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In the initial quarter of 2026, the Madison Small Cap Fund engaged in substantial portfolio rebalancing, a continuation of the dynamic activity seen in the preceding quarter. The fund strategically introduced four new companies to its holdings: ICU Medical, Matador Resources, PCOR, and SiteOne Landscape Supply. Simultaneously, the fund concluded its long-term investment in Globus Medical, a decision prompted by the company's notable market capitalization growth to $12 billion. These adjustments underscore the fund's proactive approach to identifying and capitalizing on emerging opportunities within the small-cap market while managing its existing successful positions.

A core element of Madison Small Cap Fund's strategy revolves around meticulous selection and timely adjustments. The decision to invest in ICU Medical (ICUI) was driven by the launch of their advanced high-volume pump, which is anticipated to enhance customer retention and generate additional revenue through its expanded connectivity features. This move highlights an investment philosophy that values innovation and technological advancement as key drivers of future growth and market penetration.

Similarly, the fund's entry into SiteOne Landscape Supply (SITE) demonstrates a recognition of strong market positioning and consistent growth. SiteOne, controlling a substantial 18% of the $26 billion landscaping industry, has maintained a low double-digit compound annual growth rate in revenue over recent years. This suggests an investment thesis centered on market leadership, sustainable growth, and the potential for continued expansion within a robust sector.

Furthermore, the strategic divestment from Globus Medical underscores the fund's discipline in realizing profits from mature, successful investments. After a multi-year period of significant appreciation, Globus Medical's market valuation reached a point where it no longer aligned with the fund's small-cap focus. This demonstrates a commitment to maintaining the fund's core mandate and reallocating capital to new opportunities that better fit its investment criteria.

The first quarter of 2026 proved to be a period of dynamic portfolio management for the Madison Small Cap Fund. The fund adeptly navigated market conditions by initiating investments in promising companies like ICU Medical and SiteOne Landscape Supply, both of which exhibit strong growth catalysts and market leadership. Concurrently, the fund judiciously exited its position in Globus Medical, ensuring that capital was optimally deployed in line with its small-cap mandate. This strategic agility reflects a robust investment process aimed at maximizing returns for its investors.