UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04014
Meridian Fund, Inc.®
(Exact name of registrant as specified in charter)
100 Fillmore St., Suite 325
Denver, CO 80206
(Address of principal executive offices) (Zip code)
David J. Corkins
100 Fillmore St., Suite 325
Denver, CO 80206
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-398-2929
Date of fiscal year end: June 30
Date of reporting period: December 31, 2014
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
Table of Contents | ||
Shareholder Letter | 1 | |
Portfolio Performance and Composition | 3 | |
Fund Expenses | 16 | |
Performance and Expense Disclosures | 19 | |
Schedules of Investments | 20 | |
Statements of Assets and Liabilities | 29 | |
Statements of Operations | 31 | |
Statements of Changes in Net Assets | 32 | |
Financial Highlights | 34 | |
Notes to Financial Statements | 43 | |
Board Consideration of Management Agreement | 54 |
Meridian Funds | 2 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited)
• | Cimpress, formerly Vistaprint, offers online marketing products and services to small businesses. The company performed well after moving to more standard pricing for a broader range of customers. After doubling since the summer’s lows driven by continued execution of the company’s turnaround strategy, we trimmed the holding due to what we perceive as a less favorable risk/reward profile at these levels. |
• | SS&C Technologies is a technology provider to the financial industry. Approximately 90% of revenues come from subscriptions services, which provides a stable source of revenue for the company. SS&C has made several acquisitions that help secure its dominance in the industry. |
• | Carter's, the leading manufacturer of infant and toddler apparel, was a top contributor during the period. Carter’s continues to benefit from its strong brands, low-cost scale position, ubiquitous distribution and global footprint. Due to the company’s dominant competitive position and strategic growth initiatives, we believe the fundamental outlook remains favorable. |
• | CHC Group is a helicopter service company that specializes in transportation to offshore oil and gas platforms. The company has underperformed recently due to the drop in oil prices. We believe the company is still well-positioned for the long term, but its exposure to large exploration and production companies will likely continue to be a drag on performance in the short term. |
• | Clean Harbors underperformed during the period due to concerns around falling lube oil prices and exposure to the Canadian energy sector. We believe that some of the company’s assets are irreplaceable, but the company may underperform during this period of weak demand from its energy customers. |
• | RigNet underperformed due to declining oil prices and fears around excess supply of offshore drilling rigs. We are patient investors and believe the risk/reward profile from this price is very favorable. |
Meridian Funds | 3 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited) (continued)
Share Class | Inception | 6 Month | 1 Year | 5 Year | 10 Year | Since Inception |
Legacy Class (MERDX) | 8/1/84 | 7.62 | 9.41 | 15.95 | 9.31 | 12.83 |
Investor Class (MRIGX) | 11/15/13 | 7.50 | 9.09 | — | — | 12.22 |
Advisor Class (MRAGX) | 11/15/13 | 7.25 | 8.69 | — | — | 11.83 |
Institutional Class (MRRGX) | 12/24/14 | — | — | — | — | (0.17) |
Russell 2000®Index* | 8/1/84 | 1.65 | 4.89 | 15.55 | 7.77 | 10.39 |
Russell 2500®Growth Index | 8/1/84 | 2.97 | 7.05 | 17.27 | 9.37 | N/A |
Meridian Funds | 4 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited) (continued)
12.31.14
Carter's, Inc. | 3.66% |
SS&C Technologies Holdings, Inc. | 3.42% |
Wolverine World Wide, Inc. | 3.11% |
Cadence Design Systems, Inc. | 2.93% |
LPL Financial Holdings, Inc. | 2.80% |
Sensata Technologies Holding N.V. (Netherlands) | 2.78% |
HEICO Corp. Class A | 2.72% |
SolarWinds, Inc. | 2.71% |
Sally Beauty Holdings, Inc. | 2.53% |
Corporate Executive Board Co. (The) | 2.37% |
Meridian Funds | 5 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited)
• | Denny’s is an iconic casual dining chain with approximately 1,500 franchises and 160 company-owned restaurants. The company came across our contrarian screens repeatedly during years of decline under a series of previous management teams. We invested in 2011 when strong new management took over with a coherent turnaround plan. Denny’s made solid progress, stabilizing the business with menu and marketing improvements and using solid free cash flow to pay down debt, repurchase shares and fund a successful restaurant remodel program, though sales growth remained subdued. An inflection point came this summer as sales improved significantly, a trend that accelerated through the remainder of the year aided by lower gas prices that alleviated pressure on Denny’s core customer. We remain shareholders. |
• | Hawaiian Electric is the dominant electric utility for the state of Hawaii and owns a top-3 local bank. We invested in the company when the state’s growth led to pressure on generating capacity, driving higher maintenance expenses that caused the stock to fall out of favor. Hawaiian Electric was acquired at a premium during the fourth quarter by NextEra Energy. NextEra was attracted by Hawaiian Electric’s position on the forefront of a secular change facing the utility sector- the need to convert to cleaner, more renewable electricity generation. Upon announcement of the deal we sold our shares given limited further upside. Hawaiian Electric was a very profitable long-term holding for Meridian Contrarian Fund shareholders and we thank management for their efforts and wish them the best in their future endeavors. |
• | ServiceMaster Global Holdings is a leading provider of termite and pest control services, home warranties and other residential services. The company screened for our strategy because of marketing and service missteps at its lawn care division. The struggling lawn care division was spun-off in early 2014. We invested in ServiceMaster because of its dominant positions in fragmented markets including 40% market share in home warranties, and consistent sales growth, driven by 80% customer retention and share gains from smaller competitors. The stock outperformed during the period due to two quarters of strong earnings results highlighted by pricing power, up-selling of additional services, share gains in its home warranty business and expense controls. We added to the position based on greater conviction in ServiceMaster’s ability to generate stable earnings growth through pricing, share gains, operating leverage and paying down debt. |
• | Two of these underperformers - Halcón Resources and Clean Harbors – suffered as a result of their exposure to energy. Halcón is an oil and gas exploration and production company and Clean Harbors is a leader in hazardous waste handling with approximately 30% end market exposure to oil services. These stocks underperformed during the second half, as WTI oil prices fell by <49%> from $105 down to $53. We have since sold our shares in Halcón, but maintain our position in Clean Harbors due to our belief that the core waste handling business alone, without |
Meridian Funds | 6 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited) (continued)
the oil services business, is worth more than the current enterprise value ascribed to the company by the market. The outlook for the energy sector remains tumultuous. We are approaching the sector with caution, but as contrarian investors are excited by the prospect of investing in high quality energy companies while they are deeply out of favor. The bulk of our current energy exposure lies in leading companies with strong balance sheets such as EOG, National Oilwell Varco, Helmrich & Payne and Occidental Petroleum. We believe these companies can survive the most dire downside scenarios and are likely to gain market share and emerge stronger from the downturn. At the same time we are compiling a list of more aggressive energy investments – such as Halcón - to turn to when the timing becomes more favorable. It is an interesting time to be energy investors and we believe that we can capitalize on current conditions to drive long term outperformance. | |
• | Hub Group is the second largest provider of intermodal transportation, which is the combination of short-haul trucking and long-haul rail. We initiated our position in the stock after the Hub Group’s profits were squeezed by the inability to fully pass on higher rail costs to its shipping customers amid excess intermodal container supply. Our investment thesis was based on an expectation that intermodal would outgrow other transportation modes due to structural cost advantages relative to trucking, particularly as the trucking industry grapples with a driver shortage. The stock’s underperformance during the period was primarily the result of an increasingly congested rail network, which in turn created inefficiencies in Hub Group’s operations. We exited the position as we had limited visibility as to when the rail network challenges would be resolved. |
Meridian Funds | 7 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited) (continued)
Share Class | Inception | 6 Months | 1 Year | 5 Year | 10 Year | Since Inception |
Legacy Class (MVALX) | 2/10/94 | 2.48 | 6.15 | 14.16 | 7.74 | 13.33 |
Investor Class (MFCIX) | 11/15/13 | 2.44 | 5.99 | — | — | 8.56 |
Advisor Class (MFCAX) | 11/15/13 | 2.31 | 5.68 | — | — | 8.29 |
Russell 2500®Index | 2/10/94 | 1.06 | 7.07 | 16.36 | 8.72 | 10.47 |
S&P 500®Index* | 2/10/94 | 6.12 | 13.66 | 15.44 | 7.67 | 9.29 |
Meridian Funds | 8 | www.meridianfund.com |
Portfolio Composition (Unaudited)
12.31.14
Norfolk Southern Corp. | 2.74% |
ServiceMaster Global Holdings, Inc. | 2.51% |
Alexander & Baldwin, Inc. | 2.46% |
Verint Systems, Inc. | 2.31% |
Xylem, Inc. | 2.28% |
NVIDIA Corp. | 2.28% |
CR Bard, Inc. | 2.27% |
Ritchie Bros. Auctioneers, Inc. (Canada) | 2.22% |
Broadridge Financial Solutions, Inc. | 2.21% |
CACI International, Inc. Class A | 2.16% |
Meridian Funds | 9 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited)
1. | Employ fundamental research across the capital structure to identify long-term investments in high-quality businesses with predictable and recurring revenues, high returns on invested capital, and attractive risk/reward profiles. |
2. | Build a primarily large cap equity portfolio with an objective to outperform the S&P over a full economic cycle with equal or less volatility through the use of strong fundamental research, structured option trades, and some limited exposure to opportunistic investments in equity and fixed income. |
3. | Seek high current income relative to peers. |
• | Leggett & Platt invented spiral steel coil bedsprings over 100 years ago, and the company has built upon its core competency in steel wire fabrication to remain a leader in the residential furnishings market. Leggett has also successfully executed business-to-business strategy of selling a broad range of furniture components to other manufacturers. After the run-up in 2014, this position was sold on valuation. |
• | Enbridge Energy Partners (EEP) is a master limited partnership affiliated with Enbridge Inc., a leading energy transportation company based in Canada. EEP shares performed very well in the second half of 2015 after its general partner, Enbridge Inc., announced that it would restructure the profit splits in favor of EEP. Despite the outperformance, the stock was sold in favor of companies with the potential to generate faster distributable cash flow growth. |
• | Kinder Morgan is the largest energy infrastructure company in North American with 80,000 miles of pipeline and 180 storage terminals. In November 2014, all Kinder Morgan simplified its corporate structure by combining its entities into a single public company. Over 80% of the company’s cash flows are derived from fee-based agreements, which provide financial stability as the company executes its large project backlog – $18 billion of identified growth projects. Fund maintains its position. |
• | Tupperware, inventor of the iconic plastic food storage containers, operates a direct, relationship-based, sales model to emerging markets, with a focus China, Turkey and Latin America. Although this strategy has generated strong shareholder returns over the past decade, the reliance upon emerging markets to provide growth (and compensate for slow growth in the U.S.) has created a company with more vulnerability to macro developments. We have sold the stock. |
• | Microchip Technology is a leading manufacturer of microcontrollers and analog semiconductors. These simple semiconductor chips are pervasive and often founded embedded in many industrial applications including automobiles, communication and other devices. In early October 2014, Microchip announced that sales for its fiscal 2nd quarter of 2015 (ending September 30, 2014) would be lower than expected due to weakness in China. |
• | Linear Technology is a leading manufacturer of high performance analog circuits, chips which are crucial to linking our analog world with the digital communication devices which are rapidly proliferating. In early October 2014, Linear announced lackluster sales for its 1st fiscal quarter of 2015 (ending September 30, 2014) and cited weakness in Europe. |
Meridian Funds | 10 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited) (continued)
Share Class | Inception | 6 Months | 1 Year | 5 Year | Since Inception |
Legacy Class (MEIFX) | 1/31/05 | 0.61 | 5.23 | 13.02 | 7.17 |
Investor Class (MRIEX) | 11/15/13 | 0.60 | 5.21 | — | 6.64 |
Advisor Class (MRAEX) | 11/15/13 | 0.49 | 4.95 | — | 6.38 |
S&P 500®Index | 1/31/05 | 6.12 | 13.66 | 15.44 | 8.01 |
Meridian Funds | 11 | www.meridianfund.com |
Portfolio Composition (Unaudited)
12.31.14
Halcon Resources Corp. , 9.75% Senior Unsecured Bonds Due July 15, 2020 | 4.95% |
Apple, Inc. | 4.18% |
Microsoft Corp. | 4.02% |
Google, Inc. Class A | 3.36% |
Union Pacific Corp. | 3.09% |
Dominion Resources, Inc. | 2.72% |
Costco Wholesale Corp. | 2.69% |
Gilead Sciences, Inc. | 2.50% |
Dow Chemical Co. (The) | 2.44% |
Restaurant Brands International, Inc. | 2.38% |
Meridian Funds | 12 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited)
• | Cimpress, formerly Vistaprint, offers online marketing products and services to small businesses. The company performed well after moving to more standard pricing for a broader range of customers. After doubling since the summer’s lows driven by continued execution of the company’s turnaround strategy, we trimmed the holding due to what we perceive as a less favorable risk/reward profile at these levels. |
• | Cyberark Software is a security software company, which had its Initial Public Offering (IPO) during the period. The company reached our target price and was sold. |
• | Carter's, the leading manufacturer of infant and toddler apparel, was a top contributor during the period. Carter’s continues to benefit from its strong brands, low-cost scale position, ubiquitous distribution and global footprint. Due to the company’s dominant competitive position and strategic growth initiatives, we believe the fundamental outlook remains favorable. |
• | Evolution Petroleum Corporation is a small oil exploration and production company that uses technology to increase production rates for established oil and natural gas wells. Evolution generates positive free cash flow and has no debt. Unfortunately, the underlying price of the commodity (oil) was the biggest drag on performance during the period. |
• | Heritage-Crystal Clean is a leading provider of parts cleaning, containerized waste management, vacuum truck services and antifreeze recycling activities. Additionally, the company owns and operates a used oil re-refining facility. The profitability of this facility is dependent on lube oil prices, which declined due to increased supply. |
• | Clean Harbors underperformed during the period due to concerns around falling lube oil prices and exposure to the Canadian energy sector. We believe that some of the company’s assets are irreplaceable, but the company may underperform during this period of weak demand from its energy customers. |
Meridian Funds | 13 | www.meridianfund.com |
Portfolio Performance and Composition (Unaudited) (continued)
Share Class | Inception | 6 Months | 1 Year | Since Inception |
Legacy Class (MSGGX) | 12/16/13 | 7.89 | 20.28 | 24.56 |
Investor Class (MISGX) | 12/16/13 | 7.89 | 20.28 | 24.56 |
Advisor Class (MSGAX) | 12/16/13 | 7.73 | 19.90 | 24.18 |
Institutional Class (MSRGX) | 12/24/14 | — | — | 0.25 |
Russell 2000®Growth Index | 12/16/13 | 3.31 | 5.60 | 9.75 |
Meridian Funds | 14 | www.meridianfund.com |
Portfolio Composition (Unaudited)
12.31.14
RigNet, Inc. | 2.47% |
Heritage-Crystal Clean, Inc. | 2.45% |
Prestige Brands Holdings, Inc. | 2.36% |
SolarWinds, Inc. | 2.35% |
Wolverine World Wide, Inc. | 2.33% |
National CineMedia, Inc. | 2.32% |
HEICO Corp. Class A | 2.31% |
Corporate Executive Board Co. (The) | 2.17% |
Clean Harbors, Inc. | 2.03% |
Carter's, Inc. | 1.99% |
Meridian Funds | 15 | www.meridianfund.com |
Actual | Annualized Expense Ratio | Beginning Account Value July 1, 20141 | Ending Account Value December 31, 2014 | Expenses Paid During the Period |
Legacy Class (MERDX) | 0.84% | $1,000.00 | $1,076.20 | $4.40 2 |
Investor Class (MRIGX) | 1.14% | $1,000.00 | $1,075.00 | $5.96 2 |
Advisor Class (MRAGX) | 1.55% | $1,000.00 | $1,072.50 | $8.10 2 |
Institutional Class (MRRGX) | 0.90% | $1,000.00 | $ 998.30 | $0.17 3 |
Hypothetical 4 | Annualized Expense Ratio | Beginning Account Value July 1, 20141 | Ending Account Value December 31, 2014 | Expenses Paid During the Period |
Legacy Class (MERDX) | 0.84% | $1,000.00 | $1,020.97 | $4.28 2 |
Investor Class (MRIGX) | 1.14% | $1,000.00 | $1,019.46 | $5.80 2 |
Advisor Class (MRAGX) | 1.55% | $1,000.00 | $1,017.39 | $7.88 2 |
Institutional Class (MRRGX) | 0.90% | $1,000.00 | $1,000.79 | $0.17 3 |
1 The Institutional Class commenced operations on December 24, 2014, and began investing on December 26, 2014. | ||||
2 Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, the number of days in the most recent fiscal half-year, then divided by 365. | ||||
3 Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 6 days, the number of days since inception of the Institutional Class. | ||||
4 Hypothetical 5% return before expenses. |
Actual | Annualized Expense Ratio | Beginning Account Value July 1, 2014 | Ending Account Value December 31, 2014 | Expenses Paid During the Period1 |
Legacy Class (MVALX) | 1.12% | $1,000.00 | $1,024.80 | $5.72 |
Investor Class (MFCIX) | 1.35% | $1,000.00 | $1,024.40 | $6.89 |
Advisor Class (MFCAX) | 1.60% | $1,000.00 | $1,023.10 | $8.16 |
Meridian Funds | 16 | www.meridianfund.com |
Hypothetical 2 | Annualized Expense Ratio | Beginning Account Value July 1, 2014 | Ending Account Value December 31, 2014 | Expenses Paid During the Period1 |
Legacy Class (MVALX) | 1.12% | $1,000.00 | $1,019.56 | $5.70 |
Investor Class (MFCIX) | 1.35% | $1,000.00 | $1,018.40 | $6.87 |
Advisor Class (MFCAX) | 1.60% | $1,000.00 | $1,017.14 | $8.13 |
1 Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, the number of days in the most recent fiscal half-year, then divided by 365. | ||||
2 Hypothetical 5% return before expenses. |
Actual | Annualized Expense Ratio | Beginning Account Value July 1, 2014 | Ending Account Value December 31, 2014 | Expenses Paid During the Period1 |
Legacy Class (MEIFX) | 1.25% | $1,000.00 | $1,006.10 | $6.32 |
Investor Class (MRIEX) | 1.35% | $1,000.00 | $1,006.00 | $6.83 |
Advisor Class (MRAEX) | 1.60% | $1,000.00 | $1,004.90 | $8.09 |
Hypothetical 2 | Annualized Expense Ratio | Beginning Account Value July 1, 2014 | Ending Account Value December 31, 2014 | Expenses Paid During the Period1 |
Legacy Class (MEIFX) | 1.25% | $1,000.00 | $1,018.90 | $6.36 |
Investor Class (MRIEX) | 1.35% | $1,000.00 | $1,018.40 | $6.87 |
Advisor Class (MRAEX) | 1.60% | $1,000.00 | $1,017.14 | $8.13 |
1 Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, the number of days in the most recent fiscal half-year, then divided by 365. | ||||
2 Hypothetical 5% return before expenses. |
Meridian Funds | 17 | www.meridianfund.com |
Actual | Annualized Expense Ratio | Beginning Account Value July 1, 20141 | Ending Account Value December 31, 2014 | Expenses Paid During the Period |
Legacy Class (MSGGX) | 1.20% | $1,000.00 | $1,078.90 | $6.29 2 |
Investor Class (MISGX) | 1.35% | $1,000.00 | $1,078.90 | $7.07 2 |
Advisor Class (MSGAX) | 1.60% | $1,000.00 | $1,077.30 | $8.38 2 |
Institutional Class (MSRGX) | 1.10% | $1,000.00 | $1,002.50 | $0.21 3 |
Hypothetical 4 | Annualized Expense Ratio | Beginning Account Value July 1, 20141 | Ending Account Value December 31, 2014 | Expenses Paid During the Period |
Legacy Class (MSGGX) | 1.20% | $1,000.00 | $1,019.16 | $6.11 2 |
Investor Class (MISGX) | 1.35% | $1,000.00 | $1,018.40 | $6.87 2 |
Advisor Class (MSGAX) | 1.60% | $1,000.00 | $1,017.14 | $8.13 2 |
Institutional Class (MSRGX) | 1.10% | $1,000.00 | $1,000.75 | $0.21 3 |
1 The Institutional Class commenced operations on December 24, 2014, and they began investing on December 26, 2014. | ||||
2 Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, the number of days in the most recent fiscal half-year, then divided by 365. | ||||
3 Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 6 days, the number of days since inception of the Institutional Class. | ||||
4 Hypothetical 5% return before expenses. |
Meridian Funds | 18 | www.meridianfund.com |
Performance and Expense Disclosures
Meridian Funds | 19 | www.meridianfund.com |
Schedule of Investments
Shares | Value | |
Common Stocks - 91.2% | ||
Consumer Discretionary - 20.6% | ||
Distributors - 0.6% | ||
LKQ Corp.* | 424,732 | $ 11,943,464 |
Diversified Consumer Services - 2.2% | ||
Grand Canyon Education, Inc.* | 408,667 | 19,068,402 |
ServiceMaster Global Holdings, Inc.* | 984,449 | 26,353,700 |
45,422,102 | ||
Hotels, Restaurants & Leisure - 1.4% | ||
Dunkin' Brands Group, Inc. | 492,790 | 21,017,493 |
Popeyes Louisiana Kitchen, Inc.* | 158,154 | 8,899,326 |
29,916,819 | ||
Media - 1.9% | ||
National CineMedia, Inc. | 2,752,910 | 39,559,317 |
Specialty Retail - 6.7% | ||
DSW, Inc. Class A | 639,604 | 23,857,229 |
Five Below, Inc.* | 570,457 | 23,291,759 |
Hibbett Sports, Inc.* | 420,424 | 20,361,134 |
Monro Muffler Brake, Inc. | 409,215 | 23,652,627 |
Sally Beauty Holdings, Inc.* | 1,566,525 | 48,154,979 |
Wayfair, Inc. Class A* | 69,482 | 1,379,218 |
140,696,946 | ||
Textiles, Apparel & Luxury Goods - 7.8% | ||
Carter's, Inc. | 798,402 | 69,708,479 |
Tumi Holdings, Inc.* | 1,431,109 | 33,960,216 |
Wolverine World Wide, Inc. | 2,009,706 | 59,226,036 |
162,894,731 | ||
Total Consumer Discretionary | 430,433,379 | |
Energy - 4.0% | ||
Energy Equipment & Services - 4.0% | ||
CHC Group Ltd.* | 2,600,057 | 8,372,183 |
Core Laboratories N.V. (Netherlands) | 81,746 | 9,837,314 |
Dril-Quip, Inc.* | 260,982 | 20,025,149 |
RigNet, Inc.* | 1,085,677 | 44,545,327 |
Total Energy | 82,779,973 | |
Financials - 6.3% | ||
Capital Markets - 4.0% | ||
Financial Engines, Inc. | 375,823 | 13,736,331 |
LPL Financial Holdings, Inc. | 1,193,188 | 53,156,525 |
WisdomTree Investments, Inc. | 1,009,796 | 15,828,552 |
82,721,408 |
Shares | Value | |
Commercial Banks - 2.3% | ||
Bank of the Ozarks, Inc. | 596,929 | $ 22,635,548 |
East West Bancorp., Inc. | 682,721 | 26,428,130 |
49,063,678 | ||
Total Financials | 131,785,086 | |
Health Care - 13.5% | ||
Biotechnology - 4.8% | ||
Alnylam Pharmaceuticals, Inc.* | 110,879 | 10,755,263 |
Chimerix, Inc. * | 327,197 | 13,172,951 |
Clovis Oncology, Inc.* | 224,024 | 12,545,344 |
Exact Sciences Corp.* | 510,502 | 14,008,175 |
Juno Therapeutics, Inc. * | 135,177 | 7,058,943 |
Neurocrine Biosciences, Inc.* | 638,637 | 14,267,151 |
NPS Pharmaceuticals, Inc.* | 359,976 | 12,876,341 |
Synageva BioPharma Corp.* | 159,226 | 14,774,580 |
99,458,748 | ||
Health Care Providers & Services - 4.7% | ||
Cooper Cos., Inc. (The) | 127,804 | 20,715,750 |
DexCom, Inc.* | 203,916 | 11,225,576 |
Endologix, Inc.* | 1,665,916 | 25,471,856 |
Insulet Corp.* | 408,067 | 18,795,566 |
Novadaq Technologies, Inc.* | 631,892 | 10,502,045 |
Quidel Corp.* | 369,538 | 10,687,039 |
97,397,832 | ||
Health Care Technology - 1.8% | ||
athenahealth, Inc.* | 94,159 | 13,718,966 |
Medidata Solutions, Inc.* | 256,865 | 12,265,304 |
Spectranetics Corp. (The)* | 366,334 | 12,667,830 |
38,652,100 | ||
Pharmaceuticals - 2.2% | ||
Prestige Brands Holdings, Inc.* | 1,069,213 | 37,123,075 |
Revance Therapeutics, Inc.* | 476,224 | 8,067,235 |
45,190,310 | ||
Total Health Care | 280,698,990 | |
Industrials - 24.5% | ||
Aerospace & Defense - 2.5% | ||
HEICO Corp. Class A | 1,093,788 | 51,801,800 |
Air Freight & Logistics - 1.1% | ||
Expeditors International of Washington, Inc. | 531,093 | 23,692,059 |
Commercial Services & Supplies - 3.2% | ||
Clean Harbors, Inc.* | 830,013 | 39,882,125 |
Ritchie Bros. Auctioneers, Inc. (Canada) | 1,016,218 | 27,326,102 |
67,208,227 |
Meridian Funds | 20 | www.meridianfund.com |
Schedule of Investments (continued)
Shares | Value | |
Electrical Equipment - 3.7% | ||
Polypore International, Inc.* | 496,302 | $ 23,351,009 |
Sensata Technologies Holding N.V. (Netherlands)* | 1,007,978 | 52,828,127 |
76,179,136 | ||
Machinery - 4.5% | ||
Kennametal, Inc. | 567,818 | 20,322,206 |
Proto Labs, Inc.* | 278,294 | 18,690,225 |
Tennant Co. | 437,180 | 31,551,281 |
Woodward, Inc. | 474,633 | 23,366,182 |
93,929,894 | ||
Marine - 0.7% | ||
Kirby Corp.* | 182,196 | 14,710,505 |
Professional Services - 4.0% | ||
Advisory Board Co. (The)* | 425,572 | 20,844,517 |
Corporate Executive Board Co. (The) | 621,910 | 45,107,132 |
TriNet Group, Inc.* | 552,060 | 17,268,437 |
83,220,086 | ||
Road & Rail - 2.8% | ||
Heartland Express, Inc. | 783,029 | 21,149,613 |
Roadrunner Transportation Systems, Inc.* | 1,165,334 | 27,210,549 |
Saia, Inc.* | 192,779 | 10,672,245 |
59,032,407 | ||
Trading Companies & Distributors - 2.0% | ||
MSC Industrial Direct Co., Class A | 228,222 | 18,543,038 |
WESCO International, Inc.* | 294,068 | 22,410,922 |
40,953,960 | ||
Total Industrials | 510,728,074 | |
Information Technology - 20.8% | ||
Electronic Equipment & Instruments - 1.1% | ||
Trimble Navigation Ltd.* | 850,097 | 22,561,574 |
Internet Software & Services - 4.2% | ||
ChannelAdvisor Corp.* | 807,332 | 17,422,225 |
CoStar Group, Inc.* | 78,002 | 14,323,507 |
Demandware, Inc.* | 206,356 | 11,873,724 |
SPS Commerce, Inc.* | 229,848 | 13,016,292 |
VistaPrint, N.V. (Netherlands)* | 422,201 | 31,597,523 |
88,233,271 | ||
IT Services - 3.1% | ||
Euronet Worldwide, Inc.* | 420,674 | 23,095,003 |
Gartner, Inc.* | 493,479 | 41,555,866 |
64,650,869 |
Shares | Value | |
Software - 11.4% | ||
Blackbaud, Inc. | 257,556 | $ 11,141,873 |
Cadence Design Systems, Inc.* | 2,937,169 | 55,718,096 |
RealPage, Inc.* | 494,873 | 10,867,411 |
SolarWinds, Inc.* | 1,036,243 | 51,635,989 |
Solera Holdings, Inc. | 850,380 | 43,522,448 |
SS&C Technologies Holdings, Inc. | 1,113,284 | 65,115,981 |
238,001,798 | ||
Technology Hardware, Storage & Peripherals - 1.0% | ||
Stratasys Ltd.* | 242,070 | 20,118,438 |
Total Information Technology | 433,565,950 | |
Materials - 1.5% | ||
Chemicals - 1.5% | ||
Valspar Corp. (The) | 370,794 | 32,066,265 |
Total Materials | 32,066,265 | |
Total Investments - 91.2% (Cost $1,642,616,000) | 1,902,057,717 | |
Cash and Other Assets, Less Liabilities - 8.8% | 183,488,346 | |
Net Assets - 100.0% | $2,085,546,063 |
N.V.—Naamloze Vennootschap is the Dutch term for limited liability company |
* | Non-income producing securities |
Meridian Funds | 21 | www.meridianfund.com |
Schedule of Investments
Shares | Value | |
Common Stocks - 92.6% | ||
Consumer Discretionary - 21.4% | ||
Diversified Consumer Services - 3.0% | ||
Regis Corp.* | 296,000 | $ 4,960,960 |
ServiceMaster Global Holdings, Inc.* | 600,669 | 16,079,909 |
21,040,869 | ||
Food & Staples Retailing - 1.4% | ||
Fresh Market, Inc. (The) * | 228,826 | 9,427,631 |
Hotels, Restaurants & Leisure - 3.2% | ||
Del Frisco's Restaurant Group, Inc.* | 411,400 | 9,766,636 |
Denny's Corp.* | 1,208,600 | 12,460,666 |
22,227,302 | ||
Leisure Equipment & Products - 1.1% | ||
Polaris Industries, Inc. | 49,500 | 7,486,380 |
Specialty Retail - 6.7% | ||
Children's Place, Inc. (The) | 188,480 | 10,743,360 |
Dick's Sporting Goods, Inc. | 157,750 | 7,832,288 |
Inter Parfums, Inc. | 251,591 | 6,906,173 |
Monro Muffler Brake, Inc. | 176,789 | 10,218,404 |
Select Comfort Corp.* | 391,962 | 10,594,733 |
46,294,958 | ||
Textiles, Apparel & Luxury Goods - 6.0% | ||
Gildan Activewear, Inc. (Canada) | 234,000 | 13,232,700 |
PVH Corp. | 62,500 | 8,010,625 |
Tumi Holdings, Inc.* | 418,000 | 9,919,140 |
Wolverine World Wide, Inc. | 346,000 | 10,196,620 |
41,359,085 | ||
Total Consumer Discretionary | 147,836,225 | |
Energy - 6.2% | ||
Energy Equipment & Services - 1.7% | ||
Helmerich & Payne, Inc. | 58,000 | 3,910,360 |
National Oilwell Varco, Inc. | 114,400 | 7,496,632 |
11,406,992 | ||
Oil, Gas & Consumable Fuels - 4.5% | ||
California Resources Corp. * | 574,046 | 3,162,991 |
Cameco Corp. | 565,000 | 9,271,650 |
EOG Resources, Inc. | 120,600 | 11,103,642 |
Occidental Petroleum Corp. | 97,114 | 7,828,360 |
31,366,643 | ||
Total Energy | 42,773,635 |
Shares | Value | |
Financials - 11.2% | ||
Commercial Banks - 6.6% | ||
Bank of Hawaii Corp. | 206,000 | $ 12,217,860 |
Citigroup, Inc. | 235,000 | 12,715,850 |
Lazard Ltd. Class A | 171,900 | 8,600,157 |
Synchrony Financial * | 410,775 | 12,220,556 |
45,754,423 | ||
Insurance - 1.7% | ||
Arthur J. Gallagher & Co. | 242,667 | 11,424,762 |
Real Estate Investment Trusts - 0.6% | ||
Rayonier, Inc. | 150,000 | 4,191,000 |
Real Estate Management & Development - 2.3% | ||
Alexander & Baldwin, Inc. | 401,200 | 15,751,112 |
Total Financials | 77,121,297 | |
Health Care - 10.3% | ||
Biotechnology - 1.3% | ||
Neurocrine Biosciences, Inc.* | 419,800 | 9,378,332 |
Health Care Equipment & Supplies - 4.4% | ||
CR Bard, Inc. | 87,000 | 14,495,940 |
Endologix, Inc.* | 348,447 | 5,327,754 |
Hologic, Inc. * | 395,000 | 10,562,300 |
30,385,994 | ||
Health Care Providers & Services - 1.0% | ||
Humana, Inc. | 47,900 | 6,879,877 |
Life Sciences Tools & Services - 1.0% | ||
ICON, Plc* | 137,500 | 7,011,125 |
Pharmaceuticals - 2.6% | ||
Impax Laboratories, Inc.* | 232,500 | 7,365,600 |
Pfizer, Inc. | 334,285 | 10,412,978 |
17,778,578 | ||
Total Health Care | 71,433,906 | |
Industrials - 19.5% | ||
Air Freight & Logistics - 1.6% | ||
Expeditors International of Washington, Inc. | 172,000 | 7,672,920 |
UTi Worldwide, Inc.* | 283,698 | 3,424,235 |
11,097,155 | ||
Building Products - 2.2% | ||
Lennox International, Inc. | 72,900 | 6,930,603 |
NCI Building Systems, Inc.* | 431,076 | 7,983,528 |
14,914,131 | ||
Commercial Services & Supplies - 4.8% | ||
Clean Harbors, Inc.* | 233,200 | 11,205,260 |
Ritchie Bros. Auctioneers, Inc. (Canada) | 528,789 | 14,219,136 |
Steelcase, Inc. Class A | 437,000 | 7,844,150 |
33,268,546 |
Meridian Funds | 22 | www.meridianfund.com |
Schedule of Investments (continued)
Shares | Value | |
Industrial Conglomerates - 0.7% | ||
Raven Industries, Inc. | 182,500 | $ 4,562,500 |
Machinery - 5.3% | ||
Cummins, Inc. | 44,000 | 6,343,480 |
Lindsay Corp. | 43,500 | 3,729,690 |
Stanley Black & Decker, Inc. | 126,064 | 12,112,229 |
Xylem, Inc. | 383,213 | 14,588,919 |
36,774,318 | ||
Road & Rail - 3.9% | ||
Genesee & Wyoming, Inc. Class A* | 108,400 | 9,747,328 |
Norfolk Southern Corp. | 159,700 | 17,504,717 |
27,252,045 | ||
Trading Companies & Distributors - 1.0% | ||
Fastenal Co. | 145,000 | 6,896,200 |
Total Industrials | 134,764,895 | |
Information Technology - 20.2% | ||
Electronic Equipment & Instruments - 1.1% | ||
FLIR Systems, Inc. | 228,051 | 7,368,328 |
Internet Software & Services - 1.6% | ||
Rackspace Hosting, Inc. * | 238,500 | 11,164,185 |
IT Services - 5.0% | ||
Acxiom Corp.* | 340,300 | 6,897,881 |
Broadridge Financial Solutions, Inc. | 306,400 | 14,149,552 |
CACI International, Inc. Class A* | 160,500 | 13,831,890 |
34,879,323 | ||
Semiconductors - 3.7% | ||
Linear Technology Corp. | 82,200 | 3,748,320 |
Mellanox Technologies Ltd.* | 114,204 | 4,879,937 |
NVIDIA Corp. | 727,357 | 14,583,508 |
Power Integrations, Inc. | 46,900 | 2,426,606 |
25,638,371 | ||
Software - 7.3% | ||
Barracuda Networks, Inc.* | 179,700 | 6,440,448 |
Fortinet, Inc.* | 376,000 | 11,528,160 |
Informatica Corp.* | 331,600 | 12,645,566 |
Silver Spring Networks, Inc.* | 598,000 | 5,041,140 |
Verint Systems, Inc.* | 253,500 | 14,773,980 |
50,429,294 | ||
Technology Hardware, Storage & Peripherals - 1.5% | ||
Apple, Inc. | 94,516 | 10,432,676 |
Total Information Technology | 139,912,177 |
Shares | Value | |
Materials - 2.2% | ||
Chemicals - 1.3% | ||
Scotts Miracle-Gro Co. (The) Class A | 140,491 | $ 8,755,399 |
Containers & Packaging - 0.9% | ||
AptarGroup, Inc. | 94,900 | 6,343,116 |
Total Materials | 15,098,515 | |
Telecommunication Services - 1.6% | ||
Diversified Telecommunications - 1.6% | ||
Iridium Communications, Inc.* | 1,172,000 | 11,427,000 |
Total Telecommunication Services | 11,427,000 | |
Total Investments - 92.6% (Cost $504,907,310) | 640,367,650 | |
Cash and Other Assets, Less Liabilities - 7.4% | 51,018,030 | |
Net Assets - 100.0% | $691,385,680 |
Plc—Public Limited Company |
* | Non-income producing securities |
Meridian Funds | 23 | www.meridianfund.com |
Schedule of Investments
Shares | Value | |
Common Stocks - 91.9% | ||
Consumer Discretionary - 15.0% | ||
Hotels, Restaurants & Leisure - 2.4% | ||
Restaurant Brands International LP * | 147 | $ 5,510 |
Restaurant Brands International, Inc. * | 4,605 | 179,796 |
185,306 | ||
Internet & Catalog Retail - 1.8% | ||
Amazon.com, Inc.* | 450 | 139,657 |
Media - 4.3% | ||
Time Warner, Inc. | 1,900 | 162,298 |
Walt Disney Co. (The) | 1,703 | 160,406 |
322,704 | ||
Specialty Retail - 2.2% | ||
TJX Companies, Inc. (The) | 2,397 | 164,386 |
Textiles, Apparel & Luxury Goods - 4.3% | ||
NIKE Class B | 1,644 | 158,071 |
VF Corp. | 2,250 | 168,525 |
326,596 | ||
Total Consumer Discretionary | 1,138,649 | |
Consumer Staples - 9.9% | ||
Beverages - 2.0% | ||
Brown-Forman Corp. Class B | 1,682 | 147,747 |
Food & Staples Retailing - 2.7% | ||
Costco Wholesale Corp. | 1,438 | 203,837 |
Food Products - 1.1% | ||
Hershey Co. (The) | 794 | 82,520 |
Tobacco - 4.1% | ||
Altria Group, Inc. | 3,162 | 155,792 |
Reynolds American, Inc. | 2,427 | 155,983 |
311,775 | ||
Total Consumer Staples | 745,879 | |
Energy - 7.1% | ||
Oil, Gas & Consumable Fuels - 7.1% | ||
Cameco Corp. | 4,500 | 73,845 |
EOG Resources, Inc. | 1,704 | 156,887 |
Kinder Morgan, Inc. | 3,869 | 163,698 |
MarkWest Energy Partners LP | 2,107 | 141,569 |
Total Energy | 535,999 | |
Financials - 6.4% | ||
Commercial Banks - 6.4% | ||
JPMorgan Chase & Co. | 2,569 | 160,768 |
U.S. Bancorp | 3,677 | 165,281 |
Wells Fargo & Co. | 2,936 | 160,952 |
Total Financials | 487,001 |
Shares | Value | |
Health Care - 14.9% | ||
Biotechnology - 4.6% | ||
Gilead Sciences, Inc.* | 2,013 | $ 189,745 |
Vertex Pharmaceuticals, Inc. * | 1,350 | 160,380 |
350,125 | ||
Life Sciences Tools & Services - 1.9% | ||
Illumina, Inc. * | 787 | 145,265 |
Pharmaceuticals - 8.4% | ||
Johnson & Johnson | 1,447 | 151,313 |
Novartis AG, ADR | 1,670 | 154,742 |
Perrigo Co., Plc | 973 | 162,647 |
Pfizer, Inc. | 5,189 | 161,637 |
630,339 | ||
Total Health Care | 1,125,729 | |
Industrials - 12.4% | ||
Aerospace & Defense - 4.2% | ||
General Dynamics Corp. | 566 | 77,893 |
Lockheed Martin Corp. | 824 | 158,677 |
Raytheon Co. | 758 | 81,993 |
318,563 | ||
Air Freight & Logistics - 1.9% | ||
United Parcel Service, Inc. Class B | 1,316 | 146,300 |
Professional Services - 1.1% | ||
Equifax, Inc. | 1,007 | 81,436 |
Road & Rail - 3.1% | ||
Union Pacific Corp. | 1,968 | 234,448 |
Trading Companies & Distributors - 2.1% | ||
WW Grainger, Inc. | 632 | 161,090 |
Total Industrials | 941,837 | |
Information Technology - 20.0% | ||
Communications Equipment - 1.9% | ||
QUALCOMM, Inc. | 1,986 | 147,620 |
Internet Software & Services - 3.4% | ||
Google, Inc. Class A* | 480 | 254,717 |
IT Services - 2.0% | ||
International Business Machines Corp. | 936 | 150,172 |
Semiconductors - 2.2% | ||
NVIDIA Corp. | 8,146 | 163,327 |
Software - 6.3% | ||
Microsoft Corp. | 6,562 | 304,805 |
Oracle Corp. | 3,920 | 176,282 |
481,087 | ||
Technology Hardware, Storage & Peripherals - 4.2% | ||
Apple, Inc. | 2,866 | 316,349 |
Total Information Technology | 1,513,272 |
Meridian Funds | 24 | www.meridianfund.com |
Schedule of Investments (continued)
Shares | Value | |
Materials - 3.5% | ||
Chemicals - 3.5% | ||
Dow Chemical Co. (The) | 4,050 | $ 184,720 |
Mosaic Co. (The) | 1,755 | 80,116 |
Total Materials | 264,836 | |
Utilities - 2.7% | ||
Multi-Utility - 2.7% | ||
Dominion Resources, Inc. | 2,676 | 205,784 |
Total Utilities | 205,784 | |
Total Common Stocks - 91.9% (Cost $6,327,268) | 6,958,986 | |
Exchange Traded Funds - 0.3% | ||
SPDR S&P 500 ETF Trust | 100 | 20,550 |
Total Exchange Traded Funds - 0.3% (Cost $19,742) | 20,550 |
Principal Value | ||
Corporate Bonds - 4.9% | ||
Energy - 4.9% | ||
Oil, Gas & Consumable Fuels - 4.9% | ||
Halcon Resources Corp., 9.75%, 7/15/20 | $ 500,000 | 375,000 |
Total Corporate Bonds - 4.9% (Cost $348,276) | 375,000 |
Number of Contracts | Value | |
Call Options Purchased - 2.5% | ||
Continental Resources, Inc. Expiring January 20, 2017 at $40.00 | 145 | $ 158,775 |
Halliburton Co. Expiring January 20, 2017 at $50.00 | 75 | 30,000 |
Total Call Options Purchased - 2.5% (Cost $160,358) | 188,775 |
Number of Contracts | Value | |
Put Options Purchased - 0.4% | ||
Blackstone Group LP (The) Expiring January 15, 2016 at $32.00 | 110 | $ 31,460 |
Total Put Options Purchased - 0.4% (Cost $37,210) | 31,460 | |
Total Investments - 100.0% (Cost $6,892,854) | 7,574,771 | |
Cash and Other Assets, Less Liabilities - (0.0)% | (2,523) | |
Net Assets - 100.0% | $ 7,572,248 |
Number of Contracts | Value | |
Call Options Written - (0.4)% | ||
Gilead Sciences, Inc. Expiring January 15, 2016 at $80.00 | (10) | $ (22,000) |
Vertex Pharmaceuticals, Inc. Expiring April 17, 2015 at $140.00 | (10) | (4,760) |
Total Call Options Written - (0.4)% (Premium received $(29,640)) | $ (26,760) |
ADR—American Depository Receipt |
Plc—Public Limited Company |
* | Non-income producing securities |
Meridian Funds | 25 | www.meridianfund.com |
Schedule of Investments
Shares | Value | |
Common Stocks - 89.0% | ||
Consumer Discretionary - 20.8% | ||
Auto Components - 1.0% | ||
Dorman Products, Inc.* | 22,700 | $ 1,095,729 |
Diversified Consumer Services - 3.3% | ||
2U, Inc.* | 64,402 | 1,266,143 |
Grand Canyon Education, Inc.* | 19,149 | 893,492 |
ServiceMaster Global Holdings, Inc.* | 54,685 | 1,463,918 |
3,623,553 | ||
Hotels, Restaurants & Leisure - 2.6% | ||
Del Frisco's Restaurant Group, Inc.* | 32,530 | 772,262 |
Papa Murphy's Holdings, Inc.* | 74,221 | 862,448 |
Popeyes Louisiana Kitchen, Inc.* | 8,606 | 484,260 |
Texas Roadhouse, Inc. | 22,958 | 775,062 |
2,894,032 | ||
Internet & Catalog Retail - 0.6% | ||
Coupons.com, Inc.* | 33,333 | 591,661 |
Leisure Equipment & Products - 1.9% | ||
Arctic Cat, Inc. | 27,232 | 966,736 |
Malibu Boats, Inc. Class A* | 58,560 | 1,128,451 |
2,095,187 | ||
Media - 2.6% | ||
National CineMedia, Inc. | 158,562 | 2,278,536 |
Rentrak Corp.* | 8,002 | 582,706 |
2,861,242 | ||
Specialty Retail - 4.1% | ||
Boot Barn Holdings, Inc. * | 56,478 | 1,027,899 |
Five Below, Inc.* | 30,269 | 1,235,883 |
Hibbett Sports, Inc.* | 12,423 | 601,646 |
Monro Muffler Brake, Inc. | 14,791 | 854,920 |
Winmark Corp. | 9,141 | 794,536 |
4,514,884 | ||
Textiles, Apparel & Luxury Goods - 4.7% | ||
Carter's, Inc. | 22,344 | 1,950,855 |
Tumi Holdings, Inc.* | 41,076 | 974,734 |
Wolverine World Wide, Inc. | 77,520 | 2,284,514 |
5,210,103 | ||
Total Consumer Discretionary | 22,886,391 | |
Energy - 5.2% | ||
Energy Equipment & Services - 3.4% | ||
Era Group, Inc. * | 39,856 | 842,954 |
Newpark Resources, Inc.* | 54,301 | 518,032 |
RigNet, Inc.* | 59,109 | 2,425,242 |
3,786,228 | ||
Oil, Gas & Consumable Fuels - 1.8% | ||
Evolution Petroleum Corp. | 259,565 | 1,928,568 |
Total Energy | 5,714,796 |
Shares | Value | |
Financials - 2.8% | ||
Capital Markets - 1.8% | ||
Financial Engines, Inc. | 18,883 | $ 690,174 |
PennantPark Investment Corp. | 70,541 | 672,256 |
WisdomTree Investments, Inc. | 39,101 | 612,908 |
1,975,338 | ||
Commercial Banks - 1.0% | ||
Bank of the Ozarks, Inc. | 30,934 | 1,173,017 |
Total Financials | 3,148,355 | |
Health Care - 16.5% | ||
Biotechnology - 5.0% | ||
Bellicum Pharmaceuticals, Inc. * | 10,000 | 230,400 |
Chimerix, Inc. * | 16,646 | 670,168 |
Clovis Oncology, Inc.* | 9,183 | 514,248 |
Exact Sciences Corp.* | 25,103 | 688,827 |
Juno Therapeutics, Inc. * | 6,206 | 324,077 |
Neurocrine Biosciences, Inc.* | 25,282 | 564,800 |
NPS Pharmaceuticals, Inc.* | 15,456 | 552,861 |
Repligen Corp.* | 36,279 | 718,324 |
Synageva BioPharma Corp.* | 7,089 | 657,788 |
Versartis, Inc.* | 26,139 | 586,821 |
5,508,314 | ||
Health Care Equipment & Supplies - 5.6% | ||
DexCom, Inc.* | 10,899 | 599,990 |
Endologix, Inc.* | 72,788 | 1,112,928 |
Insulet Corp.* | 14,954 | 688,781 |
LDR Holding Corp. * | 17,661 | 578,928 |
Merit Medical Systems, Inc.* | 51,014 | 884,073 |
Nevro Corp. * | 16,328 | 631,404 |
Novadaq Technologies, Inc.* | 27,837 | 462,651 |
Quidel Corp.* | 20,374 | 589,216 |
Spectranetics Corp. (The)* | 18,651 | 644,951 |
6,192,922 | ||
Health Care Providers & Services - 1.4% | ||
National Research Corp. Class A | 67,230 | 940,548 |
Trupanion, Inc. * | 86,623 | 600,297 |
1,540,845 | ||
Health Care Technology - 1.3% | ||
Castlight Health Inc. Class B* | 17,789 | 208,131 |
Computer Programs & Systems, Inc. | 9,869 | 599,542 |
Medidata Solutions, Inc.* | 11,914 | 568,894 |
1,376,567 | ||
Life Sciences Tools & Services - 0.7% | ||
Fluidigm Corp.* | 22,141 | 746,816 |
Pharmaceuticals - 2.5% | ||
Prestige Brands Holdings, Inc.* | 66,759 | 2,317,872 |
Revance Therapeutics, Inc.* | 29,034 | 491,836 |
2,809,708 | ||
Total Health Care | 18,175,172 |
Meridian Funds | 26 | www.meridianfund.com |
Schedule of Investments (continued)
Shares | Value | |
Industrials - 24.7% | ||
Aerospace & Defense - 2.0% | ||
HEICO Corp. Class A | 47,848 | $ 2,266,081 |
Air Freight & Logistics - 1.0% | ||
Park-Ohio Holdings Corp. | 16,845 | 1,061,740 |
Commercial Services & Supplies - 6.5% | ||
Clean Harbors, Inc.* | 41,437 | 1,991,048 |
Heritage-Crystal Clean, Inc.* | 194,845 | 2,402,439 |
Ritchie Bros. Auctioneers, Inc. (Canada) | 43,347 | 1,165,601 |
SP Plus Corp.* | 63,556 | 1,603,518 |
7,162,606 | ||
Electrical Equipment - 1.7% | ||
Polypore International, Inc.* | 14,364 | 675,826 |
Power Solutions International, Inc.* | 24,231 | 1,250,562 |
1,926,388 | ||
Industrial Conglomerates - 0.5% | ||
Raven Industries, Inc. | 21,474 | 536,850 |
Machinery - 4.1% | ||
Kennametal, Inc. | 17,508 | 626,611 |
Luxfer Holdings Plc ADR (United Kingdom) | 48,496 | 724,045 |
Proto Labs, Inc.* | 16,361 | 1,098,805 |
Tennant Co. | 20,659 | 1,490,960 |
voxeljet AG ADR (Germany)* | 77,449 | 628,886 |
4,569,307 | ||
Professional Services - 4.8% | ||
Advisory Board Co. (The)* | 19,879 | 973,674 |
Corporate Executive Board Co. (The) | 29,393 | 2,131,874 |
TriNet Group, Inc.* | 47,433 | 1,483,704 |
TrueBlue, Inc.* | 29,445 | 655,151 |
5,244,403 | ||
Road & Rail - 2.6% | ||
Heartland Express, Inc. | 42,068 | 1,136,257 |
Roadrunner Transportation Systems, Inc.* | 62,306 | 1,454,845 |
Saia, Inc.* | 5,498 | 304,369 |
2,895,471 | ||
Trading Companies & Distributors - 1.5% | ||
Titan Machinery, Inc.* | 65,531 | 913,502 |
WESCO International, Inc.* | 9,221 | 702,733 |
1,616,235 | ||
Total Industrials | 27,279,081 |
Shares | Value | |
Information Technology - 17.6% | ||
Electronic Equipment & Instruments - 1.2% | ||
DTS, Inc.* | 16,814 | $ 517,031 |
Mesa Laboratories, Inc. | 10,195 | 788,175 |
1,305,206 | ||
Internet Software & Services - 6.3% | ||
Carbonite, Inc.* | 69,327 | 989,296 |
ChannelAdvisor Corp.* | 45,817 | 988,731 |
Dealertrack Technologies, Inc.* | 4,817 | 213,441 |
LivePerson, Inc.* | 63,331 | 892,967 |
New Relic Inc. * | 6,025 | 209,911 |
Q2 Holdings, Inc.* | 42,810 | 806,541 |
Reis, Inc. | 9,322 | 243,957 |
SciQuest, Inc.* | 34,234 | 494,681 |
SPS Commerce, Inc.* | 14,540 | 823,400 |
VistaPrint, N.V. (Netherlands)* | 17,588 | 1,316,286 |
6,979,211 | ||
IT Services - 1.9% | ||
Cass Information Systems, Inc. | 16,259 | 865,791 |
Euronet Worldwide, Inc.* | 23,082 | 1,267,202 |
2,132,993 | ||
Software - 7.2% | ||
Advent Software, Inc. | 36,627 | 1,122,251 |
Blackbaud, Inc. | 8,436 | 364,941 |
Callidus Software, Inc.* | 53,187 | 868,544 |
Exa Corp.* | 68,641 | 808,591 |
HubSpot Inc. * | 16,727 | 562,195 |
RealPage, Inc.* | 20,600 | 452,376 |
SolarWinds, Inc.* | 46,202 | 2,302,246 |
SS&C Technologies Holdings, Inc. | 24,915 | 1,457,278 |
7,938,422 | ||
Technology Hardware, Storage & Peripherals - 1.0% | ||
Stratasys Ltd.* | 12,845 | 1,067,548 |
Total Information Technology | 19,423,380 |
Meridian Funds | 27 | www.meridianfund.com |
Schedule of Investments (continued)
Shares | Value | |
Materials - 1.4% | ||
Chemicals - 1.4% | ||
Balchem Corp. | 12,884 | $ 858,590 |
Landec Corp.* | 49,279 | 680,543 |
Total Materials | 1,539,133 | |
Total Investments - 89.0% (Cost $91,165,691) | 98,166,308 | |
Cash and Other Assets, Less Liabilities - 11.0% | 12,100,066 | |
Net Assets - 100.0% | $110,266,374 |
ADR—American Depository Receipt |
N.V.—Naamloze Vennootschap is the Dutch term for limited liability company |
Plc—Public Limited Company |
* | Non-income producing securities |
Meridian Funds | 28 | www.meridianfund.com |
Statement of Assets and Liabilities
December 31, 2014 (Unaudited) | Meridian Growth Fund | Meridian Contrarian Fund | Meridian Equity Income Fund | Meridian Small Cap Growth Fund |
Assets | ||||
Investments, at value1 | $1,902,057,717 | $640,367,650 | $7,574,771 | $ 98,166,308 |
Cash | 185,528,105 | 58,015,992 | 69,120 | 23,132,207 |
Receivables and other assets: | ||||
Fund shares purchased | 1,162,935 | 13,492 | — | 1,694,896 |
Investments sold | — | 2,687,826 | — | — |
Dividends and Interest | 242,331 | 413,734 | 55,037 | 40,231 |
Prepaid expenses | 103,753 | 59,694 | 26,945 | 53,385 |
Total Assets | 2,089,094,841 | 701,558,388 | 7,725,873 | 123,087,027 |
Liabilities | ||||
Payables and other accrued expenses: | ||||
Call options written2 | — | — | 26,760 | — |
Fund shares sold | 1,898,874 | 271,261 | 67,909 | 20,147 |
Investments purchased | — | 9,122,489 | — | 12,667,937 |
Investment advisory fees | 1,339,939 | 594,063 | 15,308 | 91,068 |
Distribution fees | 331 | — | 214 | 31 |
Service plan fees | 8,930 | 355 | 156 | 7,404 |
Professional fees | 112,622 | 63,728 | 35,080 | 26,481 |
Directors' fees | 17,352 | 7,205 | 263 | — |
Transfer agent fees | 60,502 | 47,266 | 1,673 | — |
Other | 110,228 | 66,341 | 6,262 | 7,585 |
Total liabilities | 3,548,778 | 10,172,708 | 153,625 | 12,820,653 |
Net Assets | $2,085,546,063 | $691,385,680 | $7,572,248 | $110,266,374 |
Net Assets Consist of | ||||
Paid in capital | $1,777,094,871 | $538,479,551 | $5,332,141 | $103,229,541 |
Accumulated net realized gain on investments, written options, and foreign currency transactions | 51,586,769 | 17,849,444 | 1,535,092 | 223,589 |
Net unrealized appreciation on investments and foreign currency translations | 259,441,717 | 135,460,340 | 681,917 | 7,000,617 |
Net unrealized appreciation on written options | — | — | 2,880 | — |
Undistributed (distributions in excess of) net investment income | (2,577,294) | (403,655) | 20,218 | (187,373) |
Net Assets | $2,085,546,063 | $691,385,680 | $7,572,248 | $110,266,374 |
1 Investments at cost | 1,642,616,000 | 504,907,310 | 6,892,854 | 91,165,691 |
2 | Written options, premium received of $—, $—, $29,640, and $—, respectively. |
Meridian Funds | 29 | www.meridianfund.com |
Statement of Assets and Liabilities (continued)
December 31, 2014 (Unaudited) | Meridian Growth Fund | Meridian Contrarian Fund | Meridian Equity Income Fund | Meridian Small Cap Growth Fund |
Net Asset Value | ||||
Legacy Class | ||||
Net Assets | $2,049,507,843 | $689,553,154 | $7,411,347 | $35,221,033 |
Shares outstanding3 | 56,346,118 | 17,774,303 | 614,971 | 2,872,871 |
Net Asset value per share (offering and redemption price) | $ 36.37 | $ 38.79 | $ 12.05 | $ 12.26 |
Investor Class | ||||
Net Assets | $ 29,872,114 | $ 938,290 | $ 45,681 | $50,049,396 |
Shares outstanding3 | 824,257 | 24,182 | 3,784 | 4,083,854 |
Net Asset value per share (offering and redemption price) | $ 36.24 | $ 38.80 | $ 12.07 | $ 12.26 |
Advisor Class | ||||
Net Assets | $ 6,165,108 | $ 894,236 | $ 115,220 | $24,994,943 |
Shares outstanding3 | 170,888 | 23,116 | 9,558 | 2,046,172 |
Net Asset value per share (offering and redemption price) | $ 36.08 | $ 38.68 | $ 12.05 | $ 12.22 |
Institutional Class | ||||
Net Assets | $ 998 | $ — | $ — | $ 1,002 |
Shares outstanding3 | 27 | — | — | 82 |
Net Asset value per share (offering and redemption price) | $ 36.384 | $ — | $ — | $ 12.264 |
3 | 500,000,000 shares authorized, $0.01 par value. |
4 | Calculated NAV may not equal actual NAV shown due to rounding of the net assets and shares |
Meridian Funds | 30 | www.meridianfund.com |
Statements of Operations
For the Six Months Ended December 31, 2014 (Unaudited) | Meridian Growth Fund | Meridian Contrarian Fund | Meridian Equity Income Fund | Meridian Small Cap Growth Fund |
Investment Income | ||||
Dividends | $ 6,143,375 | $ 4,863,717 | $ 402,574 | $ 176,799 |
Foreign taxes withheld | (45,487) | (43,337) | (847) | (2,098) |
Interest Income | — | — | 5,593 | — |
Total investment income | 6,097,888 | 4,820,380 | 407,320 | 174,701 |
Expenses | ||||
Investment advisory fees | 7,751,454 | 3,642,337 | 148,171 | 267,377 |
Custodian fees | 95,222 | 38,438 | 3,447 | 7,347 |
Distribution and service plan fees: | ||||
Advisor Class | 11,798 | 996 | 388 | 20,667 |
Investor Class | 27,059 | 307 | 57 | 4,555 |
Directors' fees | 139,630 | 51,244 | 2,284 | 1,435 |
Pricing fees | 99,367 | 43,208 | 11,357 | 10,549 |
Audit and tax fees | 23,926 | 21,839 | 18,375 | 14,713 |
Legal fees | 83,161 | 29,429 | 1,260 | 41 |
Registration and filing fees | 34,702 | 28,089 | 32,863 | 38,404 |
Shareholder communications | 116,698 | 58,971 | 1,537 | 1,664 |
Transfer agent fees | 242,066 | 158,851 | 5,752 | 7,238 |
Recoupment of investment advisory fees previously waived | — | — | — | 2,281 |
Miscellaneous expenses | 51,639 | 20,124 | 3,073 | 4,119 |
Total expenses | 8,676,722 | 4,093,833 | 228,564 | 380,390 |
Less waivers and/or reimbursements (Note 5) | (1,540) | (7,476) | (27,094) | (18,316) |
Net expenses | 8,675,182 | 4,086,357 | 201,470 | 362,074 |
Net investment income (loss) | (2,577,294) | 734,023 | 205,850 | (187,373) |
Realized and Unrealized Gain (Loss) | ||||
Net realized gain on investments and foreign currency transactions | 123,529,383 | 37,834,681 | 7,582,960 | 1,483,408 |
Net realized loss on written options | — | — | (23,267) | — |
Net change in unrealized appreciation(depreciation) on investments and foreign currency translations | 35,194,360 | (22,360,850) | (7,373,182) | 6,115,875 |
Net change in unrealized appreciation on written options | — | — | 2,880 | — |
Total realized and unrealized gain | 158,723,743 | 15,473,831 | 189,391 | 7,599,283 |
Net Increase in net assets resulting from operations | $156,146,449 | $ 16,207,854 | $ 395,241 | $7,411,910 |
Meridian Funds | 31 | www.meridianfund.com |
Statements of Changes in Net Assets
Meridian Growth Fund | Meridian Contrarian Fund | ||||
Changes in Net Assets From: | Six Months Ended December 31, 2014 (Unaudited) | Year Ended June 30, 2014 | Six Months Ended December 31, 2014 (Unaudited) | Year Ended June 30, 2014 | |
Operations | |||||
Net investment income/(loss) | $ (2,577,294) | $ (5,858,482) | $ 734,023 | $ 109,511 | |
Net realized gain on investments, written options, and foreign currency transactions | 123,529,383 | 556,304,765 | 37,834,681 | 157,634,506 | |
Net change in unrealized appreciation (depreciation) on investments, written options, and foreign currency translations | 35,194,360 | (212,344,132) | (22,360,850) | (1,572,341) | |
Net increase in net assets resulting from operations and foreign currency translations | 156,146,449 | 338,102,151 | 16,207,854 | 156,171,676 | |
Distributions to Shareholders From: | |||||
Net Investment income: | |||||
Legacy Class | — | (1,246) | (1,287,678) | (3,275,946) | |
Advisor Class | — | — | — | (51) | |
Investor Class | — | — | — | (41) | |
Institutional Class | — | — | — | ||
Net Realized Gains: | |||||
Legacy Class | (219,516,396) | (598,507,009) | (115,863,711) | (2,568,833) | |
Advisor Class | (595,614) | — | (155,510) | — | |
Investor Class | (3,083,406) | — | (174,302) | — | |
Institutional Class | — | — | — | ||
Decrease in net assets from distributions | (223,195,416) | (598,508,255) | (117,481,201) | (5,844,871) | |
Fund Share Transactions | |||||
Net increase (decrease) in net assets resulting from fund share transactions (Note 2) | 107,745,463 | 192,310,546 | 25,751,165 | (87,941,564) | |
Total increase (decrease) in net assets | 40,696,496 | (68,095,558) | (75,522,182) | 62,385,241 | |
Net Assets | |||||
Beginning of Period | 2,044,849,567 | 2,112,945,125 | 766,907,862 | 704,522,621 | |
End of Period* | $2,085,546,063 | $2,044,849,567 | $ 691,385,680 | $766,907,862 | |
* Includes accumulated undistributed (distributions in excess of) net investment income | $ (2,577,294) | $ — | $ (403,655) | $ 150,000 |
Meridian Funds | 32 | www.meridianfund.com |
Statements of Changes in Net Assets (continued)
Meridian Equity Income Fund | Meridian Small Cap Growth Fund | ||||
Changes in Net Assets From: | Six Months Ended December 31, 2014 (Unaudited) | Year Ended June 30, 2014 | Six Months Ended December 31, 2014 (Unaudited) | For the Period December 16, 2013 to June 30, 2014 | |
Operations | |||||
Net investment income/(loss) | $ 205,850 | $ 553,968 | $ (187,373) | $ (49,643) | |
Net realized gain on investments, written options, and foreign currency transactions | 7,559,693 | 2,242,362 | 1,483,408 | 1,120,438 | |
Net change in unrealized appreciation (depreciation) on investments, written options, and foreign currency translations | (7,370,302) | 2,899,378 | 6,115,875 | 884,741 | |
Net increase in net assets resulting from operations and foreign currency translations | 395,241 | 5,695,708 | 7,411,910 | 1,955,536 | |
Distributions to Shareholders From: | |||||
Net Investment income: | |||||
Legacy Class | (664,498) | (500,908) | — | — | |
Advisor Class | (2,071) | (145) | — | — | |
Investor Class | (876) | (148) | — | — | |
Institutional Class | — | — | — | ||
Net Realized Gains: | |||||
Legacy Class | (5,535,693) | — | (836,030) | — | |
Advisor Class | (19,039) | — | (556,328) | — | |
Investor Class | (7,536) | — | (939,505) | — | |
Institutional Class | — | — | — | ||
Decrease in net assets from distributions | (6,229,713) | (501,201) | (2,331,863) | — | |
Fund Share Transactions | |||||
Net increase (decrease) in net assets resulting from fund share transactions (Note 2) | (20,300,580) | (184,365) | 86,688,878 | 16,541,912 | |
Total increase (decrease) in net assets | (26,135,052) | 5,010,142 | 91,768,925 | 18,497,448 | |
Net Assets | |||||
Beginning of Period | 33,707,300 | 28,697,158 | 18,497,448 | — | |
End of Period* | $ 7,572,248 | $33,707,300 | $110,266,373 | $18,497,448 | |
* Includes accumulated undistributed (distributions in excess of) net investment income | $ 20,218 | $ 481,813 | $ (187,373) | $ — |
Meridian Funds | 33 | www.meridianfund.com |
Financial Highlights
For the Six Months Ended December 31, | For the Fiscal Year Ended June 30, | |||||
Legacy Class | 2014 (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Per Share Operating Performance | ||||||
Net asset value, beginning of period | $ 37.86 | $ 44.31 | $ 45.06 | $ 47.61 | $ 33.94 | $ 27.89 |
Income (loss) from investment operations | ||||||
Net investment income (loss)1 | (0.05) | (0.11) | 0.05 | 0.10 | 0.08 | 0.08 |
Net realized and unrealized gain | 2.84 | 6.89 | 6.23 | 0.69 | 13.67 | 6.11 |
Net increase from investment operations | 2.79 | 6.78 | 6.28 | 0.79 | 13.75 | 6.19 |
Less distributions to shareholders: | ||||||
Distributions from net investment income | 0.00 | 0.00 | (0.15) | (0.07) | (0.07) | (0.12) |
Distributions from net realized capital gains | (4.28) | (13.23) | (6.88) | (3.27) | (0.01) | 0.00 |
Distributions from paid in capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (0.02) |
Total distributions to shareholders | (4.28) | (13.23) | (7.03) | (3.34) | (0.08) | (0.14) |
Net asset value, end of period | $ 36.37 | $ 37.86 | $ 44.31 | $ 45.06 | $ 47.61 | $ 33.94 |
Total return | 7.62% 2 | 17.31% | 15.54% | 2.45% | 40.51% | 22.18% |
Ratios to Average Net Assets | ||||||
Ratio of net investment income to average net assets | (0.25%) 3 | (0.27%) | 0.11% | 0.22% | 0.18% | 0.24% |
Ratio of expenses to average net assets: | 0.84% 3 | 0.86% | 0.87% | 0.85% | 0.81% | 0.84% |
Supplemental Data | ||||||
Net Assets, End of Period (000's) | $2,049,508 | $2,021,197 | $2,112,945 | $2,484,084 | $2,615,082 | $1,438,266 |
Portfolio Turnover Rate | 25% 2 | 96% | 37% | 25% | 26% | 37% |
1 | Per share net investment income has been calculated using the average daily shares method. |
2 | Not Annualized. |
3 | Annualized. |
Meridian Funds | 34 | www.meridianfund.com |
Financial Highlights
For The Six Months Ended December 31,2014 (Unaudited) | For The Period Ended June 30,2014 | For The Six Months Ended December 31,2014 (Unaudited) | For The Period Ended June 30,2014 | ||||
Investor Class | Investor Class1 | Advisor Class | Advisor Class1 | ||||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 37.78 | $ 35.67 | $ 37.72 | $ 35.67 | |||
Income (loss) from investment operations | |||||||
Net investment income (loss)2 | (0.10) | (0.16) | (0.18) | (0.21) | |||
Net realized and unrealized gain | 2.84 | 2.27 | 2.82 | 2.26 | |||
Net increase from investment operations | 2.74 | 2.11 | 2.64 | 2.05 | |||
Less distributions to shareholders: | |||||||
Distributions from net realized capital gains | (4.28) | 0.00 | (4.28) | 0.00 | |||
Total distributions to shareholders | (4.28) | 0.00 | (4.28) | 0.00 | |||
Net asset value, end of period | $ 36.24 | $ 37.78 | $ 36.08 | $ 37.72 | |||
Total return | 7.50% 3 | 5.92% 3 | 7.25% 3 | 5.75% 3 | |||
Ratios to Average Net Assets | |||||||
Ratio of net investment loss to average net assets after fees waived | (0.53)% 4 | (0.70)% 4 | (0.95)% 4 | (0.93)% 4 | |||
Ratio of expenses to average net assets: | |||||||
Before fees waived | 1.14% 4 | 1.30% 4 | 1.62% 4 | 2.00% 4 | |||
After fees waived5 | 1.14% 4 | 1.30% 4 | 1.55% 4 | 1.55% 4 | |||
Supplemental Data | |||||||
Net Assets, End of Period (000's) | $29,872 | $18,749 | $ 6,165 | $ 4,904 | |||
Portfolio Turnover Rate | 25% 3 | 96% 3 | 25% 3 | 96% 3 |
1 | Commenced operations on November 15, 2013. |
2 | Per share net investment income has been calculated using the average daily shares method. |
3 | Not Annualized. |
4 | Annualized. |
5 | See Note 5 to Financial Statements. |
Meridian Funds | 35 | www.meridianfund.com |
Financial Highlights
Institutional Class | For the Period Ended December 31, 2014 (Unaudited)1 |
Per Share Operating Performance | |
Net asset value, beginning of period | $ 36.44 |
Income (loss) from investment operations: | |
Net investment income2 | 0.00 |
Net realized and unrealized loss | (0.06) |
Net decrease from investment operations | (0.06) |
Less distributions to shareholders: | |
Distributions from net investment income | — |
Distributions from net realized capital gains | — |
Total distributions to shareholders | — |
Net asset value, end of period | $ 36.38 |
Total return | (0.17)% 3 |
Ratios to Average Net Assets | |
Ratio of net investment income (loss) to average net assets after fees waived | (0.25%) 4 |
Ratio of expenses to average net assets | |
Before fees waived | 0.44% 4 |
After fees waived5 | 0.44% 4 |
Supplemental Data | |
Net Assets, End of Period (000's) | $ 1 |
Portfolio Turnover Rate | 25% 3 |
1 | Commenced operations on December 24, 2014. |
2 | Per share net investment income has been calculated using the average daily shares method. |
3 | Not Annualized. |
4 | Annualized. |
5 | See Note 5 to Financial Statements. |
Meridian Funds | 36 | www.meridianfund.com |
Financial Highlights
For the Six Months Ended December 31, | For the Fiscal Year Ended June 30, | |||||
Legacy Class | 2014 (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Per Share Operating Performance | ||||||
Net asset value, beginning of period | $ 45.52 | $ 37.20 | $ 30.60 | $ 29.59 | $ 22.80 | $ 20.53 |
Income from investment operations | ||||||
Net investment income1 | 0.05 | 0.01 | 0.14 | 0.09 | 0.10 | 0.07 |
Net realized and unrealized gain | 0.96 | 8.63 | 6.57 | 1.05 2 | 6.77 | 2.45 |
Net increase from investment operations | 1.01 | 8.64 | 6.71 | 1.14 | 6.87 | 2.52 |
Less distributions to shareholders: | ||||||
Distributions from net investment income | (0.09) | (0.18) | (0.11) | (0.13) | (0.08) | (0.25) |
Distributions from net realized capital gains | (7.65) | (0.14) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (7.74) | (0.32) | (0.11) | (0.13) | (0.08) | (0.25) |
Net asset value, end of period | $ 38.79 | $ 45.52 | $ 37.20 | $ 30.60 | $ 29.59 | $ 22.80 |
Total return | 2.48% 3 | 23.31% | 21.98% | 3.89% 2 | 30.13% | 12.20% |
Ratios to Average Net Assets | ||||||
Ratio of net investment income to average net assets4 | 0.20% 5 | 0.01% | 0.41% | 0.31% | 0.37% | 0.27% |
Ratio of expenses to average net assets: | 1.12% 5 | 1.13% | 1.16% | 1.14% | 1.09% | 1.09% |
Supplemental Data | ||||||
Net Assets, End of Period (000's) | $689,553 | $764,882 | $704,523 | $688,467 | $869,312 | $802,936 |
Portfolio Turnover Rate | 35% 3 | 67% | 55% | 20% | 38% | 45% |
1 | Per share net investment income has been calculated using the average daily shares method. |
2 | Includes a gain resulting from litigation payments on securities owned in a prior year. Without these gains, the net realized gains on investments per share would have been $0.99, and the total return would have been 3.69%. |
3 | Not Annualized. |
4 | See Note 5 to Financial Statements. |
5 | Annualized. |
Meridian Funds | 37 | www.meridianfund.com |
Financial Highlights
For The Six Months Ended December 31,2014 (Unaudited) | For The Period Ended June 30,2014 | For The Six Months Ended December 31,2014 (Unaudited) | For The Period Ended June 30,2014 | ||||
Investor Class | Investor Class1 | Advisor Class | Advisor Class1 | ||||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 45.47 | $ 42.64 | $ 45.41 | $ 42.64 | |||
Income (loss) from investment operations | |||||||
Net investment income (loss)2 | 0.00 3 | (0.02) | (0.06) | (0.08) | |||
Net realized and unrealized gain | 0.98 | 3.03 | 0.98 | 3.02 | |||
Net increase from investment operations | 0.98 | 3.01 | 0.92 | 2.94 | |||
Less distributions to shareholders: | |||||||
Distributions from net investment income | 0.00 | (0.18) | 0.00 | (0.17) | |||
Distributions from net realized capital gains | (7.65) | 0.00 | (7.65) | 0.00 | |||
Total distributions to shareholders | (7.65) | (0.18) | (7.65) | (0.17) | |||
Net asset value, end of period | $ 38.80 | $ 45.47 | $ 38.68 | $ 45.41 | |||
Total return | 2.44% 4 | 7.08% 4 | 2.31% 4 | 6.91% 4 | |||
Ratios to Average Net Assets | |||||||
Ratio of net investment loss to average net assets after fees waived | (0.00)% 3, 5 | (0.09)% 5 | (0.27)% 5 | (0.30)% 5 | |||
Ratio of expenses to average net assets: | |||||||
Before fees waived | 1.90% 5 | 3.51% 5 | 2.84% 5 | 7.46% 5 | |||
After fees waived6 | 1.35% 5 | 1.35% 5 | 1.60% 5 | 1.60% 5 | |||
Supplemental Data | |||||||
Net Assets, End of Period (000's) | $ 938 | $ 1,564 | $ 894 | $ 462 | |||
Portfolio Turnover Rate | 35% 4 | 67% 4 | 35% 4 | 67% 4 |
1 | Commenced operations on November 15, 2013. |
2 | Per share net investment income has been calculated using the average daily shares method. |
3 | Less than $0.005 per share. |
4 | Not Annualized. |
5 | Annualized. |
6 | See Note 5 to Financial Statements. |
Meridian Funds | 38 | www.meridianfund.com |
Financial Highlights
For the Six Months Ended December 31, | For the Fiscal Year Ended June 30, | |||||
Legacy Class | 2014 (Unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 |
Per Share Operating Performance | ||||||
Net asset value, beginning of period | $ 14.59 | $ 12.35 | $ 10.71 | $ 10.61 | $ 8.51 | $ 6.88 |
Income from investment operations | ||||||
Net investment income1 | 0.09 | 0.24 | 0.24 | 0.22 | 0.20 | 0.19 |
Net realized and unrealized gain | 0.04 | 2.22 | 1.68 | 0.09 | 2.11 | 1.63 |
Net increase from investment operations | 0.13 | 2.46 | 1.92 | 0.31 | 2.31 | 1.82 |
Less distributions to shareholders: | ||||||
Distributions from net investment income | (0.25) | (0.22) | (0.28) | (0.21) | (0.21) | (0.19) |
Distributions from net realized capital gains | (2.42) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (2.67) | (0.22) | (0.28) | (0.21) | (0.21) | (0.19) |
Net asset value, end of period | $ 12.05 | $ 14.59 | $ 12.35 | $ 10.71 | $ 10.61 | $ 8.51 |
Total return | 0.61% 2 | 20.04% | 18.28% | 3.09% | 27.30% | 26.44% |
Ratios to Average Net Assets | ||||||
Ratio of net investment income to average net assets after fees waived | 1.28% 3 | 1.75% | 2.08% | 2.17% | 2.04% | 2.27% |
Ratio of expenses to average net assets: | ||||||
Before fees waived | 1.36% 3 | 1.37% | 1.53% | 1.41% | 1.25% | 1.30% |
After fees waived4 | 1.25% 3 | 1.25% | 1.25% | 1.25% | 1.25% 5 | 1.25% |
Supplemental Data | ||||||
Net Assets, End of Period (000's) | $ 7,411 | $ 33,649 | $ 28,697 | $30,744 | $ 35,644 | $ 24,937 |
Portfolio Turnover Rate | 113% 2 | 35% | 44% | 31% | 29% | 63% |
1 | Per share net investment income has been calculated using the average daily shares method. |
2 | Not Annualized. |
3 | Annualized. |
4 | See Note 5 to Financial Statements. |
5 | Includes fees waived, which were less than 0.01%. |
Meridian Funds | 39 | www.meridianfund.com |
Financial Highlights
For The Six Months Ended December 31,2014 (Unaudited) | For The Period Ended June 30,2014 | For The Six Months Ended December 31,2014 (Unaudited) | For The Period Ended June 30,2014 | ||||
Investor Class | Investor Class1 | Advisor Class | Advisor Class1 | ||||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 14.60 | $ 13.87 | $ 14.58 | $ 13.87 | |||
Income from investment operations | |||||||
Net investment income2 | 0.09 | 0.15 | 0.07 | 0.13 | |||
Net realized and unrealized gain | 0.04 | 0.79 | 0.04 | 0.78 | |||
Net increase from investment operations | 0.13 | 0.94 | 0.11 | 0.91 | |||
Less distributions to shareholders: | |||||||
Distributions from net investment income | (0.24) | (0.21) | (0.22) | (0.20) | |||
Distributions from net realized capital gains | (2.42) | 0.00 | (2.42) | 0.00 | |||
Total distributions to shareholders | (2.66) | (0.21) | (2.64) | (0.20) | |||
Net asset value, end of period | $ 12.07 | $ 14.60 | $ 12.05 | $ 14.58 | |||
Total return | 0.60% 3 | 6.87% 3 | 0.49% 3 | 6.69% 3 | |||
Ratios to Average Net Assets | |||||||
Ratio of net investment income to average net assets after fees waived | 1.22% 4 | 1.72% 4 | 1.02% 4 | 1.55% 4 | |||
Ratio of expenses to average net assets: | |||||||
Before fees waived | 21.05% 4 | 39.23% 4 | 7.73% 4 | 132.38% 4 | |||
After fees waived5 | 1.35% 4 | 1.35% 4 | 1.60% 4 | 1.60% 4 | |||
Supplemental Data | |||||||
Net Assets, End of Period (000's) | $ 46 | $ 45 | $ 115 | $ 13 | |||
Portfolio Turnover Rate | 113% 3 | 35% 3 | 113% 3 | 35% 3 |
1 | Commenced operations on November 15, 2013. |
2 | Per share net investment income has been calculated using the average daily shares method. |
3 | Not Annualized. |
4 | Annualized. |
5 | See Note 5 to Financial Statements. |
Meridian Funds | 40 | www.meridianfund.com |
Financial Highlights
For the Six Months Ended December 31,2014 (Unaudited) | For the Period Ended June 30,2014 | For the Six Months Ended December 31,2014 (Unaudited) | For the Period Ended June 30,2014 | ||||
Legacy Class | Legacy Class1 | Investor Class | Investor Class1 | ||||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 11.65 | $ 10.00 | $ 11.65 | $ 10.00 | |||
Income (loss) from investment operations: | |||||||
Net investment loss2 | (0.03) | (0.04) | (0.04) | (0.04) | |||
Net realized and unrealized gain | 0.94 | 1.69 | 0.95 | 1.69 | |||
Net increase from investment operations | 0.91 | 1.65 | 0.91 | 1.65 | |||
Less distributions to shareholders: | |||||||
Distributions from net realized capital gains | (0.30) | 0.00 | (0.30) | 0.00 | |||
Total distributions to shareholders | (0.30) | 0.00 | (0.30) | 0.00 | |||
Net asset value, end of period | $ 12.26 | $ 11.65 | $ 12.26 | $ 11.65 | |||
Total return | 7.89% 3 | 16.50% 3 | 7.89% 3 | 16.50% 3 | |||
Ratios to Average Net Assets | |||||||
Ratio of net investment loss to average net asset after fees waived | (0.56)% 4 | (0.61)% 4 | (0.66)% 4 | (0.70)% 4 | |||
Ratio of expenses to average net assets: | |||||||
Before fees waived | 1.29% 4 | 2.35% 4 | 1.32% 4 | 3.63% 4 | |||
After fees waived5 | 1.20% 4 | 1.20% 4 | 1.35% 4 | 1.35% 4 | |||
Supplemental Data | |||||||
Net Assets, End of Period (000's) | $35,221 | $ 9,839 | $50,049 | $ 2,135 | |||
Portfolio Turnover Rate | 26% 3 | 78% 3 | 26% 3 | 78% 3 |
1 | Commenced operations on December 16, 2013. |
2 | Per share net investment income has been calculated using the average daily shares method. |
3 | Not Annualized. |
4 | Annualized. |
5 | See Note 5 to Financial Statements. |
Meridian Funds | 41 | www.meridianfund.com |
Financial Highlights
Six Months Ended December 31, 2014 (Unaudited) | For Period Ended June 30, 2014 | For Period Ended December 31, 2014 (Unaudited) | |||
Advisor Class | Advisor Class1 | Institutional Class2 | |||
Per Share Operating Performance | |||||
Net asset value, beginning of period | $ 11.63 | $ 10.00 | $ 12.23 | ||
Income (loss) from investment operations: | |||||
Net investment income (loss)3 | (0.06) | (0.06) | 0.00 | ||
Net realized and unrealized gain | 0.95 | 1.69 | 0.03 | ||
Net increase from investment operations | 0.89 | 1.63 | 0.03 | ||
Less distributions to shareholders: | |||||
Distributions from net realized capital gains | (0.30) | — | — | ||
Total Distributions to shareholders | (0.30) | — | — | ||
Net asset value, end of period | $ 12.22 | $ 11.63 | $ 12.26 | ||
Total return | 7.73% 4 | 16.30% 4 | 0.25% 4 | ||
Ratios to Average Net Assets | |||||
Ratio of net investment income (loss) to average net assets after fees waived | (0.97)% 5 | (1.01)% 5 | (0.34)% 5 | ||
Ratio of expenses to average net assets: | |||||
Before fees waived | 1.73% 5 | 2.99% 5 | 0.98% 5 | ||
After fees waived6 | 1.60% 5 | 1.60% 5 | 0.98% 5 | ||
Supplemental Data | |||||
Net Assets, End of Period (000's) | $24,995 | $ 6,524 | $ 1 | ||
Portfolio Turnover Rate | 26% 4 | 78% 4 | 26% 4 |
1 | Commenced operations on December 16, 2013. |
2 | Commenced operations on December 24, 2014. |
3 | Per share net investment income has been calculated using the average daily shares method. |
4 | Not Annualized. |
5 | Annualized. |
6 | See Note 5 to Financial Statements. |
Meridian Funds | 42 | www.meridianfund.com |
Notes to Financial Statements
1. | Organization and Significant Accounting Policies: Meridian Fund, Inc. (the “Meridian Funds” or the “Company”) comprises the following separate series: the Meridian Growth Fund (the “Growth Fund”), the Meridian Contrarian Fund (the “Contrarian Fund”), the Meridian Equity Income Fund (the “Equity Income Fund”), and the Meridian Small Cap Growth Fund (the “Small Cap Growth Fund”), each a “Fund” and collectively, the “Funds”. The Company is registered as an open-end investment company under the Investment Company Act of 1940 and is organized as a Maryland Corporation. Each fund is no load and diversified. |
The Meridian Funds offer four share classes: Legacy Class Shares, Investor Class Shares, Advisor Class Shares and Institutional Class Shares. As of December 31, 2014, Institutional Class Shares of the Meridian Equity Income Fund and Meridian Contrarian Fund are not currently being offered for sale. Legacy Class Shares are available to investors who have continuously held an investment in any Meridian Fund prior to November 15, 2013. Institutional Class Shares are available to certain eligible investors including endowments, foundations and qualified retirement plans. Advisor Class and Investor Class Shares are available for purchase through financial intermediary platforms. All Classes are sold without a sales charge and have identical rights and privileges with respect to the Fund in general, and exclusive voting rights with respect to Class specific matters. Net Asset Value per share may differ by class due to each class having its own expenses directly attributable to that class. Investor Class and Advisor Class Shares are subject to shareholder servicing and sub-transfer agent fees. Advisor Class Shares are also subject to certain expenses related to the distribution of these shares. | |
The primary investment objectives of the Growth Fund and Contrarian Fund are to seek long-term growth of capital. | |
The primary investment objective of the Equity Income Fund is to seek long-term growth of capital along with income as a component of total return. | |
The primary investment objective of the Small Cap Growth Fund is to seek long-term growth of capital by investing primarily in equity securities of small capitalization companies. | |
The following is a summary of significant accounting policies for all of the Funds: |
a. | Investment Valuations: The Funds calculate the net asset value of the Funds’ shares as of the close of business of the New York Stock Exchange (NYSE), which is usually 4:00 p.m. Eastern time, on each day the exchange is open for trading. |
Equity securities are valued at the closing price or last sales price on the principal exchange or market on which they are traded; or, if there were no sales that day, at the last reported bid price. | |
Fixed income (debt) securities with original or remaining maturities in excess of 60 days are valued at the mean of their quoted bid and asked prices. Short-term debt securities with 60 days or less to maturity are valued at amortized cost which approximates fair market value. | |
Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. | |
Securities and other assets for which reliable market quotations are not readily available or for which a significant event has occurred since the time of the most recent market quotation, will be valued at their fair value as determined by Arrowpoint Asset Management, LLC (the “Adviser”) under the guidelines established by, and under the general supervision and responsibility of, the Funds’ Board of Directors (the “Board”). |
Meridian Funds | 43 | www.meridianfund.com |
Notes to Financial Statements (continued)
b. | Fair Value Measurements: As described in Note 1.a. above, the Funds utilize various methods to determine and measure the fair value of investment securities on a recurring basis. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: |
Level 1 - quoted prices in active markets for identical securities; | |
Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and | |
Level 3 - significant unobservable inputs (including the Fund’s determinations as to the fair value of investments). | |
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. The summary of inputs used to value the Funds’ securities as of December 31, 2014 is as follows: |
Valuation Inputs | Growth Fund | Contrarian Fund | Equity Income Fund | Small Cap Growth Fund | ||||
Level 1 - Quoted Prices* | $1,902,057,717 | $640,367,650 | $7,574,771 | $98,166,308 | ||||
Level 2 - Other Significant Observable Inputs | — | — | — | — | ||||
Level 3 - Significant Unobservable Inputs | — | — | — | — | ||||
Total Market Value of Investments | $1,902,057,717 | $640,367,650 | $7,574,771 | $98,166,308 | ||||
Call Options Written (Level 1) | $ — | $ — | $ (26,760) | $ — |
* | Level 1 investments are comprised of common stock with industry classifications as defined on the Schedule of Investments. |
c. | Investment Transactions and Investment Income: Security transactions are accounted for on the date the securities are purchased or sold (trade date). Realized gains and losses on security transactions are determined on the basis of specific identification for both financial statement and federal income tax purposes. Dividend income is recorded on the ex-dividend date. Interest income is accrued daily. |
d. | Option writing: When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. |
e. | Allocation of Income, Expenses, Gains and Losses: Income, gains and losses are allocated on a daily basis to each share class based on the relative proportion of the net assets of the class to each Fund’s total net assets. Expenses are allocated on the basis of relative net assets of the class to the Fund, or if an expense is specific to a share class, to that specific share class. |
f. | Use of Estimates: The preparation of financial statements in accordance with accounting principals generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and revenue and expenses at the date of the financial statements. Actual amounts could differ from those estimates, and such differences could be significant. |
Meridian Funds | 44 | www.meridianfund.com |
Notes to Financial Statements (continued)
g. | Foreign Currency Translation: Securities denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of such securities and related dividend and interest income are converted into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such translations. The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments as reported in the Statement of Operations. |
h. | Federal Income Taxes: It is the Funds’ policy to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute all of their taxable income to their shareholders; therefore, no federal income tax provision is required. |
i. | Distributions to Shareholders: The Funds record distributions to shareholders on the ex-dividend date. The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. |
Distributions which exceed net investment income and net realized capital gains are reported as distributions in excess of net investment income or distributions in excess of net realized capital gains for financial reporting purposes but not for tax purposes. To the extent they exceed net investment income and net realized capital gains for tax purposes, they are reported as distributions of paid-in-capital. | |
j. | Guarantees and Indemnification: Under the Funds’ organizational documents, its Officers and Directors are indemnified against certain liability arising out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. |
Meridian Funds | 45 | www.meridianfund.com |
Notes to Financial Statements (continued)
2. | Capital Shares Transactions: Transactions in capital shares were as follows: |
Six Months Ended December 31, 20141 | Year Ended June 30, 20142 | |||||
Shares | Amount | Shares | Amount | |||
Growth Fund: | ||||||
Legacy Class | ||||||
Shares sold | 4,350,846 | $ 160,262,182 | 10,014,988 | $ 393,045,340 | ||
Shares issued from reinvestment of distributions | 6,062,592 | 215,888,912 | 16,379,845 | 581,156,891 | ||
Redemption fees | — | 15,167 | — | 57,692 | ||
Shares redeemed | (7,455,272) | (282,304,561) | (20,688,964) | (804,765,033) | ||
Net increase | 2,958,166 | $ 93,861,700 | 5,705,869 | $ 169,494,890 | ||
Investor Class | ||||||
Shares sold | 442,174 | $ 16,016,833 | 544,259 | $ 20,321,746 | ||
Shares issued from reinvestment of distributions | 83,780 | 2,973,367 | — | — | ||
Redemption fees | — | 6,458 | — | 3,821 | ||
Shares redeemed | (177,997) | (6,618,463) | (47,960) | (2,225,053) | ||
Net increase | 347,957 | $ 12,378,195 | 496,299 | $ 18,100,514 | ||
Advisor Class | ||||||
Shares sold | 66,975 | $ 2,496,813 | 146,597 | $ 5,320,397 | ||
Shares issued from reinvestment of distributions | 15,188 | 536,592 | — | — | ||
Redemption fees | — | — | — | 1,301 | ||
Shares redeemed | (41,295) | (1,528,837) | (16,577) | (606,556) | ||
Net increase | 40,868 | $ 1,504,568 | 130,020 | $ 4,715,142 | ||
Institutional Class | ||||||
Shares sold | 27 | $ 1,000 | ||||
Shares issued from reinvestment of distributions | — | — | ||||
Redemption fees | — | — | ||||
Shares redeemed | — | — | ||||
Net increase | 27 | $ 1,000 |
Meridian Funds | 46 | www.meridianfund.com |
Notes to Financial Statements (continued)
Six Months Ended December 31, 20141 | Year Ended June 30, 20142 | |||||
Shares | Amount | Shares | Amount | |||
Contrarian Fund: | ||||||
Legacy Class | ||||||
Shares sold | 51,907 | $ 2,272,971 | 241,010 | $ 10,132,026 | ||
Shares issued from reinvestment of distributions | 2,985,880 | 113,941,163 | 134,284 | 5,700,050 | ||
Redemption fees | — | 5,016 | — | 10,129 | ||
Shares redeemed | (2,066,385) | (90,549,545) | (2,512,845) | (105,721,357) | ||
Net increase/(decrease) | 971,402 | $ 25,669,605 | (2,137,551) | $ (89,879,152) | ||
Investor Class | ||||||
Shares sold | 1,662 | $ 73,384 | 34,399 | $ 1,500,479 | ||
Shares issued from reinvestment of distributions | 3,731 | 142,308 | 1 | 54 | ||
Redemption fees | — | 139 | — | — | ||
Shares redeemed | (15,611) | (690,573) | — | — | ||
Net increase/(decrease) | (10,218) | $ (474,742) | 34,400 | $ 1,500,533 | ||
Advisor Class | ||||||
Shares sold | 12,277 | $ 545,199 | 10,182 | $ 438,766 | ||
Shares issued from reinvestment of distributions | 2,821 | 107,325 | 1 | 39 | ||
Redemption fees | — | — | — | — | ||
Shares redeemed | (2,147) | (96,222) | (18) | (1,750) | ||
Net increase | 12,951 | $ 556,302 | 10,165 | $ 437,055 |
Equity Income Fund: | ||||||
Legacy Class | ||||||
Shares sold | 6,669 | $ 93,573 | 53,466 | $ 735,117 | ||
Shares issued from reinvestment of distributions | 490,554 | 6,112,915 | 36,708 | 494,457 | ||
Redemption fees | — | 198 | — | 542 | ||
Shares redeemed | (2,187,924) | (26,637,485) | (107,442) | (1,469,985) | ||
Net decrease | (1,690,701) | $(20,430,799) | (17,268) | $ (239,869) | ||
Investor Class | ||||||
Shares sold | — | $ — | 3,098 | $ 43,105 | ||
Shares issued from reinvestment of distributions | 675 | 8,412 | 11 | 148 | ||
Redemption fees | — | — | — | — | ||
Shares redeemed | — | — | — | — | ||
Net increase | 675 | $ 8,412 | 3,109 | $ 43,253 | ||
Advisor Class | ||||||
Shares sold | 12,817 | $ 186,645 | 885 | $ 12,285 | ||
Shares issued from reinvestment of distributions | 1,696 | 21,110 | 11 | 145 | ||
Redemption fees | — | — | — | 2 | ||
Shares redeemed | (5,838) | (85,948) | (13) | (181) | ||
Net increase | 8,675 | $ 121,807 | 883 | $ 12,251 |
Meridian Funds | 47 | www.meridianfund.com |
Notes to Financial Statements (continued)
Six Months Ended December 31, 20141 | Period Ended June 30, 20142 | |||||
Shares | Amount | Shares | Amount | |||
Small Cap Growth Fund: | ||||||
Legacy Class | ||||||
Shares sold | 1,990,672 | $22,994,962 | 844,877 | $8,575,976 | ||
Shares issued from reinvestment of distributions | 70,018 | 835,314 | — | — | ||
Redemption fees | — | 790 | — | — | ||
Shares redeemed | (32,357) | (371,011) | (339) | (3,739) | ||
Net increase | 2,028,333 | $23,460,055 | 844,538 | $8,572,237 | ||
Investor Class | ||||||
Shares sold | 3,948,862 | $46,347,931 | 183,546 | $1,977,647 | ||
Shares issued from reinvestment of distributions | 65,822 | 784,601 | — | — | ||
Redemption fees | — | 9,892 | — | — | ||
Shares redeemed | (114,135) | (1,363,134) | (241) | (2,514) | ||
Net increase | 3,900,549 | $45,779,290 | 183,305 | $1,975,133 | ||
Advisor Class | ||||||
Shares sold | 1,613,403 | $18,961,119 | 606,032 | $6,471,230 | ||
Shares issued from reinvestment of distributions | 45,993 | 546,859 | — | — | ||
Redemption fees | — | 654 | — | 588 | ||
Shares redeemed | (174,157) | (2,060,099) | (45,099) | (477,276) | ||
Net increase | 1,485,239 | $17,448,533 | 560,933 | $5,994,542 | ||
Institutional Class | ||||||
Shares sold | 82 | $ 1,000 | ||||
Shares issued from reinvestment of distributions | — | — | ||||
Redemption fees | — | — | ||||
Shares redeemed | — | — | ||||
Net increase | 82 | $ 1,000 |
1 | For the six month period ending December 31, 2014 for Legacy, Investor, and Advisor Class Shares of all Funds. For the period from December 24, 2014 for the Institutional Class Shares for the Growth and Small Cap Growth Funds. |
2 | For the twelve month period ending June 30, 2014 for Legacy Class Shares of the Growth, Contrarian, and Equity Income Funds. For the period from November 15, 2013 for Institutional and Advisor Class Shares for the Growth, Contrarian, and Equity Income Funds. For the period from December 16, 2013 for all Classes of Small Cap Growth Fund. |
3. | Investment Transactions: The cost of investments purchased and the proceeds from sales of investments, excluding short-term securities and U.S. government obligations, for the six months ended December 31, 2014, were as follows: |
Purchases | Proceeds from Sales | ||
Growth Fund | $462,515,478 | $611,060,759 | |
Contrarian Fund | 233,973,848 | 315,770,040 | |
Equity Income Fund | 32,178,633 | 57,874,834 | |
Small Cap Growth Fund | 86,391,034 | 12,442,547 |
4. | Options: Certain Funds purchase and write call and put options to increase or decrease their exposure to underlying instruments (including equity risk, interest rate risk and/or commodity price risk) and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser (holder) of the option the right (but not the |
Meridian Funds | 48 | www.meridianfund.com |
Notes to Financial Statements (continued)
obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised) the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. When the Funds purchase (write) an option, an amount equal to the premium paid (received) by the Funds is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Funds enter into a closing transaction), the Funds realize a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Funds write a call option, such option is “covered,” meaning that the Funds hold the underlying instrument subject to being called by the option counterparty. When the Funds write a put option, such option is covered by cash in an amount sufficient to cover the obligation. | |
In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or the risk that the Funds may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing or selling a security when it otherwise would not, or at a price different from the current market value. | |
Transactions in options written during the six months ended December 31, 2014, were as follows: |
Meridian Equity Income Fund | Number of Contracts | Premiums Received | |
Options outstanding at June 30, 2014 | — | $ — | |
Options written | 60 | 88,919 | |
Options terminated in closing purchase transactions | (40) | (59,279) | |
Options expired | — | — | |
Options exercised | — | — | |
Options outstanding at December 31, 2014 | 20 | $ 29,640 |
5. | Affiliate Transactions and Fees |
Change in Adviser: Prior to September 5, 2013, the Funds, other than Meridian Small Cap Growth Fund, were managed by Aster Investment Management Co., Inc. (the “Previous Investment Adviser”). On May 15, 2013, the Previous Investment Adviser entered into an agreement to sell substantially all of its assets, including its rights with respect to the Investment Management Agreement and Service Agreement between and on behalf of the Funds, and transfer certain liabilities (the “Transaction”) to Arrowpoint AIM LLC, a wholly-owned subsidiary of the Arrowpoint Asset Management, LLC (the “Adviser”). The Transaction was subject to certain conditions to closing, including approval by the Board and by shareholders of the Funds; such approvals were obtained on June 11, 2013 and August 28, 2013 respectively. The Transaction closed on September 5, 2013, resulting in a new Investment Management Agreement and Service Agreement between the Funds and the Adviser (the “Management Agreement”). Please see the Board Consideration of Proposed Management Agreement (unaudited) and Shareholder Meeting Results (unaudited) sections in the June 30, 2013 Annual Report to Shareholders for additional information. |
Meridian Funds | 49 | www.meridianfund.com |
Notes to Financial Statements (continued)
Growth Fund: | Contrarian and Small Cap Growth Funds: | |||||
Average Daily Net Assets | Investment Management Fee | Average Daild Net Assets | Investment Management Fee | |||
Up to $50,000,000 | 1.00% | Greater than $0 | 1.00% | |||
Greater than $50,000,000 | 0.75% |
Equity Income Fund: | ||
Average Daily Net Assets | Investment Management Fee | |
Up to $10,000,000 | 1.00% | |
$10,000,001 to $30,000,000 | 0.90% | |
$30,000,001 to $50,000,000 | 0.80% | |
Greater than $50,000,000 | 0.70% |
Meridian Funds | 50 | www.meridianfund.com |
Notes to Financial Statements (continued)
Expense Limitation | Total Waivers and Reimbursements for the six months ended 12/31/14 | ||
Growth Fund | |||
Investor Class | 1.30% | $ - | |
Advisor Class | 1.55% | $ 1,540 | |
Institutional Class | 0.90% | $ - | |
Contratian Fund | |||
Investor Class | 1.35% | $ 3,375 | |
Advisor Class | 1.60% | $ 4,101 | |
Equity Income Fund | |||
Legacy Class | 1.25% | $ 17,831 | |
Investor Class | 1.35% | $ 4,506 | |
Advisor Class | 1.60% | $ 4,757 | |
Small Cap Growth Fund | |||
Legacy Class | 1.20% | $ 9,405 | |
Investor Class | 1.35% | $ - | |
Advisor Class | 1.60% | $ 8,911 | |
Institutional Class | 1.10% | $ - |
Expiration June 30, | |||||||
2015 | 2016 | 2017 | 2018 | ||||
Growth Fund | — | — | $ 7,178 | $ 1,540 | |||
Contrarian Fund | — | — | 16,794 | 7,476 | |||
Equity Income Fund | $52,027 | $75,932 | 54,486 | 27,094 | |||
Small Cap Growth Fund | — | — | 87,027 | 18,316 |
6. | Directors and Officers: Certain Directors and/or Officers of the Funds are also Directors and/or Officers of the Adviser. Directors and Officers of the Funds who are Directors and/or Officers of the Adviser receive no compensation from the Funds. Each Non-Interested Director is paid an annual fee set at $40,000. An additional $5,000 is paid to each Non-Interested Director for attendance at each in-person meeting of the Board and an additional $1,000 is paid to each Non-Interested Director for participating in a telephonic meeting of the Board. An additional $3,000 is paid to each member of the Audit or Governance Committee of the Board for attendance at an in-person Audit or Governance Committee meeting and an additional $1,000 is paid to each member of the Audit or Governance Committee of the Board for participating in a telephonic Audit or Governance Committee meeting. |
Meridian Funds | 51 | www.meridianfund.com |
Notes to Financial Statements (continued)
An additional $10,000 is paid to the Chairman of the Board and the Chairman of a Committee of the Board. The Chairman of the Board also receives an additional $2,500 for attending each in-person meeting of the Board. The Chairman of a Committee receives an additional $2,000 for attending each in person Committee meeting. |
7. | Distribution Information: Income and long-term capital gains distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. The tax character of distributions made during the fiscal year ended June 30, 2014 is as follows: |
2014 Taxable Distributions | |||||
Ordinary Income | Net Long-Term Capital Gain | Total Distributions | |||
Growth Fund | $41,789,505 | $556,718,750 | $598,508,255 | ||
Contrarian Fund | 2,833,352 | 3,011,519 | 5,844,871 | ||
Equity Income Fund | 501,201 | — | 501,201 | ||
Small Cap Growth Fund | — | — | — |
8. | Federal Income Taxes Information: Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (current and prior three tax years), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the six months ended December 31, 2014, the Funds did not incur any interest or penalties. |
The aggregate cost of investments, unrealized appreciation and depreciation, for federal income tax purposes, at December 31, 2014 is as follows: |
Aggregate Cost | Aggregate Gross Unrealized Appreciation | Aggregate Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||
Growth Fund | $1,642,616,000 | $323,686,933 | $(64,245,216) | $259,441,717 | |||
Contrarian Fund | 504,907,310 | 144,708,323 | (9,247,983) | 135,460,340 | |||
Equity Income Fund | 6,892,854 | 757,395 | (75,478) | 681,917 | |||
Small Cap Growth Fund | 91,165,691 | 9,299,414 | (2,298,797) | 7,000,617 |
9. | Other Matters: As of April 9, 2010, the Adviser and certain affiliated entities became defendants in a lawsuit brought by another company alleging trademark infringement, unfair competition and related claims. The complaint alleges that the Adviser’s and affiliated entities’ use of their Arrowpoint trademark and the Arrowpoint logo infringes the rights of the plaintiff in various trademarks that it uses. The complaint seeks injunctive relief requiring the Adviser and the affiliated entities to cease use of the Arrowpoint trademark and logo and unspecified monetary damages, which the plaintiff claims to be unable to quantify. The Adviser has responded to the lawsuit in the United States District Court for the District of Delaware by denying the material allegations of the compliant and opposing the plaintiff’s motion for a preliminary injunction, which is now pending before the Court. |
Meridian Funds | 52 | www.meridianfund.com |
Notes to Financial Statements (continued)
The Adviser believes the complaint to be without legal merit and intends to defend against it vigorously. Any legal costs associated with the compliant will be borne by the Adviser, and not the Meridian Funds. While an outcome regarding the complaint is unknown at this time, the Adviser believes that this complaint should not have a material effect on its operations or impair its ability to perform its duties to the Meridian Funds. |
10. | Subsequent Events: Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued, and has noted no additional events that require recognition or disclosure in the financial statements. |
Meridian Funds | 53 | www.meridianfund.com |
Meridian Funds | 54 | www.meridianfund.com |
Meridian Funds | 55 | www.meridianfund.com |
(800) 446-6662
(303) 398-2929
(877) 796-3434
Arrowpoint Asset Management LLC
100 Fillmore Street, Suite 325
Denver, CO 80206
Destra Capital Investments LLC
One North Wacker Drive, 48th Floor
Chicago, IL 60606
BNY Mellon Investment Servicing (US) Inc.
760 Moore Road
King of Prussia, PA
The Bank of New York Mellon
2 Hanson Place, 7th Floor
Brooklyn, NY 11217
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, CO 80202
PricewaterhouseCoopers LLP
Three Embarcadero Center
San Francisco, CA 94111
James B. Glavin, Chairman
John Emrich
Michael S. Erickson
Edward Keely*
Michael Stolper
David Corkins, President
Derek Mullins, Treasurer
Richard Grove, Vice President, Secretary & Chief Compliance Officer
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Not applicable. | |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. | |
(a)(3) | Not applicable. | |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Meridian Fund, Inc.® |
By (Signature and Title)* | /s/ David J. Corkins | |||||
David J. Corkins | ||||||
Principal Executive Officer and President |
Date | February 26, 2015 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ David J. Corkins | |||||
David J. Corkins | ||||||
Principal Executive Officer and President |
Date | February 26, 2015 |
|
By (Signature and Title)* | /s/ Derek J. Mullins | |||||
Derek J. Mullins | ||||||
Principal Financial Officer and Treasurer |
Date | February 26, 2015 |
|
* | Print the name and title of each signing officer under his or her signature. |