“Given the headwinds and volatility of the markets in Q1, we are pleased with the performance of the Small Cap Core portfolio. Favorable stock selection—especially in Industrials—was enough to overcome some weakness we had in Financials and led to slight outperformance relative to our benchmark.”
Each quarter, Jon Christensen, Portfolio Manager and Senior Research Analyst provides an update on the performance of the Small Cap Core strategy and shares his market outlook. Listen to his most recent episode where Jon recaps market activity during 1Q 2026.
Key Insights and Trends
- Equity markets experienced elevated volatility during the quarter as Middle East conflict drove sharp increases in oil and commodity prices, contributing to broad market pullbacks and late‑quarter rebounds
- Investor concerns around AI obsolescence led to indiscriminate selloffs in certain software‑related holdings, despite continued confidence in the embedded customer relationships and long‑term earnings potential of those businesses
- Favorable stock selection, particularly within industrials, helped offset weakness in other areas and supported relative performance during a challenging quarter
- Primary contributors and detractors to the Small Cap Core strategy
Stay Informed with Our Latest Insights
For more insights, read our 1Q 2026 Market Review Commentary or subscribe to KayneCast where we provide the latest updates from the KAR Investment Team on our investment strategies.
KayneCast is available on Apple Podcasts and Spotify.
