Baron Capital sold its stake in FND as the fund trailed the Russell 2000 Growth Index in Q2 2026 amid housing sector pressures.
Baron Small Cap Fund sold its position in Floor & Decor Holdings Inc (FND) during Q2 2026, citing persistent weakness in housing demand. The fund returned 12.57% for the quarter, lagging the Russell 2000 Growth Index’s 25.71% gain.
The broader U.S. equity rebound was driven by AI infrastructure and semiconductor stocks, with small caps outperforming large caps. However, high-beta and momentum stocks led gains, areas where the fund has historically had limited exposure. Software and services stocks faced pressure from AI disruption concerns.
Management remains optimistic about small-cap valuations and industrial growth but warns of ongoing risks from oil prices, inflation, and interest rates. FND closed at $56.05 on August 18, 2026.