American Century Focused Large Cap Value ETF (FLV) seeks to provide long-term capital appreciation by investing in undervalued large-cap U.S. stocks. The fund uses fundamental analysis to identify companies trading below their intrinsic value based on metrics like price-to-earnings, price-to-book, and free cash flow yields.
How It Works
FLV employs an actively managed approach where portfolio managers conduct bottom-up fundamental research to select 40-60 large-cap value stocks. The fund focuses on companies with strong balance sheets, sustainable competitive advantages, and catalysts for value realization. Holdings are weighted based on conviction levels rather than market capitalization, with position sizes typically ranging from 1-4% each. Portfolio turnover is moderate as managers hold positions until value is realized or investment thesis changes.
Key Features
- Concentrated portfolio of 40-60 high-conviction value picks allows for meaningful outperformance potential versus broad market indices
- Active management by experienced American Century team with 25+ year track record in large-cap value investing strategies
- Recently launched in October 2023, offering investors access to proven value investment process in low-cost ETF structure
Risks
- This ETF can lose value if selected value stocks fail to appreciate or fall further out of favor, as concentrated holdings amplify individual stock risk
- Value investing may underperform growth strategies for extended periods, particularly during technology-driven bull markets like 2010-2021
- Large-cap value stocks typically decline 25-35% during bear markets and may lag small-cap or international stocks during economic recoveries
Who Should Own This
Best suited for investors with 3-5 year time horizons seeking active large-cap value exposure as a satellite holding (10-25% of equity allocation). Medium-to-high risk tolerance required due to concentrated portfolio and value style volatility. Ideal for those believing current market favors value over growth or wanting professional stock selection.