Baron Asset Fund

Investor Summary

Baron Asset Fund is managed by Andrew Peck, who serves as Senior Vice President, Co-Chief Investment Officer, and Portfolio Manager at BAMCO, Inc. and Baron Capital Management, Inc. Peck joined Baron Capital in 1998 as a research analyst and was named portfolio manager of Baron Asset Fund in 2003, later becoming co-chief investment officer in 2020. He brings over 29 years of research experience, having previously worked as an equity analyst at Salomon Brothers from 1992 to 1994. The fund was launched on May 29, 2009 for the institutional class, though the underlying fund dates back to June 12, 1987. Baron Capital was founded in 1982 by Ron Baron and is headquartered in New York, employing between 201-500 people specializing in growth equity investment solutions through a long-term, fundamental, and research-driven approach. The institutional class requires a minimum investment of $1,000,000 and operates as a true no-load fund with an expense ratio of 1.04%.

Fund Strategy

Baron Capital's investment philosophy centers on long-term investments in secular growth businesses with durable competitive advantages led by strong management teams. Every Baron Capital portfolio is built from the bottom up, stock by stock, based on conviction about the future growth prospects of each business. The firm has a deeply embedded risk management culture, viewing risk as the probability of an adverse outcome leading to permanent loss of capital. Their investment process includes rigorous research to identify long-term growth opportunities, focusing on companies capable of doubling in value over a five-year horizon. Baron Capital models financials looking five years out rather than quarter-to-quarter earnings, with average portfolio turnover around 10-15% per year, implying ownership for five years or longer. The fund seeks capital appreciation through long-term investments primarily in securities of mid-sized companies with undervalued assets or favorable growth prospects, defining mid-sized companies as those with market capitalizations above $2.5 billion or aligned with the Russell Midcap Growth Index.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
11.25%	18.9%	9.54%

Executive Summary

Baron Asset Fund rose 18.98% in Q2 2026, outperforming the Russell Midcap Growth Index by 443 basis points despite significant headwinds from Beta and Momentum factors that posted exceptional performance. The Fund's outperformance was driven primarily by its large SpaceX position, which completed the largest IPO in history raising over $85 billion and appreciated more than 3,000% since initial investment. Market returns were driven by a narrow group of AI beneficiary stocks, with semiconductors nearly doubling during the quarter. The manager believes many of the Fund's software and services holdings have been unfairly penalized by AI disruption fears, now trading at a 47% discount to 10-year average multiples despite 27% fundamental growth and only 3% multiple compression in other holdings. These businesses lost 37.6% over the past year due to 46% multiple compression, not fundamental deterioration. The manager expects valuations to re-rate higher as market leadership broadens, supported by evidence of reversal since late June with software and services holdings rallying 12% while semiconductors corrected 30%. The Fund maintains concentrated positions in businesses benefiting from secular trends in infrastructure spending, medical devices, and AI infrastructure, with the top 10 holdings representing 65% of assets and six held for over a decade.

Core Thesis

The Fund invests in mid-cap growth companies with significant competitive advantages, best-in-class management teams, and secular growth tailwinds, holding concentrated positions for extended periods. The manager believes the current market environment has created exceptional opportunities in software and services businesses that have been unfairly penalized by AI disruption fears, now trading at historically low valuations despite resilient fundamentals and 27% fundamental growth. The Fund's large SpaceX position provides exposure to massive addressable markets in connectivity, launch, infrastructure, and AI, while other holdings benefit from secular trends in infrastructure spending, medical device innovation, and AI infrastructure buildout.

Forward Outlook

The manager remains optimistic that the Fund is positioned to continue outperforming, particularly as the Fund's overexposure to software and services businesses becomes a positive tailwind. Despite material improvement in these businesses' prospects, they are trading at exceptionally attractive valuations and the manager expects valuations to re-rate higher as market leadership broadens beyond existing AI beneficiaries. The manager is encouraged by evidence since late June of a sustained reversal of the AI winners trade, with software and services holdings up 12% on a weighted average basis while the Index declined 6.1% and semiconductors corrected nearly 30%. The manager believes many high-quality, competitively advantaged businesses have been unfairly penalized by indiscriminate AI disruption fears, and that strong financial results will continue to demonstrate resilience. The manager expects these companies will utilize AI to improve products, lower costs, and enhance rather than undermine their competitive positions.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Aug 11 2026	2026 Q2	ACGL, APH, BAH, CBRS, CSGP, EW, FICO, FND, GWRE, IT, PWR, SCHW, SPCE, TW, VRSK	AI, growth, infrastructure, mid cap, semiconductors, software, Space	-	Baron Asset Fund outperformed by 443 basis points in Q2 2026 despite headwinds from narrow AI-driven market leadership, powered by SpaceX's historic IPO and 3,000%+ appreciation. Software and services holdings trade at 47% discounts to historical multiples after indiscriminate AI disruption fears drove 46% multiple compression despite 27% fundamental growth. The manager expects re-rating as these high-quality businesses demonstrate AI enhances rather than disrupts their competitive positions.
May 5 2026	2026 Q1	ACGL, CSGP, GWRE, IDXX, IT, MORN, QDEL, TECH, VEEV, VMC, VRT	AI, Data centers, industrials, infrastructure, mid cap, software, Space, technology	VRT CSGP IT GWRE	Baron Asset Fund underperformed due to AI disruption fears hitting software holdings, despite no fundamental business impact. SpaceX remains largest position at 25.5% with upcoming IPO catalyst. Data center infrastructure companies performed well. Manager views current software valuations at 10-year lows as attractive entry points for quality businesses with durable competitive advantages.
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	-	Baron Asset Fund outperformed significantly in Q4 2025, driven by private investments SpaceX and X.AI Holdings which benefited from AI and space technology trends. The fund maintains concentrated positions in quality growth companies with competitive advantages. Management expects continued market appreciation for high-quality businesses amid favorable economic conditions and potential SpaceX IPO catalyst in 2026.
Nov 8 2025	2025 Q3	ACGL, ALNY, APH, CHH, COIN, COR, CSGP, DAY, DKNG, DUOL, FDS, FICO, FND, GWRE, IDXX, IT, LOAR, MORN, MPWR, MTD, NET, ONON, PLTR, PWR, RBLX, STUB, VRSK, VRT, VST	aerospace, AI, growth, mid cap, Quality, technology, underperformance, valuation	STUB	Baron Asset Fund underperformed in Q3 as markets continued rewarding lower-quality, speculative stocks over the Fund's high-quality holdings. The Fund's quality-focused approach faced historic headwinds with earnings quality suffering its worst performance since 1975. Despite challenging conditions, the Fund maintains conviction in its businesses' improving fundamentals and compelling valuations, expecting eventual market recognition of quality companies.
Jul 29 2025	2025 Q2	ACGL, APH, COO, CSGP, DKNG, FICO, GRMN, GWRE, IDXX, IOT, LPLA, MSCI, MT, PCOR, PWR, ROP, SCHW, TECH, VRSK, WST	growth, healthcare, industrials, Long Term, mid cap, Quality, software, technology	SAMS LPLA	Baron Asset Fund's quality-focused approach faced headwinds in Q2's risk-on rally, underperforming as high-beta momentum stocks surged. Not owning Palantir significantly hurt relative performance. The Fund added AI-enabled software platform Samsara and financial services firm LPL Financial while trimming longtime holdings. Manager maintains conviction in secular growth companies despite style headwinds.
Mar 31 2025	2025 Q1	ACGL, CSGP, DKNG, FICO, GWRE, H, IDEXX, IT, MTD, ONON, ROP, SAIL, SCHW, SPACEX, SPOT, TECH, TTD, VRSK, VRT, WST	AI, Data centers, growth, insurance, mid cap, tariffs, technology	GDWR VRSK VRT DKNG	Baron Asset Fund outperformed by 423 basis points in Q1 2025 despite market weakness from tariff concerns and stagflation fears. Strong stock selection in Communications Services, IT, and Financials drove performance, led by AI company X.AI Holdings and software firms. The fund benefited from underexposure to high-beta stocks during the risk-off rotation and remains positioned in high-quality secular growth companies.
Jan 29 2025	2024 Q4	ACGL, ANSYS, AXON, AZPN, CDW, CSGP, DAY, FICO, GWRE, ICLR, IDXX, IT, MTD, MTN, PCOR, ROP, SCHW, TTAN, VRSK, WELL	growth, healthcare, industrials, Long Term, mid cap, Quality, technology	STTN	Baron Asset Fund's Q4 underperformance was driven by not owning two explosive software stocks and maintaining exposure to high-quality, lower-volatility companies during a risk-on market rally. The fund's focus on competitively advantaged businesses with visible earnings streams positions it well for when markets shift away from speculative investments toward quality fundamentals.
Sep 30 2024	2024 Q3	ACGL, COO, CSGP, DUOL, DXCM, FDS, FICO, GWRE, ICON, IDXX, IT, LPLA, MTD, ROP, SCHW, TRU, VMC, VRSK, WELL, WST	growth, healthcare, mid cap, rates, real estate, software, technology	-	Baron Asset Fund outperformed in Q3 as Fed rate cuts triggered rotation favoring mid-caps over large-cap momentum. Strong stock selection led by cloud software transition stories like Guidewire and AI-positioned Gartner drove performance. New positions in senior housing demographics play Welltower and language learning leader Duolingo. Manager expects continued mid-cap outperformance as lower rates benefit quality growth companies with visible earnings.
Jul 27 2024	2024 Q2	AAPL, ACGL, AMZN, BAH, CSGP, DDAY, FDS, FICO, GOOGL, GWRE, IDXX, IT, META, MSFT, MTD, MTN, NVDA, PCOR, RGEN, ROP, SPOT, TROW, TSLA, VMC, VRSK, VRSN	AI, growth, healthcare, industrials, infrastructure, insurance, mid cap, technology	VRSK GWRE FICO XAI VMC	Baron Asset Fund declined 3.51% in Q2 as mega-cap tech stocks dominated market returns while mid-caps underperformed. The Fund made a significant investment in Elon Musk's X.AI Corp and added infrastructure play Vulcan Materials. Manager expects narrow market leadership to reverse as Fed cuts rates, benefiting quality mid-cap growth companies with secular tailwinds over speculative names.
Apr 15 2024	2024 Q1	ACGL, ANSYS, CSGP, DAY, FDS, FICO, GWRE, HLT, IDXX, IT, MTD, PCOR, ROP, SPOT, TECH, TTD, VEEV, VRSK, VRSN	growth, healthcare, industrials, Long Term, mid cap, software, technology	PCOR SPOT	Baron Asset Fund's Q1 underperformance reflects style headwinds as momentum-driven markets favored higher-volatility names over the Fund's quality growth holdings. Strong results from insurance specialist Arch Capital and research provider Gartner were offset by China-related weakness in Bio-Techne. New positions in construction software leader Procore and streaming giant Spotify position the Fund for secular growth themes while mid-cap valuations remain attractive.
Jan 27 2024	2023 Q4	ACGL, ANSYS, AXON, BIRK, CHH, CSGP, DXCM, FDS, FICO, GWRE, IDXX, IT, MTD, MTN, PWR, TRU, VEEV, VRSK, WST	Diagnostics, growth, healthcare, industrials, mid cap, software, technology	BIRK	Baron Asset Fund's concentrated mid-cap growth strategy delivered 12.45% in Q4 but lagged benchmarks due to style headwinds. Strong performance from AI-positioned Gartner and veterinary leader IDEXX offset weakness in TransUnion and defensive names. With 51 positions focused on secular growth themes, the fund is positioned for outperformance as markets favor quality over speculation.
Sep 30 2023	2023 Q3	ACGL, ANSYS, AXON, AZPN, BAH, CSGP, FDS, FICO, GWRE, IDXX, ILMN, IT, MKTX, MORN, MTD, MTN, ONON, PWR, SBAC, VRSK, ZI	analytics, growth, insurance, mid cap, software, technology	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK ACGL\|CHH\|FDS\|GWRE\|IBKR\|IDXX\|MTN\|SPOT\|TSLA ACGL ONON ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	Baron Asset Fund outperformed during Q3's market decline through strong technology stock selection and defensive positioning. Cloud software and insurance technology holdings drove gains while the fund avoided higher beta stocks. New position in athletic footwear leader On Holding capitalizes on athleisure trends. Manager expects improving conditions for quality growth companies as inflation moderates and rates decline.
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	-	-

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Aug 11 2026

2026 Q2

ACGL, APH, BAH, CBRS, CSGP, EW, FICO, FND, GWRE, IT, PWR, SCHW, SPCE, TW, VRSK

AI, growth, infrastructure, mid cap, semiconductors, software, Space

Baron Asset Fund outperformed by 443 basis points in Q2 2026 despite headwinds from narrow AI-driven market leadership, powered by SpaceX's historic IPO and 3,000%+ appreciation. Software and services holdings trade at 47% discounts to historical multiples after indiscriminate AI disruption fears drove 46% multiple compression despite 27% fundamental growth. The manager expects re-rating as these high-quality businesses demonstrate AI enhances rather than disrupts their competitive positions.

May 5 2026

2026 Q1

ACGL, CSGP, GWRE, IDXX, IT, MORN, QDEL, TECH, VEEV, VMC, VRT

AI, Data centers, industrials, infrastructure, mid cap, software, Space, technology

VRT
CSGP
IT
GWRE

Baron Asset Fund underperformed due to AI disruption fears hitting software holdings, despite no fundamental business impact. SpaceX remains largest position at 25.5% with upcoming IPO catalyst. Data center infrastructure companies performed well. Manager views current software valuations at 10-year lows as attractive entry points for quality businesses with durable competitive advantages.

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

Baron Asset Fund outperformed significantly in Q4 2025, driven by private investments SpaceX and X.AI Holdings which benefited from AI and space technology trends. The fund maintains concentrated positions in quality growth companies with competitive advantages. Management expects continued market appreciation for high-quality businesses amid favorable economic conditions and potential SpaceX IPO catalyst in 2026.

Nov 8 2025

2025 Q3

ACGL, ALNY, APH, CHH, COIN, COR, CSGP, DAY, DKNG, DUOL, FDS, FICO, FND, GWRE, IDXX, IT, LOAR, MORN, MPWR, MTD, NET, ONON, PLTR, PWR, RBLX, STUB, VRSK, VRT, VST

aerospace, AI, growth, mid cap, Quality, technology, underperformance, valuation

STUB

Baron Asset Fund underperformed in Q3 as markets continued rewarding lower-quality, speculative stocks over the Fund's high-quality holdings. The Fund's quality-focused approach faced historic headwinds with earnings quality suffering its worst performance since 1975. Despite challenging conditions, the Fund maintains conviction in its businesses' improving fundamentals and compelling valuations, expecting eventual market recognition of quality companies.

Jul 29 2025

2025 Q2

ACGL, APH, COO, CSGP, DKNG, FICO, GRMN, GWRE, IDXX, IOT, LPLA, MSCI, MT, PCOR, PWR, ROP, SCHW, TECH, VRSK, WST

growth, healthcare, industrials, Long Term, mid cap, Quality, software, technology

SAMS
LPLA

Baron Asset Fund's quality-focused approach faced headwinds in Q2's risk-on rally, underperforming as high-beta momentum stocks surged. Not owning Palantir significantly hurt relative performance. The Fund added AI-enabled software platform Samsara and financial services firm LPL Financial while trimming longtime holdings. Manager maintains conviction in secular growth companies despite style headwinds.

Mar 31 2025

2025 Q1

ACGL, CSGP, DKNG, FICO, GWRE, H, IDEXX, IT, MTD, ONON, ROP, SAIL, SCHW, SPACEX, SPOT, TECH, TTD, VRSK, VRT, WST

AI, Data centers, growth, insurance, mid cap, tariffs, technology

GDWR
VRSK
VRT
DKNG

Baron Asset Fund outperformed by 423 basis points in Q1 2025 despite market weakness from tariff concerns and stagflation fears. Strong stock selection in Communications Services, IT, and Financials drove performance, led by AI company X.AI Holdings and software firms. The fund benefited from underexposure to high-beta stocks during the risk-off rotation and remains positioned in high-quality secular growth companies.

Jan 29 2025

2024 Q4

ACGL, ANSYS, AXON, AZPN, CDW, CSGP, DAY, FICO, GWRE, ICLR, IDXX, IT, MTD, MTN, PCOR, ROP, SCHW, TTAN, VRSK, WELL

growth, healthcare, industrials, Long Term, mid cap, Quality, technology

STTN

Baron Asset Fund's Q4 underperformance was driven by not owning two explosive software stocks and maintaining exposure to high-quality, lower-volatility companies during a risk-on market rally. The fund's focus on competitively advantaged businesses with visible earnings streams positions it well for when markets shift away from speculative investments toward quality fundamentals.

Sep 30 2024

2024 Q3

ACGL, COO, CSGP, DUOL, DXCM, FDS, FICO, GWRE, ICON, IDXX, IT, LPLA, MTD, ROP, SCHW, TRU, VMC, VRSK, WELL, WST

growth, healthcare, mid cap, rates, real estate, software, technology

Baron Asset Fund outperformed in Q3 as Fed rate cuts triggered rotation favoring mid-caps over large-cap momentum. Strong stock selection led by cloud software transition stories like Guidewire and AI-positioned Gartner drove performance. New positions in senior housing demographics play Welltower and language learning leader Duolingo. Manager expects continued mid-cap outperformance as lower rates benefit quality growth companies with visible earnings.

Jul 27 2024

2024 Q2

AAPL, ACGL, AMZN, BAH, CSGP, DDAY, FDS, FICO, GOOGL, GWRE, IDXX, IT, META, MSFT, MTD, MTN, NVDA, PCOR, RGEN, ROP, SPOT, TROW, TSLA, VMC, VRSK, VRSN

AI, growth, healthcare, industrials, infrastructure, insurance, mid cap, technology

VRSK
GWRE
FICO
XAI
VMC

Baron Asset Fund declined 3.51% in Q2 as mega-cap tech stocks dominated market returns while mid-caps underperformed. The Fund made a significant investment in Elon Musk's X.AI Corp and added infrastructure play Vulcan Materials. Manager expects narrow market leadership to reverse as Fed cuts rates, benefiting quality mid-cap growth companies with secular tailwinds over speculative names.

Apr 15 2024

2024 Q1

ACGL, ANSYS, CSGP, DAY, FDS, FICO, GWRE, HLT, IDXX, IT, MTD, PCOR, ROP, SPOT, TECH, TTD, VEEV, VRSK, VRSN

growth, healthcare, industrials, Long Term, mid cap, software, technology

PCOR
SPOT

Baron Asset Fund's Q1 underperformance reflects style headwinds as momentum-driven markets favored higher-volatility names over the Fund's quality growth holdings. Strong results from insurance specialist Arch Capital and research provider Gartner were offset by China-related weakness in Bio-Techne. New positions in construction software leader Procore and streaming giant Spotify position the Fund for secular growth themes while mid-cap valuations remain attractive.

Jan 27 2024

2023 Q4

ACGL, ANSYS, AXON, BIRK, CHH, CSGP, DXCM, FDS, FICO, GWRE, IDXX, IT, MTD, MTN, PWR, TRU, VEEV, VRSK, WST

Diagnostics, growth, healthcare, industrials, mid cap, software, technology

BIRK

Baron Asset Fund's concentrated mid-cap growth strategy delivered 12.45% in Q4 but lagged benchmarks due to style headwinds. Strong performance from AI-positioned Gartner and veterinary leader IDEXX offset weakness in TransUnion and defensive names. With 51 positions focused on secular growth themes, the fund is positioned for outperformance as markets favor quality over speculation.

Sep 30 2023

2023 Q3

ACGL, ANSYS, AXON, AZPN, BAH, CSGP, FDS, FICO, GWRE, IDXX, ILMN, IT, MKTX, MORN, MTD, MTN, ONON, PWR, SBAC, VRSK, ZI

analytics, growth, insurance, mid cap, software, technology

Baron Asset Fund outperformed during Q3's market decline through strong technology stock selection and defensive positioning. Cloud software and insurance technology holdings drove gains while the fund avoided higher beta stocks. New position in athletic footwear leader On Holding capitalizes on athleisure trends. Manager expects improving conditions for quality growth companies as inflation moderates and rates decline.

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
2026 Q2	AI AI drove narrow market leadership during Q2 2026, with semiconductor stocks nearly doubling. The manager believes many software and services holdings have been unfairly penalized by AI disruption fears, trading at historically low valuations despite resilient fundamentals. The manager expects these companies to utilize AI to improve products, lower costs, and enhance competitive positions rather than be disrupted.	Semiconductors Software Disruption Valuation Infrastructure
	Space SpaceX completed the largest IPO in history, raising over $85 billion, and the Fund's position appreciated by more than 3,000%. The company signed landmark compute hosting deals totaling tens of billions annually with Anthropic and Google, acquired AI coding platform Cursor, and successfully tested its latest Starship rocket. The manager believes SpaceX provides exposure to massive addressable markets including connectivity, launch, infrastructure, and AI.	SpaceX IPO Satellites Infrastructure Compute
	Software Software and services holdings lost 37.6% during the year due to 46% multiple compression driven by AI disruption fears, despite 27% fundamental growth. These businesses now trade at a 47% discount to 10-year average multiples. The manager believes this sell-off has been indiscriminate and that strong financial results demonstrate business resilience. Since June 30, these holdings have rallied 12% on a weighted average basis.	Valuation Multiple compression AI disruption Business services
	Semiconductors The iShares Semiconductor ETF gained nearly 100% during Q2 2026, driving IT sector outperformance. The Fund has limited direct exposure to semiconductors, which created a headwind to relative performance. The manager initiated a position in Cerebras Systems, a differentiated AI accelerator company with a $20 billion OpenAI contract, believing it will benefit from growing demand for fast inference workloads.	AI accelerators Inference Cerebras Performance
	Data Centers SpaceX signed compute hosting deals totaling tens of billions of dollars annually with market leaders including Anthropic and Google. Cerebras secured a $20 billion contract with OpenAI for a 750 megawatt data center with optionality to extend by another 1.25 gigawatts. The manager believes AI infrastructure buildout will sustain strong momentum with large portions requiring fast inference capabilities.	Compute Infrastructure AI workloads Hyperscalers
	Infrastructure Spending Quanta Services raised full-year guidance substantially after strong Q1 earnings, with management reiterating mid-to-high teens earnings growth through at least the end of the decade. This growth is supported by secular trends including grid modernization, electrification, energy transition, industrial reshoring, and communications infrastructure upgrades. The company has delivered 25% earnings CAGR since 2015.	Grid modernization Electrification Reshoring Construction
	Medical Devices The manager initiated a position in Edwards Lifesciences, the leader in transcatheter aortic valve replacement (TAVR) with dominant market share supported by strong clinical evidence. The TAVR market can grow from $7 billion to over $10 billion as indications expand, while the mitral and tricuspid valve (TMTT) market can grow from $1.5 billion to $8 billion. Combined addressable market of nearly $20 billion supports low double-digit revenue growth and mid-teens EPS growth.	TAVR Heart valves Clinical evidence Market expansion
	P&C Insurance Arch Capital's stock failed to participate in the Q2 rally as investors rotated away from resilient insurance stocks when market volatility eased. Soft pricing trends emerged in property insurance due to strong profitability and elevated capital levels following last year's benign hurricane season. The manager views this cyclicality as normal and continues to own Arch due to strong management and expectations for continued earnings and book value growth.	Pricing Cyclicality Capital levels Hurricane season
2026 Q1	AI Manager believes AI disruption fears have led to indiscriminate selling across software and services industries, creating attractive valuations for quality businesses. Views AI as a generational shift that will create winners and losers, but believes the fund's software holdings will prove durable and benefit from AI tailwinds.	Software Disruption Valuations Technology Innovation
	Data Centers Strong performance from data center infrastructure companies like Vertiv and Forgent Power Solutions. Electrical equipment remains a key bottleneck in AI data center buildout, creating opportunities for specialized manufacturers with strong order books and expanding manufacturing capabilities.	Infrastructure Electrical Equipment Manufacturing Growth
	Space SpaceX is the fund's largest position at 25.5% of net assets, generating significant value through Starlink broadband expansion and establishing itself as a leading launch provider. The company is making tremendous progress on Starship and intends to complete an IPO in the next few months at a valuation above current price.	SpaceX Starlink Launch IPO
	Infrastructure Spending Favorable trends in infrastructure-related spending driven by federal and state funding for new projects. Non-residential construction spending driven by data center construction, reshoring/onshoring of manufacturing, and industrial categories expected to continue for several years.	Construction Government Reshoring Manufacturing
2025 Q4	AI Edgewood views AI as creating significant opportunities through infrastructure buildout and new applications. The firm highlights AI servers requiring greater connector content, AI driving cloud demand acceleration, and Draft One as an AI killer app for police reports. They see AI expanding beyond data centers into factories and robotics.	Infrastructure Cloud Applications Automation
	Semiconductors The firm maintains significant exposure to semiconductor companies including NVIDIA, Broadcom, and ASML. They view the semiconductor cycle as having years to run with AI driving structural demand. Portfolio includes both chip designers and equipment companies positioned for next-generation architectures.	Memory Equipment Design Manufacturing
	Software Edgewood emphasizes software companies with recurring revenue models and high margins. They highlight companies like ServiceNow, Intuit, and Synopsys that benefit from digital transformation and AI integration. Software represents 43% of revenue with 77% adjusted gross margins in their portfolio allocation.	SaaS Enterprise Recurring Margins
	Healthcare The firm maintains exposure to healthcare through companies like Eli Lilly, Vertex, and Boston Scientific. They view healthcare as offering durable growth with strong competitive moats. Eli Lilly was a top contributor in Q4 with 41% returns, representing 6.4% of the portfolio.	Pharmaceuticals Devices Innovation Demographics
2025 Q3	AI The Fund discusses AI as a primary driver of market strength and data center capital spending growth. AI is creating both opportunities and challenges, with companies seeking guidance on AI risks and opportunities. The Fund believes AI should provide a tailwind for research companies like Gartner as businesses need help understanding AI implications.	Artificial Intelligence Data Centers Technology Innovation Automation
	Quality The Fund emphasizes its focus on high-quality, competitively advantaged companies with best-in-class management teams. The market environment has been challenging for high-quality companies, with lower-quality earnings companies outperforming by the widest margin since 1975. The Fund maintains conviction that investors will eventually reward high-quality businesses.	Earnings Quality Competitive Advantages Management Fundamentals Valuation
	Aerospace The Fund initiated a position in Loar Holdings, a niche aerospace parts manufacturer with 85% proprietary products and over 50% aftermarket revenues. The aerospace industry benefits from growing passenger miles, strong pricing power, and high barriers to entry. SpaceX continues expanding Starlink broadband service and advancing rocket technology including the Starship program.	Aerospace Components Defense Space Aviation Aftermarket
	Data Centers Data center capital spending continues to rise with accelerating AI adoption. Amphenol, a leading supplier of advanced interconnect systems for data centers, gained during the quarter as expectations for data center spending increased. The company announced its largest-ever acquisition to strengthen its position in this growing market.	Infrastructure Cloud Interconnect Technology Hardware Capital Spending
2025 Q2	AI AI-related investments drove significant market momentum during the quarter, with data center infrastructure and AI-enabled software platforms benefiting from increased capital spending. The Fund's holdings like Amphenol gained from AI-driven data center demand, while Samsara leverages AI to help companies optimize operations and prevent accidents.	Data Centers Software Analytics Automation Infrastructure
	Software Enterprise software companies demonstrated strong performance with subscription-based models showing resilience. Guidewire Software benefited from cloud migrations and ARR growth, while Samsara's cloud-native platform gained market share in connected fleet software with rapid product development cycles.	SaaS Cloud Enterprise Software Subscription ARR
	Data Centers Data center infrastructure investments accelerated during the quarter, partly driven by AI-related capital spending. Amphenol reported robust results with organic growth exceeding guidance primarily due to strength in its data center end market as investors became optimistic about increased infrastructure spending.	Infrastructure AI Cloud Connectivity Growth
2025 Q1	AI The fund holds X.AI Holdings Corp., which is developing an AI model to understand the true nature of the universe. xAI launched Grok 3, demonstrating elevated user engagement and top scores in evaluation tests, surpassing other industry-leading AI models. The company operates the world's largest coherent training center with over 100,000 GPUs.	Artificial Intelligence Machine Learning Data Centers Computing Innovation
	Data Centers The fund initiated a position in Vertiv Holdings Co, a global leader providing critical data infrastructure solutions for data centers. Vertiv provides solutions to cool and power data centers, with equipment required as rack density in AI data centers is expected to increase from 5-10kW per rack to potentially 900-1,000+ kW per rack over the next five years.	Infrastructure Cooling Power Technology Growth
	Trade Policy Trump's plans to impose sweeping tariffs on major U.S. trade partners shifted market sentiment and created uncertainty around the macroeconomic environment. The unknown implications of higher tariffs and potential trade war with both enemies and allies have given investors pause and contributed to market pullback.	Tariffs Trade War Policy Uncertainty Markets
	Sports Betting The fund holds DraftKings Inc., a dominant player in the domestic online sports betting industry evolving towards a favorable duopoly market structure. The company is positioned to capitalize on rapid growth of the U.S. sports betting market, with online betting expected to expand at 15% to 17% same-state growth rate over the next several years.	Gaming Digital Growth Market Share Regulation
2024 Q4	AI The fund discusses AI through its investment in X.AI Corp, founded by Elon Musk, which has developed the Grok AI model that has achieved impressive results compared to established AI models. The company operates the Colossus data center with over 100,000 GPUs, making it the largest coherent training center globally. The upcoming Grok 3 release is expected to significantly improve capabilities and expand monetization strategies.	Artificial Intelligence Machine Learning Data Centers GPUs Foundation Models
	Space SpaceX is highlighted as a major contributor to performance, focusing on developing advanced rockets, satellites, and spacecraft with the goal of enabling human colonization of Mars. The company generates significant value through Starlink broadband service expansion and has established itself as a leading launch provider with reusable technology. SpaceX is making tremendous progress on Starship, the largest and most powerful rocket ever flown.	Aerospace Satellites Launch Services Broadband Reusable Technology
	Software The fund maintains significant exposure to enterprise software companies including Gartner, Guidewire, ServiceTitan, and Dayforce. ServiceTitan operates as a leading business management platform for trades, while Dayforce benefits from HCM software modernization trends. The fund sees these companies benefiting from secular growth trends and strong competitive positions despite near-term headwinds.	SaaS Enterprise Software Business Management HCM Digital Transformation
2024 Q3	AI Gartner positioned to emerge as key resource for companies evaluating AI opportunities and risks on their business. This should provide tailwind to Gartner's volume growth and pricing realization over time. Duolingo's AI tier (Max) allows users to have real-time conversations with AI-based characters.	Artificial Intelligence Machine Learning Automation Analytics Software
	Cloud Guidewire substantially completed transition from on-premise to cloud-based software provider. Cloud will be sole path forward with annual recurring revenue benefiting from new customer wins and migration of existing customer base to InsuranceSuite Cloud.	SaaS Software Subscription Migration Infrastructure
	Senior Care Welltower positioned to capture cyclical and secular inflection in senior housing growth. Demographics boom with over 80 population projected to grow 4-5% CAGR over next five years. Supply expected to remain muted with declining construction starts and unattractive developer economics.	Demographics Real Estate Healthcare Aging Housing
2024 Q2	AI The Fund participated in X.AI Corp's Series B fundraising round, founded by Elon Musk to develop AI to understand the true nature of the universe. X.AI has unique access to X.com's data representing one of the largest repositories of real-time, multimodal human interaction data with nearly 600 million monthly users. The company plans to deploy one of the world's largest computing clusters with 100,000 GPUs and aims for 300,000 stronger GPUs by summer 2025.	Machine Learning Data Centers Computing GPUs Models
	Insurance The Fund holds positions in P&C insurance-related companies including Verisk Analytics, Guidewire Software, and Arch Capital Group. Verisk provides proprietary data and analytics to the P&C insurance market and management expressed optimism about the state of the P&C insurance end-market. Guidewire is transitioning to cloud-based solutions for the P&C insurance sector with annual recurring revenue benefiting from new customer wins and migrations.	Property Casualty Analytics Software Cloud Underwriting
	Infrastructure Spending The Fund initiated a position in Vulcan Materials Company, the largest producer of construction aggregates in the U.S. Infrastructure-related spending accounts for approximately 40% of Vulcan's aggregate shipments and should remain elevated as the Infrastructure and Investment Jobs Act allocates significant federal funds towards new and existing infrastructure projects. Outsized state-level infrastructure spending will also drive demand across the company's footprint.	Construction Aggregates Federal Spending Roads Bridges
	Data Centers X.AI is making bold moves in computing infrastructure, planning to deploy one of the world's largest, densest computing clusters with 100,000 GPUs. The company identified a location, secured power allocation, and started deploying hardware with a goal to start utilizing this data center before the end of 2024. Most new data center development cycles take two to three years, making this a tremendous achievement.	Computing GPUs Power Infrastructure Cloud
2024 Q1	AI The market has been focused on a narrow group of companies perceived to be AI beneficiaries. Many of Baron's holdings are well positioned to utilize AI to expand their product offerings and competitive differentiation, increase their growth rate and reduce their cost structure. Gartner is expected to emerge as a key decision support resource for every company evaluating AI opportunities and risks.	Artificial Intelligence Technology Software Analytics Decision Support
	Software The fund holds significant positions in enterprise software companies including Gartner, FactSet, Guidewire, and Veeva Systems. New addition Procore provides cloud-based construction management software serving a large addressable market still in early stages of digitization. These companies benefit from secular trends around software modernization and SaaS adoption.	SaaS Enterprise Software Cloud Digital Transformation Subscription
	Data Multiple holdings focus on data and analytics including Gartner for IT research, CoStar for real estate data, Verisk for insurance analytics, and FactSet for investment management tools. These companies benefit from the increasing value of data-driven decision making across industries and have built strong competitive moats around their proprietary datasets.	Analytics Research Information Services Data Platforms Business Intelligence
2023 Q4	AI Gartner positioned to emerge as critical decision support resource for companies contemplating AI opportunities and risks. Expected to provide tailwind to volume growth and pricing realization over time.	Artificial Intelligence Decision Support Research Technology Adoption Enterprise Software
2023 Q3	Cloud The fund benefits from cloud-based software implementations, particularly through Guidewire's 17 deals for cloud software with Tier 1 insurance carriers. Cloud adoption continues to drive growth for portfolio companies.	SaaS Enterprise Software Insurance Software Cloud Infrastructure Software Implementation
	Insurance Strong performance from P&C insurance software vendors and specialty insurers. Guidewire dominates the global P&C insurance software market with 30-50% addressable market share potential, while Arch Capital shows strong underwriting margins and growth.	P&C Insurance Insurance Software Underwriting Specialty Insurance Insurance Technology
	Data & Analytics Portfolio companies provide critical data and analytics services across industries. Gartner helps customers navigate complex technology markets, while Verisk serves the insurance industry and FactSet provides investment management tools despite macro headwinds.	Research Services Investment Tools Technology Research Insurance Analytics Data Services

QUARTER

THEMES

AI

AI drove narrow market leadership during Q2 2026, with semiconductor stocks nearly doubling. The manager believes many software and services holdings have been unfairly penalized by AI disruption fears, trading at historically low valuations despite resilient fundamentals. The manager expects these companies to utilize AI to improve products, lower costs, and enhance competitive positions rather than be disrupted.

Semiconductors Software Disruption Valuation Infrastructure

Space

SpaceX completed the largest IPO in history, raising over $85 billion, and the Fund's position appreciated by more than 3,000%. The company signed landmark compute hosting deals totaling tens of billions annually with Anthropic and Google, acquired AI coding platform Cursor, and successfully tested its latest Starship rocket. The manager believes SpaceX provides exposure to massive addressable markets including connectivity, launch, infrastructure, and AI.

SpaceX IPO Satellites Infrastructure Compute

Software

Software and services holdings lost 37.6% during the year due to 46% multiple compression driven by AI disruption fears, despite 27% fundamental growth. These businesses now trade at a 47% discount to 10-year average multiples. The manager believes this sell-off has been indiscriminate and that strong financial results demonstrate business resilience. Since June 30, these holdings have rallied 12% on a weighted average basis.

Valuation Multiple compression AI disruption Business services

Semiconductors

The iShares Semiconductor ETF gained nearly 100% during Q2 2026, driving IT sector outperformance. The Fund has limited direct exposure to semiconductors, which created a headwind to relative performance. The manager initiated a position in Cerebras Systems, a differentiated AI accelerator company with a $20 billion OpenAI contract, believing it will benefit from growing demand for fast inference workloads.

AI accelerators Inference Cerebras Performance

Data Centers

SpaceX signed compute hosting deals totaling tens of billions of dollars annually with market leaders including Anthropic and Google. Cerebras secured a $20 billion contract with OpenAI for a 750 megawatt data center with optionality to extend by another 1.25 gigawatts. The manager believes AI infrastructure buildout will sustain strong momentum with large portions requiring fast inference capabilities.

Compute Infrastructure AI workloads Hyperscalers

Infrastructure Spending

Quanta Services raised full-year guidance substantially after strong Q1 earnings, with management reiterating mid-to-high teens earnings growth through at least the end of the decade. This growth is supported by secular trends including grid modernization, electrification, energy transition, industrial reshoring, and communications infrastructure upgrades. The company has delivered 25% earnings CAGR since 2015.

Grid modernization Electrification Reshoring Construction

Medical Devices

The manager initiated a position in Edwards Lifesciences, the leader in transcatheter aortic valve replacement (TAVR) with dominant market share supported by strong clinical evidence. The TAVR market can grow from $7 billion to over $10 billion as indications expand, while the mitral and tricuspid valve (TMTT) market can grow from $1.5 billion to $8 billion. Combined addressable market of nearly $20 billion supports low double-digit revenue growth and mid-teens EPS growth.

TAVR Heart valves Clinical evidence Market expansion

P&C Insurance

Arch Capital's stock failed to participate in the Q2 rally as investors rotated away from resilient insurance stocks when market volatility eased. Soft pricing trends emerged in property insurance due to strong profitability and elevated capital levels following last year's benign hurricane season. The manager views this cyclicality as normal and continues to own Arch due to strong management and expectations for continued earnings and book value growth.

Pricing Cyclicality Capital levels Hurricane season

2026 Q1

AI

Manager believes AI disruption fears have led to indiscriminate selling across software and services industries, creating attractive valuations for quality businesses. Views AI as a generational shift that will create winners and losers, but believes the fund's software holdings will prove durable and benefit from AI tailwinds.

Software Disruption Valuations Technology Innovation

Data Centers

Strong performance from data center infrastructure companies like Vertiv and Forgent Power Solutions. Electrical equipment remains a key bottleneck in AI data center buildout, creating opportunities for specialized manufacturers with strong order books and expanding manufacturing capabilities.

Infrastructure Electrical Equipment Manufacturing Growth

Space

SpaceX is the fund's largest position at 25.5% of net assets, generating significant value through Starlink broadband expansion and establishing itself as a leading launch provider. The company is making tremendous progress on Starship and intends to complete an IPO in the next few months at a valuation above current price.

SpaceX Starlink Launch IPO

Infrastructure Spending

Favorable trends in infrastructure-related spending driven by federal and state funding for new projects. Non-residential construction spending driven by data center construction, reshoring/onshoring of manufacturing, and industrial categories expected to continue for several years.

Construction Government Reshoring Manufacturing

2025 Q4

AI

Edgewood views AI as creating significant opportunities through infrastructure buildout and new applications. The firm highlights AI servers requiring greater connector content, AI driving cloud demand acceleration, and Draft One as an AI killer app for police reports. They see AI expanding beyond data centers into factories and robotics.

Infrastructure Cloud Applications Automation

Semiconductors

The firm maintains significant exposure to semiconductor companies including NVIDIA, Broadcom, and ASML. They view the semiconductor cycle as having years to run with AI driving structural demand. Portfolio includes both chip designers and equipment companies positioned for next-generation architectures.

Memory Equipment Design Manufacturing

Software

Edgewood emphasizes software companies with recurring revenue models and high margins. They highlight companies like ServiceNow, Intuit, and Synopsys that benefit from digital transformation and AI integration. Software represents 43% of revenue with 77% adjusted gross margins in their portfolio allocation.

SaaS Enterprise Recurring Margins

Healthcare

The firm maintains exposure to healthcare through companies like Eli Lilly, Vertex, and Boston Scientific. They view healthcare as offering durable growth with strong competitive moats. Eli Lilly was a top contributor in Q4 with 41% returns, representing 6.4% of the portfolio.

Pharmaceuticals Devices Innovation Demographics

2025 Q3

AI

The Fund discusses AI as a primary driver of market strength and data center capital spending growth. AI is creating both opportunities and challenges, with companies seeking guidance on AI risks and opportunities. The Fund believes AI should provide a tailwind for research companies like Gartner as businesses need help understanding AI implications.

Artificial Intelligence Data Centers Technology Innovation Automation

Quality

The Fund emphasizes its focus on high-quality, competitively advantaged companies with best-in-class management teams. The market environment has been challenging for high-quality companies, with lower-quality earnings companies outperforming by the widest margin since 1975. The Fund maintains conviction that investors will eventually reward high-quality businesses.

Earnings Quality Competitive Advantages Management Fundamentals Valuation

Aerospace

The Fund initiated a position in Loar Holdings, a niche aerospace parts manufacturer with 85% proprietary products and over 50% aftermarket revenues. The aerospace industry benefits from growing passenger miles, strong pricing power, and high barriers to entry. SpaceX continues expanding Starlink broadband service and advancing rocket technology including the Starship program.

Aerospace Components Defense Space Aviation Aftermarket

Data Centers

Data center capital spending continues to rise with accelerating AI adoption. Amphenol, a leading supplier of advanced interconnect systems for data centers, gained during the quarter as expectations for data center spending increased. The company announced its largest-ever acquisition to strengthen its position in this growing market.

Infrastructure Cloud Interconnect Technology Hardware Capital Spending

2025 Q2

AI

AI-related investments drove significant market momentum during the quarter, with data center infrastructure and AI-enabled software platforms benefiting from increased capital spending. The Fund's holdings like Amphenol gained from AI-driven data center demand, while Samsara leverages AI to help companies optimize operations and prevent accidents.

Data Centers Software Analytics Automation Infrastructure

Software

Enterprise software companies demonstrated strong performance with subscription-based models showing resilience. Guidewire Software benefited from cloud migrations and ARR growth, while Samsara's cloud-native platform gained market share in connected fleet software with rapid product development cycles.

SaaS Cloud Enterprise Software Subscription ARR

Data Centers

Data center infrastructure investments accelerated during the quarter, partly driven by AI-related capital spending. Amphenol reported robust results with organic growth exceeding guidance primarily due to strength in its data center end market as investors became optimistic about increased infrastructure spending.

Infrastructure AI Cloud Connectivity Growth

2025 Q1

AI

The fund holds X.AI Holdings Corp., which is developing an AI model to understand the true nature of the universe. xAI launched Grok 3, demonstrating elevated user engagement and top scores in evaluation tests, surpassing other industry-leading AI models. The company operates the world's largest coherent training center with over 100,000 GPUs.

Artificial Intelligence Machine Learning Data Centers Computing Innovation

Data Centers

The fund initiated a position in Vertiv Holdings Co, a global leader providing critical data infrastructure solutions for data centers. Vertiv provides solutions to cool and power data centers, with equipment required as rack density in AI data centers is expected to increase from 5-10kW per rack to potentially 900-1,000+ kW per rack over the next five years.

Infrastructure Cooling Power Technology Growth

Trade Policy

Trump's plans to impose sweeping tariffs on major U.S. trade partners shifted market sentiment and created uncertainty around the macroeconomic environment. The unknown implications of higher tariffs and potential trade war with both enemies and allies have given investors pause and contributed to market pullback.

Tariffs Trade War Policy Uncertainty Markets

Sports Betting

The fund holds DraftKings Inc., a dominant player in the domestic online sports betting industry evolving towards a favorable duopoly market structure. The company is positioned to capitalize on rapid growth of the U.S. sports betting market, with online betting expected to expand at 15% to 17% same-state growth rate over the next several years.

Gaming Digital Growth Market Share Regulation

2024 Q4

AI

The fund discusses AI through its investment in X.AI Corp, founded by Elon Musk, which has developed the Grok AI model that has achieved impressive results compared to established AI models. The company operates the Colossus data center with over 100,000 GPUs, making it the largest coherent training center globally. The upcoming Grok 3 release is expected to significantly improve capabilities and expand monetization strategies.

Artificial Intelligence Machine Learning Data Centers GPUs Foundation Models

Space

SpaceX is highlighted as a major contributor to performance, focusing on developing advanced rockets, satellites, and spacecraft with the goal of enabling human colonization of Mars. The company generates significant value through Starlink broadband service expansion and has established itself as a leading launch provider with reusable technology. SpaceX is making tremendous progress on Starship, the largest and most powerful rocket ever flown.

Aerospace Satellites Launch Services Broadband Reusable Technology

Software

The fund maintains significant exposure to enterprise software companies including Gartner, Guidewire, ServiceTitan, and Dayforce. ServiceTitan operates as a leading business management platform for trades, while Dayforce benefits from HCM software modernization trends. The fund sees these companies benefiting from secular growth trends and strong competitive positions despite near-term headwinds.

SaaS Enterprise Software Business Management HCM Digital Transformation

2024 Q3

AI

Gartner positioned to emerge as key resource for companies evaluating AI opportunities and risks on their business. This should provide tailwind to Gartner's volume growth and pricing realization over time. Duolingo's AI tier (Max) allows users to have real-time conversations with AI-based characters.

Artificial Intelligence Machine Learning Automation Analytics Software

Cloud

Guidewire substantially completed transition from on-premise to cloud-based software provider. Cloud will be sole path forward with annual recurring revenue benefiting from new customer wins and migration of existing customer base to InsuranceSuite Cloud.

SaaS Software Subscription Migration Infrastructure

Senior Care

Welltower positioned to capture cyclical and secular inflection in senior housing growth. Demographics boom with over 80 population projected to grow 4-5% CAGR over next five years. Supply expected to remain muted with declining construction starts and unattractive developer economics.

Demographics Real Estate Healthcare Aging Housing

2024 Q2

AI

The Fund participated in X.AI Corp's Series B fundraising round, founded by Elon Musk to develop AI to understand the true nature of the universe. X.AI has unique access to X.com's data representing one of the largest repositories of real-time, multimodal human interaction data with nearly 600 million monthly users. The company plans to deploy one of the world's largest computing clusters with 100,000 GPUs and aims for 300,000 stronger GPUs by summer 2025.

Machine Learning Data Centers Computing GPUs Models

Insurance

The Fund holds positions in P&C insurance-related companies including Verisk Analytics, Guidewire Software, and Arch Capital Group. Verisk provides proprietary data and analytics to the P&C insurance market and management expressed optimism about the state of the P&C insurance end-market. Guidewire is transitioning to cloud-based solutions for the P&C insurance sector with annual recurring revenue benefiting from new customer wins and migrations.

Property Casualty Analytics Software Cloud Underwriting

Infrastructure Spending

The Fund initiated a position in Vulcan Materials Company, the largest producer of construction aggregates in the U.S. Infrastructure-related spending accounts for approximately 40% of Vulcan's aggregate shipments and should remain elevated as the Infrastructure and Investment Jobs Act allocates significant federal funds towards new and existing infrastructure projects. Outsized state-level infrastructure spending will also drive demand across the company's footprint.

Construction Aggregates Federal Spending Roads Bridges

Data Centers

X.AI is making bold moves in computing infrastructure, planning to deploy one of the world's largest, densest computing clusters with 100,000 GPUs. The company identified a location, secured power allocation, and started deploying hardware with a goal to start utilizing this data center before the end of 2024. Most new data center development cycles take two to three years, making this a tremendous achievement.

Computing GPUs Power Infrastructure Cloud

2024 Q1

AI

The market has been focused on a narrow group of companies perceived to be AI beneficiaries. Many of Baron's holdings are well positioned to utilize AI to expand their product offerings and competitive differentiation, increase their growth rate and reduce their cost structure. Gartner is expected to emerge as a key decision support resource for every company evaluating AI opportunities and risks.

Artificial Intelligence Technology Software Analytics Decision Support

Software

The fund holds significant positions in enterprise software companies including Gartner, FactSet, Guidewire, and Veeva Systems. New addition Procore provides cloud-based construction management software serving a large addressable market still in early stages of digitization. These companies benefit from secular trends around software modernization and SaaS adoption.

SaaS Enterprise Software Cloud Digital Transformation Subscription

Data

Multiple holdings focus on data and analytics including Gartner for IT research, CoStar for real estate data, Verisk for insurance analytics, and FactSet for investment management tools. These companies benefit from the increasing value of data-driven decision making across industries and have built strong competitive moats around their proprietary datasets.

Analytics Research Information Services Data Platforms Business Intelligence

2023 Q4

AI

Gartner positioned to emerge as critical decision support resource for companies contemplating AI opportunities and risks. Expected to provide tailwind to volume growth and pricing realization over time.

Artificial Intelligence Decision Support Research Technology Adoption Enterprise Software

2023 Q3

Cloud

The fund benefits from cloud-based software implementations, particularly through Guidewire's 17 deals for cloud software with Tier 1 insurance carriers. Cloud adoption continues to drive growth for portfolio companies.

SaaS Enterprise Software Insurance Software Cloud Infrastructure Software Implementation

Insurance

Strong performance from P&C insurance software vendors and specialty insurers. Guidewire dominates the global P&C insurance software market with 30-50% addressable market share potential, while Arch Capital shows strong underwriting margins and growth.

P&C Insurance Insurance Software Underwriting Specialty Insurance Insurance Technology

Data & Analytics

Portfolio companies provide critical data and analytics services across industries. Gartner helps customers navigate complex technology markets, while Verisk serves the insurance industry and FactSet provides investment management tools despite macro headwinds.

Research Services Investment Tools Technology Research Insurance Analytics Data Services

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
May 5, 2026	Fund Letters	Baron Asset Fund	-	Quanta Services, Inc.	Other	Construction & Engineering	Bull	New York Stock Exchange	Communications, data centers, Electrification, Grid modernization, infrastructure, renewable energy, Specialty Contracting, utilities	Login
May 5, 2026	Fund Letters	Baron Asset Fund	VRT	Vertiv Holdings Co	Electrical Equipment & Parts	Electrical Equipment	Bull	New York Stock Exchange	AI infrastructure, critical infrastructure, data centers, digital infrastructure, electrical equipment, liquid cooling, Modular Solutions, thermal management	Login
May 5, 2026	Fund Letters	Baron Asset Fund	CSGP	CoStar Group, Inc.	Real Estate Services	Real Estate Services	Bull	NASDAQ	AI Disruption Concerns, commercial real estate, Data Analytics, information services, marketplace, Real Estate Services, recurring revenue, Residential Real Estate	Login
May 5, 2026	Fund Letters	Baron Asset Fund	IT	Gartner, Inc.	Information Technology Services	Research & Consulting Services	Bull	New York Stock Exchange	advisory services, AI Beneficiary, Consulting, Free Cash Flow, proprietary data, Research Services, Syndicated Research, Technology Research	Login
May 5, 2026	Fund Letters	Baron Asset Fund	GWRE	Guidewire Software, Inc.	Software - Application	Application Software	Bull	New York Stock Exchange	AI Tailwind, Annual Recurring Revenue, cloud migration, cross-selling, Insurance-software, Property & Casualty, SaaS, Sticky Customer Base	Login
Nov 8, 2025	Fund Letters	Andrew Peck	STUB	StubHub Holdings, Inc.	Communication Services	Specialized Consumer Services	Bull	NYSE	IPO, marketplace, Networkeffects, Scalability, Tickets	Login
Jun 30, 2025	Fund Letters	Baron Asset Fund	SAMS	Samsara Inc.	Information Technology	Application Software	Bull	NYSE	AI, Cloud software, commercial vehicles, Data Analytics, Fleet Management, IoT, SaaS, Telematics	Login
Jun 30, 2025	Fund Letters	Baron Asset Fund	LPLA	LPL Financial Holdings Inc.	Financials	Investment Banking & Brokerage	Bull	NASDAQ	Asset-Based Fees, Financial Advisors, Independent Broker-Dealer, market share gains, Scale Advantages, technology platform, wealth management	Login
Mar 31, 2025	Fund Letters	Baron Asset Fund	GDWR	Guidewire Software, Inc.	Information Technology	Application Software	Bull	NYSE	cloud migration, Enterprise software, Insurance-software, margin expansion, P&C insurance, recurring revenue, SaaS	Login
Mar 31, 2025	Fund Letters	Baron Asset Fund	VRSK	Verisk Analytics, Inc.	Industrials	Research & Consulting Services	Bull	NASDAQ	capital allocation, Data Analytics, defensive, Insurance Analytics, margin expansion, market leadership, organic growth	Login
Mar 31, 2025	Fund Letters	Baron Asset Fund	VRT	Vertiv Holdings Co	Information Technology	Technology Hardware, Storage & Peripherals	Bull	NYSE	AI infrastructure, Cooling Solutions, data centers, EBITDA growth, Energy-Density, liquid cooling, Nvidia partnership, secular growth	Login
Mar 31, 2025	Fund Letters	Baron Asset Fund	DKNG	DraftKings Inc.	Consumer Discretionary	Casinos & Gaming	Bull	NASDAQ	capital returns, Customer Acquisition, duopoly, Free Cash Flow, margin expansion, Market expansion, Online-Gaming, Sports betting	Login
Dec 31, 2024	Fund Letters	Baron Asset Fund	STTN	ServiceTitan, Inc.	Information Technology	Application Software	Bull	NASDAQ	CRM, ERP, Field Service Management, Fintech, growth, High retention, market leader, SaaS, Trades Industry, vertical software	Login
Jun 30, 2024	Fund Letters	Baron Asset Fund	VRSK	Verisk Analytics, Inc.	Industrials	Research & Consulting Services	Bull	NASDAQ	Data Analytics, Insurance Technology, margin expansion, P&C insurance, Pricing power, proprietary data, SaaS	Login
Jun 30, 2024	Fund Letters	Baron Asset Fund	GWRE	Guidewire Software, Inc.	Information Technology	Application Software	Bull	NYSE	Annual Recurring Revenue, Cloud transformation, Insurance-software, margin expansion, P&C insurance, SaaS, total addressable market	Login
Jun 30, 2024	Fund Letters	Baron Asset Fund	FICO	Fair Isaac Corporation	Information Technology	Application Software	Bull	NYSE	consumer behavior, credit scoring, Data Analytics, Earnings Compounder, interest rate sensitivity, Regulatory risk, software business	Login
Jun 30, 2024	Fund Letters	Baron Asset Fund	XAI	X.AI Corp.	Information Technology	Application Software	Bull	Private	Artificial Intelligence, data centers, Distribution Platform, Elon Musk, GPU computing, Hardware Integration, machine learning, real-time data	Login
Jun 30, 2024	Fund Letters	Baron Asset Fund	VMC	Vulcan Materials Company	Materials	Construction Materials	Bull	NYSE	barriers to entry, Construction Aggregates, infrastructure spending, materials, non-residential construction, Pricing power, Quarries, residential construction	Login
Mar 31, 2024	Fund Letters	Baron Asset Fund	PCOR	Procore Technologies, Inc.	Information Technology	Application Software	Bull	NASDAQ	cash flow positive, Cloud software, Construction Technology, Digitization, Market Share Leader, Project Management, SaaS, Take-rate Model	Login
Mar 31, 2024	Fund Letters	Baron Asset Fund	SPOT	Spotify Technology S.A.	Communication Services	Interactive Media & Services	Bull	NYSE	advertising revenue, AI innovation, digital media, Global Platform, operational discipline, Podcasts, Pricing power, Streaming Music, subscription model	Login
Dec 31, 2023	Fund Letters	Baron Asset Fund	BIRK	Birkenstock Holding plc	Consumer Discretionary	Footwear	Bull	NYSE	Asia expansion, Consumer Brand, direct-to-consumer, e-commerce, Footwear, German Manufacturing, global expansion, IPO, manufacturing, Retail Stores	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	Guidewire Software, Inc.	Information Technology	Application Software	Bull	NYSE	cloud migration, Digital transformation, Enterprise software, Insurance-software, P&C insurance, recurring revenue, SaaS	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ACGL\|CHH\|FDS\|GWRE\|IBKR\|IDXX\|MTN\|SPOT\|TSLA	FactSet Research Systems Inc.	Information Technology	Financial Technology	Bull	NYSE	analytics software, financial data, financial technology, Free Cash Flow, investment management, subscription revenue	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ACGL	Arch Capital Group Ltd.	Financials	Property & Casualty Insurance	Bull	NASDAQ	book value growth, investment income, premium growth, ROE, specialty insurance, underwriting	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ONON	On Holding AG	Consumer Discretionary	Footwear	Bull	NYSE	athleisure, Athletic Footwear, Brand Building, direct-to-consumer, global expansion, innovation, Premium Sportswear, Switzerland	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	IDEXX Laboratories, Inc.	Health Care	Life Sciences Tools & Services	Bull	NASDAQ	competitive moat, Pet Care, proprietary products, sales force expansion, secular growth, Veterinary diagnostics	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	Mettler-Toledo International Inc.	Health Care	Life Sciences Tools & Services	Bull	NYSE	biopharmaceutical, China exposure, cyclical headwinds, life sciences, market leader, Precision Instruments	Login
Sep 30, 2023	Fund Letters	Baron Asset Fund	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	CoStar Group, Inc.	Real Estate	Real Estate Services	Bull	NASDAQ	commercial real estate, market recovery, proprietary data, Real Estate Data, Residential expansion, subscription revenue	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

May 5, 2026

Fund Letters

Baron Asset Fund

Quanta Services, Inc.

Other

Construction & Engineering

Bull

New York Stock Exchange

Communications, data centers, Electrification, Grid modernization, infrastructure, renewable energy, Specialty Contracting, utilities

May 5, 2026

Fund Letters

Baron Asset Fund

VRT

Vertiv Holdings Co

Electrical Equipment & Parts

Electrical Equipment

Bull

New York Stock Exchange

AI infrastructure, critical infrastructure, data centers, digital infrastructure, electrical equipment, liquid cooling, Modular Solutions, thermal management

May 5, 2026

Fund Letters

Baron Asset Fund

CSGP

CoStar Group, Inc.

Real Estate Services

Bull

NASDAQ

AI Disruption Concerns, commercial real estate, Data Analytics, information services, marketplace, Real Estate Services, recurring revenue, Residential Real Estate

May 5, 2026

Fund Letters

Baron Asset Fund

Gartner, Inc.

Information Technology Services

Research & Consulting Services

Bull

New York Stock Exchange

advisory services, AI Beneficiary, Consulting, Free Cash Flow, proprietary data, Research Services, Syndicated Research, Technology Research

May 5, 2026

Fund Letters

Baron Asset Fund

GWRE

Guidewire Software, Inc.

Software - Application

Application Software

Bull

New York Stock Exchange

AI Tailwind, Annual Recurring Revenue, cloud migration, cross-selling, Insurance-software, Property & Casualty, SaaS, Sticky Customer Base

Nov 8, 2025

Fund Letters

Andrew Peck

STUB

StubHub Holdings, Inc.

Communication Services

Specialized Consumer Services

Bull

NYSE

IPO, marketplace, Networkeffects, Scalability, Tickets

Jun 30, 2025

Fund Letters

Baron Asset Fund

SAMS

Samsara Inc.

Information Technology

Application Software

Bull

NYSE

AI, Cloud software, commercial vehicles, Data Analytics, Fleet Management, IoT, SaaS, Telematics

Jun 30, 2025

Fund Letters

Baron Asset Fund

LPLA

LPL Financial Holdings Inc.

Financials

Investment Banking & Brokerage

Bull

NASDAQ

Asset-Based Fees, Financial Advisors, Independent Broker-Dealer, market share gains, Scale Advantages, technology platform, wealth management

Mar 31, 2025

Fund Letters

Baron Asset Fund

GDWR

Guidewire Software, Inc.

Information Technology

Application Software

Bull

NYSE

cloud migration, Enterprise software, Insurance-software, margin expansion, P&C insurance, recurring revenue, SaaS

Mar 31, 2025

Fund Letters

Baron Asset Fund

VRSK

Verisk Analytics, Inc.

Industrials

Research & Consulting Services

Bull

NASDAQ

capital allocation, Data Analytics, defensive, Insurance Analytics, margin expansion, market leadership, organic growth

Mar 31, 2025

Fund Letters

Baron Asset Fund

VRT

Vertiv Holdings Co

Information Technology

Technology Hardware, Storage & Peripherals

Bull

NYSE

AI infrastructure, Cooling Solutions, data centers, EBITDA growth, Energy-Density, liquid cooling, Nvidia partnership, secular growth

Mar 31, 2025

Fund Letters

Baron Asset Fund

DKNG

DraftKings Inc.

Consumer Discretionary

Casinos & Gaming

Bull

NASDAQ

capital returns, Customer Acquisition, duopoly, Free Cash Flow, margin expansion, Market expansion, Online-Gaming, Sports betting

Dec 31, 2024

Fund Letters

Baron Asset Fund

STTN

ServiceTitan, Inc.

Information Technology

Application Software

Bull

NASDAQ

CRM, ERP, Field Service Management, Fintech, growth, High retention, market leader, SaaS, Trades Industry, vertical software

Jun 30, 2024

Fund Letters

Baron Asset Fund

VRSK

Verisk Analytics, Inc.

Industrials

Research & Consulting Services

Bull

NASDAQ

Data Analytics, Insurance Technology, margin expansion, P&C insurance, Pricing power, proprietary data, SaaS

Jun 30, 2024

Fund Letters

Baron Asset Fund

GWRE

Guidewire Software, Inc.

Information Technology

Application Software

Bull

NYSE

Annual Recurring Revenue, Cloud transformation, Insurance-software, margin expansion, P&C insurance, SaaS, total addressable market

Jun 30, 2024

Fund Letters

Baron Asset Fund

FICO

Fair Isaac Corporation

Information Technology

Application Software

Bull

NYSE

consumer behavior, credit scoring, Data Analytics, Earnings Compounder, interest rate sensitivity, Regulatory risk, software business

Jun 30, 2024

Fund Letters

Baron Asset Fund

XAI

X.AI Corp.

Information Technology

Application Software

Bull

Private

Artificial Intelligence, data centers, Distribution Platform, Elon Musk, GPU computing, Hardware Integration, machine learning, real-time data

Jun 30, 2024

Fund Letters

Baron Asset Fund

VMC

Vulcan Materials Company

Materials

Construction Materials

Bull

NYSE

barriers to entry, Construction Aggregates, infrastructure spending, materials, non-residential construction, Pricing power, Quarries, residential construction

Mar 31, 2024

Fund Letters

Baron Asset Fund

PCOR

Procore Technologies, Inc.

Information Technology

Application Software

Bull

NASDAQ

cash flow positive, Cloud software, Construction Technology, Digitization, Market Share Leader, Project Management, SaaS, Take-rate Model

Mar 31, 2024

Fund Letters

Baron Asset Fund

SPOT

Spotify Technology S.A.

Communication Services

Interactive Media & Services

Bull

NYSE

advertising revenue, AI innovation, digital media, Global Platform, operational discipline, Podcasts, Pricing power, Streaming Music, subscription model

Dec 31, 2023

Fund Letters

Baron Asset Fund

BIRK

Birkenstock Holding plc

Consumer Discretionary

Footwear

Bull

NYSE

Asia expansion, Consumer Brand, direct-to-consumer, e-commerce, Footwear, German Manufacturing, global expansion, IPO, manufacturing, Retail Stores

Sep 30, 2023

Fund Letters

Baron Asset Fund

Guidewire Software, Inc.

Information Technology

Application Software

Bull

NYSE

cloud migration, Digital transformation, Enterprise software, Insurance-software, P&C insurance, recurring revenue, SaaS

Sep 30, 2023

Fund Letters

Baron Asset Fund

FactSet Research Systems Inc.

Information Technology

Financial Technology

Bull

NYSE

analytics software, financial data, financial technology, Free Cash Flow, investment management, subscription revenue

Sep 30, 2023

Fund Letters

Baron Asset Fund

ACGL

Arch Capital Group Ltd.

Financials

Property & Casualty Insurance

Bull

NASDAQ

book value growth, investment income, premium growth, ROE, specialty insurance, underwriting

Sep 30, 2023

Fund Letters

Baron Asset Fund

ONON

On Holding AG

Consumer Discretionary

Footwear

Bull

NYSE

athleisure, Athletic Footwear, Brand Building, direct-to-consumer, global expansion, innovation, Premium Sportswear, Switzerland

Sep 30, 2023

Fund Letters

Baron Asset Fund

IDEXX Laboratories, Inc.

Health Care

Life Sciences Tools & Services

Bull

NASDAQ

competitive moat, Pet Care, proprietary products, sales force expansion, secular growth, Veterinary diagnostics

Sep 30, 2023

Fund Letters

Baron Asset Fund

Mettler-Toledo International Inc.

Health Care

Life Sciences Tools & Services

Bull

NYSE

biopharmaceutical, China exposure, cyclical headwinds, life sciences, market leader, Precision Instruments

Sep 30, 2023

Fund Letters

Baron Asset Fund

CoStar Group, Inc.

Real Estate

Real Estate Services

Bull

NASDAQ

commercial real estate, market recovery, proprietary data, Real Estate Data, Residential expansion, subscription revenue

TICKER	COMMENTARY
SPCE	Space Exploration Technologies Corp. develops and launches advanced rockets, satellites, and spacecraft, with the long-term goal of making humanity multi-planetary. Shares rose as the company successfully completed the largest initial public offering in history, raising more than $85 billion. The proceeds are expected to accelerate the company's growth across multiple massive addressable markets, including connectivity, launch, terrestrial and space infrastructure, and AI. The company's fundamental business momentum was further reinforced by its signing landmark compute hosting deals totaling tens of billions of dollars annually, including agreements with market leaders Anthropic and Google. SpaceX also announced its acquisition of Cursor, a premier enterprise AI-powered coding platform. Integrating Cursor's technology, talent, and customer base provides another strategic steppingstone into the vast opportunities within AI applications and agentic systems. Lastly, the company conducted a successful test flight of the latest version of its Starship rocket, demonstrating meaningful advancements in rapid and full reusability. We believe these developments support sustained long-term revenue and profit growth well beyond current levels.
APH	Amphenol Corporation is a leading provider of high-technology interconnect, sensor, and antenna solutions serving a diverse set of end markets. The company operates a highly decentralized, entrepreneurial model, with more than 140 general managers exercising autonomy over their individual business units. Amphenol is also highly acquisitive, having completed more than 50 acquisitions over the past decade. Shares rose during the quarter after selling off in the prior period amid concerns that copper interconnect products, where Amphenol maintains a strong competitive position, could eventually be displaced by optical interconnects, where its market position is less established today. Nevertheless, management remains confident that the company can capture more than its fair share of the optical market, just as it did in copper, aided by the recent acquisition of CommScope's connectivity and cable solutions business. We believe Amphenol is well positioned to maintain a leading role even as interconnect technologies evolve from copper to optical, reinforcing our conviction in the company's long-term growth opportunity.
PWR	Quanta Services, Inc. is a leading specialty contracting company that provides comprehensive infrastructure solutions across the electric and gas utility, renewable energy, communications, pipeline, and energy industries. Shares rose during the quarter, driven by broad optimism around AI, data center and power infrastructure construction, as well as strong first quarter earnings that exceeded expectations across the board and prompted management to substantially raise full-year guidance. Management reiterated its view that the business can grow its earnings at a mid-to-high teens rate or better through at least the end of the decade, supported by secular trends including grid modernization, electrification, the energy transition, industrial reshoring, and communications infrastructure upgrades. We continue to believe this level of growth is achievable and take further comfort in Quanta's 25% earnings CAGR since 2015, a period during which the market backdrop was considerably less favorable than it is today. We remain long-term shareholders in Quanta and continue to see compelling growth prospects for the business.
CSGP	CoStar Group, Inc. is the leading provider of information and marketing services to the commercial and residential real estate industries. Shares fell due to multiple compression driven by rising fears related to AI's impact on CoStar's business. The market has increasingly come to view AI as an existential risk for a growing number of industries, including software, business services, information services, and video games. While there is little evidence of any fundamental impact on these sectors, investors have largely adopted a 'shoot first and ask questions later' approach, leading to significant stock price declines. We continue to own CoStar due to its enviable business model, differentiated data assets, and meaningful growth opportunities in providing enhanced real estate information, analytics, and marketplace offerings. The company also maintains a substantial cash balance, which we are hopeful will be used to aggressively repurchase shares at current depressed valuation levels.
GWRE	Shares of P&C insurance software vendor Guidewire Software, Inc. declined after a handful of new sales slipped from the fiscal third quarter into the fiscal fourth quarter. We believe this is purely a timing issue, with these deals having since closed in the current period. Guidewire's InsuranceSuite platform serves as the core system of record for P&C insurance carriers, functioning as the single source of truth for the policies an insurer writes, the claims it processes, the premiums it collects, and the payments it makes. We think the core-system opportunity alone represents nearly $20 billion of annual recurring revenue, or roughly 20 times Guidewire's current size. In our view, AI will meaningfully expand this opportunity by enabling automation and intelligence on top of the core system of record. Guidewire is already bringing new AI-enabled capabilities to market and signing customers, and we expect adoption to accelerate over the coming year. Finally, we expect Guidewire to benefit from the same internal productivity enhancements AI is driving across enterprises, which should help it grow faster with lower costs and ultimately improve profitability.
IT	Syndicated research provider Gartner, Inc. detracted from performance due to multiple compression driven by rising AI fears. We continue to own Gartner given its large addressable market, significant competitive advantage, and robust free cash flow generation, which we expect management to deploy toward ongoing, significant share repurchases at valuations that approach historically low levels.
ACGL	Arch's stock failed to participate in the market rally during the quarter, reflecting a rotation away from resilient insurance stocks as market volatility eased. Soft pricing trends in the insurance industry also pressured shares. Rates for property insurance are falling due to strong profitability and elevated capital levels following last year's benign hurricane season. This cyclicality is normal, and we continue to own the stock due to Arch's strong management team and our expectation of continued growth in earnings and book value over time.
SCHW	Schwab fell on concerns about the potential disruptive impact of AI on brokerage businesses, which we believe is misplaced.
VRSK	Performance in Real Estate and Industrials was hindered by losses from real estate data and marketing platform CoStar Group, Inc. and data and analytics vendor Verisk Analytics, Inc., whose share prices were pressured by the broader market rotation out of information services names amid industry-wide AI fears. A softening P&C insurance pricing backdrop also weighed on Verisk's stock price.
CBRS	We initiated a position in Cerebras Systems Inc., a semiconductor design company building accelerators for AI that completed its IPO during the quarter. We believe that Cerebras has developed one of the most differentiated architectures in this rapidly growing market. We are amidst a 'Big Bang' of new applications for and experiments with AI models, and this surge is leading an increasing proportion of AI infrastructure to be used for inference. The market for fast inference is growing more quickly than the overall inference market, and we believe this niche is on track to become a sizable portion of the broader market. Fast inference refers to the response time of an AI model, and it is a function of token (the popular atomic unit of AI intelligence) usage per second. As developers build applications and agents requiring complex permutations and combinations of underlying models feeding into one another, the demand for tokens per second is growing by orders of magnitude. Cerebras has designed a specialized semiconductor chip with characteristics that are especially well suited to serve this purpose. For most of its history, Cerebras sold AI systems built around its semiconductor accelerator, but it has since transitioned to offering cloud services to drive customer adoption of those systems. For now, Cerebras is pursuing both business models, though it will likely settle into becoming a semiconductor systems company. Unlike most semiconductor firms, we believe that Cerebras holds a genuine performance advantage for a specific set of workloads that require fast inference. While the popular benchmarks serve as good proxies for how Cerebras' offering differs from other AI accelerators in the market, it is the customer engagements that speak loudest. A $20 billion contract with OpenAI for a 750 megawatt Cerebras data center, with the optionality to extend by another 1.25 gigawatts, reflects OpenAI's confidence in the fast inference market and in the differentiated value of Cerebras as a key partner. The company's ongoing discussions with hyperscalers and its announced engagement with Amazon Web Services further validate the opportunity ahead. We continue to believe that the AI infrastructure buildout will sustain its strong momentum and that a large portion of workloads will require fast inference. As the leader in this market, Cerebras should benefit from this massive demand tailwind, and we believe it will keep innovating to maintain its lead over other players.
EW	We initiated a position in Edwards Lifesciences Corporation, a leading manufacturer of heart valve replacement and repair products. Edwards has dominant market share in transcatheter aortic valve replacement (TAVR), a minimally invasive procedure used to treat aortic stenosis, a disease that obstructs the flow of blood throughout the body and strains the heart. If left untreated, the condition can lead to death. Edwards' position in this market is supported by a robust body of positive clinical evidence and widespread physician familiarity with Edwards' product and workflow. We believe that today's $7 billion market for TAVR can grow to more than $10 billion as approved indications expand to allow TAVR to cover a broader patient population. In addition, Edwards' competitor Boston Scientific recently exited the TAVR market, and another competitor, Medtronic, released poor data about its product that we expect will drive additional market share to Edwards. Furthermore, recent policies implemented by Medicare should expand the number of medical centers that can perform TAVR procedures. Edwards also manufactures products used to treat the heart's mitral and tricuspid valves (TMTT). When these valves are dysfunctional, the heart can be forced to work harder, becoming strained and possibly leading to death. Edwards is in the unique position of offering patients options for both valve repair and replacement. The company has devoted more than a decade of research to develop its TMTT portfolio. Addressing TMTT issues is structurally much more complex than TAVR, and the barrier to developing effective solutions is extremely high. We believe that today's $1.5 billion TMTT market can grow to as much as $8 billion over time. With a combined addressable market of nearly $20 billion, we believe Edwards has meaningful opportunity to compound growth. The company also has an attractive and improving margin structure, with 78% gross margins and 27% operating margins. With a more stable competitive landscape in TAVR and large greenfield opportunity in TMTT, we believe Edwards can compound its revenues at low double digit rates and its earnings per share in the mid-teens for an extended period.
FICO	We reduced our position in Fair Isaac Corporation, which produces the FICO score that is widely used by lenders to evaluate consumers' creditworthiness, in response to ongoing uncertainty about potential regulatory changes in the mortgage market.
FND	We sold our position in Floor & Decor Holdings, Inc., a retailer of home flooring, over concerns that market demand trends will remain depressed for longer than we had expected.
BAH	We reduced our position in Booz Allen Hamilton Holding Corporation, which primarily provides technology consulting and implementation services to the U.S. defense establishment, over concerns about the looming impact of AI on their business.

TICKER

COMMENTARY

SPCE

Space Exploration Technologies Corp. develops and launches advanced rockets, satellites, and spacecraft, with the long-term goal of making humanity multi-planetary. Shares rose as the company successfully completed the largest initial public offering in history, raising more than $85 billion. The proceeds are expected to accelerate the company's growth across multiple massive addressable markets, including connectivity, launch, terrestrial and space infrastructure, and AI. The company's fundamental business momentum was further reinforced by its signing landmark compute hosting deals totaling tens of billions of dollars annually, including agreements with market leaders Anthropic and Google. SpaceX also announced its acquisition of Cursor, a premier enterprise AI-powered coding platform. Integrating Cursor's technology, talent, and customer base provides another strategic steppingstone into the vast opportunities within AI applications and agentic systems. Lastly, the company conducted a successful test flight of the latest version of its Starship rocket, demonstrating meaningful advancements in rapid and full reusability. We believe these developments support sustained long-term revenue and profit growth well beyond current levels.

APH

Amphenol Corporation is a leading provider of high-technology interconnect, sensor, and antenna solutions serving a diverse set of end markets. The company operates a highly decentralized, entrepreneurial model, with more than 140 general managers exercising autonomy over their individual business units. Amphenol is also highly acquisitive, having completed more than 50 acquisitions over the past decade. Shares rose during the quarter after selling off in the prior period amid concerns that copper interconnect products, where Amphenol maintains a strong competitive position, could eventually be displaced by optical interconnects, where its market position is less established today. Nevertheless, management remains confident that the company can capture more than its fair share of the optical market, just as it did in copper, aided by the recent acquisition of CommScope's connectivity and cable solutions business. We believe Amphenol is well positioned to maintain a leading role even as interconnect technologies evolve from copper to optical, reinforcing our conviction in the company's long-term growth opportunity.

PWR

Quanta Services, Inc. is a leading specialty contracting company that provides comprehensive infrastructure solutions across the electric and gas utility, renewable energy, communications, pipeline, and energy industries. Shares rose during the quarter, driven by broad optimism around AI, data center and power infrastructure construction, as well as strong first quarter earnings that exceeded expectations across the board and prompted management to substantially raise full-year guidance. Management reiterated its view that the business can grow its earnings at a mid-to-high teens rate or better through at least the end of the decade, supported by secular trends including grid modernization, electrification, the energy transition, industrial reshoring, and communications infrastructure upgrades. We continue to believe this level of growth is achievable and take further comfort in Quanta's 25% earnings CAGR since 2015, a period during which the market backdrop was considerably less favorable than it is today. We remain long-term shareholders in Quanta and continue to see compelling growth prospects for the business.

CSGP

CoStar Group, Inc. is the leading provider of information and marketing services to the commercial and residential real estate industries. Shares fell due to multiple compression driven by rising fears related to AI's impact on CoStar's business. The market has increasingly come to view AI as an existential risk for a growing number of industries, including software, business services, information services, and video games. While there is little evidence of any fundamental impact on these sectors, investors have largely adopted a 'shoot first and ask questions later' approach, leading to significant stock price declines. We continue to own CoStar due to its enviable business model, differentiated data assets, and meaningful growth opportunities in providing enhanced real estate information, analytics, and marketplace offerings. The company also maintains a substantial cash balance, which we are hopeful will be used to aggressively repurchase shares at current depressed valuation levels.

GWRE

Shares of P&C insurance software vendor Guidewire Software, Inc. declined after a handful of new sales slipped from the fiscal third quarter into the fiscal fourth quarter. We believe this is purely a timing issue, with these deals having since closed in the current period. Guidewire's InsuranceSuite platform serves as the core system of record for P&C insurance carriers, functioning as the single source of truth for the policies an insurer writes, the claims it processes, the premiums it collects, and the payments it makes. We think the core-system opportunity alone represents nearly $20 billion of annual recurring revenue, or roughly 20 times Guidewire's current size. In our view, AI will meaningfully expand this opportunity by enabling automation and intelligence on top of the core system of record. Guidewire is already bringing new AI-enabled capabilities to market and signing customers, and we expect adoption to accelerate over the coming year. Finally, we expect Guidewire to benefit from the same internal productivity enhancements AI is driving across enterprises, which should help it grow faster with lower costs and ultimately improve profitability.

Syndicated research provider Gartner, Inc. detracted from performance due to multiple compression driven by rising AI fears. We continue to own Gartner given its large addressable market, significant competitive advantage, and robust free cash flow generation, which we expect management to deploy toward ongoing, significant share repurchases at valuations that approach historically low levels.

ACGL

Arch's stock failed to participate in the market rally during the quarter, reflecting a rotation away from resilient insurance stocks as market volatility eased. Soft pricing trends in the insurance industry also pressured shares. Rates for property insurance are falling due to strong profitability and elevated capital levels following last year's benign hurricane season. This cyclicality is normal, and we continue to own the stock due to Arch's strong management team and our expectation of continued growth in earnings and book value over time.

SCHW

Schwab fell on concerns about the potential disruptive impact of AI on brokerage businesses, which we believe is misplaced.

VRSK

Performance in Real Estate and Industrials was hindered by losses from real estate data and marketing platform CoStar Group, Inc. and data and analytics vendor Verisk Analytics, Inc., whose share prices were pressured by the broader market rotation out of information services names amid industry-wide AI fears. A softening P&C insurance pricing backdrop also weighed on Verisk's stock price.

CBRS

We initiated a position in Cerebras Systems Inc., a semiconductor design company building accelerators for AI that completed its IPO during the quarter. We believe that Cerebras has developed one of the most differentiated architectures in this rapidly growing market. We are amidst a 'Big Bang' of new applications for and experiments with AI models, and this surge is leading an increasing proportion of AI infrastructure to be used for inference. The market for fast inference is growing more quickly than the overall inference market, and we believe this niche is on track to become a sizable portion of the broader market. Fast inference refers to the response time of an AI model, and it is a function of token (the popular atomic unit of AI intelligence) usage per second. As developers build applications and agents requiring complex permutations and combinations of underlying models feeding into one another, the demand for tokens per second is growing by orders of magnitude. Cerebras has designed a specialized semiconductor chip with characteristics that are especially well suited to serve this purpose. For most of its history, Cerebras sold AI systems built around its semiconductor accelerator, but it has since transitioned to offering cloud services to drive customer adoption of those systems. For now, Cerebras is pursuing both business models, though it will likely settle into becoming a semiconductor systems company. Unlike most semiconductor firms, we believe that Cerebras holds a genuine performance advantage for a specific set of workloads that require fast inference. While the popular benchmarks serve as good proxies for how Cerebras' offering differs from other AI accelerators in the market, it is the customer engagements that speak loudest. A $20 billion contract with OpenAI for a 750 megawatt Cerebras data center, with the optionality to extend by another 1.25 gigawatts, reflects OpenAI's confidence in the fast inference market and in the differentiated value of Cerebras as a key partner. The company's ongoing discussions with hyperscalers and its announced engagement with Amazon Web Services further validate the opportunity ahead. We continue to believe that the AI infrastructure buildout will sustain its strong momentum and that a large portion of workloads will require fast inference. As the leader in this market, Cerebras should benefit from this massive demand tailwind, and we believe it will keep innovating to maintain its lead over other players.

We initiated a position in Edwards Lifesciences Corporation, a leading manufacturer of heart valve replacement and repair products. Edwards has dominant market share in transcatheter aortic valve replacement (TAVR), a minimally invasive procedure used to treat aortic stenosis, a disease that obstructs the flow of blood throughout the body and strains the heart. If left untreated, the condition can lead to death. Edwards' position in this market is supported by a robust body of positive clinical evidence and widespread physician familiarity with Edwards' product and workflow. We believe that today's $7 billion market for TAVR can grow to more than $10 billion as approved indications expand to allow TAVR to cover a broader patient population. In addition, Edwards' competitor Boston Scientific recently exited the TAVR market, and another competitor, Medtronic, released poor data about its product that we expect will drive additional market share to Edwards. Furthermore, recent policies implemented by Medicare should expand the number of medical centers that can perform TAVR procedures. Edwards also manufactures products used to treat the heart's mitral and tricuspid valves (TMTT). When these valves are dysfunctional, the heart can be forced to work harder, becoming strained and possibly leading to death. Edwards is in the unique position of offering patients options for both valve repair and replacement. The company has devoted more than a decade of research to develop its TMTT portfolio. Addressing TMTT issues is structurally much more complex than TAVR, and the barrier to developing effective solutions is extremely high. We believe that today's $1.5 billion TMTT market can grow to as much as $8 billion over time. With a combined addressable market of nearly $20 billion, we believe Edwards has meaningful opportunity to compound growth. The company also has an attractive and improving margin structure, with 78% gross margins and 27% operating margins. With a more stable competitive landscape in TAVR and large greenfield opportunity in TMTT, we believe Edwards can compound its revenues at low double digit rates and its earnings per share in the mid-teens for an extended period.

FICO

We reduced our position in Fair Isaac Corporation, which produces the FICO score that is widely used by lenders to evaluate consumers' creditworthiness, in response to ongoing uncertainty about potential regulatory changes in the mortgage market.

FND

We sold our position in Floor & Decor Holdings, Inc., a retailer of home flooring, over concerns that market demand trends will remain depressed for longer than we had expected.

BAH

We reduced our position in Booz Allen Hamilton Holding Corporation, which primarily provides technology consulting and implementation services to the U.S. defense establishment, over concerns about the looming impact of AI on their business.

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Investment Summary

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Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

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AI

Space

Software

Semiconductors

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Medical Devices

P&C Insurance

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Data Centers

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AI

Semiconductors

Software

Healthcare

AI

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Current Portfolio as of ( 30th June 2026 )

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