This is a test for all blogging purposes.
comparing a snapshot of quarter-end performance from Q2 and Q3 would suggest it was a relatively quiet quarter for US small caps. However, the third quarter began with quite a bit of volatility. In July we witnessed what we would describe as the biggest rotation from growth to value we have seen in our 20+ year careers. Illiquid, relatively weak stocks that were cheap on absolute valuation yet had negative earnings revisions rallied. Given that Hood River focuses on companies we believe will outperform market expectations over the coming quarters and years, this rotation had a negative impact on our relative performance. Further, we had an imbedded tilt towards AI in the portfolio — a group which also faced headwinds in July. Thus, at one point our US Small Cap Growth fund was trailing the Russell 2000® Growth Index by approximately 400 points on a quarter to date basis. Despite this, the investment team continued to execute on our 20+ year process to ensure we were invested in our best ideas heading into earnings season, and our process prevailed.