Hotchkis & Wiley Mid-Cap Fund Reports 4.74% Q2 Return

Hotchkis & Wiley Capital Management LLC reported a 4.74% return for its Mid-Cap Value Fund in the second quarter of 2026, trailing the Russell Midcap Value Index's 13.4% return. The investment firm attributed the performance gap to significant drags in the technology and energy sectors, while noting that the broader market was driven by semiconductor and AI stocks despite a hawkish Federal Reserve and inflation.

Positive results were seen in healthcare and hospitality. Humana Inc. performed strongly after the United States government agreed to increase 2027 payments for private Medicare Advantage plans. The firm characterized Humana as undervalued, suggesting that annual business repricing would recover margins affected by enrollee utilization. Marriott Vacations Worldwide Corporation also outperformed expectations, supported by strong free cash flow and an increased contract-sales outlook.

Conversely, Kosmos Energy Ltd. detracted from the fund's performance. The stock declined following crude oil price weakness triggered by the reopening of the Strait of Hormuz. Despite the quarterly dip, Hotchkis & Wiley maintains its investment thesis for the oil company, citing its offshore operating expertise and high returns on investment.