| 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 become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
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 | |
HomebuildersHigher rates have continued to weigh on the homebuilder space as well as an increase in inventory. The fund regards homebuilders' capacity to maintain construction activity throughout the cycle as a key competitive strength, with less resilient competitors likely to exit the market during prolonged cyclical downturns. |
Homebuilders Construction Cyclical | |
| 2025 Q3 |
HealthcareFund focuses exclusively on healthcare sector with concentrated portfolio of small-cap companies. Investment approach targets special situations within healthcare including spin-offs, asset sales, business model pivots, and new product launches. Portfolio includes pharmaceutical, medical device, biotechnology, and healthcare IT companies. |
Pharmaceuticals Medical Devices Biotechnology Healthcare IT Special Situations |
Technology |
||
| 2025 Q2 |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| 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 |
| TICKER | COMMENTARY |
|---|---|
| AXP | Our best-performing stocks in the quarter were Merck (MRK), Amgen (AMGN), and American Express (AXP). For the 2025 full year the best-performing stocks were eBay (EBAY), Amgen Inc (AMGN), and American Express (AXP). |
| AZO | Within the portfolio, stocks like AutoZone, Comcast, and Zoetis were all punished for having perceived headwinds to already lowered expectations for growth. |
| 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 | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| 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. As JPM depicts to the right, tech capex in 2025 dwarfs every major historical U.S. infrastructure project as a percentage of GDP. |
| 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 | The top five performance contributors during the fourth quarter were Moody's |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| 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 | We invested in the former PerkinElmer in the wake of Covid. In many ways we are in a new golden age for medicine—the growth of biologics and peptides, new frontiers in personalized medicine, AI to identify actionable therapies, mRNA to deliver them—and Revvity, which makes the consumables used in both research facilities and customer-facing diagnostics, seemed like a good platform. Unfortunately, management spent its Covid testing windfall on overpriced acquisitions while divesting its cash-generative but less exciting food testing division, and then was left flat-footed when pharma research spending stalled and the FDA dramatically reduced science spending. Our overall return was -28.5%, or a -5.90% IRR, but the most painful loss was our opportunity cost. |
| SPGI | Ratings agencies S&P Global and Moody's had good years as corporations and governments issued more bonds, increasing earnings per share by an estimated 27% and 31%, respectively. Their stocks returned a more moderate 7% and 10%. |
| 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 | Exited UnitedHealth Group where we had diminished conviction in the company's growth outlook. |
| UNP | One of the most capital-intensive industries in the world is railroads, where Union Pacific has a comparable metric of around 14%. |
| V | We added to our holdings in Visa Inc. |
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