-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mc2+85mgftdL9tYDoGf1E3BF1FzslBrjUNnJXPy9qXR07U6FoFBPeiJIuN43gKI4 Sjw4OeYXocAzDe62hah62A== 0000948221-02-000310.txt : 20020528 0000948221-02-000310.hdr.sgml : 20020527 20020528143706 ACCESSION NUMBER: 0000948221-02-000310 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASATCH FUNDS INC CENTRAL INDEX KEY: 0000806633 STATE OF INCORPORATION: UT FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04920 FILM NUMBER: 02663399 BUSINESS ADDRESS: STREET 1: 150 SOCIAL HALL AVENUE STREET 2: 4TH FLOOR CITY: SALT LAKE CITY STATE: UT ZIP: 84111 BUSINESS PHONE: 4142715885 MAIL ADDRESS: STREET 1: 150 SOCIAL HALL AVENUE STREET 2: 4TH FLOOR CITY: SALT LAKE CITY STATE: UT ZIP: 84111 FORMER COMPANY: FORMER CONFORMED NAME: WASATCH ADVISORS FUNDS INC DATE OF NAME CHANGE: 19920703 N-30D 1 wa8108.txt TABLE OF CONTENTS - ----------------- Letter from the Investment Advisor......................................... 1 Wasatch Equity Funds.................................................... 2 Wasatch-Hoisington U.S. Treasury Fund................................... 3 Ultra Growth Fund Portfolio Summary........................................ 4 Six Month Review........................................................ 4 Average Annual Total Returns & Five Largest Holdings.................... 5 Global Science & Technology Fund Portfolio Summary......................... 6 Six Month Review........................................................ 6 Average Annual Total Returns & Five Largest Holdings.................... 7 Small Cap Growth Fund Portfolio Summary.................................... 8 Six Month Review........................................................ 8 Average Annual Total Returns & Five Largest Holdings.................... 9 Core Growth Fund Portfolio Summary........................................ 10 Six Month Review....................................................... 10 Average Annual Total Returns & Five Largest Holdings................... 11 Small Cap Value Fund Portfolio Summary.................................... 12 Six Month Review....................................................... 12 Average Annual Total Returns & Five Largest Holdings................... 13 Micro Cap Fund Portfolio Summary.......................................... 14 Six Month Review....................................................... 14 Average Annual Total Returns & Five Largest Holdings................... 15 Wasatch-Hoisington U.S. Treasury Fund Portfolio Summary................... 16 Six Month Review....................................................... 16 Average Annual Total Returns & Five Largest Holdings/Maturity Date..... 17 Schedule of Investments................................................... 18 Statements of Assets and Liabilities...................................... 48 Statements of Operations.................................................. 50 Statements of Changes in Net Assets....................................... 52 Financial Highlights...................................................... 58 Notes to Financial Statements............................................. 72 Directors and Officers.................................................... 82 Semi-Annual Report WASATCH FUNDS, INC. 150 Social Hall Avenue Salt Lake City, Utah 84111 1 (800) 551-1700 LETTER FROM THE INVESTMENT ADVISOR March 31, 2002 - -------------------------------------------------------------------------------- DEAR SHAREHOLDERS: - ----------------- To all the new shareholders who have joined us within the past six months, we want to welcome you and thank you for choosing Wasatch Funds. To the rest of our shareholders, we appreciate your loyalty and the trust you have shown by staying with us over the years. As Wasatch continues to grow we appreciate more than ever the value of loyal, long-term shareholders. It has been our experience that the shareholders who stay with us the longest reap the greatest benefit from their association with Wasatch. As we have talked to many of these long term investors, the common thread is that they understand and are committed to Wasatch's long term investment philosophy. We would like you to know what you can expect as a Wasatch Funds' shareholder. You can expect each Fund Manager to be disciplined and follow a consistent, time-tested process for investing your assets. You can expect that as a team, we will share knowledge, continue to re-examine and improve processes and work to support each Fund's investment objectives and strategies. You can expect that we will leave no stone unturned in our effort to identify the kinds of investments that have the potential to help you reach your long term investment objectives. You can expect friendly, knowledgeable shareholder services representatives who are trained to provide information, answer questions and help you process transactions. You can expect publications that are designed to help you get below the surface and understand your Wasatch Funds' investments. Naturally, we understand that the biggest thing you expect from us is performance. However, you should understand that the short term performance of your investments is influenced by many factors over which Wasatch has virtually no ability to control and little ability to predict. Some of these factors include the strength or weakness of the economy, the rise or fall of interest rates, investors' perceptions about a company, industry or asset class, and breaking news stories. Any one or a combination of factors can cause an investment style to come into or go out of favor. For example, a few years ago large company stocks were so preferred that financial industry pundits were asking why any one would even bother investing in small company stocks. Then, the promise of a "New Economy" and the vision of the Internet as the dominant medium for commerce fueled skyrocketing stock prices for so-called dot.coms. In retrospect, investors learned that large company stocks were not invincible and small company stocks were not dead. They learned that many profitless dot.coms with weak business models Semi-Annual Report should not have commanded such high stock prices. Today, many dot.coms have gone out of business or fallen into obscurity taking with them the gains as well as the principal of many investors. The fact that Wasatch avoided this costly distraction ties right back to our disciplined investment process. In 2002, the budding economic recovery may blossom or it may wither. We think that to try to pick stocks based on such transient influences would be like trying to catch the wind. WASATCH EQUITY FUNDS - -------------------- For the Wasatch Equity Funds, our investment decisions are based on factors in which we have confidence. Our investment philosophy and process of finding opportunities for the Funds uses intensive, hands-on research that includes visiting companies and meeting with their top management. We believe that if we stick to these processes and invest based on our assessment of each company's characteristics, the performance of the Wasatch Equity Funds will take care of itself over the long run. For the six months ended March 31, 2002, all the Wasatch Equity Funds outperformed their benchmarks. Even more gratifying, the Funds outperformed their benchmarks for one, three, five and 10 years or since inception. While we are pleased with the results, we feel it is important to caution you not to read too much into past performance, especially given the unusual market environment we are living through. In the past six months alone, stock prices have been affected by the economic recession and confusing signs about a recovery, the war on terrorism, and worries about corporate profits and accounting practices. With the exception of the Wasatch Global Science & Technology Fund, the performance of the Wasatch Equity Funds over the last three years can be partly explained by a law of motion which roughly paraphrased states that, "A body set in motion tends to stay in motion until it is acted upon by an equal and opposite force." The performance of the Wasatch Equity Funds over the past six months was set in motion much earlier by the fall of the dot.coms when investors began to wake up to the types of companies in which the Wasatch Equity Funds were invested. This resulted in rising stock prices for many of the Funds' holdings and led to attention-getting performance that attracted record numbers of mutual fund investors to the Funds. Although the dot.com craze ended nearly two years ago, the Funds have, to some extent, been riding on the long coattails of that phenomenon ever since. For an in-depth discussion of the performance of each Wasatch Equity Fund, please see the portfolio summaries beginning on page 4. EQUITY FUNDS OUTLOOK - -------------------- Looking ahead, performance of the Wasatch Equity Funds is a blank slate to be written upon not only by our actions as thoughtful investors but by all the usual as well as unknown forces that can impact stock prices. While the investment styles of the Wasatch Equity Funds may remain in favor for some time, we know there will come a time when they will fall out of favor. We could worry about this but we prefer to do something more constructive like trying to find great companies. It is this persevering, stay-the-course discipline that served us and you so well through the dot.com decline and the following months. We are confident that if we adhere to our process and consistently follow each Fund's investment strategies for finding companies that have the potential to be Semi-Annual Report outstanding long-term investments, then the Fund or Funds in which you have invested will have the potential to continue contributing to your efforts to achieve long term investment objectives. Please refer to the Wasatch Funds prospectus dated January 31, 2002 for more information about each Fund's investment objectives and strategies. WASATCH-HOISINGTON U.S. TREASURY FUND - ------------------ For information about the performance and outlook of the U.S. Treasury Fund, please see the portfolio summary beginning on page 16. WORTH NOTING - ------------ The Wasatch Core Growth and Small Cap Value Funds, already closed to new investors, closed to new contributions from existing shareholders on March 28, 2002. The Small Cap Growth Fund is open to existing shareholders but closed to new investors. The Micro Cap Fund remains closed to existing shareholders and new investors. While we regret the inconvenience this may cause you, we felt closing was necessary to control assets flows so that we can continue to invest in small and micro cap companies which have played an important role in the performance of these Funds. We appreciate your patience and understand your desire to add to your investments but, the truth is we are looking out for your interest as an existing shareholder. We look forward to reopening these Funds when asset levels become manageable enough to permit additional investments. We are pleased to announce the launch of the Wasatch International Growth Fund, effective June 28, 2002. The Fund's lead manager will be Michael W. Gerding, CFA, who joined Wasatch Advisors, the investment advisor to Wasatch Funds, in April. Mr. Gerding has over 17 years of experience in international investing focused on small and mid-size foreign companies. The Fund seeks long-term growth of capital primarily through investments in the common stocks of foreign companies in at least three different developed countries. We expect to focus on smaller companies, although the Fund may invest in larger foreign companies and in U.S.-based companies of any size. To support this exciting new endeavor, Wasatch has formed an international research team of Chartered Financial Analysts (CFAs) that includes lead manager Mike Gerding, Wasatch veterans Karey Barker, Ajay Krishnan and me, along with Roger D. Edgley, a portfolio manager with over 12 years of experience in international investing, and Laura G. Vander Pol, a senior equities analyst with over six years of experience. We look forward to the capacity and depth the new team members bring to Wasatch. We expect their experience to benefit the other Equity Funds as well, since they can invest up to 15% of their assets in foreign securities. For a free prospectus containing more information about the Wasatch International Growth Fund's objective, strategies and risks as well as charges and expenses, please call us at 1 (800) 551-1700. Please read the prospectus carefully before you invest. We appreciate your investments with Wasatch Funds. We look forward to serving you in the coming years. Sincerely, /s/Samuel S. Stewart, Jr. Samuel S. Stewart, Jr. Chairman of the Board Semi-Annual Report ULTRA GROWTH FUND-PORTFOLIO SUMMARY - ----------------------------------- March 31, 2002 (PHOTO) Karey Barker, CFA--Lead Manager Ajay Krishnan, CFA--Co-Manager The Wasatch Ultra Growth Fund seeks to invest in rapidly growing companies in fast growing sectors of the economy. We pursue an aggressive investment strategy designed for long term investors who can tolerate greater risks and volatility. SIX MONTH REVIEW - ---------------- In the six months ended March 31, 2002, the Ultra Growth Fund's return of 30.47% was higher than the 23.69% return of the Russell 2000 Growth Index, a widely used measure for the performance of growth-oriented small company stocks. Over longer time periods, the Fund's returns have been much higher than the Index's. In the past 12 months, the Fund gained 45.60% compared to a gain of 4.95% for the Index. For three years, the Fund's average annual return was 23.69% compared to the Index's return of 0.16%. For five years, the Fund returned 20.57% compared to 4.76% for the Index. The Fund's outstanding returns, particularly over the last two years, can be directly attributed to the fact that we stayed on course and avoided the dot.com stocks that commanded unbelievably high prices before wiping out the returns of many investors. While the Fund seeks to invest in fast growing companies, we use a disciplined process to guide our investment decisions. Most dot.coms simply did not fit our criteria. We usually expect to find fast growing companies in the dynamic technology and health care sectors. As a result, the Fund has been overweighted in these sectors compared to the Russell 2000 Growth Index. In the past six months, the technology sector was the biggest contributor to the Fund's performance despite above average stock price volatility and weakness in the first quarter of 2002. Two companies did well in the highly competitive technology services industry largely because they have taken a unique approach that sidesteps much of the mainstream competition. Cognizant Technology Solutions Corp. offers cost advantages by utilizing a highly skilled staff in India. PEC Solutions, Inc. specializes in serving government agencies. Two companies were rewarded with higher stock prices despite weak prices of other companies in their industries. These were Verisity Ltd., a developer of technology and software to verify the designs of electronic systems, and UTStarcom, Inc., a company that provides communications equipment primarily to operators of telecommunications networks in China. The health care sector made only a small contribution to the Fund's performance but has been an important factor in the Fund's long run returns. The strong performance of the Fund's medical products and services companies was offset by weak stock prices of pharmaceutical and biotechnology companies. Semi-Annual Report ULTRA GROWTH FUND-PORTFOLIO SUMMARY - ----------------------------------- Accredo Health, Inc., a service provider for individuals with chronic diseases, was a top performer in this sector. Compared to the Russell 2000 Growth, the Fund was underweighted in the auto and transportation, consumer discretionary, financial services, materials and processing, producer durables and utilities sectors. Except for the auto and transportation, and utilities sectors, these sectors made solid positive contributions to the Fund's performance. In the consumer discretionary sector, the Fund's retail and business services holdings did well led by strong performance from Career Education Corp. and Wireless Facilities, Inc. While we typically do not find fast growing companies in the financial services sector, AmeriCredit Corp. fits our criteria and has been a strong performer. OUTLOOK - ------- We will continue pursue the Fund's strategy of investing in fast growing companies at prices we believe are rational when compared to their quality and long term growth potential. The challenge of the current environment is to find high quality companies with outstanding growth potential and rational stock prices. As a result, cash in the Fund is higher than we would like. We expect cash levels to come down as we find better investment opportunities. Thank you for you investment in the Ultra Growth Fund. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS SINCE INCEPTION - -------------------------------------------------------------------------------- WASATCH ULTRA GROWTH FUND 45.60% 20.57% 15.83% - -------------------------------------------------------------------------------- Russell 2000 Index 13.98% 9.52% 12.02% - -------------------------------------------------------------------------------- Russell 2000 Growth Index1 4.95% 4.76% 8.04% - -------------------------------------------------------------------------------- Russell 2500 Growth Index2 8.05% 7.74% 10.42% - -------------------------------------------------------------------------------- *Inception: August 16, 1992. Past performance is not indicative of future results. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 is widely regarded in the industry as accurately capturing the universe of small company stocks. 1 Assumes August 1, 1992 inception. The Russell 2000 Growth Index measures the performance of Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. 2 Assumes August 1, 1992 inception. The Russell 2500 Growth Index measures the performance of Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2500 Index is an unmanaged total return index of the smallest 2,500 companies in the Russell 3000 Index, as ranked by total market capitalization. You cannot invest in these indexes. - -------------------------------------------------------------------------------- FIVE LARGEST HOLDINGS - --------------------- 1. ACCREDO HEALTH, INC. 8% Services for individuals with chronic diseases. 2. UTSTARCOM, INC. 4% Communications equipment to operators of telecommunications networks. 3. WIRELESS FACILITIES, INC. 4% Telecommunications industry services. 4. SHIRE PHARMACEUTICALS GROUP 3% Prescription medications developer. 5. CABOT MICROELECTRONICS CORP. 3% Supplier of chemicals to the semiconductor industry. Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-PORTFOLIO SUMMARY - -------------------------------------------------- March 31, 2002 (PHOTO) Ajay Krishnan, CFA--Co-Manager with Karey Barker, CFA The Wasatch Global Science & Technology Fund seeks long term growth of capital by investing primarily in science and technology companies based in at least three countries including the United States. The Fund is designed for aggressive long term investors willing to accept greater risk for the potential of higher returns. SIX MONTH REVIEW - ---------------- In the past six months, the Global Science & Technology Fund gained 37.41% compared to a gain of 32.19% for the Russell 2000 Technology Index, a widely used measure for the performance of small technology stocks, and a gain of 23.33% for the technology-laden Nasdaq Composite Index. The Fund passed its first year with outstanding performance compared to these benchmarks. In the last 12 months, the Fund returned 37.92% while the Russell 2000 Technology Index lost 3.60% and the Nasdaq returned just 0.62%. The past six month period was really a tale of two quarters. In general, technology stocks rebounded strongly in the fourth quarter of 2001. The Fund benefited because we had taken advantage of earlier price weakness to invest in companies that we believe are among the leaders in their industries and have outstanding long term growth potential. These types of companies were rewarded in the fourth quarter. In the first quarter of 2002, technology stocks struggled as investors became increasingly concerned over corporate profits and accounting practices. In the past three months, the stock prices of many technology companies weakened and were more volatile than usual. The companies in which we have the most confidence are typically the largest positions in the Fund. In the past six months, we were gratified to see that most of the Fund's largest positions were among the top performers. Two companies did well in the highly competitive technology services industry largely because they have taken a unique approach that sidesteps much of the mainstream competition. Cognizant Technology Solutions Corp. offers cost advantages by utilizing a highly skilled staff in India. PEC Solutions, Inc. specializes in serving government agencies. Two companies were rewarded with higher stock prices despite weak prices of other companies in their industries. These were Verisity Ltd., a developer of technology and software to verify the designs of electronic systems, and UTStarcom, Inc., a company that provides communications equipment primarily to operators of telecommunications networks in China. Cabot Microelectronics Corp., a supplier of chemicals to the semiconductor industry, was also a strong performer. An example of how dramatically things can change from quarter to quarter was Polycom, Inc. The company's stock price surged in the fourth quarter Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-PORTFOLIO SUMMARY - -------------------------------------------------- as investors anticipated rising demand for video conferencing products as a way to avoid air travel. In the first quarter they took what we believe is a more realistic view of Polycom's growth opportunity and the stock retreated. The stock prices of pharmaceutical and biotechnology companies generally were weak over the past six months. This was reflected in the Fund as a number of holdings in these industries suffered stock price declines. On the other hand, the Fund's largest holding, Accredo Health, Inc., made a strong positive contribution to performance. OUTLOOK - ------- There is no shortage of companies that meet our strict standards for quality and growth potential. The challenge is to invest in them at prices we feel are rational. We are working hard to identify potential new investments and are keeping close tabs on the companies we know well so that we will be prepared to invest as opportunities are presented. Thank you for the confidence you have shown by investing in the Fund. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS SINCE INCEPTION - -------------------------------------------------------------------------------- WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND 37.92% N/A 7.87% - -------------------------------------------------------------------------------- Russell 2000 Technology Index -3.60% N/A -26.50% - -------------------------------------------------------------------------------- Nasdaq Composite Index 0.62% N/A -23.77% - -------------------------------------------------------------------------------- *Inception:December 19, 2000. Past performance is not indicative of future results. The Russell 2000 Technology Index is a capitalization-weighted index of companies that serve the electronics and computer industries or that manufacture products based on the latest applied science. The Nasdaq Composite Index is unmanaged and measures all Nasdaq domestic and non-U.S. based common stocks listed on The Nasdaq Stock Market. The Index is market-value weighted. This means each company's security affects the Index in proportion to its market value. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Due to their number and size, technology stocks tend to dominate the direction of the Index. You cannot invest in these indexes. FIVE LARGEST HOLDINGS* - ---------------------- 1. ACCREDO HEALTH, INC. 9% Services for individuals with chronic diseases. 3. UTSTARCOM, INC. 5% Communications equipment to operators of telecommunications networks. (China) 3. CABOT MICROELECTRONICS CORP. 5% Supplier of chemicals to the semiconductor industry. 4. WIRELESS FACILITIES, INC. 4% Telecommunications industry services. 5. COGNIZANT TECHNOLOGY SOLUTIONS CORP. 4% Professional technology services. *Unless otherwise noted, companies are considered to be United States' companies. Companies denoted as foreign may include companies headquartered, incorporated, doing a majority of business, having substantial revenues or the majority of employees in a country other than the United States. Semi-Annual Report SMALL CAP GROWTH FUND-PORTFOLIO SUMMARY - --------------------------------------- March 31, 2002 (PHOTO) Jeff Cardon, CFA--Lead Manager The Small Cap Growth Fund is best suited for long term investors who can tolerate the greater risks and volatility that are inherent with investments in small company stocks. SIX MONTH REVIEW - ---------------- The Small Cap Growth Fund's gain of 26.63% in the six months ended March 31, 2002 was slightly better than the 25.91% gain of the Russell 2000 Index, a widely used measure for the performance of small company stocks. The Fund's returns over longer time periods greatly exceeded those of the Index. In the past 12 months the Fund gained 33.73% compared to 13.98% for the Index. The Fund's average annual total returns for three years, five years and 10 years were 27.21%, 22.81% and 16.42%, respectively. The Index's returns over the same periods were 9.84%, 9.52% and 11.14%, respectively. We attribute the Fund's strong long term performance to our disciplined process for investing in growing small companies. Our intensive fundamental research is aimed at uncovering companies that have the potential to grow faster than the average large company. Our focus on investing in growing companies has led us to overweight or underweight the Fund in certain sectors compared to the Russell 2000 Index. We typically expect to be overweighted in sectors where we have had the best success finding growing companies. In recent years, these have been the technology, health care and consumer discretionary sectors. The Fund typically will be underweighted in sectors where we find few companies that meet our earnings growth targets. These sectors typically include materials and processing, producer durables, utilities, and energy. In the past six months, the Fund's best performing sector was technology where the Fund's holdings did better than those of the Index. Most of the strong performance came in the fourth quarter of 2001. Since January, technology stocks generally have struggled and many holdings have endured above average stock price volatility. Two holdings were noteworthy performers. The stock price of Verisity Ltd., a company that develops technology and software to verify the designs of electronic systems, increased when many software companies suffered stock price declines. PEC Solutions, Inc., a provider of professional technology services, was also rewarded with a stock price increase. Consumer discretionary was the Fund's next best performing sector due to the stock price appreciation of many retail and business services holdings. Two women's apparel retailers, Chico's FAS, Inc. and Christopher & Banks Corp. were among the top performers. In the health care sector, the stock prices of medical products and services companies generally advanced while those of pharmaceutical and biotechnology-related companies generally retreated. This was true in the Fund and Semi-Annual Report SMALL CAP GROWTH FUND-PORTFOLIO SUMMARY - --------------------------------------- the Index. A number of strong performers in the Fund led this sector to make a much greater contribution to performance than that of the Index. The utilities sector held back the performance of the Fund due to stock price declines of wireless telecommunications service providers. These stocks generally fell on worries over companies' weak balance sheets caused primarily by continued spending to build out networks and upgrade technology in the face of a slow down in subscriber growth. While we believe these concerns are overblown, we are not compelled to invest in rapidly declining stocks. Instead, we have been incremental buyers of Triton PCS Holdings, Inc., our favorite name in wireless. OUTLOOK - ------- While weak corporate profits and lack of earnings growth have been a major cause of concern among investors, we see signs pointing to acceleration in earnings growth for many of the Fund's holdings. Over the Fund's history, earnings growth has been a good long run predictor of stock price performance. We are committed to finding and investing in small companies with outstanding long term growth potential. We believe our experience and discipline in finding these great companies will help you along the road to achieving your long term investment objectives. Thanks again for putting your trust in Wasatch. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS 10 YEARS - --------------------------------------------------------------------------- WASATCH SMALL CAP GROWTH FUND 33.73% 22.81% 16.42% - --------------------------------------------------------------------------- Russell 2000 Index 13.98% 9.52% 11.14% - --------------------------------------------------------------------------- Past performance is not indicative of future results. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest in the Index. FIVE LARGEST HOLDINGS - --------------------- 1. ORTHODONTIC CENTERS OF AMERICA, INC. 4% Practice management for orthodontists. 2. O'REILLY AUTOMOTIVE, INC. 3% Automotive parts retailer/distributor. 3. POLYCOM, INC. 3% Products for broadband audio and video communications. 4. EXPRESS SCRIPTS, INC., CLASS A 3% Pharmacy benefits manager. 5. CHRISTOPHER & Banks Corp. 3% Women's specialty apparel retailer. Semi-Annual Report CORE GROWTH FUND-PORTFOLIO SUMMARY - ---------------------------------- March 31, 2002 (PHOTO) Samuel S. Stewart, Jr., PhD, CFA-- Lead Manager, JB Taylor--Co-Manager The Wasatch Core Growth Fund seeks long term growth of capital through investments in stable companies that we believe are high quality and have the potential to grow steadily for long periods of time. In addition, we seek to invest in these companies at reasonable prices. The Core Growth Fund is the most conservative of the Wasatch Equity Funds. However, the Fund will experience volatility and is best suited for long term investors. SIX MONTH REVIEW - ---------------- In the six months ended March 31, 2002, the Core Growth Fund returned 29.08%. Over the same period, the Russell 2000 Index, a widely used measure for the performance of small company stocks, returned 25.91%. The Fund has significantly outperformed the Index over longer time periods. In the past 12 months, the Fund returned 40.71% compared to the Index's return of 13.98%. The Fund's average annual return for three years was 35.04% while the Index returned just 9.84%. For five years the Fund returned 25.04% compared to the Index's return of 9.52%. For 10 years the Fund returned 19.12% while the Index returned 11.14%. The Fund's long term track record is the result of our commitment to disciplined investing. We have consistently followed our strategy of investing in companies with stable growth potential throughout the Fund's 15 year history. Over the past couple of years the Fund has done exceptionally well and has benefited from a market environment that favored our investment style. Consumer discretionary was the Fund's best performing sector over the last six months. The Fund was overweighted in this sector compared to the Russell 2000 and our holdings outperformed. A large position in Rent-A-Center, Inc. contributed significantly to the performance of this sector. In general, the Fund's business services and retail holdings were strong performers. The Fund was overweighted in the financial services sector compared to the Russell 2000 and our holdings outperformed those of the Index. Large positions in AmeriCredit Corp., a sub prime automobile lender, and United Rentals, Inc., a company that rents mid to heavy equipment, drove the performance of this sector. Smaller holdings also made positive contributions. Among them were mortgage and health care real estate investment trusts (REITs). On the other hand, our consumer finance holdings were affected by declining stock prices related to concerns over consumer debt levels. Health care is another sector where the Fund was overweighted and outperformed the Index. The Fund's health care holdings are primarily medical products and services companies that are benefiting from increasing demand by an aging U.S. population. Orthodontic Centers of America, Inc., a provider of practice management ser- Semi-Annual Report CORE GROWTH FUND-PORTFOLIO SUMMARY - ---------------------------------- vices for orthodontists, made the biggest contribution to the performance of the health care sector. While the technology sector made a positive contribution to the performance of the Fund and the Index, the Fund's low weighting kept it from realizing the full benefit of this sector's performance. We sold two technology holdings to lock in profits from strong stock price appreciation, further reducing our weighting in this sector. Compared to the Russell 2000, the Fund was underweighted in the auto and transportation, utilities, producer durables, and materials and processing sectors. With the exception of auto and transportation, these sectors did not significantly add to or detract from the Fund's performance. OUTLOOK - ------- The Core Growth Fund has enjoyed a long stretch of above average performance. Given the many variables that affect performance, it is impossible to predict whether the Fund's high returns will continue. We are not in the business of trying to make predictions. Our efforts are focused on finding and investing in companies that we believe can grow consistently over many years. We believe these types of investments have the potential to serve you well as you move toward achieving your long term investment objectives. Thank you for your investment in the Wasatch Core Growth Fund. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS 10 YEARS - --------------------------------------------------------------------------- WASATCH CORE GROWTH FUND 40.71% 25.04% 19.12% - --------------------------------------------------------------------------- Russell 2000 Index 13.98% 9.52% 11.14% - --------------------------------------------------------------------------- Past performance is not indicative of future results. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest in the Index. FIVE LARGEST HOLDINGS - --------------------- 1. RENT-A-CENTER, INC. 9% Rent-to-own store operator. 2. AMERICREDIT CORP. 7% Sub prime automobile lender. 3. ORTHODONTIC CENTERS OF AMERICA, INC. 5% Practice management for orthodontists. 4. UNITED RENTALS, INC. 4% Mid to heavy equipment rentals. 5. PEDIATRIX MEDICAL GROUP INC. 4% National network of neonatalogists. Semi-Annual Report SMALL CAP VALUE FUND-PORTFOLIO SUMMARY - -------------------------------------- March 31, 2002 (PHOTO) Jim Larkins, MBA--Co-Manager with Sam Stewart, PhD, CFA and John Mazanec, MBA The Small Cap Value Fund seeks long term growth of capital through investments in companies with market capitalizations of less than $1.5 billion whose stocks are selling at a substantial discount to what we believe is the company's underlying value. The Fund is designed for long term investors who have assessed their tolerance for risk and volatility. SIX MONTH REVIEW - ---------------- The Small Cap Value Fund's gain of 28.06% over the past six months was just slightly better than the 27.90% gain of the Russell 2000 Value Index, a widely used measure for the performance of value-oriented small company stocks. The Fund's average annual return for three years of 41.36% was more than double the 18.74% return of the Russell 2000 Value. Since inception, the Fund's gain of 26.67% far surpassed the Index's gain of 8.98% over the same period. In general throughout the last six months, value stocks have continued to outperform growth stocks. During this period, many investors were attracted to value stocks as growth stocks were typically more sensitive to news about corporate profit warnings and concerns over accounting practices. The Fund has done well in this environment. Many of the undervalued companies that we felt were "undiscovered gems" attracted their share of attention. Other companies that we call "fallen angels" also gained recognition as they resolved issues that previously held back their stock prices. Fallen angels are companies with a history of strong earnings growth that have developed problems causing growth to falter. We invest in "fallen angels" when we have identified potential catalysts such as the introduction of new products or services that we feel will lead to increasing earnings and higher stock prices. The Fund's best performing sector was consumer discretionary where we were overweighted compared to the Russell 2000 Value Index. Our holdings, primarily retailers and business services companies, did much better than those of the Index. Retail stocks generally picked up as more signs pointed to an economic recovery. One of the Fund's largest positions, Rent-A-Center, Inc., a rent-to-own store operator, was a strong performer. Other top performers included Whitehall Jewellers, Inc., a fine jewelry retailer, and The Cato Corporation, a women's apparel retailer. The Fund's weighting in the financial services sector was about the same as the Index. This sector's strong positive contribution to performance was led by two significant positions. AmeriCredit Corp., a sub prime automobile lender, and United Rentals, Inc., a company that rents mid to heavy equipment, benefited from the improving economic outlook. Some of the Fund's consumer finance holdings suffered stock price declines as investors were unsure about Semi-Annual Report SMALL CAP VALUE FUND-PORTFOLIO SUMMARY - -------------------------------------- whether there has been an economic upturn for companies in that industry. We added several real estate investment trusts (REITs) to the Fund. These companies appear to us to be undervalued in light of their dividend yields and favorable risk/return profiles.Health care REITs have been strong performers in the past six months. Frontier Airlines, Inc., a regional passenger carrier, led the Fund's auto and transportation sector to outperform the Index and add to overall performance. The Fund has few technology holdings because their stock prices generally have been higher than we were willing to pay. One exception is Excel Technology, Inc., a company that produces laser systems and electro-optical components for industry, science and medicine. We are pleased to see this undiscovered gem starting to get the recognition we think it deserves. OUTLOOK - ------- The search for undervalued small companies is more challenging given the attention that has been focused on this asset class. Nevertheless, we believe our investment process is well suited to this challenge and that with diligent effort we can continue to find small companies with the potential to be outstanding long term investments. We look forward to working with you as you work toward your financial goals. We appreciate your investment in the Small Cap Value Fund. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS SINCE INCEPTION - ------------------------------------------------------------------------------- WASATCH SMALL CAP VALUE FUND 42.46% N/A 26.67% - ------------------------------------------------------------------------------- Russell 2000 Value Index 23.74% N/A 8.98% - ------------------------------------------------------------------------------- *Inception: December 17, 1997. Past performance is not indicative of future results. The Russell 2000 Value Index is an unmanaged total return index that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest in the Index. FIVE LARGEST HOLDINGS - --------------------- 1. AMERICREDIT CORP. 6% Sub prime automobile lender. 2. UNITED RENTALS, INC. 4% Mid to heavy equipment rentals. 3. METRIS COMPANIES INC. 4% Direct marketer of consumer credit products. 4. RENT-A-CENTER, INC. 4% Rent-to-own store operator. 5. BALLY TOTAL FITNESS HOLDING CORP. 3% Health club operator. Semi-Annual Report MICRO CAP FUND-PORTFOLIO SUMMARY - -------------------------------- March 31, 2002 (PHOTO) Robert Gardiner, CFA--Lead Manager The Micro Cap Fund seeks long term growth of capital through investments in growing companies with market capitalizations of less than $750 million at the time of initial purchase. The Fund is best suited for long term investors who can tolerate the greater risks and volatility that are inherent with investments in micro cap stocks. SIX MONTH REVIEW - ---------------- In the six months ended March 31, 2002, the Micro Cap Fund gained 32.44% compared to a gain of 25.91% for the Russell 2000 Index, a widely used measure for the performance of small company stocks. Over longer time periods, the Fund has outperformed the Russell 2000 by much wider margins. The Fund gained 51.48% in the past 12 months compared to a gain of 13.98% for the Index. The Fund's average annual total return for five years was 36.91% compared to 9.52% for the Index. Since inception, the Fund gained 33.86% compared to a gain of 10.47% for the Index. These results show that the Fund has enjoyed an exceptional stretch of high performance. Over the past six months, the strong stock price performance of companies in which the Fund invested drove every sector represented in the Fund to a positive return. We attribute this to our success at finding great companies that were rewarded with higher stock prices. Surprisingly, the volatile technology sector was the biggest contributor to the Fund's performance in the last six months. The Fund was overweighted compared to the Index and our holdings outperformed. The best performer due to position size and stock price increase was Integrated Circuit Systems, Inc. In the past three months technology stocks have struggled. Many companies that make software for computer systems and services, and others with ties to telecommunications have suffered stock price declines. The Fund was overweighted in health care compared to the Index and our holdings did significantly better. One large position, Young Innovations, Inc., was our top performer in health care. Over the past three months the stocks of medical products and services companies generally have done better than those of biotechnology and pharmaceutical companies. Our outlook for growth in this sector is favorable due to an aging U.S. population that is increasing its demands upon the health care system. The Fund had a little heavier weighting in the consumer discretionary sector than the Index. Strong performance in this sector was led by Resources Connection, Inc. and FTI Consulting, Inc., consulting firms whose stock prices have gone up in anticipation of turmoil within the accounting industry. The Fund's dramatically lower weighting in the financial services sector held back the performance of this sector relative to the Index. Knight Transportation, Inc., a long Semi-Annual Report MICRO CAP FUND-PORTFOLIO SUMMARY - -------------------------------- haul trucking and logistics services company, continued to be a strong performer in the Fund's auto and transportation sector, where we were slightly overweighted compared to the Index. The Fund was underweighted in the materials and processing, energy and producer durables sectors. A noteworthy performer in the materials and processing sector was Cabot Microelectronics Corporation. OUTLOOK - ------- Given the magnitude of the Fund's performance since inception, we believe present conditions make it important for us to temper your expectations. Since the fall of high-priced dot.com stocks, investors have come around to the types of companies that the Fund has invested in all along. As a result, the stock prices of companies we are attracted to are higher than they were a few years ago. That means investing at reasonable prices has become more difficult, and in the short term, makes it harder to achieve the returns to which you have become accustomed. As always, we will strive to invest your assets in micro cap companies that we believe have the potential to bring you closer to achieving your long term investment objectives. Thank you for investing in the Micro Cap Fund. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS SINCE INCEPTION - ------------------------------------------------------------------------------ WASATCH MICRO CAP FUND 51.48% 36.91% 33.86% - ------------------------------------------------------------------------------ Russell 2000 Index 13.98% 9.52% 10.47% - ------------------------------------------------------------------------------ *Inception: June 19, 1995. Past performance is not indicative of future results. The Russell 2000 Index is an unmanaged total return index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Russell 2000 is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest in the Index. FIVE LARGEST HOLDINGS - --------------------- 1. AMSURG CORP. 3% Outpatient surgery centers. 2. INTEGRATED CIRCUIT SYSTEMS, INC. 3% Timing devices for electronic systems. 3. CABOT MICROELECTRONICS CORP. 3% Supplier of chemicals to the semiconductor industry. 4. RESOURCES CONNECTION, INC. 3% Outsource provider of professional business services. 5. CORVEL CORPORATION 3% Case management and cost containment services for workers' compensation. Semi-Annual Report WASATCH-HOISINGTON U.S. TREASURY FUND-PORTFOLIO SUMMARY - ------------------------------------------------------- March 31, 2002 (PHOGO) Van R. Hoisington--Lead Manager The U.S. Treasury Fund seeks to provide a rate of return that exceeds the rate of inflation over a business cycle by investing in U.S. Treasury securities with an emphasis on both income and capital appreciation. SIX MONTH REVIEW - ---------------- The long term performance of your Fund remains excellent. For the five years ended March 31, 2002, the 8.11% average annual return of your Fund was 0.54% above the Lehman Brothers Aggregate Index. The Fund had disappointing results for the past six months, as Treasury bond yields rose despite a fall in inflation. For example, the broadest rate of inflation fell to 1.9% in the fourth quarter of 2001 versus the fourth quarter of 2000, down from a 2.1% rate of increase in the year earlier period, and below the 131-year average. Your Fund holds U.S. Treasury securities, the highest quality fixed income investments. These securities pose virtually no credit risk. When inflation is moderating, our strategy is to invest the Fund's assets in U.S. Treasury bonds with maturities longer than 20 years. Generally, the Treasury bond yield moves in the direction of the rate of inflation. It moved in the opposite direction during the last six months. Long term Treasury bond yields rose to 5.82% at the end of March, compared with 5.41% six months ago. This resulted in a decrease in the market value of the Fund's portfolio and a negative 4.50% six month return. Over this same period, the Lehman Brothers Aggregate, with much shorter average maturities and higher yielding, but somewhat riskier investments, posted a positive return of 0.13%. The rise in yields reflected investors' views that a strong start to the economy in the first quarter portends a reversal of the low inflationary environment. We believe this strong growth was caused by transitory factors that are now reversing. Record income tax rebates are now paid out, and will reverse to payments in the second quarter. Inventories are now more in line with sales. Consumers received additional funds from refinancing their mortgages at low rates last year, but with higher rates this has also reversed. Some believe the first quarter indicates above trend growth for the rest of 2002 because there was no recession, or a very mild one. Admittedly, real gross domestic product (GDP) declined only one quarter last year. However, the National Bureau of Economic Research, the final arbiter of dating U.S. business cycles, does not use real GDP as its litmus test. Instead, it looks at a broader array of economic indicators. Nominal GDP or top line growth shows that the recession of 2001 was a real barn burner. Consumers spend nominal dollars from their wallets and checking accounts, not real dollars. In the fourth quarter, the year-over-year change in nominal GDP was just 2.3%, Semi-Annual Report WASATCH-HOISINGTON U.S. TREASURY FUND-PORTFOLIO SUMMARY - ------------------------------------------------------- the slowest rate of increase in 40 years. The extreme weakness in nominal GDP explains why S&P 500r earnings per share fell by a record setting 50% in 2001 and, at the low, the percentage decline in household jobs was the worst since the deep recession of 1973 - 75, when nearly 1.8 million U.S. citizens lost their jobs. Consumers and businesses have to repay a portion of their record debt levels, and as many borrowers face restricted and more costly debt, the economy will slow. OUTLOOK - ------- Whether the current economic strength fades is not as important to bond investors as the fact that during and immediately after the nine post World War II recessions, the inflation rate has always fallen, usually by an average of 3%. Reflecting this drop in inflation, Treasury bond yields historically do not reach their lowest levels until several years into the recovery. Since Treasury bond yields move proportionately with inflation over time, we believe the Fund's investments in long term Treasury bonds offer outstanding upside potential to patient long term investors in this period of low inflation. AVERAGE ANNUAL TOTAL RETURNS - ---------------------------- 1 YEAR 5 YEARS 10 YEARS - --------------------------------------------------------------------------- WASATCH-HOISINGTON U.S. TREASURY FUND -0.36% 8.11% 6.75% - --------------------------------------------------------------------------- Lehman Bros. Aggregate Index 5.35% 7.57% 7.38% - --------------------------------------------------------------------------- Past performance is not indicative of future results. The Lehman Brothers Aggregate Index covers the U.S. investment grade fixed rate bond market, including government and corporate securities, agency mortgage pass-through securities, and asset-backed securities. To be included in the index the security must meet the following criteria: must have at least one year to final maturity, regardless of call features; must have at least $100 million par amount outstanding; must be rated investment grade or better by Moody's Investors Service, Standard & Poor's, or Fitch Investor's Service; must be fixed rate, although it can carry a coupon that steps up or changes to a predetermined schedule; must be dollar-denominated and nonconvertible. All corporate and asset-backed securities must be registered with the SEC and must be publicly issued. You cannot invest in the Index. FIVE LARGEST HOLDINGS/ MATURITY DATE - ---------------------- 1. U.S. TREASURY STRIP 21% 11/15/2021 2. U.S. TREASURY BOND 17% 11/15/2024 3. U.S. TREASURY BOND 15% 2/15/2031 4. U.S. TREASURY BOND 8% 8/15/2027 5. U.S. TREASURY BOND 8% 11/15/2027 Semi-Annual Report ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS - ----------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- COMMON AND PREFERRED STOCKS 84.5% --------------------------------- BIOTECHNOLOGY RESEARCH AND PRODUCTION 1.3% 62,475 Diversa Corporation* $ 793,432 109,675 Taro Pharmaceutical Industries Ltd.* 3,109,286 ------------- 3,902,718 ------------- CHEMICALS 3.0% 136,675 Cabot Microelectronics Corporation* 9,246,064 ------------- COMMUNICATIONS TECHNOLOGY 6.0% 59,800 Catapult Communications Corporation* 1,509,352 109,650 Metro-Optix, Inc., Class B*+ 226,975 215,000 Metro-Optix, Inc., Class C*+ 445,050 492,925 Sirenza Microdevices, Inc.* 2,671,653 510,850 UTStarcom, Inc.* 13,399,596 ------------- 18,252,626 ------------- COMMUNICATIONS AND MEDIA 0.1% 86,175 LCC International, Inc.* 416,225 ------------- COMPUTER SERVICES SOFTWARE AND SYSTEMS 13.0% 102,575 Amdocs Limited* 2,733,624 116,875 Check Point Software Technologies Ltd.* 3,553,000 209,275 Cognizant Technology Solutions Corporation* 8,810,478 35,075 Manhattan Associates, Inc.* 1,336,357 295,500 National Information Consortium, Inc.* 1,152,450 94,375 Numerical Technologies, Inc.* 1,275,006 222,325 NYFIX, Inc.* 3,325,982 547,800 OPNET Technologies, Inc.* 5,220,534 360,828 PEC Solutions, Inc.* 8,872,761 58,725 Peregrine Systems, Inc.* 559,062 30,000 Precise Software Solutions Ltd.* 698,700 149,300 SeeBeyond Technology Corporation* 1,142,145 48,600 SmartForce Public Limited Company ADR* 510,300 92,500 VitalWorks Inc.* 541,125 ------------- 39,731,524 ------------- COMPUTER TECHNOLOGY 3.7% 246,750 PDF Solutions, Inc.* 4,231,763 310,209 Verisity Ltd.* 6,957,988 ------------- 11,189,751 ------------- Semi-Annual Report ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS - ----------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- DRUGS AND PHARMACEUTICALS 7.1% 138,100 American Pharmaceutical Partners, Inc.* $ 2,048,023 224,975 Atrix Laboratories, Inc.* 5,122,681 50,125 Neose Technologies, Inc.* 1,606,506 387,600 Northwest Biotherapeutics, Inc.* 1,492,260 29,000 Northwest Biotherapeutics, Inc., Series D*+ 99,980 132,450 Novavax, Inc.* 1,515,228 408,144 Shire Pharmaceuticals Group Plc* 9,579,548 ------------- 21,464,226 ------------- EDUCATION SERVICES 1.8% 140,875 Career Education Corporation* 5,578,650 ------------- ELECTRICAL AND ELECTRONICS 1.1% 381,575 DDi Corp.* 3,254,835 ------------- ELECTRONICS 1.7% 143,350 Microtune, Inc.* 2,059,939 150,875 Sanmina-SCI Corporation* 1,772,781 68,100 Supertex, Inc.* 1,447,806 ------------- 5,280,526 ------------- ELECTRONICS--SEMICONDUCTORS/COMPONENTS 7.2% 57,275 AXT, Inc.* 612,842 255,025 Integrated Circuit Systems, Inc.* 5,202,510 167,300 LogicVision, Inc.* 1,790,110 679,225 Monolithic System Technology, Inc.* 7,811,088 29,500 Nassda Corporation* 448,400 273,275 O2Micro International Limited* 4,774,114 17,875 Silicon-On-Insulator Technologies* 374,403 124,000 SiRF Technology Holdings, Series H*+ 806,000 ------------- 21,819,467 ------------- FINANCE--SMALL LOAN 1.9% 155,625 AmeriCredit Corp.* 5,912,194 ------------- FINANCIAL--MISCELLANEOUS 0.2% 13,225 Triad Guaranty Inc.* 574,891 ------------- HEALTH CARE FACILITIES 0.3% 303,700 TLC Laser Eye Centers Inc.* 1,023,469 ------------- Semi-Annual Report ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS - ----------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- HEALTH CARE MANAGEMENT SERVICES 5.9% 204,275 AmeriPath, Inc.* $ 5,474,570 156,755 AmSurg Corp.* 4,265,304 200,550 Pediatrix Medical Group Inc.* 8,174,418 ------------- 17,914,292 ------------- HEALTH CARE SERVICES 17.1% 426,587 Accredo Health, Incorporated* 24,430,637 191,550 AMN Healthcare Services, Inc.* 5,152,695 105,000 Cross Country, Inc.* 2,835,000 104,450 Express Scripts, Inc., Class A* 6,015,276 219,325 Odyssey Healthcare, Inc.* 5,858,171 240,650 Province Healthcare Company* 7,645,451 ------------- 51,937,230 ------------- MACHINERY--SPECIALTY 0.5% 63,700 ASML Holding N.V.* 1,616,069 ------------- MEDICAL AND DENTAL INSTRUMENTS AND SUPPLIES 0.3% 183,150 Align Technology, Inc.* 970,695 ------------- MISCELLANEOUS MATERIALS AND COMMODITIES 1.6% 239,600 Symyx Technologies* 4,947,740 ------------- PRODUCTION TECHNOLOGY EQUIPMENT 0.1% 8,900 Rudolph Technologies, Inc.* 384,124 ------------- RETAIL 2.0% 137,275 Chico's FAS, Inc.* 4,626,168 46,513 Christopher & Banks Corporation* 1,527,952 ------------- 6,154,120 ------------- SCIENTIFIC EQUIPMENT AND SUPPLIERS 0.8% 46,100 Biacore International AB ADR* 1,129,450 248,075 ChromaVision Medical Systems, Inc.* 1,215,567 ------------- 2,345,017 ------------- SERVICES--COMMERCIAL 5.0% 44,000 IQ4HIRE, Inc.*+ 440 357,619 Management Network Group, Inc. (The)* 1,963,328 88,125 Resources Connection, Inc.* 2,549,456 1,795,694 Wireless Facilities, Inc.* 10,774,164 ------------- 15,287,388 ------------- Semi-Annual Report ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS - ----------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- TELECOMMUNICATIONS EQUIPMENT 2.0% 249,625 Polycom, Inc.* $ 6,140,775 ------------- UTILITIES--TELECOMMUNICATIONS 0.8% 270,075 Leap Wireless International, Inc.* 2,274,032 ------------- TOTAL COMMON AND PREFERRED STOCKS (COST $238,819,451) 257,618,648 ------------- Number of Contracts Value - -------------------------------------------------------------------------------- CALL OPTIONS PURCHASED 0.4% --------------------------- 890 AmeriPath, Inc., expiring 9/21/02, exercise price $15 $ 1,068,000 ------------- TOTAL CALL OPTIONS PURCHASED (COST $1,215,570) 1,068,000 ------------- Principal Amount Value - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 17.5% ---------------------------- (Variable Rate Demand Deposits) $53,296,842 UMB Bank Money Market Fiduciary $ 53,296,842 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $53,296,842) 54,364,842 ------------- TOTAL INVESTMENTS (COST $293,331,863) 102.4% 311,983,490 LIABILITIES LESS OTHER ASSETS (2.4)% (7,320,525) ------------- NET ASSETS 100.0% $304,662,965 ============= *Non-income producing. +Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ++Affiliated company (see Note 8). See notes to financial statements. Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- COMMON AND PREFERRED STOCKS 92.3% --------------------------------- Unless otherwise noted, companies are considered to be United States' companies. Companies denoted as foreign may include companies headquartered, incorporated, doing a majority of business, having substantial revenues or the majority of employees in a country other than the United States. BIOTECHNOLOGY RESEARCH AND PRODUCTION 1.8% 15,575 Diversa Corporation* $ 197,803 15,050 Taro Pharmaceutical Industries Ltd.* 426,668 ------------- 624,471 ------------- CHEMICALS 4.7% 23,700 Cabot Microelectronics Corporation* 1,603,305 ------------- COMMUNICATIONS AND MEDIA 0.4% 27,375 LCC International, Inc.* 132,221 ------------- COMMUNICATIONS TECHNOLOGY 8.4% 18,300 Catapult Communications Corporation* 461,892 84,000 Metro-Optix, Inc., Class C*+ 173,880 70,850 Sirenza Microdevices, Inc.* 384,007 68,850 UTStarcom, Inc.* (China) 1,805,935 ------------- 2,825,714 ------------- COMPUTER SERVICES SOFTWARE AND SYSTEMS 19.0% 9,325 Amdocs Limited* (United Kingdom) 248,511 20,075 Check Point Software Technologies Ltd.* (Israel) 610,280 31,025 Cognizant Technology Solutions Corporation* (India) 1,306,152 8,225 Manhattan Associates, Inc.* 313,373 102,100 National Information Consortium, Inc.* 398,190 29,375 Numerical Technologies, Inc.* 396,856 35,175 NYFIX, Inc.* 526,218 74,525 OPNET Technologies, Inc.* 710,223 52,953 PEC Solutions, Inc.* 1,302,114 10,300 Peregrine Systems, Inc.* 98,056 8,175 Precise Software Solutions Ltd.* 190,396 16,000 SeeBeyond Technology Corporation* 122,400 4,900 Simplex Solutions, Inc.* 48,657 5,900 SmartForce Public Limited Company ADR* 61,950 3,000 VeriSign, Inc.* 81,000 ------------- 6,414,376 ------------- Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- COMPUTER TECHNOLOGY 5.7% 48,450 PDF Solutions, Inc.* $ 830,918 1,475 Synopsys, Inc.* 81,361 44,925 Verisity Ltd.* (Israel) 1,007,668 ------------- 1,919,947 ------------- DRUGS AND PHARMACEUTICALS 8.7% 24,550 American Pharmaceutical Partners, Inc.* 364,076 27,625 Atrix Laboratories, Inc.* 629,021 9,900 Medarex, Inc.* 159,677 7,275 Neose Technologies, Inc.* 233,164 81,325 Northwest Biotherapeutics, Inc.* 313,101 7,000 Northwest Biotherapeutics, Inc., Series D*+ 24,133 35,725 Novavax, Inc.* 408,694 34,225 Shire Pharmaceuticals Group Plc* (United Kingdom) 803,295 ------------- 2,935,161 ------------- ELECTRICAL AND ELECTRONICS 1.3% 49,975 DDi Corp.* 426,287 ------------- ELECTRICAL EQUIPMENT AND COMPONENTS 0.5% 55,500 Elec & Eltek International Company Limited (Singapore) 160,950 ------------- ELECTRONICS 3.3% 16,075 Microtune, Inc.* 230,998 19,200 Sanmina-SCI Corporation* 225,600 30,875 Supertex, Inc.* 656,402 ------------- 1,113,000 ------------- ELECTRONICS--MEDICAL SYSTEMS 0.2% 18,200 IRIDEX Corporation* 84,994 ------------- ELECTRONICS--SEMICONDUCTORS/COMPONENTS 12.7% 11,600 AXT, Inc.* 124,120 7,800 Cree, Inc.* 106,314 43,850 Integrated Circuit Systems, Inc.* 894,540 33,400 LogicVision, Inc.* 357,380 104,925 Monolithic System Technology, Inc.* 1,206,638 6,700 Nassda Corporation* 101,840 40,075 O2Micro International Limited* (Cayman Islands) 700,110 20,100 PSi Technologies Holdings, Inc. ADR* (Philippines) 160,800 16,500 Silicon-On-Insulator Technologies* (France) 345,603 42,750 SiRF Technology Holdings, Series H*+ 277,875 3,400 Vitesse Semiconductor Corporation* 33,320 ------------- 4,308,540 ------------- Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- HEALTH CARE FACILITIES 0.4% 35,275 TLC Laser Eye Centers Inc.* (Canada) $ 118,877 ------------- HEALTH CARE MANAGEMENT SERVICES 2.3% 29,050 AmeriPath, Inc.* 778,540 ------------- HEALTH CARE SERVICES 9.6% 54,012 Accredo Health, Incorporated* 3,093,267 6,690 Cambridge Antibody Technology Group Plc* (United Kingdom) 151,863 ------------- 3,245,130 ------------- MACHINERY--SPECIALTY 0.5% 7,300 ASML Holding N.V.* (Netherlands) 185,201 ------------- MEDICAL AND DENTAL INSTRUMENTS AND SUPPLIES 0.3% 20,475 Align Technology, Inc.* 108,517 ------------- MISCELLANEOUS MATERIALS AND COMMODITIES 2.1% 33,875 Symyx Technologies* 699,519 ------------- PRODUCTION TECHNOLOGY EQUIPMENT 0.2% 1,900 Rudolph Technologies, Inc.* 82,004 ------------- SCIENTIFIC EQUIPMENT AND SUPPLIERS 1.1% 9,225 Biacore International AB ADR* (Sweden) 226,013 31,725 ChromaVision Medical Systems, Inc.* 155,452 ------------- 381,465 ------------- SERVICES--COMMERCIAL 5.2% 46,675 Management Network Group, Inc. (The)* 256,246 247,901 Wireless Facilities, Inc.* 1,487,406 ------------- 1,743,652 ------------- TELECOMMUNICATIONS EQUIPMENT 2.9% 39,625 Polycom, Inc.* 974,775 ------------- UTILITIES--TELECOMMUNICATIONS 1.0% 39,575 Leap Wireless International, Inc.* 333,222 ------------- TOTAL COMMON AND PREFERRED STOCKS (COST $31,947,493) 31,199,868 ------------- Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------------------- March 31, 2002 (Unaudited) Principal Amount Value - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 7.5% $2,525,259 UMB Bank Money Market Fiduciary $ 2,525,259 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $2,525,259) 2,525,259 TOTAL INVESTMENTS (COST $34,472,752) 99.8% 33,725,127 OTHER ASSETS LESS LIABILITIES 0.2% 80,102 ------------- NET ASSETS 100.0% $33,805,229 ============= *Non-income producing +Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). See notes to financial statements. At March 31, 2002, Wasatch Global Science & Technology Fund's investments were in the following countries: COUNTRY % - ------------------------------------------------------------------------------- Canada 0.4 Cayman Islands 2.2 China 5.8 France 1.1 India 4.2 Israel 5.2 Netherlands 0.6 Philippines 0.5 Singapore 0.5 Sweden 0.7 United Kingdom 3.9 United States 74.9 ------------- Total 100.0% ------------- Semi-Annual Report SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- COMMON AND PREFERRED STOCKS 92.8% --------------------------------- AEROSPACE 0.1% 17,300 HEICO Corporation $ 271,264 49,234 HEICO Corporation, Class A 643,488 ------------- 914,752 ------------- AIR TRANSPORT 0.8% 136,665 Expeditors International of Washington, Inc. 8,336,565 ------------- BIOTECHNOLOGY RESEARCH AND PRODUCTION 3.0% 75,100 ArthroCare Corporation* 1,352,551 394,325 Myriad Genetics, Inc.* 13,213,831 527,925 Taro Pharmaceuticals Industries Ltd.* 14,966,674 ------------- 29,533,056 ------------- CHEMICALS 2.7% 402,500 Cabot Microelectronics Corporation* 27,229,125 ------------- COMMUNICATIONS TECHNOLOGY 1.8% 305,350 Metro-Optix, Inc., Class B*+ 632,075 1,429,848 Metro-Optix, Inc., Class C*+ 2,959,785 550,525 UTStarcom, Inc.* 14,440,271 ------------- 18,032,131 ------------- COMPUTER SERVICES SOFTWARE AND SYSTEMS 6.1% 275,050 Cognizant Technology Solutions Corp.* 11,579,605 250,600 Embarcadero Technologies, Inc.* 3,423,196 352,300 Macrovision Corporation* 9,388,795 351,050 Manhattan Associates, Inc.* 13,375,005 734,900 National Information Consortium, Inc.* 2,866,110 372,950 NYFIX, Inc.* 5,579,332 489,285 PEC Solutions, Inc.* 12,031,518 274,925 Simplex Solutions, Inc.* 2,730,005 ------------- 60,973,566 ------------- COMPUTER TECHNOLOGY 3.4% 483,247 Computer Network Technology Corp.* 6,388,525 498,650 PDF Solutions, Inc.* 8,551,847 849,150 Verisity Ltd.* 19,046,435 ------------- 33,986,807 ------------- Semi-Annual Report SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- DRUGS AND PHARMACEUTICALS 3.0% 394,525 ILEX Oncology, Inc.* $ 6,809,501 385,400 Priority Healthcare Corporation* 10,024,254 716,550 Salix Pharmaceuticals, Ltd.* 12,561,122 ------------- 29,394,877 ------------- ELECTRONICS 1.0% 468,775 Supertex, Inc.* 9,966,156 ------------- ELECTRONICS--SEMICONDUCTORS/COMPONENTS 6.5% 366,025 ASAT Holdings Ltd. ADR* 783,293 725,475 Cree, Inc.* 9,888,224 741,250 Integrated Circuit Systems, Inc.* 15,121,500 57,900 LogicVision, Inc.* 619,530 339,043 Microchip Technology Incorporated* 14,182,169 694,900 O2Micro International Limited* 12,139,903 335,900 Pericom Semiconductor Corporation* 4,749,626 327,125 PSi Technologies Holdings, Inc. ADR* 2,617,000 297,300 QuickLogic Corporation* 1,468,662 402,480 SiRF Technology Holdings, Series H*+ 2,616,120 ------------- 64,186,027 ------------- FINANCIAL DATA PROCESSING SERVICES AND SYSTEMS 0.1% 27,850 InterCept Group, Inc. (The)* 1,009,563 ------------- FINANCIAL INFORMATION SERVICES 1.5% 375,025 FactSet Research Systems Inc. 15,132,259 ------------- FINANCIAL--MISCELLANEOUS 0.9% 450,737 Metris Companies Inc. 9,014,740 ------------- HEALTH CARE MANAGEMENT SERVICES 11.5% 1,021,610 AmeriPath, Inc.* 27,379,148 981,775 AmSurg Corp.* 26,714,098 1,607,425 Orthodontic Centers of America, Inc.* 44,381,004 371,750 Pediatrix Medical Group, Inc.* 15,152,530 ------------- 113,626,780 ------------- HEALTH CARE SERVICES 6.1% 282,750 Accredo Health, Incorporated* 16,193,092 525,600 Express Scripts, Inc., Class A* 30,269,304 374,400 Lincare Holdings Inc.* 10,153,728 156,175 Odyssey Healthcare, Inc.* 4,171,434 ------------- 60,787,558 ------------- Semi-Annual Report SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- HOME BUILDING 3.1% 137,550 Meritage Corporation* $ 8,789,445 38,900 NVR, Inc.* 12,272,950 185,700 Toll Brothers, Inc.* 9,257,145 ------------- 30,319,540 ------------- MISCELLANEOUS MATERIALS AND COMMODITIES 0.1% 22,400 Symyx Technologies* 462,560 ------------- MEDICAL AND DENTAL INSTRUMENTS AND SUPPLIES 4.8% 930,175 Align Technology, Inc.* 4,929,927 612,966 ICU Medical, Inc.* 22,311,962 215,750 National Dentex Corp.*++ 5,674,225 532,863 Techne Corp.* 14,691,033 ------------- 47,607,147 ------------- MEDICAL SERVICES 1.8% 625,300 RehabCare Group, Inc.* 17,821,050 ------------- RENTAL AND LEASING SERVICES--CONSUMER 1.0% 194,125 Rent-A-Center, Inc.* 9,917,846 ------------- RESTAURANTS 1.1% 230,500 CEC Entertainment Inc.* 10,649,100 ------------- RETAIL 15.0% 388,061 99 Cents Only Stores* 14,878,259 791,582 Chico's FAS, Inc.* 26,676,313 837,850 Christopher & Banks Corporation* 27,523,372 502,025 Dollar Tree Stores, Inc.* 16,471,440 155,725 Factory 2-U Stores Inc.* 2,008,853 278,116 Hibbett Sporting Goods, Inc.* 6,535,726 427,400 Linens 'n Things, Inc.* 13,048,522 443,940 Men's Wearhouse, Inc. (The)* 10,365,999 990,050 O'Reilly Automotive, Inc.* 31,255,879 ------------- 148,764,363 ------------- SECURITIES BROKERAGE AND SERVICES 1.0% 187,600 Investment Technology Group, Inc.* 9,894,024 ------------- Semi-Annual Report SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- SERVICES--COMMERCIAL 7.3% 464,365 Charles River Associates Incorporated*++ $ 6,988,693 595,125 Copart, Inc.* 10,676,543 584,512 FTI Consulting, Inc.* 18,108,182 182,900 Getty Images, Inc.* 5,479,684 453,630 Resources Connection, Inc.* 13,123,516 564,000 West Corporation* 17,844,960 ------------- 72,221,578 ------------- TELECOMMUNICATIONS EQUIPMENT 3.1% 1,244,425 Polycom, Inc.* 30,612,855 ------------- TRANSPORTATION--MISCELLANEOUS 0.8% 244,575 C.H. Robinson Worldwide, Inc. 8,217,720 ------------- TRUCKERS 1.9% 230,450 Forward Air Corporation* 7,293,743 557,162 Knight Transportation, Inc.* 11,778,405 ------------- 19,072,148 ------------- UTILITIES--CABLE TV AND RADIO 1.3% 947,675 Mediacom Communications Corporation* 13,276,927 ------------- UTILITIES--TELECOMMUNICATIONS 2.0% 10,000 Alamosa PCS Holdings, Inc.* 50,300 369,350 Rural Cellular Corporation* 1,654,688 1,064,300 Triton PCS Holdings* 10,845,217 1,297,950 UbiquiTel Inc.* 3,179,978 106,015 United States Cellular Corp.* 4,346,615 ------------- 20,076,798 ------------- TOTAL COMMON AND PREFERRED STOCKS (COST $775,534,747) 921,037,618 ------------- Semi-Annual Report SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Principal Amount Value - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 7.4% --------------------------- (Variable Rate Demand Deposits) $73,029,303 UMB Bank Money Market Fiduciary $ 73,029,303 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $73,029,303) 73,029,303 ------------- TOTAL INVESTMENTS (COST $848,564,050) 100.2% 994,066,921 LIABILITIES LESS OTHER ASSETS (0.2)% (1,439,022) ------------- NET ASSETS 100.0% $992,627,899 ============= *Non-income producing +Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ++Affiliated company (see Note 8). See notes to financial statements. Semi-Annual Report CORE GROWTH FUND-SCHEDULE OF INVESTMENTS - ---------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- COMMON AND PREFERRED STOCKS 80.1% --------------------------------- AEROSPACE 0.2% 90,900 HEICO Corporation $ 1,425,312 112,622 HEICO Corporation, Class A 1,471,970 ------------- 2,897,282 ------------- AIR TRANSPORT 0.3% 78,950 Expeditors International of Washington, Inc. 4,815,950 ------------- AUTOMOBILES 1.2% 561,125 Group 1 Automotive, Inc.* 21,911,931 ------------- COMMERCIAL INFORMATION SERVICES 1.4% 845,850 SOURCECORP, Incorporated* 24,944,116 ------------- COMMUNICATIONS TECHNOLOGY 2.5% 920,200 CSG Systems International, Inc.* 26,198,094 689,825 UTStarcom, Inc.* 18,094,110 ------------- 44,292,204 ------------- DIVERSIFIED FINANCIAL SERVICES 0.9% 437,300 BISYS Group, Inc. (The)* 15,414,825 ------------- EDUCATION SERVICES 0.3% 159,275 Bright Horizons Family Solutions, Inc.* 4,693,994 ------------- FINANCE COMPANIES 0.9% 801,275 MCG Capital Corporation 15,623,260 ------------- FINANCE--SMALL LOAN 6.9% 3,163,537 AmeriCredit Corp.* 120,182,771 ------------- FINANCIAL DATA PROCESSING SERVICES AND SYSTEMS 0.9% 428,000 Euronet Worldwide, Inc.* 7,276,000 135,000 Fair, Isaac and Company, Incorporated 8,557,650 ------------- 15,833,650 ------------- FINANCIAL INFORMATION SERVICES 0.6% 412,525 Alliance Data Systems Corporation* 10,370,879 ------------- Semi-Annual Report CORE GROWTH FUND-SCHEDULE OF INVESTMENTS - ---------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- FINANCIAL--MISCELLANEOUS 7.5% 1,958,357 Fidelity National Financial, Inc. $ 51,641,874 2,816,062 Metris Companies Inc. 56,321,240 1,077,500 Saxon Capital, Inc.*+ 15,914,675 42,875 Saxon Capital, Inc.* 633,264 134,350 Triad Guaranty Inc.* 5,840,194 ------------- 130,351,247 ------------- FOODS 0.4% 2,761,000 Want Want Holdings Limited 6,792,060 ------------- HEALTH CARE FACILITIES 2.5% 367,600 Apria Healthcare Group Inc.* 9,009,876 1,068,175 Renal Care Group, Inc.* 35,036,140 ------------- 44,046,016 ------------- HEALTH CARE MANAGEMENT SERVICES 12.7% 720,750 AmeriPath, Inc.* 19,316,100 2,016,375 First Health Group Corp.* 48,655,129 251,925 MedQuist Inc.* 7,557,750 3,076,631 Orthodontic Centers of America, Inc.*++ 84,945,782 1,524,475 Pediatrix Medical Group Inc.*++ 62,137,601 ------------- 222,612,362 ------------- HEALTH CARE SERVICES 3.3% 719,675 Express Scripts, Inc., Class A* 41,446,083 633,475 Lincare Holdings Inc.* 17,179,842 ------------- 58,625,925 ------------- IDENTIFICATION CONTROL AND FILTER DEVICES 0.0% 294,300 American Bank Note Holographics, Inc.* 553,284 ------------- INSURANCE--LIFE 0.2% 156,475 Annuity and Life Re (Holdings), Ltd. 3,027,791 ------------- INVESTMENT MANAGEMENT COMPANIES 2.4% 1,530,675 Allied Capital Corporation 42,093,562 ------------- LEISURE TIME 1.7% 918,787 SCP Pool Corporation* 28,849,912 ------------- MEDICAL AND DENTAL INSTRUMENTS AND SUPPLIES 1.0% 463,312 ICU Medical, Inc.* 16,864,557 ------------- Semi-Annual Report CORE GROWTH FUND-SCHEDULE OF INVESTMENTS - ---------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS 6.4% 2,541,475 Annaly Mortgage Management Inc. $ 43,154,245 865,550 Apex Mortgage Capital, Inc. 10,031,724 138,925 Capital Automotive REIT 3,195,275 389,925 Health Care Property Investors, Inc. 15,811,459 190,350 Hospitality Properties Trust 6,534,716 226,500 Nationwide Health Properties, Inc. 4,563,975 1,382,625 Thornburg Mortgage Inc. 27,707,805 ------------- 110,999,199 ------------- RENTAL AND LEASING SERVICES--COMMERCIAL 4.4% 2,812,100 United Rentals, Inc.*++ 77,276,508 ------------- RENTAL AND LEASING SERVICES--CONSUMER 9.2% 3,145,525 Rent-A-Center, Inc.*++ 160,704,872 ------------- RESTAURANTS 0.4% 151,900 CEC Entertainment Inc.* 7,017,780 ------------- RETAIL 5.3% 513,275 Factory 2-U Stores Inc.* 6,621,247 1,184,250 Men's Wearhouse, Inc. (The)* 27,652,238 326,595 O'Reilly Automotive, Inc.* 10,310,604 1,315,245 Sonic Automotive, Inc.* 39,431,045 15,716,000 Texwinca Holdings Limited 9,016,269 ------------- 93,031,403 ------------- SECURITIES BROKERAGE AND SERVICES 0.6% 201,662 Investment Technology Group, Inc. 10,635,654 ------------- SERVICES--COMMERCIAL 4.2% 978,125 Copart, Inc.* 17,547,563 833,425 MAXIMUS, Inc.* 25,611,150 646,325 Watson Wyatt & Company Holdings*++ 17,676,989 373,725 West Corporation* 11,824,659 ------------- 72,660,361 ------------- TRANSPORTATION--MISCELLANEOUS 0.2% 122,400 C.H. Robinson Worldwide, Inc. 4,112,640 ------------- TRUCKERS 0.6% 100,020 Forward Air Corporation* 3,165,633 328,033 Knight Transportation, Inc.* 6,934,618 ------------- 10,100,251 ------------- Semi-Annual Report CORE GROWTH FUND-SCHEDULE OF INVESTMENTS - ---------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- UTILITIES--TELECOMMUNICATIONS 1.0% 3,078,025 WorldCom, Inc.-MCI Group $ 18,191,128 ------------- TOTAL COMMON STOCKS (COST $1,078,755,647) 1,399,527,374 ------------- Number of Contracts Value - -------------------------------------------------------------------------------- PUT OPTIONS PURCHASED 0.0% -------------------------- 768 Nasdaq-100 Shares, expiring 6/15/02, exercise price $36 161,280 650 Nasdaq-100 Shares, expiring 6/15/02, exercise price $38 201,500 450 Nasdaq-100 Shares, expiring 6/15/02, exercise price $40 207,000 ------------- 569,780 ------------- TOTAL PUT OPTIONS PURCHASED (COST $602,534) 569,780 ------------- Principal Amount Value - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 21.1% ---------------------------- (Variable Rate Demand Deposits) $368,195,683 UMB Bank Money Market Fiduciary $ 368,195,683 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $368,195,683) 368,195,683 ------------- TOTAL INVESTMENTS (COST $1,447,553,864) 101.2% 1,768,292,837 LIABILITIES LESS OTHER ASSETS (1.2)% (20,720,671) ------------- NET ASSETS 100.0% $1,747,572,166 ============= *Non-income producing +Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ++Affiliated company (see Note 8). See notes to financial statements. Semi-Annual Report SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- COMMON AND PREFERRED STOCKS 80.0% --------------------------------- AEROSPACE 1.9% 572,220 HEICO Corporation, Class A $ 7,478,915 ------------- AIR TRANSPORT 1.6% 678,187 Frontier Airlines, Inc.* 12,424,386 ------------- AUTO PARTS--AFTER MARKET 0.9% 397,425 Keystone Automotive Industries, Inc.* 6,827,762 ------------- BANKS--OUTSIDE NEW YORK CITY 2.0% 13,700 First State Bancorporation 318,388 149,000 Hibernia Corporation 2,845,900 335,550 Nara Bancorp, Inc.++ 7,298,212 367,600 Umpqua Holdings Corporation 5,499,296 ------------- 15,961,796 ------------- COMPUTER SERVICES SOFTWARE AND SYSTEMS 0.2% 376,125 RWD Technologies, Inc.* 1,515,784 ------------- COMMUNICATIONS TECHNOLOGY 0.2% 189,525 REMEC, Inc.* 1,753,106 ------------- EDUCATION SERVICES 0.0% 14,725 Franklin Covey Co.* 37,696 ------------- ELECTRICAL EQUIPMENT AND COMPONENTS 0.1% 650,664 PCD Inc.*++ 715,730 ------------- ELECTRONICS 1.1% 281,675 Nu Horizons Electronics Corp.* 2,774,499 286,475 Supertex, Inc.*++ 6,090,458 ------------- 8,864,957 ------------- ELECTRONICS--TECHNOLOGY 0.3% 208,700 Innovative Solutions and Support, Inc.* 2,057,782 ------------- ELECTRONICS--SEMICONDUCTORS/COMPONENTS 2.4% 662,675 ASAT Holdings Ltd. ADR* 1,418,124 403,800 Excel Technology, Inc.* 8,867,448 923,325 Peak International Limited*++ 7,386,600 141,125 PSi Technologies Holdings, Inc. ADR* 1,129,000 ------------- 18,801,172 ------------- Semi-Annual Report SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- FINANCE COMPANIES 1.7% 550,700 MCG Capital Corporation $10,737,549 396,661 World Acceptance Corp.* 2,784,560 ------------- 13,522,109 ------------- FINANCE--SMALL LOAN 6.0% 1,226,325 AmeriCredit Corp.* 46,588,087 ------------- FOODS 1.7% 602,250 Fleming Companies, Inc. 13,490,400 ------------- FINANCIAL--MISCELLANEOUS 9.3% 395,065 Fidelity National Financial, Inc. 10,417,864 100,850 Financial Federal Corporation* 3,308,888 1,656,050 Metris Companies Inc. 33,121,000 656,400 Saxon Capital, Inc.*+ 9,695,028 1,078,525 Saxon Capital, Inc.* 15,929,814 ------------- 72,472,594 ------------- HEALTH CARE MANAGEMENT SERVICES 1.7% 254,350 AmeriPath, Inc.* 6,816,580 144,525 Mid Atlantic Medical Services, Inc.* 4,118,962 89,135 Orthodontic Centers of America, Inc.* 2,461,017 ------------- 13,396,559 ------------- HEALTH CARE FACILITIES 1.1% 309,450 Sunrise Assisted Living, Inc.* 8,435,607 ------------- HEALTH CARE SERVICES 0.4% 265,000 Healthcare Services Group, Inc.* 3,034,250 ------------- HOME BUILDING 1.6% 71,700 Crossman Communities, Inc.* 3,242,991 37,725 M.D.C. Holdings, Inc. 1,629,720 12,625 NVR, Inc.* 3,983,188 67,350 Toll Brothers, Inc.* 3,357,397 ------------- 12,213,296 ------------- HOTEL/MOTEL 0.6% 216,675 Orient-Express Hotels Ltd., Class A* 4,441,837 ------------- INSURANCE--PROPERTY AND CASUALTY 0.4% 67,725 RLI Corp. 3,501,383 ------------- Semi-Annual Report SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS - --------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- INVESTMENT MANAGEMENT COMPANIES 0.8% 220,075 Allied Capital Corporation $ 6,052,063 ------------- JEWELRY, WATCHES AND GEMSTONES 4.7% 1,174,020 Friedman's Inc.++ 12,620,715 1,299,418 Whitehall Jewellers, Inc.*++ 24,494,029 ------------- 37,114,744 ------------- LEISURE TIME 3.4% 1,214,525 Bally Total Fitness Holding Corporation* 26,658,824 ------------- MACHINERY--INDUSTRIAL/SPECIALTY 1.4% 752,050 Kadant Inc.*++ 10,739,274 ------------- METALS FABRICATING 0.4% 209,725 Encore Wire Corporation* 3,473,046 ------------- OIL--CRUDE PRODUCERS 0.4% 113,725 Plains Resources Inc.* 2,829,478 ------------- REAL ESTATE 0.8% 180,400 LNR Property Corporation 6,326,628 ------------- REAL ESTATE INVESTMENT TRUSTS 6.0% 394,300 Annaly Mortgage Management Inc. 6,695,214 257,600 Apex Mortgage Capital, Inc. 2,985,584 88,350 Capital Automotive REIT 2,032,050 156,825 FBR Asset Investment Corporation 4,265,640 395,525 Health Care Property Investors, Inc. 16,038,539 736,150 Nationwide Health Properties, Inc. 14,833,423 ------------- 46,823,450 ------------- RENTAL AND LEASING SERVICES--COMMERCIAL 5.6% 1,070,225 MicroFinancial Incorporated++ 9,150,424 1,258,325 United Rentals, Inc.* 34,578,771 ------------- 43,729,195 ------------- RENTAL AND LEASING SERVICES--CONSUMER 4.0% 218,500 Rainbow Rentals, Inc.* 1,529,500 586,400 Rent-A-Center, Inc.* 29,959,176 ------------- 31,488,676 ------------- Semi-Annual Report SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- RETAIL 8.4% 581,575 Cato Corporation (The), Class A $ 12,957,491 272,825 Genesco Inc.* 7,521,785 1,005,275 Global Imaging Systems, Inc.* 18,497,060 478,600 Lithia Motors, Inc.* 11,821,420 675,875 MarineMax, Inc.* 8,110,500 276,669 Men's Wearhouse, Inc. (The)* 6,460,221 ------------- 65,368,477 ------------- SECURITIES BROKERAGE AND SERVICES 0.4% 112,675 American Capital Strategies, Ltd. 3,488,418 ------------- SERVICES--COMMERCIAL 2.5% 241,055 Charles River Associates Incorporated* 3,627,878 161,912 FTI Consulting, Inc.* 5,016,034 241,995 Monro Muffler Brake, Inc.* 4,162,314 67,975 Navigant International, Inc.* 985,638 363,400 RemedyTemp, Inc.* 5,741,720 ------------- 19,533,584 ------------- SHOES 2.5% 613,925 Finish Line, Inc. (The)* 11,326,916 512,000 Maxwell Shoe Company Inc.*++ 8,192,000 ------------- 19,518,916 ------------- TRUCKERS 2.6% 149,350 Arkansas Best Corporation* 4,150,437 35,775 Landstar System, Inc.* 3,319,920 257,512 Transport Corporation of America, Inc.* 1,686,704 317,375 USA Truck, Inc.* 4,094,138 275,300 Yellow Corporation* 7,265,167 ------------- 20,516,366 ------------- UTILITIES--ELECTRICAL 1.5% 754,200 Sierra Pacific Resources 11,380,878 ------------- UTILITIES--TELECOMMUNICATIONS 0.3% 448,575 WorldCom, Inc.-MCI Group 2,651,078 ------------- TOTAL COMMON STOCKS (COST $492,922,688) 625,255,303 ------------- Semi-Annual Report SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS - -------------------------------------------- March 31, 2002 (Unaudited) Principal Amount Value - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 19.8% ---------------------------- (Variable Rate Demand Deposits) $155,043,803 UMB Bank Money Market Fiduciary $155,043,803 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $155,043,803) 155,043,803 ------------- TOTAL INVESTMENTS (COST $647,966,491) 99.8% 780,299,106 ------------- OTHER ASSETS LESS LIABILITIES 0.2% 1,817,869 ------------- NET ASSETS 100.0% $782,116,975 ============= *Non-income producing +Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ++Affiliated company (see Note 8). See notes to financial statements. Semi-Annual Report MICRO CAP FUND-SCHEDULE OF INVESTMENTS - -------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- COMMON AND PREFERRED STOCKS 86.8% --------------------------------- Banks--Outside New York City 0.5% 107,275 First State Bancorporation $ 2,493,071 ------------- BIOTECHNOLOGY RESEARCH AND PRODUCTION 1.3% 191,000 Discovery Partners International* 1,413,400 91,300 Embrex, Inc.* 1,903,605 93,000 Taro Pharmaceutical Industries Ltd.* 2,636,550 97,475 United-Guardian, Inc. 589,724 ------------- 6,543,279 ------------- BUILDING MATERIALS 0.5% 186,275 Building Materials Holding Corp.* 2,682,360 ------------- BUILDING--MISCELLANEOUS 0.2% 50,625 Dominion Homes, Inc.* 891,000 ------------- CHEMICALS 3.3% 245,275 Cabot Microelectronics Corporation* 16,592,854 ------------- COMMUNICATIONS TECHNOLOGY 0.8% 52,975 Catapult Communications Corporation* 1,337,089 299,275 Fargo Electronics* 2,169,744 95,930 Metro-Optix, Inc., Class B*+ 198,575 ------------- 3,705,408 ------------- COMPUTER SERVICES SOFTWARE AND SYSTEMS 3.9% 50,925 Cognizant Technology Solutions Corp.* 2,143,942 76,275 Ixia* 648,337 51,175 Macrovision Corporation* 1,363,814 134,875 Moldflow Corporation* 1,820,812 209,000 Numerical Technologies, Inc.* 2,823,590 592,450 OPNET Technologies, Inc.* 5,646,049 30,000 PEC Solutions, Inc.* 737,700 662,364 VitalWorks Inc.* 3,874,829 ------------- 19,059,073 ------------- COMPUTER TECHNOLOGY 3.0% 179,350 PDF Solutions, Inc.* 3,075,852 549,800 Qualstar Corporation* 3,573,700 360,400 Verisity Ltd.* 8,083,772 ------------- 14,733,324 ------------- Semi-Annual Report MICRO CAP FUND-SCHEDULE OF INVESTMENTS - -------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- DRUGS AND PHARMACEUTICALS 1.5% 106,250 Bradley Pharmaceuticals, Inc.*++ $ 1,131,562 36,712 First Horizon Pharmaceutical Corporation* 820,880 74,425 Novavax, Inc.* 851,422 252,400 Salix Pharmaceuticals, Ltd.* 4,424,572 ------------- 7,228,436 ------------- EDUCATION SERVICES 0.0% 9,325 Franklin Covey Co.* 23,872 ------------- ELECTRICAL EQUIPMENT AND COMPONENTS 0.1% 376,000 PCD Inc.* 413,600 ------------- ELECTRONICS 1.0% 220,100 Supertex, Inc.* 4,679,326 ------------- ELECTRONICS--INSTRUMENTS, GAUGES AND METERS 0.8% 512,925 Computer Access Technology Corporation* 2,538,979 267,650 inTEST Corporation* 1,514,899 ------------- 4,053,878 ------------- ELECTRONICS--MEDICAL SYSTEMS 0.8% 853,600 IRIDEX Corporation*++ 3,986,312 ------------- ELECTRONICS--SEMICONDUCTORS/COMPONENTS 12.8% 56,500 Advanced Power Technology, Inc.* 648,620 414,700 Excel Technology, Inc.* 9,106,812 823,925 Integrated Circuit Systems, Inc.* 16,808,070 247,250 LogicVision, Inc.* 2,645,575 21,400 Micrel, Inc.* 539,708 995,075 Monolithic System Technology, Inc.* 11,443,363 75,950 Nassda Corporation* 1,154,440 635,200 O2Micro International Limited* 11,096,944 68,475 Pericom Semiconductor Corporation* 968,236 182,675 PLX Technology, Inc.* 2,228,635 782,900 PSi Technologies Holdings, Inc. ADR*++ 6,263,200 ------------- 62,903,603 ------------- FINANCE COMPANIES 1.1% 753,000 World Acceptance Corp.* 5,286,060 ------------- FINANCIAL DATA PROCESSING SERVICES AND SYSTEMS 0.0% 52,550 Atlantic Data Services, Inc.* 118,185 ------------- FINANCIAL INFORMATION SERVICES 1.6% 155,375 FactSet Research Systems Inc. 6,269,381 185,650 OneSource Information Services, Inc.* 1,353,388 ------------- 7,622,769 ------------- Semi-Annual Report MICRO CAP FUND-SCHEDULE OF INVESTMENTS - -------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - ------------------------------------------------------------------------------- FINANCIAL--MISCELLANEOUS 0.3% 39,325 Financial Federal Corporation* $ 1,290,253 ------------- FOOD 0.1% 117,000 YOCREAM International, Inc.*++ 655,200 ------------- HEALTH CARE FACILITIES 2.4% 426,650 American Healthways, Inc.* 11,579,281 ------------- HEALTH CARE MANAGEMENT SERVICES 9.6% 351,750 AmeriPath, Inc.* 9,426,900 618,750 AmSurg Corp.* 16,836,188 517,838 CorVel Corp.* 15,452,286 190,982 Orthodontic Centers of America, Inc.* 5,273,013 ------------- 46,988,387 ------------- HEALTH CARE SERVICES 1.2% 100,275 Accredo Health, Incorporated* 5,742,749 ------------- HOME BUILDING 0.7% 58,275 Meritage Corporation* 3,723,773 ------------- JEWELRY, WATCHES AND GEMSTONES 0.3% 152,100 Friedman's Inc. 1,635,075 ------------- LEISURE TIME 1.0% 162,000 SCP Pool Corporation* 5,086,800 ------------- MACHINERY--OIL WELL EQUIPMENT AND SERVICES 0.6% 181,100 Gulf Island Fabrication, Inc.* 2,718,311 ------------- MEDICAL AND DENTAL INSTRUMENTS AND SUPPLIES 9.8% 233,550 Biosite Incorporated* 5,780,363 178,850 Fischer Imaging Corporation* 2,181,970 294,037 ICU Medical, Inc.* 10,702,947 56,350 MedAmicus, Inc.* 610,834 142,600 Med-Design Corporation (The)* 2,003,530 125,000 MedicalCV, Inc.* 406,250 262,350 Micro Therapeutics, Inc.* 2,072,565 68,175 Molecular Devices Corporation* 1,238,740 329,514 National Dentex Corp.*++ 8,666,218 217,025 Omnicell, Inc.* 1,612,496 393,100 Young Innovations, Inc.*++ 12,579,200 ------------- 47,855,113 ------------- Semi-Annual Report MICRO CAP FUND-SCHEDULE OF INVESTMENTS - -------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- MEDICAL SERVICES 2.8% 52,900 Exactech, Inc.* $ 793,500 391,225 RehabCare Group, Inc.* 11,149,913 97,787 U.S. Physical Therapy, Inc.* 1,765,055 ------------- 13,708,468 ------------- MISCELLANEOUS MATERIALS AND COMMODITIES 0.7% 165,000 Symyx Technologies* 3,407,250 ------------- PRODUCTION TECHNOLOGY EQUIPMENT 0.1% 18,050 Nanometrics Incorporated* 332,842 ------------- RENTAL AND LEASING SERVICES--CONSUMER 0.6% 402,400 Rainbow Rentals, Inc.*++ 2,816,800 ------------- RESTAURANTS 0.5% 120,250 Benihana Inc.* 2,453,100 ------------- RETAIL 8.9% 177,099 99 Cents Only Stores* 6,789,976 129,575 Cato Corporation (The), Class A 2,886,931 95,837 Chico's FAS, Inc.* 3,229,707 98,738 Christopher & Banks Corporation* 3,243,543 445,650 Global Imaging Systems, Inc.* 8,199,960 139,850 Guitar Center, Inc.* 2,450,172 61,900 Linens 'n Things, Inc.* 1,889,807 93,100 Lithia Motors, Inc.* 2,299,570 152,000 MarineMax, Inc.* 1,824,000 154,353 Men's Wearhouse, Inc. (The)* 3,604,143 74,100 O'Reilly Automotive, Inc.* 2,339,337 50,400 Sonic Automotive, Inc.* 1,510,992 100,625 Too Inc.* 2,967,431 181,900 Travis Boats & Motors, Inc.* 454,750 ------------- 43,690,049 ------------- SAVINGS AND LOANS 0.1% 16,800 Great Southern Bancorp, Inc. 535,920 ------------- SCIENTIFIC EQUIPMENT AND SUPPLIES 0.0% 14,550 ChromaVision Medical Systems, Inc.* 71,295 ------------- Semi-Annual Report MICRO CAP FUND-SCHEDULE OF INVESTMENTS - -------------------------------------- March 31, 2002 (Unaudited) Number of Shares Value - -------------------------------------------------------------------------------- SERVICES--COMMERCIAL 8.1% 381,125 Charles River Associates Incorporated* $ 5,735,931 282,375 FTI Consulting, Inc.* 8,747,978 160,275 Legal Research Center, Inc.* 237,207 86,500 RemedyTemp, Inc.* 1,366,700 536,875 Resources Connection, Inc.* 15,531,794 209,900 StarTek, Inc.* 4,859,185 96,775 West Corporation* 3,061,961 ------------- 39,540,756 ------------- SHOES 2.0% 257,425 Finish Line, Inc. (The)* 4,749,491 310,800 Maxwell Shoe Company Inc.* 4,972,800 ------------- 9,722,291 ------------- TRUCKERS 3.5% 509,800 Knight Transportation, Inc.* 10,777,172 33,975 Landair Corporation* 552,094 81,575 P.A.M. Transportation Services, Inc.* 2,063,847 289,400 USA Truck, Inc.* 3,733,260 ------------- 17,126,373 ------------- UTILITIES--TELECOMMUNICATIONS 0.3% 164,200 Triton PCS Holdings, Inc.* 1,673,198 ------------- TOTAL COMMON AND PREFERRED STOCKS (COST $296,838,039) 425,369,964 ------------- Semi-Annual Report MICRO CAP FUND-SCHEDULE OF INVESTMENTS - -------------------------------------- March 31, 2002 (Unaudited) Principal Amount Value - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 13.9% ---------------------------- (Variable Rate Demand Deposits) $68,136,069 UMB Bank Money Market Fiduciary $68,136,069 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $68,136,069) 68,136,069 ------------- TOTAL INVESTMENTS (COST $364,974,108) 100.7% 493,506,033 LIABILITIES LESS OTHER ASSETS (0.7)% (3,481,910) ------------- NET ASSETS 100.0% $490,024,123 ============= *Non-income producing +Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ++Affiliated company (see Note 8). See notes to financial statements. Semi-Annual Report U.S. TREASURY FUND-SCHEDULE OF INVESTMENTS - ------------------------------------------ March 31, 2002 (Unaudited) Principal Amount Value - -------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS 98.0% --------------------------------- $ 600,000 U.S. Treasury Bond, 6.25%, 8/15/23 $ 614,437 7,830,000 U.S. Treasury Bond, 7.50%, 11/15/24 9,225,940 2,755,000 U.S. Treasury Bond, 6.875%, 8/15/25 3,038,357 1,750,000 U.S. Treasury Bond, 6.75%, 8/15/26 1,907,364 3,635,000 U.S. Treasury Bond, 6.50%, 11/15/26 3,848,131 3,170,000 U.S. Treasury Bond, 6.625%, 2/15/27 3,407,750 4,355,000 U.S. Treasury Bond, 6.375%, 8/15/27 4,546,211 4,300,000 U.S. Treasury Bond, 6.125%, 11/15/27 4,353,247 947,000 U.S. Treasury Bond, 6.125%, 8/15/29 964,498 8,550,000 U.S. Treasury Bond, 5.375% 2/15/31 8,026,979 38,100,000 U.S. Treasury Strip, 11/15/21 11,298,212 10,100,000 U.S. Treasury Strip, 8/15/25 2,401,406 ------------- TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $55,612,002) 53,632,532 ------------- SHORT-TERM INVESTMENTS 0.9% --------------------------- (Variable Rate Demand Deposits) 482,650 UMB Bank Money Market Fiduciary 482,650 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $482,650) 482,650 ------------- TOTAL INVESTMENTS (COST $56,094,652) 98.9% 54,115,182 OTHER ASSETS LESS LIABILITIES 1.1% 614,067 ------------- NET ASSETS 100.0% $54,729,249 ============= See notes to financial statements. Semi-Annual Report (This page intentionally left blank.) Semi-Annual Report WASATCH FUNDS-STATEMENTS OF ASSETS AND LIABILITIES - -------------------------------------------------- MARCH 31, 2002 (UNAUDITED)
ULTRA GLOBAL SCIENCE GROWTH & TECHNOLOGY FUND FUND - ---------------------------------------------------------------------------------------------------- ASSETS: Investments, at market value Nonaffiliated issuers (cost $293,331,863, $34,472,752, $836,447,215, $1,186,603,747, $577,569,149, $337,776,939 and $56,094,652, respectively) $311,983,490 $33,725,127 Affiliated issuers (cost $0, $0, $12,116,835, $260,950,117, $70,397,342, $27,197,169 and $0, respectively) - - Cash - 28 Receivable for investment securities sold 366,091 235,278 Capital shares receivable 2,840,207 586,580 Interest and dividends receivable 9,231 3,464 Prepaid expenses and other assets 31,723 13,543 ------------- ------------- Total Assets 315,230,742 34,564,020 ------------- ------------- LIABILITIES: Payable for securities purchased 9,337,565 601,963 Capital shares payable 761,282 98,216 Payable to investment advisor 352,355 27,387 Accrued expenses 116,575 31,225 ------------- ------------- Total Liabilities 10,567,777 758,791 ------------- ------------- NET ASSETS $304,662,965 $33,805,229 ============= ============= NET ASSETS CONSIST OF: Capital stock $127,524 $31,297 Paid-in capital in excess of par 284,009,867 34,365,942 Undistributed net investment income - - Undistributed net realized gain (loss) on investments 1,873,947 155,615 Net unrealized appreciation (depreciation) on investments and foreign currency translations 18,651,627 (747,625) ------------- ------------- Net Assets $304,662,965 $ 33,805,229 ============= ============= CAPITAL STOCK, $.01 PAR VALUE: Authorized 10,000,000,000 10,000,000,000 Issued and outstanding 12,752,396 3,129,742 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $23.89 $10.80 ====== ======
SMALL CAP CORE SMALL CAP U.S. GROWTH GROWTH VALUE MICRO CAP TREASURY FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS: Investments, at market value Nonaffiliated issuers (cost $293,331,863, $34,472,752, $836,447,215, $1,186,603,747, $577,569,149, $337,776,939 and $56,094,652, respectively) $981,404,003 $1,340,321,811 $699,702,121 $ 452,249,503 $54,115,182 Affiliated issuers (cost $0, $0, $12,116,835, $260,950,117, $70,397,342, $27,197,169 and $0, respectively) 12,662,918 427,971,026 80,596,985 41,256,530 - Cash 4,507 26,476 81,913 - - Receivable for investment securities sold 4,472,845 - 222,395 996,960 - Capital shares receivable 2,551,605 18,753,321 7,779,318 154,804 135,497 Interest and dividends receivable 25,995 2,339,526 751,809 19,070 579,308 Prepaid expenses and other assets 62,219 202,393 117,141 39,442 17,776 -------------- -------------- -------------- -------------- -------------- Total Assets 1,001,184,092 1,789,614,553 789,251,682 494,716,309 54,847,763 -------------- -------------- -------------- -------------- -------------- LIABILITIES: Payable for securities purchased 6,406,520 39,060,520 5,508,737 3,209,690 - Capital shares payable 871,648 822,994 226,823 297,867 72,860 Payable to investment advisor 1,022,875 1,693,023 1,126,141 1,030,246 10,117 Accrued expenses 256,750 465,850 273,006 154,383 35,537 -------------- -------------- -------------- -------------- -------------- Total Liabilities 8,556,193 42,042,387 7,134,707 4,692,186 118,514 -------------- -------------- -------------- -------------- -------------- NET ASSETS $992,627,899 $1,747,572,166 $782,116,975 $490,024,123 $54,729,249 ============== ============== ============== ============== ============== NET ASSETS CONSIST OF: Capital stock $304,313 $458,570 $1,666,712 $727,613 $47,104 Paid-in capital in excess of par 831,225,028 1,391,942,965 636,644,724 328,766,444 63,467,764 Undistributed net investment income - - - - 846,407 Undistributed net realized gain (loss) on investments 15,595,687 34,431,658 11,472,924 31,998,141 (7,652,556) Net unrealized appreciation (depreciation) on investments and foreign currency translations 145,502,871 320,738,973 132,332,615 128,531,925 (1,979,470) -------------- -------------- -------------- -------------- -------------- Net Assets $ 992,627,899 $1,747,572,166 $782,116,975 $490,024,123 $54,729,249 ============== ============== ============== ============== ============== CAPITAL STOCK, $.01 PAR VALUE: Authorized 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000 Issued and outstanding 30,431,279 45,857,047 166,671,192 72,761,270 4,710,410 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $32.62 $38.11 $4.69 $6.73 $11.62 ====== ====== ====== ====== ======
See notes to financial statements. Semi-Annual Report WASATCH FUNDS-STATEMENTS OF OPERATIONS - --------------------------------------- FOR THE SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED)
ULTRA GLOBAL SCIENCE GROWTH & TECHNOLOGY FUND FUND - ---------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest $45,163 $5,633 Dividends+ - 4,130 ------------- ------------- 45,163 9,763 ------------- ------------- EXPENSES: Investment advisory fee 1,116,863 191,191 Shareholder servicing fees 160,386 37,037 Fund administration and accounting fees 120,262 28,041 Federal and state registration fees++ 49,982 7,509 Reports to shareholders 16,482 8,445 Custody fees 6,040 17,783 Audit fees 5,054 2,555 Legal fees 1,488 3,998 Directors' fees 603 98 Other 2,453 1,646 ------------- ------------- Total expenses before reimbursement 1,479,613 298,303 Reimbursement of expenses by Advisor - (49,754) ------------- ------------- Net expenses 1,479,613 248,549 ------------- ------------- NET INVESTMENT INCOME (LOSS) (1,434,450) (238,786) ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments+ 4,787,781 567,016 Net realized loss on options purchased - - Change in unrealized appreciation (depreciation) on investments 28,278,707 2,702,545 ------------- ------------- Net gain (loss) on investments 33,066,488 3,269,561 ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $31,632,038 $3,030,775 ============= =============
SMALL CAP CORE SMALL CAP U.S. GROWTH GROWTH VALUE MICRO CAP TREASURY FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME: Interest $212,329 $239,897 $135,519 $123,160 $1,958,312 Dividends+ 73,330 5,533,136 3,946,481 80,833 - ------------- ------------- ------------- ------------- ------------- 285,659 5,773,033 4,082,000 203,993 1,958,312 ------------- ------------- ------------- ------------- ------------- EXPENSES: Investment advisory fee 4,212,726 6,171,989 4,227,024 4,368,261 154,347 Shareholder servicing fees 539,567 870,869 439,336 248,827 54,717 Fund administration and accounting fees 375,918 513,067 278,288 230,826 57,285 Federal and state registration fees++ 205,555 259,245 156,766 62,444 15,195 Reports to shareholders 20,619 (76,628) (78,542) (1,672) 6,548 Custody fees 26,728 47,159 21,640 20,242 2,252 Audit fees 5,054 5,054 4,868 5,004 5,078 Legal fees 14,046 20,168 10,061 7,225 1,145 Directors' fees 3,614 5,020 2,333 1,836 327 Other 8,681 12,564 6,442 6,616 1,720 ------------- ------------- ------------- ------------- ------------- Total expenses before reimbursement 5,412,508 7,828,507 5,068,216 4,949,609 298,614 Reimbursement of expenses by Advisor - - - - (67,094) ------------- ------------- ------------- ------------- ------------- Net expenses 5,412,508 7,828,507 5,068,216 4,949,609 231,520 ------------- ------------- ------------- ------------- ------------- NET INVESTMENT INCOME (LOSS) (5,126,849) (2,055,474) (986,216) (4,745,616) 1,726,792 ------------- ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments+ 21,495,581 52,236,089 12,683,563 39,693,813 (279,638) Net realized loss on options purchased - (640,853) - - - Change in unrealized appreciation (depreciation) on investments 143,278,994 274,967,647 134,555,656 77,340,973 (4,263,189) ------------- ------------- ------------- ------------- ------------- Net gain (loss) on investments 164,774,575 326,562,883 147,239,219 117,034,786 (4,542,827) ------------- ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $159,647,726 $324,507,409 $146,253,003 $112,289,170 $(2,816,035) ============= ============= ============= ============= =============
+See Note 8 for information on affiliated issuers. ++See Note 7. See notes to financial statements. Semi-Annual Report WASATCH FUNDS-STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------
GLOBAL SCIENCE & ULTRA GROWTH FUND TECHNOLOGY FUND SMALL CAP GROWTH FUND SIX MONTHS SIX MONTHS SIX MONTHS ENDED YEAR ENDED PERIOD ENDED YEAR MARCH 31, ENDED MARCH 31, ENDED MARCH 31, ENDED 2002 SEPTEMBER 30, 2002 SEPTEMBER 30, 2002 SEPTEMBER 30, (UNAUDITED) 2001 (UNAUDITED) 2001* (UNAUDITED) 2001 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS: Net investment loss $(1,434,450) $(935,946) $(238,786) $(99,356) $(5,126,849) $(3,087,462) Net realized gain on investments 4,787,781 6,512,523 567,016 223,828 21,495,581 18,218,171 Net realized loss on short positions - - - (2,787) - - Change in unrealized appreciation (depreciation) on investments 28,278,707 (21,303,405) 2,702,545 (3,450,170) 143,278,994 (67,163,386) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 31,632,038 (15,726,828) 3,030,775 (3,328,485) 159,647,726 (52,032,677) DIVIDENDS PAID FROM: Net realized gains (4,518,749) (11,252,113) (250,799) - (9,829,740) (41,097,860) ------------- ------------- ------------- ------------- ------------- ------------- (4,518,749) (11,252,113) (250,799) - (9,829,740) (41,097,860) CAPITAL SHARE TRANSACTIONS: Shares sold 222,961,834 108,427,142 36,801,187 19,253,208 367,630,206 485,346,816 Shares issued to holders in reinvestment of dividends 4,240,122 10,958,786 246,587 - 9,359,244 39,472,015 Shares redeemed (35,925,189) (62,909,909) (16,730,540) (5,297,617) (87,674,415) (116,515,638) Redemption fees 175,975 318,033 59,631 21,272 78,596 431,744 ------------- ------------- ------------- ------------- ------------- ------------- Net increase 191,452,742 56,794,052 20,376,865 13,976,863 289,393,631 408,734,937 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL INCREASE IN NET ASSETS 218,566,031 29,815,111 23,156,841 10,648,378 439,211,617 315,604,400 NET ASSETS: Beginning of period 86,096,934 56,281,823 10,648,388 10 553,416,282 237,811,882 ------------- ------------- ------------- ------------- ------------- ------------- End of period $304,662,965 $86,096,934 $33,805,229 $10,648,388 $992,627,899 $553,416,282 ============= ============= ============= ============= ============= ============= Undistributed net investment income included in net assets at end of period - - - - - 42,965 ============= ============= ============= ============= ============= =============
*Inception date of the Fund was December 19, 2000. See notes to financial statements. Semi-Annual Report WASATCH FUNDS-STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------
CORE GROWTH FUND SMALL CAP VALUE FUND MICRO CAP FUND SIX MONTHS SIX MONTHS SIX MONTHS ENDED YEAR ENDED PERIOD ENDED YEAR MARCH 31, ENDED MARCH 31, ENDED MARCH 31, ENDED 2002 SEPTEMBER 30, 2002 SEPTEMBER 30, 2002 SEPTEMBER 30, (UNAUDITED) 2001 (UNAUDITED) 2001 (UNAUDITED) 2001 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS: Net investment loss $(2,055,474) $(4,748,358) $(986,216) $(872,789) $(4,745,616) $(4,952,765) Net realized gain on investments 52,236,089 75,774,550 12,683,563 17,531,020 39,693,813 40,716,705 Net realized gain on options written - 172,989 - - - - Net realized loss on options purchased (640,853) - - - - - Change in unrealized appreciation (depreciation) on investments 274,967,647 (12,632,653) 134,555,656 (7,864,036) 77,340,973 2,388,446 ------------- ------------- ------------- ------------- ------------- ------------- Net increase in net assets resulting from operations 324,507,409 58,566,528 146,253,003 8,794,195 112,289,170 38,152,386 DIVIDENDS PAID FROM: Net realized gains (69,235,847) (24,873,276) (12,959,938) (4,400,225) (35,303,486) (59,242,526) ------------- ------------- ------------- ------------- ------------- ------------- (69,235,847) (24,873,276) (12,959,938) (4,400,225) (35,303,486) (59,242,526) CAPITAL SHARE TRANSACTIONS: Shares sold 652,500,166 1,012,362,033 239,929,911 591,948,181 87,082,872 109,537,512 Shares issued to holders in reinvestment of dividends 65,821,021 24,496,990 12,179,752 4,276,748 33,474,736 58,030,493 Shares redeemed (219,163,944) (368,598,381) (90,436,907) (160,277,580) (31,086,366) (67,430,879) Redemption fees 208,622 275,508 56,145 283,257 27,472 48,259 ------------- ------------- ------------- ------------- ------------- ------------- Net increase 499,365,865 668,536,150 161,728,901 436,230,606 89,498,714 100,185,385 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL INCREASE IN NET ASSETS 754,637,427 702,229,402 295,021,966 440,624,576 166,484,398 79,095,245 NET ASSETS: Beginning of period 992,934,739 290,705,337 487,095,009 46,470,433 323,539,725 244,444,480 ------------- ------------- ------------- ------------- ------------- ------------- End of period $1,747,572,166 $ 992,934,739 $782,116,975 $487,095,009 $490,024,123 $323,539,725 ============= ============= ============= ============= ============= ============= Undistributed net investment income included in net assets at end of period - - - - - - ============= ============= ============= ============= ============= =============
See notes to financial statements. Semi-Annual Report WASATCH FUNDS-STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------- U.S. TREASURY FUND SIX MONTHS ENDED YEAR ENDED MARCH 31, 2002 SEPTEMBER 30, (UNAUDITED) 2001 - -------------------------------------------------------------------------------- OPERATIONS: Net investment income $1,726,792 $3,443,704 Net realized loss on investments (279,638) (872,471) Change in unrealized appreciation (depreciation) on investments (4,263,189) 4,415,177 ------------- ------------- Net increase (decrease) in net assets resulting from operations (2,816,035) 6,986,410 DIVIDENDS PAID FROM: Net investment income (3,600,125) (2,864,508) ------------- ------------- (3,600,125) (2,864,508) CAPITAL SHARE TRANSACTIONS: Shares sold 14,244,851 58,426,480 Shares issued to holders in reinvestment of dividends 3,477,679 2,831,050 Shares redeemed (22,804,350) (57,425,452) Redemption fee 32,661 42,502 ------------- ------------- Net increase (decrease) (5,049,159) 3,874,580 ------------- ------------- TOTAL INCREASE (DECREASE) IN NET ASSETS (11,465,319) 7,996,482 NET ASSETS: Beginning of period 66,194,568 58,198,086 ------------- ------------- End of period $54,729,249 $66,194,568 ============= ============= Undistributed net investment income included in net assets at end of period 846,407 2,719,740 ============= ============= See notes to financial statements. Semi-Annual Report (This page intentionally left blank.) Semi-Annual Report ULTRA GROWTH FUND-FINANCIAL HIGHLIGHTS - --------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED)
YEAR ENDED SEPTEMBER 30, 2002 2001 2000 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $19.15 $27.17 $20.02 $15.10 $21.85 $17.95 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.11) (0.21) (0.25) (0.34) (0.31) (0.35) Net realized and unrealized gains (losses) on securities+ 5.77 (2.42) 8.87 6.00 (4.44) 4.25 --------- --------- --------- --------- --------- --------- TOTAL FROM INVESTMENT OPERATIONS 5.66 (2.63) 8.62 5.66 (4.75) 3.90 LESS DISTRIBUTIONS: Distributions from capital gains (0.92) (5.39) (1.47) (0.74) (2.00) - --------- --------- --------- --------- --------- --------- TOTAL DISTRIBUTIONS (0.92) (5.39) (1.47) (0.74) (2.00) - --------- --------- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $23.89 $19.15 $27.17 $20.02 $15.10 $21.85 ========= ========= ========= ========= ========= ========= TOTAL RETURN(1) 30.47% (10.89)% 46.66% 39.86% (22.07)% 21.75% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $304,663 $86,097 $56,282 $41,205 $43,553 $77,243 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 1.65% 1.75% 1.75% 1.75% 1.75% 1.75% Expenses, before waivers and reimbursements(2) 1.65% 1.79% 1.82% 1.78% 1.90% 1.89% Net investment loss, net of waivers and reimbursements(2) (1.60)% (1.39)% (1.19)% (1.49)% (1.54)% (1.48)% Net investment loss, before waivers and reimbursements(2) (1.60)% (1.43)% (1.26)% (1.52)% (1.69)% (1.62)% Portfolio turnover rate(1) 43% 123% 135% 77% 91% 103%
+For 2002 and 2001, includes $0.01 and $0.07 in redemption fees, respectively (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-FINANCIAL HIGHLIGHTS - ----------------------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED) 2002 - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $8.02 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.08) Net realized and unrealized gains (losses) on securities+ 3.04 -------- TOTAL FROM INVESTMENT OPERATIONS 2.96 LESS DISTRIBUTIONS: Distributions from capital gains (0.18) -------- TOTAL DISTRIBUTIONS (0.18) -------- NET ASSET VALUE, END OF PERIOD $10.80 ======= TOTAL RETURN(2) 37.41% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $33,805 Ratio to average net assets of: Expenses, net of waivers and reimbursements(3) 1.95% Expenses, before waivers and reimbursements(3) 2.34% Net investment loss, net of waivers and reimbursements(3) (1.87)% Net investment loss, before waivers and reimbursements(3) (2.26)% Portfolio turnover rate(2) 57% +For 2002 and 2001, includes $0.02 and $0.02 in redemption fees, respectively (see Note 2). (1) Inception date of the Fund was 12/19/00. (2) Not annualized for periods less than a year. (3) Annualized. See notes to financial statements. Semi-Annual Report GLOBAL SCIENCE & TECHNOLOGY FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------------------ YEAR ENDED SEPTEMBER 30 2001(1) - -------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $10.00 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.07) Net realized and unrealized gains (losses) on securities+ (1.91) -------- TOTAL FROM INVESTMENT OPERATIONS (1.98) LESS DISTRIBUTIONS: Distributions from capital gains - -------- TOTAL DISTRIBUTIONS - -------- NET ASSET VALUE, END OF PERIOD $8.02 ======== TOTAL RETURN(2) (19.80)% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $10,648 Ratio to average net assets of: Expenses, net of waivers and reimbursements(3) 1.95% Expenses, before waivers and reimbursements(3) 3.58% Net investment loss, net of waivers and reimbursements(3) (1.50)% Net investment loss, before waivers and reimbursements(3) (3.13)% Portfolio turnover rate(2) 94% +For 2002 and 2001, includes $0.02 and $0.02 in redemption fees, respectively (see Note 2). (1) Inception date of the Fund was 12/19/00. (2) Not annualized for periods less than a year. (3) Annualized. See notes to financial statements. Semi-Annual Report SMALL CAP GROWTH FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED) 2002 - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $26.18 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.17) Net realized and unrealized gains (losses) on securities+ 7.06 -------- TOTAL FROM INVESTMENT OPERATIONS 6.89 LESS DISTRIBUTIONS: Distributions from capital gains (0.45) -------- TOTAL DISTRIBUTIONS (0.45) -------- NET ASSET VALUE, END OF PERIOD $32.62 ======== TOTAL RETURN(1) 26.63% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $992,628 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 1.28% Expenses, before waivers and reimbursements(2) 1.28% Net investment loss, net of waivers and reimbursements(2) (1.22)% Net investment loss, before waivers and reimbursements(2) (1.22)% Portfolio turnover rate(1) 22% +For 2001, includes $0.02 in redemption fees (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report SMALL CAP GROWTH FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- YEAR ENDED SEPTEMBER 30
2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $34.89 $26.01 $20.79 $29.73 $24.17 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.15) (0.23) (0.20) (0.17) (0.12) Net realized and unrealized gains (losses) on securities+ (2.71) 11.82 8.49 (5.08) 6.90 -------- -------- -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS (2.86) 11.59 8.29 (5.25) 6.78 LESS DISTRIBUTIONS: Distributions from capital gains (5.85) (2.71) (3.07) (3.69) (1.22) -------- -------- -------- -------- -------- TOTAL DISTRIBUTIONS (5.85) (2.71) (3.07) (3.69) (1.22) -------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $26.18 $34.89 $26.01 $20.79 $29.73 ======== ======== ======== ======== ======== TOTAL RETURN(1) (8.61)% 49.63% 48.96% (19.13)% 29.45% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $553,416 $237,812 $145,915 $123,723 $188,965 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 1.36% 1.38% 1.44% 1.48% 1.50% Expenses, before waivers and reimbursements(2) 1.36% 1.38% 1.44% 1.48% 1.54% Net investment loss, net of waivers and reimbursements(2) (0.83)% (0.84)% (0.79)% (0.60)% (0.39)% Net investment loss, before waivers and reimbursements(2) (0.83)% (0.84)% (0.79)% (0.60)% (0.43)% Portfolio turnover rate(1) 40% 72% 46% 56% 48%
+For 2001, includes $0.02 in redemption fees (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report CORE GROWTH FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED) 2002 - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $31.57 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.04) Net realized and unrealized gains (losses) on securities+ 8.72 -------- TOTAL FROM INVESTMENT OPERATIONS 8.68 LESS DISTRIBUTIONS: Dividends from net investment income - Distributions from capital gains (2.14) -------- TOTAL DISTRIBUTIONS (2.14) -------- NET ASSET VALUE, END OF PERIOD $38.11 ======== TOTAL RETURN(1) 29.08% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) 1,747,572 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 1.27% Expenses, before waivers and reimbursements(2) 1.27% Net investment income (loss), net of waivers and reimbursements(2) (0.33)% Net investment income (loss), before waivers and reimbursements(2) (0.33)% Portfolio turnover rate(1) 40% +For 2001, includes $0.01 in redemption fees (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report CORE GROWTH FUND-FINANCIAL HIGHLIGHTS - -------------------------------------------- YEAR ENDED SEPTEMBER 30
2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $28.08 $20.62 $17.00 $22.34 $17.57 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.15) (0.18) (0.21) (0.09) 0.08 Net realized and unrealized gains (losses) on securities+ 5.96 8.12 4.55 (3.60) 6.07 -------- -------- -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS 5.81 7.94 4.34 (3.69) 6.15 LESS DISTRIBUTIONS: Dividends from net investment income - - - (0.03) (0.07) Distributions from capital gains (2.32) (0.48) (0.72) (1.62) (1.31) -------- -------- -------- -------- -------- TOTAL DISTRIBUTIONS (2.32) (0.48) (0.72) (1.65) (1.38) -------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $31.57 $28.08 $20.62 $17.00 $22.34 ======== ======== ======== ======== ======== TOTAL RETURN(1) 22.63% 39.50% 27.28% (17.49)% 37.58% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $992,935 $290,705 $173,118 $153,148 $135,437 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 1.32% 1.38% 1.44% 1.44% 1.50% Expenses, before waivers and reimbursements(2) 1.32% 1.38% 1.44% 1.44% 1.50% Net investment income (loss), net of waivers and reimbursements(2) (0.66)% (0.86)% (1.07)% (0.50)% 0.44% Net investment income (loss), before waivers and reimbursements(2) (0.66)% (0.86)% (1.07)% (0.50)% 0.44% Portfolio turnover rate(1) 51% 75% 79% 63% 81%
+For 2001, includes $0.01 in redemption fees (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report SMALL CAP VALUE FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED) 2002 - ----------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $3.76 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.01) Net realized and unrealized gains (losses) on securities 1.04 -------- TOTAL FROM INVESTMENT OPERATIONS 1.03 LESS DISTRIBUTIONS: Distributions from capital gains (0.10) -------- TOTAL DISTRIBUTIONS (0.10) -------- NET ASSET VALUE, END OF PERIOD $4.69 ======== TOTAL RETURN(2) 28.06% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $782,117 Ratio to average net assets of: Expenses, net of waivers and reimbursements(3) 1.80% Expenses, before waivers and reimbursements(3) 1.80% Net investment loss, net of waivers and reimbursements3 (0.35)% Net investment loss, before waivers and reimbursements(3) (0.35)% Portfolio turnover rate(2) 28% 1Inception date of the Fund was 12/17/97. 2Not annualized for periods less than a year. 3Annualized. See notes to financial statements. Semi-Annual Report SMALL CAP VALUE FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- YEAR ENDED SEPTEMBER 30
2001 2000 1999 1998(1) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $3.51 $2.43 $1.80 $2.00 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss - (0.02) (0.04) (0.01) Net realized and unrealized gains (losses) on securities 0.56 1.19 0.67 (0.19) -------- -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS 0.56 1.17 0.63 (0.20) LESS DISTRIBUTIONS: Distributions from capital gains (0.31) (0.09) - - -------- -------- -------- -------- TOTAL DISTRIBUTIONS (0.31) (0.09) - - -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $3.76 $3.51 $2.43 $1.80 ======== ======== ======== ======== TOTAL RETURN(2) 18.04% 49.94% 35.00% (10.00)% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $487,095 $46,470 $16,770 $14,306 Ratio to average net assets of: Expenses, net of waivers and reimbursements(3) 1.92% 1.95% 1.95% 1.95% Expenses, before waivers and reimbursements(3) 1.92% 2.09% 2.18% 2.52% Net investment loss, net of waivers and reimbursements(3) (0.31)% (1.02)% (1.54)% (1.02)% Net investment loss, before waivers and reimbursements(3) (0.31)% (1.16)% (1.77)% (1.59)% Portfolio turnover rate(2) 41% 67% 106% 114%
(1) Inception date of the Fund was 12/17/97. (2) Not annualized for periods less than a year. (3) Annualized. See notes to financial statements. Semi-Annual Report MICRO CAP FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED) 2002 NET ASSET VALUE, BEGINNING OF PERIOD $5.64 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.07) Net realized and unrealized gains (losses) on securities 1.76 -------- TOTAL FROM INVESTMENT OPERATIONS 1.69 LESS DISTRIBUTIONS: Distributions from capital gains (0.60) -------- TOTAL DISTRIBUTIONS (0.60) -------- NET ASSET VALUE, END OF PERIOD $6.73 ======== TOTAL RETURN(1) 32.44% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $490,024 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 2.27% Expenses, before waivers and reimbursements(2) 2.27% Net investment loss, net of waivers and reimbursements(2) (2.17)% Net investment loss, before waivers and reimbursements(2) (2.17)% Portfolio turnover rate(1) 30% (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report MICRO CAP FUND-FINANCIAL HIGHLIGHTS - ------------------------------------------- YEAR ENDED SEPTEMBER 30
2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $6.53 $4.41 $3.59 $4.29 $3.15 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.08) (0.09) (0.09) (0.10) (0.04) Net realized and unrealized gains (losses) on securities 0.74 2.63 1.27 (0.27) 1.36 -------- -------- -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS 0.66 2.54 1.18 (0.37) 1.32 LESS DISTRIBUTIONS: Distributions from capital gains (1.55) (0.42) (0.36) (0.33) (0.18) -------- -------- -------- -------- -------- TOTAL DISTRIBUTIONS (1.55) (0.42) (0.36) (0.33) (0.18) -------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $5.64 $6.53 $4.41 $3.59 $4.29 ======== ======== ======== ======== ======== TOTAL RETURN(1) 16.32% 63.88% 37.73% (8.75)% 44.58% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $323,540 $244,444 $144,875 $117,533 $157,907 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 2.32% 2.38% 2.46% 2.50% 2.50% Expenses, before waivers and reimbursements(2) 2.32% 2.38% 2.46% 2.51% 2.58% Net investment loss, net of waivers and reimbursements(2) (1.76)% (1.76)% (2.22)% (2.28)% (1.64)% Net investment loss, before waivers and reimbursements(2) (1.76)% (1.76)% (2.22)% (2.29)% (1.72)% Portfolio turnover rate(1) 58% 69% 57% 81% 99%
(1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report U.S. TREASURY FUND-FINANCIAL HIGHLIGHTS - -------------------------------------------- SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED) 2002 NET ASSET VALUE, BEGINNING OF PERIOD $12.97 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss 0.42 Net realized and unrealized gains (losses) on securities+ (1.00) -------- TOTAL FROM INVESTMENT OPERATIONS (0.58) LESS DISTRIBUTIONS: Dividends from net investment income (0.77) Distributions from capital gains - -------- TOTAL DISTRIBUTIONS (0.77) -------- NET ASSET VALUE, END OF PERIOD $11.62 ======== TOTAL RETURN(1) (4.50)% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $54,729 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 0.75% Expenses, before waivers and reimbursements(2) 0.97% Net investment loss, net of waivers and reimbursements2 5.60% Net investment loss, before waivers and reimbursements(2) 5.38% Portfolio turnover rate(1) 5% +For 2002 and 2001, includes $0.01 and $0.01 in redemption fees, respectively (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. U.S. TREASURY FUND-FINANCIAL HIGHLIGHTS - -------------------------------------------- YEAR ENDED SEPTEMBER 30
2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $12.00 $11.68 $13.42 $11.32 $10.21 INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss 0.65 0.66 0.61 0.27 0.61 Net realized and unrealized gains (losses) on securities+ 0.88 0.39 (2.01) 2.39 0.73 -------- -------- -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS 1.53 1.05 (1.40) 2.66 1.34 LESS DISTRIBUTIONS: Dividends from net investment income (0.56) (0.73) (0.28) (0.56) (0.23) Distributions from capital gains - - (0.06) - - -------- -------- -------- -------- -------- TOTAL DISTRIBUTIONS (0.56) (0.73) (0.34) (0.56) (0.23) -------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $12.97 $12.00 $11.68 $13.42 $11.32 ======== ======== ======== ======== ======== TOTAL RETURN(1) 12.89% 9.84% (10.65)% 24.30% 13.23% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in thousands) $66,195 $58,198 $76,999 $67,856 $11,205 Ratio to average net assets of: Expenses, net of waivers and reimbursements(2) 0.75% 0.75% 0.75% 0.75% 0.75% Expenses, before waivers and reimbursements(2) 0.95% 0.97% 0.95% 0.95% 1.22% Net investment loss, net of waivers and reimbursements(2) 5.34% 5.35% 4.96% 5.06% 5.97% Net investment loss, before waivers and reimbursements(2) 5.14% 5.13% 4.76% 4.86% 5.50% Portfolio turnover rate(1) 41% 16% 39% 5% 19%
+For 2002 and 2001, includes $0.01 and $0.01 in redemption fees, respectively (see Note 2). (1) Not annualized for periods less than a year. (2) Annualized. See notes to financial statements. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) 1. ORGANIZATION - ----------------- Wasatch Funds, Inc. (the "Funds") is an open-end, registered management investment company under the Investment Company Act of 1940. The Ultra Growth, Global Science & Technology, Small Cap Growth, Core Growth, Small Cap Value and Micro Cap Funds (collectively the "Equity Funds") are non-diversified portfolios and the Wasatch-Hoisington U.S. Treasury ("U.S. Treasury") Fund is a diversified portfolio of Wasatch Funds. Each of the Funds maintains its own investment objective. The Funds have entered into an investment advisory agreement with Wasatch Advisors, Inc. (the "Advisor") as investment advisor. 2. SIGNIFICANT ACCOUNTING POLICIES - ----------------------------------- The financial statements have been prepared in conformity with accounting principles generally accepted in the United States. The following is a summary of the more significant of such policies. VALUATION OF SECURITIES-Securities traded on a recognized stock exchange are valued at the last sale price on the exchange on which the securities are primarily traded or at the last sale price on the national securities market. Securities for which there were no transactions are valued at the closing bid price. Debt securities (other than short-term instruments) are valued at prices furnished by a pricing service, subject to review and possible revision by the Advisor. Short-term securities are valued at either original cost or amortized cost, both of which approximate current market value. Restricted securities, private placements and other illiquid securities for which market value quotations are not readily available are valued at fair market value as determined by a designated Pricing Committee under the supervision of the Board of Directors and in accordance with Board-approved Pricing Procedures. FOREIGN CURRENCY TRANSLATIONS-Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. Foreign denominated assets may involve greater risks than domestic transactions, including currency, political and economic, regulatory and market risks. INVESTMENT IN SECURITIES-Security transactions are accounted for on the trade date. Gains or losses on securities sold are determined on the identified cost basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income is recorded on the accrual basis. SHORT SALES-To a limited extent, the Equity Funds may make short sales of securities listed on one or more U.S. or foreign securities exchanges or on Nasdaq or EASDAQ. A short sale means a Fund sells a security it does not own in anticipation of a decline in the stock's price. The Fund must borrow the security to deliver to the buyer upon the short sale. The Fund is then obligated to Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) replace the borrowed security by purchasing it at a later date. The Fund will experience a loss if the market price of the security increases between the date of the short sale and the date the security is replaced. All short sales must be fully collateralized. The Funds maintain the collateral in a segregated account consisting of cash, U.S. government securities or other liquid assets sufficient to collateralize the market value of its short positions. At March 31, 2002, the Equity Funds did not have any open short positions. OPTION TRANSACTIONS-For hedging purposes, the Equity Funds may buy and sell put and call options, write covered put and call options on portfolio securities and write over-the-counter options where the completion of the obligation is dependent upon the credit standing of another party. The risk in writing a call option is that a Fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that a Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that a Fund pays a premium whether or not the option is exercised. A Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily and unrealized appreciation or depreciation is recorded. A Fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. FEDERAL INCOME TAXES-It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income to shareholders. EXPENSES-The Funds are charged for expenses that are directly attributable to them, such as advisory and custodian fees. Expenses that are not directly attributable to a Fund are generally allocated among the Funds in proportion to their respective net assets. USE OF MANAGEMENT ESTIMATES-The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported changes in net assets during the reporting period. Actual results could differ from those estimates. REDEMPTION FEES-The Funds will deduct a fee of 2.00% from redemption proceeds on shares of the Funds held less than two months. The redemption fee is treated as additional paid-in capital. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) 3. DISTRIBUTIONS - ------------------ Dividends from net investment income are declared and paid annually. Distributions of net realized gains, if any, will be declared and paid at least annually. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations, which may differ from generally accepted accounting principles. To the extent these book and tax differences are permanent in nature, such amounts are reclassified among paid-in capital in excess of par value, undistributed net investment income and undistributed net realized gain (loss) on investments. Accordingly, at March 31, 2002, reclassifications were recorded to increase undistributed net income in excess of par by $1,434,450, $238,786, $5,083,884, $2,055,474, $986,216, $4,745,616 and $0, decrease undistributed net realized gain on investments by $3,207,924, $308,780, $6,312,224, $18,546,913, $4,888,573, $7,622,848 and $0 and increase paid-in capital by $1,773,474, $69,994, $1,228,340, $16,491,439, $3,902,357, $2,877,232 and $0 for the Ultra Growth, Global Science & Technology, Small Cap Growth, Core Growth, Small Cap Value, Micro Cap and U.S. Treasury Funds, respectively. 4. CAPITAL STOCK - ------------------- Transactions in shares of capital stock were as follows:
SIX MONTHS ENDED MARCH 31, 2002 GLOBAL ULTRA SCIENCE & SMALL CAP CORE SMALL CAP U.S. GROWTH TECHNOLOGY GROWTH GROWTH VALUE MICRO CAP TREASURY FUND FUND FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 9,631,234 3,402,928 11,746,130 19,268,802 57,338,651 14,242,702 1,138,392 Dividends reinvested 210,301 27,973 339,016 2,098,403 3,261,595 6,140,084 296,730 Shares redeemed (1,584,944) (1,628,681) (2,792,473) (6,965,472) (23,642,372) (4,945,504) (1,828,190) ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net increase 8,256,591 1,802,220 9,292,673 14,401,733 36,957,874 15,437,282 (393,068) ============ ============ ============ ============ ============ ============ ============
Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED)
YEAR ENDED SEPTEMBER 30, 2001 GLOBAL ULTRA SCIENCE & SMALL CAP CORE SMALL CAP U.S. GROWTH TECHNOLOGY GROWTH GROWTH VALUE MICRO CAP TREASURY FUND FUND FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold 4,918,424 1,864,018 17,031,540 31,944,300 158,439,631 20,350,429 4,668,016 Dividends reinvested 519,953 - 1,427,720 953,103 1,411,468 12,540,703 226,665 Shares redeemed (3,013,865) (536,496) (4,137,252) (11,794,560) (43,381,522) (13,011,118) (4,639,439) ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net increase 2,424,512 1,327,522 14,322,008 21,102,843 116,469,577 19,880,014 255,242 ============ ============ ============ ============ ============ ============ ============
*Inception date of the Fund was December 19, 2000. 5. PURCHASES AND SALES OF SECURITIES - --------------------------------------- Purchases and sales of investment securities, excluding U.S. government and short-term securities, for the six months ended March 31, 2002 are summarized below:
GLOBAL ULTRA SCIENCE & SMALL CAP CORE SMALL CAP U.S. GROWTH TECHNOLOGY GROWTH GROWTH VALUE MICRO CAP TREASURY FUND FUND FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ PURCHASES $209,889,767 $29,916,475 $443,661,485 $567,752,973 $193,908,829 $141,350,771 - SALES $(64,913,706) $(11,987,296) $(153,054,211) $(423,685,146) $(135,714,103) $(106,223,141) -
The only purchases and sales of U.S. government securities occurred in the U.S. Treasury Fund and were $2,885,923 and $10,053,538, respectively. The Ultra Growth, Global Science & Technology, Small Cap Growth, Core Growth, Small Cap Value, Micro Cap and U.S. Treasury Funds' tax basis in their investments is $294,683,889, $34,584,457, $849,594,200, $1,455,666,021, $650,380,975, $365,366,633 and $56,094,652, respectively. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) As of March 31, 2002, gross unrealized appreciation and (depreciation) for federal income tax purposes were as follows:
GLOBAL ULTRA SCIENCE & SMALL CAP CORE SMALL CAP U.S. GROWTH TECHNOLOGY GROWTH GROWTH VALUE MICRO CAP TREASURY FUND FUND FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ UNREALIZED APPRECIATION $41,819,872 $3,535,010 $210,356,272 $352,495,073 $148,972,063 $148,133,883 $806,185 UNREALIZED DEPRECIATION (24,520,271) (4,394,340) (65,873,551) (39,868,257) (19,053,932) (19,994,483) (2,785,655) ------------- ------------- ------------- ------------- ------------- ------------- ------------- NET UNREALIZED APPRECIATION (DEPRECIATION) $17,299,601 $(859,330) $144,482,721 $312,626,816 $129,918,131 $128,139,400 $(1,979,470) ============ ============ ============ ============ ============ ============ ============
- -------------------------------------------------------------------------------- 6. INVESTMENT ADVISORY - ------------------------- As the Funds' investment advisor, the Advisor receives a monthly fee calculated on average daily net assets. For the six months ended March 31, 2002, management fees for the Ultra Growth, Global Science & Technology, Small Cap Growth, Core Growth, Small Cap Value, Micro Cap and U.S. Treasury Funds were 1.25%, 1.50%, 1.00%, 1.00%, 1.50%, 2.00% and 0.50% of the average daily net assets of each Fund, respectively. The Advisor has voluntarily agreed to limit the expenses of the Ultra Growth, Global Science & Technology, Small Cap Growth, Core Growth, Small Cap Value, Micro Cap and U.S. Treasury Funds to 1.75%, 1.95%, 1.50%, 1.50%, 1.95%, 2.50% and 0.75% of average daily net assets, respectively. For the six months ended March 31, 2002, the Advisor reimbursed $49,754 for the Global Science & Technology Fund and $67,094 for the U.S. Treasury Fund. 7. FEDERAL FILING FEES - ------------------------- On January 16, 2002, the President signed the "Investor and Capital Markets Fee Relief Act" which substantially reduced filing fee rates under Section 6(b) of the Securities Act of 1933, retroactively effective to October 1, 2001. As a result, filing fees accrued for the Funds in fiscal year 2001 have been reduced in fiscal year 2002. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) 8. TRANSACTIONS WITH AFFILIATES - ---------------------------------- The following is an analysis of transactions for the six months ended March 31, 2002 in the Small Cap Growth, Core Growth, Small Cap Value and Micro Cap Funds with "affiliated companies" as defined by the Investment Company Act of 1940: SMALL CAP GROWTH FUND AMOUNT OF AMOUNT OF DIVIDENDS GAIN (LOSS) CREDITED REALIZED TO ON INCOME SALE OF SHARE ACTIVITY FOR THE SHARES ------------------------------------- SIX MOS. FOR THE SIX BALANCE BALANCE ENDED MOS. ENDED SECURITY NAME 9/30/01 PURCHASES SALES 3/31/02 3/31/02 3/31/02 - -------------------------------------------------------------------------------- Charles River Associates Incorp. 240,140 224,225 - 464,365 - - National Dentex Corp. 215,350 400 - 215,750 - - CORE GROWTH FUND AMOUNT OF AMOUNT OF DIVIDENDS GAIN (LOSS) CREDITED REALIZED TO ON INCOME SALE OF SHARE ACTIVITY FOR THE SHARES ------------------------------------- SIX MOS. FOR THE SIX BALANCE BALANCE ENDED MOS. ENDED SECURITY NAME 9/30/01 PURCHASES SALES 3/31/02 3/31/02 3/31/02 - -------------------------------------------------------------------------------- AmeriCredit Corp. 2,505,637 5,770,125 5,112,225 3,163,537 - $8,258,531 Orthodontic Centers of America, Inc. 2,694,481 688,975 306,825 3,076,631 - $(406,287) Pediatrix Medical Group Inc. 1,211,275 429,325 116,125 1,524,475 - $2,528,965 Rent-A-Center, Inc.2,958,650 186,875 - 3,145,525 - - United Rentals, Inc. 4,259,250 125,325 1,572,475 2,812,100* - $3,641,768 Watson Wyatt & Company Holdings 561,000 85,325 - 646,325* - - *No longer affiliated as of March 31, 2002. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) SMALL CAP VALUE FUND AMOUNT OF AMOUNT OF DIVIDENDS GAIN (LOSS) CREDITED REALIZED TO ON INCOME SALE OF SHARE ACTIVITY FOR THE SHARES ------------------------------------- SIX MOS. FOR THE SIX BALANCE BALANCE ENDED MOS. ENDED SECURITY NAME 9/30/01 PURCHASES SALES 3/31/02 3/31/02 3/31/02 - -------------------------------------------------------------------------------- Friedman's, Inc. 752,420 431,600 10,000 1,174,020 $37,847 $(6,602) Kadant, Inc. 684,350 67,700 - 752,050 - - Maxwell Shoe Company Inc. 512,000 - - 512,000 - - MicroFinancial Incorporated 1,100,100 - 29,875 1,070,225 $108,516 $(123,414) Nara Bancorp, Inc. - 335,550 - 335,550 $33,555 - OrthAlliance, Inc.(1) 854,075 - 854,075 -* - - PCD Inc. 650,664 - - 650,664 - - Peak International Limited 419,275 525,750 21,700 923,325 - $33,030 Supertex, Inc. 626,650 - 340,175 286,475* - $917,441 Whitehall Jewellers, Inc. 857,485 441,933 - 1,299,418 - - *No longer affiliated as of March 31, 2002. (1) OrthAlliance, Inc. was acquired by Orthodontic Centers of America, Inc. on 11/7/01. MICRO CAP FUND AMOUNT OF AMOUNT OF DIVIDENDS GAIN (LOSS) CREDITED REALIZED TO ON INCOME SALE OF SHARE ACTIVITY FOR THE SHARES ------------------------------------- SIX MOS. FOR THE SIX BALANCE BALANCE ENDED MOS. ENDED SECURITY NAME 9/30/01 PURCHASES SALES 3/31/02 3/31/02 3/31/02 - -------------------------------------------------------------------------------- Aramex International Limited1 273,150 6,000 279,150 -* - $234,349 Bradley Pharmaceuticals,Inc.425,250 49,475 368,475 106,250* - $5,211,235 IRIDEX Corporation 853,600 - - 853,600 - - National Dentex Corp. 323,550 5,964 - 329,514 - - PSi Technologies Holdings, Inc. ADR 449,400 333,500 - 782,900 - - Rainbow Rentals, Inc. 356,300 46,100 - 402,400 - - YOCREAM International, Inc. 106,000 11,000 - 117,000 - - Young Innovations, Inc. 336,000 65,200 8,100 393,100 - $97,108 *No longer affiliated as of March 31, 2002. (1) Aramex International Limited was acquired by Rasmala Buyout Fund LP on 2/7/02. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) 9. RESTRICTED SECURITIES - --------------------------- The Funds may own investments that were purchased through private placement transactions (or under Rule 144A as noted) and cannot be sold without prior registration under the Securities Act of 1933 or may be limited due to certain restrictions. The costs of registering such securities are paid by the issuer. At March 31, 2002, the Funds held restricted preferred stocks (or common stocks as noted) as follows: RESTRICTED SECURITIES VALUE AS ACQUISITION ACQUISITION FAIR % OF DATE COST VALUE NET ASSETS ULTRA GROWTH FUND IQ4Hire, Inc. 9/7/00 $110,000 $ 440 - Metro-Optix, Inc., Series B 6/16/00 $542,768 226,975 0.07% Metro-Optix, Inc., Series C 7/16/01 - 9/7/01 $507,400 445,050 0.15% Northwest Biotherapeutics, Inc., Series D 6/13/01 $145,000 99,980 0.03% SiRF Technology Holdings, Series H 12/20/01 $806,000 806,000 0.27% ----------- ------- $1,578,445 0.52% - -------------------------------------------------------------------------------- GLOBAL SCIENCE & TECHNOLOGY FUND Metro-Optix, Inc., Series C 7/16/01 - 9/7/01 $198,240 $173,880 0.52% Northwest Biotherapeutics, Inc., Series D 6/13/01 $35,000 24,133 0.07% SiRF Technology Holdings, Series H 12/20/01 $277,875 277,875 0.82% ----------- ------- $475,888 1.41% - -------------------------------------------------------------------------------- SMALL CAP GROWTH FUND Metro-Optix, Inc., Series B 6/16/00 $1,511,483 $632,075 0.06% Metro-Optix, Inc., Series C 7/16/01 - 9/7/01 $3,374,441 2,959,785 0.30% SiRF Technology Holdings, Series H 12/20/01 $2,616,120 2,616,120 0.26% ----------- ------- $ 6,207,980 0.62% - -------------------------------------------------------------------------------- CORE GROWTH FUND Saxon Capital, Inc.(1) 6/29/01 $10,775,000 $15,914,675 0.91% - -------------------------------------------------------------------------------- SMALL CAP VALUE FUND Saxon Capital, Inc.(1) 6/29/01 - 7/27/01 $6,574,390 $ 9,695,028 1.24% - -------------------------------------------------------------------------------- MICRO CAP FUND Metro-Optix, Inc., Series B 6/16/00 $474,854 $198,575 0.04% (1) Common stock. Rule 144A Security. Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) 10. RESULTS OF THE SHAREHOLDER MEETING - ----------------------------------------- A special meeting of shareholders of the Funds was held on January 24, 2002. The Funds listed below each issue are those entitled to vote on that issue. The matters were voted on by the shareholders of record as of December 10, 2001 and the results of the vote at the shareholder meeting held January 24, 2002 were as follows: RESULTS OF THE SHAREHOLDER MEETING BROKER FOR AGAINST ABSTAIN NON-VOTE - -------------------------------------------------------------------------------- 1. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FUNDS. Ultra Growth 3,092,939 283,999 64,929 - Global Science & Technology 1,153,957 51,470 12,322 - Small Cap Growth 13,541,397 948,090 250,377 - Core Growth 16,967,940 1,045,753 305,988 - Small Cap Value 60,844,670 4,604,543 1,260,762 - Micro Cap 39,635,440 2,252,776 523,012 - U.S. Treasury 3,681,803 226,312 57,136 - - -------------------------------------------------------------------------------- 2. FOR ALL FUNDS (EXCEPT THE GLOBAL SCIENCE & TECHNOLOGY AND U.S. TREASURY FUNDS), TO APPROVE OR DISAPPROVE A PROPOSAL TO ELIMINATE THE CURRENT PROHIBITION ON SHORT SELLING OF SECURITIES, SO THAT THIS POLICY WILL BE THE SAME FOR ALL OF THE EQUITY FUNDS. (THE "EQUITY FUNDS" INCLUDE ALL OF THE FUNDS EXCEPT THE U.S. TREASURY FUND.) Ultra Growth 2,383,513 298,153 79,577 680,624 Small Cap Growth 10,036,155 1,272,067 310,644 3,120,998 Core Growth 12,803,495 1,644,760 387,093 3,484,333 Small Cap Value 47,040,115 5,575,591 1,309,883 12,784,386 Micro Cap 30,701,648 2,584,282 629,580 8,495,718 - -------------------------------------------------------------------------------- 3. FOR ALL OF THE EQUITY FUNDS, TO APPROVE OR DISAPPROVE A PROPOSAL TO MODIFY THE LIMITATIONS ON BORROWING SO THAT THIS POLICY WILL BE THE SAME FOR ALL OF THE EQUITY FUNDS AND WILL ALLOW THE EQUITY FUNDS TO BORROW TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW. Ultra Growth 2,391,320 299,402 70,521 680,624 Global Science & Technology 876,841 37,617 15,738 287,553 Small Cap Growth 10,203,054 1,118,309 297,504 3,120,997 Core Growth 12,798,351 1,641,745 395,252 3,484,333 Small Cap Value 47,187,276 5,346,429 1,391,884 12,784,386 Micro Cap 30,487,520 2,823,367 604,623 8,495,718 Semi-Annual Report WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS - -------------------------------------------- MARCH 31, 2002 (UNAUDITED) RESULTS OF THE SHAREHOLDER MEETING-CONTINUED BROKER FOR AGAINST ABSTAIN NON-VOTE - -------------------------------------------------------------------------------- 4. FOR ALL OF THE EQUITY FUNDS, TO APPROVE OR DISAPPROVE A PROPOSAL TO MODIFY THE LIMITATIONS ON ISSUING SENIOR SECURITIES SO THAT THIS POLICY WILL BE THE SAME FOR ALL OF THE EQUITY FUNDS AND WILL BE CONSISTENT WITH APPLICABLE LAW. Ultra Growth 2,419,888 262,703 78,652 680,624 Global Science & Technology 862,442 50,454 17,300 287,553 Small Cap Growth 10,333,463 959,971 325,433 3,120,997 Core Growth 12,969,793 1,409,757 455,798 3,484,333 Small Cap Value 47,335,606 5,004,013 1,585,970 12,784,386 Micro Cap 30,914,503 2,362,689 638,318 8,495,718 - -------------------------------------------------------------------------------- 5. FOR ALL OF THE EQUITY FUNDS, TO APPROVE OR DISAPPROVE A PROPOSAL TO ELIMINATE THE CURRENT PROHIBITION ON PURCHASING SECURITIES ON MARGIN SO THE FUNDS WILL BE LIMITED ONLY BY APPLICABLE LAW. Ultra Growth 2,359,723 321,229 80,291 680,624 Global Science & Technology 859,848 49,202 21,146 287,553 Small Cap Growth 9,905,211 1,416,130 297,525 3,120,998 Core Growth 12,488,654 1,929,399 417,294 3,484,334 Small Cap Value 46,031,091 6,584,737 1,309,761 12,784,386 Micro Cap 30,045,419 3,306,294 563,797 8,495,718 Semi-Annual Report WASATCH FUNDS-DIRECTORS AND OFFICERS - ------------------------------------- MARCH 31, 2002 NAME, ADDRESS, POSITION(S) HELD TERM OF OFFICE AND AND AGE WITH FUND LENGTH OF TIME SERVED - -------------------------------------------------------------------------------- INDEPENDENT DIRECTORS: JAMES U. JENSEN Director Indefinite NPS Pharmaceuticals, Inc. Served as Director 420 Chipeta Way since 1986 Salt Lake City, UT 84108 Age: 57 WILLIAM R. SWINYARD, PH.D. Director Indefinite Management Office Served as Director 680 Tanner Building since 1986 Brigham Young University Provo, UT 84602 Age: 61 - -------------------------------------------------------------------------------- INTERESTED DIRECTORS*: SAMUEL S. STEWART, JR., PH.D., CFA President, Chairman Indefinite 150 Social Hall Avenue of the Board and Served as President, Suite 400 Director Chairman of the Salt Lake City, UT 84111 Board and Director Age: 59 since 1986 JEFF S. CARDON, CFA Executive Vice Indefinite 150 Social Hall Avenue President and Served as Vice Suite 400 Director President and Salt Lake City, UT 84111 Director Age: 44 since 1986 - -------------------------------------------------------------------------------- OFFICERS: VENICE F. EDWARDS, CFA Secretary/Treasurer Indefinite 150 Social Hall Avenue Served as Suite 400 Secretary/Treasurer Salt Lake City, UT 84111 since 1996 Age: 51 Semi-Annual Report WASATCH FUNDS-DIRECTORS AND OFFICERS - ------------------------------------- MARCH 31, 2002 NUMBER OF PORTFOLIOS PRINCIPAL OCCUPATION(S) IN COMPLEX OVERSEEN OTHER DIRECTORSHIPS DURING PAST 5 YEARS BY DIRECTOR HELD BY DIRECTOR - -------------------------------------------------------------------------------- Vice President of Corporate 7 None Development and Legal Affairs, NPS Pharmaceuticals, Inc. Professor of Business Management and 7 None Holder of the Fred G. Meyer Chair of Marketing, Brigham Young University since 1978; Founding partner of Struman and Associates, Inc., a management consulting firm since 1983. - -------------------------------------------------------------------------------- Chairman of the Board and Director 7 None of Research for Wasatch Advisors, Inc. (the "Advisor") since 1975; Professor of Finance at the University of Utah from 1975 through 2000. President and Treasurer for the Advisor 7 None since 1999; Director of the Advisor since 1985; Security Analyst for the Advisor since 1980. - -------------------------------------------------------------------------------- Compliance Officer since 1995 and None None Secretary of the Advisor since 1999; Portfolio Manager for the Advisor since 1983. - -------------------------------------------------------------------------------- *INTERESTED DIRECTORS SERVE AS DIRECTORS AND OFFICERS OF WASATCH ADVISORS, INC. Additional information about the Funds' directors is provided in the Statement of Additional Information and is available, without charge, upon request, by calling 1 (800) 551-1700. 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