34 BARRON’S December 7, 2020
FUND PROFILE
Talking With Ken Korngiebel
Lead Portfolio Manager, Wasatch Micro Cap
Finding
Quality in
Tiny Stocks
Photograph byKIM RAFF
T
he past 10 years in equity markets have been
the story of large-cap stocks: As the Ama-
zons and Alphabets of the world have out-
performed smaller companies, they have
also dominated investors’ attention. But Ken
Korngiebel sees plenty of reasons to focus on
the smallest of companies that have been
largely overlooked.
“No one has to care about the microcap universe,”
says Korngiebel, lead portfolio manager for the $1 billion
Wasatch Micro Capfund (ticker: WMICX). “People get
interested because it’s an active strategy that is showing
some value-add, as opposed to [one] the world is clam-
oring to get in.”
Yet the past decade has been powered by growth, and
investors who ignore tiny companies could be missing
out. Wasatch Micro Cap demonstrates that: The five-star
Morningstar bronze-medalist fund has beaten the Rus-
sell Microcap Index by a wide margin on a one-, three-,
five-, and 10-year basis. Its average annual return for the
past five years has been about 25%, and roughly 18% for
the past decade.
The fund does have a higher-than-average fee of 1.66%,
but Korngiebel says that’s because capacity is limited; as a
firm, Wasatch is quick to close funds. Also, researching
very small companies is more intensive than digging into
larger-cap firms, where information is more readily avail-
able. Last year, the Salt Lake City–based Korngiebel, 55,
said he flew more than 140,000 miles, mostly domesti-
cally, as part of the research process.
Korngiebel has spent his career in small-cap funds.
Before joining Wasatch in 2015, and becoming the
head of Micro Cap in 2017, he worked at Columbia
Management—now known as Columbia Threadneedle
Investments—and Montibus Capital Management.
The fund defines microcap as firms with a market
By DEBBIE CARLSON