Baron Funds, an investment management company, released its “Baron Partners Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. Baron Partners Fund demonstrated a strong performance in the final quarter of 2024 and significantly exceeded the Index’s returns over the previous year and outperformed the Russell Midcap Growth Index in the quarter. The Fund rose 27.05% (institutional Shares) in the quarter significantly outperforming advances in the Index and the large cap dominated Russell 3000 Index (the Market Index), which gained 8.14% and 2.63%, respectively. The Fund gained 33.08% in 2024 while the Index and the Market Index returned 22.10% and 23.81%, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Baron Partners Fund emphasized stocks such as The Charles Schwab Corporation (NYSE:SCHW). The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company that offers wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The one-month return of The Charles Schwab Corporation (NYSE:SCHW) was -4.16%, and its shares gained 32.38% of their value over the last 52 weeks. On February 14, 2025, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $80.34 per share with a market capitalization of $145.647 billion.
Baron Partners Fund stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its Q4 2024 investor letter:
“Brokerage firm The Charles Schwab Corporation (NYSE:SCHW) contributed to performance after a strong quarterly earnings report. Most notably, client cash levels appeared to be stabilizing at Schwab and across the broader industry after a two-year drawdown caused by interest rate hikes and robust equity markets, both of which pulled idle cash off the sidelines and into investments, creating a headwind to Schwab’s net interest income. This cash stabilization should allow Schwab to continue paying down its short-term borrowings, which, in turn, should lead to an increase in net interest income and earnings. The company also participated in the broader rally of financial stocks following the Republican elections sweep, which is expected to lead to more buoyant capital markets and a more business-friendly regulator, both of which should support increased activity and earnings at Schwab. As Schwab continues to improve its balance sheet and earnings, we expect potentially strong earnings growth over a multi-year period.”
A corporate finance professional studying a financial performance chart.
The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the third quarter which was 72 in the previous quarter. The Charles Schwab Corporation (NYSE:SCHW) 2024 revenue increased by 4% year-over-year, and the fourth quarter revenue was up 20%. While we acknowledge the potential of The Charles Schwab Corporation (NYSE:SCHW) 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 The Charles Schwab Corporation (NYSE:SCHW) and shared the list of best dividend stocks from the financial sector. 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.