Baron Global Advantage Fund (BGAIX)

Portfolio Management

AlexUmansky
Alex Umansky

Fund Manager since 2012

View All Commentary by Alex

Fund Description

Baron Global Advantage Fund invests in growth companies of all sizes anywhere.

  

Portfolio Commentary

Institutional Performance

Review and Outlook (for quarter ended 12/31/2015)

The Review and Outlook for period ending December 31, 2015 is not yet available

Top Contributors/Detractors to Performance

Contributors (for quarter ended 12/31/2015)
  • Shares of Amazon.com, Inc. rose on strong Q4 results. Enhanced financial disclosures demonstrated that Amazon Web Services (AWS) was more profitable than investors anticipated. Rapid growth in the retail and AWS businesses boosted confidence in the company’s growth plans. With e-commerce comprising just 10% of global retail sales, we believe the shift to online retailing represents a multi-year growth opportunity. We also believe that, over time, the nascent AWS cloud computing opportunity will account for the majority of Amazon’s value.

  • TAL Education Group was a leading contributor to performance for Q4. The education services provider reported favorable earnings during Q4, as enrollment growth reached 50% and revenue and operating earnings exceeded Street expectations. We continue to believe the investments TAL Education is currently making suggest sustainable long-term growth with attractive margins.

  • Google Inc.’s new corporate name is now Alphabet Inc. With the change, the company instituted a new holdco structure that gives management more direct oversight over its newer businesses such as Google Fiber and Calico. Alphabet's shares rose on the strength of Q4 results that exceeded Street expectations. We believe that even while desktop search becomes more mature business for the company, the company is well positioned to benefit from substantial growth in mobile and online video advertising.

Detractors (for quarter ended 12/31/2015)
  • Shares of cybersecurity company FireEye, Inc. fell on reports of a disappointing Q3 and reduced Q4 financial expectations. Several executive departures also led to selling pressure. FireEye is shifting its focus from incident driven sales to a more holistic risk mitigation approach that we believe will help stabilize results. We believe the trend of increasing cyberattack activity, despite ebbs and flows, is here to stay and that FireEye will be a beneficiary. We think FireEye also enjoys a lead over competition through its incident response service.

  • Shares of SunEdison, Inc., the world’s largest renewable energy developer, fell in Q4 as investors continued to question its business model and liquidity position. In addition, management credibility was increasingly impaired as the steps taken proved inadequate to provide confidence to investors. Due to concerns regarding management execution as well as the liquidity position, we sold our position in SunEdison.

  • Tallgrass Energy GP, LP is the general partner of a mid-stream energy master limited partnership formed in 2013. Shares of Tallgrass fell in Q4 as the broad MLP/GP market experienced selling pressure due to lower growth forecasts and tax-loss-selling as a result of slumping oil and gas prices. Tallgrass belongs to a group of high growth, high multiple stocks which saw even more selling pressure. We believe in Tallgrass’ ability to grow fast for a prolonged period and are looking forward to the execution of its growth plans.

Quarterly Attribution Analysis (for quarter ended 12/31/2015)

The Quarterly Attribution Analysis for period ending December 31, 2015 is not yet available

Yearly Attribution Analysis (for year ended 12/31/2015)

The Yearly Attribution Analysis for period ending December 31, 2015 is not yet available

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