Madison Covered Call And Equity Income Fund Q1 2026 Investment Strategy Letter
The Madison Covered Call & Equity Income Fund (Class Y) rose 5.2% in Q1 2026, outperforming the S&P 500 which declined 4.3%, driven by rising energy prices amid geopolitical conflict in Iran and supply disruptions. Escalating tensions have restricted crude oil flows through the Strait of Hormuz and taken 11 million barrels per day offline, boosting commodity-related equities. Market leadership shifted from overvalued AI-focused mega-cap growth stocks to real assets as inflation expectations increased. Madison Asset Management maintains a defensive equity stance, anticipating persistent inflation and delayed rate cuts.
- ▪The Madison Covered Call & Equity Income Fund (Class Y) gained 5.2% in the first quarter of 2026.
- ▪The S&P 500 declined 4.3% during the same period, underperforming the fund.
- ▪Geopolitical conflict in Iran has disrupted oil flows through the Strait of Hormuz, contributing to higher crude prices.
- ▪Attacks on energy infrastructure removed 11 million barrels per day of global production capacity.
- ▪Madison Asset Management expects inflation to remain elevated and anticipates a delayed Federal Reserve rate cut cycle.
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