| 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… |
| 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… |
| 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… |
| 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 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 |
DividendsDividend-paying companies lagged non-dividend-paying companies by more than 50%. On average, portfolio holdings raised their dividends 9% over 2025, in line with their earnings growth. The top three dividend raisers were Amphenol (55%), Cintas (15%), and Verisk Analytics (15%). |
Dividend Growth Income Yield Distribution Payout | |
Energy TransitionEnergy transition themes are reflected through infrastructure investments and companies positioned for the global push toward renewable energy, including exposure to energy services and LNG infrastructure where long-term dynamics look positive. |
Renewables Infrastructure Clean Energy Sustainability Climate | |
SemiconductorsTaiwan Semiconductor represents the dominant manufacturer for leading fabless chip designers including NVIDIA, Apple, and Broadcom. The global arms race to develop artificial general intelligence will support multiple years of robust growth for foundries with leading-edge capabilities. |
Foundries Advanced Process AI Chips Manufacturing Technology Leadership | |
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 |
EnergyDiversified Energy Company provides natural gas exposure positioned for data center energy needs and LNG growth. PetroTal offers oil production exposure at significant discount to NAV despite operational challenges. Energy transition themes present across multiple holdings. |
Natural Gas Oil LNG Energy Transition |
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 portfolio trades at significant discounts to the broad market, with P/E ratios 40-42% below the S&P 500. The manager believes many steady-growing companies are overlooked by markets focused on AI winners, creating opportunities in businesses with lower assumed margins and productivity that could benefit from AI adoption. |
Discount Multiples Undervalued Overlooked Opportunity | |
| 2025 Q2 |
DividendsDividend-paying companies lagged non-dividend-paying companies by more than 50%. On average, portfolio holdings raised their dividends 9% over 2025, in line with their earnings growth. The top three dividend raisers were Amphenol (55%), Cintas (15%), and Verisk Analytics (15%). |
Dividend Growth Income Yield Distribution Payout |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| 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 |
| TICKER | COMMENTARY |
|---|---|
| 000660.KS | SK Hynix continued its strong performance as the clear winner to date in high bandwidth memory, reporting a 62% year-over-year growth in profits in the third quarter and announcing that all of its DRAM, NAND and high bandwidth memory capacity is fully booked for 2026. SK Hynix was a top contributor over the quarter and year, with reductions made as it was among artificial intelligence-related companies that had performed well. |
| AAPL | The largest 10 companies, by market capitalization, had reached 40.7% of the S&P 500 by the end of 2025, up from roughly 30% at the end of 2021. At the top of this list are Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Broadcom (AVGO), Meta (META), and Tesla (TSLA). Apple: Market capitalization near $4 trillion. A double requires creating a company larger than the size of Walmart, JPMorgan, and Pfizer combined. |
| 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 | We added to our holdings in Amazon.com Inc. |
| 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 | Brookfield Corporation, headquartered in Toronto, Canada, stands as a preeminent global alternative asset manager and operator, harnessing a vast permanent capital base of over $180 billion to invest in and scale high-quality businesses across infrastructure, renewable power, private equity, real estate, and beyond. With more than $1 trillion in assets under management through its majority-owned asset management arm (Brookfield Asset Management) and a growing $135 billion insurance solutions platform, the company deploys patient, opportunistic capital into real assets that power the global economy—delivering resilient, inflation-protected returns in an era of accelerating energy transition and digital infrastructure demand. Brookfield's culture of disciplined value creation and long-term stewardship serves as its bedrock competitive moat, fostering a collaborative ecosystem where operators, investors, and entrepreneurs thrive under a unified philosophy of prudent risk-taking and operational excellence. This ethos not only attracts top-tier talent and proprietary deal flow but also amplifies the flywheel of compounding insights and relationships, positioning the firm to capitalize on market dislocations with unmatched agility and insight. We are confident that Brookfield is on track to achieve its ambitious five-year targets, supported by robust fundraising, accelerating fee-related earnings growth, and disciplined deployment of capital at attractive internal rates of return. This positions the company to deliver its stated goal of 15%+ annualized total returns for shareholders through the cycle, driven by expanding recurring fee streams, strong investment performance across its platforms, and the powerful secular tailwind of institutional investors shifting trillions of dollars into alternative assets in the coming years. Under the steady hand of CEO Bruce Flatt and a world-class management team, we are profoundly optimistic about Brookfield's positioning as a generational compounder. The company's masterful capital allocation—reinvesting float-like permanent capital into undervalued opportunities while maintaining fortress-like balance sheets—has consistently unlocked outsized value, and we believe it will continue to do so amid a favorable macro backdrop for real assets. A cornerstone of enduring quality in our portfolio, Brookfield exemplifies the rare blend of scale, sophistication, and shareholder alignment that defines exceptional businesses. |
| 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 | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| LLY | Healthcare added meaningfully through Eli Lilly following a deal the company did with the US administration to reduce the price of its GLP-1 drugs in exchange for tariff relief. |
| META | Meta was cited as a larger position that contributed little despite what I thought was positive operating progress, representing opportunity cost in the portfolio. |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| MU | We took a position in Micron Technology early in the quarter to gain exposure to high-bandwidth memory, a clear bottleneck in chip development. The position was later sold for a solid gain. |
| NFLX | Netflix has built a durable economic moat around its vertically-integrated, globally-scaled streaming business. As the first company to establish a global subscription media platform within the $500 billion TV market, Netflix is now reaping the benefits of its early leadership. With more than 300 million members, Netflix enjoys the lowest content cost per subscriber in the industry. |
| NVDA | Nvidia sits at the top of the S&P 500 as the designer in the AI ecosystem. |
| 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. |
| 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 | The largest 10 companies, by market capitalization, had reached 40.7% of the S&P 500 by the end of 2025, up from roughly 30% at the end of 2021. At the top of this list are Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Broadcom (AVGO), Meta (META), and Tesla (TSLA). |
| TSM | TSMC leads the MSCI Emerging Markets Index as the manufacturer in the AI ecosystem. |
| WDC | The fund maintained an overweight position in technology hardware, storage & peripherals company Western Digital. Early in 2025, the company announced a strategic spin-off separating its flash division as SanDisk, while Western Digital focused primarily on the hard disk drive (HDD) market, allowing the company to be valued as a standalone HDD leader. The continued surge in AI infrastructure demand massively boosted the demand for high-capacity HDDs, and Western Digital benefited from an increase in purchase orders from major hyperscalers extending into 2026 and even 2027. |
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