March 31, 2019 Baron Fifth Avenue Growth Fund DEAR BARON FIFTH AVENUE GROWTH FUND SHAREHOLDER: PERFORMANCE 2019 is off to a good start and we were able to reverse most of last quarter’s losses. Baron Fifth Avenue Growth Fund (the “Fund”) gained 18.7% (Institutional Shares) in the March quarter, outperforming the Russell 1000 Growth Index, which returned 16.1%, and the S&P 500 Index, which rose 13.7%. Table I. Performance Annualized for periods ended March 31, 2019 Baron Baron Fifth Avenue Fifth Avenue Growth Growth Russell Fund Fund 1000 Retail Institutional Growth S&P 500 Shares1,2 Shares1,2,3 Index1 Index1 Three Months4 18.64% 18.69% 16.10% 13.65% One Year 11.74% 12.04% 12.75% 9.50% ALEX UMANSKY Retail Shares: BFTHX Three Years 20.25% 20.57% 16.53% 13.51% Institutional Shares: BFTIX Five Years 13.63% 13.91% 13.50% 10.91% PORTFOLIO MANAGER R6 Shares: BFTUX Ten Years 17.04% 17.33% 17.52% 15.92% Since Inception (April 30, 2004) 9.19% 9.38% 9.85% 8.73% The Fund’s strong performance was largely attributable to stock selection, After steep losses to end last year, global equity markets rallied sharply, and which contributed over 400 basis points to outperformance relative to the U.S. large-cap equities participated fully, registering the best start to the Russell 1000 Growth Index, while allocation effect detracted approximately year since 1998. Investors appear to have shrugged off concerns over 140 basis points mostly due to cash, which diluted returns in a rising declining earnings growth, weakening economic data, and the continued market. We saw broad-based strength across the portfolio, with lack of a resolution in U.S.-China trade negotiations, choosing instead to Amazon.com, Alibaba, Veeva Systems, Worldpay, Mastercard, Sage focus on more attractive valuations. Fed Chairman Powell must have read Therapeutics,andEPAM Systems contributing over 100 basis points each our last quarterly letter and abruptly reversed course, returning the U.S. to absolute returns. Another 10 investments contributed over 50 basis monetary policy back to its “data dependent” path and, in the process, points each, and 23 of our holdings posted double-digit percentage gains signaling more accommodative interest rates for the foreseeable future. OK, during the quarter. We had seven decliners with CME Group, Tesla, and maybe he did not read our letter, but we are still convinced it was that Biogen, the bottom three, costing us approximately 90 basis points change, more than anything else, that caused the first quarter equity rally. combined. Performance listed in the table above is net of annual operating expenses. Annual expense ratio for the Retail and Institutional Shares as of September 30, 2018 was 1.09% and 0.82%, but the net annual expense ratio was 1.00% and 0.75% (net of the Adviser’s fee waivers, restated to reflect current fee waivers). The performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. The Adviser reimburses certain Baron Fund expenses pursuant to a contract expiring on August 29, 2030, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. Current performance may be lower or higher than the performance data quoted. For performance information current to the most recent month end, visit www.BaronFunds.com or call 1-800-99BARON. 1 The indexes are unmanaged. The Russell 1000® Growth Index measures the performance of large-sized U.S. companies that are classified as growth and the S&P 500 Index of 500 widely held large cap U.S. companies. The indexes and the Fund are with dividends, which positively impact the performance results. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell is a trademark of Russell Investment Group. 2 The performance data in the table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. 3 Performance for the Institutional Shares prior to May 29, 2009 is based on the performance of the Retail Shares, which have a distribution fee. The Institutional Shares do not BARON have a distribution fee. If the annual returns for the Institutional Shares prior to May 29, 2009 did not reflect this fee, the returns would be higher. FUNDS 4 Not annualized. Baron Fifth Avenue Growth Fund Here is a more detailed look at some of our best and worst investment decisions and outcomes over the last three months, as well as over the last three years: Table II. Best and worst investment decisions and outcomes - quarter ended March 31, 2019 Top Contributors Bottom Contributors Total Return** Alpha Added Total Return** Alpha Added Company Name (%) (bps)† Company Name (%) (bps)† Veeva Systems Inc. 42.03 86.40 CME Group, Inc. –12.14 –107.04 Alibaba Group Holding Limited 33.11 84.80 Illumina, Inc. 3.59 –47.77 Worldpay, Inc. 48.50 83.97 Apple, Inc. –1.11 –36.49 Sage Therapeutics, Inc. 66.24 78.04 Red Hat, Inc. 4.02 –28.43 EPAM Systems, Inc. 45.79 62.45 Tesla, Inc. –15.91 –26.78 PagSeguro Digital Ltd. 61.88 58.74 Booking Holdings, Inc. 1.46 –24.54 Ctrip.com International, Ltd. 61.46 54.42 The Charles Schwab Corp. 3.31 –23.88 Equinix, Inc. 29.28 29.73 Biogen, Inc. –24.24 –21.61 Mastercard Incorporated 25.02 28.86 Domino’s Pizza, Inc. 1.66 –17.04 Wix.com Ltd. 33.75 26.62 Activision Blizzard, Inc. 0.75 –13.88 Amazon.com, Inc. 18.65 23.31 Vertex Pharmaceuticals Incorporated 11.01 –8.38 RingCentral, Inc. 30.76 13.65 IAC/InterActiveCorp 8.06 –4.23 S&P Global Inc. 24.25 11.34 Alphabet Inc. 13.30 –3.47 ASML Holding N.V. 20.84 10.72 Kotak Mahindra Bank Ltd. –1.82 –2.70 Intuitive Surgical, Inc. 19.23 10.40 Naspers Limited 19.33 7.15 Alphabet Inc. 12.63 5.89 Facebook, Inc. 27.20 5.05 Visa, Inc. 18.58 4.93 Splunk, Inc. 18.76 4.38 Top Contributors Alpha (bps) 690.85 Bottom Contributors Alpha (bps) –366.24 Total Alpha Added (bps) - Baron Fifth Avenue Total Alpha Added (bps) - Baron Fifth Avenue Growth Fund 259.43 Growth Fund 259.43 Top 10 Contributors as a % Alpha 229% Bottom 10 Contributors as a % Alpha –134% Top 20 Contributors as a % Alpha 266% Bottom 20 Contributors as a % Alpha –141% † Measure of relative performance (positive and negative alpha contribution) versus Russell 1000 Growth Index benchmark from 12/31/2018 to 3/31/2019. ** Not annualized. March 31, 2019 Baron Fifth Avenue Growth Fund Table III. Best and worst investment decisions and outcomes - trailing 3-year ended March 31, 2019 Top Contributors Bottom Contributors Annualized Annualized Total Return Alpha Added Total Return Alpha Added Company Name (%) (bps)† Company Name (%) (bps)† Amazon.com, Inc. 44.25 999.52 FireEye, Inc. –35.83 –153.00 Alibaba Group Holding Limited 32.15 421.13 Under Armour, Inc. –53.98 –137.64 Mastercard Incorporated 36.52 207.33 Activision Blizzard, Inc. –24.83 –123.30 Intuitive Surgical, Inc. 52.40 171.25 Ctrip.com International, Ltd. –0.47 –113.73 Mobileye N.V. 48.14 166.62 Allergan PLC –18.79 –82.58 Veeva Systems Inc. 46.11 154.13 Apple, Inc. 15.61 –70.82 Red Hat, Inc. 34.86 112.99 athenahealth, Inc. –28.28 –68.70 EPAM Systems, Inc. 36.03 111.42 Starbucks Corporation 0.75 –67.13 Worldpay, Inc. 40.66 88.52 Expedia Group, Inc. –1.17 –66.93 Visa, Inc. 27.76 88.17 Synchrony Financial 6.32 –59.39 ASML Holding N.V. 24.48 79.43 Brookfield Asset Management, Inc. 10.02 –56.37 CME Group, Inc. 24.50 64.07 Regeneron Pharmaceuticals, Inc. –5.93 –48.38 Naspers Limited 19.61 63.10 The Stars Group Inc. –38.12 –48.02 Illumina, Inc. 24.17 52.14 Verisk Analytics, Inc. 2.07 –43.74 PagSeguro Digital Ltd. 21.44 31.46 Alexion Pharmaceuticals, Inc. –10.43 –42.33 RingCentral, Inc. 32.24 24.98 Snap, Inc. –29.77 –24.02 TerraForm Global, Inc. 64.37 19.19 Concho Resources, Inc. 6.70 –23.25 Wix.com Ltd. 33.38 18.76 Equinix, Inc. 13.41 –22.92 The Charles Schwab Corp. 16.28 15.50 Biogen, Inc. –1.78 –21.72 Facebook, Inc. 13.15 14.34 Twitter, Inc. –13.05 –20.49 Top Contributors Alpha (bps) 2,904.07 Bottom Contributors Alpha (bps) –1,294.46 Total Alpha Added (bps) - Baron Fifth Avenue Total Alpha Added (bps) - Baron Fifth Avenue Growth Fund 1,636.04 Growth Fund 1,636.04 Top 10 Contributors as a % Alpha 154% Bottom 10 Contributors as a % Alpha –58% Top 20 Contributors as a % Alpha 178% Bottom 20 Contributors as a % Alpha –79% † Measure of relative performance (positive and negative alpha contribution) versus Russell 1000 Growth Index benchmark from 3/31/2016 to 3/31/2019. Sources: FactSet PA, Russell, Inc., and BAMCO. Since we completed the restructuring of the Fund at the end of calendar iteration: invent, launch, reinvent, relaunch, start over, rinse, repeat, again year 2011, it has returned 216.6% cumulatively, outperforming the Russell and again.