Meridian Funds, managed by ArrowMark Partners, recently shared its insights in the third-quarter 2025 investor letter for the Meridian Hedged Equity Fund. The letter, which can be downloaded from this link, highlighted the market’s focus on policy easing over weakening fundamentals, resulting in substantial gains despite concerns about stagflation.
During the quarter, the Meridian Hedged Equity Fund saw a net return of 1.67%, in comparison to the S&P 500 Index’s 8.13% returns and the CBOE S&P 500 BuyWrite Index’s 3.53% returns. The fund’s top five holdings are also available for review to understand its investment strategy for 2025.
One stock that stood out in the fund’s portfolio is D.R. Horton, Inc. (NYSE:DHI), a leading homebuilding company. Despite a one-month return of -6.51%, the stock gained 2.42% in value over the past 52 weeks. As of December 23, 2025, D.R. Horton, Inc. (NYSE:DHI) closed at $144.47 per share, with a market capitalization of $42.194 billion.
The investor letter provided an in-depth analysis of D.R. Horton, Inc. (NYSE:DHI), highlighting its position as the largest homebuilder in the United States by volume. The company’s focus on the entry-level and first-time buyer segments, operational efficiency, and strong cash flow generation were key factors driving its performance. Management’s commitment to capital returns through buybacks and a ‘land-light’ strategy further solidified its position in the market.
Despite its strong performance, D.R. Horton, Inc. (NYSE:DHI) is not among the 30 Most Popular Stocks Among Hedge Funds. However, 61 hedge fund portfolios held the stock at the end of the third quarter, down from 64 in the previous quarter. While the potential of D.R. Horton, Inc. (NYSE:DHI) as an investment is recognized, some AI stocks may offer greater upside potential with less downside risk.
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Overall, the Meridian Hedged Equity Fund’s focus on strategic investments like D.R. Horton, Inc. (NYSE:DHI) reflects its commitment to delivering strong returns for investors in a challenging market environment. By leveraging its expertise and research-driven approach, the fund continues to identify promising opportunities for growth and value creation.
