Meridian Funds, managed by ArrowMark Partners, released its second-quarter 2026 investor letter for “Meridian Small Cap Growth Fund”. A copy of the letter can be downloaded here. The U.S. market saw a strong rally in the second quarter, fueled by easing geopolitical tensions, falling oil prices, and robust corporate earnings. Growth stocks, especially in technology and healthcare, led the charge, supported by AI-related investments from hyperscalers that added momentum. Meanwhile, traditional safe havens like gold declined. In this context, the Meridian Small Cap Growth Fund (the “Fund”) achieved a 21.54% return for the quarter ending June 30, 2026. This lagged behind its benchmark, the Russell 2000 Growth Index, which gained 25.71%, due to factor and style headwinds—as high-beta and momentum stocks soared, its lower-volatility, quality-focused holdings underperformed. The Fund continues to prioritize quality businesses, risk management, and downside protection, with portfolio adjustments driven by strategic allocation. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Meridian Small Cap Growth Fund highlighted Hinge Health, Inc. (NYSE:HNGE). Hinge Health, Inc. (NYSE:HNGE) is a healthcare technology company that specializes in musculoskeletal care. On July 29, 2026, Hinge Health, Inc. (NYSE:HNGE) closed at $74.06 per share, reflecting a market capitalization of $5.73 billion. Hinge Health, Inc. (NYSE:HNGE) posted a one-month return of -11.89%, while its shares gained 64.76% over the past 52 weeks.
Meridian Small Cap Growth Fund stated the following regarding Hinge Health, Inc. (NYSE:HNGE) in its Q2 2026 investor update:
“Hinge Health, Inc. (NYSE:HNGE) operates a technology-enabled musculoskeletal care platform that pairs its wearable Enso device and AI-driven care with access to clinicians, serving self-insured employers and health plans. We own it for its dominant position and high win rates in a large, underpenetrated market, improving per-member economics, and a widening product suite. Shares rose sharply during the quarter after a substantial earnings beat and a large upward revision to full-year guidance, driven by accelerating bookings as clients added more eligible lives and yields improved. Management reinforced the momentum at its inaugural investor day with new long-term growth and margin targets and a strong early reception for its new migraine product, and the stock advanced despite the market’s broader wariness toward digital health.”
Hinge Health, Inc. (NYSE:HNGE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 48 hedge fund portfolios held Hinge Health, Inc. (NYSE:HNGE) at the end of the first quarter, up from 43 in the previous quarter. While we acknowledge the risk and potential of Hinge Health, Inc. (NYSE:HNGE) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Hinge Health, Inc. (NYSE:HNGE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Hinge Health, Inc. (NYSE:HNGE) and shared the list of best mid-cap healthcare stocks that are being highly favored by hedge funds. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
