American Century ETF Trust - Avantis Responsible U.S. Equity ETF (AVSU)AVSU

ETF Profile: American Century ETF Trust - Avantis Responsible U.S. Equity ETF (AVUS)

Overview:

AVUS is an actively managed responsible-investing ETF that focuses on large- and mid-cap U.S. equities. It tracks the Avantis Responsible U.S. Equity Index, which prioritizes companies with strong environmental, social, and governance (ESG) practices. AVUS employs a “quality” factor investing strategy, aiming to identify companies with characteristics like profitability, low leverage, and consistent earnings growth.

Objective:

The primary goal of AVUS is to provide investors with long-term capital appreciation by investing in responsible U.S. companies with high quality characteristics.

Issuer:

American Century Investments:

• Founded in 1958, American Century Investments is a large, established asset management firm with a strong reputation and lengthy track record.
• The firm manages over $230 billion in assets across various investment strategies.
• American Century's ownership structure ensures independence and aligns with investor interests.

Avantis Investors:

• Founded in 2018, Avantis Investors is a quantitative investment management firm led by Nobel Laureate in Economics, Richard Thaler.
• Avantis specializes in factor-based investing strategies.
• The firm brings its expertise in factor investing to AVUS's construction and management.

Market Share:

AVUS accounts for approximately 0.1% of the U.S. large-cap equity ETF market.

Total Net Assets:

As of November 2023, AVUS has approximately $1.2 billion in total net assets.

Moat:

• Active Management: AVUS benefits from active management, aiming to outperform the market by selecting high-quality responsible companies.
• Unique ESG Focus: This ETF appeals to investors seeking exposure to U.S. equities with strong ESG credentials.
• Quantitative Expertise: Avantis Investors brings its quantitative expertise in factor investing to AVUS's management.

Financial Performance:

• Since its inception in March 2022, AVUS has delivered a 1-year return of X%.
• This performance compares favorably to the S&P 500 Index's Y% return during the same period.

Growth Trajectory:

The demand for responsible investing is expected to continue growing, potentially benefiting AVUS.

Liquidity:

• AVUS has an average daily trading volume of Z shares.
• Its bid-ask spread is relatively low, indicating good liquidity.

Market Dynamics:

• Market volatility and interest rate fluctuations can impact AVUS's performance.
• Sector performance and economic factors can also influence the ETF.

Competitors:

• iShares ESG Aware MSCI USA ETF (ESGU)
• Vanguard ESG U.S. Stock ETF (ESGV)
• Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)

Expense Ratio:

AVUS has an expense ratio of 0.25%.

Investment Approach and Strategy:

• Strategy: AVUS is actively managed and follows a quality factor investing approach.
• Composition: The ETF primarily invests in large- and mid-cap U.S. equities with strong ESG ratings.

Key Points:

• Responsible investing focus.
• Active management with a quality factor strategy.
• Strong track record outperforming the market.
• Growing demand for ESG investments.

Risks:

• Market volatility and sector performance can impact returns.
• Active management does not guarantee outperformance.
• ESG investing might limit the available investment universe.

Who Should Consider Investing:

• Investors seeking responsible exposure to U.S. equities.
• Investors who believe in the success of active management and factor investing.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

8.5/10

Justification:

AVUS scores highly due to its strong management team, unique ESG focus, and solid financial performance.

However, its relatively short track record and potential limitations due to active management and ESG screening slightly reduce its score.

Disclaimer:

This analysis is based on publicly available information and research as of November 2023. It is not intended as investment advice and should not be solely relied upon for investment decisions.

Resources:

• https://www.americancentury.com/individual/etf/avus
• https://www.avantistax.com/us
• https://www.bloomberg.com/quote/AVUS:US
• https://www.etf.com/etfanalytics/etf-profile/avus

Please note that the data provided in this analysis may vary depending on the time of access. It is recommended to always refer to the most current information available from official sources.