ETF Intel Q&A: Baron Capital Group

Responses from Matt Camuso, Head of ETF Solutions, Baron Capital

Can you start off by telling us about the Baron ETF lineup?

Baron Capital’s active ETF platform is a natural extension of what we have been doing for more than four decades: investing in secular growth businesses with durable competitive advantages, exceptional management teams, and long-term opportunities for value creation.

We launched our active ETF platform on December 12, 2025, with ETFs listed on the NYSE and NASDAQ on December 15, 2025. Today our lineup includes seven active ETFs across U.S. equity market caps, sectors, global and emerging markets, representing several areas of Baron Capital’s long-standing growth equity expertise. The wrapper is new, but the investment approach is not. Our ETFs are managed with the same research-driven, fundamental, long-term investment philosophy that has defined Baron Capital since our founding in 1982.

The reason we entered the ETF market is straightforward: clients are increasingly asking for active management in an ETF structure. We are meeting that demand by offering another way to access Baron Capital’s investment capabilities through a vehicle that many advisors and investors value for its flexibility, transparency, liquidity, and potential tax efficiency.

Importantly, nothing is changing about who we are or how we invest. Our active ETFs are not a departure from Baron Capital’s core business; they are an expansion of access to it. We remain focused on the same objective: identifying and owning great growth businesses for the long term on behalf of our clients.

What makes your approach to investing unique?

What we believe makes Baron Capital’s approach to investing unique is the consistency and depth of our process. We invest with an ownership mentality, seeking to identify exceptional growth businesses that we believe have durable competitive advantages, significant long-term opportunities, and management teams capable of executing over many years.

Our research is bottom-up and fundamentally driven. We do our own work and do not rely on Wall Street analysis to form our investment views. We spend a tremendous amount of time studying companies, industries, competitors, and market dynamics, while engaging directly with management teams to better understand not just where a business is today, but where it can go over the long term.

As a result, our portfolios can be more concentrated, have high active share, and we find, experience lower turnover. We are not trying to replicate a benchmark; we are trying to own a select group of businesses that we believe can deliver attractive returns over the long term

This disciplined, research-intensive investment process has helped drive strong long-term results. Today, 96.2% of Baron Funds’ assets under management have outperformed their respective benchmarks.¹ We believe that reflects the strength of our philosophy: doing our own independent research, investing in great businesses, partnering with exceptional management teams, and remaining patient enough to allow our investment theses to play out.

Your CEO Ron Baron recently said “We invest in businesses—not only for what they are today, but for what we believe they will become.” What does this mean for your investors?

Ron’s quote captures one of the core principles of how we invest at Baron Capital. We are not simply evaluating companies based on what they look like today. We are trying to understand what they can become over the next five, ten, or even more years.

For our investors, that means we are focused on identifying businesses that we believe have the ability to grow substantially larger, strengthen their competitive positions, and create meaningful value over time. Many of the companies we invest in are still in the early stages of realizing their full potential. Our job is to do the research, understand the opportunity, and remain patient as that potential develops.

It also means we are willing to think differently from the market. Short-term volatility, temporary setbacks, or changes in investor sentiment do not necessarily change the long-term value of a great business. If our conviction in the company, its management team, and its long-term opportunity remains intact, we are prepared to stay invested and allow time to work in our favor.

A critical part of that conviction comes from the relationships we build with management teams. We spend significant time understanding the people leading the businesses we own, how they allocate capital, how they make decisions, and whether their vision aligns with the long-term opportunity we see.

Ultimately, for our investors, this approach means they are invested alongside a firm that is focused on long-term business value creation, not short-term market movements. We believe that by owning exceptional businesses through time, we give our investors the opportunity to participate in the growth and value those companies can create as they become much larger and more valuable enterprises.

What is one market theme that you think investors should pay attention to for the second half of 2026?

The market theme we believe investors should pay attention to is the continued acceleration of Artificial Intelligence (AI) adoption.

The long-term benefits of AI are becoming increasingly clear, but we believe the market is still in the early stages of understanding the scale of disruption AI can create across industries. As this transformation gains momentum, the investment landscape is likely to become more polarized, with AI strengthening the competitive advantages of some companies while eroding the positions of others.

We believe this environment creates a strong case for active management. In a market where business models and competitive dynamics can change quickly, investors need a forward-looking approach that goes beyond today’s index weights or market capitalization. The key is identifying the companies best positioned to benefit from AI over the long term.

That includes established large-cap leaders that may be able to defend and extend their advantages, as well as innovative smaller companies using AI to challenge incumbents, expand their addressable markets, and potentially capture outsized growth.

This is where we believe our research-driven process is especially important. Through deep fundamental research, direct company engagement, and disciplined security selection, we seek to understand not only how AI is affecting businesses today, but how it may reshape industries over the next five to ten years. We believe active management can help investors navigate the risks of disruption while positioning portfolios to participate in the next generation of AI-driven opportunity.

1   As of 3/31/2026. Sources: Baron Capital Does not include the three new ETFs launched on December 12, 2025.

Baron Funds (Institutional Shares) and Benchmark Performance

As of 3/31/2026.

(1) Performance reflects the actual fees and expenses that were charged when the Fund was a partnership. The predecessor partnership charged a 15% performance fee through 2003 after reaching a certain performance benchmark. If the annual returns for the Fund did not reflect the performance fee for the years the predecessor partnership charged a performance fee, returns would be higher. The Fund’s shareholders will not be charged a performance fee. The predecessor partnership’s performance is only for periods before the Fund’s registration statement was effective, which was June 30, 2008. During those periods, the predecessor partnership was not registered under the Investment Company Act of 1940 and was not subject to its requirements or the requirements of the Internal Revenue Code relating to registered investment companies, which, if it were, might have adversely impacted its performance. (2) The since inception date for Russell Midcap Growth Index is  6/30/1987. (3) Performance reflects the actual fees and expenses that were charged when the Fund was a partnership. The predecessor partnership charged a 20% performance after reaching a certain performance benchmark. If the annual returns for the Fund did not reflect the performance fee for the years the predecessor partnership charged a performance fee, returns would be higher. The Fund’s shareholders will not be charged a performance fee. The predecessor partnership’s performance is only for periods before the Fund’s registration statement was effective, which was April 30, 2003. During those periods, the predecessor partnership was not registered under the Investment Company Act of 1940 and was not subject to its requirements or the requirements of the Internal Revenue Code relating to registered investment companies, which, if it were, might have adversely impacted its performance. (4) While the Fund may invest in securities of any market capitalization, 42.5% of the Fund’s long holdings were invested in SMID, Mid and Mid/Large-Cap securities (as defined by Russell, Inc.) as of 3/31/2026 (SMID represents 18.2% of the portfolio and has market capitalizations between $5.4 – $16.7 billion; Mid represents 16.3% and has market capitalizations between $16.7 – $58.0 billion; Mid /Large represents 8.0% and has market capitalizations between $58.0 – $208.4 billion). (5) The Broad-Based Benchmark for Baron Discovery Fund, Baron Growth Fund, Baron Small Cap Fund, Baron Focused Growth Fund, Baron Asset Fund, Baron Partners Fund, and Baron Health Care Fund is Russell 3000 Index. The Broad-Based Benchmark for Baron Durable Advantage Fund, Baron Fifth Avenue Growth Fund, Baron Opportunity Fund, Baron FinTech Fund, Baron Real Estate Fund, Baron Real Estate Income Fund, Baron Technology Fund, and Baron WealthBuilder Fund is S&P 500 Index. The Broad- Based Benchmark for Baron Emerging Markets Fund is MSCI Emerging Markets Index. The Broad-Based Benchmark for Baron International Growth Fund is MSCI ACWI ex USA Index. The Broad-Based Benchmark for Baron Global Opportunity Fund, Baron FinTech Fund, Baron Technology Fund, and Baron WealthBuilder Fund is MSCI ACWI Index. (6) As of 1/28/2026. (7) Comprised of operating expenses of 1.04% and interest expense of 0.30%. (8) As of 4/30/2025. (9) As of 3/9/2026. (10) Gross annual expense ratio was 0.73%, but the net annual expense ratio was 0.70% (net of Adviser’s fee waivers). (11) Gross annual expense ratio was 0.76%, but the net annual expense ratio was 0.75% (net of Adviser’s fee waivers). (12) Comprised of operating expenses of 1.05% and interest expense of 0.94%. (13) Gross annual expense ratio was 0.96%, but the net annual expense ratio was 0.91% (net of Adviser’s fee waivers, including interest expense of 0.01%). (14) Gross annual expense ratio was 6.86%, but the net annual expense ratio was 1.20% (net of Adviser’s fee waivers and expense reimbursements). (15) Gross annual expense ratio was 1.04%, but the net annual expense ratio was 0.96% (net of Adviser’s fee waivers). (16) Gross annual expense ratio was 0.87%, but the net annual expense ratio was 0.85% (net of Adviser’s fee waivers). (17) Gross annual expense ratio was 0.90%, but the net annual expense ratio was 0.80% (net of Adviser’s fee waivers). (18) Gross annual expense ratio was 1.21%, but the net annual expense ratio was 1.18% (includes acquired fund fees and expenses, net of the expense reimbursements). (19) On December 12, 2025, Baron FinTech Fund® and Baron Technology Fund® were converted from mutual funds into exchange-traded funds, Baron Financials ETF™ and Baron Technology ETF™, respectively. For additional information please refer to the prospectus. NAV and Market Price returns include returns of the Institutional Shares of the predecessor mutual fund prior to the ETF’s commencement of operations. Prior to the ETFs listing on 12/15/2025 the NAV returns of the Institutional Shares of the predecessor mutual fund are used as proxy market price returns. If the predecessor mutual fund had been structured as an ETF, its performance may have differed. * Not annualized. † Formerly, Baron Global Advantage Fund.

If a Fund’s historical performance was impacted by gains from IPOs there is no guarantee that these results can be repeated or that the Fund’s level of participation in IPOs will be the same in the future.

Investors should consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus and summary prospectuses contain this and other information about the ETFs. You may obtain them from the Funds’ distributor, Baron Capital, Inc., by calling 1-800-99-BARON or visiting BaronCapitalGroup.com. Please read them carefully before investing.

The performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. The Adviser waives and/or reimburses or may waive or reimburse certain Funds’ expenses pursuant to a contract expiring on August 29, 2036, unless renewed for another 11-year term and the Funds’ transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. Current performance may be lower or higher than the performance data quoted. For performance information current to the most recent month end, visit BaronCapitalGroup.com or call 1-800-99-BARON.

Risks: Risks: All investments are subject to risks and may lose value.

Investors generally incur the cost of the spread between the prices at which shares are bought and sold. Buying and selling shares may result in brokerage commissions which will reduce returns.

Prior to trading in the secondary market, shares of the fund are “created” at NAV by market makers, large investors and institutions only in block-size Creation Units. Each “creator” or “Authorized Participant” enters into an authorized participant agreement with Baron Capital, Inc. Only an Authorized Participant may create or redeem Creation Units directly with the fund. 

Investors buy and sell shares of ETFs at market price (not NAV) in the secondary market throughout the trading day. These shares are not individually available for purchase or redemption directly from the ETF. Baron Capital, Inc. serves as the distributor of the Creation Units for the ETFs on an agency basis. Baron Capital does not maintain a secondary market in Fund’s shares.

The discussion of market trends is not intended as advice to any person regarding the advisability of investing in any particular security. The views expressed in this document reflect those of the respective writer. Some of our comments are based on management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. Our views are a reflection of our best judgment at the time and are subject to change at any time based on market and other conditions and Baron has no obligation to update them.

BAMCO, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Baron Capital, Inc. is a broker-dealer registered with the SEC and member of the Financial Industry Regulatory Authority, Inc. (FINRA).

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