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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Mairs & Power – Power Fund 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Mairs & Power – Power Fund)

Primary Source Intelligence • Q1 2025 Letter Analysis

Mairs & Power – Power Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Mairs & Power – Power Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-4.69%

Annualized+11.35%

Positioning StanceConstructive

Market CapLarge Cap

GeographyUS

Digest Analysis

Quick Take

"AI and tech holdings declined while defensive sectors outperformed. The fund trimmed overvalued positions, initiated TSMC, and used volatility to add attractive opportunities."

Executive Summary

The Mairs & Power Growth Fund declined 4.69% in Q1 2025, slightly underperforming peers but in line with the S&P 500's -4.27% return. The postpandemic bull market came to a halt as sweeping new tariffs rattled markets and stoked inflation fears, while DeepSeek's AI breakthrough questioned massive AI investments and valuations. Stock selection was a headwind as AI-related holdings like Microsoft, nVent, and NVIDIA pulled back, though the fund remains excited about AI prospects while reducing positions due to lofty valuations. Defensive sectors like Healthcare and Utilities helped relative performance, as did strong Financials holdings including JPMorgan, Fiserv, and Visa, though these positions were trimmed due to stretched valuations. The fund initiated a position in Taiwan Semiconductor Manufacturing Company, attracted by its dominant market position and attractive valuation after the tech selloff. Despite near-term volatility from policy uncertainty, the fund maintains its long-term focus on companies with durable business models and reasonable valuations, using market disruption to add positions at attractive entry points.

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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

75%

CautiousHigh

High Conviction (75%)

The manager demonstrates high conviction in their investment philosophy and approach, making decisive moves like initiating TSMC and trimming overvalued positions. They express clear views on AI prospects, valuation concerns, and their long-term strategy, showing strong belief in their process despite market uncertainty.

Growth Outlook

30%

BearishBullish

Bearish (30%)

The manager expresses clear concerns about the economic outlook, citing tariff uncertainty, potential stagflation, declining consumer and business confidence, and a 'fog-like uncertainty pervading the economic outlook.' However, they also note some economic resilience with healthy labor markets and improved consumer spending, preventing a more negative score.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

The fund has been reducing positions in overvalued AI and financial stocks while maintaining a cautious but opportunistic stance. They are trimming stretched positions but also adding to attractive opportunities, indicating a balanced approach with slight defensive bias rather than aggressive risk-taking.

Capital Deployment

10%

De-riskingDeploying

De-risking (10%)

The fund shows mixed deployment activity - reducing positions in overvalued AI and financial stocks while initiating new positions like TSMC and adding to existing opportunities. The net effect appears slightly positive as they are selectively deploying capital at attractive valuations despite trimming elsewhere.

Forward Guidance

45%

CautiousExpansionary

Neutral (45%)

While acknowledging uncertainty and expecting more volatility ahead, the manager maintains commitment to their long-term investment philosophy and expresses willingness to add positions at attractive entry points. The guidance is cautious but not overly pessimistic, with emphasis on patience and selectivity.

Language Signal

35%

BearishBullish

Bearish (35%)

Language includes negative terms like 'screeching halt,' 'rattled markets,' 'stoked fears,' and 'fog-like uncertainty,' but is balanced with positive language about 'opportunities,' 'attractive entry points,' and confidence in their investment approach. The net balance leans slightly negative due to macro concerns.

Perceived Risk

70%

Low RiskElevated

Elevated Risk (70%)

The manager identifies significant risks including tariff-driven stagflation, policy uncertainty, declining confidence measures, and potential economic slowdown. They explicitly discuss systemic risks from trade wars and their impact on inflation and growth, indicating high awareness of current risk environment.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

While acknowledging market challenges, the manager sees selective opportunities emerging from volatility, noting they have been 'patiently waiting for attractive entry points' and that 'volatility brings opportunities.' The correction has made some valuations more attractive, suggesting moderate opportunity density.

Time Horizon

85%

Short-TermLong-Term

Decade+ (85%)

The manager consistently emphasizes their 'long-term focus' and commitment to investing in companies that will 'benefit our clients over the long term.' They trust management teams to focus on innovation and execution to emerge stronger, indicating a patient, multi-year investment horizon.