| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.77% | 1.44% | 11.58% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 11.6% | 20.3% | 28.9% | -12.6% | 27.8% | 8.4% |
The Bretton Fund returned 1.44% in Q4 2025 and 11.58% for the full year, underperforming the S&P 500's 17.88% annual return. The fund's core thesis centers on finding pockets of long-term value while avoiding speculative AI investments, despite missing some upside when markets are humming. Alphabet was the standout performer, returning 65% as its AI chatbot Gemini exceeded expectations and the stock doubled from mid-year lows. The financial sector performed strongly due to increased lending, reduced regulation, and moderately high interest rates, with JPMorgan and American Express contributing significantly. However, housing-related investments struggled as high rates froze the market, with Dream Finders Homes and NVR posting negative returns. UnitedHealth had a disastrous year due to actuarial modeling errors and regulatory challenges. The managers maintain a patient approach, positioning for eventual housing market recovery and continuing to find value opportunities. Cash levels remain low at 2.6%, indicating selective deployment in attractive long-term opportunities despite current market elevation.
The fund focuses on finding pockets of long-term value in a fairly elevated market, avoiding highly speculative AI investments while maintaining positions in companies with strong competitive advantages and multiple business lines that provide resilience and growth opportunities.
The managers expect housing investments to perform well once the market unfreezes, driven by pent-up demand. They don't expect Alphabet to double again in 2026 but like the company's direction. For UnitedHealth, they acknowledge greatly elevated risks but believe the company will eventually manage through current challenges given its advantages. The fund continues to find pockets of value that should reward investors over time.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 12 2026 | 2025 Q4 | AXP, AZO, BAC, BRK-B, DFH, EXP, GOOGL, JPM, MA, MCO, MSFT, NVR, PGR, ROST, RVTY, SPGI, TJX, UNH, UNP, V | AI, Banking, consumer, financials, Housing, technology, value |
UNH GOOG RVTY |
The fund views the overall market as fairly elevated but not in bubble territory regarding AI, though some parts of the AI craze appear bubble-like.… |
| Oct 22 2025 | 2025 Q3 | UNP | Antitrust, Health Care, Railroads, technology, valuation |
GOOGL UNH |
The fund gained from Alphabets favorable antitrust ruling, which preserved its core business and boosted performance. Holdings in UnitedHealth and TJX also supported returns, while… |
| Jul 25 2025 | 2025 Q2 | UNH | Competitive Advantage, free cash flow, fundamentals, long-term, Quality | - | The letter emphasizes owning a concentrated portfolio of high-quality global businesses with durable competitive advantages and strong free cash flow generation. Management stresses patience through… |
| Apr 23 2025 | 2025 Q1 | GOOG, PGR | - | - | - |
| Feb 6 2025 | 2024 Q4 | AXP, AZO, GOOG, MSFT, NVR, TJX | - | - | - |
| Oct 24 2024 | 2024 Q3 | EXP, PGR | - | - | - |
| Jul 24 2024 | 2024 Q2 | EXP | - | - | - |
| May 7 2024 | 2024 Q1 | UNH | - | - | - |
| Sep 2 2024 | 2023 Q4 | AMNF, AXP, AZO, BRK/A, DFH, GOOG, MA, MSFT, NVR, PGR, RVTY, RXMD, UNH, UNP, V | - | - | - |
| Oct 20 2023 | 2023 Q3 | AXP, GOOG | - | - | - |
| Aug 15 2023 | 2023 Q2 | - | - | - | - |
| Apr 21 2023 | 2023 Q1 | UNH | - | - | - |
| Feb 14 2023 | 2022 Q4 | AXP, BRK/A, GOOG, JPM, MSFT, TJX, UNH | - | - | - |
| Oct 21 2022 | 2022 Q3 | AMNF, AXP, AZO, BRK/A, DFH, GOOG, JPM, MA, MCO, MSFT, NVR, PGR, PKI, PRK, ROST, SPGI, TJX, UNH, UNP, V | - | - | - |
| Aug 25 2022 | 2022 Q2 | GOOG | - | - | - |
| Apr 20 2022 | 2022 Q1 | CP | - | - | - |
| 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 |
ConsumerThe consumer segment includes DJL Petfoods (pet food ingredients distributor) and TSDC Wholesale (food and grocery wholesale). DJL exemplifies RDCP 2.0 characteristics as an asset-light but infrastructure-critical business with long-standing customer relationships, exceptional retention rates, and exposure to growing pet ownership and premiumisation trends. These businesses benefit from structural advantages and recurring revenue streams. |
Pet Care Food Distribution Consumer Staples Wholesale Distribution | |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
HomebuildersDespite near-term housing market challenges from affordability issues and buyer/seller strikes, there is structural underinvestment in housing relative to demographic needs. US builds same number of homes today as 1960 despite 160 million more people. Fund sees long-term bullish opportunity in companies like Toll Brothers and Champion Homes as housing market rebounds. |
Affordability Demographics Structural Shortage Millennials Manufactured | |
| 2025 Q3 |
HealthcareHealthcare was the strongest relative contributor in the quarter with holdings increasing nearly +16% compared to benchmark returns of roughly +12%. Exact Sciences was acquired for a significant premium by Abbott Laboratories resulting in an +86% return, while other strong performers included Tarsus Pharmaceuticals, Glaukos following approval of a new product, Penumbra, and Repligen driven by strong earnings results. |
M&A Product Approval Earnings Biotech |
Technology |
||
| 2025 Q2 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 12, 2026 | Fund Letters | Stephen Dodson | RVTY | Revvity, Inc. | Health Care | Life Sciences Tools & Services | Bear | New York Stock Exchange | Acquisitions, Biotech, Consumables, diagnostics, divestiture, research, spending | Login |
| Oct 22, 2025 | Fund Letters | Stephen Dodson | GOOGL | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, antitrust, cloud, Margins, Regulation, resilience | Login |
| Oct 22, 2025 | Fund Letters | Stephen Dodson | UNH | UnitedHealth Group | Health Care | Managed Health Care | Bull | NASDAQ | growth, healthcare, Insurance, management, Margins, Optum, recovery | Login |
| Feb 12, 2026 | Fund Letters | Stephen Dodson | UNH | UnitedHealth Group Incorporated | Health Care | Managed Health Care | Bull | New York Stock Exchange | cashflow, healthcare, Insurance, Integration, Managedcare | Login |
| Feb 12, 2026 | Fund Letters | Stephen Dodson | GOOG | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, Autonomy, cloud, datacenter, monetization, Search | Login |
| TICKER | COMMENTARY |
|---|---|
| AXP | American Express Company represents 22.1% of company owned with cost basis of $1,287 million and market value of $56,088 million, providing $479 million in 2025 dividends. |
| AZO | We initiated two new positions during the year—Greggs and AJ Bell, whilst reducing our exposure to NEXT and Compass Group; and selling out of AutoZone entirely during September. |
| BAC | BAC, JNJ, JPM, and XOM were held in Miller/Howard portfolios as of December 31, 2025. |
| BRK-B | Our annual pilgrimage to Omaha was running according to plan until, as we headed to the airport while listening to the final moments of the annual shareholder's meeting, Buffett dropped the bombshell: he would step down as CEO at year-end. We believe the most important aspect of Berkshire—its culture—is likely to endure. Abel inherits Berkshire's massive $382 billion cash position and will likely allocate more capital than Warren and Charlie did over much of their investing careers. |
| DFH | DFH, the fast-growing home builder, struggled as affordability continued to be a challenge for first-time home buyers. While we expect these cycles to occur, we like DFH's asset-light approach to building homes and view its management as highly skilled. |
| EXP | On the other hand, you do not hear much about a company like Eagle Materials on CNBC, nor do you have a strong and decisive consensus from which to anchor yourself. |
| 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. |
| JPM | JPMorgan (JPM) has identified 42 AI-related stocks in the S&P 500, which today represent 45% of the index's market cap. They estimate that these stocks have accounted for 78% of S&P 500 returns, 66% of earnings growth, and 71% of capital spending growth since ChatGPT launched in November 2022. As it relates to the impact on the U.S. economy, JPM estimates tech sector capital spending contributed 40%-45% of U.S. GDP growth through the first 9 months of the year, up from less than 5% during the same period in 2023. |
| MA | The enduring appeal of card payments is their universality. Consumers trust that Visa and Mastercard will be accepted globally. After more than 20 years of litigation, Visa and Mastercard agreed to yet another settlement that gives merchants greater flexibility |
| MCO | Moody's Corporation represents 13.9% of company owned with cost basis of $248 million and market value of $12,603 million, providing $93 million in 2025 dividends. |
| 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. |
| NVR | When interest rates first shot up in 2022, home builders NVR and Dream Finders Homes surprisingly held up relatively well. People in existing homes who were locked into low rates didn't want to move, which left less competition for new homes. But as home builders ran through this demand, continued high rates—and hopes for imminently lower rates—left potential buyers on the sidelines. The result was a weak year for housing. NVR and Dream Finders returned -10% and -27%, respectively, while earnings per share declined 18% and an estimated 29%. |
| PGR | Cadence, Linde, United Rentals, and Progressive rounded out the top-five detractors in the quarter. |
| ROST | ROST posted strong same-store sales in its fiscal third quarter. In our estimation, the new CEO is doing an excellent job of reviving growth. We also believe that this off-price retailer is advantaged over traditional apparel companies because of its everyday discounts. In the current economy, where certain consumers are stressed, ROST fills a critical need. |
| RVTY | Revvity (RVTY) has undergone a series of corporate changes and, in our view, is effectively a "new company with a new name" for most investors. Today, we believe Revvity's portfolio mix is significantly improved, with approximately half of revenues derived from diagnostics and half from life sciences. More than 80% of revenue is recurring, and the company benefits from generally high switching costs across its end markets. Following several years of subpar growth, Revvity expects low single‑digit revenue growth in 2026, with longer‑term revenues anticipated to trend toward mid‑ to high‑single‑digit growth. We believe this revenue acceleration has the potential to drive margin expansion from the high‑20% range toward the mid‑30s over time and may support the emergence of a "beat and raise" narrative as the recovery unfolds. |
| SPGI | Leading rating agency and data provider S&P Global Inc. contributed to performance. Shares rebounded from a pullback in September that stemmed from a competitor's cautious commentary around market demand and margins. S&P Global alleviated these concerns by delivering strong third quarter results and raising its full-year financial guidance. |
| TJX | TJX Companies, an off-price retailer, delivered solid third-quarter results and had a strong start to the fourth quarter as better merchandise availability yielded broader and higher-quality assortments that supported traffic, same-store sales and earnings growth. |
| UNH | We also added back a full position in UnitedHealth |
| UNP | Union Pacific, the largest freight rail operator in the western United States, has announced plans to merge with Norfolk Southern, one of its major eastern counterparts. If approved, the merger would create the first coast-to-coast rail network in the U.S. |
| 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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|---|---|---|---|---|---|
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