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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, high-quality dividend stocks to protect capital."
For Q3 2025, the Madison Dividend Income Fund returned +3.9% (Class Y), underperforming the S&P 500 (+8.1%). Year-to-date, the fund returned +8.5% compared to the S&P 500's +14.8%. Managers John Brown and Drew Justman argue that the broad market faces growing risks, notably a 22x forward P/E multiple and high index concentration in AI-related stocks (45% of S&P 500). To insulate capital, the fund emphasizes defensive characteristics, including an absolute portfolio dividend yield of 2.52%, average dividend growth of 6% over the past year, and a high-quality portfolio where 90% of holdings are rated A- or better.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Growth Outlook
Market outlook remains low conviction: The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Risk Appetite
Risk appetite posture is low conviction: The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Forward Guidance
Forward guidance signal: The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Language Signal
Tone analysis indicates above average conviction language: The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Perceived Risk
Perceived risk level is evaluated as high conviction. The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Opportunity Density
Opportunity density index indicates above average conviction actionable entry points. The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
Time Horizon
Investment time horizon reflects a high conviction orientation. The Madison Dividend Income Fund is taking a cautious stance on the broader S&P 500 due to extreme AI concentration and rich valuations, positioning instead in historically cheap, ...
