AD Fund Management | June 2025 | Monthly Letter
Dear Partners/Future Partners,
I hope this note finds you well. As of the end of June 2025, AD Fund Management is up +62.35% (net) year-to-date. June was an exceptional month; I am extremely pleased with the results. Last month I said, “I believe in pushing the boundaries when you’re hot - we are hot right now,” and I’m glad we delivered. The focus now is protecting these gains.
The fund is currently running 0.39x net long (not beta-adjusted), and my focus is on being appropriately positioned for the next inevitable correction. I’m not bearish on the remainder of 2025 or 2026, but I do think we’re due for a short-term 3 - 5% correction at the index level around late August or September.
Most of the gains came from idiosyncratic opportunities this month, including Nektar Therapeutics ($NKTR). I’ll break down the trade under the position updates below. Luck played a big part in these gains - outcomes were binary, and I was on the right side this time. When you’re in a market flow state, you know it. Druckenmiller describes it as running hot / cold - there are stretches where everything clicks, but they don’t last forever.
Macro Thoughts
As anticipated in last month’s letter, oil spiked sharply in June. I won’t repeat the geopolitical play-by-play, plenty of others have that covered. What matters is this: the Middle East is fundamentally more stable with a strong Israel and a weakened Iran. That’s also positive for my people, the Kurds, who remain the key US and Israeli allies on the ground. Iran is now effectively defanged. What we watched happen to Russian military power in Ukraine is now happening to Iran, only at a much faster pace, driven by coordinated US and Israeli pressure.
Switching gears, I was struck by a recent Financial Times article: “Fears Over US Debt Load and Inflation Ignite Exodus from Long-Term Bonds.” Investors are pulling capital out of US long-term bond funds at the fastest pace since the 2020 Covid panic, largely on escalating worries over America’s unsustainable debt and persistent inflation. Nearly $11bn exited long-duration US bond funds in Q2, reversing several quarters of ~$20bn average inflows.
My contrarian instincts kicked in. $TLT is up 2%+ this month, and on the net the $TLT options positions are flat now after being down ~10%. The drawdown at the long end of the US Treasury curve is now the longest in history. The trend might not reverse for another year or two, but the risk/reward here is generational. I’ll keep pressing this trade with disciplined risk management.
Position Updates
1) LONG - AI Compute & Digital Infrastructure (Holdings: $NVDA, $AMD, $TSM, $SOXL)
The top-performing theme this month was semiconductors. $SOXL was the standout contributor. I plan to start taking profits around $30 level to gradually phase out of a triple-levered ETF, with a cost basis below $10 – it isn’t smart to buy triple levered ETFs unless your cost basis is extremely low, which is the case for the fund. Micron’s blowout Q3 earnings on June 26, highlighting record revenue, explosive high-bandwidth memory (HBM) growth, and a doubling of data center sales, fortified the positive re-rating across the AI semiconductor complex.
2) LONG - Platform Ecosystems (Holdings: $AAPL, $MSFT, $META)
Apple did not do well in the first half of 2025. I think it will do well in the second half of 2025.
3) LONG - Security & Healthcare Reformers (Holdings: $AXON, $OSCR, $UNH)
Oscar Health surged ~50% in June, driven by a confluence of regulatory optimism, and speculative interest. On June 18, shares jumped ~17% after the proposed Medicare Part E public option (Choose Medicare Act), which investors see as an acceleration in the addressable market and validation of Oscar’s digital-first model.
AXON is one of the best managed companies in the world, the team is delivering strong products and services – I hope the shares pullback a bit over the coming months, so I can add to the existing position.
4) LONG - Data, Credit & Financial Infra (Holdings: $FICO, $FNMA, $KKR, $HOOD)
FICO unveiled its FICO Score 10 BNPL and 10 T BNPL models, set to launch this fall, which for the first time integrate Buy‑Now‑Pay‑Later data into mainstream credit scoring. That innovation, affirmed by a joint Affirm study covering 500,000 users and followed by a ~4% stock rally, positions FICO at the forefront of data-rich consumer credit evolution. I think this is a net negative for BNPL customers - having greater insight into the customer balance sheet is a net positive for lenders.
Robinhood was the top performer in June. Invest America is a new policy initiative and nonprofit focused on giving every American child a government-funded investment account at birth, seeded with $1,000 and growing tax-advantaged until age 18. The aim is to narrow the wealth gap and foster early investing. I think this will be President Trump’s 2.0 administration’s greatest legacy – simply incredible. Robinhood is directly involved - its CEO joined the White House roundtable backing the initiative, and Robinhood has committed to providing the technology and infrastructure for these accounts.
5) LONG - Energy (Holdings: $TPL, $VST)
Vistra performed well in June. Investors are slowly but surely realizing the importance of natural gas and nuclear energy in these exciting times as data centers scale for AI and cloud.
6) LONG - Miscellaneous (Holdings: $IBIT, $ETH, $TLT, $NKTR, $ACHR, $JOBY)
I sold $ETH shares at the very top in June – pure luck and bought $IBIT (Bitcoin) and $ETH (Ethereum) long dated calls to add convexity to the position. Selling at the top is cool, but buying the calls on the very same day led to a 40% drawdown in $ETH calls.
After calling the $MEHCQ acquisition and realizing significant gains, I started looking for another opportunity in biotechnology, a sector where I still consider myself a tourist. While sharing my thoughts on $MEHCQ, I came across two Twitter/X accounts, who have a much deeper understanding of the space. I put the proceeds into Nectar Therapeutics $NKTR, driven by a Jefferies Group chart that shaped my expectations on outcomes.
Nektar shares more than doubled on June 24 following the Phase 2b REZOLVE‑AD trial for eczema drug rezpegaldesleukin, which met both primary and key secondary endpoints, boasting a 53–61% EASI improvement (vs. ~31% placebo) and a rapid itch-relief profile - with no uptick in common side effects like conjunctivitis.
7) SHORT – China Basket (Holdings: $FXI, $KWEB, $BABA, $JD, $PDD)
No updates.
8) SHORT – Gold and Junior Gold Miners (Holdings: $GLD, $GDXJ)
No updates.
9) SHORT – US Indices (Holdings: $SPY, $QQQ, $IWM)
July is historically a great month, since 2020 has never been in the red. I am keeping these positions and if indices rally, will add to them.
10) SHORT – High Beta and/or High Multiple Stocks (Holdings: $PLTR, $TSLA, $DG, $WING, $CAVA et al.)
The fund has a significant number of single-ticker shorts where $PLTR is the largest. I actively trade these positions. Some go down, some don’t. I don’t know, Palantir is trading at 90 P/S… Who’s still buying it?
11) SHORT – Europe/Asia (Holdings: $EWY, $EWG, $EWI, $EWS, $EWJ, $EWP, $GREK)
These indices are extended, and the weak dollar is one of the biggest factors. In the next correction, I have a hard time envisioning a scenario where $SPX drops 5% and for example $GREK that is up 50% YTD remains flat.
12) SHORT – Forex: EUR/USD
Euro has no place at the levels it’s at against the USD. If you zoom out, you’ll see the EUR is in a structural decline against the dollar since 2009. The move year-to-date is a countertrend move.
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I'm finalizing June’s letter in mid-July, as the NAV strike takes a couple of weeks. I turned 30 in July, marking over a decade of living in the US. Looking back, I feel incredibly fortunate - my family is healthy, I’m healthy, I graduated from one of the world’s best schools, worked at a top-tier real estate investment firm, and launched my own fund before 30.
I don’t dwell on the tough stretches; setbacks are inevitable when you take real risk. There were plenty of challenging, stressful days/weeks/months in the first third of my life, but things have a way of working out if you stick with it. Perseverance really does lead to light at the end of the tunnel. And finally, a belated happy birthday to the greatest country in the world.
Regards,
Arya