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As markets change, investors are increasingly looking toward high-conviction, active vehicles like the Alger 35 ETF (ATFV) to find companies adapting to disruptive shifts and creating lasting value. ATFV seeks to capitalize on major technological transformations, including the rapid expansion of AI infrastructure.
Alger 35 ETF is a concentrated, actively managed growth ETF with 34 holdings, heavily weighted toward technology and large U.S. companies. ATFV has greatly outperformed benchmarks and competitors over the past three years but lags QQQ since inception, with high volatility and deep drawdowns. ATFV is best positioned for tactical allocation or swing trading rather than as a long-term holding due to its risk profile and performance history.
Growth stocks are demonstrating stronger fundamentals than value stocks, with growth companies posting higher earnings growth and healthier balance sheets, despite investor concerns about tariffs and deficits. Growth indices currently show 14.4% projected long-term earnings per share growth, according to Alger's Winter 2026 Capital Markets presentation.
Investors questioning whether hyperscaler spending on AI infrastructure will deliver returns may find comfort in new research. The major cloud providers — Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), Meta Platforms, Inc. (META), and Microsoft Corp. (MSFT) — have increased their investments while boosting profitability metrics.
The Alger 35 ETF offers concentrated exposure to tech and communications, outperforming major peers with nearly 35% annual returns. ATFV's active management and focused 34-stock portfolio have driven strong NAV growth and outperformance since inception. Despite outperformance, ATFV trades at a premium valuation (P/E 33.51x) and has a higher expense ratio than some competitors.
I initiate coverage of the Alger 35 ETF with a Hold rating, with the main reason for it being its extreme volatility. ATFV is managed actively, with a concentrated portfolio, favoring names demonstrating "Positive Dynamic Change." The ATFV portfolio is offering exceptionally robust growth and momentum characteristics, beating IVV as well as CNEQ on these fronts.