Baron Small to Mid Cap Growth Strategy
Symbol SMID
S-M
Small- to Mid-Cap GrowthTotal Strategy Assets
$286.67 M
As of 06/30/2024
Inception date
06/30/1999
Performance
PerformanceAs of 06/30/2024
Portfolio or Index | QTD | YTD | 1 Year | 3 Years | 5 Years | 10 Years | Since Inception 06/30/1999 |
---|---|---|---|---|---|---|---|
Baron Small to Mid Cap Growth Strategy (Net) | - | -1.57% | -0.04% | -5.26% | 13.50% | 11.39% | 9.46% |
Baron Small to Mid Cap Growth Strategy (Gross) | - | -1.18% | 0.78% | -4.54% | 14.39% | 12.25% | 10.36% |
Russell 2500 Growth Index | - | 3.93% | 9.02% | -4.11% | 7.58% | 8.77% | 7.84% |
Russell 3000 Index | - | 13.56% | 23.13% | 8.05% | 14.14% | 12.15% | 7.82% |
Performance InformationAs of 09/30/2024
Performance statistics | 3 Years | 5 Years | 10 Years | Since Inception |
---|---|---|---|---|
Standard Deviation (%) | 22.27 | 27.17 | 21.48 | 19.38 |
Sharpe Ratio | -0.28 | 0.49 | 0.52 | 0.41 |
Alpha (%) | -1.81 | 5.54 | 2.85 | 3.51 |
Beta | 0.95 | 1.08 | 1.01 | 0.76 |
R-Squared (%) | 88.20 | 83.49 | 84.27 | 74.76 |
Tracking Error (%) | 7.72 | 11.21 | 8.52 | 11.04 |
Information Ratio | -0.25 | 0.54 | 0.33 | 0.15 |
Upside Capture (%) | 92.87 | 115.74 | 104.09 | 86.61 |
Downside Capture (%) | 99.67 | 100.28 | 93.92 | 77.16 |
Except for Standard Deviation and Sharpe Ratio, the performance based-characteristics above were calculated relative to the Baron Small to Mid Cap Growth Strategy's benchmark Russell 2500 Growth Index. Performance statistics for additional periods will be provided on request. Source FactSet: SPAR.
Portfolio Holdings & Characteristics
HoldingsAs of 06/30/2024
Holding | Sector | % of Net Assets | |
---|---|---|---|
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 Discretionary | 10.8% | |
Arch Capital Group Ltd. Arch Capital Group Ltd. (ACGL) is a Bermuda-based insurance company providing property & casualty insurance, reinsurance, and mortgage insurance. Arch is led by an experienced management team with a successful track record across insurance cycles. The company excels at underwriting specialized policies and can nimbly shift its business mix to target the most profitable lines as market conditions change. It operates in a large global market and is currently benefiting from favorable pricing trends across many of its product lines. In our view, management has demonstrated strong underwriting discipline and capital stewardship, allowing Arch to maintain industry-leading returns on equity with less volatility. | Financials | 9.3% | |
Hyatt Hotels Corporation Hyatt Hotels Corporation (H) is a global hospitality company with 1,352 Hyatt-branded properties representing 325,507 keys. The company's brands include Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt Place, and Hyatt Summerfield Suite. It derives 85% of EBITDA from fees and 15% from owned assets. We believe Hyatt has a significant opportunity to market more of its brands globally, given an undersupply of rooms across the world. Compared to peers, Hyatt has the least global brand penetration and the largest pipeline of unit growth. We believe its asset light strategy and strong balance sheet, coupled with continued robust pricing for hotel assets, give Hyatt an opportunity to generate strong growth in earnings and cash flow. The resulting increased cash could be used for further buybacks and tuck-in acquisitions and could result in multiple expansion over time. | Consumer Discretionary | 9.3% | |
CoStar Group, Inc. CoStar Group, Inc. (CSGP) is the leading provider of information and marketing services to the commercial real estate industry. CoStar has built a proprietary database through data collection over a 20-year period, creating high barriers to entry. We think CoStar's suite should grow at mid-teens rates, and we believe its Loopnet marketing platform can grow even faster. Its Apartments.com platform is the dominant multi-family internet listing service and should grow revenue by more than 20%. CoStar is starting to expand into residential, creating additional significant growth opportunities. Its balance sheet and cash generation create M&A optionality. | Real Estate | 8.1% | |
FactSet Research Systems Inc. FactSet Research Systems Inc. (FDS) provides financial information to the global investment community. FactSet serves only a small part of the addressable market, which we estimate at roughly $20 billion annually. The company offers broader data sets and more advanced portfolio analytics than peers and has a highly regarded customer service model. FactSet has also been expanding into the fixed income and wealth management markets. Its products are sticky, leading to retention rates of over 95% and high visibility. It generates robust free cash flow, which it has returned to shareholders via share repurchases and dividends. | Financials | 4.7% | |
Gartner, Inc. Gartner, Inc. (IT) is the leading independent provider of research and advisory services for IT, HR, sales, finance, and marketing leaders. Gartner has a vast addressable market, which management estimates exceeds $70 billion annually, implying a penetration rate of less than 3%. IT is rapidly changing and growing in strategic importance, leading users to turn to third-party providers for insight into trends. Gartner enjoys retention rates of more than 100%, driven by the low price of its research relative to value. We think consistent execution in Global Technology Sales and improvements in Global Business Sales will help accelerate Research growth into the low double digits. | Information Technology | 4.6% | |
Choice Hotels International, Inc. Choice Hotels International, Inc. (CHH) is one of the world's largest hotel franchisors, with brands in the economy, midscale, and upscale segments. Its contracts are long term, with many as long as 20 years. Brands include Quality Inn, Comfort Inn, Cambria Suites, Ascend, Radisson, and Everhome. Choice has a strong franchising business with recurring revenue. It has demonstrated consistent profitability across cycles through increased room prices, occupancy, and royalty rates as well as new unit growth. It has a solid pipeline of new hotel franchisee contracts in revenue-intense segments and is actively expanding the number of upscale brands in its portfolio. Choice recently expanded its buyback program to 14% of its outstanding shares. | Consumer Discretionary | 4.4% | |
MSCI Inc. MSCI Inc. (MSCI) provides investment decision support tools to global investment institutions. We believe MSCI, the de facto standard for measuring global market performance, is positioned to benefit from the continuing development of emerging markets, passive investing, ESG, and the growth of global financial assets. We believe the company's indices remain the global standard for cross-border investing and will continue to be selected by institutions when issuing new mandates. Both the index and multi-asset portfolio and risk analytics products are mission-critical and deeply embedded in client workflows. | Financials | 4.3% | |
Primerica, Inc. Primerica, Inc. (PRI) is a leading provider of term life insurance and investment products to middle income households in the U.S. and Canada. As the responsibility for retirement savings increasingly shifts to individuals, Primerica serves a growing need for financial planning in the underserved middle income customer segment. Primerica has a variable-cost, multi-level distribution model that uniquely positions it to reach customers in a cost-efficient manner. The company is growing its sales force and increasing productivity, leading to higher sales and asset-based fees. Primerica generates significant excess capital, which is being returned to shareholders through share repurchases and dividends. | Financials | 3.3% | |
Verisk Analytics, Inc. Verisk Analytics, Inc. (VRSK) provides risk information to insurance companies that enables them to better understand and manage their risks and optimize their decision-making processes. We believe Verisk has a unique competitive position. The company is investing to expand its product set in Insurance and has divested its Financial Services and Energy segments. We think the pure-play focus on insurance offers an attractive financial profile with mid/high single-digit organic growth, robust margins (with room for expansion), and strong free cash flow generation. | Industrials | 3.2% | |
Total Total | 62.1% |
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.
Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk.
Contributors / DetractorsQuarterly as of 09/30/2024
Top Contributors | Average Weight | Contribution |
---|---|---|
Tesla, Inc. | 11.87% | 3.48% |
Arch Capital Group Ltd. | 9.21% | 1.03% |
MSCI Inc. | 4.62% | 0.93% |
Guidewire Software, Inc. | 2.88% | 0.88% |
Kinsale Capital Group, Inc. | 3.41% | 0.70% |
Source: FactSet PA. Based on the gross performance results of the representative account.
GICS Sector BreakdownAs of 06/30/2024
Sector
Consumer Discretionary
36.0%
Financials
28.4%
Real Estate
12.5%
Information Technology
9.9%
Industrials
5.8%
Health Care
4.7%
Cash & Cash Equivalents
2.1%
Communication Services
0.5%
Sub-Industry
06/30/2024Hotels, Resorts & Cruise Lines14.30%
Property & Casualty Insurance12.50%
Financial Exchanges & Data10.90%
Automobile Manufacturers10.80%
Real Estate Services 8.10%
Application Software5.30%
IT Consulting & Other Services4.60%
Life Sciences Tools & Services4.50%
Life & Health Insurance3.30%
Casinos & Gaming3.20%
Research & Consulting Services3.20%
Leisure Facilities3.00%
Other Specialized REITs 2.70%
Aerospace & Defense2.60%
Restaurants2.30%
03691215
Hotels, Resorts & Cruise Lines14.30%
Property & Casualty Insurance12.50%
Financial Exchanges & Data10.90%
Automobile Manufacturers10.80%
Real Estate Services 8.10%
Application Software5.30%
IT Consulting & Other Services4.60%
Life Sciences Tools & Services4.50%
Life & Health Insurance3.30%
Casinos & Gaming3.20%
Research & Consulting Services3.20%
Leisure Facilities3.00%
Other Specialized REITs 2.70%
Aerospace & Defense2.60%
Restaurants2.30%
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Portfolio CharacteristicsAs of 06/30/2024
Description | Baron Small to Mid Cap Growth Strategy | Russell 2500 Growth Index |
---|---|---|
Inception Date | June 30, 1999 | |
# of Issuers / % of Net Assets | 30 / 97.9% | |
Turnover (3 Year Average) | 7.20% | |
Active Share | 97.8% | |
Median Market Cap | $12.51 billion | $1.61 billion |
Weighted Average Market Cap | $90.41 billion | $8.33 billion |
EPS Growth (3-5 year forecast) | 21.5% | 17.8% |
Price/Earnings Ratio (trailing 12-month) | 22.4 | 21.2 |
Price/Book Ratio | 4.0 | 4.3 |
Price/Sales Ratio | 3.9 | 1.9 |
Total Strategy Assets | $286.67 million |
Price/Book Ratio and Price/Sales Ratio are calculated using the Weighted Harmonic Average. Source: FactSet PA. Internal valuation metrics may differ.