2024 has seen all kinds of ETFs stand out, but when it comes to beating the S&P 500, this large cap growth ETF may offer a particular appeal. The market has delivered some significant returns in 2024, but when looking to 2025, finding a strategy with a strong process to continue that momentum matters. The American Century Focused Dynamic Growth ETF (FDG ) has almost doubled the performance of the S&P 500 Total Return index over the last year, per YCharts, inviting a closer look at its investment case.
See more: New Names, Same Compelling Active ETF Strategies
The large-cap growth ETF launched in March 2020. Charging 45 basis points (bps), the fund has returned 22.6% since inception and 55.7% over the last year, per American Century Investments data as of November 30. Not only did that return beat its benchmark, the Russell 1000 Growth Index, but it also beat the S&P in that time.
Active Large-Cap Growth ETF FDG
How, then, has the fund managed that performance, and how might it perform next year? FDG actively invests, adding an important wrinkle to its large cap growth approach. The strategy looks for large- and even some midcap firms that have potential for rapid growth and high profitability.
Active investing offers a particular benefit to that approach. Active managers, like those behind FDG, can adapt more quickly to events than passive managers can. What’s more, they can often lean more heavily into house knowledge and their own experience. That’s because passive funds often have strict requirements for tracking a given index. Active management can get the best out of fundamental research and outperform, often as a satellite allocation, but frequently also as a core holding.
Taken with FDG’s outperformance, this could make it worth a closer look. With rate cuts arriving amid continued uncertainty, its active investing capability could help it stand out to start the new year.
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