American Century ETF Trust (FLV)FLV

ETF American Century ETF Trust Overview

Profile: ETF American Century ETF Trust currently encompasses three distinct ETFs: American Century Sustainable Equity ETF (ESGA), American Century Sustainable Growth ETF (ESGG), and American Century Low Duration Multi-Sector Income ETF (LQDI).

• Focus: Sustainability and income generation.
• Asset Allocation: Stocks (ESGA, ESGG) and bonds (LQDI).
• Investment Strategy:
  • ESGA and ESGG track custom sustainability-focused market indexes, incorporating ESG factors into company selection.
  • LQDI invests in investment-grade debt securities with maturities less than three years to mitigate interest rate risk.

Objective:

• ESGA: Seek long-term capital appreciation by investing in companies demonstrating strong environmental, social, and governance (ESG) practices while minimizing carbon footprint.
• ESGG: Generate long-term capital growth by investing in growing companies with strong ESG profiles.
• LQDI: Generate current income while preserving capital.

Issuer: American Century Investments

• Reputation and Reliability: Founded in 1958, American Century is a reputable asset management firm with strong financial performance and consistent leadership. They are known for their active management approach and long-term investment strategies.
• Management: The ETFs are managed by seasoned portfolio managers with extensive experience in sustainable investing and fixed income investing.

Market Share:

• ESGA: 0.01% (Small-cap ESG)
• ESGG: 0.008% (ESG Broad Market)
• LQDI: 0.002% (Short Duration Bond)

Total Net Assets:

• ESGA: $22.35 million
• ESGG: $52.53 million
• LQDI: $4.47 million

Moat:

• Unique Strategies: ESGA's and ESGG's focus on sustainability distinguishes them in their respective categories. LQDI's emphasis on short-duration bonds provides a distinct risk profile for income generation.
• Superior Management: American Century's experienced management team and active management approach add value to these ETFs.

Financial Performance:

• Historical data:
  • ESGA: Inception date: 7/8/2022.
  • ESGG: Inception date: 7/6/2022.
  • LQDI: Inception date: 8/2/2022.

Analyzing the short performance history is not advisable due to insufficient data. More time is needed to assess their long-term performance trends.

Growth Trajectory: Due to their recent inception date, it is too early to evaluate their growth trajectory accurately. Observing their performance over the next few years will provide a better understanding of their growth potential.

Liquidity:

• Average Trading Volume:
  • ESGA: 2,487 shares
  • ESGG: 2,332 shares
  • LQDI: 115 shares
• Bid-Ask Spread:
  • ESGA: 0.04%
  • ESGG: 0.04%
  • LQDI: 0.05%

These figures indicate relatively low levels of trading activity and slightly higher spreads in LQDI, potentially due to its smaller size.

Market Dynamics: Factors affecting these ETFs include:

• Sustainability trends: Growing investor preference for sustainable investments could benefit ESGA and ESGG.
• Interest rate movements: LQDI's sensitivity to interest rate changes could impact its performance.
• Economic growth: Overall economic conditions can influence all three ETFs as they invest in stocks and bonds.

Key Competitors:

• ESGA: iShares ESG Aware MSCI USA Small-Cap ETF (ESML), Vanguard ESG US Small-Cap Stock ETF (VSES)
• ESGG: iShares ESG Aware MSCI USA ETF (ESGU), Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)
• LQDI: Vanguard Short-Term Bond ETF (BSV), iShares Short Treasury Bond ETF (SHV)

Expense Ratio:

• ESGA: 0.33%
• ESGG: 0.32%
• LQDI: 0.25%

These expense ratios fall within the moderate range for actively managed ESG and short-duration bond ETFs.

Investment Approach and Strategy:

• Tracking Benchmark:
  • ESGA tracks a custom ESG-focused US small-cap index.
  • ESGG tracks a custom ESG-focused US broad market index.
  • LQDI does not track a specific index but rather selects investment-grade short-duration bonds.

Composition:

• ESGA and ESGG primarily hold small-cap and large-cap US stocks, respectively, with ESG considerations influencing their composition.
• LQDI invests in US government, agency, and corporate bonds with maturities under three years.

Key Points:

• ESG-focused investing for conscious investors (ESGA, ESGG).
• Income generation with lower interest rate risk (LQDI).
• Active management by experienced professionals.
• Moderately competitive expense ratios.

Risks:

• Volatility: Due to their equity exposure, ESGA and ESGG are susceptible to market fluctuations.
• Market Risk: All three ETFs can be impacted by adverse economic events and changes in interest rates.
• Tracking Error: As actively managed ETFs, their performance might deviate from their benchmarks.

Who Should Consider Investing:

• Investors seeking alignment with sustainability goals (ESGA, ESGG).
• Investors seeking current income with lower volatility (LQDI).
• Those comfortable with actively managed strategies and expense ratios within the moderate range.

Fundamental Rating Based on AI:

Based on an AI analysis considering the factors mentioned above, we assign a 7/10 Fundamental Rating to American Century ETF Trust. This score reflects its strengths, including strong management, unique strategies, and commitment to sustainability. The recent inception date limits an assessment of their long-term performance and growth.

Resources and Disclaimers:

Data in this analysis is sourced from:

• American Century ETF Trust website: https://americancentury.com/individual/etfs
• YCharts: https://ycharts.com/
• Morningstar: https://www.morningstar.com/

Important disclaimer: This report is for informational purposes only and should not be considered investment advice. Investing involves risk, and investors should independently research and carefully consider their investment objectives, risk tolerance, and financial circumstances before making any investment decisions.