Here’s Why Mairs & Power Balanced Fund Continues to Hold UnitedHealth Group (UNH)

Mairs & Power, an investment advisor, released the third-quarter 2025 investor letter for the “Mairs & Power Balanced Fund.” A copy of the letter can be downloaded here. As we move into 2025, the market’s concentration persists, with a few dominant mega-cap stocks tied to artificial intelligence (AI) driving most of the favorable outcomes. The fund returned 6.47% in the first nine months of 2025. The fund underperformed the benchmark composite indexes (60% S&P 500 Total Return Index and 40% Bloomberg U.S. Government/Credit Bond Index), which were up 11.35% and the Morningstar Moderate Allocation peer group, which rose 10.73%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Mairs & Power Balanced Fund highlighted stocks such as UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was -1.25%, and its shares lost 36.33% of their value over the last 52 weeks. On December 10, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $328.37 per share, with a market capitalization of $293.13 billion.

Mairs & Power Balanced Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its third quarter 2025 investor letter:

“The Fund’s overweight to Health Care, combined with its exposure to specific names in the sector, negatively impacted relative performance during the first nine months of 2025. UnitedHealth Group Incorporated (NYSE:UNH) lagged during the period as the company experienced higher than expected medical loss ratios which led to a significant decline in earnings expectations. The company is likely to fix its pricing issues for new members, while it has some work ahead to improve its Medicare Advantage managed care business. In addition, the company experienced an abrupt management change when it announced that former CEO Stephen Hemsley would return to the role to “steady the ship.” The company still has an enviable earnings profile and historically has demonstrated an ability to manage through temporary disturbances. We continue to hold our UnitedHealth position and will look to add when valuation opportunities present themselves.”

The Case for UnitedHealth Group (UNH) as a Cash-Rich Dividend Stock

UnitedHealth Group Incorporated (NYSE:UNH) is in the 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 140 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the third quarter, which was 159 in the previous quarter. In the third quarter of 2025, UnitedHealth Group Incorporated (NYSE:UNH) generated revenues exceeding $113 billion, representing a 12% year-over-year growth due to the expansion of domestic memberships. While we acknowledge the risk and potential of UnitedHealth Group Incorporated (NYSE:UNH) 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 UnitedHealth Group Incorporated (NYSE:UNH) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered UnitedHealth Group Incorporated (NYSE:UNH) and shared the list of best dividend stocks hedge funds are buying. SCCM Value Equity Strategy acquired a position in UnitedHealth Group Incorporated (NYSE:UNH) during Q3 2025. In addition, please check out our hedge fund investor letters Q3 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.