| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.3% | -1.2% | 1.6% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 1.8% | 10.3% | 26.5% | -13.6% | 26.3% | 9.5% |
The Madison Mid Cap Fund declined 1.2% in Q4 2025 versus a 0.2% gain for the Russell Midcap Index, as market leadership continued favoring speculative companies over quality businesses. The fund's focus on high-quality, profitable, durable companies faced headwinds in an environment where unprofitable technology, bitcoin-exposed equities, and quantum computing businesses advanced over 100% from April lows. Top contributors included Ross Stores, MKS, Waters, PACCAR, and Amphenol, with several benefiting from AI-related data center spending and improving end markets. Detractors included Trex, Brown & Brown, CDW, Floor & Décor, and Liberty Broadband, facing challenges from competitive pressures and housing market weakness. Portfolio activity included adding four new investments at attractive valuations: Bio-Techne, ServiceTitan, A.O. Smith, and MSA Safety, while selling Trex due to changed competitive dynamics and Microchip Technology following valuation recovery. Management remains committed to their quality-focused discipline, believing their all-weather portfolio is well-positioned for long-term risk-adjusted returns despite current market preferences for speculation over proven durability.
Focus on high-quality, highly profitable, durable businesses with shareholder-oriented management teams selling below intrinsic value assessments, which has historically provided strong long-term performance despite temporary market preference for speculative investments.
The fund remains committed to its quality-focused discipline despite current market preference for speculative investments. Management believes their all-weather portfolio of high-quality, durable businesses remains well-positioned to deliver attractive risk-adjusted returns across various market environments, though these attributes may temporarily be out of favor.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | ACGL, ANET, AOS, APH, BRO, CDW, EXPD, FND, LBRDA, MCHP, MKSI, MSA, PCAR, ROST, TDY, TECH, TREX, TTAN, WAT, WRB | AI, financials, industrials, mid cap, Quality, technology, value |
ROST BIO TTAN AOS MSA MCHP |
The fund focuses on high-quality, highly profitable, durable businesses with shareholder-oriented management teams selling below intrinsic value assessments. This quality-focused approach has historically provided strong… |
| Oct 14 2025 | 2025 Q3 | BRO, GCI, IT | Artificial Intelligence, Mid Caps, momentum, Quality, tariffs |
MEDP APH ANET |
The fund notes that AI and utilities dominated mid-cap performance as momentum trading surged. Managers remain skeptical of AI speculation, favoring durable, shareholder-friendly firms like… |
| Jul 15 2025 | 2025 Q2 | - | cyclicality, growth, Mid Caps, stock selection, technology | - | The letter focuses on mid-cap growth opportunities driven by improving fundamentals and cyclical recovery in select industries. Management highlights technology and industrial exposure while remaining… |
| Mar 31 2025 | 2025 Q1 | ACGL, AWI, BRO, KNSL, MKSI, ROST, TREX | - | - | - |
| Dec 31 2024 | 2024 Q4 | ACGL, BAM, CDW, KMX | - | - | - |
| Sep 30 2024 | 2024 Q3 | BRO, DLTR, FND, GGG, LAD, LBRDA, MC, MCHP, PCAR | - | - | - |
| Jul 17 2024 | 2024 Q2 | BF/B, DLTR, TDY, THO | - | - | - |
| May 2 2024 | 2024 Q1 | ACGL, BN, CSL, DLTR | - | - | - |
| Jan 14 2024 | 2023 Q4 | - | - | - | - |
| Oct 15 2023 | 2023 Q3 | CDW, DLTR, KMX, MKSI | - | - | - |
| Dec 7 2023 | 2023 Q2 | ACGL, BRO, GBCI, PGR, WAT | - | - | - |
| Apr 14 2023 | 2023 Q1 | ANET, BKI, CPRT, CSL, FND, GBCI, IT, PCAR, ROST, WRB | - | - | - |
| Oct 25 2022 | 2022 Q3 | MCHP, MKSI, ROST, VNT | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
| 2025 Q3 |
Quality Investing |
|
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 20, 2026 | Fund Letters | Rich Eisinger | AOS | A. O. Smith Corporation | Industrials | Building Products | Bull | New York Stock Exchange | oligopoly, Regulations, Replacement, ROIC, Waterheaters | Login |
| Jan 20, 2026 | Fund Letters | Rich Eisinger | MSA | MSA Safety Incorporated | Industrials | Safety Equipment | Bull | New York Stock Exchange | Industrial, Regulation, Replacement, ROIC, Safety | Login |
| Jan 20, 2026 | Fund Letters | Rich Eisinger | MCHP | Microchip Technology Incorporated | Information Technology | Semiconductors | Bear | NASDAQ | Cyclicality, Discipline, Inventory, semiconductors, valuation | Login |
| Oct 14, 2025 | Fund Letters | Rich Eisinger | MEDP | Medpace Holdings Inc. | Health Care | Life Sciences Tools & Services | Bull | NASDAQ | Clinical research, Cro, growth, Outsourcing, ROIC, Scalability | Login |
| Oct 14, 2025 | Fund Letters | Rich Eisinger | APH | Amphenol Corporation | Information Technology | Electronic Components | Bull | NASDAQ | AI, Connectivity, data centers, diversification, electronics, Margins | Login |
| Oct 14, 2025 | Fund Letters | Rich Eisinger | ANET | Arista Networks Inc. | Information Technology | Communications Equipment | Bull | NYSE | AI, data centers, enterprise, growth, Margins, Networking | Login |
| Jan 20, 2026 | Fund Letters | Rich Eisinger | ROST | Ross Stores, Inc. | Consumer Discretionary | Apparel Retail | Bull | NASDAQ | Comps, Margins, Offprice, retail, Value | Login |
| Jan 20, 2026 | Fund Letters | Rich Eisinger | BIO | Bio-Techne Corporation | Health Care | Life Sciences Tools & Services | Bull | NASDAQ | leadership, lifesciences, Reagents, Recurringrevenue, valuation | Login |
| Jan 20, 2026 | Fund Letters | Rich Eisinger | TTAN | ServiceTitan, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | growth, Penetration, Retention, Trades, Verticalsaas | Login |
| TICKER | COMMENTARY |
|---|---|
| ACGL | Shares of specialty insurer Arch Capital Group Ltd. rose on strong earnings results and active capital management. Third-quarter earnings per share beat Street expectations due to improved underwriting margins and very low catastrophe losses, as there were no landfall hurricanes in the U.S. this season for the first time since 2015. |
| ANET | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| AOS | A.O. Smith designs and manufactures water heaters, boilers, and water treatment products. Around 80-85% of water heater demand is from replacement units, providing for a more consistent demand profile. A.O. Smith is the market share leader, operating within a rational oligopoly that drives high returns on invested capital. The company is well positioned to benefit from upcoming energy regulations as well as improved capital deployment from new CEO Steve Shafer. The stock traded down to an appealing valuation following weakening results in its China business as well as general negative sentiment on anything housing-related. |
| APH | We trimmed Amphenol Corp. |
| BRO | In 2026, we plan to publish deep dives on Brown & Brown |
| CDW | CDW was the second-worst performer. The IT industry continued to suffer from the pull forward of spending during COVID; however, we saw some momentum with the Windows 11 refresh and all of CDW's business lines had solid growth except for education. Despite this, overall earnings growth only exhibited modest improvement. |
| EXPD | Over the quarter the largest contributors were owning Expeditors (EXPD US, +21%) |
| FND | Floor & Decor (FND) is a business I've wanted to own shares in for some time. They are the leading warehouse-style flooring store with higher in-stock inventory selection and lower prices than scaled competitors, and have been taking market share for years if not decades. In my opinion, they are following the Home Depot model to disrupt a profitable subcategory of home improvement. I still believe the current purchase price is not obviously cheap on near-term earnings, but the purchase price does reflect an attractive valuation on long-term margins. The company's current EBIT margins are about 30% below their long-term pre-COVID levels, and I believe EBIT margins should continue to scale towards the low-to-mid-teens as the company builds out its store base. Current sales per store are depressed by a post-COVID hangover and higher interest rates which have depressed existing home sales, a key catalyst for renovation activity. Higher sales per store will lead directly to higher store-level margins, which flow nicely through to EBIT margins. I believe, with a more favorable existing home sales macro backdrop, that sales can grow at double digits with significant flow-through to the bottom line. It would not surprise me to look a couple years out and see the company generating $6.5B of sales at 7.0% net margins, which would mean the company is trading at 16x that admittedly uncertain (due to macro uncertainty) future earnings with nearly a decade of future store growth and comp growth. I see the company generating nearly $12 earnings per share 10 years from now, when it's store growth plan should be essentially complete. |
| LBRDA | Charter Communications (down 24.1%) was again hammered, and similarly Liberty Broadband (a Charter tracking stock) was down 23.8%. With them together accounting for around 7.6% of the Fund, these positions cost us dearly. And with both now down almost 50% over the year, it is not just a quarterly phenomenon. |
| MCHP | Microchip Technology is one of the leading analog and microcontroller companies, benefiting from long product lifecycles and diverse end markets. Microchip struggled with supply chain challenges over the past 24 months as lengthening production lead times led to customer over-ordering. The company's founder, Steve Sanghi returned to the CEO role this past summer and has been successful in reducing excess inventory and positioning the company for a recovery in market share. We are encouraged by Steve's action plans, but as the stock's valuation has recovered, we elected to sell our small stake. |
| MKSI | MKS shares advanced nicely during the quarter as the business continues to benefit from end markets picking up. Specifically, their Electronics and Packaging business is showing accelerating growth, partly due to AI-related applications. |
| MSA | We have long admired MSA's market leadership and mission-driven culture, and in 2025 we had an opportunity to purchase shares at what we deem an attractive price. We purchased our MSA shares at a mid/high-teens multiple of our estimate of forward earnings. |
| PCAR | PACCAR's current results continued to be pressured by the depressed end market environment, but tariff relief, environmental regulations, and a cyclical end market recovery point to results improving from here. |
| ROST | ROST posted strong same-store sales in its fiscal third quarter. In our estimation, the new CEO is doing an excellent job of reviving growth. We also believe that this off-price retailer is advantaged over traditional apparel companies because of its everyday discounts. In the current economy, where certain consumers are stressed, ROST fills a critical need. |
| TDY | Teledyne Technologies, a diversified industrial technology company, declined as expectations for near-term acceleration were pushed out. |
| TECH | Bio-Techne is a leader in the life sciences research market with a broad portfolio of products that are used to enable discoveries of new drugs, therapeutics, and diagnostics. These products include over 6,000 proteins, 400,000 antibody types, and 2,400 diagnostic assays. Around 80% of the business is recurring revenues. We are encouraged by the new CEO's strategy to leverage the core business and expand the company's leadership position in protein research. Consternation surrounding the health of customer research spending gave us the opportunity to buy the stock at a discount to our estimate of intrinsic value. |
| TREX | TREX Company, a leader in composite decking, was our biggest laggard in Industrials during the fourth quarter, as an increasingly competitive environment and weaker end-market trends led to poor Q3 results. TREX saw business fall off after Labor Day, which is inconsistent with results from other peers and surveys. It was quite surprising and may be a function of its higher DIY business. Regardless, this contradicts our thesis, so we exited the position. |
| TTAN | ServiceTitan is a leading provider of vertical software solutions for the trades, including plumbing, HVAC and electrical. Its platform supports the entire workflow from lead generation to payment, generating revenue through subscriptions and usage-based processing. We see meaningful growth opportunities through new customer acquisition, upselling and expansion into additional trades. During the quarter, we increased our position following a pullback amid broader software industry weakness, reflecting our conviction in the durability of its profit cycle. |
| WAT | Waters reported solid results supported by growth in Asia, and we increased the position following its acquisition of Becton Dickinson's biosciences and diagnostics business |
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