Baron Funds, an investment management company, released its “Baron FinTech Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund declined 2.25% (Institutional Shares) compared to a (5.78)% return for the FactSet Global FinTech Index (Benchmark) and a 4.28% gain for the S&P 500 index. US equities rose with major market indices reaching all-time highs during the second quarter. Overwhelming corporate results were accompanied by mixed economic data that points to further moderation of inflation. However, the rally was concentrated and driven by mega-cap technology companies. The fund’s smaller market cap profile and lack of exposure to the Magnificent Seven led the fund to underperform the broader market. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron FinTech Fund highlighted stocks like BlackRock, Inc. (NYSE:BLK), in the second quarter 2024 investor letter. BlackRock, Inc. (NYSE:BLK) is a publicly owned investment management company. The one-month return of BlackRock, Inc. (NYSE:BLK) was -0.67%, and its shares gained 24.59% of their value over the last 52 weeks. On August 12, 2024, BlackRock, Inc. (NYSE:BLK) stock closed at $838.27 per share with a market capitalization of $126.829 billion.
Baron FinTech Fund stated the following regarding BlackRock, Inc. (NYSE:BLK) in its Q2 2024 investor letter:
“Despite share price performance in the fintech sector lagging broad market indices, fintech sector fundamentals remain strong with mid-teens earnings growth across the Fund. We continue to invest behind secular themes where the intersection of financial services and technology should drive innovation and growth for years to come.
One of these themes is the growth of private markets, which are the fastest growing segment of asset management with alternative assets expected to reach nearly $40 trillion by 2030. BlackRock, Inc. (NYSE:BLK) is acquiring Global Infrastructure Partners, a leading independent infrastructure fund manager with over $100 billion in AUM, to capitalize on the growing need to modernize digital infrastructure, upgrade supply chains and logistics infrastructure, and invest in renewable energy. BlackRock also announced the acquisition of Preqin, a leading private markets data vendor, to provide standardized information, benchmarks, and analytics in an $8 billion data market expected to grow 12% annually through the end of the which allows the proceeds to be invested in highly rated private credit with higher yields but less liquidity than publicly traded fixed income securities with the same credit risk. This illiquidity premium is highly valuable in an industry with narrow spreads, providing a competitive edge to well-managed annuity providers that invest in private credit. In addition, higher interest rates combined with a growing population of retirees are spurring greater demand for guaranteed income products. Fixed annuity sales grew 37% in 2023 and have more than doubled since 2021, providing a greater supply of capital that can be invested in highly rated private credit.”
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BlackRock, Inc. (NYSE:BLK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held BlackRock, Inc. (NYSE:BLK) at the end of the first quarter which was 48 in the previous quarter. BlackRock, Inc. (NYSE:BLK) delivered double-digit operating income growth and margin expansion in the first half of 2024 (see the details here). While we acknowledge the potential of BlackRock, Inc. (NYSE:BLK) 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 BlackRock, Inc. (NYSE:BLK) and shared the list of companies that are facing activist pressure. In addition, please check out our hedge fund investor letters Q2 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.