| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.7% | 0.5% | 8.8% |
The abrdn U.S. Small Cap Equity Fund gained during the quarter but underperformed the Russell 2000 Index. Key detractors included Corcept Therapeutics, which fell after FDA approval failure, e.l.f. Beauty due to declining organic sales, and Stride from technology implementation issues. Positive contributors included Alphatec with strong earnings and market share gains, Aritzia benefiting from accelerating demand, and Viavi Solutions following strong results and strategic acquisition. The fund initiated several new positions targeting secular growth themes, including Helios Technologies for industrial recovery, AZZ for infrastructure and reshoring trends, Impinj for RFID technology adoption, CarGurus for automotive platform growth, and ArcBest for freight cycle recovery. Despite a prolonged government shutdown creating near-term headwinds, the manager remains optimistic about small-cap prospects driven by infrastructure investment, technological innovation, and supply chain reshoring. The strategy emphasizes higher-quality businesses that offer resilience against macroeconomic volatility while capitalizing on structural tailwinds for sustainable long-term growth.
The fund focuses on higher-quality small-cap businesses positioned to benefit from secular trends including infrastructure investment, technological innovation, and supply chain reshoring, while offering resilience against macroeconomic headwinds.
Despite the recent market turbulence, we remain optimistic about the long-term outlook for domestic small-cap stocks. Secular trends such as increased infrastructure investment, accelerating technological innovation and the reshoring of supply chains present compelling opportunities for smaller companies.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 29 2026 | 2025 Q4 | ARCB, ARQT, ATEC, ATZ.TO, AZZ, CARG, CORT, ELF, HLIO, ITGR, LRN, LZB, OSW, PI, REVG, SUPN, TRNO, VIAV | healthcare, industrials, infrastructure, Quality, small caps, technology | CORT | The fund focuses on US small-cap equities, which rose over the quarter but lagged broader US equities. The manager emphasizes higher-quality small-cap businesses that offer resilience against macroeconomic headwinds while benefiting from secular trends. The manager sees compelling opportunities from increased infrastructure investment as a secular trend. New position AZZ is positioned to benefit from grid modernization and domestic manufacturing reshoring. Reshoring of supply chains presents compelling opportunities for smaller companies. AZZ is positioned to benefit from domestic manufacturing reshoring trends, while the broader strategy targets companies that can capitalize on this shift. The fund initiated a position in AZZ, which is positioned to benefit from accelerating data-center development. This reflects the manager's view on the growth potential in data center infrastructure. |
| Oct 28 2025 | 2025 Q3 | - | infrastructure, innovation, reshoring, small caps, tariffs | - | The fund underperformed the Russell 2000 Index despite strong showings from healthcare and semiconductor holdings like Ligand and Materion. Management cited tariff uncertainty, rate cuts, and supply chain reshoring as major macro factors shaping small-cap performance. The team remains optimistic on domestic small caps, citing secular tailwinds from infrastructure spending, technology innovation, and reshoring trends. |
| Jul 27 2025 | 2025 Q2 | ELF | infrastructure, reshoring, Small Cap Equities, tariffs, Technological Innovation | - | |
| Mar 31 2025 | 2025 Q1 | MWA, WERN | - | - | |
| Jun 30 2024 | 2024 Q2 | ATKR, BOOT, CORT | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure |
Infrastructure SpendingPlaying on the continued theme of infrastructure spending, defense and energy sustainability, positions in Industrial and Energy sectors including Oshkosh, Coterra, OSI Systems, and Herc Holdings added positively to performance. |
Defense Energy Industrial Government Sustainability | |
OnshoringReshoring of supply chains presents compelling opportunities for smaller companies. AZZ is positioned to benefit from domestic manufacturing reshoring trends, while the broader strategy targets companies that can capitalize on this shift. |
Reshoring Supply Chains Manufacturing | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
| 2025 Q3 |
Innovation |
|
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
Tariffs |
||
| 2025 Q2 |
InfrastructureDigital 9 Infrastructure holds telecom infrastructure assets including Arqiva stake. Despite poor 2025 performance, potential capital returns and asset sales could unlock value. Infrastructure assets provide defensive characteristics. |
Telecom Infrastructure Digital Infrastructure |
Small Cap |
||
Tariffs |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 29, 2026 | Fund Letters | Christopher Colarik | CORT | Corcept Therapeutics Incorporated | Health Care | Biotechnology | Bear | NASDAQ | biotechnology, drug approval, Pipeline Uncertainty, Regulatory risk | Login |
| TICKER | COMMENTARY |
|---|---|
| ARCB | ArcBest is a transportation and logistics company. Based on our view, its diversified operations and strategic investments position it to benefit from a freight cycle recovery. |
| ARQT | Arcutis Biotherapeutics is a pharmaceutical company specialising in the treatment of common dermatological conditions. We believe that the company's product differentiation, expanding market access and commercial execution create durable advantages to drive sales growth and profitability. |
| ATEC | Alphatec's shares rose and contributed to performance after a strong earnings report highlighted accelerating sales, market share gains in the spine segment and improved profitability. |
| ATZ.TO | Aritzia was also positive. Its shares gained as demand accelerated through the quarter, with new store openings and a mobile application launch reinforcing prospects for sustained growth. |
| AZZ | AZZ is a leading provider of metal coating solutions for construction, infrastructure and industrial end markets. We believe AZZ is well positioned to benefit from secular demand tied to grid modernisation, domestic manufacturing reshoring and accelerating data-centre development. |
| CARG | CarGurus is a multinational automotive platform that connects consumers and dealers. With a leading digital marketplace, expanding product suite and increasing dealer engagement, we believe CarGurus is well positioned to deepen customer relationships and drive sustained growth. |
| CORT | Corcept Therapeutics is a biopharmaceutical company focused on developing drugs that modulate cortisol activity, with its flagship product Korlym approved for Cushing's syndrome and a growing pipeline in oncology and metabolic disorders. We feel Corcept is at an inflection point as it expands beyond its core indication, driven by promising Phase 3 data for relacorilant in adrenal cancer and other indications. However, during the quarter, the stock was pressured due to concerns about slower Korlym sales growth and uncertainty around timing of pipeline approvals. |
| ELF | e.l.f. Beauty's earnings report included a decline in core domestic sales growth and fiscal year guidance below expectations. We continue to hold the stock, as the company offers a strong product set addressing a favorable spending category, though additional progress is needed to restore positive fundamental and share-price performance. |
| HLIO | Helios Technologies is an industrial technology company specialising in highly engineered motion control solutions. We believe the company's improved execution could continue to drive margin expansion, well-positioning it to benefit from a cyclical recovery across major industrial end-markets. |
| ITGR | Integer Holdings Corporation (ITGR), which specializes in the design, development, and production of medical technologies and components. In late October, Integer's stock sank more than 30% after the company significantly lowered its outlook for growth and margin expansion in 2026, as several products experienced slower market adoption than was expected. But management expects these headwinds to be short-lived, with a robust portfolio of higher growth and margin products coming to market, which should allow the company to get back on track. The company still expects to outgrow its industry peers by 2% while growing earnings before interest and taxes (EBIT) at twice the rate of sales. Even better, the company announced a $200 million stock repurchase authorization after the selloff, increasing our conviction that the shares are materially undervalued. This confidence drove us to increase our exposure to Integer in the quarter. |
| LRN | Stride is an education technology company that provides online education to K-12 students through virtual public schools and learning programs. The stock sold off more than 50% on earnings due to a failed platform upgrade that resulted in major student enrollment losses, poor customer experience, and high withdrawal rates. Given the seasonality inherent in their business model (fall enrollment is the main driver of fiscal year results), investors quickly moved on with the lack of an imminent catalyst until next fall. We eliminated our position during the quarter. |
| OSW | OneSpaWorld is the leading provider of health and wellness services to cruise operators. We believe the company's strong labour management, logistics capabilities and continuous operational improvement can drive sustained growth. |
| PI | Impinj is a leading semiconductor manufacturer specialising in radio frequency identification (RFID) technology. While RFID adoption is accelerating, it is still in the early stages of replacing legacy identification solutions, and we believe Impinj is well positioned to capitalise on this technological shift. |
| REVG | REV Group (REVG) is a specialty vehicle manufacturer. Most of the company's value is in its municipal business where REV Group makes fire trucks and ambulances. The company has been reporting significant backlog and pricing growth in concert with Pierce Manufacturing (owned by Osh Kosh (OSK), another Fund holding), their primary competitor in the fire truck business. CEO Mark Skonieczny has led a significant operational restructuring, sold off the less profitable bus business, and used the proceeds to buy back stock at attractive prices. |
| SUPN | Supernus Pharmaceuticals is a specialty pharmaceutical company focused on the treatment of diseases in the central nervous system. We believe the company could benefit from its differentiated products in attention-deficit/hyperactivity disorder and Parkinson's disease. |
| VIAV | Viavi Solutions' shares rose after the company reported strong third-quarter results and successfully completed the acquisition of a high-speed Ethernet testing business, expanding its exposure to data-centre end markets. |
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