Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Small Cap Fund”. A copy of the letter can be downloaded here. The market extended its positive trends in the fourth quarter. The Baron Small Cap Fund was down 1.56% in the quarter compared to 1.22% gain for the Russell 2000 Growth Index. The fund returned (0.66)% in 2025, trailing the index by 13.67 percentage points. The yearly performance was weak both on an absolute and a relative basis. Large-cap growth stocks led the market for the third consecutive year, with concentrated leadership. Heading into 2026, the firm expects better growth ahead for small caps given the solid setup. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Small Cap Fund highlighted Neptune Insurance Holdings Inc. (NYSE:NP). The fund added Neptune Insurance Holdings Inc. (NYSE:NP), a leading flood insurance provider, during the quarter. On February 6, 2026, Neptune Insurance Holdings Inc. (NYSE:NP) stock closed at $23.56 per share. One-month return of Neptune Insurance Holdings Inc. (NYSE:NP) was -9.42%, and its shares are down 19.20% over the past twelve months. Neptune Insurance Holdings Inc. (NYSE:NP) has a market capitalization of $3.252 billion.
Baron Small Cap Fund stated the following regarding Neptune Insurance Holdings Inc. (NYSE:NP) in its fourth quarter 2025 investor letter:
“In the fourth quarter, we added one new holding and increased positions of many of our existing holdings at what we think are attractive prices. We sold out of three names. The factorization of the market and short-term mentality had led to some wild swings on relatively mundane earnings announcements and news flow from the Trump Administration. As a result, 11 of our stocks moved +/- 30% in the quarter, and we tried to take advantage on both sides of the buy/sell ledger. For the year, we invested in 12 new ideas (2 were sold during the year), half of which were new to the public markets. As we have discussed in the past, we are heartened by the return of the IPOs, as they have been a great source on successful new investments for the Fund over the years.
