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Is American Century U.S. Quality Value ETF (VALQ) a Strong ETF Right Now?
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Launched on 01/11/2018, the American Century U.S. Quality Value ETF (VALQ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Because the fund has amassed over $245.08 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.29% for this ETF, which makes it on par with most peer products in the space.
VALQ's 12-month trailing dividend yield is 1.53%.
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 28.60% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Intl Business Machines Corp Common Stock Usd.2 (IBM - Free Report) accounts for about 3.25% of total assets, followed by Walmart Inc Common Stock Usd.1 (WMT - Free Report) and Abbott Laboratories Common Stock (ABT - Free Report) .
The top 10 holdings account for about 24.44% of total assets under management.
Performance and Risk
The ETF has added about 3.57% so far this year and is up roughly 14.15% in the last one year (as of 03/03/2025). In the past 52-week period, it has traded between $54.45 and $64.64.
The ETF has a beta of 0.95 and standard deviation of 14.57% for the trailing three-year period. With about 231 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Value ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Capital Group Dividend Value ETF (CGDV - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Capital Group Dividend Value ETF has $13.93 billion in assets, iShares Core S&P U.S. Value ETF has $20.16 billion. CGDV has an expense ratio of 0.33% 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?
Launched on 01/11/2018, the American Century U.S. Quality Value ETF (VALQ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Because the fund has amassed over $245.08 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.29% for this ETF, which makes it on par with most peer products in the space.
VALQ's 12-month trailing dividend yield is 1.53%.
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 28.60% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Intl Business Machines Corp Common Stock Usd.2 (IBM - Free Report) accounts for about 3.25% of total assets, followed by Walmart Inc Common Stock Usd.1 (WMT - Free Report) and Abbott Laboratories Common Stock (ABT - Free Report) .
The top 10 holdings account for about 24.44% of total assets under management.
Performance and Risk
The ETF has added about 3.57% so far this year and is up roughly 14.15% in the last one year (as of 03/03/2025). In the past 52-week period, it has traded between $54.45 and $64.64.
The ETF has a beta of 0.95 and standard deviation of 14.57% for the trailing three-year period. With about 231 holdings, it effectively diversifies company-specific risk.
Alternatives
American Century U.S. Quality Value ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Capital Group Dividend Value ETF (CGDV - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Capital Group Dividend Value ETF has $13.93 billion in assets, iShares Core S&P U.S. Value ETF has $20.16 billion. CGDV has an expense ratio of 0.33% 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.