| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.4% | 0.1% | 6.7% |
The Meridian Hedged Equity Fund gained 0.08% net during Q4 2025, trailing the S&P 500's 2.66% return. The fund constructs a durable portfolio seeking to minimize losses during downturns while participating in advances through high-quality businesses with attractive valuations and strong fundamentals. The strategy combines long positions in quality companies with covered call options for income generation and downside protection. Top contributors included MGM Resorts, which benefited from record Macau results and BetMGM profitability, Danaher on bioprocessing stabilization, and Clear Secure from robust travel demand. Key detractors were Lamb Weston on guidance concerns, DraftKings on competitive pressures, and Vistra on longer-term guidance disappointment. At period end, 36% of the portfolio was unhedged for growth, with the remainder in covered call positions. Looking ahead, the fund expects continued market volatility amid elevated expectations and geopolitical concerns, maintaining focus on disciplined fundamental research and prudent risk management to identify quality businesses that can compound returns long-term.
The fund constructs a durable portfolio seeking to minimize losses during market downturns while participating in market advances through high-quality businesses with attractive valuations, strong competitive advantages, solid balance sheets, robust cash flow, and limited volatility, utilizing a hedged equity strategy with covered call options.
Markets enter the new year with elevated expectations. With policy trajectory, AI-driven investment sustainability, and geopolitical concerns in play, the fund expects market volatility to persist and views it as a source of long-term opportunity. The fund remains committed to disciplined, bottom-up fundamental research and prudent risk management, focusing on high-quality businesses with durable competitive advantages that can compound returns over the long term.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 21 2026 | 2025 Q4 | ABNB, AMZN, CB, DHI, DHR, DKNG, GEO, LNG, LW, LYV, MGM, MTCH, VST, YOU | energy, gaming, Hedged Equity, Homebuilders, Options, Travel, value |
LW DKNG VST MGM DHR YOU |
The fund holds positions in gaming companies including MGM Resorts International and DraftKings. MGM benefited from record results in Macau properties and BetMGM achieving profitability.… |
| Oct 24 2025 | 2025 Q3 | DHI, FIGR, ICE, JNJ, KVUE, LBRDK | AI, Covered Calls, downside protection, interest rates, Quality |
LBRDK KVUE ICE DHI JNJ LBRDK KVUE ICE DHI JNJ |
The fund combines unhedged quality longs with a systematic covered-call overlay to dampen volatility and protect downside while still participating in upside. Management sees AI… |
| Aug 7 2025 | 2025 Q2 | CVX, HUN, KVUE, MGM, MSFT, VST | capital preservation, downside protection, Hedging, Options, volatility |
VST MSFT MGM |
The commentary focuses on managing downside risk through selective hedging while maintaining equity upside. Covered calls and disciplined stock selection are used to smooth returns… |
| Mar 31 2025 | 2025 Q1 | ACVA, AMZN, GEO, ICE, MGM, V | - | - | - |
| Feb 10 2025 | 2024 Q4 | AMT, AMZN, COTY, DHR, V, VST | - | - | - |
| Sep 30 2024 | 2024 Q3 | AMZN, MGM, PGNY, SBH, VST, YOU | - | - | - |
| Jun 30 2024 | 2024 Q2 | AMZN, DIS, LSXMA, RIVN, USB, VST | - | - | - |
| Apr 15 2024 | 2024 Q1 | AMZN, LBRDA, NVDA, RIVN, SBH, VST | - | - | - |
| Dec 31 2023 | 2023 Q4 | ALGM, LBRDK, LEVI, MSFT, SBH, SPHR | - | - | - |
| Sep 30 2023 | 2023 Q3 | - | - | - | - |
| Jun 30 2023 | 2023 Q2 | - | - | - | - |
| Mar 31 2023 | 2023 Q1 | AAP, AAPL, LEVI, LMACU, SBH, USB | - | - | - |
| Jan 31 2023 | 2022 Q4 | 4CB, AMZN, COTY, DIS, SBH, STRYQ | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
EnergyEnergy plays a critical role in AI infrastructure economics, with data centers becoming major electricity consumers. Rising power costs compress margins while grid constraints and regulatory scrutiny influence deployment timelines. The manager emphasizes that unlike software-driven growth, AI compute cannot be scaled independently of physical energy reality. |
Data Centers Grid Power Infrastructure Utilities |
GamingNintendo continues to demonstrate exceptional performance with Switch 2 becoming the fastest-selling console in history, selling 17.4 million units in just 7 months. The company has a historically rich first-party software pipeline and is building new recurring revenue streams through Nintendo Switch Online and its expanding cinematic universe. |
Nintendo Console Software Hardware Entertainment | |
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 | |
TravelRoyal Caribbean exemplifies the portfolio's focus on companies combining physical assets with technology innovation, using AI and technology for pricing optimization, packaging, promotions, and onboard customer experience delivery. |
Technology Pricing Experience Innovation Optimization | |
| 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 |
| 2025 Q2 |
Hedging |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 7, 2025 | Fund Letters | Clayton Freeman | MSFT | Microsoft Corporation | Information Technology | Systems Software | Bull | NASDAQ | AI, cloud, enterprise, scale, Software | Login |
| Aug 7, 2025 | Fund Letters | Clayton Freeman | MGM | MGM Resorts International | Consumer Discretionary | Casinos & Gaming | Bull | New York Stock Exchange | Casinos, Demand, Leisure, Macau, Margins | Login |
| Jan 21, 2026 | Fund Letters | Clayton Freeman | LW | Lamb Weston Holdings, Inc. | Consumer Staples | Packaged Foods | Bull | New York Stock Exchange | Cost control, Frozen-Food, Margins, Pricing, Staples | Login |
| Jan 21, 2026 | Fund Letters | Clayton Freeman | DKNG | DraftKings Inc. | Consumer Discretionary | Gambling | Bull | NASDAQ | buybacks, Engagement, Gaming, Online betting, Regulation | Login |
| Jan 21, 2026 | Fund Letters | Clayton Freeman | VST | Vistra Corp. | Utilities | Independent Power Producers | Bull | New York Stock Exchange | buybacks, data centers, Electricity, Margins, Power | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | LBRDK | Liberty Broadband Corp. | Communication Services | Cable & Satellite | Bull | NASDAQ | ARPU, buybacks, cable, deleveraging, Holdco discount, merger | Login |
| Jan 21, 2026 | Fund Letters | Clayton Freeman | MGM | MGM Resorts International | Consumer Discretionary | Casinos & Gaming | Bull | New York Stock Exchange | buybacks, Digital, Gaming, Macau, Travel | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | KVUE | Kenvue Inc. | Consumer Staples | Personal Care Products | Bull | NYSE | Brand investment, cash flow, dividend, litigation, Margins, restructuring | Login |
| Jan 21, 2026 | Fund Letters | Clayton Freeman | DHR | Danaher Corp. | Health Care | Life Sciences Tools & Services | Bull | New York Stock Exchange | Bioprocessing, cashflow, diagnostics, guidance, resilience | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | ICE | Intercontinental Exchange Inc. | Financials | Financial Exchanges & Data | Bull | NYSE | buybacks, Data, deleveraging, Exchanges, recurring revenue, Volatility | Login |
| Jan 21, 2026 | Fund Letters | Clayton Freeman | YOU | Clear Secure, Inc. | Industrials | Security Services | Bull | New York Stock Exchange | Biometrics, dividends, growth, Security, Travel | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | DHI | D.R. Horton Inc. | Consumer Discretionary | Homebuilding | Bull | NYSE | affordability, buybacks, homebuilding, Margins, ROIC, Sunbelt demand | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | JNJ | Johnson & Johnson | Health Care | Pharmaceuticals | Bull | NYSE | dividends, Immunology, litigation, Loe, Oncology, pipeline | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | LBRDK | Liberty Broadband Corp. | Communication Services | Cable & Satellite | Bull | NASDAQ | ARPU, buybacks, cable, deleveraging, Holdco discount, merger | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | KVUE | Kenvue Inc. | Consumer Staples | Personal Care Products | Bull | NYSE | Brand investment, cash flow, dividend, litigation, Margins, restructuring | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | ICE | Intercontinental Exchange Inc. | Financials | Financial Exchanges & Data | Bull | NYSE | buybacks, Data, deleveraging, Exchanges, recurring revenue, Volatility | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | DHI | D.R. Horton Inc. | Consumer Discretionary | Homebuilding | Bull | NYSE | affordability, buybacks, homebuilding, Margins, ROIC, Sunbelt demand | Login |
| Oct 24, 2025 | Fund Letters | Clayton Freeman | JNJ | Johnson & Johnson | Health Care | Pharmaceuticals | Bull | NYSE | dividends, Immunology, litigation, Loe, Oncology, pipeline | Login |
| Aug 7, 2025 | Fund Letters | Clayton Freeman | VST | Vistra Corp. | Utilities | Independent Power Producers & Energy Traders | Bull | New York Stock Exchange | Capacity, data centers, Power, Pricing, utilities | Login |
| TICKER | COMMENTARY |
|---|---|
| ABNB | ABNB: $6B authorized August 2025; $3.7B repurchased |
| 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. |
| CB | Chubb is one of our core property & casualty insurance holdings. It is well-diversified across products and geographies. The company has consistently generated returns on equity comfortably ahead of the industry owing to a combination of running advantaged lines of business with a disciplined underwriting and operating culture. Pricing trends in the insurance markets have generally been strong in recent years, and consequently Chubb has been earning returns on tangible equity in the low 20s. While competitive forces may in time push that back toward a normalized level a few points lower, Chubb we believe would still be valued at 10–11x earnings looking out a few years. |
| DHI | Conversely, our biggest detractors this quarter were DR Horton (DHI), Lennar Corp (LEN), Home Depot (HD). |
| DHR | After lagging through the first three quarters of 2025, Danaher's stock rebounded during Q4 as bioprocessing, life science, and diagnostics demand continued to recover from a cyclical trough. On the 3Q25 call, management established conservative 2026 growth expectations. Revenue is expected to continue to lag long-term trends at 3-6% but improve throughout the year. |
| DKNG | We exited DraftKings due to concerns related to the Railbird acquisition and an increasingly complex competitive environment, including the proliferation of prediction markets. |
| GEO | An overweight to the industrial stock GEO Group Inc. (GEO) detracted from performance. The company is ranked in the top 25% of the universe, driven primarily by its valuation features. Within the valuation composite, the earnings before interest, tax, depreciation and amortization (EBITDA), operating cash flow to price, and performance of value features drove the score up. GEO, which operates correctional and detention facilities for government agencies, fell during the quarter after reporting revenues below expectations and elevated administrative expenses tied to restructuring. |
| LNG | Concerns about liquefied natural gas (LNG) supply/demand fundamentals weighed on the stock, although the company is highly contracted, which limits exposure to commodity prices and other risks. |
| LW | LW was a weaker name after reporting ongoing pricing pressure and industry headwinds, including softer QSR traffic. Management has executed on controllable operational issues but lingering issues have made a recovery more challenging. While these seem to be short-term headwinds, the long-term industry drivers remain attractive. We remain attracted to LW's flexible balance sheet, leading market share, and capital allocation strategy. |
| LYV | The ticketing operator delivered a mixed but broadly encouraging update, although some divisions saw a slowdown in profit growth. |
| MGM | Casino operator MGM Resorts had a relatively weaker 2025 in Las Vegas due to difficult comparisons after multiple years of strength. A significant turnaround at BetMGM plus strong performances at non-Las Vegas regional properties and Macau helped steady the consolidated business throughout the year. Management has corrected some pricing mistakes while making moves to narrow their focus. |
| VST | 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. |
| YOU | Clear Secure, Inc. provides biometric identity and access solutions that enable faster and more secure experiences for travelers and venue participants. We view Clear as an innovative disruptor in identity verification technology that has tapped into the growing demand for enhanced security and convenience. The stock advanced during the quarter as robust travel demand and operational efficiency led to better-than-expected revenue growth and profitability. Management also raised forward guidance and declared a quarterly dividend, reinforcing its commitment to returning capital to shareholders. We continue to see a long growth runway for Clear. |
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