L2 Micro Cap – Q4 2025

Table of contents

When

January 5, 2026

Who

Matthew Malgari
Dr. Sanjeev Bhojraj
Nathan Przybylo

Q4 2025 STRATEGY PERFORMANCE:

The L2 Micro Strategy rose 6.07% in Q4 2025 while the benchmark Russell Micro-Cap ETF rose 6.26% 1.

MARKET OVERVIEW: QUICK SUMMARY

Annual results for the Russell Micro-Cap ETF were 22.45% vs 15.82% for the L2 Micro Strategy. Index results were heavily influenced by the outperformance of speculative/low quality stocks. In fact, low quality outperformed high quality by 20% points. Historically, the opposite has been true. Low quality has underperformed high quality in the micro-cap universe on average by 5%, or 1.7x annually since 1989.

High Quality vs. Low Quality: 2025

High Quality vs. Low Quality: Average Annual Return