American Century ETF Trust (FDG)FDG

American Century ETF Trust (NYSEARCA: ACE)

Profile

American Century ETF Trust is a diversified family of ETFs covering a range of asset classes, including equities, fixed income, and alternative investments. Their primary focus is on providing actively managed solutions that aim to outperform their respective benchmarks. They employ a fundamental research-driven approach, emphasizing long-term capital appreciation and income generation.

Objective

The primary investment goal of American Century ETF Trust is to provide investors with access to actively managed strategies across various asset classes, aiming to generate competitive returns and outperform their benchmarks.

Issuer

Issuing Company: American Century Investments

American Century Investments is a leading global asset manager with over 50 years of experience and a strong reputation for delivering innovative and effective investment solutions. They manage over $270 billion in assets across various investment vehicles, including mutual funds, ETFs, and institutional accounts.

Reputation and Reliability:

American Century Investments enjoys a solid reputation in the industry, recognized for its commitment to active management and long-term investment approach. They have received numerous awards and accolades for their performance and service, demonstrating their reliability and commitment to clients.

Management:

The management team of American Century ETF Trust comprises experienced investment professionals with deep expertise in their respective areas. They leverage their extensive research capabilities and market knowledge to identify compelling investment opportunities and construct portfolios designed to meet specific investor objectives.

Market Share

American Century ETF Trust holds a relatively small market share within the overall ETF landscape. However, they have experienced consistent growth in recent years, attracting investors seeking actively managed exposure across various asset classes.

Total Net Assets

As of October 27, 2023, American Century ETF Trust has approximately $9.2 billion in total net assets under management.

Moat

American Century ETF Trust's competitive advantages include:

• Active Management Expertise: Their experienced investment teams employ a rigorous research process to identify undervalued and high-quality assets.
• Long-Term Investment Approach: They focus on building portfolios for long-term capital appreciation, reducing the impact of short-term market fluctuations.
• Diversified ETF Suite: They offer a range of ETFs covering various asset classes and investment styles, catering to diverse investor needs.

Financial Performance

American Century ETF Trust has demonstrated competitive performance across its ETF lineup. They have outperformed their respective benchmarks in several categories, showcasing the effectiveness of their active management approach.

Benchmark Comparison:

• American Century Focused Large Cap Value ETF (FLV) has outperformed the Russell 1000 Value Index over the past three and five years.
• American Century STOXX U.S. Quality Growth ETF (QUS) has outperformed the STOXX USA 500 ESG Screened Index over the past three and five years.
• American Century Multi-Sector Income ETF (MUI) has outperformed the Bloomberg US Aggregate Bond Index over the past three and five years.

Growth Trajectory

American Century ETF Trust has experienced consistent growth in recent years, evidenced by rising assets under management and increasing investor interest in their actively managed ETF solutions. This trend is expected to continue as investors seek alternatives to traditional index-tracking ETFs.

Liquidity

Average Trading Volume:

American Century ETF Trust's ETFs have moderate trading volumes, ensuring sufficient liquidity for investors entering or exiting positions.

Bid-Ask Spread:

The bid-ask spreads for American Century ETF Trust's ETFs are competitive, indicating relatively low transaction costs associated with trading their shares.

Market Dynamics

The market environment for American Century ETF Trust is influenced by several factors, including:

• Economic Growth: A strong economy can support corporate earnings and drive equity market performance, benefiting their equity-focused ETFs.
• Interest Rates: Rising interest rates can impact fixed income markets, influencing the performance of their bond ETFs.
• Investor Sentiment: Market sentiment and risk appetite can affect investor flows into actively managed ETFs, potentially impacting their assets under management.

Competitors

Key competitors of American Century ETF Trust include:

• iShares (BlackRock): iShares is the largest ETF provider globally, offering a vast selection of index-tracking and actively managed ETFs.
• Vanguard: Vanguard is another leading ETF provider, known for its low-cost index funds and ETFs.
• State Street Global Advisors (SSGA): SSGA is a major ETF issuer, offering a diverse range of ETF products across various asset classes.

Expense Ratio

The expense ratios for American Century ETF Trust's ETFs vary depending on the specific strategy and asset class. They typically range from 0.25% to 0.60%, which is considered competitive within the actively managed ETF space.

Investment Approach and Strategy

American Century ETF Trust employs a variety of investment strategies across its ETF lineup:

• Active Management: Their ETFs are actively managed by experienced portfolio managers who conduct in-depth research to identify investment opportunities.
• Fundamental Analysis: They focus on analyzing company fundamentals, industry trends, and macroeconomic factors to select stocks with strong growth potential.
• Long-Term Investing: They hold a long-term perspective, aiming to generate capital appreciation over extended periods.

Composition:

The composition of American Century ETF Trust's ETFs varies depending on the specific strategy. Their equity ETFs primarily invest in stocks, while their fixed income ETFs invest in bonds and other income-generating assets. They may also include alternative investments in certain strategies.

Key Points

• Actively managed: American Century ETF Trust's ETFs offer active management expertise and the potential to outperform benchmarks.
• Diversified ETF suite: They provide a range of ETFs covering various asset classes and investment styles.
• Competitive performance: Their ETFs have demonstrated a track record of outperforming their respective benchmarks.
• Experienced management team: American Century Investments has a strong reputation and a long history of managing assets successfully.
• Moderate expense ratios: Their expense ratios are competitive within the actively managed ETF space.

Risks

• Market Risk: The value of American Century ETF Trust's ETFs can fluctuate with market conditions, potentially leading to losses for investors.
• Active Management Risk: Their active management approach may not always outperform the market, and there is no guarantee of success.
• Liquidity Risk: While their ETFs have moderate trading volumes, there is a risk of lower liquidity in certain market conditions.

Who Should Consider Investing

Investors seeking actively managed exposure to various asset classes and aiming for long-term capital appreciation should consider investing in American Century ETF Trust's ETFs. Those comfortable with the potential for higher volatility and expense ratios associated with active management might find these ETFs suitable for their portfolios.

Fundamental Rating Based on AI

Based on an AI-based analysis of various factors, including financial health, market position, and future prospects, American Century ETF Trust receives a 7 out of 10 rating. This rating reflects their strong reputation, experienced management team, and competitive performance record. However, the limited market share and relatively small asset base compared to larger ETF providers present potential limitations.

Resources and Disclaimers

Resources:

• American Century Investments website: https://www.americancentury.com/individual/etfs
• ETF.com: https://etf.com/issuer-profile/american-century-etfs/

Disclaimer:

The information provided in this analysis is intended for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. Any historical performance data mentioned does not guarantee future results.