| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.7% | 5.1% | 22.5% |
| 2025 |
|---|
| 22.5% |
Fidelity Dividend Growth Fund delivered strong Q4 2025 performance with 5.09% returns, outpacing the S&P 500's 2.66% advance. The fund's success was driven by stock selection, particularly in information technology, industrials, and communication services. Key contributors included Alphabet, which gained 29% on AI strategy execution and strong cloud computing growth, and SK Hynix, which surged 83% amid memory chip shortages extending through 2026. The fund maintains conviction in generative AI's transformative potential, comparing its impact to the transistor or World Wide Web. Commercial aviation represents another key theme, with Boeing as the largest overweight given production recovery prospects and strengthened balance sheet. Energy transition positioning includes GE Vernova, benefiting from electrification trends and AI-driven power demand. Detractors included Paycom Software amid AI disruption concerns and an Apple underweight. The portfolio emphasizes companies with sustainable dividend growth prospects while maintaining overweights in AI beneficiaries and cyclical recovery plays. Manager Zach Turner remains optimistic about the opportunity set while watching for defensive positioning opportunities.
The fund seeks capital appreciation through a diversified portfolio of large- and mid-cap dividend-growing stocks, with investment philosophy centered on comparing price and value while believing companies with dividend growth history demonstrate superior risk-adjusted returns over market cycles.
The fund remains optimistic about generative artificial intelligence prospects and anticipates better times for Boeing as production issues resolve. The manager expects continued benefits from global electrification and decarbonization trends while watching for opportunities to reduce underweights in defensive, staples-like stocks.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 8 2026 | 2025 Q4 | 000660.KS, AAPL, ALSN, AMZN, BA, BN, EPD, GEV, GOOGL, LLY, META, MSFT, MU, NFLX, NVDA, ORCL, PAYC, TSLA, TSM, WDC | aerospace, AI, dividends, energy, large cap, semiconductors, technology |
GOOGL 000660 KS PAYC AAPL GEV |
The fund remains optimistic about generative artificial intelligence prospects, believing current breakthroughs in large language models will have massive implications for developed economies. The impact is expected to be at least as significant as the transistor or World Wide Web development. The fund maintains significant exposure to semiconductor companies, particularly Taiwan Semiconductor Manufacturing and memory chip producers like SK Hynix. Strong demand for digital memory solutions has resulted in products being sold out through 2026. Commercial aviation represents a key theme as one of the few end markets not yet recovered to pre-pandemic production levels despite robust air travel recovery. Boeing remains the fund's largest overweight with improving fundamentals and strengthened balance sheet. The fund is positioned in companies benefiting from global electrification and decarbonization trends, including GE Vernova which makes gas turbines for electricity generation. The advent of generative AI is increasing global power needs. The fund's core investment philosophy centers on companies with favorable prospects to sustainably pay and grow dividends over time. Energy sector positioning is supported by corporate policies focused on returning capital through dividends and stock buybacks. |
| Nov 5 2025 | 2025 Q3 | - | Dividend Growth, Electrification, energy, industrials, Value Investing | - | The fund maintains an emphasis on high-quality value stocks that consistently grow dividends, supported by disciplined valuation and capital return strategies. Industrial holdings such as Boeing and GE Vernova benefit from post-pandemic demand recovery and global electrification trends. Energy exposure is supported by shareholder-friendly policies, low decline rates, and stable consumption outlook. |
| Jul 31 2025 | 2025 Q2 | AAPL, GEV, NFLX | Balance Sheets, capital returns, Dividend Growth, income, Quality | - | The letter focuses on dividend growth as a source of resilient returns amid growth-driven market concentration. Management favors companies with sustainable payout growth, strong balance sheets, and capital return discipline. Dividend-paying equities are positioned for attractive risk-adjusted outcomes. |
| Mar 31 2025 | 2025 Q1 | GEV, GOOG, MRVL, TSLA | - | - | |
| Sep 30 2024 | 2024 Q3 | ALSN, BA, GEV, QCOM | - | - | |
| Jun 30 2024 | 2024 Q2 | AAPL, NVDA, VST | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
Energy TransitionThe portfolio maintains significant exposure to electrification themes through companies like Bloom Energy, which provides clean, reliable power solutions for AI data centers. The energy transition represents a structural opportunity as companies race to build power infrastructure to support growing electricity demands from AI workloads. |
Electrification Clean Energy Power Generation Fuel Cells Grid Infrastructure | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
SpaceSpaceX is generating significant value through rapid expansion of Starlink broadband service and establishing itself as a leading launch provider with reusable technology. The company is making tremendous progress on Starship, the largest most powerful rocket ever flown, representing a significant leap forward in space exploration capabilities. |
Satellites Launch Broadband Reusable Exploration | |
| 2025 Q3 |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management | |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q2 |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 8, 2026 | Fund Letters | Zach C Turner | GOOGL | Alphabet Inc | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cashflow, cloud, monetization | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | 000660 KS | SK Hynix Inc | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI, Capacity, Memory, Pricing, semiconductors | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | PAYC | Paycom Software Inc | Industrials | Human Resource & Employment Services | Bull | New York Stock Exchange | AI, HCM, Margins, Recurring, Software | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | AAPL | Apple Inc | Information Technology | Technology Hardware, Storage & Peripherals | Neutral | NASDAQ | Competition, consumer, Hardware, services, valuation | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | GEV | GE Vernova Inc | Industrials | Heavy Electrical Equipment | Bull | New York Stock Exchange | backlog, cashflow, Decarbonization, Electrification, Grid, infrastructure, Margins, services, Turbines | Login |
| TICKER | COMMENTARY |
|---|---|
| 000660.KS | SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand for its next-generation platforms at meaningfully higher price points and margins than prior generations. |
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| ALSN | Investors lauded Allison Transmission Holdings on its closing of the Dana Off-Highway acquisition; the deal materially expands Allison's addressable markets and improves long-term growth visibility. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| BA | Some of the biggest winners over the past year are also among our biggest positions currently, including names like Boeing, GE Aerospace, and Cameco. |
| BN | Leading asset-rich alternative asset manager with deep domain expertise. Owns 73% of $84bn publicly-listed asset manager (Brookfield Asset Management) with significant value derived from asset-light, recurring management fee streams. We believe that deep domain expertise and best-in-class returns position Brookfield to benefit from multi-trillion-dollar wave of AI-related infrastructure investment. |
| EPD | There should be a free cash flow (FCF) inflection in 2026. EPD increased its buyback authorization to $5 billion from $2 billion. |
| GEV | The massive data center buildout is leading to a surge in demand for alternative and traditional energy generation, which led Jennison to add GE Vernova to the Fund's Industrials sector. Their natural gas turbine, wind, and electrification businesses, along with a rapidly growing and profitable services backlog, should support strong growth for the next several years. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| LLY | Eli Lilly shares were a top performer in 4Q25 after delivering strong Q3 2025 earnings in October. Revenue rose 54% year-over-year to $17.6 billion, and adjusted EPS of $7.02 beat consensus of $6.02. Growth was driven by its GLP-1 franchises, Mounjaro and Zepbound, where sales more than doubled year-over-year, alongside strength in other therapeutic areas. Management raised full-year guidance for both revenue and earnings, reinforcing investor confidence in the company's growth outlook. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MU | Core gains were led by investments in the Technology sector including Micron |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| PAYC | Paycom Software was the top detractor during the quarter. The U.S.-headquartered human resources and employment services company's stock price declined alongside peers due to broad underperformance in the application software sector. We continue to believe Paycom has a long runway for future growth and that system-of-record software companies like Paycom will not be replaced by AI. We appreciate management's focus on ramping share repurchases, which we believe will add significant per-share value at today's stock price. |
| TSLA | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
| WDC | Sandisk is a provider of high-performance flash memory storage products (Solid State Drives, memory cards, and USB Flash Drives, etc.). AI requires immense volumes of fast, high-capacity data storage in data centers, edge devices, and consumer products, creating strong demand for its flash memory solutions which in turn allowed the company to exercise pricing power. This all culminated in very strong results and raised guidance during the quarter, as the company appears poised to experience AI-related tailwinds for the foreseeable future. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
