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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively increasing both long and short exposure to exploit extreme valuation discrepancies before the speculative bubble deflates."
During Q3 2025, the Wasatch Long/Short Alpha Fund (Investor Class) declined -7.25%, significantly underperforming the Russell 2500 Index which gained 9.00%. This poor performance was driven by an extreme 'risk-on' environment where low-quality, unprofitable companies dramatically outperformed high-quality ones. This dynamic hurt the fund's high-quality longs and caused losses on its short positions. Key long detractors included Inspire Medical Systems, Shift4 Payments, and Freshpet, while Medpace and Fabrinet were key positive long contributors. On the short side, Opendoor Technologies detracted after a retail-driven meme rally forced the fund to cover, while a short position in Sweetgreen acted as an effective consumer hedge. Rather than retrenching, management has increased gross exposure—raising both long and short positions—to capitalize on what they view as highly overpriced short opportunities and fundamentally strong, growing long holdings.
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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: The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Growth Outlook
Market outlook remains moderate conviction: The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Risk Appetite
Risk appetite posture is above average conviction: The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Forward Guidance
Forward guidance signal: The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Language Signal
Tone analysis indicates above average conviction language: The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Perceived Risk
Perceived risk level is evaluated as high conviction. The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Opportunity Density
Opportunity density index indicates high conviction actionable entry points. The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
Time Horizon
Investment time horizon reflects a high conviction orientation. The Wasatch Long/Short Alpha Fund suffered a difficult Q3 (-7.25% vs. 9.00% benchmark) due to a speculative, low-quality market rally. Management remains constructive, actively inc...
