Baron Fund, an investment management firm, published its Q4 2025 letter for “Baron Small Cap Fund”. A copy of the letter can be downloaded here. The market extended its positive trends during the fourth quarter. The Baron Small Cap fund has fallen 1.56% for the quarter compared to the Russell 2000 Growth Index’s 1.22% gain. The fund returned (0.66)% in 2025, trailing the index by 13.67 percentage points. Annual performance was weak in both absolute and relative terms. Large-cap growth stocks led the market for the third year in a row, with concentrated leadership. Looking ahead to 2026, the firm expects better growth for small caps given the strong setup. Review the top five holdings in the strategy to learn about their key picks for 2025.

In its Q4 2025 letter to investors, Baron Small Cap Fund highlighted Neptune Insurance Holdings Inc. (NYSE:NP). The fund added Neptune Insurance Holdings Inc. (NYSE:NP), a leading provider of flood insurance, during the quarter. On February 6, 2026, the shares of Neptune Insurance Holdings Inc. (NYSE:NP) closed at $23.56 per share. The one-month profitability of Neptune Insurance Holdings Inc. (NYSE:NP) was -9.42% and its shares are down 19.20% over the past twelve months. Neptune Insurance Holdings Inc. (NYSE:NP) has a market cap of $3.252 billion.

Baron Small Cap Fund stated the following regarding Neptune Insurance Holdings Inc. (NYSE:NP) in its Q4 2025 investor letter:

“In the fourth quarter, we added a new holding and increased positions in many of our existing holdings at what we believe are attractive prices. We sold out on three names. Market factoring and a short-term mindset had led to some wild swings in relatively mundane earnings announcements and the Trump Administration’s news flow. To leverage both sides of the buy/sell book During the year, we invested in 12 new ideas (2 sold during per year), half of which were new to public markets.