Aristotle Capital Boston, LLC, through its "Small Cap Equity Fund," recently detailed its fourth-quarter 2025 activities in an investor letter. The period saw modest gains in U.S. small-cap equities, buoyed by a robust macroeconomic environment, attractive valuations, and a broadening market focus. While the fund's security selections positively contributed to its overall performance, allocation strategies presented some challenges, leading to a slight underperformance compared to the Russell 2000 Index.
A notable aspect of the fund's report was its decision to divest from Nu Skin Enterprises, Inc. (NUS), a prominent company in the beauty and wellness sector. Headquartered in Provo, Utah, Nu Skin has experienced fluctuating stock performance, including a significant one-month decline of 27.56% leading up to February 13, 2026, despite an annual gain of 10.58% over the preceding twelve months. The fund cited concerns over Nu Skin's fundamental performance and the uncertain outlook of its ongoing strategic transformation as primary reasons for liquidating its position.
This strategic move by Aristotle Capital reflects a cautious approach towards companies undergoing significant shifts, especially when fundamental performance indicators raise red flags. It underscores the importance for investors to continuously assess a company's financial health and strategic direction to align with their investment objectives, ensuring portfolios are optimized for both growth potential and risk management.