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Corporate bonds are an important component of most fixed income portfolios. Many investors choose cap-weighted index funds for efficient exposure to this segment, often allocating separately to investment grade and high-yield ETFs to ensure they're invested across the quality spectrum.
Yet many don't realize that doing so may expose their portfolios to unseen risks:
American Century® Diversified Corporate Bond ETF (KORP) integrates fundamental and quantitative expertise in a systematically managed portfolio. By emphasizing investment grade credits while dynamically allocating a portion of the portfolio to high yield, the portfolio's holistic approach strives to offer enhanced return potential versus passive cap-weighted portfolios.
Dynamically adjusts investment grade and high yield components in an effort to balance interest rate and credit risk
Screens individual credits to seek those with sound fundamentals, reduced default risk, and attractive valuations
Adjusts industry and duration exposures as risks and opportunities emerge
Investors concerned that a cap-weighted index approach to corporate bonds could expose their portfolios to unwanted interest rate risk
Investors seeking enhanced risk-adjusted return potential from their corporate bond allocation
Investors who would like a corporate bond solution that adjusts to changing market conditions
Learn more about the KORP fund characteristics and performance.
Download the client-ready flyer to share with your clients.
1 Bloomberg Barclays U.S. Intermediate Corporate Bond Index. Source: Factset
Exchange Traded Funds (ETFs) are bought and sold through exchange trading at market price, not Net Asset Value (NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
The fund is an actively managed ETF that does not seek to replicate the performance of a specified index. To determine whether to buy or sell a security, the portfolio managers consider, among other things, various fund requirements and standards, along with economic conditions, alternative investments, interest rates and various credit metrics. If the portfolio manager considerations are inaccurate or misapplied, the fund’s performance may suffer.
Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.
The lower rated securities in which the fund invests are subject to greater credit risk, default risk and liquidity risk.
Exchange Traded Funds (ETFs): Foreside Fund Services, LLC - Distributor, not affiliated with American Century Investments Services, Inc.