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 12, 2026
During the third quarter of 2026, the Heartland Value Fund declined 6.96% net of fees, underperforming the Russell 2000 Value Index decline of 4.91% and the S&P 500 gain of 2.30%. On a year-to-date basis, the Fund remains up 16.90% net of fees, closely tracking the Russell 2000 Value Index return of 16.96% and outpacing the S&P 500 return of 12.75%. Performance was bolstered by positive security selection within Health Care, Materials, and Communication Services, but hindered by negative selection in Energy, Industrials, and Technology alongside an underweight stance in outperforming pure-play refiners. The investment team noted that market attention shifted away from the artificial intelligence trade toward macroeconomic and geopolitical concerns, including rising Treasury yields, elevated energy prices, and interest-rate pressures. Despite short-term benchmark volatility, the managers argue that the broader backdrop for value investing is improving. Small-cap equities trade at a substantial valuation discount to large-cap equities, with the Fund trading at approximately 11x next-twelve-months earnings, representing an attractive 9.0% earnings yield compared to 5.3% for the S&P 500. Portfolio activity centered on derisking positions that experienced sharp appreciation earlier in the year while capitalizing on market overreactions. The Fund added to its position in Academy Sports and Outdoors following peer-induced weakness and initiated a new holding in hardware distributor Hillman Solutions. Additionally, portfolio holding Integer Holdings agreed to be acquired by KKR for $127 per share, marking the seventh holding acquired in 2026.
Disciplined bottom-up selection of high-quality small-cap businesses with sound balance sheets and attractive valuations will outperform top-down macro forecasting over the long term.
The backdrop for disciplined active stock-picking is noticeably improving as rising interest rates force investors to focus on business fundamentals and valuation multiples. With small caps trading at substantial discounts to large caps and yielding attractive earnings yields, selective bottom-up investing offers compelling risk-reward potential despite macroeconomic noise.
Moderate Conviction Bullish
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