“We believe our businesses generally continue to deliver on their fundamentals. Yes, we have had some where the organic growth may have been muted temporarily – but nothing that would indicate their competitive advantage has been compromised at all. We have stated this before, but we believe our portfolio companies are just at the beginning of achieving efficiencies in their business models on multiple levels from the recent innovations utilizing AI.”
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 3Q 2026.
Key Insights and Trends
- The Russell 2000 Index declined during the quarter, with weakness in housing-related, transportation and consumer discretionary businesses affecting areas where the strategy has direct or indirect exposure
- Higher interest rates may affect small caps indirectly through end-market exposure, bringing additional attention to pricing control and disciplined cost management across its businesses
- AI implementation remains in the early stages for the strategy’s businesses, with potential applications spanning client acquisition, revenue opportunities and operating efficiencies
- Primary contributors and detractors to the Small Cap Core strategy
Stay Informed with Our Latest Insights
For more insights, read our 3Q 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.
