TCW funds, an investment management company, released its “TCW Relative Value Large Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities ended the year on a positive note, with the S&P 500 Total Return (USD) increasing by 2.65% and achieving a remarkable 17.9% in 2025. The AI sector continued to thrive following Trump’s tariff announcements. While there are concerning indicators similar to the Dot-Com bubble, the underlying companies appear to be defying odds with technological advancements, strong financials, and reasonable valuations. The Fund (I share) returned 4.29% in the quarter compared to 3.81% for the Russell 1000 Value Index. YTD, the Fund delivered a return of 19.32% compared to 15.91% for the Index. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, TCW Relative Value Large Cap Fund highlighted Merck & Co., Inc. (NYSE:MRK) as one of its leading contributors. Merck & Co., Inc. (NYSE:MRK) is a leading multinational healthcare company that offers human health pharmaceutical for various areas. On April 06, 2026, Merck & Co., Inc. (NYSE:MRK) stock closed at $120.85 per share. One-month return of Merck & Co., Inc. (NYSE:MRK) was -5.48%, and its shares gained 21.07% over the past 52 weeks. Merck & Co., Inc. (NYSE:MRK) has a market capitalization of $285.83 billion.
TCW Relative Value Large Cap Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its fourth quarter 2025 investor letter:
“The best performing stocks in the quarter were Alphabet†, Intel (INTC; 2.69%**), and Merck & Co., Inc. (NYSE:MRK) (MRK; 2.70%**). Merck & Co. shares jumped after the company reported better than expected third quarter revenues. Management attributed the beat to cost cutting initiatives and strong sales of its pneumonia vaccine.”
Merck & Co., Inc. (NYSE:MRK) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 100 hedge fund portfolios held Merck & Co., Inc. (NYSE:MRK) at the end of the fourth quarter, up from 92 in the previous quarter. While we acknowledge the risk and potential of Merck & Co., Inc. (NYSE:MRK) 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 Merck & Co., Inc. (NYSE:MRK) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Merck & Co., Inc. (NYSE:MRK) and shared the list of best consistent dividend stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 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.
