Ross Stores (ROST) outperformed amid a market shift toward physical economy stocks in Q1 2026, per investor letter data.
Ross Stores (ROST) emerged as a top contributor for the Madison Mid Cap Fund in Q1 2026, closing at $208.83 on June 29. The stock rose 60.68% over the past year despite a one-month decline of 6.70%, reflecting investor preference for off-price retailers in a favorable consumer environment.
The broader market shifted from tech stocks to physical economy sectors, driven by improved economic outlook and AI-related disruption concerns. This trend, dubbed the ‘HALO trade,’ benefited sectors like Energy, Materials, and Utilities, while mid-cap funds with limited exposure to these areas faced challenges.
Madison Mid Cap Fund, which underperformed the Russell Midcap Index by 2.99 percentage points in Q1, identified Ross Stores as a high-quality, underappreciated opportunity amid the sector rotation.