Here's a sign of the times in the ETF world: Fred Alger Management's (ATFV) active ETF lineup has now crossed the $1 billion mark in assets under management. That's a pretty quick climb—they were at $600 million back in October. So what's driving all this money? Basically, financial advisors and investors are looking for something a bit more specific than your standard passive index fund. They want high-conviction picks and exposure to specific, innovation-led themes.
Alger's doing this with a four-ETF lineup. The flagship is the Alger 35 ETF (ATFV), a concentrated portfolio of around 35 U.S. companies that holds a five-star rating from Morningstar and represents the firm's top investment ideas. But the newer kids on the block are getting a lot of attention, too.
Take the Alger AI Enablers & Adopters ETF (ALAI). Since it started in 2024, it's returned about 31%. The S&P 500, for comparison, is up 14% over that same period. That's a pretty significant gap. Similarly, the Alger Concentrated Equity ETF (CNEQ) has outpaced both the Russell 1000 Growth Index and the S&P 500 by roughly 12 percentage points, as of March 31.
Mid-Cap Edge Adds Alpha
And it's not just about AI or concentrated bets. The Alger Mid Cap 40 ETF (FRTY) has further strengthened the firm's performance profile. As of March 31, the fund was up about 13 percentage points over the past year versus the Russell Midcap Growth Index. That highlights the potential for generating alpha—that's investment-speak for returns above a benchmark—in the mid-cap growth space through good, old-fashioned bottom-up research.
Active ETFs Gain Ground
What's happening with Alger is part of a bigger story. The broader ETF landscape is changing. Investors are starting to look past simple passive exposure and are getting more interested in targeted, actively managed strategies. Why? Because innovation cycles, especially in areas like AI and next-generation tech, are creating specific, high-growth opportunities that a broad index might miss. Active managers try to capture those with more precision.
You can see this trend playing out across the industry with new, niche launches. For example, the Roundhill Memory ETF (DRAM) crossed $1 billion in assets in just 10 days after launching, showing there's serious appetite for focused strategies in areas like semiconductors.
And the experts think this is just the beginning. Citigroup expects active strategies to roughly double their share of total ETF assets over the coming decade. The driving forces? Growing investor demand for flexibility, income opportunities, and maybe a bit better downside protection in what can be a volatile market. So, hitting $1 billion isn't just a milestone for Alger—it's a data point in a much larger shift in how people are putting their money to work.
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