Quality, Muni ETFs Launch

September 12, 2018

Today American Century Investments rolled out three ETFs focused on quality and muni bond strategies. The new products complement the firm’s two existing ETFs and bring its total lineup to five.

The funds, their tickers and expense ratios are as follows:

All three funds list on the NYSE Arca exchange.

Methodology

QINT tracks an index that looks to cover large- and midcap non-U.S. companies in developed and emerging markets that exhibit attractive growth, valuation and quality characteristics.

Essentially the methodology screens the broad universe for companies that are demonstrating higher-than-average quality, then scores those securities for value and growth and uses a combined score to establish their weightings. The prospectus notes that the index typically has from 400 to 600 securities.

QGRO, on the other hand, focuses exclusively on large- and midcap U.S. companies. It selects its components from the STOXX USA 900 Index. It uses a very similar methodology to QINT, except that it only incorporates growth scores into its selection process. According to the prospectus, the fund’s underlying index typically has 200-300 components.

TAXF, unlike the other two funds launched today, is an actively managed municipal bond ETF. The fund looks to achieve tax-exempt current income by investing in investment-grade and—to a lesser degree—high-yield municipal bonds, with capital appreciation as a secondary goal.

The fund documentation notes that its target duration will vary at the managers’ discretion based on their expectations for interest rates.

Contact Heather Bell at [email protected]

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