Baron Financials ETF

Visa Inc. (V) is a leading global payment network. The company authorizes and facilitates electronic payments for consumers, merchants, and banks.
Visa benefits from consumer spending growth and the secular shift from cash to electronic payments. Most of its revenue comes from international markets, where consumer spending and the adoption rate of electronic payments are rising quickly. The company generates significant free cash flow, which is being returned to shareholders through dividends and share repurchases. We believe Visa enjoys significant competitive advantages from its well-established brand, ubiquitous merchant acceptance network, and extensive banking relationships.

Mastercard Incorporated (MA) is a leading global payment network. The company authorizes and facilitates electronic payments for consumers, merchants, and banks.
Mastercard benefits from consumer spending growth and the secular shift from cash to electronic payments. Most of its revenue comes from international markets, where consumer spending and the adoption rate of electronic payments are rising quickly. Margins should continue expanding due to operating leverage. The company generates significant free cash flow, which it uses for acquisitions and share repurchases. Mastercard's well-established brand, ubiquitous acceptance network, and extensive banking relationships are significant competitive advantages.

S&P Global Inc. (SPGI) provides credit ratings, indexes, data, and analytics to the financial, transportation, and commodities markets.
S&P Global benefits from the secular growth of rated bond issuance, the ongoing shift from active to passive investing, and growing demand for data and analytics. The company operates in oligopoly markets, where it enjoys formidable competitive advantages from strong brand awareness, high switching costs, and network effects. Excess cash flow is being used for accretive acquisitions and is being returned to shareholders through share repurchases and dividends.

Interactive Brokers Group, Inc. (IBKR) is an automated global electronic broker. The company provides low-cost execution, clearing, and settlement of trades for retail and institutional customers across multiple asset classes and currencies.
Interactive Brokers is gaining share due to its advanced technology, quality of execution, and low trading costs. We expect the company to continue growing rapidly through international expansion and as domestic RIAs depart traditional institutions to launch their own firms. Interactive Brokers' competitive advantage comes from automation through best-in-class software engineering, which enables it to offer industry-low costs to customers. Founder and Chairman Thomas Peterffy is well regarded and is the company's largest shareholder.

Bank of America Corporation

Morgan Stanley

The Charles Schwab Corporation (SCHW) is a discount brokerage firm offering securities brokerage and other financial services to individual investors directly and through independent financial advisors. The company has over $12 trillion in assets under custody.
Schwab’s emphasis on customer trust has made it a sterling brand in financial services. We believe its investor services division is well positioned to take share from traditional brokerages, while its institutional business continues to gain RIA relationships. The company has made acquisitions that have broadened its product offering and brought new customers onto the platform. As a result, we expect Schwab to retain clients while further lowering its industry-leading cost per client asset.

MSCI Inc. (MSCI) provides investment decision support tools to global investment institutions.
We believe MSCI, the de facto standard for measuring global market performance, is positioned to benefit from the continuing development of emerging markets, passive investing, sustainability, and the growth of global financial assets. We believe the company's indexes remain the global standard for cross-border investing and will continue to be selected by institutions when issuing new mandates. Both its index and multi-asset portfolio and risk analytics products are mission critical and deeply embedded in client workflows.

Moody's Corporation (MCO) provides credit ratings, financial intelligence, and analytical tools to assist businesses in making decisions.
Moody's benefits from the secular growth of bond issuance as global debt levels rise and bond markets gain share from unrated bank debt. We think the data and analytics business will generate steady growth from new sales, product upgrades, and price increases. Further, we believe margins should continue expanding due to operating leverage and efficiency initiatives. It uses excess cash flow for accretive acquisitions and share repurchases and dividends.

KKR & Co. Inc. (KKR) is one of the world's leading alternative asset managers. The company manages $744 billion in assets, with large franchises in private equity, real assets, and credit. KKR also owns a large retirement insurance company, Global Atlantic.
KKR has strong franchises in alternative asset management, having successfully diversified from its buyout roots into private equity, credit, and real assets. These strategies are in early stages of maturation, positioning KKR to raise over $300 billion from 2024 to 2026 and eventually grow assets under management to more than $1 trillion. KKR also owns an insurer, Global Atlantic, which should continue compounding as it leverages KKR's asset sourcing capabilities, driving growth in both fee and spread earnings.

Total