Redeeming Baron Investment Funds: Strategies For Success

If you redeem a Baron Investment Fund, you can do so by mailing a request to Baron Funds, calling 1-800-442-3814, visiting the Baron Funds website, or through a broker, dealer, or other financial intermediary. You can also redeem shares by wire transfer or by visiting the Baron Funds office in person. It's important to note that there may be fees associated with redeeming your investment through a broker, dealer, or intermediary. Be sure to review the prospectus and determine the type of investment account you have before proceeding.

How to redeem shares

The process of redeeming shares refers to when a company buys back its issued shares from shareholders. This can be done for a variety of reasons, including improving financial ratios, tax efficiency, or market signalling.

If you are looking to redeem shares from a Baron Investment Fund, here is what you need to know:

• Eligibility: To invest in Baron mutual funds, you must be a U.S. citizen or resident alien, residing in the United States or its territories, or have a U.S. Military address.
• Minimum Investment: The minimum initial investment amount for the Baron Retail share class is $2,000. However, if you establish an automatic investment plan (AIP), the minimum investment amount is lowered to $500.
• Methods of Redemption: You can purchase, exchange, or redeem Fund shares on any business day by written request, via the internet, wire transfer, or by telephone. If you have banking instructions on file with Baron Funds, you can also conduct transactions online or by phone.
• Contact Information: For further questions or to confirm the status of your redemption, you can contact Baron Funds' transfer agent, DST. They can be reached at 1-800-442-3814, Monday through Friday, from 9 am to 5 pm ET.
• Mailing Address: For any transactions conducted by mail, the overnight mailing address is:

> FBO BARON FUNDS, ACCOUNT NO. 98-7037-101-4

> OWNER’S NAME, OWNER’S ACCOUNT NO., SPECIFY FUND NAME

> Kansas City, MO 64105-1514

Alternatively, you can use the following address for regular mail:

> FBO BARON FUNDS, ACCOUNT NO. 98-7037-101-4

> OWNER’S NAME, OWNER’S ACCOUNT NO., SPECIFY FUND NAME

> Kansas City, MO 64121-9946

It is important to note that Baron Funds only accepts payments in the form of checks payable to Baron Funds and drawn on U.S. banks. They do not accept cash, money orders, credit cards, or other similar forms of payment.

Additionally, if you are redeeming shares in general, it is important to understand the different types of shares and their redeemability. Only redeemable shares can be redeemed by the company. Redeemable shares are those that the company has agreed to buy back at a future date. The redemption terms, including the date and price, are set out in the share issue documents and the company's articles of association.

Furthermore, the procedures for redeeming shares may depend on factors such as the company's articles of association, the prescribed particulars of the shares, and the terms of redemption. In some cases, shareholder approval may be required, while in others, only a board resolution is necessary.

Finally, there are statutory restrictions on the redemption of shares. The company can only redeem shares from distributable reserves or the proceeds of a new share issue. The shares being redeemed must also be fully paid.

Dividends and distributions

Dividends, capital gains and spillback distributions can be found on the Baron Capital Group website under Individuals, Tax Center. After selecting the appropriate year, you will see the Baron Funds that had a distribution that year. If the Baron Fund you are invested in is not listed, that Baron Fund did not have a distribution that year.

A mutual fund dividend is income from dividends and interest, less operating expenses, earned by a mutual fund’s holdings. Income in excess of the fund’s expenses must be paid as a dividend to shareholders at least once per year.

A capital gain distribution is generated when a portfolio manager sells securities held by a mutual fund. Any realized gains that exceed realized losses are passed on to shareholders in the form of capital gain distributions and must be reported on your tax return (even if they are reinvested). These gains are classified as long or short-term gains and are taxed differently. A gain on the sale of an investment owned for one year or less is considered short-term for federal income tax purposes and is taxed as ordinary income. A gain on the sale of an investment owned for more than one year is considered long term for federal income tax purposes and taxed at long-term capital gains tax rates.

Spillback distributions are distributions of ordinary and/or capital gains from the previous fiscal year that were not distributed by the end of that year. Spillback distributions must be declared within 9½ months of the end of the fund’s fiscal year. Even though they represent ordinary income and/or capital gains earned by the fund in the previous fiscal year, they are taxable in the year in which they are paid.

Distributions do not impact total return. Although the NAV will drop when the distribution is paid, shareholders who reinvest their distributions will also receive more shares.

Baron Automatic Investment Plan

If your account has already been established without banking instructions, and you wish to enroll in the Plan, please send a "signature guaranteed" letter of instruction along with a voided check to either the regular or overnight address. You can obtain a signature guarantee from most securities firms or banks but not from a notary public.

Financial intermediary compensation

If you purchase Baron Investment Fund shares through a broker, dealer or other financial intermediary (such as a bank or financial adviser), Baron Capital, the Fund's distributor, BAMCO or their affiliates may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker, dealer or other financial intermediary, including your salesperson, to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

The Fund may pay fees to financial intermediaries out of the Fund's assets (in addition to 12b-1 fees), for servicing shareholder accounts. Such financial intermediaries would have omnibus accounts with the Fund's transfer agent, and provide shareholder servicing and/or sub-transfer agent services to shareholders or beneficial owners. It is anticipated that any amount paid by the Fund to such financial intermediaries would not exceed the amount the Fund would have incurred in maintaining the shareholder accounts for those who invest in the Fund directly rather than through these financial intermediaries.

U.S. Federal Income Taxation

Shareholders are responsible for paying taxes on distributions they receive each year, whether they receive them in cash or reinvest them in additional shares of the fund. The funds report distributions to shareholders on IRS Form 1099-DIV at the end of each calendar year.

Distributions of the fund's net investment income (other than "qualified dividend income") and distributions of net short-term capital gains will be taxable to you as ordinary income. Distributions of the fund's net capital gains reported as capital gain dividends by the fund will be taxable to you as long-term capital gains, regardless of the length of time you have held shares of the fund.

If you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account, you may be subject to federal income tax on withdrawals from the tax-deferred arrangement at a later date.

Please note that for Baron Funds that have invested in real estate investment trusts (REITs) and publicly traded partnerships during the current tax year, a portion of the income distributions may be recharacterized as a return of capital or as capital gain distributions. Information to properly reflect the impact of these recharacterizations will not be available until early 2025.

Frequently asked questions