Baron Capital, an investment management company, released its Q2 2026 investor letter for the “Baron Small Cap Fund.” Baron Small Cap Fund gained 12.57% (Institutional Shares) in the second quarter, trailing the Russell 2000 Growth Index’s 25.71% return. A copy of the letter can be downloaded here. U.S. equities rebounded sharply after March’s selloff related to the U.S.-Iran conflict, with AI infrastructure, semiconductors, and other technology stocks driving much of the market’s gains. Small caps also outperformed large caps, although performance remained concentrated in high-Beta and Momentum stocks, areas where the Fund has historically had less exposure. The Fund benefited from several AI-related and industrial holdings, but software and services stocks remained pressured by concerns that AI could disrupt their businesses. Looking ahead, management believes broader market participation, attractive small-cap valuations, improving industrial growth, and stronger earnings could support future returns despite continued uncertainty around oil prices, inflation, and interest rates. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Baron Small Cap Fund highlighted Planet Fitness, Inc. (NYSE:PLNT). Planet Fitness, Inc. (NYSE:PLNT) operates fitness centers under the Planet Fitness brand. On August 17, 2026, Planet Fitness, Inc. (NYSE:PLNT) closed at $50.63 per share. The one-month return of Planet Fitness, Inc. (NYSE:PLNT) was -7.10% and its shares lost -52.88% over the past 52 weeks. Planet Fitness, Inc. (NYSE:PLNT) has a market capitalization of $3.82 billion.
Baron Small Cap Fund stated the following regarding Planet Fitness, Inc. (NYSE:PLNT) in its Q2 2026 investor letter:
“Planet Fitness, Inc. (NYSE:PLNT), the leading high-value, low-cost gym operator, detracted from performance in the second quarter after the company lowered full-year guidance following weakerthan-expected member additions in the first quarter. Member growth was pressured by a combination of unfavorable weather, macroeconomic headwinds, increased competition in certain markets, and marketing changes that did not resonate with certain customer segments. As a result, management reduced its outlook for the year to reflect the lower membership base and paused previously announced price increases. Despite the disappointing results, Planet Fitness remains the category leader, with scale advantages needed to capitalize on favorable long-term health and wellness trends.”
