Core Insights - Wasatch Global Investors' "Small Cap Growth Strategy" faced challenges in Q4 2025, with small-cap equities underperforming broader market indices due to investor caution and preference for larger stocks [1] - The Russell 2000® Growth Index gained 1.22% in Q4 2025, while Wasatch's strategy ended the quarter in negative territory, driven by stock-specific factors rather than macroeconomic issues [1] - The Russell 2000 Growth Index advanced 13.01% for the 2025 calendar year, contrasting with the strategy's loss, indicating earnings volatility and valuation compression despite improving fundamentals [1] Company Insights - Shift4 Payments, Inc. (NYSE:FOUR) was highlighted as a significant detractor from the strategy's performance in Q4 2025, with a one-month return of -13.86% [2][3] - The stock traded between $54.90 and $57.29 over the last 52 weeks, closing at approximately $54.57 on February 13, 2026, with a market capitalization of about $4.923 billion [2] - Despite concerns regarding consumer spending and industry competition, the fundamentals of Shift4 Payments remain solid, and the company is viewed as having long-term growth potential [3]

Group 1 - The U.S. small-cap equities experienced modest gains in Q4 2025, supported by attractive valuations, earnings recovery, and a shift from mega-cap stocks [1] - The Aristotle Small Cap Equity Fund (Class I-2) returned 1.96% in Q4 2025, underperforming the Russell 2000 Index which had a total return of 2.19% [1] - Security selection positively impacted overall performance, while allocation effects had a negative impact [1] Group 2 - Nu Skin Enterprises, Inc. (NYSE:NUS) is a wellness and beauty care company with a market capitalization of $407.55 million [2] - The stock of Nu Skin Enterprises, Inc. closed at $8.36 per share on February 13, 2026, with a one-month return of -27.56% and a twelve-month increase of 10.58% [2] - The position in Nu Skin Enterprises, Inc. was liquidated due to deteriorating fundamental performance and an uncertain outlook amid a strategic transformation [3] Group 3 - Nu Skin Enterprises, Inc. is not among the 30 most popular stocks among hedge funds, with 20 hedge fund portfolios holding the stock at the end of Q3, unchanged from the previous quarter [3] - The company is acknowledged for its potential, but certain AI stocks are considered to offer greater upside potential with less downside risk [3]

Core Viewpoint - iShares Currency Hedged MSCI EAFE Small-Cap ETF (HSCZ) offers targeted exposure to developed small-cap equities outside the U.S. while mitigating currency fluctuation impacts against the U.S. dollar [1] Group 1: Investment Proposition - The fund aims to replicate a diversified small-cap universe and employs a forward-hedging strategy to ensure equity fundamentals dominate returns rather than foreign exchange translation [1] - The investment opportunity focuses on domestically oriented businesses that are more sensitive to local demand, policy changes, and regional supply chains, leading to greater dispersion compared to large-cap equities [1] - Hedging can reduce volatility from currency fluctuations but may introduce implementation costs and basis risk related to interest-rate differentials [1] Group 2: Use Cases and Suitable Investors - HSCZ can serve as a size tilt within international allocations, act as a satellite for factor completion when portfolios are underweight in small caps, and provide a tactical overlay when concerns about a stronger dollar arise [1] - Suitable investors include those seeking clearer attribution to local equity drivers and outcome-oriented strategies that prioritize returns in home currency [1] Group 3: Market Conditions and Risks - Supportive market conditions for HSCZ often include periods of dollar strength or phases when domestic catalysts drive small-cap earnings, while it may be less advantageous during foreign currency appreciation [1] - Key fund-specific risks involve hedge implementation and roll costs, which can increase tracking differences, along with the higher volatility and liquidity risks typically associated with small-cap equities [1]