Concerns about a possible recession on the horizon doesn’t seem to just be limited to advisors and investors.
Recently, FactSet released a report detailing how companies within the S&P 500 have been discussing recessions on their latest earnings calls. Between March 15th and May 15th, 121 members of the S&P 500 cited the term “recession” during their Q1 2025 earnings calls. This report marks the highest number of S&P 500 companies citing “recession” since Q4 2022.
These findings are made more concerning when compared to where things stood just a few months prior. Notably, only 13 S&P 500 companies discussed a recession on their Q4 2024 earnings calls.
Now, this report alone doesn’t mean that all these companies are necessarily bracing for an imminent recession. However, what it does imply is that conversations about recessions seem to be occurring more frequently among the top companies in the country.
Leaning Into Quality Stocks
For advisors and investors looking to plan ahead against recession risks, there are a number of ETF solutions that could do the job. Earlier this month, the American Century Investments team broke down some individual strategies that could prove attractive in a slowdown or recession. In particular, the American Century report highlights quality stocks as a strong equity option.
“Quality companies with higher profitability and healthy balance sheets may offer attractive potential,” the report adds. “Investors tend to favor quality companies in more defensive sectors, such as utilities, health care and consumer staples.”
Building Growth Through Quality
The American Century U.S. Quality Growth ETF (QGRO ) can help investors tap into the potential of quality stocks. As the fund’s title implies, QGRO looks to access long-term growth with the help of a quality lens. To do so, the fund invests in a selection of mid and large-cap companies with strong balance sheets and long-term potential.
Part of QGRO’s quality tilt comes through its sector allocation choices. The health care sector remains one of the top three sector weightings within QGRO’s portfolio. As the earlier American Century report notes, the health care sector is oftentimes utilized by investors looking to add more quality companies to their portfolio.
So far, QGRO’s blend of quality and growth has offered standout results. As of April 30th, 2025, the fund is up over 22% over the last twelve months. These results are about 6% higher than what the Russell 1000 Growth Index offered over the same time period.
For more news, information, and analysis, visit the Core Strategies Channel.
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