Shelton Equity Income Strategy

Investor Summary

Shelton Capital Management was established in 1985 by Richard Shelton and has grown to manage over $6 billion in assets as of December 2025. The firm is led by an experienced team including CEO and Portfolio Manager Steve Rogers with over 30 years of experience who joined in 1993, Portfolio Manager Barry Martin (CFA) with over 20 years specializing in option strategies, and Portfolio Manager Nick Griebenow (CFA) expert in derivatives trading. The management team averages 12 years of tenure and has developed sophisticated covered call strategies that have earned recognition including Morningstar's 4-star rating. The firm emphasizes fiduciary responsibility and operates primarily on a discretionary basis, making investment decisions in clients' best interests while maintaining regulatory compliance as an SEC-registered investment adviser since 1985.

Fund Strategy

The Shelton Equity Income Strategy seeks to deliver capital appreciation and an enhanced level of income by building a portfolio of carefully selected U.S. stocks and writing calls on the stocks held in the portfolio. The strategy focuses on income-producing U.S. equities with the ability to sell covered call options to enhance cash flow and distributions. The fund typically invests in mid to large cap U.S. corporations, selecting approximately 30 large-cap, income-generating stocks primarily from the S&P 500 across 11 sectors, focusing on those with attractive dividend yields and over-priced call options. Covered calls are strategically written two to six times annually to generate additional income beyond dividends, targeting a cash flow of 5-7% annually excluding dividends. The approach aims to reduce overall portfolio volatility and interest rate risk exposure while differentiating itself through stock-specific fundamental research rather than broad index-based overlays.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
-	9.32%	-

Executive Summary

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.

Core Thesis

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.

Forward Outlook

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.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 17 2026	2026 Q2	BSX, COP, CSCO, CTSH, CVS, FTNT, LRCX, NFLX, NTAP, VZ	AI, Covered Calls, income, Options, semiconductors, technology, volatility	-	Shelton Equity Income delivered 9.32% net in Q2 2026, outperforming its benchmark by 2.27% as markets rebounded on AI enthusiasm and strong earnings. The strategy generated 4.48% year-to-date income from options and dividends. Semiconductor and technology holdings led gains while Energy lagged. The manager maintains conviction in top performers and actively uses volatility to generate premium income, positioning the portfolio to benefit from expected continued market turbulence.
May 13 2026	2026 Q1	AKAM, BAC, BSX, COP, CTSH, DIS, LRCX, MRK, SYF, VZ, XOM	dividends, energy, income, Options, volatility	-	Shelton's covered call strategy outperformed during volatile Q1 2026 despite broad market decline, generating income from options premiums and dividends. Middle East conflict drove energy outperformance while tech and financials lagged. Manager maintains positions in underperformers viewed as attractively valued, believing the strategy benefits from increased volatility ahead.
Feb 9 2026	2025 Q4	CAH, FAST, GM, GOOGL, HPQ, LRCX, MRK, PYPL, TMUS, VICI	dividends, financials, healthcare, income, Options, technology, volatility	-	Shelton's Equity Income Strategy delivered 18.50% net returns in 2025, outperforming its benchmark by over 11% through effective option overwriting that generated 7.97% in premium income. With markets at record highs entering 2026, the strategy is well-positioned to capitalize on expected volatility while providing downside protection amid policy uncertainty and AI investment sustainability concerns.
Nov 21 2025	2025 Q3	AAPL, AMZN, ANET, BSX, CMCSA, CTSH, DVA, FTNT, GM, GOOGL, META, MSFT, NEM, NVDA, PHM, TSLA	AI, equity income, Options, rates, technology, Trade Policy, volatility	-	Shelton's Equity Income Strategy outperformed in Q3 2025, generating strong cash flow from options while benefiting from the AI-driven market rally. With the market at all-time highs facing tariff and Fed policy uncertainty, the strategy is positioned to capitalize on expected Q4 volatility through disciplined option writing and selective equity positioning.
Aug 22 2025	2025 Q2	AAPL, APH, BMY, HPQ, JCI, META, MRK, MSFT, NRG, NVDA, OMC, ORCL, XOM	dividends, income, Options, tariffs, technology, volatility	-	Shelton Equity Income outperformed significantly in Q2 2025 despite dramatic tariff-driven volatility, generating strong option income while benefiting from the technology-led recovery. The strategy is well-positioned for continued volatility as markets navigate tariff impacts on inflation and Fed policy from record highs.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 17 2026

2026 Q2

BSX, COP, CSCO, CTSH, CVS, FTNT, LRCX, NFLX, NTAP, VZ

AI, Covered Calls, income, Options, semiconductors, technology, volatility

Shelton Equity Income delivered 9.32% net in Q2 2026, outperforming its benchmark by 2.27% as markets rebounded on AI enthusiasm and strong earnings. The strategy generated 4.48% year-to-date income from options and dividends. Semiconductor and technology holdings led gains while Energy lagged. The manager maintains conviction in top performers and actively uses volatility to generate premium income, positioning the portfolio to benefit from expected continued market turbulence.

May 13 2026

2026 Q1

AKAM, BAC, BSX, COP, CTSH, DIS, LRCX, MRK, SYF, VZ, XOM

dividends, energy, income, Options, volatility

Shelton's covered call strategy outperformed during volatile Q1 2026 despite broad market decline, generating income from options premiums and dividends. Middle East conflict drove energy outperformance while tech and financials lagged. Manager maintains positions in underperformers viewed as attractively valued, believing the strategy benefits from increased volatility ahead.

Feb 9 2026

2025 Q4

CAH, FAST, GM, GOOGL, HPQ, LRCX, MRK, PYPL, TMUS, VICI

dividends, financials, healthcare, income, Options, technology, volatility

Shelton's Equity Income Strategy delivered 18.50% net returns in 2025, outperforming its benchmark by over 11% through effective option overwriting that generated 7.97% in premium income. With markets at record highs entering 2026, the strategy is well-positioned to capitalize on expected volatility while providing downside protection amid policy uncertainty and AI investment sustainability concerns.

Nov 21 2025

2025 Q3

AAPL, AMZN, ANET, BSX, CMCSA, CTSH, DVA, FTNT, GM, GOOGL, META, MSFT, NEM, NVDA, PHM, TSLA

AI, equity income, Options, rates, technology, Trade Policy, volatility

Shelton's Equity Income Strategy outperformed in Q3 2025, generating strong cash flow from options while benefiting from the AI-driven market rally. With the market at all-time highs facing tariff and Fed policy uncertainty, the strategy is positioned to capitalize on expected Q4 volatility through disciplined option writing and selective equity positioning.

Aug 22 2025

2025 Q2

AAPL, APH, BMY, HPQ, JCI, META, MRK, MSFT, NRG, NVDA, OMC, ORCL, XOM

dividends, income, Options, tariffs, technology, volatility

Shelton Equity Income outperformed significantly in Q2 2025 despite dramatic tariff-driven volatility, generating strong option income while benefiting from the technology-led recovery. The strategy is well-positioned for continued volatility as markets navigate tariff impacts on inflation and Fed policy from record highs.

QUARTER	THEMES	TAGS
2026 Q2	AI AI infrastructure investment remains a powerful theme driving markets, with over 96% of Nasdaq-100 upside in H1 2026 coming from 10 stocks. The theme is entering a phase of greater scrutiny as investors look for returns on massive capital deployed. Semiconductor and mega-cap technology stocks led the quarter's rally driven by renewed AI enthusiasm.	Infrastructure Semiconductors Technology Nasdaq
	Volatility The quarter experienced meaningful volatility driven by geopolitical tensions in the Middle East and oil price fluctuations. Markets rebounded sharply from Q1 weakness but faced persistent cross-currents. The manager expects continued volatility from geopolitical tensions and oil shock aftereffects into the second half of 2026.	Geopolitical Oil Risk
	Semiconductors Semiconductor stocks were among the strongest performers, with Lam Research (LRCX) leading the portfolio's gains. The sector benefited from AI infrastructure enthusiasm and drove Information Technology's 31.79% quarterly return. The manager continues to hold semiconductor positions and actively buys them back when called away, viewing them as attractively valued.	AI Technology Equipment
	Oil Oil prices were elevated during the quarter due to conflict with Iran, driving inflation higher. Energy was the worst performing sector at -13.45% as tensions lessened throughout the quarter, reversing earlier gains. The reduction in Iran tensions is viewed positively, though downstream effects on inflation and supply chains will persist.	Iran Geopolitical Inflation
	Inflation Inflation ticked up notably during the quarter, driven primarily by elevated oil prices caused by the Iran conflict. This has created expectations for at least one 25 basis point rate hike in 2026. Inflation remains a focus area with persistent effects expected into the second half of the year.	Oil Rates Fed
2026 Q1	Oil Energy sector saw significant outperformance driven by increasing oil prices from the Iran War. Oil prices being driven up dramatically due to Middle East conflict, with potential impact on inflation and interest rate policy being closely watched by investors.	Oil Energy Iran Conflict Inflation
	Volatility First quarter marked sharp departure from strong momentum with heightened volatility and broad market pullback. Market exhibited much more volatility since Middle East conflict started. Manager believes Equity Income strategy is well positioned to take advantage of current volatile market conditions.	Volatility Options Market Risk
	Dividends Strategy generated 0.41% from dividends during first quarter as part of the income-focused approach. Portfolio continues to focus on dividend-paying stocks as core component of the equity income strategy.	Dividends Income Cash Flow
2025 Q4	AI The market finished the quarter in positive territory after a turbulent stretch marked by policy uncertainty and concerns about the sustainability of AI-driven investment. Looking ahead, the AI trade will be in focus as investors may start to expect companies to show returns on the capital being invested in AI infrastructure.	Artificial Intelligence Infrastructure Investment
	Volatility The fourth quarter delivered a continuation of the upside experienced since April, but hit a shaky November which marked the first down month for the S&P 500 since the tariff-driven selloff in the second quarter. The strategy is well positioned to capitalize on the volatility and buffer any pullbacks in the near term.	Market Volatility Options Downside Protection
	Dividends The strategy generated 0.40% from dividends during the fourth quarter, bringing the full-year cash flow to 1.56% from dividends. This represents a core component of the equity income strategy's total return generation.	Dividend Income Cash Flow Income Generation
2025 Q3	AI The rally was sustained by enthusiasm for the AI trade, with the Magnificent Seven stocks reclaiming leadership after lagging earlier in the year. AI continues to drive market momentum and sector rotation.	Artificial Intelligence Technology Growth Leadership
	Volatility The strategy is positioned to capitalize on market volatility through option writing. October is historically choppy, and both trade and monetary policy could exacerbate volatility in the final quarter.	Options Risk Management Market Timing Hedging
	Rates The Federal Reserve cut rates by 0.25% in September, bringing the federal funds rate to 4.00-4.25%. The market is monitoring Fed comments for future rate cut paths amid economic uncertainty.	Federal Reserve Monetary Policy Interest Rates Economic Policy
	Trade Policy The market experienced volatility in spring due to tariff uncertainty, followed by a summer rebound. The expiration of temporary tariff pause in Q4 could impact inflation and earnings.	Tariffs Trade Policy Inflation
2025 Q2	Volatility The second quarter brought dramatic market volatility with the S&P 500 plunging into bear market territory in March-April due to Liberation Day tariffs before staging one of the fastest recoveries in history. The strategy is positioned to capitalize on volatility and buffer pullbacks.	Volatility Market Recovery Options
	Trade Policy Liberation Day tariffs caused significant market disruption in March-April, briefly pushing markets into bear territory before a temporary pause triggered recovery. The market will closely watch tariff impacts on inflation and company financials going forward.	Tariffs Trade Policy Inflation

QUARTER

THEMES

AI

AI infrastructure investment remains a powerful theme driving markets, with over 96% of Nasdaq-100 upside in H1 2026 coming from 10 stocks. The theme is entering a phase of greater scrutiny as investors look for returns on massive capital deployed. Semiconductor and mega-cap technology stocks led the quarter's rally driven by renewed AI enthusiasm.

Infrastructure Semiconductors Technology Nasdaq

Volatility

The quarter experienced meaningful volatility driven by geopolitical tensions in the Middle East and oil price fluctuations. Markets rebounded sharply from Q1 weakness but faced persistent cross-currents. The manager expects continued volatility from geopolitical tensions and oil shock aftereffects into the second half of 2026.

Geopolitical Oil Risk

Semiconductors

Semiconductor stocks were among the strongest performers, with Lam Research (LRCX) leading the portfolio's gains. The sector benefited from AI infrastructure enthusiasm and drove Information Technology's 31.79% quarterly return. The manager continues to hold semiconductor positions and actively buys them back when called away, viewing them as attractively valued.

AI Technology Equipment

Oil

Oil prices were elevated during the quarter due to conflict with Iran, driving inflation higher. Energy was the worst performing sector at -13.45% as tensions lessened throughout the quarter, reversing earlier gains. The reduction in Iran tensions is viewed positively, though downstream effects on inflation and supply chains will persist.

Iran Geopolitical Inflation

Inflation

Inflation ticked up notably during the quarter, driven primarily by elevated oil prices caused by the Iran conflict. This has created expectations for at least one 25 basis point rate hike in 2026. Inflation remains a focus area with persistent effects expected into the second half of the year.

Oil Rates Fed

2026 Q1

Oil

Energy sector saw significant outperformance driven by increasing oil prices from the Iran War. Oil prices being driven up dramatically due to Middle East conflict, with potential impact on inflation and interest rate policy being closely watched by investors.

Oil Energy Iran Conflict Inflation

Volatility

First quarter marked sharp departure from strong momentum with heightened volatility and broad market pullback. Market exhibited much more volatility since Middle East conflict started. Manager believes Equity Income strategy is well positioned to take advantage of current volatile market conditions.

Volatility Options Market Risk

Dividends

Strategy generated 0.41% from dividends during first quarter as part of the income-focused approach. Portfolio continues to focus on dividend-paying stocks as core component of the equity income strategy.

Dividends Income Cash Flow

2025 Q4

AI

The market finished the quarter in positive territory after a turbulent stretch marked by policy uncertainty and concerns about the sustainability of AI-driven investment. Looking ahead, the AI trade will be in focus as investors may start to expect companies to show returns on the capital being invested in AI infrastructure.

Artificial Intelligence Infrastructure Investment

Volatility

The fourth quarter delivered a continuation of the upside experienced since April, but hit a shaky November which marked the first down month for the S&P 500 since the tariff-driven selloff in the second quarter. The strategy is well positioned to capitalize on the volatility and buffer any pullbacks in the near term.

Market Volatility Options Downside Protection

Dividends

The strategy generated 0.40% from dividends during the fourth quarter, bringing the full-year cash flow to 1.56% from dividends. This represents a core component of the equity income strategy's total return generation.

Dividend Income Cash Flow Income Generation

2025 Q3

AI

The rally was sustained by enthusiasm for the AI trade, with the Magnificent Seven stocks reclaiming leadership after lagging earlier in the year. AI continues to drive market momentum and sector rotation.

Artificial Intelligence Technology Growth Leadership

Volatility

The strategy is positioned to capitalize on market volatility through option writing. October is historically choppy, and both trade and monetary policy could exacerbate volatility in the final quarter.

Options Risk Management Market Timing Hedging

Rates

The Federal Reserve cut rates by 0.25% in September, bringing the federal funds rate to 4.00-4.25%. The market is monitoring Fed comments for future rate cut paths amid economic uncertainty.

Federal Reserve Monetary Policy Interest Rates Economic Policy

Trade Policy

The market experienced volatility in spring due to tariff uncertainty, followed by a summer rebound. The expiration of temporary tariff pause in Q4 could impact inflation and earnings.

Tariffs Trade Policy Inflation

2025 Q2

Volatility

The second quarter brought dramatic market volatility with the S&P 500 plunging into bear market territory in March-April due to Liberation Day tariffs before staging one of the fastest recoveries in history. The strategy is positioned to capitalize on volatility and buffer pullbacks.

Volatility Market Recovery Options

Trade Policy

Liberation Day tariffs caused significant market disruption in March-April, briefly pushing markets into bear territory before a temporary pause triggered recovery. The market will closely watch tariff impacts on inflation and company financials going forward.

Tariffs Trade Policy Inflation

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
No Elevator Pitches found

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

No Elevator Pitches found

TICKER	COMMENTARY
LRCX	Our strongest performers this quarter were Lam Research Corp (LRCX), Fortinet Inc (FTNT), Cisco Systems Inc (CSCO), NetApp Inc (NTAP), and CVS Health Corp (CVS). We continue to hold all of these positions, actively buying them back if called away, as we still view them as having attractive value relative to peers.
FTNT	Our strongest performers this quarter were Lam Research Corp (LRCX), Fortinet Inc (FTNT), Cisco Systems Inc (CSCO), NetApp Inc (NTAP), and CVS Health Corp (CVS). We continue to hold all of these positions, actively buying them back if called away, as we still view them as having attractive value relative to peers.
CSCO	Our strongest performers this quarter were Lam Research Corp (LRCX), Fortinet Inc (FTNT), Cisco Systems Inc (CSCO), NetApp Inc (NTAP), and CVS Health Corp (CVS). We continue to hold all of these positions, actively buying them back if called away, as we still view them as having attractive value relative to peers.
NTAP	Our strongest performers this quarter were Lam Research Corp (LRCX), Fortinet Inc (FTNT), Cisco Systems Inc (CSCO), NetApp Inc (NTAP), and CVS Health Corp (CVS). We continue to hold all of these positions, actively buying them back if called away, as we still view them as having attractive value relative to peers.
CVS	Our strongest performers this quarter were Lam Research Corp (LRCX), Fortinet Inc (FTNT), Cisco Systems Inc (CSCO), NetApp Inc (NTAP), and CVS Health Corp (CVS). We continue to hold all of these positions, actively buying them back if called away, as we still view them as having attractive value relative to peers.
BSX	Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We have been actively moving out of BSX and CTSH, writing aggressive calls to have the positions called away.
CTSH	Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We have been actively moving out of BSX and CTSH, writing aggressive calls to have the positions called away.
NFLX	Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We continue holding NFLX, COP, and VZ as we still view them as attractively valued.
COP	Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We continue holding NFLX, COP, and VZ as we still view them as attractively valued.
VZ	Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We continue holding NFLX, COP, and VZ as we still view them as attractively valued.

TICKER

COMMENTARY

LRCX

Our strongest performers this quarter were Lam Research Corp (LRCX), Fortinet Inc (FTNT), Cisco Systems Inc (CSCO), NetApp Inc (NTAP), and CVS Health Corp (CVS). We continue to hold all of these positions, actively buying them back if called away, as we still view them as having attractive value relative to peers.

FTNT

CSCO

NTAP

CVS

BSX

Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We have been actively moving out of BSX and CTSH, writing aggressive calls to have the positions called away.

CTSH

NFLX

Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We continue holding NFLX, COP, and VZ as we still view them as attractively valued.

COP

Our underperformers for the quarter were Boston Scientific Co (BSX), Cognizant Technology (CTSH), Netflix Inc (NFLX), Conoco Phillips (COP), and Verizon Communications (VZ). We continue holding NFLX, COP, and VZ as we still view them as attractively valued.

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
No Recent Buys Data

Ticker

Put/Call

Amount Bought

Shares Bought

% Change

Weight %

No Recent Buys Data

Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
No Recent Sells Data

Ticker

Put/Call

Amount Sold

Shares Sold

% Change

Weight %

Status

No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

Industry

Prev Quarter %

Current Quarter %

Change

No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Volatility

Semiconductors

Oil

Inflation

Oil

Volatility

Dividends

AI

Volatility

Dividends

AI

Volatility

Rates

Trade Policy

Volatility

Trade Policy

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Barry Martin Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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Shelton Equity Income Strategy