Summary

• For 1Q26, Nomura Large Cap Growth Fund delivered negative absolute returns and underperformed its benchmark, the Russell 1000 Growth Index.
• AI disruption particularly impacted large-cap growth stocks, which include many software and business service companies now considered vulnerable to disruption.
• The Fund exited Salesforce during the quarter, believing Salesforce faced the greatest near-term risk among the Fund's software holdings.
• The Fund added Edwards Lifesciences Corp. as a new holding, whose best-in-class heart valve products benefit from multiple long-term structural growth drivers.
• The market appears fragile and myopic, likely reflecting over-concentration in a narrow subset of companies driven by human behavior and the dominance of market-cap-weighted indices.

Market review

Artificial intelligence disruption and the conflict with Iran dominated financial markets in 1Q26. The Russell 1000 Growth® Index fell nearly 10% amid these dual threats, making it the weakest-performing major equity category.

AI disruption particularly

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