July 2025: Episode 1
Hi and welcome to the July 2025 monthly market mashup video for the Oak Harvest Long Short Hedged Equity Mutual Fund. Oh, my name is James McFarland, head of trading for Oak Harvest Financial Group. This is our monthly update video, and for more detailed information on the Oak Harvest Long Short Hedged Equity Mutual Fund, its performance, and the multi-leg strategy we use, check out OakHarvestFunds.com. You can find that link in the description below.
Now, in this monthly series, we, the portfolio management team, cover three questions. First, what was the team thinking heading into the month? Second, what key investment actions did we take during the month? And finally, how did things play out for the market and for our fund? Our goal with this is to give our investors a look behind the curtain to gain insight into the decisions we are making on a month-to-month basis.
Now to do this, I’m joined by our Chief Investment Officer, Chris Perras, and our Director of Investments, Charles Scavone.
Market Outlook
James: So, Chris, July 2025. What were we thinking as we head into the month?
Chris: Thanks, James. We just had three positive months coming off the V-bottom in April. July, seasonally, is a strong month of the year, second best return historically. The fund was doing well year to date versus its peers. Hedging costs were actually very low for the month, so we carried some extra protection in the form of some market hedge and some puts going into the month.
On the interest rate side, we thought inflation was overdone, real growth is slowing, and thought that earnings would be relatively good coming into July. So that’s a fairly strong background as we went into the month.
Investment Actions
James: Very good. And so, based off of that as our starting point, what were the key investment actions we took during the month?
Charles: Yeah, thanks, James. Kind of piggybacking upon what Chris said, coming off of the first leg of earnings reporting season, we were very, very focused on our highest conviction ideas, trying to do a good job of identifying secular trends that would create a nice tailwind behind a number of the companies in which we invest.
Obviously, one of those is AI, artificial intelligence, but we approach it from a little bit of a different perspective, perhaps, in that there’s not just a singular way to do that. Right. So we actually have invested in a number of industrial companies, for instance, companies that support the buildout of the AI infrastructure, the cooling needs of the large data centers.
Outside of industrials, people are coming to realize quickly that the energy requirements of these large data centers are just enormous. So it’s actually led to a renaissance of nuclear energy. And so now nuclear is a real opportunity to help lower the cost of powering these centers.
And then, obviously, technology itself, and that’s really in terms of semiconductors, networking, and then the software that is being enabled and empowered by AI. That represents the long side of our book, where we’re trying to buy stocks.
Short Positions
James: What about on the short side, where we’re actually looking to sell stocks, expecting them to go down in price?
Charles: Yeah, so there we tend to be more specific in nature, action-oriented in nature. And there are still some trends that are involved that create headwinds for these companies.
We see cracks in low-end consumer credit, so companies that provide financing there would be an area of short interest for us. We’ve seen a big slowdown in travel-related expenditure, so areas along those lines. And then this whole idea of “buy now, pay later” has led to some interesting companies who we don’t believe have a viable model going forward, those would be areas where we’d be interested on the short side.
Hedging Program
James: Right. And then the last leg of our strategy, so to speak, is the hedging program, where we’re looking to manage some of the inherent risks associated with investing in the stock market. What were we doing in July for that part of it?
Charles: Yeah, so the hedging program, right, we try and embed our active risk as fund managers in the stock side. That’s where we believe we can add value and have some control. But you can’t control the systematic risk that resides in the market, so we try and take an active approach to that as well, hedging out some of that risk.
As Chris had alluded to as well, as markets moved higher, the hedging costs moved lower. So we added to our hedges, and, you know, there’s a cost to that. What we try and do is mitigate some of that cost with an active covered call writing program, where we generate income to try and offset some of the cost of that hedge.
But there’s no free lunch. And the other thing is, you don’t necessarily realize the value of that hedge immediately. So we’ll see what transpires as we continue through the year.
Market Recap
James: Indeed we will. Thank you very much, Charles. So, Chris, then to close this out, how did the month of July go?
Chris: Yeah, thanks, James. Overall, equity markets performed well in July. The S&P was up a little over 2.25%. The Nasdaq was up a little more than that. The Russell, which is small-cap stocks, it’s been lagging for years, was up a little less than that. Some international markets, like Korea, were up over 5% for the month.
The fund itself was up a little over a half percent. We lagged the S&P by about 1.75%. But the hedging costs, the security selection, and industry selection actually outperformed the S&P 500.
As Charles previously said, the hedging program doesn’t show its benefit every week or every month or every quarter, but it’s something that we do consistently in the fund to manage risk.
Getting to the meat of what took place in the fund in single stocks, our top three contributing stocks for the month all started with the letter “C,” and in fact, five of the top ten were “C” stocks.
The top contributor was a company here in Houston that provides HVAC, heating, ventilation, and air conditioning systems, called Comfort Systems (ticker: FIX). It was up over 30% for the month, and it’s not a tech stock.
Another winning stock or two, machine vision company Cognex was a big winner for us, and electronics manufacturer Celestica, another “C,” both were up over 28% on the month.
Those were the winners. Got to talk about some misses during the month too, if we’re going to talk about wins. It was a tough month for software stocks in the market versus other hardware-oriented technology companies.
We had an investment in a company called Freshworks, which had great earnings numbers, but those earnings were not rewarded, and some investors tossed it to the curb. That stock was down over 12% in the month.
In the semi equipment space, investors didn’t take ASML Lithography earnings in good light and sent the stock down almost 9% for the month.
To close, for the month of July, it was a positive month, with a little bit of a lag behind the benchmark, mainly due to the hedging program we’re using to protect downside risk.
James: Exactly right. Very good. Thank you, Chris. Thank you, Charles, and thank you for joining us this month.
I hope you found this video to be helpful and informative. Again, for more detailed information on investing with us, check out OakHarvestFunds.com. You can find that link in the description below.
Thanks again for watching, and we’ll see you in the next video.
Investors should consider the investment objectives, risks, and charges and expenses of the Fund before investing. The prospectus contains this and other information about the Fund and should be read carefully before investing. The prospectus can be found by visiting our website at oakharvestfunds.com, or may be obtained by calling 833-549-4121.
ConsolidatedHoldings_July 31 2025 PDF
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The content contained therein is informational purposes only. This information is not intended to provide tax or legal advice or personalized investment advice, nor is it an offer or solicitation to buy or sell securities. Views and opinions may change based on new information or analysis. Oak Harvest makes no assurance as to the accuracy of any forecast made. Figures, references, and data cited in all written and audio content are obtained from sources believed to be reliable, but we do not guarantee timeliness or accuracy of this information.
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Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser. Oak Harvest is not affiliated with Ultimus Fund Distributors, LLC.
