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 |
|---|---|---|---|---|---|---|
The Voya MI Dynamic Small Cap Fund outperformed the Russell 2000 benchmark in 2Q26, driven by strong stock selection in energy, consumer discretionary, and healthcare sectors. U.S. equity markets rebounded sharply during the quarter, recovering from geopolitical concerns to post the strongest quarterly gains since 2Q20. Market leadership was dominated by AI-related investments, with semiconductor, software, and memory companies leading advances. Small caps outperformed large caps as market participation broadened beyond mega-cap growth stocks. The Fund benefited from positions in AI infrastructure, including Bloom Energy's data center power solutions, TTM Technologies' printed circuit boards for AI and defense applications, and Extreme Networks' AI-enabled networking platforms. However, positions in Mueller Water Products, Tronox Holdings, and Flowserve detracted from performance due to sector-specific headwinds and execution concerns. Looking ahead, the managers expect markets to become more selective, with performance depending on earnings sustainability, capital discipline, and company fundamentals rather than broad momentum. Opportunities are emerging in defensives and rate-sensitive sectors as market leadership continues to widen.
The Fund employs a machine learning-driven quantitative approach to identify high-quality small-cap companies with sustainable growth trends, focusing on persistent patterns in company data across quality, valuation, and short interest features.
Looking ahead, markets are likely to become more selective as investors focus on the sustainability of earnings growth, especially within AI supply chains. While semiconductor and memory companies are likely to remain key beneficiaries of ongoing AI infrastructure spending, leadership may gradually expand to other technology, industrial and cyclical sectors. Performance will depend more on company fundamental factors, capital discipline, and the market's ability to absorb new equity supply than on broad market momentum. Broader market participation could continue if earnings growth remains strong, with opportunities emerging in defensives and rate-sensitive sectors.
As of Aug 1, 2026
Russell Shtern, CFA, leads the portfolio management team with 26 years of investment experience. He previously served as a senior portfolio manager at Franklin Templeton managing smart beta and active multi-factor equity strategies, and was head of equity portfolio management and trading at QS Investors (Legg Mason affiliate). He also managed diversification-based investing and tax-managed equity strategies at Deutsche Asset Management Quantitative Strategies group. Russell earned a BBA with honors in finance and a minor in economics from Pace University and is a CFA Charterholder. The team is supported by Sanne V de Boer (PhD, CFA) with 23 years of experience as Head of Systematic Equities, and Kai Yee Wong with 34 years of experience specializing in quantitative equity strategies.
The fund employs the Voya Machine Intelligence (MI) Dynamic Small Cap Strategy, which combines the depth and rigor of fundamental analysis with the breadth and scalability that machine learning models bring. The strategy utilizes proprietary non-linear machine learning models that analyze approximately 250 fundamental features derived from over 10,000 data points per company. This AI-driven, opportunistic active strategy seeks to deliver idiosyncratic alpha without static factor or style biases, working best in volatile markets to take advantage of mispriced and overlooked stock opportunities. The approach maintains robust risk management including active screens for negative events, controversies, crowding and ESG risks.
Lead Portfolio Manager
Neutral / Balanced
Market Conviction
The Fund holds a diversified small-cap portfolio with six named positions ranging from 0.40% to 2.34% of assets, indicating broad diversification rather than concentration. The letter emphasizes that positions were driven by machine learning models and risk management considerations rather than high-conviction fundamental views. Multiple positions are described as serving to balance factor exposures. The language is analytical and process-focused rather than declarative about specific investment theses. The absence of large, concentrated positions and the emphasis on quantitative model-driven selection rather than fundamental conviction caps the score below 0.50.
Growth Outlook
The letter describes a constructive market environment with equity markets rebounding sharply and posting the strongest quarterly gains since 2Q20. However, the managers note that investors became more selective and raised concerns about returns generation, competition, and regulation. The forward outlook acknowledges opportunities but emphasizes the need for selectivity and notes potential pressure from rising costs, supply constraints, and equity issuance. The tone is mildly positive but balanced with caution about future conditions.
Risk Appetite
The Fund maintained overweight positions in AI-related infrastructure and technology companies, demonstrating a risk-on tilt toward growth areas. The portfolio benefited from concentrated exposure to data center power solutions, semiconductors, and networking platforms. While the managers acknowledge the need for nimble positioning, the actual portfolio positioning during the quarter was tilted toward cyclical and technology exposure, indicating a moderately aggressive risk appetite.
Capital Deployment
The letter provides no information about changes in cash levels or net exposure during the quarter. While the Fund added positions that performed well and held positions that detracted, there is no evidence of net deployment or de-risking. The discussion focuses on stock selection within an existing portfolio structure rather than changes in overall capital allocation. Without cash level data or explicit statements about increasing or decreasing exposure, the score defaults to neutral.
Forward Guidance
The forward guidance is cautiously constructive. The managers state that broader market participation could continue if conditions remain favorable, but emphasize that markets are likely to become more selective. They note opportunities emerging in defensives and rate-sensitive sectors, suggesting a shift toward more balanced positioning. The language indicates selective adding rather than aggressive deployment, with emphasis on nimble positioning and adaptation to evolving conditions.
Language Signal
The letter contains balanced directional language. Bullish terms include strong, robust, accelerating, momentum, opportunities emerging, and attractive. Bearish or cautious language includes concerns, risks, uncertainty, pressure, headwinds, lagged, weakened, and detracted. The net balance is roughly neutral, with the letter acknowledging both positive market dynamics and emerging challenges. The tone is professional and measured rather than directionally skewed.
Perceived Risk
The managers identify several specific risks with meaningful discussion: geopolitical risks and policy uncertainty, rising costs and supply constraints in AI supply chains, equity issuance creating supply overhang, concentration risk in market leaders creating vulnerability to sentiment shifts, and concerns about AI returns generation amid competition and regulation. These risks are named and discussed with context, indicating moderate risk awareness. However, the risks are not framed as systemic or tail-risk scenarios, and the overall tone remains constructive despite acknowledging these challenges.
Opportunity Density
The managers describe a selective but opportunity-rich environment. They note that market leadership is widening beyond mega-cap growth, creating opportunities across technology, industrial, and cyclical sectors. Opportunities are explicitly stated to be emerging in defensives and rate-sensitive sectors. The Fund successfully identified multiple winning positions in AI infrastructure, data centers, and networking. While the managers emphasize the need for selectivity, the overall characterization is of a broadening opportunity set rather than scarcity.
Time Horizon
The letter focuses on quarterly performance and near-term catalysts such as earnings results, partnerships, and guidance. Positions in Bloom Energy, TTM Technologies, and Extreme Networks are discussed in the context of recent quarterly results and momentum. The forward outlook discusses market dynamics over the coming quarters rather than multi-year themes. While the Fund employs a long-term small-cap strategy, the specific discussion in this letter centers on 1-3 year catalysts and quarterly performance drivers, indicating a medium-term investment horizon.
Top Conviction Themes
Key Catalysts
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