Alger 35 ETF (ATFV)

The Alger 35 ETF offers investors a transparent window into the stock-picking philosophy of Fred Alger Management, a research-driven money manager with a decades-long track record focused on growth investing. Rather than deploying capital across thousands of holdings or tracking a rules-based market index, ATFV concentrates on exactly 35 stocks — the result of Alger’s fundamental research process identifying companies it believes have the highest growth potential. Each holding represents a high-conviction bet, not a compromise position taken because a formula dictates ownership.

This is one way that active management has adapted to the ETF era: instead of running a traditional mutual fund open only to accredited investors or institutions, Alger wraps its stock-picking logic into a transparent, daily-trading vehicle. Retail investors can now access the same portfolio construction discipline that previously required a large minimum investment or a relationship with a wealth manager.

The Alger research process and stock selection

Fred Alger Management has long positioned itself as a bottom-up, growth-focused equity shop. The firm builds its portfolio by identifying individual companies it believes have sustainable competitive advantages, strong management teams, and credible paths to above-market earnings growth. The Alger 35 Index formalizes this by stating a rule: include the 35 stocks that rank highest in Alger’s quantitative and qualitative scoring models.

The specifics of how Alger scores a company — what metrics, weighting, and analyst judgment go into the ranking — are proprietary. The fund does not announce a formula in the way that, say, the Russell 2000 or MSCI USA define their rules. Instead, investors must infer the philosophy from the holdings themselves. Historically, Alger growth portfolios have tilted toward technology, healthcare, and consumer discretionary stocks with strong brand power or network effects. The typical Alger holding is a mid- or large-cap company with high margins and a CEO or founder story behind it.

Concentration and risk

Holding only 35 stocks instead of 500 or 3,000 is a double-edged sword. On one side, the portfolio is focused: it is not diluted with mediocre names. On the other, it is more volatile and less diversified. A single holding that encounters trouble — management turnover, a missed quarter, regulatory shock — can move the fund’s price by a meaningful amount. Investors should understand that ATFV will experience larger drawdowns than the broader market during downturns and may outperform significantly during periods when growth stocks are favored.

The concentration also means the fund’s performance hinges on whether Alger’s stock-picking edge is real. If the firm’s research process is genuinely superior — if it has true insight into which companies will outgrow the market — then holding those 35 instead of a broader mix will capture that alpha. If the edge erodes or disappears, concentrated ownership becomes a liability. There is no index inertia to hide behind.

Cost and comparison

The fund carries an expense ratio above that of broad market index ETFs like VOO or VTI, reflecting the fact that the portfolio is actively managed, however transparently. The expense ratio is much lower, however, than a traditional mutual fund focused on growth equities or a separately managed account with a stockbroker.

An investor choosing ATFV is implicitly making a bet that Alger’s research process is worth the added cost compared to a passive S&P 500 or Russell 1000 index fund. That bet should be tested by comparing the fund’s returns (after fees) to relevant benchmarks over a full market cycle, not just strong years.

The investor base

ATFV appeals to investors who believe in active management and have specific conviction in Alger’s stock-picking philosophy, or who want concentrated growth exposure without the infrastructure cost of hiring a separate wealth manager. It also suits investors who appreciate the transparency of daily pricing and exchange trading but want something more focused than a passive index.

It does not suit investors seeking broad diversification, those uncomfortable with concentration risk, or those who believe that predicting which 35 stocks will outperform is futile. It is also not appropriate for buy-and-hold investors who want to ignore their portfolio — Alger’s research process and holdings will change over time, and monitoring the fund’s top holdings and performance relative to peers is worthwhile for an owner.

How to research ATFV

Begin with the fund’s fact sheet and holdings list (updated regularly by the sponsor or through ETF data providers). The top 10 holdings will tell you a lot: Are they tech companies, healthcare, consumer names? Are they megacaps or smaller, nimble growers? This gives immediate color on Alger’s current conviction areas.

Next, compare ATFV’s performance returns (after fees) against the S&P 500 and the Nasdaq 100 over rolling one-, three-, and five-year periods. Growth outperformance is lumpy: Alger will beat in years when growth stocks dominate and underperform when value or dividend-paying stocks lead. The longer time frame shows whether that outperformance, on balance, justifies the fee and the added risk.

Read the fund’s annual reports or semi-annual updates for any commentary from Alger on the market environment and the firm’s positioning. These often contain useful context on how the fund is responding to shifts in growth/value, domestic/international, or sector dynamics. Finally, track the fund’s expense ratio and the bid-ask spread — if either widens materially, it can eat into returns for active traders.

A prospectus review will clarify the fund’s mandate, rebalancing schedule, and Alger’s authority to add or remove companies from the lineup. Comparing the Alger 35’s constituents with the holdings of the Alger Growth Fund (if Alger still runs a traditional mutual fund or separate-account offering) can reveal whether the ETF is a true window into the firm’s process or a simplified version.