Madison Investments, an investment advisor, released its second-quarter 2026 investor letter for the "Madison Mid Cap Fund". You can download a copy of the letter here. U.S. stock market indices posted their strongest second-quarter performance since 2020, driven largely by enthusiasm for Artificial Intelligence.
Nine of the ten largest companies in the Russell Midcap Index benefit directly from the AI data-center boom; one rose 257%, while the others gained between 17% and 136%. A small group of AI-related stocks has powered most of the index's year-to-date returns, reversing the broader market participation seen earlier this year. Although AI will reshape society and the economy, today's apparent winners may not remain so, and current valuations may prove unsustainable.
Other risks include unpredictable federal policy, partisan gridlock, expanding deficits, inflation, higher interest rates, stretched consumer finances, and geopolitical volatility. The Class Y of the Fund returned 8.58% in the quarter compared to Russell Midcap's 13.83% return. The firm believes its Mid Cap portfolio combines strong long-term growth prospects with resilience amid potential challenges.
Please review the Fund's top five holdings to gain insights into its key selections for 2026. In its second-quarter 2026 investor letter, Madison Mid Cap Fund highlighted Verisk Analytics, Inc. (NASDAQ:VRSK) as a newly added position. Verisk Analytics, Inc. (NASDAQ:VRSK) is a US-based technology company that offers data analytics and technology solutions to the insurance industry.
On September 22, 2026, Verisk Analytics, Inc. (NASDAQ:VRSK) closed at $171.94 per share. Over the past month, Verisk Analytics, Inc. (NASDAQ:VRSK) declined 8.48%, but its shares are down 29.23% over the past year. Verisk Analytics, Inc. (NASDAQ:VRSK) has a market capitalization of $22.37 billion, and its stock has traded within a 52-week range of $155.94 to $253.35.
Madison Mid Cap Fund stated the following regarding Verisk Analytics, Inc. (NASDAQ:VRSK) in its Q2 2026 investor letter: "We purchased shares in Verisk Analytics, Inc. (NASDAQ:VRSK), the dominant provider of data and analytics to property and casualty insurers in the U.S. Insurers use Verisk's proprietary data to assess and price risks, and to manage claims. Because its data is so embedded in its clients' daily workflows, it's often the last thing that an insurance client will cut back on, even in weak insurance markets.
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