Baron Funds, an investment management company, released its “Baron Asset Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities ended the quarter higher primarily due to the market’s strength following Donald Trump’s election as president and the Republican majority in both houses of Congress. While Baron Asset Fund had a difficult fourth quarter, returning -(0.04)% (Institutional Shares) compared to the Russell Midcap Growth Index’s 8.14% return. The firm believes that the relative shortfall was caused by a number of circumstances that would only last temporarily. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Baron Asset Fund emphasized stocks such as Arch Capital Group Ltd. (NASDAQ:ACGL). Arch Capital Group Ltd. (NASDAQ:ACGL) offers insurance, reinsurance, and mortgage insurance products. The one-month return of Arch Capital Group Ltd. (NASDAQ:ACGL) was -6.18%, and its shares gained 3.16% of their value over the last 52 weeks. On February 13, 2025, Arch Capital Group Ltd. (NASDAQ:ACGL) stock closed at $90.16 per share with a market capitalization of $33.936 billion.
Baron Asset Fund stated the following regarding Arch Capital Group Ltd. (NASDAQ:ACGL) in its Q4 2024 investor letter:
“Shares of specialty insurer Arch Capital Group Ltd. (NASDAQ:ACGL) fell over concerns about a looming cyclical slowdown following several years of favorable market conditions. The Street has forecast a decline in property catastrophe reinsurance pricing during the January 2025 renewal period, defying investors’ previous hopes for stable pricing. Despite solid third quarter earnings, underwriting margins contracted due to a recent acquisition, business mix shifts, and normal quarterly volatility. Additionally, shares were pressured by an unexpected CEO transition. We continue to be optimistic about the stock’s prospects, given Arch’s strong management team, and a business model that we expect to deliver ongoing long term growth in earnings and book value per share.”
A close-up image of an insurance policy with hands standing firmly on top, conveying security.
Arch Capital Group Ltd. (NASDAQ:ACGL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Arch Capital Group Ltd. (NASDAQ:ACGL) at the end of the third quarter which was 37 in the previous quarter. While we acknowledge the potential of Arch Capital Group Ltd. (NASDAQ:ACGL) 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 cheapest AI stock.
In another article we discussed Arch Capital Group Ltd. (NASDAQ:ACGL) and shared the list of best property & casualty insurance stocks to buy. Arch Capital Group Ltd. (NASDAQ:ACGL) detracted from Madison Mid Cap Fund’s performance in Q4 2024. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.