Baron Funds, an investment management company, released its “Baron Real Estate Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund increased 12.46% (Institutional Shares) in the full year compared to a 7.49% return for the MSCI US REIT Index (the REIT Index) and a 12.70% return for the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index). The fund decreased 2.98% in the fourth quarter, outperforming 6.39% and 4.69% declines for the indexes for the same period. 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 Real Estate Fund emphasized stocks such as Digital Realty Trust, Inc. (NYSE:DLR). Digital Realty Trust, Inc. (NYSE:DLR) is a real estate investment trust, that provides data center, colocation and interconnection solutions. The one-month return of Digital Realty Trust, Inc. (NYSE:DLR) was -2.95%, and its shares gained 8.56% of their value over the last 52 weeks. On February 26, 2025, Digital Realty Trust, Inc. (NYSE:DLR) stock closed at $159.38 per share with a market capitalization of $54.632 billion.
Baron Real Estate Fund stated the following regarding Digital Realty Trust, Inc. (NYSE:DLR) in its Q4 2024 investor letter:
“Data center landlords such as Equinix and Digital Realty Trust, Inc. (NYSE:DLR) are benefiting from record low vacancy, demand outpacing supply, more constrained power availability, and rising rental rates. Several secular demand vectors, which are currently broadening, are contributing to robust fundamentals for data center space globally. They include the outsourcing of information technology infrastructure, increased cloud computing adoption, the ongoing growth in mobile data and internet traffic, and AI as a new wave of data center demand. Put simply, each year data continues to grow exponentially, and all of this data needs to be processed, transmitted, and stored – supporting increased demand for data center space. In addition, while it is still early innings, we believe AI could not only provide a source of incremental demand but also further accelerate existing secular trends by driving increased prioritization and additional investment in digital transformation among enterprises.”
A close-up view of a technician installing a server in the data center facility, representing the reliable services provided by the company.
Digital Realty Trust, Inc. (NYSE:DLR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Digital Realty Trust, Inc. (NYSE:DLR) at the end of the fourth quarter compared to 52 in the third quarter. While we acknowledge the potential of Digital Realty Trust, Inc. (NYSE:DLR) 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 Digital Realty Trust, Inc. (NYSE:DLR) and shared the top stocks from Jim Cramer’s latest calls. In addition, please check out our hedge fund investor letters Q4 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.