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Madison Mid Cap Is One to Watch

Greg Carlson

Greg Carlson: A fund on our radar right now is Madison Mid Cap, a mid-cap growth fund that's been run by Richard Eisinger since 1998. He and comanager Haruki Toyama, who joined the fund in 2015, focus on companies with durable competitive advantages that generate high returns on capital as well as strong free cash flows. The fund is benchmarked to the Russell Midcap Index; however, it ends up in the growth portion of the Morningstar Style Box because of its emphasis on higher quality firms.

It still tends to be more valuation-sensitive, though, than its typical category peer. Thus, the fund tends to hold up better in downturns where growth stocks are punished while just participating in strong rallies. Over the long term, its total returns are solid, while its risk-adjusted returns are excellent, particularly versus its Russell Midcap benchmark.

Its fees are a bit above average; however, the fund's asset base is still fairly small at $300 million. We're keeping an eye on this fund.