Investors love their growth ETFs. The ETF explosion coincided with a lower interest rate environment that was kind to tech-heavy, growth-focused funds. While that very low interest rate environment is a memory now, and tech-driven concentration risk looms, certain growth ETF options can still stand out. One such underrated growth ETF is signaling a buy to end the year, per YCharts, and may be worth considering.
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That underrated growth ETF, the American Century Focused Dynamic Growth ETF (FDG ), has outperformed its averages and the S&P 500 ETF Trust (SPY ) on YTD and over the last three months, per YCharts. FDG charges a 45 basis point fee for its services. The strategy, which launched more than five years ago, actively invests in large- and midcap companies with potential for rapid growth and profitability.
An Active Growth ETF to Watch
Specifically, FDG looks for high-conviction opportunities. Its managers aim for firms with strong fundamentals, embracing a bottom-up process that seeks companies with durable competitive advantages.
Together, that has helped FDG return 17.8% YTD, per ETF Database data. That has outperformed both its ETF Database Category and FactSet Segment averages in that time. Those averages sit at 15.8% and 9% in that time. It has returned 18.3% over the last three months, as well, beating those averages at 12.4% and 9.9%, respectively.
Perhaps even more impressive has been the fund’s longer term performance. It has outperformed its averages over three and five year periods, as well. Per YCharts data, the strategy is also sending a buy signal right now, with its price rising above both its 50- and 200-day simple moving averages.
That momentum, with a buy signal and notable outperformance, could make FDG an appealing option. Where index growth strategies may lack the flexibility needed for an uncertain end of the year, FDG can adjust as needed. Its adaptability could also help it adjust to concentration risk. For those looking at options to boost their equities portfolios, the growth ETF may intrigue.
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