| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.53% | 1.77% | -14.75% |
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.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 25 2026 | 2026 Q2 | AER, AXP, BAC, CME, GWRE, IBKR, INTU, JPM, LPLA, MA, TW, V | AI Disruption, banks, Capital markets, financials, Fintech, payments, software, valuation |
IBKR MS V INTU CME TW AER |
Baron Financials ETF gained 1.82% in Q2 but trailed the index as AI infrastructure dominated market returns. Financial software and exchange operators faced disruption concerns and slower trading activity. The manager views holdings as oversold at 18x forward earnings despite stable growth. New positions in JPMorgan, Bank of America, and AerCap were initiated at attractive valuations. Favorable economic conditions support the outlook for continued earnings growth. |
| 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 |
Baron Financials ETF focuses on growth-oriented financial companies leveraging technology. Despite Q4 underperformance versus traditional financials, the fund benefits from exposure to capital markets recovery and fintech innovation. Political risks around banking regulation present near-term headwinds, but fiscal stimulus and deregulation should drive sector growth in 2026. |
| Nov 13 2025 | 2025 Q3 | COF, FDS, FICO, GWRE, HLI, HOOD, IBKR, INTU, KKR, LPLA, MA, MELI, MORN, NU, PGR, SHOP, SPGI, TW, V, VRSK | AI, Capital markets, credit, financials, Fintech, payments, technology |
HOOD IBKR SHOP CN FICO COF |
Baron FinTech Fund underperformed in Q3 amid a junk rally favoring low-quality stocks over the fund's high-quality holdings. AI concerns pressured software names like Intuit and FactSet, while Capital Markets exposure through Robinhood and Interactive Brokers provided support. The manager added Capital One for its Discover acquisition upside and remains optimistic about long-term fintech fundamentals despite near-term headwinds. |
| Aug 11 2025 | 2025 Q2 | ACGL, ACN, ALKT, CME, CWAN, FICO, FIS, GLOB, GWRE, HOOD, IBKR, INTA, INTU, KKR, KNSL, LPLA, MA, MCO, MELI, MORN, MSCI, PGR, SCHW, SPGI, TW, V, VRSK | Capital markets, E-Commerce, Financial Services, Fintech, payments, technology, volatility | - | Baron FinTech Fund gained 9.26% in Q2 2025 but trailed benchmarks due to stock selection challenges and lower exposure to high-performing Challengers. Robinhood and MercadoLibre drove gains while Fiserv and Progressive detracted. Despite market volatility from tariffs and geopolitical tensions, the manager maintains conviction in competitively advantaged fintech companies with improving economic outlook and strong IPO pipeline ahead. |
| Mar 31 2025 | 2025 Q1 | ACGL, APO, CME, FI, FICO, GLOB, GWRE, HOOD, KKR, LPLA, MA, MELI, MORN, PGR, PRI, SCHW, SPGI, SQ, TW, V | Capital markets, E-Commerce, Fintech, insurance, payments, software, trading |
MELI PGR TW KKR APO SQ HOOD TTAN |
Baron FinTech Fund outperformed in Q1 2025 through strong stock selection in payments and e-commerce, led by Visa, Mastercard, and MercadoLibre. The Fund's defensive positioning with established Leaders proved beneficial amid market volatility. While trade policy uncertainty creates near-term headwinds, the service-based portfolio remains relatively insulated from direct tariff impacts. |
| Dec 31 2024 | 2024 Q4 | ACGL, APO, FI, FICO, GWRE, HOOD, IBKR, INTU, KKR, LPLA, MA, MELI, NU, PGR, PRI, SPGI, TTAN, TW, V, WISE.L | Capital markets, Digital Banking, Financial Services, Fintech, growth, payments, software, technology | - | Baron FinTech Fund outperformed in Q4 2024 on strength from payments companies Visa and Fiserv, plus capital markets beneficiaries of the Republican election sweep including Interactive Brokers and alternative asset managers. The fund added ServiceTitan's IPO and initiated Robinhood while trimming some positions. Manager remains optimistic on secular fintech digitization trends and pro-business policy tailwinds. |
| Sep 30 2024 | 2024 Q3 | ACGL, APO, BLK, EFX, ENDV, FICO, FIS, GWRE, INTU, KKR, LPLA, MA, MELI, PGR, PRI, RPAY, SCHW, SPGI, TRU, TWFG, V | Capital markets, Financial Services, Fintech, growth, insurance, payments, software, technology |
FICO MELI GWRE TWFG PRI |
Baron FinTech Fund delivered strong Q3 performance matching its benchmark while outperforming broader markets. The fund benefits from concentrated exposure to competitively advantaged fintech companies across payments, software, insurance, and capital markets. With sixteen holdings up over 30% year-to-date, the manager continues investing in high-quality companies at the intersection of financial services and technology. |
| Jun 30 2024 | 2024 Q2 | ACGL, APO, EFX, FI, FICO, GPN, GWRE, HLI, IBKR, INTU, KKR, MA, MCO, MELI, PGR, SPGI, SQ, TW, V, VRSK, WISE.L | AI, Capital markets, Financial Services, Fintech, growth, private credit, technology | - | Baron FinTech Fund outperformed its benchmark despite trailing broader markets in Q2, benefiting from strong Capital Markets and Information Services stock selection while facing headwinds from narrow market leadership and Financials underperformance. The fund maintains conviction in secular fintech themes including private markets growth and AI integration, expecting fundamentals-driven returns as market breadth potentially improves. |
| Mar 31 2024 | 2024 Q1 | ACGL, APO, BLK, ENDV, FDS, FI, FICO, GLOB, INTA, INTU, JKHY, KINS, MA, MELI, NU, PGR, SPGI, TW, V, WEX | digital transformation, Enterprise, Financial Services, Fintech, insurance, payments, software, technology |
PGR NU APO ENDV GLOB |
Baron FinTech Fund outperformed in Q1 2024 with strong contributions from insurance, payments, and alternative asset management holdings, while IT services faced spending headwinds. The fund's diversified fintech approach and balanced interest rate exposure position it well for the ongoing multi-decade digital transformation of financial services despite near-term macro uncertainties. |
| Sep 30 2023 | 2023 Q3 | ACGL, ACN, ADYEY, APO, CME, EFX, FICO, FIS, GPN, HLI, IBKR, INTU, LPLA, MA, MELI, MKTX, MORN, MSCI, NCNO, PGR, SPGI, SQ, TW, V | Capital markets, Fintech, growth, payments, software, technology |
APO INTU CARTRADE.NS MORN ACGL |
Baron FinTech Fund outperformed significantly in Q3 2023, gaining 1.30% versus the benchmark's 6.77% decline. Strong performance from Tech-Enabled Financials and Capital Markets drove results, with Apollo and LPL benefiting from higher rates. The portfolio is defensively positioned with quality businesses. Despite macro headwinds, outlook remains optimistic given attractive valuations and improving fundamentals. |
| Jun 30 2023 | 2023 Q2 | ACN, APO, BLK, CSGP, FI, FICO, INTU, LPLA, MA, MELI, MKTX, MSCI, NU, PGR, SHOP, SPGI, TW, V | AI, Banking, Capital markets, Fintech, payments, private credit, software, technology | - | Baron FinTech Fund delivered solid 5.29% quarterly returns driven by AI enthusiasm and fintech M&A activity. The manager sees opportunities in Latin American digital banking through Nu Holdings and private credit growth via Apollo Global Management. Reduced startup funding and continued financial institution technology spending should benefit established fintech incumbents over the long term. |
| Mar 31 2023 | 2023 Q1 | ACN, APO, BILL, CME, ENDV.L, FICO, GWRE, IBKR, INTU, LPLA, MA, MELI, MKTX, MSCI, PGR, SCHW, SPGI, TW, V, WEX | AI, Banking, Financial Services, Fintech, payments, software, technology | - | Baron FinTech Fund underperformed in Q1 2023 due to banking sector turmoil affecting financial holdings and lack of mega-cap tech exposure. Manager maintains defensive positioning with focus on profitable Leaders over growth Challengers. New positions in Interactive Brokers and Apollo Global Management reflect continued conviction in competitively advantaged fintech companies despite economic headwinds. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI infrastructure buildout was the principal driver of market returns in Q2, with narrow leadership from AI winners in semiconductors and hardware storage. Financial software holdings faced pressure from AI-driven disruption fears, particularly concerns about market share losses and software disruption at companies like Intuit. The manager views AI as creating both opportunities and threats across the financial sector. |
Infrastructure Disruption Software Semiconductors Valuations |
Capital MarketsCapital Markets holdings weighed on performance due to slower trading activity amid lower market volatility and concerns about competition from crypto-related trading products. Exchange operators Tradeweb and CME faced headwinds, though the manager believes the sell-off is overdone and sees minimal risk to their dominant franchises. The sector represents 31.1% of net assets. |
Exchanges Trading Volatility Crypto Competition | |
PaymentsVisa contributed to performance with strong financial results showing 17% revenue growth and 20% EPS growth, exceeding expectations. Payment volume growth remained resilient despite Middle East conflict. Regulatory concerns that weighed on the stock earlier in the year faded. The manager continues to own Visa given its long runway for growth and significant competitive advantages. Payments represents 17.1% of net assets. |
Payment Networks Growth Regulation Visa | |
BanksBanks performed well during the quarter, rising 15.1%, though the Fund's underweight position detracted from relative performance. The manager initiated positions in JPMorgan Chase and Bank of America, viewing them as industry leaders gaining share with trusted brands and leading returns on equity. Both serve affluent consumers and businesses and are benefiting from solid economic growth and benign credit conditions. Banks represent 20.3% of net assets. |
Regional Banks Money Center Banks Credit Quality ROE | |
Aircraft LeasingThe manager initiated a position in AerCap Holdings, viewing it as an AI-proof business with steady growth, skilled management, and cheap valuation at 9 times earnings and 1.3 times book value. AerCap benefits from secular growth in global air travel and favorable supply-demand dynamics from OEM production constraints. The company is aggressively repurchasing stock and selling assets above carrying value, which is highly accretive to per-share value. |
AerCap Leasing Aviation Valuation | |
ValuationsThe Fund's holdings are valued at less than 18 times forward earnings, the lowest valuation multiple since inception in 2019. The forward earnings multiple is now 22% lower than the start of the year despite stable growth prospects. The manager believes holdings are oversold, with the 14% YTD decline driven entirely by valuation multiple compression rather than deteriorating earnings outlook. |
Multiples Compression Earnings Oversold | |
| 2025 Q4 |
AfricaFund delivered exceptional performance with 67.21% returns in 2025, significantly outperforming the 44.7% benchmark. Portfolio companies show strong fundamentals with forward PE of 6.1x, dividend yield of 8.0%, and expected EPS growth of 19.2%. Manager emphasizes that valuations remain attractive despite strong performance, with no multiple expansion occurring over the fund's 5+ year history. |
Frontier Markets Emerging Markets Equities Value Growth |
LiquidityManager provides detailed analysis of liquidity challenges in African frontier markets, noting structural factors including tight ownership by corporates (24% vs 19% in emerging markets) and limited foreign participation. However, expects liquidity to improve in current bull market environment as more investors participate. Fund offers only quarterly redemptions due to these constraints. |
Market Structure Trading Redemptions Foreign Investment | |
DividendsPortfolio projects total dividends of $5.6mn in 2026, representing a forward dividend yield of 8.0%. This high yield is highlighted as evidence of the quality businesses owned and attractive valuations available in African frontier markets. |
Income Yield Cash Flow | |
| 2025 Q3 |
FinTechThe fund focuses on competitively advantaged, growing fintech companies across all market capitalizations and geographies. Tech-Enabled Financials represented 29.3% of net assets, with the fund maintaining overweight positions in this category relative to the benchmark. |
Digital Banking Financial Technology Payment Networks Credit Cards Brokerage |
AIGenerative AI presents both opportunities and threats across portfolio holdings. While some companies face perceived AI disintermediation risks, the manager expects AI to create more opportunities than threats as companies use AI to launch new products and operate more efficiently. |
Artificial Intelligence Machine Learning Automation Data Analytics Innovation | |
Capital MarketsCapital Markets represented 16.7% of net assets, with strong performance from online brokerage firms like Robinhood and Interactive Brokers. The segment benefited from strong retail trading activity, account growth, and favorable market conditions driving trading commissions and asset-based fees. |
Trading Brokerage Asset Management Market Data Electronic Trading | |
PaymentsPayments represented 11.6% of net assets, with the fund remaining underweight relative to the benchmark. The Capital One-Discover acquisition creates a closed-loop payment network opportunity, enabling higher interchange fees and potential network monetization. |
Payment Processing Interchange Digital Payments Credit Cards Payment Networks | |
Credit StressRecent bankruptcies of automotive-related companies and concerns about broader credit cycles have emerged. While credit issues have been characterized as idiosyncratic, there is increased focus on credit quality across traditional lending and private capital markets. |
Credit Quality Bankruptcies Private Credit Lending Credit Cycles | |
| 2025 Q2 |
FinTechThe fund focuses on competitively advantaged, growing fintech companies across all market capitalizations and geographies. The portfolio is segmented into seven investment themes including Tech-Enabled Financials, Information Services, Enterprise Software, Capital Markets, Payments, E-Commerce, and Digital IT Services. The manager expects fintech companies to outperform over time due to their competitive advantages and growth prospects. |
Digital Banking Payments Financial Technology Software Automation |
Capital MarketsCapital Markets holdings performed well during the quarter, with financial services platform Robinhood and online brokerage Interactive Brokers benefiting from heightened market volatility and strong underlying performance. The fund added to CME Group, viewing it as a unique portfolio diversifier that benefits from higher trading volumes during volatile periods and has significant competitive advantages. |
Trading Exchanges Brokerage Volatility Derivatives | |
E-commerceE-commerce holdings contributed positively to performance, led by MercadoLibre which reported strong quarterly results with revenue up 37% and EPS up 44%. The company continues to gain share in Latin America with gross merchandise volume up 40% and total payment volume up 72% on a constant currency basis. The manager views MercadoLibre as a leading beneficiary of secular growth in e-commerce and digital banking in Latin America. |
Digital Commerce Latin America Marketplace Payment Volume Digital Banking | |
PaymentsPayments was a detractor during the quarter, primarily due to weakness in Fiserv which reported slower payment volume growth from its Clover product. Global payment networks Visa and Mastercard underperformed on concerns about competitive threats from stablecoins, though the manager believes such concerns are overdone and remains confident in the networks' growth prospects and competitive advantages. |
Payment Processing Networks Stablecoins Competition Volume Growth | |
AIThe fund benefited from positive AI news during the quarter, which was one of the market catalysts that helped equity markets rebound. The Magnificent Seven complex, which includes major AI beneficiaries, resumed its leadership role and appreciated more than 20% in the period, though the fund's lack of exposure to this group was a headwind to performance against the broader market. |
Artificial Intelligence Technology Innovation Growth Leadership | |
| 2025 Q1 |
PaymentsStrong performance from global payment networks Visa and Mastercard driven by accelerating payment volumes and defensive business models. Payment companies benefit from fee-based revenue tied to nominal payment volumes, providing protection against inflationary pressures. |
Visa Mastercard Payment Processing Transaction Volumes Fee Revenue |
FinTechFund maintains focus on competitively advantaged fintech companies across all market capitalizations. Holdings include online brokers like Robinhood with strong trading volumes and new product launches, and business management software providers like ServiceTitan showing strong revenue growth. |
Digital Banking Online Brokerage Business Software Financial Services Technology | |
Capital MarketsElectronic trading platforms and derivatives marketplaces benefited from robust trading activity in volatile markets. Tradeweb Markets showed strong volume trends with credit products up 39% and continued market share gains versus competitors. |
Electronic Trading Market Volatility Trading Volumes Fixed Income Derivatives | |
E-commerceMercadoLibre led performance after reporting strong quarterly results with 37% revenue growth and 44% operating income growth. The company continues posting above-market growth with gross merchandise volume up 56% and remains a prime beneficiary of secular e-commerce growth in Latin America. |
Latin America Digital Marketplace Revenue Growth Market Share Online Commerce | |
Trade PolicyHigher trade tariffs expected to increase costs, crimp profits, and temper economic growth. Trade policy uncertainty creates challenges for decision-making, though the Fund's service-based holdings are relatively insulated from direct tariff impacts on imported goods. |
Tariffs Economic Impact Policy Uncertainty Service Businesses Cost Inflation | |
| 2024 Q4 |
FinTechThe fund focuses on fintech companies at the intersection of financial services and technology, benefiting from secular trends including growing demand for data, electronification of capital markets, shift to electronic payments, rise of e-commerce, and digital transformation across financial institutions. These trends continue to drive digitization of the financial sector. |
Digital Payments Financial Technology Electronic Trading Digital Banking Payment Processing |
PaymentsStrong performance from global payment companies including Visa and Fiserv, with double-digit gains driven by robust quarterly results and positive outlook. International rollout of Clover payment platform for small businesses showing strong growth momentum with revenue growing over 25%. |
Payment Processing Digital Payments Transaction Processing Payment Platforms Merchant Services | |
Capital MarketsExcellent performance led by Interactive Brokers with 26.9% share price appreciation, driven by 30% account growth and 33% client asset growth from international investors seeking U.S. market access. Republican election sweep boosted expectations for heightened capital markets activity and more favorable regulatory environment. |
Brokerage Trading Platforms Market Access Financial Services Investment Platforms | |
E-commerceMercadoLibre faced margin pressure from temporary factors and investments for long-term growth, including credit portfolio expansion and distribution network investments. Management willing to sacrifice near-term profitability for faster growth and higher cash flow over the long term in competitive Latin American markets. |
Online Marketplace Digital Commerce Latin America Financial Services Digital Payments | |
| 2024 Q3 |
FinTechThe fund focuses on competitively advantaged, growing fintech companies across all market capitalizations and geographies. Sixteen holdings have risen more than 30% this year, representing 42% of net assets, operating across consumer credit, enterprise software, insurance, asset management, payments, and brokerage sectors. |
Financial Technology Digital Payments InsurTech WealthTech Enterprise Software |
PaymentsPayments represented 16.3% of net assets as of September 30, 2024. The fund maintains positions in leading payment processors like Mastercard and Visa, while benefiting from strength in companies like MercadoLibre which saw 86% growth in total payment volume. |
Digital Payments Payment Processing Transaction Volume Merchant Acquiring | |
Capital MarketsCapital Markets represented 9.7% of net assets, with higher exposure adding value during the quarter. The fund holds positions in companies like S&P Global and benefits from data and analytics services that support financial markets infrastructure. |
Financial Data Market Infrastructure Analytics Trading Platforms | |
E-commerceE-Commerce represented 5.6% of net assets with strength driven by MercadoLibre, which continues to grow rapidly despite its dominant position in Latin America. Commerce revenue grew 131% on a constant currency basis with 83% growth in gross merchandise value. |
Online Retail Digital Commerce Marketplace Latin America | |
| 2024 Q2 |
FinTechThe fund focuses on competitively advantaged, growing fintech companies across seven investment themes including Tech-Enabled Financials, Information Services, Payments, Enterprise Software, Capital Markets, E-Commerce, and Digital IT Services. Despite sector underperformance relative to broader markets, fintech fundamentals remain strong with mid-teens earnings growth across the fund. |
Financial Technology Digital Payments Enterprise Software Capital Markets Information Services |
Private CreditThe fund is investing in the growth of private credit in life insurance investment portfolios, where insurance companies create stable funding by selling multi-year fixed annuities and investing proceeds in highly rated private credit with higher yields. This illiquidity premium provides competitive advantages to well-managed annuity providers like Apollo and KKR's insurance subsidiaries. |
Alternative Credit Insurance Annuities Illiquidity Premium Asset Management | |
AIWhile GenAI has captured market imagination, the fund focuses on investing in strong businesses that will be improved by AI even if improvement takes time to materialize. Examples include FactSet's GenAI products for earnings analysis and Intuit's AI-powered digital assistant across product lines, though these are viewed as evolutionary rather than revolutionary advancements. |
Artificial Intelligence Machine Learning Automation Digital Transformation Software | |
Capital MarketsFavorable stock selection in Capital Markets contributed most to relative performance, with companies like Interactive Brokers benefiting from client account growth and high interest rates, while investment banks like Houlihan Lokey performed well on expectations for improved M&A activity from stabilizing rates and significant private equity dry powder. |
Investment Banking Electronic Trading M&A Activity Interest Rates Private Equity | |
| 2024 Q1 |
FinTechThe fund focuses on competitively advantaged, growing fintech companies across seven investment themes including Tech-Enabled Financials, Payments, Capital Markets, and Information Services. Digital transformation of financial services remains a large, multi-decade growth opportunity despite near-term cyclical headwinds in IT spending. |
Digital transformation Financial technology Payment processing Enterprise software Cloud-based solutions |
PaymentsPayments was a standout theme with double-digit gains from global payment companies Mastercard and Fiserv. Mastercard reported 13% revenue growth and 20% EPS growth with healthy spending volume and outsized growth in international markets and cross-border transactions. |
Payment processing Cross-border transactions Point-of-sale systems Digital payments Transaction volume | |
Capital MarketsAlternative asset manager Apollo Global Management outperformed after reporting strong financial results with 19% growth in assets under management and 27% EPS growth. Management maintained guidance for 15% to 20% growth in fee-related earnings despite dovish interest rate outlook. |
Alternative assets Asset management Fee-related earnings Private credit Capital deployment | |
AIIntapp's AI capabilities continuously improve product effectiveness and provide competitive advantages in serving professional services firms. The company's proprietary graph data model is better equipped for professional services needs than traditional databases. |
Artificial intelligence Graph data model Professional services Product effectiveness Competitive advantage | |
| 2023 Q3 |
FinTechThe fund focuses on competitively advantaged, growing fintech companies across all market capitalizations and geographies. Many fintech stocks have already gone through their own version of a recession with multiples near decade lows, but outlooks are more promising due to cost restructuring and focus on profitability. |
Financial Technology Digital Payments Software Innovation Growth |
PaymentsPerformance was bolstered by gains from Mastercard and Global Payments. Mastercard continued double-digit earnings growth with resilient payment volumes, while Global Payments benefited from better-than-expected results and market share gains. |
Digital Payments Payment Processing Transaction Volume Market Share Growth | |
Capital MarketsStock-specific strength more than offset the Fund's higher exposure to this lagging category. Tradeweb led the way as trading activity picked up following a slow start to the year, with the company poised to return to double-digit revenue growth. |
Electronic Trading Bond Trading Market Share Revenue Growth Trading Volume | |
| 2023 Q2 |
PaymentsNetwork International received takeover offers and was acquired by Brookfield for $2.8 billion. Visa announced acquisition of Brazilian company Pismo for $1 billion. M&A activity picking up in payments sector with valuations at attractive levels. |
Digital Payments Payment Processing M&A Fintech Acquisitions |
AIMarket leadership driven by excitement over artificial intelligence potential. Large technology companies gained from AI adoption expectations. Endava believes generative AI will stimulate demand for building AI tools and increase internal efficiency. |
Artificial Intelligence Technology Generative AI Software Development Efficiency | |
Capital MarketsElectronic trading platforms MarketAxess and Tradeweb impacted by slowdown in trading activity. S&P Global benefited from rebounding debt issuance and stronger equity markets. Non-financial corporate bond issuance up double digits during quarter. |
Electronic Trading Bond Markets Debt Issuance Trading Volumes Market Data | |
Private CreditTighter lending standards by banks creating opportunities for private credit providers like Apollo Global Management. Private credit has $1.3 trillion in assets under management, tripled in last 10 years, expected to exceed $2 trillion in five years. |
Alternative Lending Non-Bank Lenders Asset Management Credit Markets Growth | |
E-commerceShopify shares continued upward trajectory with solid quarterly results showing 15% growth in gross merchandise value and 25% revenue growth. Sale of capital-intensive logistics business to Flexport well received by investors. |
Digital Commerce Merchant Solutions Revenue Growth Logistics Software | |
| 2023 Q1 |
FinTechThe Fund focuses on competitively advantaged, growing fintech companies across seven investment themes including Payments, Information Services, Tech-Enabled Financials, and Enterprise Software. Private market valuations for fintech companies are starting to catch up to steep drops in public markets, with reduced private capital investment expected to temper competitive intensity and increase profitability for publicly traded incumbents. |
Payments Software Digital Financial Services Technology |
AIThe manager is monitoring the impacts of generative artificial intelligence on the fintech landscape, noting rapid advances in large language models like ChatGPT. Some holdings are already incorporating AI into operations, while others found AI-written software contained bugs and security risks. It's still very early days in AI adoption. |
Artificial Intelligence Automation ChatGPT Machine Learning | |
Capital MarketsStrength in Capital Markets was attributable to double-digit gains from market operators MarketAxess, Tradeweb Markets, and CME Group, as these businesses benefited from a pickup in trading activity. Trading activity at these companies tends to rise during periods of market volatility and economic uncertainty. |
Trading Exchanges Market Data Volatility | |
Credit StressThe sudden failures of Silicon Valley Bank and Signature Bank exacerbated market sell-off in early March, with federal regulators quickly intervening to prevent contagion. The key risk has shifted from rapid bank runs to a slower-motion credit crunch, with regional banks reporting they have already reduced lending or plan to do so soon. |
Banking Credit Regional Banks Lending | |
PaymentsPayments represented 22.1% of net assets as of March 31, 2023. The Fund has meaningful lower exposure to the lagging Payments theme relative to the Benchmark. GICS reclassified payment stocks from Information Technology to Financials during the quarter, with eight companies including Visa and Mastercard moved to Financials. |
Digital Payments Processing Transaction Electronic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | IBKR | Interactive Brokers Group, Inc. | Capital Markets | Investment Banking & Brokerage | Bull | NASDAQ | Automated Trading Platform, Capital markets, Electronic Brokerage, Equity, Margin Lending, market share gains, operating leverage, prediction markets, Retail trading | Login |
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | MS | Morgan Stanley | Capital Markets | Investment Banking & Brokerage | Bull | New York Stock Exchange | AI infrastructure, Capital markets, Dividend Growth, Equity, fee-based revenue, investment banking, return on equity, Share Buyback, wealth management | Login |
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | V | Visa Inc. | Credit Services | Transaction & Payment Processing Services | Bull | New York Stock Exchange | Competitive advantages, Equity, Global Payments, Payment Network, Payment Volume Growth, Regulatory risk, Revenue Growth, Transaction Processing | Login |
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | INTU | Intuit Inc. | Software - Application | Application Software | Neutral | NASDAQ | AI disruption, Competition, Equity, financial software, Market Share Loss, Small Business Software, tax preparation, TurboTax, workforce reduction | Login |
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | CME | CME Group, Inc. | Financial Data & Stock Exchanges | Financial Exchanges & Data | Bull | NASDAQ | CEO Succession, Competitive advantages, Crypto Competition, Derivatives Exchange, Equity, Futures, Institutional Trading, market volatility, Options | Login |
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | TW | Tradeweb Markets Inc. | Capital Markets | Financial Exchanges & Data | Bull | NASDAQ | Blockchain Competition, Capital markets, Electronic Trading, Electronification, Equity, fixed income, Institutional Trading, market volatility, network effects | Login |
| Aug 25, 2026 | Fund Letters | Baron FinTech Fund | AER | AerCap Holdings N.V. | Rental & Leasing Services | Specialized Finance | Bull | New York Stock Exchange | AI-Proof, Aircraft Leasing, Aviation, capital allocation, Equity, Hard assets, return on equity, secular growth, Share Buyback, Specialized Finance, Value | 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 |
| 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 |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | MELI | MercadoLibre, Inc. | Consumer Discretionary | Broadline Retail | Bull | NASDAQ | digital payments, e-commerce, Fintech, growth, Latin America, marketplace, network effects | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | PGR | The Progressive Corporation | Financials | Property & Casualty Insurance | Bull | NYSE | Auto Insurance, Best-in-class, defensive, market share, Property & Casualty, underwriting | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | TW | Tradeweb Markets Inc. | Financials | Financial Exchanges & Data | Bull | NASDAQ | Capital markets, Electronic Trading, Electronification, fixed income, innovation, market share, network effects | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | KKR | KKR & Co. Inc. | Financials | Asset Management & Custody Banks | Bull | NYSE | alternative assets, asset management, diversified products, Fundraising, Investment Track Record, private equity | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | APO | Apollo Global Management, Inc. | Financials | Asset Management & Custody Banks | Bull | NYSE | alternative assets, asset management, Credit Focus, Differentiated Strategy, Strong Management | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | SQ | Block, Inc. | Information Technology | Transaction & Payment Processing Services | Bull | NYSE | Cash App, Ecosystem, financial services, innovation, Point of Sale, Rule of 40, small business | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | HOOD | Robinhood Markets, Inc. | Financials | Investment Banking & Brokerage | Bull | NASDAQ | AI-Powered Tools, digital banking, Gold Subscribers, market share, Online Broker, product innovation, trading volumes | Login |
| Mar 31, 2025 | Fund Letters | Baron FinTech Fund | TTAN | ServiceTitan, Inc. | Information Technology | Application Software | Bull | NASDAQ | Business Management Software, Commercial Markets, enterprise customers, Field Service, margin expansion, private equity, SaaS | Login |
| Sep 30, 2024 | Fund Letters | Baron FinTech Fund | FICO | Fair Isaac Corporation | Software & Services | Application Software | Bull | NYSE | credit scoring, Data Analytics, FICO Scores, Financial Services Technology, Interest Rate Sensitive, Mortgage Originations, Software | Login |
| Sep 30, 2024 | Fund Letters | Baron FinTech Fund | MELI | MercadoLibre, Inc. | Consumer Discretionary | Broadline Retail | Bull | NASDAQ | Credit Business, digital payments, e-commerce, Fintech, Latin America, Logistics, market share gains, network effects | Login |
| Sep 30, 2024 | Fund Letters | Baron FinTech Fund | GWRE | Guidewire Software, Inc. | Software & Services | Application Software | Bull | NYSE | Annual Recurring Revenue, cloud transition, cross-selling, Insurance-software, market leadership, Property & Casualty, SaaS, subscription revenue | Login |
| Sep 30, 2024 | Fund Letters | Baron FinTech Fund | TWFG | TWFG, Inc. | Financials | Insurance Brokers | Bull | NASDAQ | Capital-light, Commission Revenue, founder-led, Independent Agency, insurance brokerage, IPO, M&A, market share gains, Property & Casualty | Login |
| Sep 30, 2024 | Fund Letters | Baron FinTech Fund | PRI | Primerica, Inc. | Financials | Life & Health Insurance | Bull | NYSE | asset-light, financial planning, Independent Contractors, life insurance, Middle Income, Multi-level Marketing, ROE, Share Buybacks, Term Life | Login |
| Mar 31, 2024 | Fund Letters | Baron FinTech Fund | PGR | The Progressive Corporation | Financials | Property & Casualty Insurance | Bull | NYSE | advertising, Auto Insurance, Margins, market share, Property & Casualty Insurance, Rate Increases, underwriting | Login |
| Mar 31, 2024 | Fund Letters | Baron FinTech Fund | NU | Nu Holdings Ltd. | Financials | Diversified Banks | Bull | NYSE | Customer Acquisition, digital banking, digital distribution, Emerging markets, Fintech, Latin America, market share | Login |
| Mar 31, 2024 | Fund Letters | Baron FinTech Fund | APO | Apollo Global Management, Inc. | Financials | Asset Management & Custody Banks | Bull | NYSE | alternative assets, asset management, capital deployment, fee growth, Fundraising, High Net Worth, Private Credit | Login |
| Mar 31, 2024 | Fund Letters | Baron FinTech Fund | ENDV | Endava plc | Information Technology | IT Consulting & Other Services | Bull | NYSE | Cost Restructuring, cyclical headwinds, Digital transformation, discretionary spending, Enterprise software, IT services | Login |
| Mar 31, 2024 | Fund Letters | Baron FinTech Fund | GLOB | Globant S.A. | Information Technology | IT Consulting & Other Services | Bull | NYSE | Acquisitions, digital marketing, Geographic Diversification, IT services, market share, Outsourcing, Software Development | Login |
| Sep 30, 2023 | Fund Letters | Baron FinTech Fund | APO | Apollo Global Management, Inc. | Financials | Asset Management & Custody Banks | Bull | NYSE | Alternative Asset Manager, Annuities, Banking Distress, Higher Yields, Insurance, market share gains, Private Credit | Login |
| Sep 30, 2023 | Fund Letters | Baron FinTech Fund | INTU | Intuit Inc. | Information Technology | Application Software | Bull | NASDAQ | Accounting Software, Artificial Intelligence, Higher-Value Services, market leadership, SaaS, small business, tax preparation | Login |
| Sep 30, 2023 | Fund Letters | Baron FinTech Fund | CARTRADE.NS | Tradeweb Markets Inc. | Financials | Financial Exchanges & Data | Bull | NASDAQ | corporate bonds, Electronic Trading, Electronification, fixed income, Interest Rate Trading, market share gains, network effects | Login |
| Sep 30, 2023 | Fund Letters | Baron FinTech Fund | MORN | Morningstar, Inc. | Financials | Research & Consulting Services | Bull | NASDAQ | Data Assets, financial data, Investment Research, Margin recovery, operational efficiency, Pricing power, subscription revenue | Login |
| Sep 30, 2023 | Fund Letters | Baron FinTech Fund | ACGL | Arch Capital Group Ltd. | Financials | Property & Casualty Insurance | Bull | NASDAQ | book value growth, Cycle Management, Data Analytics, Hard Market, Property & Casualty Insurance, ROE, underwriting discipline | Login |
| TICKER | COMMENTARY |
|---|---|
| INTU | Intuit Inc. is the leading provider of accounting software for small businesses and tax preparation software for individuals and tax professionals. Shares fell due to modest underperformance in the TurboTax segment, where revenue grew 7%, falling short of expectations for 8% growth. Management acknowledged volume losses among lower income filers who traded down to cheaper alternatives, fueling investor anxiety about competition and potential AI-driven disruption. Negative sentiment was further compounded by a 17% workforce reduction, which some investors interpreted as a defensive move to protect margins and a signal of demand challenges. Despite headwinds in some parts of the business, overall growth remains robust, with management expecting earnings growth of 18% this year and mid-teens growth over the coming years. |
| GWRE | Guidewire's stock declined after a handful of deals slipped from the fiscal third quarter into the fiscal fourth quarter. We believe this is purely a timing issue, with these deals having since closed in the current period. Guidewire serves as the core system of record for insurance carriers, and we expect AI will meaningfully expand the company's growth potential by enabling automation and intelligence on top of its data platform. |
| TW | Tradeweb Markets Inc. operates electronic marketplaces for trading fixed income securities. Shares gave back some of their prior quarter gains as trading activity slowed amid moderating market volatility and a pause in Middle East hostilities. Performance was further pressured by a slowdown in April, reflecting difficult comparisons against last year's elevated market activity around the Liberation Day tariffs. The share price decline also reflected a broad pullback across the financial exchange sector due to concerns over competition from new blockchain-based derivatives known as perpetual futures. We continue to own the stock given Tradeweb's strong network effects, long track record of innovation, and significant growth opportunities tied to the ongoing electronification of capital markets. |
| CME | CME Group, Inc. operates the world's largest and most diversified derivatives marketplace. Shares fell due to a slowdown in trading activity, reflecting tough comparisons against last year's tariff-driven uncertainty as well as easing market volatility following the deescalation of the U.S.-Iran conflict. This cyclical softening was exacerbated by concerns about emerging competition from crypto-native perpetual futures markets, as well as uncertainty following the announcement that long-time CEO Terry Duffy will step down next year. We believe the sell-off is overdone and see minimal risk to CME's dominant institutional franchise. We continue to own the stock because we believe CME enjoys significant competitive advantages and should benefit from the growing adoption of exchange-traded derivatives and periodic spikes in market volatility. |
| LPLA | Independent broker-dealer LPL Financial Holdings Inc. was another detractor in Capital Markets, largely due to concerns that AI-driven cash management could erode the client sweep balances that earn significant interest income for LPL. This narrative weighed on the stock even as the underlying business continued to perform well. We see little risk to LPL's cash balances, and management is exploring options to reduce the company's reliance on sweep cash revenue. Consequently, we believe the share price weakness reflects a temporary sentiment overhang rather than a deterioration in the company's growth outlook. |
| IBKR | Global electronic brokerage firm Interactive Brokers Group, Inc. contributed to performance due to continued strong growth and profitability. Client accounts increased 34% to 5.2 million, customer equity grew 40%, and margin loan balances rose 67%. Trading activity remained robust, with June daily average revenue trades increasing 53%. Given its highly automated, low-cost platform, Interactive Brokers benefits from substantial operating leverage as volume grows, supporting industry-leading margins. New opportunities, including an expanded prediction markets offering and the favorable modernization of day-trading margin rules, further extend the company's growth runway. We view Interactive Brokers as a structural share gainer in a large global market with sustainable competitive advantages from tech-enabled automation and economies of scale. |
| MS | Morgan Stanley, a leading global investment bank and wealth manager, contributed to performance on strong execution across the franchise. First quarter results exceeded expectations by a wide margin, with record fee-based flows in Wealth Management and record revenues in Institutional Securities, which includes trading and investment banking. Together, these results drove a 27% return on tangible equity. Management underscored its confidence by raising the dividend by 15% and authorizing a new share repurchase program of up to $20 billion. Morgan Stanley is also benefiting from a favorable macroeconomic environment as capital markets activity improves across corporate deal-making and trading. Among financial companies, the firm is viewed as relatively well insulated from AI-related threats and stands to benefit from the capital-raising required to fund the multi-year AI infrastructure buildout. Rather than reflecting a single strong quarter, these results demonstrate the earnings power of Morgan Stanley's integrated, fee-based business model. We retain long-term conviction in the stock. |
| V | Global payment network Visa Inc. contributed to performance in the second quarter as strong financial results helped the shares recover from weakness in the prior quarter. Revenue grew 17% and earnings per share (EPS) grew 20%, both exceeding Street expectations. Payment volume growth improved modestly and remained resilient into April despite military conflict in the Middle East. Management also raised its fiscal year guidance, which now calls for low teens revenue growth and mid-teens EPS growth. Regulatory concerns that weighed on the stock earlier in the year faded as a proposed 10% interest rate cap on credit cards and an adverse payment routing bill stalled in the legislative process. We continue to own Visa given its long runway for growth and significant competitive advantages. |
| BAC | Bank of America Corporation was a top contributor to performance for the quarter. We initiated a position in Bank of America during the quarter. Both are industry leaders gaining share in large global markets with trusted brands and leading returns on equity. Both companies serve affluent consumers and businesses and are benefiting from solid economic growth and benign credit conditions. Share price pullbacks during the quarter enabled us to purchase these dominant franchises at attractive valuations. |
| JPM | JPMorgan Chase & Co. is a top 10 holding representing 3.8% of net assets. We initiated a position in JPMorgan Chase & Co. during the quarter. Both are industry leaders gaining share in large global markets with trusted brands and leading returns on equity. Both companies serve affluent consumers and businesses and are benefiting from solid economic growth and benign credit conditions. Share price pullbacks during the quarter enabled us to purchase these dominant franchises at attractive valuations. |
| AXP | We initiated a position in American Express Company during the quarter. Both are industry leaders gaining share in large global markets with trusted brands and leading returns on equity. Both companies serve affluent consumers and businesses and are benefiting from solid economic growth and benign credit conditions. Share price pullbacks during the quarter enabled us to purchase these dominant franchises at attractive valuations. |
| AER | We initiated a position in AerCap Holdings N.V., the largest aircraft leasing company in the world. The company owns and manages over 3,100 aircraft, jet engines, and helicopters, which it leases to 300 customers worldwide. The lessor model enables airlines to avoid heavy upfront capital investment while providing the lessor predictable cash flows through long-term leases. We believe AerCap is an AI-proof business with steady growth, a skilled management team, and a cheap valuation. AerCap benefits from the secular growth of global air travel. Passenger traffic has grown 5% annually since 1990 and is expected to grow 4% annually over the next 20 years, according to Boeing. Aircraft pricing is supported by favorable supply-demand dynamics: original equipment manufacturer (OEM) production constraints and global engine shortages have tightened supply, driving strong demand for leased aircraft and spare engines. Utilization rates exceed 99% and lease extension rates are 87%. Given decade-long backlogs at Boeing and Airbus, aircraft shortages should persist into the 2030s. AerCap is the leader in a consolidating industry. It holds 9% market share of the global lessor fleet and is roughly 30% larger than its nearest competitor. The top ten firms control 60% of leased fleets globally. Lessors' share of the global aircraft market has risen sharply over the past 40 years, from 33% in 1990 to 55% in 2025. AerCap's scale as the industry leader enables it to purchase large aircraft portfolios from distressed airlines. For example, the company recently assumed Spirit Airlines' order book from Airbus at a discount during Spirit's bankruptcy process. AerCap is one of the few lessors that has the capacity to absorb a large portfolio from a distressed airline given its excess capital of over $3 billion, smaller committed order book with OEMs relative to peers, and modest leverage. Valuation looks cheap at 9 times earnings and 1.3 times book value. AerCap's business model resembles a bank's — a large asset base earning a spread between lease rents and financing costs — and therefore should be valued like one. Adjusted return on equity (ROE) in the first quarter was 19%, which is elevated compared to the 14% to 15% range in recent years. Without giving a specific target, management noted that ROE has averaged 950 basis points above the 5-year Treasury yield over the last two decades, implying roughly 14% at today's rates. Book value per share was $117 as of March 31, up 20% year over year, and likely understated given that AerCap has been selling assets above carrying value (1.9 times book value in Q1). The company has been aggressively repurchasing stock, with the share count down 11% over the prior year. Selling assets at 1.9 times book value while buying back stock at 1.3 times is highly accretive to per-share value. More broadly, in an environment where many businesses face disruption from AI, AerCap seems AI-proof due to its hard assets with low obsolescence risk. We expect AerCap to keep compounding earnings and book value per share at double-digit rates for the foreseeable future, driving a similar rate of share price appreciation over time. |
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