American Century Focused Dynamic Growth ETF: Top Performer Post Liberation Day

The American Century Focused Dynamic Growth ETF (FDG) is an actively managed ETF that invests in mid to large-cap growth companies with long-term capital appreciation potential. FDG has outperformed since "Liberation Day" (the day the COVID-19 pandemic restrictions were lifted) and aims to provide concentrated exposure to growth stocks.

The American Century Focused Dynamic Growth ETF (FDG) has shown notable performance since the lifting of COVID-19 pandemic restrictions, an event referred to as "Liberation Day." This actively managed ETF focuses on mid to large-cap growth companies with long-term capital appreciation potential. FDG's strategy of concentrated exposure to growth stocks has proven effective in the post-Liberation Day market conditions.

The recent market dynamics have been influenced by several significant factors. The government bond market has been relatively flat since President Trump announced "Liberation Day" and implemented US tariffs, sparking concerns about inflation. However, a new headwind has emerged in the form of a US government budget bill, which, if approved by the Senate and signed into law, is expected to significantly increase the federal deficit [1].

The bond market's reaction to this bill has been notable, with long-term Treasuries being the biggest losers post-Liberation Day. The 20-plus-year portfolio (TLT) has seen a nearly 8% decline since April 2, while the broad US investment-grade fixed-income benchmark (BND) has shed 1.8% [1]. In contrast, bank loans (BKLN) have held on to a 1.7% gain, and short-term Treasuries (SHY) and a cash proxy (SHV) have posted fractional increases.

The 30-year Treasury yield, a sensitive indicator for inflation expectations, has risen to 5.09%, the highest since late-2023. This increase reflects rising confidence in the passage of President Trump's tax bill, which could add to the deficit [1]. JPMorgan Chase Chief Executive Jamie Dimon has expressed his view that the deficit will be large and growing, aligning with the bond market's outlook.

FDG's performance stands out against this backdrop. The ETF seeks to provide concentrated exposure to growth stocks, a strategy that has proven beneficial in the current market environment. While growth stocks are generally more volatile than value stocks, they tend to outperform in strong bull markets and have shown resilience in the post-Liberation Day period [2].

In terms of sector exposure, FDG's top holdings include Information Technology, Telecom, and Consumer Discretionary sectors, aligning with the growth-oriented strategy of the ETF [2]. The top 10 holdings account for approximately 49.38% of total assets, providing a diversified yet concentrated exposure to growth stocks.

FDG's annual operating expenses are relatively low, at 0.04%, making it an attractive option for investors seeking long-term growth with minimal costs [2]. The ETF's performance has been robust, returning approximately 17.62% in the past year, and it has traded between $71.83 and $92.39 over the past 52 weeks.

In conclusion, the American Century Focused Dynamic Growth ETF (FDG) has demonstrated strong performance since "Liberation Day." Its strategy of investing in mid to large-cap growth companies with long-term capital appreciation potential has proven effective in the current market conditions. While the bond market faces challenges due to the anticipated increase in the federal deficit, FDG's focus on growth stocks positions it well for continued growth in the equity market.

References:
[1] https://seekingalpha.com/article/4789179-most-us-treasury-prices-slide-since-liberation-day
[2] https://finance.yahoo.com/news/spdr-portfolio-p-500-growth-102006866.html