Adapting to Change: Strategy for Small-Cap Growth

First Quarter Performance Review

During the initial quarter of 2026, the Wasatch Small Cap Growth Fund's Investor Class shares saw a decline of 7.44%. This period was characterized by significant fluctuations in U.S. small-cap equities, driven by rapid shifts in investor sentiment that led to substantial market reallocations.

Market Dynamics and Sectoral Impacts

The market experienced considerable volatility. The enthusiasm surrounding artificial intelligence (AI) continued to bolster companies involved in building the necessary infrastructure for this technology.

Detailed Performance Analysis

A closer look at the fund's internal performance reveals that specific investment choices within the financial and consumer staples sectors were the primary contributors to the underperformance when compared against its benchmark.