October 2025: Episode 4

James McFarland (00:00.13)
Hello and welcome to October 2025’s episode of The Long and the Short of It, where the investment team at Oak Harvest recaps the last month for the Oak Harvest Long Short Hedged Equity Mutual Fund, OHFGX. I am James McFarland here with Chris Paris and Charles Scavone. The three of us will be representing the OHFGX portfolio management team. Now for additional information on OHFGX, check out oakharvestfunds.com. You can find the link in the description below.

As usual, before we get to the meat of today’s video, let’s go over the return data for OHFGX as of the end of October as presented on Morningstar’s website. The net asset value for OHFGX hit another new all-time high in October, and year-to-date the fund is up 20.48%, outperforming the S &P 500, which is up 17.5%, and that’s total return. In our peer group, OHFGX ranks in the top 7th percentile year-to-date and the top 3 % over a one-year period.

And with that said, let’s turn to the three questions we look at every month. First, what was the OHFGX portfolio management team thinking heading into the month? What key investment actions did we take during the month? And finally, how did things play out? So let’s just jump into it. Chris, what were we thinking heading into October?

Chris Perras

Thanks, James. So October starts the fourth quarter of the year, which tends to be a strong seasonal quarter. The Santa Claus rally actually usually starts in October, not all the way in December, which most investors think. So outside of that, we’re really trying to focus to get our hands around our portfolio names for third quarter earnings reports and trying to ignore a lot of the noise about the government shutdown and the China tariff and trade negotiations.

James McFarland

Very good. Thank you, Chris. And so what key investment actions then did we take during that?

Charles Scavone
Thanks, James. So as Chris alluded to, it was earnings season for us and we were pretty pleased with how we came through earnings season with really good stock selection. We were able to avoid many of the blowups and actually took advantage of some of those on the short side. Overall, it was more of a continuation of the same for us, a tight focus on identifying the secular growth themes. that create long-term investment opportunities for us. And the song remains a bit the same currently in that a lot of it is around AI infrastructure build out and how that supports the business activities of a wide range of companies.

I’d highlight, you know, in the industrial sector, the companies that provide the power supplies into these large data centers, as well as companies that help manage and support the power supply within the data centers were big beneficiaries of the spending. That would be companies like Eaton Corp or even Houston-based comfort systems were large beneficiaries there. But the world is more than AI. We had very good success about that, yeah. We had very good success in a name we had mentioned previously in the generic pharmaceutical space, Teva Pharmaceuticals reported a great quarter and gave a great roadmap going forward.

We also, we had suffered a bit with some of the software names within our portfolio, but we came back and had good success with Snowflake and Twilio, who are emerging as true beneficiaries of AI and not in the crosshairs of it. The other area, I guess, that was of interest and particularly of interest with investors has been in the quantum computing space where we had exposure and these stocks had done quite well. And I point that out, they tend to be pretty volatile, but one of the things that we do within our portfolio is use names like those when they have big run ups to sell calls against those positions to create sort of a disciplined sell process should the companies, the stocks continue to move forward to collect the income or the premium from selling those calls. And that helps offset some of the cost of our systematic market hedging program. And it helps mitigate some of that single stock volatility we see in those names. So they serve a very useful purpose. And I think that’s the recap on the long side.

James McFarland

I see. And how about on the short side?

Charles Scavone

Yeah, we were very active on the short side. As the market continued to move up, we opportunistically added and engaged in some new short positions, but fairly common or similar themes we’ve talked about before.

Consumer or credit risk, some of these consumer finance companies that support the borrowing activities of lower end consumers, particularly in the auto space have come under a lot of pressure, particularly those related to auto lending. We’ve been active there. There’s further problems within the auto space overall. We saw a couple of used car retailers have some serious problems and we took advantage of that.

We had referenced our favorite event ticketing platform and they certainly saw slowing growth, continued to have some regulatory issues. And so there have been some issues there and those types of names have served us well on the short side.

James McFarland

And lastly, how about the hedging program?

Charles Scavone

Yeah, so in a period in which the market overall was rising, this hedging program has a bit of a performance drag. There’s a cost there. We described how we try and mitigate some of that. But overall, it performed pretty well. Particularly, we had some intramod volatility around the Fed announcement. We took advantage of that. And so with that combined with the productive covered call writing program, we feel like the hedge that aspect of the fund did just as we expect.

James McFarland
Very good, thank you. And then that’s what we did now. How did things play out?

Chris Perras

Well, I guess a number of the macro issues, the biggest one being the China US trade deal actually got done. It was a loose deal, I guess. But as Charles said, volatility in stocks picked up on the month, which is kind of unusual when stocks going up. The stock market had a nice return. The S &P 500 was up about 2 % on the month. Our fund holders were up around 4.5%. So was a very good relative performance and absolute performance for the fund for the month. The Fed cut rates in October, although I guess during the meeting Powell was a lot more hawkish than I expected. And I think the rest of the team expected and the market expected as far as forward cuts, which I think the next meeting is in December. So that was a bit of a surprise. Economic growth running three to three and a half percent for the country, but it’s largely kind of being helped, I guess, by the AI cap X spending. And as Charles previously mentioned, the consumer, particularly down the economic spectrum is suffering a lot because they’re concerned about their jobs, can’t keep up with inflation. So being a little more cautious there on spending. So, outside of that, mean, there’s a lot of news stories on AI and announcements and whether it’s Microsoft or OpenAI and but intramonth stock volatility and those names if you were on the side of one of those press releases, it helped out a lot. Trying to think what else happened during the month.

Charles Scavone
Those were the highlights, I think. A lot of earnings, a lot of conference calls, and so a lot of information gathering, just trying to make sure we’re positioned the right way.

Chris Perras
Yep. And Charles, you mentioned a number of the winners outside of those areas. Winner was CCJ, Camco, on the material side, because I know we talked so much about technology and those trends. They are a big owner of Westinghouse Nuclear. their stock’s been bigger. Uranium Miner is kind of their primary business, but that was beneficial, helped out the fund during the month. outside of tech, there are other areas that are working, although it’s been a very narrow sector market on the year as far as what’s actually outperforming the S &P 500 year to date.

James McFarland

Well, thank you very much, Chris. So as always, we will continue to focus on being able to move quickly and effectively on executing our highest conviction ideas, continuing to outperform our benchmark and peers. Thank you, Charles. Thank you, Chris. And thank you for watching. You can find more information on investing in OHFGX at oakharvestfunds.com. That link is in the description below. Thanks again for watching and we’ll see you in the next video.

Mentioned Holdings 10-31-2025 and Top 10

OHFGX Sept 30 2025 Trailing Performance

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