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Ariel Small Cap Value Fund posts 17.2% gross gain in Q2 2026
The fund matched the Russell 2000 Value Index on a gross basis, but lagged it on a net basis, while pointing to easing geopolitical tensions and lower oil prices as tailwinds.
Ariel Investments said its Small Cap Value Tax-Exempt Composite gained 17.19% gross and 17.04% net in the second quarter of 2026, tracking the Russell 2000 Value Index at the gross level but trailing the index’s 21.49% return for the quarter, according to the firm’s Q2 2026 investor letter.
The letter attributes the rebound to easing geopolitical tensions, lower oil prices, resilient earnings, and renewed strength in technology and AI-related stocks, alongside strong stock selection.
Ariel also said it is entering the second half with a measured outlook, citing uneven global growth, geopolitical risks, persistent inflation, and elevated borrowing costs as potential sources of volatility.
In the letter, the fund points to Knowles Corporation as an example holding. It describes Knowles as an electronic components company serving consumer and industrial applications, noting the stock closed around $36.08 per share on July 31, 2026, with a market capitalization of about $3.125 billion, and that the shares advanced after results exceeded revenue and profit expectations while the company continued share repurchases.
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