| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.8% | 1.3% | 10.2% |
| 2025 |
|---|
| 10.2% |
The BNY Mellon Appreciation Fund underperformed the S&P 500 in Q4 2025, returning 1.33% versus 2.66% for the index. The quarter was marked by strong corporate earnings driving market gains despite growing risks including potential AI bubble concerns, rising unemployment, and trade policy uncertainty. Technology companies reported robust revenue growth and pledged increased capital expenditures, with over $1 trillion in AI-related partnerships announced. However, investors became more discerning of AI investments, evidenced by muted response to strong NVIDIA earnings. Consumer bifurcation intensified with higher-income consumers spending broadly while lower-income consumers traded down. The Fed cut rates twice by 25 basis points each, bringing the federal funds rate to 3.50-3.75%. U.S.-China trade relations showed signs of thawing with de-escalatory moves and approval of scaled-down AI chip sales. The fund maintains its investment philosophy of focusing on industry-leading businesses capable of consistent earnings growth through business cycles, remaining confident despite unprecedented uncertainty and volatility from global policy transformations.
Focus on industry-leading businesses that can consistently grow earnings through various business cycles, maintaining investment discipline during periods of political and economic transformation.
The Fund maintains confidence in industry-leading businesses and believes long-term value is driven by companies that can consistently grow earnings through various business cycles. The investment philosophy remains consistent during periods of political and economic transformation.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 18 2026 | 2025 Q4 | AAPL, AMZN, ASML, BA.L, ETN, GOOGL, INTU, ISRG, LLY, MC.PA, META, MSFT, NOW, NVDA, TSM, V | AI, consumer, earnings, Fed policy, large cap, technology, Trade Policy, volatility | - | Technology companies reported strong revenue and earnings growth with pledged increases in capital expenditures as computing demand outstrips supply. Over $1 trillion in partnerships between… |
| Oct 21 2025 | 2025 Q3 | - | AI, Large Caps, tariffs, technology, Trade |
MSFT NVDA ASML NA TSM INTU |
The fund underperformed the S&P 500 as mega-cap AI and tech stocks drove market gains. AI infrastructure spending and resilient earnings offset tariff pressures, with… |
| Jul 15 2025 | 2025 Q2 | - | AI investment, earnings, global leaders, growth, volatility | - | The letter emphasizes long-term growth investing in dominant global franchises across technology and industrial sectors. Despite tariff-driven volatility, strong earnings growth and AI investment underpin… |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| Dec 31 2024 | 2024 Q4 | - | - | - | - |
| Jun 30 2024 | 2024 Q2 | - | - | - | - |
| 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 |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure | |
Trade DownDollar General delivered strong same-store sales and margin improvement as customers traded down from grocery and pharmacy channels. This trade-down behavior provided a tailwind to margins that are expected to persist into 2026. |
Discount Retail Consumer Margins Traffic | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
| 2025 Q3 |
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 |
Technology |
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Trade |
||
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 21, 2025 | Fund Letters | Alan R.Christensen | NVDA | NVIDIA Corporation | Information Technology | Semiconductors | Bull | NASDAQ | AI, datacenter, GPUs, growth, leadership, Margins, semiconductors | Login |
| Oct 21, 2025 | Fund Letters | Alan R.Christensen | ASML NA | ASML Holding N.V. | Information Technology | Semiconductor Equipment | Bull | Euronext Stock Exchange | AI, backlog, Equipment, Euv, Margins, Monopoly, semiconductors | Login |
| Oct 21, 2025 | Fund Letters | Alan R.Christensen | TSM | Taiwan Semiconductor Manufacturing Company | Information Technology | Semiconductors | Bull | NYSE | AI, Capacity, Foundry, growth, Margins, Pricing, semiconductors | Login |
| Oct 21, 2025 | Fund Letters | Alan R.Christensen | INTU | Intuit Inc. | Information Technology | Application Software | Bear | NASDAQ | Automation, Deceleration, guidance, SMB, Software, valuation | Login |
| Oct 21, 2025 | Fund Letters | Alan R.Christensen | MSFT | Microsoft Corporation | Information Technology | System Software | Bull | NASDAQ | AI, buybacks, cloud, enterprise, growth, Margins, Software | Login |
| TICKER | COMMENTARY |
|---|---|
| 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. |
| 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. |
| ASML | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| BA.L | The top three contributors to this underperformance came from BAE Systems (British Defense) |
| ETN | Eaton's shares pulled back in August following strong performance through July. Like many companies in the industrials complex, Eaton's results did not exceed very high investor expectations. Moving into 2026, we anticipate accelerated growth for the company that is tied to strong trends in data center, aerospace, and defense markets. |
| 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. |
| INTU | ServiceNow (NOW) and Intuit (INTU) exemplify this dynamic, advancing meaningful AI initiatives that enhance customer value and deepen competitive advantages. Intuit is deploying intelligent agents and conversational tools like 'Ask Anything' to simplify complex financial tasks across QuickBooks and TurboTax. |
| ISRG | ISRG shares appreciated in the fourth quarter after the company delivered strong Q3 results highlighting continued procedure growth and accelerating system placements. Procedure volumes rose in the mid-teens globally, with notable strength in general surgery and urology, while recurring instrument and accessory revenue grew faster than expectations. Management also reported that the early rollout of its next-generation robotic platform was tracking ahead of schedule, with utilization metrics trending positively across beta sites. |
| 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. |
| MC.PA | Top gainers among the Fund's holdings included LVMH (+24%) |
| 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. |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| 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. |
| 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. |
| V | There were companies there such as Visa, which we own, as well as many we do not, and which would not likely be appropriate for this mandate. |
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