Riverwater Partners, an investment management company, released its 'Sustainable Value Strategy' Q2 2026 investor letter. The letter can be downloaded here. Small-cap stocks achieved their best first-half performance since 1991, with the Russell 2500 Value Index rising 17%, driven by the technology sector.
The Sustainable Value Strategy underperformed its benchmark in the second quarter. The shortfall was driven almost entirely by stock selection, particularly the absence of SanDisk (SNDK), which rose approximately 720% year to date and contributed an estimated 6% of the Russell 2500 Value Index's 2026 return. Technology became the strategy's largest overweight at 17%, largely because index reconstitution sharply reduced the benchmark's technology allocation.
Looking ahead to 2026, the outlook for small-cap equities remains constructive due to improving monetary conditions and attractive valuations, despite a lack of anticipated rotation toward higher-quality businesses. The firm remains committed to disciplined, quality-focused investing; historically, quality prevails over the long term. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.
In its second-quarter 2026 investor letter, Riverwater Sustainable Value Strategy highlighted Methanex Corporation (NASDAQ:MEOH). Methanex Corporation (NASDAQ:MEOH), a Canada-based leading methanol and ammonia producing company, detracted from performance this quarter. On September 18, 2026, Methanex Corporation (NASDAQ:MEOH) closed at $60.97 per share.
Over the past month, Methanex Corporation (NASDAQ:MEOH) returned 3.21%, but its shares are up 54.46% over the past year. Methanex Corporation (NASDAQ:MEOH) has a market capitalization of $4.72 billion, and its stock has traded within a 52-week range of $32.00 to $66.75. Riverwater Sustainable Value Strategy stated the following regarding Methanex Corporation (NASDAQ:MEOH) in its Q2 2026 investor letter: "Methanex Corporation (NASDAQ:MEOH) was the largest detractor during the quarter.
Methanex sold off late in the quarter because the Iran/Hormuz-linked risk premium that drove methanol's spring rally unwound once the ceasefire took hold. We believed the Middle East conflict would disrupt natural gas feedstock and shipping through the Strait of Hormuz for an extended period. Once the peace agreement removed that geopolitical premium, methanol prices gave back much of the gain.
Extract — continue reading at the source.
