| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.1% | 3.4% | 3.3% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 3.3% | 16.4% | 26.1% | -13.2% | 22.7% | 14.4% |
The Madison Large Cap Fund generated a 3.43% return in Q4 2025, outperforming the S&P 500's 2.66% return. The fund's core thesis centers on investing in high-quality, durable businesses across diverse industries at reasonable prices, emphasizing proven companies over speculative opportunities and long-term value over momentum. Top contributors included Alphabet, which benefited from accelerating growth across Search, YouTube, and Cloud, plus new AI model releases. Industrial names like Parker-Hannifin, Keysight Technologies, Danaher, and PACCAR showed improving fundamentals as end markets recovered. The fund initiated positions in Workday and Honeywell while exiting Fiserv and Nike. Despite 2025 being challenging for quality-focused strategies due to narrow market leadership favoring high-beta momentum stocks, the managers remain committed to their philosophy. Looking ahead, they see the U.S. economy entering 2026 on firm footing with Fed rate cuts and fiscal tailwinds, though manufacturing and housing activity remains muted with employment and inflation uncertainty persisting.
The Madison Large Cap Fund invests in high-quality, durable businesses across a wide range of industries, selling for reasonable prices, focusing on the proven over the promise and long-term value creation over short-term momentum.
The U.S. economy enters 2026 on relatively firm footing. While positive dynamics from Fed rate cuts and fiscal policy tailwinds are expected, the managers acknowledge that economic activity in manufacturing and housing remains muted with lingering uncertainty around employment and inflation. The tone is cautiously optimistic with a commitment to maintaining their quality-focused investment philosophy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | A, ACGL, ADI, AMZN, BN, CDW, CPRT, DHR, FERG, FI, GOOGL, HON, KEYS, LOW, NKE, PCAR, PGR, PH, TXN, WDAY | AI, Automation, financials, industrials, large cap, Quality, technology, value |
FISV WDAY |
The portfolio is populated with high-quality, durable businesses across a wide range of industries, selling for reasonable prices. The fund invests in the proven over… |
| 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 |
AutomationFactory automation represents long-term structural growth opportunity. Keyence leads in sensors and machine-vision systems with 80% margins supported by direct sales model. Structural trends include rising automation, reshoring, and growing complexity in electric vehicle manufacturing providing long runway for growth. |
Factory Automation Industrial Sensors Machine Vision Robotics Industrial IoT | |
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 |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 20, 2026 | Fund Letters | Rich Eisinger | FISV | Fiserv, Inc. | Information Technology | Data Processing & Outsourced Services | Bear | New York Stock Exchange | Execution, Growthreset, Payments | Login |
| Jan 20, 2026 | Fund Letters | Rich Eisinger | WDAY | Workday, Inc. | Information Technology | Application Software | Bull | NASDAQ | AI, growth, Margins, Software | Login |
| TICKER | COMMENTARY |
|---|---|
| A | Agilent Technologies, a supplier of equipment for life science research, was under pressure as recent cuts to grants from the National Institutes of Health impacted its near-term outlook. We traded Agilent for ThermoFisher earlier in the year. |
| 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. |
| ADI | Best economics in analog: 70%+ gross margins, 45–50% EBIT target, rising ROIC. Premium positioning: 4X average selling prices, mission-critical sockets, extreme switching costs. Hybrid manufacturing edge: ~5% capex vs. peers 15%+ → superior free cash flow + resilience. Maxim synergies: power + systems mix shift, margin accelerator. Secular and cyclical tailwinds: industrial automation, EV electrification (wireless battery management system), AI data center power & test, 100% ADI alpha hit rate~39% annualized returns in past upcycles and we believe 2Q25 marked the restart; pricing + margin inflection underway. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| BN | Leading asset-rich alternative asset manager with deep domain expertise. Owns 73% of $84bn publicly-listed asset manager (Brookfield Asset Management) with significant value derived from asset-light, recurring management fee streams. We believe that deep domain expertise and best-in-class returns position Brookfield to benefit from multi-trillion-dollar wave of AI-related infrastructure investment. |
| 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. |
| CPRT | we recently trimmed some of our mega-cap tech holdings and other outperformers and used the proceeds to buy more of our underperforming holdings such as Copart, Inc. |
| DHR | After lagging through the first three quarters of 2025, Danaher's stock rebounded during Q4 as bioprocessing, life science, and diagnostics demand continued to recover from a cyclical trough. On the 3Q25 call, management established conservative 2026 growth expectations. Revenue is expected to continue to lag long-term trends at 3-6% but improve throughout the year. |
| FI | Notable detractors from performance came from Fiserv (-43bps absolute and -39bps relative) |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| HON | Honeywell is a US multinational leader in aerospace and industrial automation that is simplifying its business. Following the separation of its advanced materials business in late 2025, Honeywell's aerospace division will spin off in 2026. |
| KEYS | Keysight is an electronic design and testing company. It is at the heart of the digital revolution, providing solutions to help accelerate innovation in industries such as communications, networking, electronics, semi-conductor, automotive, aerospace and battery. The company delivered a material acceleration in order growth and guided meaningfully above consensus, with core order growth reaching double digits and broad-based strength across its segments. |
| LOW | Stocks like Lowe's and Home Depot have suffered from the housing slowdown. |
| NKE | Notable positive contributions from the Fund's short book in December include National Vision Holdings, Nike, and Starbucks. |
| 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. |
| PGR | Cadence, Linde, United Rentals, and Progressive rounded out the top-five detractors in the quarter. |
| PH | The provider of monitors and sensors highlighted an increase in orders across its business, supported by stronger aerospace and HVAC (heating, ventilation and air conditioning) demand. |
| TXN | During the quarter, we started a position in Texas Instruments (TXN), a leading semiconductor company. TXN is very well managed with a strategy of investing through the business cycle. The company has a strong balance sheet and earnings history. Its share price was volatile in 2025, peaking at over $200 in July following strong second quarter earnings but declining in November to less than $160 after weaker fourth quarter guidance despite beating third quarter revenue and profits forecasts. The drop in the share price provided a good entry point for this high-quality company and we expect to see a nice cyclical rebound in its business and a much higher stock price over the next few years. |
| WDAY | Finally, we have exited our relatively small position in Workday. The company's growth has decelerated the past few quarters and the Financials segment of the business (~25% of sales) is growing slower than we believe it should be. This is a company we may revisit at a later date but, for now, feel that we have better opportunities in other areas of the portfolio. |
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