Jensen Investment Management, an asset management company based in the US, released its first-quarter 2025 investor letter for the “Jensen Quality Mid Cap Fund”. A copy of the letter is available to download here. The Jensen Quality Mid Cap Fund aims for long-term growth. The Fund returned -2.53% in Q1 2026, lagging the 0.60% return for the MSCI US Mid Cap 450 Index. Mid-cap stocks were flat in the quarter due to inflation, war, high energy prices, and cautious consumer spending. Rapid AI investment growth impacted the Index, boosting some stocks but hurting others, especially software and business services stocks facing AI disruption concerns. Energy stocks surged after the Iran War, challenging performance. The fund’s process focuses on high-quality companies with a 15%+ ROE for ten years, indicating sustained advantages. Quarterly performance benefited from underweights in the Financials and Communications Services and higher exposure to the Industrials sector, while underweight exposure in the Energy and Utilities sectors and overweight in Consumer Discretionary hurt performance. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Jensen Quality Mid Cap Fund highlighted stocks like Fair Isaac Corporation (NYSE:FICO). Fair Isaac Corporation (NYSE:FICO) is a technology company that develops analytic, software, and digital decision-making technologies and services. The one-month return of Fair Isaac Corporation (NYSE:FICO) was 8.41%, and its shares lost 48.88% of their value over the last 52 weeks. On May 11, 2026, Fair Isaac Corporation (NYSE:FICO) stock closed at $1,092.00 per share, with a market capitalization of $25.32 billion.
Jensen Quality Mid Cap Fund stated the following regarding Fair Isaac Corporation (NYSE:FICO) in its Q1 2026 investor letter:
“Other notable detractors from quarterly performance included Fair Isaac Corporation (NYSE:FICO) and Equifax, Inc. (EFX). Fair Isaac Corporation is the owner and licensor of the ubiquitous FICO credit score used in lending decisions, and Equifax is a provider of credit, income, and employment data to lenders, social services agencies, and hiring personnel. We believe both stocks underperformed primarily due to investor concerns about potential AI disruption. FICO’s stock was also likely impacted by the Federal Housing Finance Agency’s recent decision to allow VantageScore, a competing credit score, to be used in underwriting mortgages sold to Fannie Mae and Freddie Mac. We believe investor concerns related to scoring models are due to the technological costs associated with transitioning to a new model, as well as the comfort they have developed with the FICO score’s ability to predict defaults over decades and across various credit cycles.”
Fair Isaac Corporation (NYSE:FICO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 81 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the fourth quarter, up from 72 in the previous quarter. Fair Isaac Corporation (NYSE:FICO) announced second-quarter fiscal 2026 revenue of $692 million, reflecting a 39% year-over-year growth. While we acknowledge the risk and potential of Fair Isaac Corporation (NYSE:FICO) 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 Fair Isaac Corporation (NYSE:FICO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Fair Isaac Corporation (NYSE:FICO) and shared the list of best stocks to buy with “wide moats”. In addition, please check out our hedge fund investor letters Q1 2026 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.
