A cool CPI print this week is the latest sign that rate cuts may be on the horizon. One or potentially even two cuts this fall could change the growth investing landscape for investors.
Of course, not all growth investing ETFs are alike. Growthier offerings, especially in tech, could benefit significantly from cuts. But identifying the right options therein may require a particular angle. A quality growth investing approach, specifically, could prove an asset.
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A quality growth investing approach could bring together the best of a quality view and a growth view. Growth investing has been cleaning value’s clock for many months, now, going back multiple years. The focus on firms with high upside hasn’t seemed to miss a beat even as interest rates skyrocketed amid stubborn inflation.
A Quality Growth Investing Option
Continuing to invest in growth would appeal, then, but given how many portfolios are already overloaded with growthier investments, it may make sense to adjust. A quality view into growth offerings could help differentiate the space. Rather than simply track a list of growth names in an inflexible index, an active quality growth fund could take a closer look.
That’s where a quality growth ETF like the American Century U.S. Growth ETF (QGRO) comes in. The fund screens growth firms via its index. It assesses options therein for factors like income and quality measured by attributes like profitability, cash flow, return on assets, and equity. Charging 29 basis points, QGRO looks to craft a portfolio mixing so-called high growth and stable growth names.
That approach has helped the quality growth investing ETF return 15.6% over the last five years and 21.8% over the last one year. Rate cuts are seemingly on the way, with the potential to benefit growthier options. For those who want a bit more quality growth to ride that wave, QGRO may appeal.
VettaFi LLC (“VettaFi”) is the index provider for QGRO, for which it receives an index licensing fee. However, QGRO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of QGRO.
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