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Annual
Report |
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August
31, 2022 |
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American
Century®
Mid Cap Growth Impact ETF (MID) |
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American
Century®
Sustainable Equity ETF (ESGA) |
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American
Century®
Sustainable Growth ETF (ESGY) |
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President’s
Letter |
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Mid
Cap Growth Impact ETF |
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Performance |
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Portfolio
Commentary |
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Fund
Characteristics |
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Sustainable
Equity ETF |
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Performance |
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Portfolio
Commentary |
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Fund
Characteristics |
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Sustainable
Growth ETF |
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Performance |
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Portfolio
Commentary |
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Fund
Characteristics |
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Shareholder
Fee Examples |
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Schedules
of Investments |
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Statements
of Assets and Liabilities |
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Statements
of Operations |
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Statements
of Changes in Net Assets |
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Notes
to Financial Statements |
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Financial
Highlights |
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Report
of Independent Registered Public Accounting Firm |
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Management |
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Approval
of Management Agreement |
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Liquidity
Risk Management Program |
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Additional
Information |
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Any
opinions expressed in this report reflect those of the author as of the date of
the report, and do not necessarily represent the opinions of American Century
Investments®
or any other person in the American Century Investments organization. Any such
opinions are subject to change at any time based upon market or other conditions
and American Century Investments disclaims any responsibility to update such
opinions. These opinions may not be relied upon as investment advice and,
because investment decisions made by American Century Investments funds are
based on numerous factors, may not be relied upon as an indication of trading
intent on behalf of any American Century Investments fund. Security examples are
used for representational purposes only and are not intended as recommendations
to purchase or sell securities. Performance information for comparative indices
and securities is provided to American Century Investments by third party
vendors. To the best of American Century Investments’ knowledge, such
information is accurate at the time of printing.
Jonathan
Thomas
Dear
Investor:
Thank
you for reviewing this annual report for the period ended August 31, 2022.
Annual reports
help
convey important information about fund returns, including market factors that
affected
performance.
For additional investment insights, please visit
americancenturyetfs.com.
Mounting
Market Challenges Hampered Performance
Asset
class performance weakened dramatically during the funds’ fiscal year. In late
2021,
generally
upbeat economic activity and corporate earnings supported gains for most U.S.
and
global
stock indices. Returns generally remained positive despite rapidly rising
inflation and waning
central
bank support—factors that had started to weigh on fixed-income
indices.
By
early 2022, the market climate shifted quickly. Inflation, which was already at
multiyear highs,
rose
to levels last seen in the early 1980s. Massive fiscal and monetary support
unleashed during
the
pandemic was partly to blame. In addition, escalating energy prices, supply
chain breakdowns
and
labor market shortages further aggravated inflation in the U.S. and other
developed markets.
Russia’s
invasion of Ukraine in February also exacerbated global inflationary
pressures.
The
Bank of England launched its inflation-fighting campaign in December and
continued to lift
rates
through period-end. The Federal Reserve responded to surging inflation in March,
launching
an
aggressive rate-hike campaign and ending its asset purchase program.
Policymakers indicated
taming
inflation remains their priority, even as the U.S. economy contracted in 2022’s
first two
quarters.
Facing record-high inflation in the eurozone, the European Central Bank in July
embarked
on
its first rate-hike effort in 11 years.
The
combination of sharply elevated inflation, tighter monetary policy, geopolitical
strife and weak
economies
triggered sharp market volatility and fueled global recession fears. Against
this
backdrop,
most U.S. and global stock and bond indices declined sharply for the reporting
period.
Staying
Disciplined in Uncertain Times
We
expect market volatility to linger as investors navigate a complex environment
of high inflation,
rising
interest rates and economic uncertainty. In addition, Russia’s invasion of
Ukraine
complicates
an increasingly tense geopolitical backdrop and threatens Europe’s winter
energy
supply.
We will continue to monitor the broad backdrop and its influence on financial
markets.
We
appreciate your confidence in us during these extraordinary times. Our firm has
a long history
of
helping clients weather unpredictable markets, and we’re confident we will
continue to meet
today’s
challenges.
Sincerely,
Jonathan
Thomas
President
and Chief Executive Officer
American
Century Investments
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Mid
Cap Growth Impact ETF (MID) |
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Total
Returns as of August 31, 2022 |
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Average
Annual Returns |
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1
year |
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Since
Inception |
Inception
Date |
Net
Asset Value |
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-27.33% |
|
|
6.56% |
7/13/2020 |
Market
Price |
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-27.39% |
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|
6.55% |
7/13/2020 |
Russell
Midcap Growth Index |
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-26.69% |
|
|
4.26% |
— |
Market
price is determined using the bid/ask midpoint at 4:00 p.m. Eastern time, when
the net asset value (NAV) is typically calculated. Market performance does not
represent the returns you would receive if you traded shares at other times. NAV
prices are used to calculate market price performance prior to the date when the
fund first traded on the NYSE Arca, Inc.
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Growth
of $10,000 Over Life of Fund |
$10,000
investment made July 13, 2020 |
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Value
on August 31, 2022 |
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Net
Asset Value — $11,451 |
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Russell
Midcap Growth Index — $10,931 |
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Total
Annual Fund Operating Expenses |
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0.45% |
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The
total annual fund operating expenses shown is as stated in the fund’s prospectus
current as of the date of this report. The prospectus may vary from the expense
ratio shown elsewhere in this report because it is based on a different time
period, includes acquired fund fees and expenses, and, if applicable, does not
include fee waivers or expense reimbursements.
Data
presented reflect past performance. Past performance is no guarantee of future
results. Current performance may be higher or lower than the performance shown.
Total returns for periods less than one year are not annualized. Investment
return and principal value will fluctuate, and redemption value may be more or
less than original cost. Data assumes reinvestment of dividends and capital
gains, and none of the charts reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance data current to the most recent month end, please call
1-800-345-6488 or visit americancenturyetfs.com. For additional information
about the funds, please consult the prospectus.
Portfolio
Managers: Rob Brookby, Nalin Yogasundram and Rene Casis
Fund
Strategy
American
Century Mid Cap Growth Impact ETF is an actively managed fund that seeks
long-term capital growth. The portfolio managers look for stocks of
medium-capitalization companies they believe will increase in value over time,
using proprietary fundamental research. The initial research process begins by
analyzing themes aligned with the U.N. Sustainable Development Goals (SDG) to
identify companies that generate, or could generate, social and environmental
impact alongside a financial return. We make our investment decisions based
primarily on our analysis of individual companies, rather than on broad economic
forecasts. We generate an impact thesis to explain current or projected SDG
alignment in combination with each security’s fundamental growth profile.
Performance
Review
The
fund returned -27.39% on a market price basis for the 12-month period ended
August 31, 2022. On a net asset value (NAV) basis, the fund returned -27.33%.
For the same time period, the Russell Midcap Growth Index, the fund’s benchmark,
returned -26.69%. The fund’s NAV and market price returns reflect fees and
operating expenses, while the index return does not.
Industrials
Detracted
Road
and rail stocks weighed on performance in the industrials sector, largely due to
our position in Lyft. The ride-hailing company surprised investors with a
significant reduction in the company’s profit margin forecast due to launching
initiatives that deviated from plans communicated earlier in the year.
The
portfolio was underweight energy relative to the benchmark. Our lighter exposure
was a meaningful underperformer as sanctions on Russian oil purchases
effectively removed several million barrels of oil and refined products from
global markets. The resulting price increases boosted the sector.
Other
detractors included DocuSign. The company develops software for online
signatures and document management. DocuSign was a beneficiary of the
pandemic-driven work-from-home environment but offered weak guidance as that
tailwind subsides. We believe in the long-term adoption of e-signature and a
more efficient document workflow that DocuSign offers. The small- and
micro-merchant digital payments company Block (formerly Square) suffered during
the growth sell-off as initially rising interest rates and later recessionary
fears weighed on the stock. Additionally, Block’s focus on blockchain
technology—which enables cryptocurrencies—hurt as crypto prices fell. Surging
interest rates and investors’ move away from riskier assets because of the
Russia-Ukraine war led fast-growth and expensive technology stocks such as IT
services company Twilio to underperform. Block and Twilio were eliminated.
Natera hampered performance. The stock of this genetic testing company fell amid
allegations of marketing impropriety. We eliminated our position as Natera no
longer aligned with our mandate for proper governance.
Information
Technology Benefited Performance
Stock
selection in the software industry led performance in information technology,
driven by Palo Alto Networks.
Over
the past three years this cybersecurity software provider has transformed into a
cloud-based platform of next-generation cybersecurity products. On top of a very
strong environment for its products, Palo Alto said it expects greater free cash
flow generation now that the heavy lift in its transformation is over. Cadence
Design Systems sells software to help build semiconductor chips. Semiconductors
have unprecedented tailwinds enabling themes like the cloud, 5G, internet of
things and ultimately the metaverse. Cadence benefited from more customers and
more usage.
Enphase
Energy makes inverters to efficiently convert power from solar cells into usable
electricity for the home. Demand for solar is high now that prices have been cut
by 90% the past decade. After a period of revenue constrained by supply chain
issues, Enphase experienced accelerating growth as the company addressed the
supply challenges. Keysight Technologies sells measurement tools for
high-frequency applications such as 5G and in automobiles. Keysight benefited
from multiple tailwinds as complex communications capabilities are being added
to an increasing set of applications from cars to consumer devices.
Elsewhere,
Sarepta Therapeutics was a key contributor. This biopharmaceutical company
benefited from investor enthusiasm about its pipeline of burgeoning gene
therapies to treat rare diseases. Materials in general benefited from greater
demand and firmer pricing due to global supply chain disruptions. Albemarle was
a top contributor on demand for lithium, a key ingredient of batteries for
electric vehicles.
Portfolio
Positioning
Our
process uses fundamental analysis aimed at identifying mid-capitalization
companies producing attractive, sustained earnings growth. We seek to reduce
unintended, nonfundamental risks and align the portfolio with fundamental,
company-specific risks that we believe will be rewarded over time. As a result
of this approach, our sector and industry allocations reflect where we are
finding opportunities at a given time. We see longer-term opportunities in
companies seeking to achieve the U.N. SDG with key impact themes of a greener
planet; innovation, efficiency and education driven by technology; and improving
health care outcomes across various sectors of our portfolio.
A
strategy that considers the United Nations Sustainable Development Goals (SDG)
criteria may limit the investment opportunities available to a portfolio.
Therefore, the portfolio may underperform or perform differently than other
portfolios that do not have an SDG investment focus. A portfolio’s
SDG investment focus may also result in the portfolio investing in securities or
industry sectors that perform differently or maintain a different risk profile
than the market generally or compared to underlying holdings that are not
screened for SDG standards.
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AUGUST
31, 2022 |
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Mid
Cap Growth Impact ETF |
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Types
of Investments in Portfolio |
%
of net assets |
Common
Stocks |
97.3% |
Short-Term
Investments |
3.2% |
Other
Assets and Liabilities |
(0.5)% |
|
|
Top
Five Industries |
%
of net assets |
Software |
17.9% |
Semiconductors
and Semiconductor Equipment |
14.6% |
Hotels,
Restaurants and Leisure |
9.2% |
Chemicals |
7.5% |
Biotechnology |
7.2% |
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Sustainable
Equity ETF (ESGA) |
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Total
Returns as of August 31, 2022 |
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|
Average
Annual Returns |
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|
|
1
year |
|
|
Since
Inception |
Inception
Date |
Net
Asset Value |
|
-14.03% |
|
|
11.15% |
7/13/2020 |
Market
Price |
|
-14.10% |
|
|
11.14% |
7/13/2020 |
S&P
500 Index |
|
-11.23% |
|
|
12.87% |
— |
Market
price is determined using the bid/ask midpoint at 4:00 p.m. Eastern time, when
the net asset value (NAV) is typically calculated. Market performance does not
represent the returns you would receive if you traded shares at other times. NAV
prices are used to calculate market price performance prior to the date when the
fund first traded on the NYSE Arca, Inc.
|
|
|
Growth
of $10,000 Over Life of Fund |
$10,000
investment made July 13, 2020 |
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Value
on August 31, 2022 |
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Net
Asset Value — $12,531 |
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S&P
500 Index — $12,948 |
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|
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Total
Annual Fund Operating Expenses |
|
|
|
|
|
|
|
|
|
0.39% |
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|
|
The
total annual fund operating expenses shown is as stated in the fund’s prospectus
current as of the date of this report. The prospectus may vary from the expense
ratio shown elsewhere in this report because it is based on a different time
period, includes acquired fund fees and expenses, and, if applicable, does not
include fee waivers or expense reimbursements.
Data
presented reflect past performance. Past performance is no guarantee of future
results. Current performance may be higher or lower than the performance shown.
Total returns for periods less than one year are not annualized. Investment
return and principal value will fluctuate, and redemption value may be more or
less than original cost. Data assumes reinvestment of dividends and capital
gains, and none of the charts reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance data current to the most recent month end, please call
1-800-345-6488 or visit americancenturyetfs.com. For additional information
about the funds, please consult the prospectus.
Portfolio
Managers: Joe Reiland, Justin Brown, Rob Bove and Rene Casis
Fund
Strategy
American
Century Sustainable Equity ETF is an actively managed fund that seeks long-term
capital growth. We seek to invest in larger U.S. companies demonstrating both
improving business fundamentals and sustainable corporate behaviors in pursuit
of long-term financial returns and a stronger environmental, social and
governance (ESG) profile than the S&P 500 Index. As opposed to avoiding
certain sectors entirely, we seek to invest in the most attractive companies
within all sectors. A broad investment universe provides investors with both an
attractive ESG profile and the potential for positive risk-adjusted returns over
time. We construct our portfolio to intentionally acquire stock-specific risk
aligned with our financial and sustainability research, while minimizing
relative exposures related to sectors and common factor risks, such as
market-capitalization size, volatility and momentum.
Performance
Review
The
fund returned -14.10% on a market price basis for its fiscal year ended August
31, 2022. On a net asset value (NAV) basis, the fund returned -14.03%. For the
same time period, the S&P 500 Index, the fund’s benchmark, returned -11.23%.
The fund’s NAV and market price returns reflect fees and operating expenses,
while the index return does not.
Information
Technology Detracted
Stock
selection in the semiconductors and semiconductor equipment industry helped
drive underperformance in information technology. Both chipmakers and
semiconductor equipment manufacturers are being pressured by concerns that a
slowdown in consumer spending will hamper demand for chips. ASML Holding, a
Netherlands-based semiconductor capital equipment maker, was a significant
industry detractor. Stock selection in the IT services industry also hurt
performance in the sector. PayPal Holdings reported disappointing earnings
largely due to declining eBay transactions. We eliminated PayPal. Underweighting
Apple relative to the index hampered performance. The consumer electronics giant
reported better-than-expected results, driven by iPhone sales.
Energy
companies continued to benefit from rising oil and gas prices. Russia’s invasion
of Ukraine, Europe’s energy supply concerns and slow production growth in the
U.S. and from OPEC have kept energy markets volatile and in negative supply. We
had lighter exposure to Exxon Mobil and Chevron than the benchmark, which
hampered relative performance. Our underweight allocation to energy overall
hampered relative performance, although a number of our holdings in the sector
were top contributors, which helped offset some of the detraction. The portfolio
was also underweight Tesla. The electric vehicle maker continued to outperform,
exceeding production goals in the face of global supply chain disruptions and
pandemic lockdowns in China.
Communication
Services Was a Top Contributor
Positioning
in the communication services sector benefited performance. We were underweight
two laggards, Facebook’s parent Meta Platforms and streaming video company
Netflix. Meta has been hurt more by both Apple iOS platform changes and TikTok
competition than other digital advertising platforms. Our underweight reflects
our elimination of Meta during the first quarter of 2022. Netflix announced
layoffs amid weak subscriber growth. An expected renormalization of subscriber
growth following the early gains of the pandemic has not materialized. We also
eliminated Netflix.
Some
of the leading individual contributors to performance compared with the
benchmark were energy companies ConocoPhillips and Schlumberger. This is
consistent with our process, which seeks to identify companies we believe are
ESG leaders within all sectors, rather than exclude certain sectors entirely.
Our approach led us to overweight positions in these companies, which we believe
have relatively more attractive financial and ESG characteristics than other
energy companies. ConocoPhilllips was the fund’s top contributor, benefiting
from the jump in fossil fuel prices. Rising energy prices also boosted oil field
services companies such as Schlumberger. The company also benefited from a
multiyear growth dynamic leading to strong cash flow growth. Schlumberger’s new
energy division is focused on transitioning toward lower carbon energy
solutions: geothermal, hydrogen, carbon capture and sequestration.
Elsewhere,
Cigna was a top performer. Managed care companies such as Cigna were perceived
as being relatively insulated from the inflationary environment. We think
Cigna’s pharmacy benefit management division should also benefit from new
biosimilar pharmaceutical launches in the coming years. NextEra Energy received
a boost from an executive order delaying implementation of solar panel tariffs,
which helped ease concerns that NextEra’s plans for renewable capacity expansion
would be slowed.
Portfolio
Positioning
Our
process uses fundamental analysis aimed at identifying growing,
large-capitalization companies demonstrating sustainable corporate behaviors.
Rather than screen out certain industries or sectors, we seek to identify
companies with attractive fundamental growth and ESG characteristics in their
respective sectors. As a result of this approach, our sector and industry
allocations reflect where we are finding opportunities at a given
time.
Using
our bottom-up analysis, we have found what we think are attractive positions in
the industrials sector, led by building products and electrical equipment.
Consumer staples was also modestly overweight due to positions in food and
staples retailing and household products. Utilities was the largest underweight
sector because many of the companies in the sector do not fit our process
well.
A
strategy or emphasis on environmental, social and governance factors (ESG) may
limit the investment opportunities available to a portfolio. Therefore, the
portfolio may underperform or perform differently than other portfolios that do
not have an ESG investment focus. A portfolio’s
ESG investment focus may also result in the portfolio investing in securities or
industry sectors that perform differently or maintain a different risk profile
than the market generally or compared to underlying holdings that are not
screened for ESG standards.
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|
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|
|
AUGUST
31, 2022 |
|
|
|
Sustainable
Equity ETF |
|
Types
of Investments in Portfolio |
%
of net assets |
Common
Stocks |
99.5% |
Short-Term
Investments |
0.4% |
Other
Assets and Liabilities |
0.1% |
|
|
Top
Five Industries |
%
of net assets |
Software |
10.0% |
Health
Care Providers and Services |
5.2% |
Technology
Hardware, Storage and Peripherals |
5.0% |
Interactive
Media and Services |
4.9% |
Capital
Markets |
4.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainable
Growth ETF (ESGY) |
|
|
|
|
|
|
|
Total
Returns as of August 31, 2022 |
|
|
|
|
|
Average
Annual Returns |
|
|
|
|
|
|
1
year |
Since
Inception |
Inception
Date |
Net
Asset Value |
|
|
|
|
-19.93% |
-12.00% |
6/29/2021 |
Market
Price |
|
|
|
|
-19.93% |
-11.99% |
6/29/2021 |
Russell
1000 Growth Index |
|
|
|
|
-19.06% |
-11.59% |
— |
Market
price is determined using the bid/ask midpoint at 4:00 p.m. Eastern time, when
the net asset value (NAV) is typically calculated. Market performance does not
represent the returns you would receive if you traded shares at other times. NAV
prices are used to calculate market price performance prior to the date when the
fund first traded on the NYSE Arca, Inc.
|
|
|
Growth
of $10,000 Over Life of Fund |
$10,000
investment made June 29, 2021 |
|
|
|
|
|
|
Value
on August 31, 2022 |
|
Net
Asset Value — $8,609 |
|
|
Russell
1000 Growth Index — $8,655 |
|
|
|
|
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
|
|
|
|
|
|
|
0.39% |
|
|
|
The
total annual fund operating expenses shown is as stated in the fund’s prospectus
current as of the date of this report. The prospectus may vary from the expense
ratio shown elsewhere in this report because it is based on a different time
period, includes acquired fund fees and expenses, and, if applicable, does not
include fee waivers or expense reimbursements.
Data
presented reflect past performance. Past performance is no guarantee of future
results. Current performance may be higher or lower than the performance shown.
Total returns for periods less than one year are not annualized. Investment
return and principal value will fluctuate, and redemption value may be more or
less than original cost. Data assumes reinvestment of dividends and capital
gains, and none of the charts reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance data current to the most recent month end, please call
1-800-345-6488 or visit americancenturyetfs.com. For additional information
about the funds, please consult the prospectus.
Portfolio
Managers: Joe Reiland, Rob Bove, Scott Marolf, David Cross and Rene
Casis
David
Cross joined the fund’s portfolio management team in February 2022.
Fund
Strategy
American
Century Sustainable Growth ETF is an actively managed fund that seeks capital
appreciation. We seek to invest in larger U.S. companies demonstrating both
improving business fundamentals and sustainable corporate behaviors in pursuit
of long-term financial returns and a stronger environmental, social and
governance (ESG) profile than the Russell 1000 Growth Index. As opposed to
avoiding certain sectors entirely, we seek to invest in the most attractive
companies within all sectors. A broad investment universe provides investors
with both an attractive environmental, social and governance (ESG) profile and
the potential for positive risk-adjusted returns over time. We construct our
portfolio to intentionally acquire stock-specific risk aligned with our
financial and sustainability research, while minimizing relative exposures
related to sectors and common factor risks, such as market-capitalization size,
volatility and momentum.
Performance
Review
The
fund returned -19.93% on a market price basis for the 12-month period ended
August 31, 2022. On a net asset value (NAV) basis, the fund returned -19.93%.
For the same period, the Russell 1000 Growth Index, the fund’s benchmark,
returned -19.06%. The fund’s NAV and market price returns reflect fees and
operating expenses, while the index return does not.
Information
Technology Detracted
Stock
selection in the semiconductors and semiconductor equipment industry helped
drive underperformance in information technology. Both chipmakers and
semiconductor equipment manufacturers are being pressured by concerns that a
slowdown in consumer spending will hamper demand for chips. ASML Holding, a
Netherlands-based semiconductor capital equipment maker, was a significant
industry detractor. Stock selection in the IT services industry also hurt
performance in the sector. PayPal Holdings reported disappointing earnings
largely due to declining eBay transactions. We eliminated our holding. Software
provider Adobe fell on expectations of slowing company spending on software as
economic growth slows.
We
were also hurt by lighter exposure than the benchmark in a trio of other stocks.
Apple reported better-than-expected quarterly results, driven by iPhone sales.
AbbVie, a large pharmaceutical company, benefited from investors looking for
safer havens. We had no exposure to brick-and-mortar retailer Costco Wholesale,
which recently reported membership renewals, its primary driver of profits, of
more than 90%. Costco is also seen as recession-proof as consumers buy more bulk
items to reduce costs.
Communication
Services Benefited Performance
Stock
choices in the interactive media and services industry led relative performance
in communication services. We had less exposure to the lagging Meta Platforms
than the benchmark. Facebook’s parent company has been hurt more by both Apple
iOS platform changes and TikTok competition than other digital advertising
platforms. Underweighting Netflix benefited relative performance. The streaming
video service announced layoffs amid weak subscriber growth. An expected
renormalization of subscriber growth following the early gains of the pandemic
has not materialized. We eliminated Meta Platforms and Netflix.
Stock
selection in health care was also helpful. UnitedHealth Group was a key
contributor. The health insurer reported solid earnings and modestly increased
its earnings guidance. However, the stock’s outperformance for much of the
period was driven more by its defensive profile and being more insulated from
the impact of inflation and a stronger U.S. dollar. Denmark-based pharmaceutical
company Novo Nordisk continued to benefit from strong sales and demand for its
obesity drug. Vertex Pharmaceuticals dominates the cystic fibrosis market with
no real prospects of
competition
on the horizon, giving it a strong cash flow position. Its emerging pipeline is
beginning to show its strength, including its kidney drug, acute pain drug and
Type 1 diabetes stem cell therapy.
Car
rental provider Avis Budget Group benefited from improving travel trends and
also rose significantly in November 2021 as the stock became part of the meme
stock investing craze. We eliminated the position on the large stock price
increase as we saw no additional upside.
Portfolio
Positioning
Our
process uses fundamental analysis aimed at identifying growing,
large-capitalization companies demonstrating sustainable corporate behaviors.
Rather than screen out certain industries or sectors, we seek to identify
companies with attractive fundamental growth and ESG characteristics in their
respective sectors. As a result of this approach, our sector and industry
allocations reflect where we are finding opportunities at a given
time.
Using
our bottom-up analysis, we have found attractive positions in several sectors,
notably information technology. In particular, we invested in attractive
companies in the software, electronic equipment, instruments and components and
semiconductors and semiconductor equipment industries. We have also found
opportunities in health care, especially pharmaceuticals.
A
strategy or emphasis on environmental, social and governance factors (ESG) may
limit the investment opportunities available to a portfolio. Therefore, the
portfolio may underperform or perform differently than other portfolios that do
not have an ESG investment focus. A portfolio’s
ESG investment focus may also result in the portfolio investing in securities or
industry sectors that perform differently or maintain a different risk profile
than the market generally or compared to underlying holdings that are not
screened for ESG standards.
|
|
|
|
|
|
AUGUST
31, 2022 |
|
|
|
Sustainable
Growth ETF |
|
Types
of Investments in Portfolio |
%
of net assets |
Common
Stocks |
99.6% |
Short-Term
Investments |
0.3% |
Other
Assets and Liabilities |
0.1% |
|
|
Top
Five Industries |
%
of net assets |
Software |
19.7% |
Technology
Hardware, Storage and Peripherals |
10.5% |
Semiconductors
and Semiconductor Equipment |
7.6% |
Interactive
Media and Services |
6.6% |
IT
Services |
6.6% |
Fund
shareholders may incur two types of costs: (1) transaction costs, including
brokerage commissions paid on purchases and sales of fund shares; and (2)
ongoing costs, including management fees and other fund expenses. This example
is intended to help you understand your ongoing costs (in dollars) of investing
in your fund and to compare these costs with the ongoing cost of investing in
other funds.
The
example is based on an investment of $1,000 made at the beginning of the period
and held for the entire period from March 1, 2022 to August 31,
2022.
Actual
Expenses
The
table provides information about actual account values and actual expenses for
each fund. You may use the information, together with the amount you invested,
to estimate the expenses that you paid over the period. First, identify the fund
you own. Then simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
under the heading “Expenses Paid During Period” to estimate the expenses you
paid on your account during this period.
Hypothetical
Example for Comparison Purposes
The
table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of your fund and an
assumed rate of return of 5% per year before expenses, which is not the actual
return of a fund. The hypothetical account values and expenses may not be used
to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in your fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of the
other funds.
Please
note that the expenses shown in the table are meant to highlight your ongoing
costs only and do not reflect any transactional costs, such as brokerage
commissions paid on purchases and sales of fund shares. Therefore, the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been
higher.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Account
Value 3/1/22 |
Ending
Account Value 8/31/22 |
Expenses
Paid
During
Period(1)
3/1/22
- 8/31/22 |
Annualized
Expense
Ratio(1) |
Mid
Cap Growth Impact ETF |
|
|
Actual |
$1,000 |
$907.90 |
$2.16 |
0.45% |
Hypothetical |
$1,000 |
$1,022.94 |
$2.29 |
0.45% |
Sustainable
Equity ETF |
|
|
Actual |
$1,000 |
$896.50 |
$1.86 |
0.39% |
Hypothetical |
$1,000 |
$1,023.24 |
$1.99 |
0.39% |
Sustainable
Growth ETF |
|
|
Actual |
$1,000 |
$860.00 |
$1.83 |
0.39% |
Hypothetical |
$1,000 |
$1,023.24 |
$1.99 |
0.39% |
(1)Expenses
are equal to the fund's annualized expense ratio listed in the table above,
multiplied by the average account value over the period, multiplied by 184, the
number of days in the most recent fiscal half-year, divided by 365, to reflect
the one-half year period. Annualized expense ratio reflects actual expenses,
including any applicable fee waivers or expense reimbursements and excluding any
acquired fund fees and expenses.
AUGUST 31,
2022
|
|
|
|
|
|
|
|
|
Mid
Cap Growth Impact ETF |
|
|
|
Shares |
Value |
COMMON
STOCKS — 97.3% |
|
|
Aerospace
and Defense — 1.2% |
|
|
CAE,
Inc.(1)
|
15,358 |
|
$ |
280,437 |
|
Auto
Components — 3.4% |
|
|
Aptiv
PLC(1)
|
8,784 |
|
820,689 |
|
Biotechnology
— 7.2% |
|
|
Alnylam
Pharmaceuticals, Inc.(1)
|
894 |
|
184,763 |
|
Horizon
Therapeutics PLC(1)
|
6,376 |
|
377,523 |
|
Sarepta
Therapeutics, Inc.(1)
|
7,009 |
|
766,644 |
|
Seagen,
Inc.(1)
|
2,488 |
|
383,874 |
|
|
|
1,712,804 |
|
Building
Products — 5.9% |
|
|
Trane
Technologies PLC |
6,338 |
|
976,496 |
|
Zurn
Elkay Water Solutions Corp. |
15,490 |
|
427,214 |
|
|
|
1,403,710 |
|
Capital
Markets — 3.6% |
|
|
MSCI,
Inc. |
1,896 |
|
851,759 |
|
Chemicals
— 7.5% |
|
|
Albemarle
Corp. |
818 |
|
219,192 |
|
Avient
Corp. |
14,012 |
|
614,146 |
|
Element
Solutions, Inc. |
50,439 |
|
941,696 |
|
|
|
1,775,034 |
|
Electrical
Equipment — 3.4% |
|
|
Generac
Holdings, Inc.(1)
|
2,524 |
|
556,315 |
|
Plug
Power, Inc.(1)(2)
|
8,609 |
|
241,396 |
|
|
|
797,711 |
|
Electronic
Equipment, Instruments and Components — 5.1% |
|
|
Keysight
Technologies, Inc.(1)
|
7,444 |
|
1,219,997 |
|
Health
Care Equipment and Supplies — 3.1% |
|
|
DexCom,
Inc.(1)
|
8,858 |
|
728,216 |
|
Health
Care Technology — 3.2% |
|
|
Veeva
Systems, Inc., Class A(1)
|
3,875 |
|
772,365 |
|
Hotels,
Restaurants and Leisure — 9.2% |
|
|
Airbnb,
Inc., Class A(1)
|
7,866 |
|
889,802 |
|
Chipotle
Mexican Grill, Inc.(1)
|
814 |
|
1,299,795 |
|
|
|
2,189,597 |
|
Life
Sciences Tools and Services — 5.4% |
|
|
Bio-Techne
Corp. |
2,094 |
|
694,810 |
|
IQVIA
Holdings, Inc.(1)
|
2,816 |
|
598,851 |
|
|
|
1,293,661 |
|
Oil,
Gas and Consumable Fuels — 2.4% |
|
|
Excelerate
Energy, Inc., Class A |
22,237 |
|
571,046 |
|
Professional
Services — 3.3% |
|
|
Jacobs
Solutions, Inc. |
6,246 |
|
778,127 |
|
Road
and Rail — 0.9% |
|
|
Lyft,
Inc., Class A(1)
|
14,999 |
|
220,935 |
|
Semiconductors
and Semiconductor Equipment — 14.6% |
|
|
Enphase
Energy, Inc.(1)
|
6,397 |
|
1,832,357 |
|
|
|
|
|
|
|
|
|
|
Mid
Cap Growth Impact ETF |
|
|
|
Shares |
Value |
Marvell
Technology, Inc. |
18,045 |
|
$ |
844,867 |
|
Monolithic
Power Systems, Inc. |
1,745 |
|
790,799 |
|
|
|
3,468,023 |
|
Software
— 17.9% |
|
|
Cadence
Design Systems, Inc.(1)
|
9,305 |
|
1,616,930 |
|
DocuSign,
Inc.(1)
|
5,777 |
|
336,337 |
|
Manhattan
Associates, Inc.(1)
|
8,491 |
|
1,199,438 |
|
Palo
Alto Networks, Inc.(1)
|
1,975 |
|
1,099,700 |
|
|
|
4,252,405 |
|
TOTAL
COMMON STOCKS
(Cost
$25,515,834) |
|
23,136,516 |
|
SHORT-TERM
INVESTMENTS — 3.2% |
|
|
Money
Market Funds — 3.2% |
|
|
State
Street Institutional U.S. Government Money Market Fund, Premier
Class |
645,638 |
|
645,638 |
|
State
Street Navigator Securities Lending Government Money Market
Portfolio(3)
|
123,740 |
|
123,740 |
|
TOTAL
SHORT-TERM INVESTMENTS
(Cost
$769,378) |
|
769,378 |
|
TOTAL
INVESTMENT SECURITIES — 100.5%
(Cost
$26,285,212) |
|
23,905,894 |
|
OTHER
ASSETS AND LIABILITIES — (0.5)% |
|
(126,566) |
|
TOTAL
NET ASSETS — 100.0% |
|
$ |
23,779,328 |
|
|
|
|
|
|
|
|
|
|
NOTES
TO SCHEDULE OF INVESTMENTS |
(1)Non-income
producing.
(2)Security,
or a portion thereof, is on loan. At the period end, the aggregate value of
securities on loan was $120,684. The amount of securities on loan indicated may
not correspond with the securities on loan identified because securities with
pending sales are in the process of recall from the brokers.
(3)Investment
of cash collateral from securities on loan. At the period end, the aggregate
value of the collateral held by the fund was $123,740.
See
Notes to Financial Statements.
AUGUST 31,
2022
|
|
|
|
|
|
|
|
|
Sustainable
Equity ETF |
|
|
|
Shares |
Value |
COMMON
STOCKS — 99.5% |
|
|
Aerospace
and Defense — 1.2% |
|
|
Lockheed
Martin Corp. |
2,931 |
|
$ |
1,231,342 |
|
Air
Freight and Logistics — 1.3% |
|
|
United
Parcel Service, Inc., Class B |
6,909 |
|
1,343,870 |
|
Auto
Components — 0.7% |
|
|
Aptiv
PLC(1)
|
8,004 |
|
747,814 |
|
Automobiles
— 1.7% |
|
|
Tesla,
Inc.(1)
|
6,434 |
|
1,773,275 |
|
Banks
— 3.1% |
|
|
Bank
of America Corp. |
9,899 |
|
332,705 |
|
JPMorgan
Chase & Co. |
12,533 |
|
1,425,378 |
|
Regions
Financial Corp. |
67,559 |
|
1,464,004 |
|
|
|
3,222,087 |
|
Beverages
— 1.8% |
|
|
PepsiCo,
Inc. |
10,726 |
|
1,847,768 |
|
Biotechnology
— 2.0% |
|
|
AbbVie,
Inc. |
8,834 |
|
1,187,820 |
|
Amgen,
Inc. |
1,724 |
|
414,277 |
|
Vertex
Pharmaceuticals, Inc.(1)
|
1,672 |
|
471,103 |
|
|
|
2,073,200 |
|
Building
Products — 1.6% |
|
|
Johnson
Controls International PLC |
20,334 |
|
1,100,883 |
|
Masco
Corp. |
10,435 |
|
530,828 |
|
|
|
1,631,711 |
|
Capital
Markets — 4.7% |
|
|
Ameriprise
Financial, Inc. |
2,645 |
|
708,886 |
|
BlackRock,
Inc. |
1,516 |
|
1,010,247 |
|
Intercontinental
Exchange, Inc. |
5,275 |
|
531,984 |
|
Morgan
Stanley |
20,130 |
|
1,715,479 |
|
S&P
Global, Inc. |
2,867 |
|
1,009,700 |
|
|
|
4,976,296 |
|
Chemicals
— 2.3% |
|
|
Air
Products and Chemicals, Inc. |
1,852 |
|
467,537 |
|
Ecolab,
Inc. |
2,973 |
|
487,066 |
|
Linde
PLC |
4,610 |
|
1,303,985 |
|
Sherwin-Williams
Co. |
696 |
|
161,542 |
|
|
|
2,420,130 |
|
Communications
Equipment — 1.9% |
|
|
Cisco
Systems, Inc. |
43,373 |
|
1,939,641 |
|
Consumer
Finance — 0.5% |
|
|
American
Express Co. |
3,633 |
|
552,216 |
|
Containers
and Packaging — 0.6% |
|
|
Ball
Corp. |
10,554 |
|
589,019 |
|
Diversified
Telecommunication Services — 1.1% |
|
|
Verizon
Communications, Inc. |
27,885 |
|
1,165,872 |
|
Electric
Utilities — 2.2% |
|
|
NextEra
Energy, Inc. |
27,182 |
|
2,312,101 |
|
Electrical
Equipment — 1.3% |
|
|
Eaton
Corp. PLC |
5,358 |
|
732,117 |
|
|
|
|
|
|
|
|
|
|
Sustainable
Equity ETF |
|
|
|
Shares |
Value |
Generac
Holdings, Inc.(1)
|
1,278 |
|
$ |
281,684 |
|
Rockwell
Automation, Inc. |
1,601 |
|
379,341 |
|
|
|
1,393,142 |
|
Electronic
Equipment, Instruments and Components — 2.1% |
|
|
CDW
Corp. |
5,806 |
|
991,084 |
|
Cognex
Corp. |
4,470 |
|
188,232 |
|
Keysight
Technologies, Inc.(1)
|
6,126 |
|
1,003,990 |
|
|
|
2,183,306 |
|
Energy
Equipment and Services — 2.1% |
|
|
Schlumberger
NV |
57,141 |
|
2,179,929 |
|
Entertainment
— 1.3% |
|
|
Electronic
Arts, Inc. |
3,542 |
|
449,374 |
|
Walt
Disney Co.(1)
|
8,155 |
|
914,012 |
|
|
|
1,363,386 |
|
Equity
Real Estate Investment Trusts (REITs) — 2.3% |
|
|
Prologis,
Inc. |
19,453 |
|
2,422,093 |
|
Food
and Staples Retailing — 2.6% |
|
|
Costco
Wholesale Corp. |
1,415 |
|
738,772 |
|
Kroger
Co. |
14,977 |
|
717,997 |
|
Sysco
Corp. |
15,554 |
|
1,278,850 |
|
|
|
2,735,619 |
|
Food
Products — 0.8% |
|
|
Mondelez
International, Inc., Class A |
13,533 |
|
837,151 |
|
Vital
Farms, Inc.(1)
|
3,757 |
|
48,653 |
|
|
|
885,804 |
|
Health
Care Equipment and Supplies — 1.3% |
|
|
Edwards
Lifesciences Corp.(1)
|
10,948 |
|
986,415 |
|
Medtronic
PLC |
1,819 |
|
159,926 |
|
ResMed,
Inc. |
1,023 |
|
224,978 |
|
|
|
1,371,319 |
|
Health
Care Providers and Services — 5.2% |
|
|
Cigna
Corp. |
5,909 |
|
1,674,906 |
|
CVS
Health Corp. |
12,726 |
|
1,249,057 |
|
Humana,
Inc. |
1,159 |
|
558,383 |
|
UnitedHealth
Group, Inc. |
3,811 |
|
1,979,167 |
|
|
|
5,461,513 |
|
Hotels,
Restaurants and Leisure — 1.1% |
|
|
Booking
Holdings, Inc.(1)
|
349 |
|
654,658 |
|
Chipotle
Mexican Grill, Inc.(1)
|
163 |
|
260,278 |
|
Expedia
Group, Inc.(1)
|
2,781 |
|
285,470 |
|
|
|
1,200,406 |
|
Household
Products — 1.6% |
|
|
Colgate-Palmolive
Co. |
6,348 |
|
496,477 |
|
Procter
& Gamble Co. |
8,789 |
|
1,212,355 |
|
|
|
1,708,832 |
|
Industrial
Conglomerates — 0.9% |
|
|
Honeywell
International, Inc. |
5,037 |
|
953,756 |
|
Insurance
— 2.1% |
|
|
Marsh
& McLennan Cos., Inc. |
4,467 |
|
720,840 |
|
Prudential
Financial, Inc. |
7,964 |
|
762,553 |
|
Travelers
Cos., Inc. |
4,372 |
|
706,690 |
|
|
|
2,190,083 |
|
|
|
|
|
|
|
|
|
|
Sustainable
Equity ETF |
|
|
|
Shares |
Value |
Interactive
Media and Services — 4.9% |
|
|
Alphabet,
Inc., Class A(1)
|
47,020 |
|
$ |
5,088,504 |
|
Internet
and Direct Marketing Retail — 3.2% |
|
|
Amazon.com,
Inc.(1)
|
26,721 |
|
3,387,421 |
|
IT
Services — 4.2% |
|
|
Accenture
PLC, Class A |
4,297 |
|
1,239,513 |
|
Mastercard,
Inc., Class A |
3,850 |
|
1,248,824 |
|
Visa,
Inc., Class A |
9,470 |
|
1,881,784 |
|
|
|
4,370,121 |
|
Life
Sciences Tools and Services — 2.1% |
|
|
Agilent
Technologies, Inc. |
8,167 |
|
1,047,418 |
|
Thermo
Fisher Scientific, Inc. |
2,114 |
|
1,152,806 |
|
|
|
2,200,224 |
|
Machinery
— 2.0% |
|
|
Cummins,
Inc. |
3,899 |
|
839,727 |
|
Deere
& Co. |
1,160 |
|
423,690 |
|
Parker-Hannifin
Corp. |
1,377 |
|
364,905 |
|
Xylem,
Inc. |
5,038 |
|
458,962 |
|
|
|
2,087,284 |
|
Media
— 0.4% |
|
|
Comcast
Corp., Class A |
11,249 |
|
407,101 |
|
Multiline
Retail — 0.4% |
|
|
Target
Corp. |
2,673 |
|
428,589 |
|
Oil,
Gas and Consumable Fuels — 2.5% |
|
|
ConocoPhillips |
23,927 |
|
2,618,810 |
|
Personal
Products — 0.3% |
|
|
Estee
Lauder Cos., Inc., Class A |
1,152 |
|
293,046 |
|
Pharmaceuticals
— 3.7% |
|
|
Bristol-Myers
Squibb Co. |
18,902 |
|
1,274,184 |
|
Merck
& Co., Inc. |
13,195 |
|
1,126,325 |
|
Novo
Nordisk A/S, ADR |
6,202 |
|
658,032 |
|
Zoetis,
Inc. |
5,460 |
|
854,654 |
|
|
|
3,913,195 |
|
Road
and Rail — 1.3% |
|
|
Norfolk
Southern Corp. |
2,691 |
|
654,263 |
|
Uber
Technologies, Inc.(1)
|
6,880 |
|
197,868 |
|
Union
Pacific Corp. |
2,490 |
|
559,030 |
|
|
|
1,411,161 |
|
Semiconductors
and Semiconductor Equipment — 4.3% |
|
|
Advanced
Micro Devices, Inc.(1)
|
7,106 |
|
603,086 |
|
Analog
Devices, Inc. |
7,459 |
|
1,130,263 |
|
Applied
Materials, Inc. |
7,584 |
|
713,427 |
|
ASML
Holding NV, NY Shares |
1,232 |
|
603,606 |
|
NVIDIA
Corp. |
9,815 |
|
1,481,476 |
|
|
|
4,531,858 |
|
Software
— 10.0% |
|
|
Adobe,
Inc.(1)
|
1,471 |
|
549,330 |
|
Cadence
Design Systems, Inc.(1)
|
2,855 |
|
496,113 |
|
Microsoft
Corp. |
31,947 |
|
8,353,182 |
|
Salesforce,
Inc.(1)
|
4,105 |
|
640,873 |
|
ServiceNow,
Inc.(1)
|
621 |
|
269,899 |
|
|
|
|
|
|
|
|
|
|
Sustainable
Equity ETF |
|
|
|
Shares |
Value |
Workday,
Inc., Class A(1)
|
1,260 |
|
$ |
207,346 |
|
|
|
10,516,743 |
|
Specialty
Retail — 2.9% |
|
|
Home
Depot, Inc. |
6,158 |
|
1,776,090 |
|
TJX
Cos., Inc. |
14,347 |
|
894,536 |
|
Tractor
Supply Co. |
1,776 |
|
328,826 |
|
|
|
2,999,452 |
|
Technology
Hardware, Storage and Peripherals — 5.0% |
|
|
Apple,
Inc. |
33,286 |
|
5,233,225 |
|
Textiles,
Apparel and Luxury Goods — 0.9% |
|
|
Deckers
Outdoor Corp.(1)
|
1,086 |
|
349,225 |
|
NIKE,
Inc., Class B |
5,753 |
|
612,407 |
|
|
|
961,632 |
|
TOTAL
COMMON STOCKS
(Cost
$104,333,323) |
|
104,323,896 |
|
SHORT-TERM
INVESTMENTS — 0.4% |
|
|
Money
Market Funds — 0.4% |
|
|
State
Street Institutional U.S. Government Money Market Fund, Premier
Class
(Cost
$368,997) |
368,997 |
|
368,997 |
|
TOTAL
INVESTMENT SECURITIES — 99.9%
(Cost
$104,702,320) |
|
104,692,893 |
|
OTHER
ASSETS AND LIABILITIES — 0.1% |
|
107,241 |
|
TOTAL
NET ASSETS — 100.0% |
|
$ |
104,800,134 |
|
|
|
|
|
|
|
|
|
|
NOTES
TO SCHEDULE OF INVESTMENTS |
ADR |
- |
American
Depositary Receipt |
(1)Non-income
producing.
See
Notes to Financial Statements.
AUGUST 31,
2022
|
|
|
|
|
|
|
|
|
Sustainable
Growth ETF |
|
|
|
Shares |
Value |
COMMON
STOCKS — 99.6% |
|
|
Aerospace
and Defense — 0.5% |
|
|
Lockheed
Martin Corp. |
85 |
|
$ |
35,709 |
|
Air
Freight and Logistics — 0.9% |
|
|
United
Parcel Service, Inc., Class B |
298 |
|
57,964 |
|
Auto
Components — 0.9% |
|
|
Aptiv
PLC(1) |
623 |
|
58,207 |
|
Automobiles
— 3.4% |
|
|
Tesla,
Inc.(1) |
801 |
|
220,764 |
|
Beverages
— 3.0% |
|
|
Coca-Cola
Co. |
1,331 |
|
82,136 |
|
PepsiCo,
Inc. |
663 |
|
114,215 |
|
|
|
196,351 |
|
Biotechnology
— 2.6% |
|
|
AbbVie,
Inc. |
706 |
|
94,929 |
|
Vertex
Pharmaceuticals, Inc.(1) |
268 |
|
75,511 |
|
|
|
170,440 |
|
Building
Products — 2.1% |
|
|
Johnson
Controls International PLC |
1,153 |
|
62,423 |
|
Masco
Corp. |
1,343 |
|
68,318 |
|
Trex
Co., Inc.(1) |
216 |
|
10,107 |
|
|
|
140,848 |
|
Capital
Markets — 0.6% |
|
|
S&P
Global, Inc. |
108 |
|
38,035 |
|
Chemicals
— 1.2% |
|
|
Linde
PLC |
278 |
|
78,635 |
|
Commercial
Services and Supplies — 0.2% |
|
|
Copart,
Inc.(1) |
133 |
|
15,913 |
|
Communications
Equipment — 0.4% |
|
|
Cisco
Systems, Inc. |
660 |
|
29,515 |
|
Distributors
— 0.2% |
|
|
Pool
Corp. |
45 |
|
15,264 |
|
Electrical
Equipment — 0.9% |
|
|
Generac
Holdings, Inc.(1) |
67 |
|
14,767 |
|
Rockwell
Automation, Inc. |
186 |
|
44,071 |
|
|
|
58,838 |
|
Electronic
Equipment, Instruments and Components — 1.5% |
|
|
CDW
Corp. |
199 |
|
33,969 |
|
Cognex
Corp. |
301 |
|
12,675 |
|
Keysight
Technologies, Inc.(1) |
301 |
|
49,331 |
|
|
|
95,975 |
|
Energy
Equipment and Services — 0.6% |
|
|
Schlumberger
NV |
1,100 |
|
41,965 |
|
Entertainment
— 1.4% |
|
|
Electronic
Arts, Inc. |
296 |
|
37,554 |
|
Walt
Disney Co.(1) |
454 |
|
50,884 |
|
Warner
Bros Discovery, Inc.(1) |
387 |
|
5,124 |
|
|
|
93,562 |
|
Equity
Real Estate Investment Trusts (REITs) — 0.7% |
|
|
Prologis,
Inc. |
381 |
|
47,438 |
|
|
|
|
|
|
|
|
|
|
Sustainable
Growth ETF |
|
|
|
Shares |
Value |
Food
and Staples Retailing — 0.2% |
|
|
Kroger
Co. |
237 |
|
$ |
11,362 |
|
Food
Products — 0.5% |
|
|
Mondelez
International, Inc., Class A |
569 |
|
35,198 |
|
Health
Care Equipment and Supplies — 2.2% |
|
|
Align
Technology, Inc.(1) |
33 |
|
8,042 |
|
DexCom,
Inc.(1) |
180 |
|
14,798 |
|
Edwards
Lifesciences Corp.(1) |
617 |
|
55,592 |
|
IDEXX
Laboratories, Inc.(1) |
88 |
|
30,591 |
|
Inari
Medical, Inc.(1) |
53 |
|
3,675 |
|
Shockwave
Medical, Inc.(1) |
91 |
|
27,014 |
|
Tandem
Diabetes Care, Inc.(1) |
141 |
|
6,449 |
|
|
|
146,161 |
|
Health
Care Providers and Services — 3.6% |
|
|
Cigna
Corp. |
249 |
|
70,579 |
|
UnitedHealth
Group, Inc. |
314 |
|
163,070 |
|
|
|
233,649 |
|
Hotels,
Restaurants and Leisure — 0.8% |
|
|
Airbnb,
Inc., Class A(1) |
61 |
|
6,900 |
|
Chipotle
Mexican Grill, Inc.(1) |
16 |
|
25,549 |
|
Expedia
Group, Inc.(1) |
185 |
|
18,990 |
|
|
|
51,439 |
|
Household
Products — 1.1% |
|
|
Procter
& Gamble Co. |
529 |
|
72,970 |
|
Interactive
Media and Services — 6.6% |
|
|
Alphabet,
Inc., Class A(1) |
3,980 |
|
430,716 |
|
Internet
and Direct Marketing Retail — 6.3% |
|
|
Amazon.com,
Inc.(1) |
3,094 |
|
392,226 |
|
eBay,
Inc. |
545 |
|
24,051 |
|
|
|
416,277 |
|
IT
Services — 6.6% |
|
|
Accenture
PLC, Class A |
183 |
|
52,788 |
|
Mastercard,
Inc., Class A |
525 |
|
170,294 |
|
Okta,
Inc.(1) |
289 |
|
26,415 |
|
Snowflake,
Inc., Class A(1) |
65 |
|
11,762 |
|
Visa,
Inc., Class A |
850 |
|
168,903 |
|
|
|
430,162 |
|
Leisure
Products — 0.1% |
|
|
YETI
Holdings, Inc.(1) |
238 |
|
8,780 |
|
Life
Sciences Tools and Services — 1.5% |
|
|
Agilent
Technologies, Inc. |
379 |
|
48,607 |
|
Illumina,
Inc.(1) |
128 |
|
25,810 |
|
West
Pharmaceutical Services, Inc. |
78 |
|
23,142 |
|
|
|
97,559 |
|
Machinery
— 1.3% |
|
|
Deere
& Co. |
230 |
|
84,008 |
|
Multiline
Retail — 0.4% |
|
|
Nordstrom,
Inc. |
341 |
|
5,835 |
|
Target
Corp. |
113 |
|
18,118 |
|
|
|
23,953 |
|
|
|
|
|
|
|
|
|
|
Sustainable
Growth ETF |
|
|
|
Shares |
Value |
Oil,
Gas and Consumable Fuels — 0.6% |
|
|
ConocoPhillips |
357 |
|
$ |
39,074 |
|
Personal
Products — 0.2% |
|
|
Estee
Lauder Cos., Inc., Class A |
40 |
|
10,175 |
|
Pharmaceuticals
— 3.1% |
|
|
Eli
Lilly & Co. |
120 |
|
36,148 |
|
Novo
Nordisk A/S, ADR |
1,100 |
|
116,710 |
|
Zoetis,
Inc. |
303 |
|
47,428 |
|
|
|
200,286 |
|
Road
and Rail — 0.9% |
|
|
Uber
Technologies, Inc.(1) |
1,161 |
|
33,391 |
|
Union
Pacific Corp. |
118 |
|
26,492 |
|
|
|
59,883 |
|
Semiconductors
and Semiconductor Equipment — 7.6% |
|
|
Advanced
Micro Devices, Inc.(1) |
893 |
|
75,789 |
|
Analog
Devices, Inc. |
125 |
|
18,941 |
|
Applied
Materials, Inc. |
499 |
|
46,941 |
|
ASML
Holding NV, NY Shares |
208 |
|
101,907 |
|
Lam
Research Corp. |
114 |
|
49,922 |
|
NVIDIA
Corp. |
1,335 |
|
201,505 |
|
|
|
495,005 |
|
Software
— 19.7% |
|
|
Adobe,
Inc.(1) |
164 |
|
61,244 |
|
Cadence
Design Systems, Inc.(1) |
374 |
|
64,990 |
|
Crowdstrike
Holdings, Inc., Class A(1) |
167 |
|
30,496 |
|
Datadog,
Inc., Class A(1) |
178 |
|
18,681 |
|
Fair
Isaac Corp.(1) |
14 |
|
6,292 |
|
HubSpot,
Inc.(1) |
36 |
|
12,133 |
|
Intuit,
Inc. |
43 |
|
18,567 |
|
Microsoft
Corp. |
3,367 |
|
880,369 |
|
PagerDuty,
Inc.(1) |
633 |
|
16,483 |
|
Salesforce,
Inc.(1) |
299 |
|
46,680 |
|
ServiceNow,
Inc.(1) |
182 |
|
79,101 |
|
Splunk,
Inc.(1) |
255 |
|
22,958 |
|
Workday,
Inc., Class A(1) |
194 |
|
31,925 |
|
|
|
1,289,919 |
|
Specialty
Retail — 3.4% |
|
|
Home
Depot, Inc. |
384 |
|
110,753 |
|
TJX
Cos., Inc. |
1,080 |
|
67,338 |
|
Ulta
Beauty, Inc.(1) |
85 |
|
35,689 |
|
Williams-Sonoma,
Inc. |
61 |
|
9,074 |
|
|
|
222,854 |
|
Technology
Hardware, Storage and Peripherals — 10.5% |
|
|
Apple,
Inc. |
4,367 |
|
686,580 |
|
Textiles,
Apparel and Luxury Goods — 1.3% |
|
|
Deckers
Outdoor Corp.(1) |
102 |
|
32,800 |
|
NIKE,
Inc., Class B |
515 |
|
54,822 |
|
|
|
87,622 |
|
TOTAL
COMMON STOCKS
(Cost
$7,287,618) |
|
6,529,055 |
|
|
|
|
|
|
|
|
|
|
Sustainable
Growth ETF |
|
|
|
Shares |
Value |
SHORT-TERM
INVESTMENTS — 0.3% |
|
|
Money
Market Funds — 0.3% |
|
|
State
Street Institutional U.S. Government Money Market Fund, Premier Class
(Cost $20,203) |
20,203 |
|
$ |
20,203 |
|
TOTAL
INVESTMENT SECURITIES — 99.9%
(Cost
$7,307,821) |
|
6,549,258 |
|
OTHER
ASSETS AND LIABILITIES — 0.1% |
|
3,555 |
|
TOTAL
NET ASSETS — 100.0% |
|
$ |
6,552,813 |
|
|
|
|
|
|
|
|
|
|
NOTES
TO SCHEDULE OF INVESTMENTS |
ADR |
- |
American
Depositary Receipt |
(1)Non-income
producing.
See
Notes to Financial Statements.
|
|
|
Statements
of Assets and Liabilities |
|
|
|
|
|
|
|
|
|
AUGUST 31,
2022 |
|
|
Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Assets |
|
Investment
securities, at value (cost of $26,161,472 and $104,702,320, respectively)
— including $120,684 and $—, respectively of securities on loan |
$ |
23,782,154 |
|
$ |
104,692,893 |
|
Investment
made with cash collateral received for securities on loan, at value (cost
of $123,740 and $—, respectively) |
123,740 |
|
— |
|
Total
investment securities, at value (cost of $26,285,212 and $104,702,320,
respectively) |
23,905,894 |
|
104,692,893 |
|
Dividends
and interest receivable |
6,956 |
|
143,756 |
|
Securities
lending receivable |
60 |
|
— |
|
|
23,912,910 |
|
104,836,649 |
|
|
|
|
Liabilities |
|
|
Payable
for collateral received for securities on loan |
123,740 |
|
— |
|
Accrued
management fees |
9,842 |
|
36,515 |
|
|
133,582 |
|
36,515 |
|
|
|
|
Net
Assets |
$ |
23,779,328 |
|
$ |
104,800,134 |
|
|
|
|
Shares
outstanding (unlimited number of shares authorized) |
540,000 |
|
2,150,000 |
|
|
|
|
Net
Asset Value Per Share |
$ |
44.04 |
|
$ |
48.74 |
|
|
|
|
Net
Assets Consist of: |
|
|
Capital
paid in |
$ |
29,041,230 |
|
$ |
109,252,139 |
|
Distributable
earnings |
(5,261,902) |
|
(4,452,005) |
|
|
$ |
23,779,328 |
|
$ |
104,800,134 |
|
See
Notes to Financial Statements.
|
|
|
|
|
|
AUGUST 31,
2022 |
|
Sustainable
Growth ETF |
Assets |
Investment
securities, at value (cost of $7,307,821) |
$ |
6,549,258 |
|
Dividends
and interest receivable |
5,878 |
|
|
6,555,136 |
|
|
|
Liabilities |
|
Accrued
management fees |
2,323 |
|
|
|
Net
Assets |
$ |
6,552,813 |
|
|
|
Shares
outstanding (unlimited number of shares authorized) |
190,000 |
|
|
|
Net
Asset Value Per Share |
$ |
34.49 |
|
|
|
Net
Assets Consist of: |
|
Capital
paid in |
$ |
7,703,059 |
|
Distributable
earnings |
(1,150,246) |
|
|
$ |
6,552,813 |
|
See
Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
YEAR
ENDED AUGUST 31, 2022 |
|
|
Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Investment
Income (Loss) |
|
Income: |
|
|
Dividends
(net of foreign taxes withheld of $— and $3,599, respectively) |
$ |
67,118 |
|
$ |
1,829,307 |
|
Interest |
2,754 |
|
1,683 |
|
Securities
lending, net |
143 |
|
— |
|
|
70,015 |
|
1,830,990 |
|
|
|
|
Expenses: |
|
|
Management
fees |
108,165 |
|
542,552 |
|
|
|
|
Net
investment income (loss) |
(38,150) |
|
1,288,438 |
|
|
|
|
Realized
and Unrealized Gain (Loss) |
|
|
Net
realized gain (loss) on investment transactions |
(1,116,341) |
|
12,237,994 |
|
Change
in net unrealized appreciation (depreciation) on investments |
(6,850,129) |
|
(34,780,883) |
|
|
|
|
Net
realized and unrealized gain (loss) |
(7,966,470) |
|
(22,542,889) |
|
|
|
|
Net
Increase (Decrease) in Net Assets Resulting from Operations |
$ |
(8,004,620) |
|
$ |
(21,254,451) |
|
See
Notes to Financial Statements.
|
|
|
|
|
|
YEAR
ENDED AUGUST 31, 2022 |
|
Sustainable
Growth ETF |
Investment
Income (Loss) |
Income: |
|
Dividends
(net of foreign taxes withheld of $623) |
$ |
44,202 |
|
Interest |
92 |
|
|
44,294 |
|
|
|
Expenses: |
|
Management
fees |
25,380 |
|
|
|
Net
investment income (loss) |
18,914 |
|
|
|
Realized
and Unrealized Gain (Loss) |
|
Net
realized gain (loss) on investment transactions |
(409,268) |
|
Change
in net unrealized appreciation (depreciation) on investments |
(1,158,774) |
|
|
|
Net
realized and unrealized gain (loss) |
(1,568,042) |
|
|
|
Net
Increase (Decrease) in Net Assets Resulting from Operations |
$ |
(1,549,128) |
|
See
Notes to Financial Statements.
|
|
|
Statements
of Changes in Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEARS
ENDED AUGUST 31, 2022 AND AUGUST 31, 2021 |
|
Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Increase
(Decrease) in Net Assets |
August
31, 2022 |
August
31, 2021 |
August
31, 2022 |
August
31, 2021 |
Operations |
|
|
Net
investment income (loss) |
$ |
(38,150) |
|
$ |
(23,635) |
|
$ |
1,288,438 |
|
$ |
1,130,539 |
|
Net
realized gain (loss) |
(1,116,341) |
|
184,057 |
|
12,237,994 |
|
5,728,347 |
|
Change
in net unrealized appreciation (depreciation) |
(6,850,129) |
|
3,888,428 |
|
(34,780,883) |
|
28,182,166 |
|
Net
increase (decrease) in net assets resulting from operations |
(8,004,620) |
|
4,048,850 |
|
(21,254,451) |
|
35,041,052 |
|
|
|
|
|
|
Distributions
to Shareholders |
|
|
|
|
From
earnings |
— |
|
— |
|
(1,219,340) |
|
(1,026,655) |
|
|
|
|
|
|
Capital
Share Transactions |
|
|
|
|
Proceeds
from shares sold |
17,585,267 |
|
13,522,367 |
|
52,262,088 |
|
56,555,628 |
|
Payments
for shares redeemed |
(7,918,146) |
|
(1,865,381) |
|
(75,423,895) |
|
(24,927,794) |
|
Net
increase (decrease) in net assets from capital share
transactions |
9,667,121 |
|
11,656,986 |
|
(23,161,807) |
|
31,627,834 |
|
|
|
|
|
|
Net
increase (decrease) in net assets |
1,662,501 |
|
15,705,836 |
|
(45,635,598) |
|
65,642,231 |
|
|
|
|
|
|
Net
Assets |
|
|
|
|
Beginning
of period |
22,116,827 |
|
6,410,991 |
|
150,435,732 |
|
84,793,501 |
|
End
of period |
$ |
23,779,328 |
|
$ |
22,116,827 |
|
$ |
104,800,134 |
|
$ |
150,435,732 |
|
|
|
|
|
|
Transactions
in Shares of the Funds |
|
|
|
|
Sold |
340,000 |
|
250,000 |
|
940,000 |
|
1,170,000 |
|
Redeemed |
(165,000) |
|
(35,000) |
|
(1,420,000) |
|
(460,000) |
|
Net
increase (decrease) in shares of the funds |
175,000 |
|
215,000 |
|
(480,000) |
|
710,000 |
|
See
Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
YEAR
ENDED AUGUST 31, 2022 AND PERIOD ENDED AUGUST 31, 2021 |
|
Sustainable
Growth ETF |
Increase
(Decrease) in Net Assets |
August
31, 2022 |
August
31, 2021(1) |
Operations |
|
Net
investment income (loss) |
$ |
18,914 |
|
$ |
1,272 |
|
Net
realized gain (loss) |
(409,268) |
|
(9,099) |
|
Change
in net unrealized appreciation (depreciation) |
(1,158,774) |
|
400,211 |
|
Net
increase (decrease) in net assets resulting from operations |
(1,549,128) |
|
392,384 |
|
|
|
|
Distributions
to Shareholders |
|
|
From
earnings |
(13,482) |
|
— |
|
|
|
|
Capital
Share Transactions |
|
|
Proceeds
from shares sold |
2,444,496 |
|
5,651,186 |
|
Payments
for shares redeemed |
(372,643) |
|
— |
|
Net
increase (decrease) in net assets from capital share
transactions |
2,071,853 |
|
5,651,186 |
|
|
|
|
Net
increase (decrease) in net assets |
509,243 |
|
6,043,570 |
|
|
|
|
Net
Assets |
|
|
Beginning
of period |
6,043,570 |
|
— |
|
End
of period |
$ |
6,552,813 |
|
$ |
6,043,570 |
|
|
|
|
Transactions
in Shares of the Funds |
|
|
Sold |
60,000 |
|
140,000 |
|
Redeemed |
(10,000) |
|
— |
|
Net
increase (decrease) in shares of the funds |
50,000 |
|
140,000 |
|
(1)June
29, 2021 (fund inception) through August 31, 2021.
See
Notes to Financial Statements.
|
|
|
Notes
to Financial Statements |
AUGUST 31,
2022
1.
Organization
American
Century ETF Trust (the trust) was registered as a Delaware statutory trust in
2017 and is registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company. American Century Mid
Cap Growth Impact ETF (Mid Cap Growth Impact ETF), American Century Sustainable
Equity ETF (Sustainable Equity ETF) and American Century Sustainable Growth ETF
(Sustainable Growth ETF) (collectively, the funds) are three funds in a series
issued by the trust. The investment objective for Mid Cap Growth Impact ETF and
Sustainable Equity ETF is to seek long-term capital growth. Sustainable Growth
ETF's investment objective is to seek capital appreciation. Shares of each fund
are listed for trading on the NYSE Arca, Inc. Sustainable Growth ETF incepted on
June 29, 2021.
2.
Significant Accounting Policies
The
following is a summary of significant accounting policies consistently followed
by the funds in preparation of their financial statements. Each fund is an
investment company and follows accounting and reporting guidance in accordance
with accounting principles generally accepted in the United States of America.
This may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates. Management evaluated the impact of events or transactions occurring
through the date the financial statements were issued that would merit
recognition or disclosure.
Investment
Valuations — The
funds determine the fair value of their investments and compute their net asset
value (NAV) per share at 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. The
Board of Trustees has adopted valuation policies and procedures to guide the
investment advisor in the funds' investment valuation process and to provide
methodologies for the oversight of the funds' pricing function.
Equity
securities that are listed or traded on a domestic securities exchange are
valued at the last reported sales price or at the official closing price as
provided by the exchange. Equity securities traded on foreign securities
exchanges are generally valued at the closing price of such securities on the
exchange where primarily traded or at the close of the NYSE, if that is earlier.
If no last sales price is reported, or if local convention or regulation so
provides, the mean of the latest bid and asked prices may be used. Securities
traded over-the-counter are valued at the mean of the latest bid and asked
prices, the last sales price, or the official closing price.
Open-end
management investment companies are valued at the reported NAV per
share.
If
the funds determine that the market price for an investment is not readily
available or the valuation methods mentioned above do not reflect an
investment’s fair value, such investment is valued as determined in good faith
by the Board of Trustees or its delegate, in accordance with policies and
procedures adopted by the Board of Trustees. In its determination of fair value,
the funds may review several factors including, but not limited to, market
information regarding the specific investment or comparable investments and
correlation with other investment types, futures indices or general market
indicators. Circumstances that may cause the funds to use these procedures to
value an investment include, but are not limited to: an investment has been
declared in default or is distressed; trading in a security has been suspended
during the trading day or a security is not actively trading on its principal
exchange; prices received from a regular pricing source are deemed unreliable;
or there is a foreign market holiday and no trading occurred.
The
funds monitor for significant events occurring after the close of an
investment’s primary exchange but before each fund’s NAV per share is
determined. Significant events may include, but are not limited to: corporate
announcements and transactions; governmental action and political unrest that
could impact a specific investment or an investment sector; or armed conflicts,
natural disasters and similar events that could affect investments in a specific
country or region. The funds also monitor for significant fluctuations between
domestic and foreign markets, as evidenced by the U.S. market or such other
indicators that the Board of Trustees, or its delegate, deems appropriate. The
funds may apply a model-derived factor to the closing price of equity securities
traded on foreign securities exchanges. The factor is based on observable market
data as provided by an independent pricing service.
Security
Transactions — Security
transactions are accounted for as of the trade date. Net realized gains and
losses are determined on the identified cost basis, which is also used for
federal income tax purposes.
Investment
Income — Dividend
income less foreign taxes withheld, if any, is recorded as of the ex-dividend
date. Distributions received on securities that represent a return of capital or
long-term capital gain are recorded as a reduction of cost of investments and/or
as a realized gain. The funds may estimate the components of distributions
received that may be considered nontaxable distributions or long-term capital
gain distributions for income tax purposes. Interest income is recorded on the
accrual basis and includes accretion of discounts and amortization of premiums.
Securities lending income is net of fees and rebates earned by the lending agent
for its services.
Segregated
Assets — In
accordance with the 1940 Act, the funds segregate assets on their books and
records to cover certain types of investment securities and other financial
instruments. American Century Investment Management, Inc. (ACIM) (the investment
advisor) monitors, on a daily basis, the securities segregated to ensure the
funds designate a sufficient amount of liquid assets, marked-to-market daily.
The funds may also receive assets or be required to pledge assets at the
custodian bank or with a broker for collateral requirements.
Income
Tax Status — It
is each fund’s policy to distribute substantially all net investment income and
net realized gains to shareholders and to otherwise qualify as a regulated
investment company under provisions of the Internal Revenue Code. Accordingly,
no provision has been made for income taxes. The funds file U.S. federal, state,
local and non-U.S. tax returns as applicable. The funds' tax returns are
subject to examination by the relevant taxing authority until expiration of the
applicable statute of limitations, which is generally three years from the date
of filing but can be longer in certain jurisdictions. At this time, management
believes there are no uncertain tax positions which, based on their technical
merit, would not be sustained upon examination and for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months.
Distributions
to Shareholders — Distributions
from net investment income, if any, are generally declared and paid quarterly.
Distributions from net realized gains, if any, are generally declared and paid
annually. Each fund may elect to treat a portion of its payment to a redeeming
shareholder, which represents the pro rata share of undistributed net investment
income and net realized gains, as a distribution for federal income tax purposes
(tax equalization).
Indemnifications
— Under
the trust’s organizational documents, its officers and trustees are indemnified
against certain liabilities arising out of the performance of their duties to
the funds. In addition, in the normal course of business, the funds enter into
contracts that provide general indemnifications. The maximum exposure under
these arrangements is unknown as this would involve future claims that may be
made against a fund. The risk of material loss from such claims is considered by
management to be remote.
Securities
Lending — Securities
are lent to qualified financial institutions and brokers. State Street Bank
& Trust Co. serves as securities lending agent to the funds pursuant to a
Securities Lending Agreement. The lending of securities exposes the funds to
risks such as: the borrowers may fail to return the loaned securities, the
borrowers may not be able to provide additional collateral, the funds may
experience delays in recovery of the loaned securities or delays in access to
collateral, or the funds may experience losses related to the investment
collateral. To minimize certain risks, loan counterparties pledge collateral in
the form of cash and/or securities. The lending agent has agreed to indemnify
the funds in the case of default of any securities borrowed. Cash collateral
received is invested in the State Street Navigator Securities Lending Government
Money Market Portfolio, a money market mutual fund registered under the 1940
Act. The loans may also be secured by U.S. government securities in an amount at
least equal to the market value of the securities loaned, plus accrued interest
and dividends, determined on a daily basis and adjusted accordingly. By lending
securities, the funds seek to increase their net investment income through the
receipt of interest and fees. Such income is reflected separately within the
Statements of Operations. The value of loaned securities and related collateral
outstanding at period end, if any, are shown on a gross basis within the
Schedules of
Investments
and Statements of Assets and Liabilities.
The
following table reflects a breakdown of transactions accounted for as secured
borrowings, the gross obligation by the type of collateral pledged, and the
remaining contractual maturity of those transactions as of August 31,
2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining
Contractual Maturity of Agreements |
Fund/Securities
Lending Transactions(1) |
Overnight
and
Continuous |
<30
days |
Between
30
& 90 days |
>90
days |
Total |
Mid
Cap Growth Impact ETF |
Common
Stocks |
$ |
123,740 |
|
— |
|
— |
|
— |
|
$ |
123,740 |
|
Gross
amount of recognized liabilities for securities lending
transactions |
$ |
123,740 |
|
(1)Amount
represents the payable for cash collateral received for securities on loan. This
will generally be in the Overnight and Continuous column as the securities are
typically callable on demand.
3.
Fees and Transactions with Related Parties
Certain
officers and trustees of the trust are also officers and/or directors of
American Century Companies, Inc. (ACC). The trust's investment advisor, ACIM,
and the trust’s administrator, American Century Services, LLC, are wholly owned,
directly or indirectly, by ACC. ACIM owns 10% and 66% of the shares of Mid Cap
Growth Impact ETF and Sustainable Growth ETF, respectively. Related parties do
not invest in the funds for the purpose of exercising management or
control.
Management
Fees —
The
trust has entered into a management agreement with ACIM, under which ACIM
provides the funds with investment advisory and management services in exchange
for a single, unified management fee (the fee). The agreement provides that ACIM
will pay all expenses of managing and operating the funds, except 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 and extraordinary expenses. The fee is computed and accrued
daily based on the daily net assets of each fund and paid monthly in arrears.
The
annual management fee for each fund is as follows:
|
|
|
|
|
|
|
Annual
Management Fee |
Mid
Cap Growth Impact ETF |
0.45% |
Sustainable
Equity ETF |
0.39% |
Sustainable
Growth ETF |
0.39% |
Interfund
Transactions — The
funds may enter into security transactions with other American Century
Investments funds and other client accounts of the investment advisor, in
accordance with the 1940 Act rules and procedures adopted by the Board of
Trustees.
The rules and procedures require, among other things, that these transactions be
effected at the independent current market price of the security.
There
were no interfund transactions during the period.
4.
Investment Transactions
Purchases
and sales of investment securities, excluding short-term investments and in kind
transactions, for the period ended August 31, 2022 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Sustainable
Growth ETF |
Purchases |
$10,460,470 |
$30,642,094 |
$1,948,097 |
Sales |
$10,285,647 |
$28,855,996 |
$1,904,369 |
Securities
received or delivered in kind through subscriptions and redemptions and in kind
net realized gain (loss) for the period ended August 31, 2022 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
In
kind Subscriptions |
In
kind Redemptions |
In
kind Net Realized Gain/(Loss)* |
Mid
Cap Growth Impact ETF |
$16,899,888 |
$7,602,890 |
$1,592,068 |
Sustainable
Equity ETF |
$46,888,848 |
$71,768,008 |
$16,603,849 |
Sustainable
Growth ETF |
$2,384,602 |
$362,134 |
$7,010 |
*Net
realized gain (loss) on in kind transactions are not considered taxable for
federal income tax purposes.
5.
Capital Share Transactions
Each
fund’s 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). Each fund issues and redeems shares at their NAV
only in aggregations of a specified number of shares (a creation unit) generally
in exchange for a designated portfolio of securities and/or cash (including any
portion of such securities for which cash may be substituted). Authorized
participants may be required to pay an additional variable charge to cover
certain brokerage, tax, foreign exchange, execution, market impact and other
costs and expenses related to the execution of trades resulting from creation
unit transactions. Such variable charges, if any, are included in other capital
within the Statements of Changes in Net Assets.
6.
Fair Value Measurements
The
funds’ investment valuation process is based on several considerations and may
use multiple inputs to determine the fair value of the investments held by the
funds. In conformity with accounting principles generally accepted in the United
States of America, the inputs used to determine a valuation are classified into
three broad levels.
•Level
1 valuation inputs consist of unadjusted quoted prices in an active market for
identical investments.
•Level
2 valuation inputs consist of direct or indirect observable market data
(including quoted prices for comparable investments, evaluations of subsequent
market events, interest rates, prepayment speeds, credit risk, etc.). These
inputs also consist of quoted prices for identical investments initially
expressed in local currencies that are adjusted through translation into U.S.
dollars.
•Level
3 valuation inputs consist of unobservable data (including a fund’s own
assumptions).
The
level classification is based on the lowest level input that is significant to
the fair valuation measurement. The valuation inputs are not necessarily an
indication of the risks associated with investing in these securities or other
financial instruments.
As
of period end, the funds’ investment securities were classified as Level 1. The
Schedules of Investments provide additional information on the funds’ portfolio
holdings.
7.
Risk Factors
The
value of the funds’ shares will go up and down, sometimes rapidly or
unpredictably, based on the performance of the securities owned by the funds and
other factors generally affecting the securities market. Market risks, including
political, regulatory, economic and social developments, can affect the value of
the funds’ 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.
8.
Federal Tax Information
The
tax character of distributions paid during the years ended August 31, 2022 and
August 31, 2021 (except as noted) were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
2021 |
|
Distributions
Paid From: |
Distributions
Paid From: |
|
Ordinary
Income |
Long-term
Capital Gains |
Ordinary
Income |
Long-term
Capital Gains |
Mid
Cap Growth Impact ETF |
— |
|
— |
|
— |
|
— |
|
Sustainable
Equity ETF |
$ |
1,219,340 |
|
— |
|
$ |
1,026,655 |
|
— |
|
Sustainable
Growth ETF(1) |
$ |
13,482 |
|
— |
|
— |
|
— |
|
(1)June
29, 2021 (fund inception) through August 31, 2021.
The
book-basis character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences reflect the differing character
of certain income items and net realized gains and losses for financial
statement and tax purposes, and may result in reclassification among certain
capital accounts on the financial statements.
The
reclassifications, which are primarily due to in kind transactions, were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Sustainable
Growth ETF |
Capital
paid in |
$ |
1,483,139 |
|
$ |
16,594,854 |
|
(19,980) |
|
Distributable
earnings |
$ |
(1,483,139) |
|
$ |
(16,594,854) |
|
19,980 |
|
As
of period end, the federal tax cost of investments and the components of
distributable earnings on a tax-basis were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Sustainable
Growth ETF |
Federal
tax cost of investments |
$ |
26,371,870 |
|
$ |
105,078,846 |
|
$ |
7,332,280 |
|
Gross
tax appreciation of investments |
$ |
1,846,203 |
|
$ |
6,016,523 |
|
$ |
211,882 |
|
Gross
tax depreciation of investments |
(4,312,179) |
|
(6,402,476) |
|
(994,904) |
|
Net
tax appreciation (depreciation) of investments |
$ |
(2,465,976) |
|
$ |
(385,953) |
|
$ |
(783,022) |
|
Undistributed
ordinary income |
— |
|
$ |
142,411 |
|
$ |
6,680 |
|
Accumulated
short-term capital losses |
$ |
(2,413,713) |
|
$ |
(3,055,556) |
|
$ |
(358,971) |
|
Accumulated
long-term capital losses |
$ |
(339,568) |
|
$ |
(1,152,907) |
|
$ |
(14,933) |
|
Late-year
ordinary loss deferral |
$ |
(42,645) |
|
— |
|
— |
|
The
difference between book-basis and tax-basis unrealized appreciation
(depreciation) is attributable primarily to the tax deferral of losses on wash
sales.
Accumulated
capital losses represent net capital loss carryovers that may be used to offset
future realized capital gains for federal income tax purposes. The capital loss
carryovers may be carried forward for an unlimited period. Future capital loss
carryover utilization in any given year may be subject to Internal Revenue Code
limitations.
Loss
deferrals represent certain qualified losses that the fund has elected to treat
as having been incurred in the following fiscal year for federal income tax
purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
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) |
Mid
Cap Growth Impact ETF |
2022 |
$60.59 |
(0.08) |
(16.47) |
(16.55) |
$44.04 |
(27.33)% |
0.45% |
(0.16)% |
44% |
$23,779 |
|
2021 |
$42.74 |
(0.11) |
17.96 |
17.85 |
$60.59 |
41.78% |
0.45% |
(0.20)% |
48% |
$22,117 |
|
2020(4) |
$38.45 |
(0.02) |
4.31 |
4.29 |
$42.74 |
11.14% |
0.45%(5) |
(0.29)%(5) |
2% |
$6,411 |
|
|
|
|
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)July
13, 2020 (fund inception) through August 31, 2020.
(5)Annualized.
See
Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
Sustainable
Equity ETF |
|
2022 |
$57.20 |
0.50 |
(8.49) |
(7.99) |
(0.47) |
$48.74 |
(14.03)% |
0.39% |
0.93% |
21% |
$104,800 |
|
2021 |
$44.16 |
0.45 |
13.01 |
13.46 |
(0.42) |
$57.20 |
30.65% |
0.39% |
0.91% |
22% |
$150,436 |
|
2020(4) |
$39.59 |
0.06 |
4.51 |
4.57 |
— |
$44.16 |
11.56% |
0.39%(5) |
1.13%(5) |
10% |
$84,794 |
|
|
|
|
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)July
13, 2020 (fund inception) through August 31, 2020.
(5)Annualized.
See
Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
Sustainable
Growth ETF |
|
2022 |
$43.17 |
0.12 |
(8.72) |
(8.60) |
(0.08) |
$34.49 |
(19.93)% |
0.39% |
0.29% |
29% |
$6,553 |
|
2021(4) |
$40.15 |
0.01 |
3.01 |
3.02 |
— |
$43.17 |
7.52% |
0.39%(5) |
0.14%(5) |
4% |
$6,044 |
|
|
|
|
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)June
29, 2021 (fund inception) through August 31, 2021.
(5)Annualized.
See
Notes to Financial Statements.
|
|
|
Report
of Independent Registered Public Accounting
Firm |
To
the Shareholders and the Board of Trustees of American Century ETF
Trust:
Opinion
on the Financial Statements and Financial Highlights
We
have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of American Century Mid Cap Growth Impact ETF,
American Century Sustainable Equity ETF, and American Century Sustainable Growth
ETF (the “Funds”), three of the funds constituting the American Century ETF
Trust, as of August 31, 2022, the related statements of operations, statements
of changes in net assets, and financial highlights for the periods indicated in
the table below; and the related notes. In our opinion, the financial statements
and financial highlights present fairly, in all material respects, the financial
position of each of the Funds constituting American Century ETF Trust as of
August 31, 2022, and the results of their operations, the changes in their net
assets, and the financial highlights for the periods listed in the table below,
in conformity with accounting principles generally accepted in the United States
of America.
|
|
|
|
|
|
|
|
|
|
|
|
Individual
Fund Constituting the American Century ETF Trust |
Statement
of Operations |
Statements
of Changes in Net Assets |
Financial
Highlights |
American
Century Mid Cap Growth Impact ETF |
For
the year ended August 31, 2022 |
For
the years ended August 31, 2022 and 2021 |
For
the years ended August 31, 2022, 2021, and the period from July 13, 2020
(fund inception) through August 31, 2020 |
American
Century Sustainable Equity ETF |
American
Century Sustainable Growth ETF |
For
the year ended August 31, 2022 |
For
the year ended August 31, 2022 and the period from June 29, 2021 (fund
inception) through August 31, 2021 |
Basis
for Opinion
These
financial statements and financial highlights are the responsibility of the
Funds’ management. Our responsibility is to express an opinion on the Funds’
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits, we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds’ internal
control over financial reporting. Accordingly, we express no such
opinion.
Our
audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our audits
also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2022, by correspondence with
the custodian and brokers; when replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
/s/
Deloitte & Touche LLP
Kansas
City, Missouri
October
17, 2022
We
have served as the auditor of one or more American Century investment companies
since 1997.
The
Board of Trustees
The
individuals listed below serve as trustees of the funds. Each trustee will
continue to serve in this capacity until death, retirement, resignation or
removal from office. The board has adopted a mandatory retirement age for
trustees who are not “interested persons,” as that term is defined in the
Investment Company Act (independent trustees). Trustees who are not also
officers of the trust shall retire on December 31st of the year in which they
reach their 75th birthday.
Jonathan
S. Thomas is an “interested person” because he currently serves as President and
Chief Executive Officer of American Century Companies, Inc. (ACC), the parent
company of American Century Investment Management, Inc. (ACIM or the advisor).
The other trustees are independent. They are not employees, directors or
officers of, and have no financial interest in, ACC or any of its wholly owned,
direct or indirect, subsidiaries, including ACIM and American Century Services,
LLC (ACS), 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. The following trustees also serve in this capacity
for a number of other registered investment companies in the American Century
Investments family of funds: Jonathan S. Thomas, 15; Jeremy I. Bulow, 8; and
Stephen E. Yates, 7.
The
following table presents additional information about the trustees. The mailing
address for each trustee other than Jonathan S. Thomas is 330 Madison Avenue,
New York, New York 10017. The mailing address for Jonathan S. Thomas is 4500
Main Street, Kansas City, Missouri 64111.
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Name (Year
of Birth) |
Position(s)
Held with Funds |
Length
of Time Served |
Principal
Occupation(s) During Past 5 Years |
Number
of American Century Portfolios Overseen by Trustee |
Other
Directorships Held During Past 5 Years |
Independent
Trustees |
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Reginald
M. Browne (1968) |
Trustee
and Chairman of the Board |
Since
2017 (Chairman since 2019) |
Principal,
GTS Securities (automated capital markets trading firm)(2019 to present);
Senior Managing Director, Co Global Head-ETF Group, Cantor Fitzgerald
(financial services firm)(2013 to 2019) |
41 |
None |
Jeremy
I. Bulow (1954) |
Trustee |
Since
2022 |
Professor
of Economics, Stanford University Graduate School of Business (1979 to
present) |
75 |
None |
Barry
A. Mendelson (1958) |
Trustee |
Since
2017 |
Retired |
41 |
None |
Stephen
E. Yates (1948) |
Trustee |
Since
2017 |
Retired |
105 |
None |
Interested
Trustees |
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Jonathan
S. Thomas (1963) |
Trustee |
Since
2017 |
President
and Chief Executive Officer, ACC (2007 to present). Also serves as Chief
Executive Officer, ACS; Director, ACC and other ACC subsidiaries |
139 |
None |
The
Statement of Additional Information has additional information about the funds'
trustees and is available without charge, upon request, by calling
1-800-345-6488.
Officers
The
following table presents certain information about the executive officers of the
funds. Each officer, except Cleo Chang and Edward Rosenberg, serves as an
officer for each of the 16 investment companies in the American Century family
of funds. No officer is compensated for his or her service as an officer of the
funds. The listed officers are interested persons of the funds and are appointed
or re-appointed on an annual basis. The mailing address for each officer listed
below is 4500 Main Street, Kansas City, Missouri 64111.
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Name
(Year of Birth) |
Offices
with the Funds |
Principal
Occupation(s) During the Past Five Years |
Patrick
Bannigan (1965)
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President
since 2019 |
Executive
Vice President and Director, ACC (2012 to present); Chief Financial
Officer, Chief Accounting Officer and Treasurer, ACC (2015 to present).
Also serves as President, ACS; Vice President, ACIM; Chief Financial
Officer, Chief Accounting Officer and/or Director, ACIM, ACS and other ACC
subsidiaries |
R.
Wes Campbell (1974) |
Chief
Financial Officer and Treasurer since 2018 |
Vice
President, ACS (2020 to present); Investment Operations and Investment
Accounting, ACS (2000 to present) |
Amy
D. Shelton (1964) |
Chief
Compliance Officer and Vice President since 2017 |
Chief
Compliance Officer, American Century funds, (2014 to present); Chief
Compliance Officer, ACIM (2014 to present); Chief Compliance Officer, ACIS
(2009 to present). Also serves as Vice President, ACIS |
John
Pak (1968) |
General
Counsel and Vice President since 2021 |
General
Counsel and Senior Vice President, ACC (2021 to present). Also serves as
General Counsel and Senior Vice President, ACIM, ACS and ACIS. Chief Legal
Officer of Investment and Wealth Management,The Bank of New York Mellon
(2014 to 2021) |
Cleo
Chang (1977) |
Vice
President since 2019 |
Senior
Vice President, ACIM (2015 to present)
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David
H. Reinmiller (1963) |
Vice
President since 2017 |
Attorney,
ACC (1994 to present). Also serves as Vice President, ACIM and
ACS |
Edward
Rosenberg (1973) |
Vice
President since 2017 |
Senior
Vice President, ACIM (2017 to present); Senior Vice President, Flexshares
Head of ETF Capital Markets, Northern Trust (2012 to 2017) |
C.
Jean Wade (1964) |
Vice
President since 2017 |
Senior
Vice President, ACS (2017 to present); Vice President, ACS (2000 to
2017) |
Ward
D. Stauffer (1960) |
Secretary
since 2019 |
Attorney,
ACS (2003 to present) |
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Approval
of Management Agreement |
At
a meeting held on June 2, 2022, the Funds’ Board of Trustees (the "Board")
unanimously approved the renewal of the management agreement pursuant to which
American Century Investment Management, Inc. (the “Advisor”) acts as the
investment advisor for each of the Funds. Under Section 15(c) of the Investment
Company Act of 1940 (the “Investment Company Act”), contracts for investment
advisory services are required to be reviewed, evaluated, and approved by a
majority of a fund’s Trustees, including a majority of the independent Trustees,
each year.
Prior
to its consideration of the management agreement renewal, the Trustees requested
and reviewed extensive data and information compiled by the Advisor and certain
independent data providers concerning the Funds. This review was in addition to
the oversight and evaluation undertaken by the Board and its Audit Committee on
a continual basis and the information received was supplemental to the extensive
information that the Board and its Audit Committee receive and consider
throughout the year.
In
connection with its consideration of the management agreement renewal, the
Board’s review and evaluation of the services provided by the Advisor included,
but was not limited to, the following:
•the
nature, extent, and quality of investment management, shareholder services, and
other services provided and to be provided to each Fund including without
limitation portfolio management and trading services, shareholder and
intermediary services, compliance and legal services, fund accounting and
financial reporting, and fund share distribution;
•the
wide range of other programs and services provided to each Fund and its
shareholders on a routine and non-routine basis;
•the
investment performance of each Fund, including data comparing each Fund's
performance to an appropriate benchmark and/or a peer group of other funds with
similar investment objectives and strategies;
•the
cost of owning each Fund compared to the cost of owning similarly-managed funds;
•the
compliance policies, procedures, and regulatory experience of the Advisor and
the Funds’ service providers;
•the
Advisor’s strategic plans, generally, and with respect to the ongoing impact of
the COVID-19 pandemic response, heightened areas of interest in the mutual fund
industry and recent geopolitical issues;
•the
Advisor’s business continuity plans, vendor management practices, and cyber
security practices;
•financial
data showing the cost of services provided to each Fund, the profitability of
each Fund to the Advisor, and the overall profitability of the
Advisor;
•information
regarding payments to intermediaries by the Advisor;
•possible
economies of scale associated with the Advisor’s management of each Fund; and
•possible
collateral benefits to the Advisor from the management of the
Funds.
The
independent Trustees met separately in private session to discuss the renewal
and to review and discuss the information provided in response to their request.
The independent Trustees also held active discussions with the Advisor regarding
the renewal of the management agreement. The independent Trustees had the
benefit of the advice of their independent counsel throughout the
process.
Factors
Considered
The
Trustees considered all of the information provided by the Advisor, the
independent data providers, and independent counsel in connection with the
approval. They determined that the
information
was sufficient for them to evaluate the management agreement for the Funds. In
connection with their review, the Trustees did not identify any single factor as
being all-important or controlling, and each Trustee may have attributed
different levels of importance to different factors. In deciding to renew the
management agreement, the Board based its decision on a number of factors,
including without limitation the following:
Nature,
Extent and Quality of Services — Generally.
Under each Fund’s management agreement, the Advisor is responsible for providing
or arranging for all services necessary for the operation of each Fund. The
Board noted that the Advisor provides or arranges at its own expense a wide
variety of services which include the following:
•constructing
and designing each Fund
•portfolio
research and security selection
•initial
capitalization/funding
•securities
trading
•Fund
administration
•custody
of Fund assets
•daily
valuation of each Fund’s portfolio
•liquidity
monitoring and management
•risk
management, including cyber security
•shareholder
servicing and transfer agency, including shareholder confirmations,
recordkeeping, and communications
•legal
services (except the independent Trustees’ counsel)
•regulatory
and portfolio compliance
•financial
reporting
•marketing
and distribution (except amounts paid by each Fund under Rule 12b-1 plans)
Investment
Management Services.
The nature of the investment management services provided to the Funds is quite
complex and allows Fund shareholders access to professional money management,
instant diversification of their investments within an asset class, and
liquidity. In evaluating investment performance, the Board expects the Advisor
to manage each Fund in accordance with its investment objectives and principal
investment strategies. Further, the Trustees recognize that the Advisor has an
obligation to monitor trading activities, and in particular to seek the best
execution of fund trades, and to evaluate the use of and payment for research.
In providing these services, the Advisor utilizes teams of investment
professionals (portfolio managers, analysts, research assistants, and securities
traders) who require extensive information technology, research, training,
compliance, and other systems to conduct their business. The Board provides
oversight of the investment performance process. It regularly reviews investment
performance information for each Fund, together with comparative information for
appropriate benchmarks over different time horizons. The Trustees also review
investment performance information during the management agreement renewal
process. If performance concerns are identified, the Board discusses with the
Advisor the reasons for such results and any actions being taken to improve
performance. The performance for American Century Sustainable Equity ETF was
above its benchmark for the one-year period reviewed by the Board. The
performance for American Century Mid Cap Growth Impact ETF was below its
benchmark for the one-year period reviewed by the Board. The Board found the
investment management services provided by the Advisor to each Fund to be
satisfactory and consistent with the management agreement.
Shareholder
and Other Services.
Under the management agreement, the Advisor provides or arranges for a
comprehensive package of services to the Funds. The Board, directly and through
its Audit Committee, regularly reviews reports and evaluations of such services
at its regular meetings. These reports include, but are not limited to,
information regarding the operational efficiency and accuracy of the shareholder
and transfer agency services provided, staffing levels, shareholder
satisfaction, technology support (including cyber security), new products and
services offered to Fund shareholders, securities trading activities, portfolio
valuation services, auditing services, and legal and operational compliance
activities. The Board found the services provided
by
the Advisor to each Fund under the management agreement to be competitive and of
high quality.
Costs
of Services and Profitability. The
Advisor provides detailed information concerning its cost of providing various
services to the Funds, its profitability in managing each Fund (pre- and
post-distribution), its overall profitability, and its financial condition. The
Trustees have reviewed with the Advisor the methodology used to prepare this
financial information. This information is considered in evaluating the
Advisor’s financial condition, its ability to continue to provide services under
the management agreement, and the reasonableness of the current management fee.
The Board concluded that the Advisor’s profits were reasonable in light of the
services provided to the Funds.
Ethics.
The
Board generally considers the Advisor’s commitment to providing quality services
to the Funds and to conducting its business ethically. They noted that the
Advisor’s practices generally meet or exceed industry best practices.
Economies
of Scale.
The Board also reviewed information provided by the Advisor regarding the
possible existence of economies of scale in connection with the management of
each Fund. The Board concluded that economies of scale are difficult to measure
and predict with precision, especially on a fund-by-fund basis. The Board
concluded that the Advisor is sharing economies of scale, to the extent they
exist, through its fee structure and through reinvestment in its business,
infrastructure, investment capabilities and initiatives to provide shareholders
additional content and services.
Comparison
to Other Funds’ Fees. The
management agreement provides that each Fund pays the Advisor a single,
all-inclusive (or unified) management fee for providing all services necessary
for the management and operation of the Fund, other than securities transaction
expenses, taxes, interest, extraordinary expenses, and expenses incurred in
connection with the provision of shareholder services and distribution services
under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act.
Under the unified fee structure, the Advisor is responsible for providing all
investment advisory, custody, audit, administrative, compliance, recordkeeping,
marketing and shareholder services, or arranging and supervising third parties
to provide such services. The Board believes the unified fee structure is a
benefit to Fund shareholders because it clearly discloses to shareholders the
cost of owning Fund shares, and, since the unified fee cannot be increased
without a vote of Fund shareholders, it shifts to the Advisor the risk of
increased costs of operating the Fund and provides a direct incentive to
minimize administrative inefficiencies. Part of the Board’s analysis of fee
levels involves reviewing certain evaluative data compiled by an independent
provider comparing the Fund’s unified fee to the total expense ratios of its
peers. The unified fee charged to shareholders of American Century Sustainable
Equity ETF and American Century Sustainable Growth ETF was below the median of
the total expense ratios of their respective peer expense universe and was
within the range of their peer expense group. The unified fee charged to
shareholders of American Century Mid Cap Growth Impact ETF was below the median
of the total expense ratio of its peer expense universe and was the lowest of
its peer expense group. The Board concluded that the management fee paid by each
Fund to the Advisor under its management agreement is reasonable in light of the
services provided to the Fund.
Comparison
to Fees and Services Provided to Other Clients of the Advisor. The
Board also requested and received information from the Advisor concerning the
nature of the services, fees, costs, and profitability of its advisory services
to funds or other advisory clients managed similarly to the Funds. They observed
that these varying types of client accounts require different services and
involve different regulatory and entrepreneurial risks than the management of
the Funds. The Board analyzed this information and concluded that the fees
charged and services provided to the Funds were reasonable by comparison.
Payments
to Intermediaries. The
Trustees also requested and received a description of payments made to
intermediaries by each Fund and the Advisor and services provided in response
thereto. These payments could include various payments made by each Fund or the
Advisor to
different
types of intermediaries and recordkeepers for distribution and service
activities provided for each Fund. The Trustees reviewed such information and
received representations from the Advisor that all such payments by the Advisor
were made from the Advisor’s resources and reasonable profits.
Collateral
or “Fall-Out” Benefits Derived by the Advisor. The
Board considered the possible existence of collateral benefits the Advisor may
receive as a result of its relationship with the Funds. They concluded that the
Advisor’s primary business is managing funds and it generally does not use fund
or shareholder information to generate profits in other lines of business, and
therefore does not derive any significant collateral benefits from them. The
Board noted that additional assets from other clients may offer the Advisor some
benefit from increased leverage with service providers and counterparties. The
Board also determined that the Advisor is able to provide investment management
services to certain clients other than the Funds, at least in part, due to its
existing infrastructure built to serve the fund complex. The Board concluded
that appropriate allocation methodologies had been employed to assign resources
and the cost of those resources to these other clients.
Existing
Relationship. The
Board also considered whether there was any reason for not continuing the
existing arrangement with the Advisor. In this regard, the Board was mindful of
the potential disruptions of the Funds’ operations and various risks,
uncertainties, and other effects that could occur as a result of a decision not
to continue such relationship. In particular, the Board recognized that most
shareholders have invested in each Fund on the strength of the Advisor’s
industry standing and reputation and in the expectation that the Advisor will
have a continuing role in providing advisory services to each Fund.
Conclusion
of the Trustees. As
a result of this process, the Board, including all of the independent Trustees,
taking into account all of the factors discussed above and the information
provided by the Advisor and others in connection with its review and throughout
the year, determined that the terms of the management fee are fair and
reasonable and that the management fee charged to each Fund is fair in light of
the services provided and that the investment management agreement between each
Fund and the Advisor should be renewed for an additional one-year
period.
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Liquidity
Risk Management Program |
The
Funds have adopted a liquidity risk management program (the “program”). The
Funds' Board of Trustees (the "Board") has designated American Century
Investment Management, Inc. (“ACIM”) as the administrator of the program.
Personnel of ACIM or its affiliates conduct the day-to-day operation of the
program pursuant to policies and procedures administered by the Program
Administrator, including members of ACIM’s Investment Oversight Committee who
are members of the ACIM’s Investment Management and Global Analytics
departments.
Under
the program, ACIM manages the Funds' liquidity risk, which is the risk that the
Funds could not meet shareholder redemption requests without significant
dilution of remaining shareholders’ interests in the Funds. This risk is managed
by monitoring the degree of liquidity of the Funds' investments, limiting the
amount of the Funds' illiquid investments, and utilizing various risk management
tools and facilities available to the Funds for meeting shareholder redemptions,
among other means. ACIM’s process of determining the degree of liquidity of
certain Funds' investments is supported by a third-party liquidity assessment
vendor.
The
Board reviewed a report prepared by ACIM regarding the operation and
effectiveness of the program for the period January 1, 2021 through December 31,
2021. No significant liquidity events impacting the Funds were noted in the
report. In addition, ACIM provided its assessment that the program had been
effective in managing the Funds' liquidity risk.
Retirement
Account Information
As
required by law, distributions you receive from certain retirement accounts are
subject to federal income tax withholding, unless you elect not to have
withholding apply*. Tax will be withheld on the total amount withdrawn even
though you may be receiving amounts that are not subject to withholding, such as
nondeductible contributions. In such case, excess amounts of withholding could
occur. You may adjust your withholding election so that a greater or lesser
amount will be withheld.
Remember,
even if you elect not to have income tax withheld, you are liable for paying
income tax on the taxable portion of your withdrawal. If you elect not to have
income tax withheld or you don’t have enough income tax withheld, you may be
responsible for payment of estimated tax. You may incur penalties under the
estimated tax rules if your withholding and estimated tax payments are not
sufficient. You can reduce or defer the income tax on a distribution by directly
or indirectly rolling such distribution over to another IRA or eligible plan.
You should consult your tax advisor for additional information.
State
tax will be withheld if, at the time of your distribution, your address is
within one of the mandatory withholding states and you have federal income tax
withheld (or as otherwise required by state law). State taxes will be withheld
from your distribution in accordance with the respective state rules.
*Some
403(b), 457 and qualified retirement plan distributions may be subject to 20%
mandatory withholding, as they are subject to special tax and withholding
rules. Your plan administrator or plan sponsor is required to provide you
with a special tax notice explaining those rules at the time you request a
distribution. If applicable, federal and/or state taxes may be withheld
from your distribution amount.
Proxy
Voting Policies
A
description of the policies that the funds' investment advisor uses in
exercising the voting rights associated with the securities purchased and/or
held by the funds is available without charge, upon request, by calling
1-800-345-6488. It is also available on American Century Investments’ website at
americancentury.com/proxy and on the Securities and Exchange Commission’s
website at sec.gov. Information regarding how the investment advisor voted
proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is available at americancentury.com/proxy. It is also available at
sec.gov.
Quarterly
Portfolio Disclosure
The
funds file their complete schedule of portfolio holdings with the Securities and
Exchange Commission (SEC) for the first and third quarters of each fiscal year
as an exhibit to their reports on Form N-PORT. The funds' Form N-PORT reports
are available on the SEC’s website at sec.gov.
Other
Tax Information
The
following information is provided pursuant to provisions of the Internal Revenue
Code.
Sustainable
Equity ETF and Sustainable Growth ETF hereby designate up to the maximum amount
allowable as qualified dividend income for the fiscal year ended August 31,
2022.
For
corporate taxpayers, the funds hereby designate the following, or up to the
maximum amount allowable, of ordinary income distributions paid during the
fiscal year ended August 31, 2022 as qualified for the corporate dividends
received deduction.
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Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Sustainable
Growth ETF |
— |
$1,219,340 |
$13,482 |
The
funds hereby utilized earnings and profits distributed to shareholders on
redemption of shares as part of the dividend paid deduction (tax equalization)
for the fiscal year ended August 31, 2022.
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Mid
Cap Growth Impact ETF |
Sustainable
Equity ETF |
Sustainable
Growth ETF |
— |
$128,845 |
— |
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Contact
Us |
americancenturyetfs.com |
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American
Century Sales Representatives, Financial Professionals, Broker Dealers,
Insurance Companies, Banks and Trust Companies |
1-833-ACI-ETFS |
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Telecommunications
Relay Service for the Deaf |
711 |
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American
Century ETF Trust |
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Investment
Advisor:
American
Century Investment Management, Inc.
Kansas
City, Missouri |
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Distributor:
Foreside
Fund Services, LLC - Distributor, not affiliated with American Century
Investment Services, Inc. |
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This
report and the statements it contains are submitted for the general
information of our shareholders. The report is not authorized for
distribution to prospective investors unless preceded or accompanied by an
effective prospectus. |
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©2022
American Century Proprietary Holdings, Inc. All rights
reserved. CL-ANN-96950 2210 |
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