Arch Capital (ACGL) Fell after Strong Q1

Madison Investments, an investment advisor, released its “Madison Large Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Class Y) increased 3.1%, compared to a 10.9% gain for the S&P 500 index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Madison Large Cap Fund highlighted stocks such as Arch Capital Group Ltd. (NASDAQ:ACGL). Arch Capital Group Ltd. (NASDAQ:ACGL) is an insurance company that offers insurance, reinsurance, and mortgage insurance products. The one-month return of Arch Capital Group Ltd. (NASDAQ:ACGL) was -3.91%, and its shares lost 9.34% of their value over the last 52 weeks. On July 21, 2025, Arch Capital Group Ltd. (NASDAQ:ACGL) stock closed at $87.55 per share, with a market capitalization of $32.81 billion.

Madison Large Cap Fund stated the following regarding Arch Capital Group Ltd. (NASDAQ:ACGL) in its second quarter 2025 investor letter:

"The bottom five detractors for the quarter were Fiserv, Arch Capital Group Ltd. (NASDAQ:ACGL), Copart, Alcon, and Progressive. Our insurance holdings, including Arch Capital Group and Progressive, which performed strongly in the first quarter, underperformed the strong equity market in the second quarter. Both businesses continue to perform well overall, although their rates of growth are slowing as we enter the later innings of the insurance pricing cycle."

Arch Capital Group Ltd. (NASDAQ:ACGL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Arch Capital Group Ltd. (NASDAQ:ACGL) at the end of the first quarter, which was 41 in the previous quarter. While we acknowledge the potential of Arch Capital Group Ltd. (NASDAQ:ACGL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Arch Capital Group Ltd. (NASDAQ:ACGL) and shared the list of most undervalued financial stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 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.