    

 

 

56


Table of Contents

 

WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 98.4%  
  Airport Services 1.0%  
  2,736,960     Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Mexico)   $ 9,262,226  
   

 

 

 
  Application Software 11.0%  
  197,489     Descartes Systems Group, Inc. (The)* (Canada)     6,793,464  
  92,393     Globant S.A.* (Argentina)     8,119,497  
  1,381,279     Infomart Corp. (Japan)     9,089,750  
  169,981     Kinaxis, Inc.* (Canada)     13,152,300  
  336,100     Lightspeed POS, Inc.* (Canada)     4,547,249  
  512,101     Miroku Jyoho Service Co. Ltd. (Japan)     11,268,137  
  169,902     Nemetschek SE (Germany)     8,282,329  
  1,076,950     Systena Corp. (Japan)     14,553,584  
  2,822,577     Technology One Ltd. (Australia)     13,634,022  
  917,330     WiseTech Global Ltd. (Australia)     9,536,532  
   

 

 

 
    98,976,864  
   

 

 

 
  Asset Management & Custody Banks 2.4%  
  880,916     AJ Bell plc (United Kingdom)     3,349,764  
  2,372,003     Ashmore Group plc (United Kingdom)     10,444,552  
  2,002,189     Netwealth Group Ltd. (Australia)     8,220,107  
   

 

 

 
    22,014,423  
   

 

 

 
  Biotechnology 1.3%  
  820,873     Abcam plc (United Kingdom)     11,579,341  
  489     Medytox, Inc. (South Korea)     77,795  
   

 

 

 
    11,657,136  
   

 

 

 
  Brewers 1.0%  
  124,521     Royal Unibrew A/S (Denmark)     8,950,849  
   

 

 

 
  Commodity Chemicals 0.9%  
  1,250,476     Berger Paints India Ltd. (India)     8,169,809  
   

 

 

 
  Construction Machinery & Heavy Trucks 0.9%  
  623,944     Takeuchi Manufacturing Co. Ltd. (Japan)     7,693,357  
   

 

 

 
  Data Processing & Outsourced Services 1.3%  
  166,500     GMO Payment Gateway, Inc. (Japan)     11,669,215  
   

 

 

 
  Department Stores 0.2%  
  135,574     Poya International Co. Ltd. (Taiwan)     1,919,759  
   

 

 

 
  Diversified Real Estate Activities 2.1%  
  816,647     Patrizia AG (Germany)     18,684,934  
   

 

 

 
  Diversified Support Services 2.9%  
  943,961     HomeServe plc (United Kingdom)     12,295,638  
  1,769,052     Prestige International, Inc. (Japan)     13,500,676  
   

 

 

 
    25,796,314  
   

 

 

 
  Drug Retail 7.5%  
  168,228     Ain Holdings, Inc. (Japan)     9,888,463  
  955,702     Clicks Group Ltd. (South Africa)     13,775,003  
  142,800     Kusuri no Aoki Holdings Co. Ltd. (Japan)     11,892,734  
  302,700     Raia Drogasil S.A. (Brazil)     5,933,295  
  289,100     Sugi Holdings Co. Ltd. (Japan)     15,481,135  
  79,800     Tsuruha Holdings, Inc. (Japan)     10,521,434  
   

 

 

 
    67,492,064  
   

 

 

 
  Electrical Components & Equipment 1.6%  
  685,740     Voltronic Power Technology Corp. (Taiwan)     14,250,925  
   

 

 

 
  Electronic Equipment & Instruments 2.1%  
  823,012     Halma plc (United Kingdom)     19,329,309  
   

 

 

 
Shares          Value  
             
  Financial Exchanges & Data 1.0%  
  1,730,549     IntegraFin Holdings plc (United Kingdom)   $ 9,277,992  
   

 

 

 
  General Merchandise Stores 1.3%  
  3,510,620     B&M European Value Retail S.A. (United Kingdom)     11,922,825  
   

 

 

 
  Health Care Equipment 5.7%  
  209,931     CellaVision AB (Sweden)     5,156,443  
  212,049     Cochlear Ltd. (Australia)     24,167,501  
  163,265     DiaSorin S.p.A. (Italy)     21,520,621  
   

 

 

 
    50,844,565  
   

 

 

 
  Health Care Supplies 2.7%  
  613,200     Asahi Intecc Co. Ltd. (Japan)     15,165,691  
  206,714     Menicon Co. Ltd. (Japan)     9,223,676  
   

 

 

 
    24,389,367  
   

 

 

 
  Health Care Technology 0.2%  
  290,744     RaySearch Laboratories AB* (Sweden)     1,667,531  
   

 

 

 
  Highways & Railtracks 0.2%  
  2,417,343     Yuexiu Transport Infrastructure Ltd. (China)     1,462,947  
   

 

 

 
  Home Improvement Retail 0.0%  
  3,114,325     PT Ace Hardware Indonesia Tbk (Indonesia)     247,774  
   

 

 

 
  Household Appliances 1.4%  
  1,198,656     Breville Group Ltd. (Australia)     12,512,330  
   

 

 

 
  Human Resource & Employment Services 3.9%  
  141,446     51job, Inc. ADR* (China)     8,683,370  
  460,411     Benefit One, Inc. (Japan)     5,968,207  
  498,580     en-japan, Inc. (Japan)     9,263,149  
  576,592     SMS Co. Ltd. (Japan)     11,120,022  
   

 

 

 
    35,034,748  
   

 

 

 
  Industrial Machinery 2.4%  
  570,415     MISUMI Group, Inc. (Japan)     12,338,610  
  3,518,768     Rotork plc (United Kingdom)     9,309,948  
   

 

 

 
    21,648,558  
   

 

 

 
  Interactive Media & Services 3.4%  
  12,294     Atrae, Inc.* (Japan)     291,239  
  275,147     Info Edge India Ltd. (India)     7,496,416  
  58,847     New Work SE (Germany)     12,383,485  
  1,753,329     Rightmove plc (United Kingdom)     10,574,258  
   

 

 

 
    30,745,398  
   

 

 

 
  Internet & Direct Marketing Retail 2.3%  
  4,528,155     Trainline plc* (United Kingdom)     18,799,700  
  1,649,997     Webjet Ltd.*** (Australia)     1,989,141  
   

 

 

 
    20,788,841  
   

 

 

 
  Investment Banking & Brokerage 1.1%  
  1,226,568     Avanza Bank Holding AB (Sweden)     10,120,410  
   

 

 

 
  IT Consulting & Other Services 3.9%  
  205,490     Endava plc ADR* (United Kingdom)     7,225,029  
  413,343     Larsen & Toubro Infotech Ltd. (India)     7,824,152  
  207,247     Reply S.p.A. (Italy)     12,600,244  
  572,579     Softcat plc (United Kingdom)     7,291,021  
   

 

 

 
    34,940,446  
   

 

 

 
  Life Sciences Tools & Services 1.5%  
  46,675     Tecan Group AG (Switzerland)     13,979,374  
   

 

 

 
  Movies & Entertainment 1.5%  
  287,162     CTS Eventim AG & Co KGaA (Germany)     13,139,928  
   

 

 

 
 

 

57


Table of Contents
WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments (continued)

 

    

Shares

         Value  
             
  Other Diversified Financial Services 1.5%  
  46,621     Hypoport AG* (Germany)   $ 13,349,968  
   

 

 

 
  Packaged Foods & Meats 3.2%  
  302,514     Morinaga & Co. Ltd. (Japan)     12,383,888  
  5,589,449     Vitasoy International Holdings Ltd. (Hong Kong)     16,820,805  
   

 

 

 
    29,204,693  
   

 

 

 
  Pharmaceuticals 0.7%  
  69,400     JCR Pharmaceuticals Co. Ltd. (Japan)     6,015,290  
   

 

 

 
  Property & Casualty Insurance 1.4%  
  842,126     ICICI Lombard General Insurance Co. Ltd. (India)     12,234,667  
   

 

 

 
  Regional Banks 2.5%  
  1,488,224     AU Small Finance Bank Ltd. (India)     10,171,205  
  872,999     Canadian Western Bank (Canada)     12,015,910  
   

 

 

 
    22,187,115  
   

 

 

 
  Research & Consulting Services 2.4%  
  480,175     Funai Soken Holdings, Inc. (Japan)     9,488,520  
  432,728     Nihon M&A Center, Inc. (Japan)     11,785,716  
   

 

 

 
    21,274,236  
   

 

 

 
  Restaurants 1.3%  
  387,029     Domino’s Pizza Enterprises Ltd. (Australia)     11,982,543  
   

 

 

 
  Semiconductor Equipment 1.0%  
  700,072     Japan Material Co. Ltd. (Japan)     9,111,094  
   

 

 

 
  Semiconductors 3.9%  
  366,611     Elmos Semiconductor AG (Germany)     7,553,458  
  52,140     LEENO Industrial, Inc. (South Korea)     3,180,998  
  165,580     Melexis N.V. (Belgium)     8,635,680  
  472,165     Silergy Corp. (Taiwan)     15,314,997  
   

 

 

 
    34,685,133  
   

 

 

 
  Soft Drinks 1.3%  
  770,529     Fevertree Drinks plc (United Kingdom)     11,490,957  
   

 

 

 
  Specialty Chemicals 1.5%  
  181,098     Chr. Hansen Holding A/S (Denmark)     13,363,715  
   

 

 

 
  Systems Software 0.8%  
  105,298     Douzone Bizon Co. Ltd. (South Korea)     6,948,800  
   

 

 

 
  Technology Distributors 1.3%  
  1,817,431     Electrocomponents plc (United Kingdom)     11,570,987  
   

 

 

 
  Textiles 1.2%  
  351,067     Brunello Cucinelli S.p.A. (Italy)     10,630,501  
   

 

 

 
  Trading Companies & Distributors 5.7%  
  733,665     Diploma plc (United Kingdom)     14,689,512  
  2,048,162     Howden Joinery Group plc (United Kingdom)     12,884,342  
  149,373     IMCD N.V. (Netherlands)     10,718,636  
  482,724     MonotaRO Co. Ltd. (Japan)     12,754,254  
   

 

 

 
    51,046,744  
   

 

 

 
  Total Common Stocks
(cost $749,638,393)
    883,686,661  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 1.7%  
  Repurchase Agreement 1.7%  
  $15,256,660     Repurchase Agreement dated 3/31/20,
0.00% due 4/1/20 with Fixed Income
Clearing Corp. collateralized by $14,990,000 of United States Treasury Notes 1.750% due 7/15/22; value: $15,563,083; repurchase proceeds: $15,256,660 (cost $15,256,660)
  $ 15,256,660  
   

 

 

 
  Total Short-Term Investments
(cost $15,256,660)
    15,256,660  
   

 

 

 
  Total Investments
(cost $764,895,053) 100.1%§
    898,943,321  
  Liabilities less Other Assets (0.1%)     (573,739
   

 

 

 
  NET ASSETS 100.0%   $ 898,369,582  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12)

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 89.94%.

 

ADR American Depositary Receipt.

 

See Notes to Financial Statements.

 

 

 

 

 

At March 31, 2020, Wasatch International Growth Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      0.9

Australia

      9.3

Belgium

      1.0

Brazil

      0.7

Canada

      4.1

China

      1.1

Denmark

      2.5

Germany

      8.3

Hong Kong

      1.9

India

      5.2

Indonesia

      0.0

Italy

      5.1

Japan

      27.2

Mexico

      1.0

Netherlands

      1.2

South Africa

      1.6

South Korea

      1.2

Sweden

      1.9

Switzerland

      1.6

Taiwan

      3.6

United Kingdom

      20.6
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

58


Table of Contents
WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 97.1%  
  Advertising 3.0%  
  240,593     4imprint Group plc (United Kingdom)   $ 5,662,122  
  969,422     YouGov plc (United Kingdom)     7,465,540  
   

 

 

 
    13,127,662  
   

 

 

 
  Aerospace & Defense 2.1%  
  334,930     Avon Rubber plc (United Kingdom)     9,514,580  
   

 

 

 
  Alternative Carriers 1.4%  
  703,000     Chief Telecom, Inc. (Taiwan)     6,263,617  
   

 

 

 
  Application Software 16.4%  
  34,621     Atoss Software AG (Germany)     4,903,471  
  21,759     Elmo Software Ltd.* (Australia)     58,975  
  99,744     Esker S.A. (France)     10,165,857  
  659,370     Fortnox AB (Sweden)     10,931,123  
  125,400     freee KK* (Japan)     4,030,941  
  791,092     GB Group plc (United Kingdom)     5,646,502  
  11,617,636     Humanica Public Co. Ltd. (Thailand)     2,159,445  
  1,036,400     Infomart Corp. (Japan)     6,820,212  
  59,290     Mensch und Maschine Software SE (Germany)     2,508,029  
  356,306     Miroku Jyoho Service Co. Ltd. (Japan)     7,840,064  
  610,572     Rakus Co. Ltd. (Japan)     9,046,471  
  667,500     Systena Corp. (Japan)     9,020,398  
   

 

 

 
    73,131,488  
   

 

 

 
  Auto Parts & Equipment 0.4%  
  2,379,262     Minda Corp. Ltd. (India)     1,813,627  
   

 

 

 
  Brewers 1.5%  
  607,145     Carlsberg Brewery Malaysia Berhad, Class B (Malaysia)     3,488,463  
  42,497     Royal Unibrew A/S (Denmark)     3,054,780  
   

 

 

 
    6,543,243  
   

 

 

 
  Building Products 0.2%  
  194,678     Kajaria Ceramics Ltd. (India)     959,927  
   

 

 

 
  Commercial Printing 0.6%  
  127,200     Raksul, Inc.* (Japan)     2,745,597  
   

 

 

 
  Commodity Chemicals 3.0%  
  867,649     Berger Paints India Ltd. (India)     5,668,663  
  666,740     Gulf Oil Lubricants India Ltd. (India)     4,609,376  
  255,016     Supreme Industries Ltd. (India)     2,903,524  
   

 

 

 
    13,181,563  
   

 

 

 
  Consumer Finance 1.7%  
  236,148     Gruppo MutuiOnline S.p.A. (Italy)     3,964,020  
  227,554     Spandana Sphoorty Financial Ltd.* (India)     1,813,477  
  2,204,062     Unifin Financiera S.A.B de C.V. (Mexico)     1,752,286  
   

 

 

 
    7,529,783  
   

 

 

 
  Department Stores 1.3%  
  396,908     Poya International Co. Ltd. (Taiwan)     5,620,307  
   

 

 

 
  Diversified Support Services 5.3%  
  75,422     Clipper Logistics plc (United Kingdom)     140,708  
  328,900     Japan Elevator Service Holdings Co. Ltd. (Japan)     7,522,328  
  4,327,885     Johnson Service Group plc (United Kingdom)     5,504,038  
  1,354,362     Prestige International, Inc. (Japan)     10,335,933  
   

 

 

 
    23,503,007  
   

 

 

 
  Drug Retail 2.0%  
  50,000     Kusuri no Aoki Holdings Co. Ltd. (Japan)     4,164,123  
  207,597     Yakuodo Holdings Co. Ltd. (Japan)     4,638,653  
   

 

 

 
    8,802,776  
   

 

 

 
Shares          Value  
             
  Education Services 0.4%  
  295,202     Dadi Early-Childhood Education Group Ltd. (Taiwan)   $ 1,575,410  
   

 

 

 
  Electrical Components & Equipment 1.9%  
  294,780     Amara Raja Batteries Ltd. (India)     1,851,587  
  326,158     Voltronic Power Technology Corp. (Taiwan)     6,778,157  
   

 

 

 
    8,629,744  
   

 

 

 
  Electronic Components 0.6%  
  1,233,950     Strix Group plc (United Kingdom)     2,507,635  
   

 

 

 
  Electronic Equipment & Instruments 2.1%  
  189,470     Carel Industries S.p.A. (Italy)     2,429,106  
  129,328     Isra Vision AG (Germany)     7,071,212  
   

 

 

 
    9,500,318  
   

 

 

 
  Food Retail 3.9%  
  3,819,129     Philippine Seven Corp. (Philippines)     9,747,580  
  70,499     Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (Israel)     3,890,928  
  4,502,100     Sheng Siong Group Ltd. (Singapore)     3,761,657  
   

 

 

 
    17,400,165  
   

 

 

 
  Health Care Equipment 6.4%  
  7,974,000     AK Medical Holdings Ltd. (China)     17,250,167  
  166,826     CellaVision AB (Sweden)     4,097,674  
  143,892     Inmode Ltd.* (Israel)     3,093,678  
  91,952     Medistim ASA (Norway)     1,421,456  
  239,982     Xvivo Perfusion AB* (Sweden)     2,405,698  
   

 

 

 
    28,268,673  
   

 

 

 
  Health Care Facilities 1.6%  
  24,257,437     Cleopatra Hospital* (Egypt)     7,089,213  
   

 

 

 
  Health Care Services 3.3%  
  255,177     Dr. Lal PathLabs Ltd. (India)     4,697,696  
  140,605     Elan Corp. (Japan)     1,872,568  
  498,039     Metropolis Healthcare Ltd.* (India)     8,277,216  
   

 

 

 
    14,847,480  
   

 

 

 
  Health Care Supplies 1.7%  
  716,358     Bioteque Corp. (Taiwan)     2,217,584  
  1,500,696     Nanosonics Ltd.* (Australia)     5,149,030  
   

 

 

 
    7,366,614  
   

 

 

 
  Health Care Technology 4.0%  
  275,380     Craneware plc (United Kingdom)     6,550,249  
  165,800     Medley, Inc.* (Japan)     3,044,174  
  99,198     Nexus AG (Germany)     3,036,026  
  354,877     Pro Medicus Ltd. (Australia)     4,194,425  
  204,249     RaySearch Laboratories AB* (Sweden)     1,171,448  
   

 

 

 
    17,996,322  
   

 

 

 
  Home Improvement Retail 1.3%  
  3,984,055     Italtile Ltd. (South Africa)     2,462,053  
  43,238,500     PT Ace Hardware Indonesia Tbk (Indonesia)     3,440,038  
   

 

 

 
    5,902,091  
   

 

 

 
  Human Resource & Employment Services 1.7%  
  168,288     en-japan, Inc. (Japan)     3,126,634  
  234,262     SMS Co. Ltd. (Japan)     4,517,923  
   

 

 

 
    7,644,557  
   

 

 

 
  Insurance Brokers 1.0%  
  2,231,200     TQM Corp. Public Co. Ltd. (Thailand)     4,572,201  
   

 

 

 
 

 

59


Table of Contents
WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX)  

 

 

Schedule of Investments (continued)

 

Shares          Value  
             
  Interactive Media & Services 1.9%  
  134,884     Atrae, Inc.* (Japan)   $ 3,195,331  
  24,030     New Work SE (Germany)     5,056,760  
   

 

 

 
    8,252,091  
   

 

 

 
  Internet & Direct Marketing Retail 1.1%  
  860,583     Trainline plc* (United Kingdom)     3,572,913  
  1,057,933     Webjet Ltd.*** (Australia)     1,275,383  
   

 

 

 
    4,848,296  
   

 

 

 
  Internet Services & Infrastructure 1.2%  
  383,000     BASE, Inc.* (Japan)     3,876,936  
  54,200     Hennge KK* (Japan)     1,316,359  
   

 

 

 
    5,193,295  
   

 

 

 
  Investment Banking & Brokerage 0.5%  
  101,500     M&A Capital Partners Co. Ltd.* (Japan)     2,417,129  
   

 

 

 
  IT Consulting & Other Services 2.6%  
  233,971     Appen Ltd. (Australia)     2,793,858  
  61,681     Aubay (France)     1,356,119  
  891,944     Avant Corp. (Japan)     6,321,272  
  134,018     FDM Group Holdings plc (United Kingdom)     1,216,447  
   

 

 

 
    11,687,696  
   

 

 

 
  Life Sciences Tools & Services 0.9%  
  417,174     Biotage AB (Sweden)     4,159,242  
   

 

 

 
  Oil & Gas Equipment & Services 0.4%  
  583,959     Computer Modelling Group Ltd. (Canada)     1,589,258  
   

 

 

 
  Other Diversified Financial Services 1.7%  
  26,512     Hypoport AG* (Germany)     7,591,737  
   

 

 

 
  Packaged Foods & Meats 2.1%  
  2,003,120     Vitasoy International Holdings Ltd. (Hong Kong)     6,028,159  
  445,000     Yihai International Holding Ltd.* (China)     3,351,962  
   

 

 

 
    9,380,121  
   

 

 

 
  Personal Products 0.9%  
  543,629     Sarantis S.A. (Greece)     4,220,073  
   

 

 

 
  Property & Casualty Insurance 1.5%  
  2,654,019     Qualitas Controladora S.A.B. de C.V. (Mexico)     6,784,264  
   

 

 

 
  Publishing 1.1%  
  381,259     Future plc (United Kingdom)     4,734,705  
   

 

 

 
  Research & Consulting Services 3.1%  
  169,000     IR Japan Holdings Ltd. (Japan)     9,040,138  
  426,472     NICE Information Service Co. Ltd. (South Korea)     4,595,238  
   

 

 

 
    13,635,376  
   

 

 

 
  Restaurants 0.4%  
  141,500     Arcland Service Holdings Co. Ltd. (Japan)     1,894,557  
  630,045     Patisserie Holdings plc* *** §§ (United Kingdom)     7,826  
   

 

 

 
      1,902,383  
   

 

 

 
Shares          Value  
             
  Semiconductor Equipment 1.0%  
  349,932     Japan Material Co. Ltd. (Japan)   $ 4,554,193  
   

 

 

 
  Semiconductors 3.6%  
  326,529     Elmos Semiconductor AG (Germany)     6,727,630  
  154,852     LEENO Industrial, Inc. (South Korea)     9,447,332  
   

 

 

 
    16,174,962  
   

 

 

 
  Specialized Finance 1.3%  
  410,900     eGuarantee, Inc. (Japan)     5,992,234  
   

 

 

 
  Technology Hardware, Storage & Peripherals 0.5%  
  57,241     MGI Digital Graphic Technology* (France)     2,129,954  
   

 

 

 
  Thrifts & Mortgage Finance 2.5%  
  397,577     Aavas Financiers Ltd.* (India)     6,425,874  
  108,532     Equitable Group, Inc. (Canada)     4,478,401  
   

 

 

 
    10,904,275  
   

 

 

 
  Total Common Stocks
(cost $357,717,686)
    432,188,884  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 3.3%  
  Repurchase Agreement 3.3%  
  $14,461,322     Repurchase Agreement dated 3/31/20,
0.00% due 4/1/20 with Fixed Income
Clearing Corp. collateralized by $14,210,000 of United States Treasury Notes 1.750% due 7/15/22; value: $14,753,263; repurchase proceeds: $14,461,322 (cost $14,461,322)
  $ 14,461,322  
   

 

 

 
  Total Short-Term Investments
(cost $14,461,322)
    14,461,322  
   

 

 

 
  Total Investments
(cost $372,179,008) 100.4%
    446,650,206  
  Liabilities less Other Assets (0.4%)     (1,931,496
   

 

 

 
  NET ASSETS 100.0%   $ 444,718,710  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 83.45%.

 

§§The aggregate value of illiquid holdings at March 31, 2020, amounted to approximately $7,826 and represented 0.00% of net assets.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

60


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

At March 31, 2020, Wasatch International Opportunities Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Australia

      3.1

Canada

      1.4

China

      4.8

Denmark

      0.7

Egypt

      1.6

France

      3.2

Germany

      8.5

Greece

      1.0

Hong Kong

      1.4

India

      9.0

Indonesia

      0.8

Israel

      1.6

Italy

      1.5

Japan

      27.1

Malaysia

      0.8

Mexico

      2.0

Norway

      0.3

Philippines

      2.3

Singapore

      0.9

South Africa

      0.6

South Korea

      3.2

Sweden

      5.3

Taiwan

      5.2

Thailand

      1.6

United Kingdom

      12.1
   

 

 

 

TOTAL

      100.0 %
   

 

 

 

    

 

 

61


Table of Contents

 

WASATCH INTERNATIONAL SELECT FUND (WAISX / WGISX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 100.1%  
  Aerospace & Defense 1.7%  
  3,703     CAE, Inc. (Canada)   $ 46,810  
   

 

 

 
  Apparel, Accessories & Luxury Goods 3.5%  
  142     Hermes International (France)     96,618  
   

 

 

 
  Application Software 10.2%  
  868     Dassault Systemes SE (France)     126,720  
  628     Temenos AG* (Switzerland)     81,860  
  1,851     Xero Ltd.* (New Zealand)     76,984  
   

 

 

 
    285,564  
   

 

 

 
  Asset Management & Custody Banks 3.0%  
  124     Partners Group Holding AG (Switzerland)     84,899  
   

 

 

 
  Building Products 4.8%  
  7,130     Assa Abloy AB, Class B (Sweden)     133,108  
   

 

 

 
  Data Processing & Outsourced Services 6.2%  
  1,888     Amadeus IT Group S.A. (Spain)     88,866  
  1,452     Worldline S.A.* (France)     85,699  
   

 

 

 
    174,565  
   

 

 

 
  Drug Retail 5.7%  
  1,200     Tsuruha Holdings, Inc. (Japan)     158,217  
   

 

 

 
  Electronic Equipment & Instruments 4.4%  
  5,275     Halma plc (United Kingdom)     123,889  
   

 

 

 
  Health Care Equipment 14.0%  
  987     Cochlear Ltd. (Australia)     112,490  
  9,523     Fisher & Paykel Healthcare Corp. Ltd. (New Zealand)     173,114  
  590     Sonova Holding AG (Switzerland)     105,205  
   

 

 

 
    390,809  
   

 

 

 
  Health Care Supplies 9.7%  
  3,800     Asahi Intecc Co. Ltd. (Japan)     93,982  
  1,222     Coloplast A/S, Class B (Denmark)     177,222  
   

 

 

 
    271,204  
   

 

 

 
  Health Care Technology 3.3%  
  3,100     M3, Inc. (Japan)     91,441  
   

 

 

 
  Industrial Machinery 5.4%  
  2,500     MISUMI Group, Inc. (Japan)     54,077  
  184     Rational AG (Germany)     97,309  
   

 

 

 
    151,386  
   

 

 

 
  Interactive Media & Services 1.8%  
  1,065     REA Group Ltd. (Australia)     49,889  
   

 

 

 
  Internet & Direct Marketing Retail 2.3%  
  15,771     Trainline plc* (United Kingdom)     65,477  
   

 

 

 
  IT Consulting & Other Services 2.3%  
  500     Obic Co. Ltd. (Japan)     65,145  
   

 

 

 
  Leisure Products 2.0%  
  400     Shimano, Inc. (Japan)     57,045  
   

 

 

 
  Life Sciences Tools & Services 7.8%  
  682     ICON plc* (Ireland)     92,752  
  626     Sartorius Stedim Biotech (France)     124,921  
   

 

 

 
    217,673  
   

 

 

 
Shares          Value  
             
  Packaged Foods & Meats 2.8%  
  26,000     Vitasoy International Holdings Ltd. (Hong Kong)   $ 78,244  
   

 

 

 
  Research & Consulting Services 3.3%  
  1,587     Intertek Group plc (United Kingdom)     92,720  
   

 

 

 
  Soft Drinks 1.9%  
  3,486     Fevertree Drinks plc (United Kingdom)     51,987  
   

 

 

 
  Specialty Chemicals 4.0%  
  1,521     Chr. Hansen Holding A/S (Denmark)     112,239  
   

 

 

 
  Total Common Stocks
(cost $3,094,156)
    2,798,929  
   

 

 

 
  Total Investments
(cost $3,094,156) 100.1%§
    2,798,929  
  Liabilities less Other Assets (0.1%)     (2,601
   

 

 

 
  NET ASSETS 100.0%   $ 2,796,328  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 95.10%.

 

See Notes to Financial Statements.

 

 

 

At March 31, 2020, Wasatch International Select Fund’s investments, were in the following countries:

 

Country   %

Australia

      5.8

Canada

      1.7

Denmark

      10.3

France

      15.5

Germany

      3.5

Hong Kong

      2.8

Ireland

      3.3

Japan

      18.6

New Zealand

      8.9

Spain

      3.2

Sweden

      4.8

Switzerland

      9.7

United Kingdom

      11.9
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

62


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WASATCH MICRO CAP FUND (WMICX / WGICX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 99.1%  
  Advertising 0.5%  
  70,776     Cardlytics, Inc.*   $ 2,474,329  
   

 

 

 
  Airlines 0.9%  
  48,820     Allegiant Travel Co.     3,993,476  
   

 

 

 
  Alternative Carriers 2.4%  
  163,973     Bandwidth, Inc., Class A*     11,033,743  
   

 

 

 
  Apparel Retail 1.5%  
  507,921     Boot Barn Holdings, Inc.*     6,567,419  
   

 

 

 
  Apparel, Accessories & Luxury Goods 1.2%  
  621,568     Superior Group of Cos., Inc.     5,258,465  
   

 

 

 
  Application Software 9.6%  
  131,297     Five9, Inc.*     10,038,969  
  566,638     Medallia, Inc.*     11,355,425  
  464,776     Model N, Inc.*     10,322,675  
  438,108     Upland Software, Inc.*     11,750,057  
   

 

 

 
    43,467,126  
   

 

 

 
  Biotechnology 8.4%  
  189,052     Castle Biosciences, Inc.*     5,635,640  
  136,522     ChemoCentryx, Inc.*     5,485,454  
  369,074     Cytokinetics, Inc.*     4,351,382  
  111,009     Esperion Therapeutics, Inc.*     3,500,114  
  264,701     Flexion Therapeutics, Inc.*     2,083,197  
  95,909     Frequency Therapeutics, Inc.*     1,708,139  
  462,990     Inovio Pharmaceuticals, Inc.*     3,444,646  
  336,219     MacroGenics, Inc.*     1,956,794  
  937,165     MEI Pharma, Inc.*     1,508,836  
  576,611     Sangamo Therapeutics, Inc.*     3,673,012  
  1,803,229     Selecta Biosciences, Inc.*     4,345,782  
   

 

 

 
    37,692,996  
   

 

 

 
  Construction & Engineering 2.7%  
  709,019     Construction Partners, Inc., Class A*     11,975,331  
   

 

 

 
  Construction Machinery & Heavy Trucks 2.3%  
  115,098     Alamo Group, Inc.     10,218,401  
   

 

 

 
  Data Processing & Outsourced Services 2.4%  
  452,616     Repay Holdings Corp.*     6,495,040  
  915,672     USA Technologies, Inc.*     4,212,091  
   

 

 

 
    10,707,131  
   

 

 

 
  Electronic Equipment & Instruments 2.8%  
  424,328     Napco Security Technologies, Inc.*     6,437,056  
  569,697     nLight, Inc.*     5,976,121  
   

 

 

 
    12,413,177  
   

 

 

 
  Electronic Manufacturing Services 1.9%  
  157,763     Fabrinet*     8,607,549  
   

 

 

 
  Environmental & Facilities Services 1.5%  
  411,747     Heritage-Crystal Clean, Inc.*     6,686,771  
   

 

 

 
  Food Distributors 1.1%  
  486,960     Chefs’ Warehouse, Inc. (The)*     4,903,687  
   

 

 

 
  Health Care Equipment 4.8%  
  229,096     AtriCure, Inc.*     7,695,334  
  105,383     Cantel Medical Corp.     3,783,250  
  341,750     CryoLife, Inc.*     5,782,410  
  64,542     Tandem Diabetes Care, Inc.*     4,153,278  
   

 

 

 
    21,414,272  
   

 

 

 
Shares          Value  
             
  Health Care Facilities 1.7%  
  380,551     Pennant Group, Inc. (The)*   $ 5,388,602  
  30,113     U.S. Physical Therapy, Inc.     2,077,797  
   

 

 

 
    7,466,399  
   

 

 

 
  Health Care Services 2.3%  
  71,491     Addus HomeCare Corp.*     4,832,791  
  251,552     Exagen, Inc.*     4,009,739  
  8,313,643     IM Cannabis Corp.* ‡‡ §§ (Canada)     1,713,179  
   

 

 

 
    10,555,709  
   

 

 

 
  Health Care Supplies 2.9%  
  181,145     OrthoPediatrics Corp.*     7,180,588  
  194,427     Silk Road Medical, Inc.*     6,120,562  
   

 

 

 
    13,301,150  
   

 

 

 
  Health Care Technology 6.1%  
  84,919     Inspire Medical Systems, Inc.*     5,118,918  
  323,824     Simulations Plus, Inc.     11,307,934  
  207,328     Tabula Rasa HealthCare, Inc.*     10,841,181  
   

 

 

 
    27,268,033  
   

 

 

 
  Home Furnishings 0.7%  
  584,032     Purple Innovation, Inc.*     3,317,302  
   

 

 

 
  Homebuilding 1.2%  
  116,975     LGI Homes, Inc.*     5,281,421  
   

 

 

 
  Industrial Machinery 7.8%  
  288,709     Altra Industrial Motion Corp.     5,049,520  
  141,033     Helios Technologies, Inc.     5,347,971  
  179,547     Kadant, Inc.     13,403,184  
  460,394     Kornit Digital Ltd.* (Israel)     11,459,207  
   

 

 

 
    35,259,882  
   

 

 

 
  Insurance Brokers 1.0%  
  99,940     Goosehead Insurance, Inc., Class A*     4,460,322  
   

 

 

 
  Internet Services & Infrastructure 3.0%  
  2,375,912     Limelight Networks, Inc.*     13,542,698  
   

 

 

 
  Leisure Products 1.1%  
  682,288     MasterCraft Boat Holdings, Inc.*     4,980,702  
   

 

 

 
  Office Services & Supplies 0.4%  
  144,512     Kimball International, Inc., Class B     1,721,138  
   

 

 

 
  Oil & Gas Equipment & Services 1.3%  
  248,678     DMC Global, Inc.     5,722,081  
   

 

 

 
  Oil & Gas Exploration & Production 0.2%  
  2,096,029     Lonestar Resources US, Inc., Class A* ‡‡     867,756  
   

 

 

 
  Other Diversified Financial Services 1.2%  
  456,763     Diamond Eagle Acquisition Corp., Class A*     5,636,455  
   

 

 

 
  Packaged Foods & Meats 2.8%  
  195,962     Freshpet, Inc.*     12,516,093  
   

 

 

 
  Paper Packaging 2.2%  
  257,317     UFP Technologies, Inc.*     9,801,205  
   

 

 

 
  Pharmaceuticals 3.5%  
  784,476     BioDelivery Sciences International, Inc.*     2,973,164  
  786,850     Green Thumb Industries, Inc.* (Canada)     4,580,647  
  344,211     Intra-Cellular Therapies, Inc.*     5,290,523  
  663,416     Optinose, Inc.*     2,978,738  
   

 

 

 
    15,823,072  
   

 

 

 
  Regional Banks 2.4%  
  290,800     CBTX, Inc.     5,167,516  
  288,752     People’s Utah Bancorp     5,593,126  
   

 

 

 
    10,760,642  
   

 

 

 
 

 

63


Table of Contents
WASATCH MICRO CAP FUND (WMICX / WGICX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments (continued)

 

    

Shares

        

    

Value

 
             
  Research & Consulting Services 2.5%  
  161,590     ICF International, Inc.   $ 11,101,233  
   

 

 

 
  Restaurants 0.8%  
  381,829     Chuy’s Holdings, Inc.*     3,845,018  
   

 

 

 
  Semiconductor Equipment 2.3%  
  315,443     Nova Measuring Instruments Ltd.* (Israel)     10,299,214  
   

 

 

 
  Systems Software 5.1%  
  109,970     CyberArk Software Ltd.* (Israel)     9,409,033  
  212,052     Rapid7, Inc.*     9,188,213  
  70,978     Varonis Systems, Inc.*     4,519,170  
   

 

 

 
    23,116,416  
   

 

 

 
  Trading Companies & Distributors 2.6%  
  451,005     Transcat, Inc.* ‡‡     11,951,633  
   

 

 

 
  Total Common Stocks
(cost $463,779,261)
    446,009,447  
   

 

 

 
  WARRANTS 0.1%  
  Biotechnology 0.1%  
  512,465     Selecta Biosciences, Inc., 12/23/2024* *** †     640,581  
   

 

 

 
  Health Care Services 0.0%  
  1,897,571     IM Cannabis Corp., 10/10/2021* *** §§ (Canada)      
   

 

 

 
  Total Warrants
(cost $64,058)
    640,581  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 0.7%  
  Repurchase Agreement 0.7%  
  $3,323,503     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $3,270,000 of United States Treasury Notes 1.750% due 7/15/22; value: $3,395,015; repurchase proceeds: $3,323,503 (cost $3,323,503)   $ 3,323,503  
   

 

 

 
  Total Short-Term Investments
(cost $3,323,503)
    3,323,503  
   

 

 

 
  Total Investments
(cost $467,166,822) 99.9%
    449,973,531  
  Other Assets less Liabilities 0.1%     327,681  
   

 

 

 
  NET ASSETS 100.0%   $ 450,301,212  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). The aggregate value of securities purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 at March 31, 2020, amounted to approximately $640,581, and represented 0.14% of net assets.

 

‡‡Affiliated company (see Note 8).

 

§§The aggregate value of illiquid holdings at March 31, 2020, amounted to approximately $1,713,179, and represented 0.38% of net assets.

 

See Notes to Financial Statements.

 

 

 

 

 

 

At March 31, 2020, Wasatch Micro Cap Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Canada

      1.4

Israel

      7.0

United States

      91.6
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

64


Table of Contents

 

WASATCH MICRO CAP VALUE FUND (WAMVX / WGMVX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 95.5%  
  Advertising 1.7%  
  186,000     National CineMedia, Inc.   $ 606,360  
  304,264     YouGov plc (United Kingdom)     2,343,144  
   

 

 

 
    2,949,504  
   

 

 

 
  Air Freight & Logistics 1.0%  
  473,000     Radiant Logistics, Inc.*     1,830,510  
   

 

 

 
  Airlines 0.7%  
  15,000     Allegiant Travel Co.     1,227,000  
   

 

 

 
  Alternative Carriers 3.5%  
  61,706     Bandwidth, Inc., Class A*     4,152,197  
  163,205     Gamma Communications plc
(United Kingdom)
    1,996,344  
   

 

 

 
    6,148,541  
   

 

 

 
  Application Software 10.9%  
  44,363     Ebix, Inc.     673,430  
  376,000     eGain Corp.*     2,756,080  
  31,000     Esker S.A. (France)     3,159,504  
  16,000     Globant S.A.* (Argentina)     1,406,080  
  112,800     Miroku Jyoho Service Co. Ltd. (Japan)     2,482,022  
  106,000     Model N, Inc.*     2,354,260  
  70,000     QAD, Inc., Class A     2,795,100  
  204,000     SharpSpring, Inc.*     1,236,240  
  169,000     Systena Corp. (Japan)     2,283,816  
   

 

 

 
    19,146,532  
   

 

 

 
  Asset Management & Custody Banks 2.3%  
  708,340     Fiducian Group Ltd. (Australia)     1,888,837  
  40,000     Hamilton Lane, Inc., Class A     2,212,400  
   

 

 

 
    4,101,237  
   

 

 

 
  Biotechnology 3.0%  
  112,000     Cytokinetics, Inc.*     1,320,480  
  178,256     Inovio Pharmaceuticals, Inc.*     1,326,224  
  100,000     MacroGenics, Inc.*     582,000  
  460,977     MEI Pharma, Inc.*     742,173  
  195,000     Sangamo Therapeutics, Inc.*     1,242,150  
   

 

 

 
    5,213,027  
   

 

 

 
  Building Products 0.3%  
  20,428     Patrick Industries, Inc.     575,252  
   

 

 

 
  Communications Equipment 1.1%  
  202,000     Digi International, Inc.*     1,927,080  
   

 

 

 
  Construction & Engineering 2.4%  
  139,000     Construction Partners, Inc., Class A*     2,347,710  
  46,000     NV5 Global, Inc.*     1,899,340  
   

 

 

 
    4,247,050  
   

 

 

 
  Data Processing & Outsourced Services 2.7%  
  117,000     i3 Verticals, Inc., Class A*     2,233,530  
  44,747     Repay Holdings Corp.*     642,120  
  406,704     USA Technologies, Inc.*     1,870,838  
   

 

 

 
    4,746,488  
   

 

 

 
  Diversified Banks 0.7%  
  720,000     City Union Bank Ltd. (India)     1,226,976  
   

 

 

 
  Diversified Support Services 1.2%  
  1,621,000     Johnson Service Group plc
(United Kingdom)
    2,061,525  
   

 

 

 
  Education Services 0.7%  
  238,851     Dadi Early-Childhood Education Group Ltd. (Taiwan)     1,274,681  
   

 

 

 
Shares          Value  
             
  Electronic Equipment & Instruments 1.3%  
  148,000     Napco Security Technologies, Inc.*   $ 2,245,160  
   

 

 

 
  Electronic Manufacturing Services 2.6%  
  74,000     Fabrinet*     4,037,440  
  110,680     RF Industries Ltd.     439,399  
   

 

 

 
    4,476,839  
   

 

 

 
  Health Care Distributors 2.9%  
  4,161,922     Ibnsina Pharma S.A.E. (Egypt)     2,103,590  
  129,000     PetIQ, Inc.*     2,996,670  
   

 

 

 
    5,100,260  
   

 

 

 
  Health Care Equipment 4.0%  
  53,000     AtriCure, Inc.*     1,780,270  
  83,826     Inmode Ltd.* (Israel)     1,802,259  
  463,000     IRIDEX Corp.*     745,430  
  65,000     Tactile Systems Technology, Inc.*     2,610,400  
   

 

 

 
    6,938,359  
   

 

 

 
  Health Care Facilities 1.4%  
  53,000     Ensign Group, Inc. (The)     1,993,330  
  39,960     Joint Corp. (The)*     433,566  
   

 

 

 
    2,426,896  
   

 

 

 
  Health Care Services 2.4%  
  28,000     Addus HomeCare Corp.*     1,892,800  
  476,000     Viemed Healthcare, Inc.* (Canada)     2,235,742  
   

 

 

 
    4,128,542  
   

 

 

 
  Health Care Supplies 1.2%  
  54,070     OrthoPediatrics Corp.*     2,143,335  
   

 

 

 
  Health Care Technology 4.3%  
  85,000     Nexus AG (Germany)     2,601,486  
  26,000     Omnicell, Inc.*     1,705,080  
  351,000     OptimizeRx Corp.*     3,180,060  
   

 

 

 
    7,486,626  
   

 

 

 
  Heavy Electrical Equipment 1.2%  
  143,000     TPI Composites, Inc.*     2,113,540  
   

 

 

 
  Home Furnishings 0.5%  
  140,000     Lovesac Co. (The)*     816,200  
   

 

 

 
  Homebuilding 3.0%  
  37,000     LGI Homes, Inc.*     1,670,550  
  228,000     Skyline Champion Corp.*     3,575,040  
   

 

 

 
    5,245,590  
   

 

 

 
  Human Resource & Employment Services 0.4%  
  101,462     BG Staffing, Inc.     758,936  
   

 

 

 
  Industrial Machinery 5.3%  
  24,000     John Bean Technologies Corp.     1,782,480  
  37,000     Kadant, Inc.     2,762,050  
  97,000     Kornit Digital Ltd.* (Israel)     2,414,330  
  245,000     va-Q-tec AG* (Germany)     2,338,446  
   

 

 

 
    9,297,306  
   

 

 

 
  Industrial REITs 0.9%  
  131,000     Monmouth Real Estate Investment Corp.     1,578,550  
   

 

 

 
  Insurance Brokers 1.2%  
  48,000     Goosehead Insurance, Inc., Class A*     2,142,240  
   

 

 

 
  Integrated Telecommunication Services 1.5%  
  215,098     Ooma, Inc.*     2,566,119  
   

 

 

 
  Internet Services & Infrastructure 0.9%  
  34,000     Tucows, Inc., Class A*     1,640,840  
   

 

 

 
 

 

65


Table of Contents
WASATCH MICRO CAP VALUE FUND (WAMVX / WGMVX)  

 

 

Schedule of Investments (continued)

 

Shares          Value  
             
  Investment Banking & Brokerage 1.5%  
  462,000     JDC Group AG* (Germany)   $ 2,548,634  
   

 

 

 
  IT Consulting & Other Services 4.4%  
  236,000     Avant Corp. (Japan)     1,672,549  
  60,427     Endava plc ADR* (United Kingdom)     2,124,613  
  157,000     Hackett Group, Inc. (The)     1,997,040  
  68,000     Virtusa Corp.*     1,931,200  
   

 

 

 
    7,725,402  
   

 

 

 
  Mortgage REITs 0.6%  
  219,000     Arbor Realty Trust, Inc.     1,073,100  
   

 

 

 
  Office Services & Supplies 0.9%  
  137,000     Kimball International, Inc., Class B     1,631,670  
   

 

 

 
  Oil & Gas Equipment & Services 0.4%  
  546,000     Mitcham Industries, Inc.*     682,500  
   

 

 

 
  Packaged Foods & Meats 2.6%  
  70,000     Freshpet, Inc.*     4,470,900  
   

 

 

 
  Personal Products 1.6%  
  15,738     Medifast, Inc.     983,625  
  226,000     Sarantis S.A. (Greece)     1,754,389  
   

 

 

 
    2,738,014  
   

 

 

 
  Pharmaceuticals 0.4%  
  45,600     Intra-Cellular Therapies, Inc.*     700,872  
   

 

 

 
  Regional Banks 2.0%  
  150,000     Esquire Financial Holdings, Inc.*     2,257,500  
  56,000     Sound Financial Bancorp, Inc.     1,195,040  
   

 

 

 
    3,452,540  
   

 

 

 
  Research & Consulting Services 3.0%  
  64,132     Franklin Covey Co.*     996,611  
  55,000     IR Japan Holdings Ltd. (Japan)     2,942,057  
  70,000     Red Violet, Inc.*     1,260,000  
   

 

 

 
    5,198,668  
   

 

 

 
  Restaurants 0.6%  
  88,000     Kura Sushi USA, Inc., Class A*     1,052,480  
   

 

 

 
  Semiconductor Equipment 1.6%  
  86,000     Nova Measuring Instruments Ltd.* (Israel)     2,807,900  
   

 

 

 
  Semiconductors 1.3%  
  101,136     SiTime Corp.*     2,201,731  
   

 

 

 
  Systems Software 0.5%  
  62,000     Cyan AG* (Germany)     936,055  
   

 

 

 
  Technology Hardware, Storage & Peripherals 1.5%  
  48,656     MGI Digital Graphic Technology* (France)     1,810,504  
  615,000     One Stop Systems, Inc.*     885,600  
   

 

 

 
    2,696,104  
   

 

 

 
  Thrifts & Mortgage Finance 2.1%  
  62,000     Axos Financial, Inc.*     1,124,060  
  389,000     Mortgage Advice Bureau Holdings Ltd. (United Kingdom)     2,539,042  
   

 

 

 
    3,663,102  
   

 

 

 
  Trading Companies & Distributors 2.3%  
  187,439     Hardwoods Distribution, Inc. (Canada)     1,290,616  
  149,700     Systemax, Inc.     2,654,181  
   

 

 

 
    3,944,797  
   

 

 

 
  Water Utilities 1.0%  
  163,519     Global Water Resources, Inc.     1,666,259  
   

 

 

 
  Total Common Stocks
(cost $167,081,928)
    166,971,469  
   

 

 

 
Shares          Value  
             
  CONVERTIBLE PREFERRED STOCKS 1.1%  
  Oil & Gas Refining & Marketing 1.1%  
  644,656     Vertex Energy, Inc., Pfd., 6.00% PIK, Series B*** †   $ 1,998,434  
   

 

 

 
  Total Convertible Preferred Stocks
(cost $1,903,433)
    1,998,434  
   

 

 

 
  LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST 0.0%  
  Pharmaceuticals 0.0%  
  50,528     Regenacy Pharmaceuticals, LLC* *** †     20,211  
   

 

 

 
  Total Limited Liability Company Membership Interest
(cost $30,001)
    20,211  
   

 

 

 
  WARRANTS 0.0%  
  Oil & Gas Refining & Marketing 0.0%  
  250,000     Vertex Energy, Inc., expiring
12/24/2020* *** †
     
   

 

 

 
  Total Warrants
(cost $95,000)
     
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 3.3%  
  Repurchase Agreement 3.3%  
  $5,798,515     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $5,700,000 of United States Treasury Notes 1.750% due 7/15/22; value: $5,917,917; repurchase proceeds: $5,798,515 (cost $5,798,515)   $ 5,798,515  
   

 

 

 
  Total Short-Term Investments
(cost $5,798,515)
    5,798,515  
   

 

 

 
  Total Investments
(cost $174,908,877) 99.9%§
    174,788,629  
  Other Assets less Liabilities 0.1%     130,479  
   

 

 

 
  NET ASSETS 100.0%   $ 174,919,108  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). The aggregate value of securities purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 at March 31, 2020, amounted to approximately $2,018,645, and represented 1.15% of net assets.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 21.51%.

 

ADR American Depositary Receipt.

 

PIK Payment In Kind.

 

REIT Real Estate Investment Trust.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

 

66


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

At March 31, 2020, Wasatch Micro Cap Value Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      0.8

Australia

      1.1

Canada

      2.1

Egypt

      1.2

France

      2.9

Germany

      5.0

Greece

      1.0

India

      0.7

Israel

      4.2

Japan

      5.6

Taiwan

      0.8

United Kingdom

      6.6

United States

      68.0
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

67


Table of Contents
WASATCH SMALL CAP GROWTH FUND (WAAEX / WIAEX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 98.2%  
  Aerospace & Defense 1.6%  
  379,488     HEICO Corp., Class A   $ 24,249,283  
   

 

 

 
  Airlines 1.3%  
  246,775     Allegiant Travel Co.     20,186,195  
   

 

 

 
  Application Software 18.4%  
  478,225     DocuSign, Inc.*     44,187,990  
  745,476     Five9, Inc.*     56,999,095  
  434,708     Globant S.A.* (Argentina)     38,202,139  
  232,349     HubSpot, Inc.*     30,946,563  
  1,849,334     Medallia, Inc.*     37,060,653  
  553,986     Paylocity Holding Corp.*     48,928,044  
  385,809     Zendesk, Inc.*     24,695,634  
   

 

 

 
    281,020,118  
   

 

 

 
  Automotive Retail 2.4%  
  848,993     Monro, Inc.     37,194,383  
   

 

 

 
  Biotechnology 5.6%  
  493,194     ChemoCentryx, Inc.*     19,816,535  
  959,648     Cytokinetics, Inc.*     11,314,250  
  570,609     Denali Therapeutics, Inc.*     9,991,364  
  247,950     Esperion Therapeutics, Inc.*     7,817,863  
  902,627     Flexion Therapeutics, Inc.*     7,103,674  
  506,667     Frequency Therapeutics, Inc.*     9,023,739  
  1,019,375     Inovio Pharmaceuticals, Inc.*     7,584,150  
  811,622     MacroGenics, Inc.*     4,723,640  
  1,381,294     Sangamo Therapeutics, Inc.*     8,798,843  
   

 

 

 
    86,174,058  
   

 

 

 
  Building Products 1.6%  
  508,112     AAON, Inc.     24,551,972  
   

 

 

 
  Data Processing & Outsourced Services 3.5%  
  473,572     Euronet Worldwide, Inc.*     40,594,592  
  921,402     Repay Holdings Corp.*     13,222,119  
   

 

 

 
    53,816,711  
   

 

 

 
  Food Retail 1.0%  
  436,501     Grocery Outlet Holding Corp.*     14,989,444  
   

 

 

 
  General Merchandise Stores 2.8%  
  904,685     Ollie’s Bargain Outlet Holdings, Inc.*     41,923,103  
   

 

 

 
  Health Care Distributors 1.1%  
  749,595     PetIQ, Inc.*     17,413,092  
   

 

 

 
  Health Care Equipment 2.7%  
  347,554     Cantel Medical Corp.     12,477,189  
  169,047     Insulet Corp.*     28,007,707  
   

 

 

 
    40,484,896  
   

 

 

 
  Health Care Facilities 3.2%  
  1,067,095     Ensign Group, Inc. (The)     40,133,443  
  651,253     Pennant Group, Inc. (The)*     9,221,742  
   

 

 

 
    49,355,185  
   

 

 

 
  Health Care Supplies 3.5%  
  587,012     Neogen Corp.*     39,323,934  
  430,704     Silk Road Medical, Inc.*     13,558,562  
   

 

 

 
    52,882,496  
   

 

 

 
  Health Care Technology 1.3%  
  332,293     Inspire Medical Systems, Inc.*     20,030,622  
   

 

 

 
  Home Improvement Retail 2.1%  
  997,613     Floor & Decor Holdings, Inc., Class A*     32,013,401  
   

 

 

 
  Homebuilding 1.9%  
  629,267     LGI Homes, Inc.*     28,411,405  
   

 

 

 
Shares          Value  
             
  Industrial Machinery 9.9%  
  1,052,443     Barnes Group, Inc.   $ 44,023,691  
  753,960     Helios Technologies, Inc.     28,590,163  
  1,168,658     Kornit Digital Ltd.* (Israel)     29,087,898  
  444,165     RBC Bearings, Inc.*     50,097,370  
   

 

 

 
    151,799,122  
   

 

 

 
  Insurance Brokers 1.3%  
  440,004     Goosehead Insurance, Inc., Class A*     19,637,379  
   

 

 

 
  Leisure Facilities 1.0%  
  305,974     Planet Fitness, Inc., Class A*     14,900,934  
   

 

 

 
  Life Sciences Tools & Services 6.4%  
  340,050     ICON plc* (Ireland)     46,246,800  
  696,684     Medpace Holdings, Inc.*     51,122,672  
   

 

 

 
    97,369,472  
   

 

 

 
  Managed Health Care 2.3%  
  692,100     HealthEquity, Inc.*     35,013,339  
   

 

 

 
  Packaged Foods & Meats 2.6%  
  626,287     Freshpet, Inc.*     40,000,951  
   

 

 

 
  Pharmaceuticals 0.7%  
  717,917     Intra-Cellular Therapies, Inc.*     11,034,384  
   

 

 

 
  Regional Banks 3.0%  
  557,075     Eagle Bancorp, Inc.     16,829,236  
  779,964     Pinnacle Financial Partners, Inc.     29,279,848  
   

 

 

 
    46,109,084  
   

 

 

 
  Restaurants 1.5%  
  745,159     Chuy’s Holdings, Inc.*     7,503,751  
  400,736     Shake Shack, Inc., Class A*     15,123,777  
   

 

 

 
    22,627,528  
   

 

 

 
  Semiconductors 3.0%  
  276,984     Monolithic Power Systems, Inc.     46,383,741  
   

 

 

 
  Specialty Stores 3.8%  
  425,609     Five Below, Inc.*     29,954,362  
  1,481,967     National Vision Holdings, Inc.*     28,779,799  
   

 

 

 
    58,734,161  
   

 

 

 
  Systems Software 6.8%  
  413,039     CyberArk Software Ltd.* (Israel)     35,339,617  
  310,400     Proofpoint, Inc.*     31,843,936  
  858,338     Rapid7, Inc.*     37,191,785  
   

 

 

 
    104,375,338  
   

 

 

 
  Trading Companies & Distributors 1.9%  
  397,840     SiteOne Landscape Supply, Inc.*     29,288,981  
   

 

 

 
  Total Common Stocks
(cost $1,362,171,772)
    1,501,970,778  
   

 

 

 
  PREFERRED STOCKS 0.6%  
  Biotechnology 0.0%  
  677,966     Nanosys, Inc., Series D Pfd.* *** †     325,424  
  161,519     Nanosys, Inc., Series E Pfd.* *** †     188,977  
   

 

 

 
    514,401  
   

 

 

 
  Systems Software 0.6%  
  1,114,610     DataStax, Inc., Series E Pfd.* *** †     8,359,575  
   

 

 

 
  Total Preferred Stocks
(cost $10,184,941)
    8,873,976  
   

 

 

 
 

 

68


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

Shares          Value  
             
  LIMITED PARTNERSHIP INTEREST 0.1%  
  Asset Management & Custody Banks 0.1%  
  1     Greenspring Global Partners II-B, L.P.* *** †   $ 813,460  
  1     Greenspring Global Partners III-B, L.P.* *** †     542,714  
   

 

 

 
    1,356,174  
   

 

 

 
  Total Limited Partnership Interest
(cost $2,293,091)
    1,356,174  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 1.2%  
  Repurchase Agreement 1.2%  
  $19,057,062     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $18,725,000 of United States Treasury Notes 1.750% due 7/15/22; value: $19,440,875; repurchase proceeds: $19,057,062 (cost $19,057,062)   $ 19,057,062  
   

 

 

 
  Total Short-Term Investments
(cost $19,057,062)
    19,057,062  
   

 

 

 
  Total Investments
(cost $1,393,706,866) 100.1%
    1,531,257,990  
  Liabilities less Other Assets (0.1%)     (2,230,603
   

 

 

 
  NET ASSETS 100.0%   $ 1,529,027,387  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). The aggregate value of securities purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 at March 31, 2020, amounted to approximately $10,230,150, and represented 0.67% of net assets.

 

See Notes to Financial Statements.

 

 

 

 

At March 31, 2020, Wasatch Small Cap Growth Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      2.5

Ireland

      3.1

Israel

      4.3

United States

      90.1
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

69


Table of Contents

 

WASATCH SMALL CAP VALUE FUND (WMCVX / WICVX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 99.2%  
  Advertising 1.2%  
  2,203,465     National CineMedia, Inc.   $ 7,183,296  
   

 

 

 
  Aerospace & Defense 1.5%  
  138,490     HEICO Corp., Class A     8,849,511  
   

 

 

 
  Airlines 3.0%  
  108,416     Allegiant Travel Co.     8,868,429  
  191,133     Copa Holdings S.A., Class A (Panama)     8,656,413  
   

 

 

 
    17,524,842  
   

 

 

 
  Apparel Retail 0.8%  
  594,625     American Eagle Outfitters, Inc.     4,727,269  
   

 

 

 
  Application Software 4.0%  
  268,351     Ebix, Inc.     4,073,568  
  439,073     Medallia, Inc.*     8,799,023  
  399,431     Upland Software, Inc.*     10,712,740  
   

 

 

 
    23,585,331  
   

 

 

 
  Asset Management & Custody Banks 5.0%  
  511,671     Artisan Partners Asset Management, Inc., Class A     10,995,810  
  336,282     Hamilton Lane, Inc., Class A     18,599,757  
   

 

 

 
    29,595,567  
   

 

 

 
  Auto Parts & Equipment 2.2%  
  613,717     Dana, Inc.     4,793,130  
  143,824     Dorman Products, Inc.*     7,949,152  
   

 

 

 
    12,742,282  
   

 

 

 
  Automotive Retail 4.8%  
  872,259     Camping World Holdings, Inc., Class A     4,963,154  
  78,286     Lithia Motors, Inc., Class A     6,403,012  
  384,157     Monro, Inc.     16,829,918  
   

 

 

 
    28,196,084  
   

 

 

 
  Biotechnology 1.1%  
  91,303     Ligand Pharmaceuticals, Inc.*     6,639,554  
   

 

 

 
  Building Products 1.2%  
  89,909     Trex Co., Inc.*     7,205,307  
   

 

 

 
  Commercial Printing 2.0%  
  224,618     Cimpress plc*     11,949,678  
   

 

 

 
  Commodity Chemicals 2.9%  
  1,290,992     Valvoline, Inc.     16,899,085  
   

 

 

 
  Construction & Engineering 0.8%  
  294,741     Construction Partners, Inc., Class A*     4,978,175  
   

 

 

 
  Data Processing & Outsourced Services 3.1%  
  210,965     Euronet Worldwide, Inc.*     18,083,920  
   

 

 

 
  Diversified Banks 0.6%  
  2,107,384     City Union Bank Ltd. (India)     3,591,264  
   

 

 

 
  Electrical Components & Equipment 0.9%  
  89,087     Regal Beloit Corp.     5,608,027  
   

 

 

 
  Electronic Manufacturing Services 4.4%  
  473,370     Fabrinet*     25,827,067  
   

 

 

 
  General Merchandise Stores 1.3%  
  161,246     Ollie’s Bargain Outlet Holdings, Inc.*     7,472,140  
   

 

 

 
  Health Care Equipment 1.7%  
  273,880     Cantel Medical Corp.     9,832,292  
   

 

 

 
Shares          Value  
             
  Health Care Facilities 3.1%  
  488,644     Ensign Group, Inc. (The)   $ 18,377,901  
   

 

 

 
  Health Care Services 2.3%  
  97,407     LHC Group, Inc.*     13,656,461  
   

 

 

 
  Home Furnishings 0.6%  
  582,418     Lovesac Co. (The)*     3,395,497  
   

 

 

 
  Homebuilding 3.5%  
  242,624     LGI Homes, Inc.*     10,954,473  
  621,598     Skyline Champion Corp.*     9,746,657  
   

 

 

 
    20,701,130  
   

 

 

 
  Hotel & Resort REITs 0.8%  
  438,115     Xenia Hotels & Resorts, Inc.     4,512,585  
   

 

 

 
  Industrial Machinery 9.4%  
  592,011     Altra Industrial Motion Corp.     10,354,272  
  195,110     Barnes Group, Inc.     8,161,451  
  275,795     Helios Technologies, Inc.     10,458,147  
  357,760     Kadant, Inc.     26,706,784  
   

 

 

 
    55,680,654  
   

 

 

 
  Industrial REITs 1.9%  
  945,408     Monmouth Real Estate Investment Corp.     11,392,166  
   

 

 

 
  Investment Banking & Brokerage 2.3%  
  476,434     Moelis & Co., Class A     13,387,795  
   

 

 

 
  Leisure Facilities 1.1%  
  137,777     Planet Fitness, Inc., Class A*     6,709,740  
   

 

 

 
  Life Sciences Tools & Services 2.5%  
  110,471     ICON plc* (Ireland)     15,024,056  
   

 

 

 
  Mortgage REITs 2.5%  
  1,788,378     Arbor Realty Trust, Inc.     8,763,052  
  1,236,950     Ladder Capital Corp.     5,863,143  
   

 

 

 
    14,626,195  
   

 

 

 
  Office Services & Supplies 0.9%  
  229,244     Herman Miller, Inc.     5,089,217  
   

 

 

 
  Paper Products 0.8%  
  219,533     Domtar Corp.     4,750,694  
   

 

 

 
  Personal Products 0.9%  
  235,916     Nu Skin Enterprises, Inc., Class A     5,154,765  
   

 

 

 
  Property & Casualty Insurance 1.0%  
  148,819     Employers Holdings, Inc.     6,028,658  
   

 

 

 
  Publishing 0.3%  
  164,126     Meredith Corp.     2,005,620  
   

 

 

 
  Regional Banks 8.1%  
  610,624     Boston Private Financial Holdings, Inc.     4,365,962  
  454,165     FB Financial Corp.     8,956,134  
  362,243     Pinnacle Financial Partners, Inc.     13,598,602  
  187,056     South State Corp.     10,985,799  
  429,960     Webster Financial Corp.     9,846,084  
   

 

 

 
    47,752,581  
   

 

 

 
  Restaurants 0.8%  
  54,465     Cracker Barrel Old Country Store, Inc.     4,532,577  
   

 

 

 
  Semiconductor Equipment 2.0%  
  358,134     Nova Measuring Instruments Ltd.* (Israel)     11,693,075  
   

 

 

 
  Semiconductors 1.7%  
  641,877     Tower Semiconductor Ltd.* (Israel)     10,218,682  
   

 

 

 
 

 

70


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

Shares          Value  
             
  Specialized REITs 3.0%  
  594,439     National Storage Affiliates Trust   $ 17,595,394  
   

 

 

 
  Specialty Chemicals 3.4%  
  210,923     Innospec, Inc.     14,657,039  
  149,554     Minerals Technologies, Inc.     5,422,828  
   

 

 

 
    20,079,867  
   

 

 

 
  Thrifts & Mortgage Finance 1.9%  
  605,403     Axos Financial, Inc.*     10,975,956  
   

 

 

 
  Trucking 1.9%  
  333,052     Knight-Swift Transportation Holdings, Inc.     10,924,106  
   

 

 

 
  Total Common Stocks
(cost $759,477,950)
    584,756,063  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 0.4%  
  Repurchase Agreement 0.4%  
  $2,554,797     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $2,510,000 of United States Treasury Notes 1.750% due 7/15/22; value: $2,605,960; repurchase proceeds: $2,554,797 (cost $2,554,797)   $ 2,554,797  
   

 

 

 
  Total Short-Term Investments
(cost $2,554,797)
    2,554,797  
   

 

 

 
  Total Investments
(cost $762,032,747) 99.6%§
    587,310,860  
  Other Assets less Liabilities 0.4%     2,246,043  
   

 

 

 
  NET ASSETS 100.0%   $ 589,556,903  
   

 

 

 
 

*Non-income producing.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 0.61%.

 

REIT Real Estate Investment Trust.

 

See Notes to Financial Statements.

 

 

 

 

At March 31, 2020, Wasatch Small Cap Value Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

India

      0.6

Ireland

      2.6

Israel

      3.7

Panama

      1.5

United States

      91.6
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

71


Table of Contents

 

WASATCH ULTRA GROWTH FUND (WAMCX / WGMCX)  

 

 

Schedule of Investments

 

Shares          Value  
             
  COMMON STOCKS 96.3%  
  Alternative Carriers 1.7%  
  186,538     Bandwidth, Inc., Class A*   $ 12,552,142  
   

 

 

 
  Application Software 16.0%  
  191,910     Avalara, Inc.*     14,316,486  
  164,485     DocuSign, Inc.*     15,198,414  
  255,718     Five9, Inc.*     19,552,198  
  99,192     Globant S.A.* (Argentina)     8,716,993  
  125,557     HubSpot, Inc.*     16,722,937  
  655,970     Medallia, Inc.*     13,145,639  
  207,026     Paylocity Holding Corp.*     18,284,536  
  232,976     Zendesk, Inc.*     14,912,794  
   

 

 

 
    120,849,997  
   

 

 

 
  Automotive Retail 0.9%  
  153,722     Monro, Inc.     6,734,561  
   

 

 

 
  Biotechnology 15.0%  
  139,152     Atara Biotherapeutics, Inc.*     1,184,184  
  458,204     Castle Biosciences, Inc.*     13,659,061  
  213,998     ChemoCentryx, Inc.*     8,598,440  
  780,555     Cytokinetics, Inc.*     9,202,743  
  189,807     Denali Therapeutics, Inc.*     3,323,521  
  198,404     Esperion Therapeutics, Inc.*     6,255,678  
  284,886     Exact Sciences Corp.*     16,523,388  
  585,286     Flexion Therapeutics, Inc.*     4,606,201  
  227,868     Frequency Therapeutics, Inc.*     4,058,329  
  1,014,882     Inovio Pharmaceuticals, Inc.*     7,550,722  
  87,474     Ligand Pharmaceuticals, Inc.*     6,361,109  
  676,664     MacroGenics, Inc.*     3,938,185  
  3,260,094     MEI Pharma, Inc.*     5,248,751  
  1,617,910     Sangamo Therapeutics, Inc.*     10,306,087  
  78,647     Seattle Genetics, Inc.*     9,074,291  
  1,407,074     Selecta Biosciences, Inc.*     3,391,048  
   

 

 

 
    113,281,738  
   

 

 

 
  Building Products 2.8%  
  111,288     AAON, Inc.     5,377,436  
  197,751     Trex Co., Inc.*     15,847,765  
   

 

 

 
    21,225,201  
   

 

 

 
  Construction & Engineering 0.7%  
  130,491     NV5 Global, Inc.*     5,387,973  
   

 

 

 
  Data Processing & Outsourced Services 0.8%  
  117,220     Square, Inc.*     6,139,984  
   

 

 

 
  Diversified Banks 0.6%  
  2,489,169     City Union Bank Ltd. (India)     4,241,877  
   

 

 

 
  Electronic Equipment & Instruments 1.1%  
  807,221     nLight, Inc.*     8,467,748  
   

 

 

 
  Electronic Manufacturing Services 1.1%  
  75,925     IPG Photonics Corp.*     8,373,009  
   

 

 

 
  Financial Exchanges & Data 1.1%  
  206,512     Tradeweb Markets, Inc., Class A     8,681,764  
   

 

 

 
  Food Distributors 0.2%  
  186,752     Chefs’ Warehouse, Inc. (The)*     1,880,593  
   

 

 

 
  Food Retail 2.1%  
  471,529     Grocery Outlet Holding Corp.*     16,192,306  
   

 

 

 
  General Merchandise Stores 2.3%  
  378,261     Ollie’s Bargain Outlet Holdings, Inc.*     17,528,615  
   

 

 

 
Shares          Value  
             
  Health Care Equipment 8.7%  
  417,208     AtriCure, Inc.*   $ 14,014,017  
  701,462     CryoLife, Inc.*     11,868,737  
  413,406     Glaukos Corp.*     12,757,709  
  54,536     Insulet Corp.*     9,035,525  
  276,769     Tandem Diabetes Care, Inc.*     17,810,085  
   

 

 

 
    65,486,073  
   

 

 

 
  Health Care Services 0.9%  
  437,732     Exagen, Inc.* §§     6,977,448  
   

 

 

 
  Health Care Supplies 2.1%  
  495,412     Silk Road Medical, Inc.*     15,595,570  
   

 

 

 
  Health Care Technology 5.7%  
  206,597     Inspire Medical Systems, Inc.*     12,453,667  
  275,646     Tabula Rasa HealthCare, Inc.*     14,413,530  
  101,030     Veeva Systems, Inc., Class A*     15,798,061  
   

 

 

 
    42,665,258  
   

 

 

 
  Heavy Electrical Equipment 1.0%  
  499,468     TPI Composites, Inc.*     7,382,137  
   

 

 

 
  Home Improvement Retail 1.4%  
  340,857     Floor & Decor Holdings, Inc., Class A*     10,938,101  
   

 

 

 
  Homebuilding 1.1%  
  191,688     LGI Homes, Inc.*     8,654,713  
   

 

 

 
  Industrial Machinery 3.4%  
  240,288     Barnes Group, Inc.     10,051,247  
  632,338     Kornit Digital Ltd.* (Israel)     15,738,893  
   

 

 

 
    25,790,140  
   

 

 

 
  Industrial REITs 1.4%  
  848,929     Monmouth Real Estate Investment Corp.     10,229,594  
   

 

 

 
  Insurance Brokers 0.9%  
  154,259     Goosehead Insurance, Inc., Class A*     6,884,579  
   

 

 

 
  Internet & Direct Marketing Retail 1.1%  
  157,739     Wayfair, Inc., Class A*     8,429,572  
   

 

 

 
  IT Consulting & Other Services 1.1%  
  230,374     Endava plc ADR* (United Kingdom)     8,099,950  
   

 

 

 
  Life Sciences Tools & Services 2.1%  
  115,384     ICON plc* (Ireland)     15,692,224  
   

 

 

 
  Oil & Gas Equipment & Services 0.4%  
  625,384     Solaris Oilfield Infrastructure, Inc., Class A     3,283,266  
   

 

 

 
  Packaged Foods & Meats 3.3%  
  388,157     Freshpet, Inc.*     24,791,588  
   

 

 

 
  Pharmaceuticals 1.7%  
  444,493     BioDelivery Sciences International, Inc.*     1,684,628  
  562,875     Intra-Cellular Therapies, Inc.*     8,651,389  
  526,410     Optinose, Inc.*     2,363,581  
   

 

 

 
    12,699,598  
   

 

 

 
  Regional Banks 2.5%  
  411,046     Bank OZK     6,864,468  
  110,478     Eagle Bancorp, Inc.     3,337,540  
  253,041     Esquire Financial Holdings, Inc.*     3,808,267  
  125,083     Pinnacle Financial Partners, Inc.     4,695,616  
   

 

 

 
    18,705,891  
   

 

 

 
  Restaurants 0.3%  
  241,893     Chuy’s Holdings, Inc.*     2,435,863  
   

 

 

 
  Semiconductor Equipment 1.5%  
  337,399     Nova Measuring Instruments Ltd.* (Israel)     11,016,077  
   

 

 

 
 

 

72


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  MARCH 31, 2020 (UNAUDITED)

 

 

 

    
Shares
         Value  
             
  Semiconductors 2.5%  
  101,676     Monolithic Power Systems, Inc.   $ 17,026,663  
  42,910     NVE Corp.     2,232,607  
   

 

 

 
    19,259,270  
   

 

 

 
  Specialty Chemicals 1.4%  
  103,753     Balchem Corp.     10,242,496  
   

 

 

 
  Specialty Stores 1.7%  
  183,727     Five Below, Inc.*     12,930,706  
   

 

 

 
  Systems Software 2.2%  
  162,583     Proofpoint, Inc.*     16,679,390  
   

 

 

 
  Trucking 1.5%  
  340,768     Knight-Swift Transportation Holdings, Inc.     11,177,190  
   

 

 

 
  Total Common Stocks
(cost $758,000,684)
    727,584,202  
   

 

 

 
  PREFERRED STOCKS 0.0%  
  Biotechnology 0.0%  
  169,492     Nanosys, Inc., Series D Pfd.* *** †     81,356  
  40,380     Nanosys, Inc., Series E Pfd.* *** †     47,245  
   

 

 

 
    128,601  
   

 

 

 
  Total Preferred Stocks
(cost $546,237)
    128,601  
   

 

 

 
  LIMITED PARTNERSHIP INTEREST 0.2%  
  Asset Management & Custody Banks 0.2%  
  1     Greenspring Global Partners II-B, L.P.* *** †     732,108  
  1     Greenspring Global Partners III-B, L.P.* *** †     542,714  
   

 

 

 
    1,274,822  
   

 

 

 
  Total Limited Partnership Interest
(cost $2,118,351)
    1,274,822  
   

 

 

 
  WARRANTS 0.1%  
  Biotechnology 0.1%  
  636,960     Selecta Biosciences, Inc., 12/23/2024* *** †     796,200  
   

 

 

 
  Total Warrants
(cost $79,620)
    796,200  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 3.2%  
  Repurchase Agreement 3.2%  
  $24,090,965     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $23,670,000 of United States Treasury Notes 1.750% due 7/15/22; value: $24,574,928; repurchase proceeds: $24,090,965 (cost $24,090,965)   $ 24,090,965  
   

 

 

 
  Total Short-Term Investments
(cost $24,090,965)
    24,090,965  
   

 

 

 
  Total Investments
(cost $784,835,857) 99.8%§
    753,874,790  
  Other Assets less Liabilities 0.2%     1,140,762  
   

 

 

 
  NET ASSETS 100.0%   $ 755,015,552  
   

 

 

 
 

*Non-income producing.

 

***Security was fair valued under procedures adopted by the Board of Trustees (see Note 12).

 

†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). The aggregate value of securities purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 at March 31, 2020, amounted to approximately $1,403,423, and represented 0.19% of net assets.

 

§The aggregate amount of foreign securities fair valued pursuant to a systematic valuation model as a percent of net assets was 0.56%.

 

§§The aggregate value of illiquid holdings at March 31, 2020, amounted to approximately $6,977,448, and represented 0.92% of net assets.

 

ADR American Depositary Receipt.

 

REIT Real Estate Investment Trust.

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

At March 31, 2020, Wasatch Ultra Growth Fund’s investments, excluding short-term investments, were in the following countries:

 

Country   %

Argentina

      1.2

India

      0.6

Ireland

      2.1

Israel

      3.7

United Kingdom

      1.1

United States

      91.3
   

 

 

 

TOTAL

      100.0 %
   

 

 

 
 

 

73


Table of Contents
WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX)   MARCH 31, 2020 (UNAUDITED)

 

 

Schedule of Investments

 

Principal
Amount
         Value  
             
  U.S. GOVERNMENT OBLIGATIONS 98.1%

 

  $87,900,000     U.S. Treasury Bond, 2.25%, 8/15/46   $ 106,104,914  
  9,500,000     U.S. Treasury Bond, 2.25%, 8/15/49     11,573,301  
  25,150,000     U.S. Treasury Bond, 2.50%, 2/15/45     31,446,342  
  3,500,000     U.S. Treasury Bond, 2.875%, 5/15/49     4,775,723  
  45,530,000     U.S. Treasury Bond, 3.00%, 8/15/48     63,244,016  
  33,000,000     U.S. Treasury Strip, principal only, 8/15/40     25,969,717  
  96,000,000     U.S. Treasury Strip, principal only, 5/15/44     68,753,490  
  136,700,000     U.S. Treasury Strip, principal only, 8/15/45     96,578,643  
   

 

 

 
  Total U.S. Government Obligations
(cost $304,350,984)
    408,446,146  
   

 

 

 
Principal
Amount
         Value  
             
  SHORT-TERM INVESTMENTS 1.7%  
  Repurchase Agreement 1.7%  
  $ 7,018,524     Repurchase Agreement dated 3/31/20, 0.00% due 4/1/20 with Fixed Income Clearing Corp. collateralized by $6,900,000 of United States Treasury Notes 2.375% due 3/15/22; value $7,163,794; repurchase proceeds: $7,018,524 (cost $7,018,524)   $ 7,018,524  
   

 

 

 
  Total Short-Term Investments
(cost $7,018,524)
    7,018,524  
   

 

 

 
  Total Investments
(cost $311,369,508) 99.8%
    415,464,670  
  Other Assets less Liabilities 0.2%     963,439  
   

 

 

 
  NET ASSETS 100.0%   $ 416,428,109  
   

 

 

 
  See Notes to Financial Statements.

 

 

 

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75


Table of Contents
WASATCH FUNDS  

 

 

Statements of Assets and Liabilities

 

        CORE
GROWTH
FUND
     EMERGING
INDIA
FUND
    

EMERGING
MARKETS
SELECT

FUND

     

Assets:

                    

Investments, at cost

 

Unaffiliated issuers

       $ 1,714,731,544        $ 208,838,307        $ 33,051,994

Repurchase agreements

         16,332,508                  
      

 

 

        

 

 

        

 

 

 
       $ 1,731,064,052        $ 208,838,307        $ 33,051,994
      

 

 

        

 

 

        

 

 

 

Investments, at market value

 

Unaffiliated issuers

       $ 1,868,906,502        $ 207,585,536        $ 35,707,695

Repurchase agreements

         16,332,508                  
      

 

 

        

 

 

        

 

 

 
         1,885,239,010          207,585,536          35,707,695

Cash

                  1          90,831

Foreign currency on deposit (cost of $62,148, $1,762,790, $1, $11,273, $17,898, $7,210, $0, $0 and $112,217, respectively)

         62,122          1,762,082          1

Receivable for investment securities sold

         6,990,190          1,164,818          411,914

Capital shares receivable

         3,895,398          270,556          582,630

Interest and dividends receivable

         662,671          213,969          34,280

Receivable from Investment Advisor

                          

Prepaid expenses and other assets

         112,209          33,323          4,747
      

 

 

        

 

 

        

 

 

 

Total Assets

         1,896,961,600          211,030,285          36,832,098
      

 

 

        

 

 

        

 

 

 

Liabilities:

 

Bank overdraft

         55,581                  

Payable for securities purchased

         5,749,875                   55,845

Capital shares payable

         3,150,249          1,159,885         

Dividends payable to shareholders

                          

Payable to Advisor

         1,666,935          268,666          29,230

Accrued fund administration fees

         214,743          29,574          4,372

Accrued expenses and other liabilities

         438,735          200,410          69,925

Foreign capital gains taxes payable

         20,016          42,689         

Line of credit payable

                  8,179,937         
      

 

 

        

 

 

        

 

 

 

Total Liabilities

         11,296,134          9,881,161          159,372
      

 

 

        

 

 

        

 

 

 

Net Assets

       $ 1,885,665,466        $ 201,149,124        $ 36,672,726
      

 

 

        

 

 

        

 

 

 

Net Assets Consist of:

 

Capital stock

       $ 343,311        $ 621,164        $ 37,711

Paid-in-capital in excess of par

         1,696,523,761          209,841,583          38,790,253

Distributable earnings (accumulated loss)

         188,798,394          (9,313,623 )          (2,155,238 )
      

 

 

        

 

 

        

 

 

 

Net Assets

       $ 1,885,665,466        $ 201,149,124        $ 36,672,726
      

 

 

        

 

 

        

 

 

 

Net Assets

 

Investor Class

         1,147,310,179          115,873,347          8,956,989

Institutional Class

         738,355,287          85,275,777          27,715,737

Capital Stock Issued and Outstanding (Unlimited number of
shares authorized, $0.01 par value)

                    

Investor Class

         20,977,734          35,911,762          934,706

Institutional Class

         13,353,390          26,204,620          2,836,347

NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE

                    

Investor Class

       $ 54.69        $ 3.23        $ 9.58
      

 

 

        

 

 

        

 

 

 

Institutional Class

       $ 55.29        $ 3.25        $ 9.77
      

 

 

        

 

 

        

 

 

 

 

1 

Fund inception date was October 1, 2019.

See Notes to Financial Statements.

 

76


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

EMERGING
MARKETS
SMALL CAP
FUND
  FRONTIER
EMERGING
SMALL COUNTRIES
FUND
  GLOBAL
OPPORTUNITIES
FUND
  GLOBAL
SELECT
FUND1
  GLOBAL
VALUE
FUND
  INTERNATIONAL
GROWTH
FUND
           
                     
                     
  $ 225,563,343     $ 47,587,713     $ 85,175,665     $ 10,877,746     $ 115,034,953     $ 749,638,393
    1,507,568       621,965       1,146,292             1,719,483       15,256,660
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 227,070,911     $ 48,209,678     $ 86,321,957     $ 10,877,746     $ 116,754,436     $ 764,895,053
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
  $ 278,294,840     $ 39,506,467     $ 95,879,211     $ 9,505,707     $ 98,691,789     $ 883,686,661
    1,507,568       621,965       1,146,292             1,719,483       15,256,660
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    279,802,408       40,128,432       97,025,503       9,505,707       100,411,272       898,943,321
    1       260,343             49,206             4
   
    
11,268

      17,879       7,217                   112,378
    1,431,122       89,140       36,537             1,224,086       2,781,108
    488,759       5,600       67,537       12,118       9,898       1,194,175
    1,083,866       68,085       104,100       4,346       792,842       3,360,065
                      12,688            
    44,740       19,185       23,497       48,144       15,868       76,775
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    282,862,164       40,588,664       97,264,391       9,632,209       102,453,966       906,467,826
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
                                 
    147,997             182             1,292,140       5,144,703
    631,415       89,135       103,183       861       143,327       1,461,743
                            11,469      
    449,031       55,701       110,383             64,966       1,022,735
    43,781       8,414       13,672       666       21,454       132,924
    219,584       90,900       88,539       487       167,213       315,280
    621,297       383,139       13,520                   20,859
                                 
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    2,113,105       627,289       329,479       2,014       1,700,569       8,098,244
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 280,749,059     $ 39,961,375     $ 96,934,912     $ 9,630,195     $ 100,753,397     $ 898,369,582
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
  $ 1,318,428     $ 192,253     $ 371,103     $ 10,697     $ 175,005     $ 371,343
    223,498,088       155,860,568       86,929,597       11,002,628       292,748,059       747,927,055
    55,932,543       (116,091,446 )       9,634,212       (1,383,130 )       (192,169,667 )       150,071,184
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 280,749,059     $ 39,961,375     $ 96,934,912     $ 9,630,195     $ 100,753,397     $ 898,369,582
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    152,500,570       30,196,523       78,268,265       2,100,474       95,143,390       425,430,375
    128,248,489       9,764,852       18,666,647       7,529,721       5,610,007       472,939,207
                     
    71,870,475       14,562,296       29,997,823       233,695       16,524,380       17,624,656
    59,972,309       4,663,021       7,112,469       835,963       976,081       19,509,683
                     
  $ 2.12     $ 2.07     $ 2.61     $ 8.99     $ 5.76     $ 24.14
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 2.14     $ 2.09     $ 2.62     $ 9.01     $ 5.75     $ 24.24
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

77


Table of Contents

 

WASATCH FUNDS  

 

 

Statements of Assets and Liabilities (continued)

 

        INTERNATIONAL
OPPORTUNITIES
FUND
     INTERNATIONAL
SELECT
FUND1
     MICRO
CAP
FUND2
     

Assets:

                    

Investments, at cost

 

Unaffiliated issuers

       $ 357,717,686        $ 3,094,156        $ 438,967,545

Affiliated issuers3

                           24,875,774

Repurchase agreements

         14,461,322                   3,323,503
      

 

 

        

 

 

        

 

 

 
       $ 372,179,008        $ 3,094,156        $ 467,166,822
      

 

 

        

 

 

        

 

 

 

Investments, at market value

 

Unaffiliated issuers

       $ 432,188,884        $ 2,798,929        $ 432,117,460

Affiliated issuers3

                           14,532,568

Repurchase agreements

         14,461,322                   3,323,503
      

 

 

        

 

 

        

 

 

 
         446,650,206          2,798,929          449,973,531

Cash

         2                   2

Foreign currency on deposit (cost of $1,153,833, $872, $5, $4,761, $0, $13,934, $16,458 and $0, respectively)

         1,153,833          877          5

Receivable for investment securities sold

         5,395,894          6,976          3,156,904

Capital shares receivable

         810,346          6,000          584,975

Interest and dividends receivable

         1,388,843          1,700          82,787

Receivable from Investment Advisor

                  17,749         

Prepaid expenses and other assets

         31,151          47,652          31,867
      

 

 

        

 

 

        

 

 

 

Total Assets

         455,430,275          2,879,883          453,830,071
      

 

 

        

 

 

        

 

 

 

Liabilities:

 

Payable for securities purchased

         9,260,502                   2,252,864

Capital shares payable

         540,311                   519,790

Dividends payable to shareholders

                          

Payable to Advisor

         684,656                   614,096

Accrued fund administration fees

         52,245          149          54,080

Accrued expenses and other liabilities

         173,851          647          88,029

Foreign capital gains taxes payable

                          

Line of credit payable

                  82,759         
      

 

 

        

 

 

        

 

 

 

Total Liabilities

         10,711,565          83,555          3,528,859
      

 

 

        

 

 

        

 

 

 

Net Assets

       $ 444,718,710        $ 2,796,328        $ 450,301,212
      

 

 

        

 

 

        

 

 

 

Net Assets Consist of:

 

Capital stock

       $ 1,453,902        $ 2,948        $ 785,330

Paid-in-capital in excess of par

         375,940,143          3,110,655          444,741,795

Distributable earnings (accumulated loss)

         67,324,665          (317,275 )          4,774,087
      

 

 

        

 

 

        

 

 

 

Net Assets

       $ 444,718,710        $ 2,796,328        $ 450,301,212
      

 

 

        

 

 

        

 

 

 

Net Assets

 

Investor Class

         98,087,274          1,674,992          435,739,367

Institutional Class

         346,631,436          1,121,336          14,561,845

Capital Stock Issued and Outstanding (Unlimited number of shares authorized, $0.01 par value)

                    

Investor Class

         32,391,792          176,945          75,990,010

Institutional Class

         112,998,414          117,846          2,542,959

NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE

                    

Investor Class

       $ 3.03        $ 9.47        $ 5.73
      

 

 

        

 

 

        

 

 

 

Institutional Class

       $ 3.07        $ 9.52        $ 5.73
      

 

 

        

 

 

        

 

 

 

 

1 

Fund inception date was October 1, 2019.

 

2 

Institutional class inception date was January 31, 2020.

 

3 

See Note 8 for information on affiliated issuers.

See Notes to Financial Statements.

 

78


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

MICRO CAP
VALUE
FUND2
  SMALL CAP
GROWTH
FUND
  SMALL CAP
VALUE
FUND
  ULTRA
GROWTH
FUND2
  U.S.
TREASURY
FUND
         
                 
                 
  $ 169,110,362     $ 1,374,649,804     $ 759,477,950     $ 760,744,892     $ 304,350,984
                           
    5,798,515       19,057,062       2,554,797       24,090,965       7,018,524
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 174,908,877     $ 1,393,706,866     $ 762,032,747     $ 784,835,857     $ 311,369,508
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
  $ 168,990,114     $ 1,512,200,928     $ 584,756,063     $ 729,783,825     $ 408,446,146
                           
    5,798,515       19,057,062       2,554,797       24,090,965       7,018,524
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    174,788,629       1,531,257,990       587,310,860       753,874,790       415,464,670
    110,773       8       3       225,504       2
   
    
4,759

            13,928       16,451      
    1,788,634       3,441,147       2,337,818            
    38,981       2,440,617       1,868,472       3,179,795       1,667,703
    140,866       218,376       764,630       52,380       567,168
                           
    54,857       103,481       97,512       61,008       25,407
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    176,927,499       1,537,461,619       592,393,223       757,409,928       417,724,950
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
    1,306,837       4,514,516       614,104       675,042      
    327,779       2,019,600       1,472,213       861,855       934,607
                            79,943
    246,446       1,346,802       541,975       645,466       175,096
    16,192       194,656       76,081       50,208       25,623
    108,032       358,658       125,222       161,246       81,572
    3,105             6,725       559      
                           
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    2,008,391       8,434,232       2,836,320       2,394,376       1,296,841
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 174,919,108     $ 1,529,027,387     $ 589,556,903     $ 755,015,552     $ 416,428,109
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
  $ 748,208     $ 508,163     $ 1,154,221     $ 320,912     $ 182,303
    175,934,008       1,334,088,905       790,839,623       765,562,126       325,922,376
    (1,763,108 )       194,430,319       (202,436,941 )       (10,867,486 )       90,323,430
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 174,919,108     $ 1,529,027,387     $ 589,556,903     $ 755,015,552     $ 416,428,109
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
    171,168,909       805,265,217       305,551,053       730,448,695       416,428,109
    3,750,199       723,762,170       284,005,850       24,566,857      
                 
    73,219,252       26,903,502       60,019,334       31,047,072       18,230,321
    1,601,569       23,912,840       55,402,718       1,044,139      
                 
  $ 2.34     $ 29.93     $ 5.09     $ 23.53     $ 22.84
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 2.34     $ 30.27     $ 5.13     $ 23.53     $
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

79


Table of Contents
WASATCH FUNDS  

 

 

Statements of Operations

 

        CORE
GROWTH
FUND
     EMERGING
INDIA
FUND
    

EMERGING
MARKETS
SELECT

FUND

     

Investment Income:

 

Interest

       $ 12,074        $ 990        $

Dividends2

 

Unaffiliated issuers

         11,071,992          1,159,114          134,585
      

 

 

        

 

 

        

 

 

 

Total investment income

         11,084,066          1,160,104          134,585
      

 

 

        

 

 

        

 

 

 

Expenses:

 

Investment advisory fees

         11,897,805          1,870,213          221,413

Shareholder servicing fees — Investor Class

         791,316          160,494          16,301

Shareholder servicing fees — Institutional Class

         13,619          1,650          2,375

Fund administration fees

         222,907          31,782          4,877

Fund accounting fees

         128,181          27,882          12,731

Reports to shareholders — Investor Class

         82,625          22,423          4,727

Reports to shareholders — Institutional Class

         59,869          2,052          1,041

Custody fees

         8,383          63,485          12,791

Federal and state registration fees — Investor Class

         23,976          11,574          4,636

Federal and state registration fees — Institutional Class

         28,115          11,367          5,502

Legal fees

         76,603          9,437          1,482

Trustees’ fees

         163,003          19,746          3,003

Interest

         40,602          20,346          3,242

Audit fees

         18,589          18,590          18,590

Other expenses

         49,977          40,305          16,680
      

 

 

        

 

 

        

 

 

 

Total expenses before reimbursement

         13,605,570          2,311,346          329,391

Reimbursement of expenses by Advisor

         (131,713 )                   (44,255 )
      

 

 

        

 

 

        

 

 

 

Net Expenses

         13,473,857          2,311,346          285,136
      

 

 

        

 

 

        

 

 

 

Net Investment Income (Loss)

         (2,389,791 )          (1,151,242 )          (150,551 )
      

 

 

        

 

 

        

 

 

 

Realized Gain (Loss):

 

Investments sold

         92,266,893          (741,777 )          371,001

Foreign currency transactions

         3,810          (351,364 )          (1,436 )

Foreign capital gains taxes

         (13,756 )          (637,729 )          (73,138 )
      

 

 

        

 

 

        

 

 

 

Net realized gain (loss)

         92,256,947          (1,730,870 )          296,427
      

 

 

        

 

 

        

 

 

 

Change in Unrealized Appreciation (Depreciation):

 

Investments

         (492,802,539 )          (71,869,547 )          (7,848,513 )

Foreign currency translations

         (26 )          (2,199 )          (1,816 )

Deferred foreign capital gains taxes

         987,269          5,854,737          472,249
      

 

 

        

 

 

        

 

 

 

Net change in unrealized depreciation

         (491,815,296 )          (66,017,009 )          (7,378,080 )
      

 

 

        

 

 

        

 

 

 

Net loss on investments

         (399,558,349 )          (67,747,879 )          (7,081,653 )
      

 

 

        

 

 

        

 

 

 

Net Decrease in Net Assets Resulting from Operations

       $ (401,948,140 )        $ (68,899,121 )        $ (7,232,204 )
      

 

 

        

 

 

        

 

 

 

 

1 

Fund inception date was October 1, 2019.

 

2 

Net of $0, $0, $10,637, $114,273, $21,086, $13,967, $1,761, $87,951 and $653,855 in foreign withholding taxes, respectively.

See Notes to Financial Statements.

 

80


Table of Contents

 

  MARCH 31, 2020 (UNAUDITED)

 

 

 

EMERGING
MARKETS
SMALL CAP
FUND
 

FRONTIER
EMERGING
SMALL COUNTRIES

FUND

  GLOBAL
OPPORTUNITIES
FUND
  GLOBAL
SELECT
FUND1
  GLOBAL
VALUE
FUND
  INTERNATIONAL
GROWTH
FUND
           
                     
  $ 431     $ 295     $ 673     $ 29     $ 2,491     $ 11,313
                     
    1,252,126       177,351       313,264       18,052       2,205,347       6,545,757
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    1,252,557       177,646       313,937       18,081       2,207,838       6,557,070
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    3,165,118       498,579       799,396       27,583       646,480       7,351,046
    134,616       52,655       61,118       3,851       119,933       293,774
    1,994       1,441       1,455       646       1,737       4,444
    40,145       6,627       13,679       721       15,297       121,703
    33,889       13,424       19,818       4,711       17,559       80,954
    20,058       9,646       9,049       3,103       16,447       39,230
    8,046       264       1,202       2,088       854       13,061
    81,736       40,532       8,918       1,381       7,387       101,449
    6,875       7,895       5,114       7,065       7,547       14,083
    10,997       6,614       7,210       7,179       5,844       30,178
    13,162       2,164       4,192       19,257       5,300       40,129
    28,725       4,584       8,822       766       11,581       87,084
    19,065       1,452       3,430       179       2,212       19,510
    18,590       18,589       18,590       17,709       19,718       20,733
    51,622       13,966       17,414       5,267       7,508       44,343
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    3,634,638       678,432       979,407       101,506       885,404       8,261,721
    (13,710 )       (43,758 )       (17,893 )       (66,690 )       (99,201 )       (640 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    3,620,928       634,674       961,514       34,816       786,203       8,261,081
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (2,368,371 )       (457,028 )       (647,577 )       (16,735 )       1,421,635       (1,704,011 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    14,277,121       1,217,502       1,880,520       6,113       (8,038,154 )       27,652,062
    (119,145 )       (22,892 )       (7,630 )       (437 )       (11,753 )       (186,412 )
    (96,911 )       (80,572 )       (19,265 )       (138 )             (73,763 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    14,061,065       1,114,038       1,853,625       5,538       (8,049,907 )       27,391,887
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    (61,383,739 )       (13,414,880 )       (23,687,164 )       (1,372,039 )       (26,056,740 )       (163,953,276 )
    (65,380 )       1,653       (653 )       106       (1,769 )       77,687
    2,331,577       71,077       315,489                   1,191,306
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (59,117,542 )       (13,342,150 )       (23,372,328 )       (1,371,933 )       (26,058,509 )       (162,684,283 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (45,056,477 )       (12,228,112 )       (21,518,703 )       (1,366,395 )       (34,108,416 )       (135,292,396 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ (47,424,848 )     $ (12,685,140 )     $ (22,166,280 )     $ (1,383,130 )     $ (32,686,781 )     $ (136,996,407 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

81


Table of Contents

 

WASATCH FUNDS  

 

 

Statements of Operations (continued)

 

        INTERNATIONAL
OPPORTUNITIES
FUND
     INTERNATIONAL
SELECT
FUND1
     MICRO
CAP
FUND2
     

Investment Income:

 

Interest

       $ 11,860        $ 28        $ 11,574

Dividends3

 

Unaffiliated issuers

         2,250,733          6,820          501,850
      

 

 

        

 

 

        

 

 

 

Total investment income

         2,262,593          6,848          513,424
      

 

 

        

 

 

        

 

 

 

Expenses:

 

Investment advisory fees

         4,544,082          10,025          4,008,084

Shareholder servicing fees — Investor Class

         90,387          3,829          152,016

Shareholder servicing fees — Institutional Class

         95,322          644         

Fund administration fees

         52,306          274          52,861

Fund accounting fees

         44,712          5,129          36,677

Reports to shareholders — Investor Class

         13,092          2,604          21,494

Reports to shareholders — Institutional Class

         30,313          1,997         

Custody fees

         60,124          1,381          6,714

Federal and state registration fees — Investor Class

         6,444          7,065          16,083

Federal and state registration fees — Institutional Class

         11,182          7,171         

Legal fees

         18,380          19,221          17,335

Trustees’ fees

         35,606          766          33,959

Dividends on securities sold short

         25,373                  

Interest

         7,127          219          6,839

Audit fees

         18,588          17,709          17,290

Other expenses

         30,719          5,202          18,277
      

 

 

        

 

 

        

 

 

 

Total expenses before reimbursement

         5,083,757          83,236          4,387,629

Reimbursement of expenses by Advisor

                  (69,128 )         
      

 

 

        

 

 

        

 

 

 

Net Expenses

         5,083,757          14,108          4,387,629
      

 

 

        

 

 

        

 

 

 

Net Investment Income (Loss)

         (2,821,164 )          (7,260 )          (3,874,205 )
      

 

 

        

 

 

        

 

 

 

Realized Gain (Loss):

 

Investments sold

         629,548          (4,482 )          40,421,412

Foreign currency transactions

         (64,676 )          (10,345 )          (15,146 )

Foreign capital gains taxes

                           (201,149 )
      

 

 

        

 

 

        

 

 

 

Net realized gain (loss)

         564,872          (14,827 )          40,205,117
      

 

 

        

 

 

        

 

 

 

Change in Unrealized Appreciation (Depreciation):

 

Investments

         (64,162,882 )          (295,227 )          (111,711,689 )

Investments in affiliates

                           (7,529,143 )

Foreign currency translations

         (3,596 )          39          46

Deferred foreign capital gains taxes

         709,257                   168,978
      

 

 

        

 

 

        

 

 

 

Net change in unrealized appreciation (depreciation)

         (63,457,221 )          (295,188 )          (119,071,808 )
      

 

 

        

 

 

        

 

 

 

Net gain (loss) on investments

         (62,892,349 )          (310,015 )          (78,866,691 )
      

 

 

        

 

 

        

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

       $ (65,713,513 )        $ (317,275 )        $ (82,740,896 )
      

 

 

        

 

 

        

 

 

 

 

1 

Fund inception date was October 1, 2019.

 

2 

Institutional class inception date was January 31, 2020.

 

3 

Net of $226,323, $1,224, $9, $16,045, $0, $0, $0 and $0 in foreign withholding taxes, respectively.

See Notes to Financial Statements.

 

82


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

MICRO CAP
VALUE
FUND2
  SMALL CAP
GROWTH
FUND
  SMALL CAP
VALUE
FUND
  ULTRA
GROWTH
FUND2
  U.S.
TREASURY
FUND
         
                 
  $ 20,489     $ 392,511     $ 14,794     $ 45,935     $ 4,392,248
                 
    1,122,366       2,762,194       9,434,495       1,148,599      
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    1,142,855       3,154,705       9,449,289       1,194,534       4,392,248
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
    1,864,813       9,459,094       4,274,554       3,767,911       946,759
    141,023       459,256       239,820       440,784       144,518
          7,480       2,508            
    19,566       186,238       80,427       59,380       29,912
    20,254       108,791       51,048       39,586       18,364
    20,030       53,279       34,426       46,065       18,108
          74,979       15,073            
    9,661       62,676       2,868       3,234       717
    15,157       15,278       22,043       44,505       17,736
          26,306       17,231            
    9,619       58,674       25,982       21,363       11,885
    18,088       122,609       53,827       40,747       25,504
                           
    3,578       24,300       11,639       8,948       5,234
    17,290       18,590       18,590       17,290       17,290
    15,702       46,082       18,048       14,525       8,778
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    2,154,781       10,723,632       4,868,084       4,504,338       1,244,805
    (38 )       (169,516 )       (53,999 )       (88 )      
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    2,154,743       10,554,116       4,814,085       4,504,250       1,244,805
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (1,011,888 )       (7,399,411 )       4,635,204       (3,309,716 )       3,147,443
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
    3,512,827       86,039,710       (22,574,928 )       27,042,481       6,220,880
    (12,912 )       6,686       (18,848 )       (718 )      
    (16,410 )             (6,725 )       (11,498 )      
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    3,483,505       86,046,396       (22,600,501 )       27,030,265       6,220,880
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                 
    (49,315,044 )       (338,356,724 )       (272,064,809 )       (86,524,899 )       61,002,991
                           
    795       311       (6 )       (111 )      
    92,048             145,879       255,086      
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (49,222,201 )       (338,356,413 )       (271,918,936 )       (86,269,924 )       61,002,991
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (45,738,696 )       (252,310,017 )       (294,519,437 )       (59,239,659 )       67,223,871
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ (46,750,584 )     $ (259,709,428 )     $ (289,884,233 )     $ (62,549,375 )     $ 70,371,314
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

83


Table of Contents

 

WASATCH FUNDS  

 

 

Statements of Changes in Net Assets

 

       CORE GROWTH
FUND
       
    
EMERGING INDIA
FUND
        Six Months
Ended
March 31, 2020
(Unaudited)
   Year Ended
September 30, 2019
   Six Months
Ended
March 31, 2020
(Unaudited)
   Year Ended
September 30, 2019
       

Operations:

 

Net investment income (loss)

       $ (2,389,791 )      $ (11,786,255 )      $ (1,151,242 )      $ (2,348,420 )

Net realized gain (loss) on investments, foreign
currency translations and foreign capital gains taxes

         92,256,947        215,644,009        (1,730,870 )        411,045

Change in unrealized appreciation (depreciation) on
investments, foreign currency translations and
deferred capital gains taxes

         (491,815,296 )        (216,536,421 )        (66,017,009 )        36,867,160
      

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in net assets resulting from operations

         (401,948,140 )        (12,678,667 )        (68,899,121 )        34,929,785

Distributions to shareholders from distributable earnings

 

Investor Class

         (149,403,088 )        (115,894,672 )        (641,437 )        (12,103,683 )

Institutional Class

         (93,662,303 )        (56,240,911 )        (372,918 )        (3,516,107 )

Capital share transactions:

 

Investor Class

                     

Shares sold

         171,406,955        189,187,622        31,282,783        65,709,960

Shares issued to holders in reinvestment of dividends

         145,016,231        112,651,644        638,968        12,002,230

Shares redeemed

         (207,635,046 )        (308,539,799 )        (63,339,560 )        (87,395,827 )

Redemption fees

         22,162        117,547        20,472        76,280
      

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease)

         108,810,302        (6,582,986 )        (31,397,337 )        (9,607,357 )
      

 

 

      

 

 

      

 

 

      

 

 

 

Institutional Class

                     

Shares sold

         207,291,880        325,369,900        39,056,257        54,672,753

Shares issued to holders in reinvestment of dividends

         89,581,586        53,665,284        372,838        3,516,108

Shares redeemed

         (160,812,323 )        (201,747,911 )        (16,808,534 )        (15,244,042 )

Redemption fees

         26,458        34,892        1,338        193
      

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease)

         136,087,601        177,322,165        22,621,899        42,945,012
      

 

 

      

 

 

      

 

 

      

 

 

 

Total increase (decrease) in net assets

         (400,115,628 )        (14,075,071 )        (78,688,914 )        52,647,650

Net assets:

 

Beginning of period

         2,285,781,094        2,299,856,165        279,838,038        227,190,388
      

 

 

      

 

 

      

 

 

      

 

 

 

End of period

       $ 1,885,665,466      $ 2,285,781,094      $ 201,149,124      $ 279,838,038
      

 

 

      

 

 

      

 

 

      

 

 

 

Capital share transactions — shares:

 

Investor Class

      

Shares sold

         2,472,204        2,666,806        7,234,169        16,292,452

Shares issued to holders in reinvestment of dividends

         2,011,879        1,925,011        143,266        3,030,866

Shares redeemed

         (3,130,676 )        (4,433,956 )        (15,593,538 )        (22,008,586 )
      

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in shares outstanding

         1,353,407        157,861        (8,216,103 )        (2,685,268 )
      

 

 

      

 

 

      

 

 

      

 

 

 

Institutional Class

      

Shares sold

         2,915,157        4,595,902        8,896,441        13,743,037

Shares issued to holders in reinvestment of dividends

         1,229,841        909,581        83,037        881,230

Shares redeemed

         (2,297,597 )        (2,848,564 )        (4,296,597 )        (3,796,046 )
      

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in shares outstanding

         1,847,401        2,656,919        4,682,881        10,828,221
      

 

 

      

 

 

      

 

 

      

 

 

 

See Notes to Financial Statements.

 

84


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

EMERGING MARKETS

SELECT
FUND

 

EMERGING MARKETS

SMALL CAP
FUND

 

FRONTIER

EMERGING

SMALL COUNTRIES
FUND

Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
  Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
  Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
           
                     
  $ (150,551 )     $ (100,282 )     $ (2,368,371 )     $ (3,225,668 )     $ (457,028 )     $ 553,025
 

 

296,427

      (12,717 )       14,061,065       19,514,955       1,114,038       (81,296 )
 

 

(7,378,080

)

      3,983,601       (59,117,542 )       3,745,786       (13,342,150 )       4,525,461
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (7,232,204 )       3,870,602       (47,424,848 )       20,035,073       (12,685,140 )       4,997,190
                     
                (11,627,154 )       (26,880,563 )            
                (10,395,643 )       (22,096,890 )            
                     
                     
    2,128,444       1,051,049       20,274,006       26,627,101       2,087,454       3,387,642
                11,005,252       25,451,093            
    (1,212,782 )       (5,608,056 )       (31,457,407 )       (130,410,766 )       (5,896,368 )       (20,744,583 )
    4,480       3,152       5,977       3,897       920       7,717
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    920,142       (4,553,855 )       (172,172 )       (78,328,675 )       (3,807,994 )       (17,349,224 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    4,562,262       4,503,557       22,627,990       69,254,821       770,996       920,083
                9,521,929       20,773,470            
    (5,724,606 )       (3,409,102 )       (47,244,850 )       (143,750,216 )       (4,562,712 )       (6,315,306 )
    483       315       9,346       15,117       1,272      
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (1,161,861 )       1,094,770       (15,085,585 )       (53,706,808 )       (3,790,444 )       (5,395,223 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (7,473,923 )       411,517       (84,705,402 )       (160,977,863 )       (20,283,578 )       (17,747,257 )
                     
    44,146,649       43,735,132       365,454,461       526,432,324       60,244,953       77,992,210
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 36,672,726     $ 44,146,649     $ 280,749,059     $ 365,454,461     $ 39,961,375     $ 60,244,953
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
                     
    177,580       102,864       7,261,621       10,680,727       772,295       1,324,685
                4,001,910       11,162,760            
    (105,760 )       (540,323 )       (11,950,740 )       (52,036,343 )       (2,189,393 )       (8,208,619 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    71,820       (437,459 )       (687,209 )       (30,192,856 )       (1,417,098 )       (6,883,934 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    369,846       419,680       8,223,330       27,208,564       256,493       362,002
                3,437,519       9,071,384            
    (513,876 )       (300,531 )       (17,244,817 )       (57,064,550 )       (1,546,620 )       (2,551,687 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (144,030 )       119,149       (5,583,968 )       (20,784,602 )       (1,290,127 )       (2,189,685 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

85


Table of Contents
WASATCH FUNDS  

 

 

Statements of Changes in Net Assets (continued)

 

       GLOBAL OPPORTUNITIES
FUND
     GLOBAL SELECT
FUND
        Six Months
Ended
March 31, 2020
(Unaudited)
     Year Ended
September 30, 2019
     Six Months
Ended
March 31, 20201
(Unaudited)
     

Operations:

 

Net investment income (loss)

       $ (647,577 )        $ (1,068,879 )        $ (16,735 )

Net realized gain (loss) on investments, foreign
currency translations and foreign capital gains taxes

         1,853,625          9,825,436          5,538

Change in unrealized appreciation (depreciation) on
investments, foreign currency translations and
deferred capital gains taxes

         (23,372,328 )          (8,613,378 )          (1,371,933 )
      

 

 

        

 

 

        

 

 

 

Net increase (decrease) in net assets resulting from operations

         (22,166,280 )          143,179          (1,383,130 )

Distributions to shareholders from distributable earnings

 

Investor Class

         (8,871,843 )          (13,508,893 )         

Institutional Class

         (1,711,832 )          (2,069,212 )         

Capital share transactions:

 

Investor Class

                    

Shares sold

         10,685,694          18,263,643          3,141,867

Shares issued to holders in reinvestment of dividends

         8,792,560          13,261,385         

Shares redeemed

         (18,484,470 )          (24,803,012 )          (743,544 )

Redemption fees

         5,154          5,927          171
      

 

 

        

 

 

        

 

 

 

Net increase (decrease)

         998,938          6,727,943          2,398,494
      

 

 

        

 

 

        

 

 

 

Institutional Class

                    

Shares sold

         5,697,108          7,653,936          8,620,785

Shares issued to holders in reinvestment of dividends

         1,626,534          1,897,942         

Shares redeemed

         (1,409,666 )          (4,830,069 )          (6,076 )

Redemption fees

         1,875          2,232          122
      

 

 

        

 

 

        

 

 

 

Net increase (decrease)

         5,915,851          4,724,041          8,614,831
      

 

 

        

 

 

        

 

 

 

Total increase (decrease) in net assets

         (25,835,166 )          (3,982,942 )          9,630,195

Net assets:

 

Beginning of period

         122,770,078          126,753,020         
      

 

 

        

 

 

        

 

 

 

End of period

       $ 96,934,912        $ 122,770,078        $ 9,630,195
      

 

 

        

 

 

        

 

 

 

Capital share transactions — shares:

 

Investor Class

                    

Shares sold

         3,167,309          5,400,753          301,935

Shares issued to holders in reinvestment of dividends

         2,541,203          4,736,209         

Shares redeemed

         (5,683,388 )          (7,290,883 )          (68,240 )
      

 

 

        

 

 

        

 

 

 

Net increase (decrease) in shares outstanding

         25,124          2,846,079          233,695
      

 

 

        

 

 

        

 

 

 

Institutional Class

                    

Shares sold

         1,620,417          2,341,370          836,493

Shares issued to holders in reinvestment of dividends

         468,742          675,424         

Shares redeemed

         (459,894 )          (1,410,992 )          (530 )
      

 

 

        

 

 

        

 

 

 

Net increase (decrease) in shares outstanding

         1,629,265          1,605,802          835,963
      

 

 

        

 

 

        

 

 

 

 

1 

Fund inception date was October 1, 2019.

See Notes to Financial Statements.

 

86


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

GLOBAL VALUE
FUND
  INTERNATIONAL GROWTH
FUND
  INTERNATIONAL OPPORTUNITIES
FUND
Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
  Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
  Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
           
                     
  $ 1,421,635     $ 3,930,311     $ (1,704,011 )     $ (2,330,095 )     $ (2,821,164 )     $ (4,015,942 )
 

 

(8,049,907

)

      5,362,420       27,391,887       35,546,556       564,872       19,328,327
 

 

(26,058,509

)

      (13,287,556 )       (162,684,283 )       (200,457,253 )       (63,457,221 )       (19,771,713 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (32,686,781 )       (3,994,825 )       (136,996,407 )       (167,240,792 )       (65,713,513 )       (4,459,328 )
                     
    (2,920,949 )       (26,014,674 )       (14,384,249 )       (85,858,576 )       (3,279,205 )       (5,015,701 )
    (181,915 )       (1,351,568 )       (16,077,813 )       (85,816,934 )       (9,208,299 )       (6,283,811 )
                     
                     
    1,443,551       5,167,863       22,751,205       91,035,974       6,364,001       13,999,031
    2,847,105       25,699,903       12,847,729       79,082,009       3,145,044       4,816,572
    (22,271,355 )       (47,130,370 )       (78,920,917 )       (210,507,702 )       (27,412,063 )       (109,687,557 )
    2,152       4,784       15,169       11,574       1,718       259
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (17,978,547 )       (16,257,820 )       (43,306,814 )       (40,378,145 )       (17,901,300 )       (90,871,695 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    1,330,764       1,335,472       68,831,260       208,768,921       93,365,364       134,483,838
    180,978       1,324,616       15,159,166       80,888,827       6,000,461       4,723,790
    (1,672,150 )       (2,784,876 )       (114,201,872 )       (336,838,011 )       (67,628,031 )       (56,333,268 )
    14       48       15,034       17,266       2,773       2,902
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (160,394 )       (124,740 )       (30,196,412 )       (47,162,997 )       31,740,567       82,877,262
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (53,928,586 )       (47,743,627 )       (240,961,695 )       (426,457,444 )       (64,361,750 )       (23,753,273 )
                     
    154,681,983       202,425,610       1,139,331,277       1,565,788,721       509,080,460       532,833,733
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 100,753,397     $ 154,681,983     $ 898,369,582     $ 1,139,331,277     $ 444,718,710     $ 509,080,460
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
                     
    196,401       657,457       778,868       3,254,697       1,756,429       4,249,540
    376,889       3,590,285       417,405       3,267,852       854,632       1,684,116
    (2,999,151 )       (6,045,374 )       (2,843,783 )       (7,514,820 )       (7,643,770 )       (35,750,861 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (2,425,861 )       (1,797,632 )       (1,647,510 )       (992,271 )       (5,032,709 )       (29,817,205 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    175,034       167,348       2,403,983       7,461,278       25,493,450       39,730,459
    24,040       185,078       490,429       3,332,872       1,613,027       1,628,893
    (255,179 )       (356,260 )       (4,400,398 )       (11,839,348 )       (19,165,034 )       (17,169,665 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (56,105 )       (3,834 )       (1,505,986 )       (1,045,198 )       7,941,443       24,189,687
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

87


Table of Contents

 

WASATCH FUNDS  

 

 

Statements of Changes in Net Assets (continued)

 

       INTERNATIONAL SELECT
FUND
     MICRO CAP
FUND
        Six Months
Ended
March 31, 20201
(Unaudited)
     Six Months
Ended
March 31, 20202
(Unaudited)
     Year Ended
September 30, 2019
     

Operations:

 

             

Net investment income (loss)

       $ (7,260 )        $ (3,874,205 )        $ (5,839,436 )

Net realized gain (loss) on investments, foreign
currency translations and foreign capital gains taxes

         (14,827 )       

 

40,205,117

         55,047,174

Change in unrealized appreciation (depreciation) on
investments, foreign currency translations and
deferred capital gains taxes

         (295,188 )       

 

(119,071,808

)

         (60,370,211 )
      

 

 

        

 

 

        

 

 

 

Net increase (decrease) in net assets resulting from operations

         (317,275 )          (82,740,896 )          (11,162,473 )

Distributions to shareholders from distributable earnings

 

             

Investor Class

                  (56,926,728 )          (87,356,742 )

Institutional Class

                          

Capital share transactions:

 

             

Investor Class

                    

Shares sold

         2,063,831          126,889,433          101,288,047

Shares issued to holders in reinvestment of dividends

                  53,969,369          82,402,243

Shares redeemed

         (223,026 )          (82,385,236 )          (107,977,732 )

Redemption fees

         525          103,480          183,961
      

 

 

        

 

 

        

 

 

 

Net increase (decrease)

         1,841,330          98,577,046          75,896,519
      

 

 

        

 

 

        

 

 

 

Institutional Class

                    

Shares sold

         1,763,113          18,295,066         

Shares issued to holders in reinvestment of dividends

                          

Shares redeemed

         (496,018 )          (408,663 )         

Redemption fees

         5,178                  
      

 

 

        

 

 

        

 

 

 

Net increase

         1,272,273          17,886,403         
      

 

 

        

 

 

        

 

 

 

Total increase (decrease) in net assets

         2,796,328          (23,204,175 )          (22,622,696 )

Net assets:

 

             

Beginning of period

                  473,505,387          496,128,083
      

 

 

        

 

 

        

 

 

 

End of period

       $ 2,796,328        $ 450,301,212        $ 473,505,387
      

 

 

        

 

 

        

 

 

 

Capital share transactions — shares:

 

             

Investor Class

                    

Shares sold

         197,008          17,074,919          13,494,255

Shares issued to holders in reinvestment of dividends

                  7,332,795          14,256,443

Shares redeemed

         (20,063 )          (12,017,919 )          (14,460,006 )
      

 

 

        

 

 

        

 

 

 

Net increase (decrease) in shares outstanding

         176,945          12,389,795          13,290,692
      

 

 

        

 

 

        

 

 

 

Institutional Class

                    

Shares sold

         166,006          2,613,725         

Shares issued to holders in reinvestment of dividends

                          

Shares redeemed

         (48,160 )          (70,766 )         
      

 

 

        

 

 

        

 

 

 

Net increase in shares outstanding

         117,846          2,542,959         
      

 

 

        

 

 

        

 

 

 

 

1 

Fund inception date was October 1, 2019.

 

2 

Institutional Class inceptions date was January 31, 2020.

See Notes to Financial Statements.

 

88


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

MICRO CAP VALUE
FUND
  SMALL CAP GROWTH
FUND
  SMALL CAP VALUE
FUND
Six Months
Ended
March 31, 20202
(Unaudited)
  Year Ended
September 30, 2019
  Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
  Six Months
Ended
March 31, 2020
(Unaudited)
  Year Ended
September 30, 2019
           
                     
  $ (1,011,888 )     $ (2,283,385 )     $ (7,399,411 )     $ (12,773,288 )     $ 4,635,204     $ 3,208,817
   
    
3,483,505

      21,624,333       86,046,396       288,451,840       (22,600,501 )       605,596
 

 

(49,222,201

)

      (33,197,979 )       (338,356,413 )       (270,686,501 )       (271,918,936 )       (9,729,926 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
 

 

(46,750,584

)

      (13,857,031 )       (259,709,428 )       4,992,051       (289,884,233 )       (5,915,513 )
                     
    (22,300,292 )       (26,873,692 )       (142,862,943 )       (254,160,201 )       (5,460,620 )       (24,527,924 )
                (122,088,144 )       (160,748,953 )       (5,195,933 )       (7,190,903 )
                     
                     
    11,442,659       36,404,994       94,871,883       86,238,800       70,474,067       172,350,782
    21,926,724       26,433,514       138,509,163       244,434,466       5,350,153       23,919,067
    (42,768,863 )       (56,224,461 )       (127,642,262 )       (266,135,679 )       (65,379,112 )       (58,961,428 )
    2,237       16,557       6,027       31,675       23,963       28,941
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (9,397,243 )       6,630,604       105,744,811       64,569,262       10,469,071       137,337,362
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    4,073,648             262,146,022       206,555,979       94,540,895       307,998,467
                115,509,794       150,566,964       5,117,346       6,896,928
    (229,342 )             (121,400,223 )       (205,138,374 )       (42,992,383 )       (30,806,582 )
    54             29,053       29,207       12,996       3,117
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    3,844,360             256,284,646       152,013,776       56,678,854       284,091,930
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (74,603,759 )       (34,100,119 )       (162,631,058 )       (193,334,065 )       (233,392,861 )       383,794,952
                     
    249,522,867       283,622,986       1,691,658,445       1,884,992,510       822,949,764       439,154,812
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
  $ 174,919,108     $ 249,522,867     $ 1,529,027,387     $ 1,691,658,445     $ 589,556,903     $ 822,949,764
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
                     
    3,918,834       11,499,085       2,405,642       2,157,282       9,568,735       23,179,792
    6,830,755       9,863,251       3,578,124       7,801,930       662,968       3,662,950
    (15,196,726 )       (17,766,372 )       (3,409,382 )       (6,802,853 )       (9,909,804 )       (7,841,265 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    (4,447,137 )       3,595,964       2,574,384       3,156,359       321,899       19,001,477
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
                     
    1,705,708             6,635,754       5,108,334       13,323,213       40,388,583
                2,951,950       4,766,286       630,215       1,049,761
    (104,139 )             (3,231,320 )       (5,161,091 )       (6,588,439 )       (4,104,717 )
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    1,601,569             6,356,384       4,713,529       7,364,989       37,333,627
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

89


Table of Contents
WASATCH FUNDS   MARCH 31, 2020 (UNAUDITED)

 

 

Statements of Changes in Net Assets (continued)

 

     ULTRA GROWTH
FUND
   U.S. TREASURY
FUND
      Six Months
Ended
March 31, 20202
(Unaudited)
   Year Ended
September 30, 2019
   Six Months
Ended
March 31, 2020
(Unaudited)
   Year Ended
September 30, 2019
       

Operations:

 

         

Net investment income (loss)

     $ (3,309,716 )      $ (4,333,950 )      $ 3,147,443      $ 6,654,738

Net realized gain (loss) on investments, foreign
currency translations and foreign capital gains taxes

       27,030,265        16,498,858       
    
6,220,880

       (3,118,076 )

Change in unrealized appreciation (depreciation) on
investments, foreign currency translations and
deferred capital gains taxes

       (86,269,924 )        (11,443,749 )       

    
    
61,002,991


       80,540,022
    

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in net assets resulting from operations

       (62,549,375 )        721,159        70,371,314        84,076,684

Distributions to shareholders from distributable earnings

                   

Investor Class

       (14,642,656 )        (18,922,846 )        (3,201,797 )        (6,645,318 )

Institutional Class

                           

Capital share transactions:

                   

Investor Class

                   

Shares sold

       340,142,482        531,592,985        89,729,484        186,910,235

Shares issued to holders in reinvestment of dividends

       13,973,397        17,633,875        3,026,949        6,204,428

Shares redeemed

       (168,105,904 )        (205,793,858 )        (123,300,691 )        (194,165,022 )

Redemption fees

       173,228        360,528        158,904        157,515
    

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease)

       186,183,203        343,793,530        (30,385,354 )        (892,844 )
    

 

 

      

 

 

      

 

 

      

 

 

 

Institutional Class

                   

Shares sold

       23,232,769                     

Shares issued to holders in reinvestment of dividends

                           

Shares redeemed

       (362,527 )                     

Redemption fees

       346                     
    

 

 

      

 

 

      

 

 

      

 

 

 

Net increase

       22,870,588                     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total increase in net assets

       131,861,760        325,591,843        36,784,163        76,538,522

Net assets:

                   

Beginning of period

       623,153,792        297,561,949        379,643,946        303,105,424
    

 

 

      

 

 

      

 

 

      

 

 

 

End of period

     $ 755,015,552      $ 623,153,792      $ 416,428,109      $ 379,643,946
    

 

 

      

 

 

      

 

 

      

 

 

 

Capital share transactions — shares:

                   

Investor Class

                   

Shares sold

       12,645,461        21,348,607        4,361,565        11,232,700

Shares issued to holders in reinvestment of dividends

       508,678        869,520        149,846        360,102

Shares redeemed

       (6,739,834 )        (8,334,761 )        (5,993,467 )        (11,737,556 )
    

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in shares outstanding

       6,414,305        13,883,366        (1,482,056 )        (144,754 )
    

 

 

      

 

 

      

 

 

      

 

 

 

Institutional Class

                   

Shares sold

       1,060,972                     

Shares issued to holders in reinvestment of dividends

                           

Shares redeemed

       (16,833 )                     
    

 

 

      

 

 

      

 

 

      

 

 

 

Net increase in shares outstanding

       1,044,139                     
    

 

 

      

 

 

      

 

 

      

 

 

 

 

2 

Institutional Class inception date was January 31, 2020.

See Notes to Financial Statements.

 

90


Table of Contents

(This page intentionally left blank.)

 

91


Table of Contents
WASATCH FUNDS  

 

 

Financial Highlights

 

        Income (Loss) from
Investment Operations
          Less Distributions    
     Net Asset
Value
Beginning
of Period
  Net
Investment
Income (Loss)
  Net Realized
and Unrealized
Gains (Losses)
on Investments
  Total from
Investment
Operations
  Redemption
Fees
(See Note 2)
  Dividends
from Net
Investment
Income
  Distributions
from Net
Realized
Gains
  Total
Distributions

Core Growth Fund — Investor Class

                                 

Six Months ended 3/31/20 (unaudited)

    $ 73.17       (0.07 )       (10.70 )       (10.77 )       4              (7.71 )       (7.71 )

Year ended 9/30/19

    $ 81.04       (0.42 )       (1.40 )       (1.82 )       0.01             (6.06 )       (6.06 )

Year ended 9/30/18

    $ 67.44       (0.43 )       18.30       17.87       4              (4.27 )       (4.27 )

Year ended 9/30/17

    $ 56.90       (0.50 )       11.13       10.63       4              (0.09 )       (0.09 )

Year ended 9/30/1616

    $ 57.83       (0.30 )       6.09       5.79       4              (6.72 )       (6.72 )

Year ended 9/30/15

    $ 53.46       (0.14 )9       5.95       5.81       4              (1.44 )       (1.44 )

Core Growth Fund — Institutional Class

                               

Six Months ended 3/31/20 (unaudited)

    $ 73.86             (10.86 )       (10.86 )       4              (7.71 )       (7.71 )

Year ended 9/30/19

    $ 81.62       (0.26 )       (1.44 )       (1.70 )       4              (6.06 )       (6.06 )

Year ended 9/30/18

    $ 67.81       (0.21 )       18.29       18.08       4              (4.27 )       (4.27 )

Year ended 9/30/17

    $ 57.16       (0.30 )       11.07       10.77       4        (0.03 )       (0.09 )       (0.12 )

Year ended 9/30/1616

    $ 57.99       (0.14 )       6.03       5.89       4              (6.72 )       (6.72 )

Year ended 9/30/15

    $ 53.58       0.06 9        5.79       5.85       4              (1.44 )       (1.44 )

Emerging India Fund — Investor Class

                               

Six Months ended 3/31/20 (unaudited)

    $ 4.25       (0.03 )       (0.98 )       (1.01 )       4              (0.01 )       (0.01 )

Year ended 9/30/19

    $ 3.95       (0.05 )       0.62       0.57       4              (0.27 )       (0.27 )

Year ended 9/30/18

    $ 4.08       (0.06 )       0.06             4              (0.13 )       (0.13 )

Year ended 9/30/17

    $ 3.39       0.02 17        0.70       0.72       4              (0.03 )       (0.03 )

Year ended 9/30/1616

    $ 3.07       (0.03 )       0.39       0.36       4              (0.04 )       (0.04 )

Year ended 9/30/15

    $ 2.73       (0.04 )       0.38       0.34       4        4              4 

Emerging India Fund — Institutional Class

 

                           

Six Months ended 3/31/20 (unaudited)

    $ 4.28       (0.01 )       (1.01 )       (1.02 )       4              (0.01 )       (0.01 )

Year ended 9/30/19

    $ 3.97       (0.01 )       0.59       0.58       4              (0.27 )       (0.27 )

Year ended 9/30/18

    $ 4.10       4        4        4        4              (0.13 )       (0.13 )

Year ended 9/30/17

    $ 3.40       0.02 17        0.71       0.73       4              (0.03 )       (0.03 )

Period ended 9/30/1614 16

    $ 2.82       (0.01 )       0.59       0.58                        

Emerging Markets Select Fund — Investor Class

 

                           

Six Months ended 3/31/20 (unaudited)

    $ 11.32       (0.04 )       (1.70 )       (1.74 )       4                   

Year ended 9/30/19

    $ 10.40       (0.13 )       1.05       0.92       4                   

Year ended 9/30/18

    $ 10.46       (0.09 )       0.03       (0.06 )       4                   

Year ended 9/30/17

    $ 9.23       (0.03 )       1.26       1.23       4                   

Year ended 9/30/1616

    $ 8.35       (0.05 )       0.93       0.88       4                   

Year ended 9/30/15

    $ 10.31       (0.04 )       (1.89 )       (1.93 )       4        (0.03 )             (0.03 )

Emerging Markets Select Fund — Institutional Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 11.53       (0.04 )       (1.72 )       (1.76 )       4                   

Year ended 9/30/19

    $ 10.56       (0.01 )       0.98       0.97       4                   

Year ended 9/30/18

    $ 10.60       (0.04 )       4        (0.04 )       4                   

Year ended 9/30/17

    $ 9.32       (0.01 )       1.29       1.28       4                   

Year ended 9/30/1616

    $ 8.41       0.04       0.87       0.91                        

Year ended 9/30/15

    $ 10.37       (0.03 )       (1.88 )       (1.91 )       4        (0.05 )             (0.05 )

Emerging Markets Small Cap Fund — Investor Class

 

                           

Six Months ended 3/31/20 (unaudited)

    $ 2.64       (0.02 )       (0.34 )       (0.36 )4       4              (0.16 )       (0.16 )

Year ended 9/30/19

    $ 2.78       (0.05 )       0.21       0.16       4              (0.30 )       (0.30 )

Year ended 9/30/18

    $ 2.99       (0.03 )       (0.18 )       (0.21 )       4                   

Year ended 9/30/17

    $ 2.67       (0.04 )       0.36       0.32       4                   

Year ended 9/30/1616

    $ 2.39       (0.04 )       0.32       0.28       4        4              4 

Year ended 9/30/15

    $ 2.74       (0.03 )       (0.32 )       (0.35 )       4        4              4 

Emerging Markets Small Cap Fund — Institutional Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 2.65       (0.02 )       (0.33 )       (0.35 )4       4              (0.16 )       (0.16 )

Year ended 9/30/19

    $ 2.79       (0.02 )       0.18       0.16       4              (0.30 )       (0.30 )

Year ended 9/30/18

    $ 3.00       (0.01 )       (0.20 )       (0.21 )       4                   

Year ended 9/30/17

    $ 2.67       0.01       0.32       0.33       4                   

Period ended 9/30/1614 16

    $ 2.31       (— )4       0.36       0.36                        

See Notes to Financial Highlights and Notes to Financial Statements.

 

92


Table of Contents
  (for a share outstanding throughout each period)

 

 

 

            Ratios to Average Net Assets     Supplemental Data  
Net Asset
Value
End of
Period
    Total Return (%)1     Expenses
Net of
Waivers and
Reimbursements (%)2
   

Expenses
Before

Waivers and
Reimbursements (%)2

    Net Investment
Income (Loss) Net
of Waivers and
Reimbursements  (%)2
    Net Investment
Income (Loss)
Before Waivers and
Reimbursements  (%)2
    Net Assets
End of
Period
(000s)
    Portfolio
Turnover
Rate1 3
 
             
$ 54.69       (17.26     1.18 5      1.18 5      (0.25     (0.25   $ 1,147,310       22%  
$ 73.17       (0.37     1.19 5      1.19 5      (0.59     (0.59   $ 1,435,994       31%  
$ 81.04       27.66       1.18 5 8      1.18 5 8      (0.66     (0.66   $ 1,577,554       27%  
$ 67.44       18.69       1.21 5      1.21 5      (0.78     (0.78   $ 1,211,089       26%  
$ 56.90       10.69       1.21 5      1.21 5      (0.62     (0.62   $ 1,082,679       18%  
$ 57.83       10.87       1.17 5      1.17 5      (0.29 )9      (0.29 )9    $ 1,014,515       39%  
             
$ 55.29       (17.22     1.05 5      1.08 5      (0.12     (0.15   $ 738,355       22%  
$ 73.86       (0.22     1.05 5      1.09 5      (0.45     (0.48   $ 849,787       31%  
$ 81.62       27.82       1.06 5 8      1.08 5 8      (0.53     (0.55   $ 722,302       27%  
$ 67.81       18.87       1.05 5      1.10 5      (0.63     (0.67   $ 383,159       26%  
$ 57.16       10.83       1.07 5      1.09 5      (0.48     (0.50   $ 251,181       18%  
$ 57.99       10.94       1.12 5      1.13 5      (0.29 )9      (0.30 )9    $ 150,614       39%  
             
$ 3.23       (23.99     1.61 6      1.61 6      (0.85     (0.85   $ 115,873       20%  
$ 4.25       15.06       1.68 6      1.68 6      (0.99     (0.99   $ 187,625       21%  
$ 3.95       (0.33     1.71 6 7      1.71 6 7      (1.22     (1.22   $ 184,733       48%  
$ 4.08       21.65       1.73 5      1.73 5      (0.92     (0.92   $ 207,949       17%  
$ 3.39       11.98       1.82 5      1.96 5      (1.18     (1.32   $ 71,973       42%  
$ 3.07       12.51       1.95 5      2.12 5      (1.38     (1.55   $ 63,850       36%  
             
$ 3.25       (23.82     1.44 5      1.44 5      (0.63     (0.63   $ 85,276       20%  
$ 4.28       15.23       1.49 6      1.49 6      (0.75     (0.75   $ 92,214       21%  
$ 3.97       (0.33     1.51 6 8      1.60 6 8      (0.93     (1.02   $ 42,457       48%  
$ 4.10       21.89       1.50 5      1.67 5      (0.77     (0.94   $ 23,739       17%  
$ 3.40       20.57       1.50 5      2.00 5      (0.70     (1.20   $ 9,799       42%  
             
$ 9.58       (15.37     1.51 6      1.79 6      (0.91     (1.19   $ 8,957       18%  
$ 11.32       8.85 5      1.51 6      1.97 6      (0.51     (0.97   $ 9,771       14%  
$ 10.40       (0.57     1.51 6 8      1.76 6 8      (0.67     (0.92   $ 13,520       44%  
$ 10.46       13.33       1.51 6      1.90 6      (0.38     (0.76   $ 15,273       55%  
$ 9.23       10.54       1.58 6      1.98 6      (0.15     (0.55   $ 11,892       62%  
$ 8.35       (18.81     1.70 6      2.00 6      (0.23     (0.53   $ 18,527       46%  
             
$ 9.77       (15.26     1.21 6      1.39 6      (0.61     (0.78   $ 27,716       18%  
$ 11.53       9.19       1.21 6      1.43 6      (0.14     (0.36   $ 34,375       14%  
$ 10.56       (0.38     1.21 6 8      1.45 6 8      (0.36     (0.60   $ 30,215       44%  
$ 10.60       13.73       1.21 6      1.52 6      (0.09     (0.39   $ 28,868       55%  
$ 9.32       10.82       1.29 6      1.59 6      0.29       (0.01   $ 26,763       62%  
$ 8.41       (18.67     1.51 6      1.77 6      (0.06     (0.32   $ 19,270       46%  
             
$ 2.12       (14.97     1.96 6      1.96 6      (1.30     (1.30   $ 152,501       7%  
$ 2.64       7.29       1.97 6      1.99 6      (0.83     (0.84   $ 191,405       16%  
$ 2.78       (7.02     1.96 7      1.98 6 7      (0.51     (0.53   $ 285,540       40%  
$ 2.99       11.99       1.96 6      2.02 6      (0.49     (0.56   $ 390,903       58%  
$ 2.67       11.73       1.96 6      2.00 6      (0.75     (0.79   $ 674,632       42%  
$ 2.39       (12.65     1.95 5      2.01 5      (0.63     (0.69   $ 981,367       59%  
             
$ 2.14       (14.53     1.81 6      1.83 6      (1.16     (1.18   $ 128,248       7%  
$ 2.65       7.25       1.82 6      1.85 6      (0.73     (0.76   $ 174,050       16%  
$ 2.79       (7.00     1.82 7      1.84 6 7      (0.33     (0.35   $ 240,892       40%  
$ 3.00       12.36       1.81 6      1.88 6      (0.05     (0.12   $ 252,823       58%  
$ 2.67       15.58       1.80 6      1.81 6      (0.03     (0.04   $ 160,729       42%  

 

 

93


Table of Contents

 

WASATCH FUNDS  

 

 

Financial Highlights (continued)

 

        Income (Loss) from
Investment Operations
          Less Distributions    
     Net Asset
Value
Beginning
of Period
  Net
Investment
Income (Loss)
  Net Realized
and Unrealized
Gains (Losses)
on Investments
  Total from
Investment
Operations
  Redemption
Fees
(See Note 2)
  Dividends
from Net
Investment
Income
  Distributions
from Net
Realized
Gains
  Total
Distributions

Frontier Emerging Small Countries Fund — Investor Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 2.74       (0.05 )       (0.62 )       (0.67 )       4                   

Year ended 9/30/19

    $ 2.51       4        0.23       0.23       4                   

Year ended 9/30/18

    $ 2.75       (0.11 )       (0.13 )       (0.24 )       4                   

Year ended 9/30/17

    $ 2.63       (0.08 )       0.20       0.12       4                   

Year ended 9/30/1616

    $ 2.77       0.02       (0.16 )       (0.14 )       4        4              4 

Year ended 9/30/15

    $ 3.32       0.02       (0.50 )       (0.48 )       4        (0.02 )       (0.05 )       (0.07 )

Frontier Emerging Small Countries Fund — Institutional Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 2.76       0.02       (0.69 )       (0.67 )       4                   

Year ended 9/30/19

    $ 2.53       0.03       0.20       0.23       4                   

Year ended 9/30/18

    $ 2.76       (0.04 )       (0.19 )       (0.23 )       4                   

Year ended 9/30/17

    $ 2.64       (0.06 )       0.18       0.12       4                   

Period ended 9/30/1614 16

    $ 2.58       0.02       0.04       0.06       4                   

Global Opportunities Fund — Investor Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 3.46       (0.02 )       (0.53 )       (0.55 )       4              (0.30 )       (0.30 )

Year ended 9/30/19

    $ 4.09       (0.03 )       (0.06 )       (0.09 )       4              (0.54 )       (0.54 )

Year ended 9/30/18

    $ 3.76       (0.03 )       0.77       0.74       4              (0.41 )       (0.41 )

Year ended 9/30/17

    $ 3.52       (0.07 )       0.58       0.51       4        4        (0.27 )       (0.27 )

Year ended 9/30/1616

    $ 3.51       (0.04 )       0.51       0.47       4        (0.01 )       (0.45 )       (0.46 )

Year ended 9/30/15

    $ 4.28       (0.05 )       (0.08 )       (0.13 )       4        (0.01 )       (0.63 )       (0.64 )

Global Opportunities Fund — Institutional Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 3.48       (0.01 )       (0.55 )       (0.56 )       4              (0.30 )       (0.30 )

Year ended 9/30/19

    $ 4.10       (0.03 )       (0.05 )       (0.08 )                   (0.54 )       (0.54 )

Year ended 9/30/18

    $ 3.76       (0.02 )       0.77       0.75                   (0.41 )       (0.41 )

Year ended 9/30/17

    $ 3.52       (0.02 )       0.54       0.52             (0.01 )       (0.27 )       (0.28 )

Period ended 9/30/1614 16

    $ 3.09       (— )4       0.43       0.43                        

Global Select Fund — Investor Class

                               

Six Months ended 3/31/2019 (unaudited)

    $ 10.00       (0.03 )       (0.98 )       (1.01 )       4                   

Global Select Fund — Institutional Class

                               

Six Months ended 3/31/2019 (unaudited)

    $ 10.00       (0.01 )       (0.98 )       (0.99 )       4                   

Global Value Fund — Investor Class

                               

Six Months ended 3/31/20 (unaudited)

    $ 7.74       0.08       (1.90 )       (1.82 )       4        (0.12 )       (0.04 )       (0.16 )

Year ended 9/30/19

    $ 9.29       0.19       (0.42 )       (0.23 )       4        (0.19 )       (1.13 )       (1.32 )

Year ended 9/30/18

    $ 9.93       0.19       0.65 18        0.84       4        (0.19 )       (1.29 )       (1.48 )

Year ended 9/30/17

    $ 9.02       0.19       1.23       1.42       4        (0.19 )       (0.32 )       (0.51 )

Year ended 9/30/1616

    $ 8.84       0.16       1.01       1.17       4        (0.16 )       (0.83 )       (0.99 )

Year ended 9/30/15

    $ 12.69       0.15       (0.69 )       (0.54 )       4        (0.16 )       (3.15 )       (3.31 )

Global Value Fund — Institutional Class

                               

Six Months ended 3/31/20 (unaudited)

    $ 7.73       0.08       (1.89 )       (1.81 )       4        (0.13 )       (0.04 )       (0.17 )

Year ended 9/30/19

    $ 9.28       0.19       (0.41 )       (0.22 )       4        (0.20 )       (1.13 )       (1.33 )

Year ended 9/30/18

    $ 9.92       0.20       0.66 18        0.86       4        (0.20 )       (1.30 )       (1.50 )

Year ended 9/30/17

    $ 9.01       0.18       1.25       1.43       4        (0.20 )       (0.32 )       (0.52 )

Year ended 9/30/1616

    $ 8.84       0.29       0.88       1.17       4        (0.17 )       (0.83 )       (1.00 )

Year ended 9/30/15

    $ 12.69       (0.04 )       (0.49 )       (0.53 )       4        (0.17 )       (3.15 )       (3.32 )

International Growth Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 28.23       (0.06 )       (3.25 )       (3.31 )       4              (0.78 )       (0.78 )

Year ended 9/30/19

    $ 36.95       (0.08 )       (4.26 )       (4.34 )       4              (4.38 )       (4.38 )

Year ended 9/30/18

    $ 33.84       (— )4       4.04       4.04       4              (0.93 )       (0.93 )

Year ended 9/30/17

    $ 31.43       (0.13 )       3.61       3.48       4              (1.07 )       (1.07 )

Year ended 9/30/1616

    $ 27.88       (0.22 )       3.77       3.55       4                   

Year ended 9/30/15

    $ 26.78       (0.09 )       1.39       1.30       4        (0.01 )       (0.19 )       (0.20 )

International Growth Fund — Institutional Class

 

                       

Six Months ended 3/31/20 (unaudited)

    $ 28.33       (0.04 )       (3.27 )       (3.31 )       4              (0.78 )       (0.78 )

Year ended 9/30/19

    $ 37.03       (0.04 )       (4.28 )       (4.32 )       4              (4.38 )       (4.38 )

Year ended 9/30/18

    $ 33.88       0.06       4.02       4.08       4              (0.93 )       (0.93 )

Year ended 9/30/17

    $ 31.46       (0.05 )       3.56       3.51       4        (0.02 )       (1.07 )       (1.09 )

Period ended 9/30/1614 16

    $ 28.46       0.01       2.99       3.00       4                   

See Notes to Financial Highlights and Notes to Financial Statements.

 

94


Table of Contents
  (for a share outstanding throughout each period)

 

 

 

            Ratios to Average Net Assets     Supplemental Data  
Net Asset
Value
End of
Period
    Total Return (%)1     Expenses
Net of
Waivers and
Reimbursements (%)2
   

Expenses
Before

Waivers and
Reimbursements (%)2

    Net Investment
Income (Loss) Net
of Waivers and
Reimbursements  (%)2
    Net Investment
Income (Loss)
Before Waivers and
Reimbursements  (%)2
    Net Assets
End of
Period
(000s)
    Portfolio
Turnover
Rate1 3
 
             
$ 2.07       (24.45     2.15 5      2.29 5      (1.56     (1.69   $ 30,197       18%  
$ 2.74       9.16       2.20 6      2.30 6      0.78       0.69     $ 43,789       63%  
$ 2.51       (8.73     2.22 6 7      2.36 6 7      (0.39     (0.53   $ 57,406       42%  
$ 2.75       4.56       2.28 6      2.46 6      (0.48     (0.67   $ 155,758       59%  
$ 2.63       (4.89     2.25 5      2.39 5      0.35       0.21     $ 437,850       80%  
$ 2.77       (14.88     2.25 5      2.28 5      0.39       0.36     $ 1,027,673       34%  
             
$ 2.09       (24.28     1.95 5      2.12 5      (1.39     (1.56   $ 9,765       18%  
$ 2.76       9.09       2.00 6      2.15 6      1.04       0.90     $ 16,456       63%  
$ 2.53       (8.33     2.02 6 8      2.11 6 8      (0.30     (0.39   $ 20,586       42%  
$ 2.76       4.55       2.08 6      2.17 6      (0.34     (0.44   $ 42,006       59%  
$ 2.64       2.33       2.06 6      2.06 6      1.40       1.40     $ 139,699       80%  
             
$ 2.61       (17.97     1.53 5      1.53 5      (1.04     (1.04   $ 78,268       10%  
$ 3.46       0.82       1.56 5      1.56 5      (0.95     (0.95   $ 103,710       24%  
$ 4.09       20.75       1.55 6 8      1.55 6 8      (0.78     (0.78   $ 110,874       40%  
$ 3.76       16.61       1.59 6      1.59 6      (1.09     (1.09   $ 95,847       27%  
$ 3.52       13.73       1.62 6      1.62 6      (0.98     (0.98   $ 150,945       44%  
$ 3.51       (3.88     1.81 5      1.81 5      (1.10     (1.10   $ 155,968       54%  
             
$ 2.62       (18.15     1.36 5      1.52 5      (0.86     (1.02   $ 18,667       10%  
$ 3.48       1.09       1.35 5      1.57 5      (0.74     (0.95   $ 19,060       24%  
$ 4.10       21.04       1.36 6 8      1.66 6 8      (0.57     (0.86   $ 15,879       40%  
$ 3.76       16.92       1.36 6      1.93 6      (0.85     (1.41   $ 7,149       27%  
$ 3.52       13.92       1.35 5      2.32 5      (0.57     (1.54   $ 5,348       44%  
             
$ 8.99       (10.10     1.35 5      3.86 5      (0.78     (3.29   $ 2,100       4%  
             
$ 9.01       (9.90     0.95 5      2.82 5      (0.40     (2.27   $ 7,530       4%  
             
$ 5.76       (23.93     1.10 5      1.23 5      1.97       1.84     $ 95,143       40%  
$ 7.74       (0.40     1.10 5      1.19 5      2.30       2.22     $ 146,704       49%  
$ 9.29       9.56 18      1.11 5 8      1.19 5 8      2.17       2.08     $ 192,811       72%  
$ 9.93       16.11       1.10 5      1.19 5      1.93       1.84     $ 175,730       44%  
$ 9.02       13.92       1.10 5      1.17 5      1.70       1.63     $ 189,691       26%  
$ 8.84       (6.61     1.10 5      1.12 5      1.34       1.32     $ 244,056       39%  
             
$ 5.75       (23.91     0.95 5      1.32 5      2.16       1.79     $ 5,610       40%  
$ 7.73       (0.25     0.97 5      1.23 5      2.44       2.19     $ 7,978       49%  
$ 9.28       9.61 18      0.95 5 8      1.58 5 8      2.39       1.76     $ 9,615       72%  
$ 9.92       16.31       0.95 5      2.31 5      2.05       0.70     $ 4,594       44%  
$ 9.01       13.97       0.96 5      1.72 5      1.76       1.00     $ 3,589       26%  
$ 8.84       (6.50     0.98 5      1.44 5      1.40       0.94     $ 1,525       39%  
             
$ 24.14       (12.33     1.46 5      1.46 5      (0.35     (0.35   $ 425,430       20%  
$ 28.23       (9.76     1.46 5      1.46 5      (0.25     (0.25   $ 543,990       40%  
$ 36.95       12.13       1.45 5 8      1.45 5 8      0.01       0.01     $ 748,847       44%  
$ 33.84       12.04       1.46 5      1.46 5      (0.28     (0.28   $ 804,613       31%  
$ 31.43       12.73       1.48 5      1.48 5      (0.41     (0.41   $ 945,168       50%  
$ 27.88       4.83       1.50 5      1.50 8      (0.32     (0.32   $ 1,316,095       46%  
             
$ 24.24       (12.29     1.35 5      1.35 5      (0.23     (0.24   $ 472,939       20%  
$ 28.33       (9.67     1.35 5      1.35 5      (0.13     (0.13   $ 595,341       40%  
$ 37.03       12.24       1.35 5 8      1.36 5 8      0.16       0.16     $ 816,942       44%  
$ 33.88       12.16       1.35 5      1.37 5      (0.14     (0.16   $ 656,860       31%  
$ 31.46       10.54       1.35 5      1.36 5      0.07       0.06     $ 509,016       50%  

 

95


Table of Contents
WASATCH FUNDS  

 

 

Financial Highlights (continued)

 

        Income (Loss) from
Investment Operations
          Less Distributions    
     Net Asset
Value
Beginning
of Period
  Net
Investment
Income (Loss)
  Net Realized
and Unrealized
Gains (Losses)
on Investments
  Total from
Investment
Operations
  Redemption
Fees
(See Note 2)
  Dividends
from Net
Investment
Income
  Distributions
from Net
Realized
Gains
  Total
Distributions

International Opportunities Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 3.54       (0.04 )       (0.38 )       (0.42 )       4              (0.09 )       (0.09 )

Year ended 9/30/19

    $ 3.58       (0.09 )       0.13       0.04       4              (0.08 )       (0.08 )

Year ended 9/30/18

    $ 3.47       (0.05 )       0.40       0.35       4              (0.24 )       (0.24 )

Year ended 9/30/17

    $ 3.21       (0.04 )       0.30       0.26       4                   

Year ended 9/30/1616

    $ 2.74       (0.01 )       0.61       0.60       4              (0.13 )       (0.13 )

Year ended 9/30/15

    $ 3.09       (0.01 )       (0.04 )       (0.05 )       4              (0.30 )       (0.30 )

International Opportunities Fund — Institutional Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 3.58       (0.02 )       (0.40 )       (0.42 )       4              (0.09 )       (0.09 )

Year ended 9/30/19

    $ 3.62       (0.02 )       0.06       0.04       4              (0.08 )       (0.08 )

Year ended 9/30/18

    $ 3.50       (0.03 )       0.39       0.36       4              (0.24 )       (0.24 )

Year ended 9/30/17

    $ 3.23       (0.01 )       0.28       0.27       4                   

Period ended 9/30/1614 16

    $ 2.71       0.01       0.51       0.52       4                   

International Select Fund — Investor Class

 

                       

Six Months ended 3/31/2019 (unaudited)

    $ 10.00       (0.03 )       (0.50 )       (0.53 )       4                   

International Select Fund — Institutional Class

 

                       

Six Months ended 3/31/2019 (unaudited)

    $ 10.00       (0.02 )       (0.50 )       (0.52 )       0.04                  

Micro Cap Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 7.45       (0.04 )       (0.81 )       (0.85 )       4              (0.87 )       (0.87 )

Year ended 9/30/19

    $ 9.86       (0.08 )       (0.55 )       (0.63 )       4              (1.78 )       (1.78 )

Year ended 9/30/18

    $ 8.23       (0.08 )       2.88       2.80       4              (1.17 )       (1.17 )

Year ended 9/30/17

    $ 7.19       (0.11 )       1.75       1.64       4        (0.01 )       (0.59 )       (0.60 )

Year ended 9/30/1616

    $ 7.21       (0.08 )       1.15       1.07       4              (1.09 )       (1.09 )

Year ended 9/30/15

    $ 7.36       (0.08 )10       0.28       0.20       4        4        (0.35 )       (0.35 )

Micro Cap Fund — Institutional Class

 

                       

Period ended 3/31/2020 (unaudited)

    $ 7.74       (0.01 )       (2.00 )       (2.01 )       4                   

Micro Cap Value Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 3.21       (0.02 )       (0.55 )       (0.57 )       4              (0.30 )       (0.30 )

Year ended 9/30/19

    $ 3.83       (0.03 )       (0.20 )       (0.23 )       4        (0.02 )       (0.37 )       (0.39 )

Year ended 9/30/18

    $ 3.48       (0.03 )       0.65       0.62       4              (0.27 )       (0.27 )

Year ended 9/30/17

    $ 2.87       (0.02 )       0.68       0.66       4        4        (0.05 )       (0.05 )

Year ended 9/30/1616

    $ 2.87       (0.02 )       0.34       0.32       4              (0.32 )       (0.32 )

Year ended 9/30/15

    $ 3.02       (0.02 )11       0.31       0.29       4              (0.44 )       (0.44 )

Micro Cap Value Fund — Institutional Class

 

                       

Period ended 3/31/2020 (unaudited)

    $ 3.26             (0.92 )       (0.92 )       4                   

Small Cap Growth Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 40.23       (0.13 )       (4.38 )       (4.51 )       4              (5.79 )       (5.79 )

Year ended 9/30/19

    $ 55.30       (0.28 )       (2.33 )       (2.61 )       4              (12.46 )       (12.46 )

Year ended 9/30/18

    $ 45.72       (0.54 )       15.19       14.65       4              (5.07 )       (5.07 )

Year ended 9/30/17

    $ 43.52       (0.53 )       6.24       5.71       4              (3.51 )       (3.51 )

Year ended 9/30/1616

    $ 45.97       (0.47 )       5.65       5.18       4              (7.63 )       (7.63 )

Year ended 9/30/15

    $ 50.25       (0.40 )       0.93       0.53       4              (4.81 )       (4.81 )

Small Cap Growth Fund — Institutional Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 40.60       (0.09 )       (4.45 )       (4.54 )       4              (5.79 )       (5.79 )

Year ended 9/30/19

    $ 55.61       (0.24 )       (2.31 )       (2.55 )       4              (12.46 )       (12.46 )

Year ended 9/30/18

    $ 45.89       (0.31 )       15.10       14.79       4              (5.07 )       (5.07 )

Year ended 9/30/17

    $ 43.58       (0.17 )       5.99       5.82       4              (3.51 )       (3.51 )

Period ended 9/30/1614 16

    $ 37.58       (0.07 )       6.07       6.00       4                   

See Notes to Financial Highlights and Notes to Financial Statements.

 

96


Table of Contents
  (for a share outstanding throughout each period)

 

 

 

            Ratios to Average Net Assets     Supplemental Data  
Net Asset
Value
End of
Period
    Total Return (%)1    

Expenses
Net of

Waivers and
Reimbursements (%)2

   

Expenses
Before

Waivers and
Reimbursements (%)2

    Net Investment
Income (Loss) Net
of Waivers and
Reimbursements  (%)2
    Net Investment
Income (Loss)
Before Waivers and
Reimbursements  (%)2
    Net Assets
End of
Period
(000s)
    Portfolio
Turnover
Rate1 3
 
             
$ 3.03       (12.34     2.03 5      2.03 5      (1.21     (1.21   $ 98,087       16%  
$ 3.54       1.61       2.09 6      2.09 6      (1.04     (1.04   $ 132,503       46%  
$ 3.58       10.45       2.10 5 7      2.10 5 7      (1.07     (1.07   $ 240,489       36%  
$ 3.47       8.10       2.24 6      2.24 6      (0.88     (0.88   $ 265,879       59%  
$ 3.21       22.73       2.25 5      2.29 5      (0.35     (0.39   $ 512,252       41%  
$ 2.74       (1.44     2.25 5      2.43 5      (0.36     (0.54   $ 453,495       25%  
                 
$ 3.07       (12.20     1.93 5      1.93 5      (1.04     (1.04   $ 346,631       16%  
$ 3.58       1.59       1.96 6      1.96 6      (0.81     (0.81   $ 376,578       46%  
$ 3.62       10.66       1.96 5 7      1.97 5 7      (0.86     (0.87   $ 292,345       36%  
$ 3.50       8.36       1.96 6      2.04 6      (0.39     (0.47   $ 234,795       59%  
$ 3.23       19.19       1.95 5      2.04 5      0.64       0.55     $ 168,136       41%  
             
$ 9.47       (5.30     1.31 5      6.51 5      (0.75     (5.95   $ 1,675       21%  
             
$ 9.52       (4.80     0.92 5      6.75 5      (0.39     (6.23   $ 1,121       21%  
             
$ 5.73       (14.01     1.64 5      1.64 5      (1.45     (1.45   $ 435,739       38%  
$ 7.45       (1.15     1.66 5      1.66 5      (1.31     (1.31   $ 473,505       67%  
$ 9.86       38.04       1.65 5 8      1.65 5 8      (1.27     (1.27   $ 496,128       54%  
$ 8.23       25.10       1.75 5      1.75 5      (1.43     (1.43   $ 311,583       31%  
$ 7.19       16.04       1.92 5      1.92 5      (1.14     (1.14   $ 277,691       32%  
$ 7.21       2.45       1.90 5      1.90 5      (0.85 )10      (0.85 )10    $ 273,311       31%  
             
$ 5.73       (25.97     1.58 5      1.58 5      (1.33     (1.33   $ 14,562       38%  
             
$ 2.34       (20.40     1.73 5      1.73 5      (0.82     (0.82   $ 171,169       29%  
$ 3.21       (4.50     1.74 5      1.74 5      (0.90     (0.90   $ 249,523       66%  
$ 3.83       18.84       1.74 5 8      1.74 5 8      (0.89     (0.89   $ 283,623       69%  
$ 3.48       23.29       1.85 5      1.85 5      (0.81     (0.81   $ 216,087       57%  
$ 2.87       12.04       1.95 5      2.04 5      (0.59     (0.68   $ 179,116       73%  
$ 2.87       9.99       1.96 6      2.02 6      (0.55 )11      (0.61 )11    $ 154,169       53%  
             
$ 2.34       (28.22     1.60 5      1.62 5      0.23       0.21     $ 3,750       29%  
             
$ 29.93       (14.48     1.17 5      1.17 5      (0.84     (0.84   $ 805,265       24%  
$ 40.23       1.67 5      1.17 6      1.17 6      (0.80     (0.80   $ 978,825       26%  
$ 55.30       35.08       1.20 5 8      1.20 5 8      (0.84     (0.84   $ 1,170,809       36%  
$ 45.72       14.29       1.27 5      1.27 5      (0.88     (0.88   $ 1,182,573       19%  
$ 43.52       11.87       1.29 5      1.29 5      (0.79     (0.79   $ 1,544,796       20%  
$ 45.97       0.39       1.22 5      1.22 5      (0.75     (0.75   $ 2,000,588       31%  
             
$ 30.27       (14.42     1.05 5      1.09 5      (0.72     (0.76   $ 723,762       24%  
$ 40.60       1.80       1.06 6      1.09 6      (0.68     (0.72   $ 712,833       26%  
$ 55.61       35.27       1.06 5 7      1.10 5 7      (0.70     (0.74   $ 714,184       36%  
$ 45.89       14.54       1.05 5      1.11 5      (0.66     (0.72   $ 508,373       19%  
$ 43.58       15.97       1.05 5      1.11 5      (0.63     (0.69   $ 337,605       20%  

 

 

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WASATCH FUNDS  

 

 

Financial Highlights (continued)

 

        Income (Loss) from
Investment Operations
          Less Distributions    
     Net Asset
Value
Beginning
of Period
  Net
Investment
Income (Loss)
  Net Realized
and Unrealized
Gains (Losses)
on Investments
  Total from
Investment
Operations
  Redemption
Fees
(See Note 2)
  Dividends
from Net
Investment
Income
  Distributions
from Net
Realized
Gains
  Total
Distributions

Small Cap Value Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 7.61       0.04       (2.47 )       (2.43 )       4        (0.04 )       (0.05 )       (0.09 )

Year ended 9/30/19

    $ 8.53       0.03       (0.36 )       (0.33 )       4              (0.59 )       (0.59 )

Year ended 9/30/18

    $ 7.94       0.02       1.10       1.12       4        (0.01 )       (0.52 )       (0.53 )

Year ended 9/30/17

    $ 6.61       4        1.33       1.33       4        4             

Year ended 9/30/1616

    $ 5.86       0.01       0.77       0.78       4        (0.03 )             (0.03 )

Year ended 9/30/15

    $ 5.69       0.05 12        0.12       0.17       4                   

Small Cap Value Fund — Institutional Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 7.67       0.04       (2.48 )       (2.44 )       4        (0.05 )       (0.05 )       (0.10 )

Year ended 9/30/19

    $ 8.58       0.03       (0.35 )       (0.32 )       4              (0.59 )       (0.59 )

Year ended 9/30/18

    $ 7.98       0.04       1.10       1.14       4        (0.02 )       (0.52 )       (0.54 )

Year ended 9/30/17

    $ 6.65       0.01       1.34       1.35       4        (0.02 )             (0.02 )

Year ended 9/30/1616

    $ 5.88       0.02       0.78       0.80       4        (0.03 )             (0.03 )

Year ended 9/30/15

    $ 5.72       0.05 12        0.11       0.16       4                   

Ultra Growth Fund — Investor Class

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 25.30       (0.08 )       (1.14 )       (1.22 )       0.01             (0.56 )       (0.56 )

Year ended 9/30/19

    $ 27.68       (0.18 )       (0.60 )       (0.78 )       0.01             (1.61 )       (1.61 )

Year ended 9/30/18

    $ 21.81       4        8.31       8.31       4        (0.10 )       (2.34 )       (2.44 )

Year ended 9/30/17

    $ 19.89       (0.20 )       4.12       3.92       4        (0.11 )       (1.89 )       (2.00 )

Year ended 9/30/1616

    $ 18.06       (0.18 )       3.66       3.48       4              (1.65 )       (1.65 )

Year ended 9/30/15

    $ 23.67       (0.26 )       1.54       1.28       4        (0.01 )       (6.88 )       (6.89 )

Ultra Growth Fund — Institutional Class

 

               

Period ended 3/31/2020 (unaudited)

    $ 23.39       (0.01 )       0.15       0.14       4                   

U.S. Treasury Fund

 

                   

Six Months ended 3/31/20 (unaudited)

    $ 19.26       0.17       3.57       3.74       0.01       (0.17 )             (0.17 )

Year ended 9/30/19

    $ 15.26       0.34       3.99       4.33       0.01       (0.34 )             (0.34 )

Year ended 9/30/18

    $ 16.32       0.35       (1.07 )       (0.72 )       4        (0.34 )             (0.34 )

Year ended 9/30/17

    $ 19.86       0.35       (2.23 )       (1.88 )       0.01       (0.35 )       (1.32 )       (1.67 )

Year ended 9/30/1616

    $ 18.42       0.37       2.29       2.66       0.01       (0.36 )       (0.87 )       (1.23 )

Year ended 9/30/15

    $ 17.08       0.38       1.33       1.71       0.01       (0.38 )             (0.38 )

See Notes to Financial Highlights and Notes to Financial Statements.

 

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  (for a share outstanding throughout each period)

 

 

 

            Ratios to Average Net Assets     Supplemental Data  
Net Asset
Value
End of
Period
    Total Return (%)1    

Expenses
Net of

Waivers and
Reimbursements (%)2

   

Expenses
Before

Waivers and
Reimbursements (%)2

    Net Investment
Income (Loss) Net
of Waivers and
Reimbursements  (%)2
    Net Investment
Income (Loss)
Before Waivers and
Reimbursements (%)2
    Net Assets
End of
Period
(000s)
    Portfolio
Turnover
Rate1 3
 
             
$ 5.09       (32.38     1.19 5      1.19 5      1.02       1.02     $ 305,551       27%  
$ 7.61       (2.69     1.20 5      1.20 5      0.51       0.51     $ 454,451       25%  
$ 8.53       14.54       1.20 5 8      1.20 5 8      0.29       0.29     $ 347,298       46%  
$ 7.94       20.20       1.21 5      1.21 5      0.04       0.04     $ 320,978       37%  
$ 6.61       13.37       1.24 5      1.24 5      0.23       0.23     $ 269,710       57%  
$ 5.86       2.99       1.21 5      1.21 5      0.82 12      0.82 12    $ 257,655       57%  
             
$ 5.13       (32.28     1.05 5      1.08 5      1.17       1.14     $ 284,006       27%  
$ 7.67       (2.55     1.05 5      1.09 5      0.70       0.66     $ 368,498       25%  
$ 8.58       14.78       1.06 5 8      1.13 5 8      0.43       0.35     $ 91,857       46%  
$ 7.98       20.28       1.05 5      1.16 5      0.21       0.11     $ 49,671       37%  
$ 6.65       13.54       1.08 5      1.20 5      0.40       0.28     $ 23,839       57%  
$ 5.88       2.97       1.15 5      1.20 5      0.92 12      0.87 12    $ 18,941       57%  
             
$ 23.53       (5.11     1.20 5      1.20 5      (0.88     (0.88   $ 730,449       27%  
$ 25.30       (1.35     1.24 5      1.24 5      (0.93     (0.93   $ 623,154       17%  
$ 27.68       41.97       1.24 5 8      1.24 5 8      (1.00     (1.00   $ 297,562       44%  
$ 21.81       22.13       1.30 5      1.30 5      (1.06     (1.06   $ 111,366       34%  
$ 19.89       20.08       1.33 5      1.33 5      (1.03     (1.03   $ 101,402       28%  
$ 18.06       4.02       1.31 5      1.31 5      (1.06     (1.06   $ 96,015       38%  
             
$ 23.53       (19.94     1.05 5      1.06 5      (0.75     (0.76   $ 24,567       27%  
             
$ 22.84       19.58       0.66 5      0.66 5      1.66       1.66     $ 416,428       3%  
$ 19.26       28.73       0.69 5      0.69 5      2.05       2.05     $ 379,644       29%  
$ 15.26       (4.47     0.70 5 8      0.70 5 8      2.13       2.13     $ 303,105       6%  
$ 16.32       (8.86     0.72 5      0.72 5      2.04       2.04     $ 360,866       20%  
$ 19.86       15.49       0.69 5 15      0.73 5      1.97 15      1.93     $ 489,011       59%  
$ 18.42       10.09       0.67 5      0.67 5      2.12       2.12     $ 327,861       131%  

 

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Notes to Financial Highlights

 

  1

Not annualized for periods less than one year.

 

  2

Annualized for periods less than one year.

 

  3

Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

 

  4

Represents amounts less than $0.005 per share.

 

  5

Includes interest expense of less than 0.005%.

 

  6

Includes interest expenses of more than 0.005%.

 

  7

Includes extraordinary expenses greater than or equal to 0.01% (see Note 7 in “Notes to Financial Statements”).

 

  8

Includes extraordinary expenses of less than 0.01% (see Note 7 in “Notes to Financial Statements”).

 

  9

Investment income per share reflects a large, non-recurring dividend which amounted to $0.17 and $0.08 per share for the Investor Class and Institutional Class, respectively. Excluding this non-recurring dividend, the ratio of Net Investment Income (Loss) to Average Net Assets would have been as follows:

 

     Net Investment
Income (Loss) Net
of Waivers and
Reimbursements (%)
  Net Investment
Income (Loss)
Before Waivers and
Reimbursements (%)
   

Core Growth Fund — Investor Class

       (0.58 )       (0.58 )  

Core Growth Fund — Institutional Class

       (0.59 )       (0.60 )  

 

10Investment income per share reflects a large, non-recurring dividend which amounted to $0.04 per share. Excluding this non-recurring dividend, the ratio of Net Investment Income (Loss) to Average Net Assets would have been (1.40)%.

 

11Investment income per share reflects a large, non-recurring dividend which amounted to $0.01 per share. Excluding this non-recurring dividend, the ratio of Net Investment Income (Loss) to Average Net Assets would have been (1.04)% for Net Investment Income Net of Waivers and Reimbursements and (1.10)% for Net Investment Income (Loss) Before Waivers and Reimbursements.

 

12Investment income per share reflects a large, non-recurring dividend which amounted to $0.05 and $0.05 per share for the Investor Class and Institutional Class, respectively. Excluding this non-recurring dividend, the ratio of Net Investment Income (Loss) to Average Net Assets would have been as follows:

     Net Investment
Income (Loss) Net
of Waivers and
Reimbursements (%)
  Net Investment
Income (Loss)
Before Waivers and
Reimbursements (%)
   

Small Cap Value Fund — Investor Class

       (0.00 )13       (0.00 )13  

Small Cap Value Fund — Institutional Class

       0.10       0.05  

 

13Amount is less than 0.005%.

 

14Institutional class inception date was February 1, 2016.

 

15Includes reimbursement by Hoisington Investment Management Co., the Sub-Advisor, for proxy statement expenses which amounted to $0.01 per share.

 

16Includes a non-recurring offer to reimburse prior period custody and fund accounting out-of-pocket expenses (see Note 7 “Related Party Transactions” “Custodian Out-of-Pocket Expense Reimbursement” in “Notes to Financial Statements”). Excluding this non-recurring reimbursement, the Ratio of Expenses to Average Net Assets would have been as follows:

     Expenses Net
of Waivers and
Reimbursements (%)
  Expenses
Before Waivers and
Reimbursements (%)
   

Core Growth Fund — Investor Class

       1.21       1.21  

Core Growth Fund — Institutional Class

       1.07       1.09  

Emerging India Fund — Investor Class

       1.84       1.98  

Emerging India Fund — Institutional Class

       1.56       2.06  

Emerging Markets Select Fund — Investor Class

       1.60       2.00  

Emerging Markets Select Fund — Institutional Class

       1.33       1.63  

Emerging Markets Small Cap Fund — Investor Class

       1.97       2.01  

Emerging Markets Small Cap Fund — Institutional Class

       1.82       1.83  

Frontier Emerging Small Countries Fund — Investor Class

       2.25       2.39  

Frontier Emerging Small Countries Fund — Institutional Class

       2.08       2.08  

Global Opportunities Fund — Investor Class

       1.64       1.64  

Global Opportunities Fund — Institutional Class

       1.42       2.39  

Global Value Fund — Investor Class

       1.10       1.17  

Global Value Fund — Institutional Class

       0.96       1.72  

International Growth Fund — Investor Class

       1.48       1.48  

International Growth Fund — Institutional Class

       1.36       1.37  

International Opportunities Fund — Investor Class

       2.26       2.30  

International Opportunities Fund — Institutional Class

       1.97       2.06  

Micro Cap Fund — Investor Class

       1.92       1.92  

Micro Cap Value Fund — Investor Class

       1.96       2.05  

Small Cap Growth Fund — Investor Class

       1.29       1.29  

Small Cap Growth Fund — Institutional Class

       1.05       1.11  

Small Cap Value Fund — Investor Class

       1.24       1.24  

Small Cap Value Fund — Institutional Class

       1.08       1.20  

Ultra Growth Fund — Investor Class

       1.34       1.34  

U.S. Treasury Fund

       0.69       0.73  

 

17Per share amounts do not correlate to amounts reported in the Statement of Operations due to timing of share activity.

 

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18Net Realized and Unrealized Gains (Losses) on Investments per share reflects a large, non-recurring receivable for security litigation which amounted to $0.06 and $0.06 per share for the Investor Class and Institutional Class, respectively. Excluding this non-recurring receivable, Net Realized and Unrealized Gains (Losses) on Investments would have been $0.59 and $0.60 per share for the Investor Class and Institutional Class, respectively. Excluding this non-recurring receivable, Total Return would have been 8.74% and 8.91% for the Investor Class and Institutional Class, respectively.

 

19Fund inception date was October 1, 2019.

 

20Institutional Class inception date was January 31, 2020.

See Notes to Financial Statements.

 

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WASATCH FUNDS  

 

 

Notes to Financial Statements

 

1. ORGANIZATION

Wasatch Funds Trust (the “Trust”) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and consists of 17 series or funds (each a “Fund” and collectively the “Funds”). The Core Growth Fund, Emerging India Fund, Emerging Markets Select Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, Global Value Fund, International Growth Fund, International Opportunities Fund, Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund, Ultra Growth Fund, and Wasatch-Hoisington U.S. Treasury Fund (“U.S. Treasury Fund”) (sub-advised) are each a diversified fund. The Global Select Fund and International Select Fund are each a non-diversified fund. Each Fund maintains its own investment objective(s).

On November 9, 2011, the Trust re-designated the shares of the Funds into Investor Class shares effective January 31, 2012, and authorized and designated a new Institutional Class of shares in the Funds. Currently 16 funds offer Institutional Class shares: Core Growth Fund, Global Value Fund and Small Cap Value Fund, which commenced operations on January 31, 2012, Emerging Markets Select Fund, which commenced operations on December 13, 2012 and Emerging India Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, International Growth Fund, International Opportunities Fund and Small Cap Growth Fund, which commenced operations on February 1, 2016, International Select Fund and Global Select Fund, which commenced operations on October 1, 2019 and Wasatch Micro Cap Fund, Wasatch Micro Cap Value Fund and Wasatch Ultra Growth Fund, which commenced operations on January 31, 2020. Each class of shares for each Fund has identical rights and privileges except with respect to purchase minimums, distribution and service charges, shareholder services, voting rights on matters affecting a single class of shares, and the exchange and conversion features. The Funds have entered into an investment advisory agreement with Wasatch Global Investors, Inc. (the “Advisor” or “Wasatch”) as investment advisor.

The Core Growth, Emerging India, Emerging Markets Select, Emerging Markets Small Cap, Frontier Emerging Small Countries, Global Opportunities, Global Select, Global Value, International Growth, International Opportunities, International Select, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value and Ultra Growth Funds are referred to herein as the “Equity Funds.”

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant policies related to investments of the Funds held at March 31, 2020. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Valuation of Securities — All investments in securities are recorded at their estimated fair value as described in Note 12.

Foreign Currency Translations — Values of investments denominated in foreign currencies are converted into U.S. dollars using the current exchange rates each business day (generally 4:00 p.m. Eastern Time). Purchases and sales of investments and dividend income are translated into U.S. dollars using the current prevailing exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized gains or losses on securities is reflected as a component of such gains or losses. Transactions in foreign denominated assets may involve greater risks than domestic transactions.

Investment in Securities and Related Investment Income — Security transactions are accounted for on the trade date. Gains or losses on securities sold are determined on the identified cost basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date except that certain dividends from foreign securities may be recorded after the ex-dividend date based on when the Fund is informed of the dividend. Interest income and estimated expenses are accrued daily. Bond discount and premiums are amortized using the interest method. To the extent dividends received include return of capital or capital gain distributions, such distributions are recorded as a reduction to cost of the related security or as realized gain or loss.

For financial purposes the estimates of all REIT rates are based on prior year average rates made public by the REITs. To obtain these rates we utilize a service through Wall Street Concepts which gathers and disseminates the information. Prior to filing the tax returns the REIT rates are trued up for actual rates. The differences between the actual verses the trued-up rates are captured in the next fiscal year’s financial process.

Expenses — The Funds contract for various services on a collective basis. Most expenses are directly attributable to each Fund and therefore are charged accordingly. Expenses that are not directly attributable to one or more Funds are allocated among applicable Funds on an equitable and consistent basis considering such things as the nature and type of expense and the relative net assets of the Funds.

Use of Management Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported changes in net assets during the reporting period. Actual results could differ from those estimates.

Guarantees and Indemnifications — In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds and/or their affiliates that have not yet occurred. Based on experience, however, the risk of loss is expected to be remote.

Redemption Fees — The Funds deduct a fee of 2.00% from redemption proceeds on shares of the Funds held 60 days or less. Redemption fees retained by the Funds are credited to additional paid-in capital.

Other — Income, expenses, and realized and unrealized

 

 

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gains or losses on investments are generally allocated to each class of shares based on its relative net assets, except that each class separately bears expenses related specifically to that class, such as certain shareholder servicing fees.

3. SECURITIES AND OTHER INVESTMENTS

Repurchase Agreements — The Funds may engage in repurchase transactions. Under the terms of a typical repurchase agreement, a fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase and the fund to resell the obligation at an agreed upon price and time. The market value of the collateral must be at least equal at all times to the total amount of the repurchase obligation, including interest. Generally, in the event of counterparty default, the fund has the right to use the collateral to offset losses incurred.

Short Sales — The Equity Funds may enter into short sales whereby a fund sells a security it generally does not own (the security is borrowed), in anticipation of a decline in the security’s price. The initial amount of a short sale is recorded as a liability which is marked-to-market daily. Fluctuations in the value of the short liability are recorded as unrealized gains or losses. If a Fund shorts a security when also holding a long position in the security (a “short against the box”), as the security’s price declines, the short position increases in value, offsetting the long position’s decrease in value. The opposite effect occurs if the security’s price rises. A Fund realizes a gain or loss upon closing of the short sale (returning the security to the counterparty by way of purchase or delivery of a long position owned). Possible losses from short sales may be unlimited, whereas losses from security purchases cannot exceed the total amount invested. The Funds are liable to the buyer for any dividends payable on securities while those securities are in a short position. These dividends are an expense of the Funds. The Funds designate collateral consisting of cash, U.S. government securities or other liquid assets sufficient to collateralize the market value of short positions.

Participation Notes — Certain Funds may invest in Participation Notes (P-Notes). P-Notes are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow a fund to gain exposure to common stocks in markets in which the fund is currently not approved to directly invest, or in markets that prohibit direct investment by foreign purchasers. While the holder of a P-Note is entitled to receive from the bank or broker-dealer any dividends or other distributions paid on the underlying securities, the holder is not entitled to the same rights as an owner of the underlying securities, such as voting rights. Income received from P-Notes is recorded as dividend income in the Statement of Operations. P-Notes are considered general unsecured contractual obligations of the bank or broker-dealer. Risks associated with P-Notes include the possible failure of a counterparty (i.e., the issuing bank or broker-dealer) to perform in accordance with the terms of the agreement, inability to transfer

or liquidate the notes, potential delays or an inability to redeem the notes before maturity under certain market conditions, and limited legal recourse against the issuer of the underlying common stock.

4. FINANCIAL DERIVATIVE INSTRUMENTS

Foreign Currency Contracts — The Funds may enter into foreign currency contracts to settle planned purchases or sales of securities or to protect against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and a foreign currency involved in an underlying transaction. Foreign currency contracts are agreements between two parties to buy and sell a currency at a set price on a future date. The market value of a foreign currency contract fluctuates with changes in currency exchange rates. Foreign currency contracts are marked-to-market daily and the change in market value is recorded by a fund as unrealized appreciation or depreciation. When a foreign currency contract is closed, the fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These contracts may involve market risk in excess of the unrealized gain or loss reflected in the Schedule of Investments. In addition, a fund could be exposed to credit risk if a counterparty is unable or unwilling to meet the terms of the contracts or if the value of the currency changes unfavorably. In connection with these contracts, the Funds may segregate cash and/or securities in a sufficient amount as collateral in accordance with the terms of the respective contracts.

 

 

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Notes to Financial Statements (continued)

 

5. PURCHASES AND SALES OF SECURITIES

The cost of investment securities purchased and proceeds from sales of investment securities, excluding U.S. government and short-term securities, for the six months ended March 31, 2020 are summarized below:

 

     Core
Growth
Fund
   Emerging
India
Fund
   Emerging
Markets
Select
Fund
   Emerging
Markets
Small Cap
Fund
   Frontier
Emerging
Small Countries
Fund
   Global
Opportunities
Fund

Purchases

    $ 510,309,442      $ 58,905,355      $ 7,890,439      $ 28,043,341      $ 10,671,341      $ 12,967,079

Sales

      529,263,264        63,328,998        9,259,947        70,500,201        19,651,978        17,943,630
     Global
Select
Fund
   Global
Value
Fund
   International
Growth
Fund
   International
Opportunities
Fund
  

International
Select

Fund

   Micro
Cap
Fund

Purchases

    $ 11,179,411      $ 54,394,056      $ 228,421,198      $ 95,427,865      $ 3,649,369      $ 250,399,967

Sales

      307,408        69,317,479        310,938,480        79,643,130        542,649        192,637,754
     Micro Cap
Value
Fund
   Small Cap
Growth
Fund
   Small Cap
Value
Fund
   Ultra
Growth
Fund
         

Purchases

    $ 67,718,907      $ 512,435,054      $ 282,957,954      $ 377,207,004          

Sales

      88,726,615        433,737,254        215,049,593        197,094,933          

Purchases and sales of U.S. government securities in the U.S. Treasury Fund were $9,991,820 and $48,147,834, respectively.

6. FEDERAL INCOME TAX INFORMATION

It is each Fund’s policy to comply with the requirements under Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income to shareholders. The Funds are no longer subject to examination by tax authorities for years prior to 2017. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total of amounts of unrecognized tax benefits will significantly change in the next 12 months. Accordingly, no provision for federal income or excise taxes has been made.

As of March 31, 2020, the cost and unrealized appreciation (depreciation) of securities on a tax basis were as follows:

 

     Core
Growth
Fund
   Emerging
India
Fund
   Emerging
Markets
Select
Fund
   Emerging
Markets
Small Cap
Fund
   Frontier
Emerging
Small
Countries
Fund
   Global
Opportunities
Fund

Cost

    $ 1,733,438,143      $ 209,292,209      $ 33,170,140      $ 229,043,511      $ 48,360,978      $ 86,401,608
   

 

 

      

 

 

 

Gross appreciation

    $ 434,630,558      $ 36,386,132      $ 7,687,533      $ 96,413,116      $ 3,479,717      $ 25,707,656

Gross (depreciation)

      (282,829,691 )        (38,092,805 )        (5,149,978 )        (45,654,219 )        (11,712,263 )        (15,083,761 )
   

 

 

      

 

 

 

Net appreciation (depreciation)

    $ 151,800,867      $ (1,706,673 )      $ 2,537,555      $ 50,758,897      $ (8,232,546 )      $ 10,623,895
   

 

 

 
    

Global
Select Fund

   Global
Value
Fund
   International
Growth
Fund
   International
Opportunities
Fund
   International
Select
Fund
  

Micro

Cap

Fund

Cost

    $ 10,877,746      $ 117,956,112      $ 776,757,017      $ 372,592,853      $ 3,118,125      $ 474,456,426
   

 

 

 

Gross appreciation

    $ 273,715      $ 5,813,040      $ 214,166,523      $ 128,799,235      $ 160,729      $ 79,629,245

Gross (depreciation)

      (1,645,754 )        (23,357,880 )        (91,980,219 )        (54,741,882 )        (479,925 )        (104,112,140 )
   

 

 

 

Net appreciation (depreciation)

    $ (1,372,039 )      $ (17,544,840 )      $ 122,186,304      $ 74,057,353      $ (319,196 )      $ (24,482,895 )
   

 

 

 

 

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Micro Cap
Value
Fund

   Small Cap
Growth
Fund
   Small Cap
Value
Fund
   Ultra
Growth
Fund
   U.S.
Treasury
Fund

Cost

    $ 175,660,018      $ 1,394,907,602      $ 764,415,334      $ 789,461,799      $ 311,840,149
   

 

 

 

Gross appreciation

    $ 30,577,282      $ 318,400,839      $ 44,354,899      $ 95,969,856      $ 103,624,521

Gross (depreciation)

      (31,448,671 )        (182,050,451 )        (221,459,373 )        (131,556,865 )       
   

 

 

 

Net appreciation (depreciation)

    $ (871,389 )      $ 136,350,388      $ (177,104,474 )      $ (35,587,009 )      $ 103,624,521
   

 

 

 

The difference between book-basis and tax-basis unrealized gains is primarily attributable to the tax deferral of losses on wash sales, unrealized appreciation on passive foreign investment companies (PFICs), partnership adjustments and other temporary tax adjustments.

The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year-end. Accordingly, tax basis balances have not been determined as of the date of this report.

Dividends from net investment income and net realized gains, if any, are declared and paid at least annually for all Funds, except for dividends from net investment income in two funds. The Global Value and U.S. Treasury Funds declare and pay dividends quarterly. The amount of dividends and distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. The Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).

To the extent these book and tax differences are permanent in nature, such amounts are reclassified at the end of the fiscal year among additional paid-in capital, undistributed net investment income (loss), and undistributed net realized gain (loss) on investments, options and foreign currency translations. The reclassifications generally relate to the tax treatment of net operating losses, the netting of net operating losses to short-term gains, investments in REITs and partnerships, redemptions in-kind, distribution reclassifications, foreign capital gains taxes, Section 988 currency gains and losses, PFICs, paydown gains and losses, non-REIT return of capital dividends, and equalization. These reclassifications have no impact on the net asset values of the Funds.

Capital loss carryforwards are available through the date specified below to offset future realized net capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. To the extent future gains are offset by capital loss carryforwards, such gains will not be distributed.

Under the Regulated Investment Company Modernization Act of 2010, a Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Post-enactment losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

Capital loss carryforwards as of September 30, 2019 are as follows:

 

    Non-expiring
Fund   Short Term    Long Term

Emerging India Fund

    $ 1,258,163      $

Emerging Markets Select Fund

      4,595,927       

Frontier Emerging Small Countries Fund

      92,551,793        13,409,150

Global Value Fund*

      24,236,995        139,146,556

U.S. Treasury Fund

      11,484,403        8,231,585

 

*

The Fund’s capital loss carryforward is subject to an annual limitation under the Internal Revenue Code and related regulations.

During the tax year ended September 30, 2019, the Funds used capital loss carryforwards in the following amounts:

 

Fund   Amount Used

Frontier Emerging Small Countries Fund

    $ 2,166,331

Global Value Fund

      1,027,950

The Funds have elected to defer losses incurred from November 1, 2018 through September 30, 2019 in accordance with federal income tax rules. These losses are treated as having arisen on the first day of the following fiscal year. The Funds have elected to defer losses as follows:

 

Fund  

Post-October

Capital Losses

   Late-Year Ordinary
Losses

Core Growth Fund

    $   —      $ 9,295,073

Emerging India Fund

             2,083,000

Emerging Markets Select Fund

             82,935

 

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Notes to Financial Statements (continued)

 

Fund  

Post-October

Capital Losses

   Late-Year Ordinary
Losses

Emerging Markets Small Cap Fund

    $      $ 1,866,761

Frontier Emerging Small Countries Fund

             1,682,001

Global Opportunities Fund

             764,451

International Growth Fund

             582,415

International Opportunities Fund

             2,420,284

Micro Cap Fund

             4,633,175

Micro Cap Value Fund

             1,847,977

Small Cap Growth Fund

             9,503,034

Ultra Growth Fund

        —        3,004,715

EU Reclaims — As a result of several court cases in certain countries across the European Union, the Emerging Markets Small Cap Fund, Global Opportunities Fund, Global Value Fund, International Growth Fund and International Opportunities Fund filed tax reclaims for previously withheld taxes on dividends earned in Finland and Poland (EU Reclaims). These additional filings are subject to various administrative proceedings by the local jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Income recognized, if any, for EU Reclaims is reflected as dividend income in the Statements of Operations and related receivables, if any, are reflected as interest and dividends receivable in the Statements of Assets and Liabilities. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU Reclaims and the potential timing of payment, no amounts are reflected in the financial statements.

7. RELATED PARTY TRANSACTIONS

Investment Advisory Fees, Expense Limitations — As the Funds’ investment advisor, the Advisor receives a monthly fee calculated on average daily net assets. The Advisor has contractually agreed to waive its fees and/or reimburse certain Funds should a Fund’s operating expenses exceed a specified annual limitation through at least January 31, 2021. If operating expenses are less than the specified expense limit for the Fund, the Advisor shall be entitled to recoup the fees waived or reduced to the extent that the operating expenses and the amounts reimbursed do not exceed such expense limit for the Fund, under the period of the agreement (currently through January 31, 2021). The Funds may only make repayments to the Advisor for the amounts reimbursed if such repayment does not cause the Funds’ expense ratio, after repayment is taken into account, to exceed both (i) the expense cap at the time such amounts were waived; and (ii) the Fund’s current expense cap. All amounts not recovered at the end of the period expire on January 31, 2021. Shareholder expenses will increase if the Advisor does not renew the contractual expense cap after its expiration date. Ordinary operating expenses exclude any interest, dividend expense on short sales/interest expense, taxes, brokerage commissions, other investment-related costs, acquired fund fees and expenses, and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Funds’ business. Investment advisory fees and fees waived, if any, for the six months ended March 31, 2020 are disclosed in the Statements of Operations. Investment advisory fee and expense limitation annual rates are shown below.

 

Fund    Advisory
Fee
   Expense
Limitation
Investor Class
   Expense
Limitation
Institutional Class
   Contractual Expense
Limitation/
Reimbursement
Recoverable
Expiration Date
   Reimbursement
Recoverable

Core Growth Fund

       1.00%        1.50%        1.05%        1/31/2021      $ 131,713

Emerging India Fund

       1.25%        1.75%        1.50%        1/31/2021       

Emerging Markets Select Fund

       1.00%        1.50%        1.20%        1/31/2021        44,255

Emerging Markets Small Cap Fund

       1.65%        1.95%        1.80%        1/31/2021        13,710

Frontier Emerging Small Countries Fund

       1.65%        2.15%        1.95%        1/31/2021        43,758

Global Opportunities Fund

       1.25%        1.75%        1.35%        1/31/2021        17,893

Global Select Fund

       0.85%        1.35%        0.95%        1/31/2021        66,690

Global Value Fund

       0.90%        1.10%        0.95%        1/31/2021        99,201

International Growth Fund

       1.25%        1.75%        1.35%        1/31/2021        640

International Opportunities Fund

       1.75%        2.25%        1.95%        1/31/2021       

International Select Fund

       0.80%        1.30%        0.90%        1/31/2021        69,128

Micro Cap Fund

       1.50%        1.95%        1.60%        1/31/2021       

Micro Cap Value Fund

       1.50%        1.95%        1.60%        1/31/2021        38

Small Cap Growth Fund

       1.00%        1.50%        1.05%        1/31/2021        169,516

Small Cap Value Fund

       1.00%        1.50%        1.05%        1/31/2021        53,999

Ultra Growth Fund

       1.00%        1.50%        1.05%        1/31/2021        88

U.S. Treasury Fund

       0.50%        0.75%        N/A        1/31/2021       

 

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Affiliated Trades — Certain Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined in the procedures adopted by the Board of Trustees (the “Board”). The procedures have been designed to ensure that any purchase or sale of securities by the Funds from or to another fund (or funds) that are, or could be, considered an affiliate by virtue of having a common investment advisor (or affiliated investment advisors), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, each transaction is effected at the current market price, as that term is defined under the procedures. During the six months ended March 31, 2020, the Funds did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the 1940 Act.

Compensation — Officers serve in that capacity without compensation from the Trust. Beginning in the calendar year of 2020, the Funds’ method of compensating Trustees is to pay each Independent Trustee a retainer of $125,000 per year for services rendered and a fee of $25,000 for each Board of Trustees meeting attended in person or telephonically. In addition, each Independent Trustee receives a fee of $25,000 for attendance at an executive session held with respect to the contract renewal process for the Funds. In addition, the Chairman of the Board receives an additional fee of $31,250 a year as Chairman and $7,813 for attendance in person or telephonically at a Board meeting; the Chairman of the Audit Committee and the Chairman of the Nominating Committee each receive an additional $18,750 per year as Chairman and $4,688 for attendance in person or telephonically at a Board meeting. Additionally, each Independent Trustee is entitled to reimbursement of expenses related to his or her duties as a Trustee of the Funds.

Payments by Advisor — On October 16, 2014, the Advisor discovered a trade error involving the Ultra Growth Fund. The Advisor reimbursed the Fund $12,267. On August 2, 2016, the Advisor discovered a trade error involving the Small Cap Growth Fund. The Advisor reimbursed the Fund $12,890.

During 2018, the Advisor paid for a portion of the expenses in connection with the merger of the Long/Short and Global Value Funds.

The impact of the payments detailed above is reflected in the net expense ratios in the Financial Highlights.

Payments by Sub-Advisor — In June 2016, the Funds filed a proxy statement with the Securities and Exchange Commission to inform shareholders about a Special Meeting of Shareholders of the Wasatch-Hoisington U.S. Treasury Fund. The purpose of the Shareholder Meeting was to ask shareholders to approve a new Sub-Advisory Agreement between the Advisor and Hoisington Investment Management Company (HIMCo) with respect to the Wasatch-Hoisington U.S. Treasury Fund. HIMCo the Sub-Advisor for the Fund, reimbursed the Wasatch-Hoisington U.S. Treasury Fund for the costs associated with the proxy statement filing. The Sub-Advisor does not intend to be reimbursed for this amount.

Pursuant to a sub-advisory agreement entered into between the Advisor and HIMCo (“HIMCo Sub-Advisory

Agreement”), and subject to the supervision of the Advisor, HIMCo directs the investment of the U.S. Treasury Fund’s assets and is responsible for the continuing management of the Fund’s assets, including the placement of purchase and sale orders on behalf of the Fund. The HIMCo Sub-Advisory Agreement provides that the Advisor shall pay HIMCo a monthly management fee computed at the annual rate of 0.02% of the Fund’s average daily net assets as long as and whenever the Fund has net assets less than $20 million and one-half (1/2) of the monthly fee the Advisor receives from the Fund under the Advisory and Service Contract as long as and whenever the Fund has net assets of $20 million or more. The Advisor retains the remainder of the advisory fee paid under the Advisory and Service Contract. The Sub-Advisor may reimburse the Advisor for certain expenses.

Transfer Agent Intermediary Fees Reimbursed to the Advisor — Each Fund paid fees to, and reimbursed certain out-of-pocket expenses of, the Funds’ transfer agent during the period. In addition, the Advisor and the Funds’ distributor have entered into selling dealer agreements and service agreements with certain financial services companies, broker-dealers, banks, advisors, retirement service providers or other authorized agents or organizations (each an “Intermediary,” together, “Intermediaries”) to accept purchase, exchange and redemption orders on the Funds’ behalf. For Investor Class shares of the Funds, some Intermediaries do not charge investors a direct transaction fee, but instead charge a fee for accounting and shareholder services that the agent provided to Fund shareholders on the Funds’ behalf. Those services typically included recordkeeping, transaction processing for shareholders’ accounts, communication of tax information, income distribution and other services. Generally, the fee was either a per account charge based on the number of accounts to which the Intermediary provided such services, or was a percentage (as of March 31, 2020 up to 0.40% annually) of the average value of Fund Investor Class shares held in such accounts. The Advisor paid the Intermediary fees and the Funds reimbursed the Advisor for the portion of such fees, which is intended to compensate the Intermediary for provision of services of the type that would be provided by the Funds’ transfer agent or other service providers if the shares were registered on the books of the Funds’ transfer agent. Institutional Class shares of the Funds do not reimburse the Advisor for payments to Intermediaries. The Funds’ reimbursement of expenses incurred for services provided by Intermediaries are included in “Shareholder servicing fees — Investor Class” in the Statements of Operations.

Custodian Out-of-Pocket Expense Reimbursement — In September 2016, State Street Bank and Trust Company (“SSB”), the Funds’ custodian, provided each Fund with an offer to reimburse the Fund for certain out-of-pocket expenses it charged the Fund between 2003 and 2015. The incorrect charges were due to inaccurate billing rates used by SSB for certain out-of-pocket expenses. SSB made the reimbursements in May 2017.

 

 

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10% Shareholders — As of March 31, 2020, the Funds had individual shareholder accounts and/or omnibus shareholder accounts (comprised of a group of individual shareholders), which individually amounted to more than 10% of the total shares outstanding of the Fund as detailed below:

 

Fund   Number of
Accounts
     Percent of Shares
Outstanding
 

Core Growth Fund

    2        43.27

Emerging India Fund

    2        56.20

Emerging Markets Select Fund

    2        67.02

Emerging Markets Small Cap Fund

    2        56.76

Frontier Emerging Small Countries Fund

    3        58.32

Global Opportunities Fund

    3        60.86

Global Select Fund

    3        68.05

Global Value Fund

    2        72.53

International Growth Fund

    2        56.26

International Opportunities Fund

    2        41.98

International Select Fund

    3        84.25

Micro Cap Fund

    2        42.29

Micro Cap Value Fund

    3        57.64

Small Cap Growth Fund

    2        49.43

Small Cap Value Fund

    3        55.95

Ultra Growth Fund

    2        57.10

U.S. Treasury Fund

    3        50.28

Affiliated Interests — As of March 31, 2020, the Advisor and its affiliates, and the retirement plans of the Advisor and its affiliates, held shares of the Funds which may be redeemed at any time as detailed below:

 

Fund   Number of
Accounts*
     Percent of Shares
Outstanding
 

Core Growth Fund

    25        1.31

Emerging India Fund

    36        8.08

Emerging Markets Select Fund

    24        27.62

Emerging Markets Small Cap Fund

    17        3.87

Frontier Emerging Small Countries Fund

    14        2.34

Global Opportunities Fund

    19        8.71

Global Select Fund

    20        84.10

Global Value Fund

    7        2.04

International Growth Fund

    18        1.25

International Opportunities Fund

    20        1.06

International Select Fund

    10        62.77

Micro Cap Fund

    20        0.88

Micro Cap Value Fund

    18        4.23

Small Cap Growth Fund

    19        1.19

Small Cap Value Fund

    16        1.73

Ultra Growth Fund

    16        0.62

U.S. Treasury Fund

    14        3.80

 

*

Multiple accounts with the same beneficial owner are treated as one account.

8. TRANSACTIONS WITH AFFILIATES

If a Fund’s holding represents ownership of 5% or more of the voting securities of a company, the company is deemed to be an affiliate as defined by the 1940 Act. The following Funds conducted transactions during the six months ended March 31, 2020 with an “affiliated company” as so defined:

 

     Value,
Beginning
of Year
 

Purchases
at Cost
9/30/2019

  Proceeds
from Sales
  Value, End
of Period
3/30/2020
  Dividends
Credited to
Income for the
period ended
3/31/2020
  Gain (Loss)
Realized on
Sale of Shares
for the
period ended
3/31/2020
  Change in
Unrealized
Appreciation
(Depreciation)
for the
period ended
3/31/2020

Micro Cap Fund

                       

IM Cannabis Corp.

    $ 3,007,813     $ 1,538,268     $     $ 1,713,179     $     $     $ (2,832,902 )

Lonestar Resources US, Inc., Class A

      5,180,047       462,685             867,756                   (4,774,976 )

Transcat, Inc.

      10,031,463       3,130,713       (1,362,879 )       11,951,633             84,910       67,426
   

 

 

 
    $ 18,219,323     $ 5,131,666     $ (1,362,879 )     $ 14,532,568     $   —     $ 84,910     $ (7,540,452 )
   

 

 

 

 

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9. RESTRICTED SECURITIES

The Funds may own investments that were purchased through private placement transactions or under Rule 144A of the Securities Act of 1933 (the “Securities Act”) and cannot be sold without prior registration under the Securities Act or may be limited due to certain restrictions. These securities are generally deemed to be illiquid and are valued at fair value as determined by a designated Pricing Committee of the Advisor (“Pricing Committee”), comprised of personnel of the Advisor, with oversight by the Board of Trustees and in accordance with Board-approved Pricing Policies and Procedures. If and when such securities are registered, the costs of registering such securities are paid by the issuer. At March 31, 2020, the Funds held the following restricted securities:

 

      Security
Type
   Acquisition
Date
   Cost    Fair
Value
   Value as a Percent
of Net Assets

Emerging India Fund

                      

SBI Cards & Payment Services Ltd.

   Common Stock        2/28/20 - 3/31/20      $ 4,129,484      $ 3,227,300        1.60 %

 

 

Micro Cap Fund

                      

Selecta Biosciences, Inc., expiring 12/23/2024

   Warrants        12/19/19      $ 64,058      $ 640,581        0.14 %

 

 

Micro Cap Value Fund

                      

Regenacy Pharmaceuticals, LLC

   LLC Membership Interest        12/21/16      $ 30,001      $ 20,211        0.01 %

Vertex Energy, Inc., Pfd., 6.00% PIK Series B

   Convertible Preferred Stock        6/22/15 - 10/7/19        1,903,434        1,998,434        1.14 %

Vertex Energy, Inc., expiring 12/24/2020

   Warrants        6/22/15        95,000               —  %
                  
             $ 2,028,435      $ 2,018,645        1.15 %

 

 

Small Cap Growth Fund

                      

DataStax, Inc., Series E Pfd.

   Preferred Stock        8/12/14      $ 8,000,002      $ 8,359,575        0.55 %

Greenspring Global Partners II-B, L.P.

   LP Interest        10/10/03 - 3/31/17        1,778,530        813,460        0.05 %

Greenspring Global Partners III-B, L.P.

   LP Interest        3/16/06 - 6/29/17        514,561        542,714        0.04 %

Nanosys, Inc., Series D Pfd.

   Preferred Stock        11/8/05        2,000,000        325,424        0.02 %

Nanosys, Inc., Series E Pfd.

   Preferred Stock        8/13/10        184,939        188,977        0.01 %
                  
             $ 12,478,032      $ 10,230,150        0.67 %

 

 

Ultra Growth Fund

                      

Greenspring Global Partners II-B, L.P.

   LP Interest        10/10/03 - 3/31/17      $ 1,602,778      $ 732,108        0.10 %

Greenspring Global Partners III-B, L.P.

   LP Interest        3/16/06 - 6/29/17        515,573        542,714        0.07 %

Nanosys, Inc., Series D Pfd.

   Preferred Stock        11/8/05        500,001        81,356        0.01 %

Nanosys, Inc., Series E Pfd.

   Preferred Stock        8/13/10        46,235        47,245        0.01 %

Selecta Biosciences, Inc., expiring 12/23/2024

   Warrants        12/19/19        79,620        796,200        0.11 %
                  
             $ 2,744,207      $ 2,199,623        0.29 %

 

 

10. LINE OF CREDIT

Effective May 17, 2019, the Trust and each Fund (except the Wasatch Global Select Fund and the Wasatch International Select Fund) renewed and amended agreements for two open lines of credit totaling $300,000,000, one of which is $100,000,000 committed, and the other of which is $200,000,000 uncommitted, with State Street Bank and Trust Company (together, the “Line”). The agreements, as amended, have no change in the committed, uncommitted and total amounts available on the Line. The Funds incur commitment fees on the undrawn portion of the committed part of the Line, and interest expense to the extent of amounts drawn (borrowed) under the entire Line. Interest is based on the higher of (a) the overnight federal-funds rate in effect on the date of borrowing, plus a margin, or (b) the daily 1-Month London Interbank Offered Rate (LIBOR) in effect on the date of borrowing, plus a margin. Commitment fees are pro-rated among the Funds based upon relative average net assets. Interest expense is charged directly to a Fund based upon actual amounts borrowed by that Fund. Effective October 22, 2019, the Wasatch Global Select Fund and the Wasatch International Select Fund became parties to the renewed and amended agreements.

 

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Notes to Financial Statements (continued)

 

For the six months ended March 31, 2020, the following Funds had borrowings:

 

Funds Utilizing the Line of Credit   Average Daily
Borrowings
   Number of
Days
Outstanding
   Interest
Expense
   Weighted
Average
Annualized
Interest Rate
   Balance at
3/31/2020

Core Growth Fund

    $   8,309,767        13      $ 7,831        2.61 %      $

Emerging India Fund

      3,945,830        60        16,071        2.44 %        8,179,937

Emerging Markets Select Fund

      916,529        31        2,450        3.10 %       

Emerging Markets Small Cap Fund

      2,080,958        82        13,385        2.82 %       

Frontier Emerging Small Countries Fund

      307,030        20        476        2.79 %       

Global Opportunities Fund

      771,196        28        1,565        2.61 %       

Global Select Fund

      151,710        2        25        2.92 %       

Global Value Fund

      53,076        1        3        2.21 %       

International Growth Fund

      5,594,906        8        2,764        2.22 %       

International Select Fund

      92,454        8        59        2.87 %       

Micro Cap Fund

      156,345        1        9        2.17 %       

11. PRINCIPAL RISKS

Market and Credit Risk — In the normal course of business the Funds trade financial instruments and enter into financial transactions where risk of loss exists due to changes in the market (market risk) or the failure of the other party to a transaction to perform (credit risk). Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss could exceed the value of the financial assets recorded in the financial statements. Financial assets, which potentially expose the Funds to credit risk, consist principally of cash due from counterparties and investments. The extent of the Funds’ exposure to credit and counterparty risks with respect to these financial assets approximates their carrying value as recorded in the Funds’ Statements of Assets and Liabilities.

Inflation Risk — Inflation risk is the possibility that inflation will reduce the purchasing power of a currency, and subsequently reduce the value of a security or asset, and may result in rising interest rates. Inflation is the overall upward price movement of goods and services in an economy that causes the value of a currency to decline. 

Interest Rate Risk — Interest rate risk is the risk that fixed-income securities will decline in value because of changes in interest rates. A rise in interest rates typically causes a fall in values. Interest rate risk should be modest for shorter-term securities, moderate for intermediate-term securities and high for longer-term securities. Generally, an increase in the average maturity of a fund will make it more sensitive to interest rate risk. The interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Foreign Currency Risk — If a fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the U.S. dollar. This also includes the risk associated with higher transaction costs, delayed settlements, currency controls and adverse economic developments related to foreign investments.

Region Risk — The Funds, except the U.S. Treasury Fund, invest in equity and fixed-income securities of non-U.S. issuers. Because certain foreign markets are illiquid, market prices may not necessarily represent realizable value. Although the Funds maintain diversified investment portfolios, political or economic developments within a particular country or region may have an adverse effect on the ability of domiciled issuers to meet their obligations. These risks are exaggerated for securities of issuers tied economically to emerging and frontier market countries. Additionally, political or economic developments may have an adverse effect on the liquidity and volatility of portfolio securities and currency holdings.

India Region Risk — The securities markets in the India region (India, Bangladesh, Pakistan and Sri Lanka) are substantially smaller, less liquid and more volatile than the major securities markets in the United States and the securities industries in these countries are comparatively underdeveloped. Financial intermediaries may not perform as well as their counterparts in the United States or in other countries with more developed securities markets. In some cases, physical delivery of securities in small lots has been required in India and shortages of vault capacity and trained personnel have existed among qualified custodial Indian banks. A fund may be unable to sell securities when the registration process is incomplete and may experience delays in receipt of dividends. If trading volume is limited by operational difficulties, the ability of the fund to invest may be impaired and the fund’s ability to buy or sell Indian securities may be impaired if the fund’s ability to transact is denied, delayed, suspended or not renewed by local regulators. In recent years, exchange-listed companies in the information technology sector and related industries (such as software) have grown so as to represent a significant portion of the total capitalization of the Indian market. The value of these companies will generally fluctuate in response to technological and regulatory developments. In addition, governmental actions can have a significant effect on economic conditions in the India region, which could adversely affect the value and liquidity of investments. Although the governments of India, Bangladesh, Pakistan and Sri Lanka have recently begun to institute economic reform policies, there can be no assurance that they will continue to pursue such policies or,

 

 

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if they do, that such policies will succeed. The region is an uncertain tax environment and it is difficult to know and predict the potential implications of future tax developments. Religious, cultural and military disputes persist in India, and between India and Pakistan (as well as sectarian groups within each country). The longstanding border dispute with Pakistan remains unresolved. In recent years, terrorists believed to be based in Pakistan struck Mumbai (India’s financial capital), further damaging relations between the two countries. If the Indian government is unable to control the violence and disruption associated with these tensions (including both domestic and external sources of terrorism), the result may be military conflict, which could destabilize the economy of India. Both India and Pakistan have tested nuclear arms, and the threat of deployment of such weapons could hinder development of the Indian economy, and escalating tensions could impact the broader region, including China.

Liquidity Risk — The trading market for a particular security may be less liquid than it appears and market prices may not represent realizable value. This may be likely when a fund has a proportionately large investment in securities with small market capitalizations or securities in foreign markets that trade infrequently. Reduced liquidity will have an adverse impact on a fund’s ability to sell such securities quickly at the currently marked price if necessary to meet redemptions.

Shareholder Concentration Risk — A significant portion of the net assets of the Frontier Emerging Small Countries Fund is owned by a group of shareholders advised by a common investment advisor. The Emerging Markets Select Fund also has a significant portion of net assets concentrated in relatively few related accounts. In the event of significant redemption activity by these shareholders, the Funds could experience a loss when selling portfolio securities to meet such redemption requests. The Funds could be forced to sell portfolio securities at unfavorable prices in an effort to generate sufficient cash to pay redeeming shareholders. Fund expenses may increase and performance may be materially affected.

12. FAIR VALUE MEASUREMENTS AND INVESTMENTS

The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds use various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP established a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:

 

    Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.

 

    Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The inputs may include quoted prices for the identical investment on an inactive market, prices for similar investments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
    Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether a security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

Equity Securities (common and preferred stock) —  Securities are valued as of the close of the New York Stock Exchange (“NYSE”) (generally 4:00 p.m. Eastern Time) on the valuation date. Equity securities and listed warrants are valued using a commercial pricing service at the last quoted sales price taken from the primary market in which each security trades and, with respect to equity securities traded on the National Association of Securities Dealer Automated Quotation (“NASDAQ”) system, such securities are valued using the NASDAQ Official Closing Price (“NOCP”) or last sales price if no NOCP is available. If there are no sales on the primary exchange or market on a day, then the security shall be valued at the mean of the last bid and ask price on the primary exchange or market as provided by a pricing service. If the mean cannot be calculated or there is no trade activity on a day, then the security shall be valued at the previous trading day’s price as provided by a pricing service. In some instances, particularly on foreign exchanges, an official close or evaluated price may be used if the pricing service is unable to provide the last trade or most recent mean price. To the extent that these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Additionally, a fund’s investments are valued at fair value by the Pricing Committee if the Advisor determines that an event impacting the value of an investment occurred between the closing time of a security’s primary market or exchange (for example, a foreign exchange or market) and the time the fund’s share price is calculated. Significant events include, but are not limited to the following: significant fluctuations in domestic markets, foreign markets or foreign currencies; occurrences not directly tied to the securities markets such as natural disasters, armed conflicts or significant governmental actions; and major announcements affecting a single issuer or an entire market or market sector. In responding to a significant event, the Pricing Committee determines the fair value of affected securities by considering factors including, but not limited to: index options and futures traded subsequent to the close; American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) or other related receipts; currency spot or forward markets that trade after

 

 

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pricing of the foreign exchange; other derivative securities traded after the close such as Standard & Poor’s Depositary Receipts (“SPDRs”) and other exchange-traded funds (“ETFs”); and alternative market quotes on the affected securities. When applicable, the Funds use a systematic fair valuation model provided by an independent third party to assist in adjusting the valuation of foreign securities. When a Fund uses this fair value pricing method, the values assigned to the Fund’s foreign securities may not be the quoted or published prices of the investments on their primary markets or exchanges, and the securities are categorized in Level 2 of the fair value hierarchy. These valuation procedures apply equally to long or short equity positions in a fund.

Participation Notes — Investments are valued at the market price of the underlying security. Counterparty risk is regularly reviewed and considered for valuation. To the extent the inputs are observable and timely, the values would be categorized in Level 2 of the fair value hierarchy.

Corporate Debt Securities — Investments are valued at current market value by a pricing service, or by using the last sale or bid price based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Although most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as Level 3.

Short-Term Notes — Investments maturing in 60 days or less at the time of purchase, are generally valued at amortized cost, unless it is determined that the amortized cost method would not represent fair value, in which case the securities are marked-to-market. To the extent the inputs are observable and timely, the values would be categorized in Level 2 of the fair value hierarchy.

Asset-Backed Securities — Investments are priced using the closing bid as supplied by a pricing service based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications, new issue data, monthly payment information and collateral performance. Although most asset-backed securities are categorized in Level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as Level 3.

U.S. Government Issuers — Investments are priced using the closing bid as supplied by a pricing service based on

observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Although most U.S. government bonds are categorized in Level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as Level 3.

Derivative Instruments — Listed derivatives that are actively traded are valued based on quoted prices from the exchange and categorized in Level 1 of the fair value hierarchy. Exchange-traded options are valued at the last sale price in the market where they are principally traded. If there are no sales on the primary exchange or market on a given day, then the option is valued at the mean of the last bid price and ask price on the primary exchange or market as provided by a pricing service. Forward foreign currency contracts are valued at the market rate provided by the pricing service and categorized as Level 2.

Restricted Securities — If market quotations are not readily available for the Funds’ investments in securities such as restricted securities, private placements, securities for which trading has been halted or other illiquid securities, these investments are valued at fair value in accordance with Board-approved Pricing Policies and Procedures by the Pricing Committee with oversight by the Board of Trustees. Fair value is defined as the price that would be received upon the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under current market conditions. For each applicable investment that is fair valued, the Pricing Committee considers, to the extent applicable, various factors including, but not limited to, the financial condition of the company or limited partnership, operating results, prices paid in follow-on rounds, comparable companies in the public market, the nature and duration of the restrictions for holding the securities, a stated net asset value (NAV) for the partnership, if applicable, and other relevant factors. Depending on the relative significance of valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on days the NYSE is closed, which could result in differences between the value of a fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the fund for financial reporting purposes.

 

 

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The following is a summary of the fair valuations according to the inputs used as of March 31, 2020 in valuing the Funds’ assets and liabilities:

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

Core Growth Fund

                      

Assets

                      

Common Stocks

                      
   Diversified Banks      $      $ 16,017,559      $      $ 16,017,559
   Other        1,852,888,943                      1,852,888,943

Short-Term Investments

                 16,332,508               16,332,508
       

 

 

 
        $ 1,852,888,943      $ 32,350,067      $      $ 1,885,239,010
       

 

 

 

Emerging India Fund

                      

Assets

                      

Common Stocks

                      
   Apparel, Accessories & Luxury Goods      $      $ 6,425,733      $      $ 6,425,733
   Auto Parts & Equipment               2,703,503               2,703,503
   Brewers               5,447,869               5,447,869
   Commodity Chemicals        2,525,664        10,045,473               12,571,137
   Consumer Finance               15,452,700               15,452,700
   Department Stores               5,157,155               5,157,155
   Diversified Banks               20,720,510               20,720,510
   Diversified Chemicals               11,811,636               11,811,636
   Financial Exchanges & Data               5,404,432               5,404,432
   Health Care Services               12,325,421               12,325,421
   Industrial Conglomerates               5,953,973               5,953,973
   Industrial Machinery               4,206,075               4,206,075
   Interactive Media & Services               8,529,606               8,529,606
   IT Consulting & Other Services        9,537,853        6,743,214               16,281,067
   Life & Health Insurance               4,812,687               4,812,687
   Life Sciences Tools & Services               13,016,084               13,016,084
   Packaged Foods & Meats               10,041,346               10,041,346
   Personal Products               2,959,115               2,959,115
   Pharmaceuticals               1,358,229               1,358,229
   Property & Casualty Insurance               11,800,329               11,800,329
   Regional Banks               9,739,513               9,739,513
   Specialty Chemicals               5,124,508               5,124,508
   Thrifts & Mortgage Finance               11,256,898               11,256,898
   Other        4,486,010                      4,486,010
       

 

 

 
        $ 16,549,527      $ 191,036,009      $      $ 207,585,536
       

 

 

 

 

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Notes to Financial Statements (continued)

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

Emerging Markets Select Fund

                      

Assets

                      

Common Stocks

                      
   Apparel, Accessories & Luxury Goods      $      $ 635,227      $      $ 635,227
   Biotechnology               630,788               630,788
   Consumer Finance               1,635,227               1,635,227
   Diversified Banks        593,976        2,327,077               2,921,053
   Diversified Chemicals               679,144               679,144
   Electrical Components & Equipment        902,554        1,541,716               2,444,270
   Health Care Equipment               1,159,472               1,159,472
   Industrial Machinery               882,636               882,636
   Interactive Media & Services               1,207,269               1,207,269
   IT Consulting & Other Services               1,014,422               1,014,422
   Life & Health Insurance               881,495               881,495
   Life Sciences Tools & Services               887,295               887,295
   Packaged Foods & Meats               2,153,262               2,153,262
   Personal Products               730,958               730,958
   Pharmaceuticals               766,329               766,329
   Property & Casualty Insurance        55,260        1,310,468               1,365,728
   Regional Banks               335,039               335,039
   Semiconductors               3,696,971               3,696,971
   Specialized Finance               352,396               352,396
   Specialty Chemicals               1,176,745               1,176,745
   Thrifts & Mortgage Finance               325,256               325,256
   Other        9,120,670                      9,120,670

Preferred Stocks

          706,043                      706,043
       

 

 

 
        $ 11,378,503      $ 24,329,192      $  —      $ 35,707,695
       

 

 

 

Emerging Markets Small Cap Fund

                      

Assets

                      

Common Stocks

                      
   Biotechnology      $      $ 4,426,809      $  —      $ 4,426,809
   Commodity Chemicals               12,029,388               12,029,388
   Consumer Finance        3,658,188        13,122,379               16,780,567
   Department Stores               3,312,728               3,312,728
   Distillers & Vintners               3,664,302               3,664,302
   Diversified Banks        4,717,682        2,905,439               7,623,121
   Diversified Chemicals               5,780,875               5,780,875
   Drug Retail        10,959,249        6,942,230               17,901,479
   Electrical Components & Equipment               15,843,506               15,843,506
   Electronic Equipment & Instruments               4,470,221               4,470,221
   Health Care Equipment               7,232,062               7,232,062
   Health Care Services               9,223,042               9,223,042
   Highways & Railtracks               2,746,002               2,746,002
   Home Improvement Retail               3,314,948               3,314,948
   Industrial Conglomerates               5,553,369               5,553,369
   Industrial Machinery               3,916,097               3,916,097
   Insurance Brokers               3,633,836               3,633,836
   Interactive Media & Services               6,835,095               6,835,095
   IT Consulting & Other Services        4,795,967        5,789,535               10,585,502
   Life & Health Insurance               834,023               834,023
   Packaged Foods & Meats               12,865,659               12,865,659
   Pharmaceuticals                      16,790        16,790
   Property & Casualty Insurance        4,206,735        9,180,861               13,387,596
   Regional Banks        2,057,936        9,694,585               11,752,521
   Semiconductors               37,620,927               37,620,927
   Systems Software               5,823,707               5,823,707
   Thrifts & Mortgage Finance               3,156,990               3,156,990
   Other        42,384,290                      42,384,290

Preferred Stocks

                 5,579,388               5,579,388

Short-Term Investments

                 1,507,568               1,507,568
       

 

 

 
        $ 72,780,047      $ 207,005,571      $ 16,790      $ 279,802,408
       

 

 

 

 

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Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

Frontier Emerging Small Countries Fund

                      

Assets

                      

Common Stocks

                      
   Asset Management & Custody Banks      $      $ 888,559      $      $ 888,559
   Brewers               413,628               413,628
   Consumer Finance        1,053,053        1,684,108               2,737,161
   Data Processing & Outsourced Services               645,116               645,116
   Diversified Banks        1,814,602        3,874,993               5,689,595
   Drug Retail        2,240,422        1,112,909               3,353,331
   Food Retail               2,990,080               2,990,080
   Health Care Distributors               691,659               691,659
   Insurance Brokers               1,187,959               1,187,959
   Internet & Direct Marketing Retail        2,618,789        2,341,972               4,960,761
   Life & Health Insurance               517,183               517,183
   Regional Banks               1,634,769               1,634,769
   Technology Distributors               1,488,412               1,488,412
   Wireless Telecommunication Services               1,962,610               1,962,610
   Other        8,967,370                      8,967,370

Preferred Stocks

          1,378,274                      1,378,274

Short-Term Investments

                 621,965               621,965
       

 

 

 
        $ 18,072,510      $ 22,055,922      $      $ 40,128,432
       

 

 

 

Global Opportunities Fund

                      

Assets

                      

Common Stocks

                      
   Application Software      $      $ 2,504,353      $      $ 2,504,353
   Biotechnology        1,081,289        1,459,353               2,540,642
   Consumer Finance        512,394        1,998,469               2,510,863
   Data Processing & Outsourced Services        2,010,820        798,973               2,809,793
   Diversified Chemicals               1,315,263               1,315,263
   Diversified Real Estate Activities               977,619               977,619
   Drug Retail               1,458,375               1,458,375
   Electrical Components & Equipment               1,980,113               1,980,113
   Health Care Equipment        770,737        1,942,299               2,713,036
   Health Care Services               1,092,810               1,092,810
   Health Care Supplies               1,130,255               1,130,255
   Human Resource & Employment Services               1,396,396               1,396,396
   Industrial Conglomerates               1,058,095               1,058,095
   Industrial Machinery        5,694,809        1,347,607               7,042,416
   Interactive Media & Services               576,172               576,172
   Internet & Direct Marketing Retail        2,832,115        932,575               3,764,690
   Life & Health Insurance               645,829               645,829
   Other Diversified Financial Services               591,601               591,601
   Packaged Foods & Meats        1,711,716        2,473,715               4,185,431
   Property & Casualty Insurance               1,579,096               1,579,096
   Regional Banks        1,633,681        2,615,390               4,249,071
   Research & Consulting Services               1,653,492               1,653,492
   Restaurants               1,119,959               1,119,959
   Semiconductors        2,562,808        5,246,831               7,809,639
   Soft Drinks               993,211               993,211
   Technology Distributors               708,432               708,432
   Thrifts & Mortgage Finance               962,805               962,805
   Trading Companies & Distributors               2,719,896               2,719,896
   Other        33,789,858                      33,789,858

Short-Term Investments

                 1,146,292               1,146,292
       

 

 

 
        $ 52,600,227      $ 44,425,276      $      $ 97,025,503
       

 

 

 

 

115


Table of Contents
WASATCH FUNDS  

 

 

Notes to Financial Statements (continued)

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

Global Select Fund

                      

Assets

                      

Common Stocks

                      
   Application Software      $ 864,845      $ 423,916      $      $ 1,288,761
   Building Products               411,607               411,607
   Consumer Finance               304,135               304,135
   Data Processing & Outsourced Services        830,657        307,124               1,137,781
   Drug Retail               435,097               435,097
   Health Care Equipment               666,681               666,681
   Health Care Supplies               754,457               754,457
   Industrial Machinery               203,331               203,331
   Packaged Foods & Meats               293,004               293,004
   Specialty Chemicals               250,600               250,600
   Other        3,760,253                      3,760,253
       

 

 

 
        $ 5,455,755      $ 4,049,952      $      $ 9,505,707
       

 

 

 

Global Value Fund

                      

Assets

                      

Common Stocks

                      
   Airlines      $      $ 918,872      $      $ 918,872
   Construction & Engineering               582,741               582,741
   Diversified Banks        6,295,274        2,373,567               8,668,841
   Diversified Metals & Mining               1,777,848               1,777,848
   Electronic Manufacturing Services               1,611,586               1,611,586
   Food Retail               6,098,073               6,098,073
   Industrial Conglomerates               1,732,447               1,732,447
   Integrated Oil & Gas        3,351,524        3,690,850               7,042,374
   Multi-Line Insurance               2,709,110               2,709,110
   Pharmaceuticals        8,736,540        2,969,956               11,706,496
   Reinsurance               4,121,939               4,121,939
   Technology Hardware, Storage & Peripherals               4,082,556               4,082,556
   Tobacco               3,061,362               3,061,362
   Wireless Telecommunication Services               5,995,424               5,995,424
   Other        38,582,120                      38,582,120

Short-Term Investments

                 1,719,483               1,719,483
       

 

 

 
        $ 56,965,458      $ 43,445,814      $      $ 100,411,272
       

 

 

 

 

116


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

International Growth Fund

                      

Assets

                      

Common Stocks

                      
   Application Software      $ 32,612,510      $ 66,364,354      $      $ 98,976,864
   Asset Management & Custody Banks               22,014,423               22,014,423
   Biotechnology               11,657,136               11,657,136
   Brewers               8,950,850               8,950,850
   Commodity Chemicals               8,169,809               8,169,809
   Construction Machinery & Heavy Trucks               7,693,357               7,693,357
   Data Processing & Outsourced Services               11,669,215               11,669,215
   Department Stores               1,919,759               1,919,759
   Diversified Real Estate Activities               18,684,934               18,684,934
   Diversified Support Services               25,796,314               25,796,314
   Drug Retail        5,933,295        61,558,768               67,492,063
   Electrical Components & Equipment               14,250,925               14,250,925
  

Electronic Equipment & Instruments

              19,329,309               19,329,309
   Financial Exchanges & Data               9,277,992               9,277,992
   General Merchandise Stores               11,922,825               11,922,825
   Health Care Equipment               50,844,565               50,844,565
   Health Care Supplies               24,389,367               24,389,367
   Health Care Technology               1,667,531               1,667,531
   Highways & Railtracks               1,462,947               1,462,947
   Home Improvement Retail               247,774               247,774
   Household Appliances               12,512,330               12,512,330
   Human Resource & Employment Services        8,683,370        26,351,378               35,034,748
   Industrial Machinery               21,648,558               21,648,558
   Interactive Media & Services               30,745,398               30,745,398
   Internet & Direct Marketing Retail               18,799,699        1,989,141        20,788,840
   Investment Banking & Brokerage               10,120,410               10,120,410
   IT Consulting & Other Services        7,225,029        27,715,417               34,940,446
   Life Sciences Tools & Services               13,979,374               13,979,374
   Movies & Entertainment               13,139,928               13,139,928
   Other Diversified Financial Services               13,349,968               13,349,968
   Packaged Foods & Meats               29,204,693               29,204,693
   Pharmaceuticals               6,015,290               6,015,290
   Property & Casualty Insurance               12,234,667               12,234,667
   Regional Banks        12,015,910        10,171,205               22,187,115
   Research & Consulting Services               21,274,236               21,274,236
   Restaurants               11,982,543               11,982,543
   Semiconductor Equipment               9,111,094               9,111,094
   Semiconductors               34,685,133               34,685,133
   Soft Drinks               11,490,957               11,490,957
   Specialty Chemicals               13,363,715               13,363,715
   Systems Software               6,948,801               6,948,801
   Technology Distributors               11,570,987               11,570,987
   Textiles               10,630,501               10,630,501
   Trading Companies & Distributors               51,046,744               51,046,744
   Other        9,262,226                      9,262,226

Short-Term Investments

                 15,256,660               15,256,660
       

 

 

 
        $ 75,732,340      $ 821,221,840      $ 1,989,141      $ 898,943,321
       

 

 

 

 

117


Table of Contents
WASATCH FUNDS  

 

 

Notes to Financial Statements (continued)

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

International Opportunities Fund

                      

Assets

                      

Common Stocks

                      
   Advertising      $ 7,465,540      $ 5,662,122      $      $ 13,127,662
   Aerospace & Defense               9,514,580               9,514,580
   Alternative Carriers               6,263,617               6,263,617
   Application Software        10,931,123        62,200,365               73,131,488
   Auto Parts & Equipment               1,813,627               1,813,627
   Brewers               6,543,243               6,543,243
   Building Products               959,927               959,927
   Commercial Printing               2,745,597               2,745,597
   Commodity Chemicals        4,609,376        8,572,187               13,181,563
   Consumer Finance        1,752,286        5,777,497               7,529,783
   Department Stores               5,620,307               5,620,307
   Diversified Support Services               23,503,007               23,503,007
   Drug Retail               8,802,776               8,802,776
   Education Services               1,575,410               1,575,410
   Electrical Components & Equipment               8,629,744               8,629,744
   Electronic Components               2,507,635               2,507,635
   Electronic Equipment & Instruments               9,500,318               9,500,318
   Food Retail               17,400,165               17,400,165
   Health Care Equipment        3,093,678        25,174,995               28,268,673
   Health Care Services               14,847,480               14,847,480
   Health Care Supplies               7,366,614               7,366,614
   Health Care Technology        6,550,249        11,446,073               17,996,322
   Home Improvement Retail               5,902,091               5,902,091
   Human Resource & Employment Services               7,644,557               7,644,557
   Insurance Brokers               4,572,201               4,572,201
   Interactive Media & Services               8,252,091               8,252,091
   Internet & Direct Marketing Retail               3,572,913        1,275,383        4,848,296
   Internet Services & Infrastructure               5,193,295               5,193,295
   Investment Banking & Brokerage               2,417,129               2,417,129
   IT Consulting & Other Services               11,687,696               11,687,696
   Life Sciences Tools & Services               4,159,242               4,159,242
   Other Diversified Financial Services               7,591,737               7,591,737
   Packaged Foods & Meats               9,380,121               9,380,121
   Personal Products               4,220,073               4,220,073
   Publishing               4,734,705               4,734,705
   Research & Consulting Services               13,635,376               13,635,376
   Restaurants               1,894,557        7,826        1,902,383
   Semiconductor Equipment               4,554,193               4,554,193
   Semiconductors               16,174,962               16,174,962
   Specialized Finance               5,992,234               5,992,234
   Technology Hardware, Storage & Peripherals               2,129,954               2,129,954
   Thrifts & Mortgage Finance        4,478,401        6,425,874               10,904,275
   Other        15,462,735                      15,462,735

Short-Term Investments

                 14,461,322               14,461,322
       

 

 

 
        $ 54,343,388      $ 391,023,609      $ 1,283,209      $ 446,650,206
       

 

 

 

 

118


Table of Contents
  MARCH 31, 2020 (UNAUDITED)

 

 

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

International Select Fund

                      

Assets

                      

Common Stocks

                      
   Apparel, Accessories & Luxury Goods      $      $ 96,618      $      $ 96,618
   Application Software               285,564               285,564
   Asset Management & Custody Banks               84,898               84,898
   Building Products               133,108               133,108
   Data Processing & Outsourced Services               174,565               174,565
   Drug Retail               158,217               158,217
   Electronic Equipment & Instruments               123,889               123,889
   Health Care Equipment               390,809               390,809
   Health Care Supplies               271,204               271,204
   Health Care Technology               91,441               91,441
   Industrial Machinery               151,386               151,386
   Interactive Media & Services               49,889               49,889
   Internet & Direct Marketing Retail               65,477               65,477
   IT Consulting & Other Services               65,145               65,145
   Leisure Products               57,045               57,045
   Life Sciences Tools & Services        92,753        124,921               217,674
   Packaged Foods & Meats               78,244               78,244
   Research & Consulting Services               92,720               92,720
   Soft Drinks               51,987               51,987
   Specialty Chemicals               112,239               112,239
   Other        46,810                      46,810
       

 

 

 
        $ 139,563      $ 2,659,366      $      $ 2,798,929
       

 

 

 

Micro Cap Fund

                      

Assets

                      

Common Stocks

        $ 446,009,447      $      $      $ 446,009,447

Warrants

                        640,581        640,581

Short-Term Investments

                 3,323,503               3,323,503
       

 

 

 
        $ 446,009,447      $ 3,323,503      $ 640,581      $ 449,973,531
       

 

 

 

Micro Cap Value Fund

                      

Assets

                      

Common Stocks

                      
   Alternative Carriers      $ 4,152,197      $ 1,996,344      $      $ 6,148,541
   Application Software        11,221,190        7,925,342               19,146,532
   Asset Management & Custody Banks        2,212,400        1,888,837               4,101,237
   Diversified Banks               1,226,976               1,226,976
   Diversified Support Services               2,061,525               2,061,525
   Education Services               1,274,681               1,274,681
   Health Care Distributors        2,996,670        2,103,590               5,100,260
   Health Care Technology        4,885,140        2,601,486               7,486,626
   Industrial Machinery        6,958,860        2,338,446               9,297,306
   Investment Banking & Brokerage               2,548,634               2,548,634
   IT Consulting & Other Services        6,052,853        1,672,549               7,725,402
   Personal Products        983,625        1,754,389               2,738,014
   Research & Consulting Services        2,256,611        2,942,057               5,198,668
   Systems Software               936,055               936,055
   Technology Hardware, Storage & Peripherals        885,600        1,810,504               2,696,104
   Thrifts & Mortgage Finance        1,124,060        2,539,042               3,663,102
   Other        85,621,806                      85,621,806

Convertible Preferred Stocks

                        1,998,434        1,998,434

Limited Liability Company Membership Interest

                        20,211        20,211

Warrants

                              

Short-Term Investments

                 5,798,515               5,798,515
       

 

 

      

 

 

      

 

 

      

 

 

 
        $ 129,351,012      $  43,418,972      $ 2,018,645      $ 174,788,629
       

 

 

 

 

119


Table of Contents
WASATCH FUNDS  

 

 

Notes to Financial Statements (continued)

 

Fund    Category    Quoted Prices
in Active
Markets
for Identical
Investments
(Level 1)
   Significant Other
Observable
Inputs
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
   Value at
3/31/2020

Small Cap Growth Fund

                      

Assets

                        

Common Stocks

        $ 1,501,970,778      $      $      $ 1,501,970,778

Preferred Stocks

                        8,873,976        8,873,976

Limited Partnership Interest

                        1,356,174        1,356,174

Short-Term Investments

                 19,057,062               19,057,062
       

 

 

 
        $ 1,501,970,778      $ 19,057,062      $ 10,230,150      $ 1,531,257,990
       

 

 

 

Small Cap Value Fund

                      

Assets

                      

Common Stocks

                      
   Diversified Banks      $      $ 3,591,264      $      $ 3,591,264
   Other        581,164,799                      581,164,799

Short-Term Investments

                 2,554,797               2,554,797
       

 

 

 
        $ 581,164,799      $ 6,146,061      $      $ 587,310,860
       

 

 

 

Ultra Growth Fund

                      

Assets

                      

Common Stocks

                      
   Diversified Banks      $      $ 4,241,877      $      $ 4,241,877
   Other        723,342,325                      723,342,325

Limited Partnership Interest

                        1,274,822        1,274,822

Preferred Stocks

                        128,601        128,601

Warrants

                        796,200        796,200

Short-Term Investments

                 24,090,965               24,090,965
       

 

 

 
        $ 723,342,325      $ 28,332,842      $ 2,199,623      $ 753,874,790
       

 

 

 

U.S. Treasury Fund

                      

Assets

                      

U.S. Government Obligations

        $      $ 408,446,146      $      $ 408,446,146

Short-Term Investments

                 7,018,524               7,018,524
       

 

 

 
        $      $ 415,464,670      $      $ 415,464,670
       

 

 

 

If the securities of an Asset Class are all the same level, the asset class is shown in total. If the securities of an Asset Class cross levels, the level with the smallest number of categories and with multiple levels within a category is displayed by category. The remaining categories that do not cross levels are combined into the “Other” category.

The valuation techniques used by the Funds to measure fair value for the six months ended March 31, 2020 maximized the use of observable inputs and minimized the use of unobservable inputs.

The Funds’ policy is to recognize transfers between levels at the end of the reporting period.

There was a transfer of $3,007,812 in the Micro Cap Fund from Level 3 to Level 1 due to a change in pricing strategy on a private company that came public. This transfer amount represents the beginning of the period value for IM Cannabis Corp., which transferred to Level 1 during the period in order to properly represent the activity on the Level 3 Rollforward presented below.

There were transfers of $14,841,216 in the Micro Cap Fund and $16,980,008 in the Small Cap Growth Fund and $3,820,500 in the Ultra Growth Fund from Level 3 to Level 1 due to a change in pricing strategy on a private company that came public. This transfer amount represents the beginning of the period value for Medallia, Inc., which transferred to Level 1 during the period in order to properly represent the activity on the Level 3 Rollforward presented below.

 

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The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) for the Funds during the six months ended March 31, 2020:

 

Fund  

Market

Value
Beginning
Balance
9/30/2019

  Purchases
at Cost
  Sales
(Proceeds)
  Accrued
Discounts
(Premiums)
  Realized
Gain/
(Loss)
  Change in
Unrealized
Appreciation
(Depreciation)
  Transfers
in at
Market
Value
  Transfers
out at
Market
Value
  Market
Value
Ending
Balance
3/31/2020
  Net Change
in Unrealized
Appreciation
(Depreciation)
on Investments
Held at
3/31/2020

Emerging Markets Small

Cap Fund

                                       

Common Stocks

    $ 16,608     $     $     $     $     $ 182     $     $     $ 16,790     $ 182
   

 

 

 
    $ 16,608     $     $     $     $     $ 182     $     $     $ 16,790     $ 182
   

 

 

 

International Growth Fund

                                       

Common Stocks

    $     $     $     $     $     $     $ 1,989,141     $     $ 1,989,141     $
   

 

 

 
    $     $     $     $     $     $     $ 1,989,141     $     $ 1,989,141     $
   

 

 

 

International Opportunities
Fund

                                       

Common Stocks

    $ 7,747     $     $     $     $     $ 79     $ 1,275,383     $     $ 1,283,209     $ 79
   

 

 

 
    $ 7,747     $     $     $     $     $ 79     $ 1,275,383     $     $ 1,283,209     $ 79
   

 

 

 

Micro Cap Fund

                                       

Common Stocks

    $ 17,849,029     $     $     $     $     $     $     $ 17,849,029     $     $

Warrants

            64,058                         576,523                   64,0581       576,523
   

 

 

 
    $ 17,849,029     $ 64,058     $     $     $     $ 576,523     $     $ 17,849,029     $ 64,0581     $ 576,523
   

 

 

 

Micro Cap Value Fund

                                       

Common Stocks

    $ 20,211     $     $     $     $     $     $     $     $ 20,211     $

Preferred Stocks

      1,956,197       29,534                         12,703                   1,998,434       12,703

Warrants

      28,900             79,198             (195,484 )       245,782                         (2,500 )

Rights

      391,628                               (391,628 )                        
   

 

 

 
    $ 2,396,936     $ 29,534     $ 79,198     $     $ (195,484 )     $ (133,143 )     $     $     $ 2,018,645     $ 10,203
   

 

 

 

Small Cap Growth Fund

                                       

Common Stocks

    $ 16,980,008     $     $     $     $     $     $     $ 16,980,008     $     $

Preferred Stocks

      11,141,900                               (2,267,924 )                   8,873,976       (2,267,924 )

Limited Partnership Interest

      2,552,478                               (1,196,304 )                   1,356,174       (1,196,304 )

Seller’s Note

      1,728,000             1,728,000       363,859             (363,859 )                        
   

 

 

 
    $ 32,402,386     $     $ 1,728,000     $ 363,859     $     $ (3,828,087 )     $     $ 16,980,008     $ 10,230,150     $ (3,464,228 )
   

 

 

 

Ultra Growth Fund

                                       

Common Stocks

    $  3,820,500     $     $     $     $     $     $     $ 3,820,500     $     $

Preferred Stocks

      377,919                               (249,318 )                   128,601       (249,318 )

Limited Partnership Interest

      2,391,055                               (1,116,233 )                   1,274,822       (1,116,233 )

Warrants

            79,620                         716,580                   796,200       716,580

Seller’s Note

      132,000             132,000       28,207             (28,207 )                        
   

 

 

 
    $ 6,721,474     $ 79,620     $ 132,000     $ 28,207     $     $ (677,178 )     $     $ 3,820,500     $ 2,199,623     $ (648,971 )
   

 

 

 

QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS

 

Fund   Description  

Fair Value

at 3/31/2020

    Valuation Technique   Unobservable Input   Range
(Average)
 

International Growth Fund

 

Common Stock: Internet & Direct Marketing Retail

  $ 1,989,141    

Discount to last trade

 

Discount to last trade

    50%  

International Opportunities Fund

 

Common Stock: Internet & Direct Marketing Retail

  $ 1,275,383    

Discount to last trade

 

Discount to last trade

    50%  

Micro Cap Fund

 

Warrants: Biotechnology

  $ 640,581    

Black Scholes

 

Black Scholes

    100%  

Micro Cap Value Fund

 

Convertible Preferred Stocks: Oil & Gas Refining & Marketing

  $ 1,998,434    

Bond model with
call option

 

Bond model with
call option

    100%  

Small Cap Growth Fund

 

Direct Venture Capital Investments: Biotechnology

  $ 514,401    

Market comparable
companies

 

EV/R* multiple
Discount for lack
of marketability

   
0.7 - 22.3 (6.4)
20%
 
 

 

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Notes to Financial Statements (continued)

 

Fund   Description  

Fair Value

at 3/31/2020

    Valuation Technique   Unobservable Input   Range
(Average)
 

Small Cap Growth Fund

 

Direct Venture Capital Investments: Systems Software

  $ 8,359,575    

Market comparable
companies

 

EV/R* multiple
Discount for lack
of marketability

   
1.3 - 19.1 (8.1)
20%
 
 

Small Cap Growth Fund

 

Limited Partnership Interest: Asset Management & Custody Banks

  $ 1,356,174    

Discount to NAV

 

Discount to NAV

    10%  

Ultra Growth Fund

 

Direct Venture Capital Investments: Biotechnology

  $ 128,601    

Market comparable
companies

 

EV/R* multiple
Discount for lack
of marketability

   
0.7 - 22.3 (6.4)
20%
 
 

Ultra Growth Fund

 

Warrants: Biotechnology

  $ 796,200    

Black Scholes

 

Black Scholes

    100%  

Ultra Growth Fund

 

Limited Partnership Interest: Asset Management & Custody Banks

  $ 1,274,822    

Discount to NAV

 

Discount to NAV

    10%  

 

*

Enterprise-Value-To-Revenue Multiple (“EV/R”) is a measure of the value of a stock that compares a company’s enterprise value to its revenue.

Changes in EV/R multiples may change the fair value of an investment. Generally, a decrease in this multiple will result in a decrease in the fair value of an investment.

The Funds’ other Level 3 investments have been valued using observable inputs, unadjusted third-party transactions and quotations or unadjusted historical third party information. No unobservable inputs internally developed by the Funds have been applied to these investments, thus they have been excluded from the above table.

Other information is available in the Funds’ most recent Prospectus and Report to Shareholders. This information is available on the Funds’ website at wasatchglobal.com and on the Securities and Exchange Commission’s website at www.sec.gov.

13. OFFSETTING

Each Fund is party to various netting arrangements. The Financial Accounting Standards Board (“FASB”) requires disclosure about certain netting arrangements and similar agreements to enable users of a Fund’s financial statements to evaluate the effect or potential effect of netting arrangements on the Fund’s financial position. The scope of the disclosure is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions.

The following tables present information about financial instruments that were subject to enforceable netting arrangements as of March 31, 2020:

REPURCHASE AGREEMENTS

 

     Gross Amounts Not Offset in the Statements of Assets and Liabilities
Fund   Counterparty    Gross Asset Amounts
Presented in Statements
of Assets and Liabilities
   Financial
Instrument
   Collateral
Received1
  Net Amount
(not less
than 0)

Core Growth Fund

  State Street Bank and Trust Co.      $ 16,332,508      $   —      $ (16,332,508 )     $   —

Emerging India Fund

  State Street Bank and Trust Co.                           

Emerging Markets Select Fund

  State Street Bank and Trust Co.                           

Emerging Markets Small Cap Fund

  State Street Bank and Trust Co.        1,507,568               (1,507,568 )      

Frontier Emerging Small Countries Fund

  State Street Bank and Trust Co.        621,965               (621,965 )      

Global Opportunities Fund

  State Street Bank and Trust Co.        1,146,292               (1,146,292 )      

Global Select Fund

  State Street Bank and Trust Co.                           

Global Value Fund

  State Street Bank and Trust Co.        1,719,483               (1,719,483 )      

International Growth Fund

  State Street Bank and Trust Co.        15,256,660               (15,256,660 )      

International Opportunities Fund

  State Street Bank and Trust Co.        14,461,322               (14,461,322 )      

International Select Fund

  State Street Bank and Trust Co.                           

Micro Cap Fund

  State Street Bank and Trust Co.        3,323,503               (3,323,503 )      

Micro Cap Value Fund

  State Street Bank and Trust Co.        5,798,515               (5,798,515 )      

Small Cap Growth Fund

  State Street Bank and Trust Co.        19,057,062               (19,057,062 )      

Small Cap Value Fund

  State Street Bank and Trust Co.        2,554,797               (2,554,797 )      

Ultra Growth Fund

  State Street Bank and Trust Co.        24,090,965               (24,090,965 )      

Wasatch-Hoisington U.S. Treasury Fund

  State Street Bank and Trust Co.        7,018,524               (7,018,524 )      

 

1 

Repurchase agreements are classified as short-term investments in the Statements of Assets and Liabilities. The market value of the collateral received is greater than the amounts indicated in the table. For further information, see Note 3 — Securities and Other Investments “Repurchase Agreements” and the Schedules of Investments.

14. SUBSEQUENT EVENTS

Management has evaluated the possibility of subsequent events and has determined that there are no additional events that would require adjustment to or additional disclosure in the Funds’ financial statements.

 

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Supplemental Information

 

MANAGEMENT OF THE TRUST

Management Information. The business affairs of Wasatch Funds are overseen by its Board of Trustees. The Board consists of five Independent Trustees. Each of the Independent Trustees except Mr. Robinson were elected by shareholders to serve until their successors are qualified, appointed or elected in accordance with the Trust’s Declaration of Trust and By-Laws.

The Trustees and executive officers of Wasatch Funds and their principal occupations for at least the last five years are set forth below. The Advisor retains proprietary rights to the Trust name. The Funds’ Statement of Additional Information includes additional information about the Trustees and is available, without charge, online at wasatchglobal.com or upon request by calling Wasatch Funds at 800.551.1700.

 

Name, Address
and Age
  Position(s)
Held with
Wasatch Funds
  Term of Office1
and Length of
Time Served
  Principal Occupation(s)
during Past 5 Years
  Number of
Portfolios
in Fund
Complex
Overseen
by Trustee
    Other Directorships
Held by Trustees
during Past 5 Years2

Independent Trustees

         

Miriam M. Allison

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 72

  Trustee and Chair of the Board   Indefinite
Served as
Trustee since 2010
  Rancher since 2004. Chairman of UMB Fund Services, Inc. from 2001 to 2005.     17     Director, Northwestern Mutual Series Fund, Inc. (27 portfolios) since 2006.

James U. Jensen, J.D., MBA

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 75

  Trustee and former Chair of the Board   Indefinite
Served as
Chair of the Board from 2004 to 2019 and Trustee since 1986
  Chief Executive Officer of Clearwater Law & Governance Group (an operating law firm board governance consulting company) April 2008 to present; Vice President, Corporate Development, Legal Affairs and General Counsel, and Secretary, NPS Pharmaceuticals, Inc. from 1991 to 2004.     17     Director and Board Chairman of Agricon Global Corp. (formerly known as Bayhill Capital Corp. (telephone communications) from December 2007 to February 2014. Trustee, Northern Lights Fund Trust III (38 portfolios) since 2012.

Heikki Rinne, MBA, Ph.D.

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 68

  Trustee and Chair of the Governance and Nominating Committee   Indefinite
Served as
Trustee since October 2012
  Chief Executive Officer of the Halton Group Ltd. (an indoor environmental control manufacturing and technology company) from 2002 to 2016. A Founder and Principal Owner of Sitoumus LLC (a training and consulting firm focusing on empowering organizational and individual engagement as well as general consulting) from January 2017 to present.     17     Director, Halton Group Ltd 2016-2019.

Kristen M. Fletcher

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 66

  Trustee and Chair of the Audit Committee   Indefinite
Served as
Trustee since October 2014
  Director, Youth Sports Alliance since 2015. Trustee, Woodlands Commercial Bank (a/k/a Lehman Brothers Commercial Bank) from 2009 to 2012. Chairman and CEO, ABN AMRO, Inc. and U.S. Country Representative, ABN AMRO Bank, NV from 2002 to 2004.     17     Director, Youth Sports Alliance since 2015,. Trustee, Woodlands Commercial Bank (a/k/a Lehman Brothers Commercial Bank) from 2009 to 2012. Director Emeritus, Utah Symphony/Utah Opera since September 2017. Director, Utah Symphony/Utah Opera from 2005 to September 2017.

Mark Robinson3

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 61

  Trustee   Indefinite
Served as
Trustee since 2020
  Chief Financial Officer of Truckstop.com LLC from 2016 to 2019. Chief Financial Officer of SABA Software, Inc. from 2013 to 2015.     17     Vita Vis Nutrition, Inc., Chairman from 2014 to 2016

 

 

1 

A Trustee may serve until his/her death, resignation, removal or retirement. Each Independent Trustee shall retire as Trustee at the end of the calendar year in which he/she attains the age of 75 years. The Board of Trustees reserves the right to permit continued service after the mandatory retirement age for any individual Trustee in its sole discretion. The Board has approved a one-year waiver from the mandatory retirement age for Mr. Jensen.

 

2 

Directorships are those held by a Trustee in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of the Securities Exchange Act or any company registered as an investment company under the 1940 Act.

 

3 

Effective April 1, 2020, Mr. Robinson was appointed a Trustee of the Trust.

 

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Supplemental Information (continued)

 

Name, Address
and Age
  Position(s)
Held with
Trust
   Term of Office and
Length of Time Served
     Principal Occupation(s)
during Past 5 Years

Officers

         

Eric S. Bergeson

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 53

  President   

Indefinite

Served as President

since May 2018

    

President for Wasatch Funds since May 2018.

President of the Advisor since January 2017.

Vice President of Institutional Sales for the Advisor since June 1998.

Russell L. Biles

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 52

  Chief Compliance Officer, Vice President and Secretary   

Indefinite

Served as Chief Compliance

Officer and Vice President

since February 2007

and Secretary since November 2008

    

Chief Compliance Officer and Vice President for Wasatch Funds since February 2007.

Secretary for Wasatch Funds since November 2008.

Counsel for the Advisor since October 2006.

Michael K. Yeates

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 38

  Treasurer   

Indefinite

Served as Treasurer

since May 2018

    

Treasurer for Wasatch Funds since May 2018.

Chief Financial Officer of the Advisor since September 2007.

David Corbett

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 47

  Assistant Vice President   

Indefinite

Served as Assistant

Vice President since

August 2012

     Assistant Vice President for Wasatch Funds since August 2012. Director of Mutual Fund Services for the Advisor since June 2007.

Cheryl Reich

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 36

  Assistant Secretary   

Indefinite

Served as Assistant

Secretary since

February 2017

     Assistant Secretary for Wasatch Funds since February 2017. Compliance Associate for the Advisor since September 2012.

Kara H. Becker

505 Wakara Way

3rd Floor

Salt Lake City, UT 84108

Age 36

  Assistant Treasurer   

Indefinite

Served as Assistant

Treasurer since May 2018

     Assistant Treasurer for Wasatch Funds since May 2018. Controller for the Advisor since January 2012.

 

Additional information about the Funds’ trustees is provided in the Statement of Additional Information and is available without charge, upon request, by calling 800.551.1700.

 

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ADDITIONAL TAX INFORMATION

The Funds hereby designate the following amounts or maximum amounts allowable as long term capital gain dividends for the purpose of the dividends paid deduction. The amounts designated here include the utilization of earnings and profits distributed to shareholders on the redemption of shares.

 

Fund    Amount

Core Growth Fund

     $ 172,135,583

Emerging India Fund

       15,619,790

Emerging Markets Small Cap Fund

       48,977,453

Global Opportunities Fund

       15,578,105

Global Value Fund

       23,053,698

International Growth Fund

       170,045,903

International Opportunities Fund

       11,299,512

Micro Cap Fund

       87,356,742

Micro Cap Value Fund

       26,820,661

Small Cap Growth Fund

       414,909,154

Small Cap Value Fund

       31,718,827

Ultra Growth Fund

       11,813,532

For the fiscal year ended September 30, 2019, certain dividends paid by each Fund may be subject to a maximum tax rate of 20% as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. To the extent dividends are paid during calendar year 2019, complete information will be reported on shareholders’ 2019 Form 1099-DIV.

The amount designated as qualified dividend income for the year ended September 30, 2019 will be at the highest amount permitted by law.

Corporate shareholders should note that for the year ended September 30, 2019, the percentage of the Funds’ investment income (i.e., net investment income plus short-term capital gains) that qualified for the corporate dividends received deductions was as follows:

 

Fund    Percentage

Global Value Fund

       40 %

Ultra Growth Fund

       3 %

The Wasatch Global Value Fund has made an election under Internal Revenue Code Section 853 to pass through foreign taxes paid by the Fund to its shareholders. For the year ended September 30, 2019, the total amount of foreign taxes paid that was passed through to its shareholders for information reporting purposes was $413,005.

PROXY VOTING POLICIES, PROCEDURES AND RECORD

A description of the policies and procedures that the Advisor. uses to vote proxies related to the Funds’ portfolio securities is set forth in the Funds’ Statement of Additional Information, which is available without charge, upon request, on the Funds’ website at wasatchglobal.com or by calling 800.551.1700 and on the Securities and Exchange Commission’s (SEC) website at www.sec.gov.

Wasatch Funds’ proxy voting record is available without charge on the Funds’ website at wasatchglobal.com and on the SEC’s website at www.sec.gov no later than August 31 for the prior 12 months ended June 30.

QUARTERLY PORTFOLIO HOLDINGS DISCLOSURE ON FORM N-PORT

The Funds file their complete schedules of investments with the SEC for their first and third quarters of each fiscal year on Form N-PORT. The Funds’ Form N-PORT filings are available on the SEC’s website at www.sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the operation of the Public Reference room may be obtained by calling 800.SEC.0330).

 

 

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WASATCH FUNDS  

 

 

Supplemental Information (continued)

 

BOARD CONSIDERATIONS FOR ADVISORY AND SUB-ADVISORY AGREEMENTS OF THE WASATCH FUNDS

I. Board Considerations for the renewal of Advisory and Sub-Advisory Agreements of the Wasatch Funds, except the Wasatch Global Select Fund and Wasatch International Select Fund which are discussed in Section II below.

At a meeting held on November 12, 2019 (the “Meeting”), the Board of Trustees (the “Board”) of Wasatch Funds Trust (the “Trust”), including the disinterested Trustees (hereafter, the “Independent Trustees”), unanimously approved the Advisory and Service Contract (the “Advisory Agreement”) between the Trust Wasatch Global Investors, Inc. (the “Advisor”) on behalf of each series of the Trust other than the Wasatch Global Select Fund and Wasatch International Select Fund (for purposes of this Section I, each a “Fund”) and the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Advisor and Hoisington Investment Management Company (“HIMCo” or the “Sub-Advisor”) on behalf of the Wasatch-Hoisington U.S. Treasury Fund (the “U.S. Treasury Fund”). The Advisory Agreement and Sub-Advisory Agreement are collectively the “Advisory Agreements.”

The Board, including the Independent Trustees, is responsible for overseeing the management of the Funds and as such, the Board determines each year as required by law whether to continue the Advisory Agreement with the Advisor on behalf of each Fund, and the Sub-Advisory Agreement with HIMCo on behalf of the U.S. Treasury Fund. In preparation for their review of the Advisory Agreements, the Independent Trustees requested through independent legal counsel and received extensive materials specifically prepared for the annual review of such agreements by the Advisor as well as certain materials provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data. The materials covered a breadth of subject matters including, among other things, an overview of the organization of the Advisor and its culture; organization and leadership structure and investment process of the Advisor, including its investment risk management process; the nature, extent and quality of services performed pursuant to the Advisory Agreement; the experience of the relevant investment personnel; the performance of each Fund in absolute terms and as compared to the performance of peers compiled by Broadridge and benchmark(s); the brokerage policies and practices and commission results; the fees and expenses of each Fund and as compared to peers compiled by Broadridge; the expense caps provided by the Advisor on the expenses of the applicable classes of the Funds; and the profitability of the Advisor. With respect to the Sub-Advisor, the materials also covered, among other things, an evaluation of the Sub-Advisor by the Advisor; the organizational and leadership structure of the Sub-Advisor; the services performed pursuant to the Sub-Advisory Agreement; the experience of the relevant investment personnel; the performance of the U.S. Treasury Fund in absolute terms and as compared to the performance of peers compiled by Broadridge and a benchmark; the fees and expenses of the U.S. Treasury Fund and as compared to

peers compiled by Broadridge; and certain financial data regarding the Sub-Advisor.

The information prepared specifically for the annual review of the Advisory and Sub-Advisory Agreements supplemented the information provided to the Board and its committees throughout the year. The Board and its committees met regularly during the year and the information provided and topics discussed were relevant to the review of the Advisory Agreements. Some of these reports and other data included, among other things, materials that outlined the investment performance of the Funds with particular focus on Funds the Board considered to have had periods of challenged performance and the drivers underlying the performance; compliance, risk and liquidity management; valuation of securities; compliance with the respective Fund’s investment objectives and investment restrictions; Fund expenses; the execution of portfolio transactions; and overall market and regulatory developments. The Independent Trustees considered their review of Advisory Agreements to be an ongoing process and employed the accumulated information, knowledge and experience the Trustees had gained during their tenure on the Board governing the Funds and evaluating the Advisor and Sub-Advisor.

The Independent Trustees were advised by independent legal counsel during the annual review process as well as throughout the year, including meeting in execution sessions with such counsel at which no representatives from the Advisor or Sub-Advisor were present. In connection with their annual review, the Independent Trustees also received a memorandum from independent legal counsel outlining their fiduciary duties and legal standards in reviewing the Advisory Agreements.

In continuing their practice, the Independent Trustees met in executive session on October 29-30, 2019 to consider and discuss, among other things, the services provided by the Advisor to the Funds and in comparison to other types of clients; the Funds’ performance in absolute terms and in comparison to the performance of other peers and benchmarks; the fees and expenses of each Fund in absolute terms and in comparison to peers and other clients of the Advisor; the profitability of the Advisor from its relationship with the Funds; any economies of scale achieved in managing the Funds, the profitability of the Advisor and any indirect benefits received by the Advisor as a result of its relationship with the Funds. The Independent Trustees also considered the renewal of the Sub-Advisory Agreement on behalf of the U.S. Treasury Fund and reviewed, among other things, the services performed by the Sub-Advisor; the performance of the U.S. Treasury Fund in absolute terms and in comparison to other peers and a benchmark; the sub-advisory fees; certain financial data of the Sub-Advisor; any economies of scale; and any indirect benefits received by the Sub-Advisor as a result of its relationship with the U.S. Treasury Fund. In their review, the Independent Trustees evaluated the advisory arrangements separately on a Fund-by-Fund and per class basis. The Independent Trustees invited members of management of the Advisor to attend the executive session from time to time to respond to questions and provide additional information.

 

 

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Following these discussions, the Independent Trustees requested through their independent counsel additional information, and the Advisor provided written and oral responses to this request.

At the Meeting, the Independent Trustees met, including in executive session without management present, to further consider, in relevant part, the renewal of the Advisory and Sub-Advisory Agreements. The Independent Trustees had the benefit of independent legal counsel throughout the process. After the discussions and taking into account the accumulated knowledge and information the Trustees have received during their tenure in overseeing the Funds and the legal guidance provided by independent legal counsel, the Independent Trustees approved the renewal of the Advisory Agreement and Sub-Advisory Agreement on behalf of the applicable Funds. The Independent Trustees’ consideration of the contractual fee arrangements for the Funds were the result of several years of review and discussion between the Independent Trustees and Fund management, and the Independent Trustees’ conclusions may be based, in part, on their consideration of the fee arrangements and other factors developed in prior years. The Independent Trustees did not identify any single factor as all-important or controlling, but rather the decision reflected the comprehensive consideration of all the information presented, and each Trustee may have attributed different weights to the various factors and information considered in the approval process. The following summarized the principal factors, but not all the factors, the Board considered in its review of the Advisory and Sub-Advisory Agreements and its conclusions.

A. NATURE, EXTENT AND QUALITY OF SERVICES

In evaluating the renewal of the Advisory Agreements, the Board considered, in relevant part, the nature, extent and quality of the Advisor’s and Sub-Advisor’s services to the Funds. The Board considered the comprehensive set of management, oversight and administrative services the Advisor provides to manage and operate the Funds in a highly regulated industry. The Independent Trustees recognized that the Advisor provides portfolio management services for the Funds (other than the U.S. Treasury Fund). In connection with providing these portfolio management services, the Board considered the Advisor’s investment philosophy and process, including its research-intensive screening process to identify investments, the methodology followed to construct portfolios, the principles and process followed to manage investment risk and the Advisor’s sell discipline. In seeking to assess the Advisor’s ability to continue to provide the various services, the Board further considered, among other things, the stability of the Advisor’s organization and its governance structure, the experience and tenure of the portfolio manager(s) and breadth of its research and trading teams, the compensation arrangements for investment personnel and whether they were sufficient to attract and retain qualified personnel and deter taking undue risks in portfolio management, the Advisor’s succession planning for both portfolio management and the firm’s management, the Advisor’s process to identify and address risks that it faces, the Advisor’s business continuity policies and procedures, the Advisor’s

culture and as described in further detail below, certain financial data of the Advisor, including its profitability.

The Independent Trustees also continue to seek to meet with the portfolio manager(s) of the various Funds during the year to discuss and keep updated on, among other things, the investment approach employed, any adjustments thereto, market conditions and investment performance. As noted below, the Independent Trustees also reviewed Fund performance in considering the Advisor’s investment management performance.

In addition to portfolio management services, the Board considered the wide range of administrative or non-advisory services the Advisor provides to manage and operate the Funds (in addition to those provided by other third-parties). The Advisor oversees the day-to-day operations of the Funds including overseeing the service providers involved in the daily operations of the Funds. The Board recognized that many of these non-advisory services are unique to operating mutual funds and noted that the services included, but were not limited to, administrative services (such as providing the employees and officers necessary for the Funds’ operations); oversight services (such as coordinating and evaluating the services of the various third-party service providers, including the Sub-Advisor, custodian, transfer agent and other intermediaries); board support and administration (such as overseeing the organization of the Board and committee

meetings and preparing or overseeing the timely preparation of various materials and/or presentations for such meetings); shareholder communications (such as overseeing the preparation of annual and semi-annual and other periodic shareholder reports); tax administration; Fund regulatory and other administrative services (such as overseeing the preparation of the Fund’s registration statements and other required regulatory filings, including applicable foreign registration requirements; overseeing the valuation of portfolio securities and daily pricing; reviewing and certifying the Funds’ financial statements; overseeing the Funds’ distributions; and analyzing trade execution including monitoring and evaluating cross-trades [if any]); and compliance services (such as helping to maintain and update the Funds’ compliance program and related policies and procedures as necessary or appropriate to meet new regulatory requirements and reviewing such program annually; helping to ensure each Fund complies with its portfolio limitations and restrictions; voting proxies on behalf of the Funds; monitoring the liquidity of the portfolios; providing compliance training for personnel; and evaluating the compliance programs of the Funds’ service providers).

In addition to the services provided by the Advisor, the Independent Trustees also considered the risks borne by the Advisor in managing the Funds, including various material entrepreneurial, reputational and regulatory risks.

With respect to the U.S. Treasury Fund, the Board recognized that the Fund utilizes a Sub-Advisor and therefore evaluated the renewal of the Sub-Advisory Agreement. With respect to such Fund, the Board considered the division of responsibilities between the Advisor and Sub-Advisor and recognized that the Sub-Advisor and its investment personnel are responsible for the management of the portfolio of the

 

 

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U.S. Treasury Fund but are not expected to provide the other significant administrative services to the Fund such as those provided by the Advisor. The Board noted that the Advisor oversees and evaluates the Sub-Advisor with respect to the latter’s portfolio management of the Fund and considered the Advisor’s evaluation of the Sub-Advisor. The Independent Trustees considered the background and experience of the investment personnel of the Sub-Advisor and the performance history of the U.S. Treasury Fund. Similarly, in seeking to help ensure the continuity of the services of the Sub-Advisor, the Independent Trustees considered, among other things, the history and experience of the Sub-Advisor as a registered investment advisor and as a Sub-Advisor to the Fund; the stability, organizational structure, tenure of portfolio managers and compensation arrangements of the Sub-Advisor; the Sub-Advisor’s disaster recovery plans and process; its compliance program, including its regulatory history; and certain financial data of the Sub-Advisor as described in further detail below. The Board noted that the Advisor recommended the renewal of the Sub-Advisory Agreement.

Based on their review, the Independent Trustees found that, overall, the nature, extent and quality of services provided under the Advisory Agreement and the Sub-Advisory Agreement were satisfactory on behalf of each applicable Fund.

B. THE INVESTMENT PERFORMANCE OF THE FUNDS

In evaluating the quality of the services provided by the Advisor and Sub-Advisor, the Board also received and considered the investment performance of the Fund(s) they advise. In this regard, the Board received and reviewed a report (the “Broadridge Report”) prepared by Broadridge which generally provided a Fund’s performance data for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019 (or for the periods available for Funds that did not exist for part of the foregoing timeframe) on an absolute basis and as compared to the performance of unaffiliated funds with similar investment objectives or classifications (a “Broadridge Peer Universe”), to a more focused subset of peers (a “Broadridge Peer Group”) and a benchmark provided by Broadridge for the prescribed periods (subject to certain exceptions). The Board was provided with information describing the methodology Broadridge used to create the Broadridge Peer Group and Broadridge Peer Universe.

In addition to the Broadridge Report, the Independent Trustees also reviewed materials reflecting, among other things, the respective Fund’s historic performance for the quarter, one-, three-, five- and 10-year periods ended September 30, 2019 (or for the periods available for Funds that did not exist for part of the foregoing time frame), and annual returns from 2009 through 2018 (or for the calendar years available for Funds that did not exist for part of the foregoing time frame) in absolute terms and as compared to the Fund’s respective benchmark(s) as described below.

The Board also considered information reflecting a Fund’s peer ranking in its respective Morningstar investment category and any Morningstar ratings on the applicable Fund. The Independent Trustees further received analyst reports provided by an unaffiliated party for the following Funds: the

Core Growth Fund, the International Opportunities Fund, the Small Cap Growth Fund and the U.S. Treasury Fund. The Independent Trusts also reviewed the performance of the following Funds (the Core Growth Fund, the Emerging India Fund, the Emerging Markets Select Fund, the Emerging Markets Small Cap Fund, the Frontier Emerging Small Countries Fund, the Global Opportunities Fund, the International Growth Fund, the International Opportunities Fund, the Micro Cap Fund, the Micro Cap Value Fund, the Small Cap Growth Fund, the Small Cap Value Fund and the Ultra Growth Fund), compared to the performance of certain composites of separate accounts for the one-, three-, five- and 10-year periods ended September 30, 2019 (or for such shorter periods if the Funds a separate account composite did not exist for part of the foregoing timeframe).

The performance data prepared for the annual review of the Advisory and Sub-Advisory Agreements supplements the performance data the Trustees received throughout the year as the Board regularly reviews and meets with portfolio manager(s) during the year to discuss, in relevant part, the performance of their respective Fund.

In evaluating performance, the Independent Trustees recognized certain limitations in assessing performance data which may impact the weight given to particular performance data, including the following:

  The performance data reflects a snapshot in time as of a particular period (in this case, the periods ended August 31, 2019 and September 30, 2019) and a different performance period could generate significantly different results;
  Long-term performance can be adversely affected by even one period of significant underperformance so that a single investment decision or theme has the ability to disproportionately affect long-term performance;
  The investment experience of a particular shareholder in the Funds will vary depending on the shareholder’s particular investment period and the Fund’s performance during that period and the class held (if multiple classes are offered in a Fund);
  Although the performance data included in the Broadridge Report was based on the performance of the Investor Class shares of the Funds, the Board recognized that the Funds, except the U.S. Treasury Fund, also offer Institutional Class shares. The performance of another class of a Fund, however, should be substantially similar on a relative basis because the classes are invested in the same portfolio of securities and differences in performance between the classes could be principally attributed to the variation in the expenses of each class; and
 

There may be difficulties in establishing appropriate peer groups and benchmarks for certain Funds. In this regard, the Independent Trustees considered that the Advisor and Sub-Advisor are responsible for managing the respective Fund in accordance with its investment objectives, investment parameters and guidelines and peers and/or benchmarks may be following different objective(s), investment parameters and guidelines and risk tolerance levels which will lead to differing performance results and may limit the value of the comparative performance data in assessing a particular Fund’s performance. The Independent

 

 

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Trustees have recognized some limitations with the Broadridge Peer Group for the Micro Cap Fund and Micro Cap Value Fund (collectively, the “Micro Cap Funds”) as the respective Broadridge Peer Group generally focused on companies with a larger market capitalization than those sought by the Micro Cap Funds. As a result, the Independent Trustees also reviewed the Micro Cap Funds’ performance compared to a custom no-load peer group provided by the Advisor for the one-, three-, five- and 10-year periods ended September 30, 2019.

  The Independent Trustees recognized that in comparing the performance of certain Funds to the performance of separate account composites managed by the Advisor in similar styles, the differences in expenses and strategies between the Funds and separate accounts in the composites may limit some of the usefulness of the comparative data.    

Based on their review of the performance data, the Independent Trustees determined the following:

Core Growth Fund

With respect to the Core Growth Fund, the Fund’s Investor Class outperformed the median of the Broadridge Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019. The average annual total returns of the Fund’s Investor Class and Institutional Class also outperformed the Russell 2000® Index and Russell 2000 Growth Index for the one-, three-, five- and 10-year periods ended September 30, 2019. The Board considered that the Fund’s overall performance had been generally favorable.

Emerging India Fund

With respect to the Emerging India Fund, the Fund’s Investor Class outperformed the median of its Broadridge Peer Group in the one-, two-, three-, four- and five-year periods ended August 31, 2019. The average annual total returns of the Fund’s Investor Class and Institutional Class also outperformed the MSCI India Investable Market Index for the one-, three- and five-year periods ended September 30, 2019. The Board considered that the Fund’s performance had been generally favorable.

Emerging Markets Select Fund

With respect to the Emerging Markets Select Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of the Broadridge Peer Group for the one-, two-, three-, four- and five-year periods. Similarly, although the average annual total returns of the Fund’s Investor Class and Institutional Class underperformed the MSCI Emerging Markets Index over the five-year period ended September 30, 2019, each class outperformed such index for the one- and three-year periods ended September 30, 2019. The Board was satisfied with the Fund’s overall performance.

Emerging Markets Small Cap Fund

With respect to the Emerging Markets Small Cap Fund, the Independent Trustees noted that although the Fund’s Investor Class underperformed the median of its Broadridge

Peer Group for the three-, four- and five-year periods ended August 31, 2019, the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the more recent one- and two-year periods ended August 31, 2019. In addition, the average annual total returns of the Fund’s Investor Class and Institutional Class outperformed the MSCI Emerging Markets Small Cap Index for the one-, three-, five- and 10-year periods ended September 30, 2019. In addition, although the average annual total returns of the Investor Class and Institutional Class underperformed the MSCI Emerging Markets Index for the three- and five-year periods ended September 30, 2019, both classes outperformed such index for the one- and 10-year periods ended September 30, 2019. The Board noted that although the Fund had experienced periods of challenged performance, the Fund’s performance had improved in more recent years. Nevertheless, the Board noted the continued challenges of the emerging market asset class and determined to continue to monitor this Fund closely.

Frontier Emerging Small Countries Fund

With respect to the Frontier Emerging Small Countries Fund, the Independent Trustees noted that although the Fund has experienced periods of challenged performance with the Investor Class underperforming the median of its Broadridge Peer Group for the three-, four- and five-year periods ended August 31, 2019, the Fund’s performance improved with it outperforming the median of the Broadridge Peer Group for the one- and two-year periods ended August 31, 2019. Although the average annual total returns of the Fund’s Investor Class and Institutional Class underperformed the MSCI Frontier Emerging Markets Index and MSCI Frontier Markets Index for the three- and five-year periods ended September 30, 2019, both classes outperformed such indexes for the one-year period ended September 30, 2019. The Board recognized that the Fund had experienced periods of challenged performance over the years, the steps taken to address performance concerns, and the improved performance in recent years. Nevertheless, the Board would continue to monitor this Fund closely.

Global Opportunities Fund

With respect to the Global Opportunities Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-, three-, four- and five-year periods ended August 31, 2019 and matched the performance of the median of its Broadridge Peer Group for the 10-year period. Similarly, the average annual total returns of the Fund’s Investor Class and Institutional Class outperformed its benchmark, the MSCI AC (All Country) World Small Cap Index, for the one-, three-, five- and 10-year periods ended September 30, 2019. The Board determined that the Fund’s overall performance over time had been generally favorable.

Global Value Fund

With respect to the Global Value Fund, the Independent Trustees noted that although the Fund’s Investor Class underperformed the median of its Broadridge Peer Group

 

 

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for the 10-year period ended August 31, 2019, the Fund’s Investor Class outperformed or matched the median of its Broadridge Peer Group for the one-, two-, three-, four-, and five-year periods ended August 31, 2019. The Board, however, noted the small number of peers comprising the Broadridge Expense Group limits some of the usefulness of the Broadridge comparative data. The Board also noted the Fund’s Investor Class and Institutional Class performance was below that of the MSCI All Country World Index for the one-, three-, five- and 10-year periods ended September 30, 2019. In reviewing the performance, the Independent Trustees recognized that the Board previously had approved a change in the principal investment strategies of the Fund to permit the Fund greater ability to invest in foreign securities becoming a global value fund effective October 31, 2017, and the past performance prior to such effective date would not reflect the foregoing change. Although the Fund previously had experienced periods of challenged performance, the Board recognized the steps the Advisor has taken to address performance issues and would continue to monitor this Fund closely.

International Growth Fund

With respect to the International Growth Fund, the Independent Trustees noted that although the Fund’s Investor Class underperformed the median of its Broadridge Peer Group in the one-, three- and four-year periods ended August 31, 2019, the class outperformed or matched the performance of the median in the two-, five- and 10-year periods ended August 31, 2019. The Independent Trustees further noted that although the average annual total returns of the Fund’s Investor Class and Institutional Class underperformed the benchmarks, the MSCI AC (All Country) World ex USA. Small Cap Index and MSCI World ex USA. Small Cap Index, for the one- and three-year periods ended September 30, 2019, both classes outperformed such indexes for the five- and 10-year periods. The Board recognized that the Fund had experienced some periods of challenged performance and the Board determined it would monitor this Fund closely.

International Opportunities Fund

With respect to the International Opportunities Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019. Similarly, the Independent Trustees noted that the average annual total returns of the Fund’s Investor Class and Institutional Class outperformed the performance of its benchmarks the MSCI AC (All Country) World ex USA. Small Cap Index and MSCI World ex USA. Small Cap Index for the one-, three-, five- and 10-year periods ended September 30, 2019. The Board determined the Fund’s overall performance had been generally favorable.

Micro Cap Fund

With respect to the Micro Cap Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-,

three- four-, five- and 10-year periods ended August 31, 2019. In addition, the average annual total returns of the Fund’s Investor Class outperformed its benchmark, the Russell Microcap Index, for the one-, three-, five- and 10-year periods ended September 30, 2019. In considering the comparative data, the Independent Trustees have recognized that the Broadridge Peer Group may not adequately reflect the investment strategies and investable universe of the Fund limiting some of the value of the comparative data. Accordingly, the Independent Trustees also reviewed the Fund’s performance compared to a custom peer group provided by the Advisor for the one-, three-, five- and 10-year periods ended September 30, 2019. In considering the foregoing, the Board determined the Fund’s overall performance had been generally favorable.

Micro Cap Value Fund

With respect to the Micro Cap Value Fund, the Independent Trustees noted that although the Fund’s performance was below the performance of its Broadridge Peer Group for the two-year period ended August 31, 2019, the Fund’s Investor Class outperformed or matched the performance of the median of its Broadridge Peer Group for the one-, three-, four-, five-, and 10-year periods ended August 31, 2019. Similarly, the average annual total returns of the Fund’s Investor Class outperformed its benchmark, the Russell Microcap Index, for the one-, three-, five- and 10-year periods ended September 30, 2019. In considering the comparative data, as noted above with the Micro Cap Fund, the Independent Trustees recognized that Broadridge Peer Group may not adequately reflect the investment strategies and investable universe of the Fund thereby limiting some of the usefulness of the comparative data. Accordingly, the Independent Trustees also reviewed the Fund’s performance compared to a custom peer group provided by the Advisor for the one-, three-, five- and 10-year periods ended September 30, 2019. In considering the foregoing, the Board was satisfied with the Fund’s overall performance.

Small Cap Growth Fund

With respect to the Small Cap Growth Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019. In addition, the average annual total returns of the Fund’s Investor Class and Institutional Class outperformed the Russell 2000 Growth Index and Russell 2000 Index for the one-, three-, five- and 10-year periods ended September 30, 2019. The Board was satisfied with the Fund’s overall performance.

Small Cap Value Fund

With respect to the Small Cap Value Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019. In addition, the average annual total returns of the Fund’s Investor Class and Institutional Class outperformed the Russell 2000 Value Index and Russell 2000

 

 

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Index for the one-, three-, five- and 10-year periods ended September 30, 2019. The Board determined the Fund’s performance had been generally favorable.

Ultra Growth Fund

With respect to the Ultra Growth Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019. In addition, the average annual total returns of the Fund’s Investor Class outperformed the Russell 2000 Growth Index for the one-, three-, five- and 10-year periods ended September 30, 2019. In light of the foregoing, the Board determined the Fund’s overall performance had been generally favorable.

U.S. Treasury Fund

With respect to the U.S. Treasury Fund, the Independent Trustees noted that the Fund’s Investor Class outperformed the median of its Broadridge Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2019. Similarly, the average annual total returns of the Fund’s Investor Class outperformed its benchmark, the Bloomberg Barclays US Aggregate Bond Index, for the one-, three-, five- and 10-year periods ended September 30, 2019. The Board determined the Fund’s overall performance had been generally favorable.

C. FEES, EXPENSES AND PROFITABILITY

 

1.

Fees and Expenses

In its annual review, the Board considered the fees paid to the Advisor and Sub-Advisor and the total operating expense ratio of each Fund before and after any expense cap undertaken by the Advisor to limit the respective Fund’s operating expenses to certain levels. More specifically, the Independent Trustees reviewed, among other things, the contractual management fee rate, the net management fee rate (i.e. the management fee after taking into account expense reimbursements and/or fee waivers, if any) and net total expense ratio of each class of the respective Fund in relation to those of a comparable universe of funds (the “Broadridge Expense Universe”) and to a more focused subset of comparable funds (the “Broadridge Expense Group”) established by Broadridge. The Board reviewed information regarding the methodology followed by Broadridge to develop the Broadridge Expense Universe and Broadridge Expense Group. The Board considered the net total expense ratio of each class of each Fund (expressed as a percentage of average net assets) as the expense ratio is more reflective of the investors’ net experience in a Fund as it directly reflects the costs of investing in a Fund.

In reviewing the comparative data provided by Broadridge, the Board recognized that differences between the applicable Fund and the peers comprising such Fund’s respective Broadridge Expense Universe or Broadridge Expense Group may limit some of the value of the comparative data, particularly with respect to the Micro Cap Fund and Micro Cap Value Fund. Given these limitations, the

Independent Trustees also reviewed comparisons of the Micro Cap Fund’s and Micro Cap Value Fund’s management fee and net expense ratio with those of a custom peer group provided by the Advisor. Aside from the comparative data provided by Broadridge, the Independent Trustees also considered comparative data between the fee rates charged by the Advisor and Sub-Advisor to the Funds compared to other types of clients, as described in further detail below.

In addition to the comparative data, the Board considered the various factors the Advisor considered in proposing the management fee level for a Fund, including, among other things, the value of the potential service being provided (e.g., the expertise of the Advisor with the proposed strategy and the respective Fund’s potential to deliver alpha), the competitive marketplace (i.e., the uniqueness of the Fund and the fees of competitor funds) and the economics to the Advisor (e.g., the costs of operating the Fund and whether the capacity of the Fund was limited thereby limiting potential revenues). In evaluating fee levels, the Board also considered, among other things, the costs incurred in applying the Advisor’s research-intensive approach to stock selection, particularly for evaluating small or micro-cap companies and foreign companies; the costs of maintaining quality and experienced portfolio managers and research staff; the loss of potential revenues that could have been earned on higher asset levels when the Advisor closes capacity-constrained Funds to maintain assets at a level necessary to protect performance to the benefit of shareholders; and the Advisor’s contractual commitment to cap the expenses of each of the classes of various Funds to certain levels to the benefit of shareholders and the expenses reimbursed or fees waived by the Advisor in the last three fiscal years. The Board also considered a Fund’s net management fee and net total expense ratio in light of its performance history.

In considering the fees of the Sub-Advisor for the U.S. Treasury Fund, the Independent Trustees considered the fee rate paid to the Sub-Advisor with respect to such Fund in absolute terms and as compared to the Sub-Advisor’s pricing schedule for portfolio management services for other clients. The Independent Trustees also noted that the Advisor pays the Sub-Advisor from its own revenues and not the Fund. Further, the Independent Trustees recognized that the Advisor and Sub-Advisor are not affiliates and the sub-advisory fee was established through arm’s length negotiations between the Advisor and the Sub-Advisor.

In its evaluation of the advisory and sub-advisory fees of the Funds, the Board observed, among other things, the following:

With respect to the Core Growth Fund, the Independent Trustees recognized that although the contractual management fee rate for the Investor Class and Institutional Class shares was above the median of its respective Broadridge Expense Group, the Fund had a net expense ratio that was slightly higher (within 5 basis points) than the median of its Broadridge Expense Group for the Investor Class shares and lower than the median of its Broadridge Expense Group for the Institutional Class shares. The Independent Trustees also noted, in part, the capacity constraints of this Fund, the experience and expertise of the Advisor with this strategy,

 

 

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the costs of the research-intensive approach, and the potential for the Fund to deliver alpha. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Emerging India Fund, although the Fund’s contractual management fee rate for the Investor Class and Institutional Class shares was higher than the median of its Broadridge Expense Group, its net expense ratio was below the median of its Broadridge Expense Group for the Investor Class shares and the Institutional Class shares. The Independent Trustees also noted, in part, the capacity constraints of this Fund, the uniqueness of the Fund in the marketplace, the expertise of the Advisor in the small-cap asset class, and the additional expenses associated with evaluating and investing in companies in India. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Core Growth Fund, the Independent Trustees recognized that although the contractual management fee rate for the institutional and Investor Class shares was above the median of its respective Broadridge Expense Group, the Fund had a net expense ratio that was slightly higher (within 5 basis points) than the median of its Broadridge Expense Group for the Investor Class shares and lower than the median of its Broadridge Expense Group for the Institutional Class shares. The Independent Trustees also noted, in part, the capacity constraints of this Fund, the experience and expertise of the Advisor with this strategy, the costs of the research-intensive approach, and the potential for the Fund to deliver alpha. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Emerging Markets Small Cap Fund, the Independent Trustees noted that the Fund’s contractual management fee rate and net total expense ratio for the Investor Class shares and Institutional Class shares were above the median of its Broadridge Expense Group. The Independent Trustees also noted, in part, the capacity constraints of this Fund, the uniqueness of the Fund in the marketplace, and the additional expenses associated with evaluating and investing in companies dispersed among the various emerging market countries. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Frontier Emerging Small Countries Fund, the Independent Trustees noted that the contractual management fee rate was above the median of its Broadridge Expense Group for the Investor Class and Institutional Class shares. In addition, the Fund’s net expense ratio was above the median of its Broadridge Expense Group for the Investor Class shares but below the median for the Institutional Class shares. The Trustees further recognized, however, the management fee and expense cap on the classes of this Fund had been reduced in 2017. The Independent Trustees also noted, in part, the capacity constraints of this Fund, the uniqueness of the Fund in the marketplace, and the additional expenses

associated with evaluating and investing in companies dispersed among the various emerging-market and frontier-market countries. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Global Opportunities Fund, the Independent Trustees noted that although the contractual management fee rate of the Fund was above the median of its Broadridge Expense Group for the Investor Class shares and the Institutional Class shares, the Fund’s net expense ratio was slightly higher (within 5 basis points) of the median of its Broadridge Expense Group for the Investor Class shares and below the median for the Institutional Class shares. In addition, the Independent Trustees noted, in part, the uniqueness of the Fund in the marketplace and the capacity constraints of this Fund. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Global Value Fund, although the Independent Trustees noted that the contractual management fee rate was above (but within 10 basis points) of the median of its Broadridge Expense Group for the Investor Class shares and Institutional Class shares, the Fund’s net expense ratio was below the median of its Broadridge Expense Group for both share classes. In addition, the Independent Trustees recognized that the Fund generally had no capacity constraints given its investment strategies. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the International Growth Fund, the Independent Trustees noted that although the Fund’s contractual management fee rate for the Investor Class shares and Institutional Class shares was above the median of its Broadridge Expense Group, its net expense ratio was below the median of the Broadridge Expense Group for both share classes. In addition, the Independent Trustees noted, in part, the capacity constraints of the Fund, the uniqueness of the strategy of the Fund, the ability to add value through its investment approach and the additional costs incurred in evaluating and investing in foreign companies. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the International Opportunities Fund, the Independent Trustees noted that the Fund’s contractual management fee rate and net expense ratio were above the median of its Broadridge Expense Group for the Investor Class shares and Institutional Class shares. In addition, the Independent Trustees noted, in part, the capacity constraints of the Fund, the uniqueness of the strategy of the Fund, the ability to add value through its investment approach, and the additional costs incurred in evaluating and investing in foreign companies. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Micro Cap Fund and the Micro Cap Value Fund, the Independent Trustees noted that each

 

 

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Fund’s contractual management fee rate and net expense ratio were above the median of its respective Broadridge Expense Group. In addition, the Independent Trustees noted, in part, the capacity constraints of the Funds, the uniqueness of the Funds and their potential to deliver alpha, the Advisor’s expertise in this asset category, and the amount of due diligence and the costs associated with applying the Advisor’s research-intensive approach to screen and research companies in the micro-cap asset class. Based on its review, the Board determined that the advisory fee for each of the foregoing Funds was acceptable in light of the nature, extent and quality of services provided.

With respect to the Small Cap Growth Fund, the Independent Trustees noted that the Fund’s contractual management fee rate was above the median of its Broadridge Expense Group for the Investor Class shares and Institutional Class shares and its net expense ratio was approximately the same as the median of its Broadridge Expense Group for the Investor Class shares and below the median for the Institutional Class shares. In addition, the Trustees noted, in part, the capacity constraints of the Fund, the potential to deliver alpha, the expertise of the Advisor with the strategy and the costs associated with applying the Advisor’s research-intensive approach to the small-cap asset class. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Small Cap Value Fund, the Independent Trustees noted that the Fund’s contractual management fee rate was above the median of its Broadridge Expense Group for the Investor Class shares and Institutional Class shares, and the net expense ratio of the Investor Class shares was above the median of its Broadridge Expense Group but below the median for the Institutional Class shares. In addition, the Trustees noted, in part, the capacity constraints of the Fund, the potential to deliver alpha, the expertise of the Advisor with the strategy and the costs associated with applying the Advisor’s research-intensive approach to the small-cap asset class. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided.

With respect to the Ultra Growth Fund, the Independent Trustees noted that the Fund’s contractual management fee rate for its Investor Class shares was above the respective median of the Broadridge Expense Group, but the net expense ratio was approximately the same as the median of this expense group. In addition, the Independent Trustees noted, in part, the capacity constraints of the Fund, the potential to deliver alpha, the Advisor’s expertise in the small cap asset class and the costs associated with applying the Advisor’s research-intensive approach to the small-cap asset class. Based on its review, the Board determined the advisory fees for the Fund were acceptable in light of the nature, extent and quality of services provided.

With respect to the U.S. Treasury Fund, the Independent Trustees noted that the Fund’s contractual management fee and the Fund’s net expense ratio were below the median of its Broadridge Expense Group for the Investor Class shares.

In addition, the Independent Trustees recognized that the Fund did not have any capacity constraints. Based on its review, the Board determined that the advisory fee for the foregoing Fund was acceptable in light of the nature, extent and quality of services provided. In addition to the advisory fee paid to the Advisor, the Board recognized that the Fund is sub-advised and separately considered the sub-advisory fee rate paid to the Sub-Advisor by the Advisor. The Board reviewed, among other things, the Sub-Advisor’s fee rate for services to the Fund compared to the Sub-Advisor’s pricing schedule for portfolio management services to other clients. With respect to the U.S. Treasury Fund, the Independent Trustees noted that the sub-advisory fee rate was in line with the Sub-Advisor’s fee schedule in light of the asset size of the Fund. In addition, the Independent Trustees also recognized that the Advisor pays the Sub-Advisor from its own revenues, and that the Advisor and Sub-Advisor were not affiliated and therefore the sub-advisory fee had been established through arm’s length negotiations between the Advisor and the Sub-Advisor. Based on its review, the Board determined that the sub-advisory fee for the U.S. Treasury Fund was acceptable in light of the nature, extent and quality of services provided.

 

2.

Fees Charged to Other Advisor and Sub-Advisor Clients

In determining the appropriateness of the fees, the Board also considered information regarding fee rates assessed by the Advisor to other types of clients and the type of services provided to these other clients, including separate accounts, unified managed accounts, model accounts, collective investment trusts and certain domestic and foreign funds outside the Wasatch family of funds for which the Advisor serves as a sub-advisor. The Independent Trustees reviewed, among other things, information regarding the fee rates of certain separate accounts and if multiple separate accounts existed with varying fee rates, the range of fees and the weighted average of such accounts that were managed in a style similar to that of certain Funds. Such Funds with comparative separate account data included the Core Growth Fund, Emerging India Fund, Emerging Markets Select Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, Global Value Fund, International Growth Fund, Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund and Ultra Growth Fund. The Independent Trustees further reviewed the changes (if any) of the management fees to the Funds compared to the weighted average fee rate for corresponding separate accounts in the last five years.

In considering the comparative fee data, the Board reviewed information reflecting the services the Advisor provided to the Funds compared to those provided to each other type of client. The Independent Trustees considered, among other things, that the different levels of services provided to the other types of clients, the differences in investment strategies and the differences in regulatory requirements all contribute to the variations in the fee schedules. The Independent Trustees noted that, in general, the Advisor seeks to charge higher fees to clients that require

 

 

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Supplemental Information (continued)

 

a higher degree of service and recognized the breadth of services the Advisor provided to the Funds when it is principally responsible for all aspects of operating the Funds. While the Independent Trustees recognized that some services the Advisor provides to the Funds and other clients may be similar, such as security selection, research and trading, the Independent Trustees acknowledged the myriad of additional services required to support the operations of the Funds as summarized above. Such services included, among other things, certain administrative services, third party oversight, fund governance services, shareholder communications, tax administration and compliance and regulatory services. Further, while the Advisor may provide portfolio management services to both the Funds and other clients, the Independent Trustees noted the level of services, expertise and resources required may differ significantly between the Funds and other clients due to differences in investment strategies and parameters (such as the ability to invest in foreign securities or restricted securities). Aside from the services provided, the Independent Trustees also recognized the entrepreneurial, reputational and regulatory risk the Advisor incurs in managing the Funds. The Board determined that the varying levels of fees were justified given, among other things, the inherent differences in the products and level of services provided to the Funds versus other clients, the differing regulatory requirements and the entrepreneurial, reputational, and regulatory risks incurred in sponsoring and advising the Funds.

With respect to the Sub-Advisor of the U.S. Treasury Fund, the Independent Trustees, as noted above, had reviewed the sub-advisory fee rate paid to the Sub-Advisor compared to the Sub-Advisor’s pricing schedule for portfolio management services for other clients. The Independent Trustees noted that the fee rate paid to the Sub-Advisor for its services was in line with its respective pricing schedule. In addition, in their review of the Sub-Advisor’s fee, the Independent Trustees recognized that the Advisor paid out of its own resources the Sub-Advisor’s fee and given that the Sub-Advisor is unaffiliated with the Advisor, the sub-advisory fee rate was the result of arms-length negotiations. As noted, the Board considered the sub-advisory fee to be acceptable in light of the nature, extent and quality of services provided.

 

3.

Profitability of the Fund Advisors

In conjunction with their review of fees, the Independent Trustees reviewed information reflecting the Advisor’s financial condition. The Independent Trustees reviewed the consolidated financial statements of WA Holdings, Inc. (the parent of the Advisor) and its subsidiary (the Advisor) for the years ended December 31, 2018 and 2017. The Independent Trustees considered the factors contributing to the revenue and expense changes.

The Independent Trustees also reviewed the profitability information for the Advisor derived from its relationship with each Fund for the calendar year ended December 31, 2018 on an actual and adjusted basis. The Independent Trustees evaluated, among other things, the Advisor’s revenues, expenses and net income (pre-tax and after-tax) and the net profit margins (pre-tax and after-tax). The Independent Trustees

also reviewed the level of profitability realized by the Advisor including and excluding distribution expenses incurred by the Advisor from its own resources.

In its evaluation of profitability, the Independent Trustees reviewed the Advisor’s methodology used to allocate revenue and expenses for the purposes of calculating profitability per Fund. The Independent Trustees also recognized the difficulty in calculating profitability at the individual Fund level given that other reasonable allocation methodologies could be employed and lead to significantly different results. Further, the Independent Trustees recognized that employee compensation was the primary expense for the Advisor and as a privately held S corporation owned by employees, the Advisor’s level of profitability could be influenced, in part, by paying employees through compensation expense as opposed to dividends as shareholders. As a result, the Independent Trustees also reviewed the Advisor’s profitability data for 2018 with certain adjustments to the compensation expense to assist in the comparability of the Advisor’s profitability to certain industry peers. In this regard, the Independent Trustees received and reviewed comparative profitability data which included, among other things, the revenues, expenses and profit margin (pre-tax) of certain other public advisory firms in the industry which the Advisor considered to resemble its business model compared to the profitability data of the Advisor on an actual and compensation expense adjusted basis. The Trustees, however, recognized the inherent limitations of the comparative data of other publicly traded peers given that the calculation of profitability is rather subjective and numerous factors (such as types of funds, business mix, cost of capital, methodology to allocate expenses and other factors) can have a significant impact on the results. Based on the information presented and recognizing the above limitations, the Independent Trustees noted that the Advisor’s profitability (with and without the compensation adjustment) appeared reasonable when compared to the peer group of unaffiliated advisors. In addition to the comparative data, the Independent Trustees also considered in assessing profitability any indirect benefits (such as soft dollars) that the Advisor or Sub-Advisor received that were directly attributable to the management of the applicable Funds as discussed in further detail below. Based on its review, the Board was satisfied that the Advisor’s level of profitability from its relationship with each Fund was not unreasonable in light of the services provided.

In addition to the Advisor’s profitability, the Independent Trustees reviewed information reflecting the financial condition of the Sub-Advisor. Although profitability on a per account level was not available, the Trustees reviewed the Sub-Advisor’s financial statements for the years ended December 31, 2018 and 2017. Based on its review, including the Sub-Advisor’s fee schedule and the fact that the sub-advisory fee was established through arm’s length negotiations, the Board concluded that the Sub-Advisor’s profitability from its relationship with the U.S. Treasury Fund was not unreasonable.

 

 

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D.   ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE

With respect to economies of scale, the Board considered information provided by the Advisor regarding the possible existence of economies of scale as a Fund’s assets grow and whether the Funds have appropriately benefited from such economies of scale. In its review, the Independent Trustees recognized that economies of scale are difficult to assess or quantify, particularly on a Fund-by-Fund basis, and certain expenses may not decline with a rise in assets. The Independent Trustees further considered that economies of scale may be shared in various ways including breakpoints in the management fee schedule, fee waivers and/or expense limitations, or pricing of Funds at scale at inception. The Independent Trustees noted that the Advisor’s management fee schedule does not contain breakpoints. However, the Independent Trustees recognized that many of the Funds have capacity constraints, particularly those investing primarily in small and micro-cap companies. In light of these constraints, the Advisor has periodically closed certain Funds to new investments to preserve the integrity of the respective Fund’s investment strategy and protect its performance which may not be able to be achieved at higher asset levels. While this practice may limit asset growth and thereby preclude certain economies of scale from being achieved, the Independent Trustees recognized the benefit of protecting performance for existing shareholders and maintaining assets at a level that the Advisor can effectively manage. The Independent Trustees further considered that the Advisor foregoes potential revenues that it may have earned on higher asset levels when it closes Funds to new investments. With respect to Funds without capacity constraints, the Independent Trustees recognized that breakpoints would be beneficial if the Fund’s assets were large enough to meet the breakpoint and noted the Advisor’s position that such Funds were not at asset levels that would benefit from breakpoints in the fee schedule. The Independent Trustees further considered that shareholders would benefit from the temporary expense limitation agreements that limit the overall net expense ratios on the respective classes of the Funds and which may be considered another means for sharing economies of scale.

Considering the factors above, the Independent Trustees concluded the absence of breakpoints in the management fee was acceptable and that any economies of scale that exist are adequately reflected in the Advisor’s fee structure.

E. INDIRECT BENEFITS

The Independent Trustees received and considered information regarding indirect benefits the Advisor and Sub-Advisor may receive as a result of their relationship with the respective Fund(s). In this regard, with the exception of the U.S. Treasury Fund, the Independent Trustees recognized that the Advisor received benefits from soft dollar arrangements whereby the Advisor used a portion of the brokerage commissions paid by the Funds to acquire research that may be useful to the Advisor in managing the Funds and other clients. The Independent Trustees recognized that the Advisor’s profitability would be lower if it paid for such research with its own revenues. With respect to the Sub-Advisor, the Independent Trustees recognized that

the Sub-Advisor had not participated in soft dollar arrangements with respect to the U.S. Treasury Fund’s portfolio transactions. The Independent Trustees further considered the reputational and/or marketing benefits the Advisor and Sub-Advisor may receive as a result of their association with the Funds. The Independent Trustees took these indirect benefits into account when accessing the level of advisory fees paid to the Advisor and sub-advisory fee to the Sub-Advisor and concluded that the indirect benefits received were reasonable.

 

F.   ANNUAL APPROVAL OF ADVISORY AND SUB-ADVISORY AGREEMENTS

The Independent Trustees did not identify any single factor discussed previously as all-important or controlling. The Board, including a majority of Independent Trustees, concluded that the terms of the Advisory Agreement for each Fund and the Sub-Advisory Agreement with the Sub-Advisor on behalf of the U.S. Treasury Fund were fair and reasonable, that the Advisor’s and Sub-Advisor’s fees were reasonable in light of the services provided to each respective Fund, and that the Advisory Agreement should be approved on behalf of each Fund and the Sub-Advisory Agreement should be approved on behalf of the U.S. Treasury Fund.

 

II.

Board Considerations for the renewal of Advisory Agreements of the Wasatch Global Select Fund and Wasatch International Select Fund

At a meeting held on February 12, 2019 (the “February Meeting”), the Board of the Trust, including the Independent Trustees, unanimously approved the Advisory and Service Contract (each a “New Fund Advisory Agreement” and collectively, the “New Fund Advisory Agreements”) between the Trust Wasatch Global Investors, Inc. (i.e., the Advisor) on behalf of the Wasatch Global Select Fund (the “Global Select Fund”) and Wasatch International Select Fund (the “International Select Fund”), each a series of the Trust (the Global Select Fund and the International Select Fund are each a “New Fund”).

In connection with the evaluation of the New Fund Advisory Agreement on behalf of each New Fund, the Independent Trustees received materials and other information, in adequate time for careful review in advance of the February Meeting, which outlined, among other things:

  The terms and conditions of the New Fund Advisory Agreements, including the nature, extent and quality of services provided to each New Fund by the Advisor.
  The organization of the Advisor, including the experience of persons who will manage each New Fund.
  Certain performance-related information (as described below).
  The proposed management fees of the Advisor, including comparisons of such fees with the management fees of comparable, unaffiliated funds prepared by an independent third party.
  The projected expenses of each New Fund, including comparisons with the expense ratios of comparable, unaffiliated funds compiled by Broadridge Financial Solutions, Inc. (i.e., Broadridge), an independent provider of investment company data.
 

 

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Supplemental Information (continued)

 

  The profitability of the Advisor for advisory services.
  The soft dollar practices of the Advisor.

During the previous day and earlier at the February Meeting, the Independent Trustees also met privately with their legal counsel to, among other things, consider the proposed New Funds and review the Board’s duties under the Investment Company Act of 1940, the general principles of state law in reviewing and approving advisory contracts, the standards used by courts in determining whether investment company boards of directors have fulfilled their duties, factors to be considered in voting on advisory contracts and an advisor’s fiduciary duty with respect to advisory agreements and compensation. With this background, the Independent Trustees considered the approval of the New Fund Advisory Agreements for each New Fund.

As outlined in more detail below, the Independent Trustees considered all factors they believed relevant with respect to each New Fund, including the following: (a) the nature, extent and quality of the services to be provided by the Advisor; (b) the investment performance of the Advisor (as described below); (c) the advisory fees and costs of the services to be provided and profits estimated to be realized by the Advisor and its affiliates; (d) the extent to which economies of scale may be realized as a New Fund grows; and (e) whether fee levels reflect any such economies of scale.

A. NATURE, EXTENT AND QUALITY OF SERVICES

The Independent Trustees considered the nature, extent and quality of services to be provided by the Advisor, including portfolio management services and administrative services, to the New Funds. Given that the Advisor already serves as advisor to other Wasatch Funds overseen by the Independent Trustees, the Board is familiar with and has a good understanding of the organization, operation, personnel and services of the Advisor. As the Independent Trustees meet regularly throughout the year to oversee the Wasatch Funds, the Independent Trustees have also relied upon their knowledge from their meetings and any other interactions throughout the years with the Advisor in evaluating the proposed New Fund Advisory Agreements.

At the February Meeting and/or at prior meetings, the Independent Trustees reviewed materials outlining, among other things, the Advisor’s organization and business; the types of services that the Advisor provides to the Wasatch Funds and is expected to provide to the New Funds; the experience and tenure of the portfolio managers for the New Funds; the Advisor’s research and trading capabilities; and the Advisor’s investment approach and philosophy. In addition to portfolio management services, the Independent Trustees recognized that the Wasatch Funds, including the New Funds, operate in a highly regulated industry and as such, considered the comprehensive set of administrative and non-advisory services the Advisor provides to manage and operate the funds (in addition to those provided by third parties). As illustrative, these services included, but are not limited to, service provider oversight services, Board support and administration, shareholder communications, fund regulatory and other administration services and compliance services. In addition to the services to be provided by the Advisor, the

Independent Trustees considered the various costs and entrepreneurial, reputational and regulatory risks the Advisor incurs in launching and managing the New Funds in a highly regulated industry.

Based on their review, the Independent Trustees concluded that, overall, the nature, extent and quality of services expected to be provided to each New Fund under the New Fund Advisory Agreements were satisfactory.

B. INVESTMENT PERFORMANCE

Each New Fund had not commenced operations and, therefore, does not have its own performance history. The Independent Trustees, however, reviewed certain historical performance information related to certain proprietary accounts managed in the same styles as those proposed for the New Funds. In addition, the Independent Trustees are familiar with the performance records of other Wasatch funds advised by the Advisor.

C. FEES, EXPENSES AND PROFITABILITY

In evaluating the proposed management fees and expenses that the New Funds were expected to bear, the Independent Trustees considered, among other things, each New Fund’s proposed management fee and expected expense ratio in absolute terms and as compared with the fees and expenses of a peer group of comparable unaffiliated funds provided by an independent third party. The Independent Trustees reviewed, among other things, the contractual management fee rate, the estimated expense ratios of each class of the New Funds assuming different levels of assets under management, and the expense limitation expected to be provided by the Advisor on behalf of each class of each New Fund. The Independent Trustees also reviewed the contractual management fee, the net management fee (i.e., the management fee after taking into account expense reimbursements and/or fee waivers, if any), and the net total expense ratio of each class of each New Fund in relation to those of a comparable universe of funds (i.e., the Broadridge Expense Universe) and to a more focused subset of comparable funds (i.e., the Broadridge Expense Group) established by Broadridge. The Board observed that with respect to the Global Select Fund, the proposed contractual management fee rate was below the median of the Broadridge Expense Group for the Investor Class and the Institutional Class shares and the Fund’s estimated net expense ratio was below the median of its Broadridge Expense Group for the Institutional Class shares but slightly higher (within 5 basis points) for the Investor Class shares. With respect to the International Select Fund, the proposed contractual management fee rate was below the median of the Broadridge Expense Group for the Investor Class and Institutional Class shares and the estimated net expense ratio was below the median of its Broadridge Expense Group for Institutional Class shares but above the median for its Investor Class shares.

In addition to the foregoing fee and expense data, the Board considered the various factors that the Advisor considers in proposing a management fee level for a respective fund, including, among other things, the potential value of the service (such as the experience of the management team), the competitive marketplace (such as the uniqueness of the fund

 

 

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and the fees of competitor funds) and the economics to the Advisor (such as, the costs to provide advisory services to the particular fund and the existence of any capacity constraints of the fund which may reduce the potential for revenues to the Advisor). In this regard, the Board is aware of the research-intensive approach followed by the Advisor and the related costs incurred of such approach. The Board further considered the Advisor’s contractual commitment to limit certain operating expenses of each of the classes of the New Funds to the benefit of shareholders and the rationale for the level of these expense caps. In addition, at the February Meeting and/or at prior meetings, the Board reviewed information regarding the fee rates that the Advisor assesses for certain other types of clients and the types of services provided to these other clients, including separately managed accounts, model accounts, collective investment trusts and certain domestic and foreign funds outside the Wasatch family of funds. The Independent Trustees recognized that the variation in fee rates between funds and other types of clients are generally due to, among other things, the extensive regulatory requirements associated with operating registered investment companies and the differences in investment parameters and strategies between the investment companies and the clients. The Independent Trustees, however, noted that the Advisor represented that it did not manage other funds or separately managed accounts in the same style as either of the New Funds as of the date of the February Meeting.

Based on their review, the Independent Board Members determined that each New Fund’s management fee to the Advisor was reasonable in light of the nature, extent and quality of services to be provided to the respective New Fund.

D. PROFITABILITY

In conjunction with its review of fees, at the February Meeting and/or at prior meetings, the Independent Trustees have considered the profitability of the Advisor for its advisory activities to the Wasatch Funds. The Independent Trustees reviewed the Advisor’s profitability margin for 2017 and 2018. In considering profitability, the Independent Trustees have recognized the difficulty and subjective nature of determining profitability which may be affected by numerous factors, including the allocation of expenses. In addition to reviewing the Advisor’s profitability, the Trustees also reviewed at the February Meeting or prior meetings the Advisor’s relative profitability compared to publicly available information concerning unaffiliated publicly traded investment managers. However, the Independent Trustees recognized the difficulties in comparing the profitability of various advisors given that, among other things, many of these managers are much larger than the Advisor, have different lines of business, may employ different expense allocations and charges, the profitability derived from individual funds or product lines is not generally publicly available and the profitability information of managers that is available may not be representative of the industry. The Independent Trustees also noted that the Advisor is privately held and is taxed as a Subchapter S corporation, thus certain expenses had to be attributed and/or estimated. The Independent Trustees also noted with respect to the New Funds, the costs of launching the New Funds and as a result of

their small asset base in early years, the Advisor anticipated reimbursing the New Funds for costs incurred in excess of the proposed expense caps. Based on their review, the Trustees were satisfied that the Advisor’s level of profitability was not unreasonable in light of the services to be provided.

E. ECONOMIES OF SCALE

The Independent Trustees considered whether the New Funds could be expected to benefit from any economies of scale. In reviewing compensation, the Independent Trustees noted that, similar to other Wasatch Funds the proposed advisory fee schedule for each New Fund did not contain breakpoints that reduce the fee rate on assets above specified levels. The Independent Trustees recognized that breakpoints may be one way for the benefits of any economies of scale to be shared with investors. In their review, the Independent Trustees recognized that economies of scale are difficult to assess or quantify, particularly on a fund-by-fund basis. The Independent Trustees observed that economies of scale generally occur as assets grow. However, the Trustees considered that the New Funds had not commenced operations and will have small asset bases in the beginning and as a result, the Advisor generally must reimburse the New Funds in excess of their expense limits until they have gained sufficient assets to be self-sustaining. Considering the above, the Independent Trustees concluded that the absence of breakpoints in each New Fund’s advisory fee schedule was acceptable and that the economies that may exist as assets under management increase are adequately reflected in the Advisor’s fee structure.

F. INDIRECT BENEFITS

In evaluating fees, the Independent Trustees also considered any indirect benefits or profits the Advisor or its affiliates may receive as a result of its relationship with each New Fund. In this regard, the Independent Trustees recognized that the Advisor may receive benefits from soft dollar arrangements whereby the Advisor may use a portion of the brokerage commissions paid by the New Funds to acquire research that may be useful to the Advisor in managing the New Funds, the other Wasatch Funds other clients. The Independent Trustees have reviewed at the February Meeting and/or prior meetings information concerning the Advisor’s soft dollar arrangements, including its policies for allocating brokerage commissions in exchange for brokerage and research services. In light of their experience, the Independent Trustees are familiar with the Advisor’s soft dollar arrangements and recognize that the Advisor’s profitability may be lower if the Advisor was required to pay for this research with hard dollars.

G. CONCLUSION

The Independent Trustees did not identify any single factor discussed previously as all-important or controlling. The Independent Trustees concluded that the terms of the New Fund Advisory Agreements were fair and reasonable, that the Advisor’s fees are reasonable in light of the services expected to be provided to each New Fund, and that the New Fund Advisory Agreements should be approved.

 

 

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Service Providers

 

INVESTMENT ADVISOR

Wasatch Advisors, Inc.

505 Wakara Way, 3rd Floor

Salt Lake City, UT 84108

SUB-ADVISOR FOR THE WASATCH-HOISINGTON U.S. TREASURY FUND

Hoisington Investment Management Co.

6836 Bee Caves Road

Building 2, Suite 100

Austin, TX 78746

ADMINISTRATOR AND FUND ACCOUNTANT

State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, MO 64105

DISTRIBUTOR

ALPS Distributors, Inc.

1290 Broadway, Suite 1100

Denver, CO 80203

TRANSFER AGENT

UMB Fund Services, Inc.

235 West Galena Street

Milwaukee, WI 53212

CUSTODIAN

State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, MO 64105

LEGAL COUNSEL TO WASATCH FUNDS AND INDEPENDENT TRUSTEES

Chapman and Cutler, LLP

111 West Monroe Street

Chicago, IL 60603

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

1100 Walnut Street, Suite 1300

Kansas City, MO 64106

 
CONTACT WASATCH  

 

 

 

TELEPHONE

800.551.1700

M - F, 7:00 a.m. to 7:00 p.m. Central Time

Automated Line, 24 Hours

U.S. MAIL

Wasatch Funds

P.O. Box 2172

Milwaukee, WI 53201-2172

OVERNIGHT DELIVERY

Wasatch Funds

235 West Galena Street

Milwaukee, WI 53212

ONLINE

wasatchglobal.com

shareholderservice@wasatchfunds.com

 

 

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LOGO

WASATCHGLOBAL . COM ACTIVE MANAGEMENT FOR INEFFICIENT MARKETS SMALL CAP MICRO CAP INTERNATIONAL EMERGING MARKETS FRONTIER MARKETS GLOBAL


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Item 2.

Code of Ethics.

Not required.

 

Item 3.

Audit Committee Financial Expert.

Not required.

 

Item 4.

Principal Accountant Fees and Services.

Not required.

 

Item 5.

Audit Committee of Listed Registrants.

Not applicable.

 

Item 6.

Investments.

 

(a)

Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form N-CSR.

 

(b)

Not applicable.

 

Item 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

 

Item 8.

Portfolio Managers of Closed-End Investment Companies.

Not applicable.

 

Item 9.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

 

Item 10.

Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees, where those changes were implemented after the Registrant last provided disclosure in response to this item.

 

Item 11.

Controls and Procedures.

 

(a)

The Registrant’s principal executive and principal financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934).

 

(b)

There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 12.

Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.


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(a)

Not applicable.

 

(b)

Not applicable.

 

Item 13.

Exhibits.

 

(a)(1)

Not required.

 

(a)(2)

The certifications required by Rule 30a-2(a) of the 1940 Act are attached hereto.

 

(a)(3)

Not applicable.

 

(a)(4)

Not applicable.

 

(b)

The certifications required by Rule 30a-2(b) of the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

WASATCH FUNDS TRUST
By:   /s/ Eric S. Bergeson
  Eric S. Bergeson
  President (principal executive officer) of Wasatch Funds Trust
Date:     May 29, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

By:   /s/ Eric S. Bergeson
  Eric S. Bergeson
  President (principal executive officer) of Wasatch Funds Trust
Date:     May 29, 2020

 

By:   /s/ Michael K. Yeates
  Michael K. Yeates
  Treasurer (principal financial officer) of Wasatch Funds Trust
Date:     May 29, 2020