Launched on 09/10/2018, the American Century U.S. Quality Growth ETF (QGRO) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $2 billion, this makes it one of the larger ETFs in the Style Box - All Cap Growth. QGRO is managed by American Century Investments. QGRO, before fees and expenses, seeks to match the performance of the AMERICAN CENTURY U.S. QUALITY GROWTH IND.
The American Century U.S. Quality Growth Index seeks to select securities of large and mid-capitalization U.S. companies with attractive growth and quality fundamentals.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for QGRO are 0.29%, which makes it one of the cheaper products in the space.
QGRO's 12-month trailing dividend yield is 0.18%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
QGRO's heaviest allocation is in the Information Technology sector, which is about 43.1% of the portfolio. Its Industrials and Telecom round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 3.46% of total assets, followed by Eli Lilly + Co Common Stock (LLY) and T Mobile Us Inc Common Stock Usd.0001 (TMUS).
Its top 10 holdings account for approximately 28.66% of QGRO's total assets under management.
Performance and Risk
Year-to-date, the American Century U.S. Quality Growth ETF has added about 2.18% so far, and it's up approximately 6.77% over the last 12 months (as of 08/07/2026). QGRO has traded between $101.49 $119.15 in this past 52-week period.
QGRO has a beta of 1.09 and standard deviation of 18.12% for the trailing three-year period. With about 189 holdings, it effectively diversifies company-specific risk .
Alternatives
American Century U.S. Quality Growth ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID and the iShares Core S&P U.S. Growth ETF (IUSG) tracks S&P 900 Growth Index. iShares Morningstar Growth ETF has $3.25 billion in assets, iShares Core S&P U.S. Growth ETF has $33.51 billion. ILCG has an expense ratio of 0.04% and IUSG changes 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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American Century U.S. Quality Growth ETF (QGRO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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