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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"RS Large Cap Value underperformed in Q2 2026, returning 5.03% net versus 13.87% for the Russell 1000 Value Index. Market leadership shifted from hyperscalers to AI infrastructure providers."
The RS Large Cap Value Strategy underperformed its Russell 1000 Value Index benchmark in Q2 2026, returning 5.03% net versus 13.87% for the index. The S&P 500 rallied 15% during the quarter despite ongoing uncertainties including the Iran conflict, elevated inflation, and Federal Reserve leadership changes. Market leadership shifted from the Magnificent Seven hyperscalers to AI infrastructure providers including semiconductors, memory, and power generators, driving strong performance in Industrials and Energy sectors. Small cap stocks outperformed large caps as investors moved down the cap spectrum. The strategy's underperformance was driven by unfavorable stock selection in Information Technology and Industrials, partially offset by positive selection in Communication Services, Consumer Staples, and Energy. The team maintains its ROIC-focused approach, seeking companies with sound balance sheets, improving fundamentals, and stock prices trading at deep discounts to intrinsic value. Key holdings include CVS Health, which is recovering from Medicare Advantage margin compression, and MarketAxess, where the team remains positive on structural change opportunities. Looking ahead, the team continues to prioritize businesses with improving ROIC and strong balance sheets while maintaining strict valuation discipline and a margin of safety approach.
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