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Rating:Wasatch Drops the 1st Source Name from Two Funds Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, February 4, 2011

Wasatch Drops the 1st Source Name from Two Funds

Reported by Armie Margaret Lee

Wasatch Advisors on Monday rechristened two of its funds.

The Wasatch - 1st Source Long/Short Fund now sports the name Wasatch Long/Short Fund and the Wasatch - 1st Source Income Equity Fund now goes by the name Wasatch Large Cap Value.

In 2008, Wasatch acquired three mutual funds from 1st Source Corporation Investment Advisors. The third fund that joined the Wasatch lineup, Wasatch - 1st Source Income Fund, continues to carry that name.

In other Wasatch news, the Salt Lake City-based fund firm lowered management fees on three funds. The fee went down from:

  • 150 basis points to 125 bps for the Wasatch International Growth Fund
  • 195 bps to 150 bps for the Global Opportunities Fund
  • 125 bps to 100 bps for the Ultra Growth Fund.

    Meanwhile, Wasatch officials announced strategy changes for the Global Science & Technology Fund and Emerging Markets Small Cap Fund.
    Company Announcement

    Changes Announced to Several Wasatch Funds, Including Fee Reductions, Name Evolutions, and Strategy Changes

    Lower Management Fees

    Wasatch Advisors and Wasatch Funds have agreed to lower the management fee on three of the Wasatch funds effective today. We regularly review the fees on each of the Wasatch funds in an effort to ensure that the management fee is appropriate relative to the services provided. It is our goal that long-term shareholders will feel that their fee for each Wasatch fund is appropriate and fair.

    In setting the fee we also consider the cost of Wasatch's research-intensive investment process and the economic impact of self-imposed capacity limits (i.e. when we close a fund to prevent rising assets from impinging on our investment strategies). We want to make sure that over the long-term our funds are delivering good value to shareholders while remaining economically viable for us to manage.

    As investment opportunities, particularly in international markets, continue to expand we believe that a few of our funds will have increased potential capacity in the future. As such, we felt it appropriate to share the improved potential economics with Fund shareholders. For this and other reasons, we are reducing the management fee and expense caps on the following three funds:

  • Wasatch International Growth Fund (WAIGX): Effective 1/31/2011 the Management Fee has been lowered from 1.50% to 1.25%. The Total Expense Ratio for the fund is now 1.61% (with a new expense cap of 1.75%).
  • Wasatch Global Opportunities Fund (WAGOX): Effective 1/31/2011 the Management Fee has been lowered from 1.95% to 1.50%. The Total Expense Ratio for the fund is now 1.88% (with a new expense cap of 1.95%).
  • Wasatch Ultra Growth Fund (WAMCX): Effective 1/31/2011 the Management Fee has been lowered from 1.25% to 1.00%. The Total Expense Ratio for the fund is now 1.46% (with a new expense cap of 1.50%).

    New Names

    We are changing the names on the two 1st Source equity funds that joined the Wasatch fund family in 2008. The changes will align the naming convention of these two funds to be consistent with the naming approach used across the Wasatch family of funds. There will be no change to the management personnel or investment approach for either of these funds.

  • Wasatch Long/Short Fund (FMLSX) —formerly the Wasatch-1st Source Long/Short Fund: Effective today the name has been changed. There are no changes to the portfolio managers (Mike Shinnick & Ralph Shive), the investment strategy of this Fund, or the ticker symbol. As you may recall, the 1st Source Funds joined the Wasatch family in 2008. As part of the transition, the 1st Source name was retained for continuity. With the 1st Source funds now fully integrated, and the portfolio managers well assimilated into the Wasatch team, we believe it is appropriate to shorten the Fund’s name to be consistent with the naming approach used across the Wasatch funds family.
  • Wasatch Large Cap Value Fund (FMIEX)—formerly the Wasatch-1st Source Income Equity Fund: Effective today the name has been changed. There will be no changes to the portfolio managers (Ralph Shive & Mike Shinnick), the investment approach of this fund, or the ticker symbol. We believe the new name is a more accurate reflection of the fund’s investment approach, and it is more consistent with the naming style used across the Wasatch funds family. Because the fund will now have “Large Cap” in its name it will be required to have 80% of its assets in securities that are above $5 billion in market cap at the time of purchase. The Fund has been exceeding this level for years, so we do not expect this requirement to impact the fund’s investment approach.

    Strategy Changes

  • Wasatch Global Science & Technology Fund (WAGTX): We are announcing today a broadening of the Fund’s investment strategy that will take effect as of April 1, 2011. The Fund will continue to look for growing and innovative companies throughout the world, but its restriction to the science and technology sectors will be removed so that the Fund may more freely invest across sectors. The Fund is likely to continue to have significant investments in science and technology companies since these are fertile areas for the types of companies in which the Fund will invest.

    Consistent with the broader investment strategy, the Fund will also be changing its name as of April 1, 2011 to become the "Wasatch World Innovators Fund." The portfolio manager, Sam Stewart, will not change, nor will the ticker symbol, the management fee, or the expense cap. The Fund's primary benchmark will change to become the MSCI All Country (AC) World Index.
  • Wasatch Emerging Markets Small Cap Fund (WAEMX): We are announcing a change to the investment strategy, effective April 1, clarifying which investments are suitable for the Fund. The current Fund strategy states that “The Fund invests primarily in small emerging market companies,” while the new language will read “The Fund invests primarily in small companies tied economically to emerging markets.” This change is for clarification and not intended to alter our investment approach.

    If you have any questions, please feel free to call us at 800.551.1700. We appreciate the continued opportunity to manage your investments.

    Eric Huefner
    Vice President
    Wasatch Funds

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