CNBC's Squawk Box Broadcast at the 22nd Annual Baron Investment Conference

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For the period ended 9/30/13, Baron Growth Fund Retail Share Class was rated 4 stars overall,  5 stars for the 3-year period, 4 stars for the 5-year period, and 4 stars for the 10-year period. Baron Partners Fund Retail Share Class was rated 3 stars overall, 4 stars for the 3-year period, 2 stars for the 5-year period, and 4 stars for the 10-year period.
 
For the period ended 10/31/13, Baron Growth Fund Retail Share Class was rated 4 stars overall,  5 stars for the 3-year period, and 4 stars for the 5- and 10-year periods. Baron Partners Fund Retail Share Class was rated 4 stars overall, 5 stars for the 3-year period, 3 stars for the 5-year period, and 5 stars for the 10-year period.
 
For the period ended 9/30/2013, there were 634, 551, and 408 funds in the US OE Mid-Cap Growth category for the 3-, 5- and 10-year periods, respectively. For the period ended 10/31/2013, there were 634, 551 and 410 funds in the US OE Mid-Cap Growth category for the 3-, 5- and 10-year periods, respectively. The Baron Growth Fund and Partners Fund are in the US OE Mid-Cap Growth category. Morningstar moved the Baron Growth Fund from the Small Growth Category effective May 31, 2011 to the Mid-Cap Growth Category. We strongly disagree with Morningstar's reclassification of the Fund.  The Fund's investment mandate has been and continues to be investing in small cap growth stocks for the long run.

For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.)  The Overall Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and (if applicable) ten-year ratings. Past performance is no guarantee of future results.

As of September 30, 2013,  for Penn National Gaming, Inc., the net realized and unrealized gain (in millions) was $(1.0) for Baron Asset Fund, $0.2 for Baron Focused Growth Fund, $83.4 for Baron Growth Fund, $48.1 for Baron Partners Fund, $1.3 for Baron Real Estate Fund and $93.9 for Baron Small Cap Fund. No other Funds had a net gain or loss.

Ron’s statement that Baron invested $619 million in Costar, Colfax, LKQ, Penn National Gaming and Primerica with current value (as of September 30, 2013)  $1.6 billion includes all accounts managed by Baron. The breakdown for the Baron Funds is as follows.
 

Net Realized and Unrealized Gain ($ in millions) As of September 30, 2013
  Colfax Corp. CoStar Group, Inc. LKQ Corp. Penn National
Gaming, Inc.
Primerica, Inc.
Baron Growth Fund $77.2 $123.7 $220.1 $83.4 $43.3
Baron Small Cap Fund $(15.5) - - $93.9 -
Baron Focused Growth Fund $4.6 - - $0.2 -
Baron Asset Fund $22.9 - $(3.3) $(1.0) -
Baron Opportunity Fund $0.2 $12.2 - - -
Baron Partners Fund - $63.6 - $48.1 -
Baron Real Estate Fund - $0.2 - $1.3 -

The following Funds did not have any net realized/unrealized gain in the companies above - Baron Emerging Markets Fund, Baron Fifth Avenue Growth Fund, Baron Global Advantage Fund, Baron International Growth Fund and Baron Energy & Resources Fund.

 

Holdings Mentioned on CNBC Broadcast - As of September 30, 2013
  Baron Focused Growth Fund Baron Growth Fund Baron Opportunity Fund Baron Partners Fund Baron Real Estate Fund Baron Small Cap Fund
CoStar Group, Inc. Holdings Holdings Holdings Holdings    
Penn National Gaming Holdings Holdings   Holdings Holdings Holdings
The Carlyle Group Holdings Holdings   Holdings    

As of September 30, 2013, Baron Asset Fund, Baron Emerging Markets Fund, Baron Energy and Resources Fund, Baron Fifth Avenue Growth Fund, Baron Global Advantage Fund and Baron International Growth Fund did not hold any of the companies listed above. 
 
Baron Opportunity Fund participated in the initial public offering of Twitter, Inc. common stock, purchasing 157,941 shares.

Baron Real Estate Fund performance and expense ratio information can be found here.

Baron Capital Group invests in the Baron Funds each month.

The performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. The Adviser has reimbursed certain Fund expenses (by contract as long as BAMCO, Inc. is the adviser to the Fund) and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. Current performance may be lower or higher than the performance data quoted. For performance information current to the most recent month end, visit www.BaronFunds.com/performance or call 1-800-99BARON.
 
About Risk: The value of investments in equity securities is subject to unpredictable declines in the value of individual securities and periods of below-average performance in individual securities and the equity market as a whole. Growth stocks are generally more sensitive to market movements than other types of stocks primarily because their stock prices are based heavily on future expectations. If our assessment of the prospects for a company’s growth is wrong, or if our judgment of how other investors will value the company’s growth is wrong, then the price of the company’s stock may fall or not appreciate as we expect.

This interview is provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgment of Ron Baron and the Baron Portfolio Managers only. There can be no assurance that developments will transpire as forecasted and actual results may be different. Data and analysis does not represent the actual or expected future performance or any investment product.