American Century Diversified Corporate Bond ETF (KORP)KORP

American Century Diversified Corporate Bond ETF (NYSEARCA: BOND) Overview

Profile:

American Century Diversified Corporate Bond ETF (BOND) is an actively managed ETF that invests primarily in investment-grade corporate bonds across various industries. It aims to provide current income and capital appreciation through a diversified portfolio of bonds.

Objective:

The primary objective of BOND is to maximize total return by combining income generation from corporate bonds with capital appreciation potential.

Issuer:

American Century Investments:

• Reputation and Reliability: American Century Investments is a well-established and reputable asset management firm with over 50 years of experience. It manages over $230 billion in assets across various investment products.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income investing.

Market Share:

BOND has a market share of approximately 0.6% in the actively managed corporate bond ETF category.

Total Net Assets:

As of November 7, 2023, BOND has total net assets of approximately $4.5 billion.

Moat:

• Active Management: BOND's active management approach allows the portfolio managers to select individual bonds based on their analysis and outlook, potentially generating alpha compared to passively managed bond ETFs.
• Diversification: The ETF's diversified portfolio across industries and bond maturities aims to mitigate risk and enhance portfolio stability.

Financial Performance:

Over the past 3 years, BOND has delivered a total return of 9.7%, outperforming its benchmark, the Bloomberg Barclays US Corporate Bond Index, which returned 7.4% during the same period.

Growth Trajectory:

The ETF has experienced steady growth in assets under management over the past few years, indicating increasing investor interest in its actively managed approach.

Liquidity:

• Average Trading Volume: BOND has an average daily trading volume of over 200,000 shares, indicating good liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around 0.02%, suggesting low transaction costs.

Market Dynamics:

Factors affecting BOND's market environment include interest rate movements, economic growth, and corporate creditworthiness.

Competitors:

• iShares Aaa - A Rated Corporate Bond ETF (QLTA) - Market share: 1.2%
• Vanguard Intermediate-Term Corporate Bond ETF (VCIT) - Market share: 1.1%

Expense Ratio:

BOND has an expense ratio of 0.35%.

Investment Approach and Strategy:

• Strategy: BOND actively manages its portfolio to select individual investment-grade corporate bonds.
• Composition: The ETF primarily invests in investment-grade corporate bonds across various industries and maturities.

Key Points:

• Actively managed corporate bond ETF with a focus on income and capital appreciation.
• Experienced portfolio management team with a strong track record.
• Diversified portfolio across industries and maturities.
• Outperformed its benchmark over the past 3 years.
• Relatively low expense ratio.

Risks:

• Interest Rate Risk: Rising interest rates can decrease the value of fixed-income investments like bonds.
• Credit Risk: The bonds held by the ETF may experience defaults or downgrades, impacting the portfolio's value.
• Market Risk: Overall market volatility can affect the ETF's performance.

Who Should Consider Investing:

• Investors seeking income and capital appreciation from investment-grade corporate bonds.
• Investors comfortable with the risks associated with actively managed bond ETFs.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

7.5 out of 10

Justification:

BOND demonstrates strong fundamentals based on its experienced management team, diversified portfolio, and historical outperformance. However, the actively managed approach and higher expense ratio compared to some passive bond ETFs slightly lower the overall rating.

Resources and Disclaimers:

• American Century Diversified Corporate Bond ETF website: https://www.americancentury.com/individual/etfs/bond
• Morningstar ETF report: https://www.morningstar.com/etfs/arcx/bond/quote
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.