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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Next Century Growth delivered exceptional Q2 returns led by AI infrastructure, semiconductors, and data centers, with small caps posting their best first half since 1991. The manager trimmed technology winners after sharp valuation expansion and redeployed into health care, industrials, and software."
Next Century Growth Investors delivered exceptional Q2 2026 performance across all five strategies, with the Large Cap Growth strategy up 27.78% net versus 16.74% for the Russell 1000 Growth Index, driven by concentrated exposure to AI infrastructure, semiconductors, and data center buildout. Technology holdings returned 90-120% in aggregate across smaller cap strategies, with the Philadelphia Semiconductor Index posting its best quarter on record as roughly $700 billion of hyperscaler capex commitments restored investor conviction. Small caps posted their strongest first half since 1991, benefiting from accelerating earnings growth in semiconductors, defense, and reshored manufacturing. Following the sharp rally, the manager trimmed AI-exposed positions after valuations expanded considerably and redeployed capital into health care, industrials, financials, and software at more attractive valuations. The firm maintains high conviction in small cap opportunities where fundamentals are accelerating and relative valuations remain reasonable despite recent outperformance. Key risks include elevated inflation pressures, potential Fed rate hikes, and stretched valuations in mega-cap AI names requiring sustained earnings delivery to justify current multiples.
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