Insights
“Early in the quarter, the so‑called ‘Saaspocalypse’ led to software stocks losing approximately $2 trillion in market cap, with high‑quality franchises punished alongside more speculative businesses. While disappointing, this doesn’t change our conviction in the businesses we own or their underlying earnings growth.”
Noran Eid, Portfolio Manager and Senior Research Analyst, provides an update on the performance of the Mid Cap Growth strategy and shares her market outlook. Listen to her most recent episode where Noran recaps market activity during 1Q 2026.
Key Insights and Trends
- Market performance during the quarter reflected sharp factor rotations, with mid‑cap growth significantly underperforming value amid geopolitical conflict, rising oil prices, and renewed inflation concerns
- Indiscriminate selling tied to fears of AI‑driven disruption weighed heavily on software and growth‑oriented holdings, including high‑quality franchises, during the early part of the quarter
- Relative performance was pressured by limited exposure to energy and materials and an investment approach that avoids capital‑intensive businesses during commodity‑led rallies
- Primary contributors and detractors to the Mid Cap Growth 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.
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This information is being provided by Kayne Anderson Rudnick Investment Management, LLC (“KAR”) for illustrative purposes only. Information contained in this material is not intended by KAR to be interpreted as investment advice, a recommendation or solicitation to purchase securities, or a recommendation of a particular course of action and has not been updated since the date of the material, and KAR does not undertake to update the information presented should it change. This information is based on KAR’s opinions at the time of the recording of this material and are subject to change based on market activity. There is no guarantee that any forecasts made will come to pass. KAR makes no warranty as to the accuracy or reliability of the information contained herein. Past performance is no guarantee of future results.
