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Aristotle Small Cap Equity Fund gains 13.7% in Q2 2026
The fund trailed the Russell 2000 by 7.8 percentage points as stock selection weighed on results, even as allocation effects were positive.
Aristotle Capital Boston, LLC highlighted Q2 2026 performance in its Small Cap Equity Fund investor letter, saying the fund returned 13.7% in the quarter. The result lagged the Russell 2000 Index, which gained 21.5%, with the firm attributing underperformance to security selection in information technology and industrials despite positive allocation effects.
The letter named MACOM Technology Solutions and Mercury Systems as top contributors, pointing to strong demand in semiconductor, aerospace, and defense markets. It also cited detractors including Alamos Gold and Huron Consulting Group, linking declines to operational challenges, weaker gold prices, and investor concerns about artificial intelligence disruption.
During the quarter, the fund initiated positions in IPG Photonics and UMB Financial, describing opportunities tied to advanced manufacturing, automation, reshoring trends, and diversified financial services. It also said it exited Americold Realty Trust, Byline Bancorp, and Verra Mobility.
Looking ahead, management said it remains constructive on U.S. small-cap equities, arguing valuations are attractive versus large caps and that earnings growth is expected to accelerate into late 2026 and 2027. The letter cited potential support from higher merger and acquisition activity, improving domestic manufacturing from reshoring and infrastructure investments, and a favorable regulatory environment, according to the investor letter.
Latest closeGold $4,432.00 ▲1.6%|Russell 2000 3,068.42 ▲0.5%