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Is American Century U.S. Quality Growth ETF (QGRO) a Strong ETF Right Now?
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The American Century U.S. Quality Growth ETF (QGRO - Free Report) was launched on 09/10/2018, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
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 $630.53 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.29%.
It has a 12-month trailing dividend yield of 0.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 34.70% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Booking Holdings Inc Common Stock Usd.008 (BKNG - Free Report) accounts for about 3.80% of the fund's total assets, followed by Synopsys Inc Common Stock Usd.01 (SNPS - Free Report) and Alphabet Inc Cl C Common Stock Usd.001 (GOOG - Free Report) .
The top 10 holdings account for about 26.2% of total assets under management.
Performance and Risk
Year-to-date, the American Century U.S. Quality Growth ETF return is roughly 12.46% so far, and is up about 12.42% over the last 12 months (as of 10/27/2023). QGRO has traded between $56.32 and $71.72 in this past 52-week period.
The fund has a beta of 1.07 and standard deviation of 22.85% for the trailing three-year period. With about 193 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Growth ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $1.60 billion in assets, iShares Core S&P U.S. Growth ETF has $12.87 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?
The American Century U.S. Quality Growth ETF (QGRO - Free Report) was launched on 09/10/2018, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
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 $630.53 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.29%.
It has a 12-month trailing dividend yield of 0.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 34.70% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Booking Holdings Inc Common Stock Usd.008 (BKNG - Free Report) accounts for about 3.80% of the fund's total assets, followed by Synopsys Inc Common Stock Usd.01 (SNPS - Free Report) and Alphabet Inc Cl C Common Stock Usd.001 (GOOG - Free Report) .
The top 10 holdings account for about 26.2% of total assets under management.
Performance and Risk
Year-to-date, the American Century U.S. Quality Growth ETF return is roughly 12.46% so far, and is up about 12.42% over the last 12 months (as of 10/27/2023). QGRO has traded between $56.32 and $71.72 in this past 52-week period.
The fund has a beta of 1.07 and standard deviation of 22.85% for the trailing three-year period. With about 193 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Growth ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $1.60 billion in assets, iShares Core S&P U.S. Growth ETF has $12.87 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.