Baron SMID Cap ETF's Q1 2026 performance and Flutter Entertainment sale

What happened: In Q1 2026, Baron Capital's Baron SMID Cap ETF sold its shares in Flutter Entertainment plc (FLUT). Concurrently, Flutter Entertainment, the world's largest online betting company and owner of Paddy Power and FanDuel, announced it would delist from the London Stock Exchange (LSE) and maintain a sole listing in New York, effective August 3, 2026.

Market impact: This move impacts the UK's shrinking stock market and the global gambling sector. Flutter's delisting reduces liquidity and investment options for UK-based investors, while the company's focus on the U.S. market signals a strategic shift towards the more lucrative American gambling scene. Baron SMID Cap ETF's sale of Flutter shares suggests a potential re-evaluation of the company's prospects or a shift in investment strategy.

What to watch next: Investors should monitor Flutter's Q2 2026 earnings, due in late July, for insights into the company's U.S. expansion strategy. Additionally, the UK government's ongoing review of gambling regulations may influence Flutter's future operations and valuation. Lastly, Baron SMID Cap ETF's next quarterly holdings report, due in October 2026, will provide clarity on the fund's continued exposure to the gambling sector.