American Century ETF Trust - Avantis Responsible U.S. Equity ETF (AVSU)

Overview

The Avantis Responsible U.S. Equity ETF (AVSU) seeks long-term capital appreciation by investing in a broad and diversified portfolio of U.S. companies, while incorporating environmental, social, and governance (ESG) considerations in the investment process. It focuses on companies with smaller market capitalizations and value characteristics, aiming for higher expected returns.

Reputation and Reliability

American Century Investments is a well-established asset management firm with a long history and a reputation for quantitative and fundamental research. They are known for their commitment to responsible investing.

Management Expertise

Avantis Investors, a subsidiary of American Century, manages the ETF. The management team has experience in quantitative investing and responsible investing strategies.

Goal

To provide long-term capital appreciation, while incorporating environmental, social and governance considerations.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index but uses a proprietary quantitative model to select companies based on factors such as profitability, value, and momentum, as well as ESG considerations.

Composition The ETF primarily holds common stocks of U.S. companies across various sectors. Emphasis is placed on smaller cap and value-oriented firms. ESG factors are used to adjust holdings.

Market Share: Data not available for a precise market share. It's a relatively new ETF with growing assets.

Total Net Assets (AUM): 328400000

Key Competitors

• Vanguard ESG U.S. Stock ETF (ESGV)
• iShares ESG Aware MSCI USA ETF (ESGU)
• Xtrackers S&P 500 ESG ETF (SNPE)

Competitive Landscape

The ESG ETF market is becoming increasingly competitive. AVSU differentiates itself by focusing on a quantitative approach that emphasizes profitability and value factors alongside ESG considerations. While ESGV and ESGU are larger and more established, AVSU's active management strategy and focus on smaller companies could offer a different risk/return profile. AVSU is competing with well-established players, needing to demonstrate consistent outperformance to gain market share.

Historical Performance: Historical performance data needs to be acquired from financial data providers (e.g., Morningstar, Bloomberg).

Benchmark Comparison: Performance should be compared against relevant broad market benchmarks like the Russell 3000 or S&P 500, and ESG-focused benchmarks.

Expense Ratio: 0.17

Average Trading Volume

The average trading volume is moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, suggesting low trading costs.

Market Environment Factors

The demand for ESG investments, coupled with broader market trends in small-cap and value stocks, are significant drivers. Changes in regulations and investor sentiment towards ESG can also impact the ETF's performance.

Growth Trajectory

The ETF's growth trajectory depends on its ability to attract investors seeking ESG-focused and value-oriented investments. The growth trajectory may change if AVSU changes its strategy or its current holdings.

Competitive Edge

AVSU's competitive advantage stems from its quantitative approach to ESG investing, blending factor investing (value, profitability) with responsible investing principles. This differentiated approach seeks to deliver potentially higher returns while aligning with ESG values. The ETF's low expense ratio for an actively managed fund is also attractive. The fund's focus on smaller cap and value firms also sets it apart, allowing exposure to potentially higher growth segments of the US market.

Volatility

AVSU's volatility will likely be similar to other small-cap and value-oriented funds, potentially higher than broad market index funds.

Market Risk

The ETF is subject to market risk, particularly related to the performance of U.S. equities, and the specific sectors and companies it holds. ESG-related risks could also impact performance if investor sentiment towards certain ESG themes shifts.

Ideal Investor Profile

The ideal investor is one who seeks long-term capital appreciation, values ESG principles, and is comfortable with the potentially higher volatility associated with small-cap and value stocks.

Market Risk

The ETF is suitable for long-term investors and those seeking exposure to ESG factors while incorporating factor-based investing. Less suitable for very short-term traders due to possible fluctuations.

The Avantis Responsible U.S. Equity ETF offers a unique blend of ESG investing with a quantitative, factor-based approach focusing on value and profitability. AVSU targets smaller capitalization companies and implements a responsible investment process. Its low expense ratio adds to its attractiveness. The fund is best suited for investors with a long-term focus willing to accept potentially higher volatility to achieve greater returns and align their investments with ESG principles.

Data Sources:

• American Century Investments Website
• Morningstar
• Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Market data may be delayed. Consult a qualified financial advisor before making any investment decisions.