3 Ways RONB Identifies True Growth Opportunities

Market movements in the first months of 2026 were largely driven by short-term sentiment and AI-related expectations. Finding true long-term growth drivers requires investors to focus on fundamentals — Baron First Principles ETF (RONB) serves this purpose.

RONB applies a rigorous, research-intensive framework rooted in First Principles thinking to target high-growth businesses poised to become the next generation of market leaders. Here are three ways RONB identifies these long-term growth opportunities.

1. Deconstructs Complexity

In an era where AI-driven innovation is reshaping entire industries, valuation models may overlook true growth opportunities. This could lead to a narrow focus on the technology driving a company’s revenue, which could lead investors astray when it comes to the fundamentals.

This is where RONB differentiates itself. It uses a “first principles” approach — championed by Ron Baron, David Baron, and Michael Baron — to deconstruct the complexity of a business by breaking it down to its essential elements: its culture, people, and strategy. The team takes each potential investment apart piece by piece to understand how a company works, then rebuilds it with a clear picture of where they think it can go over the long term.

“This ethos drives company-wide intellectual curiosity, challenging assumptions and uncovering opportunities that others may overlook.,” said Ron Baron in a portfolio manager Q&A.

2. Focuses on Visionaries

RONB looks at the intangibles in fundamental analysis that data cannot quantify. This includes examining the quality of leadership as a primary indicator of success.

The fund targets companies led by exceptional founders and management teams focused on relentless innovation. It’s not just about revenue, but also human capital. Pairing visionary leaders with businesses that have strong competitive moats can allow them to thrive across various economic cycles.

“When we identify visionary leaders and differentiated businesses capable of enduring success, we are willing to take bold positions,” said Ron Baron. “Our process truly emphasizes deep understanding, long-term thinking, and investing alongside exceptional management teams.”

3. Targets a Long-Term Horizon

In a market often defined by short-term perspectives, RONB looks at the long-term investment horizon. Across Baron Capital strategies, the average holding period is six years and, in the case of RONB, it’s even longer.

After the portfolio management team identifies compelling opportunities at attractive valuations, they hold on to them. This long-term mindset allows compounding to work and true wealth to be created.

In a market that prioritizes speed and efficiency, the ability to remain patient is a significant active advantage. This investment mindset is what allows RONB to capitalize on true growth leaders rather than temporary trend-followers.

“Investors today are seeking specialized managers with deep expertise and a proven ability to execute consistently over time,” Michael Baron said. “This focus on experience and disciplined research is at the heart of Baron Capital. For more than 40 years, we have concentrated on identifying growth equity companies through a rigorous, bottom-up process that defines our Firm.”

To learn more about RONB, click here.

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