Conestoga Capital Advisors SMid Cap Strategy’s Q4 2025 Investor Letter

Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. In Q4 2025, Conestoga Capital Advisors SMid Cap Strategy trailed the Russell 2500 Growth Index, returning -2.71% vs. 0.33% for the Index. Relative performance fluctuated throughout the quarter.  Negative stock selection in Industrials and Real Estate drove underperformance in the quarter, while underweight in the volatile biotechnology industry also impacted relative returns. Nevertheless, positive stock selection in Financials and Basic Materials countered these losses. From a factor standpoint, a “tug-of-war” between high- and low-quality elements lasted throughout the quarter. For the full year, the composite delivered a total return of -4.71% net of fees, compared to the benchmark’s 10.31% return. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

A copy of Conestoga Capital Advisors SMid Cap Strategy’s Q4 2025 investor letter can be downloaded here.