N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-4920

WASATCH FUNDS, INC.

(Exact name of registrant as specified in charter)

150 Social Hall Avenue

4th Floor

Salt Lake City, Utah 84111

(Address of principal executive offices)(Zip code)

(Name and Address of Agent for Service)	Copy to:
Samuel S. Stewart, Jr. Wasatch Funds, Inc. 150 Social Hall Avenue, 4th Floor Salt Lake City, Utah 84111	Eric F. Fess, Esq. Chapman & Cutler LLP 111 West Monroe Street Chicago, IL 60603

Registrant’s telephone number, including area code: (801) 533-0777

Date of fiscal year end: September 30

Date of reporting period: September 30, 2009

Item 1: Report to Shareholders.

  ANNUAL REPORT

SEPTEMBER 30, 2009	EQUITY FUNDS
	WASATCH CORE GROWTH FUND
	WASATCH EMERGING MARKETS SMALL CAP FUND
	WASATCH GLOBAL OPPORTUNITIES FUND
	WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND
	WASATCH HERITAGE GROWTH FUND
	WASATCH HERITAGE VALUE FUND
	WASATCH INTERNATIONAL GROWTH FUND
	WASATCH INTERNATIONAL OPPORTUNITIES FUND
	WASATCH MICRO CAP FUND
	WASATCH MICRO CAP VALUE FUND
	WASATCH SMALL CAP GROWTH FUND
	WASATCH SMALL CAP VALUE FUND
	WASATCH STRATEGIC INCOME FUND
	WASATCH ULTRA GROWTH FUND
	WASATCH-1ST SOURCE INCOME EQUITY FUND
	WASATCH-1ST SOURCE LONG/SHORT FUND
	BOND FUNDS (Sub-Advised)
	WASATCH-HOISINGTON U.S. TREASURY FUND
	WASATCH-1ST SOURCE INCOME FUND

WASATCH FUNDS, INC.

Salt Lake City, Utah

www.wasatchfunds.com

800.551.1700

TABLE OF CONTENTS

Letter to Shareholders	2
Wasatch Core Growth Fund® Management Discussion	4
Portfolio Summary	5
Wasatch Emerging Markets Small Cap Fund™ Management Discussion	6
Portfolio Summary	7
Wasatch Global Opportunities Fund™  Management Discussion	8
Portfolio Summary	9
Wasatch Global Science  & Technology Fund® Management Discussion	10
Portfolio Summary	11
Wasatch Heritage Growth Fund® Management Discussion	12
Portfolio Summary	13
Wasatch Heritage Value Fund™ Management Discussion	14
Portfolio Summary	15
Wasatch International Growth Fund® Management Discussion	16
Portfolio Summary	17
Wasatch International Opportunities Fund® Management Discussion	18
Portfolio Summary	19
Wasatch Micro Cap Fund® Management Discussion	20
Portfolio Summary	21
Wasatch Micro Cap Value Fund® Management Discussion	22
Portfolio Summary	23
Wasatch Small Cap Growth Fund® Management Discussion	24
Portfolio Summary	25
Wasatch Small Cap Value Fund® Management Discussion	26
Portfolio Summary	27
Wasatch Strategic Income Fund® Management Discussion	28
Portfolio Summary	29
Wasatch Ultra Growth Fund® Management Discussion	30
Portfolio Summary	31
Wasatch-1st Source Income Equity Fund™  Management Discussion	32
Portfolio Summary	33
Wasatch-1st Source Long/Short Fund™ Management Discussion	34
Portfolio Summary	35
Wasatch-Hoisington U.S. Treasury Fund® Management Discussion	36
Portfolio Summary	37
Wasatch-1st Source Income Fund™ Management Discussion	38
Portfolio Summary	39
Operating Expenses	40
Schedules of Investments	42
Statements of Assets and Liabilities	88
Statements of Operations	92
Statements of Changes in Net Assets	96
Financial Highlights	104
Notes to Financial Statements	113
Report of Independent Registered Public Accounting Firm	131
Supplemental Information	132
Management of the Company	132
Proxy Voting Policies, Procedures and Record	134
Quarterly Portfolio Holdings Disclosure on Form N-Q	134
Advisory and Service Contract Approval	134
Service Providers	137
Guide to Understanding Financial Statements	138
Contact Wasatch	139

This material must be accompanied or preceded by a prospectus.

Please read the prospectus carefully before you invest.

Wasatch Funds are distributed by ALPS Distributors, Inc.

1

LETTER TO SHAREHOLDERS

  Samuel S. Stewart, Jr. PhD, CFA President of
Wasatch Funds DEAR FELLOW SHAREHOLDERS:   A WILD YEAR   A year ago we were talking about the Lehman collapse and its likely impact on the economy. The outlook was bleak as we prepared for a prolonged recession. What I didn’t foresee was the level of fear that would envelop the market when talking heads got stirred up and began speculating about the next great depression and a global economic collapse. In March the S&P 500* finally turned north, after bottoming more than 55% off its peak, as the first signals began to emerge that the world might not be coming to an end. Positive economic signs have continued to trickle in since then and the market has moved steadily up — with somewhat surprising conviction given how rapidly it had declined. As of September 30th the S&P 500 was actually within 7% of where it started a year earlier.  

Clearly it’s been a very turbulent year, but it is now beginning to feel like we’ve made it across to the other side. However, it’s important not to get ahead of ourselves. We may have crossed what seemed like a white-water river, but we still have a steep bank to climb before the economy reaches safety. In many respects we are now back to where we were pre-Lehman, still facing a tough period of prolonged economic challenge.

THE ECONOMY & MARKET TODAY

There clearly appears to be an economic recovery underway. We hear more and more about “green shoots” (early signs of recovery) turning into “green stalks” (more substantial manifestations of recovery). Here are a number of positive signs that I see:

• The credit market bellwether that I have been referring to in recent quarters is finally showing traction, as credit is becoming more available to reasonable borrowers at reasonable terms

• The global stimulus efforts are having an impact

• Housing appears that it may have bottomed

• The rate of job loss seems to be slowing

• Pockets of retail sales are beginning to pick up

• Gross national product (GNP)** is growing again

• The stock market is functioning better, including the re-emergence of initial public offerings (IPOs)†

But as mentioned, we still have significant work to do, and I believe we will see a slow-growth economy for some time due to continuing fundamental challenges:

• The financial system is far from fixed

• The economy continues to deleverage,†† with less demand for credit and tighter restrictions on those seeking it

• Unemployment is at high absolute levels, reaching a 26 year high of 9.8% as of September 30, 2009

• Budget gaps have increased at local, state, and national levels

• Commercial real estate is still weak

Investors have focused on the positives, taking note of the green stalks and the market has risen quickly over the last quarter. In March the economy was uncertain, but stock valuations were too compelling to overlook. Now an economic recovery feels like its underway, but stocks may be ahead of the recovery as it is much harder to find compelling valuations.

WASATCH PERFORMANCE

In the extreme market volatility of last fall we made a conscious decision to remain very disciplined in our investment approach. We even tightened our process a bit as we:

• Moved our Portfolio Managers into the same room to increase multiple eyes collaboration among our most experienced investors

• Reviewed our assumptions on every investment, with a keen focus on the long-term prospects of each company given the changing economic environment

• Increased our conversations with management teams to keep a close pulse on the economic impact being felt by our companies

• Narrowed our investment focus to our best ideas

As a result, our overall name count continued to decrease, our positions moved toward higher quality companies, and our confidence in our portfolio holdings increased. I believe our solid performance over the last 12 months was a direct result of this discipline. For the year ended September 30, 2009, our equity funds were up +6.33% on average, with 12 of 16 funds outperforming their benchmark indexes, while the S&P 500 was down -6.91% and the Russell 2000 Index‡ was down -9.55%. In such an uncertain year we have been pleased to see our steady approach rewarded.

The past year really played out in what I saw as three distinct periods in the market.

• First period: indiscriminant selling that took place last fall after the financial collapse. During this period our holdings sold off along with everything else.

2

SEPTEMBER 30, 2009

• Second period: a move toward quality in the first quarter of 2009 as the selling continued, but on a more selective basis. It was during this period that many of our funds outperformed and built a nice lead on their respective benchmarks.

• Third period: the strong rebound, with perhaps a little bit of a “junk” rally over the last few months. Our funds rebounded nicely as well, with the lead many of our funds held over the benchmark indexes narrowing slightly.

Our performance over these three distinct periods is consistent with our investment approach. We hope that because of our focus on quality companies that we will generally outperform in a discriminating down market and lead in a gently rising market, but likely lag in a strong bull market. The past 12 months have shown us a variety of market conditions that would typically play out over much longer market cycles. We found it rewarding to see many of our funds move nicely ahead of the market and their peers over this mini-cycle, particularly after a frustrating 2008 when we weren’t able to limit shareholder losses as we would have liked.

FINAL THOUGHT

One afternoon, while on my recent trip to Africa, I watched a lion poised for attack. Time and again she passed up what appeared to be perfectly good opportunities. Clearly the lion knew what she was looking for, and was carefully selecting the appropriate time to spring. Similarly, I think we at Wasatch have learned this year to be even more selective in our investment choices — to be cautious committers of capital with a closer eye on valuation as we make each investment decision. I believe our distance from the Wall Street herd also continues to help in this regard by allowing us to avoid getting caught up in the fads of the market and to stay focused on evaluating each individual company.

Thirty four years after founding Wasatch Advisors I continue to be a firm believer in our investment approach for long-term investors. We appreciate your confidence in us as well.

Sincerely,

Samuel S. Stewart, Jr.

President of Wasatch Funds

Information in this report regarding market or economic trends or the factors influencing historical or future performance reflects the opinions of management as of the date of this report. These statements should not be relied upon for any other purpose. Past performance is no guarantee of future results, and there is no guarantee that the market forecasts discussed will be realized.

*The S&P 500 Index represents 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged, and a common measure of common stock total return performance. You cannot invest directly in this or any index.

**Gross national product (GNP) is a measure of a country’s economic performance, or what its citizens produced (i.e. goods and services) and whether they produced these items within its borders.

†Initial public offering (IPO) is the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.

††Deleverage refers to the reduction of the amount of credit (or leverage) being used in the economy.

‡The Russell 2000 Index represents the smallest 2,000 companies in the Russell 3000 Index, as ranked by total market capitalization. The Index is unmanaged and widely considered to accurately capture the universe of small company stocks. You cannot invest directly in this or any index.

CFA^® is a registered trademark owned by CFA Institute.

3

WASATCH CORE GROWTH FUND (WGROX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Core Growth Fund is managed by a team of Wasatch portfolio managers led by JB Taylor and Paul Lambert.

  JB Taylor
Portfolio Manager   Paul Lambert
Portfolio Manager OVERVIEW   The Wasatch Core Growth Fund returned -0.45% during the 12-month period ended September 30, 2009, strongly outperforming the -9.55% return of the Russell 2000 Index. We are pleased

that the Fund outperformed by such a substantial margin during a difficult period for the broader market. A key factor in the Fund’s outperformance was our decision to maintain positions in what we felt were undervalued securities when the market was going against us in the first half of the annual period. Once stocks rebounded from the irrationally low valuations they hit in late 2008, we saw a broad-based recovery among companies held by the Fund that boasted strong free cash flow but whose shares had nonetheless sold off during the market downturn. We believe this illustrates how our deep due diligence of the companies in the Fund helps us distinguish between their true worth and the often irrational values afforded them in the market.

DETAILS OF THE YEAR

The largest contribution to performance versus the Index came from stock selection in the financials sector. The financial stocks in the benchmark lost over 23%, while those held in the Fund actually gained over 15%. Much of this outperformance resulted from the fact that we held only a small position in banks, which lagged by a wide margin, in favor of what we believed were healthier companies with more stable business models. Among these were Annaly Capital Management, Inc., the insurance company Tower Group, Inc., and the financial analytics and benchmarks provider MSCI, Inc.

We also generated significant outperformance in the consumer discretionary sector, another potentially challenging area of the market. Our holdings in this group gained over 22%, well above the -1.6% return for the broader sector. The Fund’s top contributor, adding over four percentage points to absolute performance, was auto parts retailer O’Reilly Automotive, Inc. O’Reilly bucked the broader trend of slowing consumer spending and its stock registered a gain of over 34%.

The information technology sector was another important source of performance, led by a U.S.-based outsourcing company with operations in India, Cognizant Technology Solutions Corp. We purchased Cognizant last autumn, when fears were rampant that the company’s exposure to the financials sector would translate into slower growth. Our purchase was predicated upon the idea that the company’s technology services are essential for companies that

outsource such services as a way to cut costs and stay competitive. Cognizant’s shares rebounded over 120% from the time we bought it through September 30, which helps illustrate how having a deep knowledge of what you own is essential to navigating volatile markets.

As would be expected in a year when stock prices declined sharply in the first half and recovered strongly in the second, the majority of our detractors were stocks that we sold prior to the recovery in the broader market. Among these were GMX Resources, Inc. KKR Financial Holdings, LLC and Chicago Bridge & Iron Co. N.V. (Netherlands). We also lost some ground to the Index from the underperformance of our holdings in the energy sector. Current and future holdings are subject to risk.

In terms of portfolio activity, we have opted for a steady, consistent approach. Turnover was low, reflecting our enthusiasm for the companies we continue to hold in the Fund. At the same time, however, we have not been afraid to trim positions in stocks that have run ahead of fundamentals in the short term. We also maintained a focus on quality, recognizing that reasonably valued, market-leading companies with strong earnings prospects tend to outperform the broader market over the long term. We believe this is the appropriate way to position the Fund for an environment characterized by slower economic growth.

OUTLOOK

Those who follow the markets will know that the current debate is focused on the likely “shape” of the economic recovery. While there have been some positive signs in recent months, we are not among those who are analyzing every data point in order to determine the direction of macroeconomic trends. Instead, our focus is on the “micro” level — the earnings outlook for each of the individual stocks we hold in the Fund. And on this front, our outlook remains optimistic. For the first time in over a year, Wall Street analysts’ earnings estimates for the companies we hold are beginning to rise. In this light, the market’s recent optimism seems warranted. What differentiates the Wasatch Core Growth Fund is that by our estimate a high percentage of our companies are on track to post higher earnings in 2010 than they did in 2007 — a remarkable statistic given the sharp decline in earnings for the broader market during the same interval.

Looking ahead, we will be focusing our efforts on ensuring that the Fund is populated with companies that have the potential to generate steady earnings growth. By “steady” we mean growth not just in 2009 and 2010, when year-over-year comparisons will be relatively easy and cyclical factors will likely provide a tailwind, but growth that we believe can continue through 2011, 2012 and beyond, an indicator that the earnings expansion is secular, and not cyclical, in nature.

Thank you for the opportunity to manage your assets.

4

WASATCH CORE GROWTH FUND (WGROX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Core Growth	-0.45%	0.77%	8.77%
Russell 2000 Index	-9.55%	2.41%	4.88%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Core Growth Fund are 1.21%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Emeritus Corp.	4.68%
Copart, Inc.	4.49%
MEDNAX, Inc.	4.00%
Life Time Fitness, Inc.	3.43%
Aaron’s, Inc.	3.21%
PSS World Medical, Inc.	3.05%

Company	% of Fund
Fidelity National Information Services, Inc.	2.63%
Alliance Data Systems Corp.	2.54%
Pharmaceutical Product Development, Inc.	2.42%
Ports Design Ltd. (China)	2.33%
	32.78%

*As of September 30, 2009, there were 56 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. 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 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in this or any index.

5

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Emerging Markets Small Cap Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley and Laura Geritz.

  Roger D. Edgley, CFA Portfolio Manager   Laura Geritz, CFA Portfolio Manager OVERVIEW   The Wasatch Emerging Markets Small Cap Fund gained 26.80% in the 12 months ended September 30, 2009, and trailed the MSCI Emerging Markets Small Cap Index, which gained

41.18%. Most of this underperformance occurred in the fourth quarter of 2008, when world markets were melting down and commodities prices were dropping from historic highs to historic lows. Both the Fund and the Index suffered significant losses during this period. The Fund’s overweight in commodities-focused areas like Brazil and the Middle East hurt performance. Performance in 2009 has been much improved as investors have realized that emerging markets in general were oversold.

Although the Index proved a tough mark to beat, we were pleased that the Fund ended such a turbulent year with such a substantial gain. Investments in the BRIC nations — Brazil, Russia, India and China — helped to power the Fund’s return. China was by far the top contributor, followed by Brazil and India. Indonesia was also a notable contributor aided by our investments in coal producers. Looking at sectors, the Fund benefited from the strong performance of our financials, consumer discretionary and information technology holdings.

Emerging market stocks have had quite a run. Nevertheless, our stocks for the most part still seem reasonably valued given the growth we expect from our companies. The Fund’s holdings are characterized by solid fundamentals including higher return on assets, operating margins, net margins, and lower debt than the emerging market stocks in the Index. As a result, we believe the Fund is well positioned for the future.

DETAILS OF THE YEAR

China continued to be the largest weight in the Fund due to our positive take on the growth prospects of companies focused on selling products within China. Five of the Fund’s top 10 contributors came from China including: sportswear manufacturers Anta Sports Products Ltd. and China Dongxiang Group Co. Ltd.; Wasion Group Holdings Ltd., a maker of electronic power meters and data collection terminals; Shandong Weigao Group Medical Polymer Co. Ltd., a manufacturer of single-use medical devices; and Shanda Interactive Entertainment Ltd., a provider of online games.

Members of the Wasatch team recently visited Brazil and came away feeling upbeat about Brazil’s emergence as a consumer-driven culture. Within Brazil, the Fund holds investments in a variety of industries including banks, retailers,

metals and mining, and chemicals. One of our best performing Brazilian holdings was Banco do Estado do Rio Grande do Sul S.A., a bank that we like for its strong fundamentals.

China and India are the world’s two most populous countries and they are expected to wrest the lead for global gross domestic product (GDP)* from the U.S. and Europe over the next five years. Having a strong presence in these dynamic markets has been and will be important for the Fund. As in China, the Fund is overweight relative to the benchmark in India with holdings in a multitude of industries. In India, we’re particularly attracted to lending institutions. This past year, LIC Housing Finance Ltd., one of the largest mortgage lenders in India, made a substantial contribution to the Fund’s return.

Indonesia is another important area of investment for the Fund. We like Indonesia for its young population, emerging democracy, and place as a coal producer. Indonesia is Asia’s largest supplier of thermal coal used to drive power plants. The Fund has two coal-related holdings in Indonesia that were strong contributors to performance —Tambang Batubara Bukit Asam and Indo Tambangraya Megah.

The Fund was overweight and outperformed the Index in the BRIC nations and Indonesia. In contrast, the Fund’s substantially underweight position in Taiwan and Korea hindered relative performance, especially in Taiwan, a country that benefited from strong-performing chip manufacturers and other technology-related companies. We have focused less in these countries because, although they are theoretically emerging markets, their major industries such as autos and electronics are largely dependent upon developed world growth.

On a related note, our underweight position in information technology, particularly our lack of exposure to semiconductors, computers and peripherals firms, hurt the Fund’s relative results. Information technology was the best performing sector within the Index fueled by short-term inventory replenishment in the microchip industry. Within the IT sector, we have elected to focus on online gaming, which is seeing huge growth in Asia, and on companies that produce electronic equipment and instruments used in infrastructure development. In lieu of a larger position in IT, we expect to continue overweighting sectors like consumer, financials, and health care where growth can be driven by domestic demand. Current and future holdings are subject to risk.

OUTLOOK

Generally, we have made no dramatic changes to the Fund’s country or sector weights and we still see the potential for our holdings to deliver at least 15% earnings growth. We feel we can get faster growth from small companies within emerging markets for about the same price tag as similar companies in the developed world. With this in mind, we will continue seeking to provide shareholders with the most exposure possible to true emerging markets.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

*Gross domestic product (GDP) is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a country in a year.

6

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 10/1/07
Emerging Markets Small Cap	26.80%	N/A	-11.25%
MSCI Emerging Markets Small Cap Index	41.18%	N/A	-11.42%
MSCI Emerging Markets Index	19.07%	N/A	-10.82%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Small Cap Fund are 2.69%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Bharat Electronics Ltd. (India)	2.00%
Coca-Cola Icecek AS (Turkey)	1.81%
Ports Design Ltd. (China)	1.79%
CP ALL PCL (Thailand)	1.73%
Aramex PJSC (United Arab Emirates)	1.71%
Sesa Goa Ltd. (India)	1.67%
Bolsa Mexicana de Valores S.A.B. de C.V., Series A (Mexico)	1.60%

Company	% of Fund
LIC Housing Finance Ltd. (India)	1.54%
JSE Ltd. (South Africa)	1.53%
Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)	1.52%
	16.90%

*As of September 30, 2009, there were 116 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: October 1, 2007. The MSCI Emerging Markets and Small-Mid Cap Indexes are free float-adjusted market capitalization indexes that are designed to measure equity market performance in the global emerging markets. As of June 2006, the MSCI Emerging Markets Index consisted of the following 25 emerging market country indexes: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. You cannot invest directly in these or any indexes.

7

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Global Opportunities Fund is managed by a team of Wasatch portfolio managers led by Robert Gardiner and Blake Walker.

  Robert Gardiner, CFA Portfolio Manager   Blake H. Walker Portfolio Manager OVERVIEW   The Wasatch Global Opportunities Fund returned 69.00% since its inception on November 17, 2008 through September 30.* The Fund benefited from our intentional move

to begin operations when global stock prices were depressed due to uncertainty regarding the financial crisis and the strength of the global economy. As investors became optimistic that government efforts to stabilize the financial sector were gaining traction, stock prices rebounded sharply. The Fund outperformed its benchmarks during the period. The MSCI AC World Small Cap Index returned 56.05%. The S&P Global SmallCap Index returned 51.73%. The MSCI AC World Index returned 35.26%.

Often a good year for a fund is driven by performance in just a few areas, but we are pleased to report that the Fund’s holdings provided broad-based performance over the period. Specifically, our stock picks outperformed across domestic and international markets, as well as across developed and emerging markets, and virtually every industry group and sector. Performance was constrained to a degree by the Fund’s cash position, which averaged approximately 13% over the period.

DETAILS OF THE PERIOD

As true bottom-up investment managers, we build the portfolio company by company. Most of our holdings will be smaller companies that we believe have great management teams, sustainable competitive advantages, sound business models and the potential for strong earnings growth — we call these WBGC’s, or the World’s Best Growth Companies. We will also hold “fallen angels” — growth companies that have hit a temporary setback and have been overly punished by the market. A third category might be deemed “stalwarts” — somewhat more established companies in the mid-cap range that may not have the growth potential of smaller companies but which have dominant market positions and which we have been able to purchase at what we view as attractive valuations. Our ability to find these companies in any market in the world gives us the opportunity to seek out the best companies.

The Fund performed well across geographies, outperforming in the U.S. and developed and emerging markets. We outperformed in Western Europe led by Germany, the United Kingdom, Italy and Sweden. We also did well in Asia led by our overweight in China but also by strong performance in the important Japanese market and

in India, Singapore, Korea and Indonesia. We lagged in Australia, Brazil and Canada, markets focused on materials and energy, and areas we are underweight. We continue to broaden the number of countries we are invested in.

Through our due diligence, we ended up overweight in information technology (IT), the best performing segment of the overall market, and our technology picks outperformed within the sector. Our biggest overweight was in semiconductors, which was one of the best performing industry groups since the Fund’s inception. We were also overweight and outperformed in the IT services segment. Our largest holding, Wirecard (Germany), a developer of electronic payment systems, more than doubled.

While health care stocks lagged the market, our selections within the sector outperformed, rising over 80%. Our medical device stocks did especially well. The stock price of our largest holding at the beginning of the period — VNUS Medical Technologies, Inc. — nearly doubled. The company was acquired during the second quarter of 2009.

We had substantial exposure to consumer discretionary, another outperforming area. Our holdings there outperformed the market, notably sporting goods retailer Big 5 Sporting Goods Corp. and Ports Design Ltd. (China), a fashion and luxury goods manufacturer.

Our underweighting and stock picking drove the Fund’s strong relative performance in financials. Notably, we underweighted U.S. banks and overweighted banks in countries with less exposure to the financial crisis such as India, Brazil and Canada.

We struggled somewhat in consumer staples. While many of our holdings performed well, we had some notable detractors, including Beauty China Holdings Ltd. Overall, consumer staples is an exciting place to us, especially in emerging markets, and we feel we can do well in this area. Current and future holdings are subject to risk.

Finally, we had significant cash which held back performance as the market rallied. The cash allocation did not reflect any negative market outlook on our part, but was instead driven by our desire to put assets to work in an organic way as we find great companies globally in which to invest.

OUTLOOK

Stock prices have gone up a long way in a short time and we expect more modest returns going forward.

We will continue to look for great companies. This involves extensive research, conducting company-by-company financial analysis, and traveling around the world to meet with management teams. As global investors, we have the ability to seek out what we believe are the best stocks in every region and in every industry.

As the world continues to get smaller, we believe this benefits investors like ourselves who take a global approach. The Fund is off to an excellent start, with our picks in almost every area having outperformed since inception. We are passionate about applying Wasatch’s time-tested equity strategies on a global level, and are excited about the prospects for the Fund over the coming years and decades.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

* The Fund’s return since inception is not annualized.

8

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	SINCE INCEPTION 11/17/08
Global Opportunities	N/A	69.00%*
MSCI AC World Small Cap Index	N/A	56.05%*
S&P Global SmallCap Index	N/A	51.73%*
MSCI AC World Index	N/A	35.26%*

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Opportunities Fund are 2.61%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in small and micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

*Not annualized.

TOP 10 EQUITY HOLDINGS**

Company	% of Fund
Wirecard AG (Germany)	1.88%
O2Micro International Ltd. ADR (China)	1.48%
Create SD Holdings Co. Ltd. (Japan)	1.14%
Melexis N.V. (Belgium)	1.02%
Ports Design Ltd. (China)	0.99%
Resources Connection, Inc.	0.93%

Company	% of Fund
Audika S.A. (France)	0.92%
Ted Baker plc (United Kingdom)	0.91%
Apollo Group, Inc., Class A	0.90%
Abcam plc (United Kingdom)	0.90%
	11.07%

**As of September 30, 2009, there were 308 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN†

†Excludes securities sold short and written options, if any.

††Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ‡Inception: November 17, 2008. The MSCI AC World Small Cap Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets, including securities of U.S. issuers, with market capitalizations between US $200 million and $1.5 billion. The S&P Global SmallCap Index is an unmanaged index and includes reinvestment of all dividends of issuers located across developed and emerging markets, including the United States, who fall in the bottom 15% of their country’s market cap range. The MSCI AC World Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets, including securities of U.S. issuers, of all capitalizations. You cannot invest directly in these or any indexes.

9

WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Global Science & Technology Fund is managed by a team of Wasatch portfolio managers led by Sam Stewart.

  Samuel S. Stewart, Jr. PhD, CFA Portfolio Manager OVERVIEW   The Wasatch Global Science & Technology Fund returned 7.86% during the 12 months ended September 30, 2009, and underperformed the 10.89% return of its primary benchmark, the Russell 2000 Technology Index. Two aspects of the broader market environment contributed to the Fund’s positive absolute return. First, small- and mid-cap stocks outperformed large-caps — a positive for the Fund given that our primary focus is on smaller,

faster-growing companies. Second, information technology stocks outpaced the return of the market as a whole. Another plus was that our stock picks outperformed by a wide margin in the portion of the Fund invested in information technology — while the tech stocks in the benchmark returned approximately 12%, those held in the Fund returned over 28%.

On the other hand, health care stocks underperformed at a time of rising investor risk appetites and uncertainty about the U.S. government’s reform efforts. The Fund’s holdings in health care produced a slightly negative return, a drag on relative performance in a positive market. Nevertheless, we continue to see a wealth of outstanding longer-term opportunities in this area. The sector as a whole may not always keep pace with the broader indexes in rapidly rising markets, but we feel confident in the long-term prospects for the health care stocks we hold in the Fund.

DETAILS OF THE YEAR

The Fund’s largest source of outperformance was its substantial weighting in the international markets. Nearly half of the Fund’s assets are invested abroad, reflecting our view that technology investors need a global perspective to benefit from the full range of opportunities that the tech and health care sectors have to offer. Of the Fund’s top 10 contributors to performance, seven were companies domiciled abroad. Among our top contributors from outside the United States were Wasion Group Holdings Ltd., a Chinese maker of power meters and data collection terminals that is benefiting from the rapid build-out of the country’s power grid; China Automation Group Ltd., which is capitalizing on the continued investments in safety and control systems in Chinese industries; and Wirecard AG, a leading international provider of electronic payment solutions that is based in Germany.

We also added value through our longstanding holding in Cognizant Technology Solutions Corp., a provider of information technology services to businesses with significant operations in India. We held on to our position in Cognizant even when the stock was being pressured by the global economic crisis of late 2008, as we believed it would maintain steady earnings through the downturn. The stock

subsequently recovered as investors recognized Cognizant’s value, and its stock closed the annual period with a gain of nearly 70%. We believe that the company’s strong long-term business prospects and not just the momentum of the broader equity market support this rebound and we are maintaining our position in Cognizant.

Turning to detractors, a key factor in the underperformance of the Fund’s health care sector was the poor returns of the senior assisted-living companies — The Providence Service Corp., Emeritus Corp., Capital Senior Living Corp., and Sunrise Senior Living, Inc. We elected to eliminate all of the Fund’s holdings in this group during the winter, which meant that we were unable to participate in their subsequent recovery. We also lost ground through a position in Cardica, Inc., a maker of systems used in coronary bypass surgery. The company’s management team mishandled its cash position amid a tough environment for hospitals, contributing to a decline of over 80% in Cardica’s stock price. Our cash position, which averaged over 7% during the year, also proved to be a drag on relative performance in a rising market. However, with stock prices having risen so much in recent months, we prefer to keep some powder dry in the event that a market pullback creates potential buying opportunities.

OUTLOOK

We continue to believe that the information technology and health care sectors remain fertile ground for individual stock selection. The information technology sector is one of the few sectors expected to generate positive earnings growth in the year ahead, as it has the potential to benefit from increased spending among either consumers or businesses. Health care, meanwhile, remains home to an abundance of companies with compelling product cycles and attractive bottom-up growth stories. We continue to take advantage of the extensive Wasatch research base to select what we see as being the best-in-class companies within the health care sector.

Despite our optimism regarding the prospects for the companies we hold in the Fund, we are maintaining a cautious approach overall. High unemployment, continued deleveraging, and the increased role of government in the United States’ economy are all factors that point to slower growth in the months and years ahead. As a result, we are being careful to take profits in our winners and take advantage of opportunities to invest in what we consider to be high quality companies at attractive prices. For example, we are finding compelling ideas among businesses where customers can receive a favorable return on their investment, such as security, storage, and network performance management. We are also maintaining our emphasis on fundamentals in order to mitigate the potential for negative surprises from the Fund’s holdings. We believe this is the prudent approach at a time when opportunities remain abundant, but where risks remain very much in place.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

10

WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 12/19/00
Global Science & Technology	7.86%	4.97%	3.21%
Russell 2000 Technology Index	10.89%	4.16%	-3.89%
Nasdaq Composite Index	2.54%	3.12%	-1.75%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Science & Technology Fund are 1.92%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in concentrated funds will be more volatile and loss of principal could be greater than investing in more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Cognizant Technology Solutions Corp., Class A	2.71%
Abcam plc (United Kingdom)	2.01%
Wirecard AG (Germany)	1.89%
MEDNAX, Inc.	1.74%
Akamai Technologies, Inc.	1.57%
Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)	1.54%

Company	% of Fund
Interactive Intelligence, Inc.	1.48%
Opnet Technologies, Inc.	1.46%
Power Integrations, Inc.	1.45%
O2Micro International Ltd. ADR (China)	1.43%
	17.28%

*As of September 30, 2009, there were 89 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: December 19, 2000. 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 directly in these or any indexes.

11

WASATCH HERITAGE GROWTH FUND (WAHGX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Heritage Growth Fund is managed by a team of Wasatch portfolio managers led by Chris Bowen and Ryan Snow.

  Chris Bowen Portfolio Manager   Ryan Snow Portfolio Manager OVERVIEW   The past year brought with it a range of investor emotions that drove the market from one extreme to another. This reaction was initially driven by the fear of a depression, which sent

the market into a freefall. Then, in early March, optimism gradually began to replace the doomsday mentality that had gripped the market, setting the stage for a powerful rebound, which lasted through September 30th.

Through the turmoil, our approach remained the same as always: Stay the course. It is beneficial in times like these to keep the perspective that the process of managing the Fund is a marathon and not a sprint. This prevents us from getting bogged down in the day-to-day market noise and allows us to remain disciplined to our approach of striving to invest in great companies.

Certainly, the Fund’s stock holdings were at the mercy of the market gyrations but, overall, the outstanding business results delivered by many of our companies helped the Fund significantly outpace its benchmark. While we’re not celebrating the 3.74% gain posted by the Fund over the past year, it compared favorably to the 0.40% decline of the Russell Midcap Growth Index over the same period.

While much of the economic pessimism that prevailed early in the year has dissipated, significant challenges remain. For example, it is difficult to imagine that consumer spending, which accounts for approximately two-thirds of gross domestic product (GDP)* in the U.S., can stage a meaningful and lasting rebound with unemployment levels at a 25-year high, hovering around 10%. This is one element that continues to weigh down the economy as Americans try to put the recession in the rear-view mirror.

DETAILS OF THE YEAR

We believe that one of the reasons our companies held up so well was their relatively light use of debt. While the credit crunch was detrimental — and sometimes fatal — to many companies relying on external financing to run their businesses, this was a mild concern within the Fund. In many cases, our holdings have been able to not only survive, but thrive, as they’ve grown their businesses by reinvesting their own cash flows and capturing market share. Self-financed companies, combined with management teams that can efficiently utilize that money, have resulted in average returns on equity (ROE) and returns on assets (ROA) in the Fund that handily surpass the corresponding figures in the benchmark.** We believe that, consistently delivered, these metrics are indicators of long-term success.

Our large allocation to information technology (IT) was a meaningful contributor to the annual results. The portfolio holds a diverse group of companies, from credit card processors to semiconductor chip producers. In particular, Infosys Technologies and Cognizant Technology Solutions Corp., both information technology outsourcers, received strong votes of confidence from investors, with overall returns topping 59% apiece. As global cutbacks blurred these companies’ revenue projections in late 2008, their stocks declined in price. As companies continue to tighten their belts, we believe that IT outsourcing will become an increasingly cost-effective option. The outlook for Cognizant and Infosys has become less muddled and their stock prices rebounded.

With the uncertainty surrounding proposed health care reform legislation, many stocks in the health care sector struggled over the past 12 months. In particular Covance, Inc., a provider of research services including drug testing and trials for the pharmaceutical industry, was one of our largest detractors from performance. Late in 2008, the company revised its near-term revenue outlook primarily due to project delays as pharmaceutical companies scaled back. We are encouraged about Covance’s prospects, including its diversified client base and service offerings and growing multi-year service contracts. We were able to add to our position at attractive prices as the stock rebounded strongly from its lows. Current and future holdings are subject to risk.

OUTLOOK

Forecasting near term company performance with any degree of accuracy was nearly impossible six months ago. However, at the time, we also felt like many of our most highly esteemed companies were trading at what would prove to be attractive levels once things began to normalize. Investor fear seemed to be concealing the true value of many companies. Since then, we feel that this opinion has been validated, resulting in more normal valuations, significantly benefiting the Fund’s performance in the process.

It is a moderate concern that the stock market may have gone up too far, too fast as bullish behavior began to return in earnest. This strong upward push was driven by forecasted economic improvement, but if expectations fail to be met, the market could experience a short-term setback. We are confident that as we continue to apply our consistent, disciplined investment process, the Fund will have the potential for long-term success.

Thank you for the opportunity to invest your assets.

  *Gross domestic product (GDP) is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a country in a year.

**Return on assets (ROA) measures a company’s profitability by showing how many dollars of earnings a company derives from each dollar of assets it controls. Return on equity (ROE) measures a company’s efficiency at generating profits from shareholders’ equity.

12

WASATCH HERITAGE GROWTH FUND (WAHGX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 6/18/04
Heritage Growth	3.74%	1.89%	1.52%
Russell Midcap Growth Index	-0.40%	3.75%	3.08%
S&P 500 Index	-6.91%	1.02%	0.75%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Heritage Growth Fund are 1.01%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in mid cap funds will be more volatile and loss of principal could be greater than investing in large cap funds. Equity investing involves risks including potential loss of the principal amount invested.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Apollo Group, Inc., Class A	3.76%
Altera Corp.	3.54%
St. Jude Medical, Inc.	3.37%
Express Scripts, Inc.	3.25%
Redecard S.A. (Brazil)	2.98%
CVS Caremark Corp.	2.98%

Company	% of Fund
Copart, Inc.	2.79%
NII Holdings, Inc.	2.71%
BMC Software, Inc.	2.69%
Amphenol Corp., Class A	2.61%
	30.68%

*As of September 30, 2009, there were 54 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: June 18, 2004. The Russell Midcap Growth Index measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in the Russell Midcap Growth Index are also members of the Russell 1000 Growth Index. The S&P 500 Index represents 500 of the United States’ largest stocks from a broad variety of industries. The index is unmanaged, and a common measure of common stock total return performance. You cannot invest directly in these or any indexes.

13

WASATCH HERITAGE VALUE FUND (WAHVX)— Management Discussion SEPTEMBER 30, 2009

The Wasatch Heritage Value Fund is managed by a team of Wasatch portfolio managers led by Brian Bythrow.

  Brian Bythrow, CFA Portfolio Manager OVERVIEW   Over the past year, we saw investors appear to lose all hope, then regain it surprisingly quickly. Over the first six months, market turmoil was severe. Risk-wary investors shed stocks in favor of less-volatile assets, as the market offered few safe havens from the market meltdown. The U.S. Federal Reserve, along with many of its global counterparts, put all its tools to work to help ease the crisis.

Economic stimulus plans, particularly those from the U.S. and China, were also put into action. It appeared that these concerted efforts had at least some impact, and stocks began to move upward in March. Many were skeptical, though, of whether this constituted the beginning of a true recovery, or simply a bear-market* rally.

From spring through the summer, stock markets staged a significant and broad-based rally, even as evidence supporting the hope of economic recovery remained scarce. Money came off the sidelines as investors put it to work in the equity markets, boosting stock prices. Stocks benefited around the globe, among all major sectors, and across the market-cap spectrum.

Over the course of this newsworthy year, the Wasatch Heritage Value Fund posted a return of -1.13% for the 12 months ended September 30, 2009. This placed the Fund’s performance well ahead of its benchmark, the Russell 1000 Value Index, which returned -10.62% for the year.

Our underweighting in the financials sector, particularly large banks, played a definitive role in the Fund’s outperformance of the Index for the year.

DETAILS OF THE YEAR

Although established markets staged a comeback in the second half of the year, along with developing ones, we continue to have concerns about the outlook for consumer spending in the U.S. and other mature economies. Emerging markets, however, appear to offer the potential for robust growth on the consumer side of the economy.

Among our holdings that have the potential to gain from the continued expansion of the consumer class in emerging nations is our top contributor for the period, Brazil’s Weg S.A., a manufacturer of motors used in washers, dryers, and other home appliances. Demand has been growing for Weg’s products, which are primarily destined for domestic consumption, rather than for export to developed markets. In light of the resilience of emerging consumers, and the many constraints facing those in the U.S., we are likely to continue to emphasize the former in our consumer stocks.

Health care generally is seen as an area that can sail above economic woes. It’s not certain if that is always true, but what is clear is that these stocks can be affected by concerns about the impact of cost-cutting measures by insurers and

government programs. That’s why we like companies that can benefit from an emphasis on cost-consciousness, including our second-strongest contributor, Mylan, Inc., a maker of generic prescription drugs. As consumers seek — and insurers demand — the use of less costly treatments, Mylan is positioned to benefit. The stock’s solid performance also reflects Mylan’s success in paying down some of the debt resulting from its acquisition of Merck’s** generic drug portfolio in 2008, and its continued progress in integrating the two companies’ operations.

While we de-emphasized financials over the year, the sector was home to our third-strongest contributor for the period, property/casualty insurer CNA Financial Corp. We found that CNA and other insurers offered better balance sheets and stronger earnings power than most banks, and were available to us below tangible book value. There are some early hints that we may be at the beginning of a “hardening” insurance cycle, a point at which insurers enjoy greater pricing power. This trend is driven not just by a potentially improving business climate, but also by the exit of former major competitors — notably AIG — from the field. Current and future holdings are subject to risk.

OUTLOOK

While the stock market’s recent performance indicates that most investors are confident that a full-blown economic recovery is on the horizon, we are not so sure. In fact, we had anticipated that there might be some pullback during the period’s final months, given stocks’ strong run from April through June. Instead, stocks continued on a firm path upward. Although we are happy for this positive development, we retain some concern that the markets have gotten ahead of themselves.

For that reason, we look for companies that we believe will not require a powerful economic recovery in order to do well. We believe our cautious stance makes sense. While it’s evident that world economies have come a long way from the deeply troubled environment they faced late last year, there are still many issues to be addressed. U.S. consumers still face pressure from high debt loads, tight credit, and home values that are stagnant at best. This clouds the outlook for a breakout in spending anytime soon.

We intend to continue to deploy more of our cash as we identify worthy opportunities. Given the still-uncertain state of both the U.S. and many global economies, though, we will not seek to hop rapidly into stocks, but rather will retain our commitment to deep due diligence, and seek outstanding companies at prices that make sense. This may mean that we will not be able to pare down our cash position as quickly as we would like, but we believe the negative consequences of hasty purchases can far outweigh those of some excess cash.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

  *A bear market is generally defined as a drop of 20% or more in stock prices over at least a two-month period.

**As of September 30, 2009, the Wasatch Heritage Value Fund was not invested in Merck & Co., Inc.

14

WASATCH HERITAGE VALUE FUND (WAHVX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 8/30/07
Heritage Value	-1.13%	N/A	-9.07%
Russell 1000 Value Index	-10.62%	N/A	-15.11%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Heritage Value Fund are 3.89%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investments in value stocks can perform differently from the market as a whole and other types of stocks and can continue to be undervalued by the market for long periods of time. Loss of principal is a risk of investing. Being non-diversified, the Fund can invest a larger portion of its assets in the securities of a limited number of companies than a diversified fund. Non-diversification increases the risk of loss to the Fund if the values of these securities decline. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Covidien plc	3.41%
Old Republic International Corp.	3.36%
Visa Inc., Class A	3.11%
Perrigo Co.	3.06%
Sonoco Products Co.	3.02%
Pfizer Inc.	2.98%

Company	% of Fund
American Water Works Co., Inc.	2.97%
Spectra Energy Corp.	2.93%
Fifth Third Capital Trust VI, 7.25%, 11/15/67 Pfd.	2.88%
Sherwin-Williams Co.	2.88%
	30.60%

*As of September 30, 2009, there were 35 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: August 30, 2007. The Russell 1000 Value Index measures the performance of those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in these or any indexes.

15

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch International Growth Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley.

  Roger D. Edgley, CFA Portfolio Manager OVERVIEW   The Wasatch International Growth Fund gained 18.03% in a tumultuous 12-month period, compared to a gain of 20.13% for the MSCI AC World Ex-U.S.A. Small Cap Index. Stock prices declined dramatically in the first six months of the period as world markets were shaken by the far-reaching financial crisis. Stocks surged over the last six months as investors gained confidence that governments had succeeded in

averting disaster and that economic stimulus efforts were beginning to take hold.

Developed markets have been hit harder by the financial crisis than emerging markets and they are taking longer to recover. Investors realized this and jumped back into emerging markets, helping fuel a strong recovery in stock prices. The Fund’s presence in emerging markets, especially in China, Brazil and India, aided performance in the last 12 months. There were also several notable performers from among our investments in developed markets, where we focus on companies that have the potential to grow despite economic headwinds.

DETAILS OF THE YEAR

Two themes that we have discussed before continued to bolster the Fund’s results. The first is securities exchanges that we like because they virtually monopolize their markets, and because they have scaleable business models, strong balance sheets and healthy free cash flow. Two of our top contributors for the year were securities exchanges — Brazil’s BM&F Bovespa S.A. and Japan’s Osaka Securities Exchange Co. Ltd.

Finding ways to capitalize on China’s growing middle class is another prominent theme for us. Several Chinese apparel and footwear companies that sell products within China contributed to the Fund’s solid results including Anta Sports Products Ltd., China Dongxiang Group Co. Ltd. and Li Ning Co. Ltd. Over the course of the year, however, the number of new competitors entering this space has tempered our view of these companies’ prospects. As a result, we decided to trim our exposure to this area in favor of other consumer-focused investments in China.

How we approach investing in China is quite different from our approach in Japan, by far the biggest country weighting in the Index. Our overweight position in China is supported by favorable demographics including China’s more than 1.3 billion people, growing middle class, and the government’s massive infrastructure programs aimed at stimulating the economy. In contrast, Japan’s population is declining, its real estate values are stagnant, and the government has been struggling to stave off deflation. The Fund is underweight relative to the benchmark in Japan, where our careful, bottom-up research has uncovered individual companies with the potential to grow independent from macro influences. In the 12-month period, the Fund benefited from the performance of

our investments in China and Japan, and our allocations to these countries aided performance versus the Index.

In most developed markets, we tend to favor companies whose growth prospects are tied to global demand for specialized products rather than to economic growth within their home countries. Companies from four developed markets helped the Fund’s results over the past 12 months and are good examples of our investment focus. These were: DiaSorin S.p.A. (Italy), a developer of in vitro diagnostic products; Abcam plc (United Kingdom), a biotechnology company that supplies antibodies used in life science research; Wirecard AG (Germany) a leading global provider of electronic payment systems; and Tandberg ASA (Norway) a provider of videoconferencing solutions. Current and future holdings are subject to risk.

The financials sector contributed to the Fund’s absolute return for the 12-month period. This was primarily due to the solid gain produced by our diversified financial services holdings. Among the leaders in this group were several of our securities exchanges and India’s Infrastructure Development Finance Co. Ltd. (IDFC). IDFC provides financing for projects such as power, roads, ports and telecommunications and appears well positioned to benefit from ongoing efforts to build out and improve India’s infrastructure.

In contrast, banks with exposure to the Western world’s financial troubles detracted from the Fund’s results and caused the financials sector to be a drag on performance versus the Index. Another area of relative weakness was the industrials sector. A notable detractor was Campbell Bros. Ltd., an Australian analytical testing services provider that does lab work for mining companies. While our industrial holdings struggled during the depths of the downturn, they have been strong performers in the budding economic recovery. For example, Campbell Brothers was the Fund’s second leading contributor in the most recent quarter. Fluctuations in oil and gas prices caused significant volatility in the energy sector. This negatively impacted several of our Canadian energy holdings and resulted in the Fund underperforming the Index in Canada.

OUTLOOK

Stocks around the world have come back from the brink following the massive amounts of liquidity that were withdrawn from global markets beginning in late 2007 and extending throughout much of 2008. Now, stocks are more reasonably valued, but the easy gains are behind us. Going forward, companies will have to live up to earnings growth expectations in order for stock prices to climb higher.

In such an environment, we expect our disciplined, bottom-up research will help us find companies capable of producing the earnings growth we seek, whether they are located in developed markets still struggling with negative economic growth or in faster growing emerging markets. We expect to maintain our broad sector and geographic exposure and do not anticipate making any significant changes to the way we manage the Fund in the coming months.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

16

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 6/28/02
International Growth	18.03%	5.66%	9.54%
MSCI AC World Ex-U.S.A. Small Cap Index	20.13%	9.64%	13.03%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Growth Fund are 1.83%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
DiaSorin S.p.A (Italy)	3.18%
Wirecard AG (Germany)	3.13%
Abcam plc (United Kingdom)	2.72%
SimCorp A/S (Denmark)	2.39%
BM&F BOVESPA S.A. (Brazil)	2.32%
Campbell Brothers Ltd. (Australia)	2.29%

Company	% of Fund
Natura Cosmeticos S.A. (Brazil)	2.28%
Tandberg ASA (Norway)	2.27%
Osaka Securities Exchange Co. Ltd. (Japan)	2.05%
Rotork plc (United Kingdom)	1.99%
	24.62%

*As of September 30, 2009, there were 89 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: June 28, 2002. The MSCI AC World Ex-U.S.A. Small Cap Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets, excluding securities of U.S. issuers. This index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities. You cannot invest directly in this or any index.

17

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch International Opportunities Fund is managed by a team of Wasatch portfolio managers led by Roger Edgley and Blake Walker.

  Roger D. Edgley, CFA Portfolio Manager   Blake H. Walker Portfolio Manager OVERVIEW   There were two very different stories to tell for the two halves of the Wasatch International Opportunities Fund’s past 12 months. The first half was a time of almost unprecedented difficulty. Through the end of 2008,

financial institutions around the world were confronted with the global credit crunch, and concerned investors hastened their flight out of international stocks. Even China, which appeared well prepared to ride out the storm, was not immune to the global meltdown. As 2009 dawned, stocks around the world continued on a volatile path, though not all countries were moving in the same direction. A number of emerging markets posted positive results in early 2009, while many developed markets remained in negative territory.

Enthusiasm about new leadership in the U.S. and widespread, coordinated stimulus efforts around the globe allowed many markets to move toward a more rational tone in the year’s second half. From April through June, stock prices rose significantly around the world. Emerging markets, which had begun on an upward path in the year’s first quarter, led the charge, but the U.S. and other developed markets also joined in. Global stocks posted still more gains through the summer, as investors continued to have confidence that the worst of the global recession and liquidity crisis was over. The economic data to fully support this optimism, however, were not always abundant, particularly in more developed markets. Nonetheless, more and more assets came off the sidelines and went into international equities, driving stock prices substantially higher.

Over the course of this eventful period, the Wasatch International Opportunities Fund returned 23.60% for the 12 months ended September 30, 2009. This placed it well ahead of its benchmark, the MSCI World Ex-U.S.A. Small Cap Index, which returned 14.75% over the same period.

DETAILS OF THE YEAR

For the year as a whole, our top three contributors came from China, a market we continue to overweight. In addition to beneficial stock picking, this reflects China’s early rebound out of the economic morass. As the year wore on, however, and more markets began to emerge from the recession, our strong performers came from a broader variety of markets.

China Automation Group Ltd., a provider of safety and control systems for the petrochemical and railway industries in China, made the greatest positive contribution to the Fund’s performance for the year. This company stands to benefit from China’s massive infrastructure spending plans.

So does our second-strongest contributor, Wasion Group Holdings Ltd., a producer of electronic power meters and data collection terminals for China’s gas, electricity, and water industries.

A continuing theme in our investment approach is the rise of consumers in emerging markets. Chinese athletic apparel and footwear maker Anta Sports Products Ltd. reflects this area of focus. Anta makes products for China’s growing domestic market, rather than for export, which helped the company to weather the global decline, and to benefit from China’s quick recovery.

The Fund wasn’t without strong contributors from developed markets, however. Germany’s Wirecard AG, a provider of credit card processing and electronic payment systems, saw its stock price rise due in large part to the increasing volume of online transactions and the company’s comprehensive menu of merchant services. In the financials sector, Japan’s Osaka Securities Exchange Co. Ltd., was able to avoid the turmoil rocking other parts of the sector and produce strong results for the year. The company benefited from increased trading volume in futures, options, and other derivative securities in Japan. We’re attracted by the nature of securities exchanges, as there are typically high barriers to entry for would-be competitors. Norway’s Tandberg ASA, a leader in videoconferencing systems, also landed in our top 10. Tandberg benefited from increased demand for its products and services as cost- and environment-conscious companies turned to videoconferencing in place of face-to-face meetings. The company’s stock price also rose on news that Tandberg may be acquired by Cisco Systems. Current and future holdings are subject to risk.

Over the year, our cash position was higher than we normally like. The market’s gyrations — particularly in the second half of the period — made us cautious buyers. Despite this challenge, we were able to make several new additions to the portfolio that we believe offer attractive prospects for growth.

OUTLOOK

This 12-month period certainly ended on a more positive note than it entered on. While we’re pleased with the overall direction of the global equity markets, we aren’t thoroughly convinced that the economic recovery will be as vigorous or as universal as those markets seem to indicate. Given the recent market turmoil, and the uncertain outlook that remains in many world markets, we believe it makes sense to continue to manage the Fund with a certain degree of caution.

We would like to reduce our cash position over the coming months. Despite the strong run-up of international small and micro cap stocks, there are still opportunities to buy promising stocks at reasonable prices, allowing us to identify what we believe are good places to put cash to work. The potential we see among small cap global stocks genuinely excites us. We’re finding well-managed small companies that are creating their own competitive advantages, employing innovative business models, and succeeding in a multitude of industries.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

18

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 1/27/05
International Opportunities	23.60%	N/A	5.89%
MSCI World Ex-U.S.A. Small Cap Index	14.75%	N/A	3.79%
MSCI AC World Ex-U.S.A. Small Cap Index	20.13%	N/A	6.59%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Opportunities Fund are 2.54%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Being non-diversified, the Fund can invest a larger portion of its assets in the stocks of a limited number of companies than a diversified fund. Non-diversification increases the risk of loss to the Fund if the values of these securities decline.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
iShares MSCI Emerging Markets Index Fund	3.44%
Wirecard AG (Germany)	2.92%
China Automation Group Ltd. (China)	1.99%
SimCorp A/S (Denmark)	1.97%
Tandberg ASA (Norway)	1.82%
Aramex PJSC (United Arab Emirates)	1.67%

Company	% of Fund
China Hongxing Sports Ltd. (China)	1.55%
Home Capital Group, Inc. (Canada)	1.53%
Zhuzhou CSR Times Electric Co., Ltd., Series H (China)	1.45%
Midas Holdings Ltd. (Hong Kong)	1.44%
	19.78%

*As of September 30, 2009, there were 140 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: January 27, 2005. The MSCI World Ex-U.S.A. Small Cap Index is an unmanaged index that measures the performance of stocks with market capitalizations between US $200 million and $1.5 billion across 22 developed markets, excluding the United States. The MSCI AC World Ex-U.S.A. Small Cap Index is an unmanaged index and includes reinvestment of all dividends of issuers located in countries throughout the world representing developed and emerging markets, excluding securities of U.S. issuers. This index is a free float-adjusted market capitalization index designed to measure the performance of small capitalization securities. You cannot invest directly in these or any indexes.

19

WASATCH MICRO CAP FUND (WMICX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Micro Cap Fund is managed by a team of Wasatch portfolio managers led by Daniel Chace.

  Daniel Chace, CFA Portfolio Manager OVERVIEW   The Wasatch Micro Cap Fund registered a 5.70% loss during the 12 months ended September. The Fund outperformed the Russell 2000 Index, which fell 9.55%, and the Russell Microcap Index, which declined 7.93%. It was an extraordinary time in the U.S. equity market. Stock prices plunged throughout much of the first half of the period, as the credit crisis led to a rapid reduction in growth expect-

ations for the U.S. and international economies. Forced selling by hedge fund and mutual fund managers to meet redemptions pushed prices even lower, resulting in a vicious downward spiral. After sinking to multi-year lows in March, stocks rebounded on signs that the financial system and economy were stabilizing. However, the rebound was not strong enough to erase earlier losses, and broad equity indexes finished the period in negative territory.

While the Fund did not completely escape the market’s decline, it was more resilient than the small cap indexes. Compared to the Russell 2000, the Fund’s primary benchmark, the outperformance was driven by stock selection, which added value in most of the sectors we were invested in.

DETAILS OF THE YEAR

Stock selection was particularly strong in the information technology sector, led by substantial gains from the semiconductor and software industries. One of our best-performing names was Interactive Intelligence, a provider of Internet Protocol (IP)-based software that helps businesses run their call centers more efficiently. The company has done remarkably well in the recession, increasing revenues in the second half of 2008 and maintaining flat growth in the first quarter of 2009, when the economy was at its weakest. In July, Interactive Intelligence preannounced better-than-expected revenue and earnings growth for the second quarter, supported by a number of large new contracts. We think that demand for the company’s software has remained healthy due to the robust functionality of its products and the trend away from analog-based telephone systems toward IP-based telephone systems.

Financials was another area where our stock selection contributed to outperformance relative to our benchmark. Our financial stocks lost nearly 11%, on average, but did much better than the financial stocks in the Russell 2000 Index, which fell about 23%. We have limited our exposure to banks, given our concerns that the next story for bad credit will be commercial real estate, the bread and butter of small-bank lending. Nonetheless, we have maintained a close-to-market weighting in financials by investing in companies with less credit risk. Several of these stocks had strong gains during the period, including MFA Financial, a real estate investment trust (REIT) that is benefiting from low funding costs. The

company’s portfolio is concentrated in residential mortgage-backed securities that are issued or guaranteed by government agencies, so they have little-to-no credit risk.

On the minus side, our foreign holdings* lagged our domestic holdings and were a drag on the Fund’s relative performance. International stocks, especially small caps, felt the pressure of forced selling by hedge fund and mutual fund managers last fall. Moreover, the consensus view that emerging markets like China would be fairly immune to the global economic downturn fell by the wayside in the second half of 2008. As the financial crisis deepened, it became clear that the downturn would affect both emerging and developed countries. One of our largest detractors was China Hongxing Sports (China), an athletic shoe and apparel retailer. The company’s earnings declined sharply due to weaker domestic demand, price discounting and heavy promotional spending.

Despite negatively impacting performance this period, our foreign exposure has benefited the Fund in the past, and we remain committed to investing internationally. The globalization of trade and capital flows has created exciting opportunities for small companies around the world. As a result, we want to cast a wide net when looking for interesting growth stocks to own in the Fund.

OUTLOOK

Recent news on the U.S. economy has generally been more favorable than expected, and estimates for third-quarter gross domestic product (GDP)** growth have been rising. Assuming there is no big surprise and growth is indeed positive, it will be the first time that the economy has expanded since the second quarter of 2008. That said, the widely held view is that the recovery will be slow and subdued given the high unemployment rate, which may increase even further.

Stocks are no longer trading at the dramatically low valuations they were trading at earlier in 2009 before the market began to rebound. With the compelling value opportunities behind us and the economy starting to recover, we are continuing to add more classic micro cap growth companies to the Fund. These are companies that we believe can deliver strong, long-term growth because they are well-managed, have unique products and services and are small players in big markets. Although we are always looking for these kinds of names, we have been cautious on new buys due to the state of the economy and their somewhat higher valuations. We are also looking to add new international holdings which, on balance, look attractive to us relative to prospective U.S. investments. Overall, we are optimistic that a more stable, if lower-growth, economic environment will provide us the opportunity to own a portfolio of high-quality micro cap companies at reasonable valuations.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

  *These holdings excluded American Depositary Receipts (ADRs — receipts issued by domestic banks for shares of foreign-based corporations that trade on U.S. stock exchanges) and companies incorporated in other countries but whose shares trade on U.S. stock exchanges.

**Gross domestic product (GDP) is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a country in a year.

20

WASATCH MICRO CAP FUND (WMICX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Micro Cap	-5.70%	1.32%	12.74%
Russell 2000 Index	-9.55%	2.41%	4.88%
Russell Microcap Index	-7.93%	-0.41%	NA

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Fund are 2.11%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
O2Micro International Ltd. ADR (China)	2.52%
Power Integrations, Inc.	2.41%
Resources Connection, Inc.	2.36%
Pericom Semiconductor Corp.	2.31%
Dollar Financial Corp.	2.25%
Big 5 Sporting Goods Corp.	2.09%

Company	% of Fund
Abcam plc (United Kingdom)	2.09%
Micrel, Inc.	1.83%
ICON plc ADR (Ireland)	1.77%
CorVel Corp.	1.70%
	21.33%

*As of September 30, 2009, there were 99 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. 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 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. The Russell Microcap Index is an unmanaged total return index of the smallest 1,000 securities in the small-cap Russell 2000 Index along with the next smallest 1,000 companies, based on a ranking of all U.S. equities by market capitalization. No data was available for the Index prior to 6/30/00. Data for the Index from 6/30/00 until its official start data of July 1, 2005 was from a paper portfolio. You cannot invest directly in these or any indexes.

21

WASATCH MICRO CAP VALUE FUND (WAMVX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Micro Cap Value Fund is managed by a team of Wasatch portfolio managers led by Brian Bythrow and John Malooly.

  Brian Bythrow, CFA Portfolio Manager   John Malooly, CFA Portfolio Manager OVERVIEW   Although this past year began on a very difficult note, by its end we experienced significant improvement. Over the first six months, severe volatility affected virtually every sector,

investment style, and market capitalization in the equity markets. To contend with the global credit crunch, the Federal Reserve and many of the world’s other central banks took a number of bold steps. These efforts had impact, and in the later part of March, stocks began to surge upward. It was, however, unclear whether this marked the beginning of a recovery, or simply a bear-market* rally.

As the year progressed into its second half, the global liquidity crisis eased slightly, giving investors some sense that perhaps the worst of the economic crisis had passed. Investors began to take some of their money off the sidelines and put it back into the equity markets, spurring a strong stock rally. Equities from emerging markets led the way at first, but in time developed markets picked up steam as well, even though the data to support this improvement in investor confidence were at times scarce.

In this changing market environment, the Wasatch Micro Cap Value Fund posted a return of 17.22% for the 12 months ended September 30, 2009. This figure placed the Fund’s performance far ahead of its primary benchmark, the Russell 2000 Index, which returned -9.55% over the same period.

Strong individual stock selection and sector positioning drove the Fund’s outperformance. A key factor was underweighting financials and avoiding banking stocks within the sector. Our overweighting in information technology stocks also contributed positively to performance.

DETAILS OF THE YEAR

A number of our top-performing companies for the year benefited from plans for increased infrastructure spending, both in the U.S. and around the world, as a component of economic stimulus efforts. Our top contributor, Orion Marine Group, Inc., comes from the industrials sector and fits this trend. U.S.-based Orion provides dredging services that are often required by infrastructure projects situated along waterways.

In second place was China’s Wasion Group Holdings Ltd., a producer of electronic power meters and data collection terminals for China’s gas, electricity, and water industries. China’s economic stimulus efforts are centered on infrastructure development, spurring demand for Wasion’s

products. Given the enormous size of China’s planned infrastructure development, demand for Wasion’s equipment appears likely to remain strong.

Rounding out the top three was MYR Group, Inc., a U.S. industrial company that installs equipment used in electrical transmission and distribution. MYR may benefit somewhat from stimulus spending, but perhaps gains more from growing interest in wind farms and other alternative energy sources. Because these facilities are often located long distances from existing power grids, bringing them online requires building additional transmission infrastructure. We purchased MYR at what we considered to be a reasonable valuation. As other investors recognized the company’s potential, the stock’s valuation was pushed up beyond a level we felt was reasonable. At that point we chose to sell our position.

Of course, not all of our strongest stocks were tied to infrastructure spending. For example, Sino Biopharmaceutical Ltd. and China Shineway Pharmaceutical Group Ltd., were top-10 contributors for the year. These companies allow us to tap into the strength of the emerging consumer market in that country, while also benefiting from loyalty to its older, more traditional ways. Both companies offer traditional Chinese medicines, which are still widely used in China and thus provide good cash flow along with modest growth. Current and future holdings are subject to risk.

The companies’ greater potential, however, may come from their move into branded drugs — more like those we see on the drugstore shelf in the U.S. Given the sheer size and growing sophistication of China’s consumer class, we believe this newer area of business offers the opportunity for higher growth in revenues and earnings over the long term.

OUTLOOK

In the stocks we continue to hold, and in those we are adding to the portfolio, we emphasize companies that do not require a powerful economic recovery in order to do well. While the market’s performance suggests a strong level of conviction that a full-blown economic recovery is imminent, we are not so sure.

Clearly the economy has come a long way from the deeply troubled environment it faced late last year, but that doesn’t mean that all the flaws and weaknesses have been fully corrected. Accordingly, we have continued to underweight our exposure relative to the benchmark to stocks tied closely to U.S. consumer spending, and those very sensitive to credit issues.

Despite stocks’ recent run-up, we believe the Fund holds reasonably valued stocks with significant potential for further appreciation. We expect to continue to deploy more cash as we identify worthy opportunities. Given the still-uncertain state of the U.S. and many global economies, though, we will remain sensitive to valuations when buying. This may mean that cash will remain higher than we would like for longer than we would like, but we believe the consequences of imprudent purchases far outweigh those of a bit of excess cash.

Thank you for the opportunity to manage your assets.

 CFA^® is a registered trademark of CFA Institute.

*A bear market is generally defined as a drop of 20% or more in stock prices over at least a two-month period.

22

WASATCH MICRO CAP VALUE FUND (WAMVX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 7/28/03
Micro Cap Value	17.22%	7.61%	10.53%
Russell 2000 Index	-9.55%	2.41%	5.53%
Russell Microcap Index	-7.93%	-0.41%	3.18%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Value Fund are 2.30%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities, especially emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Globe Specialty Metals, Inc.	1.36%
United Online, Inc.	1.29%
Telvent GIT, S.A. (Spain)	1.26%
SimCorp A/S (Denmark)	1.25%
GuestLogix, Inc. (Canada)	1.24%
Wirecard AG (Germany)	1.24%

Company	% of Fund
Intevac, Inc.	1.24%
Transat A.T. Inc. (Canada)	1.23%
Opnet Technologies, Inc.	1.23%
Celadon Group, Inc.	1.21%
	12.55%

*As of September 30, 2009, there were 108 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: July 28, 2003. 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 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. The Russell Microcap Index is an unmanaged total return index of the smallest 1,000 securities in the small-cap Russell 2000 Index along with the next smallest 1,000 companies, based on a ranking of all U.S. equities by market capitalization. No data was available for the Index prior to 6/30/00. Data for the Index from 6/30/00 until its official start date of July 1, 2005 was from a paper portfolio. You cannot invest directly in these or any indexes.

23

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Small Cap Growth Fund is managed by a team of Wasatch portfolio managers led by Jeff Cardon.

  Jeff Cardon, CFA Portfolio Manager OVERVIEW   The Wasatch Small Cap Growth Fund gained 8.20% during the 12 months ended September 30. The Fund outperformed the Russell 2000 Growth and Russell 2000 indexes, which were down 6.32% and 9.55%, respectively. During the fear phase of a bear market, a “flight to quality” occurs, a phenomenon that clearly happened during the market retreat that began last fall and ended in March 2009. The Fund

had extremely good results relative to the Russell indexes during the market retreat, as investors sought refuge in the types of “steady-eddy” quality growth companies we like to own. As we moved off the market bottom in March of this year, lower-quality stocks began to outperform as investors’ fears started to dissipate. This “junk rally” picked up steam in the third quarter of 2009, and we gave up some ground relative to the small cap indexes. In spite of this flight to low quality, the Fund finished the 12-month period significantly ahead of the Russell benchmarks.

DETAILS OF THE YEAR

As you know, the Fund’s prospectus allows us to invest up to 20% of our assets at the time of purchase in foreign securities. Our global reach added value this year, since our foreign investments posted stronger gains than our domestic investments. We research companies around the world, not only because there are so many interesting small cap companies to invest in outside the United States, but because it makes us smarter investors in evaluating domestic companies competing in a global marketplace. For example, in evaluating a U.S. regional bank, the main focus right now is on the size of the bank’s non-performing loans — not exactly a conversation that is interesting to a growth manager. On the other hand, when we discuss the future with HDFC Bank Ltd., the premier Indian bank we own in the Fund, the conversation is focused on growth and opportunity, not survival. Over the last 12 months ended September 30, HDFC Bank was up 39.3%,* while the regional bank segment of the Russell 2000 Growth Index was down 27.7%.

The impact of owning quality growth was even more profound to our performance than our global perspective. Many of the stocks that drove our performance are what we consider to be our highest-quality names — names like O’Reilly Automotive, MSCI, Inc., Power Integrations, Cognizant Technology Solutions and Knight Transportation. As we have discussed many times in previous reports, management vision and passion is an important input as we assess the quality of a company. This group of outperformers certainly represents the kind of attributes we like to see in our management teams.

On the minus side, Icon plc and Kendle International were two positions that did poorly. Both companies are contract research organizations (CROs) that run clinical studies for biotechnology and pharmaceutical firms. The CRO industry has been hurt by concerns that health care reform will stifle innovation in the sector. We agree that innovation is likely to decline if major health care legislation is passed. In response to this changing regulatory environment, we ended the period with an underweight in health care, an area where we have traditionally been overweight.

OUTLOOK

As our economy starts to rebound, we think it will struggle to grow at a normal rate due to massive U.S. debt. We doubt that our country will be receptive to a new financial bubble any time soon, given the string of bubbles our economy has suffered during the past 10 years, from the Internet bubble in the late 1990s to the collapse of super-levered financial institutions last year. In such a low-growth, no-frills economy, we believe quality companies will shine, and that our focus on quality will continue to benefit the Fund.

We typically do not talk about mutual fund rankings, because they tend to focus on short-term performance. However, Kiplinger’s Personal Finance magazine recently published annualized total return rankings that cover a 20-year period. The Small Cap Growth Fund placed second in the Morningstar Small and Midsize Growth category for its annualized performance during the 20 years ended June 30, 2009.** We think this performance reflects our insistence on executing to a consistent, long-run strategy. Whatever direction the market might take in the future, you can be confident that we will stay focused on one thing, which is to buy and hold high-quality growth stocks.

Thank you for the trust that you have placed in us.

CFA^® is a registered trademark of CFA Institute.

  * Source: Wasatch.

** “And the Leaders Are…” Kiplinger’s Personal Finance, September 2009, 42. Excludes funds that are less than a year old, have a minimum investment of $100,000 or more, sold only to special groups or institutional investors, or are only available through IRAs. When a fund has many share classes sold with different fee structures but that have essentially the same returns, the oldest share class open to new investors is usually listed. As of 9/30/09, the Fund’s 1-, 5- and 10-year absolute ranks in the Morningstar Small Growth category were 55 of 782 funds, 209 of 555 funds, and 21 of 308 funds, respectively. Absolute rank is the placement of a particular fund in a simple ranking of its peers (Morningstar Category) for a specific datapoint.

  ^©2009 Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

24

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Small Cap Growth	8.20%	2.93%	7.97%
Russell 2000 Growth Index	-6.32%	2.91%	1.10%
Russell 2000 Index	-9.55%	2.41%	4.88%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Growth Fund are 1.21%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
MSCI, Inc., Class A	2.89%
MSC Industrial Direct Co., Inc, Class A	2.88%
Power Integrations, Inc.	2.84%
Dril-Quip, Inc.	2.70%
Cognizant Technology Solutions Corp., Class A	2.67%
Hibbett Sports, Inc.	2.48%

Company	% of Fund
HDFC Bank Ltd. ADR (India)	2.43%
Resources Connection, Inc.	2.43%
Knight Transportation, Inc.	2.37%
Copart, Inc.	2.23%
	25.92%

*As of September 30, 2009, there were 92 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Growth Index is an unmanaged total return index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher 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 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in these or any indexes.

25

WASATCH SMALL CAP VALUE FUND (WMCVX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Small Cap Value Fund is managed by a team of Wasatch portfolio managers led by Jim Larkins.

  Jim Larkins, MBA Portfolio Manager OVERVIEW   The Wasatch Small Cap Value Fund returned -2.48% during the 12-month period ended September 30, 2009, and substantially outperformed the - -12.61% return of its benchmark, the Russell 2000 Value Index. Negative performance aside, we are pleased that the Fund outperformed the Index by such a wide margin during such a challenging period. Notably, the Fund’s outperformance was the result

of two important factors. First, several holdings returned to what we felt were more appropriate valuations as economic conditions stabilized, rewarding our decision to maintain these positions when broader market trends went against us at the end of 2008. We also benefited from buying “fallen angels” that we consider high quality with excellent risk/return profiles at the depths of the downturn. We believe this illustrates how deep knowledge of the companies held in the Fund helps us distinguish between their actual worth and the often irrational values afforded their stocks in the market.

DETAILS OF THE YEAR

To better understand the Fund’s strong performance of the past year relative to that of the benchmark it’s important to appreciate the rare opportunity that presented itself during the severe market correction of late 2008 to early 2009. This downturn provided us with the chance to buy several fallen angels — companies that have been covered by Wasatch’s growth team for years, but whose stocks were often too richly valued to be held in this Fund. When the bear market* turned many of these growth stocks into value stocks, we took the opportunity to add to the Fund what we believed were best-in-class market leaders for which the recession would likely represent only a short-term disruption.

An example is Cognizant Technology Solutions Corp., an information technology outsourcing company with significant operations in India that has been held in some of the Wasatch growth funds for most of this decade. We felt comfortable owning Cognizant even at a time of slow global growth, as we believed it had the ability to grow earnings despite economic headwinds. Cognizant’s shares more than doubled from our initial purchases, which helped make the stock one of the Fund’s largest contributors for the annual period. Another fallen angel of note was NBTY, Inc., a company that sells natural foods and nutritional supplements under various brand names, including Nature’s Bounty. When NBTY’s stock was hit hard in 2008 due to the economic slowdown and problems with an acquisition, we decided to buy shares based on several factors: it is a leading company in its industry, has strong free cash flow, and an excellent long-term track record. NBTY’s stock recovered nicely, providing a boost to the Fund’s performance.

Information technology was home to some of our best performing stocks. Our holdings in this sector delivered a gain of over 15%, well above the almost 7% return for the tech stocks in the benchmark. The financials sector was also a source of outperformance. Here, we worked to identify — and avoid — companies with sensitivity to the banking and credit crisis. This resulted in a substantially underweight position in financials, which aided relative results given that this sector turned in the weakest performance within the Index.

Naturally, the Fund’s sector weights did not all add value. Certain sectors where we were underweight, namely materials and consumer discretionary, detracted from performance versus the Index. Additionally, our performance in materials was hurt by a position in Globe Specialty Metals, Inc., a producer of silicon, the material used to make solar cells. Decreased demand caused silicon prices to decline, contributing to a more than 50% drop in Globe’s stock price. Other detractors of note included The Bank of N.T. Butterfield & Son Ltd. and TETRA Technologies, Inc. Current and future holdings are subject to risk.

OUTLOOK

Even though the stock market has generated impressive gains since early March, we remain cautious in our approach. Many stocks now appear to be priced for a strong economic recovery — making them vulnerable if the economy does not continue to recover. In this environment, we are maintaining a focus on higher-quality companies. One aspect of this approach is our willingness to book profits when we think the performance of our holdings has run ahead of companies’ fundamentals, and then redeploy the proceeds into stocks that offer better risk/reward profiles. In our view, this is a trade-off investors need to make with the market up more than 50% from its lows reached in early March. A second key aspect of our strategy is our emphasis on quality, cash-rich companies with strong balance sheets, as this provides the potential for downside protection in what still could be a difficult environment. Our goal is to own companies whose stock prices are down due to temporary factors and are not driven solely by momentum or cyclical trends, but rather by the companies’ sustainable, secular growth.

The past 12 months are somewhat of a microcosm of the past decade. In the year and the decade, we have witnessed numerous occasions when market volatility caused stock prices to become divorced from companies’ actual intrinsic values. In these cases, we sought to exploit extreme market movements by investing in what we considered to be great growth companies when their stocks became undervalued. Over time, we believe the Fund’s objective will be best achieved by using Wasatch’s institutional memory, in combination with our fundamental research, to ensure that the Fund is invested in companies that we believe are high quality and attractively valued.

Thank you for the opportunity to manage your assets.

  *A bear market is generally defined as a drop of 20% or more in stock prices over at least a two-month period.

26

WASATCH SMALL CAP VALUE FUND (WMCVX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Small Cap Value	-2.48%	0.99%	10.88%
Russell 2000 Value Index	-12.61%	1.78%	8.05%
Russell 2000 Index	-9.55%	2.41%	4.88%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Value Fund are 1.81%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Emeritus Corp.	2.70%
Pericom Semiconductor Corp.	2.56%
Cognizant Technology Solutions Corp., Class A	2.43%
HEICO Corp., Class A	2.32%
MEDNAX, Inc.	2.16%
NBTY, Inc.	2.08%

Company	% of Fund
Pharmaceutical Product Development, Inc.	2.07%
Copart, Inc.	2.03%
MFA Financial, Inc.	2.02%
NeuStar, Inc., Class A	1.81%
	22.18%

*As of September 30, 2009, there were 73 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Value Index measures the performance of those Russell 2000 Index 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 Index is widely regarded in the industry as accurately capturing the universe of small company stocks. You cannot invest directly in these or any indexes.

27

WASATCH STRATEGIC INCOME FUND (WASIX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Strategic Income Fund is managed by a team of Wasatch portfolio managers led by Sam Stewart.

  Samuel S. Stewart, Jr. PhD, CFA Portfolio Manager OVERVIEW   The past 12 months have been a roller coaster for the market and the economy. The acutely bearish events of last fall (e.g. Lehman, AIG, etc.) sent the market into a tailspin that didn’t end until March 9th. Since that date the market has rebounded dramatically, with the S&P 500 Index increasing 56% off the bottom. However, it still remains 32% below its October 2007 high. I am not satisfied that the Wasatch Strategic Income Fund declined by

6.49% during the past year. The Fund performed slightly better than the 6.91% loss of the S&P 500 Index, but it trailed the 10.56% gain of the Barclays Capital U.S. Aggregate Bond Index, which benefited in the downturn as many investors retreated to the perceived safety of bonds. We technically achieved our goal of delivering absolute returns between those of stocks and bonds, but, frankly, we were too close to stocks in such a tumultuous period.

DETAILS OF THE YEAR

Over the course of this year I have become a more “cautious committer of capital” in the Fund. As such, I recently sold positions when their valuations became stretched in the market rally. Early in 2009, I was seeing valuations that made me want to “back up the truck,” but as the market has recovered I’ve found it prudent to take some profits. At times, I’ve clearly sold early but I’ve been happy to avoid the growing risk in the stock’s valuation.

For example, I sold Kansas City Southern and Chesapeake Energy Corp. recently. These are good companies that shared a common theme of simply becoming overvalued. The risk/reward potential of these stocks no longer felt appropriate for the Strategic Income Fund.

As I’ve looked for new opportunities this past quarter, my primary focus has been on higher quality stocks with lower historic volatility, which I hope will help reduce the Fund’s beta.* I have been disappointed with the amplitude of the Fund’s performance swings, particularly the decline that took place during late 2008. I would like to have done a better job limiting losses through that period, so I have consciously increased my risk sensitivity.

I’ve begun rotating into what I consider to be excellent blue chip-type companies with stable business models. While I don’t look for these companies to be home runs, I think they have the potential to provide attractive returns through steady growth and dividends. Examples include International Business Machines Corp., Johnson & Johnson, McDonald’s Corp., CapLease, Inc., and Ares Capital Corp.

By design the Fund maintains an overweight position in financial companies. These firms are key contributors to the income generated by the Fund, but I also see finance companies as the lifeblood of global economic growth. The

lack of available credit from both the banking and “shadow” banking segments during the financial crisis provided evidence of their vital role as we watched the lack of financing bring economic growth to a halt.

With credit markets beginning to show signs of improvement, many financial stocks have rebounded. During the course of the year, the Fund’s financial stocks generally performed well, contributing over four percentage points to performance, while the financials sector of the S&P 500 detracted four points from the Index’s return. I attribute this outperformance to being invested in high quality companies that were able to avoid much of the carnage that gripped the weakest companies in this sector. For example, we owned a large weight in companies that invest in residential mortgage real estate investment trusts (REITs). Even though much of the talk over the last year centered on loan defaults and foreclosures, our companies invested in mortgages that carried the protection of an implicit guarantee from the federal government. With that backing these REITs were able to benefit from nice interest rate spreads and deliver solid business performance. Current and future holdings are subject to risk.

It’s worth noting that the Fund is currently holding more cash than it traditionally has just because I’m struggling to find stocks that are attractively valued. The cash position is not an explicit attempt to time the market, but rather a reflection of what I perceive to be an inadequate balance of risk versus reward potential, at least for a conservative fund like the Strategic Income Fund.

OUTLOOK

Fear is receding and positive signs are emerging in the economy. However, high unemployment, limited credit availability, and growing deficits will likely have a dampening effect on economic growth. While it’s beginning to feel like we have made it across a white-water river, there is still a steep embankment that needs to be climbed before economic safety is reached.

As investors seem to have found relief in the realization that the country is unlikely to fall into the second Great Depression, their optimism may have moved the market ahead of itself. I plan to closely follow the ABCs of investment management (Always Be Cautious), with an emphasis on high quality companies and compelling valuation as the principal components of any investment decision.

Thank you for the opportunity to manage your assets.

CFA® is a registered trademark of CFA Institute.

  *Beta is the measure of a fund’s risk in relation to the market. A beta of 0.8 means the fund’s total return is likely to move up or down 80% of the market change; 1.25 means total return is likely to move up or down 25% more than the market. Beta is referred to as an index of the systematic risk due to general market conditions that cannot be diversified away.

28

WASATCH STRATEGIC INCOME FUND (WASIX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 2/1/06
Strategic Income	-6.49%	N/A	-2.73%
S&P 500 Index	-6.91%	N/A	-3.01%
Barclays Capital U.S. Aggregate Bond Index	10.56%	N/A	6.08%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Strategic Income Fund are 1.73%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

With respect to the Fund’s assets invested in fixed income securities, you are subject, but not limited to, the same interest rate, inflation and credit risk associated with the underlying fixed-income securities owned by the Fund. Return of principal is not guaranteed. Equity investing involves risks, including potential loss of the principal amount invested. Being non-diversified, the Fund can invest a larger portion of its assets in the securities of a limited number of companies than a diversified fund. Non-diversification increases the risk of loss to the Fund if the values of these securities decline. Investing in foreign securities, especially in emerging markets, entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus.

TOP 10 HOLDINGS*

Company	% of Fund
MFA Financial, Inc.	6.10%
Capstead Mortgage Corp.	4.87%
Fifth Street Finance Corp.	3.98%
Redwood Trust, Inc.	3.50%
Ares Capital Corp.	3.12%
Paychex, Inc.	3.06%
Herbalife Ltd.	2.89%

Company	% of Fund
Teva Pharmaceutical Industries Ltd. ADR (Israel)	2.52%
Weg S.A. (Brazil)	2.30%
Broadview Networks Holdings, Inc., 11.375%, 9/1/12	2.07%
	34.41%

*As of September 30, 2009, there were 49 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: February 1, 2006. The S&P 500 Index represents 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged, and a common measure of common stock total return performance. The Barclays Capital U.S. Aggregate Bond 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 directly in these or any indexes.

29

WASATCH ULTRA GROWTH FUND (WAMCX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch Ultra Growth Fund is managed by a team of Wasatch portfolio managers led by Ajay Krishnan.

  Ajay Krishnan, CFA Portfolio Manager OVERVIEW   During the 12 months ended September 30, the Wasatch Ultra Growth Fund lost 0.63% but outperformed the Russell 2000 Growth Index, which fell 6.32%. The period was a tale of two markets. From October 1 through early March, stock prices plunged as the U.S. recession deepened. The market subsequently reversed course, with stocks rallying sharply on signs the economy was stabilizing.

The key to the Fund’s outperformance in the volatile environment was the relative fundamental strength of our portfolio companies. Generally speaking, we owned stocks of companies with better earnings than the average small cap growth company, and our stocks outperformed.

DETAILS OF THE YEAR

In managing the Fund, our focus is on investing in small companies with the potential to consistently grow their earnings by 20% or more a year. We look for emerging leaders in fast-growing industries with good business models and differentiated products and services. If we can buy these companies at reasonable valuations, and hold onto them, we believe that we can produce attractive returns over time.

Earnings growth has been hard to come by in the recession. In fact, the weighted-average earnings-per-share of our portfolio companies fell slightly in the most recent reporting season. Although this was well below our 20% target, it was much better than the 38% earnings decline for the small cap growth market as a whole.* Our companies’ earnings surpassed the broad market earnings in every quarter of the 12-month period. So while the economic environment was difficult, our companies held their own, and investors recognized their better operating results.

One of our best-performing holdings was Cognizant Technology Solutions, a provider of information technology services. The stock posted a substantial gain, even though the company faced several concerns late last year. First, Cognizant derives more than 40% of its sales from the financials sector, which was at the epicenter of the credit crisis. In addition, the election of a Democratic president raised the possibility of policy changes that would hurt firms like Cognizant with offshore operations. Having owned the stock since 1999, we know the company well, and our ongoing discussions with management led us to believe that these concerns were overdone. Our conviction in the name paid off, and Cognizant reported double-digit revenue and earnings growth throughout the period. In the challenging economy, businesses are looking for ways to use technology to boost sales and cut costs, and Cognizant is benefiting as a result.

MSCI, a provider of equity market indexes, was another top performer. The company is capitalizing on two major trends: the increasingly global scope of investing and the

growing popularity of exchange-traded funds (ETFs). MSCI has a great competitive profile — more than 90% of all foreign equity assets managed in the United States are benchmarked against an MSCI index, and MSCI indexes are linked to over 150 ETFs. The company’s dominant market position makes its products hard to displace, creating a significant barrier to entry for potential competitors. We also like the fact that approximately 85% of MSCI’s sales come from subscription contracts because this provides good visibility into revenues.

Two of our worst-performing stocks were Kendle International and Eagle Bulk Shipping, companies with fundamental issues that we sold. Kendle is a contract research organization (CRO) that runs clinical trials for biotech and pharmaceutical firms. The CRO industry has been hurt by concerns that health care reform will slow drug development activity. In addition, current demand has weakened, since smaller biotech customers are dealing with funding issues and larger pharmaceutical customers are restructuring and cutting R&D budgets. Kendle has had a particularly hard time managing its pipeline, and the company experienced a drop in new business and an increase in project cancellations.

Eagle Bulk Shipping operates a fleet of dry-bulk vessels that transport commodities around the world. The global recession and credit crisis wreaked havoc on the dry-bulk industry because demand for commodities plunged and financing for the goods being transported dried up. Conditions have since improved, helped by an increase in imports to China. However, shipping capacity is expected to grow faster than demand, so we think that the competitive environment will become more difficult for Eagle Bulk. Current and future holdings are subject to risk.

OUTLOOK

Many investors have jumped back into the market, and price-to-earnings multiples have expanded to more normal levels. However, there is approximately $3.5 trillion in cash sitting on the sidelines in money market funds. If investors who have stayed in cash decide to put some of that money to work in equities, the rally could continue and valuations could become stretched. Valuations could become even more stretched if earnings growth remains scarce while the economy digs itself out of the recession. In the short run, this type of environment could be challenging for us given our valuation discipline. We see the potential for too much money chasing too little growth.

We believe the best course is to continue to seek and invest in companies where we think the fundamentals are solid and the valuations are still attractive. We are also focused on investing in companies that are sensitive to fast-growing emerging economies.

We expect the economy to grind along, with no sectors attracting inordinate amounts of capital. This kind of stock picker’s market bodes well for Wasatch.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

* Earnings for the broad small cap growth market fell 38.2% in the second quarter according to a 9/28/09 Bank of America-Merrill Lynch report.

30

WASATCH ULTRA GROWTH FUND (WAMCX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Ultra Growth	-0.63%	-0.77%	5.26%
Russell 2000 Growth Index	-6.32%	2.91%	1.10%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Ultra Growth Fund are 1.55%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investing in small cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Cognizant Technology Solutions Corp., Class A	4.50%
MSCI, Inc., Class A	3.44%
Power Integrations, Inc.	2.59%
Montagu Newhall Global Partners II-B, L.P.	2.52%
F5 Networks, Inc.	2.44%
O2Micro International Ltd. ADR (China)	2.13%

Company	% of Fund
VCA Antech, Inc.	2.06%
Silicon Laboratories, Inc.	1.99%
O’Reilly Automotive, Inc.	1.83%
Knight Transportation, Inc.	1.76%
	25.26%

*As of September 30, 2009, there were 99 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 2000 Growth Index is an unmanaged total return index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher 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. You cannot invest directly in these or any indexes.

31

WASATCH-1ST SOURCE INCOME EQUITY FUND (FMIEX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch-1st Source Income Equity Fund is managed by a team of Wasatch portfolio managers led by Ralph Shive and Mike Shinnick.

  Ralph C. Shive, CFA Portfolio Manager   Michael L. Shinnick Portfolio Manager OVERVIEW   The Wasatch-1st Source Income Equity Fund’s return of
-5.63% outperformed the Russell 1000 Value Index return of -10.62% during the 12 months ended

September 30, 2009. In keeping with our focus on providing investors with a degree of potential downside protection, the Fund was positioned with a conservative bias as equities experienced extreme performance both up and down over the period.

The bottom fell out of the financial markets in October and November of 2008, as issues with the financial system translated into the real economy. Deterioration in employment and rising mortgage delinquencies continued into the first quarter of 2009 and the equity markets hit new lows in early March. The next two quarters saw a rebound in stock prices that reversed much of the earlier losses. While most incoming economic data was far from positive, it was less disappointing than expected. The massive concerted effort on the part of the government to revive the financial system gained traction, and market participants had the sense that the worst-case “Depression scenario” had been averted. As the period progressed, there were additional signs of economic improvement, although much of the improvement was driven by government subsidies of key sectors including finance, housing and autos.

We maintained a relatively cautious positioning in the Fund, while trimming our cash position as market sentiment improved. Our cash exposure along with an overweight position in information technology, an underweight in financials and strong stock selection within industrials added to performance versus the Index. The Fund’s relative performance was constrained by an underweight position and weak selection within the consumer discretionary sector, along with an underweight in the materials sector.

DETAILS OF THE YEAR

Our process incorporates both top-down analysis and bottom-up stock selection. This helps us see larger trends that drive many of the portfolio themes, which lead in turn to sector weightings and help determine stock selection and portfolio construction.

A theme we have identified is the growing importance of managing costs within the health care industry. Medical equipment and pharmaceutical supplier McKesson Corp. is an example of this theme that worked well for the Fund. While most analysts view the company as a stodgy drug wholesaler, it

has a small but profitable subsidiary that provides information technology services to the health care sector.

A major theme in the Fund has been a focus on defensive sectors that are less impacted by economic conditions. This helped performance as conditions were weak for much of the period, in particular our exposure to agricultural products giant Archer Daniels Midland Co. and leading national retail pharmacy chain Walgreen Co.

We have added a number of new positions under the theme of electrical energy generation while trimming exposure to gas utilities. Our thinking is that the trend toward greener energy sources will favor electric utilities over gas going forward. The leading contributor to performance under this theme was Cameco Corp. (Canada). Another holding under the broad “green theme” that did well was Johnson Controls, Inc. The company supplies auto parts including batteries for hybrid vehicles, and also provides energy efficient climate control systems for office buildings.

Our information technology exposure overall was a top contributor to performance, with Computer Sciences Corp., Intel Corp. and Texas Instruments Inc. noteworthy holdings.

On the downside, Lincoln National Corp. and The Hartford Financial Services Group, Inc. suffered from concerns over investment losses experienced in the insurance industry. The Dow Chemical Co. and International Paper Co. were negatively impacted by volatile commodity prices as inflation expectations gyrated throughout the period. Conglomerate General Electric Co. suffered from concerns over its financing arm, while cable giant Time Warner Inc. experienced a slowdown due to retrenchment in consumer spending. Current and future holdings are subject to risk.

OUTLOOK

Clearly, stock market investors are anticipating the next business cycle, and are expecting earnings growth to rebound from the valley of the current Great Recession. Indeed, there have been signs of improvement in finance, housing, technology and industrial production. Aggressive corporate cost cutting is setting the table for positive earnings growth as top-line sales rebound.

We subscribe to the view that the economy has begun to undergo what will be a sustained period of deleveraging as consumers repair their balance sheets. With consumer discretionary spending likely to be pinched going forward we expect a slow and erratic recovery. Key questions we are analyzing in managing the Fund include: Can housing rebound in a sustainable way without excessive government subsidies? Also: How will the extraordinary government liquidity programs that have been used to resuscitate the financial sector be unwound? Will political pressure cause these measures to be maintained beyond prudence?

Even in an environment of muted growth, there will be companies positioned to deliver attractive results aided by the shake out of weaker competitors. Our goal remains to provide returns that hold up relatively well during market corrections, while providing the potential for shareholders to participate in market rallies.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

32

WASATCH-1ST SOURCE INCOME EQUITY FUND (FMIEX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Income Equity	-5.63%	5.77%	7.57%
Russell 1000 Value Index	-10.62%	0.90%	2.59%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Income Equity Fund are 1.16%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investments in value stocks can perform differently from the market as a whole and other types of stocks and can continue to be undervalued by the market for long periods of time. Loss of principal is a risk of investing.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
McKesson Corp.	1.98%
Avon Products, Inc.	1.84%
Harris Corp.	1.76%
Computer Sciences Corp.	1.67%
Bank of America Corp.	1.64%
JPMorgan Chase & Co.	1.64%

Company	% of Fund
Hewlett-Packard Co.	1.64%
Novartis AG ADR (Switzerland)	1.64%
The Allstate Corp.	1.63%
Fluor Corp.	1.62%
	17.06%

*As of September 30, 2009, there were 77 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes securities sold short and written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Russell 1000 Value Index measures the performance of Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in these or any indexes.

33

WASATCH-1ST SOURCE LONG/SHORT FUND (FMLSX) — Management Discussion SEPTEMBER 30, 2009

The Wasatch-1st Source Long/Short Fund is managed by a team of Wasatch portfolio managers led by Mike Shinnick and Ralph Shive.

  Michael L. Shinnick Portfolio Manager   Ralph C. Shive, CFA Portfolio Manager OVERVIEW   The Wasatch-1st Source Long/Short Fund provided a total return of 5.35% for the 12 months ended September 30, 2009. This compared to a return of -6.91% for the Fund’s benchmark,

the S&P 500 Index. We are very pleased with the Fund’s positive performance over the year on both an absolute basis and relative to the Index.

In the fourth quarter of 2008, issues with the financial system translated into the real economy, causing a severe decline in the financial markets. This extended into the first quarter of 2009 as the equity markets hit new lows. The next two quarters saw much of the earlier losses recovered, as stock prices rebounded based on economic data that was less disappointing than expected. As the unprecedented government efforts to revive the financial system gained traction, it seemed that investors were ebullient over averting the worst-case scenarios. There were additional signs of economic improvement as the period progressed, driven in part by government subsidies of key sectors including finance, housing and autos.

The Fund’s long and short positions added to performance relative to the benchmark. Among the Fund’s long positions, select holdings within the energy and materials sectors were strong contributors to performance. In terms of what hurt performance, we would like to have been more aggressive in shorting stocks in the fourth quarter of 2008.

DETAILS OF THE YEAR

We generally start with a thematic approach, looking to identify sectors of the economy that are positioned to outperform over time based on some trend we have identified. Then we look at companies that fall under that theme and seek to identify those that are attractively valued and that have good fundamentals, such as strong cash flow, a strong brand or hidden assets. In choosing companies to sell short, we simply invert the analysis.

Several leading contributors were companies with characteristics that positioned them to weather an uncertain environment characterized by less-than-robust consumer spending. A good example was Cerner Corp., a provider of information technology solutions to the health care sector, an area of the economy that is in sharp focus as the country attempts to reduce escalating medical costs.

Companies that provide offshore drilling services to the oil and gas industry including Loews, ENSCO International, Inc., Noble Corp. and Atwood Oceanics, Inc. continued to

benefit from increased investor confidence in the stability of their revenue backlogs. Loews is a conglomerate with insurance and hotel holdings in addition to its oil and gas exposure, and we have felt its value has not been well understood by the market. We also own shares of Loews’ property and casualty insurance subsidiary CNA Financial Corp., and CNA was one of the top contributors to performance for the period.

Several of our basic materials holdings performed well as global demand showed signs of improvement and many commodity prices increased. These included coal producer Alpha Natural Resources, Inc., steel mini-mill Nucor Corp. and fertilizer companies The Mosaic Co. and Potash Corp. of Saskatchewan, Inc.

The biggest detractor from performance for the year among our long positions was Noble International, Ltd., a supplier to the auto industry that filed for bankruptcy. Other detractors included mobile device manufacturer Nokia Corp. and computer giant Microsoft Corp., both of which suffered from the retrenchment in consumer spending and product lifecycle vagaries.

Shorting real estate investment trusts (REITs) added to the Fund’s performance as these issues fell sharply early in 2009. We continue to expect negative pressure on REITs given declining asset values and stress on revenues caused by declining occupancy and rents. Our shorting of select financial and consumer discretionary stocks was also positive for performance. Current and future holdings are subject to risk.

OUTLOOK

Looking ahead, on balance we expect that the stubborn challenges to the real economy posed by continued weakness in the housing sector and high unemployment will eventually cause further revenue and earnings challenges for many companies. However, we are cognizant of the fact that most stocks are in an upward trend and that there are marginal signs of economic improvement and recovery. As a result, we intend to maintain overall flexibility and will not be aggressive in taking short positions until we see actual weakness in the market. We expect there will be additional opportunities to short stocks within the consumer discretionary and financials sectors, as the strength of the current recovery is called into question in the upcoming year.

While we are cautious with respect to stock valuations overall, we remain excited about the prospects for many of our long positions, as high quality business models have not yet been awarded a premium in this market.

We appreciate your support over this first year that we have been part of the Wasatch organization. We look forward to helping you for many years to come as you strive to grow, protect and compound your assets.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

34

WASATCH-1ST SOURCE LONG/SHORT FUND (FMLSX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	SINCE INCEPTION 8/1/03
Long/Short	5.35%	5.15%	5.35%
S&P 500 Index	-6.91%	1.02%	3.11%
Citigroup U.S. Domestic 3-Month Treasury Bills Index	0.39%	2.96%	2.59%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Long/Short Fund are 1.67%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

The Fund makes short sales of securities which involve the risk that losses may exceed the original amount invested. Equity investing involves risks, including potential loss of the principal amount invested. Being non-diversified, the Fund can invest a larger portion of its assets in the securities of a limited number of companies than a diversified fund. Non-diversification increases the risk of loss to the Fund if the values of these securities decline.

TOP 10 EQUITY HOLDINGS*

Company	% of Fund
Loews Corp.	4.69%
Wal-Mart Stores, Inc.	4.20%
ENSCO International Inc.	2.91%
Akamai Technologies, Inc.	2.69%
Hasbro, Inc.	2.66%
Electronic Arts, Inc.	2.61%

Company	% of Fund
The Allstate Corp.	2.52%
Republic Services, Inc.	2.36%
Transocean Ltd.	2.34%
Noble Corp.	2.34%
	29.32%

*As of September 30, 2009, there were 47 long holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

SECTOR BREAKDOWN**

**Excludes written options, if any.

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. ††Inception: August 1, 2003. The S&P 500 Index includes 500 of the United States’ largest stocks from a broad variety of industries. The Index is unmanaged but is a commonly used measure of common stock total return performance. The Citigroup 3-Month U.S. Treasury Bills Index tracks the performance of U.S. Treasury bills with a remaining maturity of three months. U.S. Treasury bills, which are short-term loans to the U.S. government, are full-faith-and-credit obligations of the U.S. Treasury and are generally regarded as being free of any risk of default. You cannot invest directly in these or any indexes.

35

WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Management Discussion SEPTEMBER 30, 2009

  Van R. Hoisington Portfolio Manager OVERVIEW   For the 12 months ended September 30, 2009, the Wasatch-Hoisington U.S. Treasury Fund gained 12.49%, and outperformed the Barclays Capital U.S. Aggregate Bond Index, which returned 10.56%.   DETAILS OF THE YEAR   In the three months ended September 30, the Fund returned 5.84%, compared to 3.74% return for the Index. The yield

on 30-year Treasury bonds was 4.05% at the close of the quarter, down from 4.31% a year ago. Thus, for the 12-month period, a drop in bond yields meant that the market value of the Fund increased, enhancing the coupon (interest) on the Treasury bonds held by the Fund. The lower Treasury bond yields reflected very depressed economic conditions.

OUTLOOK

The Federal Reserve reported that as of June 30, 2009 total U.S. debt was $52.8 trillion. Total U.S. debt includes government, corporate and consumer debt. Importantly, however, it does not include a few trillion dollars in “off balance sheet” financing, contingent unfunded pension plans for corporations and state and local governments, or unfunded liabilities of the U.S. government for such items as Medicare, Social Security and other programs. Currently, gross domestic product (GDP)* stands at $14.2 trillion, so there is approximately $3.73 in debt for every dollar of output in the United States, a level unprecedented in our history. Normally, debt levels as a percent of GDP would be uninteresting and immaterial; however, the current level of debt is unique in two ways. First, the value of the assets purchased by the debt is declining. Second, the money that was borrowed to purchase those assets was often fraudulently expended — neither the borrower nor the lender really expected the debt to be serviced. Rather, each party expected the asset price to rise so that when the asset was sold the proceeds would extinguish the debt.

Presently, in this worst of all post-war recessions we are witnessing the collapse of asset prices that were inflated by the speculation of earlier years. The aftermath of that speculation and its impact on the economy has been thoroughly studied prior to our present business cycle by the economists of yesteryear. The most famous of these economists was Irving Fisher (1867-1947), who in 1933 wrote about this problem of over-indebtedness (Irving Fisher, 1933, Econometrica, “The Debt-Deflation Theory of Great Depressions”). He stated that over-indebtedness was the difference between normal business cycles (recessions), and extreme business cycle fluctuations (depressions). Based on his analysis of the great depressions of 1837, 1873, and 1929 he outlined a pattern of economic developments that will take place when the debt cycle is broken. Seemingly old news, but it is interesting to apply his sequence of events to today’s economic developments as there are disturbing similarities.

The uncomfortable conclusion of Fisher’s analysis is that major business cycle fluctuations are, in fact, caused by over-indebtedness and the fall in asset prices. Our present situation appears to mirror the exact sequence of events that have occurred in previous depressions. This suggests that our current “great recession” may morph into a more serious and elongated downward business cycle.

The inflation outlook from the monetary and fiscal standpoint looks truly deflationary, yet some believe that dollar weakness will reverse this circumstance and create inflation. This is unlikely. First, our imports are about 13% of GDP, and even if the dollar were to halve in value, the price of imported goods would not only have to compete with U.S. producers, but also their price adjustment would have to offset the other 87% of factors included in the pricing indexes. Second, unlike the 1930s a 50% decline in the dollar would be difficult to engineer. Fisher recommended to Roosevelt that the U.S. should exit the gold standard, which he did in April of 1933. That was a fixed exchange rate system, and within three months the dollar lost more than 30% against the gold block countries and fell to 60% of its former value within the next five months. This spurred our exports and provided some price inflation (2.9% per year, GDP deflator**) for the next four years. Then, in 1937 the tax increases (the next policy mistake) reversed the positive growth rate of the economy and drove price levels and economic activity downward again. However, even with that small period of price increases the overall price level never recovered from the 25% decline that occurred from 1929 to 1933, and thus deflation reigned. Today, the declining dollar is a good thing in terms of our trade balance, but the modest change will be insufficient to offset the negative forces of insufficient domestic demand.

Next year, we expect the core GDP deflator to fall to at least zero. Likewise, long-term interest rates, which are highly sensitive to inflation, may continue to move toward lower levels. Longer dated Treasury interest rates could mirror those of Japan, which provides a modern signpost for a deflationary environment. Currently, the Japanese 10-year note stands at 1.3% with Japan’s 30-year bond yielding 2.1%.

Such an environment has the potential to be beneficial for patient investors in long-dated U.S. Treasury securities (maturities longer than 20 years) like those held in the Wasatch-Hoisington U.S. Treasury Fund.

Thank you for the opportunity to manage your assets.

  *Gross domestic product (GDP) is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a country in a year.

**The GDP deflator is a measure of the level of prices (whether they have gone up — inflation, or down — deflation) of all new, domestically produced, final goods and services in an economy. The GDP deflator is not based on a fixed basket of goods and services. The basket is allowed to change with people’s consumption patterns. Therefore, new expenditure patterns are allowed to show up in the deflator as people respond to changing prices.

36

WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
U.S. Treasury	12.49%	7.90%	8.55%
Barclays Capital U.S. Aggregate Bond Index	10.56%	5.13%	6.30%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-Hoisington U.S. Treasury Fund are 0.74%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investments in fixed income funds are subject to the same interest rate, inflation, credit and other risks associated with the underlying bonds. Return of principal is not guaranteed.

TOP 10 HOLDINGS*

Holding	Maturity Date	% of Fund
U. S. Treasury Strip, principal only	11/15/27	27.15%
U.S. Treasury Bond, 4.75%	2/15/37	17.23%
U.S. Treasury Strip, principal only	2/15/37	15.15%
U.S. Treasury Bond, 4.50%	2/15/36	11.36%
U.S. Treasury Bond, 4.25%	5/15/39	7.96%
U.S. Treasury Bond, 4.50%	5/15/38	6.98%

Holding	Maturity Date	% of Fund
U. S. Treasury Strip, principal only	5/15/39	3.50%
U.S. Treasury Bond, 5.25%	2/15/29	3.40%
U.S. Treasury Bond, 4.50%	8/15/39	3.15%
U.S. Treasury Bond, 5.375%	2/15/31	2.31%
		98.19%

*As of September 30, 2009, there were 11 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

INVESTMENTS & CASH

**Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Barclays Capital U.S. Aggregate Bond 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 directly in this or any index.

37

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Management Discussion SEPTEMBER 30, 2009

  Paul W. Gifford, CFA Portfolio Manager OVERVIEW   The Wasatch-1st Source Income Fund returned 8.42% during the 12-months ended September 30, 2009. Over the same time period, the Barclays Capital U.S. Intermediate Government/Credit Bond Index returned 10.01%. Interest rates fell during the period adding significant price appreciation to fixed income securities.

FULL CIRCLE

Normally, the idea that interest rates fell would be a good start for explaining why bonds provided a better return than their stated coupon rate. The problem is that this has been anything but a normal year, as we all know. In managing fixed income investments over the past 20 plus years, I have seen many different market conditions — bond funds with negative returns (1994), rapidly falling interest rates (1995), illiquid bonds (Asian currency crisis 1998) and a credit crisis (2001-02). Each market taught lessons that served as a basis to help manage the portfolio in 2008-09 when all four conditions were present during various parts of the year!!

During the fourth quarter of 2008, we were seeing enormous government intervention primarily focused on providing capital to banks via the Troubled Asset Relief Program (TARP). At this time many non-traditional finance and brokerage companies did everything in their power to become banks and receive capital injections from the U.S. government.

In the first quarter of 2009, we saw more new programs aimed at unfreezing the credit markets, namely the Treasury Loan Guarantee Fund (TLGF) and the Term Asset-Backed Securities Loan Facility (TALF). TLGF put the balance sheet of the Federal Deposit Insurance Corporation (FDIC) into play as it guarantees the bonds issued under this program. TLGF did succeed in allowing banks to issue new debt, rollover maturing debt and avoid defaults.

The second quarter of 2009 was marked by the tremendous bond purchase program put in place by the Federal Reserve. During the last six months, the Federal Reserve has purchased over $1 trillion of Treasury, agency and mortgage-backed debt. That is equivalent to 10% of the value of the Barclays Capital U.S. Aggregate Bond Index.

The third quarter was when we saw credit spreads tighten to the ranges seen prior to the crisis. We have also seen the first programs put in place last year begin to expire with no disruption in the markets. This is very good news.

You might think that with all that has happened this year the markets would still be awry. But that is not the case. When you look at the current bond market and consider several points you will see why we have come “full circle.” Interest rates are starting to rise as the economy begins a very modest recovery. Credit spreads are back to levels seen prior to the summer of 2008 when government agencies Freddie Mac and Fannie Mae were placed in conservatorship. Buying

and selling of bonds is again possible. Lastly, bond fund returns are again positive.

THE AFTERMATH

While it is good news that we have come full circle, many issues will challenge bond investors going forward. First, the slow recovery will still put pressure on fixed income securities and we will see more defaults, possibly even in investment grade securities. Second, the incredible amount of debt issued by the U.S. government will have unknown impacts. Finally, the Federal Reserve has implied that it will be slow to raise interest rates, meaning that rates for bonds with very short maturities will be near zero percent. The last time the Fed kept interest rates low for a long period of time we had the housing bubble as a consequence.

We remain defensive as we enter the new fiscal year. We will continue to position the Fund by employing strategies to keep interest rate risk in check, focusing on high-quality fixed income securities and keeping a close eye on inflation.

Thank you for the opportunity to manage your assets.

CFA^® is a registered trademark of CFA Institute.

38

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Portfolio Summary SEPTEMBER 30, 2009

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR	5 YEARS	10 YEARS
Income Fund	8.42%	3.90%	4.89%
Barclays Capital U.S. Intermediate Government/Credit Bond Index	10.01%	4.68%	5.90%

Data shows past performance, which is not indicative of future performance. Current performance may be lower or higher than the performance quoted. To obtain the most recent month-end performance data available, please visit www.wasatchfunds.com. The Advisor may absorb certain Fund expenses, without which total return would have been lower. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.

As of the January 31, 2009 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Income Fund are 0.82%. The expense ratio shown elsewhere in this report may be higher. Total Annual Fund Operating Expenses include direct expenses paid to the Advisor as well as indirect expenses incurred by the Fund as a result of its investments in other investment companies (each an “Acquired Fund”), before any expense reimbursements by the Advisor. The Net Expense includes any reimbursement by the Advisor. See the prospectus for additional information regarding Fund expenses.

Wasatch Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. Performance data does not reflect the deduction of fees or taxes, which if reflected, would reduce the performance quoted. For more complete information including charges, risks and expenses, read the prospectus carefully.

Investments in fixed income funds are subject to the same interest rate, inflation, credit and other risks associated with the underlying bonds. Return of principal is not guaranteed.

TOP 10 HOLDINGS*

Holding	Maturity Date	% of Fund
U.S. Treasury Note, 3.75%	11/15/18	4.70%
U.S. Treasury Note, 1.625%	1/15/18	4.35%
U.S. Treasury Note, 4.25%	8/15/15	3.80%
Federal Home Loan Mortgage Corp., 5.50%, Series R010, Class AB	12/15/19	2.05%
Government National Mortgage Assoc., 5.00%, Class A	9/16/31	1.63%
Federal Home Loan Bank, 5.00%	9/14/12	1.48%

Holding	Maturity Date	% of Fund
Federal National Mortgage Assoc., 4.375%	7/17/13	1.42%
Citibank Credit Card Issuance Trust, 5.45%, Series 2006-A4, Class A4	5/10/13	1.39%
iShares iBoxx Investment Grade Corporate Bond Fund		1.30%
Federal Home Loan Mortgage Corp., 5.50%	3/28/16	1.29%
		23.41%

*As of September 30, 2009, there were 168 holdings in the Fund. Portfolio holdings are subject to change at any time. References to specific securities should not be construed as recommendations by the Funds or their Advisor. Current and future holdings are subject to risk.

INVESTMENTS & CASH

**Collateralized Mortgage Obligations

†Also includes Other Assets and Liabilities.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT

Past performance does not predict future performance and the graph above does not reflect the deduction of taxes that you would pay on fund distributions or the redemption of fund shares. Performance shown in the chart above does not include any applicable sales charges and fees. Wasatch does not charge any sales fees. The Barclays Capital U.S. Intermediate Government/Credit Bond Index is an unmanaged index considered representative of the performance of government and corporate bonds with maturities of less than 10 years. You cannot invest directly in this or any index.

39

WASATCH FUNDS — OPERATING EXPENSES (UNAUDITED)

EXPENSE EXAMPLE

As a shareholder of Wasatch Funds, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Wasatch Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000.00 invested at the beginning of the period and held for the entire six month period ended September 30, 2009.

ACTUAL EXPENSES

The first line of the table below provides information about actual account values and actual expenses, based upon the actual total return of the fund during the most recent six month period ended September 30. You may use the information in this line, together with the amount you invested, to estimate the expenses you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

In addition, the Funds charge a $15.00 IRA distribution fee, a $12.50 IRA annual maintenance fee and a $15.00 fee for redemptions paid by wire. To the extent these fees apply to your account, your expenses paid during the period would be higher and your ending account value would be lower than the amounts shown in the table below.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Wasatch Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

In addition, the Funds charge a $15.00 IRA distribution fee, a $12.50 IRA annual maintenance fee and a $15.00 fee for redemptions paid by wire. To the extent these fees apply to your account, your expenses paid during the period would be higher and your ending account value would be lower than the amounts shown in the table below. If another fund’s fees differ from those listed above, your expenses paid and your ending account value could be higher or lower than those of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

40

SEPTEMBER 30, 2009

	Account Value		Expenses Paid During Period*	Annualized Expense Ratio*
Fund/Class and Return	Beginning of Period April 1, 2009	End of Period September 30, 2009
Core Growth Fund
Actual	$1,000.00	$1,488.20	$7.98	1.28%
Hypothetical (5% before expenses)	$1,000.00	$1,018.65	$6.48	1.28%
Emerging Markets Small Cap Fund
Actual	$1,000.00	$1,914.60	$15.34	2.10%
Hypothetical (5% before expenses)	$1,000.00	$1,014.54	$10.61	2.10%
Global Opportunities Fund
Actual	$1,000.00	$1,536.40	$14.31	2.25%
Hypothetical (5% before expenses)	$1,000.00	$1,013.79	$11.36	2.25%
Global Science & Technology Fund
Actual	$1,000.00	$1,486.60	$12.16	1.95%
Hypothetical (5% before expenses)	$1,000.00	$1,015.29	$9.85	1.95%
Heritage Growth Fund
Actual	$1,000.00	$1,362.70	$5.63	0.95%
Hypothetical (5% before expenses)	$1,000.00	$1,020.31	$4.81	0.95%
Heritage Value Fund
Actual	$1,000.00	$1,277.70	$5.42	0.95%
Hypothetical (5% before expenses)	$1,000.00	$1,020.31	$4.81	0.95%
International Growth Fund
Actual	$1,000.00	$1,673.90	$12.87	1.92%
Hypothetical (5% before expenses)	$1,000.00	$1,015.44	$9.70	1.92%
International Opportunities Fund
Actual	$1,000.00	$1,713.00	$15.30	2.25%
Hypothetical (5% before expenses)	$1,000.00	$1,013.79	$11.36	2.25%
Micro Cap Fund
Actual	$1,000.00	$1,479.10	$13.61	2.19%
Hypothetical (5% before expenses)	$1,000.00	$1,014.09	$11.06	2.19%
Micro Cap Value Fund1
Actual	$1,000.00	$1,688.00	$15.30	2.27%
Hypothetical (5% before expenses)	$1,000.00	$1,013.69	$11.46	2.27%
Small Growth Fund
Actual	$1,000.00	$1,431.60	$7.56	1.24%
Hypothetical (5% before expenses)	$1,000.00	$1,018.85	$6.28	1.24%
Small Cap Value Fund
Actual	$1,000.00	$1,580.50	$12.16	1.88%
Hypothetical (5% before expenses)	$1,000.00	$1,015.64	$9.50	1.88%
Strategic Income Fund1
Actual	$1,000.00	$1,353.40	$6.08	1.03%
Hypothetical (5% before expenses)	$1,000.00	$1,019.90	$5.22	1.03%
Ultra Growth Fund
Actual	$1,000.00	$1,483.00	$10.89	1.75%
Hypothetical (5% before expenses)	$1,000.00	$1,016.29	$8.85	1.75%
Wasatch-1st Source Income Equity Fund
Actual	$1,000.00	$1,305.00	$6.41	1.11%
Hypothetical (5% before expenses)	$1,000.00	$1,019.50	$5.62	1.11%
Wasatch-1st Source Long/Short Fund
Actual	$1,000.00	$1,272.00	$10.99	1.93%
Hypothetical (5% before expenses)	$1,000.00	$1,015.39	$9.75	1.93%
U.S. Treasury Fund
Actual	$1,000.00	$942.50	$3.65	0.75%
Hypothetical (5% before expenses)	$1,000.00	$1,021.31	$3.80	0.75%
Wasatch-1st Source Income Fund
Actual	$1,000.00	$1,046.80	$4.26	0.83%
Hypothetical (5% before expenses)	$1,000.00	$1,020.91	$4.20	0.83%

*Expenses are equal to the Funds’ annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the full fiscal year (183/365).

¹ The annualized expense ratio includes dividend payments for securities sold short and/or line of credit interest fees. Excluding these items the annualized expense ratio would have been 2.25% and .95% for the Micro Cap Value and Strategic Income funds respectively. Dividend payments for securities sold short and line of credit interest fees are not a reimbursable expense under the contractual agreement between the Fund and the Advisor.

41

WASATCH CORE GROWTH FUND (WGROX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 94.1%
	Agricultural Products 1.9%
5,388,871	Chaoda Modern Agriculture Holdings Ltd. (China)	$	3,275,022
5,348,400	China Green Holdings Ltd. (China)		4,547,836
			7,822,858
	Airlines 1.5%
164,349	Allegiant Travel Co.*		6,260,053
	Apparel, Accessories & Luxury Goods 2.3%
3,831,042	Ports Design Ltd. (China)		9,570,128
	Application Software 1.2%
299,300	Tyler Technologies, Inc.*		5,115,037
	Asset Management & Custody Banks 5.3%
45,994	Affiliated Managers Group, Inc.*		2,990,070
434,364	SEI Investments Co.		8,548,283
880,060	Solar Capital, LLC** *** †		7,304,498
96,720	Waddell & Reed Financial, Inc., Class A		2,751,684
			21,594,535
	Automotive Retail 3.4%
154,141	Monro Muffler Brake, Inc.		4,900,143
244,674	O’Reilly Automotive, Inc.*		8,842,518
			13,742,661
	Construction & Engineering 0.9%
87,693	URS Corp.*		3,827,799
	Consumer Finance 2.6%
462,099	Dollar Financial Corp.*		7,402,826
187,235	First Cash Financial Services, Inc.*		3,207,336
			10,610,162
	Data Processing & Outsourced Services 5.2%
170,125	Alliance Data Systems Corp.*		10,391,235
422,485	Fidelity National Information Services, Inc.		10,777,592
			21,168,827
	Distributors 1.6%
356,855	LKQ Corp.*		6,616,092
	Diversified Banks 1.7%
338,626	Axis Bank Ltd. (India)		6,934,776
	Diversified Support Services 5.5%
554,517	Copart, Inc.*		18,415,510
390,471	LPS Brasil-Consultoria de Imoveis S.A.* (Brazil)		4,058,821
			22,474,331
	Environmental & Facilities Services 2.0%
285,940	Waste Connections, Inc.*		8,252,228
	Footwear 1.0%
26,994,340	China Hongxing Sports Ltd. (China)		4,026,287
	Health Care Distributors 3.0%
572,177	PSS World Medical, Inc.*		12,490,624
	Health Care Facilities 6.0%
874,542	Emeritus Corp.*		19,196,197
204,740	VCA Antech, Inc.*		5,505,459
			24,701,656
	Health Care Services 4.0%
298,794	MEDNAX, Inc.*		16,409,766

Shares		Value
	Homefurnishing Retail 3.2%
498,035	Aaron’s, Inc.	$	13,148,124
	Industrial Machinery 2.4%
127,675	Graco, Inc.		3,558,302
218,330	IDEX Corp.		6,102,324
			9,660,626
	Insurance Brokers 1.7%
358,065	Brown & Brown, Inc.		6,860,525
	Internet Software & Services 1.5%
204,181	DealerTrack Holdings, Inc.*		3,861,063
179,210	ValueClick, Inc.*		2,363,780
			6,224,843
	IT Consulting & Other Services 1.9%
204,950	Cognizant Technology Solutions Corp., Class A*		7,923,367
	Leisure Facilities 3.4%
501,558	Life Time Fitness, Inc.*		14,068,702
	Leisure Products 1.4%
251,314	Pool Corp.		5,584,197
	Life Sciences Tools & Services 2.4%
451,515	Pharmaceutical Product Development, Inc.		9,906,239
	Mortgage REITs 3.4%
478,290	Annaly Capital Management, Inc.		8,676,181
349,406	Redwood Trust, Inc.		5,415,793
			14,091,974
	Oil & Gas Equipment & Services 2.8%
130,265	Dril-Quip, Inc.*		6,466,355
527,770	TETRA Technologies, Inc.*		5,114,091
			11,580,446
	Oil & Gas Exploration & Production 2.1%
354,375	Petrohawk Energy Corp.*		8,579,419
	Personal Products 1.7%
218,015	Herbalife Ltd.		7,137,811
	Research & Consulting Services 3.9%
262,493	CRA International, Inc.*		7,163,434
511,532	Resources Connection, Inc.*		8,726,736
			15,890,170
	Semiconductors 4.3%
133,940	Hittite Microwave Corp.*		4,926,313
387,065	Melexis N.V. (Belgium)		3,938,713
507,309	Micrel, Inc.		4,134,568
95,913	Silicon Laboratories, Inc.*		4,446,527
			17,446,121
	Specialized Finance 2.4%
10,861	Crisil Ltd. (India)		908,806
294,430	MSCI, Inc., Class A*		8,721,016
			9,629,822
	Specialty Stores 1.2%
271,425	Hibbett Sports, Inc.*		4,948,078
	Thrifts & Mortgage Finance 1.3%
90,280	Housing Development Finance Corp. Ltd. (India)		5,235,227
	Trading Companies & Distributors 2.7%
151,922	MSC Industrial Direct Co., Inc, Class A*		6,620,761
391,893	Rush Enterprises, Inc., Class B*		4,267,715
			10,888,476

42

SEPTEMBER 30, 2009

Shares		Value
	Trucking 1.3%
179,335	Old Dominion Freight Line, Inc.*	$	5,457,164
	Total Common Stocks (cost $356,287,719)		385,879,151
	PREFERRED STOCKS 1.3%
	Regional Banks 1.3%
1,062,475	Banco Daycoval S.A. Pfd. (Brazil)		5,170,341
	Total Preferred Stocks (cost $7,702,883)		5,170,341

Principal Amount		Value
	SHORT-TERM INVESTMENTS 5.1%
	Repurchase Agreement 5.1%
$20,923,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $21,560,000 of United States Treasury Notes 2.625% due 2/29/16; value: $21,344,400; repurchase proceeds: $20,923,006 (cost $20,923,000)	$	20,923,000
	Total Short-Term Investments (cost $20,923,000)		20,923,000
	Total Investments (cost $384,913,602) 100.5%		411,972,492
	Liabilities less Other Assets (0.5)%		(2,023,462	)
	NET ASSETS 100.0%	$	409,949,030
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Core Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Belgium	1.0
Brazil	2.4
China	5.5
India	3.3
United States	87.8
TOTAL	100.0	%

43

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 92.9%
	Aerospace & Defense 2.0%
31,620	Bharat Electronics Ltd. (India)	$	1,008,152
	Agricultural Products 1.6%
736,609	Chaoda Modern Agriculture Holdings Ltd. (China)		447,665
434,065	China Green Holdings Ltd. (China)		369,093
			816,758
	Air Freight & Logistics 1.7%
1,788,389	Aramex PJSC* (United Arab Emirates)		861,827
	Aluminum 1.1%
911,000	Midas Holdings Ltd. (Singapore)		553,219
	Apparel Retail 1.2%
103,100	Padini Holdings Berhad (Malaysia)		89,367
88,670	Truworths International Ltd. (South Africa)		501,628
			590,995
	Apparel, Accessories & Luxury Goods 2.7%
199,295	Anta Sports Products Ltd. (China)		246,867
366,815	China Dongxiang Group Co. (China)		243,279
361,595	Ports Design Ltd. (China)		903,282
			1,393,428
	Application Software 0.6%
1,694,255	Kingdee International Software Group Co. Ltd. (China)		286,382
	Brewers 1.2%
42,730	Anadolu Efes Biracilik ve Malt Sanayii AS (Turkey)		466,459
62,000	Guinness Anchor Berhad (Malaysia)		123,606
			590,065
	Broadcasting 0.8%
575,000	BEC World Public Co. Ltd. (Thailand)		388,955
	Building Products 0.4%
934,000	Home Product Center Public Co. Ltd. (Thailand)		216,657
	Coal & Consumable Fuels 2.1%
230,180	PT Indo Tambangraya Megah (Indonesia)		577,534
341,400	Tambang Batubara Bukit Asam Tbk PT (Indonesia)		498,059
			1,075,593
	Construction & Engineering 1.5%
62,570	Aveng Ltd. (South Africa)		360,220
34,615	Heerim Architects & Planners (Korea)		376,042
			736,262
	Construction Materials 6.0%
63,515	Adana Cimento Sanayii Turk Anonim Sirketi (Turkey)		258,939
1,236	Ceramic Industries Ltd. (South Africa)		16,025
218,700	Corp Moctezuma S.A.B de C.V. (Mexico)		437,343
1,140	HOLCIM Maroc S.A. (Morocco)		277,912
129,735	Pretoria Portland Cement Co. Ltd. (South Africa)		585,426
237,000	PT Indocement Tunggal Prakarsa Tbk (Indonesia)		259,928
1,049,280	PT Semen Gresik (Persero) Tbk (Indonesia)		683,959
7,900	Shree Cement Ltd. (India)		271,512
15,600	Ultra Tech Cement Ltd. (India)		259,303
			3,050,347
	Consumer Finance 1.3%
184,805	Banco Compartamos S.A. de C.V. (Mexico)		674,793

Shares		Value
	Department Stores 4.2%
437,170	Golden Eagle Retail Group Ltd. (China)	$	732,184
42,495	Lojas Renner S.A. (Brazil)		746,864
6,726,400	PT Ramayana Lestari Sentosa Tbk (Indonesia)		452,370
595,000	Robinson Department Store Public Co. Ltd. (Thailand)		190,557
			2,121,975
	Distillers & Vintners 0.4%
22,650	Distell Group Ltd. (South Africa)		189,763
	Diversified Banks 4.6%
294,020	Allahabad Bank Ltd. (India)		730,390
311,380	Asya Katilim Bankasi AS* (Turkey)		650,457
39,860	Bank of Baroda (India)		399,138
36,220	Commercial International Bank GDR (Egypt)		371,979
37,310	National Societe Generale Bank (Egypt)		192,043
			2,344,007
	Diversified Metals & Mining 0.6%
18,555	Hindustan Zinc Ltd. (India)		318,797
	Drug Retail 0.4%
27,000	Corporativo Fragua S.A.B., Class B (Mexico)		207,973
	Education Services 0.8%
2,080	MegaStudy Co. Ltd. (Korea)		428,093
	Electrical Components & Equipment 3.0%
14,600	Voltamp Transformers Ltd. (India)		252,423
591,990	Wasion Group Holdings Ltd. (China)		516,365
426,240	Zhuzhou CSR Times Electric Co. Ltd., Series H (China)		744,678
			1,513,466
	Electronic Equipment & Instruments 0.5%
140,000	Chroma ATE, Inc. (Taiwan)		273,050
	Environmental & Facilities Services 0.6%
10,550	Korea Plant Service & Engineering Co. Ltd. (Korea)		290,108
	Food Retail 5.5%
17,125	BIM Birlesik Magazalar AS (Turkey)		698,155
1,450,930	CP ALL PCL (Thailand)		872,903
103,270	Eurocash S.A. (Poland)		502,985
30,515	Magnit OJSC GDR (Russia)		418,056
37,135	Shoprite Holdings Ltd. (South Africa)		306,472
			2,798,571
	Gas Utilities 0.9%
134,280	Indraprastha Gas Ltd.* (India)		455,835
	Gold 0.8%
55,585	Kingsgate Consolidated Ltd. (Australia)		399,207
	Health Care Equipment 0.3%
4,915	Mindray Medical International Ltd. ADR (China)		160,426
	Health Care Facilities 0.8%
324,930	KPJ Healthcare Berhad (Malaysia)		386,799
	Health Care Supplies 1.5%
232,190	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		766,971
	Heavy Electrical Equipment 0.4%
97,000	China High Speed Transmission Equipment Group Co. Ltd. (China)		199,005

44

SEPTEMBER 30, 2009

Shares		Value
	Highways & Railtracks 1.4%
3,758,555	PT Jasa Marga (Indonesia)	$	727,211
	Home Entertainment Software 1.2%
2,240	NCsoft Corp. (Korea)		321,290
5,825	Shanda Interactive Entertainment Ltd. ADR* (China)		298,240
			619,530
	Home Improvement Retail 1.9%
3,893,750	Ace Hardware Indonesia (Indonesia)		495,532
46,225	Cashbuild Ltd. (South Africa)		465,480
			961,012
	Hotels, Resorts & Cruise Lines 0.5%
704,335	Minor International PCL (Thailand)		261,411
	Industrial Gases 0.9%
167,205	African Oxygen Ltd. (South Africa)		456,267
	Industrial Machinery 4.7%
52,035	AIA Engineering Ltd. (India)		337,002
1,338,930	China Automation Group Ltd. (China)		687,601
55,910	Cummins India Ltd. (India)		406,264
4,170	Duoyuan Global Water, Inc. ADR* (China)		138,861
24,515	Thermax India Ltd. (India)		278,326
55,340	Weg S.A. (Brazil)		528,584
			2,376,638
	Investment Banking & Brokerage 0.8%
38,110	Egyptian Financial Group-Hermes Holding GDR (Egypt)		402,060
	Life & Health Insurance 1.0%
63,800	Amil Participacoes S.A. (Brazil)		350,544
39,930	Discovery Holdings Ltd. (South Africa)		155,202
			505,746
	Managed Health Care 0.8%
19,235	OdontoPrev S.A. (Brazil)		391,285
	Marine Ports & Services 1.8%
779,749	International Container Terminal Services, Inc. (Philippines)		362,062
70,290	Santos Brasil Participacoes S.A.** (Brazil)		556,433
			918,495
	Motorcycle Manufacturers 0.6%
9,000	Bajaj Auto Ltd. (India)		279,654
	Oil & Gas Exploration & Production 2.6%
208,550	Afren plc* (United Kingdom)		267,585
87,295	Dragon Oil plc* (Ireland)		540,649
48,055	Gran Tierra Energy, Inc.*		199,909
63,285	JKX Oil and Gas plc (United Kingdom)		280,986
			1,289,129
	Other Diversified Financial Services 0.5%
13,360	Intergroup Financial Services Corp. (Peru)		247,160
	Packaged Foods & Meats 0.5%
25,400	Nestle (Malaysia) Berhad (Malaysia)		253,193
	Personal Products 1.5%
19,200	Colgate-Palmolive (India) Ltd. (India)		252,527
168,485	Dabur India Ltd. (India)		498,748
			751,275

Shares		Value
	Pharmaceuticals 3.2%
35,500	Egypt International Pharmaceutical Industries Co. (Egypt)	$	224,214
197,800	Genomma Lab Internacional S.A.* (Mexico)		262,381
38,305	Pharmstandard GDR* (Russia)		690,256
53,990	Piramal Healthcare Ltd. (India)		430,304
			1,607,155
	Precious Metals & Minerals 0.6%
63,500	Northam Platinum Ltd. (South Africa)		278,935
	Railroads 1.0%
20,005	Container Corp. of India (India)		497,661
	Restaurants 2.1%
281,570	Ajisen China Holdings Ltd. (China)		250,687
216,400	Alsea de Mexico S.A.B. de C.V.* (Mexico)		139,600
231,600	FUJI Food & Catering Services Holdings Ltd.* *** (China)		114,864
271,700	Jollibee Foods Corp. (Philippines)		283,857
112,780	KFC Holdings (Malaysia) Berhad (Malaysia)		247,653
			1,036,661
	Soft Drinks 1.8%
128,910	Coca-Cola Icecek AS (Turkey)		912,099
	Specialized Finance 5.1%
71,620	BM&F BOVESPA S.A. (Brazil)		529,273
653,100	Bolsa Mexicana de Valores S.A., Series A (Mexico)*		807,804
5,281	Crisil Ltd. (India)		451,018
93,445	JSE Ltd. (South Africa)		771,193
			2,559,288
	Specialty Chemicals 1.1%
8,320	Asian Paints Ltd. (India)		243,132
108,390	China Steel Chemical Corp. (Taiwan)		288,608
			531,740
	Specialty Stores 1.0%
28,500	Dufry South America Ltd. (Brazil)		482,835
	Steel 1.7%
152,320	Sesa Goa Ltd. (India)		841,314
	Technology Distributors 0.5%
1,867,300	Inspur International Ltd. (China)		245,759
	Thrifts & Mortgage Finance 1.5%
48,505	LIC Housing Finance Ltd. (India)		778,571
	Tobacco 2.4%
13,010	Eastern Tobacco (Egypt)		314,018
500	Phillip Morris CR a.s. (Czech Republic)		255,088
425,000	PT Gudang Garam Tbk (Indonesia)		655,199
			1,224,305
	Water Utilities 0.7%
1,153,400	Manila Water Co., Inc. (Philippines)		377,326
	Total Common Stocks (cost $38,887,651)		46,911,194
	PREFERRED STOCKS 4.5%
	Diversified Banks 2.7%
121,400	Banco do Estado do Rio Grande do Sul S.A., Series B Pfd (Brazil)		748,768
91,000	Banco Industrial e Comercial S.A. (Bic Banco) Pfd. (Brazil)		597,312
			1,346,080

45

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Schedule of Investments (continued)

Shares		Value
	Fertilizers & Agricultural Chemicals 0.7%
35,550	Fertilizantes Fosfatados S.A. Pfd.* (Brazil)	$	368,123
	Regional Banks 1.1%
110,445	Banco Daycoval S.A. Pfd. (Brazil)		537,460
	Total Preferred Stocks (cost $1,690,535)		2,251,663
Principal Amount		Value
	SHORT-TERM INVESTMENTS 2.1%
	Repurchase Agreement 2.1%
$1,066,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $1,100,000 of United States Treasury Notes 2.625% due 2/29/16; value: $1,089,000; repurchase proceeds: $1,066,000 (cost $1,066,000)	$	1,066,000
	Total Short-Term Investments (cost $1,066,000)		1,066,000
	Total Investments (cost $41,644,186) 99.5%		50,228,857
	Other Assets less Liabilities 0.5%		260,515
	NET ASSETS 100.0%	$	50,489,372
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). ADR American Depositary Receipt. GDR Global Depositary Receipt. See Notes to Financial Statements.

At September 30, 2009, Wasatch Emerging Markets Small Cap Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	0.8
Brazil	11.9
China	15.0
Czech Republic	0.5
Egypt	3.1
India	18.3
Indonesia	8.8
Ireland	1.1
Korea	2.9
Malaysia	2.2
Mexico	5.1
Morocco	0.6
Peru	0.5
Philippines	2.1
Poland	1.0
Russia	2.3
Singapore	1.1
South Africa	8.3
Taiwan	1.1
Thailand	3.9
Turkey	6.1
United Arab Emirates	1.8
United Kingdom	1.1
United States	0.4
TOTAL	100.0	%

46

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 86.0%
	Advertising 0.3%
8,350	1000mercis* (France)	$	336,206
	Aerospace & Defense 0.3%
10,800	Bharat Electronics Ltd. (India)		344,341
	Agricultural Products 0.5%
718,920	Chaoda Modern Agriculture Holdings Ltd. (China)		436,915
152,000	China Green Holdings Ltd. (China)		129,248
			566,163
	Air Freight & Logistics 0.7%
1,549,400	Aramex PJSC* (United Arab Emirates)		746,658
2,200	Forward Air Corp.		50,930
83,000	Goodpack Ltd. (Singapore)		59,541
			857,129
	Airlines 0.1%
3,200	Allegiant Travel Co.*		121,888
	Alternative Carriers 0.1%
6,800	Neutral Tandem, Inc.*		154,768
	Aluminum 0.2%
386,000	Midas Holdings Ltd. (Singapore)		234,405
	Apparel Retail 0.9%
1,020	Camaieu (France)		246,402
34,600	Esprit Holdings Ltd. (Hong Kong)		232,153
8,900	JOS. A. Bank Clothiers, Inc.*		398,453
18,700	KappAhl Holding AB (Sweden)		133,228
			1,010,236
	Apparel, Accessories & Luxury Goods 4.8%
466,000	Anta Sports Products Ltd. (China)		577,235
4,250	Bijou Brigitte AG (Germany)		762,149
20,800	Billabong International Ltd. (Australia)		220,222
845,000	China Dongxiang Group Co. (China)		560,422
5,900	Fossil, Inc.*		167,855
19,700	Gerry Weber International AG (Germany)		653,888
48,000	Li Ning Co. Ltd. (China)		148,025
17,453	Odd Molly International AB (Sweden)		265,735
464,000	Ports Design Ltd. (China)		1,159,095
154,400	Ted Baker plc (United Kingdom)		1,068,296
5,000	Volcom, Inc.*		82,400
			5,665,322
	Application Software 1.6%
2,500	Aveva Group plc (United Kingdom)		36,714
4,000	Computer Modelling Group Ltd. (Canada)		58,489
3,600	FactSet Research Systems, Inc.		238,464
2,296,000	Kingdee International Software Group Co. Ltd. (China)		388,096
13,704	Longtop Financial Technologies Ltd. ADR* (China)		390,016
2,450	SimCorp A/S (Denmark)		502,586
13,635	Tyler Technologies, Inc.*		233,022
			1,847,387

Shares		Value
	Asset Management & Custody Banks 1.8%
6,000	Artio Global Investors, Inc.*	$	156,900
1,000	Bank of New York Mellon Corp.		28,990
4,000	Diamond Hill Investment Group, Inc.*		231,880
7,700	Eaton Vance Corp.		215,523
41,800	SEI Investments Co.		822,624
692	T. Rowe Price Group, Inc.		31,624
47,109	Treasury Group Ltd. (Australia)		230,682
8,645	Waddell & Reed Financial, Inc., Class A		245,950
4,000	Westwood Holdings Group, Inc.		138,800
			2,102,973
	Auto Parts & Equipment 0.0%
1,235,000	Norstar Founders Group Ltd.* *** (Hong Kong)		29,082
	Automotive Retail 0.6%
50,000	Halfords Group plc (United Kingdom)		281,557
11,500	O’Reilly Automotive, Inc.*		415,610
			697,167
	Biotechnology 0.7%
31,915	Orexigen Therapeutics, Inc.*		314,363
2,311,981	Sino Biopharmaceutical Ltd. (China)		533,989
			848,352
	Communications Equipment 0.9%
16,050	Riverbed Technology, Inc.*		352,458
27,575	Tandberg ASA (Norway)		660,562
			1,013,020
	Computer Storage & Peripherals 0.8%
38,000	Intevac, Inc.*		510,720
185	Wacom Co. Ltd. (Japan)		441,105
			951,825
	Construction & Engineering 0.7%
22,500	Heerim Architects & Planners (Korea)		244,430
37,000	Lycopodium Ltd. (Australia)		89,448
195,000	Rotary Engineering Ltd. (Singapore)		159,274
39,800	SWECO AB (Sweden)		331,576
			824,728
	Construction & Farm Machinery & Heavy Trucks 0.2%
2,800	Faiveley S.A. (France)		240,771
	Construction Materials 0.5%
80,500	Corp Moctezuma S.A.B de C.V. (Mexico)		160,979
52,000	Pretoria Portland Cement Co. Ltd. (South Africa)		234,649
375,000	PT Semen Gresik (Persero) Tbk (Indonesia)		244,439
			640,067
	Consumer Finance 1.1%
66,000	Banco Compartamos S.A. de C.V. (Mexico)		240,991
24,516	Dollar Financial Corp.*		392,746
27,400	First Cash Financial Services, Inc.*		469,362
24,700	United PanAm Financial Corp.*		85,215
5,900	World Acceptance Corp.*		148,739
			1,337,053

47

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments (continued)

Shares		Value
	Data Processing & Outsourced Services 3.5%
53,700	Cia Brasileira de Meios de Pagamentos (Brazil)	$	534,189
20,700	DIBS Payment Services AB* (Sweden)		171,710
10,800	Fidelity National Information Services, Inc.		275,508
5,300	NeuStar, Inc., Class A*		119,780
40,900	Redecard S.A. (Brazil)		630,655
4,050	Syntel, Inc.		193,306
184,950	Wirecard AG (Germany)		2,204,268
			4,129,416
	Department Stores 0.2%
12,400	Lojas Renner S.A. (Brazil)		217,934
	Distributors 0.3%
18,200	LKQ Corp.*		337,428
	Diversified Banks 1.4%
195,039	Allahabad Bank Ltd. (India)		484,506
22,100	Axis Bank Ltd. (India)		452,590
1,030	HDFC Bank Ltd. ADR (India)		121,921
5,300	ICICI Bank Ltd. ADR (India)		204,368
81,800	Union Bank of India Ltd. (India)		407,512
			1,670,897
	Diversified Support Services 0.6%
12,700	Copart, Inc.*		421,767
150	Prestige International, Inc. (Japan)		253,651
			675,418
	Drug Retail 1.1%
58,035	Create SD Holdings Co. Ltd. (Japan)		1,339,120
	Education Services 1.5%
14,400	Apollo Group, Inc., Class A*		1,060,848
5,275	Capella Education Co.*		355,218
12,900	Kroton Educacional S.A.** (Brazil)		115,259
1,150	MegaStudy Co. Ltd. (Korea)		236,686
			1,768,011
	Electrical Components & Equipment 0.6%
6,100	Emerson Electric Co.		244,488
265,000	Wasion Group Holdings Ltd. (China)		231,147
147,000	Zhuzhou CSR Times Electric Co. Ltd., Series H (China)		256,821
			732,456
	Electronic Components 0.4%
12,084	Amphenol Corp., Class A		455,325
	Electronic Equipment & Instruments 0.6%
600	KEYENCE Corp. (Japan)		128,280
27,400	Rotork plc (United Kingdom)		495,474
16,675	Viscom AG* (Germany)		71,779
			695,533
	Electronic Manufacturing Services 0.6%
173,000	Ju Teng International Holdings Ltd. (China)		146,435
17,500	TTM Technologies, Inc.*		200,725
48,000	Venture Corp. Ltd. (Singapore)		306,488
			653,648
	Environmental & Facilities Services 0.1%
8,300	Daiseki Co. Ltd. (Japan)		163,761

Shares		Value
	Food Retail 1.1%
948,000	BreadTalk Group Ltd. (Singapore)	$	350,126
18,600	Daikokutenbussan Co. Ltd. (Japan)		405,339
11,700	Ozeki Co. Ltd. (Japan)		486,468
			1,241,933
	Footwear 0.5%
3,715,000	China Hongxing Sports Ltd. (China)		554,103
	General Merchandise Stores 0.7%
16,200	Dollar Tree, Inc.*		788,616
	Gold 0.1%
10,000	Petropavlovsk plc* (United Kingdom)		144,776
	Health Care Distributors 0.3%
9,300	MWI Veterinary Supply, Inc.*		371,535
	Health Care Equipment 6.0%
21,000	Abaxis, Inc.*		561,750
34,950	Audika (France)		1,084,847
41,800	Cardica, Inc.*		63,118
80,000	Cardica, Inc. PIPE* *** †		106,304
59,100	Cyberonics, Inc.*		942,054
28,400	DiaSorin S.p.A (Italy)		956,383
4,400	Edwards Lifesciences Corp.*		307,604
3,100	IDEXX Laboratories, Inc.*		155,000
6,627,900	LMA International N.V.* (Singapore)		1,035,646
5,150	Nakanishi, Inc. (Japan)		453,517
30,600	Somanetics Corp.*		493,272
4,500	St. Jude Medical, Inc.*		175,545
24,100	STRATEC Biomedical Systems AG (Germany)		750,534
			7,085,574
	Health Care Facilities 1.7%
43,561	AmSurg Corp.*		924,800
67,750	NovaMed, Inc.*		306,907
479,000	Raffles Medical Group Ltd. (Singapore)		462,687
11,200	VCA Antech, Inc.*		301,168
			1,995,562
	Health Care Services 2.0%
8,100	Bio-Reference Laboratories, Inc.*		278,640
8,112	CorVel Corp.*		230,381
12,400	Genoptix, Inc.*		431,272
34,642	Healthways, Inc.*		530,715
14,500	LHC Group, Inc.*		433,985
7,700	MEDNAX, Inc.*		422,884
			2,327,877
	Health Care Supplies 1.5%
76,125	Abcam plc (United Kingdom)		1,058,898
3,800	ICU Medical, Inc.*		140,068
101,500	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		335,275
10,000	Standard Diagnostics, Inc. (Korea)		212,179
			1,746,420
	Health Care Technology 0.2%
29,000	RaySearch Laboratories AB* (Sweden)		107,471
5,535	Vital Images, Inc.*		69,298
			176,769
	Home Entertainment Software 1.0%
145	GameOn Co. Ltd. (Japan)		146,115
30,300	Hudson Soft Co. Ltd. (Japan)		169,891
235,000	Kingsoft Corp. Ltd. (China)		220,747
5,000	Perfect World Co. Ltd., Class B ADR* (China)		240,500
15,440	Shanda Games Ltd. ADR* (China)		180,648
4,200	Shanda Interactive Entertainment Ltd. ADR* (China)		215,040
			1,172,941

48

SEPTEMBER 30, 2009

Shares		Value
	Home Improvement Retail 1.4%
2,350,000	Ace Hardware Indonesia (Indonesia)	$	299,069
22,000	Cashbuild Ltd. (South Africa)		221,537
26,500	Clas Ohlson AB (Sweden)		473,901
14,200	Lumber Liquidators, Inc.*		307,998
67,100	Swedol AB, Class B (Sweden)		318,060
			1,620,565
	Homefurnishing Retail 0.2%
10,000	Aaron’s, Inc.		264,000
	Household Appliances 0.3%
2,500	Rational AG (Germany)		350,261
	Household Products 0.1%
27,000	Kimberly-Clark de Mexico S.A.B de C.V. (Mexico)		112,005
	Human Resource & Employment Services 1.7%
130	Benefit One, Inc. (Japan)		110,422
156,800	Michael Page International plc (United Kingdom)		838,841
34,200	Robert Half International, Inc.		855,684
50,700	Sthree plc (United Kingdom)		209,950
			2,014,897
	Industrial Machinery 2.5%
3,200	Burckhardt Compression Holding AG (Switzerland)		524,919
921,000	China Automation Group Ltd. (China)		472,975
16,145	China Valves Technology, Inc.*		116,890
3,300	Danaher Corp.		222,156
9,905	Duoyuan Global Water, Inc. ADR* (China)		329,836
6,700	Graco, Inc.		186,729
6,000	Illinois Tool Works, Inc.		256,260
5,500	Konecranes Oyj (Finland)		156,869
35,000	ODIM ASA (Norway)		197,028
6,900	technotrans AG* (Germany)		60,515
41,100	Weg S.A. (Brazil)		392,569
			2,916,746
	Insurance Brokers 0.5%
29,000	Brown & Brown, Inc.		555,640
	Internet Retail 0.9%
111,655	ASOS plc* (United Kingdom)		624,818
215	START TODAY Co. Ltd. (Japan)		432,588
			1,057,406
	Internet Software & Services 1.1%
6,500	Daum Communications Corp.* (Korea)		299,003
135	Macromill, Inc. (Japan)		202,402
4,800	NetEase.com, Inc. ADR* (China)		219,264
30,600	Neurones (France)		312,725
6,115	VistaPrint N.V.*		310,336
			1,343,730
	Investment Banking & Brokerage 0.4%
7,300	Charles Schwab Corp. (The)		139,795
95	GCA Savvian Group Corp. (Japan)		119,663
13,100	optionsXpress Holdings, Inc.		226,368
			485,826

Shares		Value
	IT Consulting & Other Services 1.9%
16,075	Alten* (France)	$	431,890
9,000	Cognizant Technology Solutions Corp., Class A*		347,940
15,000	Connecta AB (Sweden)		122,811
830,000	CSE Global Ltd. (Singapore)		468,660
320	Future Architect, Inc. (Japan)		135,548
50,800	HiQ International AB (Sweden)*		215,257
8,700	Infosys Technologies Ltd. ADR (India)		421,863
14,470	Yucheng Technologies Ltd.* (China)		103,750
			2,247,719
	Leisure Products 0.3%
8,700	Pool Corp.		193,314
3,500	Shimano, Inc. (Japan)		151,377
			344,691
	Life Sciences Tools & Services 3.7%
1,020	CMIC Co. Ltd.* (Japan)		281,520
5,100	Covance, Inc.*		276,165
210	EPS Co. Ltd. (Japan)		873,147
28,800	ICON plc ADR* (Ireland)		705,312
103,700	Life Sciences Research, Inc.*		825,452
2,100	MorphoSys AG* (Germany)		52,578
43,200	Pharmaceutical Product Development, Inc.		947,808
2,700	Techne Corp.		168,885
3,300	Waters Corp.*		184,338
			4,315,205
	Managed Health Care 0.4%
9,200	AMERIGROUP Corp.*		203,964
10,800	OdontoPrev S.A. (Brazil)		219,697
			423,661
	Mortgage REITs 0.2%
9,500	Annaly Capital Management, Inc.		172,330
	Multi-Line Insurance 0.3%
13,900	HCC Insurance Holdings, Inc.		380,165
	Oil & Gas Drilling 0.4%
27,000	Cathedral Energy Services Income Trust** (Canada)		99,205
43,000	China Oilfield Services Ltd., Series H (China)		40,226
43,400	Phoenix Technology Income Fund** (Canada)		314,463
			453,894
	Oil & Gas Equipment & Services 1.5%
311,000	Anhui Tianda Oil Pipe Co. Ltd., Class H (China)		111,157
1,071,915	Anton Oilfield Services Group (China)		94,051
900	Core Laboratories N.V.		92,781
12,000	Gulf Island Fabrication, Inc.		224,880
47,800	Lamprell plc (United Arab Emirates)		132,750
24,900	Pason Systems, Inc. (Canada)		289,833
15,000	Petrofac Ltd. (United Kingdom)		236,829
8,000	Schoeller-Bleckmann Oilfield Equipment AG (Austria)		383,842
14,100	TGS-NOPEC Geophysical Co. ASA* (Norway)		211,257
2,000	Wellstream Holdings plc (United Kingdom)		19,506
			1,796,886

49

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments (continued)

Shares		Value
	Oil & Gas Exploration & Production 1.0%
191,000	Afren plc* (United Kingdom)	$	245,068
62,000	Dragon Oil plc* (Ireland)		377,680
41,600	Gran Tierra Energy, Inc.*		173,056
27,500	JKX Oil and Gas plc (United Kingdom)		122,100
6,500	Petrominerales Ltd.* (Canada)		86,841
7,975	Premier Oil plc* (United Kingdom)		154,285
			1,159,030
	Other Diversified Financial Services 0.1%
104,000	Count Financial Ltd. (Australia)		142,227
	Packaged Foods & Meats 0.3%
19,800	Zhongpin, Inc.*		291,456
	Personal Products 0.3%
706,000	Beauty China Holdings Ltd.* *** (Singapore)		5,014
10,105	Natura Cosmeticos S.A. (Brazil)		182,688
5,000	Proctor & Gamble Hygiene and Healthcare Ltd. (India)		149,210
			336,912
	Pharmaceuticals 1.3%
173,000	China Shineway Pharmaceutical Group Ltd. (China)		184,830
6,300	Daewoong Pharmaceutical Co. Ltd. (Korea)		308,517
78,400	Dechra Pharmaceuticals plc (United Kingdom)		536,371
35,000	Egypt International Pharmaceutical Industries Co. (Egypt)		221,056
18,600	Whanin Pharmaceutical Co. Ltd. (Korea)		216,270
			1,467,044
	Property & Casualty Insurance 0.2%
151,525	Beazley Group plc (United Kingdom)		285,873
	Publishing 0.1%
2,600	Morningstar, Inc.*		126,256
	Regional Banks 1.1%
35,800	Boston Private Financial Holdings, Inc.		233,058
8,500	Canadian Western Bank (Canada)		157,746
6,000	City National Corp.		233,580
10,500	First of Long Island Corp. (The)		279,195
135	Seven Bank Ltd. (Japan)		334,076
			1,237,655
	Research & Consulting Services 3.7%
14,375	Bureau Veritas S.A. (France)		811,579
4,484	Campbell Brothers Ltd. (Australia)		117,065
29,400	CRA International, Inc.*		802,326
15,000	Intertek Group plc (United Kingdom)		304,341
80	Nihon M&A Center, Inc. (Japan)		362,947
64,135	Resources Connection, Inc.*		1,094,143
130	SGS S.A. (Switzerland)		174,989
29,000	Stantec, Inc.* (Canada)		726,627
			4,394,017
	Restaurants 0.9%
478,000	Ajisen China Holdings Ltd. (China)		425,572
14,700	Chimney Co. Ltd. (Japan)		254,804
700	Saint Marc Holdings Co. Ltd. (Japan)		22,160
10,800	Tim Hortons, Inc.		305,640
			1,008,176

Shares		Value
	Semiconductor Equipment 0.4%
4,600	Cabot Microelectronics Corp.*	$	160,356
1,300	Disco Corp. (Japan)		86,657
104,747	inTEST Corp.*		32,576
3,400	KLA-Tencor Corp.		121,924
3,500	Tessera Technologies, Inc.*		97,615
			499,128
	Semiconductors 5.8%
20,300	Advanced Analogic Technologies, Inc.*		80,591
11,000	CSR plc (United Kingdom)*		82,502
32,000	ELMOS Semiconductor AG* (Germany)		229,579
7,450	Hittite Microwave Corp.*		274,011
13,100	Linear Technology Corp.		361,953
8,700	Maxim Integrated Products, Inc.		157,818
117,100	Melexis N.V. (Belgium)		1,191,591
61,700	Micrel, Inc.		502,855
26,400	Microchip Technology, Inc.		699,600
2,500	Netlogic Microsystems, Inc.*		112,500
331,099	O2Micro International Ltd. ADR* (China)		1,738,270
63,700	PLX Technology, Inc.*		214,669
8,100	Power Integrations, Inc.		269,973
7,500	Semtech Corp.*		127,575
6,600	Silicon Laboratories, Inc.*		305,976
6,800	Supertex, Inc.*		204,000
129,500	Wolfson Microelectronics plc (United Kingdom)*		286,248
			6,839,711
	Soft Drinks 0.1%
21,700	Coca-Cola Icecek AS (Turkey)		153,538
	Specialized Consumer Services 0.1%
40	Best Bridal, Inc. (Japan)		155,167
	Specialized Finance 1.6%
187,000	Bolsa Mexicana de Valores S.A., Series A* (Mexico)		231,296
6,100	Hong Kong Exchanges & Clearing Ltd. (Hong Kong)		110,586
9,600	IMAREX ASA* (Norway)		83,141
1,500	IntercontinentalExchange, Inc*.		145,785
14,300	MSCI, Inc., Class A*		423,566
8,500	NASDAQ OMX Group, Inc. (The)*		178,925
2,100	NYSE Euronext		60,669
45	Osaka Securities Exchange Co. Ltd. (Japan)		204,660
13,043	Oslo Bors VPS Holding ASA (Norway)		124,256
6,300	Portfolio Recovery Associates, Inc.*		285,579
			1,848,463
	Specialty Chemicals 1.4%
9,870	C. Uyemura & Co. Ltd. (Japan)		491,795
1,485,000	EcoGreen Fine Chemical Group Ltd. (Hong Kong)		354,481
80	Japan Pure Chemical Co. Ltd. (Japan)		278,230
42,600	MEC Co. Ltd. (Japan)		341,902
9,500	TechnoSemiChem Co. Ltd. (Korea)		153,999
			1,620,407
	Specialty Stores 1.2%
59,300	Big 5 Sporting Goods Corp.		895,430
32,140	easyhome Ltd. (Canada)		270,438
15,100	Hibbett Sports, Inc.*		275,273
			1,441,141
	Systems Software 1.0%
33,300	Opnet Technologies, Inc.		363,969
1,190	Simplex Technology, Inc. (Japan)		567,077
7,815	Trend Micro, Inc. (Japan)		291,832
			1,222,878

50

SEPTEMBER 30, 2009

Shares		Value
	Thrifts & Mortgage Finance 0.9%
12,275	Home Capital Group, Inc. (Canada)	$	438,967
4,600	Housing Development Finance Corp. Ltd. (India)		266,748
11,000	LIC Housing Finance Ltd. (India)		176,565
7,300	Washington Federal, Inc.		123,078
			1,005,358
	Trading Companies & Distributors 3.3%
7,800	Fastenal Co.		301,860
53,980	Houston Wire & Cable Co.		596,479
24,000	Indutrade AB (Sweden)		467,976
17,500	MISUMI Group, Inc. (Japan)		366,932
8,800	MSC Industrial Direct Co., Inc, Class A		383,504
48,800	Richelieu Hardware Ltd. (Canada)		888,766
4,080	Thermador Groupe (France)		585,426
2,500	W.W. Grainger, Inc.		223,400
			3,814,343
	Trucking 0.5%
19,500	Knight Transportation, Inc.		327,210
800	Landstar System, Inc.		30,448
4,500	Old Dominion Freight Line, Inc.*		136,935
9,100	Universal Truckload Services, Inc.		150,241
			644,834
	Wireless Telecommunication Services 0.1%
5,400	NII Holdings, Inc.*		161,892
	Total Common Stocks (cost $74,430,172)		100,979,069
	PREFERRED STOCKS 0.7%
	Diversified Banks 0.3%
49,000	Parana Banco S.A. Pfd. (Brazil)		270,335
	Regional Banks 0.4%
103,000	Banco Daycoval S.A. Pfd. (Brazil)		501,231
	Total Preferred Stocks (cost $467,677)		771,566
	WARRANTS 0.0%
	Health Care Equipment 0.0%
40,000	Cardica, Inc., expiring 9/29/14* *** †		5,000
	Total Warrants (cost $5,000)		5,000

Principal Amount		Value
	SHORT-TERM INVESTMENTS 13.6%
	Repurchase Agreement 13.6%
$15,949,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $15,065,000 of United States Treasury Notes 4.00% due 2/15/15; value: $16,273,213; repurchase proceeds: $15,949,004 (cost $15,949,000)	$	15,949,000
	Total Short-Term Investments (cost $15,949,000)		15,949,000
	Total Investments (cost $90,851,849) 100.3%		117,704,635
	Liabilities less Other Assets (0.3)%		(319,586	)
	NET ASSETS 100.0%	$	117,385,049
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Global Opportunities Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	0.8
Austria	0.4
Belgium	1.2
Brazil	3.0
Canada	3.3
China	10.2
Denmark	0.5
Egypt	0.2
Finland	0.2
France	4.0
Germany	5.0
Hong Kong	0.7
India	3.0
Indonesia	0.5
Ireland	1.1
Italy	0.9
Japan	9.9
Korea	1.6
Mexico	0.7
Norway	1.3
Singapore	3.0
South Africa	0.4
Sweden	2.6
Switzerland	0.7
Turkey	0.1
United Arab Emirates	0.9
United Kingdom	6.9
United States	36.9
TOTAL	100.0	%

51

WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 85.1%
	Air Freight & Logistics 1.0%
819,205	Goodpack Ltd. (Singapore)	$	587,661
	Application Software 5.2%
18,045	Adobe Systems, Inc.* †††		596,207
8,795	FactSet Research Systems, Inc.		582,581
46,050	Interactive Intelligence, Inc.*		880,015
2,475,510	Kingdee International Software Group Co. Ltd. (China)		418,438
3,100	SimCorp A/S (Denmark)		635,926
			3,113,167
	Biotechnology 1.1%
2,811,352	Sino Biopharmaceutical Ltd. (China)		649,327
	Communications Equipment 3.6%
24,705	Cisco Systems, Inc.*		581,556
21,145	F5 Networks, Inc.*		837,976
30,540	Tandberg ASA (Norway)		731,589
			2,151,121
	Computer Hardware 1.0%
4,800	International Business Machines Corp.		574,128
	Computer Storage & Peripherals 1.0%
46,405	Intevac, Inc.*		623,683
	Data Processing & Outsourced Services 5.3%
8,270	Alliance Data Systems Corp.*		505,132
25,600	Cia Brasileira de Meios de
	Pagamentos (Brazil)		254,660
25,600	Fidelity National Information Services, Inc.		653,056
38,200	Redecard S.A. (Brazil)		589,022
94,450	Wirecard AG (Germany)		1,125,672
			3,127,542
	Electrical Components & Equipment 1.1%
727,050	Wasion Group Holdings Ltd. (China)		634,171
	Electronic Equipment & Instruments 1.0%
33,900	Rotork plc (United Kingdom)		613,013
	Electronic Manufacturing Services 1.1%
55,055	TTM Technologies, Inc.*		631,481
	Health Care Equipment 7.4%
15,450	Abaxis, Inc.*		413,288
130,414	Cardica, Inc.*		196,925
143,000	Cardica, Inc. PIPE* *** †		190,018
38,000	Cyberonics, Inc.*		605,720
18,705	DiaSorin S.p.A (Italy)		629,899
27,875	Invacare Corp.		621,055
4,235,440	LMA International N.V.* (Singapore)		661,811
11,625	NuVasive, Inc.*		485,460
15,000	St. Jude Medical, Inc.*		585,150
			4,389,326
	Health Care Facilities 2.0%
674,000	Raffles Medical Group Ltd. (Singapore)		651,046
21,000	VCA Antech, Inc.*		564,690
			1,215,736

Shares		Value
	Health Care Services 5.7%
17,325	Bio-Reference Laboratories, Inc.*	$	595,980
20,987	CorVel Corp.*		596,031
7,800	Express Scripts, Inc.*		605,124
38,000	Healthways, Inc.*		582,160
18,865	MEDNAX, Inc.*		1,036,066
			3,415,361
	Health Care Supplies 2.8%
86,158	Abcam plc (United Kingdom)		1,198,457
149,240	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		492,970
			1,691,427
	Health Care Technology 1.9%
7,675	Cerner Corp.*		574,090
151,100	RaySearch Laboratories AB* (Sweden)		559,959
			1,134,049
	Home Entertainment Software 1.0%
11,900	Shanda Interactive Entertainment Ltd. ADR* (China)		609,280
	Industrial Machinery 3.0%
1,318,345	China Automation Group Ltd. (China)		677,030
15,605	Duoyuan Global Water, Inc. ADR* (China)		519,646
62,500	Weg S.A. (Brazil)		596,973
			1,793,649
	Integrated Telecommunication Services 1.0%
37,000	Cbeyond, Inc.*		596,810
	Internet Software & Services 3.5%
47,600	Akamai Technologies, Inc.*		936,768
26,905	DealerTrack Holdings, Inc.*		508,774
1,230	Google, Inc., Class A*		609,895
6,528	Xtera* *** †		2,154
			2,057,591
	IT Consulting & Other Services 4.6%
41,800	Cognizant Technology Solutions Corp., Class A*		1,615,988
13,410	Infosys Technologies Ltd. (India)		642,944
16,015	NCI, Inc., Class A*		458,990
			2,717,922
	Life Sciences Tools & Services 6.4%
10,590	Covance, Inc.*		573,448
141	EPS Co. Ltd. (Japan)		586,256
8,800	Eurofins Scientific (France)		412,949
25,730	ICON plc ADR* (Ireland)		630,128
21,460	MorphoSys AG* (Germany)		537,293
27,000	Pharmaceutical Product Development, Inc.		592,380
7,730	Techne Corp.		483,512
			3,815,966
	Managed Health Care 1.1%
33,495	OdontoPrev S.A. (Brazil)		681,367
	Oil & Gas Equipment & Services 2.3%
55,510	Pason Systems, Inc. (Canada)		646,129
47,750	TGS-NOPEC Geophysical Co. ASA* (Norway)		715,427
			1,361,556

52

SEPTEMBER 30, 2009

Shares		Value
	Pharmaceuticals 3.0%
495,000	China Shineway Pharmaceutical Group Ltd. (China)	$	528,848
89,500	Dechra Pharmaceuticals plc (United Kingdom)		612,312
13,250	Teva Pharmaceutical Industries Ltd. ADR (Israel)		669,920
			1,811,080
	Semiconductor Equipment 0.8%
17,503	Tessera Technologies, Inc.*		488,159
	Semiconductors 13.0%
27,400	Altera Corp.		561,974
13,880	Hittite Microwave Corp.*		510,506
18,140	Linear Technology Corp.		501,208
60,134	Melexis N.V. (Belgium)		611,914
57,815	Micrel, Inc.		471,192
22,525	Microchip Technology, Inc.		596,913
13,731	Netlogic Microsystems, Inc.*		617,895
161,879	O2Micro International Ltd. ADR* (China)		849,865
56,750	Pericom Semiconductor Corp.*		556,718
25,968	Power Integrations, Inc.		865,513
14,505	Silicon Laboratories, Inc.*		672,452
83,420	Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)		914,283
			7,730,433
	Systems Software 4.2%
15,170	BMC Software, Inc.*		569,330
40,900	NetSuite, Inc.*		625,770
79,235	Opnet Technologies, Inc.		866,039
19,675	Oracle Corp.		410,027
			2,471,166
	Total Common Stocks (cost $44,167,613)		50,686,172
	PREFERRED STOCKS 1.6%
	Computer Storage & Peripherals 1.6%
78,502	BlueArc Corp., Series DD Pfd.* *** †		324,998
138,725	BlueArc Corp., Series FF Pfd.* *** †		628,067
			953,065
	Internet Software & Services 0.0%
30,265	Incipient, Inc., Series D Pfd.* *** †		—
	Total Preferred Stocks (cost $1,092,283)		953,065
	EXCHANGE TRADED FUNDS 1.0%
	Asset Management & Custody Banks 1.0%
45,220	Direxionshares Technology Bear 3X Shares		572,033
	Total Exchange Traded Funds (cost $706,130)		572,033
	LIMITED PARTNERSHIP INTEREST 0.6%
	Other 0.6%
	Montagu Newhall Global Partners II-B, L.P.*** †		339,596
	Total Limited Partnership Interest (cost $399,387)		339,596

Shares		Value
	WARRANTS 0.0%
	Computer Storage & Peripherals 0.0%
1	BlueArc Corp. expiring 4/2/18* *** †	$	—
	Health Care Equipment 0.0%
71,500	Cardica, Inc., expiring 9/29/14* *** †		8,937
	Total Warrants (cost $8,937)		8,937
Principal Amount		Value
	SHORT-TERM INVESTMENTS 13.3%
	Repurchase Agreement 13.3%
$7,933,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $8,175,000 of United States Treasury Notes 2.625% due 2/29/16; value: $8,093,250; repurchase proceeds: $7,933,002††† (cost $7,933,000)	$	7,933,000
	Total Short-Term Investments (cost $7,933,000)		7,933,000
	Total Investments (cost $54,307,350) 101.6%		60,492,803
	Liabilities less Other Assets (1.6)%		(952,910	)
	NET ASSETS 100.0%	$	59,539,893
	*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). †††All or a portion of this security has been designated as collateral for future commitments (see Note 10). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. See Notes to Financial Statements.

At September 30, 2009, Wasatch Global Science & Technology Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Belgium	1.2
Brazil	4.0
Canada	1.2
China	10.2
Denmark	1.2
France	0.8
Germany	3.2
India	1.2
Ireland	1.2
Israel	1.3
Italy	1.2
Japan	1.1
Norway	2.8
Singapore	3.6
Sweden	1.1
Taiwan	1.7
United Kingdom	4.6
United States	58.4
TOTAL	100.0	%

53

WASATCH HERITAGE GROWTH FUND (WAHGX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 95.5%
	Aerospace & Defense 5.3%
12,085	L-3 Communications Holdings, Inc.	$	970,667
16,740	Lockheed Martin Corp.		1,307,059
36,085	TransDigm Group, Inc.*		1,797,394
			4,075,120
	Air Freight & Logistics 2.9%
20,760	C.H. Robinson Worldwide, Inc.		1,198,890
28,990	Expeditors International of Washington, Inc.		1,018,999
			2,217,889
	Apparel Retail 0.8%
92,510	Esprit Holdings Ltd. (Hong Kong)		620,708
	Asset Management & Custody Banks 2.4%
39,440	SEI Investments Co.		776,179
24,635	T. Rowe Price Group, Inc.		1,125,820
			1,901,999
	Automotive Retail 0.8%
16,968	O’Reilly Automotive, Inc.*		613,224
	Communications Equipment 3.6%
64,650	Cisco Systems, Inc.*		1,521,861
32,250	F5 Networks, Inc.*		1,278,068
			2,799,929
	Data Processing & Outsourced Services 10.4%
19,540	Alliance Data Systems Corp.*		1,193,503
42,200	Cia Brasileira de Meios de Pagamentos (Brazil)		419,791
61,305	Fidelity National Information Services, Inc.		1,563,891
8,155	Mastercard, Inc., Class A		1,648,533
31,745	Paychex, Inc.		922,192
149,130	Redecard S.A. (Brazil)		2,299,501
			8,047,411
	Diversified Metals & Mining 1.7%
14,330	BHP Billiton plc ADR (United Kingdom)		789,583
2,984	Rio Tinto plc ADR (United Kingdom)		508,145
			1,297,728
	Diversified Support Services 2.8%
64,850	Copart, Inc.*		2,153,669
	Drug Retail 3.0%
64,280	CVS Caremark Corp.		2,297,367
	Education Services 3.7%
39,390	Apollo Group, Inc., Class A*		2,901,861
	Electronic Components 2.6%
53,385	Amphenol Corp., Class A		2,011,547
	Health Care Equipment 3.4%
66,710	St. Jude Medical, Inc.*		2,602,357
	Health Care Services 3.2%
32,345	Express Scripts, Inc.*		2,509,325
	Investment Banking & Brokerage 1.5%
58,676	Charles Schwab Corp. (The)		1,123,646
	IT Consulting & Other Services 4.0%
47,075	Cognizant Technology Solutions Corp., Class A*		1,819,919
27,005	Infosys Technologies Ltd. (India)		1,294,758
			3,114,677

Shares		Value
	Life Sciences Tools & Services 2.5%
35,855	Covance, Inc.*	$	1,941,548
	Mortgage REITs 1.9%
80,929	Annaly Capital Management, Inc.		1,468,052
	Multi-Line Insurance 1.2%
34,220	HCC Insurance Holdings, Inc.		935,917
	Oil & Gas Equipment & Services 1.3%
25,975	Cameron International Corp.*		982,374
	Oil & Gas Exploration & Production 5.2%
55,925	Chesapeake Energy Corp.		1,588,270
57,735	Petrohawk Energy Corp.*		1,397,764
25,043	XTO Energy, Inc.		1,034,777
			4,020,811
	Pharmaceuticals 1.8%
27,120	Teva Pharmaceutical Industries Ltd. ADR (Israel)		1,371,187
	Restaurants 2.1%
56,315	Tim Hortons, Inc.		1,593,714
	Semiconductors 9.2%
133,400	Altera Corp.		2,736,034
53,335	Linear Technology Corp.		1,473,646
56,660	Maxim Integrated Products, Inc.		1,027,812
28,345	Microchip Technology, Inc.		751,143
100,752	Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)		1,104,242
			7,092,877
	Specialized Finance 4.3%
104,300	BM&F BOVESPA S.A. (Brazil)		770,778
10,443	IntercontinentalExchange, Inc.*		1,014,955
51,220	MSCI, Inc., Class A*		1,517,137
			3,302,870
	Specialty Chemicals 1.4%
22,893	Ecolab, Inc.		1,058,343
	Specialty Stores 1.0%
33,680	Staples, Inc.		782,050
	Systems Software 2.7%
55,290	BMC Software, Inc.*		2,075,034
	Thrifts & Mortgage Finance 2.5%
14,600	Housing Development Finance Corp. Ltd.* (India)		846,636
92,890	New York Community Bancorp, Inc.		1,060,804
			1,907,440
	Trading Companies & Distributors 2.5%
29,670	Fastenal Co.		1,148,229
18,265	MSC Industrial Direct Co., Inc, Class A		795,989
			1,944,218
	Trucking 1.1%
26,605	J.B. Hunt Transport Services, Inc.		854,819
	Wireless Telecommunication Services 2.7%
69,790	NII Holdings, Inc.*		2,092,304
	Total Common Stocks (cost $66,824,303)		73,712,015

54

SEPTEMBER 30, 2009

Principal Amount		Value
	SHORT-TERM INVESTMENTS 1.9%
	Repurchase Agreement 1.9%
$1,455,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $1,500,000 of United States Treasury Notes 2.625% due 2/29/16; value: $1,485,000; repurchase proceeds: $1,455,000 (cost $1,455,000)	$	1,455,000
	Total Short-Term Investments (cost $1,455,000)		1,455,000
	Total Investments (cost $68,279,303) 97.4%		75,167,015
	Other Assets less Liabilities 2.6%		2,026,796
	NET ASSETS 100.0%	$	77,193,811
	*Non-income producing. ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Heritage Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Brazil	4.7
Hong Kong	0.8
India	2.9
Israel	1.9
Taiwan	1.5
United Kingdom	1.8
United States	86.4
TOTAL	100.0	%

55

WASATCH HERITAGE VALUE FUND (WAHVX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 86.7%
	Aerospace & Defense 1.9%
1,400	Raytheon Co.	$	67,158
	Agricultural Products 2.0%
116,000	Chaoda Modern Agriculture Holdings Ltd. (China)		70,498
	Apparel, Accessories & Luxury Goods 2.4%
4,400	Gildan Activewear, Inc.* (Canada)		86,768
	Computer & Electronics Retail 2.3%
3,100	GameStop Corp., Class A*		82,057
	Construction & Engineering 1.9%
2,500	Aecom Technology Corp.*		67,850
	Data Processing & Outsourced Services 8.0%
7,500	Cia Brasileira de Meios de Pagamentos (Brazil)		74,607
3,900	Fidelity National Information Services, Inc.		99,489
1,600	Visa, Inc., Class A		110,576
			284,672
	Diversified Support Services 1.9%
2,000	Copart, Inc.*		66,420
	Education Services 2.1%
1,000	Apollo Group, Inc., Class A*		73,670
	Health Care Equipment 3.4%
2,800	Covidien plc		121,128
	Health Care Technology 2.2%
5,000	IMS Health, Inc.		76,750
	Heavy Electrical Equipment 2.6%
4,600	ABB Ltd. ADR* (Switzerland)		92,184
	Home Improvement Retail 2.9%
1,700	Sherwin-Williams Co. (The)		102,272
	Industrial Machinery 2.2%
8,200	Weg S.A. (Brazil)		78,323
	Internet Software & Services 2.2%
3,900	Akamai Technologies, Inc.*		76,752
	Life Sciences Tools & Services 2.1%
3,400	Pharmaceutical Product Development, Inc.		74,596
	Oil & Gas Drilling 5.2%
2,500	Fred Olsen Energy ASA (Norway)		93,274
2,400	Noble Corp.		91,104
			184,378
	Oil & Gas Exploration & Production 2.8%
5,200	ARC Energy Trust** (Canada)		98,205
	Oil & Gas Storage & Transportation 2.9%
5,500	Spectra Energy Corp.		104,170
	Packaged Foods & Meats 2.6%
1,600	Ralcorp Holdings, Inc.*		93,552
	Paper Packaging 3.0%
3,900	Sonoco Products Co.		107,406
	Pharmaceuticals 8.4%
5,200	Mylan, Inc.*		83,252
3,200	Perrigo Co.		108,768
6,400	Pfizer, Inc.		105,920
			297,940

Shares		Value
	Property & Casualty Insurance 5.9%
3,000	Allstate Corp. (The)	$	91,860
9,800	Old Republic International Corp.		119,364
			211,224
	Railroads 2.2%
1,000	Burlington Northern Santa Fe Corp.		79,830
	Specialized Finance 2.8%
4,800	NASDAQ OMX Group, Inc. (The)*		101,040
	Specialty Chemicals 2.7%
5,300	RPM International, Inc.		97,997
	Steel 5.1%
2,500	Allegheny Technologies, Inc.		87,475
2,000	Nucor Corp.		94,020
			181,495
	Water Utilities 3.0%
5,300	American Water Works Co., Inc.		105,682
	Total Common Stocks (cost $2,702,942)		3,084,017
	PREFERRED STOCKS 2.9%
	Regional Banks 2.9%
5,000	Fifth Third Capital Trust VI, 7.25%, 11/15/67 Pfd.* ^^^		102,500
	Total Preferred Stocks (cost $71,300)		102,500
Principal Amount		Value
	SHORT-TERM INVESTMENTS 10.1%
	Repurchase Agreement 10.1%
$360,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $375,000 of United States Treasury Notes 2.625% due 2/29/16; value: $371,250; repurchase proceeds: $360,000 (cost $360,000)	$	360,000
	Total Short-Term Investments (cost $360,000)		360,000
	Total Investments (cost $3,134,242) 99.7%		3,546,517
	Other Assets less Liabilities 0.3%		10,317
	NET ASSETS 100.0%	$	3,556,834
	*Non-income producing. **Common units. ^^^ Variable Rate Securities. ADR American Depositary Receipt. See Notes to Financial Statements.

At September 30, 2009, Wasatch Heritage Value Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Brazil	4.8
Canada	5.8
China	2.2
Norway	2.9
Switzerland	2.9
United States	81.4
TOTAL	100.0	%

56

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 94.7%
	Aerospace & Defense 2.8%
34,900	Chemring Group plc (United Kingdom)	$	1,363,748
141,230	Kongsberg Gruppen ASA (Norway)		1,798,002
81,700	Ultra Electronics Holdings plc (United Kingdom)		1,747,775
			4,909,525
	Agricultural Products 1.6%
2,687,340	Chaoda Modern Agriculture Holdings Ltd. (China)		1,633,199
1,319,280	China Green Holdings Ltd. (China)		1,121,806
			2,755,005
	Aluminum 1.8%
3,500,000	Midas Holdings Ltd. (Singapore)		2,125,430
124,970	National Aluminum Co. Ltd. (India)		904,185
			3,029,615
	Apparel Retail 1.0%
25,054	Point, Inc. (Japan)		1,658,909
	Apparel, Accessories & Luxury Goods 5.6%
1,378,199	Anta Sports Products Ltd. (China)		1,707,177
2,648,515	China Dongxiang Group Co. (China)		1,756,552
543,655	Li Ning Co. Ltd. (China)		1,676,551
1,252,595	Ports Design Ltd. (China)		3,129,043
197,495	Ted Baker plc (United Kingdom)		1,366,472
			9,635,795
	Application Software 2.4%
20,152	SimCorp A/S (Denmark)		4,133,927
	Asset Management & Custody Banks 1.2%
17,390	Partners Group Holding AG (Switzerland)		2,120,998
	Brewers 0.8%
124,400	Anadolu Efes Biracilik ve Malt Sanayii AS (Turkey)		1,358,005
	Coal & Consumable Fuels 0.7%
855,385	Tambang Batubara Bukit Asam Tbk PT (Indonesia)		1,247,897
	Communications Equipment 2.3%
164,475	Tandberg ASA (Norway)		3,940,016
	Construction & Farm Machinery & Heavy Trucks 0.5%
25,904	Demag Cranes AG* (Germany)		930,737
	Construction Materials 3.0%
719,900	Corp Moctezuma S.A.B de C.V. (Mexico)		1,439,613
1,687,000	PT Indocement Tunggal Prakarsa Tbk (Indonesia)		1,850,202
2,919,380	PT Semen Gresik (Persero) Tbk (Indonesia)		1,902,959
			5,192,774
	Data Processing & Outsourced Services 3.1%
454,798	Wirecard AG (Germany)		5,420,366
	Diversified Banks 3.8%
351,670	Allahabad Bank Ltd. (India)		873,601
102,671	Axis Bank Ltd. (India)		2,102,616
398,400	Bank of N.T. Butterfield & Son Ltd. (Bermuda)		1,992,000
47,747	HDFC Bank Ltd. (India)		1,638,217
			6,606,434

Shares		Value
	Diversified Metals & Mining 1.7%
89,345	Hindustan Zinc Ltd. (India)	$	1,535,051
23,320	Inmet Mining Corp. (Canada)		1,307,281
			2,842,332
	Drug Retail 0.5%
37,820	Create SD Holdings Co. Ltd. (Japan)		872,672
	Electrical Components & Equipment 1.2%
2,362,300	Wasion Group Holdings Ltd.* (China)		2,060,522
	Electronic Equipment & Instruments 2.0%
190,214	Rotork plc (United Kingdom)		3,439,636
	Environmental & Facilities Services 1.6%
268,245	Connaught plc (United Kingdom)		1,736,977
55,045	Daiseki Co. Ltd. (Japan)		1,086,051
			2,823,028
	Food Retail 1.0%
42,845	BIM Birlesik Magazalar AS (Turkey)		1,746,713
	Gold 0.7%
85,865	Petropavlovsk plc* (United Kingdom)		1,243,117
	Health Care Equipment 4.3%
163,388	DiaSorin S.p.A (Italy)		5,502,166
59,250	Mindray Medical International Ltd. ADR (China)		1,933,920
			7,436,086
	Health Care Supplies 4.2%
339,280	Abcam plc (United Kingdom)		4,719,380
788,385	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		2,604,197
			7,323,577
	Health Care Technology 0.9%
437,279	RaySearch Laboratories AB* (Sweden)		1,620,506
	Home Entertainment Software 1.1%
35,330	Shanda Interactive Entertainment Ltd. ADR* (China)		1,808,896
	Household Products 0.9%
381,900	Kimberly-Clark de Mexico S.A.B de C.V. (Mexico)		1,584,255
	Industrial Machinery 4.1%
34,690	Andritz AG (Austria)		1,730,970
9,963	Burckhardt Compression Holding AG (Switzerland)		1,634,303
35,325	Konecranes Oyj (Finland)		1,007,527
289,800	Weg S.A. (Brazil)		2,768,043
			7,140,843
	Internet Retail 1.7%
305,520	ASOS plc* (United Kingdom)		1,709,681
610	START TODAY Co. Ltd. (Japan)		1,227,344
			2,937,025
	Internet Software & Services 2.6%
460	Gourmet Navigator, Inc. (Japan)		1,138,335
193,000	Net Entertainment NE AB * (Sweden)		1,864,326
10,415	NHN Corp.* (Korea)		1,533,632
			4,536,293

57

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Schedule of Investments(continued)

Shares		Value
	Life Sciences Tools & Services 2.9%
405	EPS Co. Ltd. (Japan)	$	1,683,926
18,084	Eurofins Scientific (France)		848,610
40,715	ICON plc ADR* (Ireland)		997,110
61,605	MorphoSys AG * (Germany)		1,542,403
			5,072,049
	Oil & Gas Equipment & Services 4.3%
105,195	Pason Systems, Inc. (Canada)		1,224,456
138,125	Petrofac Ltd. (United Kingdom)		2,180,805
37,385	Schoeller-Bleckmann Oilfield Equipment AG (Austria)		1,793,740
154,785	TGS-NOPEC Geophysical Co. ASA* (Norway)		2,319,107
			7,518,108
	Oil & Gas Exploration & Production 3.9%
1,070,075	Afren plc* (United Kingdom)		1,372,988
1,097,845	DNO International ASA* (Norway)		772,236
136,250	Dragon Oil plc (Ireland)		829,982
171,555	Gran Tierra Energy, Inc.*		713,669
250,442	JKX Oil and Gas plc (United Kingdom)		1,111,963
96,149	Premier Oil plc* (United Kingdom)		1,860,105
			6,660,943
	Packaged Foods & Meats 0.5%
24,776	Unicharm PetCare Corp. (Japan)		922,437
	Personal Products 2.5%
218,470	Natura Cosmeticos S.A. (Brazil)		3,949,705
8,300	Oriflame Cosmetics S.A. (Sweden)		425,617
			4,375,322
	Pharmaceuticals 0.8%
201,239	Dechra Pharmaceuticals plc (United Kingdom)		1,376,771
	Regional Banks 1.2%
810	Seven Bank Ltd. (Japan)		2,004,459
	Research & Consulting Services 3.7%
151,651	Campbell Brothers Ltd. (Australia)		3,959,193
386	Nihon M&A Center, Inc. (Japan)		1,751,220
29,305	Stantec, Inc.* (Canada)		734,269
			6,444,682
	Semiconductors 0.7%
122,224	Melexis N.V. (Belgium)		1,243,732
	Specialized Finance 8.3%
544,355	BM&F BOVESPA S.A. (Brazil)		4,022,790
82,950	IMAREX ASA* (Norway)		718,393
1,002,935	Infrastructure Development Finance Co. Ltd. (India)		3,044,978
780	Osaka Securities Exchange Co. Ltd. (Japan)		3,547,431
302,035	Rural Electrification Corp. Ltd. (India)		1,264,522
296,000	Singapore Exchange Ltd. (Singapore)		1,770,177
			14,368,291
	Specialty Chemicals 1.3%
53,855	SGL Carbon SE* (Germany)		2,204,697
	Systems Software 2.1%
204,440	F-Secure Oyj (Finland)		871,053
5,597	Simplex Technology, Inc. (Japan)		2,667,169
			3,538,222
	Thrifts & Mortgage Finance 2.5%
50,555	Home Capital Group, Inc. (Canada)		1,807,899
157,000	LIC Housing Finance Ltd. (India)		2,520,061
			4,327,960

Shares		Value
	Wireless Telecommunication Services 0.9%
38,800	Egyptian Co. for Mobile Services (Egypt)	$	1,557,007
	Total Common Stocks (cost $134,256,008)		163,970,184
	PREFERRED STOCKS 2.1%
	Fertilizers & Agricultural Chemicals 1.1%
177,750	Fertilizantes Fosfatados S.A. Pfd.* (Brazil)		1,840,614
	Regional Banks 1.0%
355,775	Banco Daycoval S.A. Pfd. (Brazil)		1,731,314
	Total Preferred Stocks (cost $3,813,393)		3,571,928
Principal Amount		Value
	SHORT-TERM INVESTMENTS 2.0%
	Repurchase Agreement 2.0%
$3,546,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $3,655,000 of United States Treasury Notes 2.625% due 2/29/16; value: $3,618,450; repurchase proceeds: $3,546,001 (cost $3,546,000)	$	3,546,000
	Total Short-Term Investments (cost $3,546,000)		3,546,000
	Total Investments (cost $141,615,401) 98.8%		171,088,112
	Other Assets less Liabilities 1.2%		2,137,617
	NET ASSETS 100.0%	$	173,225,729
	*Non-income producing. ADR American Depositary Receipt. See Notes to Financial Statements.

58

SEPTEMBER 30, 2009

At September 30, 2009, Wasatch International Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	2.4
Austria	2.1
Belgium	0.7
Bermuda	1.2
Brazil	8.5
Canada	3.0
China	11.6
Denmark	2.5
Egypt	0.9
Finland	1.1
France	0.5
Germany	6.0
India	8.3
Indonesia	3.0
Ireland	1.1
Italy	3.3
Japan	11.1
Korea	0.9
Mexico	1.8
Norway	5.7
Singapore	2.4
Sweden	2.3
Switzerland	2.2
Turkey	1.9
United Kingdom	15.1
United States	0.4
TOTAL	100.0	%

59

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 82.8%
	Advertising 0.3%
6,805	1000mercis* (France)	$	273,997
	Aerospace & Defense 0.5%
12,400	Chemring Group plc (United Kingdom)		484,541
	Agricultural Products 1.4%
920,000	Chaoda Modern Agriculture Holdings Ltd. (China)		559,119
874,430	China Green Holdings Ltd. (China)		743,543
			1,302,662
	Air Freight & Logistics 2.6%
3,248,806	Aramex PJSC * (United Arab Emirates)		1,565,605
1,135,183	Goodpack Ltd. (Singapore)		814,329
			2,379,934
	Aluminum 1.5%
2,231,960	Midas Holdings Ltd. (Singapore)		1,355,393
	Apparel, Accessories & Luxury Goods 5.5%
648,836	Anta Sports Products Ltd. (China)		803,714
2,805	Bijou Brigitte AG (Germany)		503,018
550,000	China Dongxiang Group Co. (China)		364,772
15,110	Gerry Weber International AG (Germany)		501,535
20,000	LG Fashion Corp. (Korea)		452,366
470,000	Lilang China Co. Ltd.* (Hong Kong)		225,599
12,704	Odd Molly International AB (Sweden)		193,428
488,503	Ports Design Ltd. (China)		1,220,304
124,865	Ted Baker plc (United Kingdom)		863,943
			5,128,679
	Application Software 3.4%
29,040	Computer Modelling Group Ltd. (Canada)		424,631
3,321,000	Kingdee International Software Group Co. Ltd. (China)		561,353
10,955	Longtop Financial Technologies Ltd. ADR* (China)		311,779
9,000	SimCorp A/S (Denmark)		1,846,236
			3,143,999
	Asset Management & Custody Banks 0.3%
50,314	Treasury Group Ltd. (Australia)		246,376
	Auto Parts & Equipment 0.1%
2,500,000	Norstar Founders Group Ltd. * *** (Hong Kong)		58,871
	Biotechnology 1.2%
4,765,960	Sino Biopharmaceutical Ltd. (China)		1,100,776
	Communications Equipment 2.1%
387,000	Sepura Ltd. (United Kingdom)		295,455
71,165	Tandberg ASA (Norway)		1,704,765
			2,000,220
	Construction & Engineering 3.1%
62,100	Aecon Group, Inc. (Canada)		683,355
45,300	Heerim Architects & Planners (Korea)		492,120
174,300	Lycopodium Ltd. (Australia)		421,371
20,820	Outotec Oyj (Finland)		662,714
772,000	Rotary Engineering Ltd. (Singapore)		630,562
			2,890,122
	Construction & Farm Machinery & Heavy Trucks 0.4%
4,380	Faiveley S.A. (France)		376,634

Shares		Value
	Construction Materials 0.0%
2,973	Ceramic Industries Ltd. (South Africa)	$	38,545
	Consumer Finance 0.9%
235,235	Banco Compartamos S.A. de C.V. (Mexico)		858,932
	Data Processing & Outsourced Services 2.9%
229,790	Wirecard AG (Germany)		2,738,679
	Diversified Banks 1.2%
370,294	Allahabad Bank Ltd. (India)		919,865
25,000	Corporation Bank (India)		219,884
			1,139,749
	Drug Retail 0.7%
26,465	Create SD Holdings Co. Ltd. (Japan)		610,663
	Education Services 0.9%
60,000	China Education Alliance, Inc.*		316,200
59,470	Kroton Educacional S.A. ** (Brazil)		531,352
1,040,150	Oriental Century Ltd. * *** (China)		7,387
			854,939
	Electrical Components & Equipment 3.7%
41,820	Harbin Electric, Inc.*		705,922
25,000	Voltamp Transformers Ltd. (India)		432,232
1,097,157	Wasion Group Holdings Ltd. (China)		956,998
777,000	Zhuzhou CSR Times Electric Co. Ltd., Series H (China)		1,357,485
			3,452,637
	Electronic Equipment & Instruments 0.2%
10,500	Smartrac N.V. * (Netherlands)		188,326
	Electronic Manufacturing Services 0.3%
346,000	Ju Teng International Holdings Ltd. (China)		292,870
	Environmental & Facilities Services 0.4%
20,025	Daiseki Co. Ltd. (Japan)		395,098
	Food Retail 1.7%
1,496,397	BreadTalk Group Ltd. (Singapore)		552,666
24,065	Daikokutenbussan Co. Ltd. (Japan)		524,435
12,000	Ozeki Co. Ltd. (Japan)		498,941
			1,576,042
	Footwear 2.1%
9,726,395	China Hongxing Sports Ltd. (China)		1,450,721
673,000	Daphne International Holdings Ltd. (Hong Kong)		487,162
			1,937,883
	Health Care Equipment 3.0%
5,729	Audika (France)		177,828
39,671	DiaSorin S.p.A (Italy)		1,335,939
8,762	Infopia Co. Ltd. (Korea)		89,237
1,546,660	LMA International N.V.* (Singapore)		241,674
13,280	Mindray Medical International Ltd. ADR (China)		433,459
2,900	Nakanishi, Inc. (Japan)		255,379
8,090	STRATEC Biomedical Systems AG (Germany)		251,943
			2,785,459
	Health Care Facilities 1.3%
1,298,670	Raffles Medical Group Ltd. (Singapore)		1,254,442

60

SEPTEMBER 30, 2009

Shares		Value
	Health Care Supplies 1.4%
79,620	Abcam plc (United Kingdom)	$	1,107,513
62,000	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		204,799
			1,312,312
	Health Care Technology 1.0%
253,230	RaySearch Laboratories AB* (Sweden)		938,441
	Home Entertainment Software 1.9%
205	GameOn Co. Ltd. (Japan)		206,577
29,540	Hudson Soft Co. Ltd. (Japan)		165,629
683,000	Kingsoft Corp. Ltd. (China)		641,575
9,555	Perfect World Co. Ltd., Class B * ADR (China)		459,596
25,120	Shanda Games Ltd.* ADR (China)		293,904
			1,767,281
	Industrial Gases 0.2%
74,950	African Oxygen Ltd. (South Africa)		204,523
	Industrial Machinery 3.7%
5,955	Burckhardt Compression Holding AG (Switzerland)		976,842
3,642,845	China Automation Group Ltd. (China)		1,870,765
25,835	China Valves Technology, Inc.*		187,045
6,135	Duoyuan Global Water, Inc. ADR* (China)		204,296
3,500	Taewoong Co. Ltd. (Korea)		224,867
			3,463,815
	Internet Retail 1.9%
194,825	ASOS plc* (United Kingdom)		1,090,235
331	START TODAY Co. Ltd. (Japan)		665,985
			1,756,220
	Internet Software & Services 1.0%
14,700	Daum Communications Corp.* (Korea)		676,206
290,500	Vendtek Systems, Inc.* *** (Canada)		209,130
			885,336
	Investment Banking & Brokerage 0.2%
173	GCA Savvian Group Corp. (Japan)		217,913
	IT Consulting & Other Services 1.5%
5,900	Alten* (France)		158,516
104,500	China Information Security Technology, Inc.*		578,930
350,000	CSE Global Ltd. (Singapore)		197,628
565	Future Architect, Inc. (Japan)		239,327
38,835	Yucheng Technologies Ltd.* (China)		278,447
			1,452,848
	Life Sciences Tools & Services 3.1%
2,034	CMIC Co. Ltd. * (Japan)		561,385
197	EPS Co. Ltd. (Japan)		819,095
7,600	Eurofins Scientific (France)		356,637
18,965	ICON plc ADR* (Ireland)		464,453
28,720	MorphoSys AG* (Germany)		719,062
			2,920,632
	Managed Health Care 0.5%
25,200	OdontoPrev S.A. (Brazil)		512,627
	Oil & Gas Drilling 0.5%
70,660	Phoenix Technology Income Fund* ** (Canada)		511,981
	Oil & Gas Equipment & Services 2.3%
1,750,750	Anton Oilfield Services Group (China)		153,613
306,885	Ezra Holdings Ltd.* (Singapore)		409,776
141,425	Lamprell plc (United Arab Emirates)		392,766
76,210	Pason Systems, Inc. (Canada)		887,074
75,000	Total Energy Services, Inc. (Canada)		340,080
			2,183,309

Shares		Value
	Oil & Gas Exploration & Production 3.8%
405,180	Afren plc* (United Kingdom)	$	519,877
163,930	Dragon Oil plc* (Ireland)		998,598
112,972	Gran Tierra Energy, Inc.*		469,964
42,000	Ithaca Energy, Inc.* (Canada)		29,843
97,125	JKX Oil and Gas plc (United Kingdom)		431,235
53,695	Petrominerales Ltd.* (Canada)		717,372
21,530	Premier Oil plc* (United Kingdom)		416,521
			3,583,410
	Packaged Foods & Meats 0.9%
60,000	Zhongpin, Inc.*		883,200
	Personal Products 0.6%
1,200,000	Beauty China Holdings Ltd. * *** (Singapore)		8,523
17,205	Proctor & Gamble Hygiene and Healthcare Ltd. (India)		513,432
			521,955
	Pharmaceuticals 1.9%
206,000	China Shineway Pharmaceutical Group Ltd. (China)		220,086
11,000	CKD Bio Corp. (Korea)		157,777
6,560	Daewoong Pharmaceutical Co. Ltd. (Korea)		321,249
64,619	Dechra Pharmaceuticals plc (United Kingdom)		442,089
506,600	Genomma Lab Internacional S.A.* (Mexico)		672,002
			1,813,203
	Property & Casualty Insurance 0.5%
263,730	Beazley Group plc (United Kingdom)		497,564
	Regional Banks 0.6%
31,590	Canadian Western Bank (Canada)		586,258
	Research & Consulting Services 0.7%
140	Nihon M&A Center, Inc. (Japan)		635,158
	Restaurants 1.9%
691,000	Ajisen China Holdings Ltd. (China)		615,209
13,000	Chimney Co. Ltd. (Japan)		225,337
581,950	FU JI Food & Catering Services Holdings Ltd.* *** (China)		288,623
200,000	KFC Holdings (Malaysia) Berhad (Malaysia)		439,180
7,300	Saint Marc Holdings Co. Ltd. (Japan)		231,100
			1,799,449
	Semiconductors 1.5%
75,145	Melexis N.V. (Belgium)		764,664
128,497	O2Micro International Ltd. ADR* (China)		674,609
			1,439,273
	Specialized Finance 3.1%
518,600	Bolsa Mexicana de Valores S.A., Series A (Mexico) *		641,444
62,880	IMAREX ASA* (Norway)		544,576
30,000	JSE Ltd. (South Africa)		247,587
251	Osaka Securities Exchange Co. Ltd. (Japan)		1,141,545
32,625	Oslo Bors VPS Holding ASA (Norway)		310,806
			2,885,958
	Specialty Chemicals 0.8%
9,575	C. Uyemura & Co. Ltd. (Japan)		477,096
1,150,000	EcoGreen Fine Chemical Group Ltd. (Hong Kong)		274,514
			751,610

61

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Schedule of Investments(continued)

Shares		Value
	Specialty Stores 1.1%
14,500	Dufry South America Ltd. (Brazil)	$	245,653
69,735	easyhome Ltd. (Canada)		586,775
1,000,000	Water Oasis Group Ltd. (Hong Kong)		232,257
			1,064,685
	Systems Software 2.1%
786,573	GuestLogix, Inc.* (Canada)		676,559
2,629	Simplex Technology, Inc. (Japan)		1,252,812
			1,929,371
	Technology Distributors 0.4%
3,009,300	Inspur International Ltd. (China)		396,060
	Thrifts & Mortgage Finance 1.5%
40,130	Home Capital Group, Inc. (Canada)		1,435,090
	Trading Companies & Distributors 0.5%
12,025	Richelieu Hardware Ltd. (Canada)		219,004
1,970	Thermador Groupe (France)		282,669
			501,673
	Total Common Stocks (cost $58,579,472)		77,717,623
	PREFERRED STOCKS 1.3%
	Diversified Banks 0.3%
48,300	Parana Banco S.A. Pfd. (Brazil)		266,473
	Regional Banks 1.0%
199,510	Banco Daycoval S.A. Pfd. (Brazil)		970,879
	Total Preferred Stocks (cost $836,656)		1,237,352
	EXCHANGE TRADED FUNDS 3.4%
	Asset Management & Custody Banks 3.4%
83,025	iShares MSCI Emerging Markets Index Fund* (China)		3,230,503
	Total Exchange Traded Funds (cost $1,803,303)		3,230,503

Principal Amount		Value
	SHORT-TERM INVESTMENTS 13.1%
	Short Term Investments 13.1%
$12,273,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $12,645,000 of United States Treasury Notes 2.625% due 2/29/16; value: $12,518,550; repurchase proceeds: $12,273,003 (cost $12,273,000)	$	12,273,000
	Total Short-Term Investments (cost $12,273,000)		12,273,000
	Total Investments (cost $73,492,431) 100.6%		94,458,478
	Liabilities less Other Assets (0.6)%		(602,524	)
	NET ASSETS 100.0%	$	93,855,954
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). ADR American Depositary Receipt. See Notes to Financial Statements.

At September 30, 2009, Wasatch International Opportunities Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	0.8
Belgium	0.9
Brazil	3.1
Canada	8.9
China	24.0
Denmark	2.3
Finland	0.8
France	2.0
Germany	5.7
Hong Kong	1.6
India	2.5
Ireland	1.8
Italy	1.6
Japan	11.1
Korea	2.9
Malaysia	0.5
Mexico	2.7
Netherlands	0.2
Norway	3.1
Singapore	6.6
South Africa	0.6
Sweden	1.4
Switzerland	1.2
United Arab Emirates	2.4
United Kingdom	7.5
United States	3.8
TOTAL	100.0	%

62

WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 94.1%
	Air Freight & Logistics 0.9%
3,501,725	Goodpack Ltd. (Singapore)	$	2,511,980
	Apparel Retail 0.8%
128,468	Zumiez, Inc.*		2,108,160
	Apparel, Accessories & Luxury Goods 2.8%
1,773,285	Ports Design Ltd. (China)		4,429,752
188,192	Volcom, Inc.*		3,101,404
			7,531,156
	Application Software 3.3%
223,065	Interactive Intelligence, Inc.*		4,262,772
202,865	Tyler Technologies, Inc.*		3,466,963
47,030	Ultimate Software Group, Inc.*		1,350,702
			9,080,437
	Asset Management & Custody Banks 4.6%
67,702	Diamond Hill Investment Group, Inc.*		3,924,685
889,022	Treasury Group Ltd. (Australia)		4,353,333
122,961	Westwood Holdings Group, Inc.		4,266,747
			12,544,765
	Automotive Retail 1.1%
97,725	Monro Muffler Brake, Inc.		3,106,678
	Biotechnology 0.2%
64,330	Orexigen Therapeutics, Inc.*		633,650
	Computer Storage & Peripherals 1.3%
268,340	Intevac, Inc.*		3,606,490
	Construction & Engineering 0.5%
64,360	Orion Marine Group, Inc.*		1,321,954
	Consumer Finance 3.9%
382,116	Dollar Financial Corp.*		6,121,498
542,750	United PanAm Financial Corp.*		1,872,488
106,325	World Acceptance Corp.*		2,680,453
			10,674,439
	Education Services 1.7%
42,735	Capella Education Co.*		2,877,775
201,547	Kroton Educacional S.A. ** (Brazil)		1,800,779
			4,678,554
	Electronic Manufacturing Services 1.0%
239,675	TTM Technologies, Inc.*		2,749,072
	Environmental & Facilities Services 1.9%
131,530	American Ecology Corp.		2,459,611
158,145	Team, Inc.*		2,680,558
			5,140,169
	Footwear 1.0%
18,602,545	China Hongxing Sports Ltd. (China)		2,774,626
	Health Care Distributors 1.4%
91,961	MWI Veterinary Supply, Inc.*		3,673,842
	Health Care Equipment 5.3%
141,400	Abaxis, Inc.*		3,782,450
476,001	Cardica, Inc.*		718,761
645,000	Cardica, Inc. PIPE* *** †		857,076
161,302	Cardiovascular Systems, Inc.*		1,172,666
121,700	Invacare Corp.		2,711,476
24,315,170	LMA International N.V.* (Singapore)		3,799,380
34,625	NuVasive, Inc.*		1,445,940
			14,487,749

Shares		Value
	Health Care Facilities 2.2%
124,406	AmSurg Corp.*	$	2,641,139
722,700	NovaMed, Inc.*		3,273,831
			5,914,970
	Health Care Services 7.4%
308,275	American Caresource Holding, Inc.*		1,347,162
113,601	Bio-Reference Laboratories, Inc.*		3,907,874
441,705	Clarient, Inc.*		1,859,578
163,182	CorVel Corp.*		4,634,369
254,305	Healthways, Inc.*		3,895,953
41,950	IPC The Hospitalist Co. Inc.*		1,319,327
102,755	LHC Group, Inc.*		3,075,457
			20,039,720
	Health Care Supplies 2.5%
408,857	Abcam plc (United Kingdom)		5,687,195
34,566	Neogen Corp.*		1,116,136
			6,803,331
	Health Care Technology 1.2%
38,605	Computer Programs & Systems, Inc.		1,598,633
471,045	RaySearch Laboratories AB* (Sweden)		1,745,639
			3,344,272
	Household Products 0.3%
45,875	Orchids Paper Products Co.*		917,500
	Internet Software & Services 2.7%
120,790	Constant Contact, Inc.*		2,325,207
188,690	DealerTrack Holdings, Inc.*		3,568,128
27,361	VistaPrint N.V.*		1,388,571
			7,281,906
	IT Consulting & Other Services 1.0%
92,895	NCI, Inc., Class A*		2,662,371
	Life Sciences Tools & Services 3.2%
197,444	ICON plc ADR* (Ireland)		4,835,404
84,093	Kendle International, Inc.*		1,406,035
194,670	Life Sciences Research, Inc.*		1,549,573
115,275	MEDTOX Scientific, Inc.*		1,049,002
			8,840,014
	Marine Ports & Services 0.9%
325,422	CAI International, Inc.*		2,398,360
	Mortgage REITs 2.0%
343,540	MFA Financial, Inc.		2,734,578
168,247	Redwood Trust, Inc.		2,607,829
			5,342,407
	Oil & Gas Equipment & Services 1.1%
252,800	Pason Systems, Inc. (Canada)		2,942,558
	Oil & Gas Exploration & Production 1.7%
201,651	Approach Resources, Inc.*		1,830,991
138,310	GMX Resources, Inc.*		2,172,850
1,030,430	Ithaca Energy, Inc.* † (Canada)		732,168
26,150	Ithaca Energy, Inc.* (Canada)		18,581
			4,754,590
	Pharmaceuticals 0.2%
326,809	Alexza Pharmaceuticals, Inc. PIPE* *** †		676,495
	Property & Casualty Insurance 1.0%
246,765	Seabright Insurance Holdings, Inc.*		2,818,056
	Regional Banks 2.2%
295,505	Boston Private Financial Holdings, Inc.		1,923,737
133,114	Commonwealth Bankshares, Inc.		694,855
161,300	Nara Bancorp, Inc.		1,121,035

63

WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments(continued) SEPTEMBER 30, 2009

Shares		Value
154,363	Tamalpais Bancorp	$	217,652
116,440	Washington Trust Bancorp PIPE* †		2,040,029
			5,997,308
	Research & Consulting Services 4.3%
95,620	CRA International, Inc.*		2,609,470
377,865	Resources Connection, Inc.*		6,446,377
108,025	Stantec, Inc.* (Canada)		2,711,427
			11,767,274
	Restaurants 1.2%
116,175	Peet’s Coffee & Tea, Inc.*		3,279,620
	Semiconductor Equipment 0.6%
59,960	Tessera Technologies, Inc.*		1,672,285
	Semiconductors 12.4%
265,807	Melexis N.V. (Belgium)		2,704,811
611,815	Micrel, Inc.		4,986,292
555,194	Microtune, Inc.*		1,010,453
57,696	Netlogic Microsystems, Inc.*		2,596,320
1,305,427	O2Micro International Ltd. ADR* (China)		6,853,492
642,973	Pericom Semiconductor Corp.*		6,307,565
197,428	Power Integrations, Inc.		6,580,275
87,470	Supertex, Inc.*		2,624,100
			33,663,308
	Specialized Finance 1.6%
154,000	Goldwater Bank, N.A.* *** †		1,111,880
735	Osaka Securities Exchange Co. Ltd. (Japan)		3,342,771
			4,454,651
	Specialty Chemicals 0.9%
696,205	Neo Material Technologies, Inc.* (Canada)		2,492,956
	Specialty Stores 4.4%
377,420	Big 5 Sporting Goods Corp.		5,699,042
197,015	easyhome Ltd. (Canada)		1,657,755
247,377	Hibbett Sports, Inc.*		4,509,683
			11,866,480
	Systems Software 2.4%
89,560	ArcSight, Inc.*		2,155,709
395,405	Opnet Technologies, Inc.		4,321,777
			6,477,486
	Thrifts & Mortgage Finance 2.1%
112,730	Home Capital Group, Inc. (Canada)		4,031,341
167,403	Encore Bancshares, Inc.*		1,504,953
			5,536,294
	Trading Companies & Distributors 0.9%
220,363	Rush Enterprises, Inc., Class B*		2,399,753
	Trucking 2.0%
65,890	Old Dominion Freight Line, Inc.*		2,005,033
389,918	Vitran Corp., Inc.*		3,517,060
			5,522,093
	Total Common Stocks (cost $265,673,721)		256,489,779
	PREFERRED STOCKS 1.2%
	Regional Banks 1.2%
638,700	Banco Daycoval S.A. Pfd. (Brazil)		3,108,117
	Total Preferred Stocks (cost $2,446,922)		3,108,117

Shares		Value
	WARRANTS 0.0%
	Health Care Distributors 0.0%
25,946	Familymeds Group, Inc. expiring 11/30/09* *** †	$	—
	Health Care Equipment 0.0%
121,124	Cardica, Inc. expiring 6/7/12* *** †		—
322,500	Cardica, Inc., expiring 9/29/14* *** †		40,312
			40,312
	Pharmaceuticals 0.0%
294,128	Alexza Pharmaceuticals, Inc. expiring 10/5/16* *** †		36,766
	Total Warrants (cost $96,458)		77,078
Principal Amount		Value
	SHORT-TERM INVESTMENTS 5.3%
	Repurchase Agreement 5.3%
$14,428,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $14,870,000 of United States Treasury Notes 2.625% due 2/29/16; value: $14,721,300; repurchase proceeds: $14,428,004 (cost $14,428,000)	$	14,428,000
	Total Short-Term Investments (cost $14,428,000)		14,428,000
	Total Investments (cost $282,645,101) 100.6%		274,102,974
	Liabilities less Other Assets (0.6)%		(1,565,596	)
	NET ASSETS 100.0%	$	272,537,378
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Micro Cap Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	1.7
Belgium	1.0
Brazil	1.9
Canada	5.6
China	5.4
Ireland	1.9
Japan	1.3
Singapore	2.4
Sweden	0.7
United Kingdom	2.2
United States	75.9
TOTAL	100.0	%

64

WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 87.1%
	Air Freight & Logistics 1.2%
90,000	Transat A.T., Inc. (Canada)	$	1,421,185
	Apparel, Accessories & Luxury Goods 0.8%
42,000	LG Fashion Corp. (Korea)		949,968
	Application Software 3.4%
22,000	Ebix, Inc.*		1,217,920
57,000	JDA Software Group, Inc.*		1,250,580
7,000	SimCorp A/S (Denmark)		1,435,961
			3,904,461
	Asset Management & Custody Banks 1.1%
250,000	Treasury Group Ltd. (Australia)		1,224,192
	Auto Parts & Equipment 0.6%
110,000	Martinrea International, Inc.* (Canada)		741,492
	Biotechnology 2.7%
202,000	Dyadic International, Inc.*		242,400
391,263	Luna Innovations, Inc.*		841,216
85,000	NeurogesX, Inc. PIPE* †		680,000
5,800,000	Sino Biopharmaceutical Ltd. (China)		1,339,604
			3,103,220
	Computer Storage & Peripherals 1.2%
106,000	Intevac, Inc.*		1,424,640
	Construction & Engineering 1.1%
35,000	Michael Baker Corp.		1,271,900
	Construction & Farm Machinery & Heavy Trucks 0.9%
80,000	Titan Machinery, Inc.*		1,001,600
	Construction Materials 0.9%
280,000	Headwaters, Inc.*		1,083,600
	Consumer Finance 0.5%
25,000	World Acceptance Corp.*		630,250
	Data Processing & Outsourced Services 2.3%
200,000	Online Resources Corp.*		1,234,000
120,000	Wirecard AG (Germany)		1,430,182
			2,664,182
	Department Stores 0.9%
15,519,000	PT Ramayana Lestari Sentosa Tbk (Indonesia)		1,043,699
	Distributors 0.8%
34,000	Delticom AG (Germany)		969,238
	Diversified Banks 0.2%
55,556	Idaho Trust Bancorp* *** †		246,113
	Diversified Capital Markets 0.8%
90,000	JMP Group, Inc.		869,400
	Diversified Support Services 0.9%
57,000	Healthcare Services Group, Inc.		1,046,520
	Education Services 1.8%
70,500	AcadeMedia AB* (Sweden)		967,085
200,000	China Education Alliance, Inc.*		1,054,000
			2,021,085
	Electrical Components & Equipment 1.0%
1,370,925	Wasion Group Holdings Ltd. (China)		1,195,793

Shares		Value
	Electronic Manufacturing Services 1.1%
150,000	Sanmina-SCI Corp.*	$	1,290,000
	Environmental & Facilities Services 2.1%
113,000	EnergySolutions, Inc.		1,041,860
105,000	Heritage-Crystal Clean, Inc.*		1,338,750
			2,380,610
	Footwear 0.7%
5,400,000	China Hongxing Sports Ltd. (China)		805,426
	Gas Utilities 0.9%
300,000	Indraprastha Gas Ltd.* (India)		1,018,397
	General Merchandise Stores 1.0%
61,000	Duckwall-ALCO Stores, Inc.*		1,094,950
	Health Care Distributors 1.4%
300,000	Animal Health International, Inc.*		636,000
24,000	MWI Veterinary Supply, Inc.*		958,800
			1,594,800
	Health Care Equipment 5.3%
170,000	AtriCure, Inc.*		802,400
103,865	Cardica, Inc.*		156,836
221,000	Cardica, Inc. PIPE* *** †		293,665
115,000	Cardiovascular Systems, Inc.*		836,050
55,000	Hill-Rom Holdings, Inc.		1,197,900
30,000	Invacare Corp.		668,400
400,000	Solta Medical, Inc.*		908,000
58,000	Zoll Medical Corp.*		1,248,160
			6,111,411
	Health Care Services 4.8%
44,000	Almost Family, Inc.*		1,309,000
25,000	Bio-Reference Laboratories, Inc.*		860,000
200,000	Health Grades, Inc.*		990,000
64,000	Healthways, Inc.*		980,480
45,000	LHC Group, Inc.*		1,346,850
			5,486,330
	Health Care Supplies 0.7%
144,000	MTS Medication Technologies, Inc.*		823,680
	Health Care Technology 0.8%
440,000	iCAD, Inc.*		946,000
	Home Entertainment Software 0.7%
900,000	Kingsoft Corp. Ltd. (China)		845,414
	Home Improvement Retail 1.0%
9,000,000	Ace Hardware Indonesia (Indonesia)		1,145,370
	Industrial Machinery 3.5%
5,000	Burckhardt Compression Holding AG (Switzerland)		820,186
73,820	China Valves Technology, Inc.*		534,457
24,000	Duoyuan Global Water, Inc. ADR* (China)		799,200
80,000	Gencor Industries, Inc.*		694,400
66,000	Hurco Cos. Inc.*		1,127,280
			3,975,523
	Integrated Telecommunication Services 0.6%
41,000	Cbeyond, Inc.*		661,330
	Internet Software & Services 2.0%
105,000	InfoSpace, Inc.*		812,700
185,000	United Online, Inc.		1,487,400
			2,300,100

65

WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments (continued)

Shares		Value
	Investment Banking & Brokerage 1.8%
68,000	Duff & Phelps Corp., Class A	$	1,302,880
105,000	GFI Group, Inc.		759,150
			2,062,030
	IT Consulting & Other Services 3.3%
240,000	China Information Security Technology, Inc.*		1,329,600
300,000	Matrikon, Inc. (Canada)		723,635
50,000	Telvent GIT S.A. (Spain)		1,449,000
43,215	Yucheng Technologies Ltd.* (China)		309,852
			3,812,087
	Life & Health Insurance 0.8%
30,000	Kansas City Life Insurance Co.		934,200
	Marine 0.8%
209,000	Euroseas Ltd. (Greece)		898,700
	Oil & Gas Equipment & Services 1.6%
500,000	Boots & Coots, Inc.*		805,000
110,000	TETRA Technologies, Inc.*		1,065,900
			1,870,900
	Oil & Gas Exploration & Production 2.1%
82,000	GMX Resources, Inc.*		1,288,220
265,000	Gran Tierra Energy, Inc.*		1,102,400
			2,390,620
	Packaged Foods & Meats 0.9%
70,000	Zhongpin, Inc.*		1,030,400
	Paper Products 0.7%
250,000	Verso Paper Corp.		747,500
	Personal Products 0.9%
150,000	Prestige Brands Holdings, Inc.*		1,056,000
	Pharmaceuticals 1.6%
800,000	China Shineway Pharmaceutical Group Ltd. (China)		854,704
20,000	Daewoong Pharmaceutical Co. Ltd. (Korea)		979,419
			1,834,123
	Property & Casualty Insurance 1.1%
111,000	Seabright Insurance Holdings, Inc.*		1,267,620
	Regional Banks 3.3%
1,900,000	City Union Bank Ltd. (India)		1,216,506
52,000	Columbia Banking System, Inc.		860,600
220,653	First Bank of Delaware*		330,979
25,000	First of Long Island Corp. (The)		664,750
53,000	Southwest Bancorp, Inc.		744,120
			3,816,955
	Research & Consulting Services 1.7%
42,000	CRA International, Inc.*		1,146,180
46,000	Resources Connection, Inc.*		784,760
			1,930,940
	Residential REITs 1.0%
195,000	Education Realty Trust, Inc.		1,156,350
	Restaurants 1.5%
1,300,000	Ajisen China Holdings Ltd. (China)		1,157,412
170,000	Brazil Fast Food Corp.*		610,300
			1,767,712
	Semiconductors 0.6%
350,000	Microtune, Inc.*		637,000

Shares		Value
	Specialized Finance 1.8%
860,000	Bolsa Mexicana de Valores S.A.,
	Series A (Mexico)*	$	1,063,714
41,900	Goldwater Bank, N.A.* *** †		302,518
84,000	IMAREX ASA (Norway)*		727,487
			2,093,719
	Specialty Chemicals 0.8%
250,000	Neo Material Technologies, Inc.* (Canada)		895,194
	Specialty Stores 1.3%
45,000	Big 5 Sporting Goods Corp.		679,500
100,000	easyhome Ltd. (Canada)		841,436
			1,520,936
	Steel 2.4%
180,310	Globe Specialty Metals, Inc.* ***		1,561,340
39,000	Haynes International, Inc.*		1,240,980
			2,802,320
	Systems Software 3.2%
1,664,666	GuestLogix, Inc.* (Canada)		1,431,837
130,000	Opnet Technologies, Inc.		1,420,900
1,800	Simplex Technology, Inc. (Japan)		857,764
			3,710,501
	Thrifts & Mortgage Finance 0.9%
252,000	United Western Bancorp, Inc.		1,000,440
	Trading Companies & Distributors 1.4%
98,245	Essex Rental Corp.*		589,470
64,000	Interline Brands, Inc.*		1,078,400
			1,667,870
	Trucking 1.9%
123,000	Celadon Group, Inc.*		1,391,130
91,000	Vitran Corp., Inc.*		820,820
			2,211,950
	Total Common Stocks (cost $81,149,197)		100,407,946
	WARRANTS 0.0%
	Biotechnology 0.0%
30,399	NeurogesX, Inc., expiring 12/28/12* *** †		—
	Health Care Distributors 0.0%
6,486	Familymeds Group, Inc. expiring 11/30/09* *** †		—
	Health Care Equipment 0.0%
58,140	Cardica, Inc. expiring 6/7/12* *** †		—
110,500	Cardica, Inc., expiring 9/29/14* *** †		13,813
			13,813
	Total Warrants (cost $26,914)		13,813

66

SEPTEMBER 30, 2009

Principal Amount		Value
	SHORT-TERM INVESTMENTS 12.1%
	Repurchase Agreement 12.1%
$13,928,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $13,155,000 of United States Treasury Notes 4.00% due 2/15/15; value: $14,210,031; repurchase proceeds: $13,928,004 (cost $13,928,000)	$	13,928,000
	Total Short-Term Investments (cost $13,928,000)		13,928,000
	Total Investments (cost $95,104,111) 99.2%		114,349,759
	Other Assets less Liabilities 0.8%		866,634
	NET ASSETS 100.0%	$	115,216,393
	*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Micro Cap Value Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	1.2
Canada	6.0
China	7.3
Denmark	1.4
Germany	2.4
Greece	0.9
India	2.2
Indonesia	2.2
Japan	0.9
Korea	1.9
Mexico	1.1
Norway	0.7
Spain	1.4
Sweden	1.0
Switzerland	0.8
United States	68.6
TOTAL	100.0	%

67

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 90.0%
	Aerospace & Defense 1.5%
194,850	HEICO Corp.	$	8,448,696
97,443	HEICO Corp., Class A		3,304,292
			11,752,988
	Air Freight & Logistics 1.5%
24,866,692	Aramex PJSC (United Arab Emirates)*		11,983,295
	Alternative Carriers 0.7%
262,774	Neutral Tandem, Inc.*		5,980,736
	Aluminum 0.9%
11,305,282	Midas Holdings Ltd. (Singapore)		6,865,312
	Apparel Retail 1.2%
584,774	Zumiez, Inc.*		9,596,141
	Apparel, Accessories & Luxury Goods 2.3%
5,073,340	Ports Design Ltd. (China)		12,673,449
384,108	Volcom, Inc.*		6,330,100
			19,003,549
	Application Software 2.9%
62,615	Concur Technologies, Inc.*		2,489,572
76,162	FactSet Research Systems, Inc.		5,044,971
561,010	Ultimate Software Group, Inc.*		16,112,207
			23,646,750
	Asset Management & Custody Banks 1.5%
421,085	Waddell & Reed Financial, Inc., Class A		11,979,868
	Automotive Retail 1.6%
349,275	O’Reilly Automotive, Inc.* †††		12,622,798
	Biotechnology 1.7%
17,896	Myriad Genetics, Inc.*		490,350
4,474	Myriad Pharmaceuticals, Inc.*		26,218
225,795	Orexigen Therapeutics, Inc.*		2,224,081
146,199	Orexigen Therapeutics, Inc., Series C PIPE* †		1,440,060
259,725	Sangamo BioSciences, Inc.*		2,132,342
469,510	Seattle Genetics, Inc.*		6,587,225
205,700	ZymoGenetics, Inc.*		1,242,428
			14,142,704
	Communications Equipment 2.4%
256,665	F5 Networks, Inc.*		10,171,634
438,555	Riverbed Technology, Inc.*		9,630,668
			19,802,302
	Computer & Electronics Retail 0.5%
250,578	hhgregg, Inc.*		4,244,791
	Construction & Farm Machinery & Heavy Trucks 1.5%
331,826	Bucyrus International, Inc., Class A		11,819,642
	Data Processing & Outsourced Services 3.1%
483,365	NeuStar, Inc., Class A*		10,924,049
1,184,760	Wirecard AG (Germany)		14,120,187
			25,044,236
	Distributors 1.0%
425,555	LKQ Corp.*		7,889,790
	Diversified Banks 2.4%
166,191	HDFC Bank Ltd. ADR (India)		19,672,029
	Diversified Support Services 2.2%
543,576	Copart, Inc.*		18,052,159

Shares		Vialue
	Education Services 1.2%
138,396	Capella Education Co.*	$	9,319,586
	Environmental & Facilities Services 1.7%
528,645	Tetra Tech, Inc.*		14,024,952
	Footwear 0.3%
18,556,345	China Hongxing Sports Ltd. (China)		2,767,735
	Health Care Distributors 1.5%
295,456	MWI Veterinary Supply, Inc.*		11,803,467
	Health Care Equipment 2.1%
479,552	Abaxis, Inc.*		12,828,016
466,111	DexCom, Inc.*		3,696,260
1,620,220	Zonare Medical Systems, Inc.* *** †		194,427
			16,718,703
	Health Care Services 2.2%
287,910	Bio-Reference Laboratories, Inc.*		9,904,104
139,085	MEDNAX, Inc.*		7,638,548
			17,542,652
	Health Care Technology 1.8%
161,960	athenahealth, Inc.*		6,214,405
208,055	Computer Programs & Systems, Inc.		8,615,558
			14,829,963
	Human Resource & Employment Services 0.9%
1,381,683	Michael Page International plc (United Kingdom)		7,391,656
	Integrated Telecommunication Services 0.8%
405,190	Cbeyond, Inc.*		6,535,715
	Internet Software & Services 2.8%
458,170	DealerTrack Holdings, Inc.*		8,663,995
943,390	LoopNet, Inc.*		8,528,246
115,350	VistaPrint N.V.*		5,854,012
			23,046,253
	Investment Banking & Brokerage 0.7%
343,360	optionsXpress Holdings, Inc.		5,933,261
	IT Consulting & Other Services 2.7%
558,518	Cognizant Technology Solutions Corp., Class A*		21,592,306
	Leisure Facilities 1.3%
377,125	Life Time Fitness, Inc.*		10,578,356
	Life Sciences Tools & Services 2.4%
500,880	ICON plc ADR* (Ireland)		12,266,551
115,284	Techne Corp.		7,211,014
			19,477,565
	Mortgage REITs 1.3%
665,608	Redwood Trust, Inc.		10,316,924
	Oil & Gas Equipment & Services 4.7%
440,555	Dril-Quip, Inc.*		21,869,150
790,890	Pason Systems, Inc. (Canada)		9,205,853
455,035	TGS-NOPEC Geophysical Co. ASA* (Norway)		6,817,683
			37,892,686
	Oil & Gas Exploration & Production 0.8%
413,670	GMX Resources, Inc.*		6,498,756

68

SEPTEMBER 30, 2009

Shares		Value
	Other Diversified Financial Services 0.5%
2,661,038	Count Financial Ltd. (Australia)	$	3,639,144
	Packaged Foods & Meats 0.6%
202,306	Glaxo SmithKline Consumer Healthcare Ltd. (India)		4,870,610
	Pharmaceuticals 0.9%
656,923	Alexza Pharmaceuticals, Inc.*		1,478,077
409,401	Alexza Pharmaceuticals, Inc. PIPE* *** †		847,460
680,112	Dechra Pharmaceuticals plc (United Kingdom)		4,652,968
			6,978,505
	Regional Banks 0.8%
164,505	City National Corp.		6,404,180
	Research & Consulting Services 5.5%
324,938	CRA International, Inc.*		8,867,558
1,399	Exponent, Inc.*		39,410
1,153,294	Resources Connection, Inc.* †††		19,675,196
645,594	Stantec, Inc.* (Canada)		16,204,409
			44,786,573
	Restaurants 1.6%
472,411	Peet’s Coffee & Tea, Inc.*		13,336,163
	Semiconductors 7.8%
317,795	Hittite Microwave Corp.*		11,688,500
189,729	Netlogic Microsystems, Inc.*		8,537,805
1,509,480	O2Micro International Ltd. ADR* (China)		7,924,770
688,621	Power Integrations, Inc.		22,951,738
258,135	Silicon Laboratories, Inc.*		11,967,139
			63,069,952
	Specialized Finance 2.9%
789,810	MSCI, Inc., Class A*		23,394,172
	Specialty Stores 2.5%
1,099,155	Hibbett Sports, Inc.*		20,037,596
	Systems Software 3.1%
432,785	ArcSight, Inc.*		10,417,135
730,937	NetSuite, Inc.*		11,183,336
177,135	Sourcefire, Inc.*		3,803,089
			25,403,560
	Trading Companies & Distributors 2.9%
534,700	MSC Industrial Direct Co., Inc, Class A		23,302,226
	Trucking 2.8%
115,170	J.B. Hunt Transport Services, Inc.		3,700,412
1,145,242	Knight Transportation, Inc.†††		19,217,161
			22,917,573
	Total Common Stocks (cost $587,995,535)		728,509,880
	PREFERRED STOCKS 0.4%
	Biotechnology 0.1%
677,966	Nanosys, Inc., Series D Pfd.* *** †		1,105,085
	Health Care Equipment 0.0%
750,000	Orqis Medical Corp., Series D Pfd.* *** †		—
	Health Care Services 0.0%
362,782	TargetRX, Inc., Series D Pfd.* *** †		3,628
	Internet Software & Services 0.0%
404,517	Incipient, Inc., Series D Pfd.* *** †		—

Shares		Value
	Life Sciences Tools & Services 0.3%
178,571	Fluidigm Corp., Series E Pfd.* *** †	$	1,932,138
	Total Preferred Stocks (cost $8,329,870)		3,040,851
	LIMITED PARTNERSHIP INTEREST 0.5%
	Other 0.5%
	Montagu Newhall Global Partners II-B, L.P.*** †		3,395,960
	Montagu Newhall Global Partners III-B, L.P.* *** †		809,385
			4,205,345
	Total Limited Partnership Interest (cost $4,938,853)		4,205,345
Principal Amount		Value
	CONVERTIBLE NOTES 0.0%
	Life Sciences Tools & Services 0.0%
$113,374	Fluidigm Corp. Bridge Financing, 12.00%, 12/31/09†	$	113,374
	Total Convertible Notes (cost $113,374)		113,374
Shares		Value
	WARRANTS 0.0%
	Health Care Equipment 0.0%
243,033	Zonare Medical Systems, Inc. expiring 6/30/11* *** †	$	—
	Life Sciences Tools & Services 0.0%
113,400	Fluidigm Corp. expiring 8/18/19* †		11
	Pharmaceuticals 0.0%
368,461	Alexza Pharmaceuticals, Inc. expiring 10/5/16* *** †		46,058
	Total Warrants (cost $46,069)		46,069
	RIGHTS 0.0%
	Life Sciences Tools & Services 0.0%
208,525	Valera Pharmaceuticals, Inc. Ureteral Stent CSR* *** †		—
	Pharmaceuticals 0.0%
208,525	Valera Pharmaceuticals, Inc. VP003 (Octreotide Implant) CSR* *** †		—
	Total Rights (cost $406,537)		—

69

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Schedule of Investments (continued) SEPTEMBER 30, 2009

Principal Amount		Value
	SHORT-TERM INVESTMENTS 10.1%
	Repurchase Agreement 10.1%
$81,535,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $81,990,000 of United States Treasury Notes 2.625% due 2/29/16; value: $28,284,300; United States Treasury Notes 1.75% due 8/15/12; value: $9,817,200; United States Treasury Notes 3.625% due 8/15/19; value: $45,065,625; repurchase proceeds: $81,535,023††† (cost $81,535,000)	$	81,535,000
	Total Short-Term Investments (cost $81,535,000)		81,535,000
	Total Investments (cost $683,365,238) 101.0%		817,450,519
	Liabilities less Other Assets (1.0)%		(8,132,584	)
	NET ASSETS 100.0%	$	809,317,935
	*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). †††All or a portion of this security has been designated as collateral for purchase commitments (see Note 10). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Small Cap Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia	0.5
Canada	3.5
China	3.2
Germany	1.9
India	3.3
Ireland	1.7
Norway	0.9
Singapore	0.9
United Arab Emirates	1.6
United Kingdom	1.7
United States	80.8
TOTAL	100.0	%

70

WASATCH SMALL CAP VALUE FUND (WMCVX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 96.0%
	Aerospace & Defense 2.3%
149,490	HEICO Corp., Class A	$	5,069,206
	Air Freight & Logistics 1.4%
4,320,486	Goodpack Ltd. (Singapore)		3,099,322
	Apparel, Accessories & Luxury Goods 1.2%
166,795	Volcom, Inc.*		2,748,782
	Application Software 1.1%
41,437	Ebix, Inc.*		2,293,952
	Asset Management & Custody Banks 4.4%
276,276	Fifth Street Finance Corp.		3,019,697
139,215	SEI Investments Co.		2,739,751
471,940	Solar Capital, LLC** *** †		3,917,102
			9,676,550
	Automotive Retail 1.8%
77,285	Monro Muffler Brake, Inc.		2,456,890
37,590	O’Reilly Automotive, Inc.*		1,358,503
			3,815,393
	Communications Equipment 1.7%
141,395	Polycom, Inc.*		3,782,316
	Construction & Engineering 1.1%
348,336	Great Lakes Dredge & Dock Co.		2,431,385
	Construction & Farm Machinery & Heavy Trucks 1.0%
63,970	Bucyrus International, Inc., Class A		2,278,611
	Consumer Finance 3.6%
234,253	Dollar Financial Corp.*		3,752,733
532,416	United PanAm Financial Corp.*		1,836,835
86,665	World Acceptance Corp.*		2,184,825
			7,774,393
	Data Processing & Outsourced Services 1.8%
174,535	NeuStar, Inc., Class A*		3,944,491
	Distributors 0.9%
100,425	LKQ Corp.*		1,861,880
	Diversified Banks 0.9%
377,021	Bank of N.T. Butterfield & Son Ltd. (Bermuda)		1,885,105
	Diversified Capital Markets 0.9%
198,343	JMP Group, Inc.		1,915,993
	Diversified REITs 0.0%
60,000	Star Asia Financial Ltd. * †		54,000
	Diversified Support Services 2.0%
133,245	Copart, Inc.*		4,425,066
	Education Services 0.7%
179,780	Kroton Educacional S.A.** (Brazil)		1,606,296
	Electrical Components & Equipment 0.8%
2,115,868	Wasion Group Holdings Ltd. (China)		1,845,571
	Footwear 0.9%
13,044,115	China Hongxing Sports Ltd. (China)		1,945,569
	Health Care Equipment 1.0%
101,705	Invacare Corp.		2,265,987

Shares		Value
	Health Care Facilities 5.2%
135,356	AmSurg Corp.*	$	2,873,608
268,502	Emeritus Corp.*		5,893,619
94,795	VCA Antech, Inc.*		2,549,037
			11,316,264
	Health Care Services 7.1%
138,468	CorVel Corp.*		3,932,491
194,855	Healthways, Inc.*		2,985,179
129,880	LHC Group, Inc.*		3,887,308
85,885	MEDNAX, Inc.*		4,716,804
			15,521,782
	Health Care Technology 2.0%
204,110	IMS Health, Inc.		3,133,089
95,531	Vital Images, Inc.*		1,196,048
			4,329,137
	Homefurnishing Retail 1.2%
96,905	Aaron’s, Inc.		2,558,292
	Industrial Machinery 1.1%
87,310	IDEX Corp.		2,440,314
	Insurance Brokers 1.0%
108,965	Brown & Brown, Inc.		2,087,769
	Integrated Telecommunication Services 1.5%
203,130	Cbeyond, Inc.*		3,276,487
	Internet Software & Services 1.9%
111,469	DealerTrack Holdings, Inc.*		2,107,879
239,808	RADVision Ltd. (Israel)*		2,124,699
			4,232,578
	Investment Banking & Brokerage 1.6%
197,875	optionsXpress Holdings, Inc.		3,419,280
	IT Consulting & Other Services 2.4%
137,115	Cognizant Technology Solutions Corp., Class A*		5,300,866
	Life Sciences Tools & Services 2.1%
206,425	Pharmaceutical Product Development, Inc.		4,528,965
	Mortgage REITs 3.5%
553,170	MFA Financial, Inc.		4,403,233
207,605	Redwood Trust, Inc.		3,217,878
			7,621,111
	Office Services & Supplies 0.9%
211,405	American Reprographics Co.*		2,012,576
	Oil & Gas Equipment & Services 1.7%
383,891	TETRA Technologies, Inc.*		3,719,904
	Oil & Gas Exploration & Production 1.1%
95,050	Petrohawk Energy Corp.*		2,301,161
	Packaged Foods & Meats 1.0%
143,575	Zhongpin, Inc.*		2,113,424
	Personal Products 4.8%
94,080	Herbalife Ltd.		3,080,179
114,460	NBTY, Inc.*		4,530,327
405,017	Prestige Brands Holdings, Inc.*		2,851,320
			10,461,826
	Property & Casualty Insurance 2.0%
212,130	Seabright Insurance Holdings, Inc.*		2,422,525
77,545	Tower Group, Inc.		1,891,322
			4,313,847

71

WASATCH SMALL CAP VALUE FUND (WMCVX) — Schedule of Investments(continued) SEPTEMBER 30, 2009

Shares		Value
	Regional Banks 5.7%
318,507	Boston Private Financial Holdings, Inc.	$	2,073,481
88,665	City National Corp.		3,451,728
159,925	Columbia Banking System, Inc.		2,646,759
231,445	Commonwealth Bankshares, Inc.		1,208,143
178,653	Washington Trust Bancorp PIPE* †		3,130,000
			12,510,111
	Research & Consulting Services 3.3%
88,080	Corporate Executive Board Co.		2,193,192
113,985	Huron Consulting Group, Inc.*		2,944,233
122,290	Resources Connection, Inc.*		2,086,267
			7,223,692
	Semiconductors 4.9%
569,011	Pericom Semiconductor Corp.*		5,581,998
123,830	Standard Microsystems Corp.*		2,874,094
76,807	Supertex, Inc.*		2,304,210
			10,760,302
	Specialized Finance 1.2%
86,405	MSCI, Inc., Class A*		2,559,316
	Steel 2.4%
343,825	Globe Specialty Metals, Inc.* ***		2,977,249
71,525	Haynes International, Inc.*		2,275,926
			5,253,175
	Systems Software 1.2%
239,840	Opnet Technologies, Inc.		2,621,451
	Trading Companies & Distributors 3.0%
220,905	Interline Brands, Inc.*		3,722,249
66,085	MSC Industrial Direct Co., Inc, Class A		2,879,985
			6,602,234
	Trucking 2.7%
72,236	Old Dominion Freight Line, Inc.*		2,198,141
406,942	Vitran Corp., Inc.*		3,670,617
			5,868,758
	Total Common Stocks (cost $200,762,846)		209,674,490

Principal Amount		Value
	SHORT-TERM INVESTMENTS 4.2%
	Repurchase Agreement 4.2%
$9,146,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $8,640,000 of United States Treasury Notes 4.00% due 2/15/15; value: $9,332,928; repurchase proceeds: $9,146,003 (cost $9,146,000)	$	9,146,000
	Total Short-Term Investments (cost $9,146,000)		9,146,000
	Total Investments (cost $209,908,846) 100.2%		218,820,490
	Liabilities less Other Assets (0.2)%		(462,819	)
	NET ASSETS 100.0%	$	218,357,671
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). PIPE Private Investment in a Public Equity. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Small Cap Value Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Bermuda	0.9
Brazil	0.8
China	1.8
Israel	1.0
Singapore	1.5
United States	94.0
TOTAL	100.0	%

72

WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 73.3%
	Asset Management & Custody Banks 10.0%
18,891	Apollo Investment Corp.	$	180,409
50,075	Ares Capital Corp.		551,826
64,440	Fifth Street Finance Corp.		704,329
9,115	SEI Investments Co.		179,383
19,600	Solar Capital, LLC** *** †		162,680
			1,778,627
	Computer Hardware 2.0%
2,900	International Business Machines Corp.		346,869
	Data Processing & Outsourced Services 5.6%
8,100	Cia Brasileira de Meios de Pagamentos (Brazil)		80,576
18,660	Paychex, Inc.		542,073
23,600	Redecard S.A. (Brazil)		363,899
			986,548
	Diversified Banks 4.7%
74,932	Bank of East Asia Ltd. (Hong Kong)		270,720
48,160	Bank of N.T. Butterfield & Son Ltd. (Bermuda)		240,800
16,164	Itau Unibanco Holding S.A. ADR (Brazil)		325,705
			837,225
	Diversified REITs 1.0%
42,000	CapLease, Inc.		169,260
17,279	Star Asia Financial Ltd.* †		15,551
			184,811
	Diversified Support Services 1.1%
7,585	Ritchie Bros. Auctioneers, Inc. (Canada)		186,136
	Fertilizers & Agricultural Chemicals 1.4%
3,250	Monsanto Co.		251,550
	Gold 0.0%
95,680	Redcorp Ventures Ltd. PIPE* *** † (Canada)		—
	Health Care Services 1.5%
5,900	Chemed Corp.		258,951
	Hypermarkets & Super Centers 2.0%
7,255	Wal-Mart Stores, Inc.		356,148
	Industrial Machinery 2.3%
42,700	Weg S.A. (Brazil)		407,852
	Leisure Products 1.8%
14,300	Pool Corp.†††		317,746
	Life Sciences Tools & Services 3.9%
7,100	Eurofins Scientific (France)		333,175
16,445	Pharmaceutical Product Development, Inc.		360,803
			693,978
	Mortgage REITs 14.5%
61,990	Capstead Mortgage Corp.		862,281
135,700	MFA Financial, Inc.		1,080,172
39,940	Redwood Trust, Inc.		619,070
			2,561,523
	Multi-Line Insurance 2.0%
10,255	Loews Corp.		351,234
	Oil & Gas Exploration & Production 1.8%
2,810	Range Resources Corp.†††		138,702
3,500	Ultra Petroleum Corp.* (Canada)		171,360
			310,062

Shares		Value
	Personal Products 2.9%
15,650	Herbalife Ltd.	$	512,381
	Pharmaceuticals 5.5%
9,630	Forest Laboratories, Inc.*		283,507
4,095	Johnson & Johnson		249,344
8,835	Teva Pharmaceutical Industries Ltd. ADR (Israel)		446,698
			979,549
	Railroads 1.1%
3,330	Union Pacific Corp.		194,305
	Semiconductors 3.9%
6,470	Linear Technology Corp.†††		178,766
6,315	Microchip Technology, Inc.		167,348
31,165	Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)		341,568
			687,682
	Trading Companies & Distributors 2.2%
3,800	MSC Industrial Direct Co., Inc, Class A†††		165,604
2,530	W.W. Grainger, Inc.		226,081
			391,685
	Wireless Telecommunication Services 2.1%
8,345	America Movil S.A.B. de C.V., Series L ADR (Mexico)		365,761
	Total Common Stocks (cost $12,968,960)		12,960,623
	EXCHANGE TRADED FUNDS 2.2%
	Asset Management & Custody Banks 2.2%
5,576	Direxion Daily Financial Bear 3X Shares		115,925
2,310	ProShares UltraShort 20+ Year Treasury ETF		101,663
3,300	Energy Select Sector SPDR Fund		177,936
			395,524
	Total Exchange Traded Funds (cost $751,857)		395,524
	LIMITED PARTNERSHIP INTEREST 1.9%
	Oil & Gas Storage & Transportation 1.9%
9,048	Magellan Midstream Partners L.P.**		340,202
	Total Limited Partnership Interest (cost $221,100)		340,202
	ROYALTY INTEREST 0.0%
	Gold 0.0%
299	Redcorp Ventures Ltd. — NSR Interest* *** † (Canada)		—
	Total Royalty Interest (cost $0)		—

73

WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments(continued) SEPTEMBER 30, 2009

Principal Amount		Value
	CORPORATE BONDS 2.2%
	Gold 0.1%
$255,698	Redcorp Ventures Ltd., 13.00%, 7/11/12*** † (Canada)	$	23,906
	Integrated Telecommunication Services 2.1%
400,000	Broadview Networks Holdings, Inc., 11.375%, 9/1/12		366,500
	Total Corporate Bonds (cost $648,512)		390,406
Shares		Value
	WARRANTS 0.0%
	Gold 0.0%
209,599	Redcorp Ventures Ltd. expiring 11/11/21* *** † (Canada)	$	—
	Total Warrants (cost $0)		—
Number of Contracts		Value
	PUT OPTIONS PURCHASED 0.4%
	Specialized Finance 0.4%
200	S&P 500 Index, expiring 12/19/09, exercise price $800	$	76,000
	Total Put Options Purchased (premium $222,200)		76,000
Principal Amount		Value
	SHORT-TERM INVESTMENTS 17.8%
	Repurchase Agreement 17.8%
$3,149,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $3,245,000 of United States Treasury Notes 2.625% due 2/29/16; value: $3,212,550; repurchase proceeds: $3,149,001††† (cost $3,149,000)	$	3,149,000
	Total Short-Term Investments (cost $3,149,000)		3,149,000
	Total Investments (cost $17,961,629) 97.8%		17,311,755
	Other Assets less Liabilities 2.2%		398,292
	NET ASSETS 100.0%	$	17,710,047
Number of Contracts		Value
	CALL OPTIONS WRITTEN 0.1%
	Leisure Products 0.0%
143	Pool Corp., expiring 10/17/09, exercise price $25	$	715

Number of Contracts		Value
	Oil & Gas Exploration & Production 0.0%
28	Range Resources Corp., expiring 10/17/09, exercise price $52.50	$	1,540
	Semiconductors 0.1%
64	Linear Technology Corp., expiring 10/17/09, exercise price $27		8,000
	Trading Companies & Distributors 0.0%
38	MSC Industrial Direct Co., expiring 10/17/09, exercise price $45		2,090
	Total Call Options Written (premium $20,877)		12,345
Shares		Value
	SECURITIES SOLD SHORT 0.5%
	Mortgage REITs 0.0%
6,000	NovaStar Financial, Inc.	$	6,900
	Regional Banks 0.3%
3,310	Heartland Financial USA, Inc.		48,823
	Thrifts & Mortgage Finance 0.2%
8,322	First Federal Bancshares of Arkansas, Inc.		32,206
	Total Securities Sold Short (proceeds $460,105)		87,929
	*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). †††All or a portion of this security has been designated as collateral for short sales and call options written (see Note 2). ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch Strategic Income Fund’s investments, excluding short-term investments, written options, and securities sold short, were in the following countries:

Country	%
Bermuda	1.7
Brazil	8.4
Canada	1.5
France	2.4
Hong Kong	1.9
Israel	3.2
Mexico	2.6
Taiwan	2.4
United States	75.9
TOTAL	100.0	%

74

WASATCH ULTRA GROWTH FUND (WAMCX) — Schedule of Investments SEPTEMBER 30, 2009

Shares		Value
	COMMON STOCKS 93.5%
	Air Freight & Logistics 1.0%
2,585,000	Aramex PJSC* (United Arab Emirates)	$	1,245,715
	Aluminum 0.6%
1,164,000	Midas Holdings Ltd. (Singapore)		706,858
	Apparel Retail 1.0%
69,935	Zumiez, Inc.*		1,147,633
	Apparel, Accessories & Luxury Goods 1.6%
784,000	Ports Design Ltd. (China)		1,958,470
	Application Software 5.6%
17,055	Concur Technologies, Inc.*		678,107
20,845	FactSet Research Systems, Inc.		1,380,773
86,841	Interactive Intelligence, Inc.*		1,659,532
83,625	Tyler Technologies, Inc.*		1,429,151
58,110	Ultimate Software Group, Inc.*		1,668,919
			6,816,482
	Asset Management & Custody Banks 1.7%
58,253	Westwood Holdings Group, Inc.		2,021,379
	Automotive Retail 1.8%
61,395	O’Reilly Automotive, Inc.*		2,218,815
	Biotechnology 0.4%
46,960	Orexigen Therapeutics, Inc.*		462,556
	Communications Equipment 5.0%
74,740	F5 Networks, Inc.*		2,961,946
91,305	Riverbed Technology, Inc.*		2,005,058
43,035	Starent Networks Corp.*		1,093,950
			6,060,954
	Construction & Engineering 1.3%
63,000	MYR Group, Inc.*		1,328,670
13,685	Orion Marine Group, Inc.*		281,090
			1,609,760
	Construction & Farm Machinery & Heavy Trucks 1.0%
34,907	Bucyrus International, Inc., Class A†††		1,243,387
	Consumer Finance 0.4%
30,320	First Cash Financial Services, Inc.*		519,382
	Data Processing & Outsourced Services 2.6%
52,000	Cia Brasileira de Meios de Pagamentos (Brazil)		517,278
24,915	NeuStar, Inc., Class A*		563,079
167,175	Wirecard AG (Germany)		1,992,423
			3,072,780
	Distributors 1.7%
113,220	LKQ Corp.*		2,099,099
	Diversified Banks 3.4%
63,000	Axis Bank Ltd. (India)		1,290,187
45,210	HDFC Bank Ltd. (India)		1,551,172
10,951	HDFC Bank Ltd. ADR (India)		1,296,270
			4,137,629
	Diversified Support Services 1.6%
57,140	Copart, Inc.*		1,897,619
	Education Services 1.5%
26,545	Capella Education Co.*		1,787,540

Shares		Value
	Environmental & Facilities Services 2.3%
60,684	Heritage-Crystal Clean, Inc.*	$	773,721
57,950	Team, Inc.*		982,253
36,600	Tetra Tech, Inc.*		970,998
			2,726,972
	Footwear 0.4%
3,375,860	China Hongxing Sports Ltd. (China)		503,520
	General Merchandise Stores 1.5%
37,040	Dollar Tree, Inc.*		1,803,107
	Health Care Equipment 4.1%
61,075	Abaxis, Inc.*		1,633,756
203,255	Cardica, Inc.* †††		306,915
330,000	Cardica, Inc. PIPE* *** †		438,504
35,474	Cardiovascular Systems, Inc.*		257,896
56,445	DexCom, Inc.*		447,609
21,750	DiaSorin S.p.A (Italy)		732,441
24,681	NuVasive, Inc.*		1,030,679
1,080,146	Zonare Medical Systems, Inc.* *** †		129,618
			4,977,418
	Health Care Facilities 3.4%
75,970	Emeritus Corp.*		1,667,542
92,715	VCA Antech, Inc.*		2,493,106
			4,160,648
	Health Care Services 2.4%
36,120	Bio-Reference Laboratories, Inc.*		1,242,528
234,845	Clarient, Inc.*		988,697
18,180	Genoptix, Inc.*		632,300
			2,863,525
	Health Care Supplies 1.9%
77,800	Abcam plc (United Kingdom)		1,082,197
367,205	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		1,212,953
			2,295,150
	Health Care Technology 1.5%
15,130	athenahealth, Inc.*		580,538
30,050	Computer Programs & Systems, Inc.		1,244,370
253,064	Transoma Medical, Inc.,* *** †		2,531
			1,827,439
	Home Entertainment Software 0.3%
31,600	Shanda Games Ltd. ADR* (China)		369,720
	Industrial Machinery 0.5%
17,890	Duoyuan Global Water, Inc. ADR* (China)		595,737
	Integrated Telecommunication Services 1.0%
75,195	Cbeyond, Inc.*		1,212,895
	Internet Software & Services 2.0%
27,020	Constant Contact, Inc.*		520,135
56,225	DealerTrack Holdings, Inc.*		1,063,215
15,710	VistaPrint N.V.*		797,282
91,388	Xtera* *** †		30,158
			2,410,790
	IT Consulting & Other Services 4.9%
141,316	Cognizant Technology Solutions Corp., Class A*		5,463,277
138,110	Rolta India Ltd. (India)		509,317
			5,972,594
	Leisure Facilities 1.6%
69,800	Life Time Fitness, Inc.*		1,957,890

75

WASATCH ULTRA GROWTH FUND (WAMCX) — Schedule of Investments(continued)

Shares		Value
	Life Sciences Tools & Services 2.1%
61,353	ICON plc ADR* (Ireland)	$	1,502,535
15,825	Techne Corp.		989,854
			2,492,389
	Oil & Gas Equipment & Services 2.1%
31,825	Dril-Quip, Inc.*		1,579,793
80,185	Pason Systems, Inc. (Canada)		933,343
			2,513,136
	Oil & Gas Exploration & Production 1.6%
28,955	GMX Resources, Inc.*		454,883
61,820	Petrohawk Energy Corp.*		1,496,662
			1,951,545
	Packaged Foods & Meats 0.5%
26,000	Glaxo SmithKline Consumer Healthcare Ltd. (India)		625,962
	Personal Products 1.0%
38,445	Herbalife Ltd.		1,258,689
50,403	Ophthonix, Inc.* *** †		504
			1,259,193
	Pharmaceuticals 0.2%
57,562	Alexza Pharmaceuticals, Inc.*		129,514
75,769	Alexza Pharmaceuticals, Inc.* *** † PIPE		156,842
			286,356
	Publishing 1.1%
28,361	Morningstar, Inc.*		1,377,210
	Research & Consulting Services 2.7%
99,280	Resources Connection, Inc.*		1,693,717
63,000	Stantec, Inc.* (Canada)		1,581,300
			3,275,017
	Restaurants 0.9%
37,580	Peet’s Coffee & Tea, Inc.*		1,060,883
	Semiconductor Equipment 0.9%
39,922	Tessera Technologies, Inc.*		1,113,425
	Semiconductors 8.7%
31,785	Hittite Microwave Corp.*		1,169,052
27,825	Netlogic Microsystems, Inc.*		1,252,125
493,000	O2Micro International Ltd. ADR* (China)		2,588,250
94,315	Power Integrations, Inc.		3,143,519
51,950	Silicon Laboratories, Inc.*		2,408,402
			10,561,348
	Specialized Finance 3.4%
140,750	MSCI, Inc., Class A*		4,169,015
	Specialty Stores 1.2%
79,390	Hibbett Sports, Inc.*		1,447,280
	Systems Software 3.2%
49,095	ArcSight, Inc.*		1,181,717
80,742	NetSuite, Inc.*		1,235,352
133,500	Opnet Technologies, Inc.		1,459,155
			3,876,224
	Thrifts & Mortgage Finance 1.1%
82,510	LIC Housing Finance Ltd. (India)		1,324,397
	Trucking 2.8%
126,975	Knight Transportation, Inc.		2,130,640
39,965	Old Dominion Freight Line, Inc.*		1,216,135
			3,346,775
	Total Common Stocks (cost $89,022,984)		113,363,618

Shares		Value
	PREFERRED STOCKS 1.2%
	Biotechnology 0.2%
169,492	Nanosys, Inc., Series D Pfd.* *** †	$	276,272
	Health Care Services 0.0%
108,917	TargetRX, Inc., Series D Pfd.* *** †		1,089
	Health Care Technology 1.0%
253,064	Data Sciences International, Inc. Series B Pfd.* *** †		817,574
243,902	TherOx, Inc., Series I Pfd.* *** †		429,267
			1,246,841
	Total Preferred Stocks (cost $2,205,906)		1,524,202
	LIMITED PARTNERSHIP INTEREST 3.2%
	Other 3.2%
	Montagu Newhall Global Partners II-B, L.P.*** †		3,056,369
	Montagu Newhall Global Partners III-B, L.P.* *** †		809,385
			3,865,754
	Total Limited Partnership Interest (cost $4,539,467)		3,865,754
	WARRANTS 0.0%
	Health Care Equipment 0.0%
165,000	Cardica, Inc., expiring 9/29/14*** †		20,625
162,021	Zonare Medical Systems, Inc., expiring 6/30/11*** †		—
			20,625
	Pharmaceuticals 0.0%
68,192	Alexza Pharmaceuticals, Inc., expiring 10/5/16*** †		8,524
	Total Warrants (cost $29,149)		29,149

76

SEPTEMBER 30, 2009

Principal Amount		Value
	SHORT-TERM INVESTMENTS 2.3%
	Repurchase Agreement 2.3%
$2,745,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/01/09 with Fixed Income Clearing Corporation collateralized by $2,830,000 of United States Treasury Notes 2.625% due 2/29/16; value: $2,801,700; repurchase proceeds: $2,745,001††† (cost $2,745,000)	$	2,745,000
	Total Short-Term Investments (cost $2,745,000)		2,745,000
	Total Investments (cost $98,542,506) 100.2%		121,527,723
	Liabilities less Other Assets (0.2)%		(243,487	)
	NET ASSETS 100.0%	$	121,284,236
	*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 9). †††All or a portion of this security has been designated as collateral for future commitments (see Note 10). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. See Notes to Financial Statements.

At September 30, 2009, Wasatch Ultra Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Brazil	0.4
Canada	2.1
China	6.1
Germany	1.7
India	5.6
Ireland	1.3
Italy	0.6
Singapore	0.6
United Arab Emirates	1.0
United Kingdom	0.9
United States	79.7
TOTAL	100.0	%

77

WASATCH-1ST SOURCE INCOME EQUITY FUND (FMIEX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 95.0%
	Advertising 1.2%
443,000	Omnicom Group, Inc.	$	16,364,420
	Aerospace & Defense 3.2%
360,000	Raytheon Co.		17,269,200
310,000	Rockwell Collins, Inc.		15,748,000
195,000	United Technologies Corp.		11,881,350
			44,898,550
	Agricultural Products 1.5%
705,750	Archer-Daniels-Midland Co.		20,622,015
	Aluminum 1.3%
1,361,130	Alcoa, Inc.		17,858,025
	Asset Management & Custody Banks 1.7%
450,000	Federated Investors, Inc., Class B		11,866,500
410,000	Waddell & Reed Financial, Inc., Class A		11,664,500
			23,531,000
	Auto Parts & Equipment 1.5%
840,000	Johnson Controls, Inc.		21,470,400
	Coal & Consumable Fuels 0.9%
430,000	Cameco Corp. (Canada)		11,954,000
	Communications Equipment 2.7%
650,000	Harris Corp.		24,440,000
901,000	Nokia OYJ ADR (Finland)		13,172,620
			37,612,620
	Computer Hardware 1.6%
480,000	Hewlett-Packard Co.		22,660,800
	Construction & Engineering 2.6%
440,000	Fluor Corp.		22,374,000
440,000	Shaw Group, Inc. (The)*		14,119,600
			36,493,600
	Data Processing & Outsourced Services 1.7%
440,000	Computer Sciences Corp.*		23,192,400
	Diversified Chemicals 1.3%
556,555	El Du Pont de Nemours and Co.		17,887,678
	Diversified Metals & Mining 1.3%
1,100,000	Anglo American plc* ADR (United Kingdom)		17,468,000
	Drug Retail 1.5%
550,000	Walgreen Co.		20,608,500
	Electric Utilities 2.1%
973,000	Duke Energy Corp.		15,315,020
249,000	FPL Group, Inc.		13,752,270
			29,067,290
	Electrical Components & Equipment 1.3%
440,000	Emerson Electric Co.		17,635,200
	Environmental & Facilities Services 2.7%
660,000	Republic Services, Inc.		17,536,200
679,000	Waste Management, Inc.		20,247,780
			37,783,980
	Fertilizers & Agricultural Chemicals 1.9%
150,000	Potash Corp. of Saskatchewan, Inc.		13,551,000
277,000	Syngenta AG ADR (Switzerland)		12,728,150
			26,279,150

Shares		Value
	Food Distributors 1.4%
770,000	Sysco Corp.	$	19,134,500
	Food Retail 1.3%
1,200,000	SUPERVALU, Inc.		18,072,000
	Health Care Distributors 2.0%
460,000	McKesson Corp.		27,393,000
	Health Care Equipment 2.8%
140,000	C. R. Bard, Inc.		11,005,400
235,000	Covidien plc		10,166,100
325,000	Zimmer Holdings, Inc.*		17,371,250
			38,542,750
	Home Improvement Retail 1.2%
620,000	Home Depot, Inc.		16,516,800
	Household Products 1.4%
330,000	Kimberly-Clark Corp.		19,463,400
	Hypermarkets & Super Centers 1.1%
310,000	Wal-Mart Stores, Inc.		15,217,900
	Industrial Conglomerates 1.0%
850,000	General Electric Co.		13,957,000
	Industrial Machinery 1.3%
340,000	Parker Hannifin Corp.		17,625,600
	Insurance Brokers 0.6%
332,000	Marsh & McLennan Cos. Inc.		8,210,360
	Integrated Oil & Gas 3.9%
250,000	Chevron Corp.		17,607,500
390,000	ConocoPhillips		17,612,400
580,000	Marathon Oil Corp.		18,502,000
			53,721,900
	Integrated Telecommunication Services 3.4%
686,000	AT&T, Inc.		18,528,860
880,000	Deutsche Telekom AG ADR (Germany)		12,020,800
561,000	Verizon Communications, Inc.		16,981,470
			47,531,130
	Life & Health Insurance 0.6%
206,700	MetLife, Inc., Class A		7,869,069
	Multi-Line Insurance 1.5%
610,000	Loews Corp.		20,892,500
	Oil & Gas Drilling 1.4%
440,350	ENSCO International, Inc.		18,732,489
	Oil & Gas Equipment & Services 1.5%
355,000	Schlumberger Ltd.		21,158,000
	Oil & Gas Exploration & Production 1.2%
270,000	Anadarko Petroleum Corp.		16,937,100
	Oil & Gas Storage & Transportation 2.7%
900,000	Spectra Energy Corp.		17,046,000
1,130,000	Williams Cos. Inc. (The)		20,193,100
			37,239,100
	Other Diversified Financial Services 3.3%
1,344,000	Bank of America Corp.		22,740,480
518,000	JPMorgan Chase & Co.		22,698,760
			45,439,240

78

SEPTEMBER 30, 2009

Shares		Value
	Packaged Foods & Meats 2.3%
840,000	ConAgra Foods, Inc.	$	18,211,200
350,000	HJ Heinz Co.		13,912,500
			32,123,700
	Personal Products 1.8%
750,000	Avon Products, Inc.		25,470,000
	Pharmaceuticals 7.6%
385,000	Abbott Laboratories		19,045,950
440,000	Eli Lilly and Co.		14,533,200
280,000	Johnson & Johnson		17,049,200
589,000	Merck & Co., Inc.		18,630,070
450,000	Novartis AG ADR (Switzerland)		22,671,000
830,000	Pfizer, Inc.		13,736,500
			105,665,920
	Property & Casualty Insurance 4.1%
737,860	Allstate Corp. (The)		22,593,273
1,375,000	Old Republic International Corp.		16,747,500
365,000	Travelers Cos. Inc. (The)		17,968,950
			57,309,723
	Railroads 0.6%
196,000	Norfolk Southern Corp.		8,449,560
	Semiconductors 3.0%
1,110,000	Intel Corp.		21,722,700
818,000	Texas Instruments, Inc.		19,378,420
			41,101,120
	Soft Drinks 1.3%
300,000	PepsiCo, Inc.		17,598,000
	Specialized Consumer Services 0.7%
500,000	H&R Block, Inc.		9,190,000
	Specialized Finance 0.9%
421,175	NYSE Euronext		12,167,746
	Steel 2.4%
366,500	Nucor Corp.		17,229,165
372,300	United States Steel Corp.		16,518,951
			33,748,116
	Systems Software 1.5%
800,000	Microsoft Corp.		20,712,000
	Technology Distributors 1.5%
780,000	Avnet, Inc.*		20,256,600
	Water Utilities 0.5%
360,355	American Water Works Co., Inc.		7,185,479
	Wireless Telecommunication Services 1.2%
350,000	China Mobile Ltd. ADR (China)		17,188,500
	Total Common Stocks (cost $1,214,385,180)		1,315,207,930

Principal Amount		Value
	SHORT-TERM INVESTMENTS 5.8%
	Repurchase Agreement 5.8%
$80,694,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $83,140,000 of United States Treasury Notes 1.75% due 1/31/14; value: $82,308,600; repurchase proceeds: $80,694,022 (cost $80,694,000)	$	80,694,000
	Total Short-Term Investments (cost $80,694,000)		80,694,000
	Total Investments (cost $1,295,079,180) 100.8%		1,395,901,930
	Liabilities less Other Assets (0.8)%		(10,394,214	)
	NET ASSETS 100.0%	$	1,385,507,716
	*Non-income producing. ADR American Depositary Receipt. See Notes to Financial Statements.

At September 30, 2009, Wasatch-1st Source Income Equity Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Canada	0.9
China	1.3
Finland	1.0
Germany	0.9
Switzerland	2.7
United Kingdom	1.3
United States	91.9
TOTAL	100.0	%

79

WASATCH-1ST SOURCE LONG/SHORT FUND (FMLSX) — Schedule of Investments

Shares		Value
	COMMON STOCKS 75.7%
	Application Software 0.9%
140,000	TIBCO Software, Inc.*	$	1,328,600
	Coal & Consumable Fuels 1.5%
60,000	Alpha Natural Resources, Inc.* †††		2,106,000
	Communications Equipment 1.9%
75,000	Harris Corp.		2,820,000
	Construction & Engineering 1.5%
120,000	Chicago Bridge & Iron Co. N.V.††† (Netherlands)		2,241,600
	Construction & Farm Machinery & Heavy Trucks 0.6%
70,000	Titan Machinery, Inc.*		876,400
	Electrical Components & Equipment 1.0%
50,000	Thomas & Betts Corp.*		1,504,000
	Environmental & Facilities Services 4.6%
130,000	Republic Services, Inc .†††		3,454,100
110,000	Waste Management, Inc.		3,280,200
			6,734,300
	Food Distributors 1.7%
100,000	Sysco Corp .†††		2,485,000
	Gas Utilities 1.8%
60,000	Energen Corp. †††		2,586,000
	Gold 1.0%
35,000	Newmont Mining Corp. †††		1,540,700
	Health Care Distributors 2.0%
40,000	Cardinal Health, Inc.		1,072,000
30,000	McKesson Corp.		1,786,500
			2,858,500
	Health Care Equipment 5.1%
87,000	Medtronic, Inc.		3,201,600
281,926	Symmetry Medical, Inc.*		2,923,573
64,000	Zoll Medical Corp.*		1,377,280
			7,502,453
	Health Care Technology 1.4%
27,200	Cerner Corp.* †††		2,034,560
	Home Entertainment Software 2.6%
200,000	Electronic Arts, Inc. (EA)*		3,810,000
	Hypermarkets & Super Centers 4.2%
125,000	Wal-Mart Stores, Inc .†††		6,136,250
	Insurance Brokers 1.3%
75,000	Marsh & McLennan Cos. Inc.		1,854,750
	Integrated Oil & Gas 2.3%
105,000	Marathon Oil Corp .†††		3,349,500
	Integrated Telecommunication Services 2.8%
80,000	AT&T, Inc.		2,160,800
65,000	Verizon Communications, Inc .†††		1,967,550
			4,128,350
	Internet Software & Services 4.3%
200,000	Akamai Technologies, Inc.*		3,936,000
100,000	eBay, Inc.* †††		2,361,000
			6,297,000

Shares		Value
	Leisure Products 2.7%
140,000	Hasbro, Inc .†††	$	3,885,000
	Multi-Line Insurance 4.7%
200,000	Loews Corp .†††		6,850,000
	Oil & Gas Drilling 7.6%
100,000	ENSCO International, Inc.†††		4,254,000
90,000	Noble Corp.		3,416,400
40,000	Transocean Ltd.*		3,421,200
			11,091,600
	Oil & Gas Equipment & Services 1.2%
1,100,000	Boots & Coots, Inc.*		1,771,000
	Oil & Gas Storage & Transportation 0.9%
70,000	Spectra Energy Corp .†††		1,325,800
	Personal Products 0.9%
40,000	Avon Products, Inc .†††		1,358,400
	Pharmaceuticals 3.2%
45,000	Johnson & Johnson		2,740,050
115,000	Pfizer, Inc .†††		1,903,250
			4,643,300
	Property & Casualty Insurance 4.2%
120,000	Allstate Corp. (The)		3,674,400
100,000	CNA Financial Corp.* †††		2,414,000
			6,088,400
	Restaurants 1.9%
50,000	McDonald’s Corp.		2,853,500
	Semiconductors 1.3%
100,000	Intel Corp.†††		1,957,000
	Steel 2.8%
60,000	Nucor Corp.†††		2,820,600
80,000	Steel Dynamics, Inc.†††		1,227,200
			4,047,800
	Systems Software 1.8%
125,000	Oracle Corp.		2,605,000
	Total Common Stocks (cost $94,626,570)		110,670,763
	PREFERRED STOCKS 4.4%
	Cable & Satellite 1.2%
70,000	Comcast Corp., 7.00%, Series B Pfd.*		1,748,600
	Retail REITs 0.9%
22,000	Simon Property Group, Inc., 8.375%, Series J Pfd.		1,287,000
	Specialized REITs 2.3%
75,000	Public Storage, 6.625%, Series M Pfd.		1,707,750
69,600	Public Storage, 7.25%, Series K Pfd.		1,733,736
			3,441,486
	Total Preferred Stocks (cost $5,425,487)		6,477,086
	LIMITED PARTNERSHIP INTEREST 1.6%
	Oil & Gas Storage & Transportation 1.6%
50,000	Plains All American Pipeline L.P.** †††		2,314,500
	Total Limited Partnership Interest (cost $1,925,300)		2,314,500

80

SEPTEMBER 30, 2009

Principal Amount		Value
	SHORT-TERM INVESTMENTS 21.5%
	Repurchase Agreement 21.5%
$31,385,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $29,640,000 of United States Treasury Notes 4.00% due 2/15/15; value: $32,017,128; repurchase proceeds: $31,385,009 ††† (cost $31,385,000)	$	31,385,000
	Total Short-Term Investments (cost $31,385,000)		31,385,000
	Total Investments (cost $133,362,357) 103.2%		150,847,349
	Liabilities less Other Assets (3.2)%		(4,720,365	)
	NET ASSETS 100.0%	$	146,126,984
Number of Contracts		Value
	CALL OPTIONS WRITTEN 1.1%
	Coal & Consumable Fuels 0.1%
600	Alpha Natural Resources, Inc., expiring 12/19/09, exercise price $37	$	192,000
	Construction & Engineering 0.0%
40	Chicago Bridge & Iron Co. N.V., expiring 11/21/09, exercise price $17.50		7,600
	Gas Utilities 0.1%
600	Energen Corp., expiring 10/17/09, exercise price $40		192,000
	Gold 0.1%
350	Newmont Mining Corp., expiring 12/19/09, exercise price $46		100,800
	Health Care Technology 0.1%
272	Cerner Corp., expiring 11/21/09, exercise price $72.50		138,720
	Oil & Gas Drilling 0.4%
1,000	ENSCO International, Inc., expiring 12/19/09, exercise price $40		480,000
	Semiconductors 0.1%
1,000	Intel Corp., expiring 10/17/09, exercise price $18		170,000
	Steel 0.2%
600	Nucor Corp., expiring 1/16/10, exercise price $48		213,000
800	Steel Dynamics, Inc., expiring 11/21/09, exercise price $17.50		48,000
			261,000
	Total Call Options Written (premium $1,604,392)		1,542,120

Shares		Value
	SECURITIES SOLD SHORT 15.3%
	Application Software 1.2%
35,000	SAP AG ADR (Germany)	$	1,710,450
	Communications Equipment 1.0%
32,000	QUALCOMM, Inc.		1,439,360
	Diversified Banks 0.8%
40,000	Comerica, Inc.		1,186,800
	Homebuilding 0.5%
35,000	Toll Brothers, Inc.		683,900
	Integrated Oil & Gas 1.9%
40,000	Exxon Mobil Corp.		2,744,400
	Metal & Glass Containers 1.1%
60,000	Pactiv Corp.		1,563,000
	Motorcycle Manufacturers 0.6%
40,000	Harley-Davidson, Inc.		920,000
	Restaurants 0.9%
85,000	Brinker International, Inc.		1,337,050
	Retail REITs 4.0%
20,000	Federal Realty Investment Trust		1,227,400
25,000	Regency Centers Corp.		926,250
27,013	Simon Property Group, Inc.		1,875,513
50,000	Tanger Factory Outlet Centers, Inc.		1,867,000
			5,896,163
	Specialized Finance 0.9%
65,000	Moody’s Corp.		1,329,900
	Specialized REITs 2.4%
75,000	Plum Creek Timber Co., Inc.		2,298,000
30,000	Rayonier, Inc.		1,227,300
			3,525,300
	Total Securities Sold Short (proceeds $20,513,050)		22,336,323
	*Non-income producing. **Common units. †††All or a portion of this security has been designated as collateral for short sales and call options written (see Note 2). ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch-1st Source Long/Short Fund’s investments, excluding short-term investments, written options and securities sold short, were in the following countries:

Country	%
Netherlands	1.9
United States	98.1
TOTAL	100.0	%

81

WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Schedule of Investments SEPTEMBER 30, 2009

Principal Amount		Value
	U.S. GOVERNMENT OBLIGATIONS 99.1%
$11,865,000	U.S. Treasury Bond, 4.25%, 5/15/39	$	12,274,710
1,400,000	U.S. Treasury Bond, 4.375%, 2/15/38		1,474,813
16,300,000	U.S. Treasury Bond, 4.50%, 2/15/36		17,507,211
10,000,000	U.S. Treasury Bond, 4.50%, 5/15/38		10,760,940
4,500,000	U.S. Treasury Bond, 4.50%, 8/15/39		4,851,562
23,800,000	U.S. Treasury Bond, 4.75%, 2/15/37		26,555,588
4,520,000	U.S. Treasury Bond, 5.25%, 2/15/29		5,246,730
3,000,000	U.S. Treasury Bond, 5.375%, 2/15/31		3,564,375
90,000,000	U.S. Treasury Strip, principal only, 11/15/27		41,829,570
71,837,000	U.S. Treasury Strip, principal only, 2/15/37		23,350,401
18,101,000	U.S. Treasury Strip, principal only, 5/15/39		5,387,926
	Total U.S. Government Obligations (cost $143,459,574)		152,803,826
	SHORT-TERM INVESTMENTS 0.6%
	Repurchase Agreement 0.6%
879,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/1/09 with Fixed Income Clearing Corporation collateralized by $910,000 of United States Treasury Notes 2.625% due 2/29/16; value: $900,900; repurchase proceeds: $879,000 (cost $879,000)		879,000
	Total Short-Term Investments (cost $879,000)		879,000
	Total Investments (cost $144,338,574) 99.7%		153,682,826
	Other Assets less Liabilities 0.3%		415,719
	NET ASSETS 100.0%	$	154,098,545
	See Notes to Financial Statements.

82

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments SEPTEMBER 30, 2009

Principal Amount		Value
	ASSET BACKED SECURITIES 3.2%
$600,000	Capital One Multi-Asset Execution Trust, 4.70%, 6/15/15, Series 2005-A7, Class A7	$	638,755
1,500,000	Citibank Credit Card Issuance Trust, 5.45%, 5/10/13, Series 2006-A4, Class A4		1,595,626
650,000	MBNA Credit Card Master Note Trust, 4.10%, 10/15/12, Series 2005-A3, Class A3		663,525
750,000	World Financial Network Credit Card Master Note Trust, 4.60%, 9/15/15, Series 2009-A, Class A		771,646
	Total Asset Backed Securities (cost $3,525,233)		3,669,552
	COLLATERALIZED MORTGAGE OBLIGATIONS 28.7%
409,771	ABN Amro Mortgage Corp., 5.50%, 2/25/18, Series 2003-13, Class A2		412,467
46,690	Banc of America Mortgage Securities, Inc., 4.831343%, 2/25/33, Series 2003-A, Class 3A1^^^		41,406
250,000	Bank of America Commercial Mortgage, Inc., 5.141243%, 11/10/42, Series 2005-1, Class A4^^^		250,859
390,000	Bear Stearns Commerical Mortgage Securities, 4.735%, 9/11/42, Series 2005- PWR9, Class A2		392,061
536,558	Citicorp Mortgage Securities, Inc., 5.50%, 2/25/26, Series 2006-1, Class 5A1		497,111
497,481	Countrywide Home Loans, 4.50%, 8/25/19, Series 2004-J7, Class 2A1		469,401
114,967	Credit Suisse First Boston Mortgage Securities Corp., 4.302%, 7/15/36, Series 2004-C3, Class A3		114,750
955,737	Federal Home Loan Bank, 4.75%, 10/25/10, Class H		989,188
165,138	Federal Home Loan Mortgage Corp., 3.722%, 5/1/31, Series 847292^^^		168,715
58,063	Federal Home Loan Mortgage Corp., 3.954%, 8/1/33, Series 847281^^^		60,222
295,126	Federal Home Loan Mortgage Corp., 4.00%, 12/15/11, Series 2892, Class UJ		298,442
238,780	Federal Home Loan Mortgage Corp., 4.00%, 12/15/13, Series 2584, Class LE		244,537
1,046,520	Federal Home Loan Mortgage Corp., 4.00%, 12/15/16, Series 2672, Class NF,		1,083,067
133,536	Federal Home Loan Mortgage Corp., 4.453%, 12/1/32, Series 847527^^^		136,088
518,818	Federal Home Loan Mortgage Corp., 4.50%, 12/15/13, Series 2717, Class HP		542,727
464,675	Federal Home Loan Mortgage Corp., 4.50%, 12/15/13, Series 2723, Class AT		472,543
173,426	Federal Home Loan Mortgage Corp., 4.50%, 6/15/15, Series 2622, Class PC		176,455
524,693	Federal Home Loan Mortgage Corp., 4.50%, 7/15/15, Series 2864, Class CV		545,242
915,502	Federal Home Loan Mortgage Corp., 4.50%, 12/01/18, Pool G11657		967,097
187,101	Federal Home Loan Mortgage Corp., 5.00%, 12/1/09, Series M80784		189,041
319,235	Federal Home Loan Mortgage Corp., 5.00%, 8/1/12, Series M80984		328,236
265,631	Federal Home Loan Mortgage Corp., 5.00%, 2/15/16, Series 2541, Class JB		269,385
350,150	Federal Home Loan Mortgage Corp., 5.00%, 5/15/16, Series R007, Class AL		360,038
463,153	Federal Home Loan Mortgage Corp., 5.00%, 2/15/23, Series 2960, Class KP		481,885

Principal Amount		Value
$218,588	Federal Home Loan Mortgage Corp., 5.125%, 12/15/13, Series 3137, Class PJ	$	219,801
415,253	Federal Home Loan Mortgage Corp., 5.125%, 6/15/18, Series R016, Class AM		433,550
412,294	Federal Home Loan Mortgage Corp., 5.50%, 10/15/14, Series R014, Class AL		422,020
592,187	Federal Home Loan Mortgage Corp., 5.50%, 5/15/15, Series 2808, Class VA		637,468
2,247,545	Federal Home Loan Mortgage Corp., 5.50%, 12/15/19, Series R010, Class AB		2,344,115
278,974	Federal Home Loan Mortgage Corp., 5.50%, 10/1/25, Series C90925		295,491
629,143	Federal Home Loan Mortgage Corp., 5.50%, 8/1/29, Series C46102		662,796
227,769	Federal Home Loan Mortgage Corp., 5.744%, 11/1/35, Series 1M0010^^^		240,562
560,240	Federal Home Loan Mortgage Corp., 5.875%, 5/15/16, Series R007, Class AC		578,078
733,491	Federal Home Loan Mortgage Corp., 6.00%, 2/15/27, Series 3164, Class NA		753,413
18,209	Federal National Mortgage Assoc., 3.35%, 10/1/32, Series 659657^^^		18,525
325,356	Federal National Mortgage Assoc., 3.728%, 11/1/34, Series 782320^^^		338,251
898,048	Federal National Mortgage Assoc., 3.875%, 1/25/39		921,428
258,146	Federal National Mortgage Assoc., 4.00%, 10/1/10, Series 254955		260,223
743,487	Federal National Mortgage Assoc., 4.00%, 10/25/32, Series 2003-28, Class GA		761,939
379,408	Federal National Mortgage Assoc., 4.013%, 1/1/35, Series 825245^^^		385,112
396,795	Federal National Mortgage Assoc., 4.25%, 9/25/22, Series 2003-17, Class ED		410,641
836,477	Federal National Mortgage Assoc., 4.50%, 1/1/13		860,826
849,070	Federal National Mortgage Assoc., 4.50%, 5/01/19, Series 725445		894,268
842,140	Federal National Mortgage Assoc.., 4.50%, 7/1/19		886,970
630,853	Federal National Mortgage Assoc., 4.50%, 6/25/29		644,610
1,301,800	Federal National Mortgage Assoc., 5.00%, 7/25/23, Series 2005-4, Class VG		1,373,447
250,000	Federal National Mortgage Assoc., 5.50%, 5/25/23, Series 2003-42, Class EK		267,373
207,178	Federal National Mortgage Assoc., 5.50%, 11/25/26, Series 2007-63, Class PA		212,667
276,194	First Horizon Mortgage, Inc., 5.75%, 2/25/33, Series 2002-9, Class 1A3		273,021
988,098	Government National Mortgage Assoc., 3.387%, 6/16/30, Series 2006-19, Class A		1,005,473
559,688	Government National Mortgage Assoc., 4.50%, 1/20/31, Series 2005-38, Class A		577,037
650,000	Government National Mortgage Assoc., 4.658%, 12/16/30, Series 2005-12, Class C		682,958
322,430	Government National Mortgage Assoc., 5.00%, 11/20/28, Series 2004-1, Class TB		324,934
638,387	Government National Mortgage Assoc., 5.00%, 12/20/29, Series 2004-101, Class MA		664,309
900,000	Government National Mortgage Assoc., 5.00%, 5/20/31, Series 2004-19, Class PD		937,321
1,765,444	Government National Mortgage Assoc., 5.00%, 9/16/31, Class A		1,865,438
938,388	Government National Mortgage Assoc., 5.00%, 4/20/33, Series 2009-8, Class LA		983,578
500,000	Government National Mortgage Assoc., 5.00%, 7/20/34, Series 2004-105, Class MC		522,531

83

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments(continued)

Principal Amount		Value
$499,417	Government National Mortgage Assoc., 5.00%, 8/20/39 Pool 004513 Jumbo	$	514,509
106,950	Impac CMB Trust, 0.67625%, 5/25/35, Series 2005-4, Class 1M1^^^		26,016
209,168	LB-UBS Commercial Mortgage Trust, 4.187%, 8/15/29, Series 2004-C6, Class A2		209,199
	Total Collateralized Mortgage Obligations (cost $32,136,489)		32,900,861
	CORPORATE BONDS 26.1%
	Aerospace & Defense 0.2%
250,000	Martin Marietta Corp., 7.375%, 4/15/13		285,609
	Air Freight & Logistics 0.5%
500,000	United Parcel Service, Inc., 3.875%, 4/1/14		524,247
	Automotive Retail 0.3%
300,000	AutoZone, Inc., 5.50%, 11/15/15		318,286
	Biotechnology 0.6%
300,000	Amgen, Inc., 4.00%, 11/18/09		301,579
300,000	Amgen, Inc., 4.85%, 11/18/14		324,558
			626,137
	Cable & Satellite 0.5%
550,000	Comcast Corp., 5.30%, 1/15/14		588,534
	Computer Hardware 0.3%
300,000	Hewlett-Packard Co., 6.50%, 7/1/12		335,361
	Construction & Farm Machinery & Heavy Trucks 0.2%
250,000	John Deere Capital Corp., 4.90%, 9/9/13, MTN		267,325
	Consumer Finance 0.5%
100,000	American Express Co., 4.875%, 7/15/13		103,043
400,000	American Express Credit Corp., 5.875%, 5/2/13 MTN		424,109
			527,152
	Distillers & Vintners 0.5%
504,000	Diageo Capital plc, 7.375%, 1/15/14 (United Kingdom)		584,085
	Diversified Banks 2.9%
500,000	HSBC Capital Funding L.P., 4.61%, 6/27/13 (Jersey, C.I.)^^^		391,798
325,000	HSBC Finance Corp., 6.375%, 10/15/11		344,729
700,000	Royal Bank of Canada, 5.65%, 7/20/11 (Canada)		752,182
500,000	SouthTrust Corp., 5.80%, 6/15/14		508,672
650,000	U.S. Bancorp, 4.20%, 5/15/14		679,245
700,000	Wells Fargo & Co., 0.59188%, 1/24/12^^^		691,958
			3,368,584

Principal Amount		Value
	Diversified Metals & Mining 0.4%
$450,000	Rio Tinto Alcan, Inc., 4.50%, 5/15/13 (Canada)	$	460,734
	Drug Retail 0.9%
550,000	CVS Caremark Corp., 5.75%, 8/15/11		588,021
400,000	Walgreen Co., 4.875%, 8/1/13		431,176
			1,019,197
	Electric Utilities 0.6%
350,000	Energy East Corp., 6.75%, 6/15/12		388,172
300,000	Florida Power & Light Co., 4.85%, 2/1/13		320,353
10,000	Progress Energy, Inc., 7.10%, 3/1/11		10,601
			719,126
	Footwear 0.6%
600,000	Nike, Inc., 5.15%, 10/15/15 MTN		617,247
	Health Care Distributors 0.4%
400,000	Cardinal Health, Inc., 6.75%, 2/15/11		421,986
	Health Care Equipment 0.2%
250,000	Baxter International, Inc., 4.625%, 3/15/15		267,963
	Household Appliances 0.3%
350,000	Whirlpool Corp., 8.00%, 5/1/12		377,791
	Independent Power Producers & Energy Traders 0.2%
250,000	Constellation Energy Grp, Inc., 7.00%, 4/1/12		268,919
	Industrial Conglomerates 2.4%
500,000	3M Co., 4.375%, 8/15/13 MTN		535,363
1,000,000	General Electric Capital Corp., 5.40%, 2/15/17 MTN		996,942
887,000	General Electric Capital Corp., 5.50%, 4/28/11 MTN		932,530
240,000	Tyco International Finance Ltd. S.A., 6.00%, 11/15/13		257,360
			2,722,195
	Industrial Machinery 0.5%
600,000	Parker Hannifin Corp., 4.875%, 2/15/13		625,798
	Integrated Oil & Gas 1.6%
360,000	BP Capital Markets plc, 5.25%, 11/7/13 (United Kingdom)		394,355
500,000	ConocoPhillips, 4.60%, 1/15/15		533,647
750,000	Marathon Oil Canada Corp., 8.375%, 5/1/12 (Canada)		849,163
			1,777,165
	Integrated Telecommunication Services 1.0%
191,619	Ameritech Capital Funding, 9.10%, 6/1/16		220,195
500,000	AT&T Corp., 7.30%, 11/15/11		553,838
300,000	Verizon Communications, 4.375%, 6/1/13		315,553
			1,089,586

84

SEPTEMBER 30, 2009

Principal Amount		Value
	Investment Banking & Brokerage 0.5%
$100,000	Goldman Sachs Group, Inc. (The), 0.5475%, 3/2/10 MTN^^^	$	100,191
500,000	Goldman Sachs Group, Inc. (The), 5.35%, 1/15/16		516,414
			616,605
	Life & Health Insurance 1.0%
500,000	Principal Life Income Funding Trusts, 5.30%, 4/24/13 MTN		512,943
600,000	Prudential Financial, Inc., 6.20%, 1/15/15		634,778
			1,147,721
	Movies & Entertainment 0.2%
250,000	Walt Disney Co. (The), 4.50%, 12/15/13		266,802
	Oil & Gas Exploration & Production 0.3%
300,000	Apache Corp., 6.25%, 4/15/12		330,795
	Other Diversified Financial Services 1.4%
600,000	Bear Stearns Co., LLC (The), 5.70%, 11/15/14		642,654
600,000	JPMorgan Chase & Co., 4.85%, 6/16/11		628,558
260,000	Source One Mortgage Services, Series B, 9.00%, 6/1/12		279,914
			1,551,126
	Personal Products 0.6%
655,000	Avon Products, Inc., 5.625%, 3/1/14		712,184
	Pharmaceuticals 1.2%
600,000	AstraZeneca plc, 5.40%, 9/15/12 (United Kingdom)		657,591
625,000	Pfizer, Inc., 5.35%, 3/15/15		692,067
			1,349,658
	Property & Casualty Insurance 1.3%
435,000	Allstate Corp. (The), 7.50%, 6/15/13		486,489
650,000	Berkshire Hathaway Finance Corp., 4.625%, 10/15/13		687,596
325,000	Progressive Corp. (The), 6.375%, 1/15/12		338,979
			1,513,064
	Railroads 0.7%
300,000	Burlington Northern Santa Fe, 4.30%, 7/1/13		313,023
500,000	Union Pacific Corp., 6.125%, 1/15/12		538,607
			851,630
	Regional Banks 1.1%
800,000	BB&T Corp., 4.75%, 10/1/12		834,367
200,000	Fifth Third Bancorp, 5.45%, 1/15/17		174,210
250,000	Old National Bancorp, 5.00%, 5/20/10 MTN		251,411
			1,259,988

Principal Amount		Value
	Residential REITs 0.2%
$192,000	Equity Residential Operating L.P., 6.625%, 3/15/12	$	204,889
	Soft Drinks 0.6%
600,000	Bottling Group, LLC, 4.625%, 11/15/12		647,018
	Special Purpose Entity 0.2%
244,000	Targeted Return Index Fund, 6.814%, 1/15/12, Series 2002-10*** ^^^		265,169
	Systems Software 0.6%
650,000	Oracle Corp., 4.95%, 4/15/13		703,503
	Utilities 0.6%
600,000	Georgia Power Co., 5.125%, 11/15/12, Series K		649,938
	Total Corporate Bonds (cost $28,498,892)		29,863,117
	MUNICIPAL BONDS 2.4%
550,000	Access Group, Inc., DE, 1.15%, 9/1/37, Series 2002-1, Class A4*** ^^^		526,185
650,000	Arizona State Transportation Board Highway Revenue, 5.00%, 7/1/23		715,007
500,000	Iowa Student Loan Liquidity Corp., 12/1/37, 0.00% G*** ^^^		478,350
600,000	Kentucky Higher Education Student Loan Corp., 6/1/36, 1.746%, Series A-2*** ^^^		574,020
500,000	Richmond, CA Joint Powers Financing Authority Revenue, 8.25%, 7/01/19		504,550
	Total Municipal Bonds (cost $2,803,209)		2,798,112
Shares		Value
	MUTUAL FUNDS 0.6%
	Mutual Funds 0.6%
42,765	Eaton Vance Short Duration Diversified Income Fund*	$	694,076
	Total Mutual Funds (cost $633,077)		694,076
	EXCHANGE TRADED FUNDS 1.3%
14,000	iShares iBoxx Investment Grade Corporate Bond Fund*		1,493,520
	Total Exchange Traded Funds (cost $1,253,951)		1,493,520
Principal Amount		Value
	U.S. GOVERNMENT AGENCY SECURITIES 20.4%
$1,000,000	Federal Farm Credit Bank, 2.25%, 4/24/12	$	1,016,972

85

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Schedule of Investments(continued) SEPTEMBER 30, 2009

Principal Amount		Value
$1,000,000	Federal Farm Credit Bank, 3.85%, 2/11/15	$	1,043,958
650,000	Federal Farm Credit Bank, 4.875%, 4/1/14		713,274
500,000	Federal Farm Credit Bank, 4.875%, 1/17/17		542,562
650,000	Federal Farm Credit Bank, 5.20%, 12/27/12		684,342
1,000,000	Federal Home Loan Bank, 1.00%, 3/22/13		1,001,487
1,000,000	Federal Home Loan Bank, 2.00%, 7/27/12		1,003,591
1,000,000	Federal Home Loan Bank, 2.00%, 9/10/13		1,001,454
1,000,000	Federal Home Loan Bank, 4.875%, 11/15/11, Series RY11		1,080,065
400,000	Federal Home Loan Bank, 5.00%, 12/16/11, Series WE11		433,867
1,550,000	Federal Home Loan Bank, 5.00%, 9/14/12		1,692,595
500,000	Federal Home Loan Bank, 5.375%, 11/20/13		503,579
1,000,000	Federal Home Loan Mortgage Corp., 2.125%, 9/21/12		1,012,746
1,400,000	Federal Home Loan Mortgage Corp., 5.50%, 3/28/16		1,478,291
700,000	Federal Home Loan Mortgage Corp., 5.55%, 10/4/16		746,266
1,000,000	Federal National Mortgage Assoc., 1.45%, 5/12/11		1,005,812
700,000	Federal National Mortgage Assoc., 2.20%, 12/3/12		703,020
900,000	Federal National Mortgage Assoc., 2.375%, 3/23/12		911,477
1,250,000	Federal National Mortgage Assoc., 4.375%, 9/15/12		1,343,846
1,500,000	Federal National Mortgage Assoc., 4.375%, 7/17/13		1,625,253
350,000	Federal National Mortgage Assoc., 4.625%, 10/15/14		382,055
700,000	Federal National Mortgage Assoc., 5.00%, 4/26/17		714,577
600,000	Federal National Mortgage Assoc., 5.24%, 8/7/18		636,857
800,000	Tennessee Valley Authority, 6.00%, 3/15/13, Series C		904,990
1,000,000	Tennessee Valley Authority, 6.25%, 12/15/17, Series E		1,156,651
	Total U.S. Government Agency Securities (cost $22,586,851)		23,339,587
	U.S. TREASURY NOTES 8.5%
5,200,000	U.S. Treasury Note, 3.75%, 11/15/18		5,380,783
4,000,000	U.S. Treasury Note, 4.25%, 8/15/15		4,356,248
	Total U.S. Treasury Notes (cost $9,480,445)		9,737,031
	U.S. TREASURY INFLATION PROTECTED BONDS 4.4%
4,934,400	U.S. Treasury Note, 1.625%, 1/15/18		4,983,744
	Total U.S. Treasury Inflation Protected Bonds (cost $4,935,196)		4,983,744

Shares		Value
	PREFERRED STOCKS 0.6%
	Diversified Banks 0.3%
19,700	CABCO TST For GS CAP 1, 3.25%, 2/15/34, Series GS Pfd.* ^^^	$	295,697
	Investment Banking & Brokerage 0.1%
5,000	Morgan Stanley Cap Tr VI , 6.60%, 2/1/46 Pfd.*		114,250
	Other Diversified Financial Services 0.2%
5,000	Bank of America Corp., Series H, 8.20%, 5/1/13 Pfd.*		116,900
8,000	ING Groep N.V., 7.375% Pfd.* (Netherlands)		132,800
			249,700
	Total Preferred Stocks (cost $906,511)		659,647
Principal Amount		Value
	SHORT-TERM INVESTMENTS 3.0%
	Repurchase Agreement 3.0%
$3,440,000	Repurchase Agreement dated 9/30/09, 0.01% due 10/01/09 with Fixed Income Clearing Corporation collateralized by $3,545,000 of United States Treasury Notes 2.625% due 2/29/16; value: $3,509,550; repurchase proceeds: $3,440,001 (cost $3,440,000)	$	3,440,000
	Total Short-Term Investments (cost $3,440,000)		3,440,000
	Total Investments (cost $110,199,854) 99.2%		113,579,247
	Other Assets less Liabilities 0.8%		917,142
	NET ASSETS 100.0%	$	114,496,389
	*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Directors (see Note 2). ^^^ Variable Rate Securities. MTN Medium Term Note. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2009, Wasatch-1st Source Income Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Canada	1.9
Jersey, C.I.	0.4
Netherlands	0.1
United Kingdom	1.5
United States	96.1
TOTAL	100.0	%

86

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87

WASATCH FUNDS — Statements of Assets and Liabilities

	CORE GROWTH FUND			EMERGING MARKETS SMALL CAP FUND			GLOBAL OPPORTUNITIES FUND1			GLOBAL SCIENCE & TECHNOLOGY FUND
Assets:
Investments, at cost
Unaffiliated issuers	$	363,990,602		$	40,578,186		$	74,902,849		$	46,374,350
Repurchase agreements		20,923,000			1,066,000			15,949,000			7,933,000
	$	384,913,602		$	41,644,186		$	90,851,849		$	54,307,350
Investments, at market value
Unaffiliated issuers	$	391,049,492		$	49,162,857		$	101,755,635		$	52,559,803
Repurchase agreements		20,923,000			1,066,000			15,949,000			7,933,000
		411,972,492			50,228,857			117,704,635			60,492,803
Cash		552			648			1,097			855
Foreign currency on deposit (cost of $27, $10,126, $4,649, $0, $241,140, $0, $32,494, $8,057, and $11, respectively)		29			10,231			4,663			—
Receivable for investment securities sold		—			832,244			611,775			423,585
Capital shares receivable		74,489			227,465			78,454			8,819
Interest and dividends receivable		668,836			44,474			123,057			32,409
Receivable from Investment Advisor		—			16,307			35,378			5,561
Prepaid expenses and other assets		32,264			12,495			28,590			10,599
Unrealized appreciation on foreign currency contracts		—			—			192			—
Total Assets		412,748,662			51,372,721			118,587,841			60,974,631
Liabilities:
Payable for securities purchased		1,439,801			473,702			812,393			1,191,193
Capital shares payable		763,384			19,755			45,432			99,681
Accrued investment advisory fees		332,806			67,570			181,162			72,158
Accrued expenses and other liabilities		263,641			72,024			79,287			71,701
Other payables		—			249,303			84,518			—
Unrealized depreciation on foreign currency contracts		—			995			—			5
Total Liabilities		2,799,632			883,349			1,202,792			1,434,738
Net Assets	$	409,949,030		$	50,489,372		$	117,385,049		$	59,539,893
Net Assets Consist of:
Capital stock	$	158,418		$	321,996		$	347,510		$	53,556
Paid-in capital in excess of par		505,953,096			65,681,850			87,432,697			91,964,772
Undistributed net investment income (loss)		2,481,460			208,395			(352,634	)		(367,611	)
Undistributed net realized gain (loss) on investments and foreign currency translations		(125,702,890	)		(23,911,342	)		3,188,707			(38,297,206	)
Net unrealized appreciation (depreciation) on investments and foreign currency translations		27,058,946			8,188,473			26,768,769			6,186,382
Net Assets	$	409,949,030		$	50,489,372		$	117,385,049		$	59,539,893
Capital Stock, $.01 par value:
Authorized		10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000
Issued and outstanding		15,841,771			32,199,645			34,751,049			5,355,629
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE	$	25.88		$	1.57		$	3.38		$	11.12

¹ Fund inception date was November 17, 2008.

See Notes to Financial Statements.

88

SEPTEMBER 30, 2009

HERITAGE GROWTH FUND			HERITAGE VALUE FUND			INTERNATIONAL GROWTH FUND			INTERNATIONAL OPPORTUNITIES FUND			MICRO CAP FUND
$	66,824,303		$	2,774,242		$	138,069,401		$	61,219,431		$	268,217,101
	1,455,000			360,000			3,546,000			12,273,000			14,428,000
$	68,279,303		$	3,134,242		$	141,615,401		$	73,492,431		$	282,645,101
$	73,712,015		$	3,186,517		$	167,542,112		$	82,185,478		$	259,674,974
	1,455,000			360,000			3,546,000			12,273,000			14,428,000
	75,167,015			3,546,517			171,088,112			94,458,478			274,102,974
	660			518			314			76,269			64,167
	241,140			—			33,337			8,067			10
	2,718,493			22,232			3,220,318			—			142,954
	8,447			—			23,033			60,024			174,905
	80,262			2,532			332,329			166,059			246,524
	14,053			12,483			756			41,781			—
	11,859			11,475			16,428			8,041			21,288
	4,315			—			—			977			—
	78,246,244			3,595,757			174,714,627			94,819,696			274,752,822
	878,188			—			867,988			590,471			1,564,195
	54,663			—			66,078			40,138			96,215
	43,818			2,022			209,116			146,717			432,333
	75,764			36,901			123,791			116,011			122,701
	—			—			210,735			70,405			—
	—			—			11,190			—			—
	1,052,433			38,923			1,488,898			963,742			2,215,444
$	77,193,811		$	3,556,834		$	173,225,729		$	93,855,954		$	272,537,378
$	83,220		$	4,469		$	124,559		$	476,036		$	700,196
	80,269,356			4,528,827			224,623,200			88,542,846			367,225,279
	499,398			26,890			(815,682	)		(726,819	)		(15,825	)
	(10,539,085	)		(1,415,638	)		(79,954,408	)		(15,332,961	)		(86,830,633	)
	6,880,922			412,286			29,248,060			20,896,852			(8,541,639	)
$	77,193,811		$	3,556,834		$	173,225,729		$	93,855,954		$	272,537,378
	10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000
	8,321,993			446,902			12,455,911			47,603,619			70,019,640
$	9.28		$	7.96		$	13.91		$	1.97		$	3.89

89

WASATCH FUNDS — Statements of Assets and Liabilities (continued)

	MICRO CAP VALUE FUND			SMALL CAP GROWTH FUND			SMALL CAP VALUE FUND			STRATEGIC INCOME FUND
Assets:
Investments, at cost
Unaffiliated issuers	$	81,176,111		$	601,830,238		$	200,762,846		$	14,812,629
Affiliated issuers*		—			—			—			—
Repurchase agreements		13,928,000			81,535,000			9,146,000			3,149,000
	$	95,104,111		$	683,365,238		$	209,908,846		$	17,961,629
Investments, at market value
Unaffiliated issuers	$	100,421,759		$	735,915,519		$	209,674,490		$	14,162,755
Affiliated issuers*		—			—			—			—
Repurchase agreements		13,928,000			81,535,000			9,146,000			3,149,000
		114,349,759			817,450,519			218,820,490			17,311,755
Cash		216,806			925			49,264			722
Foreign currency on deposit (cost of $0, $0, $0, $0, $572,242, $0, $0, $0, and $0, respectively)		—			—			—			—
Receivable for investment securities sold		2,715,194			—			521,175			384,212
Receivable from broker for securities sold short		—			—			—			223,868
Capital shares receivable		256,170			1,362,410			33,119			1,000
Interest and dividends receivable		38,892			547,637			171,642			87,181
Receivable from Investment Advisor		6,892			—			—			12,081
Prepaid expenses and other assets		13,477			46,896			14,387			5,643
Unrealized appreciation on foreign currency contracts		92			—			—			406
Total Assets		117,597,282			819,408,387			219,610,077			18,026,868
Liabilities:
Call options written at value (premiums of $0, $0, $0, $20,877, $0, $0, $1,604,392, $0, and $0, respectively)		—			—			—			12,345
Securities sold short, at value (proceeds of $0, $0, $0, $460,105, $0, $0 $20,513,050, $0, and $0, respectively)		—			—			—			87,929
Bank overdraft of foreign currency (cost of $0, $749, $0, $0, $0, $0, $0, $0, and $0, respectively)		—			749			—			—
Payable for securities purchased		2,070,796			8,478,455			697,306			158,088
Capital shares payable		57,127			591,363			134,700			3,355
Dividends payable to shareholders		—			—			—			2,683
Accrued investment advisory fees		176,153			642,735			268,116			10,023
Accrued expenses and other liabilities		76,813			339,521			152,284			42,398
Other payables		—			37,629			—			—
Total Liabilities		2,380,889			10,090,452			1,252,406			316,821
Net Assets	$	115,216,393		$	809,317,935		$	218,357,671		$	17,710,047
Net Assets Consist of:
Capital stock	$	545,839		$	283,098		$	794,347		$	26,153
Paid-in capital in excess of par		128,850,298			747,275,725			364,916,347			27,394,324
Undistributed net investment income (loss)		(218,261	)		(70,280	)		741,563			179,094
Undistributed net realized gain (loss) on investments and foreign currency translations		(33,206,563	)		(72,217,597	)		(157,006,231	)		(9,620,682	)
Net unrealized appreciation (depreciation) on investments and foreign currency translations		19,245,080			134,046,989			8,911,645			(268,842	)
Net Assets	$	115,216,393		$	809,317,935		$	218,357,671		$	17,710,047
Capital Stock, $.01 par value:
Authorized		10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000
Issued and outstanding		54,583,879			28,309,775			79,434,694			2,615,252
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE	$	2.11		$	28.59		$	2.75		$	6.77

* See Note 8 for information on affiliated issuers.

See Notes to Financial Statements.

90

SEPTEMBER 30, 2009

ULTRA GROWTH FUND			INCOME EQUITY FUND			LONG/SHORT FUND			U.S. TREASURY FUND		INCOME FUND
$	95,797,506		$	1,214,385,180		$	101,977,357		$	143,459,574	$	106,759,854
	—			—			—			—		—
	2,745,000			80,694,000			31,385,000			879,000		3,440,000
$	98,542,506		$	1,295,079,180		$	133,362,357		$	144,338,574	$	110,199,854
$	118,782,723		$	1,315,207,930		$	119,462,349		$	152,803,826	$	110,139,247
	—			—			—			—		—
	2,745,000			80,694,000			31,385,000			879,000		3,440,000
	121,527,723			1,395,901,930			150,847,349			153,682,826		113,579,247
	140			835			694			382		528
	570,636			—			—			—		—
	—			—			4,178,848			—		—
	—			—			19,495,698			—		—
	349,020			2,748,068			318,389			173,115		148,102
	58,241			2,087,593			89,564			683,094		934,626
	—			77,666			—			6,167		—
	13,321			151,073			20,446			24,283		19,464
	—			—			—			—		—
	122,519,081			1,400,967,165			174,950,988			154,569,867		114,681,967
	—			—			1,542,120			—		—
	—			—			22,336,323			—		—
	—			—			—			—		—
	914,361			12,101,236			4,684,615			—		—
	93,698			1,484,266			41,873			240,264		27,584
	—			385,917			—			91,459		45,366
	121,597			1,010,309			127,956			61,452		51,014
	105,189			477,721			73,917			78,147		61,614
	—			—			17,200			—		—
	1,234,845			15,459,449			28,824,004			471,322		185,578
$	121,284,236		$	1,385,507,716		$	146,126,984		$	154,098,545	$	114,496,389
$	77,472		$	1,157,184		$	131,344		$	94,600	$	114,087
	150,364,570			1,381,679,781			147,855,873			140,068,622		114,997,475
	(398,577	)		123,618			97,087			14,138		(13,055	)
	(51,744,558	)		(98,275,928	)		(17,681,310	)		4,576,933		(3,981,511	)
	22,985,329			100,823,061			15,723,990			9,344,252		3,379,393
$	121,284,236		$	1,385,507,716		$	146,126,984		$	154,098,545	$	114,496,389
	10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000		10,000,000,000
	7,747,173			115,718,389			13,134,390			9,459,968		11,408,671
$	15.66		$	11.97		$	11.13		$	16.29	$	10.04

91

WASATCH FUNDS — Statements of Operations

	CORE GROWTH FUND			EMERGING MARKETS SMALL CAP FUND			GLOBAL OPPORTUNITIES FUND1			GLOBAL SCIENCE & TECHNOLOGY FUND
Investment Income:
Interest	$	6,348		$	504		$	1,967		$	1,067
Dividends2
Unaffiliated issuers		6,345,959			592,731			744,035			546,213
Affiliated issuers*		—			—			—			—
Total investment income		6,352,307			593,235			746,002			547,280
Expenses:
Investment advisory fees		4,033,387			467,257			921,286			766,275
Shareholder servicing fees		707,839			108,844			65,865			164,044
Fund administration fees		159,371			10,009			16,791			20,100
Fund accounting fees		106,067			29,913			45,871			29,642
Reports to shareholders		137,529			14,865			49,272			33,398
Custody fees		44,880			118,648			71,693			9,142
Federal and state registration fees		31,380			22,965			20,946			19,493
Legal fees		37,296			2,197			3,066			4,319
Directors’ fees		36,304			1,929			1,627			5,065
Audit fees		21,881			18,677			21,875			20,681
Interest		9,234			720			437			1,164
Other		78,570			12,556			16,109			20,845
Total expenses before reimbursement		5,403,738			808,580			1,234,838			1,094,168
Reimbursement of expenses by Advisor		—			(247,151	)		(171,380	)		(96,846	)
Net Expenses		5,403,738			561,429			1,063,458			997,322
Net Investment Income (Loss)		948,569			31,806			(317,456	)		(450,042	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments and foreign currency translations
Unaffiliated issuers		(113,256,495	)		(19,394,560	)		3,160,266			(31,796,292	)
Affiliated issuers*		—			—			—			—
Net realized gain on options written		—			—			—			—
Realized foreign capital gains taxes		—			142,312			(7,109	)		—
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		63,460,370			25,567,423			26,853,287			29,182,459
Deferred foreign capital gains taxes		—			(395,368	)		(84,518	)		—
Net gain (loss) on investments		(49,796,125	)		5,919,807			29,921,926			(2,613,833	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(48,847,556	)	$	5,951,613		$	29,604,470		$	(3,063,875	)

¹ Fund inception date was November 17, 2008.

² Net of $105,474, $39,785, $39,322, $32,997, $9,367, $2,371, $197,326, $86,992 and $61,969 in foreign withholding taxes, respectively.

* See Note 8 for information on affiliated issuers.

See Notes to Financial Statements.

92

FOR THE YEAR OR PERIOD ENDED SEPTEMBER 30, 2009

HERITAGE GROWTH FUND			HERITAGE VALUE FUND			INTERNATIONAL GROWTH FUND			INTERNATIONAL OPPORTUNITIES FUND			MICRO CAP FUND
$	581		$	177		$	665		$	2,067		$	3,350
	1,117,349			67,586			2,560,298			1,165,751			2,894,323
	—			—			—			—			30,371
	1,117,930			67,763			2,560,963			1,167,818			2,928,044
	463,546			22,162			1,954,312			1,160,742			4,511,273
	176,193			24,528			254,806			228,307			253,263
	26,118			1,250			50,574			22,366			90,101
	27,238			11,159			52,743			39,252			67,970
	28,068			20,440			45,958			64,368			49,929
	13,094			587			58,851			66,171			28,771
	16,020			17,950			23,580			20,852			21,788
	6,104			8			10,157			5,167			23,451
	5,703			130			12,619			3,331			19,794
	20,682			20,681			20,681			20,681			20,681
	1,161			47			4,405			3,583			3,500
	19,061			10,452			35,387			14,962			41,623
	802,988			129,394			2,524,073			1,649,782			5,132,144
	(172,728	)		(99,269	)		—			(315,306	)		—
	630,260			30,125			2,524,073			1,334,476			5,132,144
	487,670			37,638			36,890			(166,658	)		(2,204,100	)
	(10,184,195	)		(1,301,734	)		(54,639,494	)		(11,908,883	)		(66,419,003	)
	—			—			—			—			(4,058,938	)
	100,213			358,188			—			—			—
	—			—			17,660			(61,480	)		—
	7,714,994			831,023			66,502,437			33,815,147			35,754,956
	—			—			(228,394	)		(70,405	)		—
	(2,368,988	)		(112,523	)		11,652,209			21,774,379			(34,722,985	)
$	(1,881,318	)	$	(74,885	)	$	11,689,099		$	21,607,721		$	(36,927,085	)

93

WASATCH FUNDS — Statements of Operations (continued)

	MICRO CAP VALUE FUND			SMALL CAP GROWTH FUND			SMALL CAP VALUE FUND			STRATEGIC INCOME FUND
Investment Income:
Interest	$	1,104		$	11,146		$	2,825		$	78,619
Dividends1
Unaffiliated issuers		624,895			4,051,143			2,960,891			862,788
Affiliated issuers*		—			—			35,851			—
Other		—			—			—			—
Total investment income		625,999			4,062,289			2,999,567			941,407
Expenses:
Investment advisory fees		1,366,361			5,843,261			2,837,646			110,039
Shareholder servicing fees		144,534			806,346			405,895			42,824
Distribution Fees		—			—			—			—
Fund administration fees		26,572			226,568			74,623			6,208
Fund accounting fees		31,459			148,425			57,185			16,097
Reports to shareholders		30,040			216,967			98,168			18,432
Custody fees		28,568			60,170			25,845			4,812
Federal and state registration fees		26,118			46,125			24,133			16,067
Legal fees		6,296			53,957			19,511			1,592
Directors’ fees		5,137			43,563			17,569			1,163
Audit fees		20,681			20,682			20,681			21,881
Dividends on securities sold short		6,885			—			—			4,792
Interest		955			9,740			3,286			11,808
Other		16,880			71,705			39,816			13,375
Total expenses before reimbursement		1,710,486			7,547,509			3,624,358			269,090
Reimbursement of expenses by Advisor		(138,226	)		—			—			(103,152	)
Distribution fees waived		—			—			—			—
Net Expenses		1,572,260			7,547,509			3,624,358			165,938
Net Investment Income (Loss)		(946,261	)		(3,485,220	)		(624,791	)		775,469
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments and foreign currency translations
Unaffiliated issuers		(22,748,259	)		(66,580,850	)		(109,704,992	)		(7,385,813	)
Affiliated issuers*		—			—			(6,809,925	)		—
Net realized gain on options written		1,864,290			—			908,649			126,196
Net realized gain (loss) on short positions		(106,661	)		—			—			(86,106	)
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		30,662,023			108,484,502			73,490,647			4,615,332
Deferred foreign capital gains taxes		—			(37,629	)		—			—
Net gain (loss) on investments		9,671,393			41,866,023			(42,115,621	)		(2,730,391	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	8,725,132		$	38,380,803		$	(42,740,412	)	$	(1,954,922	)

¹ Net of $24,204, $102,677, $477, $7,228, $6,645, $302,677, $56.862, $0 and $553 in foreign withholding taxes, respectively.

* See Note 8 for information on affiliated issuers.

See Notes to Financial Statements.

94

FOR THE YEAR ENDED SEPTEMBER 30, 2009

ULTRA GROWTH FUND			INCOME EQUITY FUND			LONG/SHORT FUND			U.S. TREASURY FUND			INCOME FUND
$	2,306		$	165,237		$	8,851		$	6,165,681		$	3,927,332
	617,369			30,017,595			2,286,611			—			213,044
	—			—			—			—			—
	—			—			—			1,644			—
	619,675			30,182,832			2,295,462			6,167,325			4,140,376
	1,230,078			8,806,964			1,175,545			753,953			538,118
	260,681			1,282,146			147,778			187,731			50,401
	—			361,149			50,140			—			44,486
	38,455			540,966			63,125			60,389			58,412
	37,457			240,549			34,516			38,718			52,767
	64,965			414,878			48,986			33,117			42,360
	22,779			32,394			17,799			4,022			11,476
	19,792			156,842			38,691			44,786			23,972
	8,871			85,501			8,749			16,664			7,151
	8,396			44,628			5,176			10,452			4,808
	20,681			4,312			17,826			20,681			17,743
	—			—			402,712			—			—
	1,958			6,338			61,691			—			—
	23,774			135,389			18,498			13,837			13,988
	1,737,887			12,112,056			2,091,232			1,184,350			865,682
	(13,821	)		(787,715	)		—			(53,419	)		—
	—			(361,149	)		(50,140	)		—			(44,486	)
	1,724,066			10,963,192			2,041,092			1,130,931			821,196
	(1,104,391	)		19,219,640			254,370			5,036,394			3,319,180
	(48,814,746	)		(96,935,144	)		(21,773,280	)		9,178,548			(214,026	)
	—			—			—			—			—
	—			—			1,315,878			—			—
	497,763			—			4,989,019			—			—
	41,929,072			140,074,504			21,481,141			2,499,959			4,892,799
	—			—			—			—			—
	(6,387,911	)		43,139,360			6,012,758			11,678,507			4,678,773
$	(7,492,302	)	$	62,359,000		$	6,267,128		$	16,714,901		$	7,997,953

95

WASATCH FUNDS — Statements of Changes in Net Assets

	CORE GROWTH FUND						EMERGING MARKETS SMALL CAP FUND
	Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008
Operations:
Net investment income (loss)	$	948,569		$	4,856,128		$	31,806		$	127,023
Net realized gain (loss) on investments and foreign currency translations		(113,256,495	)		12,903,463			(19,252,248	)		(4,510,609	)
Net realized gain on options written		—			65,169			—			—
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		63,460,370			(267,260,766	)		25,172,055			(16,983,582	)
Net increase (decrease) in net assets resulting from operations		(48,847,556	)		(249,436,006	)		5,951,613			(21,367,168	)
Dividends paid from:
Net investment income		(5,739,872	)		—			(29,720	)		(99,236	)
Net realized gains		—			(205,306,297	)		—			—
		(5,739,872	)		(205,306,297	)		(29,720	)		(99,236	)
Capital share transactions:
Shares sold		42,144,413			75,441,442			28,161,403			75,870,364
Shares issued to holders in reinvestment of dividends		5,588,262			196,357,419			28,998			97,575
Shares redeemed		(229,016,912	)		(421,955,118	)		(19,915,682	)		(18,336,592	)
Redemption fees		51,587			49,702			116,524			11,293
Net increase (decrease)		(181,232,650	)		(150,106,555	)		8,391,243			57,642,640
Total increase (decrease) in net assets		(235,820,078	)		(604,848,858	)		14,313,136			36,176,236
Net assets:
Beginning of period		645,769,108			1,250,617,966			36,176,236			—
End of period	$	409,949,030		$	645,769,108		$	50,489,372		$	36,176,236
Undistributed net investment income (loss) included in net assets at end of period	$	2,481,460		$	1,509,194		$	208,395		$	29,714
Capital share transactions — shares:
Shares sold		2,140,091			2,304,714			23,140,526			40,105,645
Shares issued to holders in reinvestment of dividends		301,417			5,657,085			34,937			50,039
Shares redeemed		(11,075,467	)		(12,581,815	)		(20,231,688	)		(10,899,814	)
Net increase (decrease) in shares outstanding		(8,633,959	)		(4,620,016	)		2,943,775			29,255,870

¹ Fund inception date was November 17, 2008.

See Notes to Financial Statements.

96

SEPTEMBER 30, 2009

GLOBAL OPPORTUNITIES FUND			GLOBAL SCIENCE & TECHNOLOGY FUND						HERITAGE GROWTH FUND
Period Ended September 30, 20091			Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008
$	(317,456	)	$	(450,042	)	$	(1,853,536	)	$	487,670		$	618,086
	3,153,157			(31,796,292	)		(3,525,493	)		(10,184,195	)		2,923,875
	—			—			35,850			100,213			187,516
	26,768,769			29,182,459			(60,039,104	)		7,714,994			(36,207,407	)
	29,604,470			(3,063,875	)		(65,382,283	)		(1,881,318	)		(32,477,930	)
	—			—			—			(167,143	)		—
	—			—			(17,434,195	)		(220,964	)		(14,407,067	)
	—			—			(17,434,195	)		(388,107	)		(14,407,067	)
	90,898,578			5,166,479			35,585,007			7,087,524			7,026,838
	—			—			16,802,106			374,358			14,080,421
	(3,124,823	)		(24,729,028	)		(91,579,559	)		(23,413,598	)		(87,728,948	)
	6,824			2,298			30,453			915			2,612
	87,780,579			(19,560,251	)		(39,161,993	)		(15,950,801	)		(66,619,077	)
	117,385,049			(22,624,126	)		(121,978,471	)		(18,220,226	)		(113,504,074	)
	—			82,164,019			204,142,490			95,414,037			208,918,111
$	117,385,049		$	59,539,893		$	82,164,019		$	77,193,811		$	95,414,037
$	(352,634	)	$	(367,611	)	$	(656,537	)	$	499,398		$	164,107
	35,880,124			593,548			2,381,520			933,157			643,479
	—			—			1,098,177			55,297			1,267,365
	(1,129,075	)		(3,209,651	)		(7,049,819	)		(3,266,118	)		(7,926,581	)
	34,751,049			(2,616,103	)		(3,570,122	)		(2,277,664	)		(6,015,737	)

97

WASATCH FUNDS — Statements of Changes in Net Assets (continued)

	HERITAGE VALUE FUND						INTERNATIONAL GROWTH FUND
	Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008
Operations:
Net investment income (loss)	$	37,638		$	53,508		$	36,890		$	(578,642	)
Net realized gain (loss) on investments and foreign currency translations		(1,301,734	)		(776,364	)		(54,621,834	)		(6,811,237	)
Net realized gain on options written		358,188			316,005			—			—
Net realized gain (loss) on short positions		—			(986	)		—			—
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		831,023			(461,738	)		66,274,043			(185,431,901	)
Net increase (decrease) in net assets resulting from operations		(74,885	)		(869,575	)		11,689,099			(192,821,780	)
Dividends paid from:
Net investment income		(47,255	)		(40,797	)		(466,090	)		(14,999,689	)
Net realized gains		—			(15,127	)		—			(53,899,506	)
		(47,255	)		(55,924	)		(466,090	)		(68,899,195	)
Capital share transactions:
Shares sold		894,306			3,275,032			23,024,110			56,044,771
Shares issued to holders in reinvestment of dividends		43,764			55,698			447,546			67,297,473
Shares redeemed		(1,051,758	)		(1,046,240	)		(56,255,429	)		(201,780,070	)
Redemption fees		496			791			6,574			36,035
Net increase (decrease)		(113,192	)		2,285,281			(32,777,199	)		(78,401,791	)
Total increase (decrease) in net assets		(235,332	)		1,359,782			(21,554,190	)		(340,122,766	)
Net assets:
Beginning of period		3,792,166			2,432,384			194,779,919			534,902,685
End of period	$	3,556,834		$	3,792,166		$	173,225,729		$	194,779,919
Undistributed net investment income (loss) included in net assets at end of period	$	26,890		$	33,894		$	(815,682	)	$	(6,497,413	)
Capital share transactions — shares:
Shares sold		132,854			334,711			2,074,040			2,743,933
Shares issued to holders in reinvestment of dividends		6,723			5,678			50,513			3,356,483
Shares redeemed		(156,260	)		(114,532	)		(6,128,701	)		(11,547,140	)
Net increase (decrease) in shares outstanding		(16,683	)		225,857			(4,004,148	)		(5,446,724	)

See Notes to Financial Statements.

98

SEPTEMBER 30, 2009

INTERNATIONAL OPPORTUNITIES FUND						MICRO CAP FUND						MICRO CAP VALUE FUND
Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008
$	(166,658	)	$	(48,164	)	$	(2,204,100	)	$	(6,107,945	)	$	(946,261	)	$	(1,351,039	)
	(11,970,363	)		(761,977	)		(70,477,941	)		4,651,383			(22,748,259	)		(12,006,387	)
	—			21,037			—			—			1,864,290			2,052,817
	—			112,630			—			—			(106,661	)		605,545
	33,744,742			(29,949,193	)		35,754,956			(173,381,475	)		30,662,023			(29,171,790	)
	21,607,721			(30,625,667	)		(36,927,085	)		(174,838,037	)		8,725,132			(39,870,854	)
	(168,034	)		(2,089,316	)		(777,904	)		—			—			—
	—			(8,029,593	)		—			(98,389,979	)		—			(16,429,060	)
	(168,034	)		(10,118,909	)		(777,904	)		(98,389,979	)		—			(16,429,060	)
	31,749,891			41,682,055			20,400,999			16,149,674			37,751,896			46,417,131
	163,313			9,911,885			743,955			94,126,664			—			16,104,543
	(15,224,838	)		(11,598,986	)		(70,303,414	)		(109,078,570	)		(29,184,165	)		(28,353,838	)
	37,390			6,956			7,314			6,533			11,986			4,193
	16,725,756			40,001,910			(49,151,146	)		1,204,301			8,579,717			34,172,029
	38,165,443			(742,666	)		(86,856,135	)		(272,023,715	)		17,304,849			(22,127,885	)
	55,690,511			56,433,177			359,393,513			631,417,228			97,911,544			120,039,429
$	93,855,954		$	55,690,511		$	272,537,378		$	359,393,513		$	115,216,393		$	97,911,544
$	(726,819	)	$	(1,759,002	)	$	(15,825	)	$	(332,765	)	$	(218,261	)	$	(153,784	)
	24,187,957			21,166,986			6,736,914			3,153,341			21,422,418			20,583,227
	133,863			3,604,322			265,698			16,778,372			—			6,493,767
	(11,518,529	)		(5,453,107	)		(23,747,004	)		(20,943,978	)		(21,193,792	)		(12,980,831	)
	12,803,291			19,318,201			(16,744,392	)		(1,012,265	)		228,626			14,096,163

99

WASATCH FUNDS — Statements of Changes in Net Assets (continued)

	SMALL CAP GROWTH FUND						SMALL CAP VALUE FUND
	Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008
Operations:
Net investment income (loss)	$	(3,485,220	)	$	(4,329,573	)	$	(624,791	)	$	694,357
Net realized gain (loss) on investments and foreign currency translations		(66,580,850	)		10,759,204			(116,514,917	)		(26,463,524	)
Net realized gain on options written		—			—			908,649			1,264,596
Net realized gain (loss) on short positions		—			(847,296	)		—			862,688
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		108,446,873			(265,175,462	)		73,490,647			(116,642,157	)
Net increase (decrease) in net assets resulting from operations		38,380,803			(259,593,127	)		(42,740,412	)		(140,284,040	)
Dividends paid from:
Net investment income		—			—			—			(1,304,069	)
Net realized gains		(1,539,215	)		(120,648,854	)		—			(141,790,472	)
		(1,539,215	)		(120,648,854	)		—			(143,094,541	)
Capital share transactions:
Shares sold		230,991,699			154,963,117			32,790,353			66,338,622
Shares issued to holders in reinvestment of dividends		1,498,523			117,697,647			—			137,074,565
Shares redeemed		(195,651,102	)		(232,359,422	)		(108,614,115	)		(243,774,324	)
Redemption fees		91,021			53,796			7,697			16,798
Net increase (decrease)		36,930,141			40,355,138			(75,816,065	)		(40,344,339	)
Total increase (decrease) in net assets		73,771,729			(339,886,843	)		(118,556,477	)		(323,722,920	)
Net assets:
Beginning of period		735,546,206			1,075,433,049			336,914,148			660,637,068
End of period	$	809,317,935		$	735,546,206		$	218,357,671		$	336,914,148
Undistributed net investment income (loss) included in net assets at end of period	$	(70,280	)	$	(205,808	)	$	741,563		$	(574,907	)
Capital share transactions — shares:
Shares sold		9,654,965			4,910,006			15,948,161			18,735,565
Shares issued to holders in reinvestment of dividends		73,746			3,294,085			—			38,504,091
Shares redeemed		(9,177,145	)		(7,263,863	)		(56,145,733	)		(64,253,288	)
Net increase (decrease) in shares outstanding		551,566			940,228			(40,197,572	)		(7,013,632	)

¹ Effective September 19, 2008, the Funds changed their fiscal year end to September 30.

See Notes to Financial Statements.

100

SEPTEMBER 30, 2009

STRATEGIC INCOME FUND						ULTRA GROWTH FUND						INCOME EQUITY FUND
Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008			Year Ended September 30, 2009			Period Ended September 30, 20081			Year Ended March 31, 2008
$	775,469		$	1,229,319		$	(1,104,391	)	$	(1,971,029	)	$	19,219,640		$	6,391,793		$	4,434,682
	(7,385,813	)		(3,227,582	)		(48,814,746	)		5,945,886			(96,935,144	)		7,518			11,649,240
	126,196			387,076			—			274,600			—			—			—
	(86,106	)		1,439,965			497,763			(414,078	)		—			—			—
	4,615,332			(4,016,554	)		41,929,072			(87,629,925	)		140,074,504			(89,835,019	)		14,606,996
	(1,954,922	)		(4,187,776	)		(7,492,302	)		(83,794,546	)		62,359,000			(83,435,708	)		30,690,918
	(784,968	)		(1,057,146	)		—			—			(19,218,020	)		(6,175,815	)		(4,351,594	)
	—			(2,217,011	)		—			(32,302,048	)		—			—			(14,377,983	)
	(784,968	)		(3,274,157	)		—			(32,302,048	)		(19,218,020	)		(6,175,815	)		(18,729,577	)
	1,068,106			11,271,913			12,125,756			23,567,676			874,385,368			493,306,878			316,064,382
	767,924			3,204,301			—			31,508,337			17,197,096			5,067,853			11,089,981
	(3,276,167	)		(8,749,445	)		(27,365,051	)		(63,614,008	)		(329,662,507	)		(76,053,584	)		(59,294,127	)
	894			3,128			12,255			5,057			62,658			—			—
	(1,439,243	)		5,729,897			(15,227,040	)		(8,532,938	)		561,982,615			422,321,147			268,580,236
	(4,179,133	)		(1,732,036	)		(22,719,342	)		(124,629,532	)		605,123,595			332,709,624			280,541,577
	21,889,180			23,621,216			144,003,578			268,633,110			780,384,121			447,674,497			167,132,920
$	17,710,047		$	21,889,180		$	121,284,236		$	144,003,578		$	1,385,507,716		$	780,384,121		$	447,674,497
$	179,094		$	84,045		$	(398,577	)	$	(19,428	)	$	123,618		$	542,260		$	214,043
	174,614			1,304,234			995,533			1,068,307			85,935,790			34,354,765			22,808,982
	136,331			347,534			—			1,297,708			1,663,444			359,009			764,998
	(567,847	)		(926,251	)		(2,387,038	)		(2,896,081	)		(32,224,101	)		(5,377,107	)		(3,863,365	)
	(256,902	)		725,517			(1,391,505	)		(530,066	)		55,375,133			29,336,667			19,710,615

101

WASATCH FUNDS — Statements of Changes in Net Assets (continued)

	LONG/SHORT FUND									U.S. TREASURY FUND
	Year Ended September 30, 2009			Period Ended September 30, 20081			Year Ended March 31, 2008			Year Ended September 30, 2009			Year Ended September 30, 2008
Operations:
Net investment income	$	254,370		$	506,511		$	1,651,685		$	5,036,394		$	4,603,385
Net realized gain (loss) on investments and foreign currency translations		(21,773,280	)		(1,639,401	)		2,088,860			9,178,548			2,091,586
Net realized gain on options written		1,315,878			—			—			—			—
Net realized gain on short positions		4,989,019			—			—			—			—
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		21,481,141			(4,654,306	)		(3,078,118	)		2,499,959			6,237,874
Net increase (decrease) in net assets resulting from operations		6,267,128			(5,787,196	)		662,427			16,714,901			12,932,845
Dividends paid from:
Net investment income		(556,325	)		(478,605	)		(1,739,672	)		(5,022,309	)		(4,603,049	)
Net realized gains		(1,579,189	)		—			(2,150,358	)		—			—
		(2,135,514	)		(478,605	)		(3,890,030	)		(5,022,309	)		(4,603,049	)
Capital share transactions:
Shares sold		76,153,872			51,821,912			45,416,712			148,148,779			78,165,995
Shares issued to holders in reinvestment of dividends		1,826,247			397,821			3,335,062			4,584,510			4,167,049
Shares redeemed		(58,109,974	)		(11,249,918	)		(12,008,607	)		(132,178,263	)		(85,104,785	)
Redemption fees		11,260			—			—			431,042			73,908
Net increase (decrease)		19,881,405			40,969,815			36,743,167			20,986,068			(2,697,833	)
Total increase in net assets		24,013,019			34,704,014			33,515,564			32,678,660			5,631,963
Net assets:
Beginning of period		122,113,965			87,409,951			53,894,387			121,419,885			115,787,922
End of period	$	146,126,984		$	122,113,965		$	87,409,951		$	154,098,545		$	121,419,885
Undistributed net investment income (loss) included in net assets at end of period	$	97,087		$	241,168		$	148,570		$	14,138		$	53
Capital share transactions — shares:
Shares sold		7,924,340			4,496,374			3,843,979			8,980,714			5,302,453
Shares issued to holders in reinvestment of dividends		209,877			33,910			283,537			266,951			282,613
Shares redeemed		(6,298,177	)		(987,313	)		(1,022,364	)		(7,910,125	)		(5,828,618	)
Net increase (decrease) in shares outstanding		1,836,040			3,542,971			3,105,152			1,337,540			(243,552	)

¹ Effective September 19, 2008, the Funds changed their fiscal year end to September 30.

See Notes to Financial Statements.

102

SEPTEMBER 30, 2009

INCOME FUND
Year Ended September 30, 2009			Period Ended September 30, 20081			Year Ended March 31, 2008
$	3,368,363		$	1,665,562		$	3,279,389
	(263,209	)		(247,963	)		199,120
	—			—			—
	—			—			—
	4,892,799			(2,942,965	)		1,864,138
	7,997,953			(1,525,366	)		5,360,647
	(3,433,282	)		(1,804,021	)		(3,486,230	)
	—			—			—
	(3,433,282	)		(1,804,021	)		(3,486,230	)
	50,831,732			16,839,954			28,822,272
	2,876,487			1,514,366			2,914,811
	(32,859,256	)		(12,925,350	)		(25,551,179	)
	1,844			—			—
	20,850,807			5,428,970			6,185,904
	25,415,478			2,099,583			8,060,321
	89,080,911			86,981,328			79,821,007
$	114,496,389		$	89,080,911		$	86,981,328
$	(13,055	)	$	74,375		$	69,971
	5,205,427			1,717,846			2,940,070
	294,467			155,705			299,140
	(3,381,592	)		(1,324,409	)		(2,613,037	)
	2,118,302			549,142			626,173

103

WASATCH FUNDS — Financial Highlights

CORE GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	26.38		$	42.98		$	41.08		$	43.92		$	38.49
Income (loss) from investment operations:
Net investment income (loss)		—	1		0.19			(0.05	)		0.17			0.56
Net realized and unrealized gains (losses) on investments		(0.23	)		(8.98	)		5.65			0.90			6.41
Total from investment operations		(0.23	)		(8.79	)		5.60			1.07			6.97
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.27	)		—			(0.14	)		(0.63	)		(0.22	)
Distributions from net realized gains		—			(7.81	)		(3.56	)		(3.28	)		(1.32	)
Total distributions		(0.27	)		(7.81	)		(3.70	)		(3.91	)		(1.54	)
Net asset value, end of period	$	25.88		$	26.38		$	42.98		$	41.08		$	43.92
Total return		(.45)%			(24.82)%			14.28%			2.46%			18.58%	2
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	409,949		$	645,769		$	1,250,618		$	1,381,027		$	1,704,690
Ratio of expenses to average net assets		1.34%			1.21%			1.18%			1.17%			1.20%
Ratio of net investment income (loss) to average net assets		0.24%			0.52%			(0.09)%			0.38%			1.30%
Portfolio turnover rate		30%			44%			54%			42%			42%
EMERGING MARKETS SMALL CAP FUND	Year Ended September 30			Period Ended September 30
(for a share outstanding throughout each period)	2009			20083
Net asset value, beginning of period	$	1.24		$	2.00
Income (loss) from investment operations:
Net investment income		—	1		—	1
Net realized and unrealized gains (losses) on investments		0.33			(0.76	)
Total from investment operations		0.33			(0.76	)
Redemption fees (see Note 2)		—	1		—	1
Total distributions		—	1		—	1
Net asset value, end of period	$	1.57		$	1.24
Total return		26.80%			(37.88)%	4
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	50,489		$	36,176
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.10%			2.10%	5
Before waivers and reimbursements		3.03%			2.67%	5
Ratio of net investment income (loss) to average net assets:
Net of waivers and reimbursements		0.12%			0.27%	5
Before waivers and reimbursements		(0.81)%			(0.29)%	5
Portfolio turnover rate		78%			38%	4

¹ Represents amounts less than $.005 per share.

² In 2005, 0.03% of the Fund’s total return consisted of a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Funds’ cross-trading policies. Excluding this item, the total return would have been 18.55%.

³ Fund inception date was October 1, 2007.

⁴ Not annualized for periods less than one year.

⁵ Annualized.

See Notes to Financial Statements.

104

SEPTEMBER 30, 2009

GLOBAL OPPORTUNITIES FUND	Period Ended September 30
(for a share outstanding throughout each period)	20091
Net asset value, beginning of period	$	2.00
Income (loss) from investment operations:
Net investment loss		(0.01	)
Net realized and unrealized gains on investments		1.39
Total from investment operations		1.38
Redemption fees (see Note 2)		—	2
Total distributions		—
Net asset value, end of period	$	3.38
Total return		69.00%	3
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	117,385
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.25%	4
Before waivers and reimbursements		2.61%	4
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(0.67)%	4
Before waivers and reimbursements		(1.03)%	4
Portfolio turnover rate		22%	3
GLOBAL SCIENCE & TECHNOLOGY FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	10.31		$	17.69		$	13.97		$	12.98		$	10.15
Income (loss) from investment operations:
Net investment loss		(0.12	)		(0.25	)		(0.12	)		(0.14	)		(0.16	)
Net realized and unrealized gains (losses) on investments		0.93			(5.65	)		4.43			1.40			2.99
Net increase from payment by affiliate		—			—			—			—			—	2
Total from investment operations		0.81			(5.90	)		4.31			1.26			2.83
Redemption fees (see Note 2)		—	2		—	2		—	2		—	2		—	2
Less distributions:
Distributions from net realized gains		—			(1.48	)		(0.59	)		(0.27	)		—
Total distributions		—			(1.48	)		(0.59	)		(0.27	)		—
Net asset value, end of period	$	11.12		$	10.31		$	17.69		$	13.97		$	12.98
Total return		7.86%			(36.07)%			31.63%			9.81%			27.88%	5
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	59,540		$	82,164		$	204,142		$	126,359		$	89,353
Ratio of expenses to average net assets:
Net of waivers and reimbursements		1.95%			1.92%			1.85%			1.94%			1.95%
Before waivers and reimbursements		2.14%			1.92%			1.85%			1.94%			1.97%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(0.88)%			(1.24)%			(0.97)%			(1.15)%			(1.52)%
Before waivers and reimbursements		(1.07)%			(1.24)%			(0.97)%			(1.15)%			(1.54)%
Portfolio turnover rate		41%			89%			78%			58%			80%

¹ Fund inception date was November 17, 2008.

² Represents amounts less than $.005 per share.

³ Not annualized for periods less than one year.

⁴ Annualized.

⁵ In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Funds’ cross-trading policies that had no impact on the total return.

See Notes to Financial Statements.

105

WASATCH FUNDS — Financial Highlights (continued)

HERITAGE GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	9.00		$	12.57		$	11.40		$	11.43		$	9.86
Income (loss) from investment operations:
Net investment income (loss)		0.06			0.06			(0.01	)		—	1		0.02
Net realized and unrealized gains (losses) on investments		0.26			(2.57	)		1.53			0.28			1.55
Net increase from payment by affiliate		—			—			—			—			—	1
Total from investment operations		0.32			(2.51	)		1.52			0.28			1.57
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.02	)		—			—	1		(0.01	)		—
Distributions from net realized gains		(0.02	)		(1.06	)		(0.35	)		(0.30	)		—	1
Total distributions		(0.04	)		(1.06	)		(0.35	)		(0.31	)		—
Net asset value, end of period	$	9.28		$	9.00		$	12.57		$	11.40		$	11.43
Total return		3.74%			(21.54)%			13.59%			2.46%			15.95%	2
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	77,194		$	95,414		$	208,918		$	244,380		$	304,670
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.95%			0.95%			0.95%			0.95%			0.95%
Before waivers and reimbursements		1.21%			1.01%			0.95%			0.95%			0.99%
Ratio of net investment income (loss) to average net assets:
Net of waivers and reimbursements		0.74%			0.44%			(0.06)%			0.01%			0.17%
Before waivers and reimbursements		0.48%			0.38%			(0.06)%			0.01%			0.13%
Portfolio turnover rate		33%			48%			56%			54%			36%
HERITAGE VALUE FUND	Year or Period Ended September 30
(for a share outstanding throughout each period)	2009			2008			20073
Net asset value, beginning of period	$	8.18		$	10.23		$	10.00
Income (loss) from investment operations:
Net investment income		0.08			0.08			0.01
Net realized and unrealized gains (losses) on investments		(0.20	)		(1.99	)		0.22
Total from investment operations		(0.12	)		(1.91	)		0.23
Redemption fees (see Note 2)		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.10	)		(0.10	)		—
Distributions from net realized gains		—			(0.04	)		—
Total distributions		(0.10	)		(0.14	)		—
Net asset value, end of period	$	7.96		$	8.18		$	10.23
Total return		(1.13)%			(19.42)%			2.40%	4
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	3,557		$	3,792		$	2,432
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.95%			0.95%			0.95%	5
Before waivers and reimbursements		4.09%			3.89%			24.78%	5
Ratio of net investment income (loss) to average net assets:
Net of waivers and reimbursements		1.19%			1.31%			1.49%	5
Before waivers and reimbursements		(1.95)%			(1.63)%			(22.34)%	5
Portfolio turnover rate		246%			246%			0%	4

¹ Represents amounts less than $.005 per share.

² In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Funds’ cross-trading policies that had no impact on the total return.

³ Fund inception date was August 30, 2007.

⁴ Not annualized for periods less than one year.

⁵ Annualized.

See Notes to Financial Statements.

106

SEPTEMBER 30, 2009

INTERNATIONAL GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	11.83		$	24.42		$	21.83		$	18.50		$	14.71
Income (loss) from investment operations:
Net investment income (loss)		(0.13	)		(0.28	)		0.03			(0.09	)		(0.10	)
Net realized and unrealized gains (losses) on investments		2.24			(9.19	)		6.61			3.42			3.91
Net increase from payment by affiliate		—			—			—			—			0.01
Total from investment operations		2.11			(9.47	)		6.64			3.33			3.82
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.03	)		(0.68	)		—			—			—
Distributions from net realized gains		—			(2.44	)		(4.05	)		—	1		(0.03	)
Total distributions		(0.03	)		(3.12	)		(4.05	)		—	1		(0.03	)
Net asset value, end of period	$	13.91		$	11.83		$	24.42		$	21.83		$	18.50
Total return		18.03%			(44.01)%			34.02%			18.00%	2		26.02%	3
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	173,226		$	194,780		$	534,903		$	383,135		$	338,792
Ratio of expenses to average net assets		1.94%			1.83%			1.76%			1.78%			1.84%
Ratio of net investment income (loss) to average net assets		0.03%			(0.15)%			0.11%			(0.42)%			(0.64)%
Portfolio turnover rate		56%			44%			60%			64%			32%
INTERNATIONAL OPPORTUNITIES FUND	Year or Period Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			20054
Net asset value, beginning of period	$	1.60		$	3.65		$	2.71		$	2.19		$	2.00
Income (loss) from investment operations:
Net investment income (loss)		0.01			0.07			(0.01	)		(0.01	)		—	1
Net realized and unrealized gains (losses) on investments		0.36			(1.45	)		1.13			0.53			0.19
Total from investment operations		0.37			(1.38	)		1.12			0.52			0.19
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		—	1		(0.14	)		—	1		—			—
Distributions from net realized gains		—			(0.53	)		(0.18	)		—			—
Total distributions		—			(0.67	)		(0.18	)		—			—
Net asset value, end of period	$	1.97		$	1.60		$	3.65		$	2.71		$	2.19
Total return		23.60%			(45.33)%			42.73%			23.74%			9.50%	5
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	93,856		$	55,691		$	56,433		$	36,839		$	29,440
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.26%	6		2.25%			2.25%			2.25%			2.25%	7
Before waivers and reimbursements		2.79%	6		2.59%			2.51%			2.62%			3.09%	7
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(0.28)%			(0.09)%			(0.18)%			(0.29)%			(0.21)%	7
Before waivers and reimbursements		(0.81)%			(0.43)%			(0.44)%			(0.66)%			(1.05)%	7
Portfolio turnover rate		69%			63%			54%			43%			12%	5

¹ Represents amounts less than $.005 per share.

² In 2006, the Fund’s total return included a voluntary reimbursement by the Advisor for an amount relating to an incorrect settlement that had no impact on the total return.

³ In 2005, 0.07% of the Fund’s total return consisted of a voluntary reimbursement by the advisor for a realized investment loss. Excluding this item, the total return would have been 25.95%. The Fund’s total return also included, in 2005, a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Fund’s cross-trading policies that had no impact on the total return.

⁴ Fund inception date was January 27, 2005.

⁵ Not annualized for periods less than one year.

⁶ Includes interest expense of 0.01%.

⁷ Annualized.

See Notes to Financial Statements.

107

WASATCH FUNDS — Financial Highlights (continued)

MICRO CAP FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	4.14		$	7.19		$	6.79		$	7.58		$	7.05
Income (loss) from investment operations:
Net investment loss		(0.03	)		(0.07	)		(0.09	)		(0.10	)		(0.11	)
Net realized and unrealized gains (losses) on investments		(0.21	)		(1.81	)		1.29			0.65			1.70
Net increase from payment by affiliate		—			—			—			—			—	1
Total from investment operations		(0.24	)		(1.88	)		1.20			0.55			1.59
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.01	)		—			—			—			—
Distributions from net realized gains		—			(1.17	)		(0.80	)		(1.34	)		(1.06	)
Total distributions		(0.01	)		(1.17	)		(0.80	)		(1.34	)		(1.06	)
Net asset value, end of period	$	3.89		$	4.14		$	7.19		$	6.79		$	7.58
Total return		(5.70)%			(30.46)%			18.72%			8.51%			26.42%	2
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	272,537		$	359,394		$	631,417		$	583,901		$	579,244
Ratio of expenses to average net assets		2.24%			2.16%			2.14%			2.14%			2.18%
Ratio of net investment loss to average net assets		(0.96)%			(1.26)%			(1.25)%			(1.39)%			(1.58)%
Portfolio turnover rate		46%			54%			48%			46%			50%
MICRO CAP VALUE FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	1.80		$	2.98		$	2.93		$	2.72		$	2.57
Income (loss) from investment operations:
Net investment loss		(0.02	)		(0.02	)		(0.03	)		(0.03	)		(0.04	)
Net realized and unrealized gains (losses) on investments		0.33			(0.75	)		0.64			0.50			0.49
Net increase from payment by affiliate		—			—			—			—			—	1
Total from investment operations		0.31			(0.77	)		0.61			0.47			0.45
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Distributions from net realized gains		—			(0.41	)		(0.56	)		(0.26	)		(0.30	)
Total distributions		—			(0.41	)		(0.56	)		(0.26	)		(0.30	)
Net asset value, end of period	$	2.11		$	1.80		$	2.98		$	2.93		$	2.72
Total return		17.22%			(29.67)%			22.84%			18.89%			19.87%	3
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	115,216		$	97,912		$	120,039		$	95,508		$	86,903
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.26%	4		2.25%			2.25%			2.25%			2.25%
Before waivers and reimbursements		2.46%	4		2.35%			2.30%			2.33%			2.36%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(1.36)%			(1.21)%			(1.06)%			(0.99)%			(1.41)%
Before waivers and reimbursements		(1.56)%			(1.31)%			(1.11)%			(1.07)%			(1.52)%
Portfolio turnover rate		145%			144%			105%			95%			85%

¹ Represents amounts less than $.005 per share.

² In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Funds’ cross-trading policies that had no impact on the total return.

³ In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for a realized investment loss that had no impact on the total return.

⁴ Includes dividend payments for securities sold short of 0.01%.

See Notes to Financial Statements.

108

SEPTEMBER 30, 2009

SMALL CAP GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	26.50		$	40.10		$	36.99		$	41.23		$	34.94
Income (loss) from investment operations:
Net investment loss		(0.12	)		(0.16	)		(0.25	)		(0.26	)		(0.25	)
Net realized and unrealized gains (losses) on investments		2.27			(8.85	)		6.28			0.84			7.32
Net increase from payment by affiliate		—			—			—			—			—	1
Total from investment operations		2.15			(9.01	)		6.03			0.58			7.07
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Distributions from net realized gains		(0.06	)		(4.59	)		(2.92	)		(4.82	)		(0.78	)
Total distributions		(0.06	)		(4.59	)		(2.92	)		(4.82	)		(0.78	)
Net asset value, end of period	$	28.59		$	26.50		$	40.10		$	36.99		$	41.23
Total return		8.20%			(25.42)%			16.94%			1.40%			20.73%	2
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	809,318		$	735,546		$	1,075,433		$	1,234,978		$	1,357,862
Ratio of expenses to average net assets		1.29%			1.21%			1.19%			1.18%	3		1.18%
Ratio of net investment loss to average net assets		(0.60)%			(0.47)%			(0.52)%			(0.64)%			(0.62)%
Portfolio turnover rate		52%			51%			43%			41%			36%
SMALL CAP VALUE FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	2.82		$	5.22		$	5.29		$	5.67		$	5.54
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		0.01			0.01			0.05			0.05
Net realized and unrealized gains (losses) on investments		(0.06	)		(1.11	)		0.67			0.36			0.86
Net increase from payment by affiliate		—			—			—			—			—	1
Total from investment operations		(0.07	)		(1.10	)		0.68			0.41			0.91
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		—			(0.01	)		(0.04	)		(0.07	)		—
Distributions from net realized gains		—			(1.29	)		(0.71	)		(0.72	)		(0.78	)
Total distributions		—			(1.30	)		(0.75	)		(0.79	)		(0.78	)
Net asset value, end of period	$	2.75		$	2.82		$	5.22		$	5.29		$	5.67
Total return		(2.48)%			(26.26)%			13.32%			7.88%			19.47%	4
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	218,358		$	336,914		$	660,637		$	664,625		$	734,842
Ratio of expenses to average net assets		1.92%			1.76%			1.69%			1.68%			1.72%
Ratio of net investment income (loss) to average net assets		(0.33)%			0.15%			0.18%			0.81%			0.94%
Portfolio turnover rate		89%			78%			84%			40%			43%

¹ Represents amounts less than $.005 per share.

² In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Funds’ cross-trading policies that had no impact on the total return. The effect of net realized gains on the disposal of investments in violation of an investment restriction on total return was less than 0.01%.

³ In 2006, the Fund received a reimbursement of investment advisory fees, which had an impact on the Fund’s expense ratio of less than 0.01%.

⁴ In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for a realized investment loss that had no impact on the total return.

See Notes to Financial Statements.

109

WASATCH FUNDS — Financial Highlights (continued)

STRATEGIC INCOME FUND	Year or Period Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			20061
Net asset value, beginning of period	$	7.62		$	11.00		$	10.48		$	10.00
Income (loss) from investment operations:
Net investment income		0.29			0.55			0.48			0.31
Net realized and unrealized gains (losses) on investments		(0.85	)		(2.29	)		0.54			0.44
Total from investment operations		(0.56	)		(1.74	)		1.02			0.75
Redemption fees (see Note 2)		—	2		—	2		0.01			—	2
Less distributions:
Dividends from net investment income		(0.29	)		(0.50	)		(0.47	)		(0.27	)
Distributions from net realized gains		—			(1.14	)		(0.04	)		—
Total distributions		(0.29	)		(1.64	)		(0.51	)		(0.27	)
Net asset value, end of period	$	6.77		$	7.62		$	11.00		$	10.48
Total return		(6.49)%			(18.17)%			9.77%			7.58%	3
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	17,710		$	21,889		$	23,621		$	12,732
Ratio of expenses to average net assets (including interest expense and dividend payments for securities sold short):
Net of waivers and reimbursements		1.05%			0.97%			1.05%			0.95%	4
Before waivers and reimbursements		1.71%			1.46%			1.57%			2.66%	4
Ratio of expenses to average net assets (excluding interest expense and dividend payments for securities sold short):
Net of waivers and reimbursements		0.95%			0.95%			0.95%			0.95%	4
Before waivers and reimbursements		1.61%			1.44%			1.47%			2.66%	4
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		4.93%			5.96%			4.14%			5.40%	4
Before waivers and reimbursements		4.27%			5.47%			3.62%			3.69%	4
Portfolio turnover rate		84%			81%			86%			14%	3
ULTRA GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	15.76		$	27.78		$	24.09		$	27.98		$	24.07
Income (loss) from investment operations:
Net investment loss		(0.14	)		(0.22	)		(0.33	)		(0.34	)		(0.38	)
Net realized and unrealized gains (losses) on investments		0.04			(8.28	)		5.80			0.23			5.26
Net increase from payment by affiliate		—			—			—			—	2		—	2
Total from investment operations		(0.10	)		(8.50	)		5.47			(0.11	)		4.88
Redemption fees (see Note 2)		—	2		—	2		—	2		—	2		—	2
Less distributions:
Distributions from net realized gains		—			(3.52	)		(1.78	)		(3.78	)		(0.97	)
Total distributions		—			(3.52	)		(1.78	)		(3.78	)		(0.97	)
Net asset value, end of period	$	15.66		$	15.76		$	27.78		$	24.09		$	27.98
Total return		(.63)%			(35.09)%			23.80%			(.48)%			21.00%	5
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	121,284		$	144,004		$	268,633		$	306,406		$	389,894
Ratio of expenses to average net assets:
Net of waivers and reimbursements		1.75%			1.53%			1.49%			1.48%			1.50%
Before waivers and reimbursements		1.77%			1.53%			1.49%			1.48%			1.50%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(1.12)%			(0.93)%			(1.12)%			(1.19)%			(1.30)%
Before waivers and reimbursements		(1.14)%			(0.93)%			(1.12)%			(1.19)%			(1.30)%
Portfolio turnover rate		64%			84%			55%			76%			65%

¹ Fund inception date was February 1, 2006.

² Represents amounts less than $.005 per share.

³ Not annualized for periods less than one year.

⁴ Annualized.

⁵ In 2005, the Fund’s total return included a voluntary reimbursement by the Advisor for amounts relating to errors in applying the Funds’ cross-trading policies that had no impact on the total return.

See Notes to Financial Statements.

110

SEPTEMBER 30, 2009

WASATCH-1ST SOURCE INCOME EQUITY FUND	Year Ended September 30			Period Ended September 30			Year Ended March 31
(for a share outstanding throughout each period)	2009			20081			2008			2007			2006			2005
Net asset value, beginning of period	$	12.93		$	14.44		$	14.80		$	14.14		$	13.61		$	12.16
Income (loss) from investment operations:
Net investment income		0.20			0.14	2		0.21			0.22			0.17			0.14
Net realized and unrealized gains (losses) on investments		(0.96	)		(1.52	)		0.31			1.66			2.10			1.91
Total from investment operations		(0.76	)		(1.38	)		0.52			1.88			2.27			2.05
Redemption fees (see Note 2)		—	3		—			—			—			—			—
Less distributions:
Dividends from net investment income		(0.20	)		(0.13	)		(0.21	)		(0.21	)		(0.18	)		(0.13	)
Distributions from net realized gains		—			—			(0.67	)		(1.01	)		(1.56	)		(0.47	)
Total distributions		(0.20	)		(0.13	)		(0.88	)		(1.22	)		(1.74	)		(0.60	)
Net asset value, end of period	$	11.97		$	12.93		$	14.44		$	14.80		$	14.14		$	13.61
Total return		(5.63)%			(9.65)%	4		3.22%			13.69%			17.72%			17.17%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	1,385,508		$	780,384		$	447,674		$	167,133		$	129,508		$	103,127
Ratio of expenses to average net assets:
Net of waivers and reimbursements		1.10%			1.04%	5		1.13%			1.15%			1.19%			1.19%
Before waivers and reimbursements		1.22%			1.29%	5		1.38%			1.40%			1.45%			1.44%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		1.93%			1.99%	5		1.43%			1.52%			1.25%			1.10%
Before waivers and reimbursements		1.81%			1.74%	5		1.18%			1.27%			0.99%			0.85%
Portfolio turnover rate		16%			5%	4		36%			26%			37%			44%
WASATCH-1ST SOURCE LONG/SHORT FUND	Year Ended September 30			Period Ended September 30			Year Ended March 31
(for a share outstanding throughout each period)	2009			20081			2008			2007			2006			2005
Net asset value, beginning of period	$	10.81		$	11.27		$	11.59		$	11.21		$	10.69		$	10.59
Income (loss) from investment operations:
Net investment income		0.02			0.05	2		0.27			0.26			0.21			0.08
Net realized and unrealized gains (losses) on investments		0.50			(0.46	)		0.02			0.90			0.71			0.35
Total from investment operations		0.52			(0.41	)		0.29			1.16			0.92			0.43
Redemption fees (see Note 2)		—	3		—			—			—			—			—
Less distributions:
Dividends from net investment income		(0.05	)		(0.05	)		(0.28	)		(0.28	)		(0.20	)		(0.09	)
Distributions from net realized gains		(0.15	)		—			(0.33	)		(0.50	)		(0.20	)		(0.24	)
Total distributions		(0.20	)		(0.05	)		(0.61	)		(0.78	)		(0.40	)		(0.33	)
Net asset value, end of period	$	11.13		$	10.81		$	11.27		$	11.59		$	11.21		$	10.69
Total return		5.35%			(3.66)%	4		2.34%			10.44%			8.80%			4.07%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	146,127		$	122,114		$	87,410		$	53,894		$	29,831		$	25,127
Ratio of expenses to average net assets (including interest expense and dividend payments for securities sold short):
Net of waivers and reimbursements		1.91%			1.77%	5		1.75%			1.84%			1.72%			1.71%
Before waivers and reimbursements		1.96%			2.02%	5		2.00%			2.09%			1.98%			1.97%
Ratio of expenses to average net assets (excluding interest expense and dividend payments for securities sold short):
Net of waivers and reimbursements		1.47%			1.46%	5		1.57%			1.56%			1.63%			1.64%
Before waivers and reimbursements		1.52%			1.71%	5		1.82%			1.81%			1.89%			1.90%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		0.24%			0.95%	5		2.25%			2.40%			1.98%			0.76%
Before waivers and reimbursements		0.19%			0.70%	5		2.00%			2.15%			1.72%			0.50%
Portfolio turnover rate		167%			71%	4		179%			172%			123%			206%

¹ Effective September 19, 2008, the Fund changed its fiscal year end to September 30.

² Average shares method used in calculation.

³ Represents amounts less than $.005 per share.

⁴ Not annualized for periods less than one year.

⁵ Annualized.

See Notes to Financial Statements.

111

WASATCH FUNDS — Financial Highlights (continued) SEPTEMBER 30, 2009

U.S. TREASURY FUND	Year Ended September 30
(for a share outstanding throughout each period)	2009			2008			2007			2006			2005
Net asset value, beginning of period	$	14.95		$	13.84		$	14.12		$	14.68		$	13.77
Income (loss) from investment operations:
Net investment income		0.55			0.58			0.64			0.39			0.45
Net realized and unrealized gains (losses) on investments		1.29			1.10			(0.29	)		(0.24	)		1.05
Total from investment operations		1.84			1.68			0.35			0.15			1.50
Redemption fees (see Note 2)		0.05			0.01			0.01			0.01			0.01
Less distributions:
Dividends from net investment income		(0.55	)		(0.58	)		(0.64	)		(0.72	)		(0.60	)
Distributions from net realized gains		—			—			—			—			—
Total distributions		(0.55	)		(0.58	)		(0.64	)		(0.72	)		(0.60	)
Net asset value, end of period	$	16.29		$	14.95		$	13.84		$	14.12		$	14.68
Total return		12.49%			12.33%			2.68%			1.21%			11.41%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	154,099		$	121,240		$	115,788		$	204,994		$	82,599
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.75%			0.74%			0.71%			0.72%			0.75%
Before waivers and reimbursements		0.79%			0.74%			0.71%			0.72%			0.86%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		3.34%			3.85%			4.23%			4.21%			4.01%
Before waivers and reimbursements		3.30%			3.85%			4.23%			4.21%			3.90%
Portfolio turnover rate		62%			31%			19%			2%			19%
WASATCH-1ST SOURCE INCOME FUND	Year Ended September 30			Period Ended September 30			Year Ended March 31
(for a share outstanding throughout each period)	2009			20081			2008			2007			2006			2005
Net asset value, beginning of period	$	9.59		$	9.95		$	9.73		$	9.63		$	9.88		$	10.34
Income (loss) from investment operations:
Net investment income		0.33			0.18	2		0.40			0.38			0.33			0.29
Net realized and unrealized gains (losses) on investments		0.46			(0.35	)		0.24			0.13			(0.18	)		(0.37	)
Total from investment operations		0.79			(0.17	)		0.64			0.51			0.15			(0.08	)
Redemption fees (see Note 2)		—	3		—			—			—			—			—
Less distributions:
Dividends from net investment income		(0.34	)		(0.19	)		(0.42	)		(0.41	)		(0.40	)		(0.38	)
Distributions from net realized gains		—			—			—			—			—			—
Total distributions		(0.34	)		(0.19	)		(0.42	)		(0.41	)		(0.40	)		(0.38	)
Net asset value, end of period	$	10.04		$	9.59		$	9.95		$	9.73		$	9.63		$	9.88
Total return		8.42%			(1.69)%	4		6.74%			5.43%			1.52%			(0.76)%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	114,496		$	89,081		$	86,981		$	78,921		$	72,874		$	75,445
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.84%			0.87%	5		0.95%			0.92%			0.95%			0.93%
Before waivers and reimbursements		0.88%			1.12%	5		1.20%			1.17%			1.21%			1.19%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		3.44%			3.66%	5		4.05%			3.95%			3.36%			2.84%
Before waivers and reimbursements		3.40%			3.41%	5		3.80%			3.70%			3.10%			2.58%
Portfolio turnover rate		28%			15%	4		56%			59%			70%			79%

¹ Effective September 19, 2008, the Fund changed its fiscal year end to September 30.

² Average shares method used in calculation.

³ Represents amounts less than $.005 per share.

⁴ Not annualized for periods less than one year.

⁵ Annualized.

See Notes to Financial Statements.

112

WASATCH FUNDS — Notes to Financial Statements SEPTEMBER 30, 2009

1. ORGANIZATION

Wasatch Funds, Inc. is a Minnesota corporation registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and consists of 18 series or “funds” (each a “Fund” and collectively the “Funds”). The Core Growth Fund, Global Science & Technology Fund, Heritage Growth Fund, International Growth Fund, Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund, Ultra Growth Fund, Wasatch-1st Source Income Equity Fund, Wasatch-Hoisington U.S. Treasury Fund (“U.S. Treasury Fund”), and Wasatch-1st Source Income Fund are each diversified funds. The Emerging Markets Small Cap Fund, Global Opportunities Fund, Heritage Value Fund, International Opportunities Fund, Strategic Income Fund, and Wasatch-1st Source Long/Short Fund are each non-diversified funds. Each Fund maintains its own investment objective. The Funds have entered into an investment advisory agreement with Wasatch Advisors, Inc. (the “Advisor” or “Wasatch”) as investment advisor.

The Core Growth Fund, Emerging Markets Small Cap Fund, Global Opportunities Fund, Global Science & Technology Fund, Heritage Growth Fund, Heritage Value Fund, International Growth Fund, International Opportunities Fund, Micro Cap Fund, Micro Cap Value Fund, Small Cap Growth Fund, Small Cap Value Fund, Strategic Income Fund, Ultra Growth Fund, Wasatch-1st Source Income Equity Fund, and Wasatch-1st Source Long/Short Fund are referred to herein as the “Equity Funds.”

1st Source Corporation Investment Advisors, Inc. (“1st Source”) signed an asset purchase agreement with Wasatch relating to the acquisition by Wasatch of certain 1st Source mutual fund advisor business assets related to its management of the 1st Source Monogram Income Fund, the 1st Source Monogram Income Equity Fund and the 1st Source Monogram Long/Short Fund.

At a Special Meeting of the Shareholders of the 1st Source Monogram Income Fund, a series of The Coventry Group, held on December 11, 2008, the shareholders of 1st Source Monogram Income Fund approved the acquisition of all of the assets of the 1st Source Monogram Income Fund by the Wasatch-1st Source Income Fund in exchange for shares of the Wasatch-1st Source Income Fund and the assumption of all liabilities of the 1st Source Monogram Income Fund by the Wasatch-1st Source Income Fund and the subsequent liquidation and dissolution of the 1st Source Monogram Income Fund.

At a Special Meeting of the Shareholders of the 1st Source Monogram Income Equity Fund, a series of The Coventry Group, held on December 11, 2008, the shareholders of 1st Source Monogram Income Equity Fund approved the acquisition of all of the assets of the 1st Source Monogram Income Equity Fund by the Wasatch-1st Source Income Equity Fund in exchange for shares of the Wasatch-1st Source Income Equity Fund and the assumption of all liabilities of the 1st Source Monogram Income Equity Fund by the Wasatch-1st Source Income Equity Fund and the subsequent liquidation and dissolution of the 1st Source Monogram Income Equity Fund.

At a Special Meeting of the Shareholders of the 1st Source Monogram Long/Short Fund, a series of The Coventry Group, held on December 11, 2008, the shareholders of 1st Source Monogram Long/Short Fund approved the acquisition of all of the assets of the 1st Source Monogram Long/Short Fund by the Wasatch-1st Source Long/Short Fund in exchange for shares of the Wasatch-1st Source Long/Short Fund and the assumption of all liabilities of the 1st Source Monogram Long/Short Fund by the Wasatch-1st Source Long/Short Fund and the subsequent liquidation and dissolution of the 1st Source Monogram Long/Short Fund.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant policies related to investments of the Funds held at September 30, 2009.

Valuation of Securities — Securities are valued as of the close of the New York Stock Exchange (generally 4:00 p.m. Eastern Time) on the valuation date. Equity securities are valued using a commercial pricing service at the last quoted sales price taken from the primary market in which each security trades and, with respect to equity securities traded on NASDAQ, such securities are valued using the NASDAQ Official Closing Price (“NOCP”) or last sales price if no NOCP is available. If there are no sales on the primary exchange or market on a given day, then the security is valued at the most recent bid price on the primary exchange or market as provided by a pricing service. Debt securities (other than short-term instruments) are valued at current market value by a commercial pricing service, or by using the last sale or bid price. Short term securities, which mature in 60 days or less at time of purchase, are generally valued at amortized cost, unless it is determined that the amortized cost method would not represent fair value, in which case the securities are marked to market. Exchange-traded options are valued at the last sale price in the market where they are principally traded. If there are no sales on the primary exchange or market on a given day, then the option is valued at the most recent bid price on the primary exchange or market as provided by a pricing service. If market quotations are not readily available for the Funds’ investments in securities such as restricted securities, private placements, securities for which trading has been halted or other illiquid securities, these investments are valued at fair value in accordance with Board-approved Pricing Policies and Procedures by the Pricing Committee of the Advisor (“Pricing Committee”) with oversight by the Board of Directors. Fair value is defined as the price that would be received upon the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under market conditions. For each applicable investment that is fair valued, the Pricing Committee considers, to the extent applicable, various factors including, but not limited to, the financial condition of the company or limited partnership, operating results, prices paid in follow-on rounds, comparable companies in the public market, the nature and duration of the restrictions for holding the securities, and other relevant factors.

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WASATCH FUNDS — Notes to Financial Statements (continued)

Additionally, a Fund’s investments are valued at fair value by the Pricing Committee if the Advisor determines that an event impacting the value of an investment occurred between the closing time of a security’s primary market or exchange (for example, a foreign exchange or market) and the time the Fund’s share price is calculated. Significant events include, but are not limited to the following: significant fluctuations in domestic markets, foreign markets or foreign currencies; occurrences not directly tied to the securities markets such as natural disasters, armed conflicts or significant governmental actions; and major announcements affecting a single issuer or an entire market or market sector. In responding to a significant event, the Pricing Committee determines the fair value of affected securities by considering factors including, but not limited to: index options and futures traded subsequent to the close; American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) or other related receipts; currency spot or forward markets that trade after pricing of the foreign exchange; other derivative securities traded after the close such as Standard & Poor’s Depository Receipts (“SPDRs”) and other exchange traded funds (“ETFs”); and alternative market quotes on the affected securities. When applicable, the Funds use a systematic fair valuation model provided by an independent third party to assist in adjusting the valuation of foreign securities.

As of September 30, 2009, the aggregate amount of fair valued securities, excluding any foreign securities fair valued pursuant to a systematic fair valuation model, as a percentage of net assets for the Funds was as follows:

Core Growth Fund	1.78	%
Emerging Markets Small Cap Fund	0.23	%
Global Opportunities Fund	0.12	%
Global Science & Technology Fund	2.51	%
Heritage Growth Fund	—
Heritage Value Fund	—
International Growth Fund	—
International Opportunities Fund	0.61	%
Micro Cap Fund	1.00	%
Micro Cap Value Fund	2.10	%
Small Cap Growth Fund	1.03	%
Small Cap Value Fund	3.16	%
Strategic Income Fund	1.05	%
Ultra Growth Fund	5.09	%
Wasatch-1st Source Income Equity Fund	—
Wasatch-1st Source Long/Short Fund	—
U.S. Treasury Fund	—
Wasatch-1st Source Income Fund	1.61	%

Foreign Currency Translations — Values of investments denominated in foreign currencies are converted into U.S. dollars using the current exchange rates each business day. Purchases and sales of investments and dividend income are translated into U.S. dollars using the current prevailing exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized gains or losses on securities is reflected as a component of such gains or losses on the Statement of Operations. Transactions in foreign denominated assets may involve greater risks than domestic transactions.

At September 30, 2009, the foreign currencies held by the Funds were as follows (amounts in U.S. dollars):

	Cost of Currency		Value of Currency
Core Growth Fund
South Korean Won	$	27	$	29
Emerging Markets Small Cap Fund
Egyptian Pound	$	18	$	18
Malaysian Ringgit		4,840		4,840
New Taiwan Dollar		5,267		5,372
South Korean Won		1		1
	$	10,126	$	10,231
Global Opportunities Fund
Euro Currency	$	3,069	$	3,075
Japanese Yen		1,578		1,586
South Korean Won		2		2
	$	4,649	$	4,663
Heritage Growth Fund
Indian Rupee	$	241,140	$	241,140
International Growth Fund
Australian Dollar	$	7	$	7
Egyptian Pound		9		9
Indian Rupee		15,741		15,697
Japanese Yen		3		3
New Taiwan Dollar		16,718		17,603
South Korean Won		16		18
	$	32,494	$	33,337
International Opportunities Fund
Euro Currency	$	5,441	$	5,451
Hong Kong Dollar		2,605		2,605
New Taiwan Dollar		3		3
South Korean Won		8		8
	$	8,057	$	8,067
Micro Cap Fund
South Korean Won	$	11	$	10
Ultra Growth Fund
Indian Rupee	$	572,242	$	570,636

Foreign Currency Contracts — The Funds may enter into foreign currency contracts to settle planned purchases or sales of securities or to protect against a possible loss resulting from the adverse change in the relationship between the U.S. Dollar and a foreign currency involved in an underlying transaction. Foreign currency contracts are agreements between two parties to buy and sell a currency at a set price on a future date. The market value of a foreign currency contract fluctuates with changes in currency exchange rates. Foreign currency contracts are marked-to-market daily and the change in market value is recorded by a Fund as unrealized appreciation or depreciation. When a foreign currency contract is closed, the Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These contracts may involve market risk in excess of the unrealized gain or loss reflected on the Statements of Assets and Liabilities. In addition, a Fund could be exposed to credit risk if a counterparty is unable or unwilling

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SEPTEMBER 30, 2009

to meet the terms of the contracts or if the value of the currency changes unfavorably. In connection with these contracts, the Funds may segregate cash and/or securities in a sufficient amount as collateral in accordance with the terms of the respective contracts.

Investment in Securities and Related Investment Income — 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 except that certain dividends from foreign securities may be recorded after the ex-dividend date based on when the Fund is informed of the dividend. Interest income and estimated expenses are accrued daily. Bond discount and premiums are amortized using the interest method. To the extent dividends received from Real Estate Investment Trust securities include return of capital distributions; such distributions are recorded as income, and adjusted accordingly for tax purposes.

Short Sales — To a limited extent, the Equity Funds, except the Wasatch-1st Source Income Equity Fund, may enter into short sales whereby a fund sells a security it generally does not own (the security is borrowed), in anticipation of a decline in the security’s price. The initial amount of a short sale is recorded as a liability which is marked to market daily. Fluctuations in the value of the short liability are recorded as unrealized gains or losses. If a fund shorts a security when also holding a long position in the security (a “short against the box”), as the security’s price declines, the short position increases in value, offsetting the long position’s decrease in value. The opposite effect occurs if the security’s price rises. A Fund realizes a gain or loss upon closing of the short sale (returning the security to the counterparty by way of purchase or delivery of a long position owned). Possible losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested. The Funds are liable to the buyer for any dividends payable on securities while those securities are in a short position. These dividends are an expense of the Funds. The Funds designate collateral consisting of cash, U.S. government securities or other liquid assets sufficient to collateralize the market value of short positions.

Options Transactions — The Equity Funds and the Income Fund may buy and sell put and call options, write covered put and call options, including over-the-counter options, on portfolio securities where the completion of the obligation is dependent upon the credit standing of another party. Options are a type of derivative financial instrument. The funds may invest in derivative financial instruments, including options, in order to manage risk or gain exposure to various other investments or markets. 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. The Funds designate collateral consisting of cash, U.S. government securities or other liquid assets sufficient to collateralize the market value of written options.

Repurchase Agreements — The Funds may engage in repurchase transactions. Under the terms of a typical repurchase agreement, a fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase and the fund to resell the obligation at an agreed upon price and time. The market value of the collateral must be at least equal at all times to the total amount of the repurchase obligation, including interest. Generally, in the event of counterparty default, the fund has the right to use the collateral to offset losses incurred.

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. Accordingly, no provision for federal income or excise taxes has been made.

Expenses — The Funds contract for various services mostly on a collective basis. Most expenses are directly attributable to each Fund and therefore are charged accordingly. Expenses that are not directly attributable to one or more Funds are allocated among applicable Funds on an equitable and consistent basis considering such things as the nature and type of expense and the relative net assets of the Funds.

Use of Management Estimates — The preparation of financial statements in conformity with GAAP 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.

Guarantees and Indemnifications — In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds and/or its affiliates that have not yet occurred. Based on experience, however, the risk of loss is expected to be remote.

Redemption Fees — The Funds deduct a fee of 2.00% from redemption proceeds on shares of the Funds held 60 days or less. Redemption fees retained by the Funds are credited to additional paid-in capital.

3. DISTRIBUTIONS

Dividends from net investment income and net realized gains, if any, are declared and paid at least annually for all Funds, except for dividends from net investment income in five funds. The 1st Source Income Fund declares and pays dividends monthly. The Strategic Income, 1st Source Long/

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WASATCH FUNDS — Notes to Financial Statements  (continued)

Short, U.S. Treasury and 1st Source Income Equity Funds declare and pay dividends quarterly. The amount of dividends and distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. The Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction (tax equalization).

To the extent these book and tax differences are permanent in nature, such amounts are reclassified at the end of the fiscal year among paid-in capital in excess of par value, undistributed net investment income (loss), and undistributed net realized gain (loss) on investments and foreign currency translations.

Accordingly, at September 30, 2009, reclassifications were recorded as follows:

	Core Growth Fund			Emerging Markets Small Cap Fund			Global Opportunities Fund1			Global Science & Technology Fund			Heritage Growth Fund			Heritage Value Fund
Increase (decrease) paid-in capital in excess of par	$	(1,919,652	)	$	—		$	(372	)	$	(705,095	)	$	(20,695	)	$	(4,730	)
Increase (decrease) undistributed net investment income		5,763,569			176,595			(35,178	)		738,968			14,764			2,613
Increase (decrease) undistributed net realized gain (loss)		(3,843,917	)		(176,595	)		35,550			(33,873	)		5,931			2,117
	International Growth Fund			International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund
Increase (decrease) paid-in capital in excess of par	$	(6,168,653	)	$	(820,507	)	$	(4,013,632	)	$	(40,333	)	$	(4,191,086	)	$	(617,672	)
Increase (decrease) undistributed net investment income		6,110,931			1,366,875			3,298,944			881,784			3,620,748			1,941,261
Increase (decrease) undistributed net realized gain (loss)		57,722			(546,368	)		714,688			(841,451	)		570,338			(1,323,589	)
	Strategic Income Fund			Ultra Growth Fund			Wasatch-1st Source Income Equity Fund			Wasatch-1st Source Long/ Short Fund			U.S. Treasury Fund			Wasatch-1st Source Income Fund
Increase (decrease) paid-in capital in excess of par	$	(56,108	)	$	(1,042,520	)	$	(2,728	)	$	(160,516	)	$	—		$	(25,904	)
Increase (decrease) undistributed net investment income		104,548			725,242			(420,262	)		157,874			—			26,672
Increase (decrease) undistributed net realized gain (loss)		(48,440	)		317,278			422,990			2,642			—			(768	)

¹ Inception date of Fund was November 17, 2008.

4. PURCHASES AND SALES OF SECURITIES

Cost of investment securities purchased and proceeds from sales of investment securities, excluding U.S. government and short-term securities for the year or period ended September 30, 2009 are summarized below:

	Core Growth Fund		Emerging Markets Small Cap Fund		Global Opportunities Fund1		Global Science & Technology Fund		Heritage Growth Fund		Heritage Value Fund		International Growth Fund
Purchases	$	120,053,039	$	33,493,857	$	82,660,738	$	20,684,708	$	22,168,679	$	7,190,857	$	73,927,086
Sales		287,751,621		21,025,447		10,946,598		46,603,790		35,692,242		7,007,241		110,493,630
	International Opportunities Fund		Micro Cap Fund		Micro Cap Value Fund		Small Cap Growth Fund		Small Cap Value Fund		Strategic Income Fund		Ultra Growth Fund
Purchases	$	54,174,600	$	104,775,175	$	103,728,511	$	310,791,433	$	168,308,258	$	12,028,344	$	63,678,698
Sales		37,341,513		150,348,448		92,442,337		297,839,034		235,875,805		15,719,044		76,236,180
	Wasatch-1st Source Income Equity Fund		Wasatch-1st Source Long/ Short Fund		Wasatch-1st Source Income Fund
Purchases	$	784,811,484	$	176,221,764	$	19,115,482
Sales		146,806,925		149,602,134		11,169,436

¹ Inception date of the Fund was November 17, 2008.

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SEPTEMBER 30, 2009

Purchases and sales of U.S. government securities in the U.S. Treasury Fund were $111,535,708 and $91,231,938, respectively. Purchases and sales of U.S. government securities in the Wasatch-1st Source Income Fund were $36,330,110 and $14,848,979, respectively.

5. OPTIONS CONTRACTS WRITTEN

Options written activity during the period ended September 30, 2009 was as follows:

	Options Outstanding at Beginning of Period		Written		Closed			Exercised			Expired			Options Outstanding at End of Period
Heritage Growth Fund
Premium amount	$	—	$	105,024	$	(20,790	)	$	(35,404	)	$	(48,830	)	$	—
Number of contracts		—		725		(110	)		(145	)		(470	)		—
Heritage Value
Premium amount	$	—	$	393,382	$	(66,239	)	$	(199,922	)	$	(127,221	)	$	—
Number of contracts		—		2,026		(410	)		(969	)		(647	)		—
Micro Cap Value Fund
Premium amount	$	—	$	1,864,290	$	—		$	(1,076,110	)	$	(788,180	)	$	—
Number of contracts		—		12,779		—			(7,643	)		(5,136	)		—
Small Cap Value Fund
Premium amount	$	—	$	908,649	$	—		$	(629,536	)	$	(279,113	)	$	—
Number of contracts		—		6,596		—			(4,529	)		(2,067	)		—
Strategic Income Fund
Premium amount	$	—	$	209,594	$	(29,467	)	$	(101,798	)	$	(57,452	)	$	20,877
Number of contracts		—		3,096		(557	)		(1,161	)		(1,105	)		273
Wasatch-1st Source Long/Short Fund
Premium amount	$	—	$	3,319,545	$	(434,447	)	$	(1,066,337	)	$	(214,369	)	$	1,604,392
Number of contracts		—		11,462		(1,572	)		(2,878	)		(1,750	)		5,262

6. FEDERAL INCOME TAX INFORMATION

As of September 30, 2009, the cost and unrealized appreciation (depreciation) of securities on a tax basis were as follows:

	Core Growth Fund			Emerging Markets Small Cap Fund			Global Opportunities Fund1			Global Science & Technology Fund			Heritage Growth Fund			Heritage Value Fund
Cost	$	384,217,821		$	42,318,213		$	91,459,987		$	54,678,880		$	68,448,158		$	3,203,433
Gross appreciation	$	79,829,287		$	10,217,011		$	26,791,718		$	10,345,467		$	10,041,336		$	355,828
Gross (depreciation)		(52,074,616	)		(2,306,367	)		(547,070	)		(4,531,544	)		(3,322,479	)		(12,744	)
Net appreciation (depreciation)	$	27,754,671		$	7,910,644		$	26,244,648		$	5,813,923		$	6,718,857		$	343,084
	International Growth Fund			International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund
Cost	$	143,251,056		$	74,430,794		$	283,618,787		$	97,956,904		$	690,838,657		$	213,751,658
Gross appreciation	$	40,707,767		$	24,242,018		$	47,474,271		$	20,157,785		$	174,045,869		$	37,624,473
Gross (depreciation)		(12,870,711	)		(4,214,334	)		(56,990,084	)		(3,764,930	)		(47,434,007	)		(32,555,641	)
Net appreciation (depreciation)	$	27,837,056		$	20,027,684		$	(9,515,813	)	$	16,392,855		$	126,611,862		$	5,068,832
	Strategic Income Fund			Ultra Growth Fund			Wasatch-1st Source Income Equity Fund			Wasatch-1st Source Long/Short Fund			U.S. Treasury Fund			Wasatch-1st Source Income Fund
Cost	$	17,984,430		$	99,364,727		$	1,295,079,180		$	134,648,365		$	144,338,574		$	110,405,080
Gross appreciation	$	1,554,025		$	31,348,235		$	142,154,343		$	16,935,847		$	11,700,658		$	3,829,851
Gross (depreciation)		(2,226,699	)		(9,185,239	)		(41,331,593	)		(736,863	)		(2,356,406	)		(655,684	)
Net appreciation	$	(672,674	)	$	22,162,996		$	100,822,750		$	16,198,984		$	9,344,252		$	3,174,167

¹ Inception date of the Fund was November 17, 2008.

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WASATCH FUNDS — Notes to Financial Statements  (continued)

The difference between book-basis and tax-basis unrealized gains are primarily attributable to wash sales and other temporary tax adjustments.

The components of accumulated earnings on a tax basis as of September 30, 2009 were as follows:

	Core Growth Fund			Emerging Markets Small Cap Fund			Global Opportunities Fund1			Global Science & Technology Fund			Heritage Growth Fund			Heritage Value Fund
Undistributed ordinary income	$	—		$	379,063		$	3,456,354		$	—		$	499,398		$	30,339
Undistributed capital gains		—			—			—			—			—
Accumulated earnings		—			379,063			3,456,354			—			499,398			30,339
Accumulated capital and other losses		(123,917,211	)		(23,409,174	)		—			(38,293,287	)		(10,370,229	)		(1,346,351	)
Other undistributed ordinary losses		—			—			(12,143	)		—			—			(3,545	)
Net unrealized appreciation*		27,754,727			7,515,637			26,160,631			5,814,852			6,712,066			343,095
Total accumulated earnings (deficit)	$	(96,162,484	)	$	(15,514,474	)	$	29,604,842		$	(32,478,435	)	$	(3,158,765	)	$	(976,462	)
	International Growth Fund			International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund
Undistributed ordinary income	$	—		$	—		$	—		$	569,665		$	—		$	—
Undistributed capital gains		—			—			—			—			—			—
Accumulated earnings		—			—			—			569,665			—			—
Accumulated capital and other losses		(79,143,833	)		(15,096,992	)		(85,872,772	)		(31,141,696	)		(64,814,461	)		(152,421,857	)
Other undistributed ordinary losses		—			(23,714	)		—			—			—			—
Net unrealized appreciation*		27,621,803			19,957,778			(9,515,325	)		16,392,287			126,573,573			5,068,834
Total accumulated earnings (deficit)	$	(51,522,030	)	$	4,837,072		$	(95,388,097	)	$	(14,179,744	)	$	61,759,112		$	(147,353,023	)
	Strategic Income Fund			Ultra Growth Fund			Wasatch-1st Source Income Equity Fund			Wasatch-1st Source Long/ Short Fund			U.S. Treasury Fund			Wasatch-1st Source Income Fund
Undistributed ordinary income	$	65,128		$	—		$	509,535		$	—		$	498,119		$	—
Undistributed capital gains		—			—			—			—			4,184,411			—
Accumulated earnings		65,128			—			509,535			—			4,591,071			—
Accumulated capital and other losses		(9,468,279	)		(51,320,913	)		(98,275,928	)		(16,298,215	)		—			(3,776,285	)
Other undistributed ordinary losses		(15,230	)		—			(385,917	)		—			(91,459	)		(13,055	)
Net unrealized appreciation*		(292,049	)		22,163,107			100,823,061			14,437,982			9,344,252			3,174,167
Total accumulated earnings (deficit)	$	(9,710,430	)	$	(29,157,806	)	$	2,670,751		$	(1,860,233	)	$	13,935,323		$	(615,173	)

¹ Inception date of the Fund was November 17, 2008.

* On investments, securities sold short, derivative and foreign currency denominated assets and liabilities.

Capital loss carryforwards are available through the date specified below to offset future realized net capital gains. To the extent future gains are offset by capital loss carryforwards, such gains will not be distributed.

Capital Loss carryforwards expire September 30:

Fund	2012		2013		2014		2015		2016		2017
Core Growth Fund	$	—	$	—	$	—	$	—	$	—	$	23,065,472
Emerging Markets Small Cap Fund		—		—		—		—		—		8,013,713
Global Science & Technology Fund												13,246,252
Heritage Growth Fund												1,497,283
Heritage Value Fund												1,178,729
International Growth Fund												37,186,858
International Opportunities Fund												6,306,993
Micro Cap Fund												36,417,364
Micro Cap Value Fund												17,636,668
Small Cap Growth Fund												18,434,963
Small Cap Value Fund												69,050,636
Strategic Income Fund												1,777,526
Ultra Growth Fund												18,431,927
Wasatch-1st Source Income Equity Fund		—		456,570		—		—		1,007,552		—
Wasatch-1st Source Long/Short Fund		—		—		1,392,157		4,660,126		—		—
Wasatch-1st Source Income Fund		269,703		958,942		1,382,991		—		561,725		—

118

SEPTEMBER 30, 2009

Net capital losses incurred after October 31 and within the taxable year are deemed to arise on the first business day of the Funds’ next taxable year. For the year ended September 30, 2009, the following Funds deferred to October 1, 2009 post October capital losses and post October currency losses of:

Fund	Capital Losses
Core Growth Fund	$	100,851,739
Emerging Markets Small Cap Fund		15,395,461
Global Science & Technology Fund		25,047,035
Heritage Growth Fund		8,872,946
Heritage Value Fund		167,622
International Growth Fund		41,956,975
International Opportunities Fund		8,789,999
Micro Cap Fund		49,455,408
Micro Cap Value Fund		13,505,028
Small Cap Growth Fund		46,379,498
Small Cap Value Fund		83,371,221
Strategic Income Fund		7,690,753
Ultra Growth Fund		32,888,986
Wasatch-1st Source Income Equity Fund		96,811,806
Wasatch-1st Source Long/Short Fund		10,245,932
Wasatch-1st Source Income Fund		602,924

During the tax year ended September 30, 2009, the funds used capital loss carryforwards in the following amounts:

Fund	Amount Used
Wasatch-1st Source Income Equity Fund	$	311,230
U.S. Treasury		4,601,615
Wasatch-1st Source Income Fund		13,344

The tax character of distributions paid during the year or period ended September 30, 2009 was as follows:

2009	Core Growth Fund		Emerging Markets Small Cap Fund		Global Opportunities Fund1		Global Science & Technology Fund		Heritage Growth Fund		Heritage Value Fund
Ordinary income	$	5,739,872	$	29,720	$	—	$	—	$	167,143	$	47,255
Capital gain		—		—		—		—		220,964		—
Total	$	5,739,872	$	29,720	$	—	$	—	$	388,107	$	47,255
2009	International Growth Fund		International Opportunities Fund		Micro Cap Fund		Micro Cap Value Fund		Small Cap Growth Fund		Small Cap Value Fund
Ordinary income	$	466,090	$	168,034	$	777,904	$	—	$	—	$	—
Capital gain		—		—		—		—		1,539,215		—
Total	$	466,090	$	168,034	$	777,904	$	—	$	1,539,215	$	—
2009	Strategic Income Fund		Ultra Growth Fund		Wasatch-1st Source Income Equity Fund		Wasatch-1st Source Long/ Short Fund		U.S. Treasury Fund		Wasatch-1st Source Income Fund
Ordinary income	$	784,968	$	—	$	19,218,020	$	2,025,005	$	5,022,309	$	3,433,282
Capital gain		—		—		—		110,509		—		—
Total	$	784,968	$	—	$	19,218,020	$	2,135,514	$	5,022,309	$	3,433,282

¹ Inception date of the Fund was November 17, 2008.

119

WASATCH FUNDS — Notes to Financial Statements  (continued)

The tax character of distributions paid during the year or period ended September 30, 2008 was as follows:

2008	Core Growth Fund		Emerging Markets Small Cap Fund1		Global Science & Technology Fund		Heritage Growth Fund		Heritage Value Fund		International Growth Fund
Ordinary income	$	9,254,596	$	99,236	$	6,265,922	$	—	$	55,924	$	20,995,608
Capital gain		196,051,701		—		11,168,273		14,407,067		—		47,903,587
Total	$	205,306,297	$	99,236	$	17,434,195	$	14,407,067	$	55,924	$	68,899,195
2008	International Opportunities Fund		Micro Cap Fund		Micro Cap Value Fund		Small Cap Growth Fund		Small Cap Value Fund		Strategic Income Fund
Ordinary income	$	3,840,037	$	4,999,978	$	3,944,821	$	—	$	35,199,888	$	2,956,671
Capital gain		6,278,872		93,390,001		12,484,239		120,648,854		107,894,653		317,486
Total	$	10,118,909	$	98,389,979	$	16,429,060	$	120,648,854	$	143,094,541	$	3,274,157
2008	Ultra Growth Fund		Wasatch-1st Source Income Equity Fund2		Wasatch-1st Source Long/ Short Fund2		U.S. Treasury Fund		Wasatch-1st Source Income Fund2
Ordinary income	$	4,736,134	$	6,063,576	$	419,058	$	4,603,049	$	1,804,021
Capital gain		27,565,914		—		—		—		—
Tax return of capital		—		112,239		59,547		—		—
Total	$	32,302,048	$	6,175,815	$	478,605	$	4,603,049	$	1,804,021

¹ Inception date of the Fund was October 1, 2007.

² Six month period. Effective September 19, 2008 the Fund changed its fiscal year end to September 30.

March 31, 2008	Wasatch-1st Source Income Equity Fund		Wasatch-1st Source Long/ Short Fund		Wasatch-1st Source Income Fund
Ordinary income	$	5,043,122	$	3,276,239	$	3,486,230
Capital gain		13,662,031		613,791		—
Tax return of capital		24,424		—		—
Total	$	18,729,577	$	3,890,030	$	3,486,230

¹ Inception date of the Fund was August 30, 2007.

The tax character of distributions paid may differ from that shown in the Statements of Changes in Net Assets due to short-term gains being treated as ordinary income for tax purposes.

SUPPLEMENTAL TAX INFORMATION (UNAUDITED):

The Funds hereby designate the following amounts or maximum amounts allowable as long term capital gain dividends for the purpose of the dividends paid deduction.

	Amount
Heritage Growth Fund	$	220,964
Small Cap Growth Fund		1,539,215
Wasatch-1st Source Long/Short Fund		110,509

For the fiscal year ended September 30, 2009, certain dividends paid by each Fund may be subject to a maximum tax rate of 15% as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. To the extent dividends are paid during the calendar year 2009, complete information will be reported on shareholders’ 2009 Form 1099-DIV.

The amount designated as qualified dividend income for the year of period ended September 30, 2009 will be at the highest amount permitted by law.

Corporate shareholders should note for the year ended September 30, 2009, the percentage of the Funds’ investment income (i.e., net investment income plus short-term capital gains) that qualified for the corporate dividends received deductions are as follows:

	Percentage
Core Growth Fund	94	%
Heritage Growth Fund	100	%
Heritage Value Fund	12	%
Strategic Income Fund	37	%
Wasatch-1st Source Long/Short Fund	100	%

120

SEPTEMBER 30, 2009

7. RELATED PARTY TRANSACTIONS

Investment Advisory Fees — As the Fund’s investment advisor, the Advisor receives a monthly fee calculated on average daily net assets. The Advisor has contractually agreed to waive its fees and/or reimburse a Fund should a Fund’s operating expenses exceed a specified annual limitation through at least January 31, 2010. Investment advisory fees and fees waived, if any, for the year or period ended September 30, 2009 are disclosed in the Statements of Operations. Investment advisory fee and expense limitation annual rates are shown below.

	Core Growth Fund		Emerging Markets Small Cap Fund		Global Opportunities Fund		Global Science & Technology Fund		Heritage Growth Fund		Heritage Value Fund
Advisory Fee	1.00	%	1.75	%	1.95	%	1.50	%	0.70	%	0.70	%
Expense Limitation	1.50	%	2.10	%	2.25	%	1.95	%	0.95	%	0.95	%
	International Growth Fund		International Opportunities Fund		Micro Cap Fund		Micro Cap Value Fund		Small Cap Growth Fund		Small Cap Value Fund
Advisory Fee	1.50	%	1.95	%	1.95	%	1.95	%	1.00	%	1.50	%
Expense Limitation	1.95	%	2.25	%	2.25	%	2.25	%	1.50	%	1.95	%
	Strategic Income Fund		Ultra Growth Fund		Wasatch- 1st Source Income Equity Fund		Wasatch- 1st Source Long/Short Fund		U.S. Treasury Fund		Wasatch- 1st Source Income Fund
Advisory Fee	0.70	%	1.25	%	0.90	%	1.10	%	0.50	%	0.55	%
Expense Limitation	0.95	%	1.75	%	1.10	%	—		0.75	%	—

Distribution Fees, Waivers — The Wasatch Funds have not adopted a distribution plan with respect to the Funds pursuant to Rule 12b-1 under the 1940 Act.

However, The Coventry Group adopted a Distribution and Shareholder Service Plan (the “Plan”) with respect to the 1st Source Monogram Income Fund, the 1st Source Monogram Income Equity Fund and the 1st Source Monogram Long/Short Fund pursuant to Rule 12b-1 under the 1940 Act under which each Fund was authorized to pay Foreside Distribution Services, L.P., (“Foreside”), the Funds’ distributor, in an amount not in excess, on an annual basis, of 0.25% of the average daily net asset value of the shares of a Fund (the “12b-1 Fee”). Payments of the 12b-1 Fee to Foreside were used (i) to compensate Participating Organizations (as defined below) for providing distribution assistance relating to a Fund’s Shares, (ii) for promotional activities intended to result in the sale of Shares and distribution of prospectuses to other than current shareholders, and (iii) to compensate Participating Organizations for providing shareholder services with respect to their customers who are, from time to time, beneficial and record holders of Shares. Participating Organizations include banks, broker-dealers, Foreside and other institutions. Payments to such Participating Organizations may be made pursuant to agreements entered into with Foreside.

For the six months ended September 30, 2008 and the fiscal year ended March 31, 2008, the Funds voluntarily waived distribution fees to limit total fund operating expenses.

Affiliated Trades — Certain Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined in procedures adopted by the Board of Directors. The procedures have been designed to ensure that any purchase or sale of securities by the Funds from or to another fund that are, or could be, considered an affiliate by virtue of having a common investment advisor (or affiliated investment advisors), common Directors and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, each transaction is effected at the current market price, as that term is defined under the procedures. During the year or period ended September 30, 2009, the Funds below engaged in purchases and sales of securities pursuant to Rule 17a-7 of the 1940 Act:

	Purchases	Sales
Global Opportunities Fund	65,925	—
International Growth Fund	—	465,848
International Opportunities Fund	135,859	—
Micro Cap Fund	—	715,386
Micro Cap Value Fund	—	9,506
Small Cap Growth Fund	692,034	276,726
Small Cap Value Fund	66,850	—
Strategic Income Fund	40,950	—
Ultra Growth Fund	465,848	—

Affiliated Interests — An officer of the Funds owns approximately 38% of the shares outstanding of the Strategic Income Fund as of September 30, 2009. An affiliated person of the Funds owns approximately 15% of the shares outstanding of the Heritage Value Fund as of September 30, 2009.

121

WASATCH FUNDS — Notes to Financial Statements  (continued)

8. TRANSACTIONS WITH AFFILIATES

If a Fund’s holding represents ownership of 5% or more of the voting securities of a company, the company is deemed to be an affiliate as defined by the 1940 Act. The following Funds conducted transactions during the period ended September 30, 2009 with “affiliated companies” as so defined:

	Share Activity					Dividends Credited to Income for the Fiscal Year ended 9/30/09		Loss Realized on Sale of Shares for the Fiscal Year ended 9/30/09
	Balance 9/30/08	Purchases/ Additions	Sales/ Reductions	Balance 9/30/09
Micro Cap Fund
inTEST Corp.	565,045	—	565,045	—	*	$	—	$	(2,831,317	)
Tamalpais Bancorp	254,618	—	100,255	154,363	*		30,371		(1,227,621	)
						$	30,371	$	(4,058,938	)
Small Cap Value Fund
MicroFinancial, Inc.	742,623	—	742,623	—	*	$	35,851	$	(6,809,925	)

*No longer affiliated as of September 30, 2009.

9. RESTRICTED SECURITIES

The Funds may own investments that were purchased through private placement transactions or under Rule 144A of the Securities Act of 1933 (the “Securities Act”) and cannot be sold without prior registration under the Securities Act or may be limited due to certain restrictions. These securities are generally deemed to be illiquid and are valued at fair value as determined by a designated Pricing Committee, comprised of personnel of the Advisor, with oversight by the Board of Directors and in accordance with Board-approved Pricing Policies and Procedures. If and when such securities are registered, the costs of registering such securities are paid by the issuer. At September 30, 2009, the Funds held the following restricted securities:

	Security Type	Acquisition Date	Acquisition Cost		Fair Value		Value as % of Net Assets
Core Growth Fund
Solar Capital, LLC	Common Stock	3/7/07	$	13,200,900	$	7,304,498	1.78	%
Global Opportunities Fund
Cardica, Inc.	PIPE	9/25/09	$	95,200	$	106,304	0.09	%
Cardica, Inc.	Warrants	9/25/09		5,000		5,000	—
			$	100,200	$	111,304	0.09	%
Global Science & Technology Fund
BlueArc Corp.	Warrants	5/30/08	$	—	$	—	—
BlueArc Corp., Series DD	Preferred Stock	6/6/06		324,998		324,998	0.55	%
BlueArc Corp., Series FF	Preferred Stock	5/30/08		628,067		628,067	1.05	%
Cardica, Inc.	PIPE	9/25/09		170,170		190,018	0.32	%
Cardica, Inc.	Warrants	9/25/09		8,937		8,937	0.02	%
Incipient, Inc., Series D	Preferred Stock	2/7/06		139,219		—	—
Montagu Newhall Global Partners II-B, L.P.	LP Interest	10/10/03 - 9/11/09		399,387		339,596	0.57	%
Xtera	Common Stock	9/3/03		7,076		2,154	—
			$	1,677,854	$	1,493,770	2.51	%
Micro Cap Fund
Alexza Pharmaceuticals, Inc.	PIPE	9/29/09	$	758,197	$	676,495	0.25	%
Alexza Pharmaceuticals, Inc.	Warrants	9/29/09		36,766		36,766	0.01	%
Cardica, Inc.	PIPE	9/25/09		767,550		857,076	0.31	%
Cardica, Inc.	Warrants	9/25/09		40,312		40,312	0.01	%
Cardica, Inc.	Warrants	6/7/07		19,380		—	—
Familymeds Group, Inc.	Warrants	12/1/04		—		—	—
Goldwater Bank, N.A.	Common Stock	2/28/07		1,540,000		1,111,880	0.41	%
Ithaca Energy, Inc.	Common Stock	6/5/06		1,965,844		732,168	0.27	%
Washington Trust Bancorp	PIPE	10/2/2008		2,328,800		2,040,029	0.75	%
			$	7,456,849	$	5,494,726	2.01	%

122

SEPTEMBER 30, 2009

	Security Type	Acquisition Date	Acquisition Cost		Fair Value		Value as % of Net Assets
Micro Cap Value Fund
Cardica, Inc.	PIPE	9/25/09	$	262,990	$	293,665	0.25	%
Cardica, Inc.	Warrants	9/25/09		13,813		13,813	0.01	%
Cardica, Inc.	Warrants	6/7/07		9,302		—	—
Familymeds Group, Inc.	Warrants	12/1/04		—		—	—
Goldwater Bank, N.A.	Common Stock	2/28/07		419,000		302,518	0.26	%
Idaho Trust Bancorp	Common Stock	8/30/06		500,004		246,113	0.21	%
NeurogesX, Inc.	PIPE	12/28/07		525,300		680,000	0.59	%
NeurogesX, Inc.	Warrants	12/28/07		3,800		—	—
			$	1,734,209	$	1,536,109	1.32	%
Small Cap Growth Fund
Alexza Pharmaceuticals, Inc.	PIPE	9/29/09	$	949,810	$	847,460	0.10	%
Alexza Pharmaceuticals, Inc.	Warrants	9/29/09		46,058		46,058	0.01	%
Fluidigm Corp. Bridge Financing, 12.00%, 12/31/09	Convertible Note	8/18/09		113,374		113,374	0.01	%
Fluidigm Corp., Series E	Preferred Stock	12/22/06		2,499,994		1,932,138	0.24	%
Fluidigm Corp.	Warrants	8/18/09		11		11	—
Incipient, Inc., Series D	Preferred Stock	2/7/06		1,860,778		—	—
Montagu Newhall Global Partners II-B, L.P.	LP Interest	10/10/03 - 9/11/09		3,993,853		3,395,960	0.42	%
Montagu Newhall Global Partners III-B, L.P.	LP Interest	3/16/06 - 9/14/09		945,000		809,385	0.10	%
Nanosys, Inc., Series D	Preferred Stock	11/8/05		2,000,000		1,105,085	0.14	%
Orexigen Therapeutics, Inc., Series C	PIPE	11/21/2006		1,000,001		1,440,060	0.18	%
Orqis Medical Corp., Series D	Preferred Stock	2/28/07		1,200,000		—	—
TargetRX, Inc., Series D	Preferred Stock	4/8/05		769,098		3,628	—
Valera Pharmaceuticals, Inc. Ureteral Stent CSR	Rights	2/1/06 - 2/2/06		162,615		—	—
Valera Pharmaceuticals, Inc. VP003 (Octreotide Implant) CSR	Rights	2/1/06 - 2/2/06		243,922		—	—
Zonare Medical Systems, Inc.	Common Stock	6/30/04		1,500,000		194,427	0.02	%
Zonare Medical Systems, Inc.	Warrants	6/30/04		—		—	—
			$	17,284,514	$	9,887,586	1.22	%
Small Cap Value Fund
Solar Capital, LLC	Common Stock	3/7/07	$	7,079,100	$	3,917,102	1.80	%
Star Asia Financial Ltd.	Common Stock	2/22/07		6,000,000		54,000	0.02	%
Washington Trust Bancorp	PIPE	10/2/08		3,573,060		3,130,000	1.43	%
			$	16,652,160	$	7,101,102	3.25	%
Strategic Income Fund
Redcorp Ventures Ltd.	PIPE	7/5/07	$	—	$	—	—
Redcorp Ventures Ltd.	Warrants	12/18/08		—		—	—
Redcorp Ventures Ltd., 13.00%, 7/11/12	Corporate Bond	7/5/07		241,978		23,906	0.13	%
Redcorp Ventures Ltd. — NSR Interest	Royalty Interest	12/18/08		—		—	—
Solar Capital, LLC	Common Stock	3/7/07		294,000		162,680	0.92	%
Star Asia Financial Ltd.	Common Stock	2/22/07 - 4/28/08		619,710		15,551	0.09	%
			$	1,155,688	$	202,137	1.14	%
Ultra Growth Fund
Alexza Pharmaceuticals, Inc.	PIPE	9/29/09	$	175,784	$	156,842	0.13	%
Alexza Pharmaceuticals, Inc.	Warrants	9/29/09		8,524		8,524	0.01	%
Cardica, Inc.	PIPE	9/25/09		392,700		438,504	0.36	%
Cardica, Inc.	Warrants	9/25/09		20,625		20,625	0.02	%
Data Sciences International, Inc., Series B	Preferred Stock	1/20/06		475,001		817,574	0.67	%
Montagu Newhall Global Partners II-B, L.P.	LP Interest	10/10/03 - 9/11/09		3,594,467		3,056,369	2.52	%
Montagu Newhall Global Partners III-B, L.P.	LP Interest	3/16/06 - 9/14/09		945,000		809,385	0.67	%
Nanosys, Inc., Series D	Preferred Stock	11/8/05		500,001		276,272	0.23	%
Ophthonix, Inc.	Common Stock	9/23/05		500,000		504	—
TargetRX, Inc., Series D	Preferred Stock	4/8/05		230,904		1,089	—
TherOx, Inc., Series I	Preferred Stock	7/7/05		1,000,000		429,267	0.35	%
Transoma Medical, Inc.	Common Stock	5/12/09		2,531		2,531	—
Xtera	Common Stock	9/3/03		99,065		30,158	0.02	%
Zonare Medical Systems, Inc.	Common Stock	6/30/04		1,000,000		129,618	0.11	%
Zonare Medical Systems, Inc.	Warrants	6/30/04		—		—	—
			$	8,944,602	$	6,177,262	5.09	%

123

WASATCH FUNDS — Notes to Financial Statements  (continued)

10. PURCHASE COMMITMENTS

In September 2003, the Global Science & Technology, Small Cap Growth and Ultra Growth Funds entered into subscription agreements to acquire limited partnership interests in Montagu Newhall Global Partners II-B, L.P. The remaining commitment amounts at September 30, 2009 were $95,000, $950,000 and $855,000, respectively. Securities held by the Funds have been designated to meet these purchase commitments.

In December 2005, the Small Cap Growth and Ultra Growth Funds entered into subscription agreements to acquire limited partnership interests in Montagu Newhall Global Partners III-B, L.P. The remaining commitment amounts at September 30, 2009 were $555,000 per Fund. Securities held by the Funds have been designated to meet these purchase commitments.

11. LINE OF CREDIT

The Equity Funds opened two lines of credit totaling $75,000,000, one of which is $25,000,000 uncommitted, and the other of which is $50,000,000 committed, with State Street Bank and Trust Company on June 4, 2007 (together, the “Line”). The Line is for temporary or emergency purposes such as to provide liquidity for shareholder redemptions. The Equity Funds incur commitment fees on the undrawn portion of the committed part of the Line, and interest expense to the extent of amounts drawn (borrowed) under the entire Line. Interest is based on the higher of (a) the Federal Funds rate as in effect on the date of borrowing, plus a margin, and (b) the overnight LIBOR rate as in effect on the date of borrowing, plus a margin. Commitment fees are pro-rated among the Equity Funds based upon relative average net assets. Interest expense is charged directly to the fund based upon actual amounts borrowed by the fund.

The following Funds had borrowings:

Fund	Average Daily Borrowings		Number of Days Outstanding	Interest Expense		Weighted Average Annualized Interest Rate		Balance at September 30, 2009
Core Growth	$	5,797,824	17	$	2,981	1.09	%	$	—
Emerging Markets Small Cap		476,594	32		379	0.89	%		—
Global Science & Technology		2,368,333	6		365	0.92	%		—
Heritage Growth		308,318	22		150	0.80	%		—
International Growth		1,365,543	70		2,477	0.93	%		—
Small Cap Growth		2,358,000	30		1,454	0.74	%		—
Small Cap Value		727,923	13		327	1.24	%		—
Ultra Growth		714,609	23		493	1.08	%		—

12. PRINCIPAL RISKS

Market and Credit Risk — In the normal course of business the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to a transaction to perform (credit risk). Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss could exceed the value of the financial assets recorded in the financial statements. Financial assets, which potentially expose the Funds to credit risk, consist principally of cash due from counterparties and investments. The extent of the Funds’ exposure to credit and counterparty risks in respect to these financial assets approximates their carrying value as recorded in the Funds’ Statements of Assets and Liabilities.

Interest Rate Risk — Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. A rise in interest rates typically causes a fall in values. Interest rate risk should be modest for shorter-term securities, moderate for intermediate-term securities and high for longer-term securities. Generally, an increase in the average maturity of a Fund will make it more sensitive to interest rate risk.

Foreign Currency Risk — If a Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the U.S. dollar. This also includes the risk associated with higher transaction costs, delayed settlements, currency controls and adverse economic developments related to foreign investments.

Concentration Risk — Emerging Markets Small Cap Fund, Global Opportunities Fund, Global Science & Technology Fund, International Growth Fund and International Opportunities Fund each invest in equity and fixed income securities of non-U.S. issuers. Although the Funds maintain a diversified investment portfolio, political or economic developments within a particular country or region may have an adverse effect on the ability of domiciled issuers to meet their obligations. Additionally, political or economic developments may have an adverse effect on the liquidity and volatility of portfolio securities and currency holdings.

Shareholder Concentration Risk — A significant portion of the net assets of the International Opportunities Fund is owned by a group of shareholders advised by a common investment adviser. If this group of shareholders simultaneously redeems on the advice of their investment adviser, Fund expenses may increase and performance may be materially affected.

124

SEPTEMBER 30, 2009

13. FAIR VALUE MEASUREMENTS

The various inputs used in determining the fair value of the Funds’ investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical investments

• Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following is a summary of the fair valuations according to the inputs used as of September 30, 2009 in valuing the Fund’s assets and liabilities:

Fund	Category	Quoted Prices in Active Markets for Identical Investments (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Value at 9/30/2009
Core Growth Fund
Common Stocks	Asset Management & Custody Banks	$	14,290,037		$	—	$	7,304,498	$	21,594,535
	Other		364,284,616			—		—		364,284,616
Preferred Stocks			5,170,341			—		—		5,170,341
Short-Term Investments			—			20,923,000		—		20,923,000
		$	383,744,994		$	20,923,000	$	7,304,498	$	411,972,492
Emerging Markets Small Cap Fund
Common Stocks	Restaurants	$	921,797		$	—	$	114,864	$	1,036,661
	Other		45,874,533			—		—		45,874,533
Preferred Stocks			2,251,663			—		—		2,251,663
Short-Term Investments			—			1,066,000		—		1,066,000
Other Financial Instruments			(995	)		—		—		(995	)
		$	49,046,998		$	1,066,000	$	114,864	$	50,227,862
Global Opportunities Fund
Common Stocks	Auto Parts & Equipment	$	—		$	—	$	29,082	$	29,082
	Health Care Equipment		6,979,270			—		106,304		7,085,574
	Personal Products		331,898			—		5,014		336,912
	Other		93,527,501			—		—		93,527,501
Preferred Stocks			771,566			—		—		771,566
Warrants			—			5,000		—		5,000
Short-Term Investments			—			15,949,000		—		15,949,000
Other Financial Instruments			192			—		—		192
		$	101,610,427		$	15,954,000	$	140,400	$	117,704,827
Global Science & Technology Fund
Common Stocks	Health Care Equipment	$	4,199,308		$	—	$	190,018	$	4,389,326
	Internet Software & Services		2,055,437			—		2,154		2,057,591
	Other		44,239,255			—		—		44,239,255
Preferred Stocks			—			—		953,065		953,065
Exchange Traded Funds			572,033			—		—		572,033
Limited Partnership Interest			—			—		339,596		339,596
Warrants			—			8,937		—		8,937
Short-Term Investments			—			7,933,000		—		7,933,000
Other Financial Instruments			(5	)				—		(5	)
		$	51,066,028		$	7,941,937	$	1,484,833	$	60,492,798
Heritage Growth Fund
Common Stocks		$	73,712,015		$	—	$	—	$	73,712,015
Short-Term Investments			—			1,455,000		—		1,455,000
Other Financial Instruments			4,315			—		—		4,315
		$	73,716,330		$	1,455,000	$	—	$	75,171,330
Heritage Value Fund
Common Stocks		$	3,084,017		$	—	$	—	$	3,084,017
Preferred Stocks			102,500			—		—		102,500
Short-Term Investments			—			360,000		—		360,000
		$	3,186,517		$	360,000	$	—	$	3,546,517

125

WASATCH FUNDS — Notes to Financial Statements  (continued)

Fund	Category	Quoted Prices in Active Markets for Identical Investments (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Value at 9/30/2009
International Growth Fund
Common Stocks		$	163,970,184		$	—	$	—	$	163,970,184
Preferred Stocks			3,571,928			—		—		3,571,928
Short-Term Investments			—			3,546,000		—		3,546,000
Other Financial Instruments			(11,190	)		—		—		(11,190	)
		$	167,530,922		$	3,546,000	$	—	$	171,076,922
International Opportunities Fund
Common Stocks	Auto Parts & Equipment	$	—		$	—	$	58,871	$	58,871
	Education Services		847,552			—		7,387		854,939
	Internet Software & Services		676,206			209,130		—		885,336
	Personal Products		513,432			—		8,523		521,955
	Restaurants		1,510,826			—		288,623		1,799,449
	Other		73,597,073			—		—		73,597,073
Preferred Stocks			1,237,352			—		—		1,237,352
Exchange Traded Funds			3,230,503			—		—		3,230,503
Short-Term Investments			—			12,273,000		—		12,273,000
Other Financial Instruments			976			—		—		976
		$	81,613,920		$	12,482,130	$	363,404	$	94,459,454
Micro Cap Fund
Common Stocks	Health Care Equipment	$	13,630,673		$	—	$	857,076	$	14,487,749
	Pharmaceuticals		—			—		676,495		676,495
	Specialized Finance		3,342,771			—		1,111,880		4,454,651
	Other		236,870,884			—		—		236,870,884
Preferred Stocks			3,108,117			—		—		3,108,117
Warrants			—			77,078		—		77,078
Short-Term Investments			—			14,428,000		—		14,428,000
		$	256,952,445		$	14,505,078	$	2,645,451	$	274,102,974
Micro Cap Value Fund
Common Stocks	Diversified Banks	$	—		$	—	$	246,113	$	246,113
	Health Care Equipment		5,817,746			—		293,665		6,111,411
	Specialized Finance		1,791,201			—		302,518		2,093,719
	Steel		1,240,980			—		1,561,340		2,802,320
	Other		89,154,383			—		—		89,154,383
Warrants			—			13,813		—		13,813
Short-Term Investments			—			13,928,000		—		13,928,000
Other Financial Instruments			92			—		—		92
		$	98,004,402		$	13,941,813	$	2,403,636	$	114,349,851
Small Cap Growth
Common Stocks	Health Care Equipment	$	16,524,276		$	—	$	194,427	$	16,718,703
	Pharmaceuticals		6,131,045			—		847,460		6,978,505
	Other		704,812,672			—		—		704,812,672
Preferred Stocks			—			—		3,040,851		3,040,851
Limited Partnership Interest			—			—		4,205,345		4,205,345
Convertible Note			—			—		113,374		113,374
Warrants			—			46,058		11		46,069
Rights			—			—		—		—
Short-Term Investments			—			81,535,000		—		81,535,000
		$	727,467,993		$	81,581,058	$	8,401,468	$	817,450,519
Small Cap Value Fund
Common Stocks	Asset Management & Custody Banks	$	5,759,448		$	—	$	3,917,102	$	9,676,550
	Diversified REITs		—			54,000		—		54,000
	Steel		2,275,926			—		2,977,249		5,253,175
	Other		194,690,765			—		—		194,690,765
Short-Term Investments			—			9,146,000		—		9,146,000
		$	202,726,139		$	9,200,000	$	6,894,351	$	218,820,490

126

SEPTEMBER 30, 2009

Fund	Category	Quoted Prices in Active Markets for Identical Investments (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Value at 9/30/2009
Strategic Income Fund
Common Stocks	Asset Management & Custody Banks	$	1,615,947		$	—	$	162,680	$	1,778,627
	Diversified REITs		169,260			15,551		—		184,811
	Other		10,997,185					—		10,997,185
Exchange Traded Funds			395,524			—		—		395,524
Limited Partnership Interest			340,202			—		—		340,202
Royalty Interest			—			—		—		—
Corporate Bonds			—			390,406		—		390,406
Warrants			—			—		—		—
Put Options Purchased			76,000			—		—		76,000
Short-Term Investments			—			3,149,000		—		3,149,000
Call Options Written			(12,345	)		—		—		(12,345	)
Securities Sold Short			(87,929	)		—		—		(87,929	)
Other Financial Instruments			406			—		—		406
		$	13,494,250		$	3,554,957	$	162,680	$	17,211,887
Ultra Growth Fund
Common Stocks	Health Care Equipment	$	4,409,296		$	—	$	568,122	$	4,977,418
	Health Care Technology		1,824,908					2,531		1,827,439
	Internet Software & Services		2,380,632					30,158		2,410,790
	Personal Products		1,258,689			—		504		1,259,193
	Pharmaceuticals		129,514			—		156,842		286,356
	Other		102,602,422			—		—		102,602,422
Preferred Stocks			—			—		1,524,202		1,524,202
Limited Partnership Interest			—			—		3,865,754		3,865,754
Warrants			—			29,149		—		29,149
Short-Term Investments			—			2,745,000		—		2,745,000
		$	112,605,461		$	2,774,149	$	6,148,113	$	121,527,723
Wasatch-1st Source Income Equity Fund
Common Stocks		$	1,315,207,930		$	—	$	—	$	1,315,207,930
Short-Term Investments			—			80,694,000		—		80,694,000
		$	1,315,207,930		$	80,694,000	$	—	$	1,395,901,930
Wasatch-1st Source Long/Short Fund
Common Stocks		$	110,670,763		$	—	$	—	$	110,670,763
Preferred Stocks			6,477,086			—		—		6,477,086
Limited Partnership Interest			2,314,500			—		—		2,314,500
Short-Term Investments			—			31,385,000		—		31,385,000
Call Options Written			(1,542,120	)		—		—		(1,542,120	)
Securities Sold Short			(22,336,323	)		—		—		(22,336,323	)
		$	95,583,906		$	31,385,000	$	—	$	126,968,906
U.S. Treasury Fund
U.S. Government Obligations		$	41,829,570		$	110,974,256	$	—	$	152,803,826
Short-Term Investments			—			879,000		—		879,000
		$	41,829,570		$	111,853,256	$	—	$	153,682,826
Wasatch-1st Source Income Fund
Asset Backed Securities		$	—		$	3,669,552	$	—	$	3,669,552
Collateralized Mortgage Obligations			—			32,900,861		—		32,900,861
Corporate Bonds			—			29,863,117		—		29,863,117
Municipal Bonds			—			1,219,557		1,578,555		2,798,112
Mutual Funds			694,076			—		—		694,076
Exchange Traded Funds			1,493,520			—		—		1,493,520
U.S. Government Agency Securities			—			23,339,587		—		23,339,587
U.S. Treasury Notes			—			9,737,031		—		9,737,031
U.S. Treasury Inflation Protected Securities			—			4,983,744		—		4,983,744
Preferred Stocks			659,647			—		—		659,647
Short-Term Investments			—			3,440,000		—		3,440,000
		$	2,847,243		$	109,153,449	$	1,578,555	$	113,579,247

127

WASATCH FUNDS — Notes to Financial Statements  (continued)

The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) for the fund during the period ending September 30, 2009:

Fund		Market Value Beginning Balance 10/01/2008		Purchases at Cost/ Sales (Proceeds)		Realized Gain/(Loss)			Change in Unrealized Gain/(Loss)			Transfers in and/or out at Market Value		Market Value Ending Balance 9/30/2009
Core Growth Fund	Investments in Securities	$	12,031,546	$	—	$	(12,181,174	)	$	7,454,126		$	—	$	7,304,498
Emerging Markets Small Cap Fund	Investments in Securities		—		—		—			(78,304	)		193,168		114,864
Global Opportunities	Investments in Securities		—		95,200		—			(45,329	)		90,529		140,400
Global Science & Technology Fund	Investments in Securities		1,380,784		205,170		(21,508	)		(79,613	)		—		1,484,833
International Opportunities Fund	Investments in Securities		2,428		—		(815,284	)		511,048			665,213		363,405
Micro Cap Fund	Investments in Securities		1,235,453		1,525,747		(4,883,105	)		4,767,356			—		2,645,451
Micro Cap Value Fund	Investments in Securities		835,454		262,990		(1,040,181	)		813,459			1,531,914		2,403,636
Small Cap Growth Fund	Investments in Securities		11,678,921		947,988		(213,003	)		(4,012,438	)		—		8,401,468
Small Cap Value Fund	Investments in Securities		6,450,945		—		(3,328,550	)		850,819			2,921,137		6,894,351
Strategic Income Fund	Investments in Securities		267,540		—		—			(104,860	)		—		162,680
Ultra Growth Fund	Investments in Securities		9,122,653		420,813		73,773			(3,469,126	)		—		6,148,113
Wasatch-1st Source Income Fund	Investments in Securities		1,617,000		—		—			(38,445	)		—		1,578,555

14. FAIR VALUE OF DERIVATIVE INSTRUMENTS*

The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure:

WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts			Other Contracts			Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain/(loss) on investments and foreign currency translations	$	—	$	—	$	—	$	(539,388	)	$	(244,703	)	$	(784,091	)

WASATCH HERITAGE GROWTH FUND

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts			Other Contracts		Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain on options written	$	—	$	—	$	—	$	53,904		$	—	$	53,904
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments and foreign currency translations	$	—	$	—	$	—	$	(6,570	)	$	—	$	(6,570	)

128

SEPTEMBER 30, 2009

WASATCH HERITAGE VALUE FUND

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts			Other Contracts		Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain on options written	$	—	$	—	$	—	$	93,828		$	—	$	93,828
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments and foreign currency translations	$	—	$	—	$	—	$	(712	)	$	—	$	(712	)

WASATCH MICRO CAP VALUE FUND

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts			Other Contracts		Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain on options written	$	—	$	—	$	—	$	611,238		$	—	$	611,238
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments and foreign currency translations	$	—	$	—	$	—	$	(18,796	)	$	—	$	(18,796	)

WASATCH SMALL CAP VALUE FUND

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts		Other Contracts		Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain on options written	$	—	$	—	$	—	$	482,491	$	—	$	482,491

WASATCH STRATEGIC INCOME FUND

Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts		Other Contracts		Total
Assets Derivatives
Investments, at market value	$	—	$	—	$	—	$	—	$	76,000	$	76,000
Liabilities Derivatives
Call options written at value	$	—	$	—	$	—	$	12,345	$	—	$	12,345

129

WASATCH FUNDS — Notes to Financial Statements  (continued) SEPTEMBER 30, 2009

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts		Other Contracts			Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain/(loss) on investments and foreign currency translations	$	—	$	—	$	—	$	—	$	(203,944	)	$	(203,944	)
Net realized gain on options written		—		—		—		43,721		—			43,721
	$	—	$	—	$	—	$	43,721	$	(203,944	)	$	(160,223	)
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments and foreign currency translations	$	—	$	—	$	—	$	8,532	$	(146,200	)	$	(137,668	)

WASATCH-1ST SOURCE LONG/SHORT FUND

Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts		Other Contracts		Total
Liabilities Derivatives
Call options written at value	$	—	$	—	$	—	$	1,542,120	$	—	$	1,542,120

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended September 30, 2009:

	Derivatives not accounted for as hedging instruments under Statement 133
	Interest Rate Contracts		Foreign Exchange Contracts		Credit Contracts		Equity Contracts		Other Contracts		Total
Realized Gain/(Loss) on Derivatives Recognized in Income
Net realized gain on options written	$	—	$	—	$	—	$	1,315,878	$	—	$	1,315,878
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments and foreign currency translations	$	—	$	—	$	—	$	62,272	$	—	$	62,272

* See Note 2 — Significant Accounting Policies for additional information.

The derivative instruments outstanding as of September 30, 2009 as disclosed in the Notes to the Schedules of Investments and the amounts of realized and changes in unrealized gains and losses on derivative instruments during the period as disclosed in the Statement of Operations serve as indicators of the volume of derivative activity for the Funds.

15. SUBSEQUENT EVENTS

Management has evaluated the possibility of subsequent events existing in the Funds’ financial statements through November 25, 2009, the date the financial statements were available to be issued. Management believes that there are no additional material events that would require disclosure in the Funds’ financial statements through this date.

130

WASATCH FUNDS — Report of Independent Registered Public Accounting Firm

To the Board of Directors

and Shareholders of

Wasatch Funds, Inc.

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of each of the funds constituting the Wasatch Funds, Inc. (hereafter referred to as the “Funds”) at September 30, 2009, for the Wasatch-1st Source Income Equity Fund, Wasatch-1st Source Income Fund, and Wasatch-1st Source Long/Short Fund the results of each of their operations, changes in net assets and financial highlights for the year then ended, and for the remaining funds constituting the Funds the results of each of their operations for the period then ended, the changes in each of their net assets and financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities September 30, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial statements of the Wasatch-1st Source Income Equity Fund, Wasatch-1st Source Income Fund, and Wasatch-1st Source Long/Short Fund as of September 30, 2008, and the changes in each of their net assets and financial highlights for the six months then ended were audited by other auditors whose report dated November 26, 2008 expressed an unqualified opinion on those statements. The financial statements of the Wasatch-1st Source Income Equity Fund, Wasatch-1st Source Income Fund, and Wasatch-1st Source Long/Short Fund as of March 31, 2008, and the changes in each of their net assets for the year then ended and the financial highlights for each of the four years in the period then ended were audited by other auditors whose report dated May 22, 2008 expressed an unqualified opinion.

PricewaterhouseCoopers LLP

Kansas City, MO

November 25, 2009

131

WASATCH FUNDS — Supplemental Information SEPTEMBER 30, 2009 (UNAUDITED)

MANAGEMENT OF THE COMPANY

Management Information. The business affairs of Wasatch Funds are supervised by its Board of Directors. The Board consists of four directors who are elected and serve until their successors are elected and qualified.

The directors and executive officers of Wasatch Funds and their principal occupations for at least the last five years are set forth below.

Name, Address and Age	Position(s) Held with Wasatch Funds	Term of Office1 and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held by Director2
Independent Directors
James U. Jensen, J.D., MBA c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 65	Director and Chairman of the Board	Indefinite Served as Chairman of the Board since 2004 and Director since 1986	Chief Executive Officer of Clearwater Governance Group (an operating board governance consulting company) July 2008 to present; Co-Founder and Chairman of the Board of Intelisum, Inc. (a company pursuing computer and measurement technology and products) 2001 to 2008; Consultant on corporate growth and technology transfer since 2004; Vice President, Corporate Development, Legal Affairs and General Counsel, and Secretary, NPS Pharmaceuticals, Inc. from 1991 to 2004.	18	Private companies and foundations. Director of Cognigen Networks, Inc. (Internet and relationship enabled marketing company) since December 2007. Director of Bayhill Capital Corp. (telephone communications) since December 2007.
William R. Swinyard, Ph.D. c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 69	Director and Chairman of the Audit Committee	Indefinite Served as Chairman of the Audit Committee since 2004 and Director since 1986	Professor of Business Management and Holder of the Fred G. Meyer Chair of Marketing (Emeritus), Brigham Young University since 1978.	18	None
D. James Croft, Ph.D. c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 67	Director	Indefinite Served as Director since 2005	Consultant since 2004 and Founder & Executive Director, Mortgage Asset Research Institute from 1990 to 2004.	18	None
Interested Director
Samuel S. Stewart, Jr., Ph.D. CFA3 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 67	President and Director	Indefinite Served as President and Director since 1986	Chairman of the Board for the Advisor since 1975; Chief Investment Officer of the Advisor since 2004; Director of Research of the Advisor from 1975 to 2004; Chairman of the Board of Wasatch Funds from 1986 to 2004.	18	None

¹ A Director may serve until his death, resignation, removal or retirement. Each Independent Director shall retire as Director at the end of the calendar year in which he attains the age of 72 years.

² Directorships are those held by a Director in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of the Securities Exchange Act or any company registered as an investment company under the 1940 Act.

³ Mr. Stewart is an Interested Director because he serves as a director and officer of the Advisor.

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WASATCH FUNDS — Supplemental Information (continued)

Name, Address and Age	Position(s) Held with Wasatch Funds	Term of Office and Length of Time Served	Principal Occupation(s) during Past 5 Years
Officers
Daniel D. Thurber 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 40	Vice President	Indefinite Served as Vice President since February 2007	General Counsel, Chief Compliance Officer and Director of Compliance for the Advisor since 2006; Chief Compliance Officer and Secretary for Wasatch Funds from May 2006 to February 2007; Associate and Partner at Dorsey & Whitney LLP from 2001 to 2006.
Russell L. Biles 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 41	Chief Compliance Officer, Vice President and Secretary	Indefinite Served as Chief Compliance Officer and Vice President since February 2007 and Secretary since November 2008	Chief Compliance Officer and Vice President for Wasatch Funds since February 2007; Counsel for the Advisor since October 2006; Senior Compliance Administrator for the Advisor from October 2005 to October 2006; Attorney and Managing Member of Nicholls Nicholls Biles & Bower, LLC from 2002 to 2005.
Eric Huefner 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 45	Vice President and Treasurer	Indefinite Served as Vice President since February 2008 and Treasurer from November 2008 to May 2009	Vice President for Wasatch Funds since February 2008; Director of Mutual Funds for the Advisor since June 2006; Business Director, Campbell Soup Company, March 2003 to May 2006.
Cindy B. Firestone, CPA 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 51	Treasurer	Indefinite Served as Treasurer since May 2009	Treasurer for Wasatch Funds since May 2009, Assistant Treasurer for Wasatch Funds from November 2008 to May 2009; Internal Auditor for the Advisor since December 2002.

Additional information about the Funds’ directors is provided in the Statement of Additional Information and is available without charge, upon request, by calling 800.551.1700.

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SEPTEMBER 30, 2009 (UNAUDITED)

PROXY VOTING POLICIES, PROCEDURES AND RECORD

A description of the policies and procedures that Wasatch Advisors uses to vote proxies related to the Funds’ portfolio securities is set forth in the Funds’ Statement of Additional Information which is available without charge, upon request, on the Funds’ web site at www.wasatchfunds.com or by calling 800.551.1700 and on the Securities and Exchange Commission’s (SEC) web site at www.sec.gov.

Wasatch Funds’ proxy voting record is available on the Funds’ web site at www.wasatchfunds.com and the SEC’s web site at www.sec.gov no later than August 31 for the prior 12 months ending June 30.

QUARTERLY PORTFOLIO HOLDINGS DISCLOSURE ON FORM N-Q

The Funds file their complete schedules of investments with the SEC for their first and third fiscal quarters of each fiscal year, commencing with the quarter ended December 31, 2004, on Form N-Q. The Funds’ Form N-Q is available on the SEC’s web site at www.sec.gov, and may be viewed at the SEC’s Public Reference Room in Washington, D.C. (information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330).

DISCLOSURE FOR BOARD APPROVAL OF ADVISORY AND SERVICE CONTRACT FOR THE HERITAGE VALUE FUND

At a meeting held on May 13, 2009 (the “May Meeting”), the Board of Directors of Wasatch Funds, Inc. (the “Company”), including the Independent Directors, unanimously approved the Advisory and Service Contract (the “Advisory Contract”) between the Company on behalf of the Heritage Value Fund and Wasatch Advisors. To assist the Board in its evaluation of the Advisory Contract, the Independent Directors received materials and other information, in adequate time in advance of the May Meeting, which outlined, among other things:

• the terms and conditions of the Advisory Contract, including the nature, extent and quality of services provided by the Advisor;

• the organization and business operations of the Advisor, including the experience of persons manage the Fund;

• the profitability of the Advisor from serving as adviser to the Fund (plus profitability analysis for advisers to unaffiliated investment companies generally and the expenses of the Advisor in providing the services);

• the management fees of the Advisor, including comparisons of such fees with the management fees of comparable, unaffiliated funds prepared by an independent third party and the Advisor’s fee schedule for other clients;

• the expenses of the Fund, including comparisons with the expense ratios of comparable, unaffiliated funds compiled by an independent third party;

• the Fund’s past performance plus such Fund’s performance compared to funds of similar investment objectives compiled by an independent third party and with recognized benchmarks; and

• from Independent Counsel, a legal memorandum outlining, among other things, the duties of the Independent Directors under the 1940 Act, as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an adviser’s fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and factors to be considered by the Board in voting on advisory agreements.

In addition to the materials, as noted, the Independent Directors met in executive session with Independent Counsel to discuss, among other things, the Advisory Contract, the materials provided, and the Board’s duties in reviewing and approving advisory contracts. The Independent Directors, in consultation with Independent Counsel, also reviewed the factors set out in judicial decisions and SEC directives relating to the renewal of advisory contracts. The information provided for the meeting supplements the information the Board received throughout the year regarding the Fund’s performance, expense ratios, portfolio composition, trade execution and sales activity. In this regard, the Independent Directors considered and recognized the extraordinary and challenging market conditions during the prior year and therefore focused their attention on the Fund’s performance throughout the year, including the Board’s deliberations at a special meeting held on October 17, 2008 (the “October Meeting”). In response to a request from the Board, for the October Meeting, each portfolio manager of the Wasatch Funds, including the portfolio manager of the Heritage Value Fund, provided written reviews of their respective Fund’s performance and proposed modifications deemed necessary or appropriate to the manner in which the Fund is managed. At the October Meeting, the Board met with management to discuss, among other things, the Advisor’s investment process and philosophy, investment strategies, and the portfolio managers’ evaluations of their respective Fund’s performance. The Independent Directors also met in Executive session with Independent Legal Counsel to discuss, among other things, each Fund’s performance, the portfolio managers’ reviews and recommendations, if any, and the current market environment.

As outlined in more detail below, the Independent Directors considered all factors they believed relevant with respect to the Fund, including the following: (a) the nature, extent and quality of the services to be provided by the Advisor; (b) the investment performance of the Fund as available (as described in further detail in Section (B) below); (c) the profits to be realized by the Advisor from the relationship with the Fund; (d) the extent to which economies of scale would be realized as the Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors.

A. NATURE, EXTENT AND QUALITY OF SERVICES

In evaluating the nature, extent and quality of the Advisor’s services, the Independent Directors reviewed

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WASATCH FUNDS — Supplemental Information (continued)

information concerning the types of services (advisory and non-advisory or administrative services) that the Advisor provides to the Fund; the performance record of the Fund; and information describing the Advisor’s organization and business. In connection with their service as Independent Directors of the Company, the Independent Directors also periodically have met with the Advisor’s personnel and have evaluated their professional experience, qualifications and credentials as well as their investment approach and research process. Given the Independent Directors’ experience with the Fund and Advisor, the Independent Directors were familiar with and have a good understanding of the organization, operations, investment philosophy and personnel of the Advisor.

In connection with their review of the advisory services being provided, the Independent Directors considered the investment philosophy and investment mandates of the Fund and whether the Advisor has performed consistently with such philosophy and mandates. While the Directors believe that the Advisor has consistently applied its traditional investment philosophy and processes in managing the Fund, the Directors also have recognized the Advisor’s continual review of its research process in order to keep refining and improving its investment process, particularly in light of recent market conditions. The Independent Directors further reviewed the compensation arrangements of the Advisor’s personnel to evaluate the Advisor’s ability to attract and retain key employees, including portfolio managers, preserve stability and reward performance but not provide an incentive for taking undue risks. In addition to compensation, the Directors also considered the Advisor’s succession plans to preserve stability over time. In light of the regulatory emphasis on compliance, in reviewing the services that have been provided to the Fund, the Independent Directors also considered the Advisor’s compliance activities and regulatory history.

In their review of services, the Independent Directors also evaluated the quality of administrative or non-advisory services provided. The terms of the Advisory Contract provide that the Advisor shall administer the Company’s affairs, including those of the Heritage Value Fund, to the extent requested by and subject to the supervision of the Board for the period and terms of the contract. In this regard, the Advisor provides business, administrative, compliance, marketing and other services required to operate the Fund, such as assistance with preparation and filing of regulatory and tax reports, preparation and distribution of prospectuses and shareholder reports, provision of information to Fund directors, analysis to ensure compliance with federal and state laws and regulations, valuation of portfolio securities, and oversight of the performance of the Fund’s service providers (e.g., administrator, fund accountant, transfer agent and custodian). The Advisor also pays for office space and facilities for the Fund. In reviewing the services provided, the Independent Directors considered the changes to Advisor personnel and the impact on the level of services provided to the Fund, if any.

Based on their review, the Independent Directors found that, overall, the nature, extent and quality of services provided under the Advisory Contract were satisfactory on behalf of the Fund.

B. THE INVESTMENT PERFORMANCE OF THE FUND

In evaluating the Fund’s performance, the Directors reviewed the historical performance of the Fund relative to its peer group and relevant benchmarks. More specifically, the Independent Directors reviewed, among other things, materials reflecting the Fund’s total return performance for the one-year and since inception periods ending March 31, 2009 compared to its respective benchmarks and unaffiliated funds in its investment category (a “Peer Group”). This information supplemented the performance information provided to the Board at each of its quarterly meetings as well as at other meetings or executive sessions held during the year in response to the Board’s requests, including the October Meeting. The Independent Directors further considered the performance of the Fund in the context of the volatile market conditions during the past year. Based on their review and in light of the above considerations, the Independent Directors were satisfied with Fund performance during these extraordinary times.

C. FEES, EXPENSES AND PROFITABILITY

1. Fees and Expenses

In their evaluation of fees and expenses, the Independent Directors reviewed the Advisor’s management fees and expense ratios for the Fund in absolute terms as well as with comparisons of fees and expenses of funds in its closest Peer Group. In this regard, the Independent Directors reviewed and considered, among other things, comparisons of the Fund’s actual management fees, total expenses (including and excluding 12b-1/non-12b-1 service fees), and non-management expenses (such as transfer agency, custodian, administrative and accounting fees) with those of unaffiliated funds in its Peer Group compiled by an independent third party. In reviewing fees, the Independent Directors also considered the expense limitation agreement provided by the Advisor for the Fund and the amounts the Advisor has reimbursed to the Fund for the last two fiscal years which effectively reduces the amount of advisory fees paid to the Advisor.

As noted above, the Independent Directors considered not only the Fund’s management fee, but also its total expense ratio compared to its Peer Group. In this regard, the Fund had a total expense ratio (after fee waivers and expense reimbursements) and management fee below the median in its closest Peer Group.

In addition to reviewing fees and expenses in absolute terms and in comparisons to peers, the Independent Directors recognized the Advisor’s research intensive investment approach and the related costs, including, in particular, the Advisor’s significant investment in its research personnel. Given the foregoing, the Independent Directors determined that the current advisory fee levels were acceptable.

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SEPTEMBER 30, 2009 (UNAUDITED)

2. Fees Charged to Other Advisor Clients

In reviewing fees, the Independent Directors also considered the advisory fees to the fees the Advisor assesses other types of clients, including institutional and high net worth separate accounts and a private investment company. Currently, the Advisor does not manage a separate account portfolio in a style similar to that used for the Heritage Value Fund. The Independent Directors, however, are familiar with the fees the Advisor assesses other separately managed accounts following other investment strategies which are generally the same or higher than that for the Fund. In addition, with respect to the private investment company, the Independent Directors recognized that such company is not subject to the extensive regulatory scheme required of operating registered investment companies such as the Fund, and therefore the services required differ. The Independent Directors further noted the advisory fee arrangement of the private investment company with the Advisor provides for a performance fee and therefore its fee structure differs significantly from that of the Fund.

3. Profitability of Advisor

The Independent Directors reviewed pro forma profitability information for the Advisor derived from its relationship with the Fund for the calendar year ending December 31, 2008. In reviewing profitability, the Independent Directors reviewed the methodology utilized to allocate revenue and expenses of the Advisor among its product lines, including the funds. In considering profitability, the Independent Directors have recognized the inherent limitations in determining profitability which may be affected by many factors, including the allocation of expenses across multiple investment products served by the Advisor. The allocation of research and personnel expenses is also particularly difficult given the Advisor’s shared research culture. The Independent Directors further noted the impact on profitability due to the Advisor’s compensation arrangements and the reduction of assets under management during the recent challenging market conditions. The Independent Directors, however, also recognized that this is a relatively new Fund for which the Advisor is reimbursing certain Fund expenses and waiving a portion of its management fee. In addition to reviewing the Advisor’s profitability, the Directors also reviewed the Advisor’s relative profitability compared to publicly available information concerning unaffiliated advisers. However, the Independent Directors recognized the difficulties in comparing the profitability of various advisors given that individual fund or product line profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by numerous factors including the structure of the particular adviser, the types of funds managed, its business mix, expense allocations, and the adviser’s capital structure and cost of capital. The Independent Directors noted that the Advisor’s profitability with respect to its mutual fund advisory services is within a reasonable range compared to the peer group of unaffiliated advisers. Based

on their review, the Independent Directors were satisfied that the Advisor’s level of profitability from its relationship with the Fund was not unreasonable in light of the services provided.

In addition to the above, the Independent Directors also considered that the Advisor benefits from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute the Fund’s purchases and sales of securities, as described in further detail below.

D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE

In reviewing advisory fees, the Independent Directors recognized that the advisory fee schedule for the Fund does not contain breakpoints that reduce the fee rate on assets above certain levels. The Independent Directors, however, noted that the management fee rate paid by the Fund was below the median fee rate of its closest Peer Group. Further, the Advisor has reimbursed certain Fund expenses and waived a portion of its management fees during the last two fiscal years effectively subsidizing the Fund until it reaches an adequate scale. The Independent Directors also have noted the costs associated with the Advisor’s research intensive investment approach. Considering the factors above, the Independent Directors concluded the absence of breakpoints was acceptable.

E. INDIRECT BENEFITS

In evaluating fees, the Independent Directors also considered any indirect benefits or profits the Advisor or its affiliates may receive as a result of its relationship with the Fund. In this regard, the Independent Directors considered that the Advisor benefits from soft dollar arrangements pursuant to which it receives research from brokers that execute the Fund’s brokerage transactions. The Independent Directors reviewed information regarding the soft dollar arrangements including, among other things, the commissions paid, the research credits earned and the services provided. Further, the Independent Directors at prior meetings have had extensive discussions regarding the soft dollar arrangements. The Independent Directors recognized that soft dollar arrangements provide benefits to the Advisor derived from the Fund’s transaction by obtaining research that it would otherwise have to acquire with hard dollars. Accordingly, the Advisor’s profitability would be somewhat lower if it did not receive the research services pursuant to soft dollar arrangements. The Independent Directors took these “fall out” benefits into account when reviewing the level of advisory fees.

F. APPROVAL

The Independent Directors did not identify any single factor discussed previously as all-important or controlling. The Independent Directors, including a majority of Independent Directors, concluded that the terms of the Advisory Contract for the Fund were fair and reasonable, that the Advisor’s fees are reasonable in light of the services provided to the Fund, and that the Advisory Contract should be and was approved on behalf of the Fund.

136

WASATCH FUNDS — Service Providers SEPTEMBER 30, 2009

Investment Advisor

Wasatch Advisors, Inc.

150 Social Hall Avenue, 4th Floor

Salt Lake City, UT 84111

Sub-Advisor for the U.S. Treasury Fund

Hoisington Investment Management Co.

1250 Capital of Texas Highway South

Building 3, #600

Austin, TX 78746

Sub-Advisor for the Wasatch-1st Source Income Fund

1st Source Corporation Investment Advisors, Inc.

100 North Michigan Street

South Bend, IN 46601

Administrator and Fund Accountant

State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, MO 64105

Distributor

ALPS Distributors, Inc.

1290 Broadway, Suite 1100

Denver, CO 80203

Transfer Agent

UMB Fund Services, Inc.

803 West Michigan Street, Suite A

Milwaukee, WI 53233-2301

Custodian

State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, MO 64105

Legal Counsel to Wasatch Funds and Independent Directors

Chapman and Cutler, LLP

111 West Monroe Street

Chicago, IL 60603

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP

1100 Walnut, Suite 1300

Kansas City, MO 64106

137

WASATCH FUNDS — Guide to Understanding Financial Statements SEPTEMBER 30, 2009

Wasatch Funds provides reports to shareholders twice a year. The annual report is for the Funds’ fiscal year which ends September 30. The semi-annual report is for the six months or period ending March 31. Additionally, the Funds’ schedules of investments for the first and third quarters of each fiscal year are available to shareholders as described on page 126. These reports provide shareholders with important information that will help them evaluate the management and performance of their investments. It is the desire of Wasatch Funds to help shareholders stay in tune with their investments. If you have any questions about the information in this report, a shareholder services representative will be happy to assist you when you call 800.551.1700.

SCHEDULE OF INVESTMENTS

The holdings of each Wasatch Fund are detailed in the “Schedule of Investments.” This section provides a snapshot of the securities each Fund was invested in on the last day of the reporting period. The Wasatch Equity Funds invest primarily in Common Stocks of companies which are grouped together by industry. The U.S. Treasury Fund invests primarily in U.S. Treasury securities. The Wasatch-1^st Source Income Fund invests primarily in fixed income securities. The Equity Funds will typically have only minor holdings in Short-Term Investments. At times the Funds may take temporary defensive positions by increasing cash or holdings in Short-Term Investments. Please see the prospectus under “Additional Information about the Funds.”

STATEMENTS OF ASSETS AND LIABILITIES

These financial statements show the Assets and Liabilities of a Fund on the last day of the reporting period. A Fund’s Assets include the value of securities owned, amounts receivable for purchases of Fund shares (capital shares receivable), securities sold, interest and dividends, prepaid expenses and other assets. Liabilities are amounts owed for shareholder redemptions (capital shares payable), securities purchased, investment advisory fees and other expenses. Totaling up the assets and subtracting the liabilities results in a Fund’s Net Assets.

Net Assets consist of capital stock, paid-in capital in excess of par, undistributed net investment income or loss, undistributed net realized gain or loss on investments and net unrealized appreciation or depreciation on investments. Capital stock is stock authorized by a company’s charter and having par value, stated value or no par value. Par value is set by the company issuing the shares and has no relation to Net Asset Value. The par value of one share of each Wasatch Fund is $.01. Paid-in capital in excess of par is capital received from shareholders in exchange for Fund shares that exceeds the par value of the shares. For example, if you bought one share of a Fund for $10, $.01 would show as “Capital stock” on the books of the Fund, and $9.99 would be accounted for under “Paid-in capital in excess of par.” Undistributed net investment income or loss is the amount of net investment income or loss of a Fund since inception that has not been paid to shareholders as a dividend.

Undistributed net realized gain (loss) on investments is the amount of net realized gains or losses generated by a Fund since inception that have not been distributed to shareholders in the form of a capital gain distribution. A gain or loss is realized when a security is sold by a Fund. Net unrealized appreciation (depreciation) on investments is the change in value from the purchase price of securities a Fund continues to hold.

The number of shares a Fund is authorized to sell can be found under Capital Stock, $.01 par value. Issued and outstanding indicates the number of shares owned by shareholders.

Net Asset Value (NAV), Redemption Price and Offering Price Per Share shows the value of one outstanding share of a Fund on the date of the report. A Fund’s share price (NAV) is calculated by dividing the value of all securities and other assets owned by a Fund, less the liabilities charged to that Fund, by the number of Fund shares outstanding. The share price is calculated at the close of business of the New York Stock Exchange on each day the Exchange is open for trading. Please see Wasatch Funds’ prospectus for more information about how share prices are calculated. Information about how the share price is affected by a Fund’s operation can be found under “Financial Highlights” on page 137.

STATEMENTS OF OPERATIONS

Statements of Operations show investment income and expenses for each Fund as well as realized gains or losses from securities sold and the appreciation or depreciation in the value of a Fund’s holdings during the reporting period.

Investment Income shows Interest and Dividends earned from interest-bearing and dividend-paying securities in a Fund’s portfolio.

Expenses show the various fees and expenses paid out of a Fund’s assets such as the fee paid to Wasatch Advisors, the Funds’ investment advisor. Additional fees include shareholder servicing, fund administration and accounting, custody of fund assets, federal and state registration, legal counsel, auditing and directors’ fees. The Funds pay for printing and mailing statements, prospectuses, annual reports and semi-annual reports to shareholders.

Net Investment Income (Loss) is the amount of dividends and interest income earned on securities held by a Fund, less the Fund’s expenses.

Net realized gain (loss) on investments and foreign currency translations is the net gain or loss on securities a Fund has sold. Change in unrealized appreciation (depreciation) on investments and foreign currency translations is the change in value of securities a Fund continues to hold.

Net gain (loss) on investments is the result of changes in the market value of securities a Fund has sold and securities it continues to hold.

STATEMENTS OF CHANGES IN NET ASSETS

Net Assets are a Fund’s remaining assets after taking into consideration any liabilities. Statements of Changes in Net

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WASATCH FUNDS — Guide to Understanding Financial Statements (continued) SEPTEMBER 30, 2009

Assets show the increase or decrease in a Fund’s net assets during the reporting period. Investment operations, dividends and capital share transactions affect a Fund’s net assets. Operations is a summary of the Statements of Operations. It includes investment income or loss, net realized gain or loss on investments and foreign currency translations a Fund has sold as well as the change in appreciation or depreciation in the value of investments a Fund continues to hold.

Dividends are distributed by Wasatch Funds to sharehold-ers when Fund investments have earned income in excess of net expenses or when capital gains in excess of capital losses are realized from the sale of securities. Most shareholders choose to reinvest their dividends and capital gain distribu- tions. Each Fund is required by Internal Revenue Code regulations to distribute substantially all of its net investment income and capital gains to shareholders in order to retain its status as a “regulated investment company.”

Capital share transactions are any transactions involving shares of a Fund, including the selling of Fund shares, shares issued by a Fund to shareholders for the reinvestment of dividends, and share redemptions.

FINANCIAL HIGHLIGHTS

The Financial Highlights contain important historical operating information that you may find useful in making decisions or understanding the performance of your investment.

Net Asset Value (NAV) is defined under “Statements of Assets and Liabilities” on page 136. The difference between the Net asset value, beginning of period and the Net asset value, end of period in the Financial Highlights is the change in value of a Fund’s shares over the reporting period, but not its total return.

Income (loss) from investment operations shows how the share price was affected by a Fund’s operations on a per share basis. Net investment income (loss) is the per share

amount of dividends and interest income earned on securities held by a Fund, less the Fund’s expenses. Net realized and unrealized gains (losses) on securities is the per share increase or decrease in the value of securities a Fund holds or has sold during the reporting period. Gains or (losses) are realized when securities are sold. Gains or (losses) are unrealized when securities increase or decrease in value but are not sold.

Distributions are the per share amount that a Fund paid to shareholders from net investment income and net realized gains.

Total return is the percentage increase or decrease in the value of an investment over a stated period of time. A total return percentage includes both changes in unrealized and realized gains and income. For the purposes of calculating total return, it is assumed that dividends and distributions are reinvested at the share price on the ex-dividend day of the distribution. A FUND’S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE FINANCIAL HIGHLIGHTS.

Supplemental data and ratios are provided to help you better understand your investment. Net assets, end of period, are the net assets of a Fund on the reporting date. Ratio of expenses to average net assets shows the total of a Fund’s operating expenses divided by its average net assets for the stated period before and after waivers and reimbursements by the Advisor, if any. Ratio of net investment income to average net assets shows a Fund’s net investment income (loss) divided by its average net assets for the stated period before and after waivers and reimbursements by the Advisor, if any. Portfolio turnover rate measures a Fund’s buying and selling activity during the reporting period. It is computed by dividing total purchases or sales, whichever is less, by the average monthly market value of a Fund’s portfolio securities. This calculation does not include securities with a maturity date of less than 12 months.

CONTACT WASATCH

TELEPHONE

800.551.1700

M - F, 7:00 a.m. to 7:00 p.m. CT

Automated Line, 24 Hours

U.S. MAIL

Wasatch Funds

P.O. Box 2172

Milwaukee, WI 53201-2172

OVERNIGHT MAIL

Wasatch Funds

803 West Michigan Street, Suite A

Milwaukee, WI 53233-2301

ONLINE

www.wasatchfunds.com

shareholderservice@wasatchfunds.com

139

WWW.WASATCHFUNDS.COM

800.551.1700

Item 2: Code of Ethics.

(a) Wasatch Funds, Inc. (the “Registrant”) has adopted a Code of Ethics that applies to the Registrant’s principal executive officer and principal financial officer.

(b) No disclosures are required by this Item 2(b).

(c) There have been no amendments to the Registrant’s Code of Ethics during the reporting period for Form N-CSR.

(d) There have been no waivers granted by the Registrant to individuals covered by the Registrant’s Code of Ethics during the reporting period for Form N-CSR.

(e) Not applicable.

(f) A copy of the Registrant’s Code of Ethics is attached as an exhibit to this Form N-CSR.

Item 3: Audit Committee Financial Expert.

(a)      (1)     The Board of Directors of the Registrant has determined that the Registrant has one member serving on the Registrant’s Audit Committee that possesses the attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as “audit committee financial expert.”

  (2) For the reporting period, the name of the audit committee financial expert was James U. Jensen. Mr. Jensen was deemed to be “independent” as that term is defined in Item 3(a)(2) of Form N-CSR.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees – The aggregate fees billed for professional services rendered by the independent registered public accounting firm for the audit of the Registrant’s annual financial statements or services normally provided in connection with statutory and regulatory filings or engagements for the last two fiscal years ended September 30, 2009 and September 30, 2008 were $295,100 and $262,871, respectively.

(b) Audit Related Fees – The Registrant was not billed any fees by the independent registered public accounting firm for the fiscal year ended September 30, 2008 for assurance and related services rendered by the independent registered public accounting firm to the registrant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4. The Registrant was not billed any fees by the independent registered public accounting firm for the fiscal year ended September 30, 2009 for assurance and related services rendered by the independent registered public accounting firm to the registrant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4.

During the fiscal years ended September 30, 2009 and 2008, no fees for assurance and related services that relate directly to the operations and financial reporting of the Registrant were billed by the independent registered public accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

(c) Tax Fees – The aggregate fees billed for professional services rendered by the independent registered public accounting firm to the Registrant for tax compliance, tax advice, tax planning and tax return preparation for the last two fiscal years ended September 30, 2009 and September 30, 2008 were $76,000 and $69,400, respectively. These services consisted of the independent registered public accounting firm reviewing the Registrant’s excise tax returns, distribution requirements and RIC tax returns, as well as consultations regarding the tax consequences of specific investments.

During the fiscal years ended September 30, 2009 and 2008, no fees for tax compliance, tax advice or tax planning services that relate directly to the operations and financial reporting of the Registrant were billed by the independent registered public accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

(d) All Other Fees – The aggregate fees billed for professional services rendered by the independent public accounting firm to the Registrant regarding the implementation of Financial Accounting Standards Board Release No. 48 for the fiscal year ended September 30, 2008 was $2,500. During the fiscal year ended September 30, 2009, there were no fees billed for products and services provided by the independent registered public accounting firm to the Registrant, other than the services reported in paragraph (a) – (c) of this Item 4.

During the fiscal years ended September 30, 2009 and 2008, no fees for other services that relate directly to the operations and financial reporting of the Registrant were billed by the independent registered public accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

(e) Pre-Approval Policies and Procedures

(1) Pursuant to the registrant’s Audit Committee Charter, the Audit Committee shall evaluate the independence of the independent public accountants, including evaluating whether the independent public accountants provide audit services or consulting services to the Registrant or consulting services to the investment adviser, and to receive the specific representations of the independent registered public accounting firm as to their independence. Specifically, the Audit Committee will be responsible for evaluating the provision of non-audit services to the Registrant as required by Section 201 of the Sarbanes-Oxley Act, any pre-approval requests submitted by the independent registered public accounting firm as required by Section 202 of the Sarbanes-Oxley Act or as otherwise required under Section 2-01 of Regulation S-X, and shall monitor the conflict of interest requirements in Section 206 of the Sarbanes-Oxley Act, and the prohibitions on improper influence on the conduct of audits in Section 303 of the Sarbanes-Oxley Act. The Audit Committee shall pre-approve any engagement of the independent registered public accounting firm to provide any services (other than prohibited non-audit services) including the fees and other compensation to be paid to the independent registered public accounting firm.

The independent registered public accounting firm is authorized by the Audit Committee to provide non-audit services to the extent allowable under the Sarbanes-Oxley Act of 2002 for the Registrant provided that (i) the fees payable with respect to such services do not exceed $5,000 in any calendar quarter and (ii) such fees are ratified by the Audit Committee at its next meeting. The fees payable with respect to non-audit services may be increased by the affirmative vote of a majority of the members of the Audit Committee.

(2) There were no pre-approval requirements waived for the services provided to the Registrant described in paragraphs (b)-(d) of Item 4 by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (the “De Minimis Rule”). There were no fees billed for services provided to the investment adviser described in paragraphs (b)-(d) of Item 4 that were required to be pre-approved by the Audit Committee as described in paragraph (e)(1) of Item 4.

(f) No disclosures are required by this Item 4(f).

(g) The independent registered public accounting firm did not bill the Registrant or the Registrant’s investment adviser for any other ongoing non-audit services for the fiscal years ended September 30, 2009 and 2008 for the Registrant other than as disclosed above.

(h) No disclosures are required by this Item 4(h).

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

(a) Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form N-CSR.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

The Board of Directors has not adopted procedures by which shareholders may recommend nominees to the Board.

Item 11. Controls and Procedures.

(a) The Registrant’s principal executive and principal financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these

controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)      (1)     Code of Ethics is attached hereto.

    (2)      The certifications required by Rule 30a-2(a) of the 1940 Act are attached hereto.

     (3)      Not applicable.

(b) The certifications required by Rule 30a-2(b) of the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WASATCH FUNDS, INC.
By:	/S/  SAMUEL S. STEWART, JR.
	Samuel S. Stewart, Jr.
	President (principal executive officer) of Wasatch Funds, Inc.

Date: December 3, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/S/  SAMUEL S. STEWART, JR.
	Samuel S. Stewart, Jr.
	President (principal executive officer) of Wasatch Funds, Inc.

Date: December 3, 2009

By:	/S/  CINDY B. FIRESTONE
	Cindy B. Firestone
	Treasurer (principal financial officer) of Wasatch Funds, Inc.

Date: December 3, 2009

EX-99.12.A.1

EXHIBIT 12(a)(1)

WASATCH FUNDS, INC.

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

SENIOR FINANCIAL OFFICERS

I. Covered Officers/Purpose of the Code

This Code of Ethics (the “Code”) shall apply to Wasatch Funds, Inc.’s (the “Company”) Principal Executive Officer and Principal Financial Officer (the “Covered Officers,” each of whom is named in Exhibit A attached hereto), consistent with and in furtherance of their fiduciary duties, and for the purpose of promoting:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Company;

• compliance with applicable laws and governmental rules and regulations;

• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

Overview. A “conflict of interest” occurs when a Covered Officer’s private interest has the potential to interfere with the interests of, or his or her service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company. Covered Officers must avoid conduct that conflicts, or appears to conflict, with their duties to the Company. All Covered Officers should conduct themselves such that any reasonable observer would have no grounds for belief that a conflict of interest has not been appropriately addressed and resolved. Covered Officers are not permitted to self-deal or otherwise to use their positions with the Company to further their own or any other related person’s business opportunities.

This Code does not, and is not intended to, repeat or replace the programs and procedures or codes of ethics of the Company’s investment advisor.

Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Company and its investment advisor and administrator of which the Covered Officers may be officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company, the investment advisor or the administrator), be involved in establishing policies and implementing decisions that will have different effects on the service providers and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and its service providers and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Investment Company Act of 1940, as amended (“Investment Company Act”) and the Investment Advisers Act of 1940, as amended, such activities will be deemed to have been handled ethically.

The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should be properly disclosed to the Company and resolved by persons who do not have a personal interest.

*                *                *                 *

Each Covered Officer must not:

• use his or her personal influence or personal relationship improperly to influence investment decisions or financial reporting by the Company whereby the Covered Officer would benefit personally;

• cause the Company to take action, or fail to take action, for the improper personal benefit of the Covered Officer; or

• retaliate against any other Covered Officer or any employee of the Company or its affiliated persons for reports that are made in good faith of actual or of potential violations by the Company or such affiliated persons of applicable rules and regulations.

Each Covered Officer must discuss certain material conflict of interest situations with the Company’s Audit Committee. Examples of such situations include:

• service as a director on the Board of a publicly traded company held by a Wasatch Fund;

• accepting directly or indirectly investment opportunities, gifts or other gratuities from individuals conducting or seeking to conduct business with the Company or the Company’s investment advisor. However, Covered Officers may accept gifts from a single giver in aggregate amounts not exceeding $100, and may attend business meals, sporting events and other entertainment events at the expense of a giver as long as the expense is reasonable and both the giver(s) and the Covered Officer(s) are present;

• any direct or indirect ownership interest in, financial relationships with, or any consulting or employment relationship with, any of the Company’s service providers; and

• a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares.

III. Disclosure and Compliance

• Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Company.

• Each Covered Officer should not knowingly or negligently misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company’s Board, Audit Committee and independent auditors, and to governmental regulators, self-regulators and self-regulatory organizations.

• Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Company and its service providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company.

• It is the responsibility of each Covered Officer to promote and encourage professional integrity in all aspects of the Company’s operations.

IV. Reporting and Accountability

Each Covered Officer must:

• upon adoption of this Code (or thereafter as applicable, upon becoming a Covered Officer), sign and return a report in the form of Exhibit B to the person named in Exhibit A affirming that he or she has received, read and understands the Code;

• annually sign and return a report in the form of Exhibit C to the person named in Exhibit A affirming that he or she has complied with the requirements of the Code; and

• notify the Company’s Audit Committee promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code.

The Company’s Audit Committee is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation including any approvals or waivers sought by the Covered Officers.

The Audit Committee will follow these procedures in investigating and enforcing this Code:

• The Audit Committee will take all appropriate actions to investigate any potential violations reported to the Committee.

• If, after such investigation, the Audit Committee believes that no violation has occurred, the Audit Committee is not required to take any further action.

• Any matter that the Audit Committee believes is a violation of this Code will be reported to the full Board.

• If the Board concurs that a violation has occurred, it will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to the appropriate personnel of the investment advisor, administrator or its board; and possible dismissal of the Covered Officer as an officer of the Company.

• The Audit Committee will be responsible for granting waivers of provisions of this Code, as appropriate.

• Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

V. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Company for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Company or the Company’s investment advisor govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Company’s and the investment advisor’s code of ethics under Rule 17j-1 under the Investment Company Act and the investment advisor’s other policies and procedures are separate requirements applying to the Covered Officers and others, and are not part of this Code.

VI. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of independent directors.

VII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Company’s Board or Audit Committee.

VIII. Internal Use

The Code is intended solely for internal use by the Company and does not constitute an admission, by or on behalf of Company, as to any fact, circumstance or legal conclusion.

Date: August 27, 2003

EXHIBIT A

Persons Covered by this Code of Ethics:

Samuel S. Stewart, Jr. (Principal Executive Officer)

Cindy B. Firestone (Principal Financial Officer)

Recipient of reports under Article IV

Russell L. Biles (Secretary, Chief Compliance Officer and Vice President of Wasatch Funds, Inc.)

Amended: May 13, 2009

EXHIBIT B

INITIAL CERTIFICATION FORM

This is to certify that I have read and understand the Code of Ethics for Principal Executive and Senior Financial Officers of Wasatch Funds, Inc., dated                     , and that I recognize that I am subject to the provisions thereof and will comply with the policy and procedures stated therein.

Please sign your name here:                                                                            

Please print your name here:                                                                           

Please date here:                                                                                                

EXHIBIT C

ANNUAL CERTIFICATION FORM

This is to certify that I have read and understand the Code of Ethics for Principal Executive and Senior Financial Officers of Wasatch Funds, Inc. dated                     , (the “Code”) and that I recognize that I am subject to the provisions thereof and will comply with the policy and procedures stated therein.

This is to further certify that I have complied with the requirements of the Code during the period of                      through                     .

Please sign your name here:                                                                            

Please print your name here:                                                                           

Please date here:                                                                                                

EX-99.A.2

I, Samuel S. Stewart, Jr., President of Wasatch Funds, Inc., certify that:

1. I have reviewed this report on Form N-CSR of Wasatch Funds, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 3, 2009

By:	/S/  SAMUEL S. STEWART, JR.
	Samuel S. Stewart, Jr.
	President (principal executive officer) of Wasatch Funds, Inc.

I, Cindy B. Firestone, Treasurer of Wasatch Funds, Inc., certify that:

1. I have reviewed this report on Form N-CSR of Wasatch Funds, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 3, 2009

By:	/S/  CINDY B. FIRESTONE
	Cindy B. Firestone
	Treasurer (principal financial officer) of Wasatch Funds, Inc.

EX-99.B

I, Samuel S. Stewart, President and I, Cindy B. Firestone, Treasurer of Wasatch Funds, Inc. (the “Registrant”), each certify that:

1. The N-CSR of the Registrant (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

By:	/S/  SAMUEL S. STEWART, JR.
	Samuel S. Stewart, Jr.
	President (principal executive officer) of Wasatch Funds, Inc

Date: December 3, 2009

By:	/S/  CINDY B. FIRESTONE
	Cindy B. Firestone
	Treasurer (principal financial officer) of Wasatch Funds, Inc.

Date: December 3, 2009