| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 4.41% | 18.5% |
| 2025 |
|---|
| 18.5% |
The Shelton Equity Income Strategy delivered strong full-year performance of 18.50% net return in 2025, outperforming the CBOE BuyWrite Index by 11.12%. The strategy generated significant cash flow from option premiums (7.97% for the year) and dividends (1.56%), demonstrating the effectiveness of the option overwriting approach. During Q4, the portfolio underperformed the benchmark by 1.77% as markets experienced volatility driven by policy uncertainty and AI sustainability concerns. Top performers included Alphabet, Lam Research, Cardinal Health, General Motors, and Merck, all of which remain in the portfolio. The managers exited underperforming positions including Fastenal, PayPal, HP, and T-Mobile while retaining VICI Properties. Looking ahead to 2026, with markets at record highs, the strategy is positioned to capitalize on expected volatility while providing downside protection through its option overwriting methodology. Key focus areas include Federal Reserve policy changes and the sustainability of AI-driven investments.
The Equity Income strategy uses option overwriting to generate income and provide downside protection in volatile markets while maintaining exposure to quality equity positions.
The market is entering 2026 at record high levels with investors closely watching policy changes from both the Federal Reserve and administration. The AI trade will be in focus as investors may expect companies to show returns on AI infrastructure investments. The Equity Income strategy is positioned to capitalize on volatility and buffer potential pullbacks.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 9 2026 | 2025 Q4 | CAH, FAST, GM, GOOGL, HPQ, LRCX, MRK, PYPL, TMUS, VICI | dividends, financials, healthcare, income, Options, technology, volatility | - | Shelton's Equity Income Strategy delivered 18.50% net returns in 2025, outperforming its benchmark by over 11% through effective option overwriting that generated 7.97% in premium income. With markets at record highs entering 2026, the strategy is well-positioned to capitalize on expected volatility while providing downside protection amid policy uncertainty and AI investment sustainability concerns. |
| Nov 21 2025 | 2025 Q3 | AAPL, AMZN, ANET, BSX, CMCSA, CTSH, DVA, FTNT, GM, GOOGL, META, MSFT, NEM, NVDA, PHM, TSLA | AI, equity income, Options, rates, technology, Trade Policy, volatility | - | Shelton's Equity Income Strategy outperformed in Q3 2025, generating strong cash flow from options while benefiting from the AI-driven market rally. With the market at all-time highs facing tariff and Fed policy uncertainty, the strategy is positioned to capitalize on expected Q4 volatility through disciplined option writing and selective equity positioning. |
| Aug 22 2025 | 2025 Q2 | AAPL, APH, BMY, HPQ, JCI, META, MRK, MSFT, NRG, NVDA, OMC, ORCL, XOM | dividends, income, Options, tariffs, technology, volatility | - | Shelton Equity Income outperformed significantly in Q2 2025 despite dramatic tariff-driven volatility, generating strong option income while benefiting from the technology-led recovery. The strategy is well-positioned for continued volatility as markets navigate tariff impacts on inflation and Fed policy from record highs. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe market finished the quarter in positive territory after a turbulent stretch marked by policy uncertainty and concerns about the sustainability of AI-driven investment. Looking ahead, the AI trade will be in focus as investors may start to expect companies to show returns on the capital being invested in AI infrastructure. |
Artificial Intelligence Infrastructure Investment |
VolatilityThe fourth quarter delivered a continuation of the upside experienced since April, but hit a shaky November which marked the first down month for the S&P 500 since the tariff-driven selloff in the second quarter. The strategy is well positioned to capitalize on the volatility and buffer any pullbacks in the near term. |
Market Volatility Options Downside Protection | |
DividendsThe strategy generated 0.40% from dividends during the fourth quarter, bringing the full-year cash flow to 1.56% from dividends. This represents a core component of the equity income strategy's total return generation. |
Dividend Income Cash Flow Income Generation | |
| 2025 Q3 |
AIThe rally was sustained by enthusiasm for the AI trade, with the Magnificent Seven stocks reclaiming leadership after lagging earlier in the year. AI continues to drive market momentum and sector rotation. |
Artificial Intelligence Technology Growth Leadership |
VolatilityThe strategy is positioned to capitalize on market volatility through option writing. October is historically choppy, and both trade and monetary policy could exacerbate volatility in the final quarter. |
Options Risk Management Market Timing Hedging | |
RatesThe Federal Reserve cut rates by 0.25% in September, bringing the federal funds rate to 4.00-4.25%. The market is monitoring Fed comments for future rate cut paths amid economic uncertainty. |
Federal Reserve Monetary Policy Interest Rates Economic Policy | |
Trade PolicyThe market experienced volatility in spring due to tariff uncertainty, followed by a summer rebound. The expiration of temporary tariff pause in Q4 could impact inflation and earnings. |
Tariffs Trade Policy Inflation | |
| 2025 Q2 |
VolatilityThe second quarter brought dramatic market volatility with the S&P 500 plunging into bear market territory in March-April due to Liberation Day tariffs before staging one of the fastest recoveries in history. The strategy is positioned to capitalize on volatility and buffer pullbacks. |
Volatility Market Recovery Options |
Trade PolicyLiberation Day tariffs caused significant market disruption in March-April, briefly pushing markets into bear territory before a temporary pause triggered recovery. The market will closely watch tariff impacts on inflation and company financials going forward. |
Tariffs Trade Policy Inflation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| CAH | CARDINAL HEALTH INC contributed 0.30% to relative performance |
| FAST | FAST underperformed during the quarter as elevated expectations reset and industrial demand recovered more slowly than expected. Sales growth from new customer sites remained. Strong cash generation, a healthy balance sheet, and disciplined capital allocation continue to provide downside support. |
| GM | For insight into the real economy operating beneath this AI and data center boom, we must look elsewhere within the S&P 500, including bellwethers like General Motors |
| 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. |
| HPQ | HP has not benefited much from the AI frenzy like other technology companies. The company has seen rising costs and projected lower-than-expected earnings for 2026. We did not make any changes to our position in HP and continue to hold the stock in the Fund. |
| LRCX | we believe it is well positioned to become an approved vendor for Lam Research (a supplier of wafer-fabrication equipment) as well |
| MRK | Top gainers in the Fund this quarter included Merck (+26%) |
| PYPL | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| TMUS | T-MOBILE US INC detracted -0.32% from relative performance |
| VICI | Reported EPS, AFFOPS, and revenue that were in line with expectations. Management raised the bottom range of AFFOPS guidance. Shares came under pressure as a customer that was expected to do a sale-leaseback transaction withdrew its bid for new NYC casino, and as Canadian travel to Las Vegas has been down |
| 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 | |||
