The information contained on this site is intended for institutional investors only, and is published strictly for informational purposes only without regard to the investment objective, financial situation or specific needs of any particular investor. The information is not intended for use by institutional investors in a jurisdiction where distribution or purchase is not authorized.
An institutional investor is one that falls within one or more of the following categories:
If you do not fall within at least one of the above categories you should not access the information contained in the site.
Baron Capital Management, Inc. makes reasonable efforts to ensure the material on the site is as accurate and timely as possible and that disruptions of service are minimal, Baron Capital Management, Inc. makes no warranty or guarantee concerning the availability of this site or the services or the accuracy of the information on it. In addition, the information contained on the site is in no way intended to constitute investment advice, an offer to sell, or a recommendation of any security or investment product. In fact, the products described herein may not be available to, or suitable for, all investors. You should consider, if appropriate, obtaining independent professional advice before making an investment decision. Please consider the charges, risks, expenses and investment objectives carefully before investing. Nothing on this site is intended to constitute legal or tax advice.
Please keep in mind that the opinions and views expressed through the content and commentaries published on the site are just that - opinions and views - and that they are published on the site for informational purposes only. In addition, views and opinions are based on the information available at the time and may not necessarily be shared by Baron Capital Management, Inc., or its employees, in general. As the investing environment changes, so could this information, and Baron Capital Management, Inc. has no responsibility to update it.
Past performance is not a guarantee of future performance. Investment results and principal value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Investors should be aware of the additional risks associated with investments in non-diversification, undervalued or overlooked companies and investments in specific industries. Additional risks may include those associated with investing in foreign securities, emerging markets, and companies with relatively small market capitalizations.
By selecting “I Agree” below, you confirm that you are an institutional investor or consultant to an institutional investor.
Baron offers accredited non-U.S. investors and qualified tax-exempt U.S. investors a range of options for investing in the equity market. Our investment vehicles include SICAV funds, separate accounts, collective investment trusts, and Baron USA Partners Fund.
This website may not be suitable for everyone, and if you are at all unsure whether an investment product referenced on this website will meet your individual needs, please seek professional advice before proceeding further with such product. Nothing on this website is, or is intended to be, an offer, advice, or an invitation to buy or sell any investments, in any jurisdiction where, or to anyone whom it would be unlawful to do so. By clicking “I Agree” below you acknowledge that you have read and understood this important information. Information on this website is issued by Baron Capital, Inc.
For any queries or questions coming from EU/EEA potential investors, please contact Arnaud Gérard, CFA, Managing Director FundRock Distribution at Arnaud.GERARD@Fundrock.com or call +352691992088.
For information on Baron Capital or any queries or questions coming from non-EU/EEA potential investors, please contact Stephen Millar, VP, Head of EMEA Institutional Sales at firstname.lastname@example.org or call +44(0)7769-958822.
By selecting “I Agree” below, you confirm that you are an accredited non-U.S. investor or a qualified tax-exempt U.S. investor.
The link you have selected is not available within the Institution user experience. You will be switched to view this website as a Financial Advisor.
When you wish to view strategies again, click an 'Institution' link within the 'View As' menu or 'Strategies' in the footer.
Thank you for your email. We will respond as soon as possible.
as of 09/30/23
The quarter began with a steady dose of good news, and July continued the market rally from the first six months of the year. Inflation slowed to around 3%, while growth and economic activity remained surprisingly strong. The probability of a soft landing was steadily increasing. That sentiment soured, however, as the prospects of continued high rates seemed more likely. Investors shifted assets into fixed income to take advantage of yields at levels not seen in more than 15 years. Adding to this possible “higher for longer” interest rate scenario, $90/barrel oil prices, the auto workers strike, the prospect of a government shutdown, and increasing geopolitical uncertainty set the context for a market pullback. The S&P 500 Index declined 3.27% in the period.
Baron Durable Advantage Fund declined modestly in the quarter. Communication Services and Financials investments contributed to performance. Information Technology, Industrials, and Consumer Discretionary positions declined the most. Meta Platforms, Inc. and Alphabet, Inc., respectively the top and third largest contributors, drove positive performance within Communication Services. Appreciation within the Financials sector was led by alternative asset manager Blackstone Inc. and specialty insurer Arch Capital Group Ltd. Weakness within IT was led by Microsoft Corporation and Monolithic Power Systems, Inc., respectively the top and second largest detractors. E-commerce behemoth Amazon.com, Inc. drove declines within the Consumer Discretionary sector.
We believe stock prices have two components to them: business fundamentals, which can be measured by revenues, earnings, and ultimately cash flows, and then a multiple that investors are willing to pay for those fundamentals. During the September quarter, our analysis suggests that at the portfolio level, the fundamentals of our businesses continue to improve with revenue and profit expectations rising, while the multiples of how much investors are willing to pay for these profits have taken another leg down, making our companies even more attractive in our view.
The businesses we own tend to have no financial leverage and are capital light – meaning that higher rates would not have a direct negative impact on their businesses. They are leaders in their industries and should benefit from customer consolidation of key vendors. They have what we believe are great management teams and offer critical solutions, which makes them sticky and gives them pricing power. We are optimistic about the long-term prospects of our investments and continue to search for new ideas while remaining patient and investing only when we believe target companies are trading at attractive prices relative to their intrinsic values.
as of 09/30/23
as of 09/30/23
When reviewing performance attribution on our portfolio, please be aware that we construct the portfolio from the bottom up, one stock at a time. Each stock is included in the portfolio if it meets our rigorous investment criteria. To help manage risk, we are aware of our sector and security weights, but we do not include a holding to achieve a target sector allocation or to approximate an index. Our exposure to any given sector is purely a result of our stock selection process.
as of 09/30/23
Baron Durable Advantage Fund (Institutional Shares) was down slightly in the third quarter, outperforming the S&P 500 Index by 272 basis points due to stock selection and, to a lesser extent, differences in sector weights.
Stock selection was positive across most sectors where the Fund had investments, led by those in Financials, Information Technology (IT), Communication Services, and Consumer Discretionary. Within Financials, meaningfully higher exposure to this better performing sector coupled with gains from specialty insurer Arch Capital Group Ltd. and alternative asset manager Blackstone Inc. accounted for about half of the outperformance in the period. Arch’s shares rose after reporting results that beat consensus expectations amid favorable industry conditions. For fiscal second quarter, net premiums written grew 28%, underwriting margins remained strong, and net investment income more than doubled. The operating ROE exceeded 20%, and book value per share grew 18%. Pricing trends in the property & casualty insurance market remain favorable, and higher interest rates are driving higher investment yields. Blackstone’s stock was up on the back of strong fundraising in a tough macroeconomic environment, moderating redemptions in its Blackstone Real Estate Income Trust retail fund vehicle, and momentum from its milestone AUM of $1 trillion. Investment decision support tools provider MSCI Inc., derivatives marketplace CME Group, Inc., and independent broker-dealer LPL Financial Holdings Inc. also contributed to relative gains in the sector.
Strength in IT was partly driven by the outperformance of Intuit Inc., the leading provider of accounting software for small businesses and tax preparation software for individuals and tax professionals. Intuit was the second largest contributor after reporting financial results that exceeded Street expectations, with 13% revenue growth and 22% EPS growth in the recently completed fiscal year. Management provided upbeat guidance for the next fiscal year that demonstrated confidence in the business momentum despite macroeconomic uncertainty. The Fund also benefited from its lack of exposure to benchmark heavyweight Apple Inc., whose shares were down double digits in the period, contributing approximately 65 basis points of relative gains.
Within Communication Services, the Fund’s overexposure to social network Meta Platforms, Inc. and search and online advertising leader Alphabet Inc. accounted for most of the outperformance in the sector. Meta was the largest contributor as advertising revenue rebounded thanks to strong adoption of newer advertising products like Instagram Reels and broader improvement in the digital advertising market. Alphabet was another top contributor, reflecting solid performance as well as continued product innovation in generative artificial intelligence that boosted investor sentiment after high initial doubt around ChatGPT competition. Retailer and cloud services provider Amazon.com, Inc. led the way in the Consumer Discretionary sector after reporting solid quarterly results, with Amazon Web Services growth and overall operating profit coming in ahead of Street expectations.
Lack of exposure to the top performing Energy sector was the only material detractor in the period, offsetting a portion of the above-mentioned gains.
Investors should consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus and summary prospectuses contain this and other information about the Funds. You may obtain them from the Funds’ distributor, Baron Capital, Inc., by calling 1-800-99BARON or visiting www.BaronFunds.com. Please read them carefully before investing.
The performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. Current performance may be lower or higher than the performance data quoted.
Risks:All investments are subject to risk and may lose value.
The discussion of market trends is not intended as advice to any person regarding the advisability of investing in any particular security. The views expressed on this page reflect those of the respective writer. Some of our comments are based on management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. Our views are a reflection of our best judgment at the time and are subject to change at any time based on market and other conditions and Baron has no obligation to update them
Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk.
The index performance is not fund performance; one cannot invest directly into an index.