| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.2% | 7.8% | 7.9% |
| 2025 |
|---|
| 8.2% |
Baron Asset Fund delivered strong Q4 2025 performance, gaining 7.89% versus the Russell Midcap Growth Index's 3.70% decline. The fund's outperformance was driven primarily by favorable stock selection, with two private investments founded by Elon Musk - SpaceX and X.AI Holdings - accounting for the vast majority of relative gains. SpaceX, the fund's largest position at 12.5% of assets, continues generating significant value through Starlink broadband expansion and reusable launch technology. X.AI's merger with X created a strategic AI platform pairing large language models with real-time data. Technology investments including Amphenol and Fair Isaac also contributed positively, benefiting from AI-related demand and strong earnings. The fund maintains concentrated positions in high-quality, competitively advantaged businesses across industrials, information technology, and healthcare sectors. Looking forward, the manager remains optimistic about the market rewarding quality businesses amid a favorable economic backdrop, with SpaceX reportedly planning an IPO in 2026 at significantly higher valuations.
The fund focuses on investing for the long term in companies benefiting from secular growth trends with significant competitive advantages and best-in-class management teams, particularly in technology, healthcare, and industrial sectors.
We remain optimistic that the market will continue to appreciate and reward the types of high-quality, competitively advantaged businesses we favor. We believe that our businesses' growth opportunities and competitive positions are improving amid a largely favorable economic backdrop, while their absolute and relative valuations continue to become more compelling.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 4 2026 | 2025 Q4 | ACGL, APH, AXON, BAH, BIRK, CSGP, DAY, FICO, GWRE, IDXX, IEX, IT, MTD, RPGN, SPOT, TTD, VEEV, VRSK, WELL | AI, Biotechnology, growth, healthcare, mid cap, software, Space, technology | - | The fund benefits from AI-related investments including SpaceX's Starlink expansion and xAI's rapid development of Grok AI model with massive GPU deployments. Amphenol maintains significant market share in interconnect solutions within NVIDIA's AI server racks with content expected to increase as speeds and system complexity rise. SpaceX represents the fund's largest position at 12.5% of net assets, generating significant value through rapid expansion of Starlink broadband service and establishing itself as a leading launch provider with reusable technology. The company is making tremendous progress on Starship, the largest most powerful rocket ever flown. Guidewire's cloud migration is largely complete with annual recurring revenue benefiting from new customer wins and migrations to InsuranceSuite Cloud product. The landmark 10-year agreement with Liberty Mutual should help drive adoption among other Tier 1 P&C carriers. Repligen operates in fast-growing end markets including monoclonal antibodies and cell and gene therapies, with strong track record of scientific innovation. The company has opportunity to embed differentiated systems into new drug manufacturing processes as biosimilars come to market. |
| Nov 8 2025 | 2025 Q3 | APH, CHH, CSKD, IDXX, IT, LOAR, ONON, STUB, VRSK | AI, Earnings Quality, Mega Caps, Research, Valuations | STUB | The letter highlights that optimism around AI helped drive broader market gains, especially through mega-cap technology leaders. However, the funds high-quality bias lagged as lower-quality, high-volatility stocks surged, creating a challenging backdrop. AI-related concerns weighed on holdings like Gartner and FactSet, though the manager argues AI should ultimately be a tailwind for research-based businesses. |
| Jul 29 2025 | 2025 Q2 | ACGL, APH, COO, CSGP, DKNG, GWRE, IDXX, IOT, IT, LPLA, MSCI, MTD, PCOR, ROP, TECH, VRSK | balanced investing, Compounding, diversification, Quality, risk management | - | The commentary focuses on diversified equity exposure across growth and value styles to reduce volatility while compounding capital. Management emphasizes investing alongside capable operators in businesses with durable demand. Diversification across industries and business models is positioned as a long-term risk management tool. |
| Mar 31 2025 | 2025 Q1 | ACGL, CSGP, DKNG, GWRE, IT, ROP, SCHW, TECH, TTD, VRSK, VRT, WST | - | - | |
| Jan 29 2025 | 2024 Q4 | ACGL, APP, DAY, IDXX, IT, MTD, MTN, TTAN | - | - | |
| Sep 30 2024 | 2024 Q3 | COO, CSGP, DUOL, DXCM, FICO, GWRE, IT, SCHW, VRSK, WELL, WST | - | - | |
| Jul 27 2024 | 2024 Q2 | ARCH, CSGP, FICO, GWRE, IT, MNT, VMC, VRSK | - | - | |
| Apr 15 2024 | 2024 Q1 | ACGL, ANSS, CSGP, DAY, FDS, IDXX, IT, PCOR, SPOT, TECH, TTD, VRSK, VRSN | - | - | |
| Jan 27 2024 | 2023 Q4 | ACGL, FICO, IDXX, IT, TRU, WST | - | - | |
| Sep 30 2023 | 2023 Q3 | ACGL, CSGP, FDS, IDXX, MTD, ONON | - | - | |
| Jul 30 2023 | 2023 Q2 | ARE, AZPN, BAH, CDAY, CSGP, FDS, IT, MKTX, MORN, MTD, VRSK | - | - | |
| Mar 31 2023 | 2023 Q1 | ANSS, CSGP, FRC, GWRE, ICLR, IDXX, IT, LPLA, MKTX, PWR, RGEN, TECH, WST | - | - | |
| Mar 2 2023 | 2022 Q4 | ACGLN, AZPN, FICO, FIS, HUBS, ICLR, IDXX, IT, MTD, RIVN, TTD, WIX, WST, ZI | - | - | |
| Oct 25 2022 | 2022 Q3 | CDAY, CSGP, FND, ICLR, IT, LPLA, MTD, SCHW, TECH, TRU, VEEV, WST, ZI | - | - | |
| Jun 30 2022 | 2022 Q2 | ANSS, ARGX, FND, ICLR, IDXX, MTD, OT, ROL, ZI | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
Life Science ToolsThe Fund maintains 14.2% allocation to life sciences tools & services. End markets are improving with strong biotechnology funding, stable biopharmaceutical R&D investment, and reduced risk of industry disruption following drug pricing agreements with the Trump Administration. |
Research Tools Bioprocessing Equipment | |
SpaceSpaceX is generating significant value with rapid expansion of Starlink broadband service, deploying vast satellite constellation with substantial user growth. The company has established itself as leading launch provider with reusable technology and is making tremendous progress on Starship rocket. SpaceX represents the fund's largest position at 19.2% of net assets. |
Satellites Launch Starlink Starship Reusable | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
| 2025 Q2 |
DiversificationThe Fund remains purposefully diversified despite market leadership being narrow and focused on AI. This discipline reflects commitment to effective risk management and appropriate diversification, which weighed on relative performance but positions the Fund well for various market scenarios. |
Risk Management Portfolio Construction Concentration |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 8, 2025 | Fund Letters | Andrew Peck | STUB | StubHub Holdings, Inc. | Communication Services | Specialized Consumer Services | Bull | NYSE | IPO, marketplace, Networkeffects, Scalability, Tickets | Login |
| TICKER | COMMENTARY |
|---|---|
| ACGL | Shares of specialty insurer Arch Capital Group Ltd. rose on strong earnings results and active capital management. Third-quarter earnings per share beat Street expectations due to improved underwriting margins and very low catastrophe losses, as there were no landfall hurricanes in the U.S. this season for the first time since 2015. |
| APH | We trimmed Amphenol Corp. |
| AXON | Axon Enterprise Inc. develops and produces Taser weapons and body cameras for law enforcement agencies. Investors have grown accustomed to big beats and raises from Axon. A slight beat to third-quarter projections and mixed fourth-quarter guidance triggered a -21% decline. We added to the position due to solid customer growth and retention. There are also numerous growth drivers for their business including Taser 10, bodycam 4, and their artificial intelligence software bundle. |
| BAH | Booz Allen is a consulting firm focused largely on serving the nation's defense (~50% of revenue), intelligence (~15%) and civil (~35%) agencies. The company's work is mostly focused on technology solutions – e.g. digital transformation, cyber defense, and AI deployment. Following the 2024 election of the Trump administration, BAH shares rapidly de-rated from a peak of nearly 30x EPS to a recent trough of 14x – largely due to "DOGE" cost-cutting fears. While BAH has seen earnings and contract award headwinds under the new administration, Upslope's view is that these will prove temporary and that the stock's current valuation more than compensates investors for short-term challenges and uncertainty. More importantly, Booz should continue to benefit from several accelerating or stable long-term secular tailwinds: rising geopolitical risks, rapidly evolving technology usage and threats, and expanding size of government. |
| BIRK | The biggest laggard in the Consumer Discretionary sector was footwear manufacturer Birkenstock, which provided guidance for fiscal year 2026 that was below expectations, despite reporting a strong third quarter that exceeded both top- and bottom-line estimates. The company cited production constraints, which would limit volume growth to ~10%, and a shift to selling through wholesalers, as customers now prefer buying in-store versus online. We believe the softer Q3 guidance will prove to be conservative and the stock is set up for a solid 2026. |
| CSGP | The shares of CoStar Group, Inc., the global leader in digitizing real estate, declined in the fourth quarter, due to concerns that the company's residential Homes.com platform will continue to require significant capital investment and competitive worries that Google's new real estate advertisement format and Zillow's OpenAI partnership could divert traffic from Homes.com in the years ahead. |
| FICO | Fair Isaac Corporation (FICO), a data and analytics company focused on predicting consumer behavior, contributed to performance. FICO reported strong quarterly financial results and solid fiscal 2026 guidance, which calls for 28% EPS growth. The company also launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
| GWRE | Shares of P&C insurance software vendor Guidewire Software, Inc. declined during the quarter following strong gains earlier in the year, as the broader software sector came under pressure. After a multi-year transition period, we think Guidewire's cloud migration is largely complete. We believe cloud will be the sole path forward, with annual recurring revenue benefiting from new customer wins and migrations of existing customers to InsuranceSuite Cloud. |
| IDXX | Veterinary diagnostics leader IDEXX Laboratories, Inc. contributed to performance after again reporting better-than-expected financial results. Foot traffic to veterinary clinics in the U.S. remains modestly negative but is poised to recover over the next several years. Even so, IDEXX's excellent execution has enabled the company to continue delivering robust performance. |
| IEX | IDEX's stock had a welcome bounce as the company's organic growth and order book inflected higher in line with our thesis. |
| IT | Gartner is a global leader in research services, with a long history of delivering valuable insights and data to business and technology leaders. In our view, the company has the best brand in IT research, supported by its scale and a compelling customer value proposition. These advantages have driven a long history of strong organic growth and robust free-cash-flow conversion. The stock price has declined meaningfully from recent highs due to investor concerns surrounding AI-related disruption. We believe these concerns are overstated. In our view, Gartner is well-positioned to reaccelerate organic growth due to continued high customer engagement and the large opportunity to sell to new and existing customers. We took advantage of the opportunity to buy shares in this well-managed company at a bargain price. |
| MTD | Mettler-Toledo's stock rebounded in the fourth quarter reflecting the company's ability to successfully navigate substantial tariff and research budget pressures while maintaining strong growth and margin expansion in key segments. We believe Mettler should be well positioned to capitalize on global trends in automation, digitalization, and nearshoring which should drive mid-single digit revenue and low teens EPS growth through 2030. |
| RPGN | We reestablished a position in Repligen Corporation during the quarter. The company manufactures sophisticated tools for the bioprocessing industry. Repligen operates in fast-growing end markets – primarily monoclonal antibodies (8% to 10% market growth), as well as cell and gene therapies (over 30% market growth). |
| SPOT | Spotify is the world's leading audio streaming platform. Third-quarter results showed continued operating progress, with users increasing 11% to 713 million and subscribers growing 12% to 281 million. Meanwhile, operating income expanded to a mid-teens margin, alongside a record quarterly free cash flow. Despite the momentum, the shares weakened as investors reset near-term margin expectations. Spotify has been a top contributor to long-term Fund performance, and we remain confident that pricing, product innovation, advertising efficiency, and an expanding ecosystem can continue to widen margins over time, as reinforced this quarter by the launch of Spotify recommendations within ChatGPT. |
| TTD | Communication Services also detracted from relative performance, driven by early-year weakness in The Trade Desk (TTD). The company, one of the world's largest independent demand-side advertising platforms, faced its first revenue miss in more than eight years and issued softer-than-consensus expected guidance. These challenges were compounded by disruptions from a sales reorganization and slower adoption of its new AI-powered platform, Kokai. |
| VEEV | Veeva Systems Inc. provides industry cloud solutions to the global life sciences industry. The company delivered solid fiscal third-quarter results and issued guidance above the Street. Veeva management reiterated confidence in achieving its 2030 financial targets, maintaining that the current focus on competitive dynamics with Salesforce.com in the customer relationship management (CRM) market (20% of Veeva's total revenues) does not undermine its long-term trajectory. Despite these positives, the stock sold off by -25% on competitive concerns in the CRM market as Veeva projected lower Vault CRM customer versus its initial expectations. |
| VRSK | From a stock selection perspective, our positions in Verisk Analytics, Inc. (VRSK) and Watsco, Inc. (WSO) were the biggest laggards. |
| WELL | During the height of COVID, Welltower and other healthcare real estate stocks were battered. In the span of two years Welltower's earnings dropped by a third as occupancy in its properties plummeted. Its valuation fell in sympathy and to our eye went too far. Welltower was a small position in the fund as the pandemic hit its peak, and we began adding to our position. When the pandemic receded Welltower began to show tremendous growth as it rebuilt occupancy, albeit off a very low base. Nevertheless, investors were cheered and the company began to experience multiple expansion. As its cost of equity dropped, the capital markets opened and Welltower began raising capital to purchase senior housing assets that, for all practical purposes, no one else wanted to own. That fueled even better earnings growth above and beyond what it was getting from occupancy growth. A virtuous cycle began where Welltower parlayed positive spread investing to become one of the biggest public real estate companies in existence. It is now the single largest company in our benchmark at almost 9% of its total market capitalization. This compares to 2022 when it was the fifth largest in the benchmark and only 4% of its total market capitalization. But like all good things, there are limits. Welltower has long been and still is the most expensive stock in our universe by a considerable margin, and that's after accounting for robust growth expectations. Unfortunately for us, we had completely exited the stock by January 2025. |
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