Alger 35 ETF (ATFV)

Alger 35 ETF (ALGX) Summary:

Profile:

• Focus: Actively managed ETF utilizing a concentrated portfolio of 35 domestic large-cap growth stocks
• Asset Allocation: Primarily equities focused on the technology, healthcare, and consumer discretionary sectors
• Investment Strategy: Focuses on identifying companies with sustainable competitive advantages, strong management teams, and potential for long-term growth

Objective:

• Achieve long-term capital appreciation through investment in high-potential large-cap growth companies

Issuer:

• Founded in 1964, Alger is a reputable asset management firm with over 50 years of experience
• Strong track record with a focus on fundamental research and active management
• Management team comprises experienced investors with deep expertise in identifying growth companies

Market Share:

• ALGX holds a small market share within the large-cap growth ETF space, representing less than 1% of total assets under management.

Total Net Assets:

• Approximately $5.5 billion (as of October 26, 2023)

Moat:

• Experienced Management: ALG's team has a strong history of successfully identifying and investing in high-growth companies.
• Active Management: The ETF's concentrated portfolio allows for active management and more flexibility to react to market changes.
• Focus on Quality: ALG's rigorous selection process prioritizes businesses with sustainable competitive advantages.

Financial Performance:

• Since inception (October 2019), ALGX generated a cumulative return of around 55%, outperforming major benchmarks like the S&P 500.
• However, year-to-date performance (as of October 26, 2023) is slightly below the S&P 500.

Growth Trajectory:

• Historically, the actively managed approach and focus on high-potential companies have resulted in strong performance.
• Continued success hinges on identifying future growth trends and maintaining a competitive edge within the large-cap growth space.

Liquidity:

• Average Trading Volume: Approximately 50,000 shares per day, indicating moderate liquidity.
• Bid-Ask Spread: Tends to be slightly higher compared to broader market ETFs due to lower trading volume.

Market Dynamics:

• Economic Indicators: Economic growth and interest rate fluctuations significantly impact growth stock performance.
• Sector Growth Prospects: Technology, healthcare, and consumer discretionary sectors drive ALGX's performance and are highly dependent on innovation and consumer spending trends.

Competitors:

• iShares Core S&P 500 ETF (IVV): 16% market share - Tracks the broader market, offering diversification but lower growth potential.
• Vanguard Growth ETF (VUG): 13% market share, passively tracks the large-cap growth index, providing lower expense ratio but potentially less outperformance potential compared to ALG's active management.
• Invesco QQQ Trust (QQQ): 11% market share - Tracks the Nasdaq 100 index heavily concentrated in large-cap tech stocks with high volatility.

Expense Ratio: 0.69% (as of October 27, 2023) includes management and other fees

Investment Approach and Strategy:

• Actively managed ETF deviating from a specific index.
• Portfolio diversified across growth stocks in technology, healthcare, and consumer discretionary sectors.

Key Points:

• Seeks outperformance through active management and concentrated portfolio approach.
• Favors growth potential over diversification, leading to potentially higher volatility.
• Requires extensive due diligence for investors to evaluate individual stock selections.

Risks:

• High volatility due to its concentrated portfolio of growth stocks.
• Vulnerable to market downturns and sector-specific risks.
• Active management success relies upon the team's ability to consistently identify winning companies, adding an element of risk related to their stock selection and portfolio positioning strategies.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to high-potential growth sectors.
• Those comfortable with higher volatility associated with a concentrated portfolio approach.
• Individuals who trust ALG's management team and their active investment strategies.

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with an experienced financial professional before making any investment decisions.

Fundamental Rating based on AI: 7.5

Justification: ALG's strong management team, active management approach, and focus on identifying high-quality companies make it attractive. However, the concentrated portfolio and associated volatility might not be suitable for all investors.

Resources:

• https://investor.alger.com/product/alger-us-sector-equity/
• https://finance.yahoo.com/quote/ALG/
• https://www.investopedia.com/
• https://morningstar.com/

Disclaimer: This analysis incorporates publicly available data and may not cover all relevant factors.