Table of Contents
|
OMB APPROVAL | ||||
| OMB Number: | 3235-0570 | |||
| Expires: | June 30, 2017 | |||
| Estimated average burden | ||||
| Hours per response
|
20.6 | |||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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)
Patrick M. Patalino, General Counsel
c/o Baron Investment Funds Trust
767 Fifth Avenue, 49th Floor
New York, NY 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, 2017
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. 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507.
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 (5-07)
Item 1. Report to Stockholders.
Table of Contents
Baron Asset Fund
Baron Growth Fund
Baron Small Cap Fund
Baron Opportunity Fund
Baron Fifth Avenue Growth Fund
Baron Discovery Fund
March 31, 2017
Baron Funds®
DEAR BARON FUNDS SHAREHOLDER:
In this report, you will find unaudited financial statements for Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund, Baron Fifth Avenue Growth Fund and Baron Discovery Fund (the “Funds”) for the six months ended March 31, 2017. The U.S. Securities and Exchange Commission (the “SEC”) requires mutual funds to furnish these statements semi-annually to their shareholders. We hope you find these statements informative and useful.
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,
|
|
| ||
| Ronald Baron Chief Executive Officer and Chief Investment Officer May 19, 2017 |
Linda S. Martinson Chairman, President and Chief Operating Officer May 19, 2017 |
Peggy Wong Treasurer and Chief Financial Officer May 19, 2017 |
This Semi-Annual Financial Report is for the Baron Investment Funds Trust, which currently has six series: Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund, Baron Fifth Avenue Growth Fund and Baron Discovery Fund. If you are interested in the Baron Select Funds, which contains the Baron Partners Fund, Baron Focused Growth Fund, Baron International Growth Fund, Baron Real Estate Fund, Baron Emerging Markets Fund, Baron Energy and Resources Fund and Baron Global Advantage Fund series, please visit the Funds’ website at www.BaronFunds.com or contact us at 1-800-99BARON.
The Funds’ Proxy Voting Policy is available without charge and can be found on the Funds’ website at www.BaronFunds.com, by clicking on the “Legal Notices” link at the bottom left corner of the homepage or by calling 1-800-99BARON 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 and on the SEC’s website.
The Funds file their complete schedules 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’ Forms 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 1-202-551-8090. A copy of the Funds’ Forms N-Q may also be obtained upon request by calling 1-800-99BARON. Schedules of portfolio holdings current to the most recent quarter are also available on the Funds’ website.
Some of the comments contained in this report are based on current management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. You can identify forward-looking statements by words such as “estimate,” “may,” “expect,” “should,” “could,” “believe,” “plan” and other similar terms. We cannot promise future returns and our opinions are a reflection of our best judgment at the time this report is compiled.
The views expressed in this report reflect those of BAMCO, Inc. (“BAMCO” or the “Adviser”) only through the end of the period stated in this report. The views are not intended as recommendations or investment advice to any person reading this report and are subject to change at any time without notice based on market and other conditions.
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. For more complete information about Baron Funds, including charges and expenses, call, write or go to www.BaronFunds.com for a prospectus or summary prospectus. Read them carefully before you invest or send money. This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds, unless accompanied or preceded by the Funds’ current prospectus or summary prospectus.
Table of Contents
| Baron Asset Fund (Unaudited) | March 31, 2017 |
COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTMENT IN BARON ASSET FUND (RETAIL SHARES)
IN RELATION TO THE RUSSELL MIDCAP GROWTH INDEX AND THE S&P 500 INDEX
| AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MARCH 31, 2017 | ||||||||||||||||||||||||
| Six Months* |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception (June 12, 1987) |
|||||||||||||||||||
| Baron Asset Fund — Retail Shares1,2 |
10.08% | 18.82% | 8.34% | 12.37% | 7.25% | 11.23% | ||||||||||||||||||
| Baron Asset Fund — Institutional Shares1,2,4 |
10.24% | 19.15% | 8.64% | 12.69% | 7.48% | 11.31% | ||||||||||||||||||
| Baron Asset Fund — R6 Shares1,2,4 |
10.22% | 19.13% | 8.63% | 12.68% | 7.48% | 11.31% | ||||||||||||||||||
| Russell Midcap Growth Index1 |
7.38% | 14.07% | 7.88% | 11.95% | 8.13% | 9.83% | 3 | |||||||||||||||||
| S&P 500 Index1 |
10.12% | 17.17% | 10.37% | 13.30% | 7.51% | 9.59% | ||||||||||||||||||
| * | Not Annualized. |
| 1 | The indexes are unmanaged. The Russell MidcapTM Growth Index measures the performance of medium-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | For the period June 30, 1987 to March 31, 2017. |
| 4 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to January 29, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
2
Table of Contents
| March 31, 2017 (Unaudited) | Baron Asset Fund |
| † | Industry sector group levels are provided by the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI, Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
3
Table of Contents
| Baron Growth Fund (Unaudited) | March 31, 2017 |
COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTMENT IN BARON GROWTH FUND (RETAIL SHARES)
IN RELATION TO THE RUSSELL 2000 GROWTH INDEX AND THE S&P 500 INDEX
| AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MARCH 31, 2017 | ||||||||||||||||||||||||
| Six Months* |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception (December 31, 1994) |
|||||||||||||||||||
| Baron Growth Fund — Retail Shares1,2 |
10.18% | 16.70% | 5.27% | 11.54% | 7.19% | 12.81% | ||||||||||||||||||
| Baron Growth Fund — Institutional Shares1,2,3 |
10.32% | 17.01% | 5.54% | 11.83% | 7.40% | 12.91% | ||||||||||||||||||
| Baron Growth Fund — R6 Shares1,2,3 |
10.32% | 16.99% | 5.54% | 11.83% | 7.40% | 12.91% | ||||||||||||||||||
| Russell 2000 Growth Index1 |
9.11% | 23.03% | 6.72% | 12.10% | 8.06% | 7.71% | ||||||||||||||||||
| S&P 500 Index1 |
10.12% | 17.17% | 10.37% | 13.30% | 7.51% | 9.72% | ||||||||||||||||||
| * | Not Annualized. |
| 1 | The indexes are unmanaged. The Russell 2000® Growth Index measures the performance of small-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to January 29, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
4
Table of Contents
| March 31, 2017 (Unaudited) | Baron Growth Fund |
| † | Industry sector group levels are provided by the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI, Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
5
Table of Contents
| Baron Small Cap Fund (Unaudited) | March 31, 2017 |
COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTMENT IN BARON SMALL CAP FUND (RETAIL SHARES) IN RELATION TO THE RUSSELL 2000 GROWTH INDEX AND THE S&P 500 INDEX
| AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MARCH 31, 2017 | ||||||||||||||||||||||||
| Six Months* |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception (September 30, 1997) |
|||||||||||||||||||
| Baron Small Cap Fund — Retail Shares1,2 |
9.90% | 22.74% | 5.09% | 10.50% | 7.03% | 9.57% | ||||||||||||||||||
| Baron Small Cap Fund — Institutional Shares1,2,3 |
10.05% | 23.07% | 5.36% | 10.78% | 7.25% | 9.68% | ||||||||||||||||||
| Baron Small Cap Fund — R6 Shares1,2,3 |
10.05% | 23.07% | 5.36% | 10.78% | 7.25% | 9.68% | ||||||||||||||||||
| Russell 2000 Growth Index1 |
9.11% | 23.03% | 6.72% | 12.10% | 8.06% | 5.63% | ||||||||||||||||||
| S&P 500 Index1 |
10.12% | 17.17% | 10.37% | 13.30% | 7.51% | 6.78% | ||||||||||||||||||
| * | Not Annualized. |
| 1 | The indexes are unmanaged. The Russell 2000® Growth Index measures the performance of small-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to January 29, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
6
Table of Contents
| March 31, 2017 (Unaudited) | Baron Small Cap Fund |
| † | Industry sector group levels are provided by the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI, Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
7
Table of Contents
| Baron Opportunity Fund (Unaudited) | March 31, 2017 |
COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTMENT IN BARON OPPORTUNITY FUND† (RETAIL SHARES)
IN RELATION TO THE RUSSELL 3000 GROWTH INDEX AND THE S&P 500 INDEX
| AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MARCH 31, 2017 | ||||||||||||||||||||||||
| Six Months* |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception (February 29, 2000) |
|||||||||||||||||||
| Baron Opportunity Fund — Retail Shares1,2 |
7.95% | 18.72% | 3.18% | 7.82% | 7.23% | 5.04% | ||||||||||||||||||
| Baron Opportunity Fund — Institutional Shares1,2,3 |
8.12% | 19.09% | 3.47% | 8.10% | 7.46% | 5.17% | ||||||||||||||||||
| Baron Opportunity Fund — R6 Shares1,2,3 |
8.12% | 19.16% | 3.49% | 8.11% | 7.46% | 5.18% | ||||||||||||||||||
| Russell 3000 Growth Index1 |
9.94% | 16.27% | 10.90% | 13.22% | 9.04% | 3.21% | ||||||||||||||||||
| S&P 500 Index1 |
10.12% | 17.17% | 10.37% | 13.30% | 7.51% | 5.28% | ||||||||||||||||||
| * | Not Annualized. |
| † | The Fund’s historical performance was impacted by gains from IPOs and/or secondary offerings. There is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs and secondary offerings will be the same in the future. |
| 1 | The indexes are unmanaged. The Russell 3000® Growth Index measures the performance of those companies classified as growth among the largest 3,000 U.S. companies, and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser has reimbursed certain Fund expenses and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to August 31, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
8
Table of Contents
| March 31, 2017 (Unaudited) | Baron Opportunity Fund |
| † | Industry sector group levels are provided by the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI, Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
9
Table of Contents
| Baron Fifth Avenue Growth Fund (Unaudited) | March 31, 2017 |
COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTMENT IN BARON FIFTH AVENUE GROWTH FUND (RETAIL SHARES) IN RELATION TO THE RUSSELL 1000 GROWTH INDEX AND THE S&P 500 INDEX
| AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MARCH 31, 2017 | ||||||||||||||||||||||||
| Six Months* |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception (April 30, 2004) |
|||||||||||||||||||
| Baron Fifth Avenue Growth Fund — Retail Shares1,2 |
7.75% | 18.67% | 8.93% | 11.57% | 6.71% | 7.47% | ||||||||||||||||||
| Baron Fifth Avenue Growth Fund — Institutional Shares1,2,3 |
7.90% | 19.00% | 9.20% | 11.87% | 6.92% | 7.63% | ||||||||||||||||||
| Baron Fifth Avenue Growth Fund — R6 Shares1,2,3 |
7.90% | 19.06% | 9.21% | 11.88% | 6.92% | 7.63% | ||||||||||||||||||
| Russell 1000 Growth Index1 |
10.01% | 15.76% | 11.27% | 13.32% | 9.13% | 8.80% | ||||||||||||||||||
| S&P 500 Index1 |
10.12% | 17.17% | 10.37% | 13.30% | 7.51% | 8.28% | ||||||||||||||||||
| * | Not Annualized. |
| 1 | The indexes are unmanaged. The Russell 1000® Growth Index measures the performance of large-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser has reimbursed certain Fund expenses and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares. Performance for the R6 Shares prior to January 29, 2016 is based on the performance of the Institutional Shares, and prior to May 29, 2009 is based on the Retail Shares. The Retail Shares have a distribution fee, but Institutional Shares and R6 Shares do not. If the annual returns for the Institutional Shares and R6 Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. |
10
Table of Contents
| March 31, 2017 (Unaudited) | Baron Fifth Avenue Growth Fund |
| † | Industry sector group levels are provided by the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI, Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
11
Table of Contents
| Baron Discovery Fund (Unaudited) | March 31, 2017 |
COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTMENT IN BARON DISCOVERY FUND† (RETAIL SHARES)
IN RELATION TO THE RUSSELL 2000 GROWTH INDEX AND THE S&P 500 INDEX
| AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MARCH 31, 2017 | ||||||||||||||||
| Six Months* |
One Year |
Three Years |
Since Inception (September 30, 2013) |
|||||||||||||
| Baron Discovery Fund — Retail Shares1,2 |
11.49% | 41.47% | 6.36% | 12.91% | ||||||||||||
| Baron Discovery Fund — Institutional Shares1,2 |
11.63% | 41.89% | 6.61% | 13.18% | ||||||||||||
| Baron Discovery Fund — R6 Shares1,2,3 |
11.70% | 41.98% | 6.63% | 13.20% | ||||||||||||
| Russell 2000 Growth Index1 |
9.11% | 23.03% | 6.72% | 8.28% | ||||||||||||
| S&P 500 Index1 |
10.12% | 17.17% | 10.37% | 12.55% | ||||||||||||
| * | Not Annualized. |
| † | The Fund’s historical performance was impacted by gains from IPOs and/or secondary offerings. There is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs and secondary offerings will be the same in the future. |
| 1 | The indexes are unmanaged. The Russell 2000® Growth Index measures the performance of small-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. |
| 2 | Past performance is not predictive of future performance. The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. The Adviser has reimbursed certain Fund expenses and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. |
| 3 | Performance for the R6 Shares prior to August 31, 2016 is based on the performance of the Institutional Shares. |
12
Table of Contents
| March 31, 2017 (Unaudited) | Baron Discovery Fund |
| † | Industry sector group levels are provided by the Global Industry Classification Standard (“GICS”), developed and exclusively owned by MSCI, Inc. and Standard & Poor’s Financial Services LLC, unless otherwise stated that they have been classified by the Adviser. All GICS data is provided “as is” with no warranties. |
| 1 | Performance information reflects results of the Retail Shares. |
13
Table of Contents
| Baron Asset Fund | March 31, 2017 |
STATEMENT OF NET ASSETS (Unaudited)
|
MARCH 31, 2017
|
| 14 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Asset Fund |
STATEMENT OF NET ASSETS (Unaudited) (Continued)
|
MARCH 31, 2017
|
| See Notes to Financial Statements. | 15 |
Table of Contents
| Baron Growth Fund | March 31, 2017 |
STATEMENT OF NET ASSETS (Unaudited)
|
MARCH 31, 2017
|
| 16 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Growth Fund |
STATEMENT OF NET ASSETS (Unaudited) (Continued)
|
MARCH 31, 2017
|
| See Notes to Financial Statements. | 17 |
Table of Contents
| Baron Small Cap Fund | March 31, 2017 |
STATEMENT OF NET ASSETS (Unaudited)
|
MARCH 31, 2017
|
| 18 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Small Cap Fund |
STATEMENT OF NET ASSETS (Unaudited) (Continued)
|
MARCH 31, 2017
|
| See Notes to Financial Statements. | 19 |
Table of Contents
| Baron Opportunity Fund | March 31, 2017 |
STATEMENT OF NET ASSETS (Unaudited)
|
MARCH 31, 2017
|
| 20 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Fifth Avenue Growth Fund |
STATEMENT OF NET ASSETS (Unaudited)
|
MARCH 31, 2017
|
| See Notes to Financial Statements. | 21 |
Table of Contents
| Baron Discovery Fund | March 31, 2017 |
STATEMENT OF NET ASSETS (Unaudited)
|
MARCH 31, 2017
|
| 22 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Discovery Fund |
STATEMENT OF NET ASSETS (Unaudited) (Continued)
|
MARCH 31, 2017
|
| See Notes to Financial Statements. | 23 |
Table of Contents
| Baron Funds | March 31, 2017 |
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)
|
MARCH 31, 2017
|
| Baron Asset Fund |
Baron Growth Fund |
Baron Small Cap Fund |
Baron Opportunity Fund |
Baron Fifth Avenue Growth Fund |
Baron Discovery Fund |
|||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Investments in securities, at value* |
||||||||||||||||||||||||
| Unaffiliated investments |
$ | 2,656,468,932 | $ | 4,899,864,266 | $ | 3,279,810,140 | $ | 220,975,178 | $ | 151,641,912 | $ | 110,587,051 | ||||||||||||
| “Affiliated” investments |
— | 993,637,028 | 52,500,000 | — | — | — | ||||||||||||||||||
| Repurchase agreements, at value** |
25,551,931 | — | 40,676,306 | — | — | 12,037,372 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total investments, at value |
2,682,020,863 | 5,893,501,294 | 3,372,986,446 | 220,975,178 | 151,641,912 | 122,624,423 | ||||||||||||||||||
| Cash |
— | 54,682 | 75,125 | 67,668 | 74,005 | — | ||||||||||||||||||
| Receivable for securities sold |
7,746,967 | 19,447,268 | 4,871,947 | 570,362 | 221,278 | 153,424 | ||||||||||||||||||
| Receivable for shares sold |
6,739,791 | 52,076,617 | 5,846,745 | 208,409 | 70,958 | 11,506,835 | ||||||||||||||||||
| Dividends and interest receivable |
1,250,720 | 4,707,546 | 200,720 | 8,089 | 363 | 30,219 | ||||||||||||||||||
| Prepaid expenses |
33,896 | 77,061 | 44,790 | 2,632 | 1,929 | 6,176 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2,697,792,237 | 5,969,864,468 | 3,384,025,773 | 221,832,338 | 152,010,445 | 134,321,077 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Liabilities: |
||||||||||||||||||||||||
| Payable for shares redeemed |
6,717,018 | 52,493,416 | 6,688,192 | 117,857 | 19,458 | 38,224 | ||||||||||||||||||
| Payable for securities purchased |
4,466,809 | — | 2,747,244 | — | — | 14,837,182 | ||||||||||||||||||
| Trustee fees payable |
24,205 | 53,549 | 37,462 | 2,771 | 1,680 | 440 | ||||||||||||||||||
| Investment advisory fees payable (Note 4) |
608 | 155 | 18 | 816 | 751 | 466 | ||||||||||||||||||
| Distribution fees payable (Note 4) |
167 | 544 | 731 | 561 | 96 | 127 | ||||||||||||||||||
| Payable for borrowings against line of credit |
— | 14,000,000 | — | 500,000 | 300,000 | — | ||||||||||||||||||
| Accrued expenses and other payables |
177,646 | 457,996 | 385,758 | 43,878 | 42,653 | 45,235 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 11,386,453 | 67,005,660 | 9,859,405 | 665,883 | 364,638 | 14,921,674 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Assets |
$ | 2,686,405,784 | $ | 5,902,858,808 | $ | 3,374,166,368 | $ | 221,166,455 | $ | 151,645,807 | $ | 119,399,403 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Assets consist of: |
||||||||||||||||||||||||
| Paid-in capital |
$ | 947,670,392 | $ | 1,965,471,506 | $ | 1,351,568,324 | $ | 115,513,282 | $ | 85,335,269 | $ | 111,634,590 | ||||||||||||
| Undistributed (accumulated) net investment income (loss) |
(20,512,852 | ) | 8,193,777 | 290,838 | (3,393,289 | ) | (793,464 | ) | (277,136 | ) | ||||||||||||||
| Undistributed (accumulated) net realized gain (loss) on investments and foreign currency transactions |
127,982,725 | 307,108,357 | 284,178,419 | 19,754,893 | (8,736,163 | ) | (8,047,320 | ) | ||||||||||||||||
| Net unrealized appreciation on investments and foreign currency translations |
1,631,265,519 | 3,622,085,168 | 1,738,128,787 | 89,291,569 | 75,840,165 | 16,089,269 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Assets |
$ | 2,686,405,784 | $ | 5,902,858,808 | $ | 3,374,166,368 | $ | 221,166,455 | $ | 151,645,807 | $ | 119,399,403 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Retail Shares: |
||||||||||||||||||||||||
| Net Assets |
$ | 1,853,709,690 | $ | 2,735,249,812 | $ | 1,696,213,520 | $ | 178,693,377 | $ | 71,399,486 | $ | 47,797,539 | ||||||||||||
| Shares Outstanding ($0.01 par value; indefinite shares authorized) |
29,087,303 | 41,672,320 | 61,673,322 | 11,105,462 | 3,423,732 | 3,198,289 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Asset Value and Offering Price Per Share |
$ | 63.73 | $ | 65.64 | $ | 27.50 | $ | 16.09 | $ | 20.85 | $ | 14.94 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Institutional Shares: |
||||||||||||||||||||||||
| Net Assets |
$ | 824,077,418 | $ | 3,164,956,909 | $ | 1,600,015,958 | $ | 42,061,329 | $ | 78,758,566 | $ | 69,110,957 | ||||||||||||
| Shares Outstanding ($0.01 par value; indefinite shares authorized) |
12,557,782 | 47,135,693 | 56,515,005 | 2,541,693 | 3,719,423 | 4,584,547 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Asset Value and Offering Price Per Share |
$ | 65.62 | $ | 67.15 | $ | 28.31 | $ | 16.55 | $ | 21.17 | $ | 15.07 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| R6 Shares: |
||||||||||||||||||||||||
| Net Assets |
$ | 8,618,676 | $ | 2,652,087 | $ | 77,936,890 | $ | 411,749 | $ | 1,487,755 | $ | 2,490,907 | ||||||||||||
| Shares Outstanding ($0.01 par value; indefinite shares authorized) |
131,357 | 39,494 | 2,753,389 | 24,868 | 70,241 | 165,233 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Asset Value and Offering Price Per Share |
$ | 65.61 | $ | 67.15 | $ | 28.31 | $ | 16.56 | $ | 21.18 | $ | 15.08 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| *Investments in securities, at cost: |
||||||||||||||||||||||||
| Unaffiliated investments |
$ | 1,025,203,413 | $ | 1,848,154,682 | $ | 1,540,848,755 | $ | 131,683,609 | $ | 75,801,771 | $ | 94,497,101 | ||||||||||||
| “Affiliated” investments |
— | 423,261,444 | 53,333,301 | — | — | — | ||||||||||||||||||
| **Repurchase agreements, at cost |
25,551,931 | — | 40,676,306 | — | — | 12,037,372 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total investments, at cost |
$ | 1,050,755,344 | $ | 2,271,416,126 | $ | 1,634,858,362 | $ | 131,683,609 | $ | 75,801,771 | $ | 106,534,473 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 24 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Funds |
STATEMENTS OF OPERATIONS (Unaudited)
|
FOR THE SIX MONTHS ENDED MARCH 31, 2017
|
| Baron Asset Fund |
Baron Growth Fund |
Baron Small Cap Fund |
Baron Opportunity Fund |
Baron Fifth Avenue Growth Fund |
Baron Discovery Fund |
|||||||||||||||||||
| Investment income: |
||||||||||||||||||||||||
| Income: |
||||||||||||||||||||||||
| Dividends — Unaffiliated investments |
$ | 8,070,303 | $ | 26,377,518 | $ | 25,741,319 | $ | 207,952 | $ | 495,026 | $ | 106,599 | ||||||||||||
| Dividends — “Affiliated” investments |
— | 9,393,248 | — | — | — | — | ||||||||||||||||||
| Interest |
4,126 | 830 | 7,337 | 190 | 91 | 701 | ||||||||||||||||||
| Securities lending income, net |
— | 171,263 | — | 34,998 | — | 17,570 | ||||||||||||||||||
| Foreign taxes withheld on dividends |
— | — | (83,700 | ) | — | (3,572 | ) | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total income |
8,074,429 | 35,942,859 | 25,664,956 | 243,140 | 491,545 | 124,870 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Expenses: |
||||||||||||||||||||||||
| Investment advisory fees (Note 4) |
12,718,652 | 28,743,473 | 16,805,316 | 1,106,326 | 519,847 | 343,186 | ||||||||||||||||||
| Distribution fees — Retail Shares (Note 4) |
2,235,227 | 3,425,258 | 2,148,469 | 225,968 | 85,434 | 29,498 | ||||||||||||||||||
| Shareholder servicing agent fees and expenses — |
204,115 | 181,974 | 133,790 | 42,975 | 16,502 | 10,390 | ||||||||||||||||||
| Shareholder servicing agent fees and expenses — |
25,480 | 129,185 | 42,015 | 6,340 | 6,855 | 7,867 | ||||||||||||||||||
| Shareholder servicing agent fees and expenses — |
180 | 54 | 692 | 9 | 31 | 49 | ||||||||||||||||||
| Reports to shareholders |
204,400 | 488,000 | 474,600 | 44,890 | 5,585 | 7,027 | ||||||||||||||||||
| Registration and filing fees |
70,950 | 117,930 | 97,560 | 40,370 | 36,460 | 40,920 | ||||||||||||||||||
| Trustee fees and expenses |
59,033 | 130,575 | 81,676 | 5,548 | 3,681 | 977 | ||||||||||||||||||
| Custodian and fund accounting fees |
54,780 | 120,700 | 94,295 | 24,060 | 22,009 | 22,331 | ||||||||||||||||||
| Professional fees |
33,500 | 92,850 | 41,280 | 21,218 | 19,821 | 20,510 | ||||||||||||||||||
| Insurance expense |
19,762 | 47,485 | 28,550 | 2,089 | 1,247 | 205 | ||||||||||||||||||
| Line of credit fees |
16,121 | 36,035 | 21,087 | 1,409 | 939 | 448 | ||||||||||||||||||
| Administration fees |
15,120 | 15,025 | 14,970 | 15,120 | 15,095 | 15,095 | ||||||||||||||||||
| Miscellaneous expenses |
1,856 | 6,779 | 1,969 | 1,856 | 1,856 | 1,856 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total operating expenses |
15,659,176 | 33,535,323 | 19,986,269 | 1,538,178 | 735,362 | 500,359 | ||||||||||||||||||
| Interest expense on borrowings |
— | 95,259 | 2,612 | 5,066 | 4,080 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total expenses |
15,659,176 | 33,630,582 | 19,988,881 | 1,543,244 | 739,442 | 500,359 | ||||||||||||||||||
| Reimbursement of expenses by Adviser — |
— | — | — | — | (14,546 | ) | (35,972 | ) | ||||||||||||||||
| Reimbursement of expenses by Adviser — |
— | — | — | — | (4,138 | ) | (55,066 | ) | ||||||||||||||||
| Reimbursement of expenses by Adviser — |
— | — | — | — | (69 | ) | (2,426 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net expenses |
15,659,176 | 33,630,582 | 19,988,881 | 1,543,244 | 720,689 | 406,895 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net investment income (loss) |
(7,584,747 | ) | 2,312,277 | 5,676,075 | (1,300,104 | ) | (229,144 | ) | (282,025 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Realized and unrealized gain (loss) on investments: |
||||||||||||||||||||||||
| Net realized gain (loss) on investments sold — Unaffiliated investments |
131,197,345 | 325,569,034 | 304,958,818 | 20,735,800 | (3,913,333 | ) | 908,789 | |||||||||||||||||
| Net realized gain (loss) on investments sold — “Affiliated” investments |
— | 13,620,760 | (951,523 | ) | — | — | — | |||||||||||||||||
| Net realized gain (loss) on foreign currency transactions |
— | (21,699 | ) | 1,344 | — | 5 | (1,553 | ) | ||||||||||||||||
| Change in net unrealized appreciation (depreciation) of: |
||||||||||||||||||||||||
| Investments — Unaffiliated investments |
124,881,727 | 6,649,532 | 3,885,006 | (4,733,564 | ) | 15,020,078 | 8,623,772 | |||||||||||||||||
| Investments — “Affiliated” investments |
— | 210,204,043 | 5,989,831 | — | — | — | ||||||||||||||||||
| Foreign currency translations |
— | (230 | ) | 703 | — | (69 | ) | (681 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net gain on investments |
256,079,072 | 556,021,440 | 313,884,179 | 16,002,236 | 11,106,681 | 9,530,327 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase in net assets resulting from operations |
$ | 248,494,325 | $ | 558,333,717 | $ | 319,560,254 | $ | 14,702,132 | $ | 10,877,537 | $ | 9,248,302 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| See Notes to Financial Statements. | 25 |
Table of Contents
| Baron Funds | March 31, 2017 |
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
|
|
| Baron Asset Fund | Baron Growth Fund | Baron Small Cap Fund | ||||||||||||||||||||||
| For the Six Months Ended March 31, 2017 |
For the Year Ended September 30, 2016 |
For the Six Months Ended March 31, 2017 |
For the Year Ended September 30, 2016 |
For the Six Months Ended March 31, 2017 |
For the Year Ended September 30, 2016 |
|||||||||||||||||||
| Increase (Decrease) in Net Assets: |
||||||||||||||||||||||||
| Operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | (7,584,747 | ) | $ | (8,914,391 | ) | $ | 2,312,277 | $ | 15,241,504 | $ | 5,676,075 | $ | (20,432,156 | ) | |||||||||
| Net realized gain |
131,197,345 | 115,016,633 | 339,168,095 | 677,283,345 | 304,008,639 | 611,465,766 | ||||||||||||||||||
| Change in net unrealized appreciation (depreciation) |
124,881,727 | 162,597,930 | 216,853,345 | (261,093,859 | ) | 9,875,540 | (127,761,526 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Increase in net assets resulting from operations |
248,494,325 | 268,700,172 | 558,333,717 | 431,430,990 | 319,560,254 | 463,272,084 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Distributions to shareholders from: |
||||||||||||||||||||||||
| Net realized gain on investments — Retail Shares |
(81,908,923 | ) | (192,857,983 | ) | (315,911,802 | ) | (300,771,852 | ) | (325,929,736 | ) | (249,256,906 | ) | ||||||||||||
| Net realized gain on investments — Institutional Shares |
(32,742,122 | ) | (75,706,896 | ) | (335,828,188 | ) | (292,771,461 | ) | (293,355,641 | ) | (200,060,422 | ) | ||||||||||||
| Net realized gain on investments — R6 Shares |
(351,281 | ) | (2,496 | ) | (261,804 | ) | — | (720,045 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Decrease in net assets from distributions to shareholders |
(115,002,326 | ) | (268,567,375 | ) | (652,001,794 | ) | (593,543,313 | ) | (620,005,422 | ) | (449,317,328 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions: |
||||||||||||||||||||||||
| Proceeds from the sale of shares — Retail Shares |
40,682,080 | 74,173,128 | 97,838,594 | 209,973,033 | 103,434,488 | 159,998,217 | ||||||||||||||||||
| Proceeds from the sale of shares — Institutional Shares |
85,064,293 | 104,274,919 | 338,172,548 | 587,751,924 | 213,431,215 | 459,238,081 | ||||||||||||||||||
| Proceeds from the sale of shares — R6 Shares |
16,303 | 7,361,253 | 73,355 | 2,239,695 | 72,193,940 | 3,449,895 | ||||||||||||||||||
| Net asset value of shares issued in reinvestment of distributions — Retail Shares |
79,981,714 | 188,688,679 | 308,276,661 | 295,137,151 | 320,323,421 | 245,730,982 | ||||||||||||||||||
| Net asset value of shares issued in reinvestment of distributions — Institutional Shares |
31,600,055 | 73,173,688 | 322,216,695 | 276,721,034 | 272,997,394 | 184,345,711 | ||||||||||||||||||
| Net asset value of shares issues in reinvestment of distribution — R6 Shares |
351,281 | 2,496 | 261,804 | — | 720,045 | — | ||||||||||||||||||
| Cost of shares redeemed — Retail Shares |
(160,712,494 | ) | (260,675,946 | ) | (533,858,213 | ) | (1,016,386,109 | ) | (388,212,399 | ) | (1,178,412,830 | ) | ||||||||||||
| Cost of shares redeemed — Institutional Shares |
(57,775,788 | ) | (176,801,922 | ) | (499,238,011 | ) | (1,182,140,006 | ) | (427,593,282 | ) | (902,239,753 | ) | ||||||||||||
| Cost of shares redeemed — R6 Shares |
— | — | (1,223 | ) | (275 | ) | (3,336,333 | ) | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Increase (decrease) in net assets derived from capital share transactions |
19,207,444 | 10,196,295 | 33,742,210 | (826,703,553 | ) | 163,958,489 | (1,027,889,697 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
152,699,443 | 10,329,092 | (59,925,867 | ) | (988,815,876 | ) | (136,486,679 | ) | (1,013,934,941 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Assets: |
||||||||||||||||||||||||
| Beginning of period |
2,533,706,341 | 2,523,377,249 | 5,962,784,675 | 6,951,600,551 | 3,510,653,047 | 4,524,587,988 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| End of period |
$ | 2,686,405,784 | $ | 2,533,706,341 | $ | 5,902,858,808 | $ | 5,962,784,675 | $ | 3,374,166,368 | $ | 3,510,653,047 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Undistributed (accumulated) net investment income (loss) at end of period |
$ | (20,512,852 | ) | $ | (12,928,105 | ) | $ | 8,193,777 | $ | 5,881,500 | $ | 290,838 | $ | (5,385,237 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions — Retail Shares |
||||||||||||||||||||||||
| Shares sold |
669,175 | 1,303,840 | 1,550,242 | 3,267,882 | 3,884,415 | 5,675,541 | ||||||||||||||||||
| Shares issued in reinvestment of distributions |
1,367,677 | 3,295,576 | 5,120,028 | 4,600,018 | 12,546,941 | 8,616,093 | ||||||||||||||||||
| Shares redeemed |
(2,659,356 | ) | (4,527,322 | ) | (8,455,157 | ) | (15,856,841 | ) | (14,457,424 | ) | (40,336,749 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) |
(622,504 | ) | 72,094 | (1,784,887 | ) | (7,988,941 | ) | 1,973,932 | (26,045,115 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions — Institutional Shares |
||||||||||||||||||||||||
| Shares sold |
1,354,249 | 1,784,611 | 5,197,174 | 9,007,462 | 7,687,848 | 15,866,935 | ||||||||||||||||||
| Shares issued in reinvestment of distributions |
525,354 | 1,247,530 | 5,235,890 | 4,240,286 | 10,395,941 | 6,332,728 | ||||||||||||||||||
| Shares redeemed |
(932,284 | ) | (2,984,894 | ) | (7,778,450 | ) | (18,424,376 | ) | (15,278,749 | ) | (30,763,117 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) |
947,319 | 47,247 | 2,654,614 | (5,176,628 | ) | 2,805,040 | (8,563,454 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions — R6 Shares |
||||||||||||||||||||||||
| Shares sold |
256 | 125,217 | 1,168 | 34,095 | 2,730,503 | 117,047 | ||||||||||||||||||
| Shares issued in reinvestment of dividends |
5,840 | 44 | 4,254 | — | 27,420 | — | ||||||||||||||||||
| Shares redeemed |
— | — | (19 | ) | (4 | ) | (121,581 | ) | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase |
6,096 | 125,261 | 5,403 | 34,091 | 2,636,342 | 117,047 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 26 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Funds |
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited) (Continued)
|
|
| Baron Opportunity Fund | Baron Fifth Avenue Growth Fund |
Baron Discovery Fund | ||||||||||||||||||||||
| For the Six Months Ended March 31, 2017 |
For the Year Ended September 30, 2016 |
For the Six Months Ended March 31, 2017 |
For the Year Ended September 30, 2016 |
For the Six Months Ended March 31, 2017 |
For the Year Ended September 30, 2016 |
|||||||||||||||||||
| Increase (Decrease) in Net Assets: |
||||||||||||||||||||||||
| Operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | (1,300,104 | ) | $ | (2,072,319 | ) | $ | (229,144 | ) | $ | (475,449 | ) | $ | (282,025 | ) | $ | 459,288 | |||||||
| Net realized gain (loss) |
20,735,800 | 26,739,948 | (3,913,328 | ) | (4,123,105 | ) | 907,236 | (7,492,617 | ) | |||||||||||||||
| Change in net unrealized appreciation (depreciation) |
(4,733,564 | ) | (1,100,590 | ) | 15,020,009 | 24,216,389 | 8,623,091 | 13,484,335 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Increase in net assets resulting from operations |
14,702,132 | 23,567,039 | 10,877,537 | 19,617,835 | 9,248,302 | 6,451,006 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Distributions to shareholders from: |
||||||||||||||||||||||||
| Net realized gain on investments — Retail Shares |
(22,424,986 | ) | (23,538,224 | ) | — | — | — | (362,976 | ) | |||||||||||||||
| Net realized gain on investments — Institutional Shares |
(4,531,300 | ) | (9,136,197 | ) | — | — | — | (338,882 | ) | |||||||||||||||
| Net realized gain on investments — R6 Shares |
(44,520 | ) | — | — | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Decrease in net assets from distributions to shareholders |
(27,000,806 | ) | (32,674,421 | ) | — | — | — | (701,858 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions: |
||||||||||||||||||||||||
| Proceeds from the sale of shares — Retail Shares |
13,534,701 | 20,711,733 | 4,462,638 | 13,334,709 | 32,067,809 | 3,325,323 | ||||||||||||||||||
| Proceeds from the sale of shares — Institutional Shares |
3,728,895 | 4,351,441 | 5,253,674 | 21,707,323 | 42,505,180 | 9,434,873 | ||||||||||||||||||
| Proceeds from the sale of shares — R6 Shares |
— | 434,469 | 3,000 | 1,259,756 | 244,042 | 1,982,543 | ||||||||||||||||||
| Net asset value of shares issued in reinvestment of distributions — Retail Shares |
21,793,006 | 22,746,010 | — | — | — | 360,715 | ||||||||||||||||||
| Net asset value of shares issued in reinvestment of distributions — Institutional Shares |
4,021,193 | 8,314,026 | — | — | — | 271,096 | ||||||||||||||||||
| Net asset value of shares issues in reinvestment of distribution — R6 Shares |
44,520 | — | — | — | — | — | ||||||||||||||||||
| Cost of shares redeemed — Retail Shares |
(52,906,269 | ) | (63,302,681 | ) | (11,407,180 | ) | (20,733,353 | ) | (5,890,900 | ) | (8,059,970 | ) | ||||||||||||
| Cost of shares redeemed — Institutional Shares |
(7,468,281 | ) | (57,314,953 | ) | (14,345,774 | ) | (24,613,301 | ) | (2,208,703 | ) | (43,422,332 | ) | ||||||||||||
| Cost of shares redeemed — R6 Shares |
(51,938 | ) | — | (5,464 | ) | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Increase (decrease) in net assets derived from capital share transactions |
(17,304,173 | ) | (64,059,955 | ) | (16,039,106 | ) | (9,044,866 | ) | 66,717,428 | (36,107,752 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
(29,602,847 | ) | (73,167,337 | ) | (5,161,569 | ) | 10,572,969 | 75,965,730 | (30,358,604 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Assets: |
||||||||||||||||||||||||
| Beginning of period |
250,769,302 | 323,936,639 | 156,807,376 | 146,234,407 | 43,433,673 | 73,792,277 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| End of period |
$ | 221,166,455 | $ | 250,769,302 | $ | 151,645,807 | $ | 156,807,376 | $ | 119,399,403 | $ | 43,433,673 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Undistributed (accumulated) net investment income (loss) at end of period |
$ | (3,393,289 | ) | $ | (2,093,185 | ) | $ | (793,464 | ) | $ | (564,320 | ) | $ | (277,136 | ) | $ | 4,889 | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions — Retail Shares |
||||||||||||||||||||||||
| Shares sold |
887,936 | 1,289,427 | 229,821 | 751,628 | 2,237,019 | 278,949 | ||||||||||||||||||
| Shares issued in reinvestment of distributions |
1,519,736 | 1,353,124 | — | — | — | 32,007 | ||||||||||||||||||
| Shares redeemed |
(3,576,760 | ) | (3,926,468 | ) | (604,919 | ) | (1,179,010 | ) | (425,805 | ) | (712,512 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) |
(1,169,088 | ) | (1,283,917 | ) | (375,098 | ) | (427,382 | ) | 1,811,214 | (401,556 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions — Institutional Shares |
||||||||||||||||||||||||
| Shares sold |
236,963 | 259,249 | 268,424 | 1,180,779 | 3,051,801 | 738,254 | ||||||||||||||||||
| Shares issued in reinvestment of distributions |
272,808 | 483,936 | — | — | — | 23,885 | ||||||||||||||||||
| Shares redeemed |
(475,838 | ) | (3,493,332 | ) | (724,560 | ) | (1,376,764 | ) | (159,670 | ) | (3,886,277 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) |
33,933 | (2,750,147 | ) | (456,136 | ) | (195,985 | ) | 2,892,131 | (3,124,138 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital share transactions — R6 Shares |
||||||||||||||||||||||||
| Shares sold |
— | 25,224 | 156 | 70,371 | 17,545 | 147,688 | ||||||||||||||||||
| Shares issued in reinvestment of dividends |
3,021 | — | — | — | — | — | ||||||||||||||||||
| Shares redeemed |
(3,377 | ) | — | (286 | ) | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) |
(356 | ) | 25,224 | (130 | ) | 70,371 | 17,545 | 147,688 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| See Notes to Financial Statements. | 27 |
Table of Contents
| Baron Funds | March 31, 2017 |
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. ORGANIZATION
Baron Investment Funds Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company established as a Massachusetts business trust on February 19, 1987, and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services – Investment Companies. The Trust currently offers six series (individually, a “Fund” and collectively, the “Funds”): Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund, Baron Fifth Avenue Growth Fund and Baron Discovery Fund.
Each Fund offers Retail Shares, Institutional Shares and R6 Shares. Each class of shares differs only in its ongoing fees, expenses and eligibility requirements. Retail Shares are offered to all investors. Institutional Shares are for investments in the amount of $1 million or more per Fund. Institutional Shares are intended for certain financial intermediaries that offer shares of Baron Funds through fee-based platforms, retirement platforms or other platforms. R6 Shares are for investments in the amount of $5 million or more per Fund. R6 Shares are available only to qualified 401(a) plans (including 401(k) plans, Keogh plans, profit sharing plans, money purchase pension plans, target benefit plans, defined benefit pension plans and Taft-Hartley multi-employer pension plans), endowment funds and foundations, any state, county or city, or its instrumentality, department, authority, or agency, 457 plans, including 457(a) governmental entity plans and tax-exempt plans, accounts registered to insurance companies, trust companies and bank trust departments, investment companies, both affiliated and not affiliated with the adviser, and any entity that is considered a corporation for tax purposes, including corporate non-qualified deferred compensation plans of such corporations. Each class of shares has equal rights to earnings and assets, except that each class bears different expenses for distribution and shareholder servicing. Each Fund’s investment income, realized and unrealized gains or losses on investments and foreign currency, and expenses other than those attributable to a specific class are allocated to each class based on its relative net assets. Each class of shares has exclusive voting rights with respect to matters that affect just that class.
The investment goals of the Funds are as follows:
Baron Asset Fund seeks capital appreciation through long-term investments primarily in securities of medium-sized companies with undervalued assets or favorable growth prospects.
Baron Growth Fund seeks capital appreciation through long-term investments primarily in securities of small-sized growth companies.
Baron Small Cap Fund seeks capital appreciation through investments primarily in securities of small-sized growth companies.
Baron Opportunity Fund seeks capital appreciation through investments primarily in growth companies that benefit from technology advances.
Baron Fifth Avenue Growth Fund seeks capital appreciation through investments primarily in securities of large-sized growth companies.
Baron Discovery Fund seeks capital appreciation through investments primarily in securities of small-sized 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 (“GAAP”). The preparation of financial statements in accordance with GAAP 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. Events occurring subsequent to the date of the Statements of Assets and Liabilities and through the date of issuance of the financial statements have been evaluated for adjustment to or disclosure in the financial statements.
a) Security Valuation. The Funds’ share prices or net asset values (“NAV”) are calculated as of the scheduled close of the regular trading session (usually 4 p.m. E.T. or such other time as of which the Funds’ NAV is calculated (the “NAV Calculation Time”)) on the New York Stock Exchange (the “Exchange”) on any day the Exchange is scheduled to be open. Portfolio securities traded on any national stock exchange are valued based on the last sale price on the exchange where such shares are principally traded. For securities traded on NASDAQ, the Funds use the NASDAQ Official Closing Price. If there are no sales on a given day, the value of the security may be the average of the most recent bid and asked quotations on such exchange or the last sale price from a prior day. Where market quotations are not readily available, or, if in BAMCO, Inc.’s (the “Adviser”) judgment, they do not accurately reflect the 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 security will be valued by the Adviser using policies and procedures approved by the Board of Trustees (the “Board”). The Adviser has a Fair Valuation Committee (the “Committee”) comprised of senior management representatives and the Committee reports to the Board every quarter. Factors the Committee may consider when valuing a security include whether a current price is stale, there is recent news, the security is thinly traded, transactions are infrequent or quotations are genuine. There can be no guarantee, 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. U.S. Government obligations, money market instruments, and other debt instruments held by the Funds with a remaining maturity of 60 days or less are generally valued at amortized cost, which approximates fair value. Debt instruments having a greater remaining maturity will be valued on the basis of prices obtained from a pricing service approved by the Board or at the mean of the bid and ask prices from the dealer maintaining an active market in that security. The value of the Funds’ investments in convertible bonds is determined primarily by obtaining valuations from independent pricing services based on readily available bid quotations or, if quotations are not available, by methods which include various considerations such as yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Other inputs used by an independent pricing service to value convertible bonds generally include underlying stock data, conversion premiums, listed bond and preferred stock prices and other market information which may include benchmark curves, trade execution data, and sensitivity analysis, when available. Open-end investment companies, including securities lending collateral invested in registered investment company money market funds, are valued at their NAV each day.
Non-U.S. equity securities are valued on the basis of their most recent closing market prices and translated into U.S. dollars at the NAV Calculation Time, except under the circumstances described below. Most foreign markets close before the NAV Calculation Time. For securities primarily traded in the Far East, for example, the most recent
28
Table of Contents
| March 31, 2017 | Baron Funds |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
closing prices may be as much as 15 hours old at the NAV Calculation Time. As a result, the Adviser may use a third-party pricing service to assist in determining fair value of foreign securities. This service utilizes a systematic methodology in making fair value estimates. The Adviser may also fair value securities in other situations, for example, when a particular foreign market is closed but the Funds are open. The Adviser cannot predict how often it will use closing prices or how often it will adjust those prices. As a means of evaluating its fair value process, the Adviser routinely compares closing market prices, the next day’s opening prices in the same markets, and the adjusted prices. Other mutual funds may adjust the prices of their securities by different amounts.
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, which includes the accretion of discounts and amortization of premiums. Certain dividends from foreign securities will be recorded as soon as the Funds are informed of the dividend if such information is obtained subsequent to the ex-dividend date. Distributions received from certain investments held by the Funds may be comprised of dividends, realized gains and returns of capital. The Funds originally estimate the expected classification of such payments. The amounts may subsequently be reclassified upon receipt of information from the issuer. The Funds are charged for those expenses of the Trust 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) Foreign Currency Translations. Values of assets and liabilities denominated in foreign currencies are translated into U.S. dollars using the price of such currencies at the time the net asset value is determined. Purchases and sales of investments and dividend income are converted at the prevailing rate of exchange on the respective dates of such transactions. Net realized gain (loss) on foreign currency transactions includes gain (loss) arising from the fluctuation in the exchange rates between trade and settlement dates on security transactions and currency gain (loss) between the accrual and payment dates on dividends and foreign withholding taxes. The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currency transactions on the Statements of Operations. The Funds may invest in foreign securities and foreign currency transactions that may involve risks not associated with domestic investments as a result of the level of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability, among others.
Pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are generally treated as ordinary income for U.S. federal income tax purposes.
d) Securities Lending. The Funds may lend securities to certain brokers under the terms of a master netting agreement. Upon such loans, the Funds receive collateral which is maintained by the custodian. The Funds may pay fees to the custodian for administering the securities lending program. The Funds earn interest on such collateral and earn income in the form of negotiated lenders’ fees, both of which are included in securities lending income in the Statements of Operations. Securities loaned are required to be secured at all times by collateral equal to at least 102% of the market value of the securities loaned. Risks may arise upon entering into securities lending to the extent that the value of the collateral is less than the value of the securities loaned due to the changes in the value of collateral or the loaned securities. The collateral is marked-to-market daily and settled on the next business day. The Funds may receive collateral in the form of cash or other eligible securities, such as a letter of credit issued by a U.S. bank or securities issued or guaranteed by the U.S. government. Securities purchased with cash collateral are subject to the risks inherent in investing in these securities.
The Funds did not hold derivatives or participate in securities lending/borrowing activities at March 31, 2017.
e) Repurchase Agreements. The Funds may invest in repurchase agreements, which are short term investments whereby the Funds acquire ownership of a debt security and the seller agrees to repurchase the security at a future date at a specified price. When entering into repurchase agreements, it is the Funds’ policy that their custodian take possession of the underlying collateral securities, the market value of which, at all times, equals at least 102% of the principal amount of the repurchase transaction. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Funds may be delayed or limited. The information required to be disclosed by ASU No. 2011-11 for the Funds’ investments in repurchase agreements at March 31, 2017, including the fair value of the repurchase agreement and the amount of collateral, can be found in each respective Fund’s Statement of Net Assets.
f) Master Limited Partnerships. The Funds may invest in master limited partnerships (“MLPs”). MLPs are limited partnerships or limited liability companies, whose partnership units or limited liability interests are listed and traded on a U.S. securities exchange, and are treated as publicly traded partnerships for federal income tax purposes. To qualify to be treated as a partnership for tax purposes, an MLP must receive at least 90% of its income from qualifying sources as set forth in Section 7704(d) of the Internal Revenue Code of 1986, as amended. These qualifying sources include interest, dividend, real property rent, gain from sale or other disposition of real property and income from activities such as the exploration, development, mining, production, processing, refining, transportation, storage and marketing of mineral or natural resources.
g) Federal and Foreign Income Taxes. The Trust treats each Fund as a separate entity for federal income tax purposes. Each Fund intends to meet the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute to its shareholders substantially all of its net investment income and any net realized capital gains at least annually. None of the Funds will be subject to federal or state income taxes to the extent that they qualify as regulated investment companies and substantially all of their income is distributed.
The Funds may be subject to foreign taxes on income and gains on investments that are accrued based upon the Funds’ understanding of the tax rules and regulations that exist in the countries in which the Funds invest. Foreign governments may also impose taxes or other payments on investments with respect to foreign securities. Such taxes are accrued as applicable.
29
Table of Contents
| Baron Funds | March 31, 2017 |
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
h) Restricted Securities. The Funds may invest in securities that are restricted as to public sale in accordance with the Securities Act of 1933. Such assets are valued by the Adviser pursuant to policies and procedures approved by the Board.
i) Distributions to Shareholders. Income and capital gain distributions to shareholders are determined in accordance with income tax regulations which may differ from GAAP. These differences are primarily due to differing treatments for net investment loss, foreign currency gains and losses, reclassification of distributions, partnership basis adjustments, income from passive foreign investment companies and wash sale losses deferred.
j) 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.
k) Cash and Cash Equivalents. The Funds consider all short term liquid investments with a maturity of three months or less when purchased to be cash equivalents.
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short term securities, for the six months ended March 31, 2017 were as follows:
| Fund | Purchases | Sales | ||||||
| Baron Asset Fund |
$ | 117,649,659 | $ | 233,920,669 | ||||
| Baron Growth Fund |
28,639,508 | 640,623,243 | ||||||
| Baron Small Cap Fund |
256,440,044 | 715,393,871 | ||||||
| Baron Opportunity Fund |
37,133,939 | 82,897,448 | ||||||
| Baron Fifth Avenue Growth Fund |
10,500,554 | 26,863,523 | ||||||
| Baron Discovery Fund |
73,360,156 | 15,103,620 | ||||||
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
a) Investment Advisory Fees. 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 Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund and Baron Discovery Fund equal to 1% per annum of the average daily net assets of the respective Funds. The Adviser receives a fee payable monthly from Baron Fifth Avenue Growth Fund equal to 0.70% per annum of the daily net assets.
For Baron Opportunity Fund, Baron Fifth Avenue Growth Fund and Baron Discovery Fund, the Adviser has contractually agreed to reduce its fee, to the extent required to limit the net annual operating expense ratio (excluding portfolio transaction costs, interest, dividend and extraordinary expenses), as follows.
| Annual Operating Expense Ratio Cap |
||||||||||||
| Fund | Retail Shares |
Institutional Shares |
R6 Shares | |||||||||
| Baron Opportunity Fund |
1.50 | % | 1.25 | % | 1.24 | % | ||||||
| Baron Fifth Avenue Growth Fund |
1.10 | % | 0.85 | % | 0.84 | % | ||||||
| Baron Discovery Fund |
1.35 | % | 1.10 | % | 1.09 | % | ||||||
b) Distribution Fees. Baron Capital, Inc. (“BCI”), a wholly owned subsidiary of BCG, is a registered limited purpose broker-dealer and the distributor of the Funds’ shares. The Funds are authorized to pay BCI a distribution fee payable monthly pursuant to a distribution plan under Rule 12b-1 of the 1940 Act equal to 0.25% per annum of the Retail Shares’ average daily net assets of the respective Funds.
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 for their services as an officer.
d) Fund Accounting and Administration Fees. The Funds have entered into an agreement with State Street Bank and Trust Company (“State Street”) to perform accounting and certain administrative services. State Street is compensated for fund accounting services based on a percentage of the Funds’ net assets, subject to certain minimums plus fixed annual fees for the administrative services.
30
Table of Contents
| March 31, 2017 | Baron Funds |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (Continued)
e) Cross Trades. The Funds are permitted to purchase securities from, or sell securities to, other Funds within the Trust, other funds in the Baron Select Funds, and other entities advised or subadvised by the Adviser, pursuant to “Cross-Trading” Procedures adopted by the Board. These procedures have been designed to ensure that any cross-trade of securities by a Fund from or to another fund/other entity that is or could be considered an affiliate of the respective Baron Fund under certain limited circumstances by virtue of having a common investment adviser, common officers, or common trustees complies with Rule 17a-7 under the 1940 Act. Further, as defined under these procedures, each cross-trade is effected at the current market price and with no commissions. Pursuant to these procedures, for the six months ended March 31, 2017, the Funds engaged in the following cross-trades:
| Purchases | Sales | Net Realized Gains (Losses) |
||||||||||
| Baron Discovery Fund |
$ | 139,200 | $ | — | $ | — | ||||||
5. LINE OF CREDIT
The Funds, together with other funds in Baron Select Funds (except Baron Partners Fund), participate in a committed line of credit agreement with State Street to be used for temporary purposes, primarily for financing redemptions. Each fund may borrow up to the lesser of $100 million or the maximum amount each fund may borrow under the 1940 Act, the limitations included in each fund’s prospectus, or any limit or restriction under any law or regulation to which each fund is subject or any agreement to which each fund is a party; provided that the aggregate outstanding principal amount of all loans to any of the funds may not exceed $100 million. Interest is charged to each fund, based on its borrowings, at a rate per annum equal to the higher of the Overnight Federal Funds Rate or the One Month LIBOR Rate plus a margin of 1.00%. An upfront fee of 0.05% is incurred on the commitment amount and a commitment fee of 0.20% per annum is incurred on the unused portion of the line of credit. Both fees are allocated to the participating funds based on their relative net assets.
During the six months ended March 31, 2017, Baron Growth Fund, Baron Small Cap Fund, Baron Opportunity Fund and Baron Fifth Avenue Growth Fund had borrowings under the line of credit and incurred interest expense of $95,259, $2,612, $5,066 and $4,080, respectively. For the 128 days during which there were borrowings, Baron Growth Fund had an average daily balance on the line of credit of $15.5 million at a weighted average interest rate of 1.75%. For the 10 days during which there were borrowings, Baron Small Cap Fund had an average daily balance on the line of credit of $6.2 million at a weighted average interest rate of 1.55%. For the 56 days during which there were borrowings, Baron Opportunity Fund had an average daily balance on the line of credit of $1.8 million at a weighted average interest rate of 1.79%. For the 48 days during which there were borrowings, Baron Fifth Avenue Growth Fund had an average daily balance on the line of credit of $1.6 million at a weighted average interest rate of 1.93%.
At March 31, 2017, Baron Growth Fund, Baron Opportunity Fund and Baron Fifth Avenue Growth Fund had outstanding balances in the amounts of $14,000,000, $500,000 and $300,000, respectively.
6. RESTRICTED SECURITIES
At March 31, 2017, 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 pursuant to the policies and procedures for fair value pricing approved by the Board. 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. The Funds may receive more or less than this valuation in an actual sale and that difference could be material. At March 31, 2017, the Funds held investments in restricted and/or illiquid securities that were valued pursuant to policies and procedures for fair value pricing as follows:
| Baron Asset Fund | ||||||||
| Name of Issuer | Acquisition Date(s) | Value | ||||||
| Private Equity Investments |
||||||||
| Windy City Investments Holdings, L.L.C. |
11/13/2007-1/27/2011 | $ | 3,245,862 | |||||
|
|
|
|||||||
| (Cost $0) (0.12% of Net Assets) |
||||||||
| Baron Growth Fund | ||||||||
| Name of Issuer | Acquisition Date(s) | Value | ||||||
| Private Equity Investments |
||||||||
| Windy City Investments Holdings, L.L.C. |
11/13/2007-1/27/2011 | $ | 1,092,580 | |||||
|
|
|
|||||||
| (Cost $0) (0.02% of Net Assets) |
||||||||
| Baron Discovery Fund | ||||||||
| Name of Issuer | Acquisition Date(s) | Value | ||||||
| Warrants |
||||||||
| Barfresh Food Group, Inc., Warrants Exp 3/13/2020 |
2/23/2015 | $ | 60,000 | |||||
|
|
|
|||||||
| (Cost $0) (0.05% of Net Assets) |
||||||||
31
Table of Contents
| Baron Funds | March 31, 2017 |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS
Fair value is defined by GAAP as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. GAAP provides a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Funds. Unobservable inputs are inputs that reflect the Funds’ own assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
| • | Level 1 — quoted prices in active markets for identical assets or liabilities; |
| • | Level 2 — prices determined using other inputs that are observable either directly or indirectly through corroboration with observable market data (which could include quoted prices for similar assets or liabilities, interest rates, credit risk, etc.); |
| • | Level 3 — prices determined using unobservable inputs when quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an asset or liability (unobservable inputs reflect each Fund’s own assumptions in determining the fair value of assets or liabilities and would be based on the best information available). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, non-U.S. securities, with markets that close hours before the Funds value their holdings, may require revised valuations due to significant movement in the U.S. markets. Since these values are not obtained from quoted prices in an active market, such securities are reflected as Level 2.
The Funds have procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available or which may not be reliably priced. Under these procedures, the Funds primarily employ a market-based approach that may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine its fair value. The Funds may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
The following is a summary of the inputs used as of March 31, 2017 in valuing the Funds’ investments carried at fair value:
| Baron Asset Fund | ||||||||||||||||
| Description | Quoted Prices in (Level 1) |
Other Observable Inputs (Level 2) |
Unobservable Inputs (Level 3) |
Total | ||||||||||||
| Common Stocks† |
$ | 2,653,223,070 | $ | — | $ | — | $ | 2,653,223,070 | ||||||||
| Private Equity Investments |
— | — | 3,245,862 | 3,245,862 | ||||||||||||
| Short Term Investments |
— | 25,551,931 | — | 25,551,931 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Investments |
$ | 2,653,223,070 | $ | 25,551,931 | $ | 3,245,862 | $ | 2,682,020,863 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Transfers between Levels 1, 2 or 3, if any, are recognized at ending value on March 31, 2017. There have been no transfers in and out of Level 1, 2 or 3 fair value measurements for the Fund for the six months ended March 31, 2017.
| Baron Growth Fund | ||||||||||||||||
| Description | Quoted Prices in (Level 1) |
Other Observable Inputs (Level 2) |
Unobservable (Level 3) |
Total | ||||||||||||
| Common Stocks† |
$ | 5,878,310,063 | $ | — | $ | — | $ | 5,878,310,063 | ||||||||
| Preferred Stocks |
— | 14,098,651 | — | 14,098,651 | ||||||||||||
| Private Equity Investments |
— | — | 1,092,580 | 1,092,580 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Investments |
$ | 5,878,310,063 | $ | 14,098,651 | $ | 1,092,580 | $ | 5,893,501,294 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Transfers between Levels 1, 2 or 3, if any, are recognized at ending value on March 31, 2017. There have been no transfers in and out of Level 1, 2 or 3 fair value measurements for the Fund for the six months ended March 31, 2017.
| † | See Statements of Net Assets for additional detailed categorizations. |
32
Table of Contents
| March 31, 2017 | Baron Funds |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
| Baron Small Cap Fund | ||||||||||||||||
| Description | Quoted Prices in (Level 1) |
Other Observable Inputs (Level 2) |
Unobservable Inputs (Level 3) |
Total | ||||||||||||
| Common Stocks† |
$ | 3,332,310,140 | $ | — | $ | — | $ | 3,332,310,140 | ||||||||
| Short Term Investments |
— | 40,676,306 | — | 40,676,306 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Investments |
$ | 3,332,310,140 | $ | 40,676,306 | $ | — | $ | 3,372,986,446 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Transfers between Levels 1, 2 or 3, if any, are recognized at ending value on March 31, 2017. There have been no transfers in and out of Level 1, 2 or 3 fair value measurements for the Fund for the six months ended March 31, 2017.
| Baron Opportunity Fund | ||||||||||||||||
| Description | Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Unobservable Inputs (Level 3) |
Total | ||||||||||||
| Common Stocks† |
$ | 220,975,178 | $ | — | $ | — | $ | 220,975,178 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Investments |
$ | 220,975,178 | $ | — | $ | — | $ | 220,975,178 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Transfers between Levels 1, 2 or 3, if any, are recognized at ending value on March 31, 2017. There have been no transfers in and out of Level 1, 2 or 3 fair value measurements for the Fund for the six months ended March 31, 2017.
| Baron Fifth Avenue Growth Fund | ||||||||||||||||
| Description | Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Unobservable Inputs (Level 3) |
Total | ||||||||||||
| Common Stocks† |
$ | 151,641,912 | $ | — | $ | — | $ | 151,641,912 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Investments |
$ | 151,641,912 | $ | — | $ | — | $ | 151,641,912 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Transfers between Levels 1, 2 or 3, if any, are recognized at ending value on March 31, 2017. There have been no transfers in and out of Level 1, 2 or 3 fair value measurements for the Fund for the six months ended March 31, 2017.
| Baron Discovery Fund | ||||||||||||||||
| Description | Quoted Prices in (Level 1) |
Other Observable Inputs (Level 2) |
Unobservable (Level 3) |
Total | ||||||||||||
| Common Stocks† |
$ | 110,527,051 | $ | — | $ | — | $ | 110,527,051 | ||||||||
| Warrants |
— | 60,000 | — | 60,000 | ||||||||||||
| Short Term Investments |
— | 12,037,372 | — | 12,037,372 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Investments |
$ | 110,527,051 | $ | 12,097,372 | $ | — | $ | 122,624,423 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Transfers between Levels 1, 2 or 3, if any, are recognized at ending value on March 31, 2017. There have been no transfers in and out of Level 1, 2 or 3 fair value measurements for the Fund for the six months ended March 31, 2017.
| † | See Statements of Net Assets for additional detailed categorizations. |
33
Table of Contents
| Baron Funds | March 31, 2017 |
NOTES TO FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
The following is a reconciliation of investments in which unobservable inputs (Level 3) were used in determining fair value:
| Baron Asset Fund | ||||||||||||||||||||||||||||||||||||||||
| Investments in Securities |
Balance as of September 30, 2016 |
Accrued Premiums/ Discounts |
Net Realized Gain (Loss) |
Change in Net Unrealized Appreciation (Depreciation) |
Purchases | Sales/ Distributions |
Transfers Into Level 3 |
Transfers Out of Level 3 |
Balance as of March 31, 2017 |
Change in Net Unrealized Appreciation (Depreciation) from Investments still held at March 31, 2017 |
||||||||||||||||||||||||||||||
| Private Equity Investments |
||||||||||||||||||||||||||||||||||||||||
| Financials |
$ | 3,175,300 | $ | — | $ | — | $ | 70,562 | $ | — | $ | — | $ | — | $ | — | $ | 3,245,862 | $ | 70,562 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
$ | 3,175,300 | $ | — | $ | — | $ | 70,562 | $ | — | $ | — | $ | — | $ | — | $ | 3,245,862 | $ | 70,562 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Baron Growth Fund | ||||||||||||||||||||||||||||||||||||||||
| Investments in Securities |
Balance as of September 30, 2016 |
Accrued Premiums/ Discounts |
Net Realized Gain (Loss) |
Change in Net Unrealized Appreciation (Depreciation) |
Purchases | Sales/ Distributions |
Transfers Into Level 3 |
Transfers Out of Level 3 |
Balance as of March 31, 2017 |
Change in Net Unrealized Appreciation (Depreciation) from Investments still held at March 31, 2017 |
||||||||||||||||||||||||||||||
| Private Equity Investments |
||||||||||||||||||||||||||||||||||||||||
| Financials |
$ | 1,068,828 | $ | — | $ | — | $ | 23,752 | $ | — | $ | — | $ | — | $ | — | $ | 1,092,580 | $ | 23,752 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
$ | 1,068,828 | $ | — | $ | — | $ | 23,752 | $ | — | $ | — | $ | — | $ | — | $ | 1,092,580 | $ | 23,752 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
Federal income tax regulations differ from GAAP. Therefore, distributions determined in accordance with tax regulations may differ in amount or character from net investment income and net realized gain for financial reporting purposes. Net investment income (loss) and net realized and unrealized gain (loss) differ for financial statement and tax purposes due to differing treatments of net investment loss, foreign currency gains and losses, reclassification of distributions, partnership basis adjustments, income from passive foreign investment companies and wash sale losses deferred. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences.
As of March 31, 2017, the components of net assets on a tax basis were as follows:
| Baron Asset Fund |
Baron Growth Fund |
Baron Small Cap Fund |
Baron Fund |
Baron Fifth Avenue Growth Fund |
Baron Fund |
|||||||||||||||||||
| Cost of investments |
$ | 1,050,755,344 | $ | 2,271,416,126 | $ | 1,634,858,362 | $ | 131,683,609 | $ | 75,801,771 | $ | 106,534,473 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross tax unrealized appreciation |
1,633,957,522 | 3,694,655,268 | 1,772,670,230 | 91,411,266 | 75,840,141 | 17,642,405 | ||||||||||||||||||
| Gross tax unrealized depreciation |
(2,692,003 | ) | (72,570,100 | ) | (34,542,146 | ) | (2,119,697 | ) | — | (1,552,455 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net tax unrealized appreciation |
1,631,265,519 | 3,622,085,168 | 1,738,128,084 | 89,291,569 | 75,840,141 | 16,089,950 | ||||||||||||||||||
| Net tax unrealized currency appreciation (depreciation) |
— | — | 703 | — | 24 | (681 | ) | |||||||||||||||||
| Undistributed (accumulated) net investment income (loss) |
(20,512,852 | ) | 8,193,777 | 290,838 | (3,393,289 | ) | (793,464 | ) | (277,136 | ) | ||||||||||||||
| Undistributed (accumulated) net realized gain (loss) |
127,982,725 | 307,108,357 | 284,178,419 | 19,754,893 | (8,736,163 | ) | (8,047,320 | ) | ||||||||||||||||
| Paid-in capital |
947,670,392 | 1,965,471,506 | 1,351,568,324 | 115,513,282 | 85,335,269 | 111,634,590 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Assets |
$ | 2,686,405,784 | $ | 5,902,858,808 | $ | 3,374,166,368 | $ | 221,166,455 | $ | 151,645,807 | $ | 119,399,403 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
34
Table of Contents
| March 31, 2017 | Baron Funds |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
8. INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS (Continued)
As of September 30, 2016, the Funds had capital loss carryforwards expiring as follows:
| Baron Asset Fund |
Baron Growth Fund |
Baron Small Cap Fund |
Baron Fund |
Baron Fifth Avenue Growth Fund |
Baron Discovery Fund |
|||||||||||||||||||
| Short term capital loss carryforwards: |
||||||||||||||||||||||||
| September 30, 2018 |
$ | — | $ | — | $ | — | $ | — | $ | 85,567 | $ | — | ||||||||||||
| No expiration date |
— | — | — | — | 211,422 | 1,483,090 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| $ | — | $ | — | $ | — | $ | — | $ | 296,989 | $ | 1,483,090 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
The tax character of distributions paid during the six months ended March 31, 2017 and the fiscal year ended September 30, 2016 was as follows:
| Six Months
Ended March 31, 2017 |
Year
Ended September 30, 2016 |
|||||||||||||||
| Fund | Ordinary1 | Long Term Capital Gain |
Ordinary1 | Long Term Capital Gain |
||||||||||||
| Baron Asset Fund |
$ | — | $ | 115,002,326 | $ | — | $ | 268,567,375 | ||||||||
| Baron Growth Fund |
— | 652,001,794 | — | 593,543,313 | ||||||||||||
| Baron Small Cap Fund |
— | 620,005,422 | — | 449,317,328 | ||||||||||||
| Baron Opportunity Fund |
— | 27,000,806 | — | 32,674,421 | ||||||||||||
| Baron Fifth Avenue Growth Fund |
— | — | — | — | ||||||||||||
| Baron Discovery Fund |
— | — | — | 701,858 | ||||||||||||
| 1 | For tax purposes, short-term capital gains are considered ordinary income distributions. |
The Funds follow the provisions of FASB Codification Section 740 (“ASC Section 740”) “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in tax positions taken or expected to be taken on a tax return. ASC Section 740 sets forth a threshold for financial statement recognition, measurement and disclosure of tax positions taken or expected to be taken on a tax return. The Funds are required to recognize the tax effects of certain tax positions under a “more likely than not” standard, that based on their technical merits, have more than 50 percent likelihood of being sustained upon examination. Management has analyzed the tax positions taken on the Funds’ federal income tax returns for all open years (current and prior three years), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. At March 31, 2017, the Funds did not have any uncertain tax benefits that require recognition, de-recognition or disclosure. The Funds’ federal, state and local income and federal excise tax returns for which the applicable statutes of limitations have not expired (current and prior three years) are subject to examination by the Internal Revenue Service and state departments of revenue.
9. OWNERSHIP CONCENTRATION
As of March 31, 2017, the officers, trustees, and portfolio managers owned, directly or indirectly, 18.21% of Baron Fifth Avenue Growth Fund. As a result of their ownership, these investors may be able to materially affect the outcome of matters presented to Baron Fifth Avenue Growth Fund shareholders.
10. TRANSACTIONS IN “AFFILIATED” COMPANIES1
BARON GROWTH FUND
| Name of Issuer | Value at September 30, 2016 |
Purchase Cost |
Sales Proceeds |
Change in Net Unrealized Appreciation (Depreciation) |
Realized (Losses) |
Dividend Income |
Shares Held at March 31, 2017 |
Value at March 31, 2017 |
||||||||||||||||||||||||
| “Affiliated” Company as of March 31, 2017: |
|
|||||||||||||||||||||||||||||||
| Benefitfocus, Inc. |
$ | 92,789,010 | $ | — | $ | — | $ | (27,822,757 | ) | $ | — | $ | — | 2,324,374 | $ | 64,966,253 | ||||||||||||||||
| CaesarStone Ltd. |
78,813,900 | — | 2,655,350 | (3,230,920 | ) | (427,630 | ) | — | 2,000,000 | 72,500,000 | ||||||||||||||||||||||
| Choice Hotels International, Inc. |
135,578,100 | — | — | 52,691,400 | — | 1,293,225 | 3,007,500 | 188,269,500 | ||||||||||||||||||||||||
| Iridium Communications, Inc. |
60,771,774 | — | — | 11,539,893 | — | — | 7,493,437 | 72,311,667 | ||||||||||||||||||||||||
| Iridium Communications, Inc., Series B, 6.75% |
12,353,827 | — | — | 1,744,824 | — | 346,562 | 41,074 | 14,098,651 | ||||||||||||||||||||||||
| Marriott Vacations Worldwide Corp. |
117,312,000 | — | — | 42,576,000 | — | 1,120,000 | 1,600,000 | 159,888,000 | ||||||||||||||||||||||||
| Vail Resorts, Inc. |
323,925,824 | 20,357,722 | 77,319,411 | 5,765,486 | 2,196,993 | 421,602,957 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| $ | 821,544,435 | $ | 20,357,722 | $ | 2,655,350 | $ | 154,817,851 | $ | (427,630 | ) | $ | 8,525,273 | $ | 993,637,028 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| No Longer an “Affiliated” Company as of March 31, 2017: |
|
|||||||||||||||||||||||||||||||
| Primerica, Inc. |
$ | 132,575,000 | $ | — | $ | 24,457,582 | $ | 55,386,192 | $ | 14,048,390 | $ | 867,975 | 2,160,000 | $ | 177,552,000 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 1 | An “Affiliated” Company (“affiliated person” as defined in the 1940 Act) is a company in which a Fund held 5% or more of the company’s outstanding voting securities at any time during the six months ended March 31, 2017. |
35
Table of Contents
| Baron Funds | March 31, 2017 |
NOTES TO FINANCIAL STATEMENTS (Continued)
10. TRANSACTIONS IN “AFFILIATED” COMPANIES1 (Continued)
BARON SMALL CAP FUND
| Name of Issuer | Value at September 30, 2016 |
Purchase Cost |
Sales Proceeds |
Change in Net Unrealized Appreciation (Depreciation) |
Realized (Losses) |
Dividend Income |
Shares Held at March 31, 2017 |
Value at March 31, 2017 |
||||||||||||||||||||||||
| “Affiliated” Company as of March 31, 2017: |
|
|||||||||||||||||||||||||||||||
| Capitol Acquisition Corp. III |
$ | — | $ | 30,900,086 | $ | — | $ | 749,914 | $ | — | $ | — | 3,000,000 | $ | 31,650,000 | |||||||||||||||||
| The Chefs’ Warehouse, Inc. |
18,721,472 | — | 2,159,866 | 5,239,917 | (951,523 | ) | — | 1,500,000 | 20,850,000 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| $ | 18,721,472 | $ | 30,900,086 | $ | 2,159,866 | $ | 5,989,831 | $ | (951,523 | ) | $ | — | $ | 52,500,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 1 | An “Affiliated” Company (“affiliated person” as defined in the 1940 Act) is a company in which a Fund held 5% or more of the company’s outstanding voting securities at any time during the six months ended March 31, 2017. |
11. RECENT ACCOUNTING PRONOUNCEMENTS
In October 2016, the U.S. Securities and Exchange Commission (“SEC”) adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. The Adviser is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the Funds’ financial statements and related disclosures.
In December 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-19 (“ASU 2016-19”), “Technical Corrections and Improvements.” The guidance includes an amendment to Topic 820, Fair Value Measurement, which clarifies the difference between a valuation approach and a valuation technique when applying the guidance in that Topic. The amendment also requires an entity to disclose when there has been a change in either or both a valuation approach and/or a valuation technique. The transition guidance for the amendment must be applied prospectively because it could potentially involve the use of hindsight that includes fair value measurements. The guidance is effective for interim periods beginning after December 15, 2016. Management is currently evaluating the implication, if any, of the additional disclosure requirements and its impact on the Funds’ financial statements.
36
Table of Contents
| March 31, 2017 | Baron Funds |
FINANCIAL HIGHLIGHTS (Unaudited)
BARON ASSET FUND
Selected data for a share outstanding throughout each period:
| RETAIL SHARES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 60.67 | $ | 60.88 | $ | 63.75 | $ | 61.37 | $ | 52.03 | $ | 49.00 | $ | 49.27 | $ | 43.62 | $ | 52.12 | $ | 66.57 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment loss |
(0.20 | )1 | (0.25 | )1 | (0.41 | )1 | (0.44 | )1 | (0.34 | )1 | (0.14 | )1 | (0.23 | )1 | (0.28 | )1 | (0.20 | )1 | (0.29 | )1 | ||||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
6.06 | 6.63 | 1.71 | 8.42 | 13.44 | 10.94 | 0.73 | 5.93 | (5.68 | ) | (12.08 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total from investment operations |
5.86 | 6.38 | 1.30 | 7.98 | 13.10 | 10.80 | 0.50 | 5.65 | (5.88 | ) |
|
(12.37 |
) |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(2.80 | ) | (6.59 | ) | (4.17 | ) | (5.60 | ) | (3.76 | ) | (7.77 | ) | (0.77 | ) | 0.00 | (2.62 | ) | (2.08 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total distributions |
(2.80 | ) | (6.59 | ) | (4.17 | ) | (5.60 | ) | (3.76 | ) | (7.77 | ) | (0.77 | ) | 0.00 | (2.62 | ) |
|
(2.08 |
) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 63.73 | $ | 60.67 | $ | 60.88 | $ | 63.75 | $ | 61.37 | $ | 52.03 | $ | 49.00 | $ | 49.27 | $ | 43.62 |
$ |
52.12 |
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total return |
10.08 | %4 | 11.14 | % | 1.81 | % | 13.59 | % | 27.17 | % | 24.65 | % | 0.85 | % | 12.95 | % | (9.88 | )% |
|
(19.14 |
)% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 1,853.7 | $ | 1,802.6 | $ | 1,804.3 | $ | 2,000.5 | $ | 2,024.2 | $ | 1,845.6 | $ | 1,924.9 | $ | 2,424.2 | $ | 2,652.6 | $ | 3,311.8 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.31 | %5 | 1.31 | % | 1.31 | % | 1.31 | % | 1.32 | % | 1.33 | % | 1.33 | % | 1.32 | % | 1.36 | %2 |
|
1.33 |
%2 |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net investment loss to average net assets |
(0.68 | )%5 | (0.43 | )% | (0.62 | )% | (0.70 | )% | (0.62 | )% | (0.28 | )% | (0.41 | )% | (0.61 | )% | (0.54 | )% |
|
(0.49 |
)% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Portfolio turnover rate |
4.66 | %4 | 12.54 | % | 13.53 | % | 11.26 | % | 12.04 | % | 13.11 | % | 23.89 | % | 13.04 | % | 14.67 | % |
|
16.02 |
% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| INSTITUTIONAL SHARES | R6 SHARES | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | Six Months Ended March 31, |
Year Ended September 30, |
|||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 20093 | 2017 | 20166 | ||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 62.30 | $ | 62.19 | $ | 64.87 | $ | 62.20 | $ | 52.55 | $ | 49.30 | $ | 49.43 | $ | 43.65 | $ | 37.38 | $ | 62.30 | $ | 53.85 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
(0.13 | )1 | (0.10 | )1 | (0.24 | )1 | (0.28 | )1 | (0.21 | )1 | 0.01 | 1 | (0.10 | )1 | (0.15 | )1 | (0.05 | )1 | (0.13 | )1 | (0.21 | )1 | ||||||||||||||||||||||||||
| Net realized and unrealized gain on investments |
6.25 | 6.80 | 1.73 | 8.55 | 13.62 | 11.01 | 0.74 | 5.93 | 6.32 | 6.24 | 8.68 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total from investment operations |
6.12 | 6.70 | 1.49 | 8.27 | 13.41 | 11.02 | 0.64 | 5.78 | 6.27 | 6.11 | 8.47 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(2.80 | ) | (6.59 | ) | (4.17 | ) | (5.60 | ) | (3.76 | ) | (7.77 | ) | (0.77 | ) | 0.00 | 0.00 | (2.80 | ) | (0.02 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total distributions |
(2.80 | ) | (6.59 | ) | (4.17 | ) | (5.60 | ) | (3.76 | ) | (7.77 | ) | (0.77 | ) | 0.00 | 0.00 |
|
(2.80 |
) |
|
(0.02 |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 65.62 | $ | 62.30 | $ | 62.19 | $ | 64.87 | $ | 62.20 | $ | 52.55 | $ | 49.30 | $ | 49.43 | $ | 43.65 |
$ |
65.61 |
|
$ |
62.30 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total return |
10.24 | %4 | 11.44 | % | 2.09 | % | 13.90 | % | 27.51 | % | 24.99 | % | 1.14 | % | 13.24 | % | 16.77 | %4 | 10.22 | %4 | 15.73 | %4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 824.1 | $ | 723.3 | $ | 719.1 | $ | 689.8 | $ | 506.1 | $ | 386.7 | $ | 288.9 | $ | 242.8 | $ | 82.3 | $ | 8.6 | $ | 7.8 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.04 | %5 | 1.04 | % | 1.04 | % | 1.04 | % | 1.05 | % | 1.06 | % | 1.06 | % | 1.06 | % | 1.16 | %5 |
|
1.04 |
%5 |
|
1.04 |
%5 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
(0.41 | )%5 | (0.17 | )% | (0.36 | )% | (0.43 | )% | (0.38 | )% | 0.02 | % | (0.18 | )% | (0.33 | )% | (0.39 | )%5 |
|
(0.41 |
)%5 |
|
(0.52 |
)%5 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Portfolio turnover rate |
4.66 | %4 | 12.54 | % | 13.53 | % | 11.26 | % | 12.04 | % | 13.11 | % | 23.89 | % | 13.04 | % | 14.67 | % |
|
4.66 |
%4 |
|
12.54 |
% | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| 1 Based on average shares outstanding. 2 Benefit of expense reduction rounds to less than 0.01%. 3 For the period May 29, 2009 (initial offering of Institutional Shares) to September 30, 2009. |
4 Not Annualized. 5 Annualized. 6 For the period January 29, 2016 (initial offering of R6 Shares) to September 30, 2016. |
| See Notes to Financial Statements. | 37 |
Table of Contents
| Baron Funds | March 31, 2017 |
FINANCIAL HIGHLIGHTS (Unaudited) (Continued)
BARON GROWTH FUND
Selected data for a share outstanding throughout each period:
| RETAIL SHARES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 67.13 | $ | 68.25 | $ | 70.46 | $ | 68.67 | $ | 58.19 | $ | 46.18 | $ | 44.37 | $ | 39.00 | $ | 41.69 | $ | 54.55 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
(0.02 | )1 | 0.08 | 1 | (0.27 | )1 | 0.06 | 1 | (0.12 | )1 | 0.20 | 1 | (0.29 | )1 | (0.34 | )1 | (0.18 | )1 | (0.28 | )1 | ||||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
6.17 | 4.83 | 1.28 | 3.45 | 16.37 | 12.64 | 2.10 | 5.71 | (2.47 | ) | (10.07 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total from investment operations |
6.15 | 4.91 | 1.01 | 3.51 | 16.25 | 12.84 | 1.81 | 5.37 | (2.65 | ) | (10.35 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | (0.03 | ) | (0.18 | ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(7.64 | ) | (6.03 | ) | (3.22 | ) | (1.69 | ) | (5.59 | ) | (0.83 | ) | 0.00 | 0.00 | (0.04 | ) | (2.51 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total distributions |
(7.64 | ) | (6.03 | ) | (3.22 | ) | (1.72 | ) | (5.77 | ) | (0.83 | ) | 0.00 | 0.00 | (0.04 | ) | (2.51 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 65.64 | $ | 67.13 | $ | 68.25 | $ | 70.46 | $ | 68.67 | $ | 58.19 | $ | 46.18 | $ | 44.37 | $ | 39.00 | $ | 41.69 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total return |
10.18 | %5 | 7.60 | % | 1.27 | % | 5.11 | % | 30.76 | % | 28.12 | % | 4.08 | % | 13.77 | % | (6.34 | )% | (19.78 | )% | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 2,735.2 | $ | 2,917.2 | $ | 3,511.2 | $ | 4,076.1 | $ | 4,644.2 | $ | 4,073.5 | $ | 4,110.8 | $ | 4,842.8 | $ | 5,034.5 | $ | 5,615.0 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.30 | %4,6 | 1.30 | %4 | 1.29 | %4 | 1.29 | %4 | 1.30 | % | 1.32 | % | 1.32 | % | 1.32 | % | 1.35 | %2 | 1.32 | %2 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
(0.06 | )%6 | 0.12 | % | (0.37 | )% | 0.08 | % | (0.20 | )% | 0.38 | % | (0.56 | )% | (0.80 | )% | (0.56 | )% | (0.59 | )% | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Portfolio turnover rate |
0.50 | %5 | 4.68 | % | 6.95 | % | 13.15 | % | 9.63 | % | 13.70 | % | 13.51 | % | 16.12 | % | 26.65 | % | 25.97 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| INSTITUTIONAL SHARES | R6 SHARES | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | Six Months Ended March 31, |
Year Ended September 30, |
|||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 20093 | 2017 | 20167 | ||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 68.42 | $ | 69.28 | $ | 71.33 | $ | 69.32 | $ | 58.70 | $ | 46.46 | $ | 44.52 | $ | 39.03 | $ | 33.71 | $ | 68.42 | $ | 60.02 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
0.07 | 1 | 0.24 | 1 | (0.09 | )1 | 0.20 | 1 | 0.02 | 1 | 0.45 | 1 | (0.17 | )1 | (0.22 | )1 | (0.04 | )1 | 0.07 | 1 | (0.15 | )1 | ||||||||||||||||||||||||||
| Net realized and unrealized gain on investments |
6.30 | 4.93 | 1.28 | 3.53 | 16.52 | 12.62 | 2.11 | 5.71 | 5.36 | 6.30 | 8.55 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total from investment operations |
6.37 | 5.17 | 1.19 | 3.73 | 16.54 | 13.07 | 1.94 | 5.49 | 5.32 | 6.37 | 8.40 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | (0.02 | ) | (0.03 | ) | (0.33 | ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(7.64 | ) | (6.03 | ) | (3.22 | ) | (1.69 | ) | (5.59 | ) | (0.83 | ) | 0.00 | 0.00 | 0.00 | (7.64 | ) | 0.00 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total distributions |
(7.64 | ) | (6.03 | ) | (3.24 | ) | (1.72 | ) | (5.92 | ) | (0.83 | ) | 0.00 | 0.00 | 0.00 | (7.64 | ) | 0.00 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 67.15 | $ | 68.42 | $ | 69.28 | $ | 71.33 | $ | 69.32 | $ | 58.70 | $ | 46.46 | $ | 44.52 | $ | 39.03 | $ | 67.15 | $ | 68.42 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total return |
10.32 | %5 | 7.88 | % | 1.51 | % | 5.39 | % | 31.10 | % | 28.45 | % | 4.36 | % | 14.07 | % | 15.78 | %5 | 10.32 | %5 | 14.00 | %5 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 3,165.0 | $ | 3,043.3 | $ | 3,440.4 | $ | 3,694.5 | $ | 2,976.7 | $ | 1,747.3 | $ | 1,261.8 | $ | 728.9 | $ | 238.7 | $ | 2.7 | $ | 2.3 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.05 | %4,6 | 1.05 | %4 | 1.04 | %4 | 1.04 | %4 | 1.05 | % | 1.06 | % | 1.06 | % | 1.06 | % | 1.13 | %6 | 1.05 | %4,6 | 1.05 | %4,6 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
0.21 | %6 | 0.37 | % | (0.12 | )% | 0.28 | % | 0.04 | % | 0.83 | % | (0.33 | )% | (0.53 | )% | (0.29 | )%6 | 0.21 | %6 | (0.33 | )%6 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Portfolio turnover rate |
0.50 | %5 | 4.68 | % | 6.95 | % | 13.15 | % | 9.63 | % | 13.70 | % | 13.51 | % | 16.12 | % | 26.65 | % | 0.50 | %5 | 4.68 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| 1 Based on average shares outstanding. 2 Benefit of expense reduction rounds to less than 0.01%. 3 For the period May 29, 2009 (initial offering of Institutional Shares) to September 30, 2009. 4 Interest expense rounds to less than 0.01%. |
5 Not Annualized. 6 Annualized. 7 For the period January 29, 2016 (initial offering of R6 Shares) to September 30, 2016. |
| 38 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Funds |
FINANCIAL HIGHLIGHTS (Unaudited) (Continued)
BARON SMALL CAP FUND
Selected data for a share outstanding throughout each period:
| RETAIL SHARES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 30.59 | $ | 30.34 | $ | 33.68 | $ | 32.83 | $ | 26.14 | $ | 20.84 | $ | 20.90 | $ | 17.96 | $ | 18.70 | $ | 25.47 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
0.03 | 1 | (0.18 | )1 | (0.21 | )1 | (0.01 | )1 | (0.12 | )1 | (0.19 | )1 | (0.15 | )1 | (0.06 | )1 | (0.13 | )1 | (0.09 | )1 | ||||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
2.56 | 3.84 | (1.10 | ) | 2.14 | 7.61 | 5.96 | 0.09 | 2 | 3.00 | (0.61 | ) | (5.01 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total from investment operations |
2.59 | 3.66 | (1.31 | ) | 2.13 | 7.49 | 5.77 | (0.06 | ) | 2.94 | (0.74 | ) |
|
(5.10 |
) |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(5.68 | ) | (3.41 | ) | (2.03 | ) | (1.28 | ) | (0.80 | ) | (0.47 | ) | 0.00 | 0.00 | (0.00 | )3 | (1.67 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total distributions |
(5.68 | ) | (3.41 | ) | (2.03 | ) | (1.28 | ) | (0.80 | ) | (0.47 | ) | 0.00 | 0.00 | (0.00 | ) |
|
(1.67 |
) |
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 27.50 | $ | 30.59 | $ | 30.34 | $ | 33.68 | $ | 32.83 | $ | 26.14 | $ | 20.84 | $ | 20.90 | $ | 17.96 |
$ |
18.70 |
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total return |
9.90 | %6 | 12.89 | % | (4.32 | )% | 6.52 | % | 29.51 | % | 28.09 | % | (0.29 | )% | 16.37 | % | (3.95 | )% |
|
(21.44 |
)% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 1,696.2 | $ | 1,826.3 | $ | 2,601.4 | $ | 3,192.8 | $ | 3,626.1 | $ | 3,081.8 | $ | 2,842.0 | $ | 3,032.0 | $ | 2,719.4 | $ | 2,871.6 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.32 | %7,8 | 1.32 | %8 | 1.30 | % | 1.30 | % | 1.31 | % | 1.31 | % | 1.31 | % | 1.31 | % | 1.34 | %4 |
|
1.32 |
%4 |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
0.23 | %7 | (0.64 | )% | (0.61 | )% | (0.04 | )% | (0.42 | )% | (0.76 | )% | (0.63 | )% | (0.30 | )% | (0.86 | )% |
|
(0.42 |
)% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Portfolio turnover rate |
7.70 | %6 | 10.25 | % | 14.66 | % | 16.41 | % | 20.35 | % | 28.02 | % | 32.81 | % | 27.22 | % | 35.83 | % |
|
41.52 |
% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| INSTITUTIONAL SHARES | R6 SHARES | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | Six Months Ended March 31, |
Year Ended September 30, |
|||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 20095 | 2017 | 20169 | ||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 31.29 | $ | 30.88 | $ | 34.16 | $ | 33.20 | $ | 26.36 | $ | 20.96 | $ | 20.97 | $ | 17.97 | $ | 15.52 | $ | 31.29 | $ | 26.06 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
0.07 | 1 | (0.12 | )1 | (0.13 | )1 | 0.06 | 1 | (0.05 | )1 | (0.13 | )1 | (0.10 | )1 | (0.03 | )1 | (0.04 | )1 | (0.05 | )1 | (0.17 | )1 | ||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
2.63 | 3.94 | (1.12 | ) | 2.18 | 7.69 | 6.00 | 0.09 | 2 | 3.03 | 2.49 | 2.75 | 5.40 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total from investment operations |
2.70 | 3.82 | (1.25 | ) | 2.24 | 7.64 | 5.87 | (0.01 | ) | 3.00 | 2.45 | 2.70 | 5.23 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(5.68 | ) | (3.41 | ) | (2.03 | ) | (1.28 | ) | (0.80 | ) | (0.47 | ) | 0.00 | 0.00 | 0.00 | (5.68 | ) | 0.00 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total distributions |
(5.68 | ) | (3.41 | ) | (2.03 | ) | (1.28 | ) | (0.80 | ) | (0.47 | ) | 0.00 | 0.00 | 0.00 |
|
(5.68 |
) |
|
0.00 |
| |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 28.31 | $ | 31.29 | $ | 30.88 | $ | 34.16 | $ | 33.20 | $ | 26.36 | $ | 20.96 | $ | 20.97 | $ | 17.97 |
$ |
28.31 |
|
$ |
31.29 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total return |
10.05 | %6 | 13.21 | % | (4.08 | )% | 6.79 | % | 29.85 | % | 28.41 | % | (0.05 | )% | 16.69 | % | 15.79 | %6 | 10.05 | %6 | 20.07 | %6 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 1,600.0 | $ | 1,680.7 | $ | 1,923.2 | $ | 2,057.4 | $ | 1,775.7 | $ | 1,111.0 | $ | 518.6 | $ | 261.1 | $ | 89.4 | $ | 78.0 | $ | 3.7 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.06 | %7,8 | 1.06 | %8 | 1.04 | % | 1.04 | % | 1.05 | % | 1.05 | % | 1.06 | % | 1.06 | % | 1.16 | %7 |
|
1.09 |
%7,8 |
|
1.06 |
%7,8 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
0.46 | %7 | (0.41 | )% | (0.37 | )% | 0.18 | % | (0.16 | )% | (0.53 | )% | (0.42 | )% | (0.15 | )% | (0.75 | )%7 |
|
(0.39 |
)%7 |
|
(0.85 |
)%7 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Portfolio turnover rate |
7.70 | %6 | 10.25 | % | 14.66 | % | 16.41 | % | 20.35 | % | 28.02 | % | 32.81 | % | 27.22 | % | 35.83 | % |
|
7.70 |
%6 |
|
10.25 |
% | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| 1 Based on average shares outstanding. 2 The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of investments of the Fund. 3 Less than $0.01 per share. 4 Benefit of expense reduction rounds to less than 0.01%. |
5 For the period May 29, 2009 (initial offering of Institutional Shares) to September 30, 2009. 6 Not Annualized. 7 Annualized. 8 Interest expense rounds to less than 0.01%. 9 For the period January 29, 2016 (initial offering of R6 Shares) to September 30, 2016. |
| See Notes to Financial Statements. | 39 |
Table of Contents
| Baron Funds | March 31, 2017 |
FINANCIAL HIGHLIGHTS (Unaudited) (Continued)
BARON OPPORTUNITY FUND
Selected data for a share outstanding throughout each period:
| RETAIL SHARES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 16.87 | $ | 17.12 | $ | 18.61 | $ | 19.26 | $ | 15.61 | $ | 12.83 | $ | 12.76 | $ | 10.61 | $ | 9.90 | $ | 13.01 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment loss |
(0.09 | )1 | (0.13 | )1 | (0.21 | )1 | (0.24 | )1 | (0.17 | )1 | (0.17 | )1 | (0.16 | )1 | (0.13 | )1 | (0.08 | )1 | (0.09 | )1 | ||||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.20 | 1.70 | (0.25 | ) | 0.79 | 4.06 | 2.95 | 0.23 | 2.28 | 0.79 | (3.02 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total from investment operations |
1.11 | 1.57 | (0.46 | ) | 0.55 | 3.89 | 2.78 | 0.07 | 2.15 | 0.71 |
|
(3.11 |
) |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(1.89 | ) | (1.82 | ) | (1.03 | ) | (1.20 | ) | (0.24 | ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total distributions |
(1.89 | ) | (1.82 | ) | (1.03 | ) | (1.20 | ) | (0.24 | ) | 0.00 | 0.00 | 0.00 | 0.00 |
|
0.00 |
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Redemption fees added to paid-in capital |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2 | 0.00 | 2 | 0.00 | 2 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 16.09 | $ | 16.87 | $ | 17.12 | $ | 18.61 | $ | 19.26 | $ | 15.61 | $ | 12.83 | $ | 12.76 | $ | 10.61 |
$ |
9.90 |
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total return |
7.95 | %8 | 9.19 | % | (2.70 | )% | 2.87 | %5 | 25.39 | % | 21.67 | % | 0.55 | % | 20.26 | % | 7.17 | % |
|
(23.90 |
)% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 178.7 | $ | 207.0 | $ | 232.2 | $ | 331.2 | $ | 359.9 | $ | 332.4 | $ | 240.4 | $ | 214.4 | $ | 142.7 | $ | 154.4 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.44 | %7,9 | 1.41 | %7 | 1.38 | %7 | 1.35 | % | 1.37 | % | 1.39 | % | 1.41 | % | 1.44 | % | 1.50 | % | 1.42 | % | ||||||||||||||||||||||||||||
| Less: Reimbursement of expenses by Adviser and/or offsets |
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | %4 | 0.00 | %4 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net operating expenses to average net assets |
1.44 | %9 | 1.41 | % | 1.38 | % | 1.35 | % | 1.37 | % | 1.39 | % | 1.41 | % | 1.44 | % | 1.50 | % |
|
1.42 |
% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net investment loss to average net assets |
(1.22 | )%9 | (0.83 | )% | (1.10 | )% | (1.24 | )% | (1.02 | )% | (1.16 | )% | (1.11 | )% | (1.08 | )% | (1.00 | )% |
|
(0.79 |
)% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Portfolio turnover rate |
16.80 | %8 | 32.38 | % | 41.87 | % | 63.40 | % | 70.44 | % | 88.56 | % | 65.43 | % | 76.44 | % | 68.09 | % |
|
61.44 |
% |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| INSTITUTIONAL SHARES | R6 SHARES | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | Six Months Ended March 31, |
Year Ended September 30, |
|||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 20096 | 2017 | 201610 | ||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 17.27 | $ | 17.45 | $ | 18.89 | $ | 19.49 | $ | 15.75 | $ | 12.91 | $ | 12.80 | $ | 10.62 | $ | 8.88 | $ | 17.28 | $ | 16.88 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment loss |
(0.08 | )1 | (0.08 | )1 | (0.16 | )1 | (0.19 | )1 | (0.13 | )1 | (0.13 | )1 | (0.12 | )1 | (0.10 | )1 | (0.02 | )1 | (0.07 | )1 | (0.02 | )1 | ||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.25 | 1.72 | (0.25 | ) | 0.79 | 4.11 | 2.97 | 0.23 | 2.28 | 1.76 | 1.24 | 0.42 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total from investment operations |
1.17 | 1.64 | (0.41 | ) | 0.60 | 3.98 | 2.84 | 0.11 | 2.18 | 1.74 | 1.17 | 0.40 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
(1.89 | ) | (1.82 | ) | (1.03 | ) | (1.20 | ) | (0.24 | ) | 0.00 | 0.00 | 0.00 | 0.00 | (1.89 | ) | 0.00 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total distributions |
(1.89 | ) | (1.82 | ) | (1.03 | ) | (1.20 | ) | (0.24 | ) | 0.00 | 0.00 | 0.00 | 0.00 |
|
(1.89 |
) |
|
0.00 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Redemption fees added to paid-in capital |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 16.55 | $ | 17.27 | $ | 17.45 | $ | 18.89 | $ | 19.49 | $ | 15.75 | $ | 12.91 | $ | 12.80 | $ | 10.62 |
$ |
16.56 |
|
$ |
17.28 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total return |
8.12 | %8 | 9.44 | % | (2.38 | )% | 3.10 | %5 | 25.74 | % | 22.00 | % | 0.86 | % | 20.53 | % | 19.59 | %3,8 | 8.12 | %8 | 2.37 | %8 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 42.1 | $ | 43.3 | $ | 91.7 | $ | 109.4 | $ | 101.3 | $ | 62.5 | $ | 35.5 | $ | 25.5 | $ | 10.9 | $ | 0.4 | $ | 0.5 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.18 | %7,9 | 1.13 | %7 | 1.10 | %7 | 1.08 | % | 1.11 | % | 1.13 | % | 1.14 | % | 1.18 | % | 1.37 | %9 | 1.15 | %7,9 | 1.12 | %7,9 | ||||||||||||||||||||||||||
| Less: Reimbursement of expenses by Adviser and/or offsets |
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | (0.12 | )%9 | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net operating expenses to average net assets |
1.18 | %9 | 1.13 | % | 1.10 | % | 1.08 | % | 1.11 | % | 1.13 | % | 1.14 | % | 1.18 | % | 1.25 | %9 |
|
1.15 |
%9 |
|
1.12 |
%9 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net investment loss to average net assets |
(0.96 | )%9 | (0.46 | )% | (0.84 | )% | (0.97 | )% | (0.79 | )% | (0.90 | )% | (0.84 | )% | (0.83 | )% | (0.74 | )%9 |
|
(0.94 |
)%9 |
|
(1.25 |
)%9 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Portfolio turnover rate |
16.80 | %8 | 32.38 | % | 41.87 | % | 63.40 | % | 70.44 | % | 88.56 | % | 65.43 | % | 76.44 | % | 68.09 | % |
|
16.80 |
%8 |
|
32.38 |
% | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| 1 Based on average shares outstanding. 2 Less than $0.01 per share. 3 The total returns would have been lower had certain expenses not been reduced during the period shown. 4 Benefit of expense reduction rounds to less than 0.01%. 5 The Adviser made a voluntary payment to the Fund in the amount of $140,762 to compensate the Fund for a loss incurred due to a trade processing error. The impact of this payment increased the Fund’s total return by 0.03%. |
6 For the period May 29, 2009 (initial offering of Institutional Shares) to September 30, 2009. 7 Interest expense rounds to less than 0.01% 8 Not Annualized. 9 Annualized. 10 For the period August 31, 2016 (initial offering of R6 Shares) to September 30, 2016. |
| 40 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Funds |
FINANCIAL HIGHLIGHTS (Unaudited) (Continued)
BARON FIFTH AVENUE GROWTH FUND
Selected data for a share outstanding throughout each period:
| RETAIL SHARES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 19.35 | $ | 16.91 | $ | 16.83 | $ | 14.42 | $ | 11.83 | $ | 8.98 | $ | 9.21 | $ | 8.60 | $ | 10.38 | $ | 14.12 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
(0.04 | )1 | (0.08 | )1 | (0.09 | )1 | (0.05 | )1 | 0.02 | 1 | (0.03 | )1 | (0.06 | )1 | (0.03 | )1 | 0.03 | 1 | 0.00 | 1,2 | ||||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.54 | 2.52 | 0.17 | 7 | 2.46 | 2.57 | 2.88 | (0.17 | ) | 0.66 | (1.03 | ) | (2.62 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total from investment operations |
1.50 | 2.44 | 0.08 | 2.41 | 2.59 | 2.85 | (0.23 | ) | 0.63 | (1.00 | ) | (2.62 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (0.02 | ) | (0.01 | ) | 0.00 | ||||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (0.77 | ) | (1.12 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total distributions |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (0.02 | ) | (0.78 | ) | (1.12 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 20.85 | $ | 19.35 | $ | 16.91 | $ | 16.83 | $ | 14.42 | $ | 11.83 | $ | 8.98 | $ | 9.21 | $ | 8.60 | $ | 10.38 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total return |
7.75 | %3,5 | 14.43 | %3 | 0.48 | %3 | 16.71 | %3 | 21.89 | %3 | 31.74 | %3 | (2.50 | )%3 | 7.38 | %3 | (7.75 | )%3 | (19.96 | )%3 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 71.4 | $ | 73.5 | $ | 71.5 | $ | 53.2 | $ | 47.8 | $ | 34.8 | $ | 23.4 | $ | 29.0 | $ | 32.8 | $ | 58.2 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of total expenses to average net assets |
1.15 | %6 | 1.26 | % | 1.32 | % | 1.37 | % | 1.47 | % | 1.55 | % | 1.59 | % | 1.62 | % | 1.69 | % | 1.47 | % | ||||||||||||||||||||||||||||
| Less: Ratio of interest expense to average net assets |
(0.01 | )%6 | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.14 | %6 | 1.26 | % | 1.32 | % | 1.37 | % | 1.47 | % | 1.55 | % | 1.59 | % | 1.62 | % | 1.69 | % | 1.47 | % | ||||||||||||||||||||||||||||
| Less: Reimbursement of expenses by Adviser and/or offsets |
(0.04 | )%6 | (0.04 | )% | (0.02 | )% | (0.07 | )% | (0.17 | )% | (0.25 | )% | (0.29 | )% | (0.25 | )% | (0.29 | )% | (0.07 | )% | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net operating expenses to average net assets |
1.10 | %6 | 1.22 | % | 1.30 | % | 1.30 | % | 1.30 | % | 1.30 | % | 1.30 | % | 1.37 | % | 1.40 | % | 1.40 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
(0.45 | )%6 | (0.43 | )% | (0.49 | )% | (0.29 | )% | 0.14 | % | (0.30 | )% | (0.55 | )% | (0.32 | )% | 0.40 | % | (0.01 | )% | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Portfolio turnover rate |
7.09 | %5 | 19.30 | % | 14.54 | % | 16.84 | % | 22.91 | % | 79.07 | % | 75.36 | % | 57.67 | % | 39.61 | % | 39.59 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| INSTITUTIONAL SHARES | R6 SHARES | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | Six Months Ended March 31, |
Year Ended September 30, |
|||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 20094 | 2017 | 20168 | ||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 19.62 | $ | 17.10 | $ | 17.00 | $ | 14.53 | $ | 11.89 | $ | 9.00 | $ | 9.21 | $ | 8.61 | $ | 7.54 | $ | 19.63 | $ | 17.03 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) |
(0.02 | )1 | (0.03 | )1 | (0.04 | )1 | (0.01 | )1 | 0.05 | 1 | (0.01 | )1 | (0.03 | )1 | (0.01 | )1 | 0.02 | 1 | (0.02 | )1 | (0.05 | )1 | ||||||||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.57 | 2.55 | 0.16 | 7 | 2.48 | 2.59 | 2.90 | (0.18 | ) | 0.66 | 1.05 | 1.57 | 2.65 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total from investment operations |
1.55 | 2.52 | 0.12 | 2.47 | 2.64 | 2.89 | (0.21 | ) | 0.65 | 1.07 | 1.55 | 2.60 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | (0.02 | ) | 0.00 | 0.00 | 0.00 | 0.00 | (0.05 | ) | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||
| Net realized gain on investments |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total distributions |
0.00 | 0.00 | (0.02 | ) | 0.00 | 0.00 | 0.00 | 0.00 | (0.05 | ) | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Net asset value, end of period |
$ | 21.17 | $ | 19.62 | $ | 17.10 | $ | 17.00 | $ | 14.53 | $ | 11.89 | $ | 9.00 | $ | 9.21 | $ | 8.61 | $ | 21.18 | $ | 19.63 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Total return |
7.90 | %3,5 | 14.74 | %3 | 0.72 | % | 17.00 | %3 | 22.20 | %3 | 32.11 | %3 | (2.28 | )%3 | 7.59 | %3 | 14.19 | %3,5 | 7.90 | %3,5 | 15.27 | %3,5 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 78.7 | $ | 81.9 | $ | 74.7 | $ | 56.0 | $ | 33.8 | $ | 18.9 | $ | 10.2 | $ | 10.4 | $ | 9.5 | $ | 1.5 | $ | 1.4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of total expenses to average net assets |
0.87 | %6 | 0.98 | % | 1.04 | % | 1.08 | % | 1.18 | % | 1.26 | % | 1.31 | % | 1.35 | % | 1.61 | %6 | 0.86 | %6 | 0.85 | %6 | ||||||||||||||||||||||||||
| Less: Ratio of interest expense to average net assets |
(0.01 | )%6 | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | (0.01 | )%6 | 0.00 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of operating expenses to average net assets |
0.86 | %6 | 0.98 | % | 1.04 | % | 1.08 | % | 1.18 | % | 1.26 | % | 1.31 | % | 1.35 | % | 1.61 | %6 | 0.85 | %6 | 0.85 | %6 | ||||||||||||||||||||||||||
| Less: Reimbursement of expenses by Adviser and/or offsets |
(0.01 | )%6 | (0.01 | )% | 0.00 | % | (0.03 | )% | (0.13 | )% | (0.21 | )% | (0.26 | )% | (0.24 | )% | (0.46 | )%6 | (0.01 | )%6 | (0.01 | )%6 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net operating expenses to average net assets |
0.85 | %6 | 0.97 | % | 1.04 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.11 | % | 1.15 | %6 | 0.84 | %6 | 0.84 | %6 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
(0.19 | )%6 | (0.19 | )% | (0.23 | )% | (0.08 | )% | 0.36 | % | (0.05 | )% | (0.30 | )% | (0.07 | )% | 0.58 | %6 | (0.19 | )%6 | (0.37 | )%6 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| Portfolio turnover rate |
7.09 | %5 | 19.30 | % | 14.54 | % | 16.84 | % | 22.91 | % | 79.07 | % | 75.36 | % | 57.67 | % | 39.61 | % | 7.09 | %5 | 19.30 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| 1 Based on average shares outstanding. 2 Less than $0.01 per share. 3 The total returns would have been lower had certain expenses not been reduced during the period shown. 4 For the period May 29, 2009 (initial offering of Institutional Shares) to September 30, 2009. 5 Not Annualized. |
6 Annualized. 7 The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of Fund shares in relation to fluctuating market values of investments of the Fund. 8 For the period January 29, 2016 (initial offering of R6 Shares) to September 30, 2016. |
| See Notes to Financial Statements. | 41 |
Table of Contents
| Baron Funds | March 31, 2017 |
FINANCIAL HIGHLIGHTS (Unaudited) (Continued)
BARON DISCOVERY FUND
Selected data for a share outstanding throughout each period:
| RETAIL SHARES | ||||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 13.40 | $ | 11.13 | $ | 11.68 | $ | 10.00 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||
| Net investment income (loss) |
(0.07 | )1 | 0.16 | 1 | (0.13 | )1 | (0.10 | )1 | ||||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.61 | 2.38 | (0.42 | ) | 1.78 | 2 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total from investment operations |
1.54 | 2.54 | (0.55 | ) | 1.68 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||
| Net realized gain on investments |
0.00 | (0.27 | ) | 0.00 | 0.00 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total distributions |
0.00 | (0.27 | ) | 0.00 | 0.00 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net asset value, end of period |
$ | 14.94 | $ | 13.40 | $ | 11.13 | $ | 11.68 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total return |
11.49 | %3,6 | 23.24 | %3 | (4.71 | )%3,4 | 16.80 | %3 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 47.8 | $ | 18.6 | $ | 19.9 | $ | 16.6 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Ratio of operating expenses to average net assets |
1.65 | %7 | 1.88 | % | 1.57 | % | 2.16 | % | ||||||||||||||||||||
| Less: Reimbursement of expenses by Adviser and/or offsets |
(0.30 | )%7 | (0.53 | )% | (0.22 | )% | (0.81 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Ratio of net operating expenses to average net assets |
1.35 | %7 | 1.35 | % | 1.35 | % | 1.35 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
(0.99 | )%7 | 1.38 | % | (0.97 | )% | (0.85 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Portfolio turnover rate |
21.85 | %6 | 90.74 | % | 114.82 | % | 109.40 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| INSTITUTIONAL SHARES | R6 SHARES | |||||||||||||||||||||||||||
| Six Months Ended March 31, |
Year Ended September 30, |
Six Months 2017 |
Year
Ended 20165 |
|||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||
| Net asset value, beginning of period |
$ | 13.50 | $ | 11.19 | $ | 11.71 | $ | 10.00 | $ | 13.50 | $ | 12.89 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||||||||||
| Net investment income (loss) |
(0.05 | )1 | 0.12 | 1 | (0.10 | )1 | (0.08 | )1 | (0.05 | )1 | (0.01 | )1 | ||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.62 | 2.46 | (0.42 | ) | 1.79 | 2 | 1.63 | 0.62 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total from investment operations |
1.57 | 2.58 | (0.52 | ) | 1.71 | 1.58 | 0.61 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Less distributions to shareholders from: |
||||||||||||||||||||||||||||
| Net investment income |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||
| Net realized gain on investments |
0.00 | (0.27 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total distributions |
0.00 | (0.27 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net asset value, end of period |
$ | 15.07 | $ | 13.50 | $ | 11.19 | $ | 11.71 | $ | 15.08 | $ | 13.50 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total return |
11.63 | %3,6 | 23.47 | %3 | (4.44 | )%3,4 | 17.10 | %3 | 11.70 | %3 6 | 4.73 | %3 6 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Ratios/Supplemental data: |
||||||||||||||||||||||||||||
| Net assets (in millions), end of period |
$ | 69.1 | $ | 22.8 | $ | 53.9 | $ | 48.7 | $ | 2.5 | $ | 2.0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Ratio of operating expenses to average net assets |
1.36 | %7 | 1.49 | % | 1.25 | % | 1.91 | % | 1.31 | %7 | 1.48 | %7 | ||||||||||||||||
| Less: Reimbursement of expenses by Adviser and/or offsets |
(0.26 | )%7 | (0.39 | )% | (0.15 | )% | (0.81 | )% | (0.22 | )%7 | (0.39 | )%7 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Ratio of net operating expenses to average net assets |
1.10 | %7 | 1.10 | % | 1.10 | % | 1.10 | % | 1.09 | %7 | 1.09 | %7 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Ratio of net investment income (loss) to average net assets |
(0.74 | )%7 | 1.06 | % | (0.72 | )% | (0.64 | )% | (0.73 | )%7 | (0.66 | )%7 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Portfolio turnover rate |
21.85 | %6 | 90.74 | % | 114.82 | % | 109.40 | % | 21.85 | %6 | 90.74 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 1 Based on average shares outstanding. 2 The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of investments of the Fund. 3 The total returns would have been lower had certain expenses not been reduced during the period shown. |
4 The Adviser made a voluntary payment to the Fund in the amount of $1,000 to compensate the Fund for a loss incurred due to a trade processing error. The impact of this payment increased the Fund’s total return by less than 0.01%. 5 For the period August 31, 2016 (initial offering of R6 Shares) to September 30, 2016. 6 Not Annualized. 7 Annualized. |
| 42 | See Notes to Financial Statements. |
Table of Contents
| March 31, 2017 | Baron Funds |
As a shareholder of the Funds, 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. Due to the payment of Rule 12b-1 fees, long-term shareholders may indirectly pay more than the maximum permitted front-end sales charge. The information on this page is intended to help you understand your ongoing costs of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The information in the following table is based on an investment of $1,000 invested on October 1, 2016 and held for the six months ended March 30, 2017.
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 FOR THE SIX MONTHS ENDED MARCH 31, 20171
| Actual Total Return |
Beginning Account Value October 1, 2016 |
Ending Account Value March 31, 2017 |
Annualized Expense Ratio |
Expenses Paid During the Period3 |
||||||||||||||||
| Baron Asset Fund — Retail Shares |
10.08 | % | $ | 1,000.00 | $ | 1,100.80 | 1.31 | % | $ | 6.86 | ||||||||||
| Baron Asset Fund — Institutional Shares |
10.24 | % | $ | 1,000.00 | $ | 1,102.40 | 1.04 | % | $ | 5.45 | ||||||||||
| Baron Asset Fund — R6 Shares |
10.22 | % | $ | 1,000.00 | $ | 1,102.20 | 1.04 | % | $ | 5.45 | ||||||||||
| Baron Growth Fund — Retail Shares |
10.18 | % | $ | 1,000.00 | $ | 1,101.80 | 1.30 | % | $ | 6.81 | ||||||||||
| Baron Growth Fund — Institutional Shares |
10.32 | % | $ | 1,000.00 | $ | 1,103.20 | 1.05 | % | $ | 5.51 | ||||||||||
| Baron Growth Fund — R6 Shares |
10.32 | % | $ | 1,000.00 | $ | 1,103.20 | 1.05 | % | $ | 5.51 | ||||||||||
| Baron Small Cap Fund — Retail Shares |
9.90 | % | $ | 1,000.00 | $ | 1,099.00 | 1.32 | % | $ | 6.91 | ||||||||||
| Baron Small Cap Fund — Institutional Shares |
10.05 | % | $ | 1,000.00 | $ | 1,100.50 | 1.06 | % | $ | 5.55 | ||||||||||
| Baron Small Cap Fund — R6 Shares |
10.05 | % | $ | 1,000.00 | $ | 1,100.50 | 1.09 | % | $ | 5.71 | ||||||||||
| Baron Opportunity Fund — Retail Shares |
7.95 | % | $ | 1,000.00 | $ | 1,079.50 | 1.44 | % | $ | 7.47 | ||||||||||
| Baron Opportunity Fund — Institutional Shares |
8.12 | % | $ | 1,000.00 | $ | 1,081.20 | 1.18 | % | $ | 6.12 | ||||||||||
| Baron Opportunity Fund — R6 Shares |
8.12 | % | $ | 1,000.00 | $ | 1,081.20 | 1.15 | % | $ | 5.97 | ||||||||||
| Baron Fifth Avenue Growth Fund — Retail Shares |
7.75 | % | $ | 1,000.00 | $ | 1,077.50 | 4 | 1.11 | %2,5 | $ | 5.75 | |||||||||
| Baron Fifth Avenue Growth Fund — Institutional Shares |
7.90 | % | $ | 1,000.00 | $ | 1,079.00 | 4 | 0.86 | %2,5 | $ | 4.46 | |||||||||
| Baron Fifth Avenue Growth Fund — R6 Shares |
7.90 | % | $ | 1,000.00 | $ | 1,079.00 | 4 | 0.85 | %2,5 | $ | 4.41 | |||||||||
| Baron Discovery Fund — Retail Shares |
11.49 | % | $ | 1,000.00 | $ | 1,114.90 | 4 | 1.35 | %5 | $ | 7.12 | |||||||||
| Baron Discovery Fund — Institutional Shares |
11.63 | % | $ | 1,000.00 | $ | 1,116.30 | 4 | 1.10 | %5 | $ | 5.80 | |||||||||
| Baron Discovery Fund — R6 Shares |
11.70 | % | $ | 1,000.00 | $ | 1,117.00 | 4 | 1.09 | %5 | $ | 5.75 | |||||||||
| 1 | Assumes reinvestment of all dividends and capital gain distributions, if any. |
| 2 | Annualized expense ratio for Baron Fifth Avenue Growth Fund for the six months ended March 31, 2017, includes 1.10%, 0.85% and 0.84% for net operating expenses and 0.01%, 0.01% and 0.01% for interest expense for the Retail, Institutional and R6 Shares, respectively. |
| 3 | Expenses are equal to each Share Class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
| 4 | Ending account value assumes the return earned after waiver and would have been lower if a portion of the expenses had not been waived. |
| 5 | Annualized expense ratios are adjusted to reflect fee waiver. |
43
Table of Contents
| Baron Funds | March 31, 2017 |
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 Funds’ 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 Funds and other funds. To do so, compare the 5% hypothetical example relating to the Funds 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 FOR THE SIX MONTHS ENDED MARCH 31, 2017
| Hypothetical Annualized Total Return |
Beginning Account Value October 1, 2016 |
Ending Account Value March 31, 2017 |
Annualized Expense Ratio |
Expenses Paid During the Period3 |
||||||||||||||||
| Baron Asset Fund — Retail Shares |
5.00 | % | $ | 1,000.00 | $ | 1,018.40 | 1.31 | % | $ | 6.59 | ||||||||||
| Baron Asset Fund — Institutional Shares |
5.00 | % | $ | 1,000.00 | $ | 1.019.75 | 1.04 | % | $ | 5.24 | ||||||||||
| Baron Asset Fund — R6 Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.75 | 1.04 | % | $ | 5.24 | ||||||||||
| Baron Growth Fund — Retail Shares |
5.00 | % | $ | 1,000.00 | $ | 1,018.45 | 1.30 | % | $ | 6.54 | ||||||||||
| Baron Growth Fund — Institutional Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.70 | 1.05 | % | $ | 5.29 | ||||||||||
| Baron Growth Fund — R6 Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.70 | 1.05 | % | $ | 5.29 | ||||||||||
| Baron Small Cap Fund — Retail Shares |
5.00 | % | $ | 1,000.00 | $ | 1,018.35 | 1.32 | % | $ | 6.64 | ||||||||||
| Baron Small Cap Fund — Institutional Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.65 | 1.06 | % | $ | 5.34 | ||||||||||
| Baron Small Cap Fund — R6 Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.50 | 1.09 | % | $ | 5.49 | ||||||||||
| Baron Opportunity Fund — Retail Shares |
5.00 | % | $ | 1,000.00 | $ | 1,017.75 | 1.44 | % | $ | 7.24 | ||||||||||
| Baron Opportunity Fund — Institutional Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.05 | 1.18 | % | $ | 5.94 | ||||||||||
| Baron Opportunity Fund — R6 Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.20 | 1.15 | % | $ | 5.79 | ||||||||||
| Baron Fifth Avenue Growth Fund — Retail Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.40 | 4 | 1.11 | %2,5 | $ | 5.59 | |||||||||
| Baron Fifth Avenue Growth Fund — Institutional Shares |
5.00 | % | $ | 1,000.00 | $ | 1,020.64 | 4 | 0.86 | %2,5 | $ | 4.33 | |||||||||
| Baron Fifth Avenue Growth Fund — R6 Shares |
5.00 | % | $ | 1,000.00 | $ | 1,020.69 | 4 | 0.85 | %2,5 | $ | 4.28 | |||||||||
| Baron Discovery Fund — Retail Shares |
5.00 | % | $ | 1,000.00 | $ | 1,018.20 | 4 | 1.35 | %5 | $ | 6.79 | |||||||||
| Baron Discovery Fund — Institutional Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.45 | 4 | 1.10 | %5 | $ | 5.54 | |||||||||
| Baron Discovery Fund — R6 Shares |
5.00 | % | $ | 1,000.00 | $ | 1,019.50 | 4 | 1.09 | %5 | $ | 5.49 | |||||||||
| 1 | Assumes reinvestment of all dividends and capital gain distributions, if any. |
| 2 | Annualized expense ratio for Baron Fifth Avenue Growth Fund for the six months ended March 31, 2017, includes 1.10%, 0.85% and 0.84% for net operating expenses and 0.01%, 0.01% and 0.01% for interest expense for the Retail, Institutional and R6 Shares, respectively. |
| 3 | Expenses are equal to each Share Class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. |
| 4 | Ending account value assumes the return earned after waiver and would have been lower if a portion of the expenses had not been waived. |
| 5 | Annualized expense ratios are adjusted to reflect fee waiver. |
44
Table of Contents
Go Paperless!
It’s fast, simple and a smart way to help the environment.
Enjoy the speed and convenience of receiving Fund documents electronically.
For more information, and to enroll today, go to www.baronfunds.com/edelivery.
767 Fifth Avenue, 49th Fl.
New York, NY 10153
1.800.99.BARON
212-583-2000
www.BaronFunds.com
Table of Contents
MARCH 17
Table of Contents
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Included herein under 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 based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) 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 12. Exhibits.
(a)(1) Not applicable.
(a)(2) Certification of each of the principal executive officers and principal financial officers of the Registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as a part of EX-99.CERT.
(b) Certification of each of the principal executive officers and principal financial officers of the Registrant as required by Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto as a part of EX-99.906CERT.
Table of Contents
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 | ||
| Chief Executive Officer | ||
| Date: May 26, 2017 | ||
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 | ||
| Chief Executive Officer | ||
| Date: May 26, 2017 | ||
| By: | /s/ Peggy Wong | |
| Peggy Wong | ||
| Treasurer and Chief Financial Officer | ||
| Date: May 26, 2017 | ||