Baron Focused Growth Fund

Investor Summary

Ronald Stephen Baron, born in 1943, is an American mutual fund manager and founder of Baron Capital, a New York City investment management firm managing approximately $45 billion in assets. As of January 2026, his net worth is estimated at $6.5 billion. Baron founded Baron Capital in 1982 and has 55 years of research experience, having worked as an institutional securities analyst from 1970 to 1982. He holds a B.A. in Chemistry from Bucknell University, awarded in 1965, and attended George Washington University Law School at night while working at the U.S. Patent Office. Baron was raised in a Jewish family in Asbury Park, New Jersey, and began investing as a youth, turning a $1,000 investment into $4,000. Baron is married to Judy Bernard since 1978 and has two children. In 2007, he purchased a record-setting $103 million house in East Hampton, New York, the most ever paid for a residential property at that time. Baron was inducted into the Institutional Investor Hall of Fame in 2012, recognizing his financial industry achievements.

Fund Strategy

The Baron Focused Growth Fund employs a proprietary, research-intensive, bottom-up long-term investment approach aiming to identify businesses capable of doubling in value over five to seven years. The fund focuses on high-conviction small- and mid-cap growth companies and maintains a concentrated portfolio with the top 10 holdings making up about 60.5% of assets. The fund maintains high active share (98.1%) with low turnover (3-year average at 6.90%). The investment philosophy emphasizes investing in competitively advantaged businesses with secular growth, attractive valuations, exceptional management, and sustainable business models. The fund's approach is seen as especially effective in a market dominated by short-term trading and algorithms, committing to a time-tested philosophy of holding investments for the long term. As stated in the fund materials: 'We will initiate a position only if we believe the stock can double in size in a five-to-seven-year period'. Risk management combines extensive due diligence and diversification across categories such as disruptive growth, core growth, real/irreplaceable assets, and financials.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
13.68%	-5.05%	-5.05%

Executive Summary

Baron Focused Growth Fund declined 4.99% in Q1 2026 versus 3.52% loss for Russell 2500 Growth Index, primarily due to AI concerns affecting software holdings and Iran war worries impacting consumer-focused investments. However, SpaceX acquisition of xAI at significantly higher valuation provided strong positive contribution. Portfolio companies continue generating strong growth and cash flow with balance sheets below targeted leverage levels, enabling additional buybacks. Accelerated insider purchases across multiple holdings including Verisk, Birkenstock, Vail, FactSet, MSCI, Figma, and CoStar reinforce management confidence in attractive valuations. Fund increased positions in many stocks while adding new names, maintaining focus while appropriately sizing for risk. Managers expect inflation to remain at 3-4% with rates approximating inflation, creating favorable environment for businesses growing faster than inflation rate. Significant capital remains on sidelines including private equity, with lower rates expected to accelerate public-to-private transactions supporting valuations. Portfolio viewed as compelling with favorable risk/reward profile offering multiple return avenues.

Forward Outlook

Managers continue to view the portfolio as compelling with favorable risk/reward profile. They believe combination of strong revenue growth, well-positioned balance sheets, and attractive valuations offers multiple avenues for potential returns. Near-term inflation expected to remain at 3-4% with rates approximating inflation, creating favorable environment for businesses growing faster than inflation rate.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Mar 31 2026	2026 Q1	CHH, CSGP, FIGS, GWRE, H, ONON, RRR, SPOT, TSLA	AI, concentrated, consumer discretionary, growth, long-term, Space, technology, valuation	-	Baron Focused Growth declined 4.99% in Q1 on AI fears and Iran war concerns, but SpaceX-xAI deal provided strong offset. Portfolio companies maintain strong fundamentals with balance sheets enabling buybacks. Accelerated insider purchases across holdings reinforce attractive valuations. Managers increased positions while adding new names, viewing portfolio as compelling with favorable risk/reward profile.
Jan 30 2026	2025 Q4	ABNB, ACGL, BIRK, CHH, CSGP, DEI, DUOL, FDS, FIGS, GWRE, H, IBKR, IDXX, IOT, JEF, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TOL, TSLA, VRSK	AI, consumer, Electric Vehicles, growth, healthcare, real estate, Space, technology	GWRE FIGS H ONON SPOT CSGP DUOL	Baron Focused Growth Fund posted 12.34% Q4 return and 22.26% annual return, outperforming benchmarks through balanced exposure to disruptive growth, consumer resilience, and space technology. Despite AI competition concerns affecting some software holdings, underlying fundamentals remain strong. Management sees compelling risk-adjusted opportunities ahead with attractive valuations and significant capital deployment potential as rates decline.
Oct 28 2025	2025 Q3	ABNB, ACGL, BIRK, CHH, CSGP, DEI, DUOL, FDS, FIGS, GWRE, H, IBKR, IDXX, IOT, IRDM, JEF, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TOL, TSLA, VRSK	AI, consumer discretionary, Electric Vehicles, growth, portfolio construction, small caps, technology	-	Baron Focused Growth Fund's balanced approach of disruptive growers, steady compounders, and discounted real assets delivered solid Q3 returns despite benchmark underperformance. AI fears and economic sensitivity concerns weighed on some holdings, but strong underlying fundamentals and attractive small-cap valuations position the portfolio well for long-term outperformance as growth accelerates and multiples expand.
Jul 31 2025	2025 Q2	ABNB, ACGL, ANSYS, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, IOT, IRDM, JEF, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TOL, TSLA, VRSK	Balance Sheets, consumer discretionary, growth, small caps, tariffs, technology	-	Baron Focused Growth Fund outperformed in Q2 2025 with 12.78% returns driven by Disruptive Growth holdings like Spotify and Tesla. Despite tariff uncertainty, over half the portfolio expects accelerated growth next year from prior investments. Strong balance sheets across 70% of holdings provide flexibility for growth and capital returns. Portfolio trades at attractive valuations with favorable risk/reward dynamics.
Mar 31 2025	2025 Q1	ABNB, ACGL, AMH, ANSS, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, JEF, KKD, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TSLA, VRSK	AI, consumer discretionary, Electric Vehicles, financials, growth, real estate, software, technology	-	Baron Focused Growth Fund outperformed benchmarks despite Q1 challenges from tariff uncertainty affecting cyclical holdings. Strong recurring revenue base, founder-led management, and robust balance sheets position the portfolio well for current uncertainty. Recent market declines create attractive entry points in competitively advantaged growth businesses, with the fund actively deploying capital into both existing and new opportunities.
Dec 31 2024	2024 Q4	ABNB, ACGL, AMH, ANSYS, BRKR, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, JEF, KREM, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP.TO, SPOT, TSLA, VRSK	consumer discretionary, Electric Vehicles, financials, growth, Hotels, Space, Streaming, technology	-	Baron Focused Growth Fund surged 14.49% in Q4 2024, vastly outperforming its benchmark's 2.43% return, led by Disruptive Growth investments including Tesla and Spotify. The Fund's focus on competitively advantaged, well-financed growth companies taking market share delivered 29.85% annual returns. Managers expect continued earnings acceleration and multiple expansion in a declining rate environment.
Sep 30 2024	2024 Q3	ABNB, ACGL, AMH, ANSYS, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDEXX, ILMN, IRDM, JEF, KKD, LVS, MRNA, MSCI, MTN, ONON, RRR, SHOP, SPOT, TSLA, VRSK	concentrated, consumer discretionary, financials, growth, long-term, small caps, technology	-	Baron Focused Growth Fund gained 11.77% in Q3 2024, outperforming its benchmark by 478 basis points. Disruptive Growth investments led performance as Fed rate cut expectations boosted Tesla, Guidewire, and Spotify. The concentrated 29-stock portfolio targets competitively advantaged businesses with strong recurring revenue and pricing power, positioned for further upside as economic concerns moderate.
Jul 27 2024	2024 Q2	ACGL, AMH, ANSYS, ARE, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, JEF, KKD, LVS, MSCI, MTN, ONON, RRR, SHOP, SPOT, TSLA, VRSK	concentrated, consumer discretionary, Disruptive Growth, growth, Long/Short, rates, technology	SPOT TSLA IBKR GWW COST	Baron Focused Growth Fund outperformed in Q2 as Disruptive Growth holdings rallied on Fed rate cut expectations while Real Estate and economic-sensitive names declined. Managers see portfolio reflecting overly pessimistic earnings assumptions and believe stocks are cyclically depressed, not secularly challenged. They view current risk/reward as attractive with upside potential over 12-18 months if recession fears prove excessive.
Apr 15 2024	2024 Q1	ACGL, ANSYS, BIRK, BNTX, CHH, CSGP, DNUT, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, ONON, RRR, SHOP, SPOT, TSLA, VRSK	consumer discretionary, financials, growth, long-term, technology	-	Baron Focused Growth Fund's concentrated portfolio of competitively advantaged businesses underperformed in Q1 as higher rates pressured growth stocks, particularly Tesla and other Disruptive Growth holdings. However, Financials and Real Assets performed well. Management maintains conviction in long-term prospects, believing current valuations are overly pessimistic and positioning for significant upside when conditions normalize.
Jan 27 2024	2023 Q4	ACGL, ANSYS, BNTX, CHH, CSGP, FDS, FIGS, GWRE, H, IDXX, ILMN, IRDM, MSCI, RIVN, RRR, SHOP, SPOT, TSLA, VAC, VRSK	Casinos, consumer discretionary, Electric Vehicles, financials, growth, Hotels, Space, technology	BNTX ACGL\|CHH\|FDS\|GWRE\|IBKR\|IDXX\|MTN\|SPOT\|TSLA CHRS 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 ARGX BB\|DAVA\|DDOG\|GLOB\|ILMN\|LOAR\|MELI\|NET\|NU\|NVDA\|TSM	Baron Focused Growth Fund posted strong Q4 returns of 9.74% and exceptional full-year performance of 27.78%, significantly outperforming benchmarks through concentrated investments in competitively advantaged growth businesses. The Fund's Disruptive Growth companies like Tesla and SpaceX, Core Growth businesses with pricing power, and Real/Irreplaceable Assets with strong brands drove outperformance despite modest underperformance in Q4 due to limited exposure to rate-sensitive stocks.
Sep 30 2023	2023 Q3	ACGL, CHH, CSGP, DNUT, FDS, FIGS, GWRE, H, IRDM, MANU, MGM, MSCI, MTN, ONON, RRR, SPOT, TSLA, VAC	Concentration, consumer discretionary, financials, growth, long-term, technology	-	Baron Focused Growth Fund outperformed despite a 5.29% decline in Q3 2023, driven by recurring revenue businesses with pricing power like Guidewire and FactSet. Disruptive Growth holdings faced pressure from macroeconomic headwinds. The concentrated 30-stock portfolio focuses on competitively advantaged businesses returning capital to shareholders. Management expects significant upside if recession fears prove overblown.
Dec 31 2022	2022 Q4	ACGL, CSGP, DNUT, FDS, FIGS, GWRE, H, IRDM, MTN, PENN, SPOT, TSLA	-	-
Sep 30 2022	2022 Q3	DNUT, FDS, FIGS, GWRE, H, IRDM, SHOP, TSLA	-	-
Jun 30 2022	2022 Q2	CSGP, FIGS, GWRE, H, MSCI, RRR, SPOT, TSLA	-	-
Mar 31 2022	2022 Q1	ACGL, CSGP, GWRE, H, IRDM, MTN, SPOT, TSLA, VLD, WRBY	-	-

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Mar 31 2026

2026 Q1

CHH, CSGP, FIGS, GWRE, H, ONON, RRR, SPOT, TSLA

AI, concentrated, consumer discretionary, growth, long-term, Space, technology, valuation

Baron Focused Growth declined 4.99% in Q1 on AI fears and Iran war concerns, but SpaceX-xAI deal provided strong offset. Portfolio companies maintain strong fundamentals with balance sheets enabling buybacks. Accelerated insider purchases across holdings reinforce attractive valuations. Managers increased positions while adding new names, viewing portfolio as compelling with favorable risk/reward profile.

Jan 30 2026

2025 Q4

ABNB, ACGL, BIRK, CHH, CSGP, DEI, DUOL, FDS, FIGS, GWRE, H, IBKR, IDXX, IOT, JEF, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TOL, TSLA, VRSK

AI, consumer, Electric Vehicles, growth, healthcare, real estate, Space, technology

GWRE
FIGS
H
ONON
SPOT
CSGP
DUOL

Baron Focused Growth Fund posted 12.34% Q4 return and 22.26% annual return, outperforming benchmarks through balanced exposure to disruptive growth, consumer resilience, and space technology. Despite AI competition concerns affecting some software holdings, underlying fundamentals remain strong. Management sees compelling risk-adjusted opportunities ahead with attractive valuations and significant capital deployment potential as rates decline.

Oct 28 2025

2025 Q3

ABNB, ACGL, BIRK, CHH, CSGP, DEI, DUOL, FDS, FIGS, GWRE, H, IBKR, IDXX, IOT, IRDM, JEF, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TOL, TSLA, VRSK

AI, consumer discretionary, Electric Vehicles, growth, portfolio construction, small caps, technology

Baron Focused Growth Fund's balanced approach of disruptive growers, steady compounders, and discounted real assets delivered solid Q3 returns despite benchmark underperformance. AI fears and economic sensitivity concerns weighed on some holdings, but strong underlying fundamentals and attractive small-cap valuations position the portfolio well for long-term outperformance as growth accelerates and multiples expand.

Jul 31 2025

2025 Q2

ABNB, ACGL, ANSYS, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, IOT, IRDM, JEF, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TOL, TSLA, VRSK

Balance Sheets, consumer discretionary, growth, small caps, tariffs, technology

Baron Focused Growth Fund outperformed in Q2 2025 with 12.78% returns driven by Disruptive Growth holdings like Spotify and Tesla. Despite tariff uncertainty, over half the portfolio expects accelerated growth next year from prior investments. Strong balance sheets across 70% of holdings provide flexibility for growth and capital returns. Portfolio trades at attractive valuations with favorable risk/reward dynamics.

Mar 31 2025

2025 Q1

ABNB, ACGL, AMH, ANSS, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, JEF, KKD, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP, SPOT, TSLA, VRSK

AI, consumer discretionary, Electric Vehicles, financials, growth, real estate, software, technology

Baron Focused Growth Fund outperformed benchmarks despite Q1 challenges from tariff uncertainty affecting cyclical holdings. Strong recurring revenue base, founder-led management, and robust balance sheets position the portfolio well for current uncertainty. Recent market declines create attractive entry points in competitively advantaged growth businesses, with the fund actively deploying capital into both existing and new opportunities.

Dec 31 2024

2024 Q4

ABNB, ACGL, AMH, ANSYS, BRKR, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, JEF, KREM, LVS, LYV, MSCI, MTN, ONON, RRR, SHOP.TO, SPOT, TSLA, VRSK

consumer discretionary, Electric Vehicles, financials, growth, Hotels, Space, Streaming, technology

Baron Focused Growth Fund surged 14.49% in Q4 2024, vastly outperforming its benchmark's 2.43% return, led by Disruptive Growth investments including Tesla and Spotify. The Fund's focus on competitively advantaged, well-financed growth companies taking market share delivered 29.85% annual returns. Managers expect continued earnings acceleration and multiple expansion in a declining rate environment.

Sep 30 2024

2024 Q3

ABNB, ACGL, AMH, ANSYS, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDEXX, ILMN, IRDM, JEF, KKD, LVS, MRNA, MSCI, MTN, ONON, RRR, SHOP, SPOT, TSLA, VRSK

concentrated, consumer discretionary, financials, growth, long-term, small caps, technology

Baron Focused Growth Fund gained 11.77% in Q3 2024, outperforming its benchmark by 478 basis points. Disruptive Growth investments led performance as Fed rate cut expectations boosted Tesla, Guidewire, and Spotify. The concentrated 29-stock portfolio targets competitively advantaged businesses with strong recurring revenue and pricing power, positioned for further upside as economic concerns moderate.

Jul 27 2024

2024 Q2

ACGL, AMH, ANSYS, ARE, BIRK, CHH, CSGP, DEI, FDS, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, JEF, KKD, LVS, MSCI, MTN, ONON, RRR, SHOP, SPOT, TSLA, VRSK

concentrated, consumer discretionary, Disruptive Growth, growth, Long/Short, rates, technology

SPOT
TSLA
IBKR
GWW
COST

Baron Focused Growth Fund outperformed in Q2 as Disruptive Growth holdings rallied on Fed rate cut expectations while Real Estate and economic-sensitive names declined. Managers see portfolio reflecting overly pessimistic earnings assumptions and believe stocks are cyclically depressed, not secularly challenged. They view current risk/reward as attractive with upside potential over 12-18 months if recession fears prove excessive.

Apr 15 2024

2024 Q1

ACGL, ANSYS, BIRK, BNTX, CHH, CSGP, DNUT, FIGS, GWRE, H, IBKR, IDXX, ILMN, IRDM, ONON, RRR, SHOP, SPOT, TSLA, VRSK

consumer discretionary, financials, growth, long-term, technology

Baron Focused Growth Fund's concentrated portfolio of competitively advantaged businesses underperformed in Q1 as higher rates pressured growth stocks, particularly Tesla and other Disruptive Growth holdings. However, Financials and Real Assets performed well. Management maintains conviction in long-term prospects, believing current valuations are overly pessimistic and positioning for significant upside when conditions normalize.

Jan 27 2024

2023 Q4

ACGL, ANSYS, BNTX, CHH, CSGP, FDS, FIGS, GWRE, H, IDXX, ILMN, IRDM, MSCI, RIVN, RRR, SHOP, SPOT, TSLA, VAC, VRSK

Casinos, consumer discretionary, Electric Vehicles, financials, growth, Hotels, Space, technology

Baron Focused Growth Fund posted strong Q4 returns of 9.74% and exceptional full-year performance of 27.78%, significantly outperforming benchmarks through concentrated investments in competitively advantaged growth businesses. The Fund's Disruptive Growth companies like Tesla and SpaceX, Core Growth businesses with pricing power, and Real/Irreplaceable Assets with strong brands drove outperformance despite modest underperformance in Q4 due to limited exposure to rate-sensitive stocks.

Sep 30 2023

2023 Q3

ACGL, CHH, CSGP, DNUT, FDS, FIGS, GWRE, H, IRDM, MANU, MGM, MSCI, MTN, ONON, RRR, SPOT, TSLA, VAC

Concentration, consumer discretionary, financials, growth, long-term, technology

Baron Focused Growth Fund outperformed despite a 5.29% decline in Q3 2023, driven by recurring revenue businesses with pricing power like Guidewire and FactSet. Disruptive Growth holdings faced pressure from macroeconomic headwinds. The concentrated 30-stock portfolio focuses on competitively advantaged businesses returning capital to shareholders. Management expects significant upside if recession fears prove overblown.

Dec 31 2022

2022 Q4

ACGL, CSGP, DNUT, FDS, FIGS, GWRE, H, IRDM, MTN, PENN, SPOT, TSLA

Sep 30 2022

2022 Q3

DNUT, FDS, FIGS, GWRE, H, IRDM, SHOP, TSLA

Jun 30 2022

2022 Q2

CSGP, FIGS, GWRE, H, MSCI, RRR, SPOT, TSLA

Mar 31 2022

2022 Q1

ACGL, CSGP, GWRE, H, IRDM, MTN, SPOT, TSLA, VLD, WRBY

QUARTER	THEMES	TAGS
2026 Q1	AI Continued concerns about AI's effects on portfolio businesses, particularly subscription-based software platforms. AI fears driving multiple compression across software, business services, and information services despite no fundamental impact evidence.	Software Competition Disruption Valuation Music
	Space SpaceX completed acquisition of xAI at significantly higher enterprise value, driving strong performance. Company expanding Starlink broadband service with substantial user growth and deploying advanced Starship rocket technology.	SpaceX Starlink Satellites Launch Valuation
	Electric Vehicles Tesla delivered strong quarterly results amid challenging EV environment with improved automotive gross margins. Company advancing AI and autonomous driving initiatives with meaningful robotaxi expansion expected in 2026.	Tesla Autonomous Robotaxi Manufacturing Margins
	Travel Travel companies facing headwinds from Iran war concerns affecting consumer spending and regional bookings. However, underlying fundamentals remain strong with continued revenue growth and pricing power.	Hotels Casinos Consumer Geopolitical RevPAR
	Buybacks Portfolio companies have strong balance sheets with financial leverage below targets, providing liquidity for additional share buybacks. Accelerated insider purchases observed across multiple holdings reinforcing attractive valuations.	Capital Leverage Insiders Valuation Returns
2025 Q4	Defense Spending Manager maintains exposure to global armaments companies, noting the entire world is rapidly rearming off an extremely low base of defense spending. The position materially outperformed for the year despite Q4 underperformance, with top contributors including Rheinmetall, Palantir Technologies, and RTX.	Defense Armaments Military Geopolitical Spending
	Gold Manager holds both physical gold bullion and a leveraged gold exposure called 'Gresham's Wrath' that provides 1.5x gold exposure plus option income. Gold is viewed as superior commodity money due to its scarcity and durability, with central bank demand accelerating and fiat currencies losing value since 1971.	Gold Precious Metals Monetary Inflation Currency
	Precious Metal Royalty/Streaming Companies Manager maintains exposure to companies that provide upfront capital to mining companies in exchange for royalties or streams, avoiding operational mining risks while benefiting from price appreciation and production growth. These exposures materially outperformed for the year.	Royalties Streaming Mining Commodities Cash Flow
	Capital Markets Manager holds positions in exchanges like Nasdaq and Chicago Board of Options Exchange, viewing them as essential high-margin toll roads for the economy with immense operating leverage and natural inflation hedging through transaction-based revenue.	Exchanges Trading Technology Data Infrastructure
	Japan Manager exited unhedged Japan exposure due to currency headwinds from weakening Yen but added a new dynamically hedged Japan position that filters for companies treating shareholders well and adjusts currency hedge based on four separate models.	Japan Currency Hedging Governance Yen
	Bitcoin Despite long-term bullish views, manager completely exited Bitcoin position in mid-November using risk management framework similar to commodity trading funds. The exit was well-timed as Bitcoin continued falling while US Large Cap equities they rotated into increased in value.	Bitcoin Cryptocurrency Risk Management Volatility Digital Assets
2025 Q3	AI AI concerns impacted several holdings including FactSet and Verisk, with investors fearing competitive threats to data moats. However, FactSet continues to benefit from AI through revenue enhancements and cost containments. Tesla's AI initiatives advance rapidly with robotaxi network expansion and Full Self-Driving development.	Artificial Intelligence Data Moats Automation Robotics Machine Learning
	Electric Vehicles Tesla showed renewed strength with core automotive business accelerating and expectations for further acceleration in 2025-2026 with new lower-cost models. The energy storage business continues growing and becoming a large contributor to earnings and margin growth.	EVs Battery Technology Autonomous Driving Energy Storage Charging Infrastructure
	E-commerce Shopify delivered strong results with 30% revenue growth and 29% GMV growth, benefiting from expansion into offline, international, and B2B channels. The company is advancing in agentic commerce with OpenAI partnership while maintaining less than 2% share of global commerce market.	Online Commerce Digital Payments Merchant Services Omnichannel SaaS
	Travel Travel-related holdings faced headwinds from economic sensitivity concerns. Choice Hotels saw slowing RevPAR growth but is expanding higher-margin fee income. Vail Resorts experienced concerns about visitation levels and season pass sales, prompting marketing strategy refinements.	Hotels Hospitality Tourism Leisure RevPAR
	Buybacks Strong balance sheets across portfolio companies provide opportunities for share buybacks during stock price dislocations. Insider buying activity increased in Tesla, Vail, Jefferies, and FactSet, providing confidence in investment theses and expected returns over time.	Share Repurchases Capital Allocation Insider Buying Shareholder Returns Stock Buybacks
2025 Q2	Electric Vehicles Tesla continues to benefit from sequential acceleration in automotive segment and new lower-cost models expected in 2025. The company's energy storage business is growing and becoming a significant contributor to earnings and margins. Tesla should benefit from its eight-year, $10 billion investment in AI training for autonomous technology.	Tesla Autonomous Energy Storage AI Automotive
	Streaming Spotify continues to improve its platform by adding new products and making it more beneficial for consumers. The company has started instituting more regular price increases, accelerating revenue and margin growth. Management believes they can grow paying subscribers to a billion over the medium term from 250 million today.	Spotify Subscribers Pricing Power Digital Audio Music
	Cloud Guidewire's cloud transition is substantially complete and insurers are upgrading to the cloud at an accelerated rate. The company expects to shift R&D resources from infrastructure investment to product development, which should help drive cross-sales and potentially accelerate annual recurring revenue over time.	Guidewire Insurance Software SaaS Migration ARR
	Travel Travel-related holdings including Vail Resorts, Choice Hotels, and Hyatt Hotels faced headwinds from concerns about slowing visitation levels and potential tariff impacts on consumer spending. However, these companies maintain strong balance sheets and pricing power to navigate challenges.	Hotels Resorts RevPAR Visitation Consumer Spending
2025 Q1	AI X.AI Holdings Corp. is developing an AI model to understand the true nature of the universe, launching Grok 3 which demonstrated top scores ahead of other industry-leading AI models. The company opened the Colossus data center with over 100,000 GPUs and recently acquired X (formerly Twitter) to access vast real-time multimodal data from 600 million users. Tesla's AI ambitions include a robotaxi service launching this year and a fast-growing humanoid program that could transform its growth story.	Artificial Intelligence Machine Learning Robotics Autonomous Vehicles Data Centers
	Electric Vehicles Tesla manufactures electric vehicles, solar products, and energy storage solutions alongside advanced real-world AI technologies. Despite declining analyst expectations for auto delivery volume and margins in 2025 due to Model Y refresh and regulatory challenges, the fund remains confident in Tesla's long-term growth underpinned by secular trends in EV adoption, compelling product line, leading cost structure, and cutting-edge technology.	EVs Battery Technology Charging Infrastructure Energy Storage Autonomous Driving
	Streaming Spotify Technology is a leading global digital music service offering on-demand audio streaming through paid premium subscriptions and ad-supported models. The company has been on a path to structurally increase gross margins aided by high-margin artist promotions marketplace, growing contribution from podcasts, and structural investments in advertising. Spotify is viewed as a long-term winner in music streaming with potential to reach 1 billion-plus monthly active users.	Music Streaming Digital Media Subscription Services Advertising Content
	Travel The fund holds positions in Las Vegas Sands, Hyatt Hotels, Vail Resorts, and Airbnb, representing exposure to gaming, hospitality, and vacation rental markets. These companies are experiencing uncertainty from potential recession concerns and tariff policies, but maintain strong balance sheets and pricing power. Hyatt expects double-digit EBITDA growth in 2025, while Vail continues to have significant pricing power and a captive high-end consumer base.	Hotels Casinos Vacation Rentals Tourism Hospitality
	Real Estate CoStar Group is a real estate data and marketing platform that increased 10.6% in the quarter due to acceleration in daily active users on its Homes.com platform. The company's monthly active users have reached 110 million compared to Zillow's 204 million, demonstrating meaningful traffic growth. Over the next five years, CoStar's residential investment could add at least $1 billion to annualized revenue at significantly accretive margins.	Real Estate Data Property Technology Commercial Real Estate Residential Real Estate Marketing Platforms
	Software The fund holds several software companies including Guidewire Software, which provides property and casualty insurance software and is substantially through its cloud transition. The company is shifting R&D resources from infrastructure investment to product development, which should help drive cross-sales and accelerate annual recurring revenue. Guidewire is expected to capture 30% to 50% of the $15-30 billion total addressable market in P&C insurance software.	Enterprise Software Cloud Computing SaaS Insurance Technology Recurring Revenue
2024 Q4	Electric Vehicles Tesla continues to demonstrate strong performance with 54% quarterly gains, driven by core automotive acceleration and new lower-cost model releases expected in 2025. The company benefits from lower interest rates helping car sales and halting continuous price reductions, while energy storage business grew 60% sequentially.	Tesla Automotive Energy Storage Pricing Models
	Streaming Spotify increased 21.4% in the quarter, continuing to improve its platform with new products and demonstrating significant pricing power. The company has instituted regular price increases without increasing churn rates, with gross margins expected to improve from 26% to 30-35% over time.	Spotify Pricing Power Subscribers Margins Platform
	Capital Markets Interactive Brokers gained 26.9% with 30% year-over-year account growth and 45% margin loan growth, driven by strength in international markets. The company benefits from automation advantages and serves sophisticated investors across global markets with industry-leading margins over 70%.	Interactive Brokers Automation International Margins Growth
	Space SpaceX continues generating significant value through rapid Starlink broadband expansion with substantial new user growth and efficient hardware deployment. The company has established itself as a leading launch provider with reusable technology and is making progress on Starship, the largest most powerful rocket ever flown.	SpaceX Starlink Launch Reusable Starship
	Hotels Hotel investments including Hyatt Hotels and Choice Hotels contributed to outstanding performance, benefiting from strong recurring revenue with significant pricing power and high customer retention rates. These Real/Irreplaceable Assets businesses maintain meaningful brand equity and barriers to entry.	Hyatt Choice Hotels Pricing Power Brand Retention
	Casinos Red Rock Resorts faced challenges from market slowdown and cannibalization by its new Durango casino, though the new property is generating 20% returns on invested capital. Las Vegas population growth combined with inflationary pricing should drive high single-digit EBITDA growth.	Red Rock Durango Las Vegas EBITDA Returns
2024 Q3	Electric Vehicles Tesla represents the fund's largest position at 9.8% of assets, with the stock contributing 274 bps to quarterly performance. The manager believes lower interest rates should help Tesla sell more cars and halt continuous price reductions, while the energy storage business continues to grow rapidly.	Tesla EV Energy Storage Autonomous AI
	Cloud Guidewire Software's cloud transition is substantially complete, with subscription gross margins improving by over 1,000 basis points. The company is shifting R&D resources from infrastructure to product development, which should drive cross-sales and accelerate annual recurring revenue growth.	SaaS Cloud Migration Insurance Software ARR Margins
	Travel The fund holds positions in Vail Resorts, Hyatt Hotels, and Airbnb, representing companies with strong pricing power and recurring revenue models. Despite near-term headwinds from normalization post-COVID, these businesses benefit from consumers' preference to spend on experiences over goods.	Hotels Experiences Pricing Power Recovery Leisure
	Streaming Spotify increased 17.4% in the quarter, driven by subscriber growth and significant pricing power. The company has instituted regular price increases without increasing churn rates, with management expecting gross margins to improve from 26% to 30-35% over time.	Music Subscriptions Pricing Power Margins Content
	Capital Markets Interactive Brokers gained 13.7% as the company continues gaining market share through automation and international expansion. The firm added over one million customers in 12 months, with industry-leading margins over 70% and significant cash for acquisitions and platform growth.	Brokerage Automation International Margins Growth
2024 Q2	Electric Vehicles Tesla continues to drive manufacturing costs lower and invest heavily in AI initiatives. The company expects to launch a lower cost model as soon as late 2024, which should result in accelerated revenue growth and increased factory utilization. Tesla's energy storage business almost doubled in Q2 from Q1 levels.	Tesla Manufacturing AI Energy Storage Autonomous
	Streaming Spotify continues to improve its platform adding new products and making it more beneficial for consumers. The company has started to institute more regular price increases, which is accelerating revenue and margin growth. Spotify is beginning to exercise pricing power following last year's initial price increases that saw minimal churn.	Spotify Pricing Power Subscriptions Music Podcasts
	Space SpaceX is generating significant value with the rapid expansion of its Starlink broadband service, reporting substantial growth in active users. The company has established itself as a leading launch provider by offering highly reliable and cost-effective launches. SpaceX is making tremendous progress on Starship, the largest, most powerful rocket ever flown.	SpaceX Starlink Satellites Launch Starship
	Travel Vail Resorts faced challenges from poor snow conditions affecting season pass sales, but the company still expects to generate almost $950 million in season pass revenue. Hyatt Hotels continues to increase business transient and group bookings, which are now pacing 7% ahead of 2023 levels. Both companies benefit from consumers' desire to spend more on experiences over goods.	Vail Hyatt Season Pass Experiences Leisure
	Rates The Federal Reserve's restrictive policies over the past year were beginning to have their desired effect of slowing inflation and job growth. This cooling led investors to believe the Fed could start cutting interest rates as soon as fall 2024. Lower interest rates are expected to benefit disruptive growth investments and help Tesla sell more cars.	Fed Interest Rates Inflation Growth Valuations
2024 Q1	Electric Vehicles Tesla remains a core holding despite 29% decline in Q1. The company continues to generate sufficient gross profit to support robust product development including the refreshed Model 3 and Y. Tesla should benefit from its eight-year $10 billion investment in AI training for autonomous technology.	Tesla Autonomous Cybertruck Manufacturing AI
	Travel Real/Irreplaceable Assets including hotels and casinos performed well, gaining 9.7% in the quarter. These businesses benefit from significant daily pricing power in an inflationary environment and consumers' continued preference for experiences over goods.	Hotels Casinos Pricing Power Experiences Inflation
	Capital Markets Financial businesses represented 18.2% of the Fund and benefited from higher interest rates. Interactive Brokers increased 34.8% as it continues taking market share through automation and international expansion, growing new accounts over 20% annually.	Brokers Automation International Margins Growth
	Streaming Spotify increased 40.4% in the quarter on operating margins and subscriber additions exceeding expectations. The company is prioritizing profitability while expanding its advertising segment and increasing podcast profitability.	Music Podcasts Advertising Profitability Subscribers
2023 Q4	Electric Vehicles Tesla remains the Fund's largest position at 11.4% despite modest quarterly decline. The manager views Tesla as benefiting from AI investments through autonomous driving technology, Dojo training computer, and humanoid robotics. The Cybertruck launch and refreshed Model 3 are generating strong demand while improving unit economics.	Tesla Cybertruck Autonomous AI Manufacturing
	Space Space Exploration Technologies Corp. (SpaceX) is the second-largest position at 9.4%, contributing 241 bps to quarterly performance. The company achieved record 96 Falcon rocket launches in 2023, nearly doubling from 2022. Starlink operates over 5,500 satellites serving 2.3 million customers, more than doubling its customer base during the year.	SpaceX Starlink Satellites Rockets Starship
	AI The manager expects Tesla to benefit from artificial intelligence investments through development of autonomous driving technology, Dojo AI training computer, autobidder automated energy trading platform, and humanoid robotics. AI is viewed as a key driver for Tesla's future value creation beyond traditional automotive business.	Autonomous Dojo Robotics Machine Learning
	Hotels Hyatt Hotels Corporation appreciated 23.1% in the quarter, contributing 107 bps to performance. The company reported strong demand across its portfolio with robust leisure travel and improvement in business transient and group business now pacing above pre-COVID levels. Room rate increases are generating solid margins and cash flow.	Hyatt Leisure Business Travel Occupancy
	Casinos Red Rock Resorts increased 30.7% on the opening of its new Durango casino in early December. The company reported strong initial visitation and spend levels without cannibalization at other properties. Red Rock expects the casino to generate profits from day one and projects 20% annualized return on its $800 million investment by 2026.	Red Rock Durango Las Vegas Gaming
	Rates Investor expectations of Federal Reserve pivot from raising rates to lowering rates over the next year benefited leveraged, cyclical, and interest rate sensitive stocks significantly. The Fund has modest investments in such businesses. The manager believes their Financials businesses can continue to grow in a declining rate environment due to recurring revenue and strong pricing power.	Federal Reserve Interest Rates Monetary Policy
2023 Q3	Resilience Portfolio companies continue to generate strong results despite macroeconomic concerns. Most businesses have yet to experience changes in customer demographics or spending levels and have been able to offset cost increases with higher prices without impacting demand.	Pricing Power Margins Cash Flow Stability Retention
	Buybacks Many portfolio companies are accelerating their return of capital to shareholders through increased buybacks and dividends. Management teams including CEOs, CFOs and Directors are personally buying their stocks, signaling confidence in business prospects.	Share Repurchase Capital Return Management Buying Excess Cash
	Travel The fund holds significant positions in travel-related companies including Hyatt Hotels, Vail Resorts, and Marriott Vacations. These businesses are benefiting from occupancies returning to pre-COVID levels and strong tour package bookings.	Hotels Resorts Occupancy Recovery Timeshare
	SaaS Software-as-a-Service companies like Guidewire and FactSet are showing strong subscription growth and margin expansion. These businesses have recurring revenue models with high client retention rates and pricing power.	Subscription Recurring Revenue Cloud Retention Margins

QUARTER

THEMES

AI

Continued concerns about AI's effects on portfolio businesses, particularly subscription-based software platforms. AI fears driving multiple compression across software, business services, and information services despite no fundamental impact evidence.

Software Competition Disruption Valuation Music

Space

SpaceX completed acquisition of xAI at significantly higher enterprise value, driving strong performance. Company expanding Starlink broadband service with substantial user growth and deploying advanced Starship rocket technology.

SpaceX Starlink Satellites Launch Valuation

Electric Vehicles

Tesla delivered strong quarterly results amid challenging EV environment with improved automotive gross margins. Company advancing AI and autonomous driving initiatives with meaningful robotaxi expansion expected in 2026.

Tesla Autonomous Robotaxi Manufacturing Margins

Travel

Travel companies facing headwinds from Iran war concerns affecting consumer spending and regional bookings. However, underlying fundamentals remain strong with continued revenue growth and pricing power.

Hotels Casinos Consumer Geopolitical RevPAR

Buybacks

Portfolio companies have strong balance sheets with financial leverage below targets, providing liquidity for additional share buybacks. Accelerated insider purchases observed across multiple holdings reinforcing attractive valuations.

Capital Leverage Insiders Valuation Returns

2025 Q4

Defense Spending

Manager maintains exposure to global armaments companies, noting the entire world is rapidly rearming off an extremely low base of defense spending. The position materially outperformed for the year despite Q4 underperformance, with top contributors including Rheinmetall, Palantir Technologies, and RTX.

Defense Armaments Military Geopolitical Spending

Gold

Manager holds both physical gold bullion and a leveraged gold exposure called 'Gresham's Wrath' that provides 1.5x gold exposure plus option income. Gold is viewed as superior commodity money due to its scarcity and durability, with central bank demand accelerating and fiat currencies losing value since 1971.

Gold Precious Metals Monetary Inflation Currency

Precious Metal Royalty/Streaming Companies

Manager maintains exposure to companies that provide upfront capital to mining companies in exchange for royalties or streams, avoiding operational mining risks while benefiting from price appreciation and production growth. These exposures materially outperformed for the year.

Royalties Streaming Mining Commodities Cash Flow

Capital Markets

Manager holds positions in exchanges like Nasdaq and Chicago Board of Options Exchange, viewing them as essential high-margin toll roads for the economy with immense operating leverage and natural inflation hedging through transaction-based revenue.

Exchanges Trading Technology Data Infrastructure

Japan

Manager exited unhedged Japan exposure due to currency headwinds from weakening Yen but added a new dynamically hedged Japan position that filters for companies treating shareholders well and adjusts currency hedge based on four separate models.

Japan Currency Hedging Governance Yen

Bitcoin

Despite long-term bullish views, manager completely exited Bitcoin position in mid-November using risk management framework similar to commodity trading funds. The exit was well-timed as Bitcoin continued falling while US Large Cap equities they rotated into increased in value.

Bitcoin Cryptocurrency Risk Management Volatility Digital Assets

2025 Q3

AI

AI concerns impacted several holdings including FactSet and Verisk, with investors fearing competitive threats to data moats. However, FactSet continues to benefit from AI through revenue enhancements and cost containments. Tesla's AI initiatives advance rapidly with robotaxi network expansion and Full Self-Driving development.

Artificial Intelligence Data Moats Automation Robotics Machine Learning

Electric Vehicles

Tesla showed renewed strength with core automotive business accelerating and expectations for further acceleration in 2025-2026 with new lower-cost models. The energy storage business continues growing and becoming a large contributor to earnings and margin growth.

EVs Battery Technology Autonomous Driving Energy Storage Charging Infrastructure

E-commerce

Shopify delivered strong results with 30% revenue growth and 29% GMV growth, benefiting from expansion into offline, international, and B2B channels. The company is advancing in agentic commerce with OpenAI partnership while maintaining less than 2% share of global commerce market.

Online Commerce Digital Payments Merchant Services Omnichannel SaaS

Travel

Travel-related holdings faced headwinds from economic sensitivity concerns. Choice Hotels saw slowing RevPAR growth but is expanding higher-margin fee income. Vail Resorts experienced concerns about visitation levels and season pass sales, prompting marketing strategy refinements.

Hotels Hospitality Tourism Leisure RevPAR

Buybacks

Strong balance sheets across portfolio companies provide opportunities for share buybacks during stock price dislocations. Insider buying activity increased in Tesla, Vail, Jefferies, and FactSet, providing confidence in investment theses and expected returns over time.

Share Repurchases Capital Allocation Insider Buying Shareholder Returns Stock Buybacks

2025 Q2

Electric Vehicles

Tesla continues to benefit from sequential acceleration in automotive segment and new lower-cost models expected in 2025. The company's energy storage business is growing and becoming a significant contributor to earnings and margins. Tesla should benefit from its eight-year, $10 billion investment in AI training for autonomous technology.

Tesla Autonomous Energy Storage AI Automotive

Streaming

Spotify continues to improve its platform by adding new products and making it more beneficial for consumers. The company has started instituting more regular price increases, accelerating revenue and margin growth. Management believes they can grow paying subscribers to a billion over the medium term from 250 million today.

Spotify Subscribers Pricing Power Digital Audio Music

Cloud

Guidewire's cloud transition is substantially complete and insurers are upgrading to the cloud at an accelerated rate. The company expects to shift R&D resources from infrastructure investment to product development, which should help drive cross-sales and potentially accelerate annual recurring revenue over time.

Guidewire Insurance Software SaaS Migration ARR

Travel

Travel-related holdings including Vail Resorts, Choice Hotels, and Hyatt Hotels faced headwinds from concerns about slowing visitation levels and potential tariff impacts on consumer spending. However, these companies maintain strong balance sheets and pricing power to navigate challenges.

Hotels Resorts RevPAR Visitation Consumer Spending

2025 Q1

AI

X.AI Holdings Corp. is developing an AI model to understand the true nature of the universe, launching Grok 3 which demonstrated top scores ahead of other industry-leading AI models. The company opened the Colossus data center with over 100,000 GPUs and recently acquired X (formerly Twitter) to access vast real-time multimodal data from 600 million users. Tesla's AI ambitions include a robotaxi service launching this year and a fast-growing humanoid program that could transform its growth story.

Artificial Intelligence Machine Learning Robotics Autonomous Vehicles Data Centers

Electric Vehicles

Tesla manufactures electric vehicles, solar products, and energy storage solutions alongside advanced real-world AI technologies. Despite declining analyst expectations for auto delivery volume and margins in 2025 due to Model Y refresh and regulatory challenges, the fund remains confident in Tesla's long-term growth underpinned by secular trends in EV adoption, compelling product line, leading cost structure, and cutting-edge technology.

EVs Battery Technology Charging Infrastructure Energy Storage Autonomous Driving

Streaming

Spotify Technology is a leading global digital music service offering on-demand audio streaming through paid premium subscriptions and ad-supported models. The company has been on a path to structurally increase gross margins aided by high-margin artist promotions marketplace, growing contribution from podcasts, and structural investments in advertising. Spotify is viewed as a long-term winner in music streaming with potential to reach 1 billion-plus monthly active users.

Music Streaming Digital Media Subscription Services Advertising Content

Travel

The fund holds positions in Las Vegas Sands, Hyatt Hotels, Vail Resorts, and Airbnb, representing exposure to gaming, hospitality, and vacation rental markets. These companies are experiencing uncertainty from potential recession concerns and tariff policies, but maintain strong balance sheets and pricing power. Hyatt expects double-digit EBITDA growth in 2025, while Vail continues to have significant pricing power and a captive high-end consumer base.

Hotels Casinos Vacation Rentals Tourism Hospitality

Real Estate

CoStar Group is a real estate data and marketing platform that increased 10.6% in the quarter due to acceleration in daily active users on its Homes.com platform. The company's monthly active users have reached 110 million compared to Zillow's 204 million, demonstrating meaningful traffic growth. Over the next five years, CoStar's residential investment could add at least $1 billion to annualized revenue at significantly accretive margins.

Real Estate Data Property Technology Commercial Real Estate Residential Real Estate Marketing Platforms

Software

The fund holds several software companies including Guidewire Software, which provides property and casualty insurance software and is substantially through its cloud transition. The company is shifting R&D resources from infrastructure investment to product development, which should help drive cross-sales and accelerate annual recurring revenue. Guidewire is expected to capture 30% to 50% of the $15-30 billion total addressable market in P&C insurance software.

Enterprise Software Cloud Computing SaaS Insurance Technology Recurring Revenue

2024 Q4

Electric Vehicles

Tesla continues to demonstrate strong performance with 54% quarterly gains, driven by core automotive acceleration and new lower-cost model releases expected in 2025. The company benefits from lower interest rates helping car sales and halting continuous price reductions, while energy storage business grew 60% sequentially.

Tesla Automotive Energy Storage Pricing Models

Streaming

Spotify increased 21.4% in the quarter, continuing to improve its platform with new products and demonstrating significant pricing power. The company has instituted regular price increases without increasing churn rates, with gross margins expected to improve from 26% to 30-35% over time.

Spotify Pricing Power Subscribers Margins Platform

Capital Markets

Interactive Brokers gained 26.9% with 30% year-over-year account growth and 45% margin loan growth, driven by strength in international markets. The company benefits from automation advantages and serves sophisticated investors across global markets with industry-leading margins over 70%.

Interactive Brokers Automation International Margins Growth

Space

SpaceX continues generating significant value through rapid Starlink broadband expansion with substantial new user growth and efficient hardware deployment. The company has established itself as a leading launch provider with reusable technology and is making progress on Starship, the largest most powerful rocket ever flown.

SpaceX Starlink Launch Reusable Starship

Hotels

Hotel investments including Hyatt Hotels and Choice Hotels contributed to outstanding performance, benefiting from strong recurring revenue with significant pricing power and high customer retention rates. These Real/Irreplaceable Assets businesses maintain meaningful brand equity and barriers to entry.

Hyatt Choice Hotels Pricing Power Brand Retention

Casinos

Red Rock Resorts faced challenges from market slowdown and cannibalization by its new Durango casino, though the new property is generating 20% returns on invested capital. Las Vegas population growth combined with inflationary pricing should drive high single-digit EBITDA growth.

Red Rock Durango Las Vegas EBITDA Returns

2024 Q3

Electric Vehicles

Tesla represents the fund's largest position at 9.8% of assets, with the stock contributing 274 bps to quarterly performance. The manager believes lower interest rates should help Tesla sell more cars and halt continuous price reductions, while the energy storage business continues to grow rapidly.

Tesla EV Energy Storage Autonomous AI

Cloud

Guidewire Software's cloud transition is substantially complete, with subscription gross margins improving by over 1,000 basis points. The company is shifting R&D resources from infrastructure to product development, which should drive cross-sales and accelerate annual recurring revenue growth.

SaaS Cloud Migration Insurance Software ARR Margins

Travel

The fund holds positions in Vail Resorts, Hyatt Hotels, and Airbnb, representing companies with strong pricing power and recurring revenue models. Despite near-term headwinds from normalization post-COVID, these businesses benefit from consumers' preference to spend on experiences over goods.

Hotels Experiences Pricing Power Recovery Leisure

Streaming

Spotify increased 17.4% in the quarter, driven by subscriber growth and significant pricing power. The company has instituted regular price increases without increasing churn rates, with management expecting gross margins to improve from 26% to 30-35% over time.

Music Subscriptions Pricing Power Margins Content

Capital Markets

Interactive Brokers gained 13.7% as the company continues gaining market share through automation and international expansion. The firm added over one million customers in 12 months, with industry-leading margins over 70% and significant cash for acquisitions and platform growth.

Brokerage Automation International Margins Growth

2024 Q2

Electric Vehicles

Tesla continues to drive manufacturing costs lower and invest heavily in AI initiatives. The company expects to launch a lower cost model as soon as late 2024, which should result in accelerated revenue growth and increased factory utilization. Tesla's energy storage business almost doubled in Q2 from Q1 levels.

Tesla Manufacturing AI Energy Storage Autonomous

Streaming

Spotify continues to improve its platform adding new products and making it more beneficial for consumers. The company has started to institute more regular price increases, which is accelerating revenue and margin growth. Spotify is beginning to exercise pricing power following last year's initial price increases that saw minimal churn.

Spotify Pricing Power Subscriptions Music Podcasts

Space

SpaceX is generating significant value with the rapid expansion of its Starlink broadband service, reporting substantial growth in active users. The company has established itself as a leading launch provider by offering highly reliable and cost-effective launches. SpaceX is making tremendous progress on Starship, the largest, most powerful rocket ever flown.

SpaceX Starlink Satellites Launch Starship

Travel

Vail Resorts faced challenges from poor snow conditions affecting season pass sales, but the company still expects to generate almost $950 million in season pass revenue. Hyatt Hotels continues to increase business transient and group bookings, which are now pacing 7% ahead of 2023 levels. Both companies benefit from consumers' desire to spend more on experiences over goods.

Vail Hyatt Season Pass Experiences Leisure

Rates

The Federal Reserve's restrictive policies over the past year were beginning to have their desired effect of slowing inflation and job growth. This cooling led investors to believe the Fed could start cutting interest rates as soon as fall 2024. Lower interest rates are expected to benefit disruptive growth investments and help Tesla sell more cars.

Fed Interest Rates Inflation Growth Valuations

2024 Q1

Electric Vehicles

Tesla remains a core holding despite 29% decline in Q1. The company continues to generate sufficient gross profit to support robust product development including the refreshed Model 3 and Y. Tesla should benefit from its eight-year $10 billion investment in AI training for autonomous technology.

Tesla Autonomous Cybertruck Manufacturing AI

Travel

Real/Irreplaceable Assets including hotels and casinos performed well, gaining 9.7% in the quarter. These businesses benefit from significant daily pricing power in an inflationary environment and consumers' continued preference for experiences over goods.

Hotels Casinos Pricing Power Experiences Inflation

Capital Markets

Financial businesses represented 18.2% of the Fund and benefited from higher interest rates. Interactive Brokers increased 34.8% as it continues taking market share through automation and international expansion, growing new accounts over 20% annually.

Brokers Automation International Margins Growth

Streaming

Spotify increased 40.4% in the quarter on operating margins and subscriber additions exceeding expectations. The company is prioritizing profitability while expanding its advertising segment and increasing podcast profitability.

Music Podcasts Advertising Profitability Subscribers

2023 Q4

Electric Vehicles

Tesla remains the Fund's largest position at 11.4% despite modest quarterly decline. The manager views Tesla as benefiting from AI investments through autonomous driving technology, Dojo training computer, and humanoid robotics. The Cybertruck launch and refreshed Model 3 are generating strong demand while improving unit economics.

Tesla Cybertruck Autonomous AI Manufacturing

Space

Space Exploration Technologies Corp. (SpaceX) is the second-largest position at 9.4%, contributing 241 bps to quarterly performance. The company achieved record 96 Falcon rocket launches in 2023, nearly doubling from 2022. Starlink operates over 5,500 satellites serving 2.3 million customers, more than doubling its customer base during the year.

SpaceX Starlink Satellites Rockets Starship

AI

The manager expects Tesla to benefit from artificial intelligence investments through development of autonomous driving technology, Dojo AI training computer, autobidder automated energy trading platform, and humanoid robotics. AI is viewed as a key driver for Tesla's future value creation beyond traditional automotive business.

Autonomous Dojo Robotics Machine Learning

Hotels

Hyatt Hotels Corporation appreciated 23.1% in the quarter, contributing 107 bps to performance. The company reported strong demand across its portfolio with robust leisure travel and improvement in business transient and group business now pacing above pre-COVID levels. Room rate increases are generating solid margins and cash flow.

Hyatt Leisure Business Travel Occupancy

Casinos

Red Rock Resorts increased 30.7% on the opening of its new Durango casino in early December. The company reported strong initial visitation and spend levels without cannibalization at other properties. Red Rock expects the casino to generate profits from day one and projects 20% annualized return on its $800 million investment by 2026.

Red Rock Durango Las Vegas Gaming

Rates

Investor expectations of Federal Reserve pivot from raising rates to lowering rates over the next year benefited leveraged, cyclical, and interest rate sensitive stocks significantly. The Fund has modest investments in such businesses. The manager believes their Financials businesses can continue to grow in a declining rate environment due to recurring revenue and strong pricing power.

Federal Reserve Interest Rates Monetary Policy

2023 Q3

Resilience

Portfolio companies continue to generate strong results despite macroeconomic concerns. Most businesses have yet to experience changes in customer demographics or spending levels and have been able to offset cost increases with higher prices without impacting demand.

Pricing Power Margins Cash Flow Stability Retention

Buybacks

Many portfolio companies are accelerating their return of capital to shareholders through increased buybacks and dividends. Management teams including CEOs, CFOs and Directors are personally buying their stocks, signaling confidence in business prospects.

Share Repurchase Capital Return Management Buying Excess Cash

Travel

The fund holds significant positions in travel-related companies including Hyatt Hotels, Vail Resorts, and Marriott Vacations. These businesses are benefiting from occupancies returning to pre-COVID levels and strong tour package bookings.

Hotels Resorts Occupancy Recovery Timeshare

SaaS

Software-as-a-Service companies like Guidewire and FactSet are showing strong subscription growth and margin expansion. These businesses have recurring revenue models with high client retention rates and pricing power.

Subscription Recurring Revenue Cloud Retention Margins

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Jan 30, 2026	Fund Letters	Ronald Baron	GWRE	Guidewire Software, Inc.	Information Technology	Software	Bull	New York Stock Exchange	ARR, cloud, Insurance, Margins, Software	Login
Jan 30, 2026	Fund Letters	Ronald Baron	SPOT	Spotify Technology S.A.	Communication Services	Interactive Media & Services	Bull	New York Stock Exchange	advertising, Engagement, Margins, Pricing, Streaming, Subscriptions	Login
Jan 30, 2026	Fund Letters	Ronald Baron	CSGP	CoStar Group, Inc.	Real Estate	Real Estate Services	Bull	NASDAQ	Data, Margins, Marketplaces, realestate, Reinvestment, Users	Login
Jan 30, 2026	Fund Letters	Ronald Baron	FIGS	FIGS, Inc.	Consumer Discretionary	Apparel Retail	Bull	New York Stock Exchange	Apparel, cashflow, healthcare, International, Margins, Replenishment	Login
Jan 30, 2026	Fund Letters	Ronald Baron	H	Hyatt Hotels Corporation	Consumer Discretionary	Hotels Resorts & Cruise Lines	Bull	New York Stock Exchange	AssetLight, buybacks, Lodging, Loyalty, RevPAR, valuation	Login
Jan 30, 2026	Fund Letters	Ronald Baron	DUOL	Duolingo, Inc.	Communication Services	Interactive Media & Services	Bear	NASDAQ	Bookings, Education, Engagement, monetization, valuation	Login
Jan 30, 2026	Fund Letters	Ronald Baron	ONON	On Holding AG	Consumer Discretionary	Footwear	Bull	New York Stock Exchange	Brand, Footwear, growth, innovation, Margins, Pricing	Login
Jun 30, 2024	Fund Letters	Baron Focused Growth Fund	IBKR	Interactive Brokers Group, Inc.	Financials	Capital Markets	Bull	NASDAQ	Automation, Electronic Brokerage, Fintech, global markets, high margins, international expansion, technology	Login
Jun 30, 2024	Fund Letters	Baron Focused Growth Fund	COST	CoStar Group, Inc.	Real Estate	Real Estate Services	Bull	NASDAQ	commercial real estate, Data Analytics, marketplace, Real Estate Software, Residential Real Estate, SaaS, technology	Login
Jun 30, 2024	Fund Letters	Baron Focused Growth Fund	SPOT	Spotify Technology S.A.	Communication Services	Interactive Media & Services	Bull	NYSE	Audio Content, Consumer Discretionary, Digital Music Streaming, Pricing power, SaaS, subscription model, technology	Login
Jun 30, 2024	Fund Letters	Baron Focused Growth Fund	GWW	Guidewire Software, Inc.	Information Technology	Software	Bull	NYSE	cloud transition, Enterprise software, Insurance-software, P&C insurance, recurring revenue, SaaS, technology	Login
Jun 30, 2024	Fund Letters	Baron Focused Growth Fund	TSLA	Tesla, Inc.	Consumer Discretionary	Automobiles	Bull	NASDAQ	Artificial Intelligence, autonomous driving, clean energy, Electric Vehicles, energy storage, robotics, technology	Login
Dec 31, 2023	Fund Letters	Baron Focused Growth Fund	BNTX	BioNTech SE	Health Care	Biotechnology	Bull	NASDAQ	biotechnology, cash position, drug development, Infectious Disease, mRNA, Oncology, pipeline, vaccine	Login
Dec 31, 2023	Fund Letters	Baron Focused Growth Fund	ACGL\|CHH\|FDS\|GWRE\|IBKR\|IDXX\|MTN\|SPOT\|TSLA	Tesla, Inc.	Consumer Discretionary	Automobiles	Bull	NASDAQ	Artificial Intelligence, automotive, autonomous driving, Cybertruck, Electric Vehicles, energy storage, manufacturing, robotics	Login
Dec 31, 2023	Fund Letters	Baron Focused Growth Fund	CHRS	Choice Hotels International, Inc.	Consumer Discretionary	Hotels, Restaurants & Leisure	Bull	NYSE	acquisition, asset-light, franchise, hospitality, Hotel Franchisor, loyalty program, Revenue Management, Travel	Login
Dec 31, 2023	Fund Letters	Baron Focused Growth Fund	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	IDEXX Laboratories, Inc.	Health Care	Health Care Equipment & Supplies	Bull	NASDAQ	Animal Health, diagnostics, innovation, market leader, Pet Care, recurring revenue, secular growth, Veterinary diagnostics	Login
Dec 31, 2023	Fund Letters	Baron Focused Growth Fund	ACGL\|APH\|COO\|CSGP\|DKNG\|GWRE\|IDXX\|IOT\|IT\|LPLA\|MSCI\|MTD\|PCOR\|ROP\|TECH\|VRSK	Guidewire Software, Inc.	Information Technology	Software	Bull	NYSE	Annual Recurring Revenue, cloud transition, Insurance-software, margin expansion, P&C insurance, SaaS, Software, sticky revenue	Login
Dec 31, 2023	Fund Letters	Baron Focused Growth Fund	ARGX BB\|DAVA\|DDOG\|GLOB\|ILMN\|LOAR\|MELI\|NET\|NU\|NVDA\|TSM	Illumina, Inc.	Health Care	Life Sciences Tools & Services	Bull	NASDAQ	diagnostics, DNA Sequencing, Genomics, high-margin, life sciences, Oncology Testing, Prenatal Testing, research	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Jan 30, 2026

Fund Letters

Ronald Baron

GWRE

Guidewire Software, Inc.

Information Technology

Software

Bull

New York Stock Exchange

ARR, cloud, Insurance, Margins, Software

Jan 30, 2026

Fund Letters

Ronald Baron

SPOT

Spotify Technology S.A.

Communication Services

Interactive Media & Services

Bull

New York Stock Exchange

advertising, Engagement, Margins, Pricing, Streaming, Subscriptions

Jan 30, 2026

Fund Letters

Ronald Baron

CSGP

CoStar Group, Inc.

Real Estate

Real Estate Services

Bull

NASDAQ

Data, Margins, Marketplaces, realestate, Reinvestment, Users

Jan 30, 2026

Fund Letters

Ronald Baron

FIGS

FIGS, Inc.

Consumer Discretionary

Apparel Retail

Bull

New York Stock Exchange

Apparel, cashflow, healthcare, International, Margins, Replenishment

Jan 30, 2026

Fund Letters

Ronald Baron

Hyatt Hotels Corporation

Consumer Discretionary

Hotels Resorts & Cruise Lines

Bull

New York Stock Exchange

AssetLight, buybacks, Lodging, Loyalty, RevPAR, valuation

Jan 30, 2026

Fund Letters

Ronald Baron

DUOL

Duolingo, Inc.

Communication Services

Interactive Media & Services

Bear

NASDAQ

Bookings, Education, Engagement, monetization, valuation

Jan 30, 2026

Fund Letters

Ronald Baron

ONON

On Holding AG

Consumer Discretionary

Footwear

Bull

New York Stock Exchange

Brand, Footwear, growth, innovation, Margins, Pricing

Jun 30, 2024

Fund Letters

Baron Focused Growth Fund

IBKR

Interactive Brokers Group, Inc.

Financials

Capital Markets

Bull

NASDAQ

Automation, Electronic Brokerage, Fintech, global markets, high margins, international expansion, technology

Jun 30, 2024

Fund Letters

Baron Focused Growth Fund

COST

CoStar Group, Inc.

Real Estate

Real Estate Services

Bull

NASDAQ

commercial real estate, Data Analytics, marketplace, Real Estate Software, Residential Real Estate, SaaS, technology

Jun 30, 2024

Fund Letters

Baron Focused Growth Fund

SPOT

Spotify Technology S.A.

Communication Services

Interactive Media & Services

Bull

NYSE

Audio Content, Consumer Discretionary, Digital Music Streaming, Pricing power, SaaS, subscription model, technology

Jun 30, 2024

Fund Letters

Baron Focused Growth Fund

GWW

Guidewire Software, Inc.

Information Technology

Software

Bull

NYSE

cloud transition, Enterprise software, Insurance-software, P&C insurance, recurring revenue, SaaS, technology

Jun 30, 2024

Fund Letters

Baron Focused Growth Fund

TSLA

Tesla, Inc.

Consumer Discretionary

Automobiles

Bull

NASDAQ

Artificial Intelligence, autonomous driving, clean energy, Electric Vehicles, energy storage, robotics, technology

Dec 31, 2023

Fund Letters

Baron Focused Growth Fund

BNTX

BioNTech SE

Health Care

Biotechnology

Bull

NASDAQ

biotechnology, cash position, drug development, Infectious Disease, mRNA, Oncology, pipeline, vaccine

Dec 31, 2023

Fund Letters

Baron Focused Growth Fund

Tesla, Inc.

Consumer Discretionary

Automobiles

Bull

NASDAQ

Artificial Intelligence, automotive, autonomous driving, Cybertruck, Electric Vehicles, energy storage, manufacturing, robotics

Dec 31, 2023

Fund Letters

Baron Focused Growth Fund

CHRS

Choice Hotels International, Inc.

Consumer Discretionary

Hotels, Restaurants & Leisure

Bull

NYSE

acquisition, asset-light, franchise, hospitality, Hotel Franchisor, loyalty program, Revenue Management, Travel

Dec 31, 2023

Fund Letters

Baron Focused Growth Fund

IDEXX Laboratories, Inc.

Health Care

Health Care Equipment & Supplies

Bull

NASDAQ

Animal Health, diagnostics, innovation, market leader, Pet Care, recurring revenue, secular growth, Veterinary diagnostics

Dec 31, 2023

Fund Letters

Baron Focused Growth Fund

Guidewire Software, Inc.

Information Technology

Software

Bull

NYSE

Annual Recurring Revenue, cloud transition, Insurance-software, margin expansion, P&C insurance, SaaS, Software, sticky revenue

Dec 31, 2023

Fund Letters

Baron Focused Growth Fund

Illumina, Inc.

Health Care

Life Sciences Tools & Services

Bull

NASDAQ

diagnostics, DNA Sequencing, Genomics, high-margin, life sciences, Oncology Testing, Prenatal Testing, research

TICKER	COMMENTARY
TSLA	Tesla, Inc. designs, manufactures, and sells fully electric vehicles (EVs), solar products, and energy storage solutions, while developing advanced real-world AI technologies. Following robust gains in late 2025, shares fell as investors awaited progress on robotaxis and assessed the company's sizable investments in manufacturing and AI. Operationally, Tesla delivered strong quarterly results amid a challenging EV environment. Automotive gross margins improved sequentially and beat expectations, the energy storage business maintained robust momentum with best-in-class margins, and battery cell production ramped. The company continues to advance its AI and autonomous driving initiatives at a rapid pace. Management anticipates meaningful robotaxi expansion in 2026 and continues to finalize the Optimus Gen 3 design and build out large-scale manufacturing capacity for humanoid robots.
SPOT	Global digital music streaming platform Spotify declined by 16.6% in the first quarter and detracted 72 bps from performance as investors were concerned about the impact AI music could have on the conversion of free subscribers to paying subscribers as well as how it could impact time on the platform. In addition, further concerns about the timing of price increases and resulting margin expansion also frustrated investors. However, the company continues to institute price increases across multiple regions and complete negotiations with major record labels. User growth remains strong, growing at a double-digit rate with high engagement and low churn even with price increases. The company remains on a path to increase gross margins through its high-margin artist promotions marketplace, growing podcast contribution, and ongoing investments in advertising where revenue growth is expected to accelerate this year. We continue to view Spotify as a long-term winner in music streaming with potential to reach 1 billion-plus subscribers by 2030.
GWRE	Property and casualty (P&C) insurance software vendor Guidewire declined 25.7% in the first quarter and detracted 88 bps from performance. However, the company continues to do quite well - after a multi-year transition period, the company's cloud transition is substantially complete, and insurers are upgrading to the cloud at an accelerated rate. We believe that cloud will be the sole path forward, with annual recurring revenue (ARR) benefiting from new customer wins and migrations of the existing customer base to the company's Insurance Suite Cloud. We also expect the company to shift R&D resources to product development from infrastructure investment, which should help drive cross-sales into its sticky installed base and potentially accelerate ARR over time. We are encouraged by Guidewire's subscription gross margin expansion, which improved by approximately 580 bps in its most recently reported quarter. We believe Guidewire will be the critical software vendor for the global P&C insurance industry, capturing 30% to 50% of its $15 billion to $30 billion total addressable market and generating margins above 40%.
H	Shares of global hotelier Hyatt declined 10.3% and hurt performance by 37 bps in the first quarter as investors were concerned with a potential deceleration in revenue per available room (RevPAR) growth due to the Middle East conflict as well as cartel uprisings in Mexico that could hurt travel to those parts of the world. However, according to Hyatt management, the Middle East is only 3% of total fees and Mexico while it is approximately 7% of global rooms, they are seeing travelers switch and rebook for other places. While they are seeing declines in Mexico bookings, this is being offset by an increase in bookings for its Caribbean properties. There has been no impact on unit growth, and the company still expects to grow units between 6% and 7% this year. We believe this growth combined with low single-digit RevPAR growth and slight margin improvement should lead to double-digit EBITDA growth this year.
RRR	Shares of Las Vegas Locals casino operator, Red Rock Resorts, declined 12.0% in the first quarter and hurt performance by 40 bps as investors were concerned with a potential slowdown in Las Vegas gaming revenue brought about by the macro uncertainty from the war in Iran. Combine this slowdown with construction disruption due to many renovation and expansion projects occurring at its properties and current earnings could decelerate. However, the company continues to invest in its resorts as management sees further opportunities for growth from continued population growth and a higher net worth individual coming to Las Vegas. The company continues to generate strong cash flow that should produce accelerated growth in the coming years. We continue to believe the stock remains attractively valued as the company's founders recently bought stock at current levels, giving us further confidence in the company's accelerated growth prospects.
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 AI fears. The market has come to view AI as an existential risk for a growing number of industries—including software, business services, information services, and video games—despite no evidence of any fundamental impact to these sectors. This 'shoot first and ask questions later' dynamic has resulted in meaningful share price declines. We continue to own CoStar given its differentiated data assets and significant growth opportunities in providing enhanced real estate information, analytics, and marketplace offerings. CoStar boasts an enviable business model with high levels of recurring revenue and meaningful cash flow generation potential.
ONON	Premium footwear and apparel brand On Holding AG detracted from performance as shares came under pressure from foreign-exchange headwinds and heightened uncertainty surrounding management changes. The recent devaluation of the U.S. dollar is expected to slow reported results, even as management reiterated its outlook for 2026 foreign-exchange-neutral revenue growth of 23%. Leadership turnover also weighed on sentiment, with cofounders David Allemann and Caspar Coppetti returning to serve as co-chief executive officers while Martin Hoffmann steps down. Despite these near-term pressures, the company continued to deliver strong fundamental results. In the fourth quarter of 2025, On generated constant-currency revenue growth of more than 30% as it continued to capture additional market share through its premium, differentiated product lineup, which is expanding beyond footwear into accessories and apparel.
FIGS	FIGS, Inc. designs and sells scrubwear for health care professionals through a digitally native, direct-to-consumer strategy. Shares rose following robust fourth-quarter results and upbeat 2026 guidance. Revenue expanded 33% to $201.9 million, reflecting broad-based momentum across categories and geographies and exceeding expectations. Holiday demand was strong throughout the season and remained elevated through quarter-end. U.S. revenue rose 28.7% to $164.2 million, while international revenue accelerated 55% to $37.7 million, with scrubs and non-scrubwear contributing gains of 35% and 26%, respectively. This topline strength translated to profitability, with EBITDA rising 29.8% to $26.7 million. Building on this momentum, revenue is expected to grow in the low-20% range in the first quarter and 10% to 12% for the full year.
CHH	Global hotel franchisor Choice Hotels International, Inc. contributed to performance during the quarter as the company saw a slight acceleration in revenue per available room across its portfolio. Choice continues to grow units at a low-single-digit rate and is benefiting from higher royalty rates on new franchise contracts, driving mid-single-digit growth in earnings and free cash flow. The company is using this cashflow to return capital through share repurchases. We continue to believe the stock offers compelling value, trading at a roughly five multiple-point discount to its historical average. Choice maintains a strong balance sheet, providing flexibility for additional share buybacks, particularly when the stock trades below the company's view of intrinsic value.

TICKER

COMMENTARY

TSLA

Tesla, Inc. designs, manufactures, and sells fully electric vehicles (EVs), solar products, and energy storage solutions, while developing advanced real-world AI technologies. Following robust gains in late 2025, shares fell as investors awaited progress on robotaxis and assessed the company's sizable investments in manufacturing and AI. Operationally, Tesla delivered strong quarterly results amid a challenging EV environment. Automotive gross margins improved sequentially and beat expectations, the energy storage business maintained robust momentum with best-in-class margins, and battery cell production ramped. The company continues to advance its AI and autonomous driving initiatives at a rapid pace. Management anticipates meaningful robotaxi expansion in 2026 and continues to finalize the Optimus Gen 3 design and build out large-scale manufacturing capacity for humanoid robots.

SPOT

Global digital music streaming platform Spotify declined by 16.6% in the first quarter and detracted 72 bps from performance as investors were concerned about the impact AI music could have on the conversion of free subscribers to paying subscribers as well as how it could impact time on the platform. In addition, further concerns about the timing of price increases and resulting margin expansion also frustrated investors. However, the company continues to institute price increases across multiple regions and complete negotiations with major record labels. User growth remains strong, growing at a double-digit rate with high engagement and low churn even with price increases. The company remains on a path to increase gross margins through its high-margin artist promotions marketplace, growing podcast contribution, and ongoing investments in advertising where revenue growth is expected to accelerate this year. We continue to view Spotify as a long-term winner in music streaming with potential to reach 1 billion-plus subscribers by 2030.

GWRE

Property and casualty (P&C) insurance software vendor Guidewire declined 25.7% in the first quarter and detracted 88 bps from performance. However, the company continues to do quite well - after a multi-year transition period, the company's cloud transition is substantially complete, and insurers are upgrading to the cloud at an accelerated rate. We believe that cloud will be the sole path forward, with annual recurring revenue (ARR) benefiting from new customer wins and migrations of the existing customer base to the company's Insurance Suite Cloud. We also expect the company to shift R&D resources to product development from infrastructure investment, which should help drive cross-sales into its sticky installed base and potentially accelerate ARR over time. We are encouraged by Guidewire's subscription gross margin expansion, which improved by approximately 580 bps in its most recently reported quarter. We believe Guidewire will be the critical software vendor for the global P&C insurance industry, capturing 30% to 50% of its $15 billion to $30 billion total addressable market and generating margins above 40%.

Shares of global hotelier Hyatt declined 10.3% and hurt performance by 37 bps in the first quarter as investors were concerned with a potential deceleration in revenue per available room (RevPAR) growth due to the Middle East conflict as well as cartel uprisings in Mexico that could hurt travel to those parts of the world. However, according to Hyatt management, the Middle East is only 3% of total fees and Mexico while it is approximately 7% of global rooms, they are seeing travelers switch and rebook for other places. While they are seeing declines in Mexico bookings, this is being offset by an increase in bookings for its Caribbean properties. There has been no impact on unit growth, and the company still expects to grow units between 6% and 7% this year. We believe this growth combined with low single-digit RevPAR growth and slight margin improvement should lead to double-digit EBITDA growth this year.

RRR

Shares of Las Vegas Locals casino operator, Red Rock Resorts, declined 12.0% in the first quarter and hurt performance by 40 bps as investors were concerned with a potential slowdown in Las Vegas gaming revenue brought about by the macro uncertainty from the war in Iran. Combine this slowdown with construction disruption due to many renovation and expansion projects occurring at its properties and current earnings could decelerate. However, the company continues to invest in its resorts as management sees further opportunities for growth from continued population growth and a higher net worth individual coming to Las Vegas. The company continues to generate strong cash flow that should produce accelerated growth in the coming years. We continue to believe the stock remains attractively valued as the company's founders recently bought stock at current levels, giving us further confidence in the company's accelerated growth prospects.

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 AI fears. The market has come to view AI as an existential risk for a growing number of industries—including software, business services, information services, and video games—despite no evidence of any fundamental impact to these sectors. This 'shoot first and ask questions later' dynamic has resulted in meaningful share price declines. We continue to own CoStar given its differentiated data assets and significant growth opportunities in providing enhanced real estate information, analytics, and marketplace offerings. CoStar boasts an enviable business model with high levels of recurring revenue and meaningful cash flow generation potential.

ONON

Premium footwear and apparel brand On Holding AG detracted from performance as shares came under pressure from foreign-exchange headwinds and heightened uncertainty surrounding management changes. The recent devaluation of the U.S. dollar is expected to slow reported results, even as management reiterated its outlook for 2026 foreign-exchange-neutral revenue growth of 23%. Leadership turnover also weighed on sentiment, with cofounders David Allemann and Caspar Coppetti returning to serve as co-chief executive officers while Martin Hoffmann steps down. Despite these near-term pressures, the company continued to deliver strong fundamental results. In the fourth quarter of 2025, On generated constant-currency revenue growth of more than 30% as it continued to capture additional market share through its premium, differentiated product lineup, which is expanding beyond footwear into accessories and apparel.

FIGS

FIGS, Inc. designs and sells scrubwear for health care professionals through a digitally native, direct-to-consumer strategy. Shares rose following robust fourth-quarter results and upbeat 2026 guidance. Revenue expanded 33% to $201.9 million, reflecting broad-based momentum across categories and geographies and exceeding expectations. Holiday demand was strong throughout the season and remained elevated through quarter-end. U.S. revenue rose 28.7% to $164.2 million, while international revenue accelerated 55% to $37.7 million, with scrubs and non-scrubwear contributing gains of 35% and 26%, respectively. This topline strength translated to profitability, with EBITDA rising 29.8% to $26.7 million. Building on this momentum, revenue is expected to grow in the low-20% range in the first quarter and 10% to 12% for the full year.

CHH

Global hotel franchisor Choice Hotels International, Inc. contributed to performance during the quarter as the company saw a slight acceleration in revenue per available room across its portfolio. Choice continues to grow units at a low-single-digit rate and is benefiting from higher royalty rates on new franchise contracts, driving mid-single-digit growth in earnings and free cash flow. The company is using this cashflow to return capital through share repurchases. We continue to believe the stock offers compelling value, trading at a roughly five multiple-point discount to its historical average. Choice maintains a strong balance sheet, providing flexibility for additional share buybacks, particularly when the stock trades below the company's view of intrinsic value.

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Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 31st March 2026

Investor Letters

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AI

Space

Electric Vehicles

Travel

Buybacks

Defense Spending

Gold

Precious Metal Royalty/Streaming Companies

Capital Markets

Japan

Bitcoin

AI

Electric Vehicles

E-commerce

Travel

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Electric Vehicles

Streaming

Cloud

Travel

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Streaming

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Software

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Streaming

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Hotels

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Cloud

Travel

Streaming

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Streaming

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Travel

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Streaming

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Space

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Travel

SaaS

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