American Century Investments Enters The ETF Business

Edward Rosenberg, SVP, Head of ETFs and Matthew Lewis, VP, Head of ETF Capital Markets for American Century Investments spoke with Julie Cooling, Founder and CEO, RIA Channel about the launch of their first ETFs, VALQ and KORP.

American Century recently entered the world of ETFs with their intelligent beta VALQ and their actively managed ETF, KORP.  “Both are unique in the market today,” said Rosenberg. The American Century STOXX U.S Quality Value ETF (VALQ) incorporates a variety of metrics to create the value product, while the American Century Corporate Diversified Corporate Bond ETF (KORP) has positioned itself as an actively managed product, combining investment-grade with high-yield.

Rosenberg believed that the actively managed space gives portfolio managers control in duration, in addition to bond selection. “It gives them a few more levers to pull,” said Rosenberg. American Century designed its ETFs with underlining baskets of liquidity, so that regardless of the size of the trade, advisors can get in and out very easily, Lewis explained.  Rosenberg defined their ETFs as core products, meant to complement existing active or value products, or even as a replacement.

American Century Investments currently has $160 billion in assets under management and hopes to launch several new ETFs within the coming year. Since the launch in early 2018, KORP has surpassed $12 million in assets and VALQ has reached over $7 million in assets.