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Aristotle Small Cap Equity Fund tops Russell 2000 drag in Q2 2026
Aristotle Capital Boston, LLC shared its Q2 2026 investor letter for the Aristotle Small Cap Equity Fund, saying the fund returned 13.7% in the quarter while the Russell 2000 gained 21.5%, with stock selection in information technology and industrials weighing on results despite positive allocation effects.
The letter pointed to several winners and detractors, including MACOM Technology Solutions and Mercury Systems as top contributors tied to strong demand in semiconductor, aerospace, and defense markets, while Alamos Gold and Huron Consulting Group hurt performance due to operational challenges, weaker gold prices, and concerns tied to AI disruption.
During the quarter, the fund initiated positions in IPG Photonics and UMB Financial, citing opportunities linked to advanced manufacturing, automation, reshoring trends, and diversified financial services, and 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, supported by expectations for higher M&A activity, improving domestic manufacturing from reshoring and infrastructure investment, and a favorable regulatory environment, according to the fund’s investor letter.
Latest closeGold $4,432.00 ▲1.6%|Russell 2000 3,068.42 ▲0.5%