| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.51% | 5.85% | 5.85% |
The Madison Dividend Income Fund delivered strong outperformance in Q1 2026, returning +5.8% versus -4.3% for the S&P 500, as market concentration risks materialized with the largest technology stocks underperforming significantly. The fund was insulated from these risks through its diversified portfolio of cheaper dividend stocks and avoidance of the eight largest S&P 500 names. Energy was the standout performer, gaining +38% and driving outperformance as the fund increased its Energy allocation from 9% to 16.5% over six months, including a new position in ConocoPhillips. The managers believe a new Energy bull market began in late 2025. The fund's relative yield strategy continues to identify value, with the portfolio yielding 2.05x the S&P 500 at quarter-end. Despite cheaper overall market valuations, managers see continued risks of multiple contraction and maintain a defensive posture through high-quality holdings, with 94% rated A- or better. The portfolio's 2.50% dividend yield and 6% average dividend growth provide income and inflation protection while positioning for potential market volatility.
The Madison Dividend Income Fund seeks to provide income and attractive long-term returns by owning a diversified portfolio of high-quality, above-average dividend yield stocks with strong balance sheets and sustainable competitive advantages, positioned defensively in cheaper areas of the market.
Managers continue to believe there are risks of further multiple contraction and a market correction despite cheaper valuations. They believe dividend stocks remain on sale and that a new Energy bull market likely began in late 2025 that could continue to drive Energy stock outperformance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 18 2026 | 2026 Q1 | COP | defensives, dividends, energy, Quality, Utilities, value | - | Madison Dividend Income outperformed significantly as market concentration risks hit large-cap technology stocks while the fund's Energy overweight drove returns. The relative yield strategy continues finding value in dividend stocks trading at attractive levels. Despite cheaper market valuations, managers maintain defensive positioning through high-quality holdings while benefiting from a potential new Energy bull market cycle. |
| Jan 20 2026 | 2025 Q4 | AAPL, AMZN, AVGO, BLK, CME, CVX, GOOGL, HON, JNJ, MDT, META, MS, MSFT, NEE, NVDA, TSLA, UNP, XOM | defensives, dividends, income, large cap, Quality, value | - | Madison Dividend Income Fund underperformed in 2025 due to Magnificent Seven dominance but maintains defensive positioning in high-quality dividend stocks trading at attractive relative valuations. With S&P 500 at historically expensive levels, the fund's quality bias and 2.53% yield provide downside protection while positioning for potential equal-weight outperformance reversal. |
| Oct 14 2025 | 2025 Q3 | ADP, BLK, CME, HD, HON, JNJ, MDT, MS, NEE, UNP | AI, defensives, dividends, financials, Quality, Utilities, value | - | Madison Dividend Income Fund sees a generational opportunity in dividend stocks trading at historically cheap valuations while the broader market trades at expensive 22x forward earnings with dangerous AI concentration. The fund maintains defensive positioning through high-quality dividend stocks with strong balance sheets, minimal AI exposure, and superior credit ratings compared to broader indices. |
| Jul 15 2025 | 2025 Q2 | ADP, BLK, CME, HD, HON, JNJ, MDT, MS, NEE, UNP | AI, defensives, dividends, Quality, technology, Utilities, value | - | Madison Dividend Income sees a generational opportunity in quality dividend stocks trading at historically cheap relative valuations while the S&P 500 reaches extreme concentration in expensive AI stocks. The fund maintains defensive positioning through high-credit-quality holdings with growing dividends, minimal technology exposure, and strong balance sheets designed to protect capital during market corrections while participating in long-term appreciation. |
| Mar 31 2025 | 2025 Q1 | ADP, BLK, CME, EOG, HD, HON, JNJ, MDT, MS, NEE | Defensive, dividends, income, industrials, Quality, Relative Yield, value | HON | Madison Dividend Income Fund outperformed major indices in Q1 2025 with its relative yield strategy targeting high-quality dividend stocks at attractive valuations. The fund maintains 90% A-rated holdings with 2.6% yield and strong dividend growth, providing defensive characteristics as global tariff risks increase. Honeywell breakup catalyst and continued valuation opportunity in dividend stocks support the thesis. |
| Dec 31 2024 | 2024 Q4 | ADP, BLK, CME, HD, HON, JNJ, MDT, MS, NEE, ROK, TEL, TXN | dividends, income, industrials, large cap, Quality, Relative Yield, technology, value |
ROK TEL |
Madison Dividend Income Fund sees a generational opportunity in dividend stocks trading at historically cheap valuations. The fund's relative yield of 2.15x the S&P 500 is at historical highs. Recent additions include Rockwell Automation and TE Connectivity at attractive valuations. High-quality portfolio with 90% of holdings rated A- or better provides downside protection while dividend growth of 8% exceeds inflation. |
| Sep 30 2024 | 2024 Q3 | ADP, BLK, CME, FAST, HD, HON, JNJ, MDT, MS, NEE, TXN | dividends, income, industrials, large cap, Quality, value | HON | Madison Dividend Income Fund outperformed in Q3 through its relative yield strategy, capitalizing on historically cheap valuations in quality dividend stocks. The portfolio trades at 2.1x relative yield to S&P 500 near historical highs, representing a generational opportunity. Holdings increased dividends 8% annually while maintaining strong balance sheets, with 89% rated A- or better. |
| Jul 17 2024 | 2024 Q2 | ADP, AMZN, CMCSA, EOG, FAST, HD, HON, MDT, MS, NEE, TSLA, TXN | Concentration, dividends, Quality, technology, value | - | Madison Dividend Income Fund sees a generational opportunity in dividend stocks trading at 25-year relative valuation lows while Technology sector valuations reach extreme levels. With market concentration at 1929 highs and only 25% of stocks outperforming, managers expect mean reversion similar to late 1990s when dividend stocks subsequently outperformed dramatically. |
| May 2 2024 | 2024 Q1 | ADP, BLK, CMCSA, CME, EOG, FAST, HD, MDT, MS, NEE, XOM | dividends, energy, financials, income, industrials, Quality, value | XOM | Madison Dividend Income Fund sees attractive opportunity in historically cheap dividend stocks trading 2 standard deviations below 20-year average valuations versus S&P 500. Fund's 2.84% yield represents 2.1x relative yield to market, highest in 20 years. Recent sector rotation favoring Energy, Industrials, and Financials benefits portfolio's 48.8% allocation to these sectors. |
| Jan 14 2024 | 2023 Q4 | APD, BLK, BMY, CMCSA, CME, EOG, FAST, HD, MDT, MS, NEE, PFE | dividends, healthcare, Quality, staples, underperformance, Utilities, value | - | Madison Dividend Income Fund struggled in 2023 with +1.8% returns as growth crushed value and high-yield stocks lagged dramatically. Despite significant underperformance versus benchmarks, management sees attractive setup with dividend stocks at historically cheap valuations and expects mean reversion to favor their high-quality, above-average yield strategy over time. |
| Oct 15 2023 | 2023 Q3 | BKR, CMCSA, CME, CSCO, CVX, EOG, HD, JNJ, MDT, MS | dividends, income, large cap, Quality, rates, value | - | Madison's dividend strategy outperformed benchmarks despite headwinds from rising rates and growth stock dominance. Value stocks trade at 30-year lows versus growth, while the fund's 3.25% yield represents the highest relative advantage in over a decade. Managers view current dividend stock underperformance as creating attractive long-term opportunities for patient investors. |
| Dec 7 2023 | 2023 Q2 | NEE | AI Risk, Concentration, Defensive, dividends, Quality, value | - | Madison Dividend Income sees a generational opportunity in high-quality dividend stocks trading at historically cheap relative valuations while the market concentrates in expensive AI names. The fund maintains defensive positioning with 90% A-rated holdings and minimal tech exposure, emphasizing capital protection and consistent dividend growth over full market participation. |
| Apr 14 2023 | 2023 Q1 | UPS, USB | - | - | |
| Dec 31 2022 | 2022 Q4 | CVX | - | - | |
| Oct 25 2022 | 2022 Q3 | MS | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
DividendsThe fund focuses on high-quality, above-average dividend yield stocks with sustainable competitive advantages. Portfolio holdings increased dividends by 6% on average over the past year, well above inflation. The fund's absolute dividend yield of 2.50% compares favorably to 1.2% for the S&P 500. |
Dividend Yield Income Quality Sustainability Growth |
EnergyEnergy was the best performing sector by a wide margin, gaining 38% in the quarter. The fund significantly increased Energy holdings from 9% to 16.5% over six months by adding to existing positions and starting a new position in ConocoPhillips. Managers believe a new Energy bull market likely began in late 2025. |
Oil Energy Transition Exploration & Production Integrated Oil & Gas Bull Market | |
ValueThe fund's relative yield strategy targets stocks trading at the high end of their historic dividend yield range. At quarter-end, the fund's relative yield was 2.05x the S&P 500 and 1.35x the Russell 1000 Value Index, both at the high end of historical ranges, indicating dividend stocks remain on sale. |
Relative Yield Valuation Historical Ranges Undervalued Opportunity | |
QualityThe fund maintains a high-quality portfolio with strong balance sheets to protect on the downside. 94% of fund holdings are rated A- or better by Standard & Poor's, compared to 35% for the S&P 500 and 22% for the Russell 1000 Value Index. |
Credit Rating Balance Sheets Defensive Downside Protection Financial Strength | |
| 2025 Q4 |
PharmaceuticalsHealth care holdings including pharmaceutical and biotechnology companies added meaningfully to returns. Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady and growing earnings, and business models that continue to generate cash through a wide range of economic conditions. |
Pharmaceuticals Biotechnology Healthcare |
Defense SpendingDefense-related holdings such as BAE Systems and Rheinmetall had been standout performers for much of the year but fell back in Q4. While these businesses currently benefit from secular growth in defense spending around the world, share prices have moved ahead of underlying fundamentals, prompting modest trimming. |
Defense Military Aerospace | |
ValuationThe manager notes high, if not excessive, valuations across most asset categories, particularly publicly traded US equities. Despite outperformance of non-US equities, the gap in valuation between US and non-US equities still remains quite significant and should serve them well given their non-US-centric postures. |
Valuation Value Pricing | |
AIThe manager attributes market enthusiasm to excitement around artificial intelligence and its ability to dramatically impact productivity, but warns that even the most profound technological revolutions aren't one-way streets to prosperity, suggesting this time is not likely to be any different. |
AI Technology Productivity | |
| 2025 Q3 |
DividendsThe fund focuses on high-quality dividend stocks trading at attractive valuations, with portfolio holdings increasing dividends by 6% annually. The strategy emphasizes above-average dividend yields as protection against market volatility and inflation. |
Dividend yield Income Quality Valuation Inflation protection |
AIThe market has become heavily concentrated in AI-related stocks, with 45% of the S&P 500 now AI-related according to J.P. Morgan estimates. The fund maintains minimal AI exposure with only a 4.1% position in NextEra Energy, viewing this concentration as a significant market risk. |
Artificial Intelligence Market concentration Technology Valuation risk Defensive positioning | |
ValueDividend stocks are trading at historically cheap valuations relative to the broader market, with the fund's relative yield at 2.25x the S&P 500. This creates a generational opportunity to own quality dividend stocks at below-average valuations. |
Relative yield Cheap valuations Opportunity Quality stocks Market rotation | |
| 2025 Q2 |
DividendsThe fund focuses on high-quality dividend stocks trading at attractive valuations, with portfolio holdings increasing dividends by 6% annually. The relative yield strategy targets stocks at the high end of their historic dividend yield ranges, with the fund yielding 2.52% versus 1.15% for the S&P 500. |
Dividend Yield Income Relative Yield Quality Valuation |
AIThe fund maintains minimal AI exposure with only a 4.1% position in NextEra Energy among the 41 AI-related stocks identified by J.P. Morgan. This contrasts with the S&P 500 where 45% is now AI-related stocks, creating concentration risk that the fund seeks to avoid. |
Artificial Intelligence Concentration Technology Market Risk | |
QualityThe portfolio emphasizes high-quality companies with strong balance sheets, with 90% of holdings rated A- or better by Standard & Poor's. This compares favorably to 35% for the S&P 500 and 22% for the Russell 1000 Value, providing defensive characteristics during market corrections. |
Credit Rating Balance Sheet Defensive Risk Management | |
| 2025 Q1 |
DividendsThe fund employs a relative yield strategy, buying stocks with dividend yields at least 1.1x the S&P 500. Portfolio holdings have increased dividends by nearly 8% on average over the past year, well above inflation. The fund maintains an absolute dividend yield of 2.6% compared to 1.34% for the S&P 500. |
Dividend Yield Income Relative Yield Dividend Growth Inflation Protection |
QualityThe fund focuses on high-quality companies with strong balance sheets and sustainable competitive advantages. 90% of fund holdings are rated A- or better by Standard & Poor's, compared to 33% for the S&P 500. This quality focus is designed to provide downside protection during market corrections. |
Credit Quality Balance Sheet Defensive Moats Risk Management | |
ValueThe manager believes dividend stocks continue to trade at historically cheap valuations compared to the broad market. The relative yield of the fund was 1.9x the S&P 500 at quarter-end, at the high end of historical ranges, indicating attractive valuations despite recent outperformance. |
Valuation Relative Yield Cheap Historical Ranges Multiple Expansion | |
| 2024 Q4 |
DividendsThe fund employs a relative yield strategy, buying stocks with dividend yields at least 1.1x the S&P 500. The portfolio's relative yield of 2.15x the S&P 500 is at the high end of its historical range and 25% higher than at the end of 2022. Portfolio holdings have increased their dividends by nearly 8% on average over the past year, well above inflation rates. |
Dividend Yield Relative Yield Income Dividend Growth Dividend Increases |
ValueThe managers view dividend stocks as trading at historically cheap valuations compared to the broad market, creating what they call a generational opportunity. They focus on stocks with low valuations and potential for valuation multiple expansion while avoiding those facing secular challenges. |
Valuation Multiple Expansion Cheap Valuations Generational Opportunity Below Average Valuations | |
QualityThe fund maintains a high-quality portfolio with strong balance sheets, with 90% of holdings rated A- or better by Standard & Poor's. This compares favorably to the S&P 500 at 33% and Russell 1000 Value at 20%. The managers seek companies with sustainable competitive advantages and wide moats. |
Credit Quality Balance Sheet Competitive Advantage Wide Moats High Quality | |
AutomationThe fund purchased Rockwell Automation as a new Industrial holding, viewing it as a high-quality global industrial automation equipment and services company. Long-term demand for automation products should grow faster than GDP, driven by favorable secular trends including U.S. reshoring and supply chain de-risking. |
Industrial Automation Factory Automation Reshoring Supply Chain GDP Growth | |
| 2024 Q3 |
DividendsFund employs a relative yield strategy targeting stocks with dividend yields at least 1.1x the S&P 500. Portfolio holdings increased dividends by nearly 8% on average over the past year, well above inflation rates. Fund maintains focus on companies with consistent dividend increase records. |
Dividend Yield Dividend Growth Income Relative Yield Dividend Aristocrats |
ValueFund trades at historically cheap valuations with relative yield of 2.1x the S&P 500, near the high end of historical range and 20% higher than end of 2022. Manager sees generational opportunity in high-quality dividend stocks at below-average valuations. |
Valuation Relative Yield Cheap Below Average Historical Range | |
QualityPortfolio emphasizes high-quality companies with strong balance sheets and sustainable competitive advantages. 89% of fund holdings are rated A- or better by S&P, compared to 32% for S&P 500 and 20% for Russell 1000 Value. |
Credit Rating Balance Sheet Competitive Advantage High Quality Moats | |
| 2024 Q2 |
DividendsThe fund focuses on high-quality dividend-paying stocks with above-average yields and sustainable competitive advantages. Portfolio holdings have increased dividends by nearly 8% on average over the past year, well above inflation rates. The fund's relative dividend yield of 2.20x versus the S&P 500 is at the highest level in 25 years. |
Dividend Yield Income Quality Sustainable Growth |
ValueDividend-paying stocks have reached historically cheap valuations compared to the broad market. The fund's relative yield ratios are at 25-year highs, presenting what managers view as a generational opportunity to own high-quality dividend stocks at attractive valuations. |
Valuation Relative Yield Cheap Opportunity Mean Reversion | |
| 2024 Q1 |
DividendsFund employs relative yield strategy buying stocks with dividend yield at least 1.1x the S&P 500. Portfolio has dividend yield of 2.84% with relative dividend yield of 2.1x S&P 500, the highest levels in 20 years. Manager believes dividend stocks are historically cheap versus broad market. |
Dividend Yield Relative Yield Income Aristocrats Quality |
ValueDividend stocks are attractively valued compared to broad market with some dividend funds trading 2 standard deviations cheap versus S&P 500. Manager seeks stocks with low valuations and potential for valuation multiple expansion while avoiding secular challenges. |
Valuation Multiple Expansion Cheap Undervalued Relative Value | |
EnergyEnergy was top performing sector in Q1 with 12.5% return. Fund has 9.5% weight in Energy including detailed investment in Exxon Mobil. XOM expected to double Permian output by 2027 while limiting capital spending to $20-25 billion annually through 2027. |
Oil Permian Production Capital Discipline Upstream | |
| 2023 Q4 |
DividendsFund focuses on above-average dividend yield stocks using Relative Yield process, investing in stocks yielding 1.1x the S&P 500 dividend yield. Portfolio holdings raised dividends 7% over the past year with continued dividend increases expected going forward. |
Dividend Yield Dividend Growth Income Relative Yield Dividend Aristocrats |
ValueDividend stocks are historically cheap versus the overall market, with the fund yielding more than 2x the S&P 500 and 1.3x the Russell 1000 Value Index at year end - the highest levels since current management team has been together. |
Valuation Cheap Relative Value Mean Reversion Undervalued | |
QualityFund owns high-quality portfolio with strong balance sheets, with 90% of holdings rated A- or better by S&P, compared to 32% for S&P 500 and 19% for Russell 1000 Value Index. |
Credit Quality Balance Sheets Defensive High Quality Strong Fundamentals | |
| 2023 Q3 |
DividendsThe fund focuses on high-quality dividend paying stocks with above-average yields. At quarter end, the fund yielded 3.25% compared to S&P 500's 1.61%, representing the highest relative dividend yield versus benchmarks in over a decade. The manager believes dividend stocks are attractively priced after significant underperformance. |
Dividend Yield Income Dividend Aristocrats Dividend Paying Stocks Relative Yield |
ValueValue stocks are trading at the low end of their historical range compared to growth stocks over the past 30 years. The manager believes this creates an attractive opportunity to own value stocks, particularly high-quality dividend paying stocks within the value universe. Many value stocks appear attractively priced when compared to growth stocks. |
Value Investing Growth vs Value P/E Ratios Valuation MSCI Value | |
RatesRising interest rates have significantly impacted both fixed income and dividend-paying stocks. The 10-year Treasury is experiencing its worst bear market in a century with three consecutive down years. The stock market appears to be pricing dividend stocks as fixed income instruments, creating opportunities as rates have risen. |
Interest Rates Treasury Bonds Fixed Income Rate Impact Bond Bear Market | |
| 2023 Q2 |
DividendsThe fund focuses on high-quality dividend stocks trading at attractive valuations relative to the broader market. Portfolio holdings have increased dividends by 6% on average over the past year, well above inflation. The fund's relative yield of 2.25x the S&P 500 is at the high end of historical ranges, indicating dividend stocks are on sale. |
Dividend Yield Income Quality Relative Yield Valuation |
AIThe fund has minimal AI exposure with only a 4.1% position in NextEra Energy among the 41 AI-related stocks identified by J.P. Morgan. The managers view the 45% AI concentration in the S&P 500 as a significant risk factor, particularly given expensive valuations and potential for negative developments in the AI buildout. |
Artificial Intelligence Concentration Risk Technology Valuation | |
Risk AppetiteThe fund maintains a defensive posture with 90% of holdings rated A- or better by S&P, significantly higher quality than the broader market. The strategy emphasizes capital protection and limiting drawdowns during bear markets while participating in bull market appreciation. |
Quality Defensive Credit Rating Capital Protection |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Mar 31, 2025 | Fund Letters | Madison Dividend Income Fund | HON | Honeywell International Inc | Industrials | Industrial Conglomerates | Bull | NASDAQ | Activist Investment, Aerospace, aftermarket services, Building Automation, Corporate Spinoff, Dividend Growth, industrial conglomerates, recurring revenue, Relative Yield, Safety Solutions, Value | Login |
| Mar 31, 2024 | Fund Letters | Madison Dividend Income Fund | XOM | Exxon Mobil Corporation | Energy | Integrated Oil & Gas | Bull | NYSE | capital discipline, dividend aristocrat, Downstream, energy, Guyana, Integrated Oil, natural gas, Permian Basin, refining, share repurchase, Upstream, Value | Login |
| - | Fund Letters | Madison Dividend Income Fund | HON | Honeywell International Inc. | Industrials | Industrial Conglomerates | Bull | NASDAQ | Aerospace, Automation, Building Technologies, Cyclical Recovery, dividend aristocrat, high switching costs, industrial conglomerate, recurring revenue, Software, Value | Login |
| - | Fund Letters | Madison Dividend Income Fund | ROK | Rockwell Automation | Industrials | Industrial Machinery | Bull | NYSE | Cyclical Recovery, Dividend Growth, Equipment, Industrial automation, manufacturing, Reshoring, supply chain | Login |
| - | Fund Letters | Madison Dividend Income Fund | TEL | TE Connectivity | Information Technology | Electronic Components | Bull | NYSE | Artificial Intelligence, automotive, Cloud computing, Connectors, Dividend Growth, Electric Vehicles, renewable energy, Sensors | Login |
| TICKER | COMMENTARY |
|---|---|
| COP | The Dividend Income Fund significantly increased its Energy holdings over the past six months by adding to existing positions and starting a new position in ConocoPhillips (COP). |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
