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 FactSet Research Systems Inc. (NYSE:FDS). FactSet Research Systems Inc. (NYSE:FDS) is a financial data company that provides integrated financial information and analytical applications for the investment community. On May 11, 2026, FactSet Research Systems Inc. (NYSE:FDS) closed at $219.19 per share. One-month return of FactSet Research Systems Inc. (NYSE:FDS) was -1.95%, and its shares lost 51.45% over the past 52 weeks. FactSet Research Systems Inc. (NYSE:FDS) has a market capitalization of $7.99 billion.
Jensen Quality Mid Cap Fund stated the following regarding FactSet Research Systems Inc. (NYSE:FDS) in its Q1 2026 investor letter:
“The third largest detractor from Portfolio performance during the quarter was FactSet Research Systems Inc. (NYSE:FDS), a provider of economic and financial data to asset managers, investment bankers, and other financial professionals. We believe the stock underperformed due to investor concerns that the company’s business, like BR and G, could be disrupted by AI. Historically, we have had a favorable opinion of the company’s business model due to its solid market position and high recurring revenue streams stemming from customer switching costs and multi-year client contracts. Despite these strengths, the position was liquidated during the quarter as we believe AI-native companies represent a real threat to FDS’s business, due to much of the underlying data supporting FDS’s product offerings being publicly available and therefore accessible to new competitors. In addition, we believe it will be relatively easy for AI-native companies to replicate the analytics FDS provides to its clients. Lastly, a reduction in employment levels across its customer base due to the increased use of AI could pressure revenues given the company’s seat based subscription sales model.”
FactSet Research Systems Inc. (NYSE:FDS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 48 hedge fund portfolios held FactSet Research Systems Inc. (NYSE:FDS) at the end of the fourth quarter, up from 37 in the previous quarter. In the second quarter of fiscal 2026, FactSet Research Systems Inc.’s (NYSE:FDS) revenue grew 7.1% year over year to $611 million, or 6.8% organically, excluding impact from foreign exchange and M&A. While we acknowledge the risk and potential of FactSet Research Systems Inc. (NYSE:FDS) 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 FactSet Research Systems Inc. (NYSE:FDS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered FactSet Research Systems Inc. (NYSE:FDS) and shared Ariel Investments insights on the company. 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.
