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.
If you are a non-U.S. investor or qualified tax-exempt U.S. investor interested in our non-U.S. investment products, please contact Stephen Millar, VP, Head of EMEA, Institutional Sales | +44(0)7769 958822 | email@example.com
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 09/30/21
For much of the past year and a half, equity markets have been in a steady upward trajectory following the steep decline at the onset of the pandemic. The third quarter of 2021 saw that trend level off notably as the Delta variant of COVID-19 spread across the globe, pressuring both the demand and supply of goods and services. This setback in the expected COVID-19 recovery timeline dragged stocks lower. The expected end of government fiscal and monetary support, inflationary concerns, and a pullback in corporate earnings growth also dampened market sentiment. The S&P 500 Index market notched a small positive return for the quarter, although much of the growth was driven by mega-cap technology companies. U.S. small-cap growth companies – as measured by the Russell 2000 Growth Index – were hit the hardest, finishing down 5.65%.
Against this backdrop, Baron Discovery Fund declined. Holdings within Communication Services, Consumer Staples, and Financials contributed. Second largest contributor S4 Capital Plc drove gains within Communication Services, and top contributor The Beauty Health Company drove appreciation within Consumer Staples. Insurance brokerage firm BRP Group, Inc. was the top performer within Financials. Investments within Health Care, Industrials, and Information Technology (IT) detracted the most. With both the second and third largest detractors – CareDx, Inc. and Inogen, Inc., respectively – within the sector, Health Care had a challenging quarter. Weakness within Industrials was led by top detractor Mercury Systems, Inc. Despite mixed performance, declines outweighed advances among investments within the IT sector.
While the Delta variant has certainly been a “speed bump” in the pace of the economic recovery, it is our belief that the U.S. economy is back on track and the economic impact of COVID-19 is mostly in the rearview mirror. As we look to the end of 2021 and into 2022, we continue to believe our portfolio companies are well positioned to benefit from the economic resurgence that we expect to come post-COVID-19. We have a large pipeline of innovative emerging growth companies that are trading at attractive valuations.
as of 09/30/21
as of 09/30/21
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 09/30/21
Baron Discovery Fund (Institutional Shares) declined 5.02% in the third quarter, yet modestly outperformed the Russell 2000 Growth Index by 63 basis points due to stock selection, differences in sector/sub-industry weights, and cash exposure in a down market.
Aside from cash, investments in Communication Services, Consumer Staples, and Health Care added the most value. Favorable stock selection in Communication Services was driven by global marketing services business S4 Capital plc and special-interest publisher Future plc, whose shares were up 31.1% and 14.8%, respectively, in the period. S4 was the second largest contributor due to recovering global advertising spend, continued M&A activity, and increasing investor awareness, while Future benefited from tailwinds to e-commerce in the company’s largest categories - technology, gaming, music, sports, home, and lifestyle. The Fund’s largest position in Consumer Staples, The Beauty Health Company, bolstered performance for a second consecutive quarter. Beauty Health was the top contributor after delivering an impressive beat and raise quarter and announcing new retail partnerships with Nordstrom and Ulta. Within Health Care, meaningfully lower exposure to biotechnology stocks, which were down double digits in the index, contributed approximately 80 basis points to relative performance. Strength in the sector also came from genomic diagnostics company Veracyte, Inc. and health software solutions provider Definitive Healthcare Corp. Veracyte’s shares were up after reporting an earnings beat and raising full-year guidance, driven by growth in thyroid and prostate cancer tests. Definitive Healthcare’s stock rose sharply after the company’s IPO was well received by investors.
Underperformance of investments in Industrials, Materials, and Real Estate detracted the most from relative results. Several holdings hampered performance in Industrials, led by defense electronics solutions provider Mercury Systems, Inc. and composite wind blade manufacturer TPI Composites, Inc. Mercury was the largest detractor after the company took down full-year guidance due to some program delays on ship-based radar, fighter jet electronics, missile defense systems, and foreign military sales. Similarly, TPI cut annual guidance due to higher raw materials costs and lower expected wind blade demand in the second half of 2021. Weakness in Materials and Real Estate was due to share price declines from biofacturing company Zymergen Inc. and temperature-controlled warehouse operator Americold Realty Trust, respectively. Zymergen’s stock fell sharply after management withdrew previous financial targets due to the delayed commercial launch of the company’s lead product, Hyaline. We exited the position given material impacts to the business. Americold’s share price declined after the company lowered financial guidance for the full year, as supply chain disruptions and cost inflation are negatively impacting volumes, sales, and margins.
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.