The ETF holds 246 stocks with a weighted average market capitalization of $77.95 billion (as of the end of April). Many value strategies are heavily allocated to the energy or financial services sectors, but those sectors combine for just 15% of VALQ’s weight. Rather, the American Century ETF devotes 20% of its weight to technology stocks and a combined 27% to the healthcare and consumer discretionary sectors.
“VALQ’s subindexes apply a variety of stock- and sector-level constraints based on active exposure versus the parent index and different measures of fundamentals and volatility,” according to Morningstar.
As the research firm notes, VALQ currently tilts toward smaller, less expensive stocks, but as market conditions change, the fund’s dynamic allocation model can re-allocate toward larger quality fare.
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