Aperture Discover Equity - Q2 2024 Manager Commentary
In Short
Aperture Discover Equity Fund: Commentary for Q2 2024
Quarter in review
After a first quarter (approximately +400bps), we underperformed the Russell 2000 Total Return (RTY) benchmark by roughly 155bps net of fees during the second quarter. Small caps experienced one of their worst relative return quarters ever compared to large caps. Also, the index experienced a rare instance of meaningful contribution from two AI-related positions (SMCI and MSTR) which became an abnormally high weighting in the index. Excluding SMCI, the Russell 2000 rose just 0.76% YTD, and excluding both SMCI and MSTR, the RTY was up 0.40% YTD, causing most active managers to underperform. Notably, SMCI contributed to over half of the Russell 2000's year-to-date performance. At the time of this writing, the Discover UCITS Fund is up over ~12% net of fees YTD on an absolute basis. As discussed later in this commentary, small caps have begun to outperform.
