Wasatch Global Opportunities Fund (WAGOX/WIGOX) Quarterly Comments from Lead Portfolio Managers JB Taylor and Ajay Krishnan, CFA

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1 Wasatch Global Opportunities Fund (WAGOX/WIGOX) Quarterly Comments from Lead Portfolio Managers JB Taylor and Ajay Krishnan, CFA Open to all investors Average Annual Total Returns For Periods Ended December 31, 2018 Quarter* 1 Year 3 Years 5 Years 10 Years Global Opportunities Fund Investor % -7.13% 6.91% 4.67% 13.88% Global Opportunities Fund Institutional % -6.86% 7.11% 4.79% 13.94% The inception of the Fund s Institutional Class shares was 2/1/2016. The differences in performance relative to the Fund s Investor Class for the longer periods are not as significant as the differences in performance for the shorter periods because the performance of the Institutional Class for the longer periods includes performance of the Fund s Investor Class using the actual expenses of the Investor Class without any adjustments. When the Institutional Class has its own performance history for the longer periods, the performance of the Fund s Institutional Class will differ more significantly from, and be higher than, the performance of the Fund s Investor Class because the expenses of the Institutional Class are lower than those of the Investor Class. MSCI ACWI Small Cap Index** % % 5.75% 3.56% 11.81% *Returns less than one year are not annualized. Data show past performance, which is not indicative of future performance. Current performance may be lower or higher than the data quoted. To obtain the most recent month-end performance data available, please visit The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Total Expense Ratio: Investor Class 1.59% / Institutional Class Gross: 1.93%, Net: 1.36% Total Annual Fund Operating Expenses include operating expenses, including the management fee, before any expense reimbursements by the Advisor. The Advisor has contractually agreed to limit certain expenses of the Fund s Investor Class to 1.75% and of the Fund s Institutional Class to 1.35% until at least 1/31/2019. See the prospectus for additional information regarding Fund expenses. Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

2 Performance for the Institutional Class prior to 2/1/2016 is based on the performance of the Investor Class. Performance of the Fund s Institutional Class prior to 2/1/2016 uses the actual expenses of the Fund s Investor Class without any adjustments. For any such period of time, the performance of the Fund s Institutional Class would have been substantially similar to, yet higher than, the performance of the Fund s Investor Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses. Investing in small and micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging and frontier markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investments in emerging markets are subject to the same risks as other foreign securities and may be subject to greater risks than investments in foreign countries with more established economies and securities markets. An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, containing this and other information, visit or call Please read the prospectus carefully before investing. OVERVIEW Reacting to rising short-term interest rates, a looming U.S.-China trade war and signs of a slowdown in parts of the global economy, investors pushed equity prices sharply lower in the final quarter of No sectors and few countries were spared. The Wasatch Global Opportunities Fund Investor Class declined %, performing in line with its benchmark, the MSCI All Country (AC) World Small Cap Index, which dropped %. Among sectors, industrials, health care and information technology subtracted the most from the Fund s return. But the Fund s holdings in information technology and health care, along with those in financials, declined less than their benchmark counterparts. One of the weakest-performing sectors in the Fund and the benchmark was industrials. The sector was particularly hard hit by a slowdown in cyclicals that has investors seeking more attractive alternatives. U.S. equities, representing nearly half of the Fund s assets, accounted for more than half of the Fund s decline during the quarter. On a country basis, the two other notable detractors were Japan and the United Kingdom. Eking out small gains were India and

3 China, while Taiwan posted a loss that was smaller than the losses of other countries in which the Fund was invested. In the U.S., the quarter opened with investors increasingly worried that rising short-term interest rates would put a damper on the equity markets. Their fears were confirmed when on December 19th, the Fed raised the federal-funds rate for the fourth time in 2018 to a range of 2.25% to 2.5%. Fed officials signaled that this could be the last rate hike for a while as their projections for economic growth and inflation in 2019 removed the urgency of repeated rate hikes. As for the trade dispute with China, little if any apparent progress was made, further unsettling the markets. Lack of progress was also largely to blame for the market downturn in the U.K., where Brexit negotiations seem at an impasse. The Fund s U.K. holdings, however, are mainly exporters and therefore, in the long run, are likely to be less affected by Brexit than many domestic-facing companies. Although the Japanese equity market also suffered a sharp decline during the quarter, we believe that Japan s investment environment remains extremely attractive. From an economic perspective, the currency has been relatively stable, domestic indicators such as wage inflation have continued to improve, corporate governance has been getting better, and domestic demand has continued to increase. For our Japanese investments, which are primarily domestic facing, earnings have been strong. That said, we did see volatile markets during the quarter with stock prices going down. We think this is little more than short-term weakness, the result of valuations getting too high with a resulting correction. We continue to believe that the Japanese companies we own have strong fundamentals with outstanding long-term growth potential. DETAILS OF THE QUARTER A number of the Fund s top contributors during the quarter are based in India, one of the few countries to experience market gains in the period. A large importer of oil, India s currency benefited from falling oil prices. Bajaj Finance Ltd. is a non-bank financial company offering a broad spectrum of lending services that include vehicle loans, mortgage loans, consumer loans and commercial loans. Shares of Bajaj Finance, which were indiscriminately punished in September, rebounded in October on an easing of the interest-rate pressures that had threatened to further increase the company s funding

4 costs. Longer term, we think the backing of Bajaj Group, the parent company, will provide Bajaj Finance with an advantage over weaker competitors that may find it more difficult to obtain funding. ICICI Lombard General Insurance Co. Ltd. is another Indian financial company that outperformed as falling oil prices eased inflationary pressures, allowing India s central bank to hold its policy interest rate unchanged. Vitasoy International Holdings Ltd., a Chinese company, offers soy milk, tofu, rice milk, tea, juices and related food-and-beverage products in over 40 countries. Another contributor in the fourth quarter, earnings per share rose 30% year-over-year in the company s most-recent reporting period on 22% revenue growth. Management cited improved manufacturing efficiency and favorable trends in commodity prices, particularly sugar and milk powder. Among detractors from Fund performance during the quarter, U.K.-based Metro Bank plc had the largest impact. We believe Metro Bank s customer-focused business model, similar to that of Commerce Bancorp in the U.S., represents a genuine long-term challenge to the U.K. s banking establishment. While larger banks are adjusting to Brexit by de-emphasizing their U.K. presence in favor of overseas operations, Metro Bank is building up its U.K. operations and service. During the quarter, the stock was beaten up amid Brexit-related economic uncertainty. Over the long-term, however, we think the bank has strong growth potential as it takes market share from competitors. U.S.-based HealthEquity, Inc. (HQY) was the second-largest detractor from performance in the fourth quarter. The company provides an online platform to manage a variety of health-care accounts, including Health Savings Accounts (HSAs), Health Reimbursement Arrangements and Flexible Spending Accounts. The company s stock price rose over 25% in the past 12 months, and significantly outperformed the health-care sector overall. Despite succumbing to the market s sell-off in December, we continue to view HealthEquity as well-positioned in the fast-growing HSA market. Another one of our leading contributors for the year, Ollie s Bargain Outlet Holdings, Inc. (OLLI), turned into a leading detractor during the fourth quarter as volatility took hold among retail stocks. Ollie s is an extreme-value retailer that acquires excess inventory of brand-name products in a wide variety of categories, then offers those products to customers who enjoy the bargain-priced, treasure hunt shopping experience. Despite

5 its sharp decline in November and December, we think the company has a strong growth strategy with the potential to operate hundreds more stores a few years from now. The fourth quarter downturn in Japan did not spare Nihon M&A Center, Inc., which is the leading provider of services for mergers and acquisitions to small businesses in Japan. The company has seen a slowdown in deal flow in recent quarters, which led to a sell-off in the share price. The company continues to hire and invest which will drive future earnings growth. We believe that demographic trends and a wave of consolidation in Japan is a strong secular driver for this business and the slowdown in deal flow is only temporary. (Current and future holdings are subject to risk.) OUTLOOK In the U.S., we ll be keeping a close eye on the Federal Reserve. While the companies we own continue to possess strong fundamentals, and the economy continues to grow, the fourth-quarter market downturn clearly demonstrated that higher short-term interest rates have begun to unnerve many investors. Turning attention to the U.K. and Europe, a March 29th deadline to resolve Brexit is looming and uncertainty remains high, though we remain optimistic regarding the prospects of our U.K. holdings. Our holdings tend to be more globally focused and therefore less dependent on the U.K. domestic economy. We are monitoring the fundamentals of the high quality opportunity set in the U.K. While the state of political affairs in the U.K. remains uncertain, we believe that markets tend to overshoot both on the positive and negative side and we are starting to see compelling opportunities. Our first overseas research trip in 2019 is to the U.K. Thank you for the opportunity to manage your assets. Sincerely, JB Taylor and Ajay Krishnan **The MSCI ACWI Small Cap Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets. This index is a free floatadjusted market capitalization index designed to measure the performance of small capitalization securities. You cannot invest directly in this or any index.

6 Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indexes. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an as is basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the MSCI Parties ) expressly disclaims all warranties (including, without limitation, any warranties or originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. ( CFA is a trademark owned by CFA Institute. The Wasatch Global Opportunities Fund s investment objective is long-term growth of capital. Brexit is an abbreviation for British exit, which refers to the June 23, 2016 referendum whereby British citizens voted to exit the European Union. The referendum roiled global markets, including currencies, causing the British pound to fall to its lowest level in decades. Earnings growth is a measure of growth in a company s net income over a specific period, often one year. Earnings per share or EPS is the portion of a company s profit allocated to each outstanding share of common stock. EPS growth rates help investors identify companies that are increasing or decreasing in profitability. The federal-funds rate is the interest rate at which private depository institutions (mostly banks) lend balances (federal funds) at the Federal Reserve to other depository institutions, usually overnight. It is the interest rate banks charge each other for loans. Valuation is the process of determining the current worth of an asset or company. Global Opportunities Fund Top 10 Holdings as of September 30, 2018 Percent of Security Name Net Assets Ollie s Bargain Outlet Holdings, Inc. 2.6% Ensign Group, Inc. (The) 2.4% Trex Co., Inc. 2.3% HealthEquity, Inc. 2.3% Ultimate Software, Inc. (The) 2.2% Euronet Worldwide, Inc. 2.2% Zendesk, Inc. 2.2% Medytox, Inc. (Korea) 2.1% Copart, Inc. 2.1% Metro Bank plc 2.1% Total 22.5% Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Fund or its Advisor. Current and future holdings are subject to risk. WAS /30/2019