Baron Discovery Fund’s Q1 2026 Investor Letter

Baron Capital, an investment management company, released its Q1 2026 investor letter for the “Baron Discovery Fund”. It was a difficult quarter for Baron Discovery Fund, both on an absolute and relative basis. The Fund declined 10.65% (Institutional Shares) in the quarter, compared to the Russell 2000 Growth Index’s return of -2.81%. The underperformance of 7.88% was primarily attributed to sectors such as Information Technology, Consumer Discretionary, Health Care, and Industrials, along with a lack of exposure to Energy. The Fund sees the current SaaS-pocalypse as an opportunity to invest in compelling prospects among software companies that possess robust and sustainable competitive advantages. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

A copy of Baron Discovery Fund’s Q1 2026 investor letter can be downloaded here.