Soumya Eswaran
3 min read
In This Article:
Baron Funds, an investment management company, released its “Baron FinTech Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities closed 5% lower in Q1, following a sharp decline in March. Markets started well with the S&P 500 Index reaching new highs. However, concerns about tariffs, inflation, and softer economic growth, along with concerns about AI secular growth, contributed to risk-off conditions. In the first quarter, the fund fell 1.31% (Institutional Shares) compared to a -7.52% return for the FactSet Global FinTech Index (Benchmark) and a -4.27% decline for the S&P 500 index. Since its inception, the fund has appreciated at an annualized rate of 11.27%, compared to a 2.22% return for the Benchmark. 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 FinTech Fund highlighted stocks such as Morningstar, Inc. (NASDAQ:MORN). Headquartered in Chicago, Illinois, Morningstar, Inc. (NASDAQ:MORN) provides investment research services. On May 23, 2025, Morningstar, Inc. (NASDAQ:MORN) stock closed at $304.12 per share. One-month return of Morningstar, Inc. (NASDAQ:MORN) was 8.37%, and its shares gained 2.19% of their value over the last 52 weeks. Morningstar, Inc. (NASDAQ:MORN) has a market capitalization of $12.85 billion.
Baron FinTech Fund stated the following regarding Morningstar, Inc. (NASDAQ:MORN) in its Q1 2025 investor letter:
"Somewhat offsetting the above was weakness in Information Services and Digital IT Services where investment research company Morningstar, Inc. (NASDAQ:MORN) and outsourced software developer Globant S.A. were the largest detractors. Morningstar’s shares declined in response to disappointing quarterly results in which margins contracted following several quarters of improvement. We believe this margin pressure was a temporary hiccup attributable to unusual costs that should soon abate."
An investor looking over a complex portfolio of stocks and bonds while consulting a financial advisor.
Morningstar, Inc. (NASDAQ:MORN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Morningstar, Inc. (NASDAQ:MORN) at the end of the first quarter which was 33 in the previous quarter. While we acknowledge the potential of Morningstar, Inc. (NASDAQ:MORN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
