Wasatch Small Cap Growth Fund Investor Class (WAAEX) Fund Overview

Wasatch Small Cap Growth Fund Investor Class (WAAEX) Financial Services Profile

Wasatch Small Cap Growth Fund Investor Class (WAAEX) is an actively managed mutual fund focused on achieving substantial long-term capital appreciation. It primarily invests at least 80% of its net assets in common stocks of small, rapidly expanding companies, with flexibility for up to 20% in international equities across developed, emerging, and frontier markets.

What Is the Investment Thesis for WAAEX?

The Wasatch Small Cap Growth Fund Investor Class (WAAEX) presents an investment thesis centered on its dedicated strategy to achieve substantial long-term capital appreciation by investing in small, rapidly expanding companies. With a market capitalization of $1.15 billion and a Beta of 1.26, the fund inherently targets a segment known for higher growth potential but also increased volatility compared to large-cap equities. A core policy dictates that at least 80% of its net assets are invested in small-capitalization firms, providing focused exposure to this dynamic market segment. The fund's flexibility to allocate up to 20% of its total assets to international equities across developed, emerging, and frontier markets further enhances its growth potential by diversifying geographic exposure and tapping into global growth drivers. Key value drivers include the potential for small-cap companies to outperform larger counterparts during specific market cycles and the fund's active management approach to identify high-growth opportunities. Growth catalysts could include sustained economic expansion favoring smaller, agile businesses and increased investor allocation to growth-oriented strategies. However, investors must acknowledge the inherent risks, such as the elevated volatility (Beta of 1.26) associated with small-cap stocks and the absence of a dividend yield, meaning returns are solely dependent on capital appreciation. The fund's performance relative to its benchmark and the broader small-cap market will be critical for evaluating its effectiveness in achieving its long-term capital appreciation objective.

Based on FMP financials and quantitative analysis

WAAEX Key Highlights

Market Capitalization: $1.15 billion, indicating a significant presence within the mutual fund landscape.

• Beta: 1.26, suggesting the fund's portfolio is more volatile than the broader market.
• Dividend Yield: None, as the fund's primary objective is capital appreciation, not income generation.
• Small-Cap Allocation Policy: At least 80% of net assets are invested in common stocks of small-capitalization firms, ensuring dedicated exposure to this growth-oriented segment.
• International Investment Flexibility: Up to 20% of total assets can be allocated to international equities from developed, emerging, and frontier markets, offering diversification and global growth potential.

Who Are WAAEX's Competitors?

WAAEX is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are WAAEX's Key Strengths?

Dedicated focus on small-cap growth companies, a segment with high return potential.

• Diversified portfolio across various sectors within the small-cap market.
• Strategic flexibility to invest up to 20% in international equities, broadening opportunities.
• Clear investment objective centered on long-term capital appreciation.

What Are WAAEX's Weaknesses?

Inherent higher volatility (Beta 1.26) due to small-cap exposure compared to broader market.

• No dividend yield, meaning returns are solely dependent on capital appreciation.
• Potential for underperformance during market cycles unfavorable to growth or small-cap stocks.
• Reliance on active management to consistently identify outperforming small-cap companies.

What Are the Key Risks for WAAEX?

Inherent volatility of small-capitalization stocks, which can lead to significant fluctuations in the fund's net asset value (NAV).

• Underperformance relative to its benchmark or peer group, which could result in investor dissatisfaction and potential outflows.
• Broader market downturns or economic contractions that disproportionately impact growth-oriented and smaller companies.
• Liquidity risks associated with investing in less frequently traded small-cap and frontier market international equities.
• Interest rate increases that could negatively impact the valuation of growth stocks by making future earnings less attractive.

What Threats Does WAAEX Face?

• Significant market downturns, particularly impacting growth and small-cap equities.
• Increased competition from other actively managed and passive small-cap funds.
• Regulatory changes affecting mutual funds or asset management industry.
• Underperformance relative to its benchmark, leading to investor outflows.

What Are WAAEX's Competitive Advantages?

• Specialized Focus: Dedicated expertise in identifying and analyzing small-capitalization growth companies, a segment requiring deep research and specific analytical skills.
• Diversified Portfolio: The fund's strategy of investing across various sectors within the small-cap market provides internal diversification, potentially mitigating company-specific risks.
• International Flexibility: Ability to invest up to 20% in international equities from diverse markets (developed, emerging, frontier) expands the investment universe and potential for uncorrelated returns.
• Established Mandate: A clear, fundamental policy of investing at least 80% in small-cap firms provides a consistent and transparent investment strategy for investors.

What Does WAAEX Do?

The Wasatch Small Cap Growth Fund Investor Class (WAAEX) operates with the explicit primary objective of achieving substantial long-term capital appreciation for its investors. While income generation is a secondary consideration, the fund's core strategy centers on identifying and investing in small, rapidly expanding companies. This strategic focus is underpinned by a fundamental policy mandating that a minimum of 80% of its net assets, including any borrowed funds utilized for investment purposes, must be allocated to the common stocks of small-capitalization firms. This commitment ensures a dedicated exposure to the dynamic small-cap segment of the market, which is often characterized by higher growth potential but also increased volatility. The fund's portfolio management maintains a degree of flexibility, allowing for up to 20% of its total assets, at the point of acquisition, to be committed to international equities. These international investments can originate from companies situated across a broad spectrum of global markets, encompassing developed, emerging, and frontier economies. This international allocation provides the fund with the potential to tap into diverse growth drivers and opportunities beyond domestic borders, while also offering a degree of geographic diversification. Headquartered in Salt Lake City, US, WAAEX is part of the Financial Services sector, specifically operating within the Asset Management industry. Its approach is designed for investors who prioritize aggressive growth over current income and are comfortable with the inherent risks associated with small-cap equity investments. The fund aims to capitalize on the innovative potential and expansion trajectories of smaller enterprises, seeking to deliver superior returns over extended investment horizons.

What Products and Services Does WAAEX Offer?

• Primarily invests in small, rapidly expanding companies.
• Aims for substantial long-term capital appreciation for its investors.
• Allocates at least 80% of its net assets to common stocks of small-capitalization firms.
• Has the flexibility to invest up to 20% of its total assets in international equities.
• Invests in international equities from developed, emerging, and frontier markets.
• Manages a diversified portfolio across various sectors within the small-cap market.

How Does WAAEX Make Money?

• Manages a portfolio of small-capitalization growth companies.
• Generates returns for investors through capital appreciation of its underlying holdings.
• Offers investors exposure to a diversified basket of small-cap equities.
• Utilizes a flexible allocation strategy, including up to 20% in international markets, to seek growth opportunities.

What Industry Does WAAEX Operate In?

Wasatch Small Cap Growth Fund Investor Class (WAAEX) operates within the highly competitive Asset Management industry, a sub-sector of Financial Services. This industry is characterized by a diverse range of investment vehicles, including mutual funds, exchange-traded funds (ETFs), and private funds, all vying for investor capital. WAAEX specifically targets the small-cap growth segment, a niche within equity investing that focuses on companies with smaller market capitalizations and above-average growth prospects. Market trends in this segment often include periods of significant outperformance when economic conditions favor innovation and expansion, but also heightened sensitivity to economic downturns and interest rate changes. The competitive landscape for small-cap growth funds is robust, with numerous active managers and passive index funds offering similar exposures. WAAEX differentiates itself through its active management strategy, aiming to identify specific companies with strong growth potential, and its flexibility to invest up to 20% in international small-cap equities, which can provide access to a broader universe of opportunities compared to purely domestic funds. The fund's objective aligns with investors seeking long-term capital appreciation and willing to accept the higher risk profile inherent in small-cap investments.

Who Are WAAEX's Key Customers?

• Individual investors seeking long-term capital appreciation.
• Institutional investors looking for exposure to small-cap growth equities.
• Investors with a higher risk tolerance comfortable with equity market volatility.
• Those prioritizing growth over current income, as the fund does not pay dividends.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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