December 31, 2023 Baron Growth Fund

Dear Baron Growth Fund Shareholder:

Performance
Baron Growth Fund® (the Fund) gained 7.70% (Institutional Shares) for the
quarter and 14.97% for the year ended December 31, 2023. This modestly
trailed those of the Fund’s primary benchmark, the Russell 2000 Growth
Index (the Benchmark), which gained 12.75% for the quarter and 18.66%
for the year. The S&P 500 Index, which measures the performance of
publicly traded large-cap U.S. companies, gained 11.69% for the quarter and
26.29% for the year.
The Federal Reserve’s sudden interest rate pivot sent speculative, lower-
quality, and interest-rate sensitive stocks soaring in December. While the
Fund performed well on an absolute basis, our exclusive focus on high-
quality durable growth assets put us at a relative disadvantage during the
month. This is consistent with historical patterns, where the Fund generally
keeps up with the market during the early phase of rallies and protects
capital during more challenging periods, all while taking less risk than the
Benchmark. We are optimistic that this strategy will continue to generate
positive results over cycles. NEAL ROSENBERG RONALD BARON Retail Shares: BGRFX
PORTFOLIO CEO AND Institutional Shares: BGRIX
Table I. MANAGER PORTFOLIO MANAGER R6 Shares: BGRUX
Performance
Annualized for periods ended December 31, 2023
Baron Baron dramatic change for a market that generally moves in basis point
Growth Growth Russell increments. Relatively lower-quality, more speculative, and interest-rate
Fund Fund 2000 S&P
Retail Institutional Growth 500 sensitive stocks benefited the most from declining rates. We estimate that
Shares1,2 Shares1,2,3 Index1 Index1 the Fund’s focus on higher-quality, less volatile and relatively larger
Three Months4 7.63% 7.70% 12.75% 11.69% businesses reduced our performance by over 330 basis points in December,
One Year 14.68% 14.97% 18.66% 26.29% or substantially all the difference in our performance versus the Benchmark
Three Years 2.08% 2.34% (3.50)% 10.00% for the year.
Five Years 14.62% 14.92% 9.22% 15.69%
Our performance in the quarter was also negatively impacted by short-term
Ten Years 9.96% 10.24% 7.16% 12.03%
Fifteen Years 13.87% 14.15% 12.07% 13.97% developments in several of our largest and longest-tenured investments.
Since Inception Shares of Vail Resorts, Inc. declined as investors fretted about unfavorable
(December 31,1994) 12.73% 12.88% 7.67% 10.47% weather conditions in the Eastern U.S. and Tahoe. While the stock fluctuates
along with meteorological forecasts, Vail’s fundamentals remain robust.
Stocks rallied meaningfully during the quarter. December was particularly Vail’s subscription revenue is growing at a double-digit rate, helped by
strong as investors celebrated moderating inflation and a dovish tone from volume growth, annual price increases, and a favorable mix shift towards
the Federal Reserve. Yields on the benchmark 10-Year U.S. Treasury Bond more expensive passes. Season passes are approaching 75% of total annual
plummeted to 3.90% after jumping to 4.80% just one quarter ago, a skier visits, which meaningfully dampens the impact of weather on Vail’s

Performance listed in the above table is net of annual operating expenses. Annual expense ratio for the Retail shares and Institutional shares as of September 30,
2023 was 1.30% and 1.05%, respectively (comprised of operating expenses of 1.29% and 1.04%, respectively, and interest expense of 0.01% and 0.01%,
respectively). The performance data quoted represents past performance. 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. The Fund’s transfer
agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. Current
performance may be lower or higher than the performance data quoted. For performance information current to the most recent month end, visit
baronfunds.com or call 1-800-99-BARON.
1 The Russell 2000® Growth Index measures the performance of small-sized U.S. companies that are classified as growth. The S&P 500 Index measures the performance of
500 widely held large-cap U.S. companies. All rights in the FTSE Russell Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a
trademark of the relevant LSE Group company and is used by any other LSE Group company under license. Neither LSE Group nor its licensors accept any liability for any
errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. The Fund includes reinvestment of dividends, net
of withholding taxes, while the Russell 2000® Growth Index and S&P 500 Index include reinvestment of dividends before taxes. Reinvestment of dividends positively
impacts the performance results. The indexes are unmanaged. Index performance is not Fund performance; one cannot invest directly into an index.
2 The performance data in the table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund
shares.
3 Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares, which have a distribution fee. The
Institutional Shares do not have a distribution fee. If the annual returns for the Institutional Shares prior to May 29, 2009 did not reflect this fee, the
returns would be higher. BARON
F U N D S
4 Not annualized.
Baron Growth Fund

financial results. Finally, the company is highly cash generative, and we CoStar’s residential products will address a total addressable market (TAM)
expect management to continue to drive the business toward consistent that exceeds $15 billion of annual recurring revenue, or almost 4 times
earnings growth and return of capital to shareholders. larger than the company’s flagship Suite offering currently serves. We
estimate that offering a residential product in international markets could
Shares of hotel franchisor Choice Hotels International, Inc. declined as the
increase that TAM by a further factor of four. We believe that this
company announced a hostile acquisition for competitor Wyndham Hotels.
represents a highly lucrative opportunity, with a fundamental market
We believe that the stock is being impacted by short-term oriented merger
structure that can support margins above 50% at scale.
arbitrageurs and does not appropriately reflect the meaningful strategic and
financial synergies represented by the combined companies. We We believe that the Sitzer-Burnett class action suit, and other similar suits,
opportunistically added to our positions during the quarter. Please see the may bring profound changes to the residential real estate market in the U.S.
section titled “Recent Purchases” for additional information. Changes in the way that real estate agents are compensated could cause a
meaningful reduction in their use, and force many to exit the market.
Shares of Iridium Communications Inc., a mobile voice and data
Additionally, huge damages and a potential exodus of buyers’ agents may
communications services vendor offering global coverage via satellite, were
cause the NAR to go bankrupt. The greater the magnitude of changes
negatively impacted by the termination of its relationship with Qualcomm.
wrought, the better the outcome will be for CoStar. We do not believe that
Iridium’s core voice and data opportunities are unrelated to the Qualcomm
CoStar’s ultimate success in the residential market depends on these
relationship, and therefore we believe that the growing annuity of high-
changes, but instead they represent a potential accelerant.
retention Iridium customers remains unaffected. We expect Iridium to
return almost $3 billion of capital to shareholders over the next six years, Table II groups our portfolio based on our assessment of the attributes that best
which is a material portion of its current enterprise value. characterize each investment. While this does not perfectly correlate to the
Global Industry Classification Standard, the industry standard nomenclature, we
Finally, our long-tenured and highly successful investments in insurers
believe it provides added transparency into our thought process.
Kinsale Capital Group, Inc. and Arch Capital Group Ltd. both declined
during the quarter. Growth in Kinsale’s gross written premiums moderated
to 33% from 58% in the prior quarter. We attribute this to normal Table II.
seasonality for property insurance and believe that this level of absolute Total returns by category for the three months ended December 31, 2023
growth reinforces our thesis that Kinsale will continue to be a net share % of Total Contribution
Net Assets Return to Return
gainer in the fast-growing excess and surplus market. Additionally, we (as of 12/31/2023) (%) (%)
believe that shares of both Arch and Kinsale were adversely impacted by the
Core Growth 28.8 19.24 5.19
rotation towards more speculative stocks that we mentioned above, after
being meaningful outperformers earlier in the year. Trex Company, Inc. 1.1 34.44 0.33
Gartner, Inc. 8.7 31.29 2.41
In late October, a federal jury in Kansas City determined that the National
IDEXX Laboratories, Inc. 3.7 26.94 0.85
Association of Realtors (NAR) and large residential brokerages conspired to
keep commission rates artificially high. The jury in the Sitzer-Burnett case Krispy Kreme, Inc. 0.9 21.34 0.17
awarded the plaintiffs an eye-catching $1.8 billion in damages, which is Guidewire Software, Inc. 1.3 21.16 0.25
eligible to be trebled under antitrust law. Other analogous suits were already Bright Horizons Family
pending, and a flood of copycat suits have been filed in the immediate Solutions, Inc. 1.0 15.76 0.17
aftermath of the verdict. This has garnered national media attention given CoStar Group, Inc. 5.7 13.66 0.79
the size of the potential damages and the way that it may dramatically Bio-Techne Corporation 2.9 13.51 0.30
impact buyers, sellers, and brokers of residential real estate. The result may
Mettler-Toledo
also create a dramatic tailwind for our investment in CoStar Group, Inc., International Inc. 1.1 9.47 0.10
which is investing aggressively to disrupt the residential real estate
Littelfuse, Inc. 0.2 8.46 0.01
advertising market.
Neogen Corp. 0.3 8.45 0.03
We believe that the key enabler of CoStar’s remarkable track record of West Pharmaceutical
growth has been its relentless reinvestment in pursuit of long-term Services, Inc. 2.0 –6.11 –0.20
profitable growth. This is enabled by the company’s enviable combination of
Marel hf. – –8.24 –0.00
favorable secular trends, recurring revenue, high incremental margins, and
robust free cash flow generation. Founder and CEO Andy Florence has Russell 2000 Growth Index 12.75
created a business that benefits from a virtuous cycle. Faster growth Disruptive Growth 10.4 7.59 0.65
generates additional profits, a portion of which can be invested back into Altair Engineering Inc. 0.8 34.51 0.22
the business to develop new products, expand into new markets, or hire ANSYS, Inc. 4.6 21.96 0.84
additional salespeople, thereby creating additional growth opportunities and
FIGS, Inc. 0.7 17.80 0.12
perpetuating the cycle.
Northvolt AB 0.2 3.50 0.00
CoStar is now undertaking its most sizeable investment cycle as it enters the Farmers Business Network,
residential lead generation marketplace. The residential real estate market Inc. 0.0 – –
represents a vast and underpenetrated opportunity. As an asset class, single-
Iridium Communications
family residential properties represent more than $40 trillion of value in the Inc. 4.0 –9.23 –0.54
U.S., or around 60% of the total value of U.S. real estate. We estimate that
December 31, 2023 Baron Growth Fund

Table II. (continued) Our investments in Real/Irreplaceable Assets, Core Growth, and
Total returns by category for the three months ended December 31, 2023 Financials represent between 19% and 42% of the Fund’s net assets, and
% of Total Contribution aggregate to 89% of net assets. Another 10% of net assets are invested in
Net Assets Return to Return businesses that we consider to be Disruptive Growth businesses, which we
(as of 12/31/2023) (%) (%)
believe offer greater growth potential, albeit with more risk relative to other
Financials 42.1 3.88 1.69 investments. We believe this balance appropriately reflects our goal to
The Carlyle Group Inc. 0.8 36.43 0.24 generate superior returns over time with less risk than the Benchmark.
Moelis & Company 0.2 26.19 0.06
As shown in the table above, our Core Growth investments meaningfully
Morningstar, Inc. 3.4 22.40 0.75 outperformed the Benchmark, while our investments in the other three
Cohen & Steers, Inc. 1.7 22.11 0.32 cohorts trailed the Benchmark. We note that within our Financials cohort,
Houlihan Lokey, Inc. 0.7 12.52 0.08 our investments in market data and analytics vendors and advisory
Essent Group Ltd. 0.3 12.11 0.04 businesses appreciated significantly, while our investment in property and
MSCI Inc. 10.9 10.55 1.07 casualty (P&C) insurers declined. Shares of P&C insurers, such as Arch and
FactSet Research Systems Kinsale, declined in December as investors rotated away from defensive
Inc. 7.3 9.33 0.71 stocks to more speculative stocks following a decline in yields. Despite
December declines, both stocks generated compelling full-year returns, and
Primerica, Inc. 3.9 6.39 0.27
both have meaningfully outperformed the Benchmark during the period in
Clearwater Analytics
which we have been invested. We believe that the hard market in P&C is
Holdings, Inc. 0.1 3.57 0.00
durable and are optimistic that both will continue to generate attractive
Arch Capital Group Ltd. 8.5 –6.83 –0.56 annual returns going forward.
Kinsale Capital Group, Inc. 4.3 –19.10 –1.31
Real/Irreplaceable Assets 19.2 2.44 0.46
Red Rock Resorts, Inc. 1.3 30.76 0.33
Alexandria Real Estate
Equities, Inc. 1.1 27.89 0.27
Douglas Emmett, Inc. 0.7 15.05 0.10
PENN Entertainment, Inc. 1.4 13.51 0.19
Gaming and Leisure
Properties, Inc. 3.4 10.04 0.32
Boyd Gaming Corporation 0.4 3.20 0.01
Vail Resorts, Inc. 5.4 –1.94 –0.07
Choice Hotels International,
Inc. 4.4 –7.29 –0.39
Marriott Vacations
Worldwide Corporation 1.1 –14.99 –0.31
Cash –0.4 – 0.00
Fees – –0.29 –0.31
Total 100.0* 7.68** 7.68**
Sources: FactSet PA, Baron Capital, and FTSE Russell.
* Individual weights may not sum to displayed total due to rounding.
** Represents the blended return of all share classes of the Fund.

Table III.
Performance Characteristics
Millennium Internet Bubble to Post-COVID-19
Millennium Internet Bubble Financial Panic Millennium Internet Bubble Inception
to Financial Panic to Present to Present 12/31/1994 to
12/31/1999 to 12/31/2008 12/31/2008 to 12/31/2023 12/31/1999 to 12/31/2023 12/31/2023
Alpha (%) 5.05 3.92 5.39 6.85
Beta 0.58 0.82 0.71 0.72
Baron Growth Fund

Table IV.
Performance
Millennium Internet Bubble to Post-COVID-19: The Impact of Not Losing Money
Millennium Internet Bubble Financial Panic Millennium Internet Bubble Inception
to Financial Panic to Present to Present 12/31/1994 to
12/31/1999 to 12/31/2008 12/31/2008 to 12/31/2023 12/31/1999 to 12/31/2023 12/31/2023
Annualized Value Annualized Value Annualized Value Annualized Value
Return $10,000 Return $10,000 Return $10,000 Return $10,000
Baron Growth Fund 2.46% $12,448 14.15% $72,836 9.62% $90,670 12.88% $335,394
Russell 2000 Growth Index (4.71)% $ 6,476 12.07% $55,254 5.46% $35,781 7.67% $ 85,350
S&P 500 Index (3.60)% $ 7,188 13.97% $71,080 7.03% $51,092 10.47% $179,394

Performance data quoted represents past performance. Past performance is no guarantee of future results. The indexes are unmanaged. Index performance is not Fund
performance; one cannot invest directly into an index.

The Fund has meaningfully outperformed its Benchmark over the long term. is poised to accelerate over the next several quarters. We believe Gartner
The Fund has gained 12.88% on an annualized basis since its inception on will emerge as a critical decision support resource for every company
December 31, 1994, which exceeds that of the Benchmark by 5.21% and evaluating the opportunities and risks of artificial intelligence for its
the S&P 500 Index by 2.41%, annualized. This represents robust absolute business. We expect this development to provide a tailwind to Gartner’s
and relative returns across a variety of market environments, driven volume growth and pricing realization over time. Gartner’s sustained
primarily by favorable stock selection. We attribute this result to not losing revenue growth and focus on cost control should drive continued margin
money during periods of significant market drawdowns, such as the expansion and enhanced free cash flow generation. The company’s balance
nine years ended December 2008, as well as robust absolute and relative sheet is in excellent shape and can support aggressive repurchases and bolt-
performance versus the Benchmark during the most recent five-year period, on acquisitions.
which featured two significant market corrections.
Shares of MSCI, Inc., a leading provider of investment decision support tools,
While the Fund did not make much money from December 31, 1999 contributed to performance. The company reported solid quarterly earnings
through December 31, 2008, a period which included the highs of the results and reiterated its 2023 free-cash-flow guidance. Shares also climbed
Internet Bubble and the lows of the Financial Panic, it did generate a positive higher in November and December as equity market performance improved.
annualized return of 2.46%. Conversely, a hypothetical investment in a fund Despite some near-term macro uncertainty, we retain long-term conviction
designed to track the Fund’s Benchmark would have declined in value by as MSCI owns strong, “all weather” franchises and remains well positioned
4.71% on an annualized basis over the same time. (Please see Table IV– to benefit from numerous secular tailwinds in the investment community.
Millennium Internet Bubble to Financial Panic). From the Financial Panic to
Shares of veterinary diagnostics leader IDEXX Laboratories,
present, the Fund generated an annualized return of 14.15%, which
Inc. contributed to performance during the quarter. While foot traffic to
exceeded that of its Benchmark by 2.08% annualized, and the S&P 500
veterinary clinics in the U.S. remained subdued, IDEXX’s excellent execution
Index by 0.18% annualized.
has enabled the company to continue to deliver robust financial results. We
We believe that the returns in the portfolio have come primarily through the believe IDEXX’s competitive trends are outstanding, and we expect new
compounded growth in the revenue and cash flow of the businesses in proprietary innovations and field sales force expansion to be meaningful
which we have invested rather than increases in valuation multiples. We are contributors to growth in 2024. We see increasing evidence that long-term
pleased that our long-term investments in what we believe are secular trends around pet ownership and pet care spending have been
competitively advantaged companies with attractive growth prospects and structurally accelerated, which should help support IDEXX’s long-term
exceptional management teams have generated attractive returns in good growth rate.
markets and have helped to protect capital during more challenging ones.
Table VI.
Table V.
Top detractors from performance for the quarter ended December 31, 2023
Top contributors to performance for the quarter ended December 31, 2023
Market Quarter
Market Quarter Cap End
Cap End When Market
When Market Year Acquired Cap Total Percent
Year Acquired Cap Total Percent Acquired (billions) (billions) Return Impact
Acquired (billions) (billions) Return Impact
Kinsale Capital Group, Inc. 2016 $0.6 $ 7.8 –19.10% –1.31%
Gartner, Inc. 2007 $2.3 $35.2 31.29% 2.41%
Arch Capital Group Ltd. 2002 0.4 27.7 –6.83 –0.56
MSCI Inc. 2007 1.8 44.7 10.55 1.07
Iridium Communications
IDEXX Laboratories, Inc. 2005 1.9 46.1 26.94 0.85
Inc. 2014 0.6 5.1 –9.23 –0.54
ANSYS, Inc. 2009 2.3 31.5 21.96 0.84
Choice Hotels
CoStar Group, Inc. 2004 0.7 35.7 13.66 0.79
International, Inc. 1996 0.4 5.6 –7.29 –0.39
Shares of Gartner, Inc., a provider of syndicated research, soared after Marriott Vacations
reporting excellent quarterly earnings results. Gartner’s core subscription Worldwide Corporation 2013 1.5 3.0 –14.99 –0.31
research businesses continued to compound at attractive rates, and growth
December 31, 2023 Baron Growth Fund

Shares of specialty insurer Kinsale Capital Group, Inc. gave back some stakeholders. We believe that the pro forma company will be poised to
gains from earlier this year after the company reported slower premium generate meaningful revenue synergies from a broader partnership
growth in the third quarter. Earnings beat Street expectations ecosystem, a vast rewards program database, and dramatic scale in
with EPS doubling and ROE exceeding 34%. However, investors focused on marketing and reservations spending. This will be amplified by an estimated
the slowdown in gross written premiums to 33% growth from 58% growth $150 million of cost synergies targeted by management. Wyndham
in the prior quarter, which management attributed to normal seasonality for management has rebuffed Choice to date, and shares of Choice have sold
property insurance. Additionally, we believe some of the share price off on fears of greater financial leverage for Choice and a potential proxy
weakness resulted from a market rotation away from defensive stocks to battle. We expect the deal to ultimately be completed but believe that
more speculative stocks following a decline in yields. We continue to own Choice shares represent attractive value from current levels regardless of
the stock because we believe Kinsale is well managed and has a long runway whether a deal with Wyndham closes.
for growth in an attractive segment of the insurance market.
We also added to our investment in Neogen Corp., a pure-play food
Shares of specialty insurer Arch Capital Group Ltd. gave up some gains in security company. We have been investing in Neogen since 2009 and have
the fourth quarter after solid performance for most of the year. We believe been increasing our position as short-term merger integration challenges
the share price weakness was primarily due to a market rotation away from and end-market headwinds created an attractive entry point. Neogen
defensive stocks to more speculative stocks following a decline in yields. continues to integrate its 2022 acquisition of 3M Food Safety, which we
Company fundamentals remained strong with net premiums written view as a transformational deal that solidifies the company’s position as a
growing 23%, operating ROE expanding to 25%, and book value per share scaled food security leader. This integration process is not trivial and is
rising 30% in the third quarter. Management expects favorable market negatively impacting short-term financial results, along with some
conditions to persist. We continue to own the stock due to Arch’s temporary end-market headwinds, but we believe that the long-term
experienced management team and our expectation of solid growth in potential makes this effort worthwhile. Under prior ownership, the 3M Food
earnings and book value. Safety business was largely neglected, and we believe that Neogen
management can dramatically improve performance by increasing the
Iridium Communications Inc. is a mobile voice and data communications
attention and investment directed towards this business.
services vendor offering global coverage via satellite. In 2022, Iridium
announced an agreement with Qualcomm to incorporate Iridium’s Following the integration, we expect that Neogen will compound its revenue
technology into Qualcomm’s Snapdragon chip, allowing devices to at a mid-to-high single-digit rate organically. The food security market is
seamlessly connect to both cellular and satellite networks. In a surprise turn greater than $20 billion and is growing at a mid-single-digit annual rate,
of events, Qualcomm backed out of the partnership in November of this which is supported by several secular trends including rising incomes in
year. The decision shook investors’ confidence in Iridium’s direct-to-device emerging markets, more health-conscious consumers, increasing food
opportunity. We retain conviction. Iridium remains a unique satellite asset allergies, more incidents of food contamination, and an increasing
and operator, with L-band spectrum, years of operational experience, regulatory focus. Neogen boasts a strong underlying business model with
relatively new satellite hardware, and hundreds of partners across verticals high rates of customer retention and more than 95% of revenue coming
and geographies. In addition, management announced a commitment to from products that have recurring revenue. Margins are being depressed in
return $3 billion to shareholders between 2023 and 2030, representing a the short term, but we believe that margins should increase and have the
material portion of its current enterprise value. potential to exceed the 30% level over the next several years. Neogen has
historically been a strong generator of free cash flow and we expect that
Recent Activity this track record will resume as margins expand and one-time capital
expenditures related to the 3M Food Safety integration subside.
During the quarter, the Fund added to its holdings in Choice Hotels
International, Inc., a leading hotel franchisor managing 22 brands and Portfolio Structure And Investment Strategy
brand extensions that cover approximately 625,000 hotel rooms around the
world. Choice provides a combination of services and technology-based We seek to invest in businesses with attractive fundamental characteristics
offerings that help create compelling financial performance for franchisees, and long-term growth prospects. These attributes include high barriers to
who pay Choice initial and ongoing franchise and other platform fees to entry, durable competitive advantages, large and growing addressable
support these efforts. Choice generates consistent growth in its effective markets, and durable secular tailwinds. We invest in business models that
royalty rate through the combination of higher prices, greater penetration of have recurring or predictable revenue, generate attractive incremental
services, and a favorable mix of franchisors. Royalty rate growth is enhanced margins, are cash generative, and are not dependent on third-party
by modest growth in rooms under management and RevPAR growth over financing. We invest with management teams that seek to consistently
cycles, creating a consistently growing stream of high-quality cash flows. reinvest into their businesses to raise barriers to entry and pursue long-term
profitable growth. We work with our growing team of analysts to conduct
Choice has historically enhanced its growth through M&A. In 2022, Choice
iterative and holistic due diligence by interacting with representatives of all
acquired Radisson Hotels Americas in a deal valued at approximately $675
a company’s stakeholders. In addition to visiting regularly with a company’s
million. The company successfully integrated the Radisson assets in just 11
management team, we join our analysts in speaking with a company’s
months, driving meaningful synergies from transitioning Radisson properties
existing and potential customers, key suppliers, and large competitors. We
to Choice’s distribution channels and rewards program while also leveraging
use such findings to refine our understanding of a business and its industry,
economies of scale. The Radisson assets are on pace to generate $80 million
assess its growth trajectory, test the durability of its competitive
of EBITDA in 2024, up from a loss of $12 million before the acquisition.
advantages, and ultimately reinforce or refute our investment thesis. We do
Recently, Choice made an offer to acquire Wyndham Resorts, which will this in an iterative manner and ultimately spend as much time researching
create a global lodging platform that can generate significant value for all long-held positions as we do when researching new potential investments.
Baron Growth Fund

We hold investments for the long term. As of December 31, 2023, our held for a minimum of seven years. All were small-cap businesses at the
weighted average holding period was 16.1 years. This is dramatically longer time of purchase and have become top 10 positions through stock
than most other small-cap growth funds, which, according to Morningstar, appreciation. Our holdings in these stocks have returned 19.3% annually
turn over about 71% of their portfolios annually based on an average for the based on weighted average assets since our initial investment, exceeding the
last three years. The portfolio’s 10 largest positions have a weighted average Benchmark by an average of 11.2% annually. We attribute much of this
holding period of 17.9 years, ranging from a 7.1-year investment in Kinsale relative outperformance to the superior growth rates and quality exhibited
Capital Group, Inc. to investments in Choice Hotels International, Inc. by these businesses relative to the Benchmark average. We believe all our
and Vail Resorts, Inc. both of which the Fund has held for roughly 27 years. positions offer significant further appreciation potential individually, and
We have held 24 investments, representing 85.2% of the Fund’s net assets, that the Fund’s diversification offers potentially better-than-market returns
for more than 10 years. We have held 15 investments, representing 15.2% with less risk than the market as measured by beta. Note that diversification
of the Fund’s net assets, for fewer than 10 years. We believe that Table VII cannot guarantee a profit or protect against loss.
and Table VIII quantify the merits of our long-term holding philosophy.
While we only purchase small-cap companies, we tend to hold stocks as
long as our investment thesis remains intact, and we see a path to earning
Table VII.
attractive compounded returns. This causes the Fund to own a significant
Top performing stocks owned more than 10 years
percentage of assets in securities that have appreciated beyond their market
Cumulative Annualized capitalizations at the time of purchase. Baron Growth Fund’s median market
Return Return
Year of Since Date Since Date cap is $7.8 billion, and its weighted average market cap is $21.3 billion. This
First Purchase of First Purchase of First Purchase compares to Morningstar’s U.S. market cap breakpoints for small- and mid-
IDEXX Laboratories, Inc. 2005 3,756.5% 21.3% cap funds of $8.3 billion and $47.4 billion, respectively, as of December 31,
Choice Hotels 2023.
International, Inc. 1996 3,119.4 13.6
Arch Capital Group Ltd. 2002 2,497.9 16.2 Table IX.
MSCI Inc. 2007 2,406.3 22.1 Top 10 holdings as of December 31, 2023
CoStar Group, Inc. 2004 2,082.6 17.5 Market Quarter Quarter
Gartner, Inc. 2007 1,937.5 20.2 Cap End End
When Market Investment Percent
Mettler-Toledo Year Acquired Cap Value of Total
International Inc. 2008 1,581.4 20.6 Acquired (billions) (billions) (millions) Investments
MSCI Inc. 2007 $1.8 $44.7 $854.1 10.8%
The cohort of investments that we have held for more than 10 years earned
Gartner, Inc. 2007 2.3 35.2 681.2 8.6
a weighted average annualized rate of return of 16.8% since we first
Arch Capital Group Ltd. 2002 0.4 27.7 672.1 8.5
purchased them. This exceeded the performance of the Fund’s Benchmark
FactSet Research
by 8.2% annualized. Four of these investments have achieved annualized
Systems Inc. 2006 2.5 18.1 572.5 7.2
returns that exceeded the Benchmark by more than 10% per year.
CoStar Group, Inc. 2004 0.7 35.7 450.9 5.7
Vail Resorts, Inc. 1997 0.2 8.1 426.9 5.4
Table VIII. ANSYS, Inc. 2009 2.3 31.5 362.9 4.6
Top performing stocks owned less than 10 years Choice Hotels
Cumulative Annualized International, Inc. 1996 0.4 5.6 342.7 4.3
Return Return
Year of Since Date Since Date Kinsale Capital Group,
First Purchase of First Purchase of First Purchase Inc. 2016 0.6 7.8 334.9 4.2
Kinsale Capital Group, Inc. 2016 1,162.3% 43.1% Iridium Communications
Trex Company, Inc. 2014 831.1 25.7 Inc. 2014 0.6 5.1 316.9 4.0
Iridium Communications
Inc. 2014 474.3 19.9 Thank you for joining us as fellow shareholders in Baron Growth Fund. We
Altair Engineering Inc. 2017 359.6 28.1 are appreciative of the confidence you have shown in us, and we will
continue to work hard to justify that confidence.
The cohort of investments that we have held for fewer than 10 years has
returned 23.3% annually on a weighted average basis since our initial Respectfully,
purchase, exceeding the Benchmark by 14.9% annualized. Seven of these
investments have achieved annualized returns that exceeded the Benchmark
by more than 10% per year, including five that have achieved annualized
returns that exceeded the Benchmark by more than 15% per year.

Ronald Baron Neal Rosenberg

Portfolio Holdings CEO and Portfolio Manager Portfolio Manager
As of December 31, 2023, we owned 39 investments. The top 10 holdings
represented 63.5% of the Fund’s total investments, all of which have been
December 31, 2023 Baron Growth Fund

Investors should consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus and summary
prospectus contain this and other information about the Funds. You may obtain them from the Funds’ distributor, Baron Capital, Inc., by calling
1-800-99-BARON or visiting baronfunds.com. Please read them carefully before investing.
Risks: The Adviser believes that there is more potential for capital appreciation in smaller companies, but there also may be more risk. Specific risks associated
with investing in smaller companies include that the securities may be thinly traded, and they may be more difficult to sell during market downturns.
The Fund may not achieve its objectives. Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk.
The discussions of the companies herein are not intended as advice to any person regarding the advisability of investing in any particular security. The views
expressed in this report reflect those of the respective portfolio managers only through the end of the period stated in this report. The portfolio manager’s
views are not intended as recommendations or investment advice to any person reading this report and are subject to change at any time based on market
and other conditions and Baron has no obligation to update them.
This report does not constitute an offer to sell or a solicitation of any offer to buy securities of Baron Growth Fund by anyone in any jurisdiction where it
would be unlawful under the laws of that jurisdiction to make such offer or solicitation.
Alpha: measures the difference between a fund’s actual returns and its expected performance, given its level of risk as measured by beta. Beta: measures a
fund’s sensitivity to market movements. The beta of the market (Russell 2000 Growth Index) is 1.00 by definition. Enterprise value (EV) is a measure of a
company’s total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization
of a company but also short-term and long-term debt as well as any cash on the company’s balance sheet.
BAMCO, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Baron Capital, Inc. is a broker-dealer registered with
the SEC and member of the Financial Industry Regulatory Authority, Inc. (FINRA).