Investors seeking a more consistent performance profile from their large-cap growth allocation may benefit from an approach that goes beyond the market-cap-weighted approach offered by many passive funds. Baron Capital’s Baron Risk Optimized Large Cap ETF (BROL) combines the firm’s fundamental stock-picking heritage with a quantitative risk-optimization framework designed to pursue long-term capital appreciation while managing tracking error.The strategy is managed by Michael Lippert, Head of Technology Research and Portfolio Manager at Baron Capital. Lippert also co-manages Baron Technology ETF and manages Baron Opportunity Fund, which was recently recognized by Morningstar as the best-performing mutual fund of the past 25 years.Key Takeaways:
BROL combines bottom-up fundamental stock selection with a quantitative risk-optimization framework to provide active large-cap growth exposure with intentional risk characteristics*
By monitoring beta, tracking error, and other factor exposures, the ETF seeks to manage unintended factor risk so that stock selection remains the primary driver of performance
The portfolio balances growth-oriented exposure across sectors, with meaningful positions in market leaders such as Nvidia, Apple, and SpaceX
*Risk targets are subject to change as market conditions or portfolio management considerations evolve.
There can be no guarantee that these objectives will be met.
See More: Baron Capital Adds Risk-Optimized Large-Cap ETF to LineupIntegrating Fundamental Selection and Risk ControlsBROL invests primarily in U.S. large-cap growth companies, most of which are constituents of its benchmark, the S&P 500 Index. When constructing and monitoring the portfolio, the management team combines proprietary fundamental research with an ongoing quantitative risk-management process. The strategy seeks to outperform its benchmark, the S&P 500 Index, on an annualized basis over the long term while maintaining low tracking error.
The investable universe consists exclusively of U.S. equities actively researched by Baron Capital. The portfolio invests in high-quality businesses characterized by significant long-term growth opportunities, sustainable competitive advantages, strong management teams, and attractive valuations—consistent with Baron Capital’s investment approach across all strategies.
Risk management is embedded throughout the investment process to support, rather than replace, active decision-making. The portfolio manager retains final discretion over security selection and uses proprietary risk tools to inform investment decisions. The process evaluates security-specific risks and each holding’s contribution to overall portfolio characteristics. Key parameters include:
Beta: The portfolio’s sensitivity to movements in the broader equity market
Tracking error: The variability of the fund’s returns relative to its benchmark
Monitoring these and other portfolio-level metrics daily enables more informed, data-driven decisions as the manager builds or adjusts the portfolio.Portfolio Construction and Core HoldingsFrom this universe, the portfolio manager selects the companies considered most attractive for BROL and evaluates how each position affects sector, industry, and sub-industry exposures, position sizing, and broader factor characteristics. The resulting top holdings illustrate the portfolio’s balanced, growth-oriented construction.
As of August 27, 2026, holdings include technology leaders such as Nvidia, Apple, Taiwan Semiconductor, and Broadcom, several of which provide exposure to the buildout and adoption of artificial intelligence (AI). Alphabet and Amazon provide additional exposure through digital platforms and cloud infrastructure. SpaceX, Costco, Welltower, and Eli Lilly round out the fund’s top 10 holdings.
The holdings are monitored daily through a formalized risk framework that identifies when factor exposures approach or exceed defined thresholds. The tools surface potential risks for the portfolio manager’s consideration but do not execute trades automatically; all allocation decisions remain at the portfolio manager’s discretion.
Ultimately, BROL seeks long-term capital appreciation and outperformance through investment in high-quality growth businesses, while its risk-monitoring framework is intended to support a more consistent performance profile across market environments.
For investors seeking active large-cap growth exposure with a more consistent performance profile, BROL combines the best of both worlds.
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Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund and can be obtained from the Fund’s distributor, Baron Capital, Inc., by calling 1-800-99-BARON or visiting BaronCapitalGroup.com. Please read them carefully before investing.
Baron Opportunity Fund’s annualized returns for the Institutional Shares as of June 30, 2026: 1-year, 27.75%; 5-year, 11.00%; 10-year, 22.50%. As of January 28, 2026, the expense ratio of the Fund’s Institutional Shares was 1.05%.
Russell 3000 Growth Index’s annualized returns as of June 30, 2026: 1-year, 18.24%; 5-year, 13.17%; 10-year, 18.13%.
S&P 500 Index’s annualized returns as of June 30, 2026: 1-year, 22.32%; 5-year, 13.41%; 10-year, 15.51%.
Baron Risk Optimized Large Cap ETF’s cumulative return as of June 30, 2026: 1.74%. As of May 22, 2026, the annual expense ratio of the Fund’s Shares was 0.45%.
Baron Risk Optimized Large Cap ETF’s cumulative Market Price return as of June 30, 2026: 2.25%. As of May 22, 2026, the annual expense ratio of the Fund’s Shares was 0.45%.
S&P 500 Index’s cumulative return as of June 30, 2026 since the Fund’s inception (December 12, 2025): -0.14%.
The performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. The Adviser may waive or reimburse certain Fund expenses pursuant to a contract expiring on August 29,2036, unless renewed for another 11-year term and the Fund’s transfer agency expenses may be reduced by expense offsets from an unaffiliated transfer agent, without which performance would have been lower. Current performance may be lower or higher than the performance data quoted. For performance information current to the most recent month end, visit BaronCapitalGroup.com or call 1-800-99-BARON.
Risks: The Fund invests primarily in equity securities, which are subject to price fluctuations in the stock market. Growth stocks can react differently to issuer, political, market and economic developments than the market as a whole and other types of stocks. In addition, because the Fund invests primarily in large-cap company securities, it may underperform other funds during periods when the Fund’s securities are out of favor.
This information does not constitute an offer to sell or a solicitation of any offer to buy securities by anyone in any jurisdiction where it would be unlawful under the laws of that jurisdiction to make such offer or solicitation. This information is only for the intended recipient and may not be distributed to any third party.
Investors generally incur the cost of the spread between the prices at which shares are bought and sold. Buying and selling shares may result in brokerage commissions which will reduce returns.
Prior to trading in the secondary market, shares of the fund are “created” at NAV by market makers, large investors and institutions only in block-size Creation Units. Each “creator” or “Authorized Participant” enters into an authorized participant agreement with Baron Capital, Inc. Only an Authorized Participant may create or redeem Creation Units directly with the fund.
Investors buy and sell shares of ETFs at market price (not NAV) in the secondary market throughout the trading day. These shares are not individually available for purchase or redemption directly from the ETF. Baron Capital, Inc. serves as the distributor of the Creation Units for the ETFs on an agency basis. Baron Capital does not maintain a secondary market in Fund’s shares.
© 2026 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its affiliates or content providers; (2) may not be copied, adapted or distributed; (3) is not warranted to be accurate, complete or timely; and (4) does not constitute advice of any kind, whether investment, tax, legal or otherwise. User is solely responsible for ensuring that any use of this information complies with all laws, regulations and restrictions applicable to it. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
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The Top 10 Holdings for Baron Risk Optimized Large Cap ETF as of June 30th 2026: NVIDIA Corporation (7.4%), Alphabet Inc. (7.2%), Space Exploration Technologies Corp. (4.8%), Amazon.com, Inc. (4.6%), Apple Inc. (4.6%), Costco Wholesale Corporation (4.1%), Bank of America Corporation (3.4%), Broadcom Inc. (3.3%), Welltower Inc. (3.2%), Eli Lilly and Company (3.0%).
*Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk. *
The Russell 3000® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. The S&P 500 Index measures the performance of 500 widely held large-cap U.S. companies. All rights in the FTSE Russell Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. The Fund includes reinvestment of dividends, net of withholding taxes, while the Russell 3000® Growth Index and S&P 500 Index include reinvestment of dividends before taxes. Reinvestment of dividends positively impacts the performance results. The indexes are unmanaged. Index performance is not Fund performance. Investors cannot invest directly in an index.
Investment Products: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED
BAMCO, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Baron Capital, Inc. is a broker-dealer registered with the SEC and member of the Financial Industry Regulatory Authority, Inc. (FINRA).
© 2026 Baron Capital. All rights reserved.
