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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Hood River Capital - Small Cap Growth Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"Hood River's Small Cap Growth Fund significantly outperformed in Q2 2026, driven by selective AI infrastructure and defense holdings. The managers maintain a disciplined, bottom-up approach focused on durable growth businesses with improving fundamentals, avoiding macro-driven repositioning despite hawkish Fed signals."
Hood River's Small Cap Growth Fund delivered exceptional performance in Q2 2026, returning +30.34% versus the Russell 2000 Growth Index's +25.71%, bringing year-to-date outperformance to +1,517 basis points. The fund's success was driven primarily by stock selection, particularly in information technology (+435 bps in Q2) and industrials, reflecting the managers' focus on AI infrastructure beneficiaries and defense-oriented businesses. The team maintains selective exposure to AI, emphasizing companies with tangible demand rather than broad thematic plays, while defense holdings benefit from structural changes in government procurement and next-generation capabilities investment. Despite incrementally hawkish Federal Reserve communication and modest inflation increases, the managers are not repositioning around macro forecasts, instead assessing individual business execution across potential outcomes. Following an unusually large Russell 2000 Growth reconstitution, the fund's sector weights have widened, with industrials now the largest overweight. The managers acknowledge some recent multiple compression but continue identifying mispriced opportunities through their research-intensive process, viewing elevated dispersion and periodic price-fundamental disconnects as favorable for active stock selection.
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