Overview

Objective & Strategy

S

The Fund invests primarily in small-sized U.S. companies. It invests in a select number of high-growth businesses that tend to be in an early phase of their lifecycles. Diversified.

Fund Facts

BDFIX Snapshot

As of Dec 01, 2023

NAV $26.09
Daily Change ($) $0.60
Daily Change (%) 2.35%
YTD 14.18%
Inception Date 9/30/2013

Fund Highlights

Morningstar Rating™

Overall (out of 560 Funds)

Morningstar 3 stars

Ratings based on risk-adjusted returns as of 10/31/2023
Category:US Fund Small Growth

Equity Style

Risk & Return1

BDFIX Portfolio Management

Laird Bieger bio image

Laird Bieger

Portfolio Manager

years of exp 26

years at baron 23

Randolph Gwirtzman bio image

Randolph Gwirtzman

Portfolio Manager

years of exp 26

years at baron 21

1Source: FactSet SPAR.

For the period ended 9/30/2023, the Baron Discovery Fund received a 4-Star Overall Morningstar Rating™, 2-Star 3-Year Rating, 3-Star 5-Year Rating, and 5-Star 10-Year Rating. The Morningstar Ratings are based on the Morningstar Risk-Adjusted Return measures of 562, 562, 527, and 397 funds in the category, respectively. This Morningstar Rating is for the Institutional share class only; other classes may have different performance characteristics.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Morningstar classifies funds as being large-cap, mid-cap, or small-cap based on the market capitalization of the fund’s stock holdings; and as value, blend, or growth based on the value-growth orientation of the stock holdings. The nine possible combinations of these characteristics correspond to the nine squares of the Morningstar Style Box–size is displayed along the vertical axis and style is displayed along the horizontal axis. Please note that the style boxes indicate the Fund’s equity style, not necessarily its Morningstar Category.

© 2023 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its affiliates or content providers; (2) may not be copied, adapted or distributed; (3) is not warranted to be accurate, complete or timely; and (4) does not constitute advice of any kind, whether investment, tax, legal or otherwise. User is solely responsible for ensuring that any use of this information complies with all laws, regulations and restrictions applicable to it. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

MORNINGSTAR IS NOT RESPONSIBLE FOR ANY DELETION, DAMAGE, LOSS OR FAILURE TO STORE ANY PRODUCT OUTPUT, COMPANY CONTENT OR OTHER CONTENT.

Prices & Performance: Baron Discovery Fund (BDFIX)

Prices

as of 12/01/23

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NAV Daily Change ($) Daily Change (%) MTD QTD YTD
$26.09 $0.60 2.35% 2.35% 4.74% 14.18%

Performance

Quarterly Returns

as of 09/30/23

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QTD1 YTD1 1 Year 3 Years 5 Years Since Inception Expense Ratio2
Gross Net
BDFIX - Baron Discovery Fund - I -5.36% 9.02% 9.25% -2.34% 3.68% 11.44% 1.06% 1.06%
Russell 2000 Growth Index -7.32% 5.24% 9.59% 1.09% 1.55% 6.72%
S&P 500 Index -3.27% 13.07% 21.62% 10.15% 9.92% 11.91%

1Not annualized.

2Expense ratios are as of the fiscal year ended 9/30/2022.

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 Adviser may reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2033, unless renewed for another 11-year term and 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.

The Fund’s 3-, 5- and 10-year historical performance was impacted by gains from IPOs and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future.

Performance Characteristics: BDFIX

as of 09/30/23

3 Years 5 Years 10 Years
Standard Deviation (%) 24.01 26.32 22.25
Sharpe Ratio -0.17 0.07 0.46
Alpha (%) -3.12 2.43 4.62
Beta 1.00 1.02 1.03
R-Squared (%) 91.81 91.86 86.97
Tracking Error (%) 6.87 7.53 8.06
Information Ratio -0.50 0.28 0.59
Upside Capture (%) 97.37 105.94 112.67
Downside Capture (%) 108.79 99.62 97.27

Except for Standard Deviation and Sharpe Ratio, the performance based-characteristics above were calculated relative to the Baron Discovery Fund's(BDFIX) benchmark Russell 2000 Growth Index. Performance statistics for additional periods will be provided on request. Source FactSet: SPAR.

NAV $26.09
Daily Change ($) $0.60
Daily Change (%) $0.60
MTD 2.35%
QTD 4.74%
YTD 14.18%
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BDFIX - Baron Discovery Fund - I Russell 2000 Growth Index S&P 500 Index
QTD1 -9.88% -7.71% -2.10%
YTD1 -1.75% -2.87% 10.69%
1 Year -8.22% -7.63% 10.14%
3 Years -5.55% -1.83% 10.36%
5 Years 4.32% 2.68% 11.01%
10 Years 9.89% 5.67% 11.18%
Since Inception 10.19% 5.81% 11.57%
Expense Ratio2 - Gross 1.06%
Expense Ratio2 - Net 1.06%

*As of 10/31/23

*Annualized as of 10/31/23

1Not annualized.

2Expense ratios are as of the fiscal year ended 9/30/2022.

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 Adviser may reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2033, unless renewed for another 11-year term and 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.

The Fund’s 3-, 5- and 10-year historical performance was impacted by gains from IPOs and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future.

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BDFIX - Baron Discovery Fund - I Russell 2000 Growth Index S&P 500 Index
QTD1 -5.36% -7.32% -3.27%
YTD1 9.02% 5.24% 13.07%
1 Year 9.25% 9.59% 21.62%
3 Years -2.34% 1.09% 10.15%
5 Years 3.68% 1.55% 9.92%
Since Inception 11.44% 6.72% 11.91%
Expense Ratio2 - Gross 1.06%
Expense Ratio2 - Net 1.06%

*As of 09/30/23

*Annualized as of 10/31/23

1Not annualized.

2Expense ratios are as of the fiscal year ended 9/30/2022.

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 Adviser may reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2033, unless renewed for another 11-year term and 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.

The Fund’s 3-, 5- and 10-year historical performance was impacted by gains from IPOs and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future.

as of 09/30/23

3 Years 5 Years 10 Years
Standard Deviation (%) 24.01 26.32 22.25
Sharpe Ratio -0.17 0.07 0.46
Alpha (%) -3.12 2.43 4.62
Beta 1.00 1.02 1.03
R-Squared (%) 91.81 91.86 86.97
Tracking Error (%) 6.87 7.53 8.06
Information Ratio -0.50 0.28 0.59
Upside Capture (%) 97.37 105.94 112.67
Downside Capture (%) 108.79 99.62 97.27

Except for Standard Deviation and Sharpe Ratio, the performance based-characteristics above were calculated relative to the Baron Discovery Fund's(BDFIX) benchmark Russell 2000 Growth Index. Performance statistics for additional periods will be provided on request. Source FactSet: SPAR.

as of 10/31/23

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Year Baron Discovery Fund Russell 2000 Growth Index S&P 500 Index
2022 -35.12% -26.36% -18.11%
2021 4.89% 2.83% 28.71%
2020 66.13% 34.63% 18.40%
2019 26.85% 28.48% 31.49%
2018 0.64% -9.31% -4.38%
2017 35.83% 22.17% 21.83%
2016 21.73% 11.32% 11.96%
2015 -14.53% -1.38% 1.38%
2014 13.80% 5.60% 13.69%
2013 16.70% 8.17% 10.51%

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 Adviser may reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2033, unless renewed for another 11-year term and 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.

The Fund’s 3-, 5- and 10-year historical performance was impacted by gains from IPOs and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future.

Record Date 11/22/2021 11/23/2020 11/25/2019 11/28/2018 11/27/2017 06/27/2016
Ex Date 11/23/2021 11/24/2020 11/26/2019 11/29/2018 11/28/2017 06/28/2016
Payable Date 11/24/2021 11/25/2020 11/27/2019 11/30/2018 11/29/2017 06/29/2016
Income $0.0000 $0.0000 $0.0000 $0.0000 $0.0377 $0.0000
Return of Capital $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000
Short-Term Capital Gain $0.7794 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000
Long-Term Capital Gain $0.5154 $1.0614 $0.0286 $1.5004 $0.0000 $0.2660
Total $1.2948 $1.0614 $0.0286 $1.5004 $0.0377 $0.2660
Re-Invest NAV $35.85 $31.38 $21.42 $19.33 $18.30 $11.35
Calendar-Yr Return 4.89% 66.13% 0.64% 35.83% 21.73%

Portfolio Characteristics

as of 09/30/23

Baron Discovery Fund Russell 2000 Growth Index
Net Assets$1.28 billion
# of Issuers / % of Net Assets58 / 95.5%
Turnover (3 Year Average)37.20%
Active Share96.3%
Median Market Cap$4.12 billion$1.12 billion
Weighted Average Market Cap$5.60 billion$3.28 billion
EPS Growth (3-5 year forecast)13.5%12.3%
Price/Earnings Ratio (trailing 12-month)26.417.8
Price/Book Ratio3.53.4
Price/Sales Ratio3.61.5

The Net Assets include all share classes combined.

Price/Book Ratio and Price/Sales Ratio are calculated using the Weighted Harmonic Average. Source: FactSet PA. Internal valuation metrics may differ.

Contributors/Detractors

Contributors

Quarterly as of 09/30/23

Top Contributors Average Weight Contribution
Kinsale Capital Group, Inc. 5.02% 0.50%
Clearwater Analytics Holdings, Inc. 1.92% 0.36%
PAR Technology Corporation 2.39% 0.31%
Guidewire Software, Inc. 1.46% 0.22%
Axonics, Inc. 2.68% 0.22%

Source: FactSet PA.

Insights & News: Baron Discovery Fund (BDFIX)

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.

Risks: Specific risks associated with investing in smaller companies include that the securities may be thinly traded and more difficult to sell during market downturns. Even though the Fund is diversified, it may establish significant positions where the Adviser has the greatest conviction. This could increase volatility of the Fund's returns.
 

The Fund may not achieve its objectives.

Definitions (provided by BAMCO, Inc.): The indexes are unmanaged. The Russell 2000® Growth Index measures the performance of small-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. All rights in the FTSE Russell Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trade mark of the relevant LSE Group company and is used by any other LSE Group company under license. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. The indexes and the Fund include reinvestment of dividends, net of withholding taxes, which positively impact the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index.

Definitions (provided by BAMCO, Inc.): Standard Deviation: measures the degree to which a fund’s performance has varied from its average performance over a particular time period. The greater the standard deviation, the greater a fund’s volatility (risk). Sharpe Ratio: is a risk-adjusted performance statistic that measures reward per unit of risk. The higher the Sharpe ratio, the better a fund’s risk adjusted performance. Alpha: measures the difference between a fund’s actual returns and its expected performance, given its level of risk as measured by beta. Beta: measures a fund’s sensitivity to market movements. The beta of the market is 1.00 by definition. R-Squared: measures how closely a fund’s performance correlates to the performance of the benchmark index, and thus is a measurement of what portion of its performance can be explained by the performance of the index. Values for R-Squared range from 0 to 100, where 0 indicates no correlation and 100 indicates perfect correlation. Tracking Error: measures how closely a fund’s return follows the benchmark index returns. It is calculated as the annualized standard deviation of the difference between the fund and the index returns. Information Ratio: measures the excess return of a fund divided by the amount of risk the fund takes relative to the benchmark index. The higher the information ratio, the higher the excess return expected of the fund, given the amount of risk involved. Upside Capture: explains how well a fund performs in time periods where the benchmark’s returns are greater than zero. Downside Capture: explains how well a fund performs in time periods where the benchmark’s returns are less than zero

Definitions (provided by Baron Capital, Inc.): EPS Growth Rate (3-5 Year): indicates the long-term forecasted EPS growth of the companies in the portfolio, calculated using the weighted average of the available 3-to-5 year forecasted growth rates for each of the stocks in the portfolio provided by Factset Estimates. The EPS Growth rate does not forecast the Fund’s performance. Price/ Earnings Ratio (trailing 12-months): is a valuation ratio of a company’s current share price compared to its actual earnings per share over the last twelve months. Price/Book Ratio: is a ratio used to compare a company’s stock price to its tangible assets, and it is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. Price/Sales Ratio: is a valuation ratio of a stock’s price relative to its past performance. It represents the amount an investor is willing to pay for a dollar generated from a particular company’s operations. Price/Sales is calculated by dividing a stock’s current price by its revenue per share for the last 12 months. Weighted Harmonic Average: is a calculation that reduces the impact of extreme observation on the aggregate calculation by weighting them based on their size in the fund. Active Share is a term used to describe the share of a portfolio’s holdings that differ from that portfolio’s benchmark index. It is calculated by comparing the weight of each holding in the Fund to that holding’s weight in the benchmark. Positions with either a positive or negative weighting versus the benchmark have Active Share. An Active Share of 100% implies zero overlap with the benchmark. Active Share was introduced in 2006 in a study by Yale academics, M. Cremers and A. Petajisto, as a measure of active portfolio management.

One year turnover information to the most recent quarter and average market cap (unweighted) is available upon request.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and S&P Global Market Intelligence (“S&P”) and is licensed for use by BAMCO, Inc. and Baron Capital Management, Inc. (each an “Adviser” and collectively “Baron Capital” or the “Firm”). Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classification makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. All GICS structure changes that have occurred since 2016 have been applied retroactively in historical holdings-based analyses, including performance attribution. The Adviser may have reclassified/classified certain securities in or out of a sub-industry within a sector. Such reclassifications are not supported by S&P or MSCI.