Baron Capital, an investment management company, released its Q1 2026 investor letter for the “Baron Focused Growth Fund”. A copy of the letter can be downloaded here. The Baron Focused Growth Fund® (the Fund) experienced a challenging start to 2026, declining 4.99% (Institutional Shares) compared to a 3.52% drop in the Russell 2500 Growth Index (the Benchmark). Concerns regarding the influence of AI on the portfolio and the potential effects of the conflict in Iran on inflation, interest rates, and consumer spending have impacted the Fund’s performance this quarter. The Fund continues to focus on long-term investments in growth-oriented businesses with competitive advantages and manages a balanced portfolio of uncorrelated businesses to reduce risk and aim for strong excess returns. As of March 31, 2026, the top 10 holdings represented 58.4% of net assets. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Baron Focused Growth Fund highlighted stocks like On Holding AG (NYSE:ONON). On Holding AG (NYSE:ONON) is a Swiss Athletic company specializing in sports products. On April 24, 2026, On Holding AG (NYSE:ONON) closed at $36.25 per share. One-month return of On Holding AG (NYSE:ONON) was 13.71%, and its shares lost 22.19% over the past 52 weeks. On Holding AG (NYSE:ONON) has a market capitalization of $12 billion.
Baron Focused Growth Fund stated the following regarding On Holding AG (NYSE:ONON) in its Q1 2026 investor letter:
“Premium footwear and apparel brand On Holding AG (NYSE:ONON) detracted from performance as shares came under pressure from foreign exchange headwinds and heightened uncertainty surrounding management changes. The recent devaluation of the U.S. dollar is expected to slow reported results, even as management reiterated its outlook for 2026 foreign-exchange-neutral revenue growth of 23%. Leadership turnover also weighed on sentiment, with co founders David Allemann and Caspar Coppetti returning to serve as co-chief executive officers while Martin Hoffmann steps down. Despite these near-term pressures, the company continued to deliver strong fundamental results. In the fourth quarter of 2025, On generated constant-currency revenue growth of more than 30% as it continued to capture additional market share through its premium, differentiated product lineup, which is expanding beyond footwear into accessories and apparel. Margins also exceeded expectations. We maintain long-term conviction in On’s ability to innovate and strengthen its position within the secularly attractive global sportswear market.”
On Holding AG (NYSE:ONON) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 51 hedge fund portfolios held On Holding AG (NYSE:ONON) at the end of the fourth quarter, compared to 52 in the previous quarter. While we acknowledge the risk and potential of On Holding AG (NYSE:ONON) 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 On Holding AG (NYSE:ONON) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered On Holding AG (NYSE:ONON) and shared the list of stocks Jim Cramer discussed. In its Q4 2025 investor letter, Baron Focused Growth Fund shared positive outlook look on On Holding AG (NYSE:ONON) highlighting its strong brand, premium positioning and innovation capabilities. In addition, please check out our hedge fund investor letters Q1 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.
