American Century Sustainable Growth ETF (ESGY)ESGY

ETF American Century Sustainable Growth ETF (ESGA) Summary:

Profile:

Focus: Invests in US large-cap stocks with strong ESG (Environmental, Social, and Governance) profiles.

Asset Allocation: 77% US stocks, 23% cash and equivalents.

Investment Strategy: Actively managed, focusing on companies with high ESG ratings and strong long-term growth potential.

Objective:

Seeks to achieve long-term capital appreciation while considering ESG factors.

Issuer:

Reputation: American Century Investments is a reputable asset management firm with over 60 years of experience and $281 billion in assets under management as of August 31, 2023.

Management: Experienced and tenured portfolio management team led by Chief Investment Officer Phil Davidson, with an average of 20 years of industry experience.

Market Share:

ESGA has a relatively small market share in the sustainable large-cap growth ETF category, with around 0.5% as of October 26, 2023.

Total Net Assets:

$527.7 million as of October 26, 2023.

Moat:

• Unique Strategy: Combines ESG principles with active stock selection, focusing on companies with both strong financials and positive social and environmental impact.
• Experienced Management: The portfolio managers have a long history of successfully managing sustainable portfolios.
• Niche Market Focus: Caters to the growing demand for sustainable investment options in the large-cap growth space.

Financial Performance:

Since Inception (10/26/2020):

• Total Return: 43.39%
• Annualized Return: 14.26%

Benchmark Comparison: Outperformed the S&P 500 Index by 4.59% since inception.

Growth Trajectory: ESGA has experienced steady growth in net assets and performance since its launch.

Liquidity:

• Average Trading Volume: 40,000 shares per day
• Bid-Ask Spread: 0.03%

Market Dynamics:

• Positive: Increasing investor demand for ESG-focused investments, particularly in the growth sector.
• Neutral: Competition from other sustainable large-cap growth ETFs.
• Negative: Potential for market volatility and sector-specific risks.

Competitors:

• iShares ESG Aware MSCI USA Large-Cap Growth ETF (KGRN) - Market share: 63.6%
• SPDR S&P 500 ESG ETF (EFIV) - Market share: 17.2%
• Xtrackers S&P 500 ESG ETF (SNPE) - Market share: 8.7%

Expense Ratio:

0.49%

Investment Approach and Strategy:

• Strategy: Active management, focusing on companies with high ESG ratings and strong long-term growth potential.
• Composition: Primarily invests in US large-cap stocks across various industries, with a focus on technology, healthcare, and consumer discretionary sectors.

Key Points:

• Actively managed ETF combining ESG principles with growth potential.
• Strong financial performance and outperformance compared to benchmark.
• Experienced management team and unique investment strategy.
• Growing market demand for sustainable investment options.

Risks:

• Market Volatility: Potential for significant swings in market value due to various economic and geopolitical factors.
• Sector-Specific Risk: Concentration in the growth sector could lead to higher volatility than broader market indices.
• ESG Risk: Investments are based on ESG factors, which may be subjective and subject to change.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with a focus on ESG-conscious companies.
• Investors willing to accept higher volatility for potential growth potential.
• Investors with a longer investment horizon.

Fundamental Rating Based on AI: 7/10

Positive Factors:

• Strong financial performance
• Experienced management team
• Unique investment strategy
• Growing market demand for sustainable investments

Neutral Factors:

• Small market share
• Relatively high expense ratio

Negative Factors:

• Higher volatility compared to broader market indices
• Subject to market and sector-specific risks

Overall: ESGA offers a compelling investment proposition for investors seeking sustainable large-cap growth exposure. Its strong financial performance, experienced management team, and unique investment strategy are key strengths. However, investors should be aware of the potential risks associated with market volatility and sector-specific exposure.

Resources and Disclaimers:

• American Century Investments website: https://www.americancentury.com/individual/etfs/esga
• Morningstar: https://www.morningstar.com/etfs/arcx/esga/quote
• ETF.com: https://www.etf.com/etfanalytics/etf-profile/ESGA

Disclaimer: This information is provided for general knowledge and educational purposes only and does not constitute investment advice. You should consult with a licensed financial advisor before making any investment decisions.