This report provides an in-depth analysis of the Thrivent Mid Cap Stock Fund's (TMSIX) performance in the fourth quarter of 2025 and its strategic positioning for the upcoming year. We delve into the factors that influenced its quarterly outperformance against the Russell Midcap Index, highlight key stock contributors, and discuss the sectors that detracted from its annual returns. Additionally, we offer insights into the fund's investment approach for 2026, considering the evolving macroeconomic landscape.
Navigating Volatility: A Deep Dive into Mid Cap Performance
Quarterly Performance Exceeds Expectations for Thrivent Mid Cap Fund
The Thrivent Mid Cap Stock Fund (TMSIX), S share class, demonstrated a robust performance in the fourth quarter of 2025, yielding a return of 1.68%. This positive result enabled the fund to surpass the performance of its benchmark, the Russell Midcap Index. However, despite this strong quarterly showing, the fund's year-to-date return, ending December 31, 2025, stood at 4.57%, indicating an overall underperformance relative to the Russell Midcap Index for the full year.
Key Drivers of Q4 Outperformance Across Varied Sectors
The fund's superior performance in the fourth quarter was primarily fueled by significant contributions from several sectors, including Materials, Real Estate, Energy, and Industrials. Within the Materials sector, Albemarle (ALB) was a standout performer. The company benefited from a favorable shift in market dynamics, characterized by a decrease in overall industry supply and a rise in storage demand. This was largely due to the shutdown of high-cost lithium producers, which positively impacted Albemarle's market position.
Southwest Airlines Soars on Improved Outlook
In the Transportation sector, Southwest Airlines (LUV) also saw considerable gains. The airline's stock rose as a result of company-specific operational enhancements that led to increased margin and return expectations among investors. These improvements signaled a stronger financial outlook for Southwest, contributing positively to the fund's performance.
Challenges in Housing Market Impact NVR Inc.
Conversely, NVR Inc. (NVR), a prominent homebuilder, faced difficulties in meeting its sales and margin targets. The housing market was impacted by high interest rates and elevated construction costs, which collectively reduced housing affordability and suppressed demand. This environment posed significant challenges for NVR, reflecting broader headwinds in the residential construction sector.
Casey's General Stores Leads Consumer Staples Sector
Among Consumer Staples, Casey's General Stores (CASY) emerged as a leader. The company's in-store food and beverage offerings, coupled with its private label products, generated industry-leading returns. This success underscored Casey's effective strategy in catering to consumer preferences and leveraging its retail footprint.
Diverse Sector Contributions to Overall Quarterly Strength
The fund's strong fourth-quarter performance was broadly supported by positive contributions from various sectors. The effective selection of investments within Materials, Real Estate, Energy, and Industrials played a crucial role in enhancing the fund's overall returns during this period.
Thrivent's Investment Philosophy and Long-Term Commitment
Thrivent, with a history of providing investment products since 1970, operates with a commitment to holistic financial services. Thrivent Asset Management, LLC (TAM), a subsidiary of Thrivent, serves as the investment adviser for its funds. As a membership-owned fraternal organization, Thrivent has dedicated over a century to serving its clients. This enduring commitment and robust organizational structure underpin the strategic decisions and long-term outlook for funds like TMSIX.
