NCG Small Cap Growth Strategy

Investor Summary

Next Century Growth Investors was founded in November 1998 by Tom Press, CFA, who serves as Chairman, Portfolio Manager, and Partner. The firm is led by a seasoned management team including Bob Scott, CFA as CEO (joined 2000), Peter Capouch, CFA as President (joined 2003), Kaj Doerring as Portfolio Manager and Partner (joined 2005), and Tom Dignard, CFA as Portfolio Manager and Partner (joined 2013). The team has over 100 years combined investment experience working together at NCG. The firm is 80% owned by its active portfolio manager partners, maintaining independence and control over operations and investments. The partners have invested significant personal capital in the firm and into investment portfolios which are identical to the ones they manage for clients.

Fund Strategy

NCG seeks to generate long-term capital appreciation by investing in the fastest-growing and highest-quality companies in the US small cap growth universe. The firm believes the market inefficiently values high-quality companies with long-term growth opportunities. They employ a bottom-up fundamental research approach with diversified portfolios of 40-60 holdings, applying strict position and sector limits to manage risk. The investment process is team-based, involving collaborative research, quarterly growth screenings, extensive engagement with management teams, and fundamental financial analysis. The firm believes that a portfolio consisting of high-quality growth companies, combined with a strong sell discipline, will lead to both compounding of portfolio value and better performance than the unmanaged index over the long-term.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
12.02%	45.4%	42.36%

Executive Summary

Next Century Growth Investors' small cap strategy returned 45.4% in Q2 2026, outperforming the Russell 2000 Growth Index by nearly 2,000 basis points, driven by concentrated exposure to AI infrastructure, semiconductors, and industrials. Technology holdings returned 90-120% in aggregate, powered by renewed conviction in AI capex sustainability and the Philadelphia Semiconductor Index's best quarter on record. Industrials contributed meaningfully through data-center site development, electrical infrastructure, aerospace and defense, and reshoring-linked manufacturing. The manager trimmed AI-exposed positions in April and May after sharp gains and valuation expansion, redeploying capital into health care, industrials, financials, and software. Small caps posted their strongest first half since 1991, and the manager views conditions as especially favorable for continued broadening given accelerating earnings, attractive relative valuations, and improving breadth. The portfolio maintains overweight positions in technology and industrials, with 30% and 29% allocations respectively. Corporate earnings are on pace for strong 2026 growth, and the removal of the Q1 energy shock has taken meaningful downside risk out of the near-term picture. The manager expects shifting leadership and dispersion to reward disciplined, fundamentally driven active management.

Core Thesis

Next Century Growth Investors delivered exceptional Q2 2026 performance across all strategies, with small cap strategies up 44-49% net of fees, driven by concentrated exposure to AI infrastructure, semiconductors, and industrial holdings tied to data centers, defense, and onshoring. The manager views small caps as entering a compelling multi-year setup given accelerating earnings, attractive valuations versus large caps, and the strongest first half since 1991, while maintaining conviction in high-quality growth businesses despite trimming AI-exposed positions after sharp gains.

Forward Outlook

The manager believes the investment backdrop remains constructive for high-quality growth investing, with the U.S. economy proving more resilient than expected and corporate earnings on pace for strong growth in 2026. Conditions are viewed as especially favorable for continued market broadening in favor of small cap stocks, given accelerating earnings, attractive relative valuations, and improving breadth. The manager expects environments marked by shifting leadership, dispersion, and rapid capital reallocation to reward disciplined, fundamentally driven active managers. While geopolitical risk, above-target inflation, and elevated valuations in parts of the market remain concerns, the removal of the Q1 energy shock and continued fiscal support are viewed as positive tailwinds.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 20 2026	2026 Q2	-	AI, Data centers, earnings, growth, industrials, semiconductors, small caps, technology	-	Next Century Growth Investors' small cap strategy surged 45.4% in Q2 2026, crushing benchmarks by 2,000 basis points through concentrated AI infrastructure, semiconductor, and industrial exposure. Technology holdings returned 90-120% as AI capex conviction returned. The manager trimmed winners after sharp gains, redeploying into health care and software. Small caps delivered their strongest first half since 1991, and accelerating earnings with attractive valuations create a compelling multi-year setup.
Apr 22 2026	2026 Q1	-	AI Infrastructure, defense, growth, industrials, semiconductors, small cap, technology	-	NCG's small cap growth strategy outperformed in volatile 1Q26 by focusing on AI infrastructure, defense, and quality growth companies. Strong performance from semiconductors, optical components, and aerospace holdings offset geopolitical headwinds. Small cap fundamentals improving with positive earnings growth and attractive valuations versus large caps. Fed easing and market broadening create favorable environment for selective stock picking.
Jan 21 2026	2025 Q4	ADPT, ATEC, AVPT, AXGN, BETA, BLND, CCB, CELH, COHR, ELF, KNX, KVYO, MTSI, PCOR, PEGA, PI, PRCH, QTWO, TOL, TTAN, UTI, WAL, WULF	active management, growth, healthcare, industrials, Outperformance, Quality, small caps, technology	-	NCG's small cap growth strategy faced headwinds in 2025 as quality factors worked against active managers, with low-quality stocks significantly outperforming their high-quality holdings. Despite relative underperformance, they maintain conviction in their disciplined approach and see improving conditions ahead with positive small cap earnings growth, Fed rate cuts, and attractive relative valuations supporting future outperformance.
Oct 24 2025	2025 Q3	AAON, ADMA, AEHR, APLD, AVAV, BE, CDNA, FROG, KVYO, LEU, MIRM, MP, PAR, PGY, PI, PL, PRCH, STRL, TOL, VCEL, XMTR	AI, defense, growth, infrastructure, nuclear, small cap, Speculation, valuation	XMTR BE	NCG's Small Cap Growth strategy underperformed in 3Q25 as speculative, low-quality stocks drove index returns while traditional growth areas lagged. The firm maintains discipline in high-quality companies with strong fundamentals, positioning for long-term outperformance. With Fed rate cuts, improving earnings outlook, and historically cheap small cap valuations, significant catch-up potential exists for quality growth stocks.
Aug 7 2025	2025 Q2	AAON, AGYS, ALHC, AVPT, CDNA, CELH, CRS, CWK, ELF, GDYN, GWRE, HXL, INOD, MTSI, RXST, SAIA, SPRY, STRL, TMDX, TTAN	growth, healthcare, infrastructure, rates, small cap, technology, Trade Policy	-	NCG outperformed across most strategies in 2Q25 despite initial tariff-related volatility. The firm maintains overweight positions in technology, healthcare, and materials while adding eight new positions. With small caps at historically attractive valuations versus large caps and potential Fed rate cuts ahead, NCG sees significant opportunity in high-quality growth companies.
Mar 31 2025	2025 Q1	AGYS, ALHC, ATRO, BROS, CAVA, ELF, FLYW, FRPT, GLBE, INOD, IRTC, OS, PEGA, PEN, PYCR, QNST, SAIA, SDHC, SITM, VERX	earnings, growth, healthcare, industrials, policy, small cap, technology, Valuations	-	NCG's small cap growth strategy declined 12.99% in Q1 2025, underperforming due to technology and industrials exposure amid policy uncertainty from the new administration. The firm actively repositioned the portfolio, adding five new positions while eliminating 14 underperformers. Despite near-term headwinds, NCG sees attractive valuations and maintains conviction in their quality growth approach for long-term outperformance.
Dec 31 2023	2023 Q4	BRZE, CSTL, CWAN, DAVA, FLYW, GWRE, KNSL, LGIH, MEDP, NTRA, SILK, TMDX, TNDM, VRRM	Biotechnology, Fed Pivot, growth, healthcare, market breadth, small caps	MEDP BRZE ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK ARGX BB\|DAVA\|DDOG\|GLOB\|ILMN\|LOAR\|MELI\|NET\|NU\|NVDA\|TSM NTRA ASIC\|CWAN\|INSP\|KRMN\|KTOS\|MAC\|MEG\|RH\|WYNN TNDM CSTL	NCG's Small Cap Growth strategy returned 4.75% in Q4 but underperformed for the full year at 14.83% versus the Russell 2000 Growth's 18.65%. Healthcare holdings weighed on performance due to GLP-1 concerns, though the Fed pivot drove small cap outperformance late in the quarter. The firm added eight new positions while maintaining their disciplined growth approach.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 20 2026

2026 Q2

AI, Data centers, earnings, growth, industrials, semiconductors, small caps, technology

Next Century Growth Investors' small cap strategy surged 45.4% in Q2 2026, crushing benchmarks by 2,000 basis points through concentrated AI infrastructure, semiconductor, and industrial exposure. Technology holdings returned 90-120% as AI capex conviction returned. The manager trimmed winners after sharp gains, redeploying into health care and software. Small caps delivered their strongest first half since 1991, and accelerating earnings with attractive valuations create a compelling multi-year setup.

Apr 22 2026

2026 Q1

AI Infrastructure, defense, growth, industrials, semiconductors, small cap, technology

NCG's small cap growth strategy outperformed in volatile 1Q26 by focusing on AI infrastructure, defense, and quality growth companies. Strong performance from semiconductors, optical components, and aerospace holdings offset geopolitical headwinds. Small cap fundamentals improving with positive earnings growth and attractive valuations versus large caps. Fed easing and market broadening create favorable environment for selective stock picking.

Jan 21 2026

2025 Q4

ADPT, ATEC, AVPT, AXGN, BETA, BLND, CCB, CELH, COHR, ELF, KNX, KVYO, MTSI, PCOR, PEGA, PI, PRCH, QTWO, TOL, TTAN, UTI, WAL, WULF

active management, growth, healthcare, industrials, Outperformance, Quality, small caps, technology

NCG's small cap growth strategy faced headwinds in 2025 as quality factors worked against active managers, with low-quality stocks significantly outperforming their high-quality holdings. Despite relative underperformance, they maintain conviction in their disciplined approach and see improving conditions ahead with positive small cap earnings growth, Fed rate cuts, and attractive relative valuations supporting future outperformance.

Oct 24 2025

2025 Q3

AAON, ADMA, AEHR, APLD, AVAV, BE, CDNA, FROG, KVYO, LEU, MIRM, MP, PAR, PGY, PI, PL, PRCH, STRL, TOL, VCEL, XMTR

AI, defense, growth, infrastructure, nuclear, small cap, Speculation, valuation

XMTR
BE

NCG's Small Cap Growth strategy underperformed in 3Q25 as speculative, low-quality stocks drove index returns while traditional growth areas lagged. The firm maintains discipline in high-quality companies with strong fundamentals, positioning for long-term outperformance. With Fed rate cuts, improving earnings outlook, and historically cheap small cap valuations, significant catch-up potential exists for quality growth stocks.

Aug 7 2025

2025 Q2

AAON, AGYS, ALHC, AVPT, CDNA, CELH, CRS, CWK, ELF, GDYN, GWRE, HXL, INOD, MTSI, RXST, SAIA, SPRY, STRL, TMDX, TTAN

growth, healthcare, infrastructure, rates, small cap, technology, Trade Policy

NCG outperformed across most strategies in 2Q25 despite initial tariff-related volatility. The firm maintains overweight positions in technology, healthcare, and materials while adding eight new positions. With small caps at historically attractive valuations versus large caps and potential Fed rate cuts ahead, NCG sees significant opportunity in high-quality growth companies.

Mar 31 2025

2025 Q1

AGYS, ALHC, ATRO, BROS, CAVA, ELF, FLYW, FRPT, GLBE, INOD, IRTC, OS, PEGA, PEN, PYCR, QNST, SAIA, SDHC, SITM, VERX

earnings, growth, healthcare, industrials, policy, small cap, technology, Valuations

NCG's small cap growth strategy declined 12.99% in Q1 2025, underperforming due to technology and industrials exposure amid policy uncertainty from the new administration. The firm actively repositioned the portfolio, adding five new positions while eliminating 14 underperformers. Despite near-term headwinds, NCG sees attractive valuations and maintains conviction in their quality growth approach for long-term outperformance.

Dec 31 2023

2023 Q4

BRZE, CSTL, CWAN, DAVA, FLYW, GWRE, KNSL, LGIH, MEDP, NTRA, SILK, TMDX, TNDM, VRRM

Biotechnology, Fed Pivot, growth, healthcare, market breadth, small caps

NCG's Small Cap Growth strategy returned 4.75% in Q4 but underperformed for the full year at 14.83% versus the Russell 2000 Growth's 18.65%. Healthcare holdings weighed on performance due to GLP-1 concerns, though the Fed pivot drove small cap outperformance late in the quarter. The firm added eight new positions while maintaining their disciplined growth approach.

QUARTER	THEMES	TAGS
2026 Q2	AI AI infrastructure spending drove exceptional performance across the portfolio, with roughly $700 billion of hyperscaler capex committed for the year. Semiconductors, networking, power, and data-center-related equities powered the rally, with the Philadelphia Semiconductor Index posting its best quarter on record. The manager trimmed AI-exposed positions in April and May after strong gains and valuation expansion, while maintaining conviction in the multi-year growth drivers.	Semiconductors Data Centers AI Cloud Hyperscale
	Small Caps Small cap stocks posted their strongest first half since 1991, with the Russell 2000 Growth Index up 25.7% in Q2. The manager views conditions as especially favorable for continued market broadening, driven by accelerating earnings growth, attractive relative valuations versus large caps, and improving breadth. Small cap earnings turned positive in 2025 and are now accelerating, creating what the manager believes is a compelling multi-year setup.	Small Caps Earnings Value Growth Market Cap
	Semiconductors Semiconductor holdings returned between 90% and 120% in aggregate across smaller cap strategies and drove more than 1,000 basis points of positive selection versus benchmarks. The Philadelphia Semiconductor Index posted its best quarter on record, with memory names seeing historic moves. Renewed conviction in the durability of AI infrastructure spending powered the sector, though the manager trimmed exposure after the sharp rally and valuation expansion.	Semiconductors Memory AI Semiconductor Cycle Semi Equipment
	Data Centers Data-center-related equities performed exceptionally well, driven by continued strength in AI-related site work and infrastructure buildout. Holdings tied to data-center site development were among the largest contributors to performance in industrials. The manager continues to view data center infrastructure as tied to durable, multi-year investment cycles.	Data Centers AI Infrastructure Spending Construction Power Equipment
	Defense Spending Aerospace and defense holdings contributed meaningfully to performance across strategies, driven by continued strength in defense budgets. The manager maintains exposure to specialized manufacturing and aerospace components tied to defense spending. This theme is positioned as part of the broader industrials overweight.	Defense Aerospace Defense Spending Government Manufacturing
	Onshoring Reshoring-linked capital spending drove performance in industrials, with holdings tied to specialized manufacturing performing exceptionally well. The manager views the One Big Beautiful Bill Act's capital-spending incentives as continuing to work in favor of the domestic industrial, technology, and infrastructure economy. This theme is tied to multi-year investment cycles in the portfolio.	Onshoring Manufacturing Industrial Policy Infrastructure Spending Industrials
	Energy Transition Holdings tied to electrical infrastructure and power equipment performed exceptionally well in the quarter, driven by AI-related power demand and grid infrastructure needs. The manager maintains exposure to power and grid infrastructure as part of the broader AI and data center buildout theme. This is positioned as a multi-year investment cycle.	Grid Upgrade Power Equipment Electrical Equipment Energy Transition Infrastructure
	Earnings Corporate earnings are on pace to deliver strong growth in 2026, with more than 80% of S&P 500 companies beating estimates in Q1 and earnings growing over 25% year-over-year. Small cap earnings growth turned positive in 2025 and is now accelerating. The surge in earnings has actually compressed forward valuation multiples for many segments of the market, providing a healthier fundamental foundation for continued equity gains.	Earnings Growth Fundamentals Valuations Quality
2026 Q1	AI Investments tied to AI infrastructure, including semiconductors, optical components, power buildout and site development, performed well as spending on computing capacity, networking, and data-center build-outs remained robust. Technology performance was driven by semiconductors, optical components, and test equipment holdings.	Infrastructure Semiconductors Data Centers Computing Networking
	Defense Spending Aerospace and defense holdings contributed positively, supported by elevated global defense spending and growing order backlogs. The portfolio is overweight in the industrial sector with holdings in aerospace & defense areas.	Aerospace Defense Order Backlogs Global Spending
	Small Caps Small cap earnings growth turned positive during 2025 and is expected to stay positive and potentially accelerate in 2026. Small cap stocks continue to trade at attractive valuations relative to large cap stocks. Combined with an improving fundamental backdrop, this presents further opportunities in small caps.	Earnings Growth Valuations Fundamentals Opportunities
	Critical Minerals The portfolio is overweight basic materials with holdings consisting of companies in the rare/critical minerals market. Basic materials performance was driven by critical minerals and aerospace holdings.	Basic Materials Rare Minerals Supply Demand
2025 Q4	AI Manager discusses AI monetization progress at Alphabet with strong third-quarter results and improving sentiment around digital advertising and AI. Google Cloud grew over 30% year-over-year supported by rapid adoption of AI training and inference services. Alphabet introduced several Gemini platform enhancements during the quarter including lower-cost inference options.	Cloud Monetization Infrastructure Training Inference
	Cloud Google Cloud performance highlighted as a key driver with over 30% year-over-year growth supported by rapid adoption of AI training and inference services. Manager views cloud infrastructure as creating substantial growth opportunities for Alphabet with scale and data advantages.	Infrastructure Growth Services Adoption
	Pharmaceuticals Eli Lilly was a top performer driven by strong Q3 2025 earnings with revenue rising 54% year-over-year. Growth was driven by GLP-1 franchises Mounjaro and Zepbound where sales more than doubled. Manager believes Lilly remains one of the highest-quality growth franchises in global healthcare with leadership in diabetes, obesity, and neuroscience.	GLP1 Diabetes Obesity Growth
	Medical Devices Intuitive Surgical delivered strong Q3 results with procedure volumes rising in mid-teens globally and notable strength in general surgery and urology. Manager views ISRG as the clear leader in robotic-assisted surgery with a deep installed base, high recurring revenue, and decades of clinical data supporting continued adoption.	Robotics Surgery Procedures Recurring
	Streaming Netflix was the portfolio's largest detractor following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions after recent price increases. Despite headwinds, manager continues to view Netflix as the dominant global streaming platform with durable competitive advantages.	Content Subscribers Competition Global
2025 Q3	AI Artificial intelligence presents great promise for enhancing business models and improving productivity long-term. In the near-term, the infrastructure needed to support the AI buildout is spurring significant increases in investment and capital expenditures, driving new growth opportunities for innovative companies across technology, industrials, and energy sectors.	Infrastructure Productivity Technology Investment Growth
	Infrastructure Spending The new administration has implemented pro-growth policies including infrastructure spending, manufacturing re-shoring, critical mineral and pharmaceutical production, and defense spending. These policies are expected to support growth across many sectors of the domestic economy and create direct beneficiaries among portfolio companies.	Manufacturing Defense Domestic Policy Growth
	Critical Minerals Critical minerals emerged as one of the significant rally areas in micro and small cap indices during 3Q25. The portfolio maintains exposure through a company in the rare earth materials market as part of their basic materials overweight, though many companies in this space have elevated valuations relative to business fundamentals.	Rare Earths Materials Valuation Rally Exposure
	Nuclear Nuclear energy was identified as one of the areas with big gainers and material contribution to the micro and small cap indices during 3Q25. This represents part of the broader speculative rally in emerging growth areas, though business fundamentals may not support extremely elevated valuation levels in many cases.	Energy Speculative Valuation Rally Growth
	Defense Defense and space emerged as significant contributors to index performance in 3Q25, with the portfolio adding AeroVironment as a new position. The administration's pro-growth policies include increased defense spending, creating opportunities for companies in this sector.	Space Spending Policy Growth Opportunity
2025 Q2	Small Caps Small cap growth stocks participated in the recent market rally, but further opportunity exists. The rolling 10-year annualized return by small vs large stands at -7.3% and is the worst ever going back to 1926, and the valuation of the small cap sector relative to large caps is in the 5th percentile historically.	Small Cap Valuation Relative Performance Growth Opportunity
	Trade Policy The quarter was marked by a swift selloff in early April following President Trump's Liberation Day tariff announcement on April 2nd. However, a week after Liberation Day, the administration put in place a 90-day pause on tariff implementation and started talking about numerous ongoing trade deal negotiations.	Tariffs Trade Deals Policy Uncertainty Implementation Negotiations
	Infrastructure Spending Strong forces driving increased infrastructure spending in the US have been gaining momentum for the past couple years and remain intact. The new administration is working to accelerate this trend and we are finding companies which are direct beneficiaries.	Infrastructure Government Spending Beneficiaries Acceleration Momentum
	Rates The Federal Reserve has held rates unchanged so far in 2025 following rate cuts totaling 100bps in the back half of 2024. The Fed remains committed to evaluating the incoming data to determine the path of future rate decisions but has recently signaled a willingness to cut rates at some point this year.	Federal Reserve Rate Cuts Monetary Policy Data Dependent 2025
2025 Q1	Infrastructure Spending Strong forces driving increased infrastructure spending in the US have been gaining momentum for the past couple years and remain intact. The new administration is working to accelerate this trend and NCG is finding small companies which are direct beneficiaries.	Infrastructure Government Construction Spending Policy
	Trade Policy The new US administration has not solidified its go-forward international trade and tariff policies. While the market seems to be assuming the worst, the administration has recently been reflecting more flexibility in its approach, and NCG believes the final policy may not be as draconian as feared.	Tariffs Trade Policy International Administration
2023 Q4	Small Caps Small cap stocks underperformed large caps heading into the fourth quarter, with the Russell Microcap Growth Index down about 5% through Q3. However, market breadth broadened in November and December following the Fed pivot, with the Russell Microcap Growth Index returning 13.68% versus 4.42% for large caps. The rally was primarily led by low quality stocks and sectors most impacted by the Fed's restrictive stance.	Small Cap Russell 2000 Microcap Market Breadth Fed Pivot
	Biotechnology Healthcare holdings drove much of the underperformance across strategies due to investor perception that GLP-1 weight loss drugs will improve overall health and reduce medical interventions. Many healthcare companies began to recover in Q4, and the firm still believes in long-term growth fundamentals despite the negative sentiment around the sector.	Healthcare GLP-1 Medical Devices Biotech Drug Development
	Growth The firm continues to focus on investing in what they believe are the fastest growing and highest quality companies in America. They emphasize owning companies that can grow revenue and profits at strong rates in any economic environment, maintaining their philosophy of bottom-up stock picking and strong sell discipline.	Growth Investing Revenue Growth Quality Companies Stock Selection Sell Discipline

QUARTER

THEMES

AI

AI infrastructure spending drove exceptional performance across the portfolio, with roughly $700 billion of hyperscaler capex committed for the year. Semiconductors, networking, power, and data-center-related equities powered the rally, with the Philadelphia Semiconductor Index posting its best quarter on record. The manager trimmed AI-exposed positions in April and May after strong gains and valuation expansion, while maintaining conviction in the multi-year growth drivers.

Semiconductors Data Centers AI Cloud Hyperscale

Small Caps

Small cap stocks posted their strongest first half since 1991, with the Russell 2000 Growth Index up 25.7% in Q2. The manager views conditions as especially favorable for continued market broadening, driven by accelerating earnings growth, attractive relative valuations versus large caps, and improving breadth. Small cap earnings turned positive in 2025 and are now accelerating, creating what the manager believes is a compelling multi-year setup.

Small Caps Earnings Value Growth Market Cap

Semiconductors

Semiconductor holdings returned between 90% and 120% in aggregate across smaller cap strategies and drove more than 1,000 basis points of positive selection versus benchmarks. The Philadelphia Semiconductor Index posted its best quarter on record, with memory names seeing historic moves. Renewed conviction in the durability of AI infrastructure spending powered the sector, though the manager trimmed exposure after the sharp rally and valuation expansion.

Semiconductors Memory AI Semiconductor Cycle Semi Equipment

Data Centers

Data-center-related equities performed exceptionally well, driven by continued strength in AI-related site work and infrastructure buildout. Holdings tied to data-center site development were among the largest contributors to performance in industrials. The manager continues to view data center infrastructure as tied to durable, multi-year investment cycles.

Data Centers AI Infrastructure Spending Construction Power Equipment

Defense Spending

Aerospace and defense holdings contributed meaningfully to performance across strategies, driven by continued strength in defense budgets. The manager maintains exposure to specialized manufacturing and aerospace components tied to defense spending. This theme is positioned as part of the broader industrials overweight.

Defense Aerospace Defense Spending Government Manufacturing

Onshoring

Reshoring-linked capital spending drove performance in industrials, with holdings tied to specialized manufacturing performing exceptionally well. The manager views the One Big Beautiful Bill Act's capital-spending incentives as continuing to work in favor of the domestic industrial, technology, and infrastructure economy. This theme is tied to multi-year investment cycles in the portfolio.

Onshoring Manufacturing Industrial Policy Infrastructure Spending Industrials

Energy Transition

Holdings tied to electrical infrastructure and power equipment performed exceptionally well in the quarter, driven by AI-related power demand and grid infrastructure needs. The manager maintains exposure to power and grid infrastructure as part of the broader AI and data center buildout theme. This is positioned as a multi-year investment cycle.

Grid Upgrade Power Equipment Electrical Equipment Energy Transition Infrastructure

Earnings

Corporate earnings are on pace to deliver strong growth in 2026, with more than 80% of S&P 500 companies beating estimates in Q1 and earnings growing over 25% year-over-year. Small cap earnings growth turned positive in 2025 and is now accelerating. The surge in earnings has actually compressed forward valuation multiples for many segments of the market, providing a healthier fundamental foundation for continued equity gains.

Earnings Growth Fundamentals Valuations Quality

2026 Q1

AI

Investments tied to AI infrastructure, including semiconductors, optical components, power buildout and site development, performed well as spending on computing capacity, networking, and data-center build-outs remained robust. Technology performance was driven by semiconductors, optical components, and test equipment holdings.

Infrastructure Semiconductors Data Centers Computing Networking

Defense Spending

Aerospace and defense holdings contributed positively, supported by elevated global defense spending and growing order backlogs. The portfolio is overweight in the industrial sector with holdings in aerospace & defense areas.

Aerospace Defense Order Backlogs Global Spending

Small Caps

Small cap earnings growth turned positive during 2025 and is expected to stay positive and potentially accelerate in 2026. Small cap stocks continue to trade at attractive valuations relative to large cap stocks. Combined with an improving fundamental backdrop, this presents further opportunities in small caps.

Earnings Growth Valuations Fundamentals Opportunities

Critical Minerals

The portfolio is overweight basic materials with holdings consisting of companies in the rare/critical minerals market. Basic materials performance was driven by critical minerals and aerospace holdings.

Basic Materials Rare Minerals Supply Demand

2025 Q4

AI

Manager discusses AI monetization progress at Alphabet with strong third-quarter results and improving sentiment around digital advertising and AI. Google Cloud grew over 30% year-over-year supported by rapid adoption of AI training and inference services. Alphabet introduced several Gemini platform enhancements during the quarter including lower-cost inference options.

Cloud Monetization Infrastructure Training Inference

Cloud

Google Cloud performance highlighted as a key driver with over 30% year-over-year growth supported by rapid adoption of AI training and inference services. Manager views cloud infrastructure as creating substantial growth opportunities for Alphabet with scale and data advantages.

Infrastructure Growth Services Adoption

Pharmaceuticals

Eli Lilly was a top performer driven by strong Q3 2025 earnings with revenue rising 54% year-over-year. Growth was driven by GLP-1 franchises Mounjaro and Zepbound where sales more than doubled. Manager believes Lilly remains one of the highest-quality growth franchises in global healthcare with leadership in diabetes, obesity, and neuroscience.

GLP1 Diabetes Obesity Growth

Medical Devices

Intuitive Surgical delivered strong Q3 results with procedure volumes rising in mid-teens globally and notable strength in general surgery and urology. Manager views ISRG as the clear leader in robotic-assisted surgery with a deep installed base, high recurring revenue, and decades of clinical data supporting continued adoption.

Robotics Surgery Procedures Recurring

Streaming

Netflix was the portfolio's largest detractor following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions after recent price increases. Despite headwinds, manager continues to view Netflix as the dominant global streaming platform with durable competitive advantages.

Content Subscribers Competition Global

2025 Q3

AI

Artificial intelligence presents great promise for enhancing business models and improving productivity long-term. In the near-term, the infrastructure needed to support the AI buildout is spurring significant increases in investment and capital expenditures, driving new growth opportunities for innovative companies across technology, industrials, and energy sectors.

Infrastructure Productivity Technology Investment Growth

Infrastructure Spending

The new administration has implemented pro-growth policies including infrastructure spending, manufacturing re-shoring, critical mineral and pharmaceutical production, and defense spending. These policies are expected to support growth across many sectors of the domestic economy and create direct beneficiaries among portfolio companies.

Manufacturing Defense Domestic Policy Growth

Critical Minerals

Critical minerals emerged as one of the significant rally areas in micro and small cap indices during 3Q25. The portfolio maintains exposure through a company in the rare earth materials market as part of their basic materials overweight, though many companies in this space have elevated valuations relative to business fundamentals.

Rare Earths Materials Valuation Rally Exposure

Nuclear

Nuclear energy was identified as one of the areas with big gainers and material contribution to the micro and small cap indices during 3Q25. This represents part of the broader speculative rally in emerging growth areas, though business fundamentals may not support extremely elevated valuation levels in many cases.

Energy Speculative Valuation Rally Growth

Defense

Defense and space emerged as significant contributors to index performance in 3Q25, with the portfolio adding AeroVironment as a new position. The administration's pro-growth policies include increased defense spending, creating opportunities for companies in this sector.

Space Spending Policy Growth Opportunity

2025 Q2

Small Caps

Small cap growth stocks participated in the recent market rally, but further opportunity exists. The rolling 10-year annualized return by small vs large stands at -7.3% and is the worst ever going back to 1926, and the valuation of the small cap sector relative to large caps is in the 5th percentile historically.

Small Cap Valuation Relative Performance Growth Opportunity

Trade Policy

The quarter was marked by a swift selloff in early April following President Trump's Liberation Day tariff announcement on April 2nd. However, a week after Liberation Day, the administration put in place a 90-day pause on tariff implementation and started talking about numerous ongoing trade deal negotiations.

Tariffs Trade Deals Policy Uncertainty Implementation Negotiations

Infrastructure Spending

Strong forces driving increased infrastructure spending in the US have been gaining momentum for the past couple years and remain intact. The new administration is working to accelerate this trend and we are finding companies which are direct beneficiaries.

Infrastructure Government Spending Beneficiaries Acceleration Momentum

Rates

The Federal Reserve has held rates unchanged so far in 2025 following rate cuts totaling 100bps in the back half of 2024. The Fed remains committed to evaluating the incoming data to determine the path of future rate decisions but has recently signaled a willingness to cut rates at some point this year.

Federal Reserve Rate Cuts Monetary Policy Data Dependent 2025

2025 Q1

Infrastructure Spending

Strong forces driving increased infrastructure spending in the US have been gaining momentum for the past couple years and remain intact. The new administration is working to accelerate this trend and NCG is finding small companies which are direct beneficiaries.

Infrastructure Government Construction Spending Policy

Trade Policy

The new US administration has not solidified its go-forward international trade and tariff policies. While the market seems to be assuming the worst, the administration has recently been reflecting more flexibility in its approach, and NCG believes the final policy may not be as draconian as feared.

Tariffs Trade Policy International Administration

2023 Q4

Small Caps

Small cap stocks underperformed large caps heading into the fourth quarter, with the Russell Microcap Growth Index down about 5% through Q3. However, market breadth broadened in November and December following the Fed pivot, with the Russell Microcap Growth Index returning 13.68% versus 4.42% for large caps. The rally was primarily led by low quality stocks and sectors most impacted by the Fed's restrictive stance.

Small Cap Russell 2000 Microcap Market Breadth Fed Pivot

Biotechnology

Healthcare holdings drove much of the underperformance across strategies due to investor perception that GLP-1 weight loss drugs will improve overall health and reduce medical interventions. Many healthcare companies began to recover in Q4, and the firm still believes in long-term growth fundamentals despite the negative sentiment around the sector.

Healthcare GLP-1 Medical Devices Biotech Drug Development

Growth

The firm continues to focus on investing in what they believe are the fastest growing and highest quality companies in America. They emphasize owning companies that can grow revenue and profits at strong rates in any economic environment, maintaining their philosophy of bottom-up stock picking and strong sell discipline.

Growth Investing Revenue Growth Quality Companies Stock Selection Sell Discipline

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Oct 24, 2025	Fund Letters	Tom Press	XMTR	Xometry Inc.	Industrials	Commercial Services & Supplies	Bull	NASDAQ	AI, Automation, Digitization, growth, manufacturing, Margins, marketplace, Partnerships, Reshoring, supply chain	Login
Oct 24, 2025	Fund Letters	Tom Press	BE	Bloom Energy Corporation	Industrials	Renewable Electricity	Bull	NYSE	AI, backlog, energy, Fuel cells, growth, hyperscalers, infrastructure, Margins, Power, renewables	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	MEDP	Medpace Holdings	Health Care	Life Sciences Tools & Services	Bull	NASDAQ	biopharma, Clinical trials, contract research, Cro, growth, Healthcare services, life sciences, market share	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	BRZE	Braze	Information Technology	Application Software	Bull	NASDAQ	Cross-Channel, Customer Engagement, high margins, market disruption, Marketing Technology, platform, Real Time, SaaS	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	Guidewire Software	Information Technology	Application Software	Bull	NYSE	cloud migration, Digital transformation, Insurance-software, Legacy Replacement, P&C insurance, platform, SaaS, turnaround	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	ARGX BB\|DAVA\|DDOG\|GLOB\|ILMN\|LOAR\|MELI\|NET\|NU\|NVDA\|TSM	Endava	Information Technology	IT Consulting & Other Services	Bull	NYSE	banking, Cyclical Recovery, Digital transformation, Fintech, IT services, Outsourcing, Payments, Telecom	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	NTRA	Natera	Health Care	Life Sciences Tools & Services	Bull	NASDAQ	Cell-free DNA, diagnostics, Genetic Testing, MRD Testing, NIPT, Oncology, personalized medicine, women's health	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	ASIC\|CWAN\|INSP\|KRMN\|KTOS\|MAC\|MEG\|RH\|WYNN	Clearwater Analytics Holdings	Information Technology	Application Software	Bull	NYSE	2021 IPO, Analytics Platform, Asset Managers, Insurance, Investment Accounting, market share gains, SaaS, valuation opportunity	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	TNDM	Tandem Diabetes Care	Health Care	Health Care Equipment	Bull	NASDAQ	Depressed valuation, diabetes care, Growth Reacceleration, Insulin Pump, Medical Device, New products, product innovation, turnaround	Login
Dec 31, 2023	Fund Letters	NCG Small Cap Growth Strategy	CSTL	Castle Bioscience	Health Care	Life Sciences Tools & Services	Bull	NASDAQ	Acquisitions, Cash Flow Breakeven, Compressed Valuation, Medical Diagnostics, Mental health, Oncology Testing, Skin Cancer, Under-Penetration	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Oct 24, 2025

Fund Letters

Tom Press

XMTR

Xometry Inc.

Industrials

Commercial Services & Supplies

Bull

NASDAQ

AI, Automation, Digitization, growth, manufacturing, Margins, marketplace, Partnerships, Reshoring, supply chain

Oct 24, 2025

Fund Letters

Tom Press

Bloom Energy Corporation

Industrials

Renewable Electricity

Bull

NYSE

AI, backlog, energy, Fuel cells, growth, hyperscalers, infrastructure, Margins, Power, renewables

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

MEDP

Medpace Holdings

Health Care

Life Sciences Tools & Services

Bull

NASDAQ

biopharma, Clinical trials, contract research, Cro, growth, Healthcare services, life sciences, market share

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

BRZE

Braze

Information Technology

Application Software

Bull

NASDAQ

Cross-Channel, Customer Engagement, high margins, market disruption, Marketing Technology, platform, Real Time, SaaS

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

Guidewire Software

Information Technology

Application Software

Bull

NYSE

cloud migration, Digital transformation, Insurance-software, Legacy Replacement, P&C insurance, platform, SaaS, turnaround

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

Endava

Information Technology

IT Consulting & Other Services

Bull

NYSE

banking, Cyclical Recovery, Digital transformation, Fintech, IT services, Outsourcing, Payments, Telecom

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

NTRA

Natera

Health Care

Life Sciences Tools & Services

Bull

NASDAQ

Cell-free DNA, diagnostics, Genetic Testing, MRD Testing, NIPT, Oncology, personalized medicine, women's health

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

Clearwater Analytics Holdings

Information Technology

Application Software

Bull

NYSE

2021 IPO, Analytics Platform, Asset Managers, Insurance, Investment Accounting, market share gains, SaaS, valuation opportunity

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

TNDM

Tandem Diabetes Care

Health Care

Health Care Equipment

Bull

NASDAQ

Depressed valuation, diabetes care, Growth Reacceleration, Insulin Pump, Medical Device, New products, product innovation, turnaround

Dec 31, 2023

Fund Letters

NCG Small Cap Growth Strategy

CSTL

Castle Bioscience

Health Care

Life Sciences Tools & Services

Bull

NASDAQ

Acquisitions, Cash Flow Breakeven, Compressed Valuation, Medical Diagnostics, Mental health, Oncology Testing, Skin Cancer, Under-Penetration

TICKER	COMMENTARY
No ticker commentary found.

TICKER

COMMENTARY

No ticker commentary found.

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
No Recent Buys Data

Ticker

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Shares Bought

% Change

Weight %

No Recent Buys Data

Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
No Recent Sells Data

Ticker

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Amount Sold

Shares Sold

% Change

Weight %

Status

No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

Industry

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No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Small Caps

Semiconductors

Data Centers

Defense Spending

Onshoring

Energy Transition

Earnings

AI

Defense Spending

Small Caps

Critical Minerals

AI

Cloud

Pharmaceuticals

Medical Devices

Streaming

AI

Infrastructure Spending

Critical Minerals

Nuclear

Defense

Small Caps

Trade Policy

Infrastructure Spending

Rates

Infrastructure Spending

Trade Policy

Small Caps

Biotechnology

Growth

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Tom Press Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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NCG Small Cap Growth Strategy