The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.

Baron Capital, an investment management company, released its Q2 2026 letter for the "Baron Real Estate Income Fund." The Fund gained 12.18% (Institutional Shares) during the quarter, modestly outperforming the MSCI US REIT Index, which increased 11.84%. The letter can be downloaded here. Its long-term performance also remains strong, with Morningstar ranking it the #2 real estate fund since its December 2017 inception. The letter discusses management's current views, portfolio composition, key contributors and detractors, recent activity, and the outlook for real estate and the Fund. Management believes a multi-year recovery in real estate is beginning to emerge, despite elevated interest rates, housing affordability pressures, and AI-related disruption. Its constructive outlook is supported by attractive valuations, accelerating M&A, favorable supply-demand dynamics, healthy balance sheets, improving debt conditions, and increasing recognition of real estate as an AI beneficiary. The Fund remains positioned to benefit from improving growth, rising dividends, and potential valuation normalization. Please review the Fund's top five holdings to gain insights into their key selections for 2026.

In its second-quarter 2026 investor letter, Baron Real Estate Fund highlighted Blackstone Mortgage Trust, Inc. (NYSE:BXMT). Blackstone Mortgage Trust, Inc. (NYSE:BXMT) is a real estate finance company that acquires and manages loans and other debt or credit-oriented investments collateralized by commercial real estate. On September 18, 2026, Blackstone Mortgage Trust, Inc. (NYSE:BXMT) closed at $13.27 per share. Over the Blackstone Mortgage Trust, Inc. (NYSE:BXMT) was -6.02%, and its shares lost 30.30% over the past 52 weeks. Blackstone Mortgage Trust, Inc. (NYSE:BXMT) has a market capitalization of $2.24 billion with a 52-week trading range between $13.10 - $20.67.

Baron Real Estate Fund stated the following regarding Blackstone Mortgage Trust, Inc. (NYSE:BXMT) in its Q2 2026 investor letter:

"The Fund continues to have a favorable view of Blackstone Mortgage Trust, Inc. (NYSE:BXMT), which specializes in real estate credit investments. The company benefits from several competitive advantages, including sponsorship by Blackstone Inc., a global platform providing access to a diversified pipeline of real estate credit opportunities, and a strong, liquid balance sheet. With a 10% dividend yield, a valuation below book value, and improving business prospects, we view Blackstone Mortgage Trust as a compelling investment for the Fund."

Blackstone Mortgage Trust, Inc. (NYSE:BXMT) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Blackstone Mortgage Trust, Inc. (NYSE:BXMT) at the end of the second quarter which was 15 in the previous quarter. While we acknowledge the potential of Blackstone Mortgage Trust, Inc. (NYSE:BXMT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Blackstone Mortgage Trust, Inc. (NYSE:BXMT) and shared a list of top beaten-down REITs ready for a rotation rally. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

This article is originally published at Insider Monkey.