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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Madison Mid Cap Fund 2024 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Madison Mid Cap Fund)

Primary Source Intelligence • Q2 2024 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

YTD+4.91%

Annualized+10.01%

Digest Analysis

Quick Take

"Madison Mid Cap Fund's quality-focused strategy delivered resilient performance despite Q2 headwinds. Strong insurance and AI infrastructure holdings offset weakness in consumer-sensitive names."

Executive Summary

Madison Mid Cap Fund declined 4.30% in Q2 2024, slightly underperforming the Russell Midcap Index's 3.35% decline, but maintained positive 4.91% year-to-date returns. The fund's concentrated approach focuses on 30 high-quality mid-cap holdings with strong competitive positions. Top contributors included Arch Capital Group, which continues producing superior results with favorable pricing trends, and AI infrastructure beneficiaries Amphenol and Arista Networks. Key detractors were Dollar Tree, facing low-end consumer weakness and Family Dollar strategic review concerns, and interest rate-sensitive names like CarMax and Thor Industries. Portfolio activity included adding Teledyne Technologies, a well-managed sensor manufacturer trading at attractive levels due to temporary sales weakness. The managers also added to Brown-Forman and Thor Industries during periods of concern while trimming Arista Networks and Carlisle Companies after strong performance led to elevated valuations. The team maintains confidence in their quality-focused, value-oriented approach despite near-term market challenges.

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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

72%

CautiousHigh

High Conviction (72%)

The fund demonstrates high conviction through its concentrated 30-stock portfolio with clear position sizing (top 10 holdings represent 48.9% of assets). Managers provide detailed, specific rationale for each holding and explicitly state confidence in management decisions and long-term prospects. Active position management with adds and trims shows decisive portfolio behavior.

Growth Outlook

10%

BearishBullish

Bearish (10%)

The letter presents a balanced view with limited explicit market commentary. While acknowledging various sector-specific challenges (consumer weakness, interest rate impacts), the managers maintain a constructive long-term perspective without expressing strong directional market views.

Risk Appetite

25%

DefensiveAggressive

Defensive (25%)

The fund maintains full investment with selective position adjustments. Adding new positions and increasing existing holdings during weakness suggests moderate risk appetite, though trimming elevated positions shows disciplined risk management.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

Moderate net deployment activity with one new position added (Teledyne) and two existing positions increased (Brown-Forman, Thor Industries), partially offset by two trims (Arista Networks, Carlisle Companies). No cash level changes reported, suggesting this represents rotation rather than significant net deployment.

Forward Guidance

15%

CautiousExpansionary

Cautious (15%)

The managers express confidence in their long-term approach and specific holdings but provide limited explicit forward guidance. Their actions suggest selective deployment bias with continued focus on quality companies at attractive valuations.

Language Signal

5%

BearishBullish

Bearish (5%)

Language is predominantly balanced with equal discussion of positive contributors and negative detractors. Terms like 'encouraged,' 'confident,' and 'solid outlook' are offset by concerns about 'weakness,' 'headwinds,' and 'difficult markets.'

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

The managers acknowledge multiple sector-specific risks including consumer weakness, interest rate impacts on affordability, and industry demand concerns. However, these are presented as manageable challenges rather than systemic threats, with risks discussed in context of specific holdings rather than broad market concerns.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The managers demonstrate selective opportunity identification, adding a new quality holding (Teledyne) during temporary weakness and increasing positions in other quality names facing short-term challenges. This suggests they see reasonable opportunities in their quality-focused universe, though selectivity is emphasized.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The letter emphasizes long-term prospects repeatedly, with managers expressing confidence in multi-year outlooks for holdings despite near-term challenges. References to 'long-term prospects,' 'emerge in a stronger position,' and willingness to add during temporary weakness indicate a patient, multi-year investment horizon.