Wasatch Global Investors, an asset management company, released its “Small Cap Growth Strategy” Q2 2026 investor letter.
A copy of the letter can be downloaded here
Small-cap equities experienced strong gains in the second quarter, primarily driven by companies associated with artificial intelligence (AI). However, the leadership within this sector remains narrow. Unprofitable companies and those benefiting from rapid AI-driven demand performed well.
As a result, the strategy underperformed compared to the Russell 2000® Growth Index, which gained 25.71%. The strategy’s disciplined focus on higher-quality businesses caused it to trail the benchmark, though several AI-related holdings contributed positively. The strategy prioritizes companies with sustainable growth potential, emphasizing the importance of quality investments.