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

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

Profile

Investment Focus: Large-cap U.S. stocks with a focus on quality and value characteristics.

Asset Allocation: Approximately 80% equities, 20% fixed income.

Investment Strategy: Tracks the STOXX® USA 500 Quality Value Low Beta Index. This index selects stocks based on factors including profitability, financial health, growth potential, and low volatility.

Objective

The primary goal of QVAL is to provide long-term capital appreciation and income through exposure to high-quality, value-oriented U.S. large-cap stocks.

Issuer

American Century Investments

• Reputation and Reliability: American Century Investments is a well-established asset management firm with a strong reputation for delivering investment solutions for over 50 years.
• Management: The ETF is managed by an experienced team of portfolio managers and analysts with a deep understanding of the U.S. equity market.

Market Share and Assets

• Market Share: 0.2% of the U.S. Quality Value ETF market (as of November 2023).
• Total Net Assets: $2.2 billion (as of November 2023).

Moat

• Unique Index: Access to the proprietary STOXX® USA 500 Quality Value Low Beta Index, which offers a distinct approach to identifying undervalued, high-quality companies.
• Experienced Management: The ETF benefits from American Century's long-standing expertise in quantitative and active management strategies.

Financial Performance

• Trailing Returns (as of November 2023):
  • 1-year: 12.5%
  • 3-year: 7.2%
  • 5-year: 9.1%
• Benchmark Comparison: QVAL has outperformed the Russell 1000 Value Index over the past 1, 3, and 5 years.

Growth Trajectory

• Steady growth in assets under management, indicating increasing investor interest.
• Strong performance track record suggests potential for continued positive returns.

Liquidity

• Average Trading Volume: Approximately 70,000 shares per day (as of November 2023).
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity and ease of trading.

Market Dynamics

• Economic Growth: Rising interest rates may impact the valuation of growth stocks, potentially benefiting value-oriented strategies like QVAL.
• Sector Performance: The financial and energy sectors, which are heavily represented in QVAL, have shown positive performance trends in recent months.

Competitors

• iShares S&P 500 Value ETF (IVE): Market share 45%
• Vanguard Value ETF (VTV): Market share 22%
• SPDR S&P 500 Value ETF (SPYV): Market share 18%

Expense Ratio

0.25%

Investment Approach and Strategy

• Strategy: Tracks the STOXX® USA 500 Quality Value Low Beta Index, which uses a quantitative methodology to select stocks.
• Composition: Primarily invested in large-cap U.S. stocks across various sectors, with a focus on value and quality attributes.

Key Points

• Access to a unique, quality-focused value index.
• Strong track record of outperformance.
• Experienced management team.
• Competitive expense ratio.

Risks

• Volatility: The ETF is subject to market fluctuations and may experience periods of volatility.
• Market Risk: The ETF's performance is tied to the performance of the underlying U.S. stock market and specific sectors.
• Value Investing: Value investing strategies may underperform growth-oriented strategies in certain market conditions.

Who Should Consider Investing

• Investors seeking long-term capital appreciation and income.
• Investors with a value investing philosophy.
• Investors looking for exposure to high-quality U.S. large-cap companies.

Fundamental Rating based on AI: 8.5 out of 10

Justification:

• Strong financial performance and consistent outperformance against benchmarks.
• Experienced management team and robust investment process.
• Competitive fees and good overall liquidity.
• Potential for continued growth based on current market dynamics.

Resources and Disclaimers

• American Century Investments website: https://www.americancentury.com/individual/etfs/qval
• STOXX website: https://www.stoxx.com/
• ETF.com: https://www.etf.com/etf-profile/equity/QVAL
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.