Ron Baron’s Big SpaceX Bet Sidesteps SEC’s Illiquid Assets Cap

Ron Baron — a longtime Elon Musk investor and a newcomer to the exchange-traded fund universe — is already subverting norms in the $14 trillion industry.

A peek under the hood of the Baron First Principles ETF (which trades under the ticker RONB) reveals a portfolio that, depending on the day, many thought to be impossible: one of its largest holding is SpaceX, a Musk-founded privately held rocket company, with a weighting that has vacillated between 11% and 22% in the past few weeks.

The stake often exceeds the 15% ceiling on illiquid assets that US regulations put in ...