Baron Financials ETF’s Q1 2026 Investor Letter

Baron Capital, an investment management company, released its first quarter 2026 investor letter for its “Baron Financials EFT”. The Fund fell 15.97% (NAV) compared with a 9.89% decline for the MSCI USA Financials Index (the Financials Index) and a 20.15% decline for the FactSet Global FinTech Index (the FinTech Index). U.S. equities fell in Q1 due to AI-driven disruption and geopolitical shocks, prompting a rotation from software and growth stocks to defensive, commodity, and value segments. Small caps outperformed large caps, with value significantly surpassing growth across all categories. The fund lagged the Financials Index mainly due to overexposure to sectors impacted by AI concerns and underexposure to value stocks. However, it outperformed the FinTech Index due to strong stock selection and unique exposure to the capital markets. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

A copy of Baron Financials ETF’s Q1 2026 investor letter can be downloaded here.

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