Artisan Mid Cap Fund recently unveiled its investor letter for the fourth quarter of 2025, offering insights into its investment strategies and recent portfolio adjustments. The fund primarily seeks to invest in companies exhibiting strong financial trajectories and trading below their estimated private market value. In the detailed letter, a notable change was the reduction in the fund's holdings of iRhythm Holdings, Inc. (IRTC). Despite IRTC's robust performance in 2025, fueled by advancements in its cardiac monitoring services, Artisan Mid Cap Fund strategically decided to trim its position. This move was aimed at securing profits and recalibrating the investment in anticipation of future product cycles, with an expected new cycle commencing in 2027. The fund's overall performance for the quarter showed resilience, with its various classes outperforming the Russell Midcap® Growth Index, largely due to strong contributions from the information technology and healthcare sectors. The report also touched upon the fund's continuous search for undervalued opportunities, particularly in the burgeoning AI sector.
Artisan Mid Cap Fund Adjusts Holdings in iRhythm Amid Strong Performance
In a recent disclosure on February 24, 2026, the Artisan Mid Cap Fund, a prominent investment management entity, released its fourth-quarter 2025 investor letter. This letter provided a comprehensive overview of the fund's strategic financial decisions and portfolio performance. The fund's Investor Class (ARTMX), Advisor Class (APDMX), and Institutional Class (APHMX) recorded returns of -0.44%, -0.37%, and -0.35% respectively, significantly outperforming the Russell Midcap® Growth Index, which posted a -3.70% return for the quarter. This positive outcome was largely attributed to strong performances within the information technology and healthcare sectors.
A key highlight from the letter was the fund's decision to adjust its holdings in iRhythm Holdings, Inc. (NASDAQ: IRTC). iRhythm, a leader in digital healthcare, specializes in providing Zio ambulatory cardiac monitoring services. As of February 23, 2026, IRTC shares closed at $141.22, marking a one-month return of -9.80% but a substantial 23.98% gain over the preceding 52 weeks, with a market capitalization of $4.55 billion.
Artisan Mid Cap Fund stated that it had trimmed its position in IRTC, alongside other companies like Coherent and MACOM. The fund acknowledged iRhythm's strong quarterly results, characterized by significant growth in its core services and improved cash flow. This reduction was described as a strategic move to realize profits after a successful 2025, driven by company-specific tailwinds and an increase in market share. The fund anticipates a moderation in growth for IRTC in 2026, ahead of an expected compelling new product cycle slated for 2027. This proactive adjustment underscores the fund's dynamic approach to portfolio management, balancing current performance with future growth prospects.
While iRhythm is recognized for its strong market presence, it did not appear on the list of the 30 Most Popular Stocks Among Hedge Funds compiled at the end of the fourth quarter, despite an increase in hedge fund portfolios holding IRTC from 43 to 44. Artisan Mid Cap Fund indicated that it views certain AI stocks as offering greater upside potential with reduced downside risks, signaling a broader interest in emerging technological advancements.
This strategic trimming by Artisan Mid Cap Fund reflects a calculated approach to optimizing returns and managing risk, prioritizing long-term growth and adapting to evolving market conditions. It also underscores the continuous evaluation of investment opportunities across different sectors, including promising areas like artificial intelligence.
The strategic move by Artisan Mid Cap Fund to trim its investment in iRhythm Holdings, despite the latter's strong performance, offers a compelling lesson in proactive portfolio management. It highlights the importance of not just identifying winning stocks, but also knowing when to rebalance and realize gains. This decision, predicated on anticipated future growth moderation and upcoming product cycles, showcases a sophisticated understanding of market dynamics and a commitment to maximizing long-term returns. For investors, this serves as a reminder that even successful investments require periodic re-evaluation and adjustment to align with evolving market conditions and individual financial goals. It also subtly nudges us to consider the broader technological landscape, especially the burgeoning AI sector, as a frontier for future growth and innovation.