AWI gains traction as small-cap stocks weather market volatility better than large-cap peers in early 2026.
Armstrong World Industries (AWI) was highlighted as a standout performer in The London Company Small-Mid Cap Strategy’s Q1 2026 investor letter. The portfolio, which focuses on small and mid-cap equities, declined 3.4% during the quarter, underperforming the Russell 2500 Index’s 2.0% gain.
US equities faced headwinds in Q1 2026, with the Russell 3000 falling 4% and the S&P 500 posting losses. March’s Iran conflict reversed early-year gains, driving crude oil prices higher and raising inflation concerns. Large-cap growth stocks suffered double-digit declines, while small caps showed relative resilience.
Sector dispersion was extreme, with Energy surging over 35% and Technology dropping more than 9%. The portfolio’s underweight to Energy and commodity-linked industries weighed on performance, though stock selection also contributed to underperformance.