Is your portfolio ready for a late year market swoon? This past spring already saw markets take a big dip amid tariff uncertainty and more geopolitical and inflation risk looms. A Fed cut this month may boost stocks, yes, but it could backfire and dig inflation deeper into the economy. Of course, investors don’t want to forgo the growth that has driven returns in the last 18 months. Instead, high-quality stocks with a growth lean could appeal in a fund like QGRO, with three examples to define its approach.
See more: Recession Odds Drop But Growth Slows? This ETF Can Help
The American Century U.S. Quality Growth ETF (QGRO) provides one strong option for exposure to high-quality stocks. The strategy charges a 29 basis point fee to track the American Century U.S. Quality Growth Index. The fund combines so-called “high growth” names with “stable growth” firms. QGRO screens all its potential investments for quality as well as growth and income. The high-quality stocks fund also assesses firms for cash flow and profitability, as well.
Together, that has helped the fund return 25.3% over the last one year. That outperformed its ETF Database Category and FactSet Segment averages of 18.8% and 10.76%, respectively. So, to which stocks has that led the fund?
The fund’s largest holding, Booking Holdings (BKNG), per YCharts, has returned 13.1% YTD. That beat the S&P 500 Total Return index in that time, according to the data site. The firm provides a 24.86 forward p/e ratio, which could intrigue investors. What’s more, it also has provided a 17% return on assets.
Next, the fund also looks to Applovin (APP) to include in its portfolio of high-quality stocks. The company has returned a remarkable 47.8% YTD per YCharts. The firm helps mobile app developers and has since its 2011 launch, providing a mobile marketing platform. APP has produced an eye-watering 259.7% return on equity as of September 2.
Finally, QGRO also invests in quality retail company TJX Cos. (TJX). TJX, responsible for brands like Homegoods, for example, has returned 14.1% YTD, according to YCharts. It has provided a 60% return on equity, as well. It could continue to compete as a quality name, given its target consumer segment.
Looking ahead, high-quality stocks could be poised to do well if other areas weaken. For those wanting to refresh their equities, QGRO can 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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