Baron First Principles ETF

Tesla, Inc. (TSLA) manufactures electric vehicles, including a sedan, CUV, pickup truck, and semi-truck. The company is also ramping up internal battery cell production, energy solutions, robotics offerings such as full self-driving and humanoids, and renewable energy generation and storage solutions.
We expect Tesla will continue to grow its automotive business as it benefits from the secular adoption of electric vehicles, its vertical integration, technological innovation, and cost advantage. Tesla is also leveraging its core automotive technologies to address the rapidly growing energy storage segment. In addition, Tesla's software and AI expertise is broadening the industrial opportunity to large and profitable revenue avenues that were previously locked in the legacy vehicle architecture, such as autonomous driving, robotics, insurance, and other AI use cases.

X.AI Holdings Corp. (XAICOM.R) is a private company founded by Elon Musk to develop advanced, “truth-seeking” AI models. It acquired X (formerly Twitter) to enhance data, resources, and product integration across the two companies. With a focus on rapid innovation at scale, xAI aims to lead the AI race.
With rising demand for AI-enabled solutions and products, xAI's focused strategy and innovative approach position it to become a key player in the AI space. We expect recent funding, part of which it used to build training centers, to support innovation by enhancing computational power and attracting top talent. Musk's track record in AI development and the founding team's extensive experience, in addition to unique data access, software and hardware integration, and distribution opportunities, provide a competitive edge.

Shopify Inc. (SHOP) is a cloud-based software provider offering an operating system for multi-channel commerce. The company serves over 2 million merchants that processed $292 billion of gross merchandise value (GMV) in 2024. Shopify is the second-largest e-commerce player in the U.S., as measured by GMV.
Shopify offers a scalable, end-to-end commerce platform that serves merchants of all sizes, including offline, international, and B2B businesses. Its aggregate scale, innovation, and ecosystem of partners allow merchants to run every part of their business on the Shopify platform. The company's access to real-time, transaction-level data across its merchant base strengthens its competitive position, allowing it to share the benefits of scale directly with its merchants. With less than 2% share of $25 trillion in global commerce (ex China), it has a long runway for growth.

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.

Spotify Technology S.A. (SPOT) is the world's leading music streaming service, with approximately 40% market share. The company monetizes through several tiers of subscriptions, advertising, and miscellaneous a la carte pricing. 
With over 276 million paying subscribers, Spotify has created a two-sided marketplace where creators can monetize their work and consumers can stream music. Longer term, we expect the company to grow to over 1 billion subscribers (from 696 million today) and improve margins materially through advertising, its artist promotions marketplace, audiobooks, and improved cost discipline. We expect Spotify to continually improve its value proposition through additional features like video, and monetize this value through more optimized pricing tiers like Super Premium.

Guidewire Software, Inc. (GWRE) is a leading provider of core systems software to the global property and casualty (P&C) insurance industry.
Guidewire is a small player in a vast addressable market and has been benefiting from the need for P&C insurers to upgrade 30-year-old systems. The company offers best-in-class functionality, as evidenced by its growing installed base and near-100% retention rates. The company has passed the midpoint of its cloud transition, and we expect to see accelerating revenue, expanding margins, and improving free cash flow over the next several years. We believe that recent M&A in the vertical software space supports a meaningful value creation opportunity for shareholders.

CoStar Group, Inc. (CSGP) is the leading provider of information and marketing services to the commercial real estate industry.
CoStar has built a proprietary database through data collection over a 20-year period, creating high barriers to entry. We think CoStar's suite should grow at mid-teens rates, and we believe its Loopnet marketing platform can grow even faster. The company's Apartments.com platform is the dominant multi-family internet listing service and should grow revenue by more than 20%. CoStar is starting to expand into residential, creating additional significant growth opportunities. Strong cash generation and a solid balance sheet also provide meaningful M&A optionality.

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 because of 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.

Hyatt Hotels Corporation (H) is a global hospitality company with 1,363 Hyatt-branded properties representing 326,845 keys. The company's brands include Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt Place, and Hyatt Summerfield Suite. It derives 90% of EBITDA from fees and 10% from owned assets.
We believe Hyatt has a significant opportunity to market more of its brands globally, given an undersupply of rooms across the world. Compared to peers, Hyatt has the lowest global brand penetration and the largest pipeline of unit growth. We believe its asset-light strategy and strong balance sheet, coupled with robust pricing for hotel assets, give Hyatt an opportunity to generate strong growth in earnings and cash flow, which the company could use for buybacks and tuck-in acquisitions.

Red Rock Resorts, Inc. (RRR) owns and operates 20 local casinos in Las Vegas and is in the planning stages of developing and managing a tribal casino in California. The company also controls seven gaming-entitled sites consisting of almost 600 acres in Las Vegas and 30 acres in Reno.
Red Rock operates in the improving Las Vegas locals gaming market, which is now back to previous peak levels. We think the market is attractive, given favorable fundamentals including population growth 2.7 times the national average and $20 billion in projects either in the planning stages or under development. The market also offers the lowest tax rate in the U.S., with limitations on the development of new casinos in the region. Red Rock also has the option to develop or sell its owned acreage.

Total