Baron Emerging Markets Fund | Q3 2026

Summary

• The Baron Emerging Markets Fund declined 3.39% in the third quarter of 2026, trailing the MSCI Emerging Markets Index which fell 0.37%.
• The MSCI Emerging Markets IMI Growth Index declined 3.10% during the same period.
• Rising energy prices & a breakout in global bond yields favored value & commodity-oriented stocks over growth.
• The largest contributors to performance were Divi's Laboratories Limited, Sberbank of Russia PJSC, & WuXi AppTec Co., Ltd.
• The largest detractors were SK hynix Inc., Samsung Electronics Co., Ltd., & Montage Technology Co., Ltd.
• The Fund initiated a position in MediaTek Inc., a chip designer expanding into custom AI processors.
• Holdings were added in gold miner Zijin Gold International Company Limited & defense electronics manufacturer Data Patterns (India) Limited.
• Poor stock selection in the Information Technology sector, specifically in semiconductors & AI, was the largest detractor from relative performance.
• Adverse stock selection in Financials & an overweight position in Industrials also weighed on relative results.
• Favorable allocation & stock selection in the Health Care sector partially offset the negative factors.
• Adverse allocation & weak stock selection in Taiwan were the largest detractors to relative performance.
• Poor stock selection in China & an overweight position in India were notable drags on relative results.
• Favorable allocation in Russia added the most to relative performance after the Fund monetized its Sberbank position.
• Solid stock selection in Mexico & positive allocation combined with good stock selection in Greece bolstered relative results.
• India's real GDP growth sustained above 7% with bank credit growing nearly 20% year-over-year.
• Divi's Laboratories Limited contributed 0.50% to returns driven by stronger-than-expected quarterly revenue & profit.
• The Fund realized proceeds above the carrying value for Sberbank of Russia PJSC after sanctions restrictions eased.
• WuXi AppTec Co., Ltd. contributed 0.38% to returns after nearly doubling its full-year revenue growth guidance.
• SK hynix Inc. shares declined 2.00% after second-quarter results missed forecasts despite record operating margins.
• Samsung Electronics Co., Ltd. shares fell 0.88% despite reporting its most profitable quarter in history.
• Montage Technology Co., Ltd. shares dropped 0.87% due to an investigation into suspected price coordination.
• Taiwan Semiconductor Manufacturing Company Limited is the top holding at 16.3% of net assets.
• The Fund holds 22.5% in Taiwan, 20.9% in India, & 20.8% in Korea.
• The Fund increased exposure to the semiconductors & AI theme by initiating a position in MediaTek Inc.
• MediaTek expects to garner 15% to 20% market share in the custom silicon market by 2027.
• MediaTek expects more than $2 billion of data center revenue this year.