American Century launches three new ETFs

Sep 13th, 2018 | By | Category: Alternatives / Multi-Asset

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American Century Investments has launched three new ETFs on NYSE Arca. The funds include two passively managed smart beta products providing exposure to international and US equities and an actively managed municipal bond portfolio.

American Century Investments ETFs

American Century debuted their first ETFs in January 2018.

The trio of funds comes eight months after the Kansas City, Missouri-based asset manager, which overseas in excess of $170bn in assets, debuted its first ETFs.

The newly launched funds are the American Century Quality Diversified International ETF, the American Century Stoxx US Quality Growth ETF and the American Century Diversified Municipal Bond ETF.

“We are building a line-up of ETFs that apply our unique insights to solve common investment problems and help investors achieve their goals,” said Edward Rosenberg, Senior Vice President and Head of ETFs for American Century Investments. “We are excited to launch these additional funds.”

Quality international stocks

The American Century Quality Diversified International ETF (QINT US) tracks the American Century Quality Diversified International Index, designed to select securities with attractive growth, valuation, and quality fundamentals.

The parent universe of the index is comprised of large- and mid-capitalization equities in developed and emerging markets, excluding the United States. The methodology first applies American Century’s own “Intelligent Beta” screening process to narrow the field down to those stocks exhibiting higher profitability, return on assets, return on equity, and gross margins.

The index then determines a growth score and a value score for each selected security. The growth scores are based on sales, earnings, operating income, profitability and cash flows, while the value scores are based on value, earnings yield, dividend yield, and cash flow metrics.

Typically, the index will consist of over 400 securities, with constituents weighted based on their combined growth and value scores. Reconstitution and rebalancing occur on a quarterly schedule.

QINT comes with an expense ratio of 0.39%. Income is distributed to investors on a semi-annual basis.

Quality growth US stocks

The American Century Stoxx US Quality Growth ETF (QGRO US) tracks the iStoxx American Century USA Quality Growth Index, emphasizing both stable growers as well as high quality, high-growth companies.

The methodology also starts by applying the “Intelligent Beta” process to the parent Stoxx USA 900 Index.

Remaining stocks are then assigned a growth score based on sales, earnings, operating income, profitability and cash flows – and uses the score to weight the remaining constituents. Typically the index will consist of over 200 securities. The index is also reconstituted and rebalanced monthly.

QGRO has an expense ratio of 0.29%. Income is distributed to investors quarterly.

Municipal bonds

The third fund, the American Century Diversified Municipal Bond ETF (TAXF US), is an actively managed fund targeting current income exempt from federal income tax through a portfolio of US municipal bonds including up to a 35% allocation to bonds with high yield credit ratings.

TAXF comes with an expense ratio of 0.29%.

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