The London Company QTD Mid Cap Q2 2026 Vs. RMC Portfolio Commentary
The London Company Mid Cap portfolio returned 9.7% (9.5% net) in Q2 2026, underperforming the Russell Midcap Index's 13.8% gain. The portfolio's underweight in Information Technology and market favoring momentum and high-beta factors contributed to the underperformance.
Intelligence analysis by Llama
The London Company's Mid Cap portfolio underperformed the Russell Midcap Index in Q2 2026 due to stock selection, underweight in Information Technology, and market favoring momentum and high-beta factors. The portfolio emphasizes diversified exposure to high-quality, durable businesses for downside protection and attractive compounding through full cycles.
Imagine you have a portfolio of stocks that you think will do well. But sometimes, the market likes certain types of stocks more than others, and that can make your portfolio do worse than the overall market. That's what happened to The London Company's Mid Cap portfolio in Q2 2026. They had some good stocks, but the market liked other types of stocks more, so their portfolio didn't do as well as it could have.
Analysis
A $60B Vote of Confidence
The London Company's Mid Cap portfolio returned 9.7% (9.5% net) in Q2 2026, underperforming the Russell Midcap Index's 13.8% gain. The portfolio's underweight in Information Technology and market favoring momentum and high-beta factors contributed to the underperformance. The portfolio emphasizes diversified exposure to high-quality, durable businesses for downside protection and attractive compounding through full cycles.
Why Cursor?
The portfolio's underperformance can be attributed to stock selection, with ENTG being a top contributor due to improving semiconductor demand, accelerating AI investment, and rising fab utilization. APPF, a leading provider of cloud-based software solutions for the residential property management industry, also contributed to the portfolio's returns. However, the portfolio's underweight in Information Technology and market favoring momentum and high-beta factors led to underperformance.
The Road Ahead
Risks include fragile AI capex trends, persistent inflation, fluid geopolitical conditions, and elevated valuations requiring near-flawless execution. The portfolio's emphasis on diversified exposure to high-quality, durable businesses aims to provide downside protection and attractive compounding through full cycles. The portfolio's underperformance in Q2 2026 highlights the importance of disciplined portfolio management in a market favoring momentum and high-beta factors.
Key points
- The London Company's Mid Cap portfolio returned 9.7% (9.5% net) in Q2 2026, underperforming the Russell Midcap Index's 13.8% gain.
- The portfolio's underweight in Information Technology and market favoring momentum and high-beta factors contributed to the underperformance.
- The portfolio emphasizes diversified exposure to high-quality, durable businesses for downside protection and attractive compounding through full cycles.
- Risks include fragile AI capex trends, persistent inflation, fluid geopolitical conditions, and elevated valuations requiring near-flawless execution.
The London Company's Mid Cap portfolio is positioned for the current market environment by emphasizing diversified exposure to high-quality, durable businesses, aiming for downside protection and attractive compounding through full cycles. This disciplined approach has produced a growing and diversified client base.
Risks include fragile AI capex trends, persistent inflation, fluid geopolitical conditions, and elevated valuations requiring near-flawless execution, warranting disciplined portfolio management.
