Jeff Kilburg, Founder and CEO of KKM Financial, joined Keith Black, Managing Director of RIA Channel, to discuss the market’s broadening beyond the large technology stocks that drove market returns in 2025.
The Mango Growth ETF (GARY) was seeded as a 351 conversion when a family office client contributed highly appreciated securities in exchange for a diversified portfolio while deferring its tax liability. The ETF follows the strategy of a previously existing separately managed account (SMA). GARY is an actively managed ETF holding growth stocks that appreciated strongly in the first two months of 2026. The fund holds semiconductor stocks rather than software stocks, which were facing a strong decline across the sector.
Passive ETFs focus on broad-based indices, such as the S&P 500, which allocates 40% of its weight to the largest 10 stocks. In 2026, there is a broadening rotation away from the largest technology names into smaller stocks and more value-oriented sectors. Rather than the Magnificent Seven stocks driving returns, the remaining 493 stocks are now contributing meaningfully to market performance. Kilburg notes that 2026 will be the year of the stock picker, potentially rewarding investors who add actively managed satellite positions to their core index fund exposures.
The Essential 40 ETF (ESN) invests in large-cap value stocks with business lines essential to everyday consumers. Building on Peter Lynch’s philosophy of investing in companies with familiar products, ESN equally weights holdings of companies producing necessary products and services. Kilburg states that holding actively managed funds in the large-cap value and growth objectives gives investors an opportunity to benefit from a broadening market that is likely to reward stock pickers.
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