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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 | ||||
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WASATCH FUNDS TRUST | ||||
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(Exact name of registrant as specified in charter)
505 Wakara Way, 3rd Floor
Salt Lake City, UT 84108
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(Address of principal executive offices)(Zip code)
(Name and Address of Agent for Service) | Copy to: | |
Samuel S. Stewart, Jr. Wasatch Advisors, Inc. 505 Wakara Way, 3rd Floor Salt Lake City, UT 84108 | Eric F. Fess, Esq. Chapman & Cutler LLP 111 West Monroe Street Chicago, IL 60603 |
Registrant’s telephone number, including area code: (801) 533-0777
Date of fiscal year end: September 30
Date of reporting period: March 31, 2016
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Item 1: Report to Shareholders.
Table of Contents
2016 SEMI-ANNUAL REPORT
AND QUARTERLY COMMENTARIES
March 31, 2016
2016
WASATCH
FUNDS
EQUITY FUNDS / Wasatch Core Growth Fund • Wasatch Emerging India Fund • Wasatch Emerging Markets Select Fund • Wasatch Emerging Markets Small Cap Fund • Wasatch Frontier Emerging Small Countries Fund • Wasatch Global Opportunities Fund • Wasatch International Growth Fund • Wasatch International Opportunities Fund • Wasatch Large Cap Value Fund • Wasatch 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 World Innovators Fund BOND FUNDS / Wasatch-1st Source Income Fund • Wasatch-Hoisington U.S. Treasury Fund •
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Wasatch Funds
Salt Lake City, Utah
www.WasatchFunds.com
800.551.1700
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Wasatch Emerging Markets Small Cap Fund® Management Discussion | 10 | |||
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Wasatch Frontier Emerging Small Countries Fund® Management Discussion | 12 | |||
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Wasatch-Hoisington U.S. Treasury Fund® Management Discussion | 40 | |||
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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 — 90% PSYCHOLOGICAL, 10% LOGICAL | ||||
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Samuel S. Stewart, Jr. PhD, CFA President of | DEAR FELLOW SHAREHOLDERS:
As a portfolio manager, I’m periodically confronted by the market’s bouts of excessive fear and optimism. While company earnings tend to drive stock prices toward fair value over the long term, anything can happen in the short term. This is what Benjamin Graham meant when he characterized the market as a rational “weighing machine” that considers the facts over the long term, but also as a fickle “voting machine” that’s influenced by fads and fleeting popularity in the short term. Such short-term psychological mood swings were exactly what we saw during the first quarter of 2016. At the heart of the current situation is that the U.S. economy has plodded along at a tortoise-like pace since the end of the Global Financial Crisis (GFC) in 2009. But the stock market has mostly run at a hare’s pace, with a pause to rest in the last year. Because central banks around the world haven’t been satisfied with the global economy’s tortoise-like pace, ever since the GFC they have pursued unprecedented monetary policies — including massive bond purchases, low interest rates, zero interest rates and now even negative interest rates! |
Investors have been left to battle their emotions, waffling in their views as to whether the glass is half empty or half full. But for the economy as a whole, the level in the glass really hasn’t changed much. What does change is the tenor of the financial headlines, which can meaningfully influence investor psychology. I believe this is what accounted for the market reversal that began mid-quarter.
ECONOMY
As we consider economies around the world, the big concerns recently have been the slowdown in China and the decline in commodity prices. For years, economists have worried that China’s development has been grossly unbalanced — even as the country’s economy has grown to be the world’s second-largest. Now, with economic growth slowing, China’s government is finding it necessary to work on developing a more balanced economy — one that will rely more on Chinese consumption and less on manufacturing goods to export to the rest of the world.
As the economy shifts, the decline in production of goods exported from China gives economists a new worry — that the flattening use of commodities in Chinese manufacturing will trigger turmoil in countries and industries that are dependent on Chinese demand for petroleum and metals.
But I think China and other emerging markets are simply going through the normal phases of economic development that many other countries, including the United States, experienced in the past. Along with these phases, there may be further adjustments in the Chinese yuan now that it will be pegged to a basket of currencies, rather than just to the U.S. dollar. However, I don’t expect to see a global crisis as the yuan and other emerging-market currencies reach new equilibriums.
Declining prices for commodities — particularly oil — also have some beneficial impacts. Consumers are receiving what is, in effect, a tax cut. So despite the often apocalyptic headlines, the real story of weak energy prices is that the winners vastly outnumber the losers.
In addition to the constructive overall effects of lower commodity prices, there were other favorable economic conditions in the United States that continued during the quarter. These conditions included the spread of information-age businesses and high-tech industries, still positive gross domestic product (GDP) growth, falling unemployment, modest wage increases, and the progress consumers have made in repairing their balance sheets since the GFC.
MARKETS
As I’ve already discussed, the economic story hasn’t changed much in the last several years. And stock markets throughout most developed countries have generally performed remarkably well during this period. The past year was an exception. The majority of indices across countries, sectors and industries were down for the 12 months ended March 31, 2016.
Similarly, the first quarter of 2016 started with powerful declines across most stock markets. But later in the quarter, stocks staged encouraging rebounds as commodity prices firmed, the U.S. Federal Reserve (Fed) backed off its rhetoric regarding future interest-rate increases, and investors regained their optimism.
The large-cap S&P 500® Index rose 1.35% for the quarter. And the Russell 2000® Index of small caps fell only -1.52%, after having been down almost -16%. As for international stocks, the MSCI World Ex-U.S.A. Index declined -1.95% for the quarter — which was much improved from an interim loss of over -12%.
Meanwhile, high-quality bonds moved up nicely. The intermediate-term Barclays Capital U.S. Aggregate Bond Index returned 3.03%. Similarly, the long-term Barclays U.S. 20+ Year Treasury Bond Index gained 8.49% for the quarter.
For stocks, an important concern is the possibility that the declines in the past year and early in the first quarter indicate the type of vulnerability we may see going forward. This concern is heightened because the low-single-digit annual GDP growth over the last several years hasn’t remotely kept pace with stocks, many of which have had annual returns approaching or exceeding double digits. Market observers frequently attribute the high stock prices we have seen to the unorthodox experiments in monetary policy by central banks around the world.
The classic role of central banks is to ensure that adequate liquidity exists in times of panic so the panic doesn’t feed on itself. The first round of quantitative easing during the height of the GFC was a prime example of this classic role. Subsequent easings by the U.S. Fed and other central banks have essentially been experiments in trying to stimulate economies that haven’t been in a state of panic. But the lackluster growth rates of economies around the world suggest that the intended improvement hasn’t been achieved.
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MARCH 31, 2016 (UNAUDITED) | ||
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So here we are with very modest global economic growth, seemingly excessive gains in stocks over the past several years and potentially flawed monetary policies around the world. Although this may sound like a prescription for flat — or possibly even falling — stock prices, I continue to be the “nervous bull” that I’ve been for quite a few years. In hindsight, I should have been a “raging bull” for most of that time. But while I don’t feel comfortable abandoning my caution now given the challenges described above, I have taken note of several favorable conditions — including the availability of some stocks at fairly reasonable valuations, the recent tightening of credit spreads between high-quality and lower-quality bonds of the same maturity, and the prevalence of stock yields that exceed 30-year Treasury bond yields. This last condition is particularly noteworthy because when you buy a stock, the dividend can rise. But when you buy a Treasury bond, the yield is fixed until maturity.
WASATCH
As discussed, especially in the short term (which may last for several years), investment returns can be influenced by factors that are more psychological than logical. This means that investors who chase the performance of stocks that have done well in the past may be ignoring valuations and may be missing opportunities in areas of the markets where company fundamentals are strong and valuations are more reasonable.
At Wasatch Advisors, we believe one of the best examples of negative psychology creating attractive valuations is the recent situation in emerging markets — where, in stark contrast to developed markets, stock returns have generally been uninspiring over the past five years. We think this has largely been due to fears regarding the economic slowdown in China, negative sentiment surrounding the commodities rout that tainted the entire emerging-market category, and currency movements — namely, strength in the U.S. dollar and weakness in emerging-market currencies.
Our outlook is that these conditions won’t persist. We believe well-chosen emerging-market companies will stand on their own merits and will decouple from the problems in China and the commodities complex. Therefore, we believe the stock prices of these companies have the potential to rise. Moreover, many of the companies in our emerging-market portfolios pay significant dividends. And for U.S. dollar-based investors, we think there’s strong potential for appreciation from currency adjustments.
With sincere thanks for your continued investment and for your trust,
Sam Stewart
Information in this report regarding market or economic trends, or the factors influencing historical or future performance, reflects the opinions of management as of the date of this report. These statements should not be relied upon for any other purpose. Past performance is no guarantee of future results, and there is no guarantee that the market forecasts discussed will be realized.
CFA® is a trademark owned by CFA Institute.
Wasatch Advisors is the investment advisor to Wasatch Funds.
Someone who is “bullish” or “a bull” is optimistic with regard to the stock market’s prospects.
The financial crisis of 2007-09, also known as the Global Financial Crisis (GFC) and 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.
Gross domestic product (GDP) is a basic measure of a country’s economic performance, and is the market value of all final goods and services made within the borders of a country in a year.
A credit spread is the difference in yield between two bonds of similar maturity but different credit quality. For example, if the 10-year Treasury note is trading at a yield of 6% and a 10-year corporate bond is trading at a yield of 8%, the corporate bond is said to offer a spread over the Treasury of two percentage points.
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.
Valuation is the process of determining the current worth of an asset or company.
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 MSCI World Ex-U.S.A. Index captures large and mid cap representation across 22 of 23 developed market countries — excluding the United States. With 1,004 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.
The Russell 2000 Index is an unmanaged total-return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 is widely used in the industry to measure the performance of small-company stocks. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell indices. Russell® is a trademark of Russell Investment Group.
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.
The Barclays U.S. 20+ Year Treasury Bond Index measures the performance of U.S. Treasury securities that have remaining maturities of 20 or more years.
You cannot invest directly in these or any indices.
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WASATCH CORE GROWTH FUND (WGROX / WIGRX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Core Growth Fund is managed by a team of Wasatch portfolio managers led by JB Taylor and Paul Lambert.
JB Taylor Lead Portfolio Manager |
Paul Lambert Portfolio Manager | OVERVIEW
It was a volatile start to the quarter for small-cap stocks. Through the first week of February, the Russell 2000 Index and Russell 2000 Growth Index were down -16% and -19%, respectively. |
For small-cap investors, the January Effect was conspicuously missing. Perhaps it was delayed to February, as both indices posted strong rallies to finish the quarter and erased most of their losses. As for reasons for the pivot in the quarter, market commentators have pointed to the U.S. Federal Reserve backing off its rhetoric of steady interest-rate increases, a reversal in the strong U.S. dollar, and a bottoming of commodity prices. At quarter’s end, the Russell 2000 finished with a modest decline of -1.52% and the Russell 2000 Growth declined -4.68%. The Wasatch Core Growth Fund — Investor Class was down -3.19%.
When parsing the quarter’s results, the strongest theme to emerge was the market’s changing appetite for higher-growth stocks. This was most apparent when looking at the indices by industry. The fastest-growing industries of the economy — technology services, health technology and health services — delivered the worst stock returns during the first quarter of 2016. In 2015, these were a few of the only industries to contribute positively to Index performance. Conversely, stocks from the non-energy materials, utilities, process industries and producer-manufacturing industries, produced the best returns in the quarter after underperforming for all of 2015.
DETAILSOFTHE QUARTER
The Fund finished the quarter ahead of the Russell 2000 Growth but behind the Russell 2000. This is mostly explained by our large underweight in one high-growth industry, biotechnology, offset by our relatively large weight in another high-growth industry, technology services. Being underweight in biotech was positive for relative performance, especially versus the Russell 2000 Growth Index that had over two times our weight in biotechnology stocks.
Our decision to overweight technology-services stocks hurt us disproportionately in the quarter. Information-technology stocks were among our worst detractors in the first quarter. While biotech and technology services comprise companies with entirely different fundamental drivers, it appears technology stocks, and specifically the higher-growth companies within the sector, were thrown into the same basket as biotech stocks as the market appeared to have associated higher growth with higher risk.
The selloff in these higher-growth stocks isn’t surprising in that valuations were fairly expensive entering the quarter.
But it also seems that high-growth stocks have been painted with the same broad brush, irrespective of the underlying fundamentals or business-model differences.
We don’t see reasons to believe the recent rotation out of high-growth stocks will be long lived. To us, the shift appears to have been driven by changes in short-term sentiment, rather than by improving fundamentals for the average company. In contrast to the anemic growth provided by the broader economy, and revenue growth of just 3.7% for the average U.S. small cap company, our companies reported average revenue growth of 14.2% and average earnings growth of 20.9% during the quarter.
As of March 31st, high-growth companies were only about 20% of the Fund. We’re attracted to these companies because they stand out so sharply in a lower-growth economy. It’s in this group that we are currently seeing the most volatility but we are also seeing some of the greatest potential returns going forward.
The average return of the rest of the Fund, which is made up of our more stable, consistent growers was slightly positive for the quarter. Examples are companies that are steady compound growth stories like Waste Connections, Inc. and Copart, Inc. We have owned Waste Connections and Copart for over 12 and 19 years, respectively. Waste Connections grew revenues 1.5% in the quarter and Copart grew revenues 8.5%, but the stocks were up 15% and 7%, respectively, so there is evidence the Fund also benefited from the market’s pivot away from the highest-growth companies.
OUTLOOK
Through the market’s volatility, we remained steadfast in owning what we believe are the highest-quality growth businesses in the small-cap universe. In a macroeconomic environment where growth is scarce, we think outstanding growth will be disproportionately rewarded over the long term. Throughout our history, we have observed that the market occasionally goes through periods where it underestimates the ultimate earnings power of companies with high and sustainable earnings growth. Valuation resets like the one we saw during the quarter in biotechnology and technology create great opportunities for investors focused on the long term. When these high-growth companies are combined with a portfolio of our more stable growth companies, we believe the Core Growth Fund can continue to offer a portfolio that has better growth and quality metrics when compared to the indices, but with similar overall valuations.
Thank you for the opportunity to manage your very important assets.
Current and future holdings are subject to risk. |
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WASATCH CORE GROWTH FUND (WGROX / WIGRX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Core Growth (WGROX) — Investor | -0.34% | -6.24% | 10.29% | 6.25% | ||||||||||||||||
Core Growth (WIGRX) — Institutional | -0.28% | -6.17% | 10.36% | 6.28% | ||||||||||||||||
Russell 2000® Index | 2.02% | -9.76% | 7.20% | 5.26% | ||||||||||||||||
Russell 2000® Growth Index | -0.57% | -11.84% | 7.70% | 6.00% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Core Growth Fund are Investor Class: 1.17% / Institutional Class — Gross: 1.13%, Net: 1.05%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 1/31/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Cimpress N.V. | 3.4% | |||
Waste Connections, Inc. | 3.3% | |||
Spirit Airlines, Inc. | 3.0% | |||
Allegiant Travel Co. | 2.9% | |||
ICON plc (Ireland) | 2.8% |
Company | % of Net Assets | |||
Credit Acceptance Corp. | 2.6% | |||
Copart, Inc. | 2.5% | |||
MEDNAX, Inc. | 2.5% | |||
Cornerstone OnDemand, Inc. | 2.4% | |||
Ensign Group, Inc. (The) | 2.4% |
** | As of March 31, 2016, there were 67 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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 INDIA FUND (WAINX / WIINX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Emerging India Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan and Matthew Dreith.
Ajay Krishnan, CFA Lead Portfolio Manager |
Matthew Dreith, CFA Associate Portfolio Manager | OVERVIEW
The Wasatch Emerging India Fund — Investor Class declined -5.94% in what was a difficult first quarter for Indian equities. The Fund underperformed its benchmark, the MSCI India |
Investable Market Index, which fell -3.73%.
Indian stocks declined during January and February, as concerns about the global economy and fears of higher U.S. interest rates weighed on emerging markets. Higher interest rates in the U.S. make the dollar more attractive to global investors, while lower rates increase the appeal of emerging-market currencies such as the Indian rupee. Although India’s stock market reversed course in March as the rupee firmed on signs that the U.S. Federal Reserve may hike rates more slowly than previously expected, major Indian averages ended the quarter in the red.
Stocks of large companies led the rebound in equities during the final month of the quarter. Top performers included India’s information-technology (IT) services companies that account for nearly 20% of the benchmark, but only around 5% of the Fund. The Fund’s underexposure to this top-performing industry group was a headwind to performance — as was our lack of investments in the energy sector, which also rose.
Besides IT and energy, the materials sector was the only other sector of the benchmark to finish the quarter with a gain. As improving investor sentiment lifted risk appetite, however, the materials stocks held in the Fund lagged the cyclical, more-speculative issues represented in the Index. Consequently, the materials sector was an additional source of underperformance for the Fund.
Increased scrutiny from U.S. and United Kingdom (U.K.) regulators in India negatively affected the health-care sector, which was the worst-performing sector of the Index and the Fund’s greatest source of underperformance in the first quarter. Likewise, stricter regulations from the Indian government with respect to non-performing loans sent Indian banking shares lower.
Considering the obstacles the Fund had to overcome, we think it performed reasonably well in what proved to be a weak and unusually volatile quarter for Indian stocks.
DETAILSOFTHE QUARTER
Our greatest contributor to Fund performance for the quarter was Dr. Lal PathLabs Ltd. A recent addition the Fund, Dr. Lal Path is one of the largest chains of diagnostic pathology labs in India. The company has been benefiting from its trusted brand reputation and increased demand for
diagnostic testing, which is one of the fastest-growing segments of the Indian health-care market. As it continues to formalize the market by gaining share from unorganized, standalone competitors, we think Dr. Lal Path has the potential to become the dominant consumer brand in diagnostics in India and one of the top health-care service companies in emerging markets.
Bajaj Finance Ltd. is the lending arm of the Bajaj Group, a well-regarded Indian industrial house founded in 1926. Bajaj Finance is a non-bank financial company offering a broad spectrum of lending services, including vehicle loans, mortgage loans, consumer loans and commercial loans. Its greater focus on the consumer enabled the company to avoid much of the first-quarter fallout from tighter regulation of the lending industry that affected stocks of other Indian financials. As a result, Bajaj Finance was the Fund’s second-best contributor to performance for the quarter.
The pharmaceutical industry accounted for our three worst detractors from performance for the quarter: Marksans Pharma Ltd., Natco Pharma Ltd. and Caplin Point Laboratories Ltd., respectively.
Marksans markets its branded prescription and over-the-counter drugs both in India and internationally, with the U.K. accounting for approximately 40% of revenues. The company’s stock price tumbled in January on news that its manufacturing plant in Goa had failed a good manufacturing practice (GMP) inspection by the U.K. Medicines & Healthcare products Regulatory Agency (MHRA). In mid-March, however, Marksans announced that it had received a “Restricted GMP Certificate” that will allow the company to continue manufacturing and selling the majority of its products into U.K. markets until the MHRA’s next inspection. Shares of Natco and Caplin Point also fell as the U.S. Food and Drug Administration stepped up its regulatory activity in India.
OUTLOOK
Although the Fund’s overweight position in health care relative to the benchmark hurt performance in the first quarter, we don’t plan to reduce exposure to this important sector. As a developing economy broadens its focus beyond such mainstays as commodity production and other basic industries, health care becomes one of the next logical areas for growth.
Regulatory scrutiny is not new to the pharmaceutical industry, and exists everywhere in the world that drugs are manufactured for the U.S. and other developed markets. However, the stringency with which minor infractions are enforced tends to be cyclical, and we believe the industry appears to be at or near the peak of regulatory intensity in India.
Longer term, we believe structural trends remain favorable for India’s pharmaceutical industry. In particular, we think Indian companies’ substantial cost advantages are likely to drive further market-share gains as the companies continue to supply low-cost, high-quality medicine to the world.
Thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH EMERGING INDIA FUND (WAINX / WIINX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 4/26/11 | |||||||||||||||||
Emerging India (WAINX) — Investor | -5.86% | -7.37% | N/A | 7.96% | ||||||||||||||||
Emerging India (WIINX) — Institutional | -5.86% | -7.37% | N/A | 7.96% | ||||||||||||||||
MSCI India IMI | -3.76% | -13.04% | N/A | -1.92% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging India Fund are Investor Class — Gross: 1.87%, Net: 1.75% / Institutional Class — Gross: 1.75%, Net: 1.50%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as unstable currencies, highly volatile securities markets and political and social instability, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Dr. Lal PathLabs Ltd. (India) | 4.0% | |||
Bajaj Finance Ltd. (India) | 4.0% | |||
MakeMyTrip Ltd. (India) | 3.4% | |||
Berger Paints India Ltd. (India) | 2.8% | |||
Welspun India Ltd. (India) | 2.8% |
Company | % of Net Assets | |||
Natco Pharma Ltd. (India) | 2.6% | |||
Glenmark Pharmaceuticals Ltd. (India) | 2.6% | |||
UPL Ltd. (India) | 2.4% | |||
Godrej Consumer Products Ltd. (India) | 2.3% | |||
Somany Ceramics Ltd. (India) | 2.2% |
** | As of March 31, 2016, there were 64 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. ‡Inception: April 26, 2011. The MSCI India IMI (Investable Market Index) is designed to measure the performance of the large-, mid- and small-cap segments of the Indian market. The Index covers approximately 99% of the free-float adjusted market capitalization of the Indian equity universe. You cannot invest directly in this or any index.
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WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Emerging Markets Select Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan, Roger Edgley and Scott Thomas.
Ajay Krishnan, CFA Lead Portfolio Manager |
Roger Edgley, CFA Portfolio Manager |
Scott Thomas, CFA Associate Portfolio |
OVERVIEW
The Wasatch Emerging Markets Select Fund — Investor Class gained 2.13% in what was a positive first quarter for emerging-market equities. The Fund rose less than its benchmark, the MSCI Emerging Markets Index, which increased 5.71%.
After a weak start, investors’ appetite for risk returned during the latter part of the quarter on signs that the U.S. Federal Reserve may raise interest rates more slowly than previously expected. Lower interest rates in the U.S. enhance the appeal of emerging markets by making dollar-denominated investments less attractive to global investors.
As the rebound from early-quarter losses unfolded, investors appeared to seek exposure to the emerging-market asset class itself. Shares of the large companies held in exchange-traded funds and market indices led the advance, while mid-size and smaller companies lagged. Although the Fund invests in companies of all sizes, its holdings of lesser-known and less-widely followed companies generally hurt performance relative to the benchmark.
The energy and materials sectors were the quarter’s biggest gainers within the Index. Energy and materials companies tend to score poorly on our measures of financial quality because the capital-intensive nature of their businesses typically requires substantial amounts of debt. Consequently, in an environment in which energy and materials companies outperformed, our focus on companies with what we consider to be strong balance sheets and sustainable competitive advantages was an additional headwind for the Fund.
Of the significantly weighted countries in the Index, China declined the most, with India posting a somewhat smaller loss. Although our near-zero weighting in China provided a strong tailwind for the Fund, our significantly overweight position in India hurt. Considering the variety of obstacles the Fund had to overcome, we think it performed reasonably well in what was a volatile three months for world equity markets.
DETAILSOFTHE QUARTER
The Fund’s greatest contributor to performance for the quarter was Raia Drogasil S.A., a Brazilian drug-store chain. The company recently completed its acquisition of 4Bio, Brazil’s second-largest specialty pharmacy. It also launched a
proprietary pharmacy-benefits manager focused on capturing demand from corporations and health-care operators to drive volume to its stores.
Universal Robina Corp. was our second-largest contributor. Universal Robina is the leading branded convenience-food and beverage company in the Philippines and a major player throughout Southeast Asia and greater China. Although revenue growth in the company’s most-recently reported quarter was unimpressive, investors cheered as widening margins, better cost controls and a series of one-time items boosted profits.
The health-care sector accounted for the four greatest detractors from Fund performance for the quarter. South Korea-based Medytox, Inc. develops injectable neurotoxins for cosmetic applications and for the treatment of muscular disorders. In what we view as normal fluctuation, the company’s share price declined approximately 10% in apparent sympathy with the Chinese stock market. As the Fund’s largest holding, however, Medytox was its greatest detractor from performance.
Stock prices of Indian pharmaceutical manufacturers fell as the U.S. Food and Drug Administration stepped up its regulatory activity in India and spooked investors. This group included the Fund’s three other large detractors in the health-care sector: Divi’s Laboratories Ltd., Lupin Ltd. and Glenmark Pharmaceuticals Ltd. Although the declines in these holdings caused the Fund’s Indian stocks to underperform as a group, we observed no structural changes in their businesses.
OUTLOOK
While the benchmark largely sidestepped first-quarter weakness in the health-care sector, the Fund felt its full impact. The second-most heavily weighted sector of the Fund, health care traditionally has been the smallest sector of the benchmark. During the first quarter, for example, health-care stocks represented only about 2.8% of the Index on average. Although this difference in weightings hurt performance relative to the Index during the period, we have no plans to reduce our exposure to a sector whose outlook we believe is among the brightest in emerging markets.
The aerospace-and-defense industry is another non-traditional area in which a new class of innovative Korean companies has begun to make inroads — both in the domestic Korean market and throughout the region. With aerospace-and-defense companies currently accounting for less than 1% of the benchmark, we have begun exploring this industry as a potentially rewarding theme for future investment.
Despite recent gains against the dollar, a number of emerging-market currencies remain undervalued in our view. We believe low energy prices are likely to provide an additional boost to emerging economies that are net importers of oil. While we remain cautious toward countries tied to the production of oil and other natural resources, we continue to favor countries such as India, Mexico and the Philippines. Our view toward China also remains cautious on structural concerns.
Thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 12/13/12 | |||||||||||||||||
Emerging Markets Select (WAESX) — Investor | 3.47% | -14.89% | N/A | -4.25% | ||||||||||||||||
Emerging Markets Select (WIESX) — Institutional | 3.57% | -14.69% | N/A | -3.90% | ||||||||||||||||
MSCI Emerging Markets Index | 6.41% | -12.03% | N/A | -4.17% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Select Fund are Investor Class — Gross: 1.75%, Net: 1.51% / Institutional Class — Gross: 1.52%, Net: 1.21%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Promotora y Operadora de Infraestructura S.A.B. de C.V. (Mexico) | 4.5% | |||
Gentera S.A.B. de C.V. (Mexico) | 4.5% | |||
Medytox, Inc. (Korea) | 4.4% | |||
Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B (Mexico) | 3.8% | |||
Bajaj Finance Ltd. (India) | 3.7% |
Company | % of Net Assets | |||
Grupo Financiero Interacciones S.A. de C.V., Class O (Mexico) | 3.7% | |||
Bangkok Dusit Medical Services Public Co. Ltd., Class F (Thailand) | 3.6% | |||
GT Capital Holdings, Inc. (Philippines) | 3.6% | |||
Universal Robina Corp. (Philippines) | 3.5% | |||
MercadoLibre, Inc. (Brazil) | 3.4% |
** | As of March 31, 2016, there were 39 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. ‡Inception: December 13, 2012. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index designed to measure the equity market performance of emerging markets. You cannot invest directly in this or any index.
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WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Emerging Markets Small Cap Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley, Andrey Kutuzov and Scott Thomas.
Roger Edgley, CFA Lead Portfolio Manager |
Andrey Kutuzov, CFA Associate Portfolio |
Scott Thomas, CFA Associate Portfolio |
OVERVIEW
The Wasatch Emerging Markets Small Cap Fund ended the first quarter of 2016 with flat performance, while the benchmark, the MSCI Emerging Markets Small Cap Index, was up 0.97%.
From late 2015 into February 2016, the outlook for emerging markets was clouded by investor fears and short-term volatility. Stocks were hit hard globally, as concerns about China’s economy and its jittery currency multiplied.
During the quarter’s second half, signs that the U.S. Federal Reserve may raise interest rates more slowly than previously expected heartened investors. Lower interest rates in the U.S. enhance the appeal of emerging markets by making dollar-denominated investments less attractive to global investors who can invest elsewhere at higher rates.
In addition, we believe that most emerging-market currencies have seriously overshot in their weakness against the U.S. dollar. A reversal of this trend, which has lasted five years, may have already started. This would be positive for emerging-market investors because it would raise the value of their holdings when converted back into U.S. dollars.
DETAILSOFTHE QUARTER
Taiwan is one of the Fund’s largest market weightings, at approximately 20%. Lately, we have been finding interesting companies in health care, the auto supply chain for electric vehicles, automation and robotics. Although the Fund’s holdings in Taiwan slightly underperformed those in the benchmark during the quarter, we remain confident in the long-run story here. Two of the Fund’s top contributors were from Taiwan: Tung Thih Electronic Co. Ltd., a manufacturer of automobile electronic components and parts; and Silergy Corp., which designs and manufactures a broad range of analog integrated circuits.
India is also a large weighting in the Fund at roughly 20%. In late 2015 and February 2016, we visited 77 companies in and around Mumbai, New Delhi, Bangalore and Kolkata. While we saw no obvious groundswell of economic activity, we found pockets of strength and a number of interesting companies with attractive fundamentals, based on our metrics. During the quarter, stock prices of Indian pharmaceutical
manufacturers fell as the U.S. Food and Drug Administration stepped up its regulatory activity in India. Fund holdings Marksans Pharma Ltd., Natco Pharma Ltd. and Glenmark Pharmaceuticals Ltd. all suffered. Looking ahead, we believe India’s substantial cost advantage is likely to drive further market-share gains for its pharmaceutical industry as it continues to supply low-cost, high-quality medicine to the world.
The Fund’s weight in China remains substantially below that of the benchmark, which aided relative performance during the quarter, despite the Fund’s holdings being down more. We believe the economic and market trends in China are poor and we see a very difficult environment for equities to do well.
In contrast, Mexico has a strong, emerging middle class and a growing economy. An influx of manufacturing once done in China has expanded Mexico’s export base and created well-paying jobs. Strong export demand from the U.S. helped make Mexico a source of positive performance during the period.
Performance has stabilized and even rebounded in some areas of the Brazilian stock market. We see this as part of a broader phenomenon of stocks in several emerging markets bouncing back after having been oversold. In Brazil, the Fund holds only three companies that we see as high quality. One of these is Raia Drogasil S.A., a Brazilian drug-store chain that was a top contributor for the quarter. The company recently completed an acquisition and launched a proprietary pharmacy-benefits manager.
OUTLOOK
Manufacturing was the driver of emerging-market growth in the last up cycle when China and its demand for commodities played a big role. If emerging markets are now starting a new up cycle, we think manufacturing, innovation and political reform will likely be the drivers.
We strongly believe that the fundamental case for investing in emerging markets has not changed and remains attractive. We have seen the macroeconomic environment becoming more supportive for emerging-market stocks. Emerging-market equities have outperformed developed-market equities since January. Asset flows into emerging markets improved in February and March following a very difficult 2015. More specifically for the Fund, the valuations of quality growth companies appear more attractive after last year’s selloff in emerging markets.
Despite recent gains against the U.S. dollar, our view is that a number of emerging-market currencies remain undervalued. We believe low energy prices are likely to provide an additional boost to emerging economies that are net importers of oil. While we remain cautious toward countries tied to the production of oil and other natural resources, we continue to favor countries such as India, Taiwan, Mexico and the Philippines. Our view toward China remains cautious due to structural concerns.
Thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 10/1/07 | |||||||||||||||||
Emerging Markets Small Cap (WAEMX) — Investor | 1.27% | -9.69% | 0.07% | 2.71% | ||||||||||||||||
Emerging Markets Small Cap (WIEMX) — Institutional | 1.27% | -9.69% | 0.07% | 2.71% | ||||||||||||||||
MSCI Emerging Markets Small Cap Index | 4.28% | -9.20% | -2.56% | -0.51% | ||||||||||||||||
MSCI Emerging Markets Index | 6.41% | -12.03% | -4.13% | -1.92% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Small Cap Fund are Investor Class: 1.91% / Institutional Class — Gross: 1.82%, Net: 1.80%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Mexico) | 2.0% | |||
Silergy Corp. (Taiwan) | 1.9% | |||
Raia Drogasil S.A. (Brazil) | 1.9% | |||
Poya Co. Ltd. (Taiwan) | 1.9% | |||
Voltronic Power Technology Corp. (Taiwan) | 1.9% |
Company | % of Net Assets | |||
Security Bank Corp. (Philippines) | 1.8% | |||
Unifin Financiera SAPI de C.V. SOFOM (Mexico) | 1.8% | |||
Medytox, Inc. (Korea) | 1.8% | |||
Minor International Public Co. Ltd. (Thailand) | 1.7% | |||
Tung Thih Electronic Co. Ltd. (Taiwan) | 1.7% |
** | As of March 31, 2016, there were 108 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. ‡Inception: October 1, 2007. The MSCI Emerging Markets and Emerging Markets Small Cap indices are free float-adjusted market capitalization indices designed to measure the equity market performance of emerging markets. You cannot invest directly in these or any indices.
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WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND (WAFMX / WIFMX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Frontier Emerging Small Countries Fund is managed by a team of Wasatch portfolio managers led by Laura Geritz and Jared Whatcott.
Laura Geritz, CFA Lead Portfolio Manager |
Jared Whatcott, CFA Associate Portfolio Manager | OVERVIEW
The Wasatch Frontier Emerging Small Countries Fund — Investor Class fell -2.57% for the quarter ended March 31, 2016 and underperformed the MSCI Frontier Emerging Markets Index (Frontier |
Index), which gained 5.03%. Emerging markets experienced one of their best months on record in March, as evidenced by the 13.23% return of the MSCI Emerging Markets Index (Emerging Markets Index). In contrast, March was one of the worst months of performance for the Frontier Index relative to the Emerging Markets Index. Although heavyweights in the Frontier Index — Kuwait, Nigeria and Pakistan — managed small gains, what is more astonishing is that some of the stalwart countries — Argentina, Bangladesh and Sri Lanka — actually put up negative returns during what turned out to be a big rally.
Since the Fund is overweight in what we consider to be the real frontier countries (Vietnam, Bangladesh, Pakistan, Kenya and Sri Lanka) and substantially underweight in some of the emerging markets that rallied (the Philippines, Colombia and Peru), the performance discrepancy is pretty simple — we were sitting in the wrong countries during the rally and in some cases our stocks underperformed. While this was disappointing, it should not be startling — frontier markets usually lag emerging markets in rallies. If the rally continues, we would expect liquidity and fundamental improvement to support stocks in frontier markets. In essence, we would expect better days ahead for frontier markets relative to emerging markets.
DETAILSOFTHE QUARTER
Frontier and emerging markets began the year with sharp declines. By late January, however, global markets had started rebounding, which continued throughout the quarter. The rally was largely confined to energy and materials companies that benefited from strengthening commodity prices. We do not believe, however, that the higher property and infrastructure spending in China, presumably among the primary drivers of the rebound in commodity prices, is likely to prove sustainable. As such, we do not expect to change our view of countries like Peru and Colombia, where materials and energy names make up roughly 40% and 34% of each country’s benchmark, respectively. So while the Fund took what we believe is a short-term hit relative to its benchmark due to lack of exposure to, and the underperformance of our holdings in, these often volatile sectors, we remain confident that by focusing on companies with
long-term competitive advantages and sustainable earnings and cash flows, our process will provide the potential to generate healthy long-term returns for shareholders.
In addition to Peru and Colombia, where we mostly lacked exposure to the rebounds in their equity markets, the Fund also suffered from heavy weightings in poor-performing countries like Nigeria and Sri Lanka where we own what we consider to be a stable of strong consumer brand companies including global brands like Nestlé, Unilever and Guinness.
Vietnam continued to be a source of strength for the Fund. The country is one of Southeast Asia’s fastest-growing economies and is a signatory to the Trans-Pacific Partnership, which is expected to continue to boost foreign investment in the country. The Fund’s second-largest overall contributor was Vietnam Dairy Products. The company continues to grow both its top and bottom lines by double digits by maintaining its dominant market position in the country.
The Fund’s gain in the consumer-discretionary sector was more than double that of the benchmark. This was primarily due to Kuwait Foods Americana, a leading restaurant company operating in the Middle East and North Africa.
The sector of the Fund that detracted the most was consumer staples. Our weighting in consumer staples, which was nearly eight times that of the benchmark, hurt even though our stocks were not down as much. Within the sector, the Fund holds a number of what we consider to be high-quality African and South Asian companies, including food, breweries and consumer brand companies. Although many of these holdings detracted from performance in the quarter, we believe they are still very well positioned for long-term success.
OUTLOOK
Our view is that the stocks of companies with sustainable earnings growth, strong cash-flow generation, dominant market positions, strong competitive advantages and excellent management teams have the best potential to be rewarded in the long run.
In the first quarter of 2016, we were on the road again visiting companies in Malaysia, Thailand, Mexico, Indonesia, the Philippines, Vietnam, the United Arab Emirates and Pakistan. In each of these markets, we continued to find companies that we believe are positioned to flourish for years to come. In particular, we spent a combined six weeks in Southeast Asia scouring the markets for companies that meet our rigorous investment standards.
The turbulence witnessed this past quarter is part and parcel of investing in frontier and emerging markets. Yet market volatility often belies the underlying stability of the companies we own. While some markets are struggling for growth, others have pushed forward reforms and are taking steps that we believe could prove beneficial to investors.
We remain grateful for your continued trust with your investment.
Current | and future holdings are subject to risk. |
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WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND (WAFMX / WIFMX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 1/31/12 | |||||||||||||||||
Frontier Emerging Small Countries (WAFMX) — Investor | -4.17% | -10.32% | N/A | 7.62% | ||||||||||||||||
Frontier Emerging Small Countries (WIFMX) — Institutional | -3.80% | -9.98% | N/A | 7.72% | ||||||||||||||||
MSCI Frontier Emerging Markets Index | 2.25% | -12.07% | N/A | 2.47% | ||||||||||||||||
MSCI Frontier Markets Index | -2.16% | -12.54% | N/A | 5.27% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Frontier Emerging Small Countries Fund are Investor Class — Gross: 2.28%, Net: 2.25% / Institutional Class — Gross: 2.09%, Net: 2.05%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
*Not | annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Vietnam Dairy Products JSC (Vietnam) | 5.7% | |||
Square Pharmaceuticals Ltd. (Bangladesh) | 3.8% | |||
East African Breweries Ltd. (Kenya) | 3.2% | |||
Tanzania Breweries Ltd. (Tanzania, United Republic of) | 3.2% | |||
Nestlé Nigeria plc (Nigeria) | 2.3% |
Company | % of Net Assets | |||
Kuwait Foods Americana (Kuwait) | 2.2% | |||
PriceSmart, Inc. (Costa Rica) | 2.0% | |||
FPT Corp. (Vietnam) | 1.9% | |||
Universal Robina Corp. (Philippines) | 1.8% | |||
British American Tobacco Bangladesh Co. Ltd. (Bangladesh) | 1.8% |
** | As of March 31, 2016, there were 133 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. ‡Inception: January 31, 2012. The MSCI Frontier Emerging Markets and MSCI Frontier Markets indices are free float-adjusted market capitalization indices designed to measure the equity market performance of the global frontier and emerging markets. You cannot invest directly in these or any indices.
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WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Global Opportunities Fund is managed by a team of Wasatch portfolio managers led by JB Taylor and Ajay Krishnan.
JB Taylor Lead Portfolio Manager
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Ajay Krishnan, CFA Lead Portfolio Manager
| OVERVIEW
The Wasatch Global Opportunities Fund — Investor Class declined |
(AC) World Small Cap Index, which gained 0.70%.
In January, investors’ nervousness intensified sending most stocks sharply lower. The downward spiral continued until mid-February, when stocks began a dramatic recovery. As a result, the benchmark’s modest increase masks much more significant volatility during the quarter.
Unfortunately, the specific nature of the decline and recovery didn’t favor the Fund relative to the benchmark. During the beginning of the quarter, growth-oriented stocks tended to suffer disproportionately, reflecting investors’ fears of a slowdown in China and potentially in developed markets as well. Then, as the markets recovered, investors’ ongoing caution meant that some growth-oriented industries — such as biotech and software — didn’t fully participate in the broader rally. This was particularly true in the U.S., where many of the slowest-growing companies actually performed the best in the stock market. Therefore, the Fund’s holdings in areas with high potential for growth, but with less-established businesses, lost ground on a relative basis even as economic conditions supported continued optimism for their future prospects.
DETAILSOFTHE QUARTER
DIO Corp., based in South Korea, was the leading contributor to Fund performance during the quarter. DIO has developed a completely new procedure for dental implants that involves a 3-D scan of the patient’s jaw, relying more on technology than on the dentist’s skill. The procedure is a win-win for both dentists and patients. Dentists can see twice as many patients because of the procedure’s increased speed — while also charging 20% more. Patients benefit from much faster recovery times.
Another strong contributor to Fund performance was Seria Co. Ltd., which operates a chain of dollar stores (called 100-yen shops in Japan). The company continued to benefit from industry consolidation and a stronger yen, which has the effect of lowering the cost of many imported goods that are sold by Seria.
Additional contributors included a trio of U.S.-based industrials that were responsible for a substantial portion of our outperformance in the sector: Echo Global Logistics, Inc., Trex Co., Inc. and Spirit Airlines, Inc. In the case of Spirit, the airline had been taking advantage of sharply lower
fuel costs to improve margins and finance growth during the past two years. That growth orientation proved problematic, however, as customer complaints about reliability increased and other airlines, notably American, began competing aggressively on price to take share from Spirit. With a recent change in leadership at Spirit, the airline intends to pare growth to a more-manageable level of potentially 15% to 20% annually, while increasing expenditures to improve customer service. So far, investors have responded favorably.
Among detractors from the Fund’s performance, the most significant were several health-care companies including India’s Marksans Pharma Ltd. Based in Mumbai, Marksans markets its branded prescription and over-the-counter drugs in India and internationally, with the United Kingdom (U.K.) accounting for approximately 40% of revenues. The company’s stock tumbled in January on news that its manufacturing plant in Goa had failed a good manufacturing practice (GMP) inspection by the U.K. Medicines & Healthcare products Regulatory Agency (MHRA). In mid-March, the company announced that the U.K. regulator had issued a “Restricted GMP Certificate” that will allow Marksans to continue manufacturing and selling products considered critical for U.K. markets until the MHRA’s next inspection.
Two U.S.-based biotechs, Seattle Genetics, Inc. and Sangamo BioSciences, Inc., were also significant detractors. Both illustrate the general case of growth-oriented companies selling off during the beginning of the quarter and failing to fully participate in the recovery later in the quarter. We don’t see any company-specific problems, and we remain optimistic about future growth in these names and in the biotech industry.
OUTLOOK
During the first quarter, we trimmed our exposure to Japan — moving from a notable overweight to a near-neutral weight relative to the benchmark. In our view, corporate fundamentals for Japanese companies remain strong. However, we see the country’s risk profile as higher due to increased stock-price volatility and macroeconomic uncertainties.
Also, valuations have increased as other investors have come to recognize the opportunities in Japan. Based on how valuations have risen, we suspect we were early among institutional investors to opt for a substantially overweight position in Japan. Now, we think we’re in the first wave to reduce that exposure in favor of broad-based growth opportunities elsewhere. That said, we continue to hold key investments in Japanese companies.
As always, our analysis focuses heavily on firsthand research (including meetings with management teams), fundamental due diligence and attention to macroeconomic factors. Although the first quarter didn’t bring a significant rebound in the high-quality growth stocks favored by the Fund, we remain confident in our positioning for the future. In particular, we expect our companies’ quarter-end earnings results to be strong and have the potential to ultimately be reflected in their stock prices.
Thank you for the opportunity to manage your assets.
Current and future holdings are subject to risk. |
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WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | SINCE INCEPTION 11/17/08 | |||||||||||||||||
Global Opportunities (WAGOX) — Investor | 3.39% | -5.99% | 5.67% | 16.94% | ||||||||||||||||
Global Opportunities (WIGOX) — Institutional | 3.39% | -5.99% | 5.67% | 16.94% | ||||||||||||||||
MSCI AC World Small Cap Index | 4.87% | -4.50% | 5.39% | 14.99% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Opportunities Fund are Investor Class: 1.56% / Institutional Class — Gross: 1.46%, Net: 1.35%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small and micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Patrizia Immobilien AG (Germany) | 3.2% | |||
Unifin Financiera SAPI de C.V. SOFOM (Mexico) | 2.3% | |||
Cornerstone OnDemand, Inc. | 2.2% | |||
Rightmove plc (United Kingdom) | 2.0% | |||
Medytox, Inc. (Korea) | 2.0% | |||
Allegiant Travel Co. | 2.0% |
Company | % of Net Assets | |||
Voltronic Power Technology Corp. (Taiwan) | 2.0% | |||
Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Mexico) | 2.0% | |||
Ultimate Software Group, Inc. | 1.9% | |||
Frutarom Industries Ltd. (Israel) | 1.8% |
** | As of March 31, 2016, there were 96 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. ‡Inception: November 17, 2008. The MSCI AC (All Country) World Small Cap Index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities in developed and emerging markets. You cannot invest directly in this or any index.
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WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch International Growth Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley, Ken Applegate, Linda Lasater and Kabir Goyal.
Roger Edgley, CFA Lead Portfolio Manager |
Ken Applegate, CFA Portfolio Manager | OVERVIEW
Quality growth stocks did not have a strong start to 2016. Many stocks seemed to be reverting toward their historical average prices. For example, health care was the leading sector in the MSCI All Country (AC) World Ex-U.S.A. Small Cap Index in 2015, rising over 21%, and the performance of the Fund’s health-care stocks was even stronger. In the first quarter of 2016, health care was one of the worst-performing sectors in the Index, dropping | ||
Linda Lasater, CFA Associate Portfolio Manager
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Kabir Goyal, CFA Associate Portfolio Manager
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2%, and our stocks declined more. In addition to investors taking profits, the U.S. political arena and drug-pricing pressures have been negatively affecting the health-care sector globally. The Fund’s overweight position in the United Kingdom (U.K.) and the underperformance of our U.K. stocks also detracted from performance relative to the Index as concern over the country’s potential exit from the European Union (Brexit) dragged down stock prices.
The Wasatch International Growth Fund — Investor Class lost -2.78% in the first quarter of 2016 and underperformed the 0.68% return of its benchmark, the MSCI AC World Ex-U.S.A. Small Cap Index.
DETAILSOFTHE QUARTER
Japanese stocks have been a great source of performance for the Fund in recent years. We have benefited relative to the Index from strong stock selection and a significantly overweight position in the country. More recently, we have identified a number of developments in Japan that are cause for concern and have led us to decrease our weight to a neutral stance versus the benchmark.
In particular, we reduced weights or exited some of 2015’s strongest-performing Japanese stocks such as online maintenance, repair and operations business MonotaRO Co. Ltd., real estate Internet portal Next Co. Ltd., retailer Ryohin Keikaku Co. Ltd. and payment-processing company GMO Payment Gateway, Inc. While the long-term fundamentals
of many Japanese companies continue to be positive, we believe today’s risk-reward tradeoff for the overall market is not as compelling.
We have used the proceeds from selling Japanese equities to fund purchases in a handful of emerging-market companies. While returns over the last five years for emerging markets have been uninspiring, we believe that selectively chosen emerging-market companies offer growth potential, reasonable valuations, attractive dividend payouts, and the chance to benefit from stabilizing commodity prices and from strengthening currencies.
We have focused our emerging-market investments in countries like Mexico where we added Grupo Aeroportuario del Centro Norte S.A.B. de C.V., an airport operator benefiting from increased travel, and Promotora y Operadora de Infraestructura S.A.B. de C.V., a leading infrastructure company. We also added GT Capital Holdings, Inc., operator of Toyota dealerships and a leading bank in the Philippines. In Taiwan, a strong source of small and innovative engineering companies, we increased our weight in Voltronic Power Technology Corp. and introduced Ennoconn Corp. to the Fund.
We slightly reduced our weight in the U.K., partly to fund our emerging-market purchases and partly due to uncertainty surrounding Brexit. While the odds remain against Brexit, if it were to be approved, there would be negative implications for the U.K. economy and markets. U.K. markets sold off indiscriminately during the quarter and our stocks were not immune. Our investment team will travel to Europe in May and the U.K. in June, which should provide a fresh perspective of company and market fundamentals.
In other portfolio moves, we sold our shares in Korean power plant maintenance service provider KEPCO Plant Service & Engineering Co. Ltd. What we had previously identified as delays in international projects, a key driver of growth for the company, have now become cancellations, a development we think is likely to persist. We also sold our shares in New Zealand software company Diligent Corp. after the company received an acquisition offer.
OUTLOOK
We have been observing several developments in global markets and are repositioning the Fund to potentially benefit from them. For example, in emerging markets we are starting to see more compelling risk/reward profiles for a number of countries. Although we currently have a neutral weight in emerging markets overall, we remain significantly underweight versus the benchmark in China. We are much more positive on investment opportunities in countries like Mexico, India and the Philippines.
We continue to focus our research efforts on deep due diligence and open debate with our Wasatch colleagues regarding our investment thesis for each company. The level of conviction we have in our portfolio companies remains extremely high.
We thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
International Growth (WAIGX) — Investor | 5.38% | 5.46% | 8.20% | 6.60% | ||||||||||||||||
International Growth (WIIGX) — Institutional | 5.42% | 5.49% | 8.20% | 6.60% | ||||||||||||||||
MSCI AC World Ex-U.S.A. Small Cap Index | 6.00% | -0.60% | 2.39% | 3.88% | ||||||||||||||||
MSCI World Ex-U.S.A. Small Cap Index | 6.46% | 1.99% | 3.84% | 3.09% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Growth Fund are Investor Class: 1.50% / Institutional Class — Gross: 1.37%, Net: 1.35%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.
*Not | annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Domino’s Pizza Enterprises Ltd. (Australia) | 3.7% | |||
Patrizia Immobilien AG (Germany) | 3.6% | |||
Ai Holdings Corp. (Japan) | 2.2% | |||
Vitasoy International Holdings Ltd. (Hong Kong) | 2.2% | |||
Sartorius Stedim Biotech (France) | 2.2% |
Company | % of Net Assets | |||
Rightmove plc (United Kingdom) | 2.1% | |||
Auto Trader Group plc (United Kingdom) | 2.1% | |||
Chr. Hansen Holding A/S (Denmark) | 2.1% | |||
Abcam plc (United Kingdom) | 2.0% | |||
Medytox, Inc. (Korea) | 2.0% |
** | As of March 31, 2016, there were 92 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. The MSCI AC (All Country) World Ex-U.S.A. Small Cap Index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities in developed markets, excluding the United States, and in emerging markets. The MSCI World Ex-U.S.A. Small Cap Index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities in developed markets, excluding the United States. You cannot invest directly in these or any indices.
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WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch International Opportunities Fund is managed by a team of Wasatch portfolio managers led by Laura Geritz and Jared Whatcott.
Laura Geritz, CFA Lead Portfolio Manager |
Jared Whatcott, CFA Associate Portfolio Manager | OVERVIEW
The Wasatch International Opportunities Fund — Investor Class gained 2.14% during the first quarter of 2016 and continued to outperform its benchmark, the MSCI All Country (AC) World Ex- |
U.S.A. Small Cap Index, which gained 0.68%.
Global markets were a bit unnerved coming out of the gate in the new year, first by numbers that pointed to slower economic growth in China, and then by the tripping of multiple circuit breakers on China’s main stock exchanges. In addition, investors grappled with uncertainty over whether the U.S. Federal Reserve would continue raising interest rates and whether the European Central Bank would continue lowering interest rates, and fears that the United Kingdom (U.K.) might leave the European Union.
Global markets rebounded strongly in the back half of the quarter mainly led by the energy and materials sectors, as commodity prices stabilized presumably due to higher property and infrastructure spending in China. And although the Fund trailed during the rally, it managed to end the quarter well ahead of the Index.
DETAILSOFTHE QUARTER
The Fund’s outperformance of the Index came down to stock picking. We faced headwinds from emerging markets where the Fund continued to be overweight relative to the developed markets in the Index. Nevertheless, we want exposure to emerging markets because we believe these countries have tremendous headroom for growth. In addition, stocks with market caps under $1 billion like those in which the Fund invests generally continued to underperform those with market caps over that threshold. Despite these challenges, the Fund outperformed the developed- and emerging-market portions of the Index, as well as market-cap segments of over and under $1 billion. In short, Wasatch’s process of investing in companies that we consider to be high quality did not disappoint.
The main source of strength for the Fund’s performance relative to the Index was our Japanese stocks. Top contributors included Gurunavi, Inc., an Internet company; Dip Corp., an operator of online websites focused on part-time and seasonal jobs in Japan; and Seria Co. Ltd., the second largest “100-yen” discount retail chain in the country.
Our significant underweight of U.K. stocks contributed to results versus the Index, since the U.K. portion of the Index fell short of global returns over the first three months of the year.
Unlike previous quarters when our lack of exposure to Canadian energy and materials companies benefited the Fund, the rally in these volatile stocks over the last few weeks of the quarter meant that the Fund did not benefit from Canada’s strong performance. Likewise, even though it is a small part of the Index, our lack of exposure to South African materials stocks hurt.
Information technology was a top-contributing sector to performance during the quarter. In addition to the Japanese Internet names already mentioned, Logo Yazilim Sanayi Ve Ticaret AS, a Turkish software firm for small to medium-size enterprises, offered a significant boost to performance.
Australian online travel company Webjet Ltd. was the clear leader among our consumer-discretionary holdings. The company has profited from strong travel momentum aided by a cheaper Australian dollar, and its stock price has more than doubled in the last nine months.
The health-care sector was another sound contributor to the Fund’s performance. Despite poor performance by Lee’s Pharmaceutical Holdings Ltd., both Indonesian pharmaceutical company PT Kimia Farma (Persero) Tbk and United Arab Emirates hospital operator NMC Health plc helped produce a positive return in a sector that was down over 2% in the Index.
The industrials sector detracted the most from the Fund’s performance. Some of our portfolio companies in the air freight and logistics and transportation infrastructure industries struggled with economic headwinds.
OUTLOOK
As central bankers have reached for ways to squeeze growth out of the world’s economies, some have even embarked on a new experiment of negative interest rates. In a world stuck on a path of slowing growth and approaching what seems to be the limit of monetary-policy effectiveness, where do we go from here? Let us tell you where our team went. In the first three months of 2016, members of our team were on the road visiting companies in Malaysia, Thailand, Mexico, Indonesia, the Philippines, Vietnam, Singapore, the United Arab Emirates, Pakistan, India, Japan, Korea and China.
The point is that while the global economy may well be in uncharted waters, we have continued to find companies that we believe are high quality with the potential to flourish for years to come — companies that have strong balance sheets, solid cash flows, innovative management teams, and the ability to navigate the uncertainties that are, and will continue to be, part of the global landscape.
And while we don’t know exactly how economies will react to the current efforts of central bankers and politicians, or exactly where global markets are headed, we remain confident in the quality of our portfolio companies and are excited for the journey forward.
Thank you again for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
International Opportunities (WAIOX) — Investor | 9.34% | 6.24% | 8.27% | 7.15% | ||||||||||||||||
International Opportunities (WIIOX) — Institutional | 9.73% | 6.61% | 8.35% | 7.19% | ||||||||||||||||
MSCI AC World Ex-U.S.A. Small Cap Index | 6.00% | -0.60% | 2.39% | 3.88% | ||||||||||||||||
MSCI World Ex-U.S.A. Small Cap Index | 6.46% | 1.99% | 3.84% | 3.09% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Opportunities Fund are Investor Class: 2.23% / Institutional Class — Gross: 1.96%, Net: 1.95%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in foreign securities, especially in frontier and emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.
*Not | annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Webjet Ltd. (Australia) | 2.6% | |||
Gurunavi, Inc. (Japan) | 2.6% | |||
Collins Foods Ltd. (Australia) | 2.0% | |||
Dip Corp. (Japan) | 2.0% | |||
Next Co. Ltd. (Japan) | 1.9% |
Company | % of Net Assets | |||
Australian Pharmaceutical Industries Ltd. (Australia) | 1.7% | |||
Logo Yazilim Sanayi Ve Ticaret AS (Turkey) | 1.7% | |||
Voltronic Power Technology Corp. (Taiwan) | 1.6% | |||
Trade Me Group Ltd. (New Zealand) | 1.6% | |||
Sigma Pharmaceuticals Ltd. (Australia) | 1.5% |
**As | of March 31, 2016, there were 146 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. The MSCI AC (All Country) World Ex-U.S.A. Small Cap Index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities in developed markets, excluding the United States, and in emerging markets. The MSCI World Ex-U.S.A. Small Cap Index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities in 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 / WILCX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Large Cap Value Fund is managed by a team of Wasatch portfolio managers led by David Powers.
David Powers, CFA Lead Portfolio Manager | OVERVIEW
The Wasatch Large Cap Value Fund — Investor Class gained 1.95% while slightly outperforming the Russell 1000 Value Index, which returned 1.64% in the first quarter of 2016. Entering 2016, investors were closely monitoring global growth and stability in the wake of ongoing weakness in prices for oil and other commodities. Nonetheless, markets were prepared overall for continued reasonable |
growth in the economy, and for the U.S. Federal Reserve (Fed) to implement additional modest increases in short-term rates. However, the new year opened with data showing a contraction in China’s manufacturing sector, leading Chinese stock exchanges to hit their circuit breakers and dragging down stocks globally. In addition, crude oil prices slid to $30 a barrel as January progressed. Equities turned upward in mid-February and eventually recovered the ground lost aided by supportive central-bank policies globally and a rebound in oil prices to the $40 range.
Performance for the Fund was principally driven by stock selection rather than any thematic exposures. From a sector perspective, utilities, consumer staples and industrials were the main contributors to results relative to the benchmark. Stock selection within financials was the most significant detractor. Our health-care holdings also acted as a slight drag on the Fund’s return.
DETAILSOFTHE QUARTER
Leading individual contributors to the Fund’s performance in the quarter included electrical-equipment and industrial-components manufacturer Eaton Corp. plc. Eaton’s results in the fourth quarter of 2015 exceeded expectations and were accompanied by improved forward guidance. Additionally, investors have taken a positive view of management’s ability to deal with an uncertain economy by managing costs and finding efficiencies. We continue to view the stock as relatively attractive from a valuation standpoint.
A position we initiated in the fourth quarter of 2015 in electric utility Exelon Corp. was also a significant contributor. Exelon is the leading U.S. operator of nuclear power plants. The company has seen its earnings and stock price suffer as low natural gas prices eroded its competitive position within the power-generation market. Exelon’s stock price benefited during the quarter as a proposed merger gained approval and energy prices came off of their recent lows. We have maintained the position as Exelon continues to trade at a valuation below that of the broader utilities group.
Retailer Macy’s, Inc. was another contributor, as its stock rebounded off of recent lows. The stock had struggled as the strengthening U.S. dollar led to lower international tourist traffic at its flagship Manhattan store. In addition, unseasonably warm winter weather took a toll on apparel and
accessory sales. More broadly, Macy’s has suffered along with other brick-and-mortar retailers from growing e-commerce competition. Our patience in continuing to hold the stock was rewarded in the quarter as Macy’s fourth quarter 2015 sales came in above expectations. We continue to hold the stock believing it remains reasonably valued given our outlook for the company.
On the downside, banking giant Citigroup, Inc. was the leading individual detractor. Global banks as a group lagged in the quarter, in part due to a scaled-back outlook for Fed rate hikes, as any rise in interest rates would stand to improve net interest margins for lenders. Additionally, Citi’s stock seemed to be punished for the bank’s relatively high exposure to emerging markets, given the flaring up of China concerns in January. We view the stock as having been oversold based on the market’s memory of the impact of emerging-market exposure during the last financial crisis.
Another leading detractor was financial-services provider Voya Financial, Inc. Pushed-back expectations for Fed action on interest rates negatively affected Voya’s stock. The company is also viewed as vulnerable to financial-market volatility due to annuity business it wrote in the mid-2000s, which was based on guaranteeing a certain return to retirement investors. We have reduced our position size due to the stock’s volatility, but view the company as undervalued given Voya’s high capital levels and the prospect of its annuity exposure rolling off over time.
Outside of financials, specialty pharmaceutical company Shire plc performed poorly, in part due to a selloff in the broader pharmaceutical space, but also due to uncertainties raised by a proposed acquisition. We view the stock as trading at a significant discount based on our growth projections for the company, and have maintained the position.
OUTLOOK
There appears to be enough forward momentum in the economy to support some further moderate upward progress for stocks, all else being equal. Given this outlook, we modestly increased the Fund’s exposure to cyclical companies in the wake of the global equity market selloff in early 2016, based on where we saw oversold valuations.
That said, we continue to believe that the current stock-market cycle is in its later stages. As a result, the Fund has a bias toward larger market capitalization companies positioned to weather a shift in sentiment. As always, we believe we have positioned the Fund with an overall emphasis on the inexpensive stocks of companies we consider to be high quality with strong balance sheets and higher-than-average dividend yields.
We believe the Fund is well-positioned for the longer term, and thank you for your continued investment.
Current | and future holdings are subject to risk. |
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WASATCH LARGE CAP VALUE FUND (FMIEX / WILCX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Large Cap Value (FMIEX) — Investor | 7.15% | -0.94% | 5.62% | 5.13% | ||||||||||||||||
Large Cap Value (WILCX) — Institutional | 7.11% | -0.91% | 5.71% | 5.18% | ||||||||||||||||
Russell 1000® Value Index | 7.37% | -1.54% | 10.25% | 5.72% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Large Cap Value Fund are Investor Class — Gross: 1.12%, Net: 1.10% / Institutional Class — Gross: 1.44%, Net: 0.95%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 1/31/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investments in value stocks can perform differently from the market as a whole and from other types of stocks and can continue to be undervalued by the market for long periods of time. Loss of principal is a risk of investing.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Duke Energy Corp. | 5.0% | |||
General Electric Co. | 4.8% | |||
Cisco Systems, Inc. | 4.2% | |||
Johnson & Johnson | 4.2% | |||
JPMorgan Chase & Co. | 4.1% |
Company | % of Net Assets | |||
Citigroup, Inc. | 4.0% | |||
Pfizer, Inc. | 3.8% | |||
Wells Fargo & Co. | 3.8% | |||
Procter & Gamble Co. (The) | 3.8% | |||
Wal-Mart Stores, Inc. | 3.5% |
** | As of March 31, 2016, there were 33 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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 / WILSX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Long/Short Fund is managed by a team of Wasatch portfolio managers led by Michael Shinnick and Terry Lally.
Michael Shinnick Lead Portfolio Manager |
Terry Lally, CFA Portfolio Manager | OVERVIEW
As 2015 drew to a close, investors were closely monitoring global growth and stability conditions in the wake of ongoing price weakness for oil and other commodities. On |
balance, however, markets were anticipating continued reasonable progress in the economy. Investors were also expecting the U.S. Federal Reserve (Fed) to continue implementing modest increases in short-term interest rates. These expectations were thwarted as data showing a contraction in China’s manufacturing sector led Chinese stock exchanges to plummet. Global equities quickly followed suit. In addition, crude-oil prices slid to $30 a barrel. Equities turned upward in mid-February and eventually recovered the ground lost, driven by the Fed signaling it would pause rate increases and by a rebound in oil prices to the $40 range.
For the quarter, the Wasatch Long/Short Fund — Investor Class gained 6.58%, significantly outperforming the 1.35% return of the S&P 500 Index. The Fund’s long positions were the source of outperformance relative to the Index, aided by a rebound in some longstanding energy-related holdings. In addition, our consumer-discretionary holdings performed well, buoyed by a stronger-than-expected holiday season. The short side of the Fund detracted from performance, with a single holding accounting for much of the weakness.
DETAILSOFTHE QUARTER
A pair of longstanding positions in exploration and production (E&P) firms Bill Barrett Corp. and Denbury Resources, Inc. rose sharply in the quarter and were among the Fund’s top contributors to performance. Both stocks were supported by the rebound in energy prices. While the energy sector as a whole continues to operate against an uncertain backdrop, we believe the market is beginning to recognize companies, such as Bill Barrett and Denbury, with the financial wherewithal to weather commodity-price volatility.
Another leading contributor was luxury-apparel designer Michael Kors Holdings Ltd., whose shares benefited as the company posted strong operating results despite a challenging environment for retailers.
Finally, our overall positioning within financials added to performance versus the Index, as we had a lack of exposure to global banks, which suffered early in the quarter as the expected timetable for higher interest rates was delayed.
As always, we seek to benefit by shorting stocks we believe are trading at unsustainably high multiples. The top
contributor among our short positions for the quarter was specialty health-care company, Zeltiq Aesthetics, Inc.
Prescription drug benefits manager Express Scripts Holding Co. was the leading detractor among the Fund’s long positions. The company’s share price declined as a dispute with its largest client over pricing became public. We trimmed the position based on the uncertain near-term outlook for the stock.
Not all energy stocks participated in the rally and shares of Unit Corp. dropped notably in the quarter. Unit’s business is divided roughly equally between E&P and oil-field services. While the stock was hurt in the quarter by soft demand for oil-rig rentals, Unit’s balance sheet benefits from the company’s assets in the form of rig ownership, and we have maintained our exposure there.
Department-store chain JC Penney Co., Inc. was the leading detractor among the Fund’s short positions by a wide margin. The company’s shares rose on favorable same-store sales results for the fourth quarter of 2015, but JC Penney continues to lose money and faces daunting competition from both online retailers and traditional brick-and-mortar peers. Food-services provider Sysco Corp. also detracted on the short side of the Fund.
We re-entered Citigroup, Inc., shares of which dropped on heightened concerns over the outlook for banks in a world of persistently low interest rates and soft loan demand. In a similar vein, we added a position in PNC Financial Services Group, Inc. We also quickly re-established Apple, Inc. as our largest position following a period of weak performance, and were quickly rewarded as the stock rebounded.
OUTLOOKAND POSITIONING
The year 2015 was very challenging for the Long/Short Fund. Throughout this period and into 2016, we have continued to adhere to our valuation discipline. In the most-recent quarter, we began to see some unwinding of the market dislocations that provided such a headwind to the Fund’s performance last year. In broad terms, the performance of momentum- versus value-oriented stocks has shown signs of normalizing.
Within energy, investors appear more willing to make the effort to separate long-term winners from companies not as well-positioned to withstand a volatile pricing environment. We continue to believe that exposure to energy-related companies and others with tangible assets has the potential to be highly beneficial, given a global backdrop where central banks lack a clear path to addressing deflation.
We have asked for your patience as we manage through this unprecedented market cycle, and we thank you for your continued confidence in and investment with us. We remain excited about the opportunities we are seeing, and we feel confident that the Fund is well-positioned to over time play a valuable role in your portfolio.
Thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH LONG/SHORT FUND (FMLSX / WILSX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Long/Short (FMLSX) — Investor | 7.64% | -9.19% | 1.34% | 4.10% | ||||||||||||||||
Long/Short (WILSX) — Institutional | 7.87% | -8.90% | 1.45% | 4.16% | ||||||||||||||||
S&P 500® Index | 8.49% | 1.78% | 11.58% | 7.01% | ||||||||||||||||
Citigroup U.S. Domestic 3-Month Treasury Bills Index | 0.07% | 0.08% | 0.06% | 1.07% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Long/Short Fund are — Investor Class: 1.61% / Institutional Class — Gross: 1.47%, Net: 1.46%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. Expenses include dividend expense on short sales and interest expense. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 12/13/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 12/13/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
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.
*Not | annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Apple, Inc. | 4.2% | |||
Iron Mountain, Inc. | 4.0% | |||
Cisco Systems, Inc. | 3.9% | |||
Oracle Corp. | 3.8% | |||
Macy’s, Inc. | 3.4% |
Company | % of Net Assets | |||
Steel Dynamics, Inc. | 3.4% | |||
Bill Barrett Corp. | 3.3% | |||
QUALCOMM, Inc. | 3.1% | |||
United Continental Holdings, Inc. | 3.1% | |||
Mosaic Co. (The) | 3.1% |
** | As of March 31, 2016, there were 40 long and 16 short holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. The S&P 500 Index includes 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged and 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, 2016 (UNAUDITED) | |
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The Wasatch Micro Cap Fund is managed by a team of Wasatch portfolio managers led by Dan Chace.
Dan Chace, CFA Lead Portfolio Manager | OVERVIEW
U.S. equities got off to a volatile start in the first quarter of 2016. The Wasatch Micro Cap Fund declined -5.03%, while its benchmark, the Russell Microcap Index fell -5.43%. Before rebounding from its February low, the Index had been down nearly 18% on the year. While positive U.S. economic data helped the large-cap averages eke out modest gains for the quarter, micro caps finished lower. |
During market declines, the Fund has frequently outperformed its benchmark. That pattern continued, with the Fund holding up better than the Index in what was a weak quarter for micro caps.
DETAILSOFTHE QUARTER
One of the primary reasons the Fund outperformed in the quarter was stock selection in the financials sector, especially banking. The Index’s financials holdings were down more than 3% while the Fund’s holdings were up close to 5%. Given the lackluster growth profile of many financial companies, we are significantly underweight in the sector relative to our benchmark.
The Fund’s outperformance in financials was led by the announced acquisition of Avenue Financial Holdings, Inc. by Pinnacle Financial Partners, Inc., two banks held in the Fund. Both banks operate in areas of Tennessee with favorable demographics and strong economic growth in the markets they serve. Because proceeds from the sale of Avenue will be paid primarily in Pinnacle stock rather than in cash, we liquidated our position in Pinnacle to maintain our desired weight in Avenue.
The consumer-discretionary sector was another area of outperformance attributable to stock selection and our overweight versus the benchmark. Our retail and restaurant holdings generally performed well, as gains in U.S. employment and wages have supported our investment thesis and provided a positive backdrop for consumer stocks.
During the quarter, we added LendingTree, Inc. and Trex Co., Inc. Both stocks were strong contributors to performance during the first quarter. LendingTree is a marketing channel for banks and other lenders to find borrowers. Although the stock was already well off its highs of 2015, it fell sharply in January and February on what we viewed as minimal negative news. After stepping up our research on the company, we began buying the stock in January. We bought Trex, a manufacturer of non-wood decking, after discussing its fundamentals and valuation with one of our Wasatch team members who knows the company well. Soon afterward, Trex announced strong quarterly earnings and the stock outperformed.
USA Technologies, Inc. was the Fund’s second-largest contributor to performance during the quarter. We first discovered this provider of cashless systems for vending
machines in June 2014 when its market cap was $66 million — small even by micro-cap standards. We established and added to our position later that year. Though we trimmed our position in USA Technologies late last year, recent performance has been solid in our view, and conversations with its customers have increased our confidence.
Notable areas of weakness in the market and the Fund were information technology and health care, two sectors where we are typically overweight versus the Index given their growth and innovation relative to other sectors. Software companies accounted for our two greatest detractors from performance for the quarter. SPS Commerce, Inc., a provider of software that helps retail suppliers manage their supply chains, posted disappointing earnings. We reduced our position on concerns that the company’s growth may be slowing. Tyler Technologies, Inc. provides software for state and municipal governments. Although Tyler’s quarterly earnings and full-year guidance for 2016 fell short of expectations, we remain excited about the company’s long-term prospects. Tyler is a leader in a very large market still in need of significant modernization.
Within health care, biotechnology companies Cempra, Inc. and Intra-Cellular Therapies, Inc. were two of the biggest detractors. Both companies have large market opportunities and drugs with reasonable likelihood of approval in our view. We consider biotechnology an important industry for growth-oriented micro-cap investors. Deep due diligence — led by a doctorate-level analyst with clinical research experience — helps us to identify biotech companies with a strong combination of science, management, and a clear plan for delivering products to market.
Volatility can provide opportunities to cull weaker holdings and free up cash for other investments. The nine positions we sold during the quarter consisted mainly of investments that failed to meet our growth expectations. We added 10 companies that we think have better prospects.
OUTLOOK
While optimism about the pace of U.S. economic growth has improved in recent weeks, the global economic environment is still quite unsettled. Our base scenario is that the U.S. economy is not headed into recession and that growth in key areas of the Fund — such as health care and technology — will persist. We also anticipate a modestly stronger U.S. consumer and pockets of growth globally.
As bottom-up investors, our goal is to discover and invest in micro-cap companies that have strong growth potential and are not dependent upon broader macroeconomic factors. While valuation is always an essential consideration in equity investing, we believe the current unpredictable environment makes assessing the fundamental momentum of a business more important than ever. While surprises will always occur, we are optimistic about the prospects for growth and profitability of the companies we hold in the Fund.
Thank you for the opportunity to manage your assets.
Current and future holdings are subject to risk. |
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WASATCH MICRO CAP FUND (WMICX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Micro Cap | 0.54% | -12.13% | 5.98% | 3.72% | ||||||||||||||||
Russell Microcap® Index | -1.89% | -13.05% | 6.61% | 3.18% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Fund are 1.90%. The expense ratio shown elsewhere in this report may be different. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Investing in 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 | |||
LGI Homes, Inc. | 2.7% | |||
CareTrust REIT, Inc. | 2.5% | |||
Avenue Financial Holdings, Inc. | 2.5% | |||
ICON plc (Ireland) | 2.2% | |||
Ensign Group, Inc. (The) | 2.2% |
Company | % of Net Assets | |||
Ultimate Software Group, Inc. | 2.2% | |||
Superior Uniform Group, Inc. | 1.9% | |||
HealthEquity, Inc. | 1.9% | |||
MakeMyTrip Ltd. (India) | 1.8% | |||
ExamWorks Group, Inc. | 1.8% |
** | As of March 31, 2016, there were 94 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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. 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 MICRO CAP VALUE FUND (WAMVX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Micro Cap Value Fund is managed by a team of Wasatch portfolio managers led by Brian Bythrow.
Brian Bythrow, CFA Lead Portfolio Manager
| OVERVIEW
The Wasatch Micro Cap Value Fund lost -2.26% in what was a volatile period for U.S. equities. The Fund fell less than its benchmark, the Russell Microcap Index, which lost -5.43% in the first quarter of 2016. Stocks began the quarter with a steep decline as concerns about global economic growth weighed on investor sentiment. Uncertainty about looming interest-rate hikes from the U.S. |
Federal Reserve (Fed) also hung over the market. In an unusual and dramatic reversal, equities rallied strongly during the latter part of the quarter as investor fears abated.
Heavily weighted in small banks, the Microcap Index did not fare as well as many other indices. Because the loan revenues of banks are linked to long-term interest rates, bank stocks did not benefit as much from the more-accommodative outlook for interest rates that fueled much of the rebound in equities. Our underweight position in banks not only mitigated our relatively poor stock selection in the financials sector, it allowed us to invest more in other areas where our stock selection was beneficial.
With health care the worst-performing sector of the Index by far, our underweight position in the sector was a tailwind for the Fund. In addition, our health-care stocks held up better than those in the Index. As a result, health care was our greatest source of outperformance and a main reason the Fund declined less than its benchmark during the quarter.
DETAILSOFTHE QUARTER
One of the strongest contributors to Fund performance for the quarter was John B. Sanfilippo & Son, Inc. (JBSS). The company distributes peanut and tree-nut products in the U.S. under the Fisher, Orchard Valley Harvest and other brand names. It also processes nut products for private-label retailers. JBSS is experiencing strong demand for its products and gaining market share in key segments of its business.
Specialty food-products distributor The Chefs’ Warehouse, Inc. was another top contributor. The company sells primarily to chefs who own or operate restaurants, catering services and fine-dining establishments. The Chefs’ Warehouse is beginning to reap the benefits of its recent acquisitions, as evidenced by increases in net sales and earnings per share.
The weak health-care sector accounted for eight of the Fund’s 10 largest detractors from performance during the first quarter. Our greatest detractor for the quarter was India’s Marksans Pharma Ltd. Based in Mumbai, Marksans markets its branded prescription and over-the-counter drugs in India and internationally, with the United Kingdom (U.K.) accounting for approximately 40% of revenues. Marksans’ stock tumbled in January on news that its manufacturing plant in Goa had failed a good manufacturing
practice (GMP) inspection by the U.K. Medicines & Healthcare products Regulatory Agency (MHRA). In mid-March, the company announced that the U.K. regulator had issued a “Restricted GMP Certificate” that will allow Marksans to continue manufacturing and selling products considered critical for U.K. markets until the MHRA’s next inspection.
Other significant detractors in health care included Universal Health International Group Holding Ltd. and Cempra, Inc. Universal Health sells pharmaceutical products in China through its retail chain and distribution centers. Cempra is a clinical-stage biopharmaceutical company that develops antibiotics. We sold Universal Health in response to deteriorating company fundamentals. Cempra and several of its peers in the Fund were sold on concerns about valuations in the biotechnology and pharmaceutical industries.
OUTLOOK
Just as concerns about tighter U.S. monetary policy and slower growth in China appeared to trigger the rapid retreat in equity prices at the quarter’s outset, the subsequent rebound unfolded nearly as swiftly on signs of Chinese stabilization and a less-aggressive path for U.S. interest rates. We sought to take advantage of the volatility by establishing new positions for the Fund in stocks that we believe had been beaten down excessively. In particular, we added several industrial companies that stand to benefit from looser Fed policy and from the weaker dollar that may follow. We also added to existing Fund positions in cyclical growth companies that we believe are well-positioned for a continuation of the low-interest-rate, muddle-through economy of the past several years.
We think recently stepped-up efforts by the world’s central bankers to depress long-term interest rates are likely to restrain bank earnings by holding down market interest rates for loans. Until the spread between short-term and long-term interest rates is allowed to normalize, we expect the Fund to remain underweighted in banks and for the industry to lag the broader market.
Despite our cautious outlook for banking overall, we continue to find a few micro-cap banks that we consider attractive. Our approach has been to seek reasonably priced, well-managed banks that are growing faster than the industry as a whole in metropolitan areas that are experiencing above-average population growth. We expect banks with these characteristics to either be rewarded with higher earnings multiples or to be acquired by competitors.
Our investment template for micro caps in general follows very much along the same lines. In keeping with the Fund’s value orientation, we look for reasonably priced or undervalued small companies with the potential for attractive growth. As the sales and earnings of these undiscovered growers increase, our experience has been that increased attention from investors has resulted in higher valuations for the stocks.
Thank you for the opportunity to manage your assets.
Current and future holdings are subject to risk. |
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WASATCH MICRO CAP VALUE FUND (WAMVX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Micro Cap Value | 1.11% | -0.96% | 9.30% | 7.51% | ||||||||||||||||
Russell Microcap® Index | -1.89% | -13.05% | 6.61% | 3.18% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Value Fund are Gross: 2.09%, Net: 2.03%. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investments in value stocks can perform differently from the market as a whole and from other types of stocks and can continue to be undervalued by the market for long periods of time. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Fabrinet | 1.5% | |||
LGI Homes, Inc. | 1.3% | |||
Ebix, Inc. | 1.3% | |||
Atlas Financial Holdings, Inc. | 1.2% | |||
Chefs’ Warehouse, Inc. (The) | 1.2% |
Company | % of Net Assets | |||
Customers Bancorp, Inc. | 1.2% | |||
John B. Sanfilippo & Son, Inc. | 1.2% | |||
Turk Tuborg Bira ve Malt Sanayii A.S. (Turkey) | 1.1% | |||
NV5 Global, Inc. | 1.1% | |||
Perficient, Inc. | 1.1% |
** | As of March 31, 2016, there were 119 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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. 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 SMALL CAP GROWTH FUND (WAAEX / WIAEX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Small Cap Growth Fund is managed by a team of Wasatch portfolio managers led by JB Taylor and Jeff Cardon.
JB Taylor Lead Portfolio Manager |
Jeff Cardon, CFA Portfolio Manager | OVERVIEW
Small-cap stocks got off to a volatile start in the first quarter of 2016. Through the first week of February, the Russell 2000 Growth and Russell 2000 indices were down -19% and -16%, |
respectively. For small-cap investors, perhaps the January Effect was delayed to February, as both indices rallied strongly to finish the quarter and erased most of their losses. Market commentators have pointed to the U.S. Federal Reserve backing off its rhetoric of steady interest-rate increases, a reversal in the strong U.S. dollar, and a bottoming of commodity prices as reasons for the market’s pivot in the quarter. At quarter’s end, the Russell 2000 Growth declined -4.68% while the Russell 2000 finished down -1.52%. The Wasatch Small Cap Growth Fund — Investor Class fell -4.36%.
DETAILSOFTHE QUARTER
The strongest theme to emerge when parsing the quarter’s results was the market’s changing appetite for higher-growth stocks. This was most apparent when looking at the indices by industry. The fastest-growing industries of the economy — technology services, health technology and health services — delivered the worst stock returns during the first quarter of 2016. In 2015, these were a few of the only industries to contribute positively to index performance. Conversely, stocks from the non-energy materials, utilities, process industries and producer manufacturing industries, produced the best returns in the quarter after underperforming for all of 2015.
The Fund finished the quarter with performance in line with the Russell 2000 Growth but behind the Russell 2000. This is mostly explained by our large underweight in one high-growth industry, biotechnology, offset by our relatively large weight in another high-growth industry, technology services. Being underweight in biotech was positive for relative performance, especially versus the Russell 2000 Growth Index that had nearly twice our weight in biotechnology stocks.
On the other hand, our decision to overweight technology-services stocks hurt us disproportionately in the quarter. Information-technology stocks were among the Fund’s worst detractors in the first quarter. While biotech and technology services comprise companies with entirely different fundamental drivers, it appears technology stocks, and specifically the higher-growth companies within the sector, were thrown into the same basket as biotech stocks as the market seems to have associated higher growth with higher risk.
The selloff in these higher-growth stocks isn’t surprising in that valuations were fairly expensive entering the quarter. In our view, high-growth stocks have been painted with the same broad brush, irrespective of the underlying fundamentals or business-model differences.
The recent rotation out of high-growth stocks appears to have been driven by changes in investor sentiment, rather than by improving fundamentals for the average company. We don’t see reasons to believe this shift will be long lived. We like investing in the small-cap space because there are over 2,200 companies to consider as we search for companies with outstanding growth prospects. In contrast to the anemic growth provided by the broader economy, and revenue growth of just 3.7% for the average U.S. small-cap company, our companies reported average revenue growth of 17.4% and average earnings growth of 17.7% during the quarter.
High-growth companies are only a portion of the high-quality growth portfolio we believe we have assembled. As of March 31st, about 40% of the Fund was positioned in higher-growth companies. We’re attracted to these companies because they stand out so sharply in a lower-growth economy. It’s in this group that we are currently seeing the most volatility but we are also seeing some of the greatest potential for returns.
The average return for the rest of the Fund, which is made up of our more stable, consistent growers, was slightly positive for the quarter. Examples of steady compound growth companies include Copart, Inc. and O’Reilly Automotive, Inc. We have owned Copart and O’Reilly for over 16 and 18 years, respectively. Copart grew revenues 8.5% and O’Reilly grew revenues 10.5% during the quarter, and the stocks were up 7% and 8%, respectively, so there is evidence the Fund also benefited from the market’s pivot away from the highest-growth companies.
OUTLOOK
We remain steadfast in owning what we believe are the highest-quality growth businesses in the small-cap universe. In a macroeconomic environment where growth is scarce, we think the stocks of companies with outstanding growth will be disproportionately rewarded over the long term. Throughout our history, we have observed that the market occasionally goes through periods where it underestimates the ultimate earnings power of companies with high and sustainable earnings growth. Valuation resets like the one we saw during the quarter in biotechnology and technology create great opportunities for investors focused on the long term. When higher-growth companies are combined with a portfolio of our more stable growth companies, we believe the Small Cap Growth Fund can continue to offer a portfolio that has better growth and quality metrics when compared to the indices, but with similar overall valuations.
Thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH SMALL CAP GROWTH FUND (WAAEX / WIAEX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Small Cap Growth (WAAEX) — Investor | 1.51% | -11.59% | 7.03% | 6.10% | ||||||||||||||||
Small Cap Growth (WIAEX) — Institutional | 1.51% | -11.59% | 7.03% | 6.10% | ||||||||||||||||
Russell 2000® Growth Index | -0.57% | -11.84% | 7.70% | 6.00% | ||||||||||||||||
Russell 2000® Index | 2.02% | -9.76% | 7.20% | 5.26% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Growth Fund — Investor Class: 1.22% / Institutional Class — Gross: 1.09%, Net: 1.05%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
*Not | annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Ultimate Software Group, Inc. | 4.5% | |||
Knight Transportation, Inc. | 3.9% | |||
Cornerstone OnDemand, Inc. | 3.7% | |||
Spirit Airlines, Inc. | 2.5% | |||
ExamWorks Group, Inc. | 2.4% |
Company | % of Net Assets | |||
ICON plc (Ireland) | 2.3% | |||
Copart, Inc. | 2.2% | |||
Echo Global Logistics, Inc. | 2.1% | |||
Chefs’ Warehouse, Inc. (The) | 2.1% | |||
O’Reilly Automotive, Inc. | 2.0% |
** | As of March 31, 2016, there were 106 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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 / WICVX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Small Cap Value Fund is managed by a team of Wasatch portfolio managers led by Jim Larkins.
Jim Larkins Lead Portfolio Manager | OVERVIEW
Despite poor performance early in the quarter, small-cap value stocks staged a strong recovery and ultimately finished with a gain of 1.70%, as gauged by the Russell 2000 Value Index. While the broader asset class ended the quarter in positive territory, the Wasatch Small Cap Value Fund — Investor Class finished down -2.36%. This marks a reversal from 2015, during which we outpaced the benchmark |
by a wide margin, as well as a departure from the Fund’s strength relative to the Index over the past five- and 10-year periods.
We believe the Fund’s underperformance in the first quarter was largely the result of short-term factors. During the quarter, we exited or reduced weights in holdings where we saw fundamental deterioration. One of the more notable aspects of the rally that occurred from mid-February onward was significant outperformance by the types of companies we consider to be low quality. For many of these stocks, we think they simply had been oversold.
DETAILSOFTHE QUARTER
The Fund’s results relative to the Index were adversely affected by our overweight position in the health-care sector given that it was, by far, the worst-performing sector in the Index for the quarter. Our selection of health-care stocks further detracted from performance. With this said, an important element of our approach is our effort to capitalize on market inefficiencies by buying growth stocks when they fall into value territory. Such opportunities have presented themselves in the pharmaceuticals and biotechnology industries, and have resulted in our overweight positions in these groups. Marksans Pharma Ltd., a manufacturer of medications packaged in “soft gels,” saw its stock price fall sharply due to worries related to regulatory concerns in the United Kingdom as well as the acquisition of a new packaging facility in the United States. We believe these issues are transitory, but we are digging deeper — including a due-diligence visit to the new facility — to ensure that our investment thesis for Marksans remains intact. Clinical-stage pharmaceutical company Cempra, Inc. reported weaker-than-expected data on a key drug. The decline in Cempra’s stock price was amplified by the selloff in the overall sector. Believing the market overreacted to the news, we chose to maintain our position in Cempra.
The financials sector was another source of weakness for the Fund. Some banks that performed well for us last year, such as Customers Bancorp, Inc., pulled back in the first three months of 2016. After meeting with Customers’ management, we remain confident the company is on a path for growth and is likely to recognize value from a mobile banking platform it has been quietly developing for over two years. Asset-management firms Virtus Investment Partners,
Inc. and Artisan Partners Asset Management, Inc. also underperformed. We eliminated Virtus after the company lost a key portfolio manager. Together with other missteps, this led us to conclude that the turnaround we had been expecting has become less likely to materialize. We maintained the position in Artisan. We like Artisan’s platform and believe the company is poised to capitalize on growing investor interest in emerging markets. On the positive side, shares of Avenue Financial Holdings, Inc. rallied after a proposed acquisition by Pinnacle Financial Partners, Inc., another company held in the Fund.
Information technology was our top-contributing sector in the first quarter, thanks in part to the substantial contribution from Fabrinet. We believe the company is well-positioned to capitalize on the rapidly growing demand for next-generation optical network components via its “pick and shovel” business model. We see increasing upside potential for Fabrinet and added to our position. Ebix, Inc. also made a strong contribution to the Fund’s performance, as investors gained a better appreciation of the company’s ability to participate in the modernization of the insurance industry in the United Kingdom.
OUTLOOKAND POSITIONING
We believe the elevated volatility in the stock market over the past three months is a reflection of the constantly shifting outlook regarding economic growth and Federal Reserve policy. Although volatile conditions can be unnerving for investors, we view price swings as providing important longer-term opportunities. Throughout our lengthy tenure as managers of the Wasatch Small Cap Value Fund, we have sought to take advantage of market downturns by adding to positions in our favored companies. We believe we were able to do so in the quarter, when the Russell 2000 Value Index was down nearly 13% at its low. We added to our existing weighting in trucking-related stocks and initiated a new position. The U.S. government is implementing stricter limits next year for hours worked by truck drivers. It will also require trucking companies to switch from paper tracking logs to electronic logging devices to monitor compliance. The new methodology should reduce truckers’ ability to misrepresent data, a shift we expect to essentially remove capacity from the industry. We believe the new requirements, together with the continued health of the U.S. economy, will benefit larger, well-managed operators such as those in which the Fund invests.
Our willingness to buy undervalued companies on market weakness has held the Fund in good stead on a long-term basis, and we believe it will continue to do so in the months and years ahead.
Thank you for the opportunity to manage your assets.
Current | and future holdings are subject to risk. |
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WASATCH SMALL CAP VALUE FUND (WMCVX / WICVX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Small Cap Value (WMCVX) — Investor | -0.86% | -9.79% | 8.24% | 5.02% | ||||||||||||||||
Small Cap Value (WICVX) — Institutional | -0.80% | -9.69% | 8.37% | 5.08% | ||||||||||||||||
Russell 2000® Value Index | 4.63% | -7.72% | 6.67% | 4.42% | ||||||||||||||||
Russell 2000® Index | 2.02% | -9.76% | 7.20% | 5.26% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Value Fund are Investor Class: 1.21% / Institutional Class — Gross: 1.20%, Net: 1.05%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 1/31/2012 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 1/31/2012 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investments in value stocks can perform differently from the market as a whole and from other types of stocks and can continue to be undervalued by the market for long periods of time. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Fabrinet | 4.8% | |||
Ensign Group, Inc. (The) | 3.2% | |||
Spirit Airlines, Inc. | 3.2% | |||
Ebix, Inc. | 3.0% | |||
LGI Homes, Inc. | 2.8% |
Company | % of Net Assets | |||
CareTrust REIT, Inc. | 2.7% | |||
HEICO Corp., Class A | 2.6% | |||
Allegiant Travel Co. | 2.5% | |||
Customers Bancorp, Inc. | 2.3% | |||
Arbor Realty Trust, Inc. | 2.3% |
**As | of March 31, 2016, there were 62 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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, 2016 (UNAUDITED) | |
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The Wasatch Strategic Income Fund is managed by a team of Wasatch portfolio managers led by Sam Stewart.
Samuel S. Stewart, Jr. PhD, CFA Lead Portfolio Manager | QUARTERLY RESULTS
Disappointingly, the first quarter of 2016 saw the Wasatch Strategic Income Fund continue along the same rocky path it has been traveling on for the past year. The Fund ended the quarter with a gain of 0.55%, but fell short of its stock and bond benchmarks. The S&P 500 Index rose 1.35%, while the Barclays Capital U.S. Aggregate Bond Index increased 3.03%. The continuation of this sub-par performance over the past year is |
frustrating to me. It’s frustrating because I don’t have a good handle on the underlying drivers of the performance beyond the simplistic observation that the Fund has held too many weak stocks and not enough strong ones. There isn’t an obvious business reason to account for the declines in most of our weak stocks. On the other hand, many of these declining stocks are supported by yields that were high and closed the quarter even higher. This has been a theme for the past year. Many of our stocks continue to yield above 5% (including several higher than 10%), while most consumer savings alternatives provide yields close to zero. For that reason, these stocks should be in high demand from investors but, instead, they have continued to stagnate.
While the Fund’s performance did fall short of both benchmarks, in some ways the quarter was a victory as many mutual funds failed to earn a positive return for the quarter. Further, our heavy weighting in financials and the weak performance of the financials sector within the S&P 500 (-5.12%) made it feel like we were running against the wind. So, even the Fund’s small positive return felt like a minor win.
In assessing quarterly results, I like to call out stocks that have hit our performance by more than 0.50 of a percentage point. NorthStar Realty Finance Corp. was our biggest
detractor, despite announcing significant restructuring moves, a meaningful share buyback, a yield over 12% and a stock price discounted by 40% to net asset value (NAV). Go figure.
Colony Capital, Inc. was our second-worst detractor. During the quarter, the company announced an on-target quarter, a new fund, yielded almost 10% and also traded at a discount to NAV. Again, go figure.
The Fund’s top contributors included CBS Corp. and Medallion Financial Corp. Comcast Corp. was the third-best contributor. All of these companies had incrementally positive business developments. CBS had better-than-expected advertising revenues, while the sky continued to not fall on Medallion, so it continued paying its dividend, which provided an 11% yield. Comcast reported an on-target quarter.
During the quarter, we sold several companies including long-time holdings Two Harbors Investment Corp. and Evolution Petroleum Corp. The main reason for selling Two Harbors is that I have been paring back the Fund’s exposure to financials because I don’t fully understand why these
stocks have been punished so much. The company’s lines of business are not that different from the business lines of several of our other holdings so, to some extent, holding Two Harbors was duplicative. I sold Evolution as energy prices bounced because I preferred to have our energy exposure in larger and what I see as more stable companies — Suncor Energy, Inc. and Magellan Midstream Partners, L.P. We reversed course and sold Capitala Finance Corp. as its results have fallen short of our other business development company (BDC) holdings. We also exited TAL International Group, Inc. as prospects for container demand diminished as world trade continues to bump along the bottom.
Our new investments included FS Investment Corp., BlackRock Capital Investment Corp. and Hercules Capital, Inc. These holdings are BDCs that make loans to middle market companies. BDCs are attractive to us because banks have been forced to exit this market due to new, more stringent capital regulations. I also returned to CVS Health Corp., which is an old favorite consistent dividend grower.
ANNUAL RESULTS
The Fund’s annual performance was negative and fell short of its stock and bond benchmarks. Almost all of the shortfall can be chalked up to the horrendous quarter ended September 30, 2015, during which our holdings in financials took a severe beating. The combined performance during the other three quarters was much closer to the performance of our benchmarks. Considering the trailing three-year returns of the Fund and its benchmarks provides a longer-term perspective. I include these returns mostly to remind us that last year’s shortfall was a near inevitable response to the extraordinarily strong performance of the market from mid-2012 to mid-2015. For the trailing three years, the Fund returned 6.18% annually which, as is our goal, falls in the middle of our stock and bond benchmarks, although the return did fall a bit short of our high single-digit goal.
LOOKING FORWARD
While the past year proved to be a challenging time for the Fund, I remain confident that our strategy of owning companies that have the ability and willingness to pay a growing stream of dividends has the potential to be rewarding in the long run. I would also like to remind fellow shareholders that the bulk of my personal stock market holdings are invested alongside yours in the Fund. I appreciate your vote of confidence by continuing to own the Wasatch Strategic Income Fund as we navigate through these difficult times.
Current and future holdings are subject to risk. |
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WASATCH STRATEGIC INCOME FUND (WASIX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Strategic Income | 2.05% | -11.98% | 8.28% | 6.07% | ||||||||||||
S&P 500® Index | 8.49% | 1.78% | 11.58% | 7.01% | ||||||||||||
Barclays Capital U.S. Aggregate Bond Index | 2.44% | 1.96% | 3.78% | 4.90% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Strategic Income Fund are 1.51%. 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. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
The Fund has a concentration in the financials sector. Investing in concentrated funds can be more volatile and loss of principal could be greater than investing in more diversified funds. The financials sector can be significantly affected by various market factors, which are described in more detail in the prospectus.
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. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Comcast Corp., Class A | 6.2% | |||
CBS Corp., Class B | 5.0% | |||
Magellan Midstream Partners L.P. | 3.9% | |||
MasterCard, Inc., Class A | 3.8% | |||
Visa, Inc., Class A | 3.8% |
Company | % of Net Assets | |||
Suncor Energy, Inc. (Canada) | 3.5% | |||
Great Ajax Corp. | 3.2% | |||
Canadian National Railway Co. (Canada) | 3.1% | |||
KKR & Co. L.P. | 3.0% | |||
Blackstone Group L.P. | 2.9% |
**As | of March 31, 2016, there were 46 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. The S&P 500 Index represents 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged and is a commonly used 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. You cannot invest directly in these or any indices.
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WASATCH ULTRA GROWTH FUND (WAMCX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch Ultra Growth Fund is managed by a team of Wasatch portfolio managers led by John Malooly.
John Malooly, CFA Lead Portfolio Manager | OVERVIEW
In a weak first quarter for small-capitalization U.S. growth stocks, the Wasatch Ultra Growth Fund lost -7.68%, underperforming its benchmark, the Russell 2000 Growth Index, which fell -4.68%. Equity prices retreated during the beginning of the quarter on concerns about global economic growth and potentially higher U.S. interest rates. Growth stocks fell more than value |
stocks, and stocks of small companies fared worse than those of larger companies as investors became more averse to risk. Caution persisted even as stocks rebounded during the latter part of the quarter, with small-company growth stocks continuing to underperform. The end result was that the Fund and its benchmark finished well behind the large-cap averages.
Investors’ waning appetite for risk during the quarter had an outsized effect on health-care and information-technology stocks. Both sectors have enjoyed outsized returns since the end of the Global Financial Crisis and entered the quarter at historically high valuations. Biotechnology stocks, an industry within the health-care sector, represented the extreme valuation example having outperformed the broader Index in 16 of the past 17 quarters. As risk aversion increased, health-care and technology stocks lost 18% and 4%, respectively. Biotech stocks fell even further, losing 32% for the quarter.
Against that backdrop, our above-benchmark weighting in technology — particularly in software companies — was a headwind for the Fund. Our health-care weighting was in line with the Index but our companies underperformed. As a result, the Fund underperformed its benchmark during the quarter.
Our substantial investments in health care and technology are the natural result of our focus on growth. Outside those sectors, the sluggish U.S. economy has produced fewer companies that meet our investment criteria. Our decision to own health-care and technology companies is based on what we believe to be a solid understanding of fundamentals, together with a long-term approach and a realistic assessment of the risks and potential rewards.
DETAILSOFTHE QUARTER
Despite overall weakness in health care and technology, our holdings in those sectors reflected their upside potential as well. Our two strongest contributors to performance for the quarter were Argos Therapeutics, Inc., a health-care company, and PDF Solutions, Inc., a technology company.
Argos develops personalized immunotherapies based on its proprietary platform. The company’s lead product is currently in Phase-3 clinical trials for the treatment of a common form of kidney cancer. Argos also has a product in Phase-2 trials for the treatment of HIV. The company’s shares soared on optimism about its technology and its potential to treat a variety of other diseases.
PDF Solutions provides technologies to optimize the design and manufacture of integrated-circuit chips. After underperforming last year, PDF’s stock rebounded on firmer fundamentals and a more-attractive valuation from what we considered its depressed levels of 2015.
Health-care and technology stocks accounted for all of our biggest detractors from performance. The majority declined on little or no significant news while underlying fundamentals continued to improve.
SPS Commerce, Inc. provides cloud-based software for supply-chain management. The company’s shares tumbled in February after management reported disappointing earnings. SPS also reduced guidance for 2016 citing turnover in its sales force.
FleetMatics Group plc offers solutions to help service and distribution companies operate fleets of commercial vehicles and improve the productivity of their mobile workforces. In what we view as a temporary setback, the company reported that flagging demand from energy-related industries hurt its revenue growth.
OUTLOOK
During periods of market turbulence, we want to maintain our discipline and use gyrations in equity prices to the Fund’s advantage. With much of the recent volatility driven by sentiment and global uncertainty, we believe opportunities for company-focused stock-picking are likely to continue.
Biotech stocks, for example, present more than their fair share of opportunity and uncertainty for investors. At more than 9% of the Index, biotechnology is an important area for small-cap growth investors. Against a backdrop where the vast majority of biotechs lose money and the science is often complex and nuanced, sentiment and misinformation can drive short-term stock performance making biotech a challenging area in which to invest.
Our approach to biotech investing is the same process we use across the firm. We focus on deep due diligence — led by a doctorate-level analyst with clinical-research experience — in order to find those companies that we believe have the best science and a strong management team capable of delivering outsized growth. We maintain close contact with those management teams to ensure we know the primary endpoints of clinical trials, and more importantly to understand why these endpoints were selected. We then come to our own conclusions as to whether the available clinical evidence supports or creates doubt on the scientific thesis. We ignore the noise from Wall Street that can move stock prices for little or no reason in the short term. While not all biotechs will enjoy long-term success, we believe our process will help us identify enough of the successful ones to make our efforts worthwhile for the Fund.
This bottom-up, long-term approach has been in practice at Wasatch for over 40 years. We believe it will serve our investors well as we work to find what we consider to be the best growth companies in an uncertain world.
Thank you for the opportunity to manage your assets.
Current and future holdings are subject to risk. |
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WASATCH ULTRA GROWTH FUND (WAMCX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
Ultra Growth | 0.22% | -11.41% | 5.90% | 4.03% | ||||||||||||||||
Russell 2000® Growth Index | -0.57% | -11.84% | 7.70% | 6.00% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Ultra Growth Fund are 1.38%. 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. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Proto Labs, Inc. | 3.1% | |||
Greenspring Global Partners II-B, L.P. | 2.9% | |||
PDF Solutions, Inc. | 2.6% | |||
Ultimate Software Group, Inc. | 2.6% | |||
FleetMatics Group plc | 2.4% |
Company | % of Net Assets | |||
Cornerstone OnDemand, Inc. | 2.1% | |||
Paylocity Holding Corp. | 2.0% | |||
Seattle Genetics, Inc. | 1.9% | |||
AtriCure, Inc. | 1.9% | |||
Sangamo BioSciences, Inc. | 1.8% |
** | As of March 31, 2016, there were 98 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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 WORLD INNOVATORS FUND (WAGTX / WIGTX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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The Wasatch World Innovators Fund is managed by a team of Wasatch portfolio managers led by Josh Stewart and Sam Stewart.
Josh Stewart Lead Portfolio Manager |
Samuel S. Stewart, Jr. PhD, CFA Portfolio Manager | OVERVIEW
The “new normal” for global economies and equities is a quixotic mix of slower economic growth and higher stock prices. Perhaps not surprisingly, the new normal has resulted in greater anxiety and vola- |
tility in equity markets. Despite finishing 0.30% higher at quarter-end, it was anything but smooth flying for our benchmark, the MSCI All Country World Investable Market Index.
Breaking our outperformance streak of four consecutive quarters, the Wasatch World Innovators Fund — Investor Class declined -3.03% and lagged the benchmark during the quarter ended March 31, 2016. The Fund did continue to maintain its spread of outperformance on an annual basis, however, returning 0.06% over the 12 months ended March 31st compared to a -4.36% decline for the benchmark.
We had become accustomed to the Fund outperforming in volatile markets over the previous 18 months. Indeed, the largest relative gain we made versus the benchmark in that period was during the air-pocket drop in the quarter ended September 30, 2015. For that reason, we were initially surprised to fall short of the benchmark in the choppy market during the quarter ended March 31, 2016.
Investigating beyond the headlines, we found that some secular trends — ones that had been consistently driving the markets over the past few years — reversed, at least temporarily. In the most recent quarter, stocks of companies with more debt tended to do better than those with less debt. Emerging-market assets and currencies outperformed those of developed countries. For example, Brazil — deep in recession and on the verge of impeaching its president — was home to the second-best-performing stock market in the Index.
DETAILSOFTHE QUARTER
When vetting candidates for the Fund, we consider abstract characteristics such as interactions with management, the company’s stated strategy, and the “vibe” we get from visiting a store or factory. However, we believe we learn the true nature of a quality company from the story told by the numbers. We insist that our companies demonstrably take market share from competitors. We expect the management teams of our companies to invest in their products, services, brands and infrastructure in order to ensure and accelerate future market-share gains. Just as important, we refuse to overpay for growth.
To ensure we’re delivering on our mission, we look at some simple metrics each quarter to see how our companies compare to benchmark alternatives. These metrics include both the P/E (price-to-earnings) ratio and the EV (enterprise value)-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio for the Fund and the benchmark. The Fund ended the quarter with a P/E ratio of 26 versus the benchmark’s ratio of 29. At the end of December, the ratios were 24 and 29, respectively. On an EV-to-EBITDA basis, the Fund’s valuation is more attractive at a ratio of 11 versus 14 for the benchmark. Both of these figures are virtually the same as the previous quarter, with our advantage mostly a reflection of the outstanding balance sheets of our portfolio companies.
During the quarter ended March 31st, we had one significant contributor and one large detractor. On the positive side of the ledger was Majestic Wine plc, a United Kingdom-based wine merchant that has reinforced its efforts to sell online and via business-to-business channels. The stock gained about 38% after the company reported holiday same-stores sales well above market expectations.
On the negative side of the ledger was video-game developer Activision Blizzard, Inc., which detracted from the Fund’s return due to poor timing on our part. Because we sold our entire position the day after the Index dropped to its low point in early February, we were unable to participate when the stock subsequently bounced back. We decided to sell our position in the stock following Activision’s large King Digital acquisition, which increases debt and is likely to disrupt day-to-day operations as Activision focuses on integration issues.
OUTLOOK
Global equities rallied back during the latter part of the quarter, which helped keep valuations above average. Meanwhile, statistical measures indicate that the economy remains stuck at low “new normal” levels. We think these are the reasons markets have been volatile and unable to break out of a range over the past 18 months.
When stock prices are high, investors tend to magnify the importance of each piece of political and economic news that hits the wires, producing zig-zagging charts. In 2015, we invested cautiously — valuing balance-sheet strength, stable cash flows and self-funded businesses over fast sales growth. That served us well.
Despite underperforming in the quarter ended March 31, 2016, we don’t think markets have changed all that much if we take a longer view — and the issue of pricey equities is certainly not resolved. Therefore, we’ll stick with the same cautious playbook, relying on our flexibility to go anywhere in the world in an effort to find reasonably priced stocks of long-term-focused innovators taking market share.
Thank you for the opportunity to manage your assets.
Current and future holdings are subject to risk. |
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WASATCH WORLD INNOVATORS FUND (WAGTX / WIGTX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
World Innovators (WAGTX) — Investor | 2.99% | 0.06% | 8.95% | 6.45% | ||||||||||||||||
World Innovators (WIGTX) — Institutional | 3.05% | 0.12% | 8.96% | 6.46% | ||||||||||||||||
MSCI AC World IMI | 5.22% | -4.36% | 5.24% | 4.26% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch World Innovators Fund are Investor Class: 1.76% / Institutional Class — Gross: 1.65%, Net: 1.55%. The expense ratio shown elsewhere in this report may be different. Net expenses are based on Fund expenses, net of waivers and reimbursements. See the prospectus for additional information regarding Fund expenses.
Wasatch 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund’s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund’s Investor Class without any adjustments. For any such period of time, the performance of the Fund’s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund’s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.
* | Not annualized. |
TOP 10 EQUITY HOLDINGS**
Company | % of Net Assets | |||
Photo-Me International plc (United Kingdom) | 4.0% | |||
Majestic Wine plc (United Kingdom) | 3.9% | |||
DiaSorin S.p.A. (Italy) | 3.3% | |||
Take-Two Interactive Software, Inc. | 3.3% | |||
Mekonomen AB (Sweden) | 3.2% | |||
Gamma Communications plc (United Kingdom) | 2.8% |
Company | % of Net Assets | |||
Avon Rubber plc (United Kingdom) | 2.8% | |||
Advanced Medical Solutions Group plc (United Kingdom) | 2.8% | |||
Fenix Outdoor International AG (Sweden) | 2.4% | |||
Abcam plc (United Kingdom) | 2.2% |
** | As of March 31, 2016, there were 88 holdings in the Fund. Foreign currency contracts, written options and repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
SECTOR BREAKDOWN†
† | 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. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. The MSCI AC World IMI (All Country World Investable Market Index) is designed to measure the equity market performance of large, mid, and small cap securities across developed and emerging markets throughout the world. You cannot invest directly in this or any index.
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WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Management Discussion | MARCH 31, 2016 (UNAUDITED) | |
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Paul Gifford, CFA Lead Portfolio Manager |
Erik Clapsaddle, CFA Associate Portfolio Manager | OVERVIEW
The Wasatch-1st Source Income Fund returned 1.77% in the first quarter of 2016. The Barclays Capital U.S. Intermediate Government/Credit Bond Index, the Fund’s benchmark, gained 2.45%. The Federal |
Reserve (Fed) made no changes to its federal-funds target rate (target rate) during the quarter, as it maintained a target rate of between 0.25% and 0.50%. As the Fed became more concerned with global risks, Fed Chair Janet Yellen indicated that the pace of rate increases would be somewhat slower than expected.
ECONOMIC ACTIVITY
Even though inflation has recently moved upward, the Fed has not been persuaded to move more rapidly in raising its target rate. In March, the personal consumption expenditures (PCE) core inflation rate for goods (excluding food and energy) increased 1.7% over the past year. Janet Yellen stated that the Fed feels comfortable with an inflation rate of plus or minus 1% from the 2% target inflation rate. Central banks around the world continue to do almost anything under the sun — in terms of quantitative easing and low-to-negative interest rates — to create inflation.
The most-recent unemployment rate came in at 4.9% (February 2016), which is close to what the Fed considers to be the current rate of full employment. The underemployment rate stands at 9.7%, which includes individuals who are employed part-time for economic reasons and those who have looked for work sometime in the past 12 months. The largest industries driving the multi-year decline in unemployment have been education and health, leisure and hospitality, and retail sales.
Despite an 11.5% year-over-year decline in corporate profits, the most-recent quarterly increase of 1.4% in gross domestic product (GDP) was greater than forecast, and was driven by personal consumption in health care and recreation. Consumer spending remains tepid, as the U.S. consumer has been saving more. The personal-saving rate in the U.S. reached a multi-year high of 5.4% in February.
INTEREST RATES
In the first quarter, the yield on the 10-year U.S. Treasury note declined from 2.27% to 1.77%, and the yield on the two-year U.S. Treasury note declined to 0.72%. We believe very low to negative interest rates in developed countries will continue to put a ceiling over U.S. Treasury yields. On March 31st, more than 10 nations had negative yields on their five-year sovereign debt.
Corporate bonds, whether investment grade or high yield (non-investment grade), performed exceptionally well in the first quarter. Corporate-bond spreads, the difference between
the yield on the corporate bond and the Treasury security with a comparable maturity, widened in late 2015 and into early 2016. In the latter half of the quarter, we saw assets flow into corporate bonds as they experienced strong performance relative to other fixed-income segments.
STRATEGY
As an aggregate bond portfolio with a cautious approach, the Fund maintains a duration that is significantly shorter than its benchmark, which leaves it less exposed to rising interest rates. At the end of the first quarter, the Fund’s effective duration was 2.92 years compared to the benchmark’s duration of 4.02 years — an 8% decrease in the Fund’s duration relative to the fourth quarter. Duration was driven lower by agency mortgage-backed securities as prepayment speeds increased. While we added duration in the Fund’s other fixed-income asset classes, duration in its agency-mortgage segment declined by approximately 15%. The Fund’s corporate-credit exposure declined slightly in the first quarter. We began adding corporates in early March as fixed-income spreads became undeniably attractive to us.
Though the Fund held 17.5% of its assets in bonds with a duration of five years or more at the start of the quarter, that percentage had fallen to 14.7% by quarter’s end. The core of the Fund is currently focused in durations of less than five years, with 98% of its positions having effective durations of less than seven years. As mortgage-prepayment speeds moderate, we expect the core of the Fund to be invested in fixed-income securities with durations of between two and four years.
To offset the interest-rate risk of bonds with longer maturities, we have overweighted the Fund in bonds with durations of less than three years. Shorter-duration bonds make up 55.2% of the portfolio — a three-percentage point increase from the previous quarter.
As of March 31, 2016, the Fund held 13.5% of its assets in credits rated BBB — down from 15.5% on December 31, 2015. Although the Fund’s credit-rating allocation was negatively affected by the decision of Standard & Poor’s on December 2, 2015 to lower the ratings of major banks by one notch, we still believe the largest domestic banks have created fortress balance sheets and are prepared for future capital requirements. We anticipate that we will continue to overweight credit in the Fund and buy where we believe there is opportunity for credit spreads to tighten — or where holding unsystematic credit risk has the potential to provide a sizable pickup in yield.
Thank you for the opportunity to manage your assets.
A credit rating is an assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities. Ratings are issued by S&P or Moody’s and typically range from AAA (highest) to D (lowest). The credit quality of the investments in the Fund’s portfolio does not apply to the safety or stability of the Fund. Ratings and portfolio credit quality may change over time. Unrated securities do not necessarily indicate low quality. The Fund itself has not been rated by an independent rating agency. For information on the rating agency’s methodology visit: http://www.standardandpoors.com/home/en/us and http://www.moodys.com.
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WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||
Income | 1.27% | 1.48% | 2.03% | 3.35% | ||||||||||||
Barclays Capital U.S. Intermediate Government/Credit Bond Index | 1.74% | 2.06% | 3.01% | 4.34% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Income Fund are 0.73%. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Investments in fixed income funds are subject to the same interest rate, inflation, credit and other risks associated with the underlying bonds. Return of principal is not guaranteed.
* | Not annualized. |
TOP 10 FIXED INCOME HOLDINGS**
Holding | Maturity Date | % of Net Assets | ||||||
U.S. Treasury Note, 3.625% | 8/15/19 | 4.2% | ||||||
U.S. Treasury Note, 3.250% | 12/31/16 | 3.0% | ||||||
Federal Farm Credit Banks, 2.290% | 4/14/22 | 1.9% | ||||||
Morgan Stanley, MTN, 5.500% | 7/24/20 | 1.8% | ||||||
U.S. Treasury Note, 3.125% | 5/15/21 | 1.8% | ||||||
U.S. Treasury Note, 3.625% | 2/15/20 | 1.5% |
Holding | Maturity Date | % of Net Assets | ||||||
Citibank Credit Card Issuance Trust, Series 2007-A8, Class A8, 5.650% | 9/20/19 | 1.5% | ||||||
BB&T Corp., MTN, 2.150% | 3/22/17 | 1.4% | ||||||
Federal Home Loan Mortgage Corp., 2.500% | 5/27/16 | 1.4% | ||||||
Federal Farm Credit Banks, 1.970% | 4/21/21 | 1.4% |
** | As of March 31, 2016, there were 148 holdings in the Fund. Repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
INVESTMENTS & CASH†
† | Excludes options written, if any. |
†† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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, 2016 (UNAUDITED) | |
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The Wasatch-Hoisington U.S. Treasury Fund is sub-advised by Hoisington Investment Management Company. Van Hoisington is the lead portfolio manager. Van R. Hoisington, Jr. and David Hoisington are portfolio managers.
Van Hoisington Lead Portfolio Manager | OVERVIEW
A second consecutive quarter of tepid economic activity and minimal inflation led to a strong rally in the long end of the U.S. Treasury bond market (bonds with maturities longer than 20 years) in the first calendar quarter of 2016. This more than offset weak performance in long Treasury bonds in the final calendar quarter of 2015, resulting in an excellent return for the Wasatch-Hoisington U.S. Treasury Fund in the |
six months ended March 31, 2016. In the first quarter of 2016, retail spending was subdued and capital spending contracted. The trade deficit widened and inventory investment was reduced. Average employment gains in the first quarter were considerably lower than in 2015 and 2014. In its March 2016 meeting, the Federal Open Market Committee lowered nominal and inflation projections for 2016 and 2017, confirming that thus far in 2016 the economy has been much weaker than expected.
DETAILSOFTHE PERIOD
The 30-year Treasury bond yield closed the six-month period at 2.61%, down from 3.02% on December 31, 2015 and 2.85% on September 30, 2015. For the last three months, the Fund advanced 9.18%, versus a 3.03% increase for its benchmark, the Barclays Capital U.S. Aggregate Bond Index. For the past six months, the Fund returned 7.16% while the Index returned 2.44%. In addition, the Fund maintained its substantial outperformance over the Index for the five- and 10-year periods ended March 31, 2016.
OUTLOOKFORTHE YEAR
The striking aspect of the U.S. economy’s 2015 performance was weaker economic growth coinciding with a massive advance in nonfinancial debt. Nominal gross domestic product (GDP), the broadest and most reliable indicator of economic performance, rose $549 billion in 2015 while U.S. nonfinancial debt surged $1.912 trillion. Accordingly, nonfinancial debt rose 3.5 times faster than GDP last year. This means that we can expect continued subpar growth for the U.S. economy.
The ratio of nonfinancial debt to GDP rose to a record year-end level of 248.6%, up from the previous record set in 2009 of 245.5%, and well above the average of 167.5% since the series originated in 1952. During the four and a half decades prior to 2000, it took about $1.70 of debt to generate $1.00 of GDP. Since 2000, however, when the nonfinancial debt-to-GDP ratio reached deleterious levels, it has taken on average $3.30 of debt to generate $1.00 of GDP. This suggests that the type and efficiency of the new debt is increasingly nonproductive.
Most significant for future economic growth, however, is that the additional layer of debt in 2015 is a liability going forward since debt is always a shift from future spending to the present. The negative impact, historically, has occurred more swiftly and more seriously when economies were extremely overindebted. Thus, while the debt helped to prop up economic growth in 2015, this small plus will be turned into a longer-lasting negative that will diminish any benefit from last year’s debt bulge.
Our economic view for 2016 remains unchanged. The composition of last year’s debt gain indicates that velocity, the rate at which money circulates through an economy, will decline more sharply in 2016 than 2015. The modest interest-rate increase by the U.S. Federal Reserve in December is a slight negative for both M2 money supply growth and velocity. Additionally, velocity appears to have dropped even faster in the first quarter of 2016 than in the fourth quarter of 2015. Thus, nominal GDP growth should slow to a range of 2.3% to 2.8% for the year. The slower pace in nominal GDP growth would continue the 2014-15 pattern, when the rate of rise in nominal GDP decelerated from 3.9% to 3.1%. Such slow top-line growth suggests that spurts in inflation will simply reduce real GDP growth and will thus be transitory in nature.
Accordingly, we believe the prospects for long-term Treasury bonds remain bright for patient investors operating with a multi-year investment horizon. Numerous factors can cause intermittent increases in yields. But in our view, the domestic and global economic environments are too weak for yields to remain elevated. We believe conditions continue to be favorable for the Wasatch-Hoisington U.S. Treasury Fund.
Thank you for the opportunity to manage your assets.
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WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Portfolio Summary | MARCH 31, 2016 (UNAUDITED) | |
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AVERAGE ANNUAL TOTAL RETURNS
SIX MONTHS* | 1 YEAR | 5 YEARS | 10 YEARS | |||||||||||||||||
U.S. Treasury | 7.16% | 0.87% | 11.69% | 8.83% | ||||||||||||||||
Barclays Capital U.S. Aggregate Bond Index | 2.44% | 1.96% | 3.78% | 4.90% |
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, 2016 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-Hoisington U.S. Treasury Fund are 0.67%. The expense ratio shown elsewhere in this report may be different. 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, including sales charges, or the taxes you would pay on fund distributions or the redemption of fund shares. Fees and taxes, if reflected, would reduce the performance quoted. Wasatch does not charge any sales fees. For more complete information, including charges, risks and expenses, read the prospectus carefully.
Investments in fixed income funds are subject to the same interest rate, inflation, credit and other risks associated with the underlying bonds. Return of principal is not guaranteed.
* | Not annualized. |
TOP U.S. TREASURY HOLDINGS**
Holding | Maturity Date | % of Net Assets | ||||||
U.S. Treasury Bond, 2.500% | 2/15/45 | 39.1% | ||||||
U.S. Treasury Bond, 2.875% | 8/15/45 | 19.7% | ||||||
U.S. Treasury Strip, principal only | 5/15/44 | 10.4% | ||||||
U.S. Treasury Bond, 2.875% | 5/15/43 | 10.2% |
Holding | Maturity Date | % of Net Assets | ||||||
U.S. Treasury Bond, 3.125% | 8/15/44 | 8.1% | ||||||
U.S. Treasury Bond, 3.750% | 11/15/43 | 5.9% | ||||||
U.S. Treasury Bond, 3.125% | 2/15/42 | 2.3% | ||||||
U.S. Treasury Bond, 3.000% | 5/15/45 | 2.0% |
**As | of March 31, 2016, there were 8 holdings in the Fund. Repurchase agreements, if any, are not included in the number of holdings. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk. |
INVESTMENTS & CASH
† | Also includes Other Assets & Liabilities. |
GROWTHOFA HYPOTHETICAL $10,000 INVESTMENT
Past performance does not predict future performance. The graph above does not reflect the deduction of fees, sales charges, or taxes that you would pay on fund distributions or the redemption of fund shares. Wasatch does not charge any sales fees. 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. You cannot invest directly in this or any index.
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WASATCH FUNDS MANAGEMENT DISCUSSIONS — Definitions of Financial Terms | ||
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The “cloud” is the Internet. Cloud-computing is a model for delivering information technology services in which resources are retrieved from the Internet through web-based tools and applications, rather than from a direct connection to a server.
A corporate bond is a debt security issued by a corporation for the purpose of raising money to expand its business.
A credit rating is an assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities. Ratings are issued by S&P or Moody’s and typically range from AAA (highest) to D (lowest). Ratings and portfolio credit quality may change over time. Unrated securities do not necessarily indicate low quality. For information on the rating agency’s methodology visit: http://www.standardandpoors.com/home/en/us and http://www.moodys.com.
The debt-to-GDP ratio is a measure of a country’s federal debt in relation to its gross domestic product (GDP). The higher the debt-to-GDP ratio, the less likely the country will be to pay back its debt, and the higher its risk of default.
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. For example, a company whose stock sells for $30 per share that pays an annual dividend of $3 per share has a dividend yield of 10%.
Earnings growth is a measure of growth in a company’s net income over a specific period, often one year.
Earnings-per-share or EPS is the portion of a company’s profit allocated to each outstanding share of common stock. EPS growth rates help investors identify companies that are increasing or decreasing in profitability.
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%.
Enterprise value (EV) is a measure of a company’s value calculated as market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents.
The EV (enterprise value)-to-EBITDA (earnings before interest, taxes, depreciation and amortization) Ratio is enterprise value, as defined above, divided by annual EBITDA. The ratio is a measure of a company’s expensiveness.
An Exchange-Traded Fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on a securities exchange. ETFs experience price changes throughout the day as they are bought and sold.
The Federal Funds Target Rate (also known as The Fed Funds Target Rate) is set by a committee within the Federal Reserve system called The Federal Open Market Committee (FOMC). The FOMC usually meets every six weeks, and it is at these meetings that the FOMC votes on whether or not to make changes to the Federal Funds Target Rate.
The Federal Open Market Committee (FOMC), a component of the Federal Reserve System, is charged under United States law with overseeing the nation’s open market operations. Open market operations are the means of implementing monetary policy by which a central bank controls the short term interest rate and the supply of base money in an economy, and thus indirectly the total money supply.
The financial crisis of 2007-09, also known as the Global Financial Crisis and 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.
Gross domestic product (GDP) is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a country in a year.
The January Effect is a general increase in stock prices during the month of January. This rally is generally attributed to an increase in buying, which follows the drop in price that typically happens in December when investors, seeking to create tax losses to offset capital gains, prompt a sell-off. The January Effect is said to affect small caps more than mid or large caps. This historical trend, however, has been less pronounced in recent years because the markets have adjusted for it. Another reason the January Effect is now considered less important is that more people are using tax-sheltered retirement plans and therefore have no reason to sell at the end of the year for a tax loss. Source: Investopedia.
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.
Mortgage-backed securities are debt issues backed by a pool of mortgages. Investors receive payments from the interest and principal payments made on the underlying mortgages. Agency mortgage-backed securities are issued by government-sponsored enterprises such as Ginnie Mae, Fannie Mae or Freddie Mac.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index designed to measure the equity market performance of emerging markets. You cannot invest in this or any index.
Nonfinancial debt refers to the aggregate debt owed by households, government agencies, nonprofit organizations, or any corporation not in the financials sector. This can include loans made to households in the form of mortgages, or amounts owed on credit cards.
The Personal Consumption Expenditures (PCE) deflator is part of the National Income and Products Accounts developed by the Bureau of Economic Analysis of the U.S. Commerce Department. The PCE deflator is a variable weighted index and is widely considered to be the most reliable of all the price indices.
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MARCH 31, 2016 (UNAUDITED) | ||
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The price-to-earnings (P/E) multiple, also known as the P/E ratio, 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.
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 Trans-Pacific Partnership agreement is a free trade agreement currently being negotiated by nine countries: The United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.
Valuation is the process of determining the current worth of an asset or company.
Pertaining to the use of MSCI information. Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be
relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties or originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com)
Pertaining to the use of Russell information. Frank Russell Company is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. This is a presentation of Wasatch Advisors, Inc. The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. Frank Russell Company is not responsible for the formatting or configuration of this material or for any inaccuracy in Wasatch Advisors, Inc.’s presentation thereof.
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WASATCH FUNDS — OPERATING EXPENSES (UNAUDITED) | ||
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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, 2016.
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, 2016. You may use the information in this line, together with the amount you invested, to estimate the expenses you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
In addition, the Funds charge a $12.50 IRA annual maintenance fee and a $15.00 fee for redemptions paid by wire. To the extent these fees apply to your account, your expenses paid during the period would be higher and your ending account value would be lower than the amounts shown in the table below.
HYPOTHETICAL EXAMPLEFOR COMPARISON PURPOSES
The second line of the table on the next page provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and
an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Wasatch Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
In addition, the Funds charge a $12.50 IRA annual maintenance fee and a $15.00 fee for redemptions paid by wire. To the extent these fees apply to your account, your expe-nses paid during the period would be higher and your ending account value would be lower than the amounts shown in the table on the next page. If another fund’s fees differ from those listed above, your expenses paid and your ending account value could be higher or lower than those of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
A Fund’s annualized expense ratio may vary as a result of various factors including expenses that are not reimbursable under the contractual agreement between the Fund and the Advisor such as interest, taxes, brokerage commissions, other investment related costs, dividend expense on short sales, and extraordinary expenses. The Long/Short Fund — Investor Class and the Income Fund have no contractual limitation on expenses.
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MARCH 31, 2016 (UNAUDITED) | ||
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Account Value | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||||||
Fund/Class and Return | Beginning of Period October 1, 2015* | End of Period March 31, 2016 | ||||||||||||||
Core Growth Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $996.60 | $5.99 | 1.20% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,019.00 | $6.06 | 1.20% | ||||||||||||
Core Growth Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $997.20 | $5.49 | 1.10% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,019.50 | $5.55 | 1.10% | ||||||||||||
Emerging India Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $941.40 | $9.17 | 1.89% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.55 | $9.52 | 1.89% | ||||||||||||
Emerging India Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,010.60 | $2.45 | 1.51% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,005.63 | $2.44 | 1.51% | ||||||||||||
Emerging Markets Select Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,033.50 | $8.29 | 1.63% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,016.85 | $8.22 | 1.63% | ||||||||||||
Emerging Markets Select Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,035.70 | $7.12 | 1.40% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,018.00 | $7.06 | 1.40% | ||||||||||||
Emerging Markets Small Cap Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,012.70 | $9.86 | 1.96% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.20 | $9.87 | 1.96% | ||||||||||||
Emerging Markets Small Cap Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,047.60 | $2.99 | 1.81% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,005.14 | $2.93 | 1.81% | ||||||||||||
Frontier Emerging Small Countries Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $958.30 | $11.02 | 2.25% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,013.75 | $11.33 | 2.25% | ||||||||||||
Frontier Emerging Small Countries Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,031.00 | $3.36 | 2.05% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,004.76 | $3.31 | 2.05% | ||||||||||||
Global Opportunities Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,033.90 | $8.90 | 1.75% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,016.25 | $8.82 | 1.75% | ||||||||||||
Global Opportunities Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,035.60 | $2.21 | 1.35% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,005.88 | $2.18 | 1.35% | ||||||||||||
International Growth Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,053.80 | $7.80 | 1.52% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,017.40 | $7.67 | 1.52% | ||||||||||||
International Growth Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,032.70 | $2.21 | 1.35% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,005.88 | $2.18 | 1.35% | ||||||||||||
International Opportunities Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,093.40 | $11.78 | 2.25% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,013.75 | $11.33 | 2.25% | ||||||||||||
International Opportunities Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,059.00 | $3.17 | 1.91% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,004.98 | $3.09 | 1.91% | ||||||||||||
Large Cap Value Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,071.50 | $5.70 | 1.10% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,019.50 | $5.55 | 1.10% | ||||||||||||
Large Cap Value Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,071.10 | $5.02 | 0.97% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,020.15 | $4.90 | 0.97% |
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WASATCH FUNDS — OPERATING EXPENSES (continued) | MARCH 31, 2016 (UNAUDITED) | |
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Account Value | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||||||
Fund/Class and Return | Beginning of Period October 1, 2015* | End of Period March 31, 2016 | ||||||||||||||
Long/Short Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,076.40 | $9.29 | 1.79% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,016.05 | $9.02 | 1.79% | ||||||||||||
Long/Short Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,078.70 | $7.64 | 1.47% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,017.65 | $7.41 | 1.47% | ||||||||||||
Micro Cap Fund |
| |||||||||||||||
Actual | $1,000.00 | $1,005.40 | $9.63 | 1.92% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.40 | $9.67 | 1.92% | ||||||||||||
Micro Cap Value Fund |
| |||||||||||||||
Actual | $1,000.00 | $1,011.10 | $9.80 | 1.95% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,015.25 | $9.82 | 1.95% | ||||||||||||
Small Cap Growth Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,015.10 | $6.50 | 1.29% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,018.55 | $6.51 | 1.29% | ||||||||||||
Small Cap Growth Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,051.10 | $1.74 | 1.05% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,006.37 | $1.70 | 1.05% | ||||||||||||
Small Cap Value Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $991.40 | $6.12 | 1.23% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,018.85 | $6.21 | 1.23% | ||||||||||||
Small Cap Value Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $992.00 | $5.58 | 1.12% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,019.40 | $5.65 | 1.12% | ||||||||||||
Strategic Income Fund |
| |||||||||||||||
Actual | $1,000.00 | $1,020.50 | $4.80 | 0.95% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,020.25 | $4.80 | 0.95% | ||||||||||||
Ultra Growth Fund |
| |||||||||||||||
Actual | $1,000.00 | $1,002.20 | $6.71 | 1.34% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,018.30 | $6.76 | 1.34% | ||||||||||||
World Innovators Fund — Investor Class |
| |||||||||||||||
Actual | $1,000.00 | $1,029.90 | $9.08 | 1.79% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,016.05 | $9.02 | 1.79% | ||||||||||||
World Innovators Fund — Institutional Class |
| |||||||||||||||
Actual | $1,000.00 | $1,041.60 | $2.55 | 1.55% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,005.56 | $2.51 | 1.55% | ||||||||||||
Income Fund |
| |||||||||||||||
Actual | $1,000.00 | $1,012.70 | $3.67 | 0.73% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,021.35 | $3.69 | 0.73% | ||||||||||||
U.S. Treasury Fund |
| |||||||||||||||
Actual | $1,000.00 | $1,071.60 | $3.57 | 0.69% | ||||||||||||
Hypothetical (5% before expenses) | $1,000.00 | $1,021.55 | $3.49 | 0.69% |
*Expenses are equal to a fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the full fiscal year (183/366), except for the Institutional Class of Emerging India Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, International Growth Fund, International Opportunities Fund, Small Cap Growth Fund, and World Innovators Fund, which have 59 days in the most recent fiscal period due to their inception date of February 1, 2016.
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WASATCH CORE GROWTH FUND (WGROX / WIGRX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
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Shares | Value | |||||||
COMMON STOCKS 93.6% | ||||||||
Airlines 5.9% | ||||||||
192,940 | Allegiant Travel Co. | $ | 34,354,896 | |||||
746,372 | Spirit Airlines, Inc.* | 35,810,929 | ||||||
|
| |||||||
70,165,825 | ||||||||
|
| |||||||
Apparel Retail 0.8% | ||||||||
485,770 | Zumiez, Inc.* | 9,676,538 | ||||||
|
| |||||||
Application Software 6.9% | ||||||||
126,956 | ANSYS, Inc.* | 11,357,484 | ||||||
287,457 | Globant S.A.* (Argentina) | 8,870,923 | ||||||
207,328 | Tyler Technologies, Inc.* | 26,664,454 | ||||||
126,501 | Ultimate Software Group, Inc.* | 24,477,943 | ||||||
525,719 | Zendesk, Inc.* | 11,003,299 | ||||||
|
| |||||||
82,374,103 | ||||||||
|
| |||||||
Asset Management & Custody Banks 2.3% | ||||||||
368,969 | SEI Investments Co. | 15,884,115 | ||||||
1,000,195 | WisdomTree Investments, Inc. | 11,432,229 | ||||||
|
| |||||||
27,316,344 | ||||||||
|
| |||||||
Automotive Retail 1.1% | ||||||||
184,053 | Monro Muffler Brake, Inc. | 13,154,268 | ||||||
|
| |||||||
Biotechnology 4.1% | ||||||||
1,908,420 | Abcam plc (United Kingdom) | 16,185,233 | ||||||
1,582,827 | Sangamo BioSciences, Inc.* | 9,576,103 | ||||||
651,027 | Seattle Genetics, Inc.* | 22,844,538 | ||||||
|
| |||||||
48,605,874 | ||||||||
|
| |||||||
Building Products 1.7% | ||||||||
424,029 | Trex Co., Inc.* | 20,323,710 | ||||||
|
| |||||||
Consumer Finance 3.9% | ||||||||
169,210 | Credit Acceptance Corp.* | 30,720,075 | ||||||
548,345 | PRA Group, Inc.* | 16,115,860 | ||||||
|
| |||||||
46,835,935 | ||||||||
|
| |||||||
Distributors 1.2% | ||||||||
163,176 | Pool Corp. | 14,317,062 | ||||||
|
| |||||||
Diversified Banks 2.0% | ||||||||
6,656,038 | City Union Bank Ltd. (India) | 9,528,369 | ||||||
1,100,909 | Yes Bank Ltd. (India) | 14,413,350 | ||||||
|
| |||||||
23,941,719 | ||||||||
|
| |||||||
Diversified Capital Markets 1.5% | ||||||||
660,390 | HFF, Inc., Class A | 18,180,537 | ||||||
|
| |||||||
Diversified Support Services 2.5% | ||||||||
726,462 | Copart, Inc.* | 29,617,856 | ||||||
|
| |||||||
Environmental & Facilities Services 3.3% | ||||||||
600,152 | Waste Connections, Inc. | 38,763,818 | ||||||
|
| |||||||
General Merchandise Stores 0.3% | ||||||||
128,117 | Ollie’s Bargain Outlet Holdings, Inc.* | 3,001,781 | ||||||
|
| |||||||
Health Care Facilities 2.4% | ||||||||
1,250,069 | Ensign Group, Inc. (The) | 28,301,562 | ||||||
|
| |||||||
Health Care REITs 1.6% | ||||||||
1,536,988 | CareTrust REIT, Inc. | 19,519,748 | ||||||
|
| |||||||
Health Care Services 4.4% | ||||||||
764,265 | ExamWorks Group, Inc.* | 22,591,673 | ||||||
452,343 | MEDNAX, Inc.* | 29,230,405 | ||||||
|
| |||||||
51,822,078 | ||||||||
|
| |||||||
Homebuilding 1.2% | ||||||||
556,133 | Installed Building Products, Inc.* | 14,798,699 | ||||||
|
|
Shares | Value | |||||||
Homefurnishing Retail 1.4% | ||||||||
379,827 | Mattress Firm Holding Corp.* | $ | 16,100,867 | |||||
|
| |||||||
Internet Retail 2.2% | ||||||||
155,634 | Blue Nile, Inc. | 4,001,350 | ||||||
508,640 | MakeMyTrip Ltd.* (India) | 9,201,297 | ||||||
305,676 | Wayfair, Inc., Class A* | 13,211,317 | ||||||
|
| |||||||
26,413,964 | ||||||||
|
| |||||||
Internet Software & Services 7.0% | ||||||||
448,282 | Cimpress N.V.* | 40,654,694 | ||||||
870,722 | Cornerstone OnDemand, Inc.* | 28,533,560 | ||||||
372,214 | Envestnet, Inc.* | 10,124,221 | ||||||
114,292 | Shutterstock, Inc.* | 4,197,945 | ||||||
|
| |||||||
83,510,420 | ||||||||
|
| |||||||
IT Consulting & Other Services 3.1% | ||||||||
335,413 | EPAM Systems, Inc.* | 25,045,289 | ||||||
222,533 | Luxoft Holding, Inc.* | 12,245,991 | ||||||
|
| |||||||
37,291,280 | ||||||||
|
| |||||||
Life Sciences Tools & Services 4.2% | ||||||||
1,147,000 | Divi’s Laboratories Ltd. (India) | 17,129,873 | ||||||
436,437 | ICON plc* (Ireland) | 32,776,418 | ||||||
|
| |||||||
49,906,291 | ||||||||
|
| |||||||
Managed Health Care 0.6% | ||||||||
300,389 | HealthEquity, Inc.* | 7,410,597 | ||||||
|
| |||||||
Personal Products 0.9% | ||||||||
283,139 | Nu Skin Enterprises, Inc., Class A | 10,830,067 | ||||||
|
| |||||||
Real Estate Services 0.3% | ||||||||
114,470 | Marcus & Millichap, Inc.* | 2,906,393 | ||||||
|
| |||||||
Regional Banks 7.5% | ||||||||
346,902 | Eagle Bancorp, Inc.* | 16,651,296 | ||||||
340,636 | Independent Bank Corp. | 15,655,630 | ||||||
522,000 | Metro Bank plc* (United Kingdom) | 14,106,567 | ||||||
220,804 | South State Corp. | 14,182,241 | ||||||
340,992 | Texas Capital Bancshares, Inc.* | 13,087,273 | ||||||
444,763 | Webster Financial Corp. | 15,966,992 | ||||||
|
| |||||||
89,649,999 | ||||||||
|
| |||||||
Research & Consulting Services 1.3% | ||||||||
244,015 | CEB, Inc. | 15,795,091 | ||||||
|
| |||||||
Restaurants 2.9% | ||||||||
544,568 | Fiesta Restaurant Group, Inc.* | 17,850,939 | ||||||
410,739 | Zoe’s Kitchen, Inc.* | 16,014,714 | ||||||
|
| |||||||
33,865,653 | ||||||||
|
| |||||||
Semiconductors 3.6% | ||||||||
306,942 | Cavium, Inc.* | 18,772,573 | ||||||
301,196 | Monolithic Power Systems, Inc. | 19,168,113 | ||||||
86,312 | Power Integrations, Inc. | 4,286,254 | ||||||
|
| |||||||
42,226,940 | ||||||||
|
| |||||||
Specialized Consumer Services 0.8% | ||||||||
823,349 | LifeLock, Inc.* | 9,937,822 | ||||||
|
| |||||||
Specialized Finance 0.5% | ||||||||
230,065 | CRISIL Ltd. (India) | 6,253,245 | ||||||
|
| |||||||
Specialty Chemicals 2.1% | ||||||||
406,646 | Balchem Corp. | 25,220,185 | ||||||
|
| |||||||
Specialty Stores 1.1% | ||||||||
322,333 | Five Below, Inc.* | 13,325,246 | ||||||
|
| |||||||
Systems Software 3.4% | ||||||||
64,805 | CyberArk Software Ltd.* (Israel) | 2,762,637 | ||||||
166,471 | FleetMatics Group plc* | 6,777,035 | ||||||
540,922 | Fortinet, Inc.* | 16,568,441 | ||||||
852,032 | Infoblox, Inc.* | 14,569,747 | ||||||
|
| |||||||
40,677,860 | ||||||||
|
|
47
Table of Contents
WASATCH CORE GROWTH FUND (WGROX / WIGRX) — Schedule of Investments (continued) | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
Trucking 3.6% | ||||||||
627,240 | Knight Transportation, Inc. | $ | 16,402,326 | |||||
375,268 | Old Dominion Freight Line, Inc.* | 26,126,158 | ||||||
|
| |||||||
42,528,484 | ||||||||
|
| |||||||
Total Common Stocks (cost $835,170,165) | 1,114,567,861 | |||||||
|
| |||||||
PREFERRED STOCKS 0.3% | ||||||||
Systems Software 0.3% | ||||||||
209,500 | DocuSign, Inc., Series F Pfd.* *** † | 3,496,555 | ||||||
|
| |||||||
Total Preferred Stocks (cost $4,000,004) | 3,496,555 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 6.2% | ||||||||
Repurchase Agreement 6.2% | ||||||||
$74,234,256 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $72,720,000 of United States Treasury Notes 2.125% due 12/31/22; value $75,719,700; repurchase proceeds: $74,234,318 (cost $74,234,256) | $ | 74,234,256 | |||||
|
| |||||||
Total Short-Term Investments (cost $74,234,256) | 74,234,256 | |||||||
|
| |||||||
Total Investments (cost $913,404,425) 100.1% | 1,192,298,672 | |||||||
Liabilities less Other Assets (0.1%) | (1,564,953 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 1,190,733,719 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Core Growth Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 0.8 | |||
India | 5.1 | |||
Ireland | 2.9 | |||
Israel | 0.2 | |||
United Kingdom | 2.7 | |||
United States | 88.3 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
48
Table of Contents
WASATCH EMERGING INDIA FUND (WAINX / WIINX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.9% | ||||||||
Air Freight & Logistics 2.0% | ||||||||
13,930 | Blue Dart Express Ltd. (India) | $ | 1,286,089 | |||||
|
| |||||||
Apparel, Accessories & Luxury Goods 1.6% | ||||||||
5,455 | Page Industries Ltd. (India) | 988,486 | ||||||
|
| |||||||
Auto Parts & Equipment 3.0% | ||||||||
2,393 | Bosch Ltd. (India) | 754,695 | ||||||
12,480 | WABCO India Ltd. (India) | 1,162,771 | ||||||
|
| |||||||
1,917,466 | ||||||||
|
| |||||||
Building Products 4.4% | ||||||||
96,482 | Kajaria Ceramics Ltd. (India) | 1,403,030 | ||||||
240,394 | Somany Ceramics Ltd. (India) | 1,415,737 | ||||||
|
| |||||||
2,818,767 | ||||||||
|
| |||||||
Cable & Satellite 0.8% | ||||||||
364,854 | Dish TV India Ltd.* (India) | 484,838 | ||||||
|
| |||||||
Commodity Chemicals 4.4% | ||||||||
483,634 | Berger Paints India Ltd. (India) | 1,775,400 | ||||||
131,101 | Gulf Oil Lubricants India Ltd. (India) | 1,007,868 | ||||||
|
| |||||||
2,783,268 | ||||||||
|
| |||||||
Construction Machinery & Heavy Trucks 1.2% | ||||||||
2,566 | Eicher Motors Ltd. (India) | 743,965 | ||||||
|
| |||||||
Consumer Finance 8.1% | ||||||||
24,287 | Bajaj Finance Ltd. (India) | 2,534,965 | ||||||
153,115 | Repco Home Finance Ltd. (India) | 1,338,029 | ||||||
27,469 | Shriram City Union Finance Ltd. (India) | 624,272 | ||||||
79,062 | SKS Microfinance Ltd.* (India) | 654,249 | ||||||
|
| |||||||
5,151,515 | ||||||||
|
| |||||||
Department Stores 1.3% | ||||||||
119,338 | V-Mart Retail Ltd. (India) | 846,976 | ||||||
|
| |||||||
Diversified Banks 4.4% | ||||||||
181,253 | Axis Bank Ltd. (India) | 1,219,347 | ||||||
10,096 | HDFC Bank Ltd. ADR (India) | 622,217 | ||||||
66,069 | IndusInd Bank Ltd. (India) | 964,110 | ||||||
|
| |||||||
2,805,674 | ||||||||
|
| |||||||
Diversified Chemicals 2.1% | ||||||||
148,835 | Pidilite Industries Ltd. (India) | 1,326,024 | ||||||
|
| |||||||
Electrical Components & Equipment 1.7% | ||||||||
82,147 | Amara Raja Batteries Ltd. (India) | 1,094,714 | ||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 3.7% | ||||||||
13,992 | Bayer CropScience Ltd. (India) | 801,837 | ||||||
211,386 | UPL Ltd. (India) | 1,525,803 | ||||||
|
| |||||||
2,327,640 | ||||||||
|
| |||||||
Health Care Facilities 1.0% | ||||||||
31,306 | Apollo Hospitals Enterprise Ltd. (India) | 633,518 | ||||||
|
| |||||||
Health Care Services 4.0% | ||||||||
183,640 | Dr. Lal PathLabs Ltd.* (India) | 2,556,914 | ||||||
|
| |||||||
Housewares & Specialties 1.9% | ||||||||
135,242 | LA Opala RG Ltd. (India) | 1,227,384 | ||||||
|
| |||||||
Industrial Machinery 1.7% | ||||||||
38,563 | AIA Engineering Ltd. (India) | 549,744 | ||||||
8,219 | FAG Bearings India Ltd. (India) | 468,175 | ||||||
35,875 | Max Ventures & Industries Ltd.* *** (India) | 37,883 | ||||||
|
| |||||||
1,055,802 | ||||||||
|
|
Shares | Value | |||||||
Internet Retail 3.3% | ||||||||
117,549 | MakeMyTrip Ltd.* (India) | $ | 2,126,461 | |||||
|
| |||||||
IT Consulting & Other Services 2.1% | ||||||||
20,982 | Cognizant Technology Solutions Corp., Class A* | 1,315,571 | ||||||
|
| |||||||
Life & Health Insurance 1.9% | ||||||||
179,375 | Max Financial Services Ltd. (India) | 925,011 | ||||||
179,375 | Max India Ltd.* *** (India) | 277,802 | ||||||
|
| |||||||
1,202,813 | ||||||||
|
| |||||||
Life Sciences Tools & Services 2.8% | ||||||||
80,340 | Divi’s Laboratories Ltd. (India) | 1,199,838 | ||||||
97,743 | Syngene International Ltd. (India) | 566,776 | ||||||
|
| |||||||
1,766,614 | ||||||||
|
| |||||||
Marine Ports & Services 0.8% | ||||||||
204,923 | Gujarat Pipavav Port Ltd.* (India) | 541,531 | ||||||
|
| |||||||
Packaged Foods & Meats 7.0% | ||||||||
30,352 | Britannia Industries Ltd. (India) | 1,233,834 | ||||||
3,132 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 284,669 | ||||||
187,240 | Manpasand Beverages Ltd. (India) | 1,337,237 | ||||||
3,948 | Nestlé India Ltd. (India) | 339,818 | ||||||
745,189 | Prabhat Dairy Ltd.* (India) | 1,227,681 | ||||||
|
| |||||||
4,423,239 | ||||||||
|
| |||||||
Personal Products 8.3% | ||||||||
126,612 | Bajaj Corp. Ltd. (India) | 739,912 | ||||||
104,221 | Colgate-Palmolive India Ltd. (India) | 1,298,464 | ||||||
271,006 | Dabur India Ltd. (India) | 1,026,158 | ||||||
69,854 | Godrej Consumer Products Ltd. (India) | 1,456,678 | ||||||
8,013 | Procter & Gamble Hygiene & Health Care Ltd. (India) | 762,187 | ||||||
|
| |||||||
5,283,399 | ||||||||
|
| |||||||
Pharmaceuticals 11.1% | ||||||||
117,116 | Aurobindo Pharma Ltd. (India) | 1,317,550 | ||||||
66,895 | Caplin Point Laboratories Ltd. (India) | 1,020,257 | ||||||
134,902 | Glenmark Pharmaceuticals Ltd. (India) | 1,619,496 | ||||||
24,414 | Lupin Ltd. (India) | 545,810 | ||||||
1,326,678 | Marksans Pharma Ltd. (India) | 925,554 | ||||||
261,485 | Natco Pharma Ltd. (India) | 1,629,580 | ||||||
|
| |||||||
7,058,247 | ||||||||
|
| |||||||
Restaurants 1.1% | ||||||||
34,996 | Jubilant Foodworks Ltd. (India) | 673,259 | ||||||
|
| |||||||
Specialized Finance 1.0% | ||||||||
23,530 | CRISIL Ltd. (India) | 639,553 | ||||||
|
| |||||||
Specialty Chemicals 1.8% | ||||||||
44,918 | Asian Paints Ltd. (India) | 591,468 | ||||||
162,695 | SH Kelkar & Co. Ltd. (India) | 557,447 | ||||||
|
| |||||||
1,148,915 | ||||||||
|
| |||||||
Systems Software 1.9% | ||||||||
41,531 | Tata Elxsi Ltd. (India) | 1,184,047 | ||||||
|
| |||||||
Textiles 2.8% | ||||||||
1,180,870 | Welspun India Ltd. (India) | 1,765,354 | ||||||
|
| |||||||
Thrifts & Mortgage Finance 4.7% | ||||||||
199,915 | Gruh Finance Ltd. (India) | 720,446 | ||||||
74,102 | Housing Development Finance Corp. Ltd. (India) | 1,238,717 | ||||||
66,170 | Indiabulls Housing Finance Ltd. (India) | 649,485 | ||||||
54,403 | LIC Housing Finance Ltd. (India) | 403,365 | ||||||
|
| |||||||
3,012,013 | ||||||||
|
| |||||||
Total Common Stocks (cost $51,516,461) | 62,190,056 | |||||||
|
|
49
Table of Contents
WASATCH EMERGING INDIA FUND (WAINX / WIINX) — Schedule of Investments (continued) | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Principal Amount | Value | |||||||
CORPORATE BONDS 0.0% | ||||||||
Air Freight & Logistics 0.0% | ||||||||
$ 532,980 | Blue Dart Express Ltd., 9.30%, 11/20/17 (India) | $ | 8,169 | |||||
304,560 | Blue Dart Express Ltd., 9.40%, 11/20/18 (India) | 4,608 | ||||||
228,420 | Blue Dart Express Ltd., 9.50%, 11/20/19 (India) | 3,470 | ||||||
|
| |||||||
16,247 | ||||||||
|
| |||||||
Total Corporate Bonds (cost $10,039) | 16,247 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 2.2% | ||||||||
Repurchase Agreement 2.2% | ||||||||
1,400,883 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $1,375,000 of United States Treasury Notes 2.125% due 12/31/22; value: $1,431,719; repurchase proceeds: $1,400,884 (cost $1,400,883) | 1,400,883 | ||||||
|
| |||||||
Total Short-Term Investments (cost $1,400,883) | 1,400,883 | |||||||
|
| |||||||
Total Investments (cost $52,927,383) 100.1% | 63,607,186 | |||||||
Liabilities less Other Assets (0.1%) | (48,613 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 63,558,573 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
ADR American Depositary Receipt.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Emerging India Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
India | 97.9 | |||
United States | 2.1 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
50
Table of Contents
WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.8% | ||||||||
Airport Services 6.8% | ||||||||
163,949 | Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B* (Mexico) | $ | 1,454,855 | |||||
77,586 | Grupo Aeroportuario del Sureste S.A.B. de C.V., Class B (Mexico) | 1,164,590 | ||||||
|
| |||||||
2,619,445 | ||||||||
|
| |||||||
Biotechnology 4.4% | ||||||||
4,371 | Medytox, Inc. (Korea) | 1,687,475 | ||||||
|
| |||||||
Commodity Chemicals 1.6% | ||||||||
165,200 | Berger Paints India Ltd. (India) | 606,442 | ||||||
|
| |||||||
Consumer Finance 8.3% | ||||||||
13,797 | Bajaj Finance Ltd. (India) | 1,440,067 | ||||||
883,306 | Gentera S.A.B. de C.V. (Mexico) | 1,737,994 | ||||||
|
| |||||||
3,178,061 | ||||||||
|
| |||||||
Diversified Banks 8.7% | ||||||||
130,323 | Axis Bank Ltd. (India) | 876,724 | ||||||
214,176 | Kasikornbank Public Co. Ltd. (Thailand) | 1,065,401 | ||||||
277,799 | National Bank of Ras Al-Khaimah PSC (United Arab Emirates) | 453,784 | ||||||
1,107,512 | PT Bank Rakyat Indonesia Persero Tbk (Indonesia) | 954,248 | ||||||
|
| |||||||
3,350,157 | ||||||||
|
| |||||||
Diversified Capital Markets 3.7% | ||||||||
250,533 | Grupo Financiero Interacciones S.A. de C.V., Class O (Mexico) | 1,415,241 | ||||||
|
| |||||||
Drug Retail 2.7% | ||||||||
71,643 | Raia Drogasil S.A. (Brazil) | 1,044,554 | ||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 2.4% | ||||||||
128,350 | UPL Ltd. (India) | 926,442 | ||||||
|
| |||||||
Food Retail 3.8% | ||||||||
39,852 | BIM Birlesik Magazalar A.S. (Turkey) | 862,173 | ||||||
83,665 | President Chain Store Corp. (Taiwan) | 609,602 | ||||||
|
| |||||||
1,471,775 | ||||||||
|
| |||||||
Health Care Facilities 4.9% | ||||||||
24,300 | Apollo Hospitals Enterprise Ltd. (India) | 491,743 | ||||||
2,092,937 | Bangkok Dusit Medical Services Public Co. Ltd., Class F (Thailand) | 1,392,118 | ||||||
|
| |||||||
1,883,861 | ||||||||
|
| |||||||
Highways & Railtracks 4.5% | ||||||||
131,812 | Promotora y Operadora de Infraestructura S.A.B. de C.V. (Mexico) | 1,741,699 | ||||||
|
| |||||||
Industrial Machinery 1.4% | ||||||||
134,115 | Weg S.A. (Brazil) | 524,810 | ||||||
|
| |||||||
Internet Software & Services 3.4% | ||||||||
10,998 | MercadoLibre, Inc. (Brazil) | 1,296,114 | ||||||
|
| |||||||
Life & Health Insurance 1.9% | ||||||||
90,648 | Discovery Ltd. (South Africa) | 746,428 | ||||||
|
| |||||||
Life Sciences Tools & Services 3.3% | ||||||||
83,675 | Divi’s Laboratories Ltd. (India) | 1,249,644 | ||||||
|
| |||||||
Marine Ports & Services 1.3% | ||||||||
338,623 | International Container Terminal Services, Inc. (Philippines) | 497,878 | ||||||
|
| |||||||
Multi-Line Insurance 1.8% | ||||||||
84,922 | BB Seguridade Participacoes S.A. (Brazil) | 704,471 | ||||||
|
| |||||||
Multi-Sector Holdings 3.6% | ||||||||
45,781 | GT Capital Holdings, Inc. (Philippines) | 1,382,030 | ||||||
|
|
Shares | Value | |||||||
Packaged Foods & Meats 7.5% | ||||||||
21,800 | Britannia Industries Ltd. (India) | $ | 886,188 | |||||
284,036 | Universal Robina Corp. (Philippines) | 1,337,366 | ||||||
359,651 | Vitasoy International Holdings Ltd. (Hong Kong) | 670,490 | ||||||
|
| |||||||
2,894,044 | ||||||||
|
| |||||||
Personal Products 4.6% | ||||||||
43,900 | Colgate-Palmolive India Ltd. (India) | 546,939 | ||||||
126,550 | Dabur India Ltd. (India) | 479,179 | ||||||
36,550 | Godrej Consumer Products Ltd. (India) | 762,184 | ||||||
|
| |||||||
1,788,302 | ||||||||
|
| |||||||
Pharmaceuticals 5.4% | ||||||||
79,235 | Glenmark Pharmaceuticals Ltd. (India) | 951,215 | ||||||
876 | Hanmi Pharm Co. Ltd. (Korea) | 535,436 | ||||||
26,804 | Lupin Ltd. (India) | 599,242 | ||||||
|
| |||||||
2,085,893 | ||||||||
|
| |||||||
Restaurants 2.9% | ||||||||
295,625 | Alsea S.A.B. de C.V. (Mexico) | 1,106,200 | ||||||
|
| |||||||
Specialty Chemicals 2.6% | ||||||||
76,851 | Asian Paints Ltd. (India) | 1,011,953 | ||||||
|
| |||||||
Textiles 4.9% | ||||||||
81,982 | Eclat Textile Co. Ltd. (Taiwan) | 1,078,778 | ||||||
548,000 | Welspun India Ltd. (India) | 819,238 | ||||||
|
| |||||||
1,898,016 | ||||||||
|
| |||||||
Wireless Telecommunication Services 1.4% | ||||||||
1,212,287 | PT Tower Bersama Infrastructure Tbk* (Indonesia) | 532,547 | ||||||
|
| |||||||
Total Common Stocks (cost $35,213,693) | 37,643,482 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 2.2% | ||||||||
Repurchase Agreement 2.2% | ||||||||
$ 850,625 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $835,000 of United States Treasury Notes 2.125% due 12/31/22; value: $869,444; repurchase proceeds: $850,626 (cost $850,625) | $ | 850,625 | |||||
|
| |||||||
Total Short-Term Investments (cost $850,625) | 850,625 | |||||||
|
| |||||||
Total Investments (cost $36,064,318) 100.0% | 38,494,107 | |||||||
|
| |||||||
Other Assets less Liabilities <0.1% | 2,241 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 38,496,348 | ||||||
|
| |||||||
*Non-income producing.
See Notes to Financial Statements. |
|
51
Table of Contents
WASATCH EMERGING MARKETS SELECT FUND (WAESX / WIESX) — Schedule of Investments (continued) | (UNAUDITED) | |
| ||
|
At March 31, 2016, Wasatch Emerging Markets Select Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Brazil | 9.5 | |||
Hong Kong | 1.8 | |||
India | 30.9 | |||
Indonesia | 4.0 | |||
Korea | 5.9 | |||
Mexico | 22.9 | |||
Philippines | 8.5 | |||
South Africa | 2.0 | |||
Taiwan | 4.5 | |||
Thailand | 6.5 | |||
Turkey | 2.3 | |||
United Arab Emirates | 1.2 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
52
Table of Contents
WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 99.5% | ||||||||
Airport Services 3.0% | ||||||||
2,826,323 | Grupo Aeroportuario del Centro Norte S.A.B. de C.V.* (Mexico) | $ | 16,164,628 | |||||
552,541 | Grupo Aeroportuario del Sureste S.A.B. de C.V., Class B (Mexico) | 8,293,814 | ||||||
|
| |||||||
24,458,442 | ||||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 0.5% | ||||||||
729,888 | Makalot Industrial Co. Ltd. (Taiwan) | 4,388,309 | ||||||
|
| |||||||
Application Software 0.5% | ||||||||
304,765 | Linx S.A. (Brazil) | 4,080,842 | ||||||
|
| |||||||
Asset Management & Custody Banks 2.3% | ||||||||
1,110,920 | CETIP S.A. — Mercados Organizados (Brazil) | 12,458,191 | ||||||
3,163,308 | Peregrine Holdings Ltd. (South Africa) | 5,841,998 | ||||||
|
| |||||||
18,300,189 | ||||||||
|
| |||||||
Auto Parts & Equipment 2.8% | ||||||||
750,389 | Cub Elecparts, Inc. (Taiwan) | 9,151,370 | ||||||
827,073 | Tung Thih Electronic Co. Ltd. (Taiwan) | 13,620,081 | ||||||
|
| |||||||
22,771,451 | ||||||||
|
| |||||||
Biotechnology 4.3% | ||||||||
144,236 | Cell Biotech Co. Ltd. (Korea) | 7,983,682 | ||||||
56,755 | China Biologic Products, Inc.* (China) | 6,497,312 | ||||||
24,644 | Hugel, Inc.* (Korea) | 5,999,379 | ||||||
37,186 | Medytox, Inc. (Korea) | 14,356,085 | ||||||
|
| |||||||
34,836,458 | ||||||||
|
| |||||||
Building Products 1.1% | ||||||||
617,727 | Kajaria Ceramics Ltd. (India) | 8,982,915 | ||||||
|
| |||||||
Casinos & Gaming 0.2% | ||||||||
14,224,872 | Bloomberry Resorts Corp.* (Philippines) | 1,591,011 | ||||||
|
| |||||||
Commodity Chemicals 1.1% | ||||||||
2,518,830 | Berger Paints India Ltd. (India) | 9,246,519 | ||||||
|
| |||||||
Consumer Finance 9.5% | ||||||||
95,752 | Bajaj Finance Ltd. (India) | 9,994,153 | ||||||
4,604,371 | Credito Real S.A.B. de C.V. (Mexico) | 9,713,129 | ||||||
160,823 | KRUK S.A. (Poland) | 7,763,601 | ||||||
734,330 | Repco Home Finance Ltd. (India) | 6,417,106 | ||||||
285,573 | Shriram City Union Finance Ltd. (India) | 6,490,050 | ||||||
1,208,425 | SKS Microfinance Ltd.* (India) | 9,999,878 | ||||||
9,879,549 | Srisawad Power 1979 Public Co. Ltd. (Thailand) | 11,865,007 | ||||||
5,143,121 | Unifin Financiera SAPI de C.V. SOFOM (Mexico) | 14,366,285 | ||||||
|
| |||||||
76,609,209 | ||||||||
|
| |||||||
Department Stores 2.5% | ||||||||
1,402,203 | Poya Co. Ltd. (Taiwan) | 14,900,368 | ||||||
3,619,293 | PT Matahari Department Store Tbk (Indonesia) | 5,008,599 | ||||||
|
| |||||||
19,908,967 | ||||||||
|
| |||||||
Diversified Banks 2.1% | ||||||||
7,839,101 | EastWest Banking Corp.* (Philippines) | 2,618,425 | ||||||
3,840,314 | Security Bank Corp. (Philippines) | 14,595,612 | ||||||
|
| |||||||
17,214,037 | ||||||||
|
| |||||||
Diversified Capital Markets 1.1% | ||||||||
1,580,883 | Grupo Financiero Interacciones S.A. de C.V., Class O (Mexico) | 8,930,280 | ||||||
|
| |||||||
Diversified Chemicals 1.2% | ||||||||
1,131,355 | Pidilite Industries Ltd. (India) | 10,079,647 | ||||||
|
|
Shares | Value | |||||||
Diversified Support Services 0.1% | ||||||||
10,106 | KEPCO Plant Service & Engineering Co. Ltd. (Korea) | $ | 566,452 | |||||
|
| |||||||
Drug Retail 3.2% | ||||||||
1,572,168 | Clicks Group Ltd. (South Africa) | 10,354,503 | ||||||
1,035,222 | Raia Drogasil S.A. (Brazil) | 15,093,524 | ||||||
|
| |||||||
25,448,027 | ||||||||
|
| |||||||
Electrical Components & Equipment 2.7% | ||||||||
512,509 | Amara Raja Batteries Ltd. (India) | 6,829,842 | ||||||
943,610 | Voltronic Power Technology Corp. (Taiwan) | 14,864,848 | ||||||
|
| |||||||
21,694,690 | ||||||||
|
| |||||||
Electronic Components 1.0% | ||||||||
2,841,786 | Sunny Optical Technology Group Co. Ltd. (China) | 7,950,487 | ||||||
|
| |||||||
Electronic Manufacturing Services 0.7% | ||||||||
5,377,822 | Hana Microelectronics Public Co. Ltd. (Thailand) | 5,464,956 | ||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 2.3% | ||||||||
165,313 | Bayer CropScience Ltd. (India) | 9,473,560 | ||||||
1,236,505 | UPL Ltd. (India) | 8,925,205 | ||||||
|
| |||||||
18,398,765 | ||||||||
|
| |||||||
Food Retail 2.9% | ||||||||
82,249 | BGF Retail Co. Ltd. (Korea) | 11,795,065 | ||||||
781,421 | Eurocash S.A. (Poland) | 11,180,521 | ||||||
|
| |||||||
22,975,586 | ||||||||
|
| |||||||
Footwear 0.9% | ||||||||
161,284 | CCC S.A. (Poland) | 6,909,947 | ||||||
|
| |||||||
Health Care Equipment 3.3% | ||||||||
236,743 | DIO Corp.* (Korea) | 10,350,778 | ||||||
171,415 | InBody Co. Ltd. (Korea) | 7,239,720 | ||||||
67,623 | Osstem Implant Co. Ltd.* (Korea) | 4,653,664 | ||||||
115,051 | Value Added Technologies Co. Ltd. (Korea) | 4,461,798 | ||||||
|
| |||||||
26,705,960 | ||||||||
|
| |||||||
Health Care Facilities 0.7% | ||||||||
365,917 | NMC Health plc (United Arab Emirates) | 5,559,690 | ||||||
|
| |||||||
Health Care Services 0.4% | ||||||||
219,644 | Dr. Lal PathLabs Ltd.* (India) | 3,058,217 | ||||||
|
| |||||||
Highways & Railtracks 1.0% | ||||||||
11,538,146 | Yuexiu Transport Infrastructure Ltd. (China) | 7,765,137 | ||||||
|
| |||||||
Home Furnishings 2.3% | ||||||||
54,143 | Hanssem Co. Ltd. (Korea) | 10,581,463 | ||||||
6,087,676 | Man Wah Holdings Ltd. (Hong Kong) | 7,730,905 | ||||||
|
| |||||||
18,312,368 | ||||||||
|
| |||||||
Home Improvement Retail 0.8% | ||||||||
27,632,186 | Home Product Center Public Co. Ltd. (Thailand) | 6,479,975 | ||||||
|
| |||||||
Hotels, Resorts & Cruise Lines 1.7% | ||||||||
13,209,575 | Minor International Public Co. Ltd. (Thailand) | 13,892,958 | ||||||
|
| |||||||
Hypermarkets & Super Centers 1.1% | ||||||||
153,354 | Al Meera Consumer Goods Co. (Qatar) | 8,717,243 | ||||||
|
| |||||||
Industrial Machinery 0.0% | ||||||||
199,270 | Max Ventures & Industries Ltd.* *** (India) | 210,426 | ||||||
|
|
53
Table of Contents
WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX / WIEMX) — Schedule of Investments (continued) | ||
| ||
|
Shares | Value | |||||||
Internet Retail 1.1% | ||||||||
1,038,738 | Interpark Holdings Corp. (Korea) | $ | 8,556,236 | |||||
|
| |||||||
Internet Software & Services 1.6% | ||||||||
524,636 | Addcn Technology Co. Ltd. (Taiwan) | 4,238,297 | ||||||
818,685 | PChome Online, Inc. (Taiwan) | 9,017,644 | ||||||
|
| |||||||
13,255,941 | ||||||||
|
| |||||||
IT Consulting & Other Services 1.9% | ||||||||
690,524 | EOH Holdings Ltd. (South Africa) | 6,901,847 | ||||||
891,278 | Mindtree Ltd. (India) | 8,761,705 | ||||||
|
| |||||||
15,663,552 | ||||||||
|
| |||||||
Leisure Products 0.6% | ||||||||
1,141,174 | Merida Industry Co. Ltd. (Taiwan) | 5,052,737 | ||||||
|
| |||||||
Life & Health Insurance 0.8% | ||||||||
920,623 | Max Financial Services Ltd. (India) | 4,747,522 | ||||||
996,351 | Max India Ltd.* *** (India) | 1,543,067 | ||||||
|
| |||||||
6,290,589 | ||||||||
|
| |||||||
Life Sciences Tools & Services 0.4% | ||||||||
563,895 | Syngene International Ltd. (India) | 3,269,820 | ||||||
|
| |||||||
Marine Ports & Services 1.3% | ||||||||
3,217,775 | International Container Terminal Services, Inc. (Philippines) | 4,731,097 | ||||||
5,592,974 | Westports Holdings Berhad (Malaysia) | 5,920,539 | ||||||
|
| |||||||
10,651,636 | ||||||||
|
| |||||||
Movies & Entertainment 1.3% | ||||||||
909,218 | IMAX China Holding, Inc.* (China) | 5,468,425 | ||||||
77,220 | Loen Entertainment, Inc.* (Korea) | 5,273,594 | ||||||
|
| |||||||
10,742,019 | ||||||||
|
| |||||||
Multi-Sector Holdings 1.0% | ||||||||
269,122 | GT Capital Holdings, Inc. (Philippines) | 8,124,217 | ||||||
|
| |||||||
Oil & Gas Equipment & Services 0.4% | ||||||||
3,016,934 | Gulf Marine Services plc (United Arab Emirates) | 2,851,376 | ||||||
|
| |||||||
Oil & Gas Exploration & Production 0.6% | ||||||||
574,631 | Parex Resources, Inc.* (Colombia) | 4,842,210 | ||||||
|
| |||||||
Other Diversified Financial Services 0.7% | ||||||||
428,109 | PSG Group Ltd. (South Africa) | 5,817,309 | ||||||
|
| |||||||
Packaged Foods & Meats 4.9% | ||||||||
267,751 | Britannia Industries Ltd. (India) | 10,884,302 | ||||||
2,779,986 | Namchow Chemical Industrial Co. Ltd. (Taiwan) | 5,389,980 | ||||||
1,642,523 | Ulker Biskuvi Sanayi A.S. (Turkey) | 12,165,113 | ||||||
5,931,933 | Vitasoy International Holdings Ltd. (Hong Kong) | 11,058,778 | ||||||
|
| |||||||
39,498,173 | ||||||||
|
| |||||||
Pharmaceuticals 3.6% | ||||||||
13,017,213 | China Animal Healthcare Ltd.* *** (China) | 16,783 | ||||||
555,976 | Glenmark Pharmaceuticals Ltd. (India) | 6,674,483 | ||||||
7,951,373 | Marksans Pharma Ltd. (India) | 5,547,260 | ||||||
1,127,100 | Natco Pharma Ltd. (India) | 7,024,111 | ||||||
1,513,834 | TTY Biopharm Co. Ltd. (Taiwan) | 5,221,090 | ||||||
1,234,329 | TWi Pharmaceuticals, Inc.* (Taiwan) | 4,870,736 | ||||||
|
| |||||||
29,354,463 | ||||||||
|
| |||||||
Property & Casualty Insurance 0.3% | ||||||||
1,825,893 | Qualitas Controladora S.A.B. de C.V.* ** (Mexico) | 2,128,185 | ||||||
|
| |||||||
Real Estate Operating Companies 0.8% | ||||||||
3,464,163 | Parque Arauco S.A. (Chile) | 6,372,101 | ||||||
|
|
Shares | Value | |||||||
Regional Banks 1.3% | ||||||||
1,317,176 | Banregio Grupo Financiero S.A.B. de C.V. (Mexico) | $ | 7,649,627 | |||||
21,963,500 | PT Bank Tabungan Negara Tbk (Indonesia) | 2,890,370 | ||||||
|
| |||||||
10,539,997 | ||||||||
|
| |||||||
Reinsurance 0.4% | ||||||||
11,915,077 | Thaire Life Assurance Public Co. Ltd. (Thailand) | 3,522,365 | ||||||
|
| |||||||
Research & Consulting Services 0.9% | ||||||||
1,373,318 | Sporton International, Inc. (Taiwan) | 7,019,352 | ||||||
|
| |||||||
Restaurants 2.2% | ||||||||
3,167,904 | Alsea S.A.B. de C.V. (Mexico) | 11,853,992 | ||||||
774,801 | Famous Brands Ltd. (South Africa) | 6,138,441 | ||||||
|
| |||||||
17,992,433 | ||||||||
|
| |||||||
Semiconductor Equipment 1.1% | ||||||||
12,472 | ISC Co. Ltd. (Korea) | 279,191 | ||||||
240,000 | Koh Young Technology, Inc. (Korea) | 8,562,435 | ||||||
|
| |||||||
8,841,626 | ||||||||
|
| |||||||
Semiconductors 4.1% | ||||||||
824,322 | ASPEED Technology, Inc. (Taiwan) | 8,759,574 | ||||||
436,612 | eMemory Technology, Inc. (Taiwan) | 5,046,597 | ||||||
103,681 | LEENO Industrial, Inc. (Korea) | 3,522,216 | ||||||
1,138,384 | Silergy Corp. (Taiwan) | 15,527,920 | ||||||
|
| |||||||
32,856,307 | ||||||||
|
| |||||||
Specialty Chemicals 3.2% | ||||||||
49,930,889 | D&L Industries, Inc. (Philippines) | 10,421,019 | ||||||
222,455 | Frutarom Industries Ltd. (Israel) | 11,667,013 | ||||||
983,578 | SH Kelkar & Co. Ltd. (India) | 3,370,061 | ||||||
|
| |||||||
25,458,093 | ||||||||
|
| |||||||
Systems Software 2.3% | ||||||||
307,445 | DuzonBizon Co. Ltd. (Korea) | 6,546,245 | ||||||
415,840 | Tata Elxsi Ltd. (India) | 11,855,577 | ||||||
|
| |||||||
18,401,822 | ||||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 2.4% | ||||||||
1,057,874 | Ennoconn Corp. (Taiwan) | 12,720,521 | ||||||
713,394 | TSC Auto ID Technology Co. Ltd. (Taiwan) | 6,250,842 | ||||||
|
| |||||||
18,971,363 | ||||||||
|
| |||||||
Textiles 2.1% | ||||||||
564,247 | Eclat Textile Co. Ltd. (Taiwan) | 7,424,764 | ||||||
6,114,270 | Welspun India Ltd. (India) | 9,140,590 | ||||||
|
| |||||||
16,565,354 | ||||||||
|
| |||||||
Thrifts & Mortgage Finance 0.3% | ||||||||
288,037 | LIC Housing Finance Ltd. (India) | 2,135,621 | ||||||
|
| |||||||
Wireless Telecommunication Services 0.6% | ||||||||
10,319,601 | PT Tower Bersama Infrastructure Tbk* (Indonesia) | 4,533,309 | ||||||
|
| |||||||
Total Common Stocks (cost $677,986,877) | 800,817,366 | |||||||
|
|
54
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
WARRANTS 0.1% | ||||||||
Consumer Finance 0.1% | ||||||||
587,195 | Srisawad Power 1979 Public Co. Ltd., expiring 5/29/20* (Thailand) | $ | 181,933 | |||||
|
| |||||||
Hotels, Resorts & Cruise Lines 0.0% | ||||||||
967,830 | Minor International Public Co. Ltd., expiring 11/3/17* (Thailand) | 129,851 | ||||||
|
| |||||||
Total Warrants (cost $0) | 311,784 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 0.1% | ||||||||
Repurchase Agreement 0.1% | ||||||||
$ 848,959 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $795,000 of United States Treasury Notes 2.750% due 11/15/23; value: $867,544; repurchase proceeds: $848,960 (cost $848,959) | $ | 848,959 | |||||
|
| |||||||
Total Short-Term Investments (cost $848,959) | 848,959 | |||||||
|
| |||||||
Total Investments (cost $678,835,836) 99.7% | 801,978,109 | |||||||
Other Assets less Liabilities 0.3% | 2,773,899 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 804,752,008 | ||||||
|
| |||||||
*Non-income producing.
**Common units.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Emerging Markets Small Cap Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Brazil | 3.9 | |||
Chile | 0.8 | |||
China | 3.5 | |||
Colombia | 0.6 | |||
Hong Kong | 2.3 | |||
India | 20.6 | |||
Indonesia | 1.5 | |||
Israel | 1.5 | |||
Korea | 13.8 | |||
Malaysia | 0.7 | |||
Mexico | 9.9 | |||
Philippines | 5.3 | |||
Poland | 3.2 | |||
Qatar | 1.1 | |||
South Africa | 4.4 | |||
Taiwan | 19.2 | |||
Thailand | 5.2 | |||
Turkey | 1.5 | |||
United Arab Emirates | 1.0 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
55
Table of Contents
WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND (WAFMX / WIFMX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 95.6% | ||||||||
Advertising 0.0% | ||||||||
103,600 | WPP Scangroup Ltd. (Kenya) | $ | 30,125 | |||||
|
| |||||||
Agricultural & Farm Machinery 0.4% | ||||||||
734,625 | Millat Tractors Ltd. (Pakistan) | 3,714,230 | ||||||
|
| |||||||
Air Freight & Logistics 0.3% | ||||||||
3,178,784 | Aramex PJSC (United Arab Emirates) | 2,933,783 | ||||||
|
| |||||||
Airport Services 1.1% | ||||||||
871,698 | Airports of Thailand Public Co. Ltd. (Thailand) | 9,960,847 | ||||||
|
| |||||||
Automobile Manufacturers 0.4% | ||||||||
386,600 | Indus Motor Co. Ltd. (Pakistan) | 3,480,987 | ||||||
|
| |||||||
Brewers 13.5% | ||||||||
873,686 | Ambev S.A., ADR (Brazil) | 4,525,693 | ||||||
1,241,873 | Carlsberg Brewery Malaysia Berhad (Malaysia) | 4,449,925 | ||||||
6,833,554 | Delta Corp. Ltd. (Zimbabwe) | 3,843,874 | ||||||
10,415,087 | East African Breweries Ltd. (Kenya) | 29,258,746 | ||||||
3,825,690 | Florida Ice & Farm Co. S.A. (Costa Rica) | 5,199,154 | ||||||
246,581 | Guinness Anchor Berhad (Malaysia) | 886,086 | ||||||
1,074,765 | Guinness Ghana Breweries Ltd.* (Ghana) | 540,886 | ||||||
10,103,081 | Guinness Nigeria plc (Nigeria) | 5,304,854 | ||||||
2,120,243 | Lion Brewery Ceylon plc (Sri Lanka) | 6,564,040 | ||||||
612,633 | Murree Brewery Co. Ltd. (Pakistan) | 4,562,721 | ||||||
4,600 | Namibia Breweries Ltd. (Namibia) | 6,241 | ||||||
22,512,337 | Nigerian Breweries plc (Nigeria) | 12,103,407 | ||||||
133,300 | Phoenix Beverages Ltd. (Mauritius) | 1,347,000 | ||||||
76,340 | Societe Des Brasseries du Maroc (Morocco) | 14,299,886 | ||||||
4,522,446 | Tanzania Breweries Ltd. (Tanzania, United Republic of) | 28,729,373 | ||||||
5,852 | Union de Cervecerias Peruanas Backus y Johnston S.A.A. (Peru) | 24,188 | ||||||
|
| |||||||
121,646,074 | ||||||||
|
| |||||||
Commodity Chemicals 1.7% | ||||||||
119,850 | Berger Paints Bangladesh Ltd. (Bangladesh) | 2,944,812 | ||||||
6,133,248 | Chevron Lubricants Lanka plc‡‡ (Sri Lanka) | 12,690,782 | ||||||
|
| |||||||
15,635,594 | ||||||||
|
| |||||||
Construction Materials 6.1% | ||||||||
3,411,560 | Bamburi Cement Co. Ltd. (Kenya) | 6,523,831 | ||||||
72,670 | HA TIEN 1 Cement JSC* (Vietnam) | 84,102 | ||||||
573,981 | Heidelberger Cement Bangladesh Ltd. (Bangladesh) | 3,652,173 | ||||||
4,723,692 | Kohat Cement Co. Ltd. (Pakistan) | 11,726,916 | ||||||
3,404,771 | Lafarge Africa plc (Nigeria) | 1,303,777 | ||||||
3,450,000 | Lafarge Cement Zambia plc (Zambia) | 5,955,525 | ||||||
1,922,092 | Lucky Cement Ltd. (Pakistan) | 9,855,470 | ||||||
959,857 | PT Indocement Tunggal Prakarsa Tbk (Indonesia) | 1,427,842 | ||||||
6,114,400 | PT Semen Indonesia Persero Tbk (Indonesia) | 4,691,857 | ||||||
565,333 | Siam City Cement Public Co. Ltd. (Thailand) | 4,949,476 | ||||||
1,710,600 | Tanzania Portland Cement Co. Ltd.* (Tanzania, United Republic of) | 2,041,924 | ||||||
11,467,631 | Tokyo Cement Co. Lanka plc‡‡ (Sri Lanka) | 2,906,180 | ||||||
|
| |||||||
55,119,073 | ||||||||
|
| |||||||
Consumer Finance 0.5% | ||||||||
14,344,188 | Letshego Holdings Ltd. (Botswana) | 3,308,129 | ||||||
11,792,986 | People’s Leasing & Finance plc (Sri Lanka) | 1,292,382 | ||||||
|
| |||||||
4,600,511 | ||||||||
|
| |||||||
Distillers & Vintners 1.8% | ||||||||
1,104,832 | Distell Group Ltd. (South Africa) | 11,755,722 | ||||||
2,859,925 | Distilleries Co. of Sri Lanka plc (Sri Lanka) | 4,073,434 | ||||||
955,465 | Thai Beverage Public Co. Ltd. (Thailand) | 506,869 | ||||||
|
| |||||||
16,336,025 | ||||||||
|
|
Shares | Value | |||||||
Diversified Banks 4.8% | ||||||||
65,966 | Banco Macro S.A. ADR (Argentina) | $ | 4,252,828 | |||||
4,842,070 | Bank for Foreign Trade of Vietnam JSC (Vietnam) | 8,905,256 | ||||||
453,616 | BLOM Bank SAL GDR (Lebanon) | 4,944,414 | ||||||
8,182,416 | Commercial Bank of Ceylon plc (Sri Lanka) | 7,039,120 | ||||||
992,127 | Hatton National Bank plc (Sri Lanka) | 1,359,078 | ||||||
9,370,595 | KCB Group Ltd. (Kenya) | 3,879,399 | ||||||
2,196,427 | MCB Bank Ltd. (Pakistan) | 4,320,500 | ||||||
722 | Military Commercial Joint Stock Bank (Vietnam) | 463 | ||||||
5,566,100 | PT Bank Rakyat Indonesia Persero Tbk (Indonesia) | 4,795,829 | ||||||
519,400 | Public Bank Berhad (Malaysia) | 2,500,149 | ||||||
109,286,227 | Stanbic Bank Uganda Ltd. (Uganda) | 940,445 | ||||||
|
| |||||||
42,937,481 | ||||||||
|
| |||||||
Electronic Components 0.1% | ||||||||
246,582 | Delta Electronics Thailand Public Co. Ltd. (Thailand) | 609,796 | ||||||
|
| |||||||
Food Retail 3.4% | ||||||||
103,542 | BIM Birlesik Magazalar A.S. (Turkey) | 2,240,065 | ||||||
987,600 | Cargills Ceylon plc (Sri Lanka) | 1,014,658 | ||||||
210,656 | Magnit PJSC GDR (Russia) | 8,415,707 | ||||||
2,594,138 | Philippine Seven Corp. (Philippines) | 5,633,919 | ||||||
1,169,140 | Shoprite Holdings Ltd. (South Africa) | 13,756,872 | ||||||
|
| |||||||
31,061,221 | ||||||||
|
| |||||||
Footwear 0.1% | ||||||||
71,514 | Bata Shoe Co. Bangladesh Ltd. (Bangladesh) | 1,068,899 | ||||||
|
| |||||||
Health Care Facilities 2.4% | ||||||||
3,734,200 | Bangkok Dusit Medical Services Public Co. Ltd., Class F (Thailand) | 2,483,806 | ||||||
727,800 | Bumrungrad Hospital Public Co. Ltd. (Thailand) | 4,385,833 | ||||||
2,853,681 | IHH Healthcare Berhad (Malaysia) | 4,798,192 | ||||||
653,429 | NMC Health plc (United Arab Emirates) | 9,928,105 | ||||||
|
| |||||||
21,595,936 | ||||||||
|
| |||||||
Hotels, Resorts & Cruise Lines 0.7% | ||||||||
5,403,866 | Central Plaza Hotel Public Co. Ltd. (Thailand) | 6,566,665 | ||||||
|
| |||||||
Household Products 1.7% | ||||||||
23,907 | Colgate Palmolive Pakistan Ltd. (Pakistan) | 336,702 | ||||||
930,500 | Kimberly-Clark de Mexico S.A.B. de C.V. (Mexico) | 2,241,050 | ||||||
1,562,219 | PT Unilever Indonesia Tbk (Indonesia) | 5,057,183 | ||||||
975,070 | Unilever Ghana Ltd.* (Ghana) | 2,212,023 | ||||||
35,770,859 | Unilever Nigeria plc (Nigeria) | 5,212,315 | ||||||
|
| |||||||
15,059,273 | ||||||||
|
| |||||||
Hypermarkets & Super Centers 2.0% | ||||||||
218,480 | PriceSmart, Inc. (Costa Rica) | 18,479,038 | ||||||
|
| |||||||
Industrial Conglomerates 0.2% | ||||||||
3,603,598 | Hemas Holdings plc (Sri Lanka) | 1,974,574 | ||||||
|
| |||||||
Industrial Gases 0.2% | ||||||||
99,525 | Linde Bangladesh Ltd. (Bangladesh) | 1,368,159 | ||||||
|
| |||||||
Integrated Telecommunication Services 1.3% | ||||||||
282,307 | Sonatel (Senegal) | 12,004,536 | ||||||
|
| |||||||
Internet Software & Services 0.3% | ||||||||
22,244 | MercadoLibre, Inc. (Brazil) | 2,621,455 | ||||||
|
| |||||||
Life & Health Insurance 0.2% | ||||||||
3,242,849 | Enterprise Group Ltd. (Ghana) | 2,071,703 | ||||||
|
|
56
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
Marine Ports & Services 1.5% | ||||||||
404,230 | DP World Ltd. (United Arab Emirates) | $ | 7,595,482 | |||||
3,791,066 | International Container Terminal Services, Inc. (Philippines) | 5,574,007 | ||||||
|
| |||||||
13,169,489 | ||||||||
|
| |||||||
Multi-Line Insurance 0.8% | ||||||||
2,821,700 | Bao Viet Holdings (Vietnam) | 6,328,668 | ||||||
1,824 | Wafa Assurance (Morocco) | 609,136 | ||||||
|
| |||||||
6,937,804 | ||||||||
|
| |||||||
Multi-Sector Holdings 0.5% | ||||||||
277,419 | Remgro Ltd. (South Africa) | 4,718,017 | ||||||
|
| |||||||
Oil & Gas Refining & Marketing 0.1% | ||||||||
116,955 | Attock Petroleum Ltd. (Pakistan) | 480,193 | ||||||
|
| |||||||
Packaged Foods & Meats 20.5% | ||||||||
6,958,306 | Agthia Group PJSC (United Arab Emirates) | 14,530,017 | ||||||
110,901 | Alicorp S.A.* (Peru) | 200,750 | ||||||
26,099,415 | Cadbury Nigeria plc (Nigeria) | 1,940,867 | ||||||
3,151 | Delice Holding (Tunisia) | 17,669 | ||||||
97,300 | Dutch Lady Milk Industries Berhad (Malaysia) | 1,302,321 | ||||||
134,189 | Edita Food Industries-REG S GDR* (Egypt) | 2,093,348 | ||||||
1,556,400 | Engro Foods Ltd.* (Pakistan) | 2,359,938 | ||||||
1,539,172 | FAN Milk Ltd. (Ghana) | 2,949,912 | ||||||
299,488 | Gruma S.A.B. de C.V. (Mexico) | 4,734,747 | ||||||
1,624,544 | Grupo Bimbo S.A.B. de C.V.* (Mexico) | 4,790,932 | ||||||
535,657 | Grupo Herdez S.A.B. de C.V. (Mexico) | 1,178,209 | ||||||
1,852,228 | Grupo Lala S.A.B. de C.V. (Mexico) | 5,018,861 | ||||||
337,701 | Grupo Nutresa S.A. (Colombia) | 2,868,393 | ||||||
14,062,916 | Juhayna Food Industries (Egypt) | 11,719,163 | ||||||
345,022 | National Foods Holdings (Zimbabwe) | 724,546 | ||||||
436,962 | Nestlé Lanka plc (Sri Lanka) | 6,098,463 | ||||||
69,400 | Nestlé Malaysia Berhad (Malaysia) | 1,367,900 | ||||||
5,788,168 | Nestlé Nigeria plc (Nigeria) | 20,358,344 | ||||||
2,818,740 | Olympic Industries Ltd. (Bangladesh) | 10,480,554 | ||||||
9,881,371 | PT Indofood CBP Sukses Makmur Tbk (Indonesia) | 11,327,062 | ||||||
21,715 | Rafhan Maize Products Co. Ltd. (Pakistan) | 1,554,863 | ||||||
1,333,933 | Ulker Biskuvi Sanayi A.S. (Turkey) | 9,879,585 | ||||||
3,430,589 | Universal Robina Corp. (Philippines) | 16,152,714 | ||||||
8,568,700 | Vietnam Dairy Products JSC (Vietnam) | 51,505,217 | ||||||
|
| |||||||
185,154,375 | ||||||||
|
| |||||||
Personal Products 0.7% | ||||||||
393,052 | Marico Bangladesh Ltd. (Bangladesh) | 6,471,850 | ||||||
|
| |||||||
Pharmaceuticals 10.4% | ||||||||
2,196,670 | Abbott Laboratories Pakistan Ltd. (Pakistan) | 14,011,034 | ||||||
946,563 | DHG Pharmaceutical JSC (Vietnam) | 3,566,649 | ||||||
1,140,542 | Egyptian International Pharmaceutical Industrial Co. (Egypt) | 7,706,408 | ||||||
48,471 | GlaxoSmithKline Bangladesh Ltd. (Bangladesh) | 1,113,636 | ||||||
3,195,606 | GlaxoSmithKline Consumer Nigeria plc (Nigeria) | 381,186 | ||||||
1,854,050 | GlaxoSmithKline Pakistan Ltd. (Pakistan) | 4,306,289 | ||||||
17,937 | Krka dd Novo mesto (Slovenia) | 1,255,908 | ||||||
14,440,784 | PT Kalbe Farma Tbk (Indonesia) | 1,573,675 | ||||||
761,707 | Richter Gedeon Nyrt (Hungary) | 15,192,913 | ||||||
2,546,696 | Searle Company Ltd. (The) (Pakistan) | 10,698,895 | ||||||
10,698,611 | Square Pharmaceuticals Ltd. (Bangladesh) | 34,344,255 | ||||||
|
| |||||||
94,150,848 | ||||||||
|
| |||||||
Restaurants 3.4% | ||||||||
2,169,322 | Jollibee Foods Corp. (Philippines) | 10,694,670 | ||||||
2,484,305 | Kuwait Foods Americana (Kuwait) | 20,222,999 | ||||||
|
| |||||||
30,917,669 | ||||||||
|
|
Shares | Value | |||||||
Soft Drinks 3.7% | ||||||||
661,900 | Arca Continental S.A.B. de C.V. (Mexico) | $ | 4,580,394 | |||||
1,014,387 | Coca-Cola Icecek A.S. (Turkey) | 14,767,007 | ||||||
480,500 | Fomento Economico Mexicano S.A.B. de C.V.** (Mexico) | 4,616,815 | ||||||
755,830 | Societe Frigorifique et Brasserie de Tunis (Tunisia) | 9,775,654 | ||||||
|
| |||||||
33,739,870 | ||||||||
|
| |||||||
Specialty Chemicals 0.7% | ||||||||
3,531,892 | Akzo Nobel Pakistan Ltd.‡‡ (Pakistan) | 6,480,700 | ||||||
|
| |||||||
Steel 0.7% | ||||||||
4,877,505 | Hoa Phat Group JSC (Vietnam) | 6,454,331 | ||||||
|
| |||||||
Technology Distributors 1.9% | ||||||||
8,174,792 | FPT Corp. (Vietnam) | 17,271,462 | ||||||
|
| |||||||
Tobacco 5.9% | ||||||||
479,213 | British American Tobacco Bangladesh Co. Ltd. (Bangladesh) | 15,886,910 | ||||||
1,241,941 | British American Tobacco Kenya Ltd. (Kenya) | 10,405,617 | ||||||
1,107,059 | Ceylon Tobacco Co. plc (Sri Lanka) | 7,674,345 | ||||||
492,709 | Eastern Co. (Egypt) | 10,819,684 | ||||||
288,345 | Pakistan Tobacco Co. Ltd. (Pakistan) | 3,633,400 | ||||||
479,700 | PT Gudang Garam Tbk (Indonesia) | 2,362,324 | ||||||
293,100 | PT Hanjaya Mandala Sampoerna Tbk (Indonesia) | 2,175,041 | ||||||
|
| |||||||
52,957,321 | ||||||||
|
| |||||||
Wireless Telecommunication Services 1.6% | ||||||||
86,529,438 | Safaricom Ltd. (Kenya) | 14,329,173 | ||||||
|
| |||||||
Total Common Stocks (cost $868,703,444) | 864,109,087 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 0.8% | ||||||||
Repurchase Agreement 0.8% | ||||||||
$ 7,554,746 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $7,405,000 of United States Treasury Notes 2.125% due 12/31/22; value: $7,710,456; repurchase proceeds: $7,554,752 (cost $7,554,746) | $ | 7,554,746 | |||||
|
| |||||||
Total Short-Term Investments (cost $7,554,746) | 7,554,746 | |||||||
|
| |||||||
Total Investments (cost $876,258,190) 96.4% | 871,663,833 | |||||||
Other Assets less Liabilities 3.6% | 32,479,563 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 904,143,396 | ||||||
|
| |||||||
*Non-income producing.
**Common units.
‡‡Affiliated company (see Note 8).
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
See Notes to Financial Statements. |
|
57
Table of Contents
WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND (WAFMX / WIFMX) — Schedule of Investments (continued) | (UNAUDITED) | |
| ||
|
At March 31, 2016, Wasatch Frontier Emerging Small Countries Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 0.5 | |||
Bangladesh | 9.0 | |||
Botswana | 0.4 | |||
Brazil | 0.8 | |||
Colombia | 0.3 | |||
Costa Rica | 2.7 | |||
Egypt | 3.7 | |||
Ghana | 0.9 | |||
Hungary | 1.8 | |||
Indonesia | 3.9 | |||
Kenya | 7.5 | |||
Kuwait | 2.3 | |||
Lebanon | 0.6 | |||
Malaysia | 1.8 | |||
Mauritius | 0.2 | |||
Mexico | 3.1 | |||
Morocco | 1.7 | |||
Namibia | < 0.1 | |||
Nigeria | 5.4 | |||
Pakistan | 9.4 | |||
Peru | < 0.1 | |||
Philippines | 4.4 | |||
Russia | 1.0 | |||
Senegal | 1.4 | |||
Slovenia | 0.1 | |||
South Africa | 3.5 | |||
Sri Lanka | 6.1 | |||
Tanzania, United Republic of | 3.6 | |||
Thailand | 3.4 | |||
Tunisia | 1.1 | |||
Turkey | 3.1 | |||
Uganda | 0.1 | |||
United Arab Emirates | 4.1 | |||
Vietnam | 10.9 | |||
Zambia | 0.7 | |||
Zimbabwe | 0.5 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
58
Table of Contents
WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.6% | ||||||||
Advertising 1.0% | ||||||||
38,362 | REA Group Ltd. (Australia) | $ | 1,588,413 | |||||
|
| |||||||
Air Freight & Logistics 0.8% | ||||||||
48,396 | Echo Global Logistics, Inc.* | 1,314,435 | ||||||
|
| |||||||
Airlines 3.4% | ||||||||
17,312 | Allegiant Travel Co. | 3,082,575 | ||||||
47,010 | Spirit Airlines, Inc.* | 2,255,540 | ||||||
|
| |||||||
5,338,115 | ||||||||
|
| |||||||
Airport Services 2.0% | ||||||||
529,725 | Grupo Aeroportuario del Centro Norte S.A.B. de C.V.* (Mexico) | 3,029,664 | ||||||
|
| |||||||
Application Software 5.5% | ||||||||
49,218 | Aveva Group plc (United Kingdom) | 1,114,288 | ||||||
35,345 | Globant S.A.* (Argentina) | 1,090,747 | ||||||
27,950 | HubSpot, Inc.* | 1,219,179 | ||||||
7,805 | Tyler Technologies, Inc.* | 1,003,801 | ||||||
15,239 | Ultimate Software Group, Inc.* | 2,948,747 | ||||||
58,340 | Zendesk, Inc.* | 1,221,056 | ||||||
|
| |||||||
8,597,818 | ||||||||
|
| |||||||
Asset Management & Custody Banks 0.7% | ||||||||
89,796 | WisdomTree Investments, Inc. | 1,026,368 | ||||||
|
| |||||||
Auto Parts & Equipment 1.4% | ||||||||
75,636 | Cub Elecparts, Inc. (Taiwan) | 922,419 | ||||||
26,820 | Linamar Corp. (Canada) | 1,289,762 | ||||||
|
| |||||||
2,212,181 | ||||||||
|
| |||||||
Biotechnology 5.3% | ||||||||
174,231 | Abcam plc (United Kingdom) | 1,477,646 | ||||||
8,004 | Medytox, Inc. (Korea) | 3,090,037 | ||||||
226,887 | Sangamo BioSciences, Inc.* | 1,372,666 | ||||||
64,394 | Seattle Genetics, Inc.* | 2,259,586 | ||||||
|
| |||||||
8,199,935 | ||||||||
|
| |||||||
Building Products 2.5% | ||||||||
312,800 | Somany Ceramics Ltd. (India) | 1,842,153 | ||||||
41,251 | Trex Co., Inc.* | 1,977,161 | ||||||
|
| |||||||
3,819,314 | ||||||||
|
| |||||||
Consumer Finance 7.4% | ||||||||
201,602 | Arrow Global Group plc (United Kingdom) | 725,207 | ||||||
7,648 | Bajaj Finance Ltd. (India) | 798,263 | ||||||
7,440 | Credit Acceptance Corp.* | 1,350,732 | ||||||
838,212 | Credito Real S.A.B. de C.V. (Mexico) | 1,768,246 | ||||||
34,114 | PRA Group, Inc.* | 1,002,611 | ||||||
1,828,450 | Srisawad Power 1979 Public Co. Ltd. (Thailand) | 2,195,907 | ||||||
1,282,617 | Unifin Financiera SAPI de C.V. SOFOM (Mexico) | 3,582,735 | ||||||
|
| |||||||
11,423,701 | ||||||||
|
| |||||||
Department Stores 1.6% | ||||||||
237,057 | Poya Co. Ltd. (Taiwan) | 2,519,062 | ||||||
|
| |||||||
Diversified Chemicals 0.5% | ||||||||
80,910 | Pidilite Industries Ltd. (India) | 720,856 | ||||||
|
| |||||||
Diversified Real Estate Activities 3.2% | ||||||||
174,854 | Patrizia Immobilien AG* (Germany) | 4,908,101 | ||||||
|
| |||||||
Diversified Support Services 1.2% | ||||||||
44,576 | Copart, Inc.* | 1,817,364 | ||||||
|
| |||||||
Drug Retail 1.9% | ||||||||
27,490 | Ain Holdings, Inc. (Japan) | 1,409,681 | ||||||
9,470 | Cosmos Pharmaceutical Corp. (Japan) | 1,574,686 | ||||||
|
| |||||||
2,984,367 | ||||||||
|
|
Shares | Value | |||||||
Electrical Components & Equipment 2.0% | ||||||||
195,086 | Voltronic Power Technology Corp. (Taiwan) | $ | 3,073,223 | |||||
|
| |||||||
Electronic Equipment & Instruments 1.1% | ||||||||
59,105 | Ai Holdings Corp. (Japan) | 1,715,054 | ||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 0.6% | ||||||||
126,151 | UPL Ltd. (India) | 910,569 | ||||||
|
| |||||||
General Merchandise Stores 1.3% | ||||||||
32,692 | Seria Co. Ltd. (Japan) | 1,972,793 | ||||||
|
| |||||||
Health Care Equipment 1.4% | ||||||||
49,595 | DIO Corp.* (Korea) | 2,168,372 | ||||||
|
| |||||||
Health Care Facilities 1.5% | ||||||||
32,039 | Apollo Hospitals Enterprise Ltd. (India) | 648,351 | ||||||
77,162 | Ensign Group, Inc. (The) | 1,746,948 | ||||||
|
| |||||||
2,395,299 | ||||||||
|
| |||||||
Health Care Services 2.0% | ||||||||
112,496 | Dr. Lal PathLabs Ltd.* (India) | 1,566,340 | ||||||
50,769 | ExamWorks Group, Inc.* | 1,500,731 | ||||||
|
| |||||||
3,067,071 | ||||||||
|
| |||||||
Health Care Supplies 1.8% | ||||||||
7,274 | Sartorius Stedim Biotech (France) | 2,770,558 | ||||||
|
| |||||||
Health Care Technology 1.0% | ||||||||
60,280 | M3, Inc. (Japan) | 1,517,179 | ||||||
|
| |||||||
Highways & Railtracks 1.1% | ||||||||
125,003 | Promotora y Operadora de Infraestructura S.A.B. de C.V. (Mexico) | 1,651,728 | ||||||
|
| |||||||
Homefurnishing Retail 0.7% | ||||||||
26,297 | Mattress Firm Holding Corp.* | 1,114,730 | ||||||
|
| |||||||
Industrial Machinery 0.5% | ||||||||
20,864 | Max Ventures & Industries Ltd.* *** (India) | 22,032 | ||||||
266,582 | Rotork plc (United Kingdom) | 700,487 | ||||||
|
| |||||||
722,519 | ||||||||
|
| |||||||
Internet Retail 2.8% | ||||||||
80,325 | MakeMyTrip Ltd.* (India) | 1,453,079 | ||||||
32,178 | Wayfair, Inc., Class A* | 1,390,733 | ||||||
50,017 | Yoox Net-A-Porter Group S.p.A.* (Italy) | 1,535,789 | ||||||
|
| |||||||
4,379,601 | ||||||||
|
| |||||||
Internet Software & Services 12.5% | ||||||||
276,110 | Auto Trader Group plc (United Kingdom) | 1,547,889 | ||||||
16,401 | Cimpress N.V.* | 1,487,407 | ||||||
102,134 | Cornerstone OnDemand, Inc.* | 3,346,931 | ||||||
62,170 | Dip Corp. (Japan) | 1,464,188 | ||||||
65,635 | Envestnet, Inc.* | 1,785,272 | ||||||
79,898 | Gurunavi, Inc. (Japan) | 1,898,039 | ||||||
19,315 | MercadoLibre, Inc. (Brazil) | 2,276,273 | ||||||
51,939 | Rightmove plc (United Kingdom) | 3,143,922 | ||||||
84,415 | SMS Co. Ltd. (Japan) | 1,613,728 | ||||||
19,645 | SPS Commerce, Inc.* | 843,556 | ||||||
|
| |||||||
19,407,205 | ||||||||
|
| |||||||
IT Consulting & Other Services 1.5% | ||||||||
20,892 | Luxoft Holding, Inc.* | 1,149,687 | ||||||
336,410 | NCC Group plc (United Kingdom) | 1,211,350 | ||||||
|
| |||||||
2,361,037 | ||||||||
|
|
59
Table of Contents
WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX / WIGOX) — Schedule of Investments (continued) | (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
Life & Health Insurance 0.5% | ||||||||
104,322 | Max Financial Services Ltd. (India) | $ | 537,974 | |||||
104,322 | Max India Ltd.* *** (India) | 161,565 | ||||||
|
| |||||||
699,539 | ||||||||
|
| |||||||
Life Sciences Tools & Services 1.3% | ||||||||
69,631 | Fluidigm Corp.* | 561,922 | ||||||
5,995 | Syngene International Ltd. (India) | 34,763 | ||||||
9,341 | Tecan Group AG (Switzerland) | 1,422,102 | ||||||
|
| |||||||
2,018,787 | ||||||||
|
| |||||||
Managed Health Care 1.1% | ||||||||
71,290 | HealthEquity, Inc.* | 1,758,724 | ||||||
|
| |||||||
Packaged Foods & Meats 2.2% | ||||||||
42,200 | Calbee, Inc. (Japan) | 1,676,448 | ||||||
240,825 | Manpasand Beverages Ltd. (India) | 1,719,932 | ||||||
|
| |||||||
3,396,380 | ||||||||
|
| |||||||
Pharmaceuticals 4.1% | ||||||||
52,593 | Caplin Point Laboratories Ltd. (India) | 802,128 | ||||||
22,785 | Intra-Cellular Therapies, Inc.* | 633,423 | ||||||
34,801 | Ipsen S.A. (France) | 1,999,668 | ||||||
48,643 | Lupin Ltd. (India) | 1,087,485 | ||||||
1,320,132 | Marksans Pharma Ltd. (India) | 920,988 | ||||||
108,370 | Natco Pharma Ltd. (India) | 675,364 | ||||||
65,101 | TWi Pharmaceuticals, Inc.* (Taiwan) | 256,892 | ||||||
|
| |||||||
6,375,948 | ||||||||
|
| |||||||
Publishing 0.8% | ||||||||
98,332 | Next Co. Ltd. (Japan) | 1,206,865 | ||||||
|
| |||||||
Regional Banks 3.9% | ||||||||
23,021 | Eagle Bancorp, Inc.* | 1,105,008 | ||||||
52,000 | Metro Bank plc* (United Kingdom) | 1,405,252 | ||||||
18,367 | Signature Bank* | 2,500,116 | ||||||
27,288 | Texas Capital Bancshares, Inc.* | 1,047,313 | ||||||
|
| |||||||
6,057,689 | ||||||||
|
| |||||||
Restaurants 3.0% | ||||||||
49,332 | Domino’s Pizza Enterprises Ltd. (Australia) | 2,173,064 | ||||||
39,642 | Fiesta Restaurant Group, Inc.* | 1,299,465 | ||||||
30,615 | Zoe’s Kitchen, Inc.* | 1,193,679 | ||||||
|
| |||||||
4,666,208 | ||||||||
|
| |||||||
Semiconductors 2.1% | ||||||||
24,909 | Cavium, Inc.* | 1,523,434 | ||||||
9,023 | U-Blox AG* (Switzerland) | 1,737,561 | ||||||
|
| |||||||
3,260,995 | ||||||||
|
| |||||||
Specialized Finance 1.1% | ||||||||
49,629 | Banca IFIS S.p.A. (Italy) | 1,644,791 | ||||||
|
| |||||||
Specialty Chemicals 1.8% | ||||||||
54,343 | Frutarom Industries Ltd. (Israel) | 2,850,107 | ||||||
|
| |||||||
Systems Software 0.8% | ||||||||
32,027 | FleetMatics Group plc* | 1,303,819 | ||||||
|
| |||||||
Trading Companies & Distributors 2.0% | ||||||||
103,800 | MISUMI Group, Inc. (Japan) | 1,486,152 | ||||||
53,600 | MonotaRO Co. Ltd. (Japan) | 1,593,423 | ||||||
|
| |||||||
3,079,575 | ||||||||
|
| |||||||
Trucking 2.7% | ||||||||
106,508 | Knight Transportation, Inc. | 2,785,184 | ||||||
20,192 | Old Dominion Freight Line, Inc.* | 1,405,767 | ||||||
|
| |||||||
4,190,951 | ||||||||
|
| |||||||
Total Common Stocks (cost $129,018,602) | 151,237,010 | |||||||
|
|
Shares | Value | |||||||
WARRANTS 0.0% | ||||||||
Consumer Finance 0.0% | ||||||||
96,800 | Srisawad Power 1979 Public Co. Ltd., expiring 5/29/20* (Thailand) | $ | 29,992 | |||||
|
| |||||||
Total Warrants (cost $0) | 29,992 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 2.4% | ||||||||
Repurchase Agreement 2.4% | ||||||||
$3,672,663 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $3,435,000 of United States Treasury Notes 2.750% due 11/15/23; value $3,748,444; repurchase proceeds: $3,672,666 (cost $3,672,663) | $ | 3,672,663 | |||||
|
| |||||||
Total Short-Term Investments (cost $3,672,663) | 3,672,663 | |||||||
|
| |||||||
Total Investments (cost $132,691,265) 100.0% | 154,939,665 | |||||||
Other Assets less Liabilities <0.1% | 63,946 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 155,003,611 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Global Opportunities Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 0.7 | |||
Australia | 2.5 | |||
Brazil | 1.5 | |||
Canada | 0.8 | |||
France | 3.2 | |||
Germany | 3.2 | |||
India | 9.2 | |||
Israel | 1.9 | |||
Italy | 2.1 | |||
Japan | 12.6 | |||
Korea | 3.5 | |||
Mexico | 6.6 | |||
Switzerland | 2.1 | |||
Taiwan | 4.5 | |||
Thailand | 1.5 | |||
United Kingdom | 7.5 | |||
United States | 36.6 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
60
Table of Contents
WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 95.0% | ||||||||
Advertising 1.0% | ||||||||
351,631 | REA Group Ltd. (Australia) | $ | 14,559,592 | |||||
|
| |||||||
Airport Services 1.3% | ||||||||
3,123,800 | Grupo Aeroportuario del Centro Norte S.A.B. de C.V.* (Mexico) | 17,865,993 | ||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 1.3% | ||||||||
527,025 | Moncler S.p.A. (Italy) | 8,910,264 | ||||||
222,091 | Ted Baker plc (United Kingdom) | 8,693,038 | ||||||
|
| |||||||
17,603,302 | ||||||||
|
| |||||||
Application Software 2.0% | ||||||||
607,861 | Aveva Group plc (United Kingdom) | 13,761,882 | ||||||
891,526 | Computer Modelling Group Ltd. (Canada) | 6,956,846 | ||||||
2,050,431 | Technology One Ltd. (Australia) | 7,495,328 | ||||||
|
| |||||||
28,214,056 | ||||||||
|
| |||||||
Asset Management & Custody Banks 0.1% | ||||||||
1,829,699 | ARA Asset Management Ltd. (Singapore) | 1,588,327 | ||||||
|
| |||||||
Auto Parts & Equipment 1.6% | ||||||||
588,334 | ARB Corp. Ltd. (Australia) | 6,781,080 | ||||||
326,269 | Linamar Corp. (Canada) | 15,690,138 | ||||||
|
| |||||||
22,471,218 | ||||||||
|
| |||||||
Biotechnology 4.0% | ||||||||
3,345,897 | Abcam plc (United Kingdom) | 28,376,417 | ||||||
71,085 | Medytox, Inc. (Korea) | 27,443,186 | ||||||
|
| |||||||
55,819,603 | ||||||||
|
| |||||||
Consumer Finance 2.0% | ||||||||
1,476,191 | Arrow Global Group plc (United Kingdom) | 5,310,185 | ||||||
7,988,690 | Gentera S.A.B. de C.V. (Mexico) | 15,718,554 | ||||||
291,067 | Shriram City Union Finance Ltd. (India) | 6,614,909 | ||||||
|
| |||||||
27,643,648 | ||||||||
|
| |||||||
Diversified Banks 0.4% | ||||||||
152,623 | Secure Trust Bank plc (United Kingdom) | 6,235,008 | ||||||
|
| |||||||
Diversified Real Estate Activities 3.6% | ||||||||
1,769,716 | Patrizia Immobilien AG* (Germany) | 49,675,411 | ||||||
|
| |||||||
Diversified Support Services 0.2% | ||||||||
37,948 | KEPCO Plant Service & Engineering Co. Ltd. (Korea) | 2,127,026 | ||||||
|
| |||||||
Drug Retail 5.2% | ||||||||
330,928 | Ain Holdings, Inc. (Japan) | 16,969,913 | ||||||
158,237 | Cosmos Pharmaceutical Corp. (Japan) | 26,311,894 | ||||||
1,014,500 | Raia Drogasil S.A. (Brazil) | 14,791,397 | ||||||
280,573 | Sugi Holdings Co. Ltd. (Japan) | 14,811,621 | ||||||
|
| |||||||
72,884,825 | ||||||||
|
| |||||||
Electrical Components & Equipment 2.6% | ||||||||
1,458,482 | Amara Raja Batteries Ltd. (India) | 19,436,149 | ||||||
1,080,309 | Voltronic Power Technology Corp. (Taiwan) | 17,018,290 | ||||||
|
| |||||||
36,454,439 | ||||||||
|
| |||||||
Electronic Equipment & Instruments 3.6% | ||||||||
1,076,513 | Ai Holdings Corp. (Japan) | 31,237,246 | ||||||
1,466,265 | Halma plc (United Kingdom) | 19,211,538 | ||||||
|
| |||||||
50,448,784 | ||||||||
|
| |||||||
Food Retail 0.9% | ||||||||
878,482 | Eurocash S.A. (Poland) | 12,569,264 | ||||||
|
|
Shares | Value | |||||||
Forest Products 1.0% | ||||||||
376,181 | Stella-Jones, Inc. (Canada) | $ | 13,461,400 | |||||
|
| |||||||
General Merchandise Stores 3.0% | ||||||||
1,475,176 | B&M European Value Retail S.A. (United Kingdom) | 5,627,788 | ||||||
60,199 | Ryohin Keikaku Co. Ltd. (Japan) | 12,733,169 | ||||||
382,463 | Seria Co. Ltd. (Japan) | 23,079,664 | ||||||
|
| |||||||
41,440,621 | ||||||||
|
| |||||||
Health Care Supplies 2.1% | ||||||||
78,649 | Sartorius Stedim Biotech (France) | 29,956,228 | ||||||
|
| |||||||
Health Care Technology 2.5% | ||||||||
1,366,760 | EMIS Group plc (United Kingdom) | 19,921,553 | ||||||
595,460 | M3, Inc. (Japan) | 14,987,049 | ||||||
|
| |||||||
34,908,602 | ||||||||
|
| |||||||
Highways & Railtracks 1.1% | ||||||||
1,194,395 | Promotora y Operadora de Infraestructura S.A.B. de C.V. (Mexico) | 15,782,148 | ||||||
|
| |||||||
Home Improvement Retail 0.3% | ||||||||
17,148,384 | Home Product Center Public Co. Ltd. (Thailand) | 4,021,437 | ||||||
|
| |||||||
Hotels, Resorts & Cruise Lines 1.7% | ||||||||
778,726 | Corporate Travel Management Ltd. (Australia) | 8,002,774 | ||||||
15,299,135 | Minor International Public Co. Ltd. (Thailand) | 16,090,619 | ||||||
|
| |||||||
24,093,393 | ||||||||
|
| |||||||
Household Products 0.5% | ||||||||
274,384 | Pigeon Corp. (Japan) | 7,161,978 | ||||||
|
| |||||||
Industrial Machinery 2.0% | ||||||||
165,185 | KUKA AG (Germany) | 17,307,443 | ||||||
311,092 | Max Ventures & Industries Ltd.* *** (India) | 328,508 | ||||||
3,667,426 | Rotork plc (United Kingdom) | 9,636,749 | ||||||
|
| |||||||
27,272,700 | ||||||||
|
| |||||||
Internet Retail 0.9% | ||||||||
426,695 | Yoox Net-A-Porter Group S.p.A.* (Italy) | 13,101,813 | ||||||
|
| |||||||
Internet Software & Services 10.3% | ||||||||
5,156,119 | Auto Trader Group plc (United Kingdom) | 28,905,502 | ||||||
644,511 | carsales.com Ltd. (Australia) | 5,808,510 | ||||||
560,144 | Dip Corp. (Japan) | 13,192,158 | ||||||
736,034 | Gurunavi, Inc. (Japan) | 17,485,059 | ||||||
766,757 | Infomart Corp. (Japan) | 6,896,179 | ||||||
763,168 | Kakaku.com, Inc. (Japan) | 14,175,446 | ||||||
479,348 | Rightmove plc (United Kingdom) | 29,015,439 | ||||||
758,955 | SMS Co. Ltd. (Japan) | 14,508,640 | ||||||
75,242 | XING AG (Germany) | 13,804,591 | ||||||
|
| |||||||
143,791,524 | ||||||||
|
| |||||||
Investment Banking & Brokerage 2.5% | ||||||||
255,437 | Avanza Bank Holding AB (Sweden) | 11,394,936 | ||||||
391,782 | Nihon M&A Center, Inc. (Japan) | 22,806,364 | ||||||
|
| |||||||
34,201,300 | ||||||||
|
| |||||||
IT Consulting & Other Services 0.7% | ||||||||
2,808,486 | NCC Group plc (United Kingdom) | 10,112,836 | ||||||
|
| |||||||
Life & Health Insurance 0.9% | ||||||||
1,929,183 | Max Financial Services Ltd. (India) | 9,948,522 | ||||||
1,555,458 | Max India Ltd.* *** (India) | 2,408,966 | ||||||
|
| |||||||
12,357,488 | ||||||||
|
|
61
Table of Contents
WASATCH INTERNATIONAL GROWTH FUND (WAIGX / WIIGX) — Schedule of Investments (continued) | ||
| ||
|
Shares | Value | |||||||
Life Sciences Tools & Services 2.4% | ||||||||
672,566 | Divi’s Laboratories Ltd. (India) | $ | 10,044,438 | |||||
153,523 | Tecan Group AG (Switzerland) | 23,372,803 | ||||||
|
| |||||||
33,417,241 | ||||||||
|
| |||||||
Movies & Entertainment 1.8% | ||||||||
711,588 | CTS Eventim AG & Co KGaA (Germany) | 25,296,705 | ||||||
|
| |||||||
Multi-Sector Holdings 1.6% | ||||||||
748,981 | GT Capital Holdings, Inc. (Philippines) | 22,610,133 | ||||||
|
| |||||||
Office Services & Supplies 0.9% | ||||||||
2,688,852 | Regus plc (United Kingdom) | 12,240,748 | ||||||
|
| |||||||
Oil & Gas Equipment & Services 1.2% | ||||||||
304,639 | Pason Systems, Inc. (Canada) | 3,868,208 | ||||||
223,197 | ShawCor Ltd. (Canada) | 4,848,860 | ||||||
502,358 | TGS-NOPEC Geophysical Co. ASA (Norway) | 7,671,350 | ||||||
|
| |||||||
16,388,418 | ||||||||
|
| |||||||
Packaged Foods & Meats 3.3% | ||||||||
391,577 | Calbee, Inc. (Japan) | 15,555,894 | ||||||
16,513,449 | Vitasoy International Holdings Ltd. (Hong Kong) | 30,785,675 | ||||||
|
| |||||||
46,341,569 | ||||||||
|
| |||||||
Pharmaceuticals 2.7% | ||||||||
1,027,700 | Glenmark Pharmaceuticals Ltd. (India) | 12,337,521 | ||||||
347,594 | Ipsen S.A. (France) | 19,972,778 | ||||||
1,489,732 | TWi Pharmaceuticals, Inc.* (Taiwan) | 5,878,572 | ||||||
|
| |||||||
38,188,871 | ||||||||
|
| |||||||
Property & Casualty Insurance 0.5% | ||||||||
5,374,656 | Qualitas Controladora S.A.B. de C.V.* ** (Mexico) | 6,264,475 | ||||||
|
| |||||||
Publishing 0.7% | ||||||||
832,405 | Next Co. Ltd. (Japan) | 10,216,418 | ||||||
|
| |||||||
Regional Banks 1.0% | ||||||||
234,000 | Metro Bank plc* (United Kingdom) | 6,323,633 | ||||||
1,620,046 | Shawbrook Group plc* (United Kingdom) | 6,995,524 | ||||||
|
| |||||||
13,319,157 | ||||||||
|
| |||||||
Restaurants 5.7% | ||||||||
732,000 | Create Restaurants Holdings, Inc. (Japan) | 6,863,313 | ||||||
1,185,616 | Domino’s Pizza Enterprises Ltd. (Australia) | 52,226,137 | ||||||
666,245 | Domino’s Pizza Group plc (United Kingdom) | 9,653,560 | ||||||
2,078,099 | Patisserie Holdings plc (United Kingdom) | 10,910,620 | ||||||
|
| |||||||
79,653,630 | ||||||||
|
| |||||||
Semiconductor Equipment 0.5% | ||||||||
308,538 | ISC Co. Ltd. (Korea) | 6,906,762 | ||||||
|
| |||||||
Semiconductors 2.1% | ||||||||
993,999 | Silergy Corp. (Taiwan) | 13,558,463 | ||||||
79,855 | U-Blox AG* (Switzerland) | 15,377,694 | ||||||
|
| |||||||
28,936,157 | ||||||||
|
| |||||||
Specialized Finance 1.2% | ||||||||
484,008 | Banca IFIS S.p.A. (Italy) | 16,040,859 | ||||||
|
| |||||||
Specialty Chemicals 5.1% | ||||||||
428,291 | Chr. Hansen Holding A/S (Denmark) | 28,766,937 | ||||||
434,361 | Frutarom Industries Ltd. (Israel) | 22,780,767 | ||||||
1,329,582 | Hexpol AB (Sweden) | 14,787,060 | ||||||
52,524 | SK Kaken Co. Ltd. (Japan) | 4,355,216 | ||||||
|
| |||||||
70,689,980 | ||||||||
|
| |||||||
Systems Software 0.1% | ||||||||
50,086 | Kinaxis, Inc.* (Canada) | 1,663,174 | ||||||
|
|
Shares | Value | |||||||
Technology Hardware, Storage & Peripherals 1.0% | ||||||||
1,118,500 | Ennoconn Corp. (Taiwan) | $ | 13,449,525 | |||||
|
| |||||||
Textiles 0.9% | ||||||||
978,258 | Eclat Textile Co. Ltd. (Taiwan) | 12,872,616 | ||||||
|
| |||||||
Trading Companies & Distributors 3.0% | ||||||||
1,518,215 | MISUMI Group, Inc. (Japan) | 21,736,975 | ||||||
433,412 | MonotaRO Co. Ltd. (Japan) | 12,884,493 | ||||||
435,930 | Richelieu Hardware Ltd. (Canada) | 7,564,909 | ||||||
|
| |||||||
42,186,377 | ||||||||
|
| |||||||
Total Common Stocks (cost $1,027,476,352) | 1,324,506,779 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 4.7% | ||||||||
Repurchase Agreement 4.7% | ||||||||
$66,237,225 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $64,890,000 of United States Treasury Notes 2.125% due 12/31/22; value: $67,566,713; repurchase proceeds: $66,237,280 (cost $66,237,225) | $ | 66,237,225 | |||||
|
| |||||||
Total Short-Term Investments (cost $66,237,225) | 66,237,225 | |||||||
|
| |||||||
Total Investments (cost $1,093,713,577) 99.7% | 1,390,744,004 | |||||||
Other Assets less Liabilities 0.3% | 4,336,233 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 1,395,080,237 | ||||||
|
| |||||||
*Non-income producing.
**Common units.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
See Notes to Financial Statements. |
|
62
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
At March 31, 2016, Wasatch International Growth Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Australia | 7.2 | |||
Brazil | 1.1 | |||
Canada | 4.1 | |||
Denmark | 2.2 | |||
France | 3.8 | |||
Germany | 8.0 | |||
Hong Kong | 2.3 | |||
India | 4.6 | |||
Israel | 1.7 | |||
Italy | 2.9 | |||
Japan | 23.3 | |||
Korea | 2.8 | |||
Mexico | 4.2 | |||
Norway | 0.6 | |||
Philippines | 1.7 | |||
Poland | 0.9 | |||
Singapore | 0.1 | |||
Sweden | 2.0 | |||
Switzerland | 2.9 | |||
Taiwan | 4.7 | |||
Thailand | 1.5 | |||
United Kingdom | 17.4 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
63
Table of Contents
WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.6% | ||||||||
Aerospace & Defense 0.4% | ||||||||
125,000 | Avon Rubber plc (United Kingdom) | $ | 1,445,537 | |||||
28,680 | ECA (France) | 554,107 | ||||||
|
| |||||||
1,999,644 | ||||||||
|
| |||||||
Air Freight & Logistics 2.3% | ||||||||
994,120 | Allcargo Global Logistics Ltd. (India) | 2,311,069 | ||||||
1,503,468 | Freightways Ltd. (New Zealand) | 6,597,945 | ||||||
12,834 | ID Logistics Group* (France) | 1,534,062 | ||||||
104,300 | Yusen Logistics Co. Ltd. (Japan) | 1,213,373 | ||||||
|
| |||||||
11,656,449 | ||||||||
|
| |||||||
Airport Services 0.1% | ||||||||
110,720 | Swissport Tanzania Ltd.* (Tanzania, United Republic of) | 369,657 | ||||||
|
| |||||||
Apparel Retail 0.5% | ||||||||
804,622 | Apranga PVA (Lithuania) | 2,409,243 | ||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 0.6% | ||||||||
117,976 | Delta-Galil Industries Ltd. (Israel) | 3,200,510 | ||||||
|
| |||||||
Application Software 2.2% | ||||||||
204,775 | Linx S.A. (Brazil) | 2,741,963 | ||||||
446,457 | Logo Yazilim Sanayi Ve Ticaret AS (Turkey) | 8,662,079 | ||||||
|
| |||||||
11,404,042 | ||||||||
|
| |||||||
Asset Management & Custody Banks 0.3% | ||||||||
923,100 | Peregrine Holdings Ltd. (South Africa) | 1,704,781 | ||||||
|
| |||||||
Auto Parts & Equipment 0.4% | ||||||||
450,000 | Hu Lane Associate, Inc. (Taiwan) | 2,146,253 | ||||||
|
| |||||||
Automobile Manufacturers 0.7% | ||||||||
966,600 | PAK Suzuki Motor Co. Ltd. (Pakistan) | 3,774,844 | ||||||
|
| |||||||
Brewers 4.2% | ||||||||
362,475 | Carlsberg Brewery Malaysia Berhad (Malaysia) | 1,298,834 | ||||||
17,933,940 | International Breweries plc (Nigeria) | 1,846,379 | ||||||
74,579 | Kopparbergs Bryggeri AB (Sweden) | 1,948,372 | ||||||
197,574 | Olvi Oyj, Class A (Finland) | 5,645,942 | ||||||
160,100 | Royal UNIBREW A/S (Denmark) | 7,729,927 | ||||||
1,227,502 | Turk Tuborg Bira ve Malt Sanayii A.S.* (Turkey) | 2,927,492 | ||||||
|
| |||||||
21,396,946 | ||||||||
|
| |||||||
Building Products 0.1% | ||||||||
1,111,666 | PT Surya Toto Indonesia Tbk (Indonesia) | 519,783 | ||||||
|
| |||||||
Cable & Satellite 0.1% | ||||||||
7,434,505 | Hum Network, Ltd. (Pakistan) | 667,991 | ||||||
|
| |||||||
Commodity Chemicals 4.7% | ||||||||
967,254 | Berger Paints India Ltd. (India) | 3,550,748 | ||||||
400,083 | Gulf Oil Lubricants India Ltd. (India) | 3,075,726 | ||||||
306,000 | Okamoto Industries, Inc. (Japan) | 2,583,541 | ||||||
141,954 | SAMHWA Paints Industrial Co. Ltd. (Korea) | 1,545,407 | ||||||
134,965 | Sniezka S.A. (Poland) | 2,135,217 | ||||||
480,857 | Supreme Industries Ltd. (India) | 5,351,165 | ||||||
155,700 | Tikkurila Oyj (Finland) | 2,829,140 | ||||||
1,273,500 | Yung Chi Paint & Varnish Manufacturing Co. Ltd. (Taiwan) | 3,070,582 | ||||||
|
| |||||||
24,141,526 | ||||||||
|
| |||||||
Construction Materials 0.2% | ||||||||
144,928 | Misr Cement Co. (Egypt) | 1,197,948 | ||||||
|
|
Shares | Value | |||||||
Department Stores 0.4% | ||||||||
195,251 | Poya Co. Ltd. (Taiwan) | $ | 2,074,815 | |||||
|
| |||||||
Distillers & Vintners 0.9% | ||||||||
2,015,680 | Capevin Holdings Ltd. (South Africa) | 1,213,076 | ||||||
39,621 | Laurent-Perrier (France) | 3,545,979 | ||||||
752 | Muhak Co. Ltd. (Korea) | 23,705 | ||||||
|
| |||||||
4,782,760 | ||||||||
|
| |||||||
Diversified Banks 1.1% | ||||||||
4,050,000 | BRAC Bank Ltd.* (Bangladesh) | 2,295,232 | ||||||
6,220,800 | CRDB Bank plc (Tanzania, United Republic of) | 1,109,587 | ||||||
1,742,601 | Hatton National Bank plc (Sri Lanka) | 2,387,125 | ||||||
|
| |||||||
5,791,944 | ||||||||
|
| |||||||
Diversified Support Services 1.1% | ||||||||
193,263 | Credit Corp. Group Ltd. (Australia) | 1,534,389 | ||||||
181,400 | Prestige International, Inc. (Japan) | 2,047,441 | ||||||
422,800 | Vicom Ltd. (Singapore) | 1,891,589 | ||||||
|
| |||||||
5,473,419 | ||||||||
|
| |||||||
Drug Retail 1.6% | ||||||||
1,622,058 | Green Cross Health Ltd. (New Zealand) | 2,914,610 | ||||||
94,400 | Kusuri No Aoki Co. Ltd. (Japan) | 5,159,616 | ||||||
|
| |||||||
8,074,226 | ||||||||
|
| |||||||
Electrical Components & Equipment 2.3% | ||||||||
269,840 | Amara Raja Batteries Ltd. (India) | 3,595,965 | ||||||
535,720 | Voltronic Power Technology Corp. (Taiwan) | 8,439,288 | ||||||
|
| |||||||
12,035,253 | ||||||||
|
| |||||||
Electronic Equipment & Instruments 1.1% | ||||||||
42,100 | Isra Vision AG (Germany) | 2,912,278 | ||||||
450,000 | Smart Marketing Systems plc (United Kingdom) | 2,671,502 | ||||||
|
| |||||||
5,583,780 | ||||||||
|
| |||||||
Food Distributors 0.5% | ||||||||
8,606,200 | Premier Marketing Public Co. Ltd. (Thailand) | 2,434,101 | ||||||
|
| |||||||
Food Retail 6.8% | ||||||||
20,350,020 | 7-Eleven Malaysia Holdings Berhad, Class B (Malaysia) | 7,302,327 | ||||||
220,344 | Axial Retailing, Inc. (Japan) | 7,255,372 | ||||||
5,543,800 | BreadTalk Group Ltd. (Singapore) | 4,236,618 | ||||||
3,345,000 | Choppies Enterprises Ltd. (Botswana) | 1,262,077 | ||||||
25,300 | Daikokutenbussan Co. Ltd. (Japan) | 1,098,387 | ||||||
2,432,810 | Philippine Seven Corp. (Philippines) | 5,283,549 | ||||||
90,070 | Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. (Israel) | 3,496,141 | ||||||
7,749,100 | Sheng Siong Group Ltd. (Singapore) | 4,829,533 | ||||||
|
| |||||||
34,764,004 | ||||||||
|
| |||||||
General Merchandise Stores 0.9% | ||||||||
78,972 | Seria Co. Ltd. (Japan) | 4,765,552 | ||||||
|
| |||||||
Health Care Distributors 3.3% | ||||||||
5,898,673 | Australian Pharmaceutical Industries Ltd. (Australia) | 8,837,475 | ||||||
1,478,600 | PT Enseval Putera Megatrading Tbk (Indonesia) | 301,072 | ||||||
9,679,184 | Sigma Pharmaceuticals Ltd. (Australia) | 7,862,700 | ||||||
|
| |||||||
17,001,247 | ||||||||
|
| |||||||
Health Care Equipment 0.5% | ||||||||
55,000 | Vieworks Co. Ltd. (Korea) | 2,385,449 | ||||||
|
|
64
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
Health Care Facilities 5.6% | ||||||||
35,536,611 | Asiri Hospital Holdings plc* (Sri Lanka) | $ | 5,841,635 | |||||
538,000 | Capio AB* (Sweden) | 2,850,823 | ||||||
211,422 | Instituto de Diagnostico S.A. (Chile) | 912,317 | ||||||
430,957 | NMC Health plc (United Arab Emirates) | 6,547,898 | ||||||
390,356 | Raffles Medical Group Ltd. (Singapore) | 1,306,207 | ||||||
8,846,957 | Religare Health Trust** (Singapore) | 6,432,718 | ||||||
2,032,981 | Shifa International Hospitals Ltd. (Pakistan) | 5,144,084 | ||||||
|
| |||||||
29,035,682 | ||||||||
|
| |||||||
Health Care Services 0.6% | ||||||||
78,700 | BML, Inc. (Japan) | 3,049,520 | ||||||
|
| |||||||
Health Care Technology 0.4% | ||||||||
109,300 | Nexus AG (Germany) | 2,060,693 | ||||||
|
| |||||||
Home Improvement Retail 2.1% | ||||||||
92,300 | Arcland Sakamoto Co. Ltd. (Japan) | 977,796 | ||||||
215,201 | Clas Ohlson AB (Sweden) | 4,110,508 | ||||||
82,494,300 | PT Ace Hardware Indonesia Tbk (Indonesia) | 5,568,054 | ||||||
|
| |||||||
10,656,358 | ||||||||
|
| |||||||
Household Products 0.5% | ||||||||
627,269 | Jyothy Laboratories Ltd. (India) | 2,746,922 | ||||||
|
| |||||||
Human Resource & Employment Services 1.2% | ||||||||
775,000 | 104 Corp. (Taiwan) | 3,383,281 | ||||||
176,400 | en-japan, Inc. (Japan) | 2,980,238 | ||||||
|
| |||||||
6,363,519 | ||||||||
|
| |||||||
Industrial Conglomerates 0.5% | ||||||||
57,183,777 | Expolanka Holdings plc (Sri Lanka) | 2,741,688 | ||||||
|
| |||||||
Industrial Machinery 1.5% | ||||||||
461,712 | CKD Corp. (Japan) | 3,812,037 | ||||||
750,000 | Sumeeko Industries Co. Ltd. (Taiwan) | 2,505,127 | ||||||
79,300 | Yushin Precision Equipment Co. Ltd. (Japan) | 1,427,851 | ||||||
|
| |||||||
7,745,015 | ||||||||
|
| |||||||
Internet Retail 4.2% | ||||||||
2,624,167 | Trade Me Group Ltd. (New Zealand) | 7,997,805 | ||||||
2,752,563 | Webjet Ltd. (Australia) | 13,352,669 | ||||||
|
| |||||||
21,350,474 | ||||||||
|
| |||||||
Internet Software & Services 7.3% | ||||||||
246,064 | Addcn Technology Co. Ltd. (Taiwan) | 1,987,840 | ||||||
444,894 | Dip Corp. (Japan) | 10,477,863 | ||||||
551,399 | Gurunavi, Inc. (Japan) | 13,098,912 | ||||||
215,600 | Infomart Corp. (Japan) | 1,939,097 | ||||||
239,443 | PChome Online, Inc. (Taiwan) | 2,637,414 | ||||||
138,500 | SMS Co. Ltd. (Japan) | 2,647,649 | ||||||
26,252 | XING AG (Germany) | 4,816,434 | ||||||
|
| |||||||
37,605,209 | ||||||||
|
| |||||||
IT Consulting & Other Services 1.0% | ||||||||
506,371 | EOH Holdings Ltd. (South Africa) | 5,061,222 | ||||||
|
| |||||||
Leisure Products 0.6% | ||||||||
175,368 | Samchuly Bicycle Co. Ltd. (Korea) | 2,882,930 | ||||||
|
| |||||||
Marine 0.2% | ||||||||
6,906,640 | 2GO Group, Inc.* (Philippines) | 1,114,482 | ||||||
|
| |||||||
Marine Ports & Services 0.5% | ||||||||
19,100 | Piraeus Port Authority S.A. (Greece) | 241,373 | ||||||
87,207 | Thessaloniki Port Authority S.A. (Greece) | 2,075,060 | ||||||
|
| |||||||
2,316,433 | ||||||||
|
| |||||||
Office Services & Supplies 0.6% | ||||||||
4,603,600 | Riverstone Holdings Ltd. (Malaysia) | 3,279,015 | ||||||
|
|
Shares | Value | |||||||
Oil & Gas Refining & Marketing 0.9% | ||||||||
64,100 | BP Castrol KK (Japan) | $ | 726,907 | |||||
9,294 | Hankook Shell Oil Co. Ltd. (Korea) | 3,998,468 | ||||||
|
| |||||||
4,725,375 | ||||||||
|
| |||||||
Packaged Foods & Meats 8.3% | ||||||||
1,293,927 | Cloetta AB, Class B* (Sweden) | 4,113,855 | ||||||
1,262,907 | Clover Industries Ltd. (South Africa) | 1,472,154 | ||||||
81,100 | Dutch Lady Milk Industries Berhad (Malaysia) | 1,085,491 | ||||||
744,300 | Grupo Herdez S.A.B. de C.V. (Mexico) | 1,637,131 | ||||||
115,800 | Kotobuki Spirits Co. Ltd. (Japan) | 2,600,663 | ||||||
3,626,000 | PT Ultrajaya Milk Industry & Trading Co. Tbk* (Indonesia) | 1,052,798 | ||||||
54,297,981 | RFM Corp. (Philippines) | 4,893,835 | ||||||
105,800 | Rokko Butter Co. Ltd. (Japan) | 1,650,187 | ||||||
11,374 | S&B Foods, Inc. (Japan) | 470,042 | ||||||
2,363,435 | TAT Gida Sanayi A.S.* (Turkey) | 4,966,572 | ||||||
27,800 | Vigor Alimentos S.A. (Brazil) | 159,256 | ||||||
3,743,120 | Vitasoy International Holdings Ltd. (Hong Kong) | 6,978,220 | ||||||
234,000 | Warabeya Nichiyo Co. Ltd. (Japan) | 5,155,403 | ||||||
1,100,000 | Watt’s Alimentos S.A. (Chile) | 1,933,216 | ||||||
16,450 | Wawel S.A. (Poland) | 4,411,725 | ||||||
|
| |||||||
42,580,548 | ||||||||
|
| |||||||
Personal Products 1.2% | ||||||||
5,026,550 | Karex Berhad (Malaysia) | 4,895,781 | ||||||
104,832 | Sarantis S.A. (Greece) | 1,013,292 | ||||||
|
| |||||||
5,909,073 | ||||||||
|
| |||||||
Pharmaceuticals 2.6% | ||||||||
2,572,177 | Lee’s Pharmaceutical Holdings Ltd. (China) | 1,800,708 | ||||||
79,714,200 | PT Kimia Farma Persero Tbk (Indonesia) | 7,634,769 | ||||||
7,837,000 | PT Tempo Scan Pacific Tbk (Indonesia) | 1,164,321 | ||||||
175,500 | Renata Ltd. (Bangladesh) | 2,766,513 | ||||||
|
| |||||||
13,366,311 | ||||||||
|
| |||||||
Publishing 1.9% | ||||||||
778,205 | Next Co. Ltd. (Japan) | 9,551,201 | ||||||
|
| |||||||
Real Estate Services 0.2% | ||||||||
106,700 | Century 21 Real Estate of Japan Ltd. (Japan) | 1,086,724 | ||||||
|
| |||||||
Regional Banks 0.3% | ||||||||
302,800 | Banregio Grupo Financiero S.A.B. de C.V. (Mexico) | 1,758,540 | ||||||
|
| |||||||
Restaurants 12.8% | ||||||||
10,800 | Amiyaki Tei Co. Ltd. (Japan) | 432,883 | ||||||
78,048 | AmRest Holdings SE* (Poland) | 4,374,724 | ||||||
29,500 | B-R31 Ice Cream Co. Ltd. (Japan) | 1,064,433 | ||||||
4,908,278 | Berjaya Food Berhad (Malaysia) | 2,616,742 | ||||||
3,260,900 | Collins Foods Ltd. (Australia) | 10,520,749 | ||||||
109,716 | Domino’s Pizza Enterprises Ltd. (Australia) | 4,832,967 | ||||||
447,300 | Doutor Nichires Holdings Co. Ltd. (Japan) | 7,227,083 | ||||||
800,900 | Fairwood Holdings Ltd. (Hong Kong) | 2,731,156 | ||||||
696,953 | Famous Brands Ltd. (South Africa) | 5,521,682 | ||||||
149,100 | Hiday Hidaka Corp. (Japan) | 3,752,677 | ||||||
182,260,000 | Hop Hing Group Holdings Ltd. (China) | 2,655,293 | ||||||
107,000 | KFC Holdings Japan Ltd. (Japan) | 1,874,307 | ||||||
109,900 | Kura Corp. (Japan) | 5,313,331 | ||||||
369,217 | Patisserie Holdings plc (United Kingdom) | 1,938,496 | ||||||
2,018,931 | Restaurant Brands New Zealand Ltd. (New Zealand) | 6,781,075 | ||||||
2,269,963 | Spur Corp. Ltd. (South Africa) | 4,338,317 | ||||||
|
| |||||||
65,975,915 | ||||||||
|
|
65
Table of Contents
WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX / WIIOX) — Schedule of Investments (continued) | (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
Soft Drinks 1.9% | ||||||||
92,010,320 | Pepsi-Cola Products Philippines, Inc. (Philippines) | $ | 7,773,269 | |||||
2,429,313 | Seven-Up Bottling Co. plc (Nigeria) | 1,891,988 | ||||||
|
| |||||||
9,665,257 | ||||||||
|
| |||||||
Specialized Finance 0.6% | ||||||||
19,394 | Korea Ratings Corp. (Korea) | 725,834 | ||||||
846,129 | Morningstar Japan KK (Japan) | 2,316,101 | ||||||
|
| |||||||
3,041,935 | ||||||||
|
| |||||||
Specialized REITs 0.5% | ||||||||
1,932,270 | National Storage REIT* (Australia) | 2,384,080 | ||||||
|
| |||||||
Specialty Chemicals 0.9% | ||||||||
6,229,947 | Chemical and Allied Products plc (Nigeria) | 1,215,813 | ||||||
673,719 | DuluxGroup Ltd. (Australia) | 3,242,392 | ||||||
|
| |||||||
4,458,205 | ||||||||
|
| |||||||
Tobacco 0.3% | ||||||||
5,249 | Karelia Tobacco Co., Inc. S.A. (Greece) | 1,449,176 | ||||||
|
| |||||||
Trading Companies & Distributors 1.1% | ||||||||
298,400 | Jalux, Inc. (Japan) | 5,752,129 | ||||||
|
| |||||||
Total Common Stocks (cost $425,518,948) | 501,469,798 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 2.9% | ||||||||
Repurchase Agreement 2.9% | ||||||||
$15,148,791 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $14,840,000 of United States Treasury Notes 2.125% due 12/31/22; value: $15,452,150; repurchase proceeds: $15,148,803 (cost $15,148,791) | $ | 15,148,791 | |||||
|
| |||||||
Total Short-Term Investments (cost $15,148,791) | 15,148,791 | |||||||
|
| |||||||
Total Investments (cost $440,667,739) 100.5% | 516,618,589 | |||||||
Liabilities less Other Assets (0.5%) | (2,318,515 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 514,300,074 | ||||||
|
| |||||||
*Non-income producing.
**Common units.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch International Opportunities Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Australia | 10.5 | |||
Bangladesh | 1.0 | |||
Botswana | 0.3 | |||
Brazil | 0.6 | |||
Chile | 0.6 | |||
China | 0.9 | |||
Denmark | 1.5 | |||
Egypt | 0.2 | |||
Finland | 1.7 | |||
France | 1.1 | |||
Germany | 2.0 | |||
Greece | 1.0 | |||
Hong Kong | 1.9 | |||
India | 4.1 | |||
Indonesia | 3.2 | |||
Israel | 1.3 | |||
Japan | 22.6 | |||
Korea | 2.3 | |||
Lithuania | 0.5 | |||
Malaysia | 4.1 | |||
Mexico | 0.7 | |||
New Zealand | 4.8 | |||
Nigeria | 1.0 | |||
Pakistan | 1.9 | |||
Philippines | 3.8 | |||
Poland | 2.2 | |||
Singapore | 3.7 | |||
South Africa | 3.9 | |||
Sri Lanka | 2.2 | |||
Sweden | 2.6 | |||
Taiwan | 5.2 | |||
Tanzania, United Republic of | 0.3 | |||
Thailand | 0.5 | |||
Turkey | 3.3 | |||
United Arab Emirates | 1.3 | |||
United Kingdom | 1.2 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
66
Table of Contents
WASATCH LARGE CAP VALUE FUND (FMIEX / WILCX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.4% | ||||||||
Communications Equipment 4.2% | ||||||||
316,995 | Cisco Systems, Inc. | $ | 9,024,848 | |||||
|
| |||||||
Department Stores 2.0% | ||||||||
98,351 | Macy’s, Inc. | 4,336,296 | ||||||
|
| |||||||
Diversified Banks 11.8% | ||||||||
205,054 | Citigroup, Inc. | 8,561,004 | ||||||
147,695 | JPMorgan Chase & Co. | 8,746,498 | ||||||
168,153 | Wells Fargo & Co. | 8,131,879 | ||||||
|
| |||||||
25,439,381 | ||||||||
|
| |||||||
Diversified Chemicals 2.6% | ||||||||
77,804 | Eastman Chemical Co. | 5,619,783 | ||||||
|
| |||||||
Diversified REITs 1.8% | ||||||||
162,450 | Select Income REIT | 3,744,472 | ||||||
|
| |||||||
Electric Utilities 7.8% | ||||||||
132,305 | Duke Energy Corp. | 10,674,368 | ||||||
167,220 | Exelon Corp. | 5,996,509 | ||||||
|
| |||||||
16,670,877 | ||||||||
|
| |||||||
Electrical Components & Equipment 3.8% | ||||||||
106,769 | Eaton Corp. plc | 6,679,469 | ||||||
22,856 | Regal Beloit Corp. | 1,441,985 | ||||||
|
| |||||||
8,121,454 | ||||||||
|
| |||||||
Health Care Equipment 1.8% | ||||||||
52,368 | Medtronic plc | 3,927,600 | ||||||
|
| |||||||
Household Products 3.8% | ||||||||
98,383 | Procter & Gamble Co. (The) | 8,097,905 | ||||||
|
| |||||||
Hypermarkets & Super Centers 3.5% | ||||||||
110,673 | Wal-Mart Stores, Inc. | 7,579,994 | ||||||
|
| |||||||
Industrial Conglomerates 4.8% | ||||||||
326,265 | General Electric Co.†† | 10,371,964 | ||||||
|
| |||||||
Integrated Oil & Gas 9.4% | ||||||||
67,123 | Chevron Corp. | 6,403,534 | ||||||
135,182 | Royal Dutch Shell plc ADR (Netherlands) | 6,549,568 | ||||||
259,959 | Suncor Energy, Inc. (Canada) | 7,229,460 | ||||||
|
| |||||||
20,182,562 | ||||||||
|
| |||||||
Integrated Telecommunication Services 3.0% | ||||||||
118,393 | Verizon Communications, Inc. | 6,402,693 | ||||||
|
| |||||||
Investment Banking & Brokerage 2.9% | ||||||||
39,878 | Goldman Sachs Group, Inc. (The) | 6,260,048 | ||||||
|
| |||||||
Multi-Line Insurance 3.0% | ||||||||
120,118 | American International Group, Inc. | 6,492,378 | ||||||
|
| |||||||
Oil & Gas Equipment & Services 2.5% | ||||||||
151,836 | Halliburton Co. | 5,423,582 | ||||||
|
| |||||||
Other Diversified Financial Services 1.7% | ||||||||
118,454 | Voya Financial, Inc. | 3,526,376 | ||||||
|
| |||||||
Paper Packaging 2.2% | ||||||||
117,089 | International Paper Co. | 4,805,332 | ||||||
|
| |||||||
Pharmaceuticals 9.7% | ||||||||
83,184 | Johnson & Johnson | 9,000,509 | ||||||
278,646 | Pfizer, Inc. | 8,259,067 | ||||||
20,277 | Shire plc ADR (Ireland) | 3,485,616 | ||||||
|
| |||||||
20,745,192 | ||||||||
|
|
Shares | Value | |||||||
Regional Banks 2.7% | ||||||||
68,919 | PNC Financial Services Group, Inc. | $ | 5,828,480 | |||||
|
| |||||||
Semiconductors 2.0% | ||||||||
134,823 | Intel Corp. | 4,361,524 | ||||||
|
| |||||||
Specialized REITs 3.3% | ||||||||
106,349 | EPR Properties | 7,084,970 | ||||||
|
| |||||||
Systems Software 4.5% | ||||||||
91,800 | Microsoft Corp. | 5,070,114 | ||||||
109,237 | Oracle Corp. | 4,468,886 | ||||||
|
| |||||||
9,539,000 | ||||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 2.6% | ||||||||
51,716 | Apple, Inc. | 5,636,527 | ||||||
|
| |||||||
Total Common Stocks (cost $184,840,111) | 209,223,238 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 1.2% | ||||||||
Repurchase Agreement 1.2% | ||||||||
$ 2,685,030 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $2,635,000 of United States Treasury Notes 2.125% due 12/31/22; value $2,743,694; repurchase proceeds: $2,685,032†† (cost $2,685,030) | $ | 2,685,030 | |||||
|
| |||||||
Total Short-Term Investments (cost $2,685,030) | 2,685,030 | |||||||
|
| |||||||
Total Investments (cost $187,525,141) 98.6% | 211,908,268 | |||||||
Other Assets less Liabilities 1.4% | 3,008,792 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 214,917,060 | ||||||
|
| |||||||
††All or a portion of this security has been designated as collateral for call options written. As of March 31, 2016, the call options written were no longer held; therefore, the collateral will be subsequently released.
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Large Cap Value Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Canada | 3.5 | |||
Ireland | 1.7 | |||
Netherlands | 3.1 | |||
United States | 91.7 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
67
Table of Contents
WASATCH LONG/SHORT FUND (FMLSX / WILSX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 92.6% | ||||||||
Airlines 3.1% | ||||||||
162,845 | United Continental Holdings, Inc.* †† | $ | 9,747,902 | |||||
|
| |||||||
Apparel Retail 2.0% | ||||||||
216,154 | Chico’s FAS, Inc. | 2,868,364 | ||||||
120,441 | DSW, Inc., Class A | 3,328,989 | ||||||
|
| |||||||
6,197,353 | ||||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 2.5% | ||||||||
133,579 | Michael Kors Holdings Ltd.* | 7,608,660 | ||||||
|
| |||||||
Automobile Manufacturers 2.8% | ||||||||
277,763 | General Motors Co.†† | 8,730,091 | ||||||
|
| |||||||
Automotive Retail 1.1% | ||||||||
86,840 | CST Brands, Inc.†† | 3,325,104 | ||||||
|
| |||||||
Communications Equipment 3.9% | ||||||||
424,360 | Cisco Systems, Inc.†† | 12,081,529 | ||||||
|
| |||||||
Department Stores 3.4% | ||||||||
241,530 | Macy’s, Inc.†† | 10,649,058 | ||||||
|
| |||||||
Diversified Banks 1.5% | ||||||||
112,622 | Citigroup, Inc. | 4,701,968 | ||||||
|
| |||||||
Diversified REITs 1.4% | ||||||||
577,859 | Investors Real Estate Trust | 4,195,256 | ||||||
|
| |||||||
Electrical Components & Equipment 2.2% | ||||||||
126,952 | Emerson Electric Co.†† | 6,903,650 | ||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 3.1% | ||||||||
353,732 | Mosaic Co. (The)†† | 9,550,764 | ||||||
|
| |||||||
Food Retail 1.0% | ||||||||
101,077 | Whole Foods Market, Inc. | 3,144,505 | ||||||
|
| |||||||
General Merchandise Stores 2.6% | ||||||||
99,505 | Target Corp.†† | 8,187,271 | ||||||
|
| |||||||
Health Care Equipment 5.5% | ||||||||
116,613 | Medtronic plc | 8,745,975 | ||||||
78,729 | Stryker Corp.†† | 8,446,834 | ||||||
|
| |||||||
17,192,809 | ||||||||
|
| |||||||
Health Care Services 2.1% | ||||||||
93,312 | Express Scripts Holding Co.* †† | 6,409,601 | ||||||
|
| |||||||
Hypermarkets & Super Centers 2.1% | ||||||||
94,696 | Wal-Mart Stores, Inc.†† | 6,485,729 | ||||||
|
| |||||||
Insurance Brokers 2.6% | ||||||||
77,460 | Aon plc | 8,090,697 | ||||||
|
| |||||||
Integrated Telecommunication Services 2.1% | ||||||||
120,945 | Verizon Communications, Inc.†† | 6,540,706 | ||||||
|
| |||||||
Marine 3.0% | ||||||||
152,407 | Kirby Corp.* †† | 9,188,618 | ||||||
|
| |||||||
Multi-Line Insurance 2.3% | ||||||||
185,401 | Loews Corp.†† | 7,093,442 | ||||||
|
| |||||||
Oil & Gas Drilling 1.6% | ||||||||
575,059 | Unit Corp.* †† | 5,066,270 | ||||||
|
| |||||||
Oil & Gas Exploration & Production 7.6% | ||||||||
1,643,628 | Bill Barrett Corp.* †† | 10,223,366 | ||||||
3,227,554 | Denbury Resources, Inc.†† | 7,165,170 | ||||||
779,623 | Southwestern Energy Co.* †† | 6,291,558 | ||||||
|
| |||||||
23,680,094 | ||||||||
|
|
Shares | Value | |||||||
Pharmaceuticals 6.6% | ||||||||
67,750 | Johnson & Johnson†† | $ | 7,330,550 | |||||
94,482 | Novartis AG ADR (Switzerland) | 6,844,276 | ||||||
144,226 | Zoetis, Inc.†† | 6,393,539 | ||||||
|
| |||||||
20,568,365 | ||||||||
|
| |||||||
Regional Banks 1.6% | ||||||||
56,912 | PNC Financial Services Group, Inc. | 4,813,048 | ||||||
|
| |||||||
Residential REITs 1.3% | ||||||||
84,254 | American Campus Communities, Inc.†† | 3,967,521 | ||||||
|
| |||||||
Semiconductors 3.1% | ||||||||
190,715 | QUALCOMM, Inc.†† | 9,753,165 | ||||||
|
| |||||||
Specialized Consumer Services 1.2% | ||||||||
143,673 | Sotheby’s | 3,840,379 | ||||||
|
| |||||||
Specialized REITs 5.6% | ||||||||
363,706 | Iron Mountain, Inc.†† | 12,333,270 | ||||||
242,025 | Outfront Media, Inc.†† | 5,106,728 | ||||||
|
| |||||||
17,439,998 | ||||||||
|
| |||||||
Steel 3.4% | ||||||||
467,762 | Steel Dynamics, Inc.†† | 10,529,323 | ||||||
|
| |||||||
Systems Software 6.0% | ||||||||
290,874 | Oracle Corp.†† | 11,899,655 | ||||||
129,935 | VMware, Inc., Class A* †† | 6,796,900 | ||||||
|
| |||||||
18,696,555 | ||||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 4.3% | ||||||||
120,227 | Apple, Inc.†† | 13,103,541 | ||||||
12,181 | EMC Corp.†† | 324,623 | ||||||
|
| |||||||
13,428,164 | ||||||||
|
| |||||||
Total Common Stocks (cost $348,222,815) | 287,807,595 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 11.6% | ||||||||
Repurchase Agreement 11.6% | ||||||||
$35,918,095 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $35,155,000 of United States Treasury Notes 2.125% due 12/31/22; value: $35,902,300; United States Treasury Notes 2.750% due 11/15/23; value: $736,594; repurchase proceeds: $35,918,125 (cost $35,918,095) | $ | 35,918,095 | |||||
|
| |||||||
Total Short-Term Investments (cost $35,918,095) | 35,918,095 | |||||||
|
| |||||||
Total Investments (cost $384,140,910) 104.2% | 323,725,690 | |||||||
Liabilities less Other Assets (4.2%) | (13,158,511 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 310,567,179 | ||||||
|
|
68
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
SECURITIES SOLD SHORT 28.5% | ||||||||
Data Processing & Outsourced Services 2.3% | ||||||||
143,748 | Syntel, Inc.* | $ | 7,177,338 | |||||
|
| |||||||
Department Stores 1.9% | ||||||||
535,291 | JC Penney Co., Inc.* | 5,920,318 | ||||||
|
| |||||||
Diversified Support Services 1.4% | ||||||||
113,967 | Healthcare Services Group, Inc. | 4,195,125 | ||||||
|
| |||||||
Food Distributors 2.5% | ||||||||
168,680 | Sysco Corp. | 7,882,416 | ||||||
|
| |||||||
Food Retail 3.5% | ||||||||
170,380 | Kroger Co. (The) | 6,517,035 | ||||||
144,601 | Sprouts Farmers Market, Inc.* | 4,199,213 | ||||||
|
| |||||||
10,716,248 | ||||||||
|
| |||||||
Health Care Equipment 3.5% | ||||||||
106,043 | Inogen, Inc.* | 4,769,814 | ||||||
223,594 | Zeltiq Aesthetics, Inc.* | 6,072,813 | ||||||
|
| |||||||
10,842,627 | ||||||||
|
| |||||||
Health Care Technology 0.9% | ||||||||
117,219 | Veeva Systems, Inc., Class A* | 2,935,164 | ||||||
|
| |||||||
Home Entertainment Software 1.3% | ||||||||
62,498 | Electronic Arts, Inc.* | 4,131,743 | ||||||
|
| |||||||
Housewares & Specialties 1.4% | ||||||||
95,716 | Newell Rubbermaid, Inc. | 4,239,262 | ||||||
|
| |||||||
Personal Products 2.8% | ||||||||
91,402 | Estee Lauder Cos., Inc. (The), Class A | 8,620,123 | ||||||
|
| |||||||
Pharmaceuticals 1.2% | ||||||||
71,787 | Prestige Brands Holdings, Inc.* | 3,832,708 | ||||||
|
| |||||||
Property & Casualty Insurance 2.4% | ||||||||
192,319 | First American Financial Corp. | 7,329,277 | ||||||
|
| |||||||
Specialized REITs 1.5% | ||||||||
45,591 | American Tower Corp. | 4,667,151 | ||||||
|
| |||||||
Specialty Stores 1.9% | ||||||||
30,802 | Ulta Salon Cosmetics & Fragrance, Inc.* | 5,967,579 | ||||||
|
| |||||||
Total Securities Sold Short (proceeds $83,916,404) | 88,457,079 | |||||||
|
| |||||||
*Non-income producing.
††All or a portion of this security has been designated as collateral for short sales (see Note 3).
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Long/Short Fund’s investments, excluding short-term investments and securities sold short, were in the following countries:
Country | % | |||
Switzerland | 2.4 | |||
United States | 97.6 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
At March 31, 2016, Wasatch Long/Short Fund’s securities sold short were in the following country:
Country | % | |||
United States | 100.0 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
69
Table of Contents
WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.8% | ||||||||
Air Freight & Logistics 1.2% | ||||||||
117,168 | Echo Global Logistics, Inc.* | $ | 3,182,283 | |||||
|
| |||||||
Apparel Retail 1.3% | ||||||||
167,365 | Zumiez, Inc.* | 3,333,911 | ||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 1.9% | ||||||||
272,212 | Superior Uniform Group, Inc. | 4,850,818 | ||||||
|
| |||||||
Application Software 10.9% | ||||||||
177,764 | Callidus Software, Inc.* | 2,965,104 | ||||||
34,995 | Ellie Mae, Inc.* | 3,171,947 | ||||||
249,716 | Exa Corp.* | 3,233,822 | ||||||
109,386 | Globant S.A.* (Argentina) | 3,375,652 | ||||||
39,549 | HubSpot, Inc.* | 1,725,127 | ||||||
59,856 | Interactive Intelligence Group, Inc.* | 2,179,956 | ||||||
32,840 | Tyler Technologies, Inc.* | 4,223,552 | ||||||
28,838 | Ultimate Software Group, Inc.* | 5,580,153 | ||||||
149,131 | Workiva, Inc.* | 1,737,376 | ||||||
|
| |||||||
28,192,689 | ||||||||
|
| |||||||
Asset Management & Custody Banks 1.1% | ||||||||
15,534 | Diamond Hill Investment Group, Inc. | 2,755,110 | ||||||
|
| |||||||
Automotive Retail 1.2% | ||||||||
41,597 | Monro Muffler Brake, Inc. | 2,972,937 | ||||||
|
| |||||||
Biotechnology 4.2% | ||||||||
278,787 | Abcam plc (United Kingdom) | 2,364,381 | ||||||
148,904 | Argos Therapeutics, Inc.* | 952,986 | ||||||
15,000 | Argos Therapeutics, Inc. PIPE* *** † | 80,640 | ||||||
176,227 | ChemoCentryx, Inc.* | 438,805 | ||||||
250,157 | Cytokinetics, Inc.* | 1,763,607 | ||||||
62,154 | Esperion Therapeutics, Inc.* | 1,051,024 | ||||||
221,991 | Exact Sciences Corp.* | 1,496,219 | ||||||
43,804 | Flexion Therapeutics, Inc.* | 402,997 | ||||||
129,918 | Inovio Pharmaceuticals, Inc.* | 1,131,586 | ||||||
210,359 | Sangamo BioSciences, Inc.* | 1,272,672 | ||||||
|
| |||||||
10,954,917 | ||||||||
|
| |||||||
Building Products 1.3% | ||||||||
68,903 | Trex Co., Inc.* | 3,302,521 | ||||||
|
| |||||||
Data Processing & Outsourced Services 1.2% | ||||||||
61,474 | ExlService Holdings, Inc.* | 3,184,353 | ||||||
|
| |||||||
Department Stores 0.9% | ||||||||
317,634 | V-Mart Retail Ltd. (India) | 2,254,339 | ||||||
|
| |||||||
Diversified Banks 1.1% | ||||||||
1,918,211 | City Union Bank Ltd. (India) | 2,745,991 | ||||||
|
| |||||||
Diversified Capital Markets 0.7% | ||||||||
63,723 | HFF, Inc., Class A | 1,754,294 | ||||||
|
| |||||||
Electronic Equipment & Instruments 1.3% | ||||||||
34,211 | Mesa Laboratories, Inc. | 3,296,230 | ||||||
|
| |||||||
Electronic Manufacturing Services 2.6% | ||||||||
130,986 | Fabrinet* | 4,237,397 | ||||||
26,759 | IPG Photonics Corp.* | 2,571,005 | ||||||
|
| |||||||
6,808,402 | ||||||||
|
| |||||||
Environmental & Facilities Services 0.9% | ||||||||
241,406 | Heritage-Crystal Clean, Inc.* | 2,399,576 | ||||||
|
| |||||||
Food Distributors 1.7% | ||||||||
217,154 | Chefs’ Warehouse, Inc. (The)* | 4,406,055 | ||||||
|
|
Shares | Value | |||||||
General Merchandise Stores 0.3% | ||||||||
33,986 | Ollie’s Bargain Outlet Holdings, Inc.* | $ | 796,292 | |||||
|
| |||||||
Health Care Equipment 3.5% | ||||||||
24,555 | Abaxis, Inc. | 1,114,551 | ||||||
209,478 | AtriCure, Inc.* | 3,525,515 | ||||||
46,813 | Entellus Medical, Inc.* | 851,529 | ||||||
151,770 | Novadaq Technologies, Inc.* (Canada) | 1,683,129 | ||||||
71,920 | Oxford Immunotec Global plc* | 712,727 | ||||||
142,380 | Tandem Diabetes Care, Inc.* | 1,240,130 | ||||||
|
| |||||||
9,127,581 | ||||||||
|
| |||||||
Health Care Facilities 2.2% | ||||||||
246,530 | Ensign Group, Inc. (The) | 5,581,439 | ||||||
|
| |||||||
Health Care REITs 2.5% | ||||||||
510,134 | CareTrust REIT, Inc. | 6,478,702 | ||||||
|
| |||||||
Health Care Services 1.8% | ||||||||
154,675 | ExamWorks Group, Inc.* | 4,572,193 | ||||||
|
| |||||||
Homebuilding 4.1% | ||||||||
133,860 | Installed Building Products, Inc.* | 3,562,014 | ||||||
292,614 | LGI Homes, Inc.* | 7,084,185 | ||||||
|
| |||||||
10,646,199 | ||||||||
|
| |||||||
Industrial Machinery 2.2% | ||||||||
101,470 | Arcam AB* (Sweden) | 2,194,494 | ||||||
46,181 | Proto Labs, Inc.* | 3,560,093 | ||||||
|
| |||||||
5,754,587 | ||||||||
|
| |||||||
Internet Retail 2.4% | ||||||||
82,324 | Duluth Holdings, Inc.* | 1,604,495 | ||||||
258,154 | MakeMyTrip Ltd.* (India) | 4,670,006 | ||||||
|
| |||||||
6,274,501 | ||||||||
|
| |||||||
Internet Software & Services 6.1% | ||||||||
55,331 | Cornerstone OnDemand, Inc.* | 1,813,197 | ||||||
138,187 | Envestnet, Inc.* | 3,758,686 | ||||||
173,301 | Reis, Inc. | 4,081,239 | ||||||
112,000 | SMS Co. Ltd. (Japan) | 2,141,059 | ||||||
55,267 | SPS Commerce, Inc.* | 2,373,165 | ||||||
66,755 | Tucows, Inc., Class A* | 1,498,650 | ||||||
|
| |||||||
15,665,996 | ||||||||
|
| |||||||
Leisure Products 1.0% | ||||||||
189,774 | MCBC Holdings, Inc.* | 2,672,018 | ||||||
|
| |||||||
Life Sciences Tools & Services 2.6% | ||||||||
122,614 | Fluidigm Corp.* | 989,495 | ||||||
76,996 | ICON plc* (Ireland) | 5,782,399 | ||||||
|
| |||||||
6,771,894 | ||||||||
|
| |||||||
Managed Health Care 3.4% | ||||||||
194,139 | HealthEquity, Inc.* | 4,789,409 | ||||||
417,436 | Trupanion, Inc.* | 4,111,745 | ||||||
|
| |||||||
8,901,154 | ||||||||
|
| |||||||
Oil & Gas Equipment & Services 0.8% | ||||||||
157,619 | Pason Systems, Inc. (Canada) | 2,001,396 | ||||||
|
| |||||||
Packaged Foods & Meats 1.9% | ||||||||
344,649 | Freshpet, Inc.* | 2,526,277 | ||||||
1,500,000 | Prabhat Dairy Ltd.* (India) | 2,471,215 | ||||||
|
| |||||||
4,997,492 | ||||||||
|
| |||||||
Pharmaceuticals 5.9% | ||||||||
14,323 | Aerie Pharmaceuticals, Inc.* | 174,168 | ||||||
96,749 | Akorn, Inc.* | 2,276,504 | ||||||
261,909 | Auris Medical Holding AG* (Switzerland) | 953,349 | ||||||
100,000 | Caplin Point Laboratories Ltd. (India) | 1,525,161 | ||||||
127,152 | Cempra, Inc.* | 2,227,703 | ||||||
111,933 | Egalet Corp.* | 767,860 | ||||||
44,566 | Intra-Cellular Therapies, Inc.* | 1,238,935 |
70
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
Pharmaceuticals (continued) | ||||||||
599,945 | Natco Pharma Ltd. (India) | $ | 3,738,870 | |||||
83,550 | Phibro Animal Health Corp., Class A | 2,259,192 | ||||||
|
| |||||||
15,161,742 | ||||||||
|
| |||||||
Publishing 1.1% | ||||||||
231,412 | Next Co. Ltd. (Japan) | 2,840,206 | ||||||
|
| |||||||
Regional Banks 5.3% | ||||||||
333,308 | Avenue Financial Holdings, Inc.* | 6,456,176 | ||||||
91,875 | Cardinal Financial Corp. | 1,869,656 | ||||||
125,319 | Customers Bancorp, Inc.* | 2,961,288 | ||||||
161,075 | People’s Utah Bancorp | 2,549,817 | ||||||
|
| |||||||
13,836,937 | ||||||||
|
| |||||||
Restaurants 2.5% | ||||||||
265,949 | Papa Murphy’s Holdings, Inc.* | 3,178,090 | ||||||
83,103 | Zoe’s Kitchen, Inc.* | 3,240,186 | ||||||
|
| |||||||
6,418,276 | ||||||||
|
| |||||||
Semiconductor Equipment 1.4% | ||||||||
277,617 | PDF Solutions, Inc.* | 3,714,515 | ||||||
|
| |||||||
Semiconductors 1.7% | ||||||||
42,129 | NVE Corp. | 2,381,552 | ||||||
41,710 | Power Integrations, Inc. | 2,071,319 | ||||||
|
| |||||||
4,452,871 | ||||||||
|
| |||||||
Specialty Stores 1.8% | ||||||||
205,890 | DavidsTea, Inc.* (Canada) | 2,493,328 | ||||||
60,752 | Hibbett Sports, Inc.* | 2,180,997 | ||||||
|
| |||||||
4,674,325 | ||||||||
|
| |||||||
Systems Software 3.8% | ||||||||
70,258 | FleetMatics Group plc* | 2,860,203 | ||||||
186,814 | Infoblox, Inc.* | 3,194,520 | ||||||
283,766 | TubeMogul, Inc.* | 3,671,932 | ||||||
|
| |||||||
9,726,655 | ||||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 2.0% | ||||||||
208,287 | Intevac, Inc.* | 937,291 | ||||||
970,086 | USA Technologies, Inc.* | 4,229,575 | ||||||
|
| |||||||
5,166,866 | ||||||||
|
| |||||||
Textiles 1.5% | ||||||||
2,654,330 | Welspun India Ltd. (India) | 3,968,118 | ||||||
|
| |||||||
Thrifts & Mortgage Finance 2.5% | ||||||||
1,050,006 | Gruh Finance Ltd. (India) | 3,783,969 | ||||||
27,605 | LendingTree, Inc.* | 2,699,217 | ||||||
|
| |||||||
6,483,186 | ||||||||
|
| |||||||
Total Common Stocks (cost $186,635,514) | 253,079,567 | |||||||
|
| |||||||
WARRANTS 0.0% | ||||||||
Biotechnology 0.0% | ||||||||
11,250 | Argos Therapeutics, Inc., expiring 3/14/2021* *** † | 14,648 | ||||||
|
| |||||||
Total Warrants (cost $1,407) | 14,648 | |||||||
|
|
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 2.2% | ||||||||
Repurchase Agreement 2.2% | ||||||||
$5,810,343 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $5,695,000 of United States Treasury Notes 2.125% due 12/31/22; value: $5,929,919; repurchase proceeds: $5,810,348 (cost $5,810,343) | $ | 5,810,343 | |||||
|
| |||||||
Total Short-Term Investments (cost $5,810,343) | 5,810,343 | |||||||
|
| |||||||
Total Investments (cost $192,447,264) 100.0% | 258,904,558 | |||||||
Other Assets less Liabilities <0.1% | 29,956 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 258,934,514 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
PIPE Private Investment in a Public Equity.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Micro Cap Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 1.3 | |||
Canada | 2.4 | |||
India | 9.9 | |||
Ireland | 2.3 | |||
Japan | 2.0 | |||
Sweden | 0.9 | |||
Switzerland | 0.4 | |||
United Kingdom | 0.9 | |||
United States | 79.9 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
71
Table of Contents
WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 85.8% | ||||||||
Air Freight & Logistics 0.8% | ||||||||
400,000 | Radiant Logistics, Inc.* | $ | 1,428,000 | |||||
|
| |||||||
Airlines 1.1% | ||||||||
10,000 | Allegiant Travel Co. | 1,780,600 | ||||||
|
| |||||||
Alternative Carriers 0.8% | ||||||||
140,000 | ORBCOMM, Inc.* | 1,418,200 | ||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 0.3% | ||||||||
32,000 | Cherokee, Inc.* | 569,280 | ||||||
|
| |||||||
Application Software 3.0% | ||||||||
52,000 | Ebix, Inc. | 2,121,080 | ||||||
30,000 | ESI Group* (France) | 833,382 | ||||||
30,000 | Globant S.A.* (Argentina) | 925,800 | ||||||
105,000 | Model N, Inc.* | 1,130,850 | ||||||
|
| |||||||
5,011,112 | ||||||||
|
| |||||||
Asset Management & Custody Banks 0.7% | ||||||||
353,012 | River and Mercantile Group plc (United Kingdom) | 1,240,684 | ||||||
|
| |||||||
Auto Parts & Equipment 2.5% | ||||||||
44,000 | Gentherm, Inc.* | 1,829,960 | ||||||
95,000 | Horizon Global Corp.* | 1,195,100 | ||||||
97,000 | Unique Fabricating, Inc. | 1,197,950 | ||||||
|
| |||||||
4,223,010 | ||||||||
|
| |||||||
Automotive Retail 0.9% | ||||||||
62,000 | Mekonomen AB (Sweden) | 1,535,703 | ||||||
|
| |||||||
Biotechnology 0.7% | ||||||||
112,000 | Abcam plc (United Kingdom) | 949,868 | ||||||
45,000 | Exact Sciences Corp.* | 303,300 | ||||||
|
| |||||||
1,253,168 | ||||||||
|
| |||||||
Brewers 1.1% | ||||||||
800,000 | Turk Tuborg Bira ve Malt Sanayii A.S.* (Turkey) | 1,907,934 | ||||||
|
| |||||||
Building Products 2.5% | ||||||||
40,300 | Caesarstone Sdot-Yam Ltd.* (Israel) | 1,384,305 | ||||||
26,000 | Patrick Industries, Inc.* | 1,180,140 | ||||||
34,000 | Trex Co., Inc.* | 1,629,620 | ||||||
|
| |||||||
4,194,065 | ||||||||
|
| |||||||
Commercial Printing 0.9% | ||||||||
195,000 | InnerWorkings, Inc.* | 1,550,250 | ||||||
|
| |||||||
Commodity Chemicals 1.0% | ||||||||
200,000 | Green Seal Holding Ltd. (Taiwan) | 782,998 | ||||||
92,199 | Trecora Resources* | 886,954 | ||||||
|
| |||||||
1,669,952 | ||||||||
|
| |||||||
Communications Equipment 1.4% | ||||||||
70,000 | Applied Optoelectronics, Inc.* | 1,043,700 | ||||||
170,000 | ShoreTel, Inc.* | 1,264,800 | ||||||
|
| |||||||
2,308,500 | ||||||||
|
| |||||||
Construction & Engineering 1.1% | ||||||||
70,000 | NV5 Global, Inc.* | 1,878,100 | ||||||
|
| |||||||
Construction Materials 0.6% | ||||||||
1,799,000 | Dongpeng Holdings Co. Ltd. (China) | 981,102 | ||||||
|
| |||||||
Diversified Banks 0.8% | ||||||||
1,000,000 | City Union Bank Ltd. (India) | 1,431,538 | ||||||
|
| |||||||
Diversified Support Services 0.9% | ||||||||
1,100,000 | Johnson Service Group plc (United Kingdom) | 1,438,888 | ||||||
|
|
Shares | Value | |||||||
Electronic Equipment & Instruments 1.0% | ||||||||
51,000 | Optex Co. Ltd. (Japan) | $ | 1,629,444 | |||||
17,800 | SuperCom Ltd.* (Israel) | 70,844 | ||||||
|
| |||||||
1,700,288 | ||||||||
|
| |||||||
Electronic Manufacturing Services 1.5% | ||||||||
78,000 | Fabrinet* | 2,523,300 | ||||||
|
| |||||||
Environmental & Facilities Services 0.7% | ||||||||
379,672 | Hudson Technologies, Inc.* | 1,245,324 | ||||||
|
| |||||||
Food Distributors 1.2% | ||||||||
96,000 | Chefs’ Warehouse, Inc. (The)* | 1,947,840 | ||||||
|
| |||||||
Food Retail 0.7% | ||||||||
205,000 | Majestic Wine plc* (United Kingdom) | 1,246,486 | ||||||
|
| |||||||
General Merchandise Stores 0.8% | ||||||||
21,000 | Seria Co. Ltd. (Japan) | 1,267,241 | ||||||
|
| |||||||
Health Care Equipment 1.6% | ||||||||
65,000 | AtriCure, Inc.* | 1,093,950 | ||||||
340,000 | Bovie Medical Corp.* | 567,800 | ||||||
54,000 | iRadimed Corp.* | 1,034,640 | ||||||
|
| |||||||
2,696,390 | ||||||||
|
| |||||||
Health Care Facilities 1.9% | ||||||||
69,000 | Ensign Group, Inc. (The) | 1,562,160 | ||||||
2,199,943 | Religare Health Trust** (Singapore) | 1,599,603 | ||||||
|
| |||||||
3,161,763 | ||||||||
|
| |||||||
Health Care REITs 0.8% | ||||||||
110,000 | CareTrust REIT, Inc. | 1,397,000 | ||||||
|
| |||||||
Health Care Services 4.7% | ||||||||
34,000 | Air Methods Corp.* | 1,231,480 | ||||||
900,000 | GHP Specialty Care AB* (Sweden) | 859,535 | ||||||
47,000 | Landauer, Inc. | 1,554,290 | ||||||
39,000 | LHC Group, Inc.* | 1,386,840 | ||||||
63,000 | National Research Corp., Class A | 979,650 | ||||||
238,000 | Nobilis Health Corp.* (Canada) | 742,560 | ||||||
350,000 | Nobilis Health Corp. PIPE* | 1,096,233 | ||||||
|
| |||||||
7,850,588 | ||||||||
|
| |||||||
Health Care Supplies 1.0% | ||||||||
105,000 | Cerus Corp.* | 622,650 | ||||||
13,000 | Guerbet (France) | 1,000,514 | ||||||
|
| |||||||
1,623,164 | ||||||||
|
| |||||||
Health Care Technology 1.4% | ||||||||
80,000 | Nexus AG (Germany) | 1,508,284 | ||||||
22,000 | Software Service, Inc. (Japan) | 836,829 | ||||||
|
| |||||||
2,345,113 | ||||||||
|
| |||||||
Home Improvement Retail 0.7% | ||||||||
36,000 | Hornbach Baumarkt AG (Germany) | 1,159,903 | ||||||
|
| |||||||
Homebuilding 2.1% | ||||||||
47,000 | Installed Building Products, Inc.* | 1,250,670 | ||||||
92,000 | LGI Homes, Inc.* | 2,227,320 | ||||||
|
| |||||||
3,477,990 | ||||||||
|
| |||||||
Homefurnishing Retail 1.4% | ||||||||
62,000 | Kirkland’s, Inc. | 1,085,620 | ||||||
63,000 | Select Comfort Corp.* | 1,221,570 | ||||||
|
| |||||||
2,307,190 | ||||||||
|
| |||||||
Hotel & Resort REITs 0.6% | ||||||||
90,000 | Summit Hotel Properties, Inc. | 1,077,300 | ||||||
|
|
72
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
Human Resource & Employment Services 0.9% | ||||||||
80,000 | Kforce, Inc. | $ | 1,566,400 | |||||
|
| |||||||
Industrial Machinery 1.8% | ||||||||
120,000 | CKD Corp. (Japan) | 990,757 | ||||||
21,000 | Hy-Lok Corp. (Korea) | 504,066 | ||||||
28,000 | John Bean Technologies Corp. | 1,579,480 | ||||||
|
| |||||||
3,074,303 | ||||||||
|
| |||||||
Internet Retail 0.6% | ||||||||
61,993 | Oisix, Inc.* (Japan) | 1,013,750 | ||||||
|
| |||||||
Internet Software & Services 2.5% | ||||||||
150,000 | inContact, Inc.* | 1,333,500 | ||||||
135,000 | IntraLinks Holdings, Inc.* | 1,063,800 | ||||||
80,000 | Tucows, Inc., Class A* | 1,796,000 | ||||||
|
| |||||||
4,193,300 | ||||||||
|
| |||||||
IT Consulting & Other Services 1.9% | ||||||||
17,000 | EPAM Systems, Inc.* | 1,269,390 | ||||||
86,000 | Perficient, Inc.* | 1,867,920 | ||||||
|
| |||||||
3,137,310 | ||||||||
|
| |||||||
Leisure Products 2.5% | ||||||||
30,700 | Escalade, Inc. | 361,339 | ||||||
89,400 | MCBC Holdings, Inc.* | 1,258,752 | ||||||
68,000 | Nautilus, Inc.* | 1,313,760 | ||||||
480,000 | Photo-Me International plc (United Kingdom) | 1,226,433 | ||||||
|
| |||||||
4,160,284 | ||||||||
|
| |||||||
Life Sciences Tools & Services 0.7% | ||||||||
29,000 | INC Research Holdings, Inc., Class A* | 1,195,090 | ||||||
|
| |||||||
Metal & Glass Containers 0.6% | ||||||||
19,000 | PSB Industries S.A. (France) | 1,027,496 | ||||||
|
| |||||||
Mortgage REITs 1.5% | ||||||||
260,000 | Arbor Realty Trust, Inc. | 1,760,200 | ||||||
51,000 | Colony Capital, Inc., Class A | 855,270 | ||||||
|
| |||||||
2,615,470 | ||||||||
|
| |||||||
Oil & Gas Exploration & Production 0.4% | ||||||||
130,236 | Evolution Petroleum Corp. | 632,947 | ||||||
|
| |||||||
Packaged Foods & Meats 3.6% | ||||||||
165,000 | Freshpet, Inc.* | 1,209,450 | ||||||
28,000 | John B. Sanfilippo & Son, Inc. | 1,934,520 | ||||||
2,000,000 | Kawan Food BHD (Malaysia) | 1,778,803 | ||||||
700,000 | Prabhat Dairy Ltd.* (India) | 1,153,234 | ||||||
|
| |||||||
6,076,007 | ||||||||
|
| |||||||
Pharmaceuticals 0.9% | ||||||||
900,000 | Marksans Pharma Ltd. (India) | 627,883 | ||||||
140,000 | Moberg Pharma AB* (Sweden) | 905,747 | ||||||
|
| |||||||
1,533,630 | ||||||||
|
| |||||||
Property & Casualty Insurance 2.8% | ||||||||
140,000 | 1347 Property Insurance Holdings, Inc.* | 831,600 | ||||||
115,000 | Atlas Financial Holdings, Inc.* | 2,086,100 | ||||||
210,000 | Kingstone Cos., Inc. | 1,734,600 | ||||||
|
| |||||||
4,652,300 | ||||||||
|
| |||||||
Regional Banks 6.9% | ||||||||
61,000 | Bankwell Financial Group, Inc. | 1,193,770 | ||||||
135,000 | Blue Hills Bancorp, Inc. | 1,845,450 | ||||||
82,000 | Customers Bancorp, Inc.* | 1,937,660 | ||||||
58,000 | Equity Bancshares, Inc., Class A* | 1,218,000 | ||||||
51,000 | First of Long Island Corp. (The) | 1,453,500 | ||||||
106,000 | Investar Holding Corp. | 1,555,020 | ||||||
74,000 | People’s Utah Bancorp | 1,171,420 | ||||||
93,010 | Veritex Holdings, Inc.* | 1,351,435 | ||||||
|
| |||||||
11,726,255 | ||||||||
|
|
Shares | Value | |||||||
Research & Consulting Services 0.5% | ||||||||
52,000 | Franklin Covey Co.* | $ | 914,680 | |||||
|
| |||||||
Residential REITs 0.7% | ||||||||
105,000 | Bluerock Residential Growth REIT, Inc. | 1,142,400 | ||||||
|
| |||||||
Restaurants 2.5% | ||||||||
400,000 | Collins Foods Ltd. (Australia) | 1,290,533 | ||||||
85,000 | Krispy Kreme Doughnuts, Inc.* | 1,325,150 | ||||||
25,000 | Red Robin Gourmet Burgers, Inc.* | 1,611,750 | ||||||
|
| |||||||
4,227,433 | ||||||||
|
| |||||||
Semiconductor Equipment 0.4% | ||||||||
49,000 | PDF Solutions, Inc.* | 655,620 | ||||||
|
| |||||||
Semiconductors 2.1% | ||||||||
500,000 | GigOptix, Inc.* | 1,350,000 | ||||||
130,000 | Sigma Designs, Inc.* | 884,000 | ||||||
112,000 | Tower Semiconductor Ltd.* (Israel) | 1,357,440 | ||||||
|
| |||||||
3,591,440 | ||||||||
|
| |||||||
Soft Drinks 0.7% | ||||||||
14,000,000 | Pepsi-Cola Products Philippines, Inc. (Philippines) | 1,182,756 | ||||||
|
| |||||||
Specialty Chemicals 1.6% | ||||||||
140,000 | Ferro Corp.* | 1,661,800 | ||||||
150,000 | Flotek Industries, Inc.* | 1,099,500 | ||||||
|
| |||||||
2,761,300 | ||||||||
|
| |||||||
Systems Software 0.5% | ||||||||
40,000 | AVG Technologies N.V.* | 830,000 | ||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 0.8% | ||||||||
300,000 | USA Technologies, Inc.* | 1,308,000 | ||||||
|
| |||||||
Textiles 0.7% | ||||||||
2,200,000 | Best Pacific International Holdings Ltd. (China) | 1,213,973 | ||||||
|
| |||||||
Thrifts & Mortgage Finance 3.8% | ||||||||
36,000 | Anchor BanCorp Wisconsin, Inc.* | 1,622,160 | ||||||
122,000 | Beneficial Bancorp, Inc.* | 1,670,180 | ||||||
82,000 | BofI Holding, Inc.* | 1,749,880 | ||||||
250,000 | Mortgage Advice Bureau Holdings Ltd. (United Kingdom) | 1,329,642 | ||||||
|
| |||||||
6,371,862 | ||||||||
|
| |||||||
Trucking 0.7% | ||||||||
90,000 | Roadrunner Transportation Systems, Inc.* | 1,121,400 | ||||||
|
| |||||||
Total Common Stocks (cost $116,219,532) | 144,772,372 | |||||||
|
| |||||||
CONVERTIBLE PREFERRED STOCKS 0.9% | ||||||||
Oil & Gas Refining & Marketing 0.9% | ||||||||
515,622 | Vertex Energy, Inc., Series B Pfd. *** † | 1,450,187 | ||||||
|
| |||||||
Total Convertible Preferred Stocks (cost $1,503,428) | 1,450,187 | |||||||
|
| |||||||
PREFERRED STOCKS 1.1% | ||||||||
Pharmaceuticals 1.1% | ||||||||
105,263 | Acetylon Pharmaceuticals, Inc., Series B Pfd.* *** † | 1,801,050 | ||||||
|
| |||||||
Total Preferred Stocks (cost $500,000) | 1,801,050 | |||||||
|
|
73
Table of Contents
WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments (continued) | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
WARRANTS 0.0% | ||||||||
Oil & Gas Refining & Marketing 0.0% | ||||||||
250,000 | Vertex Energy, Inc., expiring 12/24/20* *** † | $ | 47,500 | |||||
|
| |||||||
Total Warrants (cost $95,000) | 47,500 | |||||||
|
| |||||||
RIGHTS 0.0% | ||||||||
Health Care Supplies 0.0% | ||||||||
375,000 | Synergetics USA, Inc.* *** † | 37,500 | ||||||
|
| |||||||
Total Rights (cost $71,250) | 37,500 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 12.0% | ||||||||
Repurchase Agreement 12.0% | ||||||||
$20,320,067 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $19,910,000 of United States Treasury Notes 2.125% due 12/31/22; value: $20,731,288; repurchase proceeds: $20,320,084†† (cost $20,320,067) | $ | 20,320,067 | |||||
|
| |||||||
Total Short-Term Investments (cost $20,320,067) | 20,320,067 | |||||||
|
| |||||||
Total Investments (cost $138,709,277) 99.8% | 168,428,676 | |||||||
Other Assets less Liabilities 0.2% | 379,940 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 168,808,616 | ||||||
|
| |||||||
*Non-income producing.
**Common units.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
††All or a portion of this security has been designated as collateral for an unfunded loan commitment (see Note 3).
PIPE Private Investment in a Public Equity.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Micro Cap Value Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 0.6 | |||
Australia | 0.9 | |||
Canada | 0.5 | |||
China | 1.5 | |||
France | 1.9 | |||
Germany | 1.8 | |||
India | 2.2 | |||
Israel | 1.9 | |||
Japan | 3.9 | |||
Korea | 0.3 | |||
Malaysia | 1.2 | |||
Philippines | 0.8 | |||
Singapore | 1.1 | |||
Sweden | 2.2 | |||
Taiwan | 0.5 | |||
Turkey | 1.3 | |||
United Kingdom | 5.0 | |||
United States | 72.4 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
74
Table of Contents
WASATCH SMALL CAP GROWTH FUND (WAAEX / WIAEX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
Shares | Value | |||||||
COMMON STOCKS 97.6% | ||||||||
Aerospace & Defense 1.4% | ||||||||
573,253 | HEICO Corp., Class A | $ | 27,286,843 | |||||
|
| |||||||
Air Freight & Logistics 3.9% | ||||||||
36,319,023 | Aramex PJSC (United Arab Emirates) | 33,519,776 | ||||||
1,455,209 | Echo Global Logistics, Inc.* | 39,523,476 | ||||||
|
| |||||||
73,043,252 | ||||||||
|
| |||||||
Airlines 4.0% | ||||||||
159,384 | Allegiant Travel Co. | 28,379,915 | ||||||
986,159 | Spirit Airlines, Inc.* | 47,315,909 | ||||||
|
| |||||||
75,695,824 | ||||||||
|
| |||||||
Apparel Retail 1.3% | ||||||||
1,265,079 | Zumiez, Inc.* | 25,200,374 | ||||||
|
| |||||||
Application Software 9.8% | ||||||||
1,262,506 | Callidus Software, Inc.* | 21,058,600 | ||||||
373,300 | Globant S.A.* (Argentina) | 11,520,038 | ||||||
501,314 | HubSpot, Inc.* | 21,867,317 | ||||||
530,716 | Paylocity Holding Corp.* | 17,375,642 | ||||||
438,803 | Ultimate Software Group, Inc.* | 84,908,380 | ||||||
1,283,797 | Zendesk, Inc.* | 26,869,871 | ||||||
|
| |||||||
183,599,848 | ||||||||
|
| |||||||
Automotive Retail 4.0% | ||||||||
521,556 | Monro Muffler Brake, Inc. | 37,275,607 | ||||||
139,313 | O’Reilly Automotive, Inc.* | 38,124,396 | ||||||
|
| |||||||
75,400,003 | ||||||||
|
| |||||||
Biotechnology 5.6% | ||||||||
2,124,073 | Abcam plc (United Kingdom) | 18,014,177 | ||||||
1,162,454 | Argos Therapeutics, Inc.* | 7,439,706 | ||||||
52,450 | Argos Therapeutics, Inc. PIPE* *** † | 281,971 | ||||||
1,357,191 | ChemoCentryx, Inc.* | 3,379,406 | ||||||
360,606 | Esperion Therapeutics, Inc.* | 6,097,847 | ||||||
1,366,710 | Exact Sciences Corp.* | 9,211,625 | ||||||
413,857 | Flexion Therapeutics, Inc.* | 3,807,484 | ||||||
987,182 | Inovio Pharmaceuticals, Inc.* | 8,598,355 | ||||||
2,064,571 | Sangamo BioSciences, Inc.* | 12,490,655 | ||||||
996,987 | Seattle Genetics, Inc.* | 34,984,274 | ||||||
|
| |||||||
104,305,500 | ||||||||
|
| |||||||
Consumer Finance 0.7% | ||||||||
3,305,639 | Mahindra & Mahindra Financial Services Ltd. (India) | 12,629,041 | ||||||
|
| |||||||
Data Processing & Outsourced Services 0.8% | ||||||||
280,078 | ExlService Holdings, Inc.* | 14,508,040 | ||||||
|
| |||||||
Diversified Banks 2.9% | ||||||||
565,550 | HDFC Bank Ltd. ADR (India) | 34,854,846 | ||||||
1,566,515 | Yes Bank Ltd. (India) | 20,509,170 | ||||||
|
| |||||||
55,364,016 | ||||||||
|
| |||||||
Diversified Capital Markets 0.6% | ||||||||
437,341 | HFF, Inc., Class A | 12,039,998 | ||||||
|
| |||||||
Diversified Support Services 2.2% | ||||||||
1,020,424 | Copart, Inc.* | 41,602,686 | ||||||
|
| |||||||
Drug Retail 1.1% | ||||||||
119,229 | Cosmos Pharmaceutical Corp. (Japan) | 19,825,583 | ||||||
|
| |||||||
Electronic Manufacturing Services 0.8% | ||||||||
157,272 | IPG Photonics Corp.* | 15,110,694 | ||||||
|
| |||||||
Food Distributors 2.0% | ||||||||
1,897,093 | Chefs’ Warehouse, Inc. (The)* ‡‡ | 38,492,017 | ||||||
|
| |||||||
General Merchandise Stores 0.3% | ||||||||
205,326 | Ollie’s Bargain Outlet Holdings, Inc.* | 4,810,788 | ||||||
|
|
Shares | Value | |||||||
Health Care Equipment 0.6% | ||||||||
116,566 | Abaxis, Inc. | $ | 5,290,931 | |||||
593,260 | Tandem Diabetes Care, Inc.* | 5,167,294 | ||||||
|
| |||||||
10,458,225 | ||||||||
|
| |||||||
Health Care Facilities 1.7% | ||||||||
1,412,841 | Ensign Group, Inc. (The) | 31,986,720 | ||||||
|
| |||||||
Health Care Services 2.4% | ||||||||
1,517,267 | ExamWorks Group, Inc.* | 44,850,413 | ||||||
|
| |||||||
Homefurnishing Retail 1.7% | ||||||||
751,690 | Mattress Firm Holding Corp.* | 31,864,139 | ||||||
|
| |||||||
Industrial Machinery 1.3% | ||||||||
307,809 | Proto Labs, Inc.* | 23,728,996 | ||||||
|
| |||||||
Internet Retail 4.2% | ||||||||
828,553 | Blue Nile, Inc.‡‡ | 21,302,098 | ||||||
1,751,690 | MakeMyTrip Ltd.* (India) | 31,688,072 | ||||||
297,008 | Wayfair, Inc., Class A* | 12,836,686 | ||||||
96,295 | zooplus AG* (Germany) | 13,210,634 | ||||||
|
| |||||||
79,037,490 | ||||||||
|
| |||||||
Internet Software & Services 5.7% | ||||||||
2,109,982 | Cornerstone OnDemand, Inc.* | 69,144,110 | ||||||
711,160 | Envestnet, Inc.* | 19,343,552 | ||||||
179,336 | Shutterstock, Inc.* | 6,587,011 | ||||||
296,139 | SPS Commerce, Inc.* | 12,716,209 | ||||||
|
| |||||||
107,790,882 | ||||||||
|
| |||||||
IT Consulting & Other Services 1.3% | ||||||||
429,533 | Luxoft Holding, Inc.* | 23,637,201 | ||||||
|
| |||||||
Life Sciences Tools & Services 4.5% | ||||||||
2,003,520 | Divi’s Laboratories Ltd. (India) | 29,921,572 | ||||||
1,343,478 | Fluidigm Corp.* | 10,841,867 | ||||||
576,523 | ICON plc* (Ireland) | 43,296,877 | ||||||
|
| |||||||
84,060,316 | ||||||||
|
| |||||||
Managed Health Care 1.3% | ||||||||
648,974 | HealthEquity, Inc.* | 16,010,189 | ||||||
804,065 | Trupanion, Inc.* | 7,920,040 | ||||||
|
| |||||||
23,930,229 | ||||||||
|
| |||||||
Oil & Gas Drilling 0.1% | ||||||||
343,142 | Seadrill Ltd.* | 1,132,369 | ||||||
|
| |||||||
Oil & Gas Equipment & Services 0.9% | ||||||||
110,894 | Archrock, Inc. | 887,152 | ||||||
88,407 | Dril-Quip, Inc.* | 5,353,928 | ||||||
55,447 | Exterran Corp.* | 857,211 | ||||||
88,632 | Frank’s International N.V. | 1,460,655 | ||||||
78,835 | Oceaneering International, Inc. | 2,620,475 | ||||||
414,825 | RPC, Inc. | 5,882,219 | ||||||
|
| |||||||
17,061,640 | ||||||||
|
| |||||||
Oil & Gas Exploration & Production 0.3% | ||||||||
456,863 | EP Energy Corp., Class A* | 2,065,021 | ||||||
437,069 | WPX Energy, Inc.* | 3,055,112 | ||||||
|
| |||||||
5,120,133 | ||||||||
|
| |||||||
Oil & Gas Refining & Marketing 0.2% | ||||||||
38,475 | CVR Energy, Inc.†† | 1,004,197 | ||||||
77,771 | Delek US Holdings, Inc. | 1,185,230 | ||||||
50,917 | Western Refining, Inc. | 1,481,176 | ||||||
|
| |||||||
3,670,603 | ||||||||
|
| |||||||
Packaged Foods & Meats 1.4% | ||||||||
286,067 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 26,000,789 | ||||||
|
|
75
Table of Contents
WASATCH SMALL CAP GROWTH FUND (WAAEX / WIAEX) — Schedule of Investments (continued) | ||
| ||
|
Shares | Value | |||||||
Personal Products 0.6% | ||||||||
945,654 | Colgate-Palmolive India Ltd. (India) | $ | 11,781,673 | |||||
|
| |||||||
Pharmaceuticals 1.8% | ||||||||
1,363,036 | Auris Medical Holding AG* (Switzerland) | 4,961,451 | ||||||
1,038,812 | Cempra, Inc.* | 18,199,986 | ||||||
374,723 | Intra-Cellular Therapies, Inc.* | 10,417,300 | ||||||
|
| |||||||
33,578,737 | ||||||||
|
| |||||||
Regional Banks 6.0% | ||||||||
515,466 | Bank of Hawaii Corp. | 35,196,019 | ||||||
585,554 | Eagle Bancorp, Inc.* | 28,106,592 | ||||||
758,469 | Glacier Bancorp, Inc. | 19,280,282 | ||||||
811,000 | Metro Bank plc* (United Kingdom) | 21,916,524 | ||||||
205,315 | Texas Capital Bancshares, Inc.* | 7,879,990 | ||||||
|
| |||||||
112,379,407 | ||||||||
|
| |||||||
Research & Consulting Services 0.6% | ||||||||
412,649 | Stantec, Inc. (Canada) | 10,464,779 | ||||||
|
| |||||||
Restaurants 4.9% | ||||||||
495,425 | Chuy’s Holdings, Inc.* | 15,392,855 | ||||||
622,375 | Fiesta Restaurant Group, Inc.* | 20,401,452 | ||||||
1,248,612 | Jubilant Foodworks Ltd. (India) | 24,021,015 | ||||||
1,042,768 | Papa Murphy’s Holdings, Inc.* ‡‡ | 12,461,078 | ||||||
493,833 | Zoe’s Kitchen, Inc.* | 19,254,549 | ||||||
|
| |||||||
91,530,949 | ||||||||
|
| |||||||
Semiconductors 4.0% | ||||||||
518,312 | Cavium, Inc.* | 31,699,962 | ||||||
438,732 | Monolithic Power Systems, Inc. | 27,920,905 | ||||||
300,937 | Power Integrations, Inc. | 14,944,531 | ||||||
|
| |||||||
74,565,398 | ||||||||
|
| |||||||
Specialty Stores 1.3% | ||||||||
589,392 | Five Below, Inc.* | 24,365,465 | ||||||
|
| |||||||
Systems Software 4.6% | ||||||||
142,828 | CyberArk Software Ltd.* (Israel) | 6,088,758 | ||||||
754,194 | FleetMatics Group plc* | 30,703,238 | ||||||
860,002 | Fortinet, Inc.* | 26,341,861 | ||||||
872,611 | Infoblox, Inc.* | 14,921,648 | ||||||
711,894 | TubeMogul, Inc.* | 9,211,908 | ||||||
|
| |||||||
87,267,413 | ||||||||
|
| |||||||
Trading Companies & Distributors 0.9% | ||||||||
214,753 | MSC Industrial Direct Co., Inc., Class A | 16,387,801 | ||||||
|
| |||||||
Trucking 3.9% | ||||||||
2,824,230 | Knight Transportation, Inc. | 73,853,615 | ||||||
|
| |||||||
Total Common Stocks (cost $1,413,924,935) | 1,829,419,889 | |||||||
|
|
Shares | Value | |||||||
PREFERRED STOCKS 2.0% | ||||||||
Biotechnology 0.0% | ||||||||
677,966 | Nanosys, Inc., Series D Pfd.* *** † | $ | 103,051 | |||||
161,519 | Nanosys, Inc., Series E Pfd.* *** † | 98,704 | ||||||
|
| |||||||
201,755 | ||||||||
|
| |||||||
Oil & Gas Equipment & Services 0.6% | ||||||||
5,818,582 | Drilling Info Holdings, Inc., Series B Pfd.* *** † | 10,998,865 | ||||||
|
| |||||||
Systems Software 1.4% | ||||||||
1,114,610 | DataStax, Inc., Series E Pfd.* *** † | 6,353,277 | ||||||
33,296 | DocuSign, Inc., Series B Pfd.* *** † | 555,710 | ||||||
9,974 | DocuSign, Inc., Series B-1 Pfd.* *** † | 166,466 | ||||||
23,905 | DocuSign, Inc., Series D Pfd.* *** † | 398,974 | ||||||
618,152 | DocuSign, Inc., Series E Pfd.* *** † | 10,316,957 | ||||||
157,124 | DocuSign, Inc., Series F Pfd.* *** † | 2,622,400 | ||||||
505,604 | ForeScout Technologies, Inc., Series G, Pfd.* *** † | 6,000,003 | ||||||
|
| |||||||
26,413,787 | ||||||||
|
| |||||||
Total Preferred Stocks (cost $43,534,917) | 37,614,407 | |||||||
|
| |||||||
LIMITED PARTNERSHIP INTEREST 0.2% | ||||||||
Asset Management & Custody Banks 0.2% | ||||||||
Greenspring Global Partners II-B, L.P.* *** † | 2,951,119 | |||||||
Greenspring Global Partners III-B, L.P.* *** † | 1,422,675 | |||||||
|
| |||||||
4,373,794 | ||||||||
|
| |||||||
Total Limited Partnership Interest (cost $4,406,451) | 4,373,794 | |||||||
|
| |||||||
WARRANTS 0.0% | ||||||||
Biotechnology 0.0% | ||||||||
39,337 | Argos Therapeutics, Inc., expiring 3/14/2021* *** † | 51,217 | ||||||
|
| |||||||
Total Warrants (cost $4,917) | 51,217 | |||||||
|
|
76
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 0.8% | ||||||||
Repurchase Agreement 0.8% | ||||||||
$15,178,495 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $14,870,000 of United States Treasury Notes 2.125% due 12/31/22; value: $15,483,388; repurchase proceeds: $15,178,508†† (cost $15,178,495) | $ | 15,178,495 | |||||
|
| |||||||
Total Short-Term Investments (cost $15,178,495) | 15,178,495 | |||||||
|
| |||||||
Total Investments (cost $1,477,049,715) 100.6% | 1,886,637,802 | |||||||
Liabilities less Other Assets (0.6%) | (11,106,006 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 1,875,531,796 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
††All or a portion of this security has been designated as collateral for purchase commitments (see Note 10).
‡‡Affiliated company (see Note 8).
ADR American Depositary Receipt.
PIPE Private Investment in a Public Equity.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Small Cap Growth Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 0.6 | |||
Canada | 0.6 | |||
Germany | 0.7 | |||
India | 10.2 | |||
Ireland | 2.3 | |||
Israel | 0.3 | |||
Japan | 1.1 | |||
Switzerland | 0.3 | |||
United Arab Emirates | 1.8 | |||
United Kingdom | 2.1 | |||
United States | 80.0 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
77
Table of Contents
WASATCH SMALL CAP VALUE FUND (WMCVX / WICVX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 93.8% | ||||||||
Aerospace & Defense 2.6% | ||||||||
150,227 | HEICO Corp., Class A | $ | 7,150,805 | |||||
|
| |||||||
Airlines 5.7% | ||||||||
38,734 | Allegiant Travel Co. | 6,896,976 | ||||||
182,687 | Spirit Airlines, Inc.* | 8,765,322 | ||||||
|
| |||||||
15,662,298 | ||||||||
|
| |||||||
Application Software 5.0% | ||||||||
203,218 | Ebix, Inc. | 8,289,262 | ||||||
91,270 | Globant S.A.* (Argentina) | 2,816,592 | ||||||
74,131 | Interactive Intelligence Group, Inc.* | 2,699,851 | ||||||
|
| |||||||
13,805,705 | ||||||||
|
| |||||||
Asset Management & Custody Banks 3.7% | ||||||||
186,030 | Ares Capital Corp. | 2,760,685 | ||||||
113,912 | Artisan Partners Asset Management, Inc. | 3,513,046 | ||||||
225,878 | Solar Capital Ltd. | 3,903,172 | ||||||
|
| |||||||
10,176,903 | ||||||||
|
| |||||||
Auto Parts & Equipment 1.9% | ||||||||
95,209 | Dorman Products, Inc.* | 5,181,274 | ||||||
|
| |||||||
Biotechnology 0.8% | ||||||||
333,394 | Exact Sciences Corp.* | 2,247,076 | ||||||
|
| |||||||
Building Products 1.2% | ||||||||
98,614 | Caesarstone Sdot-Yam Ltd.* (Israel) | 3,387,391 | ||||||
|
| |||||||
Consumer Finance 3.9% | ||||||||
30,023 | Credit Acceptance Corp.* | 5,450,676 | ||||||
84,136 | PRA Group, Inc.* | 2,472,757 | ||||||
122,543 | Shriram City Union Finance Ltd. (India) | 2,784,963 | ||||||
|
| |||||||
10,708,396 | ||||||||
|
| |||||||
Diversified Banks 2.5% | ||||||||
2,552,010 | City Union Bank Ltd. (India) | 3,653,298 | ||||||
256,222 | Yes Bank Ltd. (India) | 3,354,517 | ||||||
|
| |||||||
7,007,815 | ||||||||
|
| |||||||
Diversified Support Services 1.8% | ||||||||
119,329 | Copart, Inc.* | 4,865,043 | ||||||
|
| |||||||
Electronic Manufacturing Services 4.8% | ||||||||
409,932 | Fabrinet* | 13,261,300 | ||||||
|
| |||||||
Footwear 1.9% | ||||||||
169,852 | Skechers U.S.A., Inc., Class A* | 5,171,993 | ||||||
|
| |||||||
Health Care Facilities 3.2% | ||||||||
391,630 | Ensign Group, Inc. (The) | 8,866,503 | ||||||
|
| |||||||
Health Care REITs 4.4% | ||||||||
582,553 | CareTrust REIT, Inc. | 7,398,423 | ||||||
238,550 | Sabra Health Care REIT, Inc. | 4,792,470 | ||||||
|
| |||||||
12,190,893 | ||||||||
|
| |||||||
Health Care Services 4.2% | ||||||||
74,906 | Air Methods Corp.* | 2,713,096 | ||||||
105,987 | Landauer, Inc. | 3,504,990 | ||||||
149,429 | LHC Group, Inc.* | 5,313,695 | ||||||
|
| |||||||
11,531,781 | ||||||||
|
| |||||||
Homebuilding 2.8% | ||||||||
316,146 | LGI Homes, Inc.* | 7,653,895 | ||||||
|
| |||||||
Homefurnishing Retail 1.0% | ||||||||
145,334 | Select Comfort Corp.* | 2,818,026 | ||||||
|
| |||||||
Hotel & Resort REITs 1.8% | ||||||||
414,068 | Summit Hotel Properties, Inc. | 4,956,394 | ||||||
|
|
Shares | Value | |||||||
Internet Software & Services 1.8% | ||||||||
54,630 | Cimpress N.V.* | $ | 4,954,395 | |||||
|
| |||||||
IT Consulting & Other Services 2.1% | ||||||||
36,987 | EPAM Systems, Inc.* | 2,761,819 | ||||||
53,278 | Luxoft Holding, Inc.* | 2,931,889 | ||||||
|
| |||||||
5,693,708 | ||||||||
|
| |||||||
Life Sciences Tools & Services 1.0% | ||||||||
38,026 | ICON plc* (Ireland) | 2,855,753 | ||||||
|
| |||||||
Mortgage REITs 5.9% | ||||||||
949,169 | Arbor Realty Trust, Inc. | 6,425,874 | ||||||
239,630 | Colony Capital, Inc., Class A | 4,018,595 | ||||||
858,899 | MFA Financial, Inc. | 5,883,458 | ||||||
|
| |||||||
16,327,927 | ||||||||
|
| |||||||
Oil & Gas Equipment & Services 0.4% | ||||||||
82,203 | Geospace Technologies Corp.* | 1,014,385 | ||||||
|
| |||||||
Oil & Gas Exploration & Production 1.1% | ||||||||
1,283,739 | Gran Tierra Energy, Inc.* (Colombia) | 3,170,835 | ||||||
|
| |||||||
Oil & Gas Refining & Marketing 1.1% | ||||||||
63,466 | World Fuel Services Corp. | 3,083,178 | ||||||
|
| |||||||
Personal Products 1.5% | ||||||||
112,025 | Nu Skin Enterprises, Inc., Class A | 4,284,956 | ||||||
|
| |||||||
Pharmaceuticals 2.4% | ||||||||
136,523 | Cempra, Inc.* | 2,391,883 | ||||||
280,914 | Egalet Corp.* | 1,927,070 | ||||||
3,266,806 | Marksans Pharma Ltd. (India) | 2,279,081 | ||||||
|
| |||||||
6,598,034 | ||||||||
|
| |||||||
Property & Casualty Insurance 1.1% | ||||||||
165,477 | Atlas Financial Holdings, Inc.* | 3,001,753 | ||||||
|
| |||||||
Regional Banks 10.5% | ||||||||
244,644 | Avenue Financial Holdings, Inc.* | 4,738,754 | ||||||
67,494 | Cardinal Financial Corp. | 1,373,503 | ||||||
272,160 | Customers Bancorp, Inc.* | 6,431,141 | ||||||
161,678 | People’s Utah Bancorp | 2,559,363 | ||||||
112,729 | Pinnacle Financial Partners, Inc. | 5,530,485 | ||||||
60,664 | Prosperity Bancshares, Inc. | 2,814,203 | ||||||
154,706 | Webster Financial Corp. | 5,553,945 | ||||||
|
| |||||||
29,001,394 | ||||||||
|
| |||||||
Research & Consulting Services 1.2% | ||||||||
192,218 | Franklin Covey Co.* | 3,381,115 | ||||||
|
| |||||||
Restaurants 1.0% | ||||||||
226,712 | Papa Murphy’s Holdings, Inc.* | 2,709,208 | ||||||
|
| |||||||
Semiconductor Equipment 1.2% | ||||||||
241,041 | PDF Solutions, Inc.* | 3,225,129 | ||||||
|
| |||||||
Semiconductors 1.7% | ||||||||
238,084 | Diodes, Inc.* | 4,785,488 | ||||||
|
| |||||||
Specialty Stores 1.0% | ||||||||
75,927 | Outerwall, Inc. | 2,808,540 | ||||||
|
| |||||||
Systems Software 1.3% | ||||||||
171,597 | AVG Technologies N.V.* | 3,560,638 | ||||||
|
| |||||||
Technology Distributors 0.6% | ||||||||
172,586 | Electro Rent Corp. | 1,598,146 | ||||||
|
| |||||||
Trucking 3.7% | ||||||||
133,864 | Knight Transportation, Inc. | 3,500,544 | ||||||
39,252 | Old Dominion Freight Line, Inc.* | 2,732,724 | ||||||
222,440 | Swift Transportation Co.* | 4,144,057 | ||||||
|
| |||||||
10,377,325 | ||||||||
|
| |||||||
Total Common Stocks (cost $213,303,172) | 259,075,398 | |||||||
|
|
78
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
LIMITED PARTNERSHIP INTEREST 0.9% | ||||||||
Oil & Gas Storage & Transportation 0.9% | ||||||||
81,633 | Delek Logistics Partners L.P. | $ | 2,563,276 | |||||
|
| |||||||
Total Limited Partnership Interest (cost $3,449,494) | 2,563,276 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 5.7% | ||||||||
Repurchase Agreement 5.7% | ||||||||
$15,616,570 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $15,300,000 of United States Treasury Notes 2.125% due 12/31/22; value: $15,931,125; repurchase proceeds: $15,616,583 (cost $15,616,570) | $ | 15,616,570 | |||||
|
| |||||||
Total Short-Term Investments (cost $15,616,570) | 15,616,570 | |||||||
|
| |||||||
Total Investments (cost $232,369,236) 100.4% | 277,255,244 | |||||||
Liabilities less Other Assets (0.4%) | (1,122,079 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 276,133,165 | ||||||
|
| |||||||
*Non-income producing.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Small Cap Value Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 1.1 | |||
Colombia | 1.2 | |||
India | 4.6 | |||
Ireland | 1.1 | |||
Israel | 1.3 | |||
United States | 90.7 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
79
Table of Contents
WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 72.5% | ||||||||
Asset Management & Custody Banks 10.5% | ||||||||
102,972 | Alcentra Capital Corp. | $ | 1,197,564 | |||||
74,901 | American Capital Senior Floating Ltd. | 751,257 | ||||||
12,400 | Ameriprise Financial, Inc. | 1,165,724 | ||||||
6,500 | BlackRock Capital Investment Corp. | 61,165 | ||||||
66,975 | FS Investment Corp. | 614,161 | ||||||
5,000 | Hercules Capital, Inc. | 60,050 | ||||||
159,900 | Medallion Financial Corp. | 1,475,877 | ||||||
85,479 | NorthStar Asset Management Group, Inc. | 970,187 | ||||||
35,055 | PennantPark Investment Corp. | 212,433 | ||||||
|
| |||||||
6,508,418 | ||||||||
|
| |||||||
Automotive Retail 2.3% | ||||||||
38,000 | Penske Automotive Group, Inc. | 1,440,200 | ||||||
|
| |||||||
Broadcasting 4.9% | ||||||||
55,900 | CBS Corp., Class B | 3,079,531 | ||||||
|
| |||||||
Cable & Satellite 6.2% | ||||||||
63,000 | Comcast Corp., Class A | 3,848,040 | ||||||
|
| |||||||
Consumer Finance 3.9% | ||||||||
16,000 | Capital One Financial Corp. | 1,108,960 | ||||||
26,000 | Discover Financial Services | 1,323,920 | ||||||
|
| |||||||
2,432,880 | ||||||||
|
| |||||||
Data Processing & Outsourced Services 7.5% | ||||||||
24,650 | MasterCard, Inc., Class A | 2,329,425 | ||||||
30,440 | Visa, Inc., Class A | 2,328,051 | ||||||
|
| |||||||
4,657,476 | ||||||||
|
| |||||||
Diversified REITs 3.3% | ||||||||
52,793 | Gramercy Property Trust | 446,101 | ||||||
84,700 | NorthStar Realty Finance Corp. | 1,111,264 | ||||||
355,714 | Star Asia Financial Ltd.* *** † | 497,999 | ||||||
|
| |||||||
2,055,364 | ||||||||
|
| |||||||
Drug Retail 0.2% | ||||||||
1,000 | CVS Health Corp. | 103,730 | ||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 1.9% | ||||||||
13,200 | Monsanto Co. | 1,158,168 | ||||||
|
| |||||||
Health Care Distributors 0.6% | ||||||||
2,600 | McKesson Corp. | 408,850 | ||||||
|
| |||||||
Integrated Oil & Gas 3.5% | ||||||||
78,273 | Suncor Energy, Inc. (Canada) | 2,178,717 | ||||||
|
| |||||||
Integrated Telecommunication Services 1.7% | ||||||||
19,400 | Verizon Communications, Inc. | 1,049,152 | ||||||
|
| |||||||
Mortgage REITs 15.4% | ||||||||
39,400 | American Capital Mortgage Investment Corp. | 578,392 | ||||||
45,000 | Arbor Realty Trust, Inc. | 304,650 | ||||||
13,000 | Blackstone Mortgage Trust, Inc., Class A | 349,180 | ||||||
66,191 | Colony Capital, Inc., Class A | 1,110,023 | ||||||
177,200 | Great Ajax Corp. | 1,982,868 | ||||||
187,100 | MFA Financial, Inc. | 1,281,635 | ||||||
112,500 | New Residential Investment Corp. | 1,308,375 | ||||||
84,300 | PennyMac Mortgage Investment Trust | 1,149,852 | ||||||
61,700 | Starwood Property Trust, Inc. | 1,167,981 | ||||||
21,981 | ZAIS Financial Corp. | 327,957 | ||||||
|
| |||||||
9,560,913 | ||||||||
|
| |||||||
Personal Products 4.2% | ||||||||
27,374 | Herbalife Ltd.* | 1,685,143 | ||||||
24,300 | Nu Skin Enterprises, Inc., Class A | 929,475 | ||||||
|
| |||||||
2,614,618 | ||||||||
|
|
Shares | Value | |||||||
Railroads 3.1% | ||||||||
30,800 | Canadian National Railway Co. (Canada) | $ | 1,923,682 | |||||
|
| |||||||
Technology Hardware, Storage & Peripherals 1.5% | ||||||||
8,725 | Apple, Inc. | 950,938 | ||||||
|
| |||||||
Trading Companies & Distributors 1.8% | ||||||||
4,830 | W.W. Grainger, Inc. | 1,127,467 | ||||||
|
| |||||||
Total Common Stocks (cost $41,651,525) | 45,098,144 | |||||||
|
| |||||||
EXCHANGE-TRADED FUNDS 0.7% | ||||||||
Asset Management & Custody Banks 0.7% | ||||||||
6,900 | PowerShares Dynamic Pharmaceuticals Portfolio | 414,552 | ||||||
|
| |||||||
Total Exchange-Traded Funds (cost $198,779) | 414,552 | |||||||
|
| |||||||
LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST 1.9% | ||||||||
Asset Management & Custody Banks 1.8% | ||||||||
63,779 | Ellington Financial, LLC | 1,111,030 | ||||||
|
| |||||||
Trading Companies & Distributors 0.1% | ||||||||
6,000 | Fortress Transportation & Infrastructure Investors, LLC | 59,700 | ||||||
|
| |||||||
Total Limited Liability Company Membership Interest (cost $1,205,175) | 1,170,730 | |||||||
|
| |||||||
LIMITED PARTNERSHIP INTEREST 9.8% | ||||||||
Asset Management & Custody Banks 5.9% | ||||||||
64,100 | Blackstone Group L.P. | 1,798,005 | ||||||
126,100 | KKR & Co. L.P. | 1,852,409 | ||||||
|
| |||||||
3,650,414 | ||||||||
|
| |||||||
Oil & Gas Storage & Transportation 3.9% | ||||||||
35,282 | Magellan Midstream Partners L.P. | 2,427,402 | ||||||
|
| |||||||
Total Limited Partnership Interest (cost $7,159,088) | 6,077,816 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
CORPORATE BONDS 0.0% | ||||||||
Gold 0.0% | ||||||||
$205,804 | Redcorp Ventures Ltd., 13.00%, 7/11/12, Series D* *** † §§ (Canada) | $ | 380 | |||||
|
| |||||||
Total Corporate Bonds (cost $151,993) | 380 | |||||||
|
|
80
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 11.5% | ||||||||
Repurchase Agreement 11.5% | ||||||||
$ 7,155,317 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $6,690,000 of United States Treasury Notes 2.750% due 11/15/23; value: $7,300,463; repurchase proceeds: $7,155,323 (cost $7,155,317) | $ | 7,155,317 | |||||
|
| |||||||
Total Short-Term Investments (cost $7,155,317) | 7,155,317 | |||||||
|
| |||||||
Total Investments (cost $57,521,877) 96.4% | 59,916,939 | |||||||
Other Assets less Liabilities 3.6% | 2,269,129 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 62,186,068 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
§§In default.
REIT Real Estate Investment Trust.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Strategic Income Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Canada | 7.8 | |||
United States | 92.2 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
81
Table of Contents
WASATCH ULTRA GROWTH FUND (WAMCX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 92.9% | ||||||||
Air Freight & Logistics 1.6% | ||||||||
54,379 | Echo Global Logistics, Inc.* | $ | 1,476,934 | |||||
|
| |||||||
Application Software 12.3% | ||||||||
112,329 | Exa Corp.* | 1,454,661 | ||||||
39,374 | Globant S.A.* (Argentina) | 1,215,082 | ||||||
36,065 | HubSpot, Inc.* | 1,573,155 | ||||||
42,403 | Interactive Intelligence Group, Inc.* | 1,544,317 | ||||||
55,860 | Paylocity Holding Corp.* | 1,828,856 | ||||||
12,335 | Ultimate Software Group, Inc.* | 2,386,822 | ||||||
65,346 | Zendesk, Inc.* | 1,367,692 | ||||||
|
| |||||||
11,370,585 | ||||||||
|
| |||||||
Biotechnology 10.0% | ||||||||
136,010 | Argos Therapeutics, Inc.* | 870,464 | ||||||
7,300 | Argos Therapeutics, Inc. PIPE* *** † | 39,245 | ||||||
27,107 | Bellicum Pharmaceuticals, Inc.* | 253,451 | ||||||
153,840 | ChemoCentryx, Inc.* | 383,062 | ||||||
168,628 | Cytokinetics, Inc.* | 1,188,827 | ||||||
38,630 | Esperion Therapeutics, Inc.* | 653,233 | ||||||
120,465 | Exact Sciences Corp.* | 811,934 | ||||||
27,328 | Flexion Therapeutics, Inc.* | 251,418 | ||||||
99,737 | Inovio Pharmaceuticals, Inc.* | 868,709 | ||||||
193,443 | MEI Pharma, Inc.* | 243,738 | ||||||
31,845 | Pfenex, Inc.* | 313,036 | ||||||
267,777 | Sangamo BioSciences, Inc.* | 1,620,051 | ||||||
50,237 | Seattle Genetics, Inc.* | 1,762,816 | ||||||
|
| |||||||
9,259,984 | ||||||||
|
| |||||||
Building Products 1.3% | ||||||||
24,818 | Trex Co., Inc.* | 1,189,527 | ||||||
|
| |||||||
Communications Equipment 0.0% | ||||||||
3,515 | Xtera Communications, Inc.* *** † | 9,440 | ||||||
|
| |||||||
Department Stores 0.7% | ||||||||
85,841 | V-Mart Retail Ltd. (India) | 609,238 | ||||||
|
| |||||||
Diversified Banks 3.0% | ||||||||
875,301 | City Union Bank Ltd. (India) | 1,253,026 | ||||||
118,351 | Yes Bank Ltd. (India) | 1,549,478 | ||||||
|
| |||||||
2,802,504 | ||||||||
|
| |||||||
Electronic Manufacturing Services 1.7% | ||||||||
16,006 | IPG Photonics Corp.* | 1,537,857 | ||||||
|
| |||||||
Environmental & Facilities Services 1.0% | ||||||||
13,724 | Waste Connections, Inc. | 886,433 | ||||||
|
| |||||||
Food Distributors 0.9% | ||||||||
41,702 | Chefs’ Warehouse, Inc. (The)* | 846,134 | ||||||
|
| |||||||
Footwear 1.3% | ||||||||
40,370 | Skechers U.S.A., Inc., Class A* | 1,229,267 | ||||||
|
| |||||||
General Merchandise Stores 0.8% | ||||||||
33,141 | Ollie’s Bargain Outlet Holdings, Inc.* | 776,494 | ||||||
|
| |||||||
Health Care Equipment 5.8% | ||||||||
103,505 | AtriCure, Inc.* | 1,741,989 | ||||||
70,051 | Entellus Medical, Inc.* | 1,274,228 | ||||||
65,443 | Novadaq Technologies, Inc.* (Canada) | 725,763 | ||||||
83,583 | Oxford Immunotec Global plc* | 828,308 | ||||||
87,819 | Tandem Diabetes Care, Inc.* | 764,903 | ||||||
|
| |||||||
5,335,191 | ||||||||
|
| |||||||
Health Care Services 0.6% | ||||||||
39,000 | Dr. Lal PathLabs Ltd.* (India) | 543,017 | ||||||
|
|
Shares | Value | |||||||
Health Care Technology 0.7% | ||||||||
17,234 | Medidata Solutions, Inc.* | $ | 667,128 | |||||
|
| |||||||
Homebuilding 2.7% | ||||||||
36,498 | Installed Building Products, Inc.* | 971,212 | ||||||
63,631 | LGI Homes, Inc.* | 1,540,506 | ||||||
|
| |||||||
2,511,718 | ||||||||
|
| |||||||
Industrial Machinery 3.6% | ||||||||
19,799 | Arcam AB* (Sweden) | 428,193 | ||||||
37,056 | Proto Labs, Inc.* | 2,856,647 | ||||||
|
| |||||||
3,284,840 | ||||||||
|
| |||||||
Internet Retail 2.5% | ||||||||
88,478 | MakeMyTrip Ltd.* (India) | 1,600,567 | ||||||
15,513 | Wayfair, Inc., Class A* | 670,472 | ||||||
|
| |||||||
2,271,039 | ||||||||
|
| |||||||
Internet Software & Services 6.3% | ||||||||
59,265 | Cornerstone OnDemand, Inc.* | 1,942,114 | ||||||
29,152 | Demandware, Inc.* | 1,139,843 | ||||||
45,429 | Reis, Inc. | 1,069,853 | ||||||
18,592 | Shutterstock, Inc.* | 682,884 | ||||||
24,019 | SPS Commerce, Inc.* | 1,031,376 | ||||||
|
| |||||||
5,866,070 | ||||||||
|
| |||||||
IT Consulting & Other Services 1.3% | ||||||||
11,193 | Cognizant Technology Solutions Corp., Class A* | 701,801 | ||||||
9,368 | Luxoft Holding, Inc.* | 515,521 | ||||||
|
| |||||||
1,217,322 | ||||||||
|
| |||||||
Life Sciences Tools & Services 0.4% | ||||||||
45,313 | Fluidigm Corp.* | 365,676 | ||||||
|
| |||||||
Managed Health Care 2.0% | ||||||||
48,575 | HealthEquity, Inc.* | 1,198,345 | ||||||
69,467 | Trupanion, Inc.* | 684,250 | ||||||
|
| |||||||
1,882,595 | ||||||||
|
| |||||||
Oil & Gas Equipment & Services 0.3% | ||||||||
2,358 | Core Laboratories N.V. | 265,063 | ||||||
|
| |||||||
Oil & Gas Exploration & Production 0.2% | ||||||||
18,589 | EP Energy Corp., Class A* | 84,023 | ||||||
20,479 | WPX Energy, Inc.* | 143,148 | ||||||
|
| |||||||
227,171 | ||||||||
|
| |||||||
Oil & Gas Refining & Marketing 0.2% | ||||||||
144,050 | Amyris, Inc.* | 159,896 | ||||||
|
| |||||||
Packaged Foods & Meats 2.5% | ||||||||
201,767 | Freshpet, Inc.* | 1,478,952 | ||||||
4,809 | GlaxoSmithKline Consumer Healthcare Ltd. (India) | 437,093 | ||||||
228,398 | Prabhat Dairy Ltd.* (India) | 376,280 | ||||||
|
| |||||||
2,292,325 | ||||||||
|
| |||||||
Pharmaceuticals 3.0% | ||||||||
163,506 | Auris Medical Holding AG* (Switzerland) | 595,162 | ||||||
48,455 | Cempra, Inc.* | 848,931 | ||||||
103,585 | Egalet Corp.* | 710,593 | ||||||
20,966 | Intra-Cellular Therapies, Inc.* | 582,855 | ||||||
|
| |||||||
2,737,541 | ||||||||
|
| |||||||
Regional Banks 3.3% | ||||||||
35,222 | Avenue Financial Holdings, Inc.* | 682,250 | ||||||
16,160 | Bank of the Ozarks, Inc. | 678,235 | ||||||
44,397 | Customers Bancorp, Inc.* | 1,049,101 | ||||||
23,000 | Metro Bank plc* (United Kingdom) | 621,554 | ||||||
|
| |||||||
3,031,140 | ||||||||
|
|
82
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
Restaurants 1.9% | ||||||||
22,684 | Chuy’s Holdings, Inc.* | $ | 704,792 | |||||
23,094 | Jubilant Foodworks Ltd. (India) | 444,286 | ||||||
16,443 | Zoe’s Kitchen, Inc.* | 641,113 | ||||||
|
| |||||||
1,790,191 | ||||||||
|
| |||||||
Semiconductor Equipment 2.6% | ||||||||
181,278 | PDF Solutions, Inc.* | 2,425,500 | ||||||
|
| |||||||
Semiconductors 4.9% | ||||||||
21,858 | Cavium, Inc.* | 1,336,835 | ||||||
19,991 | Monolithic Power Systems, Inc. | 1,272,227 | ||||||
14,275 | NVE Corp. | 806,966 | ||||||
22,329 | Power Integrations, Inc. | 1,108,858 | ||||||
|
| |||||||
4,524,886 | ||||||||
|
| |||||||
Specialized Consumer Services 0.7% | ||||||||
51,363 | LifeLock, Inc.* | 619,951 | ||||||
|
| |||||||
Specialty Chemicals 1.7% | ||||||||
20,027 | Balchem Corp. | 1,242,075 | ||||||
409,588 | EcoSynthetix, Inc.* (Canada) | 378,241 | ||||||
|
| |||||||
1,620,316 | ||||||||
|
| |||||||
Specialty Stores 2.0% | ||||||||
70,013 | DavidsTea, Inc.* (Canada) | 847,857 | ||||||
24,494 | Five Below, Inc.* | 1,012,582 | ||||||
|
| |||||||
1,860,439 | ||||||||
|
| |||||||
Systems Software 7.6% | ||||||||
53,561 | FleetMatics Group plc* | 2,180,468 | ||||||
82,526 | Infoblox, Inc.* | 1,411,195 | ||||||
13,269 | NetSuite, Inc.* †† | 908,794 | ||||||
32,438 | Qualys, Inc.* | 821,006 | ||||||
99,458 | TubeMogul, Inc.* | 1,286,986 | ||||||
24,505 | VASCO Data Security International, Inc.* | 377,377 | ||||||
|
| |||||||
6,985,826 | ||||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 0.4% | ||||||||
83,412 | Intevac, Inc.* | 375,354 | ||||||
|
| |||||||
Trucking 1.1% | ||||||||
37,241 | Knight Transportation, Inc. | 973,852 | ||||||
|
| |||||||
Total Common Stocks (cost $74,580,468) | 85,828,444 | |||||||
|
| |||||||
PREFERRED STOCKS 1.4% | ||||||||
Biotechnology 0.1% | ||||||||
169,492 | Nanosys, Inc., Series D Pfd.* *** † | 25,763 | ||||||
40,380 | Nanosys, Inc., Series E Pfd.* *** † | 24,676 | ||||||
|
| |||||||
50,439 | ||||||||
|
| |||||||
Health Care Technology 0.4% | ||||||||
253,064 | Data Sciences International, Inc., Series B Pfd.* *** † | 369,473 | ||||||
|
| |||||||
Oil & Gas Equipment & Services 0.9% | ||||||||
435,920 | Drilling Info Holdings, Inc., Series B Pfd.* *** † | 824,020 | ||||||
|
| |||||||
Total Preferred Stocks (cost $2,171,238) | 1,243,932 | |||||||
|
|
Shares | Value | |||||||
LIMITED PARTNERSHIP INTEREST 4.4% | ||||||||
Asset Management & Custody Banks 4.4% | ||||||||
Greenspring Global Partners II-B, L.P.* *** † | $ | 2,655,997 | ||||||
Greenspring Global Partners III-B, L.P.* *** † | 1,422,675 | |||||||
|
| |||||||
4,078,672 | ||||||||
|
| |||||||
Total Limited Partnership Interest (cost $4,111,329) | 4,078,672 | |||||||
|
| |||||||
WARRANTS 0.0% | ||||||||
Biotechnology 0.0% | ||||||||
5,475 | Argos Therapeutics, Inc., expiring 3/14/2021* *** † | 7,128 | ||||||
|
| |||||||
Total Warrants (cost $684) | 7,128 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 1.4% | ||||||||
Repurchase Agreement 1.4% | ||||||||
$1,304,609 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $1,280,000 of United States Treasury Notes 2.125% due 12/31/22; value: $1,332,800; repurchase proceeds: $1,304,610†† (cost $1,304,609) | $ | 1,304,609 | |||||
|
| |||||||
Total Short-Term Investments (cost $1,304,609) | 1,304,609 | |||||||
|
| |||||||
Total Investments (cost $82,168,328) 100.1% | 92,462,785 | |||||||
Liabilities less Other Assets (0.1%) | (48,944 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 92,413,841 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
††All or a portion of this security has been designated as collateral for an unfunded loan commitment and purchase commitments (see Note 3 and Note 10, respectively).
PIPE Private Investment in a Public Equity.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch Ultra Growth Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Argentina | 1.3 | |||
Canada | 2.1 | |||
India | 7.5 | |||
Sweden | 0.5 | |||
Switzerland | 0.7 | |||
United Kingdom | 0.7 | |||
United States | 87.2 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
83
Table of Contents
WASATCH WORLD INNOVATORS FUND (WAGTX / WIGTX) — Schedule of Investments | ||
| ||
|
Shares | Value | |||||||
COMMON STOCKS 80.2% | ||||||||
Aerospace & Defense 2.8% | ||||||||
451,111 | Avon Rubber plc (United Kingdom) | $ | 5,216,779 | |||||
|
| |||||||
Air Freight & Logistics 0.6% | ||||||||
6,690 | FedEx Corp. | 1,088,597 | ||||||
|
| |||||||
Alternative Carriers 2.8% | ||||||||
882,261 | Gamma Communications plc (United Kingdom) | 5,291,593 | ||||||
|
| |||||||
Apparel, Accessories & Luxury Goods 0.4% | ||||||||
36,419 | Burberry Group plc (United Kingdom) | 714,585 | ||||||
|
| |||||||
Application Software 0.1% | ||||||||
10,080 | Pro-Ship, Inc. (Japan) | 178,272 | ||||||
|
| |||||||
Asset Management & Custody Banks 1.1% | ||||||||
7,055 | Ameriprise Financial, Inc. | 663,241 | ||||||
78,075 | NorthStar Asset Management Group, Inc. | 886,151 | ||||||
238,300 | Tarpon Investimentos S.A. (Brazil) | 445,949 | ||||||
|
| |||||||
1,995,341 | ||||||||
|
| |||||||
Automotive Retail 4.6% | ||||||||
243,044 | Mekonomen AB (Sweden) | 6,020,055 | ||||||
50,900 | Penske Automotive Group, Inc. | 1,929,110 | ||||||
32,182 | Yellow Hat Ltd. (Japan) | 647,244 | ||||||
|
| |||||||
8,596,409 | ||||||||
|
| |||||||
Biotechnology 4.1% | ||||||||
473,971 | Abcam plc (United Kingdom) | 4,019,729 | ||||||
177,837 | Bioventix plc (United Kingdom) | 2,601,055 | ||||||
14,000 | Myriad Genetics, Inc.* | 524,020 | ||||||
41,655 | OPKO Health, Inc.* | 432,795 | ||||||
|
| |||||||
7,577,599 | ||||||||
|
| |||||||
Broadcasting 1.5% | ||||||||
37,900 | CBS Corp., Class B | 2,087,911 | ||||||
26,045 | Discovery Communications, Inc., Class A* | 745,668 | ||||||
|
| |||||||
2,833,579 | ||||||||
|
| |||||||
Cable & Satellite 1.9% | ||||||||
57,982 | Comcast Corp., Class A | 3,541,541 | ||||||
|
| |||||||
Communications Equipment 1.1% | ||||||||
18,223 | EVS Broadcast Equipment S.A. (Belgium) | 673,963 | ||||||
86,105 | Infinera Corp.* | 1,382,846 | ||||||
251 | Xtera Communications, Inc.* *** † | 674 | ||||||
|
| |||||||
2,057,483 | ||||||||
|
| |||||||
Construction Machinery & Heavy Trucks 0.4% | ||||||||
65,399 | Morita Holdings Corp. (Japan) | 764,887 | ||||||
|
| |||||||
Consumer Finance 2.8% | ||||||||
10,900 | Capital One Financial Corp. | 755,479 | ||||||
13,471 | Discover Financial Services | 685,944 | ||||||
41,500 | Encore Capital Group, Inc.* | 1,068,210 | ||||||
42,816 | PRA Group, Inc.* | 1,258,362 | ||||||
232,000 | SLM Corp.* | 1,475,520 | ||||||
|
| |||||||
5,243,515 | ||||||||
|
| |||||||
Data Processing & Outsourced Services 0.7% | ||||||||
4,100 | MasterCard, Inc., Class A | 387,450 | ||||||
11,300 | Visa, Inc., Class A | 864,224 | ||||||
|
| |||||||
1,251,674 | ||||||||
|
| |||||||
Diversified Support Services 0.1% | ||||||||
231,000 | Blue Label Telecoms Ltd. (South Africa) | 238,746 | ||||||
|
|
Shares | Value | |||||||
Drug Retail 0.1% | ||||||||
2,200 | Walgreens Boots Alliance, Inc. | $ | 185,328 | |||||
|
| |||||||
Education Services 0.6% | ||||||||
301,500 | Kroton Educacional S.A. (Brazil) | 966,754 | ||||||
4,215 | TAL Education Group ADR* (China) | 209,401 | ||||||
|
| |||||||
1,176,155 | ||||||||
|
| |||||||
Electronic Equipment & Instruments 2.8% | ||||||||
37,230 | Barco N.V. (Belgium) | 2,683,903 | ||||||
67,332 | Kapsch TrafficCom AG (Austria) | 2,284,392 | ||||||
400 | KEYENCE Corp. (Japan) | 218,237 | ||||||
|
| |||||||
5,186,532 | ||||||||
|
| |||||||
Fertilizers & Agricultural Chemicals 0.4% | ||||||||
9,100 | Monsanto Co. | 798,434 | ||||||
|
| |||||||
Food Retail 3.9% | ||||||||
1,193,413 | Majestic Wine plc* (United Kingdom) | 7,256,448 | ||||||
|
| |||||||
Health Care Distributors 0.4% | ||||||||
38,577 | Dvx, Inc. (Japan) | 371,645 | �� | |||||
2,475 | McKesson Corp. | 389,194 | ||||||
|
| |||||||
760,839 | ||||||||
|
| |||||||
Health Care Equipment 5.4% | ||||||||
107,722 | DiaSorin S.p.A. (Italy) | 6,224,054 | ||||||
64,063 | LivaNova plc* | 3,458,121 | ||||||
16,802 | Techno Medica Co. Ltd. (Japan) | 319,704 | ||||||
|
| |||||||
10,001,879 | ||||||||
|
| |||||||
Health Care Services 0.9% | ||||||||
42,035 | BML, Inc. (Japan) | 1,628,800 | ||||||
|
| |||||||
Health Care Supplies 3.3% | ||||||||
1,981,919 | Advanced Medical Solutions Group plc (United Kingdom) | 5,170,774 | ||||||
533,759 | Tristel plc (United Kingdom) | 897,685 | ||||||
|
| |||||||
6,068,459 | ||||||||
|
| |||||||
Health Care Technology 1.0% | ||||||||
49,551 | Software Service, Inc. (Japan) | 1,884,805 | ||||||
|
| |||||||
Home Entertainment Software 3.3% | ||||||||
162,447 | Take-Two Interactive Software, Inc.* | 6,119,378 | ||||||
|
| |||||||
Home Improvement Retail 0.4% | ||||||||
64,800 | Arcland Sakamoto Co. Ltd. (Japan) | 686,470 | ||||||
|
| |||||||
Household Appliances 2.0% | ||||||||
106,301 | iRobot Corp.* | 3,752,425 | ||||||
|
| |||||||
Hypermarkets & Super Centers 1.4% | ||||||||
16,900 | Costco Wholesale Corp. | 2,663,102 | ||||||
|
| |||||||
Industrial Machinery 0.9% | ||||||||
20,536 | Arcam AB* (Sweden) | 444,133 | ||||||
25,197 | Fukushima Industries Corp. (Japan) | 585,138 | ||||||
25,629 | SLM Solutions Group AG* (Germany) | 647,765 | ||||||
|
| |||||||
1,677,036 | ||||||||
|
| |||||||
Internet Retail 6.2% | ||||||||
4,873 | Amazon.com, Inc.* | 2,892,808 | ||||||
712,726 | AO World plc* (United Kingdom) | 1,833,870 | ||||||
312,809 | Banzai S.p.A.* (Italy) | 1,344,758 | ||||||
45,421 | Lastminute.com N.V.* (Switzerland) | 482,774 | ||||||
128,249 | Ocado Group plc* (United Kingdom) | 534,804 | ||||||
148,774 | Oisix, Inc.* (Japan) | 2,432,849 | ||||||
990 | Priceline Group, Inc. (The)* | 1,276,070 | ||||||
70,650 | Rakuten, Inc. (Japan) | 681,573 | ||||||
|
| |||||||
11,479,506 | ||||||||
|
|
84
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Shares | Value | |||||||
Internet Software & Services 2.9% | ||||||||
13,800 | Alibaba Group Holding Ltd. ADR* (China) | $ | 1,090,614 | |||||
3,955 | Alphabet, Inc., Class A* | 3,017,269 | ||||||
292,017 | NetGem S.A. (France) | 711,467 | ||||||
34,972 | Twitter, Inc.* | 578,787 | ||||||
|
| |||||||
5,398,137 | ||||||||
|
| |||||||
IT Consulting & Other Services 2.0% | ||||||||
59,814 | Cognizant Technology Solutions Corp., Class A* | 3,750,338 | ||||||
|
| |||||||
Leisure Products 5.2% | ||||||||
180,057 | Escalade, Inc. | 2,119,271 | ||||||
2,944,544 | Photo-Me International plc (United Kingdom) | 7,523,512 | ||||||
|
| |||||||
9,642,783 | ||||||||
|
| |||||||
Life Sciences Tools & Services 1.4% | ||||||||
17,490 | Tecan Group AG (Switzerland) | 2,662,730 | ||||||
|
| |||||||
Multi-Utilities 0.2% | ||||||||
32,350 | Telecom Plus plc (United Kingdom) | 428,047 | ||||||
|
| |||||||
Office Services & Supplies 0.5% | ||||||||
29,365 | Herman Miller, Inc. | 907,085 | ||||||
|
| |||||||
Oil & Gas Refining & Marketing 0.5% | ||||||||
19,050 | World Fuel Services Corp. | 925,449 | ||||||
|
| |||||||
Personal Products 1.3% | ||||||||
24,601 | Herbalife Ltd.* | 1,514,438 | ||||||
83,458 | Sarantis S.A. (Greece) | 806,693 | ||||||
|
| |||||||
2,321,131 | ||||||||
|
| |||||||
Pharmaceuticals 1.1% | ||||||||
16,700 | Novo Nordisk A/S, Class B (Denmark) | 906,330 | ||||||
3,400 | Roche Holding AG (Switzerland) | 838,618 | ||||||
11,763 | Valeant Pharmaceuticals International, Inc.* (Canada) | 309,367 | ||||||
|
| |||||||
2,054,315 | ||||||||
|
| |||||||
Real Estate Services 1.0% | ||||||||
45,550 | Century 21 Real Estate of Japan Ltd. (Japan) | 463,920 | ||||||
6,628 | Jones Lang LaSalle, Inc. | 777,597 | ||||||
826,300 | LPS Brasil - Consultoria de Imoveis S.A. (Brazil) | 604,680 | ||||||
|
| |||||||
1,846,197 | ||||||||
|
| |||||||
Semiconductors 1.8% | ||||||||
124,000 | ARM Holdings plc (United Kingdom) | 1,807,393 | ||||||
296,000 | Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 1,489,933 | ||||||
|
| |||||||
3,297,326 | ||||||||
|
| |||||||
Specialty Stores 2.4% | ||||||||
90,634 | Fenix Outdoor International AG (Sweden) | 4,400,549 | ||||||
|
| |||||||
Systems Software 1.5% | ||||||||
27,300 | Check Point Software Technologies Ltd.* (Israel) | 2,387,931 | ||||||
178,173 | WANdisco plc* (United Kingdom) | 469,971 | ||||||
|
| |||||||
2,857,902 | ||||||||
|
| |||||||
Technology Hardware, Storage & Peripherals 0.4% | ||||||||
349,194 | Asetek A/S* (Norway) | 759,966 | ||||||
|
| |||||||
Total Common Stocks (cost $133,495,479) | 149,168,151 | |||||||
|
|
Shares | Value | |||||||
LIMITED PARTNERSHIP INTEREST 0.1% | ||||||||
Asset Management & Custody Banks 0.1% | ||||||||
Greenspring Global Partners II-B, L.P.* *** † | $ | 295,112 | ||||||
|
| |||||||
Total Limited Partnership Interest (cost $295,112) | 295,112 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 19.1% | ||||||||
Repurchase Agreement 19.1% | ||||||||
$35,552,034 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $34,830,000 of United States Treasury Notes 2.125% due 12/31/22; value: $36,266,738; repurchase proceeds: $35,552,064†† (cost $35,552,034) | $ | 35,552,034 | |||||
|
| |||||||
Total Short-Term Investments (cost $35,552,034) | 35,552,034 | |||||||
|
| |||||||
Total Investments (cost $169,342,625) 99.4% | 185,015,297 | |||||||
Other Assets less Liabilities 0.6% | 1,053,778 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 186,069,075 | ||||||
|
| |||||||
*Non-income producing.
***Security was fair valued under procedures adopted by the Board of Trustees (see Note 13).
†Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9).
††All or a portion of this security has been designated as collateral for purchase commitments (see Note 10).
ADR American Depositary Receipt.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch World Innovators Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Austria | 1.5 | |||
Belgium | 2.2 | |||
Brazil | 1.3 | |||
Canada | 0.2 | |||
China | 0.9 | |||
Denmark | 0.6 | |||
France | 0.5 | |||
Germany | 0.4 | |||
Greece | 0.5 | |||
Israel | 1.6 | |||
Italy | 5.1 | |||
Japan | 7.3 | |||
Norway | 0.5 | |||
South Africa | 0.2 | |||
Sweden | 7.3 | |||
Switzerland | 2.7 | |||
Taiwan | 1.0 | |||
United Kingdom | 29.3 | |||
United States | 36.9 | |||
|
| |||
TOTAL | 100.0 | % | ||
|
|
85
Table of Contents
WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments | ||
| ||
|
Principal Amount | Value | |||||||
ASSET-BACKED SECURITIES 8.9% | ||||||||
$1,000,000 | Avis Budget Rental Car Funding AESOP, LLC, 2.50%, 7/20/21, Series 2015-1A, Class A | $ | 995,151 | |||||
500,000 | Avis Budget Rental Car Funding AESOP, LLC, 2.63%, 12/20/21, Series 2015-2A, Class A | 496,984 | ||||||
1,500,000 | Citibank Credit Card Issuance Trust, 5.65%, 9/20/19, Series 2007-A8, Class A8 | 1,595,725 | ||||||
425,926 | Cronos Containers Program I Ltd., 3.27%, 11/18/29, Series 2014-2A, Class A (Bermuda) | 406,326 | ||||||
495,000 | DB Master Finance, LLC 2015-1, 3.262%, 2/20/45, Series 2015-1A, Class A2I | 487,352 | ||||||
500,000 | Exeter Automobile Receivables Trust, 3.59%, 8/16/21, Series 2015-3A, Class B | 503,131 | ||||||
1,250,000 | GE Capital Credit Card Master Note Trust, 2.22%, 1/15/22, Series 2012-2, Class A | 1,264,897 | ||||||
1,000,000 | Hertz Vehicle Financing, LLC, 1.83%, 8/25/19, Series 2013-1A, Class A2 | 989,508 | ||||||
746,250 | Wendys Funding LLC, 3.371%, 6/15/45, Series 2015-1A, Class A2I | 732,564 | ||||||
585,000 | World Financial Network Credit Card Master Trust, 1.76%, 5/17/21, Series 2012-B, Class A | 587,483 | ||||||
1,400,000 | World Financial Network Credit Card Master Trust, 3.14%, 1/17/23, Series 2012-A, Class A | 1,460,251 | ||||||
|
| |||||||
Total Asset-Backed Securities (cost $9,610,042) | 9,519,372 | |||||||
|
| |||||||
COLLATERALIZED MORTGAGE OBLIGATIONS 16.8% | ||||||||
294,914 | Federal Home Loan Mortgage Corp., 1.50%, 9/15/22, Series 3760, Class BA | 297,281 | ||||||
561,677 | Federal Home Loan Mortgage Corp., 1.50%, 7/15/23, Series 4221, Class HJ | 567,022 | ||||||
32,733 | Federal Home Loan Mortgage Corp., 1.50%, 4/15/24, Series 3780, Class TA | 32,928 | ||||||
12,580 | Federal Home Loan Mortgage Corp., 2.598%, 8/1/33, Series 847281††† | 13,075 | ||||||
58,981 | Federal Home Loan Mortgage Corp., 2.621%, 12/1/32, Series 847527††† | 62,475 | ||||||
56,725 | Federal Home Loan Mortgage Corp., 2.736%, 5/1/31, Series 847292††† | 59,802 | ||||||
147,894 | Federal Home Loan Mortgage Corp., 2.935%, 1/1/25, Series 775629††† | 151,531 | ||||||
89,582 | Federal Home Loan Mortgage Corp., 3.065%, 5/1/25, Series 775617††† | 93,162 | ||||||
347,934 | Federal Home Loan Mortgage Corp., 3.50%, 6/15/25, Series 4057, Class VB | 373,706 | ||||||
497,337 | Federal Home Loan Mortgage Corp., 3.50%, 2/1/33, Series C91620 | 524,666 | ||||||
710,000 | Federal Home Loan Mortgage Corp., 3.50%, 7/15/45, Series 4495, Class JC | 738,556 | ||||||
392,697 | Federal Home Loan Mortgage Corp., 4.00%, 11/15/38, Series 3740, Class AB | 414,577 | ||||||
35,524 | Federal Home Loan Mortgage Corp., 5.50%, 10/1/25, Series C90925 | 39,431 | ||||||
136,988 | Federal Home Loan Mortgage Corp., 5.50%, 8/1/29, Series C46102 | 152,879 | ||||||
240,715 | Federal National Mortgage Assoc., 2.188%, 12/1/35, Series 848390††† | 251,395 | ||||||
360,645 | Federal National Mortgage Assoc., 2.228%, 1/1/35, Series 825245††† | 380,888 |
Principal Amount | Value | |||||||
COLLATERALIZED MORTGAGE OBLIGATIONS (continued) | ||||||||
$ 58,949 | Federal National Mortgage Assoc., 2.383%, 2/1/21, Series 313380††† | $ | 59,801 | |||||
1,000,000 | Federal National Mortgage Assoc., 2.42%, 4/1/22, Series AM8263 | 1,026,355 | ||||||
493,093 | Federal National Mortgage Assoc., 2.50%, 12/25/41, Series 2012-61, Class KD | 495,546 | ||||||
37,442 | Federal National Mortgage Assoc., 2.758%, 1/1/18, Series 57735††† | 37,479 | ||||||
946,805 | Federal National Mortgage Assoc., 3.00%, 1/1/28, Series AB7546 | 992,595 | ||||||
98,721 | Federal National Mortgage Assoc., 3.50%, 6/25/23, Series 2003-46, Class LD | 102,580 | ||||||
1,391,199 | Federal National Mortgage Assoc., 3.50%, 6/1/32, Series AL2525 | 1,485,404 | ||||||
860,745 | Federal National Mortgage Assoc., 3.50%, 5/1/33, Series AB9412 | 910,297 | ||||||
750,000 | Federal National Mortgage Assoc., 3.50%, 4/25/42, Series 2015-56, Class ME | 781,461 | ||||||
513,719 | Federal National Mortgage Assoc., 3.50%, 10/1/42, Series MA1209 | 530,761 | ||||||
91,445 | Federal National Mortgage Assoc., 3.875%, 1/25/39, Series 2009-2, Class WJ | 96,957 | ||||||
512,000 | Federal National Mortgage Assoc., 4.00%, 9/25/33, Series 2014-67, Class VK | 573,761 | ||||||
331,788 | Federal National Mortgage Assoc., 4.00%, 2/1/42, Series MA0988 | 346,591 | ||||||
44,544 | Federal National Mortgage Assoc., 4.082%, 7/1/19, Series 070377††† | 46,184 | ||||||
771,956 | Federal National Mortgage Assoc., 4.55%, 10/1/33, Series 386320 | 771,458 | ||||||
162,324 | Federal National Mortgage Assoc., 5.50%, 5/25/23, Series 2003-42, Class EK | 179,772 | ||||||
200,032 | Federal National Mortgage Assoc., 7.723%, 11/25/44, Series 2014-73, Class US††† | 201,915 | ||||||
498,333 | Government National Mortgage Assoc., 2.30%, 3/16/56, Series 2015-183, Class A | 501,798 | ||||||
130,392 | Government National Mortgage Assoc., 2.375%, 7/20/34, Series 80987††† | 134,559 | ||||||
234,040 | Government National Mortgage Assoc., 3.00%, 8/20/38, Series 2010-47, Class CG | 239,343 | ||||||
139,810 | Government National Mortgage Assoc., 3.00%, 12/20/38, Series 2010-89, Class PA | 141,013 | ||||||
469,700 | Government National Mortgage Assoc., 3.00%, 5/20/39, Series 2010-68, Class YE | 487,111 | ||||||
164,611 | Government National Mortgage Assoc., 3.50%, 1/20/37, Series 2009-31, Class PD | 165,295 | ||||||
526,554 | Government National Mortgage Assoc., 3.50%, 7/20/40, Series 2012-10, Class LA | 555,119 | ||||||
300,000 | Government National Mortgage Assoc., 3.674%, 10/16/43, Series 2010-140, Class C††† | 311,983 | ||||||
23,677 | Government National Mortgage Assoc., 4.00%, 6/20/38, Series 2009-69, Class WC | 23,775 | ||||||
325,544 | Government National Mortgage Assoc., 4.00%, 9/20/38, Series 2009-108, Class WG | 339,199 | ||||||
297,641 | Government National Mortgage Assoc., 4.00%, 3/20/39, Series 2009-31, Class TA | 312,143 | ||||||
309,002 | Government National Mortgage Assoc., 4.00%, 4/16/39, Series 2009-110, Class AB | 331,604 | ||||||
266,959 | Government National Mortgage Assoc., 4.00%, 8/20/39, Series 2009-69, Class PV | 287,829 | ||||||
166,845 | Government National Mortgage Assoc., 4.50%, 2/20/38, Series 2009-55, Class NP | 178,359 | ||||||
270,625 | Government National Mortgage Assoc., 4.50%, 3/20/39, Series 2009-14, Class AG | 294,400 |
86
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Principal Amount | Value | |||||||
COLLATERALIZED MORTGAGE OBLIGATIONS (continued) | ||||||||
$ 194,736 | Government National Mortgage Assoc., 5.00%, 7/20/34, Series 2004-105, Class MC | $ | 200,488 | |||||
34,465 | Government National Mortgage Assoc., 5.00%, 8/20/39, Series 004513 | 35,578 | ||||||
364,750 | Government National Mortgage Assoc., 7.286%, 1/20/44, Series 2015-82, Class SA, INV FL††† | 356,844 | ||||||
309,811 | Government National Mortgage Assoc., 7.836%, 4/20/45, Series 2015-53, Class US, INV FL††† | 317,738 | ||||||
|
| |||||||
Total Collateralized Mortgage Obligations (cost $17,702,409) | 18,006,469 | |||||||
|
| |||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES 4.8% | ||||||||
1,000,000 | Banc of America Commercial Mortgage Trust, 5.608%, 4/10/49, Series 2007-2, Class A4††† | 1,015,261 | ||||||
675,868 | JP Morgan Chase Commercial Mortgage Securities Trust, 5.42%, 1/15/49, Series 2007-LDPX, Class A3 | 689,715 | ||||||
973,711 | LB-UBS Commercial Mortgage Trust, 5.858%, 7/15/40, Series 2007-C6, Class A4††† | 993,619 | ||||||
668,620 | Merrill Lynch Mortgage Trust, 5.739%, 8/12/43, Series 2006-C2, Class A1A††† | 671,869 | ||||||
238,316 | Morgan Stanley Capital I Trust, 5.319%, 12/15/43, Series 2006-IQ12, Class A1A | 241,500 | ||||||
258,585 | Morgan Stanley Capital I Trust, 5.332%, 12/15/43, Series 2006-IQ12, Class A4 | 260,836 | ||||||
200,000 | RBSCF Trust, 5.692%, 4/16/49, Series 2010-RR4, Class MSCA††† | 203,811 | ||||||
319,242 | RBSCF Trust, 5.946%, 2/16/51, Series 2010-RR3, Class WBTA††† | 322,327 | ||||||
759,363 | Wachovia Bank Commercial Mortgage Trust Series, 5.308%, 11/15/48, Series 2006-C29, Class A4 | 765,938 | ||||||
|
| |||||||
Total Commercial Mortgage-Backed Securities (cost $5,250,254) | 5,164,876 | |||||||
|
| |||||||
CORPORATE BONDS 41.5% | ||||||||
Air Freight & Logistics 0.6% | ||||||||
620,000 | United Parcel Service, Inc., 5.50%, 1/15/18 | 669,833 | ||||||
|
| |||||||
Automobile Manufacturers 0.5% | ||||||||
500,000 | Toyota Motor Credit Corp., 2.00%, 10/24/18 MTN | 509,021 | ||||||
|
| |||||||
Beverages — Non-alcoholic 1.2% | ||||||||
500,000 | PepsiAmericas, Inc., 5.00%, 5/15/17 | 520,829 | ||||||
750,000 | PepsiCo, Inc., 5.00%, 6/1/18 | 813,523 | ||||||
|
| |||||||
1,334,352 | ||||||||
|
| |||||||
Construction Machinery & Heavy Trucks 1.4% | ||||||||
500,000 | Caterpillar Financial Services Corp., 5.85%, 9/1/17 MTN | 530,714 | ||||||
1,000,000 | John Deere Capital Corp., 2.25%, 4/17/19 | 1,020,875 | ||||||
|
| |||||||
1,551,589 | ||||||||
|
|
Principal Amount | Value | |||||||
CORPORATE BONDS (continued) | ||||||||
Consumer Finance 0.9% | ||||||||
$ 1,000,000 | American Express Credit Corp., 2.25%, 8/15/19 MTN | $ | 1,012,452 | |||||
|
| |||||||
Cosmetics & Toiletries 0.4% | ||||||||
313,872 | Procter & Gamble — ESOP, 9.36%, 1/1/21, Series A | 377,072 | ||||||
|
| |||||||
Diversified Banks 5.6% | ||||||||
500,000 | Bank of America Corp., 3.75%, 7/12/16, Series 1 | 503,646 | ||||||
500,000 | Bank of America Corp., 5.875%, 1/5/21 | 571,731 | ||||||
600,000 | City National Corp., 5.25%, 9/15/20 | 672,176 | ||||||
1,250,000 | Goldman Sachs Group, Inc. (The), 4.00%, 3/3/24 | 1,310,649 | ||||||
1,000,000 | US Bancorp, 2.20%, 11/15/16 MTN | 1,008,461 | ||||||
1,125,000 | US Bancorp, 3.00%, 3/15/22 MTN | 1,173,474 | ||||||
700,000 | Wachovia Corp., 5.75%, 2/1/18 MTN | 753,619 | ||||||
|
| |||||||
5,993,756 | ||||||||
|
| |||||||
Diversified Financial Services 3.4% | ||||||||
1,000,000 | General Electric Co., 4.65%, 10/17/21 MTN | 1,140,837 | ||||||
1,350,000 | General Electric Co., 5.40%, 2/15/17 MTN | 1,403,565 | ||||||
1,000,000 | General Electric Co., 5.625%, 5/1/18 MTN | 1,095,914 | ||||||
|
| |||||||
3,640,316 | ||||||||
|
| |||||||
Diversified Financial Services 1.5% | ||||||||
750,000 | Franklin Resources, Inc., 4.625%, 5/20/20 | 824,014 | ||||||
750,000 | New York Life Global Funding, 2.15%, 6/18/19 | 762,979 | ||||||
|
| |||||||
1,586,993 | ||||||||
|
| |||||||
Electric Utilities 2.0% | ||||||||
1,000,000 | Integrys Holding, Inc., 4.17%, 11/1/20 | 1,080,328 | ||||||
1,000,000 | TECO Finance, Inc., 6.572%, 11/1/17 | 1,068,899 | ||||||
|
| |||||||
2,149,227 | ||||||||
|
| |||||||
Enterprise Software & Services 2.2% | ||||||||
1,000,000 | CA, Inc., 5.375%, 12/1/19 | 1,093,780 | ||||||
1,250,000 | Oracle Corp., 2.50%, 10/15/22 | 1,271,876 | ||||||
|
| |||||||
2,365,656 | ||||||||
|
| |||||||
Finance — Credit Card 1.0% | ||||||||
975,000 | American Express Co., 6.15%, 8/28/17 | 1,036,782 | ||||||
|
| |||||||
Health Care Facilities 0.7% | ||||||||
750,000 | Express Scripts Holding Co., 3.90%, 2/15/22 | 781,971 | ||||||
|
| |||||||
Integrated Telecommunication Services 1.7% | ||||||||
66,549 | Ameritech Capital Funding, 9.10%, 6/1/16 | 67,227 | ||||||
750,000 | AT&T, Inc., 5.20%, 3/15/20 | 832,763 | ||||||
870,000 | AT&T, Inc., 5.50%, 2/1/18 | 932,097 | ||||||
|
| |||||||
1,832,087 | ||||||||
|
| |||||||
Investment Banking & Brokerage 1.8% | ||||||||
1,750,000 | Morgan Stanley, 5.50%, 7/24/20 MTN | 1,967,537 | ||||||
|
| |||||||
Medical Instruments 1.1% | ||||||||
1,100,000 | Medtronic, Inc., 4.45%, 3/15/20 | 1,222,316 | ||||||
|
| |||||||
Medical — Health Maintenance Organizations 1.0% | ||||||||
1,000,000 | Coventry Health Care, Inc., 5.95%, 3/15/17 | 1,044,209 | ||||||
|
| |||||||
Movies & Entertainment 0.4% | ||||||||
350,000 | Walt Disney Co. (The), 6.00%, 7/17/17, Series C MTN | 372,900 | ||||||
|
| |||||||
Multimedia 0.9% | ||||||||
800,000 | NBCUniversal Media, LLC, 5.15%, 4/30/20 | 909,436 | ||||||
|
|
87
Table of Contents
WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments (continued) | ||
| ||
|
Principal Amount | Value | |||||||
CORPORATE BONDS (continued) | ||||||||
Office Furnishings 0.5% | ||||||||
$ 500,000 | Steelcase, Inc., 6.375%, 2/15/21 | $ | 564,758 | |||||
|
| |||||||
Oil Companies — Integrated 1.0% | ||||||||
1,000,000 | Phillips 66, 4.30%, 4/1/22 | 1,064,668 | ||||||
|
| |||||||
Other Diversified Financial Services 1.4% | ||||||||
1,350,000 | JPMorgan Chase & Co., 4.35%, 8/15/21 | 1,475,157 | ||||||
|
| |||||||
Pharmaceuticals 2.2% | ||||||||
745,000 | AstraZeneca plc, 5.90%, 9/15/17 (United Kingdom) | 794,730 | ||||||
725,000 | Pharmacia LLC, 6.50%, 12/1/18 | 821,851 | ||||||
575,000 | Pharmacia LLC, 6.75%, 12/15/27 | 755,774 | ||||||
|
| |||||||
2,372,355 | ||||||||
|
| |||||||
Property & Casualty Insurance 1.1% | ||||||||
1,000,000 | CNA Financial Corp., 7.35%, 11/15/19 | 1,154,327 | ||||||
|
| |||||||
Railroads 1.0% | ||||||||
1,000,000 | Union Pacific Corp., 5.70%, 8/15/18 | 1,098,828 | ||||||
|
| |||||||
Regional Banks 3.0% | ||||||||
1,500,000 | BB&T Corp., 2.15%, 3/22/17 MTN | 1,514,820 | ||||||
1,200,000 | Fifth Third Bancorp, 5.45%, 1/15/17 | 1,229,330 | ||||||
500,000 | SunTrust Banks, Inc., 3.50%, 1/20/17 | 507,822 | ||||||
|
| |||||||
3,251,972 | ||||||||
|
| |||||||
Semiconductor Equipment 0.7% | ||||||||
700,000 | Applied Materials, Inc., 4.30%, 6/15/21 | 770,818 | ||||||
|
| |||||||
Specialty Chemicals 1.3% | ||||||||
1,150,000 | Lubrizol Corp., 8.875%, 2/1/19 | 1,369,445 | ||||||
|
| |||||||
Steel 1.0% | ||||||||
1,000,000 | Nucor Corp., 5.75%, 12/1/17 | 1,063,830 | ||||||
|
| |||||||
Total Corporate Bonds (cost $43,847,633) | 44,543,663 | |||||||
|
| |||||||
MUNICIPAL BONDS 5.7% | ||||||||
650,000 | Arizona State Transportation Board Highway Revenue, 5.00%, 7/1/23 | 657,131 | ||||||
730,000 | City of Dublin, Ohio, 5.00%, 12/1/22, Series B | 845,070 | ||||||
695,000 | �� | City of Westminster, Colorado, 2.415%, 12/1/19, Series B | 705,355 | |||||
500,000 | Columbus-Franklin County. Finance Authority, 3.00%, 8/15/21 | 523,235 | ||||||
541,127 | Minnesota Housing Finance Agency, 2.70%, 9/1/41 | 540,500 | ||||||
285,000 | New Hampshire Housing Finance Authority, 3.469%, 7/1/23, Series B | 298,649 | ||||||
415,000 | Richmond Joint Powers Financing Authority, 8.25%, 7/1/19, Class B | 453,595 | ||||||
500,000 | State of Louisiana, 5.00%, 7/15/26, Series C | 583,570 | ||||||
1,100,000 | State of New York Mortgage Agency, 3.653%, 4/1/23 | 1,167,639 | ||||||
310,000 | Township of Robbinsville, New Jersey, 4.00%, 7/15/23, Series B | 345,253 | ||||||
|
| |||||||
Total Municipal Bonds (cost $5,963,370) | 6,119,997 | |||||||
|
|
Shares | Value | |||||||
EXCHANGE-TRADED FUNDS 0.8% | ||||||||
Asset Management & Custody Banks 0.8% | ||||||||
9,000 | iShares S&P U.S. Preferred Stock Index Fund ETF | $ | 351,270 | |||||
25,000 | Market Vectors Preferred Securities ex Financials ETF | 504,250 | ||||||
|
| |||||||
855,520 | ||||||||
|
| |||||||
Total Exchange-Traded Funds (cost $881,693) | 855,520 | |||||||
|
| |||||||
Principal Amount | Value | |||||||
U.S. GOVERNMENT AGENCY SECURITIES 8.8% | ||||||||
$1,500,000 | Federal Farm Credit Banks, 1.97%, 4/21/21 | $ | 1,500,252 | |||||
2,000,000 | Federal Farm Credit Banks, 2.29%, 4/14/22 | 2,000,070 | ||||||
1,050,000 | Federal Farm Credit Banks, 2.60%, 10/6/22 | 1,090,218 | ||||||
1,000,000 | Federal Farm Credit Banks, 2.80%, 9/8/23 | 1,003,316 | ||||||
1,500,000 | Federal Home Loan Mortgage Corp., 2.50%, 5/27/16 | 1,505,100 | ||||||
361,872 | New Valley Generation IV, 4.687%, 1/15/22 | 396,055 | ||||||
800,000 | Tennessee Valley Authority, 3.875%, 2/15/21 | 889,690 | ||||||
1,000,000 | Tennessee Valley Authority, 6.25%, 12/15/17, Series E | 1,089,707 | ||||||
|
| |||||||
Total U.S. Government Agency Securities (cost $9,364,408) | 9,474,408 | |||||||
|
| |||||||
U.S. TREASURY NOTES 10.4% | ||||||||
1,750,000 | U.S. Treasury Note, 3.125%, 5/15/21 | 1,910,986 | ||||||
3,125,000 | U.S. Treasury Note, 3.25%, 12/31/16 | 3,186,525 | ||||||
4,100,000 | U.S. Treasury Note, 3.625%, 8/15/19 | 4,461,792 | ||||||
1,500,000 | U.S. Treasury Note, 3.625%, 2/15/20 | 1,646,484 | ||||||
|
| |||||||
Total U.S. Treasury Notes (cost $11,018,851) | 11,205,787 | |||||||
|
| |||||||
Shares | Value | |||||||
PREFERRED STOCKS 1.1% | ||||||||
Consumer Finance 0.3% | ||||||||
12,000 | Capital One Financial Corp., 6.70%, Series D Ptd.§§§ | $ | 325,920 | |||||
|
| |||||||
Diversified Banks 0.8% | ||||||||
20,000 | Bank of America Corp., 6.625%, Series W Ptd.§§§ | 535,800 | ||||||
12,000 | Citigroup, Inc., 6.875 %, Series L Pfd.§§§ | 325,800 | ||||||
|
| |||||||
861,600 | ||||||||
|
| |||||||
Total Preferred Stocks (cost $1,145,092) | 1,187,520 | |||||||
|
|
88
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 0.7% | ||||||||
Repurchase Agreement 0.7% | ||||||||
$ 752,385 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $740,000 of United States Treasury Notes 2.125% due 12/31/22; value: $770,525; repurchase proceeds: $752,386 (cost $752,385) | $ | 752,385 | |||||
|
| |||||||
Total Short-Term Investments (cost $752,385) | 752,385 | |||||||
|
| |||||||
Total Investments (cost $105,536,137) 99.5% | 106,829,997 | |||||||
Other Assets less Liabilities 0.5% | 519,468 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 107,349,465 | ||||||
|
| |||||||
†††Variable rate securities.
§§§Perpetual maturity. Callable any time after first call date. Maturity date is next call date.
ESOP Employee Stock Ownership Plan.
ETF Exchange-Traded Fund.
MTN Medium Term Note.
See Notes to Financial Statements. |
|
At March 31, 2016, Wasatch-1st Source Income Fund’s investments, excluding short-term investments, were in the following countries:
Country | % | |||
Bermuda | 0.4 | |||
United Kingdom | 0.7 | |||
United States | 98.9 | |||
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| |||
TOTAL | 100.0 | % | ||
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89
Table of Contents
WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Schedule of Investments | MARCH 31, 2016 (UNAUDITED) | |
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Principal Amount | Value | |||||||
U.S. GOVERNMENT OBLIGATIONS 97.7% | ||||||||
$154,000,000 | U.S. Treasury Bond, 2.50%, 2/15/45 | $ | 150,162,012 | |||||
37,050,000 | U.S. Treasury Bond, 2.875%, 5/15/43 | 39,039,992 | ||||||
72,000,000 | U.S. Treasury Bond, 2.875%, 8/15/45 | 75,735,000 | ||||||
7,000,000 | U.S. Treasury Bond, 3.00%, 5/15/45 | 7,549,339 | ||||||
8,000,000 | U.S. Treasury Bond, 3.125%, 2/15/42 | 8,897,184 | ||||||
28,000,000 | U.S. Treasury Bond, 3.125%, 8/15/44 | 30,975,000 | ||||||
18,100,000 | U.S. Treasury Bond, 3.75%, 11/15/43 | 22,480,761 | ||||||
86,000,000 | U.S. Treasury Strip, principal only, 5/15/44 | 39,980,626 | ||||||
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| |||||||
Total U.S. Government Obligations (cost $356,638,908) | 374,819,914 | |||||||
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Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS 1.8% | ||||||||
Repurchase Agreement 1.8% | ||||||||
$ 7,098,559 | Repurchase Agreement dated 3/31/16, 0.03% due 4/1/16 with State Street Bank and Trust Co. collateralized by $6,955,000 of United States Treasury Notes 2.125% due 12/31/22; value: $7,241,894; repurchase proceeds: $7,098,565 (cost $7,098,559) | $ | 7,098,559 | |||||
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| |||||||
Total Short-Term Investments (cost $7,098,559) | 7,098,559 | |||||||
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| |||||||
Total Investments (cost $363,737,467) 99.5% | 381,918,473 | |||||||
Other Assets less Liabilities 0.5% | 2,004,117 | |||||||
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NET ASSETS 100.0% | $ | 383,922,590 | ||||||
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See Notes to Financial Statements. |
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91
Table of Contents
WASATCH FUNDS — Statements of Assets and Liabilities | ||
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CORE GROWTH FUND | EMERGING INDIA FUND1 | EMERGING MARKETS SELECT FUND | ||||||||||
Assets: | ||||||||||||
Investments, at cost | ||||||||||||
Unaffiliated issuers | $ | 839,170,169 | $ | 51,526,500 | $ | 35,213,693 | ||||||
Affiliated issuers2 | — | — | — | |||||||||
Repurchase agreements | 74,234,256 | 1,400,883 | 850,625 | |||||||||
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$ | 913,404,425 | $ | 52,927,383 | $ | 36,064,318 | |||||||
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Investments, at market value | ||||||||||||
Unaffiliated issuers | $ | 1,118,064,416 | $ | 62,206,303 | $ | 37,643,482 | ||||||
Affiliated issuers2 | — | — | — | |||||||||
Repurchase agreements | 74,234,256 | 1,400,883 | 850,625 | |||||||||
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1,192,298,672 | 63,607,186 | 38,494,107 | ||||||||||
Cash | 3 | — | — | |||||||||
Foreign currency on deposit (cost of $0, $87,308, $0, $397,341, $16,247,651, $39,966, $1,047,760 and $230,504, respectively) | — | 87,322 | — | |||||||||
Receivable for investment securities sold | — | 539,442 | — | |||||||||
Capital shares receivable | 1,041,372 | 157,287 | 39,810 | |||||||||
Interest and dividends receivable | 569,694 | 6,915 | 28,891 | |||||||||
Prepaid expenses and other assets | 57,407 | 19,455 | 19,242 | |||||||||
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| |||||||
Total Assets | 1,193,967,148 | 64,417,607 | 38,582,050 | |||||||||
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| |||||||
Liabilities: | ||||||||||||
Payable for securities purchased | — | 521,468 | — | |||||||||
Capital shares payable | 803,834 | 56,026 | 24,095 | |||||||||
Payable to Advisor | 977,487 | 59,642 | 20,329 | |||||||||
Accrued fund administration fees | 17,440 | 596 | 429 | |||||||||
Accrued expenses and other liabilities | 203,462 | 26,534 | 40,849 | |||||||||
Foreign capital gains taxes payable | 1,231,206 | 194,768 | — | |||||||||
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| |||||||
Total Liabilities | 3,233,429 | 859,034 | 85,702 | |||||||||
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| |||||||
Net Assets | $ | 1,190,733,719 | $ | 63,558,573 | $ | 38,496,348 | ||||||
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| |||||||
Net Assets Consist of: | ||||||||||||
Capital stock | $ | 232,265 | $ | 223,328 | $ | 44,388 | ||||||
Paid-in-capital in excess of par | 935,969,421 | 54,545,063 | 45,208,804 | |||||||||
Undistributed net investment loss | (10,185,995 | ) | (1,795,268 | ) | (374,800 | ) | ||||||
Undistributed net realized gain (loss) on investments and foreign currency translations | (12,945,098 | ) | 100,521 | (8,812,513 | ) | |||||||
Net unrealized appreciation (depreciation) on investments and foreign currency translations | 277,663,126 | 10,484,929 | 2,430,469 | |||||||||
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| |||||||
Net Assets | $ | 1,190,733,719 | $ | 63,558,573 | $ | 38,496,348 | ||||||
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| |||||||
Net Assets | ||||||||||||
Investor Class | 1,015,590,058 | 62,342,321 | 18,481,130 | |||||||||
Institutional Class | 175,143,661 | 1,216,252 | 20,015,218 | |||||||||
Capital Stock Issued and Outstanding (Unlimited number of shares authorized, | ||||||||||||
Investor Class | 19,820,716 | 21,906,295 | 2,140,209 | |||||||||
Institutional Class | 3,405,788 | 426,532 | 2,298,563 | |||||||||
NET ASSET VALUE, REDEMPTION PRICEAND OFFERING PRICE PER SHARE | ||||||||||||
Investor Class | $ | 51.24 | $ | 2.85 | $ | 8.64 | ||||||
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Institutional Class | $ | 51.43 | $ | 2.85 | $ | 8.71 | ||||||
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1 | Institutional Class inception date was February 1, 2016. |
2 | See Note 8 for information on affiliated issuers. |
See Notes to Financial Statements.
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MARCH 31, 2016 (UNAUDITED) | ||
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EMERGING MARKETS SMALL CAP FUND1 | FRONTIER EMERGING SMALL COUNTRIES FUND1 | GLOBAL OPPORTUNITIES FUND1 | INTERNATIONAL GROWTH FUND1 | INTERNATIONAL OPPORTUNITIES FUND1 | ||||||||||||||
$ | 677,986,877 | $ | 838,311,453 | $ | 129,018,602 | $ | 1,027,476,352 | $ | 425,518,948 | |||||||||
— | 30,391,991 | — | — | — | ||||||||||||||
848,959 | 7,554,746 | 3,672,663 | 66,237,225 | 15,148,791 | ||||||||||||||
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$ | 678,835,836 | $ | 876,258,190 | $ | 132,691,265 | $ | 1,093,713,577 | $ | 440,667,739 | |||||||||
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$ | 801,129,150 | $ | 842,031,425 | $ | 151,267,002 | $ | 1,324,506,779 | $ | 501,469,798 | |||||||||
— | 22,077,662 | — | — | — | ||||||||||||||
848,959 | 7,554,746 | 3,672,663 | 66,237,225 | 15,148,791 | ||||||||||||||
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| |||||||||
801,978,109 | 871,663,833 | 154,939,665 | 1,390,744,004 | 516,618,589 | ||||||||||||||
34,359 | 9,246,981 | — | — | 5 | ||||||||||||||
| 397,346 | | 15,506,754 | 40,185 | 1,049,809 | 232,614 | ||||||||||||
4,303,084 | 37,600,939 | — | 5,137,849 | 959,120 | ||||||||||||||
306,335 | 775,699 | 233,079 | 14,117,366 | 211,809 | ||||||||||||||
1,340,177 | 2,610,176 | 134,038 | 2,495,328 | 1,411,890 | ||||||||||||||
32,998 | 40,868 | 14,492 | 37,877 | 28,756 | ||||||||||||||
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| |||||||||
808,392,408 | 937,445,250 | 155,361,459 | 1,413,582,233 | 519,462,783 | ||||||||||||||
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| |||||||||
588,817 | 24,942,346 | 308 | 5,435,989 | 3,668,567 | ||||||||||||||
584,049 | 1,884,502 | 71,771 | 11,065,395 | 393,014 | ||||||||||||||
1,093,589 | 1,207,252 | 157,454 | 1,429,454 | 724,316 | ||||||||||||||
14,066 | 15,145 | 2,222 | 21,633 | 7,290 | ||||||||||||||
416,132 | 707,996 | 73,829 | 549,525 | 261,694 | ||||||||||||||
943,747 | 4,544,613 | 52,264 | — | 107,828 | ||||||||||||||
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| |||||||||
3,640,400 | 33,301,854 | 357,848 | 18,501,996 | 5,162,709 | ||||||||||||||
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| |||||||||
$ | 804,752,008 | $ | 904,143,396 | $ | 155,003,611 | $ | 1,395,080,237 | $ | 514,300,074 | |||||||||
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| |||||||||
$ | 3,320,741 | $ | 3,405,741 | $ | 484,232 | $ | 474,848 | $ | 1,799,878 | |||||||||
769,092,750 | 999,549,815 | 131,788,329 | 1,097,354,477 | 439,210,979 | ||||||||||||||
(18,674,431 | ) | (2,105,388 | ) | (3,596,923 | ) | (9,834,787 | ) | (2,764,052 | ) | |||||||||
(71,210,957 | ) | (87,019,471 | ) | 4,131,564 | 10,048,272 | 186,827 | ||||||||||||
| 122,223,905 | | (9,687,301 | ) | 22,196,409 | 297,037,427 | 75,866,442 | |||||||||||
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$ | 804,752,008 | $ | 904,143,396 | $ | 155,003,611 | $ | 1,395,080,237 | $ | 514,300,074 | |||||||||
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| |||||||||
677,247,666 | 804,449,246 | 153,415,986 | 1,210,299,857 | 424,528,358 | ||||||||||||||
127,504,342 | 99,694,150 | 1,587,625 | 184,780,380 | 89,771,716 | ||||||||||||||
279,459,184 | 303,092,105 | 47,927,067 | 41,198,035 | 148,683,811 | ||||||||||||||
52,614,921 | 37,481,987 | 496,161 | 6,286,720 | 31,303,939 | ||||||||||||||
$ | 2.42 | $ | 2.65 | $ | 3.20 | $ | 29.38 | $ | 2.86 | |||||||||
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$ | 2.42 | $ | 2.66 | $ | 3.20 | $ | 29.39 | $ | 2.87 | |||||||||
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93
Table of Contents
WASATCH FUNDS — Statements of Assets and Liabilities (continued) | ||
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LARGE CAP VALUE FUND | LONG/SHORT FUND | MICRO CAP FUND | ||||||||||
Assets: | ||||||||||||
Investments, at cost | ||||||||||||
Unaffiliated issuers | $ | 184,840,111 | $ | 348,222,815 | $ | 186,636,921 | ||||||
Affiliated issuers2 | — | — | — | |||||||||
Repurchase agreements | 2,685,030 | 35,918,095 | 5,810,343 | |||||||||
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| |||||||
$ | 187,525,141 | $ | 384,140,910 | $ | 192,447,264 | |||||||
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| |||||||
Investments, at market value | ||||||||||||
Unaffiliated issuers | $ | 209,223,238 | $ | 287,807,595 | $ | 253,094,215 | ||||||
Affiliated issuers2 | — | — | — | |||||||||
Repurchase agreements | 2,685,030 | 35,918,095 | 5,810,343 | |||||||||
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| |||||||
211,908,268 | 323,725,690 | 258,904,558 | ||||||||||
Cash | — | — | — | |||||||||
Foreign currency on deposit (cost of $0, $0, $264,667, $157,917, $6, $0, $86 and $1,487, respectively) | — | — | 264,680 | |||||||||
Receivable for investment securities sold | 3,616,368 | — | 327,896 | |||||||||
Receivable from broker for securities sold short | — | 76,453,722 | — | |||||||||
Capital shares receivable | 31,174 | 17,685 | 35,109 | |||||||||
Interest and dividends receivable | 279,217 | 1,275,839 | 121,011 | |||||||||
Prepaid expenses and other assets | 25,478 | 47,047 | 15,816 | |||||||||
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| |||||||
Total Assets | 215,860,505 | 401,519,983 | 259,669,070 | |||||||||
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| |||||||
Liabilities: | ||||||||||||
Securities sold short, at value (proceeds of $0, $83,916,404, $0, $0, $0, $0, $0 and $0, respectively) | — | 88,457,079 | — | |||||||||
Payable for securities purchased | 407,283 | — | 259,164 | |||||||||
Capital shares payable | 225,049 | 1,810,585 | 40,539 | |||||||||
Dividends payable to shareholders | 7,721 | — | — | |||||||||
Payable to Advisor | 148,441 | 296,575 | 369,303 | |||||||||
Accrued fund administration fees | 3,927 | 9,228 | 3,705 | |||||||||
Accrued expenses and other liabilities | 151,024 | 327,046 | 61,845 | |||||||||
Foreign capital gains taxes payable | — | — | — | |||||||||
Dividends payable on securities sold short | — | 52,291 | — | |||||||||
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| |||||||
Total Liabilities | 943,445 | 90,952,804 | 734,556 | |||||||||
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Net Assets | $ | 214,917,060 | $ | 310,567,179 | $ | 258,934,514 | ||||||
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| |||||||
Net Assets Consist of: | ||||||||||||
Capital stock | $ | 251,172 | $ | 258,808 | $ | 415,359 | ||||||
Paid-in-capital in excess of par | 191,741,042 | 490,712,358 | 188,171,598 | |||||||||
Undistributed net investment income (loss) | 296,775 | 240,469 | (2,439,889 | ) | ||||||||
Undistributed net realized gain (loss) on investments and foreign currency translations | (1,755,056 | ) | (115,688,561 | ) | 6,330,710 | |||||||
Net unrealized appreciation (depreciation) on investments and foreign currency translations | 24,383,127 | (64,955,895 | ) | 66,456,736 | ||||||||
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| |||||||
Net Assets | $ | 214,917,060 | $ | 310,567,179 | $ | 258,934,514 | ||||||
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Net Assets | ||||||||||||
Investor Class | 212,082,209 | 252,009,918 | 258,934,514 | |||||||||
Institutional Class | 2,834,851 | 58,557,261 | — | |||||||||
Capital Stock Issued and Outstanding (Unlimited number of shares authorized, $.01 par value) | ||||||||||||
Investor Class | 24,785,448 | 21,010,897 | 41,535,894 | |||||||||
Institutional Class | 331,725 | 4,869,907 | — | |||||||||
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE | ||||||||||||
Investor Class | $ | 8.56 | $ | 11.99 | $ | 6.23 | ||||||
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Institutional Class | $ | 8.55 | $ | 12.02 | $ | — | ||||||
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1 | Institutional Class inception date was February 1, 2016. |
2 | See Note 8 for information on affiliated issuers. |
See Notes to Financial Statements.
94
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
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MICRO CAP VALUE FUND | SMALL CAP GROWTH FUND1 | SMALL CAP VALUE FUND | STRATEGIC INCOME FUND | ULTRA GROWTH FUND | ||||||||||||||
$ | 118,389,210 | $ | 1,376,178,862 | $ | 216,752,666 | $ | 50,366,560 | $ | 80,863,719 | |||||||||
— | 85,692,358 | — | — | — | ||||||||||||||
20,320,067 | 15,178,495 | 15,616,570 | 7,155,317 | 1,304,609 | ||||||||||||||
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$ | 138,709,277 | $ | 1,477,049,715 | $ | 232,369,236 | $ | 57,521,877 | $ | 82,168,328 | |||||||||
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$ | 148,108,609 | $ | 1,799,204,114 | $ | 261,638,674 | $ | 52,761,622 | $ | 91,158,176 | |||||||||
— | 72,255,193 | — | — | — | ||||||||||||||
20,320,067 | 15,178,495 | 15,616,570 | 7,155,317 | 1,304,609 | ||||||||||||||
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168,428,676 | 1,886,637,802 | 277,255,244 | 59,916,939 | 92,462,785 | ||||||||||||||
670,641 | — | — | 6,865 | — | ||||||||||||||
| 157,919 | | 6 | — | 92 | 1,490 | ||||||||||||
666,673 | — | 4,924,747 | 2,753,485 | 173,916 | ||||||||||||||
— | — | — | — | — | ||||||||||||||
440,387 | 1,287,393 | 70,418 | 40,238 | 5,817 | ||||||||||||||
168,250 | 302,802 | 607,223 | 345,112 | 25,040 | ||||||||||||||
12,450 | 56,568 | 30,404 | 18,670 | 13,662 | ||||||||||||||
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170,544,996 | 1,888,284,571 | 282,888,036 | 63,081,401 | 92,682,710 | ||||||||||||||
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| — | | — | — | — | — | ||||||||||||
1,389,621 | — | 6,317,468 | 474,828 | 92,925 | ||||||||||||||
87,178 | 7,222,171 | 119,500 | 344,628 | 45,710 | ||||||||||||||
— | — | — | 2,489 | — | ||||||||||||||
226,349 | 1,540,415 | 226,115 | 29,609 | 75,667 | ||||||||||||||
2,414 | 28,650 | 4,061 | 656 | 1,139 | ||||||||||||||
30,818 | 774,920 | 87,727 | 43,123 | 53,428 | ||||||||||||||
— | 3,186,619 | — | — | — | ||||||||||||||
— | — | — | — | — | ||||||||||||||
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1,736,380 | 12,752,775 | 6,754,871 | 895,333 | 268,869 | ||||||||||||||
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| |||||||||
$ | 168,808,616 | $ | 1,875,531,796 | $ | 276,133,165 | $ | 62,186,068 | $ | 92,413,841 | |||||||||
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| |||||||||
$ | 650,940 | $ | 474,993 | $ | 477,475 | $ | 61,056 | $ | 55,668 | |||||||||
142,783,196 | 1,414,319,987 | 267,852,701 | 68,514,834 | 79,738,671 | ||||||||||||||
(763,193 | ) | (19,781,425 | ) | 425,543 | 1,023,934 | 1,278,902 | ||||||||||||
(3,581,978 | ) | 75,741,591 | (37,510,726 | ) | (9,809,387 | ) | 2,496,821 | |||||||||||
| 29,719,651 | | 404,776,650 | 44,888,172 | 2,395,631 | 8,843,779 | ||||||||||||
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$ | 168,808,616 | $ | 1,875,531,796 | $ | 276,133,165 | $ | 62,186,068 | $ | 92,413,841 | |||||||||
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| |||||||||
168,808,616 | 1,822,367,951 | 256,321,173 | 62,186,068 | 92,413,841 | ||||||||||||||
— | 53,163,845 | 19,811,992 | — | — | ||||||||||||||
65,094,027 | 46,153,204 | 44,336,800 | 6,105,550 | 5,566,828 | ||||||||||||||
— | 1,346,083 | 3,410,657 | — | — | ||||||||||||||
$ | 2.59 | $ | 39.49 | $ | 5.78 | $ | 10.19 | $ | 16.60 | |||||||||
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$ | — | $ | 39.50 | $ | 5.81 | $ | — | $ | — | |||||||||
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95
Table of Contents
WASATCH FUNDS — Statements of Assets and Liabilities (continued) | MARCH 31, 2016 (UNAUDITED) | |
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|
WORLD INNOVATORS FUND1 | INCOME FUND | U.S. TREASURY FUND | ||||||||||
Assets: | ||||||||||||
Investments, at cost | ||||||||||||
Unaffiliated issuers | $ | 133,790,591 | $ | 104,783,752 | $ | 356,638,908 | ||||||
Repurchase agreements | 35,552,034 | 752,385 | 7,098,559 | |||||||||
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| |||||||
$ | 169,342,625 | $ | 105,536,137 | $ | 363,737,467 | |||||||
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| |||||||
Investments, at market value | ||||||||||||
Unaffiliated issuers | $ | 149,463,263 | $ | 106,077,612 | $ | 374,819,914 | ||||||
Repurchase agreements | 35,552,034 | 752,385 | 7,098,559 | |||||||||
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|
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| |||||||
185,015,297 | 106,829,997 | 381,918,473 | ||||||||||
Foreign currency on deposit (cost of $32,061, $0 and $0, respectively) | 32,049 | — | — | |||||||||
Receivable for investment securities sold | 1,978,879 | — | — | |||||||||
Capital shares receivable | 33,409 | 9,082 | 1,258,931 | |||||||||
Interest and dividends receivable | 164,544 | 784,579 | 1,631,087 | |||||||||
Prepaid expenses and other assets | 17,578 | 14,049 | 37,563 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 187,241,756 | 107,637,707 | 384,846,054 | |||||||||
|
|
|
|
|
| |||||||
Liabilities: | ||||||||||||
Payable for securities purchased | 829,233 | — | — | |||||||||
Capital shares payable | 28,580 | 154,223 | 604,821 | |||||||||
Dividends payable to shareholders | — | 40,356 | 83,118 | |||||||||
Payable to Advisor | 231,152 | 50,361 | 156,624 | |||||||||
Accrued fund administration fees | 2,900 | 1,529 | 5,717 | |||||||||
Accrued expenses and other liabilities | 80,816 | 41,773 | 73,184 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 1,172,681 | 288,242 | 923,464 | |||||||||
|
|
|
|
|
| |||||||
Net Assets | $ | 186,069,075 | $ | 107,349,465 | $ | 383,922,590 | ||||||
|
|
|
|
|
| |||||||
Net Assets Consist of: | ||||||||||||
Capital stock | $ | 101,923 | $ | 105,146 | $ | 206,562 | ||||||
Paid-in-capital in excess of par | 174,408,615 | 106,022,074 | 365,943,937 | |||||||||
Undistributed net investment income (loss) | (1,738,380 | ) | 14,284 | 232 | ||||||||
Undistributed net realized loss on investments and foreign currency translations | (2,205,302 | ) | (85,899 | ) | (409,147 | ) | ||||||
Net unrealized appreciation on investments and foreign currency translations | 15,502,219 | 1,293,860 | 18,181,006 | |||||||||
|
|
|
|
|
| |||||||
Net Assets | $ | 186,069,075 | $ | 107,349,465 | $ | 383,922,590 | ||||||
|
|
|
|
|
| |||||||
Net Assets | ||||||||||||
Investor Class | 185,982,602 | 107,349,465 | 383,922,590 | |||||||||
Institutional Class | 86,473 | — | — | |||||||||
Capital Stock Issued and Outstanding (Unlimited number of shares authorized, | ||||||||||||
Investor Class | 10,187,601 | 10,514,580 | 20,656,167 | |||||||||
Institutional Class | 4,734 | — | — | |||||||||
NET ASSET VALUE, REDEMPTION PRICEAND OFFERING PRICE PER SHARE | ||||||||||||
Investor Class | $ | 18.26 | $ | 10.21 | $ | 18.59 | ||||||
|
|
|
|
|
| |||||||
Institutional Class | $ | 18.27 | $ | — | $ | — | ||||||
|
|
|
|
|
|
1Institutional | Class inception date was February 1, 2016. |
See Notes to Financial Statements.
96
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97
Table of Contents
WASATCH FUNDS — Statements of Operations | ||
| ||
|
CORE GROWTH FUND | EMERGING INDIA FUND1 | EMERGING FUND | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 7,502 | $ | 1,667 | 2 | $ | 80 | |||||
Dividends3 | ||||||||||||
Unaffiliated issuers | 5,023,170 | 205,677 | 183,074 | |||||||||
Affiliated issuers4 | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 5,030,672 | 207,344 | 183,154 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Investment advisory fees | 5,902,760 | 456,718 | 215,800 | |||||||||
Shareholder servicing fees — Investor Class | 671,379 | 69,960 | 34,152 | |||||||||
Shareholder servicing fees — Institutional Class | 6,831 | 539 | 7,105 | |||||||||
Fund administration fees | 93,294 | 5,080 | 2,918 | |||||||||
Fund accounting fees | 58,235 | 15,680 | 9,756 | |||||||||
Reports to shareholders — Investor Class | 48,049 | 7,715 | 3,655 | |||||||||
Reports to shareholders — Institutional Class | 4,396 | 465 | 1,226 | |||||||||
Custody fees | 43,999 | 47,883 | 34,203 | |||||||||
Federal and state registration fees — Investor Class | 17,422 | 12,902 | 7,090 | |||||||||
Federal and state registration fees — Institutional Class | 7,432 | — | 6,979 | |||||||||
Legal fees | 29,524 | 1,705 | 2,667 | |||||||||
Trustees’ fees | 67,759 | 3,646 | 2,151 | |||||||||
Interest | 14,106 | 1,602 | 524 | |||||||||
Audit fees | 15,725 | 14,620 | 15,208 | |||||||||
Other expenses | 26,074 | 10,548 | 11,313 | |||||||||
|
|
|
|
|
| |||||||
Total expenses before reimbursement | 7,006,985 | 649,063 | 354,747 | |||||||||
Recoupment (Reimbursement) of expenses by Advisor | 9,093 | (41,197 | ) | (74,660 | ) | |||||||
|
|
|
|
|
| |||||||
Net Expenses | 7,016,078 | 607,866 | 280,087 | |||||||||
|
|
|
|
|
| |||||||
Net Investment Loss | (1,985,406 | ) | (400,522 | ) | (96,933 | ) | ||||||
|
|
|
|
|
| |||||||
Realized and Unrealized Gain (Loss): | ||||||||||||
Net realized gain (loss) on investments and foreign currency translations | ||||||||||||
Unaffiliated issuers | (9,053,973 | ) | 343,643 | (1,236,380 | ) | |||||||
Affiliated issuers4 | — | — | — | |||||||||
Realized foreign capital gains taxes | — | (68,869 | ) | (75,522 | ) | |||||||
Change in unrealized appreciation (depreciation) on | 6,741,575 | (4,378,846 | ) | 2,690,098 | ||||||||
Change in deferred foreign capital gains taxes | 176,426 | 366,083 | 116,028 | |||||||||
|
|
|
|
|
| |||||||
Net gain (loss) on investments | (2,135,972 | ) | (3,737,989 | ) | 1,494,224 | |||||||
|
|
|
|
|
| |||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (4,121,378 | ) | $ | (4,138,511 | ) | $ | 1,397,291 | ||||
|
|
|
|
|
|
1 | Institutional Class inception date was February 1, 2016. |
2 | Net of $36 in foreign withholding taxes. |
3 | Net of $0, $0, $16,472, $323,575, $903,881, $34,024, $478,822 and $358,629 in foreign withholding taxes, respectively. |
4 | See Note 8 for information on affiliated issuers. |
See Notes to Financial Statements.
98
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
EMERGING MARKETS SMALL CAP FUND1 | FRONTIER EMERGING SMALL COUNTRIES FUND1 | GLOBAL OPPORTUNITIES FUND1 | INTERNATIONAL GROWTH FUND1 | INTERNATIONAL OPPORTUNITIES FUND1 | ||||||||||||||
$ | 470 | $ | 3,276 | $ | 413 | $ | 3,013 | $ | 690 | |||||||||
3,621,573 | 8,118,906 | 445,658 | 5,005,677 | 3,297,697 | ||||||||||||||
— | 473,585 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
3,622,043 | 8,595,767 | 446,071 | 5,008,690 | 3,298,387 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
7,519,715 | 8,271,855 | 1,102,085 | 8,414,117 | 4,495,492 | ||||||||||||||
663,484 | 1,315,040 | 115,446 | 1,141,182 | 710,261 | ||||||||||||||
539 | 539 | 539 | 539 | 539 | ||||||||||||||
68,856 | 74,613 | 12,237 | 106,425 | 37,795 | ||||||||||||||
53,337 | 58,767 | 18,633 | 71,337 | 40,427 | ||||||||||||||
47,565 | 77,337 | 11,380 | 89,336 | 45,659 | ||||||||||||||
451 | 450 | 463 | 450 | 450 | ||||||||||||||
515,051 | 1,385,566 | 46,199 | 180,041 | 198,249 | ||||||||||||||
19,423 | 21,267 | 8,373 | 20,425 | 16,244 | ||||||||||||||
— | — | — | — | — | ||||||||||||||
20,101 | 21,110 | 3,701 | 29,183 | 10,444 | ||||||||||||||
54,338 | 56,397 | 9,031 | 76,010 | 26,239 | ||||||||||||||
28,640 | 13,227 | 4,247 | 16,181 | 5,664 | ||||||||||||||
14,701 | 14,701 | 14,620 | 14,742 | 14,661 | ||||||||||||||
45,402 | 29,538 | 12,413 | 34,103 | 24,158 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
9,051,603 | 11,340,407 | 1,359,367 | 10,194,071 | 5,626,282 | ||||||||||||||
(512,604 | ) | (710,976 | ) | (2,288 | ) | — | (274,425 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
8,538,999 | 10,629,431 | 1,357,079 | 10,194,071 | 5,351,857 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(4,916,956 | ) | (2,033,664 | ) | (911,008 | ) | (5,185,381 | ) | (2,053,470 | ) | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(44,714,002 | ) | (46,650,881 | ) | 5,115,900 | 27,293,004 | 231,154 | ||||||||||||
— | (491,923 | ) | — | — | — | |||||||||||||
(164,969 | ) | (2,699,478 | ) | (296,155 | ) | (26,031 | ) | (18,364 | ) | |||||||||
59,660,676 | 7,880,707 | 1,950,546 | 48,353,305 | 44,924,853 | ||||||||||||||
(71,663 | ) | 3,885,198 | 356,726 | — | 24,496 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
14,710,042 | (38,076,377 | ) | 7,127,017 | 75,620,278 | 45,162,139 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
$ | 9,793,086 | $ | (40,110,041 | ) | $ | 6,216,009 | $ | 70,434,897 | $ | 43,108,669 | ||||||||
|
|
|
|
|
|
|
|
|
|
99
Table of Contents
WASATCH FUNDS — Statements of Operations (continued) | ||
| ||
|
LARGE CAP VALUE FUND | LONG/SHORT FUND | MICRO CAP FUND | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 306 | $ | 3,626 | $ | 1,154 | ||||||
Dividends2 | ||||||||||||
Unaffiliated issuers | 3,622,778 | 6,623,397 | 871,884 | |||||||||
Affiliated issuers3 | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 3,623,084 | 6,627,023 | 873,038 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Investment advisory fees | 1,038,693 | 3,838,954 | 2,317,185 | |||||||||
Shareholder servicing fees — Investor Class | 198,973 | 626,541 | 101,054 | |||||||||
Shareholder servicing fees — Institutional Class | 1,648 | 8,926 | — | |||||||||
Fund administration fees | 18,215 | 59,413 | 20,901 | |||||||||
Fund accounting fees | 14,330 | 36,735 | 19,787 | |||||||||
Reports to shareholders — Investor Class | 15,942 | 50,784 | 9,475 | |||||||||
Reports to shareholders — Institutional Class | 782 | 18,608 | — | |||||||||
Custody fees | 3,963 | 29,413 | 18,204 | |||||||||
Federal and state registration fees — Investor Class | 11,094 | 19,478 | 10,162 | |||||||||
Federal and state registration fees — Institutional Class | 5,425 | 14,721 | — | |||||||||
Legal fees | 5,568 | 24,390 | 5,728 | |||||||||
Trustees’ fees | 13,912 | 54,124 | 15,688 | |||||||||
Dividends on securities sold short | — | 678,975 | — | |||||||||
Interest | 2,919 | 416,687 | 3,202 | |||||||||
Audit fees | 15,560 | 15,559 | 14,041 | |||||||||
Other expenses | 7,550 | 33,428 | 12,711 | |||||||||
|
|
|
|
|
| |||||||
Total expenses before reimbursement | 1,354,574 | 5,926,736 | 2,548,138 | |||||||||
Reimbursement of expenses by Advisor | (83,505 | ) | (53,701 | ) | — | |||||||
|
|
|
|
|
| |||||||
Net Expenses | 1,271,069 | 5,873,035 | 2,548,138 | |||||||||
|
|
|
|
|
| |||||||
Net Investment Income (Loss) | 2,352,015 | 753,988 | (1,675,100 | ) | ||||||||
|
|
|
|
|
| |||||||
Realized and Unrealized Gain (Loss): | ||||||||||||
Net realized gain (loss) on investments and foreign currency translations | ||||||||||||
Unaffiliated issuers | 382,711 | (86,785,891 | ) | 6,495,711 | ||||||||
Net realized gain on options written | 97,399 | — | — | |||||||||
Net realized loss on short positions | — | (20,079,316 | ) | — | ||||||||
Realized foreign capital gains taxes | — | — | (97 | ) | ||||||||
Change in unrealized appreciation (depreciation) on | 13,040,987 | 137,450,809 | (3,100,377 | ) | ||||||||
Change in deferred foreign capital gains taxes | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Net gain (loss) on investments | 13,521,097 | 30,585,602 | 3,395,237 | |||||||||
|
|
|
|
|
| |||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 15,873,112 | $ | 31,339,590 | $ | 1,720,137 | ||||||
|
|
|
|
|
|
1 | Institutional Class inception date was February 1, 2016. |
2 | Net of $58,232, $52,482, $7,604, $9,271, $17,145, $0, $8,568 and $389 in foreign withholding taxes, respectively. |
3 | See Note 8 for information on affiliated issuers. |
See Notes to Financial Statements.
100
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
MICRO CAP VALUE FUND | SMALL CAP GROWTH FUND1 | SMALL CAP VALUE FUND | STRATEGIC INCOME FUND | ULTRA GROWTH FUND | ||||||||||||||
$ | 23,719 | $ | 2,636 | $ | 1,744 | $ | 433 | $ | 21,187 | |||||||||
753,947 | 4,294,494 | 2,239,128 | 2,537,097 | 97,257 | ||||||||||||||
— | 579,987 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
777,666 | 4,877,117 | 2,240,872 | 2,537,530 | 118,444 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
1,401,607 | 9,695,277 | 1,365,367 | 268,674 | 475,857 | ||||||||||||||
109,839 | 1,979,504 | 174,106 | 69,793 | 83,596 | ||||||||||||||
— | 539 | 2,124 | — | — | ||||||||||||||
12,667 | 152,924 | 21,578 | 6,033 | 7,512 | ||||||||||||||
18,760 | 93,038 | 18,394 | 8,148 | 12,770 | ||||||||||||||
11,088 | 129,129 | 14,391 | 6,704 | 7,752 | ||||||||||||||
— | 450 | 1,016 | — | — | ||||||||||||||
20,797 | 168,828 | 12,436 | 2,480 | 6,509 | ||||||||||||||
10,394 | 28,704 | 12,771 | 12,225 | 9,075 | ||||||||||||||
— | — | 5,698 | — | — | ||||||||||||||
3,303 | 43,529 | 7,157 | 1,779 | 2,052 | ||||||||||||||
8,958 | 115,065 | 15,860 | 4,970 | 5,599 | ||||||||||||||
— | — | — | — | — | ||||||||||||||
1,845 | 25,641 | 3,260 | 1,099 | 1,336 | ||||||||||||||
19,762 | 15,614 | 15,208 | 14,041 | 14,041 | ||||||||||||||
9,589 | 45,606 | 12,937 | 3,580 | 9,518 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
1,628,609 | 12,493,848 | 1,682,303 | 399,526 | 635,617 | ||||||||||||||
(64,973 | ) | (2,870 | ) | (7,959 | ) | (33,799 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
1,563,636 | 12,490,978 | 1,674,344 | 365,727 | 635,617 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(785,970 | ) | (7,613,861 | ) | 566,528 | 2,171,803 | (517,173 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(132,391 | ) | 94,450,324 | (6,735,897 | ) | (8,369,722 | ) | 4,032,088 | |||||||||||
— | — | — | — | — | ||||||||||||||
— | — | — | — | — | ||||||||||||||
(58,479 | ) | — | 31,036 | — | — | |||||||||||||
| 2,740,771 |
| (54,517,563 | ) | 3,776,601 | 6,711,408 | (3,308,359 | ) | ||||||||||
158,971 | 453,998 | 255,189 | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
2,708,872 | 40,386,759 | (2,673,071 | ) | (1,658,314 | ) | 723,729 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
$ | 1,922,902 | $ | 32,772,898 | $ | (2,106,543 | ) | $ | 513,489 | $ | 206,556 | ||||||||
|
|
|
|
|
|
|
|
|
|
101
Table of Contents
WASATCH FUNDS — Statements of Operations (continued) | MARCH 31, 2016 (UNAUDITED) | |
| ||
|
WORLD INNOVATORS FUND1 | INCOME FUND | U.S. TREASURY FUND | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 1,713 | $ | 1,379,817 | $ | 4,886,283 | ||||||
Dividends2 | ||||||||||||
Unaffiliated issuers | 800,307 | 63,263 | — | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 802,020 | 1,443,080 | 4,886,283 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Investment advisory fees | 1,414,312 | 301,866 | 866,248 | |||||||||
Shareholder servicing fees — Investor Class | 152,524 | 24,582 | 195,751 | |||||||||
Shareholder servicing fees — Institutional Class | 539 | — | — | |||||||||
Fund administration fees | 14,894 | 8,692 | 27,490 | |||||||||
Fund accounting fees | 19,309 | 19,481 | 17,231 | |||||||||
Reports to shareholders — Investor Class | 12,179 | 2,792 | 13,270 | |||||||||
Reports to shareholders — Institutional Class | 453 | — | — | |||||||||
Custody fees | 21,442 | 5,643 | 5,057 | |||||||||
Federal and state registration fees — Investor Class | 11,172 | 8,991 | 26,851 | |||||||||
Legal fees | 4,381 | 2,247 | 6,869 | |||||||||
Trustees’ fees | 10,851 | 6,131 | 18,599 | |||||||||
Interest | 2,198 | 1,253 | 3,828 | |||||||||
Audit fees | 14,701 | 14,041 | 14,392 | |||||||||
Other expenses | 9,013 | 3,525 | 6,949 | |||||||||
|
|
|
|
|
| |||||||
Total expenses before reimbursement | 1,687,968 | 399,244 | 1,202,535 | |||||||||
Reimbursement of expenses by Advisor | (2,235 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Net Expenses | 1,685,733 | 399,244 | 1,202,535 | |||||||||
|
|
|
|
|
| |||||||
Net Investment Income (Loss) | (883,713 | ) | 1,043,836 | 3,683,748 | ||||||||
|
|
|
|
|
| |||||||
Realized and Unrealized Gain (Loss): | ||||||||||||
Net realized gain (loss) on investments and foreign currency translations | ||||||||||||
Unaffiliated issuers | 4,659,077 | (37,050 | ) | (409,147 | ) | |||||||
Realized foreign capital gains taxes | (8,764 | ) | — | — | ||||||||
Change in unrealized appreciation on investments and foreign currency translations | 1,704,885 | 338,944 | 20,473,714 | |||||||||
|
|
|
|
|
| |||||||
Net gain on investments | 6,355,198 | 301,894 | 20,064,567 | |||||||||
|
|
|
|
|
| |||||||
Net Increase in Net Assets Resulting from Operations | $ | 5,471,485 | $ | 1,345,730 | $ | 23,748,315 | ||||||
|
|
|
|
|
|
1 | Institutional Class inception date was February 1, 2016. |
2 | Net of $20,603, $0 and $0 in foreign withholding taxes, respectively. |
See Notes to Financial Statements.
102
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103
Table of Contents
WASATCH FUNDS — Statements of Changes in Net Assets | ||
| ||
|
CORE GROWTH FUND | EMERGING INDIA FUND | |||||||||||||||
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (1,985,406 | ) | $ | (3,060,122 | ) | $ | (400,522 | ) | $ | (885,207 | ) | ||||
Net realized gain (loss) on investments, foreign currency translations and foreign capital gains taxes | (9,053,973 | ) | 134,651,115 | 274,774 | 1,404,976 | |||||||||||
Change in unrealized appreciation (depreciation) on investments, foreign currency translations and deferred capital gains taxes | 6,918,001 | (40,629,610 | ) | (4,012,763 | ) | 4,956,291 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (4,121,378 | ) | 90,961,383 | (4,138,511 | ) | 5,476,060 | ||||||||||
Dividends paid from: | ||||||||||||||||
Investor Class | ||||||||||||||||
Net investment income | — | — | — | (29,439 | ) | |||||||||||
Net realized gains | (119,772,338 | ) | (22,822,588 | ) | (958,580 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
(119,772,338 | ) | (22,822,588 | ) | (958,580 | ) | (29,439 | ) | |||||||||
Institutional Class | ||||||||||||||||
Net investment income | — | — | — | — | ||||||||||||
Net realized gains | (18,740,216 | ) | (1,317,073 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
(18,740,216 | ) | (1,317,073 | ) | — | — | |||||||||||
Capital share transactions: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 143,480,520 | 257,284,741 | 15,716,082 | 53,513,984 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 117,452,918 | 22,299,104 | 881,647 | 28,983 | ||||||||||||
Shares redeemed | (135,889,688 | ) | (190,917,065 | ) | (12,953,811 | ) | (39,349,330 | ) | ||||||||
Redemption fees | 30,582 | 32,774 | 8,967 | 59,862 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 125,074,332 | 88,699,554 | 3,652,885 | 14,253,499 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Institutional Class | ||||||||||||||||
Shares sold | 34,962,622 | 105,047,781 | 1,152,890 | — | ||||||||||||
Shares issued to holders in reinvestment of dividends | 17,489,140 | 1,317,073 | — | — | ||||||||||||
Shares redeemed | (9,289,916 | ) | (5,212,229 | ) | — | — | ||||||||||
Redemption fees | 1,996 | 561 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 43,163,842 | 101,153,186 | 1,152,890 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | 25,604,242 | 256,674,462 | (291,316 | ) | 19,700,120 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 1,165,129,477 | 908,455,015 | 63,849,889 | 44,149,769 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,190,733,719 | $ | 1,165,129,477 | $ | 63,558,573 | $ | 63,849,889 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income (loss) included | $ | (10,185,995 | ) | $ | (8,200,589 | ) | $ | (1,795,268 | ) | $ | (1,394,746 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Capital share transactions — shares: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 2,658,532 | 4,323,060 | 5,396,461 | 17,696,899 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 2,179,898 | 385,598 | 291,936 | 10,029 | ||||||||||||
Shares redeemed | (2,561,330 | ) | (3,235,178 | ) | (4,569,589 | ) | (13,093,287 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 2,277,100 | 1,473,480 | 1,118,808 | 4,613,641 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Institutional Class | ||||||||||||||||
Shares sold | 654,898 | 1,739,883 | 426,532 | — | ||||||||||||
Shares issued to holders in reinvestment of dividends | 323,514 | 22,720 | — | — | ||||||||||||
Shares redeemed | (169,953 | ) | (86,771 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 808,459 | 1,675,832 | 426,532 | — | ||||||||||||
|
|
|
|
|
|
|
|
1 | Institutional class inception date was February 1, 2016. |
See Notes to Financial Statements.
104
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
EMERGING MARKETS SELECT FUND | EMERGING MARKETS SMALL CAP | FRONTIER EMERGING SMALL COUNTRIES | ||||||||||||||||||||
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||||||
$ | (96,933 | ) | $ | (77,515 | ) | $ | (4,916,956 | ) | $ | (7,933,740 | ) | $ | (2,033,664 | ) | $ | 4,660,025 | ||||||
| (1,311,902 | ) | (4,968,701 | ) | (44,878,971 | ) | (10,258,156 | ) | (49,842,282 | ) | (37,208,268 | ) | ||||||||||
| 2,806,126 |
| (4,625,817 | ) | 59,589,013 | (134,735,257 | ) | 11,765,905 | (156,479,551 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
1,397,291 | (9,672,033 | ) | 9,793,086 | (152,927,153 | ) | (40,110,041 | ) | (189,027,794 | ) | |||||||||||||
— | (85,929 | ) | (132,483 | ) | (1,814,628 | ) | (1,618,755 | ) | (6,526,410 | ) | ||||||||||||
— | — | — | — | — | (19,311,554 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
— | (85,929 | ) | (132,483 | ) | (1,814,628 | ) | (1,618,755 | ) | (25,837,964 | ) | ||||||||||||
— | (151,968 | ) | — | — | — | — | ||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
— | (151,968 | ) | — | — | — | — | ||||||||||||||||
4,471,697 | 7,293,767 | 69,047,218 | 180,971,456 | 207,282,001 | 490,118,465 | |||||||||||||||||
— | 85,177 | 117,400 | 1,494,676 | 1,545,813 | 24,103,894 | |||||||||||||||||
(5,117,497 | ) | (10,592,721 | ) | (376,005,987 | ) | (504,253,544 | ) | (387,666,614 | ) | (596,403,419 | ) | |||||||||||
338 | 596 | 4,226 | 14,069 | 16,436 | 25,583 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(645,462 | ) | (3,213,181 | ) | (306,837,143 | ) | (321,773,343 | ) | (178,822,364 | ) | (82,155,477 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
1,267,144 | 3,739,143 | 120,840,468 | — | 97,183,690 | — | |||||||||||||||||
— | 151,968 | — | — | — | — | |||||||||||||||||
(1,318,745 | ) | (11,784,081 | ) | (278,647 | ) | — | (162,194 | ) | — | |||||||||||||
— | 4,245 | — | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(51,601 | ) | (7,888,725 | ) | 120,561,821 | — | 97,021,496 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
700,228 | (21,011,836 | ) | (176,614,719 | ) | (476,515,124 | ) | (123,529,664 | ) | (297,021,235 | ) | ||||||||||||
37,796,120 | 58,807,956 | 981,366,727 | 1,457,881,851 | 1,027,673,060 | 1,324,694,295 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | 38,496,348 | $ | 37,796,120 | $ | 804,752,008 | $ | 981,366,727 | $ | 904,143,396 | $ | 1,027,673,060 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | (374,800 | ) | $ | (277,867 | ) | $ | (18,674,431 | ) | $ | (13,624,992 | ) | $ | (2,105,388 | ) | $ | 1,547,031 | ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
545,494 | 723,608 | 29,147,662 | 67,698,717 | 77,966,653 | 162,889,608 | |||||||||||||||||
— | 8,392 | 48,512 | 561,908 | 574,651 | 7,800,613 | |||||||||||||||||
(623,335 | ) | (1,085,598 | ) | (160,037,720 | ) | (190,175,016 | ) | (146,005,522 | ) | (198,903,713 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(77,841 | ) | (353,598 | ) | (130,841,546 | ) | (121,914,391 | ) | (67,464,218 | ) | (28,213,492 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
160,938 | 363,354 | 52,731,346 | — | 37,543,756 | — | |||||||||||||||||
— | 14,899 | — | — | — | — | |||||||||||||||||
(152,659 | ) | (1,202,260 | ) | (116,425 | ) | — | (61,769 | ) | — | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
8,279 | (824,007 | ) | 52,614,921 | — | 37,481,987 | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
105
Table of Contents
WASATCH FUNDS — Statements of Changes in Net Assets (continued) | ||
| ||
|
GLOBAL OPPORTUNITIES FUND | INTERNATIONAL GROWTH FUND | |||||||||||||||
Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (911,008 | ) | $ | (1,988,404 | ) | $ | (5,185,381 | ) | $ | (4,282,733 | ) | ||||
Net realized gain (loss) on investments, foreign | 4,819,745 | 21,190,451 | 27,266,973 | (15,787,782 | ) | |||||||||||
Net realized gain (loss) on options written | — | — | — | — | ||||||||||||
Net realized gain (loss) on short positions | — | — | — | — | ||||||||||||
Change in unrealized appreciation (depreciation) on | 2,307,272 | (24,943,634 | ) | 48,353,305 | 77,362,244 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 6,216,009 | (5,741,587 | ) | 70,434,897 | 57,291,729 | |||||||||||
Dividends paid from: | ||||||||||||||||
Investor Class | ||||||||||||||||
Net investment income | (427,375 | ) | (470,408 | ) | — | (284,964 | ) | |||||||||
Net realized gains | (19,259,921 | ) | (26,548,276 | ) | — | (8,896,949 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
(19,687,296 | ) | (27,018,684 | ) | — | (9,181,913 | ) | ||||||||||
Institutional Class | ||||||||||||||||
Net investment income | — | — | — | — | ||||||||||||
Net realized gains | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
— | — | — | — | |||||||||||||
Capital share transactions: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 15,263,430 | 24,113,199 | 167,028,850 | 304,243,470 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 19,452,688 | 26,821,337 | — | 8,765,593 | ||||||||||||
Shares redeemed | (23,725,014 | ) | (54,874,473 | ) | (337,892,945 | ) | (466,136,694 | ) | ||||||||
Redemption fees | 6,940 | 3,950 | 5,737 | 26,761 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 10,998,044 | (3,935,987 | ) | (170,858,358 | ) | (153,100,870 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Institutional Class | ||||||||||||||||
Shares sold | 1,508,962 | — | 179,589,914 | — | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | — | — | — | ||||||||||||
Shares redeemed | — | — | (182,850 | ) | — | |||||||||||
Redemption fees | — | — | 1,546 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 1,508,962 | — | 179,408,610 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | (964,281 | ) | (36,696,258 | ) | 78,985,149 | (104,991,054 | ) | |||||||||
Net assets: | ||||||||||||||||
Beginning of period | 155,967,892 | 192,664,150 | 1,316,095,088 | 1,421,086,142 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 155,003,611 | $ | 155,967,892 | $ | 1,395,080,237 | $ | 1,316,095,088 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income (loss) included | $ | (3,596,923 | ) | $ | (2,258,540 | ) | $ | (9,834,787 | ) | $ | (4,649,406 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Capital share transactions — shares: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 4,888,166 | 6,305,552 | 5,828,470 | 10,961,555 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 5,704,601 | 7,229,471 | — | 333,419 | ||||||||||||
Shares redeemed | (7,087,293 | ) | (14,099,286 | ) | (11,839,899 | ) | (17,143,695 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 3,505,474 | (564,263 | ) | (6,011,429 | ) | (5,848,721 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Institutional Class1 | ||||||||||||||||
Shares sold | 496,161 | — | 6,293,049 | — | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | — | — | — | ||||||||||||
Shares redeemed | — | — | (6,329 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 496,161 | — | 6,286,720 | — | ||||||||||||
|
|
|
|
|
|
|
|
1 | Institutional class inception date was February 1, 2016. |
See Notes to Financial Statements.
106
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
INTERNATIONAL OPPORTUNITIES FUND | LARGE CAP VALUE FUND | LONG/SHORT FUND | ||||||||||||||||||||
Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||||||
$ | (2,053,470 | ) | $ | (1,455,524 | ) | $ | 2,352,015 | $ | 4,417,033 | $ | 753,988 | $ | 3,700,470 | |||||||||
| 212,790 | | 22,684,497 | 382,711 | 23,888,706 | (86,785,891 | ) | 113,223,926 | ||||||||||||||
— | — | 97,399 | — | — | (1,377,491 | ) | ||||||||||||||||
— | — | — | — | (20,079,316 | ) | (2,298,097 | ) | |||||||||||||||
| 44,949,349 | | (30,215,034 | ) | 13,040,987 | (44,068,657 | ) | 137,450,809 | (484,033,257 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
| 43,108,669 | | (8,986,061 | ) | 15,873,112 | (15,762,918 | ) | 31,339,590 | (370,784,449 | ) | ||||||||||||
— | — | (2,010,236 | ) | (4,717,198 | ) | (364,125 | ) | (13,117,322 | ) | |||||||||||||
(22,512,072 | ) | (32,985,697 | ) | (20,730,247 | ) | (90,487,206 | ) | (49,332,592 | ) | (75,718,399 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(22,512,072 | ) | (32,985,697 | ) | (22,740,483 | ) | (95,204,404 | ) | (49,696,717 | ) | (88,835,721 | ) | |||||||||||
— | — | (27,251 | ) | (58,397 | ) | (479,596 | ) | (10,613,371 | ) | |||||||||||||
— | — | (252,053 | ) | (1,885,955 | ) | (22,243,655 | ) | (50,288,258 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
— | — | (279,304 | ) | (1,944,352 | ) | (22,723,251 | ) | (60,901,629 | ) | |||||||||||||
66,076,340 | 185,060,513 | 5,897,060 | 12,556,127 | 54,515,849 | 230,166,705 | |||||||||||||||||
22,015,075 | 32,189,321 | 22,424,114 | 94,061,044 | 49,262,675 | 86,127,189 | |||||||||||||||||
(131,349,142 | ) | (61,450,925 | ) | (53,288,924 | ) | (160,845,016 | ) | (437,319,273 | ) | (1,090,754,118 | ) | |||||||||||
4,133 | 8,758 | 196 | 3,511 | 4,673 | 43,449 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(43,253,594 | ) | 155,807,667 | (24,967,554 | ) | (54,224,334 | ) | (333,536,076 | ) | (774,416,775 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
84,328,961 | — | 2,391,412 | 213,244 | 22,226,213 | 168,746,062 | |||||||||||||||||
— | — | 276,502 | 1,934,190 | 22,325,848 | 58,822,477 | |||||||||||||||||
(867,162 | ) | — | (1,218,648 | ) | (6,667,455 | ) | (384,453,639 | ) | (626,995,982 | ) | ||||||||||||
146 | — | 1,040 | — | 101,323 | 74,853 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
83,461,945 | — | 1,450,306 | (4,520,021 | ) | (339,800,255 | ) | (399,352,590 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
60,804,948 | 113,835,909 | (30,663,923 | ) | (171,656,029 | ) | (714,416,709 | ) | (1,694,291,164 | ) | |||||||||||||
453,495,126 | 339,659,217 | 245,580,983 | 417,237,012 | 1,024,983,888 | 2,719,275,052 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | 514,300,074 | $ | 453,495,126 | $ | 214,917,060 | $ | 245,580,983 | $ | 310,567,179 | $ | 1,024,983,888 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | (2,764,052 | ) | $ | (710,582 | ) | $ | 296,775 | $ | (17,753 | ) | $ | 240,469 | $ | 330,202 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
23,852,539 | 65,274,231 | 699,477 | 1,202,742 | 4,497,093 | 15,339,817 | |||||||||||||||||
7,862,527 | 12,055,926 | 2,616,695 | 9,575,413 | 4,332,689 | 5,703,787 | |||||||||||||||||
(48,752,293 | ) | (21,478,869 | ) | (6,127,555 | ) | (15,418,721 | ) | (37,679,806 | ) | (75,345,316 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(17,037,227 | ) | 55,851,288 | (2,811,383 | ) | (4,640,566 | ) | (28,850,024 | ) | (54,301,712 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
31,616,629 | — | 259,275 | 21,708 | 1,831,061 | 11,145,839 | |||||||||||||||||
— | — | 32,339 | 196,684 | 1,961,850 | 3,892,950 | |||||||||||||||||
(312,690 | ) | — | (132,491 | ) | (681,797 | ) | (31,954,283 | ) | (44,674,081 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
31,303,939 | — | 159,123 | (463,405 | ) | (28,161,372 | ) | (29,635,292 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
107
Table of Contents
WASATCH FUNDS — Statements of Changes in Net Assets (continued) | ||
| ||
|
MICRO CAP FUND | MICRO CAP VALUE FUND | |||||||||||||||
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (1,675,100 | ) | $ | (2,613,931 | ) | $ | (785,970 | ) | $ | (879,035 | ) | ||||
Net realized gain (loss) on investments, foreign | 6,495,614 | 42,447,306 | (190,870 | ) | 18,597,991 | |||||||||||
Net realized gain on options written | — | — | — | 272,422 | ||||||||||||
Change in unrealized appreciation (depreciation) on | (3,100,377 | ) | (30,582,373 | ) | 2,899,742 | (2,960,212 | ) | |||||||||
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|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 1,720,137 | 9,251,002 | 1,922,902 | 15,031,166 | ||||||||||||
Dividends paid from: | ||||||||||||||||
Investor Class | ||||||||||||||||
Net investment income | — | �� | (57,541 | ) | — | — | ||||||||||
Net realized gains | (40,544,074 | ) | (13,743,034 | ) | (17,904,955 | ) | (21,640,698 | ) | ||||||||
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| |||||||||
(40,544,074 | ) | (13,800,575 | ) | (17,904,955 | ) | (21,640,698 | ) | |||||||||
Institutional Class | ||||||||||||||||
Net investment income | — | — | — | — | ||||||||||||
Net realized gains | — | — | — | — | ||||||||||||
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| |||||||||
— | — | — | — | |||||||||||||
Capital share transactions: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 3,934,857 | 8,870,349 | 24,707,865 | 18,213,412 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 38,421,674 | 13,148,507 | 17,528,757 | 21,205,896 | ||||||||||||
Shares redeemed | (17,910,258 | ) | (37,976,905 | ) | (11,625,801 | ) | (37,443,746 | ) | ||||||||
Redemption fees | 1,335 | 3,154 | 10,984 | 2,428 | ||||||||||||
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| |||||||||
Net increase (decrease) | 24,447,608 | (15,954,895 | ) | 30,621,805 | 1,977,990 | |||||||||||
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| |||||||||
Institutional Class | ||||||||||||||||
Shares sold | — | — | — | — | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | — | — | — | ||||||||||||
Shares redeemed | — | — | — | — | ||||||||||||
Redemption fees | — | — | — | — | ||||||||||||
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| |||||||||
Net increase | — | — | — | — | ||||||||||||
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| |||||||||
Total increase (decrease) in net assets | (14,376,329 | ) | (20,504,468 | ) | 14,639,752 | (4,631,542 | ) | |||||||||
Net assets: | ||||||||||||||||
Beginning of period | 273,310,843 | 293,815,311 | 154,168,864 | 158,800,406 | ||||||||||||
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End of period | $ | 258,934,514 | $ | 273,310,843 | $ | 168,808,616 | $ | 154,168,864 | ||||||||
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| |||||||||
Undistributed net investment income (loss) included | $ | (2,439,889 | ) | $ | (764,789 | ) | $ | (763,193 | ) | $ | 22,777 | |||||
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Capital share transactions — shares: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 582,504 | 1,119,278 | 9,261,436 | 6,134,016 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 5,777,695 | 1,700,971 | 6,565,078 | 7,655,558 | ||||||||||||
Shares redeemed | (2,733,816 | ) | (4,853,557 | ) | (4,374,734 | ) | (12,687,971 | ) | ||||||||
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| |||||||||
Net increase (decrease) in shares outstanding | 3,626,383 | (2,033,308 | ) | 11,451,780 | 1,101,603 | |||||||||||
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| |||||||||
Institutional Class | ||||||||||||||||
Shares sold | — | — | — | — | ||||||||||||
Shares issued to holders in reinvestment of dividends | — | — | — | — | ||||||||||||
Shares redeemed | — | — | — | — | ||||||||||||
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| |||||||||
Net increase in shares outstanding | — | — | — | — | ||||||||||||
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1 | Institutional class inception date was February 1, 2016. |
See Notes to Financial Statements.
108
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
SMALL CAP GROWTH FUND | SMALL CAP VALUE FUND | STRATEGIC INCOME FUND | ||||||||||||||||||||
Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||||||
$ | (7,613,861 | ) | $ | (17,146,891 | ) | $ | 566,528 | $ | 2,406,464 | $ | 2,171,803 | $ | 2,881,370 | |||||||||
| 94,450,324 |
| 339,817,590 | (6,704,861 | ) | 10,252,311 | (8,369,722 | ) | 3,027,134 | |||||||||||||
— | — | — | — | — | — | |||||||||||||||||
| (54,063,565 | ) | (290,530,333 | ) | 4,031,790 | (5,669,868 | ) | 6,711,408 | (15,972,843 | ) | ||||||||||||
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32,772,898 | 32,140,366 | (2,106,543 | ) | 6,988,907 | 513,489 | (10,064,339 | ) | |||||||||||||||
— | — | (1,366,133 | ) | — | (1,246,231 | ) | (4,052,160 | ) | ||||||||||||||
(322,361,340 | ) | (210,961,388 | ) | — | — | (2,658,712 | ) | (5,830,282 | ) | |||||||||||||
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(322,361,340 | ) | (210,961,388 | ) | (1,366,133 | ) | — | (3,904,943 | ) | (9,882,442 | ) | ||||||||||||
— | — | (98,715 | ) | — | — | — | ||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
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— | — | (98,715 | ) | — | — | — | ||||||||||||||||
118,761,445 | 306,525,902 | 26,282,205 | 42,777,490 | 4,054,108 | 67,443,100 | |||||||||||||||||
309,835,993 | 202,491,582 | 1,301,422 | — | 3,844,721 | 9,799,845 | |||||||||||||||||
(314,163,871 | ) | (549,309,702 | ) | (25,237,490 | ) | (57,465,289 | ) | (30,984,262 | ) | (63,607,687 | ) | |||||||||||
56,413 | 63,180 | 670 | 12,491 | 2,032 | 14,686 | |||||||||||||||||
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| |||||||||||
114,489,980 | (40,229,038 | ) | 2,346,807 | (14,675,308 | ) | (23,083,401 | ) | 13,649,944 | ||||||||||||||
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| |||||||||||
50,758,166 | — | 2,968,402 | 11,214,884 | — | — | |||||||||||||||||
— | — | 98,258 | — | — | — | |||||||||||||||||
(715,541 | ) | — | (2,304,217 | ) | (2,892,431 | ) | — | — | ||||||||||||||
— | — | 44 | 2,995 | — | — | |||||||||||||||||
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50,042,625 | — | 762,487 | 8,325,448 | — | — | |||||||||||||||||
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(125,055,837 | ) | (219,050,060 | ) | (462,097 | ) | 639,047 | (26,474,855 | ) | (6,296,837 | ) | ||||||||||||
2,000,587,633 | 2,219,637,693 | 276,595,262 | 275,956,215 | 88,660,923 | 94,957,760 | |||||||||||||||||
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$ | 1,875,531,796 | $ | 2,000,587,633 | $ | 276,133,165 | $ | 276,595,262 | $ | 62,186,068 | $ | 88,660,923 | |||||||||||
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$ | (19,781,425 | ) | $ | (12,167,564 | ) | $ | 425,543 | $ | 1,323,863 | $ | 1,023,934 | $ | 98,362 | |||||||||
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2,909,323 | 5,977,502 | 4,564,028 | 6,914,700 | 391,850 | 5,399,978 | |||||||||||||||||
7,380,562 | 4,103,173 | 216,904 | — | 373,788 | 806,797 | |||||||||||||||||
(7,659,124 | ) | (10,734,199 | ) | (4,437,072 | ) | (9,548,655 | ) | (3,112,974 | ) | (5,270,070 | ) | |||||||||||
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2,630,761 | (653,524 | ) | 343,860 | (2,633,955 | ) | (2,347,336 | ) | 936,705 | ||||||||||||||
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1,365,087 | — | 555,852 | 1,844,006 | — | — | |||||||||||||||||
— | — | 16,322 | — | — | — | |||||||||||||||||
(19,004 | ) | — | (380,253 | ) | (450,381 | ) | — | — | ||||||||||||||
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1,346,083 | — | 191,921 | 1,393,625 | — | — | |||||||||||||||||
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109
Table of Contents
WASATCH FUNDS — Statements of Changes in Net Assets (continued) | ||
| ||
|
ULTRA GROWTH FUND | WORLD INNOVATORS FUND | |||||||||||||||
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 20161 (Unaudited) | Year Ended September 30, 2015 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | (517,173 | ) | $ | (1,149,038 | ) | $ | (883,713 | ) | $ | (1,611,952 | ) | ||||
Net realized gain (loss) on investments, foreign | 4,032,088 | 9,017,957 | 4,650,313 | 20,035,191 | ||||||||||||
Change in unrealized appreciation (depreciation) on investments, foreign currency translations | (3,308,359 | ) | (3,043,910 | ) | 1,704,885 | (17,578,392 | ) | |||||||||
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| |||||||||
Net increase in net assets resulting from operations | 206,556 | 4,825,009 | 5,471,485 | 844,847 | ||||||||||||
Dividends paid from: | ||||||||||||||||
Investor Class | ||||||||||||||||
Net investment income | — | (50,881 | ) | — | — | |||||||||||
Net realized gains | (8,679,065 | ) | (29,102,465 | ) | (24,130,023 | ) | (25,428,998 | ) | ||||||||
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| |||||||||
(8,679,065 | ) | (29,153,346 | ) | (24,130,023 | ) | (25,428,998 | ) | |||||||||
Institutional Class | ||||||||||||||||
Net investment income | — | — | — | — | ||||||||||||
Net realized gains | — | — | — | — | ||||||||||||
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|
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| |||||||||
— | — | — | — | |||||||||||||
Capital share transactions: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 2,867,862 | 4,721,549 | 14,194,632 | 23,707,197 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 8,403,349 | 28,117,008 | 22,861,112 | 23,823,818 | ||||||||||||
Shares redeemed | (6,401,350 | ) | (15,331,162 | ) | (18,681,679 | ) | (89,996,316 | ) | ||||||||
Redemption fees | 1,197 | 2,527 | 435 | 10,860 | ||||||||||||
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| |||||||||
Net increase (decrease) | 4,871,058 | 17,509,922 | 18,374,500 | (42,454,441 | ) | |||||||||||
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Institutional Class | ||||||||||||||||
Shares sold | — | — | 81,090 | — | ||||||||||||
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| |||||||||
Net increase | — | — | 81,090 | — | ||||||||||||
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| |||||||||
Total increase (decrease) in net assets | (3,601,451 | ) | (6,818,415 | ) | (202,948 | ) | (67,038,592 | ) | ||||||||
Net assets: | ||||||||||||||||
Beginning of period | 96,015,292 | 102,833,707 | 186,272,023 | 253,310,615 | ||||||||||||
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End of period | $ | 92,413,841 | $ | 96,015,292 | $ | 186,069,075 | $ | 186,272,023 | ||||||||
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Undistributed net investment income (loss) included | $ | 1,278,902 | $ | 1,796,075 | $ | (1,738,380 | ) | $ | (854,667 | ) | ||||||
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Capital share transactions — shares: | ||||||||||||||||
Investor Class | ||||||||||||||||
Shares sold | 163,152 | 228,979 | 731,954 | 1,119,343 | ||||||||||||
Shares issued to holders in reinvestment of dividends | 459,702 | 1,481,402 | 1,198,171 | 1,171,279 | ||||||||||||
Shares redeemed | (372,645 | ) | (738,870 | ) | (976,171 | ) | (4,257,523 | ) | ||||||||
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Net increase (decrease) in shares outstanding | 250,209 | 971,511 | 953,954 | (1,966,901 | ) | |||||||||||
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Institutional Class | ||||||||||||||||
Shares sold | — | — | 4,734 | — | ||||||||||||
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Net increase in shares outstanding | — | — | 4,734 | — | ||||||||||||
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1 | Institutional class inception date was February 1, 2016. |
See Notes to Financial Statements.
110
Table of Contents
MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
INCOME FUND | U.S. TREASURY FUND | |||||||||||||
Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | Six Months Ended March 31, 2016 (Unaudited) | Year Ended September 30, 2015 | |||||||||||
$ | 1,043,836 | $ | 1,719,040 | $ | 3,683,748 | $ | 6,605,799 | |||||||
| (37,050 | ) | 407,021 | (409,147 | ) | 40,074,870 | ||||||||
| 338,944 |
| (23,148 | ) | 20,473,714 | (26,646,790 | ) | |||||||
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1,345,730 | 2,102,913 | 23,748,315 | 20,033,879 | |||||||||||
(1,063,416 | ) | (1,693,986 | ) | (3,662,635 | ) | (6,608,427 | ) | |||||||
— | — | (15,905,989 | ) | — | ||||||||||
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| |||||||
(1,063,416 | ) | (1,693,986 | ) | (19,568,624 | ) | (6,608,427 | ) | |||||||
— | — | — | — | |||||||||||
— | — | — | — | |||||||||||
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| |||||||
— | — | — | — | |||||||||||
15,221,584 | 19,309,510 | 105,053,671 | 263,443,321 | |||||||||||
839,574 | 1,594,129 | 18,703,954 | 6,348,154 | |||||||||||
(17,958,372 | ) | (29,108,583 | ) | (71,961,707 | ) | (180,211,720 | ) | |||||||
5,479 | 2,724 | 86,064 | 192,080 | |||||||||||
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| |||||||
(1,891,735 | ) | (8,202,220 | ) | 51,881,982 | 89,771,835 | |||||||||
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— | — | — | — | |||||||||||
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— | — | — | — | |||||||||||
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| |||||||
(1,609,421 | ) | (7,793,293 | ) | 56,061,673 | 103,197,287 | |||||||||
108,958,886 | 116,752,179 | 327,860,917 | 224,663,630 | |||||||||||
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| |||||||
$ | 107,349,465 | $ | 108,958,886 | $ | 383,922,590 | $ | 327,860,917 | |||||||
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| |||||||
$ | 14,284 |
| $ | 33,864 | $ | 232 | $ | (20,881 | ) | |||||
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| |||||||
1,498,330 | 1,896,861 | 5,735,058 | 14,002,689 | |||||||||||
82,740 | 156,439 | 1,090,197 | 341,021 | |||||||||||
(1,768,259 | ) | (2,856,744 | ) | (3,966,608 | ) | (9,698,391 | ) | |||||||
�� |
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(187,189 | ) | (803,444 | ) | 2,858,647 | 4,645,319 | |||||||||
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— | — | — | — | |||||||||||
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— | — | — | — | |||||||||||
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111
Table of Contents
WASATCH FUNDS — Financial Highlights | ||
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|
Income (Loss) from Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||
Net Asset Value Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Operations | Redemption Fees (See Note 2) | Dividends from Net Investment Income | Distributions from Net Realized Gains | Total Distributions | |||||||||||||||||||||||||
Core Growth Fund — Investor Class | ||||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 57.83 | (0.04 | ) | 0.17 | 0.13 | — | 4 | — | (6.72 | ) | (6.72 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 53.46 | (0.14 | )15 | 5.95 | 5.81 | — | 4 | — | (1.44 | ) | (1.44 | ) | |||||||||||||||||||
Year ended 9/30/14 | $ | 52.49 | (0.39 | ) | 2.12 | 1.73 | — | 4 | — | (0.76 | ) | (0.76 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 41.41 | (0.12 | ) | 11.19 | 11.07 | 0.01 | — | — | — | ||||||||||||||||||||||
Year ended 9/30/12 | $ | 32.63 | (0.26 | ) | 9.04 | 8.78 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/11 | $ | 29.95 | (0.19 | ) | 2.87 | 2.68 | — | 4 | — | — | — | |||||||||||||||||||||
Core Growth Fund — Institutional Class | ||||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 57.99 | (0.02 | ) | 0.18 | 0.16 | — | 4 | — | (6.72 | ) | (6.72 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 53.58 | 0.06 | 5.79 | 5.85 | — | 4 | — | (1.44 | ) | (1.44 | ) | ||||||||||||||||||||
Year ended 9/30/14 | $ | 52.57 | (0.23 | ) | 2.00 | 1.77 | — | 4 | — | (0.76 | ) | (0.76 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 41.44 | (0.07 | ) | 11.20 | 11.13 | — | 4 | — | — | — | |||||||||||||||||||||
Period ended 9/30/128 | $ | 38.32 | (0.16 | ) | 3.28 | 3.12 | — | — | — | — | ||||||||||||||||||||||
Emerging India Fund — Investor Class | ||||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 3.07 | (0.01 | ) | (0.17 | ) | (0.18 | ) | — | 4 | — | (0.04 | ) | (0.04 | ) | |||||||||||||||||
Year ended 9/30/15 | $ | 2.73 | (0.04 | ) | 0.38 | 0.34 | — | 4 | — | 4 | — | — | 4 | |||||||||||||||||||
Year ended 9/30/14 | $ | 1.78 | (— | )4 | 0.95 | 0.95 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/13 | $ | 2.02 | (0.01 | ) | (0.23 | ) | (0.24 | ) | — | 4 | — | — | — | |||||||||||||||||||
Year ended 9/30/12 | $ | 1.83 | (0.01 | ) | 0.21 | 0.20 | — | 4 | (0.01 | ) | — | (0.01 | ) | |||||||||||||||||||
Period ended 9/30/1110 | $ | 2.00 | — | 4 | (0.17 | ) | (0.17 | ) | — | 4 | — | — | — | |||||||||||||||||||
Emerging India Fund — Institutional Class | ||||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 2.82 | — | 4 | 0.03 | 0.03 | — | — | — | — | ||||||||||||||||||||||
Emerging Markets Select Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 8.35 | (0.03 | ) | 0.32 | 0.29 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/15 | $ | 10.31 | (0.04 | ) | (1.89 | ) | (1.93 | ) | — | 4 | (0.03 | ) | — | (0.03 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 9.56 | (0.01 | ) | 0.77 | 0.76 | — | 4 | (0.01 | ) | — | (0.01 | ) | |||||||||||||||||||
Period ended 9/30/1313 | $ | 10.00 | (— | )4 | (0.44 | ) | (0.44 | ) | — | 4 | — | — | — | |||||||||||||||||||
Emerging Markets Select Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 8.41 | (0.02 | ) | 0.32 | 0.30 | — | — | — | — | ||||||||||||||||||||||
Year ended 9/30/15 | $ | 10.37 | (0.03 | ) | (1.88 | ) | (1.91 | ) | — | 4 | (0.05 | ) | — | (0.05 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 9.61 | — | 4 | 0.78 | 0.78 | — | 4 | (0.02 | ) | — | (0.02 | ) | |||||||||||||||||||
Period ended 9/30/1314 | $ | 10.00 | (— | )4 | (0.39 | ) | (0.39 | ) | — | 4 | — | — | — | |||||||||||||||||||
Emerging Markets Small Cap Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 2.39 | (0.03 | ) | 0.06 | 0.03 | — | 4 | — | 4 | — | — | 4 | |||||||||||||||||||
Year ended 9/30/15 | $ | 2.74 | (0.03 | ) | (0.32 | ) | (0.35 | ) | — | 4 | — | 4 | — | — | 4 | |||||||||||||||||
Year ended 9/30/14 | $ | 2.67 | (0.01 | ) | 0.14 | 0.13 | — | 4 | — | (0.06 | ) | (0.06 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 2.66 | 0.01 | 0.01 | 0.02 | — | 4 | (0.01 | ) | — | (0.01 | ) | ||||||||||||||||||||
Year ended 9/30/12 | $ | 2.16 | 0.01 | 0.49 | 0.50 | — | 4 | — | — | — | ||||||||||||||||||||||
Year ended 9/30/11 | $ | 2.37 | — | 4 | (0.21 | ) | (0.21 | ) | — | 4 | — | 4 | — | — | 4 | |||||||||||||||||
Emerging Markets Small Cap Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 2.31 | — | 4 | 0.11 | 0.11 | — | — | — | — | ||||||||||||||||||||||
Frontier Emerging Small Countries Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 2.77 | (0.01 | ) | (0.11 | ) | (0.12 | ) | — | 4 | — | 4 | — | — | 4 | |||||||||||||||||
Year ended 9/30/15 | $ | 3.32 | 0.02 | (0.50 | ) | (0.48 | ) | — | 4 | (0.02 | ) | (0.05 | ) | (0.07 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 2.97 | 0.03 | 0.33 | 0.36 | — | 4 | (0.01 | ) | — | (0.01 | ) | ||||||||||||||||||||
Year ended 9/30/13 | $ | 2.41 | 0.01 | 0.55 | 0.56 | — | 4 | — | 4 | — | 4 | — | 4 | |||||||||||||||||||
Period ended 9/30/129 | $ | 2.00 | 0.01 | 0.40 | 0.41 | — | 4 | — | — | — | ||||||||||||||||||||||
Frontier Emerging Small Countries Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 2.58 | — | 4 | 0.08 | 0.08 | — | — | — | — | ||||||||||||||||||||||
Global Opportunities Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 3.51 | (0.01 | ) | 0.16 | 0.15 | — | 4 | (0.01 | ) | (0.45 | ) | (0.46 | ) | ||||||||||||||||||
Year ended 9/30/15 | $ | 4.28 | (0.05 | ) | (0.08 | ) | (0.13 | ) | — | 4 | (0.01 | ) | (0.63 | ) | (0.64 | ) | ||||||||||||||||
Year ended 9/30/14 | $ | 4.58 | (0.05 | ) | 0.23 | 0.18 | — | 4 | — | 4 | (0.48 | ) | (0.48 | ) | ||||||||||||||||||
Year ended 9/30/13 | $ | 4.15 | (0.02 | ) | 0.93 | 0.91 | — | 4 | — | (0.48 | ) | (0.48 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 3.68 | (0.03 | ) | 0.93 | 0.90 | — | 4 | — | (0.43 | ) | (0.43 | ) | |||||||||||||||||||
Year ended 9/30/11 | $ | 3.97 | (0.02 | ) | (0.13 | ) | (0.15 | ) | — | 4 | — | (0.14 | ) | (0.14 | ) | |||||||||||||||||
Global Opportunities Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 3.09 | — | 4 | 0.11 | 0.11 | — | — | — | — |
See Notes to Financial Highlights and Notes to Financial Statements.
112
Table of Contents
(for a share outstanding throughout each period) | ||
| ||
|
Ratios to Average Net Assets | Supplemental Data | |||||||||||||||||||||||||||||
Net Asset Value End of Period | Total Return (%)1 | Expenses Net of Waivers and Reimbursements (%)2 | Expenses Before Waivers and Reimbursements (%)2 | Net Investment Income Net of Waivers and Reimbursements (%)2 | Net Investment Income Before Waivers and Reimbursements (%)2 | Net Assets End of Period (000s) | Portfolio Turnover Rate1 3 | |||||||||||||||||||||||
$ | 51.24 | (0.34 | ) | 1.20 | 5 | 1.20 | 5 | (0.35 | ) | (0.35 | ) | $ | 1,015,590 | 9% | ||||||||||||||||
$ | 57.83 | 10.87 | 1.17 | 5 | 1.17 | 5 | (0.29 | )15 | (0.29 | )15 | $ | 1,014,515 | 39% | |||||||||||||||||
$ | 53.46 | 3.26 | 1.18 | 5 | 1.18 | 5 | (0.64 | ) | (0.64 | ) | $ | 859,086 | 26% | |||||||||||||||||
$ | 52.49 | 26.76 | 1.21 | 5 | 1.21 | 5 | (0.39 | ) | (0.39 | ) | $ | 924,304 | 16% | |||||||||||||||||
$ | 41.41 | 26.91 | 1.23 | 5 | 1.23 | 5 | (0.70 | ) | (0.70 | ) | $ | 581,371 | 28% | |||||||||||||||||
$ | 32.63 | 8.95 | 1.22 | 1.22 | (0.57 | ) | (0.57 | ) | $ | 433,294 | 27% | |||||||||||||||||||
$ | 51.43 | (0.28 | ) | 1.10 | 5 | 1.09 | 5 | (0.24 | ) | (0.23 | ) | $ | 175,144 | 9% | ||||||||||||||||
$ | 57.99 | 10.94 | 1.12 | 5 | 1.13 | 5 | (0.29 | )15 | (0.30 | )15 | $ | 150,614 | 39% | |||||||||||||||||
$ | 53.58 | 3.31 | 1.13 | 5 | 1.19 | 5 | (0.59 | ) | (0.65 | )5 | $ | 49,369 | 26% | |||||||||||||||||
$ | 52.57 | 26.86 | 1.12 | 5 | 1.32 | 5 | (0.32 | ) | (0.52 | )5 | $ | 19,971 | 16% | |||||||||||||||||
$ | 41.44 | 8.14 | 1.12 | 5 | 1.55 | 5 | (0.62 | ) | (1.05 | ) | $ | 9,101 | 28% | |||||||||||||||||
$ | 2.85 | (5.86 | ) | 1.89 | 5 | 2.01 | 5 | (1.25 | ) | (1.37 | ) | $ | 62,342 | 27% | ||||||||||||||||
$ | 3.07 | 12.51 | 1.95 | 5 | 2.12 | 5 | (1.38 | ) | (1.55 | ) | $ | 63,850 | 36% | |||||||||||||||||
$ | 2.73 | 53.37 | 1.96 | 5 | 2.58 | 5 | (0.76 | ) | (1.38 | ) | $ | 44,150 | 13% | |||||||||||||||||
$ | 1.78 | (11.88 | ) | 1.95 | 5 | 2.99 | 5 | (0.99 | ) | (2.03 | ) | $ | 15,938 | 40% | ||||||||||||||||
$ | 2.02 | 11.42 | 1.95 | 5 | 3.41 | 5 | (0.65 | ) | (2.11 | ) | $ | 13,658 | 17% | |||||||||||||||||
$ | 1.83 | (8.50 | ) | 1.95 | 4.85 | (0.07 | ) | (2.97 | ) | $ | 10,580 | 2% | ||||||||||||||||||
$ | 2.85 | 1.06 | 1.51 | 5 | 4.16 | 5 | 0.37 | (2.28 | ) | $ | 1,216 | 27% | ||||||||||||||||||
$ | 8.64 | 3.47 | 1.63 | 5 | 2.07 | 5 | (0.64 | ) | (1.08 | ) | $ | 18,481 | 32% | |||||||||||||||||
$ | 8.35 | (18.81 | ) | 1.70 | 6 | 2.00 | 6 | (0.23 | ) | (0.53 | ) | $ | 18,527 | 46% | ||||||||||||||||
$ | 10.31 | 7.92 | 1.69 | 5 | 1.88 | 5 | (0.09 | ) | (0.28 | ) | $ | 26,502 | 59% | |||||||||||||||||
$ | 9.56 | (4.40 | ) | 1.69 | 5 | 2.40 | 5 | 0.04 | (0.67 | ) | $ | 29,374 | 43% | |||||||||||||||||
$ | 8.71 | 3.57 | 1.40 | 5 | 1.78 | 5 | (0.41 | ) | (0.79 | ) | $ | 20,015 | 32% | |||||||||||||||||
$ | 8.41 | (18.67 | ) | 1.51 | 6 | 1.77 | 6 | (0.06 | ) | (0.32 | ) | $ | 19,270 | 46% | ||||||||||||||||
$ | 10.37 | 8.13 | 1.51 | 5 | 1.71 | 5 | 0.05 | (0.15 | ) | $ | 32,306 | 59% | ||||||||||||||||||
$ | 9.61 | (3.90 | ) | 1.50 | 5 | 2.21 | 5 | (0.18 | ) | (0.89 | ) | $ | 28,861 | 43% | ||||||||||||||||
$ | 2.42 | 1.27 | 1.96 | 6 | 2.08 | 6 | (1.15 | ) | (1.27 | ) | $ | 677,248 | 24% | |||||||||||||||||
$ | 2.39 | (12.65 | ) | 1.95 | 5 | 2.01 | 5 | (0.63 | ) | (0.69 | ) | $ | 981,367 | 59% | ||||||||||||||||
$ | 2.74 | 4.90 | 1.95 | 5 | 2.02 | 5 | (0.28 | ) | (0.35 | ) | $ | 1,457,882 | 55% | |||||||||||||||||
$ | 2.67 | 0.85 | 1.95 | 5 | 2.06 | 5 | 0.21 | 0.09 | $ | 1,785,681 | 41% | |||||||||||||||||||
$ | 2.66 | 23.15 | 1.95 | 5 | 2.13 | 5 | 0.29 | 0.11 | $ | 1,482,265 | 39% | |||||||||||||||||||
$ | 2.16 | (8.85 | ) | 1.96 | 2.19 | 0.22 | (0.01 | ) | $ | 774,198 | 48% | |||||||||||||||||||
$ | 2.42 | 4.76 | 1.81 | 6 | 1.85 | 6 | 0.20 | 0.16 | $ | 127,504 | 24% | |||||||||||||||||||
$ | 2.65 | (4.17 | ) | 2.25 | 5 | 2.41 | 5 | (0.46 | ) | (0.61 | ) | $ | 804,449 | 26% | ||||||||||||||||
$ | 2.77 | (14.88 | ) | 2.25 | 5 | 2.28 | 5 | 0.39 | 0.36 | $ | 1,027,673 | 34% | ||||||||||||||||||
$ | 3.32 | 11.97 | 2.24 | 5 | 2.24 | 5 | 0.79 | 0.79 | $ | 1,324,694 | 22% | |||||||||||||||||||
$ | 2.97 | 22.88 | 2.25 | 5 | 2.43 | 5 | 0.81 | 0.63 | $ | 730,694 | 13% | |||||||||||||||||||
$ | 2.41 | 20.50 | 2.25 | 5 | 3.64 | 5 | 1.31 | (0.08 | ) | $ | 33,045 | 5% | ||||||||||||||||||
$ | 2.66 | 3.10 | 2.05 | 5 | 2.12 | 5 | 1.12 | 1.06 | $ | 99,694 | 26% | |||||||||||||||||||
$ | 3.20 | 3.39 | 1.75 | 6 | 1.75 | 6 | (1.18 | ) | (1.18 | ) | $ | 153,416 | 26% | |||||||||||||||||
$ | 3.51 | (3.88 | ) | 1.81 | 5 | 1.81 | 5 | (1.10 | ) | (1.10 | ) | $ | 155,968 | 54% | ||||||||||||||||
$ | 4.28 | 3.94 | 1.78 | 5 | 1.78 | 5 | (0.83 | ) | (0.83 | ) | $ | 192,664 | 42% | |||||||||||||||||
$ | 4.58 | 24.23 | 1.80 | 5 | 1.80 | 5 | (0.70 | ) | (0.70 | ) | $ | 220,460 | 43% | |||||||||||||||||
$ | 4.15 | 26.69 | 1.84 | 5 | 1.84 | 5 | (0.61 | ) | (0.61 | ) | $ | 153,582 | 38% | |||||||||||||||||
$ | 3.68 | (4.21 | ) | 1.94 | 1.94 | (0.41 | ) | (0.41 | ) | $ | 199,855 | 59% | ||||||||||||||||||
$ | 3.20 | 3.56 | 1.35 | 5 | 3.07 | 5 | 0.24 | (1.48 | ) | $ | 1,588 | 26% |
113
Table of Contents
WASATCH FUNDS — Financial Highlights (continued) | ||
| ||
|
Income (Loss) from Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||
Net Asset Value Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Operations | Redemption Fees (See Note 2) | Dividends from Net Investment Income | Distributions from Net Realized Gains | Total Distributions | |||||||||||||||||||||||||
International Growth Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 27.88 | (0.14 | ) | 1.64 | 1.50 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/15 | $ | 26.78 | (0.09 | ) | 1.39 | 1.30 | — | 4 | (0.01 | ) | (0.19 | ) | (0.20 | ) | ||||||||||||||||||
Year ended 9/30/14 | $ | 28.76 | (0.02 | ) | (1.24 | ) | (1.26 | ) | — | 4 | — | (0.72 | ) | (0.72 | ) | |||||||||||||||||
Year ended 9/30/13 | $ | 22.44 | 0.07 | 6.32 | 6.39 | 0.01 | (0.08 | ) | — | (0.08 | ) | |||||||||||||||||||||
Year ended 9/30/12 | $ | 17.21 | 0.09 | 5.14 | 5.23 | — | 4 | — | — | — | ||||||||||||||||||||||
Year ended 9/30/11 | $ | 18.66 | — | 4 | (1.46 | ) | (1.46 | ) | 0.01 | — | — | — | ||||||||||||||||||||
International Growth Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 28.46 | 0.02 | 0.91 | 0.93 | — | 4 | — | — | — | ||||||||||||||||||||||
International Opportunities Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 2.74 | (0.02 | ) | 0.27 | 0.25 | — | 4 | — | (0.13 | ) | (0.13 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 3.09 | (0.01 | ) | (0.04 | ) | (0.05 | ) | — | 4 | — | (0.30 | ) | (0.30 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 2.94 | (0.01 | ) | 0.33 | 0.32 | — | 4 | — | (0.17 | ) | (0.17 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 2.41 | (— | )4 | 0.53 | 0.53 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/12 | $ | 2.24 | — | 4 | 0.44 | 0.44 | — | 4 | — | (0.27 | ) | (0.27 | ) | |||||||||||||||||||
Year ended 9/30/11 | $ | 2.57 | (0.01 | ) | (0.25 | ) | (0.26 | ) | — | 4 | — | (0.07 | ) | (0.07 | ) | |||||||||||||||||
International Opportunities Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 2.71 | — | 4 | 0.16 | 0.16 | — | 4 | — | — | — | |||||||||||||||||||||
Large Cap Value Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 8.84 | 0.09 | 0.54 | 0.63 | — | 4 | (0.08 | ) | (0.83 | ) | (0.91 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 12.69 | 0.15 | (0.69 | ) | (0.54 | ) | — | 4 | (0.16 | ) | (3.15 | ) | (3.31 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 16.57 | 0.21 | 1.49 | 1.70 | — | 4 | (0.22 | ) | (5.36 | ) | (5.58 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 14.31 | 0.22 | 2.37 | 2.59 | — | 4 | (0.20 | ) | (0.13 | ) | (0.33 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 11.85 | 0.20 | 2.46 | 2.66 | — | 4 | (0.20 | ) | — | (0.20 | ) | ||||||||||||||||||||
Year ended 9/30/11 | $ | 12.64 | 0.17 | (0.79 | ) | (0.62 | ) | — | 4 | (0.17 | ) | — | (0.17 | ) | ||||||||||||||||||
Large Cap Value Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 8.84 | 0.19 | 0.43 | 0.62 | — | 4 | (0.08 | ) | (0.83 | ) | (0.91 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 12.69 | (0.04 | ) | (0.49 | ) | (0.53 | ) | — | 4 | (0.17 | ) | (3.15 | ) | (3.32 | ) | ||||||||||||||||
Year ended 9/30/14 | $ | 16.57 | 0.20 | 1.52 | 1.72 | — | 4 | (0.24 | ) | (5.36 | ) | (5.60 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 14.31 | 0.22 | 2.39 | 2.61 | — | 4 | (0.22 | ) | (0.13 | ) | (0.35 | ) | |||||||||||||||||||
Period ended 9/30/128 | $ | 13.77 | 0.12 | 0.57 | 0.69 | — | 4 | (0.15 | ) | — | (0.15 | ) | ||||||||||||||||||||
Long/Short Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 12.36 | (0.02 | ) | 0.90 | 0.88 | — | 4 | (0.01 | ) | (1.24 | ) | (1.25 | ) | ||||||||||||||||||
Year ended 9/30/15 | $ | 16.29 | 0.02 | (3.00 | ) | (2.98 | ) | — | 4 | (0.14 | ) | (0.81 | ) | (0.95 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 15.82 | 0.17 | 0.65 | 0.82 | — | 4 | — | (0.35 | ) | (0.35 | ) | ||||||||||||||||||||
Year ended 9/30/13 | $ | 13.66 | (0.04 | ) | 2.23 | 2.19 | — | 4 | — | (0.03 | ) | (0.03 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 11.85 | (0.02 | ) | 1.83 | 1.81 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/11 | $ | 11.74 | (0.04 | ) | 0.16 | 0.12 | — | 4 | (0.01 | ) | — | (0.01 | ) | |||||||||||||||||||
Long/Short Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 12.38 | 0.25 | 0.63 | 0.88 | 0.02 | (0.02 | ) | (1.24 | ) | (1.26 | ) | ||||||||||||||||||||
Year ended 9/30/15 | $ | 16.32 | 0.06 | (3.02 | ) | (2.96 | ) | — | 4 | (0.17 | ) | (0.81 | ) | (0.98 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 15.83 | 0.18 | 0.66 | 0.84 | — | 4 | — | (0.35 | ) | (0.35 | ) | ||||||||||||||||||||
Period ended 9/30/1314 | $ | 13.80 | (0.01 | ) | 2.07 | 2.06 | — | 4 | — | (0.03 | ) | (0.03 | ) | |||||||||||||||||||
Micro Cap Fund |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 7.21 | (0.04 | ) | 0.15 | 0.11 | — | 4 | — | (1.09 | ) | (1.09 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 7.36 | (0.08 | )16 | 0.28 | 0.20 | — | 4 | — | 4 | (0.35 | ) | (0.35 | ) | ||||||||||||||||||
Year ended 9/30/14 | $ | 7.42 | (0.14 | ) | 0.08 | (0.06 | ) | — | 4 | — | — | — | ||||||||||||||||||||
Year ended 9/30/13 | $ | 5.71 | (0.10 | ) | 1.81 | 1.71 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/12 | $ | 4.40 | (0.09 | ) | 1.40 | 1.31 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/11 | $ | 4.44 | (0.06 | ) | 0.02 | (0.04 | ) | — | 4 | — | — | — | ||||||||||||||||||||
Micro Cap Value Fund |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 2.87 | (0.01 | ) | 0.05 | 0.04 | — | 4 | — | (0.32 | ) | (0.32 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 3.02 | (0.02 | )17 | 0.31 | 0.29 | — | 4 | — | (0.44 | ) | (0.44 | ) | |||||||||||||||||||
Year ended 9/30/14 | $ | 3.45 | (0.04 | ) | 0.18 | 0.14 | — | 4 | — | (0.57 | ) | (0.57 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 2.85 | (0.03 | ) | 0.91 | 0.88 | — | 4 | — | (0.28 | ) | (0.28 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 2.24 | (0.04 | ) | 0.65 | 0.61 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/11 | $ | 2.38 | (0.04 | ) | (0.10 | ) | (0.14 | ) | — | 4 | — | — | — |
See Notes to Financial Highlights and Notes to Financial Statements.
114
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(for a share outstanding throughout each period) | ||
| ||
|
Ratios to Average Net Assets | Supplemental Data | |||||||||||||||||||||||||||||
Net Asset Value End of Period | Total Return (%)1 | Expenses Net of Waivers and Reimbursements (%)2 | Expenses Before Waivers and Reimbursements (%)2 | Net Investment Income Net of Waivers and Reimbursements (%)2 | Net Investment Income Before Waivers and Reimbursements (%)2 | Net Assets End of Period (000s) | Portfolio Turnover Rate1 3 | |||||||||||||||||||||||
$ | 29.38 | 5.38 | 1.52 | 5 | 1.52 | 5 | (0.80 | ) | (0.80 | ) | $ | 1,210,300 | 30% | |||||||||||||||||
$ | 27.88 | 4.83 | 1.50 | 5 | 1.50 | 5 | (0.32 | ) | (0.32 | ) | $ | 1,316 | 46% | |||||||||||||||||
$ | 26.78 | (4.53 | ) | 1.46 | 5 | 1.46 | 5 | (0.06 | ) | (0.06 | ) | $ | 1,421,086 | 42% | ||||||||||||||||
$ | 28.76 | 28.63 | 1.49 | 5 | 1.49 | 5 | 0.25 | 0.25 | $ | 1,326,931 | 44% | |||||||||||||||||||
$ | 22.44 | 30.39 | 1.57 | 6 | 1.57 | 6 | 0.51 | 0.51 | $ | 434,824 | 44% | |||||||||||||||||||
$ | 17.21 | (7.77 | ) | 1.66 | 1.66 | (0.01 | ) | (0.01 | ) | $ | 281,481 | 70% | ||||||||||||||||||
$ | 29.39 | 3.27 | 1.35 | 5 | 1.35 | 5 | 1.14 | 1.14 | $ | 184,780 | 30% | |||||||||||||||||||
$ | 2.86 | 9.34 | 2.25 | 5 | 2.37 | 5 | (0.95 | ) | (1.07 | ) | $ | 424,528 | 17% | |||||||||||||||||
$ | 2.74 | (1.44 | ) | 2.25 | 5 | 2.43 | 5 | (0.36 | ) | (0.54 | ) | $ | 453,495 | 25% | ||||||||||||||||
$ | 3.09 | 11.53 | 2.25 | 5 | 2.41 | 5 | (0.40 | ) | (0.56 | ) | $ | 339,659 | 38% | |||||||||||||||||
$ | 2.94 | 21.99 | 2.25 | 5 | 2.42 | 5 | (0.03 | ) | (0.20 | ) | $ | 278,216 | 49% | |||||||||||||||||
$ | 2.41 | 22.33 | 2.25 | 6 | 2.48 | 6 | (0.16 | ) | (0.39 | ) | $ | 194,563 | 41% | |||||||||||||||||
$ | 2.24 | (10.49 | ) | 2.25 | 2.55 | (0.58 | ) | (0.88 | ) | $ | 151,569 | 108% | ||||||||||||||||||
$ | 2.87 | 5.90 | 1.91 | 5 | 1.91 | 5 | 1.86 | 1.86 | $ | 89,772 | 17% | |||||||||||||||||||
$ | 8.56 | 7.15 | 1.10 | 5 | 1.17 | 5 | 2.04 | 1.97 | $ | 212,082 | 12% | |||||||||||||||||||
$ | 8.84 | (6.61 | ) | 1.10 | 5 | 1.12 | 5 | 1.34 | 1.32 | $ | 244,056 | 39% | ||||||||||||||||||
$ | 12.69 | 11.78 | 1.11 | 5 11 | 1.12 | 5 11 | 1.38 | 1.37 | $ | 409,169 | 53% | |||||||||||||||||||
$ | 16.57 | 18.40 | 1.10 | 5 | 1.16 | 5 | 1.27 | 1.21 | $ | 786,910 | 47% | |||||||||||||||||||
$ | 14.31 | 22.50 | 1.10 | 5 | 1.15 | 5 | 1.42 | 1.37 | $ | 1,298,365 | 14% | |||||||||||||||||||
$ | 11.85 | (5.08 | ) | 1.10 | 1.11 | 1.24 | 1.23 | $ | 1,546,471 | 26% | ||||||||||||||||||||
$ | 8.55 | 7.11 | 0.97 | 5 | 1.95 | 5 | 2.02 | 1.03 | $ | 2,835 | 12% | |||||||||||||||||||
$ | 8.84 | (6.50 | ) | 0.98 | 5 | 1.44 | 5 | 1.40 | 0.94 | $ | 1,525 | 39% | ||||||||||||||||||
$ | 12.69 | 11.95 | 0.98 | 5 | 1.25 | 5 | 1.52 | 1.25 | $ | 8,068 | 53% | |||||||||||||||||||
$ | 16.57 | 18.54 | 0.98 | 5 | 1.35 | 5 | 1.37 | 1.00 | $ | 15,444 | 47% | |||||||||||||||||||
$ | 14.31 | 5.02 | 0.98 | 5 | 1.31 | 5 | 1.44 | 1.11 | $ | 15,511 | 14% | |||||||||||||||||||
$ | 11.99 | 7.64 | 1.79 | 6 7 | 1.79 | 6 7 | 0.15 | 0.15 | $ | 252,010 | 23% | |||||||||||||||||||
$ | 12.36 | (19.33 | ) | 1.61 | 7 | 1.61 | 7 | 0.12 | 0.12 | $ | 616,192 | 44% | ||||||||||||||||||
$ | 16.29 | 5.21 | 1.53 | 7 12 | 1.53 | 7 12 | 1.05 | 1.05 | $ | 1,696,707 | 47% | |||||||||||||||||||
$ | 15.82 | 16.09 | 1.51 | 7 | 1.51 | 7 | (0.22 | ) | (0.22 | ) | $ | 1,479,371 | 47% | |||||||||||||||||
$ | 13.66 | 15.27 | 1.51 | 7 | 1.51 | 7 | (0.20 | ) | (0.20 | ) | $ | 1,537,220 | 71% | |||||||||||||||||
$ | 11.85 | 0.98 | 1.63 | 7 | 1.63 | 7 | (0.44 | ) | (0.44 | ) | $ | 833,298 | 82% | |||||||||||||||||
$ | 12.02 | 7.87 | 1.47 | 6 7 | 1.51 | 6 7 | 0.35 | 0.31 | $ | 58,557 | 23% | |||||||||||||||||||
$ | 12.38 | (19.19 | ) | 1.47 | 7 | 1.47 | 7 | 0.25 | 0.25 | $ | 408,792 | 44% | ||||||||||||||||||
$ | 16.32 | 5.33 | 1.42 | 7 | 1.42 | 7 | 1.18 | 1.18 | $ | 1,022,568 | 47% | |||||||||||||||||||
$ | 15.83 | 14.99 | 1.39 | 7 | 1.40 | 7 | (0.16 | ) | (0.17 | ) | $ | 824,780 | 47% | |||||||||||||||||
$ | 6.23 | 0.54 | 1.92 | 5 | 1.92 | 5 | (1.27 | ) | (1.27 | ) | $ | 258,935 | 22% | |||||||||||||||||
$ | 7.21 | 2.45 | 1.90 | 5 | 1.90 | 5 | (0.85 | )16 | (0.85 | )16 | $ | 273,311 | 31% | |||||||||||||||||
$ | 7.36 | (0.81 | ) | 1.97 | 1.97 | (1.67 | ) | (1.67 | ) | $ | 293,815 | 26% | ||||||||||||||||||
$ | 7.42 | 29.95 | 2.13 | 5 | 2.13 | 5 | (1.28 | ) | (1.28 | ) | $ | 323,175 | 17% | |||||||||||||||||
$ | 5.71 | 29.77 | 2.14 | 5 | 2.14 | 5 | (1.50 | ) | (1.50 | ) | $ | 289,449 | 25% | |||||||||||||||||
$ | 4.40 | (0.90 | ) | 2.14 | 2.14 | (1.05 | ) | (1.05 | ) | $ | 253,415 | 30% | ||||||||||||||||||
$ | 2.59 | 1.11 | 1.95 | 5 | 2.03 | 5 | (0.98 | ) | (1.06 | ) | $ | 168,809 | 33% | |||||||||||||||||
$ | 2.87 | 9.99 | 1.96 | 6 | 2.02 | 6 | (0.55 | )17 | (0.61 | )17 | $ | 154,169 | 53% | |||||||||||||||||
$ | 3.02 | 3.26 | 2.03 | 5 | 2.09 | 5 | (1.31 | ) | (1.37 | ) | $ | 158,800 | 71% | |||||||||||||||||
$ | 3.45 | 33.92 | 2.25 | 5 | 2.25 | 5 | (0.92 | ) | (0.92 | ) | $ | 166,487 | 66% | |||||||||||||||||
$ | 2.85 | 27.23 | 2.25 | 5 | 2.31 | 5 | (1.27 | ) | (1.33 | ) | $ | 138,299 | 78% | |||||||||||||||||
$ | 2.24 | (5.88 | ) | 2.25 | 2.28 | (1.21 | ) | (1.24 | ) | $ | 142,795 | 94% |
115
Table of Contents
WASATCH FUNDS — Financial Highlights (continued) | ||
| ||
|
Income (Loss) from Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||
Net Asset Value Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Operations | Redemption Fees (See Note 2) | Dividends from Net Investment Income | Distributions from Net Realized Gains | Total Distributions | |||||||||||||||||||||||||
Small Cap Growth Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 45.97 | (0.15 | ) | 1.30 | 1.15 | — | 4 | — | (7.63 | ) | (7.63 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 50.25 | (0.40 | ) | 0.93 | 0.53 | — | 4 | — | (4.81 | ) | (4.81 | ) | |||||||||||||||||||
Year ended 9/30/14 | $ | 51.31 | (0.41 | ) | 1.03 | 0.62 | — | 4 | — | (1.68 | ) | (1.68 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 43.82 | (0.15 | ) | 10.53 | 10.38 | — | 4 | — | (2.89 | ) | (2.89 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 35.37 | (0.29 | ) | 10.40 | 10.11 | — | 4 | — | (1.66 | ) | (1.66 | ) | |||||||||||||||||||
Year ended 9/30/11 | $ | 34.24 | (0.13 | ) | 1.26 | 1.13 | — | 4 | — | — | — | |||||||||||||||||||||
Small Cap Growth Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 37.58 | (0.01 | ) | 1.93 | 1.92 | — | — | — | — | ||||||||||||||||||||||
Small Cap Value Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 5.86 | 0.01 | (0.06 | ) | (0.05 | ) | — | 4 | (0.03 | ) | — | (0.03 | ) | ||||||||||||||||||
Year ended 9/30/15 | $ | 5.69 | 0.05 | 18 | 0.12 | 0.17 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/14 | $ | 5.12 | (0.02 | ) | 0.59 | 0.57 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/13 | $ | 3.81 | (0.01 | ) | 1.32 | 1.31 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/12 | $ | 3.12 | (0.03 | ) | 0.72 | 0.69 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/11 | $ | 3.08 | (0.02 | ) | 0.06 | 0.04 | — | 4 | — | — | — | |||||||||||||||||||||
Small Cap Value Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 5.88 | 0.02 | (0.06 | ) | (0.04 | ) | — | 4 | (0.03 | ) | — | (0.03 | ) | ||||||||||||||||||
Year ended 9/30/15 | $ | 5.72 | 0.05 | 18 | 0.11 | 0.16 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/14 | $ | 5.14 | (0.03 | ) | 0.61 | 0.58 | — | — | — | — | ||||||||||||||||||||||
Year ended 9/30/13 | $ | 3.82 | (0.01 | ) | 1.33 | 1.32 | — | 4 | — | — | — | |||||||||||||||||||||
Period ended 9/30/128 | $ | 3.68 | (0.01 | ) | 0.15 | 0.14 | — | — | — | — | ||||||||||||||||||||||
Strategic Income Fund |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 10.49 | 0.33 | (0.11 | ) | 0.22 | — | 4 | (0.17 | ) | (0.35 | ) | (0.52 | ) | ||||||||||||||||||
Year ended 9/30/15 | $ | 12.63 | 0.30 | (1.38 | ) | (1.08 | ) | — | 4 | (0.44 | ) | (0.62 | ) | (1.06 | ) | |||||||||||||||||
Year ended 9/30/14 | $ | 11.08 | 0.32 | 1.74 | 2.06 | — | 4 | (0.35 | ) | (0.16 | ) | (0.51 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 9.30 | 0.33 | 1.78 | 2.11 | — | 4 | (0.33 | ) | — | (0.33 | ) | ||||||||||||||||||||
Year ended 9/30/12 | $ | 7.57 | 0.16 | 1.77 | 1.93 | — | 4 | (0.20 | ) | — | (0.20 | ) | ||||||||||||||||||||
Year ended 9/30/11 | $ | 7.51 | 0.25 | 0.06 | 0.31 | — | 4 | (0.25 | ) | — | (0.25 | ) | ||||||||||||||||||||
Ultra Growth Fund |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 18.06 | (0.11 | ) | 0.30 | 0.19 | — | 4 | — | (1.65 | ) | (1.65 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 23.67 | (0.26 | ) | 1.54 | 1.28 | — | 4 | (0.01 | ) | (6.88 | ) | (6.89 | ) | ||||||||||||||||||
Year ended 9/30/14 | $ | 24.57 | (0.06 | ) | 0.80 | 0.74 | — | 4 | — | (1.64 | ) | (1.64 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 22.83 | (0.15 | ) | 4.96 | 4.81 | — | 4 | — | (3.07 | ) | (3.07 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 20.11 | (0.08 | ) | 3.98 | 3.90 | — | 4 | — | (1.18 | ) | (1.18 | ) | |||||||||||||||||||
Year ended 9/30/11 | $ | 19.80 | (0.17 | ) | 0.48 | 0.31 | — | 4 | — | — | — | |||||||||||||||||||||
World Innovators Fund — Investor Class |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 20.17 | (0.08 | ) | 0.80 | 0.72 | — | 4 | — | (2.63 | ) | (2.63 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 22.62 | (0.21 | ) | 0.30 | 0.09 | — | 4 | — | (2.54 | ) | (2.54 | ) | |||||||||||||||||||
Year ended 9/30/14 | $ | 23.15 | (0.24 | ) | 0.91 | 0.67 | — | 4 | — | (1.20 | ) | (1.20 | ) | |||||||||||||||||||
Year ended 9/30/13 | $ | 18.55 | (0.12 | ) | 4.72 | 4.60 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/12 | $ | 14.71 | (0.12 | ) | 3.96 | 3.84 | — | 4 | — | — | — | |||||||||||||||||||||
Year ended 9/30/11 | $ | 13.65 | (0.13 | ) | 1.19 | 1.06 | — | 4 | — | — | — | |||||||||||||||||||||
World Innovators Fund — Institutional Class |
| |||||||||||||||||||||||||||||||
Period ended 3/31/16 (unaudited)20 | $ | 17.54 | (0.01 | ) | 0.74 | 0.73 | — | — | — | — | ||||||||||||||||||||||
Income Fund |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 10.18 | 0.10 | 0.03 | 0.13 | — | 4 | (0.10 | ) | — | (0.10 | ) | ||||||||||||||||||||
Year ended 9/30/15 | $ | 10.15 | 0.16 | 0.03 | 0.19 | — | 4 | (0.16 | ) | — | (0.16 | ) | ||||||||||||||||||||
Year ended 9/30/14 | $ | 10.13 | 0.17 | 0.02 | 0.19 | — | 4 | (0.17 | ) | — | (0.17 | ) | ||||||||||||||||||||
Year ended 9/30/13 | $ | 10.44 | 0.17 | (0.31 | ) | (0.14 | ) | — | (0.17 | ) | — | (0.17 | ) | |||||||||||||||||||
Year ended 9/30/12 | $ | 10.32 | 0.20 | 0.12 | 0.32 | — | 4 | (0.20 | ) | — | (0.20 | ) | ||||||||||||||||||||
Year ended 9/30/11 | $ | 10.34 | 0.25 | (0.02 | ) | 0.23 | — | 4 | (0.25 | ) | — | (0.25 | ) | |||||||||||||||||||
U.S. Treasury Fund |
| |||||||||||||||||||||||||||||||
Six Months ended 3/31/16 (unaudited) | $ | 18.42 | 0.19 | 1.04 | 1.23 | — | 4 | (0.19 | ) | (0.87 | ) | (1.06 | ) | |||||||||||||||||||
Year ended 9/30/15 | $ | 17.08 | 0.38 | 1.33 | 1.71 | 0.01 | (0.38 | ) | — | (0.38 | ) | |||||||||||||||||||||
Year ended 9/30/14 | $ | 15.33 | 0.45 | 1.75 | 2.20 | — | 4 | (0.45 | ) | — | (0.45 | ) | ||||||||||||||||||||
Year ended 9/30/13 | $ | 18.75 | 0.44 | (3.08 | ) | (2.64 | ) | 0.01 | (0.44 | ) | (0.35 | ) | (0.79 | ) | ||||||||||||||||||
Year ended 9/30/12 | $ | 18.75 | 0.42 | 0.77 | 1.19 | 0.01 | (0.42 | ) | (0.78 | ) | (1.20 | ) | ||||||||||||||||||||
Year ended 9/30/11 | $ | 17.17 | 0.52 | 2.63 | 3.15 | 0.02 | (0.52 | ) | (1.07 | ) | (1.59 | ) |
See Notes to Financial Highlights and Notes to Financial Statements.
116
Table of Contents
(for a share outstanding throughout each period) | ||
| ||
|
Ratios to Average Net Assets | Supplemental Data | |||||||||||||||||||||||||||||
Net Asset Value End of Period | Total Return (%)1 | Expenses Net of Waivers and Reimbursements (%)2 | Expenses Before Waivers and Reimbursements (%)2 | Net Investment Income Net of Waivers and Reimbursements (%)2 | Net Investment Income Before Waivers and Reimbursements (%)2 | Net Assets End of Period (000s) | Portfolio Turnover Rate1 3 | |||||||||||||||||||||||
$ | 39.49 | 1.51 | 1.29 | 5 | 1.29 | 5 | (0.79 | ) | (0.79 | ) | $ | 1,822,368 | 15% | |||||||||||||||||
$ | 45.97 | 0.39 | 1.22 | 5 | 1.22 | 5 | (0.75 | ) | (0.75 | ) | $ | 2,000,588 | 31% | |||||||||||||||||
$ | 50.25 | 1.09 | 1.21 | 5 | 1.21 | 5 | (0.75 | ) | (0.75 | ) | $ | 2,219,638 | 23% | |||||||||||||||||
$ | 51.31 | 25.34 | 1.23 | 5 | 1.23 | 5 | (0.42 | ) | (0.42 | ) | $ | 2,487,031 | 10% | |||||||||||||||||
$ | 43.82 | 29.41 | 1.24 | 5 | 1.24 | 5 | (0.73 | ) | (0.73 | ) | $ | 1,824,781 | 20% | |||||||||||||||||
$ | 35.37 | 3.30 | 1.23 | 1.23 | (0.32 | ) | (0.32 | ) | $ | 1,297,982 | 23% | |||||||||||||||||||
$ | 39.50 | 5.11 | 1.05 | 5 | 1.14 | 5 | (0.52 | ) | (0.60 | ) | $ | 53,164 | 15% | |||||||||||||||||
$ | 5.78 | (0.86 | ) | 1.23 | 5 | 1.23 | 5 | 0.41 | 0.41 | $ | 256,321 | 32% | ||||||||||||||||||
$ | 5.86 | 2.99 | 1.21 | 5 | 1.21 | 5 | 0.82 | 18 | 0.82 | 18 | $ | 257,655 | 57% | |||||||||||||||||
$ | 5.69 | 11.13 | 1.20 | 5 | 1.20 | 5 | (0.52 | ) | (0.52 | ) | $ | 265,521 | 50% | |||||||||||||||||
$ | 5.12 | 34.38 | 1.26 | 5 | 1.27 | 5 | (0.21 | ) | (0.22 | ) | $ | 201,581 | 40% | |||||||||||||||||
$ | 3.81 | 22.12 | 1.46 | 5 | 1.46 | 5 | (0.73 | ) | (0.73 | ) | $ | 166,330 | 55% | |||||||||||||||||
$ | 3.12 | 1.30 | 1.78 | 1.78 | (0.65 | ) | (0.65 | ) | $ | 169,401 | 46% | |||||||||||||||||||
$ | 5.81 | (0.80 | ) | 1.12 | 5 | 1.21 | 5 | 0.53 | 0.44 | $ | 19,812 | 32% | ||||||||||||||||||
$ | 5.88 | 2.97 | 1.15 | 5 | 1.20 | 5 | 0.92 | 18 | 0.87 | 18 | $ | 18,941 | 57% | |||||||||||||||||
$ | 5.72 | 11.28 | 1.15 | 5 | 1.44 | 5 | (0.49 | ) | (0.78 | ) | $ | 10,436 | 50% | |||||||||||||||||
$ | 5.14 | 34.55 | 1.15 | 5 | 1.46 | 5 | (0.11 | ) | (0.42 | ) | $ | 9,359 | 40% | |||||||||||||||||
$ | 3.82 | 3.80 | 1.15 | 5 | 1.66 | 5 | (0.42 | ) | (0.93 | ) | $ | 7,243 | 55% | |||||||||||||||||
$ | 10.19 | 2.05 | 0.95 | 5 | 1.04 | 5 | 5.66 | 5.57 | $ | 62,186 | 19% | |||||||||||||||||||
$ | 10.49 | (9.54 | ) | 0.95 | 5 | 0.95 | 5 | 2.51 | 2.51 | $ | 88,661 | 78% | ||||||||||||||||||
$ | 12.63 | 18.94 | 0.95 | 5 | 0.96 | 5 | 2.59 | 2.58 | $ | 94,958 | 69% | |||||||||||||||||||
$ | 11.08 | 23.01 | 0.95 | 5 | 1.06 | 5 | 3.16 | 3.05 | $ | 66,579 | 54% | |||||||||||||||||||
$ | 9.30 | 25.61 | 0.95 | 5 | 1.14 | 5 | 1.74 | 1.55 | $ | 44,635 | 57% | |||||||||||||||||||
$ | 7.57 | 3.94 | 0.95 | 1.21 | 2.99 | 2.73 | $ | 24,057 | 62% | |||||||||||||||||||||
$ | 16.60 | 0.22 | 1.34 | 5 | 1.34 | 5 | (1.09 | ) | (1.09 | ) | $ | 92,414 | 20% | |||||||||||||||||
$ | 18.06 | 4.02 | 1.31 | 5 | 1.31 | 5 | (1.06 | ) | (1.06 | ) | $ | 96,015 | 38% | |||||||||||||||||
$ | 23.67 | 2.66 | 1.26 | 5 | 1.26 | 5 | (1.00 | ) | (1.00 | ) | $ | 102,834 | 38% | |||||||||||||||||
$ | 24.57 | 24.52 | 1.29 | 5 | 1.29 | 5 | (0.64 | ) | (0.64 | ) | $ | 151,697 | 25% | |||||||||||||||||
$ | 22.83 | 20.13 | 1.32 | 5 | 1.32 | 5 | (0.35 | ) | (0.35 | ) | $ | 143,259 | 43% | |||||||||||||||||
$ | 20.11 | 1.57 | 1.42 | 1.42 | (0.51 | ) | (0.51 | ) | $ | 134,203 | 60% | |||||||||||||||||||
$ | 18.26 | 2.99 | 1.79 | 5 | 1.79 | 5 | (0.94 | ) | (0.94 | ) | $ | 185,983 | 50% | |||||||||||||||||
$ | 20.17 | 0.32 | 1.76 | 5 | 1.76 | 5 | (0.76 | ) | (0.76 | ) | $ | 186,272 | 100% | |||||||||||||||||
$ | 22.62 | 2.69 | 1.73 | 5 | 1.73 | 5 | (0.89 | ) | (0.89 | ) | $ | 253,311 | 111% | |||||||||||||||||
$ | 23.15 | 24.80 | 1.77 | 5 | 1.79 | 5 | (0.84 | ) | (0.86 | ) | $ | 266,911 | 84% | |||||||||||||||||
$ | 18.55 | 26.10 | 1.85 | 5 | 1.85 | 5 | (0.99 | ) | (0.99 | ) | $ | 167,934 | 66% | |||||||||||||||||
$ | 14.71 | 7.77 | 1.95 | 1.95 | (0.84 | ) | (0.84 | ) | $ | 72,493 | 85% | |||||||||||||||||||
$ | 18.27 | 4.16 | 1.55 | 24.96 | (0.60 | ) | (24.00 | ) | $ | 86 | 50% | |||||||||||||||||||
$ | 10.21 | 1.27 | 0.73 | 5 | 0.73 | 5 | 1.90 | 1.90 | $ | 107,349 | 18% | |||||||||||||||||||
$ | 10.18 | 1.87 | 0.72 | 5 | 0.72 | 5 | 1.57 | 1.57 | $ | 108,959 | 44% | |||||||||||||||||||
$ | 10.15 | 1.91 | 0.70 | 5 | 0.70 | 5 | 1.66 | 1.66 | $ | 116,752 | 13% | |||||||||||||||||||
$ | 10.13 | (1.34 | ) | 0.71 | 0.71 | 1.67 | 1.67 | $ | 130,285 | 35% | ||||||||||||||||||||
$ | 10.44 | 3.16 | 0.70 | 5 | 0.70 | 5 | 1.97 | 1.97 | $ | 139,186 | 48% | |||||||||||||||||||
$ | 10.32 | 2.26 | 0.71 | 0.71 | 2.42 | 2.42 | $ | 135,617 | 43% | |||||||||||||||||||||
$ | 18.59 | 7.16 | 0.69 | 5 | 0.69 | 5 | 2.13 | 2.13 | $ | 383,923 | 7% | |||||||||||||||||||
$ | 18.42 | 10.09 | 0.67 | 5 | 0.67 | 5 | 2.12 | 2.12 | $ | 327,861 | 131% | |||||||||||||||||||
$ | 17.08 | 14.54 | 0.70 | 5 | 0.70 | 5 | 2.77 | 2.77 | $ | 224,664 | 28% | |||||||||||||||||||
$ | 15.33 | (14.43 | ) | 0.71 | 5 | 0.71 | 5 | 2.46 | 2.46 | $ | 193,231 | 34% | ||||||||||||||||||
$ | 18.75 | 6.66 | 0.72 | 5 | 0.72 | 5 | 2.33 | 2.33 | $ | 271,495 | 13% | |||||||||||||||||||
$ | 18.75 | 22.06 | 0.75 | 0.76 | 3.44 | 3.43 | $ | 187,368 | 44% |
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WASATCH FUNDS — Notes to Financial Highlights | MARCH 31, 2016 (UNAUDITED) | |
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1 | Not annualized for periods less than one year. |
2 | Annualized for periods less than one year. |
3 | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
4 | Represents amounts less than $0.005 per share. |
5 | Includes interest expense of less than 0.005%. |
6 | Includes interest expenses of more than 0.005%. |
7 | Includes interest expense and dividend payments for securities sold short. The ratios excluding such expenses are listed below: |
Expenses Net of Waivers and Reimbursements2 | Expenses Before Waivers and Reimbursements2 | |||||||||
Long/Short Fund — Investor Class | ||||||||||
Six Months ended 3/31/16 (unaudited) | 1.47% | 1.47% | ||||||||
Year ended 9/30/15 | 1.30% | 1.30% | ||||||||
Year ended 9/30/14 | 1.27% | 1.27% | ||||||||
Year ended 9/30/13 | 1.28% | 1.28% | ||||||||
Year ended 9/30/12 | 1.27% | 1.27% | ||||||||
Year ended 9/30/11 | 1.30% | 1.30% | ||||||||
Long/Short Fund — Institutional Class | ||||||||||
Six Months ended 3/31/16 (unaudited) | 1.17% | 1.21% | ||||||||
Year ended 9/30/15 | 1.16% | 1.16% | ||||||||
Year ended 9/30/14 | 1.16% | 1.16% | ||||||||
Period ended 9/30/1314 | 1.17% | 1.18% |
8 | Institutional class inception date was January 31, 2012. |
9 | Fund inception date was January 31, 2012. |
10 | Fund inception date was April 26, 2011. |
11 | Includes extraordinary expenses of 0.01% (see Note 7). |
12 | Includes extraordinary expenses of less than 0.01% (see Note 7). |
13 | Fund inception date was December 13, 2012. |
14 | Institutional class inception date was December 13, 2012. |
15 | Investment Income per share reflects a large, non-recurring dividend which amounted to $0.17 and $0.08 per share for the Investor Class and Institutional Class, respectively. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been as follows: |
Investor Class | Institutional Class | |||||||||
Net Investment Income Net of Waivers and Reimbursements | (0.58 | )% | (0.59 | )% | ||||||
Net Investment Income Before Waivers and Reimbursements | (0.58 | )% | (0.60 | )% |
16 | Investment Income per share reflects a large, non-recurring dividend which amounted to $0.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.40)%. |
17 | Investment Income per share reflects a large, non-recurring dividend which amounted to $0.01. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.04)% for Net Investment Income Net of Waivers and Reimbursements and (1.10)% for Net Investment Income Before Waivers and Reimbursements. |
18 | Investment Income per share reflects a large, non-recurring dividend which amounted to $0.05 and $0.05 per share for the Investor Class and Institutional Class, respectively. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been as follows: |
Investor Class | Institutional Class | |||||||||
Net Investment Income Net of Waivers and Reimbursements | (0.00 | )%19 | 0.10% | |||||||
Net Investment Income Before Waivers and Reimbursements | (0.00 | )%19 | 0.05% |
19 | Amount is less than 0.005%. |
20 | Institutional class inception date was February 1, 2016. |
See Notes to Financial Statements.
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WASATCH FUNDS — Notes to Financial Statements | MARCH 31, 2016 (UNAUDITED) | |
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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 19 series or funds (each a “Fund” and collectively the “Funds”). The Core Growth Fund, Emerging India Fund, Emerging Markets Select Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, 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, Ultra Growth Fund, World Innovators 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. Each Fund maintains its own investment objective(s).
On November 9, 2011, the Trust re-designated the shares of the Funds into Investor Class shares effective January 31, 2012, and authorized and designated a new Institutional Class of shares in the Funds. Currently 13 funds offer Institutional Class shares: Core Growth Fund, Large Cap Value Fund and Small Cap Value Fund, which commenced operations on January 31, 2012, Emerging Markets Select Fund and Long/Short Fund, which commenced operations on December 13, 2012 and Emerging India Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, International Growth Fund, International Opportunities Fund, Small Cap Growth Fund and World Innovators Fund, which commenced operations on February 1, 2016. Each class of shares for each Fund has identical rights and privileges except with respect to purchase minimums, distribution and service charges, shareholder services, voting rights on matters affecting a single class of shares, and the exchange and conversion features. The Funds have entered into an investment advisory agreement with Wasatch Advisors, Inc. (the “Advisor” or “Wasatch”) as investment advisor.
The Core Growth, Emerging India, Emerging Markets Select, Emerging Markets Small Cap, Frontier Emerging Small Countries, Global Opportunities, International Growth, International Opportunities, Large Cap Value, Long/Short, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value, Strategic Income, Ultra Growth and World Innovators Funds are referred to herein as the “Equity Funds.”
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant policies related to investments of the Funds held at March 31, 2016. 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 13.
Foreign Currency Translations — Values of investments denominated in foreign currencies are converted into U.S. dollars using the current exchange rates each business day (generally 2:00 p.m. Eastern Time). Purchases and sales of investments and dividend income are translated into U.S. dollars using the current prevailing exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized gains or losses on securities is reflected as a component of such gains or losses. Transactions in foreign denominated assets may involve greater risks than domestic transactions.
Investment in Securities and Related Investment Income — Security transactions are accounted for on the trade date. Gains or losses on securities sold are determined on the identified cost basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date except that certain dividends from foreign securities may be recorded after the ex-dividend date based on when the Fund is informed of the dividend. Interest income and estimated expenses are accrued daily. Bond discount and premiums are amortized using the interest method. To the extent dividends received include return of capital or capital gain distributions; such distributions are recorded as a reduction to cost of the related security or as realized gain or loss.
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.
New Accounting Pronouncements — In May 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-07 entitled Fair Value Measurement (Topic 820) — Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) which is intended to address the diversity in practice of how investments measured at net asset value with redemption dates in the future (including periodic redemption dates) are
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categorized within the fair value hierarchy. The FASB guidance allows reporting entities to exclude investments measured at net asset value (NAV) per share under the existing practical expedient in ASC 820 from the fair value hierarchy. ASU 2015-07 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2015. At this time, management is evaluating the implications of ASU 2015-07 and its impact to financial statements.
Other — Income, expenses, and realized and unrealized gains or losses on investments are generally allocated to each class of shares based on its relative net assets, except that each class separately bears expenses related specifically to that class, such as certain shareholder servicing fees.
3. 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. Refer to Note 14 (Offsetting) for more information about the offsetting of assets and liabilities.
Short Sales — The Long/Short 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. Refer to Note 14 (Offsetting) for more information about the offsetting of assets and liabilities.
Participation Notes — The Frontier Emerging Small Countries and the Global Opportunities Funds may invest in Participation Notes (P-Notes). P-Notes are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow
a fund to gain exposure to common stocks in markets where direct investment is not allowed, such as Saudi Arabia. While the holder of a P-Note is entitled to receive from the bank or broker-dealer any dividends or other distributions paid on the underlying securities, the holder is not entitled to the same rights as an owner of the underlying securities, such as voting rights. Income received from P-Notes is recorded as dividend income in the Statement of Operations. P-Notes are considered general unsecured contractual obligations of the bank or broker-dealer. Risks associated with P-Notes include the possible failure of a counterparty (i.e., the issuing bank or broker-dealer) to perform in accordance with the terms of the agreement, inability to transfer or liquidate the notes, potential delays or an inability to redeem the notes before maturity under certain market conditions, and limited legal recourse against the issuer of the underlying common stock.
Unfunded Commitments — The Equity Funds may participate in unfunded loan commitments. Pursuant to the terms of a Convertible Note Purchase Agreement, the Micro Cap Value and Ultra Growth Funds held unfunded loan commitments at the end of the period. The Funds are obligated to fund these loan commitments at the borrower’s discretion. The Funds reserve against such contingent obligations by segregating cash and/or other liquid assets. As of March 31, 2016, the total amount of unfunded commitments for each Fund was as follows:
Unfunded Loan Commitment | Unrealized Appreciation (Depreciation) | |||||||
Acetylon Pharmaceuticals, Inc. Convertible Promissory Note (structured as a Line of Credit), 12.00%, 12/31/17 | $ | 500,000 | $ | — |
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 in the Schedule of Investments. In addition, a fund could be exposed to credit risk if a counterparty is unable or unwilling to meet the terms of the contracts or if the value of the currency changes unfavorably. In connection with these contracts, the Funds may segregate cash and/or securities in a sufficient amount as collateral in accordance with the terms of the respective contracts.
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MARCH 31, 2016 (UNAUDITED) | ||
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Options Transactions — The Equity Funds and the 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 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. Possible losses from uncovered written options may be unlimited. 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. Refer to Note 14 (Offsetting) for more information about the offsetting of assets and liabilities.
Options written activity during the six months ended March 31, 2016 was as follows:
Options Outstanding at 9/30/2015 | Written | Closed | Exercised | Expired | Options Outstanding at 3/31/2016 | |||||||||||||||||||
Large Cap Value Fund | ||||||||||||||||||||||||
Premium amount | $ | — | $ | 97,399 | $ | — | $ | (23,849 | ) | $ | (73,550 | ) | $ | — | ||||||||||
Number of contracts | — | 800 | — | (200 | ) | (600 | ) | — |
5. 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 six months ended March 31, 2016 are summarized below:
Core Growth Fund | Emerging India Fund | Emerging Markets Select Fund | Emerging Markets Small Cap Fund | Frontier Emerging Small Countries Fund | Global Opportunities Fund | |||||||||||||||||||
Purchases | $ | 163,503,436 | $ | 21,730,286 | $ | 13,211,774 | $ | 211,367,270 | $ | 229,638,694 | $ | 40,087,201 | ||||||||||||
Sales | 93,691,146 | 16,864,174 | 11,481,439 | 380,402,611 | 287,640,776 | 51,775,340 | ||||||||||||||||||
International Growth Fund | International Opportunities Fund | Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Value Fund | |||||||||||||||||||
Purchases | $ | 397,590,479 | $ | 106,227,345 | $ | 27,136,591 | $ | 149,019,967 | $ | 56,794,418 | $ | 57,220,886 | ||||||||||||
Sales | 453,329,466 | 80,461,655 | 75,146,609 | 856,071,037 | 59,397,471 | 44,987,232 | ||||||||||||||||||
Small Cap Growth Fund | Small Cap Value Fund | Strategic Income Fund | Ultra Growth Fund | World Innovators Fund | Income Fund | |||||||||||||||||||
Purchases | $ | 276,080,460 | $ | 82,966,410 | $ | 13,521,451 | $ | 19,194,101 | $ | 82,796,229 | $ | 14,549,412 | ||||||||||||
Sales | 362,007,588 | 84,177,440 | 43,938,927 | 22,879,784 | 108,002,805 | 11,267,101 |
Purchases and sales of U.S. government securities in the Income Fund were $4,334,192 and $7,670,308, respectively. Purchases and sales of U.S. government securities in the U.S. Treasury Fund were $56,433,207 and $24,341,258, respectively.
6. FEDERAL INCOME TAX INFORMATION
It is each Fund’s policy to comply with the requirements under Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income to shareholders. The Funds are no longer subject to examination by tax authorities for years prior to 2012. 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.
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As of March 31, 2016 the cost and unrealized appreciation (depreciation) of securities on a tax basis were as follows:
Core Growth Fund | Emerging India Fund | Emerging Markets Select Fund | Emerging Markets Small Cap Fund | Frontier Emerging Small Countries Fund | Global Opportunities Fund | International Growth Fund | ||||||||||||||||||||||
Cost | $ | 913,503,082 | $ | 53,093,093 | $ | 36,188,218 | $ | 683,400,972 | $ | 876,276,517 | $ | 132,900,295 | $ | 1,095,420,204 | ||||||||||||||
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Gross appreciation | $ | 342,858,190 | $ | 12,420,185 | $ | 4,648,872 | $ | 168,631,441 | $ | 127,255,100 | $ | 30,941,098 | $ | 360,827,178 | ||||||||||||||
Gross (depreciation) | (64,062,600 | ) | (1,906,092 | ) | (2,342,983 | ) | (50,054,304 | ) | (131,867,784 | ) | (8,901,728 | ) | (65,503,378 | ) | ||||||||||||||
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Net appreciation (depreciation) | $ | 278,795,590 | $ | 10,514,093 | $ | 2,305,889 | $ | 118,577,137 | $ | (4,612,684 | ) | $ | 22,039,370 | $ | 295,323,800 | |||||||||||||
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International Opportunities Fund | Large Cap Value Fund | Long/Short Fund | Micro Cap Fund | Micro Cap Value | Small Cap Growth Fund | Small Cap Value Fund | ||||||||||||||||||||||
Cost | $ | 440,881,423 | $ | 189,330,222 | $ | 302,266,073 | $ | 192,611,840 | $ | 138,909,704 | $ | 1,477,635,873 | $ | 233,759,320 | ||||||||||||||
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Gross appreciation | $ | 103,434,780 | $ | 30,441,817 | $ | 55,950,043 | $ | 79,980,727 | $ | 33,838,558 | $ | 551,129,331 | $ | 55,666,938 | ||||||||||||||
Gross (depreciation) | (27,697,614 | ) | (7,863,771 | ) | (122,947,505 | ) | (13,688,009 | ) | (4,319,586 | ) | (142,127,402 | ) | (12,171,014 | ) | ||||||||||||||
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Net appreciation (depreciation) | $ | 75,737,166 | $ | 22,578,046 | $ | (66,997,462 | ) | $ | 66,292,718 | $ | 29,518,972 | $ | 409,001,929 | $ | 43,495,924 | |||||||||||||
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Strategic Income Fund | Ultra Growth Fund | World Innovators Fund | Income Fund | U.S. Treasury Fund | ||||||||||||||||||||||||
Cost | $ | 58,362,490 | $ | 82,449,763 | $ | 170,561,776 | $ | 105,536,137 | $ | 363,737,467 | ||||||||||||||||||
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Gross appreciation | $ | 6,322,571 | $ | 20,893,609 | $ | 21,253,465 | $ | 1,557,434 | $ | 20,043,003 | ||||||||||||||||||
Gross (depreciation) | (4,768,122 | ) | (10,880,587 | ) | (6,799,944 | ) | (263,574 | ) | (1,861,997 | ) | ||||||||||||||||||
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Net appreciation (depreciation) | $ | 1,554,449 | $ | 10,013,022 | $ | 14,453,521 | $ | 1,293,860 | $ | 18,181,006 | ||||||||||||||||||
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The difference between book-basis and tax-basis unrealized gains are primarily attributable to the tax deferral of losses on wash sales.
The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year-end; accordingly, tax basis balances have not been determined as of the date of this report.
Dividends from net investment income and net realized gains, if any, are declared and paid at least annually for all Funds, except for dividends from net investment income in four funds. The Income Fund declares and pays dividends monthly. The Large Cap Value, 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 U.S. GAAP. The Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).
To the extent these book and tax differences are permanent in nature, such amounts are reclassified at the end of the fiscal year among additional paid-in capital, undistributed net investment income (loss), and undistributed net realized gain (loss) on investments, options and foreign currency translations.
Capital loss carryforwards are available through the date specified below to offset future realized net capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. To the extent future gains are offset by capital loss carryforwards, such gains will not be distributed.
Under the Regulated Investment Company Modernization Act of 2010, a Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Post-enactment losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
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MARCH 31, 2016 (UNAUDITED) | ||
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Capital loss carryforwards as of September 30, 2015 are as follows:
Non-expiring | ||||||||||||||||||||
Fund | 2016 | 2017 | 2018 | Short Term | Long Term | |||||||||||||||
Emerging Markets Select Fund | $ | — | $ | — | $ | — | $ | 6,196,368 | $ | 1,160,824 | ||||||||||
Emerging Markets Small Cap Fund | — | — | — | 21,052,031 | — | |||||||||||||||
Small Cap Value Fund | — | — | 20,161,340 | — | — |
The Funds have elected to defer losses incurred from November 1, 2014 through September 30, 2015 in accordance with federal income tax rules. These losses are treated as having arisen on the first day of the following fiscal year. The Funds have elected to defer losses as follows:
Fund | Post-October Capital Losses | Late-Year Ordinary Losses | ||||||
Core Growth Fund | $ | — | $ | 7,638,995 | ||||
Emerging India Fund | — | 240,970 | ||||||
Emerging Markets Select Fund | — | 92,771 | ||||||
Emerging Markets Small Cap Fund | — | 8,036,261 | ||||||
Frontier Emerging Small Countries Fund | 37,177,189 | — | ||||||
Global Opportunities Fund | — | 1,814,716 | ||||||
International Growth Fund | 17,079,113 | 4,652,195 | ||||||
International Opportunities Fund | — | 699,607 | ||||||
Large Cap Value Fund | — | 2,206 | ||||||
Micro Cap Fund | — | 765,970 | ||||||
Small Cap Growth Fund | — | 15,398,444 | ||||||
Small Cap Value Fund | 9,495,085 | — | ||||||
Ultra Growth Fund | — | 1,183,037 | ||||||
World Innovators Fund | — | 1,024,842 | ||||||
Income Fund | 9,326 | — |
During the tax year ended September 30, 2015, the Funds used capital loss carryforwards in the following amounts:
Fund | Amount Used | |||
Emerging India Fund | $ | 698,466 | ||
Small Cap Value Fund | 20,270,083 | |||
Income Fund | 348,245 | |||
U.S. Treasury Fund | 11,690,902 |
7. RELATED PARTY TRANSACTIONS
Investment Advisory Fees, Expense Limitations — As the Funds’ investment advisor, the Advisor receives a monthly fee calculated on average daily net assets. The Advisor has contractually agreed to waive its fees and/or reimburse certain Funds should a Fund’s operating expenses exceed a specified annual limitation through at least January 31, 2017. If operating expenses are less than the specified expense limit for the Fund, the Advisor shall be entitled to recoup the fees waived or reduced to the extent that the operating expenses and the amounts reimbursed do not exceed such expense limit for the Fund, under the period of the agreement (currently through January 31, 2017). 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, do not cause the Fund to exceed the expense limitation. All amounts not recovered at the end of the period expire on January 31, 2017. Ordinary operating expenses exclude any interest, dividend expense on short sales/interest expense, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Funds’ business. In late October 2013, it was discovered that the Long/Short Fund and Large Cap Value Fund had a 12b-1 receivable on the books which dated back to 2008 prior to the conversion of the 1st Source Funds to Wasatch Funds. It was determined that the amount should be written off as an extraordinary expense and posted to other expenses. The balance for the Large Cap Value Fund was $70,993 and the Long/Short Fund was $8,622. The impact of these write-offs is reflected in the
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Financial Highlights. Investment advisory fees and fees waived, if any, for the six months ended March 31, 2016 are disclosed in the Statements of Operations. Investment advisory fee and expense limitation annual rates are shown below.
Fund | Advisory Fee | Expense Limitation Investor Class | Expense Limitation Institutional Class | Contractual Expense Limitation/ Reimbursement Recoverable Expiration Date | Reimbursement Recoverable | |||||||||||||||
Core Growth Fund | 1.00% | 1.50% | 1.05% | 01/31/2017 | $ | 11,083 | ||||||||||||||
Emerging India Fund | 1.25% | 1 | 1.75% | 1.50% | 01/31/2017 | 41,197 | ||||||||||||||
Emerging Markets Select Fund | 1.00% | 2 | 1.50% | 1.20% | 01/31/2017 | 74,660 | ||||||||||||||
Emerging Markets Small Cap Fund | 1.65% | 3 | 1.95% | 1.80% | 01/31/2017 | 512,604 | ||||||||||||||
Frontier Emerging Small Countries Fund | 1.75% | 2.25% | 2.05% | 01/31/2017 | 710,976 | |||||||||||||||
Global Opportunities Fund | 1.25% | 1 | 1.75% | 1.35% | 01/31/2017 | 2,288 | ||||||||||||||
International Growth Fund | 1.25% | 1.75% | 1.35% | 01/31/2017 | — | |||||||||||||||
International Opportunities Fund | 1.75% | 4 | 2.25% | 1.95% | 01/31/2017 | 274,425 | ||||||||||||||
Large Cap Value Fund | 0.90% | 1.10% | 0.95% | 01/31/2017 | 83,505 | |||||||||||||||
Long/Short Fund | 1.10% | 1.60% | 1.15% | 01/31/2017 | 53,701 | |||||||||||||||
Micro Cap Fund | 1.75% | 1.95% | N/A | 01/31/2017 | — | |||||||||||||||
Micro Cap Value Fund | 1.75% | 1.95% | N/A | 01/31/2017 | 64,973 | |||||||||||||||
Small Cap Growth Fund | 1.00% | 1.50% | 1.05% | 01/31/2017 | 2,870 | |||||||||||||||
Small Cap Value Fund | 1.00% | 1.50% | 1.05% | 01/31/2017 | 7,959 | |||||||||||||||
Strategic Income Fund | 0.70% | 0.95% | N/A | 01/31/2017 | 33,799 | |||||||||||||||
Ultra Growth Fund | 1.00% | 1.50% | N/A | 01/31/2017 | — | |||||||||||||||
World Innovators Fund | 1.50% | 1.95% | 1.55% | 01/31/2017 | 2,235 | |||||||||||||||
Income Fund | 0.55% | N/A | N/A | N/A | N/A | |||||||||||||||
U.S. Treasury Fund | 0.50% | 0.75% | N/A | 01/31/2017 | — |
1 | Effective January 31, 2016, the management fee was reduced from 1.50% to 1.25%. |
2 | Effective January 31, 2016, the management fee was reduced from 1.25% to 1.00%. |
3 | Effective January 31, 2016, the management fee was reduced from 1.75% to 1.65%. |
4 | Effective January 31, 2016, the management fee was reduced from 1.95% to 1.75%. |
Affiliated Trades — Certain Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined in the procedures adopted by the Board of Trustees (the “Board”). The procedures have been designed to ensure that any purchase or sale of securities by the Funds from or to another fund (or funds) that are, or could be, considered an affiliate by virtue of having a common investment advisor (or affiliated investment advisors), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, each transaction is effected at the current market price, as that term is defined under the procedures. During the six months ended March 31, 2016, the Funds had no purchases or sales of securities pursuant to Rule 17a-7 of the 1940 Act.
Compensation — Officers serve in that capacity without compensation from the Trust. Beginning in the calendar year of 2016, the Funds’ method of compensating Trustees is to pay each Independent Trustee a retainer of $100,000 per year for services rendered and a fee of $12,000 for each Board of Trustees meeting attended in person or telephonically. Also, members of the Audit Committee receive a fee of $8,000 for each Audit Committee meeting attended in person or telephonically, and members of the Nominating Committee receive a fee of $8,000 for each Nominating Committee meeting attended in person or telephonically. In addition, each Independent Trustee receives a fee of $12,000 for attendance at an executive session held with respect to the contract renewal process for the Funds. In addition, the Chairman of the Board receives an additional fee of $25,000 a year as Chairman and $3,000 for attendance in person or telephonically at a Board meeting, the Chairman of the Audit Committee receives an additional $15,000 per year as Chairman and $1,200 for attendance in person or telephonically at an Audit Committee meeting, and the Chairman of the Nominating Committee receives an additional $15,000 per year as Chairman, and $1,200 for attendance in person or telephonically at a Nominating Committee meeting. Additionally, each Independent Trustee is entitled to reimbursement of expenses related to his or her duties as a Trustee of the Funds. The 2016 calendar year compensation is an increase of approximately 12 percent from the previous calendar year.
Institutional Class Legal Fees — As disclosed in the annual report dated September 30, 2011, the Board approved a multi-class plan pursuant to which the Board has established and designated two classes for each series known as Investor Class shares and Institutional Class shares. The Advisor paid the legal costs associated with the establishment and designation of the new share classes for existing funds.
Payments by Advisor — During the 2012 fiscal year, the Advisor discovered a trade allocation error involving several of the Wasatch Funds. In August 2012, the Advisor reimbursed the Global Opportunities Fund $1,167, the Micro Cap Fund $1,074, the Micro Cap Value Fund $1,282, the Small Cap Growth Fund $46,199, the Ultra Growth Fund $940 and the World Innovators Fund $437 as reimbursement for the error plus interest.
During the 2013 and 2014 fiscal years, the Advisor paid certain audit, legal and/or printing fees of the Core Growth, Emerging Markets Small Cap, Large Cap Value, Long/Short (Institutional Class), Small Cap Growth, Small Cap Value, Strategic Income and World Innovators Funds. The Advisor does not intend to be reimbursed for these amounts.
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MARCH 31, 2016 (UNAUDITED) | ||
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On February 20, 2013, the Advisor discovered a trade error involving the Frontier Emerging Small Countries Fund. The Advisor reimbursed the Fund $4,421. On October 16, 2014, the Advisor discovered a trade error involving the Ultra Growth Fund. The Advisor reimbursed the Fund $12,267.
The impact of the payments detailed above is reflected in the net expense ratios in the Financial Highlights.
10% Shareholders — As of March 31, 2016, the Funds had individual shareholder accounts and/or omnibus shareholder accounts (comprised of a group of individual shareholders), which individually amounted to more than 10% of the total shares outstanding of the Fund as detailed below:
Fund | Number of Accounts | Percent of Shares Outstanding | ||||||
Core Growth Fund | 2 | 54.21 | % | |||||
Emerging India Fund | 2 | 58.45 | % | |||||
Emerging Markets Select Fund | 2 | 82.55 | % | |||||
Emerging Markets Small Cap Fund | 2 | 53.92 | % | |||||
Frontier Emerging Small Countries Fund | 2 | 78.93 | % | |||||
Global Opportunities Fund | 2 | 60.74 | % | |||||
International Growth Fund | 2 | 52.29 | % | |||||
International Opportunities Fund | 2 | 74.64 | % | |||||
Large Cap Value Fund | 2 | 73.72 | % | |||||
Long/Short Fund | 2 | 64.27 | % | |||||
Micro Cap Fund | 2 | 26.29 | % | |||||
Micro Cap Value Fund | 2 | 50.97 | % | |||||
Small Cap Growth Fund | 2 | 53.21 | % | |||||
Small Cap Value Fund | 2 | 40.85 | % | |||||
Strategic Income Fund | 3 | 53.51 | % | |||||
Ultra Growth Fund | 2 | 28.43 | % | |||||
World Innovators Fund | 2 | 36.82 | % | |||||
Income Fund | 1 | 85.45 | % | |||||
U.S. Treasury Fund | 3 | 61.45 | % |
Affiliated Interests — As of March 31, 2016, Wasatch Advisors, Inc. and its affiliates, and the retirement plans of Wasatch Advisors, Inc. and its affiliates, held shares of the Funds which may be redeemed at any time as detailed below:
Number of Accounts* | Percent of Shares Outstanding | |||||||
Core Growth Fund | 20 | 0.88 | % | |||||
Emerging India Fund | 21 | 14.53 | % | |||||
Emerging Markets Select Fund | 15 | 17.01 | % | |||||
Emerging Markets Small Cap Fund | 16 | 0.98 | % | |||||
Frontier Emerging Small Countries Fund | 22 | 0.69 | % | |||||
Global Opportunities Fund | 21 | 2.92 | % | |||||
International Growth Fund | 14 | 0.70 | % | |||||
International Opportunities Fund | 24 | 2.00 | % | |||||
Large Cap Value Fund | 11 | 1.47 | % | |||||
Long/Short Fund | 9 | 1.04 | % | |||||
Micro Cap Fund | 11 | 0.93 | % | |||||
Micro Cap Value Fund | 13 | 2.15 | % | |||||
Small Cap Growth Fund | 22 | 2.04 | % | |||||
Small Cap Value Fund | 11 | 1.76 | % | |||||
Strategic Income Fund | 7 | 14.49 | % | |||||
Ultra Growth Fund | 7 | 2.79 | % | |||||
World Innovators Fund | 11 | 1.93 | % | |||||
Income Fund | 3 | 0.01 | % | |||||
U.S. Treasury Fund | 8 | 0.63 | % |
* | Multiple accounts with the same beneficial owner are treated as one account. |
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8. 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 six months ended March 31, 2016 with an “affiliated company” as so defined:
Share Activity | Dividends Credited to Income for the six months ended 3/31/2016 | Loss Realized on Sale of Shares for the six months ended 3/31/2016 | ||||||||||||||||||||||
Balance 9/30/2015 | Purchases/ Additions | Sales/ Reductions | Balance 3/31/2016 | |||||||||||||||||||||
Frontier Emerging Small Countries Fund | ||||||||||||||||||||||||
Akzo Nobel Pakistan Ltd. | 3,698,992 | — | 167,100 | 3,531,892 | $ | — | $ | (361,197 | ) | |||||||||||||||
Chevron Lubricants Lanka plc | 6,300,185 | — | 166,937 | 6,133,248 | 473,585 | (123,017 | ) | |||||||||||||||||
Tokyo Cement Co. Lanka plc | 11,548,669 | — | 81,038 | 11,467,631 | — | (7,709 | ) | |||||||||||||||||
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Long/Short Fund | ||||||||||||||||||||||||
Bill Barrett Corp.* | 5,653,316 | — | 4,009,688 | 1,643,628 | $ | — | $ | (39,616,408 | ) | |||||||||||||||
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Small Cap Growth Fund | ||||||||||||||||||||||||
Argos Therapeutics, Inc.* | 1,162,454 | — | — | 1,162,454 | $ | — | $ | — | ||||||||||||||||
Blue Nile, Inc. | 828,553 | — | — | 828,553 | 579,987 | — | ||||||||||||||||||
Chefs’ Warehouse, Inc. (The) | 1,897,093 | — | — | 1,897,093 | — | — | ||||||||||||||||||
Papa Murphy’s Holdings, Inc. | 883,565 | 159,203 | — | 1,042,768 | — | — |
* | This security was deemed to no longer meet the criteria of an affiliated company at the reporting date. |
9. RESTRICTED SECURITIES
The Funds may own investments that were purchased through private placement transactions or under Rule 144A of the Securities Act of 1933 (the “Securities Act”) and cannot be sold without prior registration under the Securities Act or may be limited due to certain restrictions. These securities are generally deemed to be illiquid and are valued at fair value as determined by a designated Pricing Committee of the Advisor (“Pricing Committee”), comprised of personnel of the Advisor, with oversight by the Board of Trustees and in accordance with Board-approved Pricing Policies and Procedures. If and when such securities are registered, the costs of registering such securities are paid by the issuer. At March 31, 2016, the Funds held the following restricted securities:
Security Type | Acquisition Date | Cost | Fair Value | Value as Percent of Net Assets | ||||||||||||
Core Growth Fund | ||||||||||||||||
DocuSign, Inc., Series F Pfd. | Preferred Stock | 4/30/15 | $ | 4,000,004 | $ | 3,496,555 | 0.29 | % | ||||||||
$ | 4,000,004 | $ | 3,496,555 | 0.29 | % | |||||||||||
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Micro Cap Fund | ||||||||||||||||
Argos Therapeutics, Inc. | PIPE | 3/14/16 | $ | 80,250 | $ | 80,640 | 0.03 | % | ||||||||
Argos Therapeutics, Inc. | Warrant | 3/14/16 | 1,407 | 14,648 | 0.01 | % | ||||||||||
$ | 81,657 | $ | 95,288 | 0.04 | % | |||||||||||
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Micro Cap Value Fund | ||||||||||||||||
Acetylon Pharmaceuticals, Inc., Series B Pfd. | Preferred Stock | 2/3/11 - 5/25/12 | $ | 499,999 | $ | 1,801,050 | 1.07 | % | ||||||||
Synergetics USA, Inc. | Right | 10/14/15 | 71,250 | 37,500 | 0.02 | % | ||||||||||
Vertex Energy, Inc. | Warrant | 6/22/15 | 95,000 | 47,500 | 0.03 | % | ||||||||||
Vertex Energy, Inc., Series B Pfd. | Convertible Preferred Stock | 6/22/15 - 1/22/16 | 1,503,428 | 1,450,187 | 0.86 | % | ||||||||||
$ | 2,169,677 | $ | 3,336,237 | 1.98 | % | |||||||||||
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MARCH 31, 2016 (UNAUDITED) | ||
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Security Type | Acquisition Date | Cost | Fair Value | Value as Percent of Net Assets | ||||||||||||
Small Cap Growth Fund | ||||||||||||||||
Argos Therapeutics, Inc. | PIPE | 3/14/16 | $ | 280,608 | $ | 281,971 | 0.01 | % | ||||||||
Argos Therapeutics, Inc. | Warrant | 3/14/16 | 4,917 | 51,217 | 0.00 | % | ||||||||||
DataStax, Inc., Series E Pfd. | Preferred Stock | 8/12/14 | 8,000,002 | 6,353,277 | 0.34 | % | ||||||||||
DocuSign, Inc., Series B Pfd. | Preferred Stock | 3/3/14 | 437,257 | 555,710 | 0.03 | % | ||||||||||
DocuSign, Inc., Series B-1 Pfd. | Preferred Stock | 3/3/14 | 130,983 | 166,466 | 0.01 | % | ||||||||||
DocuSign, Inc., Series D Pfd. | Preferred Stock | 3/3/14 | 313,930 | 398,974 | 0.02 | % | ||||||||||
DocuSign, Inc., Series E Pfd. | Preferred Stock | 3/3/14 | 8,117,819 | 10,316,957 | 0.55 | % | ||||||||||
DocuSign, Inc., Series F Pfd. | Preferred Stock | 4/30/15 | 2,999,984 | 2,622,400 | 0.14 | % | ||||||||||
Drilling Info Holdings, Inc., Series B Pfd. | Preferred Stock | 9/5/13 | 15,350,001 | 10,998,865 | 0.59 | % | ||||||||||
ForeScout Technologies, Inc., Series G Pfd. | Preferred Stock | 11/25/15 | 6,000,003 | 6,000,003 | 0.32 | % | ||||||||||
Greenspring Global Partners II-B, L.P. | LP Interest | 10/10/03 - 7/16/15 | 2,951,119 | 2,951,119 | 0.16 | % | ||||||||||
Greenspring Global Partners III-B, L.P. | LP Interest | 3/16/06 - 11/17/15 | 1,455,332 | 1,422,675 | 0.07 | % | ||||||||||
Nanosys, Inc., Series D Pfd. | Preferred Stock | 11/8/05 | 2,000,000 | 103,051 | 0.01 | % | ||||||||||
Nanosys, Inc., Series E Pfd. | Preferred Stock | 8/13/10 | 184,939 | 98,704 | 0.01 | % | ||||||||||
$ | 48,226,894 | $ | 42,321,389 | 2.26 | % | |||||||||||
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Strategic Income Fund | ||||||||||||||||
Redcorp Ventures Ltd. Series D | Corporate Bond | 7/5/07 | $ | 151,993 | $ | 380 | 0.00 | % | ||||||||
Star Asia Financial Ltd. | Common Stock | 2/22/07 - 5/11/15 | 572,597 | 497,999 | 0.80 | % | ||||||||||
$ | 724,590 | $ | 498,379 | 0.80 | % | |||||||||||
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Ultra Growth Fund | ||||||||||||||||
Argos Therapeutics, Inc. | PIPE | 3/14/16 | $ | 39,055 | $ | 39,245 | 0.04 | % | ||||||||
Argos Therapeutics, Inc. | Warrant | 3/14/16 | 684 | 7,128 | 0.01 | % | ||||||||||
Data Sciences International, Inc., Series B Pfd. | Preferred Stock | 1/20/06 | 475,001 | 369,473 | 0.40 | % | ||||||||||
Drilling Info Holdings, Inc., Series B Pfd. | Preferred Stock | 9/5/13 | 1,150,001 | 824,020 | 0.89 | % | ||||||||||
Greenspring Global Partners II-B, L.P. | LP Interest | 10/10/03 - 7/16/15 | 2,655,997 | 2,655,997 | 2.87 | % | ||||||||||
Greenspring Global Partners III-B, L.P. | LP Interest | 3/16/06 - 11/17/15 | 1,455,332 | 1,422,675 | 1.54 | % | ||||||||||
Nanosys, Inc., Series D Pfd. | Preferred Stock | 11/8/05 | 500,001 | 25,763 | 0.03 | % | ||||||||||
Nanosys, Inc., Series E Pfd. | Preferred Stock | 8/13/10 | 46,235 | 24,676 | 0.03 | % | ||||||||||
Xtera Communications, Inc. | Common Stock | 9/3/03 | 99,065 | 9,440 | 0.01 | % | ||||||||||
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$ | 6,421,371 | $ | 5,378,417 | 5.82 | % | |||||||||||
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World Innovators Fund | ||||||||||||||||
Greenspring Global Partners II-B, L.P. | LP Interest | 10/10/03 - 7/16/15 | $ | 295,112 | $ | 295,112 | 0.16 | % | ||||||||
Xtera Communications, Inc. | Common Stock | 9/3/03 | 7,076 | 674 | 0.00 | % | ||||||||||
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$ | 302,188 | $ | 295,786 | 0.16 | % | |||||||||||
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10. PURCHASE COMMITMENTS
In September 2003, the Small Cap Growth, Ultra Growth and World Innovators 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, 2016 were $50,000, $45,000 and $5,000, respectively.
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, 2016 were $45,000 per Fund.
Securities held by the Funds have been designated to meet these purchase commitments as indicated in the Schedules of Investments.
11. LINEOF CREDIT
Effective May 22, 2015, the Funds in the Trust renewed and amended agreements for two open lines of credit totaling $300,000,000, one of which is $200,000,000 uncommitted, and the other of which is $100,000,000 committed, with State Street Bank and Trust Company (together, the “Line”). The agreements, as amended, have no change in the total amounts available on the Line, an increase of $100,000,000 uncommitted and a decrease of $100,000,000 committed. The Funds incur commitment fees on the undrawn portion of the committed part of the Line, and interest expense to the extent of amounts drawn (borrowed) under the entire Line. Interest is based on the higher of (a) the federal funds rate in effect on the date of borrowing, plus a margin, or (b) the overnight London Interbank Offered Rate (LIBOR) in effect on the date of borrowing, plus a margin. Commitment fees are pro-rated among the Funds based upon relative average net assets. Interest expense is charged directly to a Fund based upon actual amounts borrowed by that Fund.
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For the six months ended March 31, 2016, the following Funds had borrowings:
Average Daily Borrowings | Number of Days Outstanding | Interest Expense | Weighted Average Annualized Interest Rate | Balance at 3/31/2016 | ||||||||||||||||
Emerging India Fund | $ | 822,879 | 22 | $ | 836 | 1.66 | % | $ | — | |||||||||||
Emerging Markets Select Fund | 156,671 | 18 | 114 | 1.46 | % | — | ||||||||||||||
Emerging Markets Small Cap Fund | 7,543,397 | 55 | 18,798 | 1.63 | % | — | ||||||||||||||
Frontier Emerging Small Countries Fund | 5,963,999 | 7 | 1,955 | 1.69 | % | — | ||||||||||||||
Global Opportunities Fund | 2,753,686 | 21 | 2,628 | 1.64 | % | — | ||||||||||||||
International Growth Fund | 1,782,118 | 7 | 580 | 1.67 | % | — | ||||||||||||||
International Opportunities Fund | 3,481,926 | 1 | 164 | 1.69 | % | — | ||||||||||||||
Large Cap Value Fund | 639,160 | 7 | 208 | 1.67 | % | — | ||||||||||||||
Long/Short Fund | 16,606,483 | 6 | 4,650 | 1.68 | % | — | ||||||||||||||
Small Cap Growth Fund | 11,689,736 | 4 | 2,192 | 1.69 | % | — | ||||||||||||||
Ultra Growth Fund | 736,279 | 6 | 206 | 1.68 | % | — |
12. PRINCIPAL RISKS
Market and Credit Risk — In the normal course of business the Funds trade financial instruments and enter into financial transactions where risk of loss exists due to changes in the market (market risk) or the failure of the other party to a transaction to perform (credit risk). Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss could exceed the value of the financial assets recorded in the financial statements. Financial assets, which potentially expose the Funds to credit risk, consist principally of cash due from counterparties and investments. The extent of the Funds’ exposure to credit and counterparty risks with respect to these financial assets approximates their carrying value as recorded in the Funds’ Statements of Assets and Liabilities.
Inflation Risk — Inflation risk is the possibility that inflation will reduce the purchasing power of a currency, and subsequently reduce the value of a security or asset, and may result in rising interest rates. Inflation is the overall upward price movement of goods and services in an economy that causes the value of a currency to decline.
Interest Rate Risk — Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. A rise in interest rates typically causes a fall in values. Interest rate risk should be modest for shorter-term securities, moderate for intermediate-term securities and high for longer-term securities. Generally, an increase in the average maturity of a fund will make it more sensitive to interest rate risk. The interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
Foreign Currency Risk — If a fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the U.S. dollar. This also includes the risk associated with higher transaction costs, delayed settlements, currency controls and adverse economic developments related to foreign investments.
Region Risk — The Funds, except the U.S. Treasury Fund, invest in equity and fixed income securities of non-U.S. issuers. Because certain foreign markets are illiquid, market prices may not necessarily represent realizable value. Although the Funds maintain diversified investment portfolios, political or economic developments within a particular country or region may have an adverse effect on the ability of domiciled issuers to meet their obligations. These risks are exaggerated for securities of issuers tied economically to emerging and frontier market countries. Additionally, political or economic developments may have an adverse effect on the liquidity and volatility of portfolio securities and currency holdings.
Liquidity Risk — The trading market for a particular security may be less liquid than it appears and the market prices may not represent realizable value. This may be likely when a fund has a proportionately large investment in securities with small market capitalizations or securities in foreign markets that trade infrequently. Reduced liquidity will have an adverse impact on a fund’s ability to sell such securities quickly at the currently marked price if necessary to meet redemptions.
Shareholder Concentration Risk — A significant portion of the net assets of the Frontier Emerging Small Countries Fund and International Opportunities Fund are owned by a group of shareholders advised by a common investment advisor. If these shareholders simultaneously redeem 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 both the Frontier Emerging Small Countries Fund and the International Opportunities Fund should the operating expenses exceed 2.25% for the Investor Class and 2.05% and 1.95%, respectively, for the Institutional Class through at least January 31, 2017. The Emerging Markets Select Fund also has a significant portion of net assets concentrated in relatively few related accounts. The Advisor has contractually agreed to waive its fees and/or reimburse the Emerging Markets Select Fund should the operating expenses exceed 1.50% for the Investor Class and 1.20% for the Institutional Class through at least January 31, 2017.
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13. FAIR VALUE MEASUREMENTSAND INVESTMENTS
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds use various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP established a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
• | Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The inputs may include quoted prices for the identical investment on an inactive market, prices for similar investments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
• | Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether a security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
Equity Securities (common and preferred stock) — Securities are valued as of the close of the New York Stock Exchange (“NYSE”) (generally 4:00 p.m. Eastern Time) on the valuation date. Equity securities and listed warrants are valued using a commercial pricing service at the last quoted sales price taken from the primary market in which each security trades and, with respect to equity securities traded on the National Association of Securities Dealer Automated Quotation system (“NASDAQ”), such securities are valued using the NASDAQ Official Closing Price (“NOCP”) or last sales price if no NOCP is available. If there are no sales on the primary exchange or market on a day, then the security shall be valued at the mean of the last bid and ask price on the primary exchange or market as provided by a pricing service. If the mean cannot be calculated or there is no trade activity on a day, then the security shall be valued at the previous trading day’s price as provided by a pricing service. In some instances, particularly on foreign exchanges, an official close or evaluated price may be used if the pricing service is unable to provide the last trade or most recent mean price. To the extent that these securities are actively
traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Additionally, a fund’s investments are valued at fair value by the Pricing Committee if the Advisor determines that an event impacting the value of an investment occurred between the closing time of a security’s primary market or exchange (for example, a foreign exchange or market) and the time the fund’s share price is calculated. Significant events include, but are not limited to the following: significant fluctuations in domestic markets, foreign markets or foreign currencies; occurrences not directly tied to the securities markets such as natural disasters, armed conflicts or significant governmental actions; and major announcements affecting a single issuer or an entire market or market sector. In responding to a significant event, the Pricing Committee determines the fair value of affected securities by considering factors including, but not limited to: index options and futures traded subsequent to the close; American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) or other related receipts; currency spot or forward markets that trade after pricing of the foreign exchange; other derivative securities traded after the close such as Standard & Poor’s Depositary Receipts (“SPDRs”) and other exchange-traded funds (“ETFs”); and alternative market quotes on the affected securities. When applicable, the Funds use a systematic fair valuation model provided by an independent third party to assist in adjusting the valuation of foreign securities. When a Fund uses this fair value pricing method, the values assigned to the Fund’s foreign securities may not be the quoted or published prices of the investments on their primary markets or exchanges, and the securities are categorized in Level 2 of the fair value hierarchy. These valuation procedures apply equally to long or short equity positions in a fund.
Participation Notes — Investments are valued at the market price of the underlying security. Counterparty risk is regularly reviewed and considered for valuation.
Corporate Debt Securities — Investments are valued at current market value by a pricing service, or by using the last sale or bid price based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Although most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as Level 3.
Short-Term Notes — Investments maturing in 60 days or less at the time of purchase, are generally valued at amortized cost, unless it is determined that the amortized cost method would not represent fair value, in which case the securities are marked-to-market. To the extent the inputs are observable and timely, the values would be categorized in Level 2 of the fair value hierarchy.
Asset-Backed Securities — Investments are priced using the closing bid as supplied by a pricing service based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids,
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| ||
|
offers and reference data including market research publications, new issue data, monthly payment information and collateral performance. Although most asset-backed securities are categorized in Level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as Level 3.
U.S. Government Issuers — Investments are priced using the closing bid as supplied by a pricing service based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Although most U.S. government bonds are categorized in Level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as Level 3.
Derivative Instruments — Listed derivatives that are actively traded are valued based on quoted prices from the exchange and 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 mean of the last bid price and ask price on the primary exchange or market as provided by a pricing service. Forward foreign currency contracts are valued at the market rate provided by the pricing service.
Restricted Securities — If market quotations are not readily available for the Funds’ investments in securities
such as restricted securities, private placements, securities for which trading has been halted or other illiquid securities, these investments are valued at fair value in accordance with Board-approved Pricing Policies and Procedures by the Pricing Committee with oversight by the Board of Trustees. Fair value is defined as the price that would be received upon the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under current market conditions. For each applicable investment that is fair valued, the Pricing Committee considers, to the extent applicable, various factors including, but not limited to, the financial condition of the company or limited partnership, operating results, prices paid in follow-on rounds, comparable companies in the public market, the nature and duration of the restrictions for holding the securities, a stated net asset value (NAV) for the partnership, if applicable, and other relevant factors. Depending on the relative significance of valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on days the NYSE is closed, which could result in differences between the value of a fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the fund for financial reporting purposes.
The following is a summary of the fair valuations according to the inputs used as of March 31, 2016 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 3/31/2016 | |||||||||||||
Core Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 1,114,567,861 | $ | — | $ | — | $ | 1,114,567,861 | ||||||||||
Preferred Stocks | — | — | 3,496,555 | 3,496,555 | ||||||||||||||
Short-Term Investments | — | 74,234,256 | — | 74,234,256 | ||||||||||||||
|
| |||||||||||||||||
$ | 1,114,567,861 | $ | 74,234,256 | $ | 3,496,555 | $ | 1,192,298,672 | |||||||||||
|
| |||||||||||||||||
Emerging India Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Industrial Machinery | $ | 1,017,919 | $ | — | $ | 37,883 | $ | 1,055,802 | |||||||||
Life & Health Insurance | 925,011 | — | 277,802 | 1,202,813 | ||||||||||||||
Other | 59,931,441 | — | — | 59,931,441 | ||||||||||||||
Corporate Bonds | — | 16,247 | — | 16,247 | ||||||||||||||
Short-Term Investments | — | 1,400,883 | — | 1,400,883 | ||||||||||||||
|
| |||||||||||||||||
$ | 61,874,371 | $ | 1,417,130 | $ | 315,685 | $ | 63,607,186 | |||||||||||
|
| |||||||||||||||||
Emerging Markets Select Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Health Care Facilities | $ | 491,743 | $ | 1,392,118 | $ | — | $ | 1,883,861 | |||||||||
Other | 35,759,621 | — | — | 35,759,621 | ||||||||||||||
Short-Term Investments | — | 850,625 | — | 850,625 | ||||||||||||||
|
| |||||||||||||||||
$ | 36,251,364 | $ | 2,242,743 | $ | — | $ | 38,494,107 | |||||||||||
|
|
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|
Fund | Category | Quoted Prices in Active Markets for Identical Investments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Value at 3/31/2016 | |||||||||||||
Emerging Markets Small Cap Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Consumer Finance | $ | 64,744,202 | $ | 11,865,007 | $ | — | $ | 76,609,209 | |||||||||
Electronic Manufacturing Services | — | 5,464,956 | — | 5,464,956 | ||||||||||||||
Home Improvement Retail | — | 6,479,975 | — | 6,479,975 | ||||||||||||||
Hotels, Resorts & Cruise Lines | — | 13,892,958 | — | 13,892,958 | ||||||||||||||
Industrial Machinery | — | — | 210,426 | 210,426 | ||||||||||||||
Life & Health Insurance | 4,747,522 | — | 1,543,067 | 6,290,589 | ||||||||||||||
Pharmaceuticals | 29,337,680 | — | 16,783 | 29,354,463 | ||||||||||||||
Reinsurance | — | 3,522,365 | — | 3,522,365 | ||||||||||||||
Other | 658,992,425 | — | — | 658,992,425 | ||||||||||||||
Warrants | 311,784 | — | — | 311,784 | ||||||||||||||
Short-Term Investments | — | 848,959 | — | 848,959 | ||||||||||||||
|
| |||||||||||||||||
$ | 758,133,613 | $ | 42,074,220 | $ | 1,770,276 | $ | 801,978,109 | |||||||||||
|
| |||||||||||||||||
Frontier Emerging Small Countries Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Airport Services | $ | — | $ | 9,960,847 | $ | — | $ | 9,960,847 | |||||||||
Construction Materials | 50,169,597 | 4,949,476 | — | 55,119,073 | ||||||||||||||
Electronic Components | — | 609,796 | — | 609,796 | ||||||||||||||
Health Care Facilities | 14,726,297 | 6,869,639 | — | 21,595,936 | ||||||||||||||
Hotels, Resorts & Cruise Lines | — | 6,566,665 | — | 6,566,665 | ||||||||||||||
Other | 770,256,770 | — | — | 770,256,770 | ||||||||||||||
Short-Term Investments | — | 7,554,746 | — | 7,554,746 | ||||||||||||||
|
| |||||||||||||||||
$ | 835,152,664 | $ | 36,511,169 | $ | — | $ | 871,663,833 | |||||||||||
|
| |||||||||||||||||
Global Opportunities Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Consumer Finance | $ | 9,227,794 | $ | 2,195,907 | $ | — | $ | 11,423,701 | |||||||||
Industrial Machinery | 700,487 | — | 22,032 | 722,519 | ||||||||||||||
Life & Health Insurance | 537,974 | — | 161,565 | 699,539 | ||||||||||||||
Other | 138,391,251 | — | — | 138,391,251 | ||||||||||||||
Warrants | 29,992 | — | — | 29,992 | ||||||||||||||
Short-Term Investments | — | 3,672,663 | — | 3,672,663 | ||||||||||||||
|
| |||||||||||||||||
$ | 148,887,498 | $ | 5,868,570 | $ | 183,597 | $ | 154,939,665 | |||||||||||
|
| |||||||||||||||||
International Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Home Improvement Retail | $ | — | $ | 4,021,437 | $ | — | $ | 4,021,437 | |||||||||
Hotels, Resorts & Cruise Lines | 8,002,774 | 16,090,619 | — | 24,093,393 | ||||||||||||||
Industrial Machinery | 26,944,192 | — | 328,508 | 27,272,700 | ||||||||||||||
Life & Health Insurance | 9,948,522 | — | 2,408,966 | 12,357,488 | ||||||||||||||
Other | 1,256,761,761 | — | — | 1,256,761,761 | ||||||||||||||
Short-Term Investments | — | 66,237,225 | — | 66,237,225 | ||||||||||||||
|
| |||||||||||||||||
$ | 1,301,657,249 | $ | 86,349,281 | $ | 2,737,474 | $ | 1,390,744,004 | |||||||||||
|
| |||||||||||||||||
International Opportunities Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Food Distributors | $ | — | $ | 2,434,101 | $ | — | $ | 2,434,101 | |||||||||
Other | 499,035,697 | — | — | 499,035,697 | ||||||||||||||
Short-Term Investments | — | 15,148,791 | — | 15,148,791 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 499,035,697 | $ | 17,582,892 | $ | — | $ | 516,618,589 | |||||||||||
|
| |||||||||||||||||
Large Cap Value Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 209,223,238 | $ | — | $ | — | $ | 209,223,238 | ||||||||||
Short-Term Investments | — | 2,685,030 | — | 2,685,030 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 209,223,238 | $ | 2,685,030 | $ | — | $ | 211,908,268 | |||||||||||
|
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Fund | Category | Quoted Prices in Active Markets for Identical Investments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Value at 3/31/2016 | |||||||||||||
Long/Short Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 287,807,595 | $ | — | $ | — | $ | 287,807,595 | ||||||||||
Short-Term Investments | — | 35,918,095 | — | 35,918,095 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 287,807,595 | $ | 35,918,095 | $ | — | $ | 323,725,690 | |||||||||||
|
| |||||||||||||||||
Liabilities | ||||||||||||||||||
Securities Sold Short | $ | (88,457,079 | ) | $ | — | $ | — | $ | (88,457,079 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | (88,457,079 | ) | $ | — | $ | — | $ | (88,457,079 | ) | |||||||||
|
| |||||||||||||||||
Micro Cap Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Biotechnology | $ | 10,874,277 | $ | — | $ | 80,640 | $ | 10,954,917 | |||||||||
Other | 242,124,650 | — | — | 242,124,650 | ||||||||||||||
Warrants | — | — | 14,648 | 14,648 | ||||||||||||||
Short-Term Investments | — | 5,810,343 | — | 5,810,343 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 252,998,927 | $ | 5,810,343 | $ | 95,288 | $ | 258,904,558 | |||||||||||
|
| |||||||||||||||||
Micro Cap Value Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Health Care Services | $ | 6,754,355 | $ | 1,096,233 | $ | — | $ | 7,850,588 | |||||||||
Other | 136,921,784 | — | — | 136,921,784 | ||||||||||||||
Convertible Preferred Stocks | — | — | 1,450,187 | 1,450,187 | ||||||||||||||
Preferred Stocks | — | — | 1,801,050 | 1,801,050 | ||||||||||||||
Warrants | — | — | 47,500 | 47,500 | ||||||||||||||
Rights | — | — | 37,500 | 37,500 | ||||||||||||||
Short-Term Investments | — | 20,320,067 | — | 20,320,067 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 143,676,139 | $ | 21,416,300 | $ | 3,336,237 | $ | 168,428,676 | |||||||||||
|
| |||||||||||||||||
Small Cap Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Biotechnology | $ | 104,023,529 | $ | — | $ | 281,971 | $ | 104,305,500 | |||||||||
Other | 1,725,114,389 | — | — | 1,725,114,389 | ||||||||||||||
Preferred Stocks | — | — | 37,614,407 | 37,614,407 | ||||||||||||||
Limited Partnership Interest | — | — | 4,373,794 | 4,373,794 | ||||||||||||||
Warrants | — | — | 51,217 | 51,217 | ||||||||||||||
Short-Term Investments | — | 15,178,495 | — | 15,178,495 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 1,829,137,918 | $ | 15,178,495 | $ | 42,321,389 | $ | 1,886,637,802 | |||||||||||
|
| |||||||||||||||||
Small Cap Value Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | $ | 259,075,398 | $ | — | $ | — | $ | 259,075,398 | ||||||||||
Limited Partnership Interest | 2,563,276 | — | — | 2,563,276 | ||||||||||||||
Short-Term Investments | — | 15,616,570 | — | 15,616,570 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 261,638,674 | $ | 15,616,570 | $ | — | $ | 277,255,244 | |||||||||||
|
| |||||||||||||||||
Strategic Income Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Diversified REITs | $ | 1,557,365 | $ | 497,999 | $ | — | $ | 2,055,364 | |||||||||
Other | 43,042,780 | — | — | 43,042,780 | ||||||||||||||
Exchange-Traded Funds | 414,552 | — | — | 414,552 | ||||||||||||||
Limited Liability Company Membership Interest | 1,170,730 | — | — | 1,170,730 | ||||||||||||||
Limited Partnership Interest | 6,077,816 | — | — | 6,077,816 | ||||||||||||||
Corporate Bonds | — | — | 380 | 380 | ||||||||||||||
Short-Term Investments | — | 7,155,317 | — | 7,155,317 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 52,263,243 | $ | 7,653,316 | $ | 380 | $ | 59,916,939 | |||||||||||
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MARCH 31, 2016 (UNAUDITED) | ||
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Fund | Category | Quoted Prices in Active Markets for Identical Investments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Value at 3/31/2016 | |||||||||||||
Ultra Growth Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Biotechnology | $ | 9,220,739 | $ | — | $ | 39,245 | $ | 9,259,984 | |||||||||
Communications Equipment | — | — | 9,440 | 9,440 | ||||||||||||||
Other | 76,559,020 | — | — | 76,559,020 | ||||||||||||||
Preferred Stocks | — | — | 1,243,932 | 1,243,932 | ||||||||||||||
Limited Partnership Interest | — | — | 4,078,672 | 4,078,672 | ||||||||||||||
Warrants | — | — | 7,128 | 7,128 | ||||||||||||||
Short-Term Investments | — | 1,304,609 | — | 1,304,609 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 85,779,759 | $ | 1,304,609 | $ | 5,378,417 | $ | 92,462,785 | |||||||||||
|
| |||||||||||||||||
World Innovators Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
Common Stocks | Communications Equipment | $ | 2,056,809 | $ | — | $ | 674 | $ | 2,057,483 | |||||||||
Other | 147,110,668 | — | — | 147,110,668 | ||||||||||||||
Limited Partnership Interest | — | — | 295,112 | 295,112 | ||||||||||||||
Short-Term Investments | — | 35,552,034 | — | 35,552,034 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 149,167,477 | $ | 35,552,034 | $ | 295,786 | $ | 185,015,297 | |||||||||||
|
| |||||||||||||||||
Income Fund | �� | |||||||||||||||||
Assets | ||||||||||||||||||
Asset-Backed Securities | $ | — | $ | 9,519,372 | $ | — | $ | 9,519,372 | ||||||||||
Collateralized Mortgage Obligations | — | 18,006,469 | — | 18,006,469 | ||||||||||||||
Commercial Mortgage-Backed Securities | — | 5,164,876 | — | 5,164,876 | ||||||||||||||
Corporate Bonds | — | 44,543,663 | — | 44,543,663 | ||||||||||||||
Municipal Bonds | — | 6,119,997 | — | 6,119,997 | ||||||||||||||
Exchange-Traded Funds | 855,520 | — | — | 855,520 | ||||||||||||||
U.S. Government Agency Securities | — | 9,474,408 | — | 9,474,408 | ||||||||||||||
U.S. Treasury Notes | — | 11,205,787 | — | 11,205,787 | ||||||||||||||
Preferred Stocks | 1,187,520 | — | — | 1,187,520 | ||||||||||||||
Short-Term Investments | — | 752,385 | — | 752,385 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | 2,043,040 | $ | 104,786,957 | $ | — | $ | 106,829,997 | |||||||||||
|
| |||||||||||||||||
U.S. Treasury Fund | ||||||||||||||||||
Assets | ||||||||||||||||||
U.S. Government Obligations | $ | — | $ | 374,819,914 | $ | — | $ | 374,819,914 | ||||||||||
Short-Term Investments | — | 7,098,559 | — | 7,098,559 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
$ | — | $ | 381,918,473 | $ | — | $ | 381,918,473 | |||||||||||
|
|
If the securities of an Asset Class are all the same level, the asset class is shown in total. If the securities of an Asset Class cross levels, the level with the smallest number of categories and with multiple levels within a category is displayed by category. The remaining categories that do not cross levels are combined into the “Other” category.
The valuation techniques used by the Funds to measure fair value for the six months ended March 31, 2016 maximized the use of observable inputs and minimized the use of unobservable inputs.
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The Funds’ policy is to recognize transfers between levels at the end of the reporting period. The table below shows the significant transfers between Level 1 and Level 2 due to fair valuation in certain foreign markets pursuant to a systematic valuation model.
Fund | Transfers Out Of Level 2 at Market Value | Transfers Into Level 1 at Market Value | ||||||
Core Growth Fund | $ | 63,510,070 | $ | 63,510,070 | ||||
Emerging India Fund | 42,112,288 | 42,112,288 | ||||||
Emerging Markets Select Fund | 16,605,065 | 16,605,065 | ||||||
Emerging Markets Small Cap Fund | 505,415,767 | 505,415,767 | ||||||
Frontier Emerging Small Countries Fund | 366,625,365 | 366,625,365 | ||||||
Global Opportunities Fund | 53,432,917 | 53,432,917 | ||||||
International Growth Fund | 956,475,210 | 956,475,210 | ||||||
International Opportunities Fund | 365,764,011 | 365,764,011 | ||||||
Micro Cap Fund | 16,070,101 | 16,070,101 | ||||||
Micro Cap Value Fund | 22,071,883 | 22,071,883 | ||||||
Small Cap Growth Fund | 183,432,641 | 183,432,641 | ||||||
Small Cap Value Fund | 12,071,859 | 12,071,859 | ||||||
Ultra Growth Fund | 3,674,984 | 3,674,984 | ||||||
World Innovators Fund | 54,592,044 | 54,592,044 |
The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) for the Funds during the six months ended March 31, 2016:
Fund | Market Value Beginning Balance 9/30/2015 | Purchases at Cost | Sales (Proceeds) | Accrued Discounts (Premiums) | Realized Gain/ (Loss) | Change in Unrealized Appreciation (Depreciation) | Transfers in at Market Value | Transfers out at Market Value | Market Value Ending Balance 3/31/2016 | Net Change in Unrealized Appreciation (Depreciation) on Investments Held at 3/31/2016 | ||||||||||||||||||||||||||||||
Core Growth Fund | ||||||||||||||||||||||||||||||||||||||||
Preferred Stocks | $ | 4,000,004 | $ | — | $ | — | $ | — | $ | — | $ | (503,449 | ) | $ | — | $ | — | $ | 3,496,555 | $ | (503,449 | ) | ||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
4,000,004 | — | — | — | — | (503,449 | ) | — | — | 3,496,555 | (503,449 | ) | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Emerging India Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | — | 314,484 | — | — | — | 1,201 | — | — | 315,685 | 1,201 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
— | 314,484 | — | — | — | 1,201 | — | — | 315,685 | 1,201 | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Emerging Markets Small | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | 873,390 | 1,683,844 | — | — | — | (786,958 | ) | — | — | 1,770,276 | (786,958 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
873,390 | 1,683,844 | — | — | — | (786,958 | ) | — | — | 1,770,276 | (786,958 | ) | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Global Opportunities Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | — | 175,189 | — | — | — | 8,408 | — | — | 183,597 | 8,408 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
— | 175,189 | — | — | — | 8,408 | — | — | 183,597 | 8,408 | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
International Growth Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | — | 2,741,981 | — | — | — | (4,507 | ) | — | — | 2,737,474 | (4,507 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
— | 2,741,981 | — | — | — | (4,507 | ) | — | — | 2,737,474 | (4,507 | ) | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Micro Cap Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | — | 80,250 | — | — | — | 390 | — | — | 80,640 | 390 | ||||||||||||||||||||||||||||||
Warrants | — | 1,406 | — | — | — | 13,242 | — | — | 14,648 | 13,242 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
— | 81,656 | — | — | — | 13,632 | — | — | 95,288 | 13,632 | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Micro Cap Value Fund | ||||||||||||||||||||||||||||||||||||||||
Convertible Preferred | 1,310,000 | 48,428 | 91,759 | 1,450,187 | 91,759 | |||||||||||||||||||||||||||||||||||
Preferred Stocks | 1,801,050 | — | — | — | — | — | — | — | 1,801,050 | — | ||||||||||||||||||||||||||||||
Warrants | 42,019 | — | — | — | — | 5,481 | — | — | 47,500 | 5,481 | ||||||||||||||||||||||||||||||
Rights | — | 71,250 | — | — | — | (33,750 | ) | — | — | 37,500 | (33,750 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
3,153,069 | 119,678 | — | — | — | 63,490 | — | — | 3,336,237 | 63,490 | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Small Cap Growth Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | — | 280,607 | — | — | — | 1,364 | — | — | 281,971 | 1,364 | ||||||||||||||||||||||||||||||
Preferred Stocks | 36,789,588 | 6,000,003 | — | — | — | (5,175,184 | ) | — | — | 37,614,407 | (5,175,184 | ) | ||||||||||||||||||||||||||||
Limited Partnership | 4,827,863 | 15,000 | (485,927 | ) | — | 162,286 | (145,428 | ) | — | — | 4,373,794 | (145,428 | ) | |||||||||||||||||||||||||||
Warrants | — | 4,917 | — | — | — | 46,300 | — | — | 51,217 | 46,300 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
41,617,451 | 6,300,527 | (485,927 | ) | — | 162,286 | (5,272,948 | ) | — | — | 42,321,389 | (5,272,948 | ) | ||||||||||||||||||||||||||||
|
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MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Fund | Market Value Beginning Balance 9/30/2015 | Purchases at Cost | Sales (Proceeds) | Accrued Discounts (Premiums) | Realized Gain/ (Loss) | Change in Unrealized Appreciation (Depreciation) | Transfers in at Market Value | Transfers out at Market Value | Market Value Ending Balance 3/31/2016 | Net Change in Unrealized Appreciation (Depreciation) on Investments Held at 3/31/2016 | ||||||||||||||||||||||||||||||
Strategic Income Fund | ||||||||||||||||||||||||||||||||||||||||
Corporate Bonds | $ | 804 | $ | — | $ | (580 | ) | $ | — | $ | (11 | ) | $ | 167 | $ | — | $ | — | $ | 380 | $ | 167 | ||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
804 | — | (580 | ) | — | (11 | ) | 167 | — | — | 380 | 167 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
Ultra Growth Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | 914 | 39,055 | — | — | — | 8,716 | — | — | 48,685 | 190 | ||||||||||||||||||||||||||||||
Preferred Stocks | 1,573,562 | — | — | — | — | (329,630 | ) | — | — | 1,243,932 | (329,630 | ) | ||||||||||||||||||||||||||||
Limited Partnership | 4,511,302 | 15,000 | (456,272 | ) | — | 158,815 | (150,173 | ) | — | — | 4,078,672 | (150,173 | ) | |||||||||||||||||||||||||||
Warrants | — | 684 | — | — | — | 6,444 | — | — | 7,128 | 6,444 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
6,085,778 | 54,739 | (456,272 | ) | — | 158,815 | (464,643 | ) | — | — | 5,378,417 | (473,169 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
World Innovators Fund | ||||||||||||||||||||||||||||||||||||||||
Common Stocks | 65 | — | — | — | — | 609 | — | — | 674 | — | ||||||||||||||||||||||||||||||
Limited Partnership | 316,546 | — | (29,654 | ) | — | 3,474 | 4,746 | — | — | 295,112 | 4,746 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||
316,611 | — | (29,654 | ) | — | 3,474 | 5,355 | — | — | 295,786 | 4,746 | ||||||||||||||||||||||||||||||
|
|
QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS
Fund | Description | Fair Value at 3/31/2016 | Valuation Technique | Unobservable Input | Range (Average) | |||||||||
Core Growth Fund | Direct Venture Capital Investments: Systems Software | $ | 3,496,555 | Market comparable companies | EV/R** multiple Discount for lack of marketability |
| 2.1 - 8.6(4.6) 20% |
| ||||||
Emerging India Fund | Unlisted Common Stock: Life & Health Insurance | $ | 277,801 | Value spun from parent company Discount for lack of marketability | Percent of parent assets Discount for lack of marketability |
| 23% 4% |
| ||||||
Emerging Markets Small Cap Fund | Unlisted Common Stock: Life & Health Insurance | $ | 1,543,067 | Value spun from parent company Discount for lack of marketability | Percent of parent assets Discount for lack of marketability |
| 23% 4% |
| ||||||
Global Opportunities Fund | Unlisted Common Stock: Life & Health Insurance | $ | 161,565 | Value spun from parent company Discount for lack of marketability | Percent of parent assets Discount for lack of marketability |
| 23% 4% |
| ||||||
International Growth Fund | Unlisted Common Stock: Life & Health Insurance | $ | 2,408,966 | Value spun from parent company Discount for lack of marketability | Percent of parent assets Discount for lack of marketability |
| 23% 4% |
| ||||||
Micro Cap Value Fund | Direct Venture Capital Investments: Oil & Gas Refining & Marketing | $ | 1,450,187 | Underlying price Liquidation preference | Probability weighting Probability weighting |
| 25% 75% |
| ||||||
Micro Cap Value Fund | Direct Venture Capital Investments: Pharmaceuticals | $ | 1,801,050 | Probability of warrant exercise Probability of no warrant exercise | Exercise price Remaining value |
| * * |
| ||||||
Micro Cap Value Fund | Warrant in Public Equity: Oil & Gas Refining & Marketing | $ | 47,500 | Discount to cost | Cost | 50% | ||||||||
Small Cap Growth Fund | Direct Venture Capital Investments: Biotechnology | $ | 201,755 | Market comparable companies | EV/R** multiple Discount for lack of marketability |
| 0.9 - 6.8(2.6) 20% |
| ||||||
Small Cap Growth Fund | Direct Venture Capital Investments: Systems Software | $ | 6,353,277 | Market comparable companies | EV/GP† multiple Discount for lack of marketability |
| 3.3 - 12.0(7.0) 20% |
| ||||||
Small Cap Growth Fund | Direct Venture Capital Investments: Oil & Gas Equipment & Services | $ | 10,998,866 | Market comparable companies | EV/R** multiple Discount for lack of marketability |
| 2.7 - 7.0(4.7) 20% |
| ||||||
Small Cap Growth Fund | Direct Venture Capital Investments: Systems Software | $ | 14,060,507 | Market comparable companies | EV/R** multiple Discount for lack of marketability |
| 2.1 - 8.6(4.6) 20% |
| ||||||
Ultra Growth Fund | Direct Venture Capital Investments: Biotechnology | $ | 50,439 | Market comparable companies | EV/R** multiple Discount for lack of marketability |
| 0.9 - 6.8(2.6) 20% |
|
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WASATCH FUNDS — Notes to Financial Statements (continued) | ||
| ||
|
Fund | Description | Fair Value at 3/31/2016 | Valuation Technique | Unobservable Input | Range (Average) | |||||||
Ultra Growth Fund | Direct Venture Capital Investments: Health Care Technology | $ | 369,473 | Probability of completion of repurchase | Discount to repurchase amount | 20% | ||||||
Ultra Growth Fund | Direct Venture Capital Investments: Oil & Gas Equipment & Services | $ | 824,020 | Market comparable companies | EV/R** multiple Discount for lack of marketability | 2.7 - 7.0(4.7) 20% |
* | The exercise price of the warrant will be within a range; the actual price is not set at this time. As such, this valuation is directionally sensitive to the determination of the exercise price within the range. |
** | Enterprise-Value-To-Revenue Multiple — (“EV/R”) A measure of the value of a stock that compares a company’s enterprise value to its revenue. |
† | Enterprise-Value-To-Gross Profit Multiple — (“EV/GP”) A measure of the value of a stock that compares a company’s enterprise value to its gross profit. |
Changes in multiples may change the fair value of an investment. Generally, a decrease in this multiple will result in a decrease in the fair value of an investment.
The Funds’ other Level 3 investments have been valued using observable inputs, unadjusted third-party transactions and quotations, unadjusted historical third party information or the unadjusted NAV. No unobservable inputs internally developed by the Funds have been applied to these investments, thus they have been excluded from the above table.
14. OFFSETTING
Each Fund is party to various netting arrangements. The FASB requires disclosure about certain netting arrangements and similar agreements to enable users of a Fund’s financial statements to evaluate the effect or potential effect of netting arrangements on the Fund’s financial position. The scope of the disclosure is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions.
The following tables present information about financial instruments that were subject to enforceable netting arrangements as of March 31, 2016:
REPURCHASE AGREEMENTS
Gross Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||
Fund | Counterparty | Gross Asset Amounts Presented in Statements of Assets and Liabilities | Financial Instrument | Collateral Received1 | Net Amount (Not Less Than 0) | |||||||||||||
Core Growth Fund | State Street Bank and Trust Co. | $ | 74,234,256 | $ | — | $ | (74,234,256 | ) | $ | — | ||||||||
Emerging India Fund | State Street Bank and Trust Co. | 1,400,883 | — | (1,400,883 | ) | — | ||||||||||||
Emerging Markets Select Fund | State Street Bank and Trust Co. | 850,625 | — | (850,625 | ) | — | ||||||||||||
Emerging Markets Small Cap Fund | State Street Bank and Trust Co. | 848,959 | — | (848,959 | ) | — | ||||||||||||
Frontier Emerging Small Countries Fund | State Street Bank and Trust Co. | 7,554,746 | — | (7,554,746 | ) | — | ||||||||||||
Global Opportunities Fund | State Street Bank and Trust Co. | 3,672,663 | — | (3,672,663 | ) | — | ||||||||||||
International Growth Fund | State Street Bank and Trust Co. | 66,237,225 | — | (66,237,225 | ) | — | ||||||||||||
International Opportunities Fund | State Street Bank and Trust Co. | 15,148,791 | — | (15,148,791 | ) | — | ||||||||||||
Large Cap Value Fund | State Street Bank and Trust Co. | 2,685,030 | — | (2,685,030 | ) | — | ||||||||||||
Long/Short Fund | State Street Bank and Trust Co. | 35,918,095 | — | (35,918,095 | ) | — | ||||||||||||
Micro Cap Fund | State Street Bank and Trust Co. | 5,810,343 | — | (5,810,343 | ) | — | ||||||||||||
Micro Cap Value Fund | State Street Bank and Trust Co. | 20,320,067 | — | (20,320,067 | ) | — | ||||||||||||
Small Cap Growth Fund | State Street Bank and Trust Co. | 15,178,495 | — | (15,178,495 | ) | — | ||||||||||||
Small Cap Value Fund | State Street Bank and Trust Co. | 15,616,570 | — | (15,616,570 | ) | — | ||||||||||||
Strategic Income Fund | State Street Bank and Trust Co. | 7,155,317 | — | (7,155,317 | ) | — | ||||||||||||
Ultra Growth Fund | State Street Bank and Trust Co. | 1,304,609 | — | (1,304,609 | ) | — | ||||||||||||
World Innovators Fund | State Street Bank and Trust Co. | 35,552,034 | — | (35,552,034 | ) | — | ||||||||||||
Income Fund | State Street Bank and Trust Co. | 752,385 | — | (752,385 | ) | — | ||||||||||||
U.S. Treasury Fund | State Street Bank and Trust Co. | 7,098,559 | — | (7,098,559 | ) | — |
1 | Repurchase agreements are classified as short-term investments in the Statements of Assets and Liabilities. The market value of the collateral received is greater than the amounts indicated in the table. For further information, see Note 3 — Securities and Other Investments “Repurchase Agreements” and the Schedules of Investments. |
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MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
SECURITIES BORROWEDFOR SHORT SALES | ||||||||||||||||||
Gross Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||
Fund | Counterparty | Gross Liability Amounts Presented in Statements of Assets and Liabilities | Financial Instrument | Collateral Pledged1 | Net Amount Than 0) | |||||||||||||
Long/Short Fund | JPMorgan Chase | $ | 88,457,079 | $ | — | $ | (88,457,079 | ) | $ | — |
1 | The market value of the collateral received is greater than the amounts indicated in the table. For further information, see Note 3 — Securities and Other Investments “Short Sales” and the Schedules of Investments. |
15. FAIR VALUEOF DERIVATIVE INSTRUMENTS*
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure:
WASATCH LARGE CAP VALUE FUND
The Effect of Derivative Instruments on the Statement of Operations for the six months ended March 31, 2016:
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 options written | $ | — | $ | — | $ | — | $ | 97,399 | $ | — | $ | 97,399 | ||||||||||||
|
|
For the six months ended March 31, 2016, the average monthly balance of outstanding derivative financial instruments was as follows:
Large Cap Value Fund | ||||
Option contracts: | ||||
Average number of call contracts written | 183 | |||
Average value of call contracts written | $ | 23,033 |
16. SUBSEQUENT EVENTS
Management has evaluated the possibility of subsequent events and has determined that there are no additional events that would require adjustment to or additional disclosure in the Funds’ financial statements.
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WASATCH FUNDS — Supplemental Information | ||
| ||
|
Management Information. The business affairs of Wasatch Funds are overseen by its Board of Trustees. The Board consists of five Independent Trustees and one Interested Trustee. Three of the Independent Trustees and the Interested Trustee were elected by shareholders to serve until their successors are qualified, appointed or elected in accordance with the Trust’s Declaration of Trust and By-Laws. Two Independent Trustees have been appointed by the elected Independent Trustees to serve until his or her successor is qualified, appointed or elected in accordance with the Trust’s Declaration of Trust and By-Laws.
The Trustees and executive officers of Wasatch Funds and their principal occupations for at least the last five years are set forth below. The Advisor retains proprietary rights to the Trust name.
Name, Address and Age | Position(s) Held with Wasatch Funds | Term of Office1 and Length of Time Served | Principal Occupation(s) during Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustees during Past 5 Years2 | |||||
Independent Trustees | ||||||||||
James U. Jensen, J.D., MBA 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 71 | Trustee and Chairman of the Board | Indefinite Served as Chairman of the Board since 2004 and Trustee since 1986 | Chief Executive Officer of Clearwater Law & Governance Group (an operating law firm board governance consulting company) April 2008 to present; Co-Founder and Chairman of the Board of Intelisum, Inc. (a company pursuing computer and measurement technology and products) 2001 - 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. | 19 | Director and Board Chairman of Agricon Global Corporation (formerly known as Bayhill Capital Corporation (telephone communications) from December 2007 to February 2014; Trustee, Northern Lights Fund Trust III (30 portfolios) since 2012. | |||||
D. James Croft, Ph.D. 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 74 | Trustee and Chairman of the Governance and Nominating Committee | Indefinite Served as Trustee since 2005 | Consultant to the mortgage industry on issues of mortgage quality, identification of mortgage fraud, strategic planning and client development since 2004; Founder & Executive Director, Mortgage Asset Research Institute from 1990 to 2004. | 19 | None | |||||
Miriam M. Allison 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 68 | Trustee and Chairman of the Audit Committee | Indefinite Served as Trustee since 2010 | Rancher since 2004. From 2001 to 2005, Chairman of UMB Fund Services, Inc. | 19 | Director, Northwestern Mutual Series Fund, Inc. (27 portfolios) since 2006. | |||||
Heikki Rinne 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 63 | Trustee | Indefinite Served as Trustee since October 2012 | Chief Executive Officer of the Halton Group Ltd. (an indoor environmental control manufacturing and technology company) from 2002 to 2016. | 19 | Director, Halton Group Ltd. since 2016. | |||||
Kristen M. Fletcher 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 62 | Trustee | Indefinite Served as Trustee since October 2014 | Director, Youth Sports Alliance since 2015; Director, Utah Symphony/Utah Opera since 2005; Director, Woodlands Commercial Bank 2009 - 2012; Chairman and CEO, ABN AMRO, Inc. and U.S. Country Representative, ABN AMRO Bank, NV from 2002 to 2004. | 19 | Director, Youth Sports Alliance since 2015; Director, Woodlands Commercial Bank 2009 to 2012; Director, Utah Symphony/Utah Opera since 2005. | |||||
| ||||||||||
Interested Trustee | ||||||||||
Samuel S. Stewart, Jr.3 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 73 | 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 from 2004 to June 2009; Director of Research of the Advisor from 1975 to 2004; Chairman of the Board of Wasatch Funds from 1986 to 2004. | 19 | 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 he/she attains the age of 75 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 | Dr. Stewart is an Interested Trustee because he serves as the Chairman of the Board of the Advisor and is an employee of the Advisor. |
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MARCH 31, 2016 (UNAUDITED) | ||
| ||
|
Name, Address and Age | Position(s) Held with Trust | Term of Office and Length of Time Served | Principal Occupation(s) during Past 5 Years | |||
Officers | ||||||
Daniel D. Thurber 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 46 | Vice President | Indefinite Served as Vice President since February 2007 | General Counsel, Chief Compliance Officer and Director of Compliance for the Advisor since 2006. | |||
Russell L. Biles 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 48 | Chief Compliance Officer, Vice President and Secretary | Indefinite Served as Chief Compliance Officer and Vice President since February 2007 and Secretary since November 2008 | Chief Compliance Officer and Vice President for Wasatch Funds since February 2007; Secretary for Wasatch Funds since November 2008; Counsel for the Advisor since October 2006. | |||
Cindy B. Firestone CPA 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 58 | 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 from December 2002 to August 2011. | |||
David Corbett 505 Wakara Way 3rd Floor Salt Lake City, UT 84108 Age 43 | Assistant Vice President | Indefinite Served as Assistant Vice President since August 2012 | Assistant Vice President for Wasatch Funds since August 2012; Director of Mutual Fund Services for the Advisor since June 2007. |
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.
The Funds hereby designate the following amounts or maximum amounts allowable as long term capital gain dividends for the purpose of the dividends paid deduction. The amounts designated here include the utilization of earnings and profits distributed to shareholders on the redemption of shares.
Fund | Amount | |||
Core Growth Fund | $ | 24,139,661 | ||
Frontier Emerging Small Countries Fund | 14,583,973 | |||
Global Opportunities Fund | 27,018,684 | |||
International Growth Fund | 9,181,913 | |||
International Opportunities Fund | 32,985,697 | |||
Large Cap Value Fund | 91,428,188 | |||
Long/Short Fund | 171,032,782 | |||
Micro Cap Fund | 13,800,575 | |||
Micro Cap Value Fund | 21,640,698 | |||
Small Cap Growth Fund | 210,961,388 | |||
Strategic Income Fund | 7,422,145 | |||
Ultra Growth Fund | 29,153,346 | |||
World Innovators Fund | 25,428,998 | |||
U.S. Treasury Fund | 11,970,866 |
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 without charge 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 quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q filings are available on the SEC’s website at www.sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the operation of the Public Reference room may be obtained by calling 800.SEC.0330).
BOARD CONSIDERATIONSFOR ADVISORY AGREEMENTSOFTHE WASATCH FUNDSFOR 2016
At a meeting held on November 10 - 11, 2015 (the “Meeting”), the Board of Trustees (the “Board”) 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”).
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WASATCH FUNDS — Supplemental Information (continued) | ||
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In preparation for their role in the evaluation of the Advisory Agreement with the Advisor and the Sub-Advisory Agreements, the Independent Trustees met in executive session on October 28, 2015 and November 10, 2015. In addition to the executive sessions, the Board, acting directly or through its committees, met regularly throughout the year and received information on a variety of topics that was relevant to its annual consideration of the renewal of a Fund’s Advisory Agreement and Sub-Advisory Agreement (if applicable) including, among other things, Fund investment performance, compliance, risk management, valuation, trade execution and other matters relating to Fund operations. The Independent Trustees also met with management of the Advisor (including key investment personnel) at their quarterly meetings as well as with management at other times between the quarterly meetings throughout the year. The materials specifically provided in connection with the annual review of the Advisory and Sub-Advisory Agreements supplement the information received throughout the year.
At their regular Board meetings and executive sessions, the Independent Trustees were also assisted by independent legal counsel. In addition to the material provided by the Advisor and Sub-Advisors, 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 Independent Trustees in voting on advisory agreements. During the October executive session, independent legal counsel reviewed these duties and the factors set out in judicial decisions and SEC directives relating to the approval of advisory contracts.
In evaluating the Advisory Agreement and Sub-Advisory Agreements and determining the factors to be considered and the weight given to each factor, the Independent Trustees relied upon their own business judgment, the legal advice provided by legal counsel and their accumulated knowledge and experience gained from overseeing the Funds and from the information provided by management and discussions with the Funds’ portfolio managers at the Board meetings throughout the year. The Independent Trustees’ consideration of the contractual fee arrangements for the Funds are the result of several years of review and discussion between the Independent Trustees and Fund management, and the Independent Trustees’ conclusions may be based, in part, on their consideration of the fee arrangements and other factors developed in prior years. 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 material factors considered by the Independent Trustees and their conclusions are described below.
A. | NATURE, EXTENTAND QUALITYOF SERVICES |
In considering the renewal of the Advisory and Sub-Advisory Agreements, the Independent Trustees considered the nature, extent and quality of the Advisor’s and Sub-Advisors’ services, including portfolio management services (and the resulting Fund performance) and non-advisory or administrative services. The Independent Trustees reviewed information describing the Advisor’s and each Sub-Advisor’s organization, business, resources and financial health. The Independent Trustees considered information describing the Advisor’s investment process to constructing portfolios (including risk management), investment personnel and research teams. The Independent Trustees seek to meet with the portfolio managers of the various Funds during the year to discuss, among other things, their investment approach to the applicable Fund, any adjustments thereto, market conditions and investment performance. The Independent Trustees recognized the research intensive investment process followed by the Advisor and the resources, tools and capabilities the Advisor devoted to the research team to enable its members to conduct such analysis and visit companies throughout the world. The Independent Trustees considered the size of the research team and the qualifications and capabilities of the investment personnel, including their background, education and experience. The Independent Trustees further reviewed the compensation structure for the members of the research team in seeking to evaluate the ability of the Advisor to attract and retain qualified investment personnel and to provide appropriate incentives for investment personnel to invest consistently with the respective Fund’s investment parameters and to act in the best interests of the respective Fund. As a component of the investment management process, the Independent Trustees considered the Advisor’s trading capabilities and risk management process. The Independent Trustees also considered the portfolio managers’ investments, if any, in the Funds they manage. As noted below, in reviewing the Advisor’s investment management performance, the Independent Trustees also evaluated the performance of the Funds.
In addition to the portfolio management function, the Independent Trustees recognized the Funds are registered investment companies that operate in a regulated industry and considered the quality and breadth of other services the Advisor provided to manage and operate the Funds. Such services included compliance (such as evaluating the adequacies of the Funds’ compliance program, recommending changes thereto as necessary, and overseeing the training of personnel); oversight of service providers (including the Sub-Advisors, custodian, administrator and transfer agent); board administration (such as preparing or managing the preparation of board reports and other documentation necessary to assist the Independent Trustees, coordinating among service providers for timely reporting, and supporting and administering Board and committee meetings); and other
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administrative services (such as preparing or overseeing the preparation of regulatory and tax reports, registration statements and shareholder reports; monitoring and evaluating cross-trades [if any]; and overseeing the valuation of portfolio securities). In connection with the support services provided to the Independent Trustees, the Trustees considered that in addition to the regular reports provided by the Advisor during regular meetings, the Advisor also provided or engaged the appropriate parties to provide special reports to the Independent Trustees during the year to enhance their understanding on topics that impact some or all of the Funds (such as presentations on cybersecurity developments, liquidity and stress testing and fund accounting) which in turn enhance the Independent Trustees’ ability to represent shareholders. The Independent Trustees also recognized the Advisor’s commitment to compliance and considered its compliance and regulatory history as well as the Advisor’s commitment to risk management and its ongoing activities to identify and manage risks.
With respect to the Sub-Advisors, the Independent Trustees recognized that the Sub-Advisors primarily provide portfolio management services and were not expected to supply other significant administrative services. In considering the Sub-Advisory Agreements, the Independent Trustees considered a report by the Advisor analyzing each Sub-Advisor with respect to, among other things, its portfolio management services; the experience and qualifications of the applicable investment personnel; the performance of the applicable Funds; its compliance program; and the Sub-Advisor’s financial strength and stability. The Independent Trustees also noted the Advisor’s recommendation to renew each Sub-Advisory Agreement.
Based on their review, the Independent Trustees found that, overall, the nature, extent and quality of services provided under the Advisory Agreement and the Sub-Advisory Agreements were satisfactory on behalf of each applicable Fund.
B. | THE INVESTMENT PERFORMANCEOFTHE FUNDS |
In their review of the advisory arrangements, the Independent Trustees considered the performance history of each Fund over various time periods. In evaluating each Fund’s performance, the Independent Trustees considered various measurements of performance, including absolute performance, the Fund’s return compared to the performance of other peer funds, and the Fund’s performance compared to its benchmark. More specifically, the Independent Trustees reviewed, among other things, a report prepared by Broadridge/Lipper (“Lipper”) comparing the respective Fund’s total return for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015 (or for the periods available for Funds that did not exist for part of the foregoing timeframe) compared to the performance of unaffiliated funds with similar investment objectives or classifications (a “Lipper Peer Universe”), to a more focused subset thereof, if any (a “Lipper Peer Group”) and a benchmark assigned by Lipper, if any (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, 2015 (or for the periods available for Funds that did not exist for part of the foregoing timeframe together with the average annual return since inception for Funds with the shorter duration) compared to additional benchmark(s) and unaffiliated funds in the Fund’s Morningstar investment category as well as considered any Morningstar ratings of the Funds. In addition, the Independent Trustees received analyst reports provided by an unaffiliated party for the following Funds: Core Growth Fund, Emerging Markets Small Cap Fund, Global Opportunities Fund, International Growth Fund, Small Cap Growth Fund and the Long/Short Fund. This information supplemented the performance information provided to the Independent Trustees during the year. The Independent Trustees also considered the discussions with investment personnel regarding Fund performance that occur at Board meetings throughout the year.
When reviewing the performance of a Fund, the Independent Trustees recognized several factors that may impact the evaluation of the performance data as well as the weight given to particular performance data, including the following:
• | The performance data reflects a snapshot in time as of a particular period (in this case, the periods ended August 31, 2015 and September 30, 2015) and a different performance period could generate significantly different results; |
• | Long-term performance can be adversely affected by even one period of significant underperformance so that a single investment decision or theme has the ability to disproportionately affect long-term performance; |
• | The investment experience of a particular shareholder in the Funds will vary depending on the shareholder’s particular investment period and the Fund’s performance during that period and the class held (if multiple classes are offered in a Fund); |
• | Certain Funds offer multiple classes and the performance of the classes of a Fund should be substantially similar on a relative basis because the classes are invested in the same portfolio of securities and any differences in performance between the classes could be principally attributed to the variation in the expenses of each class; and |
• | The Independent Trustees evaluated Fund performance in light of the respective Fund’s investment objectives, investment parameters and guidelines and recognized that the objectives, investment parameters and guidelines and the level of risk taken to achieve performance of the peers and/or benchmarks may differ from that of the Funds and therefore the performance results may also differ. Accordingly, the usefulness of comparative performance data as a frame of reference to measure a Fund’s performance may be limited because of such differences, including, in particular, the Lipper Peer Groups for the Micro Cap Fund and the Micro Cap Value Fund (collectively, the “Micro Cap Funds”). As the Lipper Peer Group assigned to the Micro Cap Funds appeared to generally focus on companies with a larger market capitalization than those sought by the Micro Cap Funds, the Independent Trustees also reviewed |
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the Micro Cap Funds’ performance compared to a custom peer group provided by the Advisor for the one-, three-, five- and 10-year periods ended September 30, 2015. |
Based on their review of performance, the Independent Trustees determined the following:
Core | Growth Fund |
With respect to the Core Growth Fund, other than the 10-year period, the Fund outperformed the median of its Lipper Peer Group for the one-, two-, three-, four-, and five-year periods ended August 31, 2015. Similarly, the Fund outperformed its Benchmark for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015. The Fund also outperformed the peer group average in the Morningstar small growth category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. The Board considered the Fund’s performance satisfactory.
Emerging | India Fund |
With respect to the Emerging India Fund, the Fund outperformed the median of its Lipper Peer Group in the one-, two-, three-, and four-year periods ended August 31, 2015. The Fund also outperformed the average of its peer group in the Morningstar India equity category for the quarter, one- and three-year periods ended September 30, 2015. The Board considered the Fund’s performance to be generally favorable.
Emerging | Markets Select Fund |
With respect to the Emerging Markets Select Fund, the Independent Trustees recognized that although the Fund’s absolute performance for the one- and two-year periods ended August 31, 2015 was negative, the Fund outperformed the median of its Lipper Peer Group for such periods. The Fund also provided generally comparable performance to the average of its peer group in the Morningstar diversified emerging markets category for the one-year period ended September 30, 2015. The Independent Trustees recognized that the Fund’s absolute performance was challenged; however, the Independent Trustees noted the Fund was relatively new with a limited performance history. The Independent Trustees will continue to monitor this Fund closely.
Emerging | Markets Small Cap Fund |
With respect to the Emerging Markets Small Cap Fund, the Independent Trustees noted that the Fund outperformed the median of its Lipper Peer Group and its Benchmark for the one-, two-, three-, four- and five-year periods ended August 31, 2015. The Fund also outperformed the peer group average in the Morningstar diversified emerging markets category for the quarter-, one-, three- and five-year periods ended September 30, 2015. The Board determined that in light of the Fund’s investment objectives and the performance of the emerging markets category, the Fund’s performance was satisfactory.
Frontier | Emerging Small Countries Fund |
With respect to the Frontier Emerging Small Countries Fund, the Independent Trustees noted that although the Fund’s absolute performance was negative for the one-year
period ended August 31, 2015, the Fund outperformed the median of its Lipper Peer Group and its Benchmark for the one-, two- and three-year periods ended August 31, 2015. The Fund also outperformed its peer group average for the Morningstar diversified emerging markets category for the quarter, one- and three-year periods ended September 30, 2015. The Board determined that in light of the Fund’s investment objective, the Fund’s performance was satisfactory.
Global | Opportunities Fund |
With respect to the Global Opportunities Fund, the Independent Trustees noted that except for the two- and three-year periods ended August 31, 2015, the Fund outperformed the median of its Lipper Peer Group for the one-, four- and five-year periods. Except for the two-year period ended August 31, 2015, the Fund outperformed its Benchmark for the one-, three-, four- and five-year periods ended August 31, 2015. Except for the three-year period ended September 30, 2015, the Fund also outperformed its peer group average for the Morningstar world stock category for the one- and five-year periods ended September 30, 2015. The Board determined that the Fund’s performance was satisfactory.
U.S. | Treasury Fund |
With respect to the U.S. Treasury Fund, the Independent Trustees noted that the Fund outperformed the median of its Lipper Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015 and its Benchmark for the one-, two-, three-, four- and five-year periods ended August 31, 2015. The Fund also outperformed its peer group average of the Morningstar long government category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. The Board determined that the Fund’s performance over time was generally favorable.
International | Growth Fund |
With respect to the International Growth Fund, the Independent Trustees noted that except for the two- and three-year periods ended August 31, 2015, the Fund outperformed the median of its Lipper Peer Group for the one-, four-, five- and 10-year periods ended August 31, 2015. Except for the two-year period ended August 31, 2015, the Fund also outperformed its Benchmark for the one-, three-, four-, five- and 10-year periods ended August 31, 2015. The Independent Trustees further noted that the Fund also outperformed its peer group average for the Morningstar foreign small/mid growth category for the quarter, one-, three-, five- and 10-year periods ended September 30, 2015. The Board determined that the Fund’s performance over time was generally favorable.
International | Opportunities Fund |
With respect to the International Opportunities Fund, the Independent Trustees noted that although the Fund underperformed the median of its Lipper Peer Group for the one-, two-, three- and five-year periods ended August 31, 2015, the Fund outperformed or matched the performance of the
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median of its Lipper Peer Group in the four- and 10-year periods ended August 31, 2015. The Fund further outperformed or provided generally comparable performance to its Benchmark in the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015. Except for the one-year period ended September 30, 2015, the Fund outperformed its peer group average for the Morningstar foreign small/mid growth category for the quarter-, three-, five- and 10-year periods ended September 30, 2015. The Board determined that the Fund’s performance over time was satisfactory.
Large | Cap Value Fund |
With respect to the Large Cap Value Fund, the Independent Trustees noted that except for the one-year period, the Fund had delivered positive absolute performance for the two-, three-, four-, five- and 10-year periods ended August 31, 2015. The Independent Trustees, however, recognized in comparing the Fund’s performance to peers and its Benchmark, the Fund had experienced periods of challenged performance. Except for the 10-year period ended August 31, 2015, the Fund had underperformed the median of its Lipper Peer Group and its Benchmark in the one-, two-, three-, four- and five-year periods ended August 31, 2015. Similarly, except for the 10-year period ended September 30, 2015, the Fund had underperformed the peer group average of the Morningstar large value category over the quarter, one-, three-, and five-year periods ended September 30, 2015. The Independent Trustees recognized the steps taken by the Advisor to address performance issues, including the change in the portfolio manager of this Fund in 2013. The Independent Trustees are further aware that the portfolio manager would require time to manage the Fund in seeking to enhance overall performance. The Board continues to monitor the Fund closely.
Long/Short | Fund |
With respect to the Long/Short Fund, the Independent Trustees noted that although the Fund outperformed the median of its Lipper Peer Group and Benchmark for the five- and 10-year periods ended August 31, 2015, the Fund also underperformed the median of its Lipper Peer Group and Benchmark for the shorter one-, two-, three- and four-year periods ended August 31, 2015. The Fund also underperformed the peer group average of the Morningstar long/short equity category over the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. The Independent Trustees recognized that the Fund has experienced periods of challenged performance and have discussed with the Advisor the factors that detracted from performance, particularly the Fund’s position in energy related securities. The Board continues to monitor closely the progress of this Fund in seeking to improve performance.
Micro | Cap Fund |
With respect to the Micro Cap Fund, the Independent Trustees noted that the Fund provided positive absolute performance over the various periods ended August 31, 2015; however, the Fund also underperformed the median
of its Lipper Peer Group and Benchmark over the various periods ended August 31, 2015. Although the Fund underperformed its peer group average for the Morningstar small growth category for the longer three-, five- and 10-year periods ended September 30, 2015, the Fund outperformed such peer group average for the one-year period ended September 30, 2015. In considering the comparative data, the Independent Trustees, however, had recognized that the Lipper Peer Group may not adequately reflect the investment strategies and investable universe of the Fund as the Lipper Peer Group may contain small cap funds that invest in larger companies than the investments of the Fund. The Independent Trustees recognized that due to these differences, the performance comparisons may be inexact and of more limited relevancy. Accordingly, the Independent Trustees also reviewed the Fund’s performance compared to a custom peer group provided by the Advisor and the Russell Microcap Index for the one-, three-, five- and 10-year periods ended September 30, 2015. In considering the foregoing, the Independent Trustees determined to continue to monitor the Fund’s performance closely.
Micro | Cap Value Fund |
With respect to the Micro Cap Value Fund, the Independent Trustees noted that the Fund outperformed the median of its Lipper Peer Group and its Benchmark for the one-, two, three-, four-, five- and 10-year periods ended August 31, 2015. Similarly, the Fund outperformed the peer group average of the Morningstar small growth category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. In considering the comparative data, as noted above with the Micro Cap Fund, the Independent Trustees recognized that the Lipper Peer Group may not adequately reflect the investment strategies and investable universe of the Fund thereby limiting some of the usefulness of the comparative data. The Independent Trustees accordingly also reviewed the Fund’s performance compared to a custom peer group provided by the Advisor and the Russell Microcap Index for the one-, three-, five- and 10-year periods ended September 30, 2015. In considering the foregoing, the Board determined that the Fund’s performance had been generally favorable.
Small | Cap Growth Fund |
With respect to the Small Cap Growth Fund, the Independent Trustees noted that although the Fund underperformed the median of its Lipper Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015 and its Benchmark for such periods (except the 10-year period ended August 31, 2015), the Fund had provided positive absolute performance over such periods. Similarly, although the Fund underperformed the peer group average for the Morningstar small growth category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015, the Fund’s performance was still generally comparable to such peer group average in the five- and 10-year periods ended September 30, 2015. The Board determined that the Fund’s performance over time had been satisfactory.
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Small | Cap Value Fund |
With respect to the Small Cap Value Fund, the Independent Trustees noted that the Fund’s performance either matched or outperformed the performance of the median of its Lipper Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015. Except for the 10-year period ended August 31, 2015, the Fund outperformed its Benchmark for the one-, two-, three-, four- and five-year periods ended August 31, 2015. The Fund also outperformed the peer group average of the Morningstar small blend category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. The Board determined the Fund’s performance over time had been generally favorable.
Strategic | Income Fund |
With respect to the Strategic Income Fund, the Independent Trustees noted that except for the one-year period ended August 31, 2015, the Fund outperformed the median of its Lipper Peer Group and its Benchmark for the two-, three-, four- and five-year periods ended August 31, 2015. Although the Fund underperformed the peer group average for the Morningstar mid-cap value category for the quarter-, one- and three-year periods, the Fund outperformed such peer group average in the five-year period ended September 30, 2015. The Board determined the Fund’s performance over time was satisfactory.
Ultra | Growth Fund |
With respect to the Ultra Growth Fund, the Independent Trustees noted that the Fund had provided positive absolute performance for various periods ended August 31, 2015. With respect to the comparative performance, the Independent Trustees noted that the Fund underperformed the median of its Lipper Peer Group for the one-, two-, three-, four-, five- and 10-year periods ended August 31, 2015 and underperformed its Benchmark for all such periods except the two-year period ended August 31, 2015. Although the Fund underperformed its peer group average of the Morningstar small growth category for the three-, five- and 10-year periods, the Fund outperformed such peer group average in the one-year period ended September 30, 2015 ranking in the 34th percentile of such peers. The Independent Trustees considered that this Fund had experienced periods of challenged performance. The Independent Trustees, however, recognized that the Fund’s portfolio management team was adjusted in 2013 and the portfolio manager would require time before the results of the shift would be fully reflected in the performance. The Independent Trustees were encouraged by the performance in 2015 and will continue to monitor this Fund closely.
World | Innovators Fund |
With respect to the World Innovators Fund, the Independent Trustees noted that except for the two-year period ended August 31, 2015, the Fund either outperformed or provided generally comparable performance to the median of its Lipper Peer Group and its Benchmark
for the one-, three-, four-, five- and 10-year periods ended August 31, 2015. The Fund also outperformed the peer group average for the Morningstar world stock category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. The Board determined that the Fund’s performance over time was generally favorable.
Income | Fund |
Although the Income Fund underperformed the median of its Lipper Peer Group and its Benchmark over the three-, four-, five- and 10-year periods ended August 31, 2015, the Fund outperformed or provided generally comparable performance to the median of its Lipper Peer Group and its Benchmark for the one- and two-year periods ended August 31, 2015. The Fund also outperformed its peer group average of the Morningstar short-term bond category for the quarter-, one-, three-, five- and 10-year periods ended September 30, 2015. The Board considered the objectives of the Fund and the factors underlying performance and considered its performance satisfactory.
C. | FEES, EXPENSESAND PROFITABILITY |
1. | Fees and Expenses |
The Independent Trustees considered the advisory fee rates of the Advisor and Sub-Advisors and the rationale in proposing the level of fees. The Advisor reported to the Independent Trustees the factors it considers in proposing fees for a Fund including, among other things, the value of the services provided (e.g., the potential for the strategy to deliver alpha to shareholders and the expertise of the Advisor with the strategy), the competitive marketplace for the product and the fees of competitive funds, and the economics of the product to the Advisor (e.g., the costs in operating the Fund and constraints on product capacity).
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 in comparison to the fee and expense data of funds in both the relevant expense group (the “Lipper Expense Group”) and/or universe of funds (“Lipper Expense Universe”) provided by Lipper. The Board was also provided with a description of the methodology Lipper followed in selecting funds included in the Expense Group and Expense Universe. In this regard, the Independent Trustees reviewed and considered, among other things, comparisons of each respective Fund’s contractual and net 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 Lipper Expense Group, subject to the following. With respect to the Micro Cap Funds, the Independent Trustees recognized certain limitations with
the Lipper Expense Group and therefore also reviewed comparisons of each such Fund’s management fee and net expense ratio with those of a custom peer group provided by the Advisor, although the Advisor noted that there were still some limitations with the custom peer group as the Micro Cap Funds have few truly comparable peers available.
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In reviewing fees, the Independent Trustees also considered any expense limitation agreement the Advisor has agreed to on behalf of each existing or proposed class of shares of the respective Fund and the amounts the Advisor has reimbursed to the applicable Fund for the last three fiscal years (if any). The Independent Trustees also considered a Fund’s fees in light of the performance of the Fund and comparative data of the Fund’s fees and expenses against the fees and expenses of its Lipper Expense Group. In their evaluation of the fees, the Independent Trustees determined, among other things, the following:
For the Core Growth Fund, Emerging India Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, International Growth Fund, International Opportunities Fund, Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund, Ultra Growth Fund and World Innovators Fund
With respect to the Emerging India Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, International Growth Fund, International Opportunities Fund, Micro Cap Fund, Micro Cap Value Fund, Ultra Growth Fund and World Innovators Fund, Independent Trustees recognized that the contractual management fee and net expense ratios for the Investor Class shares and Institutional Class shares (if any) of such Funds were above the median of their respective Lipper Expense Group. With respect to the Investor Class of the Small Cap Growth Fund, the Fund has a contractual management fee higher than the median of its Lipper Expense Group but an expense ratio equal to the median of its Lipper Expense Group. With respect to the Small Cap Value Fund (Investor Class shares and Institutional Class shares), the Independent Trustees noted that such Fund had a contractual management fee higher than the median of its Lipper Expense Group, but a net expense ratio slightly above (within 5 basis points) the median of its Lipper Expense Group for Investor Class shares and below the median of its Lipper Expense Group for Institutional Class shares. With respect to the Core Growth Fund, the Independent Trustees recognized that for the Investor Class shares and Institutional Class shares, the contractual management fee was above the median of the Lipper Expense Group; however, the net expense ratio was slightly higher (within 5 basis points) than the median of the Lipper Expense Group for the Investor Class shares and below the median of its Lipper Expense Group for the Institutional Class shares.
In reviewing fees, the Independent Trustees noted the experience and reputation of the Advisor in the small- and/or micro-cap security asset class in which the Funds may invest, the research intensive approach followed by the Advisor and the related costs in applying this approach to evaluating smaller companies. The Independent Trustees recognized that the Funds investing in smaller companies would be more costly to operate in accordance with the Advisor’s investment approach and such costs increase with respect to the international Funds as the Advisor provides the resources necessary for its investment personnel to
perform the required due diligence on foreign companies across the globe. The Independent Trustees also continued to recognize the capacity constraints of the Funds investing in smaller or micro-cap companies. The Independent Trustees understand that performance for these Funds may be hindered at higher asset levels and therefore encourage the Advisor’s practice of closing Funds to new and/or existing investors when deemed appropriate to protect performance for shareholders. The Independent Trustees further noted; however, that reducing inflows to Funds also reduces the potential revenues the Advisor could have earned on higher assets under management. The Independent Trustees also recognized that the Advisor is proposing reductions in the advisory fees for several of the Funds. More specifically, the Advisor proposed to reduce the advisory fee rate of the Global Opportunities Fund and Emerging India Fund by 25 basis points, of the International Opportunities Fund by 20 basis points and the Emerging Markets Small Cap Fund by 10 basis points.
Given the foregoing factors, among others, the Independent Trustees determined the advisory fees for the foregoing Funds were acceptable.
For | the Emerging Markets Select Fund |
With respect to the Emerging Markets Select Fund, the Independent Trustees recognized that with respect to the Investor Class shares and Institutional Class shares of the Fund, the contractual management fee was above the median of its Lipper Expense Group, and after fee waivers, the net expense ratio was higher than the median of its Lipper Expense Group for Investor Class shares and slightly higher (within 5 basis points) than the median of its Lipper Expense Group for Institutional Class shares. In reviewing the advisory fees, the Independent Trustees considered the Advisor’s expertise and cost of serving the Fund in light of its international focus; however, the Independent Trustees also noted that the Advisor reported that this Fund had more capacity than Funds focused on small- and/or micro-cap companies. The Independent Trustees further noted that the Advisor proposed reducing the advisory fee rate by 25 basis points for this Fund. In light of the foregoing factors, among other things, the Independent Trustees determined the advisory fee for the foregoing Fund was acceptable.
For the Long/Short Fund, Large Cap Value Fund, Strategic Income Fund, Income Fund and U.S. Treasury Fund
With respect to Funds which had little or no capacity constraints given their investment strategies, the Independent Trustees noted the following. With respect to Investor Class shares and Institutional Class shares of the Long/Short Fund, the Trustees noted that such Fund had a contractual management fee and an expense ratio below the median of its Lipper Expense Group. With respect to Investor Class shares of the Income Fund, the Independent Trustees recognized that the Fund had a contractual management fee above the management fees of the median of its Lipper Expense Group but an expense ratio below the median of its Lipper Expense Group. With respect to the
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U.S. Treasury Fund, the Trustees considered that the U.S. Treasury Fund had a contractual management fee and an expense ratio equal to the median of its Lipper Expense Group. With respect to Investor Class shares and Institutional Class shares of the Large Cap Value Fund, such Fund had a contractual management fee above the median of its Lipper Expense Group and after fee waivers, the net expense ratio for Investor Class shares was higher than the median of its Lipper Expense Group and slightly higher (within 5 basis points) than the median of its Lipper Expense Group for Institutional Class shares. With respect to Investor Class shares of the Strategic Income Fund, such Fund had a contractual management fee and net expense ratio below the median of its Lipper Expense Group. With respect to the Large Cap Value Fund and Strategic Income Fund, the Independent Trustees noted that the Advisor reported that these Funds compete in a highly developed category, and therefore the Advisor seeks to price such Funds close to the median of the Fund’s Lipper Expense Group. Based on 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 considered the fee rate or the range of fees and their weighted average that the Advisor charges to separate accounts that are managed in a style similar to that used for certain Funds. Such Funds include the Core Growth Fund, Emerging Markets Select Fund, Emerging Markets Small Cap Fund, Frontier Emerging Small Countries Fund, Global Opportunities Fund, International Growth Fund, Large Cap Value Fund, Long/Short Fund, Micro Cap Fund, Small Cap Growth Fund, Small Cap Value Fund, Ultra Growth Fund and World Innovators Fund. The Independent Trustees noted that the fee rates and/or weighted average fee rates for separate accounts were generally lower than the fees for the comparable Fund (except in the case of the Ultra Growth Fund). The Independent Trustees also considered information regarding the management fees the Advisor assesses to other types of clients, including a unified managed account, model account, collective investment trusts and domestic and foreign funds sponsored by other sponsors.
In comparing the advisory fee rate of the Funds to that assessed to other types of clients, the Independent Trustees took into account the varying levels of service required by the different types of clients. The Independent Trustees recognized that although the Advisor may provide portfolio management services to various clients, the level of work and related costs in providing such management services will vary depending on the investment parameters of the particular client, such as the ability to invest in foreign securities. The Independent Trustees also recognized the breadth of non-advisory services necessary to operate the Funds, which were generally not required to the same extent for separate accounts or other types of clients. Such services included, among other things, fund administrative services and operations, oversight of third party service providers, oversight of shareholder servicing, Trustee support, tax
administration and compliance. Given the differences in the level of services provided to the Funds compared to other clients, the Independent Trustees concluded that the fees charged in light of the services provided to the Funds were reasonable by comparison.
In considering the fees of the Sub-Advisors for the Income Fund and U.S. Treasury Fund, the Independent Trustees considered the fees paid to the respective Sub-Advisor with respect to the applicable Fund, taking into account that the Advisor compensates the Sub-Advisor for its services from the Advisor’s revenues. The Independent Trustees compared the sub-advisory fee rate paid to the Sub-Advisors with the pricing schedule the respective Sub-Advisor charges for investment management services for other clients. The Independent Trustees noted that the fee rates paid to these Sub-Advisors for their sub-advisory services were reasonable in comparison to their respective pricing schedule. 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 the Advisor |
To evaluate the Advisor’s financial condition and the reasonableness of the management fees, the Independent Trustees reviewed profitability data of the Advisor both on an absolute basis and in comparison to other investment advisors. The Independent Trustees recognized the subjective nature in determining profitability. The Independent Trustees recognized that employee compensation is the primary expense of the Advisor and reviewed the structure and components of such compensation arrangements and the allocation of compensation expenses among the Funds. The Independent Trustees noted that as a privately held S corporation owned by the employees, the level of profitability is influenced, in part, by paying employees through compensation expense as opposed to dividends as shareholders. The Independent Trustees reviewed profitability information for the Advisor from its relationship with each Fund for the calendar year ended December 31, 2014 on an actual and adjusted basis which reflected certain adjustments to the compensation expense and the rationale for the adjustments. The Independent Trustees also reviewed the methodology the Advisor utilized to allocate expenses among the Funds, but noted that other reasonable methodologies could have been employed and would have derived different results. The Independent Trustees reviewed, among other things, the consolidated financial statements for the years ended December 31, 2014 and December 31, 2013 for WA Holdings, Inc., the parent of the Advisor. The Independent Trustees also considered whether the Advisor has financial resources sufficient to meet its obligations to the Funds.
In addition to the foregoing, the Trustees considered the Advisor’s revenues and profit margins compared to publicly available information of certain unaffiliated publicly traded investment managers. The Independent Trustees considered the rationale for the selection of the peer group, the limits on available information regarding other peers and noted
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that the value of the comparative data may be limited as the data is affected by many different factors, including the structure and size of the other investment advisor, the types of funds it manages, the lines of business it has, the methodology employed to determine profitability, and that the disclosed operating profits and net income may be net of distribution and marketing expenses. Notwithstanding the foregoing, the Independent Trustees noted that the Advisor’s profitability (with and without the compensation adjustment) 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 from their relationship with the applicable Fund was not available, the Independent Trustees received certain financial statements of the Sub-Advisors. The Trustees reviewed HIMCO’s financial statements for the years ended December 31, 2014 and 2013 and 1st Source’s income statement for the month ended September 30, 2015 and September 30, 2014. Considering the Sub-Advisors’ fee schedules and the fact that the sub-advisory fees are established through arm’s length negotiations, the Independent Trustees concluded that HIMCO’s and 1st Source’s profitability from the Sub-Advisor’s relationship with the U.S. Treasury Fund and Income Fund, respectively, is not unreasonable.
In addition to the above, the Independent Trustees also considered any indirect benefits (such as soft dollars) that the Advisor or Sub-Advisor received that were directly attributable to the management of the applicable Funds. See Section E below for additional information on indirect benefits the Advisor or Sub-Advisors may receive as a result of their relationship with the respective Funds.
D. | ECONOMIESOF SCALEAND WHETHER FEE LEVELS REFLECT THESE ECONOMIESOF SCALE |
The Independent Trustees considered the extent of any economies of scale as the Funds grow and whether Fund investors have appropriately benefited from any such economies of scale. The Independent Trustees, however, recognized that the capacity constraints on the Funds investing in small- and micro-cap companies limit the ability for the Funds to grow to achieve economies of scale as the Advisor may close such Funds to new investments in order to keep such Funds’ assets at an appropriate level to maintain or protect performance. The Independent Trustees further acknowledged the limited profit potential for the Advisor by closing Funds to new and/or existing shareholders and that the costs of the Advisor’s investment in its research intensive process also inhibit the achievement of economies of scale. With respect to the Funds without such capacity constraints, the Independent Trustees also reviewed the factors the
Advisor considered in proposing a fee level and recognized the Advisor’s position that such Funds’ are priced at a level that already reflects potential economies of scale. The Independent Trustees further noted that the Advisor has implemented expense limitations that serve to limit the overall net expense ratios of the respective classes of certain Funds to the benefit of the applicable Fund’s shareholders. Considering the factors above, the Independent Trustees concluded the absence of breakpoints in the management fee was acceptable and that such economies as exist are adequately reflected in the Advisor’s fee structure.
E. | INDIRECT BENEFITS |
The Independent Trustees received and considered information regarding indirect benefits the Advisor and Sub-Advisors may receive as a result of their relationship with the Funds. In this regard, the Independent Trustees recognized that the Advisor may receive benefits from soft dollar arrangements whereby the Advisor may use a portion of the brokerage commissions paid by the Funds to acquire research that may be useful to the Advisor in managing the Funds and other clients. The Independent Trustees recognized that the Advisor’s profitability would be lower if it paid for such research with its own revenues. The Independent Trustees reviewed information regarding the soft dollar arrangements including, among other things, the commissions paid, the services provided and the measures to determine the quality of execution received. 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. The Independent Trusts also recognized that the Advisor pays certain fees to 1st Source for shareholder servicing. The Independent Trustees took these indirect benefits into account when accessing the level of advisory fees paid to the Advisory and sub-advisory fee to the respective Sub-Advisor.
F. | ANNUAL APPROVALOF ADVISORYAND SUB-ADVISORY AGREEMENTS |
The Independent Trustees did not identify any single factor discussed previously as all-important or controlling. The Board, including a majority of Independent Trustees, concluded that the terms of the Advisory Agreement for each Fund, 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 each respective Fund, and that the Advisory Agreement should be approved on behalf of each Fund and the Sub-Advisory Agreements should be approved on behalf of the U.S. Treasury Fund and the Income Fund, respectively.
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WASATCH FUNDS — Service Providers | MARCH 31,��2016 (UNAUDITED) | |
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INVESTMENT ADVISOR
Wasatch Advisors, Inc.
505 Wakara Way, 3rd Floor
Salt Lake City, UT 84108
SUB-ADVISORFORTHE WASATCH-1ST SOURCE INCOME FUND
1st Source Corporation Investment Advisors, Inc.
100 North Michigan Street
South Bend, IN 46601
SUB-ADVISORFORTHE U.S. TREASURY FUND
Hoisington Investment Management Co.
6836 Bee Caves Road
Building 2, Suite 100
Austin, TX 78746
ADMINISTRATORAND FUND ACCOUNTANT
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
DISTRIBUTOR
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
TRANSFER AGENT
UMB Fund Services, Inc.
235 West Galena Street
Milwaukee, WI 53212
CUSTODIAN
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
LEGAL COUNSELTO WASATCH FUNDSANDINDEPENDENT TRUSTEES
Chapman and Cutler, LLP
111 West Monroe Street
Chicago, IL 60603
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
1100 Walnut Street, Suite 1300
Kansas City, MO 64106
CONTACT WASATCH | ||
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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 DELIVERY
Wasatch Funds
235 West Galena Street
Milwaukee, WI 53212
ONLINE
www.WasatchFunds.com
shareholderservice@wasatchfunds.com
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WASATCH
FUNDS
2016 Semi-Annual Report
www.WasatchFunds.com • 800.551.1700
FSC
www.fsc.org
MIX
Paper from
responsible sources
FSC® C101537
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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.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees, where those changes were implemented after the Registrant last provided disclosure in response to this item.
Item 11. Controls and Procedures.
(a) | The Registrant’s principal executive and principal financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934). |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the 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 8, 2016 |
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 8, 2016 | |
By: | /s/ Cindy B. Firestone | |
Cindy B. Firestone | ||
Treasurer (principal financial officer) of Wasatch Funds Trust | ||
Date: | June 8, 2016 |