American Century sells a screen against concentration

Sandra Testani, American Century's head of ETF product and strategy, recalled on the latest ETF Prime that the entire active ETF universe was "$50 billion with a B" when the firm launched its first ETFs in 2018. The firm is now the fourth-largest issuer of active ETFs in the U.S., and host Nate Geraci put the franchise at 49 ETFs across the American Century and Avantis banners, with nearly $160 billion in assets under management and about $40 billion in year-to-date inflows.

Testani sorted those inflows into two client questions: how to restore genuine diversification inside an equity allocation, and how to navigate a fixed-income market that has turned uncertain again. The first question is where concentration risk does its work.

Testani resisted declaring the tape bad, noting U.S. stocks are up 13% after several strong years and that earnings have supported the move. But ten stocks now represent 40% of the S&P 500 and 60% of the Russell 1000 Growth, a split that is pushing clients to ask whether their growth sleeve is actually diversified. The answer the firm is selling is the American Century U.S. Quality Growth ETF (QGRO): 29 basis points for growth exposure guided through a quality screen.

The wrapper is becoming the lesser part of that pitch. As this publication has argued, active managers are no longer treating the ETF as a product experiment but as a distribution necessity, and QGRO is the strategy-level consequence. The same screen logic is visible in international equity, where QINT's run has pressed the case for quality-screened international exposure.

Testani said the firm focuses on building blocks rather than the latest new toys, and the $40 billion year backs that stance up to a point. Flows, however, measure demand, not whether a screen changes outcomes. The tougher test for QGRO will come in the next real drawdown, when investors learn whether paying 29 basis points for less concentration buys protection or merely a seat belt on the same index.