Baron Health Care Fund Reports 11.99% Second Quarter Gain

Baron Capital Group reported that its Health Care Fund achieved an 11.99% gain for the second quarter of 2026. The performance exceeded that of the Russell 3000 Health Care Index, though the fund's quarterly results were dampened by holdings in Insmed Incorporated.

In a Q2 investor letter, the fund expressed a bullish long-term outlook for Insmed despite the company's recent struggles. Insmed's shares faced significant pressure after the company exited the Nasdaq-100 Index and reported first-quarter sales for its drug Brinsupri that fell short of market expectations.

Baron Capital maintains that Insmed possesses three lead pulmonology assets with a combined peak sales potential exceeding $8 billion. The fund specifically identifies Brinsupri as a $5 billion-plus opportunity for treating non-cystic fibrosis bronchiectasis. Additionally, the investment manager highlighted the potential efficacy of treprostinil palmitil inhalation powder for treating interstitial lung disease and pulmonary arterial hypertension.