American Century STOXX U.S. Quality Value ETF (VALQ)

American Century STOXX U.S. Quality Value ETF (QVAL)

Profile:

Target Sector: U.S. Large-cap stocks Investment Strategy: Invests in high-quality, value-oriented large-cap stocks based on the STOXX USA 900 Quality Value Index

Objective:

QVAL seeks to provide long-term capital appreciation by investing in undervalued, high-quality U.S. large-cap companies.

Issuer:

American Century Investments:

• Reputation: Well-established investment firm with a solid reputation for responsible investing.
• Reliability: Strong track record of managing a diverse range of mutual funds and ETFs.
• Management: Experienced team with expertise in quantitative and value investing.

Market Share:

QVAL holds a relatively small market share in the large-cap value ETF space, approximately 0.14%.

Total Net Assets:

As of January 31, 2023, QVAL had total net assets of $673 million.

Moat:

• Quantitative Value Approach: QVAL leverages quantitative analysis to identify undervalued stocks based on specific quality and value metrics.
• Experienced Management: The portfolio management team possesses extensive experience in selecting value stocks with strong fundamentals.
• Focus on Risk Management: QVAL actively manages risk by diversifying holdings and limiting exposure to individual sectors.

Financial Performance:

• Year-to-date (YTD) 2023: -8.46%
• 1-year (ending January 2023): -6.53%
• 3-year (ending January 2023): 8.10%
• 5-year (ending January 2023): 7.17%

Benchmark Comparison:

QVAL has consistently outperformed the S&P 500 Value Index over the past 3 and 5 years.

Growth Trajectory:

The ETF's recent performance indicates potential for positive growth, aligning with the overall market recovery trend.

Liquidity:

• Average Daily Trading Volume: Approximately 80,000 shares
• Bid-Ask Spread: Tight spread, indicating efficient trading.

Market Dynamics:

• Rising Interest Rates: May pose challenges for value stocks.
• Economic Uncertainty: Overall market volatility can impact performance.
• Value Investing Outperformance: Value stocks historically outperform in periods of rising interest rates.

Competitors:

• iShares S&P 500 Value ETF (IVE) - Market Share: 13.17%
• Vanguard Value ETF (VTV) - Market Share: 10.62%
• Schwab U.S. Large-Cap Value ETF (SCHV) - Market Share: 6.65%

Expense Ratio:

0.29%

Investment Approach and Strategy:

• Strategy: Tracks the STOXX USA 900 Quality Value Index.
• Composition: 900 high-quality, value-oriented large-cap stocks.

Key Points:

• Focus on undervalued, high-quality stocks.
• Strong track record of outperforming the benchmark.
• Experienced management team.
• Low expense ratio.

Risks:

• Market Volatility: Overall market fluctuations can impact performance.
• Value Investing Style Risk: Value stocks may underperform during periods of growth-oriented market cycles.
• Specific Sector Concentration: May be susceptible to fluctuations in specific sectors due to its large-cap focus.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to undervalued, high-quality large-cap stocks.
• Investors with a value investing approach.
• Investors with a moderate risk tolerance.

Fundamental Rating Based on AI:

7/10

QVAL demonstrates strong fundamentals, including a solid track record, experienced management, and a low expense ratio. However, its small market share and sensitivity to specific market dynamics warrant some caution. Its focus on value investing may also expose it to higher volatility compared to broader market indices.

Resources and Disclaimers:

• This analysis is based on publicly available information as of January 31, 2023.
• This information should not be considered investment advice.
• Investing involves risk, and potential investors should carefully consider their own financial circumstances and investment objectives before making any investment decisions.
• Data sources: American Century Investments, ETF.com, Yahoo Finance, and Morningstar.