The Wasatch Emerging India Fund's Investor Class experienced a notable -11.11% decline, underperforming its benchmark. This downturn was primarily attributed to holdings within the healthcare and industrials sectors, with Five-Star Business Finance Ltd. being the most significant detractor. Despite these short-term challenges, the fund maintains a long-term perspective on India's robust growth narrative, emphasizing investments in companies with strong fundamentals and adaptive capabilities across various economic cycles.
Third Quarter Performance Analysis
In the third quarter of 2025, the Wasatch Emerging India Fund’s Investor Class recorded a significant underperformance, with its value declining by -11.11%. This result stood in stark contrast to its benchmark, the MSCI India Investable Market Index (IMI), which also saw a decrease but to a lesser extent at -7.48%. The primary factors contributing to this underperformance were concentrated within specific sectors, particularly healthcare and industrials, where several key holdings faced considerable headwinds. These sectors, despite their long-term potential, posed immediate challenges to the fund's overall returns during this period.
A detailed examination of the fund’s portfolio reveals that Five-Star Business Finance Ltd. emerged as the most significant detractor from performance in the third quarter. This specific holding's struggles exemplify the broader difficulties encountered within the healthcare and industrials sectors. Such sector-specific underperformance highlights the impact of market dynamics and company-specific issues on the fund’s short-term results. Understanding these individual contributions is crucial for appreciating the overall dip in the fund's value relative to the benchmark.
Strategic Outlook Amidst Market Volatility
Despite the recent setback, the Wasatch Emerging India Fund remains steadfast in its long-term investment philosophy, anchored in the belief that India's fundamental growth story is robust and enduring. The fund's strategy continues to prioritize identifying and investing in companies that possess strong business models and durable competitive advantages, which are critical for navigating diverse economic landscapes. This approach is rooted in the conviction that such enterprises are better positioned to adapt and thrive through various economic cycles, including periods of geopolitical uncertainty and market volatility.
Looking beyond the immediate quarterly results, the fund emphasizes a selective investment process focused on high-quality businesses capable of sustained growth. The management team's confidence in India's secular growth trajectory underpins this strategy, reinforcing the commitment to seeking out companies that demonstrate resilience and adaptability. By focusing on these core principles, the Wasatch Emerging India Fund aims to capitalize on the country's extensive economic potential over the long term, thereby mitigating the impact of short-term market fluctuations and delivering sustained value to its investors.