Unveiling the Q2 2025 Journey: Nationwide Geneva Small Cap Growth Fund Navigates a Dynamic Market

The second quarter of 2025 presented a tapestry of both challenge and opportunity for equity markets, particularly within the dynamic small-cap growth segment. Amidst evolving economic indicators and shifting investor sentiment, the Nationwide Geneva Small Cap Growth Fund demonstrated commendable resilience, carefully navigating the currents to deliver robust performance for its shareholders.

As we reflect on Q2, it's clear that the economic landscape continued its intricate dance.

Inflationary pressures, while showing signs of moderation, remained a focal point, influencing central bank policies and, by extension, market liquidity. Interest rate trajectories, always a critical factor for growth-oriented companies, maintained a delicate balance, causing periods of volatility. Despite these macroeconomic headwinds, the underlying innovation and entrepreneurial spirit inherent in small-cap companies continued to carve out compelling growth narratives.

Against this backdrop, the small-cap growth universe exhibited a fascinating dichotomy.

While certain sectors faced valuation pressures, others, particularly those aligned with structural long-term trends, found fertile ground for expansion. Our disciplined investment approach, centered on identifying high-quality businesses with sustainable competitive advantages, proved instrumental in capitalizing on these selective opportunities.

During the quarter, the Nationwide Geneva Small Cap Growth Fund’s performance stood out, driven by strategic allocations and strong fundamental performance from key holdings.

Notable contributions came from companies within the technology sector, particularly those involved in enterprise software and cybersecurity, where robust demand continued to outpace broader economic concerns. Similarly, select healthcare innovators, focused on novel therapies and medical technologies, showcased impressive revenue growth and margin expansion, reinforcing their long-term value proposition.

While the quarter was largely positive, we did observe areas that required meticulous management.

Certain industrials, sensitive to fluctuating commodity prices and global supply chain dynamics, experienced temporary headwinds. However, our active management style allowed us to adjust positions thoughtfully, mitigating potential downside risks and maintaining our focus on the long-term growth potential of our portfolio companies.

Our investment philosophy remains steadfast: a conviction-based approach to growth investing that prioritizes businesses with strong management teams, durable competitive moats, and clear paths to sustainable profitability.

We believe that true growth is not merely about market trends but about the intrinsic value created by companies solving real-world problems and disrupting established industries.

Looking ahead to the remainder of 2025 and beyond, we maintain a cautiously optimistic outlook for the small-cap growth segment.

We anticipate continued divergence in market performance, underscoring the importance of rigorous fundamental analysis and selective stock picking. Innovation cycles, demographic shifts, and technological advancements will likely continue to fuel opportunities for nimble, well-managed small-cap enterprises.

The Nationwide Geneva Small Cap Growth Fund remains committed to identifying these promising companies and managing the portfolio with prudence and foresight.

We are confident in our ability to navigate future market conditions, striving to deliver superior risk-adjusted returns and long-term value creation for our investors. Thank you for your continued trust and partnership.