BROE - Baron Small Cap Fund Q4 2023 Shareholder Letter
2024-02-17 05:25:00 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 Small Cap Fund was up 12.64% (Institutional Shares) in Q4 2023 and gained 27.19% for the year in line with the performance the Benchmark.
- As of the end of 2023, we own 15 stocks that have appreciated over five-fold since their initial purchase price, 9 of which have gone up over 10 times.
- We note that valuations are not stretched and expect them to expand if growth reaccelerates.
Dear Baron Small Cap Fund Shareholder:
Performance
Baron Small Cap Fund® ( BSFIX , the Fund) had a solid fourth quarter and a strong 2023, both on an absolute and relative basis. The Fund was up 12.64% (Institutional Shares) in the quarter and gained 27.19% for the year. This was essentially in line with the performance of the Russell 2000 Growth Index (the Benchmark) in the fourth quarter, which was up 12.75%, and was 853 basis points better than the Benchmark for the year. The Fund slightly outperformed the broader S&P 500 Index ( SP500 , SPX ) this quarter and for the year, which was a good achievement as larger-cap stocks outperformed small caps in 2023. Overall, a very satisfying year.
As shown below, the Fund has outperformed the Benchmark for all relevant periods. We have beaten the Benchmark six of the last seven years. The down year we had in 2022, when quality growth underperformed, is now safely in the rearview mirror. Since inception, we have provided an annual excess return of 4.06%, which adds up. If you had hypothetically invested $10,000 at the inception of the Fund in September 1997, your investment would be worth $127,309, which is well in excess of $47,581, the value of the investment if you had invested in a fund that tracked the Benchmark. We appreciate the confidence and support of those who have been with us for these past 26 years, or any portion thereof....
Baron Small Cap Fund Q4 2023 Shareholder Letter