Aperture Small Cap Innovation - Q4 2024 Manager Commentary
In Short
Aperture Small Cap Innovation Fund: Commentary for Q4 2024
Quarter in review
2024 marks the fourth consecutive year of small caps underperforming large caps (M7EUSC vs. M7EU Index), though we note stabilization over the last three quarters. Once again, market volatility, macroeconomic uncertainties, geopolitical developments, and low liquidity created a challenging backdrop for alpha generation in the asset class.
Amid these conditions, the Aperture Small Cap Innovation Fund (the “Fund”) ended the year with a -1.80% relative underperformance1 versus its benchmark2. This was largely driven by difficulties in the technology and semiconductor sectors. The semiconductor industry, particularly equipment manufacturers, encountered significant headwinds in the latter half of the year, culminating in a major warning from mega-cap stock ASML. This event sent ripples throughout the sector, disproportionately affecting small-cap investments. On the other hand, our stock selection in healthcare provided a meaningful counterbalance, contributing positively to performance. We remain steadfast in our commitment to identifying high-quality, growth-oriented companies, convinced that this disciplined approach underpins long-term success.
