Matt Camuso, Baron Capital

Five and a three-year-old, luckily, it's starting to be a little bit more golf as both my kids have taken up dad's passion. So we're making our way to the golf course more and more, which really is just so exciting to see your kids kind of do something you've enjoyed doing for so long, as well as officially the wiffle ball coach for my son's five-year-old wiffle ball team practice yesterday. Happy to report no injuries just yet, but they keep me busy outside of work, and honestly, I wouldn't have it any other way. So getting more into sports, which is fun, but anything out of work revolves around family, and very lucky for that. You're getting to that age, at least with your five-year-old, like six and seven,

They really start to pick it up. I was with both of my little ones at the driving range yesterday. My son's four, my daughter's nine, and I think she hits it better than my wife now, which makes me very, very proud. There is a pride factor to it. I think Cameron, my five-year-old, is better at getting out of a bunker all of a sudden than I am. But that's been something I've taken a big interest in, is introducing them to the game. And sometimes they want to go play in the sand. I said, fine. And now he's an expert bunker player. So it's working out all of a sudden. So if the ETF thing doesn't work out, I think I'm going to fall back on caddying if he keeps his trajectory up.

That's great. Well, good luck with it. It's a wonderful thing, especially when your kids like to be out there and just have a good time. We always afterwards grab a... Well, I'm having what I call a golf drink when we hang out, and it's a fun way to spend a Saturday or Sunday afternoon. Absolutely. So let's talk about Barron Capital. We all know Ron Barron founded the firm in 1982. Don't quote me on this number, but the last number I looked, it's like $47 billion across 20-some strategies. So for listeners who know the Barron name from mutual funds but haven't really followed the ETF launches, can you give us a high level really on who Barron Capital is and what the investment philosophy really looks like as a whole?

Of course. So the first introduction I've had to Barron Capital, I think, is great for everyone to hear. the investment philosophy from start to finish focuses around long-term investing. So we are bottoms-up, fundamental, research-driven, active managers that focus on growth companies. We like to say, identifying the growth part is the easiest part. It's finding those companies that we can invest alongside in really with that ownership mentality where we can own three to five years, double our investment. If you look at the average holding period across the company, it is actually much longer than that three to five-year period. So I think that's something that differentiates us right off the bat. It's that time spent before making an investment, getting to know the company, the people running it, building that trust,

Having that shared vision of where the company can go from today into the future. And we do that and we make that commitment of our clients' capital. Again, with that ownership mentality, it is a continued process of engaging with that company, getting updates. We like to say, we're not activist investors, but a lot of companies are asking us for feedback on what they're planning to do. So a lot of us, especially as of later seeing these more quantitative or systematic strategies, of course, in ETF, it's a big passive market share right now. Active is starting to pick up. So those ETF investors that have never heard of us, I always start with, this is traditional person-to-person company engagement, due diligence for a very long

Period of time, getting comfortable so we can make that investment for the long term. And that's what you've seen since 1982 when Ron founded the firm on this investment philosophy. It's at the heart of all of our analysts and investors or PMs today. And we're very happy to share that not only is it a long track record, it's a long track record, it's a long track record of success. So if you look at 96% of our funds AUM have outperformed their benchmarks since inception. So I think that number right there speaks for itself for having that conviction, but also that consistency from an overall investment philosophy standpoint. Yeah. And so jumping ahead here a little bit, that investment philosophy is what I believe you guys call over there old school active. You said you love the label. So you're doing things the old

Fashioned way, but really getting intimate with these companies, knowing your investment rather than just kind of running a screen or a factor-based tilt and kind of holding on and hoping. That's exactly right. And I think you see it even from our analysts that first joined our company. There is a contagious kind of effect for what Ron has built here. So of course, Ron started the firm. We're extremely proud of all of the success that he's had, but it's that culture that he's created and curated internally that I think from our most seasoned PMs to our newer analysts really have adopted because of that success. And it's not just something we say. if you were to go to our office right now, I would like to bet there's a company in there

Sitting in our conference rooms waiting to engage with us. Again, that's from existing investments, but also for those that we might be looking to invest in, and that's both public and private. So I think our ownership mentality and our longer term investment philosophy has really granted us access to a lot of companies, even pre-IPO, because they know we're going to be investors for the long term. They know we bring that commitment to their business. So you see it day in and day out. And from my experience, again, from a kind of passive upbringing and bringing large asset managers into the ETF space, both from an active and passive standpoint, I've seen some of this. I've never seen it to this magnitude of this level of due diligence and company engagement. And

Again, it comes from Ron. What I love most about it, Brad, is you can tell it's that real kind of personal connection. It's being able to look across the company to founder, building that trust alongside them that allows us to have this kind of higher conviction and longer term investment time cycle, if you will. So going back now to December of 2025, Barron, you guys launched five ETFs and have added more since. So what was the decision to move into the ETF wrapper after 40 plus years as a mutual fund? So I would start with, I'm very happy they made the decision because it allowed me to join the firm. But outside of that, so if you hear Michael Barron speak about this, I think just articulates it so

Well. This is not something that one day they woke up and said, this is what we're going to do. This was years of deliberation. And really, I think twofold in terms of the decision. The first was responding to existing shareholder feedback. So clients that are maybe a little bit more tax sensitive saying, we want to continue using you. We've found so much value in your approach and your active style, but we just would like to see you in a different wrapper. And clearly that active ETF bringing a tax efficiency benefit. But the second we've seen in terms of to date actually coming to life is this opportunity to attract net new clients to Barron Capital. So those investors that have just long used the ETF wrapper, they're starting to adopt more active management with

Inside their model portfolios or just their overall business. So they've never had the opportunity to invest with us in this kind of gateway of offering ETFs allows them to come into the firm. So both from a servicing existing shareholder, and I think net new growth or this next phase of growth here at Barron Capital was the decision to launch, like you said, our initial five back in December. And very proud to say we now have six and soon to be a seventh, hopefully later this month as well, as a real commitment to the ETF business. Seeing a lot of net new entrance to ETFs. But some of this is just quickly changing a wrapper of maybe a strategy that hasn't seen adoption or starting with one or two. These are traditional true Barron portfolios.

And I hope this signals to the street and your listeners specifically, we are committed for the long term, just like we do in investing here to our ETF business as well. Let's talk about one of those ETFs. We'll get into BCTK, which is the Barron Technology ETF. It's actively managed about 40 holdings at a very high level. Matt, what is this fund trying to call? So the portfolio is managed by Mike Lippert and Asha Mira. So co-portfolio managers. Mike is the head of technology research here at Barron Capital. He's also the portfolio manager for our Barron Opportunity Fund. Quick anecdote, Mike just won the best performing mutual fund in the past 25 years for Morningstar with the Barron Opportunity Fund. So also managing this strategy. If you look at

The technology ETF from a high level, it's looking to invest in companies that will provide durable growth. They are a part of the advancement, development, or overall use of technology. So of course, by naming convention aside, it is very tech heavy, about 60 or so percent in the technology sector. But it's not only technology. It can be an industry such as industrials or consumer services and discretionary, as well as energy that are helping with that advancement or development of technology. Like you mentioned, about 40 holdings, so fairly concentrated. That's like I said, everything we do here at Barron Capital, you can see that higher conviction, high active share type approach. The only other thing I'd mention that I think is important for listeners is, especially those maybe invested in passive, so like a Nasdaq 100 type exposure,

This portfolio is going to bring a broader opportunity set. So it is an all cap portfolio, and it also is a global universe as well. So the fund can invest up to 35% of its investments outside of the United States. Right now, we're at about 20%. 20% and can invest again, all cap. So about 26% of BCTK is in that small and mid cap space. So those using again, maybe a passive exposure for innovation or technology, this can be a great complement to that because it's going to bring both market cap diversification, global diversification, as well as again, from very experienced portfolio managers and analysts, a very high conviction approach. Yeah. And so you kind of walked me into my next question, which is, the top holdings looking at it are primarily, your usual suspects,

But you've only got 69% active share relative to Nasdaq 100. So can you maybe go a little bit deeper? Like where does that differentiation actually show up rather than just someone going out and buying? So again, like I said, just at a high level, it would be that kind of small and mid cap exposure, which just by index design, the Nasdaq 100 is not going to give you. A couple of names that I think are really interesting and timely. One would be Coherent. So Coherent is an optical networking company. Think of this as the kind of evolution and growth of data centers, needing that optical networking to connect the racks within data centers. That has been a phenomenal investment for us. We also own Lumentum, which is another optical

Networking company. I think actually today, the 18th is when Lumentum is going to go into the Nasdaq 100. That company is up over 160% year to date. So although might go into the index now, it's having that flexibility, A, from a kind of universe standpoint. So the ability to invest, but also having this kind of expertise to identify these companies at earlier stages that can go into a solution like BCTK relative to just, kind of that bigger, passive index. I was going to say, we talk about like this gigantic universe and, there's a lot of opportunities given the fact that like you're even on the underlying of what is even serving tech. So I guess my question is, where do you start to decide kind of what gets in,

What stays out? Can you go a little bit deeper if you could in portfolio construction, because you've got a massive... Sure. Everything starts like we do at Barron from, again, that kind of long-term investment view. So looking at our analysts and saying, across the opportunity set, what are those companies that are exuding that earnings growth? So that kind of durable earnings growth that we want to see? And what companies have that competitive advantage that can't be replicated by their peers? So once we have that list, we kind of have our starting point. And that's where you're starting to have that kind of, again, human to human interaction, like I mentioned earlier. Meeting with the investment team, management teams, with our investment teams across the firm,

Going to visit on site these companies to really build that thesis. We like to say, break every part of the company down to its simplest pieces and try and put it back together. Ron loves to tell all of our analysts and PMs, right? Question everything. So on earnings calls, you'll notice most of our analysts and PMs are the one asking all the questions because of this philosophy. But once we have those opportunities identified, it's again, that kind of heavy person to person, human interaction, due diligence. Like I mentioned before too, this is not just for publicly listed companies. So we just took an investment in Cerebris, which is an IPO from last week. We've been engaging with that company, for months and months and months pre-IPO. That's another differentiator, again,

From that broader universe. You're going to get with a BCTK that again, just for index rules alone, you can't get with something like a Nasdaq 100 exposure. Yeah. I want to talk about that a little bit later, but while we're kind of like staying on the portfolio concentration, like AI, obviously everybody's talking about AI. So you've talked about how BTC or BCTK can capture this AI value chain globally across many different sectors. What does that actually mean in practice? And you just mentioned one, but how are you, what are you finding in names that are just outside that like pure large? I think so. And it's also companies that are maybe using AI to their benefits. So I'll mention another company, Axon. Axon makes devices. So we'll focus specifically on body cameras for police

Departments. So within municipalities that also leads, I think, to this portfolio construction theme that I'll get to in a second, but Axon using, creating body cameras and drones, actually using AI to their advantage. So of course we have to have police reports after an incident. So what Axon has done is within the body camera footage, having AI actually auto-generate these police reports, saves time, accuracy, et cetera. Of course, police officers, I'm sure love it as well. It's a pretty arduous part of the job. So using that to kind of differentiate themselves and compete within their industry. But since these are obviously funded by municipalities, potentially the opportunity for Axon to bring a lower beta to something that's a higher flying beta or this more disruptive idea. And so we spend a lot of times in terms of portfolio construction,

When we have a name that fits our theme of, kind of advancements, development, or overall use of technology, bringing it into the portfolio. Well, what is this kind of intra portfolio or intra name diversification opportunity? So those lower beta, kind of maybe more less cyclical type names like Axon also have diversification benefits. So it is, a high growth portfolio, but also looking to bring balance where we can with unique opportunities like Axon. So I have to ask, since you brought it up, about Ron B, it's the Barron first principles ETF. It made headlines because it holds SpaceX directly. And at one point it was over like 20% of the portfolio. We don't need to talk about Ron Barron's like personal worth on it, but I think

He's done pretty well on his SpaceX trade. How much has that SpaceX story helped like the broader Barron ETF brand by kind of being an innovator in that sense? Immensely. We're extremely lucky to have it. We have talked a lot about it. So I kind of joke when people bring it up like, oh, I had no idea, right? That we have that because it's what everyone wants to talk about. But I think rightfully so. A couple of things that I love from an ETF perspective. Number one, to your point, it's given us a lot of brand momentum starting out as a new issuer. So we're very proud to say we're approaching 800 million in assets in our management having just launched in December. I think this has a little bit to do with that, but just the overall exposure. But I also

Love that it hits to the ETF core, right? The ETF as a vehicle from its even earlier days to today has been known as a democratization of access opportunity, right? And I think offering SpaceX through the ETF is just yet another one of those examples where no matter who you are as an investor, you could get access through our ETF because we made the decision to innovate and offer this within a publicly traded vehicle. So we're obviously very excited about the opportunity, both from an overall solution standpoint, but what it's done for our ETFs. And we always like to remind folks that SpaceX is a very popular holding. Again, we're proud of the holding, but it's one of just very many with inside both Ron B, but also across our complex. And

It's because of that question, everything, high conviction, high engagement that we're able to find this opportunity. And we're excited for this and the other holdings that we have across the firm for the prospects of growth into the future. So as you mentioned, Barron now has six active ETFs. I'm not going to list them all. It'll be alphabet soup. But for you, Matt, in your seat, what is the distribution strategy? You guys have had an immense amount of success super early on. What is that distribution strategy as you look forward? How are you getting these in front of advisors? So really, we take the approach of, we call it the rented model, right? So we're using everything across Barron that we've done for mutual funds for our ETF business. So marketing,

Distribution, et cetera. So really giving our sales folks to speak specifically on distribution, the opportunity to represent not only mutual funds now, but ETFs, SMAs, CITs, and UCEDS. So really just broadening our wrapper choice. What we're also seeing and we're focusing on is again, this kind of historical ETF user as they're using more active ETFs to complement their maybe core exposures that might be passive. We spent a lot of time with this group of clients and we're thrilled with the receptivity that we've seen. Again, the brand has been well known. They just haven't had an access point. So now they do through our ETF business. But as we're using it as this kind of core satellite, so the active ETF being the satellite, our strategies just by design bring a real opportunity here because of that conviction,

Because of that kind of high active share nature, we can be a really nice complement to something in the core. We're talking about BCTK and we've had a lot of conversations relative to a Nasdaq 100 exposure because of what we just mentioned earlier, this kind of SMID opportunity. So small and mid-cap cap diversification as well as international diversification. And we're seeing these investors vote with their feet and starting to use these ETFs alongside again, others that they've used for a very long time in the passive space with inside models. And I think that is going to be the approach that we take today and going into the future. Right into the next question, which is how would you see an advisor using it? And you answered it kind of perfectly there. I saw the same thing. This to me,

BCTK to me seems like a perfect bolt-on sidecar to your existing QQQ exposure and just allowing some of that active share to help generate excess return and also get that diversification benefit, which I don't think a lot of times people appreciate or look deep enough into these funds to know that they're getting things that they just can't get from a pure passive index perspective. And the other part I love about ETFs is the transparency. You can pull up the holdings today and see exactly what that can bring relative to something else you might own. Hopefully, it's in an ETF and you get daily transparency across both vehicles or both exposures.

We do tend to be obviously as a growth investor, leaning a little bit higher from a tracking error perspective. And so we've worked a lot with clients and would love to engage with the audience if and when they see fit on looking at your existing model and giving you some hypotheticals of how these things can fit with inside your other core holding. So we actually have a piece that's called a differentiated way to access technology, where we look at BCTK relative to the Nasdaq 100 as a compliment of 25%, 50%, or 75% kind of peeled off from that exposure. So again, the transparency that wrapper helps with that and understanding, okay, what is this going to do from a diversification opportunity? And I think the more examples

We can show in terms of something like Cerebris or Coherent or Lumentum that just aren't owned in the index. And as a compliment to that exposure, what this can bring from a potential total return or alpha opportunity, of course, we welcome those conversations. So you've got six, you talked about a seventh. How do you guys continue to think about growing the family? I doubt you're going to take the Corgi approach and launch 40 in a day. Is it going to be methodical, thought through, or do you already kind of have a roadmap of what the next 18 months is going to look like as far as issues? Brad, it's like you work here already. You took the words out of my mouth. Methodical

And thought through. That has been the approach we've taken in everything we do here. Our ETF business and launching it was absolutely along that same approach. Our COO, Pat Patalino, says it great. We take a very thoughtful and methodical approach to doing something. But once we do it, we're not afraid to act fast. So I can say with confidence, especially since I've joined, I've never seen ETFs brought to market this fast, which really excites me. But there's again, a lot of due diligence going on behind the scenes. We're not doing this flying by the seat of our pants, but we're not afraid to act quickly. And I think that's a huge competitive advantage for us. Right now, we are ongoing conversations of maybe a potential mutual fund ETF conversion or two.

But I'll say the EM Select ETF we just launched earlier April came from client demand. So it came directly from client feedback. And our risk-optimized large-cap growth ETF we're planning to launch the next few weeks. Same thing. So I think between both client demand and engagement, which we do on a frequent basis, and just assessing our opportunities of existing mutual funds we have that might be ripe for a conversion candidate, we'll see what else we're going to launch here in the next 6 to 12 months. But I can say with confidence, this next one coming up will not be our last. So you've been in the industry now for about 14 years. I've been on the ETF side now, personally, probably four years. But inside that four years, like the last 24 months seems like

There's been like this acceleration of change just inside this, our little ecosystem. What have you, what are you seeing today that maybe you could, where's the industry going? I know that's a very loaded question, but you guys, you see things from, a much different perspective than maybe I see them, are we going to continue to probably see a bunch of innovation and change in the space and just only more of an acceleration? Absolutely. I think, luckily we have time here, but it would be a short answer as to yes, but we can double click, I think a little bit in as, as to why. I think it was asked this question last November, if we're going to hit more record flows and launches this year, and it was, we were short on time. So I just said a hundred

Percent. Yes. Like, wow, there's some conviction. But if you just look at the data, this acceleration, it's not just happening a percent or two in terms of records each year. It has been a massive hockey stick in terms of growth. And I think just the catalyst we see lying on the sidelines, ETF as a share class, probably being the biggest one. Honestly, from my seat, I'm a little surprised if I'm being honest with how many we've already seen adopt the ETF as a share class model, which I think is signs of just that pent up demand to access this capability, which that alone will lead to a whole nother wave of product development and net new launches. if you look at the past about, year and a quarter, there's been over

1200 active ETFs launched in that timeframe. I always like to start with client conversations with this, because even as some, the two of us looking at this every single day, it puts me back in my seat sometimes just to see the level of product coming up. I think it's very important to understand this is all not net new active strategies coming to market because I can a hundred percent appreciate for an advisor seat, feeling the need to have to do due diligence on this many new things is completely overwhelming. Number one, you have us as the issuers to work with, and I encourage you to work with us to understand kind of what's going on. But number two, take some comfort in a lot of this is mutual fund ETF conversion. A lot of this,

Look at our lineup, all six of our ETFs are an extension of something else we're already doing. So these are not all net new, brand new active strategies coming to market. There's a lot of this kind of extension of something else, clones, mutual fund ETF conversions, ETF as a shared class, where we're just seeing a new wrapper offered of an existing something else the issuer might be doing. So it's still daunting. Don't get me wrong. We're still a lot of due diligence that needs to be taken into account, which again, us as issuers need to be there for our clients and help them think through this. But without a doubt, ETF again, as a shared class alone, we should see the trend continue, but I think even continue to accelerate over the next three to

Five years. I couldn't agree with you more. It's funny you say like, we had no thoughts of getting into the ETF space. We were an SMA or CIO company for years and client demand put us here. And our two first strategies were just an extension of what we already did out of client demand. We just launched a sub-advised fund, same thing, clients demanded it. And so you got to step up to the plate. But Matt, I really, really appreciate you spending some time with me today. It's been super fun. I love, watching every, all the progress you guys are making. But before I let you go, where can people learn more about Barron Capital? Where can people learn about all of your ETFs?

So you can go to barroncapital.com. All right, Matt. Well, again, thanks so much for spending some time with me today. Brad, this was a lot of fun. Congrats on all your success as well. Thanks for having us on and hope to talk to you again in the near future.