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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Madison Mid Cap Fund 2024 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Madison Mid Cap Fund)

Primary Source Intelligence • Q1 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

Annualized+10.01%

Digest Analysis

Quick Take

"Madison Mid Cap Fund outperformed in Q1 2024, driven by strong insurance and manufacturing holdings. Added quality regional bank Cullen/Frost at attractive valuations while completing strategic portfolio repositioning."

Executive Summary

Madison Mid Cap Fund delivered strong first quarter performance, gaining 9.63% versus 8.60% for the Russell Midcap Index. The portfolio benefited from strong performance across insurance companies, with Arch Capital and Brown & Brown advancing on favorable industry conditions and solid organic growth. Manufacturing names like PACCAR and Carlisle Companies contributed significantly, driven by strong margins and operational efficiency. Technology holdings Arista Networks continued benefiting from core business growth and emerging AI opportunities. The fund made selective portfolio changes, adding high-quality regional bank Cullen/Frost Bankers at attractive valuations amid sector headwinds, while completing the sale of Brookfield Corp to concentrate in its asset management spin-off. Take-Two Interactive was sold after strong appreciation ahead of upcoming game launches. Detractors included Liberty Broadband facing cable industry headwinds, Dollar Tree with Family Dollar turnaround challenges, and several names facing margin pressures. The concentrated portfolio of 29 holdings maintains focus on quality companies with strong competitive positions and experienced management teams.

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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%)

High conviction evidenced by concentrated 29-position portfolio with top 10 holdings representing 50.8% of assets. Managers provide specific thesis explanations for individual holdings and demonstrate long-term knowledge of companies like Cullen/Frost followed for two decades. Clear position sizing and rationale for additions and sales.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The letter shows mild positive sentiment with managers finding selective opportunities like Cullen/Frost at attractive valuations amid sector headwinds, but no broad market commentary suggests a neutral to slightly positive outlook.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Portfolio positioning shows selective risk-taking with one new addition and two sales, maintaining concentrated exposure. The addition of a regional bank during sector stress shows moderate risk appetite but overall positioning appears measured.

Capital Deployment

48%

De-riskingDeploying

Net Neutral (48%)

Minimal net deployment activity with one addition and two sales representing portfolio rotation rather than net capital deployment. No cash level changes mentioned, suggesting neutral deployment stance.

Forward Guidance

10%

CautiousExpansionary

Cautious (10%)

Limited forward guidance provided. Managers express optimism about Liberty Broadband despite current headwinds and see earnings growth potential for Cullen/Frost, but no clear deployment bias is indicated.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is balanced with positive terms like 'strong performance,' 'attractive valuations,' and 'optimistic' offset by discussions of headwinds, disappointing margins, and underperformance. Slightly more constructive than negative overall.

Perceived Risk

35%

Low RiskElevated

Moderate Risk (35%)

Moderate risk acknowledgment with mentions of macro headwinds affecting regional banks, cable industry competition, and various company-specific challenges. Risks are discussed but not central to the letter's narrative.

Opportunity Density

45%

ScarceAbundant

Selective (45%)

Selective opportunity environment evidenced by limited new additions and strategic sales. Managers found one attractive opportunity in regional banks but overall activity suggests measured selectivity rather than abundant opportunities.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Multi-year investment horizon demonstrated by following Cullen/Frost for two decades before investing, maintaining positions through volatility like Liberty Broadband, and focusing on long-term competitive advantages and management quality rather than near-term catalysts.