Baron Capital, an investment management company, released its Q1 2026 investor letter for the “Baron Health Care Fund”. A copy of the letter is available to download here. Baron Health Care Fund (the Fund) declined 6.97% (Institutional Shares) in the quarter, compared to the 4.88% decline for the Russell 3000 Health Care Index (the Benchmark) and the 3.96% decline for the Russell 3000 Index (the Index). The Fund appreciated 9.39% on an annualized basis since its inception, compared to the 8.97% gain for the Benchmark and the 13.26% gain for the Index. The disappointing stock selection drove the Fund’s underperformance in the quarter. Despite recent challenges, the Fund believes the long-term outlook for health care remains positive due to factors including an aging population, rising chronic disease rates, advances in biotechnology, and increased health care spending. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Baron Health Care Fund highlighted stocks like Welltower Inc. (NYSE:WELL). Welltower Inc. (NYSE:WELL) is a healthcare REIT that focuses on rental housing for aging seniors. On May 1, 2026, Welltower Inc. (NYSE:WELL) closed at $216.91 per share. One-month return of Welltower Inc. (NYSE:WELL) was 7.96%, and its shares gained 43.72% over the past 52 weeks. Welltower Inc. (NYSE:WELL) has a market capitalization of $153.12 billion.
Baron Health Care Fund stated the following regarding Welltower Inc. (NYSE:WELL) in its Q1 2026 investor letter:
“The Fund’s unique position in Welltower Inc. (NYSE:WELL), which is classified as a health care REIT by GICS, was a source of strength in the other health care related sub-industry. Welltower operates senior housing, life science, and medical office real estate properties. Shares rose on robust cash flow growth in the company’s senior housing portfolio, driven by continued strong occupancy and rent trends supporting bottom-line growth, along with a strong initial full-year 2026 outlook and continued execution on accretive external growth opportunities. The company also announced additional initiatives to drive asset-light earnings growth. We are optimistic about the prospects for both cyclical and secular growth in senior housing demand against a backdrop of muted supply, which we believe will support several years of favorable growth. Welltower is a “best-in-class” operator with a luxury portfolio, well positioned to capture outsized organic and inorganic growth opportunities. We retain conviction in the company given its high-quality real estate portfolio, conservative balance sheet, prudent capital allocation, and compelling multi-year earnings growth story.”
