Alger Mid Cap 40 ETF (FRTY) seeks to track the performance of approximately 40 mid-capitalization U.S. companies selected through Alger's proprietary research process. This actively managed mid-cap equity ETF focuses on growth-oriented companies with market capitalizations typically between $2-10 billion.
How It Works
FRTY employs an active management approach where Alger's research team selects roughly 40 mid-cap stocks based on fundamental analysis and growth potential. The fund concentrates holdings in companies showing strong earnings growth, innovative business models, and competitive advantages. Portfolio managers actively adjust weightings and holdings based on ongoing research rather than following a passive index. Rebalancing occurs as needed based on fundamental changes and market opportunities.
Key Features
- Concentrated portfolio of only 40 holdings allows for high-conviction bets on Alger's best mid-cap growth ideas
- Active management by experienced Alger team with decades of growth investing expertise and proprietary research capabilities
- Zero expense ratio makes this one of the most cost-effective actively managed mid-cap ETFs available
Risks
- This ETF can lose significant value if Alger's stock selection proves wrong, as concentrated 40-stock portfolio amplifies individual company impact on performance
- Active management risk means the fund may underperform passive mid-cap indexes if manager decisions fail to add value over time
- Mid-cap stocks typically experience higher volatility than large-caps, potentially declining 40-50% during market downturns while taking longer to recover
Who Should Own This
Best suited for growth-focused investors with 3-5 year time horizons seeking active mid-cap exposure as a satellite holding (5-15% of equity allocation). High risk tolerance required due to concentration and mid-cap volatility. Appropriate for investors who believe active management can outperform passive mid-cap indexes.