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Baron High Growth Strategy

Symbol HIGH
A
All-Cap Growth

Total Strategy Assets

$1.41 B

As of 12/31/2024

Inception date

06/30/2000

Performance

PerformanceAs of 12/31/2024

Portfolio or IndexQTDYTD1 Year3 Years5 Years10 YearsSince Inception 06/30/2000
Baron High Growth Strategy (Net)-40.20%40.20%6.48%20.67%18.23%10.97%
Baron High Growth Strategy (Gross)-41.57%41.57%7.53%21.86%19.38%12.26%
Russell 3000 Growth Index-32.46%32.46%9.93%18.25%16.22%7.69%
S&P 500 Index-25.02%25.02%8.94%14.53%13.10%7.88%

Performance InformationAs of 12/31/2024

Performance statistics3 Years5 Years10 Years
Standard Deviation (%)25.2424.4820.79
Sharpe Ratio0.100.740.79
Alpha (%)-3.971.230.62
Beta1.161.091.11
R-Squared (%)89.9884.4684.24
Tracking Error (%)8.689.838.46
Information Ratio-0.400.250.24
Upside Capture (%)108.09107.38111.14
Downside Capture (%)122.88103.33110.22
Except for Standard Deviation and Sharpe Ratio, the performance based-characteristics above were calculated relative to the Baron High Growth Strategy's benchmark Russell 3000 Growth Index. Performance statistics for additional periods will be provided on request. Source FactSet: SPAR.

Portfolio Holdings & Characteristics

HoldingsAs of 01/31/2025

HoldingSector% of Net Assets
Microsoft Corporation
Microsoft Corporation (MSFT) is a software company traditionally known for its Windows and Office products. Over the last five years, it has built a $120 billion-plus annual cloud business, including Office 365, CRM product Dynamics 365, and infrastructure-as-a-service product Azure.
Over the past decade, Microsoft has transformed itself, refocusing the business on cloud computing and AI. Microsoft's commercial cloud business now represents over 56% of revenue and is growing around 25% year-on-year. Its moat is built on the wide reach of its sales channel, its diverse platform of software offerings, its hybrid cloud capabilities, and the high costs of switching away from its solutions, which tend to be mission critical for customers. We believe Microsoft will benefit from the growing adoption of cloud for years to come.
Information Technology10.0%
NVIDIA Corporation
NVIDIA Corporation (NVDA) sells semiconductors, systems, and software for accelerated computing, gaming, and generative AI (GenAI).
Computing demand has been doubling every one to two years, driven by electrification, digitization, and recent advancements in AI, yet supply growth has decelerated dramatically due to the slowdown in Moore's law. NVIDIA’s accelerated computing architecture enables continued growth in supply of computing through parallelization. We are at the tipping point of a new era in computing, with NVIDIA at its epicenter as GenAI adoption grows. Given its leading market share in gaming, data centers, and autonomous machines, we believe NVIDIA can grow rapidly for years to come.
Information Technology9.5%
Amazon.com, Inc.
Amazon.com, Inc. (AMZN) is an e-commerce pioneer, innovator, and market share leader with a relentless focus on providing value and convenience to its customers. Amazon also operates the industry-leading cloud infrastructure business Amazon Web Services (AWS).
Amazon's market share of U.S. online retail sales is around 40%, while its share of global retail sales is less than 5%. Amazon has many avenues for revenue growth, including consumer staples, apparel, international expansion, digital media offerings, private label, pharmacy services, advertising, and a better shopping experience powered by generative AI. Amazon also represents an opportunity to invest in the secular growth of cloud computing through AWS, a large, growing, margin-accretive part of the business.
Consumer Discretionary7.2%
Tesla, Inc.
Tesla, Inc. (TSLA) manufactures electric vehicles, including a luxury sedan and CUV (S/X), a mid-sized luxury sedan and hatchback (3/Y), and pickup and semi-trucks. It is also ramping up internal battery cell production, energy solutions, and software offerings such as full self-driving and insurance.
We expect Tesla will continue to grow its automotive business through international production capacity and product expansion. Tesla's vertical integration, technology innovation, brand, profitability, and growing supplier support offer unique and durable growth opportunities that are hard to replicate. In addition, Tesla's energy and software expertise is broadening the industrial opportunity to large and profitable revenue avenues that were previously locked in the legacy vehicle architecture, such as autonomous driving, robotics, insurance, and other AI use cases.
Consumer Discretionary5.6%
Meta Platforms, Inc.
Meta Platforms, Inc. (META) owns Facebook, the world's largest social network, with over 3.0 billion monthly and over 2.1 billion daily active users. Instagram, Messenger, WhatsApp, and Oculus are also part of the Meta Platforms network, with over 3.2 billion total daily unique users across Meta products.
Meta owns unique social platforms with users that continue to demonstrate stickiness and high engagement. Advertisers want to be where users are, and Meta's ability to analyze, target, and show clear, demonstrable, and rising returns on investment makes the platform particularly attractive to them. We believe the company has significant room to further monetize its vast customer base, especially internationally. In addition, we see significant positive optionality from monetization opportunities in video, WhatsApp, business messaging, and generative AI features.
Communication Services5.3%
Broadcom Inc.
Broadcom Inc. (AVGO) designs, develops, and supplies a wide range of semiconductor and infrastructure software solutions. Its semiconductor devices serve broadband, networking, wireless, storage, and industrial markets, while its software offerings focus on operational efficiency tools for large enterprises.
Broadcom’s semiconductor portfolio is reaching an inflection point, driven by its AI solutions in networking and custom compute. We expect Broadcom to tap into most of the $75 billion total addressable market in AI across its three largest customers by 2027 and to grow VMware at a high-teens rate over the next few years. The rest of Broadcom’s semiconductor business is recovering, and we expect other software segments to grow at a mid-single-digit rate. The company has best-in-class margins and cash flow, which it returns to shareholders.
Information Technology4.9%
Space Exploration Technologies Corp.
Space Exploration Technologies Corp. (SPACEX.A) designs, manufactures, and launches rockets, satellites, and spacecrafts. Its ultimate goal is to make humanity multi-planetary. Products include reusable orbital launch offerings and a broadband service leveraging its satellite constellation, Starlink.
We believe SpaceX will continue to drive down the cost of space launches and capture market share with its unique, reliable, and improving reusable launch capabilities. As costs decline, we also expect demand for access to space to increase. By leveraging its launch cost leadership, vertical integration, and innovative design approach, we think SpaceX will have an advantage in building and operating its rapidly expanding satellite-based broadband services, creating an even more attractive growth profile for the company.
Industrials4.3%
Apple Inc.
Apple Inc. (AAPL) designs, manufactures, and markets consumer electronics, computer software, and online services. Its products include the iPhone, iPad, Mac personal computer, Apple smartwatch, Apple TV, and HomePod. It also offers advertising and app discovery services through its App Store.
As the creator and owner of one of the largest and most popular consumer electronics platforms, Apple, in our view, is well positioned to benefit from the network effect that typically accrues to platform companies. It has a large and growing ecosystem, a trusted brand, and positive optionality through leveraging its large installed base to expand into additional consumer and enterprise services. We believe Apple trades at a discount to our estimate of its intrinsic value, with capital return and growth alleviating near-term trade and iPhone demand uncertainty.
Information Technology4.0%
Spotify Technology S.A.
Spotify Technology S.A. (SPOT) is the world's leading music streaming service, with approximately 40% market share. The company monetizes through several tiers of subscriptions, advertising, and miscellaneous a la carte pricing. 
With over 252 million paying subscribers, Spotify has created a two-sided marketplace where creators can monetize their work and consumers can stream music. Longer term, we expect the company to grow to over 1 billion subscribers (from 640 million today) and improve margins materially through advertising, its artist promotions marketplace, and improved cost discipline. On the product side, we expect Spotify to continually improve its value proposition through additional features and expansion into adjacencies such as audiobooks.
Communication Services3.7%
argenx SE
Argenx SE (ARGX) is a biotechnology company developing antibodies for the treatment of autoimmune disorders. The company is in the early years of the commercial launch of its drug Vyvgart (efgartigimod alfa) for a rare muscle weakness disorder.
Efgartigimod has potentially broad applicability in ameliorating overactive antibody-based diseases. Efgartigimod is a true "pipeline in a product," where the product itself is the platform, as it has the potential to be used against a diverse range of diseases—something that is rarely achieved in the biotechnology space. We expect the share price to increase as argenx proves its product’s effectiveness in multiple autoantibody disorders.
Health Care2.7%
Total
Total
57.2%
Top Ten Holdings, Portfolio Holdings, and Sector Breakdown based on net assets. Positions smaller than 0.05% round to 0.0%. Portfolio holdings may change over time.
Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk.

Contributors / DetractorsQuarterly as of 12/31/2024

Top ContributorsAverage WeightContribution
Tesla, Inc.5.12%2.32%
NVIDIA Corporation12.18%1.59%
Space Exploration Technologies Corp.2.82%1.50%
Broadcom Inc.4.52%1.35%
Amazon.com, Inc.6.82%1.17%
Source:  FactSet PA.  Based on the gross performance results of the representative account. 

GICS Sector BreakdownAs of 01/31/2025

Sector

Information Technology

54.0%

Consumer Discretionary

14.1%

Communication Services

10.3%

Health Care

6.9%

Financials

5.4%

Industrials

5.4%

Real Estate

2.2%

Cash & Cash Equivalents

1.0%

Consumer Staples

0.5%

Materials

0.2%

Sub-Industry

01/31/2025
Semiconductors17.40%
Systems Software14.00%
Application Software10.40%
Broadline Retail 7.20%
Automobile Manufacturers5.60%
Interactive Media & Services5.40%
Aerospace & Defense4.30%
Biotechnology4.10%
Technology Hardware, Storage & Peripherals4.00%
Transaction & Payment Processing Services 3.80%
Movies & Entertainment3.70%
Internet Services & Infrastructure3.10%
IT Consulting & Other Services2.20%
Real Estate Services 2.20%
Health Care Equipment1.50%
0369121518
Semiconductors17.40%
Systems Software14.00%
Application Software10.40%
Broadline Retail 7.20%
Automobile Manufacturers5.60%
Interactive Media & Services5.40%
Aerospace & Defense4.30%
Biotechnology4.10%
Technology Hardware, Storage & Peripherals4.00%
Transaction & Payment Processing Services 3.80%
Movies & Entertainment3.70%
Internet Services & Infrastructure3.10%
IT Consulting & Other Services2.20%
Real Estate Services 2.20%
Health Care Equipment1.50%
0369121518

Portfolio CharacteristicsAs of 06/30/2024

DescriptionBaron High Growth StrategyRussell 3000 Growth Index
Inception DateJune 30, 2000
# of Equity Securities / % of Net Assets42 / 98.6%
Turnover (3 Year Average)28.66%
Active Share54.7%
Median Market Cap$54.14 billion$2.24 billion
Weighted Average Market Cap$1.36 trillion$1.45 trillion
EPS Growth (3-5 year forecast)26.3%19.3%
Price/Earnings Ratio (trailing 12-month)50.634.0
Price/Book Ratio8.28.3
Price/Sales Ratio8.64.1
Total Strategy Assets$1.41 billion
Price/Book Ratio and Price/Sales Ratio are calculated using the Weighted Harmonic Average. Source: FactSet PA. Internal valuation metrics may differ.