Wasatch Funds Receives Three 2014 Lipper Awards(March 21, 2014)
Salt Lake City, Utah, March 21, 2014—Wasatch Funds announced today that two of its funds received a total of three 2014 Lipper Awards, which recognize mutual funds that deliver consistently strong risk-adjusted performance relative to peers.
“Wasatch continues to find less efficiently priced companies abroad, and we’ve dedicated substantial resources to our global and international funds,” said Gene Podsiadlo, Director of Mutual Funds. “We are long-term investors, so we’re thrilled that both funds are repeat award winners and that the Wasatch World Innovators Fund captured the award for two time periods. These awards highlight the strength of our in-depth research to find what we believe are the best growth companies anywhere in the world.”
The two Wasatch funds that received recognition were:
- Wasatch World Innovators Fund (WAGTX), honored as #1 for both the three-year and five-year periods ended December 31, 2013 among 163 and 112 global multi-cap growth funds, respectively. The World Innovators Fund invests in companies that are taking market share and that the Fund’s Portfolio Managers Sam Stewart and Josh Stewart perceive to be mispriced.
- Wasatch Emerging Markets Small Cap Fund (WAEMX), honored as #1 for the five-year period ended December 31, 2013 among 266 emerging markets funds. Portfolio Managers Roger Edgley and Laura Geritz, and Associate Portfolio Manager Andrey Kutuzov invest in small companies, many of which are meeting home-country consumer needs in emerging markets. The Fund is closed to new investors, though existing direct shareholders and intermediaries with established positions continue to have access to the Fund.
Both Wasatch funds were previously recognized by Lipper in 2013. The Wasatch World Innovators Fund was honored as #1 over both the three-year and five-year periods ended December 31, 2012 among 144 and 72 global multi-cap growth funds, respectively. The Wasatch Emerging Markets Small Cap Fund was honored as #1 over both the three-year and five-year periods ended December 31, 2012 among 308 and 219 emerging markets funds, respectively.
We took this opportunity to ask Josh Stewart, Portfolio Manager of the Wasatch World Innovators Fund, some questions about innovation.
Q: In managing the Fund, you and Sam Stewart try to identify companies that benefit from “creative destruction.” What are some of the destructive forces you see that are producing investment opportunities right now?
A: Technological advancements occur as reliably as the sun rising and setting each day. Most of these advancements are incremental. But the big ones change everything. The big technological advancement of this generation is clearly the Internet. Some prominent business examples in which incumbents have been outmatched include Amazon.com overtaking Barnes & Noble in the book market, and eBay, Google and Facebook gaining share from print media in the battle for ad dollars.
One business with a lot of upheaval right now is payments. For decades, credit cards have been taking market share from cash. But today the payments business looks ready to reinvent itself again, and drastically accelerate with smartphones and other mobile devices. An innovator at the center of mobile payments is a Swedish company called Seamless Distribution, which created a technology that allows brick-and-mortar merchants to implement mobile payments at cash registers without any additional capital expense. By letting customers link directly to their bank accounts, Seamless Distribution also helps cut down on middleman charges, which can mean savings of 50% on credit-card fees. For merchants such as grocery stores, whose margins are very thin, these savings are quite substantial.
Q: When people think of innovation, technology companies often come to mind. But you find innovation in any sector. Can you mention an area that most people would not expect to be benefiting from innovation?
A: The coffee business may seem boring and commoditized, but there are actually some interesting companies challenging tired old ways of doing things. Italian coffee machine maker De’Longhi is a small company compared to rivals like Philips, Groupe SEB and Whirlpool. But De’Longhi is focused on making a few top-notch products and selling them at premium prices. De’Longhi spends the same percentage of sales on product development as its competitors, but per product De’Longhi spends a great deal more. The end results are beautiful and innovative designs that are easy to clean, easy to use, and that produce flavorful coffee at home. De’Longhi’s market share in the espresso coffee machine niche in Western Europe went from 6% in 2004 to over 30% today. The company’s coffee business has grown at an 18% compounded annual rate over the last decade. With the coffee culture on a multi-decade tear in the U.S. and now accelerating in Asia, De’Longhi is in an enviable spot.
About Wasatch Advisors®
Wasatch Advisors is the investment manager to Wasatch Funds, as well as to separately managed institutional and individual portfolios. Wasatch Advisors pursues a disciplined approach to investing, focused on bottom-up, fundamental analysis to develop a deep understanding of the investment potential of individual companies. In making investment decisions, the portfolio managers employ a uniquely collaborative process to leverage the knowledge and skill of the entire Wasatch Advisors research team. Wasatch Advisors is an employee-owned investment advisor founded in 1975 and headquartered in Salt Lake City, Utah. The firm had $19.4 billion in assets under management as of February 28, 2014. Wasatch Advisors, Inc. is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.
About Wasatch Funds®
Wasatch Funds, a family of no-load mutual funds, had $13.6 billion in assets under management as of February 28, 2014. The Wasatch World Innovators Fund ($314 million in assets) and the Wasatch Emerging Markets Small Cap Fund ($1.6 billion in assets) seek to provide long-term growth of capital.
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The Lipper Fund Awards program honors funds that have excelled in delivering consistently strong risk-adjusted performance, relative to peers. Lipper designates award-winning funds in most individual classifications for the three-, five- and 10-year periods. Lipper Award designations are not intended to constitute investment advice or predict future results, and Lipper does not guarantee the accuracy of this information. In addition to periods of positive returns, the Wasatch Funds that received Lipper Awards have experienced some periods of negative returns during the award time frames. Past performance is not indicative of future results.
The Lipper Fund Awards are part of the Thomson Reuters Awards for Excellence, a global family of awards that celebrate exceptional performance throughout the professional investment community. The Thomson Reuters Awards for Excellence recognize the world’s top funds, fund management firms, sell-side firms, research analysts, and investor relations teams. The Thomson Reuters Awards for Excellence also include the Extel Survey Awards, the StarMine Analyst Awards, and the StarMine Broker Rankings. For more information, please contact email@example.com or visit http://excellence.thomsonreuters.com/.
Mutual fund investing involves risks and loss of principal is possible. 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.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, containing this and other information, visit www.WasatchFunds.com or call 800.551.1700. Please read the prospectus carefully before investing.
As of December 31, 2013, the Wasatch World Innovators Fund held the following percentages of its net assets in the following companies: 2.2% in Amazon.com, Inc., 5.5% in eBay, Inc., 2.6% in Google, Inc., and 0.4% in Seamless Distribution AB. The Wasatch World Innovators Fund was not invested in Barnes & Noble, Inc., De’Longhi S.p.A., Facebook, Inc., Groupe SEB S.A., Philips or Whirlpool Corp. As of December 31, 2013, the Wasatch Emerging Markets Small Cap Fund was not invested in any of the companies mentioned in this document. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Fund or its Advisor. Current and future holdings are subject to risk.
Separately managed accounts and related investment advisory services are provided by Wasatch Advisors, Inc., a federally regulated investment advisor.
© 2014 Wasatch Funds. All rights reserved. Wasatch Funds are distributed by ALPS Distributors, Inc. (ADI). Gene Podsiadlo is a registered principal and Steve Rung is a registered representative of ADI. ADI is not affiliated with Wasatch Advisors, Inc.