Baron SMID Cap ETF Fully Exits Wynn Resorts in Q3 Shift to Texas Roadhouse

Baron Capital’s SMID Cap ETF sold its entire stake in Wynn Resorts during the third quarter. The fund shifted that capital to Texas Roadhouse. The ETF now contains no gaming stocks.

The exit was disclosed in a letter to investors by portfolio managers Laird Bieger and Randy Gwirtzman. The letter provided no specific explanation for dropping the casino operator. Bieger and Gwirtzman instead emphasized opportunities elsewhere.

They wrote: "Finally, we think that the sell-off in consumer stocks is overdone and that we are in a unique period in which to invest in high growth, high-quality consumer companies trading at trough valuations."

Wynn Resorts stock has fallen 31.7% over the past year. The actively managed ETF faces no index constraints. It can therefore exit positions that lag broader consumer recovery.

Earlier Bullish Position on Wynn

Baron Capital added Wynn shares to the Baron Discovery Fund in the second quarter of 2025. The stake accounted for 1.3% of that fund as of September 30. At the time the firm highlighted the stock’s potential to double, its appeal to acquirers, and limited market credit for the planned UAE integrated resort.

Remaining Exposure in Flagship ETF

The Baron First Principles ETF allocates 2.27% of its weight to Red Rock Resorts. The asset manager has maintained a constructive stance on that operator’s Las Vegas casino resort investments. This leaves the SMID Cap ETF as the sole vehicle to have shed all gaming exposure, according to Casino.org.