The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 15, 2026
Ariel Fund declined -4.45% net of fees in the third quarter of 2026, modestly trailing the Russell 2500 Value Index's -4.36% return while outperforming the Russell 2000 Value Index's -4.91% loss. Year-to-date and multi-year performance reflected annualized 1-, 5-, and 10-year net returns of +10.38%, +5.85%, and +9.48%, respectively. Portfolio posture maintained a concentrated small- and mid-cap value exposure, resisting market crowding in mega-cap technology and actively recycling capital away from deteriorating situations into high-conviction ideas. The investment team highlights an increasingly bifurcated equity landscape characterized by persistent inflation, elevated Treasury yields following the Federal Reserve's September rate increase, and concentrated artificial intelligence enthusiasm among large-cap giants. With macroeconomic volatility persisting and the cost of capital remaining elevated, the fund anticipates an investment regime shifting toward fundamental earnings delivery rather than speculative multiple expansion. Management views heightened volatility constructively, seeking to exploit disconnects between market sentiment and durable company cash generation. Key quarterly performance contributors included top contributor Zebra Technologies Corporation (5.0% weighting), Charles River Laboratories International (4.6%), and Bio-Rad Laboratories (4.6%), each benefiting from solid earnings execution and operational initiatives. Detractors included Norwegian Cruise Line Holdings (2.5%) and Scotts Miracle-Gro Company (2.5%). The fund fully liquidated Leslie's Inc. (0.0%) due to weakening balance sheet leverage and operational deterioration, while immediately exiting spinoff distributions ADI Global Distribution (0.0%) and Midera Food Processing (0.0%) to reallocate capital into higher-conviction holdings.
Patient, fundamental investing in high-quality small- and mid-cap companies with durable competitive moats, sound balance sheets, and mispriced long-term earnings power will deliver superior risk-adjusted returns over full market cycles.
Ariel anticipates continued equity market volatility driven by uncertainties surrounding inflation, monetary policy trajectory, and economic growth. However, management views volatility as an advantageous environment that enables patient investors to acquire quality businesses with durable earnings power, strong balance sheets, and cash generation at significant discounts to intrinsic value.
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