Baron Real Estate Income Fund Decided to Exit Weyerhaeuser Company (WY) Due to Weak Demand

Baron Funds, an investment management company, released its “Baron Real Estate Income Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund decreased 0.23% (Institutional Shares) in the quarter compared to a 1.46% decline for the MSCI US REIT Index (the REIT Index). Since its inception on December 29, 2017, through June 30, 2025, the Fund achieved a cumulative return of 87.02%, more than double the 35.45% return of the REIT Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron Real Estate Income Fund highlighted stocks such as Weyerhaeuser Company (NYSE:WY). Weyerhaeuser Company (NYSE:WY) is a leading private owner and operator of timberlands. The one-month return of Weyerhaeuser Company (NYSE:WY) was -0.28%, and its shares lost 16.65% of their value over the last 52 weeks. On August 11, 2025, Weyerhaeuser Company (NYSE:WY) stock closed at $25.28 per share, with a market capitalization of $18.24 billion.

Baron Real Estate Income Fund stated the following regarding Weyerhaeuser Company (NYSE:WY) in its second quarter 2025 investor letter:

"During the quarter, we decided to exit our position in Weyerhaeuser Company (NYSE:WY). While shares have continued to trade at a significant discount to NAV, a softer-than-expected residential housing market this year resulted in a weak demand environment, which ultimately weighed on lumber and other wood products prices. As we wrote in our prior quarterly letter, Weyerhaeuser typically tracks the price of lumber, so soft demand and lower wood products prices can have a negative impact on the business and on the stock. We plan to continue monitoring the business and will potentially re-engage at the appropriate time."

Weyerhaeuser Company (NYSE:WY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Weyerhaeuser Company (NYSE:WY) at the end of the first quarter, which was 37 in the previous quarter. While we acknowledge the potential of Weyerhaeuser Company (NYSE:WY) 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 Weyerhaeuser Company (NYSE:WY) and shared the list of stocks that will benefit from an onshoring boom. In addition, please check out our hedge fund investor letters Q2 2025 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.