FPA Queens Road Small Cap Value Fund’s Thoughts on RLI Corp. (RLI)

Soumya Eswaran

Fri, February 13, 2026 at 9:51 PM GMT+9 3 min read

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Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund returned -0.36% in Q4 2025, compared to the Russell 2000 Value Index’s 3.26%. In 2025, the Fund has returned 13.36% compared to 12.59% gain for the Index. The Fund outperformed in the first half of 2025, when markets were weak and volatile. However, in the second half of 2025, markets favored speculative and low-quality stocks, leading to the Fund’s underperformance. The portfolio is designed to protect clients from market drawdowns by focusing on quality and value. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted RLI Corp. (NYSE:RLI). RLI Corp. (NYSE:RLI) is an insurance holding company. On February 12, 2026, RLI Corp. (NYSE:RLI) stock closed at $62.43 per share. One-month return of RLI Corp. (NYSE:RLI) was 5.19%, and its shares are down 16.92% over the past twelve months. RLI Corp. (NYSE:RLI) has a market capitalization of $5.736 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding RLI Corp. (NYSE:RLI) in its fourth quarter 2025 investor letter:

"Below are three examples where, we believe, an uncrowded arena has created opportunity. All three are stocks that we have owned for a long time and that have performed well for the Fund. Their businesses haven’t changed much, but their valuations (market multiples) have come down with the ebbing small cap tide. is roughly: The likely explanation As small (and SMID) cap strategies see outflows, there isn’t another natural cohort of investors who want to buy high quality but boring small businesses at reasonable valuations. While no one was paying attention, earnings grew faster than the stock prices appreciated, pushing down their multiples and pushing up expected returns. We think all three are attractive opportunities at the current prices.

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A Closer Look at RLI Corp (RLI), a Quiet Dividend Grower

RLI Corp. (NYSE:RLI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 36 hedge fund portfolios held RLI Corp. (NYSE:RLI) at the end of the third quarter, up from 29 in the previous quarter. While we acknowledge the potential of RLI Corp. (NYSE:RLI) 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.

In another article, we covered RLI CORP. (NYSE:RLI) and shared FPA Queens Road Small Cap Value Fund’s views on the company previous quarter. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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

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