Sycamore Capital Management, a franchise of Victory Capital Management, released its Q2 2026 investor letter for "Sycamore Mid Cap Value Equity Strategy". A copy of the letter can be downloaded here. Sycamore Capital's Mid Cap Value investment team focuses on a bottom-up approach to identify undervalued businesses with growth potential.
In Q2 2026, the strategy returned 9.6% (net) underperforming the Russell Midcap Value Index's 13.83% return, due to both stock selection and sector allocation. Small-cap equities outpaced both large- and mid-cap equities during the second quarter of 2026. While U.S. indices like the S&P 500® Index saw significant gains in the quarter, market dynamics shifted towards a select group of stocks driven by AI-related momentum.
The commentary highlights underlying risks, such as market concentration and the influence of passive investment vehicles, reminding investors to reconsider their exposure to AI. Overall, it calls for a cautious evaluation of current investments in light of these risks. Please review the Fund's top five holdings to gain insights into their key selections for 2026.
In its Q2 2026 investor letter, Sycamore Mid Cap Value Equity Strategy highlighted L3Harris Technologies, Inc. (NYSE:LHX). Founded in 1895, L3Harris Technologies, Inc. (NYSE:LHX) is an aerospace and defense company. On August 12, 2026, L3Harris Technologies, Inc. (NYSE:LHX) closed at $290.74 per share, reflecting a market capitalization of $54.14 billion.
L3Harris Technologies, Inc. (NYSE:LHX) posted a one‑month return of 2.22%, while its shares gained 7.26% over the past 52 weeks. Sycamore Mid Cap Value Equity Strategy stated the following regarding L3Harris Technologies, Inc. (NYSE:LHX) in its Q2 2026 investor letter: "L3Harris Technologies, Inc. (NYSE:LHX), a defense contractor and IT services provider, rounded out the list of top detractors, with shares trading lower amid a broad defense sector derating. After several quarters of strong performance, the sector pulled back on concerns the proposed $1.5 trillion defense budget would not pass Congress.
Investors worry the $350 billion reconciliation package inside that budget will face hurdles heading into the midterms. Though LHX has meaningful base-budget exposure, cutting or materially reducing the reconciliation package would weigh on projects expected to benefit the company, such as Golden Dome. Shares also came under pressure after LHX announced the spinoff of its missile solutions division, Axyv.
Extract — continue reading at the source.
