American Century Sustainable Growth ETF (ESGY)ESGY

American Century Sustainable Growth ETF: An Overview

Profile:

The American Century Sustainable Growth ETF (ACEG) seeks long-term capital appreciation by investing primarily in the common stocks of large and mid-capitalization companies that are domiciled in the United States and demonstrate sustainable business practices. The ETF is actively managed and follows a multi-factor investment approach that combines fundamental analysis, ESG factors, and positive impact investing principles.

Objective:

ACEG aims to provide investors with exposure to a diversified portfolio of sustainable growth companies with a focus on environmental and social responsibility.

Issuer:

American Century Investments was founded in 1958 and is a leading asset management firm with over $213 billion in assets under management. They are known for their commitment to sustainable investing and have been recognized by Morningstar and Forbes for their ESG efforts.

Market Share:

ACEG currently holds around 0.1% market share in the sustainable growth ETF space.

Total Net Assets:

$672.1 million as of October 27, 2023.

Moat:

• Active Management: The ETF leverages American Century's experience and expertise in identifying high-quality sustainable companies.
• ESG Focus: The focus on sustainable businesses provides investors with a way to align their investments with their values.
• Impact Investing: The ETF invests in companies that are committed to positive environmental and social impact.
• Diversification: The portfolio is well-diversified across various sectors and industries.

Financial Performance:

• Year-to-Date (YTD) return: 16.7% (as of October 27, 2023)
• One-year return: 18.7%
• Three-year return: 13.3%

Benchmark Comparison:

Outperformed the S&P 500 Index by 4.7% YTD, indicating the effectiveness of the ETF's active management approach.

Growth Trajectory:

The sustainable investing industry is experiencing significant growth, with assets under management expected to reach $3 trillion by 2025. This trend provides a positive outlook for ACEG's future prospects.

Liquidity:

• Average Trading Volume: 38,000 shares
• Bid-Ask Spread: 0.02%

Market Dynamics:

• Economic Indicators: Strong economic growth and low-interest rates have been favorable for the stock market.
• Sector Growth Prospects: The technology and healthcare sectors, where many sustainable growth companies are present, are expected to remain strong.
• Current Market Conditions: High volatility due to geopolitical events and inflation concerns may present short-term challenges.

Competitors:

• Vanguard ESG U.S. Stock ETF (ESGV)
• iShares ESG Aware MSCI USA ETF (ESGU)
• Nuveen ESG Large-Cap Growth ETF (NULG)

Expense Ratio: 0.38% per year

Investment Approach and Strategy:

• Strategy: The ETF actively selects stocks of companies that meet its sustainable criteria, with a focus on ESG factors and positive impact investing.
• Composition: The portfolio is primarily invested in large and mid-cap US stocks with a focus on sectors like technology, healthcare, and consumer discretionary.

Key Points:

• Active management with a focus on sustainability
• Outperformance against the benchmark
• High liquidity and low expense ratio
• Exposure to a growing industry

Risks:

• Volatility: The stock market is subject to periods of volatility, which may impact the ETF's performance.
• Market Risk: The ETF's performance is dependent on the performance of the underlying companies, which can be negatively affected by factors like economic downturns or industry-specific issues.
• Sustainability Risk: The ETF's focus on sustainability may lead to underperformance compared to non-sustainable investments, especially if ESG factors become less important to investors.

Who Should Consider Investing:

• Investors who want exposure to growth stocks while considering environmental and social factors.
• Investors seeking long-term capital appreciation with a focus on sustainability.
• Investors who prefer active management over passive investing.

Fundamental Rating Based on AI:

Based on the analysis of various factors, including financial health, market position, and future prospects, the AI-based Fundamental Rating for American Century Sustainable Growth ETF (ACEG) is 8 out of 10.

Rationale: The ETF demonstrates a strong track record, active management, and focus on a growing market segment. While risks like market volatility and sustainability challenges are present, the positive factors outweigh these concerns, making ACEG an attractive option for investors seeking sustainable growth.

Resources and Disclaimers:

• American Century Sustainable Growth ETF website: https://www.americancentury.com/individual/product-detail/etfs/aceg
• Morningstar ETF data: https://www.morningstar.com/etfs/arcx/aceg/quote

Disclaimer:

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