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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Madison Mid Cap Fund 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Madison Mid Cap Fund)

Primary Source Intelligence • Q1 2025 Letter Analysis

Madison Mid Cap Fund Quarterly Analysis

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

Fund Returns

QTD-4.15%

YTD-4.15%

Annualized+10.01%

Positioning StanceConstructive

Market CapMid Cap

GeographyUS

Digest Analysis

Quick Take

"Madison Mid Cap underperformed in Q1 2025 as insurance holdings outperformed while technology and consumer discretionary lagged. The team added defensive insurer Kinsale and composite decking leader Trex while trimming on valuation."

Executive Summary

The Madison Mid Cap Fund declined 4.15% in Q1 2025, underperforming the Russell Midcap Index's 3.40% decline. Insurance companies dominated the top contributors, with Brown & Brown, W.R. Berkley, and Arch Capital benefiting from sound industry fundamentals, defensive demand profiles, and limited tariff exposure. The managers added two new positions: Kinsale Capital Group, a fast-growing excess and surplus insurer with proprietary technology advantages, and Trex, the dominant composite decking manufacturer positioned to benefit from ongoing market share conversion from wood materials. Key detractors included Ross Stores on macroeconomic concerns, Gartner facing potential government subscription cancellations, and MKS Instruments suffering from weak semiconductor demand. The team sold Armstrong World Industries after strong performance since their pandemic-era purchase and trimmed Arista Networks on valuation. Despite near-term headwinds including economic uncertainty, weak housing markets, and semiconductor cyclical pressures, the managers maintain conviction in their concentrated, quality-focused approach and see compelling long-term opportunities in companies with strong competitive positioning.

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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

68%

CautiousHigh

Moderate (68%)

The fund maintains a concentrated portfolio of 33 holdings with 47.9% in top 10 positions. Managers provide detailed thesis explanations for new additions Kinsale and Trex, size positions explicitly, and demonstrate willingness to add on weakness. The specific company analysis and clear positioning decisions indicate moderate-to-high conviction, though the diversified nature prevents a higher score.

Growth Outlook

38%

BearishBullish

Neutral (38%)

The managers acknowledge multiple headwinds including macroeconomic concerns, weak housing markets, semiconductor cyclical pressures, and economic uncertainty. However, they maintain a constructive long-term view and continue to see opportunities, preventing a more negative score.

Risk Appetite

10%

DefensiveAggressive

Defensive (10%)

The fund added two new positions and selectively added to existing holdings on weakness, indicating modest risk appetite. However, they also trimmed on valuation and sold a position, suggesting balanced positioning rather than aggressive risk-taking.

Capital Deployment

25%

De-riskingDeploying

De-risking (25%)

The managers added two new positions, increased holdings in two existing positions, sold one position, and trimmed another. This represents moderate net deployment activity with selective capital allocation rather than aggressive deployment or significant de-risking.

Forward Guidance

15%

CautiousExpansionary

Cautious (15%)

The managers continue to deploy capital selectively, adding new positions and increasing existing holdings where they see value. They express confidence in long-term prospects despite near-term challenges, indicating a mild deployment bias.

Language Signal

45%

BearishBullish

Balanced (45%)

The letter contains balanced language with both opportunity and risk discussions. Risk language includes concerns, headwinds, weak demand, and uncertainty, while opportunity language focuses on compelling valuations and long-term prospects. The balance tilts slightly toward caution.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

The managers identify multiple specific risks including macroeconomic concerns affecting consumer spending, government cost cutting, weak semiconductor demand, AI capex concerns, affordability challenges, and real estate market weakness. These risks are discussed with meaningful detail throughout the letter.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The managers found two new investment opportunities during the quarter and added to existing positions on weakness, suggesting they see selective opportunities. They describe compelling valuations in certain areas and maintain an active investment approach despite challenging conditions.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The fund emphasizes long-term capital appreciation and describes investments in terms of multi-year themes like composite decking market share conversion and long-term compounding potential. The managers held Armstrong through significant appreciation and focus on durable competitive advantages, indicating a multi-year investment horizon.