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Is American Century U.S. Quality Value ETF (VALQ) a Strong ETF Right Now?
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The American Century U.S. Quality Value ETF (VALQ - Free Report) was launched on 01/11/2018, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $208.31 million, this makes it one of the larger ETFs in the Style Box - All Cap Value. VALQ is managed by American Century Investments. Before fees and expenses, VALQ seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY VALUE INDX.
The American Century U.S. Quality Value Index seeks to select securities of large and mid-capitalization companies that are undervalued or have sustainable income.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.29%.
The fund has a 12-month trailing dividend yield of 1.60%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 25.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Consumer Staples round out the top three.
Taking into account individual holdings, Te Connectivity Ltd Common Stock Chf.57 (TEL - Free Report) accounts for about 2.66% of the fund's total assets, followed by Walmart Inc Common Stock Usd.1 (WMT - Free Report) and Qualcomm Inc Common Stock Usd.0001 (QCOM - Free Report) .
Its top 10 holdings account for approximately 23.42% of VALQ's total assets under management.
Performance and Risk
The ETF has added roughly 5.14% so far this year and was up about 18.05% in the last one year (as of 04/25/2024). In the past 52-week period, it has traded between $46.45 and $58.30.
The fund has a beta of 0.94 and standard deviation of 15.02% for the trailing three-year period. With about 232 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Value ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $9.61 billion in assets, iShares Core S&P U.S. Value ETF has $16.83 billion. DFAT has an expense ratio of 0.28% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is American Century U.S. Quality Value ETF (VALQ) a Strong ETF Right Now?
The American Century U.S. Quality Value ETF (VALQ - Free Report) was launched on 01/11/2018, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $208.31 million, this makes it one of the larger ETFs in the Style Box - All Cap Value. VALQ is managed by American Century Investments. Before fees and expenses, VALQ seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY VALUE INDX.
The American Century U.S. Quality Value Index seeks to select securities of large and mid-capitalization companies that are undervalued or have sustainable income.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.29%.
The fund has a 12-month trailing dividend yield of 1.60%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 25.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Consumer Staples round out the top three.
Taking into account individual holdings, Te Connectivity Ltd Common Stock Chf.57 (TEL - Free Report) accounts for about 2.66% of the fund's total assets, followed by Walmart Inc Common Stock Usd.1 (WMT - Free Report) and Qualcomm Inc Common Stock Usd.0001 (QCOM - Free Report) .
Its top 10 holdings account for approximately 23.42% of VALQ's total assets under management.
Performance and Risk
The ETF has added roughly 5.14% so far this year and was up about 18.05% in the last one year (as of 04/25/2024). In the past 52-week period, it has traded between $46.45 and $58.30.
The fund has a beta of 0.94 and standard deviation of 15.02% for the trailing three-year period. With about 232 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Value ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $9.61 billion in assets, iShares Core S&P U.S. Value ETF has $16.83 billion. DFAT has an expense ratio of 0.28% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.