Baron Financials ETF

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.

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.

Intuit Inc. (INTU) is a leading provider of accounting software for small businesses and tax preparation software for individuals.
Intuit holds leading positions in two large markets: small business accounting software (QuickBooks) and individual tax preparation software (TurboTax). Both businesses benefit from durable competitive advantages driven by high switching costs and strong brand recognition. Intuit has meaningful opportunities to expand QuickBooks up-market, bundle additional services with its core accounting platform, and offer higher-value live assistance for TurboTax customers. Management targets double-digit revenue growth, supported by expanding margins and robust long-term cash flow.

LPL Financial Holdings Inc. (LPLA) is the largest independent broker-dealer in the U.S., with over $2.0 trillion in assets under management. It offers independent financial advisors the technology, brokerage services, and practice management support they need to run their own practices.
As advisors continue to break away from wirehouses, we believe LPL is an attractive home for them and will continue to win share in this market. The company is benefiting from the higher interest rate environment, as it earns interest on its assets. LPL can leverage its economies of scale to generate healthy margins and free cash flow that it can reinvest into its business. With a profitable business, good growth prospects, and favorable industry tailwinds, we believe LPL is well positioned to continue growing earnings per share at a rapid rate.

KKR & Co. Inc. (KKR) is one of the world's leading alternative asset managers. The company manages $686 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.

MercadoLibre, Inc. (MELI) is the largest e-commerce company in Latin America. The company operates the MercadoLibre e-commerce marketplace, the Mercado Pago fintech platform, and the Mercado Envios suite of shipping solutions for sellers on its platform.
MercadoLibre benefits from the emergence of two secular trends: e-commerce and digital payments. The company has a significant first-mover advantage and is investing aggressively in logistics to widen its competitive moat. Latin America is a predominantly cash-based economy with e-commerce penetration under 20%, and MercadoLibre has an attractive, asset-light marketplace business model. We believe the company's logistics network is a key competitive advantage, and we see a significant opportunity in the growth of its fintech offerings.

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 $11 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. Its institutional business has continued to gain RIA relationships. The company has made acquisitions that broaden its product offering and bring new customers onto the platform. We think Schwab is well positioned to retain clients and lower its industry-leading cost per client asset.

Fair Isaac Corporation (FICO) is a data and analytics company focused on predicting consumer behavior through resellable algorithms (FICO Scores) and software (Applications and Decision Management Software).
We believe FICO has meaningful growth opportunities across all its business lines. In FICO Scores, special pricing initiatives in business-to-business seem likely to continue. In Software, years of substantial investment are bearing fruit and should lead to notable margin expansion over the next several years. Management has a shareholder-friendly capital allocation strategy with nearly all free cash flow used for share repurchases.

Nu Holdings Ltd. (NU) is a Latin American digital bank with operations in Brazil, Mexico, and Colombia. Nu's mission is to provide consumers in Brazil and other countries in the region with better and more convenient access to financial products.
Nu is disrupting the financial services industry in Brazil via its digital distribution and intense focus on user experience, which has allowed it to reach over 90 million registered users (almost half of the adult Brazilian population) in less than 10 years. Nu is addressing the key pain points faced by retail bank clients in the region, including high fees, poor customer service, and limited access to financial products. We believe the company’s superior product offering will allow it to take share from incumbents in this massive market.

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