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...
Like a pilot relying on a plane’s flight-control instruments during an unfamiliar route with poor visibility, we are depending more than ever on our fact-based, unemotional investment methods. The overwhelming majority of our investments are in companies that we believe are built to withstand harsh economic shocks. Only on the margin have we slightly increased our trading activity.
Four reasons for optimism about emerging-market stocks despite their general underperformance and higher volatility over the last decade.
Although the relative performance of the Wasatch investment strategies was mixed during the third quarter — some strategies were a bit ahead of their benchmarks and some were a bit behind— the 2019 year-to-date and longer-term results (i.e., five years) have been exceptional across most of our strategies.
We often get a sense of the relative uniformity in financial-market performance by looking at the indexes shown on Morningstar.com. Of the 145 stock, bond, target and commodity indexes, 131 were positive and 14 were negative for the second quarter of 2019.
We recently heard a great adage about investing: “The stock market is the only market where people head for the exit when things go on sale.” And considering what followed 2018’s stock-market rout, heading for the exit certainly wasn’t a wise move.
Although the FAANGs were the poster children of the fourth-quarter market rout, losses were broad-based across sectors and countries. These losses were strong reminders of how important it is to pay attention to a company’s stock price in addition to focusing on its fundamentals and long-term growth prospects.
In the title of his quarterly message at the beginning of this year, our outgoing president Sam Stewart referred to a popular rumination of baseball legend Yogi Berra: Seems Like Déjà Vu, All Over Again.
With Market Indices at or Close to All-Time Highs, Investors Puzzle Over the Course Ahead. Meanwhile, The Slow-Growth Economy Is Perceived as the New "Goldilocks Scenario."
I believe this rally was the result of animal spirits based on the notion that Trump’s pro-growth policies will support the economy. At the same time, many investors assume that growth in the economy will lead to upticks in inflation and interest rates, which—along with lighter regulations—are perceived as positive for business.
Wasatch Advisors has been investing in India for well over a decade. We hope this paper will illuminate why we remain excited about the investment opportunities there.
Like the Enigmatic Title Role in the Play Waiting for Godot, a Resolution Regarding Global Monetary Policies Remains Elusive. But Perhaps We’re Waiting in the Wrong Place.
