April 30, 2026By Julie Kutasov

Volatility Up, Quality Still Central

Small-Mid Cap Core 1Q 2026 Update | KayneCast 311

“Equity markets are inherently forward‑looking and tend to react quickly to changes in expectations. Recent market behavior illustrates this dynamic, with even modest signs of conflict de‑escalation triggering equity rallies.

Importantly, over the longer-term, our high‑quality businesses have historically demonstrated resilience during challenging economic times.”

Each quarter, Julie Kutasov, Portfolio Manager and Senior Research Analyst, provides an update on the performance of the Small Mid Cap Core strategy and shares her market outlook. Listen to her most recent episode where Julie recaps market activity during 1Q 2026.

Key Insights and Trends

  • Market performance during the quarter was driven by energy‑led benchmark gains and continued momentum in AI‑related technology stocks
  • Relative performance was pressured by limited exposure to energy, materials, and pure‑play AI hardware
  • The strategy maintained a focus on high‑quality companies with strong market positions, pricing power, and solid balance sheets
  • Primary contributors and detractors to the Small-Mid 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.

KARCast is the official podcast series of KAR. This material is provided as a matter of general information and is not intended to be relied upon as a forecast or research. The opinions expressed herein are those of the speakers and are not necessarily the opinions of KAR or its affiliates, are current as of the date and time of the recording, and are subject to change at any time due to changes in market or economic conditions. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by KAR to be reliable and are not necessarily all inclusive. KAR does not guarantee the accuracy or completeness of this information. Any securities included in this podcast are based on objective, non-performance based criteria and such mentions should not be considered a recommendation to purchase or sell the securities mentioned. This podcast should not be construed as an offer or solicitation to purchase or sell any security. KAR’s strategies may not be suitable or appropriate for all investors depending on their specific investment objectives and financial situation. Potential investors should always consult with their own financial professional before determining whether to invest in a particular investment or investment strategy. Reliance upon information in this material is at the sole discretion of the listener. To the extent any performance is discussed, past performance is not indicative of future results.