Wasatch Ultra Growth Targets Industry Disruptors
This fund invests in small firms intent on wiping out the competition.

Investing in small, fast-growing firms isn't for the faint of heart. Over the past 10 years, the Russell 2000 Growth index, which tracks stocks in small, growing firms, has been 42% more volatile than the broad market benchmark, Standard & Poor's 500-stock index. Finding a winning firm still in its infancy can provide a huge payoff, but investors hoping to get in on the ground floor with the next Amazon.com (symbol AMZN) or Netflix (NFLX) are in for bumpy ride.
The fund dedicates about 20% of assets to what Malooly calls ballast stocks—growing firms, such as discount retailer Five Below (FIVE), that are unlikely to be roiled by competition—to add stability to the portfolio's returns.
But the bulk of the portfolio is dedicated to companies that have the potential to unseat the competition. These firms have business models that incumbent firms can't compete with, or they offer lower price points that competitors can't match. Ra Medical Systems (RMED), for instance, makes a sleep apnea treatment for patients who don't want to wear a mask; and Wayfair (W) sells furniture online at low costs. Malooly particularly favors firms with hefty recurring revenues, which he says makes growth in the business more predictable. Firms in Ultra Growth's portfolio boost revenues at a 21%-to-23% annualized clip, on average, says Malooly.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Since Malooly took the helm in early 2012, Ultra Growth has posted an annualized return of 14.8%, an average of 3.3 percentage points per year ahead of the Russell 2000 Growth index. The fund's 1.25% expense ratio isn't a bargain, but it's in line with the typical fund that invests in small, growing firms.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on Kiplinger.com. He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.
-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
Stretch Your Holiday Shopping Budget Further with These Under-$50 Gifts That Don't Feel Cheap
Amazon October Prime Day is the perfect chance to nab some under-$50 gifts that feel more expensive than they are (because normally they would be).
-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
Stocks Fall Again as Big Tech Struggles: Stock Market Today
The economic calendar was a bright spot for Wall Street Wednesday, with new home sales climbing to a three-year high.
-
Stocks Drop on Mag 7 Weakness: Stock Market Today
The main indexes retreated from all-time-high territory as several of Wall Street's biggest stocks declined.
-
Dow Hits New Intraday High on Fed Day: Stock Market Today
Not even the most important stock in the world could keep the oldest equity index down on a significant day for markets.
-
Dow Gains 617 Points as Rate Cuts Near: Stock Market Today
Wednesday's economic data didn't shift Wall Street's expectations that the Fed is preparing for a rate cut at next week's meeting.
-
Stocks Struggle to Start Nvidia Week: Stock Market Today
Another important week for the stock market starts on a risk-off note.
-
Dow Rips 846 Points to New All-Time High: Stock Market Today
Fed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
-
Tech Sells Off While Trump Stirs the Fed: Stock Market Today
We've reached another important part of earnings season, though markets remain captivated by the president, the Fed, and interest rate policy.