Baron Capital, an investment management firm, released its Q4 2025 charter for its “Baron Real Estate Income Fund.” A copy of the letter can be downloaded here. In 2025, the Fund appreciated 3.74% (institutional shares), outpacing the 1.68% gain of the MSCI US REIT Index (the REIT Index). In the fourth quarter of 2025, the Fund fell a modest 0.40%, outpacing the Index’s 1.99% decline. In contrast to the substantial double-digit growth achieved in 2023 and 2024, the Fund’s modest performance in 2025 can be attributed to a variety of factors, including stronger relative growth in several sectors outside of real estate, continued interest rate headwinds, and headwinds from specific REIT subcategories. As of December 31, 2025, the Fund’s net assets are as follows: REITs (71.2%), non-REIT real estate companies (25.0%), and cash and cash equivalents (3.8%). Additionally, the Fund currently has investments in 13 categories of REITs. Looking ahead to 2026, the Firm is optimistic about the prospects for the stock market and the Baron Real Estate Income Fund. Review the Fund’s top five holdings to learn about its key picks for 2025.
In its Q4 2025 investor letter, Baron Real Estate Income Fund highlighted stocks like Weyerhaeuser Company (NYSE:WY). Weyerhaeuser Company (NYSE:WY) is one of the largest private forestland owners in the United States. On April 1, 2026, Weyerhaeuser Company (NYSE:WY) closed at $24.20 per share. Weyerhaeuser Company (NYSE:WY)’s monthly performance was -1.75% and its stock lost 11.78% over the past 52 weeks. Weyerhaeuser Company (NYSE:WY) has a market cap of $17.45 billion.
Baron Real Estate Income Fund stated the following regarding Weyerhaeuser Company (NYSE:WY) in its Q4 2025 investor letter:
“During the quarter, the Fund acquired shares of Company Weyerhaeuser (NYSE:WY), one of the largest forestland owners in the world, with approximately 10 million acres in the U.S. and an additional 13 million acres licensed in Canada. It is also one of the largest manufacturers of wood products such as lumber, OSB, plywood and other building materials used in new home construction and in repair and remodeling projects. The company is currently trading at a roughly 40% discount to net asset value, well above its mid-teens historical average and near all-time high levels. We believe Weyerhaeuser stock has become unreasonably cheap and that support from recent logging capacity reductions, upward momentum in lumber prices (from the now-implemented Canadian duties and tariffs), and government housing initiatives should help the valuation return to historic levels over time. Additionally, further support from an eventual rebound in new home construction and repair and remodeling activity could drive share price gains in the medium to long term.”