Baron Capital is bringing its growth-first playbook to the ETF aisle. The New York-based investment manager introduced five actively managed ETFs Monday, providing investors with access to strategies traditionally offered within its mutual funds lineup. This represents another effort by Baron Capital to satisfy advisor demands for actively managed investment solutions with a more flexible structure.
In addition, the newly launched ETFs are Baron First Principles ETF (NYSE:RONB), Baron Global Durable Advantage ETF (NYSE:BCGD), Baron SMID Cap ETF (NYSE:BCSM), Baron Financials ETF (NYSE:BCFN), and Baron Technology ETF (NASDAQ:BCTK). This series offers a broad range or mix of offerings that cover U.S. or global equity, sector ETFs, and a SMID-cap (small and mid-cap) mandate.
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The company, which manages more than $44 billion in assets, further explained that their ETFs follow the same investment philosophy as their existing products, which involves concentrating on growth companies that have a competitive advantage and excellent management teams. While the structure is new, the process is not, with the ETF format offering features such as intraday trading and potential tax efficiency.
Technology is one of the themes closely associated with the launches. BCTK invests at least 80% of assets in US and non-US technology companies of varying market capitalization, including software, IT services, semiconductors, and internet retail. The fund has an investment management fee of 0.75%.
The financial sector is covered by BCFN, whose strategy is to invest in companies that provide banking, lending, insurance, capital market, payment, and asset management services. The fund charges a fee of 0.80%.
As far as international exposure is concerned, it is evident that BCGD is actively invested in developed markets, apart from some investment in emerging markets, in companies with prominent market positions along with substantial cash flow generation. Its management fee stands at 0.75%.
BCSM focuses on smaller firms and is applicable to firms that have market capitalization ranging from above $1 billion to the largest stock of the Russell Mid-cap Growth Index. The fund looks for firms that offer great growth opportunities and consists of 0.75% expenses.
RONB takes a more flexible approach, investing in U.S. growth stocks across market caps and allowing leverage of up to one-third of assets. It charges a 1.00% management fee, plus interest on borrowed funds.
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