- High Growth
With burgeoning consumer populations and rapidly growing economies, emerging markets are poised to continue to outperform.
- Opportunity to Capitalize on Inefficient Markets
The majority of companies in emerging markets are under-followed by research analysts. This lack of analyst coverage may present an information asymmetry and a significant opportunity for active investment managers.
- Improving Institutional Stability
Many emerging nations have made significant strides in improving their economic and political stability. With improving infrastructure and controls the investment risk may be lower than commonly perceived.
The Fund’s investment objective is long-term growth of capital.
Focus on Quality Growth Companies
Wasatch uses a fundamental bottom-up process to look for individual companies of all market capitalizations that possess an identifiable, sustainable competitive advantage, are well managed, undervalued and are producing above average earnings growth relative to their industry and country of origin. These may be medium and larger sized businesses the Wasatch international team has followed for years while the companies were still small. Many of these companies remain essentially unknown to foreign investors, yet may be market leaders within their respective countries, and may still have significant room to grow.
Our Best Ideas
The Fund will hold a select portfolio of Wasatch's 30 to 50 best ideas, invested across capitalizations and emerging markets regions. The Fund will focus on high quality companies with relatively low correlations among investments to help mitigate overall portfolio risk. The Fund seeks to be broadly positioned across sectors.
Traditional emerging markets funds are primarily invested in large cap stocks in export driven countries like China, Korea, and Taiwan. Using a proprietary methodology and extensive on-site due diligence, the Wasatch international team systematically analyzes the entire universe of emerging markets, including the countries that haven’t received as much attention, for attractive, potentially overlooked opportunities.
Investments in Locally Driven Economies
The Fund targets companies that serve the rapidly growing needs of domestic (home-country) consumers. Companies with domestic-demand orientations tend to be less sensitive to global economic factors and more dependent upon developments within their home countries. Accordingly, geographic diversification may provide the Wasatch Emerging Markets Select Fund with risk benefits not available to index funds that are heavily weighted in larger exporting countries tied to the developed world.
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. WAESX is non-diversified, meaning that it can invest a larger portion of its assets in the stocks of a limited number of companies than a diversified fund. Non-diversification increases the risk of loss to the Fund if the values of these securities decline. The investment objective of WAESX is long-term growth of capital. This fund is new and has limited operating history.
An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a prospectus, containing this and other information, visit www.wasatchfunds.com or call 800.551.1700. Please read it carefully before investing. Past performance is no guarantee of future.