Baron First Principles ETF falls 8.51% in Q1 2026 amid AI concerns and geopolitical risks

Baron First Principles ETF declined 8.51% in the first quarter of 2026, slightly outperforming the Russell 3000 Growth Index's 9.54% loss. The drop was driven by investor worries over AI's impact on portfolio companies and geopolitical tensions from the Iran war affecting inflation and consumer spending. Despite the weak start, the fund increased positions in several stocks and added new names, citing strong growth, cash flow, and attractive valuations. Management remains optimistic about long-term returns due to a balanced portfolio with diverse growth opportunities and expects lower interest rates to boost acquisitions and valuations.