B A R O N
                                   F U N D S(r)

                               >Baron Asset Fund
                               >Baron Growth Fund
                             >Baron Small Cap Fund
                            >Baron iOpportunity Fund
                        >Baron Fifth Avenue Growth Fund

       Supplement dated August 10, 2006 to Prospectus dated June 1, 2006


     Effective  immediately,  the Baron Growth Fund and the Baron Small Cap Fund
are each  open to new  investors.  The  prospectus  of the Baron  Funds(r)  (the
"Funds") is modified as follows in connection with the re-opening of these funds
to new investors.

          On page 1 of the prospectus, the asterisk after Baron Growth Fund and
     Baron Small Cap Fund and the footnote are each deleted.

          On page 3 of the prospectus, under "WHAT ARE THE INVESTMENT
     GOALS OF THE FUNDS?" the phase "Closed to New Investors" underneath
     Baron Growth Fund and the Baron Small Cap Fund is deleted.

          On pages 19 and 20 of the prospectus, the heading "CLOSED FUNDS"
     and the three paragraphs beneath it are deleted.

          On page 21 of the prospectus, the second sentence of the first full
     paragraph stating that "BARON GROWTH FUND AND BARON SMALL CAP
     FUND are currently closed to new investors." is deleted.

          On page 25 of the prospectus, the second sentence of the first full
     paragraph under the heading "HOW TO EXCHANGE SHARES" stating that
     "Since BARON GROWTH FUND AND BARON SMALL CAP FUND are
     closed to new investors, YOU MAY NOT EXCHANGE INTO EITHER BARON
     GROWTH FUND AND BARON SMALL CAP FUND UNLESS YOU ARE AN
     EXISTING SHAREHOLDER." is deleted.


This information  supplements the prospectus dated June 1, 2006. This supplement
and the prospectus  constitute a current prospectus.  To request another copy of
the   prospectus,   please   call   1-800-992-2766   or  visit  our  website  at
BaronFunds.com.




                               >Baron Asset Fund
                               >Baron Growth Fund
                              >Baron Small Cap Fund
                             >Baron iOpportunity Fund
                         >Baron Fifth Avenue Growth Fund

                      Supplement dated August 10, 2006 to
             Statement of Additional Information dated June 1, 2006


     Effective  immediately,  the Baron Growth Fund and the Baron Small Cap Fund
are each open to new investors.  The statement of additional  information of the
Baron  Funds(r) (the "Funds") is modified as follows in connection  with the re-
opening of these funds to new investors.

     On page 3 of the statement of additional  information,  the double asterisk
     after Baron  Growth Fund and the Baron Small Cap Fund and the  footnote are
     each deleted.


This information  supplements the statement of additional information dated June
1, 2006.  This  supplement and the statement of additional  constitute a current
statement of additional. To request another copy of the prospectus and statement
of additional  information,  please call  1-800-992-2766 or visit our website at
BaronFunds.com.