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An Intriguing Small-Cap Option on Our Radar

Baron Discovery is off to a great start and features a distinct profile from its comanagers.


Christopher Franz: Led by an up-and-coming management duo, Baron Discovery is off to a strong start and is on our radar. Comanagers Laird Bieger and Randy Gwirtzman have led the fund since its late 2013 launch but are no stranger to small-caps. The two joined Baron Capital in the early 2000s as analysts, supporting Silver-rated Baron Small Cap and its manager Cliff Greenberg. While Greenberg has been a resource and mentor, Bieger and Gwirtzman have given their small-cap fund a distinct profile.

Baron Small Cap skews larger in-cap, with an average market cap near $6 billion, whereas this fund offers more pure small-cap exposure, with an average market capitalization below $2 billion, in line with the Russell 2000 Growth Index. Additionally, this fund is more willing to invest in earlier stage and riskier fare than its cousin, such biotech and pharmaceutical companies, so long as they meet Bieger and Gwirtzman's quality criteria.

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Christopher Franz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.