Baron Capital, an investment management company, released its Q2 2026 investor letter for the “Baron Health Care Fund”. A copy of the letter is available to download here. The Fund gained 11.99% during the quarter, compared with the 10.48% gain for the Russell 3000 Health Care Index and the 15.44% gain for the Russell 3000 Index. Since inception, the Fund appreciated 10.61% on an annualized basis, compared with 10.02% for the Benchmark and 14.83% for the Index. Strong stock selection in pharmaceuticals, biotechnology, health care equipment, and life sciences tools and services supported the Fund’s outperformance, although limited exposure to managed care stocks reduced relative returns. The Fund remains positive on health care due to improving biotechnology funding, strong acquisition activity, recovering managed care margins, and growth from an aging population, chronic disease, medical innovation, and higher health care spending. In addition, please check the Fund’s top five holdings to know the best picks in 2026.
In its second-quarter 2026 investor letter, Baron Health Care Fund highlighted Insmed Incorporated (NASDAQ:INSM). Insmed Incorporated (NASDAQ:INSM), which develops and commercializes therapies for patients with serious and rare diseases, detracted from the fund’s performance during the quarter. On August 03, 2026, Insmed Incorporated (NASDAQ:INSM) closed at $98.45 per share. The one-month return of Insmed Incorporated (NASDAQ:INSM) was -12.56%, and its shares lost 11.59% over the past 52 weeks. Insmed Incorporated (NASDAQ:INSM) has a market capitalization of $21.34 billion.
Baron Health Care Fund stated the following regarding Insmed Incorporated (NASDAQ:INSM) in its Q2 2026 investor letter:
“Insmed Incorporated is a biotechnology company with three lead pulmonology assets that we believe can collectively generate more than $8 billion in peak sales. We are particularly excited about Brinsupri for non-cystic fibrosis bronchiectasis, which we view as a $5 billion-plus opportunity. Despite what we believe has been a strong start to the launch, shares fell after first quarter Brinsupri sales missed expectations as investors focused on early signs of higher treatment discontinuations. Insmed’s exit from the Nasdaq-100 Index created additional technical selling pressure. Long term, we continue to view Brinsupri as an important treatment option for the 500,000-plus bronchiectasis patients in the U.S. We remain bullish on the portfolio’s long-term fundamentals, including the opportunity for treprostinil palmitil inhalation powder (TPIP), which is being studied for pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease. Compared to existing inhaled prostanoids that require four daily treatments, once-daily TPIP is more convenient and can be dosed at significantly higher levels, potentially resulting in meaningfully better efficacy.”
Insmed Incorporated (NASDAQ:INSM) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Insmed Incorporated (NASDAQ:INSM) at the end of the first quarter which was 75 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 Clearbridge Small Cap Growth Strategy’s views on the company. In its Q2 2026 investor letter, Carillon Eagle Mid Cap Growth Fund discussed Insmed Incorporated (NASDAQ:INSM) and noted that it fell during the quarter because BRINSUPRI® sales disappointed investors, as they did not meet the more aggressive bullish expectations. In addition, please check out our hedge fund investor letters Q2 2026 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.
