Brown Advisory's Small Cap Growth Strategy delivered strong relative performance in the first quarter of 2026, outperforming its benchmark, the Russell 2000 Growth Index. The strategy's gains were primarily driven by stock selection in the technology and healthcare sectors.
Key contributors to performance included positions in several technology companies that benefited from increased demand for artificial intelligence and cloud computing services. In healthcare, the strategy benefited from holdings in biotechnology firms that reported positive clinical trial results.
Despite the overall positive performance, the strategy faced headwinds from its underweight position in the energy sector, which rallied during the quarter due to rising oil prices. The strategy's management team noted that they continue to focus on companies with strong fundamentals and sustainable growth prospects.
As of March 31, 2026, the strategy's top sector allocations included technology, healthcare, and industrials. The portfolio remains diversified across a range of small-cap growth companies, with a focus on those with innovative business models and competitive advantages.
