What Makes Welltower (WELL) Both Offensive and Defensive?

Baron Funds released its “Baron Durable Advantage Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund primarily focuses on investing in securities of large-sized companies. The fund increased 15.6% (Institutional Shares) in the second quarter compared to a 10.9% return for the S&P 500 Index (the Index). The Fund is up 7.5%, year to date, compared to the 6.2% gain for the Index. After two consecutive years of strong market recovery, there was a correction at the end of the first quarter and the early part of the second quarter. But later in the second quarter, the market rebounded meaningfully. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, the Baron Durable Advantage Fund highlighted stocks such as Welltower Inc. (NYSE:WELL). Welltower Inc. (NYSE:WELL) is a residential wellness and healthcare infrastructure company. The one-month return of Welltower Inc. (NYSE:WELL) was 3.43%, and its shares gained 41.69% of their value over the last 52 weeks. On August 21, 2025, Welltower Inc. (NYSE:WELL) stock closed at $166.94 per share, with a market capitalization of $111.654 billion.

Baron Durable Advantage Fund stated the following regarding Welltower Inc. (NYSE:WELL) in its second quarter 2025 investor letter:

"Very briefly on the other, smaller adds to existing investments during the second quarter. The premium senior housing provider Welltower Inc. (NYSE:WELL) – we continued to build our position in this offensive and defensive name. “Defensive” due to the needs-based service offering the company provides with a focus on the best micro-markets with substantial pricing power, given the company serves a higher net-worth demographic; and “offensive” given the company’s structural supply-demand imbalance, due to muted supply growth with secular demand tailwinds underpinned by demographics."

Welltower Inc. (NYSE:WELL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Welltower Inc. (NYSE:WELL) at the end of the second quarter, which was 56 in the previous quarter. While we acknowledge the potential of Welltower Inc. (NYSE:WELL) 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 Welltower Inc. (NYSE:WELL) and shared the list of shock winners on Wall Street. 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.