The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Aug 26, 2026
The Baron Financials ETF rose 1.82% in Q2 2026, underperforming the MSCI USA Financials Index which gained 8.93%, as narrow market leadership concentrated in AI infrastructure stocks overshadowed most sectors. The Fund's underweight position in Banks, which rose 15.1% and represent over 40% of the index, detracted from relative performance. Financial software and information services holdings faced pressure from AI-driven disruption fears, with Intuit and Guidewire declining on concerns about market share losses and deal timing. Capital Markets holdings including Tradeweb and CME fell on slower trading activity and competition concerns from crypto-based derivatives. The manager believes holdings are oversold, trading at less than 18 times forward earnings—the lowest multiple since inception—despite stable growth prospects. The Fund initiated positions in JPMorgan Chase, Bank of America, American Express, and AerCap Holdings at attractive valuations. With favorable economic conditions including 2% GDP growth, 4% unemployment, and accelerating bank lending, the manager expects continued earnings growth to drive favorable returns ahead.
The Baron Financials ETF invests in competitively advantaged, growing financial and financial-related companies across all market capitalizations, with a focus on Leaders (83.8% of assets) that are larger, established companies with stable growth and moderate valuations, and Challengers (15.9%) that are smaller, earlier-stage companies with higher growth rates.
The manager believes the Fund's holdings are oversold and the performance outlook is bright. The market's singular focus on AI infrastructure stocks has caused many high-quality growth companies to be ignored. The Fund's holdings trade at less than 18 times forward earnings, the lowest valuation multiple since inception, despite stable growth prospects. Economic conditions remain broadly favorable with healthy consumers and businesses, positive job growth, low unemployment, and rising wages. This steady economic backdrop should support continued earnings growth and favorable returns for the Fund.
Moderate Conviction Bullish
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