In the second quarter of 2026, the Institutional Class shares of the Nomura Core Equity Fund demonstrated superior performance compared to its benchmark, the S&P 500 Index. This notable achievement was largely attributable to adept sector allocation strategies and precise stock selections, particularly within the information technology sector. This positive outcome reversed the previous quarter's trend, where an underweight position in the energy sector had negatively impacted performance. The overall market saw a significant rebound, with the S&P 500 recording its strongest quarter in approximately six years, fueled by robust corporate earnings and the stabilization of energy prices.
The second quarter of 2026 witnessed a remarkable surge in the S&P 500 Index, climbing by approximately 15.2%, making it the most robust quarterly performance in nearly six years. This impressive recovery was primarily propelled by strong corporate earnings and a significant shift in the energy market dynamics, specifically the reversal of the energy-supply shock that had characterized the first quarter. These factors collectively contributed to a favorable market environment that benefited equity investments.
The Nomura Core Equity Fund's outperformance during this period was predominantly driven by its strategic positioning. Superior stock selection within the information technology sector played a crucial role. Additionally, the fund's underweight allocation in the energy sector, which had been a detractor in the preceding quarter due to a sharp rise in energy prices, proved advantageous in the second quarter as energy market conditions normalized. This highlights the dynamic nature of market factors and the importance of adaptable investment strategies.
Despite the strong market rally, the fund's cash holdings presented a minor drag on its overall performance. As the benchmark index advanced significantly, the liquidity maintained in cash did not participate in the market's upward momentum, consequently impacting relative returns. Nevertheless, the strategic decisions in equity investments largely overshadowed this effect, leading to the fund's overall outperformance.
The second quarter of 2026 was a period of strong market recovery, with the S&P 500 showing impressive gains. The Nomura Core Equity Fund capitalized on this environment through astute investment choices and strategic sector positioning, particularly in technology, leading to results that surpassed the benchmark index.
