ck0001710607-20220831
January
1, 2023
American
Century Investments
Prospectus
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Exchange: |
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American
Century®
STOXX®
U.S. Quality Value ETF |
VALQ |
NYSE
Arca, Inc. |
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The
Securities and Exchange Commission has
not approved or disapproved
these securities or
passed upon the adequacy of this prospectus.
Any
representation to the contrary is a criminal offense. |
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©2023
American Century Proprietary Holdings, Inc. All rights reserved.
The
fund seeks to provide investment results that closely correspond, before fees
and expenses, to the performance of the iSTOXX®
American Century USA Quality Value Index (the underlying
index).
The following table describes
the fees and expenses you may pay if you buy, hold, and sell shares of the fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the tables and examples
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
| Management
Fee |
0.29% |
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Other
Expenses |
0.00% |
| Total
Annual Fund Operating Expenses |
0.29% |
Example
The example below is
intended to help you compare the costs of investing in the fund with the costs
of investing in other funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and then redeem all of your
shares at the end of those periods (unless otherwise indicated), that you earn a
5% return each year, and that the fund’s operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
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| 1
year |
3
years |
5
years |
10
years |
| $30 |
$93 |
$163 |
$369 |
Portfolio
Turnover
The
fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund’s performance.
During the most recent fiscal year, the fund’s portfolio turnover rate was
118%
of the average value of its portfolio.
Under normal market conditions, the
fund invests at least 80% of its assets in the component securities of the
underlying index. The underlying index is a rules-based index
maintained and calculated by STOXX®
Ltd. (the index provider). The underlying index is designed to select securities
of large- and mid-capitalization companies that are undervalued or have
sustainable income.
The
underlying index universe is defined by the STOXX®
USA 900 Index, which consists of the 900 largest publicly traded U.S. equity
securities. The underlying index is constructed using a rules-based methodology
that screens and weights stocks based on fundamental measures of quality, value
and income. A quality screen seeks to eliminate the bottom of the universe of
stocks based on measures of profitability, earnings quality, management quality
and earnings estimate revisions. A valuation score is computed for the remaining
stocks, determined by the attractiveness of each stock relative to its peers in
the same industry group based on value, earnings yield and cash flow yield
metrics. An income sustainability screen based on dividend growth and dividend
coverage metrics is applied to eliminate the bottom of the universe of
dividend-paying stocks, and an income score based on dividend-yield is computed
for the remaining stocks. The underlying index is constructed by combining the
value stocks and income stocks using the valuation and income scores and
portfolio optimization. Portfolio optimization uses quantitative models to build
a portfolio of stocks from the scores described above that are expected to
provide the optimal balance between risk and expected return. Though component
securities of the underlying index may change from time to time, the index
typically consists of 200-300 securities and, as of September 30, 2022,
its market capitalization range was approximately $1.91
billion to $2.22
trillion.
The
fund may use a “representative sampling” strategy with respect to its underlying
index when a replication strategy might be detrimental to shareholders. For
example, the fund may use such strategy when there are practical difficulties or
substantial costs involved in compiling a portfolio of securities to follow the
underlying index or, in certain instances, when a component security becomes
temporarily illiquid, unavailable or less liquid. To the extent the fund uses
representative sampling, the advisor invests in what it believes to be a
representative sample of the component securities in the underlying index using
quantitative analytical procedures to give the fund’s portfolio an investment
profile similar to that of its underlying index. The fund also may realize
savings in transaction costs or other efficiencies by investing up to 20% of its
assets in securities or instruments not included in the underlying index but
which the advisor believes will help the fund track the underlying
index.
In
addition, the fund may use futures contracts to invest cash balances, simulate
investments in the underlying index, facilitate trading or minimize transaction
costs. The portfolio managers may also use futures contracts to seek to reduce
the fund’s tracking error relative to the underlying index.
The
underlying index and fund are rebalanced monthly and reconstituted
quarterly.
The
fund will concentrate its investments (i.e., hold 25% or more of its net assets)
in a particular industry or group of industries to approximately the same extent
that the underlying index is concentrated.
•Equity
Securities Risk — The
value of equity securities, may fluctuate due to changes in investor perception
of a specific issuer, changes in the general condition of the stock market, or
occurrences of political or economic events that affect equity issuers and the
market. Common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase.
•Market
Trading Risk — The
fund faces numerous market trading risks, including the potential lack of an
active market for fund shares, losses from trading in secondary markets, periods
of high volatility and disruption in the creation and/or redemption process of
the fund. Any of these factors, among others, may lead to the fund’s shares
trading at a premium or discount to NAV. Thus, you may pay more (or less) than
NAV when you buy shares of the fund in the secondary market, and you may receive
less (or more) than NAV when you sell those shares in the secondary market. The
portfolio managers cannot predict whether shares will trade above (premium),
below (discount) or at NAV.
•Index-Related
Risk — Unlike
many investment companies, the fund is not actively managed and the portfolio
managers do not attempt to take defensive positions under any market conditions,
including declining markets. Therefore, the portfolio managers generally will
not buy or sell a security unless that security is added or removed,
respectively, from the underlying index, even if that security generally is
underperforming. There is no assurance that the underlying index will be
determined, composed or calculated accurately. While the index provider provides
descriptions of what the underlying index is designed to achieve, the index
provider does not guarantee the quality, accuracy or completeness of data in
respect of its indices, and does not guarantee that the underlying index will be
in line with the described index methodology. Gains, losses or costs to the fund
caused by errors in the underlying index may therefore be borne by the fund and
its shareholders.
•Rebalance
Risk — The
fund rebalances its portfolio in accordance with the underlying index’s
rebalance schedule. Accordingly, any change to this schedule will result in
corresponding changes to the fund’s rebalance schedule.
•Calculation
Methodology Risk — The
underlying index relies on various sources of information to assess the criteria
of issuers included in the underlying index, including information that may be
based on assumptions and estimates. Neither the fund nor American Century
Investment Management, Inc. (the advisor) can offer assurances that the
underlying index’s calculation methodology or sources of information will
provide an accurate assessment of included issuers.
•Style
Risk — There
can be no assurance that the investment factor stock selection process and
screens of the underlying index will enhance performance. Exposure to certain
investment factors and use of screens may detract from performance in some
market environments, perhaps for extended periods.
•Market
Risk — The
value of the fund’s shares will go up and down, sometimes rapidly or
unpredictably, based on the performance of the companies whose securities it
owns and other factors generally affecting the securities market. Market risks,
including political, regulatory, economic and social developments, can affect
the value of the fund’s investments. Natural disasters, public health
emergencies, war,
terrorism and other unforeseeable events may lead to increased market volatility
and may have adverse long-term effects on world economies and markets
generally.
•Public
Health Emergency Risk — A
pandemic, caused by the infectious respiratory illness COVID-19, has
caused
market disruption and other economic impacts. Markets have experienced
volatility, reduced liquidity, and increased trading costs. The
pandemic
may continue to impact the fund and its underlying investments and could cause
increased premiums or discounts to the fund’s NAV.
•Mid-Capitalization
Company Risk — Investments
in medium-size companies may involve greater risk and price volatility than
investments in larger, more mature companies.
•Tracking
Error Risk — Tracking
error is the divergence of the fund’s performance from that of the underlying
index. Tracking error may occur because of differences between the securities
held in the fund’s portfolio and those included in the underlying index, pricing
differences, transaction costs, the fund’s holding of cash, differences in
timing of the accrual of dividends or interest, changes to the underlying index
or the need to meet various new or existing regulatory requirements. This risk
may be heightened during times of increased market volatility or other unusual
market conditions. Tracking error also may result because the fund incurs fees
and expenses, while the underlying index does not.
•Sampling Risk
— To
the extent the fund uses a representative sampling strategy, it may hold a
smaller number of securities than are in the underlying index or it may hold
securities that are not included in the underlying index. As a result, an
adverse development respecting an issuer of securities held by the fund could
result in a greater decline in the fund’s NAV than would be
the
case if all of the securities in the underlying index were held. The fund’s use
of a representative sampling strategy may also include the risk that it may not
track the return of the underlying index with the same degree of accuracy as
would an investment vehicle that invested in every component security of the
underlying index with the same weightings as the underlying index.
•Management
Risk — To
the extent the fund uses representative sampling, the strategy may fail to
produce the intended results.
•Non-Correlation
Risk — There
is no guarantee that the fund will achieve a high degree of correlation to the
underlying index and therefore achieve its investment objective. Market
disruptions and regulatory restrictions could have an adverse effect on the
fund’s ability to adjust its exposure to the required levels in order to track
the underlying index. In addition, the fund’s NAV may deviate from the
underlying index if the fund fair values a portfolio security at a price other
than the price used by the underlying index for that security.
•Authorized
Participant Concentration Risk — Only
an authorized participant may engage in creation or redemption transactions
directly with the fund. The fund may have a limited number of institutions that
act as authorized participants. To the extent that these institutions exit the
business or are unable to proceed with creation and/or redemption orders with
respect to the fund and no other authorized participant is able to step forward
to process creation and/or redemption orders, fund shares may trade at a
discount to net asset value (NAV) and possibly face trading halts and/or
delisting. This risk may be more pronounced in volatile markets, potentially
where there are significant redemptions in exchange-traded funds (ETFs)
generally.
•Concentration
Risk — To
the extent the fund concentrates in a specific industry or a group of
industries, it may be subject to greater risks and market fluctuations than a
portfolio investing in a broader range of industries.
•Large
Shareholder Risk — Certain
shareholders, including other funds advised by the advisor, may from time to
time own a substantial amount of the shares of the fund. In addition, a third
party investor, the advisor or an affiliate of the advisor, an authorized
participant, a market maker, or another entity may invest in the fund and hold
its investment for a limited period of time solely to facilitate commencement of
the fund or to facilitate the fund’s achieving a specified size or scale. There
can be no assurance that any large shareholder would not redeem its investment,
that the size of the fund would be maintained at such levels or that the fund
would continue to meet applicable listing requirements. Redemptions by large
shareholders could have a significant negative impact on the fund. In addition,
transactions by large shareholders may account for a large percentage of the
trading volume on the NYSE Arca, Inc. and may, therefore, have a material upward
or downward effect on the market price of the shares.
•Derivatives
Risk — The
use of derivative instruments such as futures contracts involves risks different
from, or possibly greater than, the risks associated with investing directly in
securities and other traditional instruments. Derivatives are subject to a
number of risks, including liquidity, interest rate, market, credit and
correlation risk. In addition, derivatives can create economic leverage in the
fund’s portfolio, which may result in significant volatility and cause the fund
to participate in losses (as well as gains) in an amount that exceeds the fund’s
initial investment. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment.
•Principal
Loss Risk — At
any given time your shares may be worth less than the price you paid for them.
In other words, it is possible to lose money by investing in the
fund.
An investment in the fund is not a
bank deposit, and it is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government
agency.
The following
bar chart and table provide some indication of the risks of investing in the
fund. The bar chart shows changes in the fund’s performance from year to year.
The table shows how the fund’s average annual returns for the periods shown
compared with those of a broad measure of market performance.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the future. For current performance information,
please visit americancenturyetfs.com.
Sales charges and account fees, if
applicable, are not reflected in the bar chart. If those charges were included,
returns would be less than those
shown.
Calendar Year Total
Returns
Highest Performance
Quarter (2Q
2020): 15.82% Lowest Performance Quarter
(1Q
2020): -26.89%
As
of September 30,
2022,
the most recent calendar quarter end, the fund’s year-to-date return was
-19.02%.
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Average
Annual Total Returns
For
the calendar year ended December 31, 2021 |
1
year |
Since
Inception |
Inception
Date |
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American
Century STOXX®
U.S. Quality Value ETF Shares |
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| Return Before
Taxes |
27.11% |
9.43% |
01/11/2018 |
| Return After Taxes on
Distributions |
26.60% |
8.83% |
01/11/2018 |
| Return After Taxes on Distributions and
Sale of Fund Shares |
16.36% |
7.25% |
01/11/2018 |
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iSTOXX®
American Century USA Quality Value Index
(reflects no deduction for
fees, expenses or taxes) |
27.64% |
9.75% |
01/11/2018 |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their fund shares through
tax-deferred arrangements, such as 401(k) plans or
IRAs.
Investment
Advisor
American
Century Investment Management, Inc.
Portfolio
Managers
Peruvemba
Satish,
Ph.D, CFA, Senior Vice President, Portfolio Manager and Director, Global
Analytics, has been a member of the team that manages the fund since 2018.
Rene
P. Casis,
Vice President and Portfolio Manager, has been a member of the team that manages
the fund since 2018.
Will
Enderle,
Associate Portfolio Manager, has been a member of the team that manages the fund
since 2022.
Paul
Jo,
CFA, Associate Portfolio Manager, has been a member of the team that manages the
fund since 2022.
The
fund is an ETF. Fund shares may only be bought and sold in a secondary market
through a broker-dealer at a market price. Because ETF shares trade at market
prices rather than NAV, shares may trade at a price greater than NAV (a premium)
or less than NAV (a discount). An investor may incur costs attributable to the
difference between the highest price a buyer is willing to pay to purchase
shares of the fund (bid) and the lowest price a seller is willing to accept for
shares of the fund (ask) when buying or selling shares in the secondary market
(bid-ask spread). Investors can find information on the fund’s NAV, market
price, premiums and discounts, and bid-ask spread at
americancenturyetfs.com.
Fund
distributions are generally taxable as ordinary income or capital gains, unless
you are investing through a tax-deferred account such as a 401(k) or individual
retirement account (in which case you may be taxed upon withdrawal of your
investment from such account).
If
you purchase the fund through a broker-dealer or other financial intermediary
(such as a bank), the advisor and its related companies may pay the intermediary
for the sale of fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more
information.
What
are the fund’s investment objectives?
The
fund seeks to provide investment results that closely correspond, before fees
and expenses, to the performance of the underlying index.
The
fund’s investment objective is a nonfundamental investment policy and may be
changed by the Board of Trustees without approval by shareholders.
What
are the fund’s principal investment strategies?
Under
normal market conditions, the fund invests at least 80% of its assets in the
component securities of the underlying index. The underlying index is a
rules-based index maintained and calculated by STOXX®
Ltd. (the index provider). The underlying index is designed to select securities
of large- and mid-capitalization companies that are undervalued or have
sustainable income.
The
underlying index universe is defined by the STOXX®
USA 900 Index, which consists of the 900 largest publicly traded U.S. equity
securities. The underlying index is constructed using a rules-based methodology
that screens and weights stocks based on fundamental measures of quality, value
and income. A quality screen seeks to eliminate the bottom of the universe of
stocks based on measures of profitability, earnings quality, management quality
and earnings estimate revisions. Earnings estimate revisions refer to changes in
analysts’ estimates of a company’s earnings. A valuation score is computed for
the remaining stocks, determined by the attractiveness of each stock relative to
its peers in the same industry group based on value, earnings yield and cash
flow yield metrics. An income sustainability screen based on dividend growth and
dividend coverage metrics is applied to eliminate the bottom universe of
dividend-paying stocks, and an income score based on dividend-yield is computed
for the remaining stocks. The underlying index is constructed by combining the
value stocks and income stocks using the valuation and income scores and
portfolio optimization. Portfolio optimization uses quantitative models to build
a portfolio of stocks from the scores described above that are expected to
provide the optimal balance between risk and expected return. Though component
securities of the underlying index may change from time to time, the index
typically consists of 200-300 securities and, as of September 30, 2022,
its market capitalization range was approximately $1.91
billion to $2.22
trillion.
The
fund may use a “representative sampling” strategy with respect to its underlying
index when a replication strategy might be detrimental to shareholders. For
example, the fund may use such strategy when there are practical difficulties or
substantial costs involved in compiling a portfolio of securities to follow the
underlying index or, in certain instances, when a component security becomes
temporarily illiquid, unavailable or less liquid. To the extent the fund uses
representative sampling, the advisor invests in what it believes to be a
representative sample of the component securities in the underlying index using
quantitative analytical procedures to give the fund’s portfolio an investment
profile similar to that of its underlying index. The fund also may realize
savings in transaction costs or other efficiencies by investing up to 20% of its
assets in securities or instruments not included in the underlying index but
which the advisor believes will help the fund track the underlying
index.
In
addition, the fund may use futures contracts to invest cash balances, simulate
investments in the underlying index, facilitate trading or minimize transaction
costs. The portfolio managers may also use futures contracts to seek to
reduce the fund’s tracking error relative to the underlying index.
The
underlying index and fund are rebalanced monthly and reconstituted
quarterly.
The
fund will concentrate its investments (i.e., hold 25% or more of its net assets)
in a particular industry or group of industries to approximately the same extent
that the underlying index is concentrated.
A
description of the policies and procedures with respect to the disclosure of the
fund’s portfolio securities is available in the statement of additional
information.
What
are the principal risks of investing in the fund?
•Equity
Securities Risk — The
value of equity securities, including common stocks, may fall due to both
changes in general economic conditions that impact the market as a whole, as
well as factors that directly relate to a specific company or its industry. Such
general economic conditions include changes in interest rates, periods of market
turbulence or instability, or general and prolonged periods of economic decline
and cyclical change. A drop in the stock market may depress the price of most or
all of the common stocks that the fund holds. Additionally, investor sentiment
toward particular industries may become negative. The value of an issuer’s
common stock may fall solely because of factors, such as an increase in
production costs, that negatively impact other issuers in the same region,
industry or sector of the market. An issuer’s common stock also may decline
significantly in price over a short period of time due to factors specific to
that issuer, including decisions made by its management or lower demand for its
products or services.
•Market
Trading Risk — Although
shares of the fund are listed for trading on one or more stock exchanges, there
can be no assurance that an active trading market for such shares will develop
or be maintained. There are no obligations of market makers to make a market in
the fund’s shares or of an authorized participant to submit purchase or
redemption orders for Creation Units. Decisions by market makers or authorized
participants to reduce their role or step away from these activities in times of
market
stress
could inhibit the effectiveness of the arbitrage process in maintaining the
relationship between the underlying value of the fund’s portfolio securities and
the fund’s market price. This reduced effectiveness could result in fund shares
trading at a premium or discount to its NAV and also greater than normal
intraday bid/ask spreads.
Shares
of the fund may trade in the secondary market at times when the fund does not
accept orders to purchase or redeem shares. At such times, shares may trade in
the secondary market with more significant premiums or discounts than might be
experienced at times when the fund accepts purchase and redemption orders.
Secondary market trading in fund shares may be halted by a stock exchange
because of market conditions or other reasons, and may be subject to trading
halts caused by extraordinary market volatility pursuant to “circuit breaker”
rules on the stock exchange or market. There can be no assurance that the
requirements necessary to maintain the listing or trading of fund shares will
continue to be met or will remain unchanged. In addition, during a “flash
crash,” the market prices of the fund’s shares may decline suddenly and
significantly. Such a decline may not reflect the performance of the
portfolio securities held by the fund. Flash crashes may cause authorized
participants and other market makers to limit or cease trading in the fund’s
shares for temporary or longer periods. Shareholders could suffer
significant losses to the extent that they sell fund shares at these temporarily
low market prices.
Shares
of the fund may trade at prices other than NAV. Thus, you may pay more (or less)
than NAV when you buy shares of the fund in the secondary market, and you may
receive less (or more) than NAV when you sell those shares in the secondary
market. While the creation/redemption feature is designed to make it likely that
the fund’s shares normally will trade on stock exchanges at prices close to the
fund’s next calculated NAV, market prices are not expected to correlate exactly
with the fund’s NAV due to timing reasons as well as market supply and demand
factors. In addition, disruptions to creations and redemptions or extreme market
volatility may result in trading prices for shares of the fund that differ
significantly from its NAV. The portfolio managers cannot predict whether shares
will trade above (premium), below (discount) or at NAV.
When
buying or selling shares of the fund through a broker, you will likely incur a
brokerage commission or other charges determined by your broker. In addition,
you may incur the cost of the “spread,” that is, any difference between the bid
price and the ask price. The spread varies over time for shares of the fund
based on the fund’s trading volume and market liquidity, and is generally lower
if the fund has a lot of trading volume and market liquidity, and higher if the
fund has little trading volume and market liquidity. During times of market
stress, spreads may widen causing investors to pay more.
•Index-Related
Risk — Unlike
many investment companies, the fund is not actively managed and the portfolio
managers do not attempt to take defensive positions under any market conditions,
including declining markets. Therefore, the portfolio managers generally will
not buy or sell a security unless that security is added or removed,
respectively, from the underlying index, even if that security generally is
underperforming. There is no assurance that the underlying index will be
determined, composed or calculated accurately. While the index provider provides
descriptions of what the underlying index is designed to achieve, the index
provider does not guarantee the quality, accuracy or completeness of data in
respect of its indices, and does not guarantee that the underlying index will be
in line with the described index methodology. Gains, losses or costs to the fund
caused by errors in the underlying index may therefore be borne by the fund and
its shareholders.
•Rebalance
Risk — The
fund rebalances its portfolio in accordance with the underlying index’s
rebalance schedule. Accordingly, any change to this schedule will result in
corresponding changes to the fund’s rebalance schedule.
•Calculation
Methodology Risk — The
underlying index relies on various sources of information to assess the criteria
of issuers included in the underlying index, including information that may be
based on assumptions and estimates. Neither the fund nor the advisor can offer
assurances that the underlying index’s calculation methodology or sources of
information will provide an accurate assessment of included
issuers.
•Style
Risk — There
can be no assurance that the investment factor stock selection process and
screens of the underlying index will enhance performance. Exposure to certain
investment factors and use of screens may detract from performance in some
market environments, perhaps for extended periods.
•Market
Risk — The
value of the fund’s shares depends on the value of the stocks and other
securities it owns. The value of the individual securities the fund owns will go
up and down, sometimes rapidly or unpredictably, depending on the performance of
the companies that issued them, general market and economic conditions and
investor confidence. Market risks, including political, regulatory, economic and
social developments, can affect the value of the fund’s investments. Natural
disasters, public health emergencies, war,
terrorism and other unforeseeable events may lead to increased market volatility
and may have adverse long-term effects on world economies and markets
generally.
•Public
Health Emergency Risk — A
pandemic, caused by the infectious respiratory illness COVID-19, has
caused
travel restrictions, disruption of healthcare systems, prolonged quarantines,
cancellations, supply chain interruptions, lower consumer demand, layoffs,
credit downgrades, and defaults among other economic impacts. Certain markets
experienced temporary closures, extreme volatility, losses, reduced liquidity
and increased trading costs. The
pandemic
may continue to impact the fund and its underlying investments and could cause
increased premiums or discounts to the fund’s NAV.
•Mid-Capitalization
Company Risk — Investment
in medium-sized companies may be riskier, less liquid, more volatile, and more
vulnerable to economic, market, and industry changes than investments in larger,
more mature companies. Securities of smaller companies may trade less frequently
and in smaller volumes than securities of larger companies.
•Tracking
Error Risk — Tracking
error is the divergence of the fund’s performance from that of the underlying
index. Tracking error may occur because of differences between the securities
held in the fund’s portfolio and those included in the underlying index, pricing
differences, transaction costs, the fund’s holding of cash, differences in
timing of the accrual of dividends or interest, changes to the underlying index
or the need to meet various new or existing regulatory requirements. This risk
may be heightened during times of increased market volatility or other unusual
market conditions. Tracking error also may result because the fund incurs fees
and expenses, while the underlying index does not.
•Sampling
Risk — To
the extent the fund uses a representative sampling strategy, it may hold a
smaller number of securities than are in the underlying index or it may hold
securities that are not included in the underlying index. As a result, an
adverse development respecting an issuer of securities held by the fund could
result in a greater decline in the fund’s NAV than would be the case if all of
the securities in the underlying index were held. The fund’s use of a
representative sampling strategy may also include the risk that it may not track
the return of the underlying index with the same degree of accuracy as would an
investment vehicle that invested in every component security of the underlying
index with the same weightings as the underlying index.
•Management
Risk — To
the extent the fund uses representative sampling, the strategy may fail to
produce the intended results.
•Non-Correlation
Risk — There
is no guarantee that the fund will achieve a high degree of correlation to the
underlying index and therefore achieve its investment objective. Market
disruptions and regulatory restrictions could have an adverse effect on the
fund’s ability to adjust its exposure to the required levels in order to track
the underlying index. In addition, the fund’s NAV may deviate from the
underlying index if the fund fair values a portfolio security at a price other
than the price used by the underlying index for that security.
•Authorized
Participant Concentration Risk — Only
an authorized participant may engage in creation or redemption transactions
directly with the fund. The fund has a limited number of institutions that act
as authorized participants, none of which are obligated to engage in creation or
redemption transactions. To the extent that these institutions exit the business
or are unable to proceed with creation and/or redemption orders with respect to
the fund and no other authorized participant is able to step forward to process
creation and/or redemption orders, fund shares may trade at a discount to NAV
and possibly face trading halts and/or delisting. This risk may be more
pronounced in volatile markets, potentially where there are significant
redemptions in ETFs generally. Authorized participant concentration risk may be
heightened in scenarios where authorized participants have limited or diminished
access to the capital required to post collateral.
•Concentration
Risk — To
the extent the fund concentrates in a specific industry or a group of
industries, it may be subject to greater risks and market fluctuations than a
portfolio investing in a broader range of industries.
•Large
Shareholder Risk — Certain
shareholders, including other funds advised by the advisor, may from time to
time own a substantial amount of the shares of the fund. In addition, a third
party investor, the advisor or an affiliate of the advisor, an authorized
participant, a market maker, or another entity may invest in the fund and hold
its investment for a limited period of time solely to facilitate commencement of
the fund or to facilitate the fund’s achieving a specified size or scale. There
can be no assurance that any large shareholder would not redeem its investment,
that the size of the fund would be maintained at such levels or that the fund
would continue to meet applicable listing requirements. Redemptions by large
shareholders could have a significant negative impact on the fund. In addition,
transactions by large shareholders may account for a large percentage of the
trading volume on the NYSE Arca, Inc. and may, therefore, have a material upward
or downward effect on the market price of the shares.
•Derivatives
Risk — The
use of derivative instruments such as futures contracts involves risks different
from, or possibly greater than, the risks associated with investing directly in
securities and other traditional instruments. Derivatives are subject to a
number of risks, including liquidity, interest rate, market, and credit risk.
They also involve the risk of mispricing or improper valuation, the risk that
changes in the value of the derivative may not correlate perfectly with the
underlying asset, rate or index, and the risk of default or bankruptcy of the
other party to the instrument. Gains or losses involving futures may be
substantial - in part because a relatively small price movement in these
securities may result in an immediate and substantial gain or loss for the fund.
In addition, derivatives can create economic leverage in the fund’s portfolio,
which may result in significant volatility and cause the fund to participate in
losses (as well as gains) in an amount that exceeds the fund’s initial
investment. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment.
•Principal
Loss Risk — At
any given time your shares may be worth less than the price you paid for them.
In other words, it is possible to lose money by investing in the
fund.
Who
manages the fund?
The
Board of Trustees, investment advisor and fund management team play key roles in
the management of the fund.
The
Board of Trustees
The
Board of Trustees is responsible for overseeing the advisor’s management and
operations of the fund pursuant to the management agreement. In performing their
duties, Board members receive detailed information about the fund and its
advisor regularly throughout the year, and meet at least quarterly with
management of the advisor to review reports about fund operations. The trustees’
role is to provide oversight and not to provide day-to-day management. The
majority of the trustees are independent of the fund’s advisor. They are not
employees, directors or officers of, and have no financial interest in, the
advisor or any of its affiliated companies (other than as shareholders of
American Century Investments funds), and they do not have any other
affiliations, positions or relationships that would cause them to be considered
“interested persons” under the Investment Company Act of 1940 (Investment
Company Act).
The
Investment Advisor
The
fund’s investment advisor is American Century Investment Management, Inc. (the
advisor). The advisor has been managing investment companies since 1958 and is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.
The
advisor is responsible for managing the investment portfolio of the fund and
directing the purchase and sale of its investment securities. The advisor also
arranges for transfer agency, custody and all other services necessary for the
fund to operate.
For
the services it provides to the fund, the advisor receives a unified management
fee based on a percentage of the daily net assets of the fund. The amount of the
fee is calculated daily and paid monthly in arrears. The advisor pays all
expenses of managing and operating the fund, other than the management fee
payable to the advisor, brokerage and other transaction fees and expenses
relating to the acquisition and disposition of portfolio securities, acquired
fund fees and expenses, interest, taxes, litigation expenses, extraordinary
expenses, and expenses incurred in connection with the provision of shareholder
and distribution services under a plan adopted pursuant to Rule 12b-1 under the
Investment Company Act (if any). The advisor may pay unaffiliated third parties
who provide recordkeeping and administrative services that would otherwise be
performed by an affiliate of the advisor.
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Management
Fees Paid by the Fund to the Advisor As a Percentage of Average
Net Assets for the Fiscal Year Ended August 31, 2022 |
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American
Century STOXX®
U.S. Quality Value ETF |
0.29% |
A
discussion regarding the basis for the Board of Trustees’ approval of the fund’s
investment advisory agreement with the advisor is available in the fund’s annual
report to shareholders for the fiscal year ended August 31, 2022.
The
Fund Management Team
The
portfolio managers buy and sell securities for the fund pursuant to an indexing
investment approach. The portfolio managers’ responsibilities include, among
other things, oversight and maintenances of allocations to the index securities,
selecting the composition of creation and redemption baskets, managing cash
flows, and general oversight of the fund’s portfolio.
The
portfolio managers on the investment team who are jointly and primarily
responsible for the day-to-day management of the fund are identified
below.
Peruvemba
Satish
Mr.
Satish, Senior Vice President, Portfolio Manager and Director, Global Analytics,
joined American Century in 2014. He became a portfolio manager in 2017 and has
been a member of the team that manages the fund since 2018. He has a bachelor’s
degree and master’s degree in mechanical engineering and economics from Birla
Institute of Technology & Science, a master’s degree in economics from State
University of New York and a Ph.D in finance from the University of Texas at
Austin. He is a CFA charterholder.
Rene
P. Casis
Mr.
Casis, Vice President and Portfolio Manager, has been a member of the team that
manages the fund since joining American Century in 2018. Prior to joining
American Century, he was a Partner at 55 Institutional, LLC from 2016 to 2017.
From 2009 to 2016, he served in roles as US iShares Smart Beta Investment
Strategist, US iShares Product Strategist and Senior Portfolio Manager in Beta
Strategies for BlackRock Inc. He has a bachelor’s degree in economics from the
University of California, Santa Barbara.
Will
Enderle
Mr.
Enderle, Associate Portfolio Manager, has been a member of the team that manages
the fund since 2022. Prior to joining American Century as a Portfolio Management
Associate in 2019, he was a Portfolio Management Analyst at Dimensional Fund
Advisors from 2017 to 2019. He has a bachelor’s degree in finance from Wake
Forest University.
Paul
Jo
Mr.
Jo, Associate Portfolio Manager, has been a member of the team that manages the
fund since 2022. Prior to joining American Century in 2021, he was a Vice
President, Portfolio Management Associate at PIMCO from 2014 to 2021. He has
bachelor’s degrees in biomedical engineering and electrical engineering from
Duke University. He is a CFA charterholder.
The
statement of additional information provides additional information about the
accounts managed by the portfolio managers, the structure of their compensation,
and their ownership of fund securities.
Fundamental
Investment Policies
Shareholders
must approve any change to the fundamental investment policies contained in the
statement of additional information. The Board of Trustees and/or the advisor
may change any other policies, including the fund’s investment objective, or
investment strategies described in this prospectus or otherwise used in the
operation of the fund at any time, subject to applicable notice
provisions.
Buying
and Selling Shares
Shares
of the fund may be acquired or redeemed directly from the fund only in Creation
Units or multiples thereof, as discussed below. Only an authorized participant
may engage in creation and redemption transactions directly with the fund. Once
created, shares of the fund generally trade in the secondary market in amounts
less than a Creation Unit.
Shares
of the fund are listed on a national securities exchange for trading during the
trading day. Shares can be bought and sold throughout the trading day like
shares of other publicly traded companies. American Century ETF Trust (the
trust) does not impose any minimum investment for shares of the fund purchased
on an exchange. Shares of the fund trade under the following ticker symbol:
VALQ.
Buying
or selling fund shares on an exchange involves two types of costs that may apply
to all securities transactions. When buying or selling shares of the fund
through a broker, you will likely incur a brokerage commission or other charges
determined by your broker. The commission is frequently a fixed amount and may
be a significant proportional cost for investors seeking to buy or sell small
amounts of shares. In addition, you may incur the cost of the “spread,” that is,
any difference between the bid price and the ask price. The spread varies over
time for shares of the fund based on the fund’s trading volume and market
liquidity, and is generally lower if the fund has a lot of trading volume and
market liquidity, and higher if the fund has little trading volume and market
liquidity.
The
fund’s primary listing exchange is NYSE Arca, Inc., which is open for trading
Monday through Friday and is closed on weekends and the following holidays: New
Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial
Day, Juneteenth National Independence Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Book
Entry
Shares
of the fund are held in book-entry form, which means that no share certificates
are issued. The Depository Trust Company (DTC) or its nominee is the record
owner of all outstanding shares of the fund and is recognized as the owner of
all shares for all purposes.
Investors
owning shares of the fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for shares of the
fund. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
shares, you are not entitled to receive physical delivery of stock certificates
or to have shares registered in your name, and you are not considered a
registered owner of shares. Therefore, to exercise any right as an owner of
shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other securities that you
hold in book-entry or “street name” form.
Frequent
Trading Practices
The
Board of Trustees has not adopted a policy of monitoring for frequent purchases
and redemptions of fund shares (frequent trading). The Board of Trustees
believes that a frequent trading policy is unnecessary because fund shares are
listed for trading on a national securities exchange. Therefore, it is unlikely
that a shareholder could take advantage of a potential arbitrage opportunity
presented by a lag between a change in the value of the fund’s portfolio
securities after the close of the primary markets for the fund’s portfolio
securities and the reflection of that change in the fund’s NAV (market timing),
because the fund generally sells and redeems its shares directly through
transactions that are in-kind and/or for cash, subject to the conditions
described below under Creations and Redemptions.
Investments
by Other Investment Companies
Section
12(d)(1) of the Investment Company Act restricts investments by investment
companies in the securities of other investment companies. Registered investment
companies are permitted to invest in the fund beyond the limits set forth in
Section 12(d)(1), subject to certain terms and conditions set forth in SEC
rules. In order for an unaffiliated registered investment company to invest in
shares of the fund beyond the limitations of Section 12(d)(1) pursuant to Rule
12d1-4, the registered investment company must enter into an agreement with the
trust.
Creations
and Redemptions
Prior
to trading in the secondary market, shares of the fund are “created” at NAV by
market makers, large investors and institutions only in block-size units, called
“Creation Units.” All orders to purchase Creation Units must be placed by or
through an authorized participant that has entered into an authorized
participant agreement (AP Agreement) with Foreside Fund Services, LLC (the
distributor). Only an authorized participant may create or redeem Creation Units
directly with the fund.
A
creation transaction, which is subject to acceptance by the trust, generally
takes place when an authorized participant deposits into the fund a designated
portfolio of securities and/or cash (which may include cash in lieu of certain
securities) in exchange for a specified number of Creation Units. Similarly,
shares can be redeemed only in Creation Units, generally for a designated
portfolio of
securities
and/or cash (which may include cash in lieu of certain securities). Except when
aggregated in Creation Units, shares are not redeemable by the
fund.
The
prices at which creations and redemptions occur are based on the next
calculation of NAV after a creation or redemption order is received in a proper
form under the AP Agreement. The portfolio of securities required for purchase
of a Creation Unit is generally the same as the portfolio of securities the fund
will deliver upon redemption of fund shares, except under certain circumstances.
As a result of any system failure or other interruption, creation or redemption
orders either may not be executed according to the fund’s instructions or may
not be executed at all, or the fund may not be able to place or change such
orders.
Creations
and redemptions must be made through a firm that is either a broker-dealer or
other participant in the Continuous Net Settlement System of the National
Securities Clearing Corporation or a DTC participant and, in either case, has
executed an AP Agreement with the distributor. Information about the procedures
regarding creations and redemptions of Creation Units (including the cut-off
times for receipt of creation and redemption orders) is included in the fund’s
statement of additional information (SAI).
Because
new shares may be created and issued on an ongoing basis, at any point during
the life of the fund a “distribution,” as such term is used in the Securities
Act of 1933 (Securities Act), may be occurring. Broker-dealers and other persons
are cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner that could render them statutory underwriters and subject to the
prospectus delivery and liability provisions of the Securities Act. Any
determination of whether one is an underwriter must take into account all the
relevant facts and circumstances of each particular case.
Broker-dealers
should also note that dealers who are not “underwriters” but are participating
in a distribution (as contrasted to ordinary secondary transactions), and thus
dealing with shares that are part of an “unsold allotment” within the meaning of
Section 4(a)(3)(C) of the Securities Act, would be unable to take advantage of
the prospectus delivery exemption provided by Section 4(a)(3) of the Securities
Act. For delivery of prospectuses to exchange members, the prospectus delivery
mechanism of Rule 153 under the Securities Act is available only with respect to
transactions on a national securities exchange.
In
addition, certain affiliates of the fund and the advisor may purchase and resell
fund shares pursuant to this prospectus.
Share
Price
The
price of fund shares is based on market price. The trading prices of the fund’s
shares in the secondary market generally differ from the fund’s daily NAV and
are affected by market forces such as supply and demand, economic conditions and
other factors.
Calculation
of NAV
American
Century Investments will price the fund shares purchased or redeemed by
authorized participants based on the net
asset value
(NAV) next determined after an order is received in good order by the fund’s
transfer agent. We determine the NAV of the fund as of the close of regular
trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on
each day the NYSE is open. On days when the NYSE is closed (including certain
U.S. national holidays), we do not calculate the NAV.
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The
net
asset value,
or NAV, of the fund is the current value of the fund’s assets, minus any
liabilities, divided by the number of shares of the fund
outstanding. |
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The
value of the securities and other assets and liabilities held by the fund are
determined by the advisor, as the valuation designee, pursuant to its valuation
policies and procedures. The fund’s Board of Trustees oversees the valuation
designee and at least annually reviews its valuation policies and procedures.
Valuations are determined in accordance with applicable federal securities laws
and accounting principles generally accepted in the United States.
Portfolio
securities for which market quotations are readily available are valued at their
market price. Equity securities and other equity instruments for which market
quotations are readily available are valued at the last reported official
closing price or sale price as of the time the NAV is determined.
If
the valuation
designee
determines that the market price for a portfolio security is not readily
available or is
believed by the valuation designee to be unreliable,
such security is valued at
fair value
as determined in good faith by the valuation
designee, in accordance with its
policies and
procedures. Circumstances that may cause the fund to determine
that market quotations are not available or reliable include, but are not
limited to:
•when
there is a significant event subsequent to the market quotation;
•trading
in a security has been halted during the trading day; or
•trading
in a security is insufficient or did not take place due to a closure or
holiday.
If
such circumstances occur, the valuation
designee
will fair value the security if the fair valuation would materially impact the
fund’s NAV. While fair value determinations involve judgments that are
inherently subjective, these determinations are made in good faith in accordance
with the
valuation designee’s valuation policies and
procedures.
The
effect of using fair value determinations is that the fund’s NAV will be based,
to some degree, on security valuations that the valuation
designee reasonably
believes are fair rather than being solely determined by the market. Use of fair
value prices and certain current market valuations, however, could result in a
difference between the prices used to calculate the fund’s NAV and the prices
used by the Index,
which, in turn, could result in a difference between the fund’s performance and
the performance of the Index
and introduce tracking error.
Equity
securities with no current day last sale or official close price may be priced
at the mean of the bid and ask market quotations obtained from a listing
exchange or an independent broker who is an established market maker in the
security. The valuation designee may use third party pricing services to assist
in the determination of fair value.
With
respect to any portion of the fund’s assets that are invested in mutual
funds,
the fund’s NAV will be calculated based upon the NAVs of such mutual
funds.
These
mutual funds
are required to explain the circumstances under which they will use fair value
pricing and the effects of using fair value pricing in their
prospectuses.
Trading
of securities in foreign markets may not take place every day the NYSE is open.
Also, trading in some foreign markets and on some electronic trading networks
may take place on weekends or holidays when the fund’s NAV is not calculated.
So, the value of the fund’s portfolio may be affected on days when you will not
be able to purchase or sell fund shares.
Distributions
Federal
tax laws require the fund to make distributions to its shareholders in order to
qualify as a regulated investment company. Qualification as a regulated
investment company means the fund should not be subject to state or federal
income tax on amounts distributed. The distributions generally consist of
dividends and interest received by the fund, as well as capital
gains
realized by the fund on the sale of its investment securities.
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Capital
gains
are
increases in the values of capital assets, such as stocks or bonds, from
the time the assets are purchased. |
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The
fund generally expects to pay distributions of substantially all of its income,
if any, quarterly. Distributions from realized capital gains, if any, are paid
annually. It may make more frequent distributions if necessary to comply with
Internal Revenue Code provisions.
Although
dividends generally will be treated as distributed when paid, any dividend
declared by a fund in October, November or December and payable to shareholders
of record in such a month that is paid during the following January will be
treated for U.S. federal income tax purposes as received by shareholders on
December 31 of the calendar year in which it was declared.
Dividend
payments are made through DTC participants and indirect participants to
beneficial owners then of record with proceeds received from the fund.
Distributions may be automatically reinvested in whole fund shares only if you
purchased the shares through a broker that makes such option
available.
Some
of the tax consequences of owning shares of a fund will vary depending on
whether you own them through a taxable or tax-deferred account. Distributions by
a fund of dividend and interest income, capital gains and other income it has
generated through its investment activities will generally be taxable to
shareholders who hold shares in a taxable account. Tax consequences also may
result when investors sell fund shares.
Tax-Deferred
Accounts
If
you purchase fund shares through a tax-deferred account, such as an IRA or
employer-sponsored retirement plan, income and capital gains distributions
usually will not be subject to current taxation but will accumulate in your
account under the plan on a tax-deferred basis. Likewise, moving from one fund
to another fund within a plan or tax-deferred account generally will not cause
you to be taxed. For information about the tax consequences of making purchases
or withdrawals through a tax-deferred account, please consult your plan
administrator, your summary plan description or a tax advisor.
Taxable
Accounts
If
you own fund shares through a taxable account, you may be taxed on your
investments if the fund makes distributions or if you sell your fund
shares.
Taxability
of Distributions
Fund
distributions may consist of income, such as dividends and interest earned by a
fund from its investments, or capital gains generated by a fund from the sale of
investment securities. Distributions of income are taxed as ordinary income,
unless they are designated as qualified
dividend income
and you meet a minimum required holding period with respect to your shares of
the fund, in which case distributions of income are taxed at the same rates as
long-term capital gains.
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Qualified
dividend income
is
a dividend received by a fund from the stock of a domestic or qualifying
foreign corporation, provided that the fund has held the stock for a
required holding period and the stock was not on loan at the time of the
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The
tax character of any distributions from capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions or take
them in cash. Short-term (one year or less) capital gains are taxable as
ordinary income. Gains on securities held for more than one year are taxed at
the lower rates applicable to long-term capital gains.
If
a fund’s distributions exceed current and accumulated earnings and profits, such
excess will generally be considered a return of capital. A return of capital
distribution is generally not subject to tax, but will reduce your cost basis in
the fund and result in higher realized capital gains (or lower realized capital
losses) upon the sale of fund shares.
You
will receive information regarding the tax character of fund distributions for
each calendar year in an annual tax mailing.
If
you meet specified income levels, you will also be subject to a 3.8% Medicare
contribution tax which is imposed on net investment income, including interest,
dividends and capital gains. Distributions also may be subject to state and
local taxes. Because everyone’s tax situation is unique, you may want to consult
your tax professional about federal, state and local tax
consequences.
Taxes
on Transactions
Your
sales of fund shares are subject to capital gains tax. Short-term capital gains
are gains on fund shares you held for 12 months or less. Long-term capital gains
are gains on fund shares you held for more than 12 months. If your shares
decrease in value, their sale will result in a long-term or short-term capital
loss. However, you should note that loss realized upon the sale of shares held
for six months or less will be treated as a long-term capital loss to the extent
of any distribution of long-term capital gain to you with respect to those
shares. If a loss is realized on the sale of fund shares, the reinvestment in
additional fund shares within 30 days before or after the sale may be subject to
the wash sale rules of the Internal Revenue Code. This may result in a
postponement of the recognition of such loss for federal income tax
purposes.
If
you have not certified that your Social Security number or tax identification
number is correct and that you are not subject to withholding, you may be
subject to backup withholding at the applicable federal withholding tax rate on
taxable dividends, capital gains distributions and proceeds from the sale of
fund shares.
Taxes
on Creations and Redemptions of Creation Units
An
Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss equal to the difference between the market value
of the Creation Units at the time and the sum of the exchanger’s aggregate basis
in the securities surrendered plus the amount of cash paid for such Creation
Units. A person who redeems Creation Units will generally recognize a gain or
loss equal to the difference between the exchanger’s basis in the Creation Units
and the sum of the aggregate market value of any securities received plus the
amount of any cash received for such Creation Units. The IRS, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing “wash sales,” or on the
basis that there has been no significant change in economic
position.
Any
capital gain or loss realized upon the creation of Creation Units will generally
be treated as long-term capital gain or loss if the securities exchanged for
such Creation Units have been held for more than one year. Any capital gain or
loss realized upon the redemption of Creation Units will generally be treated as
long-term capital gain or loss if the shares comprising the Creation Units have
been held for more than one year. Otherwise, such capital gains or losses will
generally be treated as short-term capital gain or loss. Any loss upon a
redemption of Creation Units held for six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions to
the applicable Authorized Participant of long-term capital gain with respect to
the Creation Units (including any amounts credited to the Authorized Participant
as undistributed capital gains).
If
a fund redeems Creation Units in cash, it may recognize more capital gains than
it will if it redeems Creation Units in-kind.
Buying
a Dividend
Purchasing
fund shares in a taxable account shortly before a distribution is sometimes
known as buying a dividend. In taxable accounts, you must pay income taxes on
the distribution whether you reinvest the distribution or take it in cash. In
addition, you will have to pay taxes on the distribution whether the value of
your investment decreased, increased or remained the same after you bought the
fund shares.
The
risk in buying a dividend is that a fund’s portfolio may build up taxable income
and gains throughout the period covered by a distribution, as income is earned
and securities are sold at a profit. The fund distributes the income and gains
to you, after subtracting any losses, even if you did not own the shares when
the income was earned or the gains occurred.
If
you buy a dividend, you incur the full tax liability of the distribution period,
but you may not enjoy the full benefit of the income earned or the gains
realized in the fund’s portfolio.
Service,
Distribution and Administrative Fees
Investment
Company Act Rule 12b-1 permits investment companies that adopt a written plan to
pay certain expenses associated with the distribution of their shares out of
fund assets. The Board of Trustees has adopted a 12b-1 plan that allows the fund
to pay annual fees not to exceed 0.25% to the distributor for distribution and
individual shareholder services. However, the Board of Trustees has determined
not to authorize payment of a 12b-1 plan fee at this time.
Because
these fees may be used to pay for services that are not related to prospective
sales of the fund, to the extent that a fee is authorized, the fund will
continue to make payments under its plan even if it is closed to new investors.
Because these fees are paid out of the fund’s assets on an ongoing basis, to the
extent that a fee is authorized, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.
The
advisor and its affiliates may make payments to intermediaries for various
additional services, other expenses and/or the intermediaries’ distribution of
the fund out of their profits or other available sources. Such payments may be
made for one or more of the following: (1) distribution, which may include
expenses incurred by intermediaries for their sales activities with respect to
the fund, such as preparing, printing and distributing sales literature and
advertising materials and compensating registered representatives or other
employees of such financial intermediaries for their sales activities, as well
as the opportunity for the fund to be made available by such intermediaries; (2)
shareholder services, such as providing individual and custom investment
advisory services to clients of the financial intermediaries; and (3) marketing
and promotional services, including business planning assistance, educating
personnel about the fund, and sponsorship of sales meetings, which may include
covering costs of providing speakers, meals and other entertainment. The advisor
may pay partnership and/or sponsorship fees to support seminars, conferences,
and other programs designed to educate intermediaries about the fund and may
cover the expenses associated with attendance at such meetings, including travel
costs. The advisor and its affiliates may also pay fees related to obtaining
data regarding intermediary or financial advisor activities to assist American
Century with sales reporting, business intelligence and training and education
opportunities. These payments and activities are intended to provide an
incentive to intermediaries to sell the fund by educating them about the fund
and helping defray the costs associated with offering the fund. These payments
may create a conflict of interest by influencing the intermediary to recommend
the fund over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information. The amount of any payments
described in this paragraph is determined by the advisor, and all such amounts
are paid out of their available assets, and not paid by you or the fund. As a
result, the total expense ratio of the fund will not be affected by any such
payments.
The
underlying index is maintained and calculated by STOXX®
Ltd.
STOXX®
Limited, Deutsche Börse Group and their licensors, research partners or data
providers have no relationship to American Century Investment Management, Inc.,
other than the licensing of the iSTOXX®
American Century USA Quality Value Index and the related trademarks for use in
connection with the fund.
iSTOXX®
indices are tailored to a customer request or market requirement based on an
individualized rule book which is not integrated into the STOXX®
Global index family.
STOXX®,
Deutsche Börse Group and their licensors, research partners or data providers do
not:
•sponsor,
endorse, sell or promote the fund.
•
recommend that any person invest in the fund or any other
securities.
•
have any responsibility or liability for or make any decisions about the timing,
amount or pricing of fund shares.
•
have any responsibility or liability for the administration, management or
marketing of the fund.
•
consider the needs of the fund or the owners of the fund in determining,
composing or calculating the iSTOXX®
American Century USA Quality Value Index or have any obligation to do
so.
STOXX®,
Deutsche Börse Group and their licensors, research partners or data providers
give no warranty, and exclude any liability (whether in negligence or
otherwise), in connection with the fund or their performance.
STOXX®
does not assume any contractual relationship with the purchasers of the fund or
any other third parties.
Specifically,
•STOXX®,
Deutsche Börse Group and their licensors, research partners or data providers do
not give any warranty, express or implied, and exclude any liability
about:
•The
results to be obtained by the fund, the owner of the fund or any other person in
connection with the use of the iSTOXX®
American Century USA Quality Value Index and the data included in the
iSTOXX®
American Century USA Quality Value Index;
•The
accuracy, timeliness, and completeness of the iSTOXX®
American Century USA Quality Value Index and its data;
•The
merchantability and the fitness for a particular purpose or use of the
iSTOXX®
American Century USA Quality Value Index and its data;
•The
performance of the fund generally.
•STOXX®,
Deutsche Börse Group and their licensors, research partners or data providers
give no warranty and exclude any liability, for any errors, omissions or
interruptions in the iSTOXX®
American Century USA Quality Value Index or its data;
•Under
no circumstances will STOXX®,
Deutsche Börse Group or their licensors, research partners or data providers be
liable (whether in negligence or otherwise) for any lost profits or indirect,
punitive, special or consequential damages or losses, arising as a result of
such errors, omissions or interruptions in the iSTOXX®
American Century USA Quality Value Index or its data or generally in relation to
the fund, even in circumstances where STOXX®,
Deutsche Börse Group or their licensors, research partners or data providers are
aware that such loss or damage may occur.
The
licensing Agreement between American Century Investment Management, Inc. and
STOXX®
is solely for their benefit and not for the benefit of the owners of the fund or
any other third parties.
Understanding
the Financial Highlights
The
table on the next page itemizes what contributed to the changes in share price
during the most recently ended fiscal year. It also shows the changes in share
price for this period in comparison to changes over the last five fiscal years
(or a shorter period if the fund is not five years old).
On
a per-share basis, the table includes as appropriate
•share
price at the beginning of the period
•investment
income and capital gains or losses
•distributions
of income and capital gains paid to investors
•share
price at the end of the period
The
table also includes some key statistics for the period as
appropriate
•Total
Return — the
overall percentage of return of the fund, assuming the reinvestment of all
distributions
•Expense
Ratio — the
operating expenses of the fund as a percentage of average net
assets
•Net
Income Ratio — the
net investment income of the fund as a percentage of average net
assets
•Portfolio
Turnover — the
percentage of the fund’s investment portfolio that is replaced during the
period
The
Financial Highlights have been audited by Deloitte & Touche LLP, independent
registered public accounting firm. The Report of Independent Registered Public
Accounting Firm and the financial statements are included in the fund’s annual
report, which is available upon request.
American
Century STOXX®
U.S. Quality Value ETF
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| For
a Share Outstanding Throughout the Years Ended August 31 (except as
noted) |
| Per-Share
Data |
Ratios
and Supplemental Data |
|
|
| Income
From Investment Operations: |
|
|
| Ratio
to Average Net Assets of: |
| |
|
| Net
Asset
Value, Beginning
of Period |
Net
Investment
Income
(Loss)(1) |
Net
Realized
and
Unrealized
Gain (Loss) |
Total
From
Investment
Operations |
Distributions
From Net Investment Income |
Net
Asset Value, End of Period |
Total
Return(2) |
Operating
Expenses |
Net
Investment
Income
(Loss) |
Portfolio
Turnover
Rate(3) |
Net
Assets,
End of
Period
(in thousands) |
| 2022 |
$51.82 |
1.19 |
(5.14) |
3.95 |
1.06 |
$46.81 |
(7.70)% |
0.29% |
2.36% |
118% |
$203,645 |
|
| 2021 |
$38.76 |
0.83 |
13.02 |
13.85 |
(0.79) |
$51.82 |
36.16% |
0.29% |
1.81% |
147% |
$255,219 |
|
| 2020 |
$39.21 |
1.02 |
(0.47) |
0.55 |
(1.00) |
$38.76 |
1.55% |
0.29% |
2.66% |
178% |
$137,598 |
|
| 2019 |
$41.66 |
1.15 |
(2.68) |
(1.53) |
(0.92) |
$39.21 |
(3.60)% |
0.29% |
2.94% |
190% |
$30,391 |
|
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2018(4) |
$40.37 |
0.55 |
1.11 |
1.66 |
(0.37) |
$41.66 |
4.16% |
0.29%(5) |
2.17%(5) |
77% |
$7,291 |
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| Notes
to Financial Highlights |
(1)Computed
using average shares outstanding throughout the period.
(2)Total
returns are calculated based on the net asset value of the last business day.
Total returns for periods less than one year are not annualized.
(3)Excludes
securities received or delivered in kind.
(4)January
11, 2018 (fund inception) through August 31, 2018.
(5)Annualized.
Notes
Where
to Find More Information
Annual
and Semiannual Reports
Additional
information about the fund’s investments is available in the fund’s annual and
semiannual reports to shareholders. In the fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the fund’s performance during its last fiscal year. This prospectus
incorporates by reference the Report of Independent Registered Public Accounting
Firm and the financial statements included in the fund’s annual
report
to shareholders dated August 31, 2022.
Statement
of Additional Information (SAI)
The
SAI contains a more detailed legal description of the fund’s operations,
investment restrictions, policies and practices. The SAI
is incorporated by reference into this prospectus. This means that it is legally
part of this prospectus, even if you don’t request a copy.
You
may obtain a free copy of the SAI, annual reports and semiannual reports, and
you may ask questions about the fund or your accounts, online at
americancenturyetfs.com, by contacting American Century Investments at the
addresses or telephone numbers listed below or by contacting your financial
intermediary.
The
Securities and Exchange Commission (SEC)
Reports
and other information about the fund are available on the EDGAR database on the
SEC’s website at sec.gov, and copies of this information may be obtained, after
paying a duplicating fee, by electronic request at the following email address:
[email protected].
This
prospectus shall not constitute an offer to sell securities of the fund in any
state, territory, or other jurisdiction where the fund’s shares have not been
registered or qualified for sale, unless such registration or qualification is
not required, or under any circumstances in which such offer or solicitation
would be unlawful.
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American
Century Investments
americancenturyetfs.com |
Financial
Professionals
P.O. Box 419385
Kansas City, Missouri
64141-6385
833-ACI-ETFS |
Investment
Company Act File No. 811-23305
CL-PRS-93573
2301
