Baron Funds, an investment management company, released its “Baron Real Estate Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the first half of 2023, the fund rose 15.00% (Institutional Shares) compared to a 4.78% return for the MSCI US REIT Index (the “REIT Index”) and a 12.11% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The fund rose 7.41%, modestly outperforming the indexes in the second quarter, which returned 2.34% and 7.04%, respectively, in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like Toll Brothers, Inc. (NYSE:TOL) in the second quarter 2023 investor letter. Headquartered in Fort Washington, Pennsylvania, Toll Brothers, Inc. (NYSE:TOL) designs, builds, markets, and arranges finance for detached and attached homes in residential communities. On July 25, 2023, Toll Brothers, Inc. (NYSE:TOL) stock closed at $80.64 per share. One-month return of Toll Brothers, Inc. (NYSE:TOL) was 2.66%, and its shares gained 64.54% of their value over the last 52 weeks. Toll Brothers, Inc. (NYSE:TOL) has a market capitalization of $8.817 billion.
Baron Real Estate Fund made the following comment about Toll Brothers, Inc. (NYSE:TOL) in its second quarter 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc. (NYSE:TOL), Lennar Corporation, and D.R. Horton, Inc. – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:
- Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.
We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)
Monkey Business Images/Shutterstock.com
Toll Brothers, Inc. (NYSE:TOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our records, 37 hedge fund portfolios held Toll Brothers, Inc. (NYSE:TOL) at the end of first quarter which remained same as the previous quarter.
We discussed Toll Brothers, Inc. (NYSE:TOL) in another article and shared the list of best residential real estate stocks to buy. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 40 Countries With Highest Rates Of Poverty
- 30 Countries with the Highest Gas Prices
- 20 Most Popular Airlines in the World
Disclosure: None. This article is originally published at Insider Monkey.
