Sat Sep 27 00:40:00 UTC 2025: ## Mairs & Power Balanced Fund Underperforms in First Half of 2025, Cites Concerns Over Alphabet’s AI Strategy
**[City, State] – October 26, 2025** – The Mairs & Power Balanced Fund has released its second-quarter 2025 investor letter, revealing a 2.66% return for the first half of the year. While marking a rebound from a volatile start to the year plagued by geopolitical tensions and economic uncertainty, the fund’s performance lagged behind benchmark indexes and its peer group.
According to the letter, the fund underperformed both the composite index (60% S&P 500 Total Return Index and 40% Bloomberg U.S. Government/Credit Bond Index), which rose 5.43%, and the Morningstar Moderate Allocation peer group, which saw a 5.67% increase.
The letter also shed light on the fund’s perspective on key holdings, specifically highlighting Alphabet Inc. (NASDAQ:GOOG). While acknowledging Alphabet’s strong performance with a 21.19% one-month return and a 54.82% gain over the past 52 weeks, the fund expressed concerns about the company’s ability to maintain its competitive advantage in the face of rapidly advancing generative AI.
“Alphabet Inc. (NASDAQ:GOOG) led underperformance in the Communications sector during the first half of the year as there is increasing concern about the impact of generative AI on Alphabet’s search business and whether it will be able to meaningfully respond,” the investor letter stated. “We have been trimming the Fund’s holdings in Alphabet as part of the transition to Amazon but also to reflect lower confidence in the company’s ability to maintain its competitive advantage longer term.”
Despite reporting a 14% revenue increase to $96.4 billion in Q2 2025, Mairs & Power indicated a preference for other AI stocks they believe offer greater upside potential with less downside risk.
The Mairs & Power Balanced Fund’s second-quarter 2025 investor letter is available for download [link to letter here]. Investors are encouraged to review the letter for a comprehensive overview of the fund’s performance and investment strategy. The fund’s top five holdings, which reveal its best picks for 2025, should be reviewed.
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