Baron SMID Cap ETF

BCSM

Market cap $28M

The market dominance of mega caps is facing a critical test. Large cap companies, typically those found in the “Magnificent Seven,” have been propelling the market for the last few years.

A historic run of outperformance by large-cap growth names may prompt some investors to look for value elsewhere. That opportunity could be in small-and mid-caps (SMID), given their strong performance recently.

Active exchange-traded funds (ETFs) came to the forefront in 2025 with the launch of a record number of funds catering to active strategies. 2026 could bring another year for heavy active ETF demand from investors.