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Loomis Sayles, an investment management company, released its fourth-quarter 2025 investor letter for “Small Cap Growth Fund”. A copy of the letter is available to download here. The small caps’ earnings are reaccelerating in 2025, as the firm forecasted a year ago. The market also experienced a low-quality rally within the small-cap space. Against this backdrop, the Small Cap Growth Fund underperformed the Russell 2000 Growth Index benchmark in the quarter, returning 0.51% vs. 1.22% for the benchmark. Heading into 2026, there are many reasons to feel positive about the economy, earnings growth, and the stock market. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Loomis Sayles Small Cap Growth Fund highlighted Wave Life Sciences Ltd. (NASDAQ:WVE) as one of its leading contributors. Wave Life Sciences Ltd. (NASDAQ:WVE) is a clinical-stage biotechnology company focused on developing RNA-targeted therapies. On March 24, 2026, Wave Life Sciences Ltd. (NASDAQ:WVE) stock closed at $11.63 per share. One-month return of Wave Life Sciences Ltd. (NASDAQ:WVE) was -20.01%, and its shares gained 24.75% over the past 52 weeks. Wave Life Sciences Ltd. (NASDAQ:WVE) has a market capitalization of $2.19 billion.
Loomis Sayles Small Cap Growth Fund stated the following regarding Wave Life Sciences Ltd. (NASDAQ:WVE) in its fourth quarter 2025 investor letter:
“Establishment Labs Holdings, Wave Life Sciences Ltd. (NASDAQ:WVE) and MACOM Technology Solutions Holdings were the top individual contributors overall. Wave Life Sciences is a biotech company focused on utilizing RNA technologies to treat various conditions. During the quarter, the company published its first data for a novel obesity target showing a reduction in fat mass while preserving muscle mass and the stock reacted positively as a result.”
Wave Life Sciences Ltd. (NASDAQ:WVE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 45 hedge fund portfolios held Wave Life Sciences Ltd. (NASDAQ:WVE) at the end of the fourth quarter, up from 38 in the previous quarter. While we acknowledge the potential of Wave Life Sciences Ltd. (NASDAQ:WVE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.