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Aristotle Small Cap Equity Fund returned 13.7% in Q2 as holdings shifted
The fund trailed the Russell 2000 Index in Q2, returning 13.69% versus 21.49%, and exited Americold Realty Trust, Byline Bancorp, and Verra Mobility.
Aristotle Small Cap Equity Fund, managed by Aristotle Capital Boston, LLC, returned 13.69% in the second quarter of 2026, according to its Q2 2026 investor letter, lagging the Russell 2000 Index, which gained 21.49% over the same period.
In the letter, the fund said security selection in information technology and industrials weighed on performance despite positive allocation effects. It highlighted MACOM Technology Solutions and Mercury Systems as top contributors, citing strong demand in semiconductor, aerospace, and defense markets.
The fund also pointed to detractors including Alamos Gold and Huron Consulting Group, attributing their results to operational challenges, weaker gold prices, and investor concerns around potential artificial intelligence disruption.
During the quarter, the fund initiated positions in IPG Photonics and UMB Financial and exited Americold Realty Trust, Byline Bancorp, and Verra Mobility. Looking ahead, management said it remains constructive on U.S. small caps, citing attractive valuations versus large caps and expectations for earnings growth to accelerate into late 2026 and 2027, supported by factors including increased merger and acquisition activity, reshoring-linked domestic manufacturing improvement, infrastructure investment, and a favorable regulatory environment.
Latest closeGold $4,432.00 ▲1.6%|Russell 2000 3,068.42 ▲0.5%