The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.

Ariel Investments, an investment management company, released its “Ariel Fund" Q1 2026 Investor Letter. A copy of the letter can be downloaded here. The fund declined 1.48% in the quarter, underperforming both the Russell 2500 Value and Russell 2000 Value indices, which returned 4.77% and 4.96%, respectively. The S&P 500 posted its worst quarterly decline since Q3 2022, driven by escalating conflicts in the Middle East, rising energy prices, increasing bond yields, and diminishing expectations for interest rate cuts. The firm attributed performance to gains in holdings, supported by long-term growth themes like AI-driven power demand, strong consumer engagement, and healthcare innovation. While detractors weighed on returns due to weak consumer demand, operational challenges, and softer private market activity. Ariel also noted portfolio moves, while maintaining a cautious outlook, citing rising recession risks, geopolitical tensions, and narrow market leadership, emphasizing that its disciplined, fundamentals-driven strategy and focus on high-quality businesses should help navigate near-term volatility and capture long-term opportunities. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026.

In its first-quarter 2026 investor letter, Ariel Fund highlighted stocks like The Carlyle Group Inc. (NASDAQ:CG). The Carlyle Group Inc. (NASDAQ:CG) is an investment firm managing assets across private equity, credit, and real assets. The one-month return of The Carlyle Group Inc. (NASDAQ:CG) was 7.56% while its shares traded between $39.48 and $69.85 over the last 52 weeks. On May 01, 2026, The Carlyle Group Inc. (NASDAQ:CG) stock closed at approximately $49.44 per share, with a market capitalization of about $18.02 billion.

Ariel Fund stated the following regarding The Carlyle Group Inc. (NASDAQ:CG) in its Q1 2026 investor letter:

"Finally, alternative asset manager Carlyle Group (NASDAQ:CG) traded lower during the quarter as investors weighed ongoing volatility across equity and credit markets against an otherwise constructive long-term outlook. While the firm outlined ambitious three-year financial targets and announced a sizeable share repurchase authorization at its investor day, the guidance largely reinforced longer-dated expectations rather than providing a near-term catalyst. Softer private credit activity amid market uncertainty, coupled with continued investment in platform capabilities, further pressured near-term sentiment. As a result, concerns around timing and earnings visibility outweighed CG’s longer-term growth ambitions and shareholder return framework during the quarter."

Image by MayoFi from Pixabay

The Carlyle Group Inc. (NASDAQ:CG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 31 hedge fund portfolios held The Carlyle Group Inc. (NASDAQ:CG) at the end of the fourth quarter, which was 36 in the previous quarter. While we acknowledge the risk and potential of The Carlyle Group Inc. (NASDAQ:CG) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.

In another article, we covered The Carlyle Group Inc. (NASDAQ:CG) and shared the list of the best large cap value stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

Disclosure: None. This article is originally published at Insider Monkey.