Ariel Investments, an investment management company, released its “Ariel Fund” Q2 2026 investor letter. A copy of the letter can be downloaded here. Ariel Investments said its Ariel Fund returned 13.59% in the second quarter of 2026, trailing the Russell 2500 Value Index’s 18.50% gain and the Russell 2000 Value Index’s 17.19% return despite a sharp rebound in U.S. equities. The fund’s performance was supported by strength in several consumer and entertainment holdings but was offset by weakness in energy services, healthcare, and alternative asset management investments amid geopolitical disruptions, supply chain challenges, and concerns over private credit markets. Looking ahead, the firm expects global growth to remain modest with inflation, higher borrowing costs, geopolitical tensions, and concentrated market leadership likely to drive volatility. Despite these challenges, Ariel Investments said it remains focused on identifying high-quality businesses with durable competitive advantages through disciplined bottom-up research to capitalize on long-term opportunities as market leadership broadens. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Ariel Fund highlighted stocks like Leslie’s, Inc. (NASDAQ:LESL). Leslie’s, Inc. (NASDAQ:LESL) is a specialty retailer of swimming pool supplies, equipment, and maintenance services for residential and commercial customers. The one-month return of Leslie’s, Inc. (NASDAQ:LESL) was -85.93% while its shares traded between $0.8701 and $13.5660 over the last 52 weeks. On July 31, 2026, Leslie’s, Inc. (NASDAQ:LESL) stock closed at approximately $0.9510 per share, with a market capitalization of about $9.64 million.
Ariel Fund stated the following regarding Leslie’s, Inc. (NASDAQ:LESL) in its Q2 2026 investor letter:
Leslie’s Inc. (NASDAQ:LESL), a U.S. direct-to-consumer pool and spa care services company, contributed to performance during the quarter as operating trends improved. Higher sales, stronger comparable store performance and gross margin expansion combined with lower SG&A expenses, boosted results. By reducing inventory and lowering capital expenditures, management was able to reaffirm its full-year outlook. We believe these results reflect continued progress on the company’s operational improvement initiatives and position Leslie’s for stronger performance as the year progresses—particularly during the seasonally strong second half.
Leslie’s, Inc. (NASDAQ:LESL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 5 hedge fund portfolios held Leslie’s, Inc. (NASDAQ:LESL) at the end of the first quarter, which was 10 in the previous quarter. While we acknowledge the risk and potential of Leslie’s, Inc. (NASDAQ:LESL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Leslie’s, Inc. (NASDAQ:LESL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Leslie’s, Inc. (NASDAQ:LESL) and shared the company’s Earnings Call Transcript. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
