ETF Hearsay: American Century files for three new Actively-Managed ETFs

MUSI American Century Multisector Income ETF

AEMB American Century Emerging Markets Bond ETF

ESGY American Century Sustainable Growth ETF

Exchange: NYSE Arca
Expense ratio: TBD
Original filing date: April 15, 2021
Effective date: June 29, 2021
Listing Date: TBD
CUSIP: TBD
Active: Yes
Index / Benchmark: Not Applicable

Investment Strategy / Index Methodology:

Constituents:

Adviser: TBD
Sub-Adviser: American Century Investment Management, Inc.

Administrator: Charles Tan
Jason Greenblath
Jeffrey L. Houston
Fund accountant: American Century Services, LLC
Transfer agent: State Street Bank and Trust Company
Custodian: State Street Bank and Trust Company
Distributor: State Street Bank and Trust Company
Legal counsel: Foreside Fund Services, LLC
External accounting: TBD
Compliance: Deloitte & Touche LLP

Prospectus is here.

DETAILS

American Century Multisector Income ETF
Ticker: MUSI

Investment Objective:
Seeks to provide a high level of current income and total return.

Investment Strategy:

Universe:

U.S. or foreign currencies, including emerging markets currencies.

The fund invests in both investment-grade and high-yield debt securities.

The fund invests in various sectors of the fixed income market:

corporate bonds and notes
government securities
securitized credit instrument
emerging markets debt securities

Investment Process:

sector rotation approach
proprietary fundamental research
quantitative model inputs

economic activity
inflation
monetary policy
technical analysis of relative value among various sectors

The fund may also invest in certain equity securities:

preferred stock
convertible securities
equity equivalents

The fund may also invest in bank loans.

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 and interest rates.

American Century Emerging Markets Bond ETF
Ticker: AEMB
Investment Objective:
Seeks to provide current income and capital appreciation.

Universe:

Debt securities related to emerging market countries.
sovereign and quasi-sovereign debt,
emerging markets corporate debt securities,
emerging markets debt investments.

Invests in investment-grade and high-yield debt securities.

Investment Process:

Proprietary fundamental research, quantitative model inputs and qualitative assessments that consider multiple inputs such as macroeconomic factors, country and fundamental issuer analysis, and market and relative value.

Invests in the subset of emerging markets countries that comprise the JP Morgan EMBI Global Diversified Index.

American Century Sustainable Growth ETF
Ticker: ESGY
Investment Objective:
Seeks capital appreciation.

Investment Strategy:

Universe:

The fund will invest principally in exchange-traded common stocks. The fund defines large capitalization companies as companies with capitalizations in the capitalization range of the S&P 500® Index.

Investment Process:

Large capitalization companies it believes show sustainable business improvement using a proprietary multi-factor model that combines fundamental measures of a stock’s growth and value potential with environmental, social, and governance (ESG) metrics.

To measure growth, the managers may use the rate of growth of a company’s earnings and cash flow and changes in its earnings estimates.
To measure value, the portfolio managers may use ratios of stock price-to-earnings and stock price-to-cash flow. The model also considers price momentum.
The team arrives at an ESG score by evaluating multiple metrics of each ESG characteristic—environmental, social, and governance.

The portfolio managers utilize internal data and research, as well as third party commercial data sources and scoring systems, to evaluate each security’s ESG characteristics.

For example, portfolio managers will consider, among others:

a company’s carbon emission profile (environmental),
a company’s employee turnover rates and digital privacy (social), and
a company’s corporate leadership, including board chair independence and the independence of audit and compensation committees (governance).

Portfolio of stocks that has sustainable competitive advantages, provides better returns without taking on significant additional risk, and maintains a stronger ESG profile than the Russell 1000 Growth Index.

Under normal market conditions, the fund will invest at least 80% of its assets in sustainable securities. For this purpose, the advisor defines sustainable securities as those to which the advisor’s proprietary model assigns an ESG score that is in the top three quartiles of the ESG scores the model assigns to all of the securities in the fund’s benchmark, the S&P 500® Index.