HomeMost PopularAlger's Adventurous Dive into Transparency: Breaking Down 2 New Actively Managed ETFs

Alger’s Adventurous Dive into Transparency: Breaking Down 2 New Actively Managed ETFs

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Fresh off the presses, Fred Alger Management made a splash by introducing two new exchange-traded funds to its lineup on Friday, expanding their ETF family to a grand total of five distinct funds. What sets these newcomers apart is their full transparency, a departure from the rest of the firmโ€™s entirely actively managed offerings.

A Deep Dive into an Actively Managed AI-Focused Strategy

Diving headfirst into the sea of ETFs is the innovative Alger AI Enablers & Adopters ETF (NYSE Arca: ALAI). With a modest expense ratio of 0.55%, this fund marks the issuerโ€™s first foray into thematic funds. Crafted with precision, its strategy hones in on companies showcasing what the prospectus aptly labels as โ€œpositive dynamic change.โ€ The managers behind ALAI have their eyes trained on companies demonstrating either โ€œhigh unit volume growthโ€ or โ€œpositive lifecycle change,โ€ as outlined in the prospectus. The former category references companies seeing a surge in demand or reigning supreme in their market segment, while the latter includes entities reaping the benefits of regulatory, innovative, or managerial shifts.

ALAIโ€™s game plan entails zeroing in on companies poised for success through their involvement with or reliance on artificial intelligence, categorizing them as enablers or adopters. Enablers are instrumental in constructing the very framework that supports AIโ€™s endeavors, while adopters are the pioneers incorporating AI into their products, services, or operational strategies, as delineated in the fundโ€™s prospectus.

As it embarks on its journey, ALAI sails with a diversified portfolio comprising approximately 45 securities. Noteworthy holdings include top players like Microsoft Corp. commanding nearly 14% of the portfolio, closely followed by Amazon.com Inc. at 10.4%, and Nvidia Corp. at 9.1%. Interestingly, the portfolio comprises six of the illustrious โ€œMagnificent Sevenโ€ stocks in its upper echelons, with Tesla Inc. making a more modest appearance further down the list, holding a weight of 0.7%.

Casting a Lens on U.S. Large-Cap Growth in a Compact Portfolio

In another corner, we have the intriguing Alger Concentrated Equity ETF (NYSE Arca: CNEQ), boasting an identical expense ratio of 0.55%. However, this ETF pivots towards the stocks of large-cap companies that the fundโ€™s managers foresee blooming in the future. The portfolio adopts a concentrated approach, primarily housing the securities of roughly 30 U.S. companies. A solid one-quarter of the portfolioโ€™s assets are earmarked for companies in the technology sphere, in line with CNEQโ€™s prospectus.

Upon its market entry, the ETFโ€™s crรจme de la crรจme holdings included Microsoft leading the pack with a weight of 15.6%, Nvidia Corp. at 9.8%, and Amazon.com Inc. holding steady at 9.1%.

Dipping its toes into the ETF scene earlier this year, Alger has already made a mark, amassing a combined $55 million in assets under management across its ETF suite.


For a plethora of news, information, and analysis, dive into VettaFi | ETF Trends.

Read more on ETFTrends.com.

The musings and insights expressed herein are solely those of the author and may not reflect the sentiments of Nasdaq, Inc.

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