Wasatch International Growth Fund Q2 2025 Commentary: Market Rebounds Despite Tariff Concerns

The Wasatch International Growth Fund Q2 2025 Commentary reports that international equities experienced sharp gains during the quarter, despite initial declines following President Trump's announcement of higher tariff rates. However, the market rebounded after Trump's economic team softened its stance. The commentary does not provide further details about the fund's performance or investment strategies.

The Wasatch International Growth Fund (WIGF) reported a mixed performance during the second quarter of 2025, reflecting the broader market dynamics influenced by geopolitical and economic factors. While international equities experienced sharp gains, the fund underperformed its benchmark, the Russell 2000® Growth Index, which gained 11.97% for the period.

The quarter began with a selloff triggered by concerns over tariffs and global trade, with the benchmark index opening in negative territory. However, the market rebounded after the Trump administration's 90-day pause on its reciprocal tariff regime ignited a broad-based rally. Small cap growth stocks, including those in the industrials and consumer staples sectors, faced headwinds due to the Fund's fundamentals-based investment approach, which tends to lag in speculative, momentum-driven markets. Conversely, holdings in the information-technology and health-care sectors contributed most to relative results.

The Fund's performance was significantly impacted by sector-specific developments. For instance, Freshpet Inc. (FRPT) and Champion Homes, Inc. (SKY) faced challenges due to cautious consumer sentiment and macroeconomic pressures, leading to lower sales and earnings guidance. Meanwhile, TransMedics Group, Inc. (TMDX) emerged as a top contributor, driven by strong quarterly results and top-line growth of 48% year-over-year.

The Fund's commitment to a fundamentals-based investment discipline remained steadfast despite the market's speculative undertone. The Fund's investment strategy focused on companies with enduring business models and disruptive growth potential, particularly in the information-technology and health-care sectors. The U.S. Food and Drug Administration's (FDA) commitment to innovation and a fast review process for new drugs and devices was highlighted as a supportive factor for the health-care sector.

The quarter ended with a great deal of uncertainty about tariffs, trade policy, and interest rate policy, which could unsettle investor sentiment. However, the Fund's portfolio was positioned to benefit from companies with clear paths to earnings growth.

References:
[1] https://seekingalpha.com/article/4810975-wasatch-ultra-growth-fund-q2-2025-commentary