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 Lululemon Athletica Inc. (NASDAQ:LULU). Lululemon Athletica Inc. (NASDAQ:LULU) designs, distributes, and retails athletic apparel, footwear, and accessories. On May 12, 2026, Lululemon athletica inc. (NASDAQ:LULU) closed at $125.13 per share. One-month return of Lululemon athletica inc. (NASDAQ:LULU) was -23.11%, and its shares lost 60.38% over the past 52 weeks. Lululemon athletica inc. (NASDAQ:LULU) has a market capitalization of $14.68 billion.
Jensen Quality Mid Cap Fund stated the following regarding Lululemon athletica inc. (NASDAQ:LULU) in its Q1 2026 investor letter:
“The Investment Team also liquidated the Portfolio’s remaining positions in Lululemon athletica inc. (NASDAQ:LULU). Regarding LULU, the continued deterioration in our view of their underlying business fundamentals caused us to exit the position.”
Lululemon athletica inc. (NASDAQ:LULU) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 78 hedge fund portfolios held Lululemon athletica inc. (NASDAQ:LULU) at the end of the fourth quarter, up from 42 in the previous quarter. While we acknowledge the risk and potential of Lululemon athletica inc. (NASDAQ:LULU) 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 Lululemon athletica inc. (NASDAQ:LULU) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Lululemon athletica inc. (NASDAQ:LULU) and shared the list of stocks big short’s Michael Burry is betting on. 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.
