Wasatch World Innovators Fund® (WAGTX) 

The Wasatch World Innovators Fund is an aggressive growth fund focused on finding innovative growth companies worldwide.

What is this fund's objective?

The World Innovators Fund seeks to provide long-term capital growth by investing primarily in domestic and foreign growth companies that we believe are innovators in their respective sectors or industries.

What kind of companies does this fund hold?

Portfolio Managers Sam Stewart and Josh Stewart leverage the entire Wasatch research team in search of innovative companies. As we analyze these companies, we are particularly interested in companies that possess valuable intellectual property that can be used for innovation (e.g. companies that have developed proprietary or leading technologies, or who are applying new technologies to gain a competitive advantage.) We also look for these company characteristics:
  • Outstanding growth potential, that in our opinion, can increase sales and earnings significantly faster than average companies
  • Companies that are market leaders or potential market leaders in their industries
  • Superior management with substantial ownership interest
  • Superior financial characteristics and controls including high return on capital, strong cash flow, and low use of debt
  • Securities that we believe are rationally priced

How do we find them?

We use a bottom-up process of fundamental analysis to look for individual companies that we believe are high-quality, stable, and have the potential to grow earnings for long periods of time. To determine that a company has these characteristics we take the following approach:

Using financial databases, we screen for companies demonstrating high-quality growth. We are typically looking for:

  • Steady earnings growth
  • Rising return on assets (ROA) trends
  • High absolute levels of ROA vs. historical and peers
  • Accelerating revenues
  • Improving cash flows
  • Positive inflections in income statement or balance sheet metrics

Deep Due Diligence
We use a thorough and collaborative process to understand the companies in which we invest. We study the company, its competitors, and its industry. We talk with management to verify the quality of the leadership and gain a deeper insight for the company’s prospects and risks. We call competitors, suppliers, and customers to make sure we have a complete picture of the landscape. Meanwhile, we are constantly talking with other Wasatch portfolio managers and analysts in order to leverage the knowledge, perspective, and insight of the broader Wasatch team in every investment decision.

Earnings Models
We build proprietary earnings models in order to analyze a company’s key growth drivers. Our models help shape our projections of a company’s potential for earnings growth and what we believe to be a fair price for the stock.

We consider a variety of appropriate valuation metrics (e.g. Price to Earnings, Enterprise Value to EBITDA, Price to Book, etc.) to assess the potential return and the risk/reward trade-off of each stock. Valuation is an important component of every investment decision.

Investing in small or 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.

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