Inside Baron’s RONB ETF: MSCI, Shopify, Hyatt holdings

Baron Capital’s First Principles ETF (ticker RONB) pairs holdings in high-profile companies such as Tesla and SpaceX with concentrated positions in MSCI, Shopify, Hyatt, Charles Schwab and FactSet.

Baron says the fund follows a First Principles approach that breaks complex businesses into core elements to identify secular growth opportunities protected by so-called economic moats. The firm says it looks for companies that can grow over many years and are run by management teams able to sustain those advantages.

MSCI provides benchmark indexes, risk models and data tools used by institutional investors to measure and compare market performance. Shopify operates a commerce platform that lets merchants run online and retail sales, supporting payments, storefronts and logistics integrations. Hyatt operates a global hotel network focused on higher-end customers and aims to grow through branded properties with capital-efficient models. Charles Schwab offers brokerage, custody and related services and has built scale across retail and institutional channels. FactSet supplies integrated financial data and analytics used by asset managers, investment banks and other finance professionals.

Fund managers evaluate market position, product differentiation and leadership when researching companies. When they find firms meeting their criteria, the team takes concentrated positions rather than spreading exposure thinly across many names, according to the firm.

The fund’s mix includes headline-grabbing public and private companies alongside firms the firm describes as having recurring revenue, scale advantages or customer switching costs. Baron says RONB is actively managed and aims to combine high-conviction growth ideas with investments in companies that provide infrastructure, services or platforms used across the financial system.

Baron has presented the First Principles approach at industry events and through its investor materials. The firm states it takes sizable stakes in companies when conviction is high and periodically discloses holdings through regulatory filings and fund reports.