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Is American Century U.S. Quality Growth ETF (QGRO) a Strong ETF Right Now?
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Making its debut on 09/10/2018, smart beta exchange traded fund American Century U.S. Quality Growth ETF (QGRO - Free Report) provides investors broad exposure to the Style Box - All Cap Growth 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by American Century Investments. It has amassed assets over $855.22 million, making it one of the larger ETFs in the Style Box - All Cap Growth. QGRO, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.29% for QGRO, making it on par with most peer products in the space.
QGRO's 12-month trailing dividend yield is 0.31%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 37% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Servicenow Inc Common Stock Usd.001 (NOW - Free Report) accounts for about 3.27% of the fund's 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 25.16% of total assets under management.
Performance and Risk
The ETF return is roughly 17.18% so far this year and it's up approximately 27.20% in the last one year (as of 09/02/2024). In the past 52-week period, it has traded between $64.44 and $89.
QGRO has a beta of 1.05 and standard deviation of 21.94% for the trailing three-year period. With about 183 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 $2.24 billion in assets, iShares Core S&P U.S. Growth ETF has $19.16 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?
Making its debut on 09/10/2018, smart beta exchange traded fund American Century U.S. Quality Growth ETF (QGRO - Free Report) provides investors broad exposure to the Style Box - All Cap Growth 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by American Century Investments. It has amassed assets over $855.22 million, making it one of the larger ETFs in the Style Box - All Cap Growth. QGRO, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.29% for QGRO, making it on par with most peer products in the space.
QGRO's 12-month trailing dividend yield is 0.31%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 37% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Servicenow Inc Common Stock Usd.001 (NOW - Free Report) accounts for about 3.27% of the fund's 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 25.16% of total assets under management.
Performance and Risk
The ETF return is roughly 17.18% so far this year and it's up approximately 27.20% in the last one year (as of 09/02/2024). In the past 52-week period, it has traded between $64.44 and $89.
QGRO has a beta of 1.05 and standard deviation of 21.94% for the trailing three-year period. With about 183 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 $2.24 billion in assets, iShares Core S&P U.S. Growth ETF has $19.16 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.