Pair ETFs to Access Small-Cap Growth and Value

American Century recently launched two actively managed exchange-traded funds: the American Century Small Cap Growth Insights ETF (ACSG) and the American Century Small Cap Value Insights ETF (ACSV). The offering targets investors seeking growth or value exposure in U.S. small-cap stocks. The Russell 2000 index has returned 17.3% year-to-date and 30.7% over the past 12 months.

ACSG builds a bottom-up portfolio that emphasizes companies with accelerating revenue and rising earnings. Portfolio managers use the firm’s proprietary research and fundamental analysis to identify firms with improving operating trends. The fund removes holdings that no longer meet its growth criteria.

ACSV constructs a bottom-up portfolio of higher-quality small-cap companies selected for stronger balance sheets and more stable earnings. The fund exits positions when target valuations are reached or when identified risk factors outweigh expected returns.

Both ETFs follow active mandates and include explicit sell disciplines. Each charges a management fee of 49 basis points. The active structure allows managers to adjust holdings in response to new financial data or changing company fundamentals.

Performance this year has tracked the small-cap rebound. ACSG returned about 17.8% year-to-date and ACSV returned roughly 21.8% year-to-date. The funds join a competitive market for actively managed small-cap products.

The two ETFs can be used together or separately to allocate small-cap exposure across growth and value styles. Managers present the identical fee as a way to simplify comparisons when assessing small-cap active exposure.

Small-cap stocks lagged early in the year before accelerating. Active strategies in smaller, lower-information market segments typically rely on fundamental research and stock selection to try to identify opportunities.