Baron Funds, an asset management firm, published its “Baron Asset Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Against this backdrop, Baron Asset Fund (the “Fund”) gained 5.04% (Institutional Shares), while the Russell Midcap Growth Index (the “Index”) gained 2.85%, and the S&P 500 Index gained 11.03%. The Fund’s outperformance was attributable to favorable stock selection and tailwinds from certain style biases, notably its underexposure to the poor performing residual volatility and beta factors. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Baron Asset Fund, in its Q4 2021 investor letter, mentioned Rivian Automotive, Inc. (NASDAQ: RIVN) and discussed its stance on the firm. Rivian Automotive, Inc. is an Irvine, California-based electric vehicle automaker and automotive technology company with a $57.4 billion market capitalization. RIVN delivered a -36.45% return since the beginning of the year and it closed at $65.02 per share on January 20, 2022.
Here is what Baron Asset Fund has to say about Rivian Automotive, Inc. in its Q4 2021 investor letter:
“During November 2021, following years of engagement and investment in Rivian Automotive, Inc. as a private company, an enlightening factory visit, and a deep product and strategy review, we participated in Rivian’s IPO, one of the largest in recent history. Rivian is the best-funded new entrant (with $20 billion in cash) in the rapidly growing market for electric vehicles. We expect that over the next decades, the automotive industry will shift from a combustion powertrain, human-driven, and unconnected fleet to an electrified, software-enabled, and connected industry. With modern vehicle architecture, a software first approach, and strong talent position, we believe that differentiated, well-managed, and newer automotive companies can capture a large portion of the value generated through this structural change.
Rivian’s partnership with Amazon (which owns close to 20% of Rivian) ensures a large market for the company’s delivery vans, as Amazon has made the largest EV order in history, committed to purchase at least 100,000, and perhaps more over time. We believe this provides Rivian various advantages, such as a shared electronics platform and large-scale data aggregation, as it enters the consumer automobile market. Rivian is initially focused on producing SUVs and pickup trucks, which are the fastest growing and most profitable segments of the consumer market. Additionally, with management’s focus on software enablement from the onset of the company, Rivian offers a broad set of value-added services to customers, allowing the company to generate more revenue while offering a better customer experience. With suppliers’ and regulators’ support, its highcapacity factory, significant cash reserves, strong partnerships, and talent, we believe that Rivian can reach its target of multi-million vehicles across different geographies and industries over time.”
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Our calculations show that Rivian Automotive, Inc. (NASDAQ: RIVN) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Rivian Automotive, Inc. (NASDAQ: RIVN) delivered a -34.80% return in the past month.
In December 2021, we also shared another hedge fund’s views on RIVN in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
