Baron Funds, an investment management company, released its “Baron Asset Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund appreciated 5.34% in the first quarter, trailing the Russell Midcap Growth Index, which returned 9.14%. Stock selection drove the fund to underperform in the quarter. IT, Communication Services, and Consumer Discretionary were the strongest performing sectors, while Energy and Financials were the principal laggards. Furthermore, defensive-oriented sectors, Health Care, Utilities, and Consumer Staples also struggled in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Asset Fund highlighted stocks like The Charles Schwab Corporation (NYSE:SCHW) in the first quarter 2023 investor letter. Headquartered in Westlake, Texas, The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company. On May 1, 2023, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $51.81 per share. One-month return of The Charles Schwab Corporation (NYSE:SCHW) was 3.62%, and its shares lost 25.41% of their value over the last 52 weeks. The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $94.227 billion.
Baron Asset Fund made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q1 2023 investor letter:
“Shares of online brokerage firm The Charles Schwab Corporation (NYSE:SCHW) declined during the quarter following the failure of SVB that led to weakness in Financials generally and particularly in regional banks. We do not believe Schwab is at any risk of a potential solvency issue (or run on the bank). Despite running a much different business than SVB, Schwab is facing near-term deposit pressure through cash sorting in the wake of SVB’s collapse. As interest rates rose, Schwab customers continued to move their uninvested cash balances into higher-yielding money market funds. As cash balances at Schwab decrease, the company may need to raise short-term external funding, which is more costly than the customer cash balances being depleted. This trend has pressured its earnings estimates and contributed to the recent share price weakness. Nevertheless, we retain long-term conviction in the value of Schwab’s franchise. Despite dislocation in the financial system, Schwab saw accelerating net inflows year-to-date, gathering over $75 billion in new assets in just the first two months of 2023. We remain encouraged by the firm’s exceptional client loyalty levels, robust organic growth, and industry-leading operating expense per client assets. Schwab remains well positioned to retain client assets and increase long-term earnings growth, in our view.”
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The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds.As per our database, 74 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the fourth quarter which was 75 in the previous quarter.
We discussed The Charles Schwab Corporation (NYSE:SCHW) in another article and shared the list of best May dividend stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 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.
