How Baron Emerging Markets Is Winning

Emerging-markets stocks have been mostly submerging the past year or so. But Baron Emerging Markets fund has managed to stay afloat and deliver a respectable return. The fund has also excelled against the competition, beating 96% of diversified emerging-markets funds over the past 12 months.Manager Michael Kass credits Baron's philosophy of deeply researching companies for the successful run. Doing his homework helped him find such obscure companies as Shuaa Capital, a United Arab Emirates financial firm (and the fund's only holding in so-called frontier markets); Steinhoff International, a South African furniture maker; and China's Sihuan Pharmaceutical. All three stocks have at least doubled over the past year.

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