What can a focused approach to equity portfolio construction offer for advisors and investors?
Recently, Dr. Ankur Crawford, portfolio manager at Alger, joined Todd Rosenbluth, VettaFi’s head of research, to discuss this very topic. Dr. Crawford manages the Alger Concentrated Equity ETF (CNEQ), applying Alger’s investment philosophy within a high-conviction portfolio of innovative large-cap companies.
Why Concentrated Equity Strategies Matter
Getting started, Rosenbluth first asked Dr. Crawford to explain what a concentrated approach to equity exposure offers compared to a more traditional broad S&P 500 strategy. First, Dr. Crawford noted that a focused approach can provide a portfolio with more clarity. Each investment in a fund like CNEQ matters, whereas a broad, large-cap index fund offers softer exposure to hundreds of companies. This focus on clarity also means that advisors and investors can better understand the justification behind each individual holding in CNEQ’s portfolio.
Furthermore, Dr. Crawford also pointed out that a concentrated strategy can help portfolios avoid exposure to companies that may be in a position to be disrupted. As CNEQ looks to hold only 30 or so stocks, the fund could have less negative tail risk than one would see with a traditional S&P 500 index ETF.
“For clients, it means that their capital is going to be aligned with really the true growth engines of the economy, and not diluted across the hundreds of benchmark names,” Dr. Crawford added. “It creates transparency and accountability.”
Investing in Change
Before investing in any concentrated fund, understanding how its team approaches stock selection is crucial. As Dr. Crawford explains, Alger’s investment philosophy focuses on identifying companies undergoing change. For Alger, change can take two forms.
The first type of change is what Alger refers to as “high unit volume growth,” characterized by companies experiencing strong, growing demand driven by industry growth and/or market share gains.
The other kind of change Alger seeks out is “positive life cycle change,” which tends to be those companies that have already passed through their growth cycle and have pivoted to find their next opportunity in the market. Dr. Crawford listed out several examples of pivots, such as significant product innovation, new management, restructuring, or an industry shift altogether.
More specifically, the independent power producers (IPPs) in CNEQ’s portfolio are seeing positive life-cycle changes driven by AI’s impact on power costs. With power prices going up, IPPs are in a good position to benefit in the years to come, according to Dr. Crawford.
The Future of Artificial Intelligence
Dr. Crawford and the Alger team believe that the AI field and the opportunities within will drive the economy forward in ways that may surprise people.
“Why are we so bullish? Our initial premise is that innovation will drive markets, not policy and not the macro,” Dr. Crawford added. “Macro will impact certain aspects of the economy, but this AI overlay of building data centers and growing our data center footprint is really going to trump everything else that would normally drive markets.”
Furthermore, Dr. Crawford assessed that, in her opinion, we are not in an AI bubble. While some have had concerns over the limits of the technology, Dr. Crawford instead argued that we are seeing compute limitations, not tech limitations.
Looking ahead, Dr. Crawford believes investors should rethink not only valuations, but time horizons and the market structure itself. As AI continues to shift the economy in the years to come, she believes those who invest ahead of the change could be in a position to benefit.
For more news, information, and strategy, visit the Artificial Intelligence Content Hub.
Click here for more information on the Alger Concentrated Equity ETF.
Disclosure Information
The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of January 2026. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Holdings and sector allocations are subject to change. Past performance is not indicative of future performance.
Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Companies involved in, or exposed to, AI-related businesses may have limited product lines, markets, financial resources or personnel as they face intense competition and potentially rapid product obsolescence, and many depend significantly on retaining and growing their consumer base. These companies may be substantially exposed to the market and business risks of other industries or sectors, and may be adversely affected by negative developments impacting those companies, industries or sectors, as well as by loss or impairment of intellectual property rights or misappropriation of their technology. Companies that utilize AI could face reputational harm, competitive harm, and legal liability, and/or an adverse effect on business operations as content, analyses, or recommendations that AI applications produce may be deficient, inaccurate, biased, misleading or incomplete, may lead to errors, and may be used in negligent or criminal ways. AI technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the future growth. AI companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. A significant portion of assets will be concentrated in securities in related industries, and may be similarly affected by adverse developments and price movements in such industries. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.
ETF shares are based on market price rather than net asset value (“NAV”), as a result, shares may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund may also incur brokerage commissions, as well as the cost of the bid/ask spread, when purchasing or selling ETF shares. The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, periods of high volatility and disruption in the creation and/or redemption process of the Fund. Any of these factors, among others, may lead to the Fund’s shares trading at a premium or discount to NAV. Thus, you may pay more (or less) than NAV when you buy shares of the Fund in the secondary market, and you may receive less (or more) than NAV when you sell those shares in the secondary market. The Manager cannot predict whether shares will trade above (premium), below (discount) or at NAV. The Fund may affect its creations and redemptions for cash, rather than for in-kind securities. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the Fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in Fund shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind. Brokerage fees and taxes will be higher than if the Fund sold and redeemed shares in-kind. Certain shareholders, including other funds advised by the Manager or an affiliate of the Manager, may from time to time own a substantial amount of the shares of the Fund. Redemptions by large shareholders could have a significant negative impact on the Fund.
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Alger pays compensation to VettaFi to sell various strategies to prospective investors.
Before investing, carefully consider a Fund’s investment objective, risks, charges, and expenses. For a prospectus and summary prospectus containing this and other information or for a Fund’s most recent month-end performance data, visit www.alger.com, call (800) 992-3863 (for a mutual fund) or (800) 223-3810 (for an ETF), or consult your financial advisor. Read the prospectus and summary prospectus carefully before investing. Distributor: Fred Alger & Company, LLC. All underlying series of The Alger ETF Trust listed on NYSE Arca, Inc. NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.