-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sjah8LhOdKcn8aSEkePTCV4F5pkH5RqOkqAR/I3YIm9Wn9o/JtqoNra1Ekv4XBc1 P2bex8J2oVeJ/gs3JrpwYw== 0001017918-05-000100.txt : 20050611 0001017918-05-000100.hdr.sgml : 20050611 20050609164527 ACCESSION NUMBER: 0001017918-05-000100 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050331 FILED AS OF DATE: 20050609 DATE AS OF CHANGE: 20050609 EFFECTIVENESS DATE: 20050609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARON INVESTMENT FUNDS TRUST (f/k/a BARON ASSET FUND) CENTRAL INDEX KEY: 0000810902 IRS NUMBER: 136891420 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-05032 FILM NUMBER: 05887920 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVE STREET 2: 49TH FL CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2125832000 MAIL ADDRESS: STREET 1: 767 FIFTH AVE STREET 2: 49TH FL CITY: NEW YORK STATE: NY ZIP: 10153 FORMER COMPANY: FORMER CONFORMED NAME: BARON ASSET FUND DATE OF NAME CHANGE: 19920703 N-CSR 1 semiannualreport0305.txt SEMI-ANNUAL REPORT FOR BARON INVESTMENT FUNDS TRUST FOR THE PERIOD 03/31/05 UNITED STATES OMB APPROVAL SECURITIES AND EXCHANGE COMMISSION OMB Number: 3235 -0570 Washington, D.C. 20549 Expires: September 30, 2007 Estimated average burden hours per response... 19.4 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-5032 BARON INVESTMENT FUNDS TRUST f/k/a BARON ASSET FUND - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 767 Fifth Avenue, 49th Floor New York, NY 10153 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Linda S. Martinson, Esq. c/o Baron Investment Funds Trust 767 Fifth Avenue,49th Floor New York, New York 10153 - -------------------------------------------------------------------------------- (Name and Address of Agent for Service) Registrant's Telephone Number, including Area Code 212-583-2000 ----------------------------- Date of fiscal year end: September 30 --------------- Date of reporting period: March 31, 2005 -------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17CRF 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 5th Street, NW, Washington, D.C. 20549-6009. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 2569 (3-03) Item 1. Report to Stockholders Pursuant to Rule 30e-1 under the Investment Company Act of 1940 (the "1940 Act") attached if the Baron Investment Funds Trust Semi-Annual Report for the period ended March 30, 2005. [Registered Logo] B A R O N F U N D S (r) BARON FUNDS STATEMENT OF NET ASSETS.......................................................3 STATEMENTS OF ASSETS AND LIABILITIES............................................................14 STATEMENTS OF OPERATIONS.................................................................15 STATEMENTS OF CHANGES IN NET ASSETS..............................................................16 NOTES TO FINANCIAL STATEMENTS.................................................................17 767 Fifth Avenue NY, NY 10153 212.583.2100 1.800.99.BARON BaronFunds.com SEMI-ANNUAL FINANCIAL REPORT MARCH 31, 2005 DEAR BARON FUNDS SHAREHOLDER: Attached you will find unaudited financial statements for Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity Fund, and Baron Fifth Avenue Growth Fund for the six months ended March 31, 2005. The Securities and Exchange Commission requires mutual funds to furnish these statements semi-annually to their shareholders. We thank you for choosing to join us as fellow shareholders in Baron Funds. We will continue to work hard to justify your confidence. Sincerely, /s/ Ronald Baron Ronald Baron CEO and Chief Investment Officer May 25, 2005 /s/ Peggy Wong Peggy Wong Treasurer and CFO May 25, 2005 A description of the Funds' proxy voting policies and procedures is available without charge on the Funds' website, www.BaronFunds.com, or by calling 1-800- 99-BARON and on the SEC's website at www.sec.gov. The Funds' most current proxy voting record, Form N-PX, is also available on the Funds' website, www.BaronFunds.com and on the SEC's website at www.sec.gov. The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC's website at www.sec.gov. The Funds' Form N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC; information on the operation of the SEC's Public Reference Room may be obtained by calling 800-SEC-0330. - --------------- PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and principal value of an investment will fluctuate; an investor's shares, when redeemed, may be worth more or less than their original cost. BARON FUNDS - -------------------------------------------------------------------------------- FUND EXPENSES (UNAUDITED) - -------------------------------------------------------------------------------- As a shareholder of the Fund, you may incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include advisory fees, distribution and service (12b-1) fees and other Fund expenses. Transaction costs, as in the case of Baron iOpportunity Fund, may include redemption fees. The information on this page is intended to help you understand your ongoing costs of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. This Example is based on an investment of $1,000 invested on October 1, 2004 and held for six months ended March 31, 2005. ACTUAL EXPENSES The table below titled "Based on Actual Total Return" provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading titled "Expenses Paid During the Period". BASED ON ACTUAL TOTAL RETURN*
BEGINNING ENDING ANNUALIZED EXPENSES ACTUAL TOTAL ACCOUNT VALUE ACCOUNT VALUE EXPENSE PAID DURING RETURN OCTOBER 1, 2004 MARCH 31, 2005 RATIOS THE PERIOD# ------------ --------------- -------------- ---------- ----------- BARON ASSET FUND 15.64% $1,000 $1,156 1.34% $7.20 BARON GROWTH FUND 16.93% 1,000 1,169 1.32% 7.14 BARON SMALL CAP FUND 18.74% 1,000 1,187 1.34% 7.31 BARON iOPPORTUNITY FUND 6.86% 1,000 1,069 1.50% 7.74 BARON FIFTH AVENUE GROWTH FUND 5.66% 1,000 1,057 1.40% 7.18
- --------------- * For the six months ended March 31, 2005. Assumes all reinvestment of dividends and capital gain distributions, if any. # Expenses are equal to each Fund's respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number days in the most recent fiscal half-year, then divided by 365. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below titled "Based on Hypothetical Total Return" provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account values and expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example relating to the Fund with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table below are meant to highlight your ongoing costs and do not reflect any transactional costs, such as redemption fees, if any. Therefore, the table is useful in comparing ongoing costs only and will not help you determine your relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs would have been higher. BASED ON HYPOTHETICAL TOTAL RETURN*
HYPOTHETICAL BEGINNING ENDING ANNUALIZED EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE EXPENSE PAID DURING TOTAL RETURN OCTOBER 1, 2004 MARCH 31, 2005 RATIOS THE PERIOD# ------------ --------------- -------------- ---------- ----------- BARON ASSET FUND 5.00% $1,000 $1,018 1.34% $6.74 BARON GROWTH FUND 5.00% 1,000 1,018 1.32% 6.64 BARON SMALL CAP FUND 5.00% 1,000 1,018 1.34% 6.74 BARON iOPPORTUNITY FUND 5.00% 1,000 1,018 1.50% 7.54 BARON FIFTH AVENUE GROWTH FUND 5.00% 1,000 1,018 1.40% 7.04
- --------------- * For the six months ended March 31, 2005. # Expenses are equal to each Fund's respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number days in the most recent fiscal half-year, then divided by 365. 2 BARON ASSET FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - -------------------------------------------------------------------------------- COMMON STOCKS (96.23%) - -------------------------------------------------------------------------------- ADVERTISING SERVICES (0.44%) 150,000 Getty Images, Inc.* $ 10,110,290 $ 10,666,500 APPAREL (1.58%) 1,000,000 Polo Ralph Lauren Corp., Cl A 19,737,919 38,800,000 BUSINESS SERVICES (10.55%) 525,000 Brown & Brown, Inc. 21,083,031 24,197,250 4,500,000 ChoicePoint, Inc.*# 52,047,773 180,495,000 800,000 Iron Mountain, Inc.* 21,584,934 23,072,000 1,150,000 Robert Half Intl., Inc.* 1,202,006 31,004,000 ------------ ------------ 95,917,744 258,768,250 CONSULTING (1.55%) 1,000,000 Hewitt Associates, Inc.* 24,669,272 26,600,000 140,000 Moody's Corp. 7,256,123 11,320,400 ------------ ------------ 31,925,395 37,920,400 CONSUMER SERVICES (1.10%) 150,000 H&R Block, Inc. 6,283,167 7,587,000 450,000 Weight Watchers Intl., Inc.* 12,953,988 19,341,000 ------------ ------------ 19,237,155 26,928,000 EDUCATION (6.40%) 1,450,000 Apollo Group, Inc., Cl A* 14,614,607 107,387,000 1,000,000 DeVry, Inc.* 2,392,707 18,920,000 1,100,000 Education Mgmt. Corp.* 6,886,520 30,745,000 ------------ ------------ 23,893,834 157,052,000 ENERGY SERVICES (7.06%) 150,000 Arch Coal, Inc. 7,043,606 6,451,500 350,000 Premcor, Inc.* 12,116,414 20,888,000 500,000 SEACOR Holdings, Inc.* 14,322,278 31,875,000 175,000 Ultra Petroleum Corp.* 8,706,288 8,890,000 3,200,000 XTO Energy, Inc. 27,970,775 105,088,000 ------------ ------------ 70,159,361 173,192,500 FINANCIAL SERVICES - ASSET MANAGEMENT (1.35%) 650,000 Eaton Vance Corp. 12,749,664 15,236,000 300,000 T. Rowe Price Group, Inc. 15,822,959 17,814,000 ------------ ------------ 28,572,623 33,050,000 FINANCIAL SERVICES - BANKING (1.32%) 1,000,000 Commerce Bancorp, Inc. 25,233,129 32,470,000 FINANCIAL SERVICES - BROKERAGE AND EXCHANGES (6.60%) 9,400,000 Charles Schwab Corp. 23,571,677 98,794,000 325,000 Chicago Mercantile Exchange Holdings, Inc. 24,532,405 63,059,750 ------------ ------------ 48,104,082 161,853,750 FINANCIAL SERVICES - INSURANCE (4.05%) 1,000,000 Arch Capital Group, Ltd.* 33,841,383 40,040,000 675,000 Assurant, Inc. 21,746,938 22,747,500 1,350,000 Axis Capital Holdings, Ltd. 34,853,219 36,504,000 ------------ ------------ 90,441,540 99,291,500 FINANCIAL SERVICES - MISCELLANEOUS (1.83%) 325,000 First Marblehead Corp.* 13,040,407 18,697,250 125,000 The Student Loan Corp. 17,812,742 26,126,250 ------------ ------------ 30,853,149 44,823,500 HEALTHCARE FACILITIES (3.25%) 800,000 Community Health Systems, Inc.* 20,710,260 27,928,000 1,425,000 Manor Care, Inc. 30,442,203 51,813,000 ------------ ------------ 51,152,463 79,741,000
Shares Cost Value - --------------------------------------------------------------------------- HEALTHCARE PRODUCTS (3.75%) 540,000 DENTSPLY International, Inc. $ 23,319,203 $ 29,381,400 800,000 Henry Schein, Inc.* 22,796,151 28,672,000 250,000 The Cooper Companies, Inc. 17,847,205 18,225,000 200,000 Zimmer Holdings, Inc.* 6,087,903 15,562,000 ------------ ------------ 70,050,462 91,840,400 HEALTHCARE SERVICES (2.59%) 400,000 Caremark Rx, Inc.* 8,628,525 15,912,000 500,000 Charles River Laboratories Intl., Inc.* 14,951,698 23,520,000 425,000 Fisher Scientific Intl., Inc.* 24,522,276 24,191,000 ------------ ------------ 48,102,499 63,623,000 HEALTHCARE SERVICES - INSURANCE (3.07%) 600,000 WellPoint, Inc.* 33,488,049 75,210,000 HOME BUILDING (3.98%) 64,000 NVR, Inc.* 22,534,495 50,240,000 600,000 Toll Brothers, Inc.* 24,270,884 47,310,000 ------------ ------------ 46,805,379 97,550,000 HOTELS AND LODGING (2.67%) 600,000 Choice Hotels Intl., Inc. 6,079,268 37,170,000 400,000 Four Seasons Hotels, Inc. 10,216,158 28,280,000 ------------ ------------ 16,295,426 65,450,000 INFORMATION SERVICES (0.35%) 200,000 NAVTEQ Corp.* 5,931,687 8,670,000 MEDIA (2.18%) 480,000 Cox Radio, Inc., Cl A* 2,930,292 8,068,800 260,000 Radio One, Inc., Cl A* 2,068,065 3,816,800 500,000 Radio One, Inc., Cl D* 3,360,585 7,375,000 1,000,000 Saga Comm., Inc., Cl A* 4,282,731 16,100,000 350,000 Univision Comm., Inc., Cl A* 3,148,975 9,691,500 270,000 XM Satellite Radio Holdings, Inc., Cl A* 6,612,635 8,505,000 ------------ ------------ 22,403,283 53,557,100 REAL ESTATE SERVICES (3.85%) 314,000 Alexander's, Inc.*# 20,453,936 75,831,000 375,000 CB Richard Ellis Group, Inc.* 13,013,843 13,121,250 141,844 Corrections Corp. of America* 1,418 5,475,178 ------------ ------------ 33,469,197 94,427,428 RECREATION AND RESORTS (14.64%) 2,400,000 Kerzner Intl., Ltd.*# 77,808,281 146,952,000 3,000,000 Vail Resorts, Inc.*# 61,273,805 75,750,000 625,000 Wynn Resorts, Ltd.* 8,107,336 42,337,500 1,459,408 Wynn Resorts, Ltd.*@ 30,030,772 93,917,283 ------------ ------------ 177,220,194 358,956,783 RESTAURANTS (1.08%) 750,000 The Cheesecake Factory, Inc.* 15,604,748 26,587,500 RETAIL - CONSUMER STAPLES (2.00%) 480,000 Whole Foods Market, Inc. 23,163,847 49,022,400 RETAIL - SPECIALTY STORES (4.34%) 525,000 CarMax, Inc.* 13,837,498 16,537,500 1,450,000 Dollar Tree Stores, Inc.* 9,619,567 41,658,500 800,000 Ethan Allen Interiors, Inc. 22,610,641 25,600,000 125,000 O'Reilly Automotive, Inc.* 6,204,753 6,191,250 475,000 Tiffany & Co. 14,847,794 16,397,000 ------------ ------------ 67,120,253 106,384,250
See Notes to Financial Statements. 3 BARON ASSET FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - --------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) TRANSPORTATION (2.50%) 750,000 C. H. Robinson Worldwide, Inc. $ 27,854,391 $ 38,647,500 425,000 Expeditors International of Washington, Inc. 20,716,446 22,758,750 -------------- -------------- 48,570,837 61,406,250 UTILITY SERVICES (2.15%) 2,100,000 Southern Union Co.* 27,564,041 52,731,000 -------------- -------------- TOTAL COMMON STOCKS 1,181,128,586 2,359,973,511 -------------- -------------- - --------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCKS (0.39%) - --------------------------------------------------------------------------- EDUCATION (0.02%) 105,264 Apollo International, Inc. S-A CV Pfd.*@# 2,000,016 400,000 HEALTHCARE SERVICES (0.37%) 5,753 Somerford Corp. S-A Conv. Pfd.*@ 9,000,000 8,999,993 -------------- -------------- TOTAL CONVERTIBLE PREFERRED STOCKS 11,000,016 9,399,993 -------------- -------------- - --------------------------------------------------------------------------- WARRANTS (0.07%) - --------------------------------------------------------------------------- REAL ESTATE SERVICES 70,922 Corrections Corporation of America Warrants Exp 09/29/2005*@ 0 1,737,589 -------------- --------------
Principal Amount Cost Value - --------------------------------------------------------------------------- CORPORATE BONDS (0.12%) - --------------------------------------------------------------------------- HEALTHCARE SERVICES $ 3,000,000 Somerford Corp. 8.50% Sub. Conv. Deb. due 04/23/2006@ $ 3,000,000 $ 3,000,000 -------------- -------------- - --------------------------------------------------------------------------- SHORT TERM MONEY MARKET INSTRUMENTS (3.88%) - --------------------------------------------------------------------------- 21,023,400 AIG Funding, Inc. 2.70% due 04/07/2005 21,023,400 21,023,400 35,060,000 Exxon Investment Corp. 2.68% due 04/01/2005 35,060,000 35,060,000 38,976,600 Chevron Texaco Corp. 2.70% due 04/07/2005 38,976,600 38,976,600 -------------- -------------- TOTAL SHORT TERM MONEY MARKET INSTRUMENTS 95,060,000 95,060,000 -------------- -------------- TOTAL INVESTMENTS (100.69%) $1,290,188,602 2,469,171,093 ============== LIABILITIES LESS CASH AND OTHER ASSETS (-0.69%) (16,844,544) -------------- NET ASSETS (EQUIVALENT TO $52.20 PER SHARE BASED ON 46,974,954 SHARES OUTSTANDING) $2,452,326,549 ==============
- --------------- % Represents percentage of net assets @ See Note 6 regarding restricted securities. # See Note 8 regarding "affiliated issuers". * Non-income producing securities - -------------------------------------------------------------------------------- TOP 10 HOLDINGS (AS A PERCENTAGE OF NET ASSETS) AS OF MARCH 31, 2005
- -------------------------------------------------------------------------------- % OF NET BARON ASSET FUND ASSETS - -------------------------------------------------------------------------------- ChoicePoint, Inc. 7.3% Kerzner Intl., Ltd. 6.0% Wynn Resorts, Ltd. 5.5% Apollo Group, Inc., Cl A 4.4% XTO Energy, Inc. 4.3% Charles Schwab Corp. 4.0% Alexander's, Inc. 3.1% Vail Resorts, Inc. 3.1% WellPoint, Inc. 3.1% Chicago Mercantile Exchange Holdings, Inc. 2.6% ----- 43.4% =====
TOP TEN INDUSTRY GROUPS AS OF MARCH 31, 2005 (AS A PERCENTAGE OF NET ASSETS) [PIE CHART GRAPHIC]
Financial Services - Cash and Brokerage Retail - Financial Cash Recreation Business Energy and Specialty Services - Equivalents and Resorts Services Services Exchanges Education Stores Insurance 3.19% 14.64% 10.55% 7.06% 6.60% 6.42% 4.34% 4.05% Home Real Estate Healthcare Building Services Products Other 3.98% 3.92% 3.75% 31.50%
See Notes to Financial Statements. 4 BARON GROWTH FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - -------------------------------------------------------------------------------- COMMON STOCKS (87.25%) - -------------------------------------------------------------------------------- ADVERTISING SERVICES (0.85%) 350,000 Getty Images, Inc.* $ 7,538,649 $ 24,888,500 500,000 Harte-Hanks, Inc. 9,358,388 13,780,000 ------------ ------------ 16,897,037 38,668,500 APPAREL (1.27%) 1,450,000 Carter's, Inc.*# 39,178,712 57,637,500 BUILDING MACHINERY (0.38%) 400,000 Tractor Supply Co.* 14,319,999 17,460,000 BUSINESS SERVICES (2.66%) 300,000 Brown & Brown, Inc. 9,830,329 13,827,000 1,600,000 ChoicePoint, Inc.* 35,852,211 64,176,000 600,000 Equinix, Inc.* 17,862,441 25,404,000 925,000 Gevity HR, Inc. 18,795,390 17,686,000 ------------ ------------ 82,340,371 121,093,000 CHEMICAL (1.05%) 1,250,000 Senomyx, Inc.* 11,809,472 14,887,500 1,500,000 Symyx Technologies, Inc.* 23,175,012 33,075,000 ------------ ------------ 34,984,484 47,962,500 COMMUNICATIONS (1.80%) 2,400,000 American Tower Corp., Cl A* 8,847,010 43,752,000 420,000 Arbinet-thexchange, Inc.* 9,800,738 8,001,000 800,000 Crown Castle Intl. Corp.* 3,043,909 12,848,000 1,872,500 SBA Communications Corp.* 7,261,559 17,152,100 ------------ ------------ 28,953,216 81,753,100 CONSULTING (1.03%) 1,320,000 Hewitt Associates, Inc.* 32,467,626 35,112,000 600,000 LECG Corp.* 12,477,679 11,760,000 ------------ ------------ 44,945,305 46,872,000 EDUCATION (5.34%) 3,700,000 DeVry, Inc.*# 62,024,338 70,004,000 1,850,000 Education Mgmt. Corp.* 40,360,277 51,707,500 700,000 Strayer Education, Inc. 57,859,739 79,324,000 1,150,000 Universal Technical Institute, Inc.* 31,350,206 42,320,000 ------------ ------------ 191,594,560 243,355,500 ENERGY SERVICES (5.80%) 2,450,000 Encore Acquisition Co.*# 63,866,681 101,185,000 1,100,000 FMC Technologies, Inc.* 25,188,996 36,498,000 1,275,000 Premcor, Inc.* 28,186,806 76,092,000 440,000 SEACOR Holdings, Inc.* 17,768,097 28,050,000 550,000 Whiting Petroleum Corp.* 16,362,699 22,429,000 ------------ ------------ 151,373,279 264,254,000 FINANCIAL SERVICES - ASSET MANAGEMENT (1.85%) 350,000 BlackRock, Inc., Cl A 7,036,572 26,225,500 1,286,700 Cohen & Steers, Inc. 18,734,071 21,230,550 650,000 Eaton Vance Corp. 11,290,146 15,236,000 260,000 Gabelli Asset Mgmt., Inc., Cl A 3,811,537 11,609,000 290,000 Nuveen Investments, Inc. 7,748,686 9,952,800 ------------ ------------ 48,621,012 84,253,850 FINANCIAL SERVICES - BANKING (4.26%) 500,000 Boston Private Financial Hldgs., Inc. 13,297,866 11,875,000 500,000 Cathay General Bancorp 18,387,044 15,750,000 750,000 Center Financial Corp. 16,698,702 13,222,500 350,000 Central Pacific Financial Corp. 12,083,906 11,777,500 400,000 East West Bancorp, Inc. 15,145,490 14,768,000 1,200,000 First Republic Bank 37,491,204 38,844,000 23,152 Preferred Bank of Los Angeles 964,972 923,765 2,000,000 Southwest Bancorp of Texas, Inc. 38,945,228 36,700,000 1,250,000 UCBH Holdings, Inc. 52,693,127 49,875,000 ------------ ------------ 205,707,539 193,735,765
Shares Cost Value --------------------------------------------------------------------------- FINANCIAL SERVICES - BROKERAGE & EXCHANGES (2.66%) 125,000 Chicago Mercantile Exchange Holdings, Inc. $ 5,661,910 $ 24,253,750 825,000 International Securities Exchange, Inc.* 22,915,370 21,450,000 2,000,000 Jefferies Group, Inc. 57,267,481 75,360,000 ------------ ------------ 85,844,761 121,063,750 FINANCIAL SERVICES - INSURANCE (1.45%) 1,650,000 Arch Capital Group, Ltd.* 51,045,431 66,066,000 FINANCIAL SERVICES - MISCELLANEOUS (2.79%) 1,000,000 CheckFree Corp.* 18,042,917 40,760,000 1,500,000 First Marblehead Corp.* 44,501,122 86,295,000 ------------ ------------ 62,544,039 127,055,000 FOOD AND AGRICULTURE (0.78%) 750,000 Ralcorp Hldgs., Inc.* 27,652,511 35,512,500 GAMING SERVICES (0.33%) 650,000 Scientific Games Corp.* 14,358,938 14,852,500 GOVERNMENT SERVICES (1.00%) 1,150,000 Anteon Intl. Corp.* 34,526,770 44,769,500 30,000 Cogent, Inc.* 809,525 755,400 ------------ ------------ 35,336,295 45,524,900 HEALTHCARE FACILITIES (4.23%) 2,200,000 Community Health Systems, Inc.* 55,160,342 76,802,000 1,800,000 Manor Care, Inc. 33,815,991 65,448,000 1,100,000 United Surgical Partners Intl., Inc.* 23,181,527 50,347,000 ------------ ------------ 112,157,860 192,597,000 HEALTHCARE PRODUCTS (2.62%) 1,250,000 DepoMed, Inc.* 7,499,408 4,925,000 2,000,000 Edwards Lifesciences Cop.* 59,602,587 86,440,000 400,000 INAMED Corp.* 18,742,154 27,952,000 ------------ ------------ 85,844,149 119,317,000 HEALTHCARE SERVICES (3.64%) 1,703,200 Charles River Laboratories Intl., Inc.* 52,306,788 80,118,528 400,000 Gen-Probe, Inc.* 17,563,773 17,824,000 125,000 IDEXX Laboratories, Inc.* 7,086,452 6,770,000 600,000 LabOne, Inc.* 21,051,968 20,688,000 1,825,000 Odyssey Healthcare, Inc.*# 22,290,243 21,462,000 700,000 PRA International* 15,958,977 18,851,000 ------------ ------------ 136,258,201 165,713,528 HEALTHCARE SERVICES - INSURANCE (5.16%) 3,800,000 AMERIGROUP Corp.*# 70,530,101 138,928,000 3,200,000 Centene Corp.*# 30,065,539 95,968,000 ------------ ------------ 100,595,640 234,896,000 HOME BUILDING (1.52%) 240,000 Beazer Homes USA, Inc. 9,384,376 11,966,400 150,000 Brookfield Homes Corp. 1,213,560 6,331,500 1,000,000 Hovnanian Enterprises, Inc.* 27,153,147 51,000,000 ------------ ------------ 37,751,083 69,297,900 HOTELS AND LODGING (2.91%) 800,000 Choice Hotels Intl., Inc. 9,354,700 49,560,000 1,175,000 Four Seasons Hotels, Inc. 35,010,721 83,072,500 ------------ ------------ 44,365,421 132,632,500
See Notes to Financial Statements. 5 BARON GROWTH FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) MEDIA (2.91%) 410,000 Central European Media Enterprises, Ltd.* $ 19,140,473 $ 20,278,600 725,000 Citadel Broadcasting Corp.* 12,964,827 9,954,250 1,050,000 Cumulus Media, Inc.* 18,513,729 14,962,500 500,000 Entravision Comm. Corp., Cl A* 2,952,986 4,435,000 1,300,000 Gray Television, Inc. 10,939,970 18,811,000 2,000,000 LIN TV Corp., Cl A* 43,977,344 33,860,000 250,000 Radio One, Inc., Cl A* 2,371,787 3,670,000 980,000 Radio One, Inc., Cl D* 11,388,696 14,455,000 750,000 Saga Comm., Inc., Cl A* 6,494,845 12,075,000 ----------- ----------- 128,744,657 132,501,350 MEDICAL EQUIPMENT (0.37%) 375,000 Intuitive Surgical, Inc.* 5,930,135 17,051,250 PRINTING AND PUBLISHING (0.62%) 775,000 ProQuest Co.* 22,688,213 28,016,250 REAL ESTATE SERVICES (3.04%) 75,000 Alexander's, Inc.* 5,683,588 18,112,500 1,750,000 CB Richard Ellis Group, Inc.* 38,014,092 61,232,500 899,600 CoStar Group, Inc.* 38,457,938 33,150,260 2,400,000 Spirit Finance Corp.* 28,029,246 26,064,000 ----------- ----------- 110,184,864 138,559,260 RECREATION AND RESORTS (10.36%) 850,000 Ameristar Casinos, Inc. 33,163,732 46,478,000 200,000 Boyd Gaming Corp. 5,345,491 10,430,000 525,000 Gaylord Entertainment Co.* 15,225,311 21,210,000 1,500,000 Isle of Capri Casinos, Inc.*# 31,924,387 39,810,000 1,800,000 Kerzner Intl., Ltd.*# 49,095,087 110,214,000 1,700,000 Station Casinos, Inc. 39,029,399 114,835,000 1,250,000 Vail Resorts, Inc.* 21,897,070 31,562,500 537,677 Wynn Resorts, Ltd. *@ 11,063,956 34,601,128 925,000 Wynn Resorts, Ltd. * 11,982,289 62,659,500 ----------- ----------- 218,726,722 471,800,128 RESTAURANTS (5.12%) 850,000 California Pizza Kitchen, Inc.* 22,057,591 19,924,000 750,000 Panera Bread Co., Cl A* 25,159,032 42,397,500 450,000 Peet's Coffee & Tea, Inc.* 8,320,843 11,092,500 1,250,000 P.F. Chang's China Bistro, Inc.* 58,814,683 74,750,000 2,400,000 The Cheesecake Factory, Inc.* 51,421,500 85,080,000 ----------- ----------- 165,773,649 233,244,000 RETAIL - CONSUMER STAPLES (0.24%) 465,251 Copart, Inc.* 11,255,177 10,961,313 RETAIL - SPECIALTY STORES (6.00%) 875,000 Blue Nile, Inc.* 26,058,719 24,193,750 2,000,000 Cabela's, Inc.* 48,577,359 41,260,000 1,650,000 CarMax, Inc.* 34,948,928 51,975,000 1,600,000 Dick's Sporting Goods, Inc.* 55,750,531 58,768,000 350,000 Dollar Tree Stores, Inc.* 2,779,517 10,055,500 550,000 Ethan Allen Interiors, Inc. 14,286,910 17,600,000 900,000 PETCO Animal Supplies, Inc.* 17,449,210 33,129,000 1,775,000 Select Comfort Corp.* 37,528,380 36,281,000 ----------- ----------- 237,379,554 273,262,250 SOFTWARE (0.56%) 500,000 Kronos, Inc.* 7,446,852 25,555,000 TRANSPORTATION (1.79%) 1,242,500 Genesee & Wyoming, Inc.* 28,652,530 32,193,175 500,000 JetBlue Airways Corp.* 11,429,926 9,520,000 470,000 Landstar System, Inc.* 11,008,346 15,392,500 350,000 UTI Worldwide, Inc. 24,739,213 24,307,500 ----------- ----------- 75,830,015 81,413,175
Shares Cost Value - --------------------------------------------------------------------------- UTILITY SERVICES (0.86%) 1,549,999 Southern Union Co.* $ 19,474,294 $ 38,920,475 -------------- -------------- TOTAL COMMON STOCKS 2,656,103,975 3,972,858,744 -------------- -------------- - ---------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCKS (0.16%) - ---------------------------------------------------------------------------- PHARMACEUTICAL 750,000 Reliant Pharmaceuticals LLC Series D @ 15,000,000 7,500,000 -------------- --------------
Principal Amount - ------------------------------------------------------------------------------- CORPORATE BONDS (1.76%) - ------------------------------------------------------------------------------- RECREATION AND RESORTS $ 26,000,000 Wynn Resorts 6.00% Sub. Conv. Deb. due 07/15/2015 25,420,196 80,215,720 -------------- -------------- - ------------------------------------------------------------------------------- SHORT TERM MONEY MARKET INSTRUMENTS (11.04%) - ------------------------------------------------------------------------------- 120,307,455 American Express Corp. 2.60% due 04/06/2005 120,307,455 120,307,455 2,502,978 Exxon Investment Corp. 2.68% due 04/01/2005 2,502,978 2,502,978 14,992,183 Exxon Investment Corp. 2.60% due 04/06/2005 14,992,183 14,992,183 124,934,861 General Electric Capital Corp. 2.60% due 04/06/2005 124,934,861 124,934,861 39,997,022 UBS Financial 2.68% due 04/01/2005 39,997,022 39,997,022 199,765,501 UBS Financial 2.60% due 04/06/2005 199,765,501 199,765,501 -------------- -------------- TOTAL SHORT TERM MONEY MARKET INSTRUMENTS 502,500,000 502,500,000 -------------- -------------- TOTAL INVESTMENTS (100.21%) $3,199,024,171 4,563,074,464 ============== LIABILITIES LESS CASH AND OTHER ASSETS (-0.21%) (9,679,619) ----------- NET ASSETS (EQUIVALENT TO $45.51 PER SHARE BASED ON 100,043,912 SHARES OUTSTANDING) $4,553,394,845 ==============
- --------------- % Represents percentage of net assets @ See Note 6 regarding restricted securities. # See Note 8 regarding "affiliated issuers". * Non-income producing securities See Notes to Financial Statements. 6 BARON GROWTH FUND - -------------------------------------------------------------------------------- TOP 10 HOLDINGS (AS A PERCENTAGE OF NET ASSETS) AS OF MARCH 31, 2005
- -------------------------------------------------------------------------------- % OF NET BARON GROWTH FUND ASSETS - -------------------------------------------------------------------------------- Wynn Resorts, Ltd. 3.9% AMERIGROUP Corp. 3.1% Station Casinos, Inc. 2.5% Kerzner Intl., Ltd. 2.4% Encore Acquisition Co. 2.2% Centene Corp. 2.1% Edwards Lifesciences Corp. 1.9% First Marblehead Corp. 1.9% The Cheesecake Factory, Inc. 1.9% Four Seasons Hotel, Inc. 1.8% ----- 23.7% =====
TOP TEN INDUSTRY GROUPS AS OF MARCH 31, 2005 (AS A PERCENTAGE OF NET ASSETS) [PIE CHART GRAPHIC]
Cash and Retail - Healthcare Financial Cash Recreation Specialty Energy Services - Services Healthcare Equivalents and Resorts Stores Services Education Insurance Restaurants -Banking Facilities 10.83% 12.12% 6.00% 5.80% 5.34% 5.16% 5.12% 4.26% 4.23% Healthcare Real Estate Services Services Other 3.64% 3.04% 34.46%
See Notes to Financial Statements. 7 BARON SMALL CAP FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - ----------------------------------------------------------------------------- COMMON STOCKS (86.30%) - ----------------------------------------------------------------------------- ADVERTISING SERVICES (1.24%) 550,000 R.H. Donnelley Corp.* $ 16,121,330 $ 31,949,500 APPAREL (0.93%) 600,000 Carter's Inc.* 19,221,373 23,850,000 BUILDING MACHINERY (1.22%) 716,406 Tractor Supply Co.* 25,241,967 31,271,122 BUILDING MATERIALS (2.91%) 900,000 Eagle Materials, Inc., Cl B# 55,114,002 70,920,000 45,600 Eagle Materials, Inc.# 3,644,792 3,690,864 ------------- ------------- 58,758,794 74,610,864 BUSINESS SERVICES (4.75%) 725,000 ChoicePoint, Inc.* 6,949,762 29,079,750 1,800,000 DX Services PLC^ 11,518,326 13,129,200 977,000 First Advantage Corp., Cl A* 18,923,274 20,517,000 300,000 Imagistics Intl., Inc.* 10,352,391 10,479,000 1,111,100 Infocrossing, Inc.* 10,597,825 17,599,824 975,000 Iron Mountain, Inc.* 10,010,523 28,119,000 350,000 PeopleSupport, Inc.* 3,135,423 3,080,000 ------------- ------------- 71,487,524 122,003,774 CHEMICAL (0.28%) 500,000 Crompton Corp. 7,507,818 7,300,000 COMMUNICATIONS (7.93%) 5,550,000 Alamosa Hldgs., Inc.* 32,186,799 64,768,500 3,350,000 American Tower Corp., Cl A* 19,090,630 61,070,500 1,500,000 SBA Communications Corp.* 6,109,973 13,740,000 4,250,000 UbiquiTel, Inc.* 17,865,463 28,475,000 1,100,000 USA Mobility, Inc.* 28,583,701 35,640,000 ------------- ------------- 103,836,566 203,694,000 CONSULTING (2.13%) 275,000 Corporate Executive Board Co.* 4,596,432 17,586,250 500,000 Gartner Group, Inc.* 4,777,791 4,785,000 1,650,000 LECG Corp.*# 32,939,131 32,340,000 ------------- ------------- 42,313,354 54,711,250 CONSUMER PRODUCTS (1.52%) 1,500,000 Digital Theater Systems, Inc.*# 32,173,107 27,165,000 500,000 Dolby Laboratories, Inc.* 11,460,227 11,750,000 19,428 EMAK Worldwide, Inc. * 159,622 201,080 ------------- ------------- 43,792,956 39,116,080 EDUCATION (6.88%) 500,000 Apollo Group, Inc., Cl A* 4,269,664 37,030,000 1,150,000 Career Education Corp.* 2,558,022 39,399,000 475,000 Educate, Inc. * 5,452,417 6,588,250 429,000 Strayer Education, Inc. 35,764,656 48,614,280 1,225,700 Universal Technical Institute, Inc.* 36,549,066 45,105,760 ------------- ------------- 84,593,825 176,737,290 ENERGY SERVICES (0.27%) 500,000 Energy Savings Income Fund^ 5,095,420 6,822,150 FINANCIAL SERVICES - ASSET MANAGEMENT (0.44%) 250,000 Gabelli Asset Mgmt., Inc., Cl A 4,356,166 11,162,500 FINANCIAL SERVICES - BANKING (0.44%) 1,500,000 Cash Systems, Inc.*# 10,062,346 11,205,000 FINANCIAL SERVICES - INSURANCE (0.31%) 200,000 Arch Capital Group, Ltd.* 5,515,966 8,008,000 GOVERNMENT SERVICES (5.52%) 1,252,500 Anteon Intl. Corp.* 32,627,766 48,759,825 2,288,800 FLIR Systems, Inc.* 51,055,165 69,350,640 1,025,000 Mantech Intl. Corp. * 19,005,171 23,646,750 ------------- ------------- 102,688,102 141,757,215 HEALTHCARE FACILITIES (2.99%) 1,350,000 American Retirement Corp.* 15,100,304 19,629,000 1,250,000 United Surgical Partners Intl., Inc.* 22,780,745 57,212,500 ------------- ------------- 37,881,049 76,841,500
Shares Cost Value - ---------------------------------------------------------------------------- HEALTHCARE PRODUCTS (1.97%) 725,000 INAMED Corp.* $ 34,785,131 $ 50,663,000 HEALTHCARE SERVICES (0.47%) 452,000 PRA International* 10,367,061 12,172,360 HOME BUILDING (2.20%) 1,231,600 Brookfield Homes Corp. 26,689,083 51,985,836 474,000 Champion Enterprises, Inc.* 3,398,383 4,455,600 ------------- ------------- 30,087,466 56,441,436 INFORMATION SERVICES (0.21%) 125,000 NAVTEQ Corp.* 2,750,000 5,418,750 LEISURE (1.92%) 1,000,000 Lakes Entertainment, Inc.* 13,665,909 18,000,000 1,000,000 MarineMax, Inc.*# 26,464,925 31,180,000 ------------- ------------- 40,130,834 49,180,000 MANUFACTURING (2.43%) 965,000 Actuant Corp., Cl A* 37,507,782 43,347,800 825,000 Measurement Specialties, Inc.*# 20,176,670 18,975,000 ------------- ------------- 57,684,452 62,322,800 MEDIA (3.28%) 500,000 Cumulus Media, Inc.* 7,511,278 7,125,000 401,100 DakTronics, Inc.* 9,191,759 8,683,815 1,350,000 Gray Television, Inc. 11,348,508 19,534,500 67,800 LIN TV Corp., Cl A* 1,359,383 1,147,854 2,250,000 Radio One, Inc., Cl D* 25,672,711 33,187,500 380,000 Regal Entertainment Group, Cl A 4,528,833 7,991,400 325,000 Westwood One, Inc.* 3,497,838 6,613,750 ------------- ------------- 63,110,310 84,283,819 MEDICAL EQUIPMENT (5.61%) 2,400,000 Immucor, Inc.*# 15,398,079 72,456,000 750,000 Intuitive Surgical, Inc.* 11,321,688 34,102,500 650,000 Kensey Nash Corp.*# 20,666,552 17,602,000 660,191 Lifeline Systems, Inc.* 15,537,121 20,016,991 ------------- ------------- 62,923,440 144,177,491 PHARMACEUTICAL (0.10%) 150,000 Noven Pharmaceutical, Inc. 1,748,557 2,544,000 PRINTING AND PUBLISHING (2.28%) 750,000 Bowne & Co., Inc. 12,951,607 11,280,000 1,000,000 Creo, Inc.* 13,608,882 16,060,000 1,500,000 Interactive Data Corp.* 22,596,629 31,125,000 ------------- ------------- 49,157,118 58,465,000 REAL ESTATE SERVICES (3.32%) 800,000 CB Richard Ellis Group, Inc.* 23,280,697 27,992,000 4,000,000 Countrywide PLC^ 21,998,600 24,678,800 3,000,000 Spirit Finance Corp.* 35,601,168 32,580,000 ------------- ------------- 80,880,465 85,250,800 RECREATION AND RESORTS (8.66%) 350,000 Ameristar Casinos, Inc. 12,671,576 19,138,000 1,400,000 Gaylord Entertainment Co.* 41,624,725 56,560,000 1,850,000 Great Wolf Resorts, Inc.*# 37,051,786 46,157,500 350,000 Isle of Capri Casinos, Inc.* 8,591,438 9,289,000 550,000 Kerzner Intl., Ltd.* 13,662,714 33,676,500 850,000 Wynn Resorts, Ltd. * 12,016,631 57,579,000 ------------- ------------- 125,618,870 222,400,000 RESTAURANTS (5.17%) 1,000,000 AFC Enterprises, Inc.* 25,201,680 25,510,000 250,000 BJ's Restaurants, Inc.*@ 3,875,000 4,362,750 500,000 Panera Bread Co., Cl A* 14,988,432 28,265,000 200,000 P.F. Chang's China Bistro, Inc.* 8,574,459 11,960,000 1,050,000 Texas Roadhouse, Inc.* 25,135,478 29,484,000 937,500 The Cheesecake Factory, Inc.* 19,254,684 33,234,375 ------------- ------------- 97,029,733 132,816,125
See Notes to Financial Statements. 8 BARON SMALL CAP FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - --------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) RETAIL - CONSUMER STAPLES (0.46%) 450,000 NuCO2, Inc.* $ 11,157,528 $ 11,835,000 RETAIL - SPECIALTY STORES (6.43%) 700,000 99 Cents Only Stores* 16,541,813 9,219,000 250,000 Aeropostale, Inc.* 1,113,097 8,187,500 1,157,503 Casual Male Retail Group, Inc.*# 5,361,112 7,512,194 1,100,000 Design Within Reach, Inc.*# 17,344,209 17,308,500 350,000 Dollar Tree Stores, Inc.* 6,476,891 10,055,500 1,300,000 Hot Topic, Inc.* 20,830,936 28,405,000 600,000 Kenneth Cole Productions, Inc., Cl A 10,318,483 17,484,000 814,807 Provide Commerce, Inc.*# 16,090,651 23,531,626 1,500,000 Quiksilver, Inc.* 25,050,216 43,545,000 -------------- -------------- 119,127,408 165,248,320 TRANSPORTATION (2.03%) 650,000 JetBlue Airways Corp.* 11,502,058 12,376,000 3,100,000 WestJet Airlines, Ltd.* 30,859,041 39,861,970 -------------- -------------- 42,361,099 52,237,970 -------------- -------------- TOTAL COMMON STOCKS 1,467,394,028 2,216,497,116 -------------- --------------
Shares Cost Value - --------------------------------------------------------------------------- WARRANTS (0.21%) - ---------------------------------------------------------------------------- BUSINESS SERVICES (0.07%) 222,575 Infocrossing, Inc. Warrants Exp 10/16/2008*@ $ 31,784 $ 1,776,149 ----------- ----------- RETAIL - SPECIALTY STORES (0.14%) 1,407,353 Casual Male Retail Group, Inc. Warrants Exp 04/26/2007*@# 2,117,151 3,402,000 100,000 Casual Male Retail Group, Inc. Warrants Exp 07/02/2010*@# 49,000 173,000 ----------- ----------- 2,166,151 3,575,000 ----------- ----------- TOTAL WARRANTS 2,197,935 5,351,149 ----------- ----------- - --------------------------------------------------------------------------- Principal Amount - ---------------------------------------------------------------------------
CORPORATE BONDS (0.21%) - ---------------------------------------------------------------------------- PRINTING AND PUBLISHING $ 7,000,000 Penton Media, Inc. 10.375% Sr. Sub. NT due 06/15/2011 4,840,761 5,468,750 -------------- -------------- - --------------------------------------------------------------------------- SHORT TERM MONEY MARKET INSTRUMENTS (11.73%) - --------------------------------------------------------------------------- 51,399,999 UBS Finance 2.68% due 04/01/2005 51,399,999 51,399,999 250,000,000 UBS Finance 2.60% due 04/06/2005 250,000,000 250,000,000 -------------- -------------- TOTAL SHORT TERM MONEY MARKET INSTRUMENTS 301,399,999 301,399,999 -------------- -------------- TOTAL INVESTMENTS (98.45%) $1,775,832,723 2,528,717,014 ============== CASH AND OTHER ASSETS LESS LIABILITIES (1.55%) 39,756,446 -------------- NET ASSETS (EQUIVALENT TO $22.18 PER SHARE BASED ON 115,813,955 SHARES OUTSTANDING) $2,568,473,460 ==============
- --------------- % Represents percentage of net assets @ See Note 6 regarding restricted securities. # See Note 8 regarding "affiliated issuers". * Non-income producing securities ^ Represents foreign domiciled corporation. TOP 10 HOLDINGS (AS A PERCENTAGE OF NET ASSETS) AS OF MARCH 31, 2005
- -------------------------------------------------------------------------------- % OF NET BARON SMALL CAP FUND ASSETS - -------------------------------------------------------------------------------- Eagle Materials, Inc. 2.9% Immucor, Inc. 2.8% FLIR Systems, Inc. 2.7% Alamosa Hldgs., Inc. 2.5% American Tower Corp. 2.4% Wynn Resorts, Ltd. 2.3% United Surgical Partners Intl., Inc. 2.2% Gaylord Entertainment Co. 2.2% Brookfield Homes Corp. 2.0% INAMED Corp. 2.0% ---- 24.0% ====
TOP TEN INDUSTRY GROUPS AS OF MARCH 31, 2005 (AS A PERCENTAGE OF NET ASSETS) [PIE CHART GRAPHIC]
Cash and Retail - Cash Recreation Communi- Specialty Medical Government Business Equivalents and Resorts cations Education Stores Equipment Services Restaurants Services 13.28% 8.66% 7.93% 6.88% 6.57% 5.61% 5.52% 5.17% 4.82% Real Estate Services Media Other 3.32% 3.28% 28.96%
See Notes to Financial Statements. 9 BARON iOPPORTUNITY FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - ------------------------------------------------------------------------------ COMMON STOCKS (94.57%) - ------------------------------------------------------------------------------ ADVERTISING SERVICES (10.26%) 105,000 Ask Jeeves, Inc.* $ 2,690,218 $ 2,948,400 250,000 Digitas, Inc.* 1,978,957 2,525,000 15,000 Fastclick, Inc.* 180,000 180,000 55,000 Getty Images, Inc.* 713,792 3,911,050 22,500 Google, Inc.* 3,242,548 4,061,475 50,000 Shopping.com, Ltd.* 871,005 890,000 ------------ ------------ 9,676,520 14,515,925 BUSINESS SERVICES (13.17%) 150,000 Ariba, Inc.* 1,535,746 1,164,000 85,000 ChoicePoint, Inc.* 2,995,233 3,409,350 35,000 Equinix, Inc.* 700,000 1,481,900 100,000 InfoSpace, Inc.* 3,681,686 4,083,000 150,000 Monster Worldwide, Inc.* 1,888,683 4,207,500 167,500 Stamps.com, Inc.* 1,351,874 2,780,500 1,500,000 Terremark Worldwide, Inc.* 1,095,000 975,000 200,000 WindsorTech, Inc.* 746,000 540,000 ------------ ------------ 13,994,222 18,641,250 CABLE (2.36%) 100,000 Comcast Corp., Cl A* 2,302,692 3,340,000 COMMUNICATIONS (11.06%) 150,000 Alamosa Hldgs., Inc.* 845,960 1,750,500 225,000 American Tower Corp., Cl A* 925,720 4,101,750 100,100 Arbinet-thexchange, Inc.* 1,903,757 1,906,905 35,000 Research in Motion, Ltd.* 961,627 2,674,700 350,000 SBA Communications Corp.* 1,199,536 3,206,000 300,000 UbiquiTel, Inc.* 1,424,881 2,010,000 ------------ ------------ 7,261,481 15,649,855 COMMUNICATIONS EQUIPMENT (2.59%) 100,000 QUALCOMM, Inc. 3,472,858 3,665,000 COMPUTER TECHNOLOGY (0.52%) 17,800 Apple Computer, Inc.* 783,063 741,726 CONSUMER PRODUCTS (0.46%) 125,000 TiVo, Inc.* 824,318 646,250 CONSUMER SERVICES (5.30%) 110,000 eBay, Inc.* 1,721,054 4,098,600 135,000 priceline.com, Inc.* 2,934,561 3,402,000 ------------ ------------ 4,655,615 7,500,600 EDUCATION (5.63%) 59,999 Apollo Group, Inc., Cl A* 1,166,799 4,443,526 20,000 Career Education Corp.* 419,473 685,200 25,000 Strayer Education, Inc. 2,503,237 2,833,000 ------------ ------------ 4,089,509 7,961,726 ENTERPRISE HARDWARE (7.49%) 60,000 CDW Corp. 3,715,727 3,400,800 115,000 Dell, Inc.* 3,111,683 4,418,300 120,000 Intel Corp. 2,805,370 2,787,600 ------------ ------------ 9,632,780 10,606,700 FINANCIAL SERVICES - BROKERAGE & EXCHANGES (7.65%) 400,000 Charles Schwab Corp. 4,503,802 4,204,000 12,500 Chicago Mercantile Exchange Holdings, Inc. 2,410,451 2,425,375 350,000 E*TRADE Financial Corp.* 1,881,437 4,200,000 ------------ ------------ 8,795,690 10,829,375 FINANCIAL SERVICES - MISCELLANEOUS (0.90%) 78,900 optionsXpress Holdings, Inc.* 1,301,850 1,277,391
Shares Cost Value --------------------------------------------------------------------------- GAMING SERVICES (2.35%) 125,000 International Game Technology $ 3,673,403 $ 3,332,500 HOTELS AND LODGING (1.33%) 100,000 LodgeNet Entertainment Corp.* 1,716,406 1,884,000 LEISURE (3.50%) 25,000 Electronic Arts, Inc.* 1,507,264 1,294,500 125,000 JAMDAT Mobile, Inc.* 2,357,879 2,155,000 50,000 Shanda Interactive Entertainment, Ltd. ADR* 761,449 1,510,000 ------------ ------------ 4,626,592 4,959,500 MANUFACTURING (2.98%) 350,000 Flextronics Intl., Ltd.* 4,060,705 4,214,000 MEDIA (9.14%) 75,000 DreamWorks Animation SKG, Inc.* 2,478,202 3,053,250 100,000 iVillage, Inc.* 450,455 609,000 100,000 Loudeye Corp.* 158,450 148,000 666,667 Loudeye Corp.*@ 1,000,000 937,334 235,000 Time Warner, Inc.* 3,756,499 4,124,250 120,000 Yahoo! Inc.* 1,697,714 4,068,000 ------------ ------------ 9,541,320 12,939,834 REAL ESTATE SERVICES (3.14%) 40,000 CoStar Group, Inc.* 702,258 1,474,000 700,000 homestore, Inc.* 1,869,779 1,554,000 100,000 ZipRealty, Inc.* 1,340,046 1,409,000 ------------ ------------ 3,912,083 4,437,000 RETAIL - SPECIALTY STORES (4.74%) 25,000 Blue Nile, Inc.* 711,722 691,250 200,000 FTD Group, Inc.* 2,615,940 2,424,000 100,000 Provide Commerce, Inc.* 1,505,617 2,888,000 100,000 Varsity Group, Inc.* 416,633 700,000 ------------ ------------ 5,249,912 6,703,250 ------------ ------------ TOTAL COMMON STOCKS 99,571,019 133,845,882 ------------ ------------ - ---------------------------------------------------------------------------- WARRANTS (0.00%) - ---------------------------------------------------------------------------- MEDIA 200,000 Loudeye Corp. Warrants Exp 12/23/2010*@ 0 0 ------------ ------------ Principal Amount - ---------------------------------------------------------------------------- SHORT TERM MONEY MARKET INSTRUMENTS (4.94%) - ---------------------------------------------------------------------------- $7,000,000 Exxon Investment Corp. 2.68% due 04/01/2005 7,000,000 7,000,000 ------------ ------------ TOTAL INVESTMENTS (99.51%) $106,571,019 140,845,882 ============ CASH AND OTHER ASSETS LESS LIABILITIES (0.49%) 686,994 ------------ NET ASSETS (EQUIVALENT TO $8.10 PER SHARE BASED ON 17,466,307 SHARES OUTSTANDING) $141,532,876 ============
- --------------- % Represents percentage of net assets @ See Note 6 regarding restricted securities. * Non-income producing securities See Notes to Financial Statements. 10 BARON iOPPORTUNITY FUND - -------------------------------------------------------------------------------- TOP 10 HOLDINGS (AS A PERCENTAGE OF NET ASSETS) AS OF MARCH 31, 2005
- -------------------------------------------------------------------------------- % OF NET BARON iOPPORTUNITY FUND ASSETS - -------------------------------------------------------------------------------- Apollo Group, Inc., Cl A 3.1% Dell, Inc. 3.1% Flextronics Intl., Ltd. 3.0% Monster Worldwide, Inc. 3.0% Charles Schwab Corp. 3.0% E*TRADE Financial Corp. 3.0% Time Warner, Inc. 2.9% American Tower Corp. 2.9% eBay, Inc. 2.9% InfoSpace, Inc. 2.9% ----- 29.8% =====
TOP TEN INDUSTRY GROUPS AS OF MARCH 31, 2005 (AS A PERCENTAGE OF NET ASSETS) [PIE CHART GRAPHIC]
Financial Services Cash and Cash Business Advertising - Brokerage and Enterprise Equivalents Services Communications Services Media Exchanges Hardware Education 5.43% 13.17% 11.06% 10.26% 9.14% 7.65% 7.49% 5.63% Retail - Consumer Specialty Services Stores Leisure Other 5.30% 4.74% 3.50% 16.63%
See Notes to Financial Statements. 11 BARON FIFTH AVENUE GROWTH FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - ------------------------------------------------------------------------------ COMMON STOCKS (94.23%) - ------------------------------------------------------------------------------ ADVERTISING SERVICES (4.11%) 17,500 Getty Images, Inc.* $ 1,206,795 $ 1,244,425 8,500 Google, Inc.* 1,346,438 1,534,335 ------------ ------------ 2,553,233 2,778,760 BUSINESS SERVICES (3.31%) 17,170 Cintas Corp. 743,279 709,293 36,000 Iron Mountain, Inc.* 1,125,567 1,038,240 15,000 Paychex, Inc. 543,152 492,300 ------------ ------------ 2,411,998 2,239,833 CABLE (1.48%) 30,000 Comcast Corp., Cl A* 856,320 1,002,000 COMMUNICATIONS (2.98%) 75,000 American Tower Corp., Cl A* 1,386,158 1,367,250 8,500 Research in Motion, Ltd.* 663,806 649,570 ------------ ------------ 2,049,964 2,016,820 COMMUNICATIONS EQUIPMENT (1.49%) 27,500 QUALCOMM, Inc. 963,283 1,007,875 COMPUTER TECHNOLOGY (0.62%) 10,000 Apple Computer, Inc.* 437,856 416,700 CONSULTING (1.61%) 13,500 Moody's Corp. 1,148,801 1,091,610 CONSUMER PRODUCTS (1.97%) 17,500 Avon Products, Inc. 709,329 751,450 10,000 Harley-Davidson, Inc. 567,174 577,600 ------------ ------------ 1,276,503 1,329,050 CONSUMER SERVICES (2.31%) 24,000 eBay, Inc.* 989,382 894,240 30,000 IAC/InterActiveCorp* 645,980 668,100 ------------ ------------ 1,635,362 1,562,340 EDUCATION (2.19%) 20,000 Apollo Group, Inc., Cl A* 1,564,427 1,481,200 ENERGY SERVICES (4.01%) 16,252 Kinder Morgan, Inc. 976,521 1,230,277 44,999 XTO Energy, Inc. 922,398 1,477,789 ------------ ------------ 1,898,919 2,708,066 ENTERPRISE HARDWARE (4.13%) 15,000 CDW Corp. 914,239 850,200 32,500 Dell, Inc.* 1,170,863 1,248,650 29,872 Intel Corp. 775,411 693,927 ------------ ------------ 2,860,513 2,792,777 FINANCIAL SERVICES - ASSET MANAGEMENT (1.76%) 20,000 T. Rowe Price Group, Inc. 1,230,391 1,187,600 FINANCIAL SERVICES - BANKING (2.01%) 10,000 Commerce Bancorp, Inc. 290,689 324,700 17,080 Golden West Financial Corp. 915,959 1,033,340 ------------ ------------ 1,206,648 1,358,040 FINANCIAL SERVICES - BROKERAGE & EXCHANGES (5.52%) 120,000 Charles Schwab Corp. 1,211,543 1,261,200 8,000 Chicago Mercantile Exchange Holdings, Inc. 1,590,831 1,552,240 76,500 E*TRADE Financial Corp.* 900,225 918,000 ------------ ------------ 3,702,599 3,731,440 FINANCIAL SERVICES - INSURANCE (2.12%) 8 Berkshire Hathaway, Inc., Cl A* 717,340 696,000 8,000 The Progressive Corp. 671,465 734,080 ------------ ------------ 1,388,805 1,430,080 GAMING SERVICES (1.58%) 40,000 International Game Technology 1,363,636 1,066,400 HEALTHCARE PRODUCTS (0.86%) 7,500 Zimmer Holdings, Inc.* 589,760 583,575
Shares Cost Value - ------------------------------------------------------------------------------ HEALTHCARE SERVICES (3.04%) 12,500 Fisher Scientific Intl., Inc.* $ 725,253 $ 711,500 11,500 Laboratory Corp. of America Holdings* 544,057 554,300 7,500 Quest Diagnostics, Inc. 746,735 788,475 ------------ ------------ 2,016,045 2,054,275 HEALTHCARE SERVICES - INSURANCE (3.57%) 12,190 UnitedHealth Group, Inc. 786,511 1,162,682 10,000 WellPoint, Inc.* 1,031,914 1,253,500 ------------ ------------ 1,818,425 2,416,182 HOME BUILDING (3.39%) 20,000 Centex Corp. 1,171,912 1,145,400 14,500 Toll Brothers, Inc.* 1,036,264 1,143,325 ------------ ------------ 2,208,176 2,288,725 HOTELS AND LODGING (0.52%) 5,000 Four Seasons Hotels, Inc. 265,523 353,500 LEISURE (0.77%) 10,000 Electronic Arts, Inc.* 626,075 517,800 MANUFACTURING (2.23%) 125,000 Flextronics Intl., Ltd.* 1,745,651 1,505,000 MEDIA (10.13%) 25,000 DreamWorks Animation SKG, Inc.* 987,335 1,017,750 85,000 News Corp., CL A 1,387,292 1,438,200 60,000 Time Warner, Inc.* 1,022,172 1,053,000 30,000 Univision Comm., Inc., Cl A* 921,468 830,700 40,000 Walt Disney Co. 986,362 1,149,200 40,000 Yahoo! Inc.* 1,179,856 1,356,000 ------------ ------------ 6,484,485 6,844,850 PHARMACEUTICAL (2.16%) 8,560 Amgen, Inc.* 485,566 498,278 10,375 Forest Laboratories, Inc.* 647,866 383,356 10,260 Genentech, Inc.* 600,436 580,818 ------------ ------------ 1,733,868 1,462,452 REAL ESTATE SERVICES (3.39%) 20,000 Kimco Realty Corp. 933,241 1,078,000 17,500 Vornado Realty Trust 1,014,866 1,212,225 ------------ ------------ 1,948,107 2,290,225 RECREATION AND RESORTS (4.68%) 27,500 Carnival Corp. 1,256,429 1,424,775 15,000 Las Vegas Sands Corp.* 435,000 675,000 15,000 MGM Mirage, Inc.* 650,610 1,062,300 ------------ ------------ 2,342,039 3,162,075 RESTAURANTS (0.96%) 12,500 Starbucks Corp.* 510,036 645,750 RETAIL - CONSUMER STAPLES (6.75%) 20,260 Costco Wholesale Corp. 795,743 895,087 20,000 CVS Corp. 979,957 1,052,400 20,000 Target Corp. 886,152 1,000,400 10,000 Wal-Mart Stores, Inc. 540,263 501,100 25,000 Walgreen Co. 906,299 1,110,500 ------------ ------------ 4,108,414 4,559,487 RETAIL - SPECIALTY STORES (6.43%) 25,000 Bed Bath & Beyond, Inc.* 935,974 913,500 16,560 Best Buy Co., Inc. 853,854 894,405 22,030 Coach, Inc.* 896,085 1,247,559 15,000 Dollar Tree Stores, Inc.* 405,043 430,950 15,000 Lowe's Companies, Inc. 777,213 856,350 ------------ ------------ 3,868,169 4,342,764
See Notes to Financial Statements. 12 BARON FIFTH AVENUE GROWTH FUND - -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
Shares Cost Value - ---------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) TRANSPORTATION (2.15%) 20,000 United Parcel Service, Inc. $ 1,559,900 $ 1,454,800 ------------ ------------ TOTAL COMMON STOCKS 60,373,931 63,682,051 ------------ ------------ Principal Amount - ---------------------------------------------------------------------------- SHORT TERM MONEY MARKET INSTRUMENTS (7.59%) - ---------------------------------------------------------------------------- $5,129,999 Exxon Investment Corp. 2.68% due 04/01/2005 5,129,999 5,129,999 ------------ ------------ TOTAL INVESTMENTS (101.82%) $ 65,503,930 68,812,050 ============ LIABILITIES LESS CASH AND OTHER ASSETS (-1.82%) (1,228,119) ------------ NET ASSETS (EQUIVALENT TO $10.45 PER SHARE BASED ON 6,465,918 SHARES OUTSTANDING) $ 67,583,931 ============
- --------------- % Represents percentage of net assets * Non-income producing securities - -------------------------------------------------------------------------------- TOP 10 HOLDINGS (AS A PERCENTAGE OF NET ASSETS) AS OF MARCH 31, 2005
- -------------------------------------------------------------------------------- % OF NET BARON FIFTH AVENUE GROWTH FUND ASSETS - -------------------------------------------------------------------------------- Chicago Mercantile Exchange Holdings, Inc. 2.3% Google, Inc. 2.3% Flextronics Intl., Ltd. 2.2% Apollo Group, Inc., Cl A 2.2% XTO Energy, Inc. 2.2% United Parcel Service, Inc. 2.2% The News Corp., Ltd. 2.1% Carnival Corp. 2.1% American Tower Corp. 2.0% Yahoo! Inc. 2.0% ----- 21.6% =====
TOP TEN INDUSTRY GROUPS AS OF MARCH 31, 2005 (AS A PERCENTAGE OF NET ASSETS) [PIE CHART GRAPHIC]
Cash and Cash Retail - Consumer Retail - Financial Services Recreation Equivalents Media Staples Specialty Stores Brokerage & Exchanges and Resorts Enterprise Hardware 5.77% 10.13% 6.75% 6.43% 5.52% 4.68% 4.13% Healthcare Advertising Energy Services Real Estate Services Services - Insurance Services Other 4.11% 4.01% 3.57% 3.39% 41.51%
See Notes to Financial Statements. 13 BARON FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- MARCH 31, 2005 (UNAUDITED)
BARON ASSET BARON GROWTH BARON SMALL CAP BARON iOPPORTUNITY BARON FIFTH AVENUE FUND FUND FUND FUND GROWTH FUND -------------- -------------- --------------- ------------------ ------------------ ASSETS: Investments in securities, at value $2,469,171,093 $4,563,074,464 $2,528,717,014 $140,845,882 $68,812,050 Unaffiliated issuers (Cost $1,076,604,791, $2,830,049,083, $1,481,179,210, $106,571,019 and $65,503,930, respectively) "Affiliated" issuers (Cost $213,583,811, $368,975,088, $294,653,513, $0 and $0, respectively) Cash 38,213 1,742,065 1,137,697 19,944 80,234 Dividends and interest receivable 996,869 644,751 562,899 516 7,985 Receivable for securities sold 0 0 6,822,922 841,610 79,141 Receivable for shares sold 3,364,560 14,301,125 40,375,444 118,664 90,575 Prepaid expenses 132,869 0 0 0 2,101 Due from Adviser (see Note 4) 0 0 0 57,917 75,517 -------------- -------------- -------------- ------------ ----------- 2,473,703,604 4,579,762,405 2,577,615,976 141,884,533 69,147,603 -------------- -------------- -------------- ------------ ----------- LIABILITIES: Payable for securities purchased 4,519,915 18,265,127 7,709,289 180,000 1,462,958 Payable for shares redeemed 16,726,409 7,723,680 1,209,207 75,600 18,380 Accrued expenses and other payables 130,731 378,753 224,020 96,057 82,334 -------------- -------------- -------------- ------------ ----------- 21,377,055 26,367,560 9,142,516 351,657 1,563,672 -------------- -------------- -------------- ------------ ----------- NET ASSETS $2,452,326,549 $4,553,394,845 $2,568,473,460 $141,532,876 $67,583,931 ============== ============== ============== ============ =========== NET ASSETS CONSIST OF: Capital paid-in $1,235,527,178 $3,109,830,853 $1,757,561,079 $198,736,198 $64,896,752 Accumulated net investment loss (10,532,037) (15,690,718) (9,363,669) (732,929) (179,255) Accumulated net realized gain (loss) 48,348,917 95,204,417 67,391,759 (90,745,256) (441,686) Net unrealized appreciation on investments 1,178,982,491 1,364,050,293 752,884,291 34,274,863 3,308,120 -------------- -------------- -------------- ------------ ----------- NET ASSETS $2,452,326,549 $4,553,394,845 $2,568,473,460 $141,532,876 $67,583,931 ============== ============== ============== ============ =========== SHARES OUTSTANDING ($.01 PAR VALUE; INDEFINITE SHARES AUTHORIZED) 46,974,954 100,043,912 115,813,955 17,466,307 6,465,918 ============== ============== ============== ============ =========== NET ASSET VALUE PER SHARE $ 52.20 $ 45.51 $ 22.18 $ 8.10 $ 10.45 ============== ============== ============== ============ ===========
See Notes to Financial Statements. 14 BARON FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
BARON ASSET BARON GROWTH BARON SMALL CAP BARON iOPPORTUNITY BARON FIFTH AVENUE FUND FUND FUND FUND GROWTH FUND ------------ ------------ --------------- ------------------ ------------------ INVESTMENT INCOME: INCOME: Interest $ 833,880 $ 5,524,681 $ 2,843,712 $ 304,886 $ 53,672 Dividends -- unaffiliated issuers (net of withholding taxes of $0, $0, $26,474, $0 and $0, respectively) 3,966,140 4,819,843 1,690,322 93,325 173,775 Dividends -- "affiliated" issuers 0 0 763,680 0 0 ------------ ------------ ------------ ---------- ---------- Total income 4,800,020 10,344,524 5,297,714 398,211 227,447 ------------ ------------ ------------ ---------- ---------- EXPENSES: Investment advisory fees 11,412,018 19,647,898 10,904,106 754,093 290,501 Distribution fees 2,853,004 4,911,974 2,726,027 188,523 72,625 Shareholder servicing agent fees 356,890 383,600 329,690 77,464 16,195 Reports to shareholders 497,500 677,400 460,000 99,668 52,664 Professional fees 40,358 53,023 36,544 14,085 12,134 Registration and filing fees 64,656 170,325 88,010 45,127 33,284 Custodian fees 26,085 55,199 41,174 4,384 2,306 Trustee fees 32,494 56,097 31,052 2,164 833 Miscellaneous 49,052 79,726 44,780 3,549 1,677 ------------ ------------ ------------ ---------- ---------- Total expenses 15,332,057 26,035,242 14,661,383 1,189,057 482,219 Less: Expense reimbursement by investment adviser (see Note 4) 0 0 0 (57,917) (75,517) ------------ ------------ ------------ ---------- ---------- Net expenses 15,332,057 26,035,242 14,661,383 1,131,140 406,702 ------------ ------------ ------------ ---------- ---------- Net investment loss (10,532,037) (15,690,718) (9,363,669) (732,929) (179,255) ------------ ------------ ------------ ---------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on investments sold in unaffiliated issuers 47,431,299 152,645,359 67,790,134 6,106,251 (62,301) Net realized gain (loss) on investments sold in "affiliated" issuers 2,917,951 (8,177,779) 7,543,047 0 0 Change in net unrealized appreciation of investments 275,145,431 438,333,144 280,282,311 3,243,844 2,712,365 ------------ ------------ ------------ ---------- ---------- Net gain on investments 325,494,681 582,800,724 355,615,492 9,350,095 2,650,064 ------------ ------------ ------------ ---------- ---------- Net increase in net assets resulting from operations $314,962,644 $567,110,006 $346,251,823 $8,617,166 $2,470,809 ============ ============ ============ ========== ==========
See Notes to Financial Statements. 15 BARON FUNDS - ------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) - -------------------------------------------------------------------------------
BARON SMALL BARON ASSET FUND BARON GROWTH FUND CAP FUND -------------------------------- -------------------------------- -------------- SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED ENDED MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005 2004 2005 2004 2005 -------------- --------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment loss $ (10,532,037) $ (18,014,501) $ (15,690,718) $ (24,506,425) $ (9,363,669) Net realized gain (loss) on investments sold 50,349,250 150,574,805 144,467,580 43,766,255 75,333,181 Change in net unrealized appreciation on investments 275,145,431 224,051,657 438,333,144 429,735,044 280,282,311 -------------- -------------- -------------- -------------- -------------- Increase in net assets resulting from operations 314,962,644 356,611,961 567,110,006 448,994,874 346,251,823 -------------- -------------- -------------- -------------- -------------- DIVIDENDS TO SHAREHOLDERS FROM: Net realized gain on investments (126,683,892) 0 0 0 (53,166,236) -------------- -------------- -------------- -------------- -------------- CAPITAL SHARE TRANSACTIONS: Proceeds from the sale of shares 345,170,912 319,598,701 1,190,261,619 1,101,986,308 665,360,441 Net asset value of shares issued in reinvestment of dividends 124,712,972 0 0 0 51,062,420 Cost of shares redeemed (208,228,923) (630,993,904) (339,580,739) (600,780,062) (223,156,534) -------------- -------------- -------------- -------------- -------------- Increase (decrease) in net assets derived from capital share transactions 261,654,961 (311,395,203) 850,680,880 501,206,246 493,266,327 Redemption fees 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- Net increase in net assets 449,933,713 45,216,758 1,417,790,886 950,201,120 786,351,914 NET ASSETS: Beginning of period 2,002,392,836 1,957,176,078 3,135,603,959 2,185,402,839 1,782,121,546 -------------- -------------- -------------- -------------- -------------- End of period $2,452,326,549 $2,002,392,836 $4,553,394,845 $3,135,603,959 $2,568,473,460 ============== ============== ============== ============== ============== ACCUMULATED NET INVESTMENT LOSS AT END OF PERIOD $ (10,532,037) $ 0 $ (15,690,718) $ 0 $ (9,363,669) ============== ============== ============== ============== ============== SHARES OF BENEFICIAL INTEREST: Shares sold 6,672,962 6,999,058 27,215,518 30,112,173 30,840,320 Shares issued in reinvestment of dividends 2,538,428 0 0 0 2,476,351 Shares redeemed (4,048,598) (14,050,959) (7,738,878) (16,479,769) (10,434,449) -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) 5,162,792 (7,051,901) 19,476,640 13,632,404 22,882,222 ============== ============== =============== =============== ============== BARON SMALL BARON FIFTH AVENUE CAP FUND BARON iOPPORTUNITY FUND GROWTH FUND --------------- --------------------------- -------------------------------- FOR THE PERIOD FOR THE SIX MONTHS FOR THE SIX MONTHS APRIL 30, 2004 YEAR ENDED ENDED YEAR ENDED ENDED (COMMENCEMENT SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, OF OPERATIONS) TO 2004 2005 2004 2005 SEPTEMBER 30, 2004 -------------- ------------ ------------- ----------- ------------------ INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment loss $ (14,217,791) $ (732,929) $ (1,680,384) $ (179,255) $ (119,983) Net realized gain (loss) on investments sold 64,809,243 6,106,251 15,694,215 (62,301) (379,385) Change in net unrealized appreciation on investments 77,954,557 3,243,844 272,386 2,712,365 595,755 -------------- ------------ ------------ ----------- ----------- Increase in net assets resulting from operations 128,546,009 8,617,166 14,286,217 2,470,809 96,387 -------------- ------------ ------------ ----------- ----------- DIVIDENDS TO SHAREHOLDERS FROM: Net realized gain on investments 0 0 0 0 0 -------------- ------------ ------------ ----------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from the sale of shares 841,501,715 29,932,176 72,422,016 22,543,222 50,428,908 Net asset value of shares issued in reinvestment of dividends 0 0 0 0 0 Cost of shares redeemed (398,469,810) (31,051,244) (62,396,543) (6,729,541) (1,225,854) -------------- ------------ ------------ ----------- ----------- Increase (decrease) in net assets derived from capital share transactions 443,031,905 (1,119,068) 10,025,473 15,813,681 49,203,054 Redemption fees 0 102,983 315,784 0 0 -------------- ------------ ------------ ----------- ----------- Net increase in net assets 571,577,914 7,601,081 24,627,474 18,284,490 49,299,441 NET ASSETS: Beginning of period 1,210,543,632 133,931,795 109,304,321 49,299,441 0 -------------- ------------ ------------ ----------- ----------- End of period $1,782,121,546 $141,532,876 $133,931,795 $67,583,931 $49,299,441 ============== ============ ============ =========== =========== ACCUMULATED NET INVESTMENT LOSS AT END OF PERIOD $ 0 $ (732,929) $ 0 $ (179,255) $ 0 ============== ============ ============ =========== =========== SHARES OF BENEFICIAL INTEREST: Shares sold 43,517,215 3,516,916 9,311,007 2,121,848 5,111,117 Shares issued in reinvestment of dividends 0 0 0 0 0 Shares redeemed (20,734,514) (3,712,539) (8,528,450) (641,480) (125,567) -------------- ------------ ------------ ----------- ----------- NET INCREASE (DECREASE) 22,782,701 (195,623) 782,557 1,480,368 4,985,550 ============== ============ ============ =========== ===========
See Notes to Financial Statements. 16 BARON FUNDS - ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - ------------------------------------------------------------------------------- (1) ORGANIZATION. Baron Investment Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end management investment company established as a Massachusetts business trust on February 19, 1987. The Trust currently offers five series (individually a "Fund" and collectively the "Funds"): Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity Fund, and Baron Fifth Avenue Growth Fund. Prior to October 22, 2004, the name of the Trust was Baron Asset Fund. The investment objectives of the Funds are as follows: Baron Asset Fund seeks capital appreciation through long-term investments in securities of small and medium sized companies with undervalued assets or favorable growth prospects. Baron Growth Fund seeks capital appreciation through long-term investments primarily in the securities of small growth companies. Baron Small Cap Fund seeks capital appreciation through investments primarily in securities of small companies. Baron iOpportunity Fund seeks capital appreciation through investments in growth business that benefit from technology advances. Baron Fifth Avenue Growth Fund seeks capital appreciation through investments primarily in the securities of larger growth companies. (2) SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of significant accounting policies followed by the Funds. The policies are in conformity with accounting principles generally accepted in the United States of America. (a) SECURITY VALUATION. Portfolio securities traded on any national stock exchange are valued based on the last sale price. For securities traded on NASDAQ, the Funds use the NASDAQ Official Closing Price. Securities traded in foreign markets are valued using prices reported by local foreign markets and translated into U.S. dollars using the mean of the bid and offer prices of such currencies at the time the net asset value is determined. Where market quotations are not readily available, or in the Adviser's judgment, they do not accurately reflect fair value of a security, or an event occurs after the market close but before the Funds are priced that materially affects the value of a security, the securities will be valued by the Adviser using procedures established by the Board of Trustees. The Adviser has a fair valuation committee comprised of senior executives and members of the Board. Factors the committee uses include whether the security is thinly traded, transactions are infrequent, or quotations are genuine. There can be no assurance, however, that a fair valuation used by the Funds on any given day will more accurately reflect the market value of an investment than the closing price of such investment in its market. Debt instruments having a remaining maturity greater than sixty days will be valued at the highest bid price from the dealer maintaining an active market in that security or on the basis of prices obtained from a pricing service approved by the Board of Trustees. Money market instruments held by the Funds with a remaining maturity of sixty days or less are valued at amortized cost, which approximates value. (b) SECURITIES TRANSACTIONS, INVESTMENT INCOME AND EXPENSE ALLOCATION. Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on an identified cost basis for financial reporting and federal income tax purposes. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. The Funds are charged for those expenses that are directly attributable to each Fund, such as advisory and custodian fees. Expenses that are not directly attributable to a Fund are typically allocated among the Funds in proportion to their respective net assets. (c) FEDERAL INCOME TAXES. Each Fund of the Trust is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and to distribute all of its taxable income, including net realized capital gains, if any, to its shareholders. No federal income tax provision is therefore required. (d) RESTRICTED SECURITIES. The Funds invest in securities which are restricted as to public sale in accordance with the Securities Act of 1933. Such assets are valued at fair value as determined in good faith by the Board of Trustees. (e) DISTRIBUTIONS. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. (f) SHORT-TERM TRADING FEE. Baron iOpportunity Fund imposes a 1% short-term trading fee on redemptions and exchanges of shares held for less than six months. The fee is retained by Baron iOpportunity for the benefit of the remaining shareholders to offset the administrative costs associated with processing redemptions and exchanges, offset the portfolio transaction costs and facilitate portfolio management. The fee is accounted for as an addition to paid in capital. (g) USE OF ESTIMATES. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the amounts of income and expenses during the period. Actual results could differ from those estimates. 17 BARON FUNDS - ------------------------------------------------------------------------------- (h) COMMITMENTS AND CONTINGENCIES. In the normal course of business, the Funds may enter into contracts and agreements that contain a variety of representations and warranties, which provide general indemnification. The maximum exposure to the Funds under these agreements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. (3) PURCHASES AND SALES OF SECURITIES. Purchases and sales of securities, other than short term securities, for the six months ended March 31, 2005 were as follows: FUND PURCHASES SALES - ---- --------- ----- Baron Asset Fund $172,184,874 $ 98,655,251 Baron Growth Fund $879,583,839 $341,420,418 Baron Small Cap Fund $560,399,454 $321,759,957 Baron iOpportunity Fund $ 53,446,183 $ 55,115,242 Baron Fifth Avenue Growth Fund $ 29,963,649 $ 14,042,530 (4) INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES. (a) INVESTMENT ADVISORY FEES. BAMCO, Inc. (the "Adviser"), a wholly owned subsidiary of Baron Capital Group, Inc. ("BCG"), serves as investment adviser to the Funds. As compensation for services rendered, the Adviser receives a fee payable monthly from the assets of the Funds equal to 1% per annum of each Fund's average daily net asset value. For Baron iOpportunity Fund and Baron Fifth Avenue Growth Fund, the Adviser has contractually agreed to reduce its fee to the extent required to limit the operating expense to 1.50% and 1.40% of average daily net assets, respectively. The reimbursements for the six months ended March 31, 2005 are included in the Statement of Operations. (b) DISTRIBUTION FEES. Baron Capital, Inc. ("BCI"), a wholly owned subsidiary of BCG, is a registered broker-dealer and the distributor of the shares of the Funds pursuant to a distribution plan under Rule 12b-1 of the 1940 Act. The distribution plan authorizes the Funds to pay BCI a distribution fee equal on an annual basis to 0.25% of the Funds' average daily net assets. Brokerage transactions for the Funds may be effected by or through BCI. During the six months ended March 31, 2005, BCI earned gross brokerage commissions as follows: FUND COMMISSIONS - ---- ----------- Baron Asset Fund $ 92,058 Baron Growth Fund $411,216 Baron Small Cap Fund $322,091 Baron iOpportunity Fund $ 51,779 Baron Fifth Avenue Growth Fund $ 18,294 (c) TRUSTEE FEES. Certain Trustees of the Trust may be deemed to be affiliated with or interested persons (as defined by the 1940 Act) of the Funds' Adviser or of BCI. None of the Trustees so affiliated received compensation for his or her services as a Trustee of the Trust. None of the Funds' officers received compensation from the Funds. (5) LINE OF CREDIT. The Funds have entered into a line of credit agreement with the custodian bank to be used for temporary purposes, primarily for financing redemptions. The agreement provides that Baron Asset Fund may borrow up to 5% of the value of its net assets. Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity Fund, and Baron Fifth Avenue Growth Fund may borrow up to 15% of each Fund's respective net assets. The aggregate outstanding principal amount of all loans to any of the Funds may not exceed $100,000,000. Interest is charged to each Fund, based on its borrowings, at a rate per annum equal to the Federal Funds Rate plus a margin of 1.00% to 2.00% depending on the duration of the loan. A commitment fee of 0.10% per annum is incurred on the unused portion of the line of credit and is allocated to the participating Funds. The Funds did not borrow from the line of credit during the six months ended March 31, 2005. 18 BARON FUNDS - ------------------------------------------------------------------------------- (6) RESTRICTED AND ILLIQUID SECURITIES. At March 31, 2005, investments in securities included securities that are restricted and/or illiquid. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. At March 31, 2005, the Funds held investments in restricted and illiquid securities that were valued under approved methods by the Board, as follows: BARON ASSET FUND ACQUISITION NAME OF ISSUER DATE VALUE - -------------- ---- ----- COMMON STOCK Wynn Resorts, Ltd. 04/17/01 $ 93,917,283 CONVERTIBLE PREFERRED STOCK Apollo International, Inc., S-A CV Pfd. 07/21/99 400,000 Somerford Corp. S-A Conv. Pfd. 12/03/98 8,999,993 CORPORATE BONDS Somerford Corp. 8.50% Sub. Conv. Deb Due 04/23/2006 04/23/01 3,000,000 WARRANTS Corrections Corporation of America Warrants Exp 09/29/2005 09/29/00 1,737,589 ------------ TOTAL RESTRICTED SECURITIES: (Cost $44,030,788) (4.41% of Net Assets) $108,054,865 ============ BARON GROWTH FUND ACQUISITION NAME OF ISSUER DATE VALUE - -------------- ---- ----- COMMON STOCK Wynn Resorts, Ltd. 04/22/02 $ 34,601,128 CONVERTIBLE PREFERRED STOCK Reliant Pharmaceuticals LLC Series D 10/28/03 7,500,000 ------------ TOTAL RESTRICTED SECURITIES: (Cost $26,063,956) (0.92% of Net Assets) $ 42,101,128 ============ BARON SMALL CAP FUND ACQUISITION NAME OF ISSUER DATE VALUE - -------------- ---- ----- COMMON STOCK BJ's Restaurants, Inc. 03/10/05 $ 4,362,750 WARRANTS Casual Male Retail Group, Inc. Warrants Exp 04/26/2007 05/15/02 3,402,000 Casual Male Retail Group, Inc. Warrants Exp 07/02/2010 07/03/03 173,000 Infocrossing, Inc. Warrants Exp 10/16/2008 10/16/03 1,776,149 ------------ TOTAL RESTRICTED SECURITIES: (Cost $6,072,935) (0.38% of Net Assets) $ 9,713,899 ============ BARON iOPPORTUNITY FUND ACQUISITION NAME OF ISSUER DATE VALUE - -------------- ---- ----- COMMON STOCK Loudeye Corp. 12/22/04 $ 937,334 WARRANTS Loudeye Corp. Warrants Exp 12/23/2010 12/22/04 -- ------------ TOTAL RESTRICTED SECURITIES: (Cost $1,000,000) (0.66% of Net Assets) $ 937,334 ============ 19 BARON FUNDS - ------------------------------------------------------------------------------- (7) INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS. As of March 31, 2005, the components of net assets on a tax basis were as follows:
BARON BARON FIFTH BARON ASSET BARON GROWTH BARON SMALL CAP iOPPORTUNITY AVENUE GROWTH FUND FUND FUND FUND FUND -------------- -------------- --------------- ------------ ------------- Cost of investments $1,292,187,942 $3,211,539,612 $1,777,027,028 $109,486,120 $65,529,692 ============== ============== ============== ============ =========== Gross tax unrealized appreciation 1,182,385,260 1,443,263,403 785,962,110 36,330,832 5,526,804 Gross tax unrealized depreciation (5,402,109) (91,728,551) (34,272,124) (4,971,070) (2,244,446) -------------- -------------- -------------- ------------ ----------- Net tax unrealized appreciation $1,176,983,151 $1,351,534,852 $ 751,689,986 $ 31,359,762 $ 3,282,358 ============== ============== ============== ============ ===========
As of September 30, 2004, the Funds had capital loss carryforwards expiring as follows: 2009 (8,303,528) 2010 (63,691,646) 2011 (36,632,125) (21,811,904) -------------- -------------- -------------- ------------ ----------- $ -- $ (36,632,125) $ -- $(93,807,078) $ -- ============== ============== ============== ============ ===========
Net investment loss and realized and unrealized gains and losses differ for financial statement and tax purposes due to differing treatments of wash sale losses deferred, losses realized subsequent to October 31 on the sale of securities and net operating losses. (8) INVESTMENT IN "AFFILIATES"* DURING THE SIX MONTHS ENDED MARCH 31, 2005. BARON ASSET FUND
BALANCE OF GROSS GROSS SALES BALANCE OF SHARES HELD ON PURCHASES AND SHARES HELD ON VALUE NAME OF ISSUER SEP. 30, 2004 AND ADDITIONS REDUCTIONS MAR. 31, 2005 MAR. 31, 2005 - ---------------------------------------------------------------------------------------------------------------------------- Alexander's, Inc. 314,000 314,000 $ 75,831,000 Apollo International, Inc. S-A CV Pfd. 105,264 105,264 400,000 ChoicePoint, Inc. 4,600,000 100,000 4,500,000 180,495,000 Kerzner Intl., Ltd. 2,400,000 2,400,000 146,952,000 Saga Comm., Inc., Cl A 1,000,000 1,000,000 ** Vail Resorts, Inc. Cl A 3,000,000 3,000,000 75,750,000 ------------ TOTAL INVESTMENT IN "AFFILIATES" (19.5% OF NET ASSETS) $479,428,000 ============ DIVIDEND INCOME NAME OF ISSUER OCT. 1-MAR. 31, 2005 - ----------------------------------------------------------------- Alexander's, Inc. Apollo International, Inc. S-A CV Pfd. ChoicePoint, Inc. Kerzner Intl., Ltd. Saga Comm., Inc., Cl A Vail Resorts, Inc. Cl A -- TOTAL INVESTMENT IN "AFFILIATES" (19.5% OF NET ASSETS) $0 ==
- --------------- ** As of March 31, 2005, no longer an affiliate. - ------------------------------------------------------------------------------- 20 BARON FUNDS - ------------------------------------------------------------------------------- (8) INVESTMENT IN "AFFILIATES"* DURING THE SIX MONTHS ENDED MARCH 31, 2005. (CONTINUED) BARON GROWTH FUND
BALANCE OF GROSS GROSS SALES BALANCE OF SHARES HELD ON PURCHASES AND SHARES HELD ON VALUE NAME OF ISSUER SEP. 30, 2004 AND ADDITIONS REDUCTIONS MAR. 31, 2005 MAR. 31, 2005 - ---------------------------------------------------------------------------------------------------------------------------- AMEIRGROUP, Corp. ^ 1,900,000 1,900,000 3,800,000 $138,928,000 Arch Capital Group, Ltd. 1,650,000 1,650,000 ** Carter's, Inc. 1,200,000 250,000 1,450,000 57,637,500 Centene Corp. + 1,600,000 1,600,000 3,200,000 95,968,000 DeVry, Inc. 2,250,000 1,450,000 3,700,000 70,004,000 Encore Acquisition Co. 2,200,000 250,000 2,450,000 101,185,000 Isle of Capri Casinos, Inc. 1,275,000 225,000 1,500,000 39,810,000 Kerzner Intl., Ltd. 1,800,000 1,800,000 110,214,000 Odyssey Healthcare, Inc. 1,575,000 1,020,550 770,550 1,825,000 21,462,000 ------------ TOTAL INVESTMENT IN "AFFILIATES" (14.0% OF NET ASSETS) $635,208,500 ============ DIVIDEND INCOME NAME OF ISSUER OCT. 1-MAR. 31, 2005 - ----------------------------------------------------------------- AMEIRGROUP, Corp. ^ Arch Capital Group, Ltd. Carter's, Inc. Centene Corp. + DeVry, Inc. Encore Acquisition Co. Isle of Capri Casinos, Inc. Kerzner Intl., Ltd. Odyssey Healthcare, Inc. -- TOTAL INVESTMENT IN "AFFILIATES" (14.0% OF NET ASSETS) $0 ==
- --------------- ^ Received 1,900,000 shares from 2:1 stock split. + Received 1,600,000 shares from 2:1 stock split. ** As of March 31, 2005, no longer an affiliate. - ------------------------------------------------------------------------------- BARON SMALL CAP FUND
BALANCE OF GROSS GROSS SALES BALANCE OF SHARES HELD ON PURCHASES AND SHARES HELD ON VALUE NAME OF ISSUER SEP. 30, 2004 AND ADDITIONS REDUCTIONS MAR. 31, 2005 MAR. 31, 2005 - ---------------------------------------------------------------------------------------------------------------------------- Cash Systems, Inc. -- 1,500,000 1,500,000 $ 11,205,000 Casual Male Retail Group, Inc. 1,157,503 1,157,503 7,512,194 Casual Male Retail Group, Inc., Warrants Exp 04/26/2007 1,407,353 1,407,353 3,402,000 Casual Male Retail Group, Inc., Warrants Exp 07/02/2010 100,000 100,000 173,000 Design Within Reach, Inc. 350,000 750,000 1,100,000 17,308,500 Digital Theater Systems, Inc. 1,300,000 200,000 1,500,000 27,165,000 Eagle Materials, Inc., Cl B 800,000 100,000 900,000 70,920,000 Eagle Materials, Inc. 45,600 45,600 3,690,864 EMAK Worldwide, Inc. 500,000 480,572 19,428 ** Great Wolf Resorts, Inc. -- 1,850,000 1,850,000 46,157,500 Immucor, Inc.+ 1,987,500 875,000 462,500 2,400,000 72,456,000 Kensey Nash Corp. 525,000 125,000 650,000 17,602,000 LECG Corp. 1,650,000 1,650,000 32,340,000 MarineMax, Inc. 651,300 348,700 1,000,000 31,180,000 Measurement Specialties, Inc. 343,700 487,300 6,000 825,000 18,975,000 Provide Commerce, Inc. 900,000 85,193 814,807 23,531,626 ------------ TOTAL INVESTMENT IN "AFFILIATES" (14.9% OF NET ASSETS) $383,618,684 ============ DIVIDEND INCOME NAME OF ISSUER OCT. 1-MAR. 31, 2005 - ----------------------------------------------------------------- Cash Systems, Inc. Casual Male Retail Group, Inc. Casual Male Retail Group, Inc., Warrants Exp 04/26/2007 Casual Male Retail Group, Inc., Warrants Exp 07/02/2010 Design Within Reach, Inc. Digital Theater Systems, Inc. Eagle Materials, Inc., Cl B $750,000 Eagle Materials, Inc. 13,680 EMAK Worldwide, Inc. Great Wolf Resorts, Inc. Immucor, Inc.+ Kensey Nash Corp. LECG Corp. MarineMax, Inc. Measurement Specialties, Inc. Provide Commerce, Inc. -------- TOTAL INVESTMENT IN "AFFILIATES" (14.9% OF NET ASSETS) $763,680 ========
- --------------- + Received 875,000 shares from 3:2 stock split. ** As of March 31, 2005, no longer an affiliate. - ------------------------------------------------------------------------------- * Affiliated issuers, as defined in the Investment Company Act of 1940, are issuers in which a Fund held 5% or more of the outstanding voting securities during the six months ended March 31, 2005. 21 BARON FUNDS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (9) FINANCIAL HIGHLIGHTS BARON ASSET FUND Selected data for a share of beneficial interest outstanding throughout each period:
SIX MONTHS YEAR ENDED SEPTEMBER 30, ENDED ----------------------------------------------------------------- MARCH 31, 2005 2004 2003 2002 2001 2000 1999 -------------- -------- -------- -------- -------- -------- -------- NET ASSET VALUE, BEGINNING OF PERIOD $ 47.89 $ 40.05 $ 35.65 $ 40.22 $ 63.35 $ 51.57 $ 39.96 -------- -------- -------- -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (0.22) (0.43) (0.46) (0.55) (0.65) (0.76) (0.30) Net realized and unrealized gains (losses) on investments 7.52 8.27 6.04 0.05 (17.87) 12.53 11.94 -------- -------- -------- -------- -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS 7.30 7.84 5.58 (0.50) (18.52) 11.77 11.64 -------- -------- -------- -------- -------- -------- -------- LESS DISTRIBUTIONS Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00 (0.04) Distributions from net realized gains (2.99) 0.00 (1.18) (4.07) (4.61) 0.00 0.00 -------- -------- -------- -------- -------- -------- -------- TOTAL DISTRIBUTIONS (2.99) 0.00 (1.18) (4.07) (4.61) 0.00 (0.04) -------- -------- -------- -------- -------- -------- -------- Capital contribution 0.00 0.00 0.00 0.00 0.00 0.01 0.01 -------- -------- -------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $ 52.20 $ 47.89 $ 40.05 $ 35.65 $ 40.22 $ 63.35 $ 51.57 ======== ======== ======== ======== ======== ======== ======== TOTAL RETURN 15.6%+ 19.6% 16.1% (2.5%) (31.2%) 22.8%^ 29.2%* -------- -------- -------- -------- -------- -------- -------- RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $2,452.3 $2,002.4 $1,957.2 $2,055.2 $2,692.3 $4,917.4 $5,863.1 Ratio of total expenses to average net assets 1.34%** 1.34% 1.34% 1.35% 1.37% 1.36% 1.31% Less: Ratio of interest expense to average net assets 0.00%** 0.00% 0.00% (0.02%) (0.01%) (0.03%) 0.00% -------- -------- -------- -------- -------- -------- -------- Ratio of operating expenses to average net assets 1.34%** 1.34% 1.34% 1.33% 1.36% 1.33% 1.31% ======== ======== ======== ======== ======== ======== ======== Ratio of net investment income (loss) to average net assets (0.92%)** (0.90%) (1.14%) (1.16%) (1.14%) (1.09%) (0.57%) Portfolio turnover rate 4.44%+ 19.57% 27.95% 6.01% 4.33% 2.51% 15.64% YEAR ENDED SEPTEMBER 30, ------------------------------- 1998 1997 1996 -------- -------- -------- NET ASSET VALUE, BEGINNING OF PERIOD $ 47.43 $ 35.50 $ 29.30 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) 0.05 (0.14) (0.06) Net realized and unrealized gains (losses) on investments (7.52) 12.11 6.29 -------- -------- -------- TOTAL FROM INVESTMENT OPERATIONS (7.47) 11.97 6.23 -------- -------- -------- LESS DISTRIBUTIONS Dividends from net investment income 0.00 0.00 0.00 Distributions from net realized gains 0.00 (0.04) (0.03) -------- -------- -------- TOTAL DISTRIBUTIONS 0.00 (0.04) (0.03) -------- -------- -------- Capital contribution 0.00 0.00 0.00 -------- -------- -------- NET ASSET VALUE, END OF PERIOD $ 39.96 $ 47.43 $ 35.50 ======== ======== ======== TOTAL RETURN (15.7%) 33.8% 21.3% -------- -------- -------- RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $4,410.5 $3,224.5 $1,166.1 Ratio of total expenses to average net assets 1.32% 1.35% 1.40% Less: Ratio of interest expense to average net assets 0.00% 0.00% 0.00% -------- -------- -------- Ratio of operating expenses to average net assets 1.32% 1.35% 1.40% ======== ======== ======== Ratio of net investment income (loss) to average net assets 0.11% (0.52%) (0.29%) Portfolio turnover rate 23.43% 13.23% 19.34%
- --------------- ^ Had the adviser not made the capital contribution, the Fund's performance would have been reduced by 0.02%. * Had the adviser not made the capital contribution, the Fund's performance would have been reduced by 0.03%. ** Annualized + Not annualized 22 BARON FUNDS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (9) FINANCIAL HIGHLIGHTS (CONTINUED) BARON GROWTH FUND Selected data for a share of beneficial interest outstanding throughout each period:
SIX MONTHS YEAR ENDED SEPTEMBER 30, ENDED ----------------------------------------------------------- MARCH 31, 2005 2004 2003 2002 2001 2000 1999 -------------- -------- -------- -------- ------ ------ ------ NET ASSET VALUE, BEGINNING OF PERIOD $ 38.92 $ 32.65 $ 26.96 $ 27.18 $32.26 $29.06 $20.32 -------- -------- -------- -------- ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (0.16) (0.30) (0.25) (0.23) (0.22) (0.26) (0.04) Net realized and unrealized gains (losses) on investments 6.75 6.57 5.94 1.65 (1.67) 5.34 8.82 -------- -------- -------- -------- ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 6.59 6.27 5.69 1.42 (1.89) 5.08 8.78 -------- -------- -------- -------- ------ ------ ------ LESS DISTRIBUTIONS Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00 (0.04) Distributions from net realized gains 0.00 0.00 0.00 (1.64) (3.19) (1.88) 0.00 -------- -------- -------- -------- ------ ------ ------ TOTAL DISTRIBUTIONS 0.00 0.00 0.00 (1.64) (3.19) (1.88) (0.04) -------- -------- -------- -------- ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 45.51 $ 38.92 $ 32.65 $ 26.96 $27.18 $32.26 $29.06 ======== ======== ======== ======== ====== ====== ====== TOTAL RETURN 16.9%+ 19.2% 21.1% 5.0% (6.1%) 18.6% 43.2% -------- -------- -------- -------- ------ ------ ------ RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $4,553.4 $3,135.6 $2,185.4 $1,030.3 $512.3 $533.4 $439.4 Ratio of total expenses to average net assets 1.32%** 1.33% 1.36% 1.35% 1.36% 1.36% 1.40% Less: Ratio of interest expense to average net assets 0.00%** 0.00% 0.00% 0.00% 0.00% 0.00% (0.03%) -------- -------- -------- -------- ------ ------ ------ Ratio of operating expenses to average net assets 1.32%** 1.33% 1.36% 1.35% 1.36% 1.36% 1.37% ======== ======== ======== ======== ====== ====== ====== Ratio of net investment income (loss) to average net assets (0.80%)** (0.89%) (1.11%) (1.02%) (0.79%) (0.78%) (0.20%) Portfolio turnover rate 9.77%+ 27.15% 32.63% 18.31% 34.94% 39.00% 53.36% YEAR ENDED SEPTEMBER 30, ------------------------- 1998 1997 1996 ------ ------ ------ NET ASSET VALUE, BEGINNING OF PERIOD $24.89 $18.40 $14.77 ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) 0.06 0.06 0.11 Net realized and unrealized gains (losses) on investments (4.56) 6.68 3.66 ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS (4.50) 6.74 3.77 ------ ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.02) (0.09) (0.04) Distributions from net realized gains (0.05) (0.16) (0.10) ------ ------ ------ TOTAL DISTRIBUTIONS (0.07) (0.25) (0.14) ------ ------ ------ NET ASSET VALUE, END OF PERIOD $20.32 $24.89 $18.40 ====== ====== ====== TOTAL RETURN (18.1%) 37.1% 25.8% ------ ------ ------ RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $315.6 $390.8 $207.2 Ratio of total expenses to average net assets 1.43% 1.40% 1.54% Less: Ratio of interest expense to average net assets (0.06%) 0.00% 0.00% ------ ------ ------ Ratio of operating expenses to average net assets 1.37% 1.40% 1.54% ====== ====== ====== Ratio of net investment income (loss) to average net assets 0.21% 0.37% 1.20% Portfolio turnover rate 40.38% 25.17% 40.27%
- --------------- ** Annualized. + Not Annualized The Fund's custodian's offset of custody fees amounted to less than $0.01 per share in 1996. The expense offset amounts are included in expense data above. 23 BARON FUNDS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (9) FINANCIAL HIGHLIGHTS (CONTINUED) BARON SMALL CAP FUND Selected data for a share of beneficial interest outstanding throughout each period:
SIX MONTHS YEAR ENDED SEPTEMBER 30, ENDED ------------------------------------------------------------------- MARCH 31, 2005 2004 2003 2002 2001 2000 1999 1998 -------------- -------- -------- ------ ------ ------ ------ ------ NET ASSET VALUE, BEGINNING OF PERIOD $ 19.18 $ 17.26 $ 13.73 $12.69 $16.05 $13.37 $ 8.61 $10.00 -------- -------- -------- ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS Net investment loss (0.08) (0.15) (0.11) (0.14) (0.11) (0.16) (0.10) (0.02) Net realized and unrealized gains (losses) on investments 3.63 2.07 4.02 1.18 (2.87) 2.84 4.86 (1.37) -------- -------- -------- ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 3.55 1.92 3.91 1.04 (2.98) 2.68 4.76 (1.39) -------- -------- -------- ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Distributions from net realized gains (0.55) 0.00 (0.38) 0.00 (0.38) 0.00 0.00 0.00 -------- -------- -------- ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.55) 0.00 (0.38) 0.00 (0.38) 0.00 0.00 0.00 -------- -------- -------- ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 22.18 $ 19.18 $ 17.26 $13.73 $12.69 $16.05 $13.37 $ 8.61 ======== ======== ======== ====== ====== ====== ====== ====== TOTAL RETURN 18.7%+ 11.1% 29.2% 8.2% (18.8%) 20.0% 55.3% (13.9%) -------- -------- -------- ------ ------ ------ ------ ------ RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $2,568.5 $1,782.1 $1,210.5 $719.1 $585.9 $879.5 $715.7 $403.7 Ratio of expenses to average net assets 1.34%** 1.33% 1.36% 1.36% 1.35% 1.33% 1.34% 1.39% Ratio of net investment loss to average net assets (0.86%)** (0.88%) (0.87%) (0.97%) (0.68%) (0.90%) (0.99%) (0.20%) Portfolio turnover rate 16.37%+ 32.92% 30.29% 55.07% 55.77% 53.18% 42.69% 59.68%
- --------------- ** Annualized + Not annualized 24 BARON FUNDS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (9) FINANCIAL HIGHLIGHTS (CONTINUED) BARON iOPPORTUNITY FUND Selected data for a share of beneficial interest outstanding throughout each period:
SIX MONTHS YEAR ENDED SEPTEMBER 30, ENDED --------------------------------------------- MARCH 31, 2005 2004 2003 2002 2001 2000* -------------- ------ ------ ------ ------- ------ NET ASSET VALUE, BEGINNING OF PERIOD $ 7.58 $ 6.48 $ 3.63 $ 4.09 $ 8.76 $10.00 ------ ------ ------ ------ ------- ------ INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (0.04) (0.10) (0.05) (0.06) (0.05) 0.03 Net realized and unrealized gains (losses) on investments 0.55 1.18 2.89 (0.40) (4.59) (1.28) ------ ------ ------ ------ ------- ------ TOTAL FROM INVESTMENT OPERATIONS 0.51 1.08 2.84 (0.46) (4.64) (1.25) ------ ------ ------ ------ ------- ------ LESS DISTRIBUTIONS Dividends from net investment income 0.00 0.00 0.00 0.00 (0.03) 0.00 Distributions from net realized gains 0.00 0.00 0.00 0.00 0.00 0.00 ------ ------ ------ ------ ------- ------ TOTAL DISTRIBUTIONS 0.00 0.00 0.00 0.00 (0.03) 0.00 ------ ------ ------ ------ ------- ------ Redemption fees added to paid in capital 0.01 0.02 0.01 0.00# 0.00# 0.01 ------ ------ ------ ------ ------- ------ NET ASSET VALUE, END OF PERIOD $ 8.10 $ 7.58 $ 6.48 $ 3.63 $ 4.09 $ 8.76 ====== ====== ====== ====== ======= ====== TOTAL RETURN ^ 6.9%+ 17.0% 78.5% (11.2%) (53.1%) (12.4%)+ ------ ------ ------ ------ ------- ------ RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $141.5 $133.9 $109.3 $ 57.5 $ 73.7 $188.2 Ratio of total expenses to average net assets 1.58%** 1.56% 1.67% 1.65% 1.55% 1.53%** Less: Expense reimbursement by investment adviser (0.08%)** (0.06%) (0.17%) (0.15%) (0.05%) (0.03%)** ------ ------ ------ ------ ------- ------ Ratio of net expenses to average net assets 1.50%** 1.50% 1.50% 1.50% 1.50% 1.50%** ====== ====== ====== ====== ======= ====== Ratio of net investment income (loss) to average net assets (0.97%)** (1.25%) (1.18%) (1.20%) (0.75%) 0.46%** Portfolio turnover rate 39.01%+ 86.35% 89.72% 96.41% 123.30% 31.47%+
- --------------- * For the period February 29, 2000 (Commencement of Operations) to September 30, 2000. ** Annualized. + Not Annualized # Less than $0.01 per share. ^ The total returns would have been lower had certain expenses not been reduced during the periods shown. 25 BARON FUNDS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (9) FINANCIAL HIGHLIGHTS (CONTINUED) BARON FIFTH AVENUE GROWTH FUND Selected data for a share of beneficial interest outstanding throughout the period: FOR THE PERIOD SIX MONTHS APRIL 30, 2004 ENDED (COMMENCEMENT OF OPERATIONS) MARCH 31, 2005 TO SEPTEMBER 30, 2004 -------------- ---------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.89 $10.00 ------ ------ INCOME FROM INVESTMENT OPERATIONS Net investment loss (0.03) (0.02) Net realized and unrealized gains (losses) on investments 0.59 (0.09) ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.56 (0.11) ------ ------ LESS DISTRIBUTIONS Dividends from net investment income 0.00 0.00 Distributions from net realized gains 0.00 0.00 ------ ------ TOTAL DISTRIBUTIONS 0.00 0.00 ------ ------ NET ASSET VALUE, END OF PERIOD $10.45 $ 9.89 ====== ====== TOTAL RETURN ^ 5.7%+ (1.1%)+ ------ ------ RATIOS/SUPPLEMENTAL DATA Net assets (in millions), end of period $ 67.6 $ 49.3 Ratio of total expenses to average net assets 1.66%** 1.67%** Less: Expense reimbursement by investment adviser (0.26%)** (0.27%)** ------ ------ Ratio of net expenses to average net assets 1.40%** 1.40%** ====== ====== Ratio of net investment loss to average net assets (0.62%)** (0.79%)** Portfolio turnover rate 26.26%+ 7.58%+ - --------------- ** Annualized. + Not Annualized ^ The total returns would have been lower had certain expenses not been reduced during the periods shown. 26 [Registered Logo] B A R O N F U N D S(r) MAR05 Item 2. Code of Ethics. Not applicable at this time. This item is applicable to annual reports. Item 3. Audit Committee Financial Expert. Not applicable at this time. This item is applicable to annual reports. Item 4. Principal Accountant Fees and Services. Not applicable at this time. This item is applicable to annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable at this time. This item is applicable to annual reports. Item 6. Schedule of Investments. Please see Item 1. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. NOT APPLICABLE. Item 8. Portfolio Managers of Closed-End Management Investment Companies. NOT APPLICABLE. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. NOT APPLICABLE. Item 10. Submission of Matters to a Vote of Security Holders. NOT APPLICABLE. Item 11. Controls and Procedures. (a) The Registrant's principal executive officer and principal financial officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "1940 Act")) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 15d-15(b) under the Securities Exchange Act of 1934, as amended. (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. Item 11. Exhibits. a). Ex-99.COE Not applicable at this time. This item is applicable to annual reports. b). Ex-99.CERT Certification pursuant to Item 10(b) of the Form N-CSR. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BARON INVESTMENT FUNDS TRUST By: /s/ Ronald Baron ------------------- Ronald Baron President and Chief Executive Officer Date: June 9, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Ronald Baron -------------------- Ronald Baron President and Chief Executive Officer Date: June 9, 2005 By: /s/ Peggy Wong -------------------- Peggy Wong Treasurer and Chief Financial Officer Date: June 9, 2005 A signed original of this written statement has been provided to Baron Investment Funds Trust (formerly known as Baron Asset Fund) and will be retained by Baron Investment Funds Trust and furnished to the Securities and Exchange Commission or its staff upon request. EX-99 2 n-csrcertifications0305.txt CERTIFICATIONS I, RONALD BARON, certify that: 1. I have reviewed this report on Form N-CSR of Baron Investment Funds Trust (formerly known as Baron Asset Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within in those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over finanicial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over finanical reporting. Date: June 9, 2005 /s/ Ronald Baron --------------------------------- Ronald Baron President and Chief Executive Officer I, Peggy Wong, certify that: 1. I have reviewed this report on Form N-CSR of Baron Investment Funds Trust (formerly known as Baron Asset Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within in those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over finanicial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over finanical reporting. Date: June 9, 2005 /s/ Peggy Wong ------------------------------------- Peggy Wong Treasurer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----