Baron Funds, an investment management company, released its “Baron Emerging Markets Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund experienced an excellent quarter to end another successful year. The fund declined 7.35% (Institutional Shares) in the fourth quarter compared to a -8.01% return for the MSCI Emerging Markets Index (the Benchmark) and a (6.84)% return for the MSCI Emerging Markets IMI Growth Index (the Proxy Benchmark). For the full year, the fund returned 7.90% compared to 7.50% and 9.44% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.

In its fourth quarter 2024 investor letter, Baron Emerging Markets Fund emphasized stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was -5.31%, and its shares gained 49.04% of their value over the last 52 weeks. On February 24, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $191.65 per share with a market capitalization of $851.28 billion.

Baron Emerging Markets Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter:

"Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed in the fourth quarter due to a cyclical recovery in semiconductors and significant incremental demand for AI chips. We retain conviction that TSMC’s technological leadership, pricing power, and exposure to secular growth markets, including AI/high-performance computing, automotive, 5G, and internet of things, will allow the company to sustain strong double-digit earnings growth over the next several years."

A close-up of a complex network of integrated circuits used in logic semiconductors.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the fourth quarter compared to 158 in the third quarter. The fourth quarter revenue of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) increased 14.3% sequentially in NT. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of best long term tech stocks to buy. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.