| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.9% | 5.2% | 18.8% |
| 2025 | 2024 |
|---|---|
| 18.8% | 11.3% |
The Gabelli Dividend Growth Fund delivered strong performance in Q4 2025, returning 5.15% versus 2.7% for the S&P 500, driven by successful stock selection in healthcare, financials, and selective AI exposure. While AI euphoria faded somewhat amid concerns over escalating capex commitments, the Fund benefited from healthcare sector strength, with the S&P healthcare sector gaining 11.2% on M&A activity and pharmaceutical deals. Top contributors included Merck, which reversed earlier declines as investors reappreciated the franchise quality, Alphabet as the clear AI winner with strong earnings and YouTube growth, and Newmont benefiting from gold's strong performance. The Fund maintained a modestly defensive posture but benefited from larger position sizes in appreciating stocks. Financial holdings gained from yield curve dynamics and deregulation optimism. Despite challenges in consumer staples from GLP-1 concerns and promotional pressure, the Fund's focus on dividend-paying stocks with strong capital allocation and exposure to M&A activity drove outperformance.
The Fund focuses on dividend-paying stocks with strong fundamentals and capital allocation, benefiting from M&A activity, sector rotation into healthcare and financials, and selective exposure to AI implementors rather than infrastructure plays.
The manager expects continued opportunities in AI implementors including distributors that can replace SG&A labor with AI, financial and technology companies with large headcounts, and media companies with labor intensive customer service operations. The tone suggests cautious optimism about market conditions ahead.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 18 2026 | 2025 Q4 | AIG, AMZN, C, GOOG, IP, MDLZ, MRK, MS, NEM, ORCL, PNC, PRGO, SATS, WFC | AI, dividends, financials, gold, healthcare, value |
GOOG MS NEM |
AI euphoria faded in Q4 but companies in the AI ecosystem continued to deliver impressive results against high expectations. Concerns mounted around ever-increasing capex outlays and financing of sizable capex commitments. The commoditized see-saw battle among five major LLMs for next generation model leadership continues. The Fund focuses on dividend-paying stocks and benefited from M&A activity and a large position in gold miner Newmont. Despite a modestly defensive posture throughout 2025, the Fund benefited from appreciating stocks that were sized as larger positions. Gold had its best year with the price of gold benefiting the Fund's position in gold miner Newmont, which was one of the top contributors. Gold served as an inflation hedge and store of value amid macroeconomic uncertainty. |
| Nov 16 2025 | 2025 Q3 | C, CARR, KDP, NEM | CashFlow, defensiveness, dividends, pricingpower, Quality | MSGS US | The letter underscores dividend growth as a core driver of long-term equity returns, supported by companies with strong cash flows, robust balance sheets, and pricing power. Amid moderating economic growth and easing inflation, dividend growers offer defensive characteristics and attractive relative valuations. Management continues to emphasize high-quality franchises with durable competitive positions and consistent distribution increases. |
| Jun 30 2025 | 2025 Q2 | KR, WCC | cash flow, catalysts, Dividend Growth, private market value, shareholder returns |
KR WCC |
The letter emphasizes dividend growth investing grounded in private market value and identifiable catalysts. Companies with rising cash flows, strong franchises, and the ability to grow payouts are favored. Dividend growth is positioned as both an income and compounding strategy. |
| Mar 31 2025 | 2025 Q1 | ZBN | - | - | |
| Dec 31 2024 | 2024 Q4 | AMZN, KR, SPM | - | - | |
| Sep 30 2024 | 2024 Q3 | AXP, C, CARR, NXPI, SLB | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
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 |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
GoldGold returned +65% in dollars in 2025, driven by broadening demand from central banks, professional and retail investors. Central banks now hold 24% of reserves in gold versus 23% in US Treasuries for the first time. Maintained 12% portfolio allocation throughout the year. |
Central Banks Reserves Diversification Demand | |
| 2025 Q3 |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth |
| 2025 Q2 |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 16, 2025 | Fund Letters | Justin Bergner | MSGS US | Madison Square Garden Sports Corp. | Communication Services | Sports Franchises & Entertainment | Bull | NYSE | asset value, inflation hedge, Knicks, Media rights, Sports Franchises | Login |
| Jun 30, 2025 | Fund Letters | Justin Bergner | KR | The Kroger Co. | Consumer Staples | Food Retail | Bull | New York Stock Exchange | analytics, Data, Loyalty, Margins, media, Private, retail, Value | Login |
| Jun 30, 2025 | Fund Letters | Justin Bergner | WCC | Wesco International, Inc. | Industrials | Trading Companies & Distributors | Bull | New York Stock Exchange | Automation, cashflow, datacenter, deleveraging, Distribution, inflation, Margins, utility | Login |
| Feb 18, 2026 | Fund Letters | Justin Bergner | GOOG | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | AI, CapEx, cloud, Optionality, Search | Login |
| Feb 18, 2026 | Fund Letters | Justin Bergner | MS | Morgan Stanley | Financials | Investment Banking & Brokerage | Bull | New York Stock Exchange | asset management, Fees, ROE, scale, wealth management | Login |
| Feb 18, 2026 | Fund Letters | Justin Bergner | NEM | Newmont Corporation | Materials | Gold | Bull | New York Stock Exchange | acquisition, diversification, Gold, Integration, Real Rates | Login |
| TICKER | COMMENTARY |
|---|---|
| AIG | Property and casualty insurer American International Group (AIG) reported better-than-expected earnings, with strong expense management and share repurchases offsetting a weakening pricing environment. Shares also benefited from reports that fellow insurer Chubb is exploring a potential acquisition of the company. |
| 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. |
| C | Money center bank Citigroup rose amid strong capital markets activity and benign credit conditions. The company continued to repurchase stock and return capital to shareholders, while expenses related to its transformation are expected to decline next year. |
| GOOG | From the moment OpenAI hit the scene with ChatGPT 3.5 in the Fall of 2022, Google was a perceived loser and thousands of pontificators warned about the end of search. Fast forward three years and this was Google Search's fastest quarter of revenue growth since Q1 2022, when the reopening and pandemic were still considerable drivers of results. In parallel with the Search re-acceleration, Google has also emerged as a leader in AI itself. This combination has been potent for Google's stock and could not have opened on Search alone, given the terminal value fears. |
| IP | International Paper's stock has roundtripped after nearly doubling in 2024 after acclaimed CEO Andy Silvernail took the helm. Despite aggressive cost and asset optimization actions, demand for containerboard has softened in the U.S. and Europe, with price pressure in Europe. |
| MDLZ | Mondelez International is a global snacking powerhouse with leading market share positions in crackers, cookies and chocolate. The brand portfolio houses iconic names like Cadbury, Milka, Toblerone, Oreo and Ritz. Mondelez possesses a unique global footprint that over-indexes to snacking occasions. Snacking is an advantaged category that benefits from robust pricing power, low private label competition and rising per capita consumption. We believe these attributes will help Mondelez sustain industry-leading growth. A rapid rise in commodity costs has temporarily depressed margins, masking the company's true earnings power. We believe Mondelez's strong pricing power and commodity relief will help improve margins. The short-term fears surrounding commodity inflation allowed us to purchase shares at a discounted valuation relative to history, peers and the broader market. |
| MRK | Top gainers in the Fund this quarter included Merck (+26%) |
| MS | During the quarter, the Fund invested in Morgan Stanley, a leading global investment bank and wealth management firm. Morgan Stanley has successfully diversified its business beyond cyclical banking and trading fees into more recurring wealth and investment management. These businesses collectively oversee $9.3 trillion in client assets that generate predictable, capital-light revenue that grows from inflows and market appreciation. |
| NEM | Newmont delivered +18% performance over the quarter, contributing meaningfully to portfolio returns as gold gained another 12%, taking its 2025 gains to an extraordinary 64%. |
| 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. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| PNC | We initiated a preferred perpetual security in this bank holding company due to its robust capital position. |
| PRGO | Perrigo, an over-the-counter (OTC) pharmaceuticals manufacturer, saw shares decline following weak results in its infant formula and European OTC businesses. Long term, the company is conducting a strategic review of its infant formula business and will refocus on consumer-oriented operations by expanding the range of products offered alongside its store-brand OTC portfolio, actions we view positively. |
| SATS | December saw the GA-Courtenay Special Situations fund (USD I) appreciate by +6.3%, resulting in a return for 2025 of +6.5%. The positive result was primarily driven by price appreciation in Echostar and Filtronic, the fund's largest two positions, and both publically listed proxies for SpaceX. |
| WFC | and money center banks Citigroup and Wells Fargo, all following strong performance |
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