Baron Asset Fund outperforms Russell Midcap amidst market challenges

Amid a challenging market environment, Baron Funds’ Baron Asset Fund reported a modest decline in the third quarter of 2023, with a 4.42% dip, yet it managed to outperform the Russell Midcap Growth Index, which fell by 5.22%. The fund’s relative success was attributed to strategic stock selection and style biases, as well as a cautious approach towards high beta stocks, which tend to be more volatile.

The fund’s featured stocks experienced mixed fortunes. Vail Resorts (NYSE:), Inc., known for its ski resorts and outdoor recreation services, saw its shares close at $221.15 on Thursday. Despite a positive one-month return of 2.82%, the company’s shares have depreciated by 8.03% over the past year. With a market capitalization standing at $8.424 billion, Vail Resorts faced headwinds such as unfavorable weather in Australia and reduced visitation at U.S. resorts due to international borders reopening. Nevertheless, the company witnessed an 11% year-over-year increase in seasonal ski pass demand.

In contrast, another prominent holding in the Baron Asset Fund portfolio, Verisk Analytics (NASDAQ:), Inc., closed at $237.93 per share on Thursday. The company, a leading data provider to insurance markets, had a one-month return of -3.91%. However, thanks to strong earnings performance and an upward revision of its fiscal year 2023 guidance, Verisk enjoyed a significant annual appreciation of 33.47% in its share value, boosting its market cap to $34.497 billion.

Baron Funds’ ability to navigate the recent market reversal highlights the resilience and adaptability of their investment strategy during periods of economic uncertainty.

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