Performance Overview - Baron FinTech Fund rose 9.26% in the quarter ended June 30, 2025, underperforming the FactSet Global FinTech Index which gained 13.82% [3][4] - Since inception, the Fund has achieved a 12.53% annualized return compared to 4.55% for the Benchmark [3][4] Market Conditions - U.S. equity markets experienced gains amid volatility, influenced by President Trump's tariff announcements and subsequent negotiations [5] - The "Magnificent Seven" stocks led the S&P 500 Index gains, appreciating over 20% during the quarter [6] Fund Performance Analysis - Underperformance against the Benchmark was attributed to stock selection in Information Services, Payments, and Tech-Enabled Financials [7] - The Fund's high exposure to Financials, which lagged the broader Index by over 5%, also contributed to underperformance [7] Sector Performance - Information Services faced widespread weakness, particularly from Fair Isaac Corporation and Verisk Analytics due to regulatory pressures and market rotation [8] - Payments sector was negatively impacted by Fiserv's weaker-than-expected earnings and slowing payment volumes [9] - Tech-Enabled Financials saw declines in insurance holdings, reflecting a market shift away from defensive sectors [10] Top Contributors - Robinhood Markets was the largest contributor, benefiting from increased trading activity and new crypto-related products [11][13] - MercadoLibre reported strong results with revenue up 37% and total payment volume up 72% [12][14] - Intuit's shares rose after better-than-expected quarterly results, with revenue growing 15% [15] Top Detractors - Fiserv detracted from performance due to concerns over Clover's payment volume growth [16] - The Progressive Corporation faced investor concerns about premium growth moderation despite strong performance metrics [17] - Clearwater Analytics saw a decline in shares despite solid earnings, as investors sought assurance on integration of recent acquisitions [18] Portfolio Structure - As of June 30, 2025, the Fund held 46 positions, with the top 10 holdings representing 40.9% of net assets [20] - The Fund's investments are segmented into seven themes, with Tech-Enabled Financials at 28.0% and Information Services at 20.9% [21] Recent Activity - The Fund made a new investment in Ategrity Specialty Insurance, focusing on the less competitive E&S market [26][28] - Increased positions in The Charles Schwab Corporation and CME Group were noted due to improving fundamentals and market conditions [29][30] Outlook - The economic outlook has improved, with positive trade developments and stable consumer finance trends supporting the Fund's holdings [33] - The Fund remains focused on investing in competitively advantaged growth companies within the fintech sector [34]

Investment & Valuation - Zerohash 完成 1.04 亿美元 D 轮融资，估值达 10 亿美元 [1] - Interactive Brokers 领投 Zerohash 的 D 轮融资 [1] Product Development & Strategy - Zerohash 计划推出稳定币产品，并深化加密货币业务 [1] - 机构正在进入加密货币领域 [1] Regulatory Landscape & Market Trends - 美国监管环境趋于积极，推动银行扩展其数字资产产品 [1] - 传统金融机构正逐渐进入数字资产领域 [1]

Core Insights - Interactive Brokers Group (IBKR) and Raymond James Financial (RJF) are benefiting from increased market volatility and retail investor participation, enhancing their revenue generation from trading activities and client accounts [1][3]. Group 1: Company Overview - IBKR is a technology-driven electronic trading platform catering to advanced traders with low-cost, high-tech online brokerage services [2]. - RJF adopts a more traditional approach, focusing on personalized financial solutions and diversified revenue streams, including advisory fees and commissions [9]. Group 2: Financial Performance - IBKR's compensation expenses relative to net revenues are lower than industry peers, indicating efficient cost management [4]. - RJF's Private Client Group segment has shown a compound annual growth rate of 12.7% over the last three fiscal years [11]. Group 3: Growth Prospects - IBKR is expanding globally through product diversification, including the introduction of new trading features and zero-commission trading in various markets [6][7]. - RJF has pursued acquisitions to enhance its market presence, including recent deals in Europe and Canada [12][13]. Group 4: Valuation and Performance Comparison - IBKR shares have increased by 47.1% this year, while RJF shares have risen by 10.7%, indicating stronger investor sentiment towards IBKR [15]. - IBKR's current price-to-earnings (P/E) ratio is 31.72X, compared to RJF's 14.84X, suggesting that RJF is relatively undervalued [16]. Group 5: Earnings Estimates - IBKR's revenue estimates for 2025 and 2026 are $5.68 billion and $6.05 billion, reflecting year-over-year growth rates of 8.9% and 6.4% [20]. - RJF's revenue estimates for fiscal 2025 and 2026 are $13.94 billion and $14.89 billion, with growth rates of 8.8% and 6.8% respectively [23]. Group 6: Investment Outlook - IBKR is positioned for growth due to its technological capabilities and innovative product offerings, making it a favorable option for long-term investors [28]. - RJF's diversified revenue streams and favorable valuation make it an attractive choice for conservative investors [27].

Industry Overview - Retail access to cryptocurrencies is steadily increasing due to improved onboarding and user experiences, aligning with regulatory expectations [1] - Stablecoins are becoming essential in bridging traditional finance and the crypto world, with major banks exploring their own initiatives [1] Factors to Consider for Coinbase Global Inc. (COIN) - Coinbase is the largest regulated cryptocurrency exchange in the U.S., positioned to benefit from market volatility and rising digital asset valuations [3] - The company generates 83% of its revenues domestically, aligning closely with the U.S. market, which is seen as a leader in crypto innovation [3] - Recent initiatives include launching an equity index future, crypto futures, and providing $100 million bitcoin-backed financing to CleanSpark [4][5] - Coinbase is advancing real-world crypto adoption through infrastructure initiatives like Base and promoting stablecoin payments [6] - Elevated transaction and operating expenses are impacting margins, and the company is exposed to volatility in major cryptocurrencies [7] Factors to Consider for Interactive Brokers Group, Inc. (IBKR) - IBKR is a leading electronic trading platform offering low-cost access to a wide range of financial products globally [8] - The company is expanding into emerging markets and enhancing its product offerings, including access to Bursa Malaysia [10] - IBKR has raised its quarterly dividend significantly, indicating a commitment to shareholder returns [11] - Non-interest expenses are rising due to investments in expansion and technology, which may pressure margins in the short term [12] Financial Estimates - The Zacks Consensus Estimate for COIN's 2025 revenues implies a 7.2% year-over-year increase, while EPS estimates suggest a 7.8% decrease [13] - For IBKR, the 2025 revenue and EPS estimates imply an 8.9% and 11.4% year-over-year increase, respectively [15] Price Performance and Valuation - COIN shares have decreased by 13.2% in the past three months, while IBKR shares have increased by 20.4% [16] - COIN trades at a forward P/E of 50.51, below its median of 60.24, while IBKR's forward P/E is 31.75, above its median of 27.18 [18] Conclusion - Coinbase benefits from a diversified revenue base and significant institutional demand, bolstered by its inclusion in the S&P 500 and regulatory standing [19] - Interactive Brokers is expected to benefit from low compensation expenses and increasing emerging market customers [20]

Core Viewpoint - The cross-border internet brokerage firms are tightening their account opening policies for mainland residents, shifting from requiring "overseas living and working proof" to "overseas identity documents" [2][10]. Group 1: Policy Changes - Futu and Tiger Brokers now require mainland clients to provide overseas residency identification for account opening, with specific documentation needed [2][3]. - The adjustment reflects a broader trend of tightening access for mainland investors to Hong Kong and U.S. stock markets, with several firms implementing stricter requirements throughout the year [2][6]. Group 2: Documentation Requirements - To open an account, mainland clients must submit two documents: a valid mainland identification (such as ID card or passport) and a Hong Kong or Macau identification [3][5]. - Acceptable proof of overseas residency includes recent utility bills, bank statements, or government-issued documents, all dated within three months [4]. Group 3: Regulatory Context - The tightening of account opening policies is part of ongoing regulatory scrutiny that began in 2021, aimed at curbing illegal cross-border brokerage activities [8][9]. - The China Securities Regulatory Commission (CSRC) has emphasized the need to prevent unlicensed foreign entities from soliciting mainland investors and has mandated compliance with local laws [9].

Federal Reserve and Interest Rates - The Federal Reserve cut the benchmark lending rate by 25 basis points to a range of 4-4.25% on September 17, marking the first rate cut of the year [1] - The Fed's dot-plot indicates two additional rate cuts of 25 basis points each in 2025 and one in both 2026 and 2027 [1] Fintech Industry Overview - The fintech sector benefits from a low-interest-rate environment, which fosters technological improvement and product innovation [2] - The growth of mobile and broadband networks, along with advancements in AI and machine learning, positions fintech for significant expansion [3] Investment Recommendations - Five fintech companies are recommended for investment based on favorable Zacks Ranks: CoStar Group Inc. (CSGP), PayPal Holdings Inc. (PYPL), SoFi Technologies Inc. (SOFI), Interactive Brokers Group Inc. (IBKR), and Robinhood Markets Inc. (HOOD) [4][9] - All five companies exhibit strong revenue and earnings growth expectations for the current year [9] CoStar Group Inc. (CSGP) - CSGP benefits from a resilient subscription business and a strong portfolio of marketplaces, with global traffic reaching 141 million in Q2 2025 [7] - New product launches, such as Matterport 3D tours and AI voice search, enhance customer experience [8] - Expected revenue and earnings growth rates for CSGP are 18.1% and 21.1%, respectively, for the current year [10] PayPal Holdings Inc. (PYPL) - PYPL is experiencing robust growth in total payment volume and strengthening customer engagement [11] - The company leverages AI for fraud detection and operational efficiency, contributing to an expected revenue and earnings growth rate of 4% and 12.5%, respectively, for the current year [13] SoFi Technologies Inc. (SOFI) - SOFI is positioned as a leader in online banking services, benefiting from lower interest rates that encourage customer growth [14] - The expected revenue and earnings growth rates for SOFI are 31.7% and over 100%, respectively, for the current year [16] Interactive Brokers Group Inc. (IBKR) - IBKR's initiatives to enhance its global presence and product suite are expected to support revenue growth, with a projected CAGR of 6.5% by 2027 [17] - Expected revenue and earnings growth rates for IBKR are 8.9% and 11.4%, respectively, for the current year [19] Robinhood Markets Inc. (HOOD) - HOOD operates a financial services platform that allows users to invest in various assets, benefiting from increased retail market participation [20][21] - The expected revenue and earnings growth rates for HOOD are 35.4% and 41.3%, respectively, for the current year [22]

Core Insights - ZeroHash has raised $104 million in a Series D-2 funding round, achieving a valuation of $1 billion, with participation from major financial institutions like Morgan Stanley and Interactive Brokers [1][2] - The total funding for ZeroHash now stands at $275 million, which will be used for product expansion and talent growth, aiming to become a leading provider of on-chain infrastructure [2][4] - The fundraising reflects a growing demand for enterprise-grade crypto infrastructure as financial institutions increasingly seek to offer tokenized assets and stablecoins [4] Company Overview - Founded in 2017, ZeroHash provides APIs and developer tools that enable financial institutions and fintechs to offer crypto, stablecoin, and tokenization products [3] - The platform supports solutions for notable clients such as Interactive Brokers, Stripe, and BlackRock, serving over 5 million users across 190 countries [3] Industry Trends - The investment round indicates a trend of increasing interest from financial institutions in building scalable on-chain solutions, highlighting the evolving landscape of crypto and stablecoin infrastructure [2][4]

Market Sentiment - The current market shows signs of froth, particularly with money flowing into SPACs and meme stocks, indicating a mindset of buying based on price increases rather than fundamentals [2][6] - Small-cap stocks, particularly those in the Russell 2000, are struggling due to a majority not being profitable, which necessitates either aggressive rate cuts or a robust economy for recovery [3][4] Economic Indicators - The market's assumption of aggressive rate cuts from the Federal Reserve has not been confirmed, which could impact the performance of small-cap stocks [3] - A strong economy could limit the potential for rate cuts, creating a challenging environment for small-cap stocks [4] Investment Strategies - There is a prevailing sentiment that investors are currently rewarded for being "irresponsibly bullish," suggesting a short-term strategy of buying into the market despite potential long-term risks [5][6] - Historical seasonality trends in September have shown mixed results, indicating that seasonality should not be a primary reason for investment decisions [7]

Company Performance - Interactive Brokers has shown strong performance over various time periods, with returns of 55.00% over the past 3 years, 39.64% over the past 5 years, 20.52% over the past 10 years, and 19.95% over the past 15 years [1] - The company has experienced significant revenue growth, with a year-over-year increase of more than 20% and earnings per share rising by 24% in the second quarter [4] Market Position - Interactive Brokers operates primarily electronically, which helps maintain low costs and high profit margins, unlike many brokerages with physical locations [4] - Approximately 84% of its customers are located outside the U.S., indicating strong potential for international growth and opportunities within the U.S. market [3] Future Outlook - The company added 250,000 net new accounts in the recent quarter, bringing the year-to-date total to over 528,000, surpassing the total added in all of 2023 [4] - Despite its strong performance, the stock appears overvalued with a forward-looking P/E ratio of 28, significantly above the five-year average of 20, and a price-to-sales ratio of 2.87, compared to the five-year average of 1.88 [2]

Core Insights - Foremost Clean Energy Ltd. has entered into a marketing services agreement with Interactive Offers LLC to enhance investor and market awareness [1][2] - The agreement with Interactive Offers includes a monthly payment of $200,000 USD for an initial term of 3 months, starting September 21, 2025 [2] - Foremost has also engaged Connect 4 Marketing Ltd. for targeted SEM advertising strategies, with a monthly fee of $20,000 USD for a 3-month term starting September 23, 2025 [3] Company Overview - Foremost Clean Energy Ltd. is a North American uranium and lithium exploration company, holding an option to earn up to a 70% interest in 10 uranium properties across over 330,000 acres in the Athabasca Basin [5] - The company is focused on the growing demand for carbon-free energy, with uranium and lithium playing significant roles in clean energy [5] - Foremost also has a portfolio of lithium projects across more than 55,000 acres in Manitoba and Quebec, at various stages of development [6]