March 31, 2021 Baron Emerging Markets Fund DEAR BARON EMERGING MARKETS FUND SHAREHOLDER: PERFORMANCE Baron Emerging Markets Fund (the “Fund”) declined a modest 0.16% (Institutional Shares) during the first quarter of 2021, while its principal benchmark index, the MSCI EM Index, appreciated 2.29%. The MSCI EM IMI Growth Index gained 1.30% for the quarter. The Fund underperformed its principal benchmark index, as well as the all-cap growth proxy, after a strong period of absolute and relative performance in the second half of 2020. Emerging market (“EM”) and international equities modestly trailed their U.S. counterparts, consolidating the outperformance of the second half of 2020. Market leadership by sector continued to ebb and flow, with strength in quality growth stocks in the first half of the quarter giving way to notable outperformance by more economically cyclical stocks in the second half. In our view, with the exception of a couple of outlier countries, investors largely looked through ongoing COVID-19 disruption and focused on vaccine penetration and sustained fiscal largesse, anticipating positive corporate earnings momentum in future periods. The rise in longer-term sovereign bond yields that began late last year accelerated midway through MICHAEL KASS Retail Shares: BEXFX the quarter, coincident with the sector rotation noted above. In our view, Institutional Shares: BEXIX this signals the market’s passage through the most favorable post-COVID PORTFOLIO MANAGER R6 Shares: BEXUX market environment, where risk aversion and low expectations met massive policy stimulus and positive vaccine developments. Going forward, equities will be much more sensitive to growth and inflation expectations, though Table I. we note that bond yields have already priced in a materially tighter Fed than Performance what has been officially communicated. In short, to sustain solid gains, Annualized for periods ended March 31, 2021 equities will need the affirmation of strong earnings performance and Baron Baron guidance, while in our view, multiples are unlikely to expand from here. We Emerging Emerging remain optimistic that corporate earnings are likely to deliver, particularly Markets Markets MSCI Fund Fund EM IMI for the companies in which we have invested, and we continue to anticipate Retail Institutional MSCI EM Growth a sustainable period of dollar weakness and relative outperformance for EM Shares1,2 Shares1,2 Index1 Index1 and international equities. As always, we are confident that we have Three Months3 (0.21)% (0.16)% 2.29% 1.30% invested in many well-positioned and well-managed companies on a One Year 71.62% 72.06% 58.39% 66.27% bottom-up basis, which are poised to benefit from long-term and attractive Three Years 7.13% 7.42% 6.48% 9.68% investment themes. Five Years 12.36% 12.65% 12.07% 14.71% Ten Years 6.98% 7.25% 3.65% 5.77% Since Inception (December 31, 2010) 6.66% 6.93% 3.77% 5.70% Performance listed in the above table is net of annual operating expenses. Annual expense ratio for the Retail Shares and Institutional Shares as of December 31, 2020 was 1.35% and 1.09%, respectively. 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, 2031, 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. The Fund’s 1Q 2021 historical performance was impacted by gains from IPOs and/or secondary offerings. There is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs and secondary offerings will be the same in the future. 1 The MSCI EM (Emerging Markets) Index Net USD is designed to measure equity market performance of large and mid-cap securities across 23 Emerging Markets countries. The MSCI EM (Emerging Markets) IMI Growth Index Net USD is a free float-adjusted market capitalization index designed to measure equity market performance of large, mid and small-cap securities exhibiting overall growth characteristics across 23 Emerging Markets countries. MSCI is the source and owner of the trademarks, service marks and copyrights related to the MSCI Indexes. MSCI is a trademark of Russell Investment Group. The indexes and the Fund include reinvestment of dividends, net of foreign withholding taxes, which positively impact the performance results. The indexes are unmanaged. The index performance is not Fund performance; one cannot invest directly into an index. 2 The performance data does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. BARON FUNDS 3 Not annualized. Baron Emerging Markets Fund For the first quarter of 2021, we underperformed our primary benchmark, the Korea Shipbuilding & Offshore Engineering Co., Ltd. is the largest MSCI EM Index, while also modestly trailing our all-cap EM growth proxy. shipbuilder in the world. Shares rose after an analyst day revealed a growth From a broad market perspective, first quarter trends were largely a strategy in eco-friendly LNG, ammonia, and hydrogen shipbuilding in continuation of the previous quarter, wherein investors increasingly allocated addition to plans to develop offshore wind farms. We expect tightening capital toward more economically cyclical stocks. Our performance was in international maritime carbon emission regulations to drive much higher line with our expectations as we often lag the core index during such periods. demand for LNG fuel-propelled ships and carbon free ammonia-fueled ships. From a sector or theme perspective, our relative underperformance resulted The company has technological leadership in LNG dual fueled ships and will mainly from adverse stock selection effect in the Information Technology effectively operate in a duopoly after its merger with DSME is completed. (“IT”) and Financial sectors. Within IT, a correction following strong 2020 Max Financial Services Limited contributed to performance after gaining performance in our fintech (StoneCo Ltd. and PagSeguro Digital Ltd.), regulatory approval to consummate a strategic investment by Axis Bank, its China value-added (Kingdee International Software Group Co. Ltd., key distribution partner, coupled with a demonstrated increase in market Glodon Company Limited, and Hua Hong Semiconductor Ltd.), and share. As India’s leading life insurance player, the company is benefiting digitization (GDS Holdings Limited) themes stood out. Within Financials, from strong consumer demand for term protection and financial savings concerns related to the re-emergence of COVID-related disruption, triggered products. We retain conviction owing to secular growth opportunities in a correction in several investments, notably Itau Unibanco Holding SA and India’s life insurance industry and expect mid-teens earnings growth over B3 S.A. – Brasil, Bolsa, Balcao in Brazil, and Kotak Mahindra Bank Ltd. and the next three to five years. Bajaj Finance Limited in India. Partially offsetting the above, solid gains from several of our investments related to our sustainability/EV supply chain Beijing Oriental Yuhong Waterproof Technology Co., Ltd. is China’s theme (Korea Shipbuilding & Offshore Engineering Co., Ltd., Techtronic leading provider of waterproofing and other advanced building materials to Industries Co. Ltd., Grupo Mexico, S.A.B. de C.V., and Glencore PLC) the real estate and infrastructure sectors. Shares rose after the company contributed positively. In addition, positive stock selection effect in the beat consensus estimates and raised guidance. We expect structural growth Consumer Discretionary (Ozon Holdings PLC and Galaxy Entertainment in the waterproofing industry to accelerate as China pushes for higher- Group Limited) and Energy (Novatek PJSC) sectors contributed positively to quality standards. In our view, Beijing Oriental Yuhong has the best product relative performance. From a country perspective, our overweight positioning quality, track record, and pricing power in the industry and is well positioned together with weak stock selection in Brazil, and adverse stock selection in to sustain 30% earnings growth over the next several years. India were key detractors from relative performance this quarter. In our view, this weakness was driven by the re-emergence of COVID-related concerns in Table III. these countries and is likely to be temporary, however we have reduced Top detractors from performance for the quarter ended March 31, 2021 aggregate exposure to Brazil and will continue to monitor the situation as Percent COVID challenges have begun to threaten the favorable reform agenda. Impact Kingdee International Software Group Co. Ltd. –0.28% Table II. StoneCo Ltd. –0.25 Top contributors to performance for the quarter ended March 31, 2021 InPost SA –0.24 Percent GDS Holdings Limited –0.22 Impact Localiza Rent a Car S.A. –0.22 Tencent Holdings Limited 0.40% Taiwan Semiconductor Manufacturing Company Ltd. 0.36 After achieving record growth in 2020, shares of enterprise