Core Insights - The Baron Small Cap Fund experienced a decline of 1.56% in Q4 2025, underperforming the Russell 2000 Growth Index, which gained 1.22% during the same period. For the entire year, the fund returned -0.66%, trailing the index by 13.67 percentage points, indicating weak performance both absolutely and relatively [1]. Group 1: Fund Performance - The Baron Small Cap Fund's performance in Q4 2025 was negative, with a decline of 1.56% compared to a gain of 1.22% for the Russell 2000 Growth Index [1]. - The fund's annual return for 2025 was -0.66%, significantly underperforming the index by 13.67 percentage points [1]. - Large-cap growth stocks continued to lead the market for the third consecutive year, suggesting a concentrated leadership trend [1]. Group 2: Oddity Tech Ltd. Analysis - Oddity Tech Ltd. (NASDAQ:ODD) was highlighted as a leading detractor for the Baron Small Cap Fund, with a one-month return of -14.31% and a 12-month decline of 28.64%, resulting in a market capitalization of approximately $1.73 billion [2]. - The company aims to transform the beauty and wellness market through proprietary technology for online sales, but faced stock declines due to investor concerns about category weakness and potential deceleration in its largest brand, Il Makiage [3]. - Oddity Tech Ltd. is launching a new platform, MethodIQ, which requires significant upfront marketing investment, adding uncertainty to its financial outlook [3]. Group 3: Hedge Fund Interest - Oddity Tech Ltd. was held by 31 hedge fund portfolios at the end of Q3 2025, a decrease from 36 in the previous quarter, indicating a decline in popularity among hedge funds [4]. - Despite its potential, the company is viewed as less favorable compared to certain AI stocks that are believed to offer greater upside potential and lower downside risk [4].