Alger to launch the firm’s first two actively managed ETFs
Fred Alger Management (Alger), a growth equity investment manager, is to launch two actively managed exchange traded funds (ETF) – Alger 25 ETF and Alger Mid Cap 40 ETF, marking the firm’s entry into the ETF space.
Both vehicles will be focused, high- conviction strategies. These products are scheduled for availability in Q1 2021.
“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,” says Dan Chung, CEO and chief investment officer of Alger. “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.”
Alger 25 ETF will be managed by Dr Ankur Crawford, executive vice president and portfolio manager. She has been with the firm for over 16 years and currently co-manages more than USD22 billion in the firm’s US large cap growth equity strategies. This ETF will execute a strategy similar to the Alger 25 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.
Alger Mid Cap 40 ETF will be managed by Amy Y Zhang, CFA, executive vice president and portfolio manager. The ETF will seek to invest in 40 high-conviction mid cap growth equities. Amy 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.
Alger has licensed ActiveShares® from Precidian Investments, LLC, which enables the firm to deliver actively managed investment strategies in an ETF vehicle without disclosing holdings daily. The ETFs will be listed on the NYSE Arca, Inc., which currently lists nearly 80 per cent of all US ETF assets under management.
“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,” adds Chung.
Brown Brothers Harriman & Co (BBH) will be the custodian, administrator, and transfer agent of the funds. Alger and BBH have worked closely together for more than a decade.