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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Driven by life sciences and enterprise software gains, while initiating a position in CME Group and divesting CDW Corporation and Honeywell Aerospace."
The Madison Large Cap Fund (Class I) returned 1.53% net of fees in the third quarter of 2026, trailing the S&P 500 Index return of 2.30%, while advancing 7.11% net of fees year-to-date. Broader equity markets faced an under-the-surface rotation as rising interest rates and elevated energy costs pressured cyclical and interest-rate-sensitive equities, resulting in steep drawdowns across small and mid-cap indices. The fund maintained an active share of 86.92% across a concentrated portfolio of 30 holdings, preserving a disciplined quality bias alongside a cash allocation of 4.83%. Macroeconomic headwinds were defined by climbing bond yields, persistent inflation, and shifting market leadership away from rate-sensitive segments. Simultaneously, broad investor focus remained concentrated on capital expenditure for artificial intelligence data center infrastructure. The investment team noted historical precedents where capital cycles inevitably peak, while highlighting market mispricing where 'asset-light' business models have been indiscriminately penalized by AI-disruption fears, opening up selective entry points. Portfolio turnover was highlighted by initiating a new position in CME Group at roughly 20x forward earnings, capitalizing on mispriced concerns over perpetual futures and regulatory shifts. Conversely, the fund completely exited hardware and software solutions provider CDW Corporation after rising reinvestment requirements eroded profit growth, and liquidated Honeywell Aerospace following chronic supply chain disruptions that broke the original investment thesis.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
Growth Outlook
Risk Appetite
Capital Deployment
Forward Guidance
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Perceived Risk
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