Baron Capital on Monday launched five actively managed exchange-traded funds, betting that its long-term record – including a large, early investment in SpaceX – will translate to growing demand for active strategies in an ETF format.
The new funds – the Baron First Principles ETF (RONB), Baron Global Durable Advantage ETF (BCGD), Baron SMID Cap ETF (BCSM), Baron Financials ETF (BCFN) and Baron Technology ETF (BCTK) – began trading on Monday. Each ETF is designed to mirror investment approaches that Baron Capital has used for decades across its mutual funds and private accounts.
Baron Capital founder, CEO and chairman Ron Baron said SpaceX, which is eyeing one of the largest IPOs ever, has exceeded Tesla to become the firm’s largest investment at about $10 billion.
SpaceX’s rapidly expanding Starlink satellite network is a key driver of its long-term investment thesis, Baron said. He added, he is also bullish on the development of space-based data centers, arguing that orbiting infrastructure could sharply reduce operating costs tied to energy and cooling.
“Cooling is a huge cost, put them in space, no more cooling costs,” Baron said.
Baron Capital has also invested in xAI, another Elon Musk-founded company, which Baron said could benefit from the expansion of satellite networks and space-based computing to deliver artificial intelligence services like ChatGPT “but better.”
Baron said the firm’s long-term performance supports the move into ETFs. He said 98% of Baron Capital’s assets have outperformed their benchmarks, with about 60% ranking in the top 5% of funds. He noted, the Baron Partners Fund has been the top-performing U.S. fund since 2003.
Baron added that the firm has generated roughly $57 billion in profits to date, after starting with $100 million in assets in 1992, and is aiming to generate five times that amount over the next decade.
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