Summary

• The Virtus KAR Mid Cap Core Fund returned -3.88% (Class I) in the quarter, underperforming the Russell Midcap® Index, which returned 1.29%.
• Monolithic Power Systems reported broad-based growth across each of its end markets and had strong growth in AI server applications as prior design wins translated into strong revenue growth.
• Teledyne Technologies' defense, space, and energy segments have grown, while prudent mergers and acquisitions activity and frugal cost management have led to improved margins.
• Investment bank Houlihan Lokey's shares declined due to a broader decline in investment banking stocks, caused by market concerns around AI disruption affecting mergers and acquisitions markets.
• The investment team sold Bentley Systems and used the proceeds to add to existing positions with long-term fundamentals that are more compelling given their valuation and growth opportunities.

Market Summary

During the first quarter of 2026, market leadership shifted as small-cap stocks outperformed large caps amid a rotation away from crowded trades by investors. The Russell 2000 (IWM)® small-cap benchmark surpassed the

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