In a market heavily focused on artificial intelligence and major technology companies in 2025, billionaire fund manager Ron Baron shared insights on CNBC's 'ETF Edge' suggesting that investors should explore opportunities across varied market caps and sectors. This shift is already underway as many investors are starting to move away from tech stocks, seeking value in other areas such as the financial sector. Baron highlighted two financial companies owned by his firm, Baron Capital — MSCI and FactSet — which he believes are undervalued by individual investors and have promising leadership.
During his appearance on 'ETF Edge,' Baron delved into Baron Capital's introduction of new exchange-traded funds (ETFs), marking the firm's first foray into ETFs after decades of managing mutual funds and other investments. These ventures have reportedly generated an estimated $57 billion in profits for their investors over the past forty years. Baron predicts an additional $250 billion in profits over the next decade, focusing on stocks that are currently overlooked by the market.
'There are so many companies that are interesting right now with everyone focusing on technology,' Baron noted.
MSCI is renowned for its stock indexes, utilized by asset managers, pension funds, and ETF providers worldwide. Significant sums are invested in MSCI benchmarks, encompassing developed markets, emerging markets, and ESG indexes. The company also offers analytics and risk management tools crucial to institutional investors.
MSCI became publicly traded at $18 per share in 2007 after its separation from Morgan Stanley. Despite initial gains, its stock plummeted during the financial crisis, yet Baron continued to invest in it during that time.
However, MSCI has been overlooked amid the recent bull market, with its shares declining nearly 8% over the past year and trading at $563 as of Thursday.