ETFs have exploded in popularity over the last several years, but it’s fair for investors and advisors to want to look out for fund with a few years’ track record before investing. Hitting the three-year ETF milestone means more than accumulating a record with which advisors and investors can judge a strategy. It also makes ETFs easier to access on advisor platforms. Such could be the case for the American Century Focused Large Cap Value ETF (FLV), which just hit its own three-year mark.
FLV launched right at the start of the pandemic in March 2020. As a result, it has just hit its third birthday on March 31 this year.
FLV is an active ETF investing in large-caps the fund’s managers identify as undervalued. Despite concealing its portfolio on a day-to-day basis, the fund managers do update holdings information regularly. According to VettaFi, its largest weight at last reporting was towards Johnson & Johnson (JNJ) at 5.6%.
See more: “American Century’s KORP, VALQ Hit 5-Year ETF Mark”
Active ETFs have really come into their own this year, both at American Century and in the overall ETF landscape.
FLV Holds 30-50 Undervalued Names
In looking to identify firms the market may be undervaluing, FLV’s managers look to 30–50 names. The managers consider fundamentals while also layering on an ESG consideration.
That’s helped the strategy bring some real momentum as it hits its three-year ETF milestone. FLV has outperformed its ETF Database category average and its FactSet segment average over the last month, returning 2.1% compared to negative returns for both averages. At the same time, its AUM has grown by about $8 million over the last month due to both price influence and fund flows, per VettaFi.
Its focus on unloved large-caps may have paid off in other ways, too, offering notable dividend yields — FLV has an annual dividend yield of nearly 5% and an annual dividend rate of $2.92, nearly double the ETF Database category average and more than double the FactSet average.
Taken together, the 42 basis point fee ETF has taken some solid momentum into its new era. Sitting at $230 million in AUM, it’s gathered plenty of assets in its three years of operation, and with market uncertainty on the rise as investors await a looming recession, it could be worth considering a large-cap value strategy with an active bent.
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