American Century U.S. Quality Growth ETF (QGRO) Overview and Insights

The American Century U.S. Quality Growth ETF (QGRO) launched on September 10, 2018, offering broad exposure to the Style Box – All Cap Growth category. This smart beta exchange-traded fund seeks to provide investors with an alternative to traditional market cap weighted strategies.

Understanding Smart Beta ETFs

Traditionally, the ETF industry has focused on market cap weighted indexes, designed to reflect overall market performance or specific segments. Investors who favor market efficiency may find value in these market cap indexes, as they replicate market returns in a cost-effective and transparent manner.

Conversely, smart beta funds offer a different approach by tracking non-cap weighted strategies. These funds attract investors aiming to outperform the market by selecting stocks based on specific fundamental characteristics. While there are various strategies available—including equal-weighting, fundamental weighting, and volatility/momentum methodologies—not all strategies yield superior results.

Fund Overview and Indexing

With assets exceeding $1.12 billion, QGRO stands as one of the larger ETFs in its category. The fund is managed by American Century Investments, and its goal is to mirror the performance of the AMERICAN CENTURY U.S. QUALITY GROWTH INDEX. This index identifies securities from large and mid-cap U.S. companies distinguished by their attractive growth and quality fundamentals.

Costs and Expenses

Expense ratios play a crucial role for ETF investors concerned with maximizing returns. Generally, lower-cost funds can outperform their higher-cost counterparts over time if all other factors remain constant. QGRO has an expense ratio of 0.29%, competitive with most similar products. Additionally, the ETF currently offers a 12-month trailing dividend yield of 0.27%.

Sector Exposure and Key Holdings

Before investing in any ETF, it’s vital to evaluate its holdings. Despite the advantages of diversified exposure that minimize individual stock risk, understanding the composition of the portfolio is essential. QGRO provides transparency by disclosing its holdings daily.

Notably, the fund allocates 34.40% of its assets to the Information Technology sector, with Consumer Discretionary and Industrials rounding out the top three sectors. Among its holdings, Netflix Inc. (NFLX) constitutes about 3.92% of the total portfolio, followed by Meta Platforms Inc. (META) and Amazon.com Inc. (AMZN). Collectively, the top 10 holdings make up approximately 30.13% of total assets under management.

Performance and Risk Analysis

In terms of performance, QGRO has recorded a decline of about -7.05% year-to-date and a gain of roughly 12.41% over the past year (as of March 12, 2025). Throughout the last 52 weeks, the fund’s trading range varied between $78.74 and $109.93.

With a beta of 1.09 and a standard deviation of 20.82% over the trailing three years, QGRO effectively diversifies company-specific risks across its 201 holdings.

Alternative Investment Options

The American Century U.S. Quality Growth ETF serves as a solid choice for investors looking to outperform in the Style Box – All Cap Growth sector. However, several other ETFs can provide competitive alternatives.

For instance, the Fidelity Blue Chip Growth ETF (FBCG) tracks a diversified growth strategy and currently boasts $3.62 billion in assets. Meanwhile, the iShares Core S&P U.S. Growth ETF (IUSG) aligns with the S&P 900 Growth Index and has $19.16 billion in assets. FBCG carries an expense ratio of 0.59%, whereas IUSG offers a lower expense ratio of 0.04%.

Investors seeking cost-effective and lower-risk options might want to explore traditional market cap weighted ETFs, which aim to match returns in the Style Box – All Cap Growth category.

Conclusion

For additional insights into QGRO and other ETF products, potential investors should examine offerings that suit their financial goals. Staying informed about the latest trends in the ETF landscape can lead to more strategic investing decisions.

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American Century U.S. Quality Growth ETF (QGRO): ETF Research Reports

Amazon.com, Inc. (AMZN) : Free Stock Analysis report

Netflix, Inc. (NFLX) : Free Stock Analysis report

iShares Core S&P U.S. Growth ETF (IUSG): ETF Research Reports

Fidelity Blue Chip Growth ETF (FBCG): ETF Research Reports

Meta Platforms, Inc. (META) : Free Stock Analysis report

This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.