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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance offset software weakness."
The Madison Small Cap Fund was flat in Q1 2026, up 0.10% versus Russell 2000's 0.89% gain. The managers remain optimistic about their strategy as value outperformed growth and speculative names declined. Technology investments led performance despite software weakness, with semiconductor names like Viavi benefiting from AI data center demand. The fund initiated four new positions including ICU Medical, Matador Resources, Procore Technologies, and SiteOne Landscape Supply, while selling Chord Energy and Globus Medical. Software experienced a massive selloff with 25% declines, but managers see opportunities in AI-resilient businesses like Workiva. Defense investments performed well, highlighted by Leonardo DRS benefiting from submarine and missile defense programs. Healthcare investments declined on AI disruption fears, though managers believe these concerns are overexaggerated. Looking ahead, they expect continued volatility from the Iran war, potential consumer challenges, and midterm elections, but view this environment as favorable for their patient, opportunistic approach focused on quality franchises.
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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: Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Growth Outlook
Market outlook remains low conviction: Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Risk Appetite
Risk appetite posture is moderate conviction: Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Forward Guidance
Forward guidance signal: Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Language Signal
Tone analysis indicates very low conviction language: Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Opportunity Density
Opportunity density index indicates moderate conviction actionable entry points. Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
Time Horizon
Investment time horizon reflects a moderate conviction orientation. Madison Small Cap Fund managers capitalized on AI disruption fears to invest in quality software and healthcare companies at attractive valuations. Strong semiconductor performance...
