Commentary
3Q2024 - U.S. Small Company Growth Commentary
Despite a challenging market environment, we are enthused about potential opportunities as the rate environment becomes more accommodative and growth across many businesses accelerates in the years ahead.
Read the full commentary and disclosures here
- Recent volatility has worked for and against us. As it became clear that our thesis for certain stocks was no longer intact, we moved on to other opportunities. In most cases, however, we retain deep conviction and use such periods of weakness to add to positions. We view this approach as a significant opportunity.
- The U.S. Small Company Growth Composite Portfolio (the “Portfolio”) lagged amid robust, risk-on market rallies during the quarter, while outperforming drawdowns in the Russell 2000 Growth Index (the “Index”).
- This aligns with the broader market trend observed throughout 2024, where low-quality stocks with high price momentum drove positive small cap performance, making for a challenging environment for long-term-oriented, high-quality growth companies.
- The top three contributors to the Portfolio's relative and absolute performance in the quarter were Goosehead Insurance, Revolve Group, and Hamilton Lane.
- The top relative detractors were Progyny, elf Beauty, and Alarm.com. The top absolute detractors were Progyny, elf Beauty, and Rambus.
- During the quarter, we initiated six new positions, including NV5 Global, Rambus, Paylocity Holdings, Insight Enterprises, elf Beauty, and Dutch Bros. We exited positions in SiTime, AppFolio, RH, Doximity, and Alight.