Why the BFGFX Fund Is Underperforming After SpaceX IPO
Baron Focused Growth Fund Retail Shares BFGFX has been performing poorly of late. The fund’s Net Asset Value (NAV) as of August 2026 is $62.97. The return for BFGFX was down 8.7% last month and down 1.9% year to date. For the last 3 months and 6 months, the return for BFGFX was up 1.4% and 1.7%, respectively. Lastly, the 1-year return for BFGFX is up 13.1%.
The exposure to Space Exploration Technologies Corp. SPCX in the fund held up well in the second quarter. SPCX contributed 9.97% to BFGFX’s quarterly returns as SpaceX went public. Thus, the fund's recent weakness has been caused primarily by factors beyond SpaceX.
The poor returns from BFGFX could be due to its concentrated portfolio, which makes it highly sensitive and volatile. BFGFX had a 0.75 beta versus the S&P 500, meaning it has historically been less volatile than the broader U.S. market. BFGFX holds a concentrated position in SpaceX, with the three holdings in this company making up 21.21% of total assets in the fund, while Tesla, Inc. TSLA and MSCI Inc. MSCI represented 6% and 5.5%, respectively. Therefore, the fund’s performance will be extremely sensitive to large movements in its largest holdings.
BFGFX carries a Zacks Mutual Fund Rank #3 (Hold), pointing to a cautious near-term outlook. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more:Mutual Funds:Advantages, Disadvantages, and How They Make Investors Money).
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This article originally published on Zacks Investment Research (zacks.com).
