Baron Funds, an investment management company, released its “Baron Global Advantage Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. In the second quarter, the fund returned 22.7% (Institutional Shares), compared to the MSCI ACWI Index’s (the Index) 11.5% gain and the MSCI ACWI Growth Index’s 17.3% gain. The Fund is up 11.2%, year-to-date, compared to gains of 10.1% and 9.3% for the benchmarks, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, Baron Global Advantage Fund highlighted stocks such as MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) is an online commerce platform that operates Mercado Libre Marketplace and Mercado Pago FinTech platforms. The one-month return of MercadoLibre, Inc. (NASDAQ:MELI) was -3.26%, and its shares gained 32.34% of their value over the last 52 weeks. On August 4, 2025, MercadoLibre, Inc. (NASDAQ:MELI) stock closed at $2,395.83 per share, with a market capitalization of $121.462 billion.
Baron Global Advantage Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its second quarter 2025 investor letter:
“MercadoLibre, Inc. (NASDAQ:MELI) had a maximum drawdown of 21%, likely driven by a decision to reduce its minimum threshold for free shipping (as well as the general market weakness). We liked the initiative, which we think could drive up purchase frequency, since MELI customers on average buy 9 to 10 times per year, versus almost 50 times for Amazon. The rapid improvement in Argentina’s economy is beneficial to MELI, by far the largest e-commerce player in the country with around 65% market share (next player is less than 10%) and the country has a significant runway for e-commerce penetration which is still only in the mid-teens. In fintech, MELI has seen strong, broad-based growth with 43% year-on-year growth in total payments volume (TPV), 75% growth in the credit portfolio, and 111% growth in credit cards, while also increasingly becoming the main bank for customers as it attracts deposits. Our estimate of MELI’s intrinsic value has risen considerably over time.
