Hotchkis & Wiley, an investment management company, released its second-quarter 2026 investor letter for the “Hotchkis & Wiley Mid-Cap Value Fund.” A copy of the letter can be downloaded here.
Equity markets posted strong returns in the second quarter of 2026, with the Russell Midcap Index rising 13.8% and the Russell Midcap Value Index returning 13.4%, despite concerns about inflation, a hawkish Federal Reserve, and rising oil prices due to the Iran conflict
Narrow market leadership was evident, particularly semiconductor stocks and other stocks in the AI sector, which saw returns exceeding 100%. The Firm favors quality businesses with attractive valuations, believing that fears regarding AI’s impact are overstated. The Hotchkis & Wiley Mid-Cap Value Fund lagged the Russell Midcap Value Index, achieving a 4.74% return in the second quarter, primarily due to underperformance in technology and energy sectors, while stock selection in healthcare contributed positively.
In addition, please check the Fund’s top five holdings to know its best picks in 2026. In its Q2 2026 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted Kosmos Energy Ltd. (NYSE:KOS). Kosmos Energy Ltd. (NYSE:KOS), a deepwater oil and gas exploration and production company, detracted from the Fund’s performance during the quarter due to crude oil price weakness.