MELI - Baron Emerging Markets Fund Q4 2024 Shareholder Letter

2025-01-23 04:20:00 ET

Summary

• Baron Emerging Markets Fund declined in the fourth quarter of 2024, outperforming its benchmark, the MSCI EM Index.
• Emerging Markets equities were broadly lower, pressured by the Republican sweep of the U.S. elections and the abrupt rally in the dollar that followed.
• Top contributors were Taiwan Semiconductor Manufacturing Company Limited, HD Hyundai Heavy Industries Co., Ltd., and Kaynes Technology India Limited. Top detractors were Swiggy Limited, Alibaba Group Holding Limited, and Samsung Electronics Co., Ltd.
• We added to our digitization theme with investments in China-based logistics provider S.F. Holding Co., Ltd., Latin American e-commerce platform MercadoLibre, Inc., and Talabat Holding plc., a consumer products delivery platform in the MENA region, which went public during the quarter.
• We also increased exposure to our global security theme with a position in Hanwha Systems Co., a leading South Korean defense enterprise.

Dear Baron Emerging Markets Fund Shareholder:

Baron Emerging Markets Fund® (the Fund) declined 7.35% (Institutional Shares) during the final quarter of 2024, while its primary benchmark, the MSCI Emerging Markets Index (the Benchmark), retreated 8.01%. The MSCI Emerging Markets IMI Growth Index (the Proxy Benchmark) declined 6.84% for the quarter. The Fund modestly outperformed the Benchmark while slightly lagging the Proxy Benchmark during a difficult quarter for non-U.S. equity returns. For the full year 2024, the Fund gained 7.90%, slightly outperforming the Benchmark while trailing the Proxy Benchmark, largely due to the Proxy Benchmark’s disproportionate exposure to Taiwan Semiconductor Manufacturing Company Limited (TSM). We were pleased with full-year results, as a solid second-half resulted in a return to outperformance against the Benchmark and peers for the year, and we remain cautiously optimistic that growth-oriented, non-U.S. equity strategies have reached an inflection point after a multi-year period of underperformance....

For further details see: