Jensen Fund Trails S&P 500 Amid AI Rally

Jensen Investment Management's Quality Growth Equity Composite fund achieved a 10.94% net return in the second quarter of 2026, falling short of the S&P 500's robust 15.20% performance. This period saw US equities experience their strongest quarter in nearly six years, propelled by easing geopolitical tensions, improved financial conditions, and sustained AI infrastructure investment. AI and memory-related semiconductor stocks spearheaded this rally, while the quality-focused approach central to Jensen's strategy lagged behind lower-quality and momentum stocks.

Favorable stock selection in Communication Services and a lack of exposure to Energy and Utilities contributed positively to Jensen's quarterly performance. However, stock selection within Industrials and Information Technology detracted from relative returns. The portfolio remains strategically balanced, holding positions in quality compounders, AI beneficiaries, and defensive businesses.

The fund specifically highlighted Cintas Corporation (NASDAQ:CTAS) in its investor letter. Cintas provides uniform rental and business services to over a million businesses. The company is the largest competitor in its industry and is set to acquire UniFirst, the third-largest player. Jensen notes Cintas's significant economies of scale, strong brand, and high customer retention as key strengths. Despite recent share price weakness as investors rotated into cyclical tech names, Jensen sees an attractive entry point, anticipating continued revenue and earnings growth over the long term.