American Century ETF Trust - Avantis Short-Term Fixed Income ETF (AVSF)

Overview

The Avantis Short-Term Fixed Income ETF (AVSF) seeks to provide current income while preserving capital by investing in a broad range of U.S. dollar-denominated short-term investment grade fixed income securities. It aims to outperform its benchmark by using a flexible approach to bond selection based on factors such as credit quality, duration, and yield curve positioning.

Reputation and Reliability

American Century Investments has a long history and is considered a reputable asset manager. They offer a range of investment products and are known for their quantitative investment strategies.

Management Expertise

The management team is experienced in fixed income investing and utilizes a systematic, research-driven approach to portfolio construction.

Goal

The primary investment goal is to provide current income while preserving capital.

Investment Approach and Strategy

Strategy: The ETF employs an actively managed investment strategy, not tracking a specific index. It uses a flexible approach to bond selection based on various factors.

Composition The ETF holds a diversified portfolio of U.S. dollar-denominated short-term investment-grade fixed income securities, including corporate bonds, government securities, and asset-backed securities.

Market Share: The AVSF ETF holds a moderate market share within the short-term fixed income ETF sector.

Total Net Assets (AUM): 159877418

Key Competitors

• iShares Short Maturity Bond ETF (NEAR)
• PIMCO Enhanced Short Maturity Active ETF (MINT)
• SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)

Competitive Landscape

The short-term fixed income ETF market is highly competitive, with several large players dominating the sector. AVSF distinguishes itself with its active management style and focus on factor-based investing, offering potential for higher returns than passive index-tracking ETFs, but also exposing investors to greater management risk. Larger competitors benefit from economies of scale and brand recognition.

Historical Performance: Past performance is not indicative of future results. Investors should review the ETF's fact sheet or prospectus for detailed performance data over various time periods (e.g., 1-year, 3-year, 5-year, and since inception).

Benchmark Comparison: The ETF's performance should be compared to a relevant short-term fixed income benchmark index, such as the Bloomberg US Aggregate 1-3 Year Index, to assess its relative performance.

Expense Ratio: 0.15

Average Trading Volume

The average trading volume is adequate for most investors, allowing for easy execution of trades.

Bid-Ask Spread

The bid-ask spread is typically tight, indicating reasonable trading costs.

Market Environment Factors

Interest rate changes, inflation expectations, and credit spreads all influence the performance of AVSF. A rising interest rate environment could negatively impact the ETF's performance, while a strong economy could lead to tighter credit spreads and potentially higher returns.

Growth Trajectory

The ETF's growth is dependent on its ability to attract assets from investors seeking short-term fixed income exposure. Changes to the ETF's investment strategy or holdings would be detailed in the fund's prospectus or annual report.

Competitive Edge

AVSF's competitive edge lies in its active management approach, which allows the portfolio managers to adjust the portfolio based on changing market conditions and exploit perceived inefficiencies. The factor-based approach seeks to identify and overweight securities with attractive characteristics, potentially leading to higher returns compared to passive strategies. This active approach differentiates it from index-tracking ETFs. However, active management involves higher costs and the risk of underperforming the benchmark.

Volatility

The ETF's volatility is expected to be relatively low due to its focus on short-term investment-grade fixed income securities.

Market Risk

The ETF is subject to interest rate risk, credit risk, and liquidity risk. Rising interest rates could negatively impact the ETF's value, while credit downgrades or defaults could lead to losses. Liquidity risk is limited due to the focus on investment grade bonds.

Ideal Investor Profile

The ideal investor is risk-averse and seeking current income with minimal capital appreciation. This ETF is suitable for investors who want to preserve capital and have a short-term investment horizon.

Market Risk

This ETF is best for long-term investors seeking capital preservation or as a component of a diversified portfolio.

The Avantis Short-Term Fixed Income ETF (AVSF) offers investors exposure to a portfolio of short-term, investment-grade fixed income securities. Its active management strategy aims to outperform passive benchmarks by leveraging factor-based investing. AVSF is designed for risk-averse investors seeking current income and capital preservation. While it presents opportunities for enhanced returns through active management, investors should be aware of the associated management fees and potential underperformance. The ETF is subject to market risk, interest rate risk, and credit risk.

Data Sources:

• American Century Investments Website
• ETF.com
• Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investors should consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Market share data may be approximate.