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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 Street, Suite 325 Denver, CO 80206 | ||||
(Address of principal executive offices) (Zip code) | ||||
David J. Corkins 100 Fillmore Street, 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: June 30, 2014
Table of Contents
Item 1. | Reports to Stockholders. |
The Report to Shareholders is attached herewith.
Table of Contents
Annual Report June 30, 2014 |
Meridian Fund, Inc.
Meridian Growth Fund
Meridian Contrarian Fund
Meridian Equity Income Fund
Meridian Small Cap Growth Fund
Table of Contents
Annual Report, 6/30/2014
Dear Shareholder,
During the year ending June 30, 2014, the S&P 500 and the Russell 2500 (small and medium sized companies) returned over 24.6% and 25.5%, respectively. Continued accommodative Fed policy, along with improvements in housing, employment and manufacturing were all supportive macro-economic factors that drove an overall increase in earnings and valuation for the indices.
The current low interest rate environment and the longer-term trends of globalization and technology-enhanced productivity form a powerful recipe for cash flow generation and capital markets activity. In addition to helping drive strong US equity market returns over the past few years, these market forces are contributing to positive capital flows into equities, increased corporate debt and equity issuance—and a healthy pick-up in merger and acquisition activity (M&A). M&A has traditionally been a barometer of overall CEO confidence, and, according to Bloomberg, the dollar value of global M&A during the first half of 2014 increased 89% over the same period a year ago, suggesting investors are not alone in their sanguine view of the future.
While optimism abounds for the market as a whole, it is worth a reminder that the stock market is not the economy. Underlying economic data may not be as robust as stock prices would suggest. First half 2014 US GDP growth is set to come in around 1% (2% annualized) and significant slack remains in the labor market. Reforms and deleveraging in Europe create the specter of deflation in the region and widespread geopolitical tensions remain at the top of the list of overall global risks.
At Arrowpoint and the Meridian Funds, we are not economic prognosticators, nor traders; our value-add is fundamental research first and foremost. We seek to combine attractive asymmetric risk/reward investments within a risk-managed equity portfolio. The intended outcome is to preserve capital in volatile market environments without sacrificing upside participation in up markets.
As our first year as Investment Adviser to the Meridian Fund family comes to a close, we are excited about enhancements that have been made to the client service side of the business. This includes the establishment of quarterly commentaries and a new website with substantially improved data and functionality. Please visit us at www.meridianfund.com or Arrowpoint Partners at www.ap-am.com for more information on our strategies.
On behalf of all the Meridian and Arrowpoint team members, thank you for your continued trust, confidence and investment in the Meridian Fund family.
Respectfully,
David Corkins
President
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Meridian Funds | 2 | www.meridianfund.com |
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Meridian Growth Fund
Portfolio Performance and Composition (Unaudited)
Discussion of Fund Performance |
On September 5, 2013, we began managing the Meridian Growth Fund. It is our distinct honor to take the helm of this venerable fund, which was founded by Richard Aster nearly 30 years ago. Through rigorous fundamental research, disciplined portfolio construction, and a focus on managing risk before reward, we hope to expand upon Meridian Growth Fund’s legacy. We will use the same process and philosophy that served us well managing another mutual fund for 7 years. Namely, our investment philosophy is centered on four key tenets:
1. | Employ fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital, and attractive risk-reward profiles. |
2. | Build a durable portfolio that first and foremost protects capital in tough, turbulent markets and secondarily keeps up with the broader market in bull market environments. |
3. | Always think about risk before reward. Almost 30 years of combined experience in small- and mid-cap markets have taught us the importance of sidestepping the landmines and pitfalls that trip up many other investors. |
4. | Protect and grow your hard-earned savings. To this end, we believe strongly that it’s important that we eat our own cooking; we plan to allocate a significant percentage of our own net worth to Meridian Growth Fund. |
In our opinion, this disciplined process combined with decades of experience, extensive resources, and a long-term investment horizon are the key ingredients required for consistent outperformance versus our peers and our benchmark. We look forward to many rewarding years stewarding your capital.
Performance Overview
The Meridian Growth Fund – Legacy Shares returned 17.31% during the twelve-month period ending June 30, 2014, underperforming its primary benchmark, the Russell 2500 Growth Index, which rose 26.26%. There were several factors that impacted performance during the period.
The first was the portfolio manager transition that occurred on September 6, 2013. Prior to our portfolio management responsibilities, the portfolio underperformed the index by 4.12%. As part of the transition, we repositioned some of the portfolio’s holdings to be consistent with our philosophy and process.
The relative underperformance during the second half of the fiscal year ending June 30, 2014 was driven by the low-quality characteristics, such as low returns on capital, low profit margins and often negative earnings per share, of the stocks that performed best early in 2014. This underperformance was partially offset by the strong relative performance (seen in the low downside capture rates) during the market sell-off from March to April 2014.
The Meridian Growth Fund seeks to invest in high-quality (defined by overall profitability) and attractively valued stocks, which means the fund may underperform in periods such as the first quarter of this year.
The second period of meaningful relative performance differential was the sell-off from the index’s peak in the first week of March through the low in early April. During that time the fund captured just 70% of the market’s decline, with the Russell 2500 Growth falling 9.17% and the fund falling 6.46%. This experience is consistent with our goal of capturing less downside than the market in turbulent, volatile environments. By putting risk and downside protection at the forefront of our process, we believe we will be better positioned to deliver strong long-term absolute and relative returns.
The top contributors to performance during the period were Trimble Navigation, Sensata Technologies, and Cadence Design Systems.
• | Trimble Navigation provides location-based solutions to its customers that enhance their productivity and profitability. The recovery in construction end markets and continued strong demand from the farm economy resulted in strong overall financial results for the company and a strong stock price. We trimmed the position as it began to exceed the upper end of the market cap range that we invest in. |
• | Sensata Technologies develops, manufactures and sells sensors and controls. We are attracted to the company’s large growth opportunity, which is driven by increased sensor penetration in industries such as automobiles and general industrial opportunities. We find Sensata’s business model to be attractive given the stability of its revenues, strong operating leverage and excellent management team. During the period, the company benefited from a rebound in European automobile sales and deployed capital in several small accretive acquisitions. We have been trimming the position modestly as the stock approaches our price target. |
Meridian Funds | 3 | www.meridianfund.com |
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Meridian Growth Fund
Portfolio Performance and Composition (Unaudited) (continued)
• | Cadence Design Systems provides software technology, design and consulting services and technology. Its primary product is electronic design automation software for the semiconductor industry. The stock rose as the company and industry transition began to show in its operating results. Specifically, industry consolidation has resulted in an improvement in pricing power, Cadence has successfully transitioned to a recurring revenue model, and we expect it to begin deploying its capital via stock repurchases. We trimmed the position modestly during the quarter. |
The top three detractors to performance during the period were VistaPrint, Sally Beauty Holdings and CHC Group.
• | VistaPrint declined during the period due to a business model transition that has weighed negatively on short-term financial performance. We continue to believe that after the transition the company will have lower customer churn, higher customer duration, higher average selling prices and higher reorder rates. All of these combined should drive high operating leverage and substantial earnings growth. We have been adding to the position on weakness. |
• | Sally Beauty Holdings distributes and retails beauty products. During the period the stock declined due to the impact of weather and some overall weakness in consumer spending. We have been adding to the position as we believe the company is well positioned to grow domestically, expand internationally and continue buying back stock, which should drive strong earnings growth for the long term. |
• | CHC Group is a service provider to the offshore oil and gas industry. The stock declined during the period as the company’s growth trajectory did not exceed investor expectations. We added to the position during the period as we remain confident it will achieve our long-term growth and cash flow targets. The overall industry continues to show strong growth, and the company’s own business is improving as it restructures contracts at higher prices with longer terms. |
We remain committed to employing fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital and attractive risk-reward profiles. We seek to build a durable, all-weather portfolio that protects capital in tough, turbulent markets and keeps up with the broader market in bull market environments.
Thank you for your investment in Meridian Growth Fund and for your confidence in us.
Chad Meade and Brian Schaub
Total Return Based on a $10,000 investment for the Period Ended June 30, 2014 |
This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.
* | Effective November 1, 2013, the Russell 2500® Growth Index has replaced the S&P 500® Index as a more appropriate benchmark for the Fund. The Russell 2000® Index continues to be a benchmark for the Fund. |
Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.
Meridian Funds | 4 | www.meridianfund.com |
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Meridian Growth Fund
Portfolio Performance and Composition (Unaudited) (continued)
Average Annual Total Return as of 6.30.14 |
Share Class | Inception | 1 Year | 5 Year | 10 Year | Since Inception | |||||||||||||
Legacy Class (MERDX) | 8/1/84 | 17.31 | 18.98 | 9.23 | 12.79 | |||||||||||||
Investor Class (MRIGX) | 11/15/13 | — | — | — | 5.92 | |||||||||||||
Advisor Class (MRAGX) | 11/15/13 | — | — | — | 5.75 | |||||||||||||
Russell 2000® Index | 8/1/84 | 23.64 | 20.21 | 8.70 | 10.51 | |||||||||||||
Russell 2500® Growth Index | 8/1/84 | 26.26 | 21.65 | 9.94 | N/A |
See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.
The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.
Meridian Funds | 5 | www.meridianfund.com |
Table of Contents
Meridian Growth Fund
Portfolio Composition (Unaudited)
Top 10 Common Stock Holdings as of 6.30.14 | ||
Sensata Technologies Holding N.V. (Netherlands) | 2.84% | |
Gartner, Inc. | 2.67% | |
Cadence Design Systems, Inc. | 2.56% | |
SS&C Technologies Holdings, Inc. | 2.36% | |
Jones Lang Lasalle, Inc. | 2.35% | |
Clean Harbors, Inc. | 2.33% | |
HEICO Corp. Class A | 2.32% | |
Wolverine World Wide, Inc. | 2.31% | |
Cooper Cos., Inc. (The) | 2.28% | |
VistaPrint, N.V. (Netherlands) | 2.19% |
Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.
Sector Allocation as of 6.30.14 |
Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.
For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.
Meridian Funds | 6 | www.meridianfund.com |
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Meridian Contrarian Fund
Portfolio Performance and Composition (Unaudited)
Discussion of Fund Performance |
The Meridian Contrarian Fund-Legacy Shares returned 23.31% during the twelve-month period ending June 30, 2014, which compares to the primary benchmark, the Russell 2500 Index, which returned 25.58%. The strategy’s secondary benchmark, the S&P 500 Index, returned 24.61%.
The Meridian Contrarian Fund’s investment strategy remains unchanged. We continue to seek out-of-favor companies that we believe, despite suffering temporary problems, have good long-term prospects for earnings growth supported by defensible positions in their industries, attractive return on capital and strong or improving balance sheets. Over the long term we believe this contrarian investing process can outperform the market.
Holdings in the financial sector were the largest contributor to the fund’s underperformance. The fund was underweight in the financial sector by 12.9%, which negatively impacted the portfolio. The information technology sector was our largest contributor to performance. The fund benefited from an 8.5% overweight as well as individual stock selection that outperformed the sector in the benchmark by an average of 2.8%. Industrials were another positive contributor, with both an overweight relative to the benchmark and strong individual stock performance. As it relates to stock selection, the portfolio was underweight in REITs, which were strong performers for the index overall, driven by the decline in interest rates in the first half of 2014. Utilities benefited from the same decline in interest rates and our under allocation was another detractor to the portfolio.
Our top three contributors to performance were Broadridge, EOG Resources, and Ubiquiti Networks.
• | Broadridge is a leading provider of investor communication and securities processing services. This has been a long-term investment for the Contrarian Fund. There has been limited change in the company’s stock price for a number of years due to softness in event-driven investor communications and continued investments in future growth that lowered current profitability. In 2013 these headwinds waned, leading to renewed earnings growth, multiple expansion, and strong stock performance. |
• | Long-term holding EOG Resources is a large, diversified oil and gas exploration and production company. The stock fell out of favor when the company made poorly timed investments to expand natural gas production just prior to a precipitous drop in natural gas prices. We saw this as an opportunity because the company possessed both the management acumen and attractive resource base to efficiently pivot production away from natural gas to oil. EOG continues to execute this strategy with better than expected oil production and higher oil prices driving strong stock performance during the fiscal year. We maintain our position in the stock. |
• | Ubiquiti Networks designs and manufactures wireless broadband infrastructure equipment and other communications. Ubiquiti initially came to our attention in early 2013 after suffering declines in earnings. While being optimistic about overall market demand, our research led us to conclude that the problems facing the company were temporary and we invested in the stock. Management executed on the turnaround, which drove both revenue and earnings growth. As a result the stock has more than doubled from our initial purchase price. |
The top three detractors from performance were Aeropostale, Haemonetics and Compass Minerals.
• | Aeropostale operates a chain of apparel stores aimed at young teenagers. The company had successfully operated a fast fashion model for many years that drove strong growth and returns on capital. The company suffered declining earnings in 2012 as its customers shifted their fashion preferences and struggling competitors cut prices. We believed that Aeropostale would benefit as improving inventory positions at competitors eased price competition and as the addition of a new head of design improved the company’s fashion offerings. This did not materialize, however, and the company has continued to struggle. We sold the position at a loss in August 2013. |
• | Haemonetics is the leader in blood separation and blood management products for collection centers and hospitals. The company hit our screen after two minor product recalls negatively impacted earnings. We believed the impact would prove short-lived, and that earnings growth would reaccelerate with the introduction of a new blood collection system. However, the company ended up losing a large contract, which was not in harmony with our thesis, and we sold the stock. |
Meridian Funds | 7 | www.meridianfund.com |
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Meridian Contrarian Fund
Portfolio Performance and Composition (Unaudited) (continued)
• | Compass Minerals is a leading producer of rock salt and specialty potash fertilizer. Its unique collection of resource assets has helped the company generate historically high returns on capital. We invested in Compass as we believed that earnings were due to turn after four years of weak road salt demand driven by mild Northeast winters and production problems at its potash mines. During 2013 the potash industry was rocked by the potential collapse of a European cartel, which led to falling potash prices. Facing significant uncertainty for the future of the potash market, we sold the stock. |
We continue to remain focused on individual stock selection and portfolio construction that identifies quality companies that we believe are experiencing temporary disruptions to their businesses. These disruptions enable us to buy the businesses at attractive prices and provide the portfolio with what we believe is an attractive risk-reward profile for our shareholders.
Thank you for your continued investment in the Meridian Contrarian Fund.
Jamie England, Larry Cordisco and Jim O’Connor
Total Return Based on a $10,000 investment for the Period Ended June 30, 2014 |
This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.
Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.
Average Annual Total Return as of 6.30.14 |
Share Class | Inception | 1 Year | 5 Year | 10 Year | Since Inception | |||||||||||||
Legacy Class (MVALX) | 2/10/94 | 23.31 | 17.94 | 8.30 | 13.54 | |||||||||||||
Investor Class (MFCIX) | 11/15/13 | — | — | — | 7.08 | |||||||||||||
Advisor Class (MFCAX) | 11/15/13 | — | — | — | 6.91 | |||||||||||||
Russell 2500® Index | 2/10/94 | 25.58 | 21.63 | 9.78 | 10.75 | |||||||||||||
S&P 500® Index | 2/10/94 | 24.61 | 18.83 | 7.78 | 9.21 |
See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.
The statements and opinions expressed are those of the author and are as of the date of this report. All information is
historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.
Meridian Funds | 8 | www.meridianfund.com |
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Meridian Contrarian Fund
Portfolio Composition (Unaudited)
Top 10 Common Stock Holdings as of 6.30.14 | ||
Verint Systems, Inc. | 2.87% | |
Apple, Inc. | 2.64% | |
Hawaiian Electric Industries, Inc. | 2.61% | |
Gildan Activewear, Inc. (Canada) | 2.45% | |
Norfolk Southern Corp. | 2.40% | |
Lazard Ltd. | 2.37% | |
Alexander & Baldwin, Inc. | 2.35% | |
Yum! Brands, Inc. | 2.34% | |
Genesee & Wyoming, Inc. Class A | 2.29% | |
Humana, Inc. | 2.18% |
Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.
Sector Allocation as of 6.30.14 |
Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.
For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.
Meridian Funds | 9 | www.meridianfund.com |
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Meridian Equity Income Fund
Portfolio Performance and Composition (Unaudited)
Discussion of Fund Performance |
The Meridian Equity Income Fund – Legacy Shares returned 20.04% during the twelve-month period ending June 30, 2014, which compares to the benchmark, the S&P 500 Index, which returned 24.61%.
The largest contributor to the fund’s underperformance was the financial sector. The fund was underweight in the sector, including an underweight in REITs, which were strong performers for the index overall, driven by the decline in interest rates in the first half of 2014. Utilities benefited from the same decline in interest rates and our under allocation was another detractor to the portfolio. The information technology sector was our largest contributor to performance. The fund benefited from an 8.50% overweight as well as individual stock selection that outperformed the sector in the benchmark by an average of 2.80%. Industrials were another positive contributor with both an overweight relative to the benchmark and strong individual stock performance.
The top three contributors to performance for the fiscal year were Lockheed Martin, Broadridge and Apple.
• | Lockheed Martin, a leading defense company, was a strong performer for the fund in 2013. The company fared well as earnings grew better than expected despite budget-related pressures on the defense industry. Lockheed is expected to have continued earnings growth, and its low payout ratio indicates a strong possibility of future dividend increases. |
• | Broadridge is a leading provider of investor communication and securities processing services. Over half of the company’s revenues are recurring in nature with a renewal rate of over 95%. Broadridge has a strong balance sheet with net debt at less than 25% of total capital and a low payout ratio of 37%, as of June 30, 2014. The stock performed well during the fiscal year as previous investments in systems and customer acquisition led to accelerated earnings growth. The current yield of 2% is at the low end of our portfolio, but we continue to own the stock as we believe the company will continue to grow its dividend, which has tripled over the past five years. |
• | Apple leads the consumer electronics industry with its family of iPhone, iPad and Mac products. The company benefits from the enduring value of the Apple ecosystem and appears likely to continue developing innovative products. With a sound earnings growth outlook, a comparatively low dividend payout ratio and sizable cash on its balance sheet, Apple is poised for further dividend increases after demonstrating an 11% compound annual dividend growth rate over the last two years. Apple’s outperformance in the second quarter of 2014 came from improved profit margins, China iPhone growth and a larger commitment to returning cash to shareholders. We maintain our position in the stock. |
The top three detractors to fiscal year performance were Flower Foods, Campus Crest Communities and Meredith Corp.
• | Flower Foods, Inc., is a leading bakery company. Since the 2012 bankruptcy of competitor Hostess, Flower has benefited from market share gains and by acquiring Hostess assets at attractive prices. During the first quarter of 2014, however, Flower posted disappointing results as it encountered operational challenges in handling the additional volume from share gains and experienced difficulty integrating the acquired assets. Prior to these issues the yield had declined due to the company’s success, and given the current problems we decided the lower yield and high valuation did not compensate us for the diminished visibility into earnings and dividend growth. Accordingly, we sold the stock. |
• | Campus Crest Communities is a REIT specializing in student housing in second-tier university markets. Our investment suffered as we underestimated the supply growth outlook for this sector and the resulting pressure on results and investor sentiment. We sold the stock at a loss in 2013. |
• | Meredith Corp. is a media and marketing company with key assets in women’s magazines and local television stations. The stock underperformed in early 2014 due to weak quarterly results and guidance that was below expectations. The most recent results served as confirmation to concerns we had related to potential secular declines in the company’s businesses. With less conviction in Meredith’s ability to grow both earnings and dividends over the long term, we sold the stock. |
We continue to remain focused on individual stock selection and portfolio construction that will preserve capital and generate above-market yield and dividend growth.
Thank you for your continued investment in the Meridian Equity Income Fund.
Jamie England, Larry Cordisco and Jim O’Connor
Meridian Funds | 10 | www.meridianfund.com |
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Meridian Equity Income Fund
Portfolio Performance and Composition (Unaudited) (continued)
Total Return Based on a $10,000 investment for the Period Ended June 30, 2014 |
This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.
* | Inception date. |
Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.
Average Annual Total Return as of 6.30.14 |
Share Class | Inception | 1 Year | 5 Year | Since Inception | ||||||||||
Legacy Class (MEIFX) | 1/31/05 | 20.04 | 18.69 | 7.50 | ||||||||||
Investor Class (MRIEX) | 11/15/13 | — | — | 6.87 | ||||||||||
Advisor Class (MRAEX) | 11/15/13 | — | — | 6.69 | ||||||||||
S&P 500® Index | 1/31/05 | 24.61 | 18.83 | 7.77 |
See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.
The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.
Meridian Funds | 11 | www.meridianfund.com |
Table of Contents
Meridian Equity Income Fund
Portfolio Composition (Unaudited)
Top 10 Common Stock Holdings as of 6.30.14 | ||
Eaton Corp., Plc (Ireland) | 2.51% | |
Occidental Petroleum Corp. | 2.48% | |
Microchip Technology, Inc. | 2.39% | |
Kimberly-Clark Corp. | 2.37% | |
Leggett & Platt, Inc. | 2.37% | |
Apple, Inc. | 2.36% | |
Enbridge Energy Partners LP | 2.34% | |
Broadridge Financial Solutions, Inc. | 2.25% | |
Linear Technology Corp. | 2.25% | |
Hasbro, Inc. | 2.23% |
Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.
Sector Allocation as of 6.30.14 |
Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.
For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.
Meridian Funds | 12 | www.meridianfund.com |
Table of Contents
Meridian Small Cap Growth Fund
Portfolio Performance and Composition (Unaudited)
Discussion of Fund Performance |
We launched the Meridian Small Cap Growth Fund on December 16, 2013. We are excited to offer you an opportunity to invest in a fund that focuses on high-quality, small cap growth businesses with predictable and recurring revenues, high returns on capital and attractive risk-reward profiles.
The Meridian Small Cap Growth Fund – Legacy Shares have returned 16.50% since the fund’s inception, outperforming its primary benchmark, the Russell 2000 Growth Index, which rose 6.64%.
The top contributors to performance during the period were Revance Therapeutics, Inc., TriNet Group and Malibu Boats.
• | Revance Therapeutics, Inc., was a strong performer during the first half due to encouraging data surrounding its long-lasting botulinum toxin products in aesthetic and therapeutic dermatology. We continue to hold the stock as we believe the company’s products to be differentiated with the ability to take the majority of a large market over the long term. |
• | TriNet Group is a professional employment organization providing human resource and consulting services. Recent changes to healthcare regulations are driving a strong demand environment for its services. We also like its focus on high-value, niche segments of the industry. We continue to hold the stock. |
• | Malibu Boats designs, manufactures and markets sports boats. Malibu has several characteristics of highly successful past investments in similarly cyclical businesses such as Polaris Industries, which has been a successful, longtime holding of ours. We are attracted to Malibu’s low share of the market, but dominant position in the fastest-growing segment. We like its asset-light business model that generates strong margins, returns on capital and cash flow. Lastly, we think the industry is at its cyclical bottom with the overall market still fifty percent below its prior peak. We continue to hold the stock. |
The top three detractors to performance during the period were VistaPrint, Wolverine World Wide and National Research Corporation.
• | VistaPrint declined during the quarter as the first calendar quarter represented what we believe will be one of the worst quarters for the company as it transitions away from low-duration to high-value, high-duration customers. We continue to believe that after the transition the company will have lower customer churn, higher customer duration, higher average selling prices and higher reorder rates. All of these combined should drive high operating leverage and substantial earnings growth. We have been adding to the position on weakness. |
• | Wolverine World Wide manufactures and markets branded footwear in the U.S. and internationally. The stock declined during the quarter as investors continued to wait for a turnaround in one of its key brands, Sperry. We continue to be attracted to the company’s strong portfolio of brands, near-term turnaround opportunity at Sperry, long-term international growth potential and strong management team. We trimmed our position size during the quarter; however, we still maintain a large position in the stock. |
• | National Research Corporation provides performance measurement, analysis and tracking services to the healthcare industry. The stock declined during the period as overall growth in the business came in below expectations. We believe this is a temporary issue and continue to be attracted to its high level of recurring revenue and new growth opportunities. We added to the position. |
We remain committed to employing fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital and attractive risk-reward profiles.
Thank you for your confidence in the Meridian Small Cap Growth Fund.
Chad Meade and Brian Schaub
Meridian Funds | 13 | www.meridianfund.com |
Table of Contents
Meridian Small Cap Growth Fund
Portfolio Performance and Composition (Unaudited) (continued)
Total Return Based on a $10,000 investment for the Period Ended June 30, 2014 |
This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund of the period indicated. For comparison, the same investment is shown in the indicated index.
* | Inception date. |
Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.
Average Annual Total Return as of 6.30.14 |
Share Class | Inception | 6 Months | Since Inception | |||||
Legacy Class (MSGGX) | 12/16/13 | 11.48 | 16.50 | |||||
Investor Class (MISGX) | 12/16/13 | 11.48 | 16.50 | |||||
Advisor Class (MSGAX) | 12/16/13 | 11.29 | 16.30 | |||||
Russell 2000® Growth Index | 12/16/13 | 2.22 | 6.64 |
See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.
The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.
Meridian Funds | 14 | www.meridianfund.com |
Table of Contents
Meridian Small Cap Growth Fund
Portfolio Composition (Unaudited)
Top 10 Common Stock Holdings as of 6.30.14 | ||
Cadence Design Systems, Inc. | 2.21% | |
HEICO Corp. Class A | 2.14% | |
Wolverine World Wide, Inc. | 2.14% | |
Carter’s, Inc. | 2.13% | |
Heritage-Crystal Clean, Inc. | 2.03% | |
Clean Harbors, Inc. | 2.02% | |
Corporate Executive Board Co. (The) | 1.93% | |
Measurement Specialties, Inc. | 1.92% | |
National CineMedia, Inc. | 1.87% | |
VistaPrint, N.V. (Netherlands) | 1.84% |
Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.
Sector Allocation as of 6.30.14 |
Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.
For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.
Meridian Funds | 15 | www.meridianfund.com |
Table of Contents
Meridian Growth Fund
June 30, 2014 (Unaudited)
Expense Example |
Actual | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MERDX) | 0.85 | % | $ | 1,000.00 | $ | 1,016.70 | $ | 4.25 | ||||||||
Investor Class (MRIGX) | 1.30 | % | $ | 1,000.00 | $ | 1,014.80 | $ | 6.49 | ||||||||
Advisor Class (MRAGX) | 1.55 | % | $ | 1,000.00 | $ | 1,013.40 | $ | 7.74 | ||||||||
Hypothetical2 | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MERDX) | 0.85 | % | $ | 1,000.00 | $ | 1,020.58 | $ | 4.26 | ||||||||
Investor Class (MRIGX) | 1.30 | % | $ | 1,000.00 | $ | 1,018.35 | $ | 6.51 | ||||||||
Advisor Class (MRAGX) | 1.55 | % | $ | 1,000.00 | $ | 1,017.11 | $ | 7.75 |
1 | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365. |
2 | Hypothetical 5% return before expenses. |
The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.
See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.
Meridian Contrarian Fund
Fund Expenses
June 30, 2014 (Unaudited)
Expense Example |
Actual | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MVALX) | 1.13 | % | $ | 1,000.00 | $ | 1,035.70 | $ | 5.70 | ||||||||
Investor Class (MFCIX) | 1.35 | % | $ | 1,000.00 | $ | 1,034.60 | $ | 6.81 | ||||||||
Advisor Class (MFCAX) | 1.60 | % | $ | 1,000.00 | $ | 1,033.00 | $ | 8.07 | ||||||||
Hypothetical2 | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MVALX) | 1.13 | % | $ | 1,000.00 | $ | 1,019.19 | $ | 5.66 | ||||||||
Investor Class (MFCIX) | 1.35 | % | $ | 1,000.00 | $ | 1,018.10 | $ | 6.76 | ||||||||
Advisor Class (MFCAX) | 1.60 | % | $ | 1,000.00 | $ | 1,016.86 | $ | 8.00 |
1 | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365. |
2 | Hypothetical 5% return before expenses. |
The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.
See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.
Meridian Funds | 16 | www.meridianfund.com |
Table of Contents
Meridian Equity Income Fund
Fund Expenses
June 30, 2014 (Unaudited)
Expense Example |
Actual | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MEIFX) | 1.25 | % | $ | 1,000.00 | $ | 1,045.90 | $ | 6.34 | ||||||||
Investor Class (MRIEX) | 1.35 | % | $ | 1,000.00 | $ | 1,045.80 | $ | 6.85 | ||||||||
Advisor Class (MRAEX) | 1.60 | % | $ | 1,000.00 | $ | 1,044.40 | $ | 8.11 | ||||||||
Hypothetical2 | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MEIFX) | 1.25 | % | $ | 1,000.00 | $ | 1,018.60 | $ | 6.26 | ||||||||
Investor Class (MRIEX) | 1.35 | % | $ | 1,000.00 | $ | 1,018.10 | $ | 6.76 | ||||||||
Advisor Class (MRAEX) | 1.60 | % | $ | 1,000.00 | $ | 1,016.86 | $ | 8.00 |
1 | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365. |
2 | Hypothetical 5% return before expenses. |
The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.
See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.
Meridian Small Cap Growth Fund
Fund Expenses
June 30, 2014 (Unaudited)
Expense Example |
Actual | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MSGGX) | 1.20 | % | $ | 1,000.00 | $ | 1,114.80 | $ | 6.29 | ||||||||
Investor Class (MISGX) | 1.35 | % | $ | 1,000.00 | $ | 1,114.80 | $ | 7.08 | ||||||||
Advisor Class (MSGAX) | 1.60 | % | $ | 1,000.00 | $ | 1,112.90 | $ | 8.38 | ||||||||
Hypothetical2 | Annualized Expense Ratio | Beginning Account Value January 1, 2014 | Ending Account Value June 30, 2014 | Expenses Paid During the Period1 | ||||||||||||
Legacy Class (MSGGX) | 1.20 | % | $ | 1,000.00 | $ | 1,018.84 | $ | 6.01 | ||||||||
Investor Class (MISGX) | 1.35 | % | $ | 1,000.00 | $ | 1,018.10 | $ | 6.76 | ||||||||
Advisor Class (MSGAX) | 1.60 | % | $ | 1,000.00 | $ | 1,016.86 | $ | 8.00 |
1 | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365. |
2 | Hypothetical 5% return before expenses. |
The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.
See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.
Meridian Funds | 17 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Performance and Expense Disclosures
June 30, 2014
Disclosures Regarding Fund Performance |
Past performance is not predictive of future performance. Current performance may be lower or higher than the quoted past performance. Reported performance assumes reinvestment of Fund distributions. Reported performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, nor does it reflect the 2% redemption fee on shares sold within 60 days of original purchase date. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. You can obtain the most current month-end performance at www.meridianfund.com.
Performance for Funds in existence prior to 9.5.13 reflects performance under the management of Aster Investment Management Co. using similar investment strategies.
Legacy class shares are no longer offered to the public effective 3.1.14, except under certain limited circumstances.
Indices are typically unmanaged, and do not reflect deductions for fees or expenses. You cannot invest directly in an index.
Disclosures Regarding Fund Expenses |
As a shareholder of the Fund, you incur certain costs which include: 1) transaction related costs, such as redemption fees for sales made within 60 days of original purchase; and 2) operating costs, such as investment advisory fees, administrative fees, service and distribution (12b-1) fees, and other Fund expenses.
Operating costs, which are deducted from a Fund’s gross income, directly reduce the investment return of the portfolio. The Fund Expense examples reported on the previous pages are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds.
The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period and assume reinvestment of all dividends and distributions.
The first section of the example describes actual expenses and account values for the 6 month period reported. To use this information to calculate the expenses you paid for your investment in the Fund, divide your account value by $1,000 then multiply the result by the number reported under “Expenses Paid During the Period”.
The second section of the example describes hypothetical expenses and account values using the Fund’s actual expense ratio and an assumed 5% return. These hypothetical expenses and returns should be used to compare the Fund’s expenses to other mutual funds’ reported hypothetical expenses and not to calculate your actual expenses paid during the period.
The expense examples do not reflect any transactional costs, such as the 2% redemption fee charged on sales made within 60 days of original purchase. Therefore, the information reported within these expense examples are meant to highlight on-going costs of owning Fund shares and will not reflect the total relative costs of owning different mutual funds. If these transactional costs were included, the reported expenses would have been higher.
Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus contains this and other information relevant to an investment in any of the Meridian Funds. To obtain a prospectus, please contact your investment representative or Destra Capital Investments LLC at 877.796.3434 or access our website at www.meridianfund.com.
Meridian Funds | 18 | www.meridianfund.com |
Table of Contents
Meridian Growth Fund
June 30, 2014
Shares | Value | |||||||
Common Stocks - 92.5% | ||||||||
Consumer Discretionary - 18.9% |
| |||||||
Distributors - 0.5% |
| |||||||
LKQ Corp.* | 368,262 | $ | 9,828,913 | |||||
Diversified Consumer Services - 0.5% |
| |||||||
ServiceMaster Global Holdings, Inc.* | 573,758 | 10,459,608 | ||||||
Hotels, Restaurants & Leisure - 1.2% |
| |||||||
Dunkin’ Brands Group, Inc. | 413,757 | 18,954,208 | ||||||
Popeyes Louisiana Kitchen, Inc.* | 134,466 | 5,877,509 | ||||||
|
| |||||||
24,831,717 | ||||||||
Leisure Equipment & Products - 0.5% |
| |||||||
Polaris Industries, Inc. | 79,016 | 10,291,044 | ||||||
Media - 2.1% |
| |||||||
Markit Ltd. | 160,240 | 4,323,275 | ||||||
National CineMedia, Inc. | 2,233,692 | 39,111,947 | ||||||
|
| |||||||
43,435,222 | ||||||||
Specialty Retail - 8.3% |
| |||||||
DSW, Inc. Class A | 848,664 | 23,711,672 | ||||||
Five Below, Inc.* | 529,847 | 21,146,194 | ||||||
Hibbett Sports, Inc.* | 383,928 | 20,797,380 | ||||||
Michaels Cos, Inc.* | 240,102 | 4,093,739 | ||||||
Monro Muffler Brake, Inc. | 365,632 | 19,447,966 | ||||||
PetSmart, Inc. | 424,877 | 25,407,645 | ||||||
Sally Beauty Holdings, Inc.* | 1,609,788 | 40,373,483 | ||||||
Ulta Salon Cosmetics & Fragrance, Inc.* | 177,720 | 16,245,385 | ||||||
|
| |||||||
171,223,464 | ||||||||
Textiles, Apparel & Luxury Goods - 5.8% |
| |||||||
Carter’s, Inc. | 591,285 | 40,757,275 | ||||||
Tumi Holdings, Inc.* | 1,654,726 | 33,309,634 | ||||||
Wolverine World Wide, Inc. | 1,680,242 | 43,787,107 | ||||||
|
| |||||||
117,854,016 | ||||||||
|
| |||||||
Total Consumer Discretionary | 387,923,984 | |||||||
Consumer Staples - 1.3% |
| |||||||
Food & Staples Retailing - 1.3% |
| |||||||
Susser Holdings Corp.* | 341,478 | 27,564,104 | ||||||
|
| |||||||
Total Consumer Staples | 27,564,104 | |||||||
Energy - 5.5% |
| |||||||
Energy Equipment & Services - 5.0% |
| |||||||
CHC Group Ltd.* | 3,087,555 | 26,058,964 | ||||||
Core Laboratories N.V. (Netherlands) | 47,324 | 7,905,947 | ||||||
Dresser-Rand Group, Inc.* | 486,307 | 30,992,345 | ||||||
Dril-Quip, Inc.* | 90,124 | 9,845,146 | ||||||
Rignet, Inc.* | 501,211 | 26,975,176 | ||||||
|
| |||||||
101,777,578 |
Shares | Value | |||||||
Oil, Gas & Consumable Fuels - 0.5% |
| |||||||
World Fuel Services Corp. | 200,913 | $ | 9,890,947 | |||||
|
| |||||||
Total Energy | 111,668,525 | |||||||
Financials - 7.1% |
| |||||||
Capital Markets - 3.0% |
| |||||||
Financial Engines, Inc. | 215,856 | 9,773,960 | ||||||
LPL Financial Holdings, Inc. | 811,762 | 40,377,042 | ||||||
WisdomTree Investments, Inc.* | 896,475 | 11,080,431 | ||||||
|
| |||||||
61,231,433 | ||||||||
Commercial Banks - 1.9% |
| |||||||
Bank of the Ozarks, Inc. | 498,960 | 16,690,212 | ||||||
East West Bancorp., Inc. | 629,061 | 22,010,844 | ||||||
|
| |||||||
38,701,056 | ||||||||
Real Estate Management & Development - 2.2% |
| |||||||
Jones Lang Lasalle, Inc. | 351,227 | 44,391,580 | ||||||
|
| |||||||
Total Financials | 144,324,069 | |||||||
Health Care - 13.8% |
| |||||||
Biotechnology - 4.3% |
| |||||||
Alnylam Pharmaceuticals, Inc.* | 176,364 | 11,140,914 | ||||||
Clovis Oncology, Inc.* | 242,086 | 10,024,781 | ||||||
Exact Sciences Corp.* | 918,218 | 15,637,253 | ||||||
Medivation, Inc.* | 145,842 | 11,241,501 | ||||||
Neurocrine Biosciences, Inc.* | 742,192 | 11,014,129 | ||||||
NPS Pharmaceuticals, Inc.* | 400,613 | 13,240,260 | ||||||
Synageva BioPharma Corp.* | 146,831 | 15,387,889 | ||||||
|
| |||||||
87,686,727 | ||||||||
Health Care Providers & Services - 5.8% |
| |||||||
Cooper Cos., Inc. (The) | 318,603 | 43,180,265 | ||||||
DexCom, Inc.* | 441,885 | 17,525,159 | ||||||
Endologix, Inc.* | 1,627,355 | 24,752,070 | ||||||
Insulet Corp.* | 367,364 | 14,573,330 | ||||||
Novadaq Technologies, Inc.* | 519,490 | 8,561,195 | ||||||
Quidel Corp.* | 464,858 | 10,278,010 | ||||||
|
| |||||||
118,870,029 | ||||||||
Health Care Technology - 2.0% |
| |||||||
athenahealth, Inc.* | 98,179 | 12,285,138 | ||||||
IMS Health Holdings, Inc.* | 75,000 | 1,926,000 | ||||||
Medidata Solutions, Inc.* | 359,047 | 15,370,802 | ||||||
Spectranetics Corp. (The)* | 447,950 | 10,249,096 | ||||||
|
| |||||||
39,831,036 | ||||||||
Pharmaceuticals - 1.7% |
| |||||||
Prestige Brands Holdings, Inc.* | 752,389 | 25,498,463 | ||||||
Revance Therapeutics, Inc.* | 309,077 | 10,508,618 | ||||||
|
| |||||||
36,007,081 | ||||||||
|
| |||||||
Total Health Care | 282,394,873 | |||||||
Industrials - 24.5% |
| |||||||
Aerospace & Defense - 2.1% |
| |||||||
HEICO Corp. Class A | 1,079,430 | 43,824,858 |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 19 | www.meridianfund.com |
Table of Contents
Meridian Growth Fund
Schedule of Investments (continued)
June 30, 2014
Shares | Value | |||||||
Air Freight & Logistics - 1.5% |
| |||||||
Expeditors International of Washington, Inc. | 460,482 | $ | 20,334,885 | |||||
Spirit Airlines, Inc.* | 179,100 | 11,326,284 | ||||||
|
| |||||||
31,661,169 | ||||||||
Commercial Services & Supplies - 3.2% |
| |||||||
Clean Harbors, Inc.* | 686,055 | 44,079,034 | ||||||
Ritchie Bros. Auctioneers, Inc. (Canada) | 856,575 | 21,114,574 | ||||||
|
| |||||||
65,193,608 | ||||||||
Electrical Equipment - 3.9% |
| |||||||
Polypore International, Inc.* | 534,446 | 25,509,108 | ||||||
Sensata Technologies Holding N.V. (Netherlands)* | 1,148,575 | 53,730,338 | ||||||
|
| |||||||
79,239,446 | ||||||||
Machinery - 4.3% |
| |||||||
Kennametal, Inc. | 478,442 | 22,142,296 | ||||||
Proto Labs, Inc.* | 157,599 | 12,910,510 | ||||||
Tennant Co. | 394,710 | 30,124,267 | ||||||
Woodward, Inc. | 455,240 | 22,843,943 | ||||||
|
| |||||||
88,021,016 | ||||||||
Marine - 1.1% |
| |||||||
Kirby Corp.* | 198,495 | 23,251,704 | ||||||
Professional Services - 3.2% |
| |||||||
Advisory Board Co. (The)* | 387,122 | 20,052,920 | ||||||
Corporate Executive Board Co. (The) | 528,172 | 36,031,894 | ||||||
IHS, Inc. Class A* | 76,429 | 10,369,122 | ||||||
|
| |||||||
66,453,936 | ||||||||
Road & Rail - 3.3% |
| |||||||
J.B. Hunt Transport Services, Inc. | 265,651 | 19,599,731 | ||||||
RoadRunner Transportation Systems, Inc.* | 582,326 | 16,363,361 | ||||||
Saia, Inc.* | 658,438 | 28,925,181 | ||||||
|
| |||||||
64,888,273 | ||||||||
Trading Companies & Distributors - 1.9% |
| |||||||
MSC Industrial Direct Co. Class A | 191,041 | 18,271,161 | ||||||
WESCO International, Inc.* | 247,559 | 21,384,146 | ||||||
|
| |||||||
39,655,307 | ||||||||
|
| |||||||
Total Industrials | 502,189,317 | |||||||
Information Technology - 20.1% |
| |||||||
Electronic Equipment, Instruments - 1.4% |
| |||||||
Measurement Specialties, Inc.* | 326,208 | 28,076,723 |
Shares | Value | |||||||
Internet Software & Services - 3.8% |
| |||||||
CoStar Group, Inc.* | 63,523 | $ | 10,047,433 | |||||
Demandware, Inc.* | 225,439 | 15,638,703 | ||||||
SPS Commerce, Inc.* | 145,070 | 9,166,973 | ||||||
VistaPrint N.V. (Netherlands)* | 1,024,678 | 41,458,472 | ||||||
|
| |||||||
76,311,581 | ||||||||
IT Services - 3.5% |
| |||||||
Euronet Worldwide, Inc.* | 443,387 | 21,388,989 | ||||||
Gartner, Inc.* | 716,923 | 50,557,410 | ||||||
|
| |||||||
71,946,399 | ||||||||
Software - 10.5% |
| |||||||
ANSYS, Inc.* | 257,635 | 19,533,886 | ||||||
Blackbaud, Inc. | 464,420 | 16,598,371 | ||||||
Cadence Design Systems, Inc.* | 2,763,892 | 48,340,471 | ||||||
Qlik Technologies, Inc.* | 342,188 | 7,740,293 | ||||||
RealPage, Inc.* | 694,714 | 15,617,171 | ||||||
SolarWinds, Inc.* | 1,051,550 | 40,652,923 | ||||||
Solera Holdings, Inc. | 315,773 | 21,204,157 | ||||||
SS&C Technologies Holdings, Inc.* | 1,011,788 | 44,741,265 | ||||||
|
| |||||||
214,428,537 | ||||||||
Technology Hardware, Storage & Peripherals - 0.9% |
| |||||||
Stratasys Ltd.* | 167,392 | 19,020,753 | ||||||
|
| |||||||
Total Information Technology | 409,783,993 | |||||||
Materials - 1.3% |
| |||||||
Chemicals - 1.3% |
| |||||||
Valspar Corp. (The) | 341,651 | 26,030,390 | ||||||
|
| |||||||
Total Materials | 26,030,390 | |||||||
Total Investments - 92.5% |
| |||||||
(Cost $1,667,631,898) | 1,891,879,255 | |||||||
Cash And Other Assets, Less |
| 152,970,312 | ||||||
|
| |||||||
Net Assets - 100.0% |
| $ | 2,044,849,567 | |||||
|
|
N.V.-Naamloze Vennootschap is the Dutch term for limited liability company
* | Non-income producing securities |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 20 | www.meridianfund.com |
Table of Contents
Meridian Contrarian Fund
Schedule of Investments
June 30, 2014
Shares | Value | |||||||
Common Stocks - 92.2% |
| |||||||
Consumer Discretionary - 14.9% |
| |||||||
Diversified Consumer Services - 1.1% |
| |||||||
Regis Corp. | 326,000 | $ | 4,590,080 | |||||
ServiceMaster Global Holdings, Inc.* | 215,588 | 3,930,169 | ||||||
|
| |||||||
8,520,249 | ||||||||
Hotels, Restaurants & Leisure - 4.3% |
| |||||||
Del Frisco’s Restaurant Group, Inc.* | 231,400 | 6,377,384 | ||||||
Denny’s Corp.* | 1,533,600 | 9,999,072 | ||||||
Yum! Brands, Inc. | 203,800 | 16,548,560 | ||||||
|
| |||||||
32,925,016 | ||||||||
Leisure Equipment & Products - 1.3% |
| |||||||
Polaris Industries, Inc. | 79,000 | 10,288,960 | ||||||
Specialty Retail - 3.0% |
| |||||||
Children’s Place, Inc. (The) | 75,000 | 3,722,250 | ||||||
Monro Muffler Brake, Inc. | 153,100 | 8,143,389 | ||||||
Select Comfort Corp.* | 534,500 | 11,042,770 | ||||||
|
| |||||||
22,908,409 | ||||||||
Textiles, Apparel & Luxury Goods - 5.2% |
| |||||||
Gildan Activewear, Inc. (Canada) | 294,000 | 17,310,720 | ||||||
PVH Corp. | 73,000 | 8,511,800 | ||||||
Wolverine World Wide, Inc. | 531,000 | 13,837,860 | ||||||
|
| |||||||
39,660,380 | ||||||||
|
| |||||||
Total Consumer Discretionary | 114,303,014 | |||||||
Consumer Staples - 1.0% |
| |||||||
Food Products - 1.0% |
| |||||||
Chiquita Brands International, Inc.* | 720,100 | 7,813,085 | ||||||
|
| |||||||
Total Consumer Staples | 7,813,085 | |||||||
Energy - 6.7% |
| |||||||
Energy Equipment & Services - 1.7% |
| |||||||
CARBO Ceramics, Inc. | 28,400 | 4,377,008 | ||||||
National Oilwell Varco, Inc. | 109,400 | 9,009,090 | ||||||
|
| |||||||
13,386,098 | ||||||||
Oil, Gas & Consumable Fuels - 5.0% |
| |||||||
EOG Resources, Inc. | 130,600 | 15,261,916 | ||||||
Halcon Resources Corp.* | 1,117,801 | 8,148,769 | ||||||
Occidental Petroleum Corp. | 147,700 | 15,158,451 | ||||||
|
| |||||||
38,569,136 | ||||||||
|
| |||||||
Total Energy | 51,955,234 | |||||||
Financials - 10.9% |
| |||||||
Commercial Banks - 6.9% |
| |||||||
Bank of Hawaii Corp. | 196,000 | 11,503,240 | ||||||
BOK Financial Corp. | 182,654 | 12,164,757 | ||||||
Hancock Holding Co. | 347,500 | 12,273,700 | ||||||
Lazard Ltd. | 324,400 | 16,726,064 | ||||||
|
| |||||||
52,667,761 |
Shares | Value | |||||||
Insurance - 1.8% |
| |||||||
Arthur J Gallagher & Co. | 301,100 | $ | 14,031,260 | |||||
Real Estate Management & Development - 2.2% |
| |||||||
Alexander & Baldwin, Inc. | 401,200 | 16,629,740 | ||||||
|
| |||||||
Total Financials | 83,328,761 | |||||||
Health Care - 8.2% |
| |||||||
Health Care Equipment & Supplies - 2.9% |
| |||||||
Accuray, Inc.* | 844,600 | 7,432,480 | ||||||
CR Bard, Inc. | 49,500 | 7,078,995 | ||||||
Neurocrine Biosciences, Inc.* | 512,300 | 7,602,532 | ||||||
|
| |||||||
22,114,007 | ||||||||
Health Care Providers & Services - 3.0% |
| |||||||
Endologix, Inc.* | 493,447 | 7,505,329 | ||||||
Humana, Inc. | 120,900 | 15,441,348 | ||||||
|
| |||||||
22,946,677 | ||||||||
Life Sciences Tools & Services - 1.4% |
| |||||||
ICON, Plc* | 221,500 | 10,434,865 | ||||||
Pharmaceuticals - 0.9% |
| |||||||
Impax Laboratories, Inc.* | 232,500 | 6,972,675 | ||||||
|
| |||||||
Total Health Care | 62,468,224 | |||||||
Industrials - 21.9% |
| |||||||
Air Freight & Logistics - 1.0% |
| |||||||
Hub Group, Inc. Class A* | 149,000 | 7,509,600 | ||||||
Building Products - 2.7% |
| |||||||
Lennox International, Inc. | 154,900 | 13,874,393 | ||||||
NCI Building Systems, Inc.* | 334,300 | 6,495,449 | ||||||
|
| |||||||
20,369,842 | ||||||||
Commercial Services & Supplies - 5.5% |
| |||||||
Clean Harbors, Inc.* | 203,200 | 13,055,600 | ||||||
Copart, Inc.* | 326,800 | 11,751,728 | ||||||
Ritchie Bros Auctioneers, Inc. | 305,000 | 7,518,250 | ||||||
Steelcase, Inc. Class A | 657,000 | 9,940,410 | ||||||
|
| |||||||
42,265,988 | ||||||||
Electrical Equipment - 2.5% |
| |||||||
GrafTech International, Ltd.* | 420,800 | 4,401,568 | ||||||
Regal-Beloit Corp. | 189,900 | 14,918,544 | ||||||
|
| |||||||
19,320,112 | ||||||||
Industrial Conglomerates - 0.7% |
| |||||||
Raven Industries, Inc. | 155,000 | 5,136,700 | ||||||
Machinery - 3.7% |
| |||||||
Lindsay Corp. | 58,500 | 4,941,495 | ||||||
Stanley Black & Decker, Inc. | 95,000 | 8,342,900 | ||||||
Xylem, Inc. | 387,500 | 15,143,500 | ||||||
|
| |||||||
28,427,895 | ||||||||
Road & Rail - 4.3% |
| |||||||
Genesee & Wyoming, Inc. Class A* | 154,400 | 16,212,000 | ||||||
Norfolk Southern Corp. | 164,700 | 16,969,041 | ||||||
|
| |||||||
33,181,041 |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 21 | www.meridianfund.com |
Table of Contents
Meridian Contrarian Fund
Schedule of Investments (continued)
June 30, 2014
Shares | Value | |||||||
Trading Companies & Distributors - 1.5% |
| |||||||
MSC Industrial Direct Co., Inc. Class A | 123,600 | $ | 11,821,104 | |||||
|
| |||||||
Total Industrials | 168,032,282 | |||||||
Information Technology - 22.0% |
| |||||||
Communications Equipment - 1.5% |
| |||||||
Sonus Networks, Inc.* | 2,171,000 | 7,793,890 | ||||||
Ubiquiti Networks, Inc.* | 83,000 | 3,750,770 | ||||||
|
| |||||||
11,544,660 | ||||||||
Electronic Equipment, Instruments - 2.7% |
| |||||||
FLIR Systems, Inc. | 273,051 | 9,483,061 | ||||||
National Instruments Corp. | 344,398 | 11,155,051 | ||||||
|
| |||||||
20,638,112 | ||||||||
IT Services - 3.0% |
| |||||||
Acxiom Corp.* | 186,200 | 4,038,678 | ||||||
Broadridge Financial Solutions, Inc. | 356,400 | 14,840,496 | ||||||
CACI International, Inc. Class A* | 55,000 | 3,861,550 | ||||||
|
| |||||||
22,740,724 | ||||||||
Semiconductors - 5.7% |
| |||||||
Linear Technology Corp. | 306,200 | 14,412,834 | ||||||
Mellanox Technologies Ltd.* | 132,000 | 4,601,520 | ||||||
NVIDIA Corp. | 772,357 | 14,319,499 | ||||||
Power Integrations, Inc. | 173,900 | 10,006,206 | ||||||
|
| |||||||
43,340,059 | ||||||||
Software - 6.7% |
| |||||||
Barracuda Networks, Inc.* | 124,700 | 3,868,194 | ||||||
Fortinet, Inc.* | 387,000 | 9,725,310 | ||||||
Informatica Corp.* | 371,600 | 13,247,540 | ||||||
Silver Spring Networks, Inc.* | 293,000 | 3,905,690 | ||||||
Verint Systems, Inc.* | 413,500 | 20,282,175 | ||||||
|
| |||||||
51,028,909 | ||||||||
Technology Hardware, Storage & Peripherals - 2.4% |
| |||||||
Apple, Inc. | 200,900 | 18,669,637 | ||||||
|
| |||||||
Total Information Technology | 167,962,101 | |||||||
Materials - 3.7% |
| |||||||
Chemicals - 1.9% |
| |||||||
Scotts Miracle-Gro Co. (The) Class A | 256,491 | 14,584,078 | ||||||
Containers & Packaging - 1.5% |
| |||||||
Aptargroup, Inc. | 173,400 | 11,619,534 | ||||||
Metals & Mining - 0.3% |
| |||||||
Sesa Sterlite Ltd. ADR | 125,000 | 2,420,000 | ||||||
|
| |||||||
Total Materials | 28,623,612 |
Shares | Value | |||||||
Telecommunication Services - 0.5% |
| |||||||
Diversified Telecommunications - 0.5% |
| |||||||
Iridium Communications, Inc.* | 467,000 | $ | 3,950,820 | |||||
|
| |||||||
Total Telecommunication Services | 3,950,820 | |||||||
Utilities - 2.4% |
| |||||||
Electric Utilities - 2.4% |
| |||||||
Hawaiian Electric Industries, Inc. | 729,375 | 18,467,775 | ||||||
|
| |||||||
Total Utilities | 18,467,775 | |||||||
Total Investments - 92.2% |
| |||||||
(Cost $549,083,718) | 706,904,908 | |||||||
Cash and Other Assets, Less |
| 60,002,954 | ||||||
|
| |||||||
Net Assets - 100.0% | $ | 766,907,862 | ||||||
|
|
ADR-American Depositary Receipt
Plc-Public Limited Company
* | Non-income producing securities |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 22 | www.meridianfund.com |
Table of Contents
Meridian Equity Income Fund
Schedule of Investments
June 30, 2014
Shares | Value | |||||||
Common Stocks - 98.1% |
| |||||||
Consumer Discretionary - 14.2% |
| |||||||
Distributors - 2.0% |
| |||||||
Genuine Parts Co. | 7,785 | $ | 683,523 | |||||
Hotels, Restaurants & Leisure - 5.8% | ||||||||
Einstein Noah Restaurant Group, Inc. | 36,000 | 578,160 | ||||||
Extended Stay America, Inc. | 28,500 | 660,060 | ||||||
McDonald’s Corp. | 7,000 | 705,180 | ||||||
|
| |||||||
1,943,400 | ||||||||
Household Durables - 4.2% | ||||||||
Leggett & Platt, Inc. | 22,825 | 782,441 | ||||||
Tupperware Brands Corp. | 7,500 | 627,750 | ||||||
|
| |||||||
1,410,191 | ||||||||
Leisure Equipment & Products - 2.2% |
| |||||||
Hasbro, Inc. | 13,900 | 737,395 | ||||||
|
| |||||||
Total Consumer Discretionary | 4,774,509 | |||||||
Consumer Staples - 6.4% |
| |||||||
Food & Staples Retailing - 1.9% | ||||||||
SYSCO Corp. | 17,200 | 644,140 | ||||||
Household Products - 2.3% | ||||||||
Kimberly-Clark Corp. | 7,050 | 784,101 | ||||||
Tobacco - 2.2% | ||||||||
Reynolds American, Inc. | 12,150 | 733,253 | ||||||
|
| |||||||
Total Consumer Staples | 2,161,494 | |||||||
Energy - 8.6% |
| |||||||
Oil, Gas & Consumable Fuels - 8.6% | ||||||||
Chevron Corp. | 4,700 | 613,585 | ||||||
Enbridge Energy Partners LP | 21,000 | 775,530 | ||||||
Occidental Petroleum Corp. | 8,000 | 821,040 | ||||||
Spectra Energy Corp. | 16,400 | 696,672 | ||||||
|
| |||||||
Total Energy | 2,906,827 | |||||||
Financials - 13.7% |
| |||||||
Capital Markets - 2.1% | ||||||||
BlackRock, Inc. | 2,200 | 703,120 | ||||||
Commercial Banks - 5.9% | ||||||||
Bank of Hawaii Corp. | 11,100 | 651,459 | ||||||
Hancock Holding Co. | 18,700 | 660,484 | ||||||
Wells Fargo & Co. | 13,100 | 688,536 | ||||||
|
| |||||||
2,000,479 | ||||||||
Insurance - 1.8% | ||||||||
Arthur J. Gallagher & Co. | 13,200 | 615,120 | ||||||
Real Estate Investment Trusts - 3.9% | ||||||||
American Realty Capital Properties, Inc. REIT | 58,032 | 727,141 | ||||||
Chatham Lodging Trust REIT | 26,400 | 578,160 | ||||||
|
| |||||||
1,305,301 | ||||||||
|
| |||||||
Total Financials | 4,624,020 |
Shares | Value | |||||||
Health Care - 7.6% |
| |||||||
Health Care Equipment & Supplies - 1.8% |
| |||||||
Baxter International, Inc. | 8,600 | $ | 621,780 | |||||
Health Care Technology - 1.9% | ||||||||
Computer Programs & Systems, Inc. | 10,300 | 655,080 | ||||||
Pharmaceuticals - 3.9% | ||||||||
Johnson & Johnson | 6,485 | 678,460 | ||||||
Sanofi, ADR | 11,800 | 627,406 | ||||||
|
| |||||||
1,305,866 | ||||||||
|
| |||||||
Total Health Care | 2,582,726 | |||||||
Industrials - 12.4% |
| |||||||
Aerospace & Defense - 1.9% | ||||||||
Lockheed Martin Corp. | 4,000 | 642,920 | ||||||
Air Freight & Logistics - 2.1% | ||||||||
United Parcel Service, Inc. Class B | 6,815 | 699,628 | ||||||
Commercial Services & Supplies - 1.8% |
| |||||||
Steelcase, Inc. Class A | 40,000 | 605,200 | ||||||
Electrical Equipment - 4.5% | ||||||||
Eaton Corp. Plc (Ireland) | 10,740 | 828,913 | ||||||
Emerson Electric Co. | 10,700 | 710,052 | ||||||
|
| |||||||
1,538,965 | ||||||||
Road & Rail - 2.1% | ||||||||
Norfolk Southern Corp. | 6,800 | 700,604 | ||||||
|
| |||||||
Total Industrials | 4,187,317 | |||||||
Information Technology - 17.0% |
| |||||||
Communications Equipment - 2.1% | ||||||||
Cisco Systems, Inc. | 28,000 | 695,800 | ||||||
IT Services - 4.2% | ||||||||
Broadridge Financial Solutions, Inc. | 17,900 | 745,356 | ||||||
Paychex, Inc. | 16,400 | 681,584 | ||||||
|
| |||||||
1,426,940 | ||||||||
Semiconductors - 4.6% | ||||||||
Linear Technology Corp. | 15,800 | 743,706 | ||||||
Microchip Technology, Inc. | 16,200 | 790,722 | ||||||
|
| |||||||
1,534,428 | ||||||||
Software - 3.8% | ||||||||
CA, Inc. | 19,700 | 566,178 | ||||||
Microsoft Corp. | 17,295 | 721,202 | ||||||
|
| |||||||
1,287,380 | ||||||||
Technology Hardware, Storage & Peripherals - 2.3% |
| |||||||
Apple, Inc. | 8,400 | 780,612 | ||||||
|
| |||||||
Total Information Technology | 5,725,160 | |||||||
Materials - 10.0% |
| |||||||
Chemicals - 7.9% | ||||||||
Agrium, Inc. | 7,000 | 641,410 | ||||||
Air Products & Chemicals, Inc. | 5,400 | 694,548 | ||||||
EI du Pont de Nemours & Co. | 9,780 | 640,003 |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 23 | www.meridianfund.com |
Table of Contents
Meridian Equity Income Fund
Schedule of Investments (continued)
June 30, 2014
Shares | Value | |||||||
Scotts Miracle-Gro Co. (The) Class A | 12,400 | $ | 705,064 | |||||
|
| |||||||
2,681,025 | ||||||||
Metals & Mining - 2.1% | ||||||||
Compass Minerals International, Inc. | 7,300 | 698,902 | ||||||
|
| |||||||
Total Materials | 3,379,927 | |||||||
Telecommunication Services - 2.0% |
| |||||||
Diversified Telecommunication - 2.0% |
| |||||||
Verizon Communications, Inc. | 13,700 | 670,341 | ||||||
|
| |||||||
Total Telecommunication Services | 670,341 | |||||||
Utilities - 6.2% |
| |||||||
Electric Utilities - 2.1% | ||||||||
Hawaiian Electric Industries, Inc. | 27,300 | 691,236 | ||||||
Gas Utilities - 2.0% | ||||||||
Questar Corp. | 27,700 | 686,960 | ||||||
Water Utilities - 2.1% | ||||||||
American Water Works Co., Inc. | 14,000 | 692,300 | ||||||
|
| |||||||
Total Utilities | 2,070,496 | |||||||
Total Investments - 98.1% | ||||||||
(Cost $25,027,718) | 33,082,817 | |||||||
Cash and Other Assets, Less |
| 624,483 | ||||||
|
| |||||||
Net Assets - 100.0% | $ | 33,707,300 | ||||||
|
|
ADR-American Depositary Receipt
Plc-Public Limited Company
REIT-Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 24 | www.meridianfund.com |
Table of Contents
Meridian Small Cap Growth Fund
Schedule of Investments
June 30, 2014
Shares | Value | |||||||
Common Stocks - 89.8% |
| |||||||
Consumer Discretionary - 21.0% |
| |||||||
Auto Components - 0.6% |
| |||||||
Dorman Products, Inc.* | 2,120 | $ | 104,558 | |||||
Diversified Consumer Services - 2.7% |
| |||||||
2U, Inc.* | 10,952 | 184,103 | ||||||
Grand Canyon Education, Inc.* | 4,763 | 218,955 | ||||||
ServiceMaster Global Holdings, Inc.* | 4,909 | 89,491 | ||||||
|
| |||||||
492,549 | ||||||||
Hotels, Restaurants & Leisure - 2.7% |
| |||||||
Del Frisco’s Restaurant Group, Inc.* | 3,733 | 102,881 | ||||||
Papa Murphy’s Holdings, Inc.* | 14,103 | 135,107 | ||||||
Popeye’s Louisiana Kitchen, Inc.* | 4,007 | 175,146 | ||||||
Texas Roadhouse, Inc. | 3,099 | 80,574 | ||||||
|
| |||||||
493,708 | ||||||||
Household Durables - 1.3% |
| |||||||
GoPro, Inc. Class A* | 6,106 | 247,598 | ||||||
Internet & Catalog Retail - 0.7% |
| |||||||
Coupons.com, Inc.* | 4,826 | 126,972 | ||||||
Leisure Equipment & Products - 1.7% |
| |||||||
Arctic Cat, Inc. | 4,529 | 178,534 | ||||||
Malibu Boats, Inc., Class A* | 6,722 | 135,112 | ||||||
|
| |||||||
313,646 | ||||||||
Media - 2.4% |
| |||||||
National CineMedia, Inc. | 17,725 | 310,365 | ||||||
Rentrak Corp.* | 2,631 | 137,996 | ||||||
|
| |||||||
448,361 | ||||||||
Multiline Retail - 0.2% |
| |||||||
Gordmans Stores, Inc. | 6,851 | 29,459 | ||||||
Specialty Retail - 3.5% |
| |||||||
Five Below, Inc.* | 4,662 | 186,060 | ||||||
Hibbett Sports, Inc.* | 3,227 | 174,807 | ||||||
Monro Muffler Brake, Inc. | 1,581 | 84,093 | ||||||
Sportsman’s Warehouse Holdings, Inc.* | 15,376 | 123,008 | ||||||
Winmark Corp. | 1,238 | 86,202 | ||||||
|
| |||||||
654,170 | ||||||||
Textiles, Apparel & Luxury Goods - 5.2% |
| |||||||
Carter’s, Inc. | 5,136 | 354,024 | ||||||
Tumi Holdings, Inc.* | 12,646 | 254,564 | ||||||
Wolverine World Wide, Inc. | 13,661 | 356,006 | ||||||
|
| |||||||
964,594 | ||||||||
|
| |||||||
Total Consumer Discretionary | 3,875,615 | |||||||
Consumer Staples - 0.8% |
| |||||||
Food & Staples Retailing - 0.8% |
| |||||||
Susser Holdings Corp.* | 1,876 | 151,431 | ||||||
|
| |||||||
Total Consumer Staples | 151,431 | |||||||
Energy - 4.2% |
| |||||||
Energy Equipment & Services - 2.8% |
| |||||||
CHC Group Ltd.* | 15,763 | 133,040 | ||||||
Newpark Resources, Inc.* | 7,307 | 91,045 |
Shares | Value | |||||||
RigNet, Inc.* | 5,581 | $ | 300,369 | |||||
|
| |||||||
524,454 | ||||||||
Oil, Gas & Consumable Fuels - 1.4% |
| |||||||
Evolution Petroleum Corp. | 23,769 | 260,271 | ||||||
|
| |||||||
Total Energy | 784,725 | |||||||
Financials - 2.6% |
| |||||||
Capital Markets - 1.7% |
| |||||||
Financial Engines, Inc. | 1,917 | 86,802 | ||||||
Pennantpark Investment Corp. | 11,730 | 134,426 | ||||||
WisdomTree Investments, Inc.* | 8,157 | 100,821 | ||||||
|
| |||||||
322,049 | ||||||||
Commercial Banks - 0.9% |
| |||||||
Bank of the Ozarks, Inc. | 5,144 | 172,067 | ||||||
|
| |||||||
Total Financials | 494,116 | |||||||
Health Care - 15.5% |
| |||||||
Biotechnology - 4.1% |
| |||||||
Alnylam Pharmaceuticals, Inc.* | 1,300 | 82,121 | ||||||
Clovis Oncology, Inc.* | 1,307 | 54,123 | ||||||
Exact Sciences Corp.* | 8,196 | 139,578 | ||||||
Neurocrine Biosciences, Inc.* | 5,173 | 76,767 | ||||||
NPS Pharmaceuticals, Inc.* | 2,911 | 96,209 | ||||||
Repligen Corp.* | 6,033 | 137,492 | ||||||
Synageva BioPharma Corp.* | 940 | 98,512 | ||||||
Versartis, Inc.* | 2,597 | 72,820 | ||||||
|
| |||||||
757,622 | ||||||||
Health Care Equipment & Supplies - 5.2% |
| |||||||
DexCom, Inc.* | 2,695 | 106,884 | ||||||
Endologix, Inc.* | 14,467 | 220,043 | ||||||
Insulet Corp.* | 2,147 | 85,171 | ||||||
Merit Medical Systems, Inc.* | 12,297 | 185,685 | ||||||
Novadaq Technologies, Inc.* | 8,490 | 139,915 | ||||||
Quidel Corp.* | 4,318 | 95,471 | ||||||
Spectranetics Corp. (The)* | 5,699 | 130,393 | ||||||
|
| |||||||
963,562 | ||||||||
Health Care Providers & Services - 1.1% |
| |||||||
National Research Corp.* | 14,851 | 207,765 | ||||||
Health Care Technology - 2.2% |
| |||||||
Castlight Health, Inc., Class B* | 2,752 | 41,830 | ||||||
Computer Programs & Systems, Inc. | 1,416 | 90,058 | ||||||
Imprivata, Inc.* | 11,169 | 182,948 | ||||||
Medidata Solutions, Inc.* | 2,137 | 91,485 | ||||||
|
| |||||||
406,321 | ||||||||
Life Sciences Tools & Services - 0.5% |
| |||||||
Fluidigm Corp.* | 3,170 | 93,198 | ||||||
Pharmaceuticals - 2.4% |
| |||||||
MediWound Ltd.* | 8,000 | 91,040 | ||||||
Prestige Brands Holdings, Inc.* | 7,541 | 255,564 | ||||||
Revance Therapeutics, Inc.* | 2,749 | 93,466 | ||||||
|
| |||||||
440,070 | ||||||||
|
| |||||||
Total Health Care | 2,868,538 |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 25 | www.meridianfund.com |
Table of Contents
Meridian Small Cap Growth Fund
Schedule of Investments (continued)
June 30, 2014
Shares | Value | |||||||
Industrials - 24.6% |
| |||||||
Aerospace & Defense - 1.9% |
| |||||||
HEICO Corp. Class A | 8,771 | $ | 356,103 | |||||
Air Freight & Logistics - 0.7% |
| |||||||
Park-Ohio Holdings Corp. | 2,213 | 128,597 | ||||||
Commercial Services & Supplies - 5.8% |
| |||||||
Clean Harbors, Inc.* | 5,220 | 335,385 | ||||||
Heritage-Crystal Clean, Inc.* | 17,208 | 337,793 | ||||||
Ritchie Bros Auctioneers, Inc. | 7,075 | 174,399 | ||||||
SP Plus Corp.* | 10,312 | 220,574 | ||||||
|
| |||||||
1,068,151 | ||||||||
Electrical Equipment - 1.4% |
| |||||||
Polypore International, Inc.* | 2,654 | 126,675 | ||||||
Power Solutions International, Inc.* | 1,870 | 134,584 | ||||||
|
| |||||||
261,259 | ||||||||
Industrial Conglomerates - 0.7% |
| |||||||
Raven Industries, Inc. | 3,936 | 130,439 | ||||||
Machinery - 4.4% |
| |||||||
Kennametal, Inc. | 2,189 | 101,307 | ||||||
Luxfer Holdings, Plc | 7,781 | 147,450 | ||||||
Proto Labs, Inc.* | 1,822 | 149,258 | ||||||
voxeljet AG ADR* | 5,496 | 115,086 | ||||||
Tennant Co. | 3,859 | 294,519 | ||||||
|
| |||||||
807,620 | ||||||||
Professional Services - 4.4% |
| |||||||
Advisory Board Co. (The)* | 2,978 | 154,260 | ||||||
Corporate Executive Board Co. (The) | 4,713 | 321,521 | ||||||
TriNet Group, Inc.* | 9,093 | 218,869 | ||||||
TrueBlue, Inc.* | 4,396 | 121,198 | ||||||
|
| |||||||
815,848 | ||||||||
Road & Rail - 3.6% |
| |||||||
Heartland Express, Inc. | 10,608 | 226,375 | ||||||
Roadrunner Transportation Systems, Inc.* | 9,584 | 269,310 | ||||||
Saia, Inc.* | 4,025 | 176,818 | ||||||
|
| |||||||
672,503 | ||||||||
Trading Companies & Distributors - 1.7% |
| |||||||
Titan Machinery, Inc.* | 11,081 | 182,393 | ||||||
WESCO International, Inc.* | 1,458 | 125,943 | ||||||
|
| |||||||
308,336 | ||||||||
|
| |||||||
Total Industrials | 4,548,856 | |||||||
Information Technology - 20.1% |
| |||||||
Electronic Equipment, Instruments - 2.9% |
| |||||||
DTS, Inc.* | 4,384 | 80,709 | ||||||
Measurement Specialties, Inc.* | 3,714 | 319,664 |
Shares | Value | |||||||
RealD, Inc.* | 10,310 | $ | 131,556 | |||||
|
| |||||||
531,929 | ||||||||
Internet Software & Services - 7.5% |
| |||||||
Amber Road, Inc.* | 4,303 | 69,407 | ||||||
Angie’s List, Inc.* | 7,519 | 89,777 | ||||||
Carbonite, Inc.* | 15,105 | 180,807 | ||||||
ChannelAdvisor Corp.* | 6,182 | 162,958 | ||||||
Dealertrack Technologies, Inc.* | 1,293 | 58,625 | ||||||
LivePerson, Inc.* | 13,909 | 141,176 | ||||||
Q2 Holdings, Inc.* | 6,599 | 94,102 | ||||||
Reis, Inc. | 4,076 | 85,922 | ||||||
SciQuest, Inc.* | 2,690 | 47,586 | ||||||
SPS Commerce, Inc.* | 2,418 | 152,793 | ||||||
VistaPrint N.V. (Netherlands)* | 7,538 | 304,987 | ||||||
|
| |||||||
1,388,140 | ||||||||
IT Services - 1.9% |
| |||||||
Cass Information Systems, Inc. | 1,732 | 85,699 | ||||||
Euronet Worldwide, Inc.* | 5,408 | 260,882 | ||||||
|
| |||||||
346,581 | ||||||||
Semiconductors - 0.4% |
| |||||||
NVE Corp.* | 1,445 | 80,328 | ||||||
Software - 7.4% |
| |||||||
Advent Software, Inc. | 5,280 | 171,970 | ||||||
Blackbaud, Inc. | 2,270 | 81,130 | ||||||
Cadence Design Systems, Inc.* | 20,976 | 366,870 | ||||||
Callidus Software, Inc.* | 10,660 | 127,280 | ||||||
Exa Corp.* | 9,496 | 106,925 | ||||||
RealPage, Inc.* | 3,690 | 82,951 | ||||||
SolarWinds, Inc.* | 6,735 | 260,375 | ||||||
SS&C Technologies Holdings, Inc.* | 3,897 | 172,325 | ||||||
|
| |||||||
1,369,826 | ||||||||
|
| |||||||
Total Information Technology | 3,716,804 | |||||||
Materials - 1.0% |
| |||||||
Chemicals - 1.0% |
| |||||||
Balchem Corp. | 1,612 | 86,339 | ||||||
Landec Corp.* | 7,375 | 92,114 | ||||||
|
| |||||||
Total Materials | 178,453 | |||||||
Total Investments - 89.8% |
| |||||||
(Cost $15,733,797) | 16,618,538 | |||||||
Cash and Other Assets, Less Liabilities - 10.2% | 1,878,910 | |||||||
|
| |||||||
Net Assets - 100.0% | $ | 18,497,448 | ||||||
|
|
ADR-American Depositary Receipt
N.V.-Naamloze Vennootschap is the Dutch term for limited liability company
Plc-Public Limited Company
* | Non-income producing securities |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 26 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Statements of Assets and Liabilities
June 30, 2014 | Meridian Growth Fund | Meridian Contrarian Fund | Meridian Equity Income Fund | Meridian Small Cap Growth Fund | ||||||||||||
Assets | ||||||||||||||||
Investments, at value1 | $ | 1,891,879,255 | $ | 706,904,908 | $ | 33,082,817 | $ | 16,618,538 | ||||||||
Cash | 158,495,917 | 56,818,116 | 619,502 | 2,076,594 | ||||||||||||
Receivables and other assets: | ||||||||||||||||
Fund shares purchased | 206,448 | 32,087 | — | 305,023 | ||||||||||||
Investments sold | 14,487,650 | 13,454,386 | — | — | ||||||||||||
Dividends | 143,574 | 423,360 | 63,511 | 5,425 | ||||||||||||
Prepaid expenses | 48,728 | 31,295 | 23,703 | 29,121 | ||||||||||||
|
| |||||||||||||||
Total assets | 2,065,261,572 | 777,664,152 | 33,789,533 | 19,034,701 | ||||||||||||
|
| |||||||||||||||
Liabilities | ||||||||||||||||
Payables and other accrued expenses: | ||||||||||||||||
Fund shares sold | 1,391,902 | 1,088,471 | 4,908 | — | ||||||||||||
Investments purchased | 17,445,973 | 8,870,755 | — | 455,443 | ||||||||||||
Investment advisory fees | 1,265,737 | 623,348 | 22,352 | 37,425 | ||||||||||||
Service plan fees | 5,968 | 238 | 74 | 1,545 | ||||||||||||
Professional fees | 111,158 | 73,636 | 48,368 | 35,333 | ||||||||||||
Directors’ fees | 18,671 | 6,890 | 302 | 136 | ||||||||||||
Transfer agent fees | 69,766 | 44,940 | 1,636 | 1,011 | ||||||||||||
Other | 102,830 | 48,012 | 4,593 | 6,360 | ||||||||||||
|
| |||||||||||||||
Total liabilities | 20,412,005 | 10,756,290 | 82,233 | 537,253 | ||||||||||||
|
| |||||||||||||||
Net Assets | $ | 2,044,849,567 | $ | 766,907,862 | $ | 33,707,300 | $ | 18,497,448 | ||||||||
Net Assets Consist of | ||||||||||||||||
Paid in capital | $ | 1,669,349,407 | $ | 512,728,386 | $ | 25,632,721 | $ | 16,540,663 | ||||||||
Accumulated net realized gain (loss) on investments and foreign currency transactions | 151,252,803 | 96,208,286 | (462,333 | ) | 1,072,044 | |||||||||||
Net unrealized appreciation on investments and foreign currency translations | 224,247,357 | 157,821,190 | 8,055,099 | 884,741 | ||||||||||||
Undistributed (distributions in excess of) net investment income | — | 150,000 | 481,813 | — | ||||||||||||
|
| |||||||||||||||
Net Assets | $ | 2,044,849,567 | $ | 766,907,862 | $ | 33,707,300 | $ | 18,497,448 | ||||||||
|
| |||||||||||||||
Net Asset Value | ||||||||||||||||
Legacy Class | ||||||||||||||||
Net assets | $ | 2,021,196,533 | $ | 764,882,157 | $ | 33,649,016 | $ | 9,838,522 | ||||||||
Shares outstanding2 | 53,387,953 | 16,802,901 | 2,305,672 | 844,538 | ||||||||||||
|
| |||||||||||||||
Net asset value per share (offering and redemption price) | $ | 37.86 | $ | 45.52 | $ | 14.59 | $ | 11.65 | ||||||||
|
| |||||||||||||||
Investor Class | ||||||||||||||||
Net assets | $ | 18,749,167 | $ | 1,564,093 | $ | 45,402 | $ | 2,135,120 | ||||||||
Shares outstanding2 | 496,299 | 34,400 | 3,109 | 183,305 | ||||||||||||
|
| |||||||||||||||
Net asset value per share (offering and redemption price) | $ | 37.78 | $ | 45.47 | $ | 14.60 | $ | 11.65 | ||||||||
|
| |||||||||||||||
Advisor Class | ||||||||||||||||
Net assets | $ | 4,903,867 | $ | 461,612 | $ | 12,882 | $ | 6,523,806 | ||||||||
Shares outstanding2 | 130,020 | 10,165 | 883 | 560,933 | ||||||||||||
|
| |||||||||||||||
Net asset value per share (offering and redemption price) | $ | 37.72 | $ | 45.41 | $ | 14.58 | 3 | $ | 11.63 | |||||||
|
| |||||||||||||||
1 Investments, at cost | $ | 1,667,631,898 | $ | 549,083,718 | $ | 25,027,718 | $ | 15,733,797 | ||||||||
2 500,000,000 shares authorized, $0.01 par value | ||||||||||||||||
3 Calculated NAV may not equal actual NAV shown due to rounding of the net assets and shares. |
|
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 27 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
For the Year Ended June 30, 2014 | Meridian Growth Fund | Meridian Contrarian Fund | Meridian Equity Income Fund | Meridian Small Cap Growth Fund1 | ||||||||||||
Investment Income | ||||||||||||||||
Dividends | $ | 12,547,403 | $ | 8,712,606 | $ | 957,981 | $ | 41,136 | ||||||||
Foreign taxes withheld | (126,382 | ) | (56,874 | ) | (9,359 | ) | (394 | ) | ||||||||
|
| |||||||||||||||
Total investment income | 12,421,021 | 8,655,732 | 948,622 | 40,742 | ||||||||||||
|
| |||||||||||||||
Expenses | ||||||||||||||||
Investment advisory fees | 16,109,269 | 7,530,269 | 292,467 | 68,401 | ||||||||||||
Custodian fees | 202,392 | 76,915 | 6,551 | 10,354 | ||||||||||||
Distribution and service plan fees: | ||||||||||||||||
Investor Class | 14,431 | 185 | 57 | 262 | ||||||||||||
Advisor Class | 7,978 | 448 | 34 | 5,638 | ||||||||||||
Directors’ fees and expenses | 282,539 | 100,284 | 4,198 | 557 | ||||||||||||
Pricing fees | 207,940 | 86,940 | 24,257 | 12,574 | ||||||||||||
Audit and tax fees | 37,735 | 37,688 | 18,386 | 28,605 | ||||||||||||
Legal fees | 468,695 | 146,789 | 5,835 | 2,180 | ||||||||||||
Registration and filing fees | 61,141 | 45,012 | 71,789 | 38,113 | ||||||||||||
Shareholder communications | 247,315 | 132,303 | 3,773 | 3,400 | ||||||||||||
Transfer agent fees | 542,249 | 366,023 | 13,624 | 4,195 | ||||||||||||
Miscellaneous expenses | 104,997 | 40,159 | 8,169 | 5,414 | ||||||||||||
|
| |||||||||||||||
Total expenses | 18,286,681 | 8,563,015 | 449,140 | 179,693 | ||||||||||||
Less waivers and/or reimbursements (Note 4) | (7,178 | ) | (16,794 | ) | (54,486 | ) | (89,308 | ) | ||||||||
|
| |||||||||||||||
Net expenses | 18,279,503 | 8,546,221 | 394,654 | 90,385 | ||||||||||||
|
| |||||||||||||||
Net investment income/(loss) | (5,858,482 | ) | 109,511 | 553,968 | (49,643 | ) | ||||||||||
|
| |||||||||||||||
Realized and Unrealized Gain (Loss) | ||||||||||||||||
Net realized gain on investments and foreign currency transactions | 556,304,765 | 157,634,506 | 2,242,362 | 1,120,438 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | (212,344,132 | ) | (1,572,341 | ) | 2,899,378 | 884,741 | ||||||||||
|
| |||||||||||||||
Total realized and unrealized gain | 343,960,633 | 156,062,165 | 5,141,740 | 2,005,179 | ||||||||||||
|
| |||||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 338,102,151 | $ | 156,171,676 | $ | 5,695,708 | $ | 1,955,536 | ||||||||
|
|
1 | Represents the period December 16, 2013 (Inception) to June 30, 2014. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 28 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Statements of Changes in Net Assets
Meridian Growth Fund | Meridian Contrarian Fund | |||||||||||||||
Changes in Net Assets From: | Year Ended June 30, 2014 | Year Ended June 30, 2013 | Year Ended June 30, 2014 | Year Ended June 30, 2013 | ||||||||||||
Operations | ||||||||||||||||
Net investment income/(loss) | $ | (5,858,482 | ) | $ | 2,512,776 | $ | 109,511 | $ | 2,832,635 | |||||||
Net realized gain on investments and foreign currency transactions | 556,304,765 | 363,025,066 | 157,634,506 | 101,659,072 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | (212,344,132 | ) | (55,210,405 | ) | (1,572,341 | ) | 32,364,704 | |||||||||
|
| |||||||||||||||
Net increase in net assets resulting from operations | 338,102,151 | 310,327,437 | 156,171,676 | 136,856,411 | ||||||||||||
|
| |||||||||||||||
Distributions to Shareholders From: | ||||||||||||||||
Net investment income: | ||||||||||||||||
Legacy Class | (1,246 | ) | (6,998,656 | ) | (3,275,946 | ) | (2,282,630 | ) | ||||||||
Investor Class | — | — | (41 | ) | — | |||||||||||
Advisor Class | — | — | (51 | ) | — | |||||||||||
Net realized gains: | ||||||||||||||||
Legacy Class | (598,507,009 | ) | (312,972,771 | ) | (2,568,833 | ) | — | |||||||||
Investor Class | — | — | — | — | ||||||||||||
Advisor Class | — | — | — | — | ||||||||||||
|
| |||||||||||||||
Decrease in net assets from distributions | (598,508,255 | ) | (319,971,427 | ) | (5,844,871 | ) | (2,282,630 | ) | ||||||||
|
| |||||||||||||||
Fund Share Transactions | ||||||||||||||||
Net increase (decrease) in net assets resulting from fund share transactions (Note 2) | 192,310,546 | (361,494,718 | ) | (87,941,564 | ) | (118,698,620 | ) | |||||||||
|
| |||||||||||||||
Total increase (decrease) in net assets | (68,095,558 | ) | (371,138,708 | ) | 62,385,241 | 15,875,161 | ||||||||||
|
| |||||||||||||||
Net Assets | ||||||||||||||||
Beginning of year | 2,112,945,125 | 2,484,083,833 | 704,522,621 | 688,647,460 | ||||||||||||
|
| |||||||||||||||
End of year* | $ | 2,044,849,567 | $ | 2,112,945,125 | $ | 766,907,862 | $ | 704,522,621 | ||||||||
|
| |||||||||||||||
* Includes accumulated undistributed (distributions in excess of) net investment income | $ | — | $ | (1,074,678 | ) | $ | 150,000 | $ | 2,833,352 | |||||||
|
|
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 29 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Statements of Changes in Net Assets
Meridian Equity Income Fund | Meridian Small Cap Growth Fund | |||||||||||
Changes in Net Assets From: | Year Ended June 30, 2014 | Year Ended June 30, 2013 | For the Period December 16, 2013 to June 30, 2014 | |||||||||
Operations | ||||||||||||
Net investment income/(loss) | $ | 553,968 | $ | 570,782 | $ | (49,643 | ) | |||||
Net realized gain on investments and foreign currency transactions | 2,242,362 | 1,655,567 | 1,120,438 | |||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 2,899,378 | 2,402,213 | 884,741 | |||||||||
|
| |||||||||||
Net increase in net assets resulting from operations | 5,695,708 | 4,628,562 | 1,955,536 | |||||||||
|
| |||||||||||
Distributions to Shareholders From: | ||||||||||||
Net investment income: | ||||||||||||
Legacy Class | (500,908 | ) | (639,477 | ) | — | |||||||
Investor Class | (148 | ) | — | — | ||||||||
Advisor Class | (145 | ) | — | — | ||||||||
Net realized gains: | ||||||||||||
Legacy Class | — | — | — | |||||||||
Investor Class | — | — | — | |||||||||
Advisor Class | — | — | — | |||||||||
|
| |||||||||||
Decrease in net assets from distributions | (501,201 | ) | (639,477 | ) | — | |||||||
|
| |||||||||||
Fund Share Transactions | ||||||||||||
Net increase (decrease) in net assets resulting from fund share transactions (Note 2) | (184,365 | ) | (6,035,663 | ) | 16,541,912 | |||||||
|
| |||||||||||
Total increase (decrease) in net assets | 5,010,142 | (2,046,578 | ) | 18,497,448 | ||||||||
|
| |||||||||||
Net Assets | ||||||||||||
Beginning of period | 28,697,158 | 30,743,736 | — | |||||||||
|
| |||||||||||
End of period* | $ | 33,707,300 | $ | 28,697,158 | $ | 18,497,448 | ||||||
|
| |||||||||||
* Includes accumulated undistributed (distributions in excess of) net investment income | $ | 481,813 | $ | 449,323 | $ | — | ||||||
|
|
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 30 | www.meridianfund.com |
Table of Contents
Meridian Growth Fund
For the Fiscal Year Ended June 30, | ||||||||||||||||||||
Legacy Class | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||
Net asset value, beginning of period | $ | 44.31 | $ | 45.06 | $ | 47.61 | $ | 33.94 | $ | 27.89 | ||||||||||
|
| |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss)1 | (0.11 | ) | 0.05 | 0.10 | 0.08 | 0.08 | ||||||||||||||
Net realized and unrealized gain | 6.89 | 6.23 | 0.69 | 13.67 | 6.11 | |||||||||||||||
|
| |||||||||||||||||||
Net increase from investment operations | 6.78 | 6.28 | 0.79 | 13.75 | 6.19 | |||||||||||||||
|
| |||||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||
Distributions from net investment income | (0.00 | )2 | (0.15 | ) | (0.07 | ) | (0.07 | ) | (0.12 | ) | ||||||||||
Distributions from net realized capital gains | (13.23 | ) | (6.88 | ) | (3.27 | ) | (0.01 | ) | 0.00 | |||||||||||
Distributions from paid in capital | 0.00 | 0.00 | 0.00 | 0.00 | (0.02 | ) | ||||||||||||||
|
| |||||||||||||||||||
Total distributions to shareholders | (13.23 | ) | (7.03 | ) | (3.34 | ) | (0.08 | ) | (0.14 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 37.86 | $ | 44.31 | $ | 45.06 | $ | 47.61 | $ | 33.94 | ||||||||||
|
| |||||||||||||||||||
Total return | 17.31% | 15.54% | 2.45% | 40.51% | 22.18% | |||||||||||||||
|
| |||||||||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||
Ratio of net investment income (loss) to average net assets | (0.27% | ) | 0.11% | 0.22% | 0.18% | 0.24% | ||||||||||||||
Ratio of expenses to average net assets | 0.86% | 0.87% | 0.85% | 0.81% | 0.84% | |||||||||||||||
Supplemental Data | ||||||||||||||||||||
Net Assets, End of Period (000’s) | $ | 2,021,197 | $ | 2,112,945 | $ | 2,484,084 | $ | 2,615,082 | $ | 1,438,266 | ||||||||||
Portfolio Turnover Rate | 96% | 37% | 25% | 26% | 37% |
1 | Per share net investment income has been calculated using the average daily shares method. |
2 | Less than $0.005 per share. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 31 | www.meridianfund.com |
Table of Contents
Meridian Growth Fund
Financial Highlights
For the Period Ended June 30, 2014 | ||||||||
Investor Class1 | Advisor Class1 | |||||||
Per Share Operating Performance | ||||||||
Net asset value, beginning of period | $ | 35.67 | $ | 35.67 | ||||
|
| |||||||
Income (loss) from investment operations: | ||||||||
Net investment loss2 | (0.16 | ) | (0.21 | ) | ||||
Net realized and unrealized gain | 2.27 | 2.26 | ||||||
|
| |||||||
Net increase from investment operations | 2.11 | 2.05 | ||||||
|
| |||||||
Less distributions to shareholders: | ||||||||
Distributions from net investment income | (0.00 | )3 | (0.00 | )3 | ||||
|
| |||||||
Total distributions to shareholders | (0.00 | )3 | (0.00 | )3 | ||||
|
| |||||||
Net asset value, end of period | $ | 37.78 | $ | 37.72 | ||||
|
| |||||||
Total return | 5.92% | 4 | 5.75% | 4 | ||||
|
| |||||||
Ratios to Average Net Assets | ||||||||
Ratio of net investment loss to average net assets after fees waived | (0.70% | )5 | (0.93% | )5 | ||||
Ratio of expenses to average net assets: | ||||||||
Before fees waived | 1.30% | 5 | 2.00% | 5 | ||||
After fees waived6 | 1.30% | 5 | 1.55% | 5 | ||||
Supplemental Data | ||||||||
Net Assets, End of Period (000’s) | $ | 18,749 | $ | 4,904 | ||||
Portfolio Turnover Rate | 96% | 4 | 96% | 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 4 to Financial Statements. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 32 | www.meridianfund.com |
Table of Contents
Meridian Contrarian Fund
Financial Highlights
For the Fiscal Year Ended June 30, | ||||||||||||||||||||
Legacy Class | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||
Net asset value, beginning of period | $ | 37.20 | $ | 30.60 | $ | 29.59 | $ | 22.80 | $ | 20.53 | ||||||||||
|
| |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income1 | 0.01 | 0.14 | 0.09 | 0.10 | 0.07 | |||||||||||||||
Net realized and unrealized gain | 8.63 | 6.57 | 1.05 | 2 | 6.77 | 2.45 | ||||||||||||||
|
| |||||||||||||||||||
Net increase from investment operations | 8.64 | 6.71 | 1.14 | 6.87 | 2.52 | |||||||||||||||
|
| |||||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||
Distributions from net investment income | (0.18 | ) | (0.11 | ) | (0.13 | ) | (0.08 | ) | (0.25 | ) | ||||||||||
Distributions from net realized capital gains | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
|
| |||||||||||||||||||
Total distributions to shareholders | (0.32 | ) | (0.11 | ) | (0.13 | ) | (0.08 | ) | (0.25 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 45.52 | $ | 37.20 | $ | 30.60 | $ | 29.59 | $ | 22.80 | ||||||||||
|
| |||||||||||||||||||
Total return | 23.31% | 21.98% | 3.89% | 2 | 30.13% | 12.20% | ||||||||||||||
|
| |||||||||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||
Ratio of net investment income to average net assets | 0.01% | 0.41% | 0.31% | 0.37% | 0.27% | |||||||||||||||
Ratio of expenses to average net assets | 1.13% | 1.16% | 1.14% | 1.09% | 1.09% | |||||||||||||||
Supplemental Data | ||||||||||||||||||||
Net Assets, End of Period (000’s) | $ | 764,882 | $ | 704,523 | $ | 688,647 | $ | 869,312 | $ | 802,936 | ||||||||||
Portfolio Turnover Rate | 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%. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 33 | www.meridianfund.com |
Table of Contents
Meridian Contrarian Fund
Financial Highlights
For the Period Ended June 30, 2014 | ||||||||
Investor Class1 | Advisor Class1 | |||||||
Per Share Operating Performance | ||||||||
Net asset value, beginning of period | $ | 42.64 | $ | 42.64 | ||||
|
| |||||||
Income (loss) from investment operations: | ||||||||
Net investment loss2 | (0.02 | ) | (0.08 | ) | ||||
Net realized and unrealized gain | 3.03 | 3.02 | ||||||
|
| |||||||
Net increase from investment operations | 3.01 | 2.94 | ||||||
|
| |||||||
Less distributions to shareholders: | ||||||||
Distributions from net investment income | (0.18 | ) | (0.17 | ) | ||||
|
| |||||||
Total distributions to shareholders | (0.18 | ) | (0.17 | ) | ||||
|
| |||||||
Net asset value, end of period | $ | 45.47 | $ | 45.41 | ||||
|
| |||||||
Total return | 7.08% | 3 | 6.91% | 3 | ||||
|
| |||||||
Ratios to Average Net Assets | ||||||||
Ratio of net investment loss to average net assets after fees waived | (0.09% | )4 | (0.30% | )4 | ||||
Ratio of expenses to average net assets: | ||||||||
Before fees waived | 3.51% | 4 | 7.46% | 4 | ||||
After fees waived5 | 1.35% | 4 | 1.60% | 4 | ||||
Supplemental Data | ||||||||
Net Assets, End of Period (000’s) | $ | 1,564 | $ | 462 | ||||
Portfolio Turnover Rate | 67% | 3 | 67% | 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 4 to Financial Statements. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 34 | www.meridianfund.com |
Table of Contents
Meridian Equity Income Fund
Financial Highlights
For the Fiscal Year Ended June 30, | ||||||||||||||||||||
Legacy Class | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||
Net asset value, beginning of period | $ | 12.35 | $ | 10.71 | $ | 10.61 | $ | 8.51 | $ | 6.88 | ||||||||||
|
| |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income1 | 0.24 | 0.24 | 0.22 | 0.20 | 0.19 | |||||||||||||||
Net realized and unrealized gain | 2.22 | 1.68 | 0.09 | 2.11 | 1.63 | |||||||||||||||
|
| |||||||||||||||||||
Net increase from investment operations | 2.46 | 1.92 | 0.31 | 2.31 | 1.82 | |||||||||||||||
|
| |||||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.28 | ) | (0.21 | ) | (0.21 | ) | (0.19 | ) | ||||||||||
|
| |||||||||||||||||||
Total distributions to shareholders | (0.22 | ) | (0.28 | ) | (0.21 | ) | (0.21 | ) | (0.19 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 14.59 | $ | 12.35 | $ | 10.71 | $ | 10.61 | $ | 8.51 | ||||||||||
|
| |||||||||||||||||||
Total return | 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 | 1.75% | 2.08% | 2.17% | 2.04% | 2.27% | |||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before fees waived | 1.37% | 1.53% | 1.41% | 1.25% | 1.30% | |||||||||||||||
After fees waived3 | 1.25% | 1.25% | 1.25% | 1.25% | 2 | 1.25% | ||||||||||||||
Supplemental Data | ||||||||||||||||||||
Net Assets, End of Period (000’s) | $ | 33,649 | $ | 28,697 | $ | 30,744 | $ | 35,644 | $ | 24,937 | ||||||||||
Portfolio Turnover Rate | 35% | 44% | 31% | 29% | 63% |
1 | Per share net investment income has been calculated using the average daily shares method. |
2 | Includes fees waived, which were less than 0.01% |
3 | See Note 4 to Financial Statements. |
The accompanying notes are an integral part of the financial statements.
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Table of Contents
Meridian Equity Income Fund
Financial Highlights
For the Period Ended June 30, 2014 | ||||||||
Investor Class1 | Advisor Class1 | |||||||
Per Share Operating Performance | ||||||||
Net asset value, beginning of period | $ | 13.87 | $ | 13.87 | ||||
|
| |||||||
Income (loss) from investment operations: | ||||||||
Net investment income2 | 0.15 | 0.13 | ||||||
Net realized and unrealized gain | 0.79 | 0.78 | ||||||
|
| |||||||
Net increase from investment operations | 0.94 | 0.91 | ||||||
|
| |||||||
Less distributions to shareholders: | ||||||||
Distributions from net investment income . | (0.21 | ) | (0.20 | ) | ||||
|
| |||||||
Total distributions to shareholders | (0.21 | ) | (0.20 | ) | ||||
|
| |||||||
Net asset value, end of period | $ | 14.60 | $ | 14.58 | ||||
|
| |||||||
Total return | 6.87% | 3 | 6.69% | 3 | ||||
|
| |||||||
Ratios to Average Net Assets | ||||||||
Ratio of net investment income to average net assets after fees waived | 1.72% | 4 | 1.55% | 4 | ||||
Ratio of expenses to average net assets: | ||||||||
Before fees waived | 39.23% | 4 | 132.38% | 4 | ||||
After fees waived5 | 1.35% | 4 | 1.60% | 4 | ||||
Supplemental Data | ||||||||
Net Assets, End of Period (000’s) | $ | 45 | $ | 13 | ||||
Portfolio Turnover Rate | 35% | 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 4 to Financial Statements. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 36 | www.meridianfund.com |
Table of Contents
Meridian Small Cap Growth Fund
Financial Highlights
For the Period Ended June 30, 2014 | ||||||||||||
Legacy Class1 | Investor Class1 | Advisor Class1 | ||||||||||
Per Share Operating Performance | ||||||||||||
Net asset value, beginning of period | $ | 10.00 | $ | 10.00 | $ | 10.00 | ||||||
|
| |||||||||||
Income (loss) from investment operations: | ||||||||||||
Net investment loss2 | (0.04 | ) | (0.04 | ) | (0.06 | ) | ||||||
Net realized and unrealized gain | 1.69 | 1.69 | 1.69 | |||||||||
|
| |||||||||||
Net increase from investment operations | 1.65 | 1.65 | 1.63 | |||||||||
|
| |||||||||||
Less distributions to shareholders: | ||||||||||||
Distributions from net investment income | 0.00 | 0.00 | 0.00 | |||||||||
|
| |||||||||||
Total distributions to shareholders | 0.00 | 0.00 | 0.00 | |||||||||
|
| |||||||||||
Net asset value, end of period | $ | 11.65 | $ | 11.65 | $ | 11.63 | ||||||
|
| |||||||||||
Total return | 16.50% | 3 | 16.50% | 3 | 16.30% | 3 | ||||||
|
| |||||||||||
Ratios to Average Net Assets | ||||||||||||
Ratio of net investment loss to average net assets after fees waived | (0.61% | )4 | (0.70% | )4 | (1.01% | )4 | ||||||
Ratio of expenses to average net assets: | ||||||||||||
Before fees waived . | 2.35% | 4 | 3.63% | 4 | 2.99% | 4 | ||||||
After fees waived5 | 1.20% | 4 | 1.35% | 4 | 1.60% | 4 | ||||||
Supplemental Data | ||||||||||||
Net Assets, End of Period (000’s) | $ | 9,839 | $ | 2,135 | $ | 6,524 | ||||||
Portfolio Turnover Rate | 78% | 3 | 78% | 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 4 to Financial Statements. |
The accompanying notes are an integral part of the financial statements.
Meridian Funds | 37 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
For the Year Ended June 30, 2014
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. |
Effective November 15, 2013, the Growth Fund, Contrarian Fund, and Equity Income Fund offers three share classes: Legacy Class shares, Investor Class shares and Advisor Class shares. Effective March 1, 2014, Legacy Class shares are not offered to the public, except under certain limited circumstances. Effective March 1, 2014, Institutional Class shares were renamed Investor Class shares and are available to certain eligible investors. Advisor 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 and Retirement Class shares are also subject to certain expenses related to the distribution of these shares.
The Small Cap Growth Fund commenced operations on December 16, 2013 and offers the same share classes discussed above.
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.
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”).
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 securities valued using significant 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 or related securities in both active and inactive markets, 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).
Meridian Funds | 38 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
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 June 30, 2014 is as follows:
Valuation Inputs | Growth Fund | Contrarian Fund | Equity Income Fund | Small Cap Growth Fund | ||||||||||||
Level 1 - Quoted Prices* | $ | 1,891,879,255 | $ | 706,904,908 | $ | 33,082,817 | $ | 16,618,538 | ||||||||
Level 2 - Other Significant Observable Inputs | — | — | — | — | ||||||||||||
Level 3 - Significant Unobservable Inputs | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Market Value of Investments | $ | 1,891,879,255 | $ | 706,904,908 | $ | 33,082,817 | $ | 16,618,538 | ||||||||
|
|
|
|
|
|
|
|
* | Level 1 investments are comprised of common stock with industry classifications as defined on the Schedule of Investments. |
During the fiscal year ended June 30, 2014 there were no reportable transfers between levels.
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. | 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. Expenses which cannot be directly attributed to the Funds are apportioned among all Funds in the Trust based on average net assets or the number of shareholder accounts of each Fund. |
e. | Use of Estimates: The preparation of financial statements in accordance with accounting principals generally accepted in the United States (“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. |
f. | 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. |
g. | 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. |
h. | 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.
i. | 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 |
Meridian Funds | 39 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
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. |
2. | Capital Shares Transactions: Transactions in capital shares for were as follows: |
Year Ended June 30, 20141 | Year Ended June 30, 2013 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Growth Fund: | ||||||||||||||||
Legacy Class | ||||||||||||||||
Shares sold | 10,014,988 | $ | 393,045,340 | 5,089,627 | $ | 222,874,783 | ||||||||||
Shares issued from reinvestment of distributions | 16,379,845 | 581,156,891 | 7,664,279 | 308,104,009 | ||||||||||||
Redemption fees | — | 57,692 | — | 78,376 | ||||||||||||
Shares redeemed | (20,688,964 | ) | (804,765,033 | ) | (20,199,677 | ) | (892,551,886 | ) | ||||||||
|
|
|
| |||||||||||||
Net increase/(decrease) | 5,705,869 | $ | 169,494,890 | (7,445,771 | ) | $ | (361,494,718 | ) | ||||||||
Investor Class | ||||||||||||||||
Shares sold | 544,259 | $ | 20,321,746 | — | $ | — | ||||||||||
Redemption fees | — | 3,821 | — | — | ||||||||||||
Shares redeemed | (47,960 | ) | (2,225,053 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 496,299 | $ | 18,100,514 | — | $ | — | ||||||||||
Advisor Class | ||||||||||||||||
Shares sold | 146,597 | $ | 5,320,397 | — | $ | — | ||||||||||
Redemption fees | — | 1,301 | — | — | ||||||||||||
Shares redeemed | (16,577 | ) | (606,556 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 130,020 | $ | 4,715,142 | — | $ | — | ||||||||||
|
|
|
| |||||||||||||
Contrarian Fund: | ||||||||||||||||
Legacy Class | ||||||||||||||||
Shares sold | 241,010 | $ | 10,132,026 | 377,414 | $ | 12,805,749 | ||||||||||
Shares issued from reinvestment of distributions | 134,284 | 5,700,050 | 67,213 | 2,219,386 | ||||||||||||
Redemption fees | — | 10,129 | — | 2,031 | ||||||||||||
Shares redeemed | (2,512,845 | ) | (105,721,357 | ) | (4,011,043 | ) | (133,725,786 | ) | ||||||||
|
|
|
| |||||||||||||
Net decrease | (2,137,551 | ) | $ | (89,879,152 | ) | (3,566,416 | ) | $ | (118,698,620 | ) | ||||||
Investor Class | ||||||||||||||||
Shares sold | 34,399 | $ | 1,500,479 | — | $ | — | ||||||||||
Shares issued from reinvestment of distributions | 1 | 54 | — | — | ||||||||||||
|
|
|
| |||||||||||||
Net increase | 34,400 | $ | 1,500,533 | — | $ | — | ||||||||||
Advisor Class | ||||||||||||||||
Shares sold | 10,182 | $ | 438,766 | — | $ | — | ||||||||||
Shares issued from reinvestment of distributions | 1 | 39 | — | — | ||||||||||||
Shares redeemed | (18 | ) | (1,750 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 10,165 | $ | 437,055 | — | $ | — | ||||||||||
|
|
|
|
Meridian Funds | 40 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
Year Ended June 30, 20141 | Year Ended June 30, 2013 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Equity Income Fund: | ||||||||||||||||
Legacy Class | ||||||||||||||||
Shares sold | 53,466 | $ | 735,117 | 44,994 | $ | 525,065 | ||||||||||
Shares issued from reinvestment of distributions | 36,708 | 494,457 | 57,322 | 626,539 | ||||||||||||
Redemption fees | — | 542 | — | — | ||||||||||||
Shares redeemed | (107,442 | ) | (1,469,985 | ) | (650,572 | ) | (7,187,267 | ) | ||||||||
|
|
|
| |||||||||||||
Net decrease | (17,268 | ) | $ | (239,869 | ) | (548,256 | ) | $ | (6,035,663 | ) | ||||||
Investor Class | ||||||||||||||||
Shares sold | 3,098 | $ | 43,105 | — | $ | — | ||||||||||
Shares issued from reinvestment of distributions | 11 | 148 | — | — | ||||||||||||
|
|
|
| |||||||||||||
Net increase | 3,109 | $ | 43,253 | — | $ | — | ||||||||||
Advisor Class | ||||||||||||||||
Shares sold | 885 | $ | 12,285 | — | $ | — | ||||||||||
Shares issued from reinvestment of distributions | 11 | 145 | — | — | ||||||||||||
Redemption fees | — | 2 | — | — | ||||||||||||
Shares redeemed | (13 | ) | (181 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 883 | $ | 12,251 | — | $ | — | ||||||||||
|
|
|
| |||||||||||||
Small Cap Growth Fund: | ||||||||||||||||
Legacy Class | ||||||||||||||||
Shares sold | 844,877 | $ | 8,575,976 | — | $ | — | ||||||||||
Shares redeemed | (339 | ) | (3,739 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 844,538 | $ | 8,572,237 | — | $ | — | ||||||||||
Investor Class | ||||||||||||||||
Shares sold | 183,546 | $ | 1,977,647 | — | $ | — | ||||||||||
Shares redeemed | (241 | ) | (2,514 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 183,305 | $ | 1,975,133 | — | $ | — | ||||||||||
Advisor Class | ||||||||||||||||
Shares sold | 606,032 | $ | 6,471,230 | — | $ | — | ||||||||||
Redemption fees | — | 588 | — | — | ||||||||||||
Shares redeemed | (45,099 | ) | (477,276 | ) | — | — | ||||||||||
|
|
|
| |||||||||||||
Net increase | 560,933 | $ | 5,994,542 | — | $ | — | ||||||||||
|
|
|
|
1 | 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. |
Meridian Funds | 41 | www.meridianfund.com |
Table of Contents
Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
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 year ended June 30, 2014, were as follows: |
Purchases | Proceeds from Sales | |||||||
Growth Fund | $ | 1,871,400,141 | $ | 2,309,266,727 | ||||
Contrarian Fund | 437,258,636 | 553,849,734 | ||||||
Equity Income Fund | 10,800,274 | 11,265,011 | ||||||
Small Cap Growth Fund | 22,475,096 | 7,861,738 |
4. | 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.
Significant Fund ownership: Prior to his death on February 16, 2012, Richard F. Aster, Jr. owned approximately 96% of the Previous Investment Adviser. In connection with his death, Mr. Aster’s ownership interest in the Adviser, among other assets, was transferred (the “Transfer”) to a trust (the “Trust”). As of June 30, 2014, the Trust owned 75.30% of Equity Income Fund.
From time to time, the Funds may have individual shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Funds. In this regard, as of June 30, 2014 a single shareholder owned 75.30% of the Equity Income Fund Legacy Class, and the Adviser owned 82.84% and 23.54% of the Advisor Class and Investor Class, respectively. Two advisers to the Small Cap Growth Fund each owned 11.84% of the Fund, and two shareholders each owned 5.43%.
Management Fees: Under the Investment Management Agreement, the Adviser receives the following fees for providing certain investment management and other services necessary for managing each Fund. The fee is paid monthly in arrears and calculated based on that month’s daily average net assets.
Growth Fund: | Contrarian and Small Cap Growth Funds: | |||||||||||
Average Daily Net Assets | Investment Management Fee | Average Daily 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 | % |
Distribution Plan for Advisor shares: Each Fund has entered into and adopted a Distribution Plan for Advisor Class shares. Under the Distribution Plan, the Funds may pay Destra Capital Investments LLC (the “Distributor”), an affiliate of the Adviser, and/or eligible financial intermediaries a fee for services and expenses related to the sale and distribution of the Funds’ Advisor Class at an annual rate of up to 0.25% of average daily net assets for Advisor Class Shares.
Shareholder Servicing Plan for Investor and Advisor Class shares: Each Fund has entered into and adopted a Shareholder Services Plan for Investor Class and Advisor Class shares. Under the Shareholder Services Plan, Destra
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Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
Capital Investments LLC may be paid up to 0.25% of the average daily net assets attributable to the Investor Class and Advisor Class of the Funds, for personal/liaison and related shareholder servicing and support services. With respect to the Contrarian and Small Cap Growth Funds, the Board has determined that the Investor Class and Advisor Class will pay 0.05% of the average daily net assets.
Waivers and Reimbursements of Expenses: The Adviser voluntarily agreed to waive its investment advisory fees and reimburse operating expenses, to the extent that total annual operating expenses for the Funds exceeds the expense limitations listed below. With respect to these limits, the Adviser waived the fees listed below during the year ended June 30, 2014.
Expense Limitation | Total Waivers and Reimbursements for the year ended 06/30/14 | |||||||
Growth Fund | ||||||||
Investor Class | 1.30 | % | $ | — | ||||
Advisor Class | 1.55 | % | $ | 7,178 | ||||
Contrarian Fund | ||||||||
Investor Class | 1.35 | % | $ | 8,032 | ||||
Advisor Class | 1.60 | % | $ | 8,762 | ||||
Equity Income Fund | ||||||||
Legacy Class | 1.25 | % | $ | 36,902 | ||||
Investor Class | 1.35 | % | $ | 8,647 | ||||
Advisor Class | 1.60 | % | $ | 8,937 | ||||
Small Cap Growth Fund | ||||||||
Legacy Class | 1.20 | % | $ | 51,191 | ||||
Investor Class | 1.35 | % | $ | 11,972 | ||||
Advisor Class | 1.60 | % | $ | 26,145 |
For a period not to exceed three years from the date on which a waiver or reimbursement of expenses in excess of the expense limitation is made by the Adviser, the Funds will carry forward, and may repay the Adviser such amounts; provided the Funds are able to effect such reimbursement and maintain the expense limitation.
At June 30, 2014, the balance of carried forward recoupable expenses along with the year of expiration for each Fund and Class of shares were as follows:
Expiration June 30, | ||||||||||||
2015 | 2016 | 2017 | ||||||||||
Growth Fund | — | — | $ | 7,178 | ||||||||
Contrarian Fund | — | — | 16,794 | |||||||||
Equity Income Fund | $ | 52,027 | $ | 75,932 | 54,486 | |||||||
Small Cap Growth Fund | — | — | 89,308 |
Subject to the approval of the Board, the Funds may repay the Adviser the amount of its reimbursement for the Funds for up to three years following the reimbursement to the extent the Funds’ expenses drop below the expense limitations, after giving effect to repayment by the Fund. Either the Fund or the Adviser can modify or terminate this arrangement after one year from the date of the current prospectus.
5. | Directors and Officers: Certain Directors and/or Officers of the Funds are also Directors and/or Officers of the Adviser. Interested Directors and Officers of the Funds who are 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. |
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Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
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.
6. | 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 | — | — | — |
7. | 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 fiscal year ended June 30, 2014, the Funds did not incur any interest or penalties. |
Permanent differences, incurred during the year ended June 30, 2014, resulting from differences in book and tax accounting have been reclassified at year end to undistributed net investment income and accumulated realized gain/(loss) as follows:
(Decrease) Paid-in-Capital | Increase/(Decrease) Undistributed Net Investment Income/(Loss) | Increase/(Decrease) Accumulated Realized Gain/(Loss) | ||||||||||
Growth Fund | $ | — | | $ | 6,934,406 | | $ | (6,934,406 | ) | |||
Contrarian Fund | (40,489 | ) | 483,175 | (442,686 | ) | |||||||
Equity Income Fund | — | (20,277 | ) | 20,277 | ||||||||
Small Cap Growth Fund | (1,249 | ) | 49,643 | (48,394 | ) |
The aggregate cost of investments, unrealized appreciation and depreciation, for federal income tax purposes, at June 30, 2014 is as follows:
Aggregate Cost | Aggregate Gross Unrealized Appreciation | Aggregate Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||||||
Growth Fund | $ | 1,668,934,767 | | $ | 264,989,992 | | $ | (42,045,504 | ) | $ | 222,944,488 | | ||||
Contrarian Fund | 549,144,501 | 161,022,567 | (3,262,160 | ) | 157,760,407 | |||||||||||
Equity Income Fund | 24,991,225 | 8,151,295 | (59,703 | ) | 8,091,592 | |||||||||||
Small Cap Growth Fund | 15,745,975 | 1,457,109 | (584,546 | ) | 872,563 |
Components of Accumulated Earnings (Losses) on a Tax Basis | ||||||||||||||||
Growth Fund | Contrarian Fund | Equity Income Fund | Small Cap Growth Fund | |||||||||||||
Undistributed ordinary income | $ | 41,915,365 | | — | $ | 439,882 | | $ | 1,084,222 | | ||||||
Capital loss carry forward | — | — | (356,142 | ) | — | |||||||||||
Undistributed long-term capital gains | 110,640,307 | $ | 96,459,038 | — | — | |||||||||||
Unrealized appreciation/(depreciation) | 222,944,488 | 157,760,407 | 8,091,592 | 872,563 | ||||||||||||
Qualified late year deferred losses | — | (39,969 | ) | (100,753 | ) | — | ||||||||||
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| |||||||||
Total Accumulated Earnings/(Losses) | 375,500,160 | 254,179,476 | 8,074,579 | 1,956,785 | ||||||||||||
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Meridian Fund, Inc.
Notes to Financial Statements (continued)
For the Year Ended June 30, 2014
The differences between book and tax-basis unrealized appreciations are attributable to the tax deferral of losses on wash sales and investment adjustments in partnerships and real estate investment trusts.
The Contrarian Fund and Equity Income Fund utilized capital loss carryovers of $56,006,510 and $2,361,828, respectively.
As of June 30, 2014 the Equity Income Fund had a capital loss carry forward of $356,142 available to offset future realized capital gains through 2018.
Under the Regulated Investment Company Modernization Act of 2010, the eight-year limit on the carry forward and use of capital losses was eliminated and capital losses incurred by the Funds after June 30, 2011 will not be subject to expiration. In addition, losses incurred after June 30, 2011 will retain their character as either a short-term or long-term capital loss on the first day of the next taxable year and must be utilized prior to the losses incurred in pre-enactment taxable years.
8. | Other Matters: As of April 9, 2010, the Investment 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 Investment 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 Investment 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 Investment 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. |
The Investment 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 Investment Adviser, and not the Meridian Funds. While an outcome regarding the complaint is unknown at this time, the Investment 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.
9. | 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. |
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Meridian Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Meridian Growth Fund, Meridian Contrarian Fund, Meridian Equity Income Fund and Meridian Small Cap Growth Fund (constituting Meridian Fund, Inc., hereafter referred to as the “Funds”) at June 30, 2014, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
August 20, 2014
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Meridian Fund, Inc.
Information About the Directors and Officers
The individuals listed below serve as directors or officers of Meridian Fund, Inc. (the “Meridian Funds”). Each director of the Meridian Funds serves until a successor is elected and qualified or until resignation. Each officer of the Meridian Funds is elected annually by the Board of Directors. The address of all officers and directors is 100 Fillmore Street, Suite 325, Denver, CO 80206. The Meridian Funds’ Statement of Additional Information (SAI) includes more information about the Directors. To request a free copy, call Meridian at 1-800-446-6662.
Interested Directors* | Positions(s) Held with Fund: | Length of Service (Beginning Date) | Principal Occupation(s) During Past 5 Years | Number of Portfolios Overseen | Other Directorships | |||||
Michael Stolper* (69) | Director | Indefinite term since May 3, 1985 | President, Stolper & Company, Inc. (an investment adviser), September 1975 to present; Managing Director, Windowpane Advisors, LLC (an investment adviser), January 1, 2005 to present; Trustee, Ewing Marion Kauffman Foundation, March 2010 to present | 4 | Window Pane Funds (one portfolio) |
* | Mr. Stolper is treated as an “interested” person of the Funds, as such term is defined in the 1940 Act, because, as a result of his prior ownership interest in Aster Investment Management, Inc. (the “Previous Investment Adviser”, the previous investment adviser to the Meridian Equity Income Fund, Meridian Growth Fund, and Meridian Contrarian Fund). |
Non-Interested Directors | Positions(s) Held with Fund: | Length of Service (Beginning Date) | Principal Occupation(s) During Past 5 Years | Number of Portfolios Overseen | Other Directorships | |||||
John S. Emrich, CFA (46) | Director | Indefinite term since October 6, 2010 | Private Investor, January 2011 to present; Co-Founder and Portfolio Manager, Ironworks Capital Management (an investment adviser), April 2005 to December 2010; Member and Manager, Iroquois Valley Farms, LLC, June 2012 to present. | 4 | None | |||||
Michael S. Erickson (62) | Director | Indefinite term since May 3, 1985 | Private Investor, August 2007 to present | 4 | None | |||||
James Bernard Glavin (79) | Director and Chairman of the Board | Indefinite term since May 3, 1985 | Retired; previously Chairman of the Board, Orchestra Therapeutics, Inc. | 4 | None | |||||
Ronald Rotter (71) | Director | Indefinite term since May 2, 2007 | Private Investor, January 2008 to present; Retired | 4 | None |
Officers | Position(s) Held with Fund: | Length of Service | Principal Occupation(s) During Past 5 Years | |||
David Corkins (47) | President (Principal Executive Officer) | Indefinite; Since September 5, 2013 | Co-Founder, Principal and Portfolio Manager, Arrowpoint Asset Management, LLC | |||
Rick Grove (45) | Vice President, Secretary and Chief Compliance Officer | Indefinite; Since September 5, 2013 | Chief Operating Officer and Chief Compliance Officer, Arrowpoint Asset Management, LLC | |||
Derek Mullins (40) | Chief Financial Officer (Principal Financial Officer) and Treasurer | Indefinite; Since September 5, 2013 | Director of Operations, Arrowpoint Asset Management, LLC | |||
Katie Jones (30) | Assistant Treasurer | Indefinite; Since August 12, 2014 | Controller, Arrowpoint Asset Management, LLC; formerly, Assistant Controller and Alternative Investment Accounting Supervisor, ALPS Fund Services |
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Meridian Fund, Inc.
2014 Tax Notice to Shareholders (Unaudited)
The information set forth below is for each Fund’s fiscal year as required by federal laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in early 2015. Please consult your tax advisor for proper treatment of this information.
For the period July 1, 2013 to June 30, 2014, the Funds reported the following terms with regard to distributions paid during the period. All information is based on financial information available as of the date of this annual report and, accordingly, is subject to change. For each item, it is the intention of each Fund to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
Pursuant to Internal Revenue Code Section 852(b)(3), the Growth Fund and Contrarian Fund reported $556,718,750 and $3,011,519, respectively, as long-term capital gain distribution for the year ended June 30, 2014.
Pursuant to Internal Revenue Code Section 854(b)(2), the Funds listed below report a percentage of their ordinary income dividends distributed during the year ended June 30, 2014 as qualifying for the corporate dividends-received deduction:
Growth Fund | 14.14 | % | ||
Contrarian Fund | 100.00 | % | ||
Equity Income Fund | 100.00 | % | ||
Small Cap Growth Fund | 0.00 | % |
Pursuant to Section 1 (h)(11) of the Internal Revenue Code, the Funds listed below report the following amounts of their income dividends paid during the year ended June 30, 2014 as qualified dividend income (QDI):
Growth Fund | 14.85 | % | ||
Contrarian Fund | 100.00 | % | ||
Equity Income Fund | 100.00 | % | ||
Small Cap Growth Fund | 0.00 | % |
U.S. Government interest represents the amount of interest that was derived from direct U.S. Government obligations and distributed during the fiscal year. This amount is reflected as a percentage of total ordinary income distributions (the total of short-term capital gain and net investment income distributions). Generally, interest from direct U.S. Government obligations is exempt from state income tax. However, for residents of California, Connecticut and New York, the statutory threshold requirements were not satisfied to permit exception of these amounts from state income for the Funds.
U.S. Government interest:
Growth Fund | 0.00 | % | ||
Contrarian Fund | 0.06 | % | ||
Equity Income Fund | 0.00 | % | ||
Small Cap Growth Fund | 0.00 | % |
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Meridian Fund, Inc.
Other Information (Unaudited)
June 30, 2014
Proxy Voting Guidelines
The Adviser is responsible for exercising the voting rights associated with the securities purchased and held by the Funds. A description of the policies and procedures that the Adviser uses in fulfilling this responsibility and information regarding how those proxies were voted during the most recent 12-month period ended June 30 are available without charge upon request by calling toll free (800) 446-6662. These items are also available on the Securities and Exchange Commission’s website at http://www.sec.gov.
Quarterly Portfolio Disclosure
The Adviser files a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q. The complete listing (i) is available on the Commission’s website; (ii) may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; and (iii) will be made available to shareholders upon request by calling (800) 446-6662. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Contact Us
By phone from 9:00 AM to 6:00 PM EST on any business day at the following if you are an:
Individual Investor: (800) 446-6662 | Institutional Investor: (303) 398-2929 | Financial Advisor: (877) 796-3434 |
Key Information
Investment Adviser
Arrowpoint Asset Management LLC
100 Fillmore Street, Suite 325
Denver, CO 80206
Distributor
Destra Capital Investments LLC
901 Warrenville Road, Suite 15
Lisle, IL 60532
Administrator, Transfer Agent and Disbursing Agent
BNY Mellon Investment Servicing (US) Inc.
760 Moore Road
King of Prussia, PA
Custodian
The Bank of New York Mellon
2 Hanson Place, 7th Floor
Brooklyn, NY 11217
Legal Counsel
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, CO 80202
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
Three Embarcadero Center
San Francisco, CA 94111
Directors and Officers
Directors
James B. Glavin, Chairman
John Emrich
Michael S. Erickson
Ronald Rotter
Michael Stolper
Officers
David Corkins, President
Derek Mullins, Treasurer
Richard Grove, Vice President, Secretary &
Chief Compliance Officer
Katie Jones, Assistant Treasurer
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Item 2. | Code of Ethics. |
(a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
(c) | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
(d) | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
(f) | A copy of the registrant’s code of ethics is filed as Exhibit 12(a)(1) to this report. |
Item 3. | Audit Committee Financial Expert. |
As of the end of the period covered by the report, the registrant’s board of directors has determined that James Glavin is qualified to serve as an audit committee financial expert serving on its audit committee and that he is “independent,” as defined by Item 3 of Form N-CSR.
Item 4. | Principal Accountant Fees and Services. |
Audit Fees
(a) | The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $122,800 in 2014 and $99,800 in 2013. |
Audit-Related Fees
(b) | The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $0 in 2014 and $0 in 2013. |
Tax Fees
(c) | The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $31,220 in 2014 and $22,665 in 2013. |
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All Other Fees
(d) | The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 in 2014 and $0 in 2013. |
(e)(1) | Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
PRE-APPROVAL OF AUDIT AND PERMITTED NON-AUDIT SERVICES PROVIDED TO THE COMPANY
1. | Pre-Approval Requirements. The Committee shall pre-approve all auditing services and permissible non-audit services (e.g., tax services) to be provided to the Company by the Auditor, including the fees therefore. The Committee may delegate to one or more of its members the authority to grant pre-approvals. In connection with such delegation, the Committee shall establish pre-approval policies and procedures, including the requirement that the decisions of any member to whom authority is delegated under this section shall be presented to the full Committee at each of its scheduled meetings. |
2. | De Minimis Exception to Pre-Approval: Pre-approval for a permitted non-audit service shall not be required if: |
a. | the aggregate amount of all such non-audit services is not more than 5% of the total revenues paid by the Company to the Auditor in the fiscal year in which the non-audit services are provided; |
b. | such services were not recognized by the Company at the time of the engagement to be non-audit services; and |
c. | such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by one or more members of the Committee to whom authority to grant such approvals has been delegated by the Committee. |
Additionally, the Committee shall pre-approve the Auditor’s engagements for non-audit services with the Adviser and any affiliate of the Adviser that provides ongoing services to the Company in accordance with the foregoing, if the engagement relates directly to the operations and financial reporting of the Company, unless the aggregate amount of all services provided constitutes no more than 5% of the total amount of revenues paid to the Auditor by the Company, the Adviser and any affiliate of the Adviser that provides ongoing services to the Company during the fiscal year in which the services are provided that would have to be pre-approved by the Committee pursuant to this paragraph (without regard to this exception).
PROHIBITED SERVICES
The Committee shall confirm with the Auditor engaged to perform the audit of the Company that the Auditor is not performing contemporaneously any of the following non-audit services for the Company, the Adviser, or any affiliates of the Company or Adviser:
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1. | bookkeeping or other services related to the accounting records or financial statements of the Company; |
2. | financial information systems design and implementation; |
3. | appraisal or valuation services, fairness opinions, or contribution-in-kind reports; |
4. | actuarial services; |
5. | internal audit outsourcing services; |
6. | management functions or human resources; |
7. | broker or dealer, investment adviser, or investment banking services; |
8. | legal services and expert services unrelated to the audit; and |
9. | any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible. |
The Auditor is responsible for informing the Committee of whether it believes that a particular service is permissible or prohibited pursuant to applicable regulations and standards.
(e)(2) | The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: |
(b) N/A
(c) N/A
(d) N/A
(f) | The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty percent. |
(g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 in 2014 and $0 in 2013. |
(h) | Not applicable. |
Item 5. | Audit Committee of Listed registrants. |
Not applicable.
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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. |
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Item 12. Exhibits.
(a)(1) | Code of Ethics that is the subject of disclosure required by Item 2 is attached hereto. |
(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. |
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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 | September 3, 2014 |
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)* | David J. Corkins | |||
/s/ David J. Corkins | ||||
Principal Executive Officer and President |
Date | September 3, 2014 |
By (Signature and Title)* | /s/ Derek J. Mullins | |||
Derek J. Mullins | ||||
Principal Financial Officer and Treasurer |
Date | September 3, 2014 |
* Print the name and title of each signing officer under his or her signature.