Institutional Research Archive

Hedge Fund Letters Archive

Browse the world's most comprehensive database of hedge fund investor letters, sorted by recent quarter. Access primary source research from leading institutional managers.

Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

Home Letters Funds Account

Madison Sustainable Equity Fund 2023 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Madison Sustainable Equity Fund)

Primary Source Intelligence • Q1 2023 Letter Analysis

Madison Sustainable Equity Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Madison Sustainable Equity Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+5.68%

Positioning StanceConstructive

GeographyUS

Digest Analysis

Quick Take

"Madison Sustainable Equity underperformed in Q1 due to quality factor headwinds and defensive positioning. Strong performance from semiconductor and cloud holdings offset banking sector weakness."

Executive Summary

Madison Sustainable Equity Fund delivered 4.52% returns in Q1 2023, trailing the S&P 500's 7.5% gain due to narrow market leadership and underperformance of quality stocks. The fund's defensive positioning with overweights in Consumer Staples and Healthcare hurt performance while underweights to Technology and Communication Services were headwinds. Top contributors included digitally-oriented holdings like Analog Devices, Alphabet, Qualcomm, and TE Connectivity, while US Bancorp, Eli Lilly, and Danaher were detractors. The managers added to US Bancorp during the banking crisis and established a new position in Oracle while eliminating ADP. Key risks include persistent inflation, slowing economic growth, and banking sector stress following SVB's failure. However, the team remains cautiously optimistic about the remainder of 2023, expecting the Fed to be largely done with rate hikes and using market volatility to upgrade the portfolio with attractively valued sustainable companies positioned for long-term growth.

Unlock Full Institutional Analysis

Sign in or create a free account to unlock full commentary, extracted equity pitches, and direct outbound manager source links with your 3 quarterly credits.

Sign In to Unlock (3 Free Credits)View Pricing Tiers

Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

68%

CautiousHigh

Moderate (68%)

Fund holds 38 concentrated positions with clear thesis for each holding. Managers provide detailed fundamental analysis for individual names and make decisive portfolio changes (adding USB, initiating ORCL, eliminating ADP). Strong conviction evident in specific position sizing and willingness to add during volatility.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Manager expresses cautious optimism about remainder of 2023, noting Fed likely done with rate hikes and companies adjusting to environment. However, acknowledges multiple headwinds including sticky inflation, slowing growth, and ongoing volatility until inflation improves.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Portfolio maintains defensive positioning with overweights to Consumer Staples and Healthcare. Selectively adding during volatility (US Bancorp, Oracle) but overall stance is cautious with focus on quality companies that can navigate macro headwinds.

Capital Deployment

25%

De-riskingDeploying

De-risking (25%)

Moderate deployment activity with new Oracle position established and additions to US Bancorp during banking crisis. However, also eliminated ADP position, suggesting selective rotation rather than aggressive net deployment. No cash level changes disclosed.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Manager plans to use volatility to upgrade portfolio with attractively valued companies. Selective deployment bias evident with new Oracle position and adding to US Bancorp, but overall approach remains measured and quality-focused.

Language Signal

10%

BearishBullish

Bearish (10%)

Language is balanced with mix of cautious terms (volatility, headwinds, slowing) and constructive phrases (well positioned, attractive, upgrade). Risk language slightly outweighs bullish signals with emphasis on macro uncertainties.

Perceived Risk

75%

Low RiskElevated

Elevated Risk (75%)

Manager identifies multiple specific macro risks including sticky inflation, slowing economic growth, banking sector stress, and geopolitical tensions. Detailed discussion of earnings pressure and market volatility expectations. Risk assessment is comprehensive and central to the letter.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

Manager sees selective opportunities emerging from market volatility, specifically mentioning using this period to upgrade portfolio with attractively valued companies. Opportunities appear sector-specific rather than broad-based, requiring selectivity.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Clear multi-year investment horizon with focus on long-term growth and companies positioned for sustainable competitive advantages. Holdings like TE Connectivity and Oracle discussed in context of multi-year growth drivers. No urgency for near-term catalyst realization.