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Designed to Adapt to Changing Markets
Opportunities in corporate bonds continually change with the ups and downs of markets, interest rates, and economic conditions. See how these changes have meant both higher highs and lower lows for high yield versus investment grade bonds.
That's why you may want to consider a portfolio that can adapt when markets shift.
American Century Diversified Corporate Bond ETF (KORP) seeks to take advantage of changing opportunities with a holistic investment process that dynamically adjusts high yield and investment grade allocations to pursue:
KORP integrates fundamental and quantitative expertise in a systematically managed portfolio. The investment process combines three key components that are designed to balance interest rate and credit risk and provide enhanced returns versus passive strategies.
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
History has demonstrated that allocating an average of 15 percent high yield to an investment grade portfolio has lowered its overall volatility*. Yet high yield performance can vary. To take advantage of these changes, KORP dynamically adjusts its high yield allocation based on market conditions.
High yield has historically outperformed during periods with consistently low volatility and high spread differential.* Under these conditions, the portfolio overweights high yield.
High yield has historically underperformed during periods with low spread differential.* Under these conditions, the portfolio underweights high yield.
Annual returns 2007-2017. Bloomberg Barclays U.S. Corporate Bond Index, Bloomberg Barclays U.S. Corporate High-Yield Bond Index.
Source: Morningstar Direct
Learn more about the KORP fund characteristics and performance.
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* Historical analysis based from January 1993 to July 2017. Source: FactSet, American Century Investments
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.
This fund is an actively managed Exchange Traded Fund (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.