Important Additional Information
Correction: Baron Small Cap had about 3.6 billion dollars under management and owned 75 stocks. In the second quarter of 2016, the Fund was up 2.12% year-to-date.
Baron Small Cap Fund’s annualized returns for the Retail Shares as of June 30, 2016: 1-year, (7.26)%; 5- years, 7.06%; 10-years, 6.63%. Annual expense ratio for the Retail Shares as of September 30, 2015 was 1.30%.
Baron Small Cap Fund’s annualized returns for the Institutional Shares as of June 30, 2016: 1-year, (7.01)%; 5- years, 7.34%; 10-years, 6.83%. Annual expense ratio for the Institutional Shares as of September 30, 2015 was 1.04%.
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 www.BaronFunds.com or call 1-800-99BARON.
You should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund and can be obtained from the Fund's distributor, Baron Capital, Inc., by calling 1-800-99BARON or visiting www.BaronFunds.com. Please read them carefully before investing.
The discussion of market trends and companies throughout this report are not intended as advice to any person regarding the advisability of investing in any particular security. Some of our comments are based on current management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. Our views are a reflection of our best judgment at the time of the publication of this report and are subject to change any time based on market and other conditions, and we have no obligation to update them.
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 top 10 holdings for the Baron Small Cap Fund as of June 30, 2016 are as follows:
| Holder |
% Holding |
| TransDigm Group, Inc. |
4.9 |
| Gartner, Inc. |
4.4 |
| Waste Connections, Inc. |
4.3 |
| Bright Horizons Family Solutions, Inc. |
3.8 |
| The Ultimate Software Group, Inc. |
3.8 |
| Acuity Brands, Inc. |
3.4 |
| IDEXX Laboratories, Inc. |
3.3 |
| Guidewire Software, Inc. |
2.7 |
| Guidewire Software, Inc. |
2.7 |
| Gaming and Leisure Properties, Inc. |
2.6 |