SouthernSun SMID Cap Strategy’s Q2 2026 Investor Letter

SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Smid Cap Strategy” second-quarter 2026 investor letter. The second quarter of 2026 was influenced by the AI boom and the Iran War, impacting interest rates and consumer sentiment. Portfolio companies linked to high-value consumer purchases faced pressure but still aligned with positive earnings and trends. The SMID Cap Composite returned +12.47% gross (+12.28% net), underperforming the Russell 2500® and Russell 2500® Value, which returned 20.26% and 18.50% respectively. YTD, the composite returned 23.29% on a gross basis (22.44% net) versus 36.72% and 38.54% for the indexes, respectively. Despite overall market volatility, robust fundamentals were reported, particularly among AI-tied sectors. An underweight in speculative growth caused underperformance relative to the index in Q2, although exposure to the AI data center sector was maintained while profits were taken from AI investments. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.

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