The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  American Century Emerging Markets Bd ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns a Below Average People Pillar rating. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial underweight position in AA rated bonds and has an overweight in debt with three- to five-year maturities compared with category peers. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. American Century Emerging Markets Bd ETF earns an Average Process Pillar rating.    The predominant contributor to the rating is the firm's five-year retention rate of 83% over the period. Management team experience, which averages 18 years at this fund, also bolsters the process. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 51%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the Emerging Markets Bond Morningstar Category, this fund has been consistently sensitive to interest-rate changes over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the category average, the managers have been meaningfully underweight AA rated bonds in recent years. In the latest month, the strategy has also relatively underweighted AA rated bonds compared with Morningstar Category peers. Additionally, there's been a bias towards debt with three- to five-year maturities over the past few years. In the most recent month, however, the fund's exposure to debt with three- to five-year maturities was in line with the Morningstar Category average. Finally, during the past few years, the fund leaned away from securitized debt. Nevertheless, the fund's securitized debt exposure was in line with peers in the latest month.

 This strategy's 12-month yield is 5.9%, which is near its average peer. In addition, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 7.6%. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BB.

Average

Process

American Century Emerging Markets Bd ETF earns a Below Average People Pillar rating. The team is backed by John A. Lovito, the longest-tenured manager on the strategy, who provides over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 3.4 stars, demonstrating above-average risk-adjusted performance compared to category peers. John A. Lovito has an experienced backdrop of support. The three listed managers boast 18 years of average listed portfolio management experience. As a team, they manage two investment vehicles together, with an asset-weighted average Morningstar Medalist Rating of Neutral. This means, in aggregate, the team falls short and will struggle to produce positive alpha. The team has not run into any turnover issues, with similar management retention to peers. However, the most recent documented departure was 21 months ago.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Below Average

People

An evolution is taking hold at American Century, but some pluses and minuses continue, supporting a continued Parent rating of Average.
The firm entered the ETF market in 2019 by launching Avantis Investors, led by former executives from Dimensional, a strong firm that manages semi-passive strategies with value tilts and low fees. Avantis is now running roughly a dozen ETFs with similar features, while American Century’s in-house teams manage another 16 active ETFs. This effort is still fairly new and small as a percentage of assets under management, as most ETFs have been launched since 2019, but they help American Century compete with lower-cost passive and strategic-beta funds.
The bulk of the firm’s assets remain in U.S. mutual funds run by its internal boutiques. The U.S. value team has long been a standout, with tenured, stable management and good long-term results, but other investment teams haven’t produced consistently distinctive portfolios or performance, and some have continued to endure investment-professional turnover.
The firm’s ownership structure is noteworthy and supports a long-term strategy. While the firm has worked with a few large minority shareholders, including current 41% stakeholder Nomura, The Stowers Institute for Medical Research owns 45% of the firm but holds 70% of the equity voting rights. Employees own the rest, which should encourage retention.

Parent

American Century Emerging Markets Bond ETF

AEMB is an actively managed fund that invests in both investment- and non-investment grade government and corporate bonds from emerging market countries denominated predominately in US dollar but also local currencies.

ARK Innovation ETF

Avantis Core Municipal Fixed Income ETF

Avantis U.S. Small Cap Value ETF

Invesco BulletShares 2023 Municipal Bond ETF

Invesco BulletShares 2024 Municipal Bond ETF

Invesco BulletShares 2025 Municipal Bond ETF

Invesco BulletShares 2026 Municipal Bond ETF

Invesco BulletShares 2027 Municipal Bond ETF

Invesco BulletShares 2028 Municipal Bond ETF

VanEck China Bond ETF

iShares J.P. Morgan EM Corporate Bond ETF

WisdomTree Emerging Currency Strategy Fund

iShares California Muni Bond ETF

SPDR Bloomberg Emerging Markets Local Bond ETF

Morgan Stanley Emerging Markets Domestic Debt Fund Inc

Stone Harbor Emerging Markets Income Fund

Stone Harbor Emerging Markets Total Income Fund

WisdomTree Emerging Markets Local Debt Fund

iShares JP Morgan USD Emerging Markets Bond ETF

Global X Emerging Markets Bond ETF 

WisdomTree Emerging Markets Corporate Bond Fund

Western Asset Emerging Markets Debt Fund

Q4 Report: Tax-Exempt Bond Funds Hit Second Highest Quarterly Return As Fixed Income Rebounds From Q3 Loss

The U.S. Dollar Index (DXY) has been retreating as of late on the notion that interest rate cuts will happen in 2024, paving the way for an emerging markets bond rally in the new year.

2024 Emerging Markets Bond Rally Could Fuel This ETF

American Century Select High Yield ETF

The recent pause in interest rate hikes by the Federal Reserve could finally signal an end to monetary policy tightening. But fixed income investors can keep on reaching for high yield opportunities with a pair of active ETFs from American Century.

Reach for High Yield With These 2 Active ETFs

Given the current geopolitical risks swirling around emerging markets (EM), investors may want to avoid the EM assets altogether. But if yield and risk are mitigated with one exchange-traded fund (ETF), they may want to reconsider.

Get Yield and Mitigate Geopolitical Risk Globally With This ETF

American Century Multisector Floating Income ETF

The capital markets expect the U.S. Federal Reserve to eventually pivot from its tight monetary policy options. Therefore, fixed income investors should take advantage of yield while it's available.

Looking for Yield? 3 Active ETF Options to Consider

Central banks in emerging market (EM) countries are already cutting rates, supporting the case for investor allocation into the emerging markets bonds space. For an easier alternative, exchange traded funds (ETFs) could provide an ideal solution for broad exposure.

Early Rate Cuts Support the Case for Emerging Markets Bonds

The emerging market (EM) bonds space could be looking more attractive as central banks may be loosening monetary policy, but inclement weather could potentially challenge that upside. A combination of the COVID-19 pandemic, inflation, and rising interest rates over the past few years have kept investors from seeking opportunities in EM assets.

Upside in EM Bonds Could Be Challenged by Inclement Weather

Confidence in emerging markets (EM) debt is returning as more fixed income investors are seeking higher yield options as the U.S. Federal Reserve decelerates its pace of rate hikes heading into the second half of 2023. It's a change of pace from a bearish 2022 where investors sought safer debt in developed markets.

Strong Growth and Higher Yield Make Emerging Markets Debt Attractive

While the expectation in the capital markets is that inflation will eventually subside and interest rates will fall, fixed income investors may still want more yield. One place to look is emerging market (EM) bonds, or more specifically, the American Century Emerging Markets Bond ETF (AEMB).

Reach for More Yield With This Emerging Markets Bond ETF

Avantis Core Fixed Income ETF

Fixed income has roared back to life this year, as interest rate hikes in the U.S. upped yields significantly. Investors have had the opportunity to invest across a wide variety of U.S. fixed income offerings, from Treasuries to high yield.

American Century's Huang on Emerging Markets Debt Investing Opportunities

The emerging markets theme has been one of the hottest of the new year so far, with equities and bonds alike drawing attention from ETF investors. With the U.S. market anticipating a possible recession this year caused by the Fed's rate hikes, emerging markets have presented an appealing alternative.

Emerging Markets Bond ETF AEMB Makes Its Case

Invesco BulletShares 2022 USD Emerging Markets Debt ETF

Invesco BulletShares 2023 USD Emerging Markets Debt ETF

Invesco BulletShares 2024 USD Emerging Markets Debt ETF

VanEck Vct Emrg Shs

iShares Emerging Markets High Yield Bond ETF

VanEck J.P Morgan EM Local Currency Bond ETF

SPDR DoubleLine Emerging Markets Fixed Income ETF

First Trust Emerging Markets Local Currency Bond ETF

VanEck Emerging Markets High Yield Bond ETF

JPMorgan USD Emerging Markets Sovereign Bond ETF

KraneShares Asia Pacific High Yield Bond ETF

iShares J.P. Morgan EM Local Currency Bond ETF

Morgan Stanley Emerging Markets Debt Fund

Invesco Emerging Markets Sovereign Debt ETF

Templeton Emerging Markets Income Fund

Vanguard Emerging Markets Government Bond ETF

In emerging markets valuations look attractive today after the losses across financial markets early this year. PIMCO's investment process is founded upon our macroeconomic outlook and our in-house country and credit research.

Spotting Opportunities And Risks Across The EM Investment Universe

When it comes to diversifying a bond portfolio, getting emerging markets (EM) exposure doesn't have to be a daunting task. Despite headwinds like a rising dollar and global inflation, EM bonds can march to the beat of their own drum.

This ETF Makes Emerging Markets Bonds Less Daunting

Fixed income investors looking for more yield can give emerging markets (EM) a closer look as long as they're willing to accept the risk. Active management could help allay the fears given the current market environment.

Here's an Alternate Way to Get Emerging Market Bond Exposure

Entering Wednesday, nearly every US-fixed listed fixed income exchange traded, regardless of underlying investment objective and geography, was in the red on a year-to-date basis. The Federal Reserve likely didn't do bond ETFs any favors with an interest rate increase of 50 basis points.

This Bond ETF Is Down, But Rebound Potential Lurks

Emerging markets, like their U.S. brethren, are faltering this year, but sovereign debt issued by developing economies may rebound more rapidly than Treasuries while offering significantly higher levels of income. With some market observers moderately bullish on emerging markets debt, investors may want to evaluate exchange traded funds such as the American Century Emerging Markets [.

Assess AEMB for EM Bond Gains

Yes, the Federal Reserve raised interest rates last week, and yes, more rate hikes are coming. However, yields on high-quality domestic government bonds are still low and are likely to remain that way for some time.

Harnessing EM Debt to Boost Income Profiles

American Century Diversified Corporate Bond ETF

It's been a tough time for bonds. Fixed income markets were challenged in 2021, and with the Fed indicating that it could raise rates as many as three times this year, it looks as though 2022 won't be much better for the asset class.

Low-Duration Intermediate Fixed Income Serves as Attractive Diversifier

Invesco BulletShares 2021 USD Emerging Markets Debt ETF

iShares Interest Rate Hedged Emerging Markets Bond ETF

SPDR Bloomberg Emerging Markets USD Bond ETF

ProShares Short Term USD Emerging Markets Bond ETF

KraneShares Bloomberg China Bond Inclusion Index ETF

Krane Shares Trust - KraneShares CCBS China Corporate High Yield Bond USD Index ETF

KraneShares E Fund China Commercial Paper ETF

Cambria Sovereign High Yield Bond ETF

Performance of emerging markets local currency bonds has been negatively impacted by the U.S. dollar's strength since mid-year, despite the higher real yields and upside growth surprises in many emerging markets. Currency returns can be volatile, and external factors can have a bigger short-term impact on an emerging markets currency (EMFX) even if relatively attractive fundamentals may provide longer-term support.

Technical Tailwinds May Lift EMFX

American Century Sustainable Growth ETF

SPDR Gold MiniShares Trust

iShares Gold Trust

American Century Multisector Income ETF

Pacer Funds Trust - Pacer Military Times Best Employers ETF

In addition to launches, there were a significant number of closures and changes to existing ETFs.

ETF Odds & Ends: iShares' Mini Gold Fund

On Thursday, in response to growing client demand, American Century Investments, a $235 billion global asset manager, launched three additions to its active exchange traded funds (ETF) lineup. The American Century Sustainable Growth ETF (ESGY), the American Century Multisector Income ETF (MUSI), and the American Century Emerging Markets Bond ETF (AEMB) are all listed on the NYSE Arca exchange.

News for American Century Emerging Markets Bond ETF ETF (AEMB)