American Century enjoys rapid increase in flows
American Century has some USD8 billion in its range of 23 ETFs overall, while the firm manages USD243 billion in total.
Ed Rosenberg (pictured), Senior Vice President, Head of Exchange Traded Funds, says that assets are rapidly increasing.
“The flows are significantly up across the industry,” Rosenberg says. “Previous years saw flows running at about 35 basis points but now it’s 50-60 basis points and that has really helped us move along this year as we show our wares and prove our worth in the ETF space.”
The firm’s Avantis range of ETFs has over USD6 billion in assets, across the entire range with no ‘hero’ product, as Rosenberg phrases it.
In terms of international equities, Rosenberg points to three products, QINT, AVDV and AVDE.
“These products follow Avantis’s financial science approach - a time tested strategy tilting towards value, small cap and profitability that has resonated with clients for decades,” Rosenberg says. “Over time, those factors tilt to outperformance.”
In terms of domestic US equities, Rosenberg describes the American Century range as containing ‘a plethora’ of products and also points to the five semi-transparent ETFs that the firm launched.
“There is a lot of coverage of these in the US - we got a lot more attention for being first in the space with the semi-transparent product and the performance has been strong. One of the products, Focused Dynamic Growth (FDG), was USD40 dollars a share on launch and now 18 months down the line, it’s USD85, with assets of about a quarter of a billion dollars.”
The special nature of the semi-transparent ETF means that it’s available on just a few platforms and Rosenberg believes that this has hindered some of the growth across the board. “We have found newcomers to ETFs through the launch of semi-transparent ETFs,” he says.
Recently he has observed a slight uptick in investment in international equities versus domestic equities and comments that ESG ETFs within the industry have seen an increase in flows, with about USD40 billion in flows so far this year.
Rosenberg predicts that this will continue with the post baby boomer generations profiting from the wealth transfer of an estimated USD3 trillion in assets, trickling down to a generation which cares more about ESG than their grandparents would have.
“Those values are not going to change and from a social standpoint they are more aware and involved in human rights than I was at their age,” Rosenberg says.
Another trend has been into value which boomed over the period from October to June this year but has been followed by a little return to growth. “People aren’t sure which direction to go in,” Rosenberg says. “They don’t where this market is going to go and while low volatility strategies have done poorly, people will consider then when we hit some volatility.”
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