The Thrivent Small Cap Growth Fund experienced underperformance during the fourth quarter of 2025, lagging behind the Russell 2000 Growth Index. This result was primarily due to the fund's stock-picking decisions and its reduced exposure to the biotechnology segment within the healthcare sector. Additionally, unsatisfactory selections in consumer staples contributed to the overall drag on performance. Over the entire 12-month period ending December 31, 2025, the Fund similarly trailed the Russell 2000 Growth Index.
Amidst ongoing economic uncertainties, the Thrivent Small Cap Growth Fund continues its investment approach by targeting enterprises characterized by strong growth potential. The management team, comprising seasoned professionals like Michael Hubbard, Patrick Farley, and Nabil Elsheshai, is committed to identifying companies with significant opportunities for increasing revenue, profitability, and free cash flow. This strategy involves dynamic adjustments to portfolio positions as underlying investment theses evolve, ensuring alignment with market conditions and emerging growth trends.
The investment philosophy of the Thrivent Small Cap Growth Fund emphasizes a disciplined pursuit of high-quality small-cap companies. The fund’s strategic focus remains on seeking out innovative businesses that demonstrate sustainable competitive advantages and robust financial health. By concentrating on these attributes, the fund aims to deliver long-term capital appreciation for its investors, adapting to market shifts while adhering to its core principles of identifying compelling growth opportunities.
Investing in growth-oriented companies, particularly within the small-cap segment, requires diligent research and a forward-looking perspective. While market fluctuations and specific sector dynamics can influence short-term performance, a sustained focus on fundamental strengths and strategic adaptation can pave the way for resilient and positive investment outcomes over time.