Soumya Eswaran
4 min read
In This Article:
Baron Funds, an investment management company, released its “Baron Health Care Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 2.54% (Institutional Shares) in the quarter compared to a 3.87% gain for the Russell 3000 Health Care Index (benchmark) and a 4.72% decline for the Russell 3000 Index (the Index). The fund trailed the benchmark due to stock selection and, to a lesser extent, active sub-industry weights. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Waters Corporation (NYSE:WAT). Headquartered in Milford, Massachusetts, Waters Corporation (NYSE:WAT) is a specialty measurement company that provides analytical workflow solutions that operate through the Waters and TA segments. The one-month return of Waters Corporation (NYSE:WAT) was 3.08%, and its shares lost 1.49% of their value over the last 52 weeks. On May 9, 2025, Waters Corporation (NYSE:WAT) stock closed at $344.06 per share with a market capitalization of $20.47 billion.
Baron Health Care Fund stated the following regarding Waters Corporation (NYSE:WAT) in its Q1 2025 investor letter:
"We initiated a position in Waters Corporation (NYSE:WAT), a leading provider of analytical instruments and consumables for high volume, regulated applications, including biopharmaceutical quality control, late-stage drug development, food and environmental safety, chemical analysis and materials testing. Waters has a particularly strong market position in biopharmaceutical quality control where its liquid chromatography instruments are used along with its proprietary column chemistry to efficiently separate contaminants from the drug mixture for analysis. This is coupled with their Empower software, which is a one-stop platform compatible for readout across multiple analyzer types, such as mass spectrometry, UV spectroscopy, and multi-angle light scattering. Empower takes all this information and pipes it to regulators with robust data integrity and audit trail. Currently, around 80% of novel drugs filed with regulators use this software, providing a competitive advantage. Moreover, the company’s products are specified in the regulatory approval process, making them very sticky.
