Baron Capital Launches Actively Managed ETFs, Discusses Tesla and SpaceX Holdings

Baron Capital's Entry into ETFs

• 🚀 Baron Capital is launching five new actively managed ETFs, marking a significant milestone after over 43 years in business.
• 💡 This move aims to broaden access for clients who want to invest with Baron Capital's long-term growth equity strategy but require the benefits of ETFs, such as operational efficiencies, tax efficiencies, and intraday liquidity.
• 🎯 The ETFs will utilize Baron Capital's established investment strategy and repeatable process, offering clients more ways to access their expertise.

Investment Philosophy and 'First Principles'

• 🧠 The firm's core mission is to change the lives of their clients by focusing on long-term growth equity investing.
• 🧩 A key fund, the Baron First Principles Fund, is named after Elon Musk's theory of first principles thinking.
• 🔍 This involves boiling down businesses to their essence, analyzing them thoroughly, and identifying areas for improvement before investing long-term in great people and businesses.

Major Holdings: Tesla and SpaceX

• 📈 SpaceX is currently the largest holding at Baron Capital, representing about $10 billion of the $52 billion in total AUM.
• 🚗 Tesla is the second-largest holding, valued at approximately $5 billion.
• 🌟 These companies became the largest holdings due to their extraordinary success, not necessarily from a large initial investment, and Baron Capital has maintained a strategy of not selling these positions.

Future of Baron Capital

• 🤝 Baron Capital, led by Ron and Michael Baron, will maintain its core investment DNA and strategy.
• 🌐 The firm plans to expand its delivery methods beyond ETFs to include more CITs, international offerings, sub-advised managed accounts, and model delivery to meet clients where they are.
• 💡 Ron Baron emphasizes that his passion for the business stems from a continuous process of learning about businesses, which he finds entertaining and keeps him engaged.