Growth ETF QGRO Reweights Its Holdings: What’s Up, What’s Down

Markets have been on the move in recent weeks, and so too have asset managers. ETF managers have plenty of flexibility when it comes to adjusting the holdings in their funds, and the managers of growth ETF QGRO are no exception. The fund, which tracks the American Century U.S. Quality Growth Index, saw several changes to its holdings and weights in just the last week. That may hold some intriguing data points for both investors in the ETF and market watchers following the $2 billion-plus strategy.

See more: How This Tax Exempt ETF Can Boost Portfolios

The American Century U.S. Quality Growth ETF (QGRO) launched in September 2018. It charges 29 basis points to invest in U.S. firms with high growth potential and strong fundamentals relative to rival companies. Its index operators screen for factors like income and quality with metrics like cash flow, profitability, and more.

QGRO’s Growth ETF Changes

According to VettaFi data, the strategy saw some notable changes worth analyzing. It saw at least two stocks drop and added at least two notables, while adjusting the weights of six stocks still in its portfolio. Intriguingly, the trio of Alphabet, Inc. (GOOGL), Meta Platforms, Inc. (META), and Amazon, Inc. (AMZN), all saw their weights in the growth ETF drop. Between November 21 and 24, the weights dropped by 1.22%, 1.32%, and 1.74%, respectively.

Three other firms saw their weights in the ETF increase, by contrast. Amphenol Corporation (APH), Ralph Lauren Corporation (RL), and Expedia Group, Inc. (EXPE) saw their weights increase. Their weights in the ETF’s portfolio grew by 3.53%, 2.1%, and 1.33%, respectively, per VettaFi data.

The quality growth ETF’s top two drops included Itron Inc. (ITRI) and Booz Allen Hamilton Holding Corporation (BAH). Those firms sat at 0.76% and 0.72%, respectively, before being dropped. In terms of additions, its largest two additions by weight were Cardinal Health, Inc. (CAH) and HCA Healthcare, Inc. (HCA), coming in at 1.08% and 1.25% weights, respectively.

QGRO has returned 12.4% YTD with its approach to quality, growth-oriented names. The latest move, decreasing weight towards three megacap tech names, may intrigue investors looking to diversify their portfolios into other rising companies. Looking ahead, as it makes further moves, it may make for a solid equity addition to portfolios. 

VettaFi LLC (“VettaFi”) is the index provider for QGRO for which it receives an index licensing fee. However, QGRO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of QGRO.

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