UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21296
BARON SELECT FUNDS
(Exact Name of Registrant as Specified in Charter)
767 Fifth Avenue, 49th Floor
New York, NY 10153
(Address of Principal Executive Offices) (Zip Code)
Patrick M. Patalino, General Counsel
c/o Baron Select Funds
767 Fifth Avenue, 49th Floor
New York, NY 10153
(Name and Address of Agent for Service)
(Registrant’s Telephone Number, including Area Code): 212-583-2000
Date of fiscal year end: December 31
Date of reporting period: December 31, 2023
Item 1. Reports to Stockholders.
Baron Partners Fund
Baron Focused Growth Fund
Baron International Growth Fund
Baron Real Estate Fund
Baron Emerging Markets Fund
Baron Global Advantage Fund
Baron Real Estate Income Fund
Baron Health Care Fund
Baron FinTech Fund
Baron New Asia Fund
Baron Technology Fund
Baron Funds®
Baron Select Funds
Annual Financial Report
DEAR BARON SELECT FUNDS SHAREHOLDER:
In this report, you will find audited financial statements for Baron Partners Fund, Baron Focused Growth Fund, Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, Baron Global Advantage Fund, Baron Real Estate Income Fund, Baron Health Care Fund, Baron FinTech Fund, Baron New Asia Fund, and Baron Technology Fund (the Funds) for the year ended December 31, 2023. The U.S. Securities and Exchange Commission (the SEC) requires mutual funds to furnish these statements semi-annually to their shareholders. We hope you find these statements informative and useful.
We thank you for choosing to join us as fellow shareholders in Baron Funds. We will continue to work hard to justify your confidence.
Sincerely,
| | | | |
 | |  | |  |
Ronald Baron Chief Executive Officer February 26, 2024 | | Linda S. Martinson Chairman, President and Chief Operating Officer February 26, 2024 | | Peggy Wong Chief Financial Officer February 26, 2024 |
This Annual Financial Report is for the Baron Select Funds, which currently has 12 series: Baron Partners Fund, Baron Focused Growth Fund, Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, Baron Global Advantage Fund, Baron Real Estate Income Fund, Baron Health Care Fund, Baron FinTech Fund, Baron WealthBuilder Fund, Baron New Asia Fund, and Baron Technology Fund. Baron WealthBuilder Fund is included in a separate Financial Report. If you are interested in Baron WealthBuilder Fund or Baron Investment Funds Trust, which contains the Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund, Baron Fifth Avenue Growth Fund, Baron Discovery Fund, and Baron Durable Advantage Fund, please visit the Funds’ website at baronfunds.com or contact us at 1-800-99BARON.
The Funds’ Proxy Voting Policy is available without charge and can be found on the Funds’ website at baronfunds.com, by clicking on the “Regulatory Documents” link at the bottom left corner of the homepage or by calling 1-800-99BARON and on the SEC’s website at sec.gov. The Funds’ most current proxy voting record, Form N-PX, is also available on the Funds’ website and on the SEC’s website.
The Funds file their complete Portfolios of Investments with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC’s website at sec.gov. Portfolios of Investments current to the most recent quarter are also available on the Funds’ website.
Some of the comments contained in this report are based on current management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. You can identify forward-looking statements by words such as “estimate,” “may,” “expect,” “should,” “could,” “believe,” “plan”, and other similar terms. We cannot promise future returns and our opinions are a reflection of our best judgment at the time this report is compiled.
The views expressed in this report reflect those of BAMCO, Inc. (BAMCO or the Adviser) only through the end of the period stated in this report. The views are not intended as recommendations or investment advice to any person reading this report and are subject to change at any time without notice based on market and other conditions.
Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. For more complete information about Baron Funds, including charges and expenses, call, write or go to baronfunds.com for a prospectus or summary prospectus. Read them carefully before you invest or send money. This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds, unless accompanied or preceded by the Funds’ current prospectus or summary prospectus.
| | |
| Baron Partners Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON PARTNERS FUND (RETAIL SHARES)
IN RELATIONTOTHE RUSSELL MIDCAP GROWTH INDEXANDTHE S&P 500 INDEX
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Ten
Years | | | Since
Inception
(January 31,
1992) | |
Baron Partners Fund — Retail Shares1,2,3 | | | 43.10% | | | | 2.60% | | | | 31.23% | | | | 18.80% | | | | 15.03% | |
Baron Partners Fund — Institutional Shares1,2,3,4 | | | 43.47% | | | | 2.86% | | | | 31.57% | | | | 19.11% | | | | 15.17% | |
Baron Partners Fund — R6 Shares1,2,3,4 | | | 43.46% | | | | 2.86% | | | | 31.57% | | | | 19.11% | | | | 15.16% | |
Russell Midcap Growth Index1 | | | 25.87% | | | | 1.31% | | | | 13.81% | | | | 10.57% | | | | 9.91% | |
S&P 500 Index1 | | | 26.29% | | | | 10.00% | | | | 15.69% | | | | 12.03% | | | | 10.16% | |
| 1 | The Russell Midcap® Growth Index measures the performance of medium-sized U.S. companies that are classified as growth. The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. All rights in the FTSE Russell Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. The Fund includes reinvestment of dividends, net of foreign withholding taxes, while the Russell Midcap® Growth Index and S&P 500 Index include reinvestment of dividends before taxes. Reinvestment of dividends positively impacts the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Reflects the actual fees and expenses that were charged when the Fund was a partnership. The predecessor partnership charged a 20% performance fee after reaching a certain performance benchmark. If the annual returns for the Fund did not reflect the performance fees for the years the predecessor partnership charged a performance fee, returns would be higher. The Fund’s shareholders will not be charged a performance fee. The predecessor partnership’s performance is only for periods before the Fund’s registration statement was effective, which was April 30, 2003. During those periods, the predecessor partnership was not registered under the Investment Company Act of 1940 and was not subject to its requirements or the requirements of the Internal Revenue Code relating to regulated investment companies, which, if it were, might have adversely affected its performance. |
| 3 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser may waive or reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 4 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to August 31, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
2
| | |
| December 31, 2023 (Unaudited) | | Baron Partners Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of Total
Investments* | |
Tesla, Inc. | | | 38.1% | |
Space Exploration Technologies Corp. | | | 9.9% | |
CoStar Group, Inc. | | | 8.1% | |
Arch Capital Group Ltd. | | | 6.1% | |
IDEXX Laboratories, Inc. | | | 5.6% | |
Hyatt Hotels Corporation | | | 5.5% | |
FactSet Research Systems Inc. | | | 4.4% | |
The Charles Schwab Corp. | | | 4.3% | |
Gartner, Inc. | | | 4.0% | |
Vail Resorts, Inc. | | | 3.2% | |
| |
| | | | 89.2% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of total investments)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Partners Fund1 increased 43.10%, outperforming the Russell Midcap Growth Index, which returned 25.87%.
Baron Partners Fund invests primarily in U.S. companies of any size with, in our view, significant long-term growth potential. We believe our process can identify investment opportunities that are attractively priced relative to future prospects. The Fund is non-diversified, so its top 10 holdings are expected to comprise a significant percentage of the portfolio, and the Fund uses leverage, both of which increase risk. In addition, the Fund may be subject to risks associated with potentially being concentrated in the securities of a single issuer or a small number of issuers,
including in a particular industry. Of course, there can be no assurance that we will be successful in achieving the Fund’s investment goals.
As of December 31, 2023, 43.5% of the Fund’s net assets are invested in Tesla, Inc. stock. Therefore, the Fund is exposed to the risk that were Tesla stock to lose significant value, which could happen rapidly, the Fund’s performance would be adversely affected. Before investing in the Fund, investors should carefully consider publicly available information about Tesla. There can be no assurances that the Fund will maintain its investment in Tesla, as the Adviser maintains discretion to actively manage the Fund’s portfolio, including by decreasing or liquidating the Fund’s investment in Tesla at any time. However, for so long as the Fund maintains a substantial investment in Tesla, the Fund’s performance will be significantly affected by the performance of Tesla stock and any decline in the price of Tesla stock would materially and adversely affect your investment in the Fund.
2023 came as a welcome relief to equity investors following a difficult 2022, with most major market indexes recapturing all their losses from the prior year. Brushing aside macro concerns including the U.S. Federal Reserve’s (the Fed) continuation of its historical tightening cycle, inflation data — although falling — that hovered above the Fed’s target, the recession debate, and geopolitical uncertainties, the markets rallied through the first half of 2023. After a third-quarter dip driven largely by concerns that rates would stay “higher for longer,” lower inflation data and a shift in focus to rate cuts prompted a bull run in the last two months of the year.
Consumer Discretionary, Industrials, and Health Care were the top contributors. There were no sectors that meaningfully detracted.
The top contributor was electric vehicle company Tesla, Inc. Despite slashing sticker prices, margins remained healthy, allowing robust investments in growth. 2023 also represented a record year for the Energy division’s revenues and margins. While Tesla continues to operate in a complex environment, we are getting closer to the release of its next-generation vehicle platform, which we believe can be a milestone for the industry.
The top detractor was online brokerage firm The Charles Schwab Corp. Shares fell following the March bankruptcy of Silicon Valley Bank (SVB). Despite running a much different business than SVB, Schwab faced deposit pressure through cash sorting in the wake of the collapse. We retain long-term conviction. Schwab continued to gain assets, and anticipated rate cuts in 2024 should help Schwab pay off its short-term funds. Long term, we believe Schwab has powerful asset-gathering momentum and scale and a reinvestment tailwind from maturing securities being invested at higher rates. We are encouraged by the firm’s exceptional client loyalty, robust organic growth, and industry-leading operating expense per client assets.
We invest for the long term in businesses we believe will benefit from secular growth trends, durable competitive advantages, and best-in-class management. We remain optimistic this approach will generate strong long-term performance regardless of the economic climate.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
3
| | |
| Baron Focused Growth Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON FOCUSED GROWTH FUND (RETAIL SHARES)
INRELATIONTOTHE RUSSELL 2500 GROWTH INDEXANDTHE S&P 500 INDEX
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Ten
Years | | | Since
Inception
(May 31,
1996) | |
Baron Focused Growth Fund — Retail Shares1,2,3 | | | 27.40% | | | | 2.77% | | | | 25.69% | | | | 15.25% | | | | 13.20% | |
Baron Focused Growth Fund — Institutional Shares1,2,3,4 | | | 27.73% | | | | 3.05% | | | | 26.01% | | | | 15.54% | | | | 13.35% | |
Baron Focused Growth Fund — R6 Shares1,2,3,4 | | | 27.75% | | | | 3.05% | | | | 26.01% | | | | 15.55% | | | | 13.35% | |
Russell 2500 Growth Index1 | | | 18.93% | | | | (2.68)% | | | | 11.43% | | | | 8.78% | | | | 8.04% | |
S&P 500 Index1 | | | 26.29% | | | | 10.00% | | | | 15.69% | | | | 12.03% | | | | 9.39% | |
| 1 | The Russell 2500™ Growth Index measures the performance of small to medium-sized companies that are classified as growth. The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. All rights in the FTSE Russell Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. The Fund includes reinvestment of dividends, net of foreign withholding taxes, while the Russell 2500™ Growth Index and S&P 500 Index include reinvestment of dividends before taxes. Reinvestment of dividends positively impacts the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Reflects the actual fees and expenses that were charged when the Fund was a partnership. The predecessor partnership charged a 15% performance fee through 2003 after reaching a certain performance benchmark. If the annual returns for the Fund did not reflect the performance fees for the years the predecessor partnership charged a performance fee, the returns would be higher. The Fund’s shareholders will not be charged a performance fee. The predecessor partnership’s performance is only for periods before the Fund’s registration statement was effective, which was June 30, 2008. During those periods, the predecessor partnership was not registered under the Investment Company Act of 1940 and was not subject to its requirements or the requirements of the Internal Revenue Code relating to regulated investment companies, which, if it were, might have adversely affected its performance. |
| 3 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser may waive or reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 4 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to August 31, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
4
| | |
| December 31, 2023 (Unaudited) | | Baron Focused Growth Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Tesla, Inc. | | | 11.4% | |
Space Exploration Technologies Corp. | | | 9.4% | |
Arch Capital Group Ltd. | | | 5.0% | |
Hyatt Hotels Corporation | | | 4.9% | |
FactSet Research Systems Inc. | | | 4.5% | |
Vail Resorts, Inc. | | | 4.3% | |
Guidewire Software, Inc. | | | 4.3% | |
CoStar Group, Inc. | | | 4.2% | |
MSCI Inc. | | | 3.8% | |
Red Rock Resorts, Inc. | | | 3.8% | |
| |
| | | | 55.6% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Focused Growth Fund1 returned 27.40%, outperforming the Russell 2500 Growth Index, which increased 18.93%.
Baron Focused Growth Fund invests in a non-diversified portfolio of companies that we believe are well capitalized and have exceptional management, significant growth potential, and durable barriers to competition. We believe our process can identify investment opportunities that are attractively priced relative to future prospects. In addition, the Fund may be subject to risks associated with potentially being concentrated in the securities of a single issuer or a small number of issuers, including in a particular industry. Of course, there can be no assurance that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief to equity investors following a difficult 2022, with most major market indexes recapturing all their losses from the prior year. Brushing aside macro concerns including the U.S. Federal Reserve’s (the Fed) continuation of its historical tightening cycle, inflation data — although falling — that hovered above the Fed’s target, the recession debate, and geopolitical uncertainties, the markets rallied through the first half of 2023. After a third-quarter dip driven largely by concerns that rates would stay “higher for longer,” lower inflation data and a shift in focus to rate cuts prompted a bull run in the last two months of the year.
Consumer Discretionary, Information Technology, and Industrials were the top contributors. There were no sectors that meaningfully detracted.
The top contributor was electric vehicle company Tesla, Inc. Despite slashing sticker prices, margins remained healthy, allowing robust investments in growth. 2023 also represented a record year for the Energy division’s revenues and margins. Though Tesla continues to operate in a complex environment, we are getting closer to the release of its next-generation vehicle platform, which we believe can be a milestone for the industry.
Timeshare company Marriott Vacations Worldwide Corporation was the top detractor. Share price weakness was driven by soft sales of timeshare units due to higher interest rates and the slow ramp of a new product offering. In addition, a default rate that was higher than the company had anticipated forced it to take a charge to increase its reserves, pressuring earnings and cash flow. We exited our position.
We invest for the long term in businesses that we believe will benefit from secular growth trends, durable competitive advantages, and best-in-class management. We remain optimistic that this approach will generate strong long-term performance regardless of the economic climate.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
5
| | |
| Baron International Growth Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON INTERNATIONAL GROWTH FUND (RETAIL SHARES)
INRELATIONTOTHE MSCI ACWIEX USA INDEXANDTHE MSCI ACWIEX USA IMI GROWTH INDEX
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Ten
Years | | | Since
Inception
(December 31,
2008)^ | |
Baron International Growth Fund — Retail Shares1,2 | | | 7.33% | | | | (5.15)% | | | | 7.53% | | | | 4.92% | | | | 8.67% | |
Baron International Growth Fund — Institutional Shares1,2,3 | | | 7.60% | | | | (4.91)% | | | | 7.79% | | | | 5.18% | | | | 8.94% | |
Baron International Growth Fund — R6 Shares1,2,3 | | | 7.61% | | | | (4.90)% | | | | 7.79% | | | | 5.18% | | | | 8.94% | |
MSCI ACWI ex USA Index1 | | | 15.62% | | | | 1.55% | | | | 7.08% | | | | 3.83% | | | | 6.74% | |
MSCI ACWI ex USA IMI Growth Index1 | | | 14.04% | | | | (2.58)% | | | | 7.52% | | | | 4.60% | | | | 7.49% | |
| ^ | Commencement of investment operations was January 2, 2009. |
| 1 | The MSCI ACWI ex USA Index Net (USD) is designed to measure the equity market performance of large-and-mid cap securities across 22 of 23 Developed Markets (DM) countries (excluding the US) and 24 Emerging Markets (EM) countries. The MSCI ACWI ex USA IMI Growth Index Net (USD) is designed to measure the performance of large-, mid- and small-cap growth securities exhibiting overall growth style characteristics across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 24 Emerging Markets (EM) countries. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The indexes and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to August 31, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
6
| | |
| December 31, 2023 (Unaudited) | | Baron International Growth Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Linde plc | | | 2.8% | |
eDreams ODIGEO SA | | | 2.6% | |
Constellation Software Inc. | | | 2.4% | |
argenx SE | | | 2.3% | |
Arch Capital Group Ltd. | | | 2.1% | |
AstraZeneca PLC | | | 2.1% | |
Taiwan Semiconductor Manufacturing Company Limited | | | 2.0% | |
Industria de Diseno Textil, S.A. | | | 1.9% | |
InPost S.A. | | | 1.9% | |
BNP Paribas S.A. | | | 1.7% | |
| |
| | | | 21.9% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron International Growth Fund1 increased 7.33%, underperforming the MSCI ACWI ex USA Index, which gained 15.62%.
Baron International Growth Fund is a diversified fund that invests for the long term primarily in securities of non-U.S. growth companies. The Fund expects to diversify among developed and developing countries throughout the world, although total exposure to developing countries will not exceed 35%. The Fund may purchase securities of companies of any size. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
For much of 2023, international equities were fairly volatile as the market reacted to macroeconomic factors including inflation, central bank rate tightening programs, geopolitical unrest, and continued U.S. dollar strength. In the last two months, that changed abruptly after the U.S. Federal Reserve surprised markets by communicating that rate cuts would likely occur sooner and in larger magnitude than expected. While international markets cheered the news, we believe this event also foreshadows the end of the 14-year U.S. dollar bull market and will usher in a cycle of relative outperformance by non-U.S. equities.
Japan, Spain, and India contributed the most. Top detractors were China, Switzerland, and the U.K.
Consumer Discretionary, Financials, and Industrials contributed the most. Energy was a slight detractor.
The top contributor was eDreams ODIGEO SA, a Spanish online subscription-based travel agency. eDreams continued to execute on its Prime subscription shift and came closer toward fiscal year 2025 targets. It has improved its positioning with 5.1 million subscribers and demonstration of competitive strength in Europe. Given strong customer acquisition, an impressive pipeline of new products, and plans for the attractive hotel market, we retain conviction.
Meyer Burger Technology AG, a Swiss solar module supplier, was the top detractor. Shares declined on weak revenue and bottom-line results due to challenging European markets and delays in regulatory support, which prompted the company to halt expansion of its German solar cell factory and move production to the U.S. We retain conviction in Meyer Burger as a long-term beneficiary of greater localization of energy supply chains and reduced reliance on China. Meyer Burger’s next-generation solar modules are more efficient, resulting in premium prices and much higher margins. The company is seeing strong order momentum as it ramps production at its U.S facilities, supported by long-term off-take agreements with key customers.
Developed international markets historically perform favorably in an environment of declining rates and appreciating non-U.S. dollar currencies, as peaking interest rates presage a transition towards re-acceleration of the global economy and such markets tend to be more economically and interest-rate sensitive. We also expect the emerging markets in general, and particularly economies and companies most geared to improvement in domestic growth, consumption, and investment, to benefit from this inflection point in financial conditions and capital flows. We anticipate a sustainable period of enhanced earnings growth potential in most international jurisdictions — essentially a mean reversion or mirror image of the past several years.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
7
| | |
| Baron Real Estate Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON REAL ESTATE FUND (RETAIL SHARES)
INRELATIONTOTHE MSCI USA IMI EXTENDED REAL ESTATE INDEXAND MSCI US REIT INDEX
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Ten
Years | | | Since
Inception
(December 31,
2009)^ | |
Baron Real Estate Fund — Retail Shares1,2 | | | 24.70% | | | | 3.36% | | | | 18.01% | | | | 9.78% | | | | 13.48% | |
Baron Real Estate Fund — Institutional Shares1,2 | | | 25.04% | | | | 3.62% | | | | 18.32% | | | | 10.06% | | | | 13.76% | |
Baron Real Estate Fund — R6 Shares1,2,3 | | | 25.04% | | | | 3.62% | | | | 18.32% | | | | 10.07% | | | | 13.77% | |
MSCI USA IMI Extended Real Estate Index1 | | | 23.09% | | | | 8.58% | | | | 11.68% | | | | 9.11% | | | | 11.07% | |
MSCI US REIT Index1 | | | 12.27% | | | | 5.89% | | | | 6.15% | | | | 6.29% | | | | 8.07% | |
| ^ | Commencement of investment operations was January 4, 2010. |
| 1 | The MSCI USA IMI Extended Real Estate Index Net (USD) is an unmanaged custom index calculated by MSCI for, and as requested by, BAMCO, Inc. The index includes real estate and real estate-related GICS classified securities. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI. The MSCI US REIT Index Net (USD) is designed to measure the performance of all equity REITs in the US equity market, except for specialty equity REITs that do not generate a majority of their revenue and income from real estate rental and leasing operations. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The indexes and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser may waive or reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the R6 Shares prior to January 29, 2016 is based on the performance of the Institutional Shares. |
8
| | |
| December 31, 2023 (Unaudited) | | Baron Real Estate Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Toll Brothers, Inc. | | | 9.9% | |
Prologis, Inc. | | | 5.7% | |
Equinix, Inc. | | | 5.5% | |
D.R. Horton, Inc. | | | 5.5% | |
Lennar Corporation | | | 5.3% | |
Blackstone Inc. | | | 5.1% | |
CoStar Group, Inc. | | | 4.4% | |
MGM Resorts International | | | 3.5% | |
Wynn Resorts, Limited | | | 3.4% | |
Las Vegas Sands Corporation | | | 2.8% | |
| |
| | | | 51.0% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Real Estate Fund1 increased 24.70%, outperforming the MSCI USA IMI Extended Real Estate Index (the Index), which returned 23.09%.
Baron Real Estate Fund is a diversified fund that under normal circumstances, invests 80% of its net assets in real estate and real
estate-related companies of all sizes, and in companies which, in the opinion of the Adviser, own significant real estate assets at the time of investment. The Fund seeks to invest in well-managed companies that we believe have significant long-term growth opportunities. The Fund’s investment universe extends beyond real estate investment trusts (REITs) to include hotels, senior housing operators, casino and gaming operators, tower operators, infrastructure-related companies and master limited partnerships, data centers, building products companies, real estate service companies, and real estate operating companies. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief after a brutal 2022, with the Index recapturing most of its losses from the prior year. Brushing aside concerns including the Federal Reserve’s (the Fed) historical tightening cycle, inflation data, the recession debate, and geopolitical uncertainties, the Index climbed through the first six months. After a third-quarter dip driven largely by worries around “higher for longer” rates, lower inflation, and a shift in focus to rate cuts prompted a bull run in the last two months. Real estate equities, which the market views as advantaged by lower rates, benefited. Recession fears were replaced by optimism that the Fed had orchestrated a “soft landing,” generating further cause for cheer.
Homebuilders & land developers, building products/services, and REITs contributed the most. There were no categories that meaningfully detracted.
Homebuilder Toll Brothers, Inc. was the top contributor, as resilient demand for new housing and market share gains drove robust operating and financial results. Performance was also boosted by a drop in mortgage rates toward year end, making home purchases more affordable. New home construction continues to lag demand following a decade of under-building. We think Toll Brothers is well positioned given its sizable land bank, healthy balance sheet, and market share gains.
Timeshare company Marriott Vacations Worldwide Corporation was the top detractor. Share price weakness was driven by soft sales due to higher interest rates and the slow ramp of a new product offering. In addition, a default rate higher than the company had anticipated forced it to take a charge to increase its reserves, pressuring earnings and cash flow. We exited our position.
Real estate has had to absorb a hurricane of headwinds in the last few years, including the pandemic, the Fed’s aggressive tightening campaign, a spike in mortgage rates, fears of a commercial real estate crisis, tighter credit availability, high inflation, and supply-chain challenges. Though we expect market volatility in the year ahead, we believe many of these challenges are finally subsiding. Public real estate generally enjoys favorable demand versus supply prospects, maintains conservatively capitalized balance sheets, and has access to credit.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
9
| | |
| Baron Emerging Markets Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON EMERGING MARKETS FUND (RETAIL SHARES)
INRELATIONTOTHE MSCI EM INDEXANDTHE MSCI EM IMI GROWTH INDEX
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Ten
Years | | | Since
Inception
(December 31,
2010)^ | |
Baron Emerging Markets Fund — Retail Shares1, 2 | | | 7.95% | | | | (9.18)% | | | | 2.72% | | | | 2.21% | | | | 2.92% | |
Baron Emerging Markets Fund — Institutional Shares1, 2 | | | 8.29% | | | | (8.96)% | | | | 2.99% | | | | 2.48% | | | | 3.18% | |
Baron Emerging Markets Fund — R6 Shares1, 2, 3 | | | 8.27% | | | | (8.96)% | | | | 2.99% | | | | 2.48% | | | | 3.18% | |
MSCI EM Index1 | | | 9.83% | | | | (5.08)% | | | | 3.68% | | | | 2.66% | | | | 1.55% | |
MSCI EM IMI Growth Index1 | | | 8.09% | | | | (8.05)% | | | | 4.67% | | | | 3.44% | | | | 2.36% | |
| ^ | Commencement of investment operations was January 3, 2011. |
| 1 | The MSCI EM (Emerging Markets) Index Net (USD) is designed to measure equity market performance of large-and mid-cap securities across 24 Emerging Markets countries. The MSCI EM (Emerging Markets) IMI Growth Index Net (USD) is designed to measure equity market performance of large-, mid-, and small-cap securities exhibiting overall growth characteristics across 24 Emerging Markets countries. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The indexes and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser may waive or reimburse certain Fund expenses pursuant to a contract expiring on August 29, 2034 unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent without which performance would have been lower. |
| 3 | Performance for the R6 Shares prior to January 29, 2016 is based on the performance of the Institutional Shares. |
10
| | |
| December 31, 2023 (Unaudited) | | Baron Emerging Markets Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Taiwan Semiconductor Manufacturing Company Limited | | | 6.9% | |
Samsung Electronics Co., Ltd. | | | 5.3% | |
Tencent Holdings Limited | | | 3.7% | |
Bajaj Finance Limited | | | 2.5% | |
Suzano S.A. | | | 2.3% | |
Alibaba Group Holding Limited | | | 2.2% | |
HDFC Bank Limited | | | 2.2% | |
HD Korea Shipbuilding & Offshore Engineering Co., Ltd. | | | 2.0% | |
Bharti Airtel Limited | | | 2.0% | |
Bundl Technologies Private Limited | | | 1.9% | |
| |
| | | | 30.9% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Emerging Markets Fund1 returned 7.95%, underperforming the MSCI EM Index, which increased 9.83%.
Baron Emerging Markets Fund is a diversified fund that invests for the long term primarily in companies of any size with their principal business activities or trading markets in developing countries. The Fund may invest up to 20% of its net assets in developed and frontier countries. The Fund seeks to invest in companies with significant long-term growth prospects and purchase them at prices we believe to be favorable. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
For much of 2023, emerging market (EM) equities were volatile as the market reacted to macroeconomic factors including inflation, central bank rate tightening programs, geopolitical unrest, and continued U.S. dollar strength. In the last two months, that changed abruptly after the U.S. Federal Reserve surprised markets by communicating that rate cuts would likely occur sooner and in larger magnitude than expected. While emerging markets cheered the news, we believe this event also foreshadows the end of the 14-year U.S. dollar bull market and will usher in a cycle of outperformance by non-U.S. equities.
India, Taiwan, Korea, and Brazil were the top contributors. China and Hong Kong detracted the most.
Financials, Information Technology, and Industrials contributed the most. Consumer Discretionary and Health Care detracted the most.
Taiwan Semiconductor Manufacturing Company Limited was the top contributor. Shares rose due to investor expectations for a cyclical recovery heading into 2024 and significant demand for artifical intelligence chips. We retain conviction that Taiwan Semiconductor’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT, will allow it to sustain double-digit earnings growth over the next several years.
India-based Think & Learn Private Limited, the parent entity of Byju’s — the Learning App, was the top detractor as COVID-related tailwinds that benefited online/digital education slowed. Byju’s also announced that Deloitte Haskins & Sells had resigned as its auditor along with three investor-appointed directors. These material adverse events required us to adjust down our stake’s fair market value.
Recent EM sentiment have been masked by skepticism toward China. While inconsistent policy signals and geopolitical developments have been frustrating, we believe China’s policymakers have the tools and capacity to engineer a recovery, and we remain cautiously optimistic that incremental efforts will render current valuation and skepticism as too conservative.
We expect the emerging markets in general, and particularly those economies and companies most geared to the improvement in domestic growth, consumption, and investment that we expect to result from declining interest rates and appreciating currencies, to benefit most from this inflection point in financial conditions and capital flows. We anticipate a sustainable period of enhanced relative earnings growth potential in EM — essentially a mean reversion or mirror image of the past several years.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
11
| | |
| Baron Global Advantage Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON GLOBAL ADVANTAGE FUND† (RETAIL SHARES)
INRELATIONTOTHE MSCI ACWI INDEXANDTHE MSCI ACWI GROWTH INDEX
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Ten
Years | | | Since
Inception
(April 30,
2012) | |
Baron Global Advantage Fund — Retail Shares1, 2 | | | 25.26% | | | | (15.23)% | | | | 9.60% | | | | 8.79% | | | | 10.30% | |
Baron Global Advantage Fund — Institutional Shares1, 2 | | | 25.56% | | | | (15.03)% | | | | 9.88% | | | | 9.04% | | | | 10.55% | |
Baron Global Advantage Fund — R6 Shares1, 2,3 | | | 25.59% | | | | (15.02)% | | | | 9.88% | | | | 9.04% | | | | 10.55% | |
MSCI ACWI Index1 | | | 22.20% | | | | 5.75% | | | | 11.72% | | | | 7.93% | | | | 9.11% | |
MSCI ACWI Growth Index1 | | | 33.22% | | | | 3.66% | | | | 14.58% | | | | 10.06% | | | | 10.85% | |
| † | The Fund’s, 5- and 10-year historical performance was impacted by gains from IPOs, and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future. |
| 1 | The MSCI ACWI Index Net (USD) measures the equity market performance of large- and mid-cap securities across developed and emerging markets, including the United States. The MSCI ACWI Growth Index Net (USD) captures large-and mid-cap securities exhibiting overall growth style characteristics across 23 Developed Markets (DM) countries and 24 Emerging Markets (EM) countries. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The indexes and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the R6 Shares prior to August 31, 2016 is based on the performance of the Institutional Shares. |
12
| | |
| December 31, 2023 (Unaudited) | | Baron Global Advantage Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Total Investments* | |
MercadoLibre, Inc. | | | 9.2% | |
NVIDIA Corporation | | | 9.2% | |
Shopify Inc. | | | 7.8% | |
Endava plc | | | 6.7% | |
Snowflake Inc. | | | 5.3% | |
Cloudflare, Inc. | | | 4.7% | |
Space Exploration Technologies Corp. | | | 4.6% | |
Tesla, Inc. | | | 4.4% | |
Coupang, Inc. | | | 4.3% | |
Bajaj Finance Limited | | | 4.0% | |
| |
| | | | 60.2% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of total investments)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Global Advantage Fund1 increased 25.26%, outperforming the MSCI ACWI Index (the Index), which increased 22.20%.
The Fund is a diversified fund that, under normal circumstances, invests primarily in equity securities of companies throughout the world, with capitalizations within the range of companies in the
MSCI ACWI Index. At all times, the Fund will have investments in at least three countries outside the U.S. Under normal conditions, at least 40% of net assets will be invested in companies outside the U.S. (at least 30% if non-U.S. market conditions are not favorable). The Adviser seeks to invest in businesses it believes have significant opportunities for growth, durable competitive advantages, exceptional management, and an attractive valuation. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief after a brutal 2022, with the Index recapturing all its losses from the prior year. Brushing aside macro concerns including the Federal Reserve’s (the Fed) continuation of its historical tightening cycle, inflation data — although falling — that hovered above the Fed’s target, the recession debate, and geopolitical uncertainties, the Index climbed through the first half of 2023. After a third-quarter dip driven largely by concerns that rates would stay “higher for longer,” lower inflation data and a shift in focus to rate cuts prompted a bull run in the last two months.
The U.S., Argentina, and Canada contributed the most. India and China detracted.
Information Technology, Consumer Discretionary, and Industrials contributed the most. Materials and Communication Services detracted.
Semiconductor company NVIDIA Corporation was the top contributor. NVIDIA is seeing the fruits of its nearly 20-year investment in artificial intelligence (AI) and accelerated computing, with the stock finishing 2023 up over 200%, driven by unprecedented demand acceleration for generative AI (GenAI). While the opportunity within the data center installed base is already large at roughly $1 trillion, the pace of innovation in AI in general, and GenAI in particular, should drive significant expansion in the addressable market.
India-based Think & Learn Private Limited, the parent entity of Byju’s — the Learning App, was the top detractor as COVID-related tailwinds that benefited online/digital education slowed. Byju’s also announced Deloitte Haskins & Sells had resigned as its auditor along with three directors. These material adverse events required us to adjust down our stake’s fair market value.
We live and invest in an uncertain world. The constant challenges we face are real and serious, with uncertain outcomes. History suggests that most will prove passing or manageable. The business of capital allocation is the business of taking risk, managing uncertainty, and leveraging long-term opportunities that those risks and uncertainties create. We are optimistic about the prospects of our holdings and continue to search for new ideas and opportunities while investing only when we believe a company is trading at an attractive price relative to intrinsic value.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
13
| | |
| Baron Real Estate Income Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON REAL ESTATE INCOME FUND (RETAIL SHARES)
INRELATIONTOTHE MSCI US REIT INDEX
| | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Since
Inception
December 29,
2017)^ | |
Baron Real Estate Income Fund — Retail Shares1,2 | | | 15.19% | | | | 2.49% | | | | 12.41% | | | | 8.05% | |
Baron Real Estate Income Fund — Institutional Shares1,2 | | | 15.51% | | | | 2.78% | | | | 12.64% | | | | 8.29% | |
Baron Real Estate Income Fund — R6 Shares1,2 | | | 15.44% | | | | 2.75% | | | | 12.61% | | | | 8.27% | |
MSCI US REIT Index1 | | | 12.27% | | | | 5.89% | | | | 6.15% | | | | 4.05% | |
| ^ | Commencement of investment operations was January 2, 2018. |
| 1 | The MSCI US REIT Index Net (USD) is designed to measure the performance of all equity REITs in the US equity market, except for specialty equity REITs that do not generate a majority of their revenue and income from real estate rental and leasing operations. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The index and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The index is unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
14
| | |
| December 31, 2023 (Unaudited) | | Baron Real Estate Income Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Prologis, Inc. | | | 10.5% | |
Equinix, Inc. | | | 9.3% | |
Welltower Inc. | | | 7.7% | |
American Tower Corporation | | | 6.2% | |
Extra Space Storage Inc. | | | 5.3% | |
AvalonBay Communities, Inc. | | | 4.9% | |
Digital Realty Trust, Inc. | | | 4.5% | |
American Homes 4 Rent | | | 4.3% | |
Equity Residential | | | 4.2% | |
Invitation Homes, Inc. | | | 4.1% | |
| |
| | | | 61.1% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Real Estate Income Fund1 increased 15.19%, outperforming the MSCI US REIT Index (the Index), which increased 12.27%.
Baron Real Estate Income Fund is a non-diversified fund that under normal circumstances, invests at least 80% of its net assets in real estate income-producing securities and other real estate securities of any market capitalization, including common stocks and equity securities, debt and preferred securities, non-U.S. real estate income-producing securities, and any other real estate-
related yield securities. The Fund is likely to maintain a significant portion of its assets in real estate investment trusts that pool money to invest in properties (equity REITs) or mortgages (mortgage REITs), with revenue primarily consisting of rent from owned, income-producing real estate properties, and capital gains from the sale of such properties. The Fund generally invests in equity REITs. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief after a brutal 2022, with the Index recapturing some of its losses from the prior year. Brushing aside concerns including the Federal Reserve’s historical tightening cycle, inflation data, the recession debate, and geopolitical uncertainties, the Index climbed through the first six months. After a third-quarter dip driven largely by worries around “higher for longer” rates, lower inflation and a shift in focus to rate cuts prompted a bull run in the last two months. Real estate equities, which the market views as advantaged by lower rates, benefited. Recession fears were replaced by optimism that the Fed had orchestrated a “soft landing,” generating further cause for cheer.
Data center REITs, industrial REITs, and non-REIT real estate companies were the top contributors. Multi-family REITs and other REITs detracted.
Prologis, Inc., the world’s largest industrial warehouse REIT, was the top contributor, driven by consistently positive operating and financial results. In addition, the company provided guidance for 2024 as well as the medium term, both of which included growth targets that exceeded investor expectations. Industrial real estate has attractive fundamentals, with organic growth among the highest across all real estate asset types. Given Prologis’s assets, markets, management, and balance sheet, we believe it is positioned to benefit from this favorable backdrop.
Equity Residential, which operates 80,000 apartment units in high-barrier-to-entry coastal locations, was the top detractor due to weak performance in its West Coast markets combined with a slightly lowered full-year outlook for blended rent and net operating income growth. We retain conviction in Equity Residential given its premier asset base in sought-after locations, attractive valuation, lack of housing supply relative to demand, increasing costs limiting new supply, and well-regarded management team.
Real estate has had to absorb a hurricane of headwinds in the last few years, including the pandemic, the Fed’s aggressive tightening campaign, a spike in mortgage rates, fears of a commercial real estate crisis, tighter credit availability, high inflation, and supply- chain challenges. Though we expect market volatility in the year ahead, we believe many of these challenges are finally subsiding. Public real estate generally enjoys favorable demand versus supply prospects, maintains conservatively capitalized balance sheets, and has access to credit.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects the results of Retail Shares. |
15
| | |
| Baron Health Care Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON HEALTH CARE FUND† (RETAIL SHARES)
INRELATIONTOTHE RUSSELL 3000 HEALTH CARE INDEXANDTHE S&P 500 INDEX
| | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Since
Inception
April 30,
2018) | |
Baron Health Care Fund — Retail Shares1,2 | | | 6.16% | | | | 0.53% | | | | 15.16% | | | | 12.26% | |
Baron Health Care Fund — Institutional Shares1,2 | | | 6.37% | | | | 0.78% | | | | 15.43% | | | | 12.54% | |
Baron Health Care Fund — R6 Shares1,2 | | | 6.42% | | | | 0.79% | | | | 15.46% | | | | 12.54% | |
Russell 3000 Health Care Index1 | | | 2.87% | | | | 4.63% | | | | 10.79% | | | | 10.38% | |
S&P 500 Index1 | | | 26.29% | | | | 10.00% | | | | 15.69% | | | | 12.90% | |
| † | The Fund’s 3-year historical performance was impacted by gains from IPOs, and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future. |
| 1 | The Russell 3000® Health Care Index is an unmanaged index representative of companies involved in medical services or health care in the Russell 3000 Index, which is comprised of the 3,000 largest U.S. companies as determined by total market capitalization. The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. All rights in the FTSE Russell Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. The Fund includes reinvestment of dividends, net of foreign withholding taxes, while the Russell 3000® Health Care Index and S&P 500 Index include reinvestment of dividends before taxes. Reinvestment of dividends positively impacts the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
16
| | |
| December 31, 2023 (Unaudited) | | Baron Health Care Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Eli Lilly and Company | | | 9.6% | |
UnitedHealth Group Incorporated | | | 9.4% | |
Intuitive Surgical, Inc. | | | 4.8% | |
Merck & Co., Inc. | | | 4.5% | |
Thermo Fisher Scientific Inc. | | | 4.5% | |
Vertex Pharmaceuticals Incorporated | | | 4.4% | |
Boston Scientific Corporation | | | 4.0% | |
Rocket Pharmaceuticals, Inc. | | | 3.7% | |
argenx SE | | | 3.6% | |
Zoetis Inc. | | | 3.0% | |
| |
| | | | 51.6% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Health Care Fund1 increased 6.16%, outperforming the Russell 3000 Health Care Index, which increased 2.87%.
Baron Health Care Fund is a non-diversified fund that under normal circumstances, invests at least 80% of its net assets in equity securities of companies engaged in the research, development, production, sale, delivery, or distribution of products and services related to the health care industry. The Fund’s allocation among the sub-industries of the Health Care sector will vary depending upon the relative potential the Fund
sees within each area. The Adviser seeks to invest in businesses it believes have significant growth opportunities, durable competitive advantages, exceptional management, and attractive valuations. The Fund may purchase securities of companies of any market capitalization and may invest in non-U.S. stocks. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
The big headline in health care was excitement surrounding a new category of weight loss drugs, sending shares of the manufacturers of these drugs surging. Elsewhere in the sector, headwinds continued to pressure performance. Managed care companies grappled with political and regulatory scrutiny of the Medicare Advantage program and the pharmacy benefit management industry, less favorable Medicare Advantage rates for 2024, and an uptick in medical costs. The challenging funding environment for biotechnology continued. Life sciences tools companies faced a pullback in pharmaceutical spending, less biotechnology funding, a slowdown in China, and inventory destocking. From a sector perspective, Health Care was simply out of favor as investors eschewed “defensive” sectors to focus on large-cap growth stocks, especially those seen as potential beneficiaries of artificial intelligence.
Pharmaceuticals, biotechnology, and health care equipment contributed the most. Managed health care, health care services, and life sciences tools & services detracted.
Eli Lilly and Company was the top contributor. Performance was strong for much of 2023 due to consistent financial growth and the constant drumbeat surrounding the obesity and diabetes franchises that potentially could reach $100 billion a year in revenue. Current limitations on growth have been the manufacturer’s capacity to produce enough to meet demand and insurance coverage questions. We retain conviction given opportunities in Alzheimer’s and obesity and continued strong operational execution.
Ascendis Pharma A/S, which makes long-acting versions of already de-risked drugs, was the top detractor. In May 2023, the FDA delayed approval of Ascendis’ hypoparathyroidism drug, citing issues with the drug’s release from the device’s needle and the resulting impact on the amount injected. The total dose has implications for the potential safety profile of this drug particularly as it relates to bone composition. We exited our position.
The Health Care sector has many favorable long-term attributes. Valuations are attractive, balance sheets are generally solid, and major advances in science, medicine, and technology are transforming the industry. We focus on identifying high-quality, competitively advantaged companies with great management teams that we believe will benefit from the secular trends we have identified.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
17
| | |
| Baron FinTech Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON FINTECH FUND† (RETAIL SHARES)
INRELATIONTOTHE FACTSET GLOBAL FINTECH INDEXANDTHE S&P 500 INDEX
| | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Since
Inception
December 31,
2019^ | |
Baron FinTech Fund — Retail Shares1,2 | | | 26.96% | | | | (0.95)% | | | | 9.31% | |
Baron FinTech Fund — Institutional Shares1,2 | | | 27.31% | | | | (0.69)% | | | | 9.58% | |
Baron FinTech Fund — R6 Shares1,2 | | | 27.31% | | | | (0.71)% | | | | 9.58% | |
FactSet Global FinTech Index1 | | | 23.34% | | | | (7.64)% | | | | 1.51% | |
S&P 500 Index1 | | | 26.29% | | | | 10.00% | | | | 12.04% | |
| † | The Fund’s 3-year historical performance was impacted by gains from IPOs and there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future. |
| ^ | Commencement of investment operations was January 2, 2020. |
| 1 | The FactSet Global FinTech Index™ is an unmanaged and equal-weighted index that measures the equity market performance of companies engaged in Financial Technologies, primarily in the areas of software and consulting, data, and analytics, digital payment processing, money transfer, and payment transaction-related hardware across 30 developed and emerging markets. The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. The Fund includes reinvestment of dividends, net of foreign withholding taxes, while the FactSet Global Fintech Index™ and S&P 500 Index include reinvestment of dividends before taxes. Reinvestment of dividends positively impacts the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. As of February 3, 2023, the Fund has changed its primary benchmark from the S&P 500 Index to the FactSet Global FinTech Index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
18
| | |
| December 31, 2023 (Unaudited) | | Baron FinTech Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Intuit Inc. | | | 5.2% | |
Visa Inc. | | | 4.9% | |
S&P Global Inc. | | | 4.9% | |
Mastercard Incorporated | | | 4.8% | |
Fair Isaac Corporation | | | 4.3% | |
MercadoLibre, Inc. | | | 3.7% | |
Apollo Global Management, Inc. | | | 3.6% | |
The Progressive Corporation | | | 3.5% | |
MSCI Inc. | | | 3.1% | |
Fiserv, Inc. | | | 3.0% | |
| |
| | | | 41.0% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron FinTech Fund1 increased 26.96%, outperforming the FactSet Global FinTech Index, which increased 23.34%.2
Baron FinTech Fund is a non-diversified fund that invests in companies of any market capitalization that develop or use innovative technologies related in a significant way to financial services. The Fund invests principally in U.S. securities but may invest up to 25% in non-U.S. securities. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief to equity investors following a difficult 2022, with most major market indexes recapturing all their losses from the prior year. Brushing aside macro concerns including the Federal Reserve’s (the Fed) continuation of its historical tightening cycle, inflation data — although falling — that hovered above the Fed’s target, the recession debate, and geopolitical uncertainties, the markets rallied through the first half of 2023. After a third-quarter dip driven largely by concerns that rates would stay “higher for longer,” lower inflation data and a shift in focus to rate cuts prompted a bull run in the last two months of the year.
Financials, Information Technology, and Consumer Discretionary contributed the most. There were no sectors that meaningfully detracted.
Fair Isaac Corporation, a data and analytics company focused on predicting consumer behavior, contributed the most. The company reported good earnings results throughout 2023 and gave preliminary fiscal year 2024 guidance that looks quite conservative, especially given that pricing initiatives in the Scores business remain on track. CEO Will Lansing expressed confidence that the business can perform relatively well across different economic backdrops and optimism about momentum in the software business. We retain conviction, as we believe that Fair Isaac will be a steady earnings compounder, which should drive solid returns for the stock over a multi-year period.
The top detractor was online brokerage firm The Charles Schwab Corp. Shares fell following the March bankruptcy of Silicon Valley Bank (SVB). Despite running a much different business than SVB, Schwab faced deposit pressure through cash sorting in the wake of the collapse. We retain long-term conviction. Schwab continued to gain assets, and anticipated rate cuts in 2024 should help Schwab pay off its short-term funds. Long term, we believe Schwab has powerful asset-gathering momentum and scale and a reinvestment tailwind from maturing securities being invested at higher rates. We are encouraged by the firm’s exceptional client loyalty, robust organic growth, and industry-leading operating expense per client assets.
We have curated a diversified portfolio of fintech businesses to reduce the exposure to any single economic outcome. The portfolio is balanced across seven themes, each of which is influenced by idiosyncratic factors. We include a mix of Leaders and Challengers, with the relative mix driven by top-down risk considerations and bottom-up opportunities. We believe fintech remains in the early innings of growth as incumbent financial institutions still have a long digitization journey ahead and younger consumers continue favoring digital solutions.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
| 2 | As of February 3, 2023, the Fund has changed its primary benchmark from the S&P 500 Index to the FactSet Global FinTech Index. |
19
| | |
| Baron New Asia Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON NEW ASIA FUND (RETAIL SHARES)
INRELATIONTOTHE MSCI AC ASIAEX JAPAN INDEXAND MSCI AC ASIAEX JAPAN IMI GROWTH INDEX
| | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Since
Inception
July 30,
2021 | |
Baron New Asia Fund — Retail Shares1,2 | | | 5.54% | | | | (9.72)% | |
Baron New Asia Fund — Institutional Shares1,2 | | | 5.79% | | | | (9.48)% | |
Baron New Asia Fund — R6 Shares1,2 | | | 5.65% | | | | (9.48)% | |
MSCI AC Asia ex Japan Index1 | | | 5.98% | | | | (7.69)% | |
MSCI AC Asia ex Japan IMI Growth Index1 | | | 4.37% | | | | (10.66)% | |
| 1 | The MSCI AC Asia ex Japan Index Net (USD) is designed to measure the performance of large- and mid-cap equity securities representation across 2 of 3 developed markets countries (excluding Japan) and 8 emerging markets countries in Asia. The MSCI AC Asia ex Japan IMI Growth Index Net (USD) is designed to measure the performance of large-, mid-, and small-cap securities exhibiting overall growth style characteristics across 2 of 3 developed markets countries (excluding Japan) and 8 emerging market countries in Asia. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The indexes and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
20
| | |
| December 31, 2023 (Unaudited) | | Baron New Asia Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
Taiwan Semiconductor Manufacturing Company Limited | | | 7.4% | |
Samsung Electronics Co., Ltd. | | | 5.7% | |
Bharti Airtel Limited | | | 4.4% | |
Tencent Holdings Limited | | | 4.0% | |
Zomato Limited | | | 3.8% | |
Bajaj Finance Limited | | | 3.3% | |
Trent Limited | | | 3.0% | |
Alibaba Group Holding Limited | | | 2.3% | |
Jio Financial Services Limited | | | 2.3% | |
Godrej Consumer Products Limited | | | 2.2% | |
| |
| | | | 38.5% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron New Asia Fund1 increased 5.54%, slightly underperforming the MSCI AC Asia ex Japan Index, which increased 5.98%.
Baron New Asia Fund is a diversified fund that invests primarily in companies of all sizes with significant growth potential located in Asia. The Fund emphasizes securities in developing Asian markets, including frontier markets. Under normal circumstances, the Fund invests 80% of its net assets in companies located in Asia. The Fund seeks to invest in companies with significant long-term growth prospects and purchase them at prices we believe to be favorable. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
For much of 2023, Asian emerging market (EM) equities were relatively volatile as the market reacted to macroeconomic factors including China’s slow recovery after the lifting of its COVID lockdown, central bank rate tightening programs, and continued U.S. dollar strength. After hitting a low for the year in late October, the market abruptly pivoted after the U.S. Federal Reserve signaled it would likely cut rates sooner and in larger magnitude than anticipated. While Asian EM cheered the news, we believe this event also foreshadows the end of the 14-year U.S. dollar bull market and will usher in a cycle of outperformance by non-U.S. equities.
India, Taiwan, and Korea were the top contributors. China and Hong Kong detracted the most.
Information Technology, Consumer Discretionary, and Communication Services contributed the most. Consumer Staples detracted the most.
Taiwan Semiconductor Manufacturing Company Limited was the top contributor. Shares rose due to investor expectations for a cyclical recovery heading into 2024 and significant demand for artificial intelligence chips. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT, will allow it to sustain double-digit earnings growth over the next several years.
Glodon Company Limited, a leading Chinese construction software provider, detracted the most due to macroeconomic headwinds and relatively slow project starts for property and infrastructure. We retain conviction in Glodon, as we believe the company is uniquely positioned to benefit from increasing software penetration in the construction industry, which is the least digitized industry in China.
Recent Asian EM performance and sentiment has been pressured by skepticism toward China. While inconsistent policy signals and geopolitical developments have been frustrating, we believe China’s policymakers have the tools and capacity to engineer a recovery, and we remain cautiously optimistic that incremental efforts will render current valuation and skepticism as too conservative.
We expect the Asian EM in general, and particularly those economies and companies most geared to the improvement in domestic growth, consumption, and investment that we expect to result from declining interest rates and appreciating currencies, to benefit most from this inflection point in financial conditions and capital flows. We anticipate a sustainable period of enhanced relative earnings growth potential in Asian EM — essentially a mean reversion or mirror image of the past several years.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
21
| | |
| Baron Technology Fund (Unaudited) | | December 31, 2023 |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON TECHNOLOGY FUND (RETAIL SHARES)
INRELATIONTOTHE MSCI ACWI INFORMATION TECHNOLOGY INDEXANDTHE S&P 500 INDEX
| | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Since
Inception
December 31,
2021^ | |
Baron Technology Fund — Retail Shares1,2 | | | 62.41% | | | | (4.97)% | |
Baron Technology Fund — Institutional Shares1,2 | | | 63.38% | | | | (4.61)% | |
Baron Technology Fund — R6 Shares1,2 | | | 63.02% | | | | (4.71)% | |
MSCI ACWI Information Technology Index | | | 51.02% | | | | 2.03% | |
S&P 500 Index1 | | | 26.29% | | | | 1.69% | |
| ^ | Commencement of investment operations was January 3, 2022. |
| 1 | The MSCI ACWI Information Technology Index Net (USD) is designed to measure large- and mid-cap securities across 23 Developed Markets (DM) countries and 24 Emerging Markets (EM) countries. All securities in the index are classified in the Information Technology sector as per the Global Industry Classification Standard (GICS®). MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. The MSCI ACWI Information Technology Index Net (USD) and the Fund include reinvestment of dividends, net of foreign withholding taxes, while the S&P 500 Index includes reinvestment of dividends before taxes. Reinvestment of dividends positively impacts performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser waives and/or reimburses certain Fund expenses pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
22
| | |
| December 31, 2023 (Unaudited) | | Baron Technology Fund |
TOP TEN HOLDINGSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets | |
Microsoft Corporation | | | 10.0% | |
NVIDIA Corporation | | | 9.3% | |
Amazon.com, Inc. | | | 7.9% | |
Tesla, Inc. | | | 4.9% | |
Advanced Micro Devices, Inc. | | | 4.4% | |
Apple Inc. | | | 4.3% | |
Lam Research Corporation | | | 3.0% | |
Meta Platforms, Inc. | | | 3.0% | |
Intuit Inc. | | | 3.0% | |
The Trade Desk | | | 2.8% | |
| |
| | | | 52.5% | |
SECTOR BREAKDOWNASOF DECEMBER 31, 2023*†
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron Technology Fund1 increased 62.41%, outperforming the MSCI ACWI Information Technology Index (the Index), which increased 51.02%.
Baron Technology Fund is a non-diversified fund that invests primarily in companies of any market capitalization that we believe have durable growth potential from the development, advancement, and/or use of technology. The Fund invests principally in U.S. securities but may invest up to 35% in non-U.S. securities. The Fund seeks to invest in companies with significant long-term growth prospects and purchase them at prices we believe to be favorable. Of course, there can be no guarantee that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief after a brutal 2022, with the Index recapturing all its losses from the prior year. Brushing aside macro concerns including the Federal Reserve’s (the Fed) continuation of its historical tightening cycle, inflation data — although falling — that hovered above the Fed’s target, the recession debate, and geopolitical uncertainties, the Index climbed through the first half of 2023. After a third-quarter dip driven largely by concerns that rates would stay “higher for longer,” lower inflation data and a shift in focus to rate cuts prompted a bull run in the last two months. Most of the gains in the broad market indexes during the year came from the so-called Magnificent Seven mega-cap technology stocks, which together were up 76% within the S&P 500 Index, driven, in part, by excitement surrounding their ability to gain from widespread adoption of artificial intelligence (AI).
Semiconductors & semiconductor equipment, software, and broadline retail contributed the most. There were no sectors that meaningfully detracted.
Semiconductor company NVIDIA Corporation was the top contributor. NVIDIA is seeing the fruits of its nearly 20-year investment in AI and accelerated computing, with the stock finishing 2023 up over 200%, driven by unprecedented demand acceleration for generative AI (GenAI). While the opportunity within the data center installed base is already large at roughly $1 trillion, the pace of innovation in AI in general, and GenAI in particular, should drive significant expansion in the addressable market.
Endava plc, which provides outsourced software development to businesses, was the top detractor due to a pullback in customer demand in the wake of multiple bank failures. Management reduced financial guidance to reflect greater macroeconomic uncertainty and lower revenues from private equity-backed companies, about 20% of the business. We exited our investment.
We invest for the long term in technology businesses that we believe will benefit from secular growth trends, durable competitive advantages, and best-in-class management. We remain optimistic that this approach will generate strong long-term performance regardless of the economic climate.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (GICS), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
23
| | |
| Baron Partners Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (101.84%) | |
| Communication Services (2.88%) | |
| | | | Alternative Carriers (2.25%) | | | | | | | | |
| | 3,800,000 | | | Iridium Communications, Inc.6 | | $ | 121,586,269 | | | $ | 156,408,000 | |
| | | |
| | | | Movies & Entertainment (0.63%) | | | | | | | | |
| | 230,000 | | | Spotify Technology SA1,2,6 | | | 37,473,451 | | | | 43,219,300 | |
| | | | | | | | | | | | |
| | Total Communication Services | | | 159,059,720 | | | | 199,627,300 | |
| | | | | | | | | | | | |
|
| Consumer Discretionary (56.51%) | |
| | | | Apparel, Accessories & Luxury Goods (0.50%) | | | | | | | | |
| | 5,020,000 | | | Figs, Inc., Cl A1 | | | 48,282,143 | | | | 34,889,000 | |
| | | |
| | | | Automobile Manufacturers (43.46%) | | | | | | | | |
| | 12,147,500 | | | Tesla, Inc.1,5 | | | 183,484,451 | | | | 3,018,410,800 | |
| | | |
| | | | Casinos & Gaming (1.39%) | | | | | | | | |
| | 1,810,000 | | | Red Rock Resorts, Inc., Cl A6 | | | 63,666,953 | | | | 96,527,300 | |
| | | |
| | | | Footwear (1.21%) | | | | | | | | |
| | 1,725,000 | | | Birkenstock Holding PLC1,2 | | | 78,199,680 | | | | 84,059,250 | |
| | | |
| | | | Hotels, Resorts & Cruise Lines (6.24%) | | | | | | | | |
| | 3,325,000 | | | Hyatt Hotels Corp., Cl A | | | 115,871,182 | | | | 433,613,250 | |
| | | |
| | | | Leisure Facilities (3.71%) | | | | | | | | |
| | 1,205,000 | | | Vail Resorts, Inc.6 | | | 99,015,011 | | | | 257,231,350 | |
| | | | | | | | | | | | |
| | Total Consumer Discretionary | | | 588,519,420 | | | | 3,924,730,950 | |
| | | | | | | | | | | | |
|
| Financials (18.96%) | |
| | | | Financial Exchanges & Data (7.05%) | | | | | | | | |
| | 730,000 | | | FactSet Research Systems, Inc.6 | | | 59,424,553 | | | | 348,246,500 | |
| | 250,000 | | | MSCI, Inc.6 | | | 88,967,758 | | | | 141,412,500 | |
| | | | | | | | | | | | |
| | | | | | | 148,392,311 | | | | 489,659,000 | |
| | | |
| | | | Investment Banking & Brokerage (4.96%) | | | | | | | | |
| | 5,000,000 | | | The Charles Schwab Corp.6 | | | 148,569,984 | | | | 344,000,000 | |
| | | |
| | | | Property & Casualty Insurance (6.95%) | | | | | | | | |
| | 6,500,000 | | | Arch Capital Group Ltd.1,2,6 | | | 29,781,178 | | | | 482,755,000 | |
| | | | | | | | | | | | |
| | Total Financials | | | 326,743,473 | | | | 1,316,414,000 | |
| | | | | | | | | | | | |
|
| Health Care (6.39%) | |
| | | | Health Care Equipment (6.39%) | | | | | | | | |
| | 800,000 | | | IDEXX Laboratories, Inc.1,6 | | | 35,048,047 | | | | 444,040,000 | |
| | | | | | | | | | | | |
|
| Industrials (0.56%) | |
| | | | Aerospace & Defense (0.56%) | | | | | | | | |
| | 125,625 | | | HEICO Corp.6 | | | 9,632,520 | | | | 22,470,544 | |
| | 116,875 | | | HEICO Corp., Cl A6 | | | 7,586,429 | | | | 16,647,675 | |
| | | | | | | | | | | | |
| | Total Industrials | | | 17,218,949 | | | | 39,118,219 | |
| | | | | | | | | | | | |
|
| Information Technology (6.00%) | |
| | | | Application Software (1.45%) | | | | | | | | |
| | 925,000 | | | Guidewire Software, Inc. 1,6 | | | 75,206,412 | | | | 100,862,000 | |
| | | |
| | | | IT Consulting & Other Services (4.55%) | | | | | | | | |
| | 700,000 | | | Gartner, Inc.1,6 | | | 83,980,674 | | | | 315,777,000 | |
| | | | | | | | | | | | |
| | Total Information Technology | | | 159,187,086 | | | | 416,639,000 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| Real Estate (10.54%) | |
| | | | Other Specialized REITs (1.29%) | | | | | | | | |
| | 1,819,296 | | | Gaming and Leisure
Properties, Inc.6 | | $ | 57,296,129 | | | $ | 89,782,257 | |
| | | |
| | | | Real Estate Services (9.25%) | | | | | | | | |
| | 7,350,000 | | | CoStar Group, Inc.1,6 | | | 98,974,400 | | | | 642,316,500 | |
| | | | | | | | | | | | |
| | Total Real Estate | | | 156,270,529 | | | | 732,098,757 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 1,442,047,224 | | | | 7,072,668,226 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Private Common Stocks (4.38%) | |
| Communication Services (0.86%) | |
| | | | Interactive Media & Services (0.23%) | | | | | | | | |
| | 600,000 | | | X Holdings I, Inc., Cl A1,3,4,8 | | | 60,000,000 | | | | 16,392,000 | |
| | | |
| | | | Movies & Entertainment (0.63%) | | | | | | | | |
| | 197,613 | | | StubHub Holdings, Inc., Cl A1,3,4,8 | | | 50,000,041 | | | | 43,648,760 | |
| | | | | | | | | | | | |
| | Total Communication Services | | | 110,000,041 | | | | 60,040,760 | |
| | | | | | | | | | | | |
|
| Industrials (3.52%) | |
| | | | Aerospace & Defense (3.52%) | | | | | | | | |
| | 2,216,310 | | | Space Exploration
Technologies Corp., Cl A1,3,4,8 | | | 29,920,185 | | | | 214,982,070 | |
| | 302,210 | | | Space Exploration
Technologies Corp., Cl C1,3,4,8 | | | 4,079,835 | | | | 29,314,370 | |
| | | | | | | | | | | | |
| | Total Industrials | | | 34,000,020 | | | | 244,296,440 | |
| | | | | | | | | | | | |
| | Total Private Common Stocks | | | 144,000,061 | | | | 304,337,200 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Private Convertible Preferred Stocks (0.11%) | |
| Industrials (0.11%) | |
| | | | Electrical Components & Equipment (0.11%) | | | | | | | | |
| | 21,213,656 | | | Northvolt AB, Series E2 (Sweden)1,3,4,8 | | | 7,843,621 | | | | 7,361,160 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Private Preferred Stocks (7.74%) | |
| Industrials (7.74%) | |
| | | | Aerospace & Defense (7.74%) | | | | | | | | |
| | 311,111 | | | Space Exploration
Technologies Corp., Cl H1,3,4,8 | | | 41,999,985 | | | | 301,777,670 | |
| | 131,657 | | | Space Exploration
Technologies Corp., Cl I1,3,4,8 | | | 22,250,032 | | | | 127,707,290 | |
| | 111,111 | | | Space Exploration
Technologies Corp., Series N1,3,4,8 | | | 29,999,970 | | | | 107,777,670 | |
| | | | | | | | | | | | |
| | Total Private Preferred Stocks | | | 94,249,987 | | | | 537,262,630 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | |
| 24 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Partners Fund |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | | | | | | | | | |
| Principal Amount | | Cost | | | Value | |
| Short Term Investments (0.01%) | |
| | $664,989 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $665,348; (Fully Collateralized by $697,300 U.S. Treasury Note, 3.50% due 2/15/2033 Market value -$678,342)7 | | $ | 664,989 | | | $ | 664,989 | |
| | | | | | | | | | | | |
| | Total Investments (114.08%) | | | 1,688,805,882 | | | | 7,922,294,205 | |
| | | | | | | | | | | | |
| | Liabilities Less Cash and Other Assets (-14.08%) | | | | (977,507,143 | ) |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 6,944,787,062 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 3 | At December 31, 2023, the market value of restricted and fair valued securities amounted to $848,960,990 or 12.22% of net assets. These securities are not deemed liquid. See Note 6 regarding Restricted Securities. |
| 4 | The Adviser has reclassified/classified certain securities in or out of this sub-industry. Such reclassifications/classifications are not supported by S&P or MSCI (unaudited). |
| 5 | Investors in the Fund may view Tesla, Inc.’s financial statements on the EDGAR website of the U.S. Securities and Exchange Commission by going to https://www.sec.gov/cgi-bin/browse-edgar?CIK=1318605&owner=exclude. Please note that the Fund is not responsible for Tesla’s financial statements and can provide no assurances as to their accuracy or completeness. |
| 6 | All or a portion of this security is pledged with the custodian in connection with the Fund’s loans payable outstanding. At December 31, 2023, the total market value of pledged securities amounted to $1,948,409,382 or 28.06% of net assets. |
| 7 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| 8 | Level 3 security. See Note 7 regarding Fair Value Measurements. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 25 |
| | |
| Baron Focused Growth Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (90.04%) | |
| Communication Services (7.70%) | |
| | | | Alternative Carriers (2.25%) | | | | | | | | |
| | 730,000 | | | Iridium Communications, Inc. | | $ | 16,496,669 | | | $ | 30,046,800 | |
| | | |
| | | | Movies & Entertainment (5.45%) | | | | | | | | |
| | 1,160,000 | | | Manchester United PLC, Cl A1,2 | | | 24,231,713 | | | | 23,640,800 | |
| | 262,000 | | | Spotify Technology SA1,2 | | | 35,016,218 | | | | 49,232,420 | |
| | | | | | | | | | | | |
| | | | | | | 58,892,494 | | | | 72,873,220 | |
| | | | | | | | | | | | |
| | Total Communication Services | | | 75,744,600 | | | | 102,920,020 | |
| | | | | | | | | | | | |
|
| Consumer Discretionary (40.86%) | |
| | | | Apparel, Accessories & Luxury Goods (3.00%) | | | | | | | | |
| | 5,765,000 | | | Figs, Inc., Cl A1 | | | 49,696,759 | | | | 40,066,750 | |
| | | |
| | | | Automobile Manufacturers (11.44%) | | | | | | | | |
| | 615,000 | | | Tesla, Inc.1 | | | 8,168,271 | | | | 152,815,200 | |
| | | |
| | | | Casinos & Gaming (6.47%) | | | | | | | | |
| | 275,000 | | | Las Vegas Sands Corp. | | | 12,100,000 | | | | 13,532,750 | |
| | 507,900 | | | MGM Resorts International1 | | | 21,704,038 | | | | 22,692,972 | |
| | 942,100 | | | Red Rock Resorts, Inc., Cl A | | | 31,998,332 | | | | 50,242,193 | |
| | | | | | | | | | | | |
| | | | | | | 65,802,370 | | | | 86,467,915 | |
| | | | | | | | | | | | |
| | | |
| | | | Footwear (4.47%) | | | | | | | | |
| | 435,000 | | | Birkenstock Holding PLC1,2 | | | 19,795,221 | | | | 21,197,550 | |
| | 1,425,000 | | | On Holding AG, Cl A1,2 | | | 40,071,549 | | | | 38,432,250 | |
| | | | | | | | | | | | |
| | | | | | | 59,866,770 | | | | 59,629,800 | |
| | | | | | | | | | | | |
| | | |
| | | | Hotels, Resorts & Cruise Lines (7.89%) | | | | | | | | |
| | 355,000 | | | Choice Hotels International, Inc. | | | 28,040,597 | | | | 40,221,500 | |
| | 500,000 | | | Hyatt Hotels Corp., Cl A | | | 24,424,809 | | | | 65,205,000 | |
| | | | | | | | | | | | |
| | | | | | | 52,465,406 | | | | 105,426,500 | |
| | | | | | | | | | | | |
| | | |
| | | | Leisure Facilities (4.32%) | | | | | | | | |
| | 270,000 | | | Vail Resorts, Inc. | | | 45,521,428 | | | | 57,636,900 | |
| | | |
| | | | Restaurants (3.27%) | | | | | | | | |
| | 2,895,000 | | | Krispy Kreme, Inc. | | | 41,020,175 | | | | 43,685,550 | |
| | | | | | | | | | | | |
| | Total Consumer Discretionary | | | 322,541,179 | | | | 545,728,615 | |
| | | | | | | | | | | | |
|
| Financials (16.69%) | |
| | | | Financial Exchanges & Data (8.28%) | | | | | | | | |
| | 125,000 | | | FactSet Research Systems, Inc. | | | 25,848,440 | | | | 59,631,250 | |
| | 90,000 | | | MSCI, Inc. | | | 43,089,524 | | | | 50,908,500 | |
| | | | | | | | | | | | |
| | | | | | | 68,937,964 | | | | 110,539,750 | |
| | | | | | | | | | | | |
| | | |
| | | | Investment Banking & Brokerage (3.41%) | | | | | | | | |
| | 427,500 | | | Interactive Brokers Group, Inc., Cl A | | | 34,188,678 | | | | 35,439,750 | |
| | 250,000 | | | Jefferies Financial Group, Inc. | | | 7,732,070 | | | | 10,102,500 | |
| | | | | | | | | | | | |
| | | | | | | 41,920,748 | | | | 45,542,250 | |
| | | | | | | | | | | | |
| | | |
| | | | Property & Casualty Insurance (5.00%) | | | | | | | | |
| | 900,000 | | | Arch Capital Group Ltd.1,2 | | | 25,104,585 | | | | 66,843,000 | |
| | | | | | | | | | | | |
| | Total Financials | | | 135,963,297 | | | | 222,925,000 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| Health Care (5.08%) | |
| | | | Biotechnology (1.58%) | | | | | | | | |
| | 200,000 | | | BioNTech SE, ADR1,2 | | $ | 20,929,351 | | | $ | 21,108,000 | |
| | | |
| | | | Health Care Equipment (1.41%) | | | | | | | | |
| | 34,000 | | | IDEXX Laboratories, Inc.1 | | | 15,205,826 | | | | 18,871,700 | |
| | | |
| | | | Life Sciences Tools & Services (2.09%) | | | | | | | | |
| | 200,000 | | | Illumina, Inc.1 | | | 22,341,835 | | | | 27,848,000 | |
| | | | | | | | | | | | |
| | Total Health Care | | | 58,477,012 | | | | 67,827,700 | |
| | | | | | | | | | | | |
|
| Industrials (2.86%) | |
| | | | Research & Consulting Services (2.86%) | | | | | | | | |
| | 160,000 | | | Verisk Analytics, Inc. | | | 28,339,398 | | | | 38,217,600 | |
| | | | | | | | | | | | |
|
| Information Technology (8.92%) | |
| | | | Application Software (6.88%) | | | | | | | | |
| | 95,000 | | | ANSYS, Inc.1 | | | 24,133,643 | | | | 34,473,600 | |
| | 526,300 | | | Guidewire Software, Inc.1 | | | 48,175,978 | | | | 57,387,752 | |
| | | | | | | | | | | | |
| | | | | | | 72,309,621 | | | | 91,861,352 | |
| | | | | | | | | | | | |
| | | |
| | | | Internet Services & Infrastructure (2.04%) | | | | | | | | |
| | 350,000 | | | Shopify, Inc., Cl A1,2 | | | 15,502,934 | | | | 27,265,000 | |
| | | | | | | | | | | | |
| | Total Information Technology | | | 87,812,555 | | | | 119,126,352 | |
| | | | | | | | | | | | |
|
| Real Estate (7.93%) | |
| | | | Office REITs (3.14%) | | | | | | | | |
| | 165,000 | | | Alexandria Real Estate Equities, Inc. | | | 23,085,132 | | | | 20,917,050 | |
| | 1,450,000 | | | Douglas Emmett, Inc. | | | 20,931,980 | | | | 21,025,000 | |
| | | | | | | | | | | | |
| | | | | | | 44,017,112 | | | | 41,942,050 | |
| | | | | | | | | | | | |
| | | |
| | | | Real Estate Services (4.16%) | | | | | | | | |
| | 635,000 | | | CoStar Group, Inc.1 | | | 14,752,834 | | | | 55,492,650 | |
| | | |
| | | | Single-Family Residential REITs (0.63%) | | | | | | | | |
| | 235,000 | | | American Homes 4 Rent, Cl A | | | 5,062,679 | | | | 8,450,600 | |
| | | | | | | | | | | | |
| | Total Real Estate | | | 63,832,625 | | | | 105,885,300 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 772,710,666 | | | | 1,202,630,587 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Private Common Stocks (5.61%) | |
| Industrials (5.61%) | |
| | | | Aerospace & Defense (5.61%) | | | | | | | | |
| | 629,570 | | | Space Exploration
Technologies Corp., Cl A1,3,4,6 | | | 26,390,845 | | | | 61,068,290 | |
| | 143,170 | | | Space Exploration
Technologies Corp., Cl C1,3,4,6 | | | 6,808,820 | | | | 13,887,490 | |
| | | | | | | | | | | | |
| | Total Private Common Stocks | | | 33,199,665 | | | | 74,955,780 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | |
| 26 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Focused Growth Fund |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Private Preferred Stocks (3.83%) | |
| Industrials (3.83%) | |
| | | | Aerospace & Defense (3.83%) | | | | | | | | |
| | 29,630 | | | Space Exploration
Technologies Corp., Cl H1,3,4,6 | | $ | 4,000,050 | | | $ | 28,741,100 | |
| | 1,479 | | | Space Exploration
Technologies Corp., Cl I1,3,4,6 | | | 249,951 | | | | 1,434,630 | |
| | 12,346 | | | Space Exploration
Technologies Corp., Series K1,3,4,6 | | | 10,000,260 | | | | 11,975,620 | |
| | 9,259 | | | Space Exploration
Technologies Corp., Series N1,3,4,6 | | | 2,499,930 | | | | 8,981,230 | |
| | | | | | | | | | | | |
| | Total Private Preferred Stocks | | | 16,750,191 | | | | 51,132,580 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | |
| Principal Amount | | | | | | |
| Short Term Investments (0.39%) | |
| | $5,193,277 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $5,196,075; (Fully Collateralized by $3,386,200 U.S. Treasury Note, 4.625% due 11/15/2026 Market value - $3,457,511 and Fully Collateralized by $1,859,000 U.S. Treasury Note, 3.50% due 4/30/2028 Market value - $1,839,701)5 | | | 5,193,277 | | | | 5,193,277 | |
| | | | | | | | | | | | |
| | Total Investments (99.87%) | | $ | 827,853,799 | | | | 1,333,912,224 | |
| | | | | | | | | | | | |
| | Cash and Other Assets Less Liabilities (0.13%) | | | | 1,781,991 | |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 1,335,694,215 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 3 | At December 31, 2023, the market value of restricted and fair valued securities amounted to $126,088,360 or 9.44% of net assets. These securities are not deemed liquid. See Note 6 regarding Restricted Securities. |
| 4 | The Adviser has reclassified/classified certain securities in or out of this sub-industry. Such reclassifications/classifications are not supported by S&P or MSCI (unaudited). |
| 5 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| 6 | Level 3 security. See Note 7 regarding Fair Value Measurements. |
| ADR | American Depositary Receipt. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 27 |
| | |
| Baron International Growth Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (96.10%) | |
| Brazil (4.59%) | |
| | 215,252 | | | Afya Ltd., Cl A1 | | $ | 3,408,199 | | | $ | 4,720,476 | |
| | 1,085,886 | | | B3 S.A. - Brasil, Bolsa, Balcao3 | | | 2,904,509 | | | | 3,248,938 | |
| | 286,910 | | | Localiza Rent a Car SA3 | | | 3,625,722 | | | | 3,756,454 | |
| | 241,101 | | | NU Holdings Ltd., Cl A1 | | | 2,010,651 | | | | 2,008,371 | |
| | 580,003 | | | Suzano SA3 | | | 5,311,419 | | | | 6,604,976 | |
| | 121,975 | | | XP, Inc., Cl A | | | 1,790,071 | | | | 3,179,888 | |
| | | | | | | | | | | | |
| | Total Brazil | | | 19,050,571 | | | | 23,519,103 | |
| | | | | | | | | | | | |
| Canada (3.36%) | |
| | 86,392 | | | Agnico Eagle Mines Ltd. | | | 4,223,660 | | | | 4,738,601 | |
| | 5,029 | | | Constellation Software, Inc. | | | 370,283 | | | | 12,468,679 | |
| | | | | | | | | | | | |
| | Total Canada | | | 4,593,943 | | | | 17,207,280 | |
| | | | | | | | | | | | |
| China (5.88%) | |
| | 34,856 | | | Alibaba Group Holding Limited, ADR | | | 3,060,397 | | | | 2,701,689 | |
| | 36,968 | | | Baidu, Inc., ADR1 | | | 4,406,163 | | | | 4,402,519 | |
| | 423,027 | | | Full Truck Alliance Co. Ltd., ADR1 | | | 2,884,473 | | | | 2,965,419 | |
| | 126,286 | | | Jiangsu Hengli Hydraulic Co. Ltd., Cl A3 | | | 1,055,356 | | | | 973,894 | |
| | 136,349 | | | Kanzhun Ltd., ADR1 | | | 2,277,079 | | | | 2,264,757 | |
| | 1,644,616 | | | Kingdee International Software
Group Co. Ltd.1,3 | | | 1,430,584 | | | | 2,400,831 | |
| | 345,371 | | | Kingsoft Corp. Ltd.3 | | | 1,163,785 | | | | 1,067,688 | |
| | 345,129 | | | Lufax Holding Ltd., ADR | | | 2,050,617 | | | | 1,059,545 | |
| | 135,081 | | | Midea Group Co., Ltd., Cl A3 | | | 792,942 | | | | 1,040,819 | |
| | 13,401 | | | PDD Holdings, Inc., ADR1 | | | 1,946,423 | | | | 1,960,700 | |
| | 81,615 | | | Tencent Holdings Limited3 | | | 2,299,777 | | | | 3,081,362 | |
| | 68,371 | | | Tencent Holdings Limited, ADR | | | 2,939,121 | | | | 2,583,740 | |
| | 32,558 | | | Yum China Holdings, Inc. | | | 1,578,978 | | | | 1,381,436 | |
| | 81,884 | | | Zai Lab Limited, ADR1 | | | 2,030,968 | | | | 2,237,890 | |
| | | | | | | | | | | | |
| | Total China | | | 29,916,663 | | | | 30,122,289 | |
| | | | | | | | | | | | |
| Denmark (1.98%) | |
| | 138,945 | | | Genmab A/S, ADR1 | | | 5,457,241 | | | | 4,424,009 | |
| | 55,247 | | | Novo Nordisk AS, ADR | | | 5,466,621 | | | | 5,715,302 | |
| | | | | | | | | | | | |
| | Total Denmark | | | 10,923,862 | | | | 10,139,311 | |
| | | | | | | | | | | | |
| France (7.29%) | |
| | 128,143 | | | BNP Paribas S.A.3 | | | 5,087,944 | | | | 8,898,975 | |
| | 109,345 | | | Eurofins Scientific SE3 | | | 3,109,934 | | | | 7,132,838 | |
| | 7,407 | | | LVMH Moët Hennessy Louis Vuitton SE3 | | | 2,053,761 | | | | 6,018,460 | |
| | 46,201 | | | Pernod Ricard SA3 | | | 8,892,285 | | | | 8,164,724 | |
| | 252,654 | | | Waga Energy SA1,3 | | | 7,313,238 | | | | 7,105,433 | |
| | | | | | | | | | | | |
| | Total France | | | 26,457,162 | | | | 37,320,430 | |
| | | | | | | | | | | | |
| Germany (2.89%) | |
| | 139,879 | | | Befesa SA, 144A3 | | | 5,754,933 | | | | 5,424,019 | |
| | 36,009 | | | Birkenstock Holding PLC1 | | | 1,656,414 | | | | 1,754,719 | |
| | 69,378 | | | Symrise AG3 | | | 6,165,182 | | | | 7,624,331 | |
| | | | | | | | | | | | |
| | Total Germany | | | 13,576,529 | | | | 14,803,069 | |
| | | | | | | | | | | | |
| Hong Kong (0.63%) | |
| | 269,276 | | | Techtronic Industries Co. Ltd.3 | | | 2,258,335 | | | | 3,208,446 | |
| | | | | | | | | | | | |
| India (9.48%) | |
| | 59,634 | | | Bajaj Finance Limited3 | | | 2,842,116 | | | | 5,247,273 | |
| | 664,810 | | | Bharti Airtel Ltd. PP3 | | | 3,737,072 | | | | 5,091,865 | |
| | 241,420 | | | Godrej Consumer Products Ltd.3 | | | 3,010,886 | | | | 3,280,623 | |
| | 161,750 | | | Godrej Properties Ltd.1,3 | | | 1,944,203 | | | | 3,909,826 | |
| | 206,686 | | | HDFC Bank Ltd.3 | | | 3,323,760 | | | | 4,232,107 | |
| | 588,284 | | | Jio Financial Services Ltd.1,3 | | | 1,454,072 | | | | 1,644,705 | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| India (continued) | |
| | 2,458,395 | | | JM Financial Limited3 | | $ | 2,893,665 | | | $ | 2,901,874 | |
| | 17,207 | | | Kaynes Technology India Ltd.1,3 | | | 518,938 | | | | 539,557 | |
| | 231,007 | | | Max Financial Services Ltd.1,3 | | | 1,504,024 | | | | 2,647,699 | |
| | 331,492 | | | Max Healthcare Institute Ltd. | | | 2,286,496 | | | | 2,733,760 | |
| | 688,913 | | | Nippon Life India Asset
Management Ltd., 144A3 | | | 2,429,190 | | | | 3,705,845 | |
| | 197,113 | | | Reliance Industries Limited3 | | | 3,658,739 | | | | 6,117,982 | |
| | 117,850 | | | Tata Communications Ltd.3 | | | 2,279,053 | | | | 2,505,993 | |
| | 108,335 | | | Trent Ltd.3 | | | 2,089,438 | | | | 3,975,064 | |
| | | | | | | | | | | | |
| | Total India | | | 33,971,652 | | | | 48,534,173 | |
| | | | | | | | | | | | |
| Ireland (0.94%) | |
| | 527,750 | | | Bank of Ireland Group PLC3 | | | 4,003,943 | | | | 4,791,151 | |
| | | | | | | | | | | | |
| Israel (2.91%) | |
| | 13,221 | | | CyberArk Software Ltd.1 | | | 2,308,836 | | | | 2,896,060 | |
| | 157,416 | | | Oddity Tech Ltd.1 | | | 5,550,164 | | | | 7,324,567 | |
| | 350,062 | | | Taboola.com Ltd.1 | | | 2,199,917 | | | | 1,515,768 | |
| | 25,534 | | | Wix.com Ltd.1 | | | 1,346,574 | | | | 3,141,193 | |
| | | | | | | | | | | | |
| | Total Israel | | | 11,405,491 | | | | 14,877,588 | |
| | | | | | | | | | | | |
| Italy (0.89%) | |
| | 167,130 | | | Stevanato Group SpA | | | 3,496,452 | | | | 4,560,978 | |
| | | | | | | | | | | | |
| Japan (13.39%) | |
| | 137,747 | | | Japan Airport Terminal Co. Ltd.3 | | | 5,802,383 | | | | 6,060,146 | |
| | 304,177 | | | Japan Exchange Group, Inc.3 | | | 5,769,989 | | | | 6,419,804 | |
| | 14,444 | | | Keyence Corporation3 | | | 3,911,650 | | | | 6,346,062 | |
| | 1,893,668 | | | LY Corp. (formerly,
Z Holdings Corporation)3 | | | 7,424,782 | | | | 6,696,543 | |
| | 824,897 | | | Mitsubishi UFJ Financial Group, Inc., ADR | | | 6,040,571 | | | | 7,102,363 | |
| | 105,520 | | | Okamoto Industries, Inc.3 | | | 4,831,807 | | | | 3,715,770 | |
| | 104,900 | | | Recruit Holdings Co, Ltd.3 | | | 2,063,271 | | | | 4,385,986 | |
| | 477,759 | | | Renesas Electronics Corp.1,3 | | | 5,843,989 | | | | 8,542,791 | |
| | 272,300 | | | SMS Co. Ltd.3 | | | 7,612,593 | | | | 5,582,598 | |
| | 143,233 | | | Sumitomo Mitsui Financial Group, Inc.3 | | | 6,253,213 | | | | 6,969,689 | |
| | 37,895 | | | Tokyo Electron Limited3 | | | 3,406,692 | | | | 6,735,452 | |
| | | | | | | | | | | | |
| | Total Japan | | | 58,960,940 | | | | 68,557,204 | |
| | | | | | | | | | | | |
| Korea, Republic of (3.91%) | |
| | 213,291 | | | Coupang, Inc., Cl A1 | | | 3,007,827 | | | | 3,453,181 | |
| | 33,975 | | | HD Hyundai Heavy Industries Co. Ltd.1,3 | | | 3,136,372 | | | | 3,389,200 | |
| | 72,276 | | | HD Korea Shipbuilding & Offshore Engineering Co. Ltd.3 | | | 5,789,663 | | | | 6,759,953 | |
| | 105,369 | | | Samsung Electronics Co., Ltd.3 | | | 5,779,735 | | | | 6,395,560 | |
| | | | | | | | | | | | |
| | Total Korea, Republic of | | | 17,713,597 | | | | 19,997,894 | |
| | | | | | | | | | | | |
| Mexico (0.91%) | |
| | 833,273 | | | Grupo Mexico S.A.B. de C.V., Series B | | | 2,202,834 | | | | 4,631,312 | |
| | | | | | | | | | | | |
| Netherlands (6.50%) | |
| | 225,093 | | | AMG Critical Materials NV3 | | | 6,705,228 | | | | 5,681,377 | |
| | 31,042 | | | argenx SE, ADR1 | | | 2,034,287 | | | | 11,809,308 | |
| | 66,691 | | | DSM-Firmenich AG3 | | | 9,351,935 | | | | 6,782,036 | |
| | 76,774 | | | Prosus NV | | | 2,693,802 | | | | 2,287,105 | |
| | 234,606 | | | Universal Music Group NV3 | | | 4,984,097 | | | | 6,697,325 | |
| | | | | | | | | | | | |
| | Total Netherlands | | | 25,769,349 | | | | 33,257,151 | |
| | | | | | | | | | | | |
| Norway (0.62%) | |
| | 2,387,346 | | | Aker Carbon Capture ASA1,3 | | | 3,918,045 | | | | 3,184,055 | |
| | | | | | | | | | | | |
| Peru (0.66%) | |
| | 22,682 | | | Credicorp, Ltd. | | | 3,219,519 | | | | 3,400,712 | |
| | | | | | | | | | | | |
| | |
| 28 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron International Growth Fund |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| Poland (3.18%) | |
| | 55,785 | | | Dino Polska SA, 144A1,3 | | $ | 4,025,150 | | | $ | 6,531,603 | |
| | 702,136 | | | InPost SA1,3 | | | 9,114,056 | | | | 9,721,406 | |
| | | | | | | | | | | | |
| | Total Poland | | | 13,139,206 | | | | 16,253,009 | |
| | | | | | | | | | | | |
| Russia (0.00%)^ | |
| | 487,800 | | | Sberbank of Russia PJSC1,2,4 | | | 1,650,983 | | | | 316 | |
| | | | | | | | | | | | |
| Spain (4.95%) | |
| | 52,997 | | | Cellnex Telecom S.A., 144A3 | | | 2,551,939 | | | | 2,086,651 | |
| | 1,597,890 | | | eDreams ODIGEO SA1,3 | | | 12,240,087 | | | | 13,525,642 | |
| | 223,364 | | | Industria de Diseno Textil, S.A.3 | | | 6,814,857 | | | | 9,746,276 | |
| | | | | | | | | | | | |
| | Total Spain | | | 21,606,883 | | | | 25,358,569 | |
| | | | | | | | | | | | |
| Sweden (1.18%) | |
| | 300,929 | | | Epiroc AB, Cl A3 | | | 4,559,848 | | | | 6,057,365 | |
| | | | | | | | | | | | |
| Switzerland (3.51%) | |
| | 134,841 | | | Clariant AG3 | | | 2,560,851 | | | | 1,992,237 | |
| | 31,051 | | | Compagnie Financiere
Richemont SA, Cl A3 | | | 3,679,974 | | | | 4,288,890 | |
| | 22,938,829 | | | Meyer Burger Technology AG1,3 | | | 9,196,109 | | | | 5,349,530 | |
| | 54,668 | | | Nestle S.A.3 | | | 5,615,400 | | | | 6,337,107 | |
| | | | | | | | | | | | |
| | Total Switzerland | | | 21,052,334 | | | | 17,967,764 | |
| | | | | | | | | | | | |
| Taiwan (2.03%) | |
| | 66,949 | | | Taiwan Semiconductor
Manufacturing Co., Ltd.3 | | | 1,230,513 | | | | 1,283,515 | |
| | 87,797 | | | Taiwan Semiconductor
Manufacturing Co., Ltd., ADR | | | 8,268,466 | | | | 9,130,888 | |
| | | | | | | | | | | | |
| | Total Taiwan | | | 9,498,979 | | | | 10,414,403 | |
| | | | | | | | | | | | |
| United Kingdom (10.95%) | |
| | 158,887 | | | AstraZeneca PLC, ADR | | | 7,322,283 | | | | 10,701,040 | |
| | 1,012,149 | | | B&M European Value Retail S.A.3 | | | 4,630,106 | | | | 7,217,078 | |
| | 544,959 | | | Ceres Power Holdings PLC1 | | | 4,216,114 | | | | 1,269,787 | |
| | 80,824 | | | Dechra Pharmaceuticals PLC3 | | | 2,533,869 | | | | 3,972,089 | |
| | 54,264 | | | Endava plc, ADR1 | | | 2,191,063 | | | | 4,224,452 | |
| | 170,217 | | | Experian plc3 | | | 3,928,940 | | | | 6,944,057 | |
| | 34,980 | | | Linde Public Limited Company3 | | | 6,288,750 | | | | 14,229,880 | |
| | 3,034,700 | | | S4 Capital PLC1,3 | | | 5,713,401 | | | | 2,062,162 | |
| | 603,982 | | | Watches of Switzerland
Group PLC, 144A1,3 | | | 5,028,229 | | | | 5,446,241 | |
| | | | | | | | | | | | |
| | Total United Kingdom | | | 41,852,755 | | | | 56,066,786 | |
| | | | | | | | | | | | |
| United States (3.47%) | |
| | 50,934 | | | Agilent Technologies, Inc. | | | 2,577,583 | | | | 7,081,354 | |
| | 144,115 | | | Arch Capital Group Ltd.1 | | | 2,899,696 | | | | 10,703,422 | |
| | | | | | | | | | | | |
| | Total United States | | | 5,477,279 | | | | 17,784,776 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 390,277,154 | | | | 492,015,134 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Rights (0.00%)^ | |
| Brazil (0.00%)^ | |
| | 1,029 | | | Localiza Rent a Car SA,
Exp. 2/5/20241 | | $ | 0 | | | $ | 4,237 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Warrants (0.01%) | |
| Canada (0.00%)^ | |
| | 5,029 | | | Constellation Software, Inc.
Exp. 3/31/2040 1,2,4 | | | 0 | | | | 0 | |
| | | | | | | | | | | | |
|
| Israel (0.01%) | |
| | 56,745 | | | Taboola.com Ltd. Exp. 6/29/20261 | | | 104,540 | | | | 22,221 | |
| | | | | | | | | | | | |
| | Total Warrants | | | 104,540 | | | | 22,221 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | |
| Principal Amount | | | | | | |
| Short Term Investments (4.13%) | |
| | $21,161,339 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $21,172,742; (Fully Collateralized by $20,948,200 U.S. Treasury Note, 4.50% due 7/15/2026 Market value - $21,584,651)3 | | | 21,161,339 | | | | 21,161,339 | |
| | | | | | | | | | | | |
| | Total Investments (100.24%) | | $ | 411,543,033 | | | | 513,202,931 | |
| | | | | | | | | | | | |
| | Liabilities Less Cash and Other Assets (-0.24%) | | | | | | | (1,242,538 | ) |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 511,960,393 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 2 | At December 31, 2023, the market value of restricted and fair valued securities amounted to $316 or less than 0.01% of net assets. These securities are not deemed liquid. See Note 6 regarding Restricted Securities. |
| 3 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| 4 | Level 3 security. See Note 7 regarding Fair Value Measurements. |
| ^ | Rounds to less than 0.01%. |
| ADR | American Depositary Receipt. |
| 144A | Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. At December 31, 2023, the market value of Rule 144A securities amounted to $23,194,359 or 4.53% of net assets. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 29 |
| | |
| Baron International Growth Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | |
Summary of Investments by Sector
as of December 31, 2023 | | Percentage of
Net Assets | |
| |
Financials | | | 15.3 | % |
| |
Industrials | | | 13.6 | |
| |
Consumer Discretionary | | | 13.6 | |
| |
Information Technology | | | 13.6 | |
| |
Health Care | | | 11.8 | |
| |
Materials | | | 10.9 | |
| |
Communication Services | | | 7.8 | |
| |
Consumer Staples | | | 6.2 | |
| |
Energy | | | 2.6 | |
| |
Real Estate | | | 0.8 | |
| |
Cash and Cash Equivalents* | | | 3.9 | |
| | | | 100.0 | %** |
| * | Includes short term investments, other assets and liabilities — net. |
| ** | Individual weights may not sum to 100% due to rounding. |
| | |
| 30 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Real Estate Fund |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (98.46%) | |
| Consumer Discretionary (49.24%) | |
| | | | Casinos & Gaming (15.81%) | | | | | | | | |
| | 454,750 | | | Boyd Gaming Corporation | | $ | 12,612,725 | | | $ | 28,471,898 | |
| | 1,040,700 | | | Caesars Entertainment, Inc.1 | | | 48,229,355 | | | | 48,788,016 | |
| | 995,400 | | | Las Vegas Sands Corp. | | | 47,754,737 | | | | 48,983,634 | |
| | 1,359,656 | | | MGM Resorts International1 | | | 51,269,699 | | | | 60,749,430 | |
| | 560,340 | | | Red Rock Resorts, Inc., Cl A | | | 8,242,128 | | | | 29,882,932 | |
| | 640,250 | | | Wynn Resorts Ltd. | | | 62,125,696 | | | | 58,333,177 | |
| | | | | | | | | | | | |
| | | | | | | 230,234,340 | | | | 275,209,087 | |
| | | |
| | | | Distributors (2.18%) | | | | | | | | |
| | 95,300 | | | Pool Corp. | | | 32,454,169 | | | | 37,997,063 | |
| | | |
| | | | Home Improvement Retail (4.48%) | | | | | | | | |
| | 331,850 | | | Floor & Decor Holdings, Inc., Cl A1 | | | 24,218,988 | | | | 37,021,186 | |
| | 183,600 | | | Lowe’s Companies, Inc. | | | 35,861,937 | | | | 40,860,180 | |
| | | | | | | | | | | | |
| | | | | | | 60,080,925 | | | | 77,881,366 | |
| | | |
| | | | Homebuilding (22.58%) | | | | | | | | |
| | 624,650 | | | D.R. Horton, Inc. | | | 52,857,478 | | | | 94,934,307 | |
| | 184,450 | | | Installed Building Products, Inc. | | | 21,220,106 | | | | 33,721,149 | |
| | 614,599 | | | Lennar Corp., Cl A | | | 50,103,579 | | | | 91,599,835 | |
| | 1,680,500 | | | Toll Brothers, Inc. | | | 83,930,228 | | | | 172,738,595 | |
| | | | | | | | | | | | |
| | | | | | | 208,111,391 | | | | 392,993,886 | |
| | |
| | | | Hotels, Resorts & Cruise Lines (3.27%) | | | | | |
| | 170,300 | | | Hilton Worldwide Holdings, Inc. | | | 24,141,742 | | | | 31,009,927 | |
| | 198,700 | | | Hyatt Hotels Corp., Cl A | | | 21,443,273 | | | | 25,912,467 | |
| | | | | | | | | | | | |
| | | | | | | 45,585,015 | | | | 56,922,394 | |
| | | |
| | | | Leisure Facilities (0.92%) | | | | | | | | |
| | 75,350 | | | Vail Resorts, Inc. | | | 18,907,743 | | | | 16,084,965 | |
| | | | | | | | | | | | |
| | Total Consumer Discretionary | | | 595,373,583 | | | | 857,088,761 | |
| | | | | | | | | | | | |
|
| Financials (8.62%) | |
| | | | Asset Management & Custody Banks (8.62%) | | | | | | | | |
| | 680,700 | | | Blackstone, Inc. | | | 63,511,182 | | | | 89,117,244 | |
| | 579,906 | | | Brookfield Asset Management Ltd., Cl A2 | | | 18,566,171 | | | | 23,294,824 | |
| | 935,425 | | | Brookfield Corp., Cl A2 | | | 28,522,003 | | | | 37,529,251 | |
| | | | | | | | | | | | |
| | Total Financials | | | 110,599,356 | | | | 149,941,319 | |
| | | | | | | | | | | | |
|
| Industrials (4.42%) | |
| | | | Building Products (1.90%) | | | | | | | | |
| | 287,136 | | | Fortune Brands Innovations, Inc. | | | 16,897,382 | | | | 21,862,535 | |
| | 856,448 | | | Janus International Group, Inc.1 | | | 9,921,588 | | | | 11,176,646 | |
| | | | | | | | | | | | |
| | | | | | | 26,818,970 | | | | 33,039,181 | |
| | |
| | | | Trading Companies & Distributors (2.52%) | | | | | |
| | 270,585 | | | SiteOne Landscape Supply, Inc.1 | | | 33,136,183 | | | | 43,970,063 | |
| | | | | | | | | | | | |
| | Total Industrials | | | 59,955,153 | | | | 77,009,244 | |
| | | | | | | | | | | | |
|
| Materials (0.56%) | |
| | | | Construction Materials (0.56%) | | | | | | | | |
| | 42,750 | | | Vulcan Materials Co. | | | 4,378,591 | | | | 9,704,678 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| Real Estate (35.62%) | |
| | | | Data Center REITs (8.09%) | | | | | | | | |
| | 336,976 | | | Digital Realty Trust, Inc. | | $ | 37,083,721 | | | $ | 45,350,230 | |
| | 118,540 | | | Equinix, Inc. | | | 67,711,175 | | | | 95,470,931 | |
| | | | | | | | | | | | |
| | | | | | | 104,794,896 | | | | 140,821,161 | |
| | | |
| | | | Health Care REITs (2.47%) | | | | | | | | |
| | 477,750 | | | Welltower, Inc. | | | 36,252,739 | | | | 43,078,717 | |
| | | |
| | | | Industrial REITs (9.52%) | | | | | | | | |
| | 120,650 | | | EastGroup Properties, Inc. | | | 19,847,828 | | | | 22,144,101 | |
| | 742,400 | | | Prologis, Inc. | | | 78,273,548 | | | | 98,961,920 | |
| | 641,459 | | | Rexford Industrial Realty, Inc. | | | 32,957,112 | | | | 35,985,850 | |
| | 136,422 | | | Terreno Realty Corp. | | | 7,928,794 | | | | 8,549,567 | |
| | | | | | | | | | | | |
| | | | | | | 139,007,282 | | | | 165,641,438 | |
| | | | Multi-Family Residential REITs (1.40%) | | | | | | | | |
| | 397,375 | | | Equity Residential | | | 23,712,527 | | | | 24,303,455 | |
| | | |
| | | | Real Estate Services (9.47%) | | | | | | | | |
| | 500,850 | | | CBRE Group, Inc., Cl A1 | | | 35,482,370 | | | | 46,624,126 | |
| | 884,463 | | | CoStar Group, Inc.1 | | | 49,416,560 | | | | 77,293,222 | |
| | 216,492 | | | Jones Lang LaSalle, Inc.1 | | | 30,768,341 | | | | 40,888,844 | |
| | | | | | | | | | | | |
| | | | | | | 115,667,271 | | | | 164,806,192 | |
| | | |
| | | | Self Storage REITs (0.32%) | | | | | | | | |
| | 34,350 | | | Extra Space Storage, Inc. | | | 5,261,394 | | | | 5,507,335 | |
| | |
| | | | Single-Family Residential REITs (1.59%) | | | | | |
| | 813,200 | | | Invitation Homes, Inc. | | | 23,418,918 | | | | 27,738,252 | |
| | | |
| | | | Telecom Tower REITs (2.76%) | | | | | | | | |
| | 222,750 | | | American Tower Corp. | | | 34,372,351 | | | | 48,087,270 | |
| | | | | | | | | | | | |
| | Total Real Estate | | | 482,487,378 | | | | 619,983,820 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 1,252,794,061 | | | | 1,713,727,822 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | |
| Principal Amount | | | | | | |
| Short Term Investments (1.36%) | |
| | $23,643,399 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $23,656,140; (Fully Collateralized by 6,302,700 U.S. Treasury Note, 3.50% due 2/15/2033 Market value - $6,131,345 and Fully Collateralized by 18,173,600 U.S. Treasury Note, 3.50% due 4/30/2028 Market value - $17,984,929)3 | | | 23,643,399 | | | | 23,643,399 | |
| | | | | | | | | | | | |
| | Total Investments (99.82%) | | $ | 1,276,437,460 | | | | 1,737,371,221 | |
| | | | | | | | | | | | |
| Cash and Other Assets
Less Liabilities (0.18%) | | | | | | | 3,227,813 | |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 1,740,599,034 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 3 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 31 |
| | |
| Baron Emerging Markets Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (93.19%) | |
| Brazil (8.48%) | |
| | 1,778,866 | | | Afya Ltd., Cl A1 | | $ | 41,412,270 | | | $ | 39,010,531 | |
| | 16,440,207 | | | B3 S.A. - Brasil, Bolsa, Balcao3 | | | 40,853,887 | | | | 49,188,598 | |
| | 2,682,676 | | | Inter & Co., Inc. BDR1,3 | | | 11,037,198 | | | | 15,120,490 | |
| | 5,407,364 | | | Localiza Rent a Car SA3 | | | 43,653,401 | | | | 70,797,501 | |
| | 5,662,048 | | | NU Holdings Ltd., Cl A1 | | | 45,368,219 | | | | 47,164,860 | |
| | 509,160 | | | StoneCo Ltd., Cl A1 | | | 4,687,822 | | | | 9,180,155 | |
| | 9,061,629 | | | Suzano SA3 | | | 82,143,430 | | | | 103,192,296 | |
| | 1,974,147 | | | XP, Inc., Cl A | | | 33,209,568 | | | | 51,466,012 | |
| | | | | | | | | | | | |
| | Total Brazil | | | 302,365,795 | | | | 385,120,443 | |
| | | | | | | | | |
|
| China (22.78%) | |
| | 1,313,433 | | | Alibaba Group
Holding Limited, ADR | | | 111,188,211 | | | | 101,804,192 | |
| | 585,365 | | | Baidu, Inc., ADR1 | | | 70,193,992 | | | | 69,711,118 | |
| | 11,599,903 | | | China Mengniu Dairy Co. Ltd.3 | | | 21,122,538 | | | | 31,249,109 | |
| | 8,500,118 | | | Estun Automation Co. Ltd., Cl A3 | | | 28,380,772 | | | | 22,271,864 | |
| | 8,250,441 | | | Full Truck Alliance Co. Ltd., ADR1 | | | 62,518,415 | | | | 57,835,591 | |
| | 4,199,554 | | | Galaxy Entertainment Group Ltd.1,3 | | | 28,125,825 | | | | 23,521,126 | |
| | 7,575,204 | | | Glodon Co. Ltd., Cl A3 | | | 26,831,470 | | | | 18,302,040 | |
| | 4,319,560 | | | Jiangsu Hengli
Hydraulic Co. Ltd., Cl A3 | | | 34,491,955 | | | | 33,311,641 | |
| | 2,182,924 | | | Kanzhun Ltd., ADR1 | | | 37,273,029 | | | | 36,258,368 | |
| | 35,548,843 | | | Kingdee International Software Group Co. Ltd.1,3 | | | 29,670,596 | | | | 51,894,650 | |
| | 9,485,635 | | | Kingsoft Corp. Ltd.3 | | | 32,830,145 | | | | 29,324,113 | |
| | 228,260 | | | Kweichow Moutai Co. Ltd., Cl A1,3 | | | 57,730,889 | | | | 55,563,489 | |
| | 3,472,215 | | | Lufax Holding Ltd., ADR | | | 40,525,782 | | | | 10,659,698 | |
| | 4,462,926 | | | Midea Group Co., Ltd., Cl A3 | | | 22,951,230 | | | | 34,387,501 | |
| | 14,946,047 | | | NARI Technology Co. Ltd., Cl A3 | | | 47,309,999 | | | | 47,023,869 | |
| | 399,172 | | | PDD Holdings, Inc., ADR1 | | | 45,595,365 | | | | 58,402,855 | |
| | 519,226 | | | Shenzhen Mindray Bio-Medical Electronics Co. Ltd., Cl A3 | | | 13,898,888 | | | | 21,290,774 | |
| | 4,292,636 | | | Shenzhou International Group Holdings Ltd.3 | | | 22,717,839 | | | | 44,037,546 | |
| | 3,711,325 | | | Tencent Holdings Limited3 | | | 93,905,589 | | | | 140,120,521 | |
| | 779,406 | | | Tencent Holdings Limited, ADR | | | 34,941,929 | | | | 29,453,753 | |
| | 8,246,769 | | | Venustech Group, Inc., Cl A3 | | | 39,898,630 | | | | 31,360,626 | |
| | 595,325 | | | Yum China Holdings, Inc. | | | 29,300,031 | | | | 25,259,640 | |
| | 488,680 | | | Yum China Holdings, Inc., (Hong Kong)3 | | | 25,707,337 | | | | 20,806,753 | |
| | 1,368,731 | | | Yunnan Baiyao
Group Co. Ltd., Cl A3 | | | 11,301,505 | | | | 9,487,387 | |
| | 1,146,006 | | | Zai Lab Limited, ADR1 | | | 24,472,926 | | | | 31,320,344 | |
| | | | | | | | | | | | |
| | Total China | | | 992,884,887 | | | | 1,034,658,568 | |
| | | | | | | | | |
|
| France (0.94%) | |
| | 241,338 | | | Pernod Ricard SA3 | | | 48,458,186 | | | | 42,649,685 | |
| | | | | | | | | | | | |
|
| Hong Kong (2.02%) | |
| | 1,128,193 | | | AIA Group Ltd.3 | | | 9,022,340 | | | | 9,818,527 | |
| | 21,354,362 | | | Budweiser Brewing Co.
APAC Ltd., 144A3 | | | 59,646,240 | | | | 40,033,025 | |
| | 3,501,361 | | | Techtronic Industries Co. Ltd.3 | | | 17,252,550 | | | | 41,719,008 | |
| | | | | | | | | | | | |
| | Total Hong Kong | | | 85,921,130 | | | | 91,570,560 | |
| | | | | | | | | |
|
| India (26.57%) | |
| | 3,631,048 | | | Aarti Industries Ltd.3 | | | 36,445,956 | | | | 28,324,105 | |
| | 978,880 | | | Aarti Pharmalabs Ltd.1 | | | 5,711,120 | | | | 5,934,068 | |
| | 1,278,377 | | | Bajaj Finance Limited3 | | | 42,845,163 | | | | 112,486,048 | |
| | 5,927,046 | | | Bharti Airtel Ltd.3 | | | 43,683,172 | | | | 73,477,990 | |
| | 2,090,990 | | | Bharti Airtel Ltd. PP3 | | | 10,214,309 | | | | 16,015,162 | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| India (continued) | |
| | 305,421 | | | Cholamandalam Investment & Finance Co. Ltd.3 | | $ | 4,430,400 | | | $ | 4,619,623 | |
| | 640,972 | | | Divi’s Laboratories Ltd.3 | | | 6,060,153 | | | | 30,052,295 | |
| | 20,762,810 | | | Edelweiss Financial Services Ltd.3 | | | 11,456,467 | | | | 19,400,774 | |
| | 4,561,354 | | | Godrej Consumer Products Ltd.3 | | | 55,528,583 | | | | 61,983,619 | |
| | 1,980,988 | | | Godrej Properties Ltd.1,3 | | | 37,987,813 | | | | 47,884,504 | |
| | 4,793,160 | | | HDFC Bank Ltd.3 | | | 79,303,505 | | | | 98,144,838 | |
| | 11,445,167 | | | Jio Financial Services Ltd.1,3 | | | 28,591,325 | | | | 31,998,017 | |
| | 41,576,748 | | | JM Financial Limited3 | | | 56,907,230 | | | | 49,076,937 | |
| | 4,289,427 | | | Jubilant FoodWorks Ltd.3 | | | 34,494,460 | | | | 29,110,666 | |
| | 154,105 | | | Kaynes Technology India Ltd.1,3 | | | 4,645,098 | | | | 4,832,241 | |
| | 1,647,925 | | | Mahindra & Mahindra Ltd.3 | | | 31,088,330 | | | | 34,225,052 | |
| | 4,529,597 | | | Max Financial Services Ltd.1,3 | | | 31,728,481 | | | | 51,916,222 | |
| | 3,435,709 | | | Max Healthcare Institute Ltd. | | | 24,129,810 | | | | 28,333,723 | |
| | 1,420,751 | | | Muthoot Finance Ltd.3 | | | 20,286,812 | | | | 25,190,680 | |
| | 9,581,104 | | | Nippon Life India Asset Management Ltd., 144A3 | | | 32,094,816 | | | | 51,539,292 | |
| | 380,415 | | | Nuvama Wealth
Management Ltd.1,3 | | | 18,347,402 | | | | 16,364,811 | |
| | 2,697,025 | | | Reliance Industries Limited3 | | | 45,472,897 | | | | 83,710,114 | |
| | 3,582,339 | | | SBI Life Insurance Company Limited, 144A3 | | | 37,225,454 | | | | 61,651,190 | |
| | 3,264,939 | | | Tata Communications Ltd.3 | | | 18,848,348 | | | | 69,426,502 | |
| | 571,871 | | | Tata Consultancy Services Ltd.3 | | | 24,117,703 | | | | 26,045,217 | |
| | 3,860,773 | | | Tata Consumer Products Ltd.3 | | | 21,893,060 | | | | 50,397,399 | |
| | 1,059,451 | | | Titan Co. Ltd.3 | | | 17,810,458 | | | | 46,760,968 | |
| | 1,304,384 | | | Trent Ltd.3 | | | 26,411,240 | | | | 47,860,889 | |
| | | | | | | | | | | | |
| | Total India | | | 807,759,565 | | | | 1,206,762,946 | |
| | | | | | | | | |
|
| Indonesia (1.85%) | |
| | 226,108,871 | | | Bank Rakyat Indonesia
(Persero) Tbk PT3 | | | 66,199,623 | | | | 84,037,354 | |
| | | | | | | | | | | | |
|
| Japan (0.82%) | |
| | 84,528 | | | Keyence Corporation3 | | | 28,924,921 | | | | 37,137,906 | |
| | | | | | | | | | | | |
|
| Korea, Republic of (11.30%) | |
| | 3,452,947 | | | Coupang, Inc., Cl A1 | | | 45,987,002 | | | | 55,903,212 | |
| | 415,540 | | | HD Hyundai Heavy
Industries Co. Ltd.3 | | | 21,775,022 | | | | 41,452,481 | |
| | 972,257 | | | HD Korea Shipbuilding & Offshore Engineering Co. Ltd.3 | | | 91,550,524 | | | | 90,934,906 | |
| | 843,869 | | | Korea Aerospace
Industries Ltd.1,3 | | | 27,513,658 | | | | 32,667,965 | |
| | 3,928,144 | | | Samsung Electronics Co., Ltd.3 | | | 128,622,926 | | | | 238,425,741 | |
| | 30,004 | | | Samsung SDI Co. Ltd.3 | | | 16,637,022 | | | | 10,924,172 | |
| | 393,377 | | | SK Hynix, Inc.3 | | | 35,016,550 | | | | 42,932,352 | |
| | | | | | | | | | | | |
| | Total Korea, Republic of | | | 367,102,704 | | | | 513,240,829 | |
| | | | | | | | | |
|
| Mexico (2.83%) | |
| | 9,974,177 | | | Grupo Mexico
S.A.B. de C.V., Series B | | | 25,471,505 | | | | 55,436,242 | |
| | 17,348,118 | | | Wal-Mart de Mexico,
S.A.B de C.V. | | | 41,482,817 | | | | 72,933,405 | |
| | | | | | | | | | | | |
| | Total Mexico | | | 66,954,322 | | | | 128,369,647 | |
| | | | | | | | | |
|
| Peru (1.04%) | |
| | 314,486 | | | Credicorp, Ltd. | | | 38,777,513 | | | | 47,150,886 | |
| | | | | | | | | | | | |
| | |
| 32 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Emerging Markets Fund |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| Philippines (2.09%) | |
| | 61,742,165 | | | Ayala Land, Inc.3 | | $ | 43,918,523 | | | $ | 38,379,463 | |
| | 23,978,091 | | | BDO Unibank, Inc.3 | | | 41,734,409 | | | | 56,490,387 | |
| | | | | | | | | | | | |
| | Total Philippines | | | 85,652,932 | | | | 94,869,850 | |
| | | | | | | | | |
|
| Poland (2.31%) | |
| | 202,955 | | | Dino Polska SA, 144A1,3 | | | 17,861,966 | | | | 23,763,047 | |
| | 5,859,536 | | | InPost SA1,3 | | | 83,887,316 | | | | 81,128,057 | |
| | | | | | | | | | | | |
| | Total Poland | | | 101,749,282 | | | | 104,891,104 | |
| | | | | | | | | |
|
| Russia (0.00%)^ | |
| | 17,949,100 | | | Sberbank of Russia PJSC1,2,4 | | | 64,430,586 | | | | 11,644 | |
| | | | | | | | | | | | |
|
| South Africa (1.42%) | |
| | 825,386 | | | Gold Fields Ltd.3 | | | 9,618,575 | | | | 12,524,753 | |
| | 2,027,731 | | | Gold Fields Ltd., ADR | | | 21,620,357 | | | | 29,320,990 | |
| | 132,167 | | | Naspers Ltd., Cl N3 | | | 18,990,555 | | | | 22,623,031 | |
| | | | | | | | | | | | |
| | Total South Africa | | | 50,229,487 | | | | 64,468,774 | |
| | | | | | | | | | | | |
|
| Spain (0.14%) | |
| | 1,791,760 | | | Codere Online Luxembourg, S.A. Forward Shares1 | | | 17,917,600 | | | | 5,285,692 | |
| | 358,352 | | | Codere Online Luxembourg, S.A. Founders Share1 | | | 3,116 | | | | 1,057,138 | |
| | 26,518 | | | Codere Online Luxembourg, S.A. Private Shares, Cl A1 | | | 265,181 | | | | 78,228 | |
| | | | | | | | | | | | |
| | Total Spain | | | 18,185,897 | | | | 6,421,058 | |
| | | | | | | | | | | | |
|
| Taiwan (8.33%) | |
| | 6,500,403 | | | Delta Electronics, Inc.3 | | | 24,319,836 | | | | 66,293,912 | |
| | 7,310,537 | | | Taiwan Semiconductor Manufacturing Co., Ltd.3 | | | 127,456,732 | | | | 140,154,238 | |
| | 1,653,690 | | | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | | | 37,534,303 | | | | 171,983,760 | |
| | | | | | | | | | | | |
| | Total Taiwan | | | 189,310,871 | | | | 378,431,910 | |
| | | | | | | | | | | | |
|
| United Arab Emirates (0.27%) | |
| | 2,435,850 | | | Network International
Holdings plc, 144A1 | | | 13,421,790 | | | | 12,102,731 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 3,328,329,491 | | | | 4,231,895,895 | |
| | | | | | | | | |
| | | | | | | | | | | | |
| Private Common Stocks (1.63%) | |
| India (1.63%) | |
| | 27,027 | | | Pine Labs PTE. Ltd., Series 11,2,4 | | | 10,077,362 | | | | 18,650,522 | |
| | 6,833 | | | Pine Labs PTE. Ltd., Series A1,2,4 | | | 2,547,771 | | | | 4,715,249 | |
| | 7,600 | | | Pine Labs PTE. Ltd., Series B1,2,4 | | | 2,833,757 | | | | 5,244,532 | |
| | 6,174 | | | Pine Labs PTE. Ltd., Series B21,2,4 | | | 2,302,055 | | | | 4,260,492 | |
| | 9,573 | | | Pine Labs PTE. Ltd., Series C1,2,4 | | | 3,569,416 | | | | 6,606,040 | |
| | 1,932 | | | Pine Labs PTE. Ltd., Series C11,2,4 | | | 720,371 | | | | 1,333,215 | |
| | 2,459 | | | Pine Labs PTE. Ltd., Series D1,2,4 | | | 916,870 | | | | 1,696,882 | |
| | 45,680 | | | Pine Labs PTE. Ltd., Series J1,2,4 | | | 17,032,398 | | | | 31,522,398 | |
| | | | | | | | | | | | |
| | Total Private Common Stocks | | | 40,000,000 | | | | 74,029,330 | |
| | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Private Convertible Preferred Stocks (2.14%) | |
| India (2.14%) | |
| | 11,578 | | | Bundl Technologies
Private Ltd., Series K1,2,4 | | $ | 76,776,872 | | | $ | 87,247,656 | |
| | 15,334 | | | Think & Learn Private
Limited, Series F1,2,4 | | | 49,776,072 | | | | 9,639,855 | |
| | | | | | | | | | | | |
| | Total Private Convertible Preferred Stocks | | | 126,552,944 | | | | 96,887,511 | |
| | | | | | | | | |
| | | | | | | | | | | | |
| Rights (0.00%)^ | |
| Brazil (0.00%)^ | |
| | 19,401 | | | Localiza Rent a Car SA, Exp. 2/5/20241 | | | 0 | | | | 79,879 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Warrants (0.00%)^ | | | | | | |
| Spain (0.00%)^ | |
| | 13,259 | | | Codere Online Luxembourg S.A. Private Shares, Exp. 11/30/20261 | | | 0 | | | | 937 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | |
| Principal Amount | | | | | | |
| Short Term Investments (3.60%) | |
| | $163,499,913 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $163,588,021; (Fully Collateralized by $161,852,500 U.S. Treasury Note, 4.50% due 7/15/2026 Market value - $166,769,925)3 | | | 163,499,913 | | | | 163,499,913 | |
| | | | | | | | | | | | |
| | Total Investments (100.56%) | | $ | 3,658,382,348 | | | | 4,566,393,465 | |
| | | | | | | | | | | | |
| Liabilities Less Cash and Other
Assets (-0.56%) |
| | | (25,407,468 | ) |
| | | | | | | | | | | | |
| | Net Assets | | | $ | 4,540,985,997 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 2 | At December 31, 2023, the market value of restricted and fair valued securities amounted to $170,928,485 or 3.76% of net assets. These securities are not deemed liquid. See Note 6 regarding Restricted Securities. |
| 3 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| 4 | Level 3 security. See Note 7 regarding Fair Value Measurements. |
| ^ | Rounds to less than 0.01%. |
| ADR | American Depositary Receipt. |
| 144A | Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. At December 31, 2023, the market value of Rule 144A securities amounted to $189,089,285 or 4.16% of net assets. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 33 |
| | |
| Baron Emerging Markets Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | |
Summary of Investments by Sector
as of December 31, 2023 | | Percentage of
Net Assets | |
| |
Financials | | | 21.8 | % |
| |
Information Technology | | | 18.5 | |
| |
Consumer Discretionary | | | 15.1 | |
| |
Industrials | | | 11.4 | |
| |
Communication Services | | | 10.2 | |
| |
Consumer Staples | | | 8.3 | |
| |
Materials | | | 5.0 | |
| |
Health Care | | | 2.8 | |
| |
Real Estate | | | 1.9 | |
| |
Energy | | | 1.8 | |
| |
Cash and Cash Equivalents* | | | 3.0 | |
| | | | 100.0 | %** |
| * | Includes short term investments, other assets and liabilities — net. |
| ** | Individual weights may not sum to 100% due to rounding. |
| | |
| 34 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Global Advantage Fund |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (93.62%) | |
| Argentina (11.54%) | |
| | 66,449 | | | Globant S.A.1 | | $ | 4,475,572 | | | $ | 15,813,533 | |
| | 40,286 | | | MercadoLibre, Inc.1 | | | 24,530,220 | | | | 63,311,061 | |
| | | | | | | | | | | | |
| | Total Argentina | | | 29,005,792 | | | | 79,124,594 | |
| | | | | | | | | | | | |
| Brazil (2.16%) | |
| | 676,241 | | | Afya Ltd., Cl A1 | | | 12,805,729 | | | | 14,829,965 | |
| | | | | | | | | | | | |
| Canada (7.79%) | |
| | 685,490 | | | Shopify, Inc., Cl A1 | | | 25,793,754 | | | | 53,399,671 | |
| | | | | | | | | | | | |
| India (5.61%) | |
| | 312,750 | | | Bajaj Finance Limited3 | | | 18,432,672 | | | | 27,519,278 | |
| | 7,379,067 | | | Zomato Ltd.1,3 | | | 12,454,605 | | | | 10,952,588 | |
| | | | | | | | | | | | |
| | Total India | | | 30,887,277 | | | | 38,471,866 | |
| | | | | | | | | | | | |
| Israel (4.06%) | |
| | 331,500 | | | Fiverr International Ltd.1 | | | 7,554,653 | | | | 9,023,430 | |
| | 152,772 | | | Wix.com Ltd.1 | | | 12,754,491 | | | | 18,794,011 | |
| | | | | | | | | | | | |
| | Total Israel | | | 20,309,144 | | | | 27,817,441 | |
| | | | | | | | | | | | |
| Korea, Republic of (4.27%) | |
| | 1,809,565 | | | Coupang, Inc., Cl A1 | | | 35,806,043 | | | | 29,296,857 | |
| | | | | | | | | | | | |
| Netherlands (7.98%) | |
| | 8,934 | | | Adyen N.V., 144A1,3 | | | 6,863,044 | | | | 11,533,268 | |
| | 63,343 | | | argenx SE, ADR1 | | | 5,543,118 | | | | 24,097,577 | |
| | 25,272 | | | ASML Holding N.V.3 | | | 4,811,157 | | | | 19,077,516 | |
| | | | | | | | | | | | |
| | Total Netherlands | | | 17,217,319 | | | | 54,708,361 | |
| | | | | | | | | | | | |
| Poland (2.37%) | |
| | 1,174,705 | | | InPost SA1,3 | | | 16,088,621 | | | | 16,264,348 | |
| | | | | | | | | | | | |
| Spain (0.65%) | |
| | 920,012 | | | Codere Online Luxembourg S.A.1 | | | 8,419,057 | | | | 2,714,035 | |
| | 498,488 | | | Codere Online Luxembourg, S.A. Forward Shares1 | | | 4,984,880 | | | | 1,470,540 | |
| | 104,612 | | | Codere Online Luxembourg, S.A. Founders Shares1 | | | 910 | | | | 308,605 | |
| | | | | | | | | | | | |
| | Total Spain | | | 13,404,847 | | | | 4,493,180 | |
| | | | | | | | | | | | |
| United Kingdom (6.72%) | |
| | 592,115 | | | Endava plc, ADR1 | | | 23,725,725 | | | | 46,096,153 | |
| | | | | | | | | | | | |
| United States (40.47%) | |
| | 141,583 | | | Bill.Com Holdings, Inc.1 | | | 6,149,064 | | | | 11,551,757 | |
| | 180,421 | | | Block, Inc.1 | | | 14,648,530 | | | | 13,955,564 | |
| | 389,280 | | | Cloudflare, Inc., Cl A1 | | | 10,130,053 | | | | 32,411,453 | |
| | 92,096 | | | Crowdstrike Holdings, Inc., Cl A1 | | | 5,142,494 | | | | 23,513,951 | |
| | 183,762 | | | Datadog, Inc., Cl A1 | | | 8,804,166 | | | | 22,305,032 | |
| | 928 | | | Illumina, Inc.1 | | | 259,532 | | | | 129,215 | |
| | 127,066 | | | NVIDIA Corp. | | | 25,640,391 | | | | 62,925,624 | |
| | 634,936 | | | Rivian Automotive, Inc., Cl A1 | | | 13,602,870 | | | | 14,895,599 | |
| | 270,578 | | | Schrödinger, Inc.1 | | | 6,248,053 | | | | 9,686,692 | |
| | 183,129 | | | Snowflake, Inc., Cl A1 | | | 25,305,426 | | | | 36,442,671 | |
| | 121,272 | | | Tesla, Inc.1 | | | 33,837,359 | | | | 30,133,667 | |
| | 88,388 | | | Zscaler, Inc.1 | | | 4,500,184 | | | | 19,583,245 | |
| | | | | | | | | | | | |
| | Total United States | | | 154,268,122 | | | | 277,534,470 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 379,312,373 | | | | 642,036,906 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Private Common Stocks (4.71%) | |
| United States (4.71%) | |
| | 299,761 | | | Farmers Business Network, Inc.1,2,4 | | $ | 12,250,006 | | | $ | 557,556 | |
| | 252,130 | | | Space Exploration
Technologies Corp., Cl A1,2,4 | | | 11,571,518 | | | | 24,456,610 | |
| | 75,250 | | | Space Exploration
Technologies Corp., Cl C1,2,4 | | | 3,428,124 | | | | 7,299,250 | |
| | | | | | | | | | | | |
| | Total Private Common Stocks | | | 27,249,648 | | | | 32,313,416 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Private Convertible Preferred Stocks (1.37%) | |
| India (0.84%) | |
| | 9,201 | | | Think & Learn Private
Limited, Series F1,2,4 | | | 29,867,591 | | | | 5,784,290 | |
| | | | | | | | | | | | |
|
| United States (0.53%) | |
| | 69,926 | | | Resident Home, Inc., Series B11,2,4 | | | 4,999,968 | | | | 3,601,189 | |
| | | | | | | | | | | | |
| | Total Private Convertible Preferred Stocks | | | 34,867,559 | | | | 9,385,479 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Private Preferred Stocks (0.41%) | |
| United States (0.41%) | |
| | 461,004 | | | GM Cruise Holdings LLC, Cl G1,2,4 | | | 12,147,455 | | | | 2,798,294 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Warrants (0.02%) | |
| Israel (0.01%) | |
| | 68,986 | | | Innovid Corp., Exp. 12/31/20271 | | | 117,942 | | | | 2,069 | |
| | 228,748 | | | Taboola.com Ltd., Exp. 6/29/20261 | | | 417,100 | | | | 89,578 | |
| | | | | | | | | | | | |
| | Total Israel | | | 535,042 | | | | 91,647 | |
| | | | | | | | | | | | |
|
| Spain (0.01%) | |
| | 502,360 | | | Codere Online Luxembourg S.A. Private Shares, Exp. 11/30/20261 | | | 845,632 | | | | 35,517 | |
| | | | | | | | | | | | |
| | Total Warrants | | | 1,380,674 | | | | 127,164 | |
| | | | | | | | | | | | |
| | Total Investments (100.13%) | | $ | 454,957,709 | | | | 686,661,259 | |
| | | | | | | | | | | | |
| Liabilities Less Cash and
Other Assets (-0.13%) |
| | | (867,644 | ) |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 685,793,615 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 2 | At December 31, 2023, the market value of restricted and fair valued securities amounted to $44,497,189 or 6.49% of net assets. These securities are not deemed liquid. See Note 6 regarding Restricted Securities. |
| 3 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| 4 | Level 3 security. See Note 7 regarding Fair Value Measurements. |
| ADR | American Depositary Receipt. |
| 144A | Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. At December 31, 2023, the market value of Rule 144A securities amounted to $11,533,268 or 1.68% of net assets. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 35 |
| | |
| Baron Global Advantage Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | |
Summary of Investments by Sector
as of December 31, 2023 | | Percentage of
Total Investments | |
| |
Information Technology | | | 52.7 | % |
| |
Consumer Discretionary | | | 25.8 | |
| |
Industrials | | | 8.7 | |
| |
Financials | | | 7.7 | |
| |
Health Care | | | 4.9 | |
| |
Materials | | | 0.1 | |
| |
Communication Services | | | 0.0 | ^ |
| | | | 100.0 | %* |
| * | Individual weights may not sum to 100% due to rounding. |
| ^ | Rounds to less than 0.1%. |
| | |
| 36 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Real Estate Income Fund |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (98.79%) | |
| Consumer Discretionary (10.15%) | |
| | | | Casinos & Gaming (3.89%) | |
| | 63,225 | | | Wynn Resorts Ltd. | | $ | 6,224,615 | | | $ | 5,760,430 | |
| |
| | | | Home Improvement Retail (0.96%) | |
| | 6,363 | | | Lowe’s Companies, Inc. | | | 1,431,434 | | | | 1,416,086 | |
| |
| | | | Homebuilding (4.07%) | |
| | 58,665 | | | Toll Brothers, Inc. | | | 3,737,364 | | | | 6,030,175 | |
| |
| | | | Hotels, Resorts & Cruise Lines (1.23%) | |
| | 21,527 | | | Marriott Vacations Worldwide Corp. | | | 1,760,395 | | | | 1,827,427 | |
| | | | | | | | | | | | |
| | Total Consumer Discretionary | | | 13,153,808 | | | | 15,034,118 | |
| | | | | | | | | |
|
| Financials (2.88%) | |
| | | | Asset Management & Custody
Banks (2.88%) | |
| | 60,571 | | | Brookfield Asset
Management Ltd., Cl A | | | 2,024,009 | | | | 2,433,137 | |
| | 45,800 | | | Brookfield Corp., Cl A | | | 1,479,123 | | | | 1,837,496 | |
| | | | | | | | | | | | |
| | Total Financials | | | 3,503,132 | | | | 4,270,633 | |
| | | | | | | | | |
|
| Real Estate (84.22%) | |
| | | | Data Center REITs (13.75%) | |
| | 48,970 | | | Digital Realty Trust, Inc. | | | 5,249,235 | | | | 6,590,383 | |
| | 17,096 | | | Equinix, Inc. | | | 12,169,929 | | | | 13,768,947 | |
| | | | | | | | | | | | |
| | | | 17,419,164 | | | | 20,359,330 | |
| |
| | | | Health Care REITs (9.10%) | |
| | 40,332 | | | Ventas, Inc. | | | 1,816,050 | | | | 2,010,147 | |
| | 127,161 | | | Welltower, Inc. | | | 9,731,854 | | | | 11,466,107 | |
| | | | | | | | | | | | |
| | | | 11,547,904 | | | | 13,476,254 | |
| |
| | | | Hotel & Resort REITs (2.18%) | |
| | 343,224 | | | DiamondRock Hospitality Co. | | | 2,799,429 | | | | 3,222,873 | |
| | | | | | | | | | | | |
| | | |
| | | | Industrial REITs (17.34%) | | | | | | | | |
| | 12,606 | | | EastGroup Properties, Inc. | | | 1,849,108 | | | | 2,313,705 | |
| | 53,913 | | | First Industrial Realty Trust, Inc. | | | 2,758,688 | | | | 2,839,598 | |
| | 117,050 | | | Prologis, Inc. | | | 13,306,458 | | | | 15,602,765 | |
| | 74,293 | | | Rexford Industrial Realty, Inc. | | | 3,863,382 | | | | 4,167,837 | |
| | 12,060 | | | Terreno Realty Corp. | | | 676,057 | | | | 755,800 | |
| | | | | | | | | | | | |
| | | | | | | 22,453,693 | | | | 25,679,705 | |
| | | | Multi-Family Residential REITs (9.17%) | | | | | |
| | 38,975 | | | AvalonBay Communities, Inc. | | | 7,003,839 | | | | 7,296,900 | |
| | 102,652 | | | Equity Residential | | | 6,149,593 | | | | 6,278,196 | |
| | | | | | | | | | | | |
| | | | | | | 13,153,432 | | | | 13,575,096 | |
| | | | Office REITs (2.18%) | | | | | | | | |
| | 25,508 | | | Alexandria Real Estate Equities, Inc. | | | 2,822,773 | | | | 3,233,649 | |
| | | | | | | | | | | | |
| | | |
| | | | Retail REITs (5.33%) | | | | | | | | |
| | 41,406 | | | Simon Property Group, Inc. | | | 5,542,708 | | | | 5,906,152 | |
| | 71,725 | | | Tanger, Inc. (formerly, Tanger Factory Outlet Centers, Inc.) | | | 1,543,527 | | | | 1,988,217 | |
| | | | | | | | | | | | |
| | | | 7,086,235 | | | | 7,894,369 | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
|
| Real Estate (continued) | |
| | | | Self Storage REITs (7.73%) | | | | | | | | |
| | 49,147 | | | Extra Space Storage, Inc. | | $ | 5,893,292 | | | $ | 7,879,739 | |
| | 11,706 | | | Public Storage | | | 3,142,220 | | | | 3,570,330 | |
| | | | | | | | | | | | |
| | | | 9,035,512 | | | | 11,450,069 | |
| | | | Single-Family Residential REITs (11.25%) | | | | | | | | |
| | 176,583 | | | American Homes 4 Rent, Cl A | | | 6,080,751 | | | | 6,349,925 | |
| | 178,017 | | | Invitation Homes, Inc. | | | 5,947,982 | | | | 6,072,160 | |
| | 31,750 | | | Sun Communities, Inc. | | | 3,469,638 | | | | 4,243,387 | |
| | | | | | | | | | | | |
| | | | 15,498,371 | | | | 16,665,472 | |
| | | | Telecom Tower REITs (6.19%) | | | | | | | | |
| | 42,425 | | | American Tower Corp. | | | 7,441,532 | | | | 9,158,709 | |
| | | | | | | | | | | | |
| | Total Real Estate | | | 109,258,045 | | | | 124,715,526 | |
| | | | | | | | | |
|
| Utilities (1.54%) | |
| | | | Multi-Utilities (1.54%) | | | | | | | | |
| | 64,600 | | | Brookfield Infrastructure Corp., Cl A1,2 | | | 1,809,973 | | | | 2,279,088 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 127,724,958 | | | | 146,299,365 | |
| | | | | | | | | |
| | | | | | | | | | | | |
| | | |
| Principal Amount | | | | | | |
| Short Term Investments (0.81%) | |
| | $1,195,576 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $1,196,220; (Fully Collateralized by $1,232,300 U.S. Treasury Note, 3.50% due 4/30/2028 Market value - $1,219,507)3 | | | 1,195,576 | | | | 1,195,576 | |
| | | | | | | | | | | | |
| | Total Investments (99.60%) | | $ | 128,920,534 | | | | 147,494,941 | |
| | | | | | | | | | | | |
| | Cash and Other Assets Less Liabilities (0.40%) | | | | | | | 588,233 | |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 148,083,174 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 2 | The Adviser has reclassified/classified certain securities in or out of this sub-industry. Such reclassifications/classifications are not supported by S&P or MSCI (unaudited). |
| 3 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 37 |
| | |
| Baron Health Care Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | Cost | | | Value | |
| Common Stocks (97.75%) | |
| Health Care (97.75%) | |
| | | | Biotechnology (19.59%) | |
| | 63,500 | | | Arcellx, Inc.1 | | $ | 2,574,692 | | | $ | 3,524,250 | |
| | 20,055 | | | argenx SE, ADR1,2 | | | 6,699,349 | | | | 7,629,524 | |
| | 5,000 | | | BioNTech SE, ADR1,2 | | | 526,268 | | | | 527,700 | |
| | 59,000 | | | Immunovant, Inc.1 | | | 2,105,528 | | | | 2,485,670 | |
| | 75,000 | | | Legend Biotech Corp., ADR1,2 | | | 4,504,654 | | | | 4,512,750 | |
| | 7,500 | | | Moderna, Inc.1 | | | 684,567 | | | | 745,875 | |
| | 261,254 | | | Rocket Pharmaceuticals, Inc.1 | | | 4,842,850 | | | | 7,829,782 | |
| | 23,000 | | | Vertex Pharmaceuticals, Incorporated1 | | | 5,946,486 | | | | 9,358,470 | |
| | 100,100 | | | Xenon Pharmaceuticals, Inc.1,2 | | | 3,651,406 | | | | 4,610,606 | |
| | | | | | | | | | | | |
| | | | 31,535,800 | | | | 41,224,627 | |
| | | | Health Care Distributors (2.38%) | |
| | 10,800 | | | McKesson Corp. | | | 2,651,423 | | | | 5,000,184 | |
| |
| | | | Health Care Equipment (16.86%) | |
| | 144,300 | | | Boston Scientific Corp.1 | | | 7,557,843 | | | | 8,341,983 | |
| | 35,000 | | | DexCom, Inc.1 | | | 3,975,409 | | | | 4,343,150 | |
| | 6,995 | | | IDEXX Laboratories, Inc.1 | | | 2,933,296 | | | | 3,882,574 | |
| | 11,000 | | | Inspire Medical Systems, Inc.1 | | | 1,457,249 | | | | 2,237,730 | |
| | 30,233 | | | Intuitive Surgical, Inc.1 | | | 7,267,519 | | | | 10,199,405 | |
| | 12,000 | | | Shockwave Medical, Inc.1 | | | 2,503,752 | | | | 2,286,720 | |
| | 14,000 | | | Stryker Corp. | | | 3,827,687 | | | | 4,192,440 | |
| | | | | | | | | | | | |
| | | | 29,522,755 | | | | 35,484,002 | |
| | | | Health Care Facilities (3.04%) | |
| | 18,300 | | | HCA Healthcare, Inc. | | | 4,144,546 | | | | 4,953,444 | |
| | 45,000 | | | Surgery Partners, Inc.1 | | | 1,459,178 | | | | 1,439,550 | |
| | | | | | | | | | | | |
| | | | 5,603,724 | | | | 6,392,994 | |
| | | | Health Care Supplies (4.07%) | |
| | 128,000 | | | Neogen Corp.1 | | | 2,420,635 | | | | 2,574,080 | |
| | 15,850 | | | The Cooper Companies, Inc. | | | 5,478,798 | | | | 5,998,274 | |
| | | | | | | | | | | | |
| | | | 7,899,433 | | | | 8,572,354 | |
| | | | Health Care Technology (1.51%) | |
| | 35,000 | | | Schrödinger, Inc.1 | | | 942,721 | | | | 1,253,000 | |
| | 10,000 | | | Veeva Systems, Inc., Cl A1 | | | 1,917,760 | | | | 1,925,200 | |
| | | | | | | | | | | | |
| | | | 2,860,481 | | | | 3,178,200 | |
| | | | Life Sciences Tools & Services (17.90%) | |
| | 14,700 | | | 10X Genomics, Inc., Cl A1 | | | 823,014 | | | | 822,612 | |
| | 40,000 | | | Bio-Techne Corporation | | | 3,091,287 | | | | 3,086,400 | |
| | 15,100 | | | Danaher Corp. | | | 3,439,353 | | | | 3,493,234 | |
| | 31,000 | | | Exact Sciences Corp.1,3 | | | 2,035,047 | | | | 2,293,380 | |
| | 20,200 | | | ICON plc1,2 | | | 4,159,401 | | | | 5,718,014 | |
| | 2,650 | | | Mettler-Toledo International, Inc.1 | | | 2,726,860 | | | | 3,214,344 | |
| | 23,600 | | | Natera, Inc.1,3 | | | 1,441,631 | | | | 1,478,304 | |
| | 10,000 | | | Repligen Corp.1 | | | 1,616,032 | | | | 1,798,000 | |
| | 81,631 | | | Stevanato Group SpA2 | | | 1,923,580 | | | | 2,227,710 | |
| | 17,749 | | | Thermo Fisher Scientific, Inc. | | | 8,573,805 | | | | 9,420,992 | |
| | 11,650 | | | West Pharmaceutical Services, Inc. | | | 3,438,733 | | | | 4,102,198 | |
| | | | | | | | | | | | |
| | | | 33,268,743 | | | | 37,655,188 | |
| | | | | | | | | | | | |
| Shares | | Cost | | | Value | |
| Common Stocks (continued) | |
| Health Care (continued) | |
| | | | Managed Health Care (12.08%) | |
| | 6,700 | | | Elevance Health, Inc. | | $ | 2,975,916 | | | $ | 3,159,452 | |
| | 5,425 | | | Humana, Inc. | | | 2,291,526 | | | | 2,483,619 | |
| | 37,572 | | | UnitedHealth Group, Incorporated | | | 13,933,454 | | | | 19,780,531 | |
| | | | | | | | | | | | |
| | | | 19,200,896 | | | | 25,423,602 | |
| | | | Pharmaceuticals (20.32%) | |
| | 80,000 | | | AstraZeneca PLC, ADR2 | | | 4,902,730 | | | | 5,388,000 | |
| | 34,592 | | | Eli Lilly & Co. | | | 8,224,141 | | | | 20,164,369 | |
| | 87,400 | | | Merck & Co., Inc. | | | 8,188,605 | | | | 9,528,348 | |
| | 35,000 | | | Structure Therapeutics, Inc., ADR1,2 | | | 2,097,304 | | | | 1,426,600 | |
| | 31,700 | | | Zoetis, Inc. | | | 4,884,223 | | | | 6,256,629 | |
| | | | | | | | | | | | |
| | | | 28,297,003 | | | | 42,763,946 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 160,840,258 | | | | 205,695,097 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | |
| Principal Amount | | | | | | |
| Short Term Investments (2.18%) | |
| | $4,598,348 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $4,600,826 ; (Fully Collateralized by $2,312,800 U.S. Treasury Note, 4.625% due 11/15/2026 Market value - $2,361,506 and Fully Collateralized by $2,260,200 U.S. Treasury Note, 4.50% due 7/15/2026 Market value - $2,328,870)4 | | | 4,598,348 | | | | 4,598,348 | |
| | | | | | | | | | | | |
| | Total Investments (99.93%) | | $ | 165,438,606 | | | | 210,293,445 | |
| | | | | | | | | | | | |
| | Cash and Other Assets Less Liabilities (0.07%) | | | | | | | 138,959 | |
| | | | | | | | | | | | |
| | Net Assets | | | | | | $ | 210,432,404 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 3 | The Adviser has reclassified/classified certain securities in or out of this sub-industry. Such reclassifications/classifications are not supported by S&P or MSCI (unaudited). |
| 4 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| ADR | American Depositary Receipt. |
All securities are Level 1, unless otherwise noted.
| | |
| 38 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron FinTech Fund |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | Cost | | | Value | |
| Common Stocks (98.82%) | |
| Consumer Discretionary (3.69%) | |
| | | | Broadline Retail (3.69%) | |
| | 1,400 | | | MercadoLibre, Inc.1 | | $ | 2,084,586 | | | $ | 2,200,156 | |
| | | | | | | | | | | | |
|
| Financials (65.57%) | |
| | | | Asset Management & Custody Banks (2.93%) | |
| | 2,150 | | | BlackRock, Inc. | | | 1,749,771 | | | | 1,745,370 | |
| |
| | | | Diversified Banks (1.57%) | |
| | 112,000 | | | NU Holdings Ltd., Cl A1,2 | | | 878,100 | | | | 932,960 | |
| |
| | | | Diversified Financial Services (3.60%) | |
| | 23,000 | | | Apollo Global Management, Inc. | | | 1,683,361 | | | | 2,143,370 | |
| |
| | | | Financial Exchanges & Data (21.05%) | |
| | 5,600 | | | CME Group, Inc. | | | 1,170,111 | | | | 1,179,360 | |
| | 3,700 | | | FactSet Research Systems, Inc. | | | 1,549,393 | | | | 1,765,085 | |
| | 4,200 | | | Moody’s Corp. | | | 1,497,327 | | | | 1,640,352 | |
| | 5,100 | | | Morningstar, Inc. | | | 1,114,127 | | | | 1,459,824 | |
| | 3,300 | | | MSCI, Inc. | | | 1,460,004 | | | | 1,866,645 | |
| | 6,600 | | | S&P Global, Inc. | | | 2,605,418 | | | | 2,907,432 | |
| | 19,000 | | | Tradeweb Markets, Inc., Cl A | | | 1,567,302 | | | | 1,726,720 | |
| | | | | | | | | | | | |
| | | | 10,963,682 | | | | 12,545,418 | |
| |
| | | | Insurance Brokers (0.40%) | |
| | 10,000 | | | BRP Group, Inc., Cl A1 | | | 286,809 | | | | 240,200 | |
| |
| | | | Investment Banking & Brokerage (7.70%) | |
| | 11,000 | | | Houlihan Lokey, Inc. | | | 843,251 | | | | 1,319,010 | |
| | 10,000 | | | Interactive Brokers Group, Inc., Cl A | | | 796,800 | | | | 829,000 | |
| | 6,800 | | | LPL Financial Holdings, Inc. | | | 1,140,768 | | | | 1,547,816 | |
| | 13,000 | | | The Charles Schwab Corp. | | | 972,540 | | | | 894,400 | |
| | | | | | | | | | | | |
| | | | 3,753,359 | | | | 4,590,226 | |
| |
| | | | Property & Casualty Insurance (6.75%) | |
| | 17,300 | | | Arch Capital Group Ltd.1,2 | | | 1,416,332 | | | | 1,284,871 | |
| | 2,000 | | | Kinsale Capital Group, Inc. | | | 342,522 | | | | 669,820 | |
| | 13,000 | | | The Progressive Corp. | | | 1,581,601 | | | | 2,070,640 | |
| | | | | | | | | | | | |
| | | | 3,340,455 | | | | 4,025,331 | |
| |
| | | | Transaction & Payment Processing
Services (21.57%) | |
| | 14,000 | | | Block, Inc.1 | | | 2,535,138 | | | | 1,082,900 | |
| | 13,400 | | | Fiserv, Inc.1 | | | 1,438,436 | | | | 1,780,056 | |
| | 9,000 | | | Global Payments, Inc. | | | 1,126,052 | | | | 1,143,000 | |
| | 5,700 | | | Jack Henry & Associates, Inc. | | | 948,461 | | | | 931,437 | |
| | 6,700 | | | MasterCard, Incorporated, Cl A | | | 2,318,807 | | | | 2,857,617 | |
| | 13,000 | | | Repay Holdings Corporation1 | | | 260,634 | | | | 111,020 | |
| | 11,200 | | | Visa, Inc., Cl A | | | 2,382,161 | | | | 2,915,920 | |
| | 3,300 | | | WEX, Inc.1 | | | 656,410 | | | | 642,015 | |
| | 125,000 | | | Wise PLC, Cl A (United Kingdom)1,2,3 | | | 1,445,918 | | | | 1,390,185 | |
| | | | | | | | | | | | |
| | | | 13,112,017 | | | | 12,854,150 | |
| | | | | | | | | | | | |
| | Total Financials | | | 35,767,554 | | | | 39,077,025 | |
| | | | | | | | | | | | |
|
| Industrials (4.80%) | |
| | | | Research & Consulting Services (4.80%) | |
| | 2,600 | | | Equifax, Inc. | | | 549,418 | | | | 642,954 | |
| | 10,000 | | | TransUnion | | | 968,707 | | | | 687,100 | |
| | 6,400 | | | Verisk Analytics, Inc. | | | 1,229,237 | | | | 1,528,704 | |
| | | | | | | | | | | | |
| | Total Industrials | | | 2,747,362 | | | | 2,858,758 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Shares | | Cost | | | Value | |
| Common Stocks (continued) | |
| Information Technology (23.30%) | |
| | | | Application Software (13.94%) | |
| | 12,000 | | | Alkami Technology, Inc.1 | | $ | 304,549 | | | $ | 291,000 | |
| | 4,200 | | | Bill.Com Holdings, Inc.1 | | | 518,119 | | | | 342,678 | |
| | 20,000 | | | Clearwater Analytics Holdings, Inc., Cl A1 | | | 484,321 | | | | 400,600 | |
| | 2,200 | | | Fair Isaac Corp.1 | | | 1,038,604 | | | | 2,560,822 | |
| | 13,500 | | | Guidewire Software, Inc.1 | | | 1,513,374 | | | | 1,472,040 | |
| | 5,000 | | | Intuit, Inc. | | | 1,942,827 | | | | 3,125,150 | |
| | 3,500 | | | nCino, Inc.1 | | | 246,976 | | | | 117,705 | |
| | | | | | | | | | | | |
| | | | 6,048,770 | | | | 8,309,995 | |
| |
| | | | Internet Services & Infrastructure (1.57%) | |
| | 12,000 | | | Shopify, Inc., Cl A1,2 | | | 1,697,734 | | | | 934,800 | |
| |
| | | | IT Consulting & Other Services (7.79%) | |
| | 4,500 | | | Accenture plc, Cl A2 | | | 1,229,138 | | | | 1,579,095 | |
| | 30,000 | | | CI&T, Inc., Cl A1,2 | | | 439,692 | | | | 157,800 | |
| | 19,000 | | | Endava plc, ADR1,2 | | | 1,366,853 | | | | 1,479,150 | |
| | 6,000 | | | Globant S.A.1,2 | | | 1,493,374 | | | | 1,427,880 | |
| | | | | | | | | | | | |
| | | | 4,529,057 | | | | 4,643,925 | |
| | | | | | | | | | | | |
| | Total Information Technology | | | 12,275,561 | | | | 13,888,720 | |
| | | | | | | | | | | | |
|
| Real Estate (1.46%) | |
| | | | Real Estate Services (1.46%) | |
| | 10,000 | | | CoStar Group, Inc.1 | | | 863,804 | | | | 873,900 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 53,738,867 | | | | 58,898,559 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| |
| Principal Amount | |
| Short Term Investments (1.22%) | |
| | $726,336 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $726,727; (Fully Collateralized by $748,700 U.S. Treasury Note, 3.50% due 4/30/2028 Market value - $740,927)3 | | | 726,336 | | | | 726,336 | |
| | | | | | | | | | | | |
| | Total Investments (100.04%) | | $ | 54,465,203 | | | | 59,624,895 | |
| | | | | | | | | | | | |
| | Liabilities Less Cash and Other Assets (-0.04%) | | | | (26,010 | ) |
| | | | | | | | | | | | |
| | Net Assets | | | $ | 59,598,885 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 3 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| ADR | American Depositary Receipt. |
All securities are Level 1, unless otherwise noted.
| | |
| See Notes to Financial Statements. | | 39 |
| | |
| Baron New Asia Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (94.95%) | |
| China (23.42%) | | | | | | |
| | 1,303 | | | Alibaba Group Holding Limited, ADR | | $ | 122,893 | | | $ | 100,996 | |
| | 457 | | | Baidu, Inc., ADR1 | | | 65,203 | | | | 54,424 | |
| | 838 | | | Baidu, Inc., Cl A1,2 | | | 13,648 | | | | 12,474 | |
| | 11,010 | | | China Mengniu Dairy Co. Ltd.2 | | | 39,787 | | | | 29,660 | |
| | 7,574 | | | Estun Automation Co. Ltd., Cl A2 | | | 26,797 | | | | 19,845 | |
| | 7,164 | | | Full Truck Alliance Co. Ltd., ADR1 | | | 51,674 | | | | 50,220 | |
| | 4,713 | | | Galaxy Entertainment Group Ltd.1,2 | | | 30,166 | | | | 26,397 | |
| | 1,000 | | | Glodon Co. Ltd., Cl A2 | | | 4,370 | | | | 2,416 | |
| | 6,179 | | | Glodon Co. Ltd., Cl A (Hong Kong)2 | | | 27,952 | | | | 14,929 | |
| | 4,090 | | | Jiangsu Hengli Hydraulic Co. Ltd., Cl A2 | | | 34,282 | | | | 31,541 | |
| | 2,191 | | | Kanzhun Ltd., ADR1 | | | 37,134 | | | | 36,393 | |
| | 34,398 | | | Kingdee International Software Group Co. Ltd.1,2 | | | 63,126 | | | | 50,215 | |
| | 8,929 | | | Kingsoft Corp. Ltd.2 | | | 37,908 | | | | 27,603 | |
| | 234 | | | Kweichow Moutai Co. Ltd., Cl A2 | | | 59,819 | | | | 56,961 | |
| | 3,795 | | | Lufax Holding Ltd., ADR | | | 47,319 | | | | 11,649 | |
| | 4,216 | | | Midea Group Co., Ltd., Cl A2 | | | 39,137 | | | | 32,485 | |
| | 15,098 | | | NARI Technology Co. Ltd., Cl A2 | | | 52,122 | | | | 47,502 | |
| | 404 | | | PDD Holdings, Inc., ADR1 | | | 47,118 | | | | 59,109 | |
| | 513 | | | Shenzhen Mindray Bio-Medical
Electronics Co. Ltd., Cl A2 | | | 25,577 | | | | 21,035 | |
| | 3,239 | | | Shenzhou International Group Holdings Ltd.2 | | | 33,699 | | | | 33,228 | |
| | 4,630 | | | Tencent Holdings Limited, ADR | | | 234,912 | | | | 174,968 | |
| | 8,487 | | | Venustech Group, Inc., Cl A2 | | | 35,262 | | | | 32,274 | |
| | 1,157 | | | Yum China Holdings, Inc., (Hong Kong)2 | | | 66,548 | | | | 49,262 | |
| | 1,288 | | | Yunnan Baiyao Group Co. Ltd., Cl A2 | | | 10,203 | | | | 8,928 | |
| | 1,140 | | | Zai Lab Limited, ADR1 | | | 71,628 | | | | 31,156 | |
| | | | | | | | | | | | |
| | Total China | | | 1,278,284 | | | | 1,015,670 | |
| | | | | | | | | | | | |
| | |
| France (0.74%) | | | | | | |
| | 182 | | | Pernod Ricard SA2 | | | 39,599 | | | | 32,164 | |
| | | | | | | | | | | | |
| | |
| Hong Kong (3.33%) | | | | | | |
| | 4,881 | | | AIA Group Ltd.2 | | | 52,861 | | | | 42,479 | |
| | 21,121 | | | Budweiser Brewing Co. APAC Ltd., 144A2 | | | 53,179 | | | | 39,595 | |
| | 592 | | | Hong Kong Exchanges & Clearing Ltd.2 | | | 33,138 | | | | 20,306 | |
| | 3,513 | | | Techtronic Industries Co. Ltd.2 | | | 52,649 | | | | 41,858 | |
| | | | | | | | | | | | |
| | Total Hong Kong | | | 191,827 | | | | 144,238 | |
| | | | | | | | | | | | |
| | |
| India (42.76%) | | | | | | |
| | 3,704 | | | 360 ONE WAM Ltd. | | | 20,342 | | | | 31,597 | |
| | 4,904 | | | Aarti Pharmalabs Ltd.1 | | | 19,122 | | | | 29,728 | |
| | 898 | | | Amber Enterprises India Ltd.1,2 | | | 24,089 | | | | 33,806 | |
| | 402 | | | Apollo Hospitals Enterprise Ltd.2 | | | 26,281 | | | | 27,539 | |
| | 1,634 | | | Bajaj Finance Limited2 | | | 141,438 | | | | 143,778 | |
| | 7,301 | | | Bharti Airtel Ltd.2 | | | 68,273 | | | | 90,511 | |
| | 12,900 | | | Bharti Airtel Ltd. PP2 | | | 88,016 | | | | 98,803 | |
| | 2,074 | | | Cholamandalam Investment & Finance Co. Ltd.2 | | | 28,983 | | | | 31,370 | |
| | 720 | | | Divi’s Laboratories Ltd.2 | | | 46,193 | | | | 33,758 | |
| | 462 | | | Dixon Technologies India Ltd.2 | | | 26,382 | | | | 36,434 | |
| | 7,042 | | | Godrej Consumer Products Ltd.2 | | | 87,152 | | | | 95,693 | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
| | |
| India (continued) | | | | | | |
| | 2,914 | | | Godrej Properties Ltd.1,2 | | $ | 59,319 | | | $ | 70,437 | |
| | 4,151 | | | HDFC Bank Ltd.2 | | | 81,156 | | | | 84,996 | |
| | 35,035 | | | Jio Financial Services Ltd.1,2 | | | 96,710 | | | | 97,950 | |
| | 35,480 | | | JM Financial Limited2 | | | 35,541 | | | | 41,880 | |
| | 3,086 | | | Jubilant FoodWorks Ltd.2 | | | 24,881 | | | | 20,943 | |
| | 1,061 | | | Kaynes Technology India Ltd.1,2 | | | 31,797 | | | | 33,270 | |
| | 1,539 | | | Mahindra & Mahindra Ltd.2 | | | 28,943 | | | | 31,963 | |
| | 2,236 | | | Max Financial Services Ltd.1,2 | | | 32,837 | | | | 25,628 | |
| | 8,003 | | | Max Healthcare Institute Ltd. | | | 57,409 | | | | 65,999 | |
| | 1,632 | | | Neogen Chemicals Ltd.2 | | | 22,731 | | | | 29,005 | |
| | 1,917 | | | Reliance Industries Limited2 | | | 52,045 | | | | 59,500 | |
| | 4,364 | | | SBI Life Insurance Company Limited, 144A2 | | | 70,384 | | | | 75,103 | |
| | 3,091 | | | Tata Communications Ltd.2 | | | 53,628 | | | | 65,728 | |
| | 554 | | | Tata Consultancy Services Ltd.2 | | | 23,385 | | | | 25,231 | |
| | 4,298 | | | Tata Consumer Products Ltd.2 | | | 43,687 | | | | 56,105 | |
| | 1,851 | | | Titan Co. Ltd.2 | | | 56,096 | | | | 81,698 | |
| | 3,604 | | | Trent Ltd.2 | | | 72,481 | | | | 132,239 | |
| | 862 | | | Tube Investments of India Ltd.2 | | | 32,146 | | | | 36,671 | |
| | 112,299 | | | Zomato Ltd.1,2 | | | 128,718 | | | | 166,683 | |
| | | | | | | | | | | | |
| | Total India | | | 1,580,165 | | | | 1,854,046 | |
| | | | | | | | | | | | |
| | |
| Indonesia (1.95%) | | | | | | |
| | 226,900 | | | Bank Rakyat Indonesia (Persero) Tbk PT1,2 | | | 66,793 | | | | 84,332 | |
| | | | | | | | | | | | |
| | |
| Japan (3.27%) | | | | | | |
| | 440 | | | Hoya Corp.2 | | | 61,199 | | | | 54,797 | |
| | 97 | | | Keyence Corporation2 | | | 52,421 | | | | 42,618 | |
| | 249 | | | Tokyo Electron Limited2 | | | 36,123 | | | | 44,257 | |
| | | | | | | | | | | | |
| | Total Japan | | | 149,743 | | | | 141,672 | |
| | | | | | | | | | | | |
| | |
| Korea, Republic of (10.53%) | | | | | | |
| | 3,441 | | | Coupang, Inc., Cl A1 | | | 48,805 | | | | 55,710 | |
| | 396 | | | HD Hyundai Heavy Industries Co. Ltd.2 | | | 31,104 | | | | 39,503 | |
| | 281 | | | HD Korea Shipbuilding & Offshore
Engineering Co. Ltd.1,2 | | | 17,417 | | | | 26,282 | |
| | 872 | | | Korea Aerospace Industries Ltd.2 | | | 29,593 | | | | 33,757 | |
| | 4,062 | | | Samsung Electronics Co., Ltd.2 | | | 225,446 | | | | 246,550 | |
| | 28 | | | Samsung SDI Co. Ltd.2 | | | 15,317 | | | | 10,194 | |
| | 410 | | | SK Hynix, Inc.2 | | | 36,311 | | | | 44,747 | |
| | | | | | | | | | | | |
| | Total Korea, Republic of | | | 403,993 | | | | 456,743 | |
| | | | | | | | | | | | |
| | |
| Taiwan (8.95%) | | | | | | |
| | 6,553 | | | Delta Electronics, Inc.2 | | | 56,106 | | | | 66,830 | |
| | 6,698 | | | Taiwan Semiconductor
Manufacturing Co., Ltd.2 | | | 116,593 | | | | 128,411 | |
| | 1,855 | | | Taiwan Semiconductor
Manufacturing Co., Ltd., ADR | | | 171,557 | | | | 192,920 | |
| | | | | | | | | | | | |
| | Total Taiwan | | | 344,256 | | | | 388,161 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 4,054,660 | | | | 4,117,026 | |
| | | | | | | | | | | | |
| | |
| 40 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron New Asia Fund |
PORTFOLIO OF INVESTMENTS (Continued)
| | | | | | | | | | | | |
| Principal Amount | | Cost | | | Value | |
| Short Term Investments (6.24%) | |
| | $270,813 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $270,959; (Fully Collateralized by $268,100 U.S. Treasury Note, 4.50% due 7/15/2026 Market value - $276,245)2 | | $ | 270,813 | | | $ | 270,813 | |
| | | | | | | | | | | | |
| | Total Investments (101.19%) | | $ | 4,325,473 | | | | 4,387,839 | |
| | | | | | | | | | | | |
| | Liabilities Less Cash and Other Assets (-1.19%) | | | | (51,778 | ) |
| | | | | | | | | | | | |
| | Net Assets | | | $ | 4,336,061 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 2 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| ADR | American Depositary Receipt. |
| 144A | Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. At December 31, 2023, the market value of Rule 144A securities amounted to $114,698 or 2.65% of net assets. |
All securities are Level 1, unless otherwise noted.
| | | | |
Summary of Investments by Sector
as of December 31, 2023 | | Percentage of
Net Assets | |
| |
Information Technology | | | 21.5 | % |
| |
Consumer Discretionary | | | 20.7 | |
| |
Financials | | | 15.9 | |
| |
Communication Services | | | 12.9 | |
| |
Consumer Staples | | | 7.1 | |
| |
Industrials | | | 6.7 | |
| |
Health Care | | | 6.3 | |
| |
Real Estate | | | 1.6 | |
| |
Energy | | | 1.4 | |
| |
Materials | | | 0.7 | |
| |
Cash and Cash Equivalents* | | | 5.1 | |
| | | | 100.0 | %** |
| * | Includes short term investments, other assets and liabilities - net. |
| ** | Individual weights may not sum to 100% due to rounding. |
| | |
| See Notes to Financial Statements. | | 41 |
| | |
| Baron Technology Fund | | December 31, 2023 |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (95.58%) | |
| Communication Services (7.62%) | |
| | | | Advertising (2.82%) | | | | | | | | |
| | 3,538 | | | The Trade Desk, Inc., Cl A1 | | $ | 246,864 | | | $ | 254,594 | |
| | | |
| | | | Interactive Home Entertainment (0.88%) | | | | | | | | |
| | 496 | | | Take-Two Interactive Software, Inc.1 | | | 72,912 | | | | 79,831 | |
| | | |
| | | | Interactive Media & Services (3.92%) | | | | | | | | |
| | 582 | | | Alphabet, Inc., Cl C1 | | | 76,538 | | | | 82,021 | |
| | 767 | | | Meta Platforms, Inc., Cl A1 | | | 128,520 | | | | 271,488 | |
| | | | | | | | | | | | |
| | | | 205,058 | | | | 353,509 | |
| | | | | | | | | | | | |
| | Total Communication Services | | | 524,834 | | | | 687,934 | |
| | | | | | | | | | | | |
|
| Consumer Discretionary (14.91%) | |
| | | | Automobile Manufacturers (5.89%) | |
| | 4,000 | | | Rivian Automotive, Inc., Cl A1 | | | 59,041 | | | | 93,840 | |
| | 1,763 | | | Tesla, Inc.1 | | | 446,657 | | | | 438,070 | |
| | | | | | | | | | | | |
| | | | 505,698 | | | | 531,910 | |
| | | | Broadline Retail (7.86%) | |
| | 4,669 | | | Amazon.com, Inc.1 | | | 664,467 | | | | 709,408 | |
| |
| | | | Hotels, Resorts & Cruise Lines (1.16%) | |
| | 12,397 | | | eDreams ODIGEO SA (Spain)1,2,4 | | | 104,465 | | | | 104,937 | |
| | | | | | | | | | | | |
| | Total Consumer Discretionary | | | 1,274,630 | | | | 1,346,255 | |
| | | | | | | | | | | | |
|
| Financials (2.02%) | |
| | | |
| | | | Transaction & Payment Processing Services (2.02%) | | | | | | | | |
| | 214 | | | MasterCard, Incorporated, Cl A | | | 79,426 | | | | 91,273 | |
| | 352 | | | Visa, Inc., Cl A | | | 77,929 | | | | 91,643 | |
| | | | | | | | | | | | |
| | Total Financials | | | 157,355 | | | | 182,916 | |
| | | | | | | | | | | | |
|
| Industrials (2.43%) | |
| | | | Human Resource & Employment Services (2.43%) | | | | | | | | |
| | 3,266 | | | Ceridian HCM Holding, Inc.1 | | | 252,852 | | | | 219,214 | |
| | | | | | | | | | | | |
|
| Information Technology (66.99%) | |
| | | | Application Software (11.24%) | | | | | | | | |
| | 2,222 | | | Gitlab, Inc., Cl A1,3 | | | 94,167 | | | | 139,897 | |
| | 302 | | | HubSpot, Inc.1 | | | 152,192 | | | | 175,323 | |
| | 434 | | | Intuit, Inc. | | | 237,197 | | | | 271,263 | |
| | 256 | | | ServiceNow, Inc.1,3 | | | 135,432 | | | | 180,862 | |
| | 897 | | | Workday, Inc., Cl A1 | | | 201,628 | | | | 247,626 | |
| | | | | | | | | | | | |
| | | | 820,616 | | | | 1,014,971 | |
| | | |
| | | | Electronic Equipment & Instruments (1.49%) | | | | | | | | |
| | 3,086 | | | PAR Technology Corp.1 | | | 128,277 | | | | 134,364 | |
| | | |
| | | | Internet Services & Infrastructure (1.42%) | | | | | | | | |
| | 1,652 | | | Shopify, Inc., Cl A1,2 | | | 139,918 | | | | 128,691 | |
| | | |
| | | | IT Consulting & Other Services (2.02%) | | | | | | | | |
| | 404 | | | Gartner, Inc.1 | | | 134,061 | | | | 182,249 | |
| | | |
| | | | Semiconductor Materials &
Equipment (6.12%) | | | | | | | | |
| | 233 | | | ASML Holding N.V.2 | | | 151,665 | | | | 176,362 | |
| | 674 | | | BE Semiconductor Industries NV (Netherlands)2,4 | | | 78,394 | | | | 101,758 | |
| | 351 | | | Lam Research Corp. | | | 225,799 | | | | 274,924 | |
| | | | | | | | | | | | |
| | | | 455,858 | | | | 553,044 | |
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Common Stocks (continued) | |
|
| Information Technology (continued) | |
| | | |
| | | | Semiconductors (25.38%) | | | | | | | | |
| | 2,667 | | | Advanced Micro Devices, Inc.1 | | $ | 299,132 | | | $ | 393,142 | |
| | 173 | | | Broadcom, Inc. | | | 121,688 | | | | 193,111 | |
| | 22,578 | | | indie Semiconductor, Inc., Cl A1 | | | 167,398 | | | | 183,108 | |
| | 3,231 | | | Marvell Technology, Inc. | | | 166,305 | | | | 194,862 | |
| | 1,632 | | | Micron Technology, Inc. | | | 131,182 | | | | 139,275 | |
| | 155 | | | Monolithic Power Systems, Inc. | | | 64,586 | | | | 97,771 | |
| | 1,693 | | | NVIDIA Corp. | | | 559,425 | | | | 838,407 | |
| | 6,629 | | | Taiwan Semiconductor
Manufacturing Co. Ltd. (Taiwan)2,4 | | | 136,332 | | | | 127,088 | |
| | 1,204 | | | Taiwan Semiconductor
Manufacturing Co., Ltd., ADR2 | | | 113,125 | | | | 125,216 | |
| | | | | | | | | | | | |
| | | | 1,759,173 | | | | 2,291,980 | |
| |
| | | | Systems Software (15.02%) | |
| | 1,101 | | | Cloudflare, Inc., Cl A1,3 | | | 51,390 | | | | 91,669 | |
| | 520 | | | Crowdstrike Holdings, Inc., Cl A1 | | | 78,029 | | | | 132,766 | |
| | 796 | | | Datadog, Inc., Cl A1,3 | | | 66,818 | | | | 96,619 | |
| | 1,663 | | | Dynatrace, Inc.1,3 | | | 79,603 | | | | 90,950 | |
| | 2,391 | | | Microsoft Corporation | | | 786,269 | | | | 899,112 | |
| | 1,635 | | | SentinelOne, Inc., Cl A1 | | | 45,274 | | | | 44,864 | |
| | | | | | | | | | | | |
| | | | 1,107,383 | | | | 1,355,980 | |
| | | |
| | | | Technology Hardware, Storage &
Peripherals (4.30%) | | | | | | | | |
| | 2,017 | | | Apple, Inc. | | | 357,759 | | | | 388,333 | |
| | | | | | | | | | | | |
| | Total Information Technology | | | 4,903,045 | | | | 6,049,612 | |
| | | | | | | | | | | | |
| Real Estate (1.61%) | |
| | | | Real Estate Services (1.61%) | | | | | | | | |
| | 1,665 | | | CoStar Group, Inc.1 | | | 131,696 | | | | 145,504 | |
| | | | | | | | | | | | |
| | Total Common Stocks | | | 7,244,412 | | | | 8,631,435 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Principal Amount | | | | | | |
| Short Term Investments (3.79%) | |
| | $341,928 | | | Repurchase Agreement with Fixed Income Clearing Corp., dated 12/29/2023, 4.85% due 1/2/2024; Proceeds at maturity $342,112; (Fully Collateralized by $338,500 U.S. Treasury Note, 4.50% due 7/15/2026 Market value - $348,784)4 | | | 341,928 | | | | 341,928 | |
| | | | | | | | | | | | |
| | Total Investments (99.37%) | | $ | 7,586,340 | | | | 8,973,363 | |
| | | | | | | | | | | | |
| | Cash and Other Assets Less Liabilities (0.63%) | | | | | | | 56,851 | |
| | | | | | | | | |
| | Net Assets | | | | | | $ | 9,030,214 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
| 1 | Non-income producing securities. |
| 3 | The Adviser has reclassified/classified certain securities in or out of this sub-industry. Such reclassifications/classifications are not supported by S&P or MSCI (unaudited). |
| 4 | Level 2 security. See Note 7 regarding Fair Value Measurements. |
| ADR | American Depositary Receipt. |
All securities are Level 1, unless otherwise noted.
| | |
| 42 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
STATEMENTS OF ASSETS AND LIABILITIES
| | | | | | | | | | | | | | | | |
| | | Baron Partners
Fund | | | Baron Focused
Growth Fund | | | Baron
International
Growth Fund | | | Baron Real
Estate Fund | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities, at value* | | $ | 7,922,294,205 | | | $ | 1,333,912,224 | | | $ | 513,202,931 | | | $ | 1,737,371,221 | |
Foreign currency, at value† | | | — | | | | — | | | | 2,059 | | | | — | |
Cash | | | — | | | | — | | | | — | | | | 99,372 | |
Receivable for securities sold | | | 13,092,605 | | | | — | | | | — | | | | — | |
Receivable for capital shares sold | | | 5,202,430 | | | | 5,115,984 | | | | 168,988 | | | | 3,190,088 | |
Dividends and interest receivable | | | 2,581,333 | | | | 1,124,812 | | | | 670,605 | | | | 2,061,918 | |
Prepaid expenses | | | 424,383 | | | | 1,613 | | | | 1,008 | | | | 2,801 | |
| | | | | | | | | | | | | | | | |
| | | 7,943,594,956 | | | | 1,340,154,633 | | | | 514,045,591 | | | | 1,742,725,400 | |
| | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payable for borrowings against line of credit | | | 987,000,000 | | | | — | | | | — | | | | — | |
Payable for capital shares redeemed | | | 5,404,816 | | | | 607,141 | | | | 420,540 | | | | 1,924,170 | |
Due to custodian bank | | | 622,000 | | | | 65,000 | | | | 16,000 | | | | — | |
Distribution fees payable (Note 4) | | | 762 | | | | 883 | | | | 177 | | | | 147 | |
Investment advisory fees payable (Note 4) | | | 48 | | | | 851 | | | | 728 | | | | 755 | |
Payable for securities purchased | | | — | | | | 3,665,703 | | | | — | | | | — | |
Accrued capital gains taxes | | | — | | | | — | | | | 1,521,891 | | | | — | |
Other accrued expenses and other payables | | | 5,780,268 | | | | 120,840 | | | | 125,862 | | | | 201,294 | |
| | | | | | | | | | | | | | | | |
| | | 998,807,894 | | | | 4,460,418 | | | | 2,085,198 | | | | 2,126,366 | |
| | | | | | | | | | | | | | | | |
Net Assets | | $ | 6,944,787,062 | | | $ | 1,335,694,215 | | | $ | 511,960,393 | | | $ | 1,740,599,034 | |
| | | | | | | | | | | | | | | | |
Net Assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 1,219,105,809 | | | $ | 922,921,005 | | | $ | 488,647,020 | | | $ | 1,408,523,742 | |
Distributable earnings/(losses) | | | 5,725,681,253 | | | | 412,773,210 | | | | 23,313,373 | | | | 332,075,292 | |
| | | | | | | | | | | | | | | | |
Net Assets | | $ | 6,944,787,062 | | | $ | 1,335,694,215 | | | $ | 511,960,393 | | | $ | 1,740,599,034 | |
| | | | | | | | | | | | | | | | |
Retail Shares: | | | | | | | | | | | | | | | | |
Net Assets | | $ | 2,959,916,411 | | | $ | 316,898,135 | | | $ | 76,016,232 | | | $ | 381,401,123 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 18,542,605 | | | | 8,694,474 | | | | 2,987,076 | | | | 10,984,550 | |
| | | | | | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 159.63 | | | $ | 36.45 | | | $ | 25.45 | | | $ | 34.72 | |
| | | | | | | | | | | | | | | | |
Institutional Shares: | | | | | | | | | | | | | | | | |
Net Assets | | $ | 3,464,422,416 | | | $ | 690,491,244 | | | $ | 314,550,358 | | | $ | 1,319,116,617 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 20,843,541 | | | | 18,128,797 | | | | 12,107,227 | | | | 36,900,344 | |
| | | | | | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 166.21 | | | $ | 38.09 | | | $ | 25.98 | | | $ | 35.75 | |
| | | | | | | | | | | | | | | | |
R6 Shares: | | | | | | | | | | | | | | | | |
Net Assets | | $ | 520,448,235 | | | $ | 328,304,836 | | | $ | 121,393,803 | | | $ | 40,081,294 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 3,131,829 | | | | 8,612,510 | | | | 4,675,210 | | | | 1,121,304 | |
| | | | | | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 166.18 | | | $ | 38.12 | | | $ | 25.97 | | | $ | 35.75 | |
| | | | | | | | | | | | | | | | |
| | | | |
*Total investments, at cost | | $ | 1,688,805,882 | | | $ | 827,853,799 | | | $ | 411,543,033 | | | $ | 1,276,437,460 | |
| | | | | | | | | | | | | | | | |
| | | | |
†Foreign currency, at cost: | | $ | — | | | $ | — | | | $ | 2,002 | | | $ | — | |
| | | | | | | | | | | | | | | | |
| | |
| See Notes to Financial Statements. | | 43 |
| | |
| Baron Select Funds | | December 31, 2023 |
STATEMENTS OF ASSETS AND LIABILITIES (Continued)
| | | | | | | | | | | | | | | | |
| | | Baron
Emerging
Markets Fund | | | Baron Global
Advantage
Fund | | | Baron Real
Estate
Income Fund | | | Baron
Health Care
Fund | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities, at value* | | $ | 4,566,393,465 | | | $ | 686,661,259 | | | $ | 147,494,941 | | | $ | 210,293,445 | |
Foreign currency, at value† | | | 261,432 | | | | — | | | | — | | | | — | |
Cash | | | — | | | | 8,725 | | | | 31,716 | | | | — | |
Receivable for securities sold | | | 0 | | | | 1,985,172 | | | | — | | | | — | |
Receivable for capital shares sold | | | 5,600,487 | | | | 359,616 | | | | 132,673 | | | | 1,026,561 | |
Dividends and interest receivable | | | 6,433,104 | | | | — | | | | 489,695 | | | | 125,491 | |
Prepaid expenses | | | 9,958 | | | | 1,633 | | | | 165 | | | | 397 | |
| | | | | | | | | | | | | | | | |
| | | 4,578,698,446 | | | | 689,016,405 | | | | 148,149,190 | | | | 211,445,894 | |
| | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payable for borrowings against line of credit | | | — | | | | 700,000 | | | | — | | | | — | |
Payable for capital shares redeemed | | | 7,537,664 | | | | 2,295,650 | | | | 19,051 | | | | 316,845 | |
Due to custodian bank | | | 53,000 | | | | — | | | | — | | | | 10,000 | |
Distribution fees payable (Note 4) | | | 647 | | | | 545 | | | | 193 | | | | 773 | |
Investment advisory fees payable (Note 4) | | | 236 | | | | 700 | | | | 346 | | | | 641 | |
Payable for securities purchased | | | — | | | | — | | | | — | | | | 622,655 | |
Accrued capital gains taxes | | | 28,684,568 | | | | — | | | | — | | | | — | |
Other accrued expenses and other payables | | | 1,436,334 | | | | 225,895 | | | | 46,426 | | | | 62,576 | |
| | | | | | | | | | | | | | | | |
| | | 37,712,449 | | | | 3,222,790 | | | | 66,016 | | | | 1,013,490 | |
| | | | | | | | | | | | | | | | |
Net Assets | | $ | 4,540,985,997 | | | $ | 685,793,615 | | | $ | 148,083,174 | | | $ | 210,432,404 | |
| | | | | | | | | | | | | | | | |
Net Assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 5,119,406,285 | | | $ | 859,572,479 | | | $ | 155,133,303 | | | $ | 206,618,945 | |
Distributable earnings/(losses) | | | (578,420,288 | ) | | | (173,778,864 | ) | | | (7,050,129 | ) | | | 3,813,459 | |
| | | | | | | | | | | | | | | | |
Net Assets | | $ | 4,540,985,997 | | | $ | 685,793,615 | | | $ | 148,083,174 | | | $ | 210,432,404 | |
| | | | | | | | | | | | | | | | |
Retail Shares: | | | | | | | | | | | | | | | | |
Net Assets | | $ | 253,219,733 | | | $ | 205,503,423 | | | $ | 13,840,659 | | | $ | 49,808,413 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 18,181,579 | | | | 6,694,584 | | | | 964,412 | | | | 2,652,045 | |
| | | | | | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 13.93 | | | $ | 30.70 | | | $ | 14.35 | | | $ | 18.78 | |
| | | | | | | | | | | | | | | | |
Institutional Shares: | | | | | | | | | | | | | | | | |
Net Assets | | $ | 4,279,569,656 | | | $ | 470,017,617 | | | $ | 132,655,624 | | | $ | 154,716,568 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 305,249,268 | | | | 14,924,997 | | | | 9,132,115 | | | | 8,119,650 | |
| | | | | | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 14.02 | | | $ | 31.49 | | | $ | 14.53 | | | $ | 19.05 | |
| | | | | | | | | | | | | | | | |
R6 Shares: | | | | | | | | | | | | | | | | |
Net Assets | | $ | 8,196,608 | | | $ | 10,272,575 | | | $ | 1,586,891 | | | $ | 5,907,423 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 584,387 | | | | 326,056 | | | | 109,353 | | | | 310,137 | |
| | | | | | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 14.03 | | | $ | 31.51 | | | $ | 14.51 | | | $ | 19.05 | |
| | | | | | | | | | | | | | | | |
| | | | |
*Total investments, at cost | | $ | 3,658,382,348 | | | $ | 454,957,709 | | | $ | 128,920,534 | | | $ | 165,438,606 | |
| | | | | | | | | | | | | | | | |
| | | | |
†Foreign currency, at cost: | | $ | 260,409 | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
| | |
| 44 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
STATEMENTS OF ASSETS AND LIABILITIES (Continued)
| | | | | | | | | | | | |
| | | Baron FinTech
Fund | | | Baron New Asia
Fund | | | Baron
Technology
Fund | |
Assets: | | | | | | | | | | | | |
Investments in securities, at value* | | $ | 59,624,895 | | | $ | 4,387,839 | | | $ | 8,973,363 | |
Foreign currency, at value† | | | — | | | | 584 | | | | — | |
Cash | | | — | | | | 27,180 | | | | 36,945 | |
Receivable for securities sold | | | — | | | | — | | | | 18,555 | |
Receivable for capital shares sold | | | 4,450 | | | | 2,285 | | | | 60,320 | |
Dividends and interest receivable | | | 29,694 | | | | 3,743 | | | | 2,006 | |
Prepaid expenses | | | 92 | | | | 8 | | | | 7 | |
| | | | | | | | | | | | |
| | | 59,659,131 | | | | 4,421,639 | | | | 9,091,196 | |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | |
Payable for borrowings against line of credit | | | — | | | | — | | | | — | |
Payable for capital shares redeemed | | | 10,174 | | | | — | | | | 3,476 | |
Due to custodian bank | | | 1,000 | | | | — | | | | — | |
Distribution fees payable (Note 4) | | | 753 | | | | 714 | | | | 833 | |
Investment advisory fees payable (Note 4) | | | 453 | | | | — | | | | — | |
Payable for securities purchased | | | — | | | | — | | | | 5,175 | |
Accrued capital gains taxes | | | — | | | | 37,103 | | | | — | |
Other accrued expenses and other payables | | | 47,866 | | | | 47,761 | | | | 51,498 | |
| | | | | | | | | | | | |
| | | 60,246 | | | | 85,578 | | | | 60,982 | |
| | | | | | | | | | | | |
Net Assets | | $ | 59,598,885 | | | $ | 4,336,061 | | | $ | 9,030,214 | |
| | | | | | | | | | | | |
Net Assets consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 61,510,807 | | | $ | 5,355,026 | | | $ | 8,572,994 | |
Distributable earnings/(losses) | | | (1,911,922 | ) | | | (1,018,965 | ) | | | 457,220 | |
| | | | | | | | | | | | |
Net Assets | | $ | 59,598,885 | | | $ | 4,336,061 | | | $ | 9,030,214 | |
| | | | | | | | | | | | |
Retail Shares: | | | | | | | | | | | | |
Net Assets | | $ | 7,333,931 | | | $ | 982,184 | | | $ | 4,961,500 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 520,768 | | | | 125,713 | | | | 549,228 | |
| | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 14.08 | | | $ | 7.81 | | | $ | 9.03 | |
| | | | | | | | | | | | |
Institutional Shares: | | | | | | | | | | | | |
Net Assets | | $ | 42,078,849 | | | $ | 1,555,268 | | | $ | 1,445,478 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 2,959,370 | | | | 197,917 | | | | 158,888 | |
| | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 14.22 | | | $ | 7.86 | | | $ | 9.10 | |
| | | | | | | | | | | | |
R6 Shares: | | | | | | | | | | | | |
Net Assets | | $ | 10,186,105 | | | $ | 1,798,609 | | | $ | 2,623,236 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 716,291 | | | | 228,691 | | | | 288,967 | |
| | | | | | | | | | | | |
Net Asset Value Per Share | | $ | 14.22 | | | $ | 7.86 | | | $ | 9.08 | |
| | | | | | | | | | | | |
| | | |
*Total investments, at cost | | $ | 54,465,203 | | | $ | 4,325,473 | | | $ | 7,586,340 | |
| | | | | | | | | | | | |
| | | |
†Foreign currency, at cost: | | $ | — | | | $ | 580 | | | $ | — | |
| | | | | | | | | | | | |
| | |
| See Notes to Financial Statements. | | 45 |
| | |
| Baron Select Funds | | December 31, 2023 |
STATEMENTS OF OPERATIONS
|
FOR THE YEAR ENDED DECEMBER 31, 2023 |
| | | | | | | | | | | | | | | | |
| | | Baron Partners
Fund | | | Baron Focused
Growth Fund | | | Baron
International
Growth Fund | | | Baron Real
Estate Fund | |
Investment income(loss): | | | | | | | | | | | | | | | | |
Income: | | | | | | | | | | | | | | | | |
Dividends1 | | $ | 29,021,567 | | | $ | 6,287,365 | | | $ | 6,524,566 | | | $ | 19,749,446 | |
Interest2 | | | 16,295 | | | | 1,387,588 | | | | 1,474,570 | | | | 3,642,153 | |
| | | | | | | | | | | | | | | | |
Total income | | | 29,037,862 | | | | 7,674,953 | | | | 7,999,136 | | | | 23,391,599 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Investment advisory fees (Note 4) | | | 61,942,232 | | | | 10,306,111 | | | | 4,411,487 | | | | 14,916,804 | |
Distribution fees — Retail Shares (Note 4) | | | 6,744,728 | | | | 617,699 | | | | 180,702 | | | | 870,622 | |
Shareholder servicing agent fees and expenses — Retail Shares | | | 189,650 | | | | 40,670 | | | | 20,774 | | | | 42,665 | |
Shareholder servicing agent fees and expenses — Institutional Shares | | | 85,620 | | | | 25,646 | | | | 21,718 | | | | 45,331 | |
Shareholder servicing agent fees and expenses — R6 Shares | | | 29,981 | | | | 18,948 | | | | 7,605 | | | | 1,973 | |
Reports to shareholders | | | 640,600 | | | | 185,950 | | | | 78,100 | | | | 357,050 | |
Line of credit fees | | | 599,980 | | | | 20,459 | | | | 9,605 | | | | 27,283 | |
Trustee fees and expenses (Note 4) | | | 334,843 | | | | 54,264 | | | | 27,775 | | | | 80,841 | |
Registration and filing fees | | | 249,460 | | | | 105,430 | | | | 80,200 | | | | 137,760 | |
Professional fees | | | 231,290 | | | | 66,398 | | | | 64,203 | | | | 59,610 | |
Custodian and fund accounting fees | | | 204,908 | | | | 42,845 | | | | 173,761 | | | | 35,892 | |
Insurance expense | | | 87,640 | | | | 12,564 | | | | 8,025 | | | | 22,347 | |
Administration fees | | | 65,152 | | | | 47,662 | | | | 46,201 | | | | 49,436 | |
Miscellaneous expenses | | | 2,400 | | | | 2,451 | | | | 2,451 | | | | 2,450 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 71,408,484 | | | | 11,547,097 | | | | 5,132,607 | | | | 16,650,064 | |
| | | | | | | | | | | | | | | | |
Interest expense on borrowings | | | 58,585,907 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total gross expenses | | | 129,994,391 | | | | 11,547,097 | | | | 5,132,607 | | | | 16,650,064 | |
Management fees waived/expenses reimbursed — Retail Shares (Note 4) | | | — | | | | — | | | | (41,337 | ) | | | — | |
Management fees waived/expenses reimbursed — Institutional Shares (Note 4) | | | — | | | | — | | | | (108,342 | ) | | | — | |
Management fees waived/expenses reimbursed — R6 Shares (Note 4) | | | — | | | | — | | | | (40,291 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Total net expenses | | | 129,994,391 | | | | 11,547,097 | | | | 4,942,637 | | | | 16,650,064 | |
| | | | | | | | | | | | | | | | |
Net investment income (loss) | | | (100,956,529 | ) | | | (3,872,144 | ) | | | 3,056,499 | | | | 6,741,535 | |
| | | | | | | | | | | | | | | | |
Realized and unrealized gain (loss) on investments: | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investments sold | | | (157,491,291 | ) | | | (13,273,815 | ) | | | (27,578,912 | )3 | | | 12,255,756 | |
Net realized gain (loss) on foreign currency transactions | | | (13,989 | ) | | | — | | | | (77,188 | ) | | | 6,280 | |
Change in net unrealized appreciation (depreciation) of: | | | | | | | | | | | | | | | | |
Investments | | | 2,335,451,959 | | | | 248,550,090 | | | | 60,222,718 | 4 | | | 316,689,615 | |
Foreign currency translations | | | — | | | | — | | | | 27,571 | | | | — | |
| | | | | | | | | | | | | | | | |
Net gain (loss) on investments | | | 2,177,946,679 | | | | 235,276,275 | | | | 32,594,189 | | | | 328,951,651 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | $ | 2,076,990,150 | | | $ | 231,404,131 | | | $ | 35,650,688 | | | $ | 335,693,186 | |
| | | | | | | | | | | | | | | | |
1 Net of foreign taxes withheld on dividends of | | $ | 17,700 | | | $ | — | | | $ | 762,005 | | | $ | 184,347 | |
| | | | | | | | | | | | | | | | |
2 Net of foreign taxes withheld on interest of | | $ | — | | | $ | — | | | $ | 70 | | | $ | — | |
| | | | | | | | | | | | | | | | |
3 Net of realized foreign capital gains tax of | | $ | — | | | $ | — | | | $ | 224,783 | | | $ | — | |
| | | | | | | | | | | | | | | | |
4 Increase in accrued foreign capital gains tax payable of | | $ | — | | | $ | — | | | $ | 910,997 | | | $ | — | |
| | | | | | | | | | | | | | | | |
| | |
| 46 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
STATEMENTS OF OPERATIONS (Continued)
|
FOR THE YEAR ENDED DECEMBER 31, 2023 |
| | | | | | | | | | | | | | | | |
| | | Baron Emerging
Markets Fund | | | Baron Global
Advantage Fund | | | Baron Real
Estate Income
Fund | | | Baron Health
Care Fund | |
Investment income(loss): | | | | | | | | | | | | | | | | |
Income: | | | | | | | | | | | | | | | | |
Dividends1 | | $ | 66,856,763 | | | $ | 341,371 | | | $ | 2,798,075 | | | $ | 1,238,076 | |
Interest2 | | | 10,864,447 | | | | 63,114 | | | | 191,449 | | | | 573,817 | |
| | | | | | | | | | | | | | | | |
Total income | | | 77,721,210 | | | | 404,485 | | | | 2,989,524 | | | | 1,811,893 | |
| | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Investment advisory fees (Note 4) | | | 47,612,030 | | | | 6,411,170 | | | | 805,138 | | | | 1,543,878 | |
Distribution fees — Retail Shares (Note 4) | | | 680,750 | | | | 543,228 | | | | 34,761 | | | | 128,012 | |
Shareholder servicing agent fees and expenses — Retail Shares | | | 33,710 | | | | 30,079 | | | | 15,854 | | | | 41,320 | |
Shareholder servicing agent fees and expenses — Institutional Shares | | | 137,110 | | | | 26,588 | | | | 14,054 | | | | 14,968 | |
Shareholder servicing agent fees and expenses — R6 Shares | | | 702 | | | | 689 | | | | 50 | | | | 327 | |
Reports to shareholders | | | 1,395,600 | | | | 152,870 | | | | 22,273 | | | | 54,110 | |
Line of credit fees | | | 82,780 | | | | 5,943 | | | | 1,904 | | | | 4,222 | |
Trustee fees and expenses (Note 4) | | | 266,797 | | | | 42,664 | | | | 5,620 | | | | 11,462 | |
Registration and filing fees | | | 160,850 | | | | 81,900 | | | | 52,520 | | | | 51,650 | |
Professional fees | | | 279,030 | | | | 111,990 | | | | 65,841 | | | | 60,904 | |
Custodian and fund accounting fees | | | 2,769,842 | | | | 158,047 | | | | 14,291 | | | | 16,670 | |
Insurance expense | | | 82,011 | | | | 14,115 | | | | 1,356 | | | | 3,344 | |
Administration fees | | | 61,456 | | | | 44,107 | | | | 45,024 | | | | 45,151 | |
Miscellaneous expenses | | | 3,199 | | | | 3,121 | | | | 2,458 | | | | 2,557 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 53,565,867 | | | | 7,626,511 | | | | 1,081,144 | | | | 1,978,575 | |
| | | | | | | | | | | | | | | | |
Interest expense on borrowings | | | — | | | | 105,317 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total gross expenses | | | 53,565,867 | | | | 7,731,828 | | | | 1,081,144 | | | | 1,978,575 | |
Management fees waived/expenses reimbursed — Retail Shares (Note 4) | | | — | | | | (97,448 | ) | | | (37,516 | ) | | | (52,276 | ) |
Management fees waived/expenses reimbursed — Institutional Shares (Note 4) | | | — | | | | (192,311 | ) | | | (148,725 | ) | | | (47,012 | ) |
Management fees waived/expenses reimbursed — R6 Shares (Note 4) | | | — | | | | (3,762 | ) | | | (1,327 | ) | | | (1,547 | ) |
| | | | | | | | | | | | | | | | |
Total net expenses | | | 53,565,867 | | | | 7,438,307 | | | | 893,576 | | | | 1,877,740 | |
| | | | | | | | | | | | | | | | |
Net investment income (loss) | | | 24,155,343 | | | | (7,033,822 | ) | | | 2,095,948 | | | | (65,847 | ) |
| | | | | | | | | | | | | | | | |
Realized and unrealized gain (loss) on investments: | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investments sold | | | (270,342,478 | )3 | | | (79,755,916 | )3 | | | (4,765,842 | ) | | | (2,701,527 | ) |
Net realized gain (loss) on foreign currency transactions | | | (1,909,315 | ) | | | (31,026 | ) | | | (793 | ) | | | 34,579 | |
Change in net unrealized appreciation (depreciation) of: | | | | | | | | | | | | | | | | |
Investments | | | 609,291,126 | 4 | | | 256,276,035 | 4 | | | 18,322,473 | | | | 15,141,244 | |
Foreign currency translations | | | 43,525 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net gain (loss) on investments | | | 337,082,858 | | | | 176,489,093 | | | | 13,555,838 | | | | 12,474,296 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | $ | 361,238,201 | | | $ | 169,455,271 | | | $ | 15,651,786 | | | $ | 12,408,449 | |
| | | | | | | | | | | | | | | | |
1 Net of foreign taxes withheld on dividends of | | $ | 8,865,116 | | | $ | 67,467 | | | $ | 31,282 | | | $ | 1,455 | |
| | | | | | | | | | | | | | | | |
2 Net of foreign taxes withheld on interest of | | $ | 451 | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
3 Net of realized foreign capital gains tax of | | $ | 5,725,742 | | | $ | 198,372 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
4 Increase (decrease) in accrued foreign capital gains tax payable of | | $ | 19,168,056 | | | $ | (1,900,898 | ) | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
| | |
| See Notes to Financial Statements. | | 47 |
| | |
| Baron Select Funds | | December 31, 2023 |
STATEMENTS OF OPERATIONS (Continued)
|
FOR THE YEAR ENDED DECEMBER 31, 2023 |
| | | | | | | | | | | | |
| | | Baron FinTech
Fund | | | Baron New Asia
Fund | | | Baron
Technology
Fund | |
Investment income(loss): | | | | | | | | | | | | |
Income: | | | | | | | | | | | | |
Dividends1 | | $ | 364,869 | | | $ | 44,418 | | | $ | 18,777 | |
Interest | | | 54,165 | | | | 14,485 | | | | 7,968 | |
| | | | | | | | | | | | |
Total income | | | 419,034 | | | | 58,903 | | | | 26,745 | |
| | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | |
Investment advisory fees (Note 4) | | | 400,280 | | | | 42,019 | | | | 45,394 | |
Distribution fees — Retail Shares (Note 4) | | | 16,820 | | | | 2,500 | | | | 6,813 | |
Shareholder servicing agent fees and expenses — Retail Shares | | | 15,654 | | | | 9,394 | | | | 15,429 | |
Shareholder servicing agent fees and expenses — Institutional Shares | | | 12,034 | | | | 11,025 | | | | 11,060 | |
Shareholder servicing agent fees and expenses — R6 Shares | | | 550 | | | | 91 | | | | 112 | |
Reports to shareholders | | | 16,471 | | | | 3,876 | | | | 4,584 | |
Line of credit fees | | | 802 | | | | 94 | | | | 111 | |
Trustee fees and expenses (Note 4) | | | 2,698 | | | | 230 | | | | 287 | |
Registration and filing fees | | | 50,700 | | | | 47,260 | | | | 55,210 | |
Professional fees | | | 56,730 | | | | 72,660 | | | | 56,090 | |
Custodian and fund accounting fees | | | 13,016 | | | | 47,118 | | | | 10,519 | |
Insurance expense | | | 769 | | | | 65 | | | | 58 | |
Administration fees | | | 44,493 | | | | 44,787 | | | | 39,623 | |
Miscellaneous expenses | | | 2,459 | | | | 2,447 | | | | 2,458 | |
| | | | | | | | | | | | |
Total operating expenses | | | 633,476 | | | | 283,566 | | | | 247,748 | |
| | | | | | | | | | | | |
Interest expense on borrowings | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Total gross expenses | | | 633,476 | | | | 283,566 | | | | 247,748 | |
Management fees waived/expenses reimbursed — Retail Shares (Note 4) | | | (30,918 | ) | | | (59,198 | ) | | | (92,029 | ) |
Management fees waived/expenses reimbursed — Institutional Shares (Note 4) | | | (89,858 | ) | | | (87,785 | ) | | | (36,435 | ) |
Management fees waived/expenses reimbursed — R6 Shares (Note 4) | | | (20,546 | ) | | | (83,670 | ) | | | (58,565 | ) |
| | | | | | | | | | | | |
Total net expenses | | | 492,154 | | | | 52,913 | | | | 60,719 | |
| | | | | | | | | | | | |
Net investment income (loss) | | | (73,120 | ) | | | 5,990 | | | | (33,974 | ) |
| | | | | | | | | | | | |
Realized and unrealized gain (loss) on investments: | | | | | | | | | | | | |
Net realized gain (loss) on investments sold | | | (2,486,234 | ) | | | (546,311 | ) | | | (492,745 | ) |
Net realized gain (loss) on foreign currency transactions | | | 1,190 | | | | (2,701 | ) | | | (161 | ) |
Change in net unrealized appreciation (depreciation) of | | | | | | | | | | | | |
Investments | | | 14,978,959 | | | | 764,452 | 2 | | | 3,027,401 | |
Foreign currency translations | | | — | | | | 17 | | | | 4 | |
| | | | | | | | | | | | |
Net gain (loss) on investments | | | 12,493,915 | | | | 215,457 | | | | 2,534,499 | |
| | | | | | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | $ | 12,420,795 | | | $ | 221,447 | | | $ | 2,500,525 | |
| | | | | | | | | | | | |
1 Net of foreign taxes withheld on dividends of | | $ | — | | | $ | 6,549 | | | $ | 988 | |
| | | | | | | | | | | | |
2 Increase in accrued foreign capital gains tax payable of | | $ | — | | | $ | 35,878 | | | $ | — | |
| | | | | | | | | | | | |
| | |
| 48 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Baron Partners Fund | | | Baron Focused Growth Fund | | | Baron International Growth Fund | |
| | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | |
Increase (Decrease) in Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | (100,956,529 | ) | | $ | (75,381,774 | ) | | $ | (3,872,144 | ) | | $ | (3,984,029 | ) | | $ | 3,056,499 | | | $ | 1,477,513 | |
Net realized gain (loss) | | | (157,505,280 | ) | | | (265,006,363 | ) | | | (13,273,815 | ) | | | (80,011,397 | ) | | | (27,656,100 | ) | | | (34,611,408 | ) |
Change in net unrealized appreciation (depreciation) | | | 2,335,451,959 | | | | (3,339,810,395 | ) | | | 248,550,090 | | | | (171,073,560 | ) | | | 60,250,289 | | | | (172,726,384 | ) |
Voluntary payment from Adviser | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets resulting from operations | | | 2,076,990,150 | | | | (3,680,198,532 | ) | | | 231,404,131 | | | | (255,068,986 | ) | | | 35,650,688 | | | | (205,860,279 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to shareholders from (Note 8): | | | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings — Retail Shares | | | — | | | | (68,063,872 | ) | | | — | | | | (18,933,575 | ) | | | (269,980 | ) | | | (915,413 | ) |
Distributable earnings — Institutional Shares | | | — | | | | (72,259,596 | ) | | | — | | | | (29,459,747 | ) | | | (1,804,572 | ) | | | (3,986,597 | ) |
Distributable earnings — R6 Shares | | | — | | | | (10,782,528 | ) | | | — | | | | (26,677,072 | ) | | | (696,052 | ) | | | (1,368,153 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Decrease in net assets from distributions to shareholders | | | — | | | | (151,105,996 | ) | | | — | | | | (75,070,394 | ) | | | (2,770,604 | ) | | | (6,270,163 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the sale of shares — Retail Shares | | | 355,190,468 | | | | 398,339,883 | | | | 151,146,892 | | | | 82,836,180 | | | | 23,092,120 | | | | 22,294,374 | |
Proceeds from the sale of shares — Institutional Shares | | | 688,166,838 | | | | 751,295,223 | | | | 388,100,609 | | | | 164,997,120 | | | | 71,220,517 | | | | 122,814,951 | |
Proceeds from the sale of shares — R6 Shares | | | 10,042,606 | | | | 9,899,960 | | | | 11,089,009 | | | | 28,163,593 | | | | 5,559,120 | | | | 2,850,938 | |
Net asset value of shares issued in reinvestment of distributions — Retail Shares | | | — | | | | 65,040,643 | | | | — | | | | 17,980,369 | | | | 264,640 | | | | 898,076 | |
Net asset value of shares issued in reinvestment of distributions — Institutional Shares | | | — | | | | 66,530,390 | | | | — | | | | 28,878,758 | | | | 1,785,299 | | | | 3,930,642 | |
Net asset value of shares issues in reinvestment of distribution — R6 Shares | | | — | | | | 10,782,358 | | | | — | | | | 26,674,109 | | | | 696,053 | | | | 1,368,153 | |
Cost of shares redeemed — Retail Shares | | | (437,752,854 | ) | | | (516,267,316 | ) | | | (62,689,099 | ) | | | (53,073,738 | ) | | | (19,130,327 | ) | | | (26,130,321 | ) |
Cost of shares redeemed — Institutional Shares | | | (567,565,311 | ) | | | (774,038,148 | ) | | | (104,575,692 | ) | | | (73,222,570 | ) | | | (82,237,151 | ) | | | (182,849,146 | ) |
Cost of shares redeemed — R6 Shares | | | (6,188,636 | ) | | | (11,744,747 | ) | | | (6,298,090 | ) | | | (3,769,962 | ) | | | (4,827,045 | ) | | | (8,062,072 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets derived from capital share transactions | | | 41,893,111 | | | | (161,754 | ) | | | 376,773,629 | | | | 219,463,859 | | | | (3,576,774 | ) | | | (62,884,405 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 2,118,883,261 | | | | (3,831,466,282 | ) | | | 608,177,760 | | | | (110,675,521 | ) | | | 29,303,310 | | | | (275,014,847 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of year | | | 4,825,903,801 | | | | 8,657,370,083 | | | | 727,516,455 | | | | 838,191,976 | | | | 482,657,083 | | | | 757,671,930 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
End of year | | $ | 6,944,787,062 | | | $ | 4,825,903,801 | | | $ | 1,335,694,215 | | | $ | 727,516,455 | | | $ | 511,960,393 | | | $ | 482,657,083 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — Retail Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 2,460,850 | | | | 2,524,336 | | | | 4,483,400 | | | | 2,330,875 | | | | 937,676 | | | | 823,044 | |
Shares issued in reinvestment of distributions | | | — | | | | 451,953 | | | | — | | | | 592,044 | | | | 10,873 | | | | 43,554 | |
Shares redeemed | | | (3,069,315 | ) | | | (3,439,409 | ) | | | (1,882,429 | ) | | | (1,542,264 | ) | | | (769,094 | ) | | | (1,067,572 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (608,465 | ) | | | (463,120 | ) | | | 2,600,971 | | | | 1,380,655 | | | | 179,455 | | | | (200,974 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — Institutional Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 4,650,011 | | | | 4,793,892 | | | | 11,070,554 | | | | 4,565,527 | | | | 2,811,311 | | | | 4,694,726 | |
Shares issued in reinvestment of distributions | | | — | | | | 445,437 | | | | — | | | | 913,018 | | | | 71,872 | | | | 186,907 | |
Shares redeemed | | | (3,915,668 | ) | | | (5,166,867 | ) | | | (3,014,353 | ) | | | (2,083,927 | ) | | | (3,277,033 | ) | | | (7,055,251 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 734,343 | | | | 72,462 | | | | 8,056,201 | | | | 3,394,618 | | | | (393,850 | ) | | | (2,173,618 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — R6 Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 66,908 | | | | 61,296 | | | | 317,595 | | | | 790,694 | | | | 226,005 | | | | 102,702 | |
Shares issued in reinvestment of distributions | | | — | | | | 72,195 | | | | — | | | | 842,784 | | | | 28,033 | | | | 65,088 | |
Shares redeemed | | | (41,442 | ) | | | (74,154 | ) | | | (179,386 | ) | | | (110,890 | ) | | | (200,345 | ) | | | (280,305 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 25,466 | | | | 59,337 | | | | 138,209 | | | | 1,522,588 | | | | 53,693 | | | | (112,515 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| See Notes to Financial Statements. | | 49 |
| | |
| Baron Select Funds | | December 31, 2023 |
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Baron Real Estate Fund | | | Baron Emerging Markets Fund | | | Baron Global Advantage Fund | |
| | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | |
Increase (Decrease) in Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 6,741,535 | | | $ | 2,976,663 | | | $ | 24,155,343 | | | $ | 11,754,654 | | | $ | (7,033,822 | ) | | $ | (12,441,480 | ) |
Net realized gain (loss) | | | 12,262,036 | | | | (117,832,250 | ) | | | (272,251,793 | ) | | | (815,238,011 | ) | | | (79,786,942 | ) | | | (313,644,803 | ) |
Change in net unrealized appreciation (depreciation) | | | 316,689,615 | | | | (470,170,670 | ) | | | 609,334,651 | | | | (1,498,546,653 | ) | | | 256,276,035 | | | | (857,215,433 | ) |
Voluntary payment from Adviser | | | — | | | | — | | | | — | | | | — | | | | — | | | | 82,890 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets resulting from operations | | | 335,693,186 | | | | (585,026,257 | ) | | | 361,238,201 | | | | (2,302,030,010 | ) | | | 169,455,271 | | | | (1,183,218,826 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to shareholders from (Note 8): | | | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings — Retail Shares | | | (219,246 | ) | | | (9,553,450 | ) | | | (1,068,956 | ) | | | — | | | | — | | | | (5,031,192 | ) |
Distributable earnings — Institutional Shares | | | (5,656,763 | ) | | | (27,322,313 | ) | | | (29,796,790 | ) | | | — | | | | — | | | | (12,161,336 | ) |
Distributable earnings — R6 Shares | | | (168,604 | ) | | | (712,297 | ) | | | (56,931 | ) | | | — | | | | — | | | | (181,497 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Decrease in net assets from distributions to shareholders | | | (6,044,613 | ) | | | (37,588,060 | ) | | | (30,922,677 | ) | | | — | | | | — | | | | (17,374,025 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the sale of shares — Retail Shares | | | 67,278,351 | | | | 59,590,068 | | | | 40,745,092 | | | | 67,033,744 | | | | 22,472,386 | | | | 44,254,667 | |
Proceeds from the sale of shares — Institutional Shares | | | 434,878,375 | | | | 483,181,884 | | | | 727,020,825 | | | | 2,079,672,381 | | | | 88,776,514 | | | | 302,723,128 | |
Proceeds from the sale of shares — R6 Shares | | | 12,458,566 | | | | 6,760,855 | | | | 2,085,300 | | | | 6,304,250 | | | | 923,807 | | | | 2,609,115 | |
Net asset value of shares issued in reinvestment of distributions — Retail Shares | | | 210,783 | | | | 9,263,230 | | | | 1,040,501 | | | | — | | | | — | | | | 4,960,818 | |
Net asset value of shares issued in reinvestment of distributions — Institutional Shares | | | 5,182,287 | | | | 24,478,594 | | | | 24,745,777 | | | | — | | | | — | | | | 11,941,036 | |
Net asset value of shares issues in reinvestment of distribution — R6 Shares | | | 168,604 | | | | 712,296 | | | | 56,930 | | | | — | | | | — | | | | 181,497 | |
Cost of shares redeemed — Retail Shares | | | (84,800,749 | ) | | | (106,418,322 | ) | | | (91,482,177 | ) | | | (129,006,843 | ) | | | (88,867,488 | ) | | | (264,733,452 | ) |
Cost of shares redeemed — Institutional Shares | | | (295,426,736 | ) | | | (613,002,553 | ) | | | (1,256,147,547 | ) | | | (3,834,842,644 | ) | | | (275,508,788 | ) | | | (736,455,365 | ) |
Cost of shares redeemed — R6 Shares | | | (5,356,823 | ) | | | (4,494,829 | ) | | | (5,106,803 | ) | | | (8,213,227 | ) | | | (2,188,193 | ) | | | (2,119,961 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets derived from capital share transactions | | | 134,592,658 | | | | (139,928,777 | ) | | | (557,042,102 | ) | | | (1,819,052,339 | ) | | | (254,391,762 | ) | | | (636,638,517 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 464,241,231 | | | | (762,543,094 | ) | | | (226,726,578 | ) | | | (4,121,082,349 | ) | | | (84,936,491 | ) | | | (1,837,231,368 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of year | | | 1,276,357,803 | | | | 2,038,900,897 | | | | 4,767,712,575 | | | | 8,888,794,924 | | | | 770,730,106 | | | | 2,607,961,474 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
End of year | | $ | 1,740,599,034 | | | $ | 1,276,357,803 | | | $ | 4,540,985,997 | | | $ | 4,767,712,575 | | | $ | 685,793,615 | | | $ | 770,730,106 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — Retail Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 2,171,746 | | | | 1,812,350 | | | | 3,020,438 | | | | 4,724,917 | | | | 823,556 | | | | 1,274,802 | |
Shares issued in reinvestment of distributions | | | 6,599 | | | | 351,118 | | | | 77,717 | | | | — | | | | — | | | | 185,313 | |
Shares redeemed | | | (2,754,375 | ) | | | (3,394,899 | ) | | | (6,811,892 | ) | | | (9,251,041 | ) | | | (3,239,565 | ) | | | (7,572,415 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (576,030 | ) | | | (1,231,431 | ) | | | (3,713,737 | ) | | | (4,526,124 | ) | | | (2,416,009 | ) | | | (6,112,300 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — Institutional Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 13,796,839 | | | | 14,402,800 | | | | 53,560,711 | | | | 143,749,723 | | | | 3,227,760 | | | | 9,090,396 | |
Shares issued in reinvestment of distributions | | | 162,795 | | | | 900,468 | | | | 1,840,640 | | | | — | | | | — | | | | 436,282 | |
Shares redeemed | | | (9,387,663 | ) | | | (19,020,658 | ) | | | (93,111,422 | ) | | | (279,025,117 | ) | | | (9,762,152 | ) | | | (22,282,796 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 4,571,971 | | | | (3,717,390 | ) | | | (37,710,071 | ) | | | (135,275,394 | ) | | | (6,534,392 | ) | | | (12,756,118 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — R6 Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 392,706 | | | | 199,883 | | | | 154,253 | | | | 428,816 | | | | 33,096 | | | | 76,330 | |
Shares issued in reinvestment of distributions | | | 5,295 | | | | 26,201 | | | | 4,231 | | | | — | | | | — | | | | 6,626 | |
Shares redeemed | | | (169,687 | ) | | | (138,974 | ) | | | (376,879 | ) | | | (617,347 | ) | | | (77,573 | ) | | | (61,662 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 228,314 | | | | 87,110 | | | | (218,395 | ) | | | (188,531 | ) | | | (44,477 | ) | | | 21,294 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| 50 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Baron Real Estate Income Fund | | | Baron Health Care Fund | | | Baron FinTech Fund | |
| | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | |
Increase (Decrease) in Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 2,095,948 | | | $ | 1,501,567 | | | $ | (65,847 | ) | | $ | (251,017 | ) | | $ | (73,120 | ) | | $ | (175,688 | ) |
Net realized gain (loss) | | | (4,766,635 | ) | | | (20,026,333 | ) | | | (2,666,948 | ) | | | (36,541,611 | ) | | | (2,485,044 | ) | | | (4,278,768 | ) |
Change in net unrealized appreciation (depreciation) | | | 18,322,473 | | | | (19,099,697 | ) | | | 15,141,244 | | | | (6,033,432 | ) | | | 14,978,959 | | | | (21,750,639 | ) |
Voluntary payment from Adviser | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets resulting from operations | | | 15,651,786 | | | | (37,624,463 | ) | | | 12,408,449 | | | | (42,826,060 | ) | | | 12,420,795 | | | | (26,205,095 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to shareholders from (Note 8): | | | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings — Retail Shares | | | (273,623 | ) | | | (281,915 | ) | | | — | | | | — | | | | — | | | | (97,665 | ) |
Distributable earnings — Institutional Shares | | | (1,858,134 | ) | | | (1,553,146 | ) | | | — | | | | — | | | | — | | | | (422,971 | ) |
Distributable earnings — R6 Shares | | | (16,765 | ) | | | (11,812 | ) | | | — | | | | — | | | | — | | | | (59,028 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Decrease in net assets from distributions to shareholders | | | (2,148,522 | ) | | | (1,846,873 | ) | | | — | | | | — | | | | — | | | | (579,664 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the sale of shares — Retail Shares | | | 3,858,342 | | | | 6,889,635 | | | | 11,277,945 | | | | 18,554,295 | | | | 674,929 | | | | 1,258,218 | |
Proceeds from the sale of shares — Institutional Shares | | | 89,883,119 | | | | 46,009,611 | | | | 41,603,727 | | | | 60,083,778 | | | | 12,484,414 | | | | 19,921,986 | |
Proceeds from the sale of shares — R6 Shares | | | 837,376 | | | | 16,149 | | | | 136,269 | | | | 347,738 | | | | 3,965,552 | | | | 261,712 | |
Net asset value of shares issued in reinvestment of distributions — Retail Shares | | | 258,789 | | | | 265,967 | | | | — | | | | — | | | | — | | | | 87,889 | |
Net asset value of shares issued in reinvestment of distributions — Institutional Shares | | | 1,435,472 | | | | 1,548,668 | | | | — | | | | — | | | | — | | | | 422,482 | |
Net asset value of shares issues in reinvestment of distribution — R6 Shares | | | 15,675 | | | | 11,811 | | | | — | | | | — | | | | — | | | | 59,029 | |
Cost of shares redeemed — Retail Shares | | | (5,258,306 | ) | | | (6,020,420 | ) | | | (19,305,819 | ) | | | (26,956,968 | ) | | | (2,051,948 | ) | | | (3,303,351 | ) |
Cost of shares redeemed — Institutional Shares | | | (33,748,918 | ) | | | (64,380,854 | ) | | | (45,451,361 | ) | | | (54,346,101 | ) | | | (10,235,367 | ) | | | (27,459,084 | ) |
Cost of shares redeemed — R6 Shares | | | (22,027 | ) | | | (28,842 | ) | | | (250,830 | ) | | | (66,440 | ) | | | (260,999 | ) | | | (172,949 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets derived from capital share transactions | | | 57,259,522 | | | | (15,688,275 | ) | | | (11,990,069 | ) | | | (2,383,698 | ) | | | 4,576,581 | | | | (8,924,068 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 70,762,786 | | | | (55,159,611 | ) | | | 418,380 | | | | (45,209,758 | ) | | | 16,997,376 | | | | (35,708,827 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of year | | | 77,320,388 | | | | 132,479,999 | | | | 210,014,024 | | | | 255,223,782 | | | | 42,601,509 | | | | 78,310,336 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
End of year | | $ | 148,083,174 | | | $ | 77,320,388 | | | $ | 210,432,404 | | | $ | 210,014,024 | | | $ | 59,598,885 | | | $ | 42,601,509 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — Retail Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 288,086 | | | | 443,438 | | | | 624,918 | | | | 1,025,988 | | | | 54,697 | | | | 95,010 | |
Shares issued in reinvestment of distributions | | | 19,885 | | | | 20,108 | | | | — | | | | — | | | | — | | | | 8,299 | |
Shares redeemed | | | (394,095 | ) | | | (414,272 | ) | | | (1,082,437 | ) | | | (1,491,763 | ) | | | (170,211 | ) | | | (248,879 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (86,124 | ) | | | 49,274 | | | | (457,519 | ) | | | (465,775 | ) | | | (115,514 | ) | | | (145,570 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — Institutional Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 6,621,682 | | | | 2,978,879 | | | | 2,302,824 | | | | 3,341,951 | | | | 1,028,407 | | | | 1,471,454 | |
Shares issued in reinvestment of distributions | | | 108,728 | | | | 114,489 | | | | — | | | | — | | | | — | | | | 39,633 | |
Shares redeemed | | | (2,527,701 | ) | | | (4,463,935 | ) | | | (2,523,545 | ) | | | (3,006,070 | ) | | | (851,462 | ) | | | (2,173,512 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 4,202,709 | | | | (1,370,567 | ) | | | (220,721 | ) | | | 335,881 | | | | 176,945 | | | | (662,425 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital share transactions — R6 Shares | | | | | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 63,270 | | | | 1,076 | | | | 7,425 | | | | 19,309 | | | | 337,021 | | | | 20,189 | |
Shares issued in reinvestment of distributions | | | 1,175 | | | | 885 | | | | — | | | | — | | | | — | | | | 5,537 | |
Shares redeemed | | | (1,792 | ) | | | (1,698 | ) | | | (13,542 | ) | | | (3,735 | ) | | | (21,573 | ) | | | (14,617 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 62,653 | | | | 263 | | | | (6,117 | ) | | | 15,574 | | | | 315,448 | | | | 11,109 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| See Notes to Financial Statements. | | 51 |
| | |
| Baron Select Funds | | December 31, 2023 |
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
| | | | | | | | | | | | | | | | |
| | | Baron New Asia Fund | | | Baron Technology Fund | |
| | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
20221 | |
Increase (Decrease) in Net Assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 5,990 | | | $ | (15,431 | ) | | $ | (33,974 | ) | | $ | (23,856 | ) |
Net realized gain (loss) | | | (549,012 | ) | | | (475,410 | ) | | | (492,906 | ) | | | (437,309 | ) |
Change in net unrealized appreciation (depreciation) | | | 764,469 | | | | (807,430 | ) | | | 3,027,405 | | | | (1,640,379 | ) |
Voluntary payment from Adviser | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Increase (decrease) in net assets resulting from operations | | | 221,447 | | | | (1,298,271 | ) | | | 2,500,525 | | | | (2,101,544 | ) |
| | | | | | | | | | | | | | | | |
Distributions to shareholders from (Note 8): | | | | | | | | | | | | | | | | |
Distributable earnings — Retail Shares | | | — | | | | — | | | | — | | | | — | |
Distributable earnings — Institutional Shares | | | — | | | | — | | | | — | | | | — | |
Distributable earnings — R6 Shares | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Decrease in net assets from distributions to shareholders | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Capital share transactions: | | | | | | | | | | | | | | | | |
Proceeds from the sale of shares — Retail Shares | | | 402,312 | | | | 404,589 | | | | 3,720,001 | | | | 3,097,770 | |
Proceeds from the sale of shares — Institutional Shares | | | 326,790 | | | | 475,741 | | | | 1,130,035 | | | | 2,840,234 | |
Proceeds from the sale of shares — R6 Shares | | | 1,618,999 | | | | 211,622 | | | | 1,269,655 | | | | 500,946 | |
Net asset value of shares issued in reinvestment of distributions — Retail Shares | | | — | | | | — | | | | — | | | | — | |
Net asset value of shares issued in reinvestment of distributions — Institutional Shares | | | — | | | | — | | | | — | | | | — | |
Net asset value of shares issues in reinvestment of distribution — R6 Shares | | | — | | | | — | | | | — | | | | — | |
Cost of shares redeemed — Retail Shares | | | (352,228 | ) | | | (414,664 | ) | | | (1,297,617 | ) | | | (858,897 | ) |
Cost of shares redeemed — Institutional Shares | | | (1,616,622 | ) | | | (94,844 | ) | | | (1,603,427 | ) | | | (164,004 | ) |
Cost of shares redeemed — R6 Shares | | | (4,787 | ) | | | (34,348 | ) | | | — | | | | (3,463 | ) |
| | | | | | | | | | | | | | | | |
Increase (decrease) in net assets derived from capital share transactions | | | 374,464 | | | | 548,096 | | | | 3,218,647 | | | | 5,412,586 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 595,911 | | | | (750,175 | ) | | | 5,719,172 | | | | 3,311,042 | |
| | | | | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | | | | |
Beginning of year | | | 3,740,150 | | | | 4,490,325 | | | | 3,311,042 | | | | — | |
| | | | | | | | | | | | | | | | |
End of year | | $ | 4,336,061 | | | $ | 3,740,150 | | | $ | 9,030,214 | | | $ | 3,311,042 | |
| | | | | | | | | | | | | | | | |
Capital share transactions — Retail Shares | | | | | | | | | | | | | | | | |
Shares sold | | | 52,612 | | | | 47,829 | | | | 468,981 | | | | 371,469 | |
Shares issued in reinvestment of distributions | | | — | | | | — | | | | — | | | | — | |
Shares redeemed | | | (46,209 | ) | | | (51,511 | ) | | | (161,692 | ) | | | (129,530 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 6,403 | | | | (3,682 | ) | | | 307,289 | | | | 241,939 | |
| | | | | | | | | | | | | | | | |
Capital share transactions — Institutional Shares | | | | | | | | | | | | | | | | |
Shares sold | | | 43,069 | | | | 57,334 | | | | 135,967 | | | | 306,820 | |
Shares issued in reinvestment of distributions | | | — | | | | — | | | | — | | | | — | |
Shares redeemed | | | (205,853 | ) | | | (12,553 | ) | | | (257,119 | ) | | | (26,780 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (162,784 | ) | | | 44,781 | | | | (121,152 | ) | | | 280,040 | |
| | | | | | | | | | | | | | | | |
Capital share transactions — R6 Shares | | | | | | | | | | | | | | | | |
Shares sold | | | 205,665 | | | | 25,139 | | | | 216,024 | | | | 73,481 | |
Shares issued in reinvestment of distributions | | | — | | | | — | | | | — | | | | — | |
Shares redeemed | | | (633 | ) | | | (3,980 | ) | | | — | | | | (538 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 205,032 | | | | 21,159 | | | | 216,024 | | | | 72,943 | |
| | | | | | | | | | | | | | | | |
| 1 | For the period January 3, 2022 (commencement of operations) to December 31, 2022. |
| | |
| 52 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
STATEMENTS OF CASH FLOWS
|
FORTHE YEAR ENDED DECEMBER 31, 2023 |
| | | | |
| | | Baron Partners
Fund | |
Increase (Decrease) in Cash: | | | | |
Cash Provided (Used) from Operating Activities | | | | |
Net increase (decrease) in net assets resulting from operations | | $ | 2,076,990,150 | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided (used) by operating activities: | | | | |
Purchases of portfolio securities | | | (370,864,090 | ) |
Proceeds from sales of portfolio securities | | | 432,402,736 | |
Net purchases (sales and maturities) of short term investments | | | (359,637 | ) |
(Increase) decrease in dividends and interest receivable | | | 175,232 | |
(Increase) decrease in prepaid expenses | | | 30,825 | |
Increase (decrease) in accrued expenses | | | 1,310,207 | |
Net realized (gain) loss on investments | | | 157,491,291 | |
Change in net unrealized (appreciation) depreciation of investments | | | (2,335,451,959 | ) |
| | | | |
Net cash provided (used) by operating activities | | $ | (38,275,245 | ) |
| | | | |
Cash Provided in Financing Activities | | | | |
Proceeds from shares sold | | | 1,057,154,594 | |
Payment for capital shares redeemed | | | (1,011,620,349 | ) |
Increase (decrease) in due to custodian bank | | | 622,000 | |
Borrowings against line of credit | | | 497,400,000 | |
Repayments against line of credit | | | (505,400,000 | ) |
| | | | |
Net cash provided (used) in financing activities | | | 38,156,245 | |
| | | | |
Net increase (decrease) in cash | | | (119,000 | ) |
Cash at beginning of year | | | 119,000 | |
| | | | |
Cash at end of year | | | — | |
| | | | |
Supplemental cash flow information: | | | | |
Interest paid on line of credit | | $ | 57,327,719 | |
| | | | |
| | |
| See Notes to Financial Statements. | | 53 |
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Baron Select Funds (the Trust) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company established as a Delaware statutory trust on April 30, 2003. The Trust currently offers 12 series (individually, a Fund and collectively, the Funds): Baron Partners Fund, Baron Focused Growth Fund, Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, Baron Global Advantage Fund, Baron Real Estate Income Fund, Baron WealthBuilder Fund, Baron Health Care Fund, Baron FinTech Fund, Baron New Asia Fund, and Baron Technology Fund. Baron WealthBuilder Fund is presented in a separate report.
Each Fund offers Retail Shares, Institutional Shares, and R6 Shares. Each class of shares differs only in its ongoing fees, expenses, and eligibility requirements. Each class of shares has equal rights to earnings and assets, except that each class bears different expenses for distribution and shareholder servicing. Each Fund’s investment income, realized and unrealized gains or losses on investments and foreign currency, and expenses other than those attributable to a specific class are allocated to each class based on its relative net assets. Each class of shares has exclusive voting rights with respect to matters that affect just that class.
Baron Partners Fund was organized originally as a limited partnership in January 1992 under the laws of the State of Delaware. Effective as of the close of business on April 30, 2003, the predecessor partnership was reorganized into a series of the Trust. Baron Partners Fund commenced operations on April 30, 2003 with a contribution of assets and liabilities, including securities-in-kind, from the predecessor partnership.
Baron Focused Growth Fund was organized originally as a limited partnership in May 1996 under the laws of the State of Delaware. Effective as of the close of business on June 30, 2008, the predecessor partnership was reorganized into a series of the Trust. Baron Focused Growth Fund commenced operations on June 30, 2008 with a contribution of assets and liabilities, including securities-in-kind, from the predecessor partnership.
The investment goals of the Funds are as follows:
Baron Partners Fund is a non-diversified fund that seeks capital appreciation through long-term investments primarily in U.S. growth companies. The Fund may employ “leverage” by borrowing money and using it to purchase additional securities. Borrowing for investments increases both investment opportunity and investment risk.
Baron Focused Growth Fund is a non-diversified fund that seeks capital appreciation through long-term investments primarily in U.S. small- and mid-sized growth companies.
Baron International Growth Fund is a diversified fund that seeks capital appreciation through long-term investments primarily in non-U.S. growth companies.
Baron Real Estate Fund is a diversified fund that seeks capital appreciation through long-term investments primarily in U.S. and non-U.S. real estate and real estate-related companies.
Baron Emerging Markets Fund is a diversified fund that seeks capital appreciation through investments primarily in growth companies in developing countries.
Baron Global Advantage Fund is a diversified fund that seeks capital appreciation through investments primarily in equity securities of established and emerging markets companies located throughout the world.
Baron Real Estate Income Fund is a non-diversified fund that seeks both capital appreciation and current income through investments primarily in real estate income-producing securities and other real estate securities.
Baron Health Care Fund is a non-diversified fund that seeks capital appreciation through investments primarily in equity securities engaged in research, development, production, sale, delivery or distribution of products and services related to the health care industry.
Baron FinTech Fund is a non-diversified fund that seeks capital appreciation through investments primarily in equity securities that develop, use, or rely on innovative technologies or services, in a significant way, for banking, lending, capital markets, financial data analytics, insurance, payments, asset management, or wealth management.
Baron New Asia Fund is a diversified fund that seeks capital appreciation through investments primarily in equity securities located in Asia, but including all other developed, developing, and frontier countries in the Asian region.
Baron Technology Fund is a non-diversified fund that seeks capital appreciation through investments primarily in equity securities of U.S. and non-U.S. technology companies, selected for their durable growth potential from the development, advancement, and use of technology.
2. SIGNIFICANT ACCOUNTING POLICIES AND INVESTMENT RISKS
The following is a summary of significant accounting policies followed by the Funds. The policies are in conformity with accounting principles generally accepted in the United States of America (GAAP). The Trust is an investment company and therefore follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies.
a) Net Asset Value. The Funds’ share prices or net asset values (NAV) are calculated as of the scheduled close of the regular trading session (usually 4 p.m. E.T. or such other time as of which the Funds’ NAVs are calculated (the NAV Calculation Time)) on the New York Stock Exchange (the Exchange) on any day the Exchange is scheduled to be open. The NAV per share of a class is determined by dividing the value of the total assets of the Fund represented by such class, less all liabilities, by the total number of Fund shares of such class outstanding.
b) Security Valuation. Portfolio securities traded on any national stock exchange are valued based on the last sale price on the exchange where such shares are principally traded. For securities traded on NASDAQ, the Funds use the NASDAQ Official Closing Price. If there are no sales on a given day, the value of the security may be the average of the most recent bid and asked quotations on such exchange or the last sale price from a prior day. Where market quotations are not readily available, or, if in BAMCO, Inc.’s (the Adviser) judgment, they do not accurately reflect the fair value of a security, or an event occurs after the market close but before the Funds are priced that materially affects the value of a security, the security will be valued by the Adviser using policies and procedures approved by the Board of Trustees (the Board). The Board has designated the Adviser to perform fair value determinations pursuant to Rule 2a-5 under the 1940 Act. The Adviser has a Fair Valuation Committee (the Committee)
54
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES AND INVESTMENT RISKS (Continued)
comprised of senior management representatives and the Committee reports to the Board every quarter. Accordingly, the Committee may evaluate a variety of factors to determine the fair value of securities for which market quotations are determined not to be readily available or reliable. These factors include, but are not limited to, the type of security, the value of comparable securities, observations from financial institutions and relevant news events. Input from the Adviser’s portfolio management team also will be considered. Using a fair value pricing methodology to price securities may result in a value that is different from the most recent closing price of a security and from the prices used by other investment companies to calculate their portfolios’ NAVs.
U.S. Government obligations, money market instruments, and other debt instruments held by the Funds with a remaining maturity of 60 days or less are generally valued at amortized cost, which approximates fair value, unless an independent pricing service provides a valuation for such security or in the opinion of the Board or the Committee, the amortized cost method would not represent fair value. Debt instruments having a greater remaining maturity will be valued on the basis of prices obtained from a pricing service approved by the Board or at the mean of the bid and ask prices from the dealer maintaining an active market in that security. The value of the Funds’ investments in convertible bonds/convertible preferred stocks is determined primarily by obtaining valuations from independent pricing services based on readily available bid quotations or, if quotations are not available, by methods which include various considerations such as yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Other inputs used by an independent pricing service to value convertible bonds/convertible preferred stocks generally include underlying stock data, conversion premiums, listed bond and preferred stock prices and other market information which may include benchmark curves, trade execution data, sensitivity analysis, when available, or an estimated value calculated based on the price of the underlying common share on the valuation date adjusted for accrued and unpaid dividends. Open-end investment companies, including securities lending collateral invested in registered investment company money market funds, are valued at their NAV each day.
Non-U.S. equity securities traded on foreign securities exchanges are generally valued using an independent pricing vendor that provides daily fair value adjustment factors based on information such as local closing price, relevant general and sector indexes, currency fluctuations, and depositary receipts, as applicable. Securities valued using such adjustment factors are classified as Level 2 in the fair value hierarchy. The models of the independent pricing vendor generate an adjustment factor for each security, which is applied to the local closing price to adjust it for post-closing market movements up to the time the Funds are valued and translated into U.S. dollars. If the vendor does not provide an adjustment factor for a security, the security is valued based on its most recent local closing price and translated into U. S. dollars. The Adviser may also fair value securities in other situations, for example, when a particular foreign market is closed but the Funds are open. Other mutual funds may adjust the prices of their securities by different amounts.
c) Securities Transactions and Investment Income. Fund securities transactions are accounted for on trade date. Realized gain and loss from securities transactions are recorded on an identified cost basis for financial reporting and federal income tax purposes. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis, which includes the accretion of discounts and amortization of premiums. Non-cash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Certain dividends from foreign securities will be recorded as soon as the Funds are informed of the dividend if such information is obtained subsequent to the ex-dividend date. Distributions received from certain investments held by the Funds may be comprised of dividends, realized gains and returns of capital. The Funds originally estimate the expected classification of such payments and the amounts may subsequently be reclassified upon receipt of information from the issuer.
d) Expense Allocation. The Funds are charged for those expenses that are directly attributable to each Fund, such as advisory and custodian fees. Expenses of the Trust and Baron Investment Funds Trust (collectively, the Fund Complex), not directly chargeable to one or more specific Baron funds are typically allocated among the funds in the Fund Complex in proportion to their respective net assets. The Funds accrue distribution and service (12b-1) fees to Retail Shares.
e) Single Issuer. Single issuer risk is the possibility that factors specific to an issuer to which a Fund is exposed will affect the market prices of the issuer’s securities and therefore the NAV of the Fund. Due to the size of Baron Partners Fund’s investment in Tesla, Inc. (Tesla), 43% of the Fund’s net assets as of December 31, 2023, the NAV of the Fund will be materially impacted by the price of Tesla stock.
f) Non-Diversified Portfolio. Certain Funds are non-diversified, which means they will likely have a greater percentage of their assets in a single issuer than a diversified fund. As a result, a non-diversified Fund will likely invest a greater percentage of its assets in fewer issuers, and the performance of those issuers may have a greater effect on the Fund’s performance compared to a diversified fund. Thus, a non-diversified Fund is more likely to experience significant fluctuations in value, exposing the Fund to a greater risk of loss in any given period than a diversified fund. Additionally, non-diversified Funds may encounter difficulty liquidating securities.
g) Industry Concentration. From time to time, market fluctuations in the value of a Fund’s investments, combined with a Fund’s non-diversified portfolio, may result in a Fund being concentrated in the securities of a single issuer or a small number of issuers, including in a particular industry. As a result, this Fund will be particularly exposed to the risks of that company or industry relative to the risk exposure of investment companies holding a diversified portfolio of securities or those that seek to maintain near-index weightings in their portfolio securities. Accordingly, in those cases, a Fund will be disproportionately exposed to the market conditions, interest rates, and economic, regulatory, or financial developments that significantly affect that company or industry. For example, due to the size of Baron Partners Fund’s investment in Tesla, which represents about 43% of the Fund’s net assets as of December 31, 2023, the Fund will be more adversely impacted by negative developments affecting the automotive and energy industries, as well as governmental environmental regulations.
h) Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the period. Actual results could differ from those estimates.
i) Foreign Currency Translations. The accounting records of the Funds are maintained in U.S. dollars. Values of assets and liabilities denominated in foreign currencies are translated into U.S. dollars using the price of such currencies at the NAV Calculation Time. Purchases and sales of investments and dividend income are converted at the prevailing rate of exchange on the respective dates of such transactions. Net realized gain (loss) on foreign currency transactions includes gain (loss) arising from the fluctuation in the exchange rates between trade and settlement dates on security transactions and currency gain (loss) between the accrual and payment dates on dividends
55
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES AND INVESTMENT RISKS (Continued)
and foreign withholding taxes. The Funds do not isolate the portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in their market prices. Such fluctuations are included with the net realized and unrealized gain or loss from investments on the Statements of Operations. The Funds may invest in foreign securities and foreign currency transactions that may involve risks not associated with domestic investments as a result of the level of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability, among others.
Pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are generally treated as ordinary income for U.S. federal income tax purposes.
j) Securities Lending. The Funds may lend securities to certain brokers under the terms of a master netting agreement. Upon such loans, the Funds receive collateral which is maintained by the custodian. The Funds may pay fees to the custodian for administering the securities lending program. The Funds earn interest on such collateral and earn income in the form of negotiated lenders’ fees, both of which are included in securities lending income in the Statements of Operations. Securities loaned are required to be secured at all times by collateral equal to at least 102% of the market value of the securities loaned. Risks may arise upon entering into securities lending to the extent that the value of the collateral is less than the value of the securities loaned due to the changes in the value of collateral or the loaned securities. The collateral is marked-to-market daily and settled on the next business day. The Funds may receive collateral in the form of cash or other eligible securities, such as a letter of credit issued by a U.S. bank or securities issued or guaranteed by the U.S. government. Securities purchased with cash collateral are subject to the risks inherent in investing in these securities.
There were no securities on loan at December 31, 2023.
k) Repurchase Agreements. The Funds may invest in repurchase agreements, which are short-term investments whereby the Funds acquire ownership of a debt security and the seller agrees to repurchase the security at a future date at a specified price. When entering into repurchase agreements, it is the Funds’ policy that their custodian take possession of the underlying collateral securities, the market value of which, at all times, equals at least 102% of the principal amount of the repurchase transaction. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Funds may be delayed or limited. The information required to be disclosed by FASB Accounting Standards Update No. 2011-11 for the Funds’ investments in repurchase agreements at December 31, 2023, including the fair value of the repurchase agreement and the amount of collateral, can be found in each respective Fund’s Portfolio of Investments.
l) Master Limited Partnerships. The Funds may invest in master limited partnerships (MLPs). MLPs are limited partnerships or limited liability companies, whose partnership units or limited liability interests are listed and traded on a U.S. securities exchange, and are treated as publicly traded partnerships for federal income tax purposes. To qualify to be treated as a partnership for tax purposes, an MLP must receive at least 90% of its income from qualifying sources as set forth in Section 7704(d) of the Internal Revenue Code of 1986, as amended. These qualifying sources include interest, dividend, real property rent, gain from sale or other disposition of real property and income from activities such as the exploration, development, mining, production, processing, refining, transportation, storage and marketing of mineral or natural resources.
m) Special Purpose Acquisition Company. The Funds may acquire an interest in a special purpose acquisition company (SPAC) in an initial public offering (IPO), via a private placement or a secondary market transaction. A SPAC is typically a publicly traded company that raises investment capital via an IPO for the purpose of acquiring the equity securities of one or more existing companies via merger, combination, acquisition or other similar transactions. To the extent the SPAC is invested in cash or similar securities, this may negatively affect a Fund’s performance if the Fund is invested in the SPAC during such period. There is no guarantee that the SPACs will complete an acquisition or that any acquisitions that are completed will be profitable. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices. These transactions will require the approval of the respective shareholders and are subject to other customary closing conditions, including the receipt of certain regulatory approvals. If these conditions are not met, the SPAC’s acquisition may not close and, to the extent a Fund had committed to participate in a private placement (i.e., PIPE transaction, defined below), the Fund will no longer be obligated to fulfill its commitment.
n) Private Investment in Public Equity. The Funds may acquire equity securities of an issuer that are issued through a private investment in public equity (PIPE) transaction, including through commitments to purchase securities on a when-issued basis. A Fund will generally earmark an amount of cash or high quality securities equal to the amount of its commitment to purchase the when-issued securities. PIPE transactions typically involve the purchase of securities directly from a publicly traded company in a private placement transaction, including securities issued by a SPAC, typically at a discount to the market price of the company’s securities. There is a risk that if the market price of the securities drops below a set threshold, the company may have to issue additional stock at a significantly reduced price, which may dilute the value of a Fund’s investment. Shares in PIPEs generally are not registered with the SEC until after a certain time period from the date the private sale is completed. This restriction can last an uncertain amount of time and may be many months. Until the public registration process is completed, securities acquired via a PIPE are restricted as to resale and a Fund cannot freely trade the securities. Generally, such restrictions cause these securities to be illiquid during this time. PIPEs may contain provisions that the issuer will pay specified financial penalties to the holder if the issuer does not publicly register the restricted equity securities within a specified period of time, but there is no assurance that the restricted equity securities will be publicly registered, or that the registration will remain in effect.
Publicly traded securities acquired via a PIPE transaction are typically valued at a discount to the market price of an issuer’s common stock and classified as Level 2 or Level 3 in the fair value hierarchy depending on the significance of the unobservable inputs. Discounts are applied due to certain trading restrictions imposed or a lack of marketability preceding the conversion to publicly traded securities. The primary inputs used in determining the discount are the length of the lock-up time period and volatility of the underlying security.
o) Federal and Foreign Income Taxes. The Trust treats each Fund as a separate entity for federal income tax purposes. Each Fund intends to meet the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute to its shareholders substantially all of its net investment income and any net realized capital gains at least annually. None of the Funds will be subject to federal or state income taxes to the extent that they qualify as regulated investment companies and substantially all of their income is distributed.
56
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES AND INVESTMENT RISKS (Continued)
The Funds may be subject to foreign taxes on income and gains on investments that are accrued based upon the Funds’ understanding of the tax rules and regulations that exist in the countries in which the Funds invest. Foreign governments may also impose taxes or other payments on investments with respect to foreign securities. Such taxes are accrued as applicable.
As a result of several court cases, Baron International Growth Fund has filed tax reclaims for previously withheld taxes on dividends earned in France. This filing is subject to various administrative proceedings by the local jurisdictions’ tax authorities, as well as several related judicial proceedings. Uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these claims, and the potential timing of payment, and accordingly no amounts are reflected in the financial statements until a positive decision has been awarded, at which time the amount will be recorded within dividend income on the Statement of Operations. Such amounts, if and when recorded, could result in an increase in Baron International Growth Fund’s NAV per share.
p) Restricted Securities. The Funds may invest in securities that are restricted as to public sale in accordance with the Securities Act of 1933. Such assets are valued by the Adviser pursuant to policies and procedures approved by the Board. Refer to Note 6 for additional information.
q) Distributions to Shareholders. Income and capital gain distributions to shareholders are determined in accordance with income tax regulations which may differ from GAAP. These differences are primarily due to differing treatments for net investment loss, foreign currency gains and losses, non-deductible interest expense, reclassification of distributions, partnership basis adjustments, income from passive foreign investment companies, foreign capital gains tax, late-year loss deferral, post-October loss deferral, and wash sale loss deferral. Income dividends are normally declared and paid annually, except that the Baron Real Estate Income Fund’s income dividends (if any), will be declared and paid quarterly. During any particular year, net realized gains from investment transactions in excess of available capital loss carryforwards would be taxable to the Funds, if not distributed. The Funds intend to declare and distribute these amounts, at least annually, to shareholders, but may be distributed more frequently. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
r) Commitments and Contingencies. In the normal course of business, the Funds may enter into contracts and agreements that contain a variety of representations and warranties, which provide general indemnification. The maximum exposure to the Funds under these agreements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
s) Cash and Cash Equivalents. The Funds consider all short-term liquid investments with a maturity of three months or less when purchased to be cash equivalents.
t) Russia and Ukraine Risk. Certain Funds invested in securities and instruments that are economically tied to Russia. Due to the uncertainty of the geopolitical tension in Russia/Ukraine, investments in Russia are subject to political, economic, legal, market and currency risks, as well as the risk that further economic sanctions may be imposed by the U.S. and/or other countries. Such sanctions — which may impact companies in many sectors, including energy, financial services and defense, among others — may negatively impact a Fund’s performance and/or ability to achieve its investment objective. For example, certain transactions may be prohibited and/or existing investments may become illiquid (e.g., in the event that transacting in certain existing investments is prohibited), which could cause a Fund to sell other portfolio holdings at a disadvantageous time or price in order to meet shareholder redemptions.
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term securities, for the year ended December 31, 2023 were as follows:
| | | | | | | | |
| | |
| Fund | | Purchases | | | Sales | |
Baron Partners Fund | | $ | 370,864,090 | | | $ | 426,361,726 | |
Baron Focused Growth Fund | | | 481,587,516 | | | | 58,634,445 | |
Baron International Growth Fund | | | 153,835,583 | | | | 164,615,373 | |
Baron Real Estate Fund | | | 1,068,875,637 | | | | 818,247,956 | |
Baron Emerging Markets Fund | | | 1,502,506,033 | | | | 2,094,891,521 | |
Baron Global Advantage Fund | | | 15,313,464 | | | | 277,051,922 | |
Baron Real Estate Income Fund | | | 173,164,146 | | | | 115,970,370 | |
Baron Health Care Fund | | | 99,925,055 | | | | 101,857,877 | |
Baron FinTech Fund | | | 13,456,133 | | | | 7,993,889 | |
Baron New Asia Fund | | | 2,209,603 | | | | 1,854,993 | |
Baron Technology Fund | | | 4,331,992 | | | | 1,523,763 | |
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
a) Investment Advisory Fees. The Adviser, a wholly owned subsidiary of Baron Capital Group, Inc. (BCG), serves as investment adviser to the Funds. As compensation for services rendered, the Adviser receives a fee accrued daily as a percentage of each Fund’s average daily net assets and payable monthly, at an annual rate set forth below:
| | | | |
| |
| Fund | | Annual Rate | |
Baron Partners Fund | | | 1.00 | % |
Baron Focused Growth Fund | | | 1.00 | % |
Baron International Growth Fund | | | 0.88 | % |
Baron Real Estate Fund | | | 1.00 | % |
Baron Emerging Markets Fund | | | 1.00 | % |
Baron Global Advantage Fund | | | 0.85 | % |
Baron Real Estate Income Fund | | | 0.75 | % |
Baron Health Care Fund | | | 0.75 | % |
Baron FinTech Fund | | | 0.80 | % |
Baron New Asia Fund | | | 1.00 | % |
Baron Technology Fund | | | 0.80 | % |
57
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (Continued)
The Adviser has contractually agreed to waive its fee or reimburse Fund expenses to the extent required to limit the net annual operating expense ratio (excluding portfolio transaction costs, interest, dividend and extraordinary expenses) pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term , as follows:
| | | | | | | | | | | | |
| |
| | | Annual Operating
Expense Ratio Cap | |
| | | |
| Fund | | Retail
Shares | | | Institutional
Shares | | | R6
Shares | |
Baron Partners Fund | | | 1.45 | % | | | 1.20 | % | | | 1.20 | % |
Baron Focused Growth Fund | | | 1.35 | % | | | 1.10 | % | | | 1.10 | % |
Baron International Growth Fund | | | 1.20 | % | | | 0.95 | % | | | 0.95 | % |
Baron Real Estate Fund | | | 1.35 | % | | | 1.10 | % | | | 1.10 | % |
Baron Emerging Markets Fund | | | 1.50 | % | | | 1.25 | % | | | 1.25 | % |
Baron Global Advantage Fund | | | 1.15 | % | | | 0.90 | % | | | 0.90 | % |
Baron Real Estate Income Fund | | | 1.05 | % | | | 0.80 | % | | | 0.80 | % |
Baron Health Care Fund | | | 1.10 | % | | | 0.85 | % | | | 0.85 | % |
Baron FinTech Fund | | | 1.20 | % | | | 0.95 | % | | | 0.95 | % |
Baron New Asia Fund | | | 1.45 | % | | | 1.20 | % | | | 1.20 | % |
Baron Technology Fund | | | 1.20 | % | | | 0.95 | % | | | 0.95 | % |
During the year ended December 31, 2023, the Adviser waived its management fees and reimbursed other expenses, if applicable, as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| | | Retail Shares | | | Institutional Shares | | | R6 Shares | |
| | | | | | |
| Fund | | Management
Fees Waived | | | Expenses
Reimbursed | | | Management
Fees Waived | | | Expenses
Reimbursed | | | Management
Fees Waived | | | Expenses
Reimbursed | |
Baron International Growth Fund | | $ | 41,337 | | | $ | — | | | $ | 108,342 | | | $ | — | | | $ | 40,291 | | | $ | — | |
Baron Global Advantage Fund | | | 97,448 | | | | — | | | | 192,311 | | | | — | | | | 3,762 | | | | — | |
Baron Real Estate Income Fund | | | 37,516 | | | | — | | | | 148,725 | | | | — | | | | 1,327 | | | | — | |
Baron Health Care Fund | | | 52,276 | | | | — | | | | 47,012 | | | | — | | | | 1,547 | | | | — | |
Baron FinTech Fund | | | 30,918 | | | | — | | | | 89,858 | | | | — | | | | 20,546 | | | | — | |
Baron New Asia Fund | | | 9,996 | | | | 49,202 | | | | 15,290 | | | | 72,495 | | | | 16,733 | | | | 66,937 | |
Baron Technology Fund | | | 21,838 | | | | 70,191 | | | | 7,105 | | | | 29,330 | | | | 16,451 | | | | 42,114 | |
The aforementioned fee waivers and reimbursements, if applicable, are not subject to recoupment by the Adviser.
b) Distribution Fees. Baron Capital, Inc. (BCI), a wholly owned subsidiary of BCG, is a registered broker-dealer and the distributor of the Funds’ shares. The Funds are authorized to pay BCI a distribution fee payable monthly pursuant to a distribution plan under Rule 12b-1 of the 1940 Act equal to 0.25% per annum of the Retail Shares’ average daily net assets of the respective Funds.
c) Trustee Fees. Certain Trustees of the Trust are officers of the Adviser and received no direct renumeration in such capacity from the Fund Complex. The Fund Complex pays each Independent Trustee (an Independent Trustee is a Trustee who is not an interested person (as defined in the 1940 Act) of the Fund Complex) annual compensation in addition to reimbursement of out-of-pocket expenses in connection with attendance at meetings of the Board. Specifically, each Independent Trustee receives an annual base compensation of $172,000 with the lead Independent Trustee receiving an additional $20,000. An additional $48,000 per annum is paid to each Independent Trustee for attendance at the quarterly meetings of the Board. Each member of the Audit Committee receives an additional $10,000 in annual compensation with the Audit Committee Chairperson receiving an additional $10,000.
d) Custody, Fund Accounting and Administration Fees. The Funds have entered into an agreement with State Street Bank and Trust Company (State Street) to perform custody, accounting and certain administrative services.
e) Cross Trades. The Funds are permitted to purchase securities from, or sell securities to, other Funds within the Trust, the funds in Baron Investment Funds Trust and other entities advised or subadvised by the Adviser, pursuant to “Cross-Trading Procedures” adopted by the Board. These procedures have been designed to ensure that any cross-trade of securities by the respective Baron Fund from or to another fund/other entity that is or could be considered an affiliate of a Fund under certain limited circumstances by virtue of having a common investment adviser, common officers, or common trustees complies with Rule 17a-7 under the 1940 Act. Further, as defined under these procedures, each cross-trade is effected at the current market price and with no commissions. Pursuant to these procedures, for the year ended December 31, 2023, the Funds did not engage in the cross-trades.
f) Ownership Concentration. As of December 31, 2023, the officers, Trustees, and portfolio managers owned, directly or indirectly, 36.34% of Baron Focused Growth Fund, 23.35% of Baron FinTech Fund, 63.34% of Baron New Asia Fund, and 35.30% of Baron Technology Fund. As a result of their ownership, these investors may be able to materially affect the outcome of matters presented to Baron Focused Growth Fund, Baron FinTech Fund, Baron New Asia Fund and Baron Technology Fund shareholders.
5. LINE OF CREDIT
Baron Partners Fund participates in a committed syndicated line of credit agreement with State Street in the amount of $1 billion that is used for investment purposes. Depending on the outstanding loan amount, a commitment fee of 0.15% or 0.25% per annum is incurred on the unused portion of the line of credit. Baron Partners Fund may borrow up to the lesser of $1 billion or the maximum amount Baron Partners Fund may borrow under the 1940 Act, the limitations included in Baron Partners Fund’s
58
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
5. LINE OF CREDIT (Continued)
prospectus, or any limit or restriction under any law or regulation to which Baron Partners Fund is subject or any agreement to which Baron Partners Fund is a party. Interest is charged to Baron Partners Fund, based on its borrowings, at a rate per annum equal to the higher of the One-Month Term Secured Overnight Financing Rate plus 0.10%, the Federal Funds Effective Rate, or the Overnight Bank Funding Rate (OBFR); plus a margin of 0.85%. An upfront fee of 0.05% is incurred on the commitment amount.
The Fund Complex (except Baron Partners Fund), participates in a committed line of credit agreement with State Street to be used for temporary purposes, primarily for financing redemptions. Each fund may borrow up to the lesser of $200 million or the maximum amount each fund may borrow under the 1940 Act, the limitations included in each fund’s prospectus, or any limit or restriction under any law or regulation to which each fund is subject or any agreement to which each fund is a party; provided that the aggregate outstanding principal amount of all loans to any of the funds may not exceed $200 million. Interest is charged to each fund, based on its borrowings, at a rate per annum equal to the higher of the OBFR plus 0.10% or the Federal Funds Effective Rate plus 0.10%; plus a margin of 1.00%. An upfront fee of 0.05% is incurred on the commitment amount and a commitment fee of 0.20% per annum is incurred on the unused portion of the line of credit. Both fees are allocated to the participating funds based on their relative net assets.
During the year ended December 31, 2023, the following Funds had borrowings under the line of credit as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Fund | | Average
Daily Loan
Balance* | | | Maximum
Daily Loan
Outstanding | | | Weighted
Average
Interest
Rate* | | | Number of
Days
Borrowing
Outstanding | | | Outstanding
Balance as
of
12/31/2023 | |
Baron Partners Fund | | $ | 956.3 million | | | $ | 1.0 billion | | | | 6.13 | % | | | 365 | | | $ | 987 million | |
Baron Global Advantage Fund | | $ | 4.1 million | | | $ | 24.1 million | | | | 6.32 | % | | | 148 | | | $ | 700,000 | |
| * | For the days borrowings were outstanding. |
The Adviser believes that the fair value of the liabilities under each line of credit is equivalent to the recorded amount based on its short-term maturity and interest rate, which fluctuates over time. A Fund’s outstanding balance under the line of credit, if any, would be categorized as Level 2 in the fair value hierarchy, which is further discussed in Note 7.
6. RESTRICTED SECURITIES
At December 31, 2023, investments in securities included securities that are restricted and/or illiquid. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale and are valued pursuant to the policies and procedures for fair value pricing approved by the Board. An illiquid investment is any investment that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, as determined pursuant to the provisions of SEC Rule 22e -4 (the Liquidity Rule) governing classification of portfolio securities. The Funds may receive more or less than this valuation in an actual sale and that difference could be material.
At December 31, 2023, the Funds held investments in restricted and/or illiquid securities that were valued pursuant to policies and procedures for fair value pricing as follows:
| | | | | | | | |
| |
| | | Baron Partners Fund | |
| | |
| Name of Issuer | | Acquisition Date(s) | | | Value | |
Private Common Stocks | | | | | | | | |
Space Exploration Technologies Corp. | | | 9/13/2017 | | | $ | 244,296,440 | |
StubHub Holdings, Inc. | | | 12/22/2021 | | | | 43,648,760 | |
X Holdings I, Inc. | | | 5/4/2022 | | | | 16,392,000 | |
| | |
Private Convertible Preferred Stocks | | | | | | | | |
Northvolt AB | | | 5/19/2021 | | | | 7,361,160 | |
| | |
Private Preferred Stocks | | | | | | | | |
Space Exploration Technologies Corp. | | | 11/15/2017-8/4/2020 | | | | 537,262,630 | |
| | | | | | | | |
| | |
Total Restricted Securities: | | | | | | $ | 848,960,990 | |
| | | | | | | | |
(Cost $246,093,669)† (12.22% of Net Assets) | | | | | | | | |
| |
| | | Baron Focused Growth Fund | |
| | |
| Name of Issuer | | Acquisition Date(s) | | | Value | |
Private Common Stocks | | | | | | | | |
Space Exploration Technologies Corp. | | | 9/13/2017 | | | $ | 74,955,780 | |
| | |
Private Preferred Stocks | | | | | | | | |
Space Exploration Technologies Corp. | | | 11/15/2017-11/29/2023 | | | | 51,132,580 | |
| | | | | | | | |
| | |
Total Restricted Securities: | | | | | | $ | 126,088,360 | |
| | | | | | | | |
(Cost $49,949,856)† (9.44% of Net Assets) | | | | |
| † | See Portfolios of Investments for cost of individual securities. |
59
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
6. RESTRICTED SECURITIES (Continued)
| | | | | | | | |
| |
| | | Baron International Growth Fund | |
| | |
| Name of Issuer | | Acquisition Date(s) | | | Value | |
Common Stocks | | | | | | | | |
Sberbank of Russia PJSC | | | 1/24/2017-10/29/2021 | | | $ | 316 | |
| | |
Warrants | | | | | | | | |
Constellation Software, Inc., Exp 3/31/2040 | | | 8/23/2023 | | | | 0 | |
| | | | | | | | |
| | |
Total Restricted Securities: | | | | | | $ | 316 | |
| | | | | | | | |
(Cost $1,650,983)† (0.00%^ of Net Assets) | | | | |
| |
| | | Baron Emerging Markets Fund | |
| | |
| Name of Issuer | | Acquisition Date(s) | | | Value | |
Common Stocks | |
Sberbank of Russia PJSC | | | 2/11/2016 | | | $ | 11,644 | |
| |
Private Common Stocks | | | | | |
Pine Labs PTE. Ltd. | | | 5/17/2021 | | | | 74,029,330 | |
| |
Private Convertible Preferred Stocks | | | | |
Bundl Technologies Private Ltd. | | | 1/3/2022 | | | | 87,247,656 | |
Think & Learn Private Limited | | | 3/31/2021 | | | | 9,639,855 | |
| | | | | | | | |
| | |
Total Restricted Securities: | | | | | | $ | 170,928,485 | |
| | | | | | | | |
(Cost $230,983,530)† (3.76% of Net Assets) | |
| |
| | | Baron Global Advantage Fund | |
| | |
| Name of Issuer | | Acquisition Date(s) | | | Value | |
Private Common Stocks | | | | |
Farmers Business Network, Inc. | | | 7/31/2020-9/15/2021 | | | $ | 557,556 | |
Space Exploration Technologies Corp. | | | 3/25/2021-12/3/2021 | | | | 31,755,860 | |
| |
Private Convertible Preferred Stocks | | | | | |
Resident Home, Inc. | | | 12/3/2020 | | | | 3,601,189 | |
Think & Learn Private Limited | | | 3/31/2021 | | | | 5,784,290 | |
| |
Private Preferred Stocks | | | | |
GM Cruise Holdings LLC | | | 1/19/2021 | | | | 2,798,294 | |
| | | | | | | | |
| | |
Total Restricted Securities: | | | | | | $ | 44,497,189 | |
| | | | | | | | |
(Cost $74,264,662)† (6.49% of Net Assets) | |
| † | See Portfolios of Investments for cost of individual securities. |
| ^ | Rounds to less than 0.01%. |
7. FAIR VALUE MEASUREMENTS
Fair value is defined by GAAP as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. GAAP provides a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Funds. Unobservable inputs are inputs that reflect the Funds’ own assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
| | • | | Level 1 — quoted prices in active markets for identical assets or liabilities; |
| | • | | Level 2 — prices determined using other inputs that are observable either directly or indirectly through corroboration with observable market data (which could include quoted prices for similar assets or liabilities, interest rates, credit risk, etc.); |
| | • | | Level 3 — prices determined using unobservable inputs when quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an asset or liability (unobservable inputs reflect each Fund’s own assumptions in determining the fair value of assets or liabilities and would be based on the best information available). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk or liquidity associated with investing in those securities. For example, non-U.S. securities, with markets that close hours before the Funds value their holdings, may require revised valuations to more accurately reflect their fair value. Since these values obtained from quoted prices in an active market are adjusted, such securities are reflected as Level 2.
60
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
The Funds have procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available or which may not be reliably priced. Under these procedures, the Funds primarily employ a market-based approach that may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine its fair value. The Funds may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
The following is a summary of the inputs used as of December 31, 2023 in valuing the Funds’ investments carried at fair value:
| | | | | | | | | | | | | | | | |
| |
| | | Baron Partners Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 7,072,668,226 | | | $ | — | | | $ | — | | | $ | 7,072,668,226 | |
Private Common Stocks† | | | — | | | | — | | | | 304,337,200 | | | | 304,337,200 | |
Private Convertible Preferred Stocks | | | — | | | | — | | | | 7,361,160 | | | | 7,361,160 | |
Private Preferred Stocks | | | — | | | | — | | | | 537,262,630 | | | | 537,262,630 | |
Short Term Investments | | | — | | | | 664,989 | | | | — | | | | 664,989 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 7,072,668,226 | | | $ | 664,989 | | | $ | 848,960,990 | | | $ | 7,922,294,205 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron Focused Growth Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 1,202,630,587 | | | $ | — | | | $ | — | | | $ | 1,202,630,587 | |
Private Common Stocks | | | — | | | | — | | | | 74,955,780 | | | | 74,955,780 | |
Private Preferred Stocks | | | — | | | | — | | | | 51,132,580 | | | | 51,132,580 | |
Short Term Investments | | | — | | | | 5,193,277 | | | | — | | | | 5,193,277 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 1,202,630,587 | | | $ | 5,193,277 | | | $ | 126,088,360 | | | $ | 1,333,912,224 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron International Growth Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 158,621,051 | | | $ | 333,393,767 | | | $ | 316 | | | $ | 492,015,134 | |
Rights | | | 4,237 | | | | — | | | | — | | | | 4,237 | |
Warrants† | | | 22,221 | | | | — | | | | 0 | | | | 22,221 | |
Short Term Investments | | | — | | | | 21,161,339 | | | | — | | | | 21,161,339 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 158,647,509 | | | $ | 354,555,106 | | | $ | 316 | | | $ | 513,202,931 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron Real Estate Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 1,713,727,822 | | | $ | — | | | $ | — | | | $ | 1,713,727,822 | |
Short Term Investments | | | — | | | | 23,643,399 | | | | — | | | | 23,643,399 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 1,713,727,822 | | | $ | 23,643,399 | | | $ | — | | | $ | 1,737,371,221 | |
| | | | | | | | | | | | | | | | |
| † | See Portfolios of Investments for additional detailed categorizations. |
61
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| | | | | | | | | | | | | | | | |
| |
| | | Baron Emerging Markets Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 1,053,047,192 | | | $ | 3,178,837,059 | | | $ | 11,644 | | | $ | 4,231,895,895 | |
Private Common Stocks | | | — | | | | — | | | | 74,029,330 | | | | 74,029,330 | |
Private Convertible Preferred Stocks† | | | — | | | | — | | | | 96,887,511 | | | | 96,887,511 | |
Rights | | | 79,879 | | | | — | | | | — | | | | 79,879 | |
Warrants | | | 937 | | | | — | | | | — | | | | 937 | |
Short Term Investments | | | — | | | | 163,499,913 | | | | — | | | | 163,499,913 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 1,053,128,008 | | | $ | 3,342,336,972 | | | $ | 170,928,485 | | | $ | 4,566,393,465 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron Global Advantage Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 556,689,908 | | | $ | 85,346,998 | | | $ | — | | | $ | 642,036,906 | |
Private Common Stocks† | | | — | | | | — | | | | 32,313,416 | | | | 32,313,416 | |
Private Convertible Preferred Stocks† | | | — | | | | — | | | | 9,385,479 | | | | 9,385,479 | |
Private Preferred Stocks | | | — | | | | — | | | | 2,798,294 | | | | 2,798,294 | |
Warrants† | | | 127,164 | | | | — | | | | — | | | | 127,164 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 556,817,072 | | | $ | 85,346,998 | | | $ | 44,497,189 | | | $ | 686,661,259 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron Real Estate Income Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 146,299,365 | | | $ | — | | | $ | — | | | $ | 146,299,365 | |
Short Term Investments | | | — | | | | 1,195,576 | | | | — | | | | 1,195,576 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 146,299,365 | | | $ | 1,195,576 | | | $ | — | | | $ | 147,494,941 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron Health Care Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs (Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 205,695,097 | | | $ | — | | | $ | — | | | $ | 205,695,097 | |
Short Term Investments | | | — | | | | 4,598,348 | | | | — | | | | 4,598,348 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 205,695,097 | | | $ | 4,598,348 | | | $ | — | | | $ | 210,293,445 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron FinTech Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 57,508,374 | | | $ | 1,390,185 | | | $ | — | | | $ | 58,898,559 | |
Short Term Investments | | | — | | | | 726,336 | | | | — | | | | 726,336 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 57,508,374 | | | $ | 2,116,521 | | | $ | — | | | $ | 59,624,895 | |
| | | | | | | | | | | | | | | | |
| † | See Portfolios of Investments for additional detailed categorizations. |
62
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| | | | | | | | | | | | | | | | |
| |
| | | Baron New Asia Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 894,869 | | | $ | 3,222,157 | | | $ | — | | | $ | 4,117,026 | |
Short Term Investments | | | — | | | | 270,813 | | | | — | | | | 270,813 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 894,869 | | | $ | 3,492,970 | | | $ | — | | | $ | 4,387,839 | |
| | | | | | | | | | | | | | | | |
| |
| | | Baron Technology Fund | |
| | | | |
| Description | | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) | | | Other
Observable
Inputs
(Level 2) | | | Unobservable
Inputs
(Level 3) | | | Total | |
Common Stocks† | | $ | 8,297,652 | | | $ | 333,783 | | | $ | — | | | $ | 8,631,435 | |
Short Term Investments | | | — | | | | 341,928 | | | | — | | | | 341,928 | |
| | | | | | | | | | | | | | | | |
Total Investments | | $ | 8,297,652 | | | $ | 675,711 | | | $ | — | | | $ | 8,973,363 | |
| | | | | | | | | | | | | | | | |
| † | See Portfolios of Investments for additional detailed categorizations. |
The following is a reconciliation of investments in which unobservable inputs (Level 3) were used in determining fair value:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Baron Partners Fund | |
| | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2022 | | | Accrued
Premiums/
Discounts | | | Net
Realized
Gain
(Loss) | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Purchases | | | Sales | | | Transfers
Into
Level 3 | | | Transfers
Out of
Level 3 | | | Balance as of
December 31,
2023 | | | Change in Net
Unrealized
Appreciation
(Depreciation)
from Investments
still held at
December 31,
2023 | |
Private Common Stocks | | | | | |
Communication Services1 | | $ | 64,260,385 | | | $ | — | | | $ | — | | | $ | (4,219,625 | ) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 60,040,760 | | | $ | (4,219,625 | ) |
Industrials | | | 185,269,761 | | | | — | | | | — | | | | 59,026,679 | | | | — | | | | — | | | | — | | | | — | | | | 244,296,440 | | | | 59,026,679 | |
Private Convertible
Preferred Stocks | |
Industrials | | | 7,651,108 | | | | — | | | | — | | | | (289,948 | ) | | | — | | | | — | | | | — | | | | — | | | | 7,361,160 | | | | (289,948 | ) |
Private Preferred Stocks | | | | | |
Industrials | | | 407,449,715 | | | | — | | | | — | | | | 129,812,915 | | | | — | | | | — | | | | — | | | | — | | | | 537,262,630 | | | | 129,812,915 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 664,630,969 | | | $ | — | | | $ | — | | | $ | 184,330,021 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 848,960,990 | | | $ | 184,330,021 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Baron Focused Growth Fund | |
| | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2022 | | | Accrued
Premiums/
Discounts | | | Net
Realized
Gain
(Loss) | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Purchases | | | Sales | | | Transfers
Into
Level 3 | | | Transfers
Out of
Level 3 | | | Balance as of
December 31,
2023 | | | Change in Net
Unrealized
Appreciation
(Depreciation)
from Investments
still held at
December 31,
2023 | |
Private Common Stocks | | | | | |
Industrials | | $ | 56,845,034 | | | $ | — | | | $ | — | | | $ | 18,110,746 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 74,955,780 | | | $ | 18,110,746 | |
Private Preferred Stocks | | | | | |
Industrials | | | 29,695,891 | | | | — | | | | — | | | | 11,436,429 | | | | 10,000,260 | | | | — | | | | — | | | | — | | | | 51,132,580 | | | | 11,436,429 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 86,540,925 | | | $ | — | | | $ | — | | | $ | 29,547,175 | | | $ | 10,000,260 | | | $ | — | | | $ | — | | | $ | — | | | $ | 126,088,360 | | | $ | 29,547,175 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See Footnotes on page 65.
63
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Baron International Growth Fund | |
| | | | | | | | | | |
Investments in
Securities | | Balance as of
December 31,
2022 | | | Accrued
Premiums/
Discounts | | | Net
Realized
Gain
(Loss) | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Purchases | | | Sales | | | Transfers
Into
Level 3 | | | Transfers
Out of
Level 3 | | | Balance as of
December 31,
2023 | | | Change in Net
Unrealized
Appreciation
(Depreciation)
from Investments
still held at
December 31,
2023 | |
Common Stocks | | | | | | | | | |
Russia | | $ | 383 | | | $ | — | | | $ | — | | | $ | (6,182 | ) | | $ | 6,115 | | | $ | — | | | $ | — | | | $ | — | | | $ | 316 | | | $ | (6,182 | ) |
Warrants | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Canada2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 383 | | | $ | — | | | $ | — | | | $ | (6,182 | ) | | $ | 6,115 | | | $ | — | | | $ | — | | | $ | — | | | $ | 316 | | | $ | (6,182 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Baron Emerging Markets Fund | |
| | | | | | | | | | |
Investments in
Securities | | Balance as of
December 31,
2022 | | | Accrued
Premiums/
Discounts | | | Net
Realized
Gain
(Loss) | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Purchases | | | Sales | | | Transfers
Into
Level 3 | | | Transfers
Out of
Level 3 | | | Balance as of
December 31,
2023 | | | Change in Net
Unrealized
Appreciation
(Depreciation)
from Investments
still held at
December 31,
2023 | |
Common Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
India3 | | $ | 4,695,422 | | | $ | — | | | $ | — | | | $ | 69,475 | | | $ | — | | | $ | — | | | $ | — | | | $ | (4,764,897 | ) | | $ | — | | | $ | — | |
Russia | | | 973,717 | | | | — | | | | (121,196,195 | ) | | | 159,646,544 | | | | 466,134 | | | | (39,878,556 | ) | | | — | | | | — | | | | 11,644 | | | | (226,828 | ) |
Spain4 | | | 895,880 | | | | — | | | | — | | | | 229,345 | | | | — | | | | — | | | | — | | | | (1,125,225 | ) | | | — | | | | — | |
Private Common Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
India | | | 62,888,509 | | | | — | | | | — | | | | 11,140,821 | | | | — | | | | — | | | | — | | | | — | | | | 74,029,330 | | | | 11,140,821 | |
Private Convertible Preferred Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
India | | | 124,493,494 | | | | — | | | | — | | | | (27,605,983 | ) | | | — | | | | — | | | | — | | | | — | | | | 96,887,511 | | | | (27,605,983 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 193,947,022 | | | $ | — | | | $ | (121,196,195 | ) | | $ | 143,480,202 | | | $ | 466,134 | | | $ | (39,878,556 | ) | | $ | — | | | $ | (5,890,122 | ) | | $ | 170,928,485 | | | $ | (16,691,990 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Baron Global Advantage Fund | |
| | | | | | | | | | |
Investments in
Securities | | Balance as of
December 31,
2022 | | | Accrued
Premiums/
Discounts | | | Net
Realized
Gain
(Loss) | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Purchases | | | Sales | | | Transfers
Into
Level 3 | | | Transfers
Out of
Level 3 | | | Balance as of
December 31,
2023 | | | Change in Net
Unrealized
Appreciation
(Depreciation)
from Investments
still held at
December 31,
2023 | |
Common Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Spain4 | | $ | 292,283 | | | | $— | | | $ | 38,840 | | | $ | 36,306 | | | $ | — | | | $ | (38,947 | ) | | $ | — | | | $ | (328,482 | ) | | $ | — | | | $ | — | |
Private Common Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | | 24,083,038 | | | | — | | | | — | | | | 7,672,822 | | | | — | | | | — | | | | 557,556 | 5 | | | — | | | | 32,313,416 | | | | (4,943,217 | ) |
Private Convertible Preferred Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
India | | | 44,144,184 | | | | — | | | | — | | | | (38,359,894 | ) | | | — | | | | — | | | | — | | | | — | | | | 5,784,290 | | | | (38,359,894 | ) |
United States | | | 14,339,262 | | | | — | | | | — | | | | (10,180,517 | ) | | | — | | | | — | | | | — | | | | (557,556 | )5 | | | 3,601,189 | | | | 2,435,522 | |
Private Preferred Stocks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | | 11,087,146 | | | | — | | | | — | | | | (8,288,852 | ) | | | — | | | | — | | | | — | | | | — | | | | 2,798,294 | | | | (8,288,852 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 93,945,913 | | | $ | — | | | $ | 38,840 | | | $ | (49,120,135 | ) | | $ | — | | | $ | (38,947 | ) | | $ | 557,556 | | | $ | (886,038 | ) | | $ | 44,497,189 | | | $ | (49,156,441 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See Footnotes on page 65.
64
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Baron New Asia Fund | |
| | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2022 | | | Accrued
Premiums/
Discounts | | | Net
Realized
Gain
(Loss) | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Purchases | | | Sales | | | Transfers
Into
Level 3 | | | Transfers
Out of
Level 3 | | | Balance as of
December 31,
2023 | | | Change in Net
Unrealized
Appreciation
(Depreciation)
from Investments
still held at
December 31,
2023 | |
Common Stocks | |
India3 | | $ | 5,070 | | | $ | — | | | $ | — | | | $ | 75 | | | $ | — | | | $ | — | | | $ | — | | | $ | (5,145 | ) | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | GICS sector reclassification for StubHub Holdings, Inc. from Consumer Discretionary to Communication Services occurred on March 17, 2023. |
| 2 | Constellation Software, Inc. warrants shares were received in a spin-off on August 23, 2023, but were not listed on an exchange. |
| 3 | Aarti Pharmalabs Ltd. commenced trading on an exchange as of January 30, 2023. |
| 4 | Codere Online Luxembourg, S.A. Founders shares restriction placed on resale was lifted on November 15, 2023. |
| 5 | Farmers Business Network, Inc. private preferred stock converted to private common stock on September 28, 2023. |
Unobservable valuation inputs developed by the Adviser for significant (greater than 1% of net assets) Level 3 investments as of December 31, 2023 were as follows:
| | | | | | | | | | | | | | |
|
Baron Partners Fund |
| | | | | | | |
| Sector | | Company | | Fair Value as of December 31, 2023 | | Valuation Technique | | Unobservable Input | | Weighted Average used on December 31, 2023 | | Range used on December 31, 2023 | | Impact to Valuation from an Increase in Input* |
Private Common Stocks: Communication Services | | StubHub
Holdings,
Inc. | | $43,648,760 | | Combination of
valuation using
multiples, current
value via comparable
companies, option-
pricing, and scenario
analysis methods | | Enterprise Value /
EBITDA Multiple | | 17.9x% | | 10.3x - 21.5x | | Increase |
| | Change in the composite
equity index of
comparable companies | | (0.58)% | | (1.06)% -(0.09)% | | Increase |
| | Discount for lack of
marketability | | 8.83% | | 6.36% - 8.96% | | Decrease |
| | Estimated volatility of
the returns of equity4 | | 38.84% | | 24.90% - 46.00% | | Decrease |
| | Scenario Probabilities:
Scenario A /Scenario B /
Scenario C6 | | 95% / 4% / 1% | | 1% - 95% | | n/a |
Private Common Stocks: Communication Services | | X Holdings I,
Inc. | | $16,392,000 | | Recent valuation for
employee grants | | Enterprise Value
Estimate
| | $19 billion | | $19 billion | | n/a |
Private Common Stocks: Industrials | | Space
Exploration
Technologies
Corp. | | $244,296,440 | | Observed transaction | | Observed Transaction
Price | | $97.00 | | $97.00 | | Increase |
Private Preferred Stocks: Industrials | | Space
Exploration
Technologies
Corp. | | $537,262,630 | | Observed transaction | | Observed Transaction
Price | | $970.00 | | $970.00 | | Increase |
Private Convertible Preferred Stocks: Industrials | | Northvolt
AB | | $7,361,160 | | Combination of
observed transaction,
current value via
comparable
companies, and
option-pricing
methods | | Observed Transaction
Price | | $0.37 | | $0.37 | | Increase |
| | Change in the composite
equity index of
comparable companies | | (1.45)% | | (3.85)% - 0.44% | | Increase |
| | Discount for lack of
marketability | | 18.19% | | 18.19% | | Decrease |
| | Estimated volatility of
the returns of equity1 | | 55.06% | | 28.32% - 87.21% | | Decrease |
See Footnotes on page 67.
65
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| | | | | | | | | | | | | | |
|
Baron Focused Growth Fund |
| | | | | | | |
| Sector | | Company | | Fair Value as of December 31, 2023 | | Valuation Technique | | Unobservable Input | | Weighted Average used on December 31, 2023 | | Range used on December 31, 2023 | | Impact to Valuation from an Increase in Input* |
Private Common Stocks: Industrials | | Space
Exploration
Technologies
Corp. | | $74,955,780 | | Observed transaction | | Observed Transaction
Price | | $97.00 | | $97.00 | | Increase |
Private Preferred Stocks: Industrials | | Space
Exploration
Technologies
Corp. | | $51,132,580 | | Observed transaction | | Observed Transaction
Price | | $970.00 | | $970.00 | | Increase |
| | | | | | | | | | | | | | |
|
Baron Emerging Markets Fund |
| | | | | | | |
| Sector | | Company | | Fair Value as of December 31, 2023 | | Valuation Technique | | Unobservable Input | | Weighted Average used on December 31, 2023 | | Range used on December 31, 2023 | | Impact to Valuation from an Increase in Input* |
Private Common Stocks: Financials | | Pine Labs
PTE. Ltd. | | $74,029,330 | | Combination of observed
transaction, current
value
via comparable
companies, scenario
analysis, and option-
pricing methods | | Observed Transaction
Price | | $609.30 | | $609.30 | | Increase |
| | Change in the composite
equity index of
comparable companies | | 0.23% | | 0% - 3.05% | | Increase |
| | Discount for lack of
marketability | | 5.83% | | 5.83% | | Decrease |
| | Estimated volatility of
the returns of equity5 | | 16.88% | | 14.13% - 41.59% | | Decrease |
| | Scenario Probabilities:
Scenario A / Scenario B7 | | 100% / 0% | | 0% - 100% | | n/a |
Private Convertible Preferred Stocks: Consumer Discretionary | | Bundl
Technologies
Private Ltd. | | $87,247,656 | | Combination of observed
transaction,
current value via
comparable
companies, scenario
analysis, and option-
pricing methods | | Observed Transaction
Price | | 492,430.00
Indian rupee | | 492,430.00
Indian rupee | | Increase |
| | Change in the composite
equity index of
comparable companies | | 0.14% | | (1.02)% - 0.41% | | Increase |
| | Discount for lack of
marketability | | 2.63% | | 2.63% | | Decrease |
| | Estimated volatility of
the returns of equity5 | | 28.19% | | 9.47% - 38.26% | | Decrease |
| | Scenario Probabilities:
Scenario A / Scenario B7 | | 100% /0% | | 0% - 100% | | n/a |
Private Convertible Preferred Stocks: Consumer Discretionary | | Think &
Learn Private
Limited | | $9,639,855 | | Discount to equity value
from last observed
transaction | | Discount | | (86.36)% | | (86.36)% | | Decrease |
See Footnotes on page 67.
66
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| | | | | | | | | | | | | | |
|
Baron Global Advantage Fund |
| | | | | | | |
| Sector | | Company | | Fair Value as of
December 31, 2023 | | Valuation Technique | | Unobservable Input | | Weighted Average used on December 31, 2023 | | Range used on December 31, 2023 | | Impact to
Valuation
from an
Increase
in Input* |
Private Common Stocks: Industrials | | Space
Exploration
Technologies
Corp. | | $31,755,860 | | Observed transaction | | Observed Transaction
Price | | $97.00 | | $97.00 | | Increase |
Private Common Stocks: Materials | | Farmers
Business
Network, Inc. | | $557,556 | | Scenario analysis | | Public Markets Event
Scenario Probabilities2 | | 9.1% | | 8% - 10% | | n/a |
| | Liquidity Scenario
Probabilities:
Scenario A / Scenario B7 | | 50.00% | | 50% - 50% | | n/a |
Private Convertible Preferred Stocks: Consumer Discretionary | | Resident
Home, Inc. | | $3,601,189 | | Combination of
third-party
valuation, current
value via
comparable
companies,
option-pricing, and
scenario analysis
methods | | Third-Party Valuation | | $50.27 | | $50.27 | | Increase |
| | Change in the
composite
equity index of
comparable companies | | (2.53)% | | (4.63)% - (0.74)% | | Increase |
| | Discount for lack of
marketability | | 21.60% | | 21.60% | | Decrease |
| | Estimated volatility of
the returns of equity4 | | 64.98% | | 37.42% - 93.00% | | Decrease |
| | Scenario Probabilities:
Scenario A / Scenario B7 | | 75% / 25% | | 25% - 75% | | n/a |
Private Convertible Preferred Stocks: Consumer Discretionary | | Think &
Learn Private
Limited | | $5,784,290 | | Discount to equity
value from last
observed transaction | | Discount | | (86.36)% | | (86.36)% | | Decrease |
Private Preferred Stocks: Industrials | | GM Cruise
Holdings LLC | | $2,798,294 | | Combination of
observed transaction
price and
scenario analysis
methods | | Observed Transaction
Price | | $24.27 | | $24.27 | | Increase |
| | Scenario Probabilities:
Scenario A / Scenario B
/ Scenario C3 | | 50% / 50% / 0% | | 0% - 50% | | n/a |
| 1 | The volatility was calculated as a simple-average of the volatilities of the individual comparable companies. |
| 2 | The probabilities are associated with a range of potential IPO valuations. |
| 3 | Scenario A represents a worst case scenario. Scenario B represents a negative scenario that is better than the worst case. Scenario C represents a positive scenario. |
| 4 | The volatility was calculated as a weighted-average of the volatilities of the individual comparable companies. Some companies have a higher weight in the calculation than others. |
| 5 | The volatility was calculated as a weighted-average of the volatilities of the individual comparable companies and an ETF. Some companies have a higher weight in the calculation than others. |
| 6 | Scenario A represents a Direct Listing/ IPO Event, Scenario B represents an Other Sale Event, and Scenario C represents a Liquidation Event. |
| 7 | Scenario A represents an IPO Event, while Scenario B represents a Liquidation/M&A Event. |
| * | Represents the directional change in the fair value of Level 3 investments that could have resulted from an increase in the corresponding input as of period end. A decrease to the unobservable input would have had the opposite effect. Significant changes in these inputs may have resulted in a significantly higher or lower fair value measurement at period end. |
A significant change in the EV/EBITDA multiple ratio may result in a directionally similar significant change in the fair value measurement, while a significant change in the discount for lack of marketability and equity index of comparable companies may not result in a materially higher or lower fair value measurement.
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
Federal income tax regulations differ from GAAP. Therefore, distributions determined in accordance with tax regulations may differ in amount or character from net investment income and net realized gain for financial reporting purposes. Net investment income (loss) and net realized and unrealized gain (loss) may differ for financial statement and tax purposes due to differing treatments of net investment loss, foreign currency gains and losses, non-deductible interest expense, reclassification of distributions, partnership basis adjustments, income from passive foreign investment companies, foreign capital gains tax, late year loss deferral, post-October loss deferral, and wash sale loss deferral. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences.
67
| | |
| Baron Select Funds | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS (Continued)
For the year ended December 31, 2023, the Funds recorded the following permanent reclassifications to reflect tax character. Reclassifications between income, gains and paid-in capital relate primarily to the tax treatment of net investment losses. Results of operations and net assets were not affected by these reclassifications.
| | | | | | | | |
| | |
| Fund | | Distributable
Earnings/
(Losses) | | | Paid-In
Capital | |
Baron Partners Fund | | $ | 42,400,906 | | | $ | (42,400,906 | ) |
Baron Focused Growth Fund | | | 3,872,144 | | | | (3,872,144 | ) |
Baron International Growth Fund | | | 8,896 | | | | (8,896 | ) |
Baron Real Estate Fund | | | — | | | | — | |
Baron Emerging Markets Fund | | | (361,088 | ) | | | 361,088 | |
Baron Global Advantage Fund | | | 6,586,800 | | | | (6,586,800 | ) |
Baron Real Estate Income Fund | | | — | | | | — | |
Baron Health Care Fund | | | 31,269 | | | | (31,269 | ) |
Baron FinTech Fund | | | 71,930 | | | | (71,930 | ) |
Baron New Asia Fund | | | (9,549 | ) | | | 9,549 | |
Baron Technology Fund | | | 34,134 | | | | (34,134 | ) |
As of December 31, 2023, the Funds’ cost of investments and gross unrealized appreciation (depreciation) for U.S. federal income tax purposes were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Baron
Partners Fund | | | Baron
Focused
Growth
Fund | | | Baron
International
Growth
Fund | | | Baron Real
Estate Fund | | | Baron
Emerging
Markets Fund | |
Cost of investments | | $ | 1,688,805,882 | | | $ | 828,121,461 | | | $ | 420,788,673 | | | $ | 1,320,838,922 | | | $ | 3,893,381,244 | |
| | | | | | | | | | | | | | | | | | | | |
Gross tax unrealized appreciation | | | 6,297,301,032 | | | | 520,366,760 | | | | 118,562,735 | | | | 423,751,416 | | | | 999,621,669 | |
Gross tax unrealized depreciation | | | (63,812,709 | ) | | | (14,575,997 | ) | | | (26,148,477 | ) | | | (7,219,117 | ) | | | (326,609,448 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net tax unrealized appreciation (depreciation) | | | 6,233,488,323 | | | | 505,790,763 | | | | 92,414,258 | | | | 416,532,299 | | | | 673,012,221 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | Baron Global
Advantage
Fund | | | Baron Real
Estate
Income Fund | | | Baron
Health Care
Fund | | | Baron
FinTech
Fund | | | Baron
New Asia
Fund | | | Baron
Technology
Fund | |
Cost of investments | | $ | 467,535,250 | | | $ | 133,296,405 | | | $ | 166,198,592 | | | $ | 54,870,336 | | | $ | 4,378,885 | | | $ | 7,595,253 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Gross tax unrealized appreciation | | | 291,019,855 | | | | 26,731,003 | | | | 45,022,365 | | | | 6,077,737 | | | | 408,147 | | | | 1,441,588 | |
Gross tax unrealized depreciation | | | (71,893,846 | ) | | | (12,532,467 | ) | | | (927,512 | ) | | | (1,323,178 | ) | | | (399,193 | ) | | | (63,478 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net tax unrealized appreciation (depreciation) | | | 219,126,009 | | | | 14,198,536 | | | | 44,094,853 | | | | 4,754,559 | | | | 8,954 | | | | 1,378,110 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
As of December 31, 2023, the components of net assets on a tax basis were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Baron
Partners Fund | | | Baron
Focused
Growth
Fund | | | Baron
International
Growth
Fund | | | Baron Real
Estate Fund | | | Baron
Emerging
Markets Fund | |
Undistributed (accumulated) ordinary income (loss) | | | — | | | | — | | | | 370,966 | | | | 3,059,605 | | | | 11,457,334 | |
Non-deductible interest expense | | | (84,370,797 | ) | | | — | | | | — | | | | — | | | | — | |
Qualified late year loss deferral | | | — | | | | — | | | | — | | | | — | | | | — | |
Capital loss carryforwards | | | (423,436,273 | ) | | | (93,017,553 | ) | | | (67,968,263 | ) | | | (87,516,612 | ) | | | (1,234,245,748 | ) |
Net tax unrealized appreciation (depreciation) on investments | | | 6,233,488,323 | | | | 505,790,763 | | | | 92,414,258 | | | | 416,532,299 | | | | 673,012,221 | |
Net tax unrealized currency appreciation (depreciation) | | | — | | | | — | | | | (1,503,588 | ) | | | — | | | | (28,644,095 | ) |
Paid-in capital | | | 1,219,105,809 | | | | 922,921,005 | | | | 488,647,020 | | | | 1,408,523,742 | | | | 5,119,406,285 | |
| | | | | | | | | | | | | | | | | | | | |
Net Assets | | $ | 6,944,787,062 | | | $ | 1,335,694,215 | | | $ | 511,960,393 | | | $ | 1,740,599,034 | | | $ | 4,540,985,997 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | Baron Global
Advantage
Fund | | | Baron Real
Estate
Income Fund | | | Baron
Health Care
Fund | | | Baron
FinTech
Fund | | | Baron
New Asia
Fund | | | Baron
Technology
Fund | |
Undistributed (accumulated) ordinary income (loss) | | | — | | | | 230,452 | | | | — | | | | — | | | | 17,177 | | | | — | |
Non-deductible interest expense | | | (205,667 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
Qualified late year loss deferral | | | (720,405 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
Capital loss carryforwards | | | (391,978,801 | ) | | | (21,479,117 | ) | | | (40,281,394 | ) | | | (6,666,481 | ) | | | (1,008,011 | ) | | | (920,895 | ) |
Net tax unrealized appreciation (depreciation) on investments | | | 219,126,009 | | | | 14,198,536 | | | | 44,094,853 | | | | 4,754,559 | | | | 8,954 | | | | 1,378,110 | |
Net tax unrealized currency appreciation (depreciation) | | | — | | | | — | | | | — | | | | — | | | | (37,085 | ) | | | 5 | |
Paid-in capital | | | 859,572,479 | | | | 155,133,303 | | | | 206,618,945 | | | | 61,510,807 | | | | 5,355,026 | | | | 8,572,994 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Assets | | $ | 685,793,615 | | | $ | 148,083,174 | | | $ | 210,432,404 | | | $ | 59,598,885 | | | $ | 4,336,061 | | | $ | 9,030,214 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
68
| | |
| December 31, 2023 | | Baron Select Funds |
NOTES TO FINANCIAL STATEMENTS (Continued)
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS (Continued)
At December 31, 2023, the Funds had capital loss carryforwards as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Baron Partners
Fund | | | Baron
Focused
Growth
Fund | | | Baron
International
Growth
Fund | | | Baron Real
Estate Fund | | | Baron
Emerging
Markets Fund | |
Short Term | | $ | 199,606,737 | | | $ | 65,670,065 | | | $ | 41,024,927 | | | $ | 87,516,612 | | | $ | 691,198,756 | |
| | | | | | | | | | | | | | | | | | | | |
Long Term | | $ | 223,829,536 | | | $ | 27,347,488 | | | $ | 26,943,336 | | | $ | — | | | $ | 543,046,992 | |
| | | | | | | | | | | | | | | | | | | | |
Capital loss carryforward utilized during the year ended December 31, 2023 | | $ | — | | | $ | — | | | $ | — | | | $ | 4,394,589 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | Baron Global
Advantage
Fund | | | Baron Real
Estate
Income Fund | | | Baron
Health Care
Fund | | | Baron
FinTech
Fund | | | Baron
New Asia
Fund | | | Baron
Technology
Fund | |
Short Term | | $ | 176,960,057 | | | $ | 19,495,138 | | | $ | 35,739,625 | | | $ | 2,787,006 | | | $ | 423,470 | | | $ | 563,218 | 1 |
| | | | | | | | | | | | | | | | | | | | | | | | |
Long Term | | $ | 215,018,744 | | | $ | 1,983,979 | | | $ | 4,541,769 | | | $ | 3,879,475 | | | $ | 584,541 | | | $ | 357,677 | 1 |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital loss carryforward utilized during the year ended December 31, 2023 | | $ | — | | | $ | — | | | $ | 1,797,821 | | | $ | 30,046 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | Future utilization of losses may be subject to limitations under current tax laws. |
The tax character of distributions paid during the years ended December 31, 2023 and December 31, 2022 was as follows:
| | | | | | | | | | | | | | | | |
| | |
| | | Year Ended
December 31, 2023 | | | Year Ended
December 31, 2022 | |
| | | | |
| | | Ordinary1 | | | Long Term
Capital Gain | | | Ordinary1 | | | Long Term
Capital Gain | |
Baron Partners Fund | | $ | — | | | $ | — | | | $ | — | | | $ | 151,105,996 | |
Baron Focused Growth Fund | | | — | | | | — | | | | — | | | | 75,070,394 | |
Baron International Growth Fund | | | 2,770,604 | | | | — | | | | 67,263 | | | | 6,202,900 | |
Baron Real Estate Fund | | | 6,044,613 | | | | — | | | | 23,995,802 | | | | 13,592,258 | |
Baron Emerging Markets Fund | | | 30,922,677 | | | | — | | | | — | | | | — | |
Baron Global Advantage Fund | | | — | | | | — | | | | — | | | | 17,374,025 | |
Baron Real Estate Income Fund | | | 2,148,522 | | | | — | | | | 1,233,337 | | | | 613,536 | |
Baron Health Care Fund | | | — | | | | — | | | | — | | | | — | |
Baron FinTech Fund | | | — | | | | — | | | | — | | | | 579,664 | |
Baron New Asia Fund | | | — | | | | — | | | | — | | | | — | |
Baron Technology Fund | | | — | | | | — | | | | — | | | | — | |
| 1 | For tax purposes, short-term capital gains are considered ordinary income distributions. |
The Funds follow the provisions of FASB Codification Section 740 (ASC Section 740) “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in tax positions taken or expected to be taken on a tax return. ASC Section 740 sets forth a threshold for financial statement recognition, measurement and disclosure of tax positions taken or expected to be taken on a tax return. The Funds are required to recognize the tax effects of certain tax positions under a “more likely than not” standard, that based on their technical merits, have more than 50% likelihood of being sustained upon examination. Management has analyzed the tax positions taken on the Funds’ federal income tax returns for all open years (current and prior three years), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. At December 31, 2023 the Funds did not have any uncertain tax benefits that require recognition, de-recognition or disclosure. The Funds’ federal, state and local income and federal excise tax returns for which the applicable statutes of limitations have not expired (current and prior three years) are subject to examination by the Internal Revenue Service and state departments of revenue.
9. RECENT REGULATORY UPDATE
In October 2022, the SEC adopted the Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds rule and reform amendments requiring open-end management investment companies, including mutual funds and exchange-traded funds, to transmit concise and visually engaging semi-annual and annual tailored shareholder reports that highlight key information, including fund expenses, performance, and holdings to shareholders. Certain information from the Funds’ current shareholder reports, including the Funds’ portfolios of investments, financial statements, and financial highlights, will move to Form N-CSR. This information will be available online, mailed upon request and filed on a semi-annual basis. The rule and form amendments have a compliance date of July 24, 2024. Accordingly, the rule and form amendments will not impact the Funds until the 2024 semi-annual shareholder reports.
10. SUBSEQUENT EVENTS
Management has evaluated events occurring subsequent to the date of the Statements of Assets and Liabilities and through the date of issuance of the financial statements and has determined that there were no subsequent events that required adjustment to or disclosure in the financial statements.
69
| | |
| Baron Select Funds | | December 31, 2023 |
FINANCIAL HIGHLIGHTS
BARON PARTNERS FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | | |
| | | Net
asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total
from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Operating
expenses
(%) | | | Interest
expense
(%) | | | Total
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | | |
2023 | | | 111.55 | | | | (2.52 | ) | | | 50.60 | | | | 48.08 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 159.63 | | | | 43.10 | | | | 1.30 | | | | 0.94 | | | | 2.24 | | | | (1.77 | ) | | | 2,959.9 | | | | 5.19 | |
| | | | | | | | | | | | | | | |
2022 | | | 199.00 | | | | (1.96 | ) | | | (81.93 | ) | | | (83.89 | ) | | | 0.00 | | | | (3.56 | ) | | | (3.56 | ) | | | 111.55 | | | | (42.56 | ) | | | 1.30 | | | | 0.39 | | | | 1.69 | | | | (1.29 | ) | | | 2,136.4 | | | | 6.19 | |
| | | | | | | | | | | | | | | |
2021 | | | 164.18 | | | | (1.98 | ) | | | 52.16 | | | | 50.18 | | | | 0.00 | | | | (15.36 | ) | | | (15.36 | ) | | | 199.00 | | | | 31.39 | | | | 1.30 | | | | 0.06 | | | | 1.36 | | | | (1.11 | ) | | | 3,903.2 | | | | 9.14 | |
| | | | | | | | | | | | | | | |
2020 | | | 69.04 | | | | (1.12 | ) | | | 102.29 | | | | 101.17 | | | | 0.00 | | | | (6.03 | ) | | | (6.03 | ) | | | 164.18 | | | | 148.56 | | | | 1.31 | | | | 0.25 | | | | 1.56 | | | | (1.18 | ) | | | 3,219.4 | | | | 10.70 | |
| | | | | | | | | | | | | | | |
2019 | | | 47.77 | | | | (0.75 | ) | | | 22.20 | | | | 21.45 | | | | 0.00 | | | | (0.18 | ) | | | (0.18 | ) | | | 69.04 | | | | 44.97 | | | | 1.32 | | | | 0.90 | | | | 2.22 | | | | (1.29 | ) | | | 1,353.6 | | | | 7.97 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | | |
2023 | | | 115.85 | | | | (2.25 | ) | | | 52.61 | | | | 50.36 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 166.21 | | | | 43.47 | | | | 1.04 | | | | 0.95 | | | | 1.99 | | | | (1.52 | ) | | | 3,464.4 | | | | 5.19 | |
| | | | | | | | | | | | | | | |
2022 | | | 205.95 | | | | (1.63 | ) | | | (84.91 | ) | | | (86.54 | ) | | | 0.00 | | | | (3.56 | ) | | | (3.56 | ) | | | 115.85 | | | | (42.41 | ) | | | 1.04 | | | | 0.40 | | | | 1.44 | | | | (1.04 | ) | | | 2,329.7 | | | | 6.19 | |
| | | | | | | | | | | | | | | |
2021 | | | 169.04 | | | | (1.58 | ) | | | 53.85 | | | | 52.27 | | | | 0.00 | | | | (15.36 | ) | | | (15.36 | ) | | | 205.95 | | | | 31.73 | | | | 1.05 | | | | 0.06 | | | | 1.11 | | | | (0.86 | ) | | | 4,126.7 | | | | 9.14 | |
| | | | | | | | | | | | | | | |
2020 | | | 70.82 | | | | (0.92 | ) | | | 105.17 | | | | 104.25 | | | | 0.00 | | | | (6.03 | ) | | | (6.03 | ) | | | 169.04 | | | | 149.18 | | | | 1.05 | | | | 0.25 | | | | 1.30 | | | | (0.93 | ) | | | 3,191.4 | | | | 10.70 | |
| | | | | | | | | | | | | | | |
2019 | | | 48.86 | | | | (0.62 | ) | | | 22.76 | | | | 22.14 | | | | 0.00 | | | | (0.18 | ) | | | (0.18 | ) | | | 70.82 | | | | 45.38 | | | | 1.06 | | | | 0.90 | | | | 1.96 | | | | (1.03 | ) | | | 1,187.0 | | | | 7.97 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | | |
2023 | | | 115.84 | | | | (2.25 | ) | | | 52.59 | | | | 50.34 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 166.18 | | | | 43.46 | | | | 1.05 | | | | 0.94 | | | | 1.99 | | | | (1.52 | ) | | | 520.5 | | | | 5.19 | |
| | | | | | | | | | | | | | | |
2022 | | | 205.94 | | | | (1.63 | ) | | | (84.91 | ) | | | (86.54 | ) | | | 0.00 | | | | (3.56 | ) | | | (3.56 | ) | | | 115.84 | | | | (42.41 | ) | | | 1.04 | | | | 0.40 | | | | 1.44 | | | | (1.04 | ) | | | 359.8 | | | | 6.19 | |
| | | | | | | | | | | | | | | |
2021 | | | 169.03 | | | | (1.58 | ) | | | 53.85 | | | | 52.27 | | | | 0.00 | | | | (15.36 | ) | | | (15.36 | ) | | | 205.94 | | | | 31.73 | | | | 1.05 | | | | 0.06 | | | | 1.11 | | | | (0.86 | ) | | | 627.5 | | | | 9.14 | |
| | | | | | | | | | | | | | | |
2020 | | | 70.82 | | | | (0.91 | ) | | | 105.15 | | | | 104.24 | | | | 0.00 | | | | (6.03 | ) | | | (6.03 | ) | | | 169.03 | | | | 149.16 | | | | 1.05 | | | | 0.25 | | | | 1.30 | | | | (0.93 | ) | | | 465.0 | | | | 10.70 | |
| | | | | | | | | | | | | | | |
2019 | | | 48.86 | | | | (0.62 | ) | | | 22.76 | | | | 22.14 | | | | 0.00 | | | | (0.18 | ) | | | (0.18 | ) | | | 70.82 | | | | 45.38 | | | | 1.06 | | | | 0.90 | | | | 1.96 | | | | (1.03 | ) | | | 186.9 | | | | 7.97 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| | |
| 70 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
FINANCIAL HIGHLIGHTS (Continued)
BARON FOCUSED GROWTH FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net
asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total
from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 28.61 | | | | (0.19 | ) | | | 8.03 | | | | 7.84 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 36.45 | | | | 27.40 | | | | 1.32 | | | | 1.32 | | | | (0.57 | ) | | | 316.9 | | | | 5.84 | |
| | | | | | | | | | | | | | |
2022 | | | 44.52 | | | | (0.26 | ) | | | (12.14 | ) | | | (12.40 | ) | | | 0.00 | | | | (3.51 | ) | | | (3.51 | ) | | | 28.61 | | | | (28.30 | ) | | | 1.32 | | | | 1.32 | | | | (0.74 | ) | | | 174.3 | | | | 22.34 | |
| | | | | | | | | | | | | | |
2021 | | | 43.36 | | | | (0.51 | ) | | | 8.59 | | | | 8.08 | | | | 0.00 | | | | (6.92 | ) | | | (6.92 | ) | | | 44.52 | | | | 18.83 | | | | 1.32 | 3 | | | 1.32 | 3 | | | (1.12 | ) | | | 209.8 | | | | 45.28 | |
| | | | | | | | | | | | | | |
2020 | | | 20.18 | | | | (0.32 | ) | | | 24.74 | | | | 24.42 | | | | 0.00 | | | | (1.24 | ) | | | (1.24 | ) | | | 43.36 | | | | 122.21 | | | | 1.35 | | | | 1.35 | | | | (1.15 | ) | | | 157.7 | | | | 18.09 | |
| | | | | | | | | | | | | | |
2019 | | | 15.81 | | | | (0.12 | ) | | | 4.85 | | | | 4.73 | | | | 0.00 | | | | (0.36 | ) | | | (0.36 | ) | | | 20.18 | | | | 30.03 | 4 | | | 1.39 | 3 | | | 1.35 | 3 | | | (0.67 | ) | | | 49.1 | | | | 4.53 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 29.82 | | | | (0.11 | ) | | | 8.38 | | | | 8.27 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 38.09 | | | | 27.73 | | | | 1.06 | | | | 1.06 | | | | (0.31 | ) | | | 690.5 | | | | 5.84 | |
| | | | | | | | | | | | | | |
2022 | | | 46.09 | | | | (0.16 | ) | | | (12.60 | ) | | | (12.76 | ) | | | 0.00 | | | | (3.51 | ) | | | (3.51 | ) | | | 29.82 | | | | (28.11 | ) | | | 1.06 | | | | 1.06 | | | | (0.45 | ) | | | 300.3 | | | | 22.34 | |
| | | | | | | | | | | | | | |
2021 | | | 44.56 | | | | (0.40 | ) | | | 8.85 | | | | 8.45 | | | | 0.00 | | | | (6.92 | ) | | | (6.92 | ) | | | 46.09 | | | | 19.16 | | | | 1.05 | 3 | | | 1.05 | 3 | | | (0.85 | ) | | | 307.8 | | | | 45.28 | |
| | | | | | | | | | | | | | |
2020 | | | 20.67 | | | | (0.24 | ) | | | 25.37 | | | | 25.13 | | | | 0.00 | | | | (1.24 | ) | | | (1.24 | ) | | | 44.56 | | | | 122.75 | | | | 1.07 | | | | 1.07 | | | | (0.88 | ) | | | 233.7 | | | | 18.09 | |
| | | | | | | | | | | | | | |
2019 | | | 16.15 | | | | (0.08 | ) | | | 4.96 | | | | 4.88 | | | | 0.00 | | | | (0.36 | ) | | | (0.36 | ) | | | 20.67 | | | | 30.33 | 4 | | | 1.11 | 3 | | | 1.10 | 3 | | | (0.42 | ) | | | 91.3 | | | | 4.53 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 29.84 | | | | (0.11 | ) | | | 8.39 | | | | 8.28 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 38.12 | | | | 27.75 | | | | 1.06 | | | | 1.06 | | | | (0.32 | ) | | | 328.3 | | | | 5.84 | |
| | | | | | | | | | | | | | |
2022 | | | 46.12 | | | | (0.17 | ) | | | (12.60 | ) | | | (12.77 | ) | | | 0.00 | | | | (3.51 | ) | | | (3.51 | ) | | | 29.84 | | | | (28.11 | ) | | | 1.05 | | | | 1.05 | | | | (0.48 | ) | | | 252.9 | | | | 22.34 | |
| | | | | | | | | | | | | | |
2021 | | | 44.59 | | | | (0.40 | ) | | | 8.85 | | | | 8.45 | | | | 0.00 | | | | (6.92 | ) | | | (6.92 | ) | | | 46.12 | | | | 19.15 | | | | 1.05 | 3 | | | 1.05 | 3 | | | (0.86 | ) | | | 320.6 | | | | 45.28 | |
| | | | | | | | | | | | | | |
2020 | | | 20.68 | | | | (0.24 | ) | | | 25.39 | | | | 25.15 | | | | 0.00 | | | | (1.24 | ) | | | (1.24 | ) | | | 44.59 | | | | 122.78 | | | | 1.07 | | | | 1.07 | | | | (0.87 | ) | | | 271.3 | | | | 18.09 | |
| | | | | | | | | | | | | | |
2019 | | | 16.16 | | | | (0.07 | ) | | | 4.95 | | | | 4.88 | | | | 0.00 | | | | (0.36 | ) | | | (0.36 | ) | | | 20.68 | | | | 30.31 | | | | 1.10 | 3 | | | 1.10 | 3 | | | (0.40 | ) | | | 122.0 | | | | 4.53 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | Includes interest expense of less than 0.01%. |
| 4 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| | |
| See Notes to Financial Statements. | | 71 |
| | |
| Baron Select Funds | | December 31, 2023 |
FINANCIAL HIGHLIGHTS (Continued)
BARON INTERNATIONAL GROWTH FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net
asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total
from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 23.80 | | | | 0.10 | | | | 1.64 | | | | 1.74 | | | | (0.09 | ) | | | 0.00 | | | | (0.09 | ) | | | 25.45 | | | | 7.33 | 3 | | | 1.26 | | | | 1.20 | | | | 0.40 | | | | 76.0 | | | | 32.76 | |
| | | | | | | | | | | | | | |
2022 | | | 33.29 | | | | 0.02 | | | | (9.21 | ) | | | (9.19 | ) | | | 0.00 | | | | (0.30 | ) | | | (0.30 | ) | | | 23.80 | | | | (27.47 | )3 | | | 1.26 | | | | 1.20 | | | | 0.06 | | | | 66.8 | | | | 47.04 | |
| | | | | | | | | | | | | | |
2021 | | | 31.97 | | | | (0.11 | ) | | | 3.18 | | | | 3.07 | | | | (0.63 | ) | | | (1.12 | ) | | | (1.75 | ) | | | 33.29 | | | | 9.64 | 3 | | | 1.23 | | | | 1.20 | | | | (0.33 | ) | | | 100.2 | | | | 36.00 | |
| | | | | | | | | | | | | | |
2020 | | | 24.50 | | | | (0.01 | ) | | | 7.49 | | | | 7.48 | | | | (0.01 | ) | | | 0.00 | | | | (0.01 | ) | | | 31.97 | | | | 30.52 | 3 | | | 1.28 | | | | 1.20 | | | | (0.05 | ) | | | 85.5 | | | | 41.13 | |
| | | | | | | | | | | | | | |
2019 | | | 19.00 | | | | 0.01 | | | | 5.51 | | | | 5.52 | | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) | | | 24.50 | | | | 29.06 | 3 | | | 1.31 | | | | 1.20 | | | | 0.06 | | | | 82.0 | | | | 56.52 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 24.29 | | | | 0.16 | | | | 1.68 | | | | 1.84 | | | | (0.15 | ) | | | 0.00 | | | | (0.15 | ) | | | 25.98 | | | | 7.60 | 3 | | | 0.98 | | | | 0.95 | | | | 0.64 | | | | 314.6 | | | | 32.76 | |
| | | | | | | | | | | | | | |
2022 | | | 33.88 | | | | 0.08 | | | | (9.37 | ) | | | (9.29 | ) | | | 0.00 | | | | (0.30 | ) | | | (0.30 | ) | | | 24.29 | | | | (27.29 | )3 | | | 0.99 | | | | 0.95 | | | | 0.30 | | | | 303.7 | | | | 47.04 | |
| | | | | | | | | | | | | | |
2021 | | | 32.51 | | | | (0.02 | ) | | | 3.22 | | | | 3.20 | | | | (0.71 | ) | | | (1.12 | ) | | | (1.83 | ) | | | 33.88 | | | | 9.88 | 3 | | | 0.96 | | | | 0.95 | | | | (0.05 | ) | | | 497.2 | | | | 36.00 | |
| | | | | | | | | | | | | | |
2020 | | | 24.88 | | | | 0.06 | | | | 7.61 | | | | 7.67 | | | | (0.04 | ) | | | 0.00 | | | | (0.04 | ) | | | 32.51 | | | | 30.83 | 3 | | | 1.01 | | | | 0.95 | | | | 0.25 | | | | 362.9 | | | | 41.13 | |
| | | | | | | | | | | | | | |
2019 | | | 19.29 | | | | 0.06 | | | | 5.61 | | | | 5.67 | | | | (0.07 | ) | | | (0.01 | ) | | | (0.08 | ) | | | 24.88 | | | | 29.39 | 3 | | | 1.04 | | | | 0.95 | | | | 0.27 | | | | 223.6 | | | | 56.52 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 24.28 | | | | 0.16 | | | | 1.68 | | | | 1.84 | | | | (0.15 | ) | | | 0.00 | | | | (0.15 | ) | | | 25.97 | | | | 7.61 | 3 | | | 0.98 | | | | 0.95 | | | | 0.64 | | | | 121.4 | | | | 32.76 | |
| | | | | | | | | | | | | | |
2022 | | | 33.86 | | | | 0.08 | | | | (9.36 | ) | | | (9.28 | ) | | | 0.00 | | | | (0.30 | ) | | | (0.30 | ) | | | 24.28 | | | | (27.28 | )3 | | | 0.99 | | | | 0.95 | | | | 0.31 | | | | 112.2 | | | | 47.04 | |
| | | | | | | | | | | | | | |
2021 | | | 32.49 | | | | (0.03 | ) | | | 3.23 | | | | 3.20 | | | | (0.71 | ) | | | (1.12 | ) | | | (1.83 | ) | | | 33.86 | | | | 9.89 | 3 | | | 0.96 | | | | 0.95 | | | | (0.10 | ) | | | 160.3 | | | | 36.00 | |
| | | | | | | | | | | | | | |
2020 | | | 24.88 | | | | 0.04 | | | | 7.61 | | | | 7.65 | | | | (0.04 | ) | | | 0.00 | | | | (0.04 | ) | | | 32.49 | | | | 30.75 | 3 | | | 0.98 | | | | 0.95 | | | | 0.15 | | | | 163.5 | | | | 41.13 | |
| | | | | | | | | | | | | | |
2019 | | | 19.29 | | | | 0.06 | | | | 5.61 | | | | 5.67 | | | | (0.07 | ) | | | (0.01 | ) | | | (0.08 | ) | | | 24.88 | | | | 29.39 | 3 | | | 1.03 | | | | 0.95 | | | | 0.28 | | | | 17.7 | | | | 56.52 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| | |
| 72 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
FINANCIAL HIGHLIGHTS (Continued)
BARON REAL ESTATE FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net
Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | |
| | | Net
asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Total
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | |
2023 | | | 27.86 | | | | 0.08 | | | | 6.80 | | | | 6.88 | | | | (0.02 | ) | | | 0.00 | | | | (0.02 | ) | | | 34.72 | | | | 24.70 | | | | 1.31 | | | | 0.25 | | | | 381.4 | | | | 57.86 | |
| | | | | | | | | | | | | |
2022 | | | 40.24 | | | | 0.00 | 3 | | | (11.56 | ) | | | (11.56 | ) | | | (0.02 | ) | | | (0.80 | ) | | | (0.82 | ) | | | 27.86 | | | | (28.61 | ) | | | 1.33 | | | | 0.00 | 4 | | | 322.0 | | | | 112.74 | |
| | | | | | | | | | | | | |
2021 | | | 35.21 | | | | (0.10 | ) | | | 8.42 | | | | 8.32 | | | | 0.00 | | | | (3.29 | ) | | | (3.29 | ) | | | 40.24 | | | | 24.03 | | | | 1.31 | | | | (0.26 | ) | | | 514.8 | | | | 64.39 | |
| | | | | | | | | | | | | |
2020 | | | 26.18 | | | | (0.10 | ) | | | 11.34 | | | | 11.24 | | | | (0.00 | )3 | | | (2.21 | ) | | | (2.21 | ) | | | 35.21 | | | | 43.85 | | | | 1.34 | | | | (0.36 | ) | | | 321.8 | | | | 71.46 | |
| | | | | | | | | | | | | |
2019 | | | 20.77 | | | | (0.03 | ) | | | 9.08 | | | | 9.05 | | | | 0.00 | | | | (3.64 | ) | | | (3.64 | ) | | | 26.18 | | | | 44.11 | | | | 1.33 | 5 | | | (0.10 | ) | | | 246.9 | | | | 53.44 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | |
2023 | | | 28.73 | | | | 0.16 | | | | 7.01 | | | | 7.17 | | | | (0.15 | ) | | | 0.00 | | | | (0.15 | ) | | | 35.75 | | | | 25.04 | | | | 1.06 | | | | 0.51 | | | | 1,319.1 | | | | 57.86 | |
| | | | | | | | | | | | | |
2022 | | | 41.36 | | | | 0.08 | | | | (11.89 | ) | | | (11.81 | ) | | | (0.02 | ) | | | (0.80 | ) | | | (0.82 | ) | | | 28.73 | | | | (28.44 | ) | | | 1.07 | | | | 0.25 | | | | 928.7 | | | | 112.74 | |
| | | | | | | | | | | | | |
2021 | | | 36.02 | | | | 0.01 | | | | 8.62 | | | | 8.63 | | | | 0.00 | | | | (3.29 | ) | | | (3.29 | ) | | | 41.36 | | | | 24.36 | | | | 1.05 | | | | 0.04 | | | | 1,490.8 | | | | 64.39 | |
| | | | | | | | | | | | | |
2020 | | | 26.68 | | | | (0.03 | ) | | | 11.60 | | | | 11.57 | | | | (0.02 | ) | | | (2.21 | ) | | | (2.23 | ) | | | 36.02 | | | | 44.28 | | | | 1.08 | | | | (0.10 | ) | | | 705.4 | | | | 71.46 | |
| | | | | | | | | | | | | |
2019 | | | 21.10 | | | | 0.04 | | | | 9.22 | | | | 9.26 | | | | (0.04 | ) | | | (3.64 | ) | | | (3.68 | ) | | | 26.68 | | | | 44.44 | | | | 1.08 | 5 | | | 0.15 | | | | 360.2 | | | | 53.44 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | |
2023 | | | 28.73 | | | | 0.16 | | | | 7.01 | | | | 7.17 | | | | (0.15 | ) | | | 0.00 | | | | (0.15 | ) | | | 35.75 | | | | 25.04 | | | | 1.06 | | | | 0.52 | | | | 40.1 | | | | 57.86 | |
| | | | | | | | | | | | | |
2022 | | | 41.36 | | | | 0.09 | | | | (11.90 | ) | | | (11.81 | ) | | | (0.02 | ) | | | (0.80 | ) | | | (0.82 | ) | | | 28.73 | | | | (28.44 | ) | | | 1.07 | | | | 0.29 | | | | 25.7 | | | | 112.74 | |
| | | | | | | | | | | | | |
2021 | | | 36.02 | | | | 0.01 | | | | 8.62 | | | | 8.63 | | | | 0.00 | | | | (3.29 | ) | | | (3.29 | ) | | | 41.36 | | | | 24.36 | | | | 1.05 | | | | 0.02 | | | | 33.3 | | | | 64.39 | |
| | | | | | | | | | | | | |
2020 | | | 26.69 | | | | (0.03 | ) | | | 11.59 | | | | 11.56 | | | | (0.02 | ) | | | (2.21 | ) | | | (2.23 | ) | | | 36.02 | | | | 44.23 | | | | 1.07 | | | | (0.10 | ) | | | 20.0 | | | | 71.46 | |
| | | | | | | | | | | | | |
2019 | | | 21.10 | | | | 0.04 | | | | 9.23 | | | | 9.27 | | | | (0.04 | ) | | | (3.64 | ) | | | (3.68 | ) | | | 26.69 | | | | 44.51 | | | | 1.07 | 5 | | | 0.17 | | | | 13.2 | | | | 53.44 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | Less than $0.01 per share. |
| 5 | Includes interest expense of less than 0.01%. |
| | |
| See Notes to Financial Statements. | | 73 |
| | |
| Baron Select Funds | | December 31, 2023 |
FINANCIAL HIGHLIGHTS (Continued)
BARON EMERGING MARKETS FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net
Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Return of
capital
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Total
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 12.96 | | | | 0.04 | | | | 0.99 | | | | 1.03 | | | | (0.06 | ) | | | 0.00 | | | | 0.00 | | | | (0.06 | ) | | | 13.93 | | | | 7.95 | | | | 1.37 | | | | 0.26 | | | | 253.2 | | | | 33.37 | |
| | | | | | | | | | | | | | |
2022 | | | 17.51 | | | | (0.01 | ) | | | (4.54 | ) | | | (4.55 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 12.96 | | | | (25.99 | ) | | | 1.38 | | | | (0.07 | ) | | | 283.7 | | | | 43.74 | |
| | | | | | | | | | | | | | |
2021 | | | 18.97 | | | | (0.09 | ) | | | (1.09 | ) | | | (1.18 | ) | | | (0.28 | ) | | | 0.00 | | | | (0.00 | )3 | | | (0.28 | ) | | | 17.51 | | | | (6.26 | ) | | | 1.33 | | | | (0.46 | ) | | | 462.6 | | | | 33.10 | |
| | | | | | | | | | | | | | |
2020 | | | 14.72 | | | | (0.06 | ) | | | 4.31 | | | | 4.25 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 18.97 | | | | 28.87 | | | | 1.35 | | | | (0.44 | ) | | | 507.7 | | | | 55.65 | |
| | | | | | | | | | | | | | |
2019 | | | 12.45 | | | | 0.03 | | | | 2.27 | | | | 2.30 | | | | (0.03 | ) | | | 0.00 | | | | (0.00 | )3 | | | (0.03 | ) | | | 14.72 | | | | 18.48 | | | | 1.35 | | | | 0.23 | | | | 667.1 | | | | 59.00 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 13.04 | | | | 0.07 | | | | 1.01 | | | | 1.08 | | | | (0.10 | ) | | | 0.00 | | | | 0.00 | | | | (0.10 | ) | | | 14.02 | | | | 8.29 | | | | 1.11 | | | | 0.52 | | | | 4,279.6 | | | | 33.37 | |
| | | | | | | | | | | | | | |
2022 | | | 17.58 | | | | 0.03 | | | | (4.57 | ) | | | (4.54 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 13.04 | | | | (25.82 | ) | | | 1.12 | | | | 0.20 | | | | 4,473.6 | | | | 43.74 | |
| | | | | | | | | | | | | | |
2021 | | | 19.06 | | | | (0.04 | ) | | | (1.11 | ) | | | (1.15 | ) | | | (0.33 | ) | | | 0.00 | | | | (0.00 | )3 | | | (0.33 | ) | | | 17.58 | | | | (6.07 | ) | | | 1.08 | | | | (0.22 | ) | | | 8,408.8 | | | | 33.10 | |
| | | | | | | | | | | | | | |
2020 | | | 14.75 | | | | (0.03 | ) | | | 4.34 | | | | 4.31 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 19.06 | | | | 29.22 | | | | 1.09 | | | | (0.20 | ) | | | 6,228.8 | | | | 55.65 | |
| | | | | | | | | | | | | | |
2019 | | | 12.47 | | | | 0.07 | | | | 2.28 | | | | 2.35 | | | | (0.06 | ) | | | 0.00 | | | | (0.01 | ) | | | (0.07 | ) | | | 14.75 | | | | 18.86 | | | | 1.09 | | | | 0.50 | | | | 4,644.8 | | | | 59.00 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 13.05 | | | | 0.07 | | | | 1.01 | | | | 1.08 | | | | (0.10 | ) | | | 0.00 | | | | 0.00 | | | | (0.10 | ) | | | 14.03 | | | | 8.27 | | | | 1.11 | | | | 0.50 | | | | 8.2 | | | | 33.37 | |
| | | | | | | | | | | | | | |
2022 | | | 17.59 | | | | 0.03 | | | | (4.57 | ) | | | (4.54 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 13.05 | | | | (25.81 | ) | | | 1.13 | | | | 0.20 | | | | 10.4 | | | | 43.74 | |
| | | | | | | | | | | | | | |
2021 | | | 19.07 | | | | (0.04 | ) | | | (1.11 | ) | | | (1.15 | ) | | | (0.33 | ) | | | 0.00 | | | | (0.00 | )3 | | | (0.33 | ) | | | 17.59 | | | | (6.07 | ) | | | 1.08 | | | | (0.21 | ) | | | 17.4 | | | | 33.10 | |
| | | | | | | | | | | | | | |
2020 | | | 14.75 | | | | (0.03 | ) | | | 4.35 | | | | 4.32 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 19.07 | | | | 29.29 | | | | 1.09 | | | | (0.18 | ) | | | 13.9 | | | | 55.65 | |
| | | | | | | | | | | | | | |
2019 | | | 12.48 | | | | 0.07 | | | | 2.27 | | | | 2.34 | | | | (0.06 | ) | | | 0.00 | | | | (0.01 | ) | | | (0.07 | ) | | | 14.75 | | | | 18.77 | | | | 1.09 | | | | 0.49 | | | | 10.1 | | | | 59.00 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | Less than $0.01 per share. |
| | |
| 74 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
FINANCIAL HIGHLIGHTS (Continued)
BARON GLOBAL ADVANTAGE FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 24.51 | | | | (0.30 | ) | | | 6.49 | | | | 6.19 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 30.70 | | | | 25.26 | 3 | | | 1.21 | 4 | | | 1.16 | 4 | | | (1.11 | ) | | | 205.5 | | | | 2.03 | |
| | | | | | | | | | | | | | |
2022 | | | 51.65 | | | | (0.37 | ) | | | (26.27 | ) | | | (26.64 | ) | | | 0.00 | | | | (0.50 | ) | | | (0.50 | ) | | | 24.51 | | | | (51.69 | )3,7 | | | 1.20 | 4 | | | 1.15 | 4 | | | (1.14 | ) | | | 223.3 | | | | 11.50 | |
| | | | | | | | | | | | | | |
2021 | | | 51.34 | | | | (0.62 | ) | | | 0.93 | | | | 0.31 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 51.65 | | | | 0.60 | 3,8 | | | 1.15 | 5 | | | 1.15 | 5 | | | (1.14 | ) | | | 786.3 | | | | 23.73 | |
| | | | | | | | | | | | | | |
2020 | | | 28.68 | | | | (0.44 | ) | | | 23.10 | | | | 22.66 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 51.34 | | | | 79.01 | 3 | | | 1.17 | | | | 1.15 | | | | (1.10 | ) | | | 921.7 | | | | 8.75 | |
| | | | | | | | | | | | | | |
2019 | | | 19.77 | | | | (0.02 | ) | | | 8.93 | | | | 8.91 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 28.68 | | | | 45.07 | 3 | | | 1.25 | 5 | | | 1.15 | 5 | | | (0.08 | ) | | | 174.6 | | | | 19.44 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31 | |
| | | | | | | | | | | | | | |
2023 | | | 25.08 | | | | (0.24 | ) | | | 6.65 | | | | 6.41 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 31.49 | | | | 25.56 | 3 | | | 0.95 | 4 | | | 0.91 | 4 | | | (0.86 | ) | | | 470.0 | | | | 2.03 | |
| | | | | | | | | | | | | | |
2022 | | | 52.70 | | | | (0.30 | ) | | | (26.82 | ) | | | (27.12 | ) | | | 0.00 | | | | (0.50 | ) | | | (0.50 | ) | | | 25.08 | | | | (51.57 | )3,7 | | | 0.94 | 5 | | | 0.90 | 5 | | | (0.89 | ) | | | 538.1 | | | | 11.50 | |
| | | | | | | | | | | | | | |
2021 | | | 52.25 | | | | (0.49 | ) | | | 0.94 | | | | 0.45 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 52.70 | | | | 0.86 | 3,8 | | | 0.90 | 5 | | | 0.90 | 5 | | | (0.89 | ) | | | 1,803.3 | | | | 23.73 | |
| | | | | | | | | | | | | | |
2020 | | | 29.12 | | | | (0.35 | ) | | | 23.48 | | | | 23.13 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 52.25 | | | | 79.43 | 3 | | | 0.92 | | | | 0.90 | | | | (0.85 | ) | | | 1,470.9 | | | | 8.75 | |
| | | | | | | | | | | | | | |
2019 | | | 20.02 | | | | (0.01 | ) | | | 9.11 | | | | 9.10 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 29.12 | | | | 45.45 | 3 | | | 1.00 | 5 | | | 0.90 | 5 | | | (0.03 | ) | | | 212.8 | | | | 19.44 | |
|
R6 SHARES | |
|
Year Ended December 31 | |
| | | | | | | | | | | | | | |
2023 | | | 25.09 | | | | (0.24 | ) | | | 6.66 | | | | 6.42 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 31.51 | | | | 25.59 | 3 | | | 0.95 | 4 | | | 0.91 | 4 | | | (0.86 | ) | | | 10.3 | | | | 2.03 | |
| | | | | | | | | | | | | | |
2022 | | | 52.73 | | | | (0.29 | ) | | | (26.85 | ) | | | (27.14 | ) | | | 0.00 | | | | (0.50 | ) | | | (0.50 | ) | | | 25.09 | | | | (51.58 | )3,7 | | | 0.95 | 6 | | | 0.90 | 6 | | | (0.89 | ) | | | 9.3 | | | | 11.50 | |
| | | | | | | | | | | | | | |
2021 | | | 52.28 | | | | (0.50 | ) | | | 0.95 | | | | 0.45 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 52.73 | | | | 0.86 | 3,8 | | | 0.90 | 5 | | | 0.90 | 5 | | | (0.89 | ) | | | 18.4 | | | | 23.73 | |
| | | | | | | | | | | | | | |
2020 | | | 29.14 | | | | (0.32 | ) | | | 23.46 | | | | 23.14 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 52.28 | | | | 79.41 | 3 | | | 0.92 | | | | 0.90 | | | | (0.83 | ) | | | 15.0 | | | | 8.75 | |
| | | | | | | | | | | | | | |
2019 | | | 20.03 | | | | (0.03 | ) | | | 9.14 | | | | 9.11 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 29.14 | | | | 45.48 | 3 | | | 1.00 | 5 | | | 0.90 | 5 | | | (0.10 | ) | | | 6.8 | | | | 19.44 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| 4 | Includes interest expense of 0.01%. |
| 5 | Includes interest expense of less than 0.01%. |
| 6 | Includes interest expense of 0.02%. |
| 7 | The Adviser made a voluntary payment to the Fund in the amount of $82,890 to compensate the Fund for a loss incurred due to a valuation error. The impact of this payment increased the Fund’s total return by less than 0.01%. |
| 8 | The Adviser made voluntary payments to the Fund in the amount of $162,538 to compensate the Fund for losses incurred due to valuation errors. The impact of these payments increased the Fund’s total return by less than 0.01%. |
| | |
| See Notes to Financial Statements. | | 75 |
| | |
| Baron Select Funds | | December 31, 2023 |
FINANCIAL HIGHLIGHTS (Continued)
BARON REAL ESTATE INCOME FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 12.71 | | | | 0.21 | | | | 1.69 | | | | 1.90 | | | | (0.26 | ) | | | 0.00 | | | | (0.26 | ) | | | 14.35 | | | | 15.19 | 3 | | | 1.32 | | | | 1.05 | | | | 1.62 | | | | 13.8 | | | | 109.95 | |
| | | | | | | | | | | | | | |
2022 | | | 17.90 | | | | 0.17 | | | | (5.10 | ) | | | (4.93 | ) | | | (0.17 | ) | | | (0.09 | ) | | | (0.26 | ) | | | 12.71 | | | | (27.61 | )3 | | | 1.32 | 4 | | | 1.05 | 4 | | | 1.13 | | | | 13.3 | | | | 185.25 | 5 |
| | | | | | | | | | | | | | |
2021 | | | 14.08 | | | | 0.15 | | | | 3.93 | | | | 4.08 | | | | (0.19 | ) | | | (0.07 | ) | | | (0.26 | ) | | | 17.90 | | | | 29.08 | 3 | | | 1.42 | 4 | | | 1.05 | 4 | | | 0.94 | | | | 17.9 | | | | 96.59 | |
| | | | | | | | | | | | | | |
2020 | | | 11.65 | | | | 0.11 | | | | 2.43 | | | | 2.54 | | | | (0.11 | ) | | | 0.00 | | | | (0.11 | ) | | | 14.08 | | | | 22.02 | 3 | | | 4.40 | | | | 1.05 | | | | 0.91 | | | | 2.9 | | | | 41.75 | |
| | | | | | | | | | | | | | |
2019 | | | 8.63 | | | | 0.13 | | | | 3.02 | | | | 3.15 | | | | (0.13 | ) | | | 0.00 | | | | (0.13 | ) | | | 11.65 | | | | 36.67 | 3 | | | 6.87 | | | | 1.05 | | | | 1.20 | | | | 1.4 | | | | 52.50 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 12.85 | | | | 0.27 | | | | 1.69 | | | | 1.96 | | | | (0.28 | ) | | | 0.00 | | | | (0.28 | ) | | | 14.53 | | | | 15.51 | 3 | | | 0.96 | | | | 0.80 | | | | 2.00 | | | | 132.7 | | | | 109.95 | |
| | | | | | | | | | | | | | |
2022 | | | 18.05 | | | | 0.20 | | | | (5.14 | ) | | | (4.94 | ) | | | (0.17 | ) | | | (0.09 | ) | | | (0.26 | ) | | | 12.85 | | | | (27.43 | )3 | | | 0.96 | 4 | | | 0.80 | 4 | | | 1.31 | | | | 63.4 | | | | 185.25 | 5 |
| | | | | | | | | | | | | | |
2021 | | | 14.15 | | | | 0.18 | | | | 3.98 | | | | 4.16 | | | | (0.19 | ) | | | (0.07 | ) | | | (0.26 | ) | | | 18.05 | | | | 29.51 | 3 | | | 1.08 | 4 | | | 0.80 | 4 | | | 1.11 | | | | 113.7 | | | | 96.59 | |
| | | | | | | | | | | | | | |
2020 | | | 11.68 | | | | 0.37 | | | | 2.21 | | | | 2.58 | | | | (0.11 | ) | | | 0.00 | | | | (0.11 | ) | | | 14.15 | | | | 22.30 | 3 | | | 3.45 | | | | 0.80 | | | | 3.00 | | | | 43.6 | | | | 41.75 | |
| | | | | | | | | | | | | | |
2019 | | | 8.66 | | | | 0.14 | | | | 3.01 | | | | 3.15 | | | | (0.13 | ) | | | 0.00 | | | | (0.13 | ) | | | 11.68 | | | | 36.54 | 3 | | | 5.63 | | | | 0.80 | | | | 1.37 | | | | 2.7 | | | | 52.50 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 12.84 | | | | 0.28 | | | | 1.67 | | | | 1.95 | | | | (0.28 | ) | | | 0.00 | | | | (0.28 | ) | | | 14.51 | | | | 15.44 | 3 | | | 0.97 | | | | 0.80 | | | | 2.12 | | | | 1.6 | | | | 109.95 | |
| | | | | | | | | | | | | | |
2022 | | | 18.03 | | | | 0.21 | | | | (5.14 | ) | | | (4.93 | ) | | | (0.17 | ) | | | (0.09 | ) | | | (0.26 | ) | | | 12.84 | | | | (27.41 | )3 | | | 0.97 | 4 | | | 0.80 | 4 | | | 1.38 | | | | 0.6 | | | | 185.25 | 5 |
| | | | | | | | | | | | | | |
2021 | | | 14.14 | | | | 0.16 | | | | 3.99 | | | | 4.15 | | | | (0.19 | ) | | | (0.07 | ) | | | (0.26 | ) | | | 18.03 | | | | 29.46 | 3 | | | 1.08 | 4 | | | 0.80 | 4 | | | 1.01 | | | | 0.9 | | | | 96.59 | |
| | | | | | | | | | | | | | |
2020 | | | 11.67 | | | | 0.11 | | | | 2.47 | | | | 2.58 | | | | (0.11 | ) | | | 0.00 | | | | (0.11 | ) | | | 14.14 | | | | 22.32 | 3 | | | 3.47 | | | | 0.80 | | | | 1.06 | | | | 0.6 | | | | 41.75 | |
| | | | | | | | | | | | | | |
2019 | | | 8.66 | | | | 0.14 | | | | 3.00 | | | | 3.14 | | | | (0.13 | ) | | | 0.00 | | | | (0.13 | ) | | | 11.67 | | | | 36.42 | 3 | | | 5.27 | | | | 0.80 | | | | 1.36 | | | | 0.4 | | | | 52.50 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| 4 | Includes interest expense of less than 0.01%. |
| 5 | Increased market volatility and large net capital stock outflows caused an increase in the Fund’s portfolio turnover rate in 2022 beyond historical levels. |
| | |
| 76 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
FINANCIAL HIGHLIGHTS (Continued)
BARON HEALTH CARE FUND
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 17.69 | | | | (0.04 | ) | | | 1.13 | | | | 1.09 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 18.78 | | | | 6.16 | 3 | | | 1.20 | | | | 1.10 | | | | (0.22 | ) | | | 49.8 | | | | 51.83 | |
| | | | | | | | | | | | | | |
2022 | | | 21.34 | | | | (0.06 | ) | | | (3.59 | ) | | | (3.65 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 17.69 | | | | (17.10 | )3 | | | 1.21 | | | | 1.10 | | | | (0.31 | ) | | | 55.0 | | | | 71.55 | |
| | | | | | | | | | | | | | |
2021 | | | 18.75 | | | | (0.17 | ) | | | 3.06 | | | | 2.89 | | | | 0.00 | | | | (0.30 | ) | | | (0.30 | ) | | | 21.34 | | | | 15.46 | 3 | | | 1.17 | | | | 1.10 | | | | (0.82 | ) | | | 76.3 | | | | 55.38 | |
| | | | | | | | | | | | | | |
2020 | | | 12.86 | | | | (0.09 | ) | | | 6.17 | | | | 6.08 | | | | 0.00 | | | | (0.19 | ) | | | (0.19 | ) | | | 18.75 | | | | 47.40 | 3 | | | 1.73 | | | | 1.10 | | | | (0.60 | ) | | | 26.8 | | | | 35.84 | |
| | | | | | | | | | | | | | |
2019 | | | 9.51 | | | | (0.06 | ) | | | 3.41 | | | | 3.35 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 12.86 | | | | 35.23 | 3 | | | 2.80 | | | | 1.10 | | | | (0.54 | ) | | | 5.0 | | | | 68.10 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 17.91 | | | | 0.01 | | | | 1.13 | | | | 1.14 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 19.05 | | | | 6.37 | 3 | | | 0.88 | | | | 0.85 | | | | 0.03 | | | | 154.7 | | | | 51.83 | |
| | | | | | | | | | | | | | |
2022 | | | 21.54 | | | | (0.01 | ) | | | (3.62 | ) | | | (3.63 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 17.91 | | | | (16.85 | )3 | | | 0.90 | | | | 0.85 | | | | (0.05 | ) | | | 149.3 | | | | 71.55 | |
| | | | | | | | | | | | | | |
2021 | | | 18.88 | | | | (0.12 | ) | | | 3.08 | | | | 2.96 | | | | 0.00 | | | | (0.30 | ) | | | (0.30 | ) | | | 21.54 | | | | 15.72 | 3 | | | 0.89 | | | | 0.85 | | | | (0.57 | ) | | | 172.4 | | | | 55.38 | |
| | | | | | | | | | | | | | |
2020 | | | 12.92 | | | | (0.05 | ) | | | 6.20 | | | | 6.15 | | | | 0.00 | | | | (0.19 | ) | | | (0.19 | ) | | | 18.88 | | | | 47.72 | 3 | | | 1.45 | | | | 0.85 | | | | (0.31 | ) | | | 38.6 | | | | 35.84 | |
| | | | | | | | | | | | | | |
2019 | | | 9.53 | | | | (0.03 | ) | | | 3.42 | | | | 3.39 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 12.92 | | | | 35.57 | 3 | | | 2.39 | | | | 0.85 | | | | (0.28 | ) | | | 9.1 | | | | 68.10 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 17.90 | | | | 0.01 | | | | 1.14 | | | | 1.15 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 19.05 | | | | 6.42 | 3 | | | 0.88 | | | | 0.85 | | | | 0.03 | | | | 5.9 | | | | 51.83 | |
| | | | | | | | | | | | | | |
2022 | | | 21.54 | | | | (0.01 | ) | | | (3.63 | ) | | | (3.64 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 17.90 | | | | (16.90 | )3 | | | 0.89 | | | | 0.85 | | | | (0.05 | ) | | | 5.7 | | | | 71.55 | |
| | | | | | | | | | | | | | |
2021 | | | 18.87 | | | | (0.12 | ) | | | 3.09 | | | | 2.97 | | | | 0.00 | | | | (0.30 | ) | | | (0.30 | ) | | | 21.54 | | | | 15.79 | 3 | | | 0.89 | | | | 0.85 | | | | (0.57 | ) | | | 6.5 | | | | 55.38 | |
| | | | | | | | | | | | | | |
2020 | | | 12.91 | | | | (0.04 | ) | | | 6.19 | | | | 6.15 | | | | 0.00 | | | | (0.19 | ) | | | (0.19 | ) | | | 18.87 | | | | 47.76 | 3 | | | 1.44 | | | | 0.85 | | | | (0.25 | ) | | | 4.9 | | | | 35.84 | |
| | | | | | | | | | | | | | |
2019 | | | 9.52 | | | | (0.03 | ) | | | 3.42 | | | | 3.39 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 12.91 | | | | 35.61 | 3 | | | 2.22 | | | | 0.85 | | | | (0.28 | ) | | | 1.3 | | | | 68.10 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| | |
| See Notes to Financial Statements. | | 77 |
| | |
| Baron Select Funds | | December 31, 2023 |
FINANCIAL HIGHLIGHTS (Continued)
BARON FINTECH FUND
Selected data for a share outstanding throughout each of the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
| | | | | |
RETAIL SHARES | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
2023 | | | 11.09 | | | | (0.04 | ) | | | 3.03 | | | | 2.99 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 14.08 | | | | 26.96 | 3 | | | 1.66 | | | | 1.20 | | | | (0.36 | ) | | | 7.3 | | | | 16.31 | |
| | | | | | | | | | | | | | |
2022 | | | 16.90 | | | | (0.07 | ) | | | (5.59 | ) | | | (5.66 | ) | | | 0.00 | | | | (0.15 | ) | | | (0.15 | ) | | | 11.09 | | | | (33.46 | )3 | | | 1.63 | 4 | | | 1.20 | 4 | | | (0.56 | ) | | | 7.0 | | | | 27.08 | |
| | | | | | | | | | | | | | |
2021 | | | 14.69 | | | | (0.14 | ) | | | 2.35 | | | | 2.21 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 16.90 | | | | 15.04 | 3 | | | 1.57 | | | | 1.20 | | | | (0.85 | ) | | | 13.2 | | | | 11.88 | |
| | | | | | | | | | | | | | |
2020 5 | | | 10.00 | | | | (0.09 | ) | | | 4.78 | | | | 4.69 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 14.69 | | | | 46.90 | 3 | | | 3.09 | | | | 1.20 | | | | (0.77 | ) | | | 6.4 | | | | 8.12 | |
| | | | | |
INSTITUTIONAL SHARES | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
2023 | | | 11.17 | | | | (0.01 | ) | | | 3.06 | | | | 3.05 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 14.22 | | | | 27.31 | 3 | | | 1.21 | | | | 0.95 | | | | (0.11 | ) | | | 42.1 | | | | 16.31 | |
| | | | | | | | | | | | | | |
2022 | | | 16.98 | | | | (0.04 | ) | | | (5.62 | ) | | | (5.66 | ) | | | 0.00 | | | | (0.15 | ) | | | (0.15 | ) | | | 11.17 | | | | (33.30 | )3 | | | 1.20 | 4 | | | 0.95 | 4 | | | (0.30 | ) | | | 31.1 | | | | 27.08 | |
| | | | | | | | | | | | | | |
2021 | | | 14.72 | | | | (0.10 | ) | | | 2.36 | | | | 2.26 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 16.98 | | | | 15.35 | 3 | | | 1.18 | | | | 0.95 | | | | (0.60 | ) | | | 58.5 | | | | 11.88 | |
| | | | | | | | | | | | | | |
20205 | | | 10.00 | | | | (0.07 | ) | | | 4.79 | | | | 4.72 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 14.72 | | | | 47.20 | 3 | | | 2.43 | | | | 0.95 | | | | (0.54 | ) | | | 24.0 | | | | 8.12 | |
| | | | | |
R6 SHARES | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
2023 | | | 11.17 | | | | (0.01 | ) | | | 3.06 | | | | 3.05 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 14.22 | | | | 27.31 | 3 | | | 1.18 | | | | 0.95 | | | | (0.12 | ) | | | 10.2 | | | | 16.31 | |
| | | | | | | | | | | | | | |
2022 | | | 16.98 | | | | (0.04 | ) | | | (5.62 | ) | | | (5.66 | ) | | | 0.00 | | | | (0.15 | ) | | | (0.15 | ) | | | 11.17 | | | | (33.30 | )3 | | | 1.18 | 4 | | | 0.95 | 4 | | | (0.30 | ) | | | 4.5 | | | | 27.08 | |
| | | | | | | | | | | | | | |
2021 | | | 14.73 | | | | (0.10 | ) | | | 2.35 | | | | 2.25 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 16.98 | | | | 15.28 | 3 | | | 1.18 | | | | 0.95 | | | | (0.60 | ) | | | 6.6 | | | | 11.88 | |
| | | | | | | | | | | | | | |
20205 | | | 10.00 | | | | (0.06 | ) | | | 4.79 | | | | 4.73 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 14.73 | | | | 47.30 | 3 | | | 2.33 | | | | 0.95 | | | | (0.53 | ) | | | 3.7 | | | | 8.12 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| 4 | Includes interest expense of less than 0.01%. |
| 5 | For the period January 2, 2020 (commencement of operations) to December 31, 2020. |
| | |
| 78 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
FINANCIAL HIGHLIGHTS (Continued)
BARON NEW ASIA FUND
Selected data for a share outstanding throughout each of the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net
asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total
from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment
income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 7.40 | | | | (0.00 | ) | | | 0.41 | | | | 0.41 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 7.81 | | | | 5.54 | 3 | | | 7.37 | | | | 1.45 | | | | (0.05 | ) | | | 1.0 | | | | 47.66 | |
| | | | | | | | | | | | | | |
2022 | | | 10.17 | | | | (0.05 | ) | | | (2.72 | ) | | | (2.77 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 7.40 | | | | (27.24 | )3 | | | 8.96 | | | | 1.45 | | | | (0.58 | ) | | | 0.9 | | | | 56.48 | |
| | | | | | | | | | | | | | |
20218 | | | 10.00 | | | | (0.05 | ) | | | 0.22 | | | | 0.17 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 10.17 | | | | 1.70 | 3,4 | | | 10.06 | 5,6 | | | 1.45 | 5,6 | | | (1.25 | )6 | | | 1.3 | | | | 14.32 | 4 |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 7.43 | | | | 0.03 | | | | 0.40 | | | | 0.43 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 7.86 | | | | 5.79 | 3 | | | 6.93 | | | | 1.20 | | | | 0.35 | | | | 1.5 | | | | 47.66 | |
| | | | | | | | | | | | | | |
2022 | | | 10.17 | | | | (0.03 | ) | | | (2.71 | ) | | | (2.74 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 7.43 | | | | (26.94 | )3 | | | 7.22 | | | | 1.20 | | | | (0.33 | ) | | | 2.7 | | | | 56.48 | |
| | | | | | | | | | | | | | |
20218 | | | 10.00 | | | | (0.04 | ) | | | 0.21 | | | | 0.17 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 10.17 | | | | 1.70 | 3,4 | | | 8.59 | 5,6 | | | 1.20 | 5,6 | | | (1.00 | )6 | | | 3.2 | | | | 14.32 | 4 |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 7.44 | | | | 0.01 | | | | 0.41 | | | | 0.42 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 7.86 | | | | 5.65 | 3 | | | 6.21 | | | | 1.20 | | | | 0.07 | | | | 1.8 | | | | 47.66 | |
| | | | | | | | | | | | | | |
2022 | | | 10.17 | | | | (0.03 | ) | | | (2.70 | ) | | | (2.73 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 7.44 | | | | (26.84 | )3 | | | 7.95 | | | | 1.20 | | | | (0.42 | ) | | | 0.1 | | | | 56.48 | |
| | | | | | | | | | | | | | |
20218 | | | 10.00 | | | | (0.04 | ) | | | 0.21 | | | | 0.17 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 10.17 | | | | 1.70 | 3,4 | | | 8.10 | 5,6 | | | 1.20 | 5,6 | | | (0.99 | )6 | | | 0.0 | 7 | | | 14.32 | 4 |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| 5 | Certain fixed expenses incurred by the Fund were not annualized for the period ended December 31, 2021. |
| 7 | Amount represents less than $500,000. |
| 8 | For the period July 30, 2021 (commencement of operations) to December 31, 2021. |
| | |
| See Notes to Financial Statements. | | 79 |
| | |
| Baron Select Funds | | December 31, 2023 |
FINANCIAL HIGHLIGHTS (Continued)
BARON TECHNOLOGY FUND
Selected data for a share outstanding throughout each of the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental Data: | |
| | | | | | | | | | | | | | |
| | | Net
asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain
(loss)
($) | | | Total
from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses
(%) | | | Net
expenses
(%) | | | Net
investment income
(loss)
(%) | | | Net
assets (in
millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 5.56 | | | | (0.05 | ) | | | 3.52 | | | | 3.47 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 9.03 | | | | 62.41 | 3 | | | 4.58 | | | | 1.20 | | | | (0.72 | ) | | | 5.0 | | | | 27.21 | |
| | | | | | | | | | | | | | |
20224 | | | 10.00 | | | | (0.06 | ) | | | (4.38 | ) | | | (4.44 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 5.56 | | | | (44.40 | )3 | | | 6.86 | | | | 1.20 | | | | (0.81 | ) | | | 1.3 | | | | 19.13 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 5.57 | | | | (0.04 | ) | | | 3.57 | | | | 3.53 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 9.10 | | | | 63.38 | 3 | | | 5.04 | | | | 0.95 | | | | (0.48 | ) | | | 1.4 | | | | 27.21 | |
| | | | | | | | | | | | | | |
20224 | | | 10.00 | | | | (0.04 | ) | | | (4.39 | ) | | | (4.43 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 5.57 | | | | (44.30 | )3 | | | 6.42 | | | | 0.95 | | | | (0.55 | ) | | | 1.6 | | | | 19.13 | |
|
R6 SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 5.57 | | | | (0.04 | ) | | | 3.55 | | | | 3.51 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 9.08 | | | | 63.02 | 3 | | | 3.80 | | | | 0.95 | | | | (0.48 | ) | | | 2.6 | | | | 27.21 | |
| | | | | | | | | | | | | | |
20224 | | | 10.00 | | | | (0.03 | ) | | | (4.40 | ) | | | (4.43 | ) | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 5.57 | | | | (44.30 | )3 | | | 3.75 | | | | 0.95 | | | | (0.46 | ) | | | 0.4 | | | | 19.13 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| 4 | For the period January 3, 2022 (commencement of operations) to December 31, 2022. |
| | |
| 80 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron Select Funds |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of Baron Select Funds and Shareholders of Baron Partners Fund, Baron Focused Growth Fund, Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, Baron Global Advantage Fund, Baron Real Estate Income Fund, Baron Health Care Fund, Baron FinTech Fund, Baron New Asia Fund, and Baron Technology Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of each of the funds listed in the table below (eleven of the funds constituting Baron Select Funds, hereafter collectively referred to as the “Funds”) as of December 31, 2023, the related statements of operations, of changes in net assets and, for Baron Partners Fund, of cash flows, for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds listed in the table below as of December 31, 2023, the results of each of their operations, the changes in each of their net assets and, for Baron Partners Fund, its cash flows, for the periods indicated in the table below, and each of the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America.
| | |
Baron Partners Fund(1) | | Baron Real Estate Income Fund(2) |
Baron Focused Growth Fund(2) | | Baron Health Care Fund(2) |
Baron International Growth Fund(2) | | Baron FinTech Fund(2) |
Baron Real Estate Fund(2) | | Baron New Asia Fund(2) |
Baron Emerging Markets Fund(2) | | Baron Technology Fund(3) |
Baron Global Advantage Fund(2) | | |
| (1) | Statements of operations and cash flows for the year ended December 31, 2023 and statement of changes in net assets for the years ended December 31, 2023 and 2022 |
| (2) | Statement of operations for the year ended December 31, 2023 and statement of changes in net assets for the years ended December 31, 2023 and 2022 |
| (3) | Statement of operations for the year ended December 31, 2023, and statement of changes in net assets for the year ended December 31, 2023 and the period January 3, 2022 (commencement of operations) through December 31, 2022 |
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the custodian, transfer agent, portfolio companies and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
New York, New York
February 26, 2024
We have served as the auditor of one or more investment companies in the Baron group of funds since 1987.
81
| | |
| Baron Select Funds | | December 31, 2023 |
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
The Trust has adopted a liquidity risk management program (the LRMP) pursuant to the requirements of Rule 22e-4 under the 1940 Act, which requires registered open-end funds (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage fund liquidity risk. The rule is designed to promote effective liquidity risk management throughout the open-end fund industry, thereby reducing liquidity risk — i.e., the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
Pursuant to the requirements of Rule 22e-4, the LRMP is required to include policies and procedures reasonably designed to incorporate the following elements, and the LRMP complies with these requirements: (1) assessment, management and periodic review of liquidity risk; (2) classification of each Fund’s investments into one of the four liquidity categories in Rule 22e-4; (3) if the Fund does not primarily hold assets that are considered highly liquid investments (cash and other investments reasonably expected to be convertible into cash in current market conditions in three business days or less without the conversion into cash significantly changing the market value of the investment), determination of a “highly liquid investment minimum” (as defined in Rule 22e-4 and in the LRMP, the HLIM) and compliance with additional related requirements; (4) prohibition on the acquisition of any “illiquid investment” (as defined in Rule 22e-4) if immediately after the acquisition the Fund would have invested more than 15% of its net assets in illiquid investments; and (5) if the Funds reserve the right to engage in redemptions in-kind, establishment of policies and procedures regarding how and when the Funds will engage in such redemptions in-kind. There have been no material changes to the LRMP since it was initially approved by the Board.
The Board has approved the Adviser to administer the LRMP (the Program Administrator). The Program Administrator has delegated its responsibilities to a Liquidity Risk Management Committee (the LRM Committee), comprised of a cross-functional group of key representatives from various departments of the Program Administrator, including Operations; Accounting; Legal and Compliance; Trading; and Portfolio and Risk Analytics. In addition, the Trust has contracted with a third party liquidity assessment vendor to support the classification of Fund investments.
Pursuant to the requirements of Rule 22e-4, the Board must review, no less frequently than annually, a written report prepared by the Program Administrator that addresses the operation of the program and assesses its adequacy and effectiveness of implementation, including, if applicable, the operation of the HLIM, and any material changes to the program. The Board received a written report in May 2023 (the Annual Report).
The Annual Report states that the Adviser, as the Program Administrator, acting primarily through the LRM Committee, has assessed the operation of the LRMP and believes that the LRMP is adequate and effective in its implementation. The Program Administrator and the LRM Committee initially determined that each Fund primarily holds assets that are highly liquid investments, and the Annual Report states that this determination continues to be maintained so that no Fund needs to maintain a HLIM. In addition, the Annual Report states that, since the LRMP was implemented, no Fund has breached its limit on illiquid investments.
82
| | |
| December 31, 2023 | | Baron Select Funds |
TAX INFORMATION (Unaudited)
The federal tax status of distributions paid by the Funds during the year ended December 31, 2023 are listed below.
During the fiscal year ended December 31, 2023, the Funds’ distributions to shareholders included:
| | | | | | | | |
| | |
| Fund | | Ordinary
Income1,3 | | | Long-Term
Capital Gains2,3 | |
| | |
Baron Partners Fund | | $ | — | | | $ | — | |
| | |
Baron Focused Growth Fund | | | — | | | | — | |
| | |
Baron International Growth Fund | | | 2,770,604 | | | | — | |
| | |
Baron Real Estate Fund | | | 6,044,613 | | | | — | |
| | |
Baron Emerging Markets Fund | | | 30,922,677 | | | | — | |
| | |
Baron Global Advantage Fund | | | — | | | | — | |
| | |
Baron Real Estate Income Fund | | | 2,148,522 | | | | — | |
| | |
Baron Health Care Fund | | | — | | | | — | |
| | |
Baron FinTech Fund | | | — | | | | — | |
| | |
Baron New Asia Fund | | | — | | | | — | |
| | |
Baron Technology Fund | | | — | | | | — | |
| 1 | For tax purposes, short-term capital gains are considered ordinary income distributions. |
| 2 | Long-term capital gains are subject to a maximum allowable rate of 20% for individuals pursuant to the Tax Cuts and Jobs Act of 2017. |
| 3 | Under the Patient Protection and Affordable Care Act, higher income taxpayers must pay a 3.8% additional tax on net investment income. |
Of the total ordinary income distributions paid by Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, and Real Estate Income Fund, 100.00%, 100.00%, 100.00%, and 13.68%, respectively, is qualified dividend income subject to a reduced tax rate. Of the total ordinary income distributions paid by these Funds, 1.88%, 100.00%, 1.51%, and 5.45%, respectively, qualifies for the corporate dividends received deduction.
The information and distributions reported may differ from the information and distributions taxable to the shareholders for the calendar year ended December 31, 2023. The information necessary to complete your income tax return for the calendar year ended December 31, 2023 will be listed on the Form 1099-DIV, which was mailed to you in January/February 2024.
83
| | |
| Baron Select Funds | | December 31, 2023 |
FUND EXPENSES (Unaudited)
As a shareholder of the Funds, you incur ongoing expenses. Ongoing expenses include advisory fees, distribution and service (12b-1) fees and other Fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The information in the following table is based on an investment of $1,000 invested on July 1, 2023 and held for the six months ended December 31, 2023.
ACTUAL EXPENSES
The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading titled “Expenses Paid During the Period.”
BASED ON ACTUAL TOTAL RETURN FOR THE SIX MONTHS ENDED DECEMBER 31, 20231
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Actual Total Return | | | Beginning Account Value July 1, 2023 | | | Ending Account Value December 31, 2023 | | | Annualized Expense Ratio | | | Expenses Paid During the Period2 | |
Baron Partners Fund — Retail Shares | | | 0.49 | % | | $ | 1,000.00 | | | $ | 1,004.90 | | | | 2.20 | %3 | | $ | 11.12 | |
Baron Partners Fund — Institutional Shares | | | 0.62 | % | | $ | 1,000.00 | | | $ | 1,006.20 | | | | 1.95 | %3 | | $ | 9.86 | |
Baron Partners Fund — R6 Shares | | | 0.61 | % | | $ | 1,000.00 | | | $ | 1.006.10 | | | | 1.95 | %3 | | $ | 9.86 | |
Baron Focused Growth Fund — Retail Shares | | | 3.79 | % | | $ | 1,000.00 | | | $ | 1,037.90 | | | | 1.32 | % | | $ | 6.78 | |
Baron Focused Growth Fund — Institutional Shares | | | 3.93 | % | | $ | 1,000.00 | | | $ | 1,039.30 | | | | 1.06 | % | | $ | 5.45 | |
Baron Focused Growth Fund — R6 Shares | | | 3.93 | % | | $ | 1,000.00 | | | $ | 1,039.30 | | | | 1.06 | % | | $ | 5.45 | |
Baron International Growth Fund — Retail Shares | | | 0.13 | % | | $ | 1,000.00 | | | $ | 1,001.30 | 4 | | | 1.20 | %5 | | $ | 6.05 | |
Baron International Growth Fund — Institutional Shares | | | 0.26 | % | | $ | 1,000.00 | | | $ | 1,002.60 | 4 | | | 0.95 | %5 | | $ | 4.80 | |
Baron International Growth Fund — R6 Shares | | | 0.26 | % | | $ | 1,000.00 | | | $ | 1,002.60 | 4 | | | 0.95 | %5 | | $ | 4.80 | |
Baron Real Estate Fund — Retail Shares | | | 8.57 | % | | $ | 1,000.00 | | | $ | 1,085.70 | | | | 1.31 | % | | $ | 6.89 | |
Baron Real Estate Fund — Institutional Shares | | | 8.73 | % | | $ | 1,000.00 | | | $ | 1,087.30 | | | | 1.06 | % | | $ | 5.58 | |
Baron Real Estate Fund — R6 Shares | | | 8.73 | % | | $ | 1.000.00 | | | $ | 1,087.30 | | | | 1.06 | % | | $ | 5.58 | |
Baron Emerging Markets Fund — Retail Shares | | | 1.45 | % | | $ | 1,000.00 | | | $ | 1,014.50 | | | | 1.36 | % | | $ | 6.91 | |
Baron Emerging Markets Fund — Institutional Shares | | | 1.59 | % | | $ | 1,000.00 | | | $ | 1,015.90 | | | | 1.10 | % | | $ | 5.59 | |
Baron Emerging Markets Fund — R6 Shares | | | 1.58 | % | | $ | 1,000.00 | | | $ | 1,015.80 | | | | 1.11 | % | | $ | 5.64 | |
Baron Global Advantage Fund — Retail Shares | | | 7.72 | % | | $ | 1,000.00 | | | $ | 1,077.20 | 4 | | | 1.17 | %5,6 | | $ | 6.13 | |
Baron Global Advantage Fund — Institutional Shares | | | 7.84 | % | | $ | 1,000.00 | | | $ | 1,078.40 | 4 | | | 0.92 | %5,6 | | $ | 4.82 | |
Baron Global Advantage Fund — R6 Shares | | | 7.84 | % | | $ | 1,000.00 | | | $ | 1,078.40 | 4 | | | 0.92 | %5,6 | | $ | 4.82 | |
Baron Real Estate Income Fund — Retail Shares | | | 6.64 | % | | $ | 1,000.00 | | | $ | 1,066.40 | 4 | | | 1.05 | %5 | | $ | 5.47 | |
Baron Real Estate Income Fund — Institutional Shares | | | 6.77 | % | | $ | 1,000.00 | | | $ | 1,067.70 | 4 | | | 0.80 | %5 | | $ | 4.17 | |
Baron Real Estate Income Fund — R6 Shares | | | 6.78 | % | | $ | 1,000.00 | | | $ | 1,067.80 | 4 | | | 0.80 | %5 | | $ | 4.17 | |
Baron Health Care Fund — Retail Shares | | | 1.02 | % | | $ | 1,000.00 | | | $ | 1,010.20 | 4 | | | 1.10 | %5 | | $ | 5.57 | |
Baron Health Care Fund — Institutional Shares | | | 1.17 | % | | $ | 1,000.00 | | | $ | 1,011.70 | 4 | | | 0.85 | %5 | | $ | 4.31 | |
Baron Health Care Fund — R6 Shares | | | 1.17 | % | | $ | 1,000.00 | | | $ | 1,011.70 | 4 | | | 0.85 | %5 | | $ | 4.31 | |
Baron FinTech Fund — Retail Shares | | | 15.13 | % | | $ | 1,000.00 | | | $ | 1,151.30 | 4 | | | 1.20 | %5 | | $ | 6.51 | |
Baron FinTech Fund — Institutional Shares | | | 15.33 | % | | $ | 1,000.00 | | | $ | 1,153.30 | 4 | | | 0.95 | %5 | | $ | 5.16 | |
Baron FinTech Fund — R6 Shares | | | 15.33 | % | | $ | 1,000.00 | | | $ | 1,153.30 | 4 | | | 0.95 | %5 | | $ | 5.16 | |
Baron New Asia Fund — Retail Shares | | | 0,51 | % | | $ | 1,000.00 | | | $ | 1,005.10 | 4 | | | 1.45 | %5 | | $ | 7.33 | |
Baron New Asia Fund — Institutional Shares | | | 0.77 | % | | $ | 1,000.00 | | | $ | 1,007.70 | 4 | | | 1.20 | %5 | | $ | 6.07 | |
Baron New Asia Fund — R6 Shares | | | 0.64 | % | | $ | 1,000.00 | | | $ | 1,006.40 | 4 | | | 1.20 | %5 | | $ | 6.07 | |
Baron Technology Fund — Retail Shares | | | 14.02 | % | | $ | 1,000.00 | | | $ | 1,140.20 | 4 | | | 1.20 | %5 | | $ | 6.47 | |
Baron Technology Fund — Institutional Shares | | | 14.32 | % | | $ | 1,000.00 | | | $ | 1,143.20 | 4 | | | 0.95 | %5 | | $ | 5.13 | |
Baron Technology Fund — R6 Shares | | | 14.21 | % | | $ | 1,000.00 | | | $ | 1,142.10 | 4 | | | 0.95 | %5 | | $ | 5.13 | |
| 1 | Assumes reinvestment of all dividends and capital gain distributions, if any. |
| 2 | Expenses are equal to each share class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
| 3 | Annualized expense ratio for Baron Partners Fund for the six months ended December 31, 2023, includes 1.29%, 1.04% and 1.04% for net operating expenses and 0.91%, 0.91% and 0.91% for interest expense for the Retail, Institutional and R6 Shares, respectively. |
| 4 | Ending account value assumes the return earned after waiver and would have been lower if a portion of the expenses had not been waived. |
| 5 | Annualized expense ratios are adjusted to reflect fee waiver. |
| 6 | Annualized expense ratio for Baron Global Advantage Fund for the six months ended December 31, 2023, was 1.16%, 0.91%, and 0.91% for net operating expenses, including 0.01%, 0.01%, and 0.01% of interest expense for the Retail, Institutional, and R6 Shares, respectively. |
84
| | |
| December 31, 2023 | | Baron Select Funds |
FUND EXPENSES (Unaudited) (Continued)
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account values and expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Funds and other funds. To do so, compare the 5% hypothetical example relating to the Funds with the 5% hypothetical examples that appear in the shareholder reports of other funds.
BASED ON HYPOTHETICAL TOTAL RETURN FOR THE SIX MONTHS ENDED DECEMBER 31, 2023
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Hypothetical Annualized Total Return | | | Beginning Account Value July 1, 2023 | | | Ending Account Value December 31, 2023 | | | Annualized Expense Ratio | | | Expenses Paid During the Period2 | |
Baron Partners Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,014.12 | | | | 2.20 | %3 | | $ | 11.17 | |
Baron Partners Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,015.38 | | | | 1.95 | %3 | | $ | 9.91 | |
Baron Partners Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,015.38 | | | | 1.95 | %3 | | $ | 9.91 | |
Baron Focused Growth Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,018.55 | | | | 1.32 | % | | $ | 6.72 | |
Baron Focused Growth Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.86 | | | | 1.06 | % | | $ | 5.40 | |
Baron Focused Growth Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.86 | | | | 1.06 | % | | $ | 5.40 | |
Baron International Growth Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.16 | 4 | | | 1.20 | %5 | | $ | 6.11 | |
Baron International Growth Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.42 | 4 | | | 0.95 | %5 | | $ | 4.84 | |
Baron International Growth Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.42 | 4 | | | 0.95 | %5 | | $ | 4.84 | |
Baron Real Estate Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,018.60 | | | | 1.31 | % | | $ | 6.67 | |
Baron Real Estate Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.86 | | | | 1.06 | % | | $ | 5.40 | |
Baron Real Estate Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.86 | | | | 1.06 | % | | $ | 5.40 | |
Baron Emerging Markets Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,018.35 | | | | 1.36 | % | | $ | 6.92 | |
Baron Emerging Markets Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.66 | | | | 1.10 | % | | $ | 5.60 | |
Baron Emerging Markets Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.61 | | | | 1.11 | % | | $ | 5.65 | |
Baron Global Advantage Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.31 | 4 | | | 1.17 | %5,6 | | $ | 5.96 | |
Baron Global Advantage Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.57 | 4 | | | 0.92 | %5,6 | | $ | 4.69 | |
Baron Global Advantage Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.57 | 4 | | | 0.92 | %5,6 | | $ | 4.69 | |
Baron Real Estate Income Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.91 | 4 | | | 1.05 | %5 | | $ | 5.35 | |
Baron Real Estate Income Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,021.17 | 4 | | | 0.80 | %5 | | $ | 4.08 | |
Baron Real Estate Income Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,021.17 | 4 | | | 0.80 | %5 | | $ | 4.08 | |
Baron Health Care Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.66 | 4 | | | 1.10 | %5 | | $ | 5.60 | |
Baron Health Care Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.92 | 4 | | | 0.85 | %5 | | $ | 4.33 | |
Baron Health Care Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.92 | 4 | | | 0.85 | %5 | | $ | 4.33 | |
Baron FinTech Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.16 | 4 | | | 1.20 | %5 | | $ | 6.11 | |
Baron FinTech Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.42 | 4 | | | 0.95 | %5 | | $ | 4.84 | |
Baron FinTech Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.42 | 4 | | | 0.95 | %5 | | $ | 4.84 | |
Baron New Asia Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,017.90 | 4 | | | 1.45 | %5 | | $ | 7.37 | |
Baron New Asia Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.16 | 4 | | | 1.20 | %5 | | $ | 6.11 | |
Baron New Asia Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.16 | 4 | | | 1.20 | %5 | | $ | 6.11 | |
Baron Technology Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,019.16 | 4 | | | 1.20 | %5 | | $ | 6.11 | |
Baron Technology Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.42 | 4 | | | 0.95 | %5 | | $ | 4.84 | |
Baron Technology Fund — R6 Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,020.42 | 4 | | | 0.95 | %5 | | $ | 4.84 | |
| 1 | Assumes reinvestment of all dividends and capital gain distributions, if any. |
| 2 | Expenses are equal to each share class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
| 3 | Annualized expense ratio for Baron Partners Fund for the six months ended December 31, 2023, includes 1.29%, 1.04% and 1.04% for net operating expenses and 0.91%, 0.91% and 0.91% for interest expense for the Retail, Institutional and R6 Shares, respectively. |
| 4 | Ending account value assumes the return earned after waiver and would have been lower if a portion of the expenses had not been waived. |
| 5 | Annualized expense ratios are adjusted to reflect fee waiver. |
| 6 | Annualized expense ratio for Baron Global Advantage Fund for the six months ended December 31, 2023, was 1.16%, 0.91%, and 0.91% for net operating expenses, including 0.01%, 0.01%, and 0.01% of interest expense for the Retail, Institutional, and R6 Shares, respectively. |
85
| | |
| Baron Select Funds | | December 31, 2023 |
MANAGEMENT OF THE FUNDS (Unaudited)
Board of Trustees and Officers.
Trustees of the Trust, together with information as to their positions with the Trust, principal occupations and other board memberships and affiliations for the past five years, are shown below. Each Trustee serves as Trustee of a Fund until its termination; until the Trustee’s retirement, resignation or death; or as otherwise specified in the Trust’s organizational documents. All Trustees listed below, whether Interested or Independent, serve as Trustees for the Trust. Additional information about the Trustees and Officers of the Trust can be found in the Trust’s Statement of Additional Information (the SAI) which may be obtained without charge by writing or calling 1-800-99BARON. The SAI is also available on the Baron Funds® website, BaronFunds.com.
| | | | | | | | | | |
| | | | | |
Name (Year of Birth) &
Address(1) | | Position(s) Held
With the Funds | | Term of
Office and
Length of
Time Served | | Principal Occupation(s)
During the Past Five Years | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | Other
Directorships
Held by Trustee |
Interested Trustees | | | | | | | | | | |
| | | | | |
Ronald Baron (1943)(2),(3) | | Chief Executive Officer, Trustee and Portfolio Manager | | 20 years | | Director, Chairman and CEO: the Firm* (1982-Present); CEO, Trustee and Portfolio Manager: Baron Investment Funds Trust (1987-Present); CEO, Trustee and Portfolio Manager: Baron Select Funds (2003-Present); Portfolio Manager: Baron USA Partners Fund Ltd. (1994-Present). | | 19 | | None |
| | | | | |
Linda S. Martinson (1955)(2),(3) | | Chairman, President, Chief Operating Officer and Trustee | | 20 years | | Director: the Firm* (2003-Present); President: the Firm* (2007-Present); Chief Operating Officer: the Firm* (2006-Present); Chairman (2010-Present), President (2007-Present), Chief Operating Officer (2006-Present), Trustee (1987-Present): Baron Investment Funds Trust; Chairman (2010-Present), President (2007-Present), Chief Operating Officer (2006-Present), Trustee (2003-Present): Baron Select Funds; Director: Baron USA Partners Fund Ltd. (2006-Present); Director: Baron Emerging Markets Fund Ltd. (2016-Present). | | 19 | | None |
| | | | | |
Peggy C. Wong (1961)(2),(3) | | Vice President, Chief Financial Officer and Trustee | | 20 years | | Trustee (2021-Present): Baron Investment Funds Trust and Baron Select Funds; Chief Financial Officer: the Firm* (1987-Present), Baron Investment Funds Trust (1987-Present), Baron Select Funds (2003-Present), Baron USA Partners Fund Ltd. (1994-Present), Baron Emerging Markets Fund Ltd. (2016-Present). | | 19 | | None |
Independent Trustees | | | | | | | | | | |
| | | | | |
Thomas J. Folliard (1965)(4),(5),(6) | | Trustee | | 6 years | | Non-Executive Chair of the Board: CarMax, Inc. (2016-Present); Trustee: Baron Investment Funds Trust (2017-Present), Baron Select Funds (2017-Present). | | 19 | | Director: PulteGroup, Inc. (2012-Present) |
| | | | | |
Abraham (Avi) Nachmany (1952)(5),(6) | | Trustee | | 4 years | | Independent mutual fund industry consultant (2016-Present); Advisory Board Member: Baron Investment Funds Trust and Baron Select Funds (2019-2020); Trustee: Baron Investment Funds Trust, Baron Select Funds (2020-Present) | | 19 | | None |
| | | | | |
Raymond Noveck (1943)(4),(5),(6) | | Lead Trustee | | 20 years | | Private Investor (1999-Present); Lead Trustee: Baron Investment Funds Trust (1987-Present), Baron Select Funds (2003-Present). | | 19 | | None |
86
| | |
| December 31, 2023 | | Baron Select Funds |
MANAGEMENT OF THE FUNDS (Unaudited) (Continued)
| | | | | | | | | | |
| | | | | |
Name (Year of Birth) &
Address(1) | | Position(s) Held
With the Funds | | Term of
Office and
Length of
Time Served | | Principal Occupation(s)
During the Past Five Years | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | Other
Directorships
Held by Trustee |
Independent Trustees (continued) | | | | | | |
| | | | | |
Anita James Rival (1964)(5),(6) | | Trustee | | 10 years | | Advisory Board Member: ValueAct Capital, LLC (2014-Present); Advisory Board Member: Impala Asset Management, LLC (2014-2022); Trustee: Baron Investment Funds Trust, Baron Select Funds (2013-Present). | | 19 | | Director: Golub Capital BDC, Inc. (2011-Present); Director: Golub Capital BDC 3, Inc. (2017-Present); Director: Golub Capital BDC 4, Inc. (2021-Present); Director: Golub Capital Direct Lending Corporation (2020-Present); Golub Capital Direct Lending Unlevered Corporation (2021-Present); Golub Capital Private Credit Fund (2023-Present) |
| | | | | |
David A. Silverman, MD (1950)(5),(6) | | Trustee | | 20 years | | Physician and Faculty: New York University School of Medicine (1976-Present); President: Harley Street Medical (2021-Present); Trustee: Baron Investment Funds Trust (1987-Present), Baron Select Funds (2003-Present). | | 19 | | None |
| | | | | |
Marvelle Sullivan (1979)(5),(6) | | Trustee | | 3 years | | Founder and CEO: Marvelle Co. LLC (2019-Present); Managing Director: J.P. Morgan (2017-2019); Advisory Board Member: Baron Investment Funds Trust and Baron Select Funds (2/2020-5/2020); Trustee: Baron Investment Funds Trust, Baron Select Funds (5/2020-Present). | | 19 | | None |
| | | | | |
Errol Taylor (1955)(5),(6) | | Trustee | | 3 years | | Partner: Milbank LLP (2003-2020); Trustee: Baron Investment Funds Trust, Baron Select Funds (2020-Present). | | 19 | | Trustee: New York Law School (2014-Present); Trustee: Clark Atlanta University (2017-Present) |
| | | | | |
Alejandro (Alex) Yemenidjian (1955)(4),(5),(6) | | Trustee | | 16 years | | Chairman and CEO: GAST Enterprises, Ltd. (investment company) (2005-Present); Manager: Armenco Capital LLC (investment company) (2013-Present); Trustee: Baron Investment Funds Trust (2006-Present), Baron Select Funds (2006-Present). | | 19 | | Director: Guess?, Inc. (2005-Present) |
Additional Officers of the Funds | | | | | | | | |
| | | | | |
Louis Beasley (1970) | | Vice President and Chief Compliance Officer | | 9 years | | Vice President and Chief Compliance Officer: Baron Capital Group, Inc., BAMCO, Inc., Baron Capital Management Inc., Baron Investment Funds Trust, Baron Select Funds, Baron USA Partners Fund Ltd. (2014-Present), Baron Emerging Markets Fund Ltd. (2016-Present); Vice President: the Firm* (2014-Present). | | N/A | | N/A |
| | | | | |
Clifford Greenberg (1959) | | Senior Vice President and Co-Chief Investment Officer | | 20 years | | Director, Senior Vice President and Co-Chief Investment Officer: the Firm* (2020-Present); Senior Vice President and Co-Chief Investment Officer: Baron Investment Funds Trust, Baron Select Funds (2020-Present); Portfolio Manager: Baron Small Cap Fund (1997-Present). | | N/A | | N/A |
| | | | | |
Patrick M. Patalino (1968) | | Vice President, Chief Legal Officer and Secretary | | 16 years | | Vice President, General Counsel and Secretary: the Firm* (2007-Present); Vice President, Chief Legal Officer and Secretary: Baron Investment Funds Trust, Baron Select Funds (2007-Present); General Counsel: Baron USA Partners Fund Ltd. (2007-Present), Baron Emerging Markets Fund Ltd. (2016-Present). | | N/A | | N/A |
87
| | |
| Baron Select Funds | | December 31, 2023 |
MANAGEMENT OF THE FUNDS (Unaudited) (Continued)
| | | | | | | | | | |
| | | | | |
Name (Year of Birth) &
Address(1) | | Position(s) Held
With the Funds | | Term of
Office and
Length of
Time Served | | Principal Occupation(s)
During the Past Five Years | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | Other
Directorships
Held by Trustee |
Additional Officers of the Funds (continued) | | | | | | |
| | | | | |
Andrew Peck (1969) | | Senior Vice President and Co-Chief Investment Officer | | 20 years | | Director, Senior Vice President and Co-Chief Investment Officer: the Firm* (2020-Present); Senior Vice President and Co-Chief Investment Officer: Baron Investment Funds Trust, Baron Select Funds (2020-Present); Portfolio Manager: Baron Asset Fund (2003-Present). | | N/A | | N/A |
| | | | | |
Christopher Snively (1984) | | Treasurer | | <1 year | | Vice President: the Firm* (2023-Present); Treasurer: Baron Investment Funds Trust, Baron Select Funds (2023-Present); Chief Financial Officer: The Lazard Funds, Inc., Lazard Retirement Series, Inc., Lazard Global Return and Income Fund, Inc. (2016-2023); Director: Lazard Asset Management LLC (2021-2023, previously Senior Vice President). | | N/A | | N/A |
| * | The “Firm” means Baron Capital Group, Inc. (BCG) along with its subsidiaries BCI, Baron Capital Management, Inc. (BCM) and BAMCO. |
| (1) | The address of each Trustee and Officer of the Funds is 767 Fifth Avenue, New York, NY 10153. |
| (2) | Trustees deemed to be “Interested Trustees” by reason of their employment with the Adviser and BCI. |
| (3) | Members of the Executive Committee, which is empowered to exercise all of the powers, including the power to declare dividends, of the full Board when the full Board is not in session. |
| (4) | Members of the Audit Committee. |
| (5) | Members of the Nominating Committee. |
| (6) | Members of the Independent Trustees Committee. |
88
Privacy Notice
The Fund collects nonpublic personal information about you from the following sources:
| ∎ | | Information we receive from you on applications or other forms; |
| ∎ | | Information about your transactions with us, our Adviser or others; and |
| ∎ | | Information we receive from third parties, such as credit reporting agencies. |
“Nonpublic personal information” is private information about you that we obtain in connection with providing a financial product or service to you.
We may share your name and address with other Baron Funds and the Adviser and its affiliates for the purpose of sending you information about our products that we believe may be of interest to you and informing you of our upcoming Baron Investment Conference and for sending required information.
We do not disclose any nonpublic personal information about our customers to anyone, except as permitted or required by law. Examples of permitted disclosures under the law include sharing with companies that work for us to provide you services, such as the Transfer Agent or mailing house. All such companies that act on our behalf are contractually obligated to keep the information that we provide to them confidential and to use the information only to provide the services that we have asked them to perform for you and us.
We restrict access to nonpublic information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic and procedural safeguards to guard your nonpublic personal information.
This privacy notice is also available at all times on the Baron Funds® website, www.BaronFunds.com or by calling 1-800-99BARON.
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767 Fifth Avenue, 49th Fl.
New York, NY 10153
1.800.99.BARON
212-583-2000
baronfunds.com
ANNUAL SELECT 12/31/2023
Baron Funds
Baron WealthBuilder Fund
Annual Financial Report
DEAR BARON WEALTHBUILDER FUND SHAREHOLDER:
In this report, you will find audited financial statements for Baron WealthBuilder Fund (the Fund) for the year ended December 31, 2023. The U.S. Securities and Exchange Commission (the SEC) requires mutual funds to furnish these statements semi-annually to their shareholders. We hope you find these statements informative and useful.
We thank you for choosing to join us as fellow shareholders in Baron Funds. We will continue to work hard to justify your confidence.
Sincerely,
| | | | |
 | |  | |  |
Ronald Baron Chief Executive Officer February 26, 2024 | | Linda S. Martinson Chairman, President and Chief Operating Officer February 26, 2024 | | Peggy Wong Chief Financial Officer February 26, 2024 |
This Annual Financial Report is for the Baron WealthBuilder Fund. If you are interested in the other series of Baron Select Funds, which contains the Baron Partners Fund, Baron Focused Growth Fund, Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, Baron Global Advantage Fund, Baron Real Estate Income Fund, Baron Health Care Fund, Baron FinTech Fund, Baron New Asia Fund, and Baron Technology Fund or Baron Investment Funds Trust, which contains the Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund, Baron Fifth Avenue Growth Fund, Baron Discovery Fund, and Baron Durable Advantage Fund, please visit the Funds’ website at baronfunds.com or contact us at 1-800-99BARON.
The Funds’ Proxy Voting Policy is available without charge and can be found on the Funds’ website at baronfunds.com, by clicking on the “Regulatory Documents” link at the bottom left corner of the homepage or by calling 1-800-99BARON and on the SEC’s website at sec.gov. The Funds’ most current proxy voting record, Form N-PX, is also available on the Funds’ website and on the SEC’s website.
The Funds file their complete Portfolios of Investments with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC’s website at sec.gov. Portfolio of Investments current to the most recent quarter are also available on the Funds’ website.
Some of the comments contained in this report are based on current management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. You can identify forward-looking statements by words such as “estimate,” “may,” “expect,” “should,” “could,” “believe,” “plan”, and other similar terms. We cannot promise future returns and our opinions are a reflection of our best judgment at the time this report is compiled.
The views expressed in this report reflect those of BAMCO, Inc. (BAMCO or the Adviser) only through the end of the period stated in this report. The views are not intended as recommendations or investment advice to any person reading this report and are subject to change at any time without notice based on market and other conditions.
Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. For more complete information about Baron Funds, including charges and expenses, call, write or go to baronfunds.com for a prospectus or summary prospectus. Read them carefully before you invest or send money. This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund, unless accompanied or preceded by the Fund’s current prospectus or summary prospectus.
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
Baron WealthBuilder Fund is an open end, no-load mutual fund that invests only in shares of individual Baron mutual funds (Baron Funds). Long-term capital appreciation is its objective. It is not a target date fund.
| | 1. | Baron WealthBuilder Fund’s objective is to provide investors with a diversified portfolio of Baron Funds that will outperform its benchmark index over the long term, although we cannot guarantee it will meet its objective. |
| | 2. | Baron WealthBuilder Fund’s minimum initial investment is $2,000, making it suitable for periodic purchases. |
| | 3. | Baron WealthBuilder Fund has no management fee, but it will indirectly bear its pro-rata share of the expenses of the Baron Funds in which it invests (acquired fund fees and expenses). |
| | 4. | Baron WealthBuilder Fund’s annual operating expenses are capped at 5 bps per year for TA Shares (available directly through Baron Funds) and Institutional Shares. Retail Shares annual operating expenses are capped at 30 bps per year. Portfolio transaction costs, interest, dividend, acquired fund fees and expenses, and extraordinary expenses are not subject to the operating expense limitation. |
Several criteria, including our qualitative assessments, are used to continually determine Baron WealthBuilder Fund allocations among Baron Funds.
Among the criteria are: (a) absolute performance; (b) excess performance vs. benchmark; (c) performance standard deviation (a measure of risk); (d) Sharpe ratio (a measure of performance per unit of risk); (e) beta (a measure of a fund’s sensitivity to market movements); (f) alpha (a measure of excess return given level of risk as measured by beta); (g) portfolio turnover; (h) growth rates of portfolio investments; (i) fund size; and (j) manager tenure.
As of December 31, 2023, the five largest Baron Funds represented 60.7% of Baron WealthBuilder Fund’s net assets.
Ronald Baron, CEO of Baron Capital is the lead portfolio manager of Baron WealthBuilder Fund. Michael Baron, Vice President, is the co-portfolio manager.
2
| | |
| December 31, 2023 (Unaudited) | | Baron WealthBuilder Fund |
COMPARISONOFTHECHANGEIN VALUEOF $10,000INVESTMENTIN BARON WEALTHBUILDER FUND (RETAIL SHARES)
INRELATIONTOTHE S&P 500 INDEXANDTHE MSCI ACWI INDEX
| | | | | | | | | | | | | | | | |
| AVERAGE ANNUAL TOTAL RETURNSFORTHEPERIODSENDED DECEMBER 31, 2023 | |
| | | One
Year | | | Three
Years | | | Five
Years | | | Since
Inception
(December 29,
2017) | |
Baron WealthBuilder Fund — Retail Shares1,2 | | | 25.36% | | | | (0.62)% | | | | 16.78% | | | | 12.52% | |
Baron WealthBuilder Fund — TA Shares1,2 | | | 25.66% | | | | (0.38)% | | | | 17.05% | | | | 12.77% | |
Baron WealthBuilder Fund — Institutional Shares1,2 | | | 25.73% | | | | (0.37)% | | | | 17.06% | | | | 12.78% | |
S&P 500 Index1 | | | 26.29% | | | | 10.00% | | | | 15.69% | | | | 12.07% | |
MSCI ACWI Index1 | | | 22.20% | | | | 5.75% | | | | 11.72% | | | | 7.88% | |
| 1 | The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. The MSCI ACWI Index Net (USD) measures the equity market performance of large and midcap securities across developed and emerging markets, including the United States. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. The indexes and the Fund are with dividends reinvested, net of foreign withholding taxes, as applicable, which positively impact the performance results. The indexes are unmanaged. The index performance is not fund performance; one cannot invest directly into an index. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser has agreed that, pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term, it will reimburse certain expenses of the Fund, limiting net annual operating expenses (portfolio transaction costs, interest, dividend, acquired fund fees and expenses and extraordinary expense are not subject to the operating expense limitation) to 0.05% of average daily net assets of TA shares, 0.30% of average daily net assets of Retail Shares, and 0.05% of average daily net assets of Institutional shares, without which performance would have been lower. |
3
| | |
| Baron WealthBuilder Fund (Unaudited) | | December 31, 2023 |
COUNTRY EXPOSURESOF BARON UNDERLYING FUNDSASOF DECEMBER 31, 2023
| | | | |
| | | Percent of
Net Assets* | |
United States | | | 87.6 | % |
United Kingdom | | | 1.4 | % |
India | | | 1.3 | % |
Canada | | | 1.3 | % |
Netherlands | | | 1.1 | % |
China | | | 0.9 | % |
Ireland | | | 0.8 | % |
Argentina | | | 0.7 | % |
Korea | | | 0.6 | % |
Other | | | 4.3 | % |
| |
| | | | 100.0 | % |
SECTOR EXPOSURESOF BARON UNDERLYING FUNDSASOF DECEMBER 31, 2023†*
(as a percentage of net assets)
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE
For the 12 months ended December 31, 2023, Baron WealthBuilder Fund1 increased 25.36%, underperforming the S&P 500 Index, which gained 26.29%.
Baron WealthBuilder Fund is a diversified fund that invests exclusively in other Baron mutual funds. At any given time, it invests in the securities of a select number of Baron mutual funds representing specific investment strategies. The Fund can invest in funds holding U.S. and international stocks; small-cap, small- to mid-cap, mid-cap, large-cap, all-cap stocks; and sector stocks. Baron WealthBuilder Fund normally invests in a variety of domestic and international equity funds. It seeks to invest in businesses it believes have significant opportunities for growth, durable competitive advantages, exceptional management, and an attractive valuation. Of course, there can be no assurance that we will be successful in achieving the Fund’s investment goals.
2023 came as a welcome relief to equity investors following a difficult 2022, with most major market indexes recapturing all their losses from the prior year. Brushing aside macro concerns including the U.S. Federal Reserve’s (the Fed) continuation of its historical tightening cycle, inflation data — although falling — that hovered above the Fed’s target, the recession debate, and geopolitical uncertainties, the markets rallied through the first half of 2023. After a third-quarter dip driven largely by concerns that rates would stay “higher for longer,” lower inflation data and a shift in focus to rate cuts prompted a bull run in the last two months of the year.
Consumer Discretionary, Information Technology, and Industrials contributed the most. There were no sectors that meaningfully detracted.
The U.S., Canada, and Argentina contributed the most. China detracted the most.
Baron Partners Fund, Baron Small Cap Fund, and Baron Asset Fund contributed the most. No Baron mutual fund detracted.
We invest for the long term in businesses that we believe will benefit from secular growth trends, durable competitive advantages, and best-in-class management. We remain optimistic that this approach will generate strong long-term performance regardless of the economic climate.
| * | Individual weights may not sum to 100% or displayed total due to rounding. |
| † | Sector levels are provided from the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been reclassified or classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
4
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
PORTFOLIO OF INVESTMENTS
| | | | | | | | | | | | |
| Shares | | | | | Cost | | | Value | |
| Affiliated Mutual Funds (100.01%) | |
|
| Small Cap Funds (32.18%) | |
| | 914,251 | | | Baron Discovery Fund — Institutional Shares | | $ | 23,178,115 | | | $ | 25,608,172 | |
| | 782,408 | | | Baron Growth Fund — Institutional Shares | | | 74,440,884 | | | | 79,085,859 | |
| | 2,187,911 | | | Baron Small Cap Fund — Institutional Shares | | | 72,660,781 | | | | 71,522,819 | |
| | | | | | | | | | | | |
| | Total Small Cap Funds | | | 170,279,780 | | | | 176,216,850 | |
| | | | | | | | | | | | |
|
| Small to Mid Cap Funds (6.28%) | |
| | 903,189 | | | Baron Focused Growth Fund — Institutional Shares | | | 29,605,351 | | | | 34,402,480 | |
| | | | | | | | | | | | |
|
| Mid Cap Funds (12.86%) | |
| | 677,289 | | | Baron Asset Fund — Institutional Shares | | | 65,517,702 | | | | 70,431,241 | |
| | | | | | | | | | | | |
|
| Large Cap Funds (7.45%) | |
| | 704,627 | | | Baron Durable Advantage Fund — Institutional Shares | | | 11,114,018 | | | | 15,896,384 | |
| | 574,033 | | | Baron Fifth Avenue Growth Fund — Institutional Shares | | | 20,513,764 | | | | 24,884,344 | |
| | | | | | | | | | | | |
| | Total Large Cap Funds | | | 31,627,782 | | | | 40,780,728 | |
| | | | | | | | | | | | |
|
| All Cap Funds (18.49%) | |
| | 645,766 | | | Baron Opportunity Fund — Institutional Shares | | | 16,329,290 | | | | 24,261,417 | |
| | 463,114 | | | Baron Partners Fund — Institutional Shares | | | 42,074,948 | | | | 76,974,292 | |
| | | | | | | | | | | | |
| | Total All Cap Funds | | | 58,404,238 | | | | 101,235,709 | |
| | | | | | | | | | | | |
|
| International Funds (9.16%) | |
| | 1,051,558 | | | Baron Emerging Markets Fund — Institutional Shares | | | 15,121,887 | | | | 14,742,838 | |
| | 613,451 | | | Baron Global Advantage Fund — Institutional Shares | | | 16,402,335 | | | | 19,317,565 | |
| | 618,874 | | | Baron International Growth Fund — Institutional Shares | | | 16,740,999 | | | | 16,078,360 | |
| | | | | | | | | | | | |
| | Total International Funds | | | 48,265,221 | | | | 50,138,763 | |
| | | | | | | | | | | | |
|
| Sector Funds (13.59%) | |
| | 1,003,942 | | | Baron FinTech Fund — Institutional Shares | | | 13,875,568 | | | | 14,276,057 | |
| | 793,632 | | | Baron Health Care Fund — Institutional Shares | | | 14,017,322 | | | | 15,118,679 | |
| | 927,553 | | | Baron Real Estate Fund — Institutional Shares | | | 31,191,013 | | | | 33,160,012 | |
| | 814,355 | | | Baron Real Estate Income Fund — Institutional Shares | | | 12,846,183 | | | | 11,832,569 | |
| | | | | | | | | | | | |
| | Total Sector Funds | | | 71,930,086 | | | | 74,387,317 | |
| | | | | | | | | | | | |
| | |
| | Total Affiliated Investments (100.01%) | | $ | 475,630,160 | | | | 547,593,088 | |
| | | | | | | | | | | | |
| | |
| | Liabilities Less Cash and Other Assets (-0.01%) | | | | | | | (74,619 | ) |
| | | | | | | | | | | | |
| | |
| | Net Assets | | | | | | $ | 547,518,469 | |
| | | | | | | | | | | | |
| % | Represents percentage of net assets. |
All Affiliated Mutual Funds are Level 1.
| | |
| See Notes to Financial Statements. | | 5 |
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
STATEMENT OF ASSETS AND LIABILITIES
| | | | |
Assets: | | | | |
Investments in Affiliated Mutual Funds, at value* | | $ | 547,593,088 | |
Receivable for capital shares sold | | | 569,925 | |
Receivable for securities sold | | | 121,400 | |
Prepaid expenses | | | 920 | |
| | | | |
| | | 548,285,333 | |
| | | | |
Liabilities: | | | | |
Due to custodian bank | | | 315,577 | |
Payable for capital shares redeemed | | | 380,421 | |
Distribution fees payable (Note 5) | | | 175 | |
Other accrued expenses and other payables | | | 70,691 | |
| | | | |
| | | 766,864 | |
| | | | |
Net Assets | | $ | 547,518,469 | |
| | | | |
Net Assets consist of: | | | | |
Paid-in capital | | $ | 510,582,556 | |
Distributable earnings/(losses) | | | 36,935,913 | |
| | | | |
Net Assets | | $ | 547,518,469 | |
| | | | |
Retail Shares: | | | | |
Net Assets | | $ | 94,952,073 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 5,395,462 | |
| | | | |
Net Asset Value Per Share | | $ | 17.60 | |
| | | | |
TA Shares: | | | | |
Net Assets | | $ | 49,505,559 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 2,774,010 | |
| | | | |
Net Asset Value Per Share | | $ | 17.85 | |
| | | | |
Institutional Shares: | | | | |
Net Assets | | $ | 403,060,837 | |
Shares Outstanding ($0.01 par value; indefinite shares authorized) | | | 22,573,342 | |
| | | | |
Net Asset Value Per Share | | $ | 17.86 | |
| | | | |
| |
*Investments in Affiliated Mutual Funds, at cost | | $ | 475,630,160 | |
| | | | |
| | |
| 6 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
STATEMENT OF OPERATIONS
| | | | |
| | | For The Year
Ended
December 31,
2023 | |
Investment income(loss): | | | | |
Income: | | | | |
Dividends from Affiliated Mutual Funds | | $ | 577,647 | |
| | | | |
Total income | | | 577,647 | |
| | | | |
Expenses: | | | | |
Distribution fees — Retail Shares (Note 5) | | | 217,397 | |
Shareholder servicing agent fees and expenses — Retail Shares | | | 5,671 | |
Shareholder servicing agent fees and expenses — TA Shares | | | 2,551 | |
Shareholder servicing agent fees and expenses — Institutional Shares | | | 23,433 | |
Reports to shareholders | | | 77,160 | |
Registration and filing fees | | | 73,190 | |
Custodian and fund accounting fees | | | 52,638 | |
Trustee fees and expenses (Note 5) | | | 26,689 | |
Administration fees | | | 44,229 | |
Insurance expense | | | 7,251 | |
Line of credit fees | | | 9,539 | |
Professional fees | | | 48,032 | |
Miscellaneous expenses | | | 2,458 | |
| | | | |
Total operating expenses | | | 590,238 | |
Expenses reimbursed — Retail Shares (Note 5) | | | (22,718 | ) |
Expenses reimbursed — TA Shares (Note 5) | | | (11,175 | ) |
Expenses reimbursed — Institutional Shares (Note 5) | | | (93,915 | ) |
| | | | |
Total net expenses | | | 462,430 | |
| | | | |
Net investment income (loss) | | | 115,217 | |
| | | | |
Realized and unrealized gain (loss) on investments: | | | | |
Net realized gain (loss) on Affiliated Mutual Funds | | | (7,179,719 | ) |
Capital gain distributions received from Affiliated Mutual Funds | | | 5,506,730 | |
Change in net unrealized appreciation (depreciation) of Affiliated Mutual Funds | | | 111,694,543 | |
| | | | |
Net gain (loss) on investments | | | 110,021,554 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | 110,136,771 | |
| | | | |
| | |
| See Notes to Financial Statements. | | 7 |
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| | | For the Year
Ended
December 31,
2023 | | | For the Year
Ended
December 31,
2022 | |
Increase (Decrease) in Net Assets: | | | | | | | | |
Operations: | | | | | | | | |
Net investment income (loss) | | $ | 115,217 | | | $ | (311,787 | ) |
Net realized gain (loss) | | | (1,672,989 | ) | | | (32,254,139 | ) |
Change in net unrealized appreciation (depreciation) | | | 111,694,543 | | | | (165,137,587 | ) |
| | | | | | | | |
Increase (decrease) in net assets resulting from operations | | | 110,136,771 | | | | (197,703,513 | ) |
| | | | | | | | |
Distributions to shareholders from (Note 8): | | | | | | | | |
Distributable earnings — Retail Shares | | | — | | | | (2,459,751 | ) |
Distributable earnings — TA Shares | | | (14,380 | ) | | | (1,168,124 | ) |
Distributable earnings — Institutional Shares | | | (119,687 | ) | | | (9,769,520 | ) |
| | | | | | | | |
Decrease in net assets from distributions to shareholders | | | (134,067 | ) | | | (13,397,395 | ) |
| | | | | | | | |
Capital share transactions: | | | | | | | | |
Proceeds from the sale of shares — Retail Shares | | | 21,626,006 | | | | 39,365,696 | |
Proceeds from the sale of shares — TA Shares | | | 5,477,405 | | | | 10,452,738 | |
Proceeds from the sale of shares — Institutional Shares | | | 50,611,997 | | | | 89,164,588 | |
Net asset value of shares issued in reinvestment of distributions — Retail Shares | | | — | | | | 2,423,777 | |
Net asset value of shares issues in reinvestment of distribution — TA Shares | | | 14,145 | | | | 1,152,024 | |
Net asset value of shares issued in reinvestment of distributions — Institutional Shares | | | 113,694 | | | | 9,411,127 | |
Cost of shares redeemed — Retail Shares | | | (21,734,046 | ) | | | (42,109,348 | ) |
Cost of shares redeemed — TA Shares | | | (3,879,233 | ) | | | (3,247,842 | ) |
Cost of shares redeemed — Institutional Shares | | | (41,154,632 | ) | | | (45,911,410 | ) |
| | | | | | | | |
Increase (decrease) in net assets derived from capital share transactions | | | 11,075,336 | | | | 60,701,350 | |
| | | | | | | | |
Net increase (decrease) in net assets | | | 121,078,040 | | | | (150,399,558 | ) |
| | | | | | | | |
Net Assets: | | | | | | | | |
Beginning of year | | | 426,440,429 | | | | 576,839,987 | |
| | | | | | | | |
End of year | | $ | 547,518,469 | | | $ | 426,440,429 | |
| | | | | | | | |
Capital share transactions — Retail Shares | | | | | | | | |
Shares sold | | | 1,353,390 | | | | 2,368,462 | |
Shares issued in reinvestment of distributions | | | — | | | | 173,872 | |
Shares redeemed | | | (1,372,977 | ) | | | (2,575,221 | ) |
| | | | | | | | |
Net increase (decrease) | | | (19,587 | ) | | | (32,887 | ) |
| | | | | | | | |
Capital share transactions — TA Shares | | | | | | | | |
Shares sold | | | 340,795 | | | | 623,662 | |
Shares issued in reinvestment of distributions | | | 890 | | | | 81,704 | |
Shares redeemed | | | (237,997 | ) | | | (203,700 | ) |
| | | | | | | | |
Net increase (decrease) | | | 103,688 | | | | 501,666 | |
| | | | | | | | |
Capital share transactions — Institutional Shares | | | | | | | | |
Shares sold | | | 3,140,359 | | | | 5,184,852 | |
Shares issued in reinvestment of dividends | | | 7,151 | | | | 666,983 | |
Shares redeemed | | | (2,557,664 | ) | | | (2,808,680 | ) |
| | | | | | | | |
Net increase (decrease) | | | 589,846 | | | | 3,043,155 | |
| | | | | | | | |
| | |
| 8 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Baron Select Funds (the Trust) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company established as a Delaware statutory trust on April 30, 2003. The Trust currently offers 12 series. This report covers only the Baron WealthBuilder Fund (the Fund). The Fund’s investment objective is capital appreciation. The Fund is a diversified fund that invests, at any given time, in the securities of a select number of Baron mutual funds (the Underlying Funds), representing specific investment strategies. The Fund normally invests in a variety of Baron domestic and international equity funds managed by BAMCO, Inc. (BAMCO or the Adviser). The Fund can invest in Underlying Funds holding U.S. and international stocks; small-cap, small- to mid-cap, large-cap, all-cap stocks; and sector stocks. The Adviser decides how much of the Fund’s assets to allocate to Underlying Funds based on the outlook for, and on the relative valuations of, the Underlying Funds and the various markets in which they invest. For information on the Underlying Funds, please refer to the Prospectuses and Statements of Additional Information of the Underlying Funds. Also, information on the Underlying Funds is available at baronfunds.com.
The Fund offers Retail Shares, TA Shares, and Institutional Shares. Each class of shares differs only in its ongoing fees, expenses, and eligibility requirements. Each class of shares has equal rights to earnings and assets, except that each class bears different expenses for distribution and shareholder servicing. The Fund’s investment income, realized and unrealized gains or losses on investments, and expenses other than those attributable to a specific class are allocated to each class based on its relative net assets. Each class of shares has exclusive voting rights with respect to matters that affect just that class.
2. SIGNIFICANT ACCOUNTING POLICIES AND INVESTMENT RISKS
The following is a summary of significant accounting policies followed by the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (GAAP). The Trust is an investment company and therefore follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies.
a) Net Asset Value. The Fund’s share price or net asset value (NAV) is calculated as of the scheduled close of the regular trading session (usually 4 p.m. E.T. or such other time as of which the Fund’s NAV is calculated (the NAV Calculation Time)) on the New York Stock Exchange (the Exchange) on any day the Exchange is scheduled to be open. The NAV per share of a class is determined by dividing the value of the total assets less all liabilities, of the Fund represented by such class, by the total number of Fund shares of such class outstanding.
b) Security Valuation. Investments in the Underlying Funds are valued at their closing NAV per share on the day of valuation. Portfolio securities held by the Underlying Funds traded on any national stock exchange are valued based on the last sale price on the exchange where such shares are principally traded. For securities traded on NASDAQ, the Underlying Funds use the NASDAQ Official Closing Price. If there are no sales on a given day, the value of the security may be the average of the most recent bid and asked quotations on such exchange or the last sale price from a prior day. Where market quotations are not readily available, or, if in the Adviser’s judgment, they do not accurately reflect the fair value of a security held by one of the Underlying Funds, or an event occurs after the market close but before the Underlying Funds are priced that materially affects the value of a security, the security will be valued by the Adviser using policies and procedures approved by the Board of Trustees (the Board). The Board has designated the Adviser to perform fair value determinations pursuant to Rule 2a-5 under the 1940 Act. The Adviser has a Fair Valuation Committee (the Committee) comprised of senior management representatives and the Committee reports to the Board every quarter. Accordingly, the Committee may evaluate a variety of factors to determine the fair value of securities for which market quotations are determined not to be readily available or reliable. These factors include, but are not limited to, the type of security, the value of comparable securities, observations from financial institutions and relevant news events. Input from the Adviser’s portfolio management team also will be considered. Using a fair value pricing methodology to price securities may result in a value that is different from the most recent closing price of a security and from the prices used by other investment companies to calculate their portfolios’ NAVs.
U.S. Government obligations, money market instruments, and other debt instruments held by the Underlying Funds with a remaining maturity of 60 days or less are generally valued at amortized cost, which approximates fair value, unless an independent pricing service provides a valuation for such security or in the opinion of the Board or the Committee, the amortized cost method would not represent fair value. Debt instruments having a greater remaining maturity will be valued on the basis of prices obtained from a pricing service approved by the Board or at the mean of the bid and ask prices from the dealer maintaining an active market in that security. The value of the Underlying Funds’ investments in convertible bonds/convertible preferred stocks is determined primarily by obtaining valuations from independent pricing services based on readily available bid quotations or, if quotations are not available, by methods which include various considerations such as yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Other inputs used by an independent pricing service to value convertible bonds/convertible preferred stocks generally include underlying stock data, conversion premiums, listed bond and preferred stock prices and other market information which may include benchmark curves, trade execution data, sensitivity analysis, when available, or an estimated value calculated based on the price of the underlying common share on the valuation date adjusted for accrued and unpaid dividends. Open-end investment companies, including securities lending collateral invested in registered investment company money market funds, are valued at their NAV each day.
Non-U.S. equity securities held by the Underlying Funds traded on foreign securities exchanges are generally valued using an independent pricing vendor that provides daily fair value adjustment factors based on information such as local closing price, relevant general and sector indexes, currency fluctuations, and depositary receipts, as applicable. Securities valued using such adjustment factors are classified as Level 2 in the fair value hierarchy. The models of the independent pricing vendor generate an adjustment factor for each security, which is applied to the local closing price to adjust it for post-closing market movements up to the time the Underlying Funds are valued and translated into U.S. dollars. If the vendor does not provide an adjustment factor for a security, the security is valued based on its most recent local closing price and translated into U.S. dollars. The Adviser may also fair value securities in other situations, for example, when a particular foreign market is closed but the Underlying Funds are open. Other mutual funds may adjust the prices of their securities by different amounts.
c) Securities Transactions and Investment Income. Fund securities transactions are accounted for on trade date. Realized gain and loss from securities transactions are recorded on an identified cost basis for financial reporting and federal income tax purposes. Dividend income and capital gain distributions from the Underlying Funds are recognized on the ex-dividend date and interest income is recognized on an accrual basis. Dividends received from Underlying Funds are reflected as dividend income; capital gain distributions are reflected as realized gains.
9
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES AND INVESTMENT RISKS (Continued)
d) Expense Allocation. The Fund is charged for those expenses directly attributable to the Fund, such as distribution and transfer agency fees. Expenses that are not directly attributable to the Fund are typically allocated among the funds in the Trust and Baron Investment Funds Trust (collectively, the Fund Complex) in proportion to their respective net assets. The Fund accrues distribution and service (12b-1) fees to Retail Shares.
Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses associated with the Underlying Funds. Because Underlying Funds have varied expenses and fee levels and the Fund may own different proportion of Underlying Funds at different times, the amount of acquired fund fees and expenses incurred indirectly by the Fund will vary.
e) Single Issuer. Single issuer risk is the possibility that factors specific to an issuer to which an Underlying Fund is exposed will affect the market prices of the issuer’s securities and therefore the NAV of the Underlying Fund. Due to the size of Baron Partners Fund’s investment in Tesla, Inc. (Tesla), 43% of Baron Partners Fund’s net assets as of December 31, 2023, the NAV of Baron Partners Fund will be materially impacted by the price of Tesla stock. The Fund’s indirect proportional ownership of Tesla is $40,704,555, which represents 7.4% of the Fund’s net assets as of December 31, 2023. The financial statements of the Underlying Funds are available at baronfunds.com.
f) Non-Diversified Portfolio. Certain Underlying Funds are non-diversified, which means they will likely have a greater percentage of their assets in a single issuer than a diversified fund. As a result, a non-diversified fund will likely invest a greater percentage of its assets in fewer issuers, and the performance of those issuers may have a greater effect on the Underlying Fund’s performance (and consequently the Fund’s performance) compared to a diversified fund. Thus, a non-diversified fund is more likely to experience significant fluctuations in value, exposing the Underlying Fund (and consequently the Fund) to a greater risk of loss in any given period than a diversified fund. Additionally, non-diversified funds may encounter difficulty liquidating securities.
g) Industry Concentration. From time to time, market fluctuations in the value of an Underlying Fund’s investments, combined with an Underlying Fund’s non-diversified portfolio, may result in an Underlying Fund being concentrated in the securities of a single issuer or a small number of issuers, in a particular industry. As a result, this Underlying Fund will be particularly exposed to the risks of that company or industry relative to the risk exposure of investment companies holding a diversified portfolio of securities or those that seek to maintain near-index weightings in their portfolio securities. Accordingly, in those cases, an Underlying Fund will be disproportionately exposed to the market conditions, interest rates, and economic, regulatory, or financial developments that significantly affect that company or industry. For example, due to the size of Baron Partners Fund’s investment in Tesla, which represents about 43% of Baron Partners Fund’s net assets as of December 31, 2023, Baron Partners Fund will be more adversely impacted by negative developments affecting the automotive and energy industries, as well as governmental environmental regulations.
h) Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the period. Actual results could differ from those estimates.
i) Federal Income Taxes. The Fund intends to meet the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute to its shareholders substantially all of its net investment income and any net realized capital gains at least annually. The Fund will not be subject to federal or state income taxes to the extent that it qualifies as regulated investment companies and substantially all of its income is distributed.
j) Distributions to Shareholders. Income and capital gain distributions to shareholders are determined in accordance with income tax regulations which may differ from GAAP. These differences are primarily due to differing treatments for net investment loss, short-term capital gain distributions, and wash sale losses deferred. Income dividends are normally declared and paid annually. During any particular year, net realized gains from investment transactions in excess of available capital loss carryforwards would be taxable to the Fund, if not distributed. The Fund intends to declare and distribute these amounts, at least annually, to shareholders, but may be distributed more frequently. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
k) Commitments and Contingencies. In the normal course of business, the Fund may enter into contracts and agreements that contain a variety of representations and warranties, which provide general indemnification. The maximum exposure to the Fund under these agreements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.
l) Cash and Cash Equivalents. The Fund considers all short-term liquid investments with a maturity of three months or less when purchased to be cash equivalents.
3. ASSET ALLOCATION AND RISKS OF INVESTING IN THE UNDERLYING FUNDS
The Fund’s ability to meet its investment objective depends largely upon selecting the best mix of Underlying Funds. The selection of the Underlying Funds and the allocation of the Fund’s assets among the various market sectors could cause the Fund to underperform in comparison to other funds with a similar investment objective. In addition, each of the Underlying Funds has its own investment risks, and those risks can affect the value of the Fund’s investments. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, it will have greater exposure to the risks of that Underlying Fund.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short term securities, for the year ended December 31, 2023 were as follows:
| | | | | | | | |
| | |
| Fund | | Purchases | | | Sales | |
Baron WealthBuilder Fund | | $ | 49,386,881 | | | $ | 32,811,660 | |
10
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
NOTES TO FINANCIAL STATEMENTS (Continued)
5. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
a) Investment Advisory Fees. The Adviser, a wholly owned subsidiary of Baron Capital Group, Inc. (BCG), serves as investment adviser to the Fund and the Underlying Funds. The Adviser will not be paid a management fee for performing investment management services for the Fund. However, the Adviser receives management fees for managing the Underlying Funds. See the Underlying Funds’ Prospectuses or Statements of Additional Information for specific fees. The Adviser has contractually agreed to reimburse Fund expenses to the extent required to limit the net annual operating expense ratio (excluding acquired fund fees and expenses, portfolio transaction costs, interest, dividend and extraordinary expenses) pursuant to a contract expiring on August 29, 2034, unless renewed for another 11-year term as follows:
| | | | | | | | | | |
|
Annual Operating
Expense Ratio Cap | |
| | |
Retail
Shares | | | TA
Shares | | | Institutional
Shares | |
| | 0.30 | % | | | 0.05 | % | | | 0.05 | % |
The aforementioned reimbursement, if applicable, is not subject to recoupment by the Adviser.
b) Distribution Fees. Baron Capital, Inc. (BCI), a wholly owned subsidiary of BCG, is a registered broker-dealer and the distributor of the Fund’s shares. The Fund is authorized to pay BCI a distribution fee payable monthly pursuant to a distribution plan under Rule 12b-1 of the 1940 Act equal to 0.25% per annum of the Retail Shares’ average daily net assets.
c) Trustee Fees. Certain Trustees of the Trust are officers of the Adviser and received no direct renumeration in such capacity from the Fund Complex. The Fund Complex pays each Independent Trustee (an Independent Trustee is a Trustee who is not an “interested person” (as defined in the 1940 Act) of the Fund Complex) annual compensation in addition to reimbursement of out-of-pocket expenses in connection with attendance at meetings of the Board. Specifically, each Independent Trustee receives an annual base compensation of $172,000 with the lead Independent Trustee receiving an additional $20,000. An additional $48,000 per annum is paid to each Independent Trustee for attendance at the quarterly meetings of the Board. Each member of the Audit Committee receives an additional $10,000 in annual compensation with the Audit Committee Chairperson receiving an additional $10,000.
d) Custody, Fund Accounting and Administration Fees. The Fund has entered into an agreement with State Street Bank and Trust Company (State Street) to perform custody, accounting and certain administrative services.
e) Ownership Concentration. As of December 31, 2023 the officers, trustees and portfolio managers owned, directly or indirectly, 15.26% of the Fund. As a result of their ownership, these investors may be able to materially affect the outcome of matters presented to the Fund’s shareholders.
f) Transactions in “Affiliated” Companies. The Fund invests in the Institutional Shares of the Underlying Funds which are considered to be affiliated with the Fund.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| Name of Issuer | | Value at
December 31,
2022 | | | Purchase
Cost | | | Sales
Proceeds/ Return of
Capital | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Realized
Gains/ (Losses) | | | Dividend
Income | | | Other
Distributions | | | Shares
Held at
December 31,
2023 | | | Value at
December 31,
2023 | | | % of Net
Assets at
December 31,
2023 | |
“Affiliated” Companies as of December 31, 2023: | | | | | |
Baron Asset Fund, Institutional Shares | | $ | 58,777,134 | | | $ | 7,308,094 | | | $ | 3,726,789 | | | $ | 8,784,372 | | | $ | (711,570 | ) | | $ | — | | | $ | 2,236,567 | | | | 677,289 | | | $ | 70,431,241 | | | | 12.86 | % |
Baron Discovery Fund, Institutional Shares | | | 20,467,271 | | | | 2,056,869 | | | | 1,558,554 | | | | 5,029,438 | | | | (386,852 | ) | | | — | | | | — | | | | 914,251 | | | | 25,608,172 | | | | 4.68 | % |
Baron Durable Advantage Fund, Institutional Shares | | | 10,726,089 | | | | 1,326,012 | | | | 1,070,069 | | | | 4,942,827 | | | | (28,475 | ) | | | 15,926 | | | | — | | | | 704,627 | | | | 15,896,384 | | | | 2.90 | % |
Baron Emerging Markets Fund, Institutional Shares | | | 13,314,631 | | | | 1,361,961 | | | | 942,720 | | | | 1,241,609 | | | | (232,643 | ) | | | 100,806 | | | | — | | | | 1,051,558 | | | | 14,742,838 | | | | 2.69 | % |
Baron Fifth Avenue Growth Fund, Institutional Shares | | | 15,470,963 | | | | 1,770,021 | | | | 1,354,096 | | | | 9,347,521 | | | | (350,065 | ) | | | — | | | | — | | | | 574,033 | | | | 24,884,344 | | | | 4.55 | % |
Baron FinTech Fund, Institutional Shares | | | 10,973,144 | | | | 1,082,563 | | | | 820,292 | | | | 3,257,624 | | | | (216,982 | ) | | | — | | | | — | | | | 1,003,942 | | | | 14,276,057 | | | | 2.61 | % |
Baron Focused Growth Fund, Institutional Shares | | | 26,365,450 | | | | 2,890,504 | | | | 2,216,017 | | | | 8,006,712 | | | | (644,169 | ) | | | — | | | | — | | | | 903,189 | | | | 34,402,480 | | | | 6.28 | % |
Baron Global Advantage Fund, Institutional Shares | | | 15,022,835 | | | | 1,732,100 | | | | 1,312,467 | | | | 4,166,520 | | | | (291,423 | ) | | | — | | | | — | | | | 613,451 | | | | 19,317,565 | | | | 3.53 | % |
Baron Growth Fund, Institutional Shares | | | 67,472,097 | | | | 7,378,766 | | | | 4,593,632 | | | | 9,628,954 | | | | (800,326 | ) | | | — | | | | 1,316,415 | | | | 782,408 | | | | 79,085,859 | | | | 14.44 | % |
Baron Health Care Fund, Institutional Shares | | | 13,891,635 | | | | 1,299,075 | | | | 984,349 | | | | 1,043,638 | | | | (131,320 | ) | | | — | | | | — | | | | 793,631 | | | | 15,118,679 | | | | 2.76 | % |
11
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
NOTES TO FINANCIAL STATEMENTS (Continued)
5. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| Name of Issuer | | Value at
December 31,
2022 | | | Purchase
Cost | | | Sales
Proceeds/ Return of
Capital | | | Change in Net
Unrealized
Appreciation
(Depreciation) | | | Realized
Gains/ (Losses) | | | Dividend
Income | | | Other
Distributions | | | Shares
Held at
December 31,
2023 | | | Value at
December 31,
2023 | | | % of Net
Assets at
December 31,
2023 | |
Baron International Growth Fund, Institutional Shares | | $ | 14,652,318 | | | $ | 1,391,238 | | | $ | 984,350 | | | $ | 1,334,661 | | | $ | (315,507 | ) | | $ | 92,163 | | | $ | — | | | | 618,874 | | | $ | 16,078,360 | | | | 2.94 | % |
Baron Opportunity Fund, Institutional Shares | | | 15,849,030 | | | | 1,770,021 | | | | 1,354,096 | | | | 8,188,886 | | | | (192,424 | ) | | | — | | | | — | | | | 645,766 | | | | 24,261,417 | | | | 4.43 | % |
Baron Partners Fund, Institutional Shares | | | 52,479,980 | | | | 6,495,375 | | | | 4,921,749 | | | | 23,745,947 | | | | (825,261 | ) | | | — | | | | — | | | | 463,114 | | | | 76,974,292 | | | | 14.06 | % |
Baron Real Estate Fund, Institutional Shares | | | 25,969,840 | | | | 2,741,383 | | | | 1,968,700 | | | | 6,964,722 | | | | (547,233 | ) | | | 143,233 | | | | — | | | | 927,553 | | | | 33,160,012 | | | | 6.06 | % |
Baron Real Estate Income Fund, Institutional Shares | | | 10,002,678 | | | | 1,308,081 | | | | 820,292 | | | | 1,583,198 | | | | (241,096 | ) | | | 225,519 | | | | — | | | | 814,355 | | | | 11,832,569 | | | | 2.16 | % |
Baron Small Cap Fund, Institutional Shares | | | 55,067,948 | | | | 7,474,818 | | | | 4,183,488 | | | | 14,427,914 | | | | (1,264,373 | ) | | | — | | | | 1,953,748 | | | | 2,187,911 | | | | 71,522,819 | | | | 13.06 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 426,503,043 | | | $ | 49,386,881 | | | $ | 32,811,660 | | | $ | 111,694,543 | | | $ | (7,179,719 | ) | | $ | 577,647 | | | $ | 5,506,730 | | | | | | | $ | 547,593,088 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
6. LINE OF CREDIT
The Fund Complex (except Baron Partners Fund) participates in a committed line of credit agreement with State Street to be used for temporary purposes, primarily for financing redemptions. Each fund may borrow up to the lesser of $200 million or the maximum amount each fund may borrow under the 1940 Act, the limitations included in each fund’s prospectus, or any limit or restriction under any law or regulation to which each fund is subject or any agreement to which each fund is a party; provided that the aggregate outstanding principal amount of all loans to any of the funds may not exceed $200 million. Interest is charged to each fund, based on its borrowings, at a rate per annum equal to the higher of the Overnight Bank Funding Rate plus 0.10% or the Federal Funds Effective Rate plus 0.10%; plus a margin of 1.00%. An upfront fee of 0.05% is incurred on the commitment amount and a commitment fee of 0.20% per annum is incurred on the unused portion of the line of credit. Both fees are allocated to the participating funds based on their relative net assets.
During the year ended December 31, 2023, the Fund did not have any borrowings under the line of credit.
The Adviser believes that the fair value of the liabilities under the line of credit agreement is equivalent to the recorded amount based on its short-term maturity and interest rate, which fluctuates over time. The Fund’s outstanding balance under the line of credit agreement, if any, would be categorized as Level 2 in the fair value hierarchy, which is further discussed in Note 7.
7. FAIR VALUE MEASUREMENTS
Fair value is defined by GAAP as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. GAAP provides a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Fund. Unobservable inputs are inputs that reflect the Fund’s own assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
| | • | | Level 1 — quoted prices in active markets for identical assets or liabilities; |
| | • | | Level 2 — prices determined using other inputs that are observable either directly, or indirectly through corroboration with observable market data (which could include quoted prices for similar assets or liabilities, interest rates, credit risk, etc.); |
| | • | | Level 3 — prices determined using unobservable inputs when quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an asset or liability (unobservable inputs reflect the Fund’s own assumptions in determining the fair value of assets or liabilities and would be based on the best information available). |
Investments in open-end registered investment companies are valued at NAV and are classified in the fair value hierarchy as Level 1.
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
Federal income tax regulations differ from GAAP. Therefore, distributions determined in accordance with tax regulations may differ in amount or character from net investment income and net realized gain for financial reporting purposes. Net investment income (loss) and net realized and unrealized gain (loss) differ for financial statement and tax purposes due to differing treatments of net investment loss, short-term capital gain distributions, and wash sale losses deferred. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences.
12
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
NOTES TO FINANCIAL STATEMENTS (Continued)
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS (Continued)
As of December 31, 2023, the Fund’s cost of investments and gross unrealized appreciation (depreciation) for U.S. federal income tax purposes were as follows:
| | | | |
Cost of investments | | $ | 493,513,207 | |
| | | | |
Gross tax unrealized appreciation | | | 1,180,417,141 | |
Gross tax unrealized depreciation | | | (1,126,337,260 | ) |
| | | | |
Net tax unrealized appreciation (depreciation) | | | 54,079,881 | |
| | | | |
As of December 31, 2023, the components of net assets on a tax basis were as follows:
| | | | |
Undistributed (accumulated) ordinary income (loss) | | $ | 113,254 | |
Capital loss carryforwards | | | (17,257,222 | ) |
Net tax unrealized appreciation (depreciation) on investments | | | 54,079,881 | |
Paid-in capital | | | 510,582,556 | |
| | | | |
Net Assets | | $ | 547,518,469 | |
| | | | |
At December 31, 2023, the Fund had capital loss carryforwards as follows:
| | | | |
Short Term | | $ | 17,257,222 | |
| | | | |
Long Term | | $ | — | |
| | | | |
Capital loss carryforward utilized during the year ended December 31, 2023 | | $ | 5,155,590 | |
| | | | |
The tax character of distributions paid during the years ended December 31, 2023 and December 31, 2022 was as follows:
| | | | | | | | | | | | | | | | |
| | |
| | | Year Ended
December 31, 2023 | | | Year Ended
December 31, 2022 | |
| | | | |
| | | Ordinary1 | | | Long Term
Capital Gain | | | Ordinary1 | | | Long Term
Capital Gain | |
| | $ | 134,067 | | | $ | — | | | $ | 2,479,054 | | | $ | 10,918,341 | |
| 1 | For tax purposes, short-term capital gains are considered ordinary income distributions. |
The Fund follows the provisions of FASB Codification Section 740 (ASC Section 740) “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in tax positions taken or expected to be taken on a tax return. ASC Section 740 sets forth a threshold for financial statement recognition, measurement and disclosure of tax positions taken or expected to be taken on a tax return. The Fund is required to recognize the tax effects of certain tax positions under a “more likely than not” standard, that based on their technical merits, have more than 50 percent likelihood of being sustained upon examination. Management has analyzed the tax positions taken on the Fund’s federal income tax returns for the current year and prior two years, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. At December 31, 2023, the Fund did not have any uncertain tax benefits that require recognition, de-recognition or disclosure. The Fund’s federal, state and local income and federal excise tax returns for which the applicable statutes of limitations have not expired (current and prior three years) are subject to examination by the Internal Revenue Service and state departments of revenue.
9. RECENT REGULATORY UPDATE
In October 2022, the SEC adopted the Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds rule and reform amendments requiring open-end management investment companies, including mutual funds and exchange-traded funds, to transmit concise and visually engaging semi-annual and annual tailored shareholder reports that highlight key information, including fund expenses, performance, and holdings to shareholders. Certain information from the Fund’s current shareholder reports, including the Fund’s portfolio of investments, financial statements, and financial highlights, will move to Form N-CSR. This information will be available online, mailed upon request and filed on a semi-annual basis. The rule and form amendments have a compliance date of July 24, 2024. Accordingly, the rule and form amendments will not impact the Fund until the 2024 semi-annual shareholder reports.
10. SUBSEQUENT EVENTS
Management has evaluated events occurring subsequent to the date of the Statements of Assets and Liabilities and through the date of issuance of the financial statements and has determined that there were no subsequent events that required adjustment to or disclosure in the financial statements.
13
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Income (loss) from
Investment operations: | | | Less distributions to
shareholders from: | | | | | | | | | Ratios to Average Net Assets: | | | Supplemental
Data: | |
| | | | | | | | | | | | | | |
| | | Net asset
value,
beginning
of year
($) | | | Net
investment
income
(loss)
($)1 | | | Net
realized
and
unrealized
gain (loss)
($) | | | Total
from
investment
operations
($) | | | Net
investment
income
($) | | | Net
realized
gains
($) | | | Total
distributions
($) | | | Net
asset
value,
end of
year
($) | | | Total
return
(%)2 | | | Gross
expenses (%)3 | | | Net
expenses
(%)3 | | | Net
investment
income
(loss)
(%) | | | Net assets
(in millions),
end of
year
($) | | | Portfolio
turnover
rate
(%) | |
|
RETAIL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 14.04 | | | | (0.03 | ) | | | 3.59 | | | | 3.56 | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 17.60 | | | | 25.36 | 4 | | | 0.33 | | | | 0.30 | | | | (0.18 | ) | | | 94.9 | | | | 6.70 | |
| | | | | | | | | | | | | | |
2022 | | | 21.56 | | | | (0.04 | ) | | | (7.02 | ) | | | (7.06 | ) | | | (0.08 | ) | | | (0.38 | ) | | | (0.46 | ) | | | 14.04 | | | | (32.75 | )4 | | | 0.34 | | | | 0.30 | | | | (0.27 | ) | | | 76.0 | | | | 20.73 | |
| | | | | | | | | | | | | | |
2021 | | | 19.57 | | | | (0.03 | ) | | | 3.21 | | | | 3.18 | | | | 0.00 | | | | (1.19 | ) | | | (1.19 | ) | | | 21.56 | | | | 16.42 | 4 | | | 0.33 | 5 | | | 0.30 | 5 | | | (0.13 | ) | | | 117.4 | | | | 0.18 | |
| | | | | | | | | | | | | | |
2020 | | | 12.23 | | | | (0.04 | ) | | | 7.62 | | | | 7.58 | | | | 0.00 | | | | (0.24 | ) | | | (0.24 | ) | | | 19.57 | | | | 62.45 | 4 | | | 0.41 | 5 | | | 0.30 | 5 | | | (0.29 | ) | | | 44.5 | | | | 6.65 | |
| | | | | | | | | | | | | | |
2019 | | | 9.33 | | | | (0.03 | ) | | | 3.37 | | | | 3.34 | | | | (0.01 | ) | | | (0.43 | ) | | | (0.44 | ) | | | 12.23 | | | | 36.24 | 4 | | | 0.41 | 7 | | | 0.32 | 7 | | | (0.26 | ) | | | 5.9 | | | | 22.48 | |
|
TA SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 14.21 | | | | 0.01 | | | | 3.64 | | | | 3.65 | | | | (0.01 | ) | | | 0.00 | | | | (0.01 | ) | | | 17.85 | | | | 25.66 | 4 | | | 0.08 | | | | 0.05 | | | | 0.07 | | | | 49.5 | | | | 6.70 | |
| | | | | | | | | | | | | | |
2022 | | | 21.76 | | | | (0.00 | )6 | | | (7.09 | ) | | | (7.09 | ) | | | (0.08 | ) | | | (0.38 | ) | | | (0.46 | ) | | | 14.21 | | | | (32.59 | )4 | | | 0.08 | | | | 0.05 | | | | (0.02 | ) | | | 37.9 | | | | 20.73 | |
| | | | | | | | | | | | | | |
2021 | | | 19.70 | | | | 0.03 | | | | 3.22 | | | | 3.25 | | | | (0.00 | )6 | | | (1.19 | ) | | | (1.19 | ) | | | 21.76 | | | | 16.70 | 4 | | | 0.08 | 5 | | | 0.05 | 5 | | | 0.12 | | | | 47.2 | | | | 0.18 | |
| | | | | | | | | | | | | | |
2020 | | | 12.28 | | | | (0.01 | ) | | | 7.67 | | | | 7.66 | | | | 0.00 | | | | (0.24 | ) | | | (0.24 | ) | | | 19.70 | | | | 62.85 | 4 | | | 0.16 | 5 | | | 0.05 | 5 | | | (0.04 | ) | | | 44.0 | | | | 6.65 | |
| | | | | | | | | | | | | | |
2019 | | | 9.35 | | | | (0.00 | )6 | | | 3.37 | | | | 3.37 | | | | (0.01 | ) | | | (0.43 | ) | | | (0.44 | ) | | | 12.28 | | | | 36.49 | 4 | | | 0.17 | 7 | | | 0.07 | 7 | | | (0.03 | ) | | | 21.4 | | | | 22.48 | |
|
INSTITUTIONAL SHARES | |
|
Year Ended December 31, | |
| | | | | | | | | | | | | | |
2023 | | | 14.21 | | | | 0.01 | | | | 3.65 | | | | 3.66 | | | | (0.01 | ) | | | 0.00 | | | | (0.01 | ) | | | 17.86 | | | | 25.73 | 4 | | | 0.08 | | | | 0.05 | | | | 0.07 | | | | 403.1 | | | | 6.70 | |
| | | | | | | | | | | | | | |
2022 | | | 21.76 | | | | (0.00 | )6 | | | (7.09 | ) | | | (7.09 | ) | | | (0.08 | ) | | | (0.38 | ) | | | (0.46 | ) | | | 14.21 | | | | (32.59 | )4 | | | 0.09 | | | | 0.05 | | | | (0.02 | ) | | | 312.5 | | | | 20.73 | |
| | | | | | | | | | | | | | |
2021 | | | 19.70 | | | | 0.02 | | | | 3.23 | | | | 3.25 | | | | (0.00 | )6 | | | (1.19 | ) | | | (1.19 | ) | | | 21.76 | | | | 16.70 | 4 | | | 0.08 | 5 | | | 0.05 | 5 | | | 0.09 | | | | 412.2 | | | | 0.18 | |
| | | | | | | | | | | | | | |
2020 | | | 12.28 | | | | (0.01 | ) | | | 7.67 | | | | 7.66 | | | | 0.00 | | | | (0.24 | ) | | | (0.24 | ) | | | 19.70 | | | | 62.85 | 4 | | | 0.16 | 5 | | | 0.05 | 5 | | | (0.04 | ) | | | 184.1 | | | | 6.65 | |
| | | | | | | | | | | | | | |
2019 | | | 9.35 | | | | (0.00 | )6 | | | 3.37 | | | | 3.37 | | | | (0.01 | ) | | | (0.43 | ) | | | (0.44 | ) | | | 12.28 | | | | 36.49 | 4 | | | 0.17 | 7 | | | 0.07 | 7 | | | (0.02 | ) | | | 93.8 | | | | 22.48 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns reflect reinvestment of all dividends and distributions, if any. |
| 3 | Expenses do not include acquired fund fees and expenses of the Underlying Funds. |
| 4 | The total returns would have been lower had certain expenses not been reduced during the period shown. |
| 5 | Includes interest expense of less than 0.01%. |
| 6 | Less than $0.01 per share. |
| 7 | Includes interest expense of 0.02%. |
| | |
| 14 | | See Notes to Financial Statements. |
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of Baron Select Funds and Shareholders of Baron WealthBuilder Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Baron WealthBuilder Fund (one of the funds constituting Baron Select Funds, referred to hereafter as the “Fund”) as of December 31, 2023, the related statement of operations for the year ended December 31, 2023, the statement of changes in net assets for each of the two years in the period ended December 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2023 and the financial highlights for each of the five years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the transfer agent. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 26, 2024
We have served as the auditor of one or more investment companies in the Baron group of Funds since 1987.
15
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
The Trust has adopted a liquidity risk management program (the LRMP) pursuant to the requirements of Rule 22e-4 under the 1940 Act, which requires registered open-end funds (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage fund liquidity risk. The rule is designed to promote effective liquidity risk management throughout the open-end fund industry, thereby reducing liquidity risk — i.e., the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
Pursuant to the requirements of Rule 22e-4, the LRMP is required to include policies and procedures reasonably designed to incorporate the following elements, and the LRMP complies with these requirements: (1) assessment, management and periodic review of liquidity risk; (2) classification of the Fund’s investments into one of the four liquidity categories in Rule 22e-4; (3) if the Fund does not primarily hold assets that are considered highly liquid investments (cash and other investments reasonably expected to be convertible into cash in current market conditions in three business days or less without the conversion into cash significantly changing the market value of the investment), determination of a “highly liquid investment minimum” (as defined in Rule 22e-4 and in the LRMP, the HLIM) and compliance with additional related requirements; (4) prohibition on the acquisition of any “illiquid investment” (as defined in Rule 22e-4) if immediately after the acquisition the Fund would have invested more than 15% of its net assets in illiquid investments; and (5) if the Fund reserves the right to engage in redemptions in-kind, establishment of policies and procedures regarding how and when the Fund will engage in such redemptions in-kind. There have been no material changes to the LRMP since it was initially approved by the Board.
The Board has approved the Adviser to administer the LRMP (the Program Administrator). The Program Administrator has delegated its responsibilities to a Liquidity Risk Management Committee (the LRM Committee), comprised of a cross-functional group of key representatives from various departments of the Program Administrator, including Operations; Accounting; Legal and Compliance; Trading; and Portfolio and Risk Analytics. In addition, the Trust has contracted with a third party liquidity assessment vendor to support the classification of Fund investments.
Pursuant to the requirements of Rule 22e-4, the Board must review, no less frequently than annually, a written report prepared by the Program Administrator that addresses the operation of the program and assesses its adequacy and effectiveness of implementation, including, if applicable, the operation of the HLIM, and any material changes to the program. The Board received a written report in May 2023 (the Annual Report).
The Annual Report states that the Adviser, as the Program Administrator, acting primarily through the LRM Committee, has assessed the operation of the LRMP and believes that the LRMP is adequate and effective in its implementation. The Program Administrator and the LRM Committee initially determined that the Fund primarily holds assets that are highly liquid investments, and the Annual Report states that this determination continues to be maintained so that the Fund does not need to maintain a HLIM. In addition, the Annual Report states that, since the LRMP was implemented, the Fund has not breached its limit on illiquid investments.
16
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
TAX INFORMATION (Unaudited)
The federal tax status of distributions paid by the Fund during the year ended December 31, 2023 are listed below.
During the fiscal year ended December 31, 2023, the Fund’s distributions to shareholders included:
| | | | | | | | |
| | |
| | | Ordinary
Income1,3 | | | Long-Term
Capital Gains2,3 | |
| | |
| Baron WealthBuilder Fund | | $ | 134,067 | | | $ | — | |
| 1 | For tax purposes, short-term capital gains are considered ordinary income distributions. |
| 2 | Long-term capital gains are subject to a maximum allowable rate of 20% for individuals pursuant to the Tax Cuts and Jobs Act of 2017. |
| 3 | Under the Patient Protection and Affordable Care Act, higher income taxpayers must pay a 3.8% additional tax on investment income. |
Of the total ordinary income distributions paid, 100.00% is qualified dividend income subject to a reduced tax rate and 100.00% qualifies for the corporate dividends received deduction.
The information and distributions reported may differ from the information and distributions taxable to the shareholders for the calendar year ended December 31, 2023. The information necessary to complete your income tax return for the calendar year ended December 31, 2023 will be listed on the Form 1099-DIV, which was mailed to you in January 2024.
17
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
FUND EXPENSES (Unaudited)
As a shareholder of the Fund, you may incur ongoing expenses. Ongoing expenses include distribution and service (12b-1) fees and other Fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The information in the following table is based on an investment of $1,000 invested on July 1, 2023 and held for the six months ended December 31, 2023.
ACTUAL EXPENSES
The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading titled “Expenses Paid During the Period.”
BASED ON ACTUAL TOTAL RETURN FOR THE SIX MONTHS ENDED DECEMBER 31, 20231
| | | | | | | | | | | | | | | | | | | | |
| | | Actual Total Return | | | Beginning Account Value July 1, 2023 | | | Ending Account Value December 31, 2023 | | | Annualized Expense Ratio | | | Expenses Paid During the Period2 | |
Baron WealthBuilder Fund — Retail Shares | | | 5.90 | % | | $ | 1,000.00 | | | $ | 1,059.00 | 3 | | | 0.30 | %4 | | $ | 1.56 | |
Baron WealthBuilder Fund — TA Shares | | | 6.03 | % | | $ | 1,000.00 | | | $ | 1,060.30 | 3 | | | 0.05 | %4 | | $ | 0.26 | |
Baron WealthBuilder Fund — Institutional Shares | | | 6.03 | % | | $ | 1,000.00 | | | $ | 1,060.30 | 3 | | | 0.05 | %4 | | $ | 0.26 | |
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account values and expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example relating to the Fund with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table below are meant to highlight your ongoing costs and do not reflect any transactional costs, such as redemption fees, if any. Therefore, the table is useful in comparing ongoing costs only and will not help you determine your relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs would have been higher.
BASED ON HYPOTHETICAL TOTAL RETURN FOR THE SIX MONTHS ENDED DECEMBER 31, 20231
| | | | | | | | | | | | | | | | | | | | |
| | | Hypothetical Annualized Total Return | | | Beginning Account Value July 1, 2023 | | | Ending Account Value December 31, 2023 | | | Annualized
Expense Ratio | | | Expenses Paid During the Period2 | |
Baron WealthBuilder Fund — Retail Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,023.69 | 3 | | | 0.30 | %4 | | $ | 1.53 | |
Baron WealthBuilder Fund — TA Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,024.95 | 3 | | | 0.05 | %4 | | $ | 0.26 | |
Baron WealthBuilder Fund — Institutional Shares | | | 5.00 | % | | $ | 1,000.00 | | | $ | 1,024.95 | 3 | | | 0.05 | %4 | | $ | 0.26 | |
| 1 | Assumes reinvestment of all dividends and distributions, if any. |
| 2 | Expenses are equal to each share class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
| 3 | Ending account value assumes the return earned after expense reimbursement and would have been lower if a portion of the expenses had not been reimbursed. |
| 4 | Annualized expense ratios are adjusted to reflect expense reimbursement and do not include acquired fund fees and expenses of the Underlying Funds. |
18
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
MANAGEMENT OF THE FUND (Unaudited)
Board of Trustees and Officers.
Trustees of the Trust, together with information as to their positions with the Trust, principal occupations and other board memberships and affiliations for the past five years, are shown below. Each Trustee serves as Trustee of the Fund until its termination; until the Trustee’s retirement, resignation or death; or as otherwise specified in the Trust’s organizational documents. All Trustees listed below, whether Interested or Independent, serve as Trustees for the Trust. Additional information about the Trustees and Officers of the Trust can be found in the Trust’s Statement of Additional Information (the SAI) which may be obtained without charge by writing or calling 1-800-99BARON. The SAI is also available on the Baron Funds® website, BaronFunds.com.
| | | | | | | | | | |
| | | | | |
Name (Year of Birth) &
Address(1) | | Position(s) Held
With the Fund | | Term of
Office and
Length of
Time Served | | Principal Occupation(s)
During the Past Five Years | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | Other
Directorships
Held by Trustee |
Interested Trustees | | | | | | | | | | |
| | | | | |
Ronald Baron (1943)(2),(3) | | Chief Executive Officer, Trustee and Portfolio Manager | | 20 years | | Director, Chairman and CEO: the Firm* (1982-Present); CEO, Trustee and Portfolio Manager: Baron Investment Funds Trust (1987-Present); CEO, Trustee and Portfolio Manager: Baron Select Funds (2003-Present); Portfolio Manager: Baron USA Partners Fund Ltd. (1994-Present). | | 19 | | None |
| | | | | |
Linda S. Martinson (1955)(2),(3) | | Chairman, President, Chief Operating Officer and Trustee | | 20 years | | Director: the Firm* (2003-Present); President: the Firm* (2007-Present); Chief Operating Officer: the Firm* (2006-Present); Chairman (2010-Present), President (2007-Present), Chief Operating Officer (2006-Present), Trustee (1987-Present): Baron Investment Funds Trust; Chairman (2010-Present), President (2007-Present), Chief Operating Officer (2006-Present), Trustee (2003-Present): Baron Select Funds; Director: Baron USA Partners Fund Ltd. (2006-Present); Director: Baron Emerging Markets Fund Ltd. (2016-Present). | | 19 | | None |
| | | | | |
Peggy C. Wong (1961)(2),(3) | | Vice President, Chief Financial Officer and Trustee | | 20 years | | Trustee (2021-Present): Baron Investment Funds Trust and Baron Select Funds; Chief Financial Officer: the Firm* (1987-Present), Baron Investment Funds Trust (1987-Present), Baron Select Funds (2003-Present), Baron USA Partners Fund Ltd. (1994-Present), Baron Emerging Markets Fund Ltd. (2016-Present). | | 19 | | None |
Independent Trustees | | | | | | | | | | |
| | | | | |
Thomas J. Folliard (1965)(4),(5),(6) | | Trustee | | 6 years | | Non-Executive Chair of the Board: CarMax, Inc. (2016-Present); Trustee: Baron Investment Funds Trust (2017-Present), Baron Select Funds (2017-Present). | | 19 | | Director: PulteGroup, Inc. (2012-Present) |
| | | | | |
Abraham (Avi) Nachmany (1952)(5),(6) | | Trustee | | 4 years | | Independent mutual fund industry consultant (2016-Present); Advisory Board Member: Baron Investment Funds Trust and Baron Select Funds (2019-2020); Trustee: Baron Investment Funds Trust, Baron Select Funds (2020-Present) | | 19 | | None |
| | | | | |
Raymond Noveck (1943)(4),(5),(6) | | Lead Trustee | | 20 years | | Private Investor (1999-Present); Lead Trustee: Baron Investment Funds Trust (1987-Present), Baron Select Funds (2003-Present). | | 19 | | None |
19
| | |
| Baron WealthBuilder Fund | | December 31, 2023 |
MANAGEMENT OF THE FUNDS (Unaudited) (Continued)
| | | | | | | | | | |
| | | | | |
Name (Year of Birth) &
Address(1) | | Position(s) Held
With the Funds | | Term of
Office and
Length of
Time Served | | Principal Occupation(s)
During the Past Five Years | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | Other
Directorships
Held by Trustee |
Independent Trustees (continued) | | | | | | | | |
| | | | | |
Anita James Rival (1964)(5),(6) | | Trustee | | 10 years | | Advisory Board Member: ValueAct Capital, LLC (2014-Present); Advisory Board Member: Impala Asset Management, LLC (2014-2022); Trustee: Baron Investment Funds Trust, Baron Select Funds (2013-Present). | | 19 | | Director: Golub Capital BDC, Inc. (2011-Present); Director: Golub Capital BDC 3, Inc. (2017-Present); Director: Golub Capital BDC 4, Inc. (2021-Present); Director: Golub Capital Direct Lending Corporation (2020-Present); Golub Capital Direct Lending Unlevered Corporation (2021-Present); Golub Capital Private Credit Fund (2023-Present) |
| | | | | |
David A. Silverman, MD (1950)(5),(6) | | Trustee | | 20 years | | Physician and Faculty: New York University School of Medicine (1976-Present); President: Harley Street Medical (2021-Present); Trustee: Baron Investment Funds Trust (1987-Present), Baron Select Funds (2003-Present). | | 19 | | None |
| | | | | |
Marvelle Sullivan (1979)(5),(6) | | Trustee | | 3 years | | Founder and CEO: Marvelle Co. LLC (2019-Present); Managing Director: J.P. Morgan (2017-2019); Advisory Board Member: Baron Investment Funds Trust and Baron Select Funds (2/2020-5/2020); Trustee: Baron Investment Funds Trust, Baron Select Funds (5/2020-Present). | | 19 | | None |
| | | | | |
Errol Taylor (1955)(5),(6) | | Trustee | | 3 years | | Partner: Milbank LLP (2003-2020); Trustee: Baron Investment Funds Trust, Baron Select Funds (2020-Present). | | 19 | | Trustee: New York Law School (2014-Present); Trustee: Clark Atlanta University (2017-Present) |
| | | | | |
Alejandro (Alex) Yemenidjian (1955)(4),(5),(6) | | Trustee | | 16 years | | Chairman and CEO: GAST Enterprises, Ltd. (investment company) (2005-Present); Manager: Armenco Capital LLC (investment company) (2013-Present); Trustee: Baron Investment Funds Trust (2006-Present), Baron Select Funds (2006-Present). | | 19 | | Director: Guess?, Inc. (2005-Present) |
Additional Officers of the Funds | | | | | | |
| | | | | |
Louis Beasley (1970) | | Vice President and Chief Compliance Officer | | 9 years | | Vice President and Chief Compliance Officer: Baron Capital Group, Inc., BAMCO, Inc., Baron Capital Management Inc., Baron Investment Funds Trust, Baron Select Funds, Baron USA Partners Fund Ltd. (2014-Present), Baron Emerging Markets Fund Ltd. (2016-Present); Vice President: the Firm* (2014-Present). | | N/A | | N/A |
| | | | | |
Clifford Greenberg (1959) | | Senior Vice President and Co-Chief Investment Officer | | 20 years | | Director, Senior Vice President and Co-Chief Investment Officer: the Firm* (2020-Present); Senior Vice President and Co-Chief Investment Officer: Baron Investment Funds Trust, Baron Select Funds (2020-Present); Portfolio Manager: Baron Small Cap Fund (1997-Present). | | N/A | | N/A |
| | | | | |
Patrick M. Patalino (1968) | | Vice President, Chief Legal Officer and Secretary | | 16 years | | Vice President, General Counsel and Secretary: the Firm* (2007-Present); Vice President, Chief Legal Officer and Secretary: Baron Investment Funds Trust, Baron Select Funds (2007-Present); General Counsel: Baron USA Partners Fund Ltd. (2007-Present), Baron Emerging Markets Fund Ltd. (2016-Present). | | N/A | | N/A |
20
| | |
| December 31, 2023 | | Baron WealthBuilder Fund |
MANAGEMENT OF THE FUNDS (Unaudited) (Continued)
| | | | | | | | | | |
| | | | | |
Name (Year of Birth) &
Address(1) | | Position(s) Held
With the Funds | | Term of
Office and
Length of
Time Served | | Principal Occupation(s)
During the Past Five Years | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | Other
Directorships
Held by Trustee |
Additional Officers of the Funds (continued) | | | | | | | | |
| | | | | |
Andrew Peck (1969) | | Senior Vice President and Co-Chief Investment Officer | | 20 years | | Director, Senior Vice President and Co-Chief Investment Officer: the Firm* (2020-Present); Senior Vice President and Co-Chief Investment Officer: Baron Investment Funds Trust, Baron Select Funds (2020-Present); Portfolio Manager: Baron Asset Fund (2003-Present). | | N/A | | N/A |
| | | | | |
Christopher Snively (1984) | | Treasurer | | <1 year | | Vice President: the Firm* (2023-Present); Treasurer: Baron Investment Funds Trust, Baron Select Funds (2023-Present); Chief Financial Officer: The Lazard Funds, Inc., Lazard Retirement Series, Inc., Lazard Global Return and Income Fund, Inc. (2016-2023); Director: Lazard Asset Management LLC (2021-2023, previously Senior Vice President). | | N/A | | N/A |
| * | The “Firm” means Baron Capital Group, Inc. (BCG) along with its subsidiaries BCI, Baron Capital Management, Inc. (BCM) and BAMCO. |
| (1) | The address of each Trustee and Officer of the Funds is 767 Fifth Avenue, New York, NY 10153. |
| (2) | Trustees deemed to be “Interested Trustees” by reason of their employment with the Adviser and BCI. |
| (3) | Members of the Executive Committee, which is empowered to exercise all of the powers, including the power to declare dividends, of the full Board when the full Board is not in session. |
| (4) | Members of the Audit Committee. |
| (5) | Members of the Nominating Committee. |
| (6) | Members of the Independent Trustees Committee. |
21
Privacy Notice
The Fund collects nonpublic personal information about you from the following sources:
| ∎ | | Information we receive from you on applications or other forms; |
| ∎ | | Information about your transactions with us, our Adviser or others; and |
| ∎ | | Information we receive from third parties, such as credit reporting agencies. |
“Nonpublic personal information” is private information about you that we obtain in connection with providing a financial product or service to you.
We may share your name and address with other Baron Funds and the Adviser and its affiliates for the purpose of sending you information about our products that we believe may be of interest to you and informing you of our upcoming Baron Investment Conference and for sending required information.
We do not disclose any nonpublic personal information about our customers to anyone, except as permitted or required by law. Examples of permitted disclosures under the law include sharing with companies that work for us to provide you services, such as the Transfer Agent or mailing house. All such companies that act on our behalf are contractually obligated to keep the information that we provide to them confidential and to use the information only to provide the services that we have asked them to perform for you and us.
We restrict access to nonpublic information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic and procedural safeguards to guard your nonpublic personal information.
This privacy notice is also available at all times on the Baron Funds® website, baronfunds.com or by calling 1-800-99BARON.
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For more information, and to enroll today, go to baronfunds.com/edelivery.
767 Fifth Avenue, 49th Fl.
New York, NY 10153
1.800.99.BARON
212-583-2000
baronfunds.com
ANNUAL WEALTH 12/31/2023
Item 2. Code of Ethics.
The Registrant has adopted a Code of Ethics for Principal Executive and Senior Financial Officers (the “Code”). Upon request, the Registrant will provide a copy of the Code to any person without charge. To obtain a copy of the Code, please send your request to info@baronfunds.com or call 1-800-99BARON (1-800-992-2766).
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees has determined that the Registrant has three audit committee financial experts serving on its Audit Committee, Raymond Noveck, Alex Yemenidjian, and Thomas Folliard. Mr. Noveck, Mr. Yemenidjian, and Mr. Folliard are “independent” for purposes of Item 3(a)(2) of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The following table shows the fees paid to PricewaterhouseCoopers, LLP, the Registrant’s principal accounting firm during the fiscal years ended December 31, 2023 and December 31, 2022:
(a) Audit Fees: for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings or engagements:
| | | | | | | | |
| | | 2023 | | | 2022 | |
Baron Select Funds | | $ | 568,217 | | | $ | 590,301 | |
(b) Audit-Related Fees: for assurance and related services that are reasonably related to the performance of the audit and are not included as Audit Fees:
| | | | | | | | |
| | | 2023 | | | 2022 | |
Baron Select Funds | | $ | 0 | | | $ | 0 | |
(c) Tax Fees: for professional services rendered for tax compliance, tax advice and tax planning:
| | | | | | | | |
| | | 2023 | | | 2022 | |
Baron Select Funds | | $ | 177,338 | | | $ | 176,821 | |
The Tax Fees represent services provided in connection with the preparation of tax returns and year-end distribution review.
(d) All Other Fees: for products and services provided by such accounting firm that are not included in (a), (b) or (c) above:
| | | | | | | | |
| | | 2023 | | | 2022 | |
Baron Select Funds | | $ | 0 | | | $ | 0 | |
(e) Audit Committee Pre-Approval Policies and Procedures: (i) Pursuant to paragraph (c)(7) of Rule 2-01 of Regulation S-X and to its charter, the Audit Committee shall pre-approve all audit and non-audit services provided by the independent auditors and in connection therewith to review and evaluate the qualifications, independence and performance of the Fund’s independent auditors; (ii) 0% of the services described in each of items 4(b) through 4(d) were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the last two fiscal years is as follows:
2023: $38,956
2022: $37,822
(h) Not Applicable.
(i) Not Applicable.
(j) Not Applicable.
Item 5. Audit Committee of Listed Registrants.
The Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the Audit Committee are Raymond Noveck, Alex Yemenidjian, and Thomas Folliard.
Item 6. Investments.
Included herein under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
(a) (1) Not applicable.
(a) (2) Certification of each of the principal executive officers and principal financial officers of the Registrant as required by Rule 30a-2(a) under the 1940 Act.
(b) Certification of each of the principal executive officers and principal financial officers of the Registrant as required by Rule 30a-2(b) under the 1940 Act.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| BARON SELECT FUNDS |
| |
| By: | | /s/ Ronald Baron |
| | Ronald Baron |
| | Principal Executive Officer |
|
| Date: June 27, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By: | | /s/ Ronald Baron |
| | Ronald Baron |
| | Principal Executive Officer |
|
| Date: June 27, 2024 |
| |
| By: | | /s/ Christopher Snively |
| | Christopher Snively |
| | Principal Financial Officer |
|
| Date: June 27, 2024 |
