Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Durable Advantage Fund”. A copy of the letter can be downloaded here. The Fund returned 2.6% in the fourth quarter, which mirrored the S&P 500 Index’s 2.7% return. The Fund returned 16.6% in 2025, compared to 17.9% for the Index and 16.1% gain for the Peer Group, Morningstar Large Growth Category average. Moving to 2026, in an environment dominated by geopolitics, changing regulatory trends, and artificial intelligence, the Fund focuses on investing in high-quality, large-cap companies with solid competitive advantages, proven track record, and consistent shareholder returns. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Durable Advantage Fund highlighted stocks like MSCI Inc. (NYSE:MSCI). MSCI Inc. (NYSE:MSCI) is a leading financial services company that provides indexes and investment decision support tools. On February 11, 2026, MSCI Inc. (NYSE:MSCI) stock closed at $511.84 per share. One-month return of MSCI Inc. (NYSE:MSCI) was -14.31%, and its shares are down 10.56% over the past twelve months. MSCI Inc. (NYSE:MSCI) has a market capitalization of $38.459 billion.
Baron Durable Advantage Fund stated the following regarding MSCI Inc. (NYSE:MSCI) in its fourth quarter 2025 investor letter:
“Within the existing portfolio, our biggest addition during the quarter was to MSCI Inc. (NYSE:MSCI), a leading provider of indexes and investment decision support tools. While the stock outperformed most of its information services peers in 2025, it lagged the broader markets due primarily to information services companies being perceived as potential AI losers. Specific to MSCI, the company reported steady financial results throughout the year, but did call out some lingering pressure in the asset manager end market (around half of MSCI’s total business) and so some investors are likely waiting to see a reacceleration in net new sales.
From an AI perspective, we see MSCI as relatively well positioned with CEO Henry Fernandez recently saying that “AI is a godsend to us”8 . MSCI has vast amounts of proprietary data and analytics, and nearly everything MSCI sells to customers is proprietary in nature. The index business is further insulated by the nature of its benchmark status where it serves as a trusted common language for industry participants. MSCI should also benefit from AI through increased efficiencies in data collection, which will enable the company to both increase margins and invest more into new product development…” (Click here to read the full text)
MSCI Inc. (NYSE:MSCI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 50 hedge fund portfolios held MSCI Inc. (NYSE:MSCI) at the end of the third quarter, compared to 65 in the previous quarter. While we acknowledge the risk and potential of MSCI INC. (NYSE:MSCI) 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 MSCI INC. (NYSE:MSCI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered MSCI INC. (NYSE:MSCI) and shared a list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 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.
