Baron Capital, an investment management company, released its Q2 2026 letter for "Baron Partners Fund". A copy of the letter can be downloaded here. Baron Partners Fund reported a 16.61% (Institutional Shares) gain in Q2, outperforming both the Russell Midcap Growth Index (14.55%) and the Russell 3000 Index (15.44%).
Year-to-date, it has returned 10.40%, exceeding the Russell Midcap Growth Index's 7.27%. Its one-year return is at 48.75%, significantly ahead of the Index (6.17%) and the Market Index (22.82%). The Fund has consistently outperformed the Index in 4 out of the last 5 years.
With a focus on a concentrated portfolio, the Fund invests in 28 companies, primarily in the top 10 positions, which account for 74.1% of total investments. The median market capitalization of these companies is $20.9 billion. The strategy focuses on growth businesses expected to double in value within 5-6 years, utilizing proprietary research to ensure competitive advantages and sustainable growth opportunities, while employing leverage for enhanced returns and increased volatility.
Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026. In its Q2 2026 investor letter, Baron Partners Fund highlighted FactSet Research Systems Inc. (NYSE:FDS) a leading financial data company that provides integrated financial information and analytical applications for the investment community. FactSet Research Systems Inc. (NYSE:FDS) rose 6.34% in the quarter and contributed 0.31% to the Fund's performance.
On August 14, 2026, FactSet Research Systems Inc. (NYSE:FDS) closed at $283.49 per share, reflecting a market capitalization of $10.08 billion. FactSet Research Systems Inc. (NYSE:FDS) posted a one‑month return of 10.83%, while its shares lost 23.62% over the past 52 weeks." Baron Partners Fund stated the following regarding FactSet Research Systems Inc. (NYSE:FDS) in its Q2 2026 investor letter: "FactSet Research Systems Inc. (NYSE:FDS) is a leading provider of financial data, analytics, and technology solutions to investment professionals globally. The shares came under pressure as investors continued to discount the business for perceived AI disruption risk.
We believe the market significantly understates FactSet's positioning as AI becomes more deeply embedded in financial workflows, and in our view, FactSet is becoming critical AI infrastructure for the industry. FactSet has grown its organic annual subscription value 7% over the past year. CEO Sanoke Viswanathan noted on the most recent earnings call that momentum has continued.
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