Aperture Small Cap Innovation Fund: Commentary for Q1 2026

The first quarter of 2026 began with exceptional momentum and ended under the shadow of war. Europeanequities opened the year with a powerful January rally. Semiconductors led from the starting block, Defense stocks surged, and cyclical sectors outperformed across the board.By late February, however, the coordinated US-Israeli military operation againstIran, including the assassination of Supreme Leader Khamenei and a stated objective of regime change, abruptly reshaped the investment landscape. Iran’s subsequent closure of the Strait of Hormuz on 4 March triggered what the International Energy Agency has called the largest supply disruption in the history of the global oil market.

Against this dramatic backdrop, the Aperture Small Cap Innovation Fund delivered a return of +1.72%, outperforming its benchmark by 450 basis points1. The bulk of the alpha was generated in January, driven by Stock Selection in Semiconductor Equipment, Renewables, and Construction. In March, as equities sold off sharply, the fund’s YTD outperformance held, in our view a testament to deliberate portfolio construction that saw us underweight the sectors most exposed to the Artificial Intelligence disruption and war dislocation.

For European small caps, Q1 2026 underscored both the opportunity and the volatility inherent in the asset class. The MSCI Europe Small Cap index finished the quarter at -2.8%, trailing large caps as the risk-off environment from mid-February disproportionately impactedsmaller, more domestically exposed companies. Yet this underperformance masks the extraordinary stock-level dispersion within the small-cap universe, which created fertile ground for active Stock Selection. With Small Cap valuations still near multi-year lows relative to large caps and investor positioning remaining extremely light, we believe the structural opportunity remains firmly ahead.

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