Baron Fifth Avenue Growth Fund | Q3 2026

Summary

• The Baron Fifth Avenue Growth Fund gained 6.55% for Institutional Shares in the third quarter of 2026, outperforming the Russell 1000 Growth Index (0.92%) and the S&P 500 Index (2.30%).
• Year-to-date performance for the Fund reached 19.0%, compared to 6.3% for the Russell 1000 Growth Index and 12.8% for the S&P 500 Index.
• Top contributors to quarterly performance were NVIDIA Corporation, Cloudflare, Inc., Meta Platforms, Inc., CrowdStrike Holdings, Inc., Shopify Inc., and Illumina.
• Top detractors included Space Exploration Technologies Corp., Tesla, Inc., Taiwan Semiconductor Manufacturing Company Limited, and Broadcom.
• The Fund increased holdings in Amphenol Corporation, Eli Lilly and Company, and Cerebras Systems Inc.
• Information Technology was the strongest sector, contributing 277 basis points of outperformance through stock selection.
• NVIDIA reported $96 billion in revenue with 106% year-on-year growth and guided to 70% growth for the next fiscal year.
• Cloudflare shares rose 41.5% during the quarter as revenue growth accelerated to 36% year-on-year.
• Meta Platforms shares increased 28.8% during the quarter.
• SpaceX shares fell 36.6% in July following its IPO but recovered to rise 32.6% in August after strong quarterly results.
• Amazon reported 20% year-on-year revenue growth driven by 37% growth in AWS, its fastest rate in 18 quarters.
• Hyperscalers reported cloud revenue run-rates rising 50% year-on-year to $420 billion.
• Broadcom reported 86% year-on-year revenue growth and projected its AI business would double in the next two fiscal years.
• Stock selection accounted for 476 basis points of the Fund's 561 basis points of outperformance, while sector allocation contributed 86 basis points.
• The Fund declined 3.9% in July while the Russell 1000 Growth Index dropped 4.8%.
• The Fund gained 6.4% in August compared to a 3.7% gain for the Russell 1000 Growth Index.
• The Fund returned 4.3% in September compared to a 2.2% gain for the Russell 1000 Growth Index.
• Net annual expense ratios as of January 28, 2026, were 1.00% for Retail Shares and 0.75% for Institutional Shares.
• The Adviser has agreed to waive expenses pursuant to a contract expiring on August 29, 2037.
• Demand for AI tokens is accelerating with consumption volumes doubling approximately every eight weeks.
• The cost for a given level of intelligence has fallen by a factor of 13 each year since 2023.
• Near-term data center construction delays are a growing risk due to permitting, power, labor, and capital constraints.
• Open-weight model adoption is growing as companies post-train these models on proprietary data.
• AI-native startups including Sierra, ElevenLabs, Cognition, Legora, Harvey, Lovable, and Vercel are growing at triple-digit revenue rates.