3 Reasons & 1 ETF for an Active Growth Strategy

The market environment today has been marked by an emphasis on large-cap growth, particularly with respect to Magnificent Seven names like Nvidia, Microsoft, and Apple. The AI theme has been in the tech sector propelling much of the market performance in 2025. So it’s easy to see why investors would gravitate to this space. Passive funds that track indexes like the Russell 1000 can provide exposure to these names. Yet they are typically weighted according to market value. This could mean they are overexposed or underexposed to certain companies exhibiting upside. This is where an active growth strategy can be beneficial to maximize performance. One fund to consider is the MFS Active Growth ETF (MFSG).

Active funds have been highly sought after in an ETF market that is seeing more active launches this year compared to their active peers. In an environment where market uncertainty is constantly hovering due to inflation, interest rate policy, tariffs, geopolitical tensions, and other factors, an active strategy can help quell anxiety.

Because an active fund like MFSG uses a hands-on approach to select its holdings, it allows for:

1. Outperformance potential: Tailored holdings that can outpace benchmark passive indexes over a full market cycle.
2. A dynamic, flexible market approach: Portfolio managers can add to holdings to capture additional upside or reduce holdings to protect against the downside
3. Target-specific growth opportunities: Portfolio managers can target companies exhibiting high growth potential that’s sustainable over time

There are myriad options to choose from in an expanding active ETF market. MFSG discerns itself from its peers by tapping into the education and experience of MFS portfolio managers who are supported by its global investment platform of more than 50 equity research analysts spread across eight global offices. Investment decisions are made through a mix of engagement, diversity, collaboration, and integrated research.

Discerning Growth Exposure

While the portfolio has exposure to Magnificent Seven companies, the decision is driven by its bottom-up process. And its active approach provides flexibility to adjust this positioning over time. Holdings are screened for companies with a strong economic moat. Essentially, those that exhibit a competitive advantage, operate in a business environment with a high barrier to entry, pricing power, and scalability for margin expansion. The fund’s bottom-up fundamental analysis has led to the identification of multiple high-level investment themes over the last few years. These themes include AI, data center build-out, power management and electrification, and health care product innovation.

The size and position of each company selected for the fund is dependent on the underlying fundamentals and valuation. MFSG, in particular, builds a growth portfolio of companies that have the ability to provide steady, above-average rate, and duration of growth that the broader market may undervalue.

The fund comes with an expense ratio of 0.49%, or $49 for every $10,000 invested. This falls below the FactSet Segment Average of 0.61%. This makes MFSG a cost-effective solution for getting growth exposure in the convenience of an actively managed ETF.

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