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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Smead Value Fund 2026 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Smead Value Fund)

Primary Source Intelligence • Q2 2026 Letter Analysis

Smead Value Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Smead Value Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+7.36%

YTD+16.46%

Annualized+9.62%

Positioning StanceNEUTRAL

Market CapLarge Cap

GeographyUS

Digest Analysis

Quick Take

"Smead Value Fund runs a concentrated 25-30 stock portfolio with 96% active share, deliberately avoiding expensive technology stocks. Q2 winners were mall REITs benefiting from record occupancy and pricing power."

Executive Summary

Smead Value Fund returned 7.36% in Q2 2026 versus 15.20% for the S&P 500, with year-to-date performance of 16.46%. The fund's best performers were mall REITs Macerich and Simon Property Group, which repriced sharply as Class A mall fundamentals reached an inflection point with record occupancy, accelerating leasing spreads, and double-digit tenant sales growth. UnitedHealth Group benefited from a 2.48% Medicare Advantage payment increase. The fund's oil holdings—APA, Occidental, and ConocoPhillips—detracted as oil prices fell to $70, though the manager believes the through-cycle price has structurally shifted to $80 due to permanent geopolitical risk premiums. The portfolio remains concentrated with 96% active share, deliberately avoiding the expensive technology stocks that now comprise 45% of the S&P 500. The manager emphasizes their eight-criteria stock selection process focused on out-of-favor companies with strong competitive advantages, repeat customer businesses, and high free cash flow generation. Holdings break even at $40 oil and will generate significant returns at mid-cycle $80 prices. The manager remains patient and excited about future prospects.

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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

78%

CautiousHigh

High Conviction (78%)

The fund runs a highly concentrated portfolio of 25-30 positions with 96% active share, demonstrating structural conviction. The manager explicitly names and sizes top holdings (SPG 6.53%, MRK 6.25%, CVE 6.03%, MAC 6.03%, APA 5.32%), provides specific thesis details for oil holdings (break even at $40, structural shift to $80 mid-cycle), and articulates clear catalysts for mall REITs (record occupancy, pricing power, zero new supply). The language is declarative about their value discipline and willingness to hold through volatility. The manager states they remain heavily invested in oil stocks despite underperformance, indicating conviction to hold through drawdowns. This is high conviction with clear position sizing and falsifiable theses.

Growth Outlook

15%

BearishBullish

Bearish (15%)

The manager acknowledges the S&P 500's strong performance but expresses concern about concentration risk, noting that 45% of the index is now in technology/AI stocks and calling this a departure from diversification principles. The manager states they have no idea when the intense popularity of expensive futuristic stocks will end, suggesting caution about current market conditions. However, they see selective opportunities in out-of-favor areas like oil and mall REITs. The tone is mildly cautious about broad market valuations but constructive on specific undervalued sectors.

Risk Appetite

55%

DefensiveAggressive

Balanced (55%)

The fund maintains a concentrated portfolio of 25-30 names with 96% active share, indicating a risk-on posture relative to passive indexing. The manager remains heavily invested in oil stocks despite recent underperformance and continues to hold mall REITs and consumer discretionary names. There is no mention of raising cash or adding hedges. The positioning is selectively aggressive in out-of-favor value areas while deliberately avoiding expensive technology stocks, representing a tilted-toward-risk stance within their value discipline.

Capital Deployment

5%

De-riskingDeploying

De-risking (5%)

There is no explicit discussion of cash level changes, new position additions, or material portfolio adjustments in the quarter. The letter mentions that oil holdings detracted and mall REITs performed well, but does not indicate whether the manager added to, trimmed, or maintained these positions. The top holdings list shows a 4.62% allocation to 3 Month T-Bill, suggesting some cash position, but no change from prior periods is stated. The overall tone suggests the portfolio remained relatively stable with no significant deployment or de-risking activity. This scores near neutral with a slight positive bias given the maintained concentrated exposure.

Forward Guidance

40%

CautiousExpansionary

Neutral (40%)

The manager states they are working every day with the goal of future success while sticking to their discipline and are very excited about the coming years. However, there is no explicit discussion of deploying new capital, adding positions, or scaling existing holdings. The language suggests maintaining current positioning and waiting for their thesis to play out rather than active deployment. The tone is patient and committed but not aggressively adding to positions, indicating a selective watching posture.

Language Signal

35%

BearishBullish

Bearish (35%)

The letter contains meaningful bullish language around specific holdings: mall REITs enjoying genuine pricing power, oil holdings positioned to generate significant free cash flow and compound returns, and opportunities in out-of-favor areas. However, this is balanced by cautious language about expensive technology stocks, uncertainty about when current market popularity will end, and acknowledgment of short-term underperformance. The net balance leans modestly positive but is tempered by risk awareness and patience language.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

The manager identifies two specific risks: the concentration of 45% of the S&P 500 in technology/AI stocks eliminating diversification benefits, and the intense popularity of expensive futuristic stocks creating valuation risk. However, these risks are discussed briefly and are framed more as market observations than urgent threats to the portfolio. The manager explicitly states they have no idea when this will end, suggesting uncertainty rather than alarm. The discussion of geopolitical oil risks (Venezuelan supply, Hormuz vulnerability) is framed as a positive catalyst rather than a threat. Overall, risks are acknowledged but not central to the letter's narrative, indicating moderate risk perception.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

The manager sees attractive opportunities in multiple out-of-favor areas: oil stocks offering great value relative to the market, mall REITs with strong fundamentals and pricing power, and a diverse group of consumer discretionary stocks. The letter emphasizes that their portfolio offers the same kind of relative and absolute value that built their track record. The manager states they are encouraged by the steady leadership of companies they own and excited about coming years. While they acknowledge avoiding expensive technology stocks, the tone suggests they have plenty of compelling ideas within their value discipline across multiple sectors.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The fund is explicitly designed to maximize long-term returns, with the manager stating they let companies succeed for long holding periods because multi-year winners create the most alpha. The manager emphasizes they have no idea when the popularity of expensive stocks will end, indicating no urgency to time market shifts. For oil holdings, the thesis is based on through-cycle structural changes rather than near-term price movements. The letter references the fund's 15-year track record and since-inception performance from 2008, demonstrating a multi-year perspective. However, the letter does discuss quarterly performance and specific catalysts like the Medicare Advantage payment increase, suggesting a 2-4 year thesis horizon rather than permanent capital. This scores as multi-year with some catalyst awareness.