Arch Capital (ACGL) Fell after Strong Q1

Madison Investments, an investment advisor, released its “Madison Large Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Class Y) increased 3.1%, compared to a 10.9% gain for the S&P 500 index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Madison Large Cap Fund highlighted stocks such as Arch Capital Group Ltd. (NASDAQ:ACGL). Arch Capital Group Ltd. (NASDAQ:ACGL) is an insurance company that offers insurance, reinsurance, and mortgage insurance products. The one-month return of Arch Capital Group Ltd. (NASDAQ:ACGL) was -3.91%, and its shares lost 9.34% of their value over the last 52 weeks. On July 21, 2025, Arch Capital Group Ltd. (NASDAQ:ACGL) stock closed at $87.55 per share, with a market capitalization of $32.81 billion.

Madison Large Cap Fund stated the following regarding Arch Capital Group Ltd. (NASDAQ:ACGL) in its second quarter 2025 investor letter:

“The bottom five detractors for the quarter were Fiserv, Arch Capital Group Ltd. (NASDAQ:ACGL), Copart, Alcon, and Progressive. Our insurance holdings, including Arch Capital Group and Progressive, which performed strongly in the first quarter, underperformed the strong equity market in the second quarter. Both businesses continue to perform well overall, although their rates of growth are slowing as we enter the later innings of the insurance pricing cycle.”

Is Arch Capital Group Ltd. (ACGL) the Best Insurance Stock for the Long Term?

A close-up image of an insurance policy with hands standing firmly on top, conveying security.

Arch Capital Group Ltd. (NASDAQ:ACGL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Arch Capital Group Ltd. (NASDAQ:ACGL) at the end of the first quarter, which was 41 in the previous quarter. While we acknowledge the risk and potential of Arch Capital Group Ltd. (NASDAQ:ACGL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Arch Capital Group Ltd. (NASDAQ:ACGL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Arch Capital Group Ltd. (NASDAQ:ACGL) and shared the list of most undervalued financial stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.