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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Hotchkis & Wiley Small Cap Value Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent of the dot-com era."
During the second quarter of 2025, the Hotchkis & Wiley Small Cap Value Fund returned 3.35%, underperforming the Russell 2000 Value Index's return of 4.97%. The quarter was highly volatile, marked by a 14% drop in small caps following tariff announcements, which later recovered as negotiation hopes grew. Fund performance was challenged by a market dynamic where small companies without earnings outperformed those with earnings. Despite these headwinds, 70% of the portfolio's holdings exceeded consensus earnings expectations. On a macro level, inflation showed signs of moderation, and interest rates were held steady. The manager highlights that the valuation gap between large and small-cap stocks remains at historically wide levels, setting a favorable long-term backdrop for fundamental small-cap value.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Growth Outlook
Market outlook remains above average conviction: The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Risk Appetite
Risk appetite posture is moderate conviction: The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Forward Guidance
Forward guidance signal: The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Language Signal
Tone analysis indicates above average conviction language: The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Opportunity Density
Opportunity density index indicates high conviction actionable entry points. The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
Time Horizon
Investment time horizon reflects a high conviction orientation. The Hotchkis & Wiley Small Cap Value Fund weathered a volatile Q2 to return 3.35%, and remains positioned to capitalize on a historic large-to-small cap valuation gap reminiscent o...
