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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, Brandes Small Cap Value Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sector."
The Brandes Small Cap Value Fund delivered strong performance in the second quarter of 2025, posting a return of 12.12% for Class I shares and significantly outperforming its benchmarks, the Russell 2000 Index (+8.50%) and the Russell 2000 Value Index (+4.97%). This outperformance was primarily driven by stock selection across multiple sectors, with the largest positive contributions coming from the industrials sector. Key holdings Graham Corp and Orion Group Holdings rebounded sharply from Q1 declines, bolstered by solid operational execution and earnings that exceeded market expectations. Other positive contributors included Arlo Technologies, Elanco Animal Health, Netgear, and Papa John's. Conversely, detractors emerged in consumer discretionary, staples, and energy, with Hanesbrands, American Outdoor Brands, and Edgewell Personal Care impacted by tariff uncertainty and weak consumer confidence, while lower oil prices weighed on Innovex International. During the quarter, the small-cap investment committee initiated new positions in Movado Group and Open Text, while fully exiting Buzzi, Northwest Natural Holding, and Crawford & Company. The manager highlighted Open Text as a compelling value opportunity, noting its strong cash-generative core, AI and cloud optionality, and newly repaired balance sheet. Brandes remains highly optimistic about the long-term risk/reward potential of value stocks.
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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 Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Growth Outlook
Market outlook remains high conviction: The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Risk Appetite
Risk appetite posture is high conviction: The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Forward Guidance
Forward guidance signal: The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Language Signal
Tone analysis indicates high conviction language: The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Opportunity Density
Opportunity density index indicates high conviction actionable entry points. The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
Time Horizon
Investment time horizon reflects a high conviction orientation. The Fund outperformed its benchmarks with a 12.12% return in Q2 2025, driven by industrial segment recoveries and selective value plays, despite macro headwinds in the consumer sec...
