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Is American Century U.S. Quality Growth ETF (QGRO) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Growth category of the market, the American Century U.S. Quality Growth ETF (QGRO - Free Report) is a smart beta exchange traded fund launched on 09/10/2018.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $873.09 million, this makes it one of the larger ETFs in the Style Box - All Cap Growth. QGRO is managed by American Century Investments. This particular fund, before fees and expenses, seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY GROWTH IND.
The American Century U.S. Quality Growth Index seeks to select securities of large and mid-capitalization U.S. companies with attractive growth and quality fundamentals.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.29% for QGRO, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.38%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
QGRO's heaviest allocation is in the Information Technology sector, which is about 39.10% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Servicenow Inc Common Stock Usd.001 (NOW - Free Report) accounts for about 3.01% of total assets, followed by Booking Holdings Inc Common Stock Usd.008 (BKNG - Free Report) and Alphabet Inc Cl A Common Stock Usd.001 (GOOGL - Free Report) .
The top 10 holdings account for about 25.36% of total assets under management.
Performance and Risk
The ETF has added about 7.76% so far this year and is up roughly 33.96% in the last one year (as of 02/27/2024). In the past 52-week period, it has traded between $60.07 and $82.24.
The fund has a beta of 1.04 and standard deviation of 22.23% for the trailing three-year period. With about 205 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Growth ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Morningstar Growth ETF (ILCG - Free Report) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID and the iShares Core S&P U.S. Growth ETF (IUSG - Free Report) tracks S&P 900 Growth Index. IShares Morningstar Growth ETF has $2.07 billion in assets, iShares Core S&P U.S. Growth ETF has $16.30 billion. ILCG has an expense ratio of 0.04% and IUSG 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 Growth.
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 Growth ETF (QGRO) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Growth category of the market, the American Century U.S. Quality Growth ETF (QGRO - Free Report) is a smart beta exchange traded fund launched on 09/10/2018.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $873.09 million, this makes it one of the larger ETFs in the Style Box - All Cap Growth. QGRO is managed by American Century Investments. This particular fund, before fees and expenses, seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY GROWTH IND.
The American Century U.S. Quality Growth Index seeks to select securities of large and mid-capitalization U.S. companies with attractive growth and quality fundamentals.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.29% for QGRO, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.38%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
QGRO's heaviest allocation is in the Information Technology sector, which is about 39.10% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Servicenow Inc Common Stock Usd.001 (NOW - Free Report) accounts for about 3.01% of total assets, followed by Booking Holdings Inc Common Stock Usd.008 (BKNG - Free Report) and Alphabet Inc Cl A Common Stock Usd.001 (GOOGL - Free Report) .
The top 10 holdings account for about 25.36% of total assets under management.
Performance and Risk
The ETF has added about 7.76% so far this year and is up roughly 33.96% in the last one year (as of 02/27/2024). In the past 52-week period, it has traded between $60.07 and $82.24.
The fund has a beta of 1.04 and standard deviation of 22.23% for the trailing three-year period. With about 205 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Growth ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Morningstar Growth ETF (ILCG - Free Report) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID and the iShares Core S&P U.S. Growth ETF (IUSG - Free Report) tracks S&P 900 Growth Index. IShares Morningstar Growth ETF has $2.07 billion in assets, iShares Core S&P U.S. Growth ETF has $16.30 billion. ILCG has an expense ratio of 0.04% and IUSG 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 Growth.
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.