Meridian Hedged Equity Fund Maintains Confidence in Vistra Corp. (VST)

VST -1.79% ^GSPC +0.56% CBOE +0.42%

Meridian Funds, managed by ArrowMark Partners, released its fourth-quarter 2025 investor letter for “Meridian Hedged Equity Fund”. A copy of the letter can be downloaded here. U.S. equity markets experienced a quarter supported by optimism about potential monetary easing and caution regarding economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment cooled later in the quarter. Despite this moderation, the quarter contributed positively to robust annual results. In Q4 2025, the Fund gained 0.08% compared to the S&P 500 Index’s 2.66% return and its secondary benchmark, the CBOE S&P 500 BuyWrite Index’s 6.53% return. As the market heads into 2026, the firm is closely watching factors that may affect market returns, including monetary policy and the sustainability of AI investments in the face of high valuations. In this environment, the firm continues its disciplined, bottom-up fundamental research and prudent risk management. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Meridian Hedged Equity Fund highlighted Vistra Corp. (NYSE:VST) as a major performance detractor. Vistra Corp. (NYSE:VST) is a US-based leading integrated retail electricity and power generation company. On February 13, 2026, Vistra Corp. (NYSE:VST) stock closed at $171.49 per share. One-month return of Vistra Corp. (NYSE:VST) was 5.65%, and its shares are up 4.98% over the past twelve months. Vistra Corp. (NYSE:VST) has a market capitalization of $58.105 billion.

Meridian Hedged Equity Fund stated the following regarding Vistra Corp. (NYSE:VST) in its fourth quarter 2025 investor letter:

"Vistra Corp. (NYSE:VST) is a U.S. power producer with a balanced portfolio of nuclear, natural gas, and renewable assets, complemented by a strong retail electricity business. We believe Vistra is uniquely positioned to benefit from surging electricity demand driven by data centers and broader electrification trends. The company operates one of the most attractive generation portfolios in the country, combining reliable nuclear assets with efficient natural gas plants in the tightest power markets, supporting our view that Vistra can earn outsized margins as demand outpaces new supply. The stock underperformed in the period after longer-term guidance fell short of investor expectations, though we were encouraged by the company’s consistent execution, strong balance sheet positioning, and increased share repurchase authorization."

Vistra Corp. (NYSE:VST) is in 28th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 112 hedge fund portfolios held Vistra Corp. (NYSE:VST) at the end of the third quarter, up from 111 in the previous quarter. While we acknowledge the potential of Vistra Corp. (NYSE:VST) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Vistra Corp. (NYSE:VST) and shared a list of best upside stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.