| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.2% | -2.2% | 0.9% |
Baron Financials ETF declined 2.22% in Q4 2025, outperforming the FinTech Index but trailing the Financials Index. The fund maintains its growth approach to investing in financial and financial-related companies that leverage technology and data to serve customers and achieve above-average growth rates. Key contributors included Fair Isaac Corporation, which reported strong results and launched a new mortgage lending program, and S&P Global, which benefited from elevated debt issuance and rising equity markets. Detractors included Robinhood Markets, which saw softening cryptocurrency trading volumes, and MercadoLibre, facing competitive pressure in Brazil. The fund added Morgan Stanley during the quarter, attracted by its diversified wealth management platform. Looking ahead, the manager remains optimistic about 2026, citing tailwinds from fiscal stimulus, banking deregulation, and improving capital markets activity. Key risks include political developments around credit card rate caps and trade tensions. The portfolio maintains overweight positions in Capital Markets, Information Services, and Payments while being underweight Banks and Insurance.
The fund takes a growth approach to investing in financial and financial-related companies that use technology and data to better serve customers and grow at above-average rates within the large, global market for financial services.
We remain optimistic about the outlook for the financial sector and our holdings. The macroeconomic environment is generally healthy and supportive of growth. 2026 starts with the tailwinds of constructive fiscal policy and easier monetary policy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 18 2026 | 2025 Q4 | APO, COF, CWAN, FI, FICO, GWRE, HLI, HOOD, IBKR, INTU, JKHY, KKR, LPLA, MA, MELI, MS, NU, SCHW, SHOP, SPGI, V | AI, Banking, Capital markets, crypto, financials, Fintech, growth, technology |
SPGI JKHY FICO HOOD MELI GWRE MS NEPT |
Capital markets are wide open with elevated levels of debt issuance, equity offerings, and M&A volumes. Falling interest rates, rising equity prices, and improving corporate… |
| Nov 13 2025 | 2025 Q3 | COF, FDS, FICO, HOOD, IBKR, LPLA, MORN, SHOP, TW, VRSK | AI, analytics, Data, Fintech, software |
HOOD IBKR SHOP CN FICO COF |
AI optimism fueled equity strength, shaping valuations, sector rotations, and risk appetite across fintech and software. Managers highlighted both perceived AI threats to incumbents and… |
| Aug 11 2025 | 2025 Q2 | ATEG, CME, CWAN, FI, HOOD, INTU, MELI, PGR, SCHW | Digital payments, Financial Services, Fintech, innovation, Platforms | - | The letter discusses long-term growth in financial technology driven by digitization of payments, capital markets, and financial services. Market volatility has favored challengers and innovative… |
| Mar 31 2025 | 2025 Q1 | APO, GWRE, HOOD, KKR, MA, MELI, NOW, PGR, TW, XYZ | - | - | - |
| Dec 31 2024 | 2024 Q4 | ACGL, APO, HOOD, IBKR, LPLA, MELI, NU, WISE LN | - | - | - |
| Sep 30 2024 | 2024 Q3 | - | - | - | - |
| Jun 30 2024 | 2024 Q2 | - | - | - | - |
| Mar 31 2024 | 2024 Q1 | - | - | - | - |
| Sep 30 2023 | 2023 Q3 | - | - | - | - |
| Jun 30 2023 | 2023 Q2 | - | - | - | - |
| Mar 31 2023 | 2023 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Capital MarketsExchanges operate as essential high-margin toll roads for the economy with immense operating leverage. They benefit from trading volume flowing directly to profits with minimal extra cost and have natural inflation hedging through transaction values. |
Exchanges Nasdaq CBOE Trading Fees Market Data | |
CryptoFund focuses exclusively on Bitcoin accumulation through disciplined cycle-aware positioning. Manager shifted to defensive posture in Q3 anticipating correction, ending Q4 with two-thirds Bitcoin and one-third cash. Going forward, fund will hold only Bitcoin based on data showing altcoins have terrible odds with only 1-in-70 beating Bitcoin historically. |
Bitcoin Altcoins Cycles Accumulation Volatility | |
FinTechThe fund continues its growth approach to investing in financial and financial-related companies, including payment businesses, financial exchanges, and data providers that enable financial transactions. The common denominator across all holdings is the use of technology and data to better serve customers and grow at above-average rates. |
Payments Digital Banking Financial Technology Data Analytics Financial Software | |
MortgageFalling interest rates and federal support for housing should drive a continued rebound in mortgage origination volumes, which should benefit mortgage originators and credit bureaus. FICO launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
Mortgage Origination Housing Credit Scoring Lending Real Estate | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
| 2025 Q2 |
FinTechThe fund continues its growth approach to investing in financial and financial-related companies, including payment businesses, financial exchanges, and data providers that enable financial transactions. The common denominator across all holdings is the use of technology and data to better serve customers and grow at above-average rates. |
Payments Digital Banking Financial Technology Data Analytics Financial Software |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 13, 2025 | Fund Letters | Josh Saltman | HOOD | Robinhood Markets, Inc. | Financials | Investment Banking & Brokerage | Bull | NASDAQ | Brokerage, Engagement, Fintech, growth, Margins, monetization, Options, Regulation | Login |
| Nov 13, 2025 | Fund Letters | Josh Saltman | IBKR | Interactive Brokers Group, Inc. | Financials | Investment Banking & Brokerage | Bull | NASDAQ | Brokerage, Derivatives, Execution, Fintech, Global, Interest, Margins, Scalability | Login |
| Nov 13, 2025 | Fund Letters | Josh Saltman | SHOP CN | Shopify Inc. | Information Technology | E-commerce platforms | Bull | TSX | ecommerce, Fintech, Logistics, operating leverage, Payments, platform, Software, Subscriptions | Login |
| Nov 13, 2025 | Fund Letters | Josh Saltman | FICO | Fair Isaac Corporation | Information Technology | Credit scoring & decision analytics software | Bull | NYSE | analytics, buybacks, Credit, Moats, Pricing power, Regulation, Scoring, Software | Login |
| Nov 13, 2025 | Fund Letters | Josh Saltman | COF | Capital One Financial Corporation | Financials | Credit card & consumer lending | Bull | NYSE | buybacks, Capital, consumer finance, credit cards, Cycle, Data, Lending, underwriting | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | SPGI | S&P Global Inc. | Financials | Financial Exchanges & Data | Bull | New York Stock Exchange | Data, Issuance, Margins, oligopoly, Ratings | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | JKHY | Jack Henry & Associates, Inc. | Financials | Transaction & Payment Processing Services | Bull | NASDAQ | Automation, Core banking, Margins, market share, recurring revenue | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | FICO | Fair Isaac Corporation | Information Technology | Application Software | Bull | New York Stock Exchange | analytics, credit scoring, Licensing, Mortgage, Pricing power | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | HOOD | Robinhood Markets, Inc. | Financials | Investment Banking & Brokerage | Bull | NASDAQ | Crypto, Engagement, monetization, platform, Retail trading | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | MELI | MercadoLibre, Inc. | Consumer Discretionary | Broadline Retail | Bull | NASDAQ | Competition, ecommerce, Ecosystem, Fintech, Latin America | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | GWRE | Guidewire Software, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | ARR, cloud migration, Insurance-software, Margins, TAM | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | MS | Morgan Stanley | Financials | Investment Banking & Brokerage | Bull | New York Stock Exchange | capital return, diversification, Net Inflows, ROE, wealth management | Login |
| Feb 18, 2026 | Fund Letters | Josh Saltman | NEPT | Neptune Insurance Holdings Inc. | Financials | Property & Casualty Insurance | Bull | New York Stock Exchange | Capital-light, Flood Insurance, Mga, Regulation, underwriting | Login |
| TICKER | COMMENTARY |
|---|---|
| APO | The decision to add to Apollo was driven by a pronounced valuation disconnect as the stock experienced a peak-to-trough drawdown of approximately 30% from its 2025 highs. Apollo retains a core position in the portfolio with our conviction in its key credit franchise. |
| COF | We added to Capital One Financial Corporation, which was a core new addition in the prior quarter. |
| CWAN | With Clearwater, the market was overly focused on the debt and large acquisitions while missing how core Clearwater was growing strongly still and had a tailwind from rate cuts. Clearwater Analytics ended getting bought out and would've netted me a large gain but in the meantime due to the size of the position I took and the options leverage, the weak performance was causing me to question my conviction until I decided to sell my position for a 30% loss, 2 weeks before the buyout news came through. |
| FI | Notable detractors from performance came from Fiserv (-43bps absolute and -39bps relative) |
| FICO | Fair Isaac Corporation (FICO), a data and analytics company focused on predicting consumer behavior, contributed to performance. FICO reported strong quarterly financial results and solid fiscal 2026 guidance, which calls for 28% EPS growth. The company also launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
| GWRE | Shares of P&C insurance software vendor Guidewire Software, Inc. declined during the quarter following strong gains earlier in the year, as the broader software sector came under pressure. After a multi-year transition period, we think Guidewire's cloud migration is largely complete. We believe cloud will be the sole path forward, with annual recurring revenue benefiting from new customer wins and migrations of existing customers to InsuranceSuite Cloud. |
| HLI | global investment bank Houlihan Lokey, Inc. presented a drag in Financials. |
| HOOD | Robinhood Markets, Inc. is a digital brokerage platform serving retail investors. Shares detracted during the quarter following robust performance over the first nine months of the year. While overall activity levels remain strong, Robinhood experienced some softening in customer engagement in November, with cryptocurrency trading volumes in particular declining on both a month-over-month and year-over-year basis. |
| IBKR | Interactive Brokers saw weakness amid interest-rate uncertainty. |
| INTU | ServiceNow (NOW) and Intuit (INTU) exemplify this dynamic, advancing meaningful AI initiatives that enhance customer value and deepen competitive advantages. Intuit is deploying intelligent agents and conversational tools like 'Ask Anything' to simplify complex financial tasks across QuickBooks and TurboTax. |
| JKHY | Jack Henry & Associates, Inc. is a leading provider of technology solutions for community banks and credit unions. Shares rose after the company reported better-than-expected quarterly results and raised financial guidance. Adjusted revenue grew 9% and earnings per share increased 21% in the quarter, reflecting a favorable demand environment, market share gains, and strong margin expansion. |
| KKR | Over the prior two years, KKR was one of the Fund's strongest contributors. From the end of 2022 through the end of 2024, the shares more than tripled, rising roughly 80% in 2023 and another 80% in 2024, as the market began to recognize the earnings power of its asset-management and insurance platforms. This year, the stock told a different story: in 2025 it was down about 13% and was roughly 23% below its January peak. Strip away the stock-price swings, and the business itself has continued to grow. Fee-related earnings, insurance earnings, and long-dated capital have all moved higher, even as market sentiment toward rates, credit, and capital flows into alternatives has become more cautious. |
| LPLA | Additionally, a position in the leading US independent broker-dealer LPL Financial was established. LPL is well positioned to benefit from the ongoing shift toward fee-based wealth management and greater adviser independence. The company has delivered impressive organic revenue growth over time, targeting the 7–13% range, reflecting strong advisor recruitment and the firm's ongoing ability to attract advisers who are switching platforms. This momentum has translated into consistent net new asset inflows and robust revenue growth, while technology investments continue to enhance their platform stickiness and operating leverage. Although LPL does possess interest rate sensitivity through its cash sweep program, which is a meaningful earnings contributor, we are comfortable that consensus and buyside expectations already embed a prudent buffer for interest rate cuts through to 2027. Trading at a reasonable valuation relative to its growth profile and capital return potential, LPL offers a compelling risk-reward profile and exposure to structural tailwinds in wealth management. |
| MA | The enduring appeal of card payments is their universality. Consumers trust that Visa and Mastercard will be accepted globally. After more than 20 years of litigation, Visa and Mastercard agreed to yet another settlement that gives merchants greater flexibility |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| MS | During the quarter, the Fund invested in Morgan Stanley, a leading global investment bank and wealth management firm. Morgan Stanley has successfully diversified its business beyond cyclical banking and trading fees into more recurring wealth and investment management. These businesses collectively oversee $9.3 trillion in client assets that generate predictable, capital-light revenue that grows from inflows and market appreciation. |
| NU | Since our mid-year update, Nubank's shares increased 37%, bringing full-year performance to +63%. This performance has been driven primarily by fundamentals, with earnings growing approximately 42% over the same period. Brazil remains a powerful profit engine, with high customer engagement, improving risk-adjusted returns, and expanding penetration across consumer and SME banking. Mexico continues to emerge as the next major growth vector: customer penetration has reached ~14% of the population. |
| SCHW | We also added to The Charles Schwab Corporation, which is benefiting from positive earnings revisions, expanding margins, and higher capital returns after having repaid nearly all of its high cost funding. |
| SHOP | Shopify Inc. is a cloud-based software provider for multi-channel commerce. Shares rose 8.3% in the fourth quarter, finishing 2025 up 51.1% on strong financial results that outperformed Street expectations. The company is demonstrating rapid growth at scale with gross merchandise value (GMV) and revenues each growing over 30% year-on-year. |
| SPGI | Leading rating agency and data provider S&P Global Inc. contributed to performance. Shares rebounded from a pullback in September that stemmed from a competitor's cautious commentary around market demand and margins. S&P Global alleviated these concerns by delivering strong third quarter results and raising its full-year financial guidance. |
| V | There were companies there such as Visa, which we own, as well as many we do not, and which would not likely be appropriate for this mandate. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
