American Century Focused Dynamic Growth ETF

FDG

Market cap $355M

Investors love their growth ETFs. The ETF explosion coincided with a lower interest rate environment that was kind to tech-heavy, growth-focused funds.

American Century Focused Dynamic Growth is an active nontransparent ETF favoring companies with revenues and earnings "growing at an accelerated pace," with a concentrated portfolio. I initiate coverage of FDG with a Hold rating owing to its mixed returns (i.e., it has underperformed QQQ, SCHG, and IWF since its inception). This year, its returns have been strong thanks to concentration (36 stocks as of June 30), high beta, and outstanding growth characteristics.

2025 is more than halfway through, with plenty of ups and downs already in the rearview mirror. The path ahead may not be smooth, however, despite the late spring recovery from early turbulence.

These days, it's becoming harder to look at the headlines and not worry about how the news will affect one's investing. Macro concerns don't seem to be slowing down any time soon, either.

FDG offers a concentrated, high-growth portfolio with mega-cap tech, consumer discretionary, and healthcare overweights, but limited diversification versus peers. The fund trades at a premium valuation (28.8x earnings), reflecting strong growth but raising concerns about risk, volatility, and downside exposure. Performance is volatile: strong in bull markets but underperforms and suffers steeper drawdowns in downturns, with higher costs and lower liquidity than competitors.

American Century Focused Dynamic Growth ETF is an actively managed ETF focusing on 30–45 high-growth, mid-to-large-cap U.S. companies, that has consistently outperformed the Russell 1000 Growth benchmark. The fund's concentrated, differentiated portfolio and disciplined stock selection have generated strong returns post-Liberation Day, with strong risk-adjusted results. Given its track record, reasonable fees, and skilled management, I maintain a Buy rating for FDG as a compelling growth ETF option.

For the last few years, growth strategies have easily cemented themselves as the belle of the ball for equity investors.  That being said, 2025 hasn't been especially kind to many tried-and-true large-cap growth strategies.

As the ETF universe continues to grow with new launches, advisors and investors shouldn't lose sight of established, consistently performing strategies. The actively managed American Century Focused Dynamic Growth ETF (FDG) and the American Century Focused Large Cap Value ETF (FLV) recently crossed five years in trading at the end of March.

FDG is an actively managed ETF that invests in 30-45 mid- to large-cap growth companies and has outperformed the Russell 1000 Growth ETF benchmark since inception. Despite skepticism towards actively managed ETFs, FDG has consistently beaten its benchmark with a 0.45% expense ratio, offering strong returns. The fund's portfolio is distinct, focusing on consumer discretionary, reduced tech holdings, and smaller growth stocks, contributing to its outperformance.

2025 offers a new set of opportunities for investors, many of whom are refreshing their portfolios. Those investors looking at their investing options, which include a rising class of active ETFs, face a market dominated by just a few names.