LRGG: Active Large-Cap Growth ETF With A Clear And Unique Strategy

2025-04-19 23:09:54 ET

Summary

• The Macquarie Focused Large Growth ETF offers exposure to 15-25 high-conviction U.S. stocks, aiming to participate in rising markets and weather disruptions.
• The fund's active managers screen for qualitative and quantitative quality, which is evident based on the portfolio's high net and free cash flow margins.
• A long-term performance review of Macquarie's large-cap growth mutual fund reveals a strategy of tighter returns: lower highs but higher lows. Its current portfolio beta is also much lower than average.
• This strategy should work out if there are more frequent market corrections. However, LRGG's inferior GARP features take away some of those benefits. It trades expensive at 27x forward earnings.
• LRGG has its fair share of strengths and weaknesses, but it's not clear whether the strategy is better than what low-cost passive funds already offer. Therefore, I've assigned it a "hold" rating.

Investment Thesis

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