Hero Background Image

Baron High Growth Strategy

Symbol HIGH
A
All-Cap Growth

Total Strategy Assets

$1.38 B

As of 06/30/2024

Inception date

06/30/2000

Performance

PerformanceAs of 06/30/2024

YTD11 Year3 Years5 Years10 yearsSince Inception
06/30/2000
Baron High Growth Strategy (Net)20.41%31.74%1.56%19.09%16.33%10.51%
Baron High Growth Strategy (Gross)21.00%33.03%2.56%20.27%17.46%11.79%
Russell 3000 Growth Index19.90%32.22%10.33%18.55%15.75%7.41%
S&P 500 Index15.29%24.56%10.01%15.05%12.86%7.69%

Performance InformationAs of 03/31/2024

3 Years5 Years10 Years
Standard Deviation (%)25.0524.4420.93
Sharpe Ratio0.030.710.69
Alpha (%)-8.020.67-0.70
Beta1.131.081.11
R-Squared (%)88.4684.0081.89
Tracking Error (%)8.919.939.12
Information Ratio-0.910.160.05
Upside Capture (%)94.38106.90111.27
Downside Capture (%)121.32105.36117.98
Except for Standard Deviation and Sharpe Ratio, the performance based-characteristics above were calculated relative to the Baron High Growth Strategy's benchmark Russell 3000 Growth Index. Performance statistics for additional periods will be provided on request. Source FactSet: SPAR.

Portfolio Holdings & Characteristics

HoldingsAs of 06/30/2024

HoldingSector% of Net Assets
Microsoft Corporation
Microsoft Corporation (MSFT) is a software company traditionally known for its Windows and Office products. Over the last five years, it has built a $120 billion-plus annual cloud business, including Office 365, CRM product Dynamics 365, and infrastructure-as-a-service product Azure.
Microsoft is led by Satya Nadella, who has refocused the company on cloud computing and AI. He has been quite successful thus far, with Microsoft's commercial cloud business now representing over 56% of revenue and growing around 25% year-on-year. Microsoft's moat is based on the wide reach of its sales channel, its diverse platform of software offerings, hybrid cloud capabilities, and the high costs of switching away from its solutions, which tend to be critical for its customers. We believe Microsoft will benefit from the growing adoption of cloud for years to come.
Information Technology14.4%
NVIDIA Corporation
NVIDIA Corporation (NVDA) sells semiconductors, systems, and software for accelerated computing, gaming, and generative AI (GenAI).
Computing demand has been doubling every one to two years, driven by electrification, digitization and the recent advancements in AI, yet supply growth has decelerated dramatically due to the slowdown in Moore's law. NVIDIA’s accelerated computing architecture enables continued growth in supply of computing through parallelization. We are at the tipping point of a new era in computing with NVIDIA at its epicenter as GenAI adoption grows. Given its leading market share in gaming, data centers, and autonomous machines, we believe NVIDIA can grow rapidly for years to come.
Information Technology13.4%
Amazon.com, Inc.
Amazon.com, Inc. (AMZN) is an e-commerce pioneer, innovator, and market share leader with a relentless focus on providing value and convenience to its customers. Amazon also operates the industry-leading cloud infrastructure business Amazon Web Services.
Amazon's market share of U.S. online retail sales is around 40%, while its share of global online retail sales is less than 5%. Amazon has many avenues for revenue growth, including consumer staples, apparel, international expansion, digital media offerings, private label, pharmacy services, advertising, and a better shopping experience powered by generative AI. With Amazon Web Services as a large, growing part of the business, we also believe Amazon represents a unique opportunity to invest in the secular growth of cloud computing.
Consumer Discretionary7.0%
Meta Platforms, Inc.
Meta Platforms, Inc. (META) owns Facebook, the world's largest social network, with over 3.0 billion monthly and over 2.1 billion daily active users. Instagram, Messenger, WhatsApp, and Oculus are also part of the Meta Platforms network, with over 3.9 billion total monthly unique users across Meta products.
Meta owns unique social platforms with users that continue to demonstrate stickiness and high engagement. Advertisers want to be where users are, and Meta's ability to analyze, target, and show clear, demonstrable, and rising returns on investment makes the platform particularly attractive to them. We believe the company is still in the middle innings of monetizing its vast customer base, especially internationally. In addition, we see significant positive optionality from monetization opportunities in short-form video, WhatsApp, and generative AI features.
Communication Services4.7%
Apple Inc.
Apple Inc. (AAPL) designs, manufactures, and markets consumer electronics, computer software, and online services. Its products include the iPhone, iPad, Mac personal computer, Apple smartwatch, Apple TV, and HomePod. It also offers advertising and app discovery services through its App Store.
As the creator and owner of one of the largest and most popular consumer electronics platforms, Apple, in our view, is well positioned to benefit from the network effect that typically accrues to platform companies. It has a large and growing ecosystem, a trusted brand, and positive optionality through its efforts to expand into additional consumer and enterprise services with its large installed base. We believe Apple trades at a discount to our estimate of its intrinsic value, with capital return and growth alleviating near-term trade and iPhone demand uncertainty. 
Information Technology4.3%
Tesla, Inc.
Tesla, Inc. (TSLA) manufactures electric vehicles, including a luxury sedan and CUV (S/X), a mid-sized luxury sedan and hatchback (3/Y), and pickup and semi-trucks. It is also ramping up internal battery cell production, energy solutions, and software offerings such as full self-driving and insurance.
We expect Tesla will continue to grow its automotive business rapidly through international production capacity and product expansion. We believe Tesla's vertical integration, technology innovation, brand, profitability, and growing supplier support offer unique and durable growth opportunities that are hard to replicate. In addition, Tesla's energy and software expertise is broadening the industrial opportunity to large and profitable revenue avenues that were previously locked in the legacy vehicle architecture, such as autonomous, insurance, and other AI use cases.
Consumer Discretionary3.5%
Broadcom Inc.
Broadcom Inc. (AVGO) designs, develops, and supplies a wide range of semiconductor and infrastructure software solutions. Its semiconductor devices serve broadband, networking, wireless, storage, and industrial markets while its software offerings focus on operational efficiency tools for large enterprises.
Broadcom’s semiconductor portfolio is reaching an inflection point, driven by its AI solutions in networking and custom compute. The rest of its semis portfolio should grow at mid-single digits, while its legacy software offerings should grow at low-single digits as the company focuses on cost efficiencies, cross-selling, and servicing key enterprise accounts. We think recent acquisition VMWare will grow faster post-purchase due to Broadcom's product simplification and SaaS conversion strategy. Broadcom has strong margins and cash flow, which it returns to shareholders.
Information Technology3.2%
Space Exploration Technologies Corp.
Space Exploration Technologies Corp. (SpaceX) designs, manufactures, and launches rockets, satellites, and spacecrafts. Its ultimate goal is to make humanity multi-planetary. Products include reusable orbital launch offerings and a broadband service leveraging its satellite constellation, Starlink.
We believe SpaceX will continue to drive down the cost of space launches and capture market share with its unique, reliable, and improving reusable launch capabilities. As costs decline, we also expect demand for access to space to increase. By leveraging its launch cost leadership, vertical integration, and innovative design approach, we think SpaceX will have an advantage in building and operating its rapidly expanding satellite-based broadband services, creating an even more attractive growth profile for the company.
Industrials2.7%
Gartner, Inc.
Gartner, Inc. (IT) is the leading independent provider of research and advisory services for IT, HR, sales, finance, and marketing leaders.
Gartner has a vast addressable market, which management estimates exceeds $70 billion annually, implying a penetration rate of less than 3%. IT is rapidly changing and growing in strategic importance, leading users to turn to third-party providers for insight into trends. Gartner enjoys retention rates of more than 100%, driven by the low price of its research relative to value. We think consistent execution in Global Technology Sales and improvements in Global Business Sales will help accelerate Research growth into the low double digits.
Information Technology2.7%
Advanced Micro Devices, Inc.
Advanced Micro Devices, Inc. (AMD) is a global fabless semiconductor company focusing on high performance computing technology, software, and products. The company designs leading high-performance CPUs, GPUs, FPGAs, and other compute products to build differentiated solutions across many end markets.
Advanced Micro Devices has been gaining meaningful share in server CPUs over the past several years, driven by the strong performance of its processors and execution against its differentiated technology roadmap. Its revamped GPU offerings for AI applications are the only viable merchant GPU competitors to NVIDIA in a large and growing AI compute market. We believe these two key products will continue to drive rapid growth and share gains within the data center compute market, with the 2022 Xilinx acquisition opening up additional opportunities in other diversified markets.
Information Technology2.5%
Total
Total
58.3%
Top Ten Holdings, Portfolio Holdings, and Sector Breakdown based on net assets. Positions smaller than 0.05% round to 0.0%. Portfolio holdings may change over time.
Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk.

Contributors / DetractorsQuarterly as of 03/31/2024

Top ContributorsAverage WeightContribution
NVIDIA Corporation10.75%6.93%
Viking Therapeutics, Inc.1.27%2.04%
Microsoft Corporation14.24%1.84%
Meta Platforms, Inc.4.51%1.52%
Amazon.com, Inc.6.65%1.23%
Source:  FactSet PA.  Based on the gross performance results of the representative account. 

GICS Sector BreakdownAs of 06/30/2024

Portfolio Characteristics

Information Technology

59.9%

Consumer Discretionary

11.4%

Communication Services

8.8%

Health Care

7.8%

Financials

4.4%

Industrials

3.7%

Real Estate

2.4%

Cash & Cash Equivalents

1.4%

Materials

0.2%

Sub-Industry
06/30/2024
Semiconductors24.20%
Systems Software18.20%
Broadline Retail 7.00%
Application Software6.70%
Biotechnology6.20%
Interactive Media & Services4.80%
Transaction & Payment Processing Services 4.40%
Technology Hardware, Storage & Peripherals4.30%
Automobile Manufacturers3.50%
Aerospace & Defense2.70%
IT Consulting & Other Services2.70%
Semiconductor Materials & Equipment 2.50%
Real Estate Services 2.40%
Movies & Entertainment2.10%
Advertising2.00%
0510152025
Semiconductors24.20%
Systems Software18.20%
Broadline Retail 7.00%
Application Software6.70%
Biotechnology6.20%
Interactive Media & Services4.80%
Transaction & Payment Processing Services 4.40%
Technology Hardware, Storage & Peripherals4.30%
Automobile Manufacturers3.50%
Aerospace & Defense2.70%
IT Consulting & Other Services2.70%
Semiconductor Materials & Equipment 2.50%
Real Estate Services 2.40%
Movies & Entertainment2.10%
Advertising2.00%
0510152025

Portfolio CharacteristicsAs of 03/31/2024

Baron High Growth StrategyRussell 3000 Growth Index
Inception DateJune 30, 2000
# of Equity Securities / % of Net Assets47 / 98.8%
Turnover (3 Year Average)28.87%
Active Share60.5%
Median Market Cap$41.02 billion$2.35 billion
Weighted Average Market Cap$986.49 billion$1.16 trillion
EPS Growth (3-5 year forecast)20.5%17.2%
Price/Earnings Ratio (trailing 12-month)54.334.2
Price/Book Ratio7.78.2
Price/Sales Ratio8.54.0
Total Strategy Assets$1.38 billion
Price/Book Ratio and Price/Sales Ratio are calculated using the Weighted Harmonic Average. Source: FactSet PA. Internal valuation metrics may differ.