Madison Investments, an investment advisor, released its first-quarter 2026 investor letter for the “Madison Mid Cap Fund”. The Madison Mid Cap Fund (Class I) declined 4.28% in the quarter, compared to the Russell Midcap Index’s 1.29% return. A copy of the letter can be downloaded here. The first quarter saw a market shift from tech stocks to companies in the physical economy driven by a better economic outlook and AI disruption fears. This transition favored the ‘HALO trade’ (Heavy Assets, Low Obsolescence), benefiting resilient businesses. In March, geopolitical conflicts and rising commodity prices heightened inflation concerns, leading to strong performance in Energy and Materials sectors, while Utilities also gained. This trend posed challenges for the Madison Mid Cap Fund due to its limited exposure to these sectors. In this environment, the fund identifies opportunities in high-quality, underappreciated businesses and is actively investing in them. Please review the Fund’s top five holdings to gain insights into its key selections for 2026.
In its first-quarter 2026 investor letter, Madison Mid Cap Fund highlighted Ross Stores, Inc. (NASDAQ:ROST) as one of its leading contributors. Ross Stores, Inc. (NASDAQ:ROST) is a US-based off-price retail apparel and home fashion store operator. On June 29, 2026, Ross Stores, Inc. (NASDAQ:ROST) stock closed at $208.83 per share. One-month return of Ross Stores, Inc. (NASDAQ:ROST) was -6.70%, and its shares gained 60.68% over the past 52 weeks. Ross Stores, Inc. (NASDAQ:ROST) has a market capitalization of $66.99 billion.
Madison Mid Cap Fund stated the following regarding Ross Stores, Inc. (NASDAQ:ROST) in its Q1 2026 investor letter:
“The top five contributors for the quarter were MKS, Ross Stores, Inc. (NASDAQ:ROST), Teledyne Technologies, PACCAR, and Labcorp. Ross Stores posted one of its strongest quarters of same-store-sales growth in quite some time and management sees sales momentum continuing into 2026. While the consumer environment is a tailwind for all off-price retailers, Ross is outperforming given a variety of in-store and marketing initiatives that are resonating with consumers.”
Ross Stores, Inc. (NASDAQ:ROST) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 83 hedge fund portfolios held Ross Stores, Inc. (NASDAQ:ROST) at the end of the first quarter, up from 71 in the previous quarter. While we acknowledge the risk and potential of Ross Stores, Inc. (NASDAQ:ROST) 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 Ross Stores, Inc. (NASDAQ:ROST) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Ross Stores, Inc. (NASDAQ:ROST) and shared billionaire Steven Cohen’s top dividend stock picks. 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.
