American Century cuts fee on diversified corporate bond ETF

Jun 20th, 2019 | By | Category: Fixed Income

Factor Investing Strategy Briefing - Thursday 29th June 2023 - The Connaught, Mayfair. Please join us for our annual smart beta and factor investing event, featuring Goldman Sachs Asset Management, FlexShares, First Trust, MSCI and WisdomTree. Please register now if you would like to attend.

American Century Investments has reduced the management fee on the American Century Diversified Corporate Bond ETF (KORP US) from 0.45% to 0.29%.

ETF Fee Savings costs

The fund’s management fee has been lowered from 0.45% to 0.29%.

“With KORP now exceeding $60 million [in assets] and attracting steady flows, we decided to reduce the fees in order to provide better value to investors,” said Edward Rosenberg, Head of ETFs for American Century Investments.

“Our goal has always been to provide a line-up of ETFs that apply our unique insights to solve common investment problems.”

The fund, which was launched in January 2018, is actively managed with a focus on income generation and a secondary target of capital appreciation.

The strategy seeks to provide enhanced yield versus traditional investment grade credit benchmarks but also reduced downside compared to high-yield. It primarily targets US dollar-denominated, investment-grade debt issued by US and international corporate entities, but may also dynamically allocate up to 35% of its portfolio to high-yield bonds.

By integrating fundamental and quantitative analysis, the portfolio management team strives for enhanced return potential versus traditional cap-weighted passive portfolios.

The ETF targets a portfolio duration between three and seven years.

The fund currently has 109 holdings and is offering a yield of 3.3% with an effective duration of 3.7 years. Roughly 85% of the exposure is allocated to investment-grade securities with the remainder comprising high-yield bonds and emerging market debt.

Tags: , , , , ,

Leave a Comment