Small-Cap Macro Commentary | Q3 2026 — Adam Peck, Co-Founder & Chief Investment Officer Ten Years of Responsible Small-Cap Investing This past spring marked a decade since Riverwater opened its doors, and we were delighted to celebrate the milestone with our valued clients and friends a few weeks ago. We have a lot to be…
What Survives: Ten Years of the Sustainable Value Strategy In the second quarter of 2000, the eVestment database held 1,234 institutional U.S. equity products. By the first quarter of 2025, only a third of them were still reporting returns. Small-cap value had the best survival rate of any style, at 50%.1 Those figures come from…
Laying the Tracks Capital, Infrastructure, and the Small Cap Opportunity Inside the AI Buildout On May 10th 1869, the Central Pacific Railroad and the Union Pacific Railroad reached Promontory Summit, UT, completing the first transcontinental railroad at a cost of roughly $109 million, more than $2.6 billion today.1 Yet within three years, the railroad’s own…
Q1 2026 Small Cap Macro Update: The Fog of Excursion Thirty Smelters to Four In 1980, the United States operated roughly thirty primary aluminum smelters. Today there are four. The country that once produced nearly a third of the world’s aluminum now accounts for less than two percent of global output. Production peaked at 4.6…
Why Quality Underperformed in 2025 (And Why We Think History Suggests a Reversal) It was a tough year for active managers who invest in quality companies. Not just for us at Riverwater, but across the board. According to Furey Research Partners, growth, core, and value managers all underperformed in 2025. Among core managers, only 16%…
Sustainability Disclosure in Small Caps: Another Dimension Where the Work Matters In late 2024, we published our first comprehensive analysis of sustainability reporting across the Russell 2000, finding that roughly half of small-cap companies disclosed Environmental, Social and Governance data—a striking gap compared to the near-universal reporting among S&P 500 constituents. We’ve now updated that research,…
The Four-Year Harvest Avocado trees take three to four years to bear first fruit and four to five years to reach full production. You can’t rush biology. A farmer who plants an orchard today is making a bet on conditions years into the future—conditions that are impossible to predict with certainty. The work happens anyway,…
Shareholder Engagement Strategies: Case Studies in Active Stewardship Active Stewardship – Engagement that Creates Value for Mindful Investors As contrarian investors, we’ve learned that the most meaningful conversations often happen away from the quarterly earnings spotlight. While markets focus on short-term metrics, we engage with management teams on the fundamental questions that drive long-term value…
Bottom of the Lineup, Top of the Charts Like our hometown team, the Milwaukee Brewers, small caps have spent the better part of fifteen years out of favor—grinding out singles and doubles while mega-caps launched moonshots. This season, both are reminding us that cycles turn, and that discipline can ultimately trump pure scale. Source: Furey…
Q2 2025 Market Paradox: Trade Chaos (Check ✔), Market Rally (Check ✔) The quarter brought the paradoxical combination of unprecedented global trade volatility with surprisingly resilient market performance. From the United States’ military engagement with Iran—which counterintuitively drove oil prices below pre-war levels—to the dramatic “TACO trade” saga where Liberation Day tariffs sparked violent market…