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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)
150 Social Hall Avenue
4th Floor
Salt Lake City, Utah 84111
(Address of principal executive offices)(Zip code)
| (Name and Address of Agent for Service) | Copy to: | |
Samuel S. Stewart, Jr. Wasatch Funds Trust 150 Social Hall Avenue, 4th Floor Salt Lake City, Utah 84111 | 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, 2011
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Item 1: Report to Shareholders.
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Semi-Annual Report &
Quarterly Commentaries
March 31, 2011
EQUITY FUNDS BOND FUNDS (SUB-ADVISED)
Wasatch Core Growth Fund® Wasatch Emerging Markets Small Cap Fund™ Wasatch Global Opportunities Fund™ Wasatch Global Science & Technology Fund® Wasatch Heritage Growth Fund® Wasatch International Growth Fund® Wasatch International Opportunities Fund® Wasatch Large Cap Value Fund™ Formerly Wasatch-1st Source Income Equity Fund Wasatch Long/Short Fund™ Formerly Wasatch-1st Source Long/Short Fund Wasatch Micro Cap Fund® Wasatch Micro Cap Value Fund® Wasatch Small Cap Growth Fund® Wasatch Small Cap Value Fund® Wasatch Strategic Income Fund® Wasatch Ultra Growth Fund® Wasatch-1st Source Income Fund™ Wasatch-Hoisington U.S. Treasury Fund®
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Thank you for your investment in Wasatch Funds. We hope this report will be helpful to you in exploring and understanding each of the funds within the Wasatch family. We have included the latest quarterly manager’s comments in order to provide you with the most current thoughts from each of our lead portfolio managers. Quarterly commentaries can always be found on our website www.WasatchFunds.com approximately three weeks after the end of each calendar quarter.
Who we are
We are a research driven, employee owned firm managing no-load mutual funds. Located at the foot of the Wasatch Mountains in Salt Lake City, Utah, we are far away from Wall Street and its herd mentality. Our portfolio managers are independent, yet collaborative, thinkers who bring substantial experience to their funds.
Where we came from
Founded in 1975, by Dr. Sam Stewart, we initially focused on growth investing in small companies. Using a fundamental, bottom up research method we looked for market inefficiencies relative to the long term growth potential of lesser known companies. Investing in small, harder to find companies required a disciplined, rigorous and independent research process. Over time, Wasatch added more research professionals and began applying the same successful process to investing in micro, value, international, and larger companies.
What we believe
We believe in common sense investing, involving deep due diligence, cross-team collaboration, and commitment to discipline, as we follow our central investment philosophy of:
“Earnings Growth Drives Stock Prices Over the Long Term”
What we do
We utilize a proven and repeatable process to uncover interesting companies. We look deeper to find and understand each company. We leverage portfolio managers from across the firm to fully vet each investment idea. We stay true to our investment style. We close funds before they get too large in order to protect shareholders. We seek to deliver above-average returns over the long-term, and we strive in every way to earn the trust of our shareholders.
What makes Wasatch different?
Deeper – We use an intensely thorough process to fully understand each investment. Disciplined – We stick to our process and investment style regardless of market fads.
Collaborative – We work across portfolios to leverage valuable experience and research insights.
Independent – We do our own research to avoid getting caught in the herd.
If you have any questions please visit our website www.WasatchFunds.com or feel free to call us Monday through Friday 7:00 a.m – 7:00 p.m Central Time at 800.551.1700.
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. An investor should consider investment objectives, risks, charges and expenses carefully before investing.
To obtain a prospectus containing this and other information visit www.wasatchfunds.com or call 800.551.1700. Please read the prospectuscarefully before investing. Wasatch Funds are distributed by ALPS Distributors, Inc.
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Wasatch Funds
Salt Lake City, Utah
www.wasatchfunds.com
800.551.1700
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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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| LETTERTO SHAREHOLDERS —“THE BULL CHARGES ON” | ||
Samuel S. Stewart, Jr. PhD, CFA President of | DEAR FELLOW SHAREHOLDERS:
THE ECONOMY
Wall Street is primarily focused on short-term questions such as: Will the Federal Reserve (Fed) raise interest rates? Will the decline in weekly jobless claims continue? Will monthly housing starts improve? These economic indicators are interesting data points, but they often lead to more market volatility than is warranted by the underlying economy. Meanwhile, the long-term direction of the economy and the stock market will be determined by larger forces — forces many investors seem to be currently ignoring. Burdensome government debt, regulations that put U.S. companies at a competitive disadvantage, political ineffectiveness, educational morass, and other significant systemic challenges remain a concern for the long-term health of our economy. Looking at the short-term data trends, the good news is that despite the stubbornly sticky 8.8% unemployment rate many economic signals are showing increasing strength.1 The bad news is the recent appearance of rapidly increasing commodity prices, which could lead to inflation and dampen the recovery. There has been |
a quick change in sentiment from just a few months ago when the talk on the street was about the possibility of deflation. I didn’t consider deflation to be a significant threat, but even I have been surprised by how quickly inflationary pressures have appeared in what is still a muddling economy.
Rising demand from recovering economies has unfortunately combined with bad weather and turmoil in the Middle East and North Africa to drive oil, wheat, cotton, cocoa and other commodity prices up significantly. Oil prices have now returned to the level which caused real concern shortly before the 2008 financial crisis. As an input to so much of the world economy, sustained high oil prices will have noticeably negative impact on the global economic recovery.
Meanwhile, the Fed, now forced to be concerned about early signs of potential inflation, has begun selling some of their mortgage-backed securities. These sales counteract the originally intended stimulative impact of the Fed’s quantitative easing program (QE2) to some degree. The challenge for the Fed is the delicate balance required to stimulate the economy without triggering significant inflation while using only the very blunt tools at its disposal. Given the economic complexity, and the seemingly continuous stream of unexpected external events, I would consider a muddling slow-growth recovery to be a successful outcome.
Globally, several rapidly growing emerging countries, like China and India, have been tapping on the brakes of their economies in an effort to keep increasing inflationary pressures in check. The combination of slowing emerging economies and recovering developed economies brings us closer to equilibrium in growth throughout the world, but emerging countries still appear well positioned to outpace developed economies over the next several years.
THE MARKET
I’ve mentioned previously that the market rebounded more quickly from the 2008 financial and economic crisis than I believe the economic recovery warranted. The market’s strength continues to leave me a little concerned about whether investors truly learned the lesson from 2008 about preservation of capital. The market’s lack of sustained reaction to the events during the first quarter of 2011 again show underlying investor optimism that may be overdone. Recent events led to increased market volatility, but in the end the U.S. stock market still posted its strongest first quarter gain in 12 years, with the S&P 500 up nearly 6% for the quarter.
Following the tragic earthquake and tsunami in Japan, the Japanese market saw a drastic two-day sell off of roughly 16%. Even the Japanese market bounced back quickly, recovering roughly half of the losses within days while the extent of the tragedy was still unfolding. At quarter end, the Nikkei 225 Index remained below its March peak, but higher than it was just five months ago.
The ouster of Tunisian President Ben Ali, followed by the uprising in Egypt and the unrest that spread quickly through the Middle East and North Africa is another significant human story. It is also having economic impact throughout the world with escalating oil prices. The Egyptian stock market closed for nearly two months as events unfolded. When the market finally re-opened in March it dropped about 9% on the first day, but by the end of the quarter it too had rebounded, ending down just 3% since re-opening.2
Closer to home, U.S. companies continue to reflect signs of an improving business environment. Growth expectations for 2011 are looking brighter but still remain fairly modest. Given the challenges facing the longer-term health of the U.S economy, I think the domestic stock market is unlikely to continue advancing at the pace we saw in the first quarter, despite underlying investor optimism.
WASATCH PERFORMANCE
Lipper recently recognized two of the Wasatch international mutual funds, the Wasatch International Opportunities Fund and the Wasatch International Growth Fund, with the prestigious Lipper Fund Award for being the #1 International Small/Mid-Cap Growth Funds based on consistent (risk-adjusted) return for the 5-year and 3-year periods, respectively, as of 12/31/10 (out of 67 and 75 funds). This is another testament to the strength of our international team, now a decade old, and the opportunity we believe exists to apply the Wasatch investment approach abroad.
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| MARCH 31, 2011 | ||
Coming off what was a pretty strong year for Wasatch in 2010, our funds in general had a slightly sluggish first quarter relative to the market (see our website www.wasatchfunds.com for the latest performance details). The broad market move toward higher quality companies last year has made it harder for us to find interesting undervalued opportunities. We feel confident in the quality and prospects of our portfolio companies, but given the current economic uncertainty we are generally willing to give up a little upside potential in order to maintain the quality of our portfolios. Rotating into lower quality companies in search of better values at times like these has historically proven to be a mistake.
As I write this letter, we are completing final preparations for a new fund that we plan to launch around the end of April. The Wasatch Emerging India Fund (WAINX) will focus on Indian firms, with a bias toward smaller companies. This is a narrowly focused fund because we believe India offers a uniquely interesting investment opportunity for the next decade and beyond.
India is the fourth largest economy in the world and growing rapidly.3 More importantly, it is home to many small, less-followed companies with compelling business opportunities, high quality managements and strong financials. And with a vibrant initial public offering (IPO) market, investment opportunities in India continue to expand.
Few U.S. investors are focused specifically on India. Instead, India typically gets included as part of an Emerging Market Fund allocation, where Indian investments are likely relegated to large cap companies. We believe, in typical Wasatch fashion, that the best opportunity in India is to get off the beaten path and find the unknown smaller companies that we expect will be the beneficiaries of rapid projected growth in India’s middle class.
Wasatch has been investing in India for more than 10 years because India is far ahead of many emerging markets in infrastructure quality and regulatory oversight. Focusing on a single country will add a different element of risk to this Fund, but India is a country in which we have great long-term confidence.
We believe the Fund’s April launch may end up being timely because the Indian market is off roughly 11% from its recent highs (based on the MSCI India IMI Index); but of course our real interest is where we believe this market can go over the next decade, not the next year. I was in India last month and was again taken aback by the abundant signs of development and the growing middle class wherever I went.
As with each new Wasatch fund, we are excited both for the prospects of the Emerging India Fund itself and for the insights we expect it will deliver across our research team as we dig even deeper into this market. We look forward to bringing the Emerging India Fund into the Wasatch family. You will be able to get more details about this new fund on our website if you’re interested.
Thank you for the opportunity to manage your assets.
Sincerely,
Samuel S. Stewart, Jr.
President of Wasatch Funds
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.
The Lipper Fund Awards are awarded annually to the highest Lipper Leader for Consistent Return (risk-adjusted) value within each eligible fund classification over a three, five, or 10-year period. Lipper award designations are not intended to constitute investment advice or predict future results, and Lipper does not guarantee the accuracy of this information. Past performance is not indicative of future results.
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. QE2 is the nickname for the second round of quantitative easing announced by Federal Reserve (Fed) chairman Ben Bernanke in November 2010 whereby the Fed would buy billions of dollars in long-term U.S. Treasury securities in an effort to jump start the sluggish economic recovery.
An initial public offering (IPO) is a company’s first sale of stock to the public.
The Nikkei 225 is the average price of 225 stocks traded on the first section of the Tokyo Stock Exchange. It is a frequent measure of common stock total return performance in Japan. The MSCI India IMI Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of large, mid, and small cap companies in India. You cannot invest in these or any indices.
1Source: U.S. Bureau of Labor and Statistics.
2Source: FactSet.
3Source: CIA World Factbook 2010.
CFA® is a trademark owned by CFA Institute.
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| WASATCH CORE GROWTH FUND (WGROX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Core Growth Fund is managed by a team of Wasatch portfolio managers led by JB Taylor and Paul Lambert.
JB Taylor Portfolio Manager |
Paul Lambert Portfolio Manager | OVERVIEW
The Wasatch Core Growth Fund gained 6.66% in the first three months of 2011. It was a strong quarter for U.S. equities, with the Russell 2000 Index and S&P 500 Index rising 7.94% and |
5.92%, respectively. The stock market’s performance was particularly impressive given some of the turmoil around the globe and continued economic headwinds here at home.
We attribute the market’s resilience to the massive amount of liquidity provided by “QE2,” the second round of quantitative easing since the credit crisis. The Federal Reserve (Fed) signaled its intent to embark on QE2 late last August and began purchasing Treasuries in November. The anticipation and subsequent reality of the Fed’s actions have fueled the market’s gains over the past seven months. Therefore, the same trends that emerged in the latter part of 2010 have continued into 2011. Appetites for risk remain elevated, and high technology and commodities are still two of the hottest areas of the market. Energy stocks have received an additional boost from the spike in oil prices caused by unrest in the Middle East and North Africa.
Without much participation in high technology and commodity-oriented sectors, it was difficult for the Fund to keep up with the small cap market this quarter. The lofty price-to-earnings (P/E) multiples and fast-changing dynamics in technology make many tech stocks less appropriate for our style. We also tend to be underinvested in energy and materials companies since their prospects generally depend on volatile commodity prices. Our focus is on capturing stable, consistent earnings growth at a reasonable price. We follow this discipline at all times, regardless of what hot sectors may be driving the market.
Solid stock picking in several areas, including consumer staples and industrials, helped mitigate our relatively low exposure to the market’s high-flying sectors. We own interesting companies that are doing well independently of broad economic trends, and whose stocks have risen on the heels of good earnings announcements. We have seen particularly strong price appreciation from some of our largest positions — positions we have held, and had conviction in, for a long time.
DETAILSOFTHE QUARTER
One of our best-performing stocks this quarter was Herbalife Ltd., a global marketer of nutritional products that is a top 10 holding in the Fund. The company sells its products through a network of independent distributors who earn income from their own sales, as well as the sales
of distributors they recruit. Once these multi-level models gain momentum, they tend to keep growing at high rates for a long period of time. We think Herbalife is a classic example of this, and the company is seeing growth in all of its major markets.
Copart, Inc. and Aaron’s, Inc. were also top contributors. Copart, a provider of auto salvage auction services, completed a successful tender offer in January, buying back almost 15% of its shares. Aaron’s, a rent-to-own retailer, is benefiting from the shrinking availability of credit for lower-income consumers. Banks and credit card companies have tightened lending standards in the wake of the financial crisis, leaving this demographic with fewer financing options.
Life Time Fitness, Inc., a chain of fitness centers, had a weak quarter despite reporting solid operating results. Like many consumer names, Life Time was impacted by concerns that rising gas prices would cut into discretionary spending. We also think it was giving back some of its upward momentum after having done so well off the market bottom. We feel Life Time offers a best-in-class member experience at an affordable price, and it is still one of our largest positions.
Other stocks that lagged included City Union Bank Ltd. and Axis Bank Ltd., both Indian banks. India was one of the worst performing equity markets this quarter, mainly due to worries about rising inflation. The weakness in the market, combined with the lingering effects of corporate governance issues in the banking industry, weighed on City Union and Axis. Nonetheless, we remain enthusiastic about these two names — and the other Indian banks we own — given their underlying fundamental strength. These companies have grown rapidly over the past decade and are expected to continue to grow at high rates in the coming years. Current and future holdings are subject to risk.
OUTLOOK
If the Fed keeps intervening, and there is a QE3 after QE2, optimism and appetite for risk could remain high. This scenario would be challenging for us, since P/Es would probably continue to skyrocket in the same hot sectors, namely high technology and commodities. We would participate in the rally but struggle to keep up with the market, similar to this quarter.
We think a more likely scenario is that optimism fades as the headwinds facing the economy continue to blow. The overall tax burden is rising, news on the housing market remains bleak, and gasoline prices are the highest they have been since 2008. In this type of environment, we believe real growth will be hard to come by, and that the growth of our portfolio companies will shine.
Thank you for the opportunity to manage your assets.
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| WASATCH CORE GROWTH FUND (WGROX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Core Growth | 22.54% | 26.77% | 2.35% | 7.68% | ||||||||||||
Russell 2000® Index | 25.48% | 25.79% | 3.35% | 7.87% | ||||||||||||
Russell 2000® Growth Index | 27.93% | 31.04% | 4.34% | 6.44% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Core Growth Fund are 1.41%. 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. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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 | |||
| Copart, Inc. | 5.6% | |||
| Herbalife Ltd. | 3.5% | |||
| MEDNAX, Inc. | 3.4% | |||
| Dollar Financial Corp. | 3.2% | |||
| IDEX Corp. | 3.0% | |||
| Company | % of Net Assets | |||
| LKQ Corp. | 3.0% | |||
| Alliance Data Systems Corp. | 3.0% | |||
| Life Time Fitness, Inc. | 2.8% | |||
| MSCI, Inc., Class A | 2.6% | |||
| Emeritus Corp. | 2.4% | |||
| ** | As of March 31, 2011, there were 56 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| ††Also | includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. The Russell 2000 Growth Index is an unmanaged total return index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in these or any indices.
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| WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Emerging Markets Small Cap Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley and Laura Geritz.
Roger D. Edgley, CFA Portfolio Manager |
Laura Geritz, CFA Portfolio Manager | OVERVIEW
The first quarter saw emerging markets correct after a strong year in 2010. The Wasatch Emerging Markets Small Cap Fund returned -3.50% for the quarter and underperformed the |
MSCI Emerging Markets Small Cap Index, which returned -2.72%. Small cap stocks in emerging markets underperformed large caps due to the stronger performance of large global sectors, namely energy, materials and information technology. Assets generally flowed out of emerging markets back into developed markets, including the U.S. The MSCI Emerging Markets Index gained 2.05%.
DETAILSOFTHE QUARTER
In the first quarter, “value” markets (Japan and Southern Europe) performed well after a difficult 2010 and “growth markets” (emerging) corrected. Tumultuous political events in the Middle East dominated the news and seriously affected sentiment regarding emerging markets. For other markets, like China and India, concerns about the ability of central banks to tackle inflation, especially food inflation, were a source of market anxiety.
Our investments in Egypt were affected by closure of the stock market and investment flows out of the country as protests against the Mubarak government continued, including Egyptian Financial Group-Hermes Holding, Nationale Societe Generale Bank, and Paints & Chemicals Industries. Our exposure to Egypt was about 1.5% at quarter-end. We are still constructive on our Egyptian financials, as we see investment picking up after the first quarter.
The previously underperforming Indian and Indonesian markets started to level out toward the end of the quarter as concerns about inflation and in India, the budget and elections, started to subside. We are overweight in these markets and continue to hold an optimistic long-term view. We expect broad growth across the small companies we own in India and Indonesia — from banks, to retailers, to toll-road operators.
It is worth mentioning changes in one country we just visited. Korea may soon “graduate” from emerging to developed status, as its per capita gross domestic product (GDP) is approaching that of southern Europe. Korea is one of the most export driven countries in the world, globally competitive in shipbuilding, autos (Kia and Hyundai have been growing rapidly in the U.S.), semiconductors, consumer electronics, and biotechnology.
Korea is the classic Asian success story where consumer spending was suppressed for many years, as the focus was on long-term investment in export-oriented industries often
competing head on against Japan. For many years, the Korean “chaebol” (South Korean form of global business conglomerate) were singularly focused on building market share at the expense of returns on capital. With the 1997 Asian financial crisis came tight capital and a banking system that had to become more rational. Since then, Korean companies have changed their views on profitability, returns on capital, and the role of bank lending. Today, we think there are many more interesting, leading edge small companies in Korea with experienced, educated managements compared to larger companies. As large Korean companies have extended their global reach, there has been a sea change in the role of small Korean companies. They support their larger customers, the chaebol, in flexible and innovative ways.
We believe Korea’s smaller companies are underappreciated for their quality and diversity, and that they are more outward-looking and growth-oriented than many small Japanese companies we know.
One of the strongest aspects of the Korean story is the education system. In Organisation for Economic Co-Operation and Development (OECD) studies in 2009, Korea ranks among the top 10 educational systems in the world. In terms of low high school drop out rates, Korea ranks in the top five countries, tied with Finland. Like Japan, Korea is applying its knowledge and determination to areas like electronics and communications and relentlessly improving its manufacturing abilities. However, Korea is more aggressive about growing in emerging markets.
Korean companies are well placed in emerging markets. They have worked hard to create product quality comparable to Japanese standards yet sell at price points significantly below Japanese levels, a function of their lower costs in Korea and the higher level of manufacturing they do outside of Korea. In markets like China, Korean companies are seeing significant growth. LG, Samsung and Kia have become global brand names and have overtaken well-known Japanese names like Panasonic and Sony. They are now the innovators.
Following are some of the companies we own in Korea. iMarketKorea is a web-based procurement business set up by Samsung to lower buying costs for companies. Partron is a manufacturer and designer of components for smartphones building a customer base across Asia. Daum Communications is an Internet portal designed for use by smartphones with a significant search market in Korea. One of the common features of our Korean companies is the level of technology employed and the investment in research and development. Current and future holdings are subject to risk.
OUTLOOK
In conclusion, the first quarter was marked by huge world events, which will have long term consequences. The correction has allowed us opportunities to find new investments as capital flowed out of emerging markets. We believe the Fund is well positioned and will continue to reward a long-term view to investment.
We are grateful for your ongoing support as shareholders.
CFA® is a trademark owned by CFA Institute.
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| WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 10/1/07 | |||||||||||
Emerging Markets Small Cap | 4.65% | 26.54% | N/A | 6.60% | ||||||||||
MSCI Emerging Markets Small Cap Index | 4.98% | 17.74% | N/A | 2.49% | ||||||||||
MSCI Emerging Markets Index | 9.53% | 18.46% | N/A | 1.33% | ||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Small Cap Fund are 2.39%. The Net Expenses are 1.95%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. 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 | |||
| Mr Price Group Ltd. (South Africa) | 2.2% | |||
| PT Holcim Indonesia Tbk (Indonesia) | 2.1% | |||
| Colgate-Palmolive India Ltd. (India) | 1.9% | |||
| Mahindra & Mahindra Financial Services Ltd. (India) | 1.9% | |||
| Clicks Group Ltd. (South Africa) | 1.8% | |||
| Company | % of Net Assets | |||
| PT Harum Energy Tbk (Indonesia) | 1.5% | |||
| Bata India Ltd. (India) | 1.4% | |||
| Dah Chong Hong Holdings Ltd. (Hong Kong) | 1.4% | |||
| Restoque Comercio e Confeccoes de Roupas S.A. (Brazil) | 1.4% | |||
| Tegma Gestao Logistica (Brazil) | 1.4% | |||
| ** | As of March 31, 2011, there were 116 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: October 1, 2007. The MSCI Emerging Markets and Small Cap indices are free float-adjusted market capitalization indices that are designed to measure equity market performance in the global emerging markets. You cannot invest directly in these or any indices.
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| WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Global Opportunities Fund is managed by a team of Wasatch portfolio managers led by Robert Gardiner and Blake Walker.
Robert Gardiner, CFA Portfolio Manager |
Blake H. Walker Portfolio Manager | OVERVIEW
The Wasatch Global Opportunities Fund started the year on a positive note, gaining 5.83% in the first quarter. It was also a good quarter for the world’s equity markets. Stocks in |
most countries advanced on top of strong performance in the second half of 2010.
The Fund outperformed the benchmark indices, despite several headwinds. The U.S. stock market was one of the world’s strongest markets, and we were underweight in the United States. Emerging markets were relatively weak, and we were overweight in emerging markets. Lastly, the Fund is weighted toward the “smallest of the small caps,” including micro caps, because we believe this is where the greatest market inefficiencies exist. Our emphasis on very small stocks worked against us relative to the small cap indices, since larger names in the indices had the best returns. Given these challenges, we were pleased the Fund outperformed.
DETAILSOFTHE QUARTER
The Japanese market was weak due to the earthquake and ensuing nuclear disaster, but our investments in Japan gained more than 8%. Several stocks that are benefiting from the global migration from traditional retailing to Internet retailing did particularly well, including Start Today. GCA Savvian Group, a firm that advises on mergers and acquisitions, was another top performer on an improved outlook for transaction volumes. We think the quality of our holdings also had a lot to do with the strong results in Japan. When investing in any country, we focus on companies with healthy profits and solid balance sheets, and these types of names tend to be resilient in volatile times.
We continued to do well in Western Europe, led by strength in Germany. Wirecard was the top contributor in the portfolio, and Gerry Weber International was not far behind. Wirecard is one of the leading processors of online payment transactions in Europe. Like Start Today, it is capitalizing on the trend toward Internet shopping. The company has started expanding around the world and recently announced partnerships with two major payment-processing firms in China. Gerry Weber, a women’s apparel wholesaler and retailer, is posting good sales growth and is accelerating its growth throughout Europe based on the popularity of its concept.
South Korea was a bright spot in emerging markets, driven by strong returns from our information technology companies. One of our best-performing stocks was Koh
Young Technology, a manufacturer of equipment that inspects printed circuit boards (PCB) for defects. The company is benefiting from a rebound in spending on inspection equipment following a period of underinvestment. In addition, PCB boards are becoming increasingly miniaturized, so less inspection can be done manually. Technology was not only a winning sector in South Korea, it was the top sector in the Fund. Technology companies are doing well generally, and our holdings across the software and services, semiconductor, and hardware and equipment industries produced substantial gains.
In the United States, the Fund’s underweight in energy and materials companies negatively impacted performance. With the rising price of oil and other commodities, these were strong sectors of the market. Our position in Orexigen Therapeutics, also detracted from performance. Orexigen is a U.S. biotechnology firm whose stock tumbled after the Food and Drug Administration (FDA) rejected its lead drug candidate. Because of the FDA’s decision, there are no steady sources of revenue on the horizon, and we sold our position.
During the quarter, we visited India and South Africa and added some interesting new names to the Fund as a result of those trips. For example, we bought shares of Clicks Group, which we like to think of as the Walgreens of South Africa. Clicks is the dominant health and beauty retailer in the country, and we believe it still has lots of headroom to grow. It is benefiting from the rise of South Africa’s middle class and is also taking market share from “mom and pop” stores. The consolidation of fragmented industries with many small players into organized industries with a few key players is a trend we are seeing across emerging markets. Companies that are capitalizing on this trend are attractive to us, because their growth prospects are not heavily dependent on macroeconomic factors. Current and future holdings are subject to risk.
OUTLOOK
Investors have had a lot of negative news to digest, including the nuclear crisis in Japan, inflation in emerging countries and political unrest in North Africa and the Middle East. We believe the markets have been surprisingly resilient given what is happening around the world.
In this period of so many uncertainties, it is business as usual at Wasatch. As always, we are not spending much time thinking about broad trends in the economy or the geopolitical climate. Instead, we remain focused on what we do best, which is in-depth fundamental research and bottom-up stock picking. The fundamentals of our portfolio companies look solid and have continued to improve coming out of the recession. Valuations are not what they were two years ago at the bottom of the market. However, we are still finding good companies that seem reasonably valued.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
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| WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 11/17/08 | |||||||||||
Global Opportunities | 18.18% | 25.78% | N/A | 44.81% | ||||||||||
MSCI AC World Small Cap Index | 19.28% | 23.80% | N/A | 38.26% | ||||||||||
S&P Global SmallCap Index | 18.47% | 23.53% | N/A | 35.97% | ||||||||||
MSCI AC World IMI Index | 14.29% | 15.32% | N/A | 25.68% | ||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Opportunities Fund are 1.88%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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. Being non-diversified, the Fund can invest a larger portion of its assets in the securities 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 | |||
| Melexis N.V. (Belgium) | 1.7% | |||
| Wirecard AG (Germany) | 1.7% | |||
| O2Micro International Ltd. ADR (China) | 1.2% | |||
| Dollar Tree, Inc. | 1.2% | |||
| Resources Connection, Inc. | 1.1% | |||
| Company | % of Net Assets | |||
| Ted Baker plc (United Kingdom) | 1.1% | |||
| OPNET Technologies, Inc. | 1.0% | |||
| Power Integrations, Inc. | 0.9% | |||
| RPS Group plc (United Kingdom) | 0.9% | |||
| TTM Technologies, Inc. | 0.9% | |||
| ** | As of March 31, 2011, there were 342 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: November 17, 2008. The MSCI AC 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, including securities of U.S. issuers, with market capitalizations between US $200 million and $1.5 billion. The S&P Global SmallCap Index is an unmanaged index and includes reinvestment of all dividends of issuers located across developed and emerging markets, including the United States, that fall in the bottom 15% of their country’s market cap range. The MSCI AC World IMI Index (All Country World Investable Markets Index) is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of large, mid, and small cap companies across developed and emerging markets throughout the world. You cannot invest directly in these or any indices.
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| WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Global Science & Technology Fund is managed by a team of Wasatch portfolio managers led by Sam Stewart.
Samuel S. Stewart, Jr. PhD, CFA Portfolio Manager | OVERVIEW
We are pleased to report that the first quarter was a productive time for the Fund. First, we built on our strong recent performance by generating a return of 6.60%, bringing the Fund’s one-year gain to 24.61%. Second, we announced that the Fund would change its name to the Wasatch World Innovators Fund on April 1, 2011. The Fund will continue to look for growing and innovative companies throughout the world, but its restriction to the science and technology sectors will be |
removed so that we may more freely invest across the entire market. The Fund will continue to have significant investments in science and technology stocks, since these are fertile areas for the types of companies in which we seek to invest.
We are enthusiastic about the new name. Not only does it have a nice ring to it, but it also better represents our mission. This is not, after all, an exchange-traded fund that mindlessly tracks a technology index. Instead, it is a classic Wasatch Fund that strives to find the best growth companies in the world, with a specific focus on companies whose innovative business models are reshaping the industries in which they compete.
A key aspect of our approach is that we will look for investments in all economic sectors, since innovation is not exclusive to technology and health care companies. As an example, we recently added two business services companies — Japanese trucking broker Transcom Co. Ltd. and commercial printing broker InnerWorkings Inc. In both cases, the companies entered huge, fragmented markets where suppliers offer commoditized services but win business on relationships as much as price. These companies use technology to aggregate information about suppliers’ equipment availability and pricing to create a real-time marketplace that customers can use to procure the fastest, highest quality service at the lowest price. Both companies are taking market share and dramatically outpacing industry growth rates.
The retail business is as old as human history, and yet the sector is also home to a wealth of innovative companies. For example, Amazon.com, Inc. has a unique model for selling, warehousing, and delivering its products, which allows it to offer the longest list of products at or near the best price available. While Amazon is probably the most well known example, dozens of online retailers are indelibly transforming their businesses. Included in this group are three stocks we added to the portfolio in recent months: ASOS plc (United Kingdom) and Yoox S.p.A. (Italy), which offer fashion and luxury clothing, respectively; zooplus AG, a European retailer of pet supplies; and Ctrip.com International, Ltd., a dominant Chinese hotel and airline ticket site.
DETAILSOFTHE QUARTER
The largest contributor to our first quarter performance was our top holding Wirecard AG, an online payment enabler based near Munich, Germany. The company announced partnerships with the leading payment solutions companies in China — Alipay and China Union Pay. These companies are similar to the U.S. companies Paypal and Visa, respectively. This is fantastic news for Wirecard’s existing customers, and it should attract many new customers by allowing merchants to sell directly to Chinese consumers. Despite the 31% surge in Wirecard shares in the March quarter, we continue to think that investors are underestimating the growth potential of the company’s online transaction business.
Valeant Pharmaceuticals International, Inc. was another significant contributor to our first quarter performance. The company focuses on off-patent medications, especially in emerging markets. Investors responded positively to the news that Valeant’s recent acquisition of Biovail is exceeding all expectations. Valeant has built a solid track record of acquiring underperforming products and revitalizing them through its outstanding distribution network.
Programmable logic device (PLD) chip companies Altera Corp. and Xilinx, Inc. also made a substantial contribution to performance. Since PLD chips are programmable, they offer companies the ability to get their electronic products to market rapidly and with the flexibility to make last-minute alterations. Both companies reported stronger-than-expected earnings during the quarter, fueling a rise in their stock prices.
In a period of strong market performance, few of our investments declined and no individual stocks significantly detracted from performance. That said, Tessera Technologies, Inc. — a company that provides packaging designs to chipmakers — was the largest detractor. While Tessera holds some valuable patents, we decided to move on since the company’s basic business offers unattractive growth. Further, its new businesses aren’t sufficiently unique for Tessera to be termed an “innovator.”
Not surprisingly, several of our Japanese holdings registered declines as investors tried to assess the impact of the catastrophe that hit the country. We took the opportunity to add to our favorite companies there, including MonotaRO Co. Ltd., Wacom Co. Ltd. and Transcom, with the view that while Japan’s growth may stall for a quarter or two, these well-run growth companies will ultimately recover. Current and future holdings are subject to risk.
OUTLOOK
It is our core view that no matter what macroeconomic concerns may be driving the performance of the major indices, there will always be innovative businesses that can buck the trends by growing or at least taking market share during bad years. We are confident that finding these disruptive companies — including those in the early stages of high growth as well as the stalwarts with household names and long leads on the competition — has the potential to be a successful long-term investment strategy.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
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| WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Global Science & Technology | 17.22% | 24.61% | 4.01% | 9.06% | ||||||||||||
MSCI AC World IMI Index | 14.29% | 15.32% | 3.29% | 5.89% | ||||||||||||
Russell 2000 Technology Index | 33.24% | 45.11% | 7.47% | 5.01% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Science & Technology Fund are 2.05%. The Net Expenses are 1.96%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
Investing in concentrated funds will be more volatile and loss of principal could be greater than investing in 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 | |||
| Wirecard AG (Germany) | 3.1% | |||
| Google, Inc., Class A | 3.1% | |||
| Apple, Inc. | 2.8% | |||
| CVS Group plc (United Kingdom) | 2.7% | |||
| Sartorius Stedim Biotech (France) | 2.5% | |||
| Company | % of Net Assets | |||
| Teva Pharmaceutical Industries Ltd. ADR (Israel) | 2.4% | |||
| Altera Corp. | 2.3% | |||
| Alliance Data Systems Corp. | 2.3% | |||
| Xilinx, Inc. | 2.3% | |||
| DiaSorin S.p.A. (Italy) | 2.2% | |||
| ** | As of March 31, 2011, there were 102 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Fund has changed its primary benchmark from the Russell 2000 Technology Index to the MSCI AC World IMI Index. The Advisor believes the MSCI AC World IMI Index more accurately reflects the securities in which the Fund will invest. The MSCI AC World IMI Index (All Country World Investable Markets Index) is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of large, mid, and small cap companies across developed and emerging markets throughout the world. The Russell 2000 Technology Index is a capitalization-weighted index of companies that serve the electronics and computer industries or that manufacture products based on the latest applied science. You cannot invest directly in these or any indices.
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| WASATCH HERITAGE GROWTH FUND (WAHGX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Heritage Growth Fund is managed by a team of Wasatch portfolio managers led by Chris Bowen and Ryan Snow.
Chris Bowen Portfolio Manager |
Ryan Snow Portfolio Manager | OVERVIEW
The new year stumbled out of the gate with an abundance of global turbulence. Soaring oil prices, political turmoil in the Middle East and North Africa and the tragic earthquake and |
nuclear disaster in Japan were among the headline events.
Although the equity markets were spooked by the events in March, they recovered quickly and delivered solid gains for the quarter. The Fund’s primary benchmark, the Russell Midcap Growth Index, gained 7.85% during the first quarter.
In contrast to the commotion around the world, it was a relatively quiet quarter for the Heritage Growth Fund with few changes to our holdings. The Fund posted a return of 6.88%. We are pleased with the composition of the Fund and the way our companies have performed fundamentally.
Riskier and momentum-driven stocks, with high price-to-earnings (P/E) ratios, continued to exhibit strength as 2011 began. However, as the quarter wore on, higher quality stocks akin to those we feel are held in the Fund began to gain ground.
We’ve increased the projected growth rate of the portfolio over the past year while reducing the number of holdings. To do this we sold some good companies that were not projected to grow quickly enough to merit a spot in the portfolio any longer. We feel that the remaining companies not only have attractive growth rates, but also are valued in such a way that there is plenty of potential for future stock price expansion.
DETAILSOFTHE QUARTER
One of the criteria we use in our stock evaluation process is making an assessment of a company’s valuation in the market place. It really is the art of what we try to do because, although there are important metrics that can help guide the process, each individual company has to be analyzed on its own merits and within the context of its realm in the economy.
For example, during the quarter we sold F5 Networks, Inc. an equipment and software developer that provides technology for optimizing information technology resources. We’ve owned the company for over four years, yet we felt the valuation got stretched during the quarter, bringing with it considerable risk. In our opinion, the price got to a point beyond the company’s ability to withstand elevated expectations. As exceptional a company as we think F5 is, after it reported what would normally be considered stellar growth for most firms, the stock price was pummeled as reported earnings failed to meet the lofty expectations of
investors. We sold our position prior to the market’s negative reaction, which pulled the stock price back over 37% from its high.
We are excited about the prospects of one of our newest holdings, LKQ Corp. The company is a dominant player in the unconsolidated industry of refurbished and recycled auto parts. With most of its supplies going toward automobile accident repairs, LKQ Corp.’s business is relatively agnostic to the economic environment. We believe the real opportunity will be in its ability to gain market share (currently only 13% in the collision space) as it brings professional management, and a nationwide distribution network, to an industry long dominated by mom-and-pop shops.
Altera Corp. continued its recent strong performance during the quarter and was the Fund’s top-contributing stock. Although we have trimmed our position occasionally to control the weight, the semiconductor maker has sustained an attractive valuation and healthy growth prospects.
With strong overall returns, the Fund didn’t have any significant decliners during the quarter. Expeditors International of Washington, Inc. and NII Holdings, Inc. pulled back slightly and detracted from the Fund’s performance.
Expeditors, a logistical services provider for moving freight, increased earnings 40% during the fourth quarter, but the stock sold off after earnings decelerated following back-to-back 60% growth quarters. We view the market’s reaction as a short-term blip and maintain our investment thesis.
NII Holdings, a wireless communications provider in Latin America, scaled back due to market concerns over a large investment the company is making to gain 3G access. With industry-leading average revenue per user, a unique competitive advantage in the push-to-talk commercial market and now a widespread 3G network, we believe the company continues to be well-positioned. Current and future holdings are subject to risk.
OUTLOOK
Economic difficulties such as high unemployment and government debt burdens continue to linger while indications of inflation present a new challenge. Also, with the market having doubled off its lows, we are taking a cautious approach to managing the Fund. We would be surprised if the strong returns we’ve recently witnessed continue. For that reason, our discipline and positioning as investors is critical.
Our success in finding modestly valued companies that are still able to meet our growth hurdle rate of 15% maintains our optimism about the Fund’s current composition and its prospects for the future. While this strategy may slightly trail the market during frothy environments, we believe it delivers significant potential for downside protection during pullbacks when investors turn to higher quality companies for stability.
Thank you for the opportunity to manage your assets.
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| WASATCH HERITAGE GROWTH FUND (WAHGX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 6/18/04 | |||||||||||||
Heritage Growth | 18.50% | 23.22% | 4.38% | 6.05% | ||||||||||||
Russell Midcap® Growth Index | 22.97% | 26.60% | 4.93% | 8.20% | ||||||||||||
S&P 500 Index | 17.31% | 15.65% | 2.62% | 4.47% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Heritage Growth Fund are 1.10%. The Net Expenses are 0.95%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
Investing in mid cap funds will be more volatile and loss of principal could be greater than investing in large cap funds. Equity investing involves risks including potential loss of the principal amount invested.
| *Not | annualized. |
TOP TEN EQUITY HOLDINGS**
| Company | % of Net Assets | |||
| Copart, Inc. | 4.6% | |||
| Altera Corp. | 4.4% | |||
| IHS, Inc., Class A | 4.2% | |||
| Cognizant Technology Solutions Corp., Class A | 4.0% | |||
| Ross Stores, Inc. | 4.0% | |||
| Company | % of Net Assets | |||
| St. Jude Medical, Inc. | 3.9% | |||
| Tim Hortons, Inc. (Canada) | 3.9% | |||
| Amphenol Corp., Class A | 3.8% | |||
| Microchip Technology, Inc. | 3.5% | |||
| Linear Technology Corp. | 3.3% | |||
| ** | As of March 31, 2011, there were 42 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: June 18, 2004. The Russell Midcap Growth Index measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in the Russell Midcap Growth Index are also members of the Russell 1000 Growth Index. The S&P 500 Index represents 500 of the United States’ largest stocks from a broad variety of industries. The index is unmanaged, and a common measure of common stock total return performance. You cannot invest directly in these or any indices.
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| WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch International Growth Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley.
Roger D. Edgley, CFA Portfolio Manager | OVERVIEW
The Wasatch International Growth Fund returned 1.68% in the first quarter, and slightly trailed the MSCI AC World Ex-U.S.A. Small Cap Index, which was up 1.86%. At the end of 2010, we postulated that 2011 would be a hard year for navigating the markets, and indeed, this has been the case so far. We never could have foreseen all of the turmoil that unfolded in the Middle East and North Africa or the tragic |
earthquake that struck Japan. Curiously, investors are largely ignoring these events, and liquidity is controlling our destiny, pushing returns for many asset classes higher. The back half of the year could prove more difficult for growth, particularly in the developed markets, where comparisons may worsen, liquidity will likely slow, and austerity measures may crimp growth. It will continue to be a stock picker’s market.
DETAILSOFTHE QUARTER
A big positive driver in the quarter came from being both underweight in Japan and picking stocks that outperformed in that market. The Japanese market started the year on strong footing. Investors were projecting a recovery year for developed markets, driven by the belated impact of expansionary fiscal and monetary policy. This tactical optimism was benefiting Japan’s markets, and therefore hurting performance relative to our Index at the start of the year. While we have almost continuously held a negative view on Japan, it is our bottom up analysis of Japanese stocks that drives our underweight position.
We couldn’t have predicted the devastating events that unfolded in Japan. The team visited the country two weeks before the earthquake. We screened thousands of companies and visited a handful that made our initial cut based on quality and growth. From our bottom up work, we did not come back with the view that we should be more ambitious with our portfolio weight in Japan. One of our team members, Laura Geritz, co-portfolio manager of the Wasatch Emerging Markets Small Cap Fund, lived in the region of Japan most impacted by the earthquake. I’ve included some of her comments on the situation.
If you have seen pictures of the graveyard of white cars along the coast of Japan, this is very close to where I used to live. The inland and coastal region north of Tokyo is characterized by a number of large cities (relatively small though by Japanese standards), with a vast area of this plain dedicated to farming. Japan’s population is densely packed into the cities and along the coast, and the devastation to human life is unimaginable. However, the global economy is unlikely to be derailed by a disaster in the northern hinterlands of Japan.
We have been relatively unconcerned about the Fund’s holdings from an operational perspective. We primarily hold service companies headquartered in Tokyo where the damage has been fairly contained. Start Today, GMO Payment Gateway, Simplex Holdings, and Osaka Securities Exchange contributed positively to the Fund in the quarter.
In the long run, Japan will recover from the disaster, but I wonder about its economic recovery. As passionate students of Japan, we are hoping for a better outcome than what we’ve seen in the last 20 years, but with a downward spiraling fiscal situation, our expectations are low.
On a brighter note, we had solid success from our names in Korea, another country visited during the quarter, with positive contributions from OCI Materials, Hyundai Home Shopping Network, and Techno Semichem. Although technically an emerging economy, the team thinks Korea has many attributes of a developed nation — just with more opportunities for advanced growth.
China, once again, was our Achilles heel. We were underweight in this underperforming market, which was good, but our stock picks were not great. Both Ports Design and Yingde Gases contributed negatively to the Fund. China has too much capital flowing into the market. Although our companies benefit from the strong economic backdrop, they are hurt by an evolving and difficult competitive landscape. Ports Design and Yingde Gases have both been casualties in an increasingly challenging environment. It isn’t a case of horrible results, but simply a case of gradual erosion in returns on capital. Current and future holdings are subject to risk.
OUTLOOK
Year-to-date, the emerging market to developed market trade has dominated the markets. The transition from emerging markets to developed markets started late last year and was perpetuated by heavy cash flows out of emerging markets. This impacted performance, since the Fund is overweight in emerging markets relative to our Index. We hypothesized that this tactical movement of money would last until mid-summer. Then, investors would look at the developed world, particularly the U.S., and realize these markets face much more difficult economic comparisons, an eroding fiscal picture, and austerity measures that may impact growth.
No matter what direction asset allocation heads — to developed or emerging countries — we continue to focus on investing from the ground up. We are currently visiting companies in the United Kingdom and finding new and interesting ideas in this nation in spite of the difficult macro economic backdrop. We are also on our way to Chile, where we will visit companies that are operating in a more hospitable environment. Inflation remains a concern, but we believe we are broadly invested in high quality companies to help mitigate whatever potential economic black swans this year’s more difficult environment tosses our way.
Thank you for your investment.
CFA® is a trademark owned by CFA Institute.
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| WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 6/28/02 | |||||||||||||
International Growth | 10.02% | 30.85% | 5.03% | 12.74% | ||||||||||||
MSCI AC World Ex-U.S.A. Small Cap Index | 13.74% | 21.09% | 5.40% | 14.19% | ||||||||||||
MSCI World Ex-U.S.A. Small Cap Index | 16.57% | 22.00% | 2.35% | 12.37% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Growth Fund are 1.61%. 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. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. 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 | |||
| Rotork plc (United Kingdom) | 3.0% | |||
| Campbell Brothers Ltd. (Australia) | 2.9% | |||
| Mahindra & Mahindra Financial Services Ltd. (India) | 2.8% | |||
| Wirecard AG (Germany) | 2.3% | |||
| Yoox S.p.A. (Italy) | 2.1% | |||
| Company | % of Net Assets | |||
| PT Semen Gresik (Persero) Tbk (Indonesia) | 1.7% | |||
| Gruh Finance Ltd. (India) | 1.7% | |||
| First Pacific Co. Ltd. (Hong Kong) | 1.7% | |||
| Abcam plc (United Kingdom) | 1.6% | |||
| PT Indocement Tunggal Prakarsa Tbk (Indonesia) | 1.6% | |||
| ** | As of March 31, 2011, there were 92 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: June 28, 2002. The MSCI AC World Ex-U.S.A. 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 World Ex-U.S.A. Small Cap Index is an unmanaged index that measures the performance of stocks with market capitalizations between US $200 million and $1.5 billion across 22 developed markets, excluding the United States. You cannot invest directly in these or any indices.
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| WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch International Opportunities Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley and Blake Walker.
Roger D. Edgley, CFA Portfolio Manager |
Blake H. Walker Portfolio Manager | OVERVIEW
The U.S. equity market continued to outpace most international markets in the first quarter of 2011, continuing a trend from late 2010. Over the period, there was also a significant move |
away from emerging markets and into developed markets. This reflects in part a correction after those markets’ strong run, as well as investors’ desire for potentially less volatile holdings in the face of uncertainty about rising inflation and regional unrest.
The Wasatch International Opportunities Fund returned 2.27% during the year’s first quarter, slightly ahead of its benchmark, the MSCI AC World Ex-U.S.A. Small Cap Index, which returned 1.86%. The strength of our individual stock selections helped us to keep pace with the benchmark, although a significant cash position hampered our performance somewhat.
DETAILSOFTHE QUARTER
Although our strongest performer for the quarter came from Germany, its success was due to much more than the market trends favoring established markets. Wirecard, a provider of credit-card processing and electronic payment systems, continued to benefit from the broad secular trend toward more transactions taking place online. Wirecard’s performance during the quarter was sparked by its recent licensing agreement with China UnionPay,* which operates a payment-processing network and issues credit cards through its member banks. This agreement gives Wirecard desirable exposure to Asia’s rapid consumer growth.
Bucking the broader trend favoring developed markets, our next four top contributors for the period came from Korea. We were bullish on this market going into the period. Inflation fears and high valuations drove many investors away from China, but we saw Korea as a less-expensive way to participate in the region’s rapid growth while avoiding some of China’s current pitfalls. Daum Communications, Korea’s leading website operator, continued to take share from sleepy competitors in a market with high levels of Internet usage. Our number three contributor, Koh Young Technology, a maker of 3D inspection and measurement systems used in electronics manufacturing, continues to benefit from wider use of inspection equipment and pent-up demand resulting from years of manufacturers’ underinvestment. Koh Young has emerged as a global leader in its industry, thanks to a savvy management team that finds ways to create better products at a lower price.
We view a holding like Koh Young as a great example of how our global investment approach helps us to identify great companies before they’re on other investors’ radar. Over time, we’ve visited — and sometimes invested in — far-flung competitors found in Germany, Israel, Taiwan, and the U.S. This has allowed us to gain a thorough understanding of the industry and the competition the company faces — all of which helped us to discern Koh Young’s distinctive strengths early on. If we were limited to a single region of the globe, or didn’t engage ourselves in hands-on, on-site research, it would have been easy for a company like this to elude us. We believe Koh Young remains reasonably valued, and for that matter, we’re still finding attractive valuations throughout the country, though Korea is beginning to draw more attention from global investors. A potential source of concern is its sometimes-volatile neighbor North Korea.
Our greatest detractor from performance during the quarter was Middle Eastern shipper Aramex. The company has naturally been affected by the political turmoil throughout the region. Further, even though it may be located in an oil-rich part of the world, Aramex is not immune to the negative impact of higher fuel prices. We continue to believe that the company’s success in reducing dependence on lower-margin services and healthy balance sheet have positioned it well for a competitive global market.
Indian retailer and textile maker S. Kumars Nationwide also detracted from performance, suffering from a general equity selloff in that country. We visited the company during our trip to India earlier this year. While organized retail is still in its earlier stages there, we believe S. Kumars has positioned itself as a pioneer, ready to benefit as the nation’s rising consumer class continues to demand more, and better quality, branded clothing. Current and future holdings are subject to risk.
OUTLOOK
We believe our global approach to investing is well suited to the at times unsettled environment currently facing the world’s equity markets. Our focus on direct, fundamental research is aimed at identifying tomorrow’s leading companies wherever they may be found, before others discover them. It can help us find both the tortoises of an economy — companies that execute well on long-term growth strategies — as well as the hares — those that can rapidly adapt to and capitalize on changing technologies and markets.
Global travel and on-site visits will continue to be key components of our investment research, along with a healthy dose of the more mundane yet equally important work of scrutinizing balance sheets, industry reports, and other financial documents. We’ve made good progress on deploying the cash position that built up late last year, and will steadily put more of it to work as we identify opportunities to invest at entry points that leave room for healthy appreciation.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
| *As | of March 31, 2011, the Wasatch International Opportunities Fund did not own shares in China UnionPay. |
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| WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 1/27/05 | |||||||||||||
International Opportunities | 7.89% | 21.61% | 6.04% | 10.54% | ||||||||||||
MSCI AC World Ex-U.S.A. Small Cap Index | 13.74% | 21.09% | 5.40% | 9.70% | ||||||||||||
MSCI World Ex-U.S.A. Small Cap Index | 16.57% | 22.00% | 2.35% | 7.22% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Opportunities Fund are 2.62%. The Net Expenses are 2.26%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. 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 | |||
| Wirecard AG (Germany) | 2.8% | |||
| Tegma Gestao Logistica (Brazil) | 2.2% | |||
| Aramex PJSC (United Arab Emirates) | 1.9% | |||
| iMarketKorea, Inc. (Korea) | 1.6% | |||
| Daum Communications Corp. (Korea) | 1.5% | |||
| Company | % of Net Assets | |||
| Simplex Holdings, Inc. (Japan) | 1.5% | |||
| EPS Co. Ltd. (Japan) | 1.4% | |||
| Melexis N.V. (Belgium) | 1.3% | |||
| CST Mining Group Ltd. (Hong Kong) | 1.2% | |||
| Hy-Lok Corp. (Korea) | 1.1% | |||
| ** | As of March 31, 2011, there were 162 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: January 27, 2005. The Fund has changed its primary benchmark from the MSCI World Ex-U.S.A. Small Cap Index to the MSCI AC World Ex-U.S.A. Small Cap Index. The Advisor believes the MSCI AC World Ex-U.S.A. Small Cap Index more closely tracks the Fund’s foreign micro cap holdings. The MSCI AC World Ex-U.S.A. 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 World Ex-U.S.A. Small Cap Index is an unmanaged index that measures the performance of stocks with market capitalizations between US $200 million and $1.5 billion across 22 developed markets, excluding the United States. You cannot invest directly in these or any indices.
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WASATCH LARGE CAP VALUE FUND (FMIEX) — Management Discussion (formerly Wasatch-1st Source Income Equity Fund) | MARCH 31, 2011 | |
The Wasatch Large Cap Value Fund is managed by a team of Wasatch portfolio managers led by Ralph Shive and Michael Shinnick.
Ralph C. Shive, CFA Portfolio Manager |
Michael L. Shinnick Portfolio Manager | OVERVIEW
The Wasatch Large Cap Value Fund returned 6.24% for the first quarter of 2011, roughly in keeping with the 6.46% return of the Russell 1000 Value Index. The stock rally |
continued in the quarter, as we had expected given ongoing growth in corporate earnings. There was significant volatility along the way, driven in large part by political unrest in the Middle East and North Africa (MENA) and tragedy in Japan.
While Japan’s catastrophic earthquake and tsunami and ensuing nuclear crisis impacted markets over the quarter, we expect the crisis will be worked through over time without systemic implications for the global economy. We view developments in the MENA region as more likely to shift the opportunities and pitfalls for the longer-term investment environment. If social and political unrest in the region leads to an evolution toward greater democracy and sharing of wealth, the outcome could be positive for global growth. On the other hand, if countries involved descend into violent instability or radical regimes, the impact could be significantly negative, especially for the energy sector.
We held an overweight position in energy, and the Fund’s strongest performers were related to the energy sector, as oil prices continued to rise over the quarter. Stock selection within consumer discretionary was the biggest detractor from performance. The agricultural theme contributed significantly to the Fund’s performance.
We should note that while MENA turmoil boosted oil prices, overweighting the energy sector is a secular theme for us. We view developments in the region as driving market recognition of the tight supply/demand dynamics for oil, rather than being the occasion for a one-time spike in energy prices.
Additionally, a number of companies held in the Fund implemented dividend increases over the quarter, ranging from a 15% increase for Intel Corp. to 60% for Williams Cos., Inc. The prospect of publicly-traded companies displaying increased sensitivity to shareholders in the form of higher dividends has been a theme in our positioning for some time. A number of our holdings generated excess cash and we were glad to see more of it distributed to shareholders. This trend was especially helpful in an environment of near-zero interest rates.
DETAILSOFTHE QUARTER
Five of the Fund’s top contributors were related to the energy sector in one way or another. A couple of our portfolio companies benefited from strategic restructurings in order to garner intrinsic value. Marathon Oil Corp. announced plans to break into separate refining and exploration and production entities, news that was welcomed by investors. In a similar vein, Williams Cos. spun off its exploration and production operation from its pipeline business, news that was accompanied by a 60% dividend increase. We find the trend of restructuring as a way to unlock shareholder value encouraging and would not be surprised to see other portfolio companies follow suit.
We sold one-third of our position in stock exchange NYSE Euronext on the announcement that the firm was to combine with Deutsche Boerse AG.* We continue to monitor the position and the potential for additional, higher acquisition offers to emerge.
The leading detractor from relative performance was Canadian uranium miner Cameco Corp. After starting the quarter well on the back of a 42% dividend increase, Cameco dipped sharply in the wake of Japan’s nuclear problems. The company has a long-term supply contract with China, which may be reviewing its program of building nuclear reactors following events in Japan. We have traded around our position in Cameco in recent quarters, adding on weakness and trimming on strength. We are considering whether to add to the position after the most recent decline. Current and future holdings are subject to risk.
OUTLOOK
As we noted last quarter, most Wall Street forecasts for 2011 and 2012 had reached the point of anticipating something close to a normal business cycle. This is an assessment we viewed with some skepticism given the need to work through some 15 years’ lack of financial discipline and transparency around the globe. And in fact, in the first quarter of 2011 we saw some analysts begin to trim their growth targets, perhaps influenced by events in Japan, as well as ongoing fiscal distress in Europe and the contentious debate over measures to correct the U.S. budgetary imbalance. A risk we will be monitoring closely is the possibility of the Federal Reserve ending its program of bond purchases earlier than planned, a move that could lead to higher interest rates and diminish support for equities.
On the positive side, corporate earnings and cash flow remain strong across most sectors. In addition, mergers and acquisitions activity has been vibrant, and the environment for re-financing and leveraged transactions has improved. On balance, we expect to be fully invested, while rotating out of positions that we see as fully valued and into other, better opportunities. We own many stocks trading in the 9 to 12 P/E range with good dividends and the prospect of dividend increases. We believe the Fund is well positioned with the potential to provide positive returns as 2011 progresses.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute. |
| * | As of March 31, 2011, Wasatch Funds, Inc. was not invested in Deutsche Boerse AG. |
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| WASATCH LARGE CAP VALUE FUND (FMIEX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS** | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Large Cap Value* | 17.14% | 13.13% | 4.65% | 8.01% | ||||||||||||
Russell 1000® Value Index | 17.68% | 15.15% | 1.38% | 4.53% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Large Cap Value Fund are 1.13%. The Net Expenses are 1.10%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
Investments in value stocks can perform differently from the market as a whole and other types of stocks and can continue to be undervalued by the market for long periods of time. Loss of principal is a risk of investing.
| * | As of January 31, 2011, the Wasatch-1st Source Income Equity Fund changed its name to the Wasatch Large Cap Value Fund. |
| ** | Not annualized. |
TOP 10 EQUITY HOLDINGS†
| Company | % of Net Assets | |||
| Marathon Oil Corp. | 2.4% | |||
| ConocoPhillips | 2.2% | |||
| Exxon Mobil Corp. | 2.1% | |||
| JPMorgan Chase & Co. | 2.1% | |||
| Williams Cos., Inc. (The) | 1.9% | |||
| Company | % of Net Assets | |||
| Loews Corp. | 1.8% | |||
| Ensco plc ADR (United Kingdom) | 1.8% | |||
| Chevron Corp. | 1.8% | |||
| MetLife, Inc. | 1.8% | |||
| Parker Hannifin Corp. | 1.7% | |||
| † | As of March 31, 2011, there were 80 holdings in the Fund. 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††
| †† | Excludes securities sold short and options written, if any. |
| ‡ | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 1000 Value Index measures the performance of Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in these or any indices.
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WASATCH LONG/SHORT FUND (FMLSX) — Management Discussion (formerly Wasatch-1st Source Long/Short Fund) | MARCH 31, 2011 | |
The Wasatch Long/Short Fund is managed by a team of Wasatch portfolio managers led by Michael Shinnick and Ralph Shive.
Michael L. Shinnick Portfolio Manager |
Ralph C. Shive, CFA Portfolio Manager | OVERVIEW
In a positive quarter for stocks, the Fund outperformed the S&P 500 Index and the Citigroup 3-Mo. U.S. T-Bills Index. Strong U.S. equity market performance continued in the first |
quarter, driven mainly by growth in corporate earnings. There was significant volatility along the way, driven largely by political unrest in the Middle East and North Africa (MENA) and tragedy in Japan. Energy stocks benefited as developments in the MENA region increased market recognition of supply/demand dynamics.
The Fund participated fully in the strong quarter, and we believe without assuming unnecessary risk. The Fund benefited from sector overweights in energy, information technology, and materials, as well as good security selection. While our short positions in aggregate detracted from the Fund’s return, they only slightly constrained performance relative to the S&P 500. Covered call positions contributed positively and some short positions were closed with gains.
DETAILSOFTHE QUARTER
On the long side of the portfolio, the Fund was rewarded for strong security selection within information technology and industrials.
The Fund’s top contributor was a significant position in a turnaround at a cash-rich technology company, Silicon Graphics. Following deep due diligence on the company, we built a position in the stock beginning in late 2009. We believe management has done an excellent job in executing a return to profitable growth. Silicon Graphics appears well positioned to continue benefiting from the trends toward cloud and open architecture computing. We believed it was undervalued and the market is coming around to our point of view.
A long position from the industrials sector that contributed strongly was storage solutions provider Iron Mountain. Our thesis regarding the company’s ability to return cash to shareholders through better capital allocation was brought into sharper focus by an activist investor group working to highlight the increased cash flow inherent in the business model if managed for shareholder returns versus growth.
The Fund also benefited from a large overweight in the energy sector. Within energy, offshore driller Noble Corp. stood out. While we remain constructive on energy stocks, we have rotated out of some positions that we felt had become fully valued, including Alpha Natural Resources, Atwood Oceanics, Tidewater, Statoil and Fluor. We have been rotating into efficient North American producers. In
this vein, Devon Energy, CONSOL Energy and Range Resources provided strong quarterly returns.
Long positions that detracted significantly were again Best Buy and Cisco Systems. While both companies have experienced near-term top-line growth challenges, we feel they are high-quality operations with strong management and the ability to allocate capital to the benefit of shareholders. We believe these companies are attractively valued and added to both positions.
New positions included gold mining companies Newmont Mining and Yamana Gold. We believed both stocks were oversold during a pullback in gold prices late in the period and took the opportunity to initiate positions. We also initiated a position in women’s apparel retailer Chico’s. The Wasatch research team has been following Chico’s for some time and has owned the company in several different styles in the past. While Chico’s no longer carries a strong growth profile, we believe it is a solid company. Chico’s was attractively priced and benefited from multiple expansion over the period.
The Fund also substantially increased its positions in Loews Corp. and its subsidiary, insurer CNA Financial. Loews is an excellent capital allocator and our visits with management showed us signs of an underwriting turnaround in CNA’s core insurance business. Loews and CNA have been trading at discounts to their book value and we believe they carry favorable risk/reward profiles.
The Fund’s short positions in aggregate went up during the quarter, though not as much as the S&P 500. Short positions that were closed included Salesforce.com and miner Freeport-McMoRan Copper and Gold. Finally, covered call writing benefited performance as many stocks traded within a range during February and March, meaning that we were able to garner the incremental option income. Current and future holdings are subject to risk.
OUTLOOK
On balance, we are tending toward somewhat more defensive positioning. We expect the overall economic recovery to continue, which should be favorable for equities. That said, given the moderate rate of organic growth, we are increasingly concerned over the implications of the impending end of the Federal Reserve’s bond purchase program. In addition, questions over U.S. debt and the tough spending choices that will be required are likely to be a macro-level concern for the markets. Finally, higher food and energy costs may be a headwind for the U.S. economy and consumers in upcoming months. Accordingly, we have increased our short position to approximately 20%, with a focus on companies that will feel cost pressure from food and energy inputs.
On the long side, we remain focused on companies with strong business models, the ability to generate high levels of cash in a variety of growth environments, and the prospect of improving capital allocation through increased dividends and share buy backs.
As always, we will remain flexible in our views and prepared to make adjustments as necessary.
Thank you for the continued opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute. |
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| WASATCH LONG/SHORT FUND (FMLSX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS** | 1 YEAR | 5 YEARS | SINCE INCEPTION 8/1/03 | |||||||||||||
Long/Short* | 15.53% | 14.01% | 6.94% | 7.01% | ||||||||||||
S&P 500 Index | 17.31% | 15.65% | 2.62% | 5.99% | ||||||||||||
Citigroup U.S. Domestic 3-Month Treasury Bills Index | 0.07% | 0.15% | 2.10% | 2.11% | ||||||||||||
Data shows 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 www.wasatchfunds.com. 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Long/Short Fund are 1.71%. 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”). See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
The Fund makes short sales of securities which involve the risk that losses may exceed the original amount invested. Equity investing involves risks, including potential loss of the principal amount invested. Being non-diversified, the Fund can invest a larger portion of its assets in the securities 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.
| * | As of January 31, 2011, the Wasatch-1st Source Long/Short Fund changed its name to the Wasatch Long/Short Fund. |
| ** | Not annualized. |
TOP 10 EQUITY HOLDINGS†
| Company | % of Net Assets | |||
| Loews Corp. | 4.6% | |||
| CNA Financial Corp. | 4.3% | |||
| Devon Energy Corp. | 4.0% | |||
| Blue Coat Systems, Inc. | 3.6% | |||
| Wal-Mart Stores, Inc. | 3.1% | |||
| Company | % of Net Assets | |||
| Silicon Graphics International Corp. | 3.1% | |||
| Newmont Mining Corp. | 2.9% | |||
| Convergys Corp. | 2.8% | |||
| Noble Corp. | 2.8% | |||
| Iron Mountain, Inc. | 2.7% | |||
| † | As of March 31, 2011, there were 48 long and 38 short holdings in the Fund. 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††
| †† | Excludes securities sold short and options written, if any. |
| ‡ | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡‡Inception: August 1, 2003. The S&P 500 Index includes 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged but is a commonly used measure of common stock total return performance. The Citigroup U.S. Domestic 3-Month Treasury Bills Index tracks the performance of U.S. Treasury bills with a remaining maturity of three months. U.S. Treasury bills, which are short-term loans to the U.S. government, are full-faith-and-credit obligations of the U.S. Treasury and are generally regarded as being free of any risk of default. You cannot invest directly in these or any indices.
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| WASATCH MICRO CAP FUND (WMICX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Micro Cap Fund is managed by a team of Wasatch portfolio managers led by Daniel Chace.
Daniel Chace, CFA Portfolio Manager | OVERVIEW
The Wasatch Micro Cap Fund gained 6.58% in the first quarter. The Fund performed broadly in line with the Russell Microcap Index, which rose 6.80%. It was another good quarter for U.S. equities following two years of significant gains. The market advanced despite the earthquake in Japan, political unrest in the Middle East and North Africa, and only moderate improvement in the U.S. economy. We |
believe the gains were fueled by the massive amount of liquidity in the global financial system. The Federal Reserve has added nearly $500 billion to the U.S. economy over the past few months through purchases of Treasury securities, and short-term interest rates remain near zero. In addition, the Bank of Japan has been flooding its money markets with cash in an effort to stabilize the Japanese economy following the earthquake.
Thanks to the generally strong earnings of our companies, the Fund was able to keep pace with the buoyant micro cap market. The year-over-year earnings growth rate of our companies was higher than 25% in the most recent reporting quarter and better than we expected. Comparisons were still relatively easy, since earnings were below-trend a year ago when the economy was weaker. However, comparisons were not as easy as they had been in previous quarters, and investors recognized the strong operating performance of many of our companies.
DETAILSOFTHE QUARTER
The top contributors in the Fund were companies that reported substantial earnings growth and surprised Wall Street with the strength of the current quarter, forward guidance or both. They included IPG Photonics Corp., Interactive Intelligence, Inc. and Computer Programs and Systems, Inc. Each of these stocks gained more than 35%.
IPG Photonics makes fiber lasers that are used in a broad range of industrial applications. Fiber lasers are quickly taking market share from legacy lasers because of the advantages they offer, such as their higher-quality beams, smaller size and lower cost. IPG Photonics is the only major player in the fiber laser market, and we believe the company has a multi-year lead over potential competitors in terms of its technology and cost structure. The amount of operating leverage in the business has been much higher than expected, and margins and earnings are increasing at a rapid rate.
Interactive Intelligence provides Internet Protocol (IP)-based telephone systems to the call center and general enterprise markets. The company is benefiting from the migration from PBX-based systems to IP-based systems, which offer better functionality. Interactive Intelligence is seeing strong momentum in sales and earnings, driven by its success at winning large deals. The company signed 19
contracts that were over $1 million in 2010, compared to nine such contracts in 2009. We have owned the stock for nearly five years. During that time, we have watched Interactive Intelligence work its way up from a niche competitor to a viable market leader.
Computer Programs and Systems provides software and information technology (IT) services to small hospitals across the country. Its revenues are accelerating as a result of the economic stimulus package that was enacted in February 2009. As part of the package, the government is offering hospitals and doctors financial incentives to digitize their medical records. Beginning in 2015, those that aren’t using electronic records in a meaningful way will lose a portion of their Medicare funding. This mandate has created a nice tailwind of demand that we believe should last for several years.
HiSoft Technology International Ltd. ADS was the biggest detractor in the Fund. HiSoft is a U.S.-listed Chinese firm that provides IT services, such as software testing and application maintenance. The company lowered earnings guidance after writing off a large receivable owed by a customer with cash flow problems. HiSoft generates nearly 25% of its revenues from Japan, so investors were also concerned about how the earthquake might affect its business. But the main issue during the quarter was that management lowered its margin outlook for 2011 after saying margins would be stable. This was especially disconcerting to new shareholders who had just participated in a secondary offering of the stock. Despite these developments, HiSoft is expected to post strong revenue and income growth in 2011, and we think its long-run growth story remains intact.
Oil prices topped $100 a barrel this quarter, and energy was the best-performing sector of the market. This negatively impacted the Fund’s performance given our minimal exposure to energy companies. In addition, our foreign-listed stocks produced a solid gain but lagged our domestic stocks. None of our foreign-listed names subtracted a disproportionate amount from the Fund’s return. We think their relative weakness just reflects the fact that the international markets have not been as strong as the U.S. market this year.
OUTLOOK
As noted earlier, there are a number of geopolitical and macroeconomic challenges facing the stock market. In this dynamic environment, we feel positive about the quality and growth of our portfolio companies. While earnings growth is likely to slow over the next few quarters as comparisons become more difficult, it should remain strong. Valuations are not as attractive as they once were given the run-up in the market. But if price-to-earnings (P/E) multiples hold steady, and we capture the earnings growth we are expecting, we believe the Fund should do well.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
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| WASATCH MICRO CAP FUND (WMICX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Micro Cap | 27.70% | 28.86% | 1.51% | 11.24% | ||||||||||||
Russell Microcap® Index | 27.53% | 25.32% | -0.15% | 8.10% | ||||||||||||
Russell 2000® Index | 25.48% | 25.79% | 3.35% | 7.87% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Fund are 2.21%. 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. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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 | |||
| Power Integrations, Inc. | 3.0% | |||
| CorVel Corp. | 2.6% | |||
| Hibbett Sports, Inc. | 2.5% | |||
| Interactive Intelligence, Inc. | 2.5% | |||
| Dollar Financial Corp. | 2.4% | |||
| Company | % of Net Assets | |||
| Computer Programs and Systems, Inc. | 2.0% | |||
| Gordmans Stores, Inc. | 1.8% | |||
| Resources Connection, Inc. | 1.8% | |||
| Micrel, Inc. | 1.7% | |||
| O2Micro International Ltd. ADR (China) | 1.7% | |||
| ** | As of March 31, 2011, there were 96 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Fund has changed its primary benchmark from the Russell 2000 Index to the Russell Microcap Index. The Advisor believes the Russell Microcap Index more closely tracks the Fund’s micro cap holdings. 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. No data was available for the Index prior to 6/30/00. Data for the Index from 6/30/00 until its official start date of July 1, 2005 was from a paper portfolio. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in these or any indices.
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| WASATCH MICRO CAP VALUE FUND (WAMVX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Micro Cap Value Fund is managed by a team of Wasatch portfolio managers led by Brian Bythrow.
Brian Bythrow, CFA Portfolio Manager
| OVERVIEW
After a strong end to 2010, the U.S. equity markets continued to experience healthy gains in the first quarter of 2011, though at a more moderate pace than in the previous quarter. This upward trend was at times surprising, given that signs of an economic recovery remained mixed, and dramatic events in Japan, the Middle East, and North Africa presented the potential for economic disruption. |
Thanks in large part to the Federal Reserve’s continued easy money policy, U.S. stocks once again outpaced most international markets, a number of which corrected in the wake of interest rate increases and other inflation-fighting measures by the central banks. For the quarter, the Wasatch Micro Cap Value Fund gained 4.46%. This placed it behind its primary benchmark, the Russell Microcap Index, which returned 6.80% over the same period.
Our international stocks played a significant role in the Fund’s underperformance in the quarter. We consider this positioning to be an important part of our long-term strategy, even if it has had hindered performance over the past several months. That’s because a number of international markets, particularly in emerging economies, offer much greater potential for long-term growth than the mature U.S. market. Another factor in our underperformance is that the benchmark has been largely driven by fast-growth — and often pricey — momentum stocks. Although our sensitivity to valuation has cut into the Fund’s short-term performance, we feel it draws us to stocks offering more deliberate, steadier growth and better long-term return potential.
DETAILSOFTHE QUARTER
While no single trend unified our strong performers for the period, a number of companies that contributed positively to performance came from the information technology sector. Top contributor Silicon Graphics International Corp. followed an uneven 2010 with strong performance in this year’s first quarter. It was able to soar past earnings estimates thanks to surging demand for supercomputing equipment from private industry and the military. We felt the stock had become overvalued and sold out of our position.
Interactive Intelligence, Inc., a provider of software systems used to improve the efficiency of call centers, didn’t see its share price rise as dramatically as SGI’s, but posted solid returns as the company continued to enjoy good sales and take market share from competitors. We feel valuation remains relatively reasonable, despite strong performance, and Interactive Intelligence appears to have some potential to be an acquisition target down the road.
Among our more intriguing additions to the portfolio over the quarter was MedQuist Holdings, Inc., a company that applies voice-recognition software (along with offshore personnel) to the field of medical transcription. Although the company was once a market darling, it fell way out of favor and thus we were able to pick up the stock at what we felt was an inexpensive price. As investors have once again recognized the benefits of cost savings, improved efficiency, and better reporting that the company’s systems offer, MedQuist has started to recapture their attention. In an increasingly cost-conscious medical environment, we believe MedQuist’s systems and services are well positioned for future growth.
The performance of our weakest stocks was generally driven by external factors, rather than problems inherent to the companies themselves. Indian textile maker S. Kumars Nationwide Ltd., for example, was hurt as the Indian equity market sold off due to concerns about rising interest rates and other market-wide factors. The company’s products are primarily used in the manufacture of men’s suits. As such, we believe it is well positioned to benefit over the long term from the growth of India’s consumer class. However, given the many issues weighing on that market, we elected to trim back our position in this and some of our other Indian holdings.
Japan’s earthquake, tsunami, and subsequent nuclear power plant damage took down another of our holdings, GSE Systems, Inc. The company designs simulation systems used in the development of new nuclear power plants. It had seemed the company would benefit from increasing global demand for energy and from a move away from fossil fuel powered plants. Of course, recent events in Japan have reawakened concerns about the risks of nuclear power, likely taking new nuclear plants — and much of the need for GSE’s work — off the drawing board for some years to come. In this case, it seemed wisest to sell out of the position and move on. Current and future holdings are subject to risk.
OUTLOOK
Even after the equity markets’ strong run, we believe that most of the stocks in our portfolio are still reasonably priced, which gives them considerable upside potential and may insulate them to some degree during periods of volatility. So even if our value-based approach hasn’t been entirely to our advantage in this momentum-driven quarter, we continue to believe it positions us well for the longer term.
We remain enthusiastic about our portfolio of small companies that we believe offer innovative products, have solid business plans surrounding those products, and are led by strong management teams that can execute those plans successfully. In the months to come, we believe that, particularly in light of the hefty valuations among growth stocks, the market’s eye may turn to value stocks once again. A number of our companies may also find themselves targeted for acquisition by larger companies looking for these same attractive qualities.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
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| WASATCH MICRO CAP VALUE FUND (WAMVX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 7/28/03 | |||||||||||||
Micro Cap Value | 18.07% | 19.07% | 5.75% | 12.57% | ||||||||||||
Russell Microcap® Index | 27.53% | 25.32% | -0.15% | 6.85% | ||||||||||||
Russell 2000® Index | 25.48% | 25.79% | 3.35% | 9.34% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Value Fund are 2.43%. The Net Expenses are 2.32%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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 | |||
| Virtus Investment Partners, Inc. | 1.8% | |||
| Franklin Electric Co., Inc. | 1.7% | |||
| Interactive Intelligence, Inc. | 1.7% | |||
| Hurco Cos., Inc. | 1.5% | |||
| Tesco Corp. | 1.5% | |||
| Company | % of Net Assets | |||
| First Cash Financial Services, Inc. | 1.5% | |||
| Haynes International, Inc. | 1.4% | |||
| Encore Capital Group, Inc. | 1.4% | |||
| TTM Technologies, Inc. | 1.3% | |||
| Dollar Financial Corp. | 1.3% | |||
| ** | As of March 31, 2011, there were 130 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: July 28, 2003. The Fund has changed its primary benchmark from the Russell 2000 Index to the Russell Microcap Index. The Advisor believes the Russell Microcap Index more closely tracks the Fund’s micro cap holdings. 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. No data was available for the Index prior to 6/30/00. Data for the Index from 6/30/00 until its official start date of July 1, 2005 was from a paper portfolio. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in these or any indices.
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| WASATCH SMALL CAP GROWTH FUND (WAAEX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Small Cap Growth Fund is managed by a team of Wasatch portfolio managers led by Jeff Cardon.
Jeff Cardon, CFA Portfolio Manager | OVERVIEW
The Wasatch Small Cap Growth Fund gained 6.53% in the first quarter of 2011. The Russell 2000 Growth Index and the Russell 2000 Index rose 9.24% and 7.94%, respectively. The S&P 500 Index was up 5.92%. Information technology has been the best-performing sector in the Fund since the stock market bottomed in March 2009. Following such strong performance, many of our biggest |
winners have become expensive. Consequently, we have been de-risking the portfolio by trimming and eliminating positions in technology companies, as well as other types of companies, whose valuations are stretched. We began taking profits in late 2010 and stepped up our trading in the new year. Overall, our technology holdings posted a double-digit gain this quarter and made a large contribution to return. However, the lowering of our technology weight had a negative impact on performance given the continued strength in the sector.
Industrial and energy stocks have done well so far this year, reflecting an improvement in global economic growth. Energy stocks got an additional boost from the spike in oil prices caused by turmoil in the Middle East and North Africa (MENA). We continue to research companies in cyclical and commodity-oriented sectors of the market. That said, we have had difficulty finding high-quality, commodity-related companies capable of delivering steady and strong earnings growth over long periods of time.
Most international indices are trailing the U.S. indices year-to-date, with emerging markets producing the smallest gains. This was a headwind for our foreign-listed stocks, which underperformed our domestic holdings. These relatively weaker market returns are partly due to rising inflation, which has an outsized impact on economic activity in emerging countries. In addition, the incredible amount of negative news this quarter, including the Japanese earthquake and Middle East unrest, appears to have created an appetite for U.S. equities as a safe haven from these events.
DETAILSOFTHE QUARTER
Technology stocks dominated the list of top contributors this quarter. Notable performers included Ultimate Software Group, Inc., LoopNet, Inc. and VistaPrint N.V. All three of these companies have business models that use the power of the Internet to disrupt old ways of delivering services. As part of our effort to reduce valuation risk in the sector, we sold F5 Networks, Inc. and cut our position in Riverbed Technology, Inc., both enablers of “cloud computing.” We also sold OpenTable, Inc., an Internet-based provider of restaurant reservations. In our opinion, these companies still have very compelling growth opportunities, but valuations are stretched.
Copart, Inc. was another strong performer. Copart provides auto salvage auction services to a variety of buyers and sellers, including insurance companies and recyclers. We consider it to be a very high-quality company with a 10% to 12% long-run growth opportunity. It is not the kind of stock you would expect to outperform in a market where investors are seeking risk. The company recently completed a successful tender offer, repurchasing almost 15% of its outstanding shares. This unusual and accretive action was viewed favorably by investors and helped Copart’s stock perform surprisingly well.
Many of our weakest holdings were in the consumer discretionary sector — names like hhgregg, Inc., Hibbett Sports, Inc., Life Time Fitness, Inc. and O’Reilly Automotive, Inc. These and other consumer stocks were hurt by concerns that rising gas prices and falling home values would dampen discretionary spending.
Orexigen Therapeutics, Inc. also underperformed. Orexigen Therapeutics is a biotechnology company focused on treating obesity. The stock fell sharply after the U.S. Food and Drug Administration (FDA) rejected its lead weight-loss drug. The FDA is currently behaving conservatively toward granting new drug approvals. We were surprised by the decision given the tremendous cost to society of obesity-related diseases such as diabetes. The rejection was a major setback for Orexigen, and we sold the stock. We owned a small position, consistent with our approach to allocating minimal capital to biotechnology companies given the inherent riskiness of their business models. Current and future holdings are subject to risk.
OUTLOOK
The U.S. economy is clearly improving, corporate balance sheets are healthy and emerging economies remain vibrant. However, debt at all levels of government is high, both in the United States and especially in Europe. The MENA region is unstable, and it is impossible to predict the future direction of events.
In this kind of volatile environment, we are particularly glad we are bottom-up stock pickers who don’t rely on predicting macroeconomic and global events. Our focus, as always, is to find high-quality growth companies and own them as long as the fundamentals are in place, and as long as valuations provide a proper risk-adjusted return. The fundamentals of our portfolio companies look very good heading into the rest of the year. The weighted-average earnings growth of our portfolio companies was 26% in the most recent reporting quarter, and they are on track to deliver mid- to high-teens growth during the balance of 2011. As noted earlier, valuations are stretched in certain sectors of the market, which has led us to raise more cash than normal. However, our cash position should work its way down as we work hard to identify interesting new names to add to the Fund.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
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| WASATCH SMALL CAP GROWTH FUND (WAAEX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Small Cap Growth | 22.90% | 30.48% | 5.17% | 9.36% | ||||||||||||
Russell 2000® Growth Index | 27.93% | 31.04% | 4.34% | 6.44% | ||||||||||||
Russell 2000® Index | 25.48% | 25.79% | 3.35% | 7.87% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Growth Fund are 1.28%. 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. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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 | |||
| Power Integrations, Inc. | 3.6% | |||
| Ultimate Software Group, Inc. | 3.5% | |||
| Knight Transportation, Inc. | 2.5% | |||
| Hibbett Sports, Inc. | 2.4% | |||
| MSC Industrial Direct Co., Inc., Class A | 2.4% | |||
| Company | % of Net Assets | |||
| Peet’s Coffee & Tea, Inc. | 2.4% | |||
| Hittite Microwave Corp. | 2.2% | |||
| Computer Programs and Systems, Inc. | 2.0% | |||
| VistaPrint N.V. (Netherlands) | 1.9% | |||
| Wirecard AG (Germany) | 1.9% | |||
| ** | As of March 31, 2011, there were 99 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Growth Index is an unmanaged total return index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in these or any indices.
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| WASATCH SMALL CAP VALUE FUND (WMCVX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Small Cap Value Fund is managed by a team of Wasatch portfolio managers led by Jim Larkins.
Jim Larkins, MBA Portfolio Manager
| OVERVIEW
The first three months of the year brought challenges for the financial markets, including turmoil in the Middle East and North Africa, surging energy prices, and tragedy in Japan. For investors, these events underscored the increasing linkage of global markets and the unsettling ripple effects from “black swans” such as revolutions and natural disasters. In this turbulent environment, the |
Wasatch Small Cap Value Fund gained 7.42% and outperformed the Russell 2000 Value Index, which gained 6.60%. We attribute this to buying what we believe are quality stocks whose current values don’t reflect their potential for growth. One benefit of investing in higher-quality companies is that we can feel comfortable using share price weakness to establish positions at attractive levels. This strategy has allowed us to capitalize on market volatility, rather than being hurt by it.
DETAILSOFTHE QUARTER
Stock selection and overall positioning helped the Fund in the quarter. We benefited from an overweight position and solid performance in the industrials sector and an underweight position in the lagging financials sector. Within industrials, Copart, Inc., a provider of vehicle salvage services, generated strong performance. Our trucking stocks Old Dominion Freight Line, Inc. and Vitran Corp., Inc. also did well. Removal of capacity in the trucking industry has created a more favorable environment for the surviving companies.
In the financials sector, the Fund benefited from our decision to sell some banking stocks in late 2010 after they became expensive. We continue to see a lack of compelling value opportunities in financials, but are looking at the sector carefully so we will be prepared to take advantage of price weakness.
Our “Fallen Angels” strategy added substantial value. As mentioned in past communications, “Fallen Angels” is our term for one-time growth stocks that have stumbled and fallen into value territory. Three such stocks made strong contributions to the Fund this quarter. Notable among them was Polycom, Inc., which surged over 30%. Video conferencing and unified communications are hot areas, and Polycom has rebounded from its early-2009 lows as its competitor Cisco Systems, Inc.* has struggled to integrate its acquisition of Tandberg.
American Reprographics Co. provides blueprints and blueprint-related services to construction companies, and is a one-time fallen angel that was held in Wasatch growth portfolios. When its stock price plunged during the credit crisis, we bought shares near market lows using the institutional memory within Wasatch. ARC shares have since rebounded in anticipation of an improving economy.
The third major contributor among our Fallen Angels was Chico’s FAS, Inc., an apparel retailer we initially purchased in late 2010. Chico’s is a classic fallen angel story — it had one of the most spectacular track records in the history of retail until it hit a wall a few years ago. Wasatch’s history with the company, as a former growth holding, gave us important perspective when making the decision to purchase shares once Chico’s new management team demonstrated its talent at executing a turnaround.
Our position in Allegiant Travel Co. proved to be a disappointment. While Allegiant is often recognized as one of the world’s most profitable airlines, its primary customer — the leisure traveler — has been negatively impacted by the sluggish economy. This issue, combined with rising fuel costs, caused Allegiant’s earnings growth to stall. Nevertheless, we believe the company will be able to revive its earnings growth.
Other detractors included China Valves Technology, Inc., which we sold after a controversy related to corporate governance practices, and Big 5 Sporting Goods Corp., a retailer that has struggled to gain momentum even as certain competitors have continued to grow. Despite this handful of misses, we are pleased with the overall effectiveness of our stock selection. Current and future holdings are subject to risk.
OUTLOOK
With the broader market having come so far since the third quarter of 2010, we have gradually moved to a more cautious, valuation-centric approach. Part of this process involved our decision to reduce weightings in stocks that had surpassed our fair value estimates. Many of these were energy and materials companies. In some cases, we sold these positions too early and missed some upside. However, we believe it is important to maintain strict valuation discipline in stocks linked to commodity prices, even if we continue to hold a positive view on the underlying companies. We have increased our research efforts in these areas, and feel well prepared to buy should prices come back down.
At the same time, we have maintained our long-standing approach of buying former growth companies that have fallen to attractive valuation levels. Recent purchases included companies in the optical networking space and a couple of consumer discretionary firms.
Another element of our approach has been to keep positions in core, long-term holdings that we view as higher-quality companies offering upside potential and defensive characteristics.
Through these recent shifts, we feel we have maintained attractive overall valuation, boosted the Fund’s growth profile, and raised the quality of our holdings. Our cash position is higher than normal, but we expect to work it down as we see weakness in the stock prices of companies we’re watching. We believe this approach will hold us in good stead regardless of the direction the broader market takes as we move through 2011.
Thank you for the opportunity to manage your assets.
| * | As of March 31, 2011, the Wasatch Small Cap Value Fund was not invested in Cisco Systems, Inc. |
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| WASATCH SMALL CAP VALUE FUND (WMCVX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Small Cap Value | 26.95% | 27.36% | 1.90% | 9.64% | ||||||||||||
Russell 2000® Value Index | 22.97% | 20.63% | 2.23% | 9.01% | ||||||||||||
Russell 2000® Index | 25.48% | 25.79% | 3.35% | 7.87% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Value Fund are 1.97%. 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. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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 | |||
| Copart, Inc. | 3.4% | |||
| CorVel Corp. | 3.2% | |||
| Polycom, Inc. | 2.6% | |||
| TTM Technologies, Inc. | 2.5% | |||
| Herbalife Ltd. | 2.3% | |||
| Company | % of Net Assets | |||
| MEDNAX, Inc. | 2.1% | |||
| Dollar Financial Corp. | 2.0% | |||
| ICON plc ADR (Ireland) | 2.0% | |||
| HEICO Corp., Class A | 2.0% | |||
| Resources Connection, Inc. | 1.9% | |||
| ** | As of March 31, 2011, there were 77 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Value Index measures the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in these or any indices.
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| WASATCH STRATEGIC INCOME FUND (WASIX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Strategic Income Fund is managed by a team of Wasatch portfolio managers led by Sam Stewart.
Samuel S. Stewart, Jr. PhD, CFA Portfolio Manager | OVERVIEW
Political unrest in the Middle East and North Africa, burdensome government budget deficits in the U.S. and Europe, and a tragic natural disaster in Japan dominated news headlines during the first quarter, yet the S&P 500 continued to march forward. Somewhat surprisingly, given our defensive positioning, the 7.44% return of the Wasatch Strategic Income Fund outperformed the 5.92% gain of the S&P 500 Index for the quarter — the |
S&P 500’s third consecutive quarter with an increase of more than five percent. The Barclays Capital U.S. Aggregate Bond Index posted a modest 0.42% gain for the quarter.
Despite being underweight in some of the market’s hottest sectors because of quality or valuation concerns, the Fund performed quite well. The Fund is focused on high quality companies trading at good values, which have a willingness and ability to pay a growing dividend. It’s a strategy that I would normally expect to trail the market in bullish environments, and to potentially outperform during pullbacks. One of the drivers of the Fund’s recent outperformance is that investors are increasingly looking for yield. As of March 31, 2011, the Fund’s 30-day SEC yield was 2.50%,* well above that of the S&P 500.
As the market continues to advance, I have become even more vigilant concerning the valuations of the Fund’s holdings and I am selectively trimming our exposure accordingly. Even with the strong market advance, the Fund does not feel overvalued to me, as price-to-earnings ratios (P/Es) and other valuation metrics remain reasonable for our holdings.
I’m pleased to report that in February the Fund reached its five-year anniversary. Given the Fund’s goal of generating a total return between stocks and bonds with lower risk than a typical equity portfolio, the Fund has done better than I expected — actually outperforming the S&P 500 over 1-, 3- and 5-year time periods as of March 31, 2011. I believe our success has been partly due to Wasatch’s disciplined investment process utilizing good hands-on research.
DETAILSOFTHE QUARTER
Valeant Pharmaceuticals International, Inc. was the Fund’s top performing stock during the quarter with a 76% increase. Valeant has proven to be adept at selecting and integrating merger targets. Their large integration with Biovail last fall has been going well and is being recognized by investors. Investors also seem to now be placing an expected value on the company’s current initiative to acquire Cephalon and its attractive drug pipeline.
Herbalife Ltd., a network marketing company that offers nutritional supplements, also delivered strong returns during the quarter. The company is successfully shifting their
customers from traditional multi-level marketing into a daily consumption model that has boosted recurring revenue and earnings growth.
Included among our financial stocks are several mortgage REITs which have performed particularly well in the current low interest rate environment. They are paying double-digit yields, yet we believe their price-to-book values (an important valuation tool for these firms) remain reasonable.
Microsoft Corp. and Teva Pharmaceutical Industries Ltd. were down slightly during the quarter, but neither had meaningful news and my investment thesis remains in place.
The Fund’s largest detractor during the quarter was Brazil’s Banco Daycoval, which I sold early in the period. I remain optimistic about the increasing financial needs of Brazil’s growing middle class and I used the proceeds to purchase Itau Unibanco Banco Holding, which I believe is a better-positioned Brazilian bank.
We also purchased a stake of investment manager BlackRock, Inc. this quarter. I believe BlackRock is a top quality firm with great diversification, led by a superb management team, and which pays a healthy and growing dividend. Its stock is also notably undervalued compared to some of its public competitors. Current and future holdings are subject to risk.
OUTLOOK
While the domestic market advance during the quarter was primarily a result of improving economic signals, I was still surprised at the markets’ strength given the short- and long-term challenges we continue to face, including:
| Ÿ | Stubbornly high U.S. unemployment |
| Ÿ | Soaring commodity prices |
| Ÿ | Our large and growing public debt |
While I’m cautiously optimistic that tough choices will be made to improve global economic prospects, I will continue to try to position the Fund to err on the cautious side in order to reduce downside risk. I will also keep a close eye on valuations and hold our companies to a high quality bar. I’m finding that many blue chip, large cap stocks in particular are still attractively priced and should have the pricing power to maintain profit margins in an inflationary environment.
I would be surprised to see the bull market continue its frothy expansion. I believe investors ought to prepare themselves for more modest returns than we have recently seen. Although the global economic meltdown was averted, myriad uncertainties remain. By focusing our investment selections on high quality companies that are able and willing to pay increasing dividends, and by closely managing the risk exposure of the Fund, I believe we are well positioned to deliver against the Fund’s objective.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute. |
| * | The 30-day yield for the Strategic Income Fund is subsidized due to the Advisor’s contractual agreement to reimburse the Fund for certain expenses. Without this expense waiver the Fund’s yield would be lower. |
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| WASATCH STRATEGIC INCOME FUND (WASIX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 2/1/06 | |||||||||||||
Strategic Income | 18.46% | 23.19% | 3.91% | 4.14% | ||||||||||||
S&P 500 Index | 17.31% | 15.65% | 2.62% | 2.84% | ||||||||||||
Barclays Capital U.S. Aggregate Bond Index | -0.88% | 5.12% | 6.03% | 5.70% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Strategic Income Fund are 1.96%. The Net Expenses are 1.62%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
With respect to the Fund’s assets invested in fixed income securities, you are subject, but not limited to, the same interest rate, inflation and credit risk associated with the underlying fixed-income securities owned by the Fund. Return of principal is not guaranteed. Equity investing involves risks, including potential loss of the principal amount invested. 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 | |||
| Valeant Pharmaceuticals International, Inc. (Canada) | 4.6% | |||
| Herbalife Ltd. | 4.4% | |||
| Teva Pharmaceutical Industries Ltd. ADR (Israel) | 4.2% | |||
| Redwood Trust, Inc. | 3.8% | |||
| Company | % of Net Assets | |||
| Two Harbors Investment Corp. | 3.6% | |||
| MasterCard, Inc., Class A | 3.5% | |||
| Visa, Inc., Class A | 3.4% | |||
| Capstead Mortgage Corp. | 3.3% | |||
| Solar Capital Ltd. | 2.7% | |||
| Ares Capital Corp. | 2.7% | |||
| ** | As of March 31, 2011, there were 52 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: February 1, 2006. The S&P 500 Index represents 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged, and a common measure of common stock total return performance. The Barclays Capital U.S. Aggregate Bond Index covers the U.S. investment grade fixed rate bond market, including government and corporate securities, agency mortgage pass-through securities, and asset-backed securities. To be included in the index the security must meet the following criteria: must have at least one year to final maturity, regardless of call features; must have at least $100 million par amount outstanding; must be rated investment grade or better by Moody’s Investors Service, Standard & Poor’s, or Fitch Investor’s Service; must be fixed rate, although it can carry a coupon that steps up or changes to a predetermined schedule; must be dollar-denominated and nonconvertible. All corporate and asset-backed securities must be registered with the SEC and must be publicly issued. You cannot invest directly in these or any indices.
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| WASATCH ULTRA GROWTH FUND (WAMCX) — Management Discussion | MARCH 31, 2011 | |
The Wasatch Ultra Growth Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan.
Ajay Krishnan, CFA Portfolio Manager | OVERVIEW
The Wasatch Ultra Growth Fund gained 6.48% in the first quarter of 2011. U.S. equity markets also posted solid gains over the period, despite disruptive global events, rising energy prices, and tepid economic data. The Fund underperformed the Russell 2000 Growth Index, which returned 9.24% for the quarter. With few exceptions, companies held by the Fund recorded healthy levels of |
earnings growth. This, along with a sustained high level of liquidity among investors, has been reflected in rising price-to-earnings (P/E) multiples, and has significantly increased the level of risk in the equity markets.
Negative news regarding two holdings played a role in the Fund’s underperformance for the period. Our underexposure to the strong-performing energy sector, and the relatively weak performance of some of our energy holdings, also contributed to underperformance.
DETAILSOFTHE QUARTER
A number of our top performers over the past three months are emerging as leaders in newer areas of technological innovation. Our top contributor for the quarter, IPG Photonics Corp., is also indicative of the strong earnings growth experienced by many of our holdings over the period. The company manufactures fiber-optic lasers that are used in industry. This newer laser technology operates at a slightly lower cost per watt than traditional CO2 lasers, but generates even greater savings through its much lower cost for maintenance and upkeep. Fiber-optic lasers in general, and IPG in particular, are making great strides in gaining market share over CO2 lasers, which helped the company to blow out its earnings estimates for the quarter. Investors’ enthusiastic response drove the stock’s valuation up significantly.
Another top contributor, OPNET Technologies, Inc., has benefited from the move toward cloud computing, a model whereby software and services are provided over the Internet, or “cloud.” Although cloud-based systems can provide greater flexibility and capacity than fixed-location server networks, when problems arise, they can be more challenging for companies’ IT departments to diagnose and resolve. OPNET provides products and services to help IT technicians monitor, manage, and improve the performance of their cloud-based systems. As these products have grown to account for more of OPNET’s overall business, the company’s revenues and earnings have grown. Furthermore, as investors have recognized OPNET’s larger presence in this fast-growing portion of the information technology (IT) sector, the company has enjoyed P/E multiple expansion.
Not every innovation necessarily works out as hoped for. A disappointing development with respect to a new obesity drug led to a steep decline in the stock price of Orexigen
Therapeutics, Inc., our greatest detractor for the period. It previously looked like the company’s new drug was on track for approval by the Food and Drug Administration (FDA). In an unexpected turn of events, an additional large-scale study to measure the cardiac effects of the drug was requested prior to approval in a letter received from the FDA in February. We substantially reduced our position in Orexigen based on this news, though we retained a small position, as the company has not yet met with the FDA to discuss the details of the study.
Another detractor from performance was one of the few examples we saw this quarter of a company posting disappointing earnings. HiSoft Technology International Ltd., a China-based IT outsourcing company we hold through American Depositary Shares (ADS), saw earnings fall short of expectations and its share price decline after it had to take a writedown of a sizable receivable. This was somewhat surprising given that management had claimed to have a good picture of clients’ ability to pay their bills. Management also indicated that despite this development profit margins were stable, but in the end they declined modestly.
Both of these events undermined HiSoft’s credibility. We view the recent problems more as bumps in the road than indicators of long-term distress. Going forward, HiSoft’s management will need to show investors that they can successfully execute their business plan and avoid future issues with receivables. Current and future holdings are subject to risk.
OUTLOOK
We remain cautious with respect to consumers, and to companies that largely rely on spending to produce earnings growth. We anticipate that capital spending rather than consumer activity will ultimately drive the economic recovery. Companies appear to remain reluctant to hire in great numbers, and newer technologies are making it easier for them to produce more with fewer employees.
With pockets of over-valuation now in evidence in many areas of the market, we’re taking steps to manage the level of risk in the Fund. We’ve trimmed positions in a number of stronger-performing, higher-multiple stocks and have removed a few smaller positions altogether. In this environment, we find some encouragement in the fact that a few of our larger positions, including Silicon Laboratories, Inc. and Power Integrations, Inc., were down slightly for the past quarter. We believe both of these companies are positioned to post good results as the year progresses, and less-expensive valuations give their share prices room to move. In addition, we believe the overall quality of our portfolio companies is quite high and the fundamental outlook positive. Valuation is the main risk we see.
As we consider new holdings for the Fund, we will continue to pay careful attention to quality and valuation, looking for opportunities to add holdings at prices that leave room for appreciation.
Thank you for the opportunity to manage your assets.
CFA® is a trademark owned by CFA Institute.
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| WASATCH ULTRA GROWTH FUND (WAMCX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Ultra Growth | 22.07% | 34.80% | 2.19% | 8.21% | ||||||||||||
Russell 2000® Growth Index | 27.93% | 31.04% | 4.34% | 6.44% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Ultra Growth Fund are 1.46%. 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.
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 | |||
| Cognizant Technology Solutions Corp., Class A | 3.7% | |||
| Power Integrations, Inc. | 3.3% | |||
| Interactive Intelligence, Inc. | 2.6% | |||
| Computer Programs and Systems, Inc. | 2.6% | |||
| MSCI, Inc., Class A | 2.5% | |||
| Company | % of Net Assets | |||
| Silicon Laboratories, Inc. | 2.5% | |||
| Hittite Microwave Corp. | 2.3% | |||
| AtriCure, Inc. | 2.2% | |||
| Greenspring Global Partners II-B, L.P. | 2.1% | |||
| NetLogic Microsystems, Inc. | 1.7% | |||
| ** | As of March 31, 2011, there were 103 holdings in the Fund. 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†
| † | Excludes securities sold short and options written, if any. |
| †† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Growth Index is an unmanaged total return index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. 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. You cannot invest directly in these or any indices.
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| WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Management Discussion | MARCH 31, 2011 | |
Paul W. Gifford, CFA Portfolio Manager | OVERVIEW
The Wasatch-1st Source Income Fund returned 0.14% during the first quarter. Over the same period, the Barclays Capital U.S. Intermediate Government/Credit Bond Index returned 0.34%. Yields on 10-year U.S. Treasury bonds traded between 3.2% and 3.75% during the quarter. This was the second quarter in a row that interest rates rose. Bond prices dropped due to higher rates, but this was offset by |
spreads that tightened versus Treasuries in most sectors of the bond market.
As the quarter ended, two current events and an upcoming event will affect the taxable bond market. The current events are the tragedy in Japan and revolutions in the Middle East and North Africa (MENA). The upcoming event is the end of the second phase of quantitative easing (QE2) started by the Federal Reserve (Fed) in the fourth quarter of 2010.
The estimated economic toll on Japan could be $300 billion, more than four times larger than Hurricane Katrina, and will likely grow due to lost nuclear power and as clean-up costs rise. Global impact will be more focused on industries that rely on Japanese exports, particularly the automotive and technology industries. Lost production at Toyota and Honda is expected to exceed 40,000 cars. The circuit boards inside many computers and other electronic gadgets are manufactured in Japan, and bottlenecks could potentially slow production worldwide as companies scramble to get plants back online and/or locate alternative suppliers. We expect many of the short-term disruptions to be corrected in the second quarter, with growth in Japan’s gross domestic product (GDP) resuming in the third.
The impact on the Fund could be twofold. The first is related to how the Japanese yen, which rallied fiercely in the face of the country’s challenges, performs longer term. A weak dollar would help U.S. exporters. The caveat is the potential for successful intervention by central banks to halt the rise of the yen. Second, the U.S. Treasury market could be impacted. Japan owns hundreds of billions of dollars of Treasuries and will likely buy fewer bonds to free up cash for reconstruction. Japan could conceivably become a large seller, causing interest rates here to rise. So far both markets have had only modest moves but reconstruction is not expected to get fully underway for another month or two.
Societal and governmental change in the MENA region may end up having far greater impact on the global economy and our pocketbooks. Tunisia and Egypt have already seen changes in leadership sparked by protesters. In Libya, General Gaddafi’s refusal to give up power in the face of growing opposition and instead choosing to attack the Libyan people prompted NATO intervention via air strikes and a no-fly zone. Uncertainty in the region has driven crude oil and gasoline prices up on speculation of reduced supplies. Libya provides “only” 2% of the world’s supply, or 1.5 million barrels per day, primarily to Europe and Asia.
We have already seen the impact of these revolutions at the gas pump. Prices per gallon have jumped from $0.70 to $1.00 across the U.S. So far the U.S. economy has continued to grow and the added jobs and income have cushioned the negative fuel price impact. While we see gas prices as increasing temporarily due to political events, the timing being near the summer travel season may dampen plans for some vacationers. A prolonged period of higher prices (i.e., $4 to $5 per gallon) would be a significant drag on economic activity here as consumers retrench their discretionary spending. We are generally overweight in the energy sector to hedge against potential outcomes.
The impact on the fixed income market would be on one hand related to inflation and higher yields. The Fund holds just over a 2% weighting in U.S. Treasury Inflation Protected Securities to protect against inflation. We are maintaining the Fund with an effective duration shorter than its benchmark but would need to shift quickly if a prolonged economic slowdown appeared to be materializing.
During the quarter, our larger transactions were generally in U.S. Government Agency bonds. Many of these securities have call options at the discretion of the Agency. Low interest rates in short maturities make it easy to refinance the bonds. The advantage to the Fund of owning such bonds is higher yield earned to the call dates. This yield advantage is particularly important in an environment of low interest rates.
Near quarter-end, mortgage bonds with short final maturities became more attractively priced compared to U.S. Government Agency bonds and we were able to purchase some GNMA securities. Second, we also added to positions in floating rate mortgages. We are slowly moving toward a time when the Fed will need to raise rates and these types of bonds should experience a rise in coupon and better preservation of price versus fixed rate bonds. Lastly, we added to a few corporate bonds that looked attractive, including Bank of America, Verizon and Astrazenca. We also added two names brought to us from our equity team’s research — Nucor and Thermo Fisher.
Bond fund redemptions slowed during the quarter after large withdrawals in November and December. A continued strong stock market could cause assets to shift from bonds to stocks, a trend we will be watching. We expect to maintain less interest rate risk than the benchmark and a focus on higher credit quality.
Thank you for allowing us the opportunity to be a trusted advisor for you.
CFA® is a trademark owned by CFA Institute.
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| WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Income | -1.05% | 2.96% | 4.69% | 4.19% | ||||||||||||
Barclays Capital U.S. Intermediate Government/Credit Bond Index | -1.11% | 4.63% | 5.68% | 5.20% | ||||||||||||
Data shows 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 www.wasatchfunds.com. 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Income Fund are 0.74%. 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”). See the prospectus for additional information regarding Fund expenses.
Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. 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 10 HOLDINGS**
| Holding | Maturity Date | % of Net Assets | ||||||
| U.S. Treasury Bond, 3.75% | 11/15/18 | 5.9% | ||||||
| U.S. Treasury Bond, 3.25% | 12/31/16 | 4.8% | ||||||
| U.S. Treasury Bond, 1.625% | 1/15/18 | 2.1% | ||||||
| Federal Home Loan Mortgage Corp., 4.75% | 11/17/15 | 1.9% | ||||||
| Federal Home Loan Mortgage Corp., 3.50% | 5/29/13 | 1.6% | ||||||
| Federal National Mortgage Assoc., 4.875% | 12/15/16 | 1.5% | ||||||
| Holding | Maturity Date | % of Net Assets | ||||||
| Citibank Credit Card Issuance Trust, Series 2007-A8, Class A8, 5.65% | 9/20/19 | 1.3% | ||||||
| Government National Mortgage Assoc., Series 2009-31, Class TA, 4.00% | 3/20/39 | 1.3% | ||||||
| Federal Home Loan Bank, 5.00% | 9/14/12 | 1.2% | ||||||
| Federal Home Loan Mortgage Corp., 2.52% | 12/9/14 | 1.2% | ||||||
| **As | of March 31, 2011, there were 161 holdings in the Fund. 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
| †Also | includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Barclays Capital U.S. Intermediate Government/Credit Bond Index is an unmanaged index considered representative of the performance of government and corporate bonds with maturities of less than 10 years. You cannot invest directly in this or any index.
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| WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Management Discussion | MARCH 31, 2011 | |
Van R. Hoisington Portfolio Manager | OVERVIEW
If the objectives of Quantitative Easing part 2 (QE2) were to: a) raise interest rates; b) slow economic growth; c) encourage speculation; and d) eviscerate the standard of living of the average American family, then it has been enormously successful. These results represent the Federal Reserve’s (Fed’s) impact on the U.S. economy, regardless of its claims to the contrary. |
DETAILSOFTHE QUARTER
The Wasatch-Hoisington U.S. Treasury Fund registered a negative return of 2.18% in the first quarter. However, over the past year the Fund performed well, posting a 7.58% return compared to a 5.12% return for the Barclays Capital U.S. Aggregate Bond Index. Since inception and for the past 5- and 10-years, the Fund has outperformed this benchmark. Over the past 5- and 10-years the Fund has outperformed the S&P 500 Index by 2.4 and 3.2 percentage points, respectively.
OUTLOOK
By definition, the massive increase in the Fed’s balance sheet encourages speculation and lifts the fear of inflation. Banks have had few customers who wish to borrow for productive means. Bank credit has been falling since 2008 when the Fed-induced housing bubble burst. However, large hedge funds and other financial investors/speculators have an inexhaustible supply of credit to underwrite derivatives and leverage to anticipate and profit from the inflationary atmosphere the Fed seems to be attempting to engineer.
In the past two years, M2 rose 6% while total reserves jumped 85%. But this does not mean that unused reserve balances had no influence on prices, and in particular on commodity prices. In a world of advanced derivatives, high cash balances are not required to take speculative positions, only margin requirements need to be satisfied. With reserve balances at unprecedented levels, margin risk is minimized for market participants wishing to take positions consistent with the Fed’s goal of higher inflation and having either direct or indirect access to the Fed’s mammoth reserve balances, which can satisfy margin requirements.
These activities, while profitable to speculators in the short run, slow real economic activity in several ways. First, the rising interest rate environment also raises mortgage rates. Of course this means more marginal buyers are priced out of the market and unable to purchase homes, resulting in another leg down in terms of sales and price. Second, the prospect of consumers’ largest asset moving lower in price hardly inspires greater willingness to spend.
Third, speculation encouraged by the Fed has led to near record margin debt in the stock exchanges, and has raised stock prices, benefiting the upper income segment of society. Further, open-ended credit lines for speculation have helped lift commodity prices dramatically during QE2, just as they did during the first round of quantitative easing.
Commodity and stock price movements are susceptible to a myriad of demand/supply factors that include cartels, war and weather. But the speculation created by QE2 suggests financial players are aiding and abetting normal price movements. Evidence of this is the Commitment of Traders Report, which indicates record speculation. Also, supply disruptions have not been evident in the gold and silver market, which suggests that speculation is a dominant force in two of the markets where price increases have been most rapid.
The combination of a rise in interest rates, stock prices, and food and fuel commodity prices has reduced disposable personal income, depressed the net worth of the average American family as home prices have fallen, and caused consumption to slow, increasing the income divide between higher and lower income Americans.
In the six months since Fed chairman Ben Bernanke announced QE2, real average hourly earnings declined by a sharp 2.1% as inflation accelerated. Not surprisingly, the University of Michigan and Gallup confidence measures in March fell back to 2009 levels. Real consumer expenditures moderated sharply.
Incomplete first quarter gross domestic product (GDP) calculations indicate that real growth has not been any better in the past six months than in the two quarters prior to QE2. Inflation, however, was sharply higher. Such results are a replay of the 1960s and 1970s in that the general welfare materially worsened.
The minimal historical record on massive Fed intervention indicates that as QE2 terminates at its scheduled end on June 30th, the inflation/risk trade will also fade. Accordingly, it is likely that investors will gradually move into Treasury securities and other high-grade risk adverse investments. This will release funds for the mortgage market and creditworthy state and local governments. Upward pressure on commodity prices will abate, mitigating the downward pressure on real wage income and consumer confidence.
While the economy will slow initially, the drop in inflation over time should lift real income and serve to stabilize the economy. The dollar should firm, encouraging foreign investors to place additional funds in U.S. markets. Taken together, these factors should give the economy the opportunity to stand on its own, rather than rely on massive government interventions whose potentially negative and unintended consequences are unknown.
The evidence of the past three years seems clear in that monetary and fiscal policy have been unable to improve the average American’s standard of living. Time will be required to reestablish their balance sheets to more normal levels. In the interim, the economy may tend toward disinflation, if not deflation. This environment may prove favorable for long-dated Treasuries such as those in which the Fund invests. Positioning for an inflation boom will likely be disappointing.
We appreciate your investment in the Wasatch-Hoisington U.S. Treasury Fund.
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| WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Portfolio Summary | MARCH 31, 2011 | |
AVERAGE ANNUAL TOTAL RETURNS
| SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
U.S. Treasury | -13.40% | 7.58% | 6.04% | 6.43% | ||||||||||||
Barclays Capital U.S. Aggregate Bond Index | -0.88% | 5.12% | 6.03% | 5.56% | ||||||||||||
Data shows 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 www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return 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, 2011 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-Hoisington U.S. Treasury Fund are 0.78%. The Net Expenses are 0.75%. The expense ratio shown elsewhere in this report may be different. Expenses include direct expenses paid to the Advisor, 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 Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. 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 10 HOLDINGS**
| Holding | Maturity Date | % of Net Assets | ||||
| U.S. Treasury Strip, principal only | 2/15/31 | 27.4% | ||||
| U.S. Treasury Bond, 4.75% | 2/15/37 | 14.8% | ||||
| U.S. Treasury Strip, principal only | 2/15/37 | 10.6% | ||||
| U.S. Treasury Bond, 4.50% | 2/15/36 | 9.9% | ||||
| U.S. Treasury Strip, principal only | 5/15/39 | 8.8% | ||||
| Holding | Maturity Date | % of Net Assets | ||||
| U.S. Treasury Bond, 4.50% | 5/15/38 | 6.5% | ||||
| U.S. Treasury Bond, 3.50% | 2/15/39 | 5.2% | ||||
| U.S. Treasury Bond, 4.25% | 5/15/39 | 3.9% | ||||
| U.S. Treasury Strip, principal only | 5/15/40 | 3.2% | ||||
| U.S. Treasury Bond, 4.50% | 8/15/39 | 2.9% | ||||
| ** | As of March 31, 2011, there were 14 holdings in the Fund. 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
| † | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance and the graph above does not reflect the deduction of taxes you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Barclays Capital U.S. Aggregate Bond Index covers the U.S. investment grade fixed rate bond market, including government and corporate securities, agency mortgage pass-through securities, and asset-backed securities. To be included in the index the security must meet the following criteria: must have at least one year to final maturity, regardless of call features; must have at least $100 million par amount outstanding; must be rated investment grade or better by Moody’s Investors Service, Standard & Poor’s, or Fitch Investor’s Service; must be fixed rate, although it can carry a coupon that steps up or changes to a predetermined schedule; must be dollar-denominated and nonconvertible. All corporate and asset-backed securities must be registered with the SEC and must be publicly issued. You cannot invest directly in this or any index.
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| WASATCH FUNDS MANAGEMENT DISCUSSIONS — Definitions of Financial Terms | MARCH 31, 2011 | |||
Book value is the value of a security or asset entered in a company’s books.
A bull market is defined as a prolonged period in which investment prices rise faster than their historical average. Bull markets can happen as the result of an economic recovery, an economic boom, or investor psychology.
A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other securities.
Credit risk is the risk that the issuer of a debt security will fail to repay principal and interest on the security when due.
Dividend yield is a company’s annual dividend payments divided by its market capitalization, or the dividend per share divided by the price per share.
Earnings growth is a measure of growth in a company’s net income over a specific period, often one year.
Effective duration is a measure of the responsiveness of a bond’s price to market interest rate changes. For example, if the interest rate increased 1%, a bond with an effective duration of five years would experience a decline in price of 5%.
Government agency bonds are debt securities issued by a U.S. government-sponsored agency.
The Government National Mortgage Association (GNMA, also known as Ginnie Mae) is a U.S. government-owned corporation within the Department of Housing and Urban Development. GNMA is one of several government agencies permitted to issue debt for sale to the investing public.
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.
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.
An initial public offering (IPO) is a company’s first sale of stock to the public.
Interest rate risk is the risk that a debt security’s value will decline due to changes in market interest rates. The interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
M2 money supply consists of currency and checking accounts, consumer-type time and savings accounts and
equivalent near monies, while M3 money supply consists of M2 plus business-type time deposits and less liquid near monies. Both M2 and M3 exclude monies and near monies owned by the Treasury, depository institutions and foreign banks and official institutions and IRA and Keogh balances owned by consumers.
The Organisation for Economic Co-operation and Development (OECD) promotes policies intended to improve the economic and social well-being of people around the world.
The price-to-book ratio is used to compare a company’s book value to its current market price.
The price-to-earnings or P/E ratio, also known as the P/E multiple, is the price of a stock divided by its earnings per share.
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. QE2 is the nickname for the second round of quantitative easing announced by Federal Reserve (Fed) chairman Ben Bernanke in November 2010 whereby the Fed would buy billions of dollars in long-term U.S. Treasury securities in an effort to jump start the sluggish economic recovery.
The S&P 500 Index includes 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged but is a commonly used measure of common stock total return performance. You cannot invest directly in this or any index.
The 30-day current net (“SEC”) yield is calculated by dividing the net investment income per share for the 30 days ended on the date of calculation by the maximum offering price per share on that date. The figure is compounded and annualized. The 30-day yield unsubsidized is calculated in the absence of temporary expense waivers or reimbursements thus resulting in a lower yield.
U.S. Treasury Inflation Protected Securities, also known as TIPS, are securities whose principal is tied to the Consumer Price Index. With inflation, the principal increases. With deflation, it decreases. When the security matures, the U.S. Treasury pays the original or adjusted principal, whichever is greater.
Valuation is the process of determining the current worth of an asset or company.
Yield is generally defined as the return an investor will receive by holding a bond to maturity.
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| WASATCH FUNDS — OPERATING EXPENSES (UNAUDITED) | MARCH 31, 2011 | |
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, 2011.
ACTUAL EXPENSES
The first line of the table below 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, 2011. 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 $15.00 IRA distribution fee, 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 below.
HYPOTHETICAL EXAMPLEFOR COMPARISON PURPOSES
The second line of the table below 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 $15.00 IRA distribution fee, 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 below. 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. The Long/Short and Income funds have no contractual limitation on expenses.
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| WASATCH FUNDS — OPERATING EXPENSES (UNAUDITED) (continued) | MARCH 31, 2011 | |
| Account Value | Expenses Paid | Annualized Expense Ratio* | ||||||||||||||
| Fund/Class and Return | Beginning of Period October 1, 2010 | End of Period March 31, 2011 | ||||||||||||||
Core Growth Fund | ||||||||||||||||
Actual | $1,000.00 | $1,225.40 | $6.94 | 1.25% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,018.70 | $6.29 | 1.25% | ||||||||||||
Emerging Markets Small Cap Fund | ||||||||||||||||
Actual | $1,000.00 | $1,046.50 | $10.10 | 1.98% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.06 | $9.95 | 1.98% | ||||||||||||
Global Opportunities Fund | ||||||||||||||||
Actual | $1,000.00 | $1,181.80 | $11.15 | 2.05% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,014.71 | $10.30 | 2.05% | ||||||||||||
Global Science & Technology Fund | ||||||||||||||||
Actual | $1,000.00 | $1,172.20 | $10.56 | 1.95% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.21 | $9.80 | 1.95% | ||||||||||||
Heritage Growth Fund | ||||||||||||||||
Actual | $1,000.00 | $1,185.00 | $5.18 | 0.95% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,020.19 | $4.78 | 0.95% | ||||||||||||
International Growth Fund | ||||||||||||||||
Actual | $1,000.00 | $1,100.20 | $9.01 | 1.72% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,016.36 | $8.65 | 1.72% | ||||||||||||
International Opportunities Fund | ||||||||||||||||
Actual | $1,000.00 | $1,078.90 | $11.66 | 2.25% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,013.71 | $11.30 | 2.25% | ||||||||||||
Large Cap Value Fund | ||||||||||||||||
Actual | $1,000.00 | $1,171.40 | $5.95 | 1.10% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,019.45 | $5.54 | 1.10% | ||||||||||||
Long/Short Fund | ||||||||||||||||
Actual | $1,000.00 | $1,155.30 | $8.97 | 1.67% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,016.60 | $8.40 | 1.67% | ||||||||||||
Micro Cap Fund | ||||||||||||||||
Actual | $1,000.00 | $1,277.00 | $12.21 | 2.15% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,014.21 | $10.80 | 2.15% | ||||||||||||
Micro Cap Value Fund | ||||||||||||||||
Actual | $1,000.00 | $1,180.70 | $12.23 | 2.25% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,013.71 | $11.30 | 2.25% | ||||||||||||
Small Cap Growth Fund | ||||||||||||||||
Actual | $1,000.00 | $1,229.00 | $6.72 | 1.21% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,018.90 | $6.09 | 1.21% | ||||||||||||
Small Cap Value Fund | ||||||||||||||||
Actual | $1,000.00 | $1,269.50 | $10.30 | 1.82% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.86 | $9.15 | 1.82% | ||||||||||||
Strategic Income Fund | ||||||||||||||||
Actual | $1,000.00 | $1,184.60 | $5.17 | 0.95% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,020.19 | $4.78 | 0.95% | ||||||||||||
Ultra Growth Fund | ||||||||||||||||
Actual | $1,000.00 | $1,220.70 | $8.36 | 1.51% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,017.40 | $7.59 | 1.51% | ||||||||||||
Income Fund | ||||||||||||||||
Actual | $1,000.00 | $989.50 | $3.62 | 0.73% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,021.29 | $3.68 | 0.73% | ||||||||||||
U.S. Treasury Fund | ||||||||||||||||
Actual | $1,000.00 | $866.00 | $3.49 | 0.75% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75% | ||||||||||||
*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 (182/365).
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| WASATCH CORE GROWTH FUND (WGROX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 95.0% | ||||||||
| Airlines 1.8% | ||||||||
| 207,549 | Allegiant Travel Co. | $ | 9,092,722 | |||||
| Apparel, Accessories & Luxury Goods 0.9% | ||||||||
| 1,953,497 | Ports Design Ltd. (China) | 4,507,461 | ||||||
| Application Software 2.4% | ||||||||
| 125,604 | ANSYS, Inc.* | 6,806,481 | ||||||
| 220,550 | Tyler Technologies, Inc.* | 5,229,240 | ||||||
| 12,035,721 | ||||||||
| Asset Management & Custody Banks 5.9% | ||||||||
| 104,999 | Affiliated Managers Group, Inc.* | 11,483,740 | ||||||
| 429,109 | SEI Investments Co. | 10,247,123 | ||||||
| 304,487 | Solar Capital Ltd. | 7,271,149 | ||||||
| 29,002,012 | ||||||||
| Automotive Retail 4.3% | ||||||||
| 311,251 | Monro Muffler Brake, Inc. | 10,265,058 | ||||||
| 186,559 | O’Reilly Automotive, Inc.* | 10,719,680 | ||||||
| 20,984,738 | ||||||||
| Consumer Finance 5.8% | ||||||||
| 750,553 | Dollar Financial Corp.* | 15,573,975 | ||||||
| 277,500 | First Cash Financial Services, Inc.* | 10,711,500 | ||||||
| 135,000 | Mahindra & Mahindra Financial Services Ltd. (India) | 2,343,088 | ||||||
| 28,628,563 | ||||||||
| Data Processing & Outsourced Services 3.0% | ||||||||
| 170,214 | Alliance Data Systems Corp.* | 14,619,680 | ||||||
| Distributors 4.6% | ||||||||
| 611,725 | LKQ Corp.* | 14,742,572 | ||||||
| 321,199 | Pool Corp. | 7,744,108 | ||||||
| 22,486,680 | ||||||||
| Diversified Banks 2.6% | ||||||||
| 235,526 | Axis Bank Ltd. (India) | 7,425,711 | ||||||
| 805,100 | Yes Bank Ltd. (India) | 5,587,587 | ||||||
| 13,013,298 | ||||||||
| Diversified Support Services 6.3% | ||||||||
| 635,092 | Copart, Inc.* | 27,518,536 | ||||||
| 158,871 | LPS Brasil — Consultoria de Imoveis S.A. (Brazil) | 3,740,899 | ||||||
| 31,259,435 | ||||||||
| Electrical Components & Equipment 1.8% | ||||||||
| 158,270 | Polypore International, Inc.* | 9,113,187 | ||||||
| Environmental & Facilities Services 2.8% | ||||||||
| 185,395 | Tetra Tech, Inc.* | 4,577,403 | ||||||
| 328,575 | Waste Connections, Inc. | 9,459,674 | ||||||
| 14,037,077 | ||||||||
| Health Care Distributors 2.4% | ||||||||
| 438,307 | PSS World Medical, Inc.* | 11,900,035 | ||||||
| Health Care Facilities 2.5% | ||||||||
| 475,469 | Emeritus Corp.* | 12,105,441 | ||||||
| Health Care Services 4.4% | ||||||||
| 88,172 | Catalyst Health Solutions, Inc.* | 4,931,460 | ||||||
| 251,014 | MEDNAX, Inc.* | 16,720,043 | ||||||
| 21,651,503 | ||||||||
| Shares | Value | |||||||
| Home Improvement Retail 0.8% | ||||||||
| 154,025 | Lumber Liquidators Holdings, Inc.* | $ | 3,849,085 | |||||
| Homefurnishing Retail 2.1% | ||||||||
| 417,507 | Aaron’s, Inc. | 10,587,978 | ||||||
| Industrial Machinery 4.2% | ||||||||
| 130,720 | Graco, Inc. | 5,946,453 | ||||||
| 338,655 | IDEX Corp. | 14,782,291 | ||||||
| 20,728,744 | ||||||||
| Internet Software & Services 0.5% | ||||||||
| 117,346 | DealerTrack Holdings, Inc.* | 2,694,264 | ||||||
| IT Consulting & Other Services 1.4% | ||||||||
| 84,025 | Cognizant Technology Solutions Corp., Class A* | 6,839,635 | ||||||
| Leisure Facilities 2.8% | ||||||||
| 368,843 | Life Time Fitness, Inc.* | 13,761,532 | ||||||
| Life Sciences Tools & Services 2.2% | ||||||||
| 278,130 | ICON plc ADR* (Ireland) | 6,004,827 | ||||||
| 68,040 | Techne Corp. | 4,871,664 | ||||||
| 10,876,491 | ||||||||
| Oil & Gas Equipment & Services 1.7% | ||||||||
| 103,545 | Dril-Quip, Inc.* | 8,183,161 | ||||||
| Oil & Gas Exploration & Production 1.9% | ||||||||
| 387,905 | Petrohawk Energy Corp.* | 9,519,189 | ||||||
| Personal Products 3.5% | ||||||||
| 209,681 | Herbalife Ltd. | 17,059,646 | ||||||
| Real Estate Services 1.0% | ||||||||
| 652,677 | China Real Estate Information Corp., ADR* (China) | 5,097,407 | ||||||
| Regional Banks 1.3% | ||||||||
| 6,596,411 | City Union Bank Ltd. (India) | 6,641,526 | ||||||
| Research & Consulting Services 3.7% | ||||||||
| 67,280 | Corporate Executive Board Co. (The) | 2,716,094 | ||||||
| 262,493 | CRA International, Inc.* | 7,567,673 | ||||||
| 405,052 | Resources Connection, Inc. | 7,853,958 | ||||||
| 18,137,725 | ||||||||
| Semiconductors 6.3% | ||||||||
| 133,940 | Hittite Microwave Corp.* | 8,541,354 | ||||||
| 387,065 | Melexis N.V.* (Belgium) | 6,915,350 | ||||||
| 378,644 | Micrel, Inc. | 5,104,121 | ||||||
| 108,525 | Power Integrations, Inc. | 4,159,763 | ||||||
| 151,643 | Silicon Laboratories, Inc.* | 6,552,494 | ||||||
| 31,273,082 | ||||||||
| Specialized Finance 5.2% | ||||||||
| 40,264 | Crisil Ltd. (India) | 5,778,441 | ||||||
| 344,680 | MSCI, Inc., Class A* | 12,691,118 | ||||||
| 86,745 | Portfolio Recovery Associates, Inc.* | 7,384,602 | ||||||
| 25,854,161 | ||||||||
| Specialty Stores 1.3% | ||||||||
| 180,640 | Hibbett Sports, Inc.* | 6,468,718 | ||||||
| Trading Companies & Distributors 2.6% | ||||||||
| 147,472 | MSC Industrial Direct Co., Inc., Class A | 10,097,408 | ||||||
| 143,605 | Rush Enterprises, Inc., Class B* | 2,497,291 | ||||||
| 12,594,699 | ||||||||
| Trucking 1.0% | ||||||||
| 143,982 | Old Dominion Freight Line, Inc.* | 5,052,328 | ||||||
| Total Common Stocks (cost $308,893,062) | 469,656,924 | |||||||
41
Table of Contents
| WASATCH CORE GROWTH FUND (WGROX) — Schedule of Investments (continued) | MARCH 31, 2011 (UNAUDITED) | |
Shares | Value | |||||||
| PREFERRED STOCKS 1.2% | ||||||||
| Regional Banks 1.2% | ||||||||
| 797,675 | Banco Daycoval S.A. Pfd. (Brazil) | $ | 5,982,991 | |||||
| Total Preferred Stocks (cost $5,303,460) | 5,982,991 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 3.5% | ||||||||
| Repurchase Agreement 3.5% | ||||||||
| $16,990,736 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $17,150,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $17,331,799; repurchase proceeds: $16,990,740 (cost $16,990,736) | $ | 16,990,736 | |||||
| Total Short-Term Investments (cost $16,990,736) | 16,990,736 | |||||||
| Total Investments (cost $331,187,258) 99.7% | 492,630,651 | |||||||
| Other Assets less Liabilities 0.3% | 1,559,381 | |||||||
| NET ASSETS 100.0% | $ | 494,190,032 | ||||||
*Non-income producing.
ADR American Depositary Receipt.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch Core Growth Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Belgium | 1.5 | |||
Brazil | 2.0 | |||
China | 2.0 | |||
India | 5.8 | |||
Ireland | 1.3 | |||
United States | 87.4 | |||
TOTAL | 100.0 | % | ||
42
Table of Contents
| WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Schedule of Investments | ||
| Shares | Value | |||||||
| COMMON STOCKS 94.3% | ||||||||
| Aerospace & Defense 0.9% | ||||||||
| 398,020 | S&T Dynamics Co. Ltd. (Korea) | $ | 6,422,311 | |||||
| Air Freight & Logistics 0.2% | ||||||||
| 67,280 | Blue Dart Express Ltd. (India) | 1,501,146 | ||||||
| Airport Services 1.3% | ||||||||
| 1,914,713 | TAV Havalimanlari Holding AS* (Turkey) | 9,128,903 | ||||||
| Apparel Retail 3.9% | ||||||||
| 527,665 | Cia. Hering (Brazil) | 9,732,225 | ||||||
| 1,713,510 | Mr Price Group Ltd. (South Africa) | 15,511,748 | ||||||
| 6,092,000 | Padini Holdings Berhad (Malaysia) | 2,132,074 | ||||||
| 27,376,047 | ||||||||
| Apparel, Accessories & Luxury Goods 3.2% | ||||||||
| 9,260 | LPP S.A. (Poland) | 6,726,708 | ||||||
| 2,351,220 | Ports Design Ltd. (China) | 5,425,160 | ||||||
| 939,500 | Restoque Comercio e Confeccoes de Roupas S.A. (Brazil) | 9,934,770 | ||||||
| 1,156,379 | Zhulian Corp. Berhad (Malaysia) | 679,605 | ||||||
| 22,766,243 | ||||||||
| Asset Management & Custody Banks 1.1% | ||||||||
| 462,131 | CETIP S.A. (Brazil) | 7,671,167 | ||||||
| Auto Parts & Equipment 1.3% | ||||||||
| 1,476,840 | Exide Industries Ltd. (India) | 4,734,035 | ||||||
| 192,628 | WABCO-TVS India Ltd. (India) | 4,354,053 | ||||||
| 9,088,088 | ||||||||
| Brewers 0.8% | ||||||||
| 1,681,020 | Guinness Anchor Berhad (Malaysia) | 5,339,302 | ||||||
| 9,900 | PT Multi Bintang Indonesia Tbk (Indonesia) | 295,721 | ||||||
| 5,635,023 | ||||||||
| Building Products 1.7% | ||||||||
| 4,283,383 | Dynasty Ceramic Public Co. Ltd.*** (Thailand) | 7,541,417 | ||||||
| 15,349,332 | Home Product Center Public Co. Ltd.*** (Thailand) | 4,643,623 | ||||||
| 12,185,040 | ||||||||
| Catalog Retail 0.7% | ||||||||
| 43,300 | Hyundai Home Shopping Network Corp. (Korea) | 4,795,980 | ||||||
| Coal & Consumable Fuels 1.5% | ||||||||
| 10,208,235 | PT Harum Energy Tbk* (Indonesia) | 10,492,530 | ||||||
| Commodity Chemicals 1.9% | ||||||||
| 2,997,955 | Berger Paints India Ltd. (India) | 6,050,363 | ||||||
| 337,520 | Castrol India Ltd. (India) | 3,316,922 | ||||||
| 173,061 | Kansai Nerolac Paints Ltd. (India) | 3,453,847 | ||||||
| 101,264 | Paints & Chemical Industries Co. S.A.E. (Egypt) | 696,333 | ||||||
| 13,517,465 | ||||||||
| Communications Equipment 0.7% | ||||||||
| 616,880 | Dasan Networks, Inc.* (Korea) | 4,937,514 | ||||||
| Computer & Electronics Retail 1.0% | ||||||||
| 733,226 | M Video OJSC*** (Russia) | 7,021,959 | ||||||
| Computer Storage & Peripherals 0.9% | ||||||||
| 1,022,753 | Simplo Technology Co. Ltd. (Taiwan) | 6,399,488 | ||||||
| Construction & Farm Machinery & Heavy Trucks 0.7% | ||||||||
| 240,400 | Turk Traktor ve Ziraat Makineleri AS (Turkey) | 5,185,800 | ||||||
| Shares | Value | |||||||
| Construction Materials 4.0% | ||||||||
| 967,849 | Adana Cimento Sanayii Turk Anonim Sirketi, Class A (Turkey) | $ | 3,410,701 | |||||
| 10,576 | Holcim Maroc S.A. (Morocco) | 3,331,170 | ||||||
| 24,944,405 | Holcim Philippines, Inc. (Philippines) | 6,494,742 | ||||||
| 64,303,100 | PT Holcim Indonesia Tbk* (Indonesia) | 14,954,209 | ||||||
| 28,190,822 | ||||||||
| Consumer Finance 2.7% | ||||||||
| 3,180,820 | Banco Compartamos S.A.B. de C.V.* (Mexico) | 5,732,026 | ||||||
| 776,601 | Mahindra & Mahindra Financial Services Ltd. (India) | 13,478,847 | ||||||
| 19,210,873 | ||||||||
| Department Stores 1.2% | ||||||||
| 314,300 | Marisa Lojas S.A. (Brazil) | 4,915,799 | ||||||
| 38,987,011 | PT Ramayana Lestari Sentosa Tbk (Indonesia) | 3,402,828 | ||||||
| 8,318,627 | ||||||||
| Distillers & Vintners 0.1% | ||||||||
| 77,255 | Distell Group Ltd. (South Africa) | 822,105 | ||||||
| Distributors 1.4% | ||||||||
| 8,886,300 | Dah Chong Hong Holdings Ltd. (Hong Kong) | 9,977,736 | ||||||
| Diversified Banks 5.1% | ||||||||
| 1,425,555 | Allahabad Bank Ltd. (India) | 7,416,274 | ||||||
| 306,037 | Capitec Bank Holdings Ltd. (South Africa) | 7,598,909 | ||||||
| 839,003 | National Societe Generale Bank S.A.E. (Egypt) | 5,311,785 | ||||||
| 29,681,945 | PT Bank Tabungan Pensiunan Nasional Tbk* (Indonesia) | 8,521,948 | ||||||
| 4,067,567 | Turkiye Sinai Kalkinma Bankasi AS (Turkey) | 7,114,356 | ||||||
| 35,963,272 | ||||||||
| Diversified Metals & Mining 0.5% | ||||||||
| 15,889,245 | Merafe Resources Ltd. (South Africa) | 3,475,626 | ||||||
| Electronic Components 1.0% | ||||||||
| 411,165 | Partron Co. Ltd. (Korea) | 7,309,100 | ||||||
| Electronic Equipment & Instruments 2.0% | ||||||||
| 2,230,479 | Chroma ATE, Inc. (Taiwan) | 7,205,737 | ||||||
| 3,970,900 | Test Research, Inc. (Taiwan) | 6,522,179 | ||||||
| 13,727,916 | ||||||||
| Food Retail 1.0% | ||||||||
| 636,745 | Eurocash S.A. (Poland) | 7,003,342 | ||||||
| Footwear 1.4% | ||||||||
| 1,151,525 | Bata India Ltd. (India) | 10,135,073 | ||||||
| Gas Utilities 1.3% | ||||||||
| 1,308,125 | Indraprastha Gas Ltd. (India) | 8,792,700 | ||||||
| General Merchandise Stores 2.1% | ||||||||
| 1,968,585 | Clicks Group Ltd. (South Africa) | 12,382,941 | ||||||
| 7,900,997 | PT Mitra Adiperkasa Tbk (Indonesia) | 2,495,290 | ||||||
| 14,878,231 | ||||||||
| Gold 1.3% | ||||||||
| 682,499 | Koza Altin Isletmeleri AS (Turkey) | 8,952,908 | ||||||
| Health Care Facilities 1.2% | ||||||||
| 6,597,658 | KPJ Healthcare Berhad (Malaysia) | 8,713,374 | ||||||
| Health Care Services 2.4% | ||||||||
| 642,200 | Diagnosticos da America S.A. (Brazil) | 8,291,292 | ||||||
| 593,400 | Fleury S.A. (Brazil) | 8,846,915 | ||||||
| 17,138,207 | ||||||||
43
Table of Contents
| WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| Health Care Supplies 1.0% | ||||||||
| 551,000 | St. Shine Optical Co. Ltd. (Taiwan) | $ | 6,782,922 | |||||
| Highways & Railtracks 2.1% | ||||||||
| 202,500 | Obrascon Huarte Lain Brasil S.A. (Brazil) | 7,706,342 | ||||||
| 18,310,380 | PT Jasa Marga (Indonesia) | 7,149,617 | ||||||
| 14,855,959 | ||||||||
| Home Improvement Retail 0.4% | ||||||||
| 9,290,750 | Ace Hardware Indonesia (Indonesia) | 2,720,805 | ||||||
| Homefurnishing Retail 1.1% | ||||||||
| 696,955 | Lewis Group Ltd. (South Africa) | 7,674,128 | ||||||
| Human Resource & Employment Services 0.3% | ||||||||
| 1,979,800 | Jobstreet Corp. Berhad (Malaysia) | 1,719,149 | ||||||
| Hypermarkets & Super Centers 1.3% | ||||||||
| 1,229,179 | Big C Supercenter Public Co. Ltd.*** (Thailand) | 3,220,778 | ||||||
| 1,205,030 | Siam Makro Public Co. Ltd.*** (Thailand) | 5,816,974 | ||||||
| 9,037,752 | ||||||||
| Industrial Gases 1.2% | ||||||||
| 70,000 | OCI Materials Co. Ltd. (Korea) | 8,563,745 | ||||||
| Industrial Machinery 1.5% | ||||||||
| 85,110 | Cummins India Ltd. (India) | 1,345,500 | ||||||
| 362,600 | Hy-Lok Corp. (Korea) | 5,255,791 | ||||||
| 292,718 | SKF India Ltd. (India) | 3,793,289 | ||||||
| 10,394,580 | ||||||||
| Internet Software & Services 1.6% | ||||||||
| 95,370 | Daum Communications Corp.* (Korea) | 8,520,224 | ||||||
| 4,900,000 | Pacific Online Ltd. (China) | 2,621,720 | ||||||
| 11,141,944 | ||||||||
| Investment Banking & Brokerage 0.7% | ||||||||
| 1,153,525 | Egyptian Financial Group-Hermes Holding (Egypt) | 4,250,593 | ||||||
| 40,610 | Egyptian Financial Group-Hermes Holding GDR (Egypt) | 299,702 | ||||||
| 4,550,295 | ||||||||
| Life & Health Insurance 0.5% | ||||||||
| 3,011,400 | Bangkok Life Assurance Public Co. Ltd. (Thailand) | 3,534,624 | ||||||
| Marine Ports & Services 2.1% | ||||||||
| 7,260,314 | International Container Terminal Services, Inc. (Philippines) | 6,975,924 | ||||||
| 470,725 | Santos Brasil Participacoes S.A.** (Brazil) | 7,663,335 | ||||||
| 14,639,259 | ||||||||
| Oil & Gas Exploration & Production 4.4% | ||||||||
| 2,589,865 | Afren plc* (United Kingdom) | 6,785,236 | ||||||
| 928,461 | Exillon Energy plc* (United Arab Emirates) | 6,122,295 | ||||||
| 166,155 | Gran Tierra Energy, Inc.* (Canada) | 1,340,871 | ||||||
| 297,820 | Pan Orient Energy Corp.* (Canada) | 2,116,862 | ||||||
| 5,151,029 | PetroNeft Resources plc* (United Kingdom) | 4,556,417 | ||||||
| 342,480 | Transglobe Energy Corp.* (Canada) | 5,200,707 | ||||||
| 418,450 | Zhaikmunai L.P. GDR* (Kazakhstan) | 5,167,858 | ||||||
| 31,290,246 | ||||||||
| Other Diversified Financial Services 0.9% | ||||||||
| 224,405 | Intergroup Financial Services Corp. (Peru) | 6,485,305 | ||||||
| Shares | Value | |||||||
| Packaged Foods & Meats 3.8% | ||||||||
| 283,455 | Dutch Lady Milk Industries Berhad (Malaysia) | $ | 1,531,102 | |||||
| 80,000 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 4,036,148 | ||||||
| 1,533,825 | Hsu Fu Chi International Ltd. (China) | 4,563,869 | ||||||
| 61,700 | Nestle Malaysia Berhad (Malaysia) | 953,383 | ||||||
| 956,270 | Pinar Sut Mamulleri Sanayii A.S. (Turkey) | 8,486,687 | ||||||
| 5,613,795 | PT Mayora Indah Tbk (Indonesia) | 7,285,200 | ||||||
| 26,856,389 | ||||||||
| Personal Products 1.9% | ||||||||
| 735,700 | Colgate-Palmolive India Ltd. (India) | 13,494,845 | ||||||
| 211,565 | PT Mandom Indonesia Tbk (Indonesia) | 177,367 | ||||||
| 13,672,212 | ||||||||
| Pharmaceuticals 1.7% | ||||||||
| 9,625 | Pharmstandard* *** (Russia) | 942,912 | ||||||
| 127,560 | Pharmstandard GDR* (Russia) | 3,565,302 | ||||||
| 18,569,195 | PT Kalbe Farma Tbk (Indonesia) | 7,250,676 | ||||||
| 11,758,890 | ||||||||
| Precious Metals & Minerals 0.2% | ||||||||
| 258,135 | Northam Platinum Ltd. (South Africa) | 1,678,679 | ||||||
| Railroads 1.3% | ||||||||
| 485,296 | Globaltrans Investment plc GDR (Russia) | 8,924,593 | ||||||
| Regional Banks 1.4% | ||||||||
| 178,804 | BLOM Bank SAL, GDR* (Lebanon) | 1,710,260 | ||||||
| 43,613,415 | PT Bank Tabungan Negara Tbk (Indonesia) | 8,414,647 | ||||||
| 10,124,907 | ||||||||
| Restaurants 2.5% | ||||||||
| 4,910,315 | Ajisen China Holdings Ltd. (China) | 9,473,215 | ||||||
| 231,600 | FU JI Food & Catering Services Holdings Ltd.* *** (China) | 298 | ||||||
| 6,970,985 | KFC Holdings Malaysia Berhad (Malaysia) | 8,400,857 | ||||||
| 17,874,370 | ||||||||
| Semiconductor Equipment 0.2% | ||||||||
| 182,920 | Hanmi Semiconductor Co. Ltd. (Korea) | 1,467,429 | ||||||
| Semiconductors 2.3% | ||||||||
| 236,020 | Melfas, Inc.* (Korea) | 9,671,452 | ||||||
| 3,053,800 | Sporton International, Inc. (Taiwan) | 6,843,569 | ||||||
| 16,515,021 | ||||||||
| Specialized Finance 2.0% | ||||||||
| 3,323,890 | Bolsa Mexicana de Valores S.A.B. de C.V. (Mexico) | 6,998,870 | ||||||
| 667,814 | JSE Ltd. (South Africa) | 6,909,101 | ||||||
| 13,907,971 | ||||||||
| Specialty Chemicals 0.4% | ||||||||
| 149,715 | Akzo Nobel India Ltd. (India) | 2,820,061 | ||||||
| Steel 0.5% | ||||||||
| 384,010 | MOIL Ltd. (India) | 3,409,978 | ||||||
| Thrifts & Mortgage Finance 2.4% | ||||||||
| 1,251,694 | Dewan Housing Finance Corp. Ltd. (India) | 7,494,165 | ||||||
| 682,547 | Gruh Finance Ltd. (India) | 5,434,204 | ||||||
| 783,000 | LIC Housing Finance Ltd. (India) | 3,954,944 | ||||||
| 16,883,313 | ||||||||
| Trading Companies & Distributors 2.2% | ||||||||
| 395,535 | iMarketKorea, Inc. (Korea) | 9,627,407 | ||||||
| 8,219,887 | PT Hexindo Adiperkasa Tbk (Indonesia) | 5,852,805 | ||||||
| 15,480,212 | ||||||||
44
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Trucking 1.4% | ||||||||
| 623,100 | Tegma Gestao Logistica (Brazil) | $ | 9,741,744 | |||||
| Water Utilities 0.5% | ||||||||
| 16,888,165 | Thai Tap Water Supply Public Co. Ltd.*** (Thailand) | 3,322,354 | ||||||
| Total Common Stocks (cost $579,576,007) | 664,563,452 | |||||||
| PREFERRED STOCKS 2.8% | ||||||||
| Construction & Farm Machinery & Heavy Trucks 1.0% | ||||||||
| 1,702,670 | Marcopolo S.A. Pfd. (Brazil) | 7,160,101 | ||||||
| Diversified Banks 1.8% | ||||||||
| 776,700 | Banco ABC Brasil S.A. Pfd. (Brazil) | 5,921,171 | ||||||
| 849,800 | Banco Industrial e Comercial S.A. (Bic Banco) Pfd. (Brazil) | 6,635,185 | ||||||
| 12,556,356 | ||||||||
| Total Preferred Stocks (cost $19,137,775) | 19,716,457 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 2.5% | ||||||||
| Repurchase Agreement 2.5% | ||||||||
| $17,721,807 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $17,890,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $18,079,643; repurchase proceeds: $17,721,812 (cost $17,721,807) | $ | 17,721,807 | |||||
| Total Short-Term Investments (cost $17,721,807) | 17,721,807 | |||||||
| Total Investments (cost $616,435,589) 99.6% | 702,001,716 | |||||||
| Other Assets less Liabilities 0.4% | 2,816,918 | |||||||
| NET ASSETS 100.0% | $ | 704,818,634 | ||||||
*Non-income producing.
**Common units.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
GDR Global Depositary Receipt.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch Emerging Markets Small Cap Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Brazil | 13.8 | |||
Canada | 1.3 | |||
China | 3.2 | |||
Egypt | 1.5 | |||
Hong Kong | 1.5 | |||
India | 15.9 | |||
Indonesia | 11.5 | |||
Kazakhstan | 0.8 | |||
Korea | 9.7 | |||
Lebanon | 0.2 | |||
Malaysia | 4.3 | |||
Mexico | 1.9 | |||
Morocco | 0.5 | |||
Peru | 0.9 | |||
Philippines | 2.0 | |||
Poland | 2.0 | |||
Russia | 3.0 | |||
South Africa | 8.2 | |||
Taiwan | 4.9 | |||
Thailand | 4.1 | |||
Turkey | 6.2 | |||
United Arab Emirates | 0.9 | |||
United Kingdom | 1.7 | |||
TOTAL | 100.0 | % | ||
45
Table of Contents
| WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments | ||
| Shares | Value | |||||||
| COMMON STOCKS 94.2% | ||||||||
| Advertising 0.2% | ||||||||
| 11,553 | 1000mercis* (France) | $ | 762,952 | |||||
| Aerospace & Defense 0.1% | ||||||||
| 9,500 | Bharat Electronics Ltd. (India) | 361,935 | ||||||
| Air Freight & Logistics 0.7% | ||||||||
| 3,359,260 | Aramex PJSC* (United Arab Emirates) | 1,646,360 | ||||||
| 3,700 | Forward Air Corp. | 113,331 | ||||||
| 407,600 | Goodpack Ltd. (Singapore) | 627,425 | ||||||
| 2,387,116 | ||||||||
| Airlines 0.1% | ||||||||
| 7,900 | Allegiant Travel Co. | 346,099 | ||||||
| Apparel Retail 1.0% | ||||||||
| 43,465 | Evergreen International Holdings Ltd.* (China) | 21,914 | ||||||
| 53,000 | Foschini Group Ltd. (The) (South Africa) | 663,088 | ||||||
| 17,250 | Jos. A. Bank Clothiers, Inc.* | 877,680 | ||||||
| 23,500 | Ross Stores, Inc. | 1,671,320 | ||||||
| 3,234,002 | ||||||||
| Apparel, Accessories & Luxury Goods 3.7% | ||||||||
| 2,350 | Bijou Brigitte AG (Germany) | 329,709 | ||||||
| 77,355 | Billabong International Ltd. (Australia) | 605,523 | ||||||
| 28,200 | Carter’s, Inc.* | 807,366 | ||||||
| 375,000 | China Lilang Ltd. (China) | 496,781 | ||||||
| 45,200 | Gerry Weber International AG (Germany) | 2,635,767 | ||||||
| 42,100 | Gildan Activewear, Inc.* (Canada) | 1,379,617 | ||||||
| 41,000 | LG Fashion Corp. (Korea) | 1,106,340 | ||||||
| 446,500 | Ports Design Ltd. (China) | 1,030,245 | ||||||
| 337,400 | Ted Baker plc (United Kingdom) | 3,586,851 | ||||||
| 470,000 | Xtep International Holdings Ltd. (China) | 318,570 | ||||||
| 12,296,769 | ||||||||
| Application Software 1.8% | ||||||||
| 11,000 | Aveva Group plc (United Kingdom) | 285,714 | ||||||
| 3,800 | Computer Modelling Group Ltd. (Canada) | 101,767 | ||||||
| 84,620 | Convio, Inc.* | 982,438 | ||||||
| 11,900 | Ebix, Inc.* | 281,435 | ||||||
| 4,200 | FactSet Research Systems, Inc. | 439,866 | ||||||
| 29,500 | Fidessa Group plc (United Kingdom) | 830,284 | ||||||
| 26,556 | RealPage, Inc.* | 736,398 | ||||||
| 3,900 | SimCorp A/S (Denmark) | 626,235 | ||||||
| 13,635 | Tyler Technologies, Inc.* | 323,286 | ||||||
| 20,500 | Ultimate Software Group, Inc.* | 1,204,375 | ||||||
| 5,811,798 | ||||||||
| Asset Management & Custody Banks 2.5% | ||||||||
| 525,000 | ARA Asset Management Ltd. (Singapore) | 733,159 | ||||||
| 18,500 | Bank of New York Mellon Corp. (The) | 552,595 | ||||||
| 42,029 | CETIP S.A. (Brazil) | 697,662 | ||||||
| 29,275,000 | CST Mining Group Ltd.* (Hong Kong) | 835,885 | ||||||
| 16,000 | Diamond Hill Investment Group, Inc. | 1,280,000 | ||||||
| 27,300 | Eaton Vance Corp. | 880,152 | ||||||
| 68,700 | SEI Investments Co. | 1,640,556 | ||||||
| 19,500 | State Street Corp. | 876,330 | ||||||
| 9,792 | T. Rowe Price Group, Inc. | 650,385 | ||||||
| 8,146,724 | ||||||||
| Auto Parts & Equipment 0.3% | ||||||||
| 639,000 | Minth Group Ltd. (China) | 1,068,418 | ||||||
| 1,235,000 | Norstar Founders Group Ltd.* *** (Hong Kong) | 16,313 | ||||||
| 1,084,731 | ||||||||
| Shares | Value | |||||||
| Automotive Retail 0.3% | ||||||||
| 64,000 | Halfords Group plc (United Kingdom) | $ | 358,406 | |||||
| 13,100 | O’Reilly Automotive, Inc.* | 752,726 | ||||||
| 1,111,132 | ||||||||
| Biotechnology 1.9% | ||||||||
| 40,000 | 3SBio, Inc. ADR* (China) | 691,600 | ||||||
| 252,125 | Abcam plc (United Kingdom) | 1,528,706 | ||||||
| 127,740 | Exact Sciences Corp.* | 940,167 | ||||||
| 69,000 | Myriad Genetics, Inc.* | 1,390,350 | ||||||
| 32,500 | Seegene, Inc.* (Korea) | 1,125,849 | ||||||
| 1,795,471 | Sino Biopharmaceutical Ltd. (China) | 669,689 | ||||||
| 6,346,361 | ||||||||
| Catalog Retail 0.2% | ||||||||
| 7,000 | Hyundai Home Shopping Network Corp. (Korea) | 775,332 | ||||||
| Commodity Chemicals 0.1% | ||||||||
| 27,500 | Tokai Carbon Korea Co. Ltd. (Korea) | 458,772 | ||||||
| Communications Equipment 0.4% | ||||||||
| 18,240 | Calix, Inc.* | 370,454 | ||||||
| 26,800 | Riverbed Technology, Inc.* | 1,009,020 | ||||||
| 1,379,474 | ||||||||
| Computer Hardware 0.6% | ||||||||
| 613,000 | Advantech Co. Ltd. (Taiwan) | 1,896,962 | ||||||
| Computer Storage & Peripherals 0.7% | ||||||||
| 126,200 | Intevac, Inc.* | 1,568,666 | ||||||
| 660 | Wacom Co. Ltd. (Japan) | 809,186 | ||||||
| 2,377,852 | ||||||||
| Construction & Engineering 0.7% | ||||||||
| 190,000 | Ausenco Ltd. (Australia) | 659,923 | ||||||
| 45,700 | Heerim Architects & Planners (Korea) | 325,789 | ||||||
| 79,500 | Lycopodium Ltd. (Australia) | 564,615 | ||||||
| 5,900 | Outotec Oyj (Finland) | 355,613 | ||||||
| 195,000 | Rotary Engineering Ltd. (Singapore) | 146,989 | ||||||
| 33,500 | SWECO AB, Class B (Sweden) | 345,750 | ||||||
| 2,398,679 | ||||||||
| Construction Materials 0.3% | ||||||||
| 95,500 | Corp Moctezuma S.A.B. de C.V. (Mexico) | 236,904 | ||||||
| 840,000 | PT Semen Gresik (Persero) Tbk (Indonesia) | 877,864 | ||||||
| 1,114,768 | ||||||||
| Consumer Finance 1.2% | ||||||||
| 304,000 | Banco Compartamos S.A.B. de C.V.* (Mexico) | 547,826 | ||||||
| 50,424 | Dollar Financial Corp.* | 1,046,298 | ||||||
| 38,000 | First Cash Financial Services, Inc.* | 1,466,800 | ||||||
| 59,300 | Mahindra & Mahindra Financial Services Ltd. (India) | 1,029,223 | ||||||
| 4,090,147 | ||||||||
| Data Processing & Outsourced Services 2.9% | ||||||||
| 81,200 | Cielo S.A. (Brazil) | 690,915 | ||||||
| 21,000 | Fidelity National Information Services, Inc. | 686,490 | ||||||
| 265 | GMO Payment Gateway, Inc. (Japan) | 967,993 | ||||||
| 78,300 | Redecard S.A. (Brazil) | 1,157,736 | ||||||
| 650 | SBI VeriTrans Co. Ltd. (Japan) | 368,294 | ||||||
| 4,850 | Syntel, Inc. | 253,315 | ||||||
| 311,100 | Wirecard AG (Germany) | 5,591,287 | ||||||
| 9,716,030 | ||||||||
| Department Stores 0.2% | ||||||||
| 1,846,100 | PCD Stores Ltd. (China) | 505,745 | ||||||
46
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Distributors 0.5% | ||||||||
| 57,800 | LKQ Corp.* | $ | 1,392,980 | |||||
| 11,700 | Pool Corp. | 282,087 | ||||||
| 1,675,067 | ||||||||
| Diversified Banks 1.0% | ||||||||
| 138,039 | Allahabad Bank Ltd. (India) | 718,131 | ||||||
| 22,100 | Axis Bank Ltd. (India) | 696,773 | ||||||
| 15,000 | Bank of Baroda (India) | 324,588 | ||||||
| 1,030 | HDFC Bank Ltd. ADR (India) | 175,038 | ||||||
| 81,800 | Union Bank of India Ltd. (India) | 640,900 | ||||||
| 32,200 | US Bancorp | 851,046 | ||||||
| 3,406,476 | ||||||||
| Diversified Metals & Mining 0.6% | ||||||||
| 8,000 | BHP Billiton plc ADR (United Kingdom) | 636,800 | ||||||
| 130,000 | Hindustan Zinc Ltd. (India) | 398,060 | ||||||
| 12,350 | Inmet Mining Corp. (Canada) | 868,265 | ||||||
| 1,903,125 | ||||||||
| Diversified Support Services 1.8% | ||||||||
| 55,600 | Copart, Inc.* | 2,409,148 | ||||||
| 240 | Prestige International, Inc. (Japan) | 366,582 | ||||||
| 35,800 | Ritchie Bros. Auctioneers, Inc. (Canada) | 1,007,770 | ||||||
| 106,200 | STR Holdings, Inc.* | 2,036,916 | ||||||
| 5,820,416 | ||||||||
| Drug Retail 0.3% | ||||||||
| 40,135 | Create SD Holdings Co. Ltd. (Japan) | 933,822 | ||||||
| Education Services 1.1% | ||||||||
| 1,200,000 | Advtech Ltd. (South Africa) | 957,730 | ||||||
| 3,250 | MegaStudy Co. Ltd. (Korea) | 500,410 | ||||||
| 426,000 | Navitas Ltd. (Australia) | 1,890,377 | ||||||
| 2,500 | Strayer Education, Inc. | 326,225 | ||||||
| 3,674,742 | ||||||||
| Electrical Components & Equipment 0.2% | ||||||||
| 9,900 | Emerson Electric Co. | 578,457 | ||||||
| Electronic Components 0.3% | ||||||||
| 16,284 | Amphenol Corp., Class A | 885,687 | ||||||
| Electronic Equipment & Instruments 0.9% | ||||||||
| 18,300 | National Instruments Corp. | 599,691 | ||||||
| 945,000 | Test Research, Inc. (Taiwan) | 1,552,157 | ||||||
| 90,475 | Viscom AG* (Germany) | 886,085 | ||||||
| 3,037,933 | ||||||||
| Electronic Manufacturing Services 1.2% | ||||||||
| 17,000 | IPG Photonics Corp.* | 980,560 | ||||||
| 160,700 | TTM Technologies, Inc.* | 2,918,312 | ||||||
| 3,898,872 | ||||||||
| Environmental & Facilities Services 1.3% | ||||||||
| 13,300 | Daiseki Co. Ltd. (Japan) | 260,388 | ||||||
| 866,500 | RPS Group plc (United Kingdom) | 2,979,498 | ||||||
| 44,900 | Tetra Tech, Inc.* | 1,108,581 | ||||||
| 4,348,467 | ||||||||
| Food Retail 0.5% | ||||||||
| 1,137,600 | BreadTalk Group Ltd. (Singapore) | 595,744 | ||||||
| 20,200 | Daikokutenbussan Co. Ltd. (Japan) | 649,955 | ||||||
| 32,700 | Shoprite Holdings Ltd. (South Africa) | 501,519 | ||||||
| 1,747,218 | ||||||||
| Shares | Value | |||||||
| Footwear 0.4% | ||||||||
| 491,000 | Anta Sports Products Ltd. (China) | $ | 762,861 | |||||
| 217,000 | Daphne International Holdings Ltd. (China) | 164,109 | ||||||
| 700,000 | Peak Sport Products Co. Ltd. (China) | 480,769 | ||||||
| 1,407,739 | ||||||||
| General Merchandise Stores 1.9% | ||||||||
| 298,500 | Clicks Group Ltd. (South Africa) | 1,877,647 | ||||||
| 71,900 | Dollar Tree, Inc.* | 3,991,888 | ||||||
| 39,500 | Reject Shop Ltd. (The) (Australia) | 497,177 | ||||||
| 6,366,712 | ||||||||
| Gold 0.3% | ||||||||
| 78,500 | Koza Altin Isletmeleri AS (Turkey) | 1,029,750 | ||||||
| Health Care Distributors 0.2% | ||||||||
| 7,300 | MWI Veterinary Supply, Inc.* | 588,964 | ||||||
| Health Care Equipment 3.4% | ||||||||
| 34,800 | Abaxis, Inc.* | 1,003,632 | ||||||
| 83,000 | AtriCure, Inc.* | 944,540 | ||||||
| 40,250 | Audika S.A. (France) | 1,171,271 | ||||||
| 216,800 | Cardica, Inc.* | 771,808 | ||||||
| 80,000 | Cardica, Inc. PIPE*** † | 284,800 | ||||||
| 37,700 | China Kanghui Holdings, Inc., ADR* (China) | 660,127 | ||||||
| 32,600 | Cyberonics, Inc.* | 1,037,006 | ||||||
| 20,000 | DexCom, Inc.* | 310,400 | ||||||
| 29,600 | DiaSorin S.p.A. (Italy) | 1,305,278 | ||||||
| 42,500 | Immunodiagnostic Systems Holdings plc (United Kingdom) | 567,328 | ||||||
| 3,901,161 | LMA International N.V.* (Singapore) | 990,535 | ||||||
| 15,000 | Medtronic, Inc. | 590,250 | ||||||
| 22,800 | NuVasive, Inc.* | 577,296 | ||||||
| 12,500 | St. Jude Medical, Inc.* | 640,750 | ||||||
| 24,500 | Synovis Life Technologies, Inc.* | 469,910 | ||||||
| 11,324,931 | ||||||||
| Health Care Facilities 0.8% | ||||||||
| 52,261 | AmSurg Corp.* | 1,329,520 | ||||||
| 268,875 | CVS Group plc* (United Kingdom) | 445,404 | ||||||
| 300,000 | Life Healthcare Group Holdings Ltd. (South Africa) | 704,552 | ||||||
| 2,479,476 | ||||||||
| Health Care Services 1.7% | ||||||||
| 40,000 | Bio-Reference Laboratories, Inc.* | 897,600 | ||||||
| 18,314 | CorVel Corp.* | 973,938 | ||||||
| 24,500 | Diagnosticos da America S.A. (Brazil) | 316,314 | ||||||
| 45,000 | Fleury S.A. (Brazil) | 670,898 | ||||||
| 34,142 | Healthways, Inc.* | 524,763 | ||||||
| 27,100 | IPC The Hospitalist Co., Inc.* | 1,230,611 | ||||||
| 12,700 | LHC Group, Inc.* | 381,000 | ||||||
| 9,900 | MEDNAX, Inc.* | 659,439 | ||||||
| 5,654,563 | ||||||||
| Health Care Technology 0.7% | ||||||||
| 27,000 | athenahealth, Inc.* | 1,218,510 | ||||||
| 15,200 | Computer Programs and Systems, Inc. | 977,056 | ||||||
| 2,195,566 | ||||||||
| Home Improvement Retail 0.6% | ||||||||
| 2,850,000 | Ace Hardware Indonesia (Indonesia) | 834,625 | ||||||
| 26,800 | Clas Ohlson AB (Sweden) | 436,177 | ||||||
| 73,100 | Swedol AB, Class B (Sweden) | 768,967 | ||||||
| 2,039,769 | ||||||||
| Homefurnishing Retail 0.6% | ||||||||
| 42,600 | Aaron’s, Inc. | 1,080,336 | ||||||
| 66,000 | Lewis Group Ltd. (South Africa) | 726,722 | ||||||
| 1,807,058 | ||||||||
47
Table of Contents
| WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| Human Resource & Employment Services 1.4% | ||||||||
| 8,100 | Amadeus Fire AG (Germany) | $ | 378,699 | |||||
| 380 | Benefit One, Inc. (Japan) | 264,328 | ||||||
| 8,000 | Brunel International N.V. (Netherlands) | 377,433 | ||||||
| 175,300 | Michael Page International plc (United Kingdom) | 1,449,145 | ||||||
| 35,700 | Robert Half International, Inc. | 1,092,420 | ||||||
| 169,900 | Sthree plc (United Kingdom) | 1,118,412 | ||||||
| 4,680,437 | ||||||||
| Industrial Gases 0.2% | ||||||||
| 975,000 | Yingde Gases Group Co.* (China) | 815,107 | ||||||
| Industrial Machinery 3.2% | ||||||||
| 116,500 | AIA Engineering Ltd. (India) | 901,278 | ||||||
| 4,100 | Burckhardt Compression Holding AG (Switzerland) | 1,294,325 | ||||||
| 1,021,000 | China Automation Group Ltd. (China) | 793,158 | ||||||
| 12,500 | Danaher Corp. | 648,750 | ||||||
| 16,700 | Graco, Inc. | 759,683 | ||||||
| 165,900 | Hy-Lok Corp. (Korea) | 2,404,677 | ||||||
| 12,900 | IDEX Corp. | 563,085 | ||||||
| 12,700 | Illinois Tool Works, Inc. | 682,244 | ||||||
| 7,500 | Konecranes Oyj (Finland) | 347,985 | ||||||
| 2,800 | Rational AG (Germany) | 668,062 | ||||||
| 28,400 | Rotork plc (United Kingdom) | 797,497 | ||||||
| 41,100 | Weg S.A. (Brazil) | 543,266 | ||||||
| 10,404,010 | ||||||||
| Insurance Brokers 0.4% | ||||||||
| 29,900 | Brown & Brown, Inc. | 771,420 | ||||||
| 38,700 | eHealth, Inc.* | 514,710 | ||||||
| 1,286,130 | ||||||||
| Internet Retail 1.4% | ||||||||
| 47,450 | ASOS plc* (United Kingdom) | 1,303,439 | ||||||
| 96,000 | Start Today Co. Ltd. (Japan) | 1,489,476 | ||||||
| 230,000 | Webjet Ltd. (Australia) | 465,005 | ||||||
| 135,000 | Wotif.com Holdings Ltd. (Australia) | 764,225 | ||||||
| 40,000 | Yoox S.p.A.* (Italy) | 556,719 | ||||||
| 4,578,864 | ||||||||
| Internet Software & Services 2.3% | ||||||||
| 15,000 | Akamai Technologies, Inc.* | 570,000 | ||||||
| 120,000 | carsales.com.au Ltd. (Australia) | 644,475 | ||||||
| 17,100 | Daum Communications Corp.* (Korea) | 1,527,690 | ||||||
| 27,000 | Macromill, Inc. (Japan) | 341,772 | ||||||
| 66,600 | Neurones (France) | 822,892 | ||||||
| 1,230,800 | Pacific Online Ltd. (China) | 658,533 | ||||||
| 59,825 | SciQuest, Inc.* | 868,659 | ||||||
| 70,317 | SPS Commerce, Inc.* | 1,090,617 | ||||||
| 20,415 | VistaPrint N.V.* | 1,059,539 | ||||||
| 7,584,177 | ||||||||
| Investment Banking & Brokerage 0.5% | ||||||||
| 18,500 | Charles Schwab Corp. (The) | 333,555 | ||||||
| 15,775 | FXCM, Inc. | 205,548 | ||||||
| 390 | GCA Savvian Group Corp.* (Japan) | 647,414 | ||||||
| 21,500 | optionsXpress Holdings, Inc.* | 393,665 | ||||||
| 1,580,182 | ||||||||
| Shares | Value | |||||||
| IT Consulting & Other Services 3.4% | ||||||||
| 47,175 | Alten Ltd. (France) | $ | 1,782,816 | |||||
| 9,600 | Cognizant Technology Solutions Corp., Class A* | 781,440 | ||||||
| 49,200 | Connecta AB (Sweden) | 744,105 | ||||||
| 960,000 | CSE Global Ltd. (Singapore) | 959,772 | ||||||
| 1,624,018 | CSG Ltd. (Australia) | 2,357,295 | ||||||
| 1,675 | Future Architect, Inc. (Japan) | 680,500 | ||||||
| 120,000 | Glodyne Technoserve Ltd. (India) | 1,143,626 | ||||||
| 175,200 | HiQ International AB* (Sweden) | 1,059,896 | ||||||
| 5,900 | International Business Machines Corp. | 962,113 | ||||||
| 106,500 | SMS Management & Technology Ltd. (Australia) | 714,412 | ||||||
| 11,185,975 | ||||||||
| Life Sciences Tools & Services 3.6% | ||||||||
| 55,400 | CMIC Co. Ltd. (Japan) | 927,007 | ||||||
| 28,000 | Covance, Inc.* | 1,532,160 | ||||||
| 1,180 | EPS Co. Ltd. (Japan) | 2,769,693 | ||||||
| 97,700 | ICON plc ADR* (Ireland) | 2,109,343 | ||||||
| 60,200 | LINICAL Co. Ltd. (Japan) | 240,945 | ||||||
| 34,200 | Pharmaceutical Product Development, Inc. | 947,682 | ||||||
| 45,710 | ShangPharma Corp. ADR* (China) | 553,548 | ||||||
| 19,600 | Waters Corp.* | 1,703,240 | ||||||
| 63,500 | WuXi PharmaTech Cayman, Inc. ADR* (China) | 981,710 | ||||||
| 11,765,328 | ||||||||
| Mortgage REITs 0.3% | ||||||||
| 35,600 | Capstead Mortgage Corp. | 454,968 | ||||||
| 36,300 | MFA Financial, Inc. | 297,660 | ||||||
| 20,200 | Redwood Trust, Inc. | 314,110 | ||||||
| 1,066,738 | ||||||||
| Multi-Line Insurance 0.3% | ||||||||
| 30,600 | HCC Insurance Holdings, Inc. | 958,086 | ||||||
| Oil & Gas Drilling 0.1% | ||||||||
| 18,000 | Ensign Energy Services, Inc. (Canada) | 339,073 | ||||||
| Oil & Gas Equipment & Services 1.5% | ||||||||
| 951,000 | Anhui Tianda Oil Pipe Co. Ltd., Class H (China) | 308,232 | ||||||
| 2,400 | Core Laboratories N.V. | 245,208 | ||||||
| 41,300 | Gulf Island Fabrication, Inc. | 1,328,621 | ||||||
| 47,800 | Lamprell plc (United Arab Emirates) | 270,990 | ||||||
| 26,900 | Pason Systems, Inc. (Canada) | 437,071 | ||||||
| 25,300 | Petrofac Ltd. (United Kingdom) | 605,874 | ||||||
| 6,100 | Schoeller-Bleckmann Oilfield Equipment AG (Austria) | 600,968 | ||||||
| 38,700 | TGS-NOPEC Geophysical Co. ASA (Norway) | 1,040,479 | ||||||
| 4,837,443 | ||||||||
| Oil & Gas Exploration & Production 2.5% | ||||||||
| 486,000 | Afren plc* (United Kingdom) | 1,273,280 | ||||||
| 32,000 | Exillon Energy plc* (United Arab Emirates) | 211,009 | ||||||
| 41,600 | Gran Tierra Energy, Inc.* (Canada) | 335,712 | ||||||
| 119,000 | Pan Orient Energy Corp.* (Canada) | 845,835 | ||||||
| 1,320,000 | Petroamerica Oil Corp.* (Canada) | 354,052 | ||||||
| 27,500 | Petrominerales Ltd. (Colombia) | 1,042,296 | ||||||
| 919,528 | PetroNeft Resources plc* (United Kingdom) | 813,382 | ||||||
| 24,175 | Premier Oil plc* (United Kingdom) | 775,279 | ||||||
| 57,200 | Selan Exploration Technology Ltd. (India) | 427,124 | ||||||
| 57,000 | Transglobe Energy Corp.* (Canada) | 865,570 | ||||||
| 83,000 | Westfire Energy Ltd.* (Canada) | 750,926 | ||||||
| 45,000 | Zhaikmunai L.P. GDR* (Kazakhstan) | 555,750 | ||||||
| 8,250,215 | ||||||||
48
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Oil & Gas Storage & Transportation 0.2% | ||||||||
| 1,275,000 | Circle Oil plc* (Ireland) | $ | 748,462 | |||||
| Other Diversified Financial Services 0.2% | ||||||||
| 514,000 | Count Financial Ltd. (Australia) | 655,486 | ||||||
| Packaged Foods & Meats 0.5% | ||||||||
| 5,500 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 277,485 | ||||||
| 418,291 | Hsu Fu Chi International Ltd.* (China) | 1,244,618 | ||||||
| 1,522,103 | ||||||||
| Personal Products 0.6% | ||||||||
| 105,400 | Atrium Innovations, Inc.* (Canada) | 1,797,351 | ||||||
| 11,105 | Natura Cosmeticos S.A. (Brazil) | 314,057 | ||||||
| 2,111,408 | ||||||||
| Pharmaceuticals 1.8% | ||||||||
| 141,500 | China Nuokang Bio-Pharmaceutical, Inc. ADR* (China) | 650,900 | ||||||
| 243,000 | China Shineway Pharmaceutical Group Ltd. (China) | 583,196 | ||||||
| 33,265 | Daewoong Pharmaceutical Co. Ltd. (Korea) | 1,349,462 | ||||||
| 60,100 | Egyptian International Pharmaceutical Industrial Co. (Egypt) | 361,034 | ||||||
| 100,000 | Ipca Laboratories Ltd. (India) | 661,509 | ||||||
| 77,522 | ISTA Pharmaceuticals, Inc.* | 785,298 | ||||||
| 11,000 | Johnson & Johnson | 651,750 | ||||||
| 30,200 | Medy-Tox, Inc.* (Korea) | 657,988 | ||||||
| 52,200 | Whanin Pharmaceutical Co. Ltd. (Korea) | 345,002 | ||||||
| 6,046,139 | ||||||||
| Precious Metals & Minerals 0.2% | ||||||||
| 18,000 | Pan American Silver Corp. (Canada) | 668,675 | ||||||
| Property & Casualty Insurance 0.3% | ||||||||
| 502,725 | Beazley plc (United Kingdom) | 996,111 | ||||||
| Real Estate Development 0.2% | ||||||||
| 1,213,000 | SPG Land Holdings Ltd. (China) | 569,443 | ||||||
| Real Estate Services 0.6% | ||||||||
| 265,500 | China Real Estate Information Corp. ADR* (China) | 2,073,555 | ||||||
| Regional Banks 0.5% | ||||||||
| 8,500 | Canadian Western Bank (Canada) | 273,147 | ||||||
| 10,000 | City National Corp. | 570,500 | ||||||
| 33,600 | First of Long Island Corp. (The) | 932,400 | ||||||
| 1,776,047 | ||||||||
| Research & Consulting Services 4.2% | ||||||||
| 14,375 | Bureau Veritas S.A. (France) | 1,131,420 | ||||||
| 5,525 | Campbell Brothers Ltd. (Australia) | 265,508 | ||||||
| 71,100 | CRA International, Inc.* | 2,049,813 | ||||||
| 16,200 | Exponent, Inc.* | 722,682 | ||||||
| 25,200 | FTI Consulting, Inc.* | 965,916 | ||||||
| 61,100 | Huron Consulting Group, Inc.* | 1,691,859 | ||||||
| 17,000 | Intertek Group plc (United Kingdom) | 556,117 | ||||||
| 150 | Nihon M&A Center, Inc. (Japan) | 807,414 | ||||||
| 192,535 | Resources Connection, Inc. | 3,733,254 | ||||||
| 130 | SGS S.A. (Switzerland) | 231,978 | ||||||
| 32,000 | Stantec, Inc.* (Canada) | 958,003 | ||||||
| 20,030 | Verisk Analytics, Inc., Class A* | 656,183 | ||||||
| 13,770,147 | ||||||||
| Shares | Value | |||||||
| Restaurants 1.2% | ||||||||
| 387,000 | Ajisen China Holdings Ltd. (China) | $ | 746,619 | |||||
| 740,000 | KFC Holdings Malaysia Berhad (Malaysia) | 891,787 | ||||||
| 11,900 | Shinsegae Food Co. Ltd. (Korea) | 929,696 | ||||||
| 29,800 | Tim Hortons, Inc. (Canada) | 1,350,238 | ||||||
| 3,918,340 | ||||||||
| Semiconductor Equipment 2.2% | ||||||||
| 40,500 | Cabot Microelectronics Corp.* | 2,116,125 | ||||||
| 237,191 | Camtek Ltd.* (Israel) | 944,020 | ||||||
| 8,100 | Disco Corp. (Japan) | 554,647 | ||||||
| 139,000 | Entegris, Inc.* | 1,219,030 | ||||||
| 29,720 | Eugene Technology Co. Ltd. (Korea) | 445,685 | ||||||
| 75,000 | Hanmi Semiconductor Co. Ltd. (Korea) | 601,668 | ||||||
| 52,275 | Koh Young Technology, Inc.* (Korea) | 1,310,509 | ||||||
| 7,191,684 | ||||||||
| Semiconductors 7.6% | ||||||||
| 15,000 | Altera Corp. | 660,300 | ||||||
| 24,950 | Hittite Microwave Corp.* | 1,591,062 | ||||||
| 25,900 | Linear Technology Corp. | 871,017 | ||||||
| 20,800 | Maxim Integrated Products, Inc. | 532,480 | ||||||
| 315,100 | Melexis N.V. (Belgium) | 5,629,615 | ||||||
| 168,500 | Micrel, Inc. | 2,271,380 | ||||||
| 43,000 | Microchip Technology, Inc. | 1,634,430 | ||||||
| 538,814 | O2Micro International Ltd. ADR* (China) | 4,094,986 | ||||||
| 80,100 | Power Integrations, Inc. | 3,070,233 | ||||||
| 15,800 | Silicon Laboratories, Inc.* | 682,718 | ||||||
| 531,630 | Sporton International, Inc. (Taiwan) | 1,191,383 | ||||||
| 26,900 | Standard Microsystems Corp.* | 663,354 | ||||||
| 55,022 | Supertex, Inc.* | 1,225,890 | ||||||
| 53,500 | Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan) | 651,630 | ||||||
| 14,400 | Volterra Semiconductor Corp.* | 357,552 | ||||||
| 25,128,030 | ||||||||
| Specialized Consumer Services 0.1% | ||||||||
| 165 | Best Bridal, Inc. (Japan) | 143,020 | ||||||
| 230 | NOVARESE, Inc. (Japan) | 156,106 | ||||||
| 299,126 | ||||||||
| Specialized Finance 1.5% | ||||||||
| 142,000 | Bolsa Mexicana de Valores S.A.B. de C.V. (Mexico) | 298,999 | ||||||
| 1,800 | Crisil Ltd. (India) | 258,325 | ||||||
| 55,000 | Gain Capital Holdings, Inc.* | 421,850 | ||||||
| 9,000 | ICRA Ltd. (India) | 216,953 | ||||||
| 1,600 | IntercontinentalExchange, Inc.* | 197,664 | ||||||
| 50,000 | JSE Ltd. (South Africa) | 517,292 | ||||||
| 28,400 | MSCI, Inc., Class A* | 1,045,688 | ||||||
| 16,300 | Portfolio Recovery Associates, Inc.* | 1,387,619 | ||||||
| 16,500 | TMX Group, Inc. (Canada) | 660,783 | ||||||
| 5,005,173 | ||||||||
| Specialty Chemicals 0.7% | ||||||||
| 21,870 | C. Uyemura & Co. Ltd. (Japan) | 1,040,110 | ||||||
| 1,299,000 | EcoGreen Fine Chemical Group Ltd. (Hong Kong) | 434,390 | ||||||
| 80 | Japan Pure Chemical Co. Ltd. (Japan) | 230,500 | ||||||
| 15,700 | TechnoSemiChem Co. Ltd. (Korea) | 553,890 | ||||||
| 2,258,890 | ||||||||
| Specialty Stores 1.2% | ||||||||
| 121,533 | Big 5 Sporting Goods Corp. | 1,448,673 | ||||||
| 81,188 | easyhome Ltd. (Canada) | 703,543 | ||||||
| 34,618 | Hibbett Sports, Inc.* | 1,239,671 | ||||||
| 350,000 | Kathmandu Holdings Ltd. (New Zealand) | 607,824 | ||||||
| 3,999,711 | ||||||||
49
Table of Contents
| WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| Steel 0.5% | ||||||||
| 116,500 | Ferrexpo plc (United Kingdom) | $ | 809,425 | |||||
| 75,272 | MOIL Ltd. (India) | 668,409 | ||||||
| 1,477,834 | ||||||||
| Systems Software 1.6% | ||||||||
| 172,000 | KPIT Cummins Infosystems Ltd. (India) | 647,580 | ||||||
| 81,700 | OPNET Technologies, Inc. | 3,185,483 | ||||||
| 3,410 | Simplex Holdings, Inc. (Japan) | 1,455,262 | ||||||
| 5,288,325 | ||||||||
| Textiles 0.1% | ||||||||
| 295,000 | S. Kumars Nationwide Ltd.* (India) | 362,507 | ||||||
| Thrifts & Mortgage Finance 1.2% | ||||||||
| 130,000 | Dewan Housing Finance Corp. Ltd. (India) | 778,338 | ||||||
| 18,475 | Home Capital Group, Inc. (Canada) | 1,084,657 | ||||||
| 23,000 | Housing Development Finance Corp. Ltd. (India) | 359,996 | ||||||
| 199,500 | LIC Housing Finance Ltd. (India) | 1,007,677 | ||||||
| 34,100 | Washington Federal, Inc. | 591,294 | ||||||
| 3,821,962 | ||||||||
| Trading Companies & Distributors 4.0% | ||||||||
| 7,100 | Fastenal Co. | 460,293 | ||||||
| 30,380 | Houston Wire & Cable Co. | 444,156 | ||||||
| 86,279 | Indutrade AB (Sweden) | 2,842,676 | ||||||
| 23,500 | MISUMI Group, Inc. (Japan) | 585,021 | ||||||
| 112,384 | MonotaRO Co. Ltd. (Japan) | 1,322,324 | ||||||
| 38,200 | MSC Industrial Direct Co., Inc., Class A | 2,615,554 | ||||||
| 88,905 | Richelieu Hardware Ltd. (Canada) | 2,751,483 | ||||||
| 15,097 | Rush Enterprises, Inc., Class B* | 262,537 | ||||||
| 8,480 | Thermador Groupe (France) | 1,558,403 | ||||||
| 3,700 | W.W. Grainger, Inc. | 509,416 | ||||||
| 13,351,863 | ||||||||
| Trucking 1.6% | ||||||||
| 86,000 | Knight Transportation, Inc. | 1,655,500 | ||||||
| 140,000 | Tegma Gestao Logistica (Brazil) | 2,188,804 | ||||||
| 39,000 | Trancom Co. Ltd. (Japan) | 666,221 | ||||||
| 41,600 | Universal Truckload Services, Inc.* | 717,600 | ||||||
| 5,228,125 | ||||||||
| Wireless Telecommunication Services 0.1% | ||||||||
| 6,200 | NII Holdings, Inc.* | 258,354 | ||||||
| Total Common Stocks (cost $223,413,490) | 311,267,455 | |||||||
| PREFERRED STOCKS 0.4% | ||||||||
| Diversified Banks 0.2% | ||||||||
| 96,500 | Banco Industrial e Comercial S.A. (Bic Banco) Pfd. (Brazil) | 753,466 | ||||||
| Regional Banks 0.2% | ||||||||
| 80,800 | Banco Daycoval S.A. Pfd. (Brazil) | 606,044 | ||||||
| Total Preferred Stocks (cost $1,098,194) | 1,359,510 | |||||||
| Shares | Value | |||||||
| WARRANTS 0.0% | ||||||||
| Health Care Equipment 0.0% | ||||||||
| 40,000 | Cardica, Inc., expiring 9/29/14* *** † | $ | 84,400 | |||||
| Restaurants 0.0% | ||||||||
| 29,600 | KFC Holdings Malaysia Berhad, expiring 9/14/15* (Malaysia) | 14,073 | ||||||
| Total Warrants (cost $5,000) | 98,473 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 6.2% | ||||||||
| Repurchase Agreement 6.2% | ||||||||
| $20,422,375 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $20,615,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $20,833,530; repurchase proceeds: $20,422,381 (cost $20,422,375) | $ | 20,422,375 | |||||
| Total Short-Term Investments (cost $20,422,375) | 20,422,375 | |||||||
| Total Investments (cost $244,939,059) 100.8% | 333,147,813 | |||||||
| Liabilities less Other Assets (0.8%) | (2,646,986 | ) | ||||||
| NET ASSETS 100.0% | $ | 330,500,827 | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
PIPE Private Investment in a Public Equity.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
| |||||||
50
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
At March 31, 2011, Wasatch Global Opportunities Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Australia | 3.2 | |||
Austria | 0.2 | |||
Belgium | 1.8 | |||
Brazil | 2.5 | |||
Canada | 5.6 | |||
China | 6.7 | |||
Colombia | 0.3 | |||
Denmark | 0.2 | |||
Egypt | 0.1 | |||
Finland | 0.2 | |||
France | 2.3 | |||
Germany | 3.4 | |||
Hong Kong | 0.4 | |||
India | 3.9 | |||
Indonesia | 0.6 | |||
Ireland | 0.9 | |||
Israel | 0.3 | |||
Italy | 0.6 | |||
Japan | 6.0 | |||
Kazakhstan | 0.2 | |||
Korea | 4.6 | |||
Malaysia | 0.3 | |||
Mexico | 0.4 | |||
Netherlands | 0.1 | |||
New Zealand | 0.2 | |||
Norway | 0.3 | |||
Singapore | 1.3 | |||
South Africa | 1.9 | |||
Sweden | 2.0 | |||
Switzerland | 0.5 | |||
Taiwan | 1.7 | |||
Turkey | 0.3 | |||
United Arab Emirates | 0.7 | |||
United Kingdom | 6.9 | |||
United States | 39.4 | |||
TOTAL | 100.0 | % | ||
51
Table of Contents
| WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Schedule of Investments | ||
| Shares | Value | |||||||
| COMMON STOCKS 92.6% | ||||||||
| Advertising 1.5% | ||||||||
| 16,850 | 1000mercis* (France) | $ | 1,112,763 | |||||
| Application Software 1.5% | ||||||||
| 14,560 | Fidessa Group plc (United Kingdom) | 409,794 | ||||||
| 21,410 | ORC Software AB (Sweden) | 339,955 | ||||||
| 2,485 | SimCorp A/S (Denmark) | 399,024 | ||||||
| 1,148,773 | ||||||||
| Asset Management & Custody Banks 0.7% | ||||||||
| 32,087 | CETIP S.A. (Brazil) | 532,630 | ||||||
| Biotechnology 2.8% | ||||||||
| 206,800 | Abcam plc (United Kingdom) | 1,253,888 | ||||||
| 44,370 | Myriad Genetics, Inc.* | 894,055 | ||||||
| 2,147,943 | ||||||||
| Commercial Printing 0.2% | ||||||||
| 24,000 | Innerworkings, Inc.* | 177,120 | ||||||
| Communications Equipment 2.5% | ||||||||
| 2,600 | Acme Packet, Inc.* | 184,496 | ||||||
| 31,088 | Cisco Systems, Inc.* | 533,159 | ||||||
| 13,000 | Finisar Corp.* | 319,800 | ||||||
| 85,740 | Infinera Corp.* | 719,359 | ||||||
| 4,600 | Riverbed Technology, Inc.* | 173,190 | ||||||
| 1,930,004 | ||||||||
| Computer Hardware 3.3% | ||||||||
| 6,150 | Apple, Inc.* | 2,142,968 | ||||||
| 18,000 | Silicon Graphics International Corp.* | 385,200 | ||||||
| 2,528,168 | ||||||||
| Computer Storage & Peripherals 1.6% | ||||||||
| 19,725 | EMC Corp.* | 523,699 | ||||||
| 591 | Wacom Co. Ltd. (Japan) | 724,589 | ||||||
| 1,248,288 | ||||||||
| Construction & Farm Machinery & Heavy Trucks 0.8% | ||||||||
| 51,175 | Takeuchi Manufacturing Co. Ltd. (Japan) | 616,321 | ||||||
| Data Processing & Outsourced Services 9.1% | ||||||||
| 20,470 | Alliance Data Systems Corp.* | 1,758,168 | ||||||
| 4,625 | MasterCard, Inc., Class A | 1,164,205 | ||||||
| 10,000 | Syntel, Inc. | 522,300 | ||||||
| 15,500 | Visa, Inc., Class A | 1,141,110 | ||||||
| 133,165 | Wirecard AG (Germany) | 2,393,326 | ||||||
| 6,979,109 | ||||||||
| Diversified Chemicals 0.6% | ||||||||
| 12,325 | LSB Industries, Inc.* | 488,563 | ||||||
| Diversified Support Services 1.1% | ||||||||
| 19,385 | Copart, Inc.* | 839,952 | ||||||
| Drug Retail 1.1% | ||||||||
| 34,661 | Create SD Holdings Co. Ltd. (Japan) | 806,459 | ||||||
| Health Care Distributors 0.7% | ||||||||
| 18,880 | PSS World Medical, Inc.* | 512,592 | ||||||
| Health Care Equipment 4.6% | ||||||||
| 10,965 | Cyberonics, Inc.* | 348,797 | ||||||
| 38,515 | DiaSorin S.p.A. (Italy) | 1,698,404 | ||||||
| 26,786 | Mindray Medical International Ltd. ADR (China) | 675,007 | ||||||
| 18,100 | NuVasive, Inc.* | 458,292 | ||||||
| 9,185 | Stratec Biomedical Systems AG (Germany) | 367,856 | ||||||
| 3,548,356 | ||||||||
| Shares | Value | |||||||
| Health Care Facilities 3.4% | ||||||||
| 1,234,300 | CVS Group plc* (United Kingdom) | $ | 2,044,677 | |||||
| 21,775 | VCA Antech, Inc.* | 548,294 | ||||||
| 2,592,971 | ||||||||
| Health Care Services 4.6% | ||||||||
| 22,088 | Bio-Reference Laboratories, Inc.* | 495,655 | ||||||
| 11,987 | CorVel Corp.* | 637,469 | ||||||
| 113,500 | Diagnosticos da America S.A. (Brazil) | 1,465,371 | ||||||
| 12,600 | Express Scripts, Inc.* | 700,686 | ||||||
| 23,380 | Servizi Italia S.p.A. (Italy) | 226,287 | ||||||
| 3,525,468 | ||||||||
| Health Care Supplies 2.5% | ||||||||
| 32,209 | Sartorius Stedim Biotech (France) | 1,887,823 | ||||||
| Health Care Technology 0.4% | ||||||||
| 59,603 | RaySearch Laboratories AB (Sweden) | 335,024 | ||||||
| Home Entertainment Software 1.3% | ||||||||
| 73,265 | Activision Blizzard, Inc. | 803,717 | ||||||
| 17,701 | UbiSoft Entertainment S.A.* (France) | 181,227 | ||||||
| 984,944 | ||||||||
| Home Improvement Retail 1.3% | ||||||||
| 106,100 | Byggmax Group AB* (Sweden) | 1,023,448 | ||||||
| Hotels, Resorts & Cruise Lines 0.5% | ||||||||
| 9,625 | Ctrip.com International Ltd. ADR* (China) | 399,341 | ||||||
| Human Resource & Employment Services 0.5% | ||||||||
| 9,032 | Amadeus Fire AG (Germany) | 422,273 | ||||||
| Industrial Machinery 0.6% | ||||||||
| 100,000 | Flow International Corp.* | 439,000 | ||||||
| Internet Retail 3.3% | ||||||||
| 3,390 | Amazon.com, Inc.* | 610,641 | ||||||
| 6,290 | ASOS plc* (United Kingdom) | 172,785 | ||||||
| 54,435 | Start Today Co. Ltd. (Japan) | 844,579 | ||||||
| 29,370 | Yoox S.p.A.* (Italy) | 408,771 | ||||||
| 3,750 | zooplus AG* (Germany) | 486,720 | ||||||
| 2,523,496 | ||||||||
| Internet Software & Services 8.1% | ||||||||
| 14,300 | Akamai Technologies, Inc.* | 543,400 | ||||||
| 15,745 | Daum Communications Corp.* (Korea) | 1,406,637 | ||||||
| 4,050 | Google, Inc., Class A* | 2,374,150 | ||||||
| 15,000 | LeGuide.com* (France) | 623,752 | ||||||
| 17,290 | Net Entertainment NE AB* (Sweden) | 161,976 | ||||||
| 10,500 | VistaPrint N.V.* | 544,950 | ||||||
| 6,528 | Xtera Communications, Inc.* *** † | 65 | ||||||
| 34,050 | Yahoo, Inc.* | 566,933 | ||||||
| 6,221,863 | ||||||||
| IT Consulting & Other Services 2.3% | ||||||||
| 10,300 | Cognizant Technology Solutions Corp., Class A* | 838,420 | ||||||
| 5,745 | International Business Machines Corp. | 936,837 | ||||||
| 1,775,257 | ||||||||
| Life Sciences Tools & Services 2.3% | ||||||||
| 9,890 | Covance, Inc.* | 541,181 | ||||||
| 247 | EPS Co. Ltd. (Japan) | 579,758 | ||||||
| 7,375 | Eurofins Scientific (France) | 651,795 | ||||||
| 1,772,734 | ||||||||
| Movies & Entertainment 0.3% | ||||||||
| 3,055 | CTS Eventim AG (Germany) | 197,520 | ||||||
| Oil & Gas Refining & Marketing 0.8% | ||||||||
| 14,600 | World Fuel Services Corp. | 592,906 | ||||||
52
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Personal Products 1.2% | ||||||||
| 11,500 | Herbalife Ltd. | $ | 935,640 | |||||
| Pharmaceuticals 4.2% | ||||||||
| 37,400 | Teva Pharmaceutical Industries Ltd. ADR (Israel) | 1,876,358 | ||||||
| 27,650 | Valeant Pharmaceuticals International, Inc. (Canada) | 1,377,247 | ||||||
| 3,253,605 | ||||||||
| Semiconductor Equipment 0.6% | ||||||||
| 55,000 | BCD Semiconductor Manufacturing Ltd. ADR* (China) | 476,850 | ||||||
| Semiconductors 13.5% | ||||||||
| 40,000 | Altera Corp. | 1,760,800 | ||||||
| 13,880 | Hittite Microwave Corp.* | 885,127 | ||||||
| 67,200 | Intel Corp. | 1,355,424 | ||||||
| 13,605 | Linear Technology Corp. | 457,536 | ||||||
| 64,934 | Melexis N.V. (Belgium) | 1,160,119 | ||||||
| 22,525 | Microchip Technology, Inc. | 856,175 | ||||||
| 19,293 | Power Integrations, Inc. | 739,501 | ||||||
| 53,500 | Silicon Image, Inc.* | 479,895 | ||||||
| 73,760 | Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan) | 898,397 | ||||||
| 52,700 | Xilinx, Inc. | 1,728,560 | ||||||
| 10,321,534 | ||||||||
| Specialized Finance 2.1% | ||||||||
| 17,750 | Encore Capital Group, Inc.* | 420,498 | ||||||
| 24,600 | ICRA Ltd. (India) | 593,004 | ||||||
| 4,675 | IntercontinentalExchange, Inc.* | 577,549 | ||||||
| 1,591,051 | ||||||||
| Systems Software 4.8% | ||||||||
| 12,000 | Check Point Software Technologies Ltd.* (Israel) | 612,600 | ||||||
| 349,000 | GuestLogix, Inc.* (Canada) | 352,834 | ||||||
| 16,725 | Init Innovation In Traffic Systems AG (Germany) | 403,799 | ||||||
| 38,000 | Microsoft Corp. | 963,680 | ||||||
| 18,881 | Oracle Corp. | 630,059 | ||||||
| 1,760 | Simplex Holdings, Inc. (Japan) | 751,103 | ||||||
| 3,714,075 | ||||||||
| Trading Companies & Distributors 0.5% | ||||||||
| 34,265 | MonotaRO Co. Ltd. (Japan) | 403,166 | ||||||
| Trucking 1.4% | ||||||||
| 61,085 | Trancom Co. Ltd. (Japan) | 1,043,489 | ||||||
| Total Common Stocks (cost $57,919,888) | 71,050,519 | |||||||
| PREFERRED STOCKS 2.8% | ||||||||
| Computer Storage & Peripherals 1.0% | ||||||||
| 39,251 | BlueArc Corp., Series DD Pfd.* *** † | 120,108 | ||||||
| 39,251 | BlueArc Corp., Series DD-1 Pfd.* *** † | 126,781 | ||||||
| 69,363 | BlueArc Corp., Series FF Pfd.* *** † | 230,285 | ||||||
| 69,362 | BlueArc Corp., Series FF-1 Pfd.* *** † | 233,750 | ||||||
| 23,737 | BlueArc Corp., Series GG Pfd.* *** † | 67,532 | ||||||
| 778,456 | ||||||||
| Health Care Equipment 1.8% | ||||||||
| 30,500 | Sartorius AG Pfd. (Germany) | 1,329,804 | ||||||
| Total Preferred Stocks (cost $2,161,029) | 2,108,260 | |||||||
| Shares | Value | |||||||
| LIMITED PARTNERSHIP INTEREST 0.6% | ||||||||
| Asset Management & Custody Banks 0.6% | ||||||||
| Greenspring Global Partners II-B, L.P.*** † | $ | 446,642 | ||||||
| Total Limited Partnership Interest (cost $434,387) | 446,642 | |||||||
| WARRANTS 0.2% | ||||||||
| Computer Storage & Peripherals 0.0% | ||||||||
| 310 | BlueArc Corp., Series FF, expiring 4/2/18* *** † | — | ||||||
| 309 | BlueArc Corp., Series FF-1, expiring 4/2/18* *** † | — | ||||||
| 3,240 | BlueArc Corp., Series GG, expiring 7/14/15* *** † | 1,024 | ||||||
| 1,024 | ||||||||
| Health Care Equipment 0.2% | ||||||||
| 71,500 | Cardica, Inc., expiring 9/29/14* *** † | 150,865 | ||||||
| Total Warrants (cost $8,946) | 151,889 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 3.5% | ||||||||
| Repurchase Agreement 3.5% | ||||||||
| $2,669,572 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $2,695,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $2,723,568; repurchase proceeds: $2,669,572.†† (cost $2,669,572) | $ | 2,669,572 | |||||
| Total Short-Term Investments (cost $2,669,572) | 2,669,572 | |||||||
| Total Investments (cost $63,193,822) 99.7% | 76,426,882 | |||||||
| Other Assets less Liabilities 0.3% | 265,685 | |||||||
| NET ASSETS 100.0% | $ | 76,692,567 | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
††All or a portion of this security has been designated as collateral for purchase commitments (see Note 12).
ADR American Depositary Receipt.
See Notes to Financial Statements. |
| |||||||
53
Table of Contents
| WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Schedule of Investments (continued) | ||
At March 31, 2011, Wasatch Global Science & Technology Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Belgium | 1.6 | |||
Brazil | 2.7 | |||
Canada | 2.4 | |||
China | 2.1 | |||
Denmark | 0.5 | |||
France | 6.0 | |||
Germany | 7.6 | |||
India | 0.8 | |||
Israel | 3.4 | |||
Italy | 3.2 | |||
Japan | 7.8 | |||
Korea | 1.9 | |||
Sweden | 2.5 | |||
Taiwan | 1.2 | |||
United Kingdom | 5.3 | |||
United States | 51.0 | |||
TOTAL | 100.0 | % | ||
54
Table of Contents
| WASATCH HERITAGE GROWTH FUND (WAHGX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 94.8% | ||||||||
| Aerospace & Defense 1.9% | ||||||||
| 20,245 | TransDigm Group, Inc.* | $ | 1,697,138 | |||||
| Air Freight & Logistics 3.1% | ||||||||
| 19,630 | C.H. Robinson Worldwide, Inc. | 1,455,172 | ||||||
| 26,185 | Expeditors International of Washington, Inc. | 1,312,916 | ||||||
| 2,768,088 | ||||||||
| Apparel Retail 4.0% | ||||||||
| 49,840 | Ross Stores, Inc. | 3,544,621 | ||||||
| Application Software 1.7% | ||||||||
| 27,790 | ANSYS, Inc.* | 1,505,940 | ||||||
| Asset Management & Custody Banks 3.7% | ||||||||
| 52,730 | SEI Investments Co. | 1,259,192 | ||||||
| 29,870 | T. Rowe Price Group, Inc. | 1,983,966 | ||||||
| 3,243,158 | ||||||||
| Automotive Retail 1.0% | ||||||||
| 15,818 | O’Reilly Automotive, Inc.* | 908,902 | ||||||
| Data Processing & Outsourced Services 2.5% | ||||||||
| 18,075 | Alliance Data Systems Corp.* | 1,552,462 | ||||||
| 46,430 | Redecard S.A. (Brazil) | 686,509 | ||||||
| 2,238,971 | ||||||||
| Distributors 1.2% | ||||||||
| 43,320 | LKQ Corp.* | 1,044,012 | ||||||
| Diversified Metals & Mining 1.0% | ||||||||
| 10,560 | BHP Billiton plc ADR (United Kingdom) | 840,576 | ||||||
| Diversified Support Services 4.6% | ||||||||
| 93,595 | Copart, Inc.* | 4,055,471 | ||||||
| Electronic Components 3.8% | ||||||||
| 61,930 | Amphenol Corp., Class A | 3,368,373 | ||||||
| Environmental & Facilities Services 1.8% | ||||||||
| 17,765 | Stericycle, Inc.* | 1,575,223 | ||||||
| Health Care Equipment 3.9% | ||||||||
| 67,780 | St. Jude Medical, Inc.* | 3,474,403 | ||||||
| Health Care Services 4.4% | ||||||||
| 38,462 | Catalyst Health Solutions, Inc.* | 2,151,179 | ||||||
| 31,685 | Express Scripts, Inc.* | 1,762,003 | ||||||
| 3,913,182 | ||||||||
| IT Consulting & Other Services 4.0% | ||||||||
| | 43,745 | | Cognizant Technology Solutions Corp., Class A* | 3,560,843 | ||||
| Life Sciences Tools & Services 2.4% | ||||||||
| 38,580 | Covance, Inc.* | 2,111,098 | ||||||
| Multi-Line Insurance 1.0% | ||||||||
| 28,050 | HCC Insurance Holdings, Inc. | 878,245 | ||||||
| Oil & Gas Equipment & Services 3.0% | ||||||||
| 25,770 | Core Laboratories N.V. | 2,632,921 | ||||||
| Oil & Gas Exploration & Production 3.9% | ||||||||
| 82,730 | Petrohawk Energy Corp.* | 2,030,194 | ||||||
| 28,710 | Ultra Petroleum Corp.* | 1,413,968 | ||||||
| 3,444,162 | ||||||||
| Shares | Value | |||||||
| Personal Products 2.2% | ||||||||
| 24,230 | Herbalife Ltd. | $ | 1,971,353 | |||||
| Pharmaceuticals 1.5% | ||||||||
| 26,720 | Teva Pharmaceutical Industries Ltd. ADR (Israel) | 1,340,542 | ||||||
| Regional Banks 2.0% | ||||||||
| 31,825 | Signature Bank* | 1,794,930 | ||||||
| Research & Consulting Services 4.2% | ||||||||
| 41,405 | IHS, Inc., Class A* | 3,674,694 | ||||||
| Restaurants 3.9% | ||||||||
| 75,825 | Tim Hortons, Inc. (Canada) | 3,435,631 | ||||||
| Semiconductors 12.9% | ||||||||
| 88,440 | Altera Corp. | 3,893,129 | ||||||
| 87,595 | Linear Technology Corp. | 2,945,820 | ||||||
| 82,275 | Microchip Technology, Inc. | 3,127,273 | ||||||
| 33,755 | Silicon Laboratories, Inc.* | 1,458,553 | ||||||
| 11,424,775 | ||||||||
| Specialized Finance 5.7% | ||||||||
| 112,500 | BM&F BOVESPA S.A. (Brazil) | 819,603 | ||||||
| 13,163 | IntercontinentalExchange, Inc.* | 1,626,157 | ||||||
| 44,840 | MSCI, Inc., Class A* | 1,651,009 | ||||||
| 162,920 | Power Finance Corp. Ltd. (India) | 916,619 | ||||||
| 5,013,388 | ||||||||
| Thrifts & Mortgage Finance 0.9% | ||||||||
| 47,574 | New York Community Bancorp, Inc. | 821,127 | ||||||
| Trading Companies & Distributors 4.2% | ||||||||
| 23,170 | Fastenal Co. | 1,502,111 | ||||||
| 31,790 | MSC Industrial Direct Co., Inc., Class A | 2,176,661 | ||||||
| 3,678,772 | ||||||||
| Trucking 2.1% | ||||||||
| 40,243 | J.B. Hunt Transport Services, Inc. | 1,827,837 | ||||||
| Wireless Telecommunication Services 2.3% | ||||||||
| 48,418 | NII Holdings, Inc.* | 2,017,578 | ||||||
| Total Common Stocks (cost $58,557,691) | 83,805,954 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 4.4% | ||||||||
| Repurchase Agreement 4.4% | ||||||||
| $3,875,667 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $3,915,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $3,956,501; repurchase proceeds: $3,875,668 (cost $3,875,667) | $ | 3,875,667 | |||||
| Total Short-Term Investments (cost $3,875,667) | 3,875,667 | |||||||
| Total Investments (cost $62,433,358) 99.2% | 87,681,621 | |||||||
| Other Assets less Liabilities 0.8% | 673,773 | |||||||
| NET ASSETS 100.0% | $ | 88,355,394 | ||||||
*Non-income producing.
ADR American Depositary Receipt.
See Notes to Financial Statements. | ||||||||
55
Table of Contents
| WASATCH HERITAGE GROWTH FUND (WAHGX) — Schedule of Investments (continued) | MARCH 31, 2011 (UNAUDITED) | |
At March 31, 2011, Wasatch Heritage Growth Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Brazil | 1.8 | |||
Canada | 4.1 | |||
India | 1.1 | |||
Israel | 1.6 | |||
United Kingdom | 1.0 | |||
United States | 90.4 | |||
TOTAL | 100.0 | % | ||
56
Table of Contents
| WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 98.9% | ||||||||
| Aerospace & Defense 1.0% | ||||||||
| 110,491 | Kongsberg Gruppen ASA (Norway) | $ | 3,072,725 | |||||
| Agricultural Products 1.1% | ||||||||
| 1,229,400 | PT Astra Agro Lestari Tbk (Indonesia) | 3,204,982 | ||||||
| Apparel Retail 2.3% | ||||||||
| 204,220 | Cia. Hering (Brazil) | 3,766,623 | ||||||
| 279,660 | Truworths International Ltd. (South Africa) | 2,913,986 | ||||||
| 6,680,609 | ||||||||
| Apparel, Accessories & Luxury Goods 0.6% | ||||||||
| 138,400 | WeSC AB* (Sweden) | 1,818,479 | ||||||
| Application Software 1.6% | ||||||||
| 97,331 | Computer Modelling Group Ltd. (Canada) | 2,606,605 | ||||||
| 13,407 | SimCorp A/S (Denmark) | 2,152,802 | ||||||
| 4,759,407 | ||||||||
| Asset Management & Custody Banks 2.3% | ||||||||
| 218,570 | CETIP S.A. (Brazil) | 3,628,164 | ||||||
| 16,890 | Partners Group Holding AG (Switzerland) | 3,236,981 | ||||||
| 6,865,145 | ||||||||
| Automotive Retail 1.1% | ||||||||
| 380,415 | ARB Corp. Ltd. (Australia) | 3,257,863 | ||||||
| Biotechnology 1.6% | ||||||||
| 788,300 | Abcam plc (United Kingdom) | 4,779,689 | ||||||
| Brewers 1.0% | ||||||||
| 204,200 | Anadolu Efes Biracilik ve Malt Sanayii A.S. (Turkey) | 2,890,309 | ||||||
| Casinos & Gaming 3.1% | ||||||||
| 3,203,865 | Galaxy Entertainment Group Ltd.* (Hong Kong) | 4,664,633 | ||||||
| 2,626,370 | SJM Holdings Ltd. (Hong Kong) | 4,634,542 | ||||||
| 9,299,175 | ||||||||
| Catalog Retail 1.2% | ||||||||
| 32,755 | Hyundai Home Shopping Network Corp.* (Korea) | 3,627,998 | ||||||
| Coal & Consumable Fuels 3.6% | ||||||||
| 2,003,700 | PT Harum Energy Tbk* (Indonesia) | 2,059,502 | ||||||
| 809,245 | PT Indo Tambangraya Megah (Indonesia) | 4,293,669 | ||||||
| 1,721,385 | PT Tambang Batubara Bukit Asam Tbk (Indonesia) | 4,151,488 | ||||||
| 10,504,659 | ||||||||
| Commodity Chemicals 0.8% | ||||||||
| 936,455 | TSRC Corp. (Taiwan) | 2,404,310 | ||||||
| Construction Materials 3.3% | ||||||||
| 2,545,000 | PT Indocement Tunggal Prakarsa Tbk (Indonesia) | 4,778,725 | ||||||
| 4,900,335 | PT Semen Gresik (Persero) Tbk (Indonesia) | 5,121,223 | ||||||
| 9,899,948 | ||||||||
| Consumer Finance 3.8% | ||||||||
| 1,567,200 | Banco Compartamos S.A.B. de C.V.* (Mexico) | 2,824,187 | ||||||
| 481,100 | Mahindra & Mahindra Financial Services Ltd. (India) | 8,350,071 | ||||||
| 11,174,258 | ||||||||
| Shares | Value | |||||||
| Data Processing & Outsourced Services 3.3% | ||||||||
| 825 | GMO Payment Gateway, Inc. (Japan) | $ | 3,013,562 | |||||
| 381,118 | Wirecard AG (Germany) | 6,849,695 | ||||||
| 9,863,257 | ||||||||
| Department Stores 2.3% | ||||||||
| 101,000 | Lojas Renner S.A. (Brazil) | 3,284,184 | ||||||
| 229,300 | Marisa Lojas S.A. (Brazil) | 3,586,359 | ||||||
| 6,870,543 | ||||||||
| Distributors 1.5% | ||||||||
| 3,910,607 | Dah Chong Hong Holdings Ltd. (Hong Kong) | 4,390,917 | ||||||
| Diversified Banks 3.6% | ||||||||
| 688,805 | Allahabad Bank Ltd. (India) | 3,583,423 | ||||||
| 750,917 | Bank of N.T. Butterfield & Son Ltd. (The)* (Bermuda) | 946,155 | ||||||
| 580,175 | Commercial International Bank S.A.E (Egypt) | 3,208,754 | ||||||
| 10,147,710 | PT Bank Tabungan Pensiunan Nasional Tbk* (Indonesia) | 2,913,497 | ||||||
| 10,651,829 | ||||||||
| Diversified Support Services 0.5% | ||||||||
| 591,933 | CPP Group plc (United Kingdom) | 1,466,088 | ||||||
| Electrical Components & Equipment 0.5% | ||||||||
| 256,438 | Crompton Greaves Ltd. (India) | 1,577,903 | ||||||
| Electronic Components 1.3% | ||||||||
| 209,415 | Partron Co. Ltd. (Korea) | 3,722,679 | ||||||
| Electronic Equipment & Instruments 1.5% | ||||||||
| 1,406,270 | Chroma ATE, Inc. (Taiwan) | 4,543,065 | ||||||
| Food Retail 3.7% | ||||||||
| 88,790 | BIM Birlesik Magazalar AS (Turkey) | 2,990,918 | ||||||
| 1,682,000 | CP ALL Public Co. Ltd.*** (Thailand) | 2,224,500 | ||||||
| 263,590 | Eurocash S.A. (Poland) | 2,899,137 | ||||||
| 182,500 | Shoprite Holdings Ltd. (South Africa) | 2,798,998 | ||||||
| 10,913,553 | ||||||||
| General Merchandise Stores 1.1% | ||||||||
| 499,940 | Clicks Group Ltd. (South Africa) | 3,144,760 | ||||||
| Gold 3.0% | ||||||||
| 1,011,170 | Centamin Egypt Ltd.* (United Kingdom) | 2,206,840 | ||||||
| 320,450 | Koza Altin Isletmeleri AS (Turkey) | 4,203,610 | ||||||
| 319,665 | Medusa Mining Ltd. (Australia) | 2,320,001 | ||||||
| 8,730,451 | ||||||||
| Health Care Equipment 3.5% | ||||||||
| 103,728 | DiaSorin S.p.A. (Italy) | 4,574,117 | ||||||
| 276,896 | Immunodiagnostic Systems Holdings plc (United Kingdom) | 3,696,251 | ||||||
| 53,345 | Stratec Biomedical Systems AG (Germany) | 2,136,449 | ||||||
| 10,406,817 | ||||||||
| Health Care Services 0.8% | ||||||||
| 180,645 | Diagnosticos da America S.A. (Brazil) | 2,332,265 | ||||||
| Health Care Supplies 0.9% | ||||||||
| 224,005 | St. Shine Optical Co. Ltd. (Taiwan) | 2,757,547 | ||||||
| Health Care Technology 0.9% | ||||||||
| 458,244 | RaySearch Laboratories AB (Sweden) | 2,575,753 | ||||||
| Industrial Gases 1.3% | ||||||||
| 30,690 | OCI Materials Co. Ltd. (Korea) | 3,754,591 | ||||||
57
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| WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| Industrial Machinery 7.1% | ||||||||
| 154,590 | AIA Engineering Ltd. (India) | $ | 1,195,954 | |||||
| 46,490 | Andritz AG (Austria) | 4,343,792 | ||||||
| 9,863 | Burckhardt Compression Holding AG (Switzerland) | 3,113,640 | ||||||
| 73,740 | Konecranes Oyj (Finland) | 3,421,385 | ||||||
| 316,429 | Rotork plc (United Kingdom) | 8,885,610 | ||||||
| 20,960,381 | ||||||||
| Internet Retail 3.4% | ||||||||
| 258,145 | Start Today Co. Ltd. (Japan) | 4,005,215 | ||||||
| 441,844 | Yoox S.p.A.* (Italy) | 6,149,569 | ||||||
| 10,154,784 | ||||||||
| Internet Software & Services 0.6% | ||||||||
| 387,493 | GMO internet, Inc. (Japan) | 1,793,819 | ||||||
| IT Consulting & Other Services 0.6% | ||||||||
| 1,873,000 | CSE Global Ltd. (Singapore) | 1,872,554 | ||||||
| Marine Ports & Services 2.1% | ||||||||
| 3,999,600 | International Container Terminal Services, Inc. (Philippines) | 3,842,934 | ||||||
| 146,800 | Santos Brasil Participacoes S.A.** (Brazil) | 2,389,883 | ||||||
| 6,232,817 | ||||||||
| Multi-Sector Holdings 1.7% | ||||||||
| 5,453,990 | First Pacific Co. Ltd. (Hong Kong) | 4,889,269 | ||||||
| Oil & Gas Equipment & Services 0.8% | ||||||||
| 90,140 | TGS-NOPEC Geophysical Co. ASA (Norway) | 2,423,483 | ||||||
| Oil & Gas Exploration & Production 6.9% | ||||||||
| 941,260 | Afren plc* (United Kingdom) | 2,466,025 | ||||||
| 341,056 | Exillon Energy plc* (United Arab Emirates) | 2,248,932 | ||||||
| 171,555 | Gran Tierra Energy, Inc.* (Canada) | 1,384,449 | ||||||
| 368,160 | Pan Orient Energy Corp.* (Canada) | 2,616,828 | ||||||
| 77,400 | Petrominerales Ltd. (Colombia) | 2,933,590 | ||||||
| 2,473,918 | PetroNeft Resources plc* (United Kingdom) | 2,188,340 | ||||||
| 68,624 | Premier Oil plc* (United Kingdom) | 2,200,736 | ||||||
| 148,940 | Transglobe Energy Corp.* (Canada) | 2,261,718 | ||||||
| 182,385 | Zhaikmunai L.P. GDR* (Kazakhstan) | 2,252,455 | ||||||
| 20,553,073 | ||||||||
| Packaged Foods & Meats 1.7% | ||||||||
| 38,277 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 1,931,145 | ||||||
| 993,314 | Hsu Fu Chi International Ltd. (China) | 2,955,588 | ||||||
| 4,886,733 | ||||||||
| Pharmaceuticals 1.2% | ||||||||
| 9,376,810 | PT Kalbe Farma Tbk (Indonesia) | 3,661,344 | ||||||
| Precious Metals & Minerals 1.0% | ||||||||
| 206,030 | Northam Platinum Ltd. (South Africa) | 1,339,834 | ||||||
| 40,233 | Pan American Silver Corp. (Canada) | 1,494,600 | ||||||
| 2,834,434 | ||||||||
| Research & Consulting Services 3.9% | ||||||||
| 147,525 | AF AB, Class B (Sweden) | 2,951,484 | ||||||
| 177,965 | Campbell Brothers Ltd. (Australia) | 8,552,231 | ||||||
| 11,503,715 | ||||||||
| Semiconductors 0.9% | ||||||||
| 111,450 | LMS Co. Ltd. (Korea) | 2,529,837 | ||||||
| Specialized Finance 0.8% | ||||||||
| 238,245 | JSE Ltd. (South Africa) | 2,464,846 | ||||||
| Specialty Chemicals 1.0% | ||||||||
| 86,560 | TechnoSemiChem Co. Ltd. (Korea) | 3,053,806 | ||||||
| Shares | Value | |||||||
| Specialty Stores 0.6% | ||||||||
| 726,470 | L’Occitane International S.A.* (Luxembourg) | $ | 1,790,235 | |||||
| Steel 0.9% | ||||||||
| 297,423 | MOIL Ltd. (India) | 2,641,092 | ||||||
| Thrifts & Mortgage Finance 4.0% | ||||||||
| 725,370 | Dewan Housing Finance Corp. Ltd. (India) | 4,342,949 | ||||||
| 631,569 | Gruh Finance Ltd. (India) | 5,028,334 | ||||||
| 44,355 | Home Capital Group, Inc. (Canada) | 2,604,057 | ||||||
| 11,975,340 | ||||||||
| Trading Companies & Distributors 1.6% | ||||||||
| 178,555 | iMarketKorea, Inc.* (Korea) | 4,346,067 | ||||||
| 28,877 | MonotaRO Co. Ltd. (Japan) | 339,771 | ||||||
| 4,685,838 | ||||||||
| Total Common Stocks (cost $230,858,612) | 292,848,974 | |||||||
| PREFERRED STOCKS 0.8% | ||||||||
| Diversified Banks 0.8% | ||||||||
| 190,000 | Banco do Estado do Rio Grande do Sul S.A., Series B Pfd. (Brazil) | 2,347,914 | ||||||
| 74,058 | Bank of N.T. Butterfield & Son Ltd. (The) Pfd.* *** (Bermuda) | 93,313 | ||||||
| 2,441,227 | ||||||||
| Total Preferred Stocks (cost $1,560,190) | 2,441,227 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 1.4% | ||||||||
| Repurchase Agreement 1.4% | ||||||||
| $4,006,098 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $4,045,000 of United States Treasury Notes 4.50% due 8/15/39; value: $4,087,879; repurchase proceeds: $4,006,099 (cost $4,006,098) | $ | 4,006,098 | |||||
| Total Short-Term Investments (cost $4,006,098) | 4,006,098 | |||||||
| Total Investments (cost $236,424,900) 101.1% | 299,296,299 | |||||||
| Liabilities less Other Assets (1.1%) | (3,293,405 | ) | ||||||
| NET ASSETS 100.0% | $ | 296,002,894 | ||||||
*Non-income producing.
**Common units.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
GDR Global Depositary Receipt.
See Notes to Financial Statements. |
| |||||||
58
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
At March 31, 2011, Wasatch International Growth Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Australia | 4.8 | |||
Austria | 1.5 | |||
Bermuda | 0.3 | |||
Brazil | 7.2 | |||
Canada | 4.4 | |||
China | 1.0 | |||
Colombia | 1.0 | |||
Denmark | 0.7 | |||
Egypt | 1.1 | |||
Finland | 1.2 | |||
Germany | 3.0 | |||
Hong Kong | 6.3 | |||
India | 9.7 | |||
Indonesia | 10.2 | |||
Italy | 3.6 | |||
Japan | 3.1 | |||
Kazakhstan | 0.8 | |||
Korea | 7.1 | |||
Luxembourg | 0.6 | |||
Mexico | 1.0 | |||
Norway | 1.9 | |||
Philippines | 1.3 | |||
Poland | 1.0 | |||
Singapore | 0.6 | |||
South Africa | 4.3 | |||
Sweden | 2.5 | |||
Switzerland | 2.1 | |||
Taiwan | 3.3 | |||
Thailand | 0.8 | |||
Turkey | 3.4 | |||
United Arab Emirates | 0.8 | |||
United Kingdom | 9.4 | |||
TOTAL | 100.0 | % | ||
59
Table of Contents
| WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Schedule of Investments | ||
| Shares | Value | |||||||
| COMMON STOCKS 85.5% | ||||||||
| Advertising 0.7% | ||||||||
| 19,406 | 1000mercis* (France) | $ | 1,281,559 | |||||
| �� | ||||||||
| Air Freight & Logistics 2.9% | ||||||||
| 15,836 | Allcargo Global Logistics Ltd. (India) | 61,824 | ||||||
| 7,152,901 | Aramex PJSC* (United Arab Emirates) | 3,505,608 | ||||||
| 989,558 | Goodpack Ltd. (Singapore) | 1,523,242 | ||||||
| 20,413 | Transat A.T., Inc., Class A* *** (Canada) | 260,704 | ||||||
| 5,351,378 | ||||||||
| Alternative Carriers 0.3% | ||||||||
| 150,000 | Tulip Telecom Ltd. (India) | 471,914 | ||||||
| Aluminum 0.5% | ||||||||
| 1,669,663 | Midas Holdings Ltd. (Singapore) | 993,610 | ||||||
| Apparel Retail 1.7% | ||||||||
| 1,345,000 | Boshiwa International Holding Ltd.* (Hong Kong) | 882,245 | ||||||
| 60,000 | Cia. Hering (Brazil) | 1,106,637 | ||||||
| 1,572,420 | IT Ltd. (Hong Kong) | 1,067,823 | ||||||
| 3,056,705 | ||||||||
| Apparel, Accessories & Luxury Goods 3.2% | ||||||||
| 235,108 | China Lilang Ltd. (China) | 311,459 | ||||||
| 18,454 | Gerry Weber International AG (Germany) | 1,076,116 | ||||||
| 53,219 | LG Fashion Corp. (Korea) | 1,436,057 | ||||||
| 346,356 | Ports Design Ltd. (China) | 799,175 | ||||||
| 121,025 | Ted Baker plc (United Kingdom) | 1,286,599 | ||||||
| 1,275,826 | Xtep International Holdings Ltd. (China) | 864,767 | ||||||
| 5,774,173 | ||||||||
| Asset Management & Custody Banks 2.0% | ||||||||
| 30,754 | CETIP S.A. (Brazil) | 510,503 | ||||||
| 78,508,927 | CST Mining Group Ltd.* (Hong Kong) | 2,241,655 | ||||||
| 81,321 | Tata Investment Corp. Ltd. (India) | 928,640 | ||||||
| 3,680,798 | ||||||||
| Auto Parts & Equipment 1.3% | ||||||||
| 479,314 | Minth Group Ltd. (China) | 801,420 | ||||||
| 2,500,000 | Norstar Founders Group Ltd.* *** (Hong Kong) | 33,022 | ||||||
| 69,407 | WABCO-TVS India Ltd. (India) | 1,568,837 | ||||||
| 2,403,279 | ||||||||
| Automobile Manufacturers 0.1% | ||||||||
| 54,269 | Ghabbour Auto (Egypt) | 240,771 | ||||||
| Biotechnology 2.5% | ||||||||
| 56,441 | 3SBio, Inc. ADR* (China) | 975,865 | ||||||
| 141,010 | Abcam plc (United Kingdom) | 854,984 | ||||||
| 200,000 | Apex Biotechnology Corp. (Taiwan) | 444,799 | ||||||
| 10,051 | Seegene, Inc.* (Korea) | 348,182 | ||||||
| 5,020,033 | Sino Biopharmaceutical Ltd. (China) | 1,872,412 | ||||||
| 4,496,242 | ||||||||
| Catalog Retail 1.1% | ||||||||
| 17,465 | Hyundai Home Shopping Network Corp.* (Korea) | 1,934,452 | ||||||
| Coal & Consumable Fuels 0.6% | ||||||||
| 1,100,000 | PT Harum Energy Tbk* (Indonesia) | 1,130,634 | ||||||
| Commodity Chemicals 0.9% | ||||||||
| 426,192 | Berger Paints India Ltd. (India) | 860,125 | ||||||
| 48,810 | Tokai Carbon Korea Co. Ltd. (Korea) | 814,279 | ||||||
| 1,674,404 | ||||||||
| Shares | Value | |||||||
| Computer Hardware 0.4% | ||||||||
| 250,915 | Advantech Co. Ltd. (Taiwan) | $ | 776,470 | |||||
| Computer Storage & Peripherals 0.5% | ||||||||
| 799 | Wacom Co. Ltd. (Japan) | 979,606 | ||||||
| Construction & Engineering 2.7% | ||||||||
| 115,639 | Ausenco Ltd. (Australia) | 401,647 | ||||||
| 3,373,450 | Drake & Scull International (United Arab Emirates) | 991,989 | ||||||
| 146,447 | Heerim Architects & Planners (Korea) | 1,044,000 | ||||||
| 61,503 | Lycopodium Ltd. (Australia) | 436,799 | ||||||
| 7,360 | Outotec Oyj (Finland) | 443,611 | ||||||
| 177,184 | Raubex Group Ltd. (South Africa) | 477,920 | ||||||
| 1,377,000 | Rotary Engineering Ltd. (Singapore) | 1,037,967 | ||||||
| 4,833,933 | ||||||||
| Construction & Farm Machinery & Heavy Trucks 0.7% | ||||||||
| 650,000 | International Mining Machinery Holdings Ltd.* (China) | 570,157 | ||||||
| 68,308 | VST Tillers Tractors Ltd. (India) | 677,030 | ||||||
| 1,247,187 | ||||||||
| Consumer Finance 0.5% | ||||||||
| 502,400 | Banco Compartamos S.A.B. de C.V.* (Mexico) | 905,355 | ||||||
| Data Processing & Outsourced Services 3.1% | ||||||||
| 1,173 | SBI VeriTrans Co. Ltd. (Japan) | 664,629 | ||||||
| 279,815 | Wirecard AG (Germany) | 5,029,013 | ||||||
| 5,693,642 | ||||||||
| Diversified Banks 0.5% | ||||||||
| 100,000 | Federal Bank Ltd. (India) | 940,688 | ||||||
| Diversified Metals & Mining 0.3% | ||||||||
| 480,000 | Metorex Ltd.* (South Africa) | 459,001 | ||||||
| Education Services 0.5% | ||||||||
| 811,172 | Advtech Ltd. (South Africa) | 647,403 | ||||||
| 383,598 | Masterskill Education Group Berhad (Malaysia) | 243,173 | ||||||
| 1,040,150 | Oriental Century Ltd.* *** (China) | 8,253 | ||||||
| 898,829 | ||||||||
| Electrical Components & Equipment 0.9% | ||||||||
| 37,170 | Harbin Electric, Inc.* | 769,047 | ||||||
| 785,532 | Wasion Group Holdings Ltd. (China) | 422,315 | ||||||
| 101,852 | Zhuzhou CSR Times Electric Co. Ltd., Series H (China) | 387,756 | ||||||
| 1,579,118 | ||||||||
| Electronic Equipment & Instruments 0.8% | ||||||||
| 912,000 | Test Research, Inc. (Taiwan) | 1,497,954 | ||||||
| Environmental & Facilities Services 1.0% | ||||||||
| 24,600 | Daiseki Co. Ltd. (Japan) | 481,620 | ||||||
| 383,000 | RPS Group plc (United Kingdom) | 1,316,962 | ||||||
| 1,798,582 | ||||||||
| Food Retail 0.9% | ||||||||
| 1,595,676 | BreadTalk Group Ltd. (Singapore) | 835,631 | ||||||
| 26,695 | Daikokutenbussan Co. Ltd. (Japan) | 858,939 | ||||||
| 1,694,570 | ||||||||
60
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Footwear 0.9% | ||||||||
| 616,979 | Anta Sports Products Ltd. (China) | $ | 958,593 | |||||
| 851,423 | Daphne International Holdings Ltd. (China) | 643,901 | ||||||
| 1,602,494 | ||||||||
| Gold 0.9% | ||||||||
| 127,704 | Koza Altin Isletmeleri AS (Turkey) | 1,675,200 | ||||||
| Health Care Equipment 1.4% | ||||||||
| 12,674 | Audika S.A. (France) | 368,812 | ||||||
| 27,851 | DiaSorin S.p.A. (Italy) | 1,228,152 | ||||||
| 30,602 | Immunodiagnostic Systems Holdings plc (United Kingdom) | 408,502 | ||||||
| 835,136 | LMA International N.V.* (Singapore) | 212,048 | ||||||
| 10,582 | Stratec Biomedical Systems AG (Germany) | 423,805 | ||||||
| 2,641,319 | ||||||||
| Health Care Facilities 0.6% | ||||||||
| 167,957 | CVS Group plc* (United Kingdom) | 278,229 | ||||||
| 469,385 | Raffles Medical Group Ltd. (Singapore) | 834,263 | ||||||
| 1,112,492 | ||||||||
| Health Care Services 0.4% | ||||||||
| 50,134 | Fleury S.A. (Brazil) | 747,441 | ||||||
| Health Care Supplies 0.6% | ||||||||
| 19,706 | Sartorius Stedim Biotech (France) | 1,155,002 | ||||||
| Homefurnishing Retail 0.3% | ||||||||
| 51,205 | Lewis Group Ltd. (South Africa) | 563,815 | ||||||
| Human Resource & Employment Services 0.4% | ||||||||
| 111,139 | Sthree plc (United Kingdom) | 731,602 | ||||||
| Industrial Machinery 3.0% | ||||||||
| 4,123 | Burckhardt Compression Holding AG (Switzerland) | 1,301,586 | ||||||
| 1,692,759 | China Automation Group Ltd. (China) | 1,315,009 | ||||||
| 134,855 | Hy-Lok Corp. (Korea) | 1,954,687 | ||||||
| 63,026 | SKF India Ltd. (India) | 816,745 | ||||||
| 5,388,027 | ||||||||
| Internet Retail 0.6% | ||||||||
| 5,823 | ASOS plc* (United Kingdom) | 159,956 | ||||||
| 21,652 | Start Today Co. Ltd. (Japan) | 335,939 | ||||||
| 110,677 | Webjet Ltd. (Australia) | 223,762 | ||||||
| 20,543 | Yoox S.p.A.* (Italy) | 285,917 | ||||||
| 1,005,574 | ||||||||
| Internet Software & Services 2.0% | ||||||||
| 31,175 | Daum Communications Corp.* (Korea) | 2,785,131 | ||||||
| 17,667 | LeGuide.com* (France) | 734,655 | ||||||
| 290,500 | Vendtek Systems, Inc.* (Canada) | 173,818 | ||||||
| 3,693,604 | ||||||||
| Investment Banking & Brokerage 0.2% | ||||||||
| 190 | GCA Savvian Group Corp. (Japan) | 315,407 | ||||||
| IT Consulting & Other Services 3.3% | ||||||||
| 25,599 | Alten Ltd. (France) | 967,426 | ||||||
| 1,070,338 | CSE Global Ltd. (Singapore) | 1,070,083 | ||||||
| 1,297,556 | CSG Ltd. (Australia) | 1,883,429 | ||||||
| 104,833 | Glodyne Technoserve Ltd. (India) | 999,081 | ||||||
| 194,942 | HiQ International AB* (Sweden) | 1,179,328 | ||||||
| 6,099,347 | ||||||||
| Shares | Value | |||||||
| Life Sciences Tools & Services 2.8% | ||||||||
| 62,640 | CMIC Co. Ltd. (Japan) | $ | 1,048,153 | |||||
| 1,122 | EPS Co. Ltd. (Japan) | 2,633,555 | ||||||
| 21,965 | ICON plc ADR* (Ireland) | 474,224 | ||||||
| 63,720 | LINICAL Co. Ltd. (Japan) | 255,034 | ||||||
| 56,114 | ShangPharma Corp. ADR* (China) | 679,541 | ||||||
| 5,090,507 | ||||||||
| Oil & Gas Equipment & Services 0.5% | ||||||||
| 792,613 | Anhui Tianda Oil Pipe Co. Ltd., Class H (China) | 256,896 | ||||||
| 45,148 | Pason Systems, Inc. (Canada) | 733,565 | ||||||
| 990,461 | ||||||||
| Oil & Gas Exploration & Production 6.5% | ||||||||
| 511,366 | Afren plc* (United Kingdom) | 1,339,737 | ||||||
| 32,000 | Exillon Energy plc* (United Arab Emirates) | 211,009 | ||||||
| 116,776 | Gran Tierra Energy, Inc.* (Canada) | 942,382 | ||||||
| 156,306 | Pan Orient Energy Corp.* (Canada) | 1,111,001 | ||||||
| 2,453,638 | Petroamerica Oil Corp.* (Canada) | 658,117 | ||||||
| 24,111 | Petrominerales Ltd. (Colombia) | 913,848 | ||||||
| 1,397,446 | PetroNeft Resources plc* (United Kingdom) | 1,236,131 | ||||||
| 27,175 | Premier Oil plc* (United Kingdom) | 871,488 | ||||||
| 131,614 | Selan Exploration Technology Ltd. (India) | 982,789 | ||||||
| 100,000 | Transglobe Energy Corp.* (Canada) | 1,518,543 | ||||||
| 76,581 | Westfire Energy Ltd.* (Canada) | 692,851 | ||||||
| 115,819 | Zhaikmunai L.P. GDR* (Kazakhstan) | 1,430,365 | ||||||
| 11,908,261 | ||||||||
| Oil & Gas Storage & Transportation 0.3% | ||||||||
| 866,760 | Circle Oil plc* (Ireland) | 508,813 | ||||||
| Packaged Foods & Meats 0.5% | ||||||||
| 1,721,521 | Agthia Group PJSC (United Arab Emirates) | 960,893 | ||||||
| Personal Products 0.7% | ||||||||
| 77,852 | Atrium Innovations, Inc.* (Canada) | 1,327,584 | ||||||
| Pharmaceuticals 2.8% | ||||||||
| 233,000 | Biostar Pharmaceuticals, Inc.* (China) | 500,950 | ||||||
| 170,825 | China Nuokang Bio-Pharmaceutical, Inc. ADR* (China) | 785,795 | ||||||
| 562,903 | China Shineway Pharmaceutical Group Ltd. (China) | 1,350,958 | ||||||
| 28,736 | Daewoong Pharmaceutical Co. Ltd. (Korea) | 1,165,734 | ||||||
| 385,800 | Genomma Lab Internacional S.A.B. de C.V., Class B* (Mexico) | 872,693 | ||||||
| 21,233 | Medy-Tox, Inc.* (Korea) | 462,618 | ||||||
| 5,138,748 | ||||||||
| Precious Metals & Minerals 0.2% | ||||||||
| 300,000 | Anooraq Resources Corp.* (Canada) | 354,715 | ||||||
| Property & Casualty Insurance 0.9% | ||||||||
| 868,715 | Beazley plc (United Kingdom) | 1,721,293 | ||||||
| Real Estate Development 0.2% | ||||||||
| 658,877 | SPG Land Holdings Ltd. (China) | 309,310 | ||||||
| Real Estate Services 1.0% | ||||||||
| 224,600 | China Real Estate Information Corp., ADR* (China) | 1,754,126 | ||||||
| Regional Banks 0.7% | ||||||||
| 42,577 | Canadian Western Bank (Canada) | 1,368,209 | ||||||
61
Table of Contents
| WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| Research & Consulting Services 0.6% | ||||||||
| 7,000 | Bertrandt AG (Germany) | $ | 472,217 | |||||
| 41,655 | eClerx Services Ltd. (India) | 602,477 | ||||||
| 1,074,694 | ||||||||
| Restaurants 1.5% | ||||||||
| 581,950 | FU JI Food & Catering Services Holdings Ltd.* *** (China) | 749 | ||||||
| 1,115,444 | KFC Holdings Malaysia Berhad (Malaysia) | 1,344,241 | ||||||
| 17,541 | Shinsegae Food Co. Ltd. (Korea) | 1,370,403 | ||||||
| 2,715,393 | ||||||||
| Semiconductor Equipment 1.8% | ||||||||
| 55,000 | BCD Semiconductor Manufacturing Ltd. ADR* (China) | 476,850 | ||||||
| 24,260 | Camtek Ltd.* (Israel) | 96,473 | ||||||
| 65,345 | Koh Young Technology, Inc.* (Korea) | 1,638,167 | ||||||
| 59,965 | Suss Microtec AG* (Germany) | 1,014,709 | ||||||
| 3,226,199 | ||||||||
| Semiconductors 4.3% | ||||||||
| 81,192 | Hana Micron, Inc.* (Korea) | 1,080,636 | ||||||
| 59,075 | Kontron AG (Germany) | 734,949 | ||||||
| 130,708 | Melexis N.V. (Belgium) | 2,335,245 | ||||||
| 23,623 | Melfas, Inc.* (Korea) | 968,006 | ||||||
| 171,540 | O2Micro International Ltd. ADR* ‡ (China) | 1,303,704 | ||||||
| 635,358 | Sporton International, Inc. (Taiwan) | 1,423,838 | ||||||
| 7,846,378 | ||||||||
| Specialized Finance 0.8% | ||||||||
| 84,107 | JSE Ltd. (South Africa) | 870,158 | ||||||
| 32,625 | Oslo Bors VPS Holding ASA (Norway) | 502,410 | ||||||
| 1,372,568 | ||||||||
| Specialty Chemicals 1.7% | ||||||||
| 22,078 | C. Uyemura & Co. Ltd. (Japan) | 1,050,003 | ||||||
| 1,932,460 | EcoGreen Fine Chemical Group Ltd. (Hong Kong) | 646,220 | ||||||
| 38,194 | TechnoSemiChem Co. Ltd. (Korea) | 1,347,470 | ||||||
| 3,043,693 | ||||||||
| Specialty Stores 0.5% | ||||||||
| 102,623 | easyhome Ltd. (Canada) | 889,290 | ||||||
| Steel 1.4% | ||||||||
| 83,255 | Ferrexpo plc (United Kingdom) | 578,443 | ||||||
| 127,344 | MOIL Ltd. (India) | 1,130,805 | ||||||
| 323,072 | Ratnamani Metals & Tubes Ltd. (India) | 920,786 | ||||||
| 2,630,034 | ||||||||
| Systems Software 1.7% | ||||||||
| 390,839 | GuestLogix, Inc.* (Canada) | 395,133 | ||||||
| 6,193 | Simplex Holdings, Inc. (Japan) | 2,642,944 | ||||||
| 3,038,077 | ||||||||
| Textiles 0.8% | ||||||||
| 1,251,056 | S. Kumars Nationwide Ltd.* (India) | 1,537,344 | ||||||
| Thrifts & Mortgage Finance 1.6% | ||||||||
| 247,504 | Dewan Housing Finance Corp. Ltd. (India) | 1,481,861 | ||||||
| 23,629 | Home Capital Group, Inc. (Canada) | 1,387,245 | ||||||
| 2,869,106 | ||||||||
| Tires & Rubber 0.6% | ||||||||
| 171,443 | Goodyear India Ltd. (India) | 1,018,778 | ||||||
| Shares | Value | |||||||
| Trading Companies & Distributors 3.1% | ||||||||
| 117,123 | iMarketKorea, Inc.* (Korea) | $ | 2,850,799 | |||||
| 33,727 | Indutrade AB (Sweden) | 1,111,220 | ||||||
| 42,785 | MonotaRO Co. Ltd. (Japan) | 503,414 | ||||||
| 19,730 | Richelieu Hardware Ltd. (Canada) | 610,615 | ||||||
| 2,997 | Thermador Groupe (France) | 550,771 | ||||||
| 5,626,819 | ||||||||
| Trucking 2.8% | ||||||||
| 261,666 | Tegma Gestao Logistica (Brazil) | 4,090,970 | ||||||
| 56,323 | Trancom Co. Ltd. (Japan) | 962,142 | ||||||
| 5,053,112 | ||||||||
| Total Common Stocks (cost $123,432,590) | 155,900,583 | |||||||
| PREFERRED STOCKS 0.6% | ||||||||
| Regional Banks 0.6% | ||||||||
| 145,910 | Banco Daycoval S.A. Pfd. (Brazil) | 1,094,404 | ||||||
| Total Preferred Stocks (cost $488,777) | 1,094,404 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 14.5% | ||||||||
| Repurchase Agreement 14.5% | ||||||||
| $26,448,788 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $26,695,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $26,977,981; repurchase proceeds: $26,448,796‡ (cost $26,448,788) | $ | 26,448,788 | |||||
| Total Short-Term Investments (cost $26,448,788) | 26,448,788 | |||||||
| Total Investments (cost $150,370,155) 100.6% | 183,443,775 | |||||||
| Liabilities less Other Assets (0.6%) | (1,060,545 | ) | ||||||
| NET ASSETS 100.0% | $ | 182,383,230 | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
‡All or a portion of this security has been designated as collateral for forward foreign currency exchange contracts (see Note 4).
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
See Notes to Financial Statements.
|
| |||||||
62
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Contracts | Net Unrealized Appreciation | |||||||
| FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS LONG 0.0% | ||||||||
| 407,665,000 JPY | USD, State Street Bank and Trust Co., settlement date 4/05/11, | $ | (2,964 | ) | ||||
| 80,885,000 JPY | USD, State Street Bank and Trust Co., settlement date 4/22/11, | 11,136 | ||||||
| Total Forward Foreign Currency Exchange Contracts Long (cost $5,881,615 value $5,889,788) | 8,172 | |||||||
| FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS SHORT 0.1% | ||||||||
| 80,885,000 JPY | USD, State Street Bank and Trust Co., settlement date 1/24/11, | $ | 24,800 | |||||
| 407,665,000 JPY | USD, State Street Bank and Trust Co., settlement date 4/05/11, | 85,386 | ||||||
| Total Forward Foreign Currency Exchange Contracts Short (cost $6,000,000 value $5,889,814) | 110,186 | |||||||
At March 31, 2011, Wasatch International Opportunities Fund’s investments, excluding short-term investments and forward foreign currency exchange contracts, were in the following countries:
| Country | % | |||
Australia | 1.9 | |||
Belgium | 1.5 | |||
Brazil | 4.8 | |||
Canada | 7.9 | |||
China | 11.0 | |||
Colombia | 0.6 | |||
Egypt | 0.2 | |||
Finland | 0.3 | |||
France | 3.2 | |||
Germany | 5.6 | |||
Hong Kong | 3.1 | |||
India | 9.6 | |||
Indonesia | 0.7 | |||
Ireland | 0.6 | |||
Israel | 0.1 | |||
Italy | 1.0 | |||
Japan | 8.1 | |||
Kazakhstan | 0.9 | |||
Korea | 13.5 | |||
Malaysia | 1.0 | |||
Mexico | 1.1 | |||
Norway | 0.3 | |||
Singapore | 4.1 | |||
South Africa | 1.9 | |||
Sweden | 1.5 | |||
Switzerland | 0.8 | |||
Taiwan | 2.6 | |||
Turkey | 1.1 | |||
United Arab Emirates | 3.6 | |||
United Kingdom | 6.9 | |||
United States | 0.5 | |||
TOTAL | 100.0 | % | ||
63
Table of Contents
WASATCH LARGE CAP VALUE FUND (FMIEX) — Schedule of Investments (formerly Wasatch-1st Source Income Equity Fund) | ||
| Shares | Value | |||||||
| COMMON STOCKS 98.3% | ||||||||
| Advertising 1.1% | ||||||||
| 415,150 | Omnicom Group, Inc. | $ | 20,367,259 | |||||
| Aerospace & Defense 3.4% | ||||||||
| 207,100 | L-3 Communications Holdings, Inc. | 16,218,001 | ||||||
| 523,245 | Raytheon Co. | 26,617,473 | ||||||
| 300,500 | Rockwell Collins, Inc. | 19,481,415 | ||||||
| 62,316,889 | ||||||||
| Agricultural Products 1.6% | ||||||||
| 845,000 | Archer Daniels Midland Co. | 30,428,450 | ||||||
| Aluminum 1.3% | ||||||||
| 1,361,130 | Alcoa, Inc. | 24,023,945 | ||||||
| Asset Management & Custody Banks 2.8% | ||||||||
| 80,340 | BlackRock, Inc. | 16,149,144 | ||||||
| 399,019 | Federated Investors, Inc., Class B | 10,673,758 | ||||||
| 495,000 | Northern Trust Corp. | 25,121,250 | ||||||
| 51,944,152 | ||||||||
| Auto Parts & Equipment 1.2% | ||||||||
| 533,460 | Johnson Controls, Inc. | 22,175,932 | ||||||
| Coal & Consumable Fuels 0.8% | ||||||||
| 487,350 | Cameco Corp. (Canada) | 14,639,994 | ||||||
| Communications Equipment 1.7% | ||||||||
| 452,690 | Harris Corp. | 22,453,424 | ||||||
| 1,118,000 | Nokia Oyj ADR (Finland) | 9,514,180 | ||||||
| 31,967,604 | ||||||||
| Computer & Electronics Retail 1.0% | ||||||||
| 618,605 | Best Buy Co., Inc. | 17,766,336 | ||||||
| Computer Hardware 1.3% | ||||||||
| 598,000 | Hewlett-Packard Co. | 24,500,060 | ||||||
| Construction & Engineering 1.3% | ||||||||
| 322,200 | Fluor Corp. | 23,733,252 | ||||||
| Construction & Farm Machinery & Heavy Trucks 1.3% | ||||||||
| 250,000 | Deere & Co. | 24,222,500 | ||||||
| Data Processing & Outsourced Services 1.4% | ||||||||
| 528,000 | Computer Sciences Corp. | 25,729,440 | ||||||
| Diversified Chemicals 1.0% | ||||||||
| 340,925 | E.I. du Pont de Nemours and Co. | 18,740,647 | ||||||
| Diversified Metals & Mining 0.6% | ||||||||
| 435,000 | Anglo American plc ADR (United Kingdom) | 11,231,700 | ||||||
| Drug Retail 1.5% | ||||||||
| 385,250 | CVS Caremark Corp. | 13,221,780 | ||||||
| 379,060 | Walgreen Co. | 15,215,468 | ||||||
| 28,437,248 | ||||||||
| Electric Utilities 2.0% | ||||||||
| 973,000 | Duke Energy Corp. | 17,659,950 | ||||||
| 350,000 | NextEra Energy, Inc. | 19,292,000 | ||||||
| 36,951,950 | ||||||||
| Electrical Components & Equipment 1.4% | ||||||||
| 440,000 | Emerson Electric Co. | 25,709,200 | ||||||
| Shares | Value | |||||||
| Electronic Components 1.0% | ||||||||
| 857,300 | Corning, Inc. | $ | 17,686,099 | |||||
| Environmental & Facilities Services 0.4% | ||||||||
| 192,000 | Waste Management, Inc. | 7,169,280 | ||||||
| Fertilizers & Agricultural Chemicals 1.0% | ||||||||
| 277,000 | Syngenta AG ADR (Switzerland) | 18,052,090 | ||||||
| Food Distributors 1.3% | ||||||||
| 841,440 | Sysco Corp. | 23,307,888 | ||||||
| Gold 1.3% | ||||||||
| 453,520 | Barrick Gold Corp. (Canada) | 23,542,223 | ||||||
| Health Care Distributors 1.4% | ||||||||
| 326,000 | McKesson Corp. | 25,770,300 | ||||||
| Health Care Equipment 3.1% | ||||||||
| 196,000 | C. R. Bard, Inc. | 19,464,760 | ||||||
| 480,205 | Medtronic, Inc. | 18,896,067 | ||||||
| 325,000 | Zimmer Holdings, Inc.* | 19,672,250 | ||||||
| 58,033,077 | ||||||||
| Home Improvement Retail 1.4% | ||||||||
| 686,000 | Home Depot, Inc. (The) | 25,423,160 | ||||||
| Household Products 1.2% | ||||||||
| 330,000 | Kimberly-Clark Corp. | 21,539,100 | ||||||
| Hypermarkets & Super Centers 1.2% | ||||||||
| 423,050 | Wal-Mart Stores, Inc. | 22,019,753 | ||||||
| Industrial Machinery 1.7% | ||||||||
| 340,000 | Parker Hannifin Corp. | 32,191,200 | ||||||
| Insurance Brokers 1.3% | ||||||||
| 811,290 | Marsh & McLennan Cos., Inc. | 24,184,555 | ||||||
| Integrated Oil & Gas 8.5% | ||||||||
| 308,000 | Chevron Corp. | 33,088,440 | ||||||
| 502,000 | ConocoPhillips | 40,089,720 | ||||||
| 467,000 | Exxon Mobil Corp. | 39,288,710 | ||||||
| 835,895 | Marathon Oil Corp. | 44,561,562 | ||||||
| 157,028,432 | ||||||||
| Integrated Telecommunication Services 3.3% | ||||||||
| 951,200 | AT&T, Inc. | 29,106,720 | ||||||
| 833,000 | Verizon Communications, Inc. | 32,103,820 | ||||||
| 61,210,540 | ||||||||
| Investment Banking & Brokerage 1.0% | ||||||||
| 116,485 | Goldman Sachs Group, Inc. (The) | 18,459,378 | ||||||
| Life & Health Insurance 2.3% | ||||||||
| 734,000 | MetLife, Inc. | 32,831,820 | ||||||
| 370,000 | Unum Group | 9,712,500 | ||||||
| 42,544,320 | ||||||||
| Multi-Line Insurance 2.1% | ||||||||
| 366,000 | Genworth Financial, Inc., Class A* | 4,926,360 | ||||||
| 773,370 | Loews Corp. | 33,324,513 | ||||||
| 38,250,873 | ||||||||
| Oil & Gas Drilling 3.1% | ||||||||
| 572,400 | Ensco plc ADR (United Kingdom) | 33,107,616 | ||||||
| 304,540 | Transocean Ltd.* (Switzerland) | 23,738,893 | ||||||
| 56,846,509 | ||||||||
64
Table of Contents
MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Oil & Gas Equipment & Services 2.1% | ||||||||
| 211,000 | National Oilwell Varco, Inc. | $ | 16,725,970 | |||||
| 239,000 | Schlumberger Ltd. | 22,289,140 | ||||||
| 39,015,110 | ||||||||
| Oil & Gas Exploration & Production 2.3% | ||||||||
| 270,000 | Anadarko Petroleum Corp. | 22,118,400 | ||||||
| 401,590 | Ultra Petroleum Corp.* | 19,778,307 | ||||||
| 41,896,707 | ||||||||
| Oil & Gas Storage & Transportation 3.2% | ||||||||
| 900,000 | Spectra Energy Corp. | 24,462,000 | ||||||
| 1,130,000 | Williams Cos., Inc. (The) | 35,233,400 | ||||||
| 59,695,400 | ||||||||
| Other Diversified Financial Services 3.5% | ||||||||
| 1,989,500 | Bank of America Corp. | 26,520,035 | ||||||
| 841,000 | JPMorgan Chase & Co. | 38,770,100 | ||||||
| 65,290,135 | ||||||||
| Packaged Foods & Meats 1.1% | ||||||||
| 423,575 | HJ Heinz Co. | 20,678,932 | ||||||
| Personal Products 1.0% | ||||||||
| 702,325 | Avon Products, Inc. | 18,990,868 | ||||||
| Pharmaceuticals 5.4% | ||||||||
| 519,000 | Abbott Laboratories | 25,456,950 | ||||||
| 390,000 | Johnson & Johnson | 23,107,500 | ||||||
| 792,000 | Merck & Co., Inc. | 26,143,920 | ||||||
| 1,214,000 | Pfizer, Inc. | 24,656,340 | ||||||
| 99,364,710 | ||||||||
| Property & Casualty Insurance 3.0% | ||||||||
| 737,860 | Allstate Corp. (The) | 23,449,191 | ||||||
| 538,000 | Travelers Cos., Inc. (The) | 32,000,240 | ||||||
| 55,449,431 | ||||||||
| Railroads 0.5% | ||||||||
| 143,000 | Norfolk Southern Corp. | 9,905,610 | ||||||
| Regional Banks 1.5% | ||||||||
| 435,000 | PNC Financial Services Group, Inc. | 27,400,650 | ||||||
| Semiconductors 2.8% | ||||||||
| 1,392,385 | Intel Corp. | 28,084,405 | ||||||
| 663,630 | Texas Instruments, Inc. | 22,935,053 | ||||||
| 51,019,458 | ||||||||
| Soft Drinks 1.0% | ||||||||
| 300,000 | PepsiCo, Inc. | 19,323,000 | ||||||
| Specialized Finance 0.9% | ||||||||
| 495,000 | NYSE Euronext | 17,409,150 | ||||||
| Steel 1.2% | ||||||||
| 472,090 | Nucor Corp. | 21,725,582 | ||||||
| Systems Software 2.5% | ||||||||
| 955,300 | Microsoft Corp. | 24,226,408 | ||||||
| 1,206,440 | Symantec Corp.* | 22,367,398 | ||||||
| 46,593,806 | ||||||||
| Technology Distributors 1.4% | ||||||||
| 780,000 | Avnet, Inc.* | 26,590,200 | ||||||
| Water Utilities 1.1% | ||||||||
| 708,085 | American Water Works Co., Inc. | 19,861,784 | ||||||
| Shares | Value | |||||||
| Wireless Telecommunication Services 0.5% | ||||||||
| 2,060,000 | Sprint Nextel Corp.* | $ | 9,558,400 | |||||
| Total Common Stocks (cost $1,436,224,251) | 1,817,914,268 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 1.7% | ||||||||
| Repurchase Agreement 1.7% | ||||||||
| $31,210,844 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $31,505,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $31,838,970; repurchase proceeds: $31,210,853 (cost $31,210,844) | $ | 31,210,844 | |||||
| Total Short-Term Investments (cost $31,210,844) | 31,210,844 | |||||||
| Total Investments (cost $1,467,435,095) 100.0% | 1,849,125,112 | |||||||
| Liabilities less Other Assets (<0.1%) | (177,672 | ) | ||||||
| NET ASSETS 100.0% | $ | 1,848,947,440 | ||||||
*Non-income producing.
ADR American Depositary Receipt.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch Large Cap Value Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Canada | 2.1 | |||
Finland | 0.5 | |||
Switzerland | 2.3 | |||
United Kingdom | 2.4 | |||
United States | 92.7 | |||
TOTAL | 100.0 | % | ||
65
Table of Contents
| WASATCH LONG/SHORT FUND (FMLSX) — Schedule of Investments (formerly Wasatch-1st Source Long/Short Fund) | ||
| Shares | Value | |||||||
| COMMON STOCKS 82.3% | ||||||||
| Agricultural Products 1.7% | ||||||||
| 270,000 | Archer Daniels Midland Co. | $ | 9,722,700 | |||||
| Apparel Retail 1.9% | ||||||||
| 750,000 | Chico’s FAS, Inc.‡ | 11,175,000 | ||||||
| Apparel, Accessories & Luxury Goods 1.5% | ||||||||
| 300,000 | Carter’s, Inc.* ‡ | 8,589,000 | ||||||
| Automotive Retail 0.9% | ||||||||
| 400,000 | Pep Boys — Manny, Moe, & Jack (The)‡ | 5,084,000 | ||||||
| Coal & Consumable Fuels 2.3% | ||||||||
| 250,000 | CONSOL Energy, Inc.‡ | 13,407,500 | ||||||
| Communications Equipment 5.8% | ||||||||
| 750,000 | Blue Coat Systems, Inc.* ‡ | 21,120,000 | ||||||
| 800,000 | Brocade Communications Systems, Inc.* ‡ | 4,920,000 | ||||||
| 450,000 | Cisco Systems, Inc.* ‡ | 7,717,500 | ||||||
| 33,757,500 | ||||||||
| Computer & Electronics Retail 2.5% | ||||||||
| 500,000 | Best Buy Co., Inc.‡ | 14,360,000 | ||||||
| Computer Hardware 3.1% | ||||||||
| 850,000 | Silicon Graphics International Corp.* ‡ | 18,190,000 | ||||||
| Computer Storage & Peripherals 0.5% | ||||||||
| 200,000 | Electronics for Imaging, Inc.* ‡ | 2,942,000 | ||||||
| Data Processing & Outsourced Services 5.4% | ||||||||
| 1,150,000 | Convergys Corp.* ‡ | 16,514,000 | ||||||
| 200,000 | Visa, Inc., Class A | 14,724,000 | ||||||
| 31,238,000 | ||||||||
| Diversified Support Services 2.7% | ||||||||
| 500,000 | Iron Mountain, Inc.‡ | 15,615,000 | ||||||
| Environmental & Facilities Services 1.6% | ||||||||
| 200,000 | Republic Services, Inc.‡ | 6,008,000 | ||||||
| 90,000 | Waste Management, Inc.‡ | 3,360,600 | ||||||
| 9,368,600 | ||||||||
| Fertilizers & Agricultural Chemicals 1.4% | ||||||||
| 110,000 | Monsanto Co.‡ | 7,948,600 | ||||||
| Footwear 0.7% | ||||||||
| 199,329 | Skechers U.S.A., Inc., Class A* ‡ | 4,094,218 | ||||||
| Gold 4.0% | ||||||||
| 310,000 | Newmont Mining Corp.‡ | 16,919,800 | ||||||
| 500,000 | Yamana Gold, Inc. (Canada) | 6,155,000 | ||||||
| 23,074,800 | ||||||||
| Health Care Equipment 4.0% | ||||||||
| 200,000 | Medtronic, Inc.‡ | 7,870,000 | ||||||
| 155,000 | NuVasive, Inc.* ‡ | 3,924,600 | ||||||
| 1,150,000 | Symmetry Medical, Inc.* ‡ | 11,270,000 | ||||||
| 23,064,600 | ||||||||
| Health Care Services 1.9% | ||||||||
| 562,000 | MedQuist Holdings, Inc.* ‡ | 5,856,040 | ||||||
| 170,000 | Omnicare, Inc.‡ | 5,098,300 | ||||||
| 10,954,340 | ||||||||
| Health Care Technology 0.9% | ||||||||
| 320,000 | Emdeon, Inc., Class A* ‡ | 5,155,200 | ||||||
| Shares | Value | |||||||
| Heavy Electrical Equipment 2.1% | ||||||||
| 290,000 | General Cable Corp.* ‡ | $ | 12,557,000 | |||||
| Home Entertainment Software 1.0% | ||||||||
| 300,000 | Electronic Arts, Inc.* ‡ | 5,859,000 | ||||||
| Hypermarkets & Super Centers 3.1% | ||||||||
| 350,000 | Wal-Mart Stores, Inc.‡ | 18,217,500 | ||||||
| Integrated Oil & Gas 1.6% | ||||||||
| 120,000 | ConocoPhillips‡ | 9,583,200 | ||||||
| IT Consulting & Other Services 1.6% | ||||||||
| 550,500 | Saic, Inc.* ‡ | 9,314,460 | ||||||
| Life & Health Insurance 2.5% | ||||||||
| 550,000 | Unum Group‡ | 14,437,500 | ||||||
| Multi-Line Insurance 4.6% | ||||||||
| 625,000 | Loews Corp.‡ | 26,931,250 | ||||||
| Oil & Gas Drilling 4.1% | ||||||||
| 125,000 | Ensco plc ADR‡ (United Kingdom) | 7,230,000 | ||||||
| 350,000 | Noble Corp.* ‡ | 15,967,000 | ||||||
| 10,000 | Transocean Ltd.* ‡ (Switzerland) | 779,500 | ||||||
| 23,976,500 | ||||||||
| Oil & Gas Exploration & Production 6.0% | ||||||||
| 250,000 | Devon Energy Corp.‡ | 22,942,500 | ||||||
| 210,000 | Range Resources Corp.‡ | 12,276,600 | ||||||
| 35,219,100 | ||||||||
| Property & Casualty Insurance 6.2% | ||||||||
| 350,000 | Allstate Corp. (The)‡ | 11,123,000 | ||||||
| 850,000 | CNA Financial Corp.‡ | 25,117,500 | ||||||
| 36,240,500 | ||||||||
| Semiconductors 1.7% | ||||||||
| 500,000 | Intel Corp.‡ | 10,085,000 | ||||||
| Steel 2.9% | ||||||||
| 251,300 | Nucor Corp.‡ | 11,564,826 | ||||||
| 300,000 | Steel Dynamics, Inc.‡ | 5,631,000 | ||||||
| 17,195,826 | ||||||||
| Systems Software 2.1% | ||||||||
| 350,000 | Microsoft Corp.‡ | 8,876,000 | ||||||
| 100,000 | Oracle Corp.‡ | 3,337,000 | ||||||
| 12,213,000 | ||||||||
| Total Common Stocks (cost $415,836,689) | 479,570,894 | |||||||
| PREFERRED STOCKS 1.0% | ||||||||
| Cable & Satellite 0.3% | ||||||||
| 75,000 | Comcast Corp., 7.00%, Series B Pfd. | 1,919,250 | ||||||
| Specialized REITs 0.7% | ||||||||
| 75,000 | Public Storage, 6.625%, Series M Pfd.§§§ | 1,890,750 | ||||||
| 75,000 | Public Storage, 7.25%, Series K Pfd.§§§ | 1,913,250 | ||||||
| 3,804,000 | ||||||||
| Total Preferred Stocks (cost $4,672,590) | 5,723,250 | |||||||
66
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 19.3% | ||||||||
| Repurchase Agreement 19.3% | ||||||||
| $112,755,949 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $113,805,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $115,011,393; repurchase proceeds: $112,755,980‡ (cost $112,755,949) | $ | 112,755,949 | |||||
| Total Short-Term Investments (cost $112,755,949) | 112,755,949 | |||||||
| Total Investments (cost $533,265,228) 102.6% | 598,050,093 | |||||||
| Liabilities less Other Assets (2.6%) | (15,189,717 | ) | ||||||
| NET ASSETS 100.0% | $ | 582,860,376 | ||||||
| Number of Contracts | Value | |||||||
| CALL OPTIONS WRITTEN 1.4% | ||||||||
| Automotive Retail 0.0% | ||||||||
| 119 | Pep Boys — Manny, Moe, & Jack (The), expiring 7/16/11, exercise price $15 | $ | 4,165 | |||||
| Coal & Consumable Fuels 0.1% | ||||||||
| 2,200 | CONSOL Energy, Inc., expiring 5/21/11, exercise price $55 | 583,000 | ||||||
| Communications Equipment 0.1% | ||||||||
| 2,000 | Blue Coat Systems, Inc., expiring 5/21/11, exercise price $28 | 350,000 | ||||||
| 500 | Blue Coat Systems, Inc., expiring 4/16/11, exercise price $29 | 22,500 | ||||||
| 2,000 | Cisco Systems, Inc., expiring 4/16/11, exercise price $22 | 2,000 | ||||||
| 374,500 | ||||||||
| Computer Hardware 0.1% | ||||||||
| 2,000 | Silicon Graphics International Corp., expiring 6/18/11, exercise price $20 | 680,000 | ||||||
| Diversified Support Services 0.0% | ||||||||
| 700 | Iron Mountain, Inc., expiring 4/16/11, exercise price $27.50 | 273,000 | ||||||
| Fertilizers & Agricultural Chemicals 0.0% | ||||||||
| 1,000 | Monsanto Co., expiring 4/16/11, exercise price $75 | 65,000 | ||||||
| Heavy Electrical Equipment 0.4% | ||||||||
| 1,000 | General Cable Corp., expiring 5/21/11, exercise price $33 | 1,060,000 | ||||||
| 500 | General Cable Corp., expiring 5/21/11, exercise price $35 | 440,000 | ||||||
| 527 | General Cable Corp., expiring 5/21/11, exercise price $40 | 242,420 | ||||||
| 873 | General Cable Corp., expiring 8/20/11, exercise price $43 | 384,120 | ||||||
| 2,126,540 | ||||||||
| Integrated Oil & Gas 0.1% | ||||||||
| 1,200 | ConocoPhillips, expiring 8/20/11, exercise price $80 | 564,000 | ||||||
| Number of Contracts | Value | |||||||
| Oil & Gas Drilling 0.3% | ||||||||
| 1,250 | Ensco plc ADR (United Kingdom), expiring 4/16/11, exercise price $55 | $ | 575,000 | |||||
| 3,000 | Noble Corp., expiring 6/18/11, exercise price $45 | 1,017,000 | ||||||
| 100 | Transocean Ltd. (Switzerland), expiring 5/21/11, exercise price $70 | 104,500 | ||||||
| 1,696,500 | ||||||||
| Oil & Gas Exploration & Production 0.1% | ||||||||
| 1,500 | Devon Energy Corp., expiring 4/16/11, exercise price $90 | 480,000 | ||||||
| 1,000 | Devon Energy Corp., expiring 5/21/11, exercise price $95 | 242,000 | ||||||
| 722,000 | ||||||||
| Steel 0.2% | ||||||||
| 513 | Nucor Corp., expiring 4/16/11, exercise price $44 | 121,581 | ||||||
| 1,000 | Nucor Corp., expiring 7/16/11, exercise price $46 | 274,000 | ||||||
| 1,000 | Nucor Corp., expiring 7/16/11, exercise price $50 | 109,000 | ||||||
| 3,000 | Steel Dynamics, Inc., expiring 5/21/11, exercise price $18 | 450,000 | ||||||
| 954,581 | ||||||||
| Total Call Options Written (premium $7,228,515) | 8,043,286 | |||||||
| Shares | Value | |||||||
| SECURITIES SOLD SHORT 19.5% | ||||||||
| Aerospace & Defense 1.0% | ||||||||
| 40,000 | Precision Castparts Corp. | $ | 5,887,200 | |||||
| Communications Equipment 1.1% | ||||||||
| 150,000 | Juniper Networks, Inc.* | 6,268,605 | ||||||
| Diversified Chemicals 1.2% | ||||||||
| 185,000 | Dow Chemical Co. (The) | 6,983,750 | ||||||
| Health Care Supplies 1.1% | ||||||||
| 325,000 | Align Technology, Inc.* | 6,656,000 | ||||||
| Homebuilding 1.2% | ||||||||
| 400,000 | Lennar Corp., Class A | 7,248,000 | ||||||
| Household Products 1.1% | ||||||||
| 100,000 | Procter & Gamble Co. (The) | 6,160,000 | ||||||
| Office REITs 0.9% | ||||||||
| 90,000 | Digital Realty Trust, Inc. | 5,232,600 | ||||||
| Packaged Foods & Meats 4.3% | ||||||||
| 200,000 | General Mills, Inc. | 7,310,000 | ||||||
| 100,000 | Hershey Co. (The) | 5,435,000 | ||||||
| 100,000 | Kellogg Co. | 5,398,000 | ||||||
| 225,000 | Kraft Foods, Inc., Class A | 7,056,000 | ||||||
| 25,199,000 | ||||||||
| Restaurants 2.0% | ||||||||
| 123,787 | Cracker Barrel Old Country Store, Inc. | 6,082,893 | ||||||
| 125,000 | PF Chang’s China Bistro, Inc. | 5,773,750 | ||||||
| 11,856,643 | ||||||||
67
Table of Contents
| WASATCH LONG/SHORT FUND (FMLSX) — Schedule of Investments (formerly Wasatch-1st Source Long/Short Fund) (continued) | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| Retail REITs 4.6% | ||||||||
| 100,000 | Federal Realty Investment Trust | $ | 8,156,000 | |||||
| 250,000 | Regency Centers Corp. | 10,870,000 | ||||||
| 70,000 | Simon Property Group, Inc. | 7,501,200 | ||||||
| 26,527,200 | ||||||||
| Systems Software 1.0% | ||||||||
| 125,000 | Red Hat, Inc.* | 5,673,750 | ||||||
| Total Securities Sold Short (proceeds $109,352,627) | 113,692,748 | |||||||
*Non-income producing.
‡All or a portion of this security has been designated as collateral for call options written and short sales (see Notes 7, 4 and 3, respectively).
§§§Perpetual Maturity. Callable any time after first call date. Maturity date is next call date.
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch Long/Short Fund’s investments, excluding short-term investments, options written and securities sold short, were in the following countries:
| Country | % | |||
Canada | 1.3 | |||
Switzerland | 0.2 | |||
United Kingdom | 1.5 | |||
United States | 97.0 | |||
TOTAL | 100.0 | % | ||
68
Table of Contents
| WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 94.7% | ||||||||
| Advertising 0.9% | ||||||||
| 162,155 | ReachLocal, Inc.* | $ | 3,243,100 | |||||
| Air Freight & Logistics 1.1% | ||||||||
| 2,468,075 | Goodpack Ltd. (Singapore) | 3,799,147 | ||||||
| Apparel Retail 0.6% | ||||||||
| 75,400 | Zumiez, Inc.* | 1,992,822 | ||||||
| Apparel, Accessories & Luxury Goods 1.1% | ||||||||
| 694,590 | Ports Design Ltd. (China) | 1,602,684 | ||||||
| 126,927 | Volcom, Inc. | 2,351,957 | ||||||
| 3,954,641 | ||||||||
| Application Software 7.2% | ||||||||
| 352,302 | Convio, Inc.* | 4,090,226 | ||||||
| 219,273 | Interactive Intelligence, Inc.* | 8,488,058 | ||||||
| 60,422 | RealPage, Inc.* | 1,675,502 | ||||||
| 154,645 | Tyler Technologies, Inc.* | 3,666,633 | ||||||
| 72,460 | Ultimate Software Group, Inc.* | 4,257,025 | ||||||
| 88,450 | VanceInfo Technologies, Inc. ADR* (China) | 2,778,215 | ||||||
| 24,955,659 | ||||||||
| Asset Management & Custody Banks 3.3% | ||||||||
| 67,466 | Diamond Hill Investment Group, Inc. | 5,397,280 | ||||||
| 41,587 | Virtus Investment Partners, Inc.* | 2,450,306 | ||||||
| 84,097 | Westwood Holdings Group, Inc. | 3,384,904 | ||||||
| 11,232,490 | ||||||||
| Automotive Retail 1.3% | ||||||||
| 131,470 | Monro Muffler Brake, Inc. | 4,335,881 | ||||||
| Biotechnology 3.1% | ||||||||
| 221,095 | 3SBio, Inc. ADR* (China) | 3,822,733 | ||||||
| 614,227 | Abcam plc (United Kingdom) | 3,724,234 | ||||||
| 258,770 | Exact Sciences Corp.* | 1,904,547 | ||||||
| 295,586 | NeurogesX, Inc.* | 1,197,123 | ||||||
| 10,648,637 | ||||||||
| Computer Storage & Peripherals 1.2% | ||||||||
| 333,265 | Intevac, Inc.* | 4,142,484 | ||||||
| Construction & Engineering 0.3% | ||||||||
| 100,360 | Orion Marine Group, Inc. * | 1,077,866 | ||||||
| Consumer Finance 2.4% | ||||||||
| 402,931 | Dollar Financial Corp.* | 8,360,818 | ||||||
| Data Processing & Outsourced Services 1.4% | ||||||||
| 266,630 | Wirecard AG (Germany) | 4,792,044 | ||||||
| Diversified Banks 0.6% | ||||||||
| 167,403 | Encore Bancshares, Inc.* | 2,032,272 | ||||||
| Diversified Support Services 1.5% | ||||||||
| 277,755 | STR Holdings, Inc.* | 5,327,341 | ||||||
| Electronic Manufacturing Services 1.4% | ||||||||
| 82,675 | IPG Photonics Corp.* | 4,768,694 | ||||||
| Environmental & Facilities Services 1.0% | ||||||||
| 246,550 | Heritage-Crystal Clean, Inc.* | 3,513,338 | ||||||
| General Merchandise Stores 1.8% | ||||||||
| 346,794 | Gordmans Stores, Inc.* | 6,148,658 | ||||||
| Health Care Distributors 1.3% | ||||||||
| 57,666 | MWI Veterinary Supply, Inc.* | 4,652,493 | ||||||
| Shares | Value | |||||||
| Health Care Equipment 6.7% | ||||||||
| 163,286 | Abaxis, Inc.* | $ | 4,709,168 | |||||
| 371,183 | AtriCure, Inc.* | 4,224,063 | ||||||
| 476,001 | Cardica, Inc.* | 1,694,564 | ||||||
| 341,000 | Cardica, Inc. PIPE* *** † | 1,213,960 | ||||||
| 161,766 | Cardiovascular Systems, Inc.* | 1,751,926 | ||||||
| 14,145,735 | LMA International N.V. (Singapore) | 3,591,712 | ||||||
| 92,795 | NuVasive, Inc.* | 2,349,569 | ||||||
| 192,405 | Synovis Life Technologies, Inc.* | 3,690,328 | ||||||
| 23,225,290 | ||||||||
| Health Care Facilities 0.4% | ||||||||
| 53,826 | AmSurg Corp.* | 1,369,333 | ||||||
| Health Care Services 5.6% | ||||||||
| 154,347 | Bio-Reference Laboratories, Inc.* | 3,463,547 | ||||||
| 169,807 | CorVel Corp.* | 9,030,336 | ||||||
| 129,790 | Healthways, Inc.* | 1,994,872 | ||||||
| 108,855 | IPC The Hospitalist Co., Inc.* | 4,943,106 | ||||||
| 19,431,861 | ||||||||
| Health Care Technology 2.5% | ||||||||
| 109,110 | Computer Programs and Systems, Inc. | 7,013,591 | ||||||
| 257,101 | RaySearch Laboratories AB (Sweden) | 1,445,144 | ||||||
| 8,458,735 | ||||||||
| Human Resource & Employment Services 0.9% | ||||||||
| 216,181 | CTPartners Executive Search Inc.* | 3,058,961 | ||||||
| Industrial Machinery 0.6% | ||||||||
| 250,000 | AIA Engineering Ltd. (India) | 1,934,073 | ||||||
| Internet Software & Services 6.9% | ||||||||
| 50,125 | Constant Contact, Inc.* | 1,749,362 | ||||||
| 247,530 | DealerTrack Holdings, Inc.* | 5,683,289 | ||||||
| 240,229 | Envestnet, Inc.* | 3,228,678 | ||||||
| 304,125 | LoopNet, Inc.* | 4,303,369 | ||||||
| 233,940 | SciQuest, Inc.* | 3,396,809 | ||||||
| 217,730 | SPS Commerce, Inc.* | 3,376,992 | ||||||
| 232,605 | TechTarget, Inc.* | 2,072,510 | ||||||
| 23,811,009 | ||||||||
| IT Consulting & Other Services 1.4% | ||||||||
| 1,396,290 | CSG Ltd. (Australia) | 2,026,743 | ||||||
| 145,298 | hiSoft Technology International Ltd. ADR* (China) | 2,721,432 | ||||||
| 4,748,175 | ||||||||
| Life Sciences Tools & Services 3.3% | ||||||||
| 61,879 | Fluidigm Corp.* | 885,489 | ||||||
| 187,499 | ICON plc ADR* (Ireland) | 4,048,103 | ||||||
| 263,436 | MEDTOX Scientific, Inc. | 4,322,985 | ||||||
| 188,440 | ShangPharma Corp. ADR* (China) | 2,282,008 | ||||||
| 11,538,585 | ||||||||
| Oil & Gas Equipment & Services 0.9% | ||||||||
| 180,915 | Pason Systems, Inc. (Canada) | 2,939,507 | ||||||
| Oil & Gas Exploration & Production 0.6% | ||||||||
| 820,710 | Ithaca Energy, Inc.* (Canada) | 2,175,917 | ||||||
| Pharmaceuticals 1.2% | ||||||||
| 487,620 | Akorn, Inc.* | 2,813,567 | ||||||
| 122,936 | ISTA Pharmaceuticals, Inc.* | 1,245,342 | ||||||
| 4,058,909 | ||||||||
69
Table of Contents
| WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments (continued) | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| Regional Banks 3.0% | ||||||||
| 2,874,569 | City Union Bank Ltd. (India) | $ | 2,894,229 | |||||
| 349,902 | First California Financial Group, Inc.* | 1,312,133 | ||||||
| 352,730 | Nara Bancorp, Inc.* | 3,393,263 | ||||||
| 253,381 | Pacific Continental Corp. | 2,581,952 | ||||||
| 10,181,577 | ||||||||
| Research & Consulting Services 4.3% | ||||||||
| 128,331 | CRA International, Inc.* | 3,699,783 | ||||||
| 151,720 | eClerx Services Ltd. (India) | 2,194,403 | ||||||
| 316,350 | Resources Connection, Inc. | 6,134,026 | ||||||
| 99,395 | Stantec, Inc.* (Canada) | 2,982,844 | ||||||
| 15,011,056 | ||||||||
| Restaurants 1.5% | ||||||||
| 106,040 | Peet’s Coffee & Tea, Inc.* | 5,099,464 | ||||||
| Semiconductor Equipment 0.5% | ||||||||
| 196,375 | BCD Semiconductor Manufacturing Ltd. ADR* (China) | 1,702,571 | ||||||
| Semiconductors 10.1% | ||||||||
| 265,807 | Melexis N.V. (Belgium) | 4,748,940 | ||||||
| 441,385 | Micrel, Inc. | 5,949,870 | ||||||
| 79,482 | NetLogic Microsystems, Inc.* | 3,339,834 | ||||||
| 631 | NVE Corp.* | 35,551 | ||||||
| 771,842 | O2Micro International Ltd. ADR* (China) | 5,865,999 | ||||||
| 280,293 | Pericom Semiconductor Corp.* | 2,906,638 | ||||||
| 264,483 | Power Integrations, Inc. | 10,137,633 | ||||||
| 87,470 | Supertex, Inc.* | 1,948,832 | ||||||
| 34,933,297 | ||||||||
| Specialized Finance 0.1% | ||||||||
| 154,000 | Goldwater Bank, N.A.* *** † | 231,000 | ||||||
| Specialty Chemicals 0.8% | ||||||||
| 281,227 | Neo Material Technologies, Inc.* (Canada) | 2,706,812 | ||||||
| Specialty Stores 4.1% | ||||||||
| 322,805 | Big 5 Sporting Goods Corp. | 3,847,836 | ||||||
| 197,015 | easyhome Ltd. (Canada) | 1,707,253 | ||||||
| 241,077 | Hibbett Sports, Inc.* | 8,632,967 | ||||||
| 14,188,056 | ||||||||
| Systems Software 1.5% | ||||||||
| 133,910 | OPNET Technologies, Inc. | 5,221,151 | ||||||
| Thrifts & Mortgage Finance 1.0% | ||||||||
| 578,300 | Dewan Housing Finance Corp. Ltd. (India) | 3,462,408 | ||||||
| Trading Companies & Distributors 2.6% | ||||||||
| 204,523 | CAI International, Inc.* | 5,288,965 | ||||||
| 220,363 | Rush Enterprises, Inc., Class B* | 3,832,112 | ||||||
| 9,121,077 | ||||||||
| Trucking 2.7% | ||||||||
| 114,765 | Marten Transport, Ltd. | 2,559,259 | ||||||
| 110,422 | Old Dominion Freight Line, Inc.* | 3,874,708 | ||||||
| 201,253 | Vitran Corp., Inc.* (Canada) | 2,835,655 | ||||||
| 9,269,622 | ||||||||
| Total Common Stocks (cost $224,138,025) | 326,856,831 | |||||||
| PREFERRED STOCKS 1.0% | ||||||||
| Regional Banks 1.0% | ||||||||
| 434,600 | Banco Daycoval S.A. Pfd. (Brazil) | 3,259,734 | ||||||
| Total Preferred Stocks (cost $1,639,882) | 3,259,734 | |||||||
| Shares | Value | |||||||
| WARRANTS 0.2% | ||||||||
| Health Care Equipment 0.2% | ||||||||
| 121,124 | Cardica, Inc., expiring 6/7/12* *** † | $ | — | |||||
| 322,500 | Cardica, Inc., expiring 9/29/14* *** † | 680,475 | ||||||
| 680,475 | ||||||||
| Total Warrants (cost $59,692) | 680,475 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 3.6% | ||||||||
| Repurchase Agreement 3.6% | ||||||||
| $12,467,754 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $12,585,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $12,718,408; repurchase proceeds: $12,467,757 (cost $12,467,754) | $ | 12,467,754 | |||||
| Total Short-Term Investments (cost $12,467,754) | 12,467,754 | |||||||
| Total Investments (cost $238,305,353) 99.5% | 343,264,794 | |||||||
| Other Assets less Liabilities 0.5% | 1,725,937 | |||||||
| NET ASSETS 100.0% | $ | 344,990,731 | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
ADR American Depositary Receipt.
PIPE Private Investment in a Public Equity.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch Micro Cap Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Australia | 0.6 | |||
Belgium | 1.4 | |||
Brazil | 1.0 | |||
Canada | 4.7 | |||
China | 6.3 | |||
Germany | 1.5 | |||
India | 3.2 | |||
Ireland | 1.2 | |||
Singapore | 2.2 | |||
Sweden | 0.4 | |||
United Kingdom | 1.1 | |||
United States | 76.4 | |||
TOTAL | 100.0 | % | ||
70
Table of Contents
| WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 90.9% | ||||||||
| Advertising 0.2% | ||||||||
| 6,437 | 1000mercis* (France) | $ | 425,095 | |||||
| Air Freight & Logistics 0.4% | ||||||||
| 1,800,000 | Aramex PJSC* (United Arab Emirates) | 882,173 | ||||||
| Airlines 0.8% | ||||||||
| 36,000 | Allegiant Travel Co. | 1,577,160 | ||||||
| Apparel, Accessories & Luxury Goods 2.5% | ||||||||
| 39,000 | LG Fashion Corp. (Korea) | 1,052,372 | ||||||
| 60,000 | Maidenform Brands, Inc.* | 1,714,200 | ||||||
| 180,000 | Ted Baker plc (United Kingdom) | 1,913,554 | ||||||
| 1,014,621 | Zhulian Corp. Berhad (Malaysia) | 596,294 | ||||||
| 5,276,420 | ||||||||
| Application Software 4.5% | ||||||||
| 275,000 | Clicksoftware Technologies Ltd.* (Israel) | 2,362,250 | ||||||
| 80,000 | Convio, Inc.* | 928,800 | ||||||
| 50,000 | Ebix, Inc.* | 1,182,500 | ||||||
| 79,000 | Fundtech Ltd.* (Israel) | 1,374,600 | ||||||
| 90,000 | Interactive Intelligence, Inc.* | 3,483,900 | ||||||
| 9,332,050 | ||||||||
| Asset Management & Custody Banks 4.1% | ||||||||
| 20,000,000 | CST Mining Group Ltd.* (Hong Kong) | 571,058 | ||||||
| 70,000 | Solar Capital Ltd. | 1,671,600 | ||||||
| 75,000 | Solar Senior Capital Ltd.* | 1,397,250 | ||||||
| 250,000 | Treasury Group Ltd. (Australia) | 1,192,320 | ||||||
| 64,000 | Virtus Investment Partners, Inc.* ‡ | 3,770,880 | ||||||
| 8,603,108 | ||||||||
| Auto Parts & Equipment 0.9% | ||||||||
| 190,000 | Martinrea International, Inc.* (Canada) | 1,842,472 | ||||||
| Automotive Retail 0.8% | ||||||||
| 18,000 | Delticom AG (Germany) | 1,632,236 | ||||||
| Biotechnology 0.9% | ||||||||
| 400,000 | Dyadic International, Inc.* | 780,000 | ||||||
| 271,672 | Luna Innovations, Inc.* | 671,030 | ||||||
| 63,203 | NeurogesX, Inc.* | 255,972 | ||||||
| 37,934 | NeurogesX, Inc. PIPE* *** † | 153,633 | ||||||
| 1,860,635 | ||||||||
| Building Products 0.9% | ||||||||
| 155,000 | NCI Building Systems, Inc.* | 1,963,850 | ||||||
| Coal & Consumable Fuels 0.2% | ||||||||
| 1,000,000 | Cockatoo Coal Ltd.* (Australia) | 508,032 | ||||||
| Commercial Printing 1.0% | ||||||||
| 105,000 | Multi-Color Corp. | 2,122,050 | ||||||
| Communications Equipment 3.4% | ||||||||
| 40,000 | Alliance Fiber Optic Products, Inc.* | 448,000 | ||||||
| 75,000 | Blue Coat Systems, Inc.* | 2,112,000 | ||||||
| 150,000 | Dasan Networks, Inc.* (Korea) | 1,200,602 | ||||||
| 260,000 | Infinera Corp.* | 2,181,400 | ||||||
| 527,100 | UTStarcom, Inc.* | 1,238,685 | ||||||
| 7,180,687 | ||||||||
| Computer Storage & Peripherals 1.6% | ||||||||
| 140,000 | Electronics for Imaging, Inc.* | 2,059,400 | ||||||
| 98,000 | Intevac, Inc.* | 1,218,140 | ||||||
| 3,277,540 | ||||||||
| Shares | Value | |||||||
| Consumer Finance 3.7% | ||||||||
| 380,000 | Advance America Cash Advance Centers, Inc. | $ | 2,014,000 | |||||
| 126,000 | Dollar Financial Corp.* | 2,614,500 | ||||||
| 80,000 | First Cash Financial Services, Inc.* ‡ | 3,088,000 | ||||||
| 7,716,500 | ||||||||
| Department Stores 0.6% | ||||||||
| 14,000,000 | PT Ramayana Lestari Sentosa Tbk (Indonesia) | 1,221,935 | ||||||
| Diversified Banks 0.1% | ||||||||
| 55,556 | Idaho Trust Bancorp* *** † | 187,224 | ||||||
| Diversified Chemicals 1.0% | ||||||||
| 52,000 | LSB Industries, Inc.* | 2,061,280 | ||||||
| Diversified REITs 0.8% | ||||||||
| 150,000 | Hamborner REIT AG (Germany) | 1,576,209 | ||||||
| Education Services 0.4% | ||||||||
| 45,000 | Bridgepoint Education, Inc.* | 769,500 | ||||||
| Electrical Components & Equipment 1.7% | ||||||||
| 77,000 | Franklin Electric Co., Inc.‡ | 3,557,400 | ||||||
| Electronic Equipment & Instruments 0.7% | ||||||||
| 151,000 | GSI Group, Inc.* (Canada) | 1,555,300 | ||||||
| Electronic Manufacturing Services 2.0% | ||||||||
| 134,000 | Sanmina-SCI Corp.* | 1,502,140 | ||||||
| 152,000 | TTM Technologies, Inc.* ‡ | 2,760,320 | ||||||
| 4,262,460 | ||||||||
| Environmental & Facilities Services 1.1% | ||||||||
| 166,326 | Heritage-Crystal Clean, Inc.* | 2,370,146 | ||||||
| Gas Utilities 0.6% | ||||||||
| 180,000 | Indraprastha Gas Ltd. (India) | 1,209,889 | ||||||
| General Merchandise Stores 0.6% | ||||||||
| 72,000 | Gordmans Stores, Inc.* | 1,276,560 | ||||||
| Health Care Distributors 0.8% | ||||||||
| 400,000 | Animal Health International, Inc.* | 1,680,000 | ||||||
| Health Care Equipment 4.5% | ||||||||
| 250,000 | Alphatec Holdings, Inc.* | 675,000 | ||||||
| 200,000 | AtriCure, Inc.* | 2,276,000 | ||||||
| 180,000 | Cardica, Inc. PIPE* *** † | 640,800 | ||||||
| 80,000 | NuVasive, Inc.* | 2,025,600 | ||||||
| 450,000 | Solta Medical, Inc.* | 1,485,000 | ||||||
| 53,000 | Zoll Medical Corp.* ‡ | 2,374,930 | ||||||
| 9,477,330 | ||||||||
| Health Care Facilities 0.4% | ||||||||
| 500,000 | CVS Group plc* (United Kingdom) | 828,274 | ||||||
| Health Care Services 2.2% | ||||||||
| 62,000 | Bio-Reference Laboratories, Inc.* | 1,391,280 | ||||||
| 245,000 | MedQuist Holdings, Inc.* | 2,552,900 | ||||||
| 64,500 | Servizi Italia S.p.A. (Italy) | 624,274 | ||||||
| 4,568,454 | ||||||||
| Health Care Supplies 1.0% | ||||||||
| 35,000 | Sartorius Stedim Biotech (France) | 2,051,408 | ||||||
| Health Care Technology 1.5% | ||||||||
| 75,000 | MedAssets, Inc.* | 1,145,250 | ||||||
| 81,000 | Transcend Services, Inc.* | 1,944,000 | ||||||
| 3,089,250 | ||||||||
71
Table of Contents
| WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| Home Furnishings 0.2% | ||||||||
| 28,796 | Hooker Furniture Corp. | $ | 344,400 | |||||
| Home Improvement Retail 1.4% | ||||||||
| 4,000,000 | Ace Hardware Indonesia (Indonesia) | 1,171,404 | ||||||
| 175,000 | Byggmax Group AB* (Sweden) | 1,688,063 | ||||||
| 2,859,467 | ||||||||
| Hotels, Resorts & Cruise Lines 0.9% | ||||||||
| 150,000 | Orient-Express Hotels Ltd., Class A* | 1,855,500 | ||||||
| Human Resource & Employment Services 0.7% | ||||||||
| 100,000 | CTPartners Executive Search Inc.* | 1,415,000 | ||||||
| Industrial Machinery 2.7% | ||||||||
| 95,000 | Gencor Industries, Inc.* | 749,550 | ||||||
| 105,000 | Hurco Cos., Inc.* | 3,202,500 | ||||||
| 85,000 | John Bean Technologies Corp. | 1,634,550 | ||||||
| 5,586,600 | ||||||||
| Internet Software & Services 0.9% | ||||||||
| 155,600 | Perficient, Inc.* | 1,868,756 | ||||||
| IT Consulting & Other Services 1.7% | ||||||||
| 180,000 | Atea ASA (Norway) | 2,030,020 | ||||||
| 500,000 | CSG Ltd. (Australia) | 725,760 | ||||||
| 37,100 | Virtusa Corp.* | 694,883 | ||||||
| 3,450,663 | ||||||||
| Metal & Glass Containers 0.6% | ||||||||
| 128,000 | Myers Industries, Inc. | 1,271,040 | ||||||
| Oil & Gas Equipment & Services 2.2% | ||||||||
| 100,000 | Matrix Service Co.* | 1,390,000 | ||||||
| 142,000 | Tesco Corp.* | 3,116,900 | ||||||
| 4,506,900 | ||||||||
| Oil & Gas Exploration & Production 3.7% | ||||||||
| 85,000 | Exillon Energy plc* (United Arab Emirates) | 560,492 | ||||||
| 200,000 | Pan Orient Energy Corp.* (Canada) | 1,421,571 | ||||||
| 1,600,000 | PetroNeft Resources plc* (United Kingdom) | 1,415,303 | ||||||
| 50,000 | Resolute Energy Corp.* | 904,435 | ||||||
| 165,000 | Selan Exploration Technology Ltd. (India) | 1,232,089 | ||||||
| 80,000 | Triangle Petroleum Corp.* | 664,000 | ||||||
| 205,000 | VAALCO Energy, Inc.* | 1,590,800 | ||||||
| 7,788,690 | ||||||||
| Personal Products 0.7% | ||||||||
| 90,000 | Atrium Innovations, Inc.* (Canada) | 1,534,740 | ||||||
| Pharmaceuticals 1.3% | ||||||||
| 39,142 | Daewoong Pharmaceutical Co. Ltd. (Korea) | 1,587,875 | ||||||
| 180,000 | Whanin Pharmaceutical Co. Ltd. (Korea) | 1,189,662 | ||||||
| 2,777,537 | ||||||||
| Property & Casualty Insurance 0.5% | ||||||||
| 105,000 | SeaBright Holdings, Inc. | 1,076,250 | ||||||
| Regional Banks 3.2% | ||||||||
| 500,000 | City Union Bank Ltd. (India) | 503,420 | ||||||
| 200,000 | First California Financial Group, Inc.* | 750,000 | ||||||
| 52,594 | First of Long Island Corp. (The) | 1,459,483 | ||||||
| 28,445 | Lakeland Financial Corp. | 645,133 | ||||||
| 140,000 | OBA Financial Services, Inc.* | 2,052,400 | ||||||
| 60,000 | Tower Bancorp, Inc. | 1,337,400 | ||||||
| 6,747,836 | ||||||||
| Shares | Value | |||||||
| Research & Consulting Services 2.2% | ||||||||
| 90,000 | Huron Consulting Group, Inc.* | $ | 2,492,100 | |||||
| 105,000 | Resources Connection, Inc. | 2,035,950 | ||||||
| 4,528,050 | ||||||||
| Restaurants 1.2% | ||||||||
| 200,000 | Caribou Coffee Co., Inc.* | 2,034,000 | ||||||
| 140,000 | Oishi Group Public Co. Ltd.*** (Thailand) | 476,773 | ||||||
| 2,510,773 | ||||||||
| Semiconductor Equipment 1.2% | ||||||||
| 95,000 | Cohu, Inc. | 1,459,200 | ||||||
| 40,000 | Koh Young Technology, Inc.* (Korea) | 1,002,781 | ||||||
| 2,461,981 | ||||||||
| Semiconductors 3.2% | ||||||||
| 110,000 | Melexis N.V. (Belgium) | 1,965,273 | ||||||
| 255,000 | O2Micro International Ltd. ADR* (China) | 1,938,000 | ||||||
| 90,000 | Pericom Semiconductor Corp.* | 933,300 | ||||||
| 70,000 | Standard Microsystems Corp.* | 1,726,200 | ||||||
| 6,562,773 | ||||||||
| Specialized Finance 3.1% | ||||||||
| 120,000 | Encore Capital Group, Inc.* ‡ | 2,842,800 | ||||||
| 145,000 | Gain Capital Holdings, Inc.* | 1,112,150 | ||||||
| 41,900 | Goldwater Bank, N.A.* *** † | 62,850 | ||||||
| 225,000 | Newstar Financial, Inc.* | 2,457,000 | ||||||
| 6,474,800 | ||||||||
| Specialty Chemicals 0.8% | ||||||||
| 180,000 | Neo Material Technologies, Inc.* (Canada) | 1,732,501 | ||||||
| Specialty Stores 1.1% | ||||||||
| 260,000 | easyhome Ltd. (Canada) | 2,253,056 | ||||||
| Steel 2.0% | ||||||||
| 58,000 | AM Castle & Co.* | 1,095,040 | ||||||
| 54,000 | Haynes International, Inc. | 2,994,300 | ||||||
| 4,089,340 | ||||||||
| Systems Software 2.0% | ||||||||
| 1,400,000 | GuestLogix, Inc.* (Canada) | 1,415,381 | ||||||
| 43,000 | OPNET Technologies, Inc. | 1,676,570 | ||||||
| 2,555 | Simplex Holdings, Inc. (Japan) | 1,090,380 | ||||||
| 4,182,331 | ||||||||
| Textiles 0.6% | ||||||||
| 1,000,000 | S. Kumars Nationwide Ltd.* (India) | 1,228,837 | ||||||
| Thrifts & Mortgage Finance 2.9% | ||||||||
| 160,000 | Dewan Housing Finance Corp. Ltd. (India) | 957,955 | ||||||
| 130,000 | Ocean Shore Holding Co. | 1,690,000 | ||||||
| 165,000 | Oritani Financial Corp. | 2,092,200 | ||||||
| 136,174 | Westfield Financial, Inc. | 1,233,736 | ||||||
| 5,973,891 | ||||||||
| Trading Companies & Distributors 2.3% | ||||||||
| 98,772 | CAI International, Inc.* | 2,554,244 | ||||||
| 110,000 | Interline Brands, Inc.* ‡ | 2,244,000 | ||||||
| 4,798,244 | ||||||||
| Trucking 1.5% | ||||||||
| 73,000 | Marten Transport, Ltd. | 1,627,900 | ||||||
| 100,000 | Vitran Corp., Inc.* (Canada) | 1,409,000 | ||||||
| 3,036,900 | ||||||||
| Water Utilities 0.2% | ||||||||
| 900,000 | Sound Global Ltd.* (Singapore) | 514,163 | ||||||
| Total Common Stocks (cost $150,772,583) | 189,373,646 | |||||||
72
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| PREFERRED STOCKS 0.1% | ||||||||
| Pharmaceuticals 0.1% | ||||||||
| 52,631 | Acetylon Pharm, Inc., Series B Pfd.*** † | $ | 249,997 | |||||
| Total Preferred Stocks (cost $249,997) | 249,997 | |||||||
| WARRANTS 0.1% | ||||||||
| Biotechnology 0.0% | ||||||||
| 30,399 | NeurogesX, Inc., expiring 12/28/12* *** † | — | ||||||
| Health Care Equipment 0.1% | ||||||||
| 58,140 | Cardica, Inc., expiring 6/7/12* *** † | — | ||||||
| 110,500 | Cardica, Inc., expiring 9/29/14* *** † | 233,155 | ||||||
| 233,155 | ||||||||
| Total Warrants (cost $26,915) | 233,155 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 9.1% | ||||||||
| Repurchase Agreement 9.1% | ||||||||
| $18,896,780 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $19,075,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $19,277,205; repurchase proceeds: $18,896,785† (cost $18,896,780) | $ | 18,896,780 | |||||
| Total Short-Term Investments (cost $18,896,780) | 18,896,780 | |||||||
| Total Investments (cost $169,946,275) 100.2% | 208,753,578 | |||||||
| Liabilities Less Other Assets (0.2%) | (341,396 | ) | ||||||
| NET ASSETS 100.0% | $ | 208,412,182 | ||||||
| Number of Contracts | Value | |||||||
| CALL OPTIONS WRITTEN 0.0% | ||||||||
| Consumer Finance 0.0% | ||||||||
| 200 | First Cash Financial Services, Inc., expiring 5/21/11, exercise price $40 | $ | 28,000 | |||||
| Total Call Options Written (premium $32,499) | 28,000 | |||||||
| Contracts | Net Unrealized Depreciation | |||||||
| FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS SHORT 0.5% | ||||||||
| 12,000,000 CAD | USD, State Street Bank and Trust Co., settlement date 4/7/11, (cost $12,015,620 value $12,377,847) | $ | (362,227 | ) | ||||
| 5,000,000 EUR | USD, State Street Bank and Trust Co., settlement date 4/11/11, (cost $6,503,000 value $7,100,080) | (597,080 | ) | |||||
| Total Forward Foreign Currency Exchange Contracts Short (cost $18,518,620 value $19,477,928) | (959,307 | ) | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
‡All or a portion of this security has been designated as collateral for call options written and forward foreign currency exchange contracts (see Notes 7 and 4, respectively).
ADR American Depositary Receipt.
PIPE Private Investment in a Public Equity.
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
|
��
| |||||||
At March 31, 2011, Wasatch Micro Cap Value Fund’s investments, excluding short-term investments, options written and forward foreign currency exchange contracts, were in the following countries:
| Country | % | |||
Australia | 1.3 | |||
Belgium | 1.0 | |||
Canada | 6.9 | |||
China | 1.0 | |||
France | 1.3 | |||
Germany | 1.7 | |||
Hong Kong | 0.3 | |||
India | 2.7 | |||
Indonesia | 1.3 | |||
Israel | 2.0 | |||
Italy | 0.3 | |||
Japan | 0.6 | |||
Korea | 3.2 | |||
Malaysia | 0.3 | |||
Norway | 1.1 | |||
Singapore | 0.3 | |||
Sweden | 0.9 | |||
Thailand | 0.2 | |||
United Arab Emirates | 0.7 | |||
United Kingdom | 2.2 | |||
United States | 70.7 | |||
TOTAL | 100.0 | % | ||
73
Table of Contents
| WASATCH SMALL CAP GROWTH FUND (WAAEX) — Schedule of Investments | ||
| Shares | Value | |||||||
| COMMON STOCKS 91.1% | ||||||||
| Aerospace & Defense 2.4% | ||||||||
| 225,016 | HEICO Corp. | $ | 14,068,000 | |||||
| 544,928 | HEICO Corp., Class A | 24,510,862 | ||||||
| 38,578,862 | ||||||||
| Air Freight & Logistics 1.1% | ||||||||
| 36,319,023 | Aramex PJSC* (United Arab Emirates) | 17,799,807 | ||||||
| Aluminum 0.2% | ||||||||
| 6,542,578 | Midas Holdings Ltd. (Singapore) | 3,893,465 | ||||||
| Apparel Retail 1.6% | ||||||||
| 923,960 | Chico’s FAS, Inc. | 13,767,004 | ||||||
| 413,583 | Zumiez, Inc.* | 10,930,999 | ||||||
| 24,698,003 | ||||||||
| Apparel, Accessories & Luxury Goods 0.7% | ||||||||
| 4,931,685 | Ports Design Ltd. (China) | 11,379,275 | ||||||
| Application Software 5.1% | ||||||||
| 136,645 | Concur Technologies, Inc.* | 7,576,965 | ||||||
| 77,807 | FactSet Research Systems, Inc. | 8,148,727 | ||||||
| 383,681 | RealPage, Inc.* | 10,639,474 | ||||||
| 934,088 | Ultimate Software Group, Inc.* | 54,877,670 | ||||||
| 81,242,836 | ||||||||
| Asset Management & Custody Banks 0.7% | ||||||||
| 289,855 | Waddell & Reed Financial, Inc., Class A | 11,771,012 | ||||||
| Automotive Retail 1.3% | ||||||||
| 358,833 | O’Reilly Automotive, Inc.* | 20,618,544 | ||||||
| Biotechnology 2.3% | ||||||||
| 1,794,615 | Exact Sciences Corp.* | 13,208,366 | ||||||
| 398,079 | Myriad Genetics, Inc.* | 8,021,292 | ||||||
| 645,125 | Sangamo BioSciences, Inc.* | 5,373,891 | ||||||
| 689,615 | Seattle Genetics, Inc.* | 10,737,306 | ||||||
| 37,340,855 | ||||||||
| Communications Equipment 1.1% | ||||||||
| 20,870 | Calix, Inc.* | 423,870 | ||||||
| 435,265 | Riverbed Technology, Inc.* | 16,387,727 | ||||||
| 16,811,597 | ||||||||
| Computer & Electronics Retail 0.5% | ||||||||
| 600,319 | hhgregg, Inc.* | 8,038,271 | ||||||
| Data Processing & Outsourced Services 1.9% | ||||||||
| 1,702,410 | Wirecard AG (Germany) | 30,596,794 | ||||||
| Distributors 0.9% | ||||||||
| 619,623 | LKQ Corp.* | 14,932,914 | ||||||
| Diversified Banks 2.5% | ||||||||
| 152,393 | HDFC Bank Ltd. ADR (India) | 25,897,666 | ||||||
| 2,011,570 | Yes Bank Ltd. (India) | 13,960,779 | ||||||
| 39,858,445 | ||||||||
| Diversified Support Services 2.9% | ||||||||
| 562,258 | Copart, Inc.* | 24,362,639 | ||||||
| 326,860 | Ritchie Bros. Auctioneers, Inc. (Canada) | 9,201,109 | ||||||
| 633,250 | STR Holdings, Inc.* | 12,145,735 | ||||||
| 45,709,483 | ||||||||
| Electrical Components & Equipment 1.3% | ||||||||
| 370,270 | Polypore International, Inc.* | 21,320,147 | ||||||
| Shares | Value | |||||||
| Environmental & Facilities Services 1.9% | ||||||||
| 2,232,175 | RPS Group plc (United Kingdom) | $ | 7,675,429 | |||||
| 939,995 | Tetra Tech, Inc.* | 23,208,477 | ||||||
| 30,883,906 | ||||||||
| Health Care Distributors 1.4% | ||||||||
| 281,887 | MWI Veterinary Supply, Inc.* | 22,742,643 | ||||||
| Health Care Equipment 1.5% | ||||||||
| 548,950 | Abaxis, Inc.* | 15,831,718 | ||||||
| 487,760 | DexCom, Inc.* | 7,570,035 | ||||||
| 24,690 | Zonare Medical Systems, Inc.* *** † | 247 | ||||||
| 23,402,000 | ||||||||
| Health Care Services 1.0% | ||||||||
| 253,359 | Bio-Reference Laboratories, Inc.* | 5,685,376 | ||||||
| 142,820 | MEDNAX, Inc.* | 9,513,240 | ||||||
| 362,782 | TargetRX, Inc.* *** † | 3,628 | ||||||
| 15,202,244 | ||||||||
| Health Care Technology 3.1% | ||||||||
| 381,327 | athenahealth, Inc.* | 17,209,288 | ||||||
| 491,830 | Computer Programs and Systems, Inc. | 31,614,832 | ||||||
| 48,824,120 | ||||||||
| Human Resource & Employment Services 0.9% | ||||||||
| 1,728,523 | Michael Page International plc (United Kingdom) | 14,289,105 | ||||||
| Industrial Machinery 1.8% | ||||||||
| 832,652 | AIA Engineering Ltd. (India) | 6,441,640 | ||||||
| 478,185 | Graco, Inc. | 21,752,636 | ||||||
| 28,194,276 | ||||||||
| Internet Retail 3.3% | ||||||||
| 308,429 | Blue Nile, Inc.* | 16,652,082 | ||||||
| 7,625 | MakeMyTrip Ltd.* (India) | 223,489 | ||||||
| 309,030 | Shutterfly, Inc.* | 16,180,811 | ||||||
| 460,002 | Start Today Co. Ltd. (Japan) | 7,137,101 | ||||||
| 843,388 | Yoox S.p.A.* (Italy) | 11,738,243 | ||||||
| 51,931,726 | ||||||||
| Internet Software & Services 5.2% | ||||||||
| 694,225 | DealerTrack Holdings, Inc.* | 15,939,406 | ||||||
| 1,880,647 | LoopNet, Inc.* | 26,611,155 | ||||||
| 663,972 | SciQuest, Inc.* | 9,640,874 | ||||||
| 592,676 | VistaPrint N.V.* | 30,759,884 | ||||||
| 82,951,319 | ||||||||
| Investment Banking & Brokerage 0.6% | ||||||||
| 500,955 | optionsXpress Holdings, Inc. | 9,172,486 | ||||||
| IT Consulting & Other Services 1.8% | ||||||||
| 342,032 | Cognizant Technology Solutions Corp., Class A* | 27,841,405 | ||||||
| Leisure Facilities 1.4% | ||||||||
| 582,915 | Life Time Fitness, Inc.* | 21,748,559 | ||||||
| Life Sciences Tools & Services 3.6% | ||||||||
| 408,905 | Divi’s Laboratories Ltd. (India) | 6,180,109 | ||||||
| 397,235 | Fluidigm Corp.* | 5,684,433 | ||||||
| 140,480 | Fluidigm Corp.* *** † | 1,659,142 | ||||||
| 921,343 | ICON plc ADR* (Ireland) | 19,891,795 | ||||||
| 342,988 | Techne Corp. | 24,557,941 | ||||||
| 57,973,420 | ||||||||
| Mortgage REITs 0.7% | ||||||||
| 677,807 | Redwood Trust, Inc. | 10,539,899 | ||||||
74
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| Oil & Gas Equipment & Services 3.4% | ||||||||
| 334,085 | Dril-Quip, Inc.* | $ | 26,402,737 | |||||
| 903,720 | Pason Systems, Inc. (Canada) | 14,683,644 | ||||||
| 455,035 | TGS-NOPEC Geophysical Co. ASA (Norway) | 12,233,963 | ||||||
| 53,320,344 | ||||||||
| Oil & Gas Exploration & Production 2.6% | ||||||||
| 423,425 | GMX Resources, Inc.* | 2,612,532 | ||||||
| 846,815 | Premier Oil plc* (United Kingdom) | 27,156,916 | ||||||
| 784,115 | Transglobe Energy Corp.* (Canada) | 11,918,548 | ||||||
| 41,687,996 | ||||||||
| Oil & Gas Refining & Marketing 0.1% | ||||||||
| 28,975 | Amyris, Inc.* | 826,946 | ||||||
| Other Diversified Financial Services 0.2% | ||||||||
| 2,661,038 | Count Financial Ltd. (Australia) | 3,393,527 | ||||||
| Packaged Foods & Meats 2.0% | ||||||||
| 411,088 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 20,740,148 | ||||||
| 3,706,500 | Hsu Fu Chi International Ltd. (China) | 11,028,624 | ||||||
| 31,768,772 | ||||||||
| Personal Products 0.7% | ||||||||
| 582,400 | Colgate-Palmolive India Ltd. (India) | 10,682,884 | ||||||
| Pharmaceuticals 0.0% | ||||||||
| 32,312 | ISTA Pharmaceuticals, Inc.* | 327,321 | ||||||
| Research & Consulting Services 3.4% | ||||||||
| 371,513 | CRA International, Inc.* | 10,710,720 | ||||||
| 1,449 | Exponent, Inc.* | 64,640 | ||||||
| 1,300,534 | Resources Connection, Inc.‡ | 25,217,354 | ||||||
| 621,999 | Stantec, Inc.* (Canada) | 18,666,190 | ||||||
| 54,658,904 | ||||||||
| Restaurants 2.4% | ||||||||
| 779,498 | Peet’s Coffee & Tea, Inc.* ‡‡ | 37,486,059 | ||||||
| Semiconductors 9.5% | ||||||||
| 538,860 | Hittite Microwave Corp.* | 34,363,102 | ||||||
| 553,580 | NetLogic Microsystems, Inc.* | 23,261,431 | ||||||
| 1,601,763 | O2Micro International Ltd. ADR* (China) | 12,173,399 | ||||||
| 1,485,897 | Power Integrations, Inc. | 56,954,432 | ||||||
| 539,547 | Silicon Laboratories, Inc.* | 23,313,826 | ||||||
| 150,066,190 | ||||||||
| Specialized Finance 1.9% | ||||||||
| 806,325 | MSCI, Inc., Class A* | 29,688,886 | ||||||
| Specialty Stores 2.7% | ||||||||
| 446,536 | Big 5 Sporting Goods Corp. | 5,322,709 | ||||||
| 1,065,831 | Hibbett Sports, Inc.* | 38,167,408 | ||||||
| 43,490,117 | ||||||||
| Systems Software 2.2% | ||||||||
| 750,447 | NetSuite, Inc.* | 21,822,999 | ||||||
| 486,846 | Sourcefire, Inc.* | 13,393,133 | ||||||
| 35,216,132 | ||||||||
| Trading Companies & Distributors 2.4% | ||||||||
| 547,600 | MSC Industrial Direct Co., Inc., Class A | 37,494,172 | ||||||
| Trucking 2.9% | ||||||||
| 120,800 | J.B. Hunt Transport Services, Inc. | 5,486,736 | ||||||
| 2,096,390 | Knight Transportation, Inc.‡ | 40,355,507 | ||||||
| 45,842,243 | ||||||||
| Total Common Stocks (cost $950,163,961) | 1,446,237,911 | |||||||
| Shares | Value | |||||||
| PREFERRED STOCKS 0.5% | ||||||||
| Biotechnology 0.1% | ||||||||
| 677,966 | Nanosys, Inc., Series D Pfd.* *** † | $ | 776,271 | |||||
| 161,519 | Nanosys, Inc., Series E Pfd.* *** † | 184,939 | ||||||
| 961,210 | ||||||||
| Internet Software & Services 0.4% | ||||||||
| 63,097 | Angies List, Series C Pfd.* *** † | 4,472,454 | ||||||
| 42,324 | Angies List, Series D Pfd.* *** † | 3,000,019 | ||||||
| 7,472,473 | ||||||||
| Total Preferred Stocks (cost $9,439,241) | 8,433,683 | |||||||
| LIMITED PARTNERSHIP INTEREST 0.4% | ||||||||
| Asset Management & Custody Banks 0.4% | ||||||||
| Greenspring Global Partners II-B, L.P.*** † | 4,466,422 | |||||||
| Greenspring Global Partners III-B, L.P.*** † | 1,280,595 | |||||||
| 5,747,017 | ||||||||
| Total Limited Partnership Interest (cost $5,618,853) | 5,747,017 | |||||||
| WARRANTS 0.0% | ||||||||
| Health Care Equipment 0.0% | ||||||||
| 243,033 | Zonare Medical Systems, Inc., expiring 6/30/11* *** † | — | ||||||
| Total Warrants (cost $0) | — | |||||||
| RIGHTS 0.0% | ||||||||
| Life Sciences Tools & Services 0.0% | ||||||||
| 208,525 | Valera Pharmaceuticals, Inc. Ureteral Stent CSR* *** † | — | ||||||
| Pharmaceuticals 0.0% | ||||||||
| 208,525 | Valera Pharmaceuticals, Inc. VP003 (Octreotide Implant) CSR* *** † | — | ||||||
| Total Rights (cost $406,537) | — | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 8.5% | ||||||||
| Repurchase Agreement 8.5% | ||||||||
| $135,131,236 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $136,390,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $137,835,806; repurchase proceeds: $135,131,274‡ (cost $135,131,236) | $ | 135,131,236 | |||||
| Total Short-Term Investments (cost $135,131,236) | 135,131,236 | |||||||
| Total Investments (cost $1,100,759,828) 100.5% | 1,595,549,847 | |||||||
| Liabilities less Other Assets (0.5%) | (7,889,176 | ) | ||||||
| NET ASSETS 100.0% | $ | 1,587,660,671 | ||||||
75
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| WASATCH SMALL CAP GROWTH FUND (WAAEX) — Schedule of Investments (continued) | ||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
‡All or a portion of this security has been designated as collateral for purchase commitments (see Note 12).
‡‡Affiliated company (see Note 10).
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. | ||||
At March 31, 2011, Wasatch Small Cap Growth Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Australia | 0.2 | |||
Canada | 3.7 | |||
China | 2.4 | |||
Germany | 2.1 | |||
India | 5.7 | |||
Ireland | 1.4 | |||
Italy | 0.8 | |||
Japan | 0.5 | |||
Norway | 0.8 | |||
Singapore | 0.3 | |||
United Arab Emirates | 1.2 | |||
United Kingdom | 3.4 | |||
United States | 77.5 | |||
TOTAL | 100.0 | % | ||
76
Table of Contents
| WASATCH SMALL CAP VALUE FUND (WMCVX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 92.2% | ||||||||
| Aerospace & Defense 2.0% | ||||||||
| 106,924 | HEICO Corp., Class A | $ | 4,809,442 | |||||
| Air Freight & Logistics 0.6% | ||||||||
| 954,131 | Goodpack Ltd. (Singapore) | 1,468,709 | ||||||
| Airlines 1.8% | ||||||||
| 96,528 | Allegiant Travel Co. | 4,228,892 | ||||||
| Apparel Retail 2.9% | ||||||||
| 112,289 | Body Central Corp.* | 2,608,473 | ||||||
| 289,735 | Chico’s FAS, Inc. | 4,317,052 | ||||||
| 6,925,525 | ||||||||
| Apparel, Accessories & Luxury Goods 1.4% | ||||||||
| 44,135 | Maidenform Brands, Inc.* | 1,260,937 | ||||||
| 112,255 | Volcom, Inc. | 2,080,085 | ||||||
| 3,341,022 | ||||||||
| Application Software 0.9% | ||||||||
| 95,706 | Ebix, Inc.* | 2,263,447 | ||||||
| Asset Management & Custody Banks 0.9% | ||||||||
| 91,390 | SEI Investments Co. | 2,182,393 | ||||||
| 555 | Solar Capital Ltd. | 13,254 | ||||||
| 2,195,647 | ||||||||
| Automotive Retail 0.9% | ||||||||
| 65,737 | Monro Muffler Brake, Inc. | 2,168,006 | ||||||
| Communications Equipment 3.1% | ||||||||
| 54,410 | Finisar Corp.* | 1,338,486 | ||||||
| 118,935 | Polycom, Inc.* | 6,166,780 | ||||||
| 7,505,266 | ||||||||
| Computer Storage & Peripherals 1.3% | ||||||||
| 244,565 | Intevac, Inc.* | 3,039,943 | ||||||
| Construction & Engineering 1.1% | ||||||||
| 115,040 | MYR Group, Inc.* | 2,751,757 | ||||||
| Consumer Finance 3.2% | ||||||||
| 530,835 | Advance America Cash Advance Centers, Inc. | 2,813,425 | ||||||
| 235,077 | Dollar Financial Corp.* | 4,877,848 | ||||||
| 7,691,273 | ||||||||
| Data Processing & Outsourced Services 1.2% | ||||||||
| 115,010 | NeuStar, Inc., Class A* | 2,941,956 | ||||||
| Diversified Banks 1.6% | ||||||||
| 862,645 | Karnataka Bank Ltd. (India) | 2,083,347 | ||||||
| 3,656,000 | South Indian Bank Ltd. (India) | 1,877,395 | ||||||
| 3,960,742 | ||||||||
| Diversified Metals & Mining 0.4% | ||||||||
| 42,603 | Globe Specialty Metals, Inc. | 969,644 | ||||||
| Diversified Support Services 3.8% | ||||||||
| 186,895 | Copart, Inc.* | 8,098,160 | ||||||
| 61,270 | STR Holdings, Inc.* | 1,175,159 | ||||||
| 9,273,319 | ||||||||
| Education Services 1.0% | ||||||||
| 142,795 | Bridgepoint Education, Inc.* | 2,441,795 | ||||||
| Electrical Components & Equipment 1.1% | ||||||||
| 124,528 | Harbin Electric, Inc.* | 2,576,484 | ||||||
| Shares | Value | |||||||
| Electronic Manufacturing Services 3.3% | ||||||||
| 91,830 | Fabrinet* | $ | 1,851,293 | |||||
| 335,690 | TTM Technologies, Inc.* | 6,096,130 | ||||||
| 7,947,423 | ||||||||
| Footwear 1.0% | ||||||||
| 118,410 | Skechers U.S.A., Inc., Class A* | 2,432,141 | ||||||
| General Merchandise Stores 1.3% | ||||||||
| 165,475 | 99 Cents Only Stores* | 3,243,310 | ||||||
| Health Care Facilities 1.0% | ||||||||
| 93,574 | Emeritus Corp.* | 2,382,394 | ||||||
| Health Care Services 5.9% | ||||||||
| 326,858 | Addus HomeCare Corp.* | 1,637,559 | ||||||
| 142,974 | CorVel Corp.* | 7,603,357 | ||||||
| 76,370 | MEDNAX, Inc.* | 5,087,006 | ||||||
| 14,327,922 | ||||||||
| Health Care Supplies 0.6% | ||||||||
| 24,350 | Sartorius Stedim Biotech (France) | 1,427,194 | ||||||
| Health Care Technology 0.6% | ||||||||
| 98,475 | Vital Images, Inc.* | 1,330,397 | ||||||
| Heavy Electrical Equipment 1.8% | ||||||||
| 99,520 | General Cable Corp.* | 4,309,216 | ||||||
| Internet Software & Services 1.6% | ||||||||
| 75,580 | VistaPrint N.V.* | 3,922,602 | ||||||
| Investment Banking & Brokerage 0.6% | ||||||||
| 106,696 | FXCM, Inc.* | 1,390,249 | ||||||
| IT Consulting & Other Services 1.0% | ||||||||
| 1,733,690 | CSG Ltd. (Australia) | 2,516,486 | ||||||
| Life Sciences Tools & Services 2.0% | ||||||||
| 224,752 | ICON plc ADR* (Ireland) | 4,852,396 | ||||||
| Mortgage REITs 2.1% | ||||||||
| 338,855 | MFA Financial, Inc. | 2,778,611 | ||||||
| 145,755 | Redwood Trust, Inc. | 2,266,490 | ||||||
| 5,045,101 | ||||||||
| Office Services & Supplies 1.4% | ||||||||
| 328,565 | American Reprographics Co.* | 3,400,648 | ||||||
| Oil & Gas Equipment & Services 0.7% | ||||||||
| 58,525 | TGS-NOPEC Geophysical Co. ASA (Norway) | 1,573,489 | ||||||
| Oil & Gas Exploration & Production 4.1% | ||||||||
| 947,510 | Afren plc* (United Kingdom) | 2,482,399 | ||||||
| 62,140 | Northern Oil and Gas, Inc.* | 1,659,138 | ||||||
| 132,510 | Petrohawk Energy Corp.* | 3,251,795 | ||||||
| 50,655 | Ultra Petroleum Corp.* | 2,494,759 | ||||||
| 9,888,091 | ||||||||
| Personal Products 3.0% | ||||||||
| 96,230 | Atrium Innovations, Inc.* (Canada) | 1,640,978 | ||||||
| 68,035 | Herbalife Ltd. | 5,535,327 | ||||||
| 7,176,305 | ||||||||
| Property & Casualty Insurance 0.9% | ||||||||
| 17,510 | SeaBright Holdings, Inc. | 179,477 | ||||||
| 85,460 | Tower Group, Inc. | 2,053,604 | ||||||
| 2,233,081 | ||||||||
77
Table of Contents
| WASATCH SMALL CAP VALUE FUND (WMCVX) — Schedule of Investments (continued) | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| Regional Banks 3.0% | ||||||||
| 2,630,000 | City Union Bank Ltd. (India) | $ | 2,647,988 | |||||
| 198,452 | Nara Bancorp, Inc.* | 1,909,108 | ||||||
| 63,330 | Prosperity Bancshares, Inc. | 2,708,624 | ||||||
| 7,265,720 | ||||||||
| Research & Consulting Services 6.8% | ||||||||
| 111,387 | Corporate Executive Board Co. (The) | 4,496,693 | ||||||
| 97,510 | CRA International, Inc.* | 2,811,213 | ||||||
| 158,635 | Huron Consulting Group, Inc.* | 4,392,603 | ||||||
| 241,640 | Resources Connection, Inc. | 4,685,400 | ||||||
| 16,385,909 | ||||||||
| Semiconductor Equipment 0.6% | ||||||||
| 165,581 | BCD Semiconductor Manufacturing Ltd. ADR* (China) | 1,435,587 | ||||||
| Semiconductors 7.0% | ||||||||
| 159,743 | Micrel, Inc. | 2,153,336 | ||||||
| 320,065 | O2Micro International Ltd. ADR* (China) | 2,432,494 | ||||||
| 360,037 | Pericom Semiconductor Corp.* | 3,733,584 | ||||||
| 76,625 | Power Integrations, Inc. | 2,937,036 | ||||||
| 135,840 | Standard Microsystems Corp.* | 3,349,814 | ||||||
| 98,017 | Supertex, Inc.* | 2,183,819 | ||||||
| 16,790,083 | ||||||||
| Specialized Finance 1.4% | ||||||||
| 40,715 | Portfolio Recovery Associates, Inc.* | 3,466,068 | ||||||
| Specialty Stores 0.7% | ||||||||
| 148,215 | Big 5 Sporting Goods Corp. | 1,766,723 | ||||||
| Steel 1.2% | ||||||||
| 25,677 | Haynes International, Inc. | 1,423,789 | ||||||
| 501,000 | Ratnamani Metals & Tubes Ltd. (India) | 1,427,898 | ||||||
| 2,851,687 | ||||||||
| Thrifts & Mortgage Finance 1.4% | ||||||||
| 266,055 | Oritani Financial Corp. | 3,373,577 | ||||||
| Trading Companies & Distributors 4.4% | ||||||||
| 127,925 | Beacon Roofing Supply, Inc.* | 2,618,625 | ||||||
| 176,465 | Interline Brands, Inc.* | 3,599,886 | ||||||
| 66,085 | MSC Industrial Direct Co., Inc., Class A | 4,524,840 | ||||||
| 10,743,351 | ||||||||
| Trucking 3.6% | ||||||||
| 126,614 | Marten Transport, Ltd. | 2,823,492 | ||||||
| 117,149 | Old Dominion Freight Line, Inc.* | 4,110,759 | ||||||
| 132,866 | Vitran Corp., Inc.* (Canada) | 1,872,082 | ||||||
| 8,806,333 | ||||||||
| Total Common Stocks (cost $158,002,087) | 222,836,352 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 6.4% | ||||||||
| Repurchase Agreement 6.4% | ||||||||
| $15,433,943 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $15,580,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $15,745,156; repurchase proceeds: $15,433,947 (cost $15,433,943) | $ | 15,433,943 | |||||
| Total Short-Term Investments (cost $15,433,943) | 15,433,943 | |||||||
| Total Investments (cost $173,436,030) 98.6% | 238,270,295 | |||||||
| Other Assets less Liabilities 1.4% | 3,288,565 | |||||||
| NET ASSETS 100.0% | $ | 241,558,860 | ||||||
*Non-income producing.
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
|
| |||||||
At March 31, 2011, Wasatch Small Cap Value Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Australia | 1.1 | |||
Canada | 1.6 | |||
China | 1.7 | |||
France | 0.6 | |||
India | 3.6 | |||
Ireland | 2.2 | |||
Norway | 0.7 | |||
Singapore | 0.7 | |||
United Kingdom | 1.1 | |||
United States | 86.7 | |||
TOTAL | 100.0 | % | ||
78
Table of Contents
| WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 89.1% | ||||||||
| Asset Management & Custody Banks 11.4% | ||||||||
| 46,106 | Ares Capital Corp. | $ | 779,192 | |||||
| 3,710 | BlackRock, Inc. | 745,747 | ||||||
| 18,415 | SEI Investments Co. | 439,750 | ||||||
| 32,797 | Solar Capital Ltd. | 783,192 | ||||||
| 30,000 | Solar Senior Capital Ltd.* | 558,900 | ||||||
| 3,306,781 | ||||||||
| Computer & Electronics Retail 1.7% | ||||||||
| 16,800 | Best Buy Co., Inc. | 482,496 | ||||||
| Consumer Finance 2.6% | ||||||||
| 14,800 | Capital One Financial Corp. | 769,008 | ||||||
| Data Processing & Outsourced Services 9.4% | ||||||||
| 4,000 | MasterCard, Inc., Class A | 1,006,880 | ||||||
| 3,060 | Paychex, Inc. | 95,962 | ||||||
| 13,495 | Visa, Inc., Class A | 993,502 | ||||||
| 34,900 | Wirecard AG (Germany) | 627,245 | ||||||
| 2,723,589 | ||||||||
| Distributors 0.3% | ||||||||
| 3,800 | Pool Corp. | 91,618 | ||||||
| Diversified Banks 0.4% | ||||||||
| 90,056 | Bank of N.T. Butterfield & Son Ltd. (The)* (Bermuda) | 113,471 | ||||||
| Diversified REITs 0.8% | ||||||||
| 177,857 | Star Asia Finance Ltd.* † | 231,214 | ||||||
| Electronic Equipment & Instruments 0.5% | ||||||||
| 4,725 | National Instruments Corp. | 154,838 | ||||||
| Fertilizers & Agricultural Chemicals 0.5% | ||||||||
| 1,850 | Monsanto Co. | 133,681 | ||||||
| Health Care Services 0.3% | ||||||||
| 1,535 | Chemed Corp. | 102,246 | ||||||
| Hypermarkets & Super Centers 1.5% | ||||||||
| 8,185 | Wal-Mart Stores, Inc. | 426,029 | ||||||
| Investment Banking & Brokerage 2.0% | ||||||||
| 3,650 | Goldman Sachs Group, Inc. (The) | 578,416 | ||||||
| IT Consulting & Other Services 1.3% | ||||||||
| 2,375 | International Business Machines Corp. | 387,291 | ||||||
| Mortgage REITs 17.0% | ||||||||
| 20,000 | American Capital Agency Corp. | 582,800 | ||||||
| 74,500 | Capstead Mortgage Corp. | 952,110 | ||||||
| 76,700 | MFA Financial, Inc. | 628,940 | ||||||
| 119,205 | NorthStar Realty Finance Corp. | 637,747 | ||||||
| 70,700 | Redwood Trust, Inc. | 1,099,385 | ||||||
| 100,350 | Two Harbors Investment Corp. | 1,050,664 | ||||||
| 4,951,646 | ||||||||
| Multi-Line Insurance 2.0% | ||||||||
| 13,500 | Loews Corp. | 581,715 | ||||||
| Oil & Gas Exploration & Production 2.3% | ||||||||
| 13,400 | Ultra Petroleum Corp.* | 659,950 | ||||||
| Personal Products 4.4% | ||||||||
| 15,590 | Herbalife Ltd. | 1,268,402 | ||||||
| Shares | Value | |||||||
| Pharmaceuticals 9.5% | ||||||||
| 5,980 | Forest Laboratories, Inc.* | $ | 193,154 | |||||
| 24,365 | Teva Pharmaceutical Industries Ltd. ADR (Israel) | 1,222,392 | ||||||
| 26,767 | Valeant Pharmaceuticals International, Inc. (Canada) | 1,333,264 | ||||||
| 2,748,810 | ||||||||
| Railroads 1.9% | ||||||||
| 7,410 | Canadian National Railway Co. (Canada) | 557,751 | ||||||
| Regional Banks 2.1% | ||||||||
| 88,700 | CapitalSource, Inc. | 624,448 | ||||||
| Restaurants 1.4% | ||||||||
| 5,430 | McDonald’s Corp. | 413,169 | ||||||
| Semiconductors 10.8% | ||||||||
| 13,645 | Altera Corp. | 600,653 | ||||||
| 24,130 | Intel Corp. | 486,702 | ||||||
| 12,570 | Linear Technology Corp. | 422,729 | ||||||
| 14,515 | Microchip Technology, Inc. | 551,715 | ||||||
| 33,365 | Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan) | 406,386 | ||||||
| 20,700 | Xilinx, Inc. | 678,960 | ||||||
| 3,147,145 | ||||||||
| Specialized Finance 0.6% | ||||||||
| 31,500 | Power Finance Corp. Ltd. (India) | 177,225 | ||||||
| Systems Software 1.6% | ||||||||
| 18,490 | Microsoft Corp. | 468,906 | ||||||
| Trading Companies & Distributors 1.0% | ||||||||
| 2,030 | W.W. Grainger, Inc. | 279,490 | ||||||
| Wireless Telecommunication Services 1.8% | ||||||||
| 8,845 | America Movil S.A.B. de C.V., Series L, ADR (Mexico) | 513,895 | ||||||
| Total Common Stocks (cost $22,220,432) | 25,893,230 | |||||||
| PREFERRED STOCKS 1.1% | ||||||||
| Diversified Banks 1.1% | ||||||||
| 3,803 | Bank of N.T. Butterfield & Son Ltd. (The) Pfd.* *** (Bermuda) | 4,792 | ||||||
| 12,700 | Itau Unibanco Holding S.A., Pfd. ADR (Brazil) | 305,435 | ||||||
| 310,227 | ||||||||
| Total Preferred Stocks (cost $291,304) | 310,227 | |||||||
| LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST 0.6% | ||||||||
| Asset Management & Custody Banks 0.6% | ||||||||
| 77,279 | Star Asia SPV, LLC* *** † | 190,879 | ||||||
| Total Limited Liability Company Membership Interest (cost $543,869) | 190,879 | |||||||
| LIMITED PARTNERSHIP INTEREST 2.2% | ||||||||
| Asset Management & Custody Banks 1.4% | ||||||||
| 24,100 | KKR & Co. L.P. | 395,481 | ||||||
79
Table of Contents
| WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments (continued) | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| Oil & Gas Storage & Transportation 0.8% | ||||||||
| 4,047 | Magellan Midstream Partners L.P. | $ | 242,253 | |||||
| Total Limited Partnership Interest (cost $365,818) | 637,734 | |||||||
| Principal Amount | Value | |||||||
| CORPORATE BONDS 0.0% | ||||||||
| Gold 0.0% | ||||||||
| $223,226 | Redcorp Ventures Ltd., 13.00%, 7/11/12, Series D*** † §§(Canada) | $ | 6,195 | |||||
| Total Corporate Bonds (cost $211,248) | 6,195 | |||||||
| Shares | Value | |||||||
| MUTUAL FUNDS 1.4% | ||||||||
| Asset Management & Custody Banks 1.4% | ||||||||
| 7,800 | iPath US Treasury 10-year Bear ETN | $ | 414,180 | |||||
| Total Mutual Funds (cost $418,351) | 414,180 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 5.0% | ||||||||
| Repurchase Agreement 5.0% | ||||||||
| $1,449,960 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $1,465,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $1,480,530; repurchase proceeds: $1,449,960 (cost $1,449,960) | $ | 1,449,960 | |||||
| Total Short-Term Investments (cost $1,449,960) | 1,449,960 | |||||||
| Total Investments (cost $25,500,982) 99.4% | 28,902,405 | |||||||
| Other Assets less Liabilities 0.6% | 163,784 | |||||||
| NET ASSETS 100.0% | $ | 29,066,189 | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
§§In default.
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch Strategic Income Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Bermuda | 0.4 | |||
Brazil | 1.1 | |||
Canada | 6.9 | |||
Germany | 2.3 | |||
India | 0.6 | |||
Israel | 4.5 | |||
Mexico | 1.9 | |||
Taiwan | 1.5 | |||
United States | 80.8 | |||
TOTAL | 100.0 | % | ||
80
Table of Contents
| WASATCH ULTRA GROWTH FUND (WAMCX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Shares | Value | |||||||
| COMMON STOCKS 95.5% | ||||||||
| Advertising 0.9% | ||||||||
| 81,996 | ReachLocal, Inc.* | $ | 1,639,920 | |||||
| Air Freight & Logistics 1.1% | ||||||||
| 3,579,717 | Aramex PJSC* (United Arab Emirates) | 1,754,405 | ||||||
| 16,323 | Blue Dart Express Ltd. (India) | 364,197 | ||||||
| 2,118,602 | ||||||||
| Aluminum 0.4% | ||||||||
| 1,164,000 | Midas Holdings Ltd. (Singapore) | 692,692 | ||||||
| Apparel, Accessories & Luxury Goods 0.5% | ||||||||
| 64,400 | V.I.P Industries Ltd. (India) | 956,000 | ||||||
| Application Software 8.4% | ||||||||
| 13,455 | Concur Technologies, Inc.* | 746,080 | ||||||
| 239,540 | Convio, Inc.* | 2,781,060 | ||||||
| 128,131 | Interactive Intelligence, Inc.* | 4,959,951 | ||||||
| 57,283 | RealPage, Inc.* | 1,588,458 | ||||||
| 46,535 | SolarWinds, Inc.* | 1,091,711 | ||||||
| 50,795 | Ultimate Software Group, Inc.* | 2,984,206 | ||||||
| 54,440 | VanceInfo Technologies, Inc. ADR* (China) | 1,709,960 | ||||||
| 15,861,426 | ||||||||
| Asset Management & Custody Banks 1.2% | ||||||||
| 64,962 | CETIP S.A. (Brazil) | 1,078,340 | ||||||
| 44,000,000 | CST Mining Group Ltd.* (Hong Kong) | 1,256,326 | ||||||
| 2,334,666 | ||||||||
| Auto Parts & Equipment 1.0% | ||||||||
| 85,250 | WABCO-TVS India Ltd. (India) | 1,926,943 | ||||||
| Biotechnology 3.2% | ||||||||
| 303,698 | Abcam plc (United Kingdom) | 1,841,408 | ||||||
| 250,325 | Exact Sciences Corp.* | 1,842,392 | ||||||
| 284,549 | NeurogesX, Inc.* | 1,152,424 | ||||||
| 105,440 | Orexigen Therapeutics, Inc.* | 296,286 | ||||||
| 109,695 | Sangamo BioSciences, Inc.* | 913,759 | ||||||
| 6,046,269 | ||||||||
| Communications Equipment 1.5% | ||||||||
| 7,025 | F5 Networks, Inc.* | 720,554 | ||||||
| 31,574 | Finisar Corp.* | 776,720 | ||||||
| 37,015 | Riverbed Technology, Inc.* | 1,393,615 | ||||||
| 2,890,889 | ||||||||
| Computer Storage & Peripherals 1.0% | ||||||||
| 144,665 | Intevac, Inc.* | 1,798,186 | ||||||
| Construction & Engineering 0.6% | ||||||||
| 50,400 | MYR Group, Inc.* | 1,205,568 | ||||||
| Construction Materials 1.0% | ||||||||
| 8,197,000 | PT Holcim Indonesia Tbk* (Indonesia) | 1,906,279 | ||||||
| Consumer Finance 3.3% | ||||||||
| 126,780 | Dollar Financial Corp.* | 2,630,685 | ||||||
| 37,565 | First Cash Financial Services, Inc.* | 1,450,009 | ||||||
| 117,000 | Mahindra & Mahindra Financial Services Ltd. (India) | 2,030,676 | ||||||
| 6,111,370 | ||||||||
| Data Processing & Outsourced Services 1.1% | ||||||||
| 113,100 | Wirecard AG (Germany) | 2,032,705 | ||||||
| Shares | Value | |||||||
| Diversified Banks 3.8% | ||||||||
| 39,900 | Axis Bank Ltd. (India) | $ | 1,257,975 | |||||
| 87,690 | Bank of Baroda (India) | 1,897,541 | ||||||
| 39,210 | HDFC Bank Ltd. (India) | 2,066,230 | ||||||
| 10,951 | HDFC Bank Ltd. ADR (India) | 1,861,013 | ||||||
| 7,082,759 | ||||||||
| Diversified Support Services 2.7% | ||||||||
| 66,580 | Copart, Inc.* | 2,884,912 | ||||||
| 116,080 | STR Holdings, Inc.* | 2,226,414 | ||||||
| 5,111,326 | ||||||||
| Electronic Manufacturing Services 3.3% | ||||||||
| 65,400 | Fabrinet* | 1,318,464 | ||||||
| 50,883 | IPG Photonics Corp.* | 2,934,931 | ||||||
| 105,300 | TTM Technologies, Inc.* | 1,912,248 | ||||||
| 6,165,643 | ||||||||
| Environmental & Facilities Services 1.1% | ||||||||
| 144,759 | Heritage-Crystal Clean, Inc.* | 2,062,816 | ||||||
| General Merchandise Stores 3.2% | ||||||||
| 53,822 | Dollar Tree, Inc.* | 2,988,197 | ||||||
| 168,978 | Gordmans Stores, Inc.* | 2,995,980 | ||||||
| 5,984,177 | ||||||||
| Health Care Equipment 8.8% | ||||||||
| 80,974 | Abaxis, Inc.* | 2,335,290 | ||||||
| 365,033 | AtriCure, Inc.* | 4,154,075 | ||||||
| 243,600 | Cardica, Inc.* †† | 867,216 | ||||||
| 330,000 | Cardica, Inc. PIPE* *** † | 1,174,800 | ||||||
| 128,076 | Cardiovascular Systems, Inc.* | 1,387,063 | ||||||
| 28,445 | DexCom, Inc.* | 441,466 | ||||||
| 43,455 | DiaSorin S.p.A. (Italy) | 1,916,245 | ||||||
| 90,199 | NuVasive, Inc.* | 2,283,839 | ||||||
| 105,810 | Synovis Life Technologies, Inc.* | 2,029,436 | ||||||
| 16,460 | Zonare Medical Systems, Inc.* *** † | 165 | ||||||
| 16,589,595 | ||||||||
| Health Care Services 1.0% | ||||||||
| 83,115 | Bio-Reference Laboratories, Inc.* | 1,865,101 | ||||||
| 108,917 | TargetRX, Inc.* *** † | 1,089 | ||||||
| 1,866,190 | ||||||||
| Health Care Technology 3.7% | ||||||||
| 21,550 | athenahealth, Inc.* | 972,552 | ||||||
| 75,801 | Computer Programs and Systems, Inc. | 4,872,488 | ||||||
| 86,200 | Vital Images, Inc.* | 1,164,562 | ||||||
| 7,009,602 | ||||||||
| Industrial Machinery 0.7% | ||||||||
| 159,500 | AIA Engineering Ltd. (India) | 1,233,939 | ||||||
| Internet Retail 1.8% | ||||||||
| 10,955 | MakeMyTrip Ltd.* (India) | 321,091 | ||||||
| 55,400 | Start Today Co. Ltd. (Japan) | 859,551 | ||||||
| 159,870 | Yoox S.p.A.* (Italy) | 2,225,065 | ||||||
| 3,405,707 | ||||||||
| Internet Software & Services 6.0% | ||||||||
| 159,684 | Envestnet, Inc.* | 2,146,153 | ||||||
| 124,091 | SciQuest, Inc.* | 1,801,801 | ||||||
| 161,615 | SPS Commerce, Inc.* | 2,506,649 | ||||||
| 235,787 | TechTarget, Inc.* | 2,100,862 | ||||||
| 52,135 | VistaPrint N.V.* | 2,705,807 | ||||||
| 91,388 | Xtera Communications, Inc.* *** † | 914 | ||||||
| 11,262,186 | ||||||||
81
Table of Contents
| WASATCH ULTRA GROWTH FUND (WAMCX) — Schedule of Investments (continued) | ||
| Shares | Value | |||||||
| IT Consulting & Other Services 4.3% | ||||||||
| 85,066 | Cognizant Technology Solutions Corp., Class A* | $ | 6,924,372 | |||||
| 66,759 | hiSoft Technology International Ltd. ADR* (China) | 1,250,396 | ||||||
| 8,174,768 | ||||||||
| Life Sciences Tools & Services 1.0% | ||||||||
| 39,940 | Divi’s Laboratories Ltd. (India) | 603,645 | ||||||
| 55,138 | ICON plc ADR* (Ireland) | 1,190,430 | ||||||
| 1,794,075 | ||||||||
| Oil & Gas Equipment & Services 1.1% | ||||||||
| 25,415 | Dril-Quip, Inc.* | 2,008,547 | ||||||
| Oil & Gas Exploration & Production 1.9% | ||||||||
| 477,000 | Afren plc* (United Kingdom) | 1,249,702 | ||||||
| 72,015 | Petrohawk Energy Corp.* | 1,767,248 | ||||||
| 85,800 | Selan Exploration Technology Ltd. (India) | 640,686 | ||||||
| 3,657,636 | ||||||||
| Packaged Foods & Meats 1.4% | ||||||||
| 50,790 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 2,562,449 | ||||||
| Personal Products 0.0% | ||||||||
| 50,403 | Ophthonix, Inc.* *** † | 504 | ||||||
| Regional Banks 0.3% | ||||||||
| 642,935 | City Union Bank Ltd. (India) | 647,332 | ||||||
| Research & Consulting Services 2.0% | ||||||||
| 137,081 | eClerx Services Ltd. (India) | 1,982,672 | ||||||
| 95,260 | Resources Connection, Inc. | 1,847,091 | ||||||
| 3,829,763 | ||||||||
| Restaurants 1.1% | ||||||||
| 41,230 | Peet’s Coffee & Tea, Inc.* | 1,982,751 | ||||||
| Semiconductors 12.0% | ||||||||
| 68,238 | Hittite Microwave Corp.* | 4,351,537 | ||||||
| 75,245 | NetLogic Microsystems, Inc.* | 3,161,795 | ||||||
| 34,690 | NVE Corp. | 1,954,435 | ||||||
| 280,395 | O2Micro International Ltd. ADR* (China) | 2,131,002 | ||||||
| 163,530 | Power Integrations, Inc.†† | 6,268,105 | ||||||
| 108,235 | Silicon Laboratories, Inc.* | 4,676,834 | ||||||
| 22,543,708 | ||||||||
| Specialized Finance 3.9% | ||||||||
| 9,835 | Crisil Ltd. (India) | 1,411,459 | ||||||
| 47,815 | ICRA Ltd. (India) | 1,152,621 | ||||||
| 129,055 | MSCI, Inc., Class A* | 4,751,805 | ||||||
| 7,315,885 | ||||||||
| Specialty Stores 1.1% | ||||||||
| 58,245 | Hibbett Sports, Inc.* | 2,085,753 | ||||||
| Systems Software 4.1% | ||||||||
| 74,114 | DemandTec, Inc.* | 975,340 | ||||||
| 66,442 | NetSuite, Inc.* | 1,932,134 | ||||||
| 74,315 | OPNET Technologies, Inc. | 2,897,542 | ||||||
| 69,465 | Sourcefire, Inc.* | 1,910,982 | ||||||
| 7,715,998 | ||||||||
| Total Common Stocks (cost $124,572,134) | 179,614,624 | |||||||
| Shares | Value | |||||||
| PREFERRED STOCKS 0.7% | ||||||||
| Biotechnology 0.1% | ||||||||
| 169,492 | Nanosys, Inc., Series D Pfd.* *** † | $ | 194,068 | |||||
| 40,380 | Nanosys, Inc., Series E Pfd.* *** † | 46,235 | ||||||
| 240,303 | ||||||||
| Health Care Technology 0.6% | ||||||||
| 253,064 | Data Sciences International, Inc., Series B Pfd.* *** † | 807,502 | ||||||
| 243,902 | �� | TherOx, Inc., Series I Pfd.* *** † | 207,317 | |||||
| 1,014,819 | ||||||||
| Total Preferred Stocks (cost $2,021,237) | 1,255,122 | |||||||
| LIMITED PARTNERSHIP INTEREST 2.8% | ||||||||
| Asset Management & Custody Banks 2.8% | ||||||||
| Greenspring Global Partners II-B, L.P.*** † | 4,019,774 | |||||||
| Greenspring Global Partners III-B, L.P.*** † | 1,280,595 | |||||||
| 5,300,369 | ||||||||
| Total Limited Partnership Interest (cost $5,184,467) | 5,300,369 | |||||||
| WARRANTS 0.2% | ||||||||
| Health Care Equipment 0.2% | ||||||||
| 165,000 | Cardica, Inc., expiring 9/29/14* *** † | 348,150 | ||||||
| 162,021 | Zonare Medical Systems, Inc., expiring 6/30/11* *** † | — | ||||||
| 348,150 | ||||||||
| Total Warrants (cost $20,625) | 348,150 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 0.8% | ||||||||
| Repurchase Agreement 0.8% | ||||||||
| $1,470,331 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $1,485,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $1,500,742; repurchase proceeds: $1,470,332†† (cost $1,470,331) | $ | 1,470,331 | |||||
| Total Short-Term Investments (cost $1,470,331) | 1,470,331 | |||||||
| Total Investments (cost $133,268,794) 100.0% | 187,988,596 | |||||||
| Liabilities less Other Assets (<0.1%) | (4,260 | ) | ||||||
| NET ASSETS 100.0% | $ | 187,984,336 | ||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
††All or a portion of this security has been designated as collateral for purchase commitments (see Note 12).
ADR American Depositary Receipt.
PIPE Private Investment in a Public Equity.
See Notes to Financial Statements. |
| |||||||
82
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
At March 31, 2011, Wasatch Ultra Growth Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Brazil | 0.6 | |||
China | 2.7 | |||
Germany | 1.1 | |||
Hong Kong | 0.7 | |||
India | 12.3 | |||
Indonesia | 1.0 | |||
Ireland | 0.6 | |||
Italy | 2.2 | |||
Japan | 0.5 | |||
Singapore | 0.4 | |||
United Arab Emirates | 0.9 | |||
United Kingdom | 1.7 | |||
United States | 75.3 | |||
TOTAL | 100.0 | % | ||
83
Table of Contents
| WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments | ||
| Principal Amount | Value | |||||||
| ASSET BACKED SECURITIES 2.4% | ||||||||
| $1,500,000 | Citibank Credit Card Issuance Trust, 5.65%, 9/20/19, Series 2007-A8, Class A8 | $ | 1,687,554 | |||||
| 600,000 | Citibank Omni Master Trust, 4.90%, 11/15/18, Series 2009-A17, Class A17† | 641,681 | ||||||
| 850,000 | World Financial Network Credit Card Master Note Trust, 4.60%, 9/15/15, Series 2009-A, Class A | 867,302 | ||||||
| Total Asset Backed Securities (cost $3,305,762) | 3,196,537 | |||||||
| COLLATERALIZED MORTGAGE OBLIGATIONS 23.2% | ||||||||
| 40,913 | ABN Amro Mortgage Corp., 5.50%, 2/25/18, Series 2003-13, Class A2 | 40,897 | ||||||
| 250,000 | Banc of America Commercial Mortgage, Inc., 5.071%, 11/10/42, Series 2005-1, Class A4††† | 257,386 | ||||||
| 33,935 | Banc of America Mortgage Securities, Inc., 3.115%, 2/25/33, Series 2003-A, Class 3A1††† | 33,631 | ||||||
| 329,890 | Bear Stearns Commercial Mortgage Securities, 4.735%, 9/11/42, Series 2005-PWR9, Class A2 | 330,654 | ||||||
| 239,337 | Countrywide Home Loans, 4.50%, 8/25/19, Series 2004-J7, Class 2A1 | 244,021 | ||||||
| 24,851 | Credit Suisse First Boston Mortgage Securities Corp., 4.302%, 7/15/36, Series 2004-C3, Class A3 | 24,839 | ||||||
| 67,037 | Federal Home Loan Mortgage Corp., 2.29%, 11/1/35, Series 1M0010††† | 69,828 | ||||||
| 129,582 | Federal Home Loan Mortgage Corp., 2.513%, 5/1/31, Series 847292††† | 136,709 | ||||||
| 100,715 | Federal Home Loan Mortgage Corp., 2.572%, 12/1/32, Series 847527††† | 105,718 | ||||||
| 36,329 | Federal Home Loan Mortgage Corp., 2.783%, 8/1/33, Series 847281††† | 38,157 | ||||||
| 492,919 | Federal Home Loan Mortgage Corp., 3.996%, 1/1/25, Series 775629††† | 497,460 | ||||||
| 334,051 | Federal Home Loan Mortgage Corp., 4.15%, 5/1/25, Series 775617††† | 346,031 | ||||||
| 39,438 | Federal Home Loan Mortgage Corp., 4.50%, 7/15/15, Series 2864, Class CV | 39,634 | ||||||
| 586,359 | Federal Home Loan Mortgage Corp., 4.50%, 12/1/18, Series G11657 | 620,425 | ||||||
| 24,100 | Federal Home Loan Mortgage Corp., 5.00%, 5/15/16, Series R007, Class AL | 24,149 | ||||||
| 174,923 | Federal Home Loan Mortgage Corp., 5.00%, 2/15/23, Series 2960, Class KP | 180,216 | ||||||
| 124,912 | Federal Home Loan Mortgage Corp., 5.125%, 6/15/18, Series R016, Class AM | 128,941 | ||||||
| 452,406 | Federal Home Loan Mortgage Corp., 5.50%, 5/15/15, Series 2808, Class VA | 487,177 | ||||||
| 172,549 | Federal Home Loan Mortgage Corp., 5.50%, 10/1/25, Series C90925 | 187,314 | ||||||
| 470,172 | Federal Home Loan Mortgage Corp., 5.50%, 8/1/29, Series C46102 | 505,058 | ||||||
| 38,560 | Federal Home Loan Mortgage Corp., 5.875%, 5/15/16, Series R007, Class AC | 38,665 | ||||||
| 498,997 | Federal National Mortgage Assoc., 2.135%, 12/1/35, Series 848390††† | 510,329 | ||||||
| 379,088 | Federal National Mortgage Assoc., 2.18%, 1/1/35, Series 825245††† | 392,509 | ||||||
| 216,377 | Federal National Mortgage Assoc., 2.285%, 11/1/34, Series 782320††† | 225,739 | ||||||
| 17,426 | Federal National Mortgage Assoc., 2.60%, 10/1/32, Series 659567††† | 18,290 | ||||||
| Principal Amount | Value | |||||||
| $ 230,641 | Federal National Mortgage Assoc., 2.815%, 1/1/18, Series 57735††† | $ | 233,988 | |||||
| 243,113 | Federal National Mortgage Assoc., 3.389%, 2/1/21, Series 313380††† | 247,006 | ||||||
| 553,120 | Federal National Mortgage Assoc., 3.875%, 1/25/39, Series 2009-2, Class WJ | 574,669 | ||||||
| 426,760 | Federal National Mortgage Assoc., 4.00%, 10/25/32, Series 2003-28, Class GA | 444,761 | ||||||
| 242,180 | Federal National Mortgage Assoc., 4.078%, 7/1/19, Series 070377††† | 246,583 | ||||||
| 556,801 | Federal National Mortgage Assoc., 4.50%, 5/1/19, Series 725445 | 588,540 | ||||||
| 543,359 | Federal National Mortgage Assoc., 4.50%, 7/1/19, Series 725609 | 574,332 | ||||||
| 599,764 | Federal National Mortgage Assoc., 4.50%, 6/25/29, Series 2005-121, Class V | 622,499 | ||||||
| 341,652 | Federal National Mortgage Assoc., 4.50%, 1/25/30, Series 2004-67, Class AC | 352,826 | ||||||
| 1,301,800 | Federal National Mortgage Assoc., 5.00%, 7/25/23, Series 2005-4, Class VG | 1,391,843 | ||||||
| 250,000 | Federal National Mortgage Assoc., 5.50%, 5/25/23, Series 2003-42, Class EK | 273,836 | ||||||
| 1,414,811 | Government National Mortgage Assoc., 3.00%, 12/20/38, Series 2010-89, Class PA | 1,438,811 | ||||||
| 357,858 | Government National Mortgage Assoc., 3.25%, 1/20/30, Series 80364††† | 372,351 | ||||||
| 665,126 | Government National Mortgage Assoc., 3.25%, 7/20/37, Series 2010-33, Class AP | 676,497 | ||||||
| 1,208,987 | Government National Mortgage Assoc., 4.00%, 6/20/37, Series 2008-30, Class AC | 1,255,846 | ||||||
| 1,169,703 | Government National Mortgage Assoc., 4.00%, 6/20/38, Series 2009-69, Class WC | 1,214,700 | ||||||
| 1,392,985 | Government National Mortgage Assoc., 4.00%, 9/20/38, Series 2009-108, Class WG | 1,455,099 | ||||||
| 1,608,756 | Government National Mortgage Assoc., 4.00%, 3/20/39, Series 2009-31, Class TA | 1,677,658 | ||||||
| 1,455,733 | Government National Mortgage Assoc., 4.00%, 4/16/39, Series 2009-110, Class AB | 1,500,596 | ||||||
| 842,835 | Government National Mortgage Assoc., 4.50%, 8/15/24, Series 717874 | 892,723 | ||||||
| 190,949 | Government National Mortgage Assoc., 4.50%, 1/20/31, Series 2005-38, Class A | 193,694 | ||||||
| 1,164,573 | Government National Mortgage Assoc., 4.50%, 6/20/34, Series 2009-101, Class G | 1,222,743 | ||||||
| 1,202,563 | Government National Mortgage Assoc., 4.50%, 8/20/34, Series 2009-36, Class G | 1,266,311 | ||||||
| 1,314,486 | Government National Mortgage Assoc., 4.50%, 8/16/35, Series 2009-62, Class DT | 1,373,183 | ||||||
| 1,120,958 | Government National Mortgage Assoc., 4.50%, 3/20/39, Series 2009-14, Class AG | 1,189,995 | ||||||
| 650,000 | Government National Mortgage Assoc., 4.658%, 12/16/30, Series 2005-12, Class C | 692,397 | ||||||
| 1,008,577 | Government National Mortgage Assoc., 5.00%, 1/20/16, Series 2005-3, Class VA | 1,079,936 | ||||||
| 161,039 | Government National Mortgage Assoc., 5.00%, 12/20/29, Series 2004-101, Class MA | 162,634 | ||||||
| 1,074,883 | Government National Mortgage Assoc., 5.00%, 9/16/31, Series 2009-38, Class A | 1,135,520 | ||||||
| 500,000 | Government National Mortgage Assoc., 5.00%, 7/20/34, Series 2004-105, Class MC | 535,150 | ||||||
| 282,036 | Government National Mortgage Assoc., 5.00%, 8/20/39, Series 004513 | 296,975 | ||||||
| Total Collateralized Mortgage Obligations (cost $30,101,610) | 30,667,479 | |||||||
84
Table of Contents
| MARCH 31, 2011 (UNAUDITED) | ||
| Principal Amount | Value | |||||||
| CORPORATE BONDS 32.2% | ||||||||
| Aerospace & Defense 1.1% | ||||||||
| $ 200,000 | General Dynamics Corp., 4.25%, 5/15/13 | $ | 212,850 | |||||
| 250,000 | Martin Marietta Corp., 7.375%, 4/15/13 | 278,455 | ||||||
| 1,000,000 | Raytheon Co., 1.625%, 10/15/15 | 954,813 | ||||||
| 1,446,118 | ||||||||
| Air Freight & Logistics 0.4% | ||||||||
| 500,000 | United Parcel Service, Inc., 3.875%, 4/1/14 | 532,894 | ||||||
| Automotive Retail 0.6% | ||||||||
| 775,000 | AutoZone, Inc., 5.50%, 11/15/15 | 835,311 | ||||||
| Biotechnology 0.2% | ||||||||
| 300,000 | Amgen, Inc., 4.85%, 11/18/14 | 328,271 | ||||||
| Cable & Satellite 0.5% | ||||||||
| 550,000 | Comcast Corp., 5.30%, 1/15/14 | 598,771 | ||||||
| Computer Hardware 0.7% | ||||||||
| 600,000 | Hewlett-Packard Co., 2.125%, 9/13/15 | 588,367 | ||||||
| 300,000 | Hewlett-Packard Co., 6.50%, 7/1/12 | 320,520 | ||||||
| 908,887 | ||||||||
| Construction & Farm Machinery & Heavy Trucks 1.3% | ||||||||
| 500,000 | Caterpillar Financial Services Corp., 5.85%, 9/1/17 MTN | 570,105 | ||||||
| 550,000 | John Deere Capital Corp., 4.90%, 9/9/13 MTN | 597,114 | ||||||
| 500,000 | PACCAR Financial Corp., 1.95%, 12/17/12 MTN | 507,585 | ||||||
| 1,674,804 | ||||||||
| Consumer Finance 0.6% | ||||||||
| 700,000 | American Express Credit Corp., 5.875%, 5/2/13 MTN | 755,793 | ||||||
| Distillers & Vintners 0.4% | ||||||||
| 504,000 | Diageo Capital plc, 7.375%, 1/15/14 (United Kingdom) | 578,379 | ||||||
| Diversified Banks 4.1% | ||||||||
| 1,000,000 | Bank of America Corp., 7.375%, 5/15/14 | 1,129,324 | ||||||
| 325,000 | HSBC Finance Corp., 6.375%, 10/15/11 | 334,927 | ||||||
| 950,000 | Royal Bank of Canada Certificate of Deposit, 2.25%, 3/15/13 (Canada) | 978,489 | ||||||
| 500,000 | SouthTrust Corp., 5.80%, 6/15/14 | 539,965 | ||||||
| 950,000 | US Bancorp, 4.20%, 5/15/14 | 1,011,328 | ||||||
| 750,000 | Wachovia Corp., 5.25%, 8/1/14 | 802,103 | ||||||
| 700,000 | Wells Fargo & Co., 0.393%, 1/24/12††† | 700,353 | ||||||
| 5,496,489 | ||||||||
| Diversified Metals & Mining 0.4% | ||||||||
| 450,000 | Rio Tinto Alcan, Inc., 4.50%, 5/15/13 (Canada) | 477,945 | ||||||
| Drug Retail 0.7% | ||||||||
| 550,000 | CVS Caremark Corp., 5.75%, 8/15/11 | 560,278 | ||||||
| 400,000 | Walgreen Co., 4.875%, 8/1/13 | 433,413 | ||||||
| 993,691 | ||||||||
| Electric Utilities 1.0% | ||||||||
| 350,000 | Energy East Corp., 6.75%, 6/15/12 | 369,277 | ||||||
| 300,000 | Florida Power & Light Co., 4.85%, 2/1/13 | 318,804 | ||||||
| 600,000 | Georgia Power Co., 5.125%, 11/15/12, Series K | 638,403 | ||||||
| 1,326,484 | ||||||||
| Footwear 0.5% | ||||||||
| 600,000 | Nike, Inc., 5.15%, 10/15/15 MTN | 661,175 | ||||||
| Principal Amount | Value | |||||||
| Health Care Distributors 0.5% | ||||||||
| $ 650,000 | Cardinal Health, Inc., 5.50%, 6/15/13 | $ | 699,240 | |||||
| Health Care Equipment 0.2% | ||||||||
| 250,000 | Baxter International, Inc., 4.625%, 3/15/15 | 272,005 | ||||||
| Household Appliances 0.3% | ||||||||
| 350,000 | Whirlpool Corp., 8.00%, 5/1/12 | 372,993 | ||||||
| Industrial Conglomerates 3.7% | ||||||||
| 500,000 | 3M Co., 4.375%, 8/15/13 MTN | 539,633 | ||||||
| 1,250,000 | General Electric Capital Corp., 3.75%, 11/14/14, Series A | 1,302,364 | ||||||
| 1,000,000 | General Electric Capital Corp., 5.40%, 2/15/17 MTN | 1,084,056 | ||||||
| 1,000,000 | General Electric Capital Corp., 5.90%, 5/13/14 | 1,103,730 | ||||||
| 740,000 | Tyco International Finance Ltd. S.A., 6.00%, 11/15/13 | 819,213 | ||||||
| 4,848,996 | ||||||||
| Industrial Gases 0.5% | ||||||||
| 600,000 | Praxair, Inc., 2.125%, 6/14/13 | 614,522 | ||||||
| Industrial Machinery 0.5% | ||||||||
| 600,000 | Parker Hannifin Corp., 4.875%, 2/15/13 | 641,045 | ||||||
| Instruments-Scientific 0.5% | ||||||||
| 600,000 | Thermo Fisher Scientific, Inc., 2.15%, 12/28/12 | 609,677 | ||||||
| Integrated Oil & Gas 0.4% | ||||||||
| 500,000 | ConocoPhillips, 4.60%, 1/15/15 | 544,917 | ||||||
| Integrated Telecommunication Services 1.5% | ||||||||
| 170,774 | Ameritech Capital Funding, 9.10%, 6/1/16 | 199,512 | ||||||
| 870,000 | AT&T, Inc., 2.50%, 8/15/15 | 863,545 | ||||||
| 520,000 | Verizon Communications, Inc., 5.55%, 2/15/16 | 577,530 | ||||||
| 300,000 | Verizon Global Funding Corp., 4.375%, 6/1/13 | 318,848 | ||||||
| 1,959,435 | ||||||||
| Investment Banking & Brokerage 0.4% | ||||||||
| 500,000 | Goldman Sachs Group, Inc. (The), 5.35%, 1/15/16 | 533,640 | ||||||
| Life & Health Insurance 1.5% | ||||||||
| 500,000 | Principal Life Income Funding Trusts, 5.30%, 4/24/13 MTN | 537,980 | ||||||
| 850,000 | Prudential Financial, Inc., 6.20%, 1/15/15 | 938,115 | ||||||
| 480,000 | Prudential Holdings, LLC, 7.245%, 12/18/23, Series FSA† | 548,702 | ||||||
| 2,024,797 | ||||||||
| Movies & Entertainment 0.5% | ||||||||
| 250,000 | Walt Disney Co. (The), 4.50%, 12/15/13 | 270,918 | ||||||
| 350,000 | Walt Disney Co. (The), 6.00%, 7/17/17, Series C MTN | 397,973 | ||||||
| 668,891 | ||||||||
| Oil & Gas Exploration & Production 0.2% | ||||||||
| 300,000 | Apache Corp., 6.25%, 4/15/12 | 315,857 | ||||||
| Other Diversified Financial Services 1.3% | ||||||||
| 1,350,000 | Bear Stearns Cos., LLC (The), 5.70%, 11/15/14 | 1,483,831 | ||||||
| 260,000 | Source One Mortgage Services, 9.00%, 6/1/12, Series B | 278,095 | ||||||
| 1,761,926 | ||||||||
85
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| WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments (continued) | ||
| Principal Amount | Value | |||||||
| Personal Products 0.5% | ||||||||
| $ 655,000 | Avon Products, Inc., 5.625%, 3/1/14 | $ | 716,451 | |||||
| Pharmaceuticals 2.1% | ||||||||
| 745,000 | AstraZeneca plc, 5.90%, 9/15/17 (United Kingdom) | 850,524 | ||||||
| 1,000,000 | Johnson & Johnson, 5.55%, 8/15/17 | 1,147,308 | ||||||
| 725,000 | Pharmacia Corp., 6.50%, 12/1/18 | 840,052 | ||||||
| 2,837,884 | ||||||||
| Property & Casualty Insurance 1.2% | ||||||||
| 435,000 | Allstate Corp. (The), 7.50%, 6/15/13 | 485,513 | ||||||
| 650,000 | Berkshire Hathaway Finance Corp., 4.625%, 10/15/13 | 701,068 | ||||||
| 325,000 | Progressive Corp. (The), 6.375%, 1/15/12 | 339,677 | ||||||
| 1,526,258 | ||||||||
| Railroads 0.6% | ||||||||
| 300,000 | Burlington Northern Santa Fe, LLC, 4.30%, 7/1/13 | 318,002 | ||||||
| 500,000 | Union Pacific Corp., 6.125%, 1/15/12 | 520,289 | ||||||
| 838,291 | ||||||||
| Regional Banks 0.8% | ||||||||
| 800,000 | BB&T Corp., 4.75%, 10/1/12 | 838,820 | ||||||
| 200,000 | Fifth Third Bancorp, 5.45%, 1/15/17 | 207,286 | ||||||
| 1,046,106 | ||||||||
| Soft Drinks 0.5% | ||||||||
| 600,000 | Bottling Group, LLC, 4.625%, 11/15/12 | 635,567 | ||||||
| Special Purpose Entity 0.1% | ||||||||
| 88,000 | Targeted Return Index Fund, 6.814%, 1/15/12, Series 2002-10† ††† | 89,848 | ||||||
| Specialized Finance 0.5% | ||||||||
| 600,000 | CME Group, Inc., 5.40%, 8/1/13 | 653,483 | ||||||
| Steel 0.8% | ||||||||
| 950,000 | Nucor Corp., 5.00%, 12/1/12 | 1,008,931 | ||||||
| Systems Software 0.6% | ||||||||
| 750,000 | Oracle Corp., 3.75%, 7/8/14 | 796,013 | ||||||
| Total Corporate Bonds (cost $41,154,949) | 42,631,785 | |||||||
| MUNICIPAL BONDS 0.9% | ||||||||
| 650,000 | Arizona State Transportation Board Highway Revenue, 5.00%, 7/1/23 | 686,387 | ||||||
| 500,000 | Richmond, CA Joint Powers Financing Authority Revenue, 8.25%, 7/1/19 | 512,135 | ||||||
| Total Municipal Bonds (cost $1,153,087) | 1,198,522 | |||||||
| Shares | Value | |||||||
| MUTUAL FUNDS 0.6% | ||||||||
| 44,765 | Eaton Vance Short Duration Diversified Income Fund | $ | 757,871 | |||||
| Total Mutual Funds (cost $670,581) | 757,871 | |||||||
| EXCHANGE TRADED FUNDS 0.5% | ||||||||
| 6,000 | iShares iBoxx Investment Grade Corporate Bond Fund | 649,200 | ||||||
| Total Exchange Traded Funds (cost $519,311) | 649,200 | |||||||
| Principal Amount | Value | |||||||
| U.S. GOVERNMENT AGENCY SECURITIES 20.5% | ||||||||
| $1,000,000 | Federal Farm Credit Bank, 2.65%, 5/11/15 | $ | 1,024,523 | |||||
| 1,000,000 | Federal Farm Credit Bank, 3.85%, 2/11/15 | 1,072,285 | ||||||
| 1,000,000 | Federal Farm Credit Bank, 3.875%, 10/7/13 | 1,067,350 | ||||||
| 650,000 | Federal Farm Credit Bank, 4.875%, 4/1/14 | 714,891 | ||||||
| 1,500,000 | Federal Home Loan Bank, 1.00%, 3/25/13 | 1,496,376 | ||||||
| 1,000,000 | Federal Home Loan Bank, 1.00%, 12/29/14## | 995,748 | ||||||
| 1,000,000 | Federal Home Loan Bank, 1.125%, 4/19/13 | 998,374 | ||||||
| 1,000,000 | Federal Home Loan Bank, 1.25%, 4/15/14## | 1,000,343 | ||||||
| 1,000,000 | Federal Home Loan Bank, 2.00%, 7/17/14## | 1,013,547 | ||||||
| 1,550,000 | Federal Home Loan Bank, 5.00%, 9/14/12 | 1,645,743 | ||||||
| 1,500,000 | Federal Home Loan Mortgage Corp., 2.52%, 12/9/14 | 1,536,829 | ||||||
| 1,300,000 | Federal Home Loan Mortgage Corp., 3.00%, 7/28/14 | 1,358,548 | ||||||
| 2,000,000 | Federal Home Loan Mortgage Corp., 3.50%, 5/29/13 | 2,109,956 | ||||||
| 2,300,000 | Federal Home Loan Mortgage Corp., 4.75%, 11/17/15 | 2,548,122 | ||||||
| 700,000 | Federal Home Loan Mortgage Corp., 5.55%, 10/4/16 | 717,521 | ||||||
| 800,000 | Federal National Mortgage Assoc., 1.50%, 9/23/14 | 788,970 | ||||||
| 1,000,000 | Federal National Mortgage Assoc., 2.05%, 5/21/14## | 1,004,972 | ||||||
| 1,800,000 | Federal National Mortgage Assoc., 4.875%, 12/15/16 | 2,004,633 | ||||||
| 600,000 | Federal National Mortgage Assoc., 5.24%, 8/7/18 | 650,435 | ||||||
| 621,349 | New Valley Generation III, 4.687%, 1/15/22*** | 636,759 | ||||||
| 1,000,000 | Tennessee Valley Authority, 0.00%, 11/1/18, Series C### | 746,051 | ||||||
| 800,000 | Tennessee Valley Authority, 6.00%, 3/15/13, Series C | 878,217 | ||||||
| 1,000,000 | Tennessee Valley Authority, 6.25%, 12/15/17, Series E | 1,186,335 | ||||||
| Total U.S. Government Agency Securities (cost $26,872,983) | 27,196,528 | |||||||
| U.S. TREASURY BONDS 10.7% | ||||||||
| 6,075,000 | U.S. Treasury Bond 3.25%, 12/31/16 | 6,313,729 | ||||||
| 7,500,000 | U.S. Treasury Bond 3.75%, 11/15/18 | 7,879,688 | ||||||
| Total U.S. Treasury Bonds (cost $14,253,155) | 14,193,417 | |||||||
| U.S. TREASURY INFLATION PROTECTED BONDS 2.1% | ||||||||
| 2,575,048 | U.S. Treasury Bond 1.625%, 1/15/18# | 2,784,271 | ||||||
| Total U.S. Treasury Inflation Protected Bonds (cost $2,517,371) | 2,784,271 | |||||||
86
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| MARCH 31, 2011 (UNAUDITED) | ||
| Shares | Value | |||||||
| PREFERRED STOCKS 1.1% | ||||||||
| Investment Banking & Brokerage 0.4% | ||||||||
| 20,000 | Morgan Stanley Cap Tr VI, 6.60%, Pfd. | $ | 489,000 | |||||
| Other Diversified Financial Services 0.7% | ||||||||
| 15,000 | Bank of America Corp., 8.20%, 5/13/13, Series H Pfd.§§§ | 394,050 | ||||||
| 20,000 | Bank One Capital TR VI, 7.20%, 10/15/31 Pfd. | 513,800 | ||||||
| 907,850 | ||||||||
| Total Preferred Stocks (cost $1,353,591) | 1,396,850 | |||||||
| Principal Amount | Value | |||||||
| SHORT-TERM INVESTMENTS 6.2% | ||||||||
| Repurchase Agreement 6.2% | ||||||||
| $8,259,591 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $8,340,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $8,428,408; repurchase proceeds: $8,259,593 (cost $8,259,591) | $ | 8,259,591 | |||||
| Total Short-Term Investments (cost $8,259,591) | 8,259,591 | |||||||
| Total Investments (cost $130,161,991) 100.4% | 132,932,051 | |||||||
| Liabilities less Other Assets (0.4%) | (487,690 | ) | ||||||
| NET ASSETS 100.0% | $ | 132,444,361 | ||||||
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11).
†††Variable Rate Securities.
§§§Perpetual Maturity. Callable any time after first call date. Maturity date is next call date.
#Treasury Inflation Protected Securities. A U.S. Treasury Note or Bond that offers protection from inflation by paying a fixed rate of interest on principal amount that is adjusted for inflation based on the Consumer Price Index.
##Step Bond. The rate shown is as of March 31, 2011 and will reset at a future date.
###Zero Coupon Bond.
MTN Medium Term Note.
See Notes to Financial Statements. |
| |||||||
At March 31, 2011, Wasatch-1st Source Income Fund’s investments, excluding short-term investments, were in the following countries:
| Country | % | |||
Canada | 1.2 | |||
United Kingdom | 1.1 | |||
United States | 97.7 | |||
TOTAL | 100.0 | % | ||
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| WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Schedule of Investments | MARCH 31, 2011 (UNAUDITED) | |
| Principal Amount | Value | |||||||
| U.S. GOVERNMENT OBLIGATIONS 100.3% | ||||||||
| $ 9,700,000 | U.S. Treasury Bond, 3.50%, 2/15/39 | $ | 8,132,849 | |||||
| 4,500,000 | U.S. Treasury Bond, 3.875%, 8/15/40 | 4,026,798 | ||||||
| 6,335,000 | U.S. Treasury Bond, 4.25%, 5/15/39 | 6,076,652 | ||||||
| 1,400,000 | U.S. Treasury Bond, 4.375%, 2/15/38 | 1,377,032 | ||||||
| 2,987,000 | U.S. Treasury Bond, 4.375%, 5/15/40 | 2,920,270 | ||||||
| 15,200,000 | U.S. Treasury Bond, 4.50%, 2/15/36 | 15,347,258 | ||||||
| 10,000,000 | U.S. Treasury Bond, 4.50%, 5/15/38 | 10,029,690 | ||||||
| 4,500,000 | U.S. Treasury Bond, 4.50%, 8/15/39 | 4,498,596 | ||||||
| 22,000,000 | U.S. Treasury Bond, 4.75%, 2/15/37 | 23,027,818 | ||||||
| 2,360,000 | U.S. Treasury Bond, 4.75%, 2/15/41 | 2,452,925 | ||||||
| 106,000,000 | U.S. Treasury Strip, principal only, 2/15/31 | 42,519,356 | ||||||
| 55,837,000 | U.S. Treasury Strip, principal only, 2/15/37 | 16,495,255 | ||||||
| 52,251,000 | U.S. Treasury Strip, principal only, 5/15/39 | 13,652,141 | ||||||
| 20,000,000 | U.S. Treasury Strip, principal only, 5/15/40 | 4,967,920 | ||||||
| Total U.S. Government Obligations (cost $167,296,388) | 155,524,560 | |||||||
| SHORT-TERM INVESTMENTS 0.4% | ||||||||
| Repurchase Agreement 0.4% | ||||||||
| 589,549 | Repurchase Agreement dated 3/31/11, 0.01% due 4/1/11 with State Street Bank and Trust Co. collateralized by $600,000 of United States Treasury Bonds 4.50% due 8/15/39; value: $606,360; repurchase proceeds: $589,549 (cost $589,549) | 589,549 | ||||||
| Total Short-Term Investments (cost $589,549) | 589,549 | |||||||
| Total Investments (cost $167,885,937) 100.7% | 156,114,109 | |||||||
| Liabilities less Other Assets (0.7%) | (1,030,758 | ) | ||||||
| NET ASSETS 100.0% | $ | 155,083,351 | ||||||
See Notes to Financial Statements.
| ||||||||
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| WASATCH FUNDS — Statements of Assets and Liabilities | ||
| CORE GROWTH FUND | EMERGING MARKETS SMALL CAP FUND | GLOBAL OPPORTUNITIES FUND | ||||||||||
Assets: | ||||||||||||
Investments, at cost | ||||||||||||
Unaffiliated issuers | $ | 314,196,522 | $ | 598,713,782 | $ | 224,516,684 | ||||||
Repurchase agreements | 16,990,736 | 17,721,807 | 20,422,375 | |||||||||
| $ | 331,187,258 | $ | 616,435,589 | $ | 244,939,059 | |||||||
Investments, at market value | ||||||||||||
Unaffiliated issuers | $ | 475,639,915 | $ | 684,279,909 | $ | 312,725,438 | ||||||
Repurchase agreements | 16,990,736 | 17,721,807 | 20,422,375 | |||||||||
| 492,630,651 | 702,001,716 | 333,147,813 | ||||||||||
Cash | — | — | — | |||||||||
Foreign currency on deposit (cost of $0, $2,836,465, $676,791, $0, $809,986, $13,778, $822,150 and $0, respectively) | — | 2,842,384 | 682,715 | |||||||||
Receivable for investment securities sold | 2,380,264 | 1,269,170 | 381,679 | |||||||||
Capital shares receivable | 119,089 | 3,260,116 | 411,792 | |||||||||
Interest and dividends receivable | 260,161 | 1,256,016 | 461,662 | |||||||||
Prepaid expenses and other assets | 25,948 | 81,608 | 26,513 | |||||||||
Unrealized appreciation on foreign currency exchange contracts | — | — | — | |||||||||
Total Assets | 495,416,113 | 710,711,010 | 335,112,174 | |||||||||
Liabilities: | ||||||||||||
Bank overdraft of foreign currency (cost of $0, $0, $0, $42, $0, $0, $0 and $0, respectively) | — | — | — | |||||||||
Payable for securities purchased | — | 3,707,468 | 3,932,756 | |||||||||
Capital shares payable | 315,953 | 676,347 | 155,925 | |||||||||
Dividends payable to shareholders | — | — | — | |||||||||
Payable to Advisor | 409,481 | 768,559 | 402,917 | |||||||||
Accrued fund administration fees | 7,204 | 9,989 | 4,742 | |||||||||
Accrued expenses and other liabilities | 217,982 | 162,494 | 100,015 | |||||||||
Other payables | 275,461 | 567,519 | 14,992 | |||||||||
Unrealized depreciation on foreign currency exchange contracts | — | — | — | |||||||||
Total Liabilities | 1,226,081 | 5,892,376 | 4,611,347 | |||||||||
Net Assets | $ | 494,190,032 | $ | 704,818,634 | $ | 330,500,827 | ||||||
Net Assets Consist of: | ||||||||||||
Capital stock | $ | 134,649 | $ | 2,838,264 | $ | 728,343 | ||||||
Paid-in-capital in excess of par | 439,445,532 | 630,192,775 | 233,114,972 | |||||||||
Undistributed net investment income (loss) | 1,331,374 | (3,008,245 | ) | (1,903,551 | ) | |||||||
Undistributed net realized gain (loss) on investments and foreign currency translations | (107,889,779 | ) | (10,233,733 | ) | 10,355,328 | |||||||
Net unrealized appreciation on investments and foreign currency translations | 161,168,256 | 85,029,573 | 88,205,735 | |||||||||
Net Assets | $ | 494,190,032 | $ | 704,818,634 | $ | 330,500,827 | ||||||
Capital Stock, $.01 par value: | ||||||||||||
Authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||||||
Issued and outstanding | 13,464,901 | 283,826,427 | 72,834,314 | |||||||||
NET ASSET VALUE, REDEMPTION PRICEAND OFFERING | $ | 36.70 | $ | 2.48 | $ | 4.54 | ||||||
| 1 | Formerly known as Wasatch-1st Source Income Equity Fund. |
See Notes to Financial Statements.
90
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| MARCH 31, 2011 (UNAUDITED) | ||
| GLOBAL SCIENCE & TECHNOLOGY FUND | HERITAGE GROWTH FUND | INTERNATIONAL GROWTH FUND | INTERNATIONAL OPPORTUNITIES FUND | LARGE CAP VALUE FUND1 | ||||||||||||||
| $ | 60,524,250 | $ | 58,557,691 | $ | 232,418,802 | $ | 123,921,367 | $ | 1,436,224,251 | |||||||||
| 2,669,572 | 3,875,667 | 4,006,098 | 26,448,788 | 31,210,844 | ||||||||||||||
| $ | 63,193,822 | $ | 62,433,358 | $ | 236,424,900 | $ | 150,370,155 | $ | 1,467,435,095 | |||||||||
| $ | 73,757,310 | $ | 83,805,954 | $ | 295,290,201 | $ | 156,994,987 | $ | 1,817,914,268 | |||||||||
| 2,669,572 | 3,875,667 | 4,006,098 | 26,448,788 | 31,210,844 | ||||||||||||||
| 76,426,882 | 87,681,621 | 299,296,299 | 183,443,775 | 1,849,125,112 | ||||||||||||||
| — | — | — | 659,445 | — | ||||||||||||||
| — | 830,133 | 13,823 | 823,569 | — | ||||||||||||||
| 704,166 | 136,838 | 2,615 | 2,509,403 | — | ||||||||||||||
| 17,125 | 10,174 | 225,090 | 79,656 | 1,571,790 | ||||||||||||||
| 129,116 | 24,946 | 439,540 | 402,764 | 2,486,513 | ||||||||||||||
| 13,722 | 8,354 | 25,323 | 20,884 | 132,346 | ||||||||||||||
| — | — | — | 121,322 | — | ||||||||||||||
| 77,291,011 | 88,692,066 | 300,002,690 | 188,060,818 | 1,853,315,761 | ||||||||||||||
| 43 | — | — | — | — | ||||||||||||||
| 344,206 | 146,108 | 2,413,134 | 5,142,408 | — | ||||||||||||||
| 90,627 | 95,477 | 1,136,714 | 101,987 | 2,113,808 | ||||||||||||||
| — | — | — | — | 242,144 | ||||||||||||||
| 98,110 | 43,600 | 312,712 | 256,135 | 1,418,695 | ||||||||||||||
| 1,127 | 1,288 | 4,434 | 2,667 | 27,306 | ||||||||||||||
| 64,331 | 50,199 | 84,703 | 157,910 | 566,368 | ||||||||||||||
| — | — | 48,099 | 13,517 | — | ||||||||||||||
| — | — | — | 2,964 | — | ||||||||||||||
| 598,444 | 336,672 | 3,999,796 | 5,677,588 | 4,368,321 | ||||||||||||||
| $ | 76,692,567 | $ | 88,355,394 | $ | 296,002,894 | $ | 182,383,230 | $ | 1,848,947,440 | |||||||||
| $ | 47,930 | $ | 70,239 | $ | 144,196 | $ | 676,551 | $ | 1,254,926 | |||||||||
| 84,627,747 | 66,992,044 | 258,255,974 | 135,115,637 | 1,508,438,279 | ||||||||||||||
| (332,668 | ) | 18,978 | (1,499,936 | ) | (1,767,970 | ) | (68,696 | ) | ||||||||||
| (20,885,367 | ) | (3,994,277 | ) | (23,721,677 | ) | 15,173,528 | (42,367,377 | ) | ||||||||||
| 13,234,925 | 25,268,410 | 62,824,337 | 33,185,484 | 381,690,308 | ||||||||||||||
| $ | 76,692,567 | $ | 88,355,394 | $ | 296,002,894 | $ | 182,383,230 | $ | 1,848,947,440 | |||||||||
| 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | ||||||||||||||
| 4,793,003 | 7,023,902 | 14,419,578 | 67,655,133 | 125,492,592 | ||||||||||||||
| $ | 16.00 | $ | 12.58 | $ | 20.53 | $ | 2.70 | $ | 14.73 | |||||||||
91
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| WASATCH FUNDS — Statements of Assets and Liabilities (continued) | ||
| LONG/SHORT FUND1 | MICRO CAP FUND | MICRO CAP VALUE FUND | ||||||||||
Assets: | ||||||||||||
Investments, at cost | ||||||||||||
Unaffiliated issuers | $ | 420,509,279 | $ | 225,837,599 | $ | 151,049,495 | ||||||
Affiliated issuers2 | — | — | — | |||||||||
Repurchase agreements | 112,755,949 | 12,467,754 | 18,896,780 | |||||||||
| $ | 533,265,228 | $ | 238,305,353 | $ | 169,946,275 | |||||||
Investments, at market value | ||||||||||||
Unaffiliated issuers | $ | 485,294,144 | $ | 330,797,040 | $ | 189,856,798 | ||||||
Affiliated issuers2 | — | — | — | |||||||||
Repurchase agreements | 112,755,949 | 12,467,754 | 18,896,780 | |||||||||
| 598,050,093 | 343,264,794 | 208,753,578 | ||||||||||
Cash | 2,142,734 | — | — | |||||||||
Foreign currency on deposit (cost of $0, $0, $18, $0, $0, $2,113, $0, $0 and $0, respectively) | — | — | 18 | |||||||||
Receivable for investment securities sold | 32,119,674 | 3,763,605 | 3,978,205 | |||||||||
Receivable from broker for securities sold short | 78,895,965 | — | — | |||||||||
Capital shares receivable | 5,179,051 | 95,403 | 27,973 | |||||||||
Interest and dividends receivable | 462,758 | 139,848 | 181,350 | |||||||||
Prepaid expenses and other assets | 44,552 | 18,856 | 13,792 | |||||||||
Total Assets | 716,894,827 | 347,282,506 | 212,954,916 | |||||||||
Liabilities: | ||||||||||||
Call options written at value (premiums of $7,228,515, $0, $32,499, $0, $0, $0, $0, $0 and $0, respectively) | 8,043,286 | — | 28,000 | |||||||||
Securities sold short, at value (proceeds of $109,352,627, $0, $0, $0, $0, $0, $0, $0 and $0, respectively) | 113,692,748 | — | — | |||||||||
Payable for securities purchased | 11,254,115 | 1,535,379 | 3,011,500 | |||||||||
Capital shares payable | 287,425 | 99,387 | 83,072 | |||||||||
Dividends payable to shareholders | — | — | — | |||||||||
Payable to Advisor | 501,518 | 555,353 | 335,660 | |||||||||
Accrued fund administration fees | 7,985 | 5,013 | 3,044 | |||||||||
Accrued expenses and other liabilities | 100,774 | 96,643 | 111,518 | |||||||||
Other payables | 146,600 | — | 10,633 | |||||||||
Unrealized depreciation on foreign currency exchange contracts | — | — | 959,307 | |||||||||
Total Liabilities | 134,034,451 | 2,291,775 | 4,542,734 | |||||||||
Net Assets | $ | 582,860,376 | $ | 344,990,731 | $ | 208,412,182 | ||||||
Net Assets Consist of: | ||||||||||||
Capital stock | $ | 429,765 | $ | 607,913 | $ | 742,504 | ||||||
Paid-in-capital in excess of par | 515,354,606 | 323,082,244 | 170,195,930 | |||||||||
Undistributed net investment income (loss) | (740,739 | ) | (883,129 | ) | (1,816,243 | ) | ||||||
Undistributed net realized gain (loss) on investments and foreign currency translations | 8,186,771 | (82,776,676 | ) | 1,444,662 | ||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency translations | 59,629,973 | 104,960,379 | 37,845,329 | |||||||||
Net Assets | $ | 582,860,376 | $ | 344,990,731 | $ | 208,412,182 | ||||||
Capital Stock, $.01 par value: | ||||||||||||
Authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||||||
Issued and outstanding | 42,976,468 | 60,791,311 | 74,250,434 | |||||||||
NET ASSET VALUE, REDEMPTION PRICEAND OFFERING | $ | 13.56 | $ | 5.68 | $ | 2.81 | ||||||
| 1 | Formerly known as Wasatch-1st Source Long/Short Fund. |
| 2 | See Note 10 for information on affiliated issuers. |
See Notes to Financial Statements.
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| MARCH 31, 2011 (UNAUDITED) | ||
| SMALL CAP GROWTH FUND | SMALL CAP VALUE FUND | STRATEGIC INCOME FUND | ULTRA GROWTH FUND | INCOME FUND | U.S. TREASURY FUND | |||||||||||||||||
| $ | 942,255,833 | $ | 158,002,087 | $ | 24,051,022 | $ | 131,798,463 | $ | 121,902,400 | $ | 167,296,388 | |||||||||||
| 23,372,759 | — | — | — | — | — | |||||||||||||||||
| 135,131,236 | 15,433,943 | 1,449,960 | 1,470,331 | 8,259,591 | 589,549 | |||||||||||||||||
| $ | 1,100,759,828 | $ | 173,436,030 | $ | 25,500,982 | $ | 133,268,794 | $ | 130,161,991 | $ | 167,885,937 | |||||||||||
| $ | 1,422,932,552 | $ | 222,836,352 | $ | 27,452,445 | $ | 186,518,265 | $ | 124,672,460 | $ | 155,524,560 | |||||||||||
| 37,486,059 | — | — | — | — | — | |||||||||||||||||
| 135,131,236 | 15,433,943 | 1,449,960 | 1,470,331 | 8,259,591 | 589,549 | |||||||||||||||||
| 1,595,549,847 | 238,270,295 | 28,902,405 | 187,988,596 | 132,932,051 | 156,114,109 | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| — | — | 2,113 | — | — | — | |||||||||||||||||
| 5,568 | 4,981,393 | 198,307 | 1,144,691 | — | — | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| 939,457 | 26,269 | 1,075 | 24,485 | 48,495 | 121,559 | |||||||||||||||||
| 871,072 | 94,030 | 155,163 | 87,710 | 1,108,993 | 647,186 | |||||||||||||||||
| 62,692 | 16,375 | 14,117 | 19,878 | 22,353 | 23,678 | |||||||||||||||||
| 1,597,428,636 | 243,388,362 | 29,273,180 | 189,265,360 | 134,111,892 | 156,906,532 | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| 6,783,961 | 1,317,408 | 164,931 | 249,145 | 1,487,302 | — | |||||||||||||||||
| 1,227,727 | 37,627 | 9,333 | 771,996 | 18,232 | 1,508,654 | |||||||||||||||||
| — | — | 1,934 | — | 50,520 | 180,799 | |||||||||||||||||
| 1,295,321 | 299,763 | 12,597 | 158,946 | 61,915 | 69,425 | |||||||||||||||||
| 22,747 | 3,517 | 425 | 2,822 | 1,988 | 2,347 | |||||||||||||||||
| 377,657 | 157,473 | 17,771 | 98,115 | 47,574 | 61,956 | |||||||||||||||||
| 60,552 | 13,714 | — | — | — | — | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| 9,767,965 | 1,829,502 | 206,991 | 1,281,024 | 1,667,531 | 1,823,181 | |||||||||||||||||
| $ | 1,587,660,671 | $ | 241,558,860 | $ | 29,066,189 | $ | 187,984,336 | $ | 132,444,361 | $ | 155,083,351 | |||||||||||
| $ | 377,274 | $ | 617,881 | $ | 33,169 | $ | 77,783 | $ | 130,967 | $ | 114,675 | |||||||||||
| 1,072,979,841 | 309,060,381 | 33,405,742 | 143,949,749 | 132,126,113 | 169,256,012 | |||||||||||||||||
| (638,191 | ) | (56,518 | ) | 34,295 | (1,540,874 | ) | 8,893 | 14,810 | ||||||||||||||
| 20,206,013 | (132,884,324 | ) | (7,808,434 | ) | (9,223,044 | ) | (2,591,672 | ) | (2,530,318 | ) | ||||||||||||
| 494,735,734 | 64,821,440 | 3,401,417 | 54,720,722 | 2,770,060 | (11,771,828 | ) | ||||||||||||||||
| $ | 1,587,660,671 | $ | 241,558,860 | $ | 29,066,189 | $ | 187,984,336 | $ | 132,444,361 | $ | 155,083,351 | |||||||||||
| 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||||||||||||||
| 37,727,412 | 61,788,086 | 3,316,887 | 7,778,285 | 13,096,717 | 11,467,451 | |||||||||||||||||
| $ | 42.08 | $ | 3.91 | $ | 8.76 | $ | 24.17 | $ | 10.11 | $ | 13.52 | |||||||||||
93
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| WASATCH FUNDS — Statements of Operations | ||
| CORE GROWTH FUND | EMERGING MARKETS SMALL CAP FUND | GLOBAL OPPORTUNITIES FUND | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 1,169 | $ | 2,306 | $ | 636 | ||||||
Dividends2 | ||||||||||||
Unaffiliated issuers | 1,579,950 | 4,224,191 | 1,838,419 | |||||||||
Total investment income | 1,581,119 | 4,226,497 | 1,839,055 | |||||||||
Expenses: | ||||||||||||
Investment advisory fees | 2,314,733 | 6,224,542 | 2,550,632 | |||||||||
Shareholder servicing fees | 322,765 | 627,263 | 157,900 | |||||||||
Fund administration fees | 44,189 | 67,678 | 27,205 | |||||||||
Fund accounting fees | 31,772 | 55,946 | 43,415 | |||||||||
Reports to shareholders | 55,009 | 86,038 | 31,066 | |||||||||
Custody fees | 38,001 | 426,310 | 55,800 | |||||||||
Federal and state registration fees | 17,092 | 87,285 | 21,395 | |||||||||
Legal fees | 10,385 | 13,473 | 5,940 | |||||||||
Trustees’ fees | 17,031 | 17,771 | 9,079 | |||||||||
Interest | 2,788 | 9,206 | 1,556 | |||||||||
Audit fees and other expenses | 32,453 | 24,986 | 22,580 | |||||||||
Total expenses before reimbursement | 2,886,218 | 7,640,498 | 2,926,568 | |||||||||
Reimbursement of expenses by Advisor | — | (609,988 | ) | — | ||||||||
Net Expenses | 2,886,218 | 7,030,510 | 2,926,568 | |||||||||
Net Investment Income (Loss) | (1,305,099 | ) | (2,804,013 | ) | (1,087,513 | ) | ||||||
Realized and Unrealized Gain (Loss): | ||||||||||||
Net realized gain on investments and foreign | ||||||||||||
Unaffiliated issuers | 14,655,490 | 5,344,083 | 11,389,403 | |||||||||
Net realized gain on short positions | — | — | — | |||||||||
Realized foreign capital gains taxes | — | (295,996 | ) | — | ||||||||
Change in unrealized appreciation (depreciation) on | 79,653,990 | 3,824,755 | 36,426,303 | |||||||||
Change in deferred foreign capital gains taxes | (46,344 | ) | 2,264,676 | 90,906 | ||||||||
Net gain on investments | 94,263,136 | 11,137,518 | 47,906,612 | |||||||||
Net Increase in Net Assets Resulting from Operations | $ | 92,958,037 | $ | 8,333,505 | $ | 46,819,099 | ||||||
| 1 | Formerly known as Wasatch-1st Source Income Equity Fund. |
| 2 | Net of $42,627, $306,992, $83,722, $16,263, $5,798, $90,860, $68,367 and $29,397 in foreign withholding taxes, respectively. |
See Notes to Financial Statements.
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| FORTHESIXMONTHSENDED MARCH 31, 2011 (UNAUDITED) | ||
| GLOBAL SCIENCE & TECHNOLOGY FUND | HERITAGE GROWTH FUND | INTERNATIONAL GROWTH FUND | INTERNATIONAL OPPORTUNITIES FUND | LARGE CAP VALUE FUND1 | ||||||||||||||
| $ | 151 | $ | 171 | $ | 743 | $ | 1,009 | $ | 1,483 | |||||||||
| 362,901 | 413,398 | 1,332,786 | 793,186 | 19,213,662 | ||||||||||||||
| 363,052 | 413,569 | 1,333,529 | 794,195 | 19,215,145 | ||||||||||||||
| 534,854 | 290,237 | 2,510,586 | 1,654,381 | 7,848,222 | ||||||||||||||
| 79,168 | 82,625 | 203,139 | 268,877 | 1,173,515 | ||||||||||||||
| 6,809 | 7,919 | 33,730 | 16,197 | 166,562 | ||||||||||||||
| 14,267 | 10,784 | 34,263 | 28,386 | 98,118 | ||||||||||||||
| 11,304 | 9,959 | 27,935 | 39,617 | 154,353 | ||||||||||||||
| 11,636 | 4,701 | 133,109 | 85,363 | 21,248 | ||||||||||||||
| 10,459 | 10,299 | 32,550 | 14,504 | 32,978 | ||||||||||||||
| 1,616 | 1,902 | 7,519 | 3,727 | 39,806 | ||||||||||||||
| 2,672 | 3,178 | 11,202 | 5,938 | 65,815 | ||||||||||||||
| 448 | 537 | 11,880 | 1,009 | 10,558 | ||||||||||||||
| 22,522 | 17,636 | 25,644 | 21,638 | 64,717 | ||||||||||||||
| 695,755 | 439,777 | 3,031,557 | 2,139,637 | 9,675,892 | ||||||||||||||
| — | (45,350 | ) | — | (229,732 | ) | (73,115 | ) | |||||||||||
| 695,755 | 394,427 | 3,031,557 | 1,909,905 | 9,602,777 | ||||||||||||||
| (332,703 | ) | 19,142 | (1,698,028 | ) | (1,115,710 | ) | 9,612,368 | |||||||||||
| 7,413,683 | 3,710,562 | 43,520,980 | 20,103,914 | 22,971,293 | ||||||||||||||
| 1,201 | — | — | — | — | ||||||||||||||
| — | — | (223,661 | ) | (17,565 | ) | — | ||||||||||||
| | 4,082,001 | | 10,382,298 | (15,174,608 | ) | (7,086,095 | ) | 241,311,881 | ||||||||||
| — | — | 596,053 | 195,401 | — | ||||||||||||||
| 11,496,885 | 14,092,860 | 28,718,764 | 13,195,655 | 264,283,174 | ||||||||||||||
| $ | 11,164,182 | $ | 14,112,002 | $ | 27,020,736 | $ | 12,079,945 | $ | 273,895,542 | |||||||||
95
Table of Contents
| WASATCH FUNDS — Statements of Operations (continued) | ||
| LONG/SHORT FUND1 | MICRO CAP FUND | MICRO CAP VALUE FUND | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 3,044 | $ | 489 | $ | 806 | ||||||
Dividends2 | ||||||||||||
Unaffiliated issuers | 2,684,032 | 2,616,137 | 894,420 | |||||||||
Total investment income | 2,687,076 | 2,616,626 | 895,226 | |||||||||
Expenses: | ||||||||||||
Investment advisory fees | 2,232,523 | 3,139,223 | 1,948,216 | |||||||||
Shareholder servicing fees | 209,874 | 134,024 | 186,502 | |||||||||
Fund administration fees | 38,492 | 30,722 | 19,086 | |||||||||
Fund accounting fees | 27,139 | 26,758 | 22,768 | |||||||||
Reports to shareholders | 33,965 | 25,194 | 26,424 | |||||||||
Custody fees | 12,095 | 36,956 | 32,441 | |||||||||
Federal and state registration fees | 28,139 | 13,381 | 15,305 | |||||||||
Legal fees | 7,799 | 7,055 | 4,545 | |||||||||
Trustees’ fees | 12,244 | 11,713 | 7,424 | |||||||||
Dividends on securities sold short | 622,513 | — | — | |||||||||
Interest | 145,934 | 1,933 | 1,238 | |||||||||
Audit fees and other expenses | 20,259 | 26,354 | 22,932 | |||||||||
Total expenses before reimbursement | 3,390,976 | 3,453,313 | 2,286,881 | |||||||||
Reimbursement of expenses by Advisor | — | — | (37,707 | ) | ||||||||
Net Expenses | 3,390,976 | 3,453,313 | 2,249,174 | |||||||||
Net Investment Income (Loss) | (703,900 | ) | (836,687 | ) | (1,353,948 | ) | ||||||
Realized and Unrealized Gain (Loss): | ||||||||||||
Net realized gain (loss) on investments and foreign currency translations | ||||||||||||
Unaffiliated issuers | 23,395,450 | 5,789,006 | 13,842,319 | |||||||||
Affiliated issuers3 | — | — | — | |||||||||
Net realized gain on options written | 2,619,432 | — | 678,440 | |||||||||
Net realized loss on short positions | (6,268,706 | ) | — | — | ||||||||
Realized foreign capital gains taxes | — | — | (40,212 | ) | ||||||||
Change in unrealized appreciation (depreciation) | 40,306,626 | 71,963,952 | 19,409,992 | |||||||||
Change in deferred foreign capital gains taxes | — | 204,251 | 275,059 | |||||||||
Net gain (loss) on investments | 60,052,802 | 77,957,209 | 34,165,598 | |||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 59,348,902 | $ | 77,120,522 | $ | 32,811,650 | ||||||
| 1 | Formerly known as Wasatch-1st Source Long/Short Fund. |
| 2 | Net of $2,250, $36,004, $18,850, $35,878, $0, $4,421, $1,720, $0 and $0 in foreign withholding taxes, respectively. |
| 3 | See Note 10 for information on affiliated issuers. |
See Notes to Financial Statements.
96
Table of Contents
| FOR THE SIX MONTHS ENDED MARCH 31, 2011 (UNAUDITED) | ||
| SMALL CAP GROWTH FUND | SMALL CAP VALUE FUND | STRATEGIC INCOME FUND | ULTRA GROWTH FUND | INCOME FUND | U.S. TREASURY FUND | |||||||||||||||||
| $ | 5,410 | $ | 433 | $ | 96 | $ | 667 | $ | 1,982,968 | $ | 3,415,228 | |||||||||||
| 7,730,483 | 1,302,074 | 434,513 | 818,178 | 89,193 | — | |||||||||||||||||
| 7,735,893 | 1,302,507 | 434,609 | 818,845 | 2,072,161 | 3,415,228 | |||||||||||||||||
| 6,828,985 | 1,711,523 | 81,004 | 1,242,642 | 368,975 | 395,306 | |||||||||||||||||
| 787,630 | 217,035 | 18,760 | 162,480 | 35,730 | 107,507 | |||||||||||||||||
| 130,067 | 21,780 | 2,205 | 20,316 | 12,842 | 15,175 | |||||||||||||||||
| 81,771 | 20,590 | 8,557 | 22,808 | 23,072 | 11,048 | |||||||||||||||||
| 134,340 | 34,905 | 1,783 | 23,420 | 4,552 | 14,105 | |||||||||||||||||
| 121,874 | 16,488 | 1,582 | 48,849 | 6,045 | 2,129 | |||||||||||||||||
| 45,838 | 11,955 | 11,628 | 40,503 | 10,550 | 17,030 | |||||||||||||||||
| 28,225 | 5,126 | 517 | 4,591 | 3,301 | 4,341 | |||||||||||||||||
| 44,871 | 8,661 | 808 | 6,920 | 5,413 | 7,059 | |||||||||||||||||
| — | — | — | — | — | �� | — | ||||||||||||||||
| 7,484 | 2,027 | 134 | 5,234 | — | — | |||||||||||||||||
| 48,594 | 24,548 | 13,632 | 22,901 | 16,873 | 19,259 | |||||||||||||||||
| 8,259,679 | 2,074,638 | 140,610 | 1,600,664 | 487,353 | 592,959 | |||||||||||||||||
| — | — | (30,542 | ) | — | — | — | ||||||||||||||||
| 8,259,679 | 2,074,638 | 110,068 | 1,600,664 | 487,353 | 592,959 | |||||||||||||||||
| (523,786 | ) | (772,131 | ) | 324,541 | (781,819 | ) | 1,584,808 | 2,822,269 | ||||||||||||||
| 59,049,149 | 3,823,879 | 700,403 | 30,273,363 | 449,020 | (2,530,315 | ) | ||||||||||||||||
| 1,744,165 | — | — | — | — | — | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| — | (65,135 | ) | — | — | — | — | ||||||||||||||||
| | 211,844,698 | | 49,802,008 | 2,768,232 | 10,629,442 | (3,481,392 | ) | (25,382,598 | ) | |||||||||||||
| 269,895 | 392,213 | — | 34,693 | — | — | |||||||||||||||||
| 272,907,907 | 53,952,965 | 3,468,635 | 40,937,498 | (3,032,372 | ) | (27,912,913 | ) | |||||||||||||||
| $ | 272,384,121 | $ | 53,180,834 | $ | 3,793,176 | $ | 40,155,679 | $ | (1,447,564 | ) | $ | (25,090,644 | ) | |||||||||
97
Table of Contents
| WASATCH FUNDS — Statements of Changes in Net Assets | ||
| CORE GROWTH FUND | EMERGING MARKETS SMALL CAP FUND | |||||||||||||||
| Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (1,305,099 | ) | $ | 62,960 | $ | (2,804,013 | ) | $ | 1,225,201 | ||||||
Net realized gain on investments and foreign | 14,655,490 | 995,642 | 5,048,087 | 7,457,199 | ||||||||||||
Net realized gain on options written | — | — | — | — | ||||||||||||
Net realized gain on short positions | — | — | — | — | ||||||||||||
Change in unrealized appreciation on | 79,607,646 | 54,501,664 | 6,089,431 | 70,751,669 | ||||||||||||
Net increase in net assets resulting from operations | 92,958,037 | 55,560,266 | 8,333,505 | 79,434,069 | ||||||||||||
Dividends paid from: | ||||||||||||||||
Net investment income | — | (87,230 | ) | (86,408 | ) | (379,097 | ) | |||||||||
Net realized gains | — | — | — | — | ||||||||||||
| — | (87,230 | ) | (86,408 | ) | (379,097 | ) | ||||||||||
Capital share transactions: | ||||||||||||||||
Shares sold | 36,825,334 | 68,856,248 | 643,880,856 | 384,572,278 | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | 84,321 | 80,915 | 369,142 | ||||||||||||
Shares redeemed | (54,240,737 | ) | (115,743,132 | ) | (394,485,914 | ) | (68,120,691 | ) | ||||||||
Redemption fees | 5,685 | 22,210 | 344,525 | 386,082 | ||||||||||||
Net increase (decrease) | (17,409,718 | ) | (46,780,353 | ) | 249,820,382 | 317,206,811 | ||||||||||
Total increase in net assets | 75,548,319 | 8,692,683 | 258,067,479 | 396,261,783 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 418,641,713 | 409,949,030 | 446,751,155 | 50,489,372 | ||||||||||||
End of period | $ | 494,190,032 | $ | 418,641,713 | $ | 704,818,634 | $ | 446,751,155 | ||||||||
Undistributed net investment income (loss) included in | $ | 1,331,374 | $ | 2,636,473 | $ | (3,008,245 | ) | $ | (117,824 | ) | ||||||
Capital share transactions — shares: | ||||||||||||||||
Shares sold | 1,086,210 | 2,422,565 | 259,907,726 | 191,206,047 | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | 3,122 | 32,217 | 210,938 | ||||||||||||
Shares redeemed | (1,599,776 | ) | (4,288,991 | ) | (164,471,811 | ) | (35,258,335 | ) | ||||||||
Net increase (decrease) in shares outstanding | (513,566 | ) | (1,863,304 | ) | 95,468,132 | 156,158,650 | ||||||||||
See Notes to Financial Statements.
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| MARCH 31, 2011 | ||
| GLOBAL OPPORTUNITIES FUND | GLOBAL SCIENCE & TECHNOLOGY FUND | HERITAGE GROWTH FUND | ||||||||||||||||||||
| Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||||||
| $ | (1,087,513 | ) | $ | (1,210,183 | ) | $ | (332,703 | ) | $ | (461,039 | ) | $ | 19,142 | $ | 627,348 | |||||||
| | 11,389,403 | | 9,849,600 | 7,413,683 | 10,226,634 | 3,710,562 | 2,847,249 | |||||||||||||||
| — | — | — | — | — | 630 | |||||||||||||||||
| — | — | 1,201 | — | — | — | |||||||||||||||||
| | 36,517,209 | | 24,919,757 | 4,082,001 | 2,966,542 | 10,382,298 | 8,005,190 | |||||||||||||||
| 46,819,099 | 33,559,174 | 11,164,182 | 12,732,137 | 14,112,002 | 11,480,417 | |||||||||||||||||
| — | (261,705 | ) | — | (79,109 | ) | (659,028 | ) | (499,403 | ) | |||||||||||||
| (9,401,467 | ) | (3,194,663 | ) | — | — | — | — | |||||||||||||||
| (9,401,467 | ) | (3,456,368 | ) | — | (79,109 | ) | (659,028 | ) | (499,403 | ) | ||||||||||||
| 78,811,501 | 110,079,205 | 6,508,935 | 6,840,235 | 3,900,446 | 7,721,063 | |||||||||||||||||
| 9,039,015 | 3,250,108 | — | 77,070 | 632,899 | 482,444 | |||||||||||||||||
| (29,676,287 | ) | (25,925,621 | ) | (6,754,060 | ) | (13,346,871 | ) | (7,904,874 | ) | (18,106,546 | ) | |||||||||||
| 5,159 | 12,260 | 6,574 | 3,581 | 314 | 1,849 | |||||||||||||||||
| 58,179,388 | 87,415,952 | (238,551 | ) | (6,425,985 | ) | (3,371,215 | ) | (9,901,190 | ) | |||||||||||||
| 95,597,020 | 117,518,758 | 10,925,631 | 6,227,043 | 10,081,759 | 1,079,824 | |||||||||||||||||
| 234,903,807 | 117,385,049 | 65,766,936 | 59,539,893 | 78,273,635 | 77,193,811 | |||||||||||||||||
| $ | 330,500,827 | $ | 234,903,807 | $ | 76,692,567 | $ | 65,766,936 | $ | 88,355,394 | $ | 78,273,635 | |||||||||||
| $ | (1,903,551 | ) | $ | (816,038 | ) | $ | (332,668 | ) | $ | 35 | $ | 18,978 | $ | 658,864 | ||||||||
| 18,521,646 | 30,762,192 | 426,738 | 551,173 | 334,884 | 790,897 | |||||||||||||||||
| 2,126,627 | 947,553 | — | 6,565 | 53,850 | 50,677 | |||||||||||||||||
| (7,006,647 | ) | (7,268,106 | ) | (450,264 | ) | (1,096,838 | ) | (681,758 | ) | (1,846,641 | ) | |||||||||||
| 13,641,626 | 24,441,639 | (23,526 | ) | (539,100 | ) | (293,024 | ) | (1,005,067 | ) | |||||||||||||
99
Table of Contents
| WASATCH FUNDS — Statements of Changes in Net Assets (continued) | ||
| INTERNATIONAL GROWTH FUND | INTERNATIONAL OPPORTUNITIES FUND | |||||||||||||||
| Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (1,698,028 | ) | $ | 192,038 | $ | (1,115,710 | ) | $ | (746,874 | ) | |||||
Net realized gain (loss) on investments and foreign | 43,297,319 | 13,757,148 | 20,086,349 | 15,112,361 | ||||||||||||
Net realized gain on options written | — | — | — | — | ||||||||||||
Net realized loss on short positions | — | — | — | — | ||||||||||||
Change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations | (14,578,555 | ) | 48,154,832 | (6,890,694 | ) | 19,179,326 | ||||||||||
Net increase in net assets resulting from operations | 27,020,736 | 62,104,018 | 12,079,945 | 33,544,813 | ||||||||||||
Dividends paid from: | ||||||||||||||||
Net investment income | — | — | — | (1,049,066 | ) | |||||||||||
Net realized gains | — | — | (4,411,467 | ) | — | |||||||||||
| — | — | (4,411,467 | ) | (1,049,066 | ) | |||||||||||
Capital share transactions: | ||||||||||||||||
Shares sold | 142,853,798 | 92,481,514 | 42,936,901 | 56,143,842 | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | — | 4,358,588 | 1,032,263 | ||||||||||||
Shares redeemed | (159,501,524 | ) | (42,375,378 | ) | (24,764,420 | ) | (31,367,310 | ) | ||||||||
Redemption fees | 183,916 | 10,085 | 6,113 | 17,074 | ||||||||||||
Net increase (decrease) | (16,463,810 | ) | 50,116,221 | 22,537,182 | 25,825,869 | |||||||||||
Total increase in net assets | 10,556,926 | 112,220,239 | 30,205,660 | 58,321,616 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 285,445,968 | 173,225,729 | 152,177,570 | 93,855,954 | ||||||||||||
End of period | $ | 296,002,894 | $ | 285,445,968 | $ | 182,383,230 | $ | 152,177,570 | ||||||||
Undistributed net investment income (loss) included in | $ | (1,499,936 | ) | $ | 198,092 | $ | (1,767,970 | ) | $ | (652,260 | ) | |||||
Capital share transactions — shares: | ||||||||||||||||
Shares sold | 7,267,916 | 5,611,720 | 16,271,525 | 25,386,991 | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | — | 1,689,375 | 491,554 | ||||||||||||
Shares redeemed | (8,148,335 | ) | (2,767,634 | ) | (9,454,407 | ) | (14,333,524 | ) | ||||||||
Net increase (decrease) in shares outstanding | (880,419 | ) | 2,844,086 | 8,506,493 | 11,545,021 | |||||||||||
| 1 | Formerly known as Wasatch-1st Source Income Equity Fund. |
| 2 | Formerly known as Wasatch-1st Source Long/Short Fund. |
See Notes to Financial Statements.
100
Table of Contents
| MARCH 31, 2011 | ||
| LARGE CAP VALUE FUND1 | LONG/SHORT FUND2 | MICRO CAP FUND | ||||||||||||||||||||
| Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||||||
| $ | 9,612,368 | $ | 21,149,108 | $ | (703,900 | ) | $ | 61,805 | $ | (836,687 | ) | $ | (3,041,042 | ) | ||||||||
| | 22,971,293 | | 32,788,451 | 23,395,450 | 7,401,409 | 5,789,006 | (1,922,995 | ) | ||||||||||||||
| — | — | 2,619,432 | 4,803,888 | — | — | |||||||||||||||||
| — | — | (6,268,706 | ) | (6,388,985 | ) | — | — | |||||||||||||||
| 241,311,881 | 39,555,366 | 40,306,626 | 3,599,357 | 72,168,203 | 41,333,815 | |||||||||||||||||
| 273,895,542 | 93,492,925 | 59,348,902 | 9,477,474 | 77,120,522 | 36,369,778 | |||||||||||||||||
| (9,349,975 | ) | (21,589,760 | ) | (85,696 | ) | (98,009 | ) | — | — | |||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| (9,349,975 | ) | (21,589,760 | ) | (85,696 | ) | (98,009 | ) | — | — | |||||||||||||
| 209,565,865 | 559,640,781 | 279,030,351 | 218,506,133 | 20,936,704 | 23,412,191 | |||||||||||||||||
| 8,852,225 | 19,988,994 | 76,331 | 86,180 | — | — | |||||||||||||||||
| (255,141,327 | ) | (415,969,989 | ) | (55,774,542 | ) | (73,900,820 | ) | (36,621,281 | ) | (48,782,919 | ) | |||||||||||
| 12,356 | 42,087 | 10,294 | 56,794 | 3,526 | 14,832 | |||||||||||||||||
| (36,710,881 | ) | 163,701,873 | 223,342,434 | 144,748,287 | (15,681,051 | ) | (25,355,896 | ) | ||||||||||||||
| 227,834,686 | 235,605,038 | 282,605,640 | 154,127,752 | 61,439,471 | 11,013,882 | |||||||||||||||||
| 1,621,112,754 | 1,385,507,716 | 300,254,736 | 146,126,984 | 283,551,260 | 272,537,378 | |||||||||||||||||
| $ | 1,848,947,440 | $ | 1,621,112,754 | $ | 582,860,376 | $ | 300,254,736 | $ | 344,990,731 | $ | 283,551,260 | |||||||||||
| $ | (68,696 | ) | $ | (331,089 | ) | $ | (740,739 | ) | $ | 48,857 | $ | (883,129 | ) | $ | (46,442 | ) | ||||||
| 14,903,062 | 44,453,574 | 21,785,409 | 18,930,449 | 4,024,264 | 5,634,138 | |||||||||||||||||
| 620,098 | 1,621,951 | 6,053 | 7,406 | — | — | |||||||||||||||||
| (18,327,452 | ) | (33,497,030 | ) | (4,396,968 | ) | (6,490,271 | ) | (7,086,452 | ) | (11,800,279 | ) | |||||||||||
| (2,804,292 | ) | 12,578,495 | 17,394,494 | 12,447,584 | (3,062,188 | ) | (6,166,141 | ) | ||||||||||||||
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| WASATCH FUNDS — Statements of Changes in Net Assets (continued) | ||
| MICRO CAP VALUE FUND | SMALL CAP GROWTH FUND | |||||||||||||||
Six Months Ended | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (1,353,948 | ) | $ | (2,203,762 | ) | $ | (523,786 | ) | $ | (6,990,560 | ) | ||||
Net realized gain on investments and foreign | 13,802,107 | 19,739,412 | 60,793,314 | 30,868,546 | ||||||||||||
Net realized gain on options written | 678,440 | 866,253 | — | — | ||||||||||||
Net realized gain on short positions | — | — | — | — | ||||||||||||
Change in unrealized appreciation (depreciation) on | 19,685,051 | (1,084,802 | ) | 212,114,593 | 148,574,152 | |||||||||||
Net increase in net assets resulting from operations | 32,811,650 | 17,317,101 | 272,384,121 | 172,452,138 | ||||||||||||
Dividends paid from: | ||||||||||||||||
Net investment income | — | (569,692 | ) | — | — | |||||||||||
Net realized gains | — | — | — | — | ||||||||||||
| — | (569,692 | ) | — | — | ||||||||||||
Capital share transactions: | ||||||||||||||||
Shares sold | 13,033,898 | 100,096,662 | 321,928,733 | 328,975,735 | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | 551,439 | — | — | ||||||||||||
Shares redeemed | (23,022,775 | ) | (47,056,986 | ) | (116,810,819 | ) | (200,748,783 | ) | ||||||||
Redemption fees | 2,538 | 31,954 | 71,448 | 90,163 | ||||||||||||
Net increase (decrease) | (9,986,339 | ) | 53,623,069 | 205,189,362 | 128,317,115 | |||||||||||
Total increase (decrease) in net assets | 22,825,311 | 70,370,478 | 477,573,483 | 300,769,253 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 185,586,871 | 115,216,393 | 1,110,087,188 | 809,317,935 | ||||||||||||
End of period | $ | 208,412,182 | $ | 185,586,871 | $ | 1,587,660,671 | $ | 1,110,087,188 | ||||||||
Undistributed net investment income (loss) included in | $ | (1,816,243 | ) | $ | (462,295 | ) | $ | (638,191 | ) | $ | (114,405 | ) | ||||
Capital share transactions — shares: | ||||||||||||||||
Shares sold | 4,981,457 | 43,931,594 | 8,307,517 | 10,668,620 | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | 252,953 | — | — | ||||||||||||
Shares redeemed | (8,762,869 | ) | (20,736,580 | ) | (3,003,522 | ) | (6,554,978 | ) | ||||||||
Net increase (decrease) in shares outstanding | (3,781,412 | ) | 23,447,967 | 5,303,995 | 4,113,642 | |||||||||||
See Notes to Financial Statements.
102
Table of Contents
| MARCH 31, 2011 | ||
| SMALL CAP VALUE FUND | STRATEGIC INCOME FUND | ULTRA GROWTH FUND | ||||||||||||||||||||
| Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||||||
| $ | (772,131 | ) | $ | (487,862 | ) | $ | 324,541 | $ | 784,721 | $ | (781,819 | ) | $ | (1,434,361 | ) | |||||||
| 3,758,744 | 19,593,691 | 700,403 | 495,507 | 30,273,363 | 12,230,959 | |||||||||||||||||
| — | — | — | 18,481 | — | — | |||||||||||||||||
| — | — | — | 375,162 | — | — | |||||||||||||||||
| 50,194,221 | 5,715,574 | 2,768,232 | 902,027 | 10,664,135 | 21,071,258 | |||||||||||||||||
| 53,180,834 | 24,821,403 | 3,793,176 | 2,575,898 | 40,155,679 | 31,867,856 | |||||||||||||||||
| — | — | (356,609 | ) | (678,070 | ) | — | — | |||||||||||||||
| — | — | — | — | — | — | |||||||||||||||||
| — | — | (356,609 | ) | (678,070 | ) | — | — | |||||||||||||||
| 17,351,240 | 19,624,422 | 8,838,097 | 2,287,938 | 44,235,227 | 55,395,722 | |||||||||||||||||
| — | — | 348,082 | 660,289 | — | — | |||||||||||||||||
| (40,545,626 | ) | (51,243,676 | ) | (3,075,840 | ) | (3,039,434 | ) | (74,999,455 | ) | (29,986,296 | ) | |||||||||||
| 922 | 11,670 | 2,308 | 307 | 27,304 | 4,063 | |||||||||||||||||
| (23,193,464 | ) | (31,607,584 | ) | 6,112,647 | (90,900 | ) | (30,736,924 | ) | 25,413,489 | |||||||||||||
| 29,987,370 | (6,786,181 | ) | 9,549,214 | 1,806,928 | 9,418,755 | 57,281,345 | ||||||||||||||||
| 211,571,490 | 218,357,671 | 19,516,975 | 17,710,047 | 178,565,581 | 121,284,236 | |||||||||||||||||
| $ | 241,558,860 | $ | 211,571,490 | $ | 29,066,189 | $ | 19,516,975 | $ | 187,984,336 | $ | 178,565,581 | |||||||||||
| $ | (56,518 | ) | $ | 715,613 | $ | 34,295 | $ | 66,363 | $ | (1,540,874 | ) | $ | (759,055 | ) | ||||||||
| 4,856,067 | 6,683,775 | 1,043,051 | 320,791 | 2,057,467 | 3,045,498 | |||||||||||||||||
| — | — | 41,842 | 93,068 | — | — | |||||||||||||||||
| (11,661,282 | ) | (17,525,168 | ) | (367,677 | ) | (429,440 | ) | (3,298,681 | ) | (1,773,172 | ) | |||||||||||
| (6,805,215 | ) | (10,841,393 | ) | 717,216 | (15,581 | ) | (1,241,214 | ) | 1,272,326 | |||||||||||||
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| WASATCH FUNDS — Statements of Changes in Net Assets (continued) | MARCH 31, 2011 | |
| INCOME FUND | U.S. TREASURY FUND | |||||||||||||||
| Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | Six Months Ended March 31, 2011 (Unaudited) | Year Ended September 30, 2010 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 1,584,808 | $ | 3,609,311 | $ | 2,822,269 | $ | 5,458,981 | ||||||||
Net realized gain (loss) on investments and foreign | 449,020 | 940,819 | (2,530,315 | ) | 10,365,841 | |||||||||||
Change in unrealized appreciation (depreciation) on | (3,481,392 | ) | 2,872,059 | (25,382,598 | ) | 4,266,518 | ||||||||||
Net increase (decrease) in net assets resulting from operations | (1,447,564 | ) | 7,422,189 | (25,090,644 | ) | 20,091,340 | ||||||||||
Dividends paid from: | ||||||||||||||||
Net investment income | (1,599,486 | ) | (3,572,685 | ) | (2,823,810 | ) | (5,454,808 | ) | ||||||||
Net realized gains | — | — | (10,250,028 | ) | (4,576,837 | ) | ||||||||||
| (1,599,486 | ) | (3,572,685 | ) | (13,073,838 | ) | (10,031,645 | ) | |||||||||
Capital share transactions: | ||||||||||||||||
Shares sold | 20,285,240 | 45,774,175 | 43,945,555 | 91,924,206 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 1,321,140 | 2,972,350 | 11,794,979 | 9,249,903 | ||||||||||||
Shares redeemed | (24,211,088 | ) | (29,000,964 | ) | (63,432,184 | ) | (64,561,485 | ) | ||||||||
Redemption fees | 1,010 | 3,655 | 84,902 | 83,717 | ||||||||||||
Net increase (decrease) | (2,603,698 | ) | 19,749,216 | (7,606,748 | ) | 36,696,341 | ||||||||||
Total increase (decrease) in net assets | (5,650,748 | ) | 23,598,720 | (45,771,230 | ) | 46,756,036 | ||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 138,095,109 | 114,496,389 | 200,854,581 | 154,098,545 | ||||||||||||
End of period | $ | 132,444,361 | $ | 138,095,109 | $ | 155,083,351 | $ | 200,854,581 | ||||||||
Undistributed net investment income included in | $ | 8,893 | $ | 23,571 | $ | 14,810 | $ | 16,351 | ||||||||
Capital share transactions — shares: | ||||||||||||||||
Shares sold | 1,988,473 | 4,502,902 | 3,154,292 | 5,800,234 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 129,615 | 292,433 | 876,850 | 614,469 | ||||||||||||
Shares redeemed | (2,374,583 | ) | (2,850,794 | ) | (4,264,381 | ) | (4,173,981 | ) | ||||||||
Net increase (decrease) in shares outstanding | (256,495 | ) | 1,944,541 | (233,239 | ) | 2,240,722 | ||||||||||
See Notes to Financial Statements.
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Table of Contents
| WASATCH FUNDS — Financial Highlights | MARCH 31, 2011 | |
| CORE GROWTH FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 29.95 | $ | 25.88 | $ | 26.38 | $ | 42.98 | $ | 41.08 | $ | 43.92 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.09 | ) | 0.03 | — | 1 | 0.19 | (0.05 | ) | 0.17 | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 6.84 | 4.05 | (0.23 | ) | (8.98 | ) | 5.65 | 0.90 | ||||||||||||||||
Total from investment operations | 6.75 | 4.08 | (0.23 | ) | (8.79 | ) | 5.60 | 1.07 | ||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | (0.01 | ) | (0.27 | ) | — | (0.14 | ) | (0.63 | ) | ||||||||||||||
Distributions from net realized gains | — | — | — | (7.81 | ) | (3.56 | ) | (3.28 | ) | |||||||||||||||
Total distributions | — | (0.01 | ) | (0.27 | ) | (7.81 | ) | (3.70 | ) | (3.91 | ) | |||||||||||||
Net asset value, end of period | $ | 36.70 | $ | 29.95 | $ | 25.88 | $ | 26.38 | $ | 42.98 | $ | 41.08 | ||||||||||||
Total return2 | 22.54% | 15.75% | (0.45)% | (24.82)% | 14.28% | 2.46% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 494,190 | $ | 418,642 | $ | 409,949 | $ | 645,769 | $ | 1,250,618 | $ | 1,381,027 | ||||||||||||
Ratio of expenses to average net assets3 | 1.25% | 1.29% | 4 | 1.34% | 1.21% | 1.18% | 1.17% | |||||||||||||||||
Ratio of net investment income (loss) to average net assets3 | (0.56)% | 0.02% | 0.24% | 0.52% | (0.09)% | 0.38% | ||||||||||||||||||
Portfolio turnover rate2 | 10% | 19% | 30% | 44% | 54% | 42% | ||||||||||||||||||
| EMERGING MARKETS SMALL CAP FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | Period Ended September 30 | |||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 20085 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 2.37 | $ | 1.57 | $ | 1.24 | $ | 2.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | 0.01 | — | 1 | — | 1 | |||||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.12 | 0.80 | 0.33 | (0.76 | ) | |||||||||||||||||||
Total from investment operations | 0.11 | 0.81 | 0.33 | (0.76 | ) | |||||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | 1 | (0.01 | ) | — | 1 | — | 1 | ||||||||||||||||
Total distributions | — | 1 | (0.01 | ) | — | 1 | — | 1 | ||||||||||||||||
Net asset value, end of period | $ | 2.48 | $ | 2.37 | $ | 1.57 | $ | 1.24 | ||||||||||||||||
Total return2 | 4.65% | 51.69% | 26.80% | (37.88)% | ||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 704,819 | $ | 446,751 | $ | 50,489 | $ | 36,176 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 1.98% | 2.06% | 6 | 2.10% | 2.10% | |||||||||||||||||||
Before waivers and reimbursements3 | 2.15% | 2.39% | 6 | 3.03% | 2.67% | |||||||||||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | (0.79)% | 0.82% | 0.12% | 0.27% | ||||||||||||||||||||
Before waivers and reimbursements3 | (0.96)% | 0.49% | (0.81)% | (0.29)% | ||||||||||||||||||||
Portfolio turnover rate2 | 44% | 23% | 78% | 38% | ||||||||||||||||||||
| 1 | Represents amounts less than $.005 per share. |
| 2 | Not annualized for periods less than one year. |
| 3 | Annualized. |
| 4 | Includes extraordinary expenses of 0.01% (see Note 9). |
| 5 | Fund inception date was October 1, 2007. |
| 6 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
See Notes to Financial Statements.
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| WASATCH FUNDS — Financial Highlights (continued) | ||
| GLOBAL OPPORTUNITIES FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | Period Ended September 30 | |||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 20091 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 3.97 | $ | 3.38 | $ | 2.00 | ||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (0.01 | ) | (0.02 | ) | (0.01 | ) | ||||||||||||||||||
Net realized and unrealized gains on investments | 0.72 | 0.70 | 1.39 | |||||||||||||||||||||
Total from investment operations | 0.71 | 0.68 | 1.38 | |||||||||||||||||||||
Redemption fees (see Note 2) | — | 2 | — | 2 | — | 2 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | (0.01 | ) | — | ||||||||||||||||||||
Distributions from net realized gains | (0.14 | ) | (0.08 | ) | — | |||||||||||||||||||
Total distributions | (0.14 | ) | (0.09 | ) | — | |||||||||||||||||||
Net asset value, end of period | $ | 4.54 | $ | 3.97 | $ | 3.38 | ||||||||||||||||||
Total return3 | 18.18% | 20.41% | 69.00% | |||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 330,501 | $ | 234,904 | $ | 117,385 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements4 | 2.05% | 2.25% | 5 | 2.25% | ||||||||||||||||||||
Before waivers and reimbursements4 | 2.05% | 2.33% | 5 | 2.61% | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements4 | (0.76)% | (0.73)% | (0.67)% | |||||||||||||||||||||
Before waivers and reimbursements4 | (0.76)% | (0.81)% | (1.03)% | |||||||||||||||||||||
Portfolio turnover rate3 | 14% | 23% | 22% | |||||||||||||||||||||
| GLOBAL SCIENCE & TECHNOLOGY FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 13.65 | $ | 11.12 | $ | 10.31 | $ | 17.69 | $ | 13.97 | $ | 12.98 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (0.07 | ) | (0.10 | ) | (0.12 | ) | (0.25 | ) | (0.12 | ) | (0.14 | ) | ||||||||||||
Net realized and unrealized gains (losses) on investments | 2.42 | 2.65 | 0.93 | (5.65 | ) | 4.43 | 1.40 | |||||||||||||||||
Total from investment operations | 2.35 | 2.55 | 0.81 | (5.90 | ) | 4.31 | 1.26 | |||||||||||||||||
Redemption fees (see Note 2) | — | 2 | — | 2 | — | 2 | — | 2 | — | 2 | — | 2 | ||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | (0.02 | ) | — | — | — | — | |||||||||||||||||
Distributions from net realized gains | — | — | — | (1.48 | ) | (0.59 | ) | (0.27 | ) | |||||||||||||||
Total distributions | — | (0.02 | ) | — | (1.48 | ) | (0.59 | ) | (0.27 | ) | ||||||||||||||
Net asset value, end of period | $ | 16.00 | $ | 13.65 | $ | 11.12 | $ | 10.31 | $ | 17.69 | $ | 13.97 | ||||||||||||
Total return3 | 17.22% | 22.91% | 7.86% | (36.07)% | 31.63% | 9.81% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 76,693 | $ | 65,767 | $ | 59,540 | $ | 82,164 | $ | 204,142 | $ | 126,359 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements4 | 1.95% | 1.96% | 6 | 1.95% | 1.92% | 1.85% | 1.94% | |||||||||||||||||
Before waivers and reimbursements4 | 1.95% | 2.05% | 6 | 2.14% | 1.92% | 1.85% | 1.94% | |||||||||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements4 | (0.93)% | (0.74)% | (0.88)% | (1.24)% | (0.97)% | (1.15)% | ||||||||||||||||||
Before waivers and reimbursements4 | (0.93)% | (0.83)% | (1.07)% | (1.24)% | (0.97)% | (1.15)% | ||||||||||||||||||
Portfolio turnover rate3 | 43% | 74% | 41% | 89% | 78% | 58% | ||||||||||||||||||
| 1 | Fund inception day was November 17, 2008. |
| 2 | Represents amounts less than $.005 per share. |
| 3 | Not annualized for periods less than one year. |
| 4 | Annualized. |
| 5 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
| 6 | Includes extraordinary expenses of 0.01% (see Note 9). |
See Notes to Financial Statements.
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| MARCH 31, 2011 | ||
| HERITAGE GROWTH FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 10.70 | $ | 9.28 | $ | 9.00 | $ | 12.57 | $ | 11.40 | $ | 11.43 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | — | 1 | 0.09 | 0.06 | 0.06 | (0.01 | ) | — | 1 | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.97 | 1.39 | 0.26 | (2.57 | ) | 1.53 | 0.28 | |||||||||||||||||
Total from investment operations | 1.97 | 1.48 | 0.32 | (2.51 | ) | 1.52 | 0.28 | |||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.06 | ) | (0.02 | ) | — | �� | — | 1 | (0.01 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.02 | ) | (1.06 | ) | (0.35 | ) | (0.30 | ) | ||||||||||||||
Total distributions | (0.09 | ) | (0.06 | ) | (0.04 | ) | (1.06 | ) | (0.35 | ) | (0.31 | ) | ||||||||||||
Net asset value, end of period | $ | 12.58 | $ | 10.70 | $ | 9.28 | $ | 9.00 | $ | 12.57 | $ | 11.40 | ||||||||||||
Total return2 | 18.50% | 16.06% | 3.74% | (21.54)% | 13.59% | 2.46% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 88,355 | $ | 78,274 | $ | 77,194 | $ | 95,414 | $ | 208,918 | $ | 244,380 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 0.95% | 0.96% | 4 | 0.95% | 0.95% | 0.95% | 0.95% | |||||||||||||||||
Before waivers and reimbursements3 | 1.06% | 1.11% | 4 | 1.21% | 1.01% | 0.95% | 0.95% | |||||||||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 0.05% | 0.81% | 0.74% | 0.44% | (0.06)% | 0.01% | ||||||||||||||||||
Before waivers and reimbursements3 | (0.06)% | 0.66% | 0.48% | 0.38% | (0.06)% | 0.01% | ||||||||||||||||||
Portfolio turnover rate2 | 19% | 36% | 33% | 48% | 56% | 54% | ||||||||||||||||||
| INTERNATIONAL GROWTH FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 18.66 | $ | 13.91 | $ | 11.83 | $ | 24.42 | $ | 21.83 | $ | 18.50 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.12 | ) | 0.02 | (0.13 | ) | (0.28 | ) | 0.03 | (0.09 | ) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.98 | 4.73 | 2.24 | (9.19 | ) | 6.61 | 3.42 | |||||||||||||||||
Total from investment operations | 1.86 | 4.75 | 2.11 | (9.47 | ) | 6.64 | 3.33 | |||||||||||||||||
Redemption fees (see Note 2) | 0.01 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | |||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | — | (0.03 | ) | (0.68 | ) | — | — | ||||||||||||||||
Distributions from net realized gains | — | — | — | (2.44 | ) | (4.05 | ) | — | 1 | |||||||||||||||
Total distributions | — | — | (0.03 | ) | (3.12 | ) | (4.05 | ) | — | 1 | ||||||||||||||
Net asset value, end of period | $ | 20.53 | $ | 18.66 | $ | 13.91 | $ | 11.83 | $ | 24.42 | $ | 21.83 | ||||||||||||
Total return2 | 10.02% | 34.15% | 18.03% | (44.01)% | 34.02% | 18.00% | 5 | |||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 296,003 | $ | 285,446 | $ | 173,226 | $ | 194,780 | $ | 534,903 | $ | 383,135 | ||||||||||||
Ratio of expenses to average net assets3 | 1.72% | 1.86% | 6 | 1.94% | 1.83% | 1.76% | 1.78% | |||||||||||||||||
Ratio of net investment income (loss) to average net assets3 | (0.96)% | 0.10% | 0.03% | (0.15)% | 0.11% | (0.42)% | ||||||||||||||||||
Portfolio turnover rate2 | 57% | 44% | 56% | 44% | 60% | 64% | ||||||||||||||||||
| 1 | Represents amounts less than $.005 per share. |
| 2 | Not annualized for periods less than one year. |
| 3 | Annualized. |
| 4 | Includes extraordinary expenses of 0.01% (see Note 9). |
| 5 | In 2006, the Fund’s total return included a voluntary reimbursement by the Advisor for an amount relating to an incorrect settlement that had no impact on the total return. |
| 6 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
See Notes to Financial Statements.
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| WASATCH FUNDS — Financial Highlights (continued) | ||
| INTERNATIONAL OPPORTUNITIES FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 2.57 | $ | 1.97 | $ | 1.60 | $ | 3.65 | $ | 2.71 | $ | 2.19 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.02 | ) | (0.01 | ) | 0.01 | 0.07 | (0.01 | ) | (0.01 | ) | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.22 | 0.63 | 0.36 | (1.45 | ) | 1.13 | 0.53 | |||||||||||||||||||||
Total from investment operations | 0.20 | 0.62 | 0.37 | (1.38 | ) | 1.12 | 0.52 | |||||||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | — | (0.02 | ) | — | 1 | (0.14 | ) | — | 1 | — | ||||||||||||||||||
Distributions from net realized gains | (0.07 | ) | — | — | (0.53 | ) | (0.18 | ) | — | |||||||||||||||||||
Total distributions | (0.07 | ) | (0.02 | ) | — | (0.67 | ) | (0.18 | ) | — | ||||||||||||||||||
Net asset value, end of period | $ | 2.70 | $ | 2.57 | $ | 1.97 | $ | 1.60 | $ | 3.65 | $ | 2.71 | ||||||||||||||||
Total return2 | 7.89% | 31.71% | 23.60% | (45.33)% | 42.73% | 23.74% | ||||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 182,383 | $ | 152,178 | $ | 93,856 | $ | 55,691 | $ | 56,433 | $ | 36,839 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | 2.25% | 2.26% | 4 | 2.26% | 5 | 2.25% | 2.25% | 2.25% | ||||||||||||||||||||
Before waivers and reimbursements3 | 2.52% | 2.62% | 4 | 2.79% | 5 | 2.59% | 2.51% | 2.62% | ||||||||||||||||||||
Ratio of net investment loss to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | (1.32)% | (0.60)% | (0.28)% | (0.09)% | (0.18)% | (0.29)% | ||||||||||||||||||||||
Before waivers and reimbursements3 | (1.59)% | (0.96)% | (0.81)% | (0.43)% | (0.44)% | (0.66)% | ||||||||||||||||||||||
Portfolio turnover rate2 | 47% | 51% | 69% | 63% | 54% | 43% | ||||||||||||||||||||||
| LARGE CAP VALUE FUND6 | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | Period Ended September 30 | Year Ended March 31 | ||||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 20087 | 2008 | 2007 | 2006 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 12.64 | $ | 11.97 | $ | 12.93 | $ | 14.44 | $ | 14.80 | $ | 14.14 | $ | 13.61 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.07 | 0.17 | 0.20 | 0.14 | 8 | 0.21 | 0.22 | 0.17 | ||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 2.09 | 0.67 | (0.96 | ) | (1.52 | ) | 0.31 | 1.66 | 2.10 | |||||||||||||||||||
Total from investment operations | 2.16 | 0.84 | (0.76 | ) | (1.38 | ) | 0.52 | 1.88 | 2.27 | |||||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | — | — | — | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.17 | ) | (0.20 | ) | (0.13 | ) | (0.21 | ) | (0.21 | ) | (0.18 | ) | ||||||||||||||
Distributions from net realized gains | — | — | — | — | (0.67 | ) | (1.01 | ) | (1.56 | ) | ||||||||||||||||||
Total distributions | (0.07 | ) | (0.17 | ) | (0.20 | ) | (0.13 | ) | (0.88 | ) | (1.22 | ) | (1.74 | ) | ||||||||||||||
Net asset value, end of period | $ | 14.73 | $ | 12.64 | $ | 11.97 | $ | 12.93 | $ | 14.44 | $ | 14.80 | $ | 14.14 | ||||||||||||||
Total return2 | 17.14 % | 7.07% | (5.63)% | (9.65)% | 3.22% | 13.69% | 17.72% | |||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,848,947 | $ | 1,621,113 | $ | 1,385,508 | $ | 780,384 | $ | 447,674 | $ | 167,133 | $ | 129,508 | ||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | 1.10% | 1.11% | 4 | 1.10% | 1.04% | 1.13% | 1.15% | 1.19% | ||||||||||||||||||||
Before waivers and reimbursements3 | 1.11% | 1.14% | 4 | 1.22% | 1.29% | 1.38% | 1.40% | 1.45% | ||||||||||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | 1.10% | 1.36% | 1.93% | 1.99% | 1.43% | 1.52% | 1.25% | |||||||||||||||||||||
Before waivers and reimbursements3 | 1.09% | 1.33% | 1.81% | 1.74% | 1.18% | 1.27% | 0.99% | |||||||||||||||||||||
Portfolio turnover rate2 | 13% | 17% | 16% | 5% | 36% | 26% | 37% | |||||||||||||||||||||
| 1 | Represents amounts less than $.005 per share. |
| 2 | Not annualized for periods less than one year. |
| 3 | Annualized. |
| 4 | Includes extraordinary expenses of 0.01% (see Note 9). |
| 5 | Includes interest expense of 0.01%. |
| 6 | Formerly known as Wasatch-1st Source Income Equity Fund. |
| 7 | Effective September 19, 2008, the Fund changed its fiscal year end to September 30. |
| 8 | Average shares method used in calculation. |
See Notes to Financial Statements.
108
Table of Contents
| MARCH 31, 2011 | ||
| LONG/SHORT FUND1 | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | Period Ended September 30 | Year Ended March 31 | ||||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 20082 | 2008 | 2007 | 2006 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 11.74 | $ | 11.13 | $ | 10.81 | $ | 11.27 | $ | 11.59 | $ | 11.21 | $ | 10.69 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.02 | ) | (0.01 | ) | 0.02 | 0.05 | 3 | 0.27 | 0.26 | 0.21 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.84 | 0.62 | 0.50 | (0.46 | ) | 0.02 | 0.90 | 0.71 | ||||||||||||||||||||
Total from investment operations | 1.82 | 0.61 | 0.52 | (0.41 | ) | 0.29 | 1.16 | 0.92 | ||||||||||||||||||||
Redemption fees (see Note 2) | — | 4 | — | 4 | — | 4 | — | — | — | — | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | — | 4 | — | 4 | (0.05 | ) | (0.05 | ) | (0.28 | ) | (0.28 | ) | (0.20 | ) | ||||||||||||||
Distributions from net realized gains | — | — | (0.15 | ) | — | (0.33 | ) | (0.50 | ) | (0.20 | ) | |||||||||||||||||
Total distributions | — | 4 | — | 4 | (0.20 | ) | (0.05 | ) | (0.61 | ) | (0.78 | ) | (0.40 | ) | ||||||||||||||
Net asset value, end of period | $ | 13.56 | $ | 11.74 | $ | 11.13 | $ | 10.81 | $ | 11.27 | $ | 11.59 | $ | 11.21 | ||||||||||||||
Total return5 | 15.53% | 5.52% | 5.35% | (3.66)% | 2.34% | 10.44% | 8.80% | |||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 582,860 | $ | 300,255 | $ | 146,127 | $ | 122,114 | $ | 87,410 | $ | 53,894 | $ | 29,831 | ||||||||||||||
Ratio of expenses to average net assets (including interest expense and dividend payments for securities sold short): | ||||||||||||||||||||||||||||
Net of waivers and reimbursements6 | 1.67% | 1.71% | 7 | 1.91% | 1.77% | 1.75% | 1.84% | 1.72% | ||||||||||||||||||||
Before waivers and reimbursements6 | 1.67% | 1.71% | 7 | 1.96% | 2.02% | 2.00% | 2.09% | 1.98% | ||||||||||||||||||||
Ratio of expenses to average net assets (excluding interest expense and dividend payments for securities sold short): | ||||||||||||||||||||||||||||
Net of waivers and reimbursements6 | 1.29% | 1.34% | 7 | 1.47% | 1.46% | 1.57% | 1.56% | 1.63% | ||||||||||||||||||||
Before waivers and reimbursements6 | 1.29% | 1.34% | 7 | 1.52% | 1.71% | 1.82% | 1.81% | 1.89% | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements6 | (0.35)% | 0.03% | 0.24% | 0.95% | 2.25% | 2.40% | 1.98% | |||||||||||||||||||||
Before waivers and reimbursements6 | (0.35)% | 0.03% | 0.19% | 0.70% | 2.00% | 2.15% | 1.72% | |||||||||||||||||||||
Portfolio turnover rate5 | 42% | 60% | 167% | 71% | 179% | 172% | 123% | |||||||||||||||||||||
| MICRO CAP FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 4.44 | $ | 3.89 | $ | 4.14 | $ | 7.19 | $ | 6.79 | $ | 7.58 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment loss | (0.01 | ) | (0.05 | ) | (0.03 | ) | (0.07 | ) | (0.09 | ) | (0.10 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.25 | 0.60 | (0.21 | ) | (1.81 | ) | 1.29 | 0.65 | ||||||||||||||||||||
Total from investment operations | 1.24 | 0.55 | (0.24 | ) | (1.88 | ) | 1.20 | 0.55 | ||||||||||||||||||||
Redemption fees (see Note 2) | — | 4 | — | 4 | — | 4 | — | 4 | — | 4 | — | 4 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | — | — | (0.01 | ) | — | — | — | |||||||||||||||||||||
Distributions from net realized gains | — | — | — | (1.17 | ) | (0.80 | ) | (1.34 | ) | |||||||||||||||||||
Total distributions | — | — | (0.01 | ) | (1.17 | ) | (0.80 | ) | (1.34 | ) | ||||||||||||||||||
Net asset value, end of period | $ | 5.68 | $ | 4.44 | $ | 3.89 | $ | 4.14 | $ | 7.19 | $ | 6.79 | ||||||||||||||||
Total return5 | 27.70% | 14.14% | (5.70)% | (30.46)% | 18.72% | 8.51% | ||||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 344,991 | $ | 283,551 | $ | 272,537 | $ | 359,394 | $ | 631,417 | $ | 583,901 | ||||||||||||||||
Ratio of expenses to average net assets6 | 2.15% | 2.18% | 8 | 2.24% | 2.16% | 2.14% | 2.14% | |||||||||||||||||||||
Ratio of net investment loss to average net assets6 | (0.52)% | (1.10)% | (0.96)% | (1.26)% | (1.25)% | (1.39)% | ||||||||||||||||||||||
Portfolio turnover rate5 | 15% | 34% | 46% | 54% | 48% | 46% | ||||||||||||||||||||||
| 1 | Formerly known as Wasatch-1st Source Long/Short Fund. |
| 2 | Effective September 19, 2008, the Fund changed its fiscal year end to September 30. |
| 3 | Average shares method used in calculation. |
| 4 | Represents amounts less than $.005 per share. |
| 5 | Not annualized for periods less than one year. |
| 6 | Annualized. |
| 7 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
| 8 | Includes interest expense of less than 0.01%. |
See Notes to Financial Statements.
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| WASATCH FUNDS — Financial Highlights (continued) | ||
| MICRO CAP VALUE FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 2.38 | $ | 2.11 | $ | 1.80 | $ | 2.98 | $ | 2.93 | $ | 2.72 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.03 | ) | ||||||||||||
Net realized and unrealized gains (losses) on investments | 0.45 | 0.30 | 0.33 | (0.75 | ) | 0.64 | 0.50 | |||||||||||||||||
Total from investment operations | 0.43 | 0.28 | 0.31 | (0.77 | ) | 0.61 | 0.47 | |||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | (0.01 | ) | — | — | — | — | |||||||||||||||||
Distributions from net realized gains | — | — | — | (0.41 | ) | (0.56 | ) | (0.26 | ) | |||||||||||||||
Total distributions | — | (0.01 | ) | — | (0.41 | ) | (0.56 | ) | (0.26 | ) | ||||||||||||||
Net asset value, end of period | $ | 2.81 | $ | 2.38 | $ | 2.11 | $ | 1.80 | $ | 2.98 | $ | 2.93 | ||||||||||||
Total return2 | 18.07% | 13.26% | 17.22% | (29.67)% | 22.84% | 18.89% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 208,412 | $ | 185,587 | $ | 115,216 | $ | 97,912 | $ | 120,039 | $ | 95,508 | ||||||||||||
Ratio of expenses to average net assets (including dividend payments for securities sold short): | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 2.25% | 2.26%4 | 2.26% | 2.25% | 2.25% | 2.25% | ||||||||||||||||||
Before waivers and reimbursements3 | 2.29% | 2.37%4 | 2.46% | 2.35% | 2.30% | 2.33% | ||||||||||||||||||
Ratio of expenses to average net assets (excluding dividend payments for securities sold short): | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 2.25% | 2.26%4 | 2.25% | 2.25% | 2.25% | 2.25% | ||||||||||||||||||
Before waivers and reimbursements3 | 2.29% | 2.37%4 | 2.45% | 2.35% | 2.30% | 2.33% | ||||||||||||||||||
Ratio of net investment loss to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | (1.35)% | (1.32)% | (1.36)% | (1.21)% | (1.06)% | (0.99)% | ||||||||||||||||||
Before waivers and reimbursements3 | (1.39)% | (1.43)% | (1.56)% | (1.31)% | (1.11)% | (1.07)% | ||||||||||||||||||
Portfolio turnover rate2 | 56% | 88% | 145% | 144% | 105% | 95% | ||||||||||||||||||
| SMALL CAP GROWTH FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 34.24 | $ | 28.59 | $ | 26.50 | $ | 40.10 | $ | 36.99 | $ | 41.23 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (0.01 | ) | (0.22 | ) | (0.12 | ) | (0.16 | ) | (0.25 | ) | (0.26 | ) | ||||||||||||
Net realized and unrealized gains (losses) on investments | 7.85 | 5.87 | 2.27 | (8.85 | ) | 6.28 | 0.84 | |||||||||||||||||
Total from investment operations | 7.84 | 5.65 | 2.15 | (9.01 | ) | 6.03 | 0.58 | |||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net realized gains | — | — | (0.06 | ) | (4.59 | ) | (2.92 | ) | (4.82 | ) | ||||||||||||||
Total distributions | — | — | �� | (0.06 | ) | (4.59 | ) | (2.92 | ) | (4.82 | ) | |||||||||||||
Net asset value, end of period | $ | 42.08 | $ | 34.24 | $ | 28.59 | $ | 26.50 | $ | 40.10 | $ | 36.99 | ||||||||||||
Total return2 | 22.90% | 19.76% | 8.20% | (25.42)% | 16.94% | 1.40% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,587,661 | $ | 1,110,087 | $ | 809,318 | $ | 735,546 | $ | 1,075,433 | $ | 1,234,978 | ||||||||||||
Ratio of expenses to average net assets3 | 1.21% | 1.27% | 5 | 1.29% | 1.21% | 1.19% | 1.18% | 6 | ||||||||||||||||
Ratio of net investment loss to average net assets3 | (0.08)% | (0.74)% | (0.60)% | (0.47)% | (0.52)% | (0.64)% | ||||||||||||||||||
Portfolio turnover rate2 | 12% | 17% | 52% | 51% | 43% | 41% | ||||||||||||||||||
| 1 | Represents amounts less than $.005 per share. |
| 2 | Not annualized for periods less than one year. |
| 3 | Annualized. |
| 4 | Includes extraordinary expenses of 0.01% (see Note 9). |
| 5 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
| 6 | In 2006, the Fund received a reimbursement of investment advisory fees, which had an impact on the Fund’s expense ratio of less than 0.01%. |
See Notes to Financial Statements.
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| MARCH 31, 2011 | ||
| SMALL CAP VALUE FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 3.08 | $ | 2.75 | $ | 2.82 | $ | 5.22 | $ | 5.29 | $ | 5.67 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | (0.01 | ) | (0.01 | ) | 0.01 | 0.01 | 0.05 | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.84 | 0.34 | (0.06 | ) | (1.11 | ) | 0.67 | 0.36 | ||||||||||||||||
Total from investment operations | 0.83 | 0.33 | (0.07 | ) | (1.10 | ) | 0.68 | 0.41 | ||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | — | — | (0.01 | ) | (0.04 | ) | (0.07 | ) | |||||||||||||||
Distributions from net realized gains | — | — | — | (1.29 | ) | (0.71 | ) | (0.72 | ) | |||||||||||||||
Total distributions | — | — | — | (1.30 | ) | (0.75 | ) | (0.79 | ) | |||||||||||||||
Net asset value, end of period | $ | 3.91 | $ | 3.08 | $ | 2.75 | $ | 2.82 | $ | 5.22 | $ | 5.29 | ||||||||||||
Total return2 | 26.95% | 12.00% | (2.48)% | (26.26)% | 13.32% | 7.88% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 241,559 | $ | 211,571 | $ | 218,358 | $ | 336,914 | $ | 660,637 | $ | 664,625 | ||||||||||||
Ratio of expenses to average net assets3 | 1.82% | 1.85% | 4 | 1.92% | 1.76% | 1.69% | 1.68% | |||||||||||||||||
Ratio of net investment income (loss) to average net assets3 | (0.68)% | (0.23)% | (0.33)% | 0.15% | 0.18% | 0.81% | ||||||||||||||||||
Portfolio turnover rate2 | 24% | 62% | 89% | 78% | 84% | 40% | ||||||||||||||||||
| STRATEGIC INCOME FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 20065 | ||||||||||||||||||
Net asset value, beginning of period | $ | 7.51 | $ | 6.77 | $ | 7.62 | $ | 11.00 | $ | 10.48 | $ | 10.00 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.11 | 0.31 | 0.29 | 0.55 | 0.48 | 0.31 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.27 | 0.70 | (0.85 | ) | (2.29 | ) | 0.54 | 0.44 | ||||||||||||||||
Total from investment operations | 1.38 | 1.01 | (0.56 | ) | (1.74 | ) | 1.02 | 0.75 | ||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | 0.01 | — | 1 | |||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.27 | ) | (0.29 | ) | (0.50 | ) | (0.47 | ) | (0.27 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (1.14 | ) | (0.04 | ) | — | ||||||||||||||||
Total distributions | (0.13 | ) | (0.27 | ) | (0.29 | ) | (1.64 | ) | (0.51 | ) | (0.27 | ) | ||||||||||||
Net asset value, end of period | $ | 8.76 | $ | 7.51 | $ | 6.77 | $ | 7.62 | $ | 11.00 | $ | 10.48 | ||||||||||||
Total return2 | 18.46% | 15.18% | (6.49)% | (18.17)% | 9.77% | 7.58% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 29,066 | $ | 19,517 | $ | 17,710 | $ | 21,889 | $ | 23,621 | $ | 12,732 | ||||||||||||
Ratio of expenses to average net assets (including interest expense and dividend payments for securities sold short): | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 0.95% | 0.99% | 6 | 1.05% | 0.97% | 1.05% | 0.95% | |||||||||||||||||
Before waivers and reimbursements3 | 1.22% | 1.33% | 6 | 1.71% | 1.46% | 1.57% | 2.66% | |||||||||||||||||
Ratio of expenses to average net assets (excluding interest expense and dividend payments for securities sold short): | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 0.95% | 0.95% | 6 | 0.95% | 0.95% | 0.95% | 0.95% | |||||||||||||||||
Before waivers and reimbursements3 | 1.21% | 1.29% | 6 | 1.61% | 1.44% | 1.47% | 2.66% | |||||||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements3 | 2.80% | 4.35% | 4.93% | 5.96% | 4.14% | 5.40% | ||||||||||||||||||
Before waivers and reimbursements3 | 2.54% | 4.01% | 4.27% | 5.47% | 3.62% | 3.69% | ||||||||||||||||||
Portfolio turnover rate2 | 31% | 73% | 84% | 81% | 86% | 14% | ||||||||||||||||||
| 1 | Represents amounts less than $.005 per share. |
| 2 | Not annualized for periods less than one year. |
| 3 | Annualized. |
| 4 | Includes extraordinary expenses of 0.01% (see Note 9). |
| 5 | Fund inception date was February 1, 2006. |
| 6 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
See Notes to Financial Statements.
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| WASATCH FUNDS — Financial Highlights (continued) | ||
| ULTRA GROWTH FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value, beginning of period | $ | 19.80 | $ | 15.66 | $ | 15.76 | $ | 27.78 | $ | 24.09 | $ | 27.98 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment loss | (0.11 | ) | (0.15 | ) | (0.14 | ) | (0.22 | ) | (0.33 | ) | (0.34 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | 4.48 | 4.29 | 0.04 | (8.28 | ) | 5.80 | 0.23 | |||||||||||||||||||||
Net increase from payment by affiliates | — | — | — | — | — | — | 1 | |||||||||||||||||||||
Total from investment operations | 4.37 | 4.14 | (0.10 | ) | (8.50 | ) | 5.47 | (0.11 | ) | |||||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Distributions from net realized gains | — | — | — | (3.52 | ) | (1.78 | ) | (3.78 | ) | |||||||||||||||||||
Total distributions | — | — | — | (3.52 | ) | (1.78 | ) | (3.78 | ) | |||||||||||||||||||
Net asset value, end of period | $ | 24.17 | $ | 19.80 | $ | 15.66 | $ | 15.76 | $ | 27.78 | $ | 24.09 | ||||||||||||||||
Total return2 | 22.07% | 26.44% | (0.63)% | (35.09)% | 23.80% | (0.48)% | ||||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 187,984 | $ | 178,566 | $ | 121,284 | $ | 144,004 | $ | 268,633 | $ | 306,406 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | 1.51% | 1.68% | 4 | 1.75% | 1.53% | 1.49% | 1.48% | 5 | ||||||||||||||||||||
Before waivers and reimbursements3 | 1.51% | 1.68% | 4 | 1.77% | 1.53% | 1.49% | 1.48% | |||||||||||||||||||||
Ratio of net investment loss to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | (0.74)% | (1.14)% | (1.12)% | (0.93)% | (1.12)% | (1.19)% | ||||||||||||||||||||||
Before waivers and reimbursements3 | (0.74)% | (1.14)% | (1.14)% | (0.93)% | (1.12)% | (1.19)% | ||||||||||||||||||||||
Portfolio turnover rate2 | 37% | 45% | 64% | 84% | 55% | 76% | ||||||||||||||||||||||
| WASATCH-1ST SOURCE INCOME FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | Period Ended September 30 | Year Ended March 31 | ||||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 20086 | 2008 | 2007 | 2006 | |||||||||||||||||||||
Net asset value, beginning of period | $ | 10.34 | $ | 10.04 | $ | 9.59 | $ | 9.95 | $ | 9.73 | $ | 9.63 | $ | 9.88 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.12 | 0.29 | 0.33 | 0.18 | 7 | 0.40 | 0.38 | 0.33 | ||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.23 | ) | 0.30 | 0.46 | (0.35 | ) | 0.24 | 0.13 | (0.18 | ) | ||||||||||||||||||
Total from investment operations | (0.11 | ) | 0.59 | 0.79 | (0.17 | ) | 0.64 | 0.51 | 0.15 | |||||||||||||||||||
Redemption fees (see Note 2) | — | 1 | — | 1 | — | 1 | — | — | — | — | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.29 | ) | (0.34 | ) | (0.19 | ) | (0.42 | ) | (0.41 | ) | (0.40 | ) | ||||||||||||||
Total distributions | (0.12 | ) | (0.29 | ) | (0.34 | ) | (0.19 | ) | (0.42 | ) | (0.41 | ) | (0.40 | ) | ||||||||||||||
Net asset value, end of period | $ | 10.11 | $ | 10.34 | $ | 10.04 | $ | 9.59 | $ | 9.95 | $ | 9.73 | $ | 9.63 | ||||||||||||||
Total return2 | (1.05)% | 5.95% | 8.42% | (1.69)% | 6.74% | 5.43% | 1.52% | |||||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 132,444 | $ | 138,095 | $ | 114,496 | $ | 89,081 | $ | 86,981 | $ | 78,921 | $ | 72,874 | ||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | 0.73% | 0.72% | 8 | 0.84% | 0.87% | 0.95% | 0.92% | 0.95% | ||||||||||||||||||||
Before waivers and reimbursements3 | 0.73% | 0.73% | 8 | 0.88% | 1.12% | 1.20% | 1.17% | 1.21% | ||||||||||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||||||
Net of waivers and reimbursements3 | 2.36% | 2.87% | 3.44% | 3.66% | 4.05% | 3.95% | 3.36% | |||||||||||||||||||||
Before waivers and reimbursements3 | 2.36% | 2.86% | 3.40% | 3.41% | 3.80% | 3.70% | 3.10% | |||||||||||||||||||||
Portfolio turnover rate2 | 17% | 51% | 28% | 15% | 56% | 59% | 70% | |||||||||||||||||||||
| 1 | Represents amounts less than $.005 per share. |
| 2 | Not annualized for periods less than one year. |
| 3 | Annualized. |
| 4 | Includes extraordinary expenses of 0.01% (see Note 9). |
| 5 | In 2006, the Fund received a reimbursement of investment advisory fees, which had an impact on the Fund’s expense ratio of less than 0.01%. |
| 6 | Effective September 19, 2008, the Fund changed its fiscal year end to September 30. |
| 7 | Average shares method used in calculation. |
| 8 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
See Notes to Financial Statements.
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| MARCH 31, 2011 | ||
| U.S. TREASURY FUND | Six Months Ended March 31 (Unaudited) | Year Ended September 30 | ||||||||||||||||||||||
| (for a share outstanding throughout each period) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net asset value, beginning of period | $ | 17.17 | $ | 16.29 | $ | 14.95 | $ | 13.84 | $ | 14.12 | $ | 14.68 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.26 | 0.54 | 0.55 | 0.58 | 0.64 | 0.39 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (2.59 | ) | 1.35 | 1.29 | 1.10 | (0.29 | ) | (0.24 | ) | |||||||||||||||
Total from investment operations | (2.33 | ) | 1.89 | 1.84 | 1.68 | 0.35 | 0.15 | |||||||||||||||||
Redemption fees (see Note 2) | 0.01 | 0.01 | 0.05 | 0.01 | 0.01 | 0.01 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.26 | ) | (0.54 | ) | (0.55 | ) | (0.58 | ) | (0.64 | ) | (0.72 | ) | ||||||||||||
Distributions from net realized gains | (1.07 | ) | (0.48 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (1.33 | ) | (1.02 | ) | (0.55 | ) | (0.58 | ) | (0.64 | ) | (0.72 | ) | ||||||||||||
Net asset value, end of period | $ | 13.52 | $ | 17.17 | $ | 16.29 | $ | 14.95 | $ | 13.84 | $ | 14.12 | ||||||||||||
Total return1 | (13.40)% | 12.65% | 12.49% | 12.33% | 2.68% | 1.21% | ||||||||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 155,083 | $ | 200,855 | $ | 154,099 | $ | 121,240 | $ | 115,788 | $ | 204,994 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements2 | 0.75% | 0.75% | 3 | 0.75% | 0.74% | 0.71% | 0.72% | |||||||||||||||||
Before waivers and reimbursements2 | 0.75% | 0.78% | 3 | 0.79% | 0.74% | 0.71% | 0.72% | |||||||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||
Net of waivers and reimbursements2 | 3.57% | 3.56% | 3.34% | 3.85% | 4.23% | 4.21% | ||||||||||||||||||
Before waivers and reimbursements2 | 3.57% | 3.53% | 3.30% | 3.85% | 4.23% | 4.21% | ||||||||||||||||||
Portfolio turnover rate1 | 12% | 49% | 62% | 31% | 19% | 2% | ||||||||||||||||||
| 1 | Not annualized for periods less than one year. |
| 2 | Annualized. |
| 3 | Includes extraordinary expenses of less than 0.01% (see Note 9). |
See Notes to Financial Statements.
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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 Markets Small Cap Fund, Global Science & Technology Fund, Heritage Growth Fund, International Growth Fund, International Opportunities Fund, Large Cap Value Fund (formerly Wasatch-1st Source Income Equity Fund), Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund, Strategic Income Fund, Ultra Growth Fund, Wasatch-1st Source Income Fund (“Income Fund”) (sub-advised), and Wasatch-Hoisington U.S. Treasury Fund (“U.S. Treasury Fund”) (sub-advised) are each diversified funds. The Global Opportunities Fund and Long/Short Fund (formerly Wasatch-1st Source Long/Short Fund) are non-diversified funds. Each Fund maintains its own investment objective. The Funds have entered into an investment advisory agreement with Wasatch Advisors, Inc. (the “Advisor” or “Wasatch”) as investment advisor.
The Core Growth Fund, Emerging Markets Small Cap Fund, Global Opportunities Fund, Global Science & Technology Fund, Heritage Growth Fund, International Growth Fund, International Opportunities Fund, Large Cap Value Fund, Long/Short Fund, Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund, Strategic Income Fund and Ultra Growth Fund 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, 2011. 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 15.
Foreign Currency Translations — Values of investments denominated in foreign currencies are converted into U.S. dollars using the current exchange rates each business day. 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 in the Statements of Operations. Transactions in foreign denominated assets may involve greater risks than domestic transactions.
At March 31, 2011, the foreign currencies held by the Funds were as follows (amounts in U.S. dollars):
| Cost of Currency | Value of Currency | |||||||
Emerging Markets Small Cap Fund | ||||||||
Brazilian Real | $ | 360,785 | $ | 366,719 | ||||
Egyptian Pound | 1,536,708 | 1,536,708 | ||||||
Indian Rupee | 722,500 | 722,500 | ||||||
Malaysian Ringgit | 104,799 | 104,746 | ||||||
Moroccan Dirham | 17 | 18 | ||||||
South Korean Won | 17 | 17 | ||||||
Thailand Baht | 111,639 | 111,676 | ||||||
| $ | 2,836,465 | $ | 2,842,384 | |||||
Global Opportunities Fund | ||||||||
Australian Dollar | $ | 24,618 | $ | 24,726 | ||||
Brazilian Real | 185,302 | 188,528 | ||||||
British Pound | 61,068 | 61,448 | ||||||
Canadian Dollar | 967 | 969 | ||||||
Egyptian Pound | 1 | 1 | ||||||
Indian Rupee | 162,483 | 162,483 | ||||||
Japanese Yen | 3,152 | 3,145 | ||||||
Malaysian Ringgit | 10,085 | 10,078 | ||||||
New Taiwan Dollar | 221,133 | 223,235 | ||||||
South African Rand | 7,979 | 8,098 | ||||||
South Korean Won | 2 | 2 | ||||||
| $ | 676,791 | $ | 682,715 | |||||
Heritage Growth Fund | ||||||||
Brazilian Real | $ | 809,986 | $ | 830,133 | ||||
International Growth Fund | ||||||||
Australian Dollar | $ | 1 | $ | 1 | ||||
Brazilian Real | 13,733 | 13,778 | ||||||
Egyptian Pound | 9 | 8 | ||||||
South Korean Won | 34 | 35 | ||||||
| $ | 13,778 | $ | 13,823 | |||||
International Opportunities Fund | ||||||||
Brazilian Real | $ | 23,004 | $ | 23,413 | ||||
British Pound | 96,678 | 97,279 | ||||||
Canadian Dollar | 4,845 | 4,854 | ||||||
Egyptian Pound | 99 | 97 | ||||||
Indian Rupee | 604,709 | 604,709 | ||||||
New Taiwan Dollar | 85,382 | 85,391 | ||||||
South Korean Won | 27 | 27 | ||||||
Swiss Franc | 7,405 | 7,799 | ||||||
| $ | 822,150 | $ | 823,569 | |||||
Micro Cap Value Fund | ||||||||
South Korean Won | $ | 18 | $ | 18 | ||||
Strategic Income Fund | ||||||||
Canadian Dollar | $ | 2,112 | $ | 2,112 | ||||
Hong Kong Dollar | 2 | 2 | ||||||
| $ | 2,113 | $ | 2,113 | |||||
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
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premiums are amortized using the interest method. To the extent dividends received from Real Estate Investment Trust securities include return of capital distributions; such distributions are recorded as income, and adjusted accordingly for tax purposes.
Federal Income Taxes — It is each Fund’s policy to comply with the requirements 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 2007. 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.
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.
3. SECURITIESAND 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 Long/Short Fund, the Strategic Income Fund and to a lesser extent the other 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.
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 the 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 on the Statement of Assets and Liabilities. In addition, a fund could be exposed to a 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.
Options Transactions — The Equity Funds and the Wasatch-1st Source Income Fund may buy and sell put and call options and write covered put and call options, including over-the-counter options, on portfolio securities where the completion of the obligation is dependent upon the credit standing of another party. Options are a type of derivative financial instrument. The Funds may invest in derivative financial instruments, including options, in order to manage risk or gain exposure to various other investments or markets. The risk in writing a call option is that a fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that a fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying
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an option is that a fund pays a premium whether or not the option is exercised. A fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily and unrealized appreciation or depreciation is recorded. A fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. The Funds designate collateral consisting of cash, U.S. government securities or other liquid assets sufficient to collateralize the market value of written options.
5. DISTRIBUTIONS
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 five funds. The Wasatch-1st Source Income Fund declares and pays dividends monthly. The Large Cap Value, Long/Short, Strategic Income, 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 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 gains (losses) on investments and foreign currency translations.
6. PURCHASESAND SALESOF SECURITIES
Cost of investment securities purchased and proceeds from sales of investment securities, excluding U.S. government and short-term securities for the period ended March 31, 2011 are summarized below:
| Core Growth Fund | Emerging Markets Small Cap Fund | Global Opportunities Fund | Global Science & Technology Fund | Heritage Growth Fund | International Growth Fund | International Opportunities Fund | ||||||||||||||||||||||
Purchases | $ | 44,342,231 | $ | 520,921,380 | $ | 78,516,864 | $ | 29,487,776 | $ | 14,547,698 | $ | 187,393,628 | $ | 71,454,480 | ||||||||||||||
Sales | 63,772,670 | 289,008,718 | 38,176,158 | 31,758,856 | 20,051,036 | 193,753,506 | 73,496,989 | |||||||||||||||||||||
| Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Value Fund | Small Cap Growth Fund | Small Cap Value Fund | Strategic Income Fund | ||||||||||||||||||||||
Purchases | $ | 217,603,440 | $ | 296,706,670 | $ | 46,493,606 | $ | 102,984,091 | $ | 243,575,560 | $ | 51,620,610 | $ | 12,487,131 | ||||||||||||||
Sales | 257,809,144 | 152,389,673 | 70,077,679 | 105,753,130 | 145,542,661 | 91,563,506 | 6,563,683 | |||||||||||||||||||||
| Ultra Growth Fund | Income Fund | |||||||||||||||||||||||||||
Purchases | $ | 71,520,511 | $ | 7,506,864 | ||||||||||||||||||||||||
Sales | 85,165,373 | 10,472,601 | ||||||||||||||||||||||||||
Purchases and sales of U.S. government securities in the Income Fund were $14,063,284 and $16,550,067, respectively. Purchases and sales of U.S. government securities in the U.S. Treasury Fund were $20,077,945 and $37,227,572, respectively.
7. OPTIONS CONTRACTS WRITTEN
Options written activity during the period ended March 31, 2011 was as follows:
| Options Outstanding at 9/30/2010 | Written | Closed | Exercised | Expired | Options Outstanding at 3/31/2011 | |||||||||||||||||||
Long/Short Fund | ||||||||||||||||||||||||
Premium amount | $ | 2,229,695 | $ | 9,716,378 | $ | (823,273 | ) | $ | (3,622,098 | ) | $ | (272,187 | ) | $ | 7,228,515 | |||||||||
Number of contracts | 7,902 | 36,919 | (2,050 | ) | (14,445 | ) | (1,344 | ) | 26,982 | |||||||||||||||
Micro Cap Value Fund | ||||||||||||||||||||||||
Premium amount | $ | 374,128 | $ | 601,822 | $ | (174,475 | ) | $ | (685,667 | ) | $ | (83,309 | ) | $ | 32,499 | |||||||||
Number of contracts | 3,500 | 5,350 | (900 | ) | (6,712 | ) | (1,038 | ) | 200 | |||||||||||||||
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8. FEDERAL INCOME TAX INFORMATION
As of March 31, 2011, the cost and unrealized appreciation (depreciation) of securities on a tax basis were as follows:
| Core Growth Fund | Emerging Markets Small Cap Fund | Global Opportunities Fund | Global Science & Technology | Heritage Growth Fund | International Growth Fund | |||||||||||||||||||
Cost | $ | 332,360,338 | $ | 617,538,493 | $ | 245,001,080 | $ | 63,309,941 | $ | 62,530,742 | $ | 237,419,182 | ||||||||||||
Gross appreciation | $ | 170,791,163 | $ | 97,124,792 | $ | 92,025,597 | $ | 14,568,448 | $ | 25,518,084 | $ | 70,568,330 | ||||||||||||
Gross (depreciation) | (10,520,850 | ) | (12,661,570 | ) | (3,878,864 | ) | (1,451,508 | ) | (367,205 | ) | (8,691,213 | ) | ||||||||||||
Net appreciation | $ | 160,270,313 | $ | 84,463,222 | $ | 88,146,733 | $ | 13,116,940 | $ | 25,150,879 | $ | 61,877,117 | ||||||||||||
| International Opportunities Fund | Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Value Fund | Small Cap Growth Fund | |||||||||||||||||||
Cost | $ | 150,612,649 | $ | 1,467,435,095 | $ | 418,599,512 | $ | 239,820,414 | $ | 170,510,081 | $ | 1,108,375,305 | ||||||||||||
Gross appreciation | $ | 38,401,248 | $ | 407,774,816 | $ | 69,774,706 | $ | 115,203,592 | $ | 41,501,378 | $ | 517,106,522 | ||||||||||||
Gross (depreciation) | (5,570,123 | ) | (26,084,799 | ) | (12,060,159 | ) | (11,759,211 | ) | (3,285,881 | ) | (29,931,980 | ) | ||||||||||||
Net appreciation | $ | 32,831,125 | $ | 381,690,017 | $ | 57,714,547 | $ | 103,444,381 | $ | 38,215,497 | $ | 487,174,542 | ||||||||||||
| Small Cap Value Fund | Strategic Income Fund | Ultra Growth Fund | Income Fund | U.S. Treasury Fund | ||||||||||||||||||||
Cost | $ | 176,819,865 | $ | 25,604,609 | $ | 133,348,793 | $ | 130,178,382 | $ | 168,390,467 | ||||||||||||||
Gross appreciation | $ | 63,684,668 | $ | 4,361,123 | $ | 60,273,793 | $ | 3,495,303 | $ | 1,466,366 | ||||||||||||||
Gross (depreciation) | (2,234,238 | ) | (1,063,326 | ) | (5,633,991 | ) | (741,634 | ) | (13,742,725 | ) | ||||||||||||||
Net appreciation (depreciation) | $ | 61,450,430 | $ | 3,297,797 | $ | 54,639,802 | $ | 2,753,669 | $ | (12,276,359 | ) | |||||||||||||
The difference between book-basis and tax-basis unrealized gains are primarily attributable to the tax deferral of losses on wash sales, unrealized appreciation on passive foreign investment companies and other temporary tax adjustments.
The components of accumulated earnings on a tax basis as of September 30, 2010 were as follows:
| Core Growth Fund | Emerging Markets Small Cap Fund | Global Opportunities Fund | Global Science & Technology Fund | Heritage Growth Fund | International Growth Fund | |||||||||||||||||||
Undistributed ordinary income | $ | — | $ | 86,157 | $ | 1,878,076 | $ | — | $ | 658,864 | $ | 1,232,827 | ||||||||||||
Undistributed capital gains | — | — | 6,555,018 | — | — | — | ||||||||||||||||||
Accumulated earnings | — | 86,157 | 8,433,094 | — | 658,864 | 1,232,827 | ||||||||||||||||||
Accumulated capital and other losses | (121,110,878 | ) | (14,842,293 | ) | — | (28,310,873 | ) | (7,514,729 | ) | (66,110,178 | ) | |||||||||||||
Other undistributed ordinary losses | — | — | (11,284 | ) | — | — | — | |||||||||||||||||
Net unrealized appreciation* | 82,762,692 | 78,296,634 | 50,818,070 | 9,163,581 | 14,696,002 | 75,459,340 | ||||||||||||||||||
Total accumulated earnings (deficit) | $ | (38,348,186 | ) | $ | 63,540,498 | $ | 59,239,880 | $ | (19,147,292 | ) | $ | 7,840,137 | $ | 10,581,989 | ||||||||||
| International Opportunities Fund | Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Fund | Small Cap Growth Fund | |||||||||||||||||||
Undistributed ordinary income | $ | — | $ | — | $ | 85,683 | $ | — | $ | — | $ | — | ||||||||||||
Undistributed capital gains | — | — | — | — | — | — | ||||||||||||||||||
Accumulated earnings | — | — | 85,683 | — | — | — | ||||||||||||||||||
Accumulated capital and other losses | (445,625 | ) | (65,338,670 | ) | (8,871,016 | ) | (87,613,431 | ) | (12,346,559 | ) | (33,688,124 | ) | ||||||||||||
Other undistributed ordinary losses | (21,416 | ) | (331,089 | ) | (10,700 | ) | — | — | — | |||||||||||||||
Net unrealized appreciation* | 39,389,605 | 140,378,427 | 16,608,832 | 31,793,483 | 17,008,657 | 275,607,559 | ||||||||||||||||||
Total accumulated earnings (deficit) | $ | 38,922,564 | $ | 74,708,668 | $ | 7,812,799 | $ | (55,819,948 | ) | $ | 4,662,098 | $ | 241,919,435 | |||||||||||
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| Small Cap Value Fund | Strategic Income Fund | Ultra Growth Fund | Income Fund | U.S. Treasury Fund | ||||||||||||||||||||
Undistributed ordinary income | $ | — | $ | 89,709 | $ | — | $ | 80,824 | $ | 173,304 | ||||||||||||||
Undistributed capital gains | — | — | — | — | 10,250,025 | |||||||||||||||||||
Accumulated earnings | — | 89,709 | — | 80,824 | 10,423,329 | |||||||||||||||||||
Accumulated capital and other losses | (132,925,644 | ) | (8,427,740 | ) | (39,415,853 | ) | (2,862,019 | ) | — | |||||||||||||||
Other undistributed ordinary losses | — | (15,360 | ) | — | (57,253 | ) | (156,953 | ) | ||||||||||||||||
Net unrealized appreciation* | 11,625,410 | 544,102 | 43,216,979 | 6,072,779 | 13,610,770 | |||||||||||||||||||
Total accumulated earnings (deficit) | $ | (121,300,234 | ) | $ | (7,809,289 | ) | $ | 3,801,126 | $ | 3,234,331 | $ | 23,877,146 | ||||||||||||
| * | On investments, securities sold short, derivative and foreign currency denominated assets and liabilities. |
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.
Capital loss carryforwards as of September 30, 2010 are as follows:
| Fund | 2013 | 2014 | 2016 | 2017 | 2018 | |||||||||||||||
Core Growth Fund | $ | — | $ | — | $ | — | $ | 23,065,472 | $ | 97,992,911 | ||||||||||
Emerging Markets Small Cap Fund | — | — | — | 8,013,713 | 6,828,580 | |||||||||||||||
Global Science & Technology Fund | — | — | — | 13,246,252 | 15,064,621 | |||||||||||||||
Heritage Growth Fund | — | — | — | 1,497,283 | 6,017,446 | |||||||||||||||
International Growth Fund | — | — | — | 37,186,858 | 28,032,776 | |||||||||||||||
International Opportunities Fund | — | — | — | 136,323 | — | |||||||||||||||
Large Cap Value Fund | 456,570 | — | 1,007,552 | — | 63,874,548 | |||||||||||||||
Long/Short Fund | — | — | 1,392,157 | 4,660,126 | 2,818,733 | |||||||||||||||
Micro Cap Fund | — | — | — | 36,417,364 | 49,352,340 | |||||||||||||||
Micro Cap Value Fund | — | — | — | 11,884,263 | — | |||||||||||||||
Small Cap Growth Fund | — | — | — | 18,434,963 | 15,177,683 | |||||||||||||||
Small Cap Value Fund | — | — | — | 69,050,636 | 63,851,964 | |||||||||||||||
Strategic Income Fund | — | — | — | 1,777,526 | 6,650,214 | |||||||||||||||
Ultra Growth Fund | — | — | — | 18,431,927 | 20,927,202 | |||||||||||||||
Income Fund | 917,303 | 1,382,991 | 561,725 | — | — | |||||||||||||||
Net capital losses incurred after October 31 and within the taxable year have been elected by the Funds to be treated as being incurred on the first business day of the Funds’ next taxable year. For the year ended September 30, 2010, the following Funds deferred to October 1, 2010 post October capital and currency losses as follows:
| Fund | Capital Losses | |||
Core Growth Fund | $ | 52,495 | ||
International Opportunities Fund | 309,302 | |||
Micro Cap Fund | 1,843,727 | |||
Micro Cap Value Fund | 462,296 | |||
Small Cap Growth Fund | 75,478 | |||
Small Cap Value Fund | 23,044 | |||
Ultra Growth Fund | 56,724 | |||
During the tax year ended September 30, 2010, the Funds used capital loss carryforwards in the following amounts:
| Fund | Amount Used | |||
International Opportunities Fund | $ | 6,170,670 | ||
Micro Cap Value Fund | 5,752,405 | |||
Income Fund | 311,342 | |||
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The tax character of distributions paid during the year ended September 30, 2010 was as follows:
| 2010 | Core Growth Fund | Emerging Markets Small Cap Fund | Global Opportunities Fund | Global Science & Technology Fund | Heritage Growth Fund | International Growth Fund | ||||||||||||||||||
Ordinary income | $ | 87,230 | $ | 379,097 | $ | 3,456,368 | $ | 79,109 | $ | 499,403 | $ | — | ||||||||||||
Capital gain | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 87,230 | $ | 379,097 | $ | 3,456,368 | $ | 79,109 | $ | 499,403 | $ | — | ||||||||||||
| 2010 | International Opportunities Fund | Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Value Fund | Small Cap Growth Fund | ||||||||||||||||||
Ordinary income | $ | 1,049,066 | $ | 21,589,760 | $ | 98,009 | $ | — | $ | 569,692 | $ | — | ||||||||||||
Capital gain | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 1,049,066 | $ | 21,589,760 | $ | 98,009 | $ | — | $ | 569,692 | $ | — | ||||||||||||
| 2010 | Small Cap Fund | Strategic Income Fund | Ultra Growth Fund | Income Fund | U.S. Treasury Fund | |||||||||||||||||||
Ordinary income | $ | — | $ | 678,070 | $ | — | $ | 3,572,685 | $ | 5,847,330 | ||||||||||||||
Capital gain | — | — | — | — | 4,184,315 | |||||||||||||||||||
Total | $ | — | $ | 678,070 | $ | — | $ | 3,572,685 | $ | 10,031,645 | ||||||||||||||
The tax character of distributions paid during the year or period ended September 30, 2009 was as follows:
| 2009 | Core Growth Fund | Emerging Markets Small Cap Fund | Global Opportunities Fund1 | Global Science & Technology Fund | Heritage Growth Fund | International Growth Fund | ||||||||||||||||||
Ordinary income | $ | 5,739,872 | $ | 29,720 | $ | — | $ | — | $ | 167,143 | $ | 466,090 | ||||||||||||
Capital gain | — | — | — | — | 220,964 | — | ||||||||||||||||||
Total | $ | 5,739,872 | $ | 29,720 | $ | — | $ | — | $ | 388,107 | $ | 466,090 | ||||||||||||
| 2009 | International Opportunities Fund | Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Value Fund | Small Cap Growth Fund | ||||||||||||||||||
Ordinary income | $ | 168,034 | $ | 19,218,020 | $ | 2,025,005 | $ | 777,904 | $ | — | $ | — | ||||||||||||
Capital gain | — | — | 110,509 | — | — | 1,539,215 | ||||||||||||||||||
Total | $ | 168,034 | $ | 19,218,020 | $ | 2,135,514 | $ | 777,904 | $ | — | $ | 1,539,215 | ||||||||||||
| 2009 | Small Cap Value Fund | Strategic Income Fund | Ultra Growth Fund | Income Fund | U.S. Treasury Fund | |||||||||||||||||||
Ordinary income | $ | — | $ | 784,968 | $ | — | $ | 3,433,282 | $ | 5,022,309 | ||||||||||||||
Capital gain | — | — | — | — | — | |||||||||||||||||||
Total | $ | — | $ | 784,968 | $ | — | $ | 3,433,282 | $ | 5,022,309 | ||||||||||||||
| 1 | Inception date of the Fund was November 17, 2008. |
The tax character of distributions paid may differ from that shown in the Statements of Changes in Net Assets due to short-term gains being treated as ordinary income for tax purposes.
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9. RELATED PARTY TRANSACTIONS
Investment Advisory Fees, Expense Limitations — As the Fund’s 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, 2012. If operating expenses are less than the specified expense limit for the Fund, the Advisor shall be entitled to reimbursement of the fees waived or reduced to the extent that the operating expenses and the amount reimbursed do not exceed such expense limit for the Fund, under the period of the agreement (currently the period for the 22 months commencing April 1, 2010 or for the 12 months commencing January 31, 2011). Such reimbursement shall be paid only while the expense limitation agreement is in effect and only if such amount paid, together with all other amounts reimbursed under this agreement in the fiscal year, does not cause the Fund to exceed the expense limitation. All amounts not recovered at the end of the period expire on January 31, 2012. Ordinary operating expenses exclude any interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Fund’s business. The Wasatch Funds’ Board determined that the costs of the Proxy Statement related to the identification and shareholder approval of Director Nominees were extraordinary expenses. The impact of these payments is reflected in the net expense ratios in the Financial Highlights. Investment advisory fees and fees waived, if any, for the period ended March 31, 2011 are disclosed in the Statements of Operations. Investment advisory fee and expense limitation annual rates are shown below.
| Fund | Advisory Fee | Expense Limitation | Contractual Expense Limitation/ Reimbursement Recoverable Commencement Date | Reimbursement Recoverable | ||||||||||||
Core Growth Fund | 1.00 | % | 1.50 | % | 4/1/2010 | $ | — | |||||||||
Emerging Markets Small Cap Fund | 1.75 | % | 1.95 | %1 | 4/1/2010 | 1,020,673 | ||||||||||
Global Opportunities Fund | 1.50 | %2 | 1.95 | %3 | 1/31/2011 | 28,489 | ||||||||||
Global Science & Technology Fund | 1.50 | % | 1.95 | % | 4/1/2010 | 36,313 | ||||||||||
Heritage Growth Fund | 0.70 | % | 0.95 | % | 4/1/2010 | 95,345 | ||||||||||
International Growth Fund | 1.25 | %4 | 1.75 | %5 | 1/31/2011 | — | ||||||||||
International Opportunities Fund | 1.95 | % | 2.25 | % | 4/1/2010 | 453,564 | ||||||||||
Large Cap Value Fund | 0.90 | % | 1.10 | % | 4/1/2010 | 413,289 | ||||||||||
Long/Short Fund | 1.10 | % | — | N/A | N/A | |||||||||||
Micro Cap Fund | 1.95 | % | 2.25 | % | 4/1/2010 | — | ||||||||||
Micro Cap Value Fund | 1.95 | % | 2.25 | % | 4/1/2010 | 201,152 | ||||||||||
Small Cap Growth Fund | 1.00 | % | 1.50 | % | 4/1/2010 | — | ||||||||||
Small Cap Value Fund | 1.50 | % | 1.95 | % | 4/1/2010 | — | ||||||||||
Strategic Income Fund | 0.70 | % | 0.95 | % | 4/1/2010 | 51,274 | ||||||||||
Ultra Growth Fund | 1.00 | %6 | 1.50 | %7 | 1/31/2011 | — | ||||||||||
Income Fund | 0.55 | % | — | N/A | N/A | |||||||||||
U.S. Treasury Fund | 0.50 | % | 0.75 | % | 4/1/2010 | 7,517 | ||||||||||
| 1 | The expense limitation for the Emerging Markets Small Cap Fund decreased from 2.00% to 1.95% when average net assets reached $150 million. |
| 2 | The advisory fee decreased from 1.95% to 1.50% on 1/31/2011. |
| 3 | The expense limitation was decreased from 2.25% to 1.95% on 1/31/2011. |
| 4 | The advisory fee decreased from 1.50% to 1.25% on 1/31/2011. |
| 5 | The expense limitation was decreased from 1.95% to 1.75% on 1/31/2011. |
| 6 | The advisory fee decreased from 1.25% to 1.00% on 1/31/2011. |
| 7 | The expense limitation was decreased from 1.75% to 1.50% on 1/31/2011. |
Affiliated Trades — Certain Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees. 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 period ended March 31, 2011, the Funds below engaged in purchases and sales of securities pursuant to Rule 17a-7 of the 1940 Act:
| Purchases | Sales | |||||||
Emerging Markets Small Cap Fund | $ | 1,161,412 | $ | — | ||||
Micro Cap Value Fund | — | 1,301,692 | ||||||
Ultra Growth Fund | 140,280 | — | ||||||
Affiliated Interests — An officer of the Funds owns approximately 31% of the shares outstanding of the Strategic Income Fund, as of March 31, 2011.
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| MARCH 31, 2011 | ||
Payments by Former Service Provider — BISYS Fund Services, Inc. (“BISYS”) is a former service provider to the Large Cap Value Fund, Long/Short Fund, and Income Fund. In August 2010, these funds received a one-time payment from the BISYS Fair Fund (a fund established pursuant to a settlement between the SEC and BISYS that requires, among other things, a distribution of settlement monies from the fair fund to benefit affected mutual funds). The impact of these payments is reflected in the net expense ratios in the Financial Highlights.
10. TRANSACTIONSWITH 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 period ended March 31, 2011 with “affiliated companies” as so defined:
| Share Activity | Dividends Credited to Income for the period ended 3/31/11 | Gain (Loss) Realized on Sale of Shares for the period ended 3/31/11 | ||||||||||||||||||||||
| Balance 9/30/10 | Purchases/ Additions | Sales/ Reductions | Balance 3/31/11 | |||||||||||||||||||||
Small Cap Growth Fund | ||||||||||||||||||||||||
Peet’s Coffee & Tea, Inc. | 693,795 | 229,148 | 143,445 | 779,498 | $ | — | $ | 1,744,165 | ||||||||||||||||
11. 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, 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, 2011, the Funds held the following restricted securities:
| Security Type | Acquisition Date | Acquisition Cost | Fair Value | Value as % of Net Assets | ||||||||||||||
Global Opportunities Fund | ||||||||||||||||||
Cardica, Inc. | PIPE | 9/25/09 | $ | 95,200 | $ | 284,800 | 0.09 | % | ||||||||||
Cardica, Inc. | Warrants | 9/25/09 | 5,000 | 84,400 | 0.03 | % | ||||||||||||
| $ | 100,200 | $ | 369,200 | 0.11 | % | |||||||||||||
Global Science & Technology Fund | ||||||||||||||||||
BlueArc Corp., Series DD | Preferred Stock | 6/6/06 | $ | 162,499 | $ | 120,108 | 0.16 | % | ||||||||||
BlueArc Corp., Series DD-1 | Preferred Stock | 6/6/06 | 162,499 | 126,781 | 0.17 | % | ||||||||||||
BlueArc Corp., Series FF | Preferred Stock | 5/30/08 | 314,033 | 230,285 | 0.30 | % | ||||||||||||
BlueArc Corp., Series FF-1 | Preferred Stock | 5/30/08 | 314,033 | 233,750 | 0.30 | % | ||||||||||||
BlueArc Corp., Series GG | Preferred Stock | 7/9/10 | 60,028 | 67,532 | 0.09 | % | ||||||||||||
BlueArc Corp., Series FF | Warrants | 5/30/08 | — | — | — | |||||||||||||
BlueArc Corp., Series FF-1 | Warrants | 5/30/08 | — | — | — | |||||||||||||
BlueArc Corp., Series GG | Warrants | 7/9/10 | 8 | 1,024 | 0.00 | % | ||||||||||||
Cardica, Inc. | Warrants | 9/25/09 | 8,937 | 150,865 | 0.20 | % | ||||||||||||
Greenspring Global Partners II-B, L.P. | LP Interest | 10/10/03 - 7/23/10 | 434,387 | 446,642 | 0.58 | % | ||||||||||||
Xtera Communications, Inc. | Common Stock | 9/3/03 | 7,076 | 65 | 0.00 | % | ||||||||||||
| $ | 1,463,500 | $ | 1,377,052 | 1.80 | % | |||||||||||||
Micro Cap Fund | ||||||||||||||||||
Cardica, Inc. | PIPE | 9/25/09 | $ | 405,790 | $ | 1,213,960 | 0.35 | % | ||||||||||
Cardica, Inc. | Warrants | 6/7/07 | 19,380 | — | — | |||||||||||||
Cardica, Inc. | Warrants | 9/25/09 | 40,312 | 680,475 | 0.20 | % | ||||||||||||
Goldwater Bank, N.A. | Common Stock | 2/28/07 | 1,540,000 | 231,000 | 0.07 | % | ||||||||||||
| $ | 2,005,482 | $ | 2,125,435 | 0.62 | % | |||||||||||||
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| Security Type | Acquisition Date | Acquisition Cost | Fair Value | Value as % of Net Assets | ||||||||||||||
Micro Cap Value Fund | ||||||||||||||||||
Acetylon Pharmaceuticals, Inc., Series B | Preferred Stock | 2/3/11 | $ | 249,997 | $ | 249,997 | 0.12 | % | ||||||||||
Cardica, Inc. | PIPE | 9/25/09 | 214,200 | 640,800 | 0.31 | % | ||||||||||||
Cardica, Inc. | Warrants | 6/7/07 | 9,302 | — | 0.00 | % | ||||||||||||
Cardica, Inc. | Warrants | 9/25/09 | 13,813 | 233,155 | 0.11 | % | ||||||||||||
Goldwater Bank, N.A. | Common Stock | 2/28/07 | 419,000 | 62,850 | 0.03 | % | ||||||||||||
Idaho Trust Bancorp | Common Stock | 8/30/06 | 500,004 | 187,224 | 0.09 | % | ||||||||||||
NeurogesX, Inc. | PIPE | 12/28/07 | 234,432 | 153,633 | 0.07 | % | ||||||||||||
NeurogesX, Inc. | Warrants | 12/28/07 | 3,800 | — | 0.00 | % | ||||||||||||
| $ | 1,394,551 | $ | 1,527,659 | 0.73 | % | |||||||||||||
Small Cap Growth Fund | ||||||||||||||||||
Angies List, Series C | Preferred Stock | 9/3/10 | $ | 4,254,284 | $ | 4,472,454 | 0.28 | % | ||||||||||
Angies List, Series D | Preferred Stock | 3/15/11 | 2,999,964 | 3,000,019 | 0.19 | % | ||||||||||||
Fluidigm Corp. | Common Stock | 12/22/06 - 11/18/09 | 2,617,258 | 1,659,142 | 0.10 | % | ||||||||||||
Greenspring Global Partners II-B, L.P. | LP Interest | 10/10/03 - 7/23/10 | 4,343,853 | 4,466,422 | 0.28 | % | ||||||||||||
Greenspring Global Partners III-B, L.P. | LP Interest | 3/16/06 - 2/4/11 | 1,275,000 | 1,280,595 | 0.08 | % | ||||||||||||
Nanosys, Inc., Series D | Preferred Stock | 11/8/05 | 2,000,000 | 776,271 | 0.05 | % | ||||||||||||
Nanosys, Inc., Series E | Preferred Stock | 8/13/10 | 184,939 | 184,939 | 0.01 | % | ||||||||||||
TargetRX, Inc. | Common Stock | 4/8/05 | 769,098 | 3,628 | 0.00 | % | ||||||||||||
Valera Pharmaceuticals, Inc. Ureteral Stent CSR | Rights | 2/1/06 - 2/2/06 | 162,615 | — | — | |||||||||||||
Valera Pharmaceuticals, Inc. VP003 (Octreotide Implant) CSR | Rights | 2/1/06 - 2/2/06 | 243,922 | — | — | |||||||||||||
Zonare Medical Systems, Inc. | Common Stock | 6/30/04 | 1,500,000 | 247 | 0.00 | % | ||||||||||||
Zonare Medical Systems, Inc. | Warrants | 6/30/04 | — | — | — | |||||||||||||
| $ | 20,107,010 | $ | 15,843,717 | 1.00 | % | |||||||||||||
Strategic Income Fund | ||||||||||||||||||
Redcorp Ventures Ltd., 13.00%, 7/11/12 | Corporate Bond | 7/5/07 | $ | 211,248 | $ | 6,195 | 0.02 | % | ||||||||||
Star Asia Finance Ltd. | Common Stock | 2/22/07 - 3/19/10 | 305,812 | 231,214 | 0.80 | % | ||||||||||||
Star Asia SPV, LLC | LLC Membership Interest | 3/19/10 | 543,868 | 190,879 | 0.66 | % | ||||||||||||
| $ | 1,060,928 | $ | 428,288 | 1.47 | % | |||||||||||||
Ultra Growth Fund | ||||||||||||||||||
Cardica, Inc. | PIPE | 9/25/09 | $ | 392,700 | $ | 1,174,800 | 0.62 | % | ||||||||||
Cardica, Inc. | Warrants | 9/25/09 | 20,625 | 348,150 | 0.19 | % | ||||||||||||
Data Sciences International, Inc., Series B | Preferred Stock | 1/20/06 | 475,001 | 807,502 | 0.43 | % | ||||||||||||
Greenspring Global Partners II-B, L.P. | LP Interest | 10/10/03 - 7/23/10 | 3,909,467 | 4,019,774 | 2.14 | % | ||||||||||||
Greenspring Global Partners III-B, L.P. | LP Interest | 3/16/06 - 2/4/11 | 1,275,000 | 1,280,595 | 0.68 | % | ||||||||||||
Nanosys, Inc., Series D | Preferred Stock | 11/8/05 | 500,001 | 194,068 | 0.10 | % | ||||||||||||
Nanosys, Inc., Series E | Preferred Stock | 8/13/10 | 46,235 | 46,235 | 0.02 | % | ||||||||||||
Ophthonix, Inc. | Common Stock | 9/23/05 | 500,000 | 504 | 0.00 | % | ||||||||||||
TargetRX, Inc. | Common Stock | 4/8/05 | 230,904 | 1,089 | 0.00 | % | ||||||||||||
TherOx, Inc., Series I | Preferred Stock | 7/7/05 | 1,000,000 | 207,317 | 0.11 | % | ||||||||||||
Xtera Communications, Inc. | Common Stock | 9/3/03 | 99,065 | 914 | 0.00 | % | ||||||||||||
Zonare Medical Systems, Inc. | Common Stock | 6/30/04 | 1,000,000 | 165 | 0.00 | % | ||||||||||||
Zonare Medical Systems, Inc. | Warrants | 6/30/04 | — | — | 0.00 | % | ||||||||||||
| $ | 9,448,998 | $ | 8,081,113 | 4.30 | % | |||||||||||||
12. PURCHASE COMMITMENTS
In September 2003, the Global Science & Technology, Small Cap Growth and Ultra Growth Funds entered into subscription agreements to acquire limited partnership interests in Greenspring Global Partners II-B, L.P. The remaining commitment amounts at March 31, 2011 were $60,000, $600,000 and $540,000, respectively. Securities held by the Funds have been designated to meet these purchase commitments.
In December 2005, the Small Cap Growth and Ultra Growth Funds entered into subscription agreements to acquire limited partnership interests in Greenspring Global Partners III-B, L.P. The remaining commitment amounts at March 31, 2011 were $225,000 per Fund. Securities held by the Funds have been designated to meet these purchase commitments.
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| MARCH 31, 2011 | ||
13. LINEOF CREDIT
The Equity Funds opened two lines of credit totaling $75,000,000, one of which is $25,000,000 uncommitted, and the other of which is $50,000,000 committed, with State Street Bank and Trust Company on June 4, 2007 (together, the “Line”). The Line is for temporary or emergency purposes such as to provide liquidity for shareholder redemptions. The Equity 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 Federal Funds rate as in effect on the date of borrowing, plus a margin, and (b) the overnight LIBOR rate as in effect on the date of borrowing, plus a margin. Commitment fees are pro-rated among the Equity Funds based upon relative average net assets. Interest expense is charged directly to a fund based upon actual amounts borrowed by the Fund.
For the period ended March 31, 2011, the following Funds had borrowings:
| Average Daily Borrowings | Number of Days Outstanding | Interest Expense | Weighted Average Annualized Interest Rate | Balance at March 31, 2011 | ||||||||||||||||
Emerging Markets Small Cap | 11,308,688 | 22 | 8,500 | 1.23 | % | — | ||||||||||||||
International Growth | 13,959,128 | 26 | 12,330 | 1.22 | % | — | ||||||||||||||
Small Cap Value | 1,865,900 | 10 | 639 | 1.23 | % | — | ||||||||||||||
Ultra Growth | 5,798,236 | 24 | 4,724 | 1.22 | % | — | ||||||||||||||
14. 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 potential loss exists due to changes in the market (market risk) or 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 invest in equity and fixed income securities of non-U.S. issuers. 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. Additionally, political or economic developments may have an adverse effect on the liquidity and volatility of portfolio securities and currency holdings.
Shareholder Concentration Risk — A significant portion of the net assets of the International Opportunities Fund is owned by a group of shareholders advised by a common investment advisor. If this group of shareholders simultaneously redeems on the advice of their investment advisor, Fund expenses may increase and performance may be materially affected. However, the Advisor has contractually agreed to waive its fees and/or reimburse the International Opportunities Fund should its operating expenses exceed 2.25% through at least January 31, 2012.
15. SECURITIES VALUATION
Equity securities (common and preferred stock) — Securities are valued as of the close of the New York Stock Exchange (generally 4:00 p.m. Eastern Time) on the valuation date. Equity securities 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 NASDAQ, such securities are valued using the NASDAQ Official Closing Price (“NOCP”) or last sales price if no NOCP is
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available. If there are no sales on the primary exchange or market on a given day, then the security is valued at the most recent bid price on the primary exchange or market 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 bid 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 (see Note 16). 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 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. These valuation procedures generally apply equally to long or short equity positions in a Fund. However, if there are no sales on the primary exchange or market on a given day for a short equity position, then the security is valued at the most recent ask price on the primary exchange or market as provided by a pricing service.
Corporate debt securities — Investments are valued at current market value by a commercial 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 commercial 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 commercial 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 are 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 most recent bid price on the primary exchange or market as provided by a pricing service.
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 Joint Pricing Committee of the Advisor and the Funds (“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, 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.
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| MARCH 31, 2011 | ||
As of March 31, 2011, the aggregate amount of fair valued securities, excluding any foreign securities fair valued pursuant to a systematic fair valuation model, as a percentage of net assets for the Funds was as follows:
Core Growth Fund | — | |||
Emerging Markets Small Cap Fund | 4.61 | % | ||
Global Opportunities Fund | 0.12 | % | ||
Global Science & Technology Fund | 1.80 | % | ||
Heritage Growth Fund | — | |||
International Growth Fund | 0.78 | % | ||
International Opportunities Fund | 0.17 | % | ||
Large Cap Value Fund | — | |||
Long/Short Fund | — | |||
Micro Cap Fund | 0.62 | % | ||
Micro Cap Value Fund | 0.96 | % | ||
Small Cap Growth Fund | 1.00 | % | ||
Small Cap Value Fund | — | |||
Strategic Income Fund | 0.69 | % | ||
Ultra Growth Fund | 4.30 | % | ||
Income Fund | 0.48 | % | ||
U.S. Treasury Fund | — |
16. FAIR VALUE MEASUREMENTS
The Funds use various methods to measure the fair value of most 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:
| Ÿ | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
| Ÿ | 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. |
| Ÿ | 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.
The Funds’ policy is to recognize transfers between levels at the end of the reporting period.
The following is a summary of the fair valuations according to the inputs used as of March 31, 2011 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 3/31/2011 | |||||||||||||
Core Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 469,656,924 | $ | — | $ | — | $ | 469,656,924 | ||||||||||
Preferred Stocks | 5,982,991 | — | — | 5,982,991 | ||||||||||||||
Short-Term Investments | — | 16,990,736 | — | 16,990,736 | ||||||||||||||
| $ | 475,639,915 | $ | 16,990,736 | $ | — | $ | 492,630,651 | |||||||||||
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| 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 3/31/2011 | |||||||||||||
Emerging Markets Small Cap Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Building Products | $ | — | $ | 12,185,040 | $ | — | $ | 12,185,040 | |||||||||
| Computer & Electronics Retail | — | 7,021,959 | — | 7,021,959 | ||||||||||||||
| Hypermarkets & Super Centers | — | 9,037,752 | — | 9,037,752 | ||||||||||||||
| Pharmaceuticals | 10,815,978 | 942,912 | — | 11,758,890 | ||||||||||||||
| Restaurants | 17,874,072 | — | 298 | 17,874,370 | ||||||||||||||
| Water Utilities | — | 3,322,354 | — | 3,322,354 | ||||||||||||||
| Other | 603,363,087 | — | — | 603,363,087 | ||||||||||||||
Preferred Stocks | 19,716,457 | — | — | 19,716,457 | ||||||||||||||
Short-Term Investments | — | 17,721,807 | — | 17,721,807 | ||||||||||||||
| $ | 651,769,594 | $ | 50,231,824 | $ | 298 | $ | 702,001,716 | |||||||||||
Global Opportunities Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Auto Parts & Equipment | $ | 1,068,418 | $ | — | $ | 16,313 | $ | 1,084,731 | |||||||||
| Health Care Equipment | 11,040,131 | 284,800 | — | 11,324,931 | ||||||||||||||
| Other | 298,857,793 | — | — | 298,857,793 | ||||||||||||||
Preferred Stocks | 1,359,510 | — | — | 1,359,510 | ||||||||||||||
Warrants | 14,073 | 84,400 | — | 98,473 | ||||||||||||||
Short-Term Investments | — | 20,422,375 | — | 20,422,375 | ||||||||||||||
| $ | 312,339,925 | $ | 20,791,575 | $ | 16,313 | $ | 333,147,813 | |||||||||||
Global Science & Technology Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Internet Software & Services | $ | 6,221,798 | $ | — | $ | 65 | $ | 6,221,863 | |||||||||
| Other | 64,828,656 | — | — | 64,828,656 | ||||||||||||||
Preferred Stocks | Computer Storage & Peripherals | — | — | 778,456 | 778,456 | |||||||||||||
| Other | 1,329,804 | — | — | 1,329,804 | ||||||||||||||
Limited Partnership Interest | — | — | 446,642 | 446,642 | ||||||||||||||
Warrants | — | 150,865 | 1,024 | 151,889 | ||||||||||||||
Short-Term Investments | — | 2,669,572 | — | 2,669,572 | ||||||||||||||
| $ | 72,380,258 | $ | 2,820,437 | $ | 1,226,187 | $ | 76,426,882 | |||||||||||
Heritage Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 83,805,954 | $ | — | $ | — | $ | 83,805,954 | ||||||||||
Short-Term Investments | — | 3,875,667 | — | 3,875,667 | ||||||||||||||
| $ | 83,805,954 | $ | 3,875,667 | $ | — | $ | 87,681,621 | |||||||||||
International Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Food Retail | $ | 8,689,053 | $ | 2,224,500 | $ | — | $ | 10,913,553 | |||||||||
| Other | 281,935,421 | — | — | 281,935,421 | ||||||||||||||
Preferred Stocks | �� | 2,347,914 | 93,313 | — | 2,441,227 | |||||||||||||
Short-Term Investments | — | 4,006,098 | — | 4,006,098 | ||||||||||||||
| $ | 292,972,388 | $ | 6,323,911 | $ | — | $ | 299,296,299 | |||||||||||
International Opportunities Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Air Freight & Logistics | $ | 5,090,674 | $ | 260,704 | $ | — | $ | 5,351,378 | |||||||||
| Auto Parts & Equipment | 2,370,257 | — | 33,022 | 2,403,279 | ||||||||||||||
| Education Services | 890,576 | — | 8,253 | 898,829 | ||||||||||||||
| Restaurants | 2,714,644 | — | 749 | 2,715,393 | ||||||||||||||
| Other | 144,531,704 | — | — | 144,531,704 | ||||||||||||||
Preferred Stocks | 1,094,404 | — | — | 1,094,404 | ||||||||||||||
Short-Term Investments | — | 26,448,788 | — | 26,448,788 | ||||||||||||||
Foreign Currency Exchange Contracts | — | 8,172 | — | 8,172 | ||||||||||||||
| $ | 156,692,259 | $ | 26,717,664 | $ | 42,024 | $ | 183,451,947 | |||||||||||
Liabilities | ||||||||||||||||||
Foreign Currency Exchange Contracts | $ | — | $ | 110,186 | $ | — | $ | 110,186 | ||||||||||
| $ | — | $ | 110,186 | $ | — | $ | 110,186 | |||||||||||
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| MARCH 31, 2011 | ||
| 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 3/31/2011 | |||||||||||||
Large Cap Value Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 1,817,914,268 | $ | — | $ | — | $ | 1,817,914,268 | ||||||||||
Short-Term Investments | — | 31,210,844 | — | 31,210,844 | ||||||||||||||
| $ | 1,817,914,268 | $ | 31,210,844 | $ | — | $ | 1,849,125,112 | |||||||||||
Long/Short Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 479,570,894 | $ | — | $ | — | $ | 479,570,894 | ||||||||||
Preferred Stocks | 5,723,250 | — | — | 5,723,250 | ||||||||||||||
Short-Term Investments | — | 112,755,949 | — | 112,755,949 | ||||||||||||||
| $ | 485,294,144 | $ | 112,755,949 | $ | — | $ | 598,050,093 | |||||||||||
Liabilities | ||||||||||||||||||
Equity Contracts | $ | (8,043,286 | ) | $ | — | $ | — | $ | (8,043,286 | ) | ||||||||
Securities Sold Short | (113,692,748 | ) | — | — | (113,692,748 | ) | ||||||||||||
| $ | (121,736,034 | ) | $ | — | $ | — | $ | (121,736,034 | ) | |||||||||
Micro Cap Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Health Care Equipment | $ | 22,011,330 | $ | 1,213,960 | $ | — | $ | 23,225,290 | |||||||||
| Specialized Finance | — | — | 231,000 | 231,000 | ||||||||||||||
| Other | 303,400,541 | — | — | 303,400,541 | ||||||||||||||
Preferred Stocks | 3,259,734 | — | — | 3,259,734 | ||||||||||||||
Warrants | — | 680,475 | — | 680,475 | ||||||||||||||
Short-Term Investments | — | 12,467,754 | — | 12,467,754 | ||||||||||||||
| $ | 328,671,605 | $ | 14,362,189 | $ | 231,000 | $ | 343,264,794 | |||||||||||
Micro Cap Value Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Biotechnology | $ | 1,707,002 | $ | 153,633 | $ | — | $ | 1,860,635 | |||||||||
| Diversified Banks | — | — | 187,224 | 187,224 | ||||||||||||||
| Health Care Equipment | 8,836,530 | 640,800 | — | 9,477,330 | ||||||||||||||
| Restaurants | 2,034,000 | 476,773 | — | 2,510,773 | ||||||||||||||
| Specialized Finance | 6,411,950 | — | 62,850 | 6,474,800 | ||||||||||||||
| Other | 168,862,884 | — | — | 168,862,884 | ||||||||||||||
Preferred Stocks | Pharmaceuticals | — | — | 249,997 | 249,997 | |||||||||||||
Warrants | — | 233,155 | — | 233,155 | ||||||||||||||
Short-Term Investments | — | 18,896,780 | — | 18,896,780 | ||||||||||||||
| $ | 187,852,366 | $ | 20,401,141 | $ | 500,071 | $ | 208,753,578 | |||||||||||
Liabilities | ||||||||||||||||||
Equity Contracts | $ | (28,000 | ) | $ | — | $ | — | $ | (28,000 | ) | ||||||||
Foreign Currency Exchange Contracts | (959,307 | ) | — | — | (959,307 | ) | ||||||||||||
| $ | (987,307 | ) | $ | — | $ | — | $ | (987,307 | ) | |||||||||
Small Cap Growth | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Health Care Equipment | $ | 23,401,753 | $ | — | $ | 247 | $ | 23,402,000 | |||||||||
| Health Care Services | 15,198,616 | — | 3,628 | 15,202,244 | ||||||||||||||
| Life Sciences Tools & Services | — | — | 1,659,142 | 1,659,142 | ||||||||||||||
| Other | 1,405,974,525 | — | — | 1,405,974,525 | ||||||||||||||
Preferred Stocks | Biotechnology | — | — | 961,210 | 961,210 | |||||||||||||
| Internet Software & Services | — | — | 7,472,473 | 7,472,473 | ||||||||||||||
Limited Partnership Interest | — | — | 5,747,017 | 5,747,017 | ||||||||||||||
Short-Term Investments | — | 135,131,236 | — | 135,131,236 | ||||||||||||||
| $ | 1,444,574,894 | $ | 135,131,236 | $ | 15,843,717 | $ | 1,595,549,847 | |||||||||||
Small Cap Value Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 222,836,352 | $ | — | $ | — | $ | 222,836,352 | ||||||||||
Short-Term Investments | — | 15,433,943 | — | 15,433,943 | ||||||||||||||
| $ | 222,836,352 | $ | 15,433,943 | $ | — | $ | 238,270,295 | |||||||||||
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| 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 3/31/2011 | |||||||||||||
Strategic Income Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Diversified REITs | $ | — | $ | 231,214 | $ | — | $ | 231,214 | |||||||||
| Other | 25,662,016 | — | — | 25,662,016 | ||||||||||||||
Preferred Stocks | 305,435 | 4,792 | — | 310,227 | ||||||||||||||
Limited Liability Company Membership Interest | — | — | 190,879 | 190,879 | ||||||||||||||
Limited Partnership Interest | 637,734 | — | — | 637,734 | ||||||||||||||
Corporate Bonds | — | — | 6,195 | 6,195 | ||||||||||||||
Mutual Funds | 414,180 | — | — | 414,180 | ||||||||||||||
Short-Term Investments | — | 1,449,960 | — | 1,449,960 | ||||||||||||||
| $ | 27,019,365 | $ | 1,685,966 | $ | 197,074 | $ | 28,902,405 | |||||||||||
Ultra Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Health Care Equipment | $ | 15,414,630 | $ | 1,174,800 | $ | 165 | $ | 16,589,595 | |||||||||
| Health Care Services | 1,865,101 | — | 1,089 | 1,866,190 | ||||||||||||||
| Internet Software & Services | 11,261,272 | — | 914 | 11,262,186 | ||||||||||||||
| Personal Products | — | — | 504 | 504 | ||||||||||||||
| Other | 149,896,149 | — | — | 149,896,149 | ||||||||||||||
Preferred Stocks | Biotechnology | — | — | 240,303 | 240,303 | |||||||||||||
| Health Care Technology | — | — | 1,014,819 | 1,014,819 | ||||||||||||||
Limited Partnership Interest | — | — | 5,300,369 | 5,300,369 | ||||||||||||||
Warrants | — | 348,150 | — | 348,150 | ||||||||||||||
Short-Term Investments | — | 1,470,331 | — | 1,470,331 | ||||||||||||||
| $ | 178,437,152 | $ | 2,993,281 | $ | 6,558,163 | $ | 187,988,596 | |||||||||||
Income Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Asset Backed Securities | $ | — | $ | 3,196,537 | $ | — | $ | 3,196,537 | ||||||||||
Collateralized Mortgage Obligations | — | 30,667,479 | — | 30,667,479 | ||||||||||||||
Corporate Bonds | — | 42,631,785 | — | 42,631,785 | ||||||||||||||
Municipal Bonds | — | 1,198,522 | — | 1,198,522 | ||||||||||||||
Mutual Funds | 757,871 | — | — | 757,871 | ||||||||||||||
Exchange Traded Funds | 649,200 | — | — | 649,200 | ||||||||||||||
U.S. Government Agency Securities | — | 27,196,528 | — | 27,196,528 | ||||||||||||||
U.S. Treasury Bonds | — | 14,193,417 | — | 14,193,417 | ||||||||||||||
U.S. Treasury Inflation Protected Securities | — | 2,784,271 | — | 2,784,271 | ||||||||||||||
Preferred Stocks | 1,396,850 | — | — | 1,396,850 | ||||||||||||||
Short-Term Investments | — | 8,259,591 | — | 8,259,591 | ||||||||||||||
| $ | 2,803,921 | $ | 130,128,130 | $ | — | $ | 132,932,051 | |||||||||||
U.S. Treasury Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
U.S. Government Obligations | $ | — | $ | 155,524,560 | $ | — | $ | 155,524,560 | ||||||||||
Short-Term Investments | — | 589,549 | — | 589,549 | ||||||||||||||
| $ | — | $ | 156,114,109 | $ | — | $ | 156,114,109 | |||||||||||
The valuation techniques used by the Funds to measure fair value for the period ended March 31, 2011 maximized the use of observable inputs and minimized the use of unobservable inputs.
The Funds have recategorized securities that can be converted by the Funds at any time, without limitation, into securities with an active market price since they are not identical securities. This recategorization has resulted in significant transfers from level 1 to level 2.
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| MARCH 31, 2011 | ||
The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) for the Funds during the period ended March 31, 2011:
| Fund | Market Value Beginning Balance 9/30/2010 | Purchases at Cost/ Sales (Proceeds) | Realized Gain/(Loss) | Change in Unrealized Appreciation (Depreciation) | Transfers in at Market Value | Transfers out at Market Value | Market Value Ending Balance 3/31/2011 | Net Change in Unrealized Appreciation (Depreciation) on Investments Held at 3/31/2011 | ||||||||||||||||||||||||
Emerging Markets Small Cap Fund | ||||||||||||||||||||||||||||||||
Common Stocks | $ | 298 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 298 | $ | — | ||||||||||||||||
Global Opportunities Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 21,790 | — | — | (5,477 | ) | — | — | 16,313 | (5,477 | ) | ||||||||||||||||||||||
Global Science & Technology Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 65 | — | — | — | — | — | 65 | — | ||||||||||||||||||||||||
Preferred Stocks | 770,952 | — | — | 7,504 | — | — | 778,456 | 7,504 | ||||||||||||||||||||||||
Limited Partnership Interest | 421,896 | — | — | 24,746 | — | — | 446,642 | 24,746 | ||||||||||||||||||||||||
Warrants | 8 | — | — | 1,016 | — | — | 1,024 | 1,016 | ||||||||||||||||||||||||
| 1,192,921 | — | — | 33,266 | — | — | 1,226,187 | 33,266 | |||||||||||||||||||||||||
International Opportunities Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 52,763 | — | — | (10,739 | ) | — | — | 42,024 | (10,739 | ) | ||||||||||||||||||||||
Micro Cap Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 281,050 | — | — | (50,050 | ) | — | — | 231,000 | (50,050 | ) | ||||||||||||||||||||||
Micro Cap Value Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 291,470 | — | — | (41,396 | ) | — | — | 250,074 | (41,396 | ) | ||||||||||||||||||||||
Preferred Stocks | — | 249,997 | — | — | — | — | 249,997 | — | ||||||||||||||||||||||||
| 291,470 | 249,997 | — | (41,396 | ) | — | — | 500,071 | (41,396 | ) | |||||||||||||||||||||||
Small Cap Growth Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 279,065 | — | — | (275,190 | ) | 1,659,142 | — | 1,663,017 | (275,190 | ) | ||||||||||||||||||||||
Preferred Stocks | 7,832,752 | 3,000,019 | — | (739,946 | ) | — | (1,659,142 | ) | 8,433,683 | 218,170 | ||||||||||||||||||||||
Limited Partnership Interest | 5,253,847 | 150,000 | — | 343,170 | — | — | 5,747,017 | 343,170 | ||||||||||||||||||||||||
Warrants | 11 | — | (11 | ) | — | — | — | — | — | |||||||||||||||||||||||
Rights | 214,781 | — | — | (214,781 | ) | — | — | — | (214,781 | ) | ||||||||||||||||||||||
| 13,580,456 | 3,150,019 | (11 | ) | (886,747 | ) | 1,659,142 | (1,659,142 | ) | 15,843,717 | 71,369 | ||||||||||||||||||||||
Strategic Income Fund | ||||||||||||||||||||||||||||||||
Limited Liability Company Membership Interest | 225,655 | (34,776 | ) | — | — | — | — | 190,879 | — | |||||||||||||||||||||||
Corporate Bonds | 23,692 | (20,600 | ) | 832 | 2,271 | — | — | 6,195 | (15,470 | ) | ||||||||||||||||||||||
| 249,347 | (55,376 | ) | 832 | 2,271 | — | — | 197,074 | (15,470 | ) | |||||||||||||||||||||||
Ultra Growth Fund | ||||||||||||||||||||||||||||||||
Common Stocks | 186,132 | — | — | (183,460 | ) | — | — | 2,672 | (183,460 | ) | ||||||||||||||||||||||
Preferred Stocks | 1,477,072 | — | — | (221,950 | ) | — | — | 1,255,122 | (221,950 | ) | ||||||||||||||||||||||
Limited Partnership Interest | 4,831,951 | 150,000 | — | 318,418 | — | — | 5,300,369 | 318,418 | ||||||||||||||||||||||||
| $ | 6,495,155 | $ | 150,000 | $ | — | $ | (86,992 | ) | $ | — | $ | — | $ | 6,558,163 | $ | (86,992 | ) | |||||||||||||||
17. FAIR VALUEOF DERIVATIVE INSTRUMENTS*
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure:
WASATCH INTERNATIONAL OPPORTUNITIES FUND
Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Asset Derivatives | ||||||||||||||||||||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 118,358 | $ | — | $ | — | $ | — | $ | 118,358 | ||||||||||||
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| WASATCH FUNDS — Notes to Financial Statements (continued) | ||
The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Net realized gain (loss) on investments and foreign currency translations | $ | — | $ | (75,214 | ) | $ | — | $ | — | $ | — | $ | (75,214 | ) | ||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) on investments and foreign currency translations | $ | — | $ | 217,182 | $ | — | $ | — | $ | — | $ | 217,182 | ||||||||||||
LONG/SHORT FUND
Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Liabilities Derivatives | ||||||||||||||||||||||||
Call options written at value | $ | — | $ | — | $ | — | $ | 8,043,286 | $ | — | $ | 8,043,286 | ||||||||||||
The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Net realized gain on options written | $ | — | $ | — | $ | — | $ | 2,619,432 | $ | — | $ | 2,619,432 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) on investments, options and foreign currency translations | $ | — | $ | — | $ | — | $ | 1,128,085 | $ | — | $ | 1,128,085 | ||||||||||||
WASATCH MICRO CAP VALUE FUND
Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Liabilities Derivatives | ||||||||||||||||||||||||
Call options written at value | $ | — | $ | — | $ | — | $ | 28,000 | $ | — | $ | 28,000 | ||||||||||||
Unrealized depreciation on foreign currency exchange contracts | — | 959,307 | — | — | — | 959,307 | ||||||||||||||||||
| $ | — | $ | 959,307 | $ | — | $ | 28,000 | $ | — | $ | 987,307 | |||||||||||||
The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Net realized gain on options written | $ | — | $ | — | $ | — | $ | 678,440 | $ | — | $ | 678,440 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) on investments, options and foreign currency translations | $ | — | $ | (959,307 | ) | $ | — | $ | 79,371 | $ | — | $ | (879,936 | ) | ||||||||||
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ULTRA GROWTH FUND
The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended March 31, 2011:
| Derivatives not accounted for as hedging instruments under Statement 133 | ||||||||||||||||||||||||
| Interest Rate Contracts | Foreign Exchange Contracts | Credit Contracts | Equity Contracts | Other Contracts | Total | |||||||||||||||||||
Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Net realized gain (loss) investments and foreign currency translations | $ | — | $ | — | $ | — | $ | (187,027 | ) | $ | — | $ | (187,027 | ) | ||||||||||
| * | See Note 2 — Significant Accounting Policies for additional information. |
For the period ended March 31, 2011, the average monthly balance of outstanding derivative financial instruments was as follows:
| International Opportunities Fund | Micro Cap Fund | Long/Short Fund | Ultra Growth | |||||||||||||
Forward currency exchange contracts: | ||||||||||||||||
Average number of contracts — U.S. dollars purchased | 3 | 1 | — | — | ||||||||||||
Average U.S. dollar amounts purchased | $ | 6,587,817 | $ | 9,578,739 | $ | — | $ | — | ||||||||
Option contracts: | ||||||||||||||||
Average number of call contracts purchased | — | — | — | 167 | ||||||||||||
Average number of call contracts written | — | 650 | 15,470 | — | ||||||||||||
Average value of call contracts purchased | $ | — | $ | — | $ | — | $ | 14,167 | ||||||||
Average value of call contracts written | $ | — | $ | 49,417 | $ | 6,316,383 | $ | — | ||||||||
18. SUBSEQUENT EVENTS
Effective April 1, 2011, the Wasatch Global Science & Technology Fund changed its name to Wasatch World Innovators Fund.
Wasatch Emerging India Fund, an additional series of the Trust, commenced operations on April 26, 2011.
Effective May 24, 2011, Laura Geritz will serve as Portfolio Manager for the Wasatch International Opportunities Fund. Effective June 30, 2011, Blake Walker will no longer serve as Lead Portfolio Manager for the Wasatch International Opportunities Fund.
Effective June 30, 2011, Robert Gardiner and Blake Walker will no longer serve as Lead Portfolio Managers for the Wasatch Global Opportunities Fund. Effective June 30, 2011, Roger D. Edgley, CFA and JB Taylor will serve as Lead Portfolio Managers for the Wasatch Global Opportunities Fund.
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Management Information. The business affairs of Wasatch Funds are supervised by its Board of Trustees. The Board consists of four trustees who are elected and serve until their successors are elected and qualified.
The trustees and executive officers of Wasatch Funds and their principal occupations for at least the last five years are set forth below.
| 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 Trustee2 | |||||||
Independent Trustees | ||||||||||||
James U. Jensen, J.D., MBA c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 66 | Trustee and Chairman of the Board | Indefinite Served as Chairman of the Board since 2004 and Trustee since 1986 | Chief Executive Officer of Clearwater Governance Group (an operating board governance consulting company) July 2008 to present; Co-Founder and Chairman of the Board of Intelisum, Inc. (a company pursuing computer and measurement technology and products) 2001 to 2008; Consultant on corporate growth and technology transfer since 2004; Vice President, Corporate Development, Legal Affairs and General Counsel, and Secretary, NPS Pharmaceuticals, Inc. from 1991 to 2004. | 17 | Private companies and foundations. Director of Cognigen Networks, Inc. (Internet and relationship enabled marketing company) since December 2007. Director of Bayhill Capital Corp. (telephone communications) since December 2007. | |||||||
William R. Swinyard, Ph.D. c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 70 | Trustee and Chairman of the Audit Committee | Indefinite Served as Chairman of the Audit Committee since 2004 and Trustee since 1986 | Professor of Business Management and Holder of the Fred G. Meyer Chair of Marketing (Emeritus), Brigham Young University since 1978. | 17 | None | |||||||
D. James Croft, Ph.D. c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 69 | Trustee | Indefinite Served as Trustee since 2005 | Consultant since 2004 and Founder & Executive Director, Mortgage Asset Research Institute from 1990 to 2004. | 17 | None | |||||||
Miriam M. Allison3 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 63 | Trustee | Indefinite Served as Trustee since 2010 | Rancher since 2004. From 2001 to 2005, Chairman of UMB Fund Services, Inc. | 17 | Director, Northwestern Mutual Series Fund, Inc. (27 portfolios) since 2006. | |||||||
Interested Trustee | ||||||||||||
Samuel S. Stewart, Jr., Ph.D. CFA4 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 68 | President and Trustee | Indefinite Served as President and Trustee since 1986 | Chairman of the Board for the Advisor since 1975; Chief Investment Officer of the Advisor since 2004; Director of Research of the Advisor from 1975 to 2004; Chairman of the Board of Wasatch Funds from 1986 to 2004. | 17 | None | |||||||
| 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 (s)he attains the age of 72 years. |
| 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 | Ms. Allison previously owned shares of UMB Financial Corp., the parent company of UMB Fund Services, Inc., the Funds’ transfer agent. As of the date of this statement, Ms. Allison no longer owns such shares. |
| 4 | Mr. Stewart is an Interested Trustee because he serves as the Chairman of the Board of the Advisor. |
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| Name, Address and Age | Position(s) Held with Wasatch Funds | Term of Office and Length of Time Served | Principal Occupation(s) during Past 5 Years | |||
Officers | ||||||
Daniel D. Thurber 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 41 | Vice President | Indefinite Served as Vice President since February 2007 | General Counsel, Chief Compliance Officer and Director of Compliance for the Advisor since 2006; Chief Compliance Officer and Secretary for Wasatch Funds from May 2006 to February 2007; Associate and Partner at Dorsey & Whitney LLP from 2001 to 2006. | |||
Russell L. Biles 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 43 | 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; Counsel for the Advisor since October 2006; Senior Compliance Administrator for the Advisor from October 2005 to October 2006; Attorney and Managing Member of Nicholls Nicholls Biles & Bower, LLC from 2002 to 2005. | |||
Eric Huefner 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 46 | Vice President | Indefinite Served as Vice President from February 2008 to May 2011 and Treasurer from November 2008 to May 2009 | Vice President for Wasatch Funds from February 2008 to May 2011; Director of Mutual Funds for the Advisor since June 2006; Business Director, Campbell Soup Company, March 2003 to May 2006. | |||
Cindy B. Firestone, CPA 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 53 | Treasurer | Indefinite Served as Treasurer since May 2009 | Treasurer for Wasatch Funds since May 2009, Assistant Treasurer for Wasatch Funds from November 2008 to May 2009; Internal Auditor for the Advisor since December 2002. | |||
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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PROXY VOTING POLICIES, PROCEDURESAND RECORD
A description of the policies and procedures that Wasatch Advisors 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 www.wasatchfunds.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 on the Funds’ website at www.wasatchfunds.com and the SEC’s website at www.sec.gov no later than August 31 for the prior 12 months ending June 30.
QUARTERLY PORTFOLIO HOLDINGS DISCLOSUREON FORM N-Q
The Funds file their complete schedules of investments with the SEC for their first and third fiscal quarters of each fiscal year, commencing with the quarter ended December 31, 2004, on Form N-Q. The Funds’ Form N-Q is available on the SEC’s website at www.sec.gov, and may be viewed 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).
BOARD APPROVALFOR ADVISORY CONTRACTS
At a meeting held on November 9 - 10, 2010 (the “Meeting”), the Board of Trustees of Wasatch Funds Trust (the “Trust”), including the Independent Trustees, unanimously approved the Advisory and Service Contract (the “Advisory Agreement”) between the Trust and Wasatch Advisors, Inc. (the “Advisor”) on behalf of each series of the Trust (each a “Fund”); the sub-advisory agreement between the Advisor and Hoisington Investment Management Company (“HIMCO”) on behalf of the Wasatch-Hoisington U.S. Treasury Fund (the “U.S. Treasury Fund”); and the sub-advisory agreement between the Advisor and 1st Source Corporation Investment Advisors, Inc. (“1st Source”) on behalf of the Wasatch-1st Source Income Fund (the “Income Fund”) (the foregoing sub-advisory agreements are each a “Sub-Advisory Agreement” and collectively, the “Sub-Advisory Agreements,” and HIMCO and 1st Source are each a “Sub-Advisor”).
In preparation for their role in the evaluation of the Advisory Agreement and Sub-Advisory Agreements, the Independent Trustees met in Executive Session on November 2, 2010 (Mr. Croft participated via telephone at this session) and November 9, 2010. At these Board Meetings and Executive Sessions, they were joined by independent legal counsel. In addition to these Executive Sessions, the Independent Trustees also met at their quarterly meetings as well as at other times between the quarterly meetings with management. In evaluating the Advisory Agreement and Sub-Advisory Agreements, the Independent Trustees took into account the information provided and the knowledge gained from these meetings. In advance of the November meetings, the Board and independent legal
counsel received materials and other information which outlined, among other things:
| Ÿ | the terms and conditions of the Advisory Agreement and Sub-Advisory Agreements, including the nature, extent and quality of services provided by the Advisor and each Sub-Advisor; |
| Ÿ | the organization and business operations of the Advisor and Sub-Advisors, including the experience of persons who have managed and who will manage the respective Fund; |
| Ÿ | the profitability of the Advisor from serving as advisor to the respective Fund (plus profitability analysis for advisors to unaffiliated investment companies); |
| Ÿ | the management fees of the Advisor, including comparisons of such fees with the management fees of comparable, unaffiliated funds prepared by an independent third party and the Advisor’s fees for other clients; |
| Ÿ | the sub-advisory fees of each Sub-Advisor with respect to the U.S. Treasury Fund and Income Fund (including the respective Sub-Advisor’s fee schedule for other clients); |
| Ÿ | the expenses of each Fund, including comparisons with the expense ratios of comparable, unaffiliated funds compiled by an independent third party; and |
| Ÿ | the respective Fund’s past performance plus such Fund’s performance compared to funds of similar investment objectives compiled by independent third parties and with recognized benchmarks. |
As the Independent Trustees reviewed the materials, they also requested in writing (through their independent legal counsel) and received supplemental information and responses to various questions. In addition to the material provided by the Advisor, the Independent Trustees also received from independent counsel a legal memorandum outlining, among other things, the duties of the Independent Trustees under the Investment Company Act of 1940 (the “1940 Act”), as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an advisor’s fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of trustees have fulfilled their duties and factors to be considered by the Board in voting on advisory agreements.
During the Executive Sessions noted above, the Independent Trustees met with independent legal counsel to discuss, among other things, the Advisory and Sub-Advisory Agreements, the information provided, and the Independent Trustees’ duties in reviewing and approving advisory contracts. The Independent Trustees, in consultation with independent counsel, also reviewed the factors set out in judicial decisions and SEC directives relating to the approval of advisory contracts. The information provided for the Meeting supplements the information the Board receives throughout the year regarding a Fund’s performance, expense ratios, portfolio composition, trade execution and sales activity. The Independent Trustees considered the legal advice provided by legal counsel, the material provided, and relied upon their knowledge of the Advisor, Sub-Advisors, the services provided and the Funds resulting from their
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meetings and other interactions throughout the year and their own business judgment in determining the factors to be considered in evaluating advisory agreements. Each Independent Trustee may have accorded different weight to the various factors in reaching his or her conclusions with respect to the Advisory Agreement and applicable Sub-Advisory Agreement. The Independent Trustees did not identify any single factor as all-important or controlling. The Independent Trustees’ considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below.
| A. | NATURE, EXTENTAND QUALITYOF SERVICES |
In evaluating the nature, extent and quality of the Advisor’s and each Sub-Advisor’s services, the Independent Trustees reviewed information concerning the types of services (advisory and non-advisory or administrative services) that the Advisor and Sub-Advisors provide to the respective Fund; the performance record of the applicable Fund; and information describing the Advisor’s and each Sub-Advisor’s organization and business. In connection with their service as Independent Trustees of the Trust, the Independent Trustees also periodically have met with the Advisor’s and each Sub-Advisor’s personnel and have evaluated their professional experience, qualifications and credentials as well as their investment approach and research process. The Independent Trustees considered the compensation arrangements of portfolio managers to evaluate the ability of the Advisor to attract and retain high quality investment personnel, preserve stability, and reward performance without providing an incentive for taking undue risks. In addition to the foregoing, in light of the regulatory emphasis on compliance, in reviewing the services that have been provided to a Fund, the Independent Trustees also considered the Advisor’s and each Sub-Advisor’s compliance and regulatory history.
In their review of services, the Independent Trustees also evaluated the quality of administrative or non-advisory services provided. The terms of the Advisory Agreement provide that the Advisor shall administer the Trust’s affairs to the extent requested by and subject to the supervision of the Board for the period and terms of the contract. In this regard, the Advisor provides business, administrative, compliance, marketing and other services required to operate the Funds, such as assistance with preparation and filing of regulatory and tax reports, preparation and distribution of prospectuses and shareholder reports, provision of information to Fund trustees, analysis to ensure compliance with federal and state laws and regulations, valuation of portfolio securities, and oversight of the performance of the Funds’ service providers (e.g., administrator, fund accountant, transfer agent and custodian). The Advisor also pays for office space and facilities for each Fund.
With respect to the Sub-Advisors, it was noted that the Sub-Advisory Agreements are essentially agreements for portfolio management services only and the Sub-Advisors were not expected to supply other significant administrative services.
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 Agreements were satisfactory on behalf of each applicable Fund.
| B. | THE INVESTMENT PERFORMANCEOFTHE FUNDS |
In evaluating each Fund’s performance, the Trustees reviewed both short-term and long-term performance of each Fund relative to its peer group and relevant benchmarks. More specifically, the Independent Trustees reviewed, among other things, a report prepared by an unaffiliated third party comparing the respective Fund’s total return for the one-, two-, three-, four-, five-, and 10-year periods ending August 31, 2010 (or for the periods available for Funds that did not exist for part of the foregoing time frame) compared to the performance of unaffiliated funds with similar investment objectives or classifications (a “Peer Group”) and a benchmark assigned by the unaffiliated third party (the “Benchmark”) for the prescribed periods. The Independent Trustees also reviewed materials reflecting the respective Fund’s historic performance for the quarter, one-, three-, five-, and 10-year periods ended September 30, 2010 (or for the periods available for Funds that did not exist for part of the foregoing time frame together with the average annual return since inception for Funds with the shorter duration) compared to its respective benchmarks and unaffiliated funds in its investment category. In addition, the Independent Trustees received reports prepared by a second unaffiliated party, which generally included an analyst report on the respective Fund for the following Funds: Core Growth, Global Opportunities, Global Science & Technology, Heritage Growth, International Growth, International Opportunities, Large Cap Value (formerly Wasatch-1st Source Income Equity Fund), Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value, and Ultra Growth. This information supplemented the performance information provided to the Board at each of its quarterly meetings as well as at other meetings or Executive Sessions during the year. Further, the Independent Trustees also recognized the limitations on some of the usefulness of the performance comparison information as the closest Peer Group for a Fund may not adequately reflect the Wasatch Fund’s investment strategies and may be invested in sectors or industries in which the respective Fund has limited or no exposure. Based on their review of performance, the Independent Board Members determined that each Fund’s investment performance over time had been satisfactory, noting, in particular the following.
The Emerging Markets Small Cap Fund has had generally favorable performance outperforming the Benchmark for the one and two years ended August 31, 2010. The Core Growth Fund’s performance over time has been satisfactory outperforming its Benchmark in the 10-year period ended August 31, 2010 and providing generally comparable performance to its Benchmark for the shorter periods. Although the Global Opportunities Fund has only been operating for a short time; limiting a meaningful assessment of its performance, during the time available, the Fund had favorable performance, outperforming its Benchmark for the one year ended August 31, 2010. Although the Global Science & Technology Fund has underperformed its
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Benchmark in longer periods, the Fund had favorable performance for the one year ended August 31, 2010, outperforming the Benchmark. The Heritage Growth Fund has had generally favorable performance, outperforming its Benchmark for each of the last four years ended August 31, 2010. The U.S. Treasury Fund continues to provide solid performance, outperforming the Benchmark for the one and two years ended August 31, 2010 and ranking in the first quintile of its performance peer universe for each of the past five years as well as the 10 years ended August 31, 2010. The International Growth, International Opportunities, and Micro Cap Value Funds had generally favorable performance, outperforming their respective Benchmark for each of the last five years ended August 31, 2010. Similarly, the Small Cap Growth Fund has had favorable performance, outperforming its Benchmark for each of the last five years and for the 10 year period ended August 31, 2010. Although the Micro Cap Fund and Small Cap Value Fund each outperformed its respective Benchmark over the 10-year period, these Funds have underperformed their Benchmarks in more recent periods. The Board, however, continues to review with management the investment process, investment philosophy and initiatives taken to address performance issues and is satisfied with the steps taken but will continue to monitor performance. Although the Strategic Income Fund underperformed its Benchmark for the longer periods, the Fund improved its performance outperforming its Benchmark for the one year ended August 31, 2010. Although the Ultra Growth Fund has had some mixed results during its tenure, the Fund outperformed its Benchmark in the most recent one-, two-, and three-year periods ended August 31, 2010 as well as the 10-year period ended August 31, 2010. Although the Income Fund underperformed its Benchmark for the one year ended August 31, 2010, the Income Fund’s performance has been satisfactory generally providing performance comparable to its Benchmark during longer periods. Although the Large Cap Value Fund underperformed its Benchmark for the one and two years ended August 31, 2010, the Large Cap Value Fund has provided satisfactory performance outperforming the Benchmark over the longer periods. Similarly, although the Long/Short Fund underperformed its Benchmark in the one year period ended August 31, 2010, it outperformed the Benchmark in the longer periods.
| C. | FEES, EXPENSESAND PROFITABILITY |
| 1. | Fees and Expenses |
The Independent Trustees considered the fees of the Advisor and Sub-Advisors. In their evaluation of fees and expenses, the Independent Trustees reviewed the Advisor’s management fees and expense ratios for each Fund in absolute terms as well as with comparisons of fees and expenses of funds with similar objectives. In this regard, the Independent Trustees reviewed and considered, among other things, comparisons of the respective Fund’s actual management fees, total expenses (including and excluding 12b-1/non-12b-1 service fees), and non-management expenses (such as transfer agency, custodian, administrative and accounting fees) with those of unaffiliated funds in its
Peer Group compiled by an independent third party as well as comparisons of the respective Fund’s management fees and net expense ratios with those of a custom peer group provided by the Advisor. In reviewing fees, the Independent Trustees also considered the expense limitation agreement provided by the Advisor for the Funds, the amounts the Advisor has reimbursed to the Funds for the last three fiscal years (if any) and any proposed changes to the expense limitation agreement (as described below). In their evaluation of the fees, the Independent Trustees considered, although were not limited to, the following factors.
With respect to the Micro Cap, Micro Cap Value, Small Cap Growth, and Small Cap Value Funds, each Fund had advisory fees and expense ratios above the median of its Peer Group. The Trustees noted, however, that the Peer Group of the micro cap funds may not adequately represent the strategies of the Funds and thus may limit some of the usefulness of the comparisons. In addition, in evaluating the fees, the Independent Trustees considered the nature of the asset class (small or mid cap), the Advisor’s expertise in this asset class, the due diligence needed to evaluate these small companies and the capacity constraints of this asset class. The Independent Trustees recognized that an integral part of the Advisor’s strategy is to close Funds as necessary, particularly Funds investing in small and micro cap companies, to protect shareholders. More specifically, the Independent Trustees recognized that a larger asset size in the small and micro cap funds could dilute performance as it is more difficult to replicate performance in these funds at larger asset sizes. From time to time, the Funds that have been closed to investors include: Core Growth, International Growth, International Opportunities, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value and Ultra Growth Funds. The Independent Trustees seek to encourage the Advisor’s practice of closing Funds when necessary or appropriate to maintain or enhance performance. However, this practice also limits the Advisor’s ability to earn fees on a larger asset base and exposes the Advisor to reduced revenues from asset outflows if the Fund is closed to, or is otherwise limited in, permitting new investments. In addition to the foregoing, the Trustees considered performance when evaluating fees and, as noted above, the Emerging Markets Small Cap, Micro Cap Value, and Small Cap Growth Funds all had favorable performance. Although the Micro Cap Fund and Small Cap Value Fund have lagged their Benchmarks in more recent years, the Independent Trustees noted that such Funds outperformed their Benchmarks over the 10-year period and were satisfied with steps taken to evaluate and address any performance issues. The Independent Trustees further recognized the Advisor’s research intensive investment approach and related costs, including, in particular, the costs of its research personnel. In addition, the advisory fees and expense caps for the Micro Cap and Micro Cap Value Funds were reduced in 2009. Given the foregoing factors, among others, the Independent Trustees determined the advisory fees for the foregoing Funds were acceptable.
With respect to the Emerging Markets Small Cap, Global Opportunities, International Growth, and International
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Opportunities Funds, the Independent Trustees noted that the advisory fees and expense ratios were above the median of their respective Peer Group. As with the above Funds, the Independent Trustees considered any capacity constraints of these Funds which limit their asset size. The Independent Trustees also noted that the international aspect of these Funds adds an additional cost to the Advisor’s research intensive investment program to cover an international landscape. In addition, the Independent Trustees recognized, as noted above, the above-average performance of the Funds. Finally, the Independent Trustees noted that the Advisor has agreed to reduce the fees and expense caps applicable to the Global Opportunities Fund and International Growth Fund. More specifically, the advisory fee of the International Growth Fund will be reduced from 1.50% of average daily net assets to 1.25% of average daily net assets. Further, the Advisor has agreed to reduce the expense cap by 20 basis points. Accordingly, the Advisor has agreed to reimburse the Fund for total annual operating expenses in excess of 1.75% until at least January 31, 2012 (excluding interest, taxes, brokerage commissions, other investment related costs and extraordinary expenses). Similarly, the advisory fee of the Global Opportunities Fund will be reduced from 1.95% of average daily net assets to 1.50% of average daily net assets. The expense cap will also be reduced by 30 basis points. The Advisor therefore will reimburse the Fund for total annual operating expenses in excess of 1.95% until at least January 31, 2012 (excluding interest, taxes, brokerage commissions, other investment related costs and extraordinary expenses). The Trustees noted that although the Advisor originally proposed advisory fee waivers for the Global Opportunities and International Growth Funds that could be eliminated, the Advisor has agreed to permanent reductions in these advisory fees at the request of the Trustees. The Trustees also recognized that the advisory fees for the International Opportunities Fund were reduced in 2009. Given the foregoing factors, among others, the Independent Trustees determined the advisory fees for the foregoing Funds were acceptable.
With respect to the Core Growth Fund, the Independent Trustees noted the advisory fee was slightly above, and the expense ratio was the same as, the median for its Peer Group. The Trustees also considered the capacity constraints of the Fund, the research intensive approach of the Advisor as well as the performance of the Fund as noted above. Given the foregoing factors, among others, the Independent Trustees determined that the advisory fee for the foregoing Fund was acceptable.
With respect to the Heritage Growth, Long/Short, and Strategic Income Funds, the Independent Trustees noted that the advisory fees and expense ratios of these Funds were below or equal to the median of their respective Peer Group. Given their investment strategies, these Funds are also generally not subject to capacity constraints limiting the assets size of the Funds upon which advisory fees are calculated. Further, the Independent Trustees considered the Funds’ performance as outlined above. Given the foregoing factors, among others, the Independent Trustees determined that the advisory fees for the foregoing Funds were acceptable.
With respect to the Ultra Growth Fund, the Independent Trustees noted that the advisory fee and expense ratio was above the median for its Peer Group. The Trustees considered the capacity constraints applicable to the Fund. The Independent Trustees also noted that the Fund had favorable performance for the last two years ended August 31, 2010, as described above. The Trustees also considered that the Advisor had agreed to reduce the advisory fee and expense limitation. In this regard, the advisory fee will be reduced from 1.25% to 1.00% of average daily net assets and the expense cap will be reduced 25 basis points. Accordingly, the Advisor will reimburse the Ultra Growth Fund for total annual operating expenses in excess of 1.50% until at least January 31, 2012 (excluding interest, taxes, brokerage commissions, other investment related costs and extraordinary expenses). Given the foregoing factors, among others, the Independent Trustees determined that the advisory fee for the foregoing Fund was acceptable.
With respect to the Global Science & Technology, Large Cap Value, and U.S. Treasury Funds, the Funds’ advisory fees and expense ratios were above the median for their respective Peer Group. While the Global Science & Technology Fund may experience some capacity constraints, the other Funds generally should not. As with the other Funds, the Trustees considered the fees in light of the Funds’ performance. As described in more detail above, the Global Science & Technology Fund had better performance in the recent one year period, the Large Cap Value Fund has outperformed the Benchmark in the longer periods and the U.S. Treasury Fund has continued to provide solid performance. Given the foregoing factors, among others, the Independent Trustees determined that the advisory fees for the foregoing Funds were acceptable.
| 2. | Fees Charged to Other Advisor and Sub-Advisor Clients |
In reviewing fees, the Independent Trustees also compared the advisory fees to the fees the Advisor assesses other types of clients, including institutional and high net worth separate accounts, a private investment company and a foreign fund sub-advised by the Advisor. Currently, the Advisor manages separate account client assets in styles similar to those used for certain Funds, including Core Growth, Emerging Markets Small Cap, Heritage Growth, International Growth, Large Cap Value, Micro Cap, Small Cap Growth, Small Cap Value and Ultra Growth Funds. With respect to separate accounts, the fees for these accounts are generally lower than the comparable Fund (except the fees are the same in the case of the Heritage Growth Fund). The Independent Trustees considered the differences in the product types, including the services provided. In this regard, the Independent Trustees have noted that the range of services provided to a Fund in managing and operating a registered investment company is more extensive than those provided to a separately managed account. The Advisor provides services to each Fund that extend beyond the portfolio management services provided to its separate account clients. As described in more detail above, these services include business, administrative, compliance, third party service provider management, marketing and other services
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required to operate a Fund. Further, the Independent Trustees recognized that each Fund operates in a highly regulated industry requiring extensive compliance. Such responsibilities generally are not required to the same extent for separate accounts. Accordingly, the Independent Trustees determined that the nature and number of services provided to operate a Fund merit higher fees than those of separate accounts. Similarly, with respect to the private investment company, such company is not subject to the extensive regulatory scheme required of operating registered investment companies such as the Funds, and therefore the services required differ. In addition, the Independent Trustees noted the advisory fee arrangement of the private investment company with the Advisor provides for a performance fee and therefore its fee structure differs significantly from that of the Funds.
In considering the fees of the Sub-Advisors for the Income Fund and U.S. Treasury Fund, the Independent Trustees also considered the pricing schedule the respective Sub-Advisor charges for investment management services for other clients. In this regard, the sub-advisory fee for the U.S. Treasury Fund was at the lower end of the Sub-Advisor’s fee schedule. Similarly, the sub-advisory fee for the Income Fund was at the low end of fees 1st Source assesses for institutional accounts. The Independent Trustees also noted that the sub-advisory fees were established through arm’s length negotiations between the Advisor and the Sub-Advisors, which are unaffiliated with the Advisor.
| 3. | Profitability of Advisor |
The Independent Trustees reviewed pro forma profitability information for the Advisor derived from its relationship with each Fund for the calendar year ending December 31, 2009 and estimated profitability for the calendar year ended December 31, 2010. In reviewing profitability, the Independent Trustees reviewed the methodology utilized to allocate revenue and expenses of the Advisor among the Funds. In considering profitability, the Independent Trustees recognized the inherent limitations in determining profitability which may be affected by many factors, including the allocation of expenses across multiple investment products served by the Advisor. The allocation of research and personnel expenses is also particularly difficult given the Advisor’s shared research culture.
In addition to reviewing the Advisor’s profitability, the Trustees also reviewed the Advisor’s relative profitability compared to publicly available information concerning unaffiliated advisors. However, the Independent Trustees recognized the difficulties in comparing the profitability of various advisors given that individual fund or product line profitability of other advisors generally is not publicly available and the profitability information that is available for certain advisors or management firms may not be representative of the industry and may be affected by numerous factors including the structure of the particular advisor, the types of funds managed, its business mix, expense allocations, and the advisor’s capital structure and cost of capital. The Independent Trustees noted that the Advisor’s profitability is within a reasonable range compared
to the peer group of unaffiliated advisors. Based on their review, the Independent Trustees were satisfied that the Advisor’s level of profitability from its relationship with each Fund was not unreasonable in light of the services provided.
With respect to the Sub-Advisors, although a profitability analysis was not available, the Independent Trustees received certain financial statements of the Sub-Advisors. Given that the Sub-Advisors’ fees are at the low end of their respective fee schedules, the fact that the sub-advisory fee is established through arm’s length negotiations, and the range of fees the Sub-Advisors assess to other clients, the Independent Trustees concluded that HIMCO’s and 1st Source’s profitability from its relationship with the U.S. Treasury Fund and Income Fund, respectively, is not unreasonable.
In addition to the above, the Independent Trustees also considered that the Advisor benefits from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute a Fund’s purchases and sales of securities, as described in further detail below.
D. ECONOMIESOF SCALEAND WHETHER FEE LEVELS REFLECT THESE ECONOMIESOF SCALE
With respect to economies of scale, the Independent Trustees recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base, although economies of scale are difficult to measure and predict with precision. One method to help shareholders share in these benefits is to include breakpoints in the advisory fee schedule. The advisory fee schedules of the Funds, however, do not have breakpoints because, as noted above, the Independent Trustees recognized the capacity constraints of the Funds investing in small and micro cap companies. Because the Advisor generally seeks to maintain the assets of these Funds at a level that it believes can be managed effectively, the potential for the assets to grow beyond these levels to achieve economies of scale is limited. Further, with respect to the Funds without such capacity constraints, the Independent Trustees recognized the Advisor’s position that to the extent economies of scale exist, the proposed level of advisory fee reflects such economies of scale. Considering the factors above, the Independent Trustees concluded the absence of breakpoints was acceptable and that such economies as exist are adequately reflected in the Advisor’s fee structure.
| E. | 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 the Funds. In this regard, the Independent Trustees considered that the Advisor benefits from soft dollar arrangements pursuant to which it receives research from brokers that execute the applicable Fund’s brokerage transactions. The Advisor may receive soft dollar benefits from each Fund, subject to the exceptions noted below for the sub-advised Funds. The Independent Trustees reviewed information regarding the soft dollar arrangements including, among other things, the commissions paid, the research credits earned and the
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| MARCH 31, 2011 | ||
services provided. Further, the Independent Trustees at prior meetings have had extensive discussions regarding the soft dollar arrangements. The Independent Trustees recognized that soft dollar arrangements provide benefits to the Advisor derived from a Fund’s transactions by obtaining research that it would otherwise have to acquire with hard dollars. Accordingly, the Advisor’s profitability would be somewhat lower if it did not receive the research services pursuant to soft dollar arrangements. The Independent Trustees took these “fall out” benefits, if any, into account when reviewing the level of advisory fees. With respect to the Sub-Advisors, the Independent Trustees recognized that the Sub-Advisors currently do not have soft dollar arrangements on behalf of their respective Funds.
| F. | APPROVALOF NEW ADVISORYAND SUB-ADVISORY AGREEMENTS |
The Independent Trustees did not identify any single factor discussed previously as all-important or controlling. The Independent Trustees, including a majority of Independent Trustees, concluded that the terms of the Advisory Agreement for each Fund, the HIMCO Sub-Advisory Agreement for the U.S. Treasury Fund, and the 1st Source Sub-Advisory Agreement for the Income Fund were fair and reasonable, that the Advisor’s and Sub-Advisors’ fees are reasonable in light of the services provided to the respective Funds, and that the Advisory Agreement should be and was approved on behalf of each Fund and the Sub-Advisory Agreements should be and were approved on behalf of the U.S. Treasury Fund and the Income Fund, respectively.
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| WASATCH FUNDS — Service Providers | MARCH 31, 2011 | |
Investment Advisor
Wasatch Advisors, Inc.
150 Social Hall Avenue, 4th Floor
Salt Lake City, UT 84111
Sub-Advisor for the U.S. Treasury Fund
Hoisington Investment Management Co.
6836 Bee Caves Rd.
Building 2, Suite 100
Austin, TX 78746
Sub-Advisor for the Wasatch-1st Source Income Fund
1st Source Corporation Investment Advisors, Inc.
100 North Michigan Street
South Bend, IN 46601
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.
803 West Michigan Street, Suite A
Milwaukee, WI 53233-2301
Custodian
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
Legal Counsel to Wasatch Funds and Independent Directors
Chapman and Cutler, LLP
111 West Monroe Street
Chicago, IL 60603
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
1100 Walnut, Suite 1300
Kansas City, MO 64106
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| WASATCH FUNDS — Guide to Understanding Financial Statements | MARCH 31, 2011 | |
Wasatch Funds provides reports to shareholders twice a year. The annual report is for the Funds’ fiscal year which ends September 30. The semi-annual report is for the six months or period ending March 31. Additionally, the Funds’ schedules of investments for the first and third quarters of each fiscal year are available to shareholders as described on page 134. These reports provide shareholders with important information that will help them evaluate the management and performance of their investments. It is the desire of Wasatch Funds to help shareholders stay in tune with their investments. If you have any questions about the information in this report, a shareholder services representative will be happy to assist you when you call 800.551.1700.
SCHEDULEOF INVESTMENTS
The holdings of each Wasatch Fund are detailed in the “Schedule of Investments.” This section provides a snapshot of the securities each Fund was invested in on the last day of the reporting period. The Wasatch Equity Funds invest primarily in Common Stocks of companies which are grouped together by industry. The U.S. Treasury Fund invests primarily in U.S. Treasury securities. The Wasatch-1st Source Income Fund invests primarily in fixed income securities. The Equity Funds will typically have only minor holdings in Short-Term Investments. At times the Funds may take temporary defensive positions by increasing cash or holdings in Short-Term Investments. Please see the prospectus under “Additional Information about the Funds.”
STATEMENTSOF ASSETSAND LIABILITIES
These financial statements show the Assets and Liabilities of a Fund on the last day of the reporting period. A Fund’s Assets include the value of securities owned, amounts receivable for purchases of Fund shares (capital shares receivable), securities sold, interest and dividends, prepaid expenses and other assets. Liabilities are amounts owed for shareholder redemptions (capital shares payable), securities purchased, investment advisory fees and other expenses. Totaling up the assets and subtracting the liabilities results in a Fund’s Net Assets.
Net Assets consist of capital stock, paid-in capital in excess of par, undistributed net investment income or loss, undistributed net realized gain or loss on investments and net unrealized appreciation or depreciation on investments. Capital stock is stock authorized by a company’s charter and having par value, stated value or no par value. Par value is set by the company issuing the shares and has no relation to Net Asset Value. The par value of one share of each Wasatch Fund is $.01. Paid-in capital in excess of par is capital received from shareholders in exchange for Fund shares that exceeds the par value of the shares. For example, if you bought one share of a Fund for $10, $.01 would show as “Capital stock” on the books of the Fund, and $9.99 would be accounted for under “Paid-in capital in excess of par.” Undistributed net investment income or loss is the amount of net investment income or loss of a Fund since inception that has not been paid to shareholders as a dividend.
Undistributed net realized gain (loss) on investments is the amount of net realized gains or losses generated by a Fund since inception that have not been distributed to shareholders in the form of a capital gain distribution. A gain or loss is realized when a security is sold by a Fund. Net unrealized appreciation (depreciation) on investments is the change in value from the purchase price of securities a Fund continues to hold.
The number of shares a Fund is authorized to sell can be found under Capital Stock, $.01 par value. Issued and outstanding indicates the number of shares owned by shareholders.
Net Asset Value (NAV), Redemption Price and Offering Price Per Share shows the value of one outstanding share of a Fund on the date of the report. A Fund’s share price (NAV) is calculated by dividing the value of all securities and other assets owned by a Fund, less the liabilities charged to that Fund, by the number of Fund shares outstanding. The share price is calculated at the close of business of the New York Stock Exchange on each day the Exchange is open for trading. Please see Wasatch Funds’ prospectus for more information about how share prices are calculated. Information about how the share price is affected by a Fund’s operation can be found under “Financial Highlights” on page 142.
STATEMENTSOF OPERATIONS
Statements of Operations show investment income and expenses for each Fund as well as realized gains or losses from securities sold and the appreciation or depreciation in the value of a Fund’s holdings during the reporting period.
Investment Income shows Interest and Dividends earned from interest-bearing and dividend-paying securities in a Fund’s portfolio.
Expenses show the various fees and expenses paid out of a Fund’s assets such as the fee paid to Wasatch Advisors, the Funds’ investment advisor. Additional fees include shareholder servicing, fund administration and accounting, custody of fund assets, federal and state registration, legal counsel, auditing and trustees’ fees and other expenses. The Funds pay for printing and mailing statements, prospectuses, annual reports and semi-annual reports to shareholders.
Net Investment Income (Loss) is the amount of dividends and interest income earned on securities held by a Fund, less the Fund’s expenses.
Net realized gain (loss) on investments and foreign currency translations is the net gain or loss on securities a Fund has sold. Change in unrealized appreciation (depreciation) on investments and foreign currency translations is the change in value of securities a Fund continues to hold.
Net gain (loss) on investments is the result of changes in the market value of securities a Fund has sold and securities it continues to hold.
STATEMENTSOF CHANGESIN NET ASSETS
Net Assets are a Fund’s remaining assets after taking into consideration any liabilities. Statements of Changes in Net
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| WASATCH FUNDS — Guide to Understanding Financial Statements (continued) | MARCH 31, 2011 | |
Assets show the increase or decrease in a Fund’s net assets during the reporting period. Investment operations, dividends and capital share transactions affect a Fund’s net assets. Operations is a summary of the Statements of Operations. It includes investment income or loss, net realized gain or loss on investments and foreign currency translations a Fund has sold as well as appreciation or depreciation in the value of investments a Fund continues to hold.
Dividends are distributed by Wasatch Funds to sharehold-ers when Fund investments have earned income in excess of net expenses or when capital gains in excess of capital losses are realized from the sale of securities. Most shareholders choose to reinvest their dividends and capital gain distribu- tions. Each Fund is required by Internal Revenue Code regulations to distribute substantially all of its net investment income and capital gains to shareholders in order to retain its status as a “regulated investment company.”
Capital share transactions are any transactions involving shares of a Fund, including the selling of Fund shares, shares issued by a Fund to shareholders for the reinvestment of dividends, and share redemptions.
FINANCIAL HIGHLIGHTS
The Financial Highlights contain important historical operating information that you may find useful in making decisions or understanding the performance of your investment.
Net Asset Value (NAV) is defined under “Statements of Assets and Liabilities” on page 141. The difference between the Net asset value, beginning of period and the Net asset value, end of period in the Financial Highlights is the change in value of a Fund’s shares over the reporting period, but not its total return.
Income (loss) from investment operations shows how the share price was affected by a Fund’s operations on a per share basis. Net investment income (loss) is the per share
amount of dividends and interest income earned on securities held by a Fund, less the Fund’s expenses. Net realized and unrealized gains (losses) on securities is the per share increase or decrease in the value of securities a Fund holds or has sold during the reporting period. Gains or (losses) are realized when securities are sold. Gains or (losses) are unrealized when securities increase or decrease in value but are not sold.
Distributions are the per share amount that a Fund paid to shareholders from net investment income and net realized gains.
Total return is the percentage increase or decrease in the value of an investment over a stated period of time. A total return percentage includes both changes in unrealized and realized gains and income. For the purposes of calculating total return, it is assumed that dividends and distributions are reinvested at the share price on the ex-dividend date of the distribution. A FUND’S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE FINANCIAL HIGHLIGHTS.
Supplemental data and ratios are provided to help you better understand your investment. Net assets, end of period, are the net assets of a Fund on the reporting date. Ratio of expenses to average net assets shows the total of a Fund’s operating expenses divided by its average net assets for the stated period before and after waivers and reimbursements by the Advisor, if any. Ratio of net investment income (loss) to average net assets shows a Fund’s net investment income (loss) divided by its average net assets for the stated period before and after waivers and reimbursements by the Advisor, if any. Portfolio turnover rate measures a Fund’s buying and selling activity during the reporting period. It is computed by dividing total purchases or sales, whichever is less, by the average monthly market value of a Fund’s portfolio securities. This calculation does not include securities with a maturity date of less than 12 months.
| CONTACT WASATCH | ||
TELEPHONE
800.551.1700
M - F, 7:00 a.m. to 7:00 p.m. CT
Automated Line, 24 Hours
U.S. MAIL
Wasatch Funds
P.O. Box 2172
Milwaukee, WI 53201-2172
OVERNIGHT MAIL
Wasatch Funds
803 West Michigan Street, Suite A
Milwaukee, WI 53233-2301
ONLINE
www.wasatchfunds.com
shareholderservice@wasatchfunds.com
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Semi-Annual Report &
Quarterly Commentaries
800.551.1700 • www.wasatchfunds.com
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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. Schedule of 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.
The Board of Trustees has not adopted procedures by which shareholders may recommend nominees to the Board.
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”) (17 CFR 270.30a-3(c)) 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 (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| (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 (17 CFR 270.30a-3(d)) that occurred during the Registrant’s second fiscal quarter of 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. |
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Item 12. 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. | |
| (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/ Samuel S. Stewart, Jr. | |
Samuel S. Stewart, Jr. President (principal executive officer) of Wasatch Funds Trust | ||
| Date: | June 6, 2011 | |
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/ Samuel S. Stewart, Jr. | |
Samuel S. Stewart, Jr. President (principal executive officer) of Wasatch Funds Trust | ||
| Date: | June 6, 2011 | |
| By: | /s/ Cindy B. Firestone | |
Cindy B. Firestone Treasurer (principal financial officer) of Wasatch Funds Trust | ||
| Date: | June 6, 2011 | |