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: 811-04920

WASATCH FUNDS TRUST

(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 Trust 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, 2010

Item 1: Report to Shareholders.

Annual Report & Commentaries

September 30, 2010-11-30

WASATCH

FUNDS

Deeper, Disciplined Investing

Wasatch Core Growth Fund

Wasatch Emerging Markets Small Cap Fund

Wasatch Global Opportunities Fund

Wasatch Global Science & Technology Fund

Wasatch Heritage Growth 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

Wasatch-Hoisington U.S. Treasury Fund

Wasatch-1st Source Income Fund

EQUITY FUNDS

BOND FUNDS (SUB-ADVISED)

September 30, 2010

Annual Report &

Commentaries

Annual Report & Commentaries

September 30, 2010-11-30

WASATCH

FUNDS

Deeper, Disciplined Investing

Thank you for your investment in Wasatch Funds. We hope this report

will be helpful to you in understanding each of the funds within the Wasatch family.

As a reminder, manager commentaries can always be found on our website

www.WasatchFunds.com approximately three weeks after the end of each calendar

quarter.

Who we are.

We are a research driven, employee owned firm managing no-load mutual funds. Located at the foot of the Wasatch

Mountains in Salt Lake City, Utah, we are far away from Wall Street and its herd mentality. Our portfolio managers

are independent, yet collaborative, thinkers who bring substantial experience to their funds.

Where we came from.

Founded in 1975, by Dr. Sam Stewart, we initially focused on growth investing in small companies. Using a fundamental,

bottom up research method we looked for market inefficiencies relative to the long term growth potential of

lesser known companies. Investing in small, harder to find companies required a disciplined, rigorous and independent

research process. Over time, Wasatch added more research professionals and began applying the same successful

process to investing in micro, value, international, and larger companies.

What we believe.

We believe in common sense investing, involving deep due diligence, cross-team collaboration, and commitment to

discipline, as we follow our central investment philosophy of:

“Earnings Growth Drives Stock Prices Over the Long Term”

What we do.

We utilize a proven and repeatable process to uncover interesting companies. We look deeper to find and understand

each company. We leverage portfolio managers from across the firm to fully vet each investment idea. We stay true

to our investment style. We close funds before they get too large in order to protect shareholders. We seek to deliver

above-average returns over the long-term, and we strive in every way to earn the trust of our shareholders.

If your have any questions please visit our website www.WasatchFunds.com or feel free to call

us Monday through Friday 7am – 7pm CT at 1.800.551.1700.

Investing in small cap funds will be volatile and loss of principle 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. An

investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a

prospectus, which contains this and other information, visit www.wasatchfunds.com or call 800.551.1700. Please

read the prospectus carefully before investing. Wasatch Funds are distributed by ALPS Distributors, Inc.

What makes Wasatch different?

Deeper – We use an intensely thorough process to fully understand each investment.

Disciplined – We stick to our process and investment style regardless of market fads.

Collaborative – We work across portfolios to leverage valuable experience and research insights.

Independent – We do our own research to avoid getting caught in the herd.

Wasatch Funds

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 International Growth Fund® Management Discussion	14
Portfolio Summary	15
Wasatch International Opportunities Fund® Management Discussion	16
Portfolio Summary	17
Wasatch Micro Cap Fund® Management Discussion	18
Portfolio Summary	19
Wasatch Micro Cap Value Fund® Management Discussion	20
Portfolio Summary	21
Wasatch Small Cap Growth Fund® Management Discussion	22
Portfolio Summary	23
Wasatch Small Cap Value Fund® Management Discussion	24
Portfolio Summary	25
Wasatch Strategic Income Fund® Management Discussion	26
Portfolio Summary	27
Wasatch Ultra Growth Fund® Management Discussion	28
Portfolio Summary	29
Wasatch-1st Source Income Equity Fund™ Management Discussion	30
Portfolio Summary	31
Wasatch-1st Source Long/Short Fund™ Management  Discussion	32
Portfolio Summary	33
Wasatch-Hoisington U.S. Treasury Fund® Management Discussion	34
Portfolio Summary	35
Wasatch-1st Source Income Fund™ Management Discussion	36
Portfolio Summary	37
Management Discussions — Definitions of Financial Terms	38
Operating Expenses	39
Schedule of Investments	41
Statements of Assets and Liabilities	90
Statements of Operations	94
Statements of Changes in Net Assets	98
Financial Highlights	105
Notes to Financial Statements	114
Report of Independent Registered Public Accounting Firm	135
Supplemental Information	136
Management of the Company	136
Shareholder Meeting Results	138
Proxy Voting Policies, Procedures and Record	139
Quarterly Portfolio Holdings Disclosure on Form N-Q	139
Service Providers	140
Guide to Understanding Financial Statements	141
Contact Wasatch	142

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 —“MORE OF THE SAME”

  Samuel S. Stewart, Jr. PhD, CFA President of
Wasatch Funds DEAR FELLOW SHAREHOLDERS:   ECONOMY   Last year I used an analogy of crossing a white water river and then having to climb a steep riverbank to describe our economic situation. Well, we seem to have finally made it to the top of the riverbank. Unfortunately, what we can see from the top of the bank is that we have a long, dusty, uphill road still ahead to make it back to town. In my recent quarterly letters I have been discussing the long-term structural challenges that our economy faces — the most concerning being reduced access to credit, continuing high unemployment, and increasing government debt and regulatory burdens. Reflecting on these concerns, I would describe this quarter’s economic progress as just more of the same, as we have not seen a meaningful change in these metrics. I have expected them to be slow to improve, but for the moment it feels like we have paused at the top of the riverbank to catch our breath before beginning the long walk to town. There has been quite a bit of talk recently about a double-dip recession — sliding back down the riverbank. I am less concerned about such a risk and more focused on what it’s going to take to hike back to town. The

government played an important role in keeping us from getting swept down the river at the height of the crisis, but now it is up to the people to get the economy restarted using our inherent ingenuity, entrepreneurial spirit, and hard work.

Outside of the U.S., I believe Europe is in an even tougher spot because the continent faces similar challenges to ours while also trying to tie disparate countries together with only a monetary union. It may be surprising to many, but emerging countries have best weathered the financial and economic storm and are positioned for continued growth. Although not considered “developed” economies, emerging countries were actually well ahead of the developed world in intelligent self-management — or perhaps more accurately, developed countries extended themselves beyond intelligent self-management.

Emerging economies are not getting everything right and have felt pain as well, but many are in better shape than developed countries. A recent Barron’s article noted that the U.K. and the U.S. have actually nationalized more companies during the financial crisis than were nationalized in Africa over the last nine years.¹ Brazil’s and India’s banks have been solid throughout the financial crisis because those countries have regulations that limited the risk banks could undertake in the form of loan quality, leverage, and the like.

MARKET

The S&P 500 is up just over 10% for the past 12 months but, as market watchers know, it has not been a steady ride. Between February and April we saw the market rise almost 14% just to watch those gains and more vanish by the beginning of July. As people asked me about the falling market in May and June, I described the situation as “a change in perception, not a change in reality.” It appeared to me that the market had gotten ahead of the economic recovery as investors reacted to short-term data and chose not to acknowledge the longer-term challenges our economy faces. Events like the Greek financial crisis this spring caused investors to finally pause and at least temporarily consider these deeper issues.

Of the past year’s market gains, roughly 90% came in what was an unusually strong September — the S&P 500 gained about 9%. I am surprised to see just how momentum-driven the market remains. At times it feels to me like investors have failed to learn a lesson from the recent crisis, and that they remain incredibly shortsighted. As a result, the current market has created an interesting dichotomy — companies that are really doing well are getting all of the attention, while strong companies that are only firing on six of their eight cylinders are being overlooked. This makes it a good time to take some profits on stocks whose prices are moving up as well as to re-invest in forgotten companies that are well-positioned for the future but not yet firing on all cylinders.

We are also seeing a determined search for yield by investors, primarily through a continuing flight to bonds. This is partly driven by increased fear of the equity markets and partly by the investment needs of retiring baby boomers. As I’ve mentioned in recent quarters, I’m afraid that many of these bond investors are taking on more risk than they realize. Bond funds have been delivering unsustainably high returns as bond prices have been driven up by historically low interest rates and heavy demand. When interest rates begin to rise again we will likely see bond funds with negative returns.

In this quest for yield we are also seeing investors increasingly buying high yield bonds, perhaps without realizing the quality implications. I find this somewhat ironic since similar low-quality securities led to the financial crisis just two years ago. I’m concerned that new bond investors may not realize the risks they are accepting — interest rate risk and credit risk — because of the common misperception many investors have of all bonds being low risk by nature.

Meanwhile, blue chip stocks are being passed over despite offering attractive yields and trading at historically low valuations.

Given such incongruities, I expect that we will continue to experience a seesaw market, but overall I think the U.S. and European equity markets are likely to be sluggish over the next 12 months as we continue to work through our economic challenges.

WASATCH

Wasatch Funds had another successful year, with most of our funds outpacing their benchmark indices (please see individual fund performance on the following portfolio summary pages). I have been happy to report good years in 2009 and 2010, yet I can’t overlook the fact that we are still working to make up the ground lost in 2008. We have more work to do.

2

SEPTEMBER 30, 2010

Our international team had a particularly strong year. All three international funds were ranked in the Top 1% of their respective Morningstar peer group based on total return for the year ended 9/30/10 (see chart below). The funds benefited from good stock picking, particularly in emerging markets, and an underweight position in Western Europe — where we simply hadn’t found as many interesting companies using our bottom-up investment process.

Time and again our portfolio managers return from trips abroad telling stories of small companies they visited which rarely, if ever, receive visits from U.S. investment firms. With decades of small cap experience and an expansive universe of relatively unknown small and micro cap companies around the world, we remain convinced that our hands-on deep due diligence approach gives Wasatch a significant investment advantage.

MORNINGSTAR TOTAL RETURN CATEGORY PEER RANKINGS AS OF 9/30/10

	1 Year	3 Year	5 Year
Wasatch Emerging Markets Small Cap (WAEMX) (Diversified Emerging Markets)	Top 1% (out of 379)	Top 1% (out of 268)	n/a
Wasatch International Growth (WAIGX) (Foreign Small/Mid Growth)	Top 1% (out of 132)	Top 12% (out of 118)	Top 29% (out of 94)
Wasatch International Opportunities (WAIOX) (Foreign Small/Mid Growth)	Top 1% (out of 132)	Top 9% (out of 118)	Top 3% (out of 94)

Past performance is not a guarantee of future results.

As I reflect on the past year, and look forward to the next, the Wasatch research commitment is as strong as ever, and I have seen continued progress across each of our key pillars:

Ÿ Deep Due Diligence — Someone is almost always on the road visiting companies. We increased our international travel this year. For example, team members returned from Brazil last week, others are in Canada this week, and another pair leaves for Malaysia and Indonesia next week.

Ÿ Collaboration — Our collaborative culture is thriving. We continue to experiment with how best to integrate our domestic and international teams in order to tap into increasingly relevant global insights.

Ÿ Discipline — Our research process remains consistent and I am pleased with the long-term perspective we have maintained through the recent short-term market swings. Our “high-end consulting” (a process of evaluating and critiquing each other’s portfolio) continues to be a great collaborative tool to help us tighten each fund’s adherence to its investment strategy “north star.”

The Wasatch research team is comprised of bright and seasoned investors. Our success is driven by their passion, a proven investment approach, and our culture of collaboration. Our research teams are led by portfolio managers who understand and have a vested interest in how research works. For example, Roger Edgley, director of our international team, is a co-manager of all three international funds. Jeff Cardon, director of our domestic team, has been the portfolio manager on the Small Cap Growth Fund since its inception almost 24 years ago (he is also CEO of Wasatch Advisors, investment advisor to Wasatch Funds). In future letters, I think it would benefit shareholders to have greater exposure to the breadth and strength of our team. As such, I plan to ask others to join me in providing their perspectives on relevant topics. As a reminder, my quarterly letter, as well as a quarterly commentary from each portfolio manager, can be accessed online at www.WasatchFunds.com.

Thank you for the continued opportunity to manage your assets.

Sincerely,

Samuel S. Stewart, Jr.

President of Wasatch Funds

The investment objective of WAEMX, WAIGX, and WAIOX is long-term growth of capital.

The recent growth rate in the stock market has helped to produce short-term returns for some asset classes that are not typical and may not continue in the future. Because of ongoing market volatility, fund performance may be subject to substantial short-term changes.

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 Morningstar percentile rank is the rank of a fund among its category peers, which rank is based on a comparison of a fund’s total return performance against its peers over a given time period. © 2010 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.

CFA^® is a trademark owned by CFA Institute.

¹Barron’s, “The Final Frontier,” Vito J. Racanelli, 8/2/10.

3

WASATCH CORE GROWTH FUND (WGROX) — Management Discussion SEPTEMBER 30, 2010

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 gained 9.19% in what was its strongest quarter since the third quarter of 2009. The Russell 2000 Index also had its best quarter in a year, rising

11.29%. It was not unexpected that the Fund trailed the Index given our tendency to lag in rapidly rising markets. The stable and consistent growth companies in the portfolio are rarely the stocks to lead the market when optimism and appetite for risk increase. We expect our stocks to keep pace in such markets, as they have done on a year-to-date basis, and then continue to grow and outperform in less robust markets.

DETAILS OF THE QUARTER

Our economy emerged from recession in June 2009 but is expanding at a slower rate than is typical of post-recessionary periods. We think the economy will remain sluggish given high unemployment, unprecedented levels of U.S. debt and rising taxes needed to pay for government spending. In such an environment, we believe companies with true growth prospects will command a premium.

We are already seeing some signs of this narrowing in the market, as information technology stocks, which make up less than 20% of the Russell 2000 Index, accounted for nearly 30% of the Index’s return this quarter. Fast-growing companies in the areas of cloud computing, security software and Internet retailing were some of the best performers. While we are interested in the underlying themes behind these fast-growing companies, the lofty price-to-earnings (P/E) multiples and fast-changing dynamics in technology make them less appropriate for our style, which is focused on steady, consistent growth at a reasonable price. Nonetheless, the market’s focus on growth bodes well for our companies, as we believe they will continue to grow at rates faster than the overall economy.

One of our best-performing stocks this quarter was Herbalife Ltd., a global marketer of nutritional products. The company reported the best quarterly results in its history, including a 4.3% increase in operating margin and a 72% increase in earnings. Herbalife has shifted its strategy from traditional multi-level marketing, where customers order from distributors on a monthly basis, to more of a retail approach that emphasizes daily consumption. There are several advantages to the new model, such as expanding the market to customers that are not willing to commit to becoming Herbalife distributors but are still interested in purchasing the company’s weight-loss products. Obesity is a growing problem around the world, and we expect the sales

of Herbalife’s healthy products will continue to benefit as people try to slim down.

MSCI, Inc. is another name that performed especially well. The company provides equity market indices and investment analytics, and its indices are linked to more than 250 exchange-traded funds (ETFs). Its shares were weak in the second quarter when a decline in the global equity markets implied a decline in ETF revenues. This quarter, global equities rallied sharply, and so did MSCI. Despite the stock’s volatility, there has been no change in the company’s growth trajectory over the two-quarter period. The business is showing good momentum, supported by solid demand for ETFs and risk management analytics.

Health care was the only sector in the Fund that had a negative return, where veterinary company VCA Antech, Inc. was a big detractor. In this economy, consumers are cutting back on what they are willing to spend to take care of their pets — they may skip a routine test or wait for a sick pet to recover versus taking it right to the vet. Demand had shown signs of stabilizing earlier in the year, but investors were disappointed with VCA Antech’s most recent revenues and earnings, prompting a sell-off in the stock. Long term, we think the business is very stable given the trend toward increasing pet ownership and higher spending per pet. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

Our foreign stocks were a key driver of the Fund’s strong performance during the 12 months ended September 30. Positions in several Indian and Brazilian banks did especially well, as robust economic growth in these countries is stimulating loan demand. Top domestic performers included O’Reilly Automotive, Inc. and Monro Muffler Brake, Inc., companies with steady revenue streams that sell less “discretionary” goods. Health care was the Fund’s weakest sector against the backdrop of regulatory reform in the United States.

OUTLOOK

As we look ahead, one question we are asking ourselves is: Does the narrowing of the market that we saw in the third quarter continue, with just a small slice of high-growth, high-P/E stocks driving returns? While this is certainly possible, we are comfortable with our holdings and would never stray from our valuation discipline by chasing hot stocks in a frothy market. We think a likely scenario is that the challenges facing the economy will make investors less optimistic — and less likely to aggressively bid up any segment of the market to lofty valuations. Our portfolio of steadily growing companies that we believe are reasonably valued has the potential to do well in such an environment.

Thank you for the opportunity to manage your assets.

4

WASATCH CORE GROWTH FUND (WGROX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Core Growth		15.75%		0.28%		6.76%
Russell 2000 Index		13.35%		1.60%		4.00%
Russell 2000 Growth Index		14.79%		2.35%		-0.13%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Core Growth Fund are 1.38%. The expense ratio shown elsewhere in this report may be different. 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 Net Assets
Copart, Inc.		4.4%
Life Time Fitness, Inc.		3.8%
Herbalife Ltd.		3.6%
Aaron’s, Inc.		3.4%
MEDNAX, Inc.		3.2%

Company	% of Net Assets
LKQ Corp.		3.1%
O’Reilly Automotive, Inc.		3.1%
MSCI, Inc., Class A		2.7%
Alliance Data Systems Corp.		2.7%
IDEX Corp.		2.5%

* As of September 30, 2010, 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. 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. You cannot invest directly in these or any indices.

5

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Management Discussion SEPTEMBER 30, 2010

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 22.80% in the third quarter and outperformed the MSCI Emerging Markets Small Cap Index, which was up 20.48%. Performance for

the quarter was strong as markets rebounded from a weaker second quarter. Overall, the gains within the Fund were broad based across markets, sectors and names. If there is a single element across the Fund’s top contributors this quarter, it is the presence of many consumer-oriented names.

Our philosophy is to invest broadly across the countries and sectors that are within its remit. It is important to note that the opportunities we favor go well beyond the BRIC countries (Brazil, Russia, India and China) — to countries like South Africa, Peru, Thailand, Egypt and Indonesia amongst others. Our job is to go where many do not — to invest in underfollowed countries and companies. Many of the countries that did well in the quarter were smaller ones that were well represented in the Fund. The top five contributors for the quarter were from the following countries: Brazil, India, Indonesia, Thailand and China.

DETAILS OF THE QUARTER

Some interesting new names we added include Clicks Group Ltd. (South Africa), Diagnosticos da America S.A. (DASA) (Brazil), and Marisa Lojas S.A. (Brazil). Although emerging market small caps have had a year of strong returns, we are still able to find names that we believe have excellent long term prospects — companies that are well managed, financially well structured, and able to take advantage of the important changes in their economies. Clicks Group is a South African based retailer that includes a leading pharmacy chain and brand name stores like The Body Shop. We feel it is well placed with South African consumers and the pharmacy business should benefit as it takes market share from smaller “mom and pop” operators.

Two members of Wasatch’s team were in Brazil in September visiting companies including DASA and Marisa mentioned above. DASA is the largest clinical diagnostics and imaging laboratory group in Brazil (it would rate as one of the top five in the world). Health care trends in Brazil include a push toward efficiency as more members of the population enter private health care plans and increasing government spending.

Marisa is an apparel store chain with a focus on female buyers and “middle” consumers. We might compare Marisa to Old Navy or the Gap in the U.S. It has different kinds of formats so it is not just tied to malls, which have seen strong

growth in Brazil, but has street fronts, one of which we visited in Rio de Janeiro. Marisa has seen strong, same-store growth and sees attractive opportunities in other areas of Brazil.

Names that made significant contributions in the quarter included Cia. Hering (Brazil), LIC Housing Finance Ltd. (India), O-Net Communications Group Ltd. (China), and PT Jasa Marga (Indonesia). In terms of losers for the quarter, there were no significant “torpedoes”—the worst performing name was down about 25% and just 12 stocks had negative returns.

One of the most important trends we see across emerging economies is the growth of consumer spending as incomes and wealth grow significantly. This continues to be an important theme that cuts across many areas ranging from mortgage finance growth to health care spending to higher spending on apparel.

We have seen increased merger and acquisition activity and we expect to see more in the coming months. Two companies in the portfolio were impacted during the quarter. Another company purchased a controlling stake in Tivit Terceirizacao de Processos Servicos e Tecnologia S.A. (Brazil) and Dufry Group (Switzerland) acquired the assets of a South American company held in the portfolio. We sold both positions. A long-term holding we sold was Kingdee International Software Group Co. Ltd. (China), a Chinese software company, as its stock price reached a level we believed to be fully valued. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

The Wasatch Emerging Markets Small Cap Fund gained 51.69% over the past 12 months and outperformed the MSCI Emerging Markets Small Cap Index, which gained 32.32%. The top contributing countries were India, Indonesia, Brazil, China, Thailand and South Africa. Overall, our individual investments performed well for the year. There were few detractors. The top contributors came from a broad range of countries and sectors and included Cia. Hering, LIC Housing Finance Ltd., KPJ Healthcare Berhad (Malaysia) and PT Mayora Indah Tbk (Indonesia).

OUTLOOK

This has been a strong year of performance for small caps in emerging markets backed by strong asset flows from investors. We have some concern regarding global investors crowding into this segment of emerging markets with valuation levels looking — in some sectors and countries — closer to fair value. However, we still see attractive opportunities — it is a broad universe.

We remain grateful for the faith shown in us by our shareholders and we will continue to work hard to justify it. Emerging markets small caps are an exciting segment for us as an investment team and we possess long-term faith in its opportunities.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

6

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) —Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS	SINCE INCEPTION 10/1/07
Emerging Markets Small Cap		51.69%	N/A		6.11%
MSCI Emerging Markets Small Cap Index		32.32%	N/A		1.26%
MSCI Emerging Markets Index		20.22%	N/A		-1.48%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Emerging Markets Small Cap Fund are 3.03%. The Net Expenses are 2.05%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 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 Net Assets
LIC Housing Finance Ltd. (India)		2.2%
Mr Price Group Ltd. (South Africa)		2.0%
Bata India Ltd. (India)		2.0%
Exide Industries Ltd. (India)		1.9%
Mahindra & Mahindra Financial Services Ltd. (India)		1.9%

Company	% of Net Assets
PT Holcim Indonesia Tbk (Indonesia)		1.8%
Cia. Hering (Brazil)		1.7%
Globaltrans Investment plc GDR (Russia)		1.6%
Allahabad Bank Ltd. (India)		1.5%
CETIP S.A. (Brazil)		1.5%

* As of September 30, 2010, there were 164 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 Cap indices are free float-adjusted market capitalization indices that are designed to measure equity market performance in the global emerging markets. You cannot invest directly in these or any indices.

7

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Management Discussion SEPTEMBER 30, 2010

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 Global Opportunities Fund posted a strong gain during the third quarter in what was a positive environment for stock investing. Developed and emerging markets rallied as data

coming out of the United States suggested the world’s largest economy would avoid a double-dip recession. Moreover, the Federal Reserve indicated that it was prepared to take additional steps to revive the U.S. economy, if needed.

Returns in the Fund were strong across geographies and sectors. We are pleased by the breadth of the good performance, since the Fund’s mandate gives us the flexibility to invest in companies of any size, in any country and in any type of business. That said, we are disappointed that we lagged the market indices. Our goal is to keep up with the market when stock prices are rising and provide the potential to outperform when they are falling.

DETAILS OF THE QUARTER

Western Europe was a key area of strength in the Fund, and our investments in the region gained approximately 25%. Two of our best-performing stocks were Melexis N.V. (Belgium) and Wirecard AG (Germany), which are top-weighted holdings. Melexis designs semiconductors used in automotive electronics, and the company announced record revenues and earnings in July. Melexis is benefiting from Asia’s booming auto market and the rising chip content in cars, as high-tech features like adaptive cruise control become more prevalent. Wirecard is the leading processor of online payment transactions in Europe. The company has a history of strong growth — growing even throughout the recession — and should continue to thrive as it adds customers and expands geographically. Wirecard is one of several names in the Fund that is capitalizing on the migration from traditional “bricks and mortar” retailing to Internet retailing.

We also did well in emerging markets, including China, India and Brazil. Similar to last quarter, a number of our Chinese consumer stocks and Indian banks had substantial gains — names like Anta Sports Products Ltd. (China) and Allahabad Bank Ltd. (India). Strength in Brazil was driven by companies in a broad group of industries, from health care services to machinery to personal care products. We are excited about the growth we are seeing in emerging countries, but these markets have gotten a bit expensive.

Our U.S. holdings produced a strong gain but lagged the international piece of the portfolio. Major detractors included several semiconductor, business services and health

care companies whose operating performance and/or growth outlooks disappointed investors. For example, revenues for Supertex, Inc., a semiconductor manufacturer, came in below expectations due to a shortage in test and assembly capacity. CRA International, Inc., a consulting firm, beat second-quarter estimates but gave a cautious outlook for the rest of the year. Management cited the reluctance of corporations to spend on consulting services in the weak economy.

We faced some sector and industry headwinds in the quarter. Our big weighting in health care was a negative, as government reform in the United States has clouded the outlook for many health care companies. In addition, Americans are cutting back on medical services, as jobs losses lead to lost health insurance, and as more people opt for high-deductible plans. Our relatively low exposure to energy and metals and mining stocks also hurt performance. These areas of the market did especially well on rising commodity prices.

DETAILS OF THE YEAR

Our investments in emerging markets gained more than 50% during the 12 months ended September 30. India was one of the best-performing countries in the Fund, where the list of top contributors was dominated by financial services companies. Although returns were positive in most developed markets, Australia was a notable exception. We have been upgrading the quality of our holdings in Australia following a recent trip to the country.

Performance was strong in most sectors, with consumer discretionary and information technology making the largest contributions to return. Top-performing holdings included ASOS plc (United Kingdom), an Internet retailer, and OPNET Technologies, Inc., a developer of network management software. The generally weak performance of our construction and engineering stocks limited gains in the industrials sector.

OUTLOOK

The U.S. recovery remains fragile, and investors are waiting to see if the Federal Reserve will step in to provide support. The outcome of the November U.S. elections is also of intense interest given its implications for taxes and regulation. Overseas, many emerging economies are growing rapidly but, like the United States, developed European countries are struggling with public deficits.

While uncertainty abounds, we aren’t spending our time trying to figure out if the economic and political landscape is going to get better or worse. Our job is to identify great companies whose individual characteristics should allow them to do well regardless of what is happening in the macro environment. If we can find these types of companies, and pay reasonable prices for them, we believe we can deliver strong results over time.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

8

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS	SINCE INCEPTION 11/17/08
Global Opportunities		20.41%	N/A		46.18%
MSCI AC World Small Cap Index		15.70%	N/A		37.13%
S&P Global SmallCap Index		15.18%	N/A		34.76%
MSCI AC World Index		8.42%	N/A		22.70%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Opportunities Fund are 2.61%. The Net Expenses are 2.25%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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. 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 Net Assets
Melexis N.V. (Belgium)		1.9%
Wirecard AG (Germany)		1.7%
Dollar Tree, Inc.		1.4%
Ted Baker plc (United Kingdom)		1.2%
EPS Co. Ltd. (Japan)		1.2%

Company	% of Net Assets
Power Integrations, Inc.		1.1%
Resources Connection, Inc.		1.1%
Richelieu Hardware Ltd. (Canada)		1.0%
O2Micro International Ltd. ADR (China)		1.0%
Indutrade AB (Sweden)		0.9%

* As of September 30, 2010, there were 356 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 indices.

9

WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Management Discussion SEPTEMBER 30, 2010

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 13.94% in the quarter, bringing its 12-month return to 22.91%. The companies we own in the Fund reported sales and earnings growth of 24% and 46%, respectively, significantly above the broader market average.   DETAILS OF THE QUARTER   We made further progress toward reducing the number of portfolio hold-

ings during the past three months. Fewer holdings will allow us to get more wood behind the arrow of our best ideas. A related goal was increasing the percentage of the portfolio invested in our highest conviction ideas. We are happy to report that our top 10 holdings now represent about 27% of the portfolio, up from approximately 19% at the beginning of the year. We believe that running a more concentrated portfolio will allow us to use our knowledge base more effectively for the benefit of our shareholders.

The stocks we sold during the quarter fell into three main categories. First were those where we thought the market had more than priced in strong business prospects, such as F5 Networks, Inc., Techne Corp., and NetLogic Microsystems, Inc. The second group included companies that became subject to new regulatory risk, including MEDNAX, Inc. and Korean company MegaStudy Co. Ltd. While these are great companies, we think the discounts offered in the stock prices are not enough to justify the current level of risk. We would love to come back to the stocks in these two groups sometime down the road if their prices become more reasonable. The final group is companies that we deemed good but not great. In most cases, we based our decision on some combination of the stocks’ lower-quality business models and less attractive end markets.

One of the clear highlights from the quarter was the first major payoff from our improved focus on our best ideas. Our top holding going into the quarter — Wirecard AG, a German company that provides payment services for online transactions — was also our top contributor thanks to its large position size and 59% price increase. Early in the year, Wirecard was one of our larger holdings with a 2% weighting. When an Internet rumor dragged down its stock price, our discussions with company management, several industry experts, and our own experienced research team gave us the confidence to add to our position. As a result, we came into the third quarter with a 4% weighting in the stock. While we have taken some profits following its strong rally, Wirecard remains our top pick based on our belief that it is an attractively priced way to ride the tailwind as more and more retail transactions occur online.

Another large holding that generated a strong return was Abcam plc, the Cambridge, England-based online antibody distributor. We’ve owned Abcam for years and consider it to

be similar to Amazon.com, except focused on supplies used in lab research. Abcam, which has been rapidly taking market share from the traditional paper-based catalogs in the industry, has generated high sales growth before, during, and after the recession. Abcam’s shares rose nearly 50% in the quarter.

Another recurring theme was our purchase of stocks that Wasatch owns currently or has owned at some point in the past, including NuVasive, Inc., Copart, Inc., VistaPrint N.V., and Japanese e-commerce company Start Today Co. Ltd. We love it when the market gives us a chance to buy companies we know well at discounted prices. Our long history with these companies means we are way up the information curve on day one of ownership, and we’ve already built up relationships and trust in senior management.

A key detractor was ICON plc, an Ireland-based contract research organization that reduced its earnings guidance to the low end of the previous range. Also weighing on performance were our holdings in Japanese software company Simplex Technology, Inc., veterinary services provider VCA Antech, Inc., and technology equipment company Intevac, Inc. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

The Fund’s one-year return of 22.91% is also an indication of the fundamental strengths of the underlying companies we have held in the portfolio. For the year, our companies generated 16% year-over-year sales growth and 39% growth in bottom-line earnings. A substantial contribution to performance came from our investments overseas, where on average about half of the Fund’s assets were invested. China and Brazil proved to be fertile ground for growth investments. Among U.S.-based companies, Akamai Technologies, Inc. and F5 Networks made the largest contributions to performance. The most significant detractors were Intevac and CVS Group plc (United Kingdom).

OUTLOOK

As the financial crisis and ensuing recession move further into the rear view mirror, we believe the market will value real growth above growth pretenders (companies enjoying high year-over-year growth mostly due to easy earnings comparisons). We continue to tune out most of the macroeconomic noise in order to spend our time in pursuit of under-appreciated growth companies. We are gratified that quarterly and annual data show that our portfolio holdings are achieving earnings growth and higher valuations — a potentially powerful combination.

As we continue the process of pruning the Fund’s holdings, we are increasingly satisfied that we have a portfolio of companies offering under-appreciated growth. Even as the market recognizes some of this growth potential, we continue to find ample opportunities for investing in attractively valued growth companies.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

10

WASATCH GLOBAL SCIENCE & TECHNOLOGY  FUND (WAGTX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		SINCE INCEPTION 12/19/00
Global Science & Technology		22.91%		4.14%		5.07%
Russell 2000 Technology Index		20.41%		5.77%		-1.66%
Nasdaq Composite Index		12.74%		2.86%		-0.36%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Global Science & Technology Fund are 2.15%. The Net Expenses are 1.96%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 Net Assets
Wirecard AG (Germany)		4.8%
DiaSorin S.p.A. (Italy)		3.3%
Google, Inc., Class A		2.8%
CVS Group plc (United Kingdom)		2.7%
Xilinx, Inc.		2.6%

Company	% of Net Assets
Altera Corp.		2.5%
International Business Machines Corp.		2.4%
Alliance Data Systems Corp.		2.2%
Pegasystems, Inc.		2.1%
Create SD Holdings Co. Ltd. (Japan)		2.1%

* As of September 30, 2010, 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. ††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 indices.

11

WASATCH HERITAGE GROWTH FUND (WAHGX) — Management Discussion SEPTEMBER 30, 2010

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   Even in the face of a tepid economic environment, it was a rare September to remember for stocks. The market — as gauged by the S&P 500 Index — hadn’t closed a third quarter with a monthly gain this

large (8.92%) since 1939. As investors latched onto the hope of a strengthening recovery, the Fund’s benchmark, the Russell Midcap Growth Index turned in a strong gain, led by consumer discretionary and economically sensitive producer durable stocks. Primarily due to its lower weights in cyclical stocks and the consumer-driven retail segment, the Fund trailed the benchmark for the quarter.

The Fund was unable to keep pace in a frothy environment after outperforming the benchmark during second quarter weakness. In particular, our cautiousness regarding consumers tempered our returns. Both high unemployment and excess valuations in the space have made it difficult to find attractively valued consumer oriented stocks.

We believe the quality of the Fund’s holdings constrained returns a bit as well, as investors bid up shares of many companies with volatile earnings as economic murkiness dissipated slightly. By and large, our companies were able to weather the challenges of the last two years reasonably well. As many formerly profitable companies saw earnings turn negative, even at the worst, many of our holdings at least sustained their level of earnings. This then transformed into fairly robust growth over the last several quarters, which we project will normalize in the future.

While we ideally would outperform the market during rallies, given the quality of our holdings, it is not surprising that the Fund would only keep pace or trail slightly during extremely bullish environments. Rallies are typically fueled by speculation, which tends to bode well for volatile companies that can showcase what are often temporary fundamental surprises or those stocks that have been beaten down the most in prior market declines.

DETAILS OF THE QUARTER

Although we’ve always been diligent about investing in companies that meet our exacting standards, we’ve never been more pleased about the Fund’s composition than we are now. We have made an even more concerted effort to ensure that every company held in the Fund meets each appendage of what we call the three-legged stool — quality, valuation and momentum.

As our companies hopefully continue to perform steadily, meeting or exceeding our hurdle growth rate of 15%, we believe they will be rewarded in the market over the long-term.

The Fund’s performance was buoyed by strength in the information technology sector, where Cognizant Technology Solutions Corp., Altera Corp. and Amphenol Corp. were the highest contributors to performance.

Outside of technology, Herbalife Ltd., a provider of health foods primarily focused on weight management and nutritional supplements, was one of our top-performing stocks.

Copart, Inc. and Covance, Inc. both suffered what we believe to be temporary setbacks detracting from the quarter’s performance. They are both debt-free and hold significant amounts of cash, which should allow them flexibility as they focus on future business opportunities. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

As it did during the third quarter, information technology drove the Fund’s performance for the year, with Altera, Cognizant and F5 Networks, Inc. leading the way. The Fund returned 16.06% and trailed the 18.27% return of the benchmark.

In a strong market environment, Apollo Group, Inc., a for-profit higher education provider, accounted for most of the performance gap as it faced stiff regulatory challenges concerning the availability of student aid. As unexpected headwinds continued to mount, we recently sold the Fund’s stake in this long-time holding.

We also concentrated the Fund and, in our opinion, increased its overall quality by focusing on our top tier companies. During the year, we trimmed the Fund’s holdings from 54 to 42 and feel that the Fund is now better positioned to perform well.

OUTLOOK

Even though the recession officially ended in June 2009, high unemployment and increasing levels of public debt continue to put a damper on economic activity. Although it’s clear that the path to a more normal economic environment will be long and arduous, it doesn’t dampen our enthusiasm about the Fund’s prospects. With the luxury of being able to invest in a small portion of existing public companies, we can be selective and pinpoint companies that we believe will do well in spite of macro challenges.

Though we are pleased with the Fund’s current composition, we continue to screen for additional investment opportunities and visit management teams of both existing and prospective companies. A large amount of insight that can’t be gleaned merely from reviewing financial statements — especially regarding corporate culture — is gained by meeting with management teams face-to-face. Even visits with companies that we ultimately choose not to invest in are an invaluable comparison tool that can help strengthen our conviction about the companies that are held in the Fund.

In our view, the three legs of the stool seem properly balanced. We feel extremely positive about the quality and the earnings growth momentum of the Fund and that valuations are low enough to allow for satisfactory returns over time.

Thank you for the opportunity to manage your assets.

12

WASATCH HERITAGE GROWTH FUND (WAHGX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		SINCE INCEPTION 6/18/04
Heritage Growth		16.06%		1.91%		3.70%
Russell Midcap Growth Index		18.27%		2.86%		5.36%
S&P 500 Index		10.16%		0.64%		2.20%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Heritage Growth Fund are 1.21%. The Net Expenses are 0.95%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 TEN EQUITY HOLDINGS*

Company	% of Net Assets
Altera Corp.		6.0%
Cognizant Technology Solutions Corp., Class A		4.8%
IHS, Inc., Class A		4.1%
Tim Hortons, Inc. (Canada)		3.8%
Ross Stores, Inc.		3.7%

Company	% of Net Assets
Amphenol Corp., Class A		3.7%
Linear Technology Corp.		3.7%
Express Scripts, Inc.		3.7%
Copart, Inc.		3.7%
St. Jude Medical, Inc.		3.4%

* As of September 30, 2010, there were 42 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 indices.

13

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Management  Discussion SEPTEMBER 30, 2010

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 returned 23.33% in the third quarter and outperformed the MSCI AC World Ex-U.S.A. Small Cap Index, which returned 18.43%. The Fund was helped by its exposure to Asia and Latin America, where markets performed well and economies are growing. In general, developed economies struggled in a more difficult credit and consumer environment against the

more pro-growth emerging economies, and that is what is playing out today.

DETAILS OF THE QUARTER

It is worth discussing in detail the top contributors for the quarter as they illustrate well our philosophy and some common elements across names. Among the top contributors to performance were Abcam plc (United Kingdom), Wirecard AG (Germany), Cia. Hering (Brazil) and Dah Chong Hong Holdings Ltd. (Hong Kong). All are companies we know well and that operate from a position of significant strength in their fields of business.

As a Cambridge-based online provider of antibodies for the research community worldwide, Abcam has been a big long-term winner for the Fund. We found Abcam when it was a tiny company. Now, its market capitalization is close to a billion dollars. We have cut back some of our position size owing to its weight in the Fund and valuation, but Abcam remains a prominent position.

Wirecard is a payment service provider in Europe, focused on enabling Internet payments and providing an extra layer of credit protection for merchants selling online. It therefore is a significant beneficiary of the growth of online transactions in Europe and is now starting to grow in Asia.

Cia. Hering is a brand name retailer in Brazil continuing to add stores in other regions. In a meeting with management (and a store visit) in the last few weeks, they stated that they believe it is possible to double the number of stores, with franchising being part of that growth. Our recent visit to Brazil reinforced our opinion of the opportunity there —Brazil to us seems to represent a combination of well-managed small companies within an economy showing highly supportive trends.

Dah Chong Hong (DCH) is a name we added that illustrates how we source our ideas in different ways. DCH has been the main distributor for Honda for 40 years. It is a company this portfolio manager learned about firsthand years ago when living in Hong Kong as the owner of a new Honda Civic bought from and serviced by a DCH dealer. At Wasatch, we were aware of DCH’s level of service and organization and knew that Honda chooses their distributors with care. Aside from representing some major car brands in Hong Kong, DCH has a growing portfolio of brands it represents in China. The stock is a relatively new listing, one

we thought was inexpensive — maybe being perceived as somewhat dull or just misunderstood. After good results were announced, with DCH’s China operations showing growth, the stock was significantly upgraded. The business has a long commercial history, so we think it can produce stable growth over a long period.

The worst performing names for the quarter generally had one thing in common: Japan. As an economy, Japan continues to struggle with deflation, low growth and a strong currency that makes it difficult for its exporters to remain competitive. Construction equipment firm Takeuchi Mfg. Co. Ltd. is one of our holdings that has been hurt by these factors. We have been underweight in Japan for a long time — we find it relatively unattractive from a bottom up stock perspective as well as from a top down economic view. Growing small companies thrive not only on growth in their own economies but from change — Japan in many areas is seeing little change and few opportunities. Zero-level interest rates indicate an economy ruled by continuing fears of deflation, lacking animal spirits. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

The Fund outperformed the Index over the past 12 months with strong performance from the United Kingdom, India, Brazil and Indonesia. Our U.K. investments in Abcam and online fashion retailer ASOS plc did especially well. We also had good results from our Indian financial companies, notably LIC Housing Finance Ltd. and Allahabad Bank Ltd. In Brazil, Cia. Hering was a top contributor as was cosmetics producer Natura Cosmeticos. Two cement producers, Semen Gresik and Indocement Tunggal Prakarsa, led the way in Indonesia. Japan was also weak over the 12-month period, with several Japanese holdings numbering among our largest detractors.

OUTLOOK

As 2010 draws to a close, we remain aware of global economic and trade tensions and how these can disrupt markets. For many of the small, generally domestically-oriented companies we invest in, we believe that conditions are supportive with tighter capital flows helping the higher quality companies on which we focus. With over 10,000 companies in our investable universe, there continue to be companies that stand out to us as long-term benefactors of growth throughout the world. We are confident that we can continue to build a portfolio of companies that exhibit higher quality and better growth prospects than the markets in general. We remain very grateful for all the support shown by shareholders.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

14

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Portfolio  Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		SINCE INCEPTION 6/28/02
International Growth		34.15%		6.99%		12.26%
MSCI AC World Ex-U.S.A. Small Cap Index		15.59%		6.42%		13.33%
MSCI World Ex-U.S.A. Small Cap Index		10.86%		2.74%		11.08%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Growth Fund are 1.94%. The expense ratio shown elsewhere in this report may be different. 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 Net Assets
LIC Housing Finance Ltd. (India)		2.4%
Abcam plc (United Kingdom)		2.4%
Rotork plc (United Kingdom)		2.4%
SJM Holdings Ltd. (Hong Kong)		2.2%
DiaSorin S.p.A. (Italy)		2.1%
Cia. Hering (Brazil)		2.0%

Company	% of Net Assets
Wirecard AG (Germany)		1.9%
Mahindra & Mahindra Financial Services Ltd. (India)		1.8%
Anta Sports Products Ltd. (China)		1.8%
Dah Chong Hong Holdings Ltd. (Hong Kong)		1.8%

* As of September 30, 2010, there were 111 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. The MSCI World Ex-U.S.A. Small Cap Index is an unmanaged index that measures the performance of stocks with market capitalizations between U.S. $200 million and $1.5 billion across 22 developed markets, excluding the United States. You cannot invest directly in these or any indices.

15

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Management  Discussion SEPTEMBER 30, 2010

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   The third quarter saw global equities stage a bit of a comeback, though volatility remained very much in evidence. Consumers in most developed markets were still keeping a close

watch on their spending, but those in China and other emerging markets spent at a more robust pace.

The Wasatch International Opportunities Fund returned 20.09% during the quarter, placing it comfortably ahead of its benchmark, the MSCI World Ex-U.S.A. Small Cap Index, which returned 17.75% over the same period. With no single theme or trend driving the market, our individual stock selection was the main factor in the Fund’s outperformance for the period.

DETAILS OF THE QUARTER

The absence of a single specific theme or trend driving the market is evident among our 10 top contributors to performance over the quarter, where nine different countries on four continents and 10 industries in four major market sectors were represented.

Germany’s Wirecard AG, a provider of credit-card processing and electronic payment systems, was our top contributor to performance for the quarter. Wirecard has benefited from the broad trend toward moving more transactions online, but its success is driven by more than that. We believe the company’s technology for handling transaction processing, currency conversion, and other banking services is world class, and it has already moved into many high-growth markets.

In another part of the world, Middle Eastern shipper Aramex PJSC was also a strong contributor. What’s been most important to Aramex’s performance has been its ability to continue to improve top-line growth. With some of the region’s debt problems nearing resolution, there are now signs of renewed growth — growth that Aramex appears well-positioned to capitalize on.

U.K.-based Abcam plc, which makes specialized antibodies used in medical research, exemplifies a quality shared by most of our top performers this quarter. Its strong returns for the period don’t result from a specific piece of good company news, or a positive development in its industry. Rather, they simply reflect the market’s recognition of the company’s success in executing its business plan. That may not sound as exciting as talking about a company that’s experienced a rapid, stupendous run-up based on a breakthrough development, but this more sustainable kind of performance is far more important to the

Fund’s long-term results. Finding the often overlooked companies that have the potential to produce returns in this way, over an extended period of time, is perhaps the greatest challenge we face as investment managers.

After being our strongest holding last quarter, Simplex Technology, Inc. was the greatest detractor from performance this period. The company preannounced that it would miss its earnings targets for the year, which sent its shares tumbling. While that news was disappointing, we believe the stock has been unfairly punished. Even though Simplex’s sales in its systems-integration services area haven’t been up to expectations, the company has still benefited from the high recurring revenues that flow from its work in developing electronic securities-trading platforms. In time, we think investors will once again recognize the company’s true value.

DETAILS OF THE YEAR

For the 12 months ended September 30, 2010, the Fund returned 31.71%, reflecting significant outperformance over its benchmark index, which posted a return of 10.86%. As in the most recent quarter, strong individual stock selection was the main factor in our performance over the period.

Aramex was the top contributor for the year, followed closely by U.K.-based Internet retailer ASOS plc. ASOS’s positioning to benefit from shoppers’ growing preference for Internet-based transactions has allowed the company to post strong earnings despite tepid consumer spending in developed markets. Sports apparel maker China Hongxing Sports Ltd., the greatest detractor from performance for the year, stumbled while executing its plan to attract customers from China’s emerging consumer class. Disappointed, we sold our position. Current and future holdings are subject to risk.

OUTLOOK

With a great deal of investors’ cash still on the sidelines, an important question in coming months will be whether more of it will return to the global equity markets. Although the global economic outlook remains uncertain, there appears to be a consensus that governments around the world will take the steps they need to in order to avoid a double-dip recession. Our focus remains on identifying companies with strategic advantages that can allow them to succeed regardless of the macroeconomic climate.

We’re finding this environment to be very helpful for fundamentally driven stock-pickers like us. With no single trend driving the market, we’re able to uncover opportunities in a number of markets and a wide range of sectors — and get to them before they’re discovered by the broader investment community. Operating in the micro- and small-cap space is also helpful, as a number of the companies we’re most enthusiastic about aren’t big enough to be on most investors’ radar screens.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

16

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		SINCE INCEPTION 1/27/05
International Opportunities		31.71%		9.47%		10.04%
MSCI World Ex-U.S.A. Small Cap Index		10.86%		2.74%		5.00%
MSCI AC World Ex-U.S.A. Small Cap Index		15.59%		6.42%		8.11%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch International Opportunities Fund are 2.81%. The Net Expenses are 2.28%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 Net Assets
Aramex PJSC (United Arab Emirates)		4.5%
Wirecard AG (Germany)		3.3%
Daum Communications Corp. (Korea)		2.1%
China Automation Group Ltd. (China)		1.8%
EPS Co. Ltd. (Japan)		1.8%

Company	% of Net Assets
Raffles Medical Group Ltd. (Singapore)		1.5%
Simplex Technology, Inc. (Japan)		1.5%
Home Capital Group, Inc. (Canada)		1.3%
Abcam plc (United Kingdom)		1.2%
CSG Ltd. (Australia)		1.2%

* As of September 30, 2010, there were 162 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 indices.

17

WASATCH MICRO CAP FUND (WMICX) — Management Discussion SEPTEMBER 30, 2010

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 gained 10.45% during the third quarter. The Fund outperformed the Russell Microcap Index, which rose 7.81%, but trailed the Russell 2000 Index, which was up 11.29%. The U.S. stock market had its best quarter in a year. Worries about Europe’s sovereign debt problems subsided, as countries took steps to cut their budget deficits and strengthen

their banking systems. In addition, the U.S. economy showed some modest improvement, which eased concerns about a double-dip recession. Nonetheless, the general consensus is that the economy will remain sluggish due to the serious issues facing our country, such as high unemployment and the large federal deficit.

DETAILS OF THE QUARTER

Investors had strong appetites for stocks of companies showing good growth in the weak economy. As a result, the fastest-growing companies in the Fund were generally our best performers. This appreciation for growth also helps explain the strong performance of the international portion of the portfolio.* Small companies in the United States generate approximately 80% of their revenues domestically. Given the subdued outlook for the economy, it makes sense that investors would look overseas for growth, particularly in emerging countries.

During the quarter, one of our best-performing stocks was Abcam plc (United Kingdom). Abcam is an online supplier of antibodies used by medical researchers to study protein function in cells. Known as the “Amazon of antibodies,” the company reported a 25% increase in revenues and a 44% increase in earnings for its fiscal year ended June 30. We have been trimming our weight based on the stock’s valuation and expectations that revenue growth trends may begin to slow.

Other top performers included IPG Photonics Corp. and ArcSight, Inc. IPG Photonics makes fiber lasers that are used in a broad range of industrial applications. The company reported better-than-expected operating results and guidance in August, and the shares took off. Revenue growth was particularly strong in the Asia-Pacific region, with China accounting for more than 10% of total sales. ArcSight, a maker of security software, announced that it was being acquired by Hewlett-Packard.**

On the other hand, Peet’s Coffee & Tea, Inc., a specialty beverage company, was one of our worst-performing holdings. The stock gave back some of its gains from earlier in 2010 on speculation that Peet’s might be losing market share in the grocery channel. Rising coffee prices were another negative, although management announced a price increase in late September to offset the impact of coffee inflation. The recent weakness in the stock has not changed our thinking

on Peet’s. We believe it is a well-managed company with good headroom for growth, particularly in the grocery channel where it can expand distribution.

The fact that micro cap stocks trailed bigger small caps this quarter was a headwind for the Fund given our emphasis on the micro cap segment of the market. We think one of the main reasons micro caps underperformed is that growth trends have been better for the larger companies. Part of this is due to the slow pace of initial public offerings (IPOs) over the past several years — there have not been a lot of exciting new micro cap names coming to market to refresh the space. However, IPO activity is picking up in the United States and around the world. We are watching the new entrants carefully and have participated in several IPOs as we continue to increase the growth profile of the portfolio. For example, we bought RealPage, Inc., a rapidly growing software company, when it went public in August.

DETAILS OF THE YEAR

Our international holdings were a key driver of returns during the 12 months ended September 30, gaining more than 40% overall.* In addition to Abcam, Goodpack Ltd. (Singapore) was one of our best-performing stocks. Goodpack, a container leasing company, has benefited from the rebound in global trade following the credit crisis. Our health care stocks also did well as a group, despite the uncertain regulatory environment.

The Fund’s focus on micro cap stocks weighed on results, as did a handful of names in the consumer staples and energy sectors. GMX Resources, Inc., an oil and gas producer, was one of our biggest laggards. We sold the stock in June because of the company’s deteriorating fundamentals.

OUTLOOK

As previously noted, the consensus view is that the U.S. economy will struggle to grow at a normal rate for a number of years. So we are continuing to look for rapidly growing companies like RealPage that should be able to thrive even in challenging times. We have incrementally been tilting the portfolio toward these types of companies for a while, and doing so has positively impacted performance.

Many of the fastest-growing stocks in the market have premium price-to-earnings (P/E) multiples, which is typical of an environment where growth is hard to come by. We are thus closely monitoring our high-growth holdings to ensure that their stocks prices are reasonable relative to their long-term prospects. Furthermore, a significant percentage of the Fund is invested in moderate growth and value-oriented names. These companies may lack the revenue momentum of our fastest growers, but they are solid businesses trading at good values. That said, when it comes to adding new stocks to the portfolio, we are maintaining our focus on growth.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

* Excludes American Depositary Receipts (ADRs — receipts issued by domestic banks for shares of foreign-based corporations that trade on U.S. stock exchanges) and foreign companies traded on U.S. stock exchanges.

** As of September 30, 2010, the Wasatch Micro Cap Fund was not invested in Hewlett-Packard Co.

18

WASATCH MICRO CAP FUND (WMICX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Micro Cap		14.14%		-0.73%		8.73%
Russell 2000 Index		13.35%		1.60%		4.00%
Russell Microcap Index		7.43%		-2.09%		4.08%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Fund are 2.24%. The expense ratio shown elsewhere in this report may be different. 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 Net Assets
Power Integrations, Inc.		3.0%
CorVel Corp.		2.5%
Dollar Financial Corp.		2.3%
OPNET Technologies, Inc.		2.2%
Hibbett Sports, Inc.		2.1%

Company	% of Net Assets
Abcam plc (United Kingdom)		2.1%
Micrel, Inc.		2.0%
O2Micro International Ltd. ADR (China)		1.9%
LMA International N.V. (Singapore)		1.8%
Diamond Hill Investment Group, Inc.		1.8%

* As of September 30, 2010, there were 102 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 date of July 1, 2005 was from a paper portfolio. You cannot invest directly in these or any indices.

19

WASATCH MICRO CAP VALUE FUND (WAMVX) — Management Discussion SEPTEMBER 30, 2010

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

  Brian Bythrow, CFA Portfolio Manager   OVERVIEW   In the third quarter, the U.S. equity markets continued on a volatile path. In a welcome change, though, their overall direction shifted upward. At many points throughout the period, the equity indices swung up rapidly, then shot downward nearly as quickly. The precise factors driving these movements were often difficult to discern. For the quarter, the Wasatch Micro Cap Value Fund gained 7.21%. This placed it

behind its benchmark, the Russell 2000 Index, which returned 11.29% over the same period.

The underperformance was partially the result of our focus on micro cap stocks, which over the quarter underperformed stocks on the larger end of the small cap spectrum. In addition, our cash position hurt performance in a period of positive equity returns. Although we are working to deploy these assets, the significant volatility among micro cap stocks makes it essential for us to wait until we can buy the companies we like at reasonable entry points.

DETAILS OF THE QUARTER

Over the past quarter, a number of our holdings were hurt by speculation about and anticipation of government action that could have negative impact on their operations. For example, Lincoln Educational Services Corp., a for-profit provider of higher education, was the greatest detractor from performance for the period. It suffered, along with the rest of the for-profit education space, from fears that the Department of Education’s proposed “gainful employment” rules could reduce their eligibility for federal student loan programs. Students taking out those loans are responsible for the bulk of Lincoln’s revenues. We’ll be monitoring Lincoln, and the entire segment, carefully in coming months.

The potential for another government action — in this case, imposing a moratorium on home foreclosures —bruised another of our holdings, DJSP Enterprises, Inc. DJSP helps mortgage-issuing banks that are now overloaded with foreclosures by providing a specialized legal team to handle loan modifications, short sales, and foreclosure sales. Although a temporary halt to home foreclosures could interrupt DJSP’s business activity, there is already a significant inventory of bank-owned properties that must eventually be sold. In the meantime, however, even the possibility of a moratorium on foreclosures has been enough to dim investors’ interest in DJSP.

In the case of LHC Group, Inc., a provider of home health care services, the reason for its stock price decline was worry that health care reform, with its focus on cost-cutting, could hurt LHC Group’s earnings by reducing reimbursement rates paid to providers by government insurance programs.

Although we are concerned about this government headwind, we can’t lose sight of the many companies we’ve been

able to identify that have performed well despite the myriad challenges presented to them by the economic environment.

Our top contributor to performance for the quarter was Toronto-based easyhome Ltd., which rents furniture, appliances, and home electronics to consumers. The company is growing not only through its main rent-to-own home goods business, but also through the addition of in-store kiosks offering consumer loans. These stores-in-a-store have been tested in a number of markets, and after their success, they are now set for a chain-wide rollout. The loans offered are available to borrowers with a variety of credit profiles, making them attractive at a time when many consumers feel pinched, while also offering high margins to the lender.

Another consumer company that has done well despite pressures on discretionary spending is Germany’s Delticom AG, an online discount tire retailer that operates abroad as well as in the U.S. Although buying tires online may not seem entirely convenient, in a number of markets outside the U.S. it offers virtually the only means to purchase tires without paying the high markup traditionally charged by car dealerships. Delticom is now the largest tire dealer in Europe, and the second largest in the U.S. Although the company is maturing into the higher end of micro cap territory, it still offers good growth potential. Its valuation remains reasonable, but it’s not as low as it once was.

DETAILS OF THE YEAR

For the 12 months ended September 30, 2010, the Wasatch Micro Cap Value Fund returned 13.26%, keeping closely on track with the Russell 2000 Index, which returned 13.35% over the same period. Our top contributor for the year was Sino Biopharmaceutical Ltd. (China). This company benefits from the rise of the Chinese consumer class by providing traditional medicines and more modern brand name drugs to that market.

The challenges at Lincoln Educational Services were sufficient to make it one of the largest detractors from performance for the year. Gas exploration and production company GMX Resources, Inc. was also among our weaker performers over the past 12 months, hurt by oversupply concerns in the natural gas industry. Current and future holdings are subject to risk.

OUTLOOK

At this point, it appears possible that there will be at least a partial change in leadership in the U.S. Congress. That could change the regulatory tone in Washington and in states across the country, perhaps alleviating some of the headwind now facing many companies and industries.

We’ll keep a careful eye on these developments as we look for opportunities to invest some of our cash. Right now, companies offering growth are generally pricey. We’re willing to exercise patience until we can buy selected companies at valuations that leave plenty of room for appreciation.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

20

WASATCH MICRO CAP VALUE FUND (WAMVX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		SINCE INCEPTION 7/28/03
Micro Cap Value		13.26%		6.40%		10.90%
Russell 2000 Index		13.35%		1.60%		6.59%
Russell Microcap Index		7.43%		-2.09%		3.76%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Micro Cap Value Fund are 2.46%. The Net Expenses are 2.26%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 Net Assets
easyhome Ltd. (Canada)		1.6%
Solar Capital Ltd.		1.4%
Prestige Brands Holdings, Inc.		1.3%
Haynes International, Inc.		1.3%
Ace Hardware Indonesia (Indonesia)		1.2%

Company	% of Net Assets
Karnataka Bank Ltd. (India)		1.2%
Dewan Housing Finance Corp. Ltd. (India)		1.2%
First Cash Financial Services, Inc.		1.2%
JDA Software Group, Inc.		1.2%
TTM Technologies, Inc.		1.2%

* As of September 30, 2010, there were 119 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 indices.

21

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Management Discussion SEPTEMBER 30, 2010

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 15.33% in the third quarter. The Fund outperformed the Russell 2000 Growth Index, which rose 12.83%, and the Russell 2000 Index, which increased 11.29%. The small cap market was down slightly from July through August, as pessimism about the economy overshadowed better-than-expected corporate earnings. However, the market rallied in September on some

encouraging economic data that eased concerns about a double-dip recession.

During the quarter, investors favored stocks of companies showing strong growth in the challenging economic environment. This benefited the Fund given the positive trends in revenues and earnings that we are seeing from many of our companies. Investors’ appetite for growth was particularly evident in the information technology portion of the portfolio, which was the main driver of our strong results. We are also finding a lot of growth outside the United States, and our international holdings produced an even bigger gain than our domestic holdings.

DETAILS OF THE QUARTER

Some of the Fund’s best-performing stocks this quarter were stocks of companies related to “cloud computing” — computing in which products and services are provided over the Internet. They included Riverbed Technology, Inc. and F5 Networks, Inc., two companies that enable cloud computing. Riverbed is a leader in the wide area network (WAN) optimization market, while F5 Networks provides solutions that improve the performance of delivering Internet services. Ultimate Software Group, Inc., NetSuite, Inc. and Concur Technologies, Inc., which deliver software over the Internet or “cloud,” also had an especially good quarter. ArcSight, Inc. was another big winner in information technology. The company, a maker of security software, announced that it was being acquired by Hewlett-Packard.* The acquisition enhances Hewlett-Packard’s portfolio of security offerings at a time when increasing amounts of data are moving outside of corporate firewalls and into the cloud.

HDFC Bank Ltd., an Indian bank, was one of our best-performing stocks outside the information technology sector. The company reported strong quarterly operating results, including a 34% increase in earnings and a 40% increase in loans. Unlike many small U.S. banks, which are fighting for survival, HDFC is focused on growth and opportunity. At 1.1 billion, India’s population is more than three times greater than ours, yet Indian consumers buy just a fraction of the number of cars that Americans purchase each year. Mortgage debt represents only about 7% of India’s gross domestic product (GDP) but approximately 80% of U.S. GDP. These statistics highlight the untapped

market potential for financial services in India, where the economy is robust and incomes are rising.

VistaPrint N.V. and Resources Connection, Inc. are two stocks that lagged. VistaPrint uses the Internet to provide small businesses with a wide range of marketing products and services, such as brochures and logo design. Many small businesses are struggling in the weak economy, and the soft spending environment has been a headwind for the company. VistaPrint has also experienced a few operational missteps, including an advertising campaign that yielded disappointing results. Resources Connection is a staffing firm that provides high-level accounting and finance professionals on a temporary basis. With the recovery so fragile, corporations have been hesitant to move forward with projects. This has hurt the entire staffing industry. Despite recent weakness, we think VistaPrint and Resources Connection are both high-quality names with good business models, and our long-term outlook on them remains positive. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

Investors have been seeking growth for a while, so some of the same factors that drove performance in the third quarter also impacted the Fund during the last 12 months. Our information technology holdings did particularly well overall, led by strong gains from F5 Networks, Riverbed Technology and Ultimate Software Group. Other top performers included companies that are benefiting from favorable growth trends outside the United States, such as HDFC Bank and Bucyrus International, Inc., a manufacturer of mining equipment. On the negative side, business services stocks like Resources Connection tended to be weak. In addition, government reform of the health care sector weighed on many of our health care names.

OUTLOOK

We believe the serious issues facing the United States, including high unemployment and unprecedented levels of U.S. debt, will lead to a period of below-average growth for our economy. We also believe investors will reward companies producing real growth in an environment where growth is hard to come by. Our thoughts on this subject have been consistent for some time, and we think this is a long-run theme we may be talking about for years.

Given this view of the world, we are focused on capturing solid growth in the Fund. We are out in the field, researching new ideas and looking for growth wherever we can find it. Our goal is to identify quality companies that can increase their earnings by at least 15% annually over a five-year horizon. Our forecasts suggest that we are not only meeting this goal, but exceeding it, as the long-run projected growth rate for our companies is north of 20%. The level of growth we are seeing in the Fund makes us confident that it is well positioned for the future.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

* As of September 30, 2010, the Wasatch Small Cap Growth Fund was not invested in Hewlett-Packard Co.

22

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Small Cap Growth		19.76%		2.76%		5.59%
Russell 2000 Growth Index		14.79%		2.35%		-0.13%
Russell 2000 Index		13.35%		1.60%		4.00%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Growth Fund are 1.31%. The expense ratio shown elsewhere in this report may be different. 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 Net Assets
Power Integrations, Inc.		3.8%
Ultimate Software Group, Inc.		3.7%
Hibbett Sports, Inc.		2.8%
MSC Industrial Direct Co., Inc., Class A		2.6%
Cognizant Technology Solutions Corp., Class A		2.6%

Company	% of Net Assets
HDFC Bank Ltd. ADR (India)		2.5%
MSCI, Inc., Class A		2.4%
Knight Transportation, Inc.		2.4%
Riverbed Technology, Inc.		2.2%
Peet’s Coffee & Tea, Inc.		2.1%

* As of September 30, 2010, there were 102 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 indices.

23

WASATCH SMALL CAP VALUE FUND (WMCVX) — Management Discussion SEPTEMBER 30, 2010

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 U.S. stock market overcame a litany of investor concerns to finish the third quarter with a surprisingly strong return. Still, a look past the returns of the broad market indices reveals that a relatively small group of richly valued growth stocks drove the bulk of the gain. Conversely, investors showed little appreciation for the types of stocks in which we invest — those with robust cash flows, strong balance sheets, and

attractive valuations. As would be expected, this environment dampened the Fund’s relative performance for the quarter.

It should come as no surprise that our response was to maintain the same value discipline that has worked so well for us over time. Experience has taught us that sticking to our process, regardless of short-term market activity, is the best way to maintain a steady course for the Fund.

DETAILS OF THE QUARTER

The information technology sector was an area in which our value-oriented approach experienced underperformance. While no individual tech stock stood out as a significant underperformer, a handful of individual positions suffered losses in the low- to mid-teens. The largest area of weakness was the semiconductors and components group, where notable laggards were Standard Microsystems Corp. and Pericom Semiconductor Corp.

In terms of what worked, two of our top contributors were former “Fallen Angels” — our term for one-time growth stocks that have stumbled but have a clear path to resuming their growth. The first was a longtime holding that we have discussed quite a bit in past communications — natural foods company NBTY, Inc. When NBTY experienced difficulties in 2008, our due diligence showed that the company continued to feature strong cash flows, a compelling valuation, and the ability to benefit from the longer-term growth trends in vitamins and natural foods. During the quarter, private equity firm The Carlyle Group acquired NBTY.

OPNET Technologies, Inc., whose software provides corporations with a high return on investment by making networks more efficient, is another former Fallen Angel that energized our performance. We bought low in early 2009 when OPNET’s shares were under pressure from the broad market selloff, and the stock has since staged a powerful rebound.

We also generated strong returns from a number of the Fund’s “Undiscovered Gems” — the phrase we use to describe companies whose current valuations do not reflect what we believe is their true value. In some cases, this is due to a lack of coverage from major Wall Street firms. A prime example is CorVel Corp., a stock with no analyst coverage that Wasatch has owned on and off for 15 years. CorVel, a provider of services that help companies lower the cost of workmen’s compensation claims, reported robust growth in revenues and earnings — a development we anticipated. The

stock responded favorably as investors tried to play “catch-up” with the improving fundamental story.

Our positions in non-U.S. stocks also continued to add value for the Fund. The past quarter saw strong performance from our Indian financial stocks LIC Housing Finance Ltd. and City Union Bank Ltd., as well as from Goodpack Ltd., a Singapore-based company that operates the world’s largest fleet of medium-sized containers used to transport specialty cargo. Current and future holdings are subject to risk.

DETAILS OF THE YEAR

The Wasatch Small Cap Value Fund returned 12.00% during the annual period and outpaced the 11.84% return of its benchmark, the Russell 2000 Value Index. We are gratified that the Fund outperformed even though the types of stocks in which we invest were out of favor for much of the year. We view this as evidence that it pays to focus on value and bottom-up stock picking, rather than trying to keep up with short-term market moves by chasing the winners.

OUTLOOK

Self-reflection helps us analyze our successes and mistakes to determine what’s working and what we can do better. Our most recent effort in this vein involved a rigorous analysis of the Small Cap Value strategy’s 12-year history. What we found was not particularly surprising, but it helps illustrate some of the factors that have driven our returns.

Since the Fund’s inception, the most important factor underlying our performance has been — by a substantial margin — our investments in Fallen Angels. As a “value manager within a growth shop,” we are well positioned to leverage the firm’s knowledge to capitalize on the frequent occasions when growth companies stumble and slip into our value universe.

We also have added quite a bit of value over the years via our investments in Undiscovered Gems. This universe has proven to be fertile ground for successful investments, since thin coverage on a stock enables those with an informational advantage to capitalize on inefficiencies. We believe our strong research capabilities provide such an advantage.

Taken together, these two strategies have accounted for the vast majority of our winners in the past 12 years. Notably, almost all of these top performers were stocks that at one time were held in Wasatch growth portfolios — illustrating the value of sharing ideas among our various investment teams.

Self-reflection is a continual process at Wasatch, where the opportunity to learn from the past helps us set a clear path for the future. We believe this approach provides us with the best chance to translate our research expertise into continued long-term performance.

Thank you for the opportunity to manage your assets.

24

WASATCH SMALL CAP VALUE FUND (WMCVX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Small Cap Value		12.00%		-0.31%		7.69%
Russell 2000 Value Index		11.84%		0.73%		7.72%
Russell 2000 Index		13.35%		1.60%		4.00%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Small Cap Value Fund are 1.97%. The expense ratio shown elsewhere in this report may be different. 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 Net Assets
CorVel Corp.		3.3%
HEICO Corp., Class A		2.7%
Herbalife Ltd.		2.2%
Pericom Semiconductor Corp.		2.1%
Standard Microsystems Corp.		2.0%

Company	% of Net Assets
Solar Capital Ltd.		2.0%
Redwood Trust, Inc.		2.0%
OPNET Technologies, Inc.		1.9%
Copart, Inc.		1.9%
Marten Transport, Ltd.		1.9%

* As of September 30, 2010, 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. 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 indices.

25

WASATCH STRATEGIC INCOME FUND (WASIX) — Management Discussion SEPTEMBER 30, 2010

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 S&P 500 had its best September in 71 years, leading to an 11.29% gain for the quarter. The Strategic Income Fund’s 10.70% third quarter return nearly matched the S&P 500, and far outpaced the 2.48% return of the Barclays Capital U.S. Aggregate Bond Index. We continue to see significant swings in the equity markets as investors react to the news of the day. The market has become momentum driven, with companies that are doing really well

getting the attention, while strong companies not quite firing on all cylinders are being overlooked.

The Wasatch Strategic Income Fund does not follow a momentum-driven investment mandate. My goal is to deliver long-term returns between those of stocks and bonds, while taking less risk than a typical equity fund. I continue to focus on what I consider to be high quality companies that are able and willing to pay growing dividends. These companies tend to be stable with healthy balance sheets and consistent cash flow, making them well positioned in the current economy. The Fund’s current subsidized SEC 30-day yield is 3.35% (2.50% unsubsidized), which is healthy in an environment brandishing yields on cash and bonds near historic lows. Dividends are good tools to help lessen downside risk in the Fund.

DETAILS OF THE QUARTER

One positive indication that the Fund may be reducing its susceptibility to downside risk is that there were no significant stock declines during the quarter. The Fund’s largest detractor was Ultra Petroleum Corp., which slid 5%. Lower natural gas prices hurt the company slightly. However, Ultra Petroleum remains nicely profitable and has a competitive advantage as a low-cost operator in natural gas exploration and production.

Several stocks performed well, led by Herbalife Ltd., a provider of weight-loss and nutritional supplements. Herbalife has shifted from traditional multi-level marketing, where customers order monthly from distributors, to more of a retail approach emphasizing daily consumption. Advantages to the new model include expanding the market to customers that are not willing to commit to becoming Herbalife distributors but are still interested in purchasing the company’s products. The stock price was up dramatically over the past year and the company pays a solid, growing dividend.

Wirecard AG also appreciated nicely. Wirecard, a German-based international provider of electronic payment options, continues to capitalize on the personal credit megatrend. I initiated a position earlier this year after the stock price declined based on what I perceived to be a short-term concern. Wirecard’s stock moved up 59% this past quarter.

In my focus on owning high quality companies, capturing yield, and managing risk I sold a couple of companies that were not paying dividends, and took profits on others as their stock prices moved up. In doing so, the Fund’s cash position went from 3.1% to 7.3% in the quarter.

DETAILS OF THE YEAR

Over the last 12 months, the Fund returned 15.18% and outpaced stocks and bonds by a significant margin. Despite being happy about delivering a solid return for the Fund’s shareholders, I am grappling with my belief that the Fund may still be taking on too much risk if it is able to deliver outsized returns. As the year went on, I believe the Fund became more conservative. However, as other investors also began seeking higher quality companies, the stock prices of many of the Fund’s holdings continued to move higher.

We outperformed in the financials sector, where the Fund is substantially overweight relative to the S&P 500, thanks to companies like Ares Capital Corp., a private equity firm, which was up 57% this year due to fundamental company strength and a high dividend yield.

The industrials sector was the biggest detractor for the Fund compared to the S&P 500. Although our holdings in this sector performed well, it was underweight relative to the Index because companies in this sector generally do not offer the characteristics I seek for this Fund.

OUTLOOK

I think we will likely continue to see the equity markets seesaw due to the shortsightedness of many investors. Overall, I expect the market to muddle through the year ahead as we tackle the large economic challenges of reduced credit, high unemployment, and increased government debt and regulation.

I plan to stay focused on high quality companies with the ability and willingness to provide growing dividends. Currently, I believe blue chip stocks are among the most attractive investment opportunities, as many investors are overlooking them. Blue chips are stable, high quality companies trading at low valuations and providing attractive yields.

I will continue to seek a lower beta for the Fund, but I am not ready to add fixed-income securities in any significant way. While many investors continue to flee to the perceived safety of bonds, chasing ever-diminishing yields, I believe that fixed income products have become overly popular. With little room left for interest rates to fall there is a good chance of future price depreciation for bonds, which may well overshadow the small interest earned.

Overall, the Fund has had a nice evolution this year and I believe that it remains well positioned for the current economic environment.

Thank you for the opportunity to manage your assets.

  CFA^® is a trademark owned by CFA Institute.

26

WASATCH STRATEGIC INCOME FUND (WASIX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS	SINCE INCEPTION 2/1/06
Strategic Income		15.18%	N/A		0.86%
S&P 500 Index		10.16%	N/A		-0.32%
Barclays Capital U.S. Aggregate Bond Index		8.16%	N/A		6.53%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Strategic Income Fund are 1.94%. The Net Expenses are 1.28%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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. 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 Net Assets
Capstead Mortgage Corp.		7.3%
Redwood Trust, Inc.		6.5%
Herbalife Ltd.		4.1%
Ares Capital Corp.		3.8%
Teva Pharmaceutical Industries Ltd. ADR (Israel)		3.4%

Company	% of Net Assets
Solar Capital Ltd.		3.4%
Xilinx, Inc.		2.9%
MFA Financial, Inc.		2.7%
International Business Machines Corp.		2.7%
Wirecard AG (Germany)		2.5%

* As of September 30, 2010, there were 51 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 indices.

27

WASATCH ULTRA GROWTH FUND (WAMCX) — Management Discussion SEPTEMBER 30, 2010

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

  Ajay Krishnan, CFA Portfolio Manager OVERVIEW   In the year’s third quarter, the U.S. equity markets remained turbulent, with major market indices frequently posting towering gains or steep losses, often for barely discernible reasons. Despite the strong returns recorded over the period, the market still seemed directionless
in many ways, with no strong theme driving performance. Over the three months, the Wasatch Ultra Growth Fund returned 17.65%, solidly outpacing the

Russell 2000 Growth Index, which posted a 12.83% return for the third quarter.

Once again, our companies posted earnings growth that was stronger than we expected, and well ahead of the benchmark. Earnings growth remained somewhat difficult to find in the tepid economic environment, so companies that could produce it often posted healthy price-to-earnings ratios. Our investment approach remained consistent, even in the face of frequent market volatility. We kept our attention on identifying companies with hearty fundamentals and distinctive business themes.

DETAILS OF THE QUARTER

Among the themes that have been shaping our investing over recent periods has been our view that, even as consumer spending remains weak, corporate spending appears to be on a more solid footing. After years of cautious spending, corporate cash balances have risen to record levels. That cash, along with the desire to improve their businesses’ return on investment, has given many companies the impetus to spend money upgrading their systems.

A number of our top contributors in the period reflected this theme, particularly within the information technology (IT) sector, which was our strongest area over the quarter. Cognizant Technology Solutions Corp., a longtime holding and long-term leading performer, had significant impact on the Fund’s performance for the third quarter. This IT outsourcing company is enjoying gains as companies invest in new tools to improve efficiency, and contract with consultants to help implement them. After such a long run of success, we are evaluating whether to trim our position.

Fellow top-five contributors in information technology included Riverbed Technology, Inc. and F5 Networks, Inc. Both companies are achieving strong earnings growth as corporations reinforce their IT infrastructure in an era increasingly defined by cloud-based computing and the heavier network traffic it involves.

With so much cash sitting on corporate balance sheets, we haven’t been surprised to see an uptick in corporate acquisition activity. The Fund has benefited from this trend, most recently through the acquisition of ArcSight, Inc. by computing giant Hewlett-Packard.* While we don’t select stocks based on a belief that they may be acquisition targets, the same qualities that attract us to a company can draw corporate suitors as well.

Although we have more faith in corporate expenditures than in consumer spending, we have been able to identify some companies that are doing well in the consumer discretionary area. One of these is a recent addition to the portfolio, value-oriented retailer Gordmans Stores, Inc. Gordmans focuses on offering brand-name fashions at discounted prices. It’s clear that consumers are still wary of overspending, but the worst of the job losses appears to be behind us, and those who have ridden this crisis out may be somewhat more willing to open their wallets for items they perceive to offer good value.

Our greatest detractor from performance over the quarter came from the health care sector, an area of the market that is facing considerable uncertainty from new health care reform provisions. ICON plc (Ireland), a provider of pharmaceutical development services, has been hit in recent months by concerns that drug companies under increasing price pressure may begin to slow their research and development efforts, reducing demand for ICON’s services. We believe this is probably just a temporary concern. Further, we’re encouraged by the fact that much of ICON’s business comes from outside the U.S. market.

DETAILS OF THE YEAR

For the 12 months ended September 30, 2010, the Wasatch Ultra Growth Fund returned 26.44%, placing it well ahead of the Russell 2000 Growth Index, which returned 14.79% over the same period. F5 Networks, Cognizant Technology, and Riverbed Technology were also among our top contributors to performance for the one-year period. Interestingly, another technology stock, Silicon Laboratories, Inc., was our greatest detractor from performance. The company, along with many of its competitors, was hit by concerns that inventory levels in the semiconductor industry are uncomfortably high. Current and future holdings are subject to risk.

OUTLOOK

Even after some recent healthy spending, corporate balance sheets are still carrying huge levels of cash. We anticipate that the technology sector will continue to be one of the primary beneficiaries of renewed capital spending, though the pace could slow somewhat. Corporate acquisition activity should also remain an important factor in the equity markets.

In coming weeks, it will be interesting to see how the midterm elections in the U.S. play out. Should there be a change in control of the House or Senate, it could provide a catalyst for the market as many might expect this could lead to a looser regulatory environment going forward. That sentiment alone could drive the market, even if little actual change ultimately results.

Earnings growth continues to be highly valued in the equity markets. As a result, companies offering it — including a number of our holdings — have seen their prices move up substantially. We are keeping a careful eye on valuations, and are prepared to modify positions as we believe appropriate.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

* As of September 30, 2010, the Wasatch Ultra Growth Fund was not invested in Hewlett-Packard Co.

28

WASATCH ULTRA GROWTH FUND (WAMCX)—Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Ultra Growth		26.44%		0.11%		3.71%
Russell 2000 Growth Index		14.79%		2.35%		-0.13%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch Ultra Growth Fund are 1.82%. The Net Expenses are 1.80%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 Net Assets
Cognizant Technology Solutions Corp., Class A		4.3%
Power Integrations, Inc.		2.8%
MSCI, Inc., Class A		2.6%
Riverbed Technology, Inc.		2.5%
Ultimate Software Group, Inc.		2.4%

Company	% of Net Assets
Greenspring Global Partners II-B, L.P.		2.1%
Silicon Laboratories, Inc.		2.1%
LIC Housing Finance Ltd. (India)		2.0%
F5 Networks, Inc.		1.7%
Dollar Tree, Inc.		1.6%

* As of September 30, 2010, 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. 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 this or any index.

29

WASATCH-1ST SOURCE INCOME EQUITY FUND (FMIEX) — Management Discussion SEPTEMBER 30, 2010

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

  Ralph C. Shive, CFA Portfolio Manager   Michael L. Shinnick Portfolio Manager OVERVIEW   Strong stock market performance in the quarter was reassuring following the second quarter’s correction, which was spurred partly by fears of a double dip recession. We believed such

talk was premature, as it overlooked the continued improvements in economic data. That said, we sympathize with the view that the recovery will be relatively weak, as a result of debt overhang and excessive government intervention.

Robust mergers and acquisitions (M&A) activity contributed to the market’s positive tone in the quarter, as companies have been willing to pay significant premiums for strategic acquisitions. We believe this is an indication that valuations are inexpensive. We are also pleased to see M&A activity driven by public companies as strategic buyers, rather than leveraged private equity buyers.

DETAILS OF THE QUARTER

The largest contributor to the quarter’s performance was Potash Corp. of Saskatchewan, Inc. The Canada-based producer of fertilizer was the subject of a takeover offer. We eliminated the position as a takeover battle emerged. Agriculture-related stocks benefited during the quarter as the drought in Russia drove wheat prices higher. Our holdings of food products giant Archer Daniels Midland Co. and agricultural machinery manufacturer Deere & Co. benefited from increased interest in agriculture stocks. We will continue to seek exposure to the “global demand for food” theme.

We added to our holdings of Canadian mining stocks Cameco Corp. and Barrick Gold Corp. We think companies with tangible assets in the ground represent good value, and this is also a theme we expect to pursue.

The rebound of stocks impacted by the disastrous oil spill in the Gulf of Mexico helped the Fund’s results in the quarter. In particular, Transocean Ltd., builder of the rig that collapsed, and Anadarko Petroleum Corp., which owned 25% of the affected well.

Besides Potash, we eliminated two other holdings. Waste management firm Republic Services, Inc. was sold when it met our price target. Aerospace and building giant United Technologies Corp. was sold as part of an effort to trim our significant exposure to the industrials sector. We added retailer Best Buy Co., Inc. based on its attractive valuation.

The quarter’s biggest disappointment was the collapse in valuation experienced by some of our large cap technology names. Hewlett-Packard Co. and Intel Corp. suffered from capital allocation concerns as both companies engaged in acquisitions outside their core businesses. In addition,

HP was impacted by management turmoil, while Intel as a leading chip provider to notebook computer manufacturers has been viewed as vulnerable to Apple’s iPad. Both HP and Intel have powerful global franchises, and we believe they are attractively valued. Accordingly, we added to Intel on weakness while maintaining our HP exposure.

Another detractor was McKesson Corp., a dominant provider of medical supplies and pharmaceutical products. We continue to hold the stock, as we like the hidden value of McKesson’s information technology group.

DETAILS OF THE YEAR

For the 12 months ended September 30, 2010, the Fund provided a positive return but lagged the Russell 1000 Value Index. Contributions to performance came from the agriculture theme, as well as chemical products producer E. I. du Pont de Nemours and Co., electrical and machinery firms Emerson Electric Co. and Parker Hannifin Corp., and secure radio systems developer Harris Corp. Increasing demand from emerging markets is a long-term trend that has benefited industrial companies. Stocks with consumer staples characteristics such as Waste Management, Inc., food products distributor Sysco Corp. and H. J. Heinz Co. also performed well.

On the downside, exposure to the Gulf accident via Transocean and Anadarko detracted significantly, despite their rebound during the third quarter of 2010. The long-term outlook for the energy sector is supported by strong supply and demand fundamentals. Food distributor SUPERVALU, Inc. was hurt by aggressive competition from giant retailer Wal-Mart, which the Fund also holds. Finally, Nokia Corp. has been hurt by the success of Apple’s iPhone. Current and future holdings are subject to risk.

OUTLOOK

Structural headwinds remain in place, as the necessity of reducing debt across the economy will hinder growth and job creation for some time. At the same time, stocks seem attractively valued, assuming any sort of normal economic backdrop. In fact, stocks are as inexpensive as they have been since 1998, with many companies in a variety of sectors selling at P/E ratios of between 8 and 12.

The midterm election debates have highlighted our economic shortcomings, and could be the first step toward better policies. In our opinion, overindulgent government regulation is weighing on the economy, causing some company managements to hesitate in executing growth plans. It is possible that we will emerge from this election cycle with more positive growth-oriented policies that would help improve investor psychology.

For the Fund, we continue to emphasize strong dividend yields, attractive valuations and earnings growth potential. Our goal remains to invest in companies with the potential to do well for shareholders during bull markets, but with defensive characteristics that may allow them to hold up well during bear markets.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

30

WASATCH-1ST SOURCE INCOME EQUITY  FUND  (FMIEX)— Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Income Equity		7.07%		3.45%		6.89%
Russell 1000 Value Index		8.90%		-0.48%		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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Income Equity Fund are 1.18%. The Net Expenses are 1.10%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 Net Assets
Chevron Corp.		1.8%
Loews Corp.		1.8%
Exxon Mobil Corp.		1.8%
ConocoPhillips		1.8%
Harris Corp.		1.8%

Company	% of Net Assets
McKesson Corp.		1.8%
Travelers Cos., Inc.		1.7%
Marathon Oil Corp.		1.7%
Archer Daniels Midland Co.		1.7%
Verizon Communications, Inc.		1.7%

* As of September 30, 2010, there were 79 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 indices.

31

WASATCH-1ST SOURCE LONG/SHORT FUND (FMLSX) — Management Discussion SEPTEMBER 30, 2010

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

  Michael L. Shinnick Portfolio Manager   Ralph C. Shive, CFA Portfolio Manager OVERVIEW   After the second quarter correction, strong stock market performance in the third was reassuring. We expected the current economic recovery to be relatively weak by historical standards.

Still, we believed that talk of a double dip recession overlooked improvements in economic data in the U.S. and around the world. As we expected, final demand has remained weak, due to high unemployment and consumers’ efforts to reduce debt.

The Fund captured 70% of the upside during the quarter. The environment for shorting was difficult, as investors willing to pay high prices for growth supported areas of the market we perceived as overvalued.

DETAILS OF THE QUARTER

The Fund’s long positions generally worked well, in particular, some major positions in electronic commerce companies within the information technology space. Examples include Oracle Corp., TIBCO Software, Inc. and eBay, Inc. We also added new ecommerce positions during the quarter that contributed to performance, specifically Amazon.com, Inc. and network solutions provider Blue Coat Systems, Inc.

Increased positions in offshore drillers Ensco plc and Noble Corp. bounced back as the Gulf oil spill receded as an issue. Some of these gains were offset by covered calls as we intentionally mitigated the larger position sizes we built in these companies.

Two other new long positions that helped were retailer Best Buy Co., Inc. and storage solutions provider Iron Mountain, Inc. While both companies display modest growth compared with their history, they have strong balance sheets and now offer the opportunity for increased shareholder returns through dividends and share buybacks.

Long positions in medical technology companies hurt performance, principally, Medtronic, Inc. and Symmetry Medical, Inc. Lower numbers of patient procedures weighed down these companies’ results, reflecting the state of the economy and uncertainty regarding new health care guidelines. We believe they still have attractive products and business models, and we added to or maintained our positions.

The Fund’s short positions collectively did not add value for the quarter. We continue to have a lower-than-normal allocation to the short component of the portfolio given our view that most areas of the market still seem reasonably valued. In our judgment, investors “paying up” for increasingly scarce growth or yield are supporting pockets of overvalued stocks. In particular, the real estate investment trusts (REITs) space

was challenging, although we covered a short position in Duke Realty Corp. with a gain. We believe commercial real estate is overvalued in the public equity market relative to the private market. Moreover, real estate is much more highly valued based on cash flow and earnings than other dividend-paying segments of the equity market. We also covered some technology shorts with losses when our short cover disciplines were invoked due to stock price breakouts.

DETAILS OF THE YEAR

Over the past 12 months, the Fund’s short positions detracted from performance, in particular our shorting of REITs. Among long positions, the Gulf oil spill had a severe impact on offshore drilling companies, including Transocean Ltd., builder of the rig that collapsed. We expect that the tangible assets, global scope of business activity and backlog of earnings power represented by the leading offshore drillers provide the potential to be rewarded over time.

On the positive side, our early identification of the cloud-computing theme within technology contributed significantly. Cloud computing utilizes the Internet to provide on-demand access to services and data storage. Top performers under this theme during the year were Akamai Technologies, Inc., TIBCO and Silicon Graphics International Corp. Current and future holdings are subject to risk.

While the Fund lagged the S&P 500 for the year, it is important to note that we have intentionally used covered calls and cash to preserve shareholders’ capital. While this capped some of the upside, we are willing to lag the S&P in some quarters if we can steadily compound capital over time. We believe the Fund’s absolute and relative performance since inception validates this approach.

OUTLOOK

We believe stocks are attractively valued overall, and expect to maintain a net long position, with a focus on what we consider to be high quality business models, good balance sheets and low valuations. This core position will be supplemented by ecommerce and energy services holdings, as well as continued use of covered calls, cash and selective short positions in an effort to preserve capital.

We believe the economic recovery is real and that a double dip recession is unlikely. At the same time, it will not be driven by traditional inputs of pent-up demand for housing and autos, as we work through the poor decisions of the past decade. Unemployment is likely to remain high and housing prices are unlikely to recover much, if at all. Consumers still have the means to purchase necessary items or those offering good value. Likewise, most businesses can and will continue to spend on necessary items or those that improve efficiency. Viewing the market through this lens, we expect to maintain our focus on the energy, insurance, consumer staples, technology software and networking, and health care groups.

Thank you for the opportunity to manage your assets.

CFA^® is a trademark owned by CFA Institute.

32

WASATCH-1ST SOURCE LONG/SHORT FUND (FMLSX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		SINCE INCEPTION 8/1/03
Long/Short		5.52%		4.80%		5.37%
S&P 500 Index		10.16%		0.64%		4.07%
Citigroup U.S. Domestic 3-Month Treasury Bills Index		0.12%		2.48%		2.24%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Long/Short Fund are 1.91%. The expense ratio shown elsewhere in this report may be different. 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. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 LONG EQUITY HOLDINGS*

Company	% of Net Assets
Loews Corp.		5.1%
Devon Energy Corp.		4.4%
Iron Mountain, Inc.		3.7%
Best Buy Co., Inc.		3.4%
Noble Corp.		3.4%

Company	% of Net Assets
Ensco plc ADR (United Kingdom)		3.3%
Wal-Mart Stores, Inc.		3.2%
Allstate Corp.		2.9%
Oracle Corp.		2.7%
Blue Coat Systems, Inc.		2.4%

* As of September 30, 2010, there were 59 long and 9 short 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 shorts and written options.

  †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 U.S. Domestic 3-Month 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 indices.

33

WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Management Discussion SEPTEMBER 30, 2010

  Van R. Hoisington Portfolio Manager OVERVIEW Despite extreme economic intervention by federal authorities, real gross domestic product (GDP) has increased by a paltry 3% since the recession ended in June 2009, less than half the 6.6% average growth in the comparable periods of the prior 10 recoveries. Inventory investment, a trendless component of GDP, has accounted for nearly two-thirds of the entire rebound in economic activity from the worst

economic contraction since World War II. Over the past four quarters, inventory investment has moved from contracting real GDP at a 5% annual rate to boosting it at a 2% annual rate. Real final sales (GDP less inventory investment) grew at a meager pace of 1.1%, less than one-fourth the average 4.5% rate of increase in the comparable rebounds. Whether measured by GDP or final sales, economic growth needs to expand at least at the pace of population growth to sustain a steady standard of living. In this rebound, per capita real final sales grew by 0.2%, much lower than the earlier 10 postwar expansions when growth in real per capita sales was a robust 3.2%. Thus, the U.S. standard of living has remained stagnant at a depressed level. We believe the upward inventory thrust is complete and probably over-extended.

Some of the lowest inflation rates in the past four to six decades reflected these depressed conditions. Consequently, for the latest quarter and past 12 months, a drop in yields on long-term Treasury bonds (maturities longer than 20 years) meant that the market value of the Fund increased, enhancing the coupon (interest) on the Treasury bonds held by the Fund.

DETAILS OF THE QUARTER

For the quarter, the Fund returned 5.72%, versus 2.48% for the Barclays Capital U.S. Aggregate Bond Index. Over the quarter, the yield on the 30-year Treasury bond dropped to 3.68% from 3.88%, resulting in capital gains on the long dated Treasury securities held by the Fund. Year-to-date the Fund was up 24.45% compared with 7.94% for the Barclays and 3.89% for the S&P 500.*

DETAILS OF THE YEAR

Over the past 12 months, the Fund gained 12.65% compared to a gain of 8.16% for the Barclays, and 10.16% for the S&P 500. Over the past year, the long Treasury bond yield decreased 0.37 percentage points. The Fund’s results have exceeded the Barclays by 1.94 and 2.42 percentage points, respectively, for the past five- and 10-year periods. Additionally, the Fund has outperformed the S&P 500 by 7.5 and 9.26 percentage points over the same time periods.

OUTLOOK

Going forward, the only hope for economic growth is proper monetary and fiscal policy. Unfortunately, monetary and fiscal policy has yet to contribute to sustainable growth.

The greatest probability is that new monetary and fiscal policies will not prove any more successful than prior ones. Instead, unintended consequences are likely to negatively impact economic output. Thus, our view is that economic conditions will remain depressed, with a greater than 50% probability of a relapse to negative growth. Moreover, policy makers are proposing actions that have never been tested, complicated by the fact that current economic circumstances have not existed for eight decades.

The problem with the U.S. economy appears to us to be fourfold: 1) The economy is grossly over-indebted, with many asset prices falling; 2) fiscal policy is counter-productive and debilitating to economic growth as government expenditure multipliers are near zero; 3) proposed tax increases are already curtailing economic activity and tax multipliers approach -3%; and 4) increased bureaucracy with many new and yet unwritten financial regulations from the Dodd-Frank bill, along with health care regulations, make business planning nearly impossible.

A number of articles have surfaced emphasizing the theme that the Treasury bond market is in a bubble, implying that yields are so low they can only go higher, with the result of substantial capital loss to those owning Treasury paper. It is true that psychology drives markets in the short run making anything possible, so interest rates may rise or fall, regardless of long-term fundamentals. Based on the Fisher equation (the long risk-free yield equals the real rate on long Treasury bonds plus the expected rate of inflation), Treasury bonds are not in a bubble.

The real rate on long Treasury bonds is volatile and not predictable over the short-run. However, it has averaged 2.1% over the long run and is mean reverting. Over time, long Treasury bond yields move in the direction of inflationary expectations. Inflationary expectations lag actual inflation by a considerable period of time, sometimes more than several years. In addition, inflation is a lagging indicator. If the low point in inflation is well down the road, as cyclical analysis would suggest, then the low in bond yields lies ahead. Long Treasuries thus have substantial fundamental or intrinsic value and do not meet the criteria of an asset in a bubble.

Currently, inflation is tracking at a 1% annual rate and long-term Treasury bond yields are around 3.7%. Thus, the real yield is 2.7%, or 0.6 percentage points above the 140-year mean. Thus, investors are still able to purchase long-term Treasury securities at prices not yet reflecting their positive long-run potential.

We appreciate your investment in the Wasatch-Hoisington U.S. Treasury Fund.

* 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. You cannot invest in this or any index.

34

WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Portfolio  Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
U.S. Treasury		12.65%		8.14%		8.83%
Barclays Capital U.S. Aggregate Bond Index		8.16%		6.20%		6.41%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-Hoisington U.S. Treasury Fund are 0.79%. The Net Expenses are 0.75%. The expense ratio shown elsewhere in this report may be different. Expenses include direct expenses paid to the Advisor, before any expense reimbursements by the Advisor. Net Expenses are based on Fund expenses, net of waivers and reimbursements. 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 Net Assets
U.S. Treasury Strip, principal only		2/15/31		25.5%
U.S. Treasury Bond, 4.75%		2/15/37		13.1%
U.S. Treasury Strip, principal only		5/15/39		9.9%
U.S. Treasury Bond, 4.375%		5/15/40		9.2%
U.S. Treasury Bond, 4.50%		2/15/36		8.7%

Holding	Maturity Date		% of Net Assets
U.S. Treasury Strip, principal only		2/15/37		8.0%
U.S. Treasury Bond, 4.50%		5/15/38		5.7%
U.S. Treasury Bond, 3.875%		8/15/40		4.0%
U.S. Treasury Strip, principal only		5/15/40		4.0%
U.S. Treasury Bond, 4.25%		5/15/39		3.5%

* As of September 30, 2010, there were 14 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.

35

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Management Discussion SEPTEMBER 30, 2010

  Paul W. Gifford, CFA Portfolio Manager OVERVIEW   The Wasatch-1st Source Income Fund returned 1.82% during the third quarter of 2010. Over the same time period, the Barclays Capital U.S. Intermediate Government/Credit Bond Index returned 2.75%. Spreads versus U.S. Treasury securities on almost all corporate, agency and asset or mortgage-backed securities came in (tightened) providing additional return to the Fund.

Yields on 10-year Treasury bonds ranged between 2.45% and 3.15% during the quarter. By quarter-end, the yield was at the low end of that range at 2.51%, the lowest since the financial crisis began to ease in March of 2009.

The Federal Reserve’s program of buying government bonds ended earlier this year and many thought that in the coming years the Fed would unwind its purchases made in 2008 and 2009. That sentiment changed in the third quarter as economic data pointed to a weaker recovery. Instead, the Fed announced plans to reinvest the interest and principal of the bonds owned back into the Treasury market. This helped push interest rates lower.

The Fed funds rate has been near zero since the end of 2008. The move to zero occurred amidst financial turmoil and economic collapse. Federal Reserve Chairman Ben Bernanke recently commented on the “unusual uncertain- ties” the economy is dealing with. As a result, the Fed is going to keep short-term interest rates low for much longer than we and many bond market participants had forecasted just six to eight months ago.

A PROFITABLE QUARTER

One of the consequences of the Federal Reserve’s strategy of keeping rates low for an extended period of time is that investors will be forced into assets other than cash. Low short-term rates have helped flood the bond market with hundreds of billions of dollars. Over $500 billion has flowed into bond funds since the beginning of 2009, while stock funds have seen net redemptions. This difference is opposite of historical flows, where stock funds used to garner the most assets.

Investors’ search for yield has benefited virtually every sector of the bond market, including even the riskiest fixed income assets, such as junk bonds and securities backed by subprime mortgages, that were eschewed just 18 months ago. Bond yields have plummeted due to increased demand. Bonds with longer maturities and higher yields have become more in favor, as noted above in our comments on 10-year Treasuries.

Given that the Fed has put raising interest rates on hold, we have taken opportunities to buy securities with slightly longer maturities and higher yields. We feel comfortable that the benefit of improved yields will not be offset by a significant increase in interest rates any time soon. Since most trades to extend maturities were to sell an entity’s short- maturity security and buy the same entity’s longer maturity

security, while not changing the Fund’s overall credit and sector mix. The net effect of our buying and selling was a modest increase in the Fund’s effective duration or interest rate risk.

Examples of trades made during the quarter included selling Pfizer bonds maturing in 2015 and buying Pharmacia bonds maturing in 2018 for a yield improvement of 1.25 percentage points. (Pfizer Inc. bought Pharmacia Corp. in 2003.) We also sold a credit card asset-backed bond with a one-year maturity and bought another bond with a four-year maturity to enhance yield by 1.80 percentage points.

One area of the investment grade bond market that is starting to see relative weakness is the mortgage segment. As yields have fallen, the prospect of a refinancing wave is limiting the price appreciation of mortgage-backed securities. Fifteen-year mortgage rates fell below 4% during the quarter and 30-year mortgages are in the low 4% range (Source: bankrate.com as of 9/30/10). Historically, this would have been an even bigger event for the bond market, but times have changed. While many borrowers would benefit from lower mortgage rates, fewer are eligible due to reduced income, job loss or a decrease in home value. Therefore, it is likely the refinancing wave will only impact mortgages created since 2008 and prior to 2004 and be much smaller than anticipated. We continue to monitor the prepayment speeds of mortgage-backed securities and have kept our weighting in this area basically unchanged during the quarter.

STRONG YEAR FOR BONDS

The third quarter of 2010 continued the strong performance bonds have put in over the past 12 months. The investment grade bond market has benefited from cash flowing into bond funds, improved spreads and returns that have been higher than the income generated. The Fund has changed modestly versus a year ago. We increased the Fund’s weightings in Treasuries, corporate bonds and government agencies, and reduced exposure to asset-backed and mortgage-backed securities.

During the year, the Fund had a conservative bias with a shorter duration and lower exposure to BBB* credits than its benchmark, which hurt relative performance. We believe such a bias is warranted because the structural issues related to reducing debt within the economy will be played out over many years to come.

Thank you for allowing us the opportunity to be a trusted advisor for you.

CFA^® is a trademark owned by CFA Institute.

* According to Standard & Poor’s, a debt obligation rated ‘BBB’ exhibits adequate capacity to meet financial commitments, but is more subject to adverse economic conditions than securities rated ‘A’ or better.

36

WASATCH-1ST SOURCE INCOME FUND (FMEQX) — Portfolio Summary SEPTEMBER 30, 2010

AVERAGE ANNUAL TOTAL RETURNS

	1 YEAR		5 YEARS		10 YEARS
Income		5.95%		4.88%		4.96%
Barclays Capital U.S. Intermediate Government/Credit Bond Index		7.77%		5.94%		6.05%

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, 2010 prospectus, the Total Annual Fund Operating Expenses for the Wasatch-1st Source Income Fund are 0.85%. The expense ratio shown elsewhere in this report may be different. 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 Net Assets
U.S. Treasury Bond, 3.75%		11/15/18		7.6%
U.S. Treasury Bond , 3.25%		12/31/16		3.2%
Federal Home Loan Mortgage Corp., 4.75%		11/17/15		2.6%
U.S. Treasury Bond, 1.625%		1/15/18		2.0%
U.S. Treasury Bond, 4.25%		8/15/15		1.6%
Federal National Mortgage Assoc., 4.875%		12/15/16		1.5%

Holding	Maturity Date		% of Net Assets
Government National Mortgage Assoc., Series 2009-31, Class TA, 4.00%		3/20/39		1.5%
Federal National Mortgage Assoc., 0.80%		9/28/12		1.5%
Federal National Mortgage Assoc., 0.65%		6/3/13		1.5%
Government National Mortgage Assoc., Series 2009-110, Class AB, 4.00%		4/16/39		1.3%

* As of September 30, 2010, there were 166 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.

37

WASATCH FUNDS MANAGEMENT DISCUSSIONS  — Definitions of Financial Terms

Beta is a quantitative measure of the volatility of a given stock relative to the overall market, usually the S&P 500. Specifically, the performance the stock has experienced in the last five years as the S&P 500 moved up or down one percent. A beta above one is more volatile than the overall market, while a beta below one is less volatile.

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

A bull market is defined as a prolonged period in which investment prices rise faster than their historical average.

Corporate bonds are debt securities issued by a corporation for the purpose of raising money to expand its business.

Credit Risk is the risk that the issuer of a debt security will fail to repay principal and interest on the security when due.

Dividend yield is a company’s annual dividend payments divided by its market capitalization, or the dividend per share divided by the price per share.

Earnings growth is a measure of growth in a company’s net income over a specific period, often one year.

Effective duration is a measure of the responsiveness of a bond’s price to market interest rate changes. For example, if the interest rate increased 1%, a bond with an effective duration of five years would experience a decline in price of 5%.

Government agency bonds are debt securities issued by a U.S. government-sponsored agency.

The government expenditure multiplier captures the impact and the consequences of a change in government spending. When the government expenditure multiplier is zero it means that GDP is unchanged from where it started, but government spending has risen by $1 and private spending has fallen by $1.

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.

Inflation Risk is the possibility that inflation will reduce the purchasing power of a currency, and subsequently reduce the value of a security or asset, and may result in rising interest rates. Inflation is the overall upward price movement of goods and services in an economy that causes the value of a currency to decline.

An initial public offering (IPO) is a company’s first sale of stock to the public.

Interest Rate Risk is the risk that a debt security’s value will decline due to changes in market interest rates. The interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

The price-to-earnings or P/E ratio, also known as the P/E multiple, is the price of a stock divided by its earnings per share.

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 30-day current net SEC yield is the net investment income per share for a 30 day period divided by the maximum offering price per share on the calculation date. The figure is compounded and annualized. The 30-day yield unsubsidized is calculated in the absence of temporary expense waivers or reimbursements thus resulting in a lower yield.

Sovereign debt is government debt. Under the doctrine of sovereign immunity, creditors cannot force the repayment of sovereign debt.

The tax multiplier is the ratio of change in aggregate output (or gross domestic product) to an autonomous change in taxes. A tax multiplier of -2 means that a $1 cut in taxes will boost GDP by $2.

Yield is generally defined as the return an investor will receive by holding a bond to maturity.

38

WASATCH FUNDS — OPERATING EXPENSES (UNAUDITED) SEPTEMBER 30, 2010

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, 2010.

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.

A Fund’s annualized expense ratio may vary as a result of various factors including expenses that are not reimbursable under the contractual agreement between the Fund and the Advisor such as interest, taxes, brokerage commissions, other investment related costs, dividend expense on short sales, and extraordinary expenses. The Wasatch-1st Source Long/Short and Wasatch-1st Source Income funds have no contractual limitation on expenses.

39

WASATCH FUNDS — OPERATING EXPENSES(UNAUDITED)(continued) SEPTEMBER 30, 2010

	Account Value				Expenses Paid During Period*		Annualized Expense Ratio*
Fund/Class and Return	Beginning of Period April 1, 2010		End of Period September 30, 2010
Core Growth Fund
Actual		$1,000.00		$1,034.50		$6.17		1.21%
Hypothetical (5% before expenses)		$1,000.00		$1,019.00		$6.12		1.21%
Emerging Markets Small Cap Fund
Actual		$1,000.00		$1,209.20		$11.35		2.05%
Hypothetical (5% before expenses)		$1,000.00		$1,014.79		$10.35		2.05%
Global Opportunities Fund
Actual		$1,000.00		$1,064.30		$11.64		2.25%
Hypothetical (5% before expenses)		$1,000.00		$1,013.79		$11.36		2.25%
Global Science & Technology Fund
Actual		$1,000.00		$1,063.10		$10.09		1.95%
Hypothetical (5% before expenses)		$1,000.00		$1,015.29		$9.85		1.95%
Heritage Growth Fund
Actual		$1,000.00		$1,039.80		$4.86		0.95%
Hypothetical (5% before expenses)		$1,000.00		$1,020.31		$4.81		0.95%
International Growth Fund
Actual		$1,000.00		$1,189.30		$10.15		1.85%
Hypothetical (5% before expenses)		$1,000.00		$1,015.79		$9.35		1.85%
International Opportunities Fund
Actual		$1,000.00		$1,127.20		$12.00		2.25%
Hypothetical (5% before expenses)		$1,000.00		$1,013.79		$11.36		2.25%
Micro Cap Fund
Actual		$1,000.00		$1,009.10		$10.98		2.18%
Hypothetical (5% before expenses)		$1,000.00		$1,042.34		$33.42		2.18%
Micro Cap Value Fund
Actual		$1,000.00		$1,008.50		$11.33		2.25%
Hypothetical (5% before expenses)		$1,000.00		$1,013.79		$11.36		2.25%
Small Growth Fund
Actual		$1,000.00		$1,061.70		$6.51		1.26%
Hypothetical (5% before expenses)		$1,000.00		$1,018.75		$6.38		1.26%
Small Cap Value Fund
Actual		$1,000.00		$1,003.30		$9.04		1.80%
Hypothetical (5% before expenses)		$1,000.00		$1,016.04		$9.10		1.80%
Strategic Income Fund
Actual		$1,000.00		$1,039.90		$4.96		0.97%
Hypothetical (5% before expenses)		$1,000.00		$1,020.21		$4.91		0.97%
Ultra Growth Fund
Actual		$1,000.00		$1,104.30		$8.76		1.66%
Hypothetical (5% before expenses)		$1,000.00		$1,016.75		$8.39		1.66%
Wasatch-1st Source Income Equity Fund
Actual		$1,000.00		$965.80		$5.42		1.10%
Hypothetical (5% before expenses)		$1,000.00		$1,019.55		$5.57		1.10%
Wasatch-1st Source Long/Short Fund
Actual		$1,000.00		$986.90		$8.47		1.70%
Hypothetical (5% before expenses)		$1,000.00		$1,016.55		$8.59		1.70%
U.S. Treasury Fund
Actual		$1,000.00		$1,242.30		$4.22		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		$1,040.50		$3.58		0.70%
Hypothetical (5% before expenses)		$1,000.00		$1,021.56		$3.55		0.70%

*Expenses are equal to a fund’s 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).

40

WASATCH CORE GROWTH FUND (WGROX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 94.3%
		Airlines 2.1%
	207,549	Allegiant Travel Co.	$	8,783,474
		Apparel, Accessories & Luxury Goods 1.3%
	1,953,497	Ports Design Ltd. (China)		5,400,295
		Application Software 2.6%
	115,838	ANSYS, Inc.*		4,894,155
	299,300	Tyler Technologies, Inc.*		6,033,888
				10,928,043
		Asset Management & Custody Banks 5.8%
	99,299	Affiliated Managers Group, Inc.*		7,746,315
	429,109	SEI Investments Co.		8,728,077
	359,342	Solar Capital Ltd.		7,707,885
				24,182,277
		Automotive Retail 5.1%
	180,281	Monro Muffler Brake, Inc.		8,312,757
	244,674	O’Reilly Automotive, Inc.*		13,016,657
				21,329,414
		Consumer Finance 4.6%
	500,369	Dollar Financial Corp.*		10,442,701
	310,510	First Cash Financial Services, Inc.*		8,616,652
				19,059,353
		Data Processing & Outsourced Services 2.7%
	170,214	Alliance Data Systems Corp.*		11,108,166
		Distributors 3.1%
	632,890	LKQ Corp.*		13,164,112
		Diversified Banks 1.9%
	235,526	Axis Bank Ltd. (India)		8,028,116
		Diversified Support Services 5.4%
	554,517	Copart, Inc.*		18,282,426
	158,871	LPS Brasil — Consultoria de Imoveis S.A. (Brazil)		2,855,739
	71,225	Ritchie Bros. Auctioneers, Inc. (Canada)		1,479,343
				22,617,508
		Electrical Components & Equipment 1.0%
	137,720	Polypore International, Inc.*		4,153,635
		Environmental & Facilities Services 2.9%
	102,895	Tetra Tech, Inc.*		2,157,708
	251,405	Waste Connections, Inc.*		9,970,722
				12,128,430
		Health Care Distributors 2.2%
	438,307	PSS World Medical, Inc.*		9,371,004
		Health Care Facilities 3.0%
	475,469	Emeritus Corp.*		8,111,501
	204,740	VCA Antech, Inc.*		4,317,967
				12,429,468
		Health Care Services 3.2%
	251,014	MEDNAX, Inc.*		13,379,046
		Homefurnishing Retail 3.4%
	767,922	Aaron’s, Inc.		14,168,161

Shares			Value
		Industrial Machinery 3.5%
	130,720	Graco, Inc.	$	4,147,746
	299,040	IDEX Corp.		10,618,910
				14,766,656
		Internet Software & Services 0.5%
	117,346	DealerTrack Holdings, Inc.*		2,004,270
		IT Consulting & Other Services 1.6%
	105,880	Cognizant Technology Solutions Corp., Class A*		6,826,084
		Leisure Facilities 3.8%
	399,253	Life Time Fitness, Inc.*		15,758,516
		Leisure Products 1.5%
	321,199	Pool Corp.		6,446,464
		Life Sciences Tools & Services 3.1%
	352,645	Pharmaceutical Product Development, Inc.		8,742,070
	68,040	Techne Corp.		4,200,109
				12,942,179
		Mortgage REITs 0.5%
	156,636	Redwood Trust, Inc.		2,264,957
		Oil & Gas Equipment & Services 2.3%
	116,215	Dril-Quip, Inc.*		7,218,114
	234,730	TETRA Technologies, Inc.*		2,394,246
				9,612,360
		Oil & Gas Exploration & Production 1.2%
	307,625	Petrohawk Energy Corp.*		4,965,067
		Personal Products 3.6%
	251,280	Herbalife Ltd.		15,164,748
		Regional Banks 1.2%
	5,142,805	City Union Bank Ltd. (India)		5,184,579
		Research & Consulting Services 3.2%
	67,280	Corporate Executive Board Co. (The)		2,123,357
	262,493	CRA International, Inc.*		4,737,998
	462,567	Resources Connection, Inc.		6,364,922
				13,226,277
		Semiconductors 5.8%
	133,940	Hittite Microwave Corp.*		6,382,241
	387,065	Melexis N.V.* (Belgium)		5,863,774
	378,644	Micrel, Inc.		3,733,430
	88,525	Power Integrations, Inc.		2,814,210
	151,643	Silicon Laboratories, Inc.*		5,557,716
				24,351,371
		Specialized Finance 5.2%
	35,579	Crisil Ltd. (India)		4,760,230
	344,680	MSCI, Inc., Class A*		11,446,823
	86,745	Portfolio Recovery Associates, Inc.*		5,608,064
				21,815,117
		Specialty Stores 1.3%
	226,475	Hibbett Sports, Inc.*		5,650,551
		Thrifts & Mortgage Finance 1.8%
	451,400	Housing Development Finance Corp. Ltd. (India)		7,326,272
		Trading Companies & Distributors 2.3%
	132,177	MSC Industrial Direct Co., Inc., Class A		7,142,845
	171,458	Rush Enterprises, Inc., Class B*		2,357,547
				9,500,392

41

WASATCH CORE GROWTH FUND (WGROX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

Shares			Value
		Trucking 1.6%
	269,002	Old Dominion Freight Line, Inc.*	$	6,838,031
		Total Common Stocks (cost $312,679,651)		394,874,393
		PREFERRED STOCKS 1.5%
		Regional Banks 1.5%
	938,675	Banco Daycoval S.A. Pfd. (Brazil)		6,172,869
		Total Preferred Stocks (cost $6,577,985)		6,172,869

Principal Amount			Value
		SHORT-TERM INVESTMENTS 4.0%
		Repurchase Agreement 4.0%
	$16,653,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $15,965,000 of United States Treasury Notes 4.625% due 2/29/12; value: $16,988,357; repurchase proceeds: $16,653,005 (cost $16,653,000)	$	16,653,000
		Total Short-Term Investments (cost $16,653,000)		16,653,000
		Total Investments (cost $335,910,636) 99.8%		417,700,262
		Other Assets less Liabilities 0.2%		941,451
		NET ASSETS 100.0%	$	418,641,713
		*Non-income producing. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2010, Wasatch Core Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Belgium		1.5
Brazil		2.2
Canada		0.4
China		1.3
India		6.3
United States		88.3
TOTAL		100.0	%

42

WASATCH EMERGING MARKETS SMALL CAP FUND (WAEMX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 95.3%
		Aerospace & Defense 0.3%
	33,250	Bharat Electronics Ltd. (India)	$	1,281,163
		Air Freight & Logistics 0.9%
	3,627,557	Aramex PJSC* (United Arab Emirates)		2,172,959
	67,280	Blue Dart Express Ltd. (India)		1,684,358
				3,857,317
		Aluminum 0.2%
	1,297,000	Midas Holdings Ltd. (Singapore)		980,709
		Apparel Retail 2.8%
	1,149,485	Mr Price Group Ltd. (South Africa)		9,057,546
	471,600	Padini Holdings Berhad (Malaysia)		696,630
	277,510	Truworths International Ltd. (South Africa)		2,783,052
				12,537,228
		Apparel, Accessories & Luxury Goods 5.1%
	3,631,995	361 Degrees International Ltd. (China)		3,651,046
	175,695	Cia. Hering (Brazil)		7,550,529
	79,335	LG Fashion Corp. (Korea)		2,365,613
	2,351,220	Ports Design Ltd. (China)		6,499,770
	2,631,880	Xtep International Holdings Ltd. (China)		2,208,129
	872,923	Zhulian Corp. Bhd. (Malaysia)		545,754
				22,820,841
		Asset Management & Custody Banks 1.5%
	661,131	CETIP S.A. (Brazil)		6,513,740
		Auto Parts & Equipment 2.4%
	2,338,815	Exide Industries Ltd. (India)		8,640,109
	94,028	WABCO-TVS India Ltd. (India)		2,239,011
				10,879,120
		Brewers 0.3%
	278,320	Guinness Anchor Berhad (Malaysia)		755,530
	16,900	PT Multi Bintang Indonesia Tbk (Indonesia)		380,605
	4,995	Zwack Unicum Nyrt. (Hungary)		407,435
				1,543,570
		Broadcasting 0.8%
	2,736,745	BEC World Public Co. Ltd. (Thailand)		3,494,197
		Building Products 2.1%
	108,365	Blue Star Ltd. (India)		1,167,453
	3,229,760	Dynasty Ceramic Public Co. Ltd. (Thailand)		5,374,065
	8,235,370	Home Product Center Public Co.
		Ltd. (Thailand)		2,984,813
				9,526,331
		Coal & Consumable Fuels 0.5%
	335,780	PT Indo Tambangraya Megah (Indonesia)		1,565,092
	341,400	PT Tambang Batubara Bukit Asam Tbk (Indonesia)		744,004
				2,309,096
		Commodity Chemicals 2.1%
	1,350,764	Berger Paints India Ltd. (India)		3,290,111
	337,520	Castrol India Ltd. (India)		3,819,493
	54,061	Kansai Nerolac Paints Ltd. (India)		1,263,248
	113,203	Paints & Chemical Industries Co. S.A.E. (Egypt)		1,153,306
				9,526,158

Shares			Value
		Communications Equipment 1.9%
	324,460	Dasan Networks, Inc.* (Korea)	$	2,689,013
	6,198,860	O-Net Communications Group Ltd.* (China)		4,345,985
	192,910	Ubiquoss, Inc. (Korea)		1,344,998
				8,379,996
		Computer Hardware 0.2%
	93,600	Positivo Informatica S.A. (Brazil)		939,315
		Computer Storage & Peripherals 0.7%
	539,978	Simplo Technology Co. Ltd. (Taiwan)		3,076,552
		Construction & Engineering 0.2%
	148,891	Heerim Architects & Planners (Korea)		1,038,091
		Construction & Farm Machinery & Heavy Trucks 1.0%
	4,900,310	International Mining Machinery Holdings
		Ltd.* (China)		4,591,297
		Construction Materials 5.0%
	393,216	Adana Cimento Sanayii Turk Anonim
		Sirketi, Class A (Turkey)		1,398,331
	218,700	Corp Moctezuma S.A.B de C.V. (Mexico)		527,791
	6,960	Holcim Maroc S.A. (Morocco)		2,145,049
	8,049,000	Holcim Philippines, Inc. (Philippines)		2,017,523
	47,955	Misr Beni Suef Cement Co. (Egypt)		1,540,659
	30,172,900	PT Holcim Indonesia Tbk* (Indonesia)		8,198,239
	1,049,280	PT Semen Gresik (Persero) Tbk (Indonesia)		1,163,907
	230,960	Ultra Tech Cement Ltd. (India)		5,463,680
				22,455,179
		Consumer Finance 2.9%
	648,805	Banco Compartamos S.A. de C.V. (Mexico)		4,119,763
	599,326	Mahindra & Mahindra Financial Services Ltd. (India)		8,602,766
				12,722,529
		Department Stores 3.6%
	94,995	Lojas Renner S.A. (Brazil)		3,251,924
	308,400	Marisa Lojas S.A. (Brazil)		4,403,894
	20,447,886	PT Ramayana Lestari Sentosa Tbk (Indonesia)		1,993,239
	2,159,400	Robinson Department Store Public Co. Ltd. (Thailand)		1,629,333
	1,228,490	Woolworths Holdings Ltd. (South Africa)		4,759,079
				16,037,469
		Distillers & Vintners 0.2%
	77,255	Distell Group Ltd. (South Africa)		763,696
		Distributors 1.3%
	4,869,200	Dah Chong Hong Holdings Ltd.
		(Hong Kong)		5,992,919
		Diversified Banks 6.2%
	1,268,290	Allahabad Bank Ltd. (India)		6,575,012
	827,080	Asya Katilim Bankasi AS (Turkey)		1,987,459
	31,220,000	Bank Pembangunan Daerah Jawa* (Indonesia)		5,456,941
	226,115	Capitec Bank Holdings Ltd. (South Africa)		4,826,486
	664,904	National Societe Generale Bank S.A.E. (Egypt)		4,323,687
	3,144,491	PT Bank Tabungan Pensiunan Nasional Tbk* (Indonesia)		4,298,352
				27,467,937

43

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

Shares			Value
		Diversified Metals & Mining 1.7%
	76,900	Assore Ltd. (South Africa)	$	1,718,131
	4,118,245	Merafe Resources Ltd. (South Africa)		855,509
	14,130,855	PT Timah Tbk (Indonesia)		4,987,361
				7,561,001
		Education Services 0.3%
	1,339,781	Advtech Ltd. (South Africa)		1,161,272
		Electrical Components & Equipment 1.0%
	71,210	Voltamp Transformers Ltd. (India)		1,481,726
	1,392,010	Wasion Group Holdings Ltd. (China)		1,067,423
	631,240	Zhuzhou CSR Times Electric Co. Ltd., Series H (China)		2,029,750
				4,578,899
		Electronic Components 0.6%
	180,835	Partron Co. Ltd. (Korea)		2,704,001
		Electronic Equipment & Instruments 1.1%
	2,036,829	Chroma ATE, Inc. (Taiwan)		4,857,121
		Food Retail 1.8%
	2,451,730	CP ALL Public Co. Ltd. (Thailand)		3,413,034
	250,880	Eurocash S.A. (Poland)		2,270,856
	153,935	Shoprite Holdings Ltd. (South Africa)		2,182,216
				7,866,106
		Footwear 3.2%
	1,178,430	Bata India Ltd. (India)		8,822,162
	725,165	Daphne International Holdings Ltd. (China)		857,006
	235,100	Grendene S.A. (Brazil)		1,192,154
	73,075	NG2 S.A. (Poland)		1,443,376
	2,887,825	Peak Sport Products Co. Ltd. (China)		2,113,960
				14,428,658
		Gas Utilities 0.5%
	325,625	Indraprastha Gas Ltd. (India)		2,224,700
		General Merchandise Stores 1.3%
	922,505	Clicks Group Ltd. (South Africa)		5,841,651
		Gold 1.2%
	492,599	Koza Altin Isletmeleri AS (Turkey)		5,578,389
		Health Care Facilities 0.6%
	2,368,823	KPJ Healthcare Berhad (Malaysia)		2,670,393
		Health Care Services 0.9%
	325,900	Diagnosticos da America S.A. (Brazil)		3,924,652
		Health Care Supplies 0.1%
	154,960	Shandong Weigao Group Medical Polymer
		Co. Ltd., Class H (China)		439,359
		Highways & Railtracks 1.0%
	12,867,545	PT Jasa Marga (Indonesia)		4,613,574
		Home Improvement Retail 0.5%
	4,595,750	Ace Hardware Indonesia (Indonesia)		1,042,733
	108,625	Cashbuild Ltd. (South Africa)		1,213,861
				2,256,594
		Homefurnishing Retail 0.6%
	276,520	Lewis Group Ltd. (South Africa)		2,781,046
		Hotels, Resorts & Cruise Lines 0.6%
	219,718	City Lodge Hotels Ltd. (South Africa)		2,483,632
		Human Resource & Employment Services 0.1%
	657,300	Jobstreet Corp. Berhad (Malaysia)		485,469

Shares			Value
		Hypermarkets & Super Centers 1.0%
	898,530	Siam Makro Public Co. Ltd. (Thailand)	$	4,440,840
		Industrial Gases 0.3%
	1,249,700	Yingde Gases Group Co.* (China)		1,180,558
		Industrial Machinery 2.3%
	207,057	AIA Engineering Ltd. (India)		1,843,169
	2,719,170	China Automation Group Ltd. (China)		2,193,755
	85,110	Cummins India Ltd. (India)		1,390,247
	180,300	King Slide Works Co. Ltd. (Taiwan)		897,417
	292,718	SKF India Ltd. (India)		3,836,896
				10,161,484
		Internet Software & Services 0.8%
	22,415	Daum Communications Corp.* (Korea)		1,549,048
	4,900,000	Pacific Online (China)		2,134,471
				3,683,519
		Investment Banking & Brokerage 0.7%
	546,160	Egyptian Financial Group-Hermes Holding (Egypt)		2,782,125
	43,610	Egyptian Financial Group-Hermes Holding GDR (Egypt)		453,108
				3,235,233
		Life & Health Insurance 0.4%
	162,800	Amil Participacoes S.A. (Brazil)		1,563,610
		Managed Health Care 0.5%
	185,840	OdontoPrev S.A. (Brazil)		2,182,029
		Marine Ports & Services 2.3%
	5,068,114	International Container Terminal Services, Inc. (Philippines)		4,434,672
	363,020	Novorossiysk Commercial Sea Trade Port GDR (Russia)		3,441,430
	230,025	Santos Brasil Participacoes S.A.** (Brazil)		2,483,564
				10,359,666
		Oil & Gas Equipment & Services 0.3%
	603,810	Renaissance Services S.A.O.G. (Oman)		1,309,562
		Oil & Gas Exploration & Production 1.8%
	1,927,310	Afren plc* (United Kingdom)		3,347,154
	166,155	Gran Tierra Energy, Inc.* (Canada)		1,282,716
	180,505	Pan Orient Energy Corp.* (Canada)		1,308,655
	1,624,250	Petroneft Resources plc* (United
		Kingdom)		1,160,468
	129,690	Selan Exploration Technology Ltd. (India)		966,578
				8,065,571
		Other Diversified Financial Services 1.1%
	170,020	Intergroup Financial Services Corp. (Peru)		4,930,580
		Packaged Foods & Meats 4.3%
	2,084,505	Agthia Group PJSC (United Arab Emirates)		1,282,702
	209,055	Dutch Lady Milk Industries Berhad (Malaysia)		1,117,398
	80,000	Glaxo SmithKline Consumer Healthcare Ltd. (India)		3,606,988
	1,007,525	Hsu Fu Chi International Ltd. (China)		2,526,660
	898,070	MAMEE Double Decker Berhad (Malaysia)		1,009,492
	61,700	Nestle Malaysia Berhad (Malaysia)		839,456
	479,590	Pinar Sut Mamulleri Sanayii A.S. (Turkey)		3,278,512
	4,895,835	PT Mayora Indah Tbk (Indonesia)		5,622,668
				19,283,876
		Paper Products 0.2%
	4,659,725	NTPM Holdings Berhad (Malaysia)		883,038

44

SEPTEMBER 30, 2010

Shares			Value
		Personal Products 1.7%
	322,700	Colgate-Palmolive India Ltd. (India)	$	6,249,687
	401,960	Dabur India Ltd. (India)		958,496
	211,565	PT Mandom Indonesia Tbk (Indonesia)		173,044
				7,381,227
		Pharmaceuticals 2.9%
	46,974	Daewoong Pharmaceutical Co. Ltd. (Korea)		2,016,555
	284,138	Egyptian International Pharmaceutical Industries Co. (Egypt)		1,796,263
	572,600	Genomma Lab Internacional S.A. de C.V., Class B* (Mexico)		1,096,427
	66,440	Merck Ltd. (India)		1,042,991
	9,625	Pharmstandard* *** (Russia)		725,985
	50,660	Pharmstandard GDR* (Russia)		1,132,251
	18,037,000	PT Kalbe Farma Tbk (Indonesia)		5,153,429
				12,963,901
		Precious Metals & Minerals 0.4%
	258,135	Northam Platinum Ltd. (South Africa)		1,700,806
		Railroads 1.6%
	484,996	Globaltrans Investment plc GDR (Russia)		7,318,590
		Restaurants 0.9%
	766,425	Ajisen China Holdings Ltd. (China)		1,199,129
	898,955	Alsea de Mexico S.A.B. de C.V. (Mexico)		890,544
	231,600	FU JI Food & Catering Services Holdings Ltd.* *** (China)		298
	1,826,545	KFC Holdings Malaysia Berhad (Malaysia)		1,846,071
	65,000	PT Fastfood Indonesia (Indonesia)		54,986
				3,991,028
		Semiconductor Equipment 0.3%
	182,920	Hanmi Semiconductor Co. Ltd. (Korea)		1,264,117
		Semiconductors 1.9%
	83,505	Melfas, Inc.* (Korea)		1,984,640
	620,350	Novatek Microelectronics Corp. Ltd. (Taiwan)		1,757,309
	129,060	RichTek Technology Corp. (Taiwan)		958,402
	1,739,085	Sporton International, Inc. (Taiwan)		3,551,482
				8,251,833
		Soft Drinks 0.6%
	221,985	Coca-Cola Icecek A.S. (Turkey)		2,713,116
		Specialized Finance 2.6%
	1,167,790	Bolsa Mexicana de Valores S.A.B. de C.V. (Mexico)		1,945,970
	14,281	Crisil Ltd. (India)		1,910,702
	52,265	ICRA Ltd. (India)		1,439,832
	592,314	JSE Ltd. (South Africa)		6,241,360
				11,537,864
		Specialty Chemicals 0.7%
	149,715	Akzo Nobel India Ltd. (India)		3,089,423
		Steel 0.2%
	340,199	Ratnamani Metals & Tubes Ltd. (India)		1,016,017
		Technology Distributors 0.8%
	1,842,173	WPG Holdings Co. Ltd. (Taiwan)		3,655,866
		Thrifts & Mortgage Finance 4.3%
	892,659	Dewan Housing Finance Corp. Ltd. (India)		5,673,604
	445,061	Gruh Finance Ltd. (India)		4,098,503
	300,595	LIC Housing Finance Ltd. (India)		9,626,265
				19,398,372

Shares			Value
		Tobacco 0.4%
	29,905	Eastern Tobacco (Egypt)	$	667,123
	2,520	Philip Morris CR A.S. (Czech Republic)		1,304,531
				1,971,654
		Trading Companies & Distributors 0.4%
	3,061,387	PT Hexindo Adiperkasa Tbk (Indonesia)		1,817,967
		Wireless Telecommunication Services 0.3%
	22,473,300	Safaricom Ltd. (Kenya)		1,224,551
		Total Common Stocks (cost $345,728,229)		425,766,865
		PREFERRED STOCKS 3.2%
		Construction & Farm Machinery & Heavy Trucks 1.3%
	1,805,770	Marcopolo S.A. Pfd. (Brazil)		5,969,488
		Diversified Banks 1.0%
	488,300	Banco Industrial e Comercial S.A. (Bic Banco) Pfd. (Brazil)		4,453,503
		Office Services & Supplies 0.4%
	92,900	Contax Participacoes S.A. Pfd (Brazil)		1,510,859
		Regional Banks 0.5%
	328,455	Banco Daycoval S.A. Pfd. (Brazil)		2,159,970
		Total Preferred Stocks (cost $12,586,598)		14,093,820
		LIMITED PARTNERSHIP INTEREST 0.3%
		Oil & Gas Exploration & Production 0.3%
	176,955	Zhaikmunai L.P. GDR* (Kazakhstan)		1,415,640
		Total Limited Partnership Interest (cost $1,213,856)		1,415,640
		WARRANTS 0.0%
		Restaurants 0.0%
	50,382	KFC Holdings Malaysia Berhad, expiring 9/14/15* (Malaysia)		20,074
		Total Warrants (cost $0)		20,074

45

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

Principal Amount			Value
		SHORT-TERM INVESTMENTS 3.3%
		Repurchase Agreement 3.3%
	$14,721,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $13,940,000 of United States Treasury Notes 3.125% due 5/15/19; value: $15,020,350; repurchase proceeds: $14,721,004 (cost $14,721,000)	$	14,721,000
		Total Short-Term Investments (cost $14,721,000)		14,721,000
		Total Investments (cost $374,249,683) 102.1%		456,017,399
		Liabilities less Other Assets (2.1)%		(9,266,244	)
		NET ASSETS 100.0%	$	446,751,155
		*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). GDR Global Depositary Receipt. See Notes to Financial Statements.

At September 30, 2010, Wasatch Emerging Markets Small Cap Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Brazil		10.9
Canada		0.6
China		8.4
Czech Republic		0.3
Egypt		2.9
Hong Kong		1.4
Hungary		0.1
India		23.4
Indonesia		10.7
Kazakhstan		0.3
Kenya		0.3
Korea		3.8
Malaysia		2.5
Mexico		1.9
Morocco		0.5
Oman		0.3
Peru		1.1
Philippines		1.5
Poland		0.8
Russia		2.9
Singapore		0.2
South Africa		11.0
Taiwan		4.2
Thailand		4.8
Turkey		3.4
United Arab Emirates		0.8
United Kingdom		1.0
TOTAL		100.0	%

46

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 95.0%
		Advertising 0.2%
	10,900	1000mercis* (France)	$	513,648
		Aerospace & Defense 0.2%
	9,500	Bharat Electronics Ltd. (India)		366,047
		Air Freight & Logistics 1.1%
	3,359,260	Aramex PJSC* (United Arab Emirates)		2,012,245
	3,200	Forward Air Corp.		83,200
	407,600	Goodpack Ltd. (Singapore)		591,622
				2,687,067
		Airlines 0.1%
	6,900	Allegiant Travel Co.		292,008
		Aluminum 0.2%
	665,000	Midas Holdings Ltd. (Singapore)		502,831
		Apparel Retail 0.9%
	1,220	Camaieu (France)		265,947
	16,250	Jos. A. Bank Clothiers, Inc.*		692,413
	22,500	Ross Stores, Inc.		1,228,950
				2,187,310
		Apparel, Accessories & Luxury Goods 4.8%
	491,000	Anta Sports Products Ltd. (China)		1,144,083
	2,350	Bijou Brigitte AG (Germany)		332,158
	75,670	Billabong International Ltd. (Australia)		581,921
	375,000	China Lilang Ltd. (China)		628,278
	6,700	Fossil, Inc.*		360,393
	45,200	Gerry Weber International AG (Germany)		1,850,733
	41,600	Gildan Activewear, Inc.* (Canada)		1,168,544
	53,000	Li Ning Co. Ltd. (China)		160,859
	18,953	Odd Molly International AB (Sweden)		303,140
	546,500	Ports Design Ltd. (China)		1,510,758
	327,400	Ted Baker plc (United Kingdom)		2,891,813
	470,000	Xtep International Holdings Ltd. (China)		394,327
				11,327,007
		Application Software 2.5%
	11,000	Aveva Group plc (United Kingdom)		252,700
	76,620	Convio, Inc.*		706,436
	11,900	Ebix, Inc.*		279,055
	4,200	FactSet Research Systems, Inc.		340,746
	226,000	Kingdee International Software Group Co. Ltd. (China)		106,020
	36,041	RealPage, Inc.*		687,662
	97,625	SciQuest, Inc.*		1,179,310
	3,900	SimCorp A/S (Denmark)		620,966
	48,700	Sonic Solutions, Inc.*		554,206
	13,635	Tyler Technologies, Inc.*		274,882
	20,500	Ultimate Software Group, Inc.*		792,120
				5,794,103
		Asset Management & Custody Banks 2.1%
	525,000	ARA Asset Management Ltd. (Singapore)		486,739
	6,500	Bank of New York Mellon Corp. (The)		169,845
	52,029	CETIP S.A. (Brazil)		512,612
	16,000	Diamond Hill Investment Group, Inc.		1,168,000
	27,300	Eaton Vance Corp.		792,792
	68,700	SEI Investments Co.		1,397,358
	9,792	T. Rowe Price Group, Inc.		490,236
				5,017,582

Shares			Value
		Auto Parts & Equipment 0.5%
	560,000	Minth Group Ltd. (China)	$	1,120,101
	1,235,000	Norstar Founders Group Ltd.* *** (Hong Kong)		21,790
				1,141,891
		Automotive Retail 0.5%
	64,000	Halfords Group plc (United Kingdom)		444,996
	13,100	O’Reilly Automotive, Inc.*		696,920
				1,141,916
		Biotechnology 2.3%
	40,000	3SBio, Inc. ADR* (China)		519,200
	61,825	Abcam plc (United Kingdom)		1,676,584
	47,500	China Nuokang Bio-Pharmaceutical, Inc.
		ADR* (China)		237,500
	96,000	Myriad Genetics, Inc.*		1,575,360
	143,115	Orexigen Therapeutics, Inc.*		848,672
	1,095,471	Sino Biopharmaceutical Ltd. (China)		441,899
				5,299,215
		Commodity Chemicals 0.1%
	27,500	Tokai Carbon Korea Co. Ltd. (Korea)		324,381
		Communications Equipment 0.6%
	3,240	Calix, Inc.*		46,526
	621,480	O-Net Communications Group Ltd.*
		(China)		435,716
	19,650	Riverbed Technology, Inc.*		895,647
				1,377,889
		Computer Hardware 0.6%
	523,000	Advantech Co. Ltd. (Taiwan)		1,376,073
		Computer Storage & Peripherals 0.6%
	66,500	Intevac, Inc.*		665,665
	590	Wacom Co. Ltd. (Japan)		731,536
				1,397,201
		Construction & Engineering 1.1%
	23,500	Aecon Group, Inc. (Canada)		273,237
	340,000	Ausenco Ltd. (Australia)		931,707
	45,700	Heerim Architects & Planners (Korea)		318,628
	79,500	Lycopodium Ltd. (Australia)		299,934
	5,900	Outotec Oyj (Finland)		249,656
	195,000	Rotary Engineering Ltd. (Singapore)		137,814
	33,500	SWECO AB, Class B (Sweden)		279,068
				2,490,044
		Construction Materials 0.5%
	95,500	Corp Moctezuma S.A.B de C.V. (Mexico)		230,471
	52,000	Pretoria Portland Cement Co. Ltd. (South Africa)		238,097
	565,000	PT Semen Gresik (Persero) Tbk (Indonesia)		626,723
				1,095,291
		Consumer Finance 1.0%
	76,000	Banco Compartamos S.A. de C.V. (Mexico)		482,583
	33,616	Dollar Financial Corp.*		701,566
	38,000	First Cash Financial Services, Inc.*		1,054,500
				2,238,649

47

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

Shares			Value
		Data Processing & Outsourced Services 3.2%
	59,200	Cielo S.A. (Brazil)	$	514,767
	50,700	DIBS Payment Services AB (Sweden)		525,591
	15,000	Fidelity National Information Services, Inc.		406,950
	265	GMO Payment Gateway, Inc. (Japan)		550,476
	56,300	Redecard S.A. (Brazil)		872,417
	650	SBI VeriTrans Co. Ltd. (Japan)		341,839
	4,850	Syntel, Inc.		215,825
	299,600	Wirecard AG (Germany)		4,077,518
				7,505,383
		Department Stores 0.3%
	1,846,100	PCD Stores Ltd.* (China)		582,906
		Distributors 0.5%
	57,300	LKQ Corp.*		1,191,840
		Diversified Banks 1.1%
	138,039	Allahabad Bank Ltd. (India)		715,616
	22,100	Axis Bank Ltd. (India)		753,298
	15,000	Bank of Baroda (India)		292,272
	1,030	HDFC Bank Ltd. ADR (India)		189,901
	81,800	Union Bank of India Ltd. (India)		706,409
				2,657,496
		Diversified Metals & Mining 0.6%
	8,000	BHP Billiton plc ADR (United Kingdom)		511,360
	13,000	Hindustan Zinc Ltd. (India)		312,509
	11,100	Inmet Mining Corp. (Canada)		617,511
				1,441,380
		Diversified Support Services 1.6%
	50,400	Copart, Inc.*		1,661,688
	240	Prestige International, Inc. (Japan)		428,392
	35,800	Ritchie Bros. Auctioneers, Inc. (Canada)		743,566
	43,445	STR Holdings, Inc.*		935,805
				3,769,451
		Drug Retail 0.2%
	26,635	Create SD Holdings Co. Ltd. (Japan)		581,040
		Education Services 0.8%
	1,475	Capella Education Co.*		114,489
	3,250	MegaStudy Co. Ltd. (Korea)		480,553
	249,000	Navitas Ltd. (Australia)		1,021,105
	1,500	Strayer Education, Inc.		261,750
				1,877,897
		Electrical Components & Equipment 0.6%
	7,400	Emerson Electric Co.		389,684
	12,200	Harbin Electric, Inc.*		218,258
	13,000	Voltamp Transformers Ltd. (India)		270,502
	157,000	Zhuzhou CSR Times Electric Co. Ltd., Series H (China)		504,833
				1,383,277
		Electronic Components 0.3%
	14,284	Amphenol Corp., Class A		699,630
		Electronic Equipment & Instruments 0.5%
	23,675	CNB Technology, Inc. (Korea)		132,883
	600	KEYENCE Corp. (Japan)		130,530
	10,200	National Instruments Corp.		333,132
	78,675	Viscom AG* (Germany)		500,544
				1,097,089

Shares			Value
		Electronic Manufacturing Services 1.0%
	28,000	IPG Photonics Corp.*	$	675,920
	123,200	TTM Technologies, Inc.*		1,206,128
	77,700	Venture Corp. Ltd. (Singapore)		579,842
				2,461,890
		Environmental & Facilities Services 1.0%
	13,300	Daiseki Co. Ltd. (Japan)		250,466
	391,500	RPS Group plc (United Kingdom)		1,149,588
	44,900	Tetra Tech, Inc.*		941,553
				2,341,607
		Food Distributors 0.2%
	7,400	Shinsegae Food Co. Ltd. (Korea)		541,250
		Food Retail 0.8%
	1,137,600	BreadTalk Group Ltd. (Singapore)		497,090
	20,200	Daikokutenbussan Co. Ltd. (Japan)		674,422
	50,595	QKL Stores, Inc.* (China)		243,868
	32,700	Shoprite Holdings Ltd. (South Africa)		463,562
				1,878,942
		Footwear 0.3%
	217,000	Daphne International Holdings Ltd. (China)		256,452
	700,000	Peak Sport Products Co. Ltd. (China)		512,418
				768,870
		General Merchandise Stores 1.7%
	65,900	Dollar Tree, Inc.*		3,213,284
	39,500	Reject Shop Ltd. (The) (Australia)		674,610
				3,887,894
		Gold 0.5%
	55,000	Koza Altin Isletmeleri AS (Turkey)		622,842
	31,900	Petropavlovsk plc (United Kingdom)		556,010
				1,178,852
		Health Care Distributors 0.2%
	7,300	MWI Veterinary Supply, Inc.*		421,356
		Health Care Equipment 4.0%
	34,800	Abaxis, Inc.*		803,880
	83,000	AtriCure, Inc.*		659,020
	40,250	Audika S.A. (France)		1,068,177
	216,800	Cardica, Inc.*		470,456
	80,000	Cardica, Inc. PIPE* †		173,600
	66,100	Cyberonics, Inc.*		1,763,548
	20,000	DexCom, Inc.*		264,400
	28,400	DiaSorin S.p.A. (Italy)		1,165,752
	900	Edwards Lifesciences Corp.*		60,345
	300	IDEXX Laboratories, Inc.*		18,516
	6,596,900	LMA International N.V.* (Singapore)		1,453,835
	3,800	NuVasive, Inc.*		133,532
	12,500	St. Jude Medical, Inc.*		491,750
	14,100	Stratec Biomedical Systems AG (Germany)		580,116
	23,500	Synovis Life Technologies, Inc.*		351,325
				9,458,252
		Health Care Facilities 1.3%
	67,261	AmSurg Corp.*		1,175,722
	97,000	CVS Group plc* (United Kingdom)		137,083
	24,250	NovaMed, Inc.*		234,982
	479,000	Raffles Medical Group Ltd. (Singapore)		804,461
	16,000	U.S. Physical Therapy, Inc.*		267,520
	18,000	VCA Antech, Inc.*		379,620
				2,999,388

48

SEPTEMBER 30, 2010

Shares			Value
		Health Care Services 1.7%
	22,000	Bio-Reference Laboratories, Inc.*	$	458,920
	68,000	Clarient, Inc.*		229,840
	18,314	CorVel Corp.*		777,429
	24,500	Diagnosticos da America S.A. (Brazil)		295,041
	15,000	Fleury S.A. (Brazil)		185,951
	13,800	Genoptix, Inc.*		195,960
	34,142	Healthways, Inc.*		397,413
	27,100	IPC The Hospitalist Co., Inc.*		740,372
	12,700	LHC Group, Inc.*		294,513
	9,900	MEDNAX, Inc.*		527,670
				4,103,109
		Health Care Supplies 0.3%
	12,800	ICU Medical, Inc.*		477,312
	115,500	Shandong Weigao Group Medical Polymer
		Co. Ltd., Class H (China)		327,478
				804,790
		Health Care Technology 0.4%
	27,000	athenahealth, Inc.*		891,540
		Home Entertainment Software 0.2%
	176	GameOn Co. Ltd. (Japan)		125,451
	5,500	Perfect World Co. Ltd. ADR* (China)		141,130
	12,840	Shanda Games Ltd. ADR* (China)		68,822
	2,800	Shanda Interactive Entertainment Ltd. ADR* (China)		109,620
				445,023
		Home Improvement Retail 1.0%
	2,850,000	Ace Hardware Indonesia (Indonesia)		646,639
	22,000	Cashbuild Ltd. (South Africa)		245,845
	26,800	Clas Ohlson AB (Sweden)		494,135
	19,500	Lumber Liquidators Holdings, Inc.*		479,115
	73,100	Swedol AB, Class B (Sweden)		507,729
				2,373,463
		Homefurnishing Retail 0.3%
	37,300	Aaron’s, Inc.		688,185
		Hotels, Resorts & Cruise Lines 0.3%
	17,000	City Lodge Hotels Ltd. (South Africa)		192,163
	200,000	Webjet Ltd. (Australia)		465,082
				657,245
		Human Resource & Employment Services 1.5%
	380	Benefit One, Inc. (Japan)		291,800
	8,000	Brunel International N.V. (Netherlands)		249,582
	175,300	Michael Page International plc (United Kingdom)		1,268,421
	35,700	Robert Half International, Inc.		928,200
	173,900	Sthree plc (United Kingdom)		797,628
				3,535,631
		Industrial Gases 0.2%
	415,000	Yingde Gases Group Co.* (China)		392,039
		Industrial Machinery 3.2%
	108,500	AIA Engineering Ltd. (India)		965,840
	4,100	Burckhardt Compression Holding AG (Switzerland)		909,256
	1,021,000	China Automation Group Ltd. (China)		823,716
	47,700	China Valves Technology, Inc.* (China)		370,152
	10,000	Danaher Corp.		406,100
	13,800	Graco, Inc.		437,874
	57,500	Hy-Lok Corp. (Korea)		882,482
	12,900	IDEX Corp.		458,079
	7,500	Konecranes Oyj (Finland)		280,269
	2,800	Rational AG (Germany)		592,786
	28,400	Rotork plc (United Kingdom)		767,036
	11,500	Thermax Ltd. (India)		204,740
	41,100	Weg S.A. (Brazil)		448,849
				7,547,179

Shares			Value
		Insurance Brokers 0.5%
	29,900	Brown & Brown, Inc.	$	603,681
	38,700	eHealth, Inc.*		500,004
				1,103,685
		Internet Retail 1.6%
	92,550	ASOS plc* (United Kingdom)		1,649,458
	430	Start Today Co. Ltd. (Japan)		1,199,724
	105,000	Wotif.com Holdings Ltd. (Australia)		494,415
	40,000	Yoox S.p.A.* (Italy)		408,160
				3,751,757
		Internet Software & Services 1.8%
	15,000	Akamai Technologies, Inc.*		752,700
	17,100	Daum Communications Corp.* (Korea)		1,181,741
	135	Macromill, Inc. (Japan)		216,711
	4,800	NetEase.com, Inc. ADR* (China)		189,312
	33,600	Neurones (France)		320,425
	60,317	SPS Commerce, Inc.*		773,264
	20,415	VistaPrint N.V.*		789,040
				4,223,193
		Investment Banking & Brokerage 0.3%
	18,500	Charles Schwab Corp. (The)		257,150
	180	GCA Savvian Group Corp.* (Japan)		172,291
	20,400	optionsXpress Holdings, Inc.*		313,344
				742,785
		IT Consulting & Other Services 3.1%
	44,375	Alten Ltd. (France)		1,437,300
	9,600	Cognizant Technology Solutions Corp.,
		Class A*		618,912
	24,200	Connecta AB (Sweden)		268,793
	960,000	CSE Global Ltd. (Singapore)		780,607
	1,115,573	CSG Ltd. (Australia)		1,932,167
	320	Future Architect, Inc. (Japan)		113,126
	103,200	HiQ International AB* (Sweden)		521,166
	7,200	Infosys Technologies Ltd. ADR (India)		484,632
	5,100	International Business Machines Corp.		684,114
	76,500	SMS Management & Technology Ltd. (Australia)		489,392
				7,330,209
		Leisure Products 0.1%
	11,700	Pool Corp.		234,819
		Life Sciences Tools & Services 3.8%
	2,770	CMIC Co. Ltd. (Japan)		873,060
	27,000	Covance, Inc.*		1,263,330
	1,070	EPS Co. Ltd. (Japan)		2,730,279
	92,100	ICON plc ADR* (Ireland)		1,991,202
	60,200	LINICAL Co. Ltd. (Japan)		216,352
	34,200	Pharmaceutical Product Development, Inc.		847,818
	4,200	Techne Corp.		259,266
	11,000	Waters Corp.*		778,580
				8,959,887
		Managed Health Care 0.3%
	3,600	AMERIGROUP Corp.*		152,892
	53,200	OdontoPrev S.A. (Brazil)		624,645
				777,537
		Mortgage REITs 0.5%
	9,500	Annaly Capital Management, Inc.		167,200
	20,000	Anworth Mortgage Asset Corp.		142,600
	32,600	Capstead Mortgage Corp.		354,362
	28,800	MFA Financial, Inc.		219,744
	13,200	Redwood Trust, Inc.		190,872
				1,074,778

49

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

Shares			Value
		Multi-Line Insurance 0.3%
	23,600	HCC Insurance Holdings, Inc.	$	615,724
		Oil & Gas Drilling 0.2%
	18,000	Ensign Energy Services, Inc. (Canada)		220,643
	36,900	Phoenix Technology Income Fund** (Canada)		355,982
				576,625
		Oil & Gas Equipment & Services 1.4%
	951,000	Anhui Tianda Oil Pipe Co. Ltd., Class H (China)		443,677
	2,400	Core Laboratories N.V.		211,296
	37,800	Gulf Island Fabrication, Inc.		687,960
	47,800	Lamprell plc (United Arab Emirates)		267,507
	26,900	Pason Systems, Inc. (Canada)		319,296
	25,300	Petrofac Ltd. (United Kingdom)		545,456
	6,100	Schoeller-Bleckmann Oilfield Equipment AG (Austria)		398,189
	33,100	TGS-NOPEC Geophysical Co. ASA (Norway)		475,634
				3,349,015
		Oil & Gas Exploration & Production 1.5%
	471,000	Afren plc* (United Kingdom)		817,985
	54,000	Dragon Oil plc* (Ireland)		373,304
	41,600	Gran Tierra Energy, Inc.* (Canada)		321,152
	105,000	Pan Orient Energy Corp.* (Canada)		761,246
	436,000	Petroneft Resources plc* (United Kingdom)		311,506
	24,175	Premier Oil plc* (United Kingdom)		627,872
	52,000	Selan Exploration Technology Ltd. (India)		387,555
				3,600,620
		Other Diversified Financial Services 0.1%
	104,000	Count Financial Ltd. (Australia)		121,423
		Packaged Foods & Meats 0.5%
	5,500	Glaxo SmithKline Consumer Healthcare Ltd. (India)		247,981
	268,291	Hsu Fu Chi International Ltd. (China)		672,817
	18,500	Zhongpin, Inc.*		301,365
				1,222,163
		Personal Products 0.4%
	21,000	Atrium Innovations, Inc.* (Canada)		300,218
	11,105	Natura Cosmeticos S.A. (Brazil)		298,275
	5,000	Procter & Gamble Hygiene and Healthcare Ltd. (India)		247,191
				845,684
		Pharmaceuticals 1.8%
	143,000	China Shineway Pharmaceutical Group Ltd. (China)		504,968
	31,297	Daewoong Pharmaceutical Co. Ltd. (Korea)		1,343,555
	80,400	Dechra Pharmaceuticals plc (United Kingdom)		593,366
	60,100	Egyptian International Pharmaceutical Industries Co. (Egypt)		379,940
	45,200	Medy-Tox, Inc.* (Korea)		1,197,141
	52,200	Whanin Pharmaceutical Co. Ltd. (Korea)		314,505
				4,333,475
		Property & Casualty Insurance 0.2%
	252,725	Beazley plc (United Kingdom)		458,749

Shares			Value
		Regional Banks 0.8%
	31,800	Boston Private Financial Holdings, Inc.	$	207,972
	8,500	Canadian Western Bank (Canada)		204,921
	6,000	City National Corp.		318,420
	29,600	First of Long Island Corp. (The)		739,408
	180	Seven Bank Ltd. (Japan)		322,372
				1,793,093
		Research & Consulting Services 3.9%
	14,375	Bureau Veritas S.A. (France)		1,003,081
	5,427	Campbell Brothers Ltd. (Australia)		173,171
	68,100	CRA International, Inc.*		1,229,205
	8,000	Exponent, Inc.*		268,720
	56,600	Huron Consulting Group, Inc.*		1,244,634
	17,000	Intertek Group plc (United Kingdom)		488,505
	150	Nihon M&A Center, Inc. (Japan)		504,223
	183,035	Resources Connection, Inc.		2,518,562
	130	SGS S.A. (Switzerland)		210,203
	32,000	Stantec, Inc.* (Canada)		846,935
	20,030	Verisk Analytics, Inc., Class A*		561,040
				9,048,279
		Restaurants 1.0%
	152,000	Ajisen China Holdings Ltd. (China)		237,815
	740,000	KFC Holdings Malaysia Berhad (Malaysia)		747,911
	29,800	Tim Hortons, Inc. (Canada)		1,085,018
	185	Toridoll.corporation (Japan)		323,570
				2,394,314
		Semiconductor Equipment 1.0%
	21,600	Cabot Microelectronics Corp.*		695,088
	8,100	Disco Corp. (Japan)		465,768
	24,000	Eugene Technology Co. Ltd. (Korea)		282,044
	67,000	Hanmi Semiconductor Co. Ltd. (Korea)		463,021
	39,600	Koh Young Technology, Inc.* (Korea)		553,931
				2,459,852
		Semiconductors 8.5%
	44,300	Advanced Analogic Technologies, Inc.*		155,493
	23,000	Altera Corp.		693,680
	52,000	CSR plc* (United Kingdom)		293,134
	16,269	ELMOS Semiconductor AG* (Germany)		175,096
	24,750	Hittite Microwave Corp.*		1,179,338
	24,400	Linear Technology Corp.		749,812
	18,800	Maxim Integrated Products, Inc.		347,988
	297,600	Melexis N.V.* (Belgium)		4,508,440
	182,000	Micrel, Inc.		1,794,520
	38,500	Microchip Technology, Inc.		1,210,825
	379,599	O2Micro International Ltd. ADR* (China)		2,319,350
	131,100	PLX Technology, Inc.*		474,582
	80,100	Power Integrations, Inc.		2,546,379
	31,525	RichTek Technology Corp. (Taiwan)		234,105
	15,800	Silicon Laboratories, Inc.*		579,070
	403,960	Sporton International, Inc. (Taiwan)		824,949
	13,200	Standard Microsystems Corp.*		301,092
	35,900	Supertex, Inc.*		794,108
	52,500	Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)		532,350
	14,400	Volterra Semiconductor Corp.*		309,888
				20,024,199
		Specialized Consumer Services 0.1%
	165	Best Bridal, Inc. (Japan)		161,096
	230	NOVARESE, Inc. (Japan)		120,683
				281,779

50

SEPTEMBER 30, 2010

Shares			Value
		Specialized Finance 1.8%
	142,000	Bolsa Mexicana de Valores S.A.B. de C.V. (Mexico)	$	236,625
	3,025	CBOE Holdings, Inc.		60,621
	1,800	Crisil Ltd. (India)		240,828
	9,600	IMAREX ASA* (Norway)		73,420
	1,600	IntercontinentalExchange, Inc.*		167,552
	50,000	JSE Ltd. (South Africa)		526,862
	28,400	MSCI, Inc., Class A*		943,164
	16,500	NASDAQ OMX Group, Inc. (The)*		320,595
	5,400	NYSE Euronext		154,278
	45	Osaka Securities Exchange Co. Ltd. (Japan)		220,755
	23,043	Oslo Bors VPS Holding ASA (Norway)		254,556
	10,800	Portfolio Recovery Associates, Inc.*		698,220
	9,300	TMX Group, Inc. (Canada)		285,494
				4,182,970
		Specialty Chemicals 0.9%
	21,870	C. Uyemura & Co. Ltd. (Japan)		804,323
	1,299,000	EcoGreen Fine Chemical Group
		Ltd. (Hong Kong)		426,901
	80	Japan Pure Chemical Co. Ltd. (Japan)		233,843
	42,600	MEC Co. Ltd. (Japan)		210,767
	15,700	TechnoSemiChem Co. Ltd. (Korea)		362,122
				2,037,956
		Specialty Stores 1.3%
	102,800	Big 5 Sporting Goods Corp.		1,379,576
	75,188	easyhome Ltd. (Canada)		853,787
	34,618	Hibbett Sports, Inc.*		863,719
				3,097,082
		Steel 0.2%
	116,500	Ferrexpo plc (United Kingdom)		563,986
		Systems Software 1.4%
	84,700	OPNET Technologies, Inc.		1,537,305
	3,010	Simplex Technology, Inc. (Japan)		1,824,570
				3,361,875
		Textiles 0.2%
	295,000	S. Kumars Nationwide Ltd.* (India)		507,477
		Thrifts & Mortgage Finance 1.2%
	18,475	Home Capital Group, Inc. (Canada)		797,741
	23,000	Housing Development Finance Corp.
		Ltd. (India)		373,293
	39,900	LIC Housing Finance Ltd. (India)		1,277,759
	22,100	Washington Federal, Inc.		337,246
				2,786,039
		Trading Companies & Distributors 4.0%
	7,100	Fastenal Co.		377,649
	30,380	Houston Wire & Cable Co.		304,711
	74,979	Indutrade AB (Sweden)		2,070,906
	23,500	MISUMI Group, Inc. (Japan)		492,663
	32,500	MSC Industrial Direct Co., Inc., Class A		1,756,300
	88,905	Richelieu Hardware Ltd. (Canada)		2,416,014
	15,097	Rush Enterprises, Inc., Class B*		207,584
	8,480	Thermador Groupe (France)		1,224,473
	3,700	W.W. Grainger, Inc.		440,707
				9,291,007
		Trucking 0.5%
	36,500	Knight Transportation, Inc.		705,545
	10,800	Old Dominion Freight Line, Inc.*		274,536
	14,600	Universal Truckload Services, Inc.*		228,636
				1,208,717

Shares			Value
		Wireless Telecommunication Services 0.1%
	4,300	NII Holdings, Inc.*	$	176,730
		Total Common Stocks (cost $172,018,490)		223,271,530
		PREFERRED STOCKS 0.4%
		Regional Banks 0.4%
	127,000	Banco Daycoval S.A. Pfd. (Brazil)		835,171
		Total Preferred Stocks (cost $437,228)		835,171
		LIMITED PARTNERSHIP INTEREST 0.2%
		Oil & Gas Exploration & Production 0.2%
	45,000	Zhaikmunai L.P. GDR* (Kazakhstan)		360,000
		Total Limited Partnership Interest (cost $257,715)		360,000
		WARRANTS 0.0%
		Health Care Equipment 0.0%
	40,000	Cardica, Inc., expiring 9/29/14* *** †		28,800
		Restaurants 0.0%
	29,600	KFC Holdings Malaysia Berhad, expiring 9/14/15* (Malaysia)		11,794
		Total Warrants (cost $5,000)		40,594
Principal Amount			Value
		SHORT-TERM INVESTMENTS 4.5%
		Repurchase Agreement 4.5%
	$10,658,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $10,090,000 of United States Treasury Notes 3.125% due 5/15/19; value: $10,871,975; repurchase proceeds: $10,658,003 (cost $10,658,000)	$	10,658,000
		Total Short-Term Investments (cost $10,658,000)		10,658,000
		Total Investments (cost $183,376,433) 100.1%		235,165,295
		Liabilities less Other Assets (0.1)%		(261,488	)
		NET ASSETS 100.0%	$	234,903,807
		*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). ADR American Depositary Receipt. GDR Global Depositary Receipt. PIPE Private Investment in a Public Equity. REIT Real Estate Investment Trust. See Notes to Financial Statements.

51

WASATCH GLOBAL OPPORTUNITIES FUND (WAGOX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

At September 30, 2010, Wasatch Global Opportunities Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia		3.2
Austria		0.2
Belgium		2.0
Brazil		2.0
Canada		5.2
China		6.9
Denmark		0.3
Egypt		0.2
Finland		0.2
France		2.6
Germany		3.6
Hong Kong		0.2
India		3.8
Indonesia		0.6
Ireland		1.1
Italy		0.7
Japan		6.8
Kazakhstan		0.2
Korea		3.7
Malaysia		0.3
Mexico		0.4
Netherlands		0.1
Norway		0.4
Singapore		2.6
South Africa		0.7
Sweden		2.2
Switzerland		0.5
Taiwan		1.3
Turkey		0.3
United Arab Emirates		1.0
United Kingdom		7.5
United States		39.2
TOTAL		100.0	%

52

WASATCH GLOBAL SCIENCE & TECHNOLOGY FUND (WAGTX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 96.2%
		Advertising 2.1%
	28,640	1000mercis* (France)	$	1,349,622
		Application Software 4.4%
	8,795	FactSet Research Systems, Inc.		713,538
	44,800	Pegasystems, Inc.		1,391,040
	5,140	SimCorp A/S (Denmark)		818,401
				2,922,979
		Asset Management & Custody Banks 1.1%
	74,787	CETIP S.A. (Brazil)		736,833
		Biotechnology 3.1%
	44,620	Abcam plc (United Kingdom)		1,210,015
	50,700	Myriad Genetics, Inc.*		831,987
				2,042,002
		Communications Equipment 2.3%
	41,205	Cisco Systems, Inc.*		902,389
	51,025	Infinera Corp.*		595,462
				1,497,851
		Computer Hardware 2.1%
	4,800	Apple, Inc.*		1,362,000
		Computer Storage & Peripherals 1.0%
	550	Wacom Co. Ltd. (Japan)		681,941
		Data Processing & Outsourced Services 8.7%
	21,670	Alliance Data Systems Corp.*		1,414,184
	63,600	Cielo S.A. (Brazil)		553,027
	38,200	Redecard S.A. (Brazil)		591,942
	231,900	Wirecard AG (Germany)		3,156,130
				5,715,283
		Diversified Support Services 1.0%
	19,385	Copart, Inc.*		639,123
		Drug Retail 2.1%
	63,035	Create SD Holdings Co. Ltd. (Japan)		1,375,103
		Education Services 1.5%
	19,500	Apollo Group, Inc., Class A*		1,001,325
		Health Care Distributors 0.9%
	26,300	PSS World Medical, Inc.*		562,294
		Health Care Equipment 9.3%
	130,414	Cardica, Inc.*		282,998
	48,200	Cardica, Inc. PIPE* †		104,594
	47,200	Cyberonics, Inc.*		1,259,296
	52,015	DiaSorin S.p.A. (Italy)		2,135,091
	3,835,440	LMA International N.V.* (Singapore)		845,260
	28,500	Mindray Medical International Ltd. ADR (China)		842,745
	18,800	NuVasive, Inc.*		660,632
				6,130,616
		Health Care Facilities 5.2%
	1,234,300	CVS Group plc* (United Kingdom)		1,744,344
	401,500	Raffles Medical Group Ltd. (Singapore)		674,303
	48,600	VCA Antech, Inc.*		1,024,974
				3,443,621
		Health Care Services 4.8%
	29,450	Bio-Reference Laboratories, Inc.*		614,327
	15,487	CorVel Corp.*		657,423
	106,500	Diagnosticos da America S.A. (Brazil)		1,282,527
	12,600	Express Scripts, Inc.*		613,620
				3,167,897
		Health Care Technology 1.1%
	119,350	RaySearch Laboratories AB (Sweden)		738,823

Shares			Value
		Home Entertainment Software 2.5%
	87,265	Activision Blizzard, Inc.	$	944,208
	62,700	UbiSoft Entertainment S.A.* (France)		697,534
				1,641,742
		Home Improvement Retail 1.2%
	96,100	Byggmax Group AB* (Sweden)		818,339
		Industrial Machinery 1.9%
	23,700	Rotork plc (United Kingdom)		640,097
	57,500	Weg S.A. (Brazil)		627,952
				1,268,049
		Internet Retail 1.1%
	250	Start Today Co. Ltd. (Japan)		697,514
		Internet Software & Services 6.9%
	12,300	Akamai Technologies, Inc.*		617,214
	15,545	Daum Communications Corp.* (Korea)		1,074,278
	3,530	Google, Inc., Class A*		1,856,039
	9,300	VistaPrint N.V.*		359,445
	6,528	Xtera Communications, Inc.* *** †		65
	45,400	Yahoo, Inc.*		643,318
				4,550,359
		IT Consulting & Other Services 3.9%
	15,300	Cognizant Technology Solutions Corp., Class A*		986,391
	11,545	International Business Machines Corp.		1,548,646
				2,535,037
		Life Sciences Tools & Services 3.8%
	14,890	Covance, Inc.*		696,703
	247	EPS Co. Ltd. (Japan)		630,261
	13,000	Eurofins Scientific (France)		667,510
	23,330	ICON plc ADR* (Ireland)		504,395
				2,498,869
		Managed Health Care 1.5%
	81,980	OdontoPrev S.A. (Brazil)		962,563
		Pharmaceuticals 2.0%
	25,400	Teva Pharmaceutical Industries Ltd. ADR (Israel)		1,339,850
		Semiconductor Equipment 0.9%
	32,203	Tessera Technologies, Inc.*		595,756
		Semiconductors 16.0%
	54,500	Altera Corp.		1,643,720
	13,880	Hittite Microwave Corp.*		661,382
	67,000	Intel Corp.		1,288,410
	18,140	Linear Technology Corp.		557,442
	74,934	Melexis N.V.* (Belgium)		1,135,200
	22,525	Microchip Technology, Inc.		708,411
	98,129	O2Micro International Ltd. ADR* (China)		599,568
	26,793	Power Integrations, Inc.		851,750
	133,420	Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)		1,352,879
	64,000	Xilinx, Inc.		1,703,040
				10,501,802
		Specialized Finance 0.6%
	15,000	ICRA Ltd. (India)		413,230
		Systems Software 3.2%
	349,000	GuestLogix, Inc.* (Canada)		399,689
	31,835	OPNET Technologies, Inc.		577,805
	19,675	Oracle Corp.		528,274
	970	Simplex Technology, Inc. (Japan)		587,985
				2,093,753
		Total Common Stocks (cost $53,920,804)		63,284,176

53

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

Shares			Value
		PREFERRED STOCKS 1.2%
		Computer Storage & Peripherals 1.2%
	39,251	BlueArc Corp., Series DD Pfd.* *** †	$	120,108
	39,251	BlueArc Corp., Series DD-1 Pfd.* *** †		126,781
	69,363	BlueArc Corp., Series FF Pfd.* *** †		230,285
	69,362	BlueArc Corp., Series FF-1 Pfd.* *** †		233,750
	23,737	BlueArc Corp., Series GG Pfd.* *** †		60,028
				770,952
		Total Preferred Stocks (cost $1,013,092)		770,952
		LIMITED PARTNERSHIP INTEREST 0.6%
		Other 0.6%
		Greenspring Global Partners II-B, L.P.*** †		421,896
		Total Limited Partnership Interest (cost $434,387)		421,896
		WARRANTS 0.1%
		Computer Storage & Peripherals 0.0%
	310	BlueArc Corp., Series FF expiring 4/2/18* *** †		—
	309	BlueArc Corp., Series FF-1 expiring 4/2/18* *** †		—
	3,240	BlueArc Corp., Series GG expiring 7/14/15* *** †		8
				8
		Health Care Equipment 0.1%
	71,500	Cardica, Inc., expiring 9/29/14* *** †		51,480
		Total Warrants (cost $8,946)		51,488
Principal Amount			Value
		SHORT-TERM INVESTMENTS 1.8%
		Repurchase Agreement 1.8%
	$1,179,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $1,120,000 of United States Treasury Notes 3.125% due 5/15/19; value: $1,206,800; repurchase proceeds: $1,179,000†† (cost $1,179,000)	$	1,179,000
		Total Short-Term Investments (cost $1,179,000)		1,179,000
		Total Investments (cost $56,556,229) 99.9%		65,707,512
		Other Assets less Liabilities 0.1%		59,424
		NET ASSETS 100.0%	$	65,766,936
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). ††All or a portion of this security has been designated as collateral for purchase commitments (see Note 12). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. See Notes to Financial Statements.

At September 30, 2010, Wasatch Global Science & Technology Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Belgium		1.8
Brazil		7.4
Canada		0.6
China		2.2
Denmark		1.3
France		4.2
Germany		4.9
India		0.6
Ireland		0.8
Israel		2.1
Italy		3.3
Japan		6.1
Korea		1.7
Singapore		2.3
Sweden		2.4
Taiwan		2.1
United Kingdom		5.6
United States		50.6
TOTAL		100.0	%

54

WASATCH HERITAGE GROWTH FUND (WAHGX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 96.2%
		Aerospace & Defense 1.6%
	20,245	TransDigm Group, Inc.	$	1,256,202
		Air Freight & Logistics 3.8%
	20,760	C.H. Robinson Worldwide, Inc.		1,451,539
	33,665	Expeditors International of Washington, Inc.		1,556,333
				3,007,872
		Apparel Retail 3.7%
	53,175	Ross Stores, Inc.		2,904,418
		Asset Management & Custody Banks 3.3%
	62,505	SEI Investments Co.		1,271,352
	26,900	T. Rowe Price Group, Inc.		1,346,748
				2,618,100
		Automotive Retail 1.0%
	14,898	O’Reilly Automotive, Inc.*		792,574
		Communications Equipment 1.2%
	8,815	F5 Networks, Inc.*		915,085
		Data Processing & Outsourced Services 5.7%
	16,755	Alliance Data Systems Corp.*		1,093,431
	36,525	Paychex, Inc.		1,004,072
	153,330	Redecard S.A. (Brazil)		2,375,982
				4,473,485
		Diversified Metals & Mining 1.4%
	16,580	BHP Billiton plc ADR (United Kingdom)		1,059,794
		Diversified Support Services 3.6%
	86,665	Copart, Inc.*		2,857,345
		Education Services 3.0%
	45,525	Apollo Group, Inc., Class A*		2,337,709
		Electronic Components 3.7%
	59,235	Amphenol Corp., Class A		2,901,330
		Environmental & Facilities Services 1.6%
	17,765	Stericycle, Inc.*		1,234,312
		Health Care Equipment 3.4%
	67,690	St. Jude Medical, Inc.*		2,662,925
		Health Care Services 3.7%
	59,485	Express Scripts, Inc.*		2,896,919
		IT Consulting & Other Services 4.7%
	57,685	Cognizant Technology Solutions Corp., Class A*		3,718,952
		Life Sciences Tools & Services 1.9%
	31,750	Covance, Inc.*		1,485,582
		Mortgage REITs 1.0%
	45,419	Annaly Capital Management, Inc.		799,374
		Multi-Line Insurance 1.5%
	44,255	HCC Insurance Holdings, Inc.		1,154,613
		Oil & Gas Equipment & Services 3.1%
	27,140	Core Laboratories N.V.		2,389,406
		Oil & Gas Exploration & Production 3.4%
	45,765	Petrohawk Energy Corp.*		738,647
	45,395	Ultra Petroleum Corp.*		1,905,682
				2,644,329

Shares			Value
		Personal Products 2.5%
	32,235	Herbalife Ltd.	$	1,945,382
		Pharmaceuticals 1.1%
	16,745	Teva Pharmaceutical Industries Ltd. ADR (Israel)		883,299
		Research & Consulting Services 4.0%
	46,575	IHS, Inc., Class A*		3,167,100
		Restaurants 3.8%
	81,565	Tim Hortons, Inc. (Canada)		2,969,782
		Semiconductors 12.7%
	155,550	Altera Corp.		4,691,388
	94,385	Linear Technology Corp.		2,900,451
	38,600	Microchip Technology, Inc.		1,213,970
	30,730	Silicon Laboratories, Inc.*		1,126,255
				9,932,064
		Specialized Finance 4.9%
	168,300	BM&F BOVESPA S.A. (Brazil)		1,405,812
	11,163	IntercontinentalExchange, Inc.*		1,168,989
	37,750	MSCI, Inc., Class A*		1,253,678
				3,828,479
		Thrifts & Mortgage Finance 4.3%
	57,800	Housing Development Finance Corp. Ltd. (India)		938,100
	148,395	New York Community Bancorp, Inc.		2,411,419
				3,349,519
		Trading Companies & Distributors 3.5%
	23,170	Fastenal Co.		1,232,412
	28,180	MSC Industrial Direct Co., Inc., Class A		1,522,847
				2,755,259
		Trucking 1.2%
	26,605	J.B. Hunt Transport Services, Inc.		923,194
		Wireless Telecommunication Services 1.9%
	35,965	NII Holdings, Inc.*		1,478,162
		Total Common Stocks (cost $60,463,711)		75,342,566

55

WASATCH HERITAGE GROWTH FUND (WAHGX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

Principal Amount			Value
		SHORT-TERM INVESTMENTS 3.6%
		Repurchase Agreement 3.6%
	$2,810,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $2,870,000 of United States Treasury Bills 0.19% due 3/31/11; value: $2,867,130; repurchase proceeds: $2,810,001 (cost $2,810,000)	$	2,810,000
		Total Short-Term Investments (cost $2,810,000)		2,810,000
		Total Investments (cost $63,273,711) 99.8%		78,152,566
		Other Assets less Liabilities 0.2%		121,069
		NET ASSETS 100.0%	$	78,273,635
		*Non-income producing. ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2010, Wasatch Heritage Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Brazil		5.0
Canada		3.9
India		1.3
Israel		1.2
United Kingdom		1.4
United States		87.2
TOTAL		100.0	%

56

WASATCH INTERNATIONAL GROWTH FUND (WAIGX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 93.9%
		Aerospace & Defense 2.4%
	41,850	Chemring Group plc (United Kingdom)	$	1,975,393
	129,431	Kongsberg Gruppen ASA (Norway)		2,584,682
	81,700	Ultra Electronics Holdings plc (United Kingdom)		2,186,053
				6,746,128
		Agricultural Products 0.8%
	963,000	PT Astra Agro Lestari Tbk (Indonesia)		2,233,513
		Air Freight & Logistics 0.5%
	2,241,800	Aramex PJSC* (United Arab Emirates)		1,342,870
		Apparel Retail 0.9%
	262,200	Truworths International Ltd. (South Africa)		2,629,513
		Apparel, Accessories & Luxury Goods 6.7%
	2,181,699	Anta Sports Products Ltd. (China)		5,083,592
	134,540	Cia. Hering (Brazil)		5,781,884
	999,655	Li Ning Co. Ltd. (China)		3,034,021
	1,359,735	Ports Design Ltd. (China)		3,758,885
	75,525	WeSC AB* (Sweden)		1,409,299
				19,067,681
		Application Software 1.1%
	20,152	SimCorp A/S (Denmark)		3,208,641
		Asset Management & Custody Banks 1.8%
	346,770	CETIP S.A. (Brazil)		3,416,524
	10,430	Partners Group Holding AG (Switzerland)		1,728,952
				5,145,476
		Automotive Retail 0.6%
	226,020	ARB Corp. Ltd. (Australia)		1,646,554
		Biotechnology 2.4%
	249,938	Abcam plc (United Kingdom)		6,777,876
		Brewers 0.7%
	124,400	Anadolu Efes Biracilik ve Malt Sanayii A.S. (Turkey)		1,941,334
		Casinos & Gaming 2.2%
	5,567,450	SJM Holdings Ltd. (Hong Kong)		6,350,049
		Coal & Consumable Fuels 2.6%
	911,045	PT Indo Tambangraya Megah (Indonesia)		4,246,439
	1,472,885	PT Tambang Batubara Bukit Asam Tbk (Indonesia)		3,209,817
				7,456,256
		Communications Equipment 0.5%
	144,800	O-Net Communications Group Ltd.* (China)		101,518
	177,885	Ubiquoss, Inc. (Korea)		1,240,242
				1,341,760
		Construction & Farm Machinery & Heavy Trucks 0.7%
	25,904	Demag Cranes AG* (Germany)		992,893
	97,000	Takeuchi Manufacturing Co. Ltd.* (Japan)		940,078
				1,932,971
		Construction Materials 3.5%
	719,900	Corp Moctezuma S.A.B de C.V. (Mexico)		1,737,341
	1,687,000	PT Indocement Tunggal Prakarsa Tbk (Indonesia)		3,477,961
	4,232,935	PT Semen Gresik (Persero) Tbk (Indonesia)		4,695,356
				9,910,658

Shares			Value
		Consumer Finance 2.3%
	243,300	Banco Compartamos S.A. de C.V. (Mexico)	$	1,544,899
	358,900	Mahindra & Mahindra Financial Services
		Ltd. (India)		5,151,675
				6,696,574
		Data Processing & Outsourced Services 1.9%
	407,798	Wirecard AG (Germany)		5,550,079
		Department Stores 1.5%
	81,500	Lojas Renner S.A. (Brazil)		2,789,956
	99,700	Marisa Lojas S.A. (Brazil)		1,423,697
				4,213,653
		Distributors 1.8%
	4,110,887	Dah Chong Hong Holdings Ltd. (Hong Kong)		5,059,602
		Diversified Banks 4.1%
	587,220	Allahabad Bank Ltd. (India)		3,044,239
	1,042,917	Bank of N.T. Butterfield & Son Ltd. (The) (Bermuda)		1,480,942
	12,366,000	Bank Pembangunan Daerah Jawa* (Indonesia)		2,161,452
	461,000	Commercial International Bank S.A.E (Egypt)		3,441,507
	1,261,285	PT Bank Tabungan Pensiunan Nasional Tbk* (Indonesia)		1,724,110
				11,852,250
		Diversified Metals & Mining 0.6%
	28,420	Inmet Mining Corp. (Canada)		1,581,050
		Electrical Components & Equipment 1.2%
	347,138	Crompton Greaves Ltd. (India)		2,403,352
	1,390,925	Wasion Group Holdings Ltd. (China)		1,066,592
				3,469,944
		Electronic Components 0.4%
	76,375	Partron Co. Ltd. (Korea)		1,142,025
		Electronic Equipment & Instruments 0.9%
	1,091,000	Chroma ATE, Inc. (Taiwan)		2,601,652
		Environmental & Facilities Services 0.4%
	55,045	Daiseki Co. Ltd. (Japan)		1,036,607
		Fertilizers & Agricultural Chemicals 0.5%
	2,394	Silvinit*** (Russia)		1,560,980
		Food Retail 4.0%
	85,690	BIM Birlesik Magazalar AS (Turkey)		2,470,348
	1,682,000	CP ALL Public Co. Ltd. (Thailand)		2,341,499
	31,530	Magnit*** (Russia)		3,687,995
	210,450	Shoprite Holdings Ltd. (South Africa)		2,983,385
				11,483,227
		Gold 2.7%
	641,910	Centamin Egypt Ltd.* (United Kingdom)		1,784,089
	119,500	Kingsgate Consolidated Ltd. (Australia)		1,337,544
	227,905	Koza Altin Isletmeleri AS (Turkey)		2,580,888
	115,315	Petropavlovsk plc (United Kingdom)		2,009,915
				7,712,436
		Health Care Equipment 2.8%
	146,143	DiaSorin S.p.A. (Italy)		5,998,818
	49,761	Stratec Biomedical Systems AG (Germany)		2,047,315
				8,046,133

57

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

Shares			Value
		Health Care Services 0.2%
	35,300	Fleury S.A. (Brazil)	$	437,603
		Health Care Supplies 0.3%
	258,815	Shandong Weigao Group Medical Polymer Co. Ltd., Class H (China)		733,820
		Health Care Technology 1.0%
	458,244	RaySearch Laboratories AB (Sweden)		2,836,710
		Industrial Gases 0.6%
	1,810,340	Yingde Gases Group Co.* (China)		1,710,179
		Industrial Machinery 6.8%
	212,890	AIA Engineering Ltd. (India)		1,895,093
	31,490	Andritz AG (Austria)		2,209,799
	9,963	Burckhardt Compression Holding AG (Switzerland)		2,209,491
	35,325	Konecranes Oyj (Finland)		1,320,069
	248,414	Rotork plc (United Kingdom)		6,709,242
	122,845	Thermax Ltd. (India)		2,187,070
	272,700	Weg S.A. (Brazil)		2,978,129
				19,508,893
		Internet Retail 4.2%
	257,440	ASOS plc* (United Kingdom)		4,588,184
	1,158	Start Today Co. Ltd. (Japan)		3,230,886
	406,944	Yoox S.p.A.* (Italy)		4,152,456
				11,971,526
		Internet Software & Services 0.9%
	13,110	Daum Communications Corp.* (Korea)		906,001
	193,000	Net Entertainment NE AB* (Sweden)		1,800,693
				2,706,694
		IT Consulting & Other Services 0.2%
	283,000	CSG Ltd. (Australia)		490,155
		Life Sciences Tools & Services 0.7%
	810	EPS Co. Ltd. (Japan)		2,066,846
		Oil & Gas Equipment & Services 2.6%
	105,195	Pason Systems, Inc. (Canada)		1,248,639
	103,655	Petrofac Ltd. (United Kingdom)		2,234,754
	27,505	Schoeller-Bleckmann Oilfield Equipment AG (Austria)		1,795,443
	150,340	TGS-NOPEC Geophysical Co. ASA (Norway)		2,160,325
				7,439,161
		Oil & Gas Exploration & Production 4.5%
	1,579,875	Afren plc* (United Kingdom)		2,743,765
	214,045	Dragon Oil plc* (Ireland)		1,479,699
	171,555	Gran Tierra Energy, Inc.* (Canada)		1,324,405
	246,960	Pan Orient Energy Corp.* (Canada)		1,790,451
	2,426,050	Petroneft Resources plc*
		(United Kingdom)		1,733,325
	107,274	Premier Oil plc* (United Kingdom)		2,786,114
	272,815	Salamander Energy plc* (United Kingdom)		1,095,388
				12,953,147
		Packaged Foods & Meats 0.8%
	27,477	Glaxo SmithKline Consumer Healthcare Ltd. (India)		1,238,865
	460,114	Hsu Fu Chi International Ltd. (China)		1,153,869
				2,392,734
		Personal Products 1.9%
	129,670	Natura Cosmeticos S.A. (Brazil)		3,482,872
	31,655	Oriflame Cosmetics S.A. (Sweden)		2,030,357
				5,513,229

Shares			Value
		Pharmaceuticals 0.7%
	6,529,390	PT Kalbe Farma Tbk (Indonesia)	$	1,865,540
		Precious Metals & Minerals 0.5%
	206,030	Northam Platinum Ltd. (South Africa)		1,357,496
		Research & Consulting Services 2.0%
	92,150	AF AB, Class B (Sweden)		1,699,052
	125,379	Campbell Brothers Ltd. (Australia)		4,000,748
				5,699,800
		Semiconductor Equipment 0.5%
	43,450	Aixtron AG (Germany)		1,290,431
		Semiconductors 0.6%
	122,224	Melexis N.V.* (Belgium)		1,851,611
		Specialized Finance 4.2%
	196,640	BM&F BOVESPA S.A. (Brazil)		1,642,536
	128,845	JSE Ltd. (South Africa)		1,357,672
	945	Osaka Securities Exchange Co. Ltd. (Japan)		4,635,849
	302,035	Rural Electrification Corp. Ltd. (India)		2,300,467
	296,000	Singapore Exchange Ltd. (Singapore)		2,028,969
				11,965,493
		Specialty Chemicals 0.9%
	45,635	Asian Paints Ltd. (India)		2,709,613
		Specialty Stores 0.3%
	270,100	L’Occitane International S.A.* (Luxembourg)		755,373
		Steel 0.5%
	269,250	Ferrexpo plc (United Kingdom)		1,303,461
		Systems Software 1.2%
	5,597	Simplex Technology, Inc. (Japan)		3,392,731
		Thrifts & Mortgage Finance 5.3%
	608,370	Dewan Housing Finance Corp. Ltd. (India)		3,866,707
	292,809	Gruh Finance Ltd. (India)		2,696,436
	44,355	Home Capital Group, Inc. (Canada)		1,915,227
	211,890	LIC Housing Finance Ltd. (India)		6,785,573
				15,263,943
		Total Common Stocks (cost $190,104,876)		267,953,681
		PREFERRED STOCKS 1.2%
		Diversified Banks 0.7%
	182,700	Banco do Estado do Rio Grande do Sul S.A., Series B Pfd (Brazil)		1,837,785
	74,058	Bank of N.T. Butterfield & Son Ltd. (The) Pfd.* (Bermuda)		105,163
				1,942,948
		Regional Banks 0.5%
	251,125	Banco Daycoval S.A. Pfd. (Brazil)		1,651,436
		Total Preferred Stocks (cost $3,466,532)		3,594,384
		LIMITED PARTNERSHIP INTEREST 0.4%
		Oil & Gas Exploration & Production 0.4%
	147,785	Zhaikmunai L.P. GDR* (Kazakhstan)		1,182,280
		Total Limited Partnership Interest (cost $1,113,400)		1,182,280

58

SEPTEMBER 30, 2010

Principal Amount			Value
		SHORT-TERM INVESTMENTS 4.5%
		Repurchase Agreement 4.5%
	$12,766,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $12,240,000 of United States Treasury Notes 4.625% due 2/29/12; value: $13,024,584; repurchase proceeds: $12,766,004 (cost $12,766,000)	$	12,766,000
		Total Short-Term Investments (cost $12,766,000)		12,766,000
		Total Investments (cost $207,450,808) 100.0%		285,496,345
		Liabilities less Other Assets (<0.1)%		(50,377	)
		NET ASSETS 100.0%	$	285,445,968
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). GDR Global Depositary Receipt. See Notes to Financial Statements.

At September 30, 2010, Wasatch International Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia		2.7
Austria		1.5
Belgium		0.7
Bermuda		0.6
Brazil		9.3
Canada		2.9
China		6.1
Denmark		1.2
Egypt		1.3
Finland		0.5
Germany		3.6
Hong Kong		4.2
India		12.6
Indonesia		8.7
Ireland		0.5
Italy		3.7
Japan		5.6
Kazakhstan		0.4
Korea		1.2
Luxembourg		0.3
Mexico		1.2
Norway		1.7
Russia		1.9
Singapore		0.7
South Africa		3.0
Sweden		3.6
Switzerland		1.4
Taiwan		1.0
Thailand		0.9
Turkey		2.6
United Arab Emirates		0.5
United Kingdom		13.9
TOTAL		100.0	%

59

WASATCH INTERNATIONAL OPPORTUNITIES FUND (WAIOX) — Schedule of Investments

Shares			Value
		COMMON STOCKS 94.6%
		Advertising 0.7%
	18,580	1000mercis* (France)	$	875,558
	15,390	Tri-Stage, Inc.* (Japan)		225,296
				1,100,854
		Aerospace & Defense 0.5%
	16,165	Chemring Group plc (United Kingdom)		763,016
		Air Freight & Logistics 5.9%
	11,390,631	Aramex PJSC* (United Arab Emirates)		6,823,152
	1,039,183	Goodpack Ltd. (Singapore)		1,508,351
	45,000	Transat A.T., Inc.* (Canada)		685,689
				9,017,192
		Aluminum 0.7%
	1,505,419	Midas Holdings Ltd. (Singapore)		1,138,302
		Apparel, Accessories & Luxury Goods 6.6%
	688,836	Anta Sports Products Ltd. (China)		1,605,061
	844,641	China Lilang Ltd. (China)		1,415,119
	20,000	Cia. Hering (Brazil)		859,504
	18,454	Gerry Weber International AG (Germany)		755,607
	35,472	LG Fashion Corp. (Korea)		1,057,705
	12,704	Odd Molly International AB (Sweden)		203,192
	634,715	Ports Design Ltd. (China)		1,754,622
	169,901	Ted Baker plc (United Kingdom)		1,500,678
	1,033,234	Xtep International Holdings Ltd. (China)		866,876
				10,018,364
		Application Software 1.1%
	105,425	ICSA India Ltd. (India)		293,154
	19,340	ORC Software AB (Sweden)		380,934
	6,735	SimCorp A/S (Denmark)		1,072,360
				1,746,448
		Asset Management & Custody Banks 0.7%
	57,042	CETIP S.A. (Brazil)		562,002
	34,490	Tata Investment Corp. Ltd. (India)		442,878
				1,004,880
		Auto Parts & Equipment 1.2%
	614,745	Minth Group Ltd. (China)		1,229,601
	2,500,000	Norstar Founders Group Ltd.* *** (Hong Kong)		44,108
	24,165	WABCO-TVS India Ltd. (India)		575,421
				1,849,130
		Automobile Manufacturers 0.8%
	163,949	Ghabbour Auto (Egypt)		1,267,127
		Biotechnology 2.1%
	29,961	3SBio, Inc. ADR* (China)		388,894
	68,724	Abcam plc (United Kingdom)		1,863,673
	78,345	China Nuokang Bio-Pharmaceutical, Inc. ADR* (China)		391,725
	1,339,247	Sino Biopharmaceutical Ltd. (China)		540,235
				3,184,527
		Building Products 0.3%
	47,480	Blue Star Ltd. (India)		511,518
		Commodity Chemicals 0.4%
	48,810	Tokai Carbon Korea Co. Ltd. (Korea)		575,746

Shares			Value
		Communications Equipment 1.2%
	43,460	Dasan Networks, Inc.* (Korea)	$	360,182
	1,564,398	O-Net Communications Group Ltd.* (China)		1,096,790
	58,490	Ubiquoss, Inc. (Korea)		407,801
				1,864,773
		Computer Hardware 0.3%
	147,915	Advantech Co. Ltd. (Taiwan)		389,181
		Computer Storage & Peripherals 0.6%
	740	Wacom Co. Ltd. (Japan)		917,520
		Construction & Engineering 3.7%
	57,100	Aecon Group, Inc. (Canada)		663,908
	357,054	Ausenco Ltd. (Australia)		978,441
	4,754,779	Drake & Scull International (United Arab Emirates)		1,197,531
	146,447	Heerim Architects & Planners (Korea)		1,021,051
	84,383	Lycopodium Ltd. (Australia)		318,357
	21,445	Outotec Oyj (Finland)		907,436
	848,000	Rotary Engineering Ltd. (Singapore)		599,316
				5,686,040
		Construction & Farm Machinery & Heavy Trucks 0.8%
	650,000	International Mining Machinery Holdings Ltd.* (China)		609,011
	43,960	VST Tillers Tractors Ltd. (India)		534,153
				1,143,164
		Consumer Finance 0.9%
	225,235	Banco Compartamos S.A. de C.V. (Mexico)		1,430,191
		Data Processing & Outsourced Services 4.1%
	380	GMO Payment Gateway, Inc. (Japan)		789,362
	1,032	SBI VeriTrans Co. Ltd. (Japan)		542,735
	365,042	Wirecard AG (Germany)		4,968,175
				6,300,272
		Diversified Banks 0.8%
	220,294	Allahabad Bank Ltd. (India)		1,142,038
		Diversified Support Services 0.2%
	213	Prestige International, Inc. (Japan)		380,198
		Drug Retail 0.4%
	27,625	Create SD Holdings Co. Ltd. (Japan)		602,637
		Education Services 0.4%
	154,240	China Education Alliance, Inc.* (China)		637,011
	1,040,150	Oriental Century Ltd.* *** (China)		7,905
				644,916
		Electrical Components & Equipment 2.8%
	56,121	Harbin Electric, Inc.* ‡		1,004,005
	38,000	Voltamp Transformers Ltd. (India)		790,698
	970,532	Wasion Group Holdings Ltd. (China)		744,225
	520,155	Zhuzhou CSR Times Electric Co. Ltd., Series H (China)		1,672,556
				4,211,484
		Electronic Equipment & Instruments 0.6%
	35,708	CNB Technology, Inc. (Korea)		200,422
	25,174	Smartrac N.V.* (Netherlands)		681,800
				882,222

60

SEPTEMBER 30, 2010

Shares			Value
		Environmental & Facilities Services 0.9%
	30,100	Daiseki Co. Ltd. (Japan)	$	566,843
	253,000	RPS Group plc (United Kingdom)		742,901
				1,309,744
		Food Distributors 0.5%
	10,482	Shinsegae Food Co. Ltd. (Korea)		766,673
		Food Retail 1.4%
	1,795,676	BreadTalk Group Ltd. (Singapore)		784,645
	33,095	Daikokutenbussan Co. Ltd. (Japan)		1,104,951
	49,337	QKL Stores, Inc.* (China)		237,804
				2,127,400
		Footwear 1.0%
	1,286,616	Daphne International Holdings Ltd. (China)		1,520,533
		Health Care Equipment 2.5%
	12,674	Audika S.A. (France)		336,350
	43,264	DiaSorin S.p.A. (Italy)		1,775,883
	1,546,660	LMA International N.V.* (Singapore)		340,855
	21,624	Mindray Medical International Ltd. ADR (China)		639,422
	16,450	Stratec Biomedical Systems AG (Germany)		676,801
				3,769,311
		Health Care Facilities 1.6%
	74,207	CVS Group plc* (United Kingdom)		104,871
	1,373,670	Raffles Medical Group Ltd. (Singapore)		2,307,022
				2,411,893
		Health Care Services 0.5%
	59,300	Fleury S.A. (Brazil)		735,124
		Health Care Technology 0.6%
	147,805	RaySearch Laboratories AB (Sweden)		914,971
		Home Improvement Retail 0.4%
	56,895	Cashbuild Ltd. (South Africa)		635,789
		Hotels, Resorts & Cruise Lines 0.2%
	28,310	City Lodge Hotels Ltd. (South Africa)		320,008
		Human Resource & Employment Services 0.6%
	443	Benefit One, Inc. (Japan)		340,178
	110,000	Sthree plc (United Kingdom)		504,537
				844,715
		Industrial Machinery 5.2%
	48,385	AIA Engineering Ltd. (India)		430,711
	6,250	Burckhardt Compression Holding AG (Switzerland)		1,386,061
	3,446,877	China Automation Group Ltd. (China)		2,780,850
	147,701	China Valves Technology, Inc.* ‡ (China)		1,146,160
	55,026	Hy-Lok Corp. (Korea)		844,512
	51,363	SKF India Ltd. (India)		673,257
	108,600	SmartHeat, Inc.* (China)		677,664
				7,939,215
		Internet Retail 2.1%
	66,082	ASOS plc* (United Kingdom)		1,177,736
	586	Start Today Co. Ltd. (Japan)		1,634,973
	35,000	Yoox S.p.A.* (Italy)		357,140
				3,169,849
		Internet Software & Services 2.1%
	45,426	Daum Communications Corp.* (Korea)		3,139,284
	290,500	Vendtek Systems, Inc.* (Canada)		129,694
				3,268,978

Shares			Value
		IT Consulting & Other Services 2.3%
	26,124	Alten Ltd. (France)	$	846,153
	1,109,408	CSE Global Ltd. (Singapore)		902,095
	1,054,770	CSG Ltd. (Australia)		1,826,856
				3,575,104
		Life Sciences Tools & Services 3.3%
	2,734	CMIC Co. Ltd. (Japan)		861,714
	1,057	EPS Co. Ltd. (Japan)		2,697,107
	21,965	ICON plc ADR* (Ireland)		474,883
	63,720	LINICAL Co. Ltd. (Japan)		229,003
	30,720	MorphoSys AG* (Germany)		697,662
				4,960,369
		Managed Health Care 0.5%
	65,876	OdontoPrev S.A. (Brazil)		773,479
		Oil & Gas Drilling 0.4%
	60,577	Phoenix Technology Income Fund** (Canada)		584,399
		Oil & Gas Equipment & Services 1.7%
	1,432,000	Anhui Tianda Oil Pipe Co. Ltd., Class H (China)		668,081
	116,425	Lamprell plc (United Arab Emirates)		651,558
	131,141	Maridive & Oil Services S.A.E. (Egypt)		373,752
	78,710	Pason Systems, Inc. (Canada)		934,268
				2,627,659
		Oil & Gas Exploration & Production 4.7%
	777,449	Afren plc* (United Kingdom)		1,350,193
	100,565	Dragon Oil plc* (Ireland)		695,209
	103,358	Gran Tierra Energy, Inc.* (Canada)		797,924
	42,000	Ithaca Energy, Inc.* (Canada)		75,411
	159,767	Pan Orient Energy Corp.* (Canada)		1,158,305
	1,330,000	Petroneft Resources plc* (United Kingdom)		950,237
	42,059	Premier Oil plc* (United Kingdom)		1,092,354
	69,105	Selan Exploration Technology Ltd. (India)		515,039
	86,601	Westfire Energy Ltd.* (Canada)		473,202
				7,107,874
		Packaged Foods & Meats 0.9%
	2,197,960	Agthia Group PJSC (United Arab Emirates)		1,352,517
		Personal Products 0.9%
	50,252	Atrium Innovations, Inc.* (Canada)		718,408
	14,191	Procter & Gamble Hygiene and Healthcare Ltd. (India)		701,576
				1,419,984
		Pharmaceuticals 3.0%
	249,610	China Shineway Pharmaceutical Group
		Ltd. (China)		881,434
	26,262	Daewoong Pharmaceutical Co. Ltd. (Korea)		1,127,406
	54,619	Dechra Pharmaceuticals
		plc (United Kingdom)		403,098
	699,600	Genomma Lab Internacional S.A. de C.V.,
		Class B* (Mexico)		1,339,610
	29,383	Medy-Tox, Inc.* (Korea)		778,221
				4,529,769
		Property & Casualty Insurance 0.6%
	491,253	Beazley plc (United Kingdom)		891,727
		Regional Banks 0.8%
	47,932	Canadian Western Bank (Canada)		1,155,560
		Research & Consulting Services 0.8%
	368	Nihon M&A Center, Inc. (Japan)		1,237,027

61

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

Shares			Value
		Restaurants 1.3%
	581,950	FU JI Food & Catering Services Holdings Ltd.* *** (China)	$	750
	1,115,444	KFC Holdings Malaysia Berhad (Malaysia)		1,127,368
	12,200	Saint Marc Holdings Co. Ltd. (Japan)		456,723
	213	Toridoll.corporation (Japan)		372,543
				1,957,384
		Semiconductor Equipment 0.9%
	53,230	Koh Young Technology, Inc.* (Korea)		744,590
	76,665	Suss Microtec AG* (Germany)		616,222
				1,360,812
		Semiconductors 3.9%
	78,200	CSR plc* (United Kingdom)		440,829
	69,411	Hana Micron, Inc.* (Korea)		424,897
	71,834	Kontron AG (Germany)		623,192
	118,607	Melexis N.V.* (Belgium)		1,796,816
	28,788	Melfas, Inc.* (Korea)		684,196
	142,837	O2Micro International Ltd. ADR* ‡ (China)		872,734
	509,858	Sporton International, Inc. (Taiwan)		1,041,210
				5,883,874
		Specialized Consumer Services 0.1%
	185	NOVARESE, Inc. (Japan)		97,071
		Specialized Finance 2.1%
	46,880	IMAREX ASA* (Norway)		358,535
	87,519	JSE Ltd. (South Africa)		922,210
	317	Osaka Securities Exchange Co. Ltd. (Japan)		1,555,094
	32,625	Oslo Bors VPS Holding ASA (Norway)		360,408
				3,196,247
		Specialty Chemicals 1.4%
	16,358	C. Uyemura & Co. Ltd. (Japan)		601,606
	1,704,460	EcoGreen Fine Chemical Group Ltd. (Hong Kong)		560,150
	43,070	TechnoSemiChem Co. Ltd. (Korea)		993,415
				2,155,171
		Specialty Stores 0.8%
	102,623	easyhome Ltd. (Canada)		1,165,322
		Steel 0.9%
	85,490	Ferrexpo plc (United Kingdom)		413,864
	297,572	Ratnamani Metals & Tubes Ltd. (India)		888,710
				1,302,574
		Systems Software 1.8%
	482,839	GuestLogix, Inc.* (Canada)		552,967
	3,685	Simplex Technology, Inc. (Japan)		2,233,735
				2,786,702
		Textiles 0.7%
	625,952	S. Kumars Nationwide Ltd.* (India)		1,076,802
		Thrifts & Mortgage Finance 2.1%
	195,961	Dewan Housing Finance Corp. Ltd. (India)		1,245,498
	46,669	Home Capital Group, Inc. (Canada)		2,015,144
				3,260,642
		Tires & Rubber 0.0%
	10,700	Goodyear India Ltd. (India)		64,293

Shares			Value
		Trading Companies & Distributors 1.3%
	35,328	Indutrade AB (Sweden)	$	975,753
	19,730	Richelieu Hardware Ltd. (Canada)		536,167
	2,997	Thermador Groupe (France)		432,753
				1,944,673
		Total Common Stocks (cost $104,605,684)		143,972,978
		PREFERRED STOCKS 0.9%
		Regional Banks 0.9%
	201,410	Banco Daycoval S.A. Pfd. (Brazil)		1,324,503
		Total Preferred Stocks (cost $660,188)		1,324,503
		LIMITED PARTNERSHIP INTEREST 0.6%
		Oil & Gas Exploration & Production 0.6%
	103,319	Zhaikmunai L.P. GDR* (Kazakhstan)		826,552
		Total Limited Partnership Interest (cost $569,882)		826,552
		WARRANTS 0.0%
		Restaurants 0.0%
	44,618	KFC Holdings Malaysia Berhad, expiring 9/14/15* (Malaysia)		17,778
		Total Warrants (cost $0)		17,778
Principal Amount			Value
		SHORT-TERM INVESTMENTS 2.8%
		Repurchase Agreement 2.8%
	$4,292,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $4,385,000 of United States Treasury Bills 0.19% due 3/31/11; value: $4,380,615; repurchase proceeds: $4,292,001‡ (cost $4,292,000)	$	4,292,000
		Total Short-Term Investments (cost $4,292,000)		4,292,000
		Total Investments (cost $110,127,754) 98.9%		150,433,811
		Other Assets less Liabilities 1.1%		1,743,759
		NET ASSETS 100.0%	$	152,177,570

62

SEPTEMBER 30, 2010

Contracts			Net Unrealized Depreciation
		FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS SHORT 0.1%
	174,940,000 JPY	USD, State Street Bank and Trust Co., settlement date 10/12/10, (cost $2,000,000 value $2,095,860)	$	(95,860	)
		Total Forward Foreign Currency Exchange Contracts Short (cost $2,000,000 value $2,095,860)		(95,860	)
		*Non-income producing. **Common units. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). ‡All or a portion of this security has been designated as collateral for forward currency contracts (see Note 4). ADR American Depositary Receipt. GDR Global Depositary Receipt. See Notes to Financial Statements.

At September 30, 2010, Wasatch International Opportunities Fund’s investments, excluding short-term investments and forward foreign currency exchange contracts, were in the following countries:

Country	%
Australia		2.1
Belgium		1.2
Brazil		2.9
Canada		8.0
China		15.3
Denmark		0.7
Egypt		1.1
Finland		0.6
France		1.7
Germany		5.7
Hong Kong		0.4
India		6.8
Ireland		0.8
Italy		1.5
Japan		11.9
Kazakhstan		0.6
Korea		9.0
Malaysia		0.8
Mexico		1.9
Netherlands		0.5
Norway		0.5
Singapore		5.2
South Africa		1.3
Sweden		1.7
Switzerland		0.9
Taiwan		1.0
United Arab Emirates		6.9
United Kingdom		8.3
United States		0.7
TOTAL		100.0	%

63

WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments

Shares			Value
		COMMON STOCKS 96.2%
		Advertising 0.0%
	3,315	ReachLocal, Inc.*	$	45,760
		Air Freight & Logistics 1.5%
	2,849,430	Goodpack Ltd. (Singapore)		4,135,885
		Apparel Retail 0.8%
	108,475	Zumiez, Inc.*		2,295,331
		Apparel, Accessories & Luxury Goods 2.2%
	1,418,075	Ports Design Ltd. (China)		3,920,161
	126,927	Volcom, Inc.*		2,426,844
				6,347,005
		Application Software 7.1%
	352,302	Convio, Inc.*		3,248,224
	219,273	Interactive Intelligence, Inc.*		3,859,205
	126,093	RealPage, Inc.*		2,405,854
	114,136	SciQuest, Inc.*		1,378,763
	154,645	Tyler Technologies, Inc.*		3,117,643
	78,695	Ultimate Software Group, Inc.*		3,040,775
	92,190	VanceInfo Technologies, Inc. ADR* (China)		2,981,425
				20,031,889
		Asset Management & Custody Banks 4.8%
	70,541	Diamond Hill Investment Group, Inc.		5,149,493
	97,009	Solar Capital Ltd.		2,080,843
	490,346	Treasury Group Ltd. (Australia)		2,280,510
	41,587	Virtus Investment Partners, Inc.*		1,258,423
	84,097	Westwood Holdings Group, Inc.		2,845,001
				13,614,270
		Automotive Retail 1.3%
	83,410	Monro Muffler Brake, Inc.		3,846,035
		Biotechnology 3.3%
	204,295	3SBio, Inc. ADR* (China)		2,651,749
	219,914	Abcam plc (United Kingdom)		5,963,678
	114,335	Orexigen Therapeutics, Inc.*		678,007
				9,293,434
		Computer Storage & Peripherals 1.0%
	287,165	Intevac, Inc.*		2,874,522
		Construction & Engineering 0.4%
	100,360	Orion Marine Group, Inc.*		1,245,468
		Consumer Finance 3.2%
	318,341	Dollar Financial Corp.*		6,643,777
	542,750	United PanAm Financial Corp.*		2,523,787
				9,167,564
		Data Processing & Outsourced Services 2.1%
	93,380	hiSoft Technology International Ltd. ADR* (China)		2,296,214
	266,630	Wirecard AG (Germany)		3,628,800
				5,925,014
		Diversified Banks 0.4%
	167,403	Encore Bancshares, Inc.*		1,203,628
		Diversified Support Services 1.5%
	204,615	STR Holdings, Inc.*		4,407,407
		Electronic Manufacturing Services 1.2%
	137,145	IPG Photonics Corp.*		3,310,680

Shares			Value
		Environmental & Facilities Services 1.4%
	246,550	Heritage-Crystal Clean, Inc.*	$	2,477,828
	91,485	US Ecology, Inc.		1,463,760
				3,941,588
		Food Retail 0.6%
	338,040	QKL Stores, Inc.* (China)		1,629,353
		General Merchandise Stores 0.6%
	155,860	Gordman Stores, Inc.*		1,800,183
		Health Care Distributors 1.3%
	63,736	MWI Veterinary Supply, Inc.*		3,678,842
		Health Care Equipment 6.9%
	141,400	Abaxis, Inc.*		3,266,340
	338,433	AtriCure, Inc.*		2,687,158
	476,001	Cardica, Inc.*		1,032,922
	341,000	Cardica, Inc. PIPE* †		739,970
	273,165	Cardiovascular Systems, Inc.*		1,445,043
	23,597,360	LMA International N.V.* (Singapore)		5,200,421
	70,270	NuVasive, Inc.*		2,469,288
	177,150	Synovis Life Technologies, Inc.*		2,648,392
				19,489,534
		Health Care Facilities 1.7%
	132,776	AmSurg Corp.*		2,320,925
	248,625	NovaMed, Inc.*		2,409,176
				4,730,101
		Health Care Services 6.2%
	115,307	Bio-Reference Laboratories, Inc.*		2,405,304
	669,825	Clarient, Inc.*		2,264,008
	169,807	CorVel Corp.*		7,208,307
	129,790	Healthways, Inc.*		1,510,756
	108,855	IPC The Hospitalist Co., Inc.*		2,973,919
	55,390	LHC Group, Inc.*		1,284,494
				17,646,788
		Health Care Technology 2.1%
	75,185	Computer Programs and Systems, Inc.		3,200,626
	428,045	RaySearch Laboratories AB (Sweden)		2,649,766
				5,850,392
		Industrial Machinery 1.3%
	250,000	AIA Engineering Ltd. (India)		2,225,437
	182,635	China Valves Technology, Inc.* (China)		1,417,247
				3,642,684
		Internet Software & Services 4.0%
	92,675	Constant Contact, Inc.*		1,986,025
	288,490	DealerTrack Holdings, Inc.*		4,927,409
	261,275	SPS Commerce, Inc.*		3,349,546
	232,605	TechTarget, Inc.*		1,221,176
				11,484,156
		IT Consulting & Other Services 0.6%
	931,770	CSG Ltd. (Australia)		1,613,821
		Life Sciences Tools & Services 3.7%
	1,348	EPS Co. Ltd. (Japan)		3,439,641
	187,499	ICON plc ADR* (Ireland)		4,053,728
	263,436	MEDTOX Scientific, Inc.*		3,063,761
				10,557,130
		Oil & Gas Equipment & Services 1.1%
	252,800	Pason Systems, Inc. (Canada)		3,000,674
		Oil & Gas Exploration & Production 0.5%
	820,710	Ithaca Energy, Inc.* (Canada)		1,473,590

64

SEPTEMBER 30, 2010

Shares			Value
		Pharmaceuticals 1.1%
	414,685	Akorn, Inc.*	$	1,675,327
	106,000	Alexza Pharmaceuticals, Inc.*		336,020
	326,809	Alexza Pharmaceuticals, Inc. PIPE* †		1,035,985
				3,047,332
		Regional Banks 1.9%
	133,114	Commonwealth Bankshares, Inc.*		320,805
	477,035	First California Financial Group, Inc.*		1,178,276
	259,420	Nara Bancorp, Inc.*		1,831,505
	217,791	Pacific Continental Corp.		1,971,009
				5,301,595
		Research & Consulting Services 3.3%
	128,331	CRA International, Inc.*		2,316,374
	316,350	Resources Connection, Inc.		4,352,976
	99,395	Stantec, Inc.* (Canada)		2,625,022
				9,294,372
		Restaurants 1.5%
	122,865	Peet’s Coffee & Tea, Inc.*		4,205,669
		Semiconductors 10.5%
	265,807	Melexis N.V.* (Belgium)		4,026,797
	566,885	Micrel, Inc.		5,589,486
	79,482	NetLogic Microsystems, Inc.*		2,192,114
	865,747	O2Micro International Ltd. ADR* (China)		5,289,714
	280,293	Pericom Semiconductor Corp.*		2,435,746
	264,483	Power Integrations, Inc.		8,407,915
	87,470	Supertex, Inc.*		1,934,836
				29,876,608
		Specialized Finance 0.1%
	154,000	Goldwater Bank, N.A.* *** †		281,050
		Specialty Chemicals 0.8%
	461,662	Neo Material Technologies, Inc.* (Canada)		2,204,471
		Specialty Stores 4.4%
	322,805	Big 5 Sporting Goods Corp.		4,332,043
	197,015	easyhome Ltd. (Canada)		2,237,177
	241,077	Hibbett Sports, Inc.*		6,014,871
				12,584,091
		Systems Software 2.4%
	337,175	OPNET Technologies, Inc.		6,119,726
	19,860	Sourcefire, Inc.*		572,763
				6,692,489
		Thrifts & Mortgage Finance 2.3%
	578,300	Dewan Housing Finance Corp. Ltd. (India)		3,675,587
	64,040	Home Capital Group, Inc. (Canada)		2,765,215
				6,440,802
		Trading Companies &
		Distributors 2.4%
	259,162	CAI International, Inc.*		3,931,488
	220,363	Rush Enterprises, Inc., Class B*		3,029,991
				6,961,479
		Trucking 2.7%
	114,765	Marten Transport, Ltd.		2,660,253
	110,422	Old Dominion Freight Line, Inc.*		2,806,927
	210,433	Vitran Corp., Inc.* (Canada)		2,304,241
				7,771,421
		Total Common Stocks (cost $241,608,384)		272,944,107

Shares			Value
		PREFERRED STOCKS 1.2%
		Regional Banks 1.2%
	504,600	Banco Daycoval S.A. Pfd. (Brazil)	$	3,318,326
		Total Preferred Stocks (cost $1,912,500)		3,318,326
		WARRANTS 0.1%
		Health Care Equipment 0.1%
	121,124	Cardica, Inc., expiring 6/7/12* *** †		—
	322,500	Cardica, Inc., expiring 9/29/14* *** †		232,200
				232,200
		Pharmaceuticals 0.0%
	53,000	Alexza Pharmaceuticals, Inc., expiring 8/10/15* *** †		—
	294,128	Alexza Pharmaceuticals, Inc., expiring 10/5/16* *** †		117,651
				117,651
		Total Warrants (cost $96,458)		349,851
Principal Amount			Value
		SHORT-TERM INVESTMENTS 2.3%
		Repurchase Agreement 2.3%
	$6,492,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $6,225,000 of United States Treasury Notes 4.625% due 2/29/12; value: $6,624,023; repurchase proceeds: $6,492,002 (cost $6,492,000)	$	6,492,000
		Total Short-Term Investments (cost $6,492,000)		6,492,000
		Total Investments (cost $250,109,342) 99.8%		283,104,284
		Other Assets less Liabilities 0.2%		446,976
		NET ASSETS 100.0%	$	283,551,260
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. See Notes to Financial Statements.

65

WASATCH MICRO CAP FUND (WMICX) — Schedule of Investments(continued) SEPTEMBER 30, 2010

At September 30, 2010, Wasatch Micro Cap Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia		1.4
Belgium		1.4
Brazil		1.2
Canada		6.0
China		7.3
Germany		1.3
India		2.1
Ireland		1.5
Japan		1.2
Singapore		3.4
Sweden		1.0
United Kingdom		2.2
United States		70.0
TOTAL		100.0	%

66

WASATCH MICRO CAP VALUE FUND (WAMVX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 85.4%
		Air Freight & Logistics 1.5%
	1,800,000	Aramex PJSC* (United Arab Emirates)	$	1,078,226
	115,000	Transat A.T., Inc.* (Canada)		1,752,317
				2,830,543
		Airlines 1.0%
	45,000	Allegiant Travel Co.		1,904,400
		Apparel Retail 1.1%
	100,000	Cache, Inc.*		510,000
	185,000	Christopher & Banks Corp.		1,463,350
				1,973,350
		Apparel, Accessories & Luxury Goods 2.0%
	60,000	LG Fashion Corp. (Korea)		1,789,081
	200,000	Ted Baker plc (United Kingdom)		1,766,532
	368,477	Zhulian Corp. Bhd. (Malaysia)		230,373
				3,785,986
		Application Software 4.4%
	75,000	Ebix, Inc.*		1,758,750
	350,000	GSE Systems, Inc.*		1,179,500
	380,000	ICSA India Ltd. (India)		1,056,659
	80,000	Interactive Intelligence, Inc.*		1,408,000
	85,000	JDA Software Group, Inc.*		2,155,600
	475,000	Redknee Solutions, Inc.* (Canada)		650,022
				8,208,531
		Asset Management & Custody Banks 3.4%
	125,000	Solar Capital Ltd.		2,681,250
	360,000	Treasury Group Ltd. (Australia)		1,674,294
	63,000	Virtus Investment Partners, Inc.*		1,906,380
				6,261,924
		Auto Parts & Equipment 0.7%
	180,000	Martinrea International, Inc.* (Canada)		1,327,704
		Automotive Retail 1.0%
	40,000	Monro Muffler Brake, Inc.‡		1,844,400
		Biotechnology 1.4%
	800,000	Dyadic International, Inc.*		1,152,000
	380,372	Luna Innovations, Inc.*		768,351
	85,000	NeurogesX, Inc. PIPE* †		587,350
				2,507,701
		Building Products 0.8%
	155,000	NCI Building Systems, Inc.*		1,477,150
		Commercial Printing 0.0%
	2,400	Multi-Color Corp.		35,744
		Communications Equipment 2.1%
	60,000	Blue Coat Systems, Inc.* ‡		1,443,600
	170,000	Dasan Networks, Inc.* (Korea)		1,408,902
	450,000	UTStarcom, Inc.*		976,500
				3,829,002
		Computer Hardware 0.8%
	200,000	Silicon Graphics International Corp.*		1,552,000
		Computer Storage & Peripherals 0.9%
	170,000	Intevac, Inc.*		1,701,700
		Construction & Engineering 1.1%
	60,000	Michael Baker Corp.*		1,977,600

Shares			Value
		Consumer Finance 1.9%
	300,000	Advance America Cash Advance Centers, Inc.	$	1,209,000
	80,000	First Cash Financial Services, Inc.*		2,220,000
				3,429,000
		Data Processing & Outsourced Services 2.0%
	200,000	DJSP Enterprises, Inc.*		712,000
	345,000	Online Resources Corp.*		1,531,800
	110,000	Wirecard AG (Germany)		1,497,086
				3,740,886
		Department Stores 0.7%
	14,000,000	PT Ramayana Lestari Sentosa Tbk (Indonesia)		1,364,706
		Distillers & Vintners 0.6%
	300,000	Globus Spirits Ltd. (India)		1,110,270
		Distributors 1.0%
	28,000	Delticom AG (Germany)		1,890,887
		Diversified Banks 1.3%
	55,556	Idaho Trust Bancorp* *** †		215,002
	550,000	Karnataka Bank Ltd. (India)		2,225,214
				2,440,216
		Diversified Metals & Mining 0.7%
	90,000	Globe Specialty Metals, Inc.* ‡		1,263,600
		Education Services 1.4%
	335,000	China Education Alliance, Inc.* (China)		1,383,550
	86,000	Lincoln Educational Services Corp.*		1,239,260
				2,622,810
		Electrical Components & Equipment 0.7%
	1,600,000	Wasion Group Holdings Ltd. (China)		1,226,915
		Electronic Manufacturing Services 1.2%
	220,000	TTM Technologies, Inc.*		2,153,800
		Environmental & Facilities Services 1.2%
	100,000	EnergySolutions, Inc.		503,000
	175,000	Heritage-Crystal Clean, Inc.*		1,758,750
				2,261,750
		Food Retail 0.6%
	80,000	Susser Holdings Corp.*		1,120,000
		Gas Utilities 1.0%
	275,000	Indraprastha Gas Ltd. (India)		1,878,825
		Health Care Distributors 0.7%
	500,000	Animal Health International, Inc.*		1,375,000
		Health Care Equipment 3.9%
	220,000	AtriCure, Inc.*		1,746,800
	221,000	Cardica, Inc. PIPE* †		479,570
	60,000	Invacare Corp.		1,590,600
	700,000	Solta Medical, Inc.*		1,400,000
	65,000	Zoll Medical Corp.*		2,097,550
				7,314,520
		Health Care Services 1.5%
	52,000	Bio-Reference Laboratories, Inc.*		1,084,720
	75,000	LHC Group, Inc.*		1,739,250
				2,823,970

67

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

Shares			Value
		Health Care Technology 0.5%
	565,996	iCAD, Inc.*	$	996,153
		Home Furnishings 0.6%
	92,000	Hooker Furniture Corp.		1,069,960
		Home Improvement Retail 2.0%
	10,000,000	Ace Hardware Indonesia (Indonesia)		2,268,908
	170,000	Byggmax Group AB* (Sweden)		1,447,633
				3,716,541
		Hotels, Resorts & Cruise Lines 0.8%
	140,900	Orient-Express Hotels Ltd., Class A*		1,571,035
		Industrial Machinery 2.1%
	170,000	China Valves Technology, Inc.* (China)		1,319,200
	95,000	Gencor Industries, Inc.*		678,300
	110,000	Hurco Cos., Inc.*		1,987,700
				3,985,200
		Internet Software & Services 1.8%
	215,000	InfoSpace, Inc.*		1,861,900
	255,000	United Online, Inc.		1,458,600
				3,320,500
		Investment Banking & Brokerage 0.9%
	345,000	GFI Group, Inc.		1,600,800
		IT Consulting & Other Services 1.1%
	150,000	Atea ASA (Norway)		1,187,977
	500,000	CSG Ltd. (Australia)		865,998
				2,053,975
		Oil & Gas Equipment & Services 1.5%
	140,000	TETRA Technologies, Inc.*		1,428,000
	155,000	Willbros Group, Inc.*		1,421,350
				2,849,350
		Oil & Gas Exploration & Production 2.1%
	367,535	Abraxas Petroleum Corp.*		1,043,799
	230,000	Pan Orient Energy Corp.* (Canada)		1,667,492
	160,000	Selan Exploration Technology Ltd. (India)		1,192,478
				3,903,769
		Personal Products 2.0%
	90,000	Atrium Innovations, Inc.* (Canada)		1,286,650
	250,000	Prestige Brands Holdings, Inc.*		2,472,500
				3,759,150
		Pharmaceuticals 1.5%
	38,001	Daewoong Pharmaceutical Co. Ltd. (Korea)		1,631,352
	180,000	Whanin Pharmaceutical Co. Ltd. (Korea)		1,084,499
				2,715,851
		Property & Casualty Insurance 0.6%
	140,000	SeaBright Holdings, Inc.		1,128,400
		Regional Banks 4.9%
	2,100,000	City Union Bank Ltd. (India)		2,117,058
	300,000	First California Financial Group, Inc.*		741,000
	85,000	First of Long Island Corp. (The)		2,123,300
	50,000	Lakeland Financial Corp.		933,000
	140,000	OBA Financial Services, Inc.*		1,552,600
	80,000	Tower Bancorp, Inc.		1,621,600
				9,088,558
		Restaurants 0.8%
	1,000,000	Ajisen China Holdings Ltd. (China)		1,564,574

Shares			Value
		Semiconductor Equipment 0.8%
	100,000	Koh Young Technology, Inc.* (Korea)	$	1,398,816
		Semiconductors 1.8%
	350,000	PLX Technology, Inc.*		1,267,000
	88,000	Standard Microsystems Corp.*		2,007,280
				3,274,280
		Specialized Finance 0.8%
	41,900	Goldwater Bank, N.A.* *** †		76,468
	180,000	Newstar Financial, Inc.*		1,333,800
				1,410,268
		Specialty Chemicals 0.5%
	200,000	Neo Material Technologies, Inc.* (Canada)		955,015
		Specialty Stores 2.3%
	100,000	Big 5 Sporting Goods Corp.		1,342,000
	260,000	easyhome Ltd. (Canada)		2,952,395
				4,294,395
		Steel 2.1%
	70,000	Haynes International, Inc.		2,444,400
	60,000	Olympic Steel, Inc.‡		1,379,400
				3,823,800
		Systems Software 2.7%
	1,400,000	GuestLogix, Inc.* (Canada)		1,603,338
	97,000	OPNET Technologies, Inc.		1,760,550
	2,600	Simplex Technology, Inc. (Japan)		1,576,041
				4,939,929
		Textiles 1.1%
	1,200,000	S. Kumars Nationwide Ltd.* (India)		2,064,315
		Thrifts & Mortgage Finance 3.8%
	350,000	Dewan Housing Finance Corp. Ltd. (India)		2,224,547
	130,000	Ocean Shore Holding Co.		1,389,700
	175,000	Oritani Financial Corp.		1,746,500
	205,000	Westfield Financial, Inc.		1,599,000
				6,959,747
		Trading Companies & Distributors 1.0%
	100,000	Interline Brands, Inc.* ‡		1,804,000
		Trucking 2.1%
	70,000	Marten Transport, Ltd.		1,622,600
	75,000	USA Truck, Inc.*		1,123,500
	100,000	Vitran Corp., Inc.* (Canada)		1,095,000
				3,841,100
		Water Utilities 0.6%
	1,700,000	Sound Global Ltd.* (Singapore)		1,111,027
		Total Common Stocks (cost $139,969,050)		158,435,398
		WARRANTS 0.0%
		Biotechnology 0.0%
	30,399	NeurogesX, Inc., expiring 12/28/12* *** †		—
		Health Care Equipment 0.0%
	58,140	Cardica, Inc., expiring 6/7/12* *** †		—
	110,500	Cardica, Inc., expiring 9/29/14* *** †		79,560
				79,560
		Total Warrants (cost $26,915)		79,560

68

SEPTEMBER 30, 2010

Principal Amount			Value
		SHORT-TERM INVESTMENTS 15.3%
		Repurchase Agreement 15.3%
	$28,445,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $26,930,000 of United States Treasury Notes 3.125% due 5/15/19; value: $29,017,075; repurchase proceeds: $28,445,000‡ (cost $28,445,000)	$	28,445,000
		Total Short-Term Investments (cost $28,445,000)		28,445,000
		Total Investments (cost $168,440,965) 100.7%		186,959,958
		Liabilities less Other Assets (0.7)%		(1,373,087	)
		NET ASSETS 100.0%	$	185,586,871
Number of Contracts			Value
		CALL OPTIONS WRITTEN 0.2%
		Automotive Retail 0.0%
	400	Monro Muffler Brake, Inc., expiring 10/16/10, exercise price $45	$	64,000
		Communications Equipment 0.0%
	600	Blue Coat Systems, Inc., expiring 10/16/10, exercise price $25		36,000
		Diversified Metals & Mining 0.1%
	900	Globe Specialty Metals, Inc., expiring 10/16/10, exercise price $12.50		144,000
		Steel 0.1%
	400	Olympic Steel, Inc., expiring 10/16/10, exercise price $20		106,000
	200	Olympic Steel, Inc., expiring 11/20/10, exercise price $22.50		39,000
				145,000
		Trading Companies & Distributors 0.0%
	1,000	Interline Brands, Inc., expiring 10/16/10, exercise price $17.50		60,000
		Total Call Options Written (premium $374,128)		449,000
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). ‡All or a portion of this security has been designated as collateral for call options written (see Note 4). PIPE Private Investment in a Public Equity. See Notes to Financial Statements.

At September 30, 2010, Wasatch Micro Cap Value Fund’s investments, excluding short-term investments and options written, were in the following countries:

Country	%
Australia		1.6
Canada		8.4
China		3.5
Germany		2.1
India		8.8
Indonesia		2.3
Japan		1.0
Korea		4.6
Malaysia		0.1
Norway		0.7
Singapore		0.7
Sweden		0.9
United Arab Emirates		0.7
United Kingdom		1.1
United States		63.5
TOTAL		100.0	%

69

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

Shares			Value
		COMMON STOCKS 96.9%
		Aerospace & Defense 2.1%
	243,562	HEICO Corp.	$	11,116,170
	344,538	HEICO Corp., Class A		11,738,409
				22,854,579
		Air Freight & Logistics 1.9%
	35,694,386	Aramex PJSC* (United Arab Emirates)		21,381,449
		Aluminum 0.8%
	11,305,282	Midas Holdings Ltd. (Singapore)		8,548,336
		Apparel Retail 1.0%
	546,319	Zumiez, Inc.*		11,560,110
		Apparel, Accessories & Luxury Goods 1.9%
	4,931,685	Ports Design Ltd. (China)		13,633,271
	384,108	Volcom, Inc.*		7,344,145
				20,977,416
		Application Software 6.3%
	161,820	Concur Technologies, Inc.*		8,000,381
	76,162	FactSet Research Systems, Inc.		6,179,023
	502,296	RealPage, Inc.*		9,583,807
	444,472	SciQuest, Inc.*		5,369,222
	1,061,964	Ultimate Software Group, Inc.*		41,034,289
				70,166,722
		Asset Management & Custody Banks 0.7%
	284,740	Waddell & Reed Financial, Inc., Class A		7,790,486
		Automotive Retail 1.7%
	349,275	O’Reilly Automotive, Inc.* ††		18,581,430
		Biotechnology 1.9%
	541,521	Myriad Genetics, Inc.*		8,886,360
	314,495	Orexigen Therapeutics, Inc.*		1,864,955
	146,199	Orexigen Therapeutics, Inc., Series C PIPE* †		866,960
	259,725	Sangamo BioSciences, Inc.*		890,857
	469,510	Seattle Genetics, Inc.*		7,291,490
	205,700	ZymoGenetics, Inc.*		2,005,575
				21,806,197
		Coal & Consumable Fuels 0.0%
	28,490	Amyris, Inc.*		491,453
		Communications Equipment 3.5%
	20,515	Calix, Inc.*		294,595
	133,645	F5 Networks, Inc.*		13,873,688
	531,200	Riverbed Technology, Inc.*		24,212,096
				38,380,379
		Computer & Electronics Retail 0.6%
	250,578	hhgregg, Inc.*		6,204,311
		Construction & Farm Machinery & Heavy Trucks 1.2%
	186,231	Bucyrus International, Inc.		12,915,120
		Data Processing & Outsourced Services 1.8%
	1,483,625	Wirecard AG (Germany)		20,191,947
		Distributors 1.1%
	594,933	LKQ Corp.*		12,374,606
		Diversified Banks 2.5%
	148,711	HDFC Bank Ltd. ADR (India)		27,417,847

Shares			Value
		Diversified Support Services 3.1%
	543,576	Copart, Inc.*	$	17,921,701
	321,015	Ritchie Bros. Auctioneers, Inc. (Canada)		6,667,482
	432,825	STR Holdings, Inc.*		9,323,050
				33,912,233
		Electrical Components & Equipment 0.5%
	176,550	Polypore International, Inc.*		5,324,748
		Environmental & Facilities Services 2.0%
	2,232,175	RPS Group plc (United Kingdom)		6,554,489
	738,060	Tetra Tech, Inc.*		15,477,118
				22,031,607
		Health Care Distributors 1.4%
	276,881	MWI Veterinary Supply, Inc.*		15,981,571
		Health Care Equipment 1.5%
	493,194	Abaxis, Inc.*		11,392,781
	413,221	DexCom, Inc.*		5,462,782
	1,620,220	Zonare Medical Systems, Inc.* *** †		275,437
				17,131,000
		Health Care Services 1.1%
	248,870	Bio-Reference Laboratories, Inc.*		5,191,428
	139,085	MEDNAX, Inc.*		7,413,231
	362,782	TargetRX, Inc.* *** †		3,628
				12,608,287
		Health Care Technology 2.6%
	364,677	athenahealth, Inc.*		12,041,635
	407,725	Computer Programs and Systems, Inc.		17,356,853
				29,398,488
		Human Resource & Employment Services 1.1%
	1,728,523	Michael Page International plc (United Kingdom)		12,507,100
		Industrial Machinery 2.0%
	813,990	AIA Engineering Ltd. (India)		7,245,933
	479,300	Graco, Inc.		15,208,189
				22,454,122
		Internet Retail 2.7%
	182,174	Blue Nile, Inc.*		8,104,921
	7,495	MakeMyTrip Ltd.* (India)		290,132
	415,556	Shutterfly, Inc.*		10,800,301
	1,920	Start Today Co. Ltd. (Japan)		5,356,909
	569,408	Yoox S.p.A.* (Italy)		5,810,238
				30,362,501
		Internet Software & Services 4.3%
	681,735	DealerTrack Holdings, Inc.*		11,644,034
	1,145,360	LoopNet, Inc.*		13,561,062
	55,500	OpenTable, Inc.*		3,778,440
	484,670	VistaPrint N.V.*		18,732,496
				47,716,032
		Investment Banking & Brokerage 0.7%
	492,015	optionsXpress Holdings, Inc.*		7,557,350
		IT Consulting & Other Services 2.6%
	443,478	Cognizant Technology Solutions Corp., Class A*		28,591,027
		Leisure Facilities 1.8%
	518,740	Life Time Fitness, Inc.*		20,474,668

70

SEPTEMBER 30, 2010

Shares			Value
		Life Sciences Tools & Services 3.2%
	408,905	Divi’s Laboratories Ltd. (India)	$	6,261,656
	596,445	ICON plc ADR* (Ireland)		12,895,141
	261,919	Techne Corp.		16,168,260
				35,325,057
		Mortgage REITs 0.9%
	665,608	Redwood Trust, Inc.		9,624,692
		Oil & Gas Equipment & Services 3.5%
	356,895	Dril-Quip, Inc.*		22,166,749
	903,720	Pason Systems, Inc. (Canada)		10,726,933
	455,035	TGS-NOPEC Geophysical Co. ASA (Norway)		6,538,670
				39,432,352
		Oil & Gas Exploration & Production 2.2%
	413,670	GMX Resources, Inc.*		2,010,436
	846,815	Premier Oil plc* (United Kingdom)		21,993,434
				24,003,870
		Other Diversified Financial Services 0.3%
	2,661,038	Count Financial Ltd. (Australia)		3,106,839
		Packaged Foods & Meats 1.4%
	349,703	Glaxo SmithKline Consumer Healthcare Ltd. (India)		15,767,181
		Pharmaceuticals 0.8%
	656,923	Alexza Pharmaceuticals, Inc.*		2,082,446
	409,401	Alexza Pharmaceuticals, Inc. PIPE* †		1,297,801
	680,112	Dechra Pharmaceuticals plc (United Kingdom)		5,019,348
				8,399,595
		Research & Consulting Services 3.4%
	364,396	CRA International, Inc.*		6,577,348
	1,399	Exponent, Inc.*		46,992
	1,067,444	Resources Connection, Inc.††		14,688,029
	610,899	Stantec, Inc.* (Canada)		16,133,843
				37,446,212
		Restaurants 2.1%
	693,795	Peet’s Coffee & Tea, Inc.* ‡‡		23,748,603
		Semiconductors 8.7%
	425,245	Hittite Microwave Corp.*		20,262,925
	573,853	NetLogic Microsystems, Inc.*		15,826,866
	1,455,475	O2Micro International Ltd. ADR* (China)		8,892,952
	1,329,204	Power Integrations, Inc.		42,255,395
	261,285	Silicon Laboratories, Inc.*		9,576,095
				96,814,233
		Specialized Finance 2.4%
	789,810	MSCI, Inc., Class A*		26,229,590
		Specialty Stores 3.5%
	565,985	Big 5 Sporting Goods Corp.		7,595,519
	1,237,511	Hibbett Sports, Inc.*		30,875,899
				38,471,418
		Systems Software 2.8%
	832,287	NetSuite, Inc.*		19,617,004
	397,432	Sourcefire, Inc.*		11,461,939
				31,078,943
		Trading Companies & Distributors 2.6%
	534,700	MSC Industrial Direct Co., Inc., Class A		28,895,188

Shares			Value
		Trucking 2.7%
	115,170	J.B. Hunt Transport Services, Inc.	$	3,996,399
	1,349,737	Knight Transportation, Inc.††		26,090,416
				30,086,815
		Total Common Stocks (cost $791,647,405)		1,076,123,710
		PREFERRED STOCKS 0.8%
		Biotechnology 0.1%
	677,966	Nanosys, Inc., Series D Pfd.* *** †		776,271
	161,519	Nanosys, Inc., Series E Pfd.* *** †		184,939
				961,210
		Internet Software & Services 0.4%
	63,097	Angies List, Series C Pfd.* *** †		4,254,284
		Life Sciences Tools & Services 0.3%
	186,947	Fluidigm Corp., Series E Pfd.* *** †		2,617,258
		Total Preferred Stocks (cost $9,056,481)		7,832,752
		LIMITED PARTNERSHIP INTEREST 0.5%
		Other 0.5%
		Greenspring Global Partners II-B, L.P.* *** †		4,218,951
		Greenspring Global Partners III-B, L.P.* *** †		1,034,896
				5,253,847
		Total Limited Partnership Interest (cost $5,468,853)		5,253,847
		WARRANTS 0.0%
		Health Care Equipment 0.0%
	243,033	Zonare Medical Systems, Inc., expiring 6/30/11* *** †		—
		Life Sciences Tools & Services 0.0%
	4,049	Fluidigm Corp., expiring 8/18/19* *** †		11
		Pharmaceuticals 0.0%
	368,461	Alexza Pharmaceuticals, Inc., expiring 10/5/16* *** †		147,384
		Total Warrants (cost $46,069)		147,395
		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* *** †		214,781
		Total Rights (cost $406,537)		214,781

71

WASATCH SMALL CAP GROWTH FUND (WAAEX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

Principal Amount			Value
		SHORT-TERM INVESTMENTS 2.0%
		Repurchase Agreement 2.0%
	$22,350,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $21,425,000 of United States Treasury Notes 4.625% due 2/29/12; value: $22,798,343; repurchase proceeds: $22,350,006†† (cost $22,350,000)	$	22,350,000
		Total Short-Term Investments (cost $22,350,000)		22,350,000
		Total Investments (cost $828,975,345) 100.2%		1,111,922,485
		Liabilities less Other Assets (0.2)%		(1,835,297	)
		NET ASSETS 100.0%	$	1,110,087,188
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). ††All or a portion of this security has been designated as collateral for purchase commitments (see Note 12). ‡‡Affiliated company (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, 2010, Wasatch Small Cap Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia		0.3
Canada		3.1
China		2.1
Germany		1.8
India		5.2
Ireland		1.2
Italy		0.5
Japan		0.5
Norway		0.6
Singapore		0.8
United Arab Emirates		2.0
United Kingdom		4.2
United States		77.7
TOTAL		100.0	%

72

WASATCH SMALL CAP VALUE FUND (WMCVX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 98.9%
		Aerospace & Defense 2.7%
	165,422	HEICO Corp., Class A	$	5,635,928
		Air Freight & Logistics 1.5%
	2,202,481	Goodpack Ltd. (Singapore)		3,196,853
		Airlines 1.6%
	78,743	Allegiant Travel Co.		3,332,404
		Apparel Retail 0.3%
	27,786	Zumiez, Inc.*		587,952
		Apparel, Accessories & Luxury Goods 1.0%
	108,390	Volcom, Inc.*		2,072,417
		Application Software 0.7%
	64,291	Ebix, Inc.*		1,507,624
		Asset Management & Custody Banks 3.1%
	118,885	SEI Investments Co.		2,418,121
	194,887	Solar Capital Ltd.		4,180,326
				6,598,447
		Automotive Retail 1.2%
	54,605	Monro Muffler Brake, Inc.		2,517,837
		Building Products 0.4%
	97,055	NCI Building Systems, Inc.*		924,934
		Communications Equipment 2.0%
	118,935	Polycom, Inc.*		3,244,547
	449,360	UTStarcom, Inc.*		975,111
				4,219,658
		Computer Storage & Peripherals 1.0%
	206,590	Intevac, Inc.*		2,067,966
		Construction & Engineering 2.2%
	417,841	Great Lakes Dredge & Dock Corp.		2,427,656
	139,080	MYR Group, Inc.*		2,279,521
				4,707,177
		Consumer Finance 4.0%
	520,595	Advance America Cash Advance Centers, Inc.		2,097,998
	185,813	Dollar Financial Corp.*		3,877,917
	532,416	United PanAm Financial Corp.*		2,475,735
				8,451,650
		Data Processing & Outsourced Services 1.7%
	141,515	NeuStar, Inc., Class A*		3,518,063
		Diversified Banks 1.3%
	255,486	Bank of N.T. Butterfield & Son Ltd. (The) (Bermuda)		362,790
	587,000	Karnataka Bank Ltd. (India)		2,374,911
				2,737,701
		Diversified Metals & Mining 0.6%
	90,243	Globe Specialty Metals, Inc.*		1,267,012
		Diversified Support Services 1.9%
	124,590	Copart, Inc.*		4,107,732
		Electrical Components & Equipment 2.0%
	98,793	Harbin Electric, Inc.*		1,767,407
	116,255	Voltamp Transformers Ltd. (India)		2,419,014
				4,186,421

Shares			Value
		Electronic Manufacturing Services 1.4%
	310,805	TTM Technologies, Inc.*	$	3,042,781
		Food Retail 0.5%
	225,020	QKL Stores, Inc.* (China)		1,084,596
		General Merchandise Stores 0.5%
	56,325	99 Cents Only Stores*		1,068,165
		Health Care Facilities 2.9%
	100,056	AmSurg Corp.*		1,748,979
	158,447	Emeritus Corp.*		2,703,106
	75,105	VCA Antech, Inc.*		1,583,964
				6,036,049
		Health Care Services 6.7%
	303,310	Addus HomeCare Corp.*		1,210,207
	166,719	CorVel Corp.*		7,077,221
	157,765	Healthways, Inc.*		1,836,385
	70,135	LHC Group, Inc.*		1,626,431
	44,990	MEDNAX, Inc.*		2,397,967
	4,195	National Research Corp.		109,405
				14,257,616
		Health Care Technology 0.7%
	114,745	Vital Images, Inc.*		1,518,076
		Heavy Electrical Equipment 1.3%
	99,520	General Cable Corp.*		2,698,982
		Industrial Machinery 1.1%
	303,343	China Valves Technology, Inc.* (China)		2,353,942
		Internet Software & Services 2.3%
	31,495	SPS Commerce, Inc.*		403,766
	328,240	United Online, Inc.		1,877,533
	69,235	VistaPrint N.V.*		2,675,932
				4,957,231
		Investment Banking & Brokerage 1.0%
	136,670	optionsXpress Holdings, Inc.*		2,099,251
		IT Consulting & Other Services 0.7%
	864,797	CSG Ltd. (Australia)		1,497,824
		Life Sciences Tools & Services 1.0%
	88,690	Pharmaceutical Product Development, Inc.		2,198,625
		Mortgage REITs 3.7%
	482,125	MFA Financial, Inc.		3,678,614
	285,910	Redwood Trust, Inc.		4,134,258
				7,812,872
		Office Services & Supplies 1.3%
	350,500	American Reprographics Co.*		2,751,425
		Oil & Gas Equipment & Services 2.1%
	209,346	TETRA Technologies, Inc.*		2,135,329
	82,695	TGS-NOPEC Geophysical Co. ASA (Norway)		1,188,294
	115,410	Willbros Group, Inc.*		1,058,310
				4,381,933
		Oil & Gas Exploration & Production 4.6%
	649,218	Abraxas Petroleum Corp.*		1,843,779
	806,510	Afren plc* (United Kingdom)		1,400,664
	122,075	Northern Oil and Gas, Inc.*		2,067,950
	121,045	Petrohawk Energy Corp.*		1,953,666
	41,670	Ultra Petroleum Corp.*		1,749,307
	109,565	VAALCO Energy, Inc.*		628,903
				9,644,269

73

WASATCH SMALL CAP VALUE FUND (WMCVX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

Shares			Value
		Personal Products 2.2%
	75,490	Herbalife Ltd.	$	4,555,822
		Property & Casualty Insurance 2.0%
	134,200	SeaBright Holdings, Inc.		1,081,652
	132,815	Tower Group, Inc.		3,101,230
				4,182,882
		Regional Banks 4.5%
	35,775	City National Corp.		1,898,579
	2,233,000	City Union Bank Ltd. (India)		2,251,138
	188,716	Commonwealth Bankshares, Inc.*		454,806
	54,110	Lakeland Financial Corp.		1,009,693
	257,672	Nara Bancorp, Inc.*		1,819,164
	63,330	Prosperity Bancshares, Inc.		2,056,325
				9,489,705
		Research & Consulting Services 5.1%
	107,847	Corporate Executive Board Co. (The)		3,403,651
	97,510	CRA International, Inc.*		1,760,056
	151,455	Huron Consulting Group, Inc.*		3,330,495
	168,475	Resources Connection, Inc.		2,318,216
				10,812,418
		Semiconductors 8.0%
	192,583	Micrel, Inc.		1,898,868
	279,555	O2Micro International Ltd. ADR* (China)		1,708,081
	509,012	Pericom Semiconductor Corp.*		4,423,314
	76,625	Power Integrations, Inc.		2,435,909
	188,060	Standard Microsystems Corp.*		4,289,649
	93,737	Supertex, Inc.*		2,073,463
				16,829,284
		Specialty Stores 1.0%
	157,270	Big 5 Sporting Goods Corp.		2,110,563
		Steel 2.0%
	78,228	Haynes International, Inc.		2,731,722
	501,000	Ratnamani Metals & Tubes Ltd. (India)		1,496,254
				4,227,976
		Systems Software 1.9%
	226,580	OPNET Technologies, Inc.		4,112,427
		Thrifts & Mortgage Finance 2.0%
	67,070	LIC Housing Finance Ltd. (India)		2,147,852
	215,815	Oritani Financial Corp.		2,153,834
				4,301,686
		Trading Companies & Distributors 4.3%
	141,825	Beacon Roofing Supply, Inc.*		2,066,390
	195,405	Interline Brands, Inc.*		3,525,106
	66,085	MSC Industrial Direct Co., Inc., Class A		3,571,234
				9,162,730
		Trucking 4.9%
	174,885	Marten Transport, Ltd.		4,053,834
	145,109	Old Dominion Freight Line, Inc.*		3,688,671
	244,011	Vitran Corp., Inc.* (Canada)		2,671,921
				10,414,426
		Total Common Stocks (cost $194,209,229)		209,241,332

Principal Amount			Value
		SHORT-TERM INVESTMENTS 1.0%
		Repurchase Agreement 1.0%
	$2,096,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $2,010,000 of United States Treasury Notes 4.625% due 2/29/12; value: $2,138,841; repurchase proceeds: $2,096,001 (cost $2,096,000)	$	2,096,000
		Total Short-Term Investments (cost $2,096,000)		2,096,000
		Total Investments (cost $196,305,229) 99.9%		211,337,332
		Other Assets less Liabilities 0.1%		234,158
		NET ASSETS 100.0%	$	211,571,490
		*Non-income producing. ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2010, Wasatch Small Cap Value Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Australia		0.7
Bermuda		0.2
Canada		1.3
China		2.4
India		5.1
Norway		0.6
Singapore		1.5
United Kingdom		0.7
United States		87.5
TOTAL		100.0	%

74

WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 85.5%
		Asset Management & Custody Banks 9.3%
	47,284	Ares Capital Corp.	$	739,995
	20,715	SEI Investments Co.		421,343
	30,752	Solar Capital Ltd.		659,630
				1,820,968
		Computer & Electronics Retail 1.2%
	5,600	Best Buy Co., Inc.		228,648
		Data Processing & Outsourced Services 9.3%
	25,800	Cielo S.A. (Brazil)		224,341
	13,200	Fidelity National Information Services, Inc.		358,116
	1,965	Mastercard, Inc., Class A		440,160
	3,060	Paychex, Inc.		84,120
	14,100	Redecard S.A. (Brazil)		218,492
	36,100	Wirecard AG (Germany)		491,316
				1,816,545
		Diversified Banks 0.7%
	90,056	Bank of N.T. Butterfield & Son Ltd. (The) (Bermuda)		127,880
		Diversified REITs 2.1%
	41,800	CapLease, Inc.		233,662
	177,857	Star Asia Finance Ltd.* †		177,857
				411,519
		Diversified Support Services 0.5%
	4,385	Ritchie Bros. Auctioneers, Inc. (Canada)		91,076
		Electronic Equipment & Instruments 0.5%
	3,150	National Instruments Corp.		102,879
		Fertilizers & Agricultural Chemicals 1.6%
	6,700	Monsanto Co.		321,131
		Health Care Services 0.4%
	1,535	Chemed Corp.		87,449
		Hypermarkets & Super Centers 1.9%
	6,785	Wal-Mart Stores, Inc.		363,133
		Investment Banking & Brokerage 1.4%
	1,900	Goldman Sachs Group, Inc. (The)		274,702
		IT Consulting & Other Services 2.7%
	3,875	International Business Machines Corp.		519,792
		Leisure Products 0.4%
	3,800	Pool Corp.		76,266
		Life Sciences Tools & Services 1.4%
	5,350	Eurofins Scientific (France)		274,706
		Mortgage REITs 18.6%
	56,600	Anworth Mortgage Asset Corp.		403,558
	130,400	Capstead Mortgage Corp.		1,417,448
	69,700	MFA Financial, Inc.		531,811
	88,050	Redwood Trust, Inc.		1,273,203
				3,626,020
		Multi-Line Insurance 2.1%
	10,955	Loews Corp.		415,195

Shares			Value
		Oil & Gas Exploration & Production 3.2%
	9,700	Ultra Petroleum Corp.*	$	407,206
	2,200	Whiting Petroleum Corp.*		210,122
				617,328
		Personal Products 4.1%
	13,250	Herbalife Ltd.		799,638
		Pharmaceuticals 6.4%
	12,530	Forest Laboratories, Inc.*		387,553
	12,665	Teva Pharmaceutical Industries Ltd. ADR (Israel)		668,079
	7,658	Valleant Pharmaceuticals International, Inc. (Canada)		191,829
				1,247,461
		Property & Casualty Insurance 0.9%
	12,335	Old Republic International Corp.		170,840
		Railroads 1.0%
	3,000	Canadian National Railway Co. (Canada)		192,060
		Restaurants 1.4%
	3,800	McDonald’s Corp.		283,138
		Semiconductors 11.8%
	7,200	Altera Corp.		217,152
	19,300	Intel Corp.		371,139
	12,570	Linear Technology Corp.		386,276
	9,715	Microchip Technology, Inc.		305,537
	44,065	Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)		446,819
	21,600	Xilinx, Inc.		574,776
				2,301,699
		Trading Companies & Distributors 0.5%
	830	W.W. Grainger, Inc.		98,861
		Wireless Telecommunication Services 2.1%
	7,745	America Movil S.A.B. de C.V., Series L ADR (Mexico)		413,041
		Total Common Stocks (cost $15,517,211)		16,681,975
		PREFERRED STOCKS 2.1%
		Diversified Banks 0.0%
	3,803	Bank of N.T. Butterfield & Son Ltd. (The) Pfd.* (Bermuda)		5,400
		Regional Banks 2.1%
	62,700	Banco Daycoval S.A. Pfd. (Brazil)		412,325
		Total Preferred Stocks (cost $340,844)		417,725
		EXCHANGE TRADED FUNDS 1.8%
		Asset Management & Custody Banks 1.8%
	11,310	ProShares UltraShort 20+ Year Treasury*		353,438
		Total Exchange Traded Funds (cost $535,271)		353,438

75

WASATCH STRATEGIC INCOME FUND (WASIX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

Shares			Value
		LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST 1.2%
		Asset Management & Custody Banks 1.2%
	77,279	Star Asia SPV, LLC* *** †	$	225,655
		Total Limited Liability Company Membership Interest (cost $578,644)		225,655
		LIMITED PARTNERSHIP INTEREST 2.0%
		Asset Management & Custody Banks 1.0%
	17,700	KKR & Co. L.P.		187,620
		Oil & Gas Storage & Transportation 1.0%
	4,047	Magellan Midstream Partners L.P.		208,218
		Total Limited Partnership Interest (cost $262,189)		395,838
Principal Amount			Value
		CORPORATE BONDS 0.1%
		Gold 0.1%
	$244,116	Redcorp Ventures Ltd., 13.00%, 7/11/12*** † §§ (Canada)	$	23,692
		Total Corporate Bonds (cost $231,017)		23,692
		SHORT-TERM INVESTMENTS 7.0%
		Repurchase Agreement 7.0%
	$1,357,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $1,305,000 of United States Treasury Notes 4.625% due 2/29/12; value: $1,388,651; repurchase proceeds: $1,357,000 (cost $1,357,000)		1,357,000
		Total Short-Term Investments (cost $1,357,000)		1,357,000
		Total Investments (cost $18,822,176) 99.7%		19,455,323
		Other Assets less Liabilities 0.3%		61,652
		NET ASSETS 100.0%	$	19,516,975
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). §§In Default. ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

At September 30, 2010, Wasatch Strategic Income Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Bermuda		0.7
Brazil		4.7
Canada		2.8
France		1.5
Germany		2.7
Israel		3.7
Mexico		2.3
Taiwan		2.5
United States		79.1
TOTAL		100.0	%

76

WASATCH ULTRA GROWTH FUND (WAMCX) — Schedule of Investments SEPTEMBER 30, 2010

Shares			Value
		COMMON STOCKS 85.4%
		Air Freight & Logistics 1.2%
	2,843,500	Aramex PJSC* (United Arab Emirates)	$	1,703,297
	16,323	Blue Dart Express Ltd. (India)		408,647
				2,111,944
		Aluminum 0.5%
	1,164,000	Midas Holdings Ltd. (Singapore)		880,143
		Apparel Retail 0.0%
	2,396	Zumiez, Inc.*		50,699
		Apparel, Accessories & Luxury Goods 1.2%
	784,000	Ports Design Ltd. (China)		2,167,309
		Application Software 8.1%
	14,455	Concur Technologies, Inc.*		714,655
	219,095	Convio, Inc.*		2,020,056
	51,386	Interactive Intelligence, Inc.*		904,394
	19,000	Pegasystems, Inc.		589,950
	131,588	RealPage, Inc.*		2,510,699
	69,378	SciQuest, Inc.*		838,086
	46,535	SolarWinds, Inc.*		803,194
	108,560	Ultimate Software Group, Inc.*		4,194,758
	56,240	VanceInfo Technologies, Inc. ADR* (China)		1,818,802
				14,394,594
		Asset Management & Custody Banks 1.9%
	209,062	CETIP S.A. (Brazil)		2,059,767
	38,823	Westwood Holdings Group, Inc.		1,313,382
				3,373,149
		Auto Parts & Equipment 0.8%
	63,950	WABCO-TVS India Ltd. (India)		1,522,788
		Automotive Retail 0.9%
	29,275	O’Reilly Automotive, Inc.*		1,557,430
		Biotechnology 1.6%
	77,800	Abcam plc (United Kingdom)		2,109,798
	81,595	Orexigen Therapeutics, Inc.*		483,859
	49,695	Sangamo BioSciences, Inc.*		170,454
				2,764,111
		Communications Equipment 4.2%
	29,660	F5 Networks, Inc.*		3,079,005
	98,240	Riverbed Technology, Inc.*		4,477,779
				7,556,784
		Computer Storage & Peripherals 0.7%
	127,565	Intevac, Inc.*		1,276,926
		Construction & Engineering 0.8%
	63,000	MYR Group, Inc.*		1,032,570
	31,895	Orion Marine Group, Inc.*		395,817
				1,428,387
		Construction & Farm Machinery & Heavy Trucks 0.7%
	18,822	Bucyrus International, Inc.††		1,305,306
		Construction Materials 1.0%
	6,295,000	PT Holcim Indonesia Tbk* (Indonesia)		1,710,406
		Consumer Finance 3.2%
	103,920	Dollar Financial Corp.*		2,168,810
	70,300	First Cash Financial Services, Inc.*		1,950,825
	117,000	Mahindra & Mahindra Financial Services Ltd. (India)		1,679,426
				5,799,061

Shares			Value
		Data Processing & Outsourced Services 2.5%
	74,579	hiSoft Technology International Ltd. ADR* (China)	$	1,833,898
	194,325	Wirecard AG (Germany)		2,644,738
				4,478,636
		Diversified Banks 4.6%
	47,500	Axis Bank Ltd. (India)		1,619,080
	109,580	Bank of Baroda (India)		2,135,146
	45,210	HDFC Bank Ltd. (India)		2,503,226
	10,951	HDFC Bank Ltd. ADR (India)		2,019,036
				8,276,488
		Diversified Support Services 2.1%
	45,480	Copart, Inc.*		1,499,476
	101,165	STR Holdings, Inc.*		2,179,094
				3,678,570
		Electronic Manufacturing Services 1.5%
	111,003	IPG Photonics Corp.*		2,679,612
		Environmental & Facilities Services 0.6%
	104,859	Heritage-Crystal Clean, Inc.*		1,053,833
		Food Retail 0.4%
	132,395	QKL Stores, Inc.* (China)		638,144
		General Merchandise Stores 2.1%
	57,022	Dollar Tree, Inc.*		2,780,393
	77,455	Gordman Stores, Inc.*		894,605
				3,674,998
		Health Care Equipment 6.3%
	48,630	Abaxis, Inc.*		1,123,353
	295,583	AtriCure, Inc.*		2,346,929
	258,600	Cardica, Inc.* ††		561,162
	330,000	Cardica, Inc. PIPE* †		716,100
	161,474	Cardiovascular Systems, Inc.*		854,197
	56,445	DexCom, Inc.*		746,203
	38,250	DiaSorin S.p.A. (Italy)		1,570,070
	59,841	NuVasive, Inc.*		2,102,813
	74,810	Synovis Life Technologies, Inc.*		1,118,410
	1,080,146	Zonare Medical Systems, Inc.* *** †		183,625
				11,322,862
		Health Care Services 1.3%
	39,360	Bio-Reference Laboratories, Inc.*		821,050
	422,629	Clarient, Inc.*		1,428,486
	108,917	TargetRX, Inc.* *** †		1,089
				2,250,625
		Health Care Technology 1.3%
	22,850	athenahealth, Inc.*		754,507
	35,795	Computer Programs and Systems, Inc.		1,523,793
				2,278,300
		Industrial Machinery 0.8%
	159,500	AIA Engineering Ltd. (India)		1,419,829
		Internet Retail 1.2%
	10,955	MakeMyTrip Ltd.* (India)		424,068
	173,120	Yoox S.p.A.* (Italy)		1,766,516
				2,190,584

77

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

Shares			Value
		Internet Software & Services 2.7%
	27,020	Constant Contact, Inc.*	$	579,039
	56,225	DealerTrack Holdings, Inc.*		960,323
	6,915	OpenTable, Inc.*		470,773
	122,815	SPS Commerce, Inc.*		1,574,488
	34,170	VistaPrint N.V.*		1,320,670
	91,388	Xtera Communications, Inc.* *** †		914
				4,906,207
		IT Consulting & Other Services 4.3%
	119,621	Cognizant Technology Solutions Corp., Class A*		7,711,966
		Leisure Facilities 0.5%
	24,509	Life Time Fitness, Inc.*		967,370
		Life Sciences Tools & Services 1.0%
	39,940	Divi’s Laboratories Ltd. (India)		611,610
	55,138	ICON plc ADR* (Ireland)		1,192,084
				1,803,694
		Oil & Gas Equipment & Services 0.9%
	26,715	Dril-Quip, Inc.*		1,659,269
		Oil & Gas Exploration & Production 0.9%
	61,820	Petrohawk Energy Corp.*		997,775
	78,000	Selan Exploration Technology Ltd. (India)		581,333
				1,579,108
		Packaged Foods & Meats 0.9%
	36,890	Glaxo SmithKline Consumer Healthcare Ltd. (India)		1,663,272
		Personal Products 0.0%
	50,403	Ophthonix, Inc.* *** †		504
		Pharmaceuticals 0.4%
	123,562	Alexza Pharmaceuticals, Inc.*		391,691
	75,769	Alexza Pharmaceuticals, Inc. PIPE* †		240,188
				631,879
		Regional Banks 0.5%
	835,360	City Union Bank Ltd. (India)		842,146
		Research & Consulting Services 2.2%
	78,795	eClerx Services Ltd. (India)		1,017,049
	118,600	Resources Connection, Inc.		1,631,936
	48,100	Stantec, Inc.* (Canada)		1,270,321
				3,919,306
		Restaurants 0.7%
	37,580	Peet’s Coffee & Tea, Inc.*		1,286,363
		Semiconductors 8.4%
	50,298	Hittite Microwave Corp.*		2,396,700
	59,495	NetLogic Microsystems, Inc.*		1,640,872
	355,395	O2Micro International Ltd. ADR* (China)		2,171,463
	159,280	Power Integrations, Inc.††		5,063,511
	102,235	Silicon Laboratories, Inc.*		3,746,913
				15,019,459
		Specialized Finance 3.4%
	5,000	Crisil Ltd. (India)		668,966
	27,365	ICRA Ltd. (India)		753,870
	138,055	MSCI, Inc., Class A*		4,584,807
				6,007,643
		Specialty Stores 0.8%
	60,245	Hibbett Sports, Inc.*		1,503,113

Shares			Value
		Systems Software 3.6%
	80,742	NetSuite, Inc.*	$	1,903,089
	141,435	OPNET Technologies, Inc.		2,567,045
	69,465	Sourcefire, Inc.*		2,003,371
				6,473,505
		Thrifts & Mortgage Finance 2.0%
	110,510	LIC Housing Finance Ltd. (India)		3,538,976
		Trucking 0.7%
	61,915	Knight Transportation, Inc.		1,196,817
		Total Common Stocks (cost $107,831,299)		152,552,115
		PREFERRED STOCKS 0.8%
		Biotechnology 0.1%
	169,492	Nanosys, Inc., Series D Pfd.* *** †		194,068
	40,380	Nanosys, Inc., Series E Pfd.* *** †		46,235
				240,303
		Health Care Technology 0.7%
	253,064	Data Sciences International, Inc. Series B Pfd.* *** †		807,502
	243,902	TherOx, Inc., Series I Pfd.* *** †		429,267
				1,236,769
		Total Preferred Stocks (cost $2,021,237)		1,477,072
		LIMITED PARTNERSHIP INTEREST 2.7%
		Other 2.7%
		Greenspring Global Partners II-B, L.P.* *** †		3,797,055
		Greenspring Global Partners III-B, L.P.* *** †		1,034,896
				4,831,951
		Total Limited Partnership Interest (cost $5,034,467)		4,831,951
		WARRANTS 0.1%
		Health Care Equipment 0.1%
	165,000	Cardica, Inc., expiring 9/29/14* *** †		118,800
	162,021	Zonare Medical Systems, Inc., expiring 6/30/11* *** †		—
				118,800
		Pharmaceuticals 0.0%
	33,000	Alexza Pharmaceuticals, Inc., expiring 8/10/15* *** †		—
	68,192	Alexza Pharmaceuticals, Inc., expiring 10/5/16* *** †		27,277
				27,277
		Total Warrants (cost $29,149)		146,077

78

SEPTEMBER 30, 2010

Principal Amount			Value
		SHORT-TERM INVESTMENTS 10.3%
		Repurchase Agreement 10.3%
	$18,309,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $17,555,000 of United States Treasury Notes 4.625% due 2/29/12; value: $18,680,276; repurchase proceeds: $18,309,005†† (cost $18,309,000)	$	18,309,000
		Total Short-Term Investments (cost $18,309,000)		18,309,000
		Total Investments (cost $133,225,152) 99.3%		177,316,215
		Other Assets less Liabilities 0.7%		1,249,366
		NET ASSETS 100.0%	$	178,565,581
		*Non-income producing. ***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †Security purchased in a private placement transaction or under Rule 144A of the Securities Act of 1933 (see Note 11). ††All or a portion of this security has been designated as collateral for purchase commitments (see Note 12). ADR American Depositary Receipt. PIPE Private Investment in a Public Equity. See Notes to Financial Statements.

At September 30, 2010, Wasatch Ultra Growth Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Brazil		1.3
Canada		0.8
China		5.4
Germany		1.7
India		14.7
Indonesia		1.1
Ireland		0.7
Italy		2.1
Singapore		0.6
United Arab Emirates		1.1
United Kingdom		1.3
United States		69.2
TOTAL		100.0	%

79

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

Shares			Value
		COMMON STOCKS 98.3%
		Advertising 1.3%
	552,840	Omnicom Group, Inc.	$	21,826,123
		Aerospace & Defense 2.3%
	416,000	Raytheon Co.		19,015,360
	310,000	Rockwell Collins, Inc.		18,057,500
				37,072,860
		Agricultural Products 1.7%
	865,000	Archer Daniels Midland Co.		27,610,800
		Aluminum 1.0%
	1,361,130	Alcoa, Inc.		16,483,285
		Asset Management & Custody Banks 3.5%
	707,000	Federated Investors, Inc., Class B		16,091,320
	495,000	Northern Trust Corp.		23,878,800
	622,000	Waddell & Reed Financial, Inc., Class A		17,017,920
				56,988,040
		Auto Parts & Equipment 1.0%
	533,460	Johnson Controls, Inc.		16,270,530
		Coal & Consumable Fuels 1.1%
	659,415	Cameco Corp. (Canada)		18,285,578
		Communications Equipment 2.5%
	650,000	Harris Corp.		28,788,500
	1,118,000	Nokia OYJ ADR (Finland)		11,213,540
				40,002,040
		Computer & Electronics Retail 0.6%
	229,770	Best Buy Co., Inc.		9,381,509
		Computer Hardware 1.2%
	480,000	Hewlett-Packard Co.		20,193,600
		Construction & Engineering 1.5%
	502,000	Fluor Corp.		24,864,060
		Construction & Farm Machinery & Heavy Trucks 1.1%
	250,000	Deere & Co.		17,445,000
		Data Processing & Outsourced Services 1.3%
	440,000	Computer Sciences Corp.		20,240,000
		Diversified Chemicals 1.5%
	556,555	E.I. du Pont de Nemours and Co.		24,833,484
		Diversified Metals & Mining 0.5%
	435,000	Anglo American plc ADR (United Kingdom)		8,643,450
		Drug Retail 1.1%
	526,435	Walgreen Co.		17,635,572
		Electric Utilities 2.2%
	973,000	Duke Energy Corp.		17,231,830
	350,000	NextEra Energy, Inc.		19,036,500
				36,268,330
		Electrical Components & Equipment 1.4%
	440,000	Emerson Electric Co.		23,170,400
		Electronic Components 1.0%
	857,300	Corning, Inc.		15,671,444
		Environmental & Facilities Services 1.5%
	679,000	Waste Management, Inc.		24,267,460

Shares			Value
		Fertilizers & Agricultural Chemicals 0.9%
	277,000	Syngenta AG ADR (Switzerland)	$	13,791,830
		Food Distributors 1.5%
	841,440	Sysco Corp.		23,997,869
		Food Retail 1.0%
	1,353,200	SUPERVALU, Inc.		15,602,396
		Gold 1.3%
	453,520	Barrick Gold Corp. (Canada)		20,993,441
		Health Care Distributors 1.8%
	460,000	McKesson Corp.		28,418,800
		Health Care Equipment 3.1%
	196,000	C. R. Bard, Inc.		15,960,280
	448,000	Covidien plc		18,005,120
	325,000	Zimmer Holdings, Inc.*		17,007,250
				50,972,650
		Home Improvement Retail 1.7%
	843,790	Home Depot, Inc. (The)		26,731,267
		Household Products 1.3%
	330,000	Kimberly-Clark Corp.		21,466,500
		Hypermarkets & Super Centers 1.4%
	423,050	Wal-Mart Stores, Inc.		22,641,636
		Industrial Machinery 1.5%
	340,000	Parker Hannifin Corp.		23,820,400
		Insurance Brokers 1.2%
	811,290	Marsh & McLennan Cos., Inc.		19,568,315
		Integrated Oil & Gas 7.1%
	362,000	Chevron Corp.		29,340,100
	502,000	ConocoPhillips		28,829,860
	467,000	Exxon Mobil Corp.		28,855,930
	835,895	Marathon Oil Corp.		27,668,124
				114,694,014
		Integrated Telecommunication Services 3.0%
	768,430	AT&T, Inc.		21,977,098
	833,000	Verizon Communications, Inc.		27,147,470
				49,124,568
		Investment Banking & Brokerage 1.0%
	116,485	Goldman Sachs Group, Inc. (The)		16,841,401
		Life & Health Insurance 1.5%
	631,000	MetLife, Inc.		24,261,950
		Multi-Line Insurance 1.8%
	773,370	Loews Corp.		29,310,723
		Oil & Gas Drilling 2.8%
	572,400	Ensco plc ADR (United Kingdom)		25,603,452
	304,540	Transocean Ltd.*		19,578,877
				45,182,329
		Oil & Gas Equipment & Services 1.8%
	145,000	National Oilwell Varco, Inc.		6,448,150
	355,000	Schlumberger Ltd.		21,871,550
				28,319,700
		Oil & Gas Exploration & Production 2.0%
	270,000	Anadarko Petroleum Corp.		15,403,500
	401,590	Ultra Petroleum Corp.*		16,858,748
				32,262,248

80

SEPTEMBER 30, 2010

Shares			Value
		Oil & Gas Storage & Transportation 2.6%
	900,000	Spectra Energy Corp.	$	20,295,000
	1,130,000	Williams Cos., Inc. (The)		21,594,300
				41,889,300
		Other Diversified Financial Services 3.0%
	1,704,000	Bank of America Corp.		22,339,440
	697,000	JPMorgan Chase & Co.		26,534,790
				48,874,230
		Packaged Foods & Meats 2.4%
	840,000	ConAgra Foods, Inc.		18,429,600
	423,575	HJ Heinz Co.		20,064,748
				38,494,348
		Personal Products 1.0%
	507,500	Avon Products, Inc.		16,295,825
		Pharmaceuticals 5.7%
	385,000	Abbott Laboratories		20,112,400
	440,000	Eli Lilly and Co.		16,073,200
	334,000	Johnson & Johnson		20,694,640
	589,000	Merck & Co., Inc.		21,681,090
	830,000	Pfizer, Inc.		14,251,100
				92,812,430
		Property & Casualty Insurance 4.3%
	737,860	Allstate Corp. (The)		23,279,483
	1,375,000	Old Republic International Corp.		19,043,750
	538,000	Travelers Cos., Inc. (The)		28,029,800
				70,353,033
		Railroads 1.1%
	289,000	Norfolk Southern Corp.		17,198,390
		Semiconductors 3.0%
	1,392,385	Intel Corp.		26,775,564
	818,000	Texas Instruments, Inc.		22,200,520
				48,976,084
		Soft Drinks 1.2%
	300,000	PepsiCo, Inc.		19,932,000
		Specialized Consumer Services 0.4%
	500,000	H&R Block, Inc.		6,475,000
		Specialized Finance 1.3%
	731,425	NYSE Euronext		20,896,812
		Steel 1.1%
	472,090	Nucor Corp.		18,033,838
		Systems Software 1.9%
	694,340	Microsoft Corp.		17,004,387
	916,390	Symantec Corp.*		13,901,636
				30,906,023
		Technology Distributors 1.3%
	780,000	Avnet, Inc.*		21,067,800
		Water Utilities 1.0%
	708,085	American Water Works Co., Inc.		16,477,138
		Total Common Stocks (cost $1,453,459,435)		1,593,837,853

Principal Amount			Value
		SHORT-TERM INVESTMENTS 2.1%
		Repurchase Agreement 2.1%
	$34,508,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $32,820,000 of United States Treasury Notes 2.625% due 4/30/16; value: $35,199,450; repurchase proceeds: $34,508,010 (cost $34,508,000)	$	34,508,000
		Total Short-Term Investments (cost $34,508,000)		34,508,000
		Total Investments (cost $1,487,967,435) 100.4%		1,628,345,853
		Liabilities less Other Assets (0.4)%		(7,233,099	)
		NET ASSETS 100.0%	$	1,621,112,754
		*Non-income producing. ADR American Depositary Receipt. See Notes to Financial Statements.

At September 30, 2010, Wasatch-1st Source Income Equity Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Canada		2.5
Finland		0.7
Switzerland		0.9
United Kingdom		2.1
United States		93.8
TOTAL		100.0	%

81

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

Shares			Value
		COMMON STOCKS 90.8%
		Agricultural Products 1.9%
	180,000	Archer Daniels Midland Co.‡	$	5,745,600
		Application Software 1.2%
	200,000	TIBCO Software, Inc.* ‡		3,548,000
		Automotive Retail 1.3%
	368,032	Pep Boys — Manny, Moe, & Jack (The)‡		3,893,779
		Brewers 1.2%
	75,000	Molson Coors Brewing Co.‡		3,541,500
		Coal & Consumable Fuels 1.4%
	101,100	Alpha Natural Resources, Inc.* ‡		4,160,265
		Communications Equipment 5.5%
	300,000	Blue Coat Systems, Inc.* ‡		7,218,000
	600,000	Brocade Communications Systems, Inc.*		3,504,000
	130,000	Cisco Systems, Inc.* ‡		2,847,000
	135,000	DG Fastchannel, Inc.* ‡		2,936,250
				16,505,250
		Computer & Electronics Retail 3.4%
	250,000	Best Buy Co., Inc.‡		10,207,500
		Computer Hardware 1.5%
	565,000	Silicon Graphics International Corp.*		4,384,400
		Construction & Engineering 1.0%
	60,000	Fluor Corp.‡		2,971,800
		Diversified Support Services 3.7%
	500,000	Iron Mountain, Inc.		11,170,000
		Electrical Components & Equipment 0.7%
	50,000	Thomas & Betts Corp.* ‡		2,051,000
		Environmental & Facilities Services 2.1%
	100,000	Republic Services, Inc.‡		3,049,000
	90,000	Waste Management, Inc.‡		3,216,600
				6,265,600
		Fertilizers & Agricultural Chemicals 1.0%
	50,000	Mosaic Co. (The)‡		2,938,000
		Food Distributors 1.0%
	100,000	Sysco Corp.‡		2,852,000
		Health Care Equipment 5.1%
	150,000	Medtronic, Inc.‡		5,037,000
	50,000	St. Jude Medical, Inc.* ‡		1,967,000
	650,000	Symmetry Medical, Inc.*		6,266,000
	65,000	Zoll Medical Corp.* ‡		2,097,550
				15,367,550
		Health Care Services 1.3%
	320,000	Emdeon, Inc., Class A* ‡		3,897,600
		Heavy Electrical Equipment 1.8%
	200,000	General Cable Corp.*		5,424,000
		Home Entertainment Software 1.1%
	200,000	Electronic Arts, Inc.* ‡		3,286,000
		Household Products 1.1%
	50,000	Clorox Co.‡		3,338,000
		Hypermarkets & Super Centers 3.2%
	180,000	Wal-Mart Stores, Inc.‡		9,633,600
		Insurance Brokers 0.8%
	105,000	Marsh & McLennan Cos., Inc.‡		2,532,600

Shares			Value
		Integrated Oil & Gas 2.2%
	70,000	ConocoPhillips	$	4,020,100
	75,000	Marathon Oil Corp.‡		2,482,500
				6,502,600
		Integrated Telecommunication Services 3.1%
	160,000	AT&T, Inc.‡		4,576,000
	144,000	Verizon Communications, Inc.‡		4,692,960
				9,268,960
		Internet Retail 1.3%
	25,000	Amazon.com, Inc.* ‡		3,926,500
		Internet Software & Services 1.5%
	100,000	eBay, Inc.* ‡		2,440,000
	350,000	United Online, Inc.		2,002,000
				4,442,000
		IT Consulting & Other Services 1.3%
	250,000	Saic, Inc.*		3,995,000
		Life & Health Insurance 2.2%
	300,000	Unum Group‡		6,645,000
		Multi-Line Insurance 5.0%
	400,000	Loews Corp.‡		15,160,000
		Oil & Gas Drilling 9.9%
	110,000	Atwood Oceanics, Inc.*		3,349,500
	220,300	Ensco plc ADR‡ (United Kingdom)		9,854,019
	300,000	Noble Corp.		10,137,000
	190,000	Patterson-UTI Energy, Inc.‡		3,245,200
	50,000	Transocean Ltd.*		3,214,500
				29,800,219
		Oil & Gas Equipment & Services 1.1%
	75,000	Tidewater, Inc.‡		3,360,750
		Oil & Gas Exploration & Production 5.8%
	205,000	Devon Energy Corp.‡		13,271,700
	110,000	Range Resources Corp.		4,194,300
				17,466,000
		Oil & Gas Storage & Transportation 1.1%
	140,000	Spectra Energy Corp.‡		3,157,000
		Pharmaceuticals 1.0%
	50,000	Johnson & Johnson‡		3,098,000
		Property & Casualty Insurance 4.3%
	280,000	Allstate Corp. (The)‡		8,834,000
	150,000	CNA Financial Corp.* ‡		4,198,500
				13,032,500
		Restaurants 0.9%
	35,000	McDonald’s Corp.		2,607,850
		Semiconductors 2.3%
	360,000	Intel Corp.‡		6,922,800
		Steel 2.7%
	100,000	Nucor Corp.‡		3,820,000
	300,000	Steel Dynamics, Inc.‡		4,233,000
				8,053,000
		Systems Software 2.7%
	300,000	Oracle Corp.‡		8,055,000

82

SEPTEMBER 30, 2010

Shares			Value
		Water Utilities 1.1%
	75,000	Companhia de Saneamento Basico do
		Estado de Sao Paulo ADR (Brazil)	$	3,413,250
		Total Common Stocks (cost $248,124,243)		272,620,473
		PREFERRED STOCKS 1.9%
		Cable & Satellite 0.6%
	75,000	Comcast Corp., 7.00%, Series B Pfd.		1,959,750
		Specialized REITs 1.3%
	75,000	Public Storage, 6.625%, Series M Pfd.§§§		1,902,750
	75,000	Public Storage, 7.25%, Series K Pfd.§§§		1,898,250
				3,801,000
		Total Preferred Stocks (cost $4,672,590)		5,760,750
Principal Amount			Value
		SHORT-TERM INVESTMENTS 10.8%
		Repurchase Agreement 10.8%
	$32,403,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $30,820,000 of United States Treasury Notes 2.625% due 4/30/16; value: $33,054,450; repurchase proceeds: $32,403,009‡ (cost $32,403,000)	$	32,403,000
		Total Short-Term Investments (cost $32,403,000)		32,403,000
		Total Investments (cost $285,199,833) 103.5%		310,784,223
		Liabilities less Other Assets (3.5)%		(10,529,487	)
		NET ASSETS 100.0%	$	300,254,736
Number of Contracts			Value
		CALL OPTIONS WRITTEN 1.4%
		Application Software 0.3%
	2,000	TIBCO Software, Inc., expiring 11/20/10, exercise price $12.5	$	1,040,000
		Communications Equipment 0.3%
	1,500	Blue Coat Systems, Inc., expiring 1/22/11, exercise price $24		412,500
	500	DG Fastchannel, Inc., expiring 12/18/10, exercise price $17.50		245,000
	850	DG Fastchannel, Inc., expiring 12/18/10, exercise price $20		297,500
				955,000

Number of Contracts			Value
		Construction & Engineering 0.1%
	600	Fluor Corp., expiring 4/16/11, exercise price $49	$	318,000
		Fertilizers & Agricultural Chemicals 0.2%
	500	Mosaic Co. (The), expiring 12/18/10, exercise price $50		532,000
		Internet Retail 0.3%
	150	Amazon.com, Inc., expiring 10/16/10, exercise price $115		634,500
	100	Amazon.com, Inc., expiring 1/22/11, exercise price $135		282,000
				916,500
		Oil & Gas Drilling 0.1%
	702	Ensco plc, expiring 12/18/10, exercise price $45		193,050
		Systems Software 0.1%
	1,000	Oracle Corp., expiring 1/22/11, exercise price $26		218,000
		Total Call Options Written (premium $2,229,695)		4,172,550
Shares			Value
		SECURITIES SOLD SHORT 9.6%
		Application Software 1.3%
	80,000	SAP AG ADR (Germany)	$	3,944,800
		Diversified Chemicals 1.1%
	115,000	Dow Chemical Co. (The)		3,157,900
		Motorcycle Manufacturers 0.2%
	23,407	Harley-Davidson, Inc.		665,695
		Residential REITs 1.1%
	31,250	AvalonBay Communities, Inc.		3,247,812
		Retail REITs 3.7%
	40,000	Federal Realty Investment Trust		3,266,400
	123,948	Regency Centers Corp.		4,892,228
	33,227	Simon Property Group, Inc.		3,081,472
				11,240,100
		Specialized REITs 0.9%
	75,000	Plum Creek Timber Co., Inc.		2,647,500
		Wireless Telecommunication Services 1.3%
	75,000	American Tower Corp., Class A*		3,844,500
		Total Securities Sold Short (proceeds $24,430,119)		28,748,307
		*Non-income producing. ‡All or a portion of this security has been designated as collateral for call options written and short sales (see Notes 4 and 3, respectively). §§§Perpetual Maturity. Callable any time after first call date. Maturity date is next call date. ADR American Depositary Receipt. REIT Real Estate Investment Trust. See Notes to Financial Statements.

83

WASATCH-1ST SOURCE LONG/SHORT FUND (FMLSX) — Schedule of Investments (continued) SEPTEMBER 30, 2010

At September 30, 2010, Wasatch-1st Source Long/Short Fund’s investments, excluding short-term investments, options written and securities sold short, were in the following countries:

Country	%
Brazil		1.2
United Kingdom		3.6
United States		95.2
TOTAL		100.0	%

84

WASATCH-HOISINGTON U.S. TREASURY FUND (WHOSX) — Schedule of Investments SEPTEMBER 30, 2010

Principal Amount			Value
		U.S. GOVERNMENT OBLIGATIONS 99.0%
	$    6,000,000	U.S. Treasury Bond, 3.50%, 2/15/39	$	5,805,000
	7,800,000	U.S. Treasury Bond, 3.875%, 8/15/40		8,063,250
	6,335,000	U.S. Treasury Bond, 4.25%, 5/15/39		6,964,541
	1,400,000	U.S. Treasury Bond, 4.375%, 2/15/38		1,577,625
	16,420,000	U.S. Treasury Bond, 4.375%, 5/15/40		18,441,795
	15,200,000	U.S. Treasury Bond, 4.50%, 2/15/36		17,477,629
	10,000,000	U.S. Treasury Bond, 4.50%, 5/15/38		11,501,560
	4,500,000	U.S. Treasury Bond, 4.50%, 8/15/39		5,152,500
	2,000,000	U.S. Treasury Bond, 4.625%, 2/15/40		2,336,876
	22,000,000	U.S. Treasury Bond, 4.75%, 2/15/37		26,300,318
	109,000,000	U.S. Treasury Strip, principal only, 2/15/31		51,247,331
	44,837,000	U.S. Treasury Strip, principal only, 2/15/37		16,156,878
	62,151,000	U.S. Treasury Strip, principal only, 5/15/39		19,915,293
	26,000,000	U.S. Treasury Strip, principal only, 5/15/40		7,997,210
		Total U.S. Government Obligations (cost $185,327,036)		198,937,806
		SHORT-TERM INVESTMENTS 0.7%
		Repurchase Agreement 0.7%
	1,318,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $1,265,000 of United States Treasury Notes 4.625% due 2/29/12; value: $1,346,087; repurchase proceeds: $1,318,000 (cost $1,318,000)		1,318,000
		Total Short-Term Investments (cost $1,318,000)		1,318,000
		Total Investments (cost $186,645,036) 99.7%		200,255,806
		Other Assets less Liabilities 0.3%		598,775
		NET ASSETS 100.0%	$	200,854,581
		See Notes to Financial Statements.

85

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

Principal Amount			Value
		ASSET BACKED SECURITIES 2.3%
	$1,500,000	Citibank Credit Card Issuance Trust, 4.90%, 6/23/16, Series 2009-A4, Class A4	$	1,683,771
	600,000	Citibank Omni Master Trust, 4.90%, 11/15/18, Series 2009-A17, Class A17		649,325
	850,000	World Financial Network Credit Card Master Note Trust, 4.60%, 9/15/15, Series 2009-A, Class A		879,675
		Total Asset Backed Securities (cost $3,136,258)		3,212,771
		COLLATERALIZED MORTGAGE OBLIGATIONS 25.7%
	370,127	ABN Amro Mortgage Corp., 5.50%, 2/25/18, Series 2003-13, Class A2		379,786
	39,501	Banc of America Mortgage Securities, Inc., 3.39038%, 2/25/33, Series 2003-A, Class 3A1†††		35,086
	250,000	Banc of America Commercial Mortgage, Inc., 5.228493%, 11/10/42, Series 2005-1, Class A4†††		264,153
	345,665	Bear Stearns Commercial Mortgage Securities, 4.735%, 9/11/42, Series 2005-PWR9, Class A2		348,320
	42,275	Credit Suisse First Boston Mortgage Securities Corp., 4.302%, 7/15/36, Series 2004-C3, Class A3		42,243
	389,615	Countrywide Home Loans, 4.50%, 8/25/19, Series 2004-J7, Class 2A1		397,027
	153,017	Federal Home Loan Mortgage Corp., 2.651%, 5/1/31, Series 847292†††		160,154
	111,373	Federal Home Loan Mortgage Corp., 2.743%, 12/1/32, Series 847527†††		116,223
	40,242	Federal Home Loan Mortgage Corp., 2.977%, 8/1/33, Series 847281†††		42,277
	362,462	Federal Home Loan Mortgage Corp., 4.097%, 5/1/25, Series 775617†††		376,164
	286,155	Federal Home Loan Mortgage Corp., 4.50%, 7/15/15, Series 2864, Class CV		289,668
	712,726	Federal Home Loan Mortgage Corp., 4.50%, 12/1/18, Series G11657		757,033
	112,054	Federal Home Loan Mortgage Corp., 5.00%, 5/15/16, Series R007, Class AL		113,040
	283,138	Federal Home Loan Mortgage Corp., 5.00%, 2/15/23, Series 2960, Class KP		292,509
	187,344	Federal Home Loan Mortgage Corp., 5.125%, 6/15/18, Series R016, Class AM		193,646
	81,538	Federal Home Loan Mortgage Corp., 5.50%, 10/15/14, Series R014, Class AL		82,003
	500,284	Federal Home Loan Mortgage Corp., 5.50%, 5/15/15, Series 2808, Class VA		550,747
	210,114	Federal Home Loan Mortgage Corp., 5.50%, 10/1/25, Series C90925		224,628
	510,447	Federal Home Loan Mortgage Corp., 5.50%, 8/1/29, Series C46102		546,308
	82,690	Federal Home Loan Mortgage Corp., 5.722%, 11/1/35, Series 1M0010†††		86,244
	179,286	Federal Home Loan Mortgage Corp., 5.875%, 5/15/16, Series R007, Class AC		181,069
	219,929	Federal National Mortgage Assoc., 2.178%, 11/1/34, Series 782320†††		229,486
	379,261	Federal National Mortgage Assoc., 2.305%, 1/1/35, Series 825245†††		391,432
	246,432	Federal National Mortgage Assoc., 3.054%, 1/1/18, Series 057735†††		250,676
	17,708	Federal National Mortgage Assoc., 3.35%, 10/1/32, Series 659657†††		18,241
	261,136	Federal National Mortgage Assoc., 3.525%, 2/1/21, Series 313380†††		267,645

Principal Amount			Value
	$   637,558	Federal National Mortgage Assoc., 3.875%, 1/25/39, Series 2009-2, Class WJ	$	675,065
	537,994	Federal National Mortgage Assoc., 4.00%, 10/25/32, Series 2003-28, Class GA		565,284
	269,974	Federal National Mortgage Assoc., 4.082%, 7/1/19, Series 070377†††		275,216
	277,007	Federal National Mortgage Assoc., 4.25%, 9/25/22, Series 2003-17, Class ED		289,603
	660,730	Federal National Mortgage Assoc., 4.50%, 5/1/19, Series 725445		701,804
	656,468	Federal National Mortgage Assoc., 4.50%, 7/1/19, Series 725609		697,277
	610,361	Federal National Mortgage Assoc., 4.50%, 6/25/29, Series 2005-121, Class V		660,379
	548,031	Federal National Mortgage Assoc., 4.50%, 1/25/30, Series 2004-67, Class AC		562,525
	1,301,800	Federal National Mortgage Assoc., 5.00%, 7/25/23, Series 2005-4, Class VG		1,405,763
	250,000	Federal National Mortgage Assoc., 5.50%, 5/25/23, Series 2003-42, Class EK		291,050
	76,465	Federal National Mortgage Assoc., 6.30%, 9/25/15, Series 2001-M2, Class C†††		76,908
	193,851	First Horizon Asset Securities, Inc., 5.75%, 2/25/33, Series 2002-9, Class 1A3		194,605
	1,484,924	Government National Mortgage Assoc., 3.00%, 12/20/38, Series 2010-89, Class PA		1,542,638
	803,932	Government National Mortgage Assoc., 3.25%, 7/20/37, Series 2010-33, Class AP		823,584
	798,053	Government National Mortgage Assoc., 3.387%, 6/16/30, Series 2006-19, Class A		810,511
	1,486,207	Government National Mortgage Assoc., 4.00%, 6/20/37, Series 2008-30, Class AC		1,544,455
	1,446,113	Government National Mortgage Assoc., 4.00%, 9/20/38, Series 2009-108, Class WG		1,533,377
	1,939,873	Government National Mortgage Assoc., 4.00%, 3/20/39, Series 2009-31, Class TA		2,040,903
	1,731,917	Government National Mortgage Assoc., 4.00%, 4/16/39, Series 2009-110, Class AB		1,810,823
	994,229	Government National Mortgage Assoc., 4.50%, 8/15/24, Series 717874		1,055,924
	303,482	Government National Mortgage Assoc., 4.50%, 1/20/31, Series 2005-38, Class A		309,264
	1,299,833	Government National Mortgage Assoc., 4.50%, 6/20/34, Series 2009-101, Class G		1,367,074
	1,338,430	Government National Mortgage Assoc., 4.50%, 8/20/34, Series 2009-36, Class G		1,437,787
	1,709,803	Government National Mortgage Assoc., 4.50%, 8/16/35, Series 2009-62, Class DT		1,783,214
	1,314,243	Government National Mortgage Assoc., 4.50%, 3/20/39, Series 2009-14, Class AG		1,396,923
	650,000	Government National Mortgage Assoc., 4.658%, 12/16/30, Series 2005-12, Class C		710,770
	325,790	Government National Mortgage Assoc., 5.00%, 12/20/29, Series 2004-101, Class MA		331,140
	827,275	Government National Mortgage Assoc., 5.00%, 5/20/31, Series 2004-19, Class PD		854,939
	1,331,586	Government National Mortgage Assoc., 5.00%, 9/16/31, Series 2009-38, Class A		1,400,224
	684,195	Government National Mortgage Assoc., 5.00%, 4/20/33, Series 2009-8, Class LA		696,413
	500,000	Government National Mortgage Assoc., 5.00%, 7/20/34, Series 2004-105, Class MC		548,064
	409,449	Government National Mortgage Assoc., 5.00%, 8/20/39, Series 004513		431,267
	6,267	LB-UBS Commercial Mortgage Trust, 4.187%, 8/15/29, Series 2004-C6, Class A2		6,272
		Total Collateralized Mortgage Obligations (cost $34,510,833)		35,466,853

86

SEPTEMBER 30, 2010

Principal Amount			Value
		CORPORATE BONDS 28.8%
		Aerospace & Defense 0.4%
	$   200,000	General Dynamics Corp., 4.25%, 5/15/13	$	217,483
	250,000	Martin Marietta Corp., 7.375%, 4/15/13		285,386
				502,869
		Air Freight & Logistics 0.4%
	500,000	United Parcel Service, Inc., 3.875%, 4/1/14		545,896
		Automotive Retail 0.2%
	300,000	AutoZone, Inc., 5.50%, 11/15/15		334,944
		Biotechnology 0.2%
	300,000	Amgen, Inc., 4.85%, 11/18/14		339,227
		Cable & Satellite 0.4%
	550,000	Comcast Corp., 5.30%, 1/15/14		614,586
		Computer Hardware 0.7%
	600,000	Hewlett-Packard Co., 2.125%, 9/13/15		605,200
	300,000	Hewlett-Packard Co., 6.50%, 7/1/12		329,107
				934,307
		Construction & Farm Machinery & Heavy Trucks 1.0%
	500,000	Caterpillar Financial Services Corp., 5.85%, 9/1/17 MTN		587,764
	250,000	John Deere Capital Corp., 4.90%, 9/9/13 MTN		276,045
	500,000	PACCAR Financial Corp., 1.95%, 12/17/12 MTN		509,537
				1,373,346
		Consumer Finance 0.6%
	700,000	American Express Credit Corp., 5.875%, 5/2/13 MTN		770,417
		Distillers & Vintners 0.4%
	504,000	Diageo Capital plc, 7.375%, 1/15/14 (United Kingdom)		597,082
		Diversified Banks 4.1%
	1,000,000	Bank of America Corp., 7.375%, 5/15/14		1,149,353
	500,000	HSBC Capital Funding L.P., 4.61%, 6/27/13††† §§§ (Jersey, C.I.)		477,036
	325,000	HSBC Finance Corp., 6.375%, 10/15/11		342,261
	950,000	Royal Bank of Canada Certificate of Deposit, 2.25%, 3/15/13 (Canada)		978,651
	500,000	SouthTrust Corp., 5.80%, 6/15/14		548,334
	650,000	U.S. Bancorp, 4.20%, 5/15/14		712,301
	750,000	Wachovia Corp., 5.25%, 8/1/14		815,228
	700,000	Wells Fargo & Co., 0.58781%, 1/24/12†††		697,266
				5,720,430
		Diversified Metals & Mining 0.4%
	450,000	Rio Tinto Alcan, Inc., 4.50%, 5/15/13 (Canada)		480,764
		Drug Retail 0.7%
	550,000	CVS Caremark Corp., 5.75%, 8/15/11		573,072
	400,000	Walgreen Co., 4.875%, 8/1/13		443,759
				1,016,831
		Electric Utilities 1.0%
	300,000	Florida Power & Light Co., 4.85%, 2/1/13		326,530
	600,000	Georgia Power Co., 5.125%, 11/15/12, Series K		650,726
	350,000	Energy East Corp., 6.75%, 6/15/12		378,994
				1,356,250

Principal Amount			Value
		Footwear 0.5%
	$   600,000	Nike, Inc., 5.15%, 10/15/15 MTN	$	695,461
		Health Care Distributors 0.5%
	650,000	Cardinal Health, Inc., 5.50%, 6/15/13		713,176
		Health Care Equipment 0.2%
	250,000	Baxter International, Inc., 4.625%, 3/15/15		279,921
		Household Appliances 0.3%
	350,000	Whirlpool Corp., 8.00%, 5/1/12		381,398
		Industrial Conglomerates 3.6%
	500,000	3M Co., 4.375%, 8/15/13 MTN		550,833
	1,250,000	General Electric Capital Corp., 3.75%, 11/14/14, Series A		1,323,690
	1,000,000	General Electric Capital Corp., 5.40%, 2/15/17 MTN		1,101,397
	1,000,000	General Electric Capital Corp., 5.90%, 5/13/14		1,132,604
	740,000	Tyco International Finance Ltd. S.A., 6.00%, 11/15/13		838,709
				4,947,233
		Industrial Gases 0.5%
	600,000	Praxair, Inc., 2.125%, 6/14/13		616,826
		Industrial Machinery 0.5%
	600,000	Parker Hannifin Corp., 4.875%, 2/15/13		653,056
		Integrated Oil & Gas 1.0%
	500,000	ConocoPhillips, 4.60%, 1/15/15		561,550
	750,000	Marathon Oil Canada Corp., 8.375%, 5/1/12 (Canada)		825,809
				1,387,359
		Integrated Telecommunication Services 1.0%
	170,774	Ameritech Capital Funding, 9.10%, 6/1/16		210,003
	870,000	AT&T, Inc., 2.50%, 8/15/15		886,517
	300,000	Verizon Global Funding Corp., 4.375%, 6/1/13		325,081
				1,421,601
		Investment Banking & Brokerage 0.4%
	500,000	Goldman Sachs Group, Inc. (The), 5.35%, 1/15/16		549,708
		Life & Health Insurance 1.3%
	500,000	Principal Life Income Funding Trusts, 5.30%, 4/24/13 MTN		541,022
	600,000	Prudential Financial, Inc., 6.20%, 1/15/15		675,803
	480,000	Prudential Holdings, LLC, 7.245%, 12/18/23, Series FSA		568,800
				1,785,625
		Movies & Entertainment 0.2%
	250,000	Walt Disney Co. (The), 4.50%, 12/15/13		277,041
		Oil & Gas Exploration & Production 0.2%
	300,000	Apache Corp., 6.25%, 4/15/12		324,509
		Other Diversified Financial Services 1.3%
	1,350,000	Bear Stearns Co., LLC (The), 5.70%, 11/15/14		1,522,178
	260,000	Source One Mortgage Services, 9.00%, 6/1/12, Series B		281,162
				1,803,340

87

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

Principal Amount			Value
		Personal Products 0.5%
	$  655,000	Avon Products, Inc., 5.625%, 3/1/14	$	743,274
		Pharmaceuticals 2.1%
	600,000	AstraZeneca plc, 5.90%, 9/15/17 (United Kingdom)		722,218
	1,000,000	Johnson & Johnson, 5.55%, 8/15/17		1,206,314
	725,000	Pharmacia Corp., 6.50%, 12/1/18		907,929
				2,836,461
		Property & Casualty Insurance 1.1%
	435,000	Allstate Corp. (The), 7.50%, 6/15/13		500,525
	650,000	Berkshire Hathaway Finance Corp., 4.625%, 10/15/13		715,131
	325,000	Progressive Corp. (The), 6.375%, 1/15/12		343,898
				1,559,554
		Railroads 0.6%
	300,000	Burlington Northern Santa Fe, LLC, 4.30%, 7/1/13		323,079
	500,000	Union Pacific Corp., 6.125%, 1/15/12		530,706
				853,785
		Regional Banks 0.8%
	800,000	BB&T Corp., 4.75%, 10/1/12		847,180
	200,000	Fifth Third Bancorp, 5.45%, 1/15/17		209,816
				1,056,996
		Soft Drinks 0.5%
	600,000	Bottling Group, LLC, 4.625%, 11/15/12		645,870
		Special Purpose Entity 0.1%
	162,000	Targeted Return Index Fund, 6.814%, 1/15/12, Series 2002-10†††		167,440
		Specialized Finance 0.5%
	600,000	CME Group, Inc., 5.40%, 8/1/13		671,128
		Systems Software 0.6%
	750,000	Oracle Corp., 3.75%, 7/8/14		817,354
		Total Corporate Bonds (cost $37,404,533)		39,775,065
		MUNICIPAL BONDS 0.9%
	650,000	Arizona State Transportation Board Highway Revenue, 5.00%, 7/1/23		728,592
	500,000	Richmond, CA Joint Powers Financing Authority Revenue, 8.25%, 7/1/19		536,880
		Total Municipal Bonds (cost $1,153,126)		1,265,472
Shares			Value
		MUTUAL FUNDS 0.6%
		Mutual Funds 0.6%
	49,765	Eaton Vance Short Duration Diversified Income Fund	$	870,390
		Total Mutual Funds (cost $751,526)		870,390
		EXCHANGE TRADED FUNDS 1.0%
	12,000	iShares iBoxx Investment Grade Corporate Bond Fund		1,357,080
		Total Exchange Traded Funds (cost $1,069,331)		1,357,080

Principal Amount			Value
		U.S. GOVERNMENT AGENCY SECURITIES 22.6%
	$1,000,000	Federal Farm Credit Bank, 0.06%, 5/24/12	$	1,000,295
	1,000,000	Federal Farm Credit Bank, 2.65%, 5/11/15		1,052,881
	1,000,000	Federal Farm Credit Bank, 3.85%, 2/11/15		1,102,302
	1,000,000	Federal Farm Credit Bank, 3.875%, 10/7/13		1,090,607
	650,000	Federal Farm Credit Bank, 4.875%, 4/1/14		735,204
	500,000	Federal Farm Credit Bank, 4.875%, 1/17/17		580,981
	1,000,000	Federal Home Loan Bank, 1.25%, 4/15/14		1,005,525
	1,000,000	Federal Home Loan Bank, 2.00%, 7/17/14		1,021,913
	400,000	Federal Home Loan Bank, 5.00%, 12/16/11, Series WE11		422,224
	1,550,000	Federal Home Loan Bank, 5.00%, 9/14/12		1,680,597
	1,000,000	Federal Home Loan Mortgage Corp., 3.50%, 5/29/13		1,072,633
	3,100,000	Federal Home Loan Mortgage Corp., 4.75%, 11/17/15		3,583,287
	1,400,000	Federal Home Loan Mortgage Corp., 5.50%, 3/28/16		1,432,637
	700,000	Federal Home Loan Mortgage Corp., 5.55%, 10/4/16		733,616
	2,000,000	Federal National Mortgage Assoc., 0.65%, 6/3/13		1,999,412
	2,000,000	Federal National Mortgage Assoc., 0.80%, 9/28/12		2,002,022
	1,000,000	Federal National Mortgage Assoc., 1.00%, 2/25/13		1,001,396
	800,000	Federal National Mortgage Assoc., 1.50%, 9/23/14		801,267
	1,000,000	Federal National Mortgage Assoc., 2.05%, 5/21/14		1,008,820
	900,000	Federal National Mortgage Assoc., 2.375%, 3/23/12		906,697
	600,000	Federal National Mortgage Assoc., 4.00%, 1/18/13		605,596
	1,800,000	Federal National Mortgage Assoc., 4.875%, 12/15/16		2,100,515
	600,000	Federal National Mortgage Assoc., 5.24%, 8/7/18		670,955
	654,130	New Valley Generation IV, 4.687%, 1/15/22***		704,694
	1,000,000	Tennessee Valley Authority, 0.00%, 11/1/18, Series C		784,842
	800,000	Tennessee Valley Authority, 6.00%, 3/15/13, Series C		902,289
	1,000,000	Tennessee Valley Authority, 6.25%, 12/15/17, Series E		1,256,947
		Total U.S. Government Agency Securities (cost $30,188,209)		31,260,154
		U.S. TREASURY BONDS 12.4%
	4,025,000	U.S. Treasury Bond, 3.25%, 12/31/16		4,392,595
	9,400,000	U.S. Treasury Bond, 3.75%, 11/15/18		10,501,567
	1,900,000	U.S. Treasury Bond, 4.25%, 8/15/15		2,171,493
		Total U.S. Treasury Bonds (cost $16,132,266)		17,065,655

88

SEPTEMBER 30, 2010

Principal Amount			Value
		U.S. TREASURY INFLATION PROTECTED BONDS 2.0%
	$2,549,568	U.S. Treasury Bond, 1.625%, 1/15/18#	$	2,766,082
		Total U.S. Treasury Inflation Protected Bonds (cost $2,488,022)		2,766,082
Shares			Value
		PREFERRED STOCKS 0.7%
		Investment Banking & Brokerage 0.2%
	10,000	Morgan Stanley Cap Tr VI, 6.60%, 2/1/46 Pfd.	$	250,300
		Other Diversified Financial Services 0.5%
	10,000	Bank of America Corp., 8.20%, 5/1/13, Series H Pfd.§§§		260,600
	20,000	Bank One Capital TR VI, 7.20% Pfd.		516,400
				777,000
		Total Preferred Stocks (cost $981,266)		1,027,300

Principal Amount			Value
		SHORT-TERM INVESTMENTS 2.2%
		Repurchase Agreement 2.2%
	$2,980,000	Repurchase Agreement dated 9/30/10, 0.01% due 10/1/10 with State Street Bank and Trust Co. collateralized by $2,825,000 of United States Treasury Notes 3.125% due 5/15/19; value: $3,043,938; repurchase proceeds: $2,980,001 (cost $2,980,000)	$	2,980,000
		Total Short-Term Investments (cost $2,980,000)		2,980,000
		Total Investments (cost $130,795,370) 99.2%		137,046,822
		Other Assets less Liabilities 0.8%		1,048,287
		NET ASSETS 100.0%	$	138,095,109
		***Security was fair valued under procedures adopted by the Board of Trustees (see Note 15). †††Variable Rate Securities. §§§Perpetual Maturity. Callable any time after first call date. #Treasury Inflation Protected Securities. A U.S. Treasury Note or Bond that offers protection from inflation by paying a fixed rate of interest on principal amount that is adjusted for inflation based on the Consumer Price Index. MTN Medium Term Note. See Notes to Financial Statements.

At September 30, 2010, Wasatch-1st Source Income Fund’s investments, excluding short-term investments, were in the following countries:

Country	%
Canada		1.7
Jersey, Channel Islands		0.3
United Kingdom		1.0
United States		97.0
TOTAL		100.0	%

89

WASATCH FUNDS — Statements of Assets and Liabilities

	CORE GROWTH FUND			EMERGING MARKETS SMALL CAP FUND			GLOBAL OPPORTUNITIES FUND
Assets:
Investments, at cost
Unaffiliated issuers	$	319,257,636		$	359,528,683		$	172,718,433
Repurchase agreements		16,653,000			14,721,000			10,658,000
	$	335,910,636		$	374,249,683		$	183,376,433
Investments, at market value
Unaffiliated issuers	$	401,047,262		$	441,296,399		$	224,507,295
Repurchase agreements		16,653,000			14,721,000			10,658,000
		417,700,262			456,017,399			235,165,295
Cash		384			898			7,977
Foreign currency on deposit (cost of $27, $1,442,861, $240,006, $27,769, $145,423, $108,078, $1,977,338, and $11, respectively)		30			1,460,799			240,685
Receivable for investment securities sold		1,246,861			998,178			609,988
Capital shares receivable		281,377			2,986,335			172,847
Interest and dividends receivable		316,246			262,128			281,025
Prepaid expenses and other assets		27,908			35,386			26,046
Total Assets		419,573,068			461,761,123			236,503,863
Liabilities:
Payable for securities purchased		—			11,312,696			886,061
Capital shares payable		147,161			269,725			140,497
Payable to Advisor		332,279			316,352			354,539
Accrued fund administration fees		7,429			7,049			4,055
Accrued expenses and other liabilities		215,369			271,951			109,006
Other payables		229,117			2,832,195			105,898
Unrealized depreciation on foreign currency contracts		—			—			—
Total Liabilities		931,355			15,009,968			1,600,056
Net Assets	$	418,641,713		$	446,751,155		$	234,903,807
Net Assets Consist of:
Capital stock	$	139,785		$	1,883,583		$	591,927
Paid-in capital in excess of par		456,850,114			381,327,074			175,072,000
Undistributed net investment income (loss)		2,636,473			(117,824	)		(816,038	)
Undistributed net realized gain (loss) on investments and foreign currency translations		(122,545,269	)		(15,281,820	)		8,367,392
Net unrealized appreciation on investments and foreign currency translations		81,560,610			78,940,142			51,688,526
Net Assets	$	418,641,713		$	446,751,155		$	234,903,807
Capital Stock, $.01 par value:
Authorized		10,000,000,000			10,000,000,000			10,000,000,000
Issued and outstanding		13,978,467			188,358,295			59,192,688
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE	$	29.95		$	2.37		$	3.97

See Notes to Financial Statements.

90

SEPTEMBER 30, 2010

GLOBAL SCIENCE & TECHNOLOGY FUND			HERITAGE GROWTH FUND			INTERNATIONAL GROWTH FUND			INTERNATIONAL OPPORTUNITIES FUND			MICRO CAP FUND
$	55,377,229		$	60,463,711		$	194,684,808		$	105,835,754		$	243,617,342
	1,179,000			2,810,000			12,766,000			4,292,000			6,492,000
$	56,556,229		$	63,273,711		$	207,450,808		$	110,127,754		$	250,109,342
$	64,528,512		$	75,342,566		$	272,730,345		$	146,141,811		$	276,612,284
	1,179,000			2,810,000			12,766,000			4,292,000			6,492,000
	65,707,512			78,152,566			285,496,345			150,433,811			283,104,284
	943			15,387			920			763			477
	27,728			152,680			108,537			2,048,457			11
	673,019			—			252,938			1,918,470			1,203,983
	3,728			2,997			1,560,849			83,107			23,621
	29,490			43,381			337,136			215,755			181,914
	14,491			15,812			23,481			13,351			20,667
	66,456,911			78,382,823			287,780,206			154,713,714			284,534,957
	514,816			—			1,151,887			1,753,356			189,504
	22,899			4,248			104,889			62,385			37,865
	78,022			41,810			316,021			231,584			438,320
	1,161			1,390			4,681			2,632			5,012
	73,077			61,740			112,616			181,409			108,745
	—			—			644,144			208,918			204,251
	—			—			—			95,860			—
	689,975			109,188			2,334,238			2,536,144			983,697
$	65,766,936		$	78,273,635		$	285,445,968		$	152,177,570		$	283,551,260
$	48,165		$	73,169		$	153,000		$	591,486		$	638,535
	84,866,063			70,360,329			274,710,980			112,663,520			338,732,673
	35			658,864			198,092			(652,260	)		(46,442	)
	(28,300,251	)		(7,704,839	)		(67,018,996	)		(501,354	)		(88,565,682	)
	9,152,924			14,886,112			77,402,892			40,076,178			32,792,176
$	65,766,936		$	78,273,635		$	285,445,968		$	152,177,570		$	283,551,260
	10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000
	4,816,529			7,316,926			15,299,997			59,148,640			63,853,499
$	13.65		$	10.70		$	18.66		$	2.57		$	4.44

91

WASATCH FUNDS — Statements of Assets and Liabilities (continued)

	MICRO CAP VALUE FUND			SMALL CAP GROWTH FUND			SMALL CAP VALUE FUND
Assets:
Investments, at cost
Unaffiliated issuers	$	139,995,965		$	787,375,000		$	194,209,229
Affiliated issuers*		—			19,250,345			—
Repurchase agreements		28,445,000			22,350,000			2,096,000
	$	168,440,965		$	828,975,345		$	196,305,229
Investments, at market value
Unaffiliated issuers	$	158,514,958		$	1,065,823,882		$	209,241,332
Affiliated issuers*		—			23,748,603			—
Repurchase agreements		28,445,000			22,350,000			2,096,000
		186,959,958			1,111,922,485			211,337,332
Cash		449			299			630
Foreign currency on deposit (cost of $6,651, $0, $0, $9,490, $0, $0, $0, $0, and $0, respectively)		6,684			—			—
Receivable for investment securities sold		226,868			—			2,751,397
Receivable from broker for securities sold short		—			—			—
Capital shares receivable		125,877			1,184,165			30,827
Interest and dividends receivable		126,838			449,066			229,970
Prepaid expenses and other assets		26,443			53,626			20,011
Total Assets		187,473,117			1,113,609,641			214,370,167
Liabilities:
Call options written at value (premiums of $374,128, $0, $0, $0, $0, $0, $2,229,695, $0, and $0, respectively)		449,000			—			—
Securities sold short, at value (proceeds of $0, $0, $0, $0, $0, $0, $24,430,119, $0, and $0, respectively)		—			—			—
Payable for securities purchased		662,973			—			1,836,187
Capital shares payable		97,283			1,861,685			156,082
Dividends payable to shareholders		—			—			—
Payable to Advisor		258,622			867,309			251,734
Accrued fund administration fees		3,301			19,358			3,750
Accrued expenses and other liabilities		129,375			443,654			144,997
Other payables		285,692			330,447			405,927
Total Liabilities		1,886,246			3,522,453			2,798,677
Net Assets	$	185,586,871		$	1,110,087,188		$	211,571,490
Net Assets Consist of:
Capital stock	$	780,318		$	324,234		$	685,933
Paid-in capital in excess of par		180,144,455			867,843,519			332,185,793
Undistributed net investment income (loss)		(462,295	)		(114,405	)		715,613
Undistributed net realized gain (loss) on investments and foreign currency translations		(13,035,885	)		(40,587,301	)		(136,643,068	)
Net unrealized appreciation on investments and foreign currency translations		18,160,278			282,621,141			14,627,219
Net Assets	$	185,586,871		$	1,110,087,188		$	211,571,490
Capital Stock, $.01 par value:
Authorized		10,000,000,000			10,000,000,000			10,000,000,000
Issued and outstanding		78,031,846			32,423,417			68,593,301
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE	$	2.38		$	34.24		$	3.08

* See Note 10 for information on affiliated issuers.

See Notes to Financial Statements.

92

SEPTEMBER 30, 2010

STRATEGIC INCOME FUND			ULTRA GROWTH FUND			INCOME EQUITY FUND			LONG/SHORT FUND			U.S. TREASURY FUND		INCOME FUND
$	17,465,176		$	114,916,152		$	1,453,459,435		$	252,796,833		$	185,327,036	$	127,815,370
	—			—			—			—			—		—
	1,357,000			18,309,000			34,508,000			32,403,000			1,318,000		2,980,000
$	18,822,176		$	133,225,152		$	1,487,967,435		$	285,199,833		$	186,645,036	$	130,795,370
$	18,098,323		$	159,007,215		$	1,593,837,853		$	278,381,223		$	198,937,806	$	134,066,822
	—			—			—			—			—		—
	1,357,000			18,309,000			34,508,000			32,403,000			1,318,000		2,980,000
	19,455,323			177,316,215			1,628,345,853			310,784,223			200,255,806		137,046,822
	730			612			974			491			531		320
	9,490			—			—			—			—		—
	—			974,371			—			1,635,055			—		—
	—			—			—			25,437,599			—		—
	308			766,691			1,094,405			353,503			309,871		85,682
	97,279			15,718			2,525,639			201,514			874,758		1,136,862
	12,094			35,188			135,721			25,430			21,213		19,488
	19,575,224			179,108,795			1,632,102,592			338,437,815			201,462,179		138,289,174
	—			—			—			4,172,550			—		—
	—			—			—			28,748,307			—		—
	1			88,440			6,502,612			4,242,233			—		—
	8,895			138,035			2,587,373			536,748			293,276		34,310
	3,920			—			331,089			10,700			156,953		44,198
	15,128			169,281			990,926			268,836			81,089		61,170
	350			3,003			29,212			5,449			3,576		2,473
	29,955			109,762			548,626			123,975			72,704		51,914
	—			34,693			—			74,281			—		—
	58,249			543,214			10,989,838			38,183,079			607,598		194,065
$	19,516,975		$	178,565,581		$	1,621,112,754		$	300,254,736		$	200,854,581	$	138,095,109
$	25,997		$	90,195		$	1,282,969		$	255,820		$	117,007	$	133,532
	27,300,267			174,674,261			1,545,121,117			292,186,117			176,860,428		134,727,246
	66,363			(759,055	)		(331,089	)		48,857			16,351		23,571
	(8,508,837	)		(39,496,407	)		(65,338,670	)		(11,559,405	)		10,250,025		(3,040,692	)
	633,185			44,056,587			140,378,427			19,323,347			13,610,770		6,251,452
$	19,516,975		$	178,565,581		$	1,621,112,754		$	300,254,736		$	200,854,581	$	138,095,109
	10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000			10,000,000,000		10,000,000,000
	2,599,671			9,019,499			128,296,884			25,581,974			11,700,690		13,353,212
$	7.51		$	19.80		$	12.64		$	11.74		$	17.17	$	10.34

93

WASATCH FUNDS — Statements of Operations

	CORE GROWTH FUND			EMERGING MARKETS SMALL CAP FUND			GLOBAL OPPORTUNITIES FUND
Investment Income:
Interest	$	1,852		$	1,111		$	1,014
Dividends1
Unaffiliated issuers		5,165,362			4,305,133			2,515,918
Total investment income		5,167,214			4,306,244			2,516,932
Expenses:
Investment advisory fees		3,962,235			2,618,291			3,222,553
Shareholder servicing fees		590,074			370,544			252,416
Fund administration fees		92,186			34,789			39,200
Fund accounting fees		65,283			54,732			75,992
Reports to shareholders		148,046			75,066			68,478
Custody fees		69,107			278,472			98,064
Federal and state registration fees		35,290			72,898			51,088
Legal fees		19,014			6,036			10,310
Trustees’ fees		26,787			5,122			8,907
Interest		9,034			1,645			2,811
Audit fees and other expenses		87,198			59,358			35,321
Total expenses before reimbursement		5,104,254			3,576,953			3,865,140
Reimbursement of expenses by Advisor		—			(495,910	)		(138,025	)
Net Expenses		5,104,254			3,081,043			3,727,115
Net Investment Income (Loss)		62,960			1,225,201			(1,210,183	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments and foreign currency translations
Unaffiliated issuers		995,642			7,609,300			9,887,660
Net realized gain on options written		—			—			—
Realized foreign capital gains taxes		—			(152,101	)		(38,060	)
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		54,730,781			73,583,864			25,025,655
Deferred foreign capital gains taxes		(229,117	)		(2,832,195	)		(105,898	)
Net gain on investments		55,497,306			78,208,868			34,769,357
Net Increase in Net Assets Resulting from Operations	$	55,560,266		$	79,434,069		$	33,559,174

¹Net of $49,269, $323,610, $139,873, $36,294, $11,923, $258,548, $122,772, and $66,497 in foreign withholding taxes, respectively.

See Notes to Financial Statements.

94

FOR THE YEAR ENDED SEPTEMBER  30, 2010

GLOBAL SCIENCE & TECHNOLOGY FUND			HERITAGE GROWTH FUND			INTERNATIONAL GROWTH FUND			INTERNATIONAL OPPORTUNITIES FUND			MICRO CAP FUND
$	1,131		$	230		$	570		$	903		$	671
	751,983			1,364,945			3,823,226			2,054,622			3,019,197
	753,114			1,365,175			3,823,796			2,055,525			3,019,868
	929,335			539,144			2,926,036			2,415,521			5,412,265
	163,987			170,868			290,015			423,029			264,482
	14,524			17,974			45,780			29,152			64,914
	28,786			22,695			54,907			54,175			54,892
	33,714			30,080			53,538			104,110			78,500
	23,924			9,319			151,447			137,380			63,629
	19,226			19,133			33,212			30,062			29,127
	7,228			4,344			11,106			7,617			15,670
	4,105			5,205			12,012			7,173			18,407
	1,347			1,708			3,951			2,515			6,066
	45,472			33,023			49,754			38,393			52,958
	1,271,648			853,493			3,631,758			3,249,127			6,060,910
	(57,495	)		(115,666	)		—			(446,728	)		—
	1,214,153			737,827			3,631,758			2,802,399			6,060,910
	(461,039	)		627,348			192,038			(746,874	)		(3,041,042	)
	10,226,634			2,847,249			14,150,912			15,208,761			(1,922,995	)
	—			630			—			—			—
	—			—			(393,764	)		(96,400	)		—
	2,966,542			8,005,190			48,798,984			19,388,244			41,538,066
	—			—			(644,152	)		(208,918	)		(204,251	)
	13,193,176			10,853,069			61,911,980			34,291,687			39,410,820
$	12,732,137		$	11,480,417		$	62,104,018		$	33,544,813		$	36,369,778

95

WASATCH FUNDS — Statements of Operations (continued)

	MICRO CAP VALUE FUND			SMALL CAP GROWTH FUND			SMALL CAP VALUE FUND
Investment Income:
Interest	$	2,872		$	7,490		$	688
Dividends1
Unaffiliated issuers		1,555,091			5,072,715			3,487,363
Total investment income		1,557,963			5,080,205			3,488,051
Expenses:
Investment advisory fees		3,250,692			9,481,597			3,225,725
Shareholder servicing fees		372,246			1,370,872			418,770
Fund administration fees		39,302			222,544			50,220
Fund accounting fees		44,314			141,280			44,048
Reports to shareholders		86,271			350,750			96,509
Custody fees		53,324			197,260			36,179
Federal and state registration fees		41,339			90,486			23,828
Legal fees		10,040			55,467			11,962
Trustees’ fees		9,202			57,757			14,533
Dividends on securities sold short		—			—			—
Interest		3,019			19,483			4,807
Audit fees and other expenses		40,256			83,269			49,332
Total expenses before reimbursement		3,950,005			12,070,765			3,975,913
Reimbursement of expenses by Advisor		(188,280	)		—			—
Fair Fund reimbursement		—			—			—
Net Expenses		3,761,725			12,070,765			3,975,913
Net Investment Income (Loss)		(2,203,762	)		(6,990,560	)		(487,862	)
Realized and Unrealized Gain (Loss):
Net realized gain on investments and foreign currency translations
Unaffiliated issuers		19,739,412			30,868,546			19,593,691
Net realized gain on options written		866,253			—			—
Net realized gain (loss) on short positions		—			—			—
Realized foreign capital gains taxes		—			—			—
Change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations		(799,110	)		148,904,599			6,121,502
Deferred foreign capital gains taxes		(285,692	)		(330,447	)		(405,928	)
Net gain on investments		19,520,863			179,442,698			25,309,265
Net Increase in Net Assets Resulting from Operations	$	17,317,101		$	172,452,138		$	24,821,403

¹ Net of $45,462, $138,933, $0, $7,572, $4,798, $176,645, $814, $0, and $(553) in foreign withholding taxes, respectively.

See Notes to Financial Statements.

96

FOR THE YEAR ENDED SEPTEMBER  30, 2010

STRATEGIC INCOME FUND			ULTRA GROWTH FUND			INCOME EQUITY FUND			LONG/SHORT FUND			U.S. TREASURY FUND			INCOME FUND
$	23,856		$	346		$	5,590		$	4,612		$	6,612,936		$	4,336,273
	940,019			684,042			38,337,627			4,131,629			—			177,023
	963,875			684,388			38,343,217			4,136,241			6,612,936			4,513,296
	126,217			1,575,741			13,994,494			2,621,146			766,374			690,999
	37,869			254,299			2,111,258			280,731			211,326			50,667
	4,188			29,510			363,664			55,600			35,327			29,294
	17,830			37,388			212,165			42,268			24,937			48,982
	4,245			62,664			464,437			72,431			39,686			7,013
	3,996			56,962			39,910			17,763			3,882			14,864
	18,857			28,671			131,217			49,392			57,024			23,900
	1,065			7,048			93,365			12,306			7,035			6,913
	1,195			8,080			97,701			12,110			9,881			7,981
	993			—			—			710,156			—			—
	6,108			4,958			31,617			166,699			—			—
	18,796			53,428			116,977			34,467			39,244			32,456
	241,359			2,118,749			17,656,805			4,075,069			1,194,716			913,069
	(62,205	)		—			(447,505	)		—			(40,761	)		—
	—			—			(15,191	)		(633	)		—			(9,084	)
	179,154			2,118,749			17,194,109			4,074,436			1,153,955			903,985
	784,721			(1,434,361	)		21,149,108			61,805			5,458,981			3,609,311
	495,507			12,230,959			32,788,451			7,401,409			10,365,841			940,819
	18,481			—			—			4,803,888			—			—
	375,162			—			—			(6,388,985	)		—			—
	—			—			—			—			—			—
	902,027			21,105,951			39,555,366			3,599,357			4,266,518			2,872,059
	—			(34,693	)		—			—			—			—
	1,791,177			33,302,217			72,343,817			9,415,669			14,632,359			3,812,878
$	2,575,898		$	31,867,856		$	93,492,925		$	9,477,474		$	20,091,340		$	7,422,189

97

WASATCH FUNDS — Statements of Changes in Net Assets

	CORE GROWTH FUND						EMERGING MARKETS SMALL CAP FUND
	Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
Operations:
Net investment income (loss)	$	62,960		$	948,569		$	1,225,201		$	31,806
Net realized gain (loss) on investments and foreign currency translations		995,642			(113,256,495	)		7,457,199			(19,252,248	)
Net realized gain on options written		—			—			—			—
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		54,501,664			63,460,370			70,751,669			25,172,055
Net increase (decrease) in net assets resulting from operations		55,560,266			(48,847,556	)		79,434,069			5,951,613
Dividends paid from:
Net investment income		(87,230	)		(5,739,872	)		(379,097	)		(29,720	)
Net realized gains		—			—			—			—
		(87,230	)		(5,739,872	)		(379,097	)		(29,720	)
Capital share transactions:
Shares sold		68,856,248			42,144,413			384,572,278			28,161,403
Shares issued to holders in reinvestment of dividends		84,321			5,588,262			369,142			28,998
Shares redeemed		(115,743,132	)		(229,016,912	)		(68,120,691	)		(19,915,682	)
Redemption fees		22,210			51,587			386,082			116,524
Net increase (decrease)		(46,780,353	)		(181,232,650	)		317,206,811			8,391,243
Total increase (decrease) in net assets		8,692,683			(235,820,078	)		396,261,783			14,313,136
Net assets:
Beginning of period		409,949,030			645,769,108			50,489,372			36,176,236
End of period	$	418,641,713		$	409,949,030		$	446,751,155		$	50,489,372
Undistributed net investment income (loss) included in net assets at end of period	$	2,636,473		$	2,481,460		$	(117,824	)	$	208,395
Capital share transactions — shares:
Shares sold		2,422,565			2,140,091			191,206,047			23,140,526
Shares issued to holders in reinvestment of dividends		3,122			301,417			210,938			34,937
Shares redeemed		(4,288,991	)		(11,075,467	)		(35,258,335	)		(20,231,688	)
Net increase (decrease) in shares outstanding		(1,863,304	)		(8,633,959	)		156,158,650			2,943,775

¹Fund inception date was November 17, 2008.

See Notes to Financial Statements.

98

SEPTEMBER 30, 2010

GLOBAL OPPORTUNITIES FUND						GLOBAL SCIENCE & TECHNOLOGY FUND						HERITAGE GROWTH FUND
Year Ended September 30, 2010			Period Ended September 30, 20091			Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
$	(1,210,183	)	$	(317,456	)	$	(461,039	)	$	(450,042	)	$	627,348		$	487,670
	9,849,600			3,153,157			10,226,634			(31,796,292	)		2,847,249			(10,184,195	)
	—			—			—			—			630			100,213
	24,919,757			26,768,769			2,966,542			29,182,459			8,005,190			7,714,994
	33,559,174			29,604,470			12,732,137			(3,063,875	)		11,480,417			(1,881,318	)
	(261,705	)		—			(79,109	)		—			(499,403	)		(167,143	)
	(3,194,663	)		—			—			—			—			(220,964	)
	(3,456,368	)		—			(79,109	)		—			(499,403	)		(388,107	)
	110,079,205			90,898,578			6,840,235			5,166,479			7,721,063			7,087,524
	3,250,108			—			77,070			—			482,444			374,358
	(25,925,621	)		(3,124,823	)		(13,346,871	)		(24,729,028	)		(18,106,546	)		(23,413,598	)
	12,260			6,824			3,581			2,298			1,849			915
	87,415,952			87,780,579			(6,425,985	)		(19,560,251	)		(9,901,190	)		(15,950,801	)
	117,518,758			117,385,049			6,227,043			(22,624,126	)		1,079,824			(18,220,226	)
	117,385,049			—			59,539,893			82,164,019			77,193,811			95,414,037
$	234,903,807		$	117,385,049		$	65,766,936		$	59,539,893		$	78,273,635		$	77,193,811
$	(816,038	)	$	(352,634	)	$	35		$	(367,611	)	$	658,864		$	499,398
	30,762,192			35,880,124			551,173			593,548			790,897			933,157
	947,553			—			6,565			—			50,677			55,297
	(7,268,106	)		(1,129,075	)		(1,096,838	)		(3,209,651	)		(1,846,641	)		(3,266,118	)
	24,441,639			34,751,049			(539,100	)		(2,616,103	)		(1,005,067	)		(2,277,664	)

99

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

	INTERNATIONAL GROWTH FUND						INTERNATIONAL OPPORTUNITIES FUND
	Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
Operations:
Net investment income (loss)	$	192,038		$	36,890		$	(746,874	)	$	(166,658	)
Net realized gain (loss) on investments and foreign currency translations		13,757,148			(54,621,834	)		15,112,361			(11,970,363	)
Net realized gain on options written		—			—			—			—
Net realized loss on short positions		—			—			—			—
Change in unrealized appreciation (depreciation) on investments, options and foreign currency translations		48,154,832			66,274,043			19,179,326			33,744,742
Net increase (decrease) in net assets resulting from operations		62,104,018			11,689,099			33,544,813			21,607,721
Dividends paid from:
Net investment income		—			(466,090	)		(1,049,066	)		(168,034	)
Net realized gains		—			—			—			—
		—			(466,090	)		(1,049,066	)		(168,034	)
Capital share transactions:
Shares sold		92,481,514			23,024,110			56,143,842			31,749,891
Shares issued to holders in reinvestment of dividends		—			447,546			1,032,263			163,313
Shares redeemed		(42,375,378	)		(56,255,429	)		(31,367,310	)		(15,224,838	)
Redemption fees		10,085			6,574			17,074			37,390
Net increase (decrease)		50,116,221			(32,777,199	)		25,825,869			16,725,756
Total increase (decrease) in net assets		112,220,239			(21,554,190	)		58,321,616			38,165,443
Net assets:
Beginning of period		173,225,729			194,779,919			93,855,954			55,690,511
End of period	$	285,445,968		$	173,225,729		$	152,177,570		$	93,855,954
Undistributed net investment income (loss) included in net assets at end of period	$	198,092		$	(815,682	)	$	(652,260	)	$	(726,819	)
Capital share transactions — shares:
Shares sold		5,611,720			2,074,040			25,386,991			24,187,957
Shares issued to holders in reinvestment of dividends		—			50,513			491,554			133,863
Shares redeemed		(2,767,634	)		(6,128,701	)		(14,333,524	)		(11,518,529	)
Net increase (decrease) in shares outstanding		2,844,086			(4,004,148	)		11,545,021			12,803,291

See Notes to Financial Statements.

100

SEPTEMBER 30, 2010

MICRO CAP FUND						MICRO CAP VALUE FUND						SMALL CAP GROWTH FUND
Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
$	(3,041,042	)	$	(2,204,100	)	$	(2,203,762	)	$	(946,261	)	$	(6,990,560	)	$	(3,485,220	)
	(1,922,995	)		(70,477,941	)		19,739,412			(22,748,259	)		30,868,546			(66,580,850	)
	—			—			866,253			1,864,290			—			—
	—			—			—			(106,661	)		—			—
	41,333,815			35,754,956			(1,084,802	)		30,662,023			148,574,152			108,446,873
	36,369,778			(36,927,085	)		17,317,101			8,725,132			172,452,138			38,380,803
	—			(777,904	)		(569,692	)		—			—			—
	—			—			—			—			—			(1,539,215	)
	—			(777,904	)		(569,692	)		—			—			(1,539,215	)
	23,412,191			20,400,999			100,096,662			37,751,896			328,975,735			230,991,699
	—			743,955			551,439			—			—			1,498,523
	(48,782,919	)		(70,303,414	)		(47,056,986	)		(29,184,165	)		(200,748,783	)		(195,651,102	)
	14,832			7,314			31,954			11,986			90,163			91,021
	(25,355,896	)		(49,151,146	)		53,623,069			8,579,717			128,317,115			36,930,141
	11,013,882			(86,856,135	)		70,370,478			17,304,849			300,769,253			73,771,729
	272,537,378			359,393,513			115,216,393			97,911,544			809,317,935			735,546,206
$	283,551,260		$	272,537,378		$	185,586,871		$	115,216,393		$	1,110,087,188		$	809,317,935
$	(46,442	)	$	(15,825	)	$	(462,295	)	$	(218,261	)	$	(114,405	)	$	(70,280	)
	5,634,138			6,736,914			43,931,594			21,422,418			10,668,620			9,654,965
	—			265,698			252,953			—			—			73,746
	(11,800,279	)		(23,747,004	)		(20,736,580	)		(21,193,792	)		(6,554,978	)		(9,177,145	)
	(6,166,141	)		(16,744,392	)		23,447,967			228,626			4,113,642			551,566

101

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

	SMALL CAP VALUE FUND						STRATEGIC INCOME FUND
	Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
Operations:
Net investment income (loss)	$	(487,862	)	$	(624,791	)	$	784,721		$	775,469
Net realized gain (loss) on investments and foreign currency translations		19,593,691			(116,514,917	)		495,507			(7,385,813	)
Net realized gain on options written		—			908,649			18,481			126,196
Net realized gain (loss) on short positions		—			—			375,162			(86,106	)
Change in unrealized appreciation (depreciation) on investments and foreign currency translations		5,715,574			73,490,647			902,027			4,615,332
Net increase (decrease) in net assets resulting from operations		24,821,403			(42,740,412	)		2,575,898			(1,954,922	)
Dividends paid from:
Net investment income		—			—			(678,070	)		(784,968	)
Net realized gains		—			—			—			—
		—			—			(678,070	)		(784,968	)
Capital share transactions:
Shares sold		19,624,422			32,790,353			2,287,938			1,068,106
Shares issued to holders in reinvestment of dividends		—			—			660,289			767,924
Shares redeemed		(51,243,676	)		(108,614,115	)		(3,039,434	)		(3,276,167	)
Redemption fees		11,670			7,697			307			894
Net increase (decrease)		(31,607,584	)		(75,816,065	)		(90,900	)		(1,439,243	)
Total increase (decrease) in net assets		(6,786,181	)		(118,556,477	)		1,806,928			(4,179,133	)
Net assets:
Beginning of period		218,357,671			336,914,148			17,710,047			21,889,180
End of period	$	211,571,490		$	218,357,671		$	19,516,975		$	17,710,047
Undistributed net investment income (loss) included in net assets at end of period	$	715,613		$	741,563		$	66,363		$	179,094
Capital share transactions — shares:
Shares sold		6,683,775			15,948,161			320,791			174,614
Shares issued to holders in reinvestment of dividends		—			—			93,068			136,331
Shares redeemed		(17,525,168	)		(56,145,733	)		(429,440	)		(567,847	)
Net increase (decrease) in shares outstanding		(10,841,393	)		(40,197,572	)		(15,581	)		(256,902	)

See Notes to Financial Statements.

102

SEPTEMBER 30, 2010

ULTRA GROWTH FUND						INCOME EQUITY FUND						LONG/SHORT FUND
Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
$	(1,434,361	)	$	(1,104,391	)	$	21,149,108		$	19,219,640		$	61,805		$	254,370
	12,230,959			(48,814,746	)		32,788,451			(96,935,144	)		7,401,409			(21,773,280	)
	—			—			—			—			4,803,888			1,315,878
	—			497,763			—			—			(6,388,985	)		4,989,019
	21,071,258			41,929,072			39,555,366			140,074,504			3,599,357			21,481,141
	31,867,856			(7,492,302	)		93,492,925			62,359,000			9,477,474			6,267,128
	—			—			(21,589,760	)		(19,218,020	)		(98,009	)		(556,325	)
	—			—			—			—			—			(1,579,189	)
	—			—			(21,589,760	)		(19,218,020	)		(98,009	)		(2,135,514	)
	55,395,722			12,125,756			559,640,781			874,385,368			218,506,133			76,153,872
	—			—			19,988,994			17,197,096			86,180			1,826,247
	(29,986,296	)		(27,365,051	)		(415,969,989	)		(329,662,507	)		(73,900,820	)		(58,109,974	)
	4,063			12,255			42,087			62,658			56,794			11,260
	25,413,489			(15,227,040	)		163,701,873			561,982,615			144,748,287			19,881,405
	57,281,345			(22,719,342	)		235,605,038			605,123,595			154,127,752			24,013,019
	121,284,236			144,003,578			1,385,507,716			780,384,121			146,126,984			122,113,965
$	178,565,581		$	121,284,236		$	1,621,112,754		$	1,385,507,716		$	300,254,736		$	146,126,984
$	(759,055	)	$	(398,577	)	$	(331,089	)	$	123,618		$	48,857		$	97,087
	3,045,498			995,533			44,453,574			85,935,790			18,930,449			7,924,340
	—			—			1,621,951			1,663,444			7,406			209,877
	(1,773,172	)		(2,387,038	)		(33,497,030	)		(32,224,101	)		(6,490,271	)		(6,298,177	)
	1,272,326			(1,391,505	)		12,578,495			55,375,133			12,447,584			1,836,040

103

WASATCH FUNDS — Statements of Changes in Net Assets (continued) SEPTEMBER 30, 2010

	U.S. TREASURY FUND						INCOME FUND
	Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2010			Year Ended September 30, 2009
Operations:
Net investment income	$	5,458,981		$	5,036,394		$	3,609,311		$	3,368,363
Net realized gain (loss) on investments and foreign currency translations		10,365,841			9,178,548			940,819			(263,209	)
Change in unrealized appreciation (depreciation) on investments and options written		4,266,518			2,499,959			2,872,059			4,892,799
Net increase in net assets resulting from operations		20,091,340			16,714,901			7,422,189			7,997,953
Dividends paid from:
Net investment income		(5,454,808	)		(5,022,309	)		(3,572,685	)		(3,433,282	)
Net realized gains		(4,576,837	)		—			—			—
		(10,031,645	)		(5,022,309	)		(3,572,685	)		(3,433,282	)
Capital share transactions:
Shares sold		91,924,206			148,148,779			45,774,175			50,831,732
Shares issued to holders in reinvestment of dividends		9,249,903			4,584,510			2,972,350			2,876,487
Shares redeemed		(64,561,485	)		(132,178,263	)		(29,000,964	)		(32,859,256	)
Redemption fees		83,717			431,042			3,655			1,844
Net increase		36,696,341			20,986,068			19,749,216			20,850,807
Total increase in net assets		46,756,036			32,678,660			23,598,720			25,415,478
Net assets:
Beginning of period		154,098,545			121,419,885			114,496,389			89,080,911
End of period	$	200,854,581		$	154,098,545		$	138,095,109		$	114,496,389
Undistributed net investment income (loss) included in net assets at end of period	$	16,351		$	14,138		$	23,571		$	(13,055	)
Capital share transactions — shares:
Shares sold		5,800,234			8,980,714			4,502,902			5,205,427
Shares issued to holders in reinvestment of dividends		614,469			266,951			292,433			294,467
Shares redeemed		(4,173,981	)		(7,910,125	)		(2,850,794	)		(3,381,592	)
Net increase in shares outstanding		2,240,722			1,337,540			1,944,541			2,118,302

See Notes to Financial Statements.

104

WASATCH FUNDS — Financial Highlights SEPTEMBER 30, 2010

CORE GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	25.88		$	26.38		$	42.98		$	41.08		$	43.92
Income (loss) from investment operations:
Net investment income (loss)		0.03			—	1		0.19			(0.05	)		0.17
Net realized and unrealized gains (losses) on investments		4.05			(0.23	)		(8.98	)		5.65			0.90
Total from investment operations		4.08			(0.23	)		(8.79	)		5.60			1.07
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.01	)		(0.27	)		—			(0.14	)		(0.63	)
Distributions from net realized gains		—			—			(7.81	)		(3.56	)		(3.28	)
Total distributions		(0.01	)		(0.27	)		(7.81	)		(3.70	)		(3.91	)
Net asset value, end of period	$	29.95		$	25.88		$	26.38		$	42.98		$	41.08
Total return		15.75%			(0.45)%			(24.82)%			14.28%			2.46%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	418,642		$	409,949		$	645,769		$	1,250,618		$	1,381,027
Ratio of expenses to average net assets		1.29%	2		1.34%			1.21%			1.18%			1.17%
Ratio of net investment income (loss) to average net assets		0.02%			0.24%			0.52%			(0.09)%			0.38%
Portfolio turnover rate		19%			30%			44%			54%			42%
EMERGING MARKETS SMALL CAP FUND	Year Ended September 30						Period Ended September 30
(for a share outstanding throughout each period)	2010			2009			20083
Net asset value, beginning of period	$	1.57		$	1.24		$	2.00
Income (loss) from investment operations:
Net investment income		0.01			—	1		—	1
Net realized and unrealized gains (losses) on investments		0.80			0.33			(0.76	)
Total from investment operations		0.81			0.33			(0.76	)
Redemption fees (see Note 2)		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.01	)		—	1		—	1
Total distributions		(0.01	)		—	1		—	1
Net asset value, end of period	$	2.37		$	1.57		$	1.24
Total return		51.69%			26.80%			(37.88)%	4
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	446,751		$	50,489		$	36,176
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.06%	5		2.10%			2.10%	6
Before waivers and reimbursements		2.39%	5		3.03%			2.67%	6
Ratio of net investment income (loss) to average net assets:
Net of waivers and reimbursements		0.82%			0.12%			0.27%	6
Before waivers and reimbursements		0.49%			(0.81)%			(0.29)%	6
Portfolio turnover rate		23%			78%			38%	4

¹ Represents amounts less than $.005 per share.

² Includes extraordinary expenses of 0.01% (see Note 9).

³ Fund inception date was October 1, 2007.

⁴ Not annualized for periods less than one year.

⁵ Includes extraordinary expenses of less than 0.01% (see Note 9).

⁶ Annualized.

See Notes to Financial Statements.

105

WASATCH FUNDS — Financial Highlights (continued)

GLOBAL OPPORTUNITIES FUND	Year Ended September 30			Period Ended September 30
(for a share outstanding throughout each period)	2010			20091
Net asset value, beginning of period	$	3.38		$	2.00
Income (loss) from investment operations:
Net investment loss		(0.02	)		(0.01	)
Net realized and unrealized gains on investments		0.70			1.39
Total from investment operations		0.68			1.38
Redemption fees (see Note 2)		—	2		—	2
Less distributions:
Dividends from net investment income		(0.01	)		—
Distributions from net realized gains		(0.08	)		—
Total distributions		(0.09	)		—
Net asset value, end of period	$	3.97		$	3.38
Total return		20.41%			69.00%	3
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	234,904		$	117,385
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.25%	4		2.25%	5
Before waivers and reimbursements		2.33%	4		2.61%	5
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(0.73)%			(0.67)%	5
Before waivers and reimbursements		(0.81)%			(1.03)%	5
Portfolio turnover rate		23%			22%	3
GLOBAL SCIENCE & TECHNOLOGY FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	11.12		$	10.31		$	17.69		$	13.97		$	12.98
Income (loss) from investment operations:
Net investment loss		(0.10	)		(0.12	)		(0.25	)		(0.12	)		(0.14	)
Net realized and unrealized gains (losses) on investments		2.65			0.93			(5.65	)		4.43			1.40
Total from investment operations		2.55			0.81			(5.90	)		4.31			1.26
Redemption fees (see Note 2)		—	2		—	2		—	2		—	2		—	2
Less distributions:
Dividends from net investment income		(0.02	)		—			—			—			—
Distributions from net realized gains		—			—			(1.48	)		(0.59	)		(0.27	)
Total distributions		(0.02	)		—			(1.48	)		(0.59	)		(0.27	)
Net asset value, end of period	$	13.65		$	11.12		$	10.31		$	17.69		$	13.97
Total return		22.91%			7.86%			(36.07)%			31.63%			9.81%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	65,767		$	59,540		$	82,164		$	204,142		$	126,359
Ratio of expenses to average net assets:
Net of waivers and reimbursements		1.96%	6		1.95%			1.92%			1.85%			1.94%
Before waivers and reimbursements		2.05%	6		2.14%			1.92%			1.85%			1.94%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(0.74)%			(0.88)%			(1.24)%			(0.97)%			(1.15)%
Before waivers and reimbursements		(0.83)%			(1.07)%			(1.24)%			(0.97)%			(1.15)%
Portfolio turnover rate		74%			41%			89%			78%			58%

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 Includes extraordinary expenses of less than 0.01% (see Note 9).

⁵ Annualized.

⁶ Includes extraordinary expenses of 0.01% (see Note 9).

See Notes to Financial Statements.

106

SEPTEMBER 30, 2010

HERITAGE GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	9.28		$	9.00		$	12.57		$	11.40		$	11.43
Income (loss) from investment operations:
Net investment income (loss)		0.09			0.06			0.06			(0.01	)		—	1
Net realized and unrealized gains (losses) on investments		1.39			0.26			(2.57	)		1.53			0.28
Total from investment operations		1.48			0.32			(2.51	)		1.52			0.28
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.06	)		(0.02	)		—			—	1		(0.01	)
Distributions from net realized gains		—			(0.02	)		(1.06	)		(0.35	)		(0.30	)
Total distributions		(0.06	)		(0.04	)		(1.06	)		(0.35	)		(0.31	)
Net asset value, end of period	$	10.70		$	9.28		$	9.00		$	12.57		$	11.40
Total return		16.06%			3.74%			(21.54)%			13.59%			2.46%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	78,274		$	77,194		$	95,414		$	208,918		$	244,380
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.96%	2		0.95%			0.95%			0.95%			0.95%
Before waivers and reimbursements		1.11%	2		1.21%			1.01%			0.95%			0.95%
Ratio of net investment income (loss) to average net assets:
Net of waivers and reimbursements		0.81%			0.74%			0.44%			(0.06)%			0.01%
Before waivers and reimbursements		0.66%			0.48%			0.38%			(0.06)%			0.01%
Portfolio turnover rate		36%			33%			48%			56%			54%
INTERNATIONAL GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	13.91		$	11.83		$	24.42		$	21.83		$	18.50
Income (loss) from investment operations:
Net investment income (loss)		0.02			(0.13	)		(0.28	)		0.03			(0.09	)
Net realized and unrealized gains (losses) on investments		4.73			2.24			(9.19	)		6.61			3.42
Total from investment operations		4.75			2.11			(9.47	)		6.64			3.33
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
Total distributions		—			(0.03	)		(3.12	)		(4.05	)		—	1
Net asset value, end of period	$	18.66		$	13.91		$	11.83		$	24.42		$	21.83
Total return		34.15%			18.03%			(44.01)%			34.02%			18.00%	3
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	285,446		$	173,226		$	194,780		$	534,903		$	383,135
Ratio of expenses to average net assets		1.86%	4		1.94%			1.83%			1.76%			1.78%
Ratio of net investment income (loss) to average net assets		0.10%			0.03%			(0.15)%			0.11%			(0.42)%
Portfolio turnover rate		44%			56%			44%			60%			64%

¹ Represents amounts less than $.005 per share.

² Includes extraordinary expenses of 0.01% (see Note 9).

³ 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.

⁴ Includes extraordinary expenses of less than 0.01% (see Note 9).

See Notes to Financial Statements.

107

WASATCH FUNDS — Financial Highlights (continued)

INTERNATIONAL OPPORTUNITIES FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	1.97		$	1.60		$	3.65		$	2.71		$	2.19
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		0.01			0.07			(0.01	)		(0.01	)
Net realized and unrealized gains (losses) on investments		0.63			0.36			(1.45	)		1.13			0.53
Total from investment operations		0.62			0.37			(1.38	)		1.12			0.52
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.02	)		—	1		(0.14	)		—	1		—
Distributions from net realized gains		—			—			(0.53	)		(0.18	)		—
Total distributions		(0.02	)		—			(0.67	)		(0.18	)		—
Net asset value, end of period	$	2.57		$	1.97		$	1.60		$	3.65		$	2.71
Total return		31.71%			23.60%			(45.33)%			42.73%			23.74%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	152,178		$	93,856		$	55,691		$	56,433		$	36,839
Ratio of expenses to average net assets:
Net of waivers and reimbursements		2.26%	2		2.26%	3		2.25%			2.25%			2.25%
Before waivers and reimbursements		2.62%	2		2.79%	3		2.59%			2.51%			2.62%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(0.60)%			(0.28)%			(0.09)%			(0.18)%			(0.29)%
Before waivers and reimbursements		(0.96)%			(0.81)%			(0.43)%			(0.44)%			(0.66)%
Portfolio turnover rate		51%			69%			63%			54%			43%
MICRO CAP FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	3.89		$	4.14		$	7.19		$	6.79		$	7.58
Income (loss) from investment operations:
Net investment loss		(0.05	)		(0.03	)		(0.07	)		(0.09	)		(0.10	)
Net realized and unrealized gains (losses) on investments		0.60			(0.21	)		(1.81	)		1.29			0.65
Total from investment operations		0.55			(0.24	)		(1.88	)		1.20			0.55
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	)
Total distributions		—			(0.01	)		(1.17	)		(0.80	)		(1.34	)
Net asset value, end of period	$	4.44		$	3.89		$	4.14		$	7.19		$	6.79
Total return		14.14%			(5.70)%			(30.46)%			18.72%			8.51%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	283,551		$	272,537		$	359,394		$	631,417		$	583,901
Ratio of expenses to average net assets		2.18%	4		2.24%			2.16%			2.14%			2.14%
Ratio of net investment loss to average net assets		(1.10)%			(0.96)%			(1.26)%			(1.25)%			(1.39)%
Portfolio turnover rate		34%			46%			54%			48%			46%

¹ Represents amounts less than $.005 per share.

² Includes extraordinary expenses of 0.01% (see Note 9).

³ Includes interest expense of 0.01%.

⁴ Includes interest expense of less than 0.01%.

See Notes to Financial Statements.

108

SEPTEMBER 30, 2010

MICRO CAP VALUE FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	2.11		$	1.80		$	2.98		$	2.93		$	2.72
Income (loss) from investment operations:
Net investment loss		(0.02	)		(0.02	)		(0.02	)		(0.03	)		(0.03	)
Net realized and unrealized gains (losses) on investments		0.30			0.33			(0.75	)		0.64			0.50
Total from investment operations		0.28			0.31			(0.77	)		0.61			0.47
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Dividends from net investment income		(0.01	)		—			—			—			—
Distributions from net realized gains		—			—			(0.41	)		(0.56	)		(0.26	)
Total distributions		(0.01	)		—			(0.41	)		(0.56	)		(0.26	)
Net asset value, end of period	$	2.38		$	2.11		$	1.80		$	2.98		$	2.93
Total return		13.26%			17.22%			(29.67)%			22.84%			18.89%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	185,587		$	115,216		$	97,912		$	120,039		$	95,508
Ratio of expenses to average net assets (including dividend payments for securities sold short):
Net of waivers and reimbursements		2.26%	2		2.26%			2.25%			2.25%			2.25%
Before waivers and reimbursements		2.37%	2		2.46%			2.35%			2.30%			2.33%
Ratio of expenses to average net assets (excluding dividend payments for securities sold short):
Net of waivers and reimbursements		2.26%	2		2.25%			2.25%			2.25%			2.25%
Before waivers and reimbursements		2.37%	2		2.45%			2.35%			2.30%			2.33%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(1.32)%			(1.36)%			(1.21)%			(1.06)%			(0.99)%
Before waivers and reimbursements		(1.43)%			(1.56)%			(1.31)%			(1.11)%			(1.07)%
Portfolio turnover rate		88%			145%			144%			105%			95%
SMALL CAP GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	28.59		$	26.50		$	40.10		$	36.99		$	41.23
Income (loss) from investment operations:
Net investment loss		(0.22	)		(0.12	)		(0.16	)		(0.25	)		(0.26	)
Net realized and unrealized gains (losses) on investments		5.87			2.27			(8.85	)		6.28			0.84
Total from investment operations		5.65			2.15			(9.01	)		6.03			0.58
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	)
Total distributions		—			(0.06	)		(4.59	)		(2.92	)		(4.82	)
Net asset value, end of period	$	34.24		$	28.59		$	26.50		$	40.10		$	36.99
Total return		19.76%			8.20%			(25.42)%			16.94%			1.40%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	1,110,087		$	809,318		$	735,546		$	1,075,433		$	1,234,978
Ratio of expenses to average net assets		1.27%	3		1.29%			1.21%			1.19%			1.18%	4
Ratio of net investment loss to average net assets:		(0.74)%			(0.60)%			(0.47)%			(0.52)%			(0.64)%
Portfolio turnover rate		17%			52%			51%			43%			41%

¹ Represents amounts less than $.005 per share.

² Includes extraordinary expenses of 0.01% (see Note 9).

³ Includes extraordinary expenses of less than 0.01% (see Note 9).

⁴ 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%.

See Notes to Financial Statements.

109

WASATCH FUNDS — Financial Highlights (continued)

SMALL CAP VALUE FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	2.75		$	2.82		$	5.22		$	5.29		$	5.67
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.01	)		0.01			0.01			0.05
Net realized and unrealized gains (losses) on investments		0.34			(0.06	)		(1.11	)		0.67			0.36
Total from investment operations		0.33			(0.07	)		(1.10	)		0.68			0.41
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	)
Total distributions		—			—			(1.30	)		(0.75	)		(0.79	)
Net asset value, end of period	$	3.08		$	2.75		$	2.82		$	5.22		$	5.29
Total return		12.00%			(2.48)%			(26.26)%			13.32%			7.88%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	211,571		$	218,358		$	336,914		$	660,637		$	664,625
Ratio of expenses to average net assets		1.85%	2		1.92%			1.76%			1.69%			1.68%
Ratio of net investment income (loss) to average net assets		(0.23)%			(0.33)%			0.15%			0.18%			0.81%
Portfolio turnover rate		62%			89%			78%			84%			40%
STRATEGIC INCOME FUND	Year or Period Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			20063
Net asset value, beginning of period	$	6.77		$	7.62		$	11.00		$	10.48		$	10.00
Income (loss) from investment operations:
Net investment income		0.31			0.29			0.55			0.48			0.31
Net realized and unrealized gains (losses) on investments		0.70			(0.85	)		(2.29	)		0.54			0.44
Total from investment operations		1.01			(0.56	)		(1.74	)		1.02			0.75
Redemption fees (see Note 2)		—	1		—	1		—	1		0.01			—	1
Less distributions:
Dividends from net investment income		(0.27	)		(0.29	)		(0.50	)		(0.47	)		(0.27	)
Distributions from net realized gains		—			—			(1.14	)		(0.04	)		—
Total distributions		(0.27	)		(0.29	)		(1.64	)		(0.51	)		(0.27	)
Net asset value, end of period	$	7.51		$	6.77		$	7.62		$	11.00		$	10.48
Total return		15.18%			(6.49)%			(18.17)%			9.77%			7.58%	4
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	19,517		$	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		0.99%	5		1.05%			0.97%			1.05%			0.95%	6
Before waivers and reimbursements		1.33%	5		1.71%			1.46%			1.57%			2.66%	6
Ratio of expenses to average net assets (excluding interest expense and dividend payments for securities sold short):
Net of waivers and reimbursements		0.95%	5		0.95%			0.95%			0.95%			0.95%	6
Before waivers and reimbursements		1.29%	5		1.61%			1.44%			1.47%			2.66%	6
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		4.35%			4.93%			5.96%			4.14%			5.40%	6
Before waivers and reimbursements		4.01%			4.27%			5.47%			3.62%			3.69%	6
Portfolio turnover rate		73%			84%			81%			86%			14%	4

¹ Represents amounts less than $.005 per share.

² Includes extraordinary expenses of 0.01% (see Note 9).

³ Fund inception date was February 1, 2006.

⁴ Not annualized for periods less than one year.

⁵ Includes extraordinary expenses of less than 0.01% (see Note 9).

⁶ Annualized.

See Notes to Financial Statements.

110

SEPTEMBER 30, 2010

ULTRA GROWTH FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	15.66		$	15.76		$	27.78		$	24.09		$	27.98
Income (loss) from investment operations:
Net investment loss		(0.15	)		(0.14	)		(0.22	)		(0.33	)		(0.34	)
Net realized and unrealized gains (losses) on investments		4.29			0.04			(8.28	)		5.80			0.23
Net increase from payment by affiliate		—			—			—			—			—	1
Total from investment operations		4.14			(0.10	)		(8.50	)		5.47			(0.11	)
Redemption fees (see Note 2)		—	1		—	1		—	1		—	1		—	1
Less distributions:
Distributions from net realized gains		—			—			(3.52	)		(1.78	)		(3.78	)
Total distributions		—			—			(3.52	)		(1.78	)		(3.78	)
Net asset value, end of period	$	19.80		$	15.66		$	15.76		$	27.78		$	24.09
Total return		26.44%			(0.63)%			(35.09)%			23.80%			(0.48)%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	178,566		$	121,284		$	144,004		$	268,633		$	306,406
Ratio of expenses to average net assets:
Net of waivers and reimbursements		1.68%	2		1.75%			1.53%			1.49%			1.48%	3
Before waivers and reimbursements		1.68%	2		1.77%			1.53%			1.49%			1.48%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements		(1.14)%			(1.12)%			(0.93)%			(1.12)%			(1.19)%
Before waivers and reimbursements		(1.14)%			(1.14)%			(0.93)%			(1.12)%			(1.19)%
Portfolio turnover rate		45%			64%			84%			55%			76%
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)	2010			2009			20084			2008			2007			2006
Net asset value, beginning of period	$	11.97		$	12.93		$	14.44		$	14.80		$	14.14		$	13.61
Income (loss) from investment operations:
Net investment income		0.17			0.20			0.14	5		0.21			0.22			0.17
Net realized and unrealized gains (losses) on investments		0.67			(0.96	)		(1.52	)		0.31			1.66			2.10
Total from investment operations		0.84			(0.76	)		(1.38	)		0.52			1.88			2.27
Redemption fees (see Note 2)		—	1		—	1		—			—			—			—
Less distributions:
Dividends from net investment income		(0.17	)		(0.20	)		(0.13	)		(0.21	)		(0.21	)		(0.18	)
Distributions from net realized gains		—			—			—			(0.67	)		(1.01	)		(1.56	)
Total distributions		(0.17	)		(0.20	)		(0.13	)		(0.88	)		(1.22	)		(1.74	)
Net asset value, end of period	$	12.64		$	11.97		$	12.93		$	14.44		$	14.80		$	14.14
Total return		7.07%			(5.63)%			(9.65)%6			3.22%			13.69%			17.72%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	1,621,113		$	1,385,508		$	780,384		$	447,674		$	167,133		$	129,508
Ratio of expenses to average net assets:
Net of waivers and reimbursements		1.11%	2		1.10%			1.04%	7		1.13%			1.15%			1.19%
Before waivers and reimbursements		1.14%	2		1.22%			1.29%	7		1.38%			1.40%			1.45%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		1.36%			1.93%			1.99%	7		1.43%			1.52%			1.25%
Before waivers and reimbursements		1.33%			1.81%			1.74%	7		1.18%			1.27%			0.99%
Portfolio turnover rate		17%			16%			5%	6		36%			26%			37%

¹ Represents amounts less than $.005 per share.

² Includes extraordinary expenses of 0.01% (see Note 9).

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

⁵ Average shares method used in calculation.

⁶ Not annualized for periods less than one year.

⁷ Annualized.

See Notes to Financial Statements.

111

WASATCH FUNDS — Financial Highlights (continued)

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)	2010			2009			20081			2008			2007			2006
Net asset value, beginning of period	$	11.13		$	10.81		$	11.27		$	11.59		$	11.21		$	10.69
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		0.02			0.05	2		0.27			0.26			0.21
Net realized and unrealized gains (losses) on investments		0.62			0.50			(0.46	)		0.02			0.90			0.71
Total from investment operations		0.61			0.52			(0.41	)		0.29			1.16			0.92
Redemption fees (see Note 2)		—	3		—	3		—			—			—			—
Less distributions:
Dividends from net investment income		—	3		(0.05	)		(0.05	)		(0.28	)		(0.28	)		(0.20	)
Distributions from net realized gains		—			(0.15	)		—			(0.33	)		(0.50	)		(0.20	)
Total distributions		—	3		(0.20	)		(0.05	)		(0.61	)		(0.78	)		(0.40	)
Net asset value, end of period	$	11.74		$	11.13		$	10.81		$	11.27		$	11.59		$	11.21
Total return		5.52%			5.35%			(3.66)%	4		2.34%			10.44%			8.80%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	300,255		$	146,127		$	122,114		$	87,410		$	53,894		$	29,831
Ratio of expenses to average net assets (including interest
expense and dividend payments for securities sold short):
Net of waivers and reimbursements		1.71%	5		1.91%			1.77%	6		1.75%			1.84%			1.72%
Before waivers and reimbursements		1.71%	5		1.96%			2.02%	6		2.00%			2.09%			1.98%
Ratio of expenses to average net assets (excluding interest
expense and dividend payments for securities sold short):
Net of waivers and reimbursements		1.34%	5		1.47%			1.46%	6		1.57%			1.56%			1.63%
Before waivers and reimbursements		1.34%	5		1.52%			1.71%	6		1.82%			1.81%			1.89%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		0.03%			0.24%			0.95%	6		2.25%			2.40%			1.98%
Before waivers and reimbursements		0.03%			0.19%			0.70%	6		2.00%			2.15%			1.72%
Portfolio turnover rate		60%			167%			71%	4		179%			172%			123%
U.S. TREASURY FUND	Year Ended September 30
(for a share outstanding throughout each period)	2010			2009			2008			2007			2006
Net asset value, beginning of period	$	16.29		$	14.95		$	13.84		$	14.12		$	14.68
Income (loss) from investment operations:
Net investment income		0.54			0.55			0.58			0.64			0.39
Net realized and unrealized gains (losses) on investments		1.35			1.29			1.10			(0.29	)		(0.24	)
Total from investment operations		1.89			1.84			1.68			0.35			0.15
Redemption fees (see Note 2)		0.01			0.05			0.01			0.01			0.01
Less distributions:
Dividends from net investment income		(0.54	)		(0.55	)		(0.58	)		(0.64	)		(0.72	)
Distributions from net realized gains		(0.48	)		—			—			—			—
Total distributions		(1.02	)		(0.55	)		(0.58	)		(0.64	)		(0.72	)
Net asset value, end of period	$	17.17		$	16.29		$	14.95		$	13.84		$	14.12
Total return		12.65%			12.49%			12.33%			2.68%			1.21%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	200,855		$	154,099		$	121,240		$	115,788		$	204,994
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.75%	5		0.75%			0.74%			0.71%			0.72%
Before waivers and reimbursements		0.78%	5		0.79%			0.74%			0.71%			0.72%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		3.56%			3.34%			3.85%			4.23%			4.21%
Before waivers and reimbursements		3.53%			3.30%			3.85%			4.23%			4.21%
Portfolio turnover rate		49%			62%			31%			19%			2%

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 Includes extraordinary expenses of less than 0.01% (see Note 9).

⁶ Annualized.

See Notes to Financial Statements.

112

SEPTEMBER 30, 2010

WASATCH-1ST SOURCE INCOME FUND	Year Ended September 30						Period Ended September 30			Year Ended March 31
(for a share outstanding throughout each period)	2010			2009			20081			2008			2007			2006
Net asset value, beginning of period	$	10.04		$	9.59		$	9.95		$	9.73		$	9.63		$	9.88
Income (loss) from investment operations:
Net investment income		0.29			0.33			0.18	2		0.40			0.38			0.33
Net realized and unrealized gains (losses) on investments		0.30			0.46			(0.35	)		0.24			0.13			(0.18	)
Total from investment operations		0.59			0.79			(0.17	)		0.64			0.51			0.15
Redemption fees (see Note 2)		—	3		—	3		—			—			—			—
Less distributions:
Dividends from net investment income		(0.29	)		(0.34	)		(0.19	)		(0.42	)		(0.41	)		(0.40	)
Total distributions		(0.29	)		(0.34	)		(0.19	)		(0.42	)		(0.41	)		(0.40	)
Net asset value, end of period	$	10.34		$	10.04		$	9.59		$	9.95		$	9.73		$	9.63
Total return		5.95%			8.42%			(1.69)%	4		6.74%			5.43%			1.52%
Supplemental data and ratios:
Net assets, end of period (in thousands)	$	138,095		$	114,496		$	89,081		$	86,981		$	78,921		$	72,874
Ratio of expenses to average net assets:
Net of waivers and reimbursements		0.72%	5		0.84%			0.87%	6		0.95%			0.92%			0.95%
Before waivers and reimbursements		0.73%	5		0.88%			1.12%	6		1.20%			1.17%			1.21%
Ratio of net investment income to average net assets:
Net of waivers and reimbursements		2.87%			3.44%			3.66%	6		4.05%			3.95%			3.36%
Before waivers and reimbursements		2.86%			3.40%			3.41%	6		3.80%			3.70%			3.10%
Portfolio turnover rate		51%			28%			15%	4		56%			59%			70%

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 Includes extraordinary expenses of less than 0.01% (see Note 9).

⁶ Annualized.

See Notes to Financial Statements.

113

WASATCH FUNDS — Notes to Financial Statements

1. ORGANIZATION

Wasatch Funds Trust is a Massachusetts Business Trust (formerly Wasatch Funds, Inc., 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 17 series or “funds” (each a “Fund” and collectively the “Funds”). The Core Growth Fund, Global Science & Technology Fund, Heritage Growth 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, Wasatch-Hoisington U.S. Treasury Fund (“U.S. Treasury Fund”) (sub-advised), and Wasatch-1st Source Income Fund (sub-advised) are each diversified funds. The Emerging Markets Small Cap Fund, Global Opportunities 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, 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, 2010. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Valuation of Securities — All investments in securities are recorded at their estimated fair value as described in Note 15.

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 in the Statements of Operations. Transactions in foreign denominated assets may involve greater risks than domestic transactions.

At September 30, 2010, 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	$	30
Emerging Markets Small Cap Fund
Brazilian Real	$	23,457	$	24,586
Egyptian Pound		5		5
Indian Rupee		171,598		171,598
Malaysian Ringgit		22,292		22,292
Moroccan Dirham		6		6
New Taiwan Dollar		1,225,501		1,242,310
South Korean Won		2		2
	$	1,442,861	$	1,460,799
Global Opportunities Fund
Brazilian Real	$	20,238	$	20,238
British Pound		5,695		5,686
Canadian Dollar		772		771
Egyptian Pound		1		1
Japanese Yen		2,705		2,707
Malaysian Ringgit		4,498		4,495
New Taiwan Dollar		206,095		206,785
South Korean Won		2		2
	$	240,006	$	240,685

114

SEPTEMBER 30, 2010

	Cost of Currency		Value of Currency
Global Science & Technology Fund
Brazilian Real	$	21,742	$	21,742
British Pound		6,027		5,986
	$	27,769	$	27,728
Heritage Growth Fund
Brazilian Real	$	145,423	$	152,680
International Growth Fund
Brazilian Real	$	23,063	$	23,161
British Pound		38,337		38,082
Egyptian Pound		9		9
New Taiwan Dollar		46,652		47,267
South Korean Won		17		18
	$	108,078	$	108,537
International Opportunities Fund
Brazilian Real	$	1,363,693	$	1,434,068
Canadian Dollar		3,717		3,714
Egyptian Pound		2		2
Indian Rupee		575,759		575,759
New Taiwan Dollar		34,145		34,892
South Korean Won		22		22
	$	1,977,338	$	2,048,457
Micro Cap Fund
South Korean Won	$	11	$	11
Micro Cap Value Fund
Indian Rupee	$	6,644	$	6,676
South Korean Won		7		8
	$	6,651	$	6,684
Strategic Income Fund
Brazilian Real	$	8,820	$	8,820
Canadian Dollar		668		668
Hong Kong Dollar		2		2
	$	9,490	$	9,490

Investment in Securities and Related Investment Income — Security transactions are accounted for on the trade date for financial reporting purposes. 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.

Federal Income Taxes — It is each Fund’s 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. The Funds are no longer subject to examination by tax authorities for years prior to 2007. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon

examination and for which it is reasonably possible that the total of amounts of unrecognized tax benefits will significantly change in the next 12 months. Accordingly, no provision for federal income or excise taxes has been made.

Expenses — The Funds contract for various services 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 U.S. 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. SECURITIES AND OTHER INVESTMENTS

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.

Short Sales — The Wasatch-1st Source Long/Short Fund, the Strategic Income Fund and to a lesser extent the other Equity Funds 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

115

WASATCH FUNDS — Notes to Financial Statements (continued)

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.

4. FINANCIAL DERIVATIVE INSTRUMENTS

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 a credit risk if a counterparty is unable or unwilling 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.

Options Transactions — The Equity Funds and the Wasatch-1st Source 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.

5. 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 Wasatch-1st Source Income Fund declares and pays dividends monthly. The Strategic Income, Wasatch-1st Source Income Equity, Wasatch-1st Source Long/Short, and U.S. Treasury 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 additional paid-in capital, undistributed net investment income (loss), and undistributed net realized gains (losses) on investments and foreign currency translations.

Accordingly, at September 30, 2010, reclassifications were recorded as follows:

	Core Growth Fund			Emerging Markets Small Cap Fund			Global Opportunities Fund			Global Science & Technology Fund			Heritage Growth Fund			International Growth Fund
Increase (decrease) paid-in capital in excess of par	$	(2,341,262	)	$	—		$	467,768		$	(678,115	)	$	(17,888	)	$	—
Increase (decrease) undistributed net investment income		179,283			(1,172,323	)		1,008,484			907,794			31,521			821,736
Increase (decrease) undistributed net realized gain (loss)		2,161,979			1,172,323			(1,476,252	)		(229,679	)		(13,633	)		(821,736	)

116

SEPTEMBER 30, 2010

	International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund			Strategic Income Fund
Increase (decrease) paid-in capital in excess of par	$	(1,589,745	)	$	(3,198,371	)	$	(2,094,433	)	$	(7,708,185	)	$	(1,231,384	)	$	(3,313	)
Increase (decrease) undistributed net investment income		1,870,499			3,010,425			2,529,420			6,946,435			461,912			(219,382	)
Increase (decrease) undistributed net realized gain (loss)		(280,754	)		187,946			(434,987	)		761,750			769,472			222,695
	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	$	(1,091,075	)	$	(134,752	)	$	(293,567	)	$	117,872		$	—
Increase (decrease) undistributed net investment income		1,073,883			(14,055	)		(12,026	)		(1,960	)		—
Increase (decrease) undistributed net realized gain (loss)		17,192			148,807			305,593			(115,912	)		—

6. 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 period ended September 30, 2010 are summarized below:

	Core Growth Fund		Emerging Markets Small Cap Fund		Global Opportunities Fund		Global Science & Technology Fund		Heritage Growth Fund		International Growth Fund		International Opportunities Fund
Purchases	$	70,823,815	$	344,127,321	$	124,131,575	$	42,755,969	$	26,284,816	$	126,031,473	$	87,171,149
Sales		113,817,565		33,969,459		36,302,634		44,019,324		35,369,481		83,983,607		57,982,307
	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
Purchases	$	91,493,603	$	159,144,988	$	325,948,623	$	128,662,797	$	14,444,443	$	61,779,376	$	456,465,207
Sales		114,185,307		120,518,554		151,611,324		153,498,637		12,067,635		54,911,326		250,177,866
	Wasatch-1st Source Long/Short Fund		Wasatch-1st Source Income Fund
Purchases	$	259,449,578	$	23,592,865
Sales		116,027,352		25,764,880

Purchases and sales of U.S. government securities in the U.S. Treasury Fund were $104,530,743 and $76,245,703, respectively. Purchases and sales of U.S. government securities in the Wasatch-1st Source Income Fund were $59,507,157 and $35,560,264, respectively.

117

WASATCH FUNDS — Notes to Financial Statements (continued)

7. OPTIONS CONTRACTS WRITTEN

Options written activity during the period ended September 30, 2010 was as follows:

	Options Outstanding at 9/30/2009		Written		Closed			Exercised			Expired			Options Outstanding at 9/30/2010
Heritage Growth Fund
Premium amount	$	—	$	6,265	$	(6,265	)	$	—		$	—		$	—
Number of contracts		—		35		(35	)		—			—			—
Micro Cap Value Fund
Premium amount	$	—	$	1,253,890	$	(104,235	)	$	(518,399	)	$	(257,128	)	$	374,128
Number of contracts		—		9,852		(600	)		(4,070	)		(1,682	)		3,500
Strategic Income Fund
Premium amount	$	20,877	$	792	$	(11,373	)	$	(6,413	)	$	(3,883	)	$	—
Number of contracts		273		33		(158	)		(63	)		(85	)		—
Wasatch-1st Source Long/Short Fund
Premium amount	$	1,604,392	$	6,762,713	$	(1,726,357	)	$	(2,285,848	)	$	(2,125,205	)	$	2,229,695
Number of contracts		5,262		27,551		(4,853	)		(9,508	)		(10,550	)		7,902

8. FEDERAL INCOME TAX INFORMATION

As of September 30, 2010, 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 Fund			Global Science & Technology Fund			Heritage Growth Fund			International Growth Fund
Cost	$	334,708,554		$	374,881,331		$	184,246,611		$	56,545,657		$	63,463,820		$	209,392,376
Gross appreciation	$	108,323,458		$	84,377,022		$	54,636,518		$	11,809,664		$	16,486,748		$	79,917,626
Gross (depreciation)		(25,331,750	)		(3,240,954	)		(3,717,834	)		(2,647,809	)		(1,798,002	)		(3,813,657	)
Net appreciation	$	82,991,708		$	81,136,068		$	50,918,684		$	9,161,855		$	14,688,746		$	76,103,969
	International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund			Strategic Income Fund
Cost	$	110,909,698		$	251,107,072		$	169,667,458		$	835,988,927		$	199,307,038		$	18,911,259
Gross appreciation	$	43,885,482		$	63,975,943		$	25,749,969		$	323,900,149		$	36,061,441		$	2,013,380
Gross (depreciation)		(4,361,369	)		(31,978,731	)		(8,457,469	)		(47,966,591	)		(24,031,147	)		(1,469,316	)
Net appreciation	$	39,524,113		$	31,997,212		$	17,292,500		$	275,933,558		$	12,030,294		$	544,064
	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	$	134,064,760		$	1,487,967,435		$	287,914,348		$	186,645,036		$	130,974,043
Gross appreciation	$	49,112,711		$	200,228,630		$	27,841,298		$	14,133,587		$	6,137,182
Gross (depreciation)		(5,861,256	)		(59,850,212	)		4,971,423			(522,817	)		(64,403	)
Net appreciation	$	43,251,455		$	140,378,418		$	22,869,875		$	13,610,770		$	6,072,779

118

SEPTEMBER 30, 2010

The difference between book-basis and tax-basis unrealized gains are primarily attributable to the tax deferral of losses on wash sales, unrealized appreciation on passive foreign investment companies and other temporary tax adjustments.

The components of accumulated earnings on a tax basis as of September 30, 2010 were as follows:

	Core Growth Fund			Emerging Markets Small Cap Fund			Global Opportunities Fund			Global Science & Technology Fund			Heritage Growth Fund			International Growth Fund
Undistributed ordinary income	$	—		$	86,157		$	1,878,076		$	—		$	658,864		$	1,232,827
Undistributed capital gains		—			—			6,555,018			—			—			—
Accumulated earnings		—			86,157			8,433,094			—			658,864			1,232,827
Accumulated capital and other losses		(121,110,878	)		(14,842,293	)		—			(28,310,873	)		(7,514,729	)		(66,110,178	)
Other undistributed ordinary losses		—			—			(11,284	)		—			—			—
Net unrealized appreciation*		82,762,692			78,296,634			50,818,070			9,163,581			14,696,002			75,459,340
Total accumulated earnings (deficit)	$	(38,348,186	)	$	63,540,498		$	59,239,880		$	(19,147,292	)	$	7,840,137		$	10,581,989
	International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund			Strategic Income Fund
Undistributed ordinary income	$	—		$	—		$	—		$	—		$	—		$	89,709
Undistributed capital gains		—			—			—			—			—			—
Accumulated earnings		—			—			—			—			—			89,709
Accumulated capital and other losses		(445,625	)		(87,613,431	)		(12,346,559	)		(33,688,124	)		(132,925,644	)		(8,427,740	)
Other undistributed ordinary losses		(21,416	)		—			—			—			—			(15,360	)
Net unrealized appreciation*		39,389,605			31,793,483			17,008,657			275,607,559			11,625,410			544,102
Total accumulated earnings (deficit)	$	38,922,564		$	(55,819,948	)	$	4,662,098		$	241,919,435		$	(121,300,234	)	$	(7,809,289	)
	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	$	—		$	—		$	85,683		$	173,304		$	80,824
Undistributed capital gains		—			—			—			10,250,025			—
Accumulated earnings		—			—			85,683			10,423,329			80,824
Accumulated capital and other losses		(39,415,853	)		(65,338,670	)		(8,871,016	)		—			(2,862,019	)
Other undistributed ordinary losses		—			(331,089	)		(10,700	)		(156,953	)		(57,253	)
Net unrealized appreciation*		43,216,979			140,378,427			16,608,832			13,610,770			6,072,779
Total accumulated earnings	$	3,801,126		$	74,708,668		$	7,812,799		$	23,877,146		$	3,234,331

*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 for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. To the extent future gains are offset by capital loss carryforwards, such gains will not be distributed.

Capital loss carryforwards as of September 30, 2010 are as follows:

Fund	2013		2014		2016		2017		2018
Core Growth Fund	$	—	$	—	$	—	$	23,065,472	$	97,992,911
Emerging Markets Small Cap Fund		—		—		—		8,013,713		6,828,580
Global Science & Technology Fund		—		—		—		13,246,252		15,064,621
Heritage Growth Fund		—		—		—		1,497,283		6,017,446
International Growth Fund		—		—		—		37,186,858		28,923,320
International Opportunities Fund		—		—		—		136,323		—
Micro Cap Fund		—		—		—		36,417,364		49,352,340
Micro Cap Value Fund		—		—		—		11,884,263		—
Small Cap Growth Fund		—		—		—		18,434,963		15,177,683
Small Cap Value Fund		—		—		—		69,050,636		63,851,964
Strategic Income Fund		—		—		—		1,777,526		6,650,214
Ultra Growth Fund		—		—		—		18,431,927		20,927,202
Wasatch-1st Source Income Equity Fund		456,570		—		1,007,552		—		63,874,548
Wasatch-1st Source Long/Short Fund		—		—		1,392,157		4,660,126		2,818,733
Wasatch-1st Source Income Fund		917,303		1,382,991		561,725		—		—

119

WASATCH FUNDS — Notes to Financial Statements (continued)

Net capital losses incurred after October 31 and within the taxable year have been elected by the Funds to be treated as being incurred on the first business day of the Funds’ next taxable year. For the year ended September 30, 2010, the following Funds deferred to October 1, 2010 post October capital and currency losses as follows:

Fund	Capital Losses
Core Growth Fund	$	52,495
International Opportunities Fund		309,302
Micro Cap Fund		1,843,727
Micro Cap Value Fund		462,296
Small Cap Growth Fund		75,478
Small Cap Value Fund		23,044
Ultra Growth Fund		56,724

During the tax year ended September 30, 2010, the Funds used capital loss carryforwards in the following amounts:

Fund	Amount Used
International Opportunities Fund	$	6,170,670
Micro Cap Value Fund		5,752,405
Wasatch-1st Source Income Fund		311,342

The tax character of distributions paid during the year ended September 30, 2010 was as follows:

2010	Core Growth Fund		Emerging Markets Small Cap Fund		Global Opportunities Fund		Global Science & Technology Fund		Heritage Growth Fund		International Growth Fund
Ordinary income	$	87,230	$	379,097	$	3,456,368	$	79,109	$	499,403	$	—
Capital gain		—		—		—		—		—		—
Total	$	87,230	$	379,097	$	3,456,368	$	79,109	$	499,403	$	—
2010	International Opportunities Fund		Micro Cap Fund		Micro Cap Value Fund		Small Cap Growth Fund		Small Cap Value Fund		Strategic Income Fund
Ordinary income	$	1,049,066	$	—	$	569,692	$	—	$	—	$	678,070
Capital gain		—		—		—		—		—		—
Total	$	1,049,066	$	—	$	569,692	$	—	$	—	$	678,070
2010	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	$	—	$	21,589,760	$	98,009	$	5,847,330	$	3,572,685
Capital gain		—		—		—		4,184,315		—
Total	$	—	$	21,589,760	$	98,009	$	10,031,645	$	3,572,685

120

SEPTEMBER 30, 2010

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		International Growth Fund
Ordinary income	$	5,739,872	$	29,720	$	—	$	—	$	167,143	$	466,090
Capital gain		—		—		—		—		220,964		—
Total	$	5,739,872	$	29,720	$	—	$	—	$	388,107	$	466,090
2009	International Opportunities Fund		Micro Cap Fund		Micro Cap Value Fund		Small Cap Growth Fund		Small Cap Value Fund		Strategic Income Fund
Ordinary income	$	168,034	$	777,904	$	—	$	—	$	—	$	784,968
Capital gain		—		—		—		1,539,215		—		—
Total	$	168,034	$	777,904	$	—	$	1,539,215	$	—	$	784,968
2009	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	$	—	$	19,218,020	$	2,025,005	$	5,022,309	$	3,433,282
Capital gain		—		—		110,509		—		—
Total	$	—	$	19,218,020	$	2,135,514	$	5,022,309	$	3,433,282

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

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. The amounts designated here include the utilization of earnings and profits distributed to shareholders on the redemption of shares.

	Amount
Global Opportunities Fund	$	363,595
U.S. Treasury Fund	$	4,300,227

For the fiscal year ended September 30, 2010, 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 2010, complete information will be reported on shareholders’ 2010 Form 1099-DIV.

The amount designated as qualified dividend income for the year ended September 30, 2010 will be at the highest amount permitted by law.

Corporate shareholders should note for the year ended September 30, 2010, 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
Heritage Growth Fund		48	%
Strategic Income Fund		54	%
Wasatch-1st Source Income Equity Fund		100	%

121

WASATCH FUNDS — Notes to Financial Statements (continued)

9. 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, 2012. Ordinary operating expenses exclude any interest, taxes, brokerage commissions, other investment-related costs and extraordinary expenses, such as litigation and other expenses not incurred in the ordinary course of the Fund’s business. The Wasatch Funds’ Board of Directors determined that the costs of the Proxy Statement related to the identification and shareholder approval of Director Nominees were extraordinary expenses. Investment advisory fees and fees waived, if any, for the year ended September 30, 2010 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			International Growth Fund
Advisory Fee		1.00	%		1.75	%		1.95	%		1.50	%		0.70	%		1.50	%
Expense Limitation		1.50	%		2.05	%1		2.25	%		1.95	%		0.95	%		1.95	%
	International Opportunities Fund			Micro Cap Fund			Micro Cap Value Fund			Small Cap Growth Fund			Small Cap Value Fund			Strategic Income Fund
Advisory Fee		1.95	%		1.95	%		1.95	%		1.00	%		1.50	%		0.70	%
Expense Limitation		2.25	%		2.25	%		2.25	%		1.50	%		1.95	%		0.95	%
	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		1.25	%		0.90	%		1.10	%		0.50	%		0.55	%
Expense Limitation		1.75	%		1.10	%		—			0.75	%		—

¹ The expense limitation for the Emerging Markets Small Cap Fund decreased from 2.10% to 2.05% when average daily net assets reached $50 million; decreased to 2.00% on 10/1/2010 when average daily net assets reached $100 million; and will decrease to 1.95% when average daily net assets reach $150 million.

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 Trustees. The procedures have been designed to ensure that any purchase or sale of securities by the Funds from or to another fund (or funds) that are, or could be, considered an affiliate by virtue of having a common investment advisor (or affiliated investment advisors), common Trustees 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 ended September 30, 2010, the Funds below engaged in purchases and sales of securities pursuant to Rule 17a-7 of the 1940 Act:

	Purchases		Sales
International Growth Fund	$	14,085	$	—
Small Cap Value Fund		—		50,085
Strategic Income Fund		36,000		—

Affiliated Interests — An officer of the Funds owns approximately 41% of the shares outstanding of the Strategic Income Fund, as of September 30, 2010.

Payments by Former Service Provider — BISYS Fund Services, Inc. (“BISYS”) is a former service provider to the Wasatch-1st Source Income Equity Fund, Wasatch-1st Source Long/Short Fund, and Wasatch-1st Source Income Fund. In August 2010, these funds received a one-time payment from the BISYS Fair Fund (a fund established pursuant to a settlement between the SEC and BISYS that requires, among other things, a distribution of settlement monies from the fair fund to benefit affected mutual funds). Receipt of these payments is shown as a reduction of total expenses on the Statements of Operations. The impact of these payments is reflected in the net expense ratios in the Financial Highlights.

122

SEPTEMBER 30, 2010

10. 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 year ended September 30, 2010 with “affiliated companies” as so defined:

	Share Activity								Dividends Credited to Income for the Fiscal Year ended 9/30/10		Gain (Loss) Realized on Sale of Shares for  the Fiscal Year ended 9/30/10
	Balance 9/30/09		Purchases/ Additions		Sales/ Reductions		Balance 9/30/10
Small Cap Growth Fund
Peet’s Coffee & Tea, Inc.		472,411		221,384		—		693,795	$	—	$	—

11. 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 Trustees 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, 2010, the Funds held the following restricted securities:

	Security Type	Acquisition Dates		Acquisition Cost		Fair Value		Value as % of Net Assets
Global Opportunities Fund
Cardica, Inc.	PIPE		9/25/09	$	95,200	$	173,600		0.07	%
Cardica, Inc.	Warrants		9/25/09		5,000		28,800		0.01	%
				$	100,200	$	202,400		0.08	%
Global Science & Technology Fund
BlueArc Corp., Series DD	Preferred Stock		6/6/06	$	162,499	$	120,108		0.18	%
BlueArc Corp., Series DD-1	Preferred Stock		6/6/06		162,499		126,781		0.19	%
BlueArc Corp., Series FF	Preferred Stock		5/30/08		314,033		230,285		0.35	%
BlueArc Corp., Series FF-1	Preferred Stock		5/30/08		314,033		233,750		0.36	%
BlueArc Corp., Series GG	Preferred Stock		7/9/10		60,028		60,028		0.09	%
BlueArc Corp., Series FF	Warrants		5/30/08		—		—		—
BlueArc Corp., Series FF-1	Warrants		5/30/08		—		—		—
BlueArc Corp., Series GG	Warrants		7/9/10		8		8		—
Cardica, Inc.	PIPE		9/25/09		57,358		104,594		0.16	%
Cardica, Inc.	Warrants		9/25/09		8,937		51,480		0.08	%
Greenspring Global Partners II-B, L.P.	LP Interest		10/10/03 - 9/1/10		434,387		421,896		0.64	%
Xtera Communications, Inc.	Common Stock		9/3/03		7,076		65		—
				$	1,520,858	$	1,348,995		2.05	%
Micro Cap Fund
Alexza Pharmaceuticals, Inc.	PIPE		9/29/09	$	758,197	$	1,035,985		0.37	%
Alexza Pharmaceuticals, Inc.	Warrants		9/29/09		36,766		117,651		0.04	%
Alexza Pharmaceuticals, Inc.	Warrants		8/4/10		—		—		—
Cardica, Inc.	PIPE		9/25/09		405,790		739,970		0.26	%
Cardica, Inc.	Warrants		6/7/07		19,380		—		—
Cardica, Inc.	Warrants		9/25/09		40,312		232,200		0.08	%
Goldwater Bank, N.A.	Common Stock		2/28/07		1,540,000		281,050		0.10	%
				$	2,800,445	$	2,406,856		0.85	%

123

WASATCH FUNDS — Notes to Financial Statements (continued)

	Security Type	Acquisition Dates		Acquisition Cost		Fair Value		Value as % of Net Assets
Micro Cap Value Fund
Cardica, Inc.	PIPE		9/25/09	$	262,990	$	479,570		0.26	%
Cardica, Inc.	Warrants		6/7/07		9,302		—		—
Cardica, Inc.	Warrants		9/25/09		13,813		79,560		0.04	%
Goldwater Bank, N.A.	Common Stock		2/28/07		419,000		76,468		0.04	%
Idaho Trust Bancorp	Common Stock		8/30/06		500,004		215,002		0.12	%
NeurogesX, Inc.	PIPE		12/28/07		525,300		587,350		0.32	%
NeurogesX, Inc.	Warrants		12/28/07		3,800		—		—
				$	1,734,209	$	1,437,950		0.78	%
Small Cap Growth Fund
Alexza Pharmaceuticals, Inc.	PIPE		9/29/09	$	949,810	$	1,297,801		0.12	%
Alexza Pharmaceuticals, Inc.	Warrants		9/29/09		46,058		147,384		0.01	%
Angies List, Series C	Preferred Stock		9/3/10		4,254,284		4,254,284		0.38	%
Fluidigm Corp., Series E	Preferred Stock		12/22/06 - 11/18/09		2,617,258		2,617,258		0.24	%
Fluidigm Corp.	Warrants		8/18/09		11		11		—
Greenspring Global Partners II-B, L.P.	LP Interest		10/10/03 - 7/23/10		4,343,853		4,218,951		0.38	%
Greenspring Global Partners III-B, L.P.	LP Interest		3/16/06 - 9/1/10		1,125,000		1,034,896		0.09	%
Nanosys, Inc., Series D	Preferred Stock		11/8/05		2,000,000		776,271		0.07	%
Nanosys, Inc., Series E	Preferred Stock		8/13/10		184,939		184,939		0.02	%
Orexigen Therapeutics, Inc., Series C	PIPE		11/21/06		1,000,001		866,960		0.08	%
TargetRX, Inc.	Common 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		214,781		0.02	%
Zonare Medical Systems, Inc.	Common Stock		6/30/04		1,500,000		275,437		0.02	%
Zonare Medical Systems, Inc.	Warrants		6/30/04		—		—		—
				$	19,196,849	$	15,892,601		1.43	%
Strategic Income Fund
Redcorp Ventures Ltd., 13.00%, 7/11/12	Corporate Bond		7/5/07	$	231,017	$	23,692		0.12	%
Star Asia Finance Ltd.	Common Stock		2/22/07 - 3/19/10		305,812		177,857		0.91	%
Star Asia SPV, LLC	LLC Membership Interest		3/19/10		578,644		225,655		1.16	%
				$	1,115,473	$	427,204		2.19	%
Ultra Growth Fund
Alexza Pharmaceuticals, Inc.	PIPE		9/29/09	$	175,784	$	240,188		0.13	%
Alexza Pharmaceuticals, Inc.	Warrants		9/29/09		8,524		27,277		0.02	%
Alexza Pharmaceuticals, Inc.	Warrants		8/4/10		—		—		—
Cardica, Inc.	PIPE		9/25/09		392,700		716,100		0.40	%
Cardica, Inc.	Warrants		9/25/09		20,625		118,800		0.07	%
Data Sciences International, Inc., Series B	Preferred Stock		1/20/06		475,001		807,502		0.45	%
Greenspring Global Partners II-B, L.P.	LP Interest		10/10/03 - 7/23/10		3,909,467		3,797,055		2.13	%
Greenspring Global Partners III-B, L.P.	LP Interest		3/16/06 - 9/1/10		1,125,000		1,034,896		0.58	%
Nanosys, Inc., Series D	Preferred Stock		11/8/05		500,001		194,068		0.11	%
Nanosys, Inc., Series E	Preferred Stock		8/13/10		46,235		46,235		0.03	%
Ophthonix, Inc.	Common Stock		9/23/05		500,000		504		—
TargetRX, Inc.	Common Stock		4/8/05		230,904		1,089		—
TherOx, Inc., Series I	Preferred Stock		7/7/05		1,000,000		429,267		0.24	%
Xtera Communications, Inc.	Common Stock		9/3/03		99,065		914		—
Zonare Medical Systems, Inc.	Common Stock		6/30/04		1,000,000		183,625		0.10	%
Zonare Medical Systems, Inc.	Warrants		6/30/04		—		—		—
				$	9,483,306	$	7,597,520		4.26	%

12. 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 Greenspring Global Partners II-B, L.P. The remaining commitment amounts at September 30, 2010 were $60,000, $600,000 and $540,000, respectively. Securities held by the Funds have been designated to meet these purchase commitments.

124

SEPTEMBER 30, 2010

In December 2005, the Small Cap Growth and Ultra Growth Funds entered into subscription agreements to acquire limited partnership interests in Greenspring Global Partners III-B, L.P. The remaining commitment amounts at September 30, 2010 were $375,000 per Fund. Securities held by the Funds have been designated to meet these purchase commitments.

13. 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.

For the year ended September 30, 2010, the following Funds had borrowings:

	Average Daily Borrowings		Number of Days Outstanding		Interest Expense		Weighted Average Annualized Interest Rate			Balance at September 30, 2010
International Growth		240,625		8		63		1.18	%		—
Ultra Growth		1,098,731		67		2,504		1.22	%		—

14. 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 with respect to these financial assets approximates their carrying value as recorded in the Funds’ Statements of Assets and Liabilities.

Inflation Risk — Inflation risk is the possibility that inflation will reduce the purchasing power of a currency, and subsequently reduce the value of a security or asset, and may result in rising interest rates. Inflation is the overall upward price movement of goods and services in an economy that causes the value of a currency to decline.

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. The interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

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.

Region Risk — The Funds invest in equity and fixed income securities of non-U.S. issuers. Although the Funds maintain diversified investment portfolios, 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 advisor. If this group of shareholders simultaneously redeems on the advice of their investment advisor, Fund expenses may increase and performance may be materially affected. However, the Advisor has contractually agreed to waive its fees and/or reimburse the International Opportunities Fund should its operating expenses exceed 2.25% through at least January 31, 2012.

15. SECURITIES VALUATION

Equity Securities (common and preferred stock) — 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

125

WASATCH FUNDS — Notes to Financial Statements (continued)

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. To the extent that these securities are actively traded and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy. 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 Depositary 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. When a Fund uses this fair value pricing method, the value assigned to the Fund’s foreign securities may not be the quoted or published prices of the investments on their primary markets or exchanges and the securities are categorized in level 2. These valuation procedures apply equally to long or short equity positions in a Fund.

Corporate debt securities — Investments are valued at current market value by a commercial pricing service, or by using the last sale or bid price based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Although most corporate bonds are categorized in level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as level 3.

Short-term notes — Investments maturing 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. To the extent the inputs are observable and timely, the values would be categorized in level 2 of the fair value hierarchy.

Asset-backed securities — Investments are priced using the closing bid as supplied by a commercial pricing service based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications, new issue data, monthly payment information and collateral performance. Although most asset-backed securities are categorized in level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as level 3.

U.S. government issuers — Investments are priced using the closing bid as supplied by a commercial pricing service based on observable inputs. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Although most U.S. government bonds are categorized in level 2 of the fair value hierarchy, in instances where observable inputs are not available, they are categorized as level 3.

Derivative instruments — Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized in level 1 of the fair value hierarchy. 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.

Restricted securities — 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 Joint Pricing Committee of the Advisor and the Funds (“Pricing Committee”) with oversight by the Board of Trustees. 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 current 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. Depending on the relative significance of valuation inputs, these instruments may be classified in either level 2 or level 3 of the fair value hierarchy.

126

SEPTEMBER 30, 2010

As of September 30, 2010, 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	—
Emerging Markets Small Cap Fund	0.16	%
Global Opportunities Fund	0.02	%
Global Science & Technology Fund	1.89	%
Heritage Growth Fund	—
International Growth Fund	1.84	%
International Opportunities Fund	0.03	%
Micro Cap Fund	0.22	%
Micro Cap Value Fund	0.20	%
Small Cap Growth Fund	1.24	%
Small Cap Value Fund	—
Strategic Income Fund	1.28	%
Ultra Growth Fund	3.72	%
Wasatch-1st Source Income Equity Fund	—
Wasatch-1st Source Long/Short Fund	—
U.S. Treasury Fund	—
Wasatch-1st Source Income Fund	0.51	%

16. FAIR VALUE MEASUREMENTS

The Funds use various methods to measure the fair value of most of their investments on a recurring basis. U.S. GAAP established a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:

Ÿ Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.

Ÿ Level 2 — Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. The inputs may include quoted prices for the identical investment on an inactive market, prices for similar investments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Ÿ Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether a security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

The Funds’ policy is to recognize transfers between levels at the end of the reporting period.

The following is a summary of the fair valuations according to the inputs used as of September 30, 2010 in valuing the Funds’ 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 9/30/2010
Core Growth Fund
Assets
Common Stocks		$	394,874,393	$	—	$	—	$	394,874,393
Preferred Stocks			6,172,869		—		—		6,172,869
Short-Term Investments			—		16,653,000		—		16,653,000
		$	401,047,262	$	16,653,000	$	—	$	417,700,262

127

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 9/30/2010
Emerging Markets Small Cap Fund
Assets
Common Stocks	Restaurants	$	3,990,730	$	—		$	298	$	3,991,028
	Other		421,775,837		—			—		421,775,837
Preferred Stocks			14,093,820		—			—		14,093,820
Limited Partnership Interest			1,415,640		—			—		1,415,640
Warrants			20,074		—			—		20,074
Short-Term Investments			—		14,721,000			—		14,721,000
		$	441,296,101	$	14,721,000		$	298	$	456,017,399
Global Opportunities Fund
Assets
Common Stocks	Auto Parts & Equipment	$	1,120,101	$	—		$	21,790	$	1,141,891
	Other		222,129,639		—			—		222,129,639
Preferred Stocks			835,171		—			—		835,171
Limited Partnership Interest			360,000		—			—		360,000
Warrants			11,794		28,800			—		40,594
Short-Term Investments			—		10,658,000			—		10,658,000
		$	224,456,705	$	10,686,800		$	21,790	$	235,165,295
Global Science & Technology Fund
Assets
Common Stocks	Internet Software & Services	$	4,550,294	$	—		$	65	$	4,550,359
	Other		58,733,817		—			—		58,733,817
Preferred Stocks			—		—			770,952		770,952
Limited Partnership Interest			—		—			421,896		421,896
Warrants			—		51,480			8		51,488
Short-Term Investments			—		1,179,000			—		1,179,000
		$	63,284,111	$	1,230,480		$	1,192,921	$	65,707,512
Heritage Growth Fund
Assets
Common Stocks		$	75,342,566	$	—		$	—	$	75,342,566
Short-Term Investments			—		2,810,000			—		2,810,000
		$	75,342,566	$	2,810,000		$	—	$	78,152,566
International Growth Fund
Assets
Common Stocks		$	267,953,681	$	—		$	—	$	267,953,681
Preferred Stocks			3,594,384		—			—		3,594,384
Limited Partnership Interest			1,182,280		—			—		1,182,280
Short-Term Investments			—		12,766,000			—		12,766,000
		$	272,730,345	$	12,766,000		$	—	$	285,496,345
International Opportunities Fund
Assets
Common Stocks	Auto Parts & Equipment	$	1,805,022	$	—		$	44,108	$	1,849,130
	Education Services		637,011		—			7,905		644,916
	Restaurants		1,956,634		—			750		1,957,384
	Other		139,521,548		—			—		139,521,548
Preferred Stocks			1,324,503		—			—		1,324,503
Limited Partnership Interest			826,552		—			—		826,552
Warrants			17,778		—			—		17,778
Short-Term Investments			—		4,292,000			—		4,292,000
		$	146,089,048	$	4,292,000		$	52,763	$	150,433,811
Liabilities
Foreign Exchange Contracts		$	—	$	(95,860	)	$	—	$	(95,860	)
		$	—	$	(95,860	)	$	—	$	(95,860	)

128

SEPTEMBER 30, 2010

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 9/30/2010
Micro Cap Fund
Assets
Common Stocks	Specialized Finance	$	—		$	—	$	281,050	$	281,050
	Other		272,663,057			—		—		272,663,057
Preferred Stocks			3,318,326			—		—		3,318,326
Warrants			—			349,851		—		349,851
Short-Term Investments			—			6,492,000		—		6,492,000
		$	275,981,383		$	6,841,851	$	281,050	$	283,104,284
Micro Cap Value Fund
Assets
Common Stocks	Diversified Banks	$	2,225,214		$	—	$	215,002	$	2,440,216
	Specialized Finance		1,333,800			—		76,468		1,410,268
	Other		154,584,914			—		—		154,584,914
Warrants			—			79,560		—		79,560
Short-Term Investments			—			28,445,000		—		28,445,000
		$	158,143,928		$	28,524,560	$	291,470	$	186,959,958
Liabilities
Equity Contracts		$	(449,000	)	$	—	$	—	$	(449,000	)
		$	(449,000	)	$	—	$	—	$	(449,000	)
Small Cap Growth
Assets
Common Stocks	Health Care Equipment	$	16,855,563		$	—	$	275,437	$	17,131,000
	Health Care Services		12,604,659			—		3,628		12,608,287
	Other		1,046,384,423			—		—		1,046,384,423
Preferred Stocks			—			—		7,832,752		7,832,752
Limited Partnership Interest			—			—		5,253,847		5,253,847
Warrants			—			147,384		11		147,395
Rights			—			—		214,781		214,781
Short-Term Investments			—			22,350,000		—		22,350,000
		$	1,075,844,645		$	22,497,384	$	13,580,456	$	1,111,922,485
Small Cap Value Fund
Assets
Common Stocks		$	209,241,332		$	—	$	—	$	209,241,332
Short-Term Investments			—			2,096,000		—		2,096,000
		$	209,241,332		$	2,096,000	$	—	$	211,337,332
Strategic Income Fund
Assets
Common Stocks	Diversified REITs	$	233,662		$	177,857	$	—	$	411,519
	Other		16,270,456			—		—		16,270,456
Preferred Stocks			417,725			—		—		417,725
Exchange Traded Funds			353,438			—		—		353,438
Limited Liability Company Membership Interest			—			—		225,655		225,655
Limited Partnership Interest			395,838			—		—		395,838
Corporate Bonds			—			—		23,692		23,692
Short-Term Investments			—			1,357,000		—		1,357,000
		$	17,671,119		$	1,534,857	$	249,347	$	19,455,323
Ultra Growth Fund
Assets
Common Stocks	Health Care Equipment	$	11,139,237		$	—	$	183,625	$	11,322,862
	Health Care Services		2,249,536			—		1,089		2,250,625
	Internet Software & Services		4,905,293			—		914		4,906,207
	Personal Products		—			—		504		504
	Other		134,071,917			—		—		134,071,917
Preferred Stocks			—			—		1,477,072		1,477,072
Limited Partnership Interest			—			—		4,831,951		4,831,951
Warrants			—			146,077		—		146,077
Short-Term Investments			—			18,309,000		—		18,309,000
		$	152,365,983		$	18,455,077	$	6,495,155	$	177,316,215

129

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 9/30/2010
Wasatch-1st Source Income Equity Fund
Assets
Common Stocks		$	1,593,837,853		$	—	$	—	$	1,593,837,853
Short-Term Investments			—			34,508,000		—		34,508,000
		$	1,593,837,853		$	34,508,000	$	—	$	1,628,345,853
Wasatch-1st Source Long/Short Fund
Assets
Common Stocks		$	272,620,473		$	—	$	—	$	272,620,473
Preferred Stocks			5,760,750			—		—		5,760,750
Short-Term Investments			—			32,403,000		—		32,403,000
		$	278,381,223		$	32,403,000	$	—	$	310,784,223
Liabilities
Equity Contracts		$	(4,172,550	)	$	—	$	—	$	(4,172,550	)
Securities Sold Short			(28,748,307	)		—		—		(28,748,307	)
		$	(32,920,857	)	$	—	$	—	$	(32,920,857	)
U.S. Treasury Fund
Assets
U.S. Government Obligations		$	—		$	198,937,806	$	—	$	198,937,806
Short-Term Investments			—			1,318,000		—		1,318,000
		$	—		$	200,255,806	$	—	$	200,255,806
Wasatch-1st Source Income Fund
Assets
Asset Backed Securities		$	—		$	3,212,771	$	—	$	3,212,771
Collateralized Mortgage Obligations			—			35,466,853		—		35,466,853
Corporate Bonds			—			39,775,065		—		39,775,065
Municipal Bonds			—			1,265,472		—		1,265,472
Mutual Funds			870,390			—		—		870,390
Exchange Traded Funds			1,357,080			—		—		1,357,080
U.S. Government Agency Securities			—			31,260,154		—		31,260,154
U.S. Treasury Bonds			—			17,065,655		—		17,065,655
U.S. Treasury Inflation Protected Securities			—			2,766,082		—		2,766,082
Preferred Stocks			1,027,300			—		—		1,027,300
Short-Term Investments			—			2,980,000		—		2,980,000
		$	3,254,770		$	133,792,052	$	—	$	137,046,822

The valuation techniques used by the Funds to measure fair value for the period ended September 30, 2010 maximized the use of observable inputs and minimized the use of unobservable inputs.

There were no significant transfers between level 1 and level 2 during the period.

The following is a reconciliation of the fair valuations using significant unobservable inputs (Level 3) for the Funds during the year ended September 30, 2010:

Fund	Market Value Beginning Balance 9/30/2009	Purchases at Cost/ Sales (Proceeds)		Realized Gain/(Loss)			Change in Unrealized Appreciation (Depreciation)			Transfers in at Market Value		Transfers out at Market Value			Market Value Ending Balance 9/30/2010		Net Change in Unrealized Appreciation (Depreciation) on Investments Held at 9/30/2010
Core Growth Fund
Common Stocks	$7,304,498	$	—	$	—		$	287,837		$	—	$	(7,592,335	)	$	—	$	—
Emerging Markets Small Cap Fund
Common Stocks	114,864		—		—			(114,566	)		—		—			298		(114,566	)
Global Opportunities Fund
Common Stocks	140,400		—		(186,196	)		241,186			—		(173,600	)		21,790		(7,293	)

130

SEPTEMBER 30, 2010

Fund	Market Value Beginning Balance 9/30/2009	Purchases at Cost/ Sales (Proceeds)			Realized Gain/(Loss)			Change in Unrealized Appreciation (Depreciation)			Transfers in at Market Value		Transfers out at Market Value			Market Value Ending Balance 9/30/2010		Net Change in Unrealized Appreciation (Depreciation) on Investments Held at 9/30/2010
Global Science & Technology Fund
Common Stocks	192,172		(205,283	)		92,471			25,299			—		(104,594	)		65		(2,089	)
Preferred Stocks	953,065		60,028			(139,219	)		(102,922	)		—		—			770,952		(242,141	)
Limited Partnership Interest	339,596		35,000			—			47,300			—		—			421,896		47,300
Warrants	—		8			—			—			—		—			8		—
	1,484,833		(110,247	)		(46,748	)		(30,323	)		—		(104,594	)		1,192,921		(196,930	)
International Opportunities Fund
Common Stocks	363,405		—			(432,492	)		121,850			—		—			52,763		(302,118	)
Micro Cap Fund
Common Stocks	2,645,451		(558,103	)		196,343			(226,686	)		—		(1,775,955	)		281,050		(830,830	)
Micro Cap Value Fund
Common Stocks	2,403,636		—			27,048			(396,044	)		—		(1,743,170	)		291,470		(257,162	)
Small Cap Growth Fund
Common Stocks	1,045,515		—			—			531,352			—		(1,297,802	)		279,065		81,011
Preferred Stocks	3,037,223		4,556,487			(3,060,778	)		3,299,820			—		—			7,832,752		239,042
Limited Partnership Interest	4,205,345		530,000			—			518,502			—		—			5,253,847		518,502
Convertible Note	113,374		(113,374	)		—			—			—		—			—		—
Warrants	11		—			—			—			—		—			11		—
Rights	—		—			—			214,781			—		—			214,781		214,781
	8,401,468		4,973,113			(3,060,778	)		4,564,455			—		(1,297,802	)		13,580,456		1,053,336
Small Cap Value Fund
Common Stocks	$6,894,351	$	—		$	276,328		$	(2,147,321	)	$	—	$	(5,023,358	)	$	—	$	—
Strategic Income Fund
Common Stocks	162,680		—			—			6,410			—		(169,090	)		—		—
Limited Liability Company Membership Interest	—		578,644			—			(352,989	)		—		—			225,655		(352,989	)
Corporate Bonds	—		(11,041	)		80			10,961			23,692		—			23,692		10,961
	162,680		567,603			80			(335,618	)		23,692		(169,090	)		249,347		(342,028	)
Ultra Growth Fund
Common Stocks	759,246		—			(2,531	)		385,705			—		(956,288	)		186,132		24,763
Preferred Stocks	1,523,113		46,235			—			(92,276	)		—		—			1,477,072		(92,276	)
Limited Partnership Interest	3,865,754		495,000			—			471,197			—		—			4,831,951		471,197
	6,148,113		541,235			(2,531	)		764,626			—		(956,288	)		6,495,155		403,684
Wasatch-1st Source Income Fund
Municipal Bonds	1,578,555		(1,650,000	)		—			71,445			—		—			—		—

17. 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 Year Ended September 30, 2010:

	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	$	—	$	—	$	—	$	(22,000	)	$	—	$	(22,000	)

131

WASATCH FUNDS — Notes to Financial Statements (continued)

WASATCH HERITAGE GROWTH FUND

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended September 30, 2010:

	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	$	—	$	—	$	—	$	630	$	—	$	630

WASATCH INTERNATIONAL OPPORTUNITIES FUND

Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of September 30, 2010:

	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
Unrealized depreciation on foreign currency contracts	$	—	$	95,860	$	—	$	—	$	—	$	95,860

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended September 30, 2010:

	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	$	—	$	(61,562	)	$	—	$	—	$	—	$	(61,562	)
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments and foreign currency translations	$	—	$	(95,860	)	$	—	$	—	$	—	$	(95,860	)

WASATCH MICRO CAP VALUE FUND

Fair Values of Derivative Instruments on the Statement of Assets and Liabilities as of September 30, 2010:

	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	$	—	$	—	$	—	$	449,000	$	—	$	449,000

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended September 30, 2010:

	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 investments and foreign currency translations	$	—	$	(405,290	)	$	—	$	—		$	—	$	(405,290	)
Net realized gain on options written		—		—			—		866,253			—		866,253
	$	—	$	(405,290	)	$	—	$	866,253		$	—	$	460,963
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations	$	—	$	—		$	—	$	(74,872	)	$	—	$	(74,872	)

132

SEPTEMBER 30, 2010

WASATCH STRATEGIC INCOME FUND

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended September 30, 2010:

	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	$	—	$	—	$	—	$	35,216		$	(179,841	)	$	(144,625	)
Net realized gain on options written		—		—		—		18,481			—			18,481
	$	—	$	—	$	—	$	53,697		$	(179,841	)	$	(126,144	)
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments, options written 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, 2010:

	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	$	—	$	—	$	—	$	4,172,550	$	—	$	4,172,550

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended September 30, 2010:

	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	$	—	$	—	$	—	$	4,803,888		$	—	$	4,803,888
Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations	$	—	$	—	$	—	$	(2,005,127	)	$	—	$	(2,005,127	)

* See Note 2 — Significant Accounting Policies for additional information.

For the year ended September 30, 2010, the average monthly balance of outstanding derivative financial instruments was as follows:

	Global Science & Technology Fund		Heritage Growth Fund		International Opportunities Fund		Micro Cap Value Fund		Strategic Income Fund		Wasatch-1st Source Long/Short Fund
Forward currency contracts:
Average number of contracts — U.S. dollars purchased	$	—	$	—	$	1	$	2	$	—	$	—
Average U.S. dollar amounts purchased		—		—		3,816,025		9,182,238		—		—
Option contracts:
Average number of put contracts purchased		21		—		—		—		—		—
Average number of call contracts purchased		—		—		—		—		42		—
Average number of call contracts written		—		3		—		727		18		6,574
Average value of put contracts purchased		2,125		—		—		—		—		—
Average value of call contracts purchased		—		—		—		—		4,229		—
Average value of call contracts written		—		496		—		86,003		6,383		1,459,582

133

WASATCH FUNDS — Notes to Financial Statements (continued) SEPTEMBER 30, 2010

18. SUBSEQUENT EVENTS

Management has evaluated the possibility of subsequent events and has determined that there are no additional events that would require adjustment to or additional disclosure in the Funds’ financial statements.

134

WASATCH FUNDS — Report of Independent Registered Public Accounting Firm SEPTEMBER 30, 2010

To the Board of Trustees

and Shareholders of

Wasatch Funds Trust:

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 Trust (hereafter referred to as the “Funds”) at September 30, 2010, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the periods indicated, and the financial highlights for each of the periods indicated (except for the Wasatch-1st Source Income Equity Fund, Wasatch-1st Source Income Fund, and Wasatch-1st Source Long/Short Fund) and the financial highlights for the Wasatch-1st Source Income Equity Fund, Wasatch 1st-Source Income Fund, and Wasatch-1st Source Long/Short Fund for the two years in the period then ended, 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 at September 30, 2010 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 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 financial highlights for each of the three years in the period then ended, were audited by other auditors whose report dated May 22, 2008 expressed an unqualified opinion on those statements.

PricewaterhouseCoopers LLP

Kansas City, MO

November 24, 2010

135

WASATCH FUNDS — Supplemental Information

MANAGEMENT OF THE COMPANY

Management Information. The business affairs of Wasatch Funds are supervised by its Board of Trustees. The Board consists of four trustees who are elected and serve until their successors are elected and qualified.

The trustees 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 Trustee		Other Directorships Held by Trustee2
Independent Trustees
James U. Jensen, J.D., MBA c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 66	Trustee and Chairman of the Board	Indefinite Served as Chairman of the Board since 2004 and Trustee 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.		17	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 70	Trustee and Chairman of the Audit Committee	Indefinite Served as Chairman of the Audit Committee since 2004 and Trustee since 1986	Professor of Business Management and Holder of the Fred G. Meyer Chair of Marketing (Emeritus), Brigham Young University since 1978.		17	None
D. James Croft, Ph.D. c/o Wasatch Funds 150 Social Hall Ave. 4th Floor Salt Lake City, Utah 84111 Age 68	Trustee	Indefinite Served as Trustee since 2005	Consultant since 2004 and Founder & Executive Director, Mortgage Asset Research Institute from 1990 to 2004.		17	None
Miriam M. Allison3 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 63	Trustee	Indefinite Served as Trustee since 2010	Rancher since 2004. From 2001 to 2005, Chairman of UMB Fund Services, Inc.		17	Director, Northwestern Mutual Series Fund, Inc. (27 portfolios) since 2006.
Interested Trustee
Samuel S. Stewart, Jr., Ph.D. CFA4 150 Social Hall Ave. 4th Floor Salt Lake City, UT 84111 Age 68	President and Trustee	Indefinite Served as President and Trustee 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.		17	None

¹ A Trustee may serve until his/her death, resignation, removal or retirement. Each Independent Trustee shall retire as Trustee at the end of the calendar year in which (s)he attains the age of 72 years.

² Directorships are those held by a Trustee 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 Ms. Allison previously owned shares of UMB Financial Corp., the parent company of UMB Fund Services, Inc., the Funds’ transfer agent. As of the date of this statement, Ms. Allison no longer owns such shares.

⁴ Mr. Stewart is an Interested Trustee because he serves as a director and officer of the Advisor.

136

SEPTEMBER 30, 2010 (UNAUDITED)

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 41	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 42	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 46	Vice President	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 52	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’ trustees is provided in the Statement of Additional Information and is available without charge, upon request, by calling 800.551.1700.

137

WASATCH FUNDS — Supplemental Information (continued)

SHAREHOLDER MEETING RESULTS

A Special Meeting of the Shareholders of the Funds (the “Shareholder Meeting”) was held on February 11, 2010. The purpose of the Shareholder Meeting was to ask shareholders:

1. To approve the election of Directors;

2. To approve a new Advisory and Service Contract between the Company and Wasatch Advisors, Inc. (the “Advisor”);

3. To approve a new Sub-Advisory Agreement between the Advisor and Hoisington Investment Management Company (“HIMCO”) with respect to the Wasatch-Hoisington U.S. Treasury Fund (the “U.S. Treasury Fund”);

4. To approve a new Sub-Advisory Agreement between the Advisor and 1st Source Corporation Investment Advisors, Inc. (“1st Source”) with respect to the Wasatch-1st Source Income Fund (the “Income Fund”);

5. To approve a proposed Agreement and Plan of Reorganization (the “Reorganization Agreement”), pursuant to which each series of the Company — Wasatch Core Growth Fund (the “Core Growth Fund”), Wasatch Emerging Markets Small Cap Fund (the “Emerging Markets Small Cap Fund”), Wasatch Global Opportunities Fund (the “Global Opportunities Fund”), Wasatch Global Science & Technology Fund (the “Global Science & Technology Fund”), Wasatch Heritage Growth Fund (the “Heritage Growth Fund”), Wasatch Heritage Value Fund (the “Heritage Value Fund”), Wasatch International Growth Fund (the “International Growth Fund”), Wasatch International Opportunities Fund, (the “International Opportunities Fund”), Wasatch Micro Cap Fund (the “Micro Cap Fund”), Wasatch Micro Cap Value Fund (the “Micro Cap Value Fund”), Wasatch Small Cap Growth Fund (the “Small Cap Growth Fund”), Wasatch Small Cap Value Fund (the “Small Cap Value Fund”), Wasatch Strategic Income Fund (the “Strategic Income Fund”), Wasatch Ultra Growth Fund (the “Ultra Growth Fund”), the U.S. Treasury Fund, the Income Fund, Wasatch-1st Source Income Equity Fund (the “Income Equity Fund”) and Wasatch-1st Source Long/Short Fund (the “Long/Short Fund”) (each a “Fund” and collectively, the “Funds”) would be reorganized as separate series of Wasatch Funds Trust, a newly-created Massachusetts business trust (the “Trust”) and the liquidation and dissolution of the Funds and the Company.

At the February 11, 2010 Shareholder Meeting, the shareholders of each Fund approved the election of Directors. At that time, the Shareholder Meeting was adjourned and scheduled to reconvene on March 11, 2010 to allow further time to gather shareholder votes on the other proposals.

On March 11, 2010, the Shareholder Meeting reconvened. The shareholders of each Fund approved the new Advisory and Service Contract with the Advisor. The shareholders of

the U.S. Treasury Fund approved the new Sub-Advisory Agreement with HIMCO. The shareholders of the Income Fund approved the new Sub-Advisory Agreement with 1st Source. In addition, the shareholders of the Funds of the Company approved the reorganization of the Company from a Minnesota corporation to a Massachusetts business trust pursuant to the Reorganization Agreement. The Reorganization was effective as of the close of business on March 31, 2010.

The results of the votes are as set forth below.

Proposal 1

	Affirmative		Against		Abstain		Total
James U. Jensen		405,954,645		—		13,471,464		419,426,109
William R. Swinyard		405,846,801		—		13,579,307		419,426,108
D. James Croft		405,787,730		—		13,638,379		419,426,109
Miriam M. Allison		405,658,392		—		13,767,717		419,426,109
Samuel S. Stewart, Jr.		405,750,124		—		13,674,985		419,425,109

Proposal 2

Fund	Affirmative		Against		Abstain		Total
Core Growth Fund		7,597,501		233,923		233,190		8,064,614
Emerging Markets Small Cap Fund		26,503,689		683,168		469,451		27,656,308
Global Opportunities Fund		26,488,762		202,710		312,725		27,004,197
Global Science & Technology Fund		2,959,174		94,016		70,829		3,124,019
Heritage Growth Fund		4,692,125		141,053		115,114		4,948,292
Heritage Value Fund		321,365		5,968		1,345		328,678
International Growth Fund		6,642,811		260,051		193,567		7,096,429
International Opportunities Fund		28,529,922		551,033		500,212		29,581,167
Micro Cap Fund		42,326,200		1,307,373		1,068,337		44,701,910
Micro Cap Value Fund		32,965,456		880,158		654,856		34,500,470
Small Cap Growth Fund		17,993,079		552,341		362,421		18,907,841
Small Cap Value Fund		48,983,138		1,241,926		1,019,041		51,244,105
Strategic Income Fund		1,866,208		33,408		10,907		1,910,523
Ultra Growth Fund		4,168,438		113,461		86,601		4,368,500
U.S. Treasury Fund		4,910,255		150,319		206,607		5,267,181
Income Fund		6,820,833		150,887		240,888		7,212,608
Income Equity Fund		61,184,309		1,319,897		1,510,578		64,014,784
Long/Short Fund		8,799,059		72,161		154,150		9,025,370

Proposal 3

Affirmative		Against		Abstain		Total
	4,915,956		151,079		200,149		5,267,184

Proposal 4

Affirmative		Against		Abstain		Total
	6,660,700		323,929		227,980		7,212,609

Proposal 5

Fund	Affirmative		Against		Abstain		Total
Core Growth Fund		7,063,840		722,738		278,037		8,064,615
Emerging Markets Small Cap Fund		25,587,148		1,480,308		588,854		27,656,310
Global Opportunities Fund		23,555,840		3,072,618		375,738		27,004,196
Global Science & Technology Fund		2,855,553		140,258		128,207		3,124,018
Heritage Growth Fund		4,586,209		234,316		127,769		4,948,294
Heritage Value Fund		320,183		6,929		1,566		328,678

138

SEPTEMBER 30, 2010 (UNAUDITED)

Fund	Affirmative		Against		Abstain		Total
International Growth Fund		6,361,878		481,386		253,163		7,096,427
International Opportunities Fund		28,107,602		893,785		579,780		29,581,167
Micro Cap Fund		41,451,562		1,968,519		1,281,827		44,701,908
Micro Cap Value Fund		32,035,784		1,497,087		967,598		34,500,469
Small Cap Growth Fund		14,903,920		3,561,587		442,330		18,907,837
Small Cap Value Fund		44,883,530		5,042,428		1,318,147		51,244,105
Strategic Income Fund		1,849,099		50,251		11,174		1,910,524
Ultra Growth Fund		4,082,744		165,542		120,213		4,368,499
U.S. Treasury Fund		4,857,861		193,776		215,547		5,267,184
Income Fund		6,661,070		306,322		245,217		7,212,609
Income Equity Fund		60,212,662		1,877,566		1,924,554		64,014,782
Long/Short Fund		8,752,576		101,638		171,155		9,025,369

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’ website at www.wasatchfunds.com or by calling 800.551.1700 and on the Securities and Exchange Commission’s (SEC) website at www.sec.gov.

Wasatch Funds’ proxy voting record is available on the Funds’ website at www.wasatchfunds.com and the SEC’s website 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 website 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).

139

WASATCH FUNDS — Service Providers SEPTEMBER 30, 2010

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.

6836 Bee Caves Rd.

Building 2, Suite 100

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

140

WASATCH FUNDS — Guide to Understanding Financial Statements SEPTEMBER 30, 2010

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 139. 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-1st 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 142.

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 trustees’ fees and other expenses. 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

141

WASATCH FUNDS — Guide to Understanding Financial Statements (continued) SEPTEMBER 30, 2010

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 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 141. 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 date 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 (loss) 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

142

Annual Report &

Commentaries

800.551.1700 • www.WasatchFunds.com

Annual Report & Commentaries

WASATCH

FUNDS

Deeper, Disciplined Investing

Item 2: Code of Ethics.

(a) Wasatch Funds Trust (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 this 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 this 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 Trustees of the Registrant has determined that the Registrant has at least 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)	The name of the audit committee financial expert is Miriam M. Allison. Ms. Allison was deemed to be “independent” as that term is defined in Item 3(a)(2) of Form N-CSR.
		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, 2010 and September 30, 2009 were $283,100 and $296,600, respectively.

(b) Audit Related Fees – During the fiscal years ended September 30, 2010 and September 30, 2009, the Registrant was not billed any fees by the independent registered public accounting firm 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, 2010 and 2009, 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, 2010 and September 30, 2009 were $78,000 and $76,000, 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, 2010 and 2009, 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 – During the fiscal years ended September 30, 2010 and 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, 2010 and 2009, 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, 2010 and 2009 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 Trustees has not adopted formal 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 TRUST
By:	/s/    SAMUEL S. STEWART, JR.
	Samuel S. Stewart, Jr.
	President (principal executive officer) of Wasatch Funds Trust

Date: December 8, 2010

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 Trust

Date: December 8, 2010

By:	/s/    CINDY B. FIRESTONE
	Cindy B. Firestone
	Treasurer (principal financial officer) of Wasatch Funds Trust

Date: December 8, 2010