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Baron Health Care Fund gains in Q2, highlights Eli Lilly on GLP-1
The Baron Health Care Fund rose 11.9% in Q2 2026 and cited coverage of Eli Lilly's obesity portfolio by all three major pharmacy benefit managers, including its daily oral GLP-1, Foundayo.
Baron Capital said its Baron Health Care Fund rose 11.99% during the second quarter of 2026, outperforming the Russell 3000 Health Care Index, which gained 10.48%, and the broader Russell 3000 Index, which rose 15.44%, according to the fund's Q2 2026 investor letter summarized by Yahoo Finance.
The letter attributes the relative performance to stock selection across pharmaceuticals, biotechnology, health care equipment, and life sciences tools and services, while noting limited exposure to managed care stocks weighed on returns. Since inception, the fund has appreciated 10.61% on an annualized basis versus 10.02% for its benchmark and 14.83% for the index, the filing said.
Baron Capital also outlined a positive outlook for health care, pointing to improving biotechnology funding, stronger acquisition activity, recovering managed care margins, and demand drivers tied to an aging population, chronic disease, medical innovation, and higher health care spending.
Eli Lilly was highlighted as a notable contributor to performance. Yahoo Finance noted that, on August 3, 2026, the company closed at $1,121.36 per share, with a one-month return of -9.24% and a 46.40% gain over the past 52 weeks, and the fund letter said all three major pharmacy benefit managers now cover Lilly's obesity portfolio, including its new daily oral GLP-1, Foundayo. The outlet also said the letter frames this as a reversal from last summer, when CVS Caremark provided preferred coverage for Novo Nordisk's Wegovy and raised price war concerns.