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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while software holdings faced disruption fears."
The Wasatch Micro Cap Fund declined 3.11% in Q1 2026 but outperformed its benchmark amid volatile markets driven by U.S.-Iran conflict and AI disruption concerns. The fund's core thesis centers on identifying high-growth, high-quality micro-cap companies with differentiated business models and competitive moats. Key contributors included for-profit education companies Lincoln Educational Services and Universal Technical Institute, viewed as AI beneficiaries due to rising demand for skilled trades training less threatened by automation. EZCORP benefited from consumer stress and rising gold prices, while Cardinal Infrastructure Group expanded geographically. Software holdings faced AI-driven selloffs despite strong fundamentals, prompting the fund to consolidate into highest conviction names with competitive moats. The managers added to Red Violet on weakness, viewing it as insulated from AI disruption. Looking forward, they believe the market has failed to differentiate between true AI losers and resilient companies, positioning the fund well for long-term performance through its focus on profitability and strong fundamentals.
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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: Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Growth Outlook
Market outlook remains high conviction: Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Risk Appetite
Risk appetite posture is very low conviction: Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Forward Guidance
Forward guidance signal: Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Language Signal
Tone analysis indicates very low conviction language: Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Opportunity Density
Opportunity density index indicates moderate conviction actionable entry points. Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
Time Horizon
Investment time horizon reflects a moderate conviction orientation. Wasatch Micro Cap Fund outperformed despite Q1 volatility by focusing on AI-resistant companies with competitive moats. Education stocks benefited from skilled trades demand while ...
