1st Blockchain ETFs Among New Launches

January 17, 2018

Newcomer Rolls Out 2 ETFs

On Tuesday, American Century rolled out its first two ETFs. The American Century STOXX U.S. Quality Value ETF (VALQ) and the American Century Diversified Corporate Bond ETF (KORP) both list on the NYSE Arca exchange.

VALQ comes with an expense ratio of 0.29%. Its underlying index methodology screens the STOXX USA 900 Index to exclude the least desirable stocks based on profitability, earnings quality, management quality and earnings estimate revisions.

From there, the stocks that are still in the universe are screened based on income sustainability, with the lowest ranking stocks removed from the index universe. Finally, stocks are evaluated based on valuation and income scores. Those scores are used in conjunction with a portfolio optimization process to create a portfolio that seeks to strike a balance between risk and expected return, the prospectus says.

The document also notes that the index generally has between 200 and 300 component stocks. 

Meanwhile, actively managed KORP has an expense ratio of 0.45%. It targets corporate debt denominated in U.S. dollars, but securities can be issued by domestic or foreign companies, including supranational entities, according to the prospectus. 

Up to 35% of the portfolio can be invested in high-yield debt, but the rest is generally investment-grade securities.

Contact Heather Bell at [email protected]

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