Frontier markets represent some of the fastest growing economies in the world, and will one day graduate to full-fledged emerging status. Countries like Bangladesh, Kenya, and Peru have a young population, growing middle class, and offer largely undiscovered investment opportunities. Using Wasatch's thorough, bottom-up approach, we seek out what we believe to be the best companies in these frontier markets as well as those in newer, smaller emerging market countries.
The Wasatch Frontier Emerging Small Countries Fund is one of the few no-load mutual funds uniquely focused on this diverse universe.
Fund capacity may be limited. The Advisor reserves the right to close the Fund at any time with the goal of protecting the interests of existing shareholders.
The Investment Opportunity
Diverse Universe
Wasatch's new Fund is one of the first no-load funds to invest in what are known as frontier and emerging small countries (the newer emerging markets). Wasatch believes these markets present a significant opportunity as immature economies grow in a geographically and economically diverse way. Improved investor access to these markets has given Wasatch a universe of almost 6,000 companies to choose from.
Index-listed Frontier Countries*
Argentina
Bahrain
Bangladesh
Botswana
Bulgaria
Colombia
Cote d'Ivoire
Croatia
Cyprus
Ecuador
Estonia
Ghana
Jamaica
Jordan
Kazakhstan
Kenya
Kuwait
Latvia
Lebanon
Lithuania
Mauritius
Namibia
Nigeria
Oman
Pakistan
Panama
Qatar
Romania
Slovakia
Slovenia
Sri Lanka
Trinidad and Tobago
Tunisia
Ukraine
Vietnam
Zambia
Non-Index-listed Frontier Countries
Malawi
Swaziland
Uganda
Zimbabwe
Fiji
Georgia
Mongolia
Nepal
Uzbekistan
Armenia
Bolivia
Cayman Islands
Costa Rica
El Salvador
Guyana
Paraguay
Uruguay
Venezuela
Saudi Arabia
Emerging Small Countries
Mexico
Malaysia
Indonesia
Thailand
Chile
Poland
Turkey
Colombia
Philippines
Peru
Czech Republic
Egypt
Hungary
Morocco
RISKS
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 unstable currencies, highly volatile securities markets and political and social instability, which are described in more detail in the prospectus. Being non-diversified, WAFMX 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.
An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a prospectus containing this and other information click here or call 800.551.1700. Please read it carefully before investing.
The investment objective for the Wasatch Frontier Emerging Small Country, Emerging Markets Small Cap, and International Opporunities Fund is long-term growth of capital.
Past performance is no guarantee of future results.
CFA® is a trademark owned by CFA Institute.
* The MSCI Emerging Markets, MSCI Frontier Markets, and S&P Frontier BMI indices are free float-adjusted market capitalization indices designed to measure equity market performance in the global frontier and emerging markets.
The MSCI EAFE (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization index designed to measure theequity market performance of developed markets, excluding the U.S. and Canada.
The MSCI ACWI (All Country World Index) is a free float-adjusted market capitalization weighted index designed to measure theequity market performance of developed and emerging markets.
The S&P 500 Index represents 500 of the United States' largest stocks from a broad variety of industries.
You cannot invest directly in these or any indices.
"Bottom-up" is the term Wasatch uses to describe its intensive research process focused on identifying the investment potential of individual companies.
Correlation: Indicates the strength and direction of a linear relationship between two investments. The value will range between -1 and 1. A value of 1 indicates perfect positive dependency and -1 indicates perfect negative dependency between the two investments.
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders annually
Rapid Economic Growth
Frontier and emerging economies have outpaced the developed world for a number of years. Companies in frontier and emerging markets have considerable room for growth due to the young population, growing middle class and improved financing resources of these countries. In fact, analysts suggest they are poised to outperform developed nations for some years to come.1
Diversification Benefits
Because of their low level of integration with more developed world markets, frontier and small emerging markets offer significant potential portfolio diversification benefits. Frontier markets remain largely local in character, driven mostly by the country's own economic and political development. Additionally, primary drivers of growth differ significantly from country to country—a factor that results in lower correlations between the frontier countries themselves.
Overlooked Opportunities
It takes a lot of work to analyze this unique universe and the majority of companies are under covered by research analysts. Wasatch is dedicated to performing the necessary due diligence with a boots-on-the-ground approach.
The Wasatch Advantage
Long established process—Wasatch uses the same bottom-up process to find outstanding companies in newer emerging and frontier countries that we have employed for over 35 years. This is the same process we use for the Wasatch Emerging Markets Small Cap Fund.
Proven research team—Veteran investor Laura Geritz, CFA will lead the Wasatch team in managing the Frontier Emerging Small Countries Fund. Laura has a strong background in international small cap investing and is also a portfolio manager of the Wasatch Emerging Markets Small Cap and International Opportunities funds.
First-mover advantage—One of the first no-load, open-end mutual funds focused on frontier and smaller emerging markets. Our research indicates that there are a large number of undiscovered opportunities in these countries.
Invest in the Wasatch Frontier Emerging Small Countries Fund (WAFMX).
Click here or call a shareholder services representative at 800.551.1700