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Baron Health Care Fund re-establishes stake in Elevance Health
The fund said it believes insurance margins are improving, after years of elevated utilization and reimbursement pressure, with a focus on Medicare Advantage.
Baron Capital’s Baron Health Care Fund re-established a position in Elevance Health, Inc., according to its Q2 2026 investor letter. The fund reported a 11.99% gain during the quarter, compared with 10.48% for the Russell 3000 Health Care Index and 15.44% for the Russell 3000 Index. Since inception, the fund’s annualized appreciation was 10.61%, versus 10.02% for the benchmark and 14.83% for the index. The letter cited strong stock selection across pharmaceuticals, biotechnology, health care equipment, and life sciences tools and services, while noting limited exposure to managed care stocks weighed on relative returns.
In the letter, Baron Health Care Fund highlighted Elevance Health as part of its renewed managed care exposure. It described Elevance as a US-based health benefits company that manages diversified portfolios serving Commercial, Exchange, Medicaid, and Medicare Advantage members. The investor letter also said the fund re-established positions in UnitedHealth Group and Elevance as it looks for a more favorable insurance backdrop.
Baron Capital pointed to improving biotechnology funding and recovering managed care margins as reasons for its continued health care outlook, along with growth drivers tied to an aging population, chronic disease, medical innovation, and higher health care spending. For context, Elevance Health shares closed at $382.77 on August 3, 2026, with a one-month return of -8.6% and a 52-week gain of 38.5%.