Baron Funds, an investment management company, released its “Baron FinTech Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund rose 12.52% (Institutional Shares) compared to a 12.21% return for the FactSet Global FinTech Index (Benchmark) and a 5.89% gain for the S&P 500 index. Since inception, the fund has appreciated 11.63% at an annualized rate, compared to 3.23% for the Benchmark. U.S. stocks increased for the fourth quarter as the Federal Reserve’s long-awaited dovish turn was made possible by easing inflation and generally positive economic data supporting the soft landing story. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron FinTech Fund highlighted stocks like LPL Financial Holdings Inc. (NASDAQ:LPLA) in the third quarter 2024 investor letter. Based in San Diego, California, LPL Financial Holdings Inc. (NASDAQ:LPLA) is an integrated platform provider of brokerage and investment advisory services. The one-month return of LPL Financial Holdings Inc. (NASDAQ:LPLA) was 26.06%, and its shares gained 43.17% of their value over the last 52 weeks. On November 11, 2024, LPL Financial Holdings Inc. (NASDAQ:LPLA) stock closed at $317.93 per share with a market capitalization of $23.806 billion.
Baron FinTech Fund stated the following regarding LPL Financial Holdings Inc. (NASDAQ:LPLA) in its Q3 2024 investor letter:
“LPL Financial Holdings Inc. (NASDAQ:LPLA) is an independent broker-dealer with over $1.5 trillion of client assets. As an asset custodian, LPL earns a significant amount of interest income from client cash while paying only a modest amount of interest expense to clients. Shares fell due to concerns that regulators could force broker-dealers such as LPL to pay higher deposit rates to customers, thereby reducing the spread that firms earn from client cash. These fears were exacerbated by pricing changes at competitors such as Wells Fargo and Bank of America. We are actively monitoring these developments but have not seen evidence of any adverse regulatory changes. LPL management is confident that the company is fully compliant with existing regulations and won’t have to increase deposit rates. We continue to own the stock due to LPL’s strong organic growth and compelling valuation.”
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LPL Financial Holdings Inc. (NASDAQ:LPLA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held LPL Financial Holdings Inc. (NASDAQ:LPLA) at the end of the second quarter which was 47 in the previous quarter. In the third quarter, LPL Financial Holdings Inc.’s (NASDAQ:LPLA) total assets increased to $1.6 trillion and its organic net new assets increased 7% on an annualized basis to $27 billion. While we acknowledge the potential of LPL Financial Holdings Inc. (NASDAQ:LPLA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed LPL Financial Holdings Inc. (NASDAQ:LPLA) and shared Oakmark Equity and Income Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.