Turn to Tech Innovation Amid Uncertain Markets

Despite earlier market concerns regarding the sustainability of U.S. large-cap growth amid macroeconomic uncertainty, select companies, particularly in the technology sector, continue to demonstrate robust performance driven by artificial intelligence momentum. The Alger Concentrated Equity ETF (CNEQ) exemplifies a strategy capitalizing on this trend, maintaining a concentrated portfolio (under 30 holdings) with over 40% allocation to IT as of July 31, 2025, including key AI beneficiaries, while also diversifying with non-tech growth stocks. This active, fundamentally-driven approach has yielded significant results, with the fund's NAV rising over 24% year-to-date as of August 14, 2025, underscoring the efficacy of disciplined stock selection and a focus on tech momentum.

Analysis

Despite initial market concerns over macroeconomic headwinds such as trade policy and inflation, U.S. large-cap growth has demonstrated resilience, driven primarily by a select group of technology companies capitalizing on momentum in artificial intelligence. Firms like Nvidia (NVDA), Meta (META), and Microsoft (MSFT) are highlighted as persistent leaders. The Alger Concentrated Equity ETF (CNEQ) is presented as a vehicle to access this theme through an actively managed, concentrated strategy of 30 or fewer holdings. This approach allows for a focus on fundamental analysis and has resulted in a portfolio with over 40% allocated to the information technology sector as of July 31, 2025. Importantly, the fund's strategy is not a pure-play on tech; it diversifies with non-tech growth companies such as Visa (V), Constellation Energy (CEG), and Eli Lilly (LLY) to provide alternative growth paths and mitigate reliance on a single sector. The efficacy of this combined approach is underscored by the fund's performance, with its NAV rising more than 24% year-to-date as of August 14, 2025.

Key Decisions for Investors

• Investors looking for targeted exposure to the AI-driven growth theme may find a concentrated, actively managed strategy like CNEQ a compelling alternative to broader, market-cap-weighted indices.
• Given the fund's significant 24% year-to-date NAV growth, momentum investors could view this as a positive signal, but should monitor the sustainability of performance given its high concentration in a few key technology holdings.
• While CNEQ's inclusion of non-tech growth stocks offers some diversification, investors must recognize that with over 40% of the portfolio in information technology, its performance remains heavily correlated with the outlook for the tech sector.