An ETF strategy to capture a return to growth

Investors should consider an exchange-traded fund strategy that can adapt to the ever-changing market environment.

During the recent webcast, Advisor’s guide to discovering companies in transformationKevin Lewis, vice president and senior client portfolio manager at American Century Investments, noted that growth as a feature has underperformed recently after years of outperformance.

However, Lewis argued that investors should take a long-term view of the markets and not be deterred by short-term trends, especially since no one is able to time market moves perfectly. Therefore, Lewis advised investors to take a consistent allocation as the cost of missing out on the best days could be detrimental to a long-term investment portfolio.

To help investors access long-term growth trends in the market, investors can look to a targeted growth strategy like the Aggressive Growth ETF Focused on the American Century (FDG). FDG is a high conviction strategy that invests in fast-growing start-ups with competitive advantage and high profitability, growth and scalability.

“Our suite of exchange-traded funds expands your options for managing portfolio risk, reducing the impact of fees and taxes, and improving return potential,” said Sean Walker, vice president and ETF specialist at American Century. Investments.

“Understanding that investors face many complex decisions when pursuing their financial goals, we have designed our ETFs to meet a variety of investor needs.

Specifically, the strategy is an alpha-seeking portfolio based on research and manager knowledge. The American Century strategy also comes in an ETF package, which provides the opportunity to add value in a lower-cost, tax-advantaged vehicle.

“Not only do ETFs offer lower cost and liquidity, they also offer tax efficiency, which can help overall portfolio performance and allow investors to keep more of what they’ve earned.” invested. Keeping tabs on taxes throughout the year can help manage the year-end tax bite,” Walker added.

Lewis noted that it’s important for investors to focus on growth opportunities in the early stages. Specifically, according to American Century, the Focused Dynamic Growth ETF has a growth score of 34.4% in a phase of rapid market growth, compared to the benchmark Russell Index’s growth score of 16.2%. 1000 Growth. However, potential investors should be aware that the benchmark Russell 1000 Growth Index may exhibit a higher growth score during the more established or steady growth phase of a normal cycle.

American Century’s investment methodology is based on owning good companies.

“Good deeds start with good business,” Lewis said. “Good companies become good stocks by integrating acceleration, relative strength and valuation.”

Specifically, good companies exhibit characteristics such as competitive advantage, profitability, scalability, and growth. In turn, these companies are also good stocks that are outperforming due to accelerating fundamental business trends, attractive valuations and positive relative strength.

Financial advisors interested in learning more about these transforming companies can watch the webcast here on demand.