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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Mairs & Power - Small Cap Fund 2026 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Mairs & Power - Small Cap Fund)

Primary Source Intelligence • Q1 2026 Letter Analysis

Mairs & Power - Small Cap Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Mairs & Power - Small Cap Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+4%

YTD+4%

Annualized+11.47%

Positioning StanceNEUTRAL

Market CapSmallCap

GeographyUS

Digest Analysis

Quick Take

"Small-cap fund outperformed in Q1 2026 as the asset class showed improved earnings and rotation away from megacaps. Middle East conflict disrupted energy markets and reignited inflation concerns, but small-cap earnings growth remains strong at 16% expected for S&P 600."

Executive Summary

Small-cap fund outperformed in Q1 2026 as the asset class showed improved earnings and rotation away from megacaps. Middle East conflict disrupted energy markets and reignited inflation concerns, but small-cap earnings growth remains strong at 16% expected for S&P 600. Fund maintains disciplined approach targeting high-quality businesses at attractive valuations.

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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

65%

CautiousHigh

Moderate (65%)

The manager demonstrates moderate-high conviction through specific position additions and exits with clear rationales. Named holdings are discussed with detailed thesis explanations, and the fund maintains concentrated exposure to specific themes like semiconductors and automation.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about small-cap opportunities and corporate earnings broadening, but acknowledges significant risks from Middle East conflict and inflation. The outlook balances positive earnings trends with geopolitical uncertainty.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

The fund actively added four new positions while exiting seven, showing selective deployment. The manager emphasizes focusing on reasonably valued, high-quality businesses rather than highly priced growth companies, indicating measured risk appetite.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

The fund added four new positions while exiting seven, representing active portfolio rotation rather than net deployment. No cash level changes are mentioned, suggesting this is primarily rotation of existing capital rather than new deployment.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

The manager states the fund is well positioned for long-term investors and expects to benefit if markets further broaden. However, guidance is tempered by acknowledgment of geopolitical risks and inflation concerns.

Language Signal

15%

BearishBullish

Bearish (15%)

Language includes positive terms like attractive opportunities, compelling valuations, and improved earnings, but is balanced with significant risk language around conflict, inflation, and uncertainty. Risk language slightly outweighs bullish signals.

Perceived Risk

75%

Low RiskElevated

Elevated Risk (75%)

The manager identifies multiple specific risks including Middle East conflict, inflation resurgence, and potential Fed policy tightening. Detailed discussion of commodity disruption through Strait of Hormuz and comparison to 1970s energy crisis indicates high perceived risk.

Opportunity Density

70%

ScarceAbundant

Abundant (70%)

The manager sees attractive opportunities in small-cap stocks with improved earnings and compelling valuations. Multiple new positions were added across different sectors, suggesting a relatively rich opportunity set despite macro headwinds.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The manager emphasizes long-term discipline and states the fund is positioned to benefit long-term investors. Discussion focuses on multi-year earnings trends and structural shifts rather than near-term catalysts, indicating a patient, multi-year investment horizon.