Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. As the overall stock market continues to widen, mid-caps are not experiencing the same. The high-quality value stocks continue to underperform, while speculative, low-quality, and momentum-driven sections of the market have received significant attention, and the valuation gaps are widening further. Against this backdrop, the Fund’s portfolio lost 1.92% in the quarter, versus the Russell Midcap® Value Index’s 1.42% return. The underperformance of its Quality Value holdings hit the performance of the strategy in the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its fourth-quarter 2025 investor letter, Heartland Mid Cap Value Fund highlighted stocks such as MarketAxess Holdings Inc. (NASDAQ:MKTX). MarketAxess Holdings Inc. (NASDAQ:MKTX) is a leading electronic trading platform operator. On January 12, 2026, MarketAxess Holdings Inc. (NASDAQ:MKTX) stock closed at $170.10 per share. One-month return of MarketAxess Holdings Inc. (NASDAQ:MKTX) was -5.22%, and its shares lost 21.48% of their value over the last 52 weeks. MarketAxess Holdings Inc. (NASDAQ:MKTX) has a market capitalization of $6.356 billion.
Heartland Mid Cap Value Fund stated the following regarding MarketAxess Holdings Inc. (NASDAQ:MKTX) in its fourth quarter 2025 investor letter:
“Financials. In the quarter, we initiated a new position in MarketAxess Holdings Inc. (NASDAQ:MKTX), a Quality Value company that owns and operates the largest e-trading platform in the U.S. for corporate bonds.
Bonds are largely traded over the counter, unlike equities or listed derivatives, which are traded on exchanges. Operating a trading platform is all about scale, where volume determines profitability. Rising customer activity can be a virtuous circle that begets more trading as depth of liquidity improves for all platform participants. Improved liquidity, in turn, drives down trading costs, which then attracts even more volume. Scaled trading platforms can be extremely profitable. MKTX’s operating margin, for example, exceeds 40% while gross margin can exceed 75%.
Though MarketAxess pioneered electronic bond trading, prior management rested on their laurels as peers launched new trading protocols that gained market share. MKTX’s bread and butter is providing leading market depth in single-bond trading. But the industry has witnessed the rapid adoption of “portfolio trading” (PT), where asset owners can bundle a portfolio of bonds and receive better pricing versus trading on a bond-by-bond basis. Tight corporate bonds credit spreads as of late have exacerbated the shift to PT…” (Click here to read the full text)
MarketAxess Holdings Inc. (NASDAQ:MKTX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 47 hedge fund portfolios held MarketAxess Holdings Inc. (NASDAQ:MKTX) at the end of the third quarter, the same as in the previous quarter. MarketAxess Holdings Inc. (NASDAQ:MKTX) posted fourth-quarter 2025 revenue of $209 million, reflecting a moderate year-over-year increase. While we acknowledge the risk and potential of MarketAxess Holdings Inc. (NASDAQ:MKTX) 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 MarketAxess Holdings Inc. (NASDAQ:MKTX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered MarketAxess Holdings Inc. (NASDAQ:MKTX) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q4 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.
