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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Jensen Investment 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Jensen Investment)

Primary Source Intelligence • Q3 2026 Letter Analysis

Jensen Investment Quarterly Analysis

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

Fund Returns

QTD+1.72%

YTD+1.5%

Annualized+10.03%

Positioning StanceCONSTRUCTIVE

Market CapMid Cap

GeographyUS

Digest Analysis

Quick Take

"Persistent inflation and hawkish monetary policy favor companies with durable pricing power, high returns on capital, and contracted recurring revenue over capital-intensive artificial intelligence infrastructure plays vulnerable to political pushback."

Executive Summary

During the third quarter of 2026, the Jensen Quality Mid Cap Fund Class I shares posted a net-of-fees return of 1.72%, outperforming its benchmark, the MSCI US Mid Cap 450 Index, which declined 4.08%. Year-to-date, the fund has returned 1.50% net of fees versus 9.70% for the index. The portfolio maintained an active share of 96.33% and held 35 stocks, with equities representing 98.54% of net assets and cash at 1.24%. Relative outperformance was primarily driven by stock selection in Industrials and an overweight allocation in Health Care, along with zero-weight positioning in Real Estate and Utilities. The investment team highlights an increasingly complex macro environment characterized by reaccelerating inflation, sustained higher interest rates from the Federal Reserve, and political volatility ahead of U.S. midterm elections. A major theme is the potential deceleration in capital spending for artificial intelligence infrastructure. Growing voter scrutiny over power consumption, electricity bills, and water usage presents regulatory and permitting risks for data centers, while potential initial public offerings of large language model providers may expose capital-intensive economics and temper speculative market exuberance. Portfolio activity was governed by strict valuation and business quality criteria. The team initiated a new position in semiconductor metrology leader Nova Limited, funded by liquidations of The Clorox Company, due to persistent operational challenges, and Fair Isaac Corporation, amid rising regulatory headwinds in mortgage credit scoring. A position in Crown Holdings was trimmed to optimize risk-reward following price strength. Top contributors included Veeva Systems and Broadridge Financial Solutions, while IDEXX Laboratories and Aon PLC detracted.

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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

62%

CautiousHigh

Moderate (62%)

The portfolio holds 35 distinct mid-cap equities with top holdings sized between 3.5% and 4.9% of net assets, accompanied by clear competitive moat theses for major positions. However, the moderate breadth of names and incremental rebalancing prevent a higher concentration score.

Growth Outlook

45%

BearishBullish

Neutral (45%)

The management team notes an increasingly complex backdrop marked by reaccelerating inflation, higher-for-longer policy rates, and midterm election volatility. While constructive on fundamental stock-picking opportunities, broad index headwinds keep overall optimism tempered.

Risk Appetite

58%

DefensiveAggressive

Balanced (58%)

Equity exposure remains high at 98.54% of fund assets with a low cash balance of 1.24%, yet stock selection focuses heavily on defensive, cash-generative franchises with below-market beta (0.81) and minimal cyclical leverage.

Capital Deployment

52%

De-riskingDeploying

Net Neutral (52%)

The fund maintained an essentially fully invested posture with cash at 1.24%, executing one new position initiation alongside two complete liquidations and one partial trim to optimize portfolio risk-return.

Forward Guidance

60%

CautiousExpansionary

Neutral (60%)

Managers express readiness to opportunistically redeploy capital on market volatility while selectively trimming fully valued holdings, as illustrated by recent reallocations into metrology and away from regulatory-impaired names.

Language Signal

52%

BearishBullish

Balanced (52%)

Bullish terminology surrounding market leadership, competitive advantages, and long-term compounding balances cautionary language regarding stubborn inflation, interest rate pressure, and political scrutiny on AI data centers.

Perceived Risk

68%

Low RiskElevated

Elevated Risk (68%)

Identified risks receive extensive discussion, including Middle East conflicts, oil price spikes, persistent inflation, extended data center construction timelines, and heightened election-driven regulatory scrutiny.

Opportunity Density

55%

ScarceAbundant

Selective (55%)

Opportunities are selectively found in quality compounders experiencing temporary sector mispricings, such as software relief rallies and misunderstood acquisitions, though elevated interest rates constrain broad market bargains.

Time Horizon

85%

Short-TermLong-Term

Decade+ (85%)

The investment strategy explicitly adheres to multi-year horizons, focusing on long-term compounders, enduring economic moats, and 5- to 10-year earnings track records without being dictated by short-term market noise.