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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by American Century Investments. It has amassed assets over $1.98 billion, making it one of the largest ETFs in the Style Box - All Cap Growth. Before fees and expenses, QGRO 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.29% for QGRO, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.23%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
QGRO's heaviest allocation is in the Information Technology sector, which is about 38.6% of the portfolio. Its Industrials and Healthcare round out the top three.
Taking into account individual holdings, Meta Platforms Inc Class A Common Stock Usd.000006 (META) accounts for about 3.42% of the fund's total assets, followed by Booking Holdings Inc Common Stock Usd.008 (BKNG) and Microsoft Corp Common Stock Usd.00000625 (MSFT).
Its top 10 holdings account for approximately 28.2% of QGRO's total assets under management.
Performance and Risk
The ETF has added roughly 14.49% so far this year and is up about 29.19% in the last one year (as of 09/16/2025). In the past 52-week period, it has traded between $83.67 and $113.98
The fund has a beta of 1.10 and standard deviation of 19.36% for the trailing three-year period. With about 190 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 $3.03 billion in assets, iShares Core S&P U.S. Growth ETF has $25.46 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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