Webinar Replay - Growth on the Road Less Traveled: The Case for Small Cap Stocks

Amy Jeang: Good morning everyone. My name is Amy Jeang, and I am the Institutional Services Consultant here at Osterweis. I'd like to welcome all of you to our webinar, Growth on the Road Less Traveled: The Case for Small Cap Stocks. Thank you all for attending this morning. Today's session will feature Matt Unger and Bryan Wong, who are both portfolio managers for the Osterweis Opportunity Fund. Matt did a similar presentation for a group of advisors earlier this year, and we decided that it would make a great webinar given how much discussion there is around where to find growth in today's marketplace. With that, I will turn over to Bryan to kick things off.

Bryan Wong: Thanks, Amy. As Amy said, today, we're going to take a deep dive into small cap growth, what is it, how it works, and why we think it's an underappreciated asset class that belongs in most portfolios. But first, let's look at the results of today's webinar's survey, and you can see it's actually a pretty diversified list of responses here. It looks like many of you guys are interested across a range of different perspectives, so we'll be sure to address your questions and how you're thinking about the current market.

Let me start with the first slide and the core idea behind small cap investing. Early-stage companies are often where long-term growth begins. Many of the most successful large cap franchises, like Amazon and NVIDIA, started as small under-followed innovators. Small caps sit at the intersection of innovation, market disruption, and secular growth. One of the biggest advantages in small caps is their exposure to secular trends. The largest and fastest growing sectors, particularly Health Care and Information Technology, are undergoing constant reinvention. Breakthrough therapies, digital transformation, AI automation, and cloud architecture all begin with smaller, more agile companies. These companies can grow independent of the economic cycle because their growth is driven by the adoption curve of a superior product, not by GDP.

We are well positioned to take advantage of such trends, given our location in San Francisco. Unlike many large caps, tied to macro conditions, small cap innovators often win simply by coming up with new products and solutions, which take share from legacy incumbents. When a company solves a real customer problem with superior product, revenue growth tends to be durable. The unique aspect of U.S. small caps and the combination of public market transparency and liquidity with something that looks like venture capital style growth potential, you get audited financials, daily pricing, and full regulatory oversight, but you're also investing in companies early in the growth curve before the bulk of value is realized. That creates an attractive asymmetry.

S-curve in adoption, which highlights where we aim to invest, during the entry period when fundamentals are improving, but before the market broadly recognizes the inflection. By the time a company enters the exit period, typically the growth is better understood and the multiple has expanded. Our job is to identify that early-to-middle section of the S-curve. One of the biggest advantages for active managers in small caps is the simple fact that the space is less efficient. There are far fewer sell-side analysts following these companies. Compared to 30 analysts following the average large cap company, there are four or fewer analysts covering the average small cap company. Less coverage means more mispricing and more opportunity to have differentiated views.

Small caps historically contain a deeper pool of high-growth profitable companies than many investors expect. They are often companies with strong founder leadership, specialized niches, and defensible product advantages. With less coverage and more idiosyncratic business models, performance disperses more widely than in large caps. That means the winners really matter, and the gap between high-quality management teams and weaker operators is much wider. For active managers, that dispersion is exactly what creates the potential for alpha. Expanding on this, again, speaking to a slide that... As a spread between the top 50 and bottom 50 performers in both the Russell 2000 and the S&P 500, there's an incredible dispersion in small caps versus large caps. In certain years, the difference between the top winners and the laggards in the Russell 2000 can exceed several hundred percentage points. This dispersion is critically important. For small caps, stock selection really matters. A well-constructed portfolio can avoid the weakest names and concentrate on the best companies with strong growth and competitive advantage. 

Across multiple years, a higher percentage of small cap managers have been able to outperform their benchmarks relative to large cap managers. This reinforces the idea that small caps are a richer environment for skilled active management. The inefficiencies, the broader dispersion, and the under-researched nature of the space all contribute to a higher batting average for active strategies. And this is exactly where our approach fits, combining deep fundamental research with a disciplined valuation framework to capture these early stage growth opportunities. Keep these themes in mind, secular growth, structural inefficiency, and wide dispersion. They're the backbone of why small caps can play such an important role in client portfolios, and why skilled stock selection can add real value over time. I'll turn it over to my colleague, Matt.

Matt Unger: Thanks, Bryan. So 2025 was, for lack of a better word, strange in the small cap market. It really started at the end of '24 with the reelection of President Trump. As we all know, he has a very authoritarian way about him and that creates a lot of uncertainty, and investors just seem to allocate capital based on his perceived policy initiatives. So the market was very thematic, and what happens in thematic markets is... Retail really loves thematic markets, because you don't have to really focus on valuation, you don't have to focus on business quality, and through... their influence over the market has really been magnified over the last five years through the democratization of options trading through Robinhood, and as a result, they can have significant impacts on certain stocks or pockets of the market.

So that's what we really thought played out in 2025, specifically in areas such as drone, space, eVTOLs, which are the flying taxis, quantum computing, more speculative areas of the data center, as well as biotech, especially in the second half of the year. Now, this was problematic because these are areas that were really not owned by active managers, so it created these performance issues, and then some active managers decided to jump on the bandwagon and this exacerbated the issue. So that's what happened to active management in 2025.

The biggest discrepancy was actually in health care. So biotech returned 50% last year, the rest of health care return was essentially flat. That's never really happened before, so that was really historic. Usually, there's a pretty good correlation between those two parts of health care. And what really happened there is Trump was doing a lot of saber-rattling over the NIH and shrinking the Medicaid population and the expiration of ACA subsidies, and money just flowed out of health care, and it flowed out of the names that were owned and biotech wasn't really owned, it was often actually shorted by a lot of hedge funds, so it created this big whipsaw repositioning effect that really fed on itself throughout the year.

So really historic discrepancy within health care, but it's created a lot of opportunities going forward. So specifically in medical devices, this is a group that's trading at valuations not seen since 2014. It's really the only sector in the market like that. Well, actually, software now, because of all the AI disruption risk, but medical devices really has none of that risk at all. And a lot of the bear case around it is the fact that health care utilization has peaked. But a lot of these companies are taking share in existing markets, creating their own markets, and they're mostly exposed to the Medicare population, so we don't really think about much of an impact at all. So that's an example of an area that we think is really attractive going forward.

So this is a table that really exemplifies the performance issues. So like I mentioned earlier, thematic market, so business quality, as well as valuation, weren't really considered. So you can see, from the Liberation Day lows, April 8th on the left side here, earners returned about 36%, non-earners returned about 80%, so significant variation there. And then, on the year-to-date, or 2025, the full year, again, non-earners returning much more than the earners.

So as far as 2026, we expect a return to fundamentals. We think the market's going to be more grounded, more focused on business quality and valuation. Typically, when we get into these thematic markets, they last about a year, and that's what was really played out this time. Q1 to-date's been pretty normal. The first two weeks of the year, they tried to go back to some of these thematic trades, but that's really fizzled out. So as a result, we think it's going to be a good year for active management this year and next year, but somewhat analogous to 2022, when we had the thematic markets of interest rates and inflation, and then active did pretty well in '23 and '24. So that's our outlook going forward.

As far as trends for 2026, AI obviously front and center, has been for numerous years. We have a lot of names in the portfolio exposed to this, and I'm sure we'll get into that in Q&A and Bryan can talk about a lot of those. But one that's particularly interesting is Modine Manufacturing. So they have a rich history in cooling systems. They actually made the radiator for the Model T car, and more recently, over the last couple of years, they've got more into the data center, so they do the chillers and the air handling units that are used in the data center.

And so, two years ago, they only had one customer. Today, they have five. And the reason for that is their products are designed exactly for the data center, where a lot of the other customers aren't. So they're able to gain a lot of new hyperscaler customers, as well as benefit from the overall growth of the data center. And they're expecting sales to go from one billion this year to two and a half billion in two years, so really extreme growth. And they've actually recently spun off their legacy business, so now it's just a pure play on the data center and AI.

A second theme that's lesser known but equally as compelling, is liquid biopsy. And this is the concept of deriving the genomic profile of a tumor using blood rather than tissue. There's obvious convenience advantages to that. And the whole idea is if you have the genomic profile, then you can go ahead and pair it with a specific type of drug. You can also, if you're in remission, monitor the cancer to see if it's coming back. And more recently, companies have developed cancer screening tests. So our favorite way to play this theme is through Guardant Health, they're really a pioneer in this space. And about a year and a half ago, they launched a cancer screening, a blood-based test called Shield. And I'm sure everyone's familiar with colonoscopies and Cologuard, which is a stool-based test. So obviously, having a blood-based test is a much more elegant solution, so we're excited about that. And then, we also, in Q4, invested in a company called Twist Biosciences, which helps a lot of these companies lower their costs so their businesses can be more economic. It does some other things, but that's how it plays into this theme.

Robotics is another interesting theme that's been going on for years. What's new there is just the emergence of humanoids and the excitement around that. Obviously, very small today. But in ten years, that could be huge. So in Q4, we bought a company called Novanta, and they make a lot of components that go into really high-tech OEM equipment. They make the sensors that go into humanoids that help them determine how much force to exert when they're picking up objects. If you've ever heard Elon talk about Optimus, he says that's one of the most difficult things to do. So we think they're in a valuable spot, and they continue to expand their presence in that market. It's very small for them today. But in five years, it could be a real needle mover from a gross standpoint.

And then, last but not least, drones. Obviously, it's been a strong theme over the last couple of years, especially in military operations and all the success in the Ukraine-Russia war. And our favorite way to play this theme is through a company called Amprius Technologies. They make a high-end lithium battery that goes into drones. It essentially improves the battery density, allows them to fly twice as long on a single charge. Obviously, for military operation, that's pretty important. It's just important in general. So it allows us to play this market from more of a Switzerland perspective versus having to pick what drone's going to win this contract or that contract, so that's how we choose to play this theme.

And this brings us to our second polling question of the day. So we're going to ask all of you, the audience, what trends you're most excited about for 2026. Again, we have AI, artificial intelligence, liquid biopsy, robotics, and drones, in no particular order. Although, I would say that drones are probably our least favorite theme out of the four of them, just because it is more determined by government policy and budgets and whatnot, and it's hard to add a lot of capacity for a lot of these companies, so that can have a little bit more fits and starts. Okay. So it looks like liquid biopsy is the favorite theme. A little surprised, because that's definitely a lesser known one. So good, it means we have a very educated health care audience here, so that's great to see. Then AI, no surprise, a lot of people are aware of that. And no one likes drones, so pretty close to us.

All right. So let's move to the next slide here and talk a little bit about our product specifically. So our philosophy is really to focus on sustainable revenue growth. So we want to be invested in companies that can grow for years, so growth isn't temporary and fleeting, it's very sustainable. We want to invest in companies with good unit economics, and by that, we mean good incremental margins on growth, driven by a strong value proposition, efficient selling methods, good management. And we want to do all this under a backdrop of an absolute valuation criteria, so we want to be able to get 100% upside over five years using no more than a 30 P/E. So if we think, in five years, the company can do $5 in earnings, think it's deserving of a 30 P/E, so it'd be a $150 price target. So today, we want to be able to buy that stock for $75 or less.

And the reason we do that is because when the market goes up and it gets really frothy, we're reducing positions, reducing risk. So when you have the inevitable correction, we tend to protect on the downside better. So our downside capture percentage is about 85%, which is something we're very proud of. So it is a bit of a Catch 22. How are you investing in these exciting companies, but also have those absolute valuation criteria? So on the next slide here, we'll walk through that.

So we try to exploit inefficiencies in the market, and small cap, there are more inefficiencies, and there's four broad categories to that. One is business inflection. So these are companies that are doing really well, the adoption curve's accelerating, and when you look out a few years, there's just significant upside to consensus expectations, so they're a lot cheaper than they appear on the surface. NVIDIA, who just reported a crazy, really incredible quarter last night, is a great example of this, just over the last couple of years, how exponential that growth has been. I'd say a good part of the companies in the portfolio go in this category.

The next one is growth durability. So these are companies that are good growth businesses, but they have some sort of cyclical component to their business. And when that cyclical component is negative, the stocks can sell off, but it provides a good entry point. If you have duration, think of a restaurant concept, it's great unit economics, good store opportunity, but we go into recessions, same-store sales go negative. We actually just invested in Cava in Q4. Cava is a great example of this, restaurant. The whole industry had a tough time last year, provided a good entry point, we think it's a very good concept, and they just had a great quarter yesterday with accelerating same-store sales, so that was great.

The third category is temporary price dislocations, so this includes changing business models. We've seen this with software a lot over the last decade, as they go from the on-premise license model to the recurring SaaS model. When you make that transition, growth can optically slow. But when you get on the other side of that, you have a much better compounding business. My colleague, Bryan, has done a great job picking these opportunities over the last decade. And then, changing business mix too. There's a lot of situations where a company will have a legacy business, not all that interesting, but there's emerging business beneath the surface. Eventually, it begins to move the needle, it's better returns. So that company I talked about earlier on the theme slide, Modine, great example of this as well.

And then, the last category is misclassification. So this can include misunderstood secular growth. So maybe there's an area of the market that's not thought of as a growth area. For example, manufactured housing, that was a very sleepy market, but it's re-emerged just due to the lack of affordable housing, entry-level housing in this country. So CAVCO Industry was a name we were invested in for many years. And then, there's other names that are just misclassified in the index and they can trade with... For example, we own this company, Per Service, it's industrial business, but it's in the real estate, so it'll often trade with the REITs, so that can provide opportunity when for example interest rates go up. There's other situations, but these are the broad categories that we look to, to be able to buy those exciting businesses, but still maintain our valuation discipline.

As far as the stages of growth of stocks in the portfolio, there's really three that we look for. So first is undiscovered, misunderstood. So these are companies that are newer to the market, they might be a recent IPO, might not have a lot of sell-side coverage. They're typically on the front end of their adoption curve, or they might just be really sleepy like the manufactured homes, a market I just described. But they typically, for the most part, have accelerating growth and really exciting growth profiles. And then, the breakthrough companies, these are companies that are in the meaty part of their adoption curve, they're really doing well, really strong revenue growth, and then they're finally getting profitable, their economics are beginning to show. And then, the proven stocks, these are the stocks that are more mature, they've become really standard in their industry, more mature margin profiles, more of a GARPy-type name but depending on the market environment, it can oscillate around.

Just to sum up, small cap growth can be a powerful engine for returns. As Bryan talked about, exciting area. You can really make direct bets on idiosyncratic product cycles. It tends to be an area where there's a lot of dispersion and there can be really good outperformance. That's a great area for active management. 2025, very challenging year for active management, but we think that sets up well for '26 and '27. And small cap should be a part of any portfolio, especially when it goes through periods like it has over the last ten years, it's really underperformed large cap. Everyone knows about the Magnificent-7 and the effect that's had on the indexes, and at some point, those companies, the stocks are going to start to perform poor and people are going to look for other opportunities, and I think that's going to help small caps. You should really be involved in active management in small caps, as Bryan talked about earlier, more active managers tend to outperform over time.

So this brings us to the end of the presentation, but we do have a final polling question. We're curious of the audience, so all of you, what percent of your portfolio is allocated to small cap growth? We hope it's zero, so then you can allocate going forward. But I'm guessing it's probably 5% to 10%, if I was to guess, but I'm curious to see what the answer is. Okay, okay, good guess on my part. So thanks everyone for listening, and we're happy to take questions. Bryan and I love talking about this stuff, so fire away.

Amy Jeang: So we'll now begin our Q&A. As noted on the slide, please ask a question through the Q&A window or raise your hand to ask a question over computer audio or by phone. As we wait for questions to come in, one of the questions that I have is can you talk about how the IPO pipeline has changed over the years and how that has impacted your strategy?

Bryan Wong: Yeah, I can start with that one. I mean, obviously, it's a topic that's been, I think, attracting some attention, and I think there's some truth to it, but there's also some nuance. It's definitely, I think, been an issue in technology, less so, I think, in other sectors. So we've actually recently invested in two IPOs in the Health Care and Industrial space, so it shows that that market is still alive and doing quite well in certain industries. But there has been a trend of certain private companies in technology, staying private for longer, and obviously that's been led by companies like OpenAI and Anthropic. That's never really been our target market cap, if you will, where we've been focusing on smaller cap companies that are under-followed and undiscovered, and we continue to find a lot of compelling opportunities in technology. Although, it does look a bit different than in years past.

So for example, five-plus years ago, I would say we did invest in a lot of recently public software and SaaS companies. There was an explosion of that asset class. Today, you see far fewer of those IPOs. But we've really been focused on AI hardware and semiconductor companies, and in many cases, these are companies in memory and networking and compute that are growing at multiples of their large cap peers, even NVIDIA. So for example, two companies we've held that we really like are SiTime and Lattice Semiconductor, and SiTime's data center business recently grew at 160%, while Lattice's server revenue was up 85%. So we're still finding a lot of interesting opportunities, although it looks a little bit different than in years past.

And then, finally, I would say some of these software companies are now beginning to look very attractive as well. As we all know, software has been a strong underperformer, and we think that's an interesting opportunity that sets us up here as well. I guess the final point I would make is one of the statistics we really like to look for is this concept of migration. There was an article in The Financial Times recently about this, whereby small companies grow into mid and large cap ones, and that's been really a key driver of the long-term outperformance of small stocks. And the good news is that's occurring at roughly the same frequency, even in recent years versus all the way back to 1926. So that's really the key driver of what we look for is the dynamic of these small companies growing into mid- and large-sized companies, and that's very much intact.

Matt Unger: Yeah. Just to add to that, that dynamic is much more a tech dynamic than it is for the other sectors in the market. So I'd say Health Care, Industrial, so the two sectors that I spend time on. They're starting to stay private longer.

Amy Jeang: Bryan, you mentioned about AI, and I wanted to go back to that. Obviously, we've seen, in the last few years, just a lot of companies racing to build that picks and shovel that makes AI possible. Where do you see the sectors that will be the biggest beneficiaries in this AI landscape going forward?

Bryan Wong: Yeah. That's a real topical question, and I think you're right, that thus far, it's really been the AI CapEx winners. Obviously, the hyperscalers, if you include Oracle with Amazon and Meta and Google and Microsoft and so forth, I think the CapEx this year is approaching 700 billion, which is something like 80% year-over-year growth. And so, we've been able to invest in a lot of essentially the CapEx dollars that are flowing into small cap companies. So today, it's really flowing into compute, networking, memory, power, and it's not just technology companies, it's industrial companies and energy companies and so forth. And so, we think that theme is intact and still doing quite well.

Two of the things we think about as we look at that universe is we really like to look at companies that have some level of diversification and we look for companies with strong competitive advantage. So two examples are MACOM and SiTime. I talked about MACOM, I think, briefly. But a third of their business is data center, but one of the things we like about it from a diversification standpoint is two-thirds of the business is industrial and defense. So they have key technology with radar and anti-drone defense, as well as an expanding LEO business. Certainly, the LEO (low-Earth orbit) business has been getting a lot of attention with SpaceX.

And then, SiTime, really what it does is it has a strong competitive advantage in the sense that it makes silicon-based timing clocks, and these are much more rugged and precise than old-school quartz clocks. And so, the problem in the data center is there's thousands of these chips, they have to work in perfect synchronization, and if the clocks are off by even a billionth of a second, the whole system can crash. And so, this is just a much more rugged and precise technology. So you've got a strong competitive advantage there, and diversification, because they're expanding in the data center, but they're also expanding with the Apple iPhone, which is also adopting this technology. And so, SiTime's chips were in the Air model of the iPhone last year, but we expect that to continue to expand this year as well.

And then, with MACOM, again, the diversification of the data center, but also industrial defense, and then a really strong competitive advantage for MACOM is they're a trusted U.S. foundry, per the DoD. And so, we all know that a lot of the semiconductor manufacturing is in Taiwan today, and MACOM has domestic fabs. There's probably less than ten to 15 trusted U.S. foundries that have domestic production, and MACOM is one of those. So looking for companies with strong competitive advantage, diversification, and then eventually, where we like and think that this will all go is to the enablers of AI as well, which tends to be software. But the debate today is which of these legacy software incumbents are going to be successful in this new world of AI.

And so, you have to be really careful to pick the winners. One name we like is Twilio. So Twilio provides the infrastructure that essentially allows these AI models to make phone calls, send texts, and interact via voice. And so, we really like their expanding voice AI business. So their AI voice is a relatively small percentage of revenue today, but that's growing over 60% and accelerating. And many of the leading voice AI startups today, such as Sierra, which is led by Bret Taylor, a former senior executive at Meta and Salesforce, also chair of OpenAI, adopts Twilio as essentially the plumbing of their voice AI agents.

And we think this is a market that's going to explode from less than 10% voice AI penetration today to over 50% over the next five years. And so, if you think about calling into a customer service agent, as we all have, and going through the, "Press one if you want to speak to so-and-so," and forth, that's all going to change dramatically and you're going to be able to instantly speak with a voice AI agent. And so, this is already gaining a lot of steam, and we think will continue to do.

So that gives you some examples. I know it's a long-winded answer. But we're investing in infrastructure today, but we also want to invest in the key software enablers that we think participate in the AI adoption going forward.

Amy Jeang: Thank you. Matt, you covering Health Care and Industrials, do you see the Health Care sector and Industrials also being a beneficiary of AI long-term?

Matt Unger: Well, Industrials today is benefiting a lot, somewhat analogous to the shale revolution, which created this big boom in the industrial end markets, and that's what we're seeing in the data center. We have several names exposed to this, Modine, which I talked about earlier, big beneficiary of this trend. Also, SPX Technologies, which also does a lot of HVAC systems that go in the data center, although that's more of a diversified industrial, so it's about 15% of their business, but it's growing 50%, so very strong. And then, CECO Environmental, so this is a sleepier name, based in Texas, and they provide equipment that gets rid of contaminants in manufacturing plants, power generation facilities. So they make these turbine DeNOx systems that gets rid of the nitrous oxide that's used in natural gas power generation, and then wastewater treatment products as well. So they're benefiting from a lot of these various trends. But specific to the data center, it's really around power generation. So Industrial is definitely here and now.

Health Care has been a bit slower to adopt. That's always really the case. It's a very regulated industry and things have to go through the FDA and whatnot. So companies are utilizing AI to become more efficient, help with managing their sales force, internal operations, try to cut costs. But as far as revenue drivers, not a lot today. So that's something that we're continuing to look for going forward. But right now, with everything that's happening in software, AI is such a threat to a lot of businesses, in Health Care, it's kind of nice to be in areas where there's physical and tangible products and they can't be disrupted by next week's new Claude announcement. So at the moment, more Industrials. But I'm sure down the line, there'll be more applications to Health Care as well.

Amy Jeang: Now, shifting gears to talk about just more of the small cap universe in general, recent research show that roughly 40% of the companies in the Russell 2000 Index are unprofitable, meaning they're reporting negative 12-month earnings as of late 2025. This level of profitability is near its historical highs. This raises the question of whether this makes small cap investments more volatile and more sensitive to economic downturns, and what are your thoughts and how has it affected your way of sourcing for investment ideas as you're combing through the small cap universe?

Matt Unger: That's a great question. So that's definitely on an earnings basis. I'd say on an adjusted EBITDA basis, probably much more considered profitable. But we see it as an opportunity, because there's a lot of businesses that are seen as, since they're unprofitable, they must be low quality. But we really like to look at the incremental margins on a business, so for every incremental dollar in sales, how much is dropping to the bottom line? So there can be a lot of businesses that are maybe negative 10% EBITDA margins, but the incremental EBITDA margins are 35%. So it's really just a scale dynamic. So that's how we can find quality, where if you're just looking at it high-level or not really looking at the unit economics, you might not see that. So we think it's an opportunity, just because a lot of companies can be bucketed in that unprofitable business and seen as low quality when they're really not.

Amy Jeang: Thank you. You mentioned earlier, or you went through one of the slides, about the different stages of growth in the portfolio and how that helps diversification, you broke it down between undiscovered, emerging, breakthrough, and then proven. Where are you guys seeing opportunities now, if you had to bucket it down within those three categories?

Matt Unger: Yeah. It's really interesting, because the market right now, there's so much dispersion between sectors. For example, Industrials is trading at the highest valuations ever. And then, as I mentioned earlier, talking about Health Care, areas like medical devices trading at the lowest ever, software is trading back at 2014 levels. So there's a lot of opportunities. Obviously, in Industrials, the valuations are so elevated, there's not a lot of opportunities in breakthrough and proven. We have to go more to the undiscovered, misunderstood, find things that are a little bit less popular, under the radar, might not have sell-side coverage, recent IPO, things like that. While in Health Care, honestly, you kind of feel like a kid in a candy store. There's just a lot of breakthrough and proven names that are really attractive. So in general, when a sector's out of favor, we look for the breakthrough and proven opportunities, and when it's doing really well, we look for the undiscovered and misunderstood opportunities.

Bryan Wong: I would agree, by the way, same answer. Well said.

Amy Jeang: Okay. And my last question is where I'm going to go more macro, but how would you describe the impact the tariffs have had on the small cap market in general?

Matt Unger: It had a huge influence last year. A lot of companies didn't really do... Well, first of all, a lot of small cap companies don't do as much business overseas. But the ones that do, they're more like industrial businesses or health care businesses or whatnot, so it's more tangible. I guess the benefit of large caps is that a lot of the really global businesses, a lot of them are in tech or something like that, so they weren't as susceptible to tariffs. But in small caps, more of them were.

So it hasn't been nearly as big of an issue as we thought. And obviously, the tariff levels, in a lot of instances, have come down. So yeah, at this point, it's really more of a non-issue. But it was pretty manageable exposure, until, for example, China, when tariffs were 20%, not that big of a deal, a company has 5% of their business there, but when it goes to 150%, it's all of a sudden a pretty big deal. So it created a lot of confusion, and in some situations, we did end up selling out of stuff and rotating to other stuff that we liked just as much and didn't have as much exposure where we could. But yeah, the market's kind of digested all that. A lot of companies have done a very good job circumventing all the tariffs and issues. So it hasn't been nearly as big of an issue as we thought. And obviously, the tariff levels, in a lot of instances, have come down. So yeah, at this point, it's really more of a non-issue.

Amy Jeang: Thank you, Matt and Bryan. This is the end of our Q&A. Thank you again for joining us, and please let us know if you have any follow-up questions.