With the S&P 500 up 16% for the year and the Nasdaq-100 besting that performance with a 40% gain, re-cycling back into growth is an option if an investor feels like turning up the proverbial risk-on dial.
There’s still a lingering risk that a recession could be underway, but with the CNN Fear and Greed Index pegged at “Extreme Greed,” the overwhelming majority skews towards optimism. That said, American Century offers ETFs for investors who want to obtain exposure via an active or passive strategy.
For an active management approach, consider the (FDG ). That active management component means that the fund stays pliable given current market conditions, allowing portfolio managers the ability to add or reduce holdings as necessary in order to capture more upside or protect the downside.
Actively managed FDG invests in companies in their early and rapid growth stages. The fund’s managers look for companies with a competitive advantage, profitability, and scalability that other managers may overlook.
Given its discernible filter, investors won’t see hundreds of holdings in FDG’s portfolio. Instead, the fund has 37 holdings as of April 30. Its top 10 holdings comprise over 50% of the fund. Additionally, the fund has a “risk-aware portfolio of 30-45 holding companies with improving fundamentals we believe offer the best opportunities for long-term capital appreciation over multiple market cycles,” which speaks to the discerning strategy selection of this fund.
Get Quality With Growth
Investors who don’t want to turn up the risk dial all the way to maximum can opt for quality with their exposure. That’s an inherent strategy in the (QGRO ).
With over 200 holdings (as of April 30), the fund is well-diversified and also avoids concentration risk. The passive strategy fund tracks the iSTOXX American Century USA Quality Growth Index, which tries to identify U.S. companies that have higher potential and stronger financial fundamentals relative to rivals — this offers a layer of protection if a recession were to hit the U.S. economy.
QGRO’s stock selection process is broken down into high-growth stocks based on sales, earnings, cash flow, and operating income, along with stable-growth stocks based on growth, profitability, and valuation metrics. The fund aims to have 35%–65% of its portfolio in high-growth stocks, and 30%–65% in so-called stable-growth companies that exhibit attractive profitability and valuation.
For more news, information, and analysis, visit the Core Strategies Channel.