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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Carillon Eagle Small Cap Growth Fund 2023 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Carillon Eagle Small Cap Growth Fund)

Primary Source Intelligence • Q3 2023 Letter Analysis

Carillon Eagle Small Cap Growth Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Carillon Eagle Small Cap Growth Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+1.41%

Positioning StanceConstructive

Market CapSmallCap

GeographyUS

Digest Analysis

Quick Take

"Small-cap growth fund targeting high-quality companies with secular growth drivers and strong balance sheets. Core holdings benefit from AI transformation, energy discipline, and specialty market dynamics."

Executive Summary

The Carillon Eagle Small Cap Growth Fund focuses on high-quality small-cap growth companies positioned to benefit from secular trends despite challenging macro conditions. The fund's core thesis centers on companies with resilient balance sheets, strong free cash flow generation, and growth prospects underpinned by secular themes like artificial intelligence, energy transition, and specialty insurance markets. Key holdings include Liberty Energy, benefiting from higher oil prices and North American shale activity; Celsius Holdings, capitalizing on fitness beverage trends; and PJT Partners, gaining from restructuring demand in higher rate environments. The manager acknowledges significant macro risks including rising real interest rates, potential Fed policy mistakes, and consumer vulnerability from multiple headwinds. However, they believe current valuations for growth stocks present attractive long-term opportunities. The portfolio maintains exposure to AI beneficiaries, energy service companies with capital discipline, and specialty businesses with competitive moats. Despite near-term uncertainty from monetary tightening and economic slowdown risks, the fund expects high-quality growth companies to outperform given reasonable valuations relative to their secular growth prospects.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

68%

CautiousHigh

Moderate (68%)

The fund demonstrates moderate-high conviction through specific position sizing (top holdings range from 1.17% to 3.12%), detailed thesis explanations for individual holdings, and willingness to maintain positions through volatility. The manager provides clear rationales for each holding and expresses confidence in secular themes, though the diversified 92-position portfolio prevents a higher score.

Growth Outlook

38%

BearishBullish

Neutral (38%)

The manager expresses cautious concern about market conditions, noting that equity market valuations have come under pressure from rising interest rates and the economic outlook for 2024 has become murkier. However, they also see attractive long-term opportunities in growth stocks at current levels, preventing a more negative score.

Risk Appetite

10%

DefensiveAggressive

Defensive (10%)

The fund maintains a fully invested posture with 92 holdings and continues to hold positions through volatility. While acknowledging risks, they are not reducing exposure or moving to cash, indicating a slight positive risk appetite despite macro concerns.

Capital Deployment

0%

De-riskingDeploying

De-risking (0%)

No specific cash level changes or deployment activity is mentioned in the letter. The fund appears to maintain its existing positioning without significant additions or reductions, indicating neutral capital deployment activity during the quarter.

Forward Guidance

15%

CautiousExpansionary

Cautious (15%)

The manager indicates they continue to look for ways to benefit from AI trends and see opportunities in various sectors. They express optimism about finding attractive opportunities in specific areas like boutique advisory firms and specialty insurance, suggesting a mild deployment bias.

Language Signal

0%

BearishBullish

Bearish (0%)

The language is balanced between opportunity-focused terms (attractive, well-positioned, excited, optimistic) and risk-focused language (challenged, pressured, vulnerable, headwinds). The net balance is roughly neutral with both bullish and bearish directional language present throughout.

Perceived Risk

72%

Low RiskElevated

Elevated Risk (72%)

The manager identifies multiple significant risks including Fed policy mistakes, rising real interest rates impacting investment spending, consumer vulnerability from multiple headwinds, and mortgage market stress. These risks are discussed in detail with specific data points (mortgage rates at 8%, applications at 1996 lows), indicating high perceived environmental risk.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

The manager sees selective opportunities in defined areas including AI beneficiaries, energy service companies, boutique advisory firms, and specialty insurance. While acknowledging challenging conditions, they identify multiple specific sectors and themes where attractive opportunities exist, suggesting moderate-good opportunity density.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The manager emphasizes long-term opportunities and secular trends, discussing multi-year themes like AI transformation, energy transition, and demographic shifts. They express willingness to hold through short-term volatility and focus on companies with durable competitive advantages, indicating a multi-year investment horizon.