Navigating Tomorrow's Markets: Madison Aggressive Allocation Fund's Q2 2025 Strategy Revealed

As we embark on the second quarter of 2025, the Madison Aggressive Allocation Fund remains committed to proactive, dynamic portfolio management, designed to capitalize on emerging opportunities while skillfully navigating the complexities of a continuously evolving global economic landscape. This letter outlines our strategic posture and the key convictions guiding our aggressive allocation approach for the coming quarter.

The macroeconomic environment heading into Q2 2025 presents a fascinating blend of persistent trends and nascent shifts.

Inflation, while having moderated from its peak, shows signs of stickiness in certain sectors, keeping central banks globally on a cautious footing. We anticipate that interest rate policy will remain a critical determinant of market performance, with subtle shifts in forward guidance having disproportionate impacts on risk assets.

Geopolitical tensions, though ever-present, appear to be contained, allowing for a more focused assessment of economic fundamentals.

Our aggressive allocation strategy is predicated on identifying and investing in high-conviction growth themes. For Q2 2025, we are increasing our overweight position in global equities, particularly focusing on technology innovation, artificial intelligence infrastructure, and sustainable energy solutions.

We believe these sectors offer superior long-term growth potential, driven by fundamental shifts in industry and consumer behavior, rather than mere cyclical upturns.

Within fixed income, our approach remains highly selective. While we acknowledge the allure of higher yields, we are prioritizing duration management and credit quality.

Our allocation here is tactical, aiming to exploit opportunities in shorter-duration corporate bonds and select emerging market debt where fundamental economic improvements are evident, balancing risk and return in a measured fashion.

Alternative investments continue to play a crucial role in diversification and enhanced return potential.

We are particularly interested in private equity opportunities within the biotechnology and advanced manufacturing sectors, which offer exposure to transformational growth unlisted on public markets. Real assets, though a smaller component, provide a valuable hedge against persistent inflationary pressures and market volatility.

Our aggressive stance is not without its diligent risk management framework.

We employ robust portfolio analytics, stress testing, and continuous rebalancing to ensure our exposures align with our long-term objectives and risk tolerances. We remain vigilant against unforeseen market shocks, maintaining liquidity and flexibility to adapt swiftly to changing conditions.

In conclusion, the Madison Aggressive Allocation Fund approaches Q2 2025 with a clear vision and a well-defined strategy.

We are confident that our active management, coupled with our deep research capabilities and disciplined allocation process, will continue to deliver compelling results for our investors. We thank you for your continued trust and partnership as we navigate the exciting opportunities ahead.