Alger plans two actively managed high-conviction equity ETFs

Aug 21st, 2020 | By | Category: Equities

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New York City-headquartered Alger has unveiled plans to launch two actively managed ETFs: the Alger 25 ETF and the Alger Mid Cap 40 ETF.

Alger plans two actively managed high-conviction equity ETFs

Alger portfolio managers: Dr Ankur Crawford and Amy Zhang, CFA.

The listings, scheduled for the first quarter of 2021, will mark the growth equity manager’s entry into the ETF space.

Both funds will be focused, high-conviction strategies, and listed on NYSE Arca.

“We have seen increased demand for our focused strategies since we launched our first one in 2012. Having these strategies available as actively managed ETFs enables investors who prefer an ETF vehicle to access our investment capabilities,” said Dan Chung, CEO and chief investment officer of Alger.

He added, “Alger has a proud, 56-year record of investing in change and innovation, and we believe the innovation of actively managed ETFs is something that will help to continue to propel our growth.”

The funds

The Alger 25 ETF will be managed by Ankur Crawford, executive vice president and portfolio manager. She has been with the firm for over 16 years and currently co-manages more than $22 billion in the firm’s US large-cap growth equity strategies.

The ETF will execute a strategy similar to the Alger 25 mutual fund, which launched in 2017, by investing in 25 high-conviction large-cap growth equities in the technology, health care, consumer discretionary, and industrials sectors.

At the end of April, notable positions in this fund included Amazon, Alibaba, Visa, Microsoft, Alphabet, Adobe, Crown Castle, Salesforce.com, Progressive, and Cintas. Technology was by far and away the largest sector weight, representing almost 50% of the fund.

The Alger Mid Cap 40 ETF will be managed by Amy Zhang, executive vice president and portfolio manager. The ETF will seek to invest in 40 high-conviction mid-cap growth equities. Zhang has been with the firm since 2015 and manages several of Alger’s small and mid-cap strategies, including the Alger Small Cap Focus Fund, a five-star Morningstar-rated fund.

Non-transparent

Alger has licensed the ActiveShares structure from Precidian Investments which enables the firm to deliver actively managed investment strategies in an ETF vehicle without disclosing holdings daily.

“As active growth equity managers, the ability to shield the strategies’ underlying holdings enables our investment team to construct these high-conviction portfolios with confidence. Our in-depth, fundamental research process, which we have refined for more than 55 years, is critical to our quest to generate strong, long-term returns on behalf of our clients,” said Chung.

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