Baron India Fund | Q3 2026

Summary

• Baron India Fund Institutional Shares declined 2.95% during the third quarter of 2026, outperforming the MSCI AC Asia ex Japan/India Linked Index which fell 5.61%.
• Top contributors to quarterly performance were Divi's Laboratories Limited, Precision Wires India Limited, and Centum Electronics Limited.
• Top detractors for the quarter were HDFC Bank Limited, Bajaj Finance Limited, and Max Healthcare Institute Limited.
• New positions were added to the Make in India/supply chain diversification theme, including Laurus Labs Limited, Sona BLW Precision Forgings Limited, and Sudeep Pharma Limited.
• The Fund converted from the legacy Baron New Asia Fund on September 1, 2024, necessitating a new linked benchmark to maintain track record continuity.
• Since conversion, the Fund has outperformed the MSCI India Index by 7.24% on an annualized basis.
• Morningstar ranked the Fund's Institutional Share Class in the 2nd percentile for performance since conversion as of September 30, 2026.
• Indian equities underperformed emerging market peers due to a re-escalation of conflict in West Asia that drove Brent crude prices up by more than 40%.
• Real GDP in India grew 7.8% in the June quarter, domestic auto volumes increased more than 25% year-to-date, and bank credit grew over 18% year-over-year.
• The MSCI India Index traded below 19 times one-year forward price-to-earnings as of quarter end, approximately two standard deviations below its five-year average.
• The Industrials sector provided the largest contribution to relative performance, driven by holdings in the Make in India/supply chain diversification theme.
• The Health Care sector contributed to results through a material overweight and stock selection in Divi's Laboratories Limited.
• The Financials sector detracted from relative performance due to adverse stock selection in Kotak Mahindra Bank Limited, Cholamandalam Investment and Finance Company Limited, and Nuvama Wealth Management Limited.
• Divi's Laboratories Limited contributed 1.52% to returns, driven by stronger-than-expected quarterly revenue and profit from GLP-1 API validation batches.
• Precision Wires India Limited contributed 1.07% to returns, benefiting from strong sales growth in its role as the largest manufacturer of enameled copper winding wire in India.
• Centum Electronics Limited contributed 0.65% to returns, supported by robust quarterly results and demand for domestic electronic manufacturing.
• HDFC Bank Limited contributed -0.64% to returns due to weaker-than-expected profitability, leadership uncertainty, and compressed net interest margins.
• Bajaj Finance Limited contributed -0.52% to returns following a proposal to revise insurance commission structures and concerns regarding a planned equity capital raise.
• Max Healthcare Institute Limited contributed -0.44% to returns after the Supreme Court recommended scrutiny of medicine and consumables prices.
• The gross annual expense ratio for Retail Shares was 3.02% and for Institutional Shares was 2.30% as of April 30, 2026.
• The net annual expense ratio was 1.45% for Retail Shares and 1.20% for Institutional Shares, reflecting adviser fee waivers and expense reimbursements.
• The Adviser has agreed to waive or reimburse certain expenses pursuant to a contract expiring on August 29, 2037.