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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Madison Investors Fund 2023 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Madison Investors Fund)

Primary Source Intelligence • Q3 2023 Letter Analysis

Madison Investors Fund Quarterly Analysis

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

Fund Returns

QTD-1.3%

YTD+14.04%

Annualized+10.94%

Positioning StanceConstructive

Market CapLarge Cap

GeographyUS

Digest Analysis

Quick Take

"Madison Investors outperformed in Q3 2023, driven by AI beneficiary Alphabet and insurance leader Arch Capital. The fund added Texas Instruments and Agilent at attractive valuations while trimming positions that reached fair value."

Executive Summary

Madison Investors Fund declined 1.3% in Q3 2023, outperforming the S&P 500's 3.3% decline. Top contributors included Alphabet, which benefited from AI integration and strong cloud growth, and Arch Capital, which continues to benefit from favorable insurance market conditions. The fund initiated two new positions during the quarter: Texas Instruments, a leading analog semiconductor company with strong competitive advantages and exposure to growing automotive and industrial digital transformation trends, and Agilent Technologies, a life science tools company purchased at a discount during a period of investor pessimism. The managers sold three positions that reached fair value, including Adobe due to emerging AI competition concerns. Bottom performers included Dollar Tree, which is investing heavily in growth initiatives that are pressuring near-term margins, and several companies experiencing cyclical demand moderation. The portfolio remains focused on high-quality companies with strong competitive moats, attractive reinvestment opportunities, and secular growth tailwinds, purchased at attractive valuations.

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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 concentrated positioning (29 holdings with 47% in top 10), detailed fundamental analysis of individual holdings, and willingness to make meaningful position changes. The managers provide specific, falsifiable investment theses for new purchases and clear rationale for sales, indicating strong conviction in their investment process.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The managers express cautious optimism about specific sectors and long-term trends while acknowledging near-term challenges. They see attractive market conditions continuing in insurance and growth opportunities in technology sectors, but also note challenging retail environments and cyclical demand moderation in some areas.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

The fund actively deployed capital into two new positions (Texas Instruments and Agilent) while harvesting gains from three positions that reached fair value. This suggests a balanced approach - willing to take risk on attractively valued opportunities while maintaining discipline on valuation.

Capital Deployment

15%

De-riskingDeploying

De-risking (15%)

The fund engaged in capital rotation during the quarter, selling three positions and purchasing two new ones. This represents active portfolio management but not net deployment of additional capital, as proceeds from sales funded new purchases. The activity suggests selective rebalancing rather than aggressive deployment or de-risking.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

The managers indicate continued selectivity in deployment, focusing on companies trading below intrinsic value. They express confidence in long-term themes but acknowledge near-term headwinds, suggesting a measured approach to future positioning.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is balanced with both positive and cautious elements. Positive terms include 'confident,' 'attractive opportunities,' and 'strong competitive advantages,' while cautious language includes 'challenging environment,' 'uncertainty,' and 'moderating demand.'

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

The managers acknowledge several specific risks including challenging retail environments, cyclical demand moderation, and competitive threats from AI in some sectors. However, these are discussed as manageable near-term headwinds rather than systemic threats, and the managers express confidence in their long-term investment themes.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

The managers demonstrate selective opportunity identification, finding two new attractive investments during the quarter while maintaining discipline on valuation. They reference finding companies trading 'below intrinsic value' and 'at a discount,' suggesting a reasonable but selective opportunity set requiring patience and analysis.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The fund demonstrates a multi-year investment horizon, discussing long-term secular trends, competitive advantages that compound over time, and willingness to hold through near-term volatility. The managers reference 'long-term opportunity,' 'early stages' of trends, and confidence in companies despite short-term headwinds, indicating a patient capital approach typical of 3-5 year investment horizons.