ck0001710607-20220831
January
1, 2023
Avantis
Investors®
By
American Century Investments®
Prospectus
|
|
|
|
|
|
|
|
| |
|
| Ticker: |
Exchange: |
|
Avantis®
Short-Term Fixed Income ETF |
AVSF |
NYSE
Arca, Inc. |
|
|
|
|
|
| |
The
Securities and Exchange Commission has
not approved or disapproved
these securities or
passed upon the adequacy of this prospectus.
Any
representation to the contrary is a criminal offense. |
|
©2023
American Century Proprietary Holdings, Inc. All rights reserved.
The fund seeks to maximize
total return.
The following table describes
the fees and expenses you may pay if you buy, hold, and sell shares of the fund.
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the tables and examples
below.
|
|
|
|
|
| |
|
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
| Management
Fee |
0.15% |
|
Other
Expenses |
0.00% |
| Total
Annual Fund Operating Expenses |
0.15% |
Example
The example below is
intended to help you compare the costs of investing in the fund with the costs
of investing in other funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and then redeem all of your
shares at the end of those periods, that you earn a 5% return each year, and
that the fund’s operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would
be:
|
|
|
|
|
|
|
|
|
|
|
| |
| 1
year |
3
years |
5
years |
10
years |
| $15 |
$48 |
$85 |
$192 |
Portfolio
Turnover
The
fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund’s performance.
During
the most recent fiscal year,
the fund’s portfolio turnover rate was 38%
of the average value of its portfolio.
The
fund invests primarily in investment grade quality debt obligations from a
diverse group of U.S. and non-U.S. issuers.
The
fund’s investment process uses an analytical framework, which includes an
assessment of securities’ expected income and capital appreciation, to seek
securities with high expected returns. The portfolio managers categorize
securities within the fund’s investment universe into component groups based on
factors such as industry sector, credit rating, duration, country, and currency.
The portfolio managers then calculate the expected return implied by the yield
curve of each component group, while considering valuation metrics such as
yield, duration, and option adjusted spreads. Finally, the portfolio managers
adjust the portfolio to arrive at position weightings for each component group
with the goal of building a portfolio with enhanced expected return.
Under normal market conditions, the
fund will invest at least 80% of its net assets, plus any borrowings for
investment purposes, in fixed income securities. Fixed income
securities in which the fund may invest include corporate bonds and notes issued
by U.S. and foreign corporations, securities issued by governments and their
agencies, instrumentalities, or sponsored corporations—including supranational
organizations. The fund may also invest in derivative instruments such as
futures contracts or swap agreements, including credit default swaps, credit
default swap indexes, and total return swaps.
The
fund expects to maintain a weighted average maturity of three years or less. The
fund will invest primarily in investment grade securities as rated by an
independent rating agency or determined by the advisor to be of comparable
credit quality if a rating is unavailable.
The
fund may engage in foreign currency transactions on a spot basis and may also
use currency forward contracts to hedge exposure to foreign currencies. The fund
may purchase or sell when-issued, forward-settling, delayed delivery or forward
commitment obligations. The fund may invest more than 25% of its total assets in
U.S. Treasury, federal agencies and instrumentalities obligations.
The
fund may also engage in securities lending. Collateral received by the fund in
connection with loaning its securities may consist of cash and U.S. government
securities. Cash collateral may be invested in eligible securities, such as a
government money market fund.
The
fund is an actively managed exchange-traded fund (ETF) that does not seek to
replicate the performance of a specified index. The portfolio managers
continually analyze market and financial data to make buy, sell, and hold
decisions. When buying or selling a security, the portfolio managers may
consider the trade-off between expected returns of the security and
implementation or tax costs of the trade in an attempt to gain trading
efficiencies, avoid unnecessary risk, and enhance fund
performance.
•Interest
Rate Risk — Investments
in debt securities are also sensitive to interest rate changes. Generally, the
value of debt securities and the funds that hold them decline as interest rates
rise. The fund is more susceptible to interest rate changes than funds that have
shorter-weighted average maturities, such as money market and short-term bond
funds. A period of rising interest rates may negatively affect the fund’s
performance.
•Credit
Risk — The
inability or perceived inability of a security’s issuer to make interest and
principal payments may cause the value of the security to decrease. As a result,
the fund’s share price could also decrease. Changes in the credit rating of a
debt security held by the fund could have a similar effect.
•Liquidity
Risk — During
periods of market turbulence or unusually low trading activity, it may be
necessary for the fund to sell securities at prices that could have an adverse
effect on the fund. The market for lower-quality debt securities is generally
less liquid than the market for higher-quality securities. Changing regulatory
and market conditions, including increases in interest rates and credit spreads
may adversely affect the liquidity of the fund’s investments.
•Prepayment
and Extension Risk — The
fund may invest in debt securities backed by mortgages or assets such as auto
loan, home equity loan or student loan receivables. These underlying obligations
may be prepaid, as when a homeowner refinances a mortgage to take advantage of
declining interest rates. If so, the fund must reinvest prepayments at current
rates, which may be less than the rate of the prepaid mortgage. Because of this
prepayment risk, the fund may benefit less from declining interest rates than
funds of similar duration that invest less heavily in mortgage- and asset-backed
securities. Conversely, an issuer may exercise its right to pay principal on an
obligation held by the fund later than expected (extend the obligation),
especially in periods of rising interest rates. These events may lengthen the
duration (i.e., interest rate sensitivity) and potentially reduce the value of
these securities.
•Foreign
Risk — Foreign
securities are generally riskier than U.S. securities. Political events (such as
civil unrest, national elections and imposition of exchange controls), social
and economic events (such as labor strikes and rising inflation), natural
disasters and public health emergencies occurring in a country where the fund
invests could cause the fund’s investments in that country to experience gains
or losses. Securities of foreign issuers may be less liquid, more volatile and
harder to value than U.S. securities.
•Derivatives
Risk — The
use of derivative instruments involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional instruments. Derivatives are subject to a number of risks, including
liquidity, interest rate, market, credit and correlation risk. In addition,
derivatives can create economic leverage in the fund’s portfolio, which may
result in significant volatility and cause the fund to participate in losses (as
well as gains) in an amount that exceeds the fund’s initial investment. Certain
derivatives have the potential for unlimited loss, regardless of the size of the
initial investment. Futures contracts may experience potentially dramatic price
changes (losses) and imperfect correlations between the price of the contract
and the underlying security, index or currency. Swap agreements subject a fund
to counterparty risk. Interest rate swaps could result in losses if the fund
does not correctly anticipate interest rate changes. Credit default swaps could
result in losses if the fund does not correctly evaluate the creditworthiness of
the issuer on which the credit default swap is based.
•Currency
Risk — The
fund could experience gains or losses solely on changes in the exchange rate
between foreign currencies and the U.S. dollar.
•Investment
Process Risk — Securities
selected by the portfolio managers may perform differently than expected due to
the portfolio managers’ judgments regarding the factors used, the weight placed
on each factor, changes from the factors’ historical trends, and technical
issues with the construction and implementation of the investment process
(including, for example, data problems and/or software or other implementation
issues). There is no guarantee that the investment process will result in
effective investment decisions for the fund.
•Cash
Transactions Risk — The
fund may effect its creations and redemptions for cash, rather than for in-kind
securities. Therefore, it may be required to sell portfolio securities and
subsequently recognize gains on such sales that the fund might not have
recognized if it were to distribute portfolio securities in-kind. As such,
investments in fund shares may be less tax-efficient than an investment in an
ETF that distributes portfolio securities entirely in-kind. Cash transactions
may have to be carried out over several days if the securities market is
relatively illiquid and may involve considerable brokerage fees and taxes.
Brokerage fees and taxes will be higher than if the fund sold and redeemed
shares in-kind.
•Market
Trading Risk — The
fund faces numerous market trading risks, including the potential lack of an
active market for fund shares, losses from trading in secondary markets, periods
of high volatility and disruption in the creation and/or redemption process of
the fund. Any of these factors, among others, may lead to the fund’s shares
trading at a premium or discount to NAV. Thus, you may pay more (or less) than
NAV when you buy shares of the fund in the secondary market, and you may receive
less (or more) than NAV when you sell those shares in the secondary market. The
portfolio managers cannot predict whether shares will trade above (premium),
below (discount) or at NAV.
•Market
Risk — The
value of the fund’s shares will go up and down based on the performance of the
companies whose securities it owns and other factors generally affecting the
securities market. Market risks, including political, regulatory, economic
and social developments, can affect the value of the fund’s investments. Natural
disasters, public health emergencies, war,
terrorism and other unforeseeable events may lead to increased market volatility
and may have adverse long-term effects on world economies and markets
generally.
•Public
Health Emergency Risk — A
pandemic, caused by the infectious respiratory illness COVID-19, has
caused
market disruption and other economic impacts. Markets have experienced
volatility, reduced liquidity, and increased trading costs. The
pandemic
may continue to impact the fund and its underlying investments and could cause
increased premiums or discounts to the fund’s NAV.
•Securities
Lending Risk — Securities
lending involves the risk of loss of rights in, or delay in recovery of, the
loaned securities if the borrower fails to return the security loaned or becomes
insolvent.
•Authorized
Participant Concentration Risk — Only
an authorized participant may engage in creation or redemption transactions
directly with the fund. The fund may have a limited number of institutions that
act as authorized participants. To the extent that these institutions exit the
business or are unable to proceed with creation and/or redemption orders with
respect to the fund and no other authorized participant is able to step forward
to process creation and/or redemption orders, fund shares may trade at a
discount to net asset value (NAV) and possibly face trading halts and/or
delisting. This risk may be more pronounced in volatile markets, potentially
where there are significant redemptions in ETFs generally.
•Redemption
Risk — The
fund may need to sell securities at times it would not otherwise do so to meet
shareholder redemption requests. Selling securities to meet such redemptions may
cause the fund to experience a loss, increase the fund’s transaction costs or
have tax consequences. To the extent that a large shareholder (including a fund
of funds or 529 college savings plan) invests in the fund, the fund may
experience relatively large redemptions as such shareholder reallocates its
assets.
•Principal
Loss Risk — At
any given time your shares may be worth less than the price you paid for them.
In other words, it is possible to lose money by investing in the
fund.
An investment in the fund is not a
bank deposit, and it is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government
agency.
The following
bar chart and table provide some indication of the risks of investing in the
fund. The bar chart shows changes in the fund’s performance from year to year.
The table shows how the fund’s average annual returns for the periods shown
compared with those of a broad measure of market performance.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the future. For current performance information,
please visit avantisinvestors.com.
Sales charges and account fees, if
applicable, are not reflected in the bar chart. If those charges were included,
returns would be less than those
shown.
Calendar Year Total
Returns
Highest Performance
Quarter (2Q
2021): 0.37% Lowest Performance Quarter
(1Q
2021): -0.77%
As
of September 30, 2022, the
most recent calendar quarter end, the fund’s year-to-date return was
-6.71%.
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average
Annual Total Returns
For
the calendar year ended December 31, 2021 |
1
year |
Since
Inception |
Inception
Date |
| Avantis
Short-Term Fixed Income ETF Shares |
|
| |
| Return Before
Taxes |
-1.14% |
-0.57% |
10/13/2020 |
| Return After Taxes on
Distributions |
-1.33% |
-0.76% |
10/13/2020 |
| Return After Taxes on Distributions and
Sale of Fund Shares |
-0.68% |
-0.51% |
10/13/2020 |
|
Bloomberg
U.S. Aggregate Government & Credit 1-5 Year Index
(reflects no deduction for
fees, expenses or taxes) |
-0.97% |
-0.56% |
10/13/2020 |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their fund shares through
tax-deferred arrangements, such as 401(k) plans or
IRAs.
Investment
Advisor
American
Century Investment Management, Inc.
Portfolio
Managers
Eduardo
Repetto, Chief
Investment Officer of Avantis Investors, has been a member of the team that
manages the fund since 2020.
Hozef
Arif,
Senior Portfolio Manager, has been a member of the team that manages the fund
since 2020.
Mitchell
Handa, Senior
Portfolio Manager, has been a member of the team that manages the fund since
2020.
Daniel
Ong, Senior
Portfolio Manager, has been a member of the team that manages the fund since
2020.
The
fund is an ETF. Fund shares may only be bought and sold in a secondary market
through a broker-dealer at a market price. Because ETF shares trade at market
prices rather than NAV, shares may trade at a price greater than NAV (a premium)
or less than NAV (a discount). An investor may incur costs attributable to the
difference between the highest price a buyer is willing to pay to purchase
shares of the fund (bid) and the lowest price a seller is willing to accept for
shares of the fund (ask) when buying or selling shares in the secondary market
(bid-ask spread). Investors can find information on the fund’s NAV, market
price, premiums and discounts, and bid-ask spread at
avantisinvestors.com.
Fund
distributions are generally taxable as ordinary income or capital gains, unless
you are investing through a tax-deferred account such as a 401(k) or individual
retirement account (in which case you may be taxed upon withdrawal of your
investment from such account).
If
you purchase the fund through a broker-dealer or other financial intermediary
(such as a bank), the advisor and its related companies may pay the intermediary
for the sale of fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more
information.
What
is the fund’s investment objective?
The
fund seeks to maximize total return.
The
fund’s investment objective is a nonfundamental investment policy and may be
changed by the Board of Trustees without approval by shareholders.
What
are the fund’s principal investment strategies?
The
fund invests primarily in investment grade quality debt obligations from a
diverse group of U.S. and non-U.S. issuers.
The
fund’s investment process uses an analytical framework, which includes an
assessment of securities’ expected income and capital appreciation, to seek
securities with high expected returns. The portfolio managers categorize
securities within the fund’s investment universe into component groups based on
factors such as industry sector, credit rating, duration, country, and currency.
The portfolio managers then calculate the expected return implied by the yield
curve of each component group, while considering valuation metrics such as
yield, duration, and option adjusted spreads. Finally, the portfolio managers
adjust the portfolio to arrive at position weightings for each component group
with the goal of building a portfolio with enhanced expected return.
Under
normal market conditions, the fund will invest at least 80% of its net assets,
plus any borrowings for investment purposes, in fixed income securities. The
fund may change this 80% policy only upon 60 days’ prior written notice to
shareholders. Fixed income securities in which the fund may invest include
corporate bonds and notes issued by U.S. and foreign corporations, securities
issued by governments and their agencies, instrumentalities, or sponsored
corporations—including supranational organizations, and securities backed by
mortgages or other assets. The fund may also invest in derivative instruments
such as futures contracts or swap agreements, including credit default swaps,
credit default swap indexes, and total return swaps.
The
fund expects to maintain a weighted average maturity of three years or less. The
fund will invest primarily in investment grade securities as rated by an
independent rating agency or determined by the advisor to be of comparable
credit quality if a rating is unavailable.
The
fund may engage in foreign currency transactions on a spot basis and may also
use currency forward contracts to hedge exposure to foreign currencies. The fund
may purchase or sell when-issued, forward-settling, delayed delivery or forward
commitment obligations. The fund may invest more than 25% of its total assets in
U.S. Treasury, federal agencies and instrumentalities obligations.
The
fund may also engage in securities lending. Collateral received by the fund in
connection with loaning its securities may consist of cash and U.S. government
securities. Cash collateral may be invested in eligible securities, such as a
government money market fund.
The
fund is an actively managed exchange-traded fund (ETF) that does not seek to
replicate the performance of a specified index. The portfolio managers
continually analyze market and financial data to make buy, sell, and hold
decisions. When buying or selling a security, the portfolio managers may
consider the trade-off between expected returns of the security and
implementation or tax costs of the trade in an attempt to gain trading
efficiencies, avoid unnecessary risk, and enhance fund performance.
In
the event of exceptional market or economic conditions, the fund may take
temporary defensive positions that are inconsistent with the fund’s principal
investment strategies. To the extent the fund assumes a defensive position, it
may not achieve its investment objective.
A
description of the policies and procedures with respect to the disclosure of the
fund’s portfolio securities is available in the statement of additional
information. Portfolio holdings can be viewed online on the fund’s
website.
What
are the principal risks of investing in the fund?
•Interest
Rate Risk — When
interest rates change, the fund’s share value will be affected. Generally, when
interest rates rise, the fund’s share value will decline. The opposite is true
when interest rates decline. The degree to which interest rate changes affect
the fund’s performance varies and is related to the weighted average maturity of
the fund. For example, when interest rates rise, you can expect the share value
of a long-term bond fund to fall more than that of a short-term bond fund. When
rates fall, the opposite is true. Even though the fund’s shorter-weighted
average duration is designed to lessen interest rate risk, the fund is still
susceptible to interest rate changes, and it is generally riskier than funds
that have even shorter-weighted average durations, such as money market funds. A
period of rising interest rates may negatively affect the fund’s
performance.
•Credit
Risk — Credit
risk is the risk that the inability or perceived inability of the issuer to make
interest and principal payments will cause the value of the securities to
decrease. As a result the fund’s share price could also decrease. A high credit
rating indicates a high degree of confidence by the rating organization that the
issuer will be able to withstand adverse business, financial or economic
conditions and make interest and principal payments on time. A lower credit
rating indicates a greater risk of non-payment. Changes in the credit rating of
a debt security held by the fund could have a similar effect. The fund’s credit
quality restrictions apply at the time of purchase; the fund will not
necessarily sell securities if they are downgraded by a rating
agency.
•Liquidity
Risk — During
periods of market turbulence or unusually low trading activity, to meet
redemptions it may be necessary for the fund to sell securities at prices that
could have an adverse effect on the fund’s share price. The market for
lower-quality debt securities is generally even less liquid than the market for
higher-quality securities. Adverse publicity and investor perceptions, as well
as new and proposed laws, also may have a greater negative impact on the market
for lower-quality securities. Changing regulatory and market conditions,
including increases in interest rates and credit spreads may adversely affect
the liquidity of the fund’s investments.
•Prepayment
and Extension Risk — The
fund may invest in debt securities backed by mortgages or assets such as auto
loan, home equity loan or student loan receivables. These underlying obligations
may be prepaid, as when a homeowner refinances a mortgage to take advantage of
declining interest rates. If so, the fund must reinvest prepayments at current
rates, which may be less than the rate of the prepaid mortgage. Because of this
prepayment risk, the fund may benefit less from declining interest rates than
funds of similar duration that invest less heavily in mortgage- and asset-backed
securities. Conversely, an issuer may exercise its right to pay principal on an
obligation held by the fund later than expected (extend the obligation),
especially in periods of rising interest rates. These events may lengthen the
duration (i.e., interest rate sensitivity) and potentially reduce the value of
these securities.
•Foreign
Securities Risk — Foreign
securities are generally riskier than U.S. securities. Political events
(such as civil unrest, national elections and imposition of exchange controls),
social and economic events (such as labor strikes and rising inflation), natural
disasters and public health emergencies occurring in a country where the fund
invests could cause the fund’s investments in that country to experience losses.
Securities of foreign issuers may be less liquid, more volatile and harder to
value than U.S. securities.
•Derivative
Risk — The
use of derivative instruments involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional instruments. Derivatives are subject to a number of risks, including
liquidity, interest rate, market, credit, and correlation risk. Derivative
transactions may expose the fund to the effects of leverage, which could
increase the fund’s exposure to the market and magnify potential losses,
particularly when derivatives are used to enhance return rather than offset
risk. Derivatives can also be highly illiquid and difficult to unwind or value,
and changes in the value of a derivative held by the fund may not correlate with
the value of the underlying instrument or the fund’s other investments. Futures
contracts may experience potentially dramatic price changes (losses) and
imperfect correlations between the price of the contract and the underlying
security, index or currency which will increase the volatility of the fund and
may involve a small investment of cash relative to the magnitude of the risk
assumed. Swap agreements are agreements to exchange the return generated by one
instrument for the return generated by another instrument (or index). Swap
agreements subject a fund to the risk that the counterparty to the transaction
may not meet its obligations. The fund also bears the risk of loss of the amount
expected to be received under a swap agreement in the event of the default or
bankruptcy of a counterparty. Interest rate swaps could result in losses if
interest rate changes are not correctly anticipated by the fund. Credit default
swaps could result in losses if the fund does not correctly evaluate the
creditworthiness of the issuer on which the credit default swap is
based.
•Currency
Risk — Because
the fund may invest in securities denominated in foreign currencies, the fund
could experience gains or losses based solely on changes in the exchange rate
between foreign currencies and the U.S. dollar.
•Investment
Process Risk — Securities
selected by the portfolio managers may perform differently than expected due to
the portfolio managers’ judgments regarding the factors used, the weight placed
on each factor, changes from the factors’ historical trends, and technical
issues with the construction and implementation of the investment process
(including, for example, data problems and/or software or other implementation
issues). There is no guarantee that the investment process will result in
effective investment decisions for the fund.
•Cash
Transactions Risk — ETFs
generally are able to make in-kind redemptions to avoid some costs, including
being taxed on gains on the distributed portfolio securities at the fund level.
However, because the fund may effect purchases or redemptions fully or partially
in cash, rather than in-kind, it may be required to sell portfolio securities in
order to obtain the cash needed to distribute redemption proceeds. If the fund
recognizes gain on these sales, this generally will cause the fund to recognize
gain it might not otherwise have recognized, or to recognize such gain sooner
than would otherwise be required if it were to distribute portfolio securities
in-kind. The fund generally intends to distribute these gains to shareholders to
avoid being taxed on this gain at the fund level and otherwise comply with the
special tax rules that apply to it. This strategy may cause shareholders to be
subject to tax on gains they would not otherwise be subject to, or at an earlier
date than, if they had made an investment in a different ETF. Moreover, cash
transactions may have to be carried out over several days if the securities
market is relatively illiquid and may involve considerable brokerage fees and
taxes. These brokerage fees and taxes, which may be higher than if the fund sold
and redeemed its shares in-kind, will be passed on to purchasers and redeemers
of Creation Units in the form of creation and redemption transaction fees. To
the extent that these costs are not offset by a transaction fee, the fund may
bear the expense.
•Market
Trading Risk — Although
shares of the fund are listed for trading on one or more stock exchanges, there
can be no assurance that an active trading market for such shares will develop
or be maintained. There are no obligations of market makers to make a market in
the fund’s shares or of an authorized participant to submit purchase or
redemption orders for Creation Units. Decisions by market makers or authorized
participants to reduce their role or step away from these activities in times of
market stress could inhibit the effectiveness of the arbitrage process in
maintaining the relationship between the underlying value of the
fund’s
portfolio securities and the fund’s market price. This reduced effectiveness
could result in fund shares trading at a premium or discount to its NAV and also
greater than normal intraday bid/ask spreads.
Shares
of the fund may trade in the secondary market at times when the fund does not
accept orders to purchase or redeem shares. At such times, shares may trade in
the secondary market with more significant premiums or discounts than might be
experienced at times when the fund accepts purchase and redemption orders.
Secondary market trading in fund shares may be halted by a stock exchange
because of market conditions or other reasons, and may be subject to trading
halts caused by extraordinary market volatility pursuant to “circuit breaker”
rules on the stock exchange or market. There can be no assurance that the
requirements necessary to maintain the listing or trading of fund shares will
continue to be met or will remain unchanged. In addition, during a “flash
crash,” the market prices of the fund’s shares may decline suddenly and
significantly. Such a decline may not reflect the performance of the
portfolio securities held by the fund. Flash crashes may cause authorized
participants and other market makers to limit or cease trading in the fund’s
shares for temporary or longer periods. Shareholders could suffer
significant losses to the extent that they sell fund shares at these temporarily
low market prices.
Shares
of the fund may trade at prices other than NAV. Thus, you may pay more (or less)
than NAV when you buy shares of the fund in the secondary market, and you may
receive less (or more) than NAV when you sell those shares in the secondary
market. While the creation/redemption feature is designed to make it likely that
the fund’s shares normally will trade on stock exchanges at prices close to the
fund’s next calculated NAV, market prices are not expected to correlate exactly
with the fund’s NAV due to timing reasons as well as market supply and demand
factors. In addition, disruptions to creations and redemptions or extreme market
volatility may result in trading prices for shares of the fund that differ
significantly from its NAV. The portfolio managers cannot predict whether shares
will trade above (premium), below (discount) or at NAV.
When
buying or selling shares of the fund through a broker, you will likely incur a
brokerage commission or other charges determined by your broker. In addition,
you may incur the cost of the “spread,” that is, any difference between the bid
price and the ask price. The spread varies over time for shares of the fund
based on the fund’s trading volume and market liquidity, and is generally lower
if the fund has a lot of trading volume and market liquidity, and higher if the
fund has little trading volume and market liquidity. During times of market
stress, spreads may widen causing investors to pay more.
•Market
Risk — The
value of the fund’s shares will go up and down based on the performance of the
companies whose securities it owns and other factors generally affecting the
securities market. Market risks, including political, regulatory, economic
and social developments, can affect the value of the fund’s investments. Natural
disasters, public health emergencies, war,
terrorism and other unforeseeable events may lead to increased market volatility
and may have adverse long-term effects on world economies and markets
generally.
•Public
Health Emergency Risk — A
pandemic, caused by the infectious respiratory illness COVID-19, has
caused
travel restrictions, disruption of healthcare systems, prolonged quarantines,
cancellations, supply chain interruptions, lower consumer demand, layoffs,
credit downgrades, and defaults among other economic impacts. Certain markets
experienced temporary closures, extreme volatility, losses, reduced liquidity
and increased trading costs. The
pandemic
may continue to impact the fund and its underlying investments and could cause
increased premiums or discounts to the fund’s NAV.
•Securities
Lending Risk — Securities
lending involves the risk of loss of rights in, or delay in recovery of, the
loaned securities if the borrower fails to return the security loaned or becomes
insolvent. Any decline in the value of a security while the security is loaned
will adversely affect performance. These events could also result in adverse tax
consequences.
•Authorized
Participant Concentration Risk — Only
an authorized participant may engage in creation or redemption transactions
directly with the fund. The fund may have a limited number of institutions that
act as authorized participants, none of which are obligated to engage in
creation or redemption transactions. To the extent that these institutions exit
the business or are unable to proceed with creation and/or redemption orders
with respect to the fund and no other authorized participant is able to step
forward to process creation and/or redemption orders, fund shares may trade at a
discount to NAV and possibly face trading halts and/or delisting. This risk may
be more pronounced in volatile markets, potentially where there are significant
redemptions in ETFs generally. Authorized participant concentration risks may be
heightened in scenarios where authorized participants have limited or diminished
access to the capital required to post collateral.
•Redemption
Risk — The
fund may need to sell securities at times it would not otherwise do so to meet
shareholder redemption requests. Selling securities to meet such redemptions may
cause the fund to experience a loss, increase the fund’s transaction costs or
have tax consequences. To the extent that a large shareholder (including a fund
of funds or 529 college savings plan) invests in the fund, the fund may
experience relatively large redemptions as such shareholder reallocates its
assets.
•Principal
Loss Risk — At
any given time your shares may be worth less than the price you paid for them.
In other words, it is possible to lose money by investing in the
fund.
An
investment in the fund is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
Who
manages the fund?
The
Board of Trustees, investment advisor and fund management team play key roles in
the management of the fund.
The
Board of Trustees
The
Board of Trustees is responsible for overseeing the advisor’s management and
operations of the fund pursuant to the management agreement. In performing their
duties, Board members receive detailed information about the fund and its
advisor regularly throughout the year, and meet at least quarterly with
management of the advisor to review reports about fund operations. The trustees’
role is to provide oversight and not to provide day-to-day management. The
majority of the trustees are independent of the fund’s advisor. They are not
employees, directors or officers of, and have no financial interest in, the
advisor or any of its affiliated companies (other than as shareholders of
American Century Investments funds), and they do not have any other
affiliations, positions or relationships that would cause them to be considered
“interested persons” under the Investment Company Act of 1940 (Investment
Company Act).
The
Investment Advisor
The
fund’s investment advisor is American Century Investment Management, Inc. (the
advisor). The advisor has been managing investment companies since 1958 and is
headquartered at 4500 Main Street, Kansas City, Missouri 64111. Avantis
Investors is a division of American Century Investment Management,
Inc.
The
advisor is responsible for managing the investment portfolio of the fund and
directing the purchase and sale of its investment securities. The advisor also
arranges for transfer agency, custody and all other services necessary for the
fund to operate.
For
the services it provides to the fund, the advisor receives a unified management
fee based on a percentage of the daily net assets of the fund. The amount of the
fee is calculated daily and paid monthly in arrears. The advisor pays all
expenses of managing and operating the fund, other than the management fee
payable to the advisor, brokerage and other transaction fees and expenses
relating to the acquisition and disposition of portfolio securities, acquired
fund fees and expenses, interest (including without limitation borrowing costs
and overdraft charges), taxes (including without limitation income, excise,
transfer, and withholding taxes), litigation expenses (including without
limitation litigation counsel fees and expenses), extraordinary expenses, and
expenses incurred in connection with the provision of shareholder and
distribution services under a plan adopted pursuant to Rule 12b-1 under the
Investment
Company
Act. The advisor may pay unaffiliated third parties who provide recordkeeping
and administrative services that would otherwise be performed by an affiliate of
the advisor.
|
|
|
|
|
| |
Management
Fees Paid by the Fund to the Advisor As a Percentage of Average
Net Assets for the Fiscal Year Ended August 31, 2022 |
|
| Avantis
Short-Term Fixed Income ETF |
0.15% |
A
discussion regarding the basis for the Board of Trustees’ approval of the fund’s
investment advisory agreement with the advisor is available in the fund’s annual
report to shareholders dated August 31, 2022.
The
Fund Management Team
Portfolio
managers work as a team to manage funds. Portfolio managers regularly review
portfolio holdings and potential purchase and sale activity. Team members buy
and sell securities for a fund as they see fit, guided by the fund’s investment
objective and strategy.
The
portfolio managers on the investment team who are jointly and primarily
responsible for the day-to-day management of the fund are identified
below.
Eduardo
Repetto
Mr.
Repetto, Chief Investment Officer of Avantis Investors, joined Avantis Investors
in 2019. Prior to joining Avantis Investors, he served in investment management
roles at Dimensional Fund Advisors (DFA) from 2000 to 2017, including as
co-chief executive officer from 2010 to 2017, co-chief investment officer from
2014 to 2017 and chief investment officer from 2007 to 2014. He has a Diploma de
Honor in civil engineering from the Universidad de Buenos Aires, a master’s
degree in engineering from Brown University and a Ph.D. in aeronautics from the
California Institute of Technology.
Hozef
Arif
Mr.
Arif, Senior Portfolio Manager, joined Avantis Investors in 2020. Prior to
joining Avantis Investors, he served in investment management roles at Pacific
Investment Management Company (PIMCO) from 2008 to 2019, including as executive
vice president and credit portfolio manager from 2014 to 2019. He has a
bachelor’s degree in chemical engineering from the Indian Institute of
Technology, a master’s degree in petroleum engineering from Stanford University
and an MBA in finance and economics from The University of Chicago Booth School
of Business.
Mitchell
Handa
Mr.
Handa, Senior Portfolio Manager, joined Avantis Investors in 2020. Prior to
joining Avantis Investors, he served as a portfolio manager at Pacific
Investment Management Company (PIMCO) from 2012 to 2019. He has a bachelor’s
degree in mathematics from The City University of New York, a master’s degree in
physics from the University of California, Los Angeles and a master’s degree in
financial mathematics from The University of Chicago.
Daniel
Ong
Mr.
Ong, Senior Portfolio Manager, joined Avantis Investors in 2019. Prior to
joining Avantis Investors, he served as a senior portfolio manager and vice
president at Dimensional Fund Advisors (DFA) from 2005 to 2019. He has a
bachelor’s degree in economics from the University of California, Irvine and an
MBA in finance and accounting from The University of Chicago Booth School of
Business. He is a CFA charterholder.
The
statement of additional information provides additional information about the
accounts managed by the portfolio managers, the structure of their compensation,
and their ownership of fund securities.
Fund
Performance
The
fund has the same management team and investment policies as the Avantis
Short-Term Fixed Income Fund. The fees and expenses of the funds are similar,
and they are managed with substantially the same investment objective and
strategies. Notwithstanding these general similarities, the Avantis Short-Term
Fixed Income Fund and the Avantis Short-Term Fixed Income ETF are separate funds
that have different investment performance. Differences in cash flows into the
two funds, the size of their portfolios, and the specific investments held by
the two funds cause performance to differ. Please consult the mutual fund
prospectus for a description of the mutual fund, details on how the mutual fund
is offered, and its associated fees.
Fundamental
Investment Policies
Shareholders
must approve any change to the fundamental investment policies contained in the
statement of additional information. The Board of Trustees and/or the advisor
may change any other policies, including the fund’s investment objective, or
investment strategies described in this prospectus or otherwise used in the
operation of the fund at any time, subject to applicable notice
provisions.
Buying
and Selling Shares
Shares
of the fund may be acquired or redeemed directly from the fund only in Creation
Units or multiples thereof, as discussed below. Only an authorized participant
may engage in creation and redemption transactions directly with the fund. Once
created, shares of the fund generally trade in the secondary market in amounts
less than a Creation Unit.
Shares
of the fund are listed on a national securities exchange for trading during the
trading day. Shares can be bought and sold throughout the trading day like
shares of other publicly traded companies. American Century ETF Trust (the
trust) does not impose any minimum investment for shares of the fund purchased
on an exchange. Shares of the fund trade under the following ticker symbol:
AVSF.
Buying
or selling fund shares on an exchange involves two types of costs that may apply
to all securities transactions. When buying or selling shares of the fund
through a broker, you will likely incur a brokerage commission or other charges
determined by your broker. The commission is frequently a fixed amount and may
be a significant proportional cost for investors seeking to buy or sell small
amounts of shares. In addition, you may incur the cost of the “spread,” that is,
any difference between the bid price and the ask price. The spread varies over
time for shares of the fund based on the fund’s trading volume and market
liquidity, and is generally lower if the fund has a lot of trading volume and
market liquidity, and higher if the fund has little trading volume and market
liquidity.
The
fund’s primary listing exchange is NYSE Arca, Inc., which is open for trading
Monday through Friday and is closed on weekends and the following holidays: New
Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial
Day, Juneteenth National Independence Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Book
Entry
Shares
of the fund are held in book-entry form, which means that no share certificates
are issued. The Depository Trust Company (DTC) or its nominee is the record
owner of all outstanding shares of the fund and is recognized as the owner of
all shares for all purposes.
Investors
owning shares of the fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for shares of the
fund. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
shares, you are not entitled to receive physical delivery of stock certificates
or to have shares registered in your name, and you are not considered a
registered owner of shares. Therefore, to exercise any right as an owner of
shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other securities that you
hold in book-entry or “street name” form.
Frequent
Trading Practices
The
Board of Trustees has not adopted a policy of monitoring for frequent purchases
and redemptions of fund shares (frequent trading). The Board of Trustees
believes that a frequent trading policy is unnecessary because fund shares are
listed for trading on a national securities exchange. Therefore, it is unlikely
that a shareholder could take advantage of a potential arbitrage opportunity
presented by a lag between a change in the value of the fund’s portfolio
securities after the close of the primary markets for the fund’s portfolio
securities and the reflection of that change in the fund’s NAV (market timing),
because the fund generally sells and redeems its shares directly through
transactions that are in-kind and/or for cash, subject to the conditions
described below under Creations and Redemptions.
Investments
by Other Investment Companies
Section
12(d)(1) of the Investment Company Act restricts investments by investment
companies in the securities of other investment companies. Registered investment
companies are permitted to invest in the fund beyond the limits set forth in
Section 12(d)(1), subject to certain terms and conditions set forth in SEC
rules. In order for an unaffiliated registered investment company to invest in
shares of the fund beyond the limitations of Section 12(d)(1) pursuant to Rule
12d1-4, the registered investment company must enter into an agreement with the
trust.
Creations
and Redemptions
Prior
to trading in the secondary market, shares of the fund are “created” at NAV by
market makers, large investors and institutions only in block-size units, called
“Creation Units.” All orders to purchase Creation Units must be placed by or
through an authorized participant that has entered into an authorized
participant agreement (AP Agreement) with Foreside Fund Services, LLC (the
distributor). Only an authorized participant may create or redeem Creation Units
directly with the fund.
A
creation transaction, which is subject to acceptance by the trust, generally
takes place when an authorized participant deposits into the fund a designated
portfolio of securities and/or cash (which may include cash in lieu of certain
securities) in exchange for a specified number of Creation Units. Similarly,
shares can be redeemed only in Creation Units, generally for a designated
portfolio of securities and/or cash (which may include cash in lieu of certain
securities). With respect to the fund, redemptions are generally on an
in-kind
basis, but the fund reserves the right to meet redemptions in cash. Except when
aggregated in Creation Units, shares are not redeemable by the
fund.
The
prices at which creations and redemptions occur are based on the next
calculation of NAV after a creation or redemption order is received in a proper
form under the AP Agreement. The portfolio of securities required for purchase
of a Creation Unit is generally the same as the portfolio of securities the fund
will deliver upon redemption of fund shares, except under certain circumstances.
As a result of any system failure or other interruption, creation or redemption
orders either may not be executed according to the fund’s instructions or may
not be executed at all, or the fund may not be able to place or change such
orders.
Creations
and redemptions must be made through a firm that is either a broker-dealer or
other participant in the Continuous Net Settlement System of the National
Securities Clearing Corporation or a DTC participant and, in either case, has
executed an AP Agreement with the distributor. Information about the procedures
regarding creations and redemptions of Creation Units (including the cut-off
times for receipt of creation and redemption orders) is included in the fund’s
statement of additional information (SAI).
Because
new shares may be created and issued on an ongoing basis, at any point during
the life of the fund a “distribution,” as such term is used in the Securities
Act of 1933 (Securities Act), may be occurring. Broker-dealers and other persons
are cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner that could render them statutory underwriters and subject to the
prospectus delivery and liability provisions of the Securities Act. Any
determination of whether one is an underwriter must take into account all the
relevant facts and circumstances of each particular case.
Broker-dealers
should also note that dealers who are not “underwriters” but are participating
in a distribution (as contrasted to ordinary secondary transactions), and thus
dealing with shares that are part of an “unsold allotment” within the meaning of
Section 4(a)(3)(C) of the Securities Act, would be unable to take advantage of
the prospectus delivery exemption provided by Section 4(a)(3) of the Securities
Act. For delivery of prospectuses to exchange members, the prospectus delivery
mechanism of Rule 153 under the Securities Act is available only with respect to
transactions on a national securities exchange.
In
addition, certain affiliates of the fund and the advisor may purchase and resell
fund shares pursuant to this prospectus.
Share
Price
The
price of fund shares is based on market price. The trading prices of the fund’s
shares in the secondary market generally differ from the fund’s daily NAV and
are affected by market forces such as supply and demand, economic conditions and
other factors.
Calculation
of NAV
American
Century Investments will price the fund shares purchased or redeemed by
authorized participants based on the net
asset value
(NAV) next determined after an order is received in good order by the fund’s
transfer agent. We determine the NAV of the fund as of the close of regular
trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on
each day the NYSE is open. On days when the NYSE is closed (including certain
U.S. national holidays), we do not calculate the NAV.
|
|
|
|
|
|
|
|
| |
|
|
The
net
asset value,
or NAV, of the fund is the current value of the fund’s assets, minus any
liabilities, divided by the number of shares of the fund
outstanding. |
|
The
value of the securities and other assets and liabilities held by the fund are
determined by the advisor, as the valuation designee, pursuant to its valuation
policies and procedures. The fund’s Board of Trustees oversees the valuation
designee and at least annually reviews its valuation policies and procedures.
Valuations are determined in accordance with applicable federal securities laws
and accounting principles generally accepted in the United States.
Fixed
income securities are generally valued using prices obtained from approved
independent pricing services approved by the valuation designee or market
quotations provided by dealers. Pricing services will generally provide
evaluated prices based on accepted industry conventions, which may require the
service to use its own discretion.
Evaluated prices are commonly derived through utilization of market models
that
take into consideration various market factors,
assumptions
and security characteristics including,
but not limited to,
trade data, quotations from broker-dealers and active market makers, relevant
yield curve and spread data, related sector levels, creditworthiness, trade data
or market information on comparable securities and other relevant
security-specific information. The
use of different models or inputs may result in pricing services determining a
different price for the same security. The methods used by the pricing services
and the valuations so established are reviewed by the valuation designee under
the oversight of the Board of Trustees.
Debt
obligations with 60 days or less remaining until maturity may be valued at
amortized cost.
If
the valuation designee determines that the valuation methods mentioned above do
not reflect the security's fair value, the valuation designee will use other
valuation methodologies to value a security if the fair valuation would
materially impact the fund’s NAV.
While fair value determinations involve judgments that are inherently
subjective, these determinations are made in good faith in accordance with
the
valuation designee’s valuation policies and
procedures.
The
effect of using fair value determinations is that the fund’s NAV will be based,
to some degree, on security valuations that the valuation
designee reasonably
believes are fair rather than being solely determined by the market.
With
respect to any portion of the fund’s assets that are invested in other
mutual funds,
the fund’s NAV will be calculated based upon the NAVs of such mutual
funds.
These
mutual funds are required
to explain the circumstances under which they will use fair value pricing and
the effects of using fair value pricing in their prospectuses.
Trading
of securities in foreign markets may not take place every day the NYSE is open.
Also, trading in some foreign markets and on some electronic trading networks
may take place on weekends or holidays when the fund’s NAV is not calculated.
So, the value of the fund’s portfolio may be affected on days when you will not
be able to purchase or sell fund shares.
Distributions
Federal
tax laws require the fund to make distributions to its shareholders in order to
qualify as a regulated investment company. Qualification as a regulated
investment company means the fund should not be subject to state or federal
income tax on amounts distributed. The distributions generally consist of
dividends and interest received by the fund, as well as capital
gains
realized by the fund on the sale of its investment securities.
|
|
|
|
|
|
|
|
| |
|
|
Capital
gains
are
increases in the values of capital assets, such as stocks or bonds, from
the time the assets are purchased. |
|
The
fund generally expects to pay distributions from net income, if any, monthly.
The fund generally pays distributions from realized capital gains, if any, once
a year. It may make more frequent distributions if necessary to comply with
Internal Revenue Code provisions.
Although
dividends generally will be treated as distributed when paid, any dividend
declared by a fund in October, November or December and payable to shareholders
of record in such a month that is paid during the following January will be
treated for U.S. federal income tax purposes as received by shareholders on
December 31 of the calendar year in which it was declared.
Dividend
payments are made through DTC participants and indirect participants to
beneficial owners then of record with proceeds received from the fund.
Distributions may be automatically reinvested in whole fund shares only if you
purchased the shares through a broker that makes such option
available.
Some
of the tax consequences of owning shares of the fund will vary depending on
whether you own them through a taxable or tax-deferred account. Distributions by
the fund of dividend and interest income, capital gains and other income it has
generated through its investment activities will generally be taxable to
shareholders who hold shares in a taxable account. Tax consequences also may
result when investors sell fund shares.
Tax-Deferred
Accounts
If
you purchase fund shares through a tax-deferred account, such as an IRA or
employer-sponsored retirement plan, income and capital gains distributions
usually will not be subject to current taxation but will accumulate in your
account under the plan on a tax-deferred basis. Likewise, moving from one fund
to another fund within a plan or tax-deferred account generally will not cause
you to be taxed. For information about the tax consequences of making purchases
or withdrawals through a tax-deferred account, please consult your plan
administrator, your summary plan description or a tax advisor.
Taxable
Accounts
If
you own fund shares through a taxable account, you may be taxed on your
investments if the fund makes distributions or if you sell your fund
shares.
Taxability
of Distributions
Fund
distributions may consist of income, such as dividends and interest earned by
the fund from its investments, or capital gains generated by the fund from the
sale of investment securities. Distributions of income are taxed as ordinary
income, unless they are designated as qualified
dividend income
and you meet a minimum required holding period with respect to your shares of
the fund, in which case distributions of income are taxed at the same rates as
long-term capital gains.
|
|
|
|
|
|
|
|
| |
|
|
Qualified
dividend income
is
a dividend received by a fund from the stock of a domestic or qualifying
foreign corporation, provided that the fund has held the stock for a
required holding period and the stock was not on loan at the time of the
dividend. |
|
The
tax character of any distributions from capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions or take
them in cash. Short-term (one year or less) capital gains are taxable as
ordinary income. Gains on securities held for more than one year are taxed at
the lower rates applicable to long-term capital gains.
If
a fund’s distributions exceed current and accumulated earnings and profits, such
excess will generally be considered a return of capital. A return of capital
distribution is generally not subject to tax, but will reduce your cost basis in
the fund and result in higher realized capital gains (or lower realized capital
losses) upon the sale of fund shares.
You
will receive information regarding the tax character of fund distributions for
each calendar year in an annual tax mailing.
If
you meet specified income levels, you will also be subject to a 3.8% Medicare
contribution tax which is imposed on net investment income, including interest,
dividends and capital gains. Distributions also may be subject to state and
local taxes. Because everyone’s tax situation is unique, you may want to consult
your tax professional about federal, state and local tax
consequences.
Taxes
on Transactions
Your
sales of fund shares are subject to capital gains tax. Short-term capital gains
are gains on fund shares you held for 12 months or less. Long-term capital gains
are gains on fund shares you held for more than 12 months. If your shares
decrease in value, their sale will result in a long-term or short-term capital
loss. However, you should note that loss realized upon the sale of shares held
for six months or less will be treated as a long-term capital loss to the extent
of any distribution of long-term capital gain to you with respect to those
shares. If a loss is realized on the sale of fund shares, the reinvestment in
additional fund shares within 30 days before or after the sale may be subject to
the wash sale rules of the Internal Revenue Code. This may result in a
postponement of the recognition of such loss for federal income tax
purposes.
If
you have not certified that your Social Security number or tax identification
number is correct and that you are not subject to withholding, you may be
subject to backup withholding at the applicable federal withholding tax rate on
taxable dividends, capital gains distributions and proceeds from the sale of
fund shares.
Taxes
on Creations and Redemptions of Creation Units
An
Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss equal to the difference between the market value
of the Creation Units at the time and the sum of the exchanger’s aggregate basis
in the securities surrendered plus the amount of cash paid for such Creation
Units. A person who redeems Creation Units will generally recognize a gain or
loss equal to the difference between the exchanger’s basis in the Creation Units
and the sum of the aggregate market value of any securities received plus the
amount of any cash received for such Creation Units. The IRS, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing “wash sales,” or on the
basis that there has been no significant change in economic
position.
Any
capital gain or loss realized upon the creation of Creation Units will generally
be treated as long-term capital gain or loss if the securities exchanged for
such Creation Units have been held for more than one year. Any capital gain or
loss realized upon the redemption of Creation Units will generally be treated as
long-term capital gain or loss if the shares comprising the Creation Units have
been held for more than one year. Otherwise, such capital gains or losses will
generally be treated as short-term capital gain or loss. Any loss upon a
redemption of Creation Units held for six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions to
the applicable Authorized Participant of long-term capital gain with respect to
the Creation Units (including any amounts credited to the Authorized Participant
as undistributed capital gains).
If
a fund redeems Creation Units in cash, it may recognize more capital gains than
it will if it redeems Creation Units in-kind.
Buying
a Dividend
Purchasing
fund shares in a taxable account shortly before a distribution is sometimes
known as buying a dividend. In taxable accounts, you must pay income taxes on
the distribution whether you reinvest the distribution or take it in cash. In
addition, you will have to pay taxes on the distribution whether the value of
your investment decreased, increased or remained the same after you bought the
fund shares.
The
risk in buying a dividend is that a fund’s portfolio may build up taxable income
and gains throughout the period covered by a distribution, as income is earned
and securities are sold at a profit. The fund distributes the income and gains
to you, after subtracting any losses, even if you did not own the shares when
the income was earned or the gains occurred.
If
you buy a dividend, you incur the full tax liability of the distribution period,
but you may not enjoy the full benefit of the income earned or the gains
realized in the fund’s portfolio.
Service,
Distribution and Administrative Fees
Investment
Company Act Rule 12b-1 permits investment companies that adopt a written plan to
pay certain expenses associated with the distribution of their shares out of
fund assets. The Board of Trustees has adopted a 12b-1 plan that allows the fund
to pay annual fees not to exceed 0.25% to the distributor for distribution and
individual shareholder services. However, the Board of Trustees has determined
not to authorize payment of a 12b-1 plan fee at this time.
Because
these fees may be used to pay for services that are not related to prospective
sales of the fund, to the extent that a fee is authorized, the fund will
continue to make payments under its plan even if it is closed to new investors.
Because these fees are paid out of the fund’s assets on an ongoing basis, to the
extent that a fee is authorized, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.
The
advisor or its affiliates may make payments to intermediaries for various
additional services, other expenses and/or the intermediaries’ distribution of
the fund out of their profits or other available sources. Such payments may be
made for one or more of the following: (1) distribution, which may include
expenses incurred by intermediaries for their sales activities with respect to
the fund, such as preparing, printing and distributing sales literature and
advertising materials and compensating registered representatives or other
employees of such financial intermediaries for their sales activities, as well
as the opportunity for the fund to be made available by such intermediaries; (2)
shareholder services, such as providing individual and custom investment
advisory services to clients of the financial intermediaries; and (3) marketing
and promotional services, including business planning assistance, educating
personnel about the fund, and sponsorship of sales meetings, which may include
covering costs of providing speakers, meals and other entertainment. The advisor
may pay partnership and/or sponsorship fees to support seminars, conferences,
and other programs designed to educate intermediaries about the fund and may
cover the expenses associated with attendance at such meetings, including travel
costs. The advisor and its affiliates may also pay fees related to obtaining
data regarding intermediary or financial advisor activities to assist American
Century with sales reporting, business intelligence and training and education
opportunities. These payments and activities are intended to provide an
incentive to intermediaries to sell the fund by educating them about the fund
and helping defray the costs associated with offering the fund. These payments
may create a conflict of interest by influencing the intermediary to recommend
the fund over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information. The amount of any payments
described in this paragraph is determined by the advisor or its affiliates, and
all such amounts are paid out of their available assets, and not paid by you or
the fund. As a result, the total expense ratio of the fund will not be affected
by any such payments.
Understanding
the Financial Highlights
The
table on the next page itemizes what contributed to the changes in share price
during the most recently ended fiscal year. It also shows the changes in share
price for this period in comparison to changes over the last five fiscal years
(or a shorter period if the fund is not five years old).
On
a per-share basis, the table includes as appropriate
•share
price at the beginning of the period
•investment
income and capital gains or losses
•distributions
of income and capital gains paid to investors
•share
price at the end of the period
The
table also includes some key statistics for the period as
appropriate
•Total
Return — the
overall percentage of return of the fund, assuming the reinvestment of all
distributions
•Expense
Ratio — the
operating expenses of the fund as a percentage of average net
assets
•Net
Income Ratio — the
net investment income of the fund as a percentage of average net
assets
•Portfolio
Turnover — the
percentage of the fund’s investment portfolio that is replaced during the
period
The
Financial Highlights have been audited by Deloitte & Touche LLP, independent
registered public accounting firm. The Report of Independent Registered Public
Accounting Firm and the financial statements are included in the fund’s annual
report, which is available upon request.
Avantis
Short-Term Fixed Income ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 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 |
Other
Capital(1) |
Net
Asset
Value,
End
of Period |
Total
Return(2) |
Operating
Expenses |
Net
Investment
Income
(Loss) |
Portfolio
Turnover
Rate(3) |
Net
Assets,
End
of
Period
(in thousands) |
| 2022 |
$50.00 |
0.57 |
(3.52) |
(2.95) |
(0.45) |
0.00(4) |
$46.60 |
(5.92)% |
0.15% |
1.18% |
38% |
$86,202 |
|
|
2021(5) |
$50.00 |
0.18 |
(0.02) |
0.16 |
(0.16) |
0.00(4) |
$50.00 |
0.33% |
0.15%(6) |
0.40%(6) |
49% |
$32,499 |
|
|
|
| |
| 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)Per-share
amount was less than $0.005.
(5)October
13, 2020 (fund inception) through August 31, 2021.
(6)Annualized.
Notes
Notes
Notes
Where
to Find More Information
Annual
and Semiannual Reports
Additional
information about the fund’s investments is available in the fund’s annual and
semiannual reports to shareholders. In the fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the fund’s performance during its last fiscal year. This prospectus
incorporates by reference the Report of Independent Registered Public Accounting
Firm and the financial statements included in the fund’s annual
report
to shareholders dated August 31, 2022.
Statement
of Additional Information (SAI)
The
SAI contains a more detailed legal description of the fund’s operations,
investment restrictions, policies and practices. The SAI
is incorporated by reference into this prospectus. This means that it is legally
part of this prospectus, even if you don’t request a copy.
You
may obtain a free copy of the SAI, annual reports and semiannual reports, and
you may ask questions about the fund or your accounts, online at
avantisinvestors.com, by contacting Avantis Investors at the addresses or
telephone numbers listed below or by contacting your financial
intermediary.
The
Securities and Exchange Commission (SEC)
Reports
and other information about the fund are available on the EDGAR database on the
SEC’s website at sec.gov, and copies of this information may be obtained, after
paying a duplicating fee, by electronic request at the following email address:
[email protected].
This
prospectus shall not constitute an offer to sell securities of the fund in any
state, territory, or other jurisdiction where the fund’s shares have not been
registered or qualified for sale, unless such registration or qualification is
not required, or under any circumstances in which such offer or solicitation
would be unlawful.
|
|
| |
|
Avantis
Investors by American Century Investments
avantisinvestors.com |
Financial
Professionals
P.O. Box 419385
Kansas City, Missouri
64141-6385
833-9AVANTIS |
|
|
|
|
|
|
|
|
| |
|
Investment
Company Act File No. 811-23305
CL-PRS-96431
2301 |
|
|
