Baron Capital rolls out five active ETFs, SpaceX becomes the firm’s biggest investment

Baron Capital launched five actively managed exchange-traded funds on Monday, betting that its long-term record, including a big early investment in SpaceX, will translate into growing demand for active strategies in the ETF format.

The new funds – Baron First Princes 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 reflect the investment approaches Baron Capital has used for decades in its mutual funds and proprietary accounts.

Ron Baron, founder, CEO and president of Baron Capital, said that SpaceX, which aims for one of the largest public offerings ever, has surpassed Tesla with approximately $10 billion and has become the company’s largest investment.

SpaceX’s rapidly expanding Starlink satellite network is a key driver of its long-term investment thesis, Baron said. He added that he is also optimistic about the development of space-based data centers, suggesting that infrastructure in orbit could sharply reduce operating costs related to energy and cooling.

“Cooling is a huge cost, put them in space, there’s no cooling cost anymore,” Baron said.

Baron Capital also invested in xAI, another company founded by Elon Musk. This company could leverage the expansion of satellite networks and space-based computing to offer “but better” AI services like ChatGPT, Baron said.

Baron said the firm’s long-term performance supports the move into ETFs. He said 98% of Baron Capital’s holdings are outperforming benchmarks and about 60% are in the top 5% of funds. He noted that the Baron Partners Fund has been the best-performing US fund since 2003.

Baron added that the firm has made a profit of approximately $57 billion to date after starting with $100 million in assets in 1992 and aims to make five times this amount in the next decade.

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