ETF Rising Stars: The Breakout Funds of 2025

Alger 35 ETF

ATFV

+0.78%

It’s refreshing to see a truly concentrated active ETF that isn’t just closet indexing. AFTV is doing active management right, in my view. Launched in May 2025, it’s already outperforming the S&P 500 over that period, with an annualized 13.90% NAV return versus 12.84% for the index.

That performance ranks it at the top of 1,024 large-cap growth funds tracked by Morningstar based on risk-adjusted returns, earning it a five-star rating.

As the name implies, ATFV holds a focused portfolio of around 35 large-cap U.S. stocks, selected through a fundamentals-based process. It’s managed by Dan Chung, CFA, the firm’s CEO and CIO, and George Ortega, Senior Vice President and Portfolio Manager.

The ETF maintains a 72.81% active share, meaning nearly three-quarters of its holdings differ from the benchmark—a sign of genuine conviction investing rather than benchmark hugging.

The current portfolio skews toward technology and communication services stocks while remaining underweight financials, reflecting its growth-oriented tilt. Forecasted sales and earnings-per-share growth for holdings are both meaningfully higher than those of the S&P 500.

One thing I appreciate about this fund is its transparency. The website breaks down sector and stock-level attribution, clearly showing which holdings have contributed to or detracted from returns. That level of disclosure is rare among active ETF managers and should be the standard.

ATFV currently holds about $104 million in assets with a 0.55% expense ratio, and it’s growing fast, bringing in $38 million in net inflows over the past month. For investors looking for concentrated, high-conviction active management in ETF form, ATFV stands out as a promising newcomer.

Franklin U.S. Core Dividend Tilt Index ETF

UDIV

+0.08%

For investors who want a low-cost, rules-based way to tilt toward dividend payers, UDIV is an appealing alternative. It charges just 0.06%, making it one of the cheapest large-cap core equity ETFs available.

UDIV’s strategy mirrors the broad exposure of benchmarks like the S&P 500 but places greater emphasis on companies with consistent dividend payments. The portfolio holds 291 stocks, and the result is a slight reduction in the dominance of the technology sector while increasing exposure to health care, consumer staples, and industrials.

I see this ETF as an excellent tax-loss harvesting candidate for investors holding broad U.S. equity ETFs. It provides nearly identical beta exposure to the S&P 500 while being different enough in construction to qualify as a separate fund under wash-sale rules. That makes it easy to stay invested while capturing losses for tax efficiency.

UDIV currently manages just over $107 million in assets and has seen $24 million in net inflows over the past month—momentum that suggests investors are beginning to take notice of its balanced, cost-effective approach.

VanEck Alternative Asset Manager ETF

GPZ

-2.49%

There’s been a rush lately to bring private assets—whether equity stakes held through special purpose vehicles or private credit exposure—into the ETF structure. Regulators cap these allocations at 15%, but I’m not a fan of the idea.

In my opinion, it runs counter to what ETFs are meant to be: transparent, liquid, and easily tradable. Once you start filling them with illiquid holdings that can’t be marked to market, you lose much of what makes the structure efficient in the first place.

A more thoughtful approach, in my view, is something like GPZ. Rather than holding private assets directly, it tracks the MarketVector Alternative Asset Managers Index, which invests in the publicly listed parent companies of private equity, venture capital, private credit, real estate, and infrastructure firms.

Think Brookfield, Blackstone, KKR, Apollo, Ares, TPG, Onex, and Blue Owl—the giants that actually manage the private capital behind the scenes.

I see GPZ as a practical way to add a liquid, quasi-private sleeve to an equity allocation without sacrificing transparency or daily liquidity. It’s a clean, diversified way to benefit from the growth of private markets while staying fully within the ETF structure.

The 0.40% expense ratio is reasonable for this niche exposure, and the ETF has already gained traction—since launching in June 2025, it’s grown to $109 million in assets and taken in $23 million in net inflows over the past month.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.