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Baron Capital Group·

Baron Small Cap Fund | Q3 2026

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Summary

  • The Baron Small Cap Fund Institutional Shares declined 7.69% in the third quarter of 2026, outperforming the Russell 2000 Growth Index which fell 9.39%.
  • Year-to-date through September 30, 2026, the Fund was down 4.30% while the Russell 2000 Growth Index rose 10.71%.
  • The Russell 3000 Index rose 1.40% for the quarter and 12.42% year-to-date.
  • The Fund has compounded at 9.46% annually since inception on September 30, 1997, compared to 6.86% for the Russell 2000 Growth Index.
  • Neogen Corp., Intapp, Inc., and The Baldwin Insurance Group, Inc. were the largest contributors to performance.
  • Vertiv Holdings Co, Red Rock Resorts, Inc., and JBT Marel Corporation were the largest detractors from performance.
  • The Fund participated in the IPO of Accelevation Holdings Corp. and increased seven existing holdings.
  • Oil prices exceeded $100 per barrel due to escalating tensions in the Middle East.
  • The Federal Reserve raised the Fed funds rate by 25 basis points amid inflation readings above target levels.
  • The 10-year Treasury yield added roughly 50 basis points in September and over 100 basis points for the year.
  • Information Technology holdings rose 7.16% while the Index's IT sector stocks fell 12.81%.
  • The Fund is underweight to Momentum and Beta factors but maintains a tilt toward Quality and larger-cap companies within the small-cap universe.
  • As of September 30, 2026, the Fund managed approximately $2.4 billion across 51 stocks.
  • The top 10 holdings accounted for 36.3% of the Fund's net assets.
  • Sector allocations included Industrials at 30.7%, IT at 20.8%, Consumer Discretionary at 13.7%, Health Care at 13.1%, and Financials at 10.2%.
  • The Fund holds no Energy stocks and is underweight Health Care due to a lack of biotechnology stocks.
  • 68% of the Fund's assets are in stocks held for more than five years, with 39% held for over 10 years.
  • 58% of the Fund's assets are in stocks that have at least doubled since purchase.
  • New positions initiated or added to in the quarter had a weighted average market capitalization of $3.6 billion.
  • Positions trimmed during the quarter had a weighted average market capitalization of approximately $12.3 billion.
  • The "AI Haves" group comprised 18.7% of the Fund on average and rose 87% in the first half of the year.