ONON - Baron Focused Growth Fund Q4 2023 Shareholder Letter
2024-02-17 10:15:00 ET
Summary
- Baron is an asset management firm focused on delivering growth equity investment solutions known for a long-term, fundamental, active approach to growth investing.
- Baron Focused Growth Fund increased 9.74% (inst. shares) in Q4 2023 underperforming the Russell 2500 Growth Index (the Benchmark), which increased 12.59%.
- If we do not go into a deep recession this year, or if the slowdown and expected decline in earnings are not as bad as feared, we believe investors will see significant near-term upside in the portfolio.
D EAR B ARON F OCUSED G ROWTH F UND S HAREHOLDER
P ERFORMANCE
Baron Focused Growth Fund ( BFGIX , the Fund) had a strong fourth quarter. Although the Fund increased 9.74% (Institutional Shares) in the period, it underperformed the Russell 2500 Growth Index (the Benchmark), which increased 12.59%. Investor expectations of a U.S. Federal Reserve (the Fed) pivot from raising rates to lowering rates over the next year benefited leveraged, cyclical, and interest rate sensitive stocks significantly. We have modest investments in such businesses.
Table I. Performance Annualized for periods ended December 31, 2023
| Baron Focused Growth Fund Retail Shares 1,2,3 |
| Baron Focused Growth Fund Institutional Shares 1,2,3,4 |
| Russell 2500 Growth Index 2 |
| S&P 500 Index 2 |
| Three Months 5 |
| 9.66% |
| 9.74% |
| 12.59% |
| 11.69% |
| One Year |
| 27.40% |
| 27.78% |
| 18.93% |
| 26.29% |
| Three Years |
| 2.77% |
| 3.05% |
| (2.68)% |
| 10.00% |
| Five Years |
| 25.69% |
| 26.01% |
| 11.43% |
| 15.69% |
| Ten Years |
| 15.25% |
| 15.54% |
| 8.78% |
| 12.03% |
| Fifteen Years |
| 16.55% |
| 16.83% |
| 13.64% |
| 13.97% |
| Since Conversion (June 30, 2008) |
| 13.01% |
| 13.27% |
| 9.90% |
| 11.06% |
| Since Inception (May 31,1996) |
| 13.20% |
| 13.35% |
| 8.04% |
| 9.39% |