Are U.S. investors set for a soft landing? It increasingly seems that way, especially compared to the narrative markets saw entering this year. Inflation is down and rates are dropping, with the Fed’s 50 basis point cut perhaps auguring further cuts in the new year.
While some economic data remains tepid, the broader picture for U.S. investors appears more positive than not. Should the remaining clouds clear and the sun come out on a true soft landing, an active growth ETF like the American Century Focused Dynamic Growth ETF (FDG) could be poised to build on a strong 12-month run.
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The fund has earned itself a top 10 performance spot among moderate-fee active equity ETFs with at least $200 million in AUM, per ETF Database data. The active growth ETF has returned 46.8% over one year, per YCharts. Not only does that place it in that upper echelon of active equity ETFs, it also beats the S&P 500 Total Return index over one year.
FDG has beaten SPXTR over one year per YCharts.
Charging 45 bps — relatively low for an active fund — FDG looks for large- and midcap U.S. firms. The ETF seeks out companies with potential for rapid growth and high profitability. The strategy’s active flexibility can empower its managers to scrutinize firms more closely, too. Not having an index that managers must replicate almost perfectly, FDG can adapt more freely.
Soft Landing & an Active Growth ETF
That flexibility could help as markets await a soft landing to fully materialize. The signs are there that an active growth ETF could continue to benefit portfolios. What’s more, as the year draws to an end, a strategy like FDG could appeal as a destination for tax-loss harvesting assets. With tax efficiency thanks to its ETF wrapper, FDG may appeal looking ahead.
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