| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.25% | -1.77% | -1.77% |
The Mairs & Power Balanced Fund returned -1.77% in Q1 2026, outperforming its benchmark by 0.91% due to equity outperformance. Escalating Middle East conflict disrupted energy markets, driving oil prices 77% higher and reintroducing inflation risks. The fund benefited from positioning in defensive sectors like Utilities and quality companies in Technology and Industrials. Key contributors included Littelfuse, Entegris, and Toro on improved outlooks, while Abbott Laboratories and UnitedHealth Group detracted due to nutrition segment deceleration and Medicare reimbursement pressures respectively. The fund added positions in Palo Alto Networks and Waste Management while eliminating Salesforce. Information Technology sector was largest contributor through stock selection, particularly benefiting from AI-driven data center demand. The fund's emphasis on business quality, valuation discipline, and risk management helped navigate market volatility caused by geopolitical uncertainty. Fixed income performance matched the index as security selection offset corporate bond preference during spread widening.
Focus on companies with durable competitive advantages and reasonable valuations while maintaining long-term discipline through market volatility and external shocks.
Much depends on how long the conflict persists and how deeply it affects commodity markets and global trade. A quick resolution could limit economic fallout, while longer disruption could result in more lasting challenges. Corporate earnings outlook remains bright spot with broadening beyond large technology companies. Fed has reverted to cautious stance with expectations for rate cuts downgraded.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 29 2026 | 2026 Q1 | ABT, ADP, CRM, ENTG, FAST, FISV, LFUS, PANW, TTC, TXN, UNH, V, WEC, WM, XEL | AI, Balanced, energy, healthcare, inflation, semiconductors, technology, Utilities |
PANW WM |
Balanced fund outperformed benchmark despite Middle East conflict driving energy prices and inflation concerns. Strong stock selection in Technology and defensive positioning in Utilities offset Healthcare headwinds. Added cybersecurity exposure via Palo Alto Networks while eliminating Salesforce. Fund's quality-focused, valuation-disciplined approach delivered relative outperformance during geopolitically-driven market volatility. |
| Jan 18 2026 | 2025 Q4 | AMZN, CASY, ENTG, FI, GOOG, HD, HON, HRL, JPM, LLY, MSI, NEOG, PFG, RHHBY, ROK, TECH, TGT, TRV, TXN, UNH, USB, WEC, WFC | AI, Balanced, earnings, financials, healthcare, rates, technology | - | Mairs & Power Balanced Fund underperformed in 2025 due to insufficient AI exposure and company-specific issues at Fiserv and UnitedHealth. Managers see AI entering higher-risk phase but expect lower rates to support economy. Strategy remains focused on durable competitive advantages and long-term technology beneficiaries while maintaining domestic preference amid geopolitical shifts. |
| Oct 24 2025 | 2025 Q3 | ABT, AMZN, ENTG, FI, FUL, GOOG, HON, JNJ, JPM, MDT, MSI, NEOG, PFG, TECH, TGT, TXN, UNH, USB, WEC, WFC | AI, Balanced, financials, healthcare, technology, underperformance, Utilities, value | - | Mairs & Power Balanced Fund underperformed due to avoiding AI momentum stocks that drove 75% of market returns. Large holdings UnitedHealth and Fiserv detracted from performance. The Fund added Amazon and WEC Energy while maintaining disciplined value approach focused on durable competitive advantages. Managers remain patient and selective, believing their long-term strategy will outperform over full market cycles. |
| Jul 18 2025 | 2025 Q2 | ABT, AMZN, ENTG, FI, FUL, GOOG, HON, JNJ, JPM, MDT, MSI, NEOG, PFG, TECH, TGT, TXN, UNH, USB, WEC, WFC | AI, Balanced, financials, healthcare, long-term, technology, Utilities, value |
UNH FI AMZN WEC |
Balanced Fund underperformed due to lack of exposure to AI mega-caps driving market returns. UnitedHealth and Fiserv were key detractors while new positions in Amazon and WEC Energy show selective deployment. Current market concentration in expensive stocks creates risk when momentum shifts. Fund maintains valuation discipline and long-term focus despite short-term headwinds from narrow market leadership. |
| May 1 2025 | 2025 Q1 | ABT, DIS, FIS, FUL, GOOG, HD, LFUS, MDT, MSI, QCOM, RHHBY, TECH, TTC, TXN, V, WEC | balanced fund, Defensive, healthcare, inflation, technology, Trade Policy, Utilities, value | - | Mairs & Power Balanced Fund outperformed in Q1 2025 through defensive positioning amid trade policy uncertainty. Underweights to mega-cap tech and overweights to healthcare/utilities drove returns. Added WEC Energy as new utility holding. Expects continued volatility from tariff-induced stagflation risks while maintaining disciplined approach of investing in quality companies at reasonable valuations. |
| Dec 31 2024 | 2024 Q4 | AMP, AVGO, AXP, CASY, FISV, GGG, JPM, LFUS, LLY, MDT, MSI, NEOG, NTRS, NVDA, PG, ROK, TTC, UNH, UPS, WFC | AI, Balanced, financials, healthcare, industrials, semiconductors, small caps, technology | - | Balanced fund underperformed in 2024 due to underexposure to AI-driven mega cap technology stocks, though Financials provided strong contribution. Managers are selectively adding to high-conviction positions at attractive valuations, particularly in small and mid-cap stocks trading at discounts. Political uncertainty around inflation policies creates near-term volatility but may reveal competitive advantages in dynamic environment. |
| Sep 30 2024 | 2024 Q3 | ABT, AMP, CASY, CHRW, ECL, FI, HRL, HSY, JPM, LFUS, LLY, LOW, MSI, NEOG, NVDA, PG, ROK, TECH, TTC, UPS | Balanced, Bonds, consumer, healthcare, industrials, rates, technology | - | Mairs & Power's balanced fund lagged benchmarks due to underexposure to mega-cap tech, particularly missing NVIDIA's AI-driven rally. The Fed's September rate cut creates a more favorable environment for the fund's diversified approach focused on quality companies with competitive advantages. New positions in consumer and financial names position the portfolio for potential market broadening. |
| Jul 23 2024 | 2024 Q2 | AAPL, AMP, AMZN, CASY, ECL, ENTG, FAST, GGG, GOOGL, HRL, HSY, JPM, LFUS, LLY, MDT, META, MSFT, NVDA, NVT, TECH | Balanced, dividends, healthcare, industrials, rates, technology, value | - | Mairs & Power's balanced fund underperformed due to underexposure to AI megacaps while maintaining disciplined value approach. Industrial and healthcare overweights hurt performance amid economic slowing. Managers added quality names like Casey's and P&G while trimming expensive positions. Cautiously optimistic on Fed rate cuts benefiting broader market and smaller companies. |
| Apr 15 2024 | 2024 Q1 | AMP, AMZN, CASY, DIS, ENTG, FI, HSY, JPM, LFUS, LLY, META, MSFT, NVDA, PG, QCOM, TECH, TGT, UNH, USB, WFC | AI, Balanced, dividends, financials, healthcare, semiconductors, technology, value | - | Balanced fund returned 5.66% in Q1, focusing on durable competitive advantages and AI beneficiaries. Healthcare holdings faced mixed results while semiconductor cycle recovery benefited select positions. Added three new quality names and increased fixed income allocation. Positioned for market broadening beyond mega-cap tech through small-cap and Old Economy companies leveraging AI for productivity gains. |
| Jan 28 2024 | 2023 Q4 | AAPL, AXP, CRM, ECL, ENTG, FI, GGG, GOOGL, HRL, HSY, LLY, MSFT, NTRS, NVDA, RHHBY, SHW, TECH, TTC, TXN, V | Balanced, Consumer Staples, financials, growth, healthcare, inflation, technology, value | - | Balanced fund underperformed in 2023 due to underweight mega-cap tech positioning during AI-driven rally. Fund trimmed winners, added to laggards, positioning for value and mid-cap rotation in 2024. Fed rate cuts and broadening earnings growth expected to benefit diversified approach after narrow market leadership dominated 2023 performance. |
| Sep 30 2023 | 2023 Q3 | ABT, CRM, ECL, ENTG, GGG, GOOGL, HON, HRL, LLY, MSFT, MSI, TECH, TTC, TXN, USB, XEL | AI, Balanced, fixed income, growth, inflation, rates, technology, value | - | Balanced fund underperformed due to narrow tech rally and absence of Apple/NVIDIA holdings. Rising rates hurt bonds but create better forward opportunities. Managers increased fixed income allocation and selectively added to quality names like Honeywell and Texas Instruments. Key focus on AI beneficiaries and companies navigating labor market changes while maintaining long-term investment discipline. |
| Jun 30 2023 | 2023 Q2 | AAPL, AMZN, CRM, ECL, ENTG, FISV, GOOGL, GRCO, HD, HRL, LLY, META, MSFT, NTRS, NVDA, TSLA, TTC, TXN, USB, XEL | AI, Balanced, inflation, Regional Banks, technology, value | - | Balanced fund underperformed due to narrow AI-driven rally in mega-cap tech stocks it doesn't own. Microsoft, the largest holding, gained 40% on AI leadership. Added to Texas Instruments and Xcel Energy during weakness. Regional bank exposures hurt performance. Maintains positive long-term tech outlook despite stretched valuations and mixed economic signals. |
| Feb 2 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
EnergyMiddle East conflict disrupted global energy markets, driving oil prices 77% higher and reintroducing inflation risks. Energy shocks may alter economic path but fund maintains no energy exposure, which negatively impacted relative performance. |
Oil Energy Middle East Inflation Commodities |
AITechnology companies rush to invest in data center projects to power advances in Generative AI, benefiting holdings like Littelfuse. AI proliferation should prove necessity of cybersecurity services rather than supplant them. |
AI Data Centers Technology Cybersecurity Infrastructure | |
SemiconductorsImproved spending outlook for semiconductor sector benefited holdings like Entegris and Texas Instruments. Increased demand for data center products as technology companies invest in AI infrastructure. |
Semiconductors Data Centers Technology Spending | |
CybersecurityAdded new position in Palo Alto Networks as variety of cyber threats continues to grow and spending on IT security is poised to increase. AI proliferation should prove necessity of cybersecurity services. |
Cybersecurity IT Security Palo Alto Threats | |
UtilitiesBuild-up in exposure to Utilities aided relative performance as defensive sector overweight helped in choppy market. Fund owns Xcel Energy and WEC Energy Group which should benefit from stable earnings growth. |
Utilities Defensive Stable Earnings Regulatory | |
| 2025 Q4 |
AIAI and increasing market concentration took center stage in 2025, driving technology infrastructure spending and market narratives. McKinsey projects $7 trillion in capital expenditures needed worldwide by 2030 for AI infrastructure. The fund believes they are entering a transition period for AI with signals of higher risk phase due to flood of capital and unusual financing structures. |
Infrastructure Technology Valuations Capital Expenditures |
FinancialsThe Financials sector contributed to relative underperformance due to adverse stock selection, particularly Fiserv which dramatically underperformed. However, JPMorgan Chase and Wells Fargo outperformed due to improving credit conditions and deregulation trends benefiting largest banks. Wells Fargo benefited from lifted consent decrees. |
Banks Credit Regulation Performance | |
RatesThe Federal Reserve cut rates in the fourth quarter with cooling inflation across CPI, PPI, and PCE measures. Lower interest rates are expected to continue in 2026, which typically takes around a year to work through the economy and could support small business hiring and consumer confidence. |
Federal Reserve Inflation Economic Policy | |
TechnologyInformation Technology sector was the largest contributor to equity underperformance during 2025. The fund lacked sufficient exposure to AI-oriented companies that witnessed outsized performance. Several technology holdings underperformed including Entegris, Motorola Solutions, and Texas Instruments due to various company-specific challenges. |
Semiconductors Software Performance | |
| 2025 Q3 |
AIAI-related stocks have dominated market performance since ChatGPT's 2022 launch, with 40 AI-related S&P 500 stocks accounting for 75% of market returns. The AI and data-center buildout is fueling a multi-year capital expenditure cycle extending beyond semiconductors to power generation, transmission, and thermal management components. However, the Fund largely lacks exposure to these high-performing AI companies, contributing to underperformance. |
Data Centers Semiconductors Infrastructure Capital Expenditure |
FinancialsThe Fund maintains an overweight stance in Financials which aided performance, with JPMorgan Chase and Wells Fargo outperforming due to improving credit conditions and deregulation trends. Wells Fargo benefited from lifted consent decrees, positioning it better for future growth. However, the Fund trimmed U.S. Bancorp due to declining competitive advantage and expects this to weigh on long-term growth. |
Banks Credit Deregulation Wells Fargo JPMorgan | |
UtilitiesThe Fund initiated a new position in WEC Energy due to its stable service area with balanced regulatory environment and Wisconsin territory seeing considerable AI-related data center investment. This provides tailwinds to rate base growth and long-term earnings growth. The utilities sector contributed positively to relative performance during the period. |
Data Centers Rate Base Regulated Wisconsin | |
HealthcareThe Fund's overweight to Healthcare negatively impacted performance, with UnitedHealth experiencing higher medical loss ratios and abrupt CEO change. BioTechne underperformed due to uncertainty around biopharmaceutical funding environment from federal cuts and weak venture capital. However, medical device companies like Abbott, Johnson & Johnson, and Medtronic outperformed. |
Medical Devices Managed Care Biotechnology Medicare | |
| 2025 Q2 |
AIAI-related stocks have driven 75% of market returns since ChatGPT launch, with 40% of capital expenditures linked to AI. The Fund lacks exposure to mega-cap AI leaders but sees durable momentum in AI infrastructure including data centers, power generation, and components. |
Data Centers Infrastructure Semiconductors Cloud Technology |
Data CentersInvestment in infrastructure to power, cool, and connect a data-intensive economy is fueling a multi-year capital expenditure cycle extending beyond semiconductors to power generation, transmission, distribution, and thermal management components. |
Infrastructure Power Components Real Estate Technology | |
UtilitiesWEC Energy was added for its stable regulatory environment and Wisconsin service territory seeing considerable AI-related data center investment, providing tailwinds to rate base growth and long-term earnings growth. |
Regulated Utilities Data Centers Rate Base Infrastructure Growth | |
FinancialsJPMorgan and Wells Fargo outperformed due to improving credit conditions and deregulation trends benefiting large banks. Wells Fargo benefited from lifted consent decrees improving growth positioning, while US Bancorp was trimmed due to declining competitive advantage. |
Banks Credit Deregulation Regional Banks Money Center Banks | |
| 2025 Q1 |
Trade PolicyTariff uncertainty in March caused equity declines while benefiting fixed income through flight to safety. Prospects of prolonged trade war with China raise concerns about reigniting inflation and slowing economic growth. Tariffs function as a tax that businesses must absorb or pass to consumers, likely creating upward pressure on prices and inflation. |
Tariffs China Inflation Trade War Economic Growth |
InflationInflation has receded from pandemic highs but remains stubborn at 2.8% and is a key source of consumer frustration. Tariffs are expected to create additional near-term upward pressure on prices and inflation as businesses pass costs to consumers. The dynamic of slowing growth and rising inflation creates stagflation concerns. |
Inflation Stagflation Consumer Prices Federal Reserve Interest Rates | |
UtilitiesThe Fund started a new position in WEC Energy Group, a Wisconsin-based public utility operating in one of the most balanced regulatory environments. WEC provides a quasi-fixed income holding with limited return profile within regulatorily defined returns. Utilities led the market during the quarter as traditionally defensive stocks outperformed. |
Utilities Regulatory Environment Defensive Fixed Income Wisconsin | |
| 2024 Q4 |
AIThe fund acknowledges AI as a key driver of mega cap technology performance in 2024, though their diversified approach left them underexposed to this narrow leadership group. UnitedHealth is aggressively deploying AI technology across its business to create enduring operating efficiencies. JPMorgan has been investing heavily in AI deployment across its businesses, positioning it well for outsized earnings growth compared to peers. |
Technology Automation Efficiency Healthcare Banking |
Semiconductor CycleThe semiconductor cycle outside of AI-driven names has yet to turn, impacting the fund's semiconductor holdings. Negative trends in consumer electronics, industrial, and automotive sectors affected holdings like Littelfuse. The fund remains underweight the narrow mega cap leadership group that drove much of 2024's performance. |
Technology Cyclical Electronics Industrial Automotive | |
Small CapsSmall cap banks are an exception to consistent downward revisions for small and mid-cap stocks in 2025. The S&P Small Cap 600 is trading at a 29% discount to the S&P 500 and below its 10-year average. If growth improves, the valuation discount with large companies would likely dissipate, with potential for less regulation and increased small business confidence supporting this narrowing. |
Valuation Discount Growth Regulation Banking | |
| 2024 Q3 |
RatesThe Federal Reserve cut its key lending rate by half a percentage point in September, with potential for additional cuts in November and December. Lower rates are expected to benefit smaller companies by reducing borrowing costs and improving earnings growth prospects. |
Interest Rates Fed Policy Rate Cuts Monetary Policy Small Cap |
AIMuch of the market excitement relates to opportunities from generative artificial intelligence technology development and deployment. However, the fund's diversified approach left it underexposed to this narrow leadership group, particularly missing NVIDIA. |
Artificial Intelligence Technology NVIDIA Mega Cap Leadership | |
GLP1Both Hormel and Hershey have been impacted by expectations that GLP-1 usage will affect future consumption of their products. Eli Lilly's Zepbound weight loss treatment has driven significant outperformance for that stock. |
Weight Loss Pharmaceuticals Consumer Impact Eli Lilly Food Companies | |
| 2024 Q2 |
AIThe fund acknowledges the AI-fueled technology boom surrounding the largest companies but maintains valuation discipline. While remaining positive on long-term AI prospects, the fund's diversified approach left it underexposed to the narrow AI leadership group that drove market returns. |
Technology Valuation Growth Innovation |
Semiconductor CycleThe bottom of the semiconductor cycle appears to be in as improving demand outlook and normalization of inventory levels benefited holdings such as Entegris, Texas Instruments, and Qualcomm. However, negative trends in consumer electronics and industrial sectors impacted Littelfuse. |
Semiconductors Inventory Demand Recovery | |
GLP1Both Hormel and Hershey have been impacted by expectations that GLP-1 usage will affect future consumption of their products. The optimism for Eli Lilly surrounding its Zepbound branded weight loss treatment helped it outperform meaningfully. |
Weight Loss Pharmaceuticals Consumer Impact | |
RatesThe Fed's progress in balancing economic growth with inflation increases the likelihood of rate cuts in coming months. Rate reductions could bring greater balance to the market and boost earnings growth for smaller companies that need to borrow to fund growth. |
Federal Reserve Interest Rates Small Caps Borrowing | |
| 2024 Q1 |
AIThe fund sees significant opportunities with companies that will benefit from AI implementation and plans to continue improving the portfolio accordingly. AI could help companies relieve labor shortages, boost capital utilization, and make more efficient use of raw materials and supply chains. The fund has invested in pick and shovel providers of AI that are crafting tools for businesses to utilize. |
Artificial Intelligence Productivity Technology Implementation Tools |
Semiconductor CycleThe bottom of the semiconductor cycle appears to be in, and renewed optimism around semiconductor companies benefited holdings such as Entegris and Qualcomm. However, negative trends in consumer electronics, industrial, and automotive markets adversely impacted Littelfuse during the quarter. |
Semiconductors Cycle Recovery Electronics Automotive | |
| 2023 Q4 |
AIThe fund notes investor enthusiasm for the emerging artificial intelligence market, which aided mega cap technology leadership. Microsoft has an emerging leadership position in AI, while Salesforce benefited from strong demand for AI offerings. |
Artificial Intelligence Enterprise Software Technology Innovation Growth |
InflationInflation was the central theme throughout 2023, with its gradual slowdown driving market performance. The PCE price index fell 0.1% in November, the first decline since April 2020, with core inflation dropping to 1.9% annualized. |
PCE Federal Reserve Interest Rates Economic Policy Monetary Policy | |
GLP1Eli Lilly performed very well due to enthusiasm for its Type 2 diabetes drug Tirzepatide, which received FDA approval for obesity treatment. The Consumer Staples sector was unfavorably impacted by uncertainty related to expected growth of obesity drugs and their effect on future food demand. |
Obesity Diabetes Pharmaceuticals Healthcare FDA | |
| 2023 Q3 |
AIArtificial intelligence is creating efficiencies and driving investment opportunities, particularly in technology companies. The fund sees AI as crucial for creating workforce efficiencies amid changing labor dynamics. Microsoft's leadership in AI helped propel it to all-time highs this year. |
Technology Efficiency Microsoft Enterprise Automation |
RatesRising interest rates significantly impacted markets and investment decisions throughout the quarter. The 10-year Treasury yield rose from 3.88% to 4.57%, creating negative returns for many fixed income indices. Higher rates are making fixed income more attractive with corporate bond yields between 5-6%. |
Treasury Fixed Income Corporate Bonds Duration Yield | |
InflationCore inflation rose at 2.2% annualized rate over summer, close to Fed's 2% target. However, union activism and tight labor markets could keep inflation higher than desired. Rising gasoline prices drove much of the increased consumer spending, while inflation-adjusted household incomes fell. |
Fed Labor Wages Consumer Spending Energy | |
| 2023 Q2 |
AIArtificial intelligence has driven significant outperformance in technology stocks, particularly benefiting mega-cap names like Microsoft, Alphabet, Amazon, and Nvidia. The fund maintains a favorable long-term view on technology given growth in AI, automation, and cloud computing, though valuations appear over-extended near-term. |
Technology Microsoft Nvidia Automation Cloud |
InflationHeadline inflation slowed to 3.0% annually in June, though core inflation excluding food and energy remained elevated at 4.8%. The Federal Reserve continues battling inflation with Chairman Powell signaling at least two more rate increases as they pursue their 2% target. |
Federal Reserve Interest Rates Core Inflation Monetary Policy | |
Regional BanksThe fund experienced negative impact from regional bank exposures, including a small holding in Silicon Valley Bank which failed during the quarter. After thorough analysis, management maintains confidence that other regional bank holdings are well positioned to avoid similar events. |
Credit Stress Banking Silicon Valley Bank Financial Services |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 29, 2026 | Fund Letters | Mairs & Power - Balanced Fund | PANW | Palo Alto Networks | Software - Infrastructure | Systems Software | Bull | NASDAQ | AI, cybersecurity, Enterprise security, growth, Information Security, Software, technology | Login |
| Apr 29, 2026 | Fund Letters | Mairs & Power - Balanced Fund | WM | Waste Management | Waste Management | Environmental & Facilities Services | Bull | New York Stock Exchange | defensive, environmental services, Industrials, infrastructure, Landfills, Recycling, waste management | Login |
| Sep 30, 2025 | Fund Letters | Mairs & Power - Balanced Fund | AMZN | Amazon | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | AWS, Cloud computing, Digital transformation, e-commerce, Equity, market share gains, Retail distribution | Login |
| Sep 30, 2025 | Fund Letters | Mairs & Power - Balanced Fund | WEC | WEC Energy Group | Utilities | Electric Utilities | Bull | NYSE | AI infrastructure, data centers, Electric Utilities, Equity, rate base growth, regulated utility, Wisconsin | Login |
| Sep 30, 2025 | Fund Letters | Mairs & Power - Balanced Fund | UNH | UnitedHealth Group | Health Care | Health Care Plans | Bull | NYSE | Equity, Health Care Plans, health insurance, managed care, Medical Loss Ratios, Medicare Advantage | Login |
| Sep 30, 2025 | Fund Letters | Mairs & Power - Balanced Fund | FI | Fiserv | Information Technology | Data Processing & Outsourced Services | Bull | NASDAQ | Cloud-based Platform, digital payments, Equity, Fintech, Merchant Acceptance, payment processing, SaaS | Login |
| TICKER | COMMENTARY |
|---|---|
| LFUS | Littelfuse (LFUS) performed particularly well due to increased demand for its data center products as technology companies rush to invest in projects to power advances in Generative AI. |
| ENTG | Both Entegris (ENTG) and Texas Instruments (TN) also added meaningfully to relative performance due to an improved spending outlook for the semiconductor sector. |
| TTC | Toro (TTC) performed well on the back of strong sales from its professional business and an uplift in earnings guidance as the company's product offerings are gaining traction. |
| ABT | Abbott Laboratories (ABT) impacted performance as guidance in the nutrition business flagged and growth decelerated elsewhere. |
| UNH | UnitedHealth Group (UNH), which has had a series of missteps over the past year, received further pressure as the Center for Medicare & Medicaid Services released a flat increase for 2027 versus the roughly 5% level for 2026. UnitedHealth management noted a need to cut benefits to offset this reimbursement shock, but the anticipation is that this will result in volume loss and thus lower profitability. |
| PANW | Palo Alto provides information security products and services for organizations of all sizes. As the variety of cyber threats continues to grow, spending on IT security is poised to increase, and Palo Alto provides best-in-class tools to help protect companies. Our research strongly suggests AI proliferation should only prove the necessity of the company's services, not supplant what Palo Alto provides. |
| WM | Waste Management collects, transports, recycles, and disposes residential, commercial, industrial, and municipal waste. The company sets itself apart thanks to its scale, route density, and landfill/recycling facilities. |
| CRM | After experiencing a loss of confidence in the company's ability to sustain its competitive advantage, we sold the Fund's remaining holdings in Salesforce (CRM). |
| TXN | Both Entegris (ENTG) and Texas Instruments (TN) also added meaningfully to relative performance due to an improved spending outlook for the semiconductor sector. |
| FAST | Fastenal (FAST) delivered relative outperformance as the company continues to gain significant market share, posting double-digit revenue growth even as end markets remain sluggish. |
| ADP | Offsetting this, fears around AI impacting software pricing and jobs into the future negatively affected ADP (ADP). We reassessed our position on ADP and continue to be confident in the company's position going forward. |
| XEL | The Fund owns both Xcel Energy (XEL) and WEC Energy Group (WEC) which we believe should benefit from stable and visible earnings growth from attractive service areas with favorable regulatory oversight. |
| WEC | The Fund owns both Xcel Energy (XEL) and WEC Energy Group (WEC) which we believe should benefit from stable and visible earnings growth from attractive service areas with favorable regulatory oversight. |
| FISV | Fiserv (FISV) continues to face issues with its Clover product, a cloud-based payment platform, which has caused decelerating growth. |
| V | Finally, Visa (V) had a difficult quarter with U.S. volume growth down, geopolitical volatility impacting currency exchange, and regulatory uncertainty. |
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