The American Century Diversified Corporate Bond ETF (NYSEArca: KORP), an actively managed corporate bond exchange traded fund, now has a lower fee. Effective June 14, KORP’s annual expense ratio is 0.29%, or $29 on a $10,000 investment, down from 0.45%.
The fund invests in U.S. dollar-denominated corporate debt securities issued by U.S. and foreign entities, but may also hold securities issued by supranational entities. Additionally, up to 35% of the fund’s net assets may be invested in high-yield securities or junk bonds. The fund may also invest in derivative instruments such as futures contracts and swap agreements. The weighted average duration of the fund’s portfolio is expected to be between three and seven years.
KORP, which debuted in January 2018, had $62.89 million in assets under management as of Monday, June 17.
“With KORP now exceeding $60 million and attracting steady flows, we decided to reduce the fees in order to provide better value to investors,” said Edward Rosenberg, senior vice president and head of ETFs for American Century Investments, in a statement. “Our goal has always been to provide a lineup of ETFs that apply our unique insights to solve common investment problems.”
KORP has 109 holdings and an option-adjusted duration of 4.13 years, according to issuer data.
“KORP is an actively managed corporate bond fund designed for investors seeking current income,” according to the statement. “The fund emphasizes investment-grade debt while dynamically allocating a portion of the portfolio to high yield in a single, systematically managed portfolio. By integrating fundamental and quantitative expertise, the portfolio management team strives for enhanced return potential versus traditional capitalization-weighted passive portfolios.”
In addition to KORP, other American Century ETFs include the American Century Quality Diversified International ETF (QINT), American Century STOXX U.S. Quality Growth ETF (QGRO), American Century STOXX U.S. Quality Value ETF (VALQ) and American Century Diversified Municipal Bond ETF (TAXF).
For more information on the fixed-income market, visit our bond ETFs category.