| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.91% | -12.11% | -12.11% |
Baron Growth Fund declined 12.06% in Q1 2026, underperforming the Russell 2000 Growth Index's -2.81% return due to AI-driven market fears. Despite strong fundamentals across portfolio companies, broad sell-offs impacted software, information services, and business services sectors. Guidewire Software exemplified this disconnect, reporting 22% annual recurring revenue growth and strong results but declining 25.6% on AI concerns. The managers view AI as a net positive for their holdings, particularly Guidewire's insurance platform which will benefit from AI integration rather than displacement. Portfolio companies like FIGS and Choice Hotels showed resilience with strong operational performance. The fund's concentrated approach focuses on 17 investments with a weighted average holding period of 18.6 years. Management believes the portfolio is extremely attractively valued, trading as if companies will cease to exist within 5-10 years despite consistent earnings growth. They expect multiple expansion as AI sentiment improves, positioning for enhanced future returns.
Baron Growth Fund invests in high-quality small-cap businesses with sustainable competitive advantages and long-term growth prospects, holding positions for extended periods to benefit from compounding returns while avoiding losses during market downturns.
Manager is optimistic that as sentiment on AI-impacted stocks improves, the portfolio will benefit from multiple expansion that will enhance go-forward returns. Believes the portfolio is extremely attractively valued given consistent earnings growth versus recent performance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| May 1 2026 | 2026 Q1 | ACGL, CHH, CSGP, FIGS, GWRE, IT, KNSL | AI, growth, insurance, small cap, software, technology, valuation | - | Baron Growth Fund fell 12.06% in Q1 2026 as AI fears drove indiscriminate selling across software and business services holdings despite strong fundamentals. Management views the portfolio as extremely oversold and attractively valued, expecting multiple expansion as sentiment improves on AI-impacted stocks. |
| Mar 1 2026 | 2025 Q4 | ACGL, CHH, CNS, CSGP, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IT, KNSL, MC, MORN, MSCI, MTD, MTN, NEOG, PRI, RRR, TECH | AI, financials, growth, Quality, small caps, underperformance, valuation | - | Baron Growth Fund's quality-focused small-cap strategy faced headwinds in 2025, declining 14.18% as AI concerns weighed on 42% of the portfolio despite strong fundamentals. The fund's concentrated approach to high-quality businesses with competitive advantages remains positioned for recovery as valuation compression of 26% versus 12% earnings growth suggests significant upside potential when market sentiment shifts. |
| Nov 18 2025 | 2025 Q3 | ARCH, CG, CHH, CNS, CSGP, CWAN, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, MC, MORN, MSCI, MTD, MTN, NEOG, PRI, RRR, TECH | AI, Buybacks, financials, growth, Quality, small cap, technology, underperformance | - | Baron Growth Fund's high-quality small-cap strategy faced its worst period since 1975 as investors rotated to riskier stocks, resulting in 8.69% quarterly decline versus 12.19% benchmark gain. Despite underperformance, portfolio fundamentals strengthened with superior margins and cash flows. Manager expects aggressive share buybacks and remains confident in long-term strategy given historical precedent of subsequent outperformance. |
| Aug 18 2025 | 2025 Q2 | ACGL, ANSYS, BFAM, CG, CHH, CNS, CSGP, CWAN, DNUT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, MC, MORN, MSCI, MTD, MTN, NEOG, PRI, RRR, TECH | Casinos, growth, insurance, Long Term, Quality, small cap, Veterinary | - | Baron Growth Fund's high-conviction small-cap strategy underperformed in Q2 as investors chased riskier stocks, but the portfolio now exhibits superior financial metrics with 28.5% operating margins. Strong performance from IDEXX and Guidewire demonstrates the power of long-term holdings in competitively advantaged businesses. Managers plan to add new positions, viewing recent small-cap underperformance as creating abundant opportunities. |
| Mar 31 2025 | 2025 Q1 | ACGL, ALTR, ANSYS, ARE, BFAM, CG, CHH, CNS, CSGP, CWAN, DEI, DNUT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, MC, MORN, MSCI, MTD, MTN, NEOG, PRI, RRR, TECH, TREX | growth, insurance, Quality, real estate, small caps, software | - | Baron Growth Fund outperformed in Q1 2025 despite a 4.25% decline, beating the Russell 2000 Growth by 690 basis points. Strong stock selection in quality businesses drove results, led by specialty insurers and software companies. The portfolio has improved profitability metrics while maintaining growth prospects. Management expects continued outperformance through their long-term, quality-focused investment approach. |
| Dec 31 2024 | 2024 Q4 | ACGL, ALTR, ANSYS, ARE, BFAM, CG, CHH, CNS, CSGP, CWAN, DEI, DNUT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, MC, MORN, MSCI, MTD, MTN, NEOG, PRI, RRR, TECH, TREX | Compounding, growth, Long Term, Quality, small cap, underperformance |
IDXX CSGP MTN |
Baron Growth Fund's 2024 underperformance reflects its disciplined focus on quality growth businesses during a year favoring speculative, lower-quality investments. Temporary headwinds at key holdings like IDEXX and CoStar, plus benchmark distortion from AI-driven stocks, weighed on results. The fund maintains its long-term approach, expecting quality fundamentals to drive superior compounding returns as market preferences normalize. |
| Sep 30 2024 | 2024 Q3 | ACGL, ALTR, ANSYS, ARE, BFAM, CG, CHH, CLRO, CNS, CSGP, DEI, DNUT, ESNT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, MC, MORN, MSCI, MTD, MTN, NEOG, PRI, RRR, SMCI, TECH, TREX, WST | financials, growth, long-term, Outperformance, Quality, small caps, technology | - | Baron Growth Fund gained 11.15% in Q3, outperforming its benchmark as quality small-cap holdings rebounded from earlier declines. The fund maintains a concentrated portfolio of 33 high-quality businesses with sustainable competitive advantages, held for an average of 17.2 years. Strong fundamental growth across holdings positions the fund for continued long-term outperformance despite short-term market volatility. |
| Jul 27 2024 | 2024 Q2 | ACGL, ALTR, ANSYS, ARE, BFAM, BYD, CG, CHH, CNS, CSGP, CWAN, DEI, DNUT, ESNT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, MC, MORN, MSCI, MT, MTN, NEOG, PRI, RRR, TECH, TREX, WST | growth, insurance, Long Term, real estate, small cap, software | - | Baron Growth Fund fell 8.23% in Q2 2024, underperforming due to declines in four major positions including Kinsale Capital and CoStar Group. The managers view these as short-term setbacks rather than structural issues. The fund's long-term approach continues with a 16.9-year average holding period and confidence in delivering superior returns through compounding growth in competitively advantaged small-cap businesses. |
| Apr 15 2024 | 2024 Q1 | ACGL, ALTR, ANSYS, ARE, BFAM, BYD, CG, CHH, CNS, CSGP, CWAN, DEI, DNUT, ESNT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, LFUS, MC, MORN, MSCI, MSTR, MTD, MTN, NEOG, PENN, PRI, RRR, SMCI, TECH, TREX, VAC, WST | financials, growth, insurance, Long Term, real estate, small caps | - | Baron Growth Fund's disciplined long-term approach delivered 5.52% returns in Q1 2024, with strong performance from specialty insurers and real estate holdings offsetting benchmark underperformance from avoiding speculative AI and crypto plays. The fund maintains conviction in its process of investing in competitively advantaged businesses with sustainable growth prospects. |
| Feb 20 2024 | 2023 Q4 | ACGL, ALTR, ANSYS, ARE, BFAM, BYD, CG, CHH, CNS, CSGP, CWAN, DEI, ESNT, FDS, FIGS, GLPI, GWRE, HLI, IDXX, IRDM, IT, KNSL, LFUS, MC, MORN, MSCI, MTD, MTN, NEOG, PENN, PRI, RRR, TECH, TREX, VAC, WST | growth, insurance, Long Term, Quality, real estate, small cap, technology, Travel | - | Baron Growth Fund's high-quality growth strategy underperformed in Q4 as Fed dovishness favored speculative stocks. Despite near-term headwinds from market rotation affecting specialty insurers and hospitality holdings, the fund maintains conviction in its long-term approach. Key opportunities include CoStar's residential expansion, AI tailwinds for Gartner, and durable hard market conditions benefiting P&C insurers. |
| Sep 30 2023 | 2023 Q3 | ACGL, ALTR, ANSYS, BFAM, BIO, CHH, CSGP, DNUT, FDS, FIGS, IDXX, IRDM, IT, KNSL, LFUS, MORN, MSCI, MTD, MTN, NEOG, TREX, VLD, WEST | financials, growth, Long Term, small cap, technology | - | Baron Growth Fund outperformed its small-cap growth benchmark by 366 basis points in Q3 2023 despite a 3.66% decline. The fund maintains its disciplined approach of holding competitively advantaged small-cap companies for the long term, with artificial intelligence emerging as a key investment theme. Strong stock selection and defensive positioning during market volatility continue to drive superior returns. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI concerns drove broad market sell-offs across multiple industries despite lack of fundamental impact evidence. Manager views AI as creating opportunities rather than threats for portfolio companies like Guidewire, which will benefit from AI integration with core insurance systems. |
Artificial Intelligence Disruption Software Automation Technology |
SoftwareSoftware companies experienced significant multiple compression due to AI fears despite strong fundamentals. Manager believes software holdings are extremely oversold and trading at valuations implying business extinction within 5-10 years. |
SaaS Enterprise Software Valuation Growth Technology | |
InsuranceInsurance companies like Arch Capital and Kinsale showed resilience during market volatility. Property and casualty insurers are less exposed to AI concerns and continue generating strong earnings growth and book value expansion. |
P&C Insurance Specialty Insurance Underwriting Premiums Capital | |
| 2025 Q4 |
AIManager attributes 60% of underperformance to market's assessment of AI risk differing from their own. Several portfolio companies deemed AI losers declined 15% despite 10% revenue growth. Manager remains optimistic about AI-impacted investments developing similarly to Clearwater's private equity buyout. |
Artificial Intelligence Disruption Valuation Software Analytics |
QualityFund exclusively invests in high-quality businesses with superior characteristics, which was out of favor in 2025 as investors sold higher-quality investments to buy riskier stocks. Manager believes this strategy has been the primary driver of long-term outperformance and expects quality to come back into favor. |
Earnings Quality Competitive Advantages Margins Returns | |
Small CapsStrategy of owning competitively advantaged small and medium-sized businesses remained out of favor for most of the quarter. Fund observed improvement in early December as investors showed renewed enthusiasm for high-quality small-cap stocks. |
Small Cap Growth Russell 2000 Valuation Outperformance | |
FinancialsFinancials represent 62.1% of net assets with mixed performance. Arch Capital and FactSet contributed positively while Kinsale Capital and Choice Hotels detracted. Specialty insurers showed strong earnings but faced cyclical headwinds. |
Insurance Specialty Finance Capital Markets Banking | |
| 2025 Q3 |
QualityThe fund exclusively invests in high-quality stocks as defined by MSCI Barra, focusing on competitively advantaged businesses with exceptional management teams. The manager notes this has been the worst six-month period for high-quality stocks since 1975, as investors have rotated to more volatile, riskier stocks. The portfolio's operating margin has improved to 27.6%, which is 640bps above historical average and 1,880bps above benchmark. |
Quality MSCI Margins Profitability Competitive Advantage |
Small CapsThe fund focuses on smaller and medium-sized growth businesses, with all top 10 holdings being small-cap businesses at time of purchase that have grown through stock appreciation. The strategy has historically outperformed in normal markets and declining markets but faces challenges in strong up markets driven by more volatile stocks. The fund targets the same attractive growth profile while maintaining superior business characteristics. |
Small Cap Growth Russell 2000 Outperformance Volatility | |
AIThe manager attributes approximately 20% of underperformance to positions where the market's assessment of AI risk differed from their own. Specifically discusses Gartner's AI exposure, noting the company benefits from proprietary data and that AI is presently a tailwind as companies seek insights about AI risks and opportunities. The manager sees no evidence that AI is negatively impacting Gartner's value proposition. |
AI Technology Risk Assessment Gartner Data | |
BuybacksThe manager expects companies to be aggressive in repurchasing stock to capitalize on discounted valuations. Gartner repurchased approximately $800 million in July and August and added an additional $1 billion to its share repurchase authorization. The manager estimates Gartner could potentially repurchase nearly 20% of its market cap over the next 18 months given its cash position and debt capacity. |
Share Repurchase Capital Allocation Valuation Cash Market Cap | |
| 2025 Q2 |
QualityThe fund focuses on owning competitively advantaged businesses with superior financial attributes including higher margins, cash flow, and returns on capital. The portfolio generates 28.5% operating margins and 30.7% free cash flow margins, significantly above historical averages and benchmarks. |
Margins Cash Flow ROIC Competitive Advantages Differentiation |
Small CapsThe fund invests in small-cap growth companies, with plans to add more smaller growth companies to the portfolio in coming quarters. The superior financial attributes and growth of small-cap businesses have driven the fund's long-term outperformance. |
Small Cap Growth Outperformance Portfolio Expansion | |
VeterinaryIDEXX Laboratories represents a significant holding as the global leader in veterinary diagnostics. The company benefits from secular trends around pet ownership, diagnostic frequency, and the human-animal bond, with compelling new product cycles driving future growth. |
Pet Care Diagnostics Innovation Demographics | |
InsuranceThe fund holds multiple insurance-related positions including Guidewire Software serving the P&C insurance industry, Arch Capital Group as a specialty insurer, and Kinsale Capital Group. These companies benefit from industry digitization and favorable underwriting conditions. |
P&C Insurance Software Underwriting Digitization | |
CasinosRed Rock Resorts focuses on the Las Vegas locals market and is currently renovating core assets. The company is expected to benefit from market recovery following successful absorption of new properties and return of customers to existing casino resorts. |
Las Vegas Locals Market Renovation Recovery | |
| 2025 Q1 |
InsuranceThe fund holds multiple specialty insurers including Kinsale Capital Group and Arch Capital Group. Kinsale continues gaining market share in the excess and surplus market with industry-leading margins and robust returns on equity. The E&S insurance market conditions remain favorable with continued double-digit growth due to share gains from the standard market. |
P&C Insurance Specialty Finance Reinsurance Insurance Brokers |
Real EstateCoStar Group is building its Homes.com residential marketplace after investing almost $1 billion in 2024. The company is pursuing a total addressable market exceeding $15 billion in the U.S. Management has struck a better balance between residential and non-residential sales forces, with recovery observed in gross sales. |
Commercial Real Estate Real Estate Services Property Management | |
SoftwareGuidewire Software leads in core systems software for the P&C insurance industry, having invested almost $2 billion over five years to develop its cloud offering. The company has created a sustainably differentiated platform with best-in-class capabilities and a robust ecosystem of partners. Insurers are accelerating their transition to cloud-delivered core systems. |
Enterprise Software SaaS Cloud Vertical Software | |
QualityThe portfolio has become more concentrated in higher-quality businesses with improved profitability metrics. Operating margin has improved to 28.5%, free cash flow margin expanded to 32.3%, and return on invested capital risen to 18.1%. The fund exclusively invests in businesses with sustainable competitive advantages and superior management teams. |
Earnings Growth Value | |
| 2024 Q4 |
QualityFund focuses exclusively on high-quality durable growth assets with sustainable competitive advantages, sticky customer bases, and differentiated products. Manager emphasizes these businesses were out of favor during 2024 as investors preferred lower-quality, more volatile investments. The strategy prioritizes long-term compounding over short-term trends. |
Competitive Advantages Durable Growth Compounding Differentiated Sticky |
AIManager notes the market's blind frenzy for AI-related investments, specifically citing Super Micro Computer's exceptional performance driven by AI speculation. Gartner is positioned to benefit as companies evaluate AI opportunities and risks. The fund avoided speculative AI plays while maintaining exposure to quality businesses that could benefit from AI adoption. |
Artificial Intelligence Speculation Decision Support Technology | |
Real EstateCoStar Group is building its Homes.com residential marketplace with a $15 billion addressable market, investing heavily in this transformative opportunity. The fund also holds various real estate-related positions including REITs and property-focused companies. Regulatory developments could reshape the residential purchase process to benefit consumers and CoStar. |
Residential Marketplace Regulatory TAM | |
| 2024 Q3 |
QualityThe fund focuses on businesses with high barriers to entry, sustainable competitive advantages, recurring revenue, attractive margins, and strong cash generation. Management emphasizes investing in competitively advantaged companies with exceptional management teams that consistently reinvest to raise barriers to entry. |
Competitive Advantages Barriers to Entry Cash Generation Recurring Revenue Management Quality |
GrowthThe fund seeks companies with large and growing addressable markets, durable secular tailwinds, and long-term growth prospects. Portfolio companies demonstrate robust fundamental growth with the belief that stock prices follow earnings growth over time. |
Secular Tailwinds Addressable Markets Earnings Growth Long-term Growth Fundamental Growth | |
Small CapsThe fund invests in small-cap businesses that have grown into larger positions through stock appreciation. All top 10 holdings were small-cap businesses at time of purchase and have become significant positions through performance, with the fund maintaining focus on smaller company opportunities. |
Small-cap Growth Stock Appreciation Position Building Market Cap Expansion Small Company Focus | |
| 2024 Q2 |
InsuranceThe fund holds multiple specialty insurance positions including Kinsale Capital Group and Arch Capital Group. Kinsale operates in the excess and surplus market with continued share gains despite slower premium growth. Arch Capital reported strong operating ROE of 21% and book value growth of 40%. |
P&C Insurance Specialty Insurance Underwriting Premium Growth Book Value |
SoftwareSoftware holdings include CoStar Group's real estate platform and Guidewire's insurance core systems. CoStar is monetizing its residential offering with $39 million in net new sales. Guidewire completed its cloud transition with SaaS revenue approaching $500 million and win rates exceeding 80%. |
SaaS Cloud Transition Real Estate Software Insurance Software Recurring Revenue | |
Real EstateReal estate exposure through CoStar Group's data and marketing services platform. The residential real estate market represents over $40 trillion in value with CoStar's residential products serving a total addressable market exceeding $15 billion of annual recurring revenue. |
Real Estate Data Residential Commercial Real Estate Lead Generation Market Data | |
| 2024 Q1 |
InsuranceSpecialty insurers Kinsale Capital and Arch Capital both contributed significantly to performance with strong financial results. Market conditions remain favorable with rising premium rates and more business shifting to the excess and surplus lines market where Kinsale operates. |
P&C Insurance Specialty Finance Underwriting |
Real EstateThe NAR settlement will resolve claims challenging commission policies, requiring listing agents to no longer offer buyer agent commission splits directly on MLS and mandating written contracts before home tours. These changes are expected to be positive for CoStar's Homes.com platform. |
Commercial Real Estate Real Estate Services Property Management | |
Financial ServicesThe fund holds significant positions in financial services companies including asset managers, investment banks, and specialty finance firms. Performance was strong across the financials category with 13.18% returns contributing 5.78% to overall fund performance. |
Asset Managers Investment Banks Capital Markets | |
| 2023 Q4 |
InsuranceThe fund holds significant positions in specialty insurers Kinsale Capital Group and Arch Capital Group. Both companies operate in the hard market for property and casualty insurance, with Kinsale showing 33% growth in gross written premiums and Arch demonstrating strong fundamentals with 23% growth in net premiums written. |
P&C Insurance Specialty Hard Market Premiums ROE |
Real EstateThe portfolio includes exposure to real estate through CoStar Group's expansion into residential markets and various hospitality investments. CoStar is investing aggressively to disrupt the residential real estate advertising market, which represents a $40 trillion asset class in the US. |
Commercial Real Estate Residential Hospitality REITs Property | |
TravelThe fund maintains positions in travel-related companies including Vail Resorts, Choice Hotels, and other hospitality assets. These investments benefit from subscription revenue models and franchise fee structures that provide recurring cash flows. |
Hotels Resorts Franchising Subscription RevPAR | |
| 2023 Q3 |
AIManagement teams are allocating time and capital to develop AI capabilities, with product development roadmaps coming into focus. FactSet Research Systems outlined its vision for AI with multiple product enhancements including conversational user interfaces, next best action capabilities, and AI-derived presentation tools. |
Artificial Intelligence Generative AI Product Development FactSet Automation |
InflationInterest rates rose significantly during the quarter due to concerns that inflation will remain above the Federal Reserve's targeted levels. The fund exclusively invests in businesses with pricing power that can be employed in pursuit of long-term growth during inflationary periods. |
Federal Reserve Interest Rates Pricing Power Monetary Policy | |
Small CapsThe fund focuses on small-cap companies with attractive fundamental characteristics and long-term growth prospects. Portfolio holdings have median market cap of $6.8 billion and weighted average market cap of $18.7 billion, with many positions held for over 10 years. |
Small Cap Growth Long Term Holding Market Cap Growth Prospects |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | Fund Letters | Baron Growth Fund | MTN | Vail Resorts, Inc. | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | NYSE | European expansion, Leisure, Real Estate, recurring revenue, Season Passes, Ski Resorts, Tourism | Login |
| Dec 31, 2024 | Fund Letters | Baron Growth Fund | IDXX | IDEXX Laboratories, Inc. | Health Care | Health Care Equipment | Bull | NASDAQ | diagnostics, growth, Health Care Equipment, Medical devices, Pet Care, Product cycle, Veterinary diagnostics | Login |
| Dec 31, 2024 | Fund Letters | Baron Growth Fund | CSGP | CoStar Group, Inc. | Real Estate | Real Estate Services | Bull | NASDAQ | analytics, Growth Investment, information services, marketplace, Real Estate Services, Residential Real Estate, TAM expansion | Login |
| TICKER | COMMENTARY |
|---|---|
| GWRE | Guidewire Software, Inc. reported outstanding financial results. Annual recurring revenue, its primary metric of future growth, grew 22%, the fastest rate of growth since its IPO in 2012. The world's largest insurance carriers are increasingly adopting Guidewire's core systems to power their businesses and are electing to make larger and longer commitments to Guidewire, as evidenced by a landmark 10-year deal with Liberty Mutual. The outstanding sales performance translated to revenue, earnings and free cash flow results well ahead of expectations. However, despite remarkable results, shares declined by 25.6% in the quarter due to broader fears about the impact of AI on software. |
| IT | Syndicated research provider Gartner, Inc. detracted from performance as valuation multiples compressed amid rising concerns around AI. Against this backdrop, shares of Gartner came under pressure after the company reported contract value growth that was just 0.5% below expectations, underscoring the dramatic valuation compression at play. We continue to own Gartner given its large addressable market, significant competitive advantages, and robust free cash flow generation, which we expect management to deploy toward share repurchases at depressed valuation levels. We also view Gartner as an AI beneficiary, as it can leverage emerging tools to extract deeper insights from its vast trove of proprietary data and deliver it to customers in chatbot-type formats that meaningfully enhance its value proposition. |
| 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. |
| 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. |
| ACGL | Specialty insurer Arch Capital Group Ltd. contributed to performance as property and casualty (P&C) insurance stocks broadly outpaced the market amid heightened volatility. P&C insurance stocks tend to be resilient during turbulent markets and are less exposed to the AI-related concerns weighing on other sectors. In addition, Arch reported better-than-expected quarterly earnings, and management expects a continuation of double-digit growth in book value per share. 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. |
| 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. We continue to own CoStar given its differentiated data assets and significant growth opportunities in providing enhanced real estate information, analytics, and marketplace offerings. |
| KNSL | Shares of specialty insurer Kinsale Capital Group, Inc. fell due to concerns about moderating growth amid a cyclical slowdown in the property and casualty insurance industry. In the most recent quarter, gross premium growth slowed because of a drop in large property business, where competition and pricing pressure are most acute. Nevertheless, Kinsale reported quarterly earnings that exceeded Street expectations, driven by higher earned premiums, very low catastrophe losses, and favorable reserve development. We continue to own the stock because we believe Kinsale is well managed and has a long runway for growth in an attractive segment of the insurance market. |
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| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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