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 Donaldson Company, Inc. (NYSE:DCI). Donaldson Company, Inc. (NYSE:DCI) is a leading provider of filtration systems and replacement parts operating through its Mobile Solutions, Industrial Solutions, and Life Sciences segments. On May 11, 2026, Donaldson Company, Inc. (NYSE:DCI) closed at $85.59 per share. One-month return of Donaldson Company, Inc. (NYSE:DCI) was -4.09%, and its shares gained 21.72% over the past 52 weeks. Donaldson Company, Inc. (NYSE:DCI) has a market capitalization of $9.91 billion.
Jensen Quality Mid Cap Fund stated the following regarding Donaldson Company, Inc. (NYSE:DCI) in its Q1 2026 investor letter:
“During the quarter, we meaningfully reduced the Portfolio’s positions in Donaldson Company, Inc. (NYSE:DCI) and The Clorox Company (CLX). DCI manufactures both liquid and air filtration systems for heavy duty trucks, tractors, excavators, and aircraft. The company’s filtration systems are also used in factory air cleaning systems and industrial gas turbines. We trimmed DCI’s weighting in the Portfolio primarily for valuation reasons.”
Donaldson Company, Inc. (NYSE:DCI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 34 hedge fund portfolios held Donaldson Company, Inc. (NYSE:DCI) at the end of the fourth quarter, up from 25 in the previous quarter. While we acknowledge the risk and potential of Donaldson Company, Inc. (NYSE:DCI) 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 Donaldson Company, Inc. (NYSE:DCI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Donaldson Company, Inc. (NYSE:DCI) and shared the list of cheap DRIP stocks to buy. 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.
