American Century ETF Trust (AVLC)

American Century ETF Trust: A Comprehensive Overview

Profile: American Century ETF Trust offers several exchange-traded funds (ETFs) covering various sectors and investment strategies. Some of their notable ETFs include:

• American Century Diversified International Small Cap ETF (DGS): Invests in small-cap stocks from developed and emerging markets outside the US.
• American Century Focused Dynamic Growth ETF (FDG): Targets high-growth companies with strong fundamentals and positive momentum.
• American Century STOXX US Quality Growth ETF (QG): Tracks the STOXX USA Quality Growth Index, which focuses on large-cap US companies with high profitability and growth potential.
• American Century Sustainable Equity ETF (ESGA): Invests in US companies with strong environmental, social, and governance (ESG) practices.

Objective: The primary investment goal of American Century ETF Trust is to provide investors with diversified exposure to specific market segments and achieve long-term capital appreciation.

Issuer: American Century Investments is a reputable asset management firm with over 50 years of experience. They manage roughly $285 billion in assets across various investment products, including mutual funds, ETFs, and institutional solutions.

Reputation and Reliability: American Century Investments has a strong reputation for its commitment to rigorous research, active management, and client service. They have received numerous industry awards and accolades for their investment performance and dedication to responsible investing.

Management: The investment team at American Century ETF Trust consists of experienced professionals with expertise in different sectors and asset classes. They leverage their deep research capabilities and active management approach to identify and select investments that align with the specific objectives of each ETF.

Market Share: American Century ETF Trust holds a relatively small market share within the ETF industry. However, they have experienced significant growth in recent years, indicating increasing investor interest in their actively managed ETF offerings.

Total Net Assets: As of November 2023, American Century ETF Trust has approximately $19.5 billion in total net assets under management.

Moat: American Century ETF Trust's competitive advantage lies in its active management approach. Unlike passive ETFs that simply track an index, American Century's ETFs actively select and invest in individual securities, aiming to outperform their respective benchmarks. This active management approach requires significant expertise and resources, which can be a barrier to entry for other asset managers.

Financial Performance: Analyzing historical financial performance data reveals that American Century's ETFs have generally outperformed their respective benchmarks over various time periods. The performance varies depending on the specific ETF and market conditions.

Benchmark Comparison: Comparing the ETF's performance to its benchmark index demonstrates its effectiveness in achieving its investment goals. Actively managed ETFs from American Century often outperform their benchmarks, highlighting the value of their experienced management team and research capabilities.

Growth Trajectory: The growth trajectory of American Century ETF Trust is positive. They have consistently launched new ETFs and attracted growing investor interest in their actively managed approach. This trend suggests continued growth potential for the firm.

Liquidity: American Century ETFs generally have moderate to high average trading volumes, indicating good liquidity. This allows investors to buy and sell shares efficiently without significant price impact. The bid-ask spread, representing the difference between the buying and selling price, is typically narrow, indicating low transaction costs.

Market Dynamics: Market dynamics affecting American Century ETF Trust include economic indicators, sector growth prospects, and current market conditions. For instance, rising interest rates could negatively impact growth-oriented ETFs, while a strong economic recovery could benefit cyclical sector ETFs.

Competitors: Key competitors in the actively managed ETF space include BlackRock, Vanguard, and State Street Global Advisors. These firms offer similar actively managed ETF products across various sectors and asset classes.

Expense Ratio: The expense ratios of American Century ETFs vary depending on the specific product but typically range between 0.35% and 0.65%. These fees are in line with the industry average for actively managed ETFs.

Investment approach and strategy:

• Strategy: Most American Century ETFs actively manage their portfolios, seeking to outperform their benchmarks by selecting individual securities through intensive research and analysis.
• Composition: The asset composition of American Century ETFs varies depending on the specific product. They may hold stocks, bonds, commodities, or a mix of these assets based on their investment objectives and strategy.

Key Points:

• Actively managed approach aiming to outperform benchmarks.
• Experienced investment team with a strong research focus.
• Diversified ETF offerings across various sectors and strategies.
• Competitive expense ratios.
• Growing assets under management.

Risks:

• Volatility: Actively managed ETFs may experience higher volatility than passively managed index ETFs due to their active trading strategies.
• Market Risk: The performance of American Century ETFs is tied to the performance of their underlying assets, which can be affected by various market factors.
• Management Risk: The success of American Century ETFs depends on the skill and experience of their investment team.

Who Should Consider Investing: Investors seeking actively managed exposure to specific sectors or market segments with the potential to outperform their benchmarks may consider American Century ETFs. These ETFs are suitable for investors with a moderate to high-risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI (1-10): 8

Justification: American Century ETF Trust receives a strong rating based on its experienced management team, robust research capabilities, diverse ETF offerings, and competitive expense ratios. Their actively managed approach has historically outperformed benchmarks, demonstrating their ability to generate alpha. However, investors should be aware of the potential for higher volatility and market risk associated with actively managed ETFs.

Resources and Disclaimers:

• American Century Investments website: https://www.americancentury.com/
• ETF.com: https://www.etf.com/etfanalytics/etf-issuer-profile/?symbol=ACS
• Morningstar: https://www.morningstar.com/etfs/issuer/american-century-investments-47088

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.