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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Shelton Equity Income Strategy delivered a 9.32% net return in Q2 2026, outperforming the CBOE BuyWrite Index by 2.27%, as markets rebounded sharply from first quarter weakness. The rally was driven by strong corporate earnings and renewed enthusiasm around AI infrastructure, with semiconductor and mega-cap technology stocks leading gains. Information Technology surged 31.79% while Energy declined 13.45% as Iran tensions eased. The strategy generated 2.64% in option premiums and 0.32% in dividends during the quarter. Top performers included semiconductor equipment leader Lam Research and cybersecurity name Fortinet, which the manager continues to hold and actively repurchases when called away. The portfolio is exiting underperformers Boston Scientific and Cognizant Technology through aggressive call writing. Looking forward, the manager expects persistent volatility from geopolitical tensions and oil shock aftereffects, while the AI theme faces greater scrutiny on capital deployment returns. The strategy is well positioned to capitalize on continued market volatility through its covered call approach.
The Shelton Equity Income Strategy uses covered call writing to generate consistent income from option premiums while maintaining exposure to large-cap equities, positioning the portfolio to benefit from market volatility while capturing upside in quality technology and healthcare names.
Markets face complex cross-currents as Q2 concludes. The reduction in Iran tensions is positive, but downstream effects on inflation, supply chain normalization, and monetary policy will persist into the second half of 2026. The AI investment theme remains powerful but is entering a phase of greater scrutiny as investors look for returns on massive capital deployed. With persistent volatility expected from geopolitical tensions and oil shock aftereffects, the Equity Income strategy is well positioned to take advantage of current conditions.
As of Jul 21, 2026
Quality Value / Growth
Lead Portfolio Manager
Neutral / Balanced
Market Conviction
The letter names 10 specific holdings with clear performance attribution and discusses them individually. However, no position sizing is provided, the portfolio appears diversified across multiple sectors, and the strategy is mechanically driven by covered call writing rather than concentrated conviction bets. The manager uses hedged language around being positioned for volatility and describes a systematic approach to exits through call writing. The absence of position sizes, concentration data, or strong declarative language about specific thesis conviction caps the score in the low-moderate range.
Growth Outlook
Market outlook remains above average conviction: While underperforming in Q4, Shelton Equity Income Strategy finished 2025 with stellar full-year outperformance of 18.50% net (vs. BXM 8.91%), pruning laggards to focus on robust y...
Risk Appetite
Risk appetite posture is moderate conviction: While underperforming in Q4, Shelton Equity Income Strategy finished 2025 with stellar full-year outperformance of 18.50% net (vs. BXM 8.91%), pruning laggards to focus on robust y...
Capital Deployment
The manager is actively repurchasing top performers when called away, indicating some deployment activity. However, this is offset by simultaneously exiting two underperformers through aggressive call writing. No cash level changes are disclosed, and the overall tone suggests rotation and rebalancing rather than net new capital deployment. The strategy appears to maintain steady exposure through its covered call mandate rather than materially increasing or decreasing risk, resulting in a near-neutral score with slight positive bias for the repurchase activity.
Forward Guidance
Forward guidance signal: While underperforming in Q4, Shelton Equity Income Strategy finished 2025 with stellar full-year outperformance of 18.50% net (vs. BXM 8.91%), pruning laggards to focus on robust y...
Language Signal
The letter contains more bullish language around the rebound, strong earnings, attractive valuations in holdings, and being well positioned than bearish language. However, risk-related terms appear frequently including volatility, geopolitical tensions, scrutiny, inflation, and persistent challenges. The balance tilts moderately positive with phrases like attractive value, strong performers, and well positioned outweighing caution words, but the mix is substantial enough to prevent a higher score.
Perceived Risk
Perceived risk level is evaluated as above average conviction. While underperforming in Q4, Shelton Equity Income Strategy finished 2025 with stellar full-year outperformance of 18.50% net (vs. BXM 8.91%), pruning laggards to focus on robust y...
Opportunity Density
The manager identifies five strong performers viewed as having attractive value relative to peers and worth actively repurchasing. Three additional holdings are maintained as attractively valued despite underperformance. The letter describes the strategy as well positioned to take advantage of current conditions, suggesting a reasonably rich opportunity set. However, the manager is also exiting two positions, indicating selectivity is required. The balance suggests a moderately attractive opportunity environment with good ideas available but requiring discernment.
Time Horizon
The letter focuses primarily on quarterly performance and near-term market dynamics including geopolitical developments, inflation trends, and second half 2026 expectations. The covered call strategy itself is inherently shorter-term in nature with monthly or quarterly option cycles. While the manager discusses holding positions and repurchasing them when called away, suggesting some patience, there is no discussion of multi-year theses or long-term compounding. The time horizon appears to be 6-18 months based on the forward outlook language, placing it in the medium-term range.
Top Conviction Themes
Key Catalysts
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