Meridian Funds, managed by ArrowMark Partners, released its first-quarter 2026 investor letter for "Meridian Hedged Equity Fund". A copy of the letter can be downloaded here. The Fund invests in high-quality growth companies and mitigates risk by writing call options. Following the late-February strike on Iran, oil prices surged, leading to a risk-off sentiment, boosting energy sector performance. Large-cap technology stocks declined as investors rotated towards smaller companies and more defensive value investments. Market conditions are becoming challenging due to reduced expectations for a Federal Reserve rate cut and increasing geopolitical uncertainty. The Fund returned 0.08% (net) for the quarter, outperforming the S&P 500 Index, which fell 4.33%, and the CBOE S&P 500 BuyWrite Index, which declined 0.92%. At the end of the period, 43% of the portfolio was unhedged, while the remainder was invested in companies with covered call options. In addition, please check the Fund's top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Meridian Hedged Equity Fund highlighted ACV Auctions Inc. (NYSE:ACVA). ACV Auctions Inc. (NYSE:ACVA) is a digital automotive marketplace that enables buyers and sellers to connect for the online auction of wholesale vehicles. On June 26, 2026, ACV Auctions Inc. (NYSE:ACVA) closed at $6.93 per share, reflecting a market capitalization of $1.21 billion. ACV Auctions Inc. (NYSE:ACVA) posted a one-month return of 5.96%, while its shares lost 57.27% over the past 52 weeks.
Meridian Hedged Equity Fund stated the following regarding ACV Auctions Inc. (NYSE:ACVA) in its Q1 2026 investor letter:
"ACV Auctions Inc. (NYSE:ACVA) operates a national digital marketplace that enables automotive dealers to more efficiently and transparently buy and sell wholesale vehicles. Our investment thesis centers around ACV's integrated ecosystem, high customer retention, and its position as a potential beneficiary of the ongoing digitization within the wholesale automotive market. Despite these structural advantages, the stock fell sharply after the company issued a weaker-than-expected outlook for the first quarter of 2026. Management cited challenging macroeconomic conditions that caused depreciating vehicle values, lower conversion rates, and elevated arbitration costs. While disappointed with the near-term results, we remain confident in the company's management team, business model, and market opportunity. We maintained our position throughout the quarter."
In its first-quarter 2026 investor letter, Meridian Hedged Equity Fund highlighted ACV Auctions Inc. (NYSE:ACVA). ACV Auctions Inc. (NYSE:ACVA) is a digital automotive marketplace that enables buyers and sellers to connect for the online auction of wholesale vehicles. On June 26, 2026, ACV Auctions Inc. (NYSE:ACVA) closed at $6.93 per share, reflecting a market capitalization of $1.21 billion. ACV Auctions Inc. (NYSE:ACVA) posted a one-month return of 5.96%, while its shares lost 57.27% over the past 52 weeks.
Meridian Hedged Equity Fund stated the following regarding ACV Auctions Inc. (NYSE:ACVA) in its Q1 2026 investor letter:
"ACV Auctions Inc. (NYSE:ACVA) operates a national digital marketplace that enables automotive dealers to more efficiently and transparently buy and sell wholesale vehicles. Our investment thesis centers around ACV's integrated ecosystem, high customer retention, and its position as a potential beneficiary of the ongoing digitization within the wholesale automotive market. Despite these structural advantages, the stock fell sharply after the company issued a weaker-than-expected outlook for the first quarter of 2026. Management cited challenging macroeconomic conditions that caused depreciating vehicle values, lower conversion rates, and elevated arbitration costs. While disappointed with the near-term results, we remain confident in the company's management team, business model, and market opportunity. We maintained our position throughout the quarter."
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