Baron Capital has been synonymous with a timeless strategy of active management for over 40 years — and an emphasis on long-term, high-conviction growth investing. Baron Capital co-president and portfolio manager, Michael Baron, appeared at ETF Exchange 2026 to discuss the firm’s foray into the ETF market.
The firm built a reputable brand in the private wealth and the advisor community through its $50 billion mutual fund products. 2026 marks a structural evolution for the storied manager with its entry into the ETF marketplace. However, its time-tested philosophy isn’t changing — just the wrapper.
Listening to Clients
According to Baron, the decision to enter the ETF space wasn’t about chasing a trend, but responding to client demand. Client loyalty to the Baron Capital brand, which wanted their strategies in an ETF wrapper, would eventually lead to the launch of five of their active funds.
The overall investment approach to these funds adheres to the principles established by his father, Ron Baron, in 1982. The firm avoids the short-term, shiny-object syndrome in which certain funds may hold stocks for only months. Instead, Baron maintains an “ownership mentality,” typically holding positions for four to five years. In some cases, where conviction is high, it will keep a holding for nearly a decade.
“We’re trying to do one thing extraordinarily well, and that’s long-term growth,” said Baron. “We need to find businesses with competitive advantages, and we need to find people that we like and trust… these are not nameless, faceless organizations.”
RONB: The Flagship "First Principles" ETF
Among the young roster of ETFs, the flagship fund is Baron First Principles ETF (RONB). The ticker itself is a tribute to the firm’s founder, Ron Baron, and captures the firm’s highest-conviction ideas. Two of those are Tesla and SpaceX.
Baron’s history with Elon Musk’s business ecosystem dates back almost 20 years. After performing the necessary due diligence, the firm became a long-term owner of both Tesla and SpaceX. Baron views SpaceX as a transformative utility, or in other words, the “railroad to space.” RONB is unique in that it gives investors direct access to this private giant with the structural benefits inherent in an ETF wrapper.
However, Baron is quick to note that the portfolio isn’t just about names that are headline-grabbers. RONB also maintains exposure to real assets and financials to provide ballast during volatile markets, such as the current one. Additionally, the portfolio is diversified with durable-growth names such as IDEXX Laboratories, a leader in pet diagnostics.
Active Management’s "Moment"
In an ever-evolving ETF industry, the lines between active and passive continue to blur. However, despite the flood of active ETFs hitting the market, Baron sees a massive void for “true” active management — the kind that produces significant alpha through certain characteristics.
“Very little is active in a way that we define active—high active share, real stock picking, and constructing portfolios,” said Baron.
With 96% of Baron’s strategies historically exceeding their benchmarks, the firm is confident that its traditional approach, which focuses on research rigor, is exactly what the modern ETF investor needs. As the firm looks to the future of the industry, the goal is clear: using the ETF structure to bring Baron’s differentiated growth engine to a new generation of investors. More importantly, the prime objective is to never lose sight of the first principles that anchor the firm.
To learn more about the active ETFs offered by Baron Capital, click here.
For more news, information, and analysis, visit the Market Insights Content Hub.
