Baron Funds, an investment management company, released its “Baron FinTech Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. For the fifth consecutive quarter, U.S. stocks increased, with most of the gains coming in November after the U.S. elections, which saw Republicans secure majorities in both chambers of Congress and President Donald Trump re-elected. In the fourth quarter, the fund rose 5.29% (Institutional Shares) compared to a 4.24% return for the FactSet Global FinTech Index (Benchmark) and a 2.41% gain for the S&P 500 index. Since inception, the fund has appreciated at an annualized rate of 12.17%, compared to 3.93% for the Benchmark. 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 FinTech Fund emphasized stocks such as LPL Financial Holdings Inc. (NASDAQ:LPLA). Based in San Diego, California, LPL Financial Holdings Inc. (NASDAQ:LPLA) is an integrated platform provider of brokerage and investment advisory services. The one-month return of LPL Financial Holdings Inc. (NASDAQ:LPLA) was 6.84%, and its shares gained 45.95% of their value over the last 52 weeks. On February 19, 2025, LPL Financial Holdings Inc. (NASDAQ:LPLA) stock closed at $383.33 per share with a market capitalization of $28.62 billion.
Baron FinTech Fund stated the following regarding LPL Financial Holdings Inc. (NASDAQ:LPLA) in its Q4 2024 investor letter:
“LPL Financial Holdings Inc. (NASDAQ:LPLA) is an independent broker-dealer that provides a turnkey platform for financial advisors. Shares rebounded from last summer’s pullback on concerns that regulators would take actions to erode the profitability of client cash. These concerns abated following the November elections with investors now expecting a more favorable regulatory climate and better growth prospects. LPL’s operational performance has been strong, with high single-digit organic growth in net new assets, compelling growth opportunities from outsourcing deals with banks and insurance companies, and stabilizing cash levels that should support better earnings growth. We remain bullish on the stock given its leading asset growth and strong long-term prospects.
We added to our position in LPL Financial Holdings Inc. after determining that concerns around potential regulatory actions affecting the company’s ability to monetize client cash were overdone and had created an attractive buying opportunity. Our purchase proved timely as shares rallied sharply after the U.S. elections, with the incoming Republican administration expected to be more business-friendly and less likely to make adverse regulatory changes. Fundamentals have been strong with LPL gaining market share, benefiting from higher-for-longer interest rates, and seeing a slowdown in customers sorting cash into higher yielding but less profitable money market funds, all while trading at an undemanding valuation multiple.”
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LPL Financial Holdings Inc. (NASDAQ:LPLA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held LPL Financial Holdings Inc. (NASDAQ:LPLA) at the end of the fourth quarter which was 51 in the previous quarter. While we acknowledge the potential of LPL Financial Holdings Inc. (NASDAQ:LPLA) 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 LPL Financial Holdings Inc. (NASDAQ:LPLA) and shared the list of best low risk high growth stocks to invest in. 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.