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In this episode of ETF Spotlight, Baron Capital's Ashim Mehra breaks down the Baron Technology ETF ($BCTK) and why he's buying semiconductor stocks he says have been “unfairly beaten up,” including Micron ($MU), Nvidia ($NVDA), and SiTime ($SITM). He also covers AI stocks to buy now, Spotify ($SPOT) as an AI application play, Bloom Energy ($BE), neocloud risks, the Anthropic IPO, and how $BCTK stacks up against the Nasdaq 100.
Software and IT services appear undervalued relative to 11-year averages, while other subsectors are notably overvalued. The Baron Technology ETF offers active exposure to global tech, with 38 holdings and a 0.75% expense ratio. Despite an impressive cash flow growth rate, BCTK's short track record and high fees are still unconvincing.
During earnings season, short-term market movements can test investor conviction, especially when large-cap technology companies report results that often drive sharp market movements. While these broad movements can increase uncertainty or fear of missing out, they rarely change the long-term fundamentals of a durable business.
SpaceX's $60 billion acquisition of AI startup Cursor strengthens its AI ambitions, boosts shares and puts SpaceX-heavy ETFs in focus.
Baron Technology ETF® declined roughly in line with its benchmark, the MSCI ACWI Information Technology Index. Top contributors were Lumentum Holdings Inc., Taiwan Semiconductor Manufacturing Company Limited, and Coherent Corp. Top detractors were Broadcom Inc., Amazon.com, Inc., and Tesla, Inc.
A tidal wave of conversions has siphoned an unprecedented amount of capital out of mutual funds and into the ETF wrapper. Last year's record 60 mutual-fund-to-ETF conversions in 2025 across 31 firms pushed total converted assets past $260 billion, and the past five years have now seen a grand total of 203 conversions.
Baron Capital continues to grow its active ETF lineup with today's introduction of Baron Risk Optimized Large Cap ETF™ (BROL). The ETF builds upon the firm's commitment to long-term growth investing with a targeted focus on U.S. large-cap companies that exhibit durable competitive advantages, significant growth opportunities, exceptional management teams, and compelling valuations.
Though new to the ETF market, Baron Capital is not new to investment management. The firm entered the ETF space last year, bringing its “old school active” philosophy to investors.