Caution Ahead: BPTRX and BPTIX's Heavy SpaceX Bet Raises the Stakes

Investors looking at the Baron Partners funds, through retail fund Baron Partners Retail BPTRX and institutional funds Baron Partners Institutional BPTIX, should approach the funds with caution. Although the strategy has delivered exceptional long-term returns, its concentrated portfolio has produced substantial volatility in 2026. Zacks currently lists both with a Mutual Fund Rank of #5 (Strong Sell). To see how these funds performed compared to their category, and Top-Ranked Zacks Mutual Funds, please click here.

Recent performance illustrates the risk. BPTRX and BPTIX had posted one-year returns of 24.94% and 25.25%, respectively, through July 31, 2026, but the funds have struggled more recently, with their performance pressured by sharp declines in SpaceX and Tesla. Year to date till July 31, BPTRX and BPTIX have declined 5.4% and 5.2%, respectively.

The biggest reason for the volatility is SpaceX. Baron Partners has accumulated SpaceX shares since 2017, giving investors exposure to the private company well before its public-market debut. Till June 30, SpaceX comprised of 35% of both the funds’ holdings. This exposure has become a double-edged sword. A recent Barron’s report noted that SpaceX and Tesla together accounted for roughly 47% of Baron Partners, meaning major moves in either company can have an outsized impact on the mutual fund. SpaceX shares subsequently suffered a steep decline from their June peak, highlighting the concentration risk.

Still, Ron Baron remains extremely optimistic about SpaceX’s long-term prospects. He describes the company as a potential “lifetime investment opportunity” and believes its businesses spanning Starlink, space transportation and other technologies could create enormous value over the coming decade. Baron has even projected SpaceX to grow between $10 trillion to $30 trillion over 10-15 years following the IPO.

Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Bottom Line

The opportunity is compelling, but so is the risk. BPTRX and BPTIX offer unusually high SpaceX exposure, but investors should be prepared for significant swings if Musk-related companies disappoint.

Want key mutual fund info delivered straight to your inbox?

Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research