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 PayPal Holdings, Inc. (NASDAQ:PYPL). PayPal Holdings, Inc. (NASDAQ:PYPL) is a leading technology platform that provides digital payment solutions for merchants and consumers. On June 26, 2026, PayPal Holdings, Inc. (NASDAQ:PYPL) closed at $44.29 per share, reflecting a market capitalization of $39.07 billion. PayPal Holdings, Inc. (NASDAQ:PYPL) posted a one-month return of -1.99%, and its shares lost 40.41% over the past 52 weeks.
Meridian Hedged Equity Fund stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2026 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) operates a two-sided digital payments network, offering consumer digital wallets and merchant checkout solutions. While the company benefits from significant scale and strong free cash flow, the investment thesis has been challenged by market share losses to competitors such as Apple Pay and the margin-dilutive nature of its Braintree processing business. The stock declined after the company reported a sharp deceleration in branded checkout volume growth and weakness across key international markets. Execution challenges also weighed on results as the new CEO guided toward modestly lower adjusted earnings and emphasized the need to heavily reinvest in product experience and loyalty programs to stabilize the core business. We maintained our position throughout the quarter.”
