In the fourth quarter of 2025, the Baron Emerging Markets Fund implemented several strategic changes to its investment portfolio, reinforcing its commitment to key growth themes while also scaling up existing successful positions. These adjustments underscore the fund's forward-looking approach to identifying and capitalizing on high-potential opportunities within dynamic emerging markets. The focus remains on companies poised for significant long-term expansion, particularly those at the forefront of technological innovation and market leadership.

A significant highlight of the fund's strategy involves increasing its stake in SK hynix, a company recognized for its pioneering role in high-bandwidth memory (HBM) technology. SK hynix's HBM products are distinguished by their exceptional performance, resilience, and superior heat dissipation capabilities, making them crucial for advanced computing applications. This leadership in a critical segment of the semiconductor industry positions SK hynix as a vital player in the ongoing technological evolution.

Another core holding is Samsung, which the fund believes will continue to be a primary beneficiary of the sustained global demand for semiconductors. Samsung's multifaceted leadership extends across memory chips, next-generation 5G smartphones, and cutting-edge semiconductor foundry services. The company's diverse portfolio and technological prowess ensure its enduring relevance and growth potential in the rapidly evolving tech landscape.

Furthermore, Alibaba is ramping up its capital expenditures over the next three years, with an ambitious plan to inject at least $53 billion into expanding its cloud infrastructure and integrating artificial intelligence capabilities across its extensive ecosystem. This includes enhancing consumer search functionalities, signaling a deep commitment to AI-driven innovation. These investments are expected to bolster Alibaba's competitive edge and foster new avenues for growth.

The strategic adjustments in the Baron Emerging Markets Fund's Q4 2025 portfolio reflect a confident outlook on selected companies and themes within emerging markets. By focusing on leaders in critical sectors such as advanced memory, broad semiconductor solutions, and AI-powered cloud services, the fund aims to achieve robust long-term returns. The proactive management of these investments demonstrates a clear vision for navigating the complexities and opportunities presented by emerging economies.