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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Cambiar SMID returned 14.39% in 2Q 2026, trailing the index as AI-driven semiconductors dominated. The manager is trimming expensive technology positions despite strong fundamentals, reallocating to quality value names with robust cash flows and reasonable valuations."
The Cambiar SMID Fund returned 14.39% in 2Q 2026, trailing the Russell 2500 Value Index's 18.5% gain as small caps rallied sharply. The quarter was dominated by AI-driven technology stocks, particularly semiconductors, which now comprise nearly 50% of the S&P 500 alongside related names. While the portfolio's semiconductor holdings in Lattice Semi and On Semiconductor participated in the rally, the extreme concentration and parabolic price moves warrant caution given stretched valuations. The manager is prudently trimming expensive technology positions and reallocating to quality companies with strong fundamentals. Industrials outperformed significantly, led by sharp rebounds in WillScot Holdings and ACV Auctions, while Financials holdings generated positive returns but trailed the index due to weakness in Lazard and Cboe. The portfolio ended with 4% cash for opportunistic deployment. Looking ahead, the manager questions whether 2026 will mark small cap leadership after years of underperformance, maintaining discipline through a singles-and-doubles approach focused on compounding capital rather than chasing euphoric themes. Value stocks are leading year-to-date despite growth's second quarter outperformance.
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