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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative businesses, expecting a return to fundamentals to drive long-term outperformance."
For the calendar year 2025, the Wasatch Micro Cap Fund (Investor Class) returned 4.84%, underperforming the Russell Microcap Growth Index's return of 21.84%. The significant underperformance resulted from a historic low-quality rally dominated by unprofitable biotechnology and pharmaceutical companies, to which the fund had zero exposure. Despite these headwinds, the fund benefited from strong stock selection in the industrials, consumer-staples, and consumer-discretionary sectors. Top individual contributors included Axogen, Mama's Creations, and Castle Biosciences, while Climb Global Solutions, Backblaze (which was exited), and Vital Farms detracted. The management remains committed to high-quality, profitable companies and anticipates a market shift back toward rewarding fundamental business strength.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Growth Outlook
Market outlook remains above average conviction: Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Risk Appetite
Risk appetite posture is moderate conviction: Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Forward Guidance
Forward guidance signal: Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Language Signal
Tone analysis indicates above average conviction language: Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Opportunity Density
Opportunity density index indicates above average conviction actionable entry points. Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
Time Horizon
Investment time horizon reflects a high conviction orientation. Despite a challenging 2025 calendar year where nonprofitable micro-cap names rallied sharply, the Wasatch Micro Cap Fund remains strictly anchored in high-quality, cash-generative ...
