Baron Funds Annual Report

BenWP

https://www.baronfunds.com/sites/default/files/Baron-Funds-Quarterly-Report-12.31.20.pdf

The above report includes a fair amount of self-promotion from Ron Baron, but it is hard to argue with the numbers his funds have put up over the long and short hauls. My only experience with the company has been via BGAFX, the global all-cap growth entry. While I have not compared Baron’s apples with Morgan Stanley’s apples in a systematic manner, my initial conclusion is that both outfits have enviable records in growth mutual funds. Baron has even made a pile of dough for shareholders in Real Estate. I know that MS has its fans on MFO (I own a big slice of MGGPX) and the comment has been made that the MS growth funds deserve more attention. The same might be said for Baron. TSLA is a major holding in several of the funds and especially in the Partners Fund where it’s the 47% elephant in the living room. Some of the Baron funds were previously partnerships (hedge funds?) whose performance is included in the tabulations.

One Baron vehicle I just learned about is the WealthBuilder Fund (BWBIX/BWBFX), a fund of Baron funds that is said to charge no ER above and beyond the ERs of the constituents. This fund dates to 2017 and has profited handsomely from the mania for growth funds, but it has outshone all comers in the 85% and up allocation category. It could be a good choice for child or younger investor with a long horizon.

MikeW

Thanks very much for sharing this Ben. Will take a look.

stillers

@BenWP, thanks for posting. LT watcher of BGAFX but sadly never bought it. Finding a place for it (or BWBFX) in my port...today.

stillers

Bought some BGAFX today. It was my on my final WS BUY list but just never made the cut. Reduced VWIGX allocation to make room for it.

Thanks again to @BenWP for the thread/post.

sma3

I have been a Baron's shareholder for years, although I never went to his shareholder events every year where some Mega star shows up. Having said that I got nervous when his kids started showing up as fund mangers, and left five or ten years ago.

I did leave a chunk of my Daughter's IRA in BPRTX, although it is leveraged 30% and has had huge drawdowns (47% tin 2020 and 60% in 2009)

Having said that we just sold half because TSLA is 47% of the fund. Baron may have sold some TSLA, but so far this year BPRTX's return is 50% of TSLA; you would expect more if it is leveraged

I think his investment philosophy is sound, but letting a mutual fund to become nearly a one stock vehicle is too risky. We have all seen what happened with Sequoia and Fairholm when that happened.

I would start small and wait for a significant pullback, and only use money you won't need in 10 years.

stillers

@sma3 Great comments. ALWAYS interested in comments of LT holders of funds. TSLA and/or one huge holding is NOT an issue with BGFAX per its 12/31/20 holdings. The only item of note to me with it is its heavily overweighted technology allocation at ~41%. Did start slow on it. Expect that my current allocation is ~50% of what it ultimately will be by EOY.

JonGaltIII

I loved reading this EOY report. I’m going to take a closer look at the Wealthbuilders Fund of Funds. There’s a lot of meat in this report. I even liked it from a stylistic pov. Big fan of Buffet quotes too. I’m nervous about Tesla’s continued growth even though I think Musk is an absolute genius along with all of the PayPal mafia. But I once thought Amazon was too expensive... so what do I know? It’s why I prefer to stick with funds vs. individual stocks for the most part.