Baron Asset Fund recently published its first-quarter commentary – a copy of which can be downloaded here. During the first quarter of 2020, the Baron Asset Fund returned -16.63% (institutional shares). In comparison, the benchmark S&P 500 Index was down 19.60%, while the Russell Midcap Growth Index was down 20.04%.
In the said letter, Baron Asset Fund highlighted a few stocks and Arch Capital Group Ltd. (NASDAQ:ACGL) is one of them. Year-to-date, ACGL stock lost 44.8% and on May 5th it had a closing price of $23.74. Its market cap is of $9.7 billion. Here is what Baron Asset Fund said:
“Arch Capital Group Ltd. is a specialty insurance company based in Bermuda. The company reported better-than-expected quarterly earnings with its book value per share gaining 23%. However, the stock underperformed over concerns that widespread business closures due to the COVID-19 pandemic could cause higher losses for business interruption and event cancellation insurance policies. A recession could also cause higher losses for its economically sensitive mortgage insurance business.”
In Q4 2019, the number of bullish hedge fund positions on ACGL stock increased by about 5% from the previous quarter (see the chart here).
Disclosure: None. This article is originally published at Insider Monkey.