American Century launched two active environmental, social and governance (ESG) exchange traded funds using the New York Stock Exchange’s Actively Managed Solution (AMS), making it the first asset manager to use the new active semi-transparent ETF structure.
The ETFs going live include the American Century Sustainable Equity ETF (ESGA), which invests in large-cap stocks with sustainable corporate behaviors, and the American Century Mid Cap Growth Impact ETF (MID), which invests in high-quality mid-cap growth companies believed to be positively impacting society. MID, which is the first active ESG ETF in its category, charges 45 basis points, while ESGA charges 39 basis points.
Under the NYSE methodology, American Century will provide daily disclosures of a proxy portfolio, which reflects the economic exposures and risk characteristics of the portfolio, without revealing the actual holdings. This reduces front-running and intellectual property theft.
"We believe these new ESG solutions offer investors the 'best of both worlds:' the alpha potential of active management with the advantages of ETFs, including low costs, tax efficiency and liquidity," said Ed Rosenberg, head of ETFs for the firm, in a statement. "This continues the next evolution of the ETF industry, and it expands opportunities for clients by enabling access to managers and strategies that had previously not been available, particularly in an ESG strategy."
In April, American Century introduced the first two semi-transparent active ETFs in the industry, using a structure licensed from Precidian Investments.