Global asset manager American Century Investments on Tuesday introduced its first two exchange-traded funds, culminating its efforts over the past year or so to enter this space.
The American Century STOXX U.S. Quality Value ETF (VALQ) is an index-based product that employs the company’s intelligent beta methodology to scrutinize the profitability, earnings quality, management quality and earnings revisions at the 900 largest U.S. companies. American Century says this process eliminates about two-thirds of that universe to create a portfolio of 200 to 300 stocks at attractive valuations, and complements them with strong dividend-payers.
The fund’s expense ratio is 0.29 percent.
The American Century Diversified Corporate Bond ETF (KORP) is an actively managed vehicle that emphasizes investment-grade debt while dynamically allocating a portion of the portfolio to high-yield debt.
According to the company, by integrating fundamental and quantitative expertise the portfolio managers strive for enhanced return potential versus traditional capitalization-weighted passive portfolios.
KORP carries an expense ratio of 0.45 percent.
Both funds are listed on the NYSE Arca exchange.
American Century, which has roughly $175 billion in assets across mutual funds and other products, has taken several steps since last spring to prepare its entry into the ETF world. Among them was the hiring of Edward Rosenberg from Northern Trust's FlexShares ETF business to lead its ETF initiative. It also entered into a licensing agreement with Precidian Investments LLC to use that company's ActiveShare structure to potentially launch actively managed, semi-transparent exchange-traded products.
And earlier this month it hired two people away from ETF industry leader BlackRock—Rene Casis is a portfolio manager and Sean Walker is an ETF specialist.