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AI Fuels Mid-Cap Surge: Fund Navigates Volatility
23 Sep
Summary
- Second-quarter 2026 investor letter details market performance and fund strategy.
- AI enthusiasm drove U.S. stock market indices to their strongest second-quarter since 2020.
- Madison Mid Cap Fund's Class Y returned 8.58% vs. Russell Midcap's 13.83% in Q2 2026.
Madison Investments shared its second-quarter 2026 investor letter for the Madison Mid Cap Fund, noting significant market performance fueled by AI enthusiasm. U.S. stock indices achieved their strongest second-quarter results since 2020, largely due to artificial intelligence.
Nine of the top ten companies in the Russell Midcap Index have direct ties to the AI data-center boom, with some experiencing substantial growth. However, the letter cautions that current AI stock winners may not maintain their positions and valuations could be unsustainable.
Broader economic and geopolitical risks, including federal policy, inflation, and international volatility, were also cited. The fund's Class Y portfolio returned 8.58% in the quarter, trailing the Russell Midcap's 13.83% gain. Madison Investments believes its portfolio offers strong long-term growth prospects and resilience.
