Baron Funds, an investment management company, released its “Baron Real Estate Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund declined 9.20% (Institutional Shares) in the second quarter compared to a 0.22% decline for the MSCI US REIT Index (the REIT Index) and a 4.03% decline for the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index). Some of the Fund’s top performers from 2023 and the first quarter of 2024 experienced declines, partly due to concerns about slowing growth. This includes the shares of homebuilders, residential building product and services companies, casino and gaming operators, certain REITs, and other real estate-related companies. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Real Estate Fund highlighted stocks like Digital Realty Trust, Inc. (NYSE:DLR), in the second quarter 2024 investor letter. Digital Realty Trust, Inc. (NYSE:DLR) provides data center, colocation, and interconnection solutions. The one-month return of Digital Realty Trust, Inc. (NYSE:DLR) was -1.83%, and its shares gained 13.50% of their value over the last 52 weeks. On August 29, 2024, Digital Realty Trust, Inc. (NYSE:DLR) stock closed at $149.50 per share with a market capitalization of $49.914 billion.
Baron Real Estate Fund stated the following regarding Digital Realty Trust, Inc. (NYSE:DLR) in its Q2 2024 investor letter:
“In the most recent quarter, the shares of data center REIT Digital Realty Trust, Inc. (NYSE:DLR) continued to appreciate due to record quarterly new leasing results, strong pricing power on new and renewal leases, an improved capital structure, and an evolving AI demand growth opportunity for its data center facilities.
Digital Realty is a global provider of data center services to enterprises, cloud service providers, network providers, financial services, media, and other customers. Our team traveled to Digital Realty’s headquarters in Texas earlier this year to meet with CEO Andy Power. We remain optimistic about Digital Realty’s continued ability to perform well due to improving growth and pricing power, the company’s existing and newly developed data center capacity in supply constrained markets, its fully secured future pipeline of power and key infrastructure components, and management’s greater focus on delivering bottom-line growth while balancing investing for the future…” (Click here to read the full text)
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 31 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Digital Realty Trust, Inc. (NYSE:DLR) at the end of the second quarter which was 37 in the previous 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 list of best real estate and realty stocks to buy according to hedge funds. In its Q4 2023 investor letter, Baron Real Estate Fund expressed confidence in Digital Realty Trust, Inc.’s (NYSE:DLR) future growth. 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.
