Stand: 28.03.2024
Performance Highlights Small cap stocks, as measured by the Russell 2000 Index, appreciated +5.62% in February. The Neuberger Berman US Small Cap Fund (the “Fund) also rose during the period, underperforming the Russell 2000 Index (Total Return, Net of Tax, USD). Outlook Over the past two years, the Fed has been squarely focused on restoring price stability with the goal of suppressing demand to bring inflation under control. Recent Fed commentary suggests the tightening cycle has peaked, while also indicating that rates will remain elevated. Overall economic activity remains relatively stable, with some indicators suggesting an economic cooling. Considering this backdrop, equity markets have remained highly sensitive to Fed commentary, inflation-related data points and economic indicators. Taking a step back, markets have potentially entered a new phase. Specifically, the cost of capital has risen materially, financing has become more difficult, and risk aversion has returned. That said, recent optimism around the potential for rate cuts has caused an easing in financial conditions and driven more risk taking. The risk of recession both in the U.S. and globally remains a possibility, but by no means is a certainty. With the macro trajectory clouded, we are striving to maintain balance in the portfolio. We remain confident that our high-quality portfolio of businesses with attractive financial characteristics, differentiated and durable business models, and sustainable earnings growth is well positioned to weather these uncertain times and deliver above-average risk-adjusted returns.