Hood River Capital - New Opportunities Fund

Investor Summary

The Hood River New Opportunities Fund is managed by co-founders Brian P. Smoluch and David G. Swank, both born in 1972 and graduates of the University of Virginia with MBAs from Harvard Business School and Dartmouth's Tuck School respectively. Both co-founded Hood River Capital Management in 2013 after extensive experience in small and mid-cap growth investing, with Smoluch serving as CEO and Swank as President. The fund launched on August 5, 2024, and has delivered exceptional performance with institutional shares returning 35.76% for one year and 51.20% annualized inception-to-date returns. The management team employs thorough fundamental analysis, engaging with company management, competitors, customers, and suppliers to identify high-conviction opportunities in the relatively inefficient small and mid-cap market space.

Fund Strategy

Hood River Capital Management focuses on generating consistent and persistent outcomes for small- and mid-cap growth investors, believing that U.S. and international small- and mid-cap markets are relatively inefficient, creating opportunities for research-driven value creation. Research is at the core of their investment process, with the firm constructing portfolios of high-quality companies expected to grow earnings faster than the market, trade at attractive valuations, and demonstrate a high likelihood of exceeding Wall Street forecasts. The New Opportunities Fund employs stock selection driven by proprietary fundamental research, maintaining a long-only portfolio of 80-120 growth stocks, with a company becoming a purchase candidate only if portfolio managers are convinced there is a catalyst in place to provide at least 15% stock price appreciation over the next 12 months.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
44.07%	2.24%	2.24%

Executive Summary

Hood River's New Opportunities Fund delivered +2.24% in Q1 2026, outperforming the Russell 2500 Growth Index by 576 basis points despite late-quarter volatility from geopolitical developments and energy price spikes. The fund maintains its core thesis of identifying businesses with durable growth profiles through bottom-up research, believing fundamentals ultimately drive long-term outcomes over macro developments. Stock selection was the primary driver of outperformance, with information technology, industrials, and materials contributing most positively. The fund's positioning in AI-beneficiary companies proved prescient as traditional software experienced multiple compression while AI-levered holdings generated solid returns. Management sees AI adoption maturing from evaluation to active implementation across organizations. Despite geopolitical uncertainty from Iran conflict affecting oil prices, the team has not made material portfolio changes, instead focusing on companies with strong execution and pricing power. Current valuations appear attractive with small/mid-caps trading below historical premiums to large-caps, creating opportunities in the current dispersed, volatility-driven environment.

Core Thesis

Focus on identifying businesses with durable growth profiles, improving fundamentals, and attractive valuations through disciplined, bottom-up research process, believing long-term outcomes are ultimately driven by company execution and fundamental progress rather than macro developments.

Forward Outlook

Finding a broad set of compelling, bottom-up investment opportunities driven by powerful secular trends. The current environment characterized by elevated dispersion, macro-driven volatility, and a market periodically disconnected from fundamentals is precisely the type of backdrop in which their research-intensive process has historically thrived.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Mar 31 2026	2026 Q1	-	AI, energy, Geopolitical, growth, industrials, small caps, technology, Valuations	-	Hood River outperformed by 576bps in Q1 2026 through disciplined stock selection, particularly benefiting from AI-focused positioning while avoiding traditional software. Despite geopolitical volatility and energy price spikes, management maintains bottom-up approach without tactical shifts. Small/mid-cap valuations appear attractive below historical premiums, creating opportunities in current dispersed market environment for research-intensive processes.
Jan 12 2026	2025 Q4	-	AI, earnings, growth, Outperformance, small caps, stock selection, technology, Valuations	-	Hood River's New Opportunities Fund significantly outperformed in Q4 2025 through superior stock selection, particularly in AI-related technology investments. The fund returned 35.76% for the full year versus 10.31% for the Russell 2500 Growth benchmark. Despite elevated valuations across small and mid-cap growth, the team maintains confidence in their disciplined approach targeting companies with clear earnings visibility and sustainable growth profiles.
Oct 20 2025	2025 Q3	-	AI, Drones, growth, infrastructure, semiconductors, SMID Cap, technology	-	Hood River's New Opportunities Fund significantly outperformed in Q3 2025, driven by stock selection in AI infrastructure beneficiaries including semiconductors, energy, and drone technology. The fund maintains focus on companies with tangible AI earnings power while reducing overall AI tilt. Compelling SMID-cap valuations and secular growth trends create attractive opportunities for active managers.
Jun 30 2025	2025 Q2	-	earnings, fundamentals, growth, small caps, Trade Policy, valuation	-	Hood River's fundamental research process delivered strong Q2 outperformance as markets refocused on company fundamentals after macro volatility. The fund maintains defensive positioning around trade risks while capitalizing on attractive Small/Mid Cap Growth valuations. Conservative corporate guidance may create earnings revision opportunities, with the portfolio well-positioned for both company-specific and broader economic tailwinds.
Mar 31 2025	2025 Q1	FAVN	AI, earnings, growth, industrials, small caps, technology, valuation	-	Hood River's small/mid-cap growth fund underperformed in Q1 2025 due to geopolitical tensions and AI infrastructure concerns, but managers see opportunity in current volatility. With Russell 2500 Growth trading at 25% discount and focus on earnings-driven companies with strong fundamentals, they maintain conviction in long-term growth prospects despite near-term headwinds.
Dec 31 2024	2024 Q4	-	Deregulation, growth, Outperformance, rates, small caps, valuation	-	Hood River's small-cap growth fund outperformed by 543 bps in Q4 through superior stock selection in industrials, financials, and consumer discretionary. Management sees 2025 opportunities from expected deregulation benefiting small businesses, while small-mid cap valuations appear attractive relative to expensive large caps. Bottom-up fundamental research process continues demonstrating resilience despite market volatility.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Mar 31 2026

2026 Q1

AI, energy, Geopolitical, growth, industrials, small caps, technology, Valuations

Hood River outperformed by 576bps in Q1 2026 through disciplined stock selection, particularly benefiting from AI-focused positioning while avoiding traditional software. Despite geopolitical volatility and energy price spikes, management maintains bottom-up approach without tactical shifts. Small/mid-cap valuations appear attractive below historical premiums, creating opportunities in current dispersed market environment for research-intensive processes.

Jan 12 2026

2025 Q4

AI, earnings, growth, Outperformance, small caps, stock selection, technology, Valuations

Hood River's New Opportunities Fund significantly outperformed in Q4 2025 through superior stock selection, particularly in AI-related technology investments. The fund returned 35.76% for the full year versus 10.31% for the Russell 2500 Growth benchmark. Despite elevated valuations across small and mid-cap growth, the team maintains confidence in their disciplined approach targeting companies with clear earnings visibility and sustainable growth profiles.

Oct 20 2025

2025 Q3

AI, Drones, growth, infrastructure, semiconductors, SMID Cap, technology

Hood River's New Opportunities Fund significantly outperformed in Q3 2025, driven by stock selection in AI infrastructure beneficiaries including semiconductors, energy, and drone technology. The fund maintains focus on companies with tangible AI earnings power while reducing overall AI tilt. Compelling SMID-cap valuations and secular growth trends create attractive opportunities for active managers.

Jun 30 2025

2025 Q2

earnings, fundamentals, growth, small caps, Trade Policy, valuation

Hood River's fundamental research process delivered strong Q2 outperformance as markets refocused on company fundamentals after macro volatility. The fund maintains defensive positioning around trade risks while capitalizing on attractive Small/Mid Cap Growth valuations. Conservative corporate guidance may create earnings revision opportunities, with the portfolio well-positioned for both company-specific and broader economic tailwinds.

Mar 31 2025

2025 Q1

FAVN

AI, earnings, growth, industrials, small caps, technology, valuation

Hood River's small/mid-cap growth fund underperformed in Q1 2025 due to geopolitical tensions and AI infrastructure concerns, but managers see opportunity in current volatility. With Russell 2500 Growth trading at 25% discount and focus on earnings-driven companies with strong fundamentals, they maintain conviction in long-term growth prospects despite near-term headwinds.

Dec 31 2024

2024 Q4

Deregulation, growth, Outperformance, rates, small caps, valuation

Hood River's small-cap growth fund outperformed by 543 bps in Q4 through superior stock selection in industrials, financials, and consumer discretionary. Management sees 2025 opportunities from expected deregulation benefiting small businesses, while small-mid cap valuations appear attractive relative to expensive large caps. Bottom-up fundamental research process continues demonstrating resilience despite market volatility.

QUARTER	THEMES	TAGS
2026 Q1	AI AI adoption cycle is maturing with companies actively implementing AI across organizations rather than just evaluating it. Use cases are expanding into tangible operational improvements including optimizing sales processes, enhancing customer interactions, and improving workforce productivity. Companies are hiring fewer incremental employees per unit of growth which should benefit margins over time.	Artificial Intelligence Automation Productivity Software Implementation
	Energy Geopolitical conflict with Iran has introduced uncertainty with oil prices responding sharply. However, energy as a share of consumer spending remains near historical lows and the US maintains structural advantages in domestic energy production. Elevated oil prices have not materially altered hyperscaler capital expenditure plans.	Oil Geopolitical Iran Energy Prices Inflation
	Small Caps Russell 2500 Growth Index trades at roughly 20.7x 2027 earnings, a modest premium to large-cap benchmark but well below the 20% premium that small and mid-caps have historically commanded. Current environment characterized by elevated dispersion and macro-driven volatility creates opportunities for research-intensive processes.	Valuations Growth Mid Cap Dispersion Research
2025 Q4	AI AI remains a powerful secular theme with robust demand trends and earnings visibility, particularly in supporting infrastructure. However, the fund has selectively moderated exposure where expectations have moved ahead of fundamentals, maintaining a more balanced exposure profile entering 2026.	Artificial Intelligence Infrastructure Capital Expenditure Secular Growth
	Small Caps Small and mid-cap growth stocks ended 2025 trading at approximately 21.8x 2027 earnings, representing a slight premium to the S&P 500. While absolute valuations are elevated relative to historical norms, they appear attractively valued on a relative basis given the typical 20% premium to large-cap peers.	Valuations Russell 2500 Growth Relative Value
	Earnings Earnings results and company-specific developments remained supportive of long-term growth trajectories throughout Q4. The elevated valuation environment increases the importance of execution, as companies will need to meet or exceed guidance and market expectations.	Execution Guidance Growth Trajectories Fundamentals
2025 Q3	AI The buildout of AI infrastructure and associated power needs continue to reverberate across the economy. Demand for semiconductors, energy, industrial capacity, and drone technology remains robust. Nearly half of U.S. GDP growth in the first half of 2025 was driven by technology capital expenditures, with this elevated pace of investment expected to continue.	Infrastructure Semiconductors Power Capital Expenditures Technology
	Semiconductors Semiconductor demand remains robust driven by AI infrastructure buildout. Infrastructure beneficiaries have largely delivered beat-and-raise quarters. The portfolio maintains exposure to companies with tangible earnings power from AI adoption rather than broad thematic exposure.	AI Infrastructure Beat-and-raise Earnings Power Technology Growth
	Drones Drone technology demand remains robust as part of the broader AI infrastructure buildout and associated ripple effects extending beyond the technology sector itself.	Technology Infrastructure Defense Industrial Growth
2025 Q2	Trade Policy Tariffs remain a headline topic but the market is growing more comfortable with tapering trade tensions over time. The fund focuses on companies less exposed to global trade volatility to manage risk while seeking upside.	Tariffs Trade Global Volatility Risk
	Earnings Companies generally guided conservatively given tariff uncertainty, which may create a good earnings revisions setup for the remainder of the year. Investor focus returned to earnings revisions and margin trends.	Revisions Guidance Conservative Margins Setup
	Small Caps The US Small/Mid Cap Growth group continues to look attractive on a relative basis. The Russell 2500 Growth Index is at parity to the S&P 500 for positive-earning companies, below its typical premium to the larger-cap index.	Valuation Relative Premium Attractive Growth
2025 Q1	AI Over the past three years, AI and its supporting infrastructure has been identified as a primary global growth driver, making it a substantial component of technology and industrial exposure. Despite heightened uncertainty this quarter from concerns about scalability and capital expenditures, management discussions reinforce positive outlook with robust spending projections. The launch of China's Deepseek has actually catalyzed infrastructure expansion plans, with capital expenditures expected to approach 20% on a broader scale versus market expectations of 8% in 2026.	Infrastructure Capital Expenditures Technology Growth Deepseek
	Small Caps The fund focuses on small/mid-cap securities which present greater risk but also opportunity. Market volatility remains elevated due to mixed macroeconomic signals, creating uncertainty that can unsettle markets but simultaneously creates opportunities. The Russell 2500 Growth is trading at a ~25% discount despite typically trading at a slight premium, making US small/mid caps attractive from a valuation perspective going forward.	Volatility Valuation Russell 2500 Discount Opportunity
	Earnings Despite a positive earnings season for portfolio companies in the first three months of 2025, broader risk-off environment drove stock correlations higher and turned investors' attention away from fundamentals and earnings growth. The strategy continues to build a portfolio focused on positive earnings surprises and invested in companies with strong fundamentals, which should ultimately receive recognition from the broader market.	Fundamentals Growth Surprises Recognition Performance
2024 Q4	Small Caps The fund focuses on U.S. small/mid-cap growth sector, tracking the Russell 2500 Growth Index. Small-mid cap growth appears much more attractive than large caps, trading at an 8% discount to the S&P 500 for 2026 compared to a typical premium of 20%. Expected deregulation should benefit small businesses, supporting favorable outlook on small-mid caps heading into 2025.	Russell 2500 Growth Valuation Deregulation Outperformance
	Deregulation The incoming administration is expected to prioritize deregulation which should streamline permitting processes and cut through bureaucratic red tape. This shift is anticipated to have positive impacts broadly on the economy, including increasing energy supply, improving merger and acquisition activity, and accelerating commercial loan growth.	Permitting Energy M&A Commercial Loans Economic Impact
	Rates The Federal Reserve influenced market movements by hinting at a more gradual decrease in interest rates than previously anticipated. With inflation remaining moderately above the 2% target and the economy performing well, there is no immediate pressure to decrease rates. Potential tariffs could spur inflationary pressures, prompting the Fed to await further developments.	Federal Reserve Inflation Tariffs Monetary Policy Economic Data

QUARTER

THEMES

AI

AI adoption cycle is maturing with companies actively implementing AI across organizations rather than just evaluating it. Use cases are expanding into tangible operational improvements including optimizing sales processes, enhancing customer interactions, and improving workforce productivity. Companies are hiring fewer incremental employees per unit of growth which should benefit margins over time.

Artificial Intelligence Automation Productivity Software Implementation

Energy

Geopolitical conflict with Iran has introduced uncertainty with oil prices responding sharply. However, energy as a share of consumer spending remains near historical lows and the US maintains structural advantages in domestic energy production. Elevated oil prices have not materially altered hyperscaler capital expenditure plans.

Oil Geopolitical Iran Energy Prices Inflation

Small Caps

Russell 2500 Growth Index trades at roughly 20.7x 2027 earnings, a modest premium to large-cap benchmark but well below the 20% premium that small and mid-caps have historically commanded. Current environment characterized by elevated dispersion and macro-driven volatility creates opportunities for research-intensive processes.

Valuations Growth Mid Cap Dispersion Research

2025 Q4

AI

AI remains a powerful secular theme with robust demand trends and earnings visibility, particularly in supporting infrastructure. However, the fund has selectively moderated exposure where expectations have moved ahead of fundamentals, maintaining a more balanced exposure profile entering 2026.

Artificial Intelligence Infrastructure Capital Expenditure Secular Growth

Small Caps

Small and mid-cap growth stocks ended 2025 trading at approximately 21.8x 2027 earnings, representing a slight premium to the S&P 500. While absolute valuations are elevated relative to historical norms, they appear attractively valued on a relative basis given the typical 20% premium to large-cap peers.

Valuations Russell 2500 Growth Relative Value

Earnings

Earnings results and company-specific developments remained supportive of long-term growth trajectories throughout Q4. The elevated valuation environment increases the importance of execution, as companies will need to meet or exceed guidance and market expectations.

Execution Guidance Growth Trajectories Fundamentals

2025 Q3

AI

The buildout of AI infrastructure and associated power needs continue to reverberate across the economy. Demand for semiconductors, energy, industrial capacity, and drone technology remains robust. Nearly half of U.S. GDP growth in the first half of 2025 was driven by technology capital expenditures, with this elevated pace of investment expected to continue.

Infrastructure Semiconductors Power Capital Expenditures Technology

Semiconductors

Semiconductor demand remains robust driven by AI infrastructure buildout. Infrastructure beneficiaries have largely delivered beat-and-raise quarters. The portfolio maintains exposure to companies with tangible earnings power from AI adoption rather than broad thematic exposure.

AI Infrastructure Beat-and-raise Earnings Power Technology Growth

Drones

Drone technology demand remains robust as part of the broader AI infrastructure buildout and associated ripple effects extending beyond the technology sector itself.

Technology Infrastructure Defense Industrial Growth

2025 Q2

Trade Policy

Tariffs remain a headline topic but the market is growing more comfortable with tapering trade tensions over time. The fund focuses on companies less exposed to global trade volatility to manage risk while seeking upside.

Tariffs Trade Global Volatility Risk

Earnings

Companies generally guided conservatively given tariff uncertainty, which may create a good earnings revisions setup for the remainder of the year. Investor focus returned to earnings revisions and margin trends.

Revisions Guidance Conservative Margins Setup

Small Caps

The US Small/Mid Cap Growth group continues to look attractive on a relative basis. The Russell 2500 Growth Index is at parity to the S&P 500 for positive-earning companies, below its typical premium to the larger-cap index.

Valuation Relative Premium Attractive Growth

2025 Q1

AI

Over the past three years, AI and its supporting infrastructure has been identified as a primary global growth driver, making it a substantial component of technology and industrial exposure. Despite heightened uncertainty this quarter from concerns about scalability and capital expenditures, management discussions reinforce positive outlook with robust spending projections. The launch of China's Deepseek has actually catalyzed infrastructure expansion plans, with capital expenditures expected to approach 20% on a broader scale versus market expectations of 8% in 2026.

Infrastructure Capital Expenditures Technology Growth Deepseek

Small Caps

The fund focuses on small/mid-cap securities which present greater risk but also opportunity. Market volatility remains elevated due to mixed macroeconomic signals, creating uncertainty that can unsettle markets but simultaneously creates opportunities. The Russell 2500 Growth is trading at a ~25% discount despite typically trading at a slight premium, making US small/mid caps attractive from a valuation perspective going forward.

Volatility Valuation Russell 2500 Discount Opportunity

Earnings

Despite a positive earnings season for portfolio companies in the first three months of 2025, broader risk-off environment drove stock correlations higher and turned investors' attention away from fundamentals and earnings growth. The strategy continues to build a portfolio focused on positive earnings surprises and invested in companies with strong fundamentals, which should ultimately receive recognition from the broader market.

Fundamentals Growth Surprises Recognition Performance

2024 Q4

Small Caps

The fund focuses on U.S. small/mid-cap growth sector, tracking the Russell 2500 Growth Index. Small-mid cap growth appears much more attractive than large caps, trading at an 8% discount to the S&P 500 for 2026 compared to a typical premium of 20%. Expected deregulation should benefit small businesses, supporting favorable outlook on small-mid caps heading into 2025.

Russell 2500 Growth Valuation Deregulation Outperformance

Deregulation

The incoming administration is expected to prioritize deregulation which should streamline permitting processes and cut through bureaucratic red tape. This shift is anticipated to have positive impacts broadly on the economy, including increasing energy supply, improving merger and acquisition activity, and accelerating commercial loan growth.

Permitting Energy M&A Commercial Loans Economic Impact

Rates

The Federal Reserve influenced market movements by hinting at a more gradual decrease in interest rates than previously anticipated. With inflation remaining moderately above the 2% target and the economy performing well, there is no immediate pressure to decrease rates. Potential tariffs could spur inflationary pressures, prompting the Fed to await further developments.

Federal Reserve Inflation Tariffs Monetary Policy Economic Data

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
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Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 31st March 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Energy

Small Caps

AI

Small Caps

Earnings

AI

Semiconductors

Drones

Trade Policy

Earnings

Small Caps

AI

Small Caps

Earnings

Small Caps

Deregulation

Rates

Investor Pitches

Current Portfolio as of ( 31st March 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Brian Smoluch Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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Hood River Capital – New Opportunities Fund