American Century ETF Trust (AVLC)

Overview of American Century ETF Trust

Profile

American Century ETF Trust offers a variety of actively managed Exchange Traded Funds (ETFs) covering multiple asset classes and investment strategies. Unlike index-tracking ETFs, these funds utilize experienced portfolio managers to select individual securities with the goal of exceeding benchmark returns.

Objective

The primary investment goal of American Century ETF Trust is to achieve long-term capital appreciation, exceeding the performance of relevant benchmarks while managing investment risk.

Issuer: American Century Investments

• Reputation and Reliability: American Century Investments is a highly respected, independent asset management firm established in 1958. As of June 30, 2023, they manage over $275 billion in assets. The firm boasts a strong track record and reputation for excellent active management within the financial industry.
• Management: American Century ETFs are led by experienced portfolio managers with proven investment expertise. Each fund has a dedicated team focusing on its specific investment objective and strategy.

Market Share

While American Century ETF Trust is a growing player in the ETF space, it remains a relatively small player compared to industry giants like BlackRock and Vanguard. However, the firm continues to gain market share thanks to its strong performance and active management approach.

Total Net Assets

As of August 31, 2023, American Century ETF Trust has approximately $15 billion in total net assets under management, spread across its various actively managed ETFs.

Moat

• Unique Strategies: American Century's active management approach differentiates them from the majority of passively managed ETFs. Their experienced investment teams seek to generate alpha through security selection and portfolio construction.
• Superior Management: The firm boasts a seasoned team of portfolio managers with deep experience and proven track records in their respective areas of expertise.
• Niche Market Focus: American Century offers actively managed ETFs across diverse areas, catering to specific investor needs and preferences beyond just broad market exposure.

Financial Performance

The financial performance of American Century ETFs varies across specific funds and investment mandates. Many actively managed funds underperformed their benchmarks year-to-date in 2023 as the market experienced significant volatility.

For a better understanding of a specific fund's performance, please visit the American Century Investments website and look up the individual fund prospectus. There you can review historical returns, track records, and comparisons to relevant benchmarks.

Growth Trajectory

American Century ETF Trust continues to experience healthy growth in assets under management, fueled by rising demand for actively managed investment solutions. Their strong performance and diverse offerings position them well for continued growth in the competitive ETF landscape.

Liquidity

• Average Trading Volume: Most American Century ETFs trade with decent average daily volume, ensuring sufficient liquidity for investors, especially in larger funds. This allows for buying and selling shares efficiently without significant price impact.
• Bid-Ask Spread: Generally, the bid-ask spread for American Century ETFs falls within the typical range for actively managed funds. The spreads tend to be slightly wider than those of larger, passively managed ETFs due to the less frequent trading.

Market Dynamics

Several factors are relevant to the current market environment for American Century ETF Trust:

• Economic Indicators: The global economic outlook remains uncertain in late 2023, with inflation continuing to pose a challenge. This uncertainty impacts investor sentiment and affects asset prices across markets.
• Sector Growth Prospects: Growth potential differs significantly across sectors. Investors need to carefully select investment themes and strategies aligned with anticipated economic developments.
• Current Market Conditions: The market has experienced high volatility in 2023, impacting all asset classes. Active management approaches that dynamically adjust to changing market conditions may be preferred during such periods.

Competitors

Key competitors in the actively managed ETF space include:

• BlackRock: iShares Active ETFs (e.g., iShares Core Growth Allocation ETF (AOR))
• Vanguard: Vanguard Active ETFs (e.g., Vanguard ESG U.S. Stock ETF (ESGV))
• State Street Global Advisors: SPDR ETFs (e.g., SPDR S&P 500 ETF Trust (SPY))

Each competitor holds varying market share percentages depending on the specific sector and investment strategy.

Expense Ratio

Expense ratios for American Century ETFs vary depending on the specific fund. They generally fall within the average range for actively managed ETFs, typically between 0.35% to 0.65% annually. For detailed expense ratio information of a specific fund, refer to the fund prospectus on the American Century Investments website.

Investment Approach and Strategy

American Century ETFs employ active management strategies, meaning portfolio managers make independent investment decisions aiming to outperform relevant benchmarks. The approach and composition vary across individual funds:

• Strategy: Some actively managed ETFs aim to track a specific index (e.g., S&P 500) closely, while others adopt more flexible mandates focusing on specific themes, sectors, or asset allocation strategies.
• Composition: Depending on the strategy, an ETF may hold diverse assets like stocks, bonds, commodities, or a combination tailored to its objective.

For specific details on a particular fund's strategy and composition, please refer to its prospectus on the American Century Investments website.

Key Points

• American Century ETF Trust provides actively managed exposure across numerous asset classes and investment strategies.
• Experienced portfolio managers aim to generate alpha through active security selection and portfolio construction.
• The firm prioritizes long-term capital appreciation while actively managing investment risk.
• American Century ETFs cater to investors seeking alternatives to traditional indexing strategies.

Risks

Investing in American Century ETFs involves various risks:

• Volatility: Actively managed ETFs often exhibit higher volatility compared to passively managed, index-tracking funds. This means their share prices can fluctuate more significantly due to the active management approach.
• Market Risk: All underlying assets held by the ETFs are subject to market risks associated with their respective asset classes. These risks include events like changing interest rates, economic downturns, and geopolitical instability, all impacting security and portfolio values.

For a complete understanding of specific risks associated with a particular fund, please refer to its prospectus on the American Century Investments website.

Who Should Consider Investing

Investors seeking:

• Actively managed ETF options beyond standard index trackers
• Potential for alpha generation through experienced portfolio management
• Diversification across multiple asset classes and investment strategies

may find American Century ETF Trust suitable for their investment needs. However, remember that active management comes with potentially higher costs and volatility compared to passive ETFs.

Fundamental Rating Based on AI

Based on various factors analyzed including financial health, market position, and future prospects, American Century ETF Trust receives a 7 out of 10 Fundamental Rating from our AI-based system.

This score reflects its solid overall performance, experienced management team, and diverse product offerings. However, the relatively smaller market share and higher expense ratios compared to some larger competitors contribute to the score. The firm continues to establish itself in the highly competitive actively managed ETF space, demonstrating promising growth potential.

Resources and Disclaimers

Resources:

• American Century Investments website: https://www.americancentury.com/individual/etfs
• ETF Database: https://etfdb.com/etfs/american-century-etf-trust

Disclaimer:

This overview provides general information and analysis about American Century ETF Trust. It is not financial advice and should not be solely relied upon for investment decisions. Individual investors should conduct their own due diligence, considering their specific investment goals, risk tolerance, and financial circumstances before making any investment decisions.