SouthernSun Small Cap Strategy’s Q2 2026 Investor Letter

SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” second-quarter 2026 investor letter. The second quarter of 2026 was driven by the AI boom and the Iran War, affecting interest rates, oil, commodities, and consumer sentiment. The riskiest market segments performed robustly in the quarter, primarily driven by technology and industrial firms linked to the AI arms race. Some portfolio companies linked to high-value consumer purchases faced pressure but still aligned with positive earnings and trends. The Small Cap Composite returned +10.79% on a gross basis (+10.58% net) in the second quarter versus the Russell 2000, which returned 21.49%, and the Russell 2000 Value, which returned 17.19%, over the same period. The composite returned 27.10% on a gross basis (26.13% net) versus 40.78% and 43.01% for the indexes. The fund underperformed the index due to the underweight position in speculative growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.

A copy of SouthernSun Small Cap Strategy’s Q2 2026 investor letter can be downloaded here.