HFGO lagged its benchmark in Q1 2026 as growth stocks trailed value peers.
Growth stocks significantly underperformed their value counterparts over the quarter, as investors rotated toward cyclicals and more defensive areas of the market amid anxiety about the disruptive influence of AI. Sector allocation, a result of the portfolio's bottom-up stock-selection process, was the primary driver of relative underperformance. Top relative detractors from performance during the quarter included not owning Costco, and overweight positions in KKR and DoorDash. The ETF continues to focus on companies for which the portfolio managers have a more constructive view on future growth and attractive risk/rewards. US equities ended lower in a volatile quarter as shifting market sentiment between fears of a prolonged war in Iran and hopes for a quick resolution spurred considerable uncertainty about the path of