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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 Nu Holdings Ltd. (NYSE:NU). Headquartered in São Paulo, Brazil, Nu Holdings Ltd. (NYSE:NU) is a digital banking platform. The one-month return of Nu Holdings Ltd. (NYSE:NU) was -11.48%, and its shares gained 8.77% of their value over the last 52 weeks. On August 4, 2025, Nu Holdings Ltd. (NYSE:NU) stock closed at $12.03 per share, with a market capitalization of $58.038 billion.
Baron Global Advantage Fund stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its second quarter 2025 investor letter:
“During the quarter, we initiated a position in Nu Holdings Ltd. (NYSE:NU), a leading Latin American digital bank operating in Brazil, Mexico, and Colombia. Founded in 2014 to provide Brazilian consumers with better access to financial products, Nu is disrupting a banking system long dominated by an oligopoly of incumbents notorious for high fees, poor service, and limited credit availability. By leveraging a user-friendly, tech-first platform and a relentless focus on customer experience, Nu has already attracted over 100 million users with minimal marketing spend. We believe Nu’s success is underpinned by four core advantages: a digital platform that enhances engagement and lowers costs, disciplined credit underwriting, a retail deposit-driven funding base, and a strong, trusted brand. The company continues to scale rapidly, gaining traction in new markets like Mexico and Colombia, and expanding its product suite. In Brazil, Nu already holds a 13% share of the credit card market, and we see similar potential in adjacent markets and products.
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