Wasatch Micro Cap Value Fund Q4 2024 Commentary

2025-03-05 21:17:00 ET

Summary

• The Wasatch Micro Cap Value Fund—Investor Class gained 5.82% but slightly underperformed the benchmark Russell Microcap® Index, which was up 5.89%.
• U.S. micro-cap stocks had sharp gains in the fourth quarter as investors anticipated that Donald Trump’s presidency would lead to better economic growth and less regulation for U.S. businesses.
• During the quarter, many of our stocks had outsized share price gains. We trimmed aggressively into these moves, especially if the stock was well above the portfolio’s average market cap size.

OVERVIEW

U.S. micro-cap stocks had sharp gains in the fourth quarter as investors anticipated that Donald Trump’s presidency would lead to better economic growth and less regulation for U.S. businesses. His election win fueled a “risk-on” environment that sent micro-cap stocks up broadly. While it was a strong quarter for micro-caps, stocks were volatile late in the period after the Federal Reserve indicated it was likely to keep interest rates higher in 2025 than many investors expected....

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