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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?
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $890.59 million, this makes it one of the larger ETFs in the Style Box - All Cap Growth. QGRO is managed by American Century Investments. QGRO seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY GROWTH IND before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 0.34%.
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.
For QGRO, it has heaviest allocation in the Information Technology sector --about 38% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Booking Holdings Inc Common Stock Usd.008 (BKNG - Free Report) accounts for about 3.03% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Servicenow Inc Common Stock Usd.001 (NOW - Free Report) .
The top 10 holdings account for about 24.86% of total assets under management.
Performance and Risk
Year-to-date, the American Century U.S. Quality Growth ETF has added about 6.69% so far, and was up about 27.24% over the last 12 months (as of 04/30/2024). QGRO has traded between $62.46 and $85.74 in this past 52-week period.
The ETF has a beta of 1.04 and standard deviation of 21.81% for the trailing three-year period. With about 195 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 $16.72 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?
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $890.59 million, this makes it one of the larger ETFs in the Style Box - All Cap Growth. QGRO is managed by American Century Investments. QGRO seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY GROWTH IND before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 0.34%.
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.
For QGRO, it has heaviest allocation in the Information Technology sector --about 38% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Booking Holdings Inc Common Stock Usd.008 (BKNG - Free Report) accounts for about 3.03% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Servicenow Inc Common Stock Usd.001 (NOW - Free Report) .
The top 10 holdings account for about 24.86% of total assets under management.
Performance and Risk
Year-to-date, the American Century U.S. Quality Growth ETF has added about 6.69% so far, and was up about 27.24% over the last 12 months (as of 04/30/2024). QGRO has traded between $62.46 and $85.74 in this past 52-week period.
The ETF has a beta of 1.04 and standard deviation of 21.81% for the trailing three-year period. With about 195 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 $16.72 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.