Wasatch Global Investors

The Wasatch team shares lessons they’ve learned on business models, portfolio management, management teams and markets.

Among emerging-market countries, the Wasatch investment team remains most constructive on India. We’ve written about how trends such as digitalization, financialization, formalization and industrialization continue to push its economy forward. A recent visit to India allowed us to see how those trends are evolving and visit portfolio companies.

After the market selloff in 2022—a period that was particularly hard on growth stocks—we think our companies are attractively priced for the next five years, which is our baseline investment horizon.

There’s enormous scope for India and Greater China to increase GDP per capita relative to the U.S. and other developed nations

We’re currently finding the most compelling opportunities within three countries—Canada, the United Kingdom and Japan.

Investors need to understand the differences between Chinese capitalism and Western capitalism in order to properly assess the opportunities in China. Meanwhile, norms in India more closely resemble those in the United States— but India has dramatically larger headroom for growth.

For international investors, we believe the United Kingdom is home to many companies that offer an especially attractive combination of growth, value and quality. 

Brexit and the pandemic didn’t change the fundamental attractiveness of great U.K. companies.

Within the growth-vs.-value context, we’d like to discuss three Covid-related scenarios for companies.

A variety of macro and fundamental factors are converging in emerging markets, signaling a period of resurgence. We believe structural changes, a supportive investment environment, and dynamic geopolitical influences make EM particularly attractive right now. For example, semiconductor production could soon become more critical to EM growth than commodities. Now may prove to be an inflection point, especially for portfolios focused on capturing this dynamic change. Please join us for an interactive webinar highlighting EM's changing nature and the added value of active management.

Whereas commodity production had been a major economic driver in emerging markets, we think technology is now the leading force. Semiconductor advancement is the “new oil.” semiconductor companies are so far ahead of their competitors that supply is in fact a constraint—and therefore a major investment consideration.

If we do a good job of investing in high-quality companies with the potential for strong, long-duration earnings growth, we think starting valuations will matter less in generating attractive long-term performance. When we invest in a company with a high P/E ratio today, we don’t do so with the expectation the ratio will stay high indefinitely.

High-quality companies outside the U.S. look especially attractive to us. And their stocks have underperformed recently, possibly giving them greater upside potential.

Even after the partial rebound from COVID-related losses, we think high-quality companies in certain developed and emerging markets remain compelling investments. High-quality companies outside the U.S. look especially attractive to us.

To get a handle on the state of U.S. small caps after the pandemic-induced losses in early 2020, we ask: How did the U.S. small-cap group perform relative to other market-cap groups during the several years through 2019? How did they perform during the downturn...