If the market narrative in 2023 has meant anything, it’s the marked rise in interest and flows for active ETFs. Active strategies offer significant benefits that have stood out in an uncertain landscape.
From the mini bank crisis markets faced in the spring to the persistent, stubborn specter of the inflation and rate hike battle, investors have had much to assess. Active strategies can not only navigate those risks but even look for outperformance, a degree of flexibility that could appeal in an active growth ETF like the Level Four Large Cap Growth Active ETF (LGRO ).
Those attributes have contributed to some exciting statistics in the active ETF landscape. Despite having just about 6% of AUM, active ETFs as a category saw 30% of flows to start 2023. At the same time, active strategies showed some outperformance and outdid their passive rivals in organic growth to start the year.
See more: Bull vs. Bear: Active ETFs Rising — Meaningful or Mirage?
With 2024 looking similarly uncertain, a strategy that can invest nimbly on a weekly, daily, or even intraday basis may appeal. That could boost the case for a strategy like LGRO. The active growth ETF just launched this year but has already hit more than $60 million in AUM.
Active Growth ETF LGRO's Approach
LGRO, which just launched in August, charges a 55 basis point fee for its services. The strategy employs quantitative and fundamental analysis in eyeing large-caps as it works for maximum total return. The ETF uses its quant screens to filter structural constraints and to identify positive financial conditions. Then, its fundamental analysis looks to stocks based on earnings potential and intrinsic value. The strategy seeks large and seasoned firms for its approach.
With active ETFs a growing component of the ETF ecosystem, they may merit a second look from investors and advisors. LGRO could be one option to consider as it continues a solid start to its life as an ETF.
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