Distillate's International FSV strategy lagged in Q2 2026 as AI-driven momentum and semiconductor concentration dominated returns, but the manager sees this as opportunity. AI names gained $25 trillion in value on just $300 billion of FCF growth, creating extreme valuation bifurcation. The strategy trades at 8.5% FCF/EV yield versus 4.6% for the benchmark, the widest discount since inception, positioning for outperformance when fundamentals reassert themselves as they did post-2000.

Giverny Capital maintains a concentrated portfolio of quality earnings compounders despite Q2 underperformance driven by extreme market dispersion favoring momentum. Manager Poppe trimmed expensive AI winners Alphabet and Arista to add to undervalued financials like Schwab and Progressive growing earnings 15-25% annually but trading at half the market multiple. He views current momentum-chasing as unsustainable and expects long-term returns to follow earnings growth.

RTW Biotech Opportunities returned 18.1% in Q2 2026, capitalizing on improved biotech sentiment driven by FDA leadership changes, strong M&A including AbbVie's $10.9 billion acquisition of portfolio company Apogee, and positive late-stage oncology data at ASCO. The fund maintains a concentrated portfolio of 48 positions focused on transformative therapeutics across oncology, immunology, and rare diseases, with new investments in gene therapy and protein degradation platforms.

Airlie delivered 10.6% in Q2 2026, outperforming by 6.5% as materials and USD earners reversed prior headwinds. The fund maintains a large underweight in expensive Australian banks facing deteriorating fundamentals from slowing credit growth and negative gearing bans, expecting earnings downgrades and de-rating. Best opportunities lie in quality industrials that have de-rated sharply. Changing market structure creates enhanced volatility the manager exploits through active trading around core positions.

The fund returned 25.44% in Q2 2026, significantly outperforming its benchmark by capitalizing on the AI infrastructure buildout. The manager is positioned in companies enabling agentic AI through semiconductor connectivity, GPU-accelerated cloud platforms, and data center storage. Tax incentives are accelerating U.S. business investment in AI infrastructure, which the manager views as a defining growth driver for the portfolio's mid cap technology holdings.

Madison Dividend Income underperformed in Q2 as Technology surged to 1999-like extremes, pushing S&P 500 valuations to record highs. The managers position defensively in high-quality dividend stocks, viewing Energy's 13.5% decline as an opportunity given healthy fundamentals. Top holding Exxon Mobil offers 3% yield and 43 consecutive years of dividend growth. The 2.6% portfolio yield and 94% A- or better credit ratings provide downside protection against potential market correction.

Purpose Credit Opportunities Fund delivered strong five-year cumulative returns of 27.2% through disciplined bottom-up credit research. The team views Middle East developments and rising corporate bond issuance for data center investment as key macro factors. Portfolio actions included adding to Canada Cartage on improving trucking industry fundamentals and reducing LoanDepot exposure given elevated Treasury yields and mortgage origination headwinds.

Ganes Focused Value Fund returned 6.1% in Q2 2026, outperforming the market's 4.1%, but lagged over the full year. The concentrated portfolio of founder-led Australian businesses delivered mixed results with Dicker Data rising 45% on data centre and AI demand while ARB Corporation fell 40% on its first profit downgrade in 25 years. The manager maintains conviction in long-term value despite near-term challenges.

Distillate's International FSV strategy lagged in Q2 2026 as AI-driven momentum and semiconductor concentration dominated returns, but the manager sees this as opportunity. AI names gained $25 trillion in value on just $300 billion of FCF growth, creating extreme valuation bifurcation. The strategy trades at 8.5% FCF/EV yield versus 4.6% for the benchmark, the widest discount since inception, positioning for outperformance when fundamentals reassert themselves as they did post-2000.

T. Bailey Multi-Asset Growth Fund returned 6.44% in Q2 2026 despite June volatility. Strong equity performance from insurance, healthcare, and AI holdings offset a 10.6% gold decline following Fed policy shifts. The Fund maintains meaningful positions across specialist insurance, healthcare, Japanese equities, and emerging markets, complemented by fixed income and gold. Positioning targets growth participation while avoiding overreliance on any single theme.

Small-cap growth navigated Q1 volatility with data center infrastructure holdings driving outperformance as hyperscalers committed nearly $800 billion in AI capex. Energy spiked on Iran strikes but appears temporary. Portfolio positioned constructively in cyclicals benefiting from data center buildout, defense spending, and energy infrastructure while selectively adding healthcare distributors. Reasonable valuations and multiple catalysts support outlook despite near-term geopolitical and regulatory uncertainty.

Deep Sail Capital returned 41.6% net in Q2 2026, driven by concentrated positions in AI data center infrastructure including Credo Technology and Celestica. Manager warns AI mega IPO lockups may trigger market decline in early 2027 but remains bullish on three-year data center ramp. Fund holds 21 longs and 23 shorts at 86% net long, positioned for 1.6T networking and co-packaged optics adoption.

Titan Wealth's multi-manager strategies delivered exceptional first-half returns driven by concentrated AI and semiconductor exposure, with technology up 33% and emerging markets outperforming by 10 percentage points. Manager maintains high conviction in structural themes including AI infrastructure, energy transition, and emerging market technology leadership through holdings like Polar Capital Artificial Intelligence and KLA. Recently added healthcare to diversify concentration risk while expecting markets to grind higher despite elevated valuations and sticky inflation.

Ariel Focus Fund returned 2.14% in Q2 2026, underperforming broad indices despite strong contributions from Affiliated Managers Group, Madison Square Garden Entertainment and PHINIA. The concentrated value portfolio emphasizes high-quality businesses at attractive valuations through rigorous fundamental research. The manager added Dentsply Sirona as a turnaround opportunity while maintaining discipline amid modest global growth, concentrated market leadership and persistent macro uncertainty heading into the second half.

T. Bailey Global Thematic returned 13.7% in Q2 as markets began questioning AI infrastructure valuations following Broadcom's guidance miss. The Fund is shifting AI exposure toward technology beneficiaries while emphasizing themes with proven cash flows in healthcare, insurance, and commodities. With 6.3% cash and positioning in grounded valuations, managers distinguish between companies earning their multiples versus those dependent on future promises.

Riverwater's microcap strategy lagged the Russell Microcap Index in Q2 2026 as speculation dominated, with pre-revenue biotech, crypto, and unproven AI narratives leading. Quality discipline kept the portfolio behind despite solid absolute returns. Industrials outperformed while technology underweight hurt. New positions include Lifeway Foods and Strattec Security. The manager anticipates rotation into higher-quality businesses as speculative trades unwind and is positioning for healthcare sector strength.

The fund captured strong semiconductor gains in Q2 2026 as AI infrastructure drove the S&P 500's best quarter in seven years, with holdings in Corning, Broadcom, and Lam Research contributing meaningfully. The manager remains cautious on market fragility from speculative AI positioning and potential stagflation risks, maintaining discipline around quality companies with strong balance sheets that can navigate elevated geopolitical uncertainty and possible Fed rate hikes.

The fund underperformed in Q2 2026 despite strong AI infrastructure spending driving semiconductor and cloud computing gains. Technology companies accelerated AI investments to $710 billion while the Iran War created oil supply shocks and inflationary pressures. The Fed maintained hawkish policy under new leadership. The manager maintains conviction in quality large-cap holdings with strong balance sheets positioned to benefit from AI trends and adapt through geopolitical uncertainty.

The fund delivered strong performance driven by AI infrastructure holdings in semiconductors, test equipment, and optical networking, while energy and consumer positions lagged. The managers maintain AI exposure but acknowledge more balanced valuations and are monitoring for capital expenditure cracks and buildout constraints. They see opportunities in shifting AI bottlenecks, aerospace, and infrastructure while balancing exposure with undervalued non-consensus stocks punished by market dynamics.

The fund delivered 0.85% in June, outperforming peers through overweight corporate bond exposure and active duration management. With credit spreads at historic tights and central banks likely to keep policy restrictive longer, the managers focus on generating returns through income and carry rather than spread compression or duration bets. They prioritize high-quality corporate bonds, CLOs, and mortgage securities offering attractive yields without excessive risk.

Global equity markets rallied in Q2 2026 on AI momentum, but Mondrian warns this narrow advance masks significant risks. Hyperscale AI investment now depends on external financing rather than free cash flow, adding fragility. Market concentration has reached historic extremes, with semiconductor valuations pricing in unsustainable growth. While structurally bullish on AI long-term, Mondrian sees cyclical caution warranted and focuses on mispriced opportunities outside the AI winners.

L1 Capital underperformed in Q2 2026 as extreme market concentration favored AI momentum stocks the fund didn't own. The manager increased Nvidia exposure while reducing software holdings due to AI disruption risks, rebalancing toward quality non-AI businesses at compelling valuations. Despite genuine strength in AI infrastructure spending, stretched valuations in some AI Winners contrast with attractive opportunities elsewhere. The portfolio is positioned for patient investors willing to look through near-term momentum.

Madison Mid Cap underperformed in Q2 2026 as markets became hyper-concentrated in AI infrastructure plays, with nine of the Russell Midcap's ten largest companies being direct AI beneficiaries. While the fund's AI-exposed holdings led performance, managers warn current euphoria reflects excessive risk appetite. They're adding to overlooked quality companies at attractive valuations, positioning for eventual rotation away from narrow AI concentration toward broader market participation.

The fund delivered strong outperformance driven by healthcare stock selection and AI-beneficiary technology holdings. Managers view AI infrastructure spending as a transformative economic driver, with computing power demand exceeding supply and creating pricing power across the supply chain. The portfolio balances direct AI capability builders with capital spending beneficiaries. Despite margin pressure at select holdings, the team maintains conviction in long-term enterprise value creation through disciplined fundamental analysis.

Alger Spectra returned 25.05% in Q2 2026, outperforming its benchmark by 800 basis points. The fund is positioned in AI infrastructure companies benefiting from record capital spending as the technology enters its agentic phase. Top contributors included Nebius Group, Astera Labs, and Western Digital, all capitalizing on surging demand for AI computing power and data center expansion by hyperscale cloud providers.

AVI Japan Opportunity Trust invests in concentrated, over-capitalized Japanese small-caps, using active engagement to unlock value. June saw strong performance from Sharingtechnology (+41%) on strategic option expectations and Sanyo Shokai (+10%) on improved capital allocation. The manager controls 5%+ stakes in 14 holdings representing 66% of NAV, driving governance improvements and shareholder returns in an under-researched market with growing activism momentum.

AWO generated 8.1% in Q2 by exploiting wide discounts in London-listed closed-end funds through corporate catalysts. Gresham House Energy Storage led gains with a potential sale process ahead. Seraphim Space delivered alpha through active trading around a major revaluation. Bluefield Solar was taken private at a 17% premium. Private equity holdings benefited from capital return programs. The closed-end fund opportunity set remains compelling.

The Alger Small Cap Focus Fund delivered 31.4% in Q2 2026, outperforming its benchmark by 570 basis points. AI infrastructure drove performance as the fund capitalized on accelerating investment in data center compute capacity, with Nebius Group and Credo Technology as top contributors. The manager maintains concentrated exposure to AI enablers, precision diagnostics, and defense technology, viewing AI's shift to agentic systems as a multi-year growth driver.

Cannara Biotech delivered Q3 results ahead of estimates with revenue up 16% and EBITDA up 11%, maintaining strong margins while expanding market share in Ontario and Alberta. The company secured its first international supply deal with Curaleaf worth up to $21M and accelerated capacity expansion to 75,000kg by FY27. Trading at 6.5x forward EBITDA versus peers at 6-10x despite superior growth, the stock offers 60% upside to Atrium's $3.00 target.

Pernas Portfolio returned 30% in Q2, outperforming indexes substantially. Manager sees an extraordinary multi-year opportunity for active managers to beat the S&P 500 due to index concentration in richly valued mega-caps forced into an AI arms race. Hyperscalers committing $750 billion in AI spending creates productivity spillovers. Portfolio positioned in smaller companies that benefit from AI infrastructure without funding it, focusing on those converting AI into superior business economics.

Riverwater's Small Cap strategy trailed the Russell 2000's 21% Q2 surge as markets rewarded speculation over quality. Energy stock selection drove outperformance through services positioning, while healthcare lagged as speculative biotech rallied. The manager added seven positions including Werner Enterprises and Lifeway Foods, trimmed semiconductor winners, and repositioned toward defensive consumer staples. They anticipate rotation into quality businesses as AI speculation unwinds, playing to their disciplined investment philosophy.

Far View returned +0.91% in H1 2026, benefiting from Westwing's turnaround and UNFI's cyberattack recovery, offset by Sanuwave's wound-care market disruption and Russell 2000 removal. The manager established a mid-sized position in Upsales Technology AB at a double-digit free cash flow yield after a demerger revealed hidden 35%+ EBITDA margin profitability. Despite momentum-driven markets, the fund remains fully invested, focused on overlooked small-cap value opportunities.

Madison Small Cap Fund underperformed the Russell 2000's 21.5% Q2 rally, returning 12.7% as AI-driven tech and biotech surged. Recent software investments and healthcare positions dragged performance despite strong conviction in their long-term value. The fund actively repositioned, adding four new holdings in semiconductors, networking, and HVAC while exiting underperformers. Managers see encouraging signs in small-cap breadth, software recovery, and potential housing rebound.

Market leadership has rotated dramatically with mega-cap tech stocks now reasonably valued for the first time in years while small caps remain cheap despite their best first half since 1991. The manager is buying out-of-favor quality like Microsoft and small-cap value opportunities while avoiding semiconductor stocks trading at potentially unsustainable peak earnings. Individual stock selection matters again as the market's broadening creates opportunities for disciplined value investors.

Thornburg Strategic Income outperformed in Q2 2026 by maintaining shorter duration as new Fed Chair Warsh pivoted hawkish and oil spiked to $118 on Iran conflict before retreating. The portfolio's defensive positioning and BBB/BB overweights captured spread tightening while avoiding rate pain. Managers see yields staying elevated on sticky 3.4% inflation and tight credit spreads offering little cushion for disappointment.

ClearBridge Small Cap Growth posted strong 21% gross returns but underperformed the benchmark's 25.6% gain as AI enthusiasm drove exceptional semiconductor performance. The Strategy benefited from AI-exposed holdings in semiconductors and data center infrastructure but faced headwinds from software disruption concerns and idiosyncratic health care weakness. Managers added 13 positions during a large Russell rebalance, positioning for the next phase of AI adoption beyond infrastructure.

Wedgewood underperformed in Q2 as momentum stocks dominated, but the manager is doubling down on hyperscalers, viewing their massive AI capex as rational given 30%+ returns and investment gains hedging component inflation. Taiwan Semiconductor and Alphabet drove performance. The manager warns semiconductors are at cyclical peaks despite historic growth. New position Hermès offers rare luxury pricing power from artisanal scarcity. Quality stocks at 1999-level discounts present opportunity.

ClearBridge Mid Cap Growth outperformed in Q2 2026 by identifying durable value in AI infrastructure bottlenecks like memory and data connectivity while capturing industrial recovery in equipment rental and modular space. The Strategy added AI beneficiaries Lumentum and Sterling Infrastructure alongside nuclear and biotech opportunities, balancing exposure across the generational AI investment cycle and emerging cyclical recovery rather than chasing benchmark shifts.

Equity markets delivered one of their strongest quarterly reversals in years, driven by exceptional earnings growth and broadening participation beyond mega-cap tech. The AI trade matured as semiconductor suppliers surged and productivity gains diffused across sectors. A fragile US-Iran ceasefire eased oil prices temporarily. High rates and reaccelerating inflation keep Fed cuts off the table, leaving little margin for error despite constructive fundamentals.

Laughing Water Capital delivered 39.8% net returns in Q2 2026 as three portfolio companies were acquired and the largest position doubled. The concentrated portfolio now holds significant cash following exits, with new position AnaptysBio offering 50-80% upside as GSK litigation approaches trial in July. Manager continues hunting mispriced special situations in healthcare and other forgotten corners, focusing on catalyst-driven opportunities with limited macro exposure.

Magellan Global Opportunities returned 4.5% in Q2 2026, underperforming the 12.5% benchmark as AI speculation reached bubble-like extremes with semiconductors surging 88%. The manager refuses to chase momentum-driven leadership, instead selectively adding to neglected quality franchises at the most attractive valuations since post-Covid. Portfolio holds 20-40 high-quality global companies with durable competitive advantages, maintaining discipline to avoid permanent capital loss.

ClearBridge Large Cap Value underperformed in Q2 2026 by avoiding commodity-sensitive AI supply-chain stocks the managers believe will face challenges when new supply arrives in 2027/2028. They are using the selloff in high-quality defensive stocks to upgrade the portfolio, adding Eaton, Apple, Microsoft, and Amazon while maintaining focus on durable franchises with strong balance sheets and the ability to compound through cycles.

Cedar Grove returned 12.8% in Q2 2026, rebounding from Q1 losses by diversifying into 16 positions across healthcare, biotech, and consumer sectors while aggressively shorting overvalued names. The manager explicitly avoids the AI momentum trade, instead focusing on unloved small-cap fundamentals including telehealth leader HIMS, gene therapy plays, and grid modernization. Patience and long-term discipline anchor the strategy amid market volatility.

The fund underperformed in Q2 2026 as AI enthusiasm drove market returns. BNP Paribas led contributions with strong capital build and attractive valuation despite French economic concerns. The fund added SAP at a significant discount, viewing market fears about AI disrupting enterprise software as overblown given SAP's irreplaceable infrastructure role. Intercontinental Exchange declined on unfounded AI disruption concerns despite strong fundamentals and network effects.

Q2 2026 saw extreme market concentration in AI infrastructure stocks drive 12.18% fund return versus 14.93% benchmark. Portfolio suffered multiple compression despite intact earnings growth across software, healthcare, and China holdings. Manager trimmed winners TSMC and ASML, added to de-rated compounders Adyen and Constellation. Views valuation reset as coiled spring for future returns over five-year horizon given rising intrinsic value.