Baron Emerging Markets Select ETF | Q3 2026

Summary

• The Baron Emerging Markets Select ETF declined 2.07% in net asset value during the third quarter of 2026, while the MSCI Emerging Markets Index fell 0.37%.
• The MSCI Emerging Markets IMI Growth Index declined 3.10% for the quarter, and the MSCI Emerging Markets IMI Value Index outperformed the Growth Index by 577 basis points.
• The fund's total annual operating expense ratio as of April 30, 2026, was 0.75%.
• Rising energy prices, a breakout in global bond yields, the resumption of hostilities with Iran, and the escalating Russia/Ukraine war were identified as prevailing market catalysts.
• Underperformance relative to the benchmark was primarily driven by adverse stock selection in the Financials sector, negative allocation effects in the Industrials sector, and weak stock selection in the Utilities sector.
• Poor stock selection in China was the largest detractor to relative performance, while negative allocation effects and adverse stock selection in India and Taiwan also dragged results.
• Solid stock selection in Korea and an overweight position in Peru bolstered relative results.
• Top contributors to performance included Divi's Laboratories Limited, WuXi AppTec Co., Ltd., ISC Co., Ltd., Southern Copper Corporation, and HPSP Co., Ltd.
• Top detractors from performance included SK hynix Inc., Montage Technology Co., Ltd., Samsung Electronics Co., Ltd., Contemporary Amperex Technology Co., Limited, and SK Square Co., Ltd.
• Divi's Laboratories Limited contributed 0.54% to returns, driven by stronger-than-expected quarterly revenue and shipments of GLP-1 API validation batches.
• WuXi AppTec Co., Ltd. contributed 0.43% to returns after nearly doubling its full-year revenue growth guidance to 35% to 39%.
• ISC Co., Ltd. contributed 0.42% to returns as AI products accounted for more than 80% of sales and the company raised prices.
• SK hynix Inc. detracted 1.68% from returns after second-quarter results missed forecasts despite revenue more than tripling year-over-year.
• Montage Technology Co., Ltd. detracted 0.78% from returns due to a South Korean prosecutor investigation into suspected price coordination.
• Samsung Electronics Co., Ltd. detracted 0.69% from returns despite reporting its most profitable quarter in history with operating profit rising roughly 19-fold year-over-year.
• The top 10 holdings by percent of net assets included Taiwan Semiconductor Manufacturing Company Limited at 15.0%, Samsung Electronics Co., Ltd. at 8.0%, and SK hynix Inc. at 5.2%.
• Country allocations included Taiwan at 21.6%, Korea at 20.9%, India at 20.8%, China at 17.6%, Brazil at 6.1%, and Peru at 3.0%.
• The fund initiated a position in INOX India Limited, a manufacturer of cryogenic storage and transport equipment, to increase exposure to the global security/supply chain diversification theme.
• The fund added a holding in Bangkok Bank Public Company Limited, citing an improving operating environment for Thai banks.
• India's real GDP growth sustained above 7% with bank credit growing nearly 20% year-over-year during the quarter.
• The fund retained conviction in its India holdings, noting they are attractively valued and have entered an earnings upgrade cycle.