WASATCH FUNDS - Curian Clearing

MARCH 31, 2015 (UNAUDITED)
12. LINE OF CREDIT
Effective May 23, 2014, the Funds in the Trust renewed and amended agreements for two open lines of credit totaling
$300,000,000, one of which is $100,000,000 uncommitted, and the other of which is $200,000,000 committed, with State Street
Bank and Trust Company (together, the “Line”). The agreements, as amended, increased the amounts available on the Line from
the prior total of $75,000,000, with $25,000,000 uncommitted and $50,000,000 committed. The 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, or
(b) the overnight London Interbank Offered Rate (LIBOR) as in effect on the date of borrowing, plus a margin. Commitment fees
are pro-rated among the Funds based upon relative average net assets. Interest expense is charged directly to a Fund based upon
actual amounts borrowed by that Fund.
For the six months ended March 31, 2015, the following Funds had borrowings:
Average Daily
Borrowings
Number of
Days
Outstanding
Interest
Expense
Weighted
Average
Annualized
Interest Rate
Balance at
3/31/15
Emerging India Fund $ 178,230 5 $ 34 1.39% $115,656
Emerging Markets Select Fund 80,860 19 58 1.36% —
Emerging Markets Small Cap Fund 5,375,679 56 11,438 1.37% —
Frontier Emerging Small Countries Fund 15,653,728 5 3,022 1.39% —
Global Opportunities Fund 2,620,295 42 4,197 1.37% 536,277
International Growth Fund 17,199,278 32 21,093 1.38% —
Large Cap Value Fund 4,731,183 10 1,804 1.37% —
Income Fund 562,353 9 191 1.36% —
13. 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 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.
Non-Diversification Risk — A non-diversified fund can
invest a larger portion of its assets in the stocks of a limited
number of companies than a diversified fund, which means
it may have more exposure to the price movements of a single
security or small group of securities than funds that
diversify their investments among many companies. The
Emerging Markets Select Fund is non-diversified.
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, except the U.S. Treasury
Fund, 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. These risks are exaggerated for securities of
issuers tied economically to emerging and frontier market
countries. 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 Frontier Emerging Small Countries
Fund and International Opportunities Fund are 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
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