American Century Sustainable Growth ETF (ESGY)

American Century Sustainable Growth ETF (ESGY) Summary

Profile:

The American Century Sustainable Growth ETF (ESGY) is an actively managed ETF that focuses on investing in large and mid-cap US companies with strong Environmental, Social, and Governance (ESG) practices. It utilizes a growth-oriented approach, targeting companies with high earnings growth potential. ESGY's portfolio is diversified across various sectors, with technology, healthcare, and consumer discretionary being the top three holdings.

Objective:

The primary investment goal of ESGY is to achieve long-term capital appreciation by investing in companies that demonstrate sustainable business practices and strong growth potential.

Issuer:

• Name: American Century Investments
• Reputation and Reliability: American Century Investments is a well-established asset management firm with over 50 years of experience and a strong reputation for responsible investing.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in sustainable investing and growth stock selection.

Market Share:

ESGY currently holds a market share of approximately 0.2% within the Sustainable Investing - Large Growth ETF category.

Total Net Assets:

As of November 10, 2023, ESGY has total net assets of approximately $1.2 billion.

Moat:

• Active Management: ESGY's active management approach allows the portfolio managers to select companies with high ESG scores and strong growth potential, potentially outperforming the market.
• Experienced Management Team: The team's expertise in sustainable investing and growth stock selection provides a competitive advantage.
• Diversified Portfolio: The ETF's diversified portfolio across various sectors helps mitigate risk and capture opportunities in different segments of the market.

Financial Performance:

• Historical Returns: Since its inception in 2021, ESGY has delivered a cumulative return of approximately 15%.
• Benchmark Comparison: ESGY has outperformed the Russell 1000 Growth Index by 2% over the same period.

Growth Trajectory:

The sustainable investing market is experiencing significant growth, driven by increasing investor demand for ESG-focused investments. ESGY is well-positioned to benefit from this trend.

Liquidity:

• Average Trading Volume: ESGY has an average daily trading volume of approximately 50,000 shares, indicating decent liquidity.
• Bid-Ask Spread: The bid-ask spread is around 0.05%, demonstrating low trading costs.

Market Dynamics:

• Economic growth, technological advancements, and investor sentiment towards sustainable investing can influence ESGY's performance.
• The ETF's performance may also be affected by factors specific to the growth stock market and the ESG investing landscape.

Competitors:

• iShares ESG Aware MSCI USA ETF (ESGU): 2.7% market share
• Vanguard ESG US Stock ETF (ESGV): 2.4% market share
• Xtrackers MSCI USA ESG Leaders Equity ETF (USSG): 1.5% market share

Expense Ratio:

The expense ratio for ESGY is 0.49%, which is slightly higher than the average for actively managed sustainable investing ETFs.

Investment Approach and Strategy:

• Strategy: ESGY does not track a specific index. Instead, it actively selects stocks based on ESG and growth criteria.
• Composition: The portfolio primarily consists of large and mid-cap US companies across various sectors with strong ESG ratings and high earnings growth potential.

Key Points:

• Actively managed ESG-focused growth ETF
• Strong track record of outperforming the benchmark
• Well-diversified portfolio across various sectors
• Experienced management team
• Decent liquidity and low trading costs

Risks:

• Market Risk: ESGY is exposed to the overall market risks associated with investing in equities.
• Growth Stock Volatility: The ETF's focus on growth stocks exposes it to higher volatility compared to broader market ETFs.
• ESG Data Accuracy and Interpretation: The reliance on ESG data and its interpretation can introduce potential risks and uncertainties.

Who Should Consider Investing:

Investors seeking long-term capital appreciation through exposure to sustainable, high-growth US companies can consider ESGY. However, the ETF's relatively high expense ratio and the risks associated with growth stocks should be carefully evaluated.

Fundamental Rating Based on AI:

Based on an AI-based analysis of financial health, market position, and future prospects, ESGY receives a Fundamental Rating of 7.5 out of 10. This rating is supported by the ETF's strong financial performance, experienced management team, and growing market potential. However, the higher expense ratio and exposure to growth stock volatility are factored into the rating.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• American Century Investments website
• ETF.com
• Morningstar

This information is intended for educational purposes only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial advisor before making any investment decisions.