American Century launches income themed ETFs

HEARSAY Summary and Analysis

Second and third launch for American Century already in 2021, following the launch in January of their Low Vol ETF, LVOL. This brings their total number of ETFs to 12 and total AUM is $1.5B.

American Century has leveraged their mutual fund experience to fill out their ETF lineup in a deliberate manner, and continuing to off the basic add-ons to a core portfolio. QCON and QPFF offer the esoteric yet exotic instruments to the existing quality, focused, and sustainable stable of ETFs. 

QCON and QPFF are welcome income themed members to the American Century family. Under the well-seasoned ETF PM, Rene Casis, formerly of iShares, these ETFs are sure to be well taken care of.

American Century Quality Convertible Securities ETF
Ticker: QCON
Exchange: Cboe BZX
Expense ratio: 0.32%
Original filing date: September 4, 2020
Effective date: November 18, 2020
Listing Date: February 19, 2021
CUSIP: 025072521
Active: Yes
Index (Benchmark if Actively-Managed): ICE BofA Convertible Index

Investment Objective:
The fund seeks total return.
 
Investment Strategy:

Select individual securities utilizing a quantitative and fundamental investment process informed by fundamental and technical measures such as sales or earnings growth, profitability, leverage, balance sheet strength, price momentum relative to peers, and valuation and yield relative to other convertible securities.

Constituents: 135
 
Adviser: American Century Investment Management, Inc.
Short Prospectus is here.
Full Prospectus is here.

American Century Quality Preferred ETF
Ticker: QPFF
Exchange: Cboe BZX
Expense ratio: 0.32%
Original filing date: September 4, 2020
Effective date: November 18, 2020
Listing Date: February 19, 2021
CUSIP: 025072539
Active: Yes
Index (Benchmark if Actively-Managed): ICE Exchange-Listed Preferred & Hybrid Securities Index
 
Investment Objective:
The fund seeks current income and capital appreciation.
 
Investment Strategy:

Preferred securities in which the fund may invest include preferred stock, hybrid preferred securities that have characteristics similar to both preferred stock and debt securities, floating rate preferred securities, junior subordinated debt, senior unsecured debt obligations denominated in $25 par amounts (senior notes or baby bonds), re-packaged preferreds, and convertible securities.

The portfolio managers screen securities utilizing a quantitative and fundamental investment process informed by fundamental and technical measures such as liquidity, credit risk, size, quality, and momentum. The strategy screens for profitability and leverage and selects issuers and issues based on favorable quality, yield and valuation metrics.

Constituents: 150
 
Adviser: American Century Investment Management, Inc.
Short Prospectus is here.
Full Prospectus is here.

MORE ETF HEARSAY

 

S000070040

S000070041

QCON

Principal Investment Strategies

Under normal market conditions, the portfolio managers will invest at least 80% of the fund’s net assets, plus any borrowings for investment purposes, in convertible securities. Convertible securities have characteristics similar to both bonds and common stocks and typically consist of debt securities and preferred stocks that may be converted into or exchanged for a prescribed amount of common stock or other equity security, of the same or a different issuer, within a particular time period, at a specified price.

The portfolio managers select securities using a quantitative and fundamental investment process. They first screen the investment universe for liquidity and then select individual securities utilizing a quantitative and fundamental investment process informed by fundamental and technical measures such as sales or earnings growth, profitability, leverage, balance sheet strength, price momentum relative to peers, and valuation and yield relative to other convertible securities. Portfolio holdings are weighted to achieve the optimal balance between risk and return by considering each portfolio security’s fundamental scores, benchmark weight, and equity sensitivity.

The fund is nondiversified. The fund may invest in high-yield securities (also referred to as “junk bonds”). The fund may engage in active and frequent trading of portfolio securities to achieve its principal investment strategies. This may cause higher transaction costs and may affect performance. It may also result in the realization and distribution of capital gains.

The fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index. To determine whether to buy or sell a security, the portfolio managers consider, among other things, various fund requirements and standards, along with economic conditions, alternative investments, interest rates and various credit metrics.

QPFF

Principal Investment Strategies

Under normal market conditions, the portfolio managers will invest at least 80% of the fund’s net assets, plus any borrowings for investment purposes, in preferred securities issued by U.S. and non-U.S. companies. Preferred securities in which the fund may invest include preferred stock, hybrid preferred securities that have characteristics similar to both preferred stock and debt securities, floating rate preferred securities, junior subordinated debt, senior unsecured debt obligations denominated in $25 par amounts (senior notes or baby bonds), re-packaged preferreds, and convertible securities.

The portfolio managers screen securities utilizing a quantitative and fundamental investment process informed by fundamental and technical measures such as liquidity, credit risk, size, quality, and momentum. The strategy screens for profitability and leverage and selects issuers and issues based on favorable quality, yield and valuation metrics.

The fund is nondiversified. The fund concentrates its investments in the group of industries that comprise the financials sector. The fund may engage in active and frequent trading of portfolio securities to achieve its principal investment strategies. This may cause higher transaction costs and may affect performance. It may also result in the realization and distribution of capital gains. The fund may invest in securities of any duration or maturity.

The fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index. To determine whether to buy or sell a security, the portfolio managers consider, among other things, various fund requirements and standards, along with economic conditions, alternative investments, interest rates and various credit metrics.