Core Insights - The Baron Asset Fund underperformed for the second consecutive quarter, declining 4.23% in Q3 2025, while the Index gained 2.78% [3] - The underperformance was primarily due to the Fund's underexposure to Momentum, Beta, and Residual Volatility factors, which led the market higher [3] - The Fund's overexposure to Earnings Quality negatively impacted performance as lower quality stocks rallied during the quarter [3] Sector Performance - Stock selection in IT and Communication Services accounted for about three-quarters of the underperformance, with significant declines from Gartner, Inc. and StubHub Holdings, Inc. [4] - Weakness in Consumer Discretionary was broad-based, with notable declines from Choice Hotels International, Inc. and On Holding AG [5] - Financials were hindered by FactSet Research Systems Inc. and Morningstar, Inc., affected by industry-wide concerns regarding AI and a shift in investor focus [7] - Health Care showed solid stock selection, driven by strong performance from IDEXX Laboratories, Inc. [8] Key Contributors - IDEXX Laboratories, Inc. contributed 1.13% to returns, benefiting from improved foot traffic and revenue growth in its Companion Animal segment [9] - Amphenol Corporation gained 1.01% as expectations for data center spending rose, bolstered by a significant acquisition [10] - SpaceX reported substantial growth in its Starlink service and continued advancements in rocket technology [11][12] Key Detractors - Gartner, Inc. detracted 2.31% from performance due to disappointing earnings and decelerating contract value growth [13] - StubHub Holdings, Inc. faced challenges post-IPO, with investments impacting near-term results [16] - Verisk Analytics, Inc. was affected by a conservative outlook and concerns about the property and casualty insurance market [17]