Launched on 09/10/2018, the American Century US Quality Growth ETF (QGRO – Free Report) is a smart beta ETF designed to provide broad exposure to the Style Box – All Cap Growth category of the market.
What are Smart Beta ETFs?
Market cap-weighted indices are created to reflect the market, or a particular segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indices provide a low-cost, convenient and transparent way to replicate market returns, and are a good choice for investors who believe in the market. However, some investors believe they can beat the market through exceptional stock selection, choosing a different type of fund that follows non-cap-weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination thereof, these indicators attempt to select stocks that have a better chance of risk-return performance.
This area offers many different investment options, such as the simplest equal weighting, fundamental weighting, and volatility/momentum based weighting methodologies; However, not all of these strategies can achieve superior results.
Fund and index sponsor
QGRO is managed by American Century Investments, and this fund has raised over $2.04 billion, making it one of the largest ETFs in the Style Box – All Cap Growth. This particular fund seeks, before fees and expenses, to match the performance of AMERICAN CENTURY US QUALITY GROWTH IND.
The American Century Quality Growth Index seeks to select securities of large- and mid-cap US companies that have attractive growth and quality fundamentals.
Cost and other expenses
Expense ratios are an important factor in ETF returns, and over the long term, cheap funds can significantly outperform their more expensive cousins, other things remaining the same.
With one of the cheapest products in the industry, this ETF has annual operating expenses of 0.29%.
It has a trailing 12-month dividend yield of 0.20%.
Sector exposure and top holdings
Although ETFs offer diversified exposure that reduces the risk of individual stocks, it is still important to consider the fund’s holdings before investing. Fortunately, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QGRO, it has the largest allocations to the IT sector – about 40.5% of the portfolio – while healthcare and industrials round out the top three.
Looking at individual holdings, Alphabet Inc Cl A Common Stock Usd.001 (GOOGL) represents about 4.08% of total assets, followed by Mastercard Inc A Common Stock Usd.0001 (MA) and Booking Holdings Inc Common Stock Usd.008 (BKNG).
The 10 largest properties represent approximately 29.08% of total assets under management.
Performance and risks
Year to date, the American Century US Quality Growth ETF has added approximately 11.16% year to date, and is up approximately 11.41% over the past 12 months (as of 11/20/2025). QGRO has traded between $83.67 and $117.03 in the past 52-week period.
The ETF has a beta of 1.10 and a standard deviation of 18.12% for the trailing three-year period. With around 189 holdings, it effectively diversifies the company’s risks.
Alternatives
The American Century US Quality Growth ETF is a sensible choice for investors seeking to outperform the Style Box – All Cap Growth sector of the market. However, there are other ETFs in this space that investors can consider.
The iShares Morningstar Growth ETF (ILCG) tracks the MORNINGSTAR US LARGE-MID CP BRD GRWTH ID and the iShares Core S&P US Growth ETF (IUSG) tracks the S&P 900 Growth Index. The iShares Morningstar Growth ETF has $2.93 billion in assets, while the iShares Core S&P US Growth ETF has $25.28 billion in assets. ILCG has an expense ratio of 0.04% and IUSG changes at 0.04%.
Investors looking for cheaper, lower-risk options should consider traditional market-cap ETFs that aim to match Style Box – All Cap Growtht’s returns.
