Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Insmed Incorporated (NASDAQ:INSM). Insmed Incorporated (NASDAQ:INSM) is a biopharmaceutical company that develops therapeutic products for patients with serious and rare diseases. The one-month return of Insmed Incorporated (NASDAQ:INSM) was 11.47%, and its shares gained 110.54% of their value over the last 52 weeks. On October 31, 2025, Insmed Incorporated (NASDAQ:INSM) stock closed at $161.38 per share, with a market capitalization of $34.112 billion.
Baron Health Care Fund stated the following regarding Insmed Incorporated (NASDAQ:INSM) in its third quarter 2025 investor letter:
“Insmed Incorporated (NASDAQ:INSM) is a biotechnology company developing therapies for serious pulmonary diseases, with three lead drug candidates that collectively have the potential to generate more than $8 billion in peak sales. Shares rose during the quarter following the U.S. approval of Brinsupri for non-cystic fibrosis bronchiectasis, a condition affecting an estimated 500,000 patients in the U.S. that is often misdiagnosed as asthma or chronic obstructive pulmonary disease, representing a $5 billion plus opportunity given the lack of approved treatments. We are also optimistic about treprostinil palmitil inhalation powder (TPIP), a once-daily prostanoid in development for pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease. Unlike existing inhaled prostanoids— currently a $2 billion–plus market requiring four daily doses—TPIP can be administered once a day at higher doses, which we think will result in improved efficacy with fewer side effects.”
Insmed Incorporated (NASDAQ:INSM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 82 hedge fund portfolios held Insmed Incorporated (NASDAQ:INSM) at the end of the second quarter, which was 64 in the previous quarter. While we acknowledge the risk and potential of Insmed Incorporated (NASDAQ:INSM) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Insmed Incorporated (NASDAQ:INSM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Insmed Incorporated (NASDAQ:INSM) and shared the list of stocks with outstanding gains. Insmed Incorporated (NASDAQ:INSM) contributed to Artisan Mid Cap Fund’s performance during the third quarter of 2025. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
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